[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[Senate]
[Pages 7121-7155]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4579. Mr. WYDEN (for himself and Mr. Schumer) submitted an 
amendment intended to be proposed by him to the bill H.R. 2881, to 
amend title 49, United States Code, to authorize appropriations for the 
Federal Aviation Administration for fiscal years 2008 through 2011, to 
improve aviation safety and capacity, to provide stable funding for the 
national aviation system, and for other purposes; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. AIR CARRIERS REQUIRED TO HONOR TICKETS FOR SUSPENDED 
                   SERVICE.

       (a) In General.--Each air carrier that provides scheduled 
     air transportation on a route shall provide, to the extent 
     practicable, air transportation to passengers ticketed for 
     air transportation on that route by any other air carrier 
     that suspends, interrupts, or discontinues air passenger 
     service on the route by reason of insolvency or bankruptcy of 
     the other air carrier.
       (b) Passenger Obligation.--An air carrier is not required 
     to provide air transportation under subsection (a) to a 
     passenger unless that passenger makes alternative 
     arrangements with the air carrier for such transportation not 
     later than 60 days after the date on which that passenger's 
     air transportation was suspended, interrupted, or 
     discontinued (without regard to the originally scheduled 
     travel date on the ticket).
  SA 4580. Mr. WYDEN submitted an amendment intended to be proposed by 
him to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert the following:

     SEC. __. DEFINITION OF FABRICATED.

       As used in section 21.191(g) of title 14, Code of Federal 
     Regulations, the term ``fabricated'' means ``to assemble from 
     parts''.
                                 ______
                                 
  SA 4581. Ms. KLOBUCHAR submitted an amendment intended to be proposed 
by her to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; which was ordered to lie on the table; as 
follows:


[[Page 7122]]

       At the appropriate place, insert the following:

     SEC, ------. GAO STUDY OF AIR CARRIER FUELS AND FUEL-
                   EFFICIENCY.

       (a) In General.--Within 30 days after the date of enactment 
     of the Aviation Investment and Modernization Act of 2008, the 
     Comptroller General shall initiate an investigation of--
       (1) the prospects for using alternative fuels for jet 
     aircraft in the United States air carrier fleet;
       (2) the prospects for increasing the fuel efficiency for 
     the United States air carrier fleet; and
       (3) the effect of crude oil prices on the U.S. air carrier 
     industry.
       (b) Report.--No later than July 1, 2009, the Comptroller 
     General shall submit a report to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure containing the Comptroller General's findings 
     and recommendations.
                                 ______
                                 
  SA 4582. Mr. SCHUMER (for himself, Mrs. Clinton, Mr. Lautenberg, Mr. 
Menendez, Mrs. Murray, and Ms. Cantwell) submitted an amendment 
intended to be proposed by him to the bill H.R. 2881, to amend title 
49, United States Code, to authorize appropriations for the Federal 
Aviation Administration for fiscal years 2008 through 2011, to improve 
aviation safety and capacity, to provide stable funding for the 
national aviation system, and for other purposes; which was ordered to 
lie on the table; as follows:

       Strike section 834 and insert the following:

     SEC. 834. EXEMPTION OF CERTAIN COMMERCIAL CARGO FROM THE 
                   HARBOR MAINTENANCE TAX.

       (a) In General.--Section 4462 is amended by redesignating 
     subsection (i) as subjection (j) and by inserting after 
     subsection (h) the following new subsection:
       ``(i) Exemption for Certain Short Sea Shipping Cargo.--
       ``(1) In general.--No tax shall be imposed under section 
     4461(a) with respect to commercial cargo contained in 
     intermodal cargo containers and loaded by crane on a vessel, 
     or commercial cargo loaded on a vessel by means of wheeled 
     technology--
       ``(A) that is loaded at a port in the United States 
     mainland and unloaded at another port in the United States 
     mainland after transport solely by coastal route or river or 
     unloaded at a port in Canada located in the Great Lakes Saint 
     Lawrence Seaway System, or
       ``(B) that is loaded at a port in Canada located in the 
     Great Lakes Saint Lawrence Seaway System and unloaded at a 
     port in the United States mainland.
       ``(2) United states mainland.--For purposes of this 
     subsection, the term `United States mainland' has the meaning 
     given such term in subsection (b).
       ``(3) Great lakes saint lawrence seaway system.--For the 
     purposes of this subsection, the term `Great Lakes Saint 
     Lawrence Seaway System' means the waterway between Duluth, 
     Minnesota and Sept. Iles, Quebec, encompassing the five Great 
     Lakes, their connecting channels, and the Saint Lawrence 
     River.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.
                                 ______
                                 
  SA 4583. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert the following:

     SEC. _____. SPECIAL RULE FOR NEW ORLEANS AND LAKE CHARLES 
                   AIRPORTS.

       (a) In General.--Section 40117 is amended by adding at the 
     end the following:
       ``(o) Special Rule for New Orleans and Lake Charles 
     Airports.--
       ``(1) Authority to recover losses resulting from hurricanes 
     katrina and rita.--Subject to the requirements of this 
     subsection, for Louis Armstrong New Orleans International 
     Airport and Lake Charles Regional Airport, the recovery of 
     covered losses shall be treated as an eligible airport-
     related project under subsection (a)(3).
       ``(2) Covered losses defined.--In this subsection, the term 
     `covered losses' means losses, including operating expenses, 
     that--
       ``(A) are incurred by an airport referred to in paragraph 
     (1) in the period beginning August 29, 2005, and ending 
     December 31, 2008;
       ``(B) are directly and substantially related to the 
     continued operation of the airport following Hurricanes 
     Katrina and Rita; and
       ``(C) have not been recovered from another source.
       ``(3) Amount and duration of charges.--The Secretary may 
     approve an application that an eligible agency has submitted 
     under subsection (c) for authority to use not more than \1/2\ 
     of the collected passenger facility charge to finance the 
     recovery of covered losses.
       ``(4) Limitation.--Notwithstanding any other provision of 
     this subsection, the Secretary shall not approve an 
     application that an eligible agency has submitted under 
     subsection (c) for authority to use not more than \1/2\ of 
     the collected passenger facility charges to finance the 
     recovery of covered losses by an airport if the Secretary and 
     the eligible agency agree that covered losses incurred by the 
     airport have been or will be recovered from another source.
       ``(5) Reporting requirements.--As part of an application 
     that an eligible agency submits under subsection (c) for 
     authority to use not more than \1/2\ of the collected 
     passenger facility charge to finance the recovery of covered 
     losses, the Secretary may require the submission of such 
     information as the Secretary considers necessary--
       ``(A) to verify the covered losses;
       ``(B) to ensure the covered losses are directly and 
     substantially related to the continued operation of the 
     airport following Hurricanes Katrina and Rita; and
       ``(C) to ensure that the covered losses have not been 
     recovered from any other funding source.
       ``(6) Community disaster loan repayments.--A passenger 
     facility charge collected pursuant to this subsection shall 
     not be treated as revenue of a local government for purposes 
     of cancellation of repayment of all or any part of a 
     community disaster loan made to the local government under 
     section 417(c) of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5184(c)).''.
       (b) Special Rule Relating to Community Disaster Loans.--A 
     passenger facility charge collected under section 40117 of 
     title 49, United States Code, and any amounts borrowed from 
     the Federal Aviation Administration using passenger facility 
     revenues as collateral shall not be treated as revenue of a 
     local government for purposes of cancellation of repayment of 
     all or any part of a community disaster loan made to the 
     local government under section 417(c) of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act (42 
     U.S.C. 5184(c)).
                                 ______
                                 
  SA 4584. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert the following:

     SEC. __. POLLOCK MUNICIPAL AIRPORT, LOUISIANA.

       (a) Findings.--Congress makes the following findings:
       (1) Pollock Municipal Airport located in Pollock, Louisiana 
     (in this section referred to as the ``airport''), has never 
     been included in the National Plan of Integrated Airport 
     Systems pursuant to section 47103 of title 49, United States 
     Code, and is therefore not considered necessary to meet the 
     current or future needs of the national aviation system.
       (2) Closing the airport will not adversely affect aviation 
     safety, aviation capacity, or air commerce.
       (b) Request for Closure.--
       (1) Approval.--Notwithstanding any other provision of law, 
     requirement, or agreement and subject to the requirements of 
     this section, the Administrator of the Federal Aviation 
     Administration shall--
       (A) approve a request from the town of Pollock, Louisiana, 
     to close the airport as a public airport; and
       (B) release the town from any term, condition, reservation, 
     or restriction contained in a surplus property conveyance or 
     transfer document, and from any order or finding by the 
     Department of Transportation on the use and repayment of 
     airport revenue applicable to the airport, that would 
     otherwise prevent the closure of the airport and 
     redevelopment of the facilities to nonaeronautical uses.
       (2) Continued airport operation prior to approval.--The 
     town of Pollock shall continue to operate and maintain the 
     airport until the Administrator grants the town's request for 
     closure of the airport.
       (3) Use of proceeds from sale of airport.--Upon the 
     approval of the request to close the airport, the town of 
     Pollock shall obtain fair market value for the sale of the 
     airport property and shall immediately upon receipt transfer 
     all such proceeds from the sale of the airport property to 
     the sponsor of a public airport designated by the 
     Administrator to be used for the development or improvement 
     of such airport.
       (4) Relocation of aircraft.--Before closure of the airport, 
     the town of Pollock shall provide adequate time for any 
     airport-based aircraft to relocate.
                                 ______
                                 
  SA 4585. Mr. ROCKEFELLER (for himself, Mr. Inouye, Mr. Baucus, and 
Mr. Grassley) proposed an amendment

[[Page 7123]]

to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; as follows:

  Strike out all after the enacting clause and insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Aviation 
     Investment and Modernization Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Amendments to title 49, United States Code.
Sec. 3. Effective date.

                 TITLE I--AUTHORIZATIONS AND FINANCING

Sec. 101. Operations.
Sec. 102. Air navigation facilities and equipment.
Sec. 103. Research and development.
Sec. 104. Airport planning and development and noise compatibility 
              planning and programs.
Sec. 105. Other aviation programs.
Sec. 106. Delineation of next generation air transportation system 
              projects.
Sec. 107. Funding for administrative expenses for airport programs.

                     TITLE II--AIRPORT IMPROVEMENTS

Sec. 201. Reform of passenger facility charge authority.
Sec. 202. Passenger facility charge pilot program.
Sec. 203. Amendments to grant assurances.
Sec. 204. Government share of project costs.
Sec. 205. Amendments to allowable costs.
Sec. 206. Sale of private airport to public sponsor.
Sec. 207. Pilot program for airport takeover of air navigation 
              facilities.
Sec. 208. Government share of certain air project costs.
Sec. 209. Miscellaneous amendments.
Sec. 210. State block grant program.
Sec. 211. Airport funding of special studies or reviews.
Sec. 212. Grant eligibility for assessment of flight procedures.
Sec. 213. Safety-critical airports.
Sec. 214. Expanded passenger facility charge eligibility for noise 
              compatibility projects.
Sec. 215. Environmental mitigation demonstration pilot program.
Sec. 216. Allowable project costs for airport development program.
Sec. 217. Glycol recovery vehicles.
Sec. 218. Research improvement for aircraft.

                 TITLE III--FAA ORGANIZATION AND REFORM

Sec. 301. Air Traffic Control Modernization Oversight Board.
Sec. 302. ADS-B support pilot program.
Sec. 303. Facilitation of next generation air traffic services.
Sec. 304. Clarification of authority to enter into reimbursable 
              agreements.
Sec. 305. Clarification to acquisition reform authority.
Sec. 306. Assistance to other aviation authorities.
Sec. 307. Presidential rank award program.
Sec. 308. Next generation facilities needs assessment.
Sec. 309. Next generation air transportation system planning office.
Sec. 310. Definition of air navigation facility.
Sec. 311. Improved management of property inventory.
Sec. 312. Educational requirements.
Sec. 313. FAA personnel management system.
Sec. 314. Rulemaking and report on ADS-B implementation.
Sec. 315. FAA task force on air traffic control facility conditions.
Sec. 316. State ADS-B equipage bank pilot program.

 TITLE IV--AIRLINE SERVICE AND SMALL COMMUNITY AIR SERVICE IMPROVEMENTS

Sec. 401. Airline contingency service requirements.
Sec. 402. Publication of customer service data and flight delay 
              history.
Sec. 403. EAS connectivity program.
Sec. 404. Extension of final order establishing mileage adjustment 
              eligibility.
Sec. 405. EAS contract guidelines.
Sec. 406. Conversion of former EAS airports.
Sec. 407. EAS reform.
Sec. 408. Clarification of air carrier fee disputes.
Sec. 409. Small community air service.
Sec. 410. Contract tower program.
Sec. 411. Airfares for members of the armed forces.
Sec. 412. Expansion of DOT airline consumer complaint investigations.
Sec. 413. EAS marketing.
Sec. 414. Extraperimetal and intraperimetal slots at Ronald Reagan 
              Washington National Airport.
Sec. 415. Establishment of advisory committee for aviation consumer 
              protection.
Sec. 416. Rural aviation improvement.

                        TITLE V--AVIATION SAFETY

Sec. 501. Runway safety equipment plan.
Sec. 502. Aircraft fuel tank safety improvement.
Sec. 503. Judicial review of denial of airman certificates.
Sec. 504. Release of data relating to abandoned type certificates and 
              supplemental type certificates.
Sec. 505. Design organization certificates.
Sec. 506. FAA access to criminal history records or database systems.
Sec. 507. Flight crew fatigue.
Sec. 508. Increasing safety for helicopter emergency medical service 
              operators. 
Sec. 509. Cabin crew communication.
Sec. 510. Clarification of memorandum of understanding with osha.
Sec. 511. Acceleration of development and implementation of required 
              navigation performance approach procedures.
Sec. 512. Enhanced safety for airport operations.
Sec. 513. Improved safety information.
Sec. 514. Voluntary disclosure reporting process improvements.
Sec. 515. Procedural improvements for inspections.
Sec. 516. Independent review of safety issues.
Sec. 517. National review team.
Sec. 518. FAA Academy improvements.
Sec. 519. Reduction of runway incursions and operational errors.

                      TITLE VI--AVIATION RESEARCH

Sec. 601. Airport cooperative research program.
Sec. 602. Reduction of noise, emissions, and energy consumption from 
              civilian aircraft.
Sec. 603. Production of clean coal fuel technology for civilian 
              aircraft. 
Sec. 604. Advisory committee on future of aeronautics.
Sec. 605. Research program to improve airfield pavements.
Sec. 606. Wake turbulence, volcanic ash, and weather research. 
Sec. 607. Incorporation of unmanned aerial systems into FAA plans and 
              policies.
Sec. 608. Reauthorization of center of excellence in applied research 
              and training in the use of advanced materials in 
              transport aircraft.
Sec. 609. Pilot program for zero emission airport vehicles.
Sec. 610. Reduction of emissions from airport power sources.

                        TITLE VII--MISCELLANEOUS

Sec. 701. General authority.
Sec. 702. Human intervention management study.
Sec. 703. Airport program modifications.
Sec. 704. Miscellaneous program extensions.
Sec. 705. Extension of competitive access reports.
Sec. 706. Update on overflights.
Sec. 707. Technical corrections.
Sec. 708. FAA technical training and staffing.
Sec. 709. Commercial air tour operators in national parks.
Sec. 710. Phaseout of stage 1 and 2 aircraft.
Sec. 711. Weight restrictions at teterboro airport.
Sec. 712. Pilot program for redevelopment of airport properties.
Sec. 713. Air carriage of international mail.
Sec. 714. Transporting musical instruments.
Sec. 715. Recycling plans for airports.
Sec. 716. Consumer information pamphlet.

     TITLE VIII--AMERICAN INFRASTRUCTURE INVESTMENT AND IMPROVEMENT

Sec. 800. Short title, etc.

 Subtitle A--Airport and Airway Trust Fund Provisions and Related Taxes

Sec. 801. Extension of taxes funding Airport and Airway Trust Fund.
Sec. 802. Extension of Airport and Airway Trust Fund expenditure 
              authority.
Sec. 803. Modification of excise tax on kerosene used in aviation .
Sec. 804. Air Traffic Control System Modernization Account.
Sec. 805. Treatment of fractional aircraft ownership programs.
Sec. 806. Termination of exemption for small aircraft on nonestablished 
              lines.
Sec. 807. Transparency in passenger tax disclosures.
Sec. 808. Required funding of new accruals under air carrier pension 
              plans.

          Subtitle B--Increased Funding for Highway Trust Fund

Sec. 811. Replenish emergency spending from Highway Trust Fund.
Sec. 812. Suspension of transfers from highway trust fund for certain 
              repayments and credit.
Sec. 813. Taxation of taxable fuels in foreign trade zones.
Sec. 814. Clarification of penalty for sale of fuel failing to meet EPA 
              regulations.
Sec. 815. Treatment of qualified alcohol fuel mixtures and qualified 
              biodiesel fuel mixtures as taxable fuels.
Sec. 816. Calculation of volume of alcohol for fuel credits.

[[Page 7124]]

Sec. 817. Bulk transfer exception not to apply to finished gasoline.
Sec. 818. Increase and extension of Oil Spill Liability Trust Fund tax.
Sec. 819. Application of rules treating inverted corporations as 
              domestic corporations to certain transactions occurring 
              after March 20, 2002.
Sec. 820. Denial of deduction for punitive damages.
Sec. 821. Motor fuel tax enforcement advisory commission.
Sec. 822. Highway Trust Fund conforming expenditure amendment.

    Subtitle C--Additional Infrastructure Modifications and Revenue 
                               Provisions

Sec. 831. Restructuring of New York Liberty Zone tax credits.
Sec. 832. Participants in government section 457 plans allowed to treat 
              elective deferrals as Roth contributions.
Sec. 833. Increased information return penalties.
Sec. 834. Exemption of certain commercial cargo from harbor maintenance 
              tax.
Sec. 835. Credit to holders of qualified rail infrastructure bonds.
Sec. 836. Repeal of suspension of certain penalties and interest.
Sec. 837. Denial of deduction for certain fines, penalties, and other 
              amounts.
Sec. 838. Revision of tax rules on expatriation.

     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 take effect on the date of 
     enactment.

                 TITLE I--AUTHORIZATIONS AND FINANCING

     SEC. 101. OPERATIONS.

       (a) In General.--Section 106(k)(1) is amended by striking 
     subparagraphs (A) through (D) and inserting the following:
       ``(A) $8,726,000,000 for fiscal year 2008;
       ``(B) $8,990,000,000 for fiscal year 2009;
       ``(C) $9,330,000,000 for fiscal year 2010; and
       ``(D) $9,620,000,000 for fiscal year 2011.''.
       (b) Safety Project.--Section 106(k)(2)(F) is amended by 
     striking ``2007'' and inserting ``2011''.

     SEC. 102. AIR NAVIGATION FACILITIES AND EQUIPMENT.

       Section 48101(a) is amended by striking paragraphs (1) 
     through (4) and inserting the following:
       ``(1) $2,572,000,000 for fiscal year 2008;
       ``(2) $2,923,000,000 for fiscal year 2009, of which 
     $400,000,000 is derived from the Air Traffic Control System 
     Modernization Account of the Airport and Airways Trust Fund;
       ``(3) $3,079,000,000 for fiscal year 2010, of which 
     $400,000,000 is derived from the Air Traffic Control System 
     Modernization Account of the Airport and Airways Trust Fund; 
     and
       ``(4) $3,317,000,000 for fiscal year 2011, of which 
     $400,000,000 is derived from the Air Traffic Control System 
     Modernization Account of the Airport and Airways Trust 
     Fund.''.

     SEC. 103. RESEARCH AND DEVELOPMENT.

       Section 48102 is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--Not more than 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 
     conducting civil aviation research and development under 
     sections 44504, 44505, 44507, 44509, and 44511 through 44513 
     of this title:
       ``(1) $140,000,000 for fiscal year 2008.
       ``(2) $191,000,000 for fiscal year 2009.
       ``(3) $191,000,000 for fiscal year 2010.
       ``(4) $194,000,000 for fiscal year 2011.'';
       (2) by striking subsections (c) through (h); and
       (3) by adding at the end the following:
       ``(c) Research Grants Program Involving Undergraduate 
     Students.--The Administrator of the Federal Aviation 
     Administration shall establish a program to utilize 
     undergraduate and technical colleges, including Historically 
     Black Colleges and Universities, Hispanic Serving 
     Institutions, tribally controlled colleges and universities, 
     and Alaska Native and Native Hawaiian serving institutions in 
     research on subjects of relevance to the Federal Aviation 
     Administration. Grants may be awarded under this subsection 
     for--
       ``(1) research projects to be carried out at primarily 
     undergraduate institutions and technical colleges;
       ``(2) research projects that combine research at primarily 
     undergraduate institutions and technical colleges with other 
     research supported by the Federal Aviation Administration;
       ``(3) research on future training requirements on projected 
     changes in regulatory requirements for aircraft maintenance 
     and power plant licensees; or
       ``(4) research on the impact of new technologies and 
     procedures, particularly those related to aircraft flight 
     deck and air traffic management functions, and on training 
     requirements for pilots and air traffic controllers.''.

     SEC. 104. AIRPORT PLANNING AND DEVELOPMENT AND NOISE 
                   COMPATIBILITY PLANNING AND PROGRAMS.

       Section 48103 is amended by striking paragraphs (1) through 
     (4) and inserting the following:
       ``(1) $3,800,000,000 for fiscal year 2008;
       ``(2) $3,900,000,000 for fiscal year 2009;
       ``(3) $4,000,000,000 for fiscal year 2010; and
       ``(4) $4,100,000,000 for fiscal year 2011.''.

     SEC. 105. OTHER AVIATION PROGRAMS.

       Section 48114 is amended--
       (1) by striking ``2007'' in subsection (a)(1)(A) and 
     inserting ``2011'';
       (2) by striking ``2007,'' in subsection (a)(2) and 
     inserting ``2011,''; and
       (3) by striking ``2007'' in subsection (c)(2) and inserting 
     ``2011''.

     SEC. 106. DELINEATION OF NEXT GENERATION AIR TRANSPORTATION 
                   SYSTEM PROJECTS.

       Section 44501(b) is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (3);
       (2) by striking ``defense.'' in paragraph (4) and inserting 
     ``defense; and''; and
       (3) by adding at the end thereof the following:
       ``(5) a list of projects that are part of the Next 
     Generation Air Transportation System and do not have as a 
     primary purpose to operate or maintain the current air 
     traffic control system.''.

     SEC. 107. FUNDING FOR ADMINISTRATIVE EXPENSES FOR AIRPORT 
                   PROGRAMS.

       (a) In General.--Section 48105 is amended to read as 
     follows:

     ``Sec. 48105. Airport programs administrative expenses

       ``Of the amount made available under section 48103 of this 
     title, the following may be available for administrative 
     expenses relating to the Airport Improvement Program, 
     passenger facility charge 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;
       ``(3) for fiscal year 2010, $89,000,000; and
       ``(4) for fiscal year 2011, $93,000,000.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     481 is amended by striking the item relating to section 48105 
     and inserting the following:

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

                     TITLE II--AIRPORT IMPROVEMENTS

     SEC. 201. REFORM OF PASSENGER FACILITY CHARGE AUTHORITY.

       (a) Passenger Facility Charge Streamlining.--Section 
     40117(c) is amended to read as follows:
       ``(c) Procedural Requirements for Imposition of Passenger 
     Facility Charge.--
       ``(1) In general.--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 charge program, including--
       ``(A) the total amount of program revenue held by the 
     agency at the beginning of the 12 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 12-
     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 12-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 
     copy 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), (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

[[Page 7125]]

     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 shall 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) that the notice include a detailed financial plan 
     for the proposed project; and
       ``(iv) that the notice include 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 subparagraph, 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 shall 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 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, 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 subparagraph (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 increased passenger facility 
     charge or intermodal ground access project.--
       ``(A) An eligible agency may not collect or use a passenger 
     facility charge to finance an intermodal ground access 
     project, or increase a passenger facility charge, 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 or to increase 
     a passenger facility charge. 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 or the increased 
     passenger facility charge. 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.''.
       (b) Conforming Amendments.--
       (1) References.--
       (A) Section 40117(a) is amended--
       (i) by striking ``fee'' in the heading for paragraph (5) 
     and inserting ``charge''; and
       (ii) by striking ``fee'' each place it appears in 
     paragraphs (5) and (6) and inserting ``charge''.
       (B) Subsections (b), and subsections (d) through (m), of 
     section 40117 are amended--
       (i) by striking ``fee'' or ``fees'' each place either 
     appears and inserting ``charge'' or ``charges'', 
     respectively; and
       (ii) by striking ``Fee'' in the subsection caption for 
     subsection (l), and ``Fees'' in the subsection captions for 
     subsections (e) and (m), and inserting ``Charge'' and 
     ``Charges'', respectively.
       (C) The caption for section 40117 is amended to read as 
     follows:

     ``Sec. 40117. Passenger facility charges''.

       (D) The chapter analysis for chapter 401 is amended by 
     striking the item relating to section 40117 and inserting the 
     following:

``40117. Passenger facility charges.''.
       (2) Limitations on approving applications.--Section 
     40117(d) is amended--
       (A) 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) by striking ``specific'' in paragraph (1);
       (C) by striking paragraph (2) and inserting the following:
       ``(2) the project is an eligible airport-related project; 
     and'';
       (D) by striking ``each of the specific projects; and'' in 
     paragraph (3) and inserting ``the project.''; and
       (E) by striking paragraph (4).
       (3) Limitations on imposing charges.--Section 40117(e)(1) 
     is amended to read as follows: ``(1) 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 by striking ``long-term''.
       (5) Compliance.--Section 40117(h) is amended--
       (A) by redesignating paragraph (3) as paragraph (4); and
       (B) by inserting after paragraph (2) the following:
       ``(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.''.
       (6) Pilot program for pfc at nonhub airports.--Section 
     40117(l) is amended--
       (A) by striking ``(c)(2)'' in paragraph (2) and inserting 
     ``(c)(3)''; and
       (B) by striking ``date that is 3 years after the date of 
     issuance of regulations to carry out this subsection.'' in 
     paragraph (7) and inserting ``date of issuance of regulations 
     to carry out subsection (c) of this section, as amended by 
     the Aviation Investment and Modernization Act of 2008.''.
       (7) Prohibition on approving pfc applications for airport 
     revenue diversion.--Section 47111(e) is amended by striking 
     ``sponsor'' the second place it appears in the first

[[Page 7126]]

     sentence and all that follows and inserting ``sponsor. A 
     sponsor shall not propose collection or use of passenger 
     facility charges for any new projects under paragraphs (3) 
     through (6) of section 40117(c) unless the Secretary 
     determines that the sponsor has taken corrective action to 
     address the violation and the violation no longer exists.''.

     SEC. 202. PASSENGER FACILITY CHARGE PILOT PROGRAM.

       Section 40117 is amended by adding at the end thereof the 
     following:
       ``(n) Alternative Passenger Facility Charge Collection 
     Pilot Program.--
       ``(1) In general.--The Secretary shall establish and 
     conduct a pilot program at not more than 6 airports under 
     which an eligible agency may impose a passenger facility 
     charge under this section without regard to the dollar amount 
     limitations set forth in paragraph (1) or (4) of subsection 
     (b) if the participating eligible agency meets the 
     requirements of paragraph (2).
       ``(2) Collection requirements.--
       ``(A) Direct collection.--An eligible agency participating 
     in the pilot program--
       ``(i) may collect the charge from the passenger at the 
     facility, via the Internet, or in any other reasonable 
     manner; but
       ``(ii) may not require or permit the charge to be collected 
     by an air carrier or foreign air carrier for the flight 
     segment.
       ``(B) PFC collection requirement not to apply.--Subpart C 
     of part 158 of title 14, Code of Federal Regulations, does 
     not apply to the collection of the passenger facility charge 
     imposed by an eligible agency participating in the pilot 
     program.''.

     SEC. 203. AMENDMENTS TO GRANT ASSURANCES.

       Section 47107 is amended--
       (1) by striking ``made;'' in subsection (a)(16)(D)(ii) 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;'';
       (2) by striking ``purpose;'' in subsection (c)(2)(A)(i) and 
     inserting ``purpose, which includes serving as noise buffer 
     land;'';
       (3) by striking ``paid to the Secretary for deposit in the 
     Fund if another eligible project does not exist.'' in 
     subsection (c)(2)(B)(iii) and inserting ``reinvested in 
     another project at the airport or transferred to another 
     airport as the Secretary prescribes.''; and
       (4) by redesignating paragraph (3) of subsection (c) as 
     paragraph (4) and inserting after paragraph (2) the 
     following:
       ``(3) In approving the reinvestment or transfer of proceeds 
     under paragraph (2)(C)(iii), the Secretary shall give 
     preference, in descending order, to--
       ``(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 section 47114, 47115, or 47117 
     and meets the requirements of this chapter;
       ``(iv) transfer to the 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. 204. GOVERNMENT SHARE OF PROJECT COSTS.

       (a) Federal Share.--Section 47109 is amended--
       (1) by striking ``subsection (b) or subsection (c)'' in 
     subsection (a) and inserting ``subsection (b), (c), or (e)''; 
     and
       (2) 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 95 percent for 2 fiscal years following such 
     change in hub status.''.
       (b) Transitioning Airports.--Section 47114(f)(3)(B) is 
     amended by striking ``year 2004.'' and inserting ``years 
     2008, 2009, 2010, and 2011.''.

     SEC. 205. AMENDMENTS TO ALLOWABLE COSTS.

       Section 47110 is amended--
       (1) by striking subsection (d) and inserting the following:
       ``(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) by striking ``facilities, including fuel farms and 
     hangars,'' in subsection (h) and inserting ``facilities, as 
     defined by section 47102,''.

     SEC. 206. SALE OF PRIVATE AIRPORT TO PUBLIC SPONSOR.

       Section 47133(b) is amended--
       (1) by resetting the text of the subsection as an indented 
     paragraph 2 ems from the left margin;
       (2) by inserting ``(1)'' before ``Subsection''; and
       (3) by adding at the end thereof the following:
       ``(2) In the case of a privately owned airport, subsection 
     (a) shall not apply 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. 207. 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 
     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 paragraph (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) Definitions.--In this section:
       ``(1) Sponsor.--The term `sponsor' has the meaning given 
     that term in section 40102.
       ``(2) Terminal area air navigation equipment.--The term 
     `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.
       ``(f) 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 chapter analysis for chapter 
     445 is amended by inserting after the item relating to 
     section 44517 the following:

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

     SEC. 208. GOVERNMENT SHARE OF CERTAIN AIR PROJECT COSTS.

       Notwithstanding section 47109(a) of title 49, United States 
     Code, the Federal government's share of allowable project 
     costs for a grant made in fiscal year 2008, 2009, 2010, or 
     2011 under chapter 471 of that title for a project described 
     in paragraph (2) or (3) of that section shall be 95 percent.

     SEC. 209. MISCELLANEOUS AMENDMENTS.

       (a) Technical Changes to National Plan of Integrated 
     Airport Systems.--Section 47103 is amended--
       (1) by striking ``each airport to--'' in subsection (a) and 
     inserting ``the airport system to--'';
       (2) by striking ``system in the particular area;'' in 
     subsection (a)(1) and inserting

[[Page 7127]]

     ``system, including connection to the surface transportation 
     network; and'';
       (3) by striking ``aeronautics; and'' in subsection (a)(2) 
     and inserting ``aeronautics.'';
       (4) by striking subsection (a)(3);
       (5) by striking paragraph (2) of subsection (b) and 
     redesignating paragraph (3) as paragraph (2);
       (6) by striking ``operations, Short Takeoff and Landing/
     Very Short Takeoff and Landing aircraft operations,'' in 
     subsection (b)(2), as redesignated, and inserting 
     ``operations''; and
       (7) by striking ``status of the'' in subsection (d).
       (b) Update Veterans Preference Definition.--Section 
     47112(c) is amended--
       (1) by striking ``separated from'' in paragraph (1)(B) and 
     inserting ``discharged or released from active duty in'';
       (2) by adding at the end of paragraph (1) 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
       (3) by striking ``veterans and'' in paragraph (2) and 
     inserting ``veterans, Afghanistan-Iraq war veterans, and''.
       (c) Annual Report.--Section 47131(a) is amended--
       (1) by striking ``April 1'' and inserting ``June 1''; and
       (2) by striking paragraphs (1) through (4) and inserting 
     the following:
       ``(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''.
       (d) Sunset of Program.--Section 47137 is repealed effective 
     September 30, 2008.
       (e) Correction to Emission Credits Provision.--Section 
     47139 is amended--
       (1) by striking ``47102(3)(F),'' in subsection (a);
       (2) by striking ``47102(3)(F),'' in subsection (b);
       (3) by striking ``47102(3)(L), or 47140'' in subsection (b) 
     and inserting ``or 47102(3)(L),'';
       (4) by striking ``47103(3)(F), in subsection (b);
       (5) by striking ``47102(3)(L), or 47140,'' in subsection 
     (b) and inserting ``or 47102(3)(L),''.
       (f) 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),''.
       (g) Airport Capacity Benchmark Reports; Definition of Joint 
     Use Airport.--Section 47175 is amended--
       (1) by striking ``Airport Capacity Benchmark Report 2001.'' 
     in paragraph (2) and inserting ``2001 and 2004 Airport 
     Capacity Benchmark Reports or of the most recent Benchmark 
     report.''; and
       (2) by adding at the end thereof the following:
       ``(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.''.
       (h) Cargo Airports.--Section 47114(c)(2)(A) is amended by 
     striking ``3.5 percent'' and inserting ``4.0 percent''.
       (i) Use of Apportioned Amounts.--Section 47117(e)(1)(A) is 
     amended--
       (1) by striking ``35 percent'' in the first sentence and 
     inserting ``$300,000,000'';
       (2) by striking ``and'' after ``47141,'';
       (3) by striking ``et seq.).'' and inserting ``et seq.), and 
     for water quality mitigation projects to comply with the Act 
     of June 30, 1948 (33 U.S.C. 1251 et seq.) approved in an 
     environmental record of decision for an airport development 
     project under this title.''; and
       (4) by striking ``such 35 percent requirement is'' in the 
     second sentence and inserting ``the requirements of the 
     preceding sentence are''.
       (j) Use of Apportioned Amounts.--An amount apportioned 
     under section 47114 of title 49, United States Code, or made 
     available under section 47115 of that title, to the sponsor 
     of a reliever airport the crosswind runway of which was 
     closed as a result of a Record of Decision dated September 3, 
     2004, shall be available for project costs associated with 
     the establishment of a new crosswind runway.
       (k) Use of Previous Fiscal Year's Apportionment.--Section 
     47114(c)(1) is amended--
       (1) by striking ``airport due to an employment action, 
     natural disaster, or other event unrelated to the demand for 
     air transportation at the affected airport.'' in subparagraph 
     (E)(iii) and inserting ``airport--
       ``(I) if it is included in the essential air service 
     program in the calendar year in which the passenger boardings 
     fall below 9,700;
       ``(II) if at the airport the total passenger boardings from 
     large certificated air carriers (as defined in part 241 of 
     title 14, Code of Federal Regulations) conducting scheduled 
     plus nonscheduled service totals 10,000 or more in the 
     calendar year in which the airport does not meet the criteria 
     for a primary airport under section 47102 of this title; or
       ``(III) if the documented interruption to scheduled service 
     at the airport was equal to 4 percent of the scheduled 
     flights in calendar year 2006, exclusive of cancellations due 
     to severe weather conditions, and the airport is served by a 
     single air carrier.'';
       (2) by redesignating subparagraphs (F) and (G) as (G) and 
     (H), respectively, and inserting after subparagraph (E) the 
     following:
       ``(F) For fiscal years 2009 through 2012, with regard to an 
     airport that meets the criteria described in paragraph 
     (E)(iii), if the calendar year passenger boardings for the 
     calculation of apportionments under this section fall below 
     10,000 passenger boardings, the Secretary may use the 
     passenger boardings for the last fiscal year in which 
     passenger boardings exceeded 10,000 for calculating 
     apportionments.''.
       (l) Section 47102(3) is amended 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, Code of Federal Regulations.''.
       (m) Section 47115(g)(1) is amended by striking ``of--'' and 
     all that follows and inserting ``of $520,000,000. The amount 
     credited is exclusive of amounts that have been apportioned 
     in a prior fiscal year under section 47114 of this title and 
     that remain available for obligation.''.
       (n) Section 47114(c) is amended by adding at the end 
     thereof the following:
       ``(3) Airports served by large certificated carriers.--
       ``(A) Apportionment.--The Secretary shall apportion to the 
     sponsor of an airport that received scheduled air service 
     from a large certificated air carrier (as defined in part 241 
     of title 14, Code of Federal Regulations) an amount equal to 
     the minimum apportionment specified in paragraph (1) of this 
     subsection.
       ``(B) Limitation.--The apportionment under subparagraph (A) 
     shall be made available to an airport sponsor only if--
       ``(i) the large certificated air carrier began scheduled 
     air service at the airport in May 2006 and ceased scheduled 
     air service at the airport in October 2006; and
       ``(ii) the Secretary determines that the airport had more 
     than 10,000 passenger boardings in the preceding calendar 
     year, based on data submitted to the Secretary under part 241 
     of title 14, Code of Federal Regulations.''.
       (o) Subparagraph (H) of section 47114(c)(1), as 
     redesignated by subsection (k)(2) of this section, is 
     amended--
       (1) by striking ``fiscal year 2006'' in the subparagraph 
     heading and inserting ``fiscal years 2008 through 2011.--'';
       (2) by striking ``fiscal year 2006'' and inserting ``each 
     of fiscal years 2008 through 2011''; and
       (3) by striking clause (i) and inserting the following:
       ``(i) the average annual passenger boardings at the airport 
     for calendar years 2004 through 2006 were below 10,000 per 
     year;''; and
       (4) by striking ``2000 or 2001;'' in clause (ii) and 
     inserting ``2003''.
       (p) Section 47114 is amended by adding at the end thereof 
     the following:
       ``(g) Approach Lighting System.--Any amount apportioned for 
     airport 03-02-0133 under the National Plan of Integrated 
     Airport Systems may be utilized in any fiscal year for 
     approach lighting systems including a medium intensity 
     approach lighting system with runway alignment lights.''.

     SEC. 210. STATE BLOCK GRANT PROGRAM.

       Section 47128 is amended--
       (1) by striking ``regulations'' each place it appears in 
     subsection (a) and inserting ``guidance'';
       (2) by striking ``grant;'' in subsection (b)(4) and 
     inserting ``grant, including Federal environmental 
     requirements or an agreed upon equivalent;'';
       (3) by redesignating subsection (c) as subsection (d) and 
     inserting after subsection (b) the following:
       ``(c) Project 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. The 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.''; and
       (4) by adding at the end the following:
       ``(e) Pilot Program.--The Secretary shall establish a pilot 
     program for up to 3 States that do not participate in the 
     program established under subsection (a) that is consistent 
     with the program under subsection (a).''.

     SEC. 211. 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

[[Page 7128]]

     Record of Decision or Finding of No Significant Impact.''.

     SEC. 212. GRANT ELIGIBILITY FOR ASSESSMENT OF FLIGHT 
                   PROCEDURES.

       Section 47504 is amended by adding at the end the 
     following:
       ``(e) Grants for Assessment of Flight Procedures.--
       ``(1) The Secretary is authorized in accordance with 
     subsection (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. 213. SAFETY-CRITICAL AIRPORTS.

       Section 47118(c) is amended--
       (1) by striking ``or'' after the semicolon in paragraph 
     (1);
       (2) by striking ``delays.'' in paragraph (2) and inserting 
     ``delays; or''; and
       (3) by adding at the end the following:
       ``(3) be critical to the safety of commercial, military, or 
     general aviation in trans-oceanic flights.''.

     SEC. 214. EXPANDED PASSENGER FACILITY CHARGE ELIGIBILITY FOR 
                   NOISE COMPATIBILITY PROJECTS.

       Section 40117(b) is amended by adding at the end the 
     following:
       ``(7) Noise mitigation for certain schools.--
       ``(A) In general.--In addition to the uses specified in 
     paragraphs (1), (4), and (6), the Secretary may authorize a 
     passenger facility charge imposed under paragraph (1) or (4) 
     at a large hub airport that is the subject of an amended 
     judgment and final order in condemnation filed on January 7, 
     1980, by the Superior Court of the State of California for 
     the county of Los Angeles, to be used for a project to carry 
     out noise mitigation for a building, or for the replacement 
     of a relocatable building with a permanent building, in the 
     noise impacted area surrounding the airport at which such 
     building is used primarily for educational purposes, 
     notwithstanding the air easement granted or any terms to the 
     contrary in such judgment and final order, if--
       ``(i) the Secretary determines that the building is 
     adversely affected by airport noise;
       ``(ii) the building is owned or chartered by the school 
     district that was the plaintiff in case number 986,442 or 
     986,446, which was resolved by such judgment and final order;
       ``(iii) the project is for a school identified in 1 of the 
     settlement agreements effective February 16, 2005, between 
     the airport and each of the school districts;
       ``(iv) in the case of a project to replace a relocatable 
     building with a permanent building, the eligible project 
     costs are limited to the actual structural construction costs 
     necessary to mitigate aircraft noise in instructional 
     classrooms to an interior noise level meeting current 
     standards of the Federal Aviation Administration; and
       ``(v) the project otherwise meets the requirements of this 
     section for authorization of a passenger facility charge.
       ``(B) Eligible project costs.--In subparagraph (A)(iv), the 
     term `eligible project costs' means the difference between 
     the cost of standard school construction and the cost of 
     construction necessary to mitigate classroom noise to the 
     standards of the Federal Aviation Administration.''.

     SEC. 215. ENVIRONMENTAL MITIGATION DEMONSTRATION PILOT 
                   PROGRAM.

       (a) Pilot Program.--Subchapter I of chapter 471 is amended 
     by adding at the end thereof the following:

     ``Sec. 47143. Environmental mitigation demonstration pilot 
       program

       ``(a) In General.--The Secretary of Transportation shall 
     carry out a pilot program involving not more than 6 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.
       ``(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) Federal 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) Eligible consortium.--The term `eligible consortium' 
     means a consortium that comprises 2 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.
       ``(D) Federal laboratories.
       ``(2) Environmental mitigation demonstration project.--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 chapter analysis for chapter 
     471 is amended by inserting after the item relating to 
     section 47142 the following:

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

     SEC. 216. ALLOWABLE PROJECT COSTS FOR AIRPORT DEVELOPMENT 
                   PROGRAM.

       Section 47110(c) of title 49, United States Code, is 
     amended--
       (1) by striking ``; or'' in paragraph (1) and inserting a 
     semicolon;
       (2) by striking ``project.'' in paragraph (2) and inserting 
     ``project; or''; and
       (3) by adding at the end the following:
       ``(3) necessarily incurred in anticipation of severe 
     weather.''.

     SEC. 217. GLYCOL RECOVERY VEHICLES.

       Section 47102(3)(G) is amended by inserting ``including 
     acquiring glycol recovery vehicles,'' after ``aircraft,''.

     SEC. 218. RESEARCH IMPROVEMENT FOR AIRCRAFT.

       Section 44504(b) is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (6);
       (2) by striking ``aircraft.'' in paragraph (7) and 
     inserting ``aircraft; and''; and
       (3) by adding at the end thereof the following:
       ``(8) to conduct research to support programs designed to 
     reduce gases and particulates emitted.''.

                 TITLE III--FAA ORGANIZATION AND REFORM

     SEC. 301. AIR TRAFFIC CONTROL MODERNIZATION OVERSIGHT BOARD.

       Section 106(p) is amended to read as follows:
       ``(p) Air Traffic Control Modernization Oversight Board.--
       ``(1) Establishment.--Within 90 days after the date of 
     enactment of the Aviation Investment and Modernization Act of 
     2008, the Secretary shall establish and appoint the members 
     of an advisory Board which shall be known as the Air Traffic 
     Control Modernization Oversight Board.
       ``(2) Membership.--The Board shall be comprised of 7 
     members, who shall consist of--
       ``(A) the Administrator of the Federal Aviation 
     Administration and a representative from the Department of 
     Defense;
       ``(B) 1 member who shall have a fiduciary responsibility to 
     represent the public interest; and
       ``(C) 4 members representing aviation interests, as 
     follows:
       ``(i) 1 representative that is the chief executive officer 
     of an airport.
       ``(ii) 1 representative that is the chief executive officer 
     of a passenger or cargo air carrier.
       ``(iii) 1 representative of a labor organization 
     representing employees at the Federal Aviation Administration 
     that are involved with the operation, maintenance or 
     procurement of the air traffic control system.
       ``(iv) 1 representative with extensive operational 
     experience in the general aviation community.
       ``(3) Appointment and qualifications.--

[[Page 7129]]

       ``(A) Members of the Board appointed under paragraphs 
     (2)(B) and (2)(C) shall be appointed by the President, by and 
     with the advice and consent of the Senate.
       ``(B) Members of the Board appointed under paragraph (2)(B) 
     shall be citizens of the United States and 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--
       ``(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 
     modernization 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) approve procurements of air traffic control 
     equipment in excess of $100,000,000;
       ``(v) approve by July 31 of each year the Administrator's 
     budget request for facilities and equipment prior to its 
     submission to the Office of Management and budget, including 
     which programs are proposed to be funded from the Air Traffic 
     control system Modernization Account of the Airport and 
     Airway Trust Fund;
       ``(vi) approve the Federal Aviation Administration's 
     Capital Investment Plan prior to its submission to the 
     Congress;
       ``(vii) annually approve the Operational Evolution Plan;
       ``(viii) approve the Administrator's selection of a Chief 
     Operating Officer for the Air Traffic Organization and on the 
     appointment and compensation of its managers; and
       ``(ix) approve the selection of the head of the Joint 
     Planning Development Office.
       ``(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, 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 paragraph (2)(B) and (2)(C) shall be appointed for a 
     term of 4 years.
       ``(B) Reappointment.--No individual may be appointed to the 
     Board for more than 8 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 a term of 4 years.
       ``(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 President 
     for cause.
       ``(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 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; and
       ``(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) Compensaton.--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 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) Board resources.--From resources otherwise available 
     to the Administrator, the Chairman shall appoint such staff 
     to assist the board and provide impartial analysis, and the 
     Administrator shall make available to the Board such 
     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 duly appointed shall constitute a quorum. A 
     majority vote of members present and voting shall be required 
     for the Committee to take action.
       ``(7) Air traffic control system defined.--In this 
     subsection, the term `air traffic control system' has the 
     meaning given that term in section 40102(a).''.

     SEC. 302. ADS-B SUPPORT PILOT PROGRAM.

       (a) In General.--Chapter 445, as amended by section 207, is 
     amended by adding at the end the following:

     ``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 compliant Automatic Dependent 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 the 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 10 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.--The term `ADS-B ground 
     station' means electronic equipment that provides for ADS-B 
     reception and broadcast services.
       ``(2) Eligible sponsor.--The term `eligible sponsor' means 
     a State or any consortium of 2 or more State or local 
     governments meeting the definition of a sponsor under section 
     47102 of this title.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     445 is amended by inserting after the item relating to 
     section 44518 the following:

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

     SEC. 303. FACILITATION OF NEXT GENERATION AIR TRAFFIC 
                   SERVICES.

       Section 106(l) is amended by adding at the end the 
     following:
       ``(7) Air Traffic Services.--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

[[Page 7130]]

     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. 304. CLARIFICATION OF AUTHORITY TO ENTER INTO 
                   REIMBURSABLE AGREEMENTS.

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

     SEC. 305. CLARIFICATION TO ACQUISITION REFORM AUTHORITY.

       Section 40110(c) is amended--
       (1) by inserting ``and'' after the semicolon in paragraph 
     (3);
       (2) by striking paragraph (4); and
       (3) by redesignating paragraph (5) as paragraph (4).

     SEC. 306. ASSISTANCE TO OTHER AVIATION AUTHORITIES.

       Section 40113(e) is amended--
       (1) by inserting ``(whether public or private)'' in 
     paragraph (1) after ``authorities'';
       (2) by striking ``safety.'' in paragraph (1) and inserting 
     ``safety 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
       (3) by striking ``appropriation from which expenses were 
     incurred in providing such services.'' in paragraph (3) and 
     inserting ``appropriation current when the expenditures are 
     or were paid, or the appropriation current when the amount is 
     received.''.

     SEC. 307. PRESIDENTIAL RANK AWARD PROGRAM.

       Section 40122(g)(2) is amended--
       (1) by striking ``and'' after the semicolon in subparagraph 
     (G);
       (2) by striking ``Board.'' in subparagraph (H) and 
     inserting ``Board;''; and
       (3) by inserting at the end the following new subparagraph:
       ``(I) subsections (b), (c), and (d) of section 4507 
     (relating to Meritorious Executive or Distinguished Executive 
     rank awards), and section subsections (b) and (c) of section 
     4507a (relating to Meritorious Senior Professional or 
     Distinguished Senior Professional rank-awards), except that--
       ``(i) for purposes of applying such provisions to the 
     personnel management system--

       ``(I) the term `agency' means the Department of 
     Transportation;
       ``(II) the term `senior executive' means an Federal 
     Aviation Administration executive;
       ``(III) the term `career appointee' means an Federal 
     Aviation Administration career executive; and
       ``(IV) the term `senior career employee' means an Federal 
     Aviation Administration career senior professional;

       ``(ii) 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; and
       ``(iii) 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. 308. NEXT GENERATION FACILITIES NEEDS ASSESSMENT.

       (a) FAA Criteria for Facilities Realignment.--Within 9 
     months after the date of enactment of this Act, the 
     Administrator of the Federal Aviation Administration, after 
     providing an opportunity for public comment, shall publish 
     final criteria to be used in making the Administrator's 
     recommendations for the realignment of services and 
     facilities to assist in the transition to next generation 
     facilities and help reduce capital, operating, maintenance, 
     and administrative costs with no adverse effect on safety.
       (b) Realignment Recommendations.--Within 9 months after 
     publication of the criteria, the Administrator shall publish 
     a list of the services and facilities that the Administrator 
     recommends for realignment, including a justification for 
     each recommendation, and a description of the costs and 
     savings of such transition.
       (c) Realignment Defined.--As used in this section, the term 
     ``realignment'' includes any action which relocates or 
     reorganizes functions, services, and personnel positions but 
     does not include a reduction in personnel resulting from 
     workload adjustments.
       (d) Study by Board.--The Air Traffic Control Modernization 
     Oversight Board established by section 106(p) of title 49, 
     United States Code, shall study the Administrator's 
     recommendations for realignment and the opportunities, risks, 
     and benefits of realigning services and facilities of the 
     Federal Aviation Administration to help reduce capital, 
     operating, maintenance, and administrative costs with no 
     adverse effect on safety.
       (e) Review and Recommendations.--
       (1) After receiving the recommendations from the 
     Administrator pursuant to subsection (b), the Board shall 
     provide 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 
     Board shall make its independent recommendations for 
     realignment of aviation services or facilities and submit its 
     recommendations in a report to the President, the Senate 
     Committee on Commerce, Science, and Transportation, and the 
     House of Representatives Committee on Transportation and 
     Infrastructure.
       (3) The Board shall explain and justify in its report any 
     recommendation made by the Board that is different from the 
     recommendations made by the Administrator pursuant to 
     subsection (b).
       (4) The Administrator may not consolidate any additional 
     approach control facilities into the Southern California 
     TRACON, or the Memphis TRACON until the Board's 
     recommendations are completed.

     SEC. 309. NEXT GENERATION AIR TRANSPORTATION SYSTEM PLANNING 
                   OFFICE.

       (a) Improved Cooperation and Coordination Among 
     Participating Agencies.--Section 709 of the Vision 100--
     Century of Aviation Reauthorization Act (49 U.S.C. 40101 
     note) is amended--
       (1) by inserting ``(A)'' after ``(3)'' in subsection 
     (a)(3);
       (2) by inserting after subsection (a)(3) the following:
       ``(B) The Administrator of the Federal Aviation 
     Administration, the Secretary of Defense, the Administrator 
     of the National Aeronautics and Space Administration, the 
     Secretary of Commerce, the Secretary of Homeland Security, 
     and the head of any other Department or Federal agency from 
     which the Secretary of Transportation requests assistance 
     under subparagraph (A) shall designate an implementation 
     office to be responsible for--
       ``(i) carrying out the Department or agency's Next 
     Generation Air Transportation System implementation 
     activities with the Office; and
       ``(ii) liaison and coordination with other Departments and 
     agencies involved in Next Generation Air Transportation 
     System activities; and
       ``(iii) managing all Next Generation Air Transportation 
     System programs for the Department or agency, including 
     necessary budgetary and staff resources, including, for the 
     Federal Aviation Administration, those projects described in 
     section 44501(b)(5) of title 49, United States Code).
       ``(C) The head of any such Department or agency shall 
     ensure that--
       ``(i) the Department's or agency's Next Generation Air 
     Transportation System responsibilities are clearly 
     communicated to the designated office; and
       ``(ii) the performance of supervisory personnel in that 
     office in carrying out the Department's or agency's Next 
     Generation Air Transportation System responsibilities is 
     reflected in their annual performance evaluations and 
     compensation decisions.
       ``(D)(i) Within 6 months after the date of enactment of the 
     Aviation Investment and Modernization Act of 2008, the head 
     of each such Department or agency shall execute a memorandum 
     of understanding with the Office and with the other 
     Departments and agencies participating in the Next Generation 
     Air Transportation System project that--
       ``(I) describes the respective responsibilities of each 
     such Department and agency, including budgetary commitments; 
     and
       ``(II) the budgetary and staff resources committed to the 
     project.
       ``(ii) The memorandum shall be revised as necessary to 
     reflect any changes in such responsibilities or commitments 
     and be reflected in each Department or agency's budget 
     request.'';
       (3) by adding at the end of subsection (a) 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.'';
       (4) by striking ``beyond those currently included in the 
     Federal Aviation Administration's Operational Evolution 
     Plan'' in subsection (b);
       (5) by striking ``research and development roadmap'' in 
     subsection (b)(3) and inserting ``implementation plan'';
       (6) by striking ``and'' after the semicolon in subsection 
     (b)(3)(B);
       (7) by inserting after subsection (b)(3)(C) the following:

[[Page 7131]]

       ``(D) a schedule of rulemakings required to issue 
     regulations and guidelines for implementation of the Next 
     Generation Air Transportation System within a timeframe 
     consistent with the integrated plan; and'';
       (8) by inserting ``and key technologies'' after 
     ``concepts'' in subsection (b)(4);
       (9) by striking ``users'' in subsection (b)(4) and 
     inserting ``users, an implementation plan,'';
       (10) by adding at the end of subsection (b) the following:
     ``Within 6 months after the date of enactment of the Aviation 
     Investment and Modernization Act of 2008, the Administrator 
     shall develop the implementation plan described in paragraph 
     (3) of this subsection and shall update it annually 
     thereafter.''; and
       (11) by striking ``2010.'' in subsection (e) and inserting 
     ``2011.''.
       (b) Senior Policy Committee Meetings.--Section 710(a) of 
     such Act (49 U.S.C. 40101 note) is amended by striking 
     ``Secretary.'' and inserting ``Secretary and shall meet at 
     least once each quarter.''.

     SEC. 310. DEFINITION OF AIR NAVIGATION FACILITY.

       Section 40102(a)(4) is amended--
       (1) by striking subparagraph (B) and inserting the 
     following:
       ``(B) runway lighting and airport surface visual and other 
     navigation aids;'';
       (2) by striking ``weather information, signaling, radio-
     directional finding, or radio or other electromagnetic 
     communication; and'' in subparagraph (C) 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) by striking ``another structure'' in subparagraph (D) 
     and inserting ``any structure or equipment'';
       (4) by striking ``aircraft.'' in subparagraph (D) and 
     inserting ``aircraft; and''; and
       (5) by adding at the end the following:
       ``(E) buildings, equipment and systems dedicated to the 
     National Airspace System.''.

     SEC. 311. 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. 312. EDUCATIONAL REQUIREMENTS.

       The Administrator of the Federal Aviation Administration 
     shall make payments to the Department of Defense for the 
     education of dependent children of those Federal Aviation 
     Administration employees in Puerto Rico and Guam as they are 
     subject to transfer by policy and practice and meet the 
     eligibility requirements of section 2164(c) of title 10, 
     United States Code.

     SEC. 313. FAA PERSONNEL MANAGEMENT SYSTEM.

       Section 40122(a)(2) is amended to read as follows:
       ``(2) Dispute resolution.--
       ``(A) Mediation.--If the Administrator does not reach an 
     agreement under paragraph (1) or subsection (g)(2)(C) with 
     the exclusive bargaining representatives, the services of the 
     Federal Mediation and Conciliation Service shall be used to 
     attempt to reach such agreement in accordance with part 1425 
     of title 29, Code of Federal Regulations. The Administrator 
     and bargaining representatives may by mutual agreement adopt 
     procedures for the resolution of disputes or impasses arising 
     in the negotiation of a collective-bargaining agreement.
       ``(B) Binding arbitration.--If the services of the Federal 
     Mediation and Conciliation Service under subparagraph (A) 
     does not lead to an agreement, the Administrator and the 
     bargaining representatives shall submit their issues in 
     controversy to the Federal Service Impasses Panel in 
     accordance with section 7119 of title 5. The Panel shall 
     assist the parties in resolving the impasse by asserting 
     jurisdiction and ordering binding arbitration by a private 
     arbitration board consisting of 3 members in accordance with 
     section 2471.6(a)(2)(ii) of title 5, Code of Federal 
     Regulations. The executive director of the Panel shall 
     request a list of not less than 15 names of arbitrators with 
     Federal sector experience from the director of the Federal 
     Mediation and Conciliation Service to be provided to the 
     Administrator and the bargaining representatives. Within 10 
     days after receiving the list, the parties shall each select 
     1 person. The 2 arbitrators shall then select a third person 
     from the list within 7 days. If the 2 arbitrators are unable 
     to agree on the third person, the parties shall select the 
     third person by alternately striking names from the list 
     until only 1 name remains. If the parties do not agree on the 
     framing of the issues to be submitted, the arbitration board 
     shall frame the issues. The arbitration board shall give the 
     parties a full and fair hearing, including an opportunity to 
     present evidence in support of their claims, and an 
     opportunity to present their case in person, by counsel, or 
     by other representative as they may elect. Decisions of the 
     arbitration board shall be conclusive and binding upon the 
     parties. The arbitration board shall render its decision 
     within 90 days after its appointment. The Administrator and 
     the bargaining representative shall share costs of the 
     arbitration equally. The arbitration board shall take into 
     consideration the effect of its arbitration decisions on the 
     Federal Aviation Administration's ability to attract and 
     retain a qualified workforce and the Federal Aviation 
     Administration's budget.
       ``(C) Effect.--Upon reaching a voluntary agreement or at 
     the conclusion of the binding arbitration under subparagraph 
     (B) above, the final agreement, except for those matters 
     decided by the arbitration board, shall be subject to 
     ratification by the exclusive representative, if so requested 
     by the exclusive representative, and approval by the head of 
     the agency in accordance with subsection (g)(2)(C).
       ``(D) Enforcement.--Enforcement of the provisions of this 
     paragraph, and any agreement hereunder, shall be in the 
     United States District Court for the District of Columbia.''.

     SEC. 314. RULEMAKING AND REPORT ON ADS-B IMPLEMENTATION.

       (a) Report.--Within 90 days after the date of enactment of 
     this Act, the Administrator of the Federal Aviation 
     Administration shall submit a report to the Senate Committee 
     on Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure detailing the Administration program and 
     schedule for integrating ADS-B technology into the National 
     Airspace System. The report shall include--
       (1) Phase 1 and Phase 2 activity to purchase and install 
     necessary ADS-B ground stations; and
       (2) detailed plans and schedules for implementation of 
     advanced operational procedures and ADS-B air-to-air 
     applications.
       (b) Rulemaking.--Not later than 12 months after the date of 
     enactment of this Act the Administrator shall issue 
     guidelines and regulations required for the implementation of 
     ADS-B, including--
       (1) the type of avionics (e.g., ADS-B avionics) required of 
     aircraft for all classes of airspace;
       (2) a schedule outlining when aircraft will be required to 
     be equipped with such avionics;
       (3) the expected costs associated with the avionics; and
       (4) the expected uses and benefits of the avionics.

     SEC. 315. FAA TASK FORCE ON AIR TRAFFIC CONTROL FACILITY 
                   CONDITIONS.

       (a) Establishment.--The Administrator of the Federal 
     Aviation Administration shall establish a special task force 
     to be known as the ``FAA Task Force on Air Traffic Control 
     Facility Conditions''.
       (b) Membership.--
       (1) Composition.--The Task Force shall be composed of 11 
     members of whom--
       (A) 7 members shall be appointed by the Administrator; and
       (B) 4 members shall be appointed by labor unions 
     representing employees who work at field facilities of the 
     Administration.
       (2) Qualifications.--Of the members appointed by the 
     Administrator under paragraph (1)(A)--
       (A) 4 members shall be specialists on toxic mold abatement, 
     ``sick building syndrome,'' and other hazardous building 
     conditions that can lead to employee health concerns and 
     shall be appointed by the Administrator in consultation with 
     the Director of the National Institute for Occupational 
     Safety and Health; and
       (B) 2 members shall be specialists on the rehabilitation of 
     aging buildings.
       (3) Terms.--Members shall be appointed for the life of the 
     Task Force.
       (4) Vacancies.--A vacancy in the Task Force shall be filled 
     in the manner in which the original appointment was made.
       (5) Travel expenses.--Members shall serve without pay but 
     shall receive travel expenses, including per diem in lieu of 
     subsistence, in accordance with subchapter I of chapter 57 of 
     title 5, United States Code.
       (c) Chairperson.--The Administrator shall designate, from 
     among the individuals appointed under subsection (b)(1), an 
     individual to serve as chairperson of the Task Force.
       (d) Task Force Personnel Matters.--
       (1) Staff.--The Task Force may appoint and fix the pay of 
     such personnel as it considers appropriate.
       (2) Staff of federal agencies.--Upon request of the 
     Chairperson of the Task Force, the head of any department or 
     agency of the United States may detail, on a reimbursable 
     basis, any of the personnel of that department or agency to 
     the Task Force to assist it in carrying out its duties under 
     this section.
       (3) Other staff and support.--Upon request of the Task 
     Force or a panel of the Task Force, the Administrator shall 
     provide the Task Force or panel with professional and 
     administrative staff and other support, on a reimbursable 
     basis, to the Task Force to assist it in carrying out its 
     duties under this section.
       (e) Obtaining Official Data.--The Task Force may secure 
     directly from any department or agency of the United States 
     information (other than information required by any statute 
     of the United States to be kept confidential by such 
     department or agency) necessary for the Task Force to carry 
     out its

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     duties under this section. Upon request of the chairperson of 
     the Task Force, the head of that department or agency shall 
     furnish such information to the Task Force.
       (f) Duties.--
       (1) Study.--The Task Force shall undertake a study of--
       (A) the conditions of all air traffic control facilities 
     across the Nation, including towers, centers, and terminal 
     radar air control;
       (B) reports from employees of the Administration relating 
     to respiratory ailments and other health conditions resulting 
     from exposure to mold, asbestos, poor air quality, radiation 
     and facility-related hazards in facilities of the 
     Administration;
       (C) conditions of such facilities that could interfere with 
     such employees' ability to effectively and safely perform 
     their duties;
       (D) the ability of managers and supervisors of such 
     employees to promptly document and seek remediation for 
     unsafe facility conditions;
       (E) whether employees of the Administration who report 
     facility-related illnesses are treated fairly;
       (F) utilization of scientifically-approved remediation 
     techniques in a timely fashion once hazardous conditions are 
     identified in a facility of the Administration; and
       (G) resources allocated to facility maintenance and 
     renovation by the Administration.
       (2) Facility condition indices.--The Task Force shall 
     review the facility condition indices of the Administration 
     for inclusion in the recommendations under subsection (g).
       (g) Recommendations.--Based on the results of the study and 
     review of the facility condition indices under subsection 
     (f), the Task Force shall make recommendations as it 
     considers necessary to--
       (1) prioritize those facilities needing the most immediate 
     attention in order of the greatest risk to employee health 
     and safety;
       (2) ensure that the Administration is using scientifically 
     approved remediation techniques in all facilities; and
       (3) assist the Administration in making programmatic 
     changes so that aging air traffic control facilities do not 
     deteriorate to unsafe levels.
       (h) Report.--Not later than 6 months after the date on 
     which initial appointments of members to the Task Force are 
     completed, the Task Force shall submit to the Administrator, 
     the Committee on Transportation and Infrastructure of the 
     House of Representatives, and the Committee on Commerce, 
     Science, and Transportation of the Senate a report on the 
     activities of the Task Force, including the recommendations 
     of the Task Force under subsection (g).
       (i) Implementation.--Within 30 days after receipt of the 
     Task Force report under subsection (h), the Administrator 
     shall submit to the House of Representatives Committee on 
     Transportation and Infrastructure and the Senate Committee on 
     Commerce, Science, and Transportation a report that includes 
     a plan and timeline to implement the recommendations of the 
     Task Force and to align future budgets and priorities of the 
     Administration accordingly.
       (j) Termination.--The Task Force shall terminate on the 
     last day of the 30-day period beginning on the date on which 
     the report under subsection (h) is submitted.
       (k) Applicability of the Federal Advisory Committee Act.--
     The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Task Force.

     SEC. 316. STATE ADS-B EQUIPAGE BANK PILOT PROGRAM.

       (a) In General.--
       (1) Cooperative agreements.--Subject to the provisions of 
     this section, the Secretary of Transportation may enter into 
     cooperative agreements with not to exceed 5 States for the 
     establishment of State ADS-B equipage banks for making loans 
     and providing other assistance to public entities for 
     projects eligible for assistance under this section.
       (b) Funding.--
       (1) Separate account.--An ADS-B equipage bank established 
     under this section shall maintain a separate aviation trust 
     fund account for Federal funds contributed to the bank under 
     paragraph (2). No Federal funds contributed or credited to an 
     account of an ADS-B equipage bank established under this 
     section may be commingled with Federal funds contributed or 
     credited to any other account of such bank.
       (2) Authorization.--There are authorized to be appropriated 
     to the Secretary $25,000,000 for each of fiscal years 2009 
     through 2013.
       (c) Forms of Assistance From ADS-B Equipage Banks.--An ADS-
     B equipage bank established under this section may make loans 
     or provide other assistance to a public entity in an amount 
     equal to all or part of the cost of carrying out a project 
     eligible for assistance under this section. The amount of any 
     loan or other assistance provided for such project may be 
     subordinated to any other debt financing for the project.
       (d) Qualifying Projects.--Federal funds in the ADS-B 
     equipage account of an ADS-B equipage bank established under 
     this section may be used only to provide assistance with 
     respect to aircraft ADS-B avionics equipage.
       (e) Requirements.--In order to establish an ADS-B equipage 
     bank under this section, each State establishing such a bank 
     shall--
       (1) contribute, at a minimum, in each account of the bank 
     from non-Federal sources an amount equal to 50 percent of the 
     amount of each capitalization grant made to the State and 
     contributed to the bank;
       (2) ensure that the bank maintains on a continuing basis an 
     investment grade rating on its debt issuances or has a 
     sufficient level of bond or debt financing instrument 
     insurance to maintain the viability of the bank;
       (3) ensure that investment income generated by funds 
     contributed to an account of the bank will be--
       (A) credited to the account;
       (B) available for use in providing loans and other 
     assistance to projects eligible for assistance from the 
     account; and
       (C) invested in United States Treasury securities, bank 
     deposits, or such other financing instruments as the 
     Secretary may approve to earn interest to enhance the 
     leveraging of projects assisted by the bank;
       (5) ensure that any loan from the bank will bear interest 
     at or below market interest rates, as determined by the 
     State, to make the project that is the subject of the loan 
     feasible;
       (6) ensure that the term for repaying any loan will not 
     exceed 10 years after the date of the first payment on the 
     loan; and
       (7) require the bank to make an annual report to the 
     Secretary on its status no later than September 30 of each 
     year for which funds are made available under this section, 
     and to make such other reports as the Secretary may require 
     by guidelines.

 TITLE IV--AIRLINE SERVICE AND SMALL COMMUNITY AIR SERVICE IMPROVEMENTS

     SEC. 401. AIRLINE CONTINGENCY SERVICE REQUIREMENTS.

       (a) In General.--Chapter 417 is amended by adding at the 
     end the following:

               ``SUBCHAPTER IV--AIRLINE CUSTOMER SERVICE

     ``Sec.  41781. AIRLINE CONTINGENCY SERVICE REQUIREMENTS.

       ``(a) In General.--Not later than 60 days after the date of 
     enactment of the Aviation Investment and Modernization Act of 
     2008, each air carrier shall submit a contingency service 
     plan to the Secretary of Transportation for review and 
     approval. The plan shall require the air carrier to 
     implement, at a minimum, the following practices:
       ``(1) Provision of food and water.--If the departure of a 
     flight of an air carrier is substantially delayed, or 
     disembarkation of passengers on an arriving flight that has 
     landed is substantially delayed, the air carrier shall 
     provide--
       ``(A) adequate food and potable water to passengers on such 
     flight during such delay; and
       ``(B) adequate restroom facilities to passengers on such 
     flight during such delay.
       ``(2) Right to deplane.--
       ``(A) In general.--An air carrier shall develop a plan, 
     that incorporates medical considerations, to ensure that 
     passengers are provided a clear timeframe under which they 
     will be permitted to deplane a delayed aircraft. The air 
     carrier shall provide a copy of the plan to the Secretary of 
     Transportation, who shall make the plan available to the 
     public. In the absence of such a plan, except as provided in 
     subparagraph (B), if more than 3 hours after passengers have 
     boarded a flight, the aircraft doors are closed and the 
     aircraft has not departed, the air carrier shall provide 
     passengers with the option to deplane safely before the 
     departure of such aircraft. Such option shall be provided to 
     passengers not less often than once during each 3-hour period 
     that the plane remains on the ground.
       ``(B) Exceptions.--Subparagraph (A) shall not apply--
       ``(i) if the pilot of such flight reasonably determines 
     that such flight will depart not later than 30 minutes after 
     the 3 hour delay; or
       ``(ii) if the pilot of such flight reasonably determines 
     that permitting a passenger to deplane would jeopardize 
     passenger safety or security.
       ``(C) Application to diverted flights.--This section 
     applies to aircraft without regard to whether they have been 
     diverted to an airport other than the original destination.
       ``(b) Posting Consumer Rights on Website.--An air carrier 
     holding a certificate issued under section 41102 that 
     conducts scheduled passenger air transportation shall publish 
     conspicuously and update monthly on the Internet website of 
     the air carrier a statement of the air carrier's customer 
     service policy and of air carrier customers' consumer rights 
     under Federal and State law.
       ``(c) Review and Approval; Minimum Standards.--The 
     Secretary of Transportation shall review the contingency 
     service plan submitted by an air carrier under subsection (a) 
     and may approve it or disapprove it and return it to the 
     carrier for modification and resubmittal. The Secretary may 
     establish minimum standards for such plans and require air 
     carriers to meet those standards.
       ``(d) Air Carrier.--In this section the term `air carrier' 
     means an air carrier holding a certificate issued under 
     section 41102 that conducts scheduled passenger air 
     transportation.''.
       (b) Regulations.--Not later than 60 days after the date of 
     enactment of this Act, the

[[Page 7133]]

     Secretary of Transportation shall promulgate such regulations 
     as the Secretary determines necessary to carry out the 
     amendment made by subsection (a).
       (c) Conforming Amendment.--The chapter analysis for chapter 
     417 is amended by adding at the end the following:

                subchapter iv. airline customer service

``41781. Airline contingency service requirements.''.

     SEC. 402. PUBLICATION OF CUSTOMER SERVICE DATA AND FLIGHT 
                   DELAY HISTORY.

       Section 41722 is amended by adding at the end the 
     following:
       ``(f) Chronically Delayed Flights.--
       ``(1) Publication of list of flights.--An air carrier 
     holding a certificate issued under section 41102 that 
     conducts scheduled passenger air transportation shall publish 
     and update monthly on the Internet website of the air 
     carrier, or provide on request, a list of chronically delayed 
     flights operated by the air carrier.
       ``(2) Disclosure to customers when purchasing tickets.--An 
     air carrier shall disclose the following information 
     prominently to an individual before that individual books 
     transportation on the air carrier's Internet website for any 
     flight for which data is reported to the Department of 
     Transportation under part 234 of title 14, Code of Federal 
     Regulations, and for which the air carrier has primary 
     responsibility for inventory control:
       ``(A) The on-time performance for the flight if it is a 
     chronically delayed flight.
       ``(B) The cancellation rate for the flight if it is a 
     chronically canceled flight.
       ``(3) Chronically delayed; chronically canceled.--The 
     Secretary of Transportation shall define the terms 
     `chronically delayed flight' and `chronically canceled 
     flight' for purposes of this subsection.''.

     SEC. 403. EAS CONNECTIVITY PROGRAM.

       Section 406(a) of the Vision 100--Century of Aviation 
     Reauthorization Act (49 U.S.C. 40101 note) is amended by 
     striking ``may'' and inserting ``shall''.

     SEC. 404. EXTENSION OF FINAL ORDER ESTABLISHING MILEAGE 
                   ADJUSTMENT ELIGIBILITY.

       Section 409(d) of the Vision 100--Century of Aviation 
     Reauthorization Act (49 U.S.C. 40101 note) is amended by 
     striking ``September 30, 2007.'' and inserting ``September 
     30, 2011.''.

     SEC. 405. EAS CONTRACT GUIDELINES.

       Section 41737(a)(1) is amended--
       (1) by striking ``and'' after the semicolon in subparagraph 
     (B);
       (2) by striking ``provided.'' in subparagraph (C) and 
     inserting ``provided;''; and
       (3) by adding at the end the following:
       ``(D) include provisions under which the Secretary may 
     encourage carriers to improve air service to small and rural 
     communities by incorporating financial incentives in 
     essential air service contracts based on specified 
     performance goals; and
       ``(E) include provisions under which the Secretary may 
     execute long-term essential air service contracts to 
     encourage carriers to provide air service to small and rural 
     communities where it would be in the public interest to do 
     so.''.

     SEC. 406. CONVERSION OF FORMER EAS AIRPORTS.

       (a) In General.--Section 41745 is amended--
       (1) by redesignating subsections (c) through (g) as 
     subsections (d) through (h), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Conversion of Lost Eligibility Airports.--
       ``(1) In general.--The Secretary shall establish a program 
     to provide general aviation conversion funding for airports 
     serving eligible places that the Secretary has determined no 
     longer qualify for a subsidy.
       ``(2) Grants.--A grant under this subsection--
       ``(A) may not exceed twice the compensation paid to provide 
     essential air service to the airport in the fiscal year 
     preceding the fiscal year in which the Secretary determines 
     that the place served by the airport is no longer an eligible 
     place; and
       ``(B) may be used--
       ``(i) for airport development (as defined in section 
     47102(3)) that will enhance general aviation capacity at the 
     airport;
       ``(ii) to defray operating expenses, if such use is 
     approved by the Secretary; or
       ``(iii) to develop innovative air service options, such as 
     on-demand or air taxi operations, if such use is approved by 
     the Secretary.
       ``(3) AIP requirements.--An airport sponsor that uses funds 
     provided under this subsection for an airport development 
     project shall comply with the requirements of subchapter I of 
     chapter 471 applicable to airport development projects funded 
     under that subchapter with respect to the project funded 
     under this subsection.
       ``(4) Limitation.--The sponsor of an airport receiving 
     funding under this subsection is not eligible for funding 
     under section 41736.''.
       (b) Conforming Amendment.--Section 41745(f), as 
     redesignated, is amended--
       (1) by striking ``An eligible place'' and inserting 
     ``Neither an eligible place, nor a place to which subsection 
     (c) applies,''; and
       (2) by striking ``not''.

     SEC. 407. EAS REFORM.

       Section 41742(a) is amended--
       (1) by adding at the end of paragraph (1) ``Any amount in 
     excess of $50,000,000 credited for any fiscal year to the 
     account established under section 45303(c) shall be obligated 
     for programs under section 406 of the Vision 100--Century of 
     Aviation Reauthorization Act (49 U.S.C. 40101 note) and 
     section 41745 of this title. Amounts appropriated pursuant to 
     this section shall remain available until expended.''; and
       (2) by striking ``$77,000,000'' in paragraph (2) and 
     inserting ``$125,000,000''.

     SEC. 408. CLARIFICATION OF AIR CARRIER FEE DISPUTES.

       (a) In General.--Section 47129 is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``Sec. 47129. Resolution of airport-air carrier and foreign 
       air carrier disputes concerning airport fees'' ;
       (2) by inserting ``and Foreign Air Carrier'' after 
     ``Carrier''  in the subsection caption for subsection (d);
       (3) by inserting ``and foreign air carrier'' after 
     ``Carrier'' in the paragraph caption for subsection (d)(2);
       (4) by striking ``air carrier'' each place it appears and 
     inserting ``air carrier or foreign air carrier'';
       (5) by striking ``air carrier's'' each place it appears and 
     inserting ``air carrier's or foreign air carrier's'';
       (6) by striking ``air carriers'' and inserting ``air 
     carriers or foreign air carriers''; and
       (7) 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)''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     471 is amended by striking the item relating to section 47129 
     and inserting the following:

``47129. Resolution of airport-air carrier and foreign air carrier 
              disputes concerning airport fees.''.

     SEC. 409. SMALL COMMUNITY AIR SERVICE.

       (a) Priorities.--Section 41743(c)(5) is amended--
       (1) by striking ``and'' after the semicolon in subparagraph 
     (D);
       (2) by striking ``fashion.'' in subparagraph (E) and 
     inserting ``fashion; and''; and
       (3) by adding at the end the following:
       ``(F) multiple communities cooperate to submit a region or 
     multistate application to improve air service.''.
       (b) Extension of Authorization.--Section 41743(e)(2) is 
     amended by striking ``2008'' and inserting ``2011''.

     SEC. 410. CONTRACT TOWER PROGRAM.

       (a) Cost-Benefit Requirement.--Section 47124(b)(1) is 
     amended--
       (1) by inserting ``(A)'' after ``(1)''; and
       (2) by adding at the end the following:
       ``(B) If the Secretary determines that a tower already 
     operating under this program has a benefit to cost ratio of 
     less than 1.0, the airport sponsor or State or local 
     government having jurisdiction over the airport shall not be 
     required to pay the portion of the costs that exceeds the 
     benefit for a period of 18 months after such determination is 
     made.
       ``(C) If the Secretary finds that all or part of an amount 
     made available to carry out the program continued under this 
     paragraph is not required during a fiscal year, the Secretary 
     may use during such fiscal year the amount not so required to 
     carry out the program established under paragraph (3) of this 
     section.''.
       (b) Funding.--Subparagraph (E) of section 47124(b)(3) is 
     amended--
       (1) by striking ``and'' after ``2006,''; and
       (2) by inserting ``$8,500,000 for fiscal year 2008, 
     $9,000,000 for fiscal year 2009, $9,500,000 for fiscal year 
     2010, and $10,000,000 for fiscal year 2011'' after ``2007,''; 
     and
       (3) by inserting after ``paragraph.'' the following: ``If 
     the Secretary finds that all or part of an amount made 
     available under this subparagraph is not required during a 
     fiscal year to carry out this paragraph, the Secretary may 
     use during such fiscal year the amount not so required to 
     carry out the program continued under paragraph (b)(1) of 
     this section.''.
       (c) Federal Share.--Subparagraph (C) of section 47124(b)(4) 
     is amended by striking ``$1,500,000.'' and inserting 
     ``$2,000,000.''.
       (d) Safety Audits.--Section 41724 is amended by adding at 
     the end the following:
       ``(c)  Safety Audits.--The Secretary shall establish 
     uniform standards and requirements for safety assessments of 
     air traffic control towers that receive funding under this 
     section in accordance with the Administration's safety 
     management system.''.

     SEC. 411. AIRFARES FOR MEMBERS OF THE ARMED FORCES.

       (a) Findings.--The Congress finds that--
       (1) the Armed Forces is comprised of approximately 
     1,400,000 members who are stationed on active duty at more 
     than 6,000 military bases in 146 different countries;
       (2) the United States is indebted to the members of the 
     Armed Forces, many of whom are in grave danger due to their 
     engagement in, or exposure to, combat;
       (3) military service, especially in the current war against 
     terrorism, often requires members of the Armed Forces to be 
     separated from their families on short notice, for long 
     periods of time, and under very stressful conditions;

[[Page 7134]]

       (4) the unique demands of military service often preclude 
     members of the Armed Forces from purchasing discounted 
     advance airline tickets in order to visit their loved ones at 
     home; and
       (5) it is the patriotic duty of the people of the United 
     States to support the members of the Armed Forces who are 
     defending the Nation's interests around the world at great 
     personal sacrifice.
       (b) Sense of Congress.--It is the sense of Congress that 
     each United States air carrier should--
       (1) establish for all members of the Armed Forces on active 
     duty reduced air fares that are comparable to the lowest 
     airfare for ticketed flights; and
       (2) offer flexible terms that allow members of the Armed 
     Forces on active duty to purchase, modify, or cancel tickets 
     without time restrictions, fees, and penalties.

     SEC. 412. EXPANSION OF DOT AIRLINE CONSUMER COMPLAINT 
                   INVESTIGATIONS.

       (a) In General.--The Secretary of Transportation shall 
     investigate consumer complaints regarding--
       (1) flight cancellations;
       (2) compliance with Federal regulations concerning 
     overbooking seats flights;
       (3) lost, damaged, or delayed baggage, and difficulties 
     with related airline claims procedures;
       (4) problems in obtaining refunds for unused or lost 
     tickets or fare adjustments;
       (5) incorrect or incomplete information about fares, 
     discount fare conditions and availability, overcharges, and 
     fare increases;
       (6) the rights of passengers who hold frequent flier miles, 
     or equivalent redeemable awards earned through customer-
     loyalty programs; and
       (7) deceptive or misleading advertising.
       (b) Budget Needs Report.--The Secretary shall provide, as 
     an annex to its annual budget request, an estimate of 
     resources which would have been sufficient to investigate all 
     such claims the Department of Transportation received in the 
     previous fiscal year. The annex shall be transmitted to the 
     Congress when the President submits the budget of the United 
     States to the Congress under section 1105 of title 31, United 
     States Code.

     SEC. 413. EAS MARKETING.

       The Secretary of Transportation shall require all 
     applications to provide service under subchapter II of 
     chapter 417 of title 49, United States Code, include a 
     marketing plan.

     SEC. 414. EXTRAPERIMETAL AND INTRAPERIMETAL SLOTS AT RONALD 
                   REAGAN WASHINGTON NATIONAL AIRPORT.

       (a) Beyond Perimeter Exemptions.--Section 41718 (a) is 
     amended by striking ``24'' and inserting ``36''.
       (b) Within Perimeter Exemptions.--Section 41718 (b) is 
     amended by striking ``20'' and inserting ``28''.
       (c) Limitations.--Section 41718(c) is amended--
       (1) by striking ``3 operations.'' in paragraph (2) and 
     inserting ``5 operations. Operations conducted by new entrant 
     and limited incumbent air carriers shall be afforded a 
     scheduling priority over operations conducted by other air 
     carriers granted exemptions pursuant to section 41718 with 
     the highest scheduling priority afforded to beyond-perimeter 
     operations conducted by new entrant and limited incumbent air 
     carriers.'';
       (2) by striking ``six'' in paragraph (3)(A) and inserting 
     ``8'';
       (3) by striking ``ten'' in paragraph (3)(B) and inserting 
     ``12''; and
       (4) by striking ``four'' in paragraph (3)(C) and inserting 
     ``8''.

     SEC. 415. ESTABLISHMENT OF ADVISORY COMMITTEE FOR AVIATION 
                   CONSUMER PROTECTION.

       (a) In General.--The Secretary of Transportation shall 
     establish an advisory committee for aviation consumer 
     protection to advise the Secretary in carrying out air 
     passenger service improvements, including those required by 
     chapter 423 of title 49, United States Code.
       (b) Membership.--The Secretary shall appoint members of the 
     advisory committee comprised of one representative each of--
       (1) air carriers;
       (2) airport operators;
       (3) State or local governments who has expertise in 
     consumer protection matters; and
       (4) a nonprofit public interest group who has expertise in 
     consumer protection matters.
       (c) Vacancies.--A vacancy in the advisory committee shall 
     be filled in the manner in which the original appointment was 
     made.
       (d) Travel Expenses.--Members of the advisory committee 
     shall serve without pay but shall receive travel expenses, 
     including per diem in lieu of subsistence, in accordance with 
     subchapter I of chapter 57 of title 5, United States Code.
       (e) Chairperson.--The Secretary shall designate, from among 
     the individuals appointed under subsection (b), an individual 
     to serve as chairperson of the advisory committee.
       (f) Duties.--The duties of the advisory committee shall 
     include--
       (1) evaluating existing aviation consumer protection 
     programs and providing recommendations for the improvement of 
     such programs, if needed; and
       (2) providing recommendations to establish additional 
     aviation consumer protection programs, if needed.
       (g) Report.--Not later than February 1 of each of the first 
     2 calendar years beginning after the date of enactment of 
     this Act, the Secretary shall transmit to Congress a report 
     containing--
       (1) the recommendations made by the advisory committee 
     during the preceding calendar year; and
       (2) an explanation of how the Secretary has implemented 
     each recommendation and, for each recommendation not 
     implemented, the Secretary's reason for not implementing the 
     recommendation.

     SEC. 416. RURAL AVIATION IMPROVEMENT.

       (a) Communities Above Per Passenger Subsidy Cap.--
       (1) In general.--Subchapter II of chapter 417 is amended by 
     adding at the end the following:

     `` 41749. Essential air service for eligible places above 
       per passenger subsidy cap

       ``(a) Proposals.--A State or local government may submit a 
     proposal to the Secretary of Transportation for compensation 
     for an air carrier to provide air transportation to a place 
     described in subsection (b).
       ``(b) Place Described.--A place described in this 
     subsection is a place--
       ``(1) that is otherwise an eligible place; and
       ``(2) for which the per passenger subsidy exceeds the 
     dollar amount allowable under this subchapter.
       ``(c) Decisions.--Not later than 90 days after receiving a 
     proposal under subsection (a) for compensation for an air 
     carrier to provide air transportation to a place described in 
     subsection (b), the Secretary shall--
       ``(1) decide whether to provide compensation for the air 
     carrier to provide air transportation to the place; and
       ``(2) approve the proposal if the State or local government 
     or a person is willing and able to pay the difference 
     between--
       ``(A) the per passenger subsidy; and
       ``(B) the dollar amount allowable for such subsidy under 
     this subchapter.
       ``(d) Compensation Payments.--
       ``(1) In general--The Secretary shall pay compensation 
     under this section at such time and in such manner as the 
     Secretary determines is appropriate.
       ``(2) Duration of payments--The Secretary shall continue to 
     pay compensation under this section only as long as--
       ``(A) the State or local government or person agreeing to 
     pay compensation under subsection (c)(2) continues to pay 
     such compensation; and
       ``(B) the Secretary decides the compensation is necessary 
     to maintain air transportation to the place.
       ``(e) Review--
       ``(1) In general--The Secretary shall periodically review 
     the type and level of air service provided under this 
     section.
       ``(2) Consultation--The Secretary may make appropriate 
     adjustments in the type and level of air service to a place 
     under this section based on the review under paragraph (1) 
     and consultation with the affected community and the State or 
     local government or person agreeing to pay compensation under 
     subsection (c)(2).
       ``(f) Ending, Suspending, and Reducing Air Transportation--
     An air carrier providing air transportation to a place under 
     this section may end, suspend, or reduce such air 
     transportation if, not later than 30 days before ending, 
     suspending, or reducing such air transportation, the air 
     carrier provides notice of the intent of the air carrier to 
     end, suspend, or reduce such air transportation to--
       ``(1) the Secretary;
       ``(2) the affected community; and
       ``(3) the State or local government or person agreeing to 
     pay compensation under subsection (c)(2).''.
       (2) Clerical Amendment--The chapter analysis for chapter 
     417 is amended by adding after the item relating to section 
     41748 the following new item:

``41749. Essential air service for eligible places above per passenger 
              subsidy cap.''.
       (b) Preferred Essential Air Service.--
       (1) In General.--Subchapter II of chapter 417, as amended 
     by subsection (a), is further amended by adding after section 
     41749 the following:

     `` 41750. Preferred essential air service

       ``(a) Proposals.--A State or local government may submit a 
     proposal to the Secretary of Transportation for compensation 
     for a preferred air carrier described in subsection (b) to 
     provide air transportation to an eligible place.
       ``(b) Preferred Air Carrier Described--A preferred air 
     carrier described in this subsection is an air carrier that--
       ``(1) submits an application under section 41733(c) to 
     provide air transportation to an eligible place;
       ``(2) is not the air carrier that submits the lowest cost 
     bid to provide air transportation to the eligible place; and
       ``(3) is an air carrier that the affected community prefers 
     to provide air transportation to the eligible place instead 
     of the air carrier that submits the lowest cost bid.
       ``(c) Decisions--Not later than 90 days after receiving a 
     proposal under subsection

[[Page 7135]]

     (a) for compensation for a preferred air carrier described in 
     subsection (b) to provide air transportation to an eligible 
     place, the Secretary shall--
       ``(1) decide whether to provide compensation for the 
     preferred air carrier to provide air transportation to the 
     eligible place; and
       ``(2) approve the proposal if the State or local government 
     or a person is willing and able to pay the difference 
     between--
       ``(A) the rate of compensation the Secretary would provide 
     to the air carrier that submits the lowest cost bid to 
     provide air transportation to the eligible place; and
       ``(B) the rate of compensation the preferred air carrier 
     estimates to be necessary to provide air transportation to 
     the eligible place.
       ``(d) Compensation Payments--
       ``(1) In general--The Secretary shall pay compensation 
     under this section at such time and in such manner as the 
     Secretary determines is appropriate.
       ``(2) Duration of payments--The Secretary shall continue to 
     pay compensation under this section only as long as--
       ``(A) the State or local government or person agreeing to 
     pay compensation under subsection (c)(2) continues to pay 
     such compensation; and
       ``(B) the Secretary decides the compensation is necessary 
     to maintain air transportation to the eligible place.
       ``(e) Review--
       ``(1) In general--The Secretary shall periodically review 
     the type and level of air service provided under this 
     section.
       ``(2) Consultation--The Secretary may make appropriate 
     adjustments in the type and level of air service to an 
     eligible place under this section based on the review under 
     paragraph (1) and consultation with the affected community 
     and the State or local government or person agreeing to pay 
     compensation under subsection (c)(2).
       ``(f) Ending, Suspending, and Reducing Air Transportation--
     A preferred air carrier providing air transportation to an 
     eligible place under this section may end, suspend, or reduce 
     such air transportation if, not later than 30 days before 
     ending, suspending, or reducing such air transportation, the 
     preferred air carrier provides notice of the intent of the 
     preferred air carrier to end, suspend, or reduce such air 
     transportation to--
       ``(1) the Secretary;
       ``(2) the affected community; and
       ``(3) the State or local government or person agreeing to 
     pay compensation under subsection (c)(2).''.
       (2) Clerical amendment--The chapter analysis for chapter 
     417, as amended by subsection (a), is further amended by 
     adding after the item relating to section 41749 the following 
     new item:

``41750. Preferred essential air service.'.
       (c) Restoration of Eligibility to a Place Determined by the 
     Secretary To Be Ineligible for Subsidized Essential Air 
     Service.----Section 41733 is amended by adding at the end the 
     following new subsection:
       ``(f) Restoration of Eligibility for Subsidized Essential 
     Air Service--
       ``(1) In general--If the Secretary of Transportation 
     terminates the eligibility of an otherwise eligible place to 
     receive basic essential air service by an air carrier for 
     compensation under subsection (c), a State or local 
     government may submit to the Secretary a proposal for 
     restoring such eligibility.
       ``(2) Determination by secretary--If the per passenger 
     subsidy required by the proposal submitted by a State or 
     local government under paragraph (1) does not exceed the per 
     passenger subsidy cap provided under this subchapter, the 
     Secretary shall issue an order restoring the eligibility of 
     the otherwise eligible place to receive basic essential air 
     service by an air carrier for compensation under subsection 
     (c).'.
       (d) Office of Rural Aviation.--
       (1) Establishment--There is established within the Office 
     of the Secretary of Transportation the Office of Rural 
     Aviation.
       (b) Functions--The functions of the Office are--
       (1) to develop a uniform 4-year contract for air carriers 
     providing essential air service to communities under 
     subchapter II of chapter 417 of title 49, United States Code;
       (2) to develop a mechanism for comparing applications 
     submitted by air carriers under section 41733(c) to provide 
     essential air service to communities, including comparing--
       (A) estimates from air carriers on--
       (i) the cost of providing essential air service; and
       (ii) the revenues air carriers expect to receive when 
     providing essential air service; and
       (B) estimated schedules for air transportation; and
       (3) to select an air carrier from among air carriers 
     applying to provide essential air service, based on the 
     criteria described in paragraph (2).
       (e) Extension of Authority To Make Agreements Under the 
     Essential Air Service Program.--Section 41743(e)(2) is 
     amended by striking ``2008'' and inserting ``2011''.
       (f) Adjustments to Compensation for Significantly Increased 
     Costs--Section 41737 is amended--
       (1) by striking ``and'' after the semicolon in subsection 
     (a)(1)(B);
       (2) by striking ``provided.'' in subsection (a)(1)(C) and 
     inserting ``provided; and'';
       (3) by adding at the end of subsection (a)(1) the 
     following:
       ``(D) provide for an adjustment in compensation, for 
     service or transportation to a place that was an eligible 
     place as of November 1, 2007, to account for significant 
     increases in fuel costs, in accordance with subsection 
     (e).''; and
       (4) by adding at the end thereof the following:
       ``(f) Fuel Cost Subsidy Disregard.--Any amount provided as 
     an adjustment in compensation pursuant to subsection 
     (a)(1)(D) shall be disregarded for the purpose of determining 
     whether the amount of compensation provided under this 
     subchapter with respect to an eligible place exceeds the per 
     passenger subsidy exceeds the dollar amount allowable under 
     this subchapter.''.
       (f) Continued Eligibility.--Notwithstanding any provision 
     of subchapter II of chapter 417 of title 49, United States 
     Code, to the contrary, a community that was receiving service 
     or transportation under that subchapter as an eligible place 
     (as defined in section 41731(a)(1) of such title) as of 
     November 1, 2007, shall continue to be eligible to receive 
     service or transportation under that subchapter without 
     regard to whether the per passenger subsidy required exceeds 
     the per passenger subsidy cap provided under that subchapter.

                        TITLE V--AVIATION SAFETY

     SEC. 501. RUNWAY SAFETY EQUIPMENT PLAN.

       Not later than December 31, 2008, the Administrator of the 
     Federal Aviation Administration shall issue a plan to develop 
     an installation and deployment schedule for systems the 
     Administration is installing to alert controllers and flight 
     crews to potential runway incursions. The plan shall be 
     integrated into the annual Federal Aviation Administration 
     operational evolution plan.

     SEC. 502. AIRCRAFT FUEL TANK SAFETY IMPROVEMENT.

       Not later than December 31, 2008, the Federal Aviation 
     Administration shall issue a final rule regarding the 
     reduction of fuel tank flammability in transport category 
     aircraft.

     SEC. 503. 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 this subsection, 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. 504. 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 
     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 3 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) In this section, the term `engineering data' means 
     type design drawings and specifications for the entire 
     product or change to the product, including the original 
     design data, and any associated supplier data for individual 
     parts or components approved as part of the particular 
     aeronautical product certificate.''.

     SEC. 505. DESIGN ORGANIZATION CERTIFICATES.

       Section 44704(e) is amended--
       (1) by striking ``Beginning 7 years after the date of 
     enactment of this subsection,'' in paragraph (1) and 
     inserting ``Effective January 1, 2013,'';
       (2) by striking ``testing'' in paragraph (2) and inserting 
     ``production''; and
       (3) by striking paragraph (3) and inserting the following:
       ``(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. 506. FAA ACCESS TO CRIMINAL HISTORY RECORDS OR DATABASE 
                   SYSTEMS.

       (a) In General.--Chapter 401 is amended by adding at the 
     end thereof the following:

[[Page 7136]]



     ``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 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 commission 
     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) System of Documented Criminal Justice Information 
     Defined.--In this section the term `system of documented 
     criminal justice information' means any law enforcement 
     databases, systems, or communications containing information 
     concerning identification, criminal history, arrests, 
     convictions, arrest warrants, or wanted or missing persons, 
     including the National Crime Information Center and its 
     incorporated criminal history databases and the National Law 
     Enforcement Telecommunications System.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     401 is amended by inserting after the item relating to 
     section 40129 the following:

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

     SEC. 507. FLIGHT CREW FATIGUE.

       (a) In General.--Within 3 months after the date of 
     enactment of this Act the Administrator of the Federal 
     Aviation Administration shall conclude arrangements with the 
     National Academy of Sciences for a study of pilot fatigue.
       (b) Study.--The study shall include consideration of--
       (1) research on fatigue, sleep, and circadian rhythms;
       (2) sleep and rest requirements recommended by the National 
     Transportation Safety Board; and
       (3) international standards.
       (c) Report.--Within 18 months after initiating the study, 
     the National Academy shall submit a report to the 
     Administrator containing its findings and recommendations, 
     including recommendations with respect to Federal Aviation 
     Regulations governing flight limitation and rest 
     requirements.
       (d) Rulemaking.--After the Administrator receives the 
     National Academy's report, the Federal Aviation 
     Administration shall consider the findings of the National 
     Academy in its rulemaking proceeding on flight time 
     limitations and rest requirements.
       (e) Implementation of Flight Attendant Fatigue Study 
     Recommendations.--Within 60 days after the date of enactment 
     of this Act, the Administrator of the Federal Aviation 
     Administration shall initiate a process to carry out the 
     recommendations of the CAMI study on flight attendant 
     fatigue.

     SEC. 508. INCREASING SAFETY FOR HELICOPTER EMERGENCY MEDICAL 
                   SERVICE OPERATORS.

       (a) Compliance With 14 CFR Part 135 Regulations.--No later 
     than 18 months after the date of enactment of this Act, all 
     helicopter emergency medical service operators shall comply 
     with the regulations in part 135 of title 14, Code of Federal 
     Regulations whenever there is a medical crew on board, 
     without regard to whether there are patients on board the 
     helicopter.
       (b) Implementation of Flight Risk Evaluation Program.--
     Within 60 days after the date of enactment of this Act, the 
     Federal Aviation Administration shall initiate, and complete 
     within 18 months, a rulemaking--
       (1) to create a standardized checklist of risk evaluation 
     factors based on its Notice 8000.301, issued in August, 2005; 
     and
       (2) to require helicopter emergency medical service 
     operators to use the checklist to determine whether a mission 
     should be accepted.
       (c) Comprehensive Consistent Flight Dispatch Procedures.--
     Within 60 days after the date of enactment of this Act, the 
     Federal Aviation Administration shall initiate, and complete 
     within 18 months, a rulemaking--
       (1) to create standardized flight dispatch procedures for 
     helicopter emergency medical service operators based on the 
     regulations in part 121 of title 14, Code of Federal 
     Regulations; and
       (2) to require such operators to use those procedures for 
     flights.
       (d) Improving Situational Awareness.--Any helicopter used 
     for helicopter emergency medical service operations that is 
     ordered, purchased, or otherwise obtained after the date of 
     enactment of this Act shall have on board an operational 
     terrain awareness and warning system that meets the technical 
     specifications of section 135.154 of the Federal Aviation 
     Regulations (14 C.F.R. 135.154).
       (e) Improving the Data Available to NTSB Investigators at 
     Crash Sites.--
       (1) Study.--Within 1 year after the date of enactment of 
     this Act, the Federal Aviation Administration shall complete 
     a feasibility study of requiring flight data and cockpit 
     voice recorders on new and existing helicopters used for 
     emergency medical service operations. The study shall 
     address, at a minimum, issues related to survivability, 
     weight, and financial considerations of such a requirement.
       (2) Rulemaking.--Within 2 years after the date of enactment 
     of this Act, the Federal Aviation Administration shall 
     complete a rulemaking to require flight data and cockpit 
     voice recorders on board such helicopters.

     SEC. 509. CABIN CREW COMMUNICATION.

       (a) In General.--Section 44728 is amended--
       (1) by redesignating subsection (f) as subsection (g); and
       (2) by inserting after subsection (e) the following:
       ``(f) Minimum Language Skills.--
       ``(1) In general.--No certificate holder may use any person 
     to serve, nor may any person serve, as a flight attendant 
     under this part, unless that person has the ability to read, 
     speak, and write English well enough to--
       ``(A) read material written in English and comprehend the 
     information;
       ``(B) speak and understand English sufficiently to provide 
     direction to, and understand and answer questions from, 
     English-speaking individuals;
       ``(C) write incident reports and statements and log entries 
     and statements; and
       ``(D) carry out written and oral instructions regarding the 
     proper performance of their duties.
       ``(2) Foreign flights.--The requirements of paragraph (1) 
     do not apply to service as a flight attendant on a flight 
     operated by a certificate holder solely between points 
     outside the United States.''.
       (b) Administration.--The Administrator of the Federal 
     Aviation Administration shall work with certificate holders 
     to which section 44728(f) of title 49, United States Code, 
     applies to facilitate compliance with the requirements of 
     section 44728(f)(1) of that title.

     SEC. 510. CLARIFICATION OF MEMORANDUM OF UNDERSTANDING WITH 
                   OSHA.

       (a) In General.--Within 6 months after the date of 
     enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall--
       (1) establish milestones, in consultation with the 
     Occupational Safety and Health Administration, through a 
     report to Congress for the completion of work begun under the 
     August 2000 memorandum of understanding between the 2 
     Administrations and to address issues needing further action 
     in the Administrations' joint report in December 2000; and
       (2) initiate development of a policy statement to set forth 
     the circumstances in which Occupational Safety and Health 
     Administration requirements may be applied to crewmembers 
     while working in the aircraft cabin.
       (b) Policy Statement.--The policy statement to be developed 
     under subsection (a)(2) shall satisfy the following 
     principles:
       (1) The establishment of a coordinating body similar to the 
     Aviation Safety and Health Joint Team established by the 
     August 2000 memorandum of understanding that includes 
     representatives designated by both Administrations--
       (A) to examine the applicability of current and future 
     Occupational Safety and Health Administration regulations;
       (B) to recommend policies for facilitating the training of 
     Federal Aviation Administration inspectors; and
       (C) to make recommendations that will govern the inspection 
     and enforcement of safety and health standards on board 
     aircraft in operation and all work-related environments.
       (2) Any standards adopted by the Federal Aviation 
     Administration shall set forth clearly--

[[Page 7137]]

       (A) the circumstances under which an employer is required 
     to take action to address occupational safety and health 
     hazards;
       (B) the measures required of an employer under the 
     standard; and
       (C) the compliance obligations of an employer under the 
     standard.

     SEC. 511. ACCELERATION OF DEVELOPMENT AND IMPLEMENTATION OF 
                   REQUIRED NAVIGATION PERFORMANCE APPROACH 
                   PROCEDURES.

       (a) In General.--The Administrator of the Federal Aviation 
     Administration shall set a target of achieving a minimum of 
     200 Required Navigation Performance procedures each fiscal 
     year through fiscal year 2012, with 25 percent of that target 
     number meeting the low visibility approach criteria.
       (b) Use of Third Parties.--The Administrator is authorized 
     to provide third parties the ability to design, flight check, 
     and implement Required Navigation Performance approach 
     procedures.

     SEC. 512. ENHANCED SAFETY FOR AIRPORT OPERATIONS.

       From amounts appropriated for fiscal years 2009 through 
     2011 pursuant to section 48101(a) of title 49, United States 
     Code, the Secretary shall make available such sums as may be 
     necessary for use in relocating the radar facility at 
     National Plan of Integrated Airport Systems airport number 
     54-0026 to improve the safety, efficiency, and security of 
     air traffic control, navigation, low altitude communications 
     and surveillance, and weather. The Administrator of the 
     Federal Aviation Administration shall ensure that the radar 
     is relocated before September 30, 2011.

     SEC. 513. IMPROVED SAFETY INFORMATION.

       Not later than December 31, 2008, the Administrator of the 
     Federal Aviation Administration shall issue a final rule in 
     docket No. FAA-2008-0188, Re-registration and Renewal of 
     Aircraft Registration. The final rule shall include--
       (1) provision for the expiration of a certificate for an 
     aircraft registered as of the date of enactment of this Act, 
     with re-registration requirements for those aircraft that 
     remain eligible for registration;
       (2) provision for the periodic expiration of all 
     certificates issued after the effective date of the rule with 
     a registration renewal process; and
       (3) other measures to promote the accuracy and efficient 
     operation and value of the Administration's aircraft 
     registry.

     SEC. 514. VOLUNTARY DISCLOSURE REPORTING PROCESS 
                   IMPROVEMENTS.

       Within 180 days after the date of enactment of this Act, 
     the Administrator of the Federal Aviation Administration 
     shall--
       (1) take such action as may be necessary to ensure that the 
     Voluntary Disclosure Reporting Process requires inspectors--
       (A) to evaluate corrective action proposed by an air 
     carrier with respect to a matter disclosed by that air 
     carrier is sufficiently comprehensive in scope and 
     application and applies to all affected aircraft operated by 
     that air carrier before accepting the proposed voluntary 
     disclosure; and
       (B) to verify that corrective action so identified by an 
     air carrier is completed within the timeframe proposed; and
       (C) to verify by inspection that the carrier's corrective 
     action adequately corrects the problem that was disclosed; 
     and
       (2) establish a second level supervisory review of 
     disclosures under the Voluntary Disclosure Reporting Process 
     before any proposed disclosure is accepted and closed that 
     will ensure that a matter disclosed by an air carrier--
       (A) has not been previously identified by a Federal 
     Aviation Administration inspector; and
       (B) has not been previously disclosed by the carrier in the 
     preceding 5 years.

     SEC. 515. PROCEDURAL IMPROVEMENTS FOR INSPECTIONS.

       (a) Employment by Inspected Air Carriers.--Within 90 days 
     after the date of enactment of this Act, the Administrator of 
     the Federal Aviation Administration shall initiate a 
     rulemaking proceeding to revise its post-employment guidance 
     to prohibit an inspector employed by an air carrier the 
     inspector was responsible for inspecting from representing 
     that air carrier before the Federal Aviation Administration 
     or participating in negotiations or other contacts with the 
     Federal Aviation Administration on behalf of that air carrier 
     for a period of 2 years after terminating employment by the 
     Federal Aviation Administration.
       (b) Inspection Tracking.--Within 90 days after the date of 
     enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall implement a process for 
     tracking field office review of air carrier compliance with 
     Federal Aviation Administration air worthiness directives. In 
     tracking air worthiness directive compliance, the 
     Administrator shall ensure that--
       (1) each air carriers under the Administration's air 
     transportation oversight system is reviewed for 100 percent 
     compliance on a 5-year cycle;
       (2) Compliance reviews include physical inspections at each 
     applicable carrier of a sample of the aircraft to which the 
     air worthiness certificate applies; and
       (3) the appropriate local and regional offices, and the 
     Administrator, are alerted whenever a carrier is no longer in 
     compliance with an air worthiness directive.

     SEC. 516. INDEPENDENT REVIEW OF SAFETY ISSUES.

       Within 30 days after the date of enactment of this Act, the 
     Comptroller General shall initate a review and investigation 
     of air safety issues identified by Federal Aviation 
     Administration employees and reported to the Administrator. 
     The Comptroller General shall report the Government 
     Accountability Office's findings and recommendations to the 
     Administrator, the Senate Committee on Commerce, Science, and 
     Transportation, and the House of Representatives Committee on 
     Transportation and Infrastructure on an annual basis.

     SEC. 517. NATIONAL REVIEW TEAM.

       (a) In General.--Within 180 days after the date of 
     enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall establish a national review 
     team within the Administration to conduct periodic, random 
     reviews of the Administration's oversight of air carriers and 
     report annually its findings and recommendations to the 
     Administrator, the Senate Commerce, Science, and 
     Transportation Committee, and the House of Representatives 
     Committee on Transportation and Infrastructure.
       (b) Inspector General Reports.--The Inspector General of 
     the Department of Transportation shall provide progress 
     reports to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure on the review teams and 
     their effectiveness.
       (c) Additional Safety Inspectors.--From amounts 
     appropriated pursuant to section 106(k)(1) of title 49, 
     United States Code, the Administrator of the Federal Aviation 
     Administration may hire a net increase of 200 additional 
     safety inspectors.

     SEC. 518. FAA ACADEMY IMPROVEMENTS.

       (a) Review.--Within 1 year after the date of enactment of 
     this Act, the Administrator of the Federal Aviation 
     Administration shall conduct a comprehensive review and 
     evaluation of its Academy and facility training efforts.
       (b) Facility Training Program.--The Administrator shall--
       (1) clarify responsibility for oversight and direction of 
     the Academy's facility training program at the national 
     level;
       (2) communicate information concerning that responsibility 
     to facility managers; and
       (3) establish standards to identify the number of 
     developmental controllers that can be accommodated at each 
     facility, based on--
       (A) the number of available on-the-job-training 
     instructors;
       (B) available classroom space;
       (C) the number of available simulators;
       (D) training requirements; and
       (E) the number of recently placed new personnel already in 
     training.

     SEC. 519. REDUCTION OF RUNWAY INCURSIONS AND OPERATIONAL 
                   ERRORS.

       (a) Plan.--The Administrator of the Federal Aviation 
     Administration shall develop a plan for the reduction of 
     runway incursions by reviewing every commercial service 
     airport (as defined in section 47102 of title 49, United 
     States Code) in the United States and initiating action to 
     improve airport lighting, provide better signage, and improve 
     runway and taxiway markings.
       (b) Process.--Within 1 year after the date of enactment of 
     this Act, the Administrator of the Federal Aviation 
     Administration shall develop a process for tracking and 
     investigating operational errors and runway incursions that 
     includes--
       (1) identifying the office responsible for establishing 
     regulations regarding operational errors and runway 
     incursions;
       (2) identifying who is responsible for tracking and 
     investigating operational errors and runway incursions and 
     taking remedial actions;
       (3) identifying who is responsible for tracking operational 
     errors and runway incursions, including a process for lower 
     level employees to report to higher supervisory levels; and
       (4) periodic random audits of the oversight process.

                      TITLE VI--AVIATION RESEARCH

     SEC. 601. AIRPORT COOPERATIVE RESEARCH PROGRAM.

       (a) In General.--Section 44511(f) is amended--
       (1) by striking ``establish a 4-year pilot'' in paragraph 
     (1) and inserting ``maintain an''; and
       (2) by inserting ``pilot'' in paragraph (4) before 
     ``program'' the first time it appears; and
       (3) by striking ``program, including recommendations as to 
     the need for establishing a permanent airport cooperative 
     research program.'' in paragraph (4) and inserting 
     ``program.''.
       (b) Airport Cooperative Research Program.--Not more than 
     $15,000,000 per year for fiscal years 2008, 2009, 2010, and 
     2011 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.

[[Page 7138]]



     SEC. 602. REDUCTION OF NOISE, EMISSIONS, AND ENERGY 
                   CONSUMPTION FROM CIVILIAN AIRCRAFT.

       (a) Establishment of Research Program.--From amounts made 
     available under section 48102(a) of title 49, United States 
     Code, the Administrator of the Federal Aviation 
     Administration shall establish a research program related to 
     reducing civilian aircraft source noise and emissions through 
     grants or other measures authorized under section 106(l)(6) 
     of such title, including reimbursable agreements with other 
     Federal agencies. The program shall include participation of 
     educational and research institutions or private sector 
     entities that have existing facilities and experience for 
     developing and testing noise, emissions and energy reduction 
     engine and aircraft technology, and developing alternative 
     fuels.
       (b) Establishing a Consortium.--Within 6 months after the 
     date of enactment of this Act, the Administrator shall 
     designate, using a competitive process, an institution, 
     entity, or consortium described in subsection (a) as a 
     Consortium for Aviation Noise, Emissions, and Energy 
     Technology Research to perform research in accordance with 
     this section. The Consortium shall conduct the research 
     program in coordination with the National Aeronautics and 
     Space Administration and other relevant agencies.
       (c) Performance Objectives.--By January 1, 2015, the 
     research program shall accomplish the following objectives:
       (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 nitrogen oxide emissions by 50 percent, without 
     increasing other gaseous or particle emissions, over the 
     International Civil Aviation Organization standard adopted in 
     2004.
       (3) Certifiable aircraft technology that reduces noise 
     levels by 10 dB (30 dB cumulative) 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.
       (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.

     SEC. 603. PRODUCTION OF CLEAN COAL FUEL TECHNOLOGY FOR 
                   CIVILIAN AIRCRAFT.

       (a) Establishment of Research Program.--From amounts made 
     available under section 48102(a) of title 49, United States 
     Code, the Secretary of Transportation shall establish a 
     research program related to developing jet fuel from clean 
     coal through grants or other measures authorized under 
     section 106(l)(6) of such title, including reimbursable 
     agreements with other Federal agencies. The program shall 
     include participation by educational and research 
     institutions that have existing facilities and experience in 
     the development and deployment of technology that processes 
     coal to aviation fuel.
       (b) Designation of Institution as a Center of Excellence.--
     Within 6 months after the date of enactment of this Act, the 
     Administrator of the Federal Aviation Administration shall 
     designate an institution described in subsection (a) as a 
     Center of Excellence for Coal-to-Jet-Fuel Research.

     SEC. 604. ADVISORY COMMITTEE ON FUTURE OF AERONAUTICS.

       (a) Establishment.--There is established an advisory 
     committee to be know as the ``Advisory Committee on the 
     Future of Aeronautics''.
       (b) Membership.--The Advisory Committee shall consist of 7 
     members appointed by the President from a list of 15 
     candidates proposed by the Director of the National Academy 
     of Sciences.
       (c) Chairperson.--The Advisory Committee members shall 
     elect 1 member to serve as chairperson of the Advisory 
     Committee.
       (d) Functions.--The Advisory Committee shall examine the 
     best governmental and organizational structures for the 
     conduct of civil aeronautics research and development, 
     including options and recommendations for consolidating such 
     research to ensure continued United States leadership in 
     civil aeronautics. The Committee shall consider transferring 
     responsibility for civil aeronautics research and development 
     from the National Aeronautics and Space Administration to 
     other existing departments or agencies of the Federal 
     government or to a non-governmental organization such as 
     academic consortia or not-for-profit organizations. In 
     developing its recommendations, the Advisory Committee shall 
     consider, as appropriate, the aeronautics research policies 
     developed pursuant to section 101(d) of Public Law 109-155 
     and the requirements and priorities for aeronautics research 
     established by title IV of Public Law 109-155.
       (e) Report.--Not later than 12 months after the date on 
     which the full membership of the Advisory Committee is 
     appointed, the Advisory Committee shall submit a report to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House Committees on Science and Technology and on 
     Transportation and Infrastructure on its findings and 
     recommendations. The report may recommend a rank ordered list 
     of acceptable solutions.
       (f) Termination.--The Advisory Committee shall terminate 60 
     days after the date on which it submits the report to the 
     Congress.

     SEC. 605. RESEARCH PROGRAM TO IMPROVE AIRFIELD PAVEMENTS.

       (a) Continuation of Program.--The Administrator of the 
     Federal Aviation Administration shall continue the program to 
     consider awards to nonprofit concrete and asphalt pavement 
     research foundations to improve the design, construction, 
     rehabilitation, and repair of airfield pavements to aid in 
     the development of safer, more cost effective, and more 
     durable airfield pavements.
       (b) Use of Grants or Cooperative Agreements.--The 
     Administrator may use grants or cooperative agreements in 
     carrying out this section.

     SEC. 606. WAKE TURBULENCE, VOLCANIC ASH, AND WEATHER 
                   RESEARCH.

       Within 60 days after the date of enactment of this Act, the 
     Administrator of the Federal Aviation Administration shall--
       (1) initiate evaluation of proposals that would increase 
     capacity throughout the air transportation system by reducing 
     existing spacing requirements between aircraft of all sizes, 
     including research on the nature of wake vortices;
       (2) begin implementation of a system to improve volcanic 
     ash avoidance options for aircraft, including the development 
     of a volcanic ash warning and notification system for 
     aviation; and
       (3) establish research projects on--
       (A) ground de-icing/anti-icing, ice pellets, and freezing 
     drizzle;
       (B) oceanic weather, including convective weather;
       (C) en route turbulence prediction and detection; and
       (D) all hazards during oceanic operations, where commercial 
     traffic is high and only rudimentary satellite sensing is 
     available, to reduce the hazards presented to commercial 
     aviation.

     SEC. 607. INCORPORATION OF UNMANNED AERIAL SYSTEMS INTO FAA 
                   PLANS AND POLICIES.

       (a) Research.--
       (1) Equipment.--Section 44504 is amended--
       (A) by inserting ``unmanned and manned'' in subsection (a) 
     after ``improve'';
       (B) by striking ``and'' after the semicolon in subsection 
     (b)(6);
       (C) by striking ``aircraft.'' in subsection (b)(7) and 
     inserting ``aircraft; and''; and
       (D) by adding at the end of subsection (b) the following:
       ``(8) in conjunction with other Federal agencies as 
     appropriate, to develop technologies and methods to assess 
     the risk of and prevent defects, failures, and malfunctions 
     of products, parts, and processes, for use in all classes of 
     unmanned aerial systems that could result in a catastrophic 
     failure.''.
       (2) Human Factors; Simulations.--Section 44505(b) is 
     amended--
       (A) by striking ``and'' after the semicolon in paragraph 
     (4);
       (B) by striking ``programs.'' in paragraph (5)(C) and 
     inserting ``programs; and''; and
       (C) by adding at the end thereof the following:
       ``(6) to develop a better understanding of the relationship 
     between human factors and unmanned aerial systems air safety; 
     and
       ``(7) to develop dynamic simulation models of integrating 
     all classes of unmanned aerial systems into the National Air 
     Space.''.
       (b) National Academy of Sciences Assessment.--
       (1) In general.--Within 3 months after the date of 
     enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall enter into an arrangement with 
     the National Academy of Science for an assessment of unmanned 
     aerial systems that shall include consideration of--
       (A) human factors regarding unmanned aerial systems 
     operation;
       (B) ``detect, sense and avoid technologies'' with respect 
     to both cooperative and non-cooperative aircraft;
       (C) spectrum issues and bandwidth requirements;
       (D) operation in suboptimal winds and adverse weather 
     conditions;
       (E) mechanisms for letter others know where the unmanned 
     aerial system is flying;
       (F) airworthiness and system redundancy;
       (G) flight termination systems for safety and security;
       (H) privacy issues;
       (I) technologies for unmanned aerial systems flight 
     control;
       (J) technologies for unmanned aerial systems propulsion;
       (K) unmanned aerial systems operator qualifications, 
     medical standards, and training requirements;
       (L) unmanned aerial systems maintenance requirements and 
     training requirements; and
       (M) any other unmanned aerial systems-related issue the 
     Administrator believes should be addressed.
       (2) Report.--Within 12 months after initiating the study, 
     the National Academy shall submit its report to the 
     Administrator, the Senate Committee on Commerce, Science, and 
     Transportation, and the House of Representatives Committee on 
     Transportation and Infrastructure containing its findings and 
     recommendations.
       (c) Pilot Projects.--

[[Page 7139]]

       (1) In general.--The Administrator of the Federal Aviation 
     Administration shall establish 3 2-year cost-shared pilot 
     projects in sparsely populated, low-density Class G air 
     traffic airspace to conduct experiments and collect data in 
     order to accelerate the safe integration of unmanned aerial 
     systems into the National Airspace System as follows:
       (A) 1 project shall address operational issues required for 
     integration of Category 1 unmanned aerial systems.
       (B) 1 project shall address operational issues required for 
     integration of Category 2 unmanned aerial systems.
       (C) 1 project shall address operational issues required for 
     integration of Category 3 unmanned aerial systems.
       (2) Use of consortia.--In conducting the pilot projects, 
     the Administrator shall encourage the formation of consortia 
     from the public and private sectors, educational 
     institutions, and non-profit organization.
       (3) Report.--Within 60 days after completing the pilot 
     projects, the Administrator shall transmit a report to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure setting forth the Administrator's findings and 
     conclusions concerning the projects.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated to the Administrator for fiscal years 2008 
     and 2009 such sums as may be necessary to conduct the pilot 
     projects.
       (d) FAA Task List.--
       (1) Streamline unmanned aerial systems certification 
     process.--Within 30 days after the date of enactment of this 
     Act, the Administrator of the Federal Aviation Administration 
     shall develop and transmit an unmanned aerial systems 
     ``roadmap'' to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure.
       (2) Update policy statement.--Within 45 days after the date 
     of enactment of this Act, the Administrator shall issue an 
     updated policy statement on unmanned aerial systems under 
     Docket No. FAA-2006-25714; Notice No. 07-01.
       (3) Issue nprm for certificates.--Within 90 days after the 
     date of enactment of this Act, the Administrator shall 
     publish a notice of proposed rulemaking on issuing 
     airworthiness certificates and experimental certificates to 
     unmanned aerial systems operators for compensation or hire. 
     The Administrator shall promulgate a final rule 90 days after 
     the date on which the notice is published.
       (4) Notice to Congress on basing unmanned aerial systems 
     regulations on ultralight regulations.--Within 90 days after 
     the date of enactment of this Act, the Administrator shall 
     transmit a report to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure on the 
     potential of using part 103 of title 14, Code of Federal 
     Regulations (relating to Ultralight Aircraft), as the 
     regulatory basis for regulations on lightweight unmanned 
     aerial systems.
       (e) Consolidated Rulemaking Deadline.--No later than April 
     30, 2010, the Federal Aviation Administration and other 
     affected Federal agencies shall have initiated all of the 
     rule makings regarding vehicle design requirements, 
     operational requirements, airworthiness requirements, and 
     flight crew certifications requirements necessary for 
     integrating all categories of unmanned aerial systems into 
     the national air space, taking into consideration the 
     recommendations the Administrator receives from the National 
     Academy of Sciences report under subsection (b), the unmanned 
     aerial systems ``roadmap'' developed by the Administrator 
     under subsection (d)(1), the recommendations of the Radio 
     Technical Committee Aeronautics Special Committee 203 (RTCA-
     SC 203), and the data generated from the 3 pilot projects 
     conducted under subsection (c).

     SEC. 608. REAUTHORIZATION OF CENTER OF EXCELLENCE IN APPLIED 
                   RESEARCH AND TRAINING IN THE USE OF ADVANCED 
                   MATERIALS IN TRANSPORT AIRCRAFT.

       Section 708(b) of the Vision 100--Century of Aviation 
     Reauthorization Act (49 U.S.C. 44504 note) is amended by 
     striking ``$500,000 for fiscal year 2004'' and inserting 
     ``$1,000,000 for each of fiscal years 2008 through 2012''.

     SEC. 609. PILOT PROGRAM FOR ZERO EMISSION AIRPORT VEHICLES.

       (a) In General.--Subchapter I of chapter 471 is amended by 
     inserting after section 47136 the following:

     ``Sec. 47136A. Zero emission airport vehicles and 
       infrastructure

       ``(a) In General.--The Secretary of Transportation shall 
     establish a pilot program under which the sponsor of a 
     public-use airport may use funds made available under section 
     47117 or section 48103 for use at such airports or passenger 
     facility revenue (as defined in section 40117(a)(6)) to carry 
     out activities associated with the acquisition and operation 
     of zero emission vehicles (as defined in section 88.120-94 of 
     title 40, Code of Federal Regulations), including the 
     construction or modification of infrastructure to facilitate 
     the delivery of fuel and services necessary for the use of 
     such vehicles. Any use of funds authorized by the preceding 
     sentence shall be considered to be an authorized use of funds 
     under section 47117 or section 48103, or an authorized use of 
     passenger facility revenue (as defined in section 
     40117(a)(6)), as the case may be.
       ``(b) Location in Air Quality Nonattainment Areas.--
       ``(1) In general.--A public-use airport shall be eligible 
     for participation in the pilot program only if the airport is 
     located in an air quality nonattainment area (as defined in 
     section 171(2) of the Clean Air Act (42 U.S.C. 7501(2))).
       ``(2) Shortage of candidates.--If the Secretary receives an 
     insufficient number of applications from public-use airports 
     located in such areas, then the Secretary may consider 
     applications from public-use airports that are not located in 
     such areas.
       ``(c) Selection Criteria.--In selecting from among 
     applicants for participation in the program, the Secretary 
     shall give priority consideration to applicants that will 
     achieve the greatest air quality benefits measured by the 
     amount of emissions reduced per dollar of funds expended 
     under the program.
       ``(d) Federal Share.--Notwithstanding any other provision 
     of this subchapter, the Federal share of the costs of a 
     project carried out under the program shall be 50 percent.
       ``(e) Technical Assistance.--
       ``(1) In general.--The sponsor of a public-use airport 
     carrying out activities funded under the program may not use 
     more than 10 percent of the amounts made available under the 
     program in any fiscal year for technical assistance in 
     carrying out such activities.
       ``(2) Eligible consortium.--To the maximum extent 
     practicable, participants in the program shall use an 
     eligible consortium (as defined in section 5506 of this 
     title) in the region of the airport to receive technical 
     assistance described in paragraph (1).
       ``(f) Materials Identifying Best Practices.--The Secretary 
     may develop and make available materials identifying best 
     practices for carrying out activities funded under the 
     program based on projects carried out under section 47136 and 
     other sources.''.
       (b) Report on Effectiveness of Program.--Not later than 18 
     months after the date of enactment of this section, the 
     Secretary of Transportation shall transmit a report to the 
     Senate Committee on Commerce, Science, and Transportation the 
     House of Representatives Committee on Transportation and 
     Infrastructure containing--
       (1) an evaluation of the effectiveness of the pilot 
     program;
       (2) an identification of all public-use airports that 
     expressed an interest in participating in the program; and
       (3) a description of the mechanisms used by the Secretary 
     to ensure that the information and know-how gained by 
     participants in the program is transferred among the 
     participants and to other interested parties, including other 
     public-use airports.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     471 is amended by inserting after the item relating to 
     section 47136 the following:

``47136A. Zero emission airport vehicles and infrastructure''.

     SEC. 610. REDUCTION OF EMISSIONS FROM AIRPORT POWER SOURCES.

       (a) In General.--Subchapter I of chapter 471 is amended by 
     inserting after section 47140 the following:

     ``Sec. 47140A. Reduction of emissions from airport power 
       sources

       ``(a) In General.--The Secretary of Transportation shall 
     establish a program under which the sponsor of each airport 
     eligible to receive grants under section 48103 is encouraged 
     to assess the airport's energy requirements, including 
     heating and cooling, base load, back-up power, and power for 
     on-road airport vehicles and ground support equipment, in 
     order to identify opportunities to reduce harmful emissions 
     and increase energy efficiency at the airport.
       ``(b) Grants.--The Secretary may make grants under section 
     48103 to assist airport sponsors that have completed the 
     assessment described in subsection (a) to acquire or 
     construct equipment, including hydrogen equipment and related 
     infrastructure, that will reduce harmful emissions and 
     increase energy efficiency at the airport. To be eligible for 
     such a grant, the sponsor of such an airport shall submit an 
     application to the Secretary, at such time, in such manner, 
     and containing such information as the Secretary may 
     require.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     471 is amended by inserting after the item relating to 
     section 47140 the following:

``47140A. Reduction of emissions from airport power sources''.

                        TITLE VII--MISCELLANEOUS

     SEC. 701. GENERAL AUTHORITY.

       (a) Third Party Liability.--Section 44303(b) is amended by 
     striking ``December 31, 2006,'' and inserting ``December 31, 
     2012,''.
       (b) Extension of Program Authority.--Section 44310 is 
     amended by striking ``March 30, 2008.'' and inserting 
     ``October 1, 2017.''.

     SEC. 702. HUMAN INTERVENTION MANAGEMENT STUDY.

       Within 6 months after the date of enactment of this Act, 
     the Administrator of the

[[Page 7140]]

     Federal Aviation Administration shall develop a Human 
     Intervention Management Study program for cabin crews 
     employed by commercial air carriers in the United States.

     SEC. 703. AIRPORT PROGRAM MODIFICATIONS.

       The Administrator of the Federal Aviation Administration--
       (1) shall establish a formal, structured certification 
     training program for the airport concessions disadvantaged 
     business enterprise program; and
       (2) may appoint 3 additional staff to implement the 
     programs of the airport concessions disadvantaged business 
     enterprise initiative.

     SEC. 704. MISCELLANEOUS PROGRAM EXTENSIONS.

       (a) Extension of Metropolitan Washington Airports 
     Authority.--Section 49108 is amended by striking ``2008,'' 
     and inserting ``2011,''.
       (b) Marshall Islands, Federated States of Micronesia, and 
     Palau.--Section 47115(j) is amended by striking ``2007,'' and 
     inserting ``2011,''.
       (c) Midway Island Airport.--Section 186(d) of the Vision 
     100--Century of Aviation Reauthorization Act (17 Stat. 2518) 
     is amended by striking ``October 1, 2007,'' and inserting 
     ``October 1, 2011,''.

     SEC. 705. EXTENSION OF COMPETITIVE ACCESS REPORTS.

       Section 47107(s) is amended by striking paragraph (3).

     SEC. 706. UPDATE ON OVERFLIGHTS.

       (a) In General.--Section 45301(b) is amended to read as 
     follows:
       ``(b) Limitations.--
       ``(1) In general.--In establishing fees under subsection 
     (a), the Administrator shall ensure that the fees required by 
     subsection (a) are reasonably related to the Administration's 
     costs, as determined by the Administrator, of providing the 
     services rendered. Services for which costs may be recovered 
     include the costs of air traffic control, navigation, weather 
     services, training, and emergency services which are 
     available to facilitate safe transportation over the United 
     States, and other services provided by the Administrator or 
     by programs financed by the Administrator to flights that 
     neither take off nor land in the United States. The 
     determination of such costs by the Administrator is not 
     subject to judicial review.
       ``(2) Adjustment of fees.--The Administrator shall adjust 
     the overflight fees established by subsection (a)(1) by 
     expedited rulemaking and begin collections under the adjusted 
     fees by October 1, 2009. In developing the adjusted 
     overflight fees, the Administrator shall seek and consider 
     the recommendations, if any, offered by the Aviation 
     Rulemaking Committee for Overflight Fees that are intended to 
     ensure that overflight fees are reasonably related to the 
     Administrator's costs of providing air traffic control and 
     related services to overflights. In addition, the 
     Administrator may periodically modify the fees established 
     under this section either on the Administrator's own 
     initiative or on a recommendation from the Air Traffic 
     Control Modernization Board.
       ``(3) Cost data.--The adjustment of overflight fees under 
     paragraph (2) 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 Administration's cost 
     accounting system and cost allocation system to users, as 
     well as budget and operational data.
       ``(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 
     en route or oceanic airspace.
       ``(5) Costs defined.--In this subsection, 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.
       ``(6) Publication; comment.--The Administrator shall 
     publish in the Federal Register any fee schedule under this 
     section, including any adjusted overflight fee schedule, and 
     the associated collection process as a proposed rule, 
     pursuant to which public comment will be sought and a final 
     rule issued.''.
       (b) Administrative Provision.--Section 45303(c)(2) is 
     amended to read as follows:
       ``(2) shall be available to the Administrator for 
     expenditure for purposes authorized by Congress for the 
     Federal Aviation Administration, however, fees established by 
     section 45301(a)(1) of title 49 of the United States Code 
     shall be available only to pay the cost of activities and 
     services for which the fee is imposed, including the costs to 
     determine, assess, review, and collect the fee; and''.

     SEC. 707. TECHNICAL CORRECTIONS.

       Section 40122(g), as amended by section 307 of this Act, is 
     further amended--
       (1) by striking ``2302(b), relating to whistleblower 
     protection,'' in paragraph (2)(A) and inserting ``2302,'';
       (2) by striking ``and'' after the semicolon in paragraph 
     (2)(H).
       (3) by striking ``Plan.'' in paragraph (2)(I)(iii) and 
     inserting ``Plan; and'';
       (4) by adding at the end of paragraph (2) the following:
       ``(J) sections 6381 through 6387, relating to Family and 
     Medical Leave.''; and
       (5) by adding at the end of paragraph (3) ``Notwithstanding 
     any other provision of law, retroactive to April 1, 1996, the 
     Board shall have the same remedial authority over such 
     employee appeals that it had as of March 31, 1996.''.

     SEC. 708. FAA TECHNICAL TRAINING AND STAFFING.

       (a) Study.--
       (1) In general.--The Comptroller General shall conduct a 
     study of the training of airway transportation systems 
     specialists of the Federal Aviation Administration that 
     includes--
       (A) an analysis of the type of training provided to such 
     specialists;
       (B) an analysis of the type of training that such 
     specialists need to be proficient in the maintenance of the 
     latest technologies;
       (C) actions that the Administration has undertaken to 
     ensure that such specialists receive up-to-date training on 
     such technologies;
       (D) the amount and cost of training provided by vendors for 
     such specialists;
       (E) the amount and cost of training provided by the 
     Administration after developing in-house training courses for 
     such specialists;
       (F) the amount and cost of travel required of such 
     specialists in receiving training; and
       (G) a recommendation regarding the most cost-effective 
     approach to providing such training.
       (2) Report.--Within 1 year after the date of enactment of 
     this Act, the Comptroller General shall transmit a report on 
     the study containing the Comptroller General's findings and 
     recommendations to the Senate Committee on Commerce, Science, 
     and Transportation and the House of Representatives Committee 
     on Transportation and Infrastructure.
       (b) Study by National Academy of Sciences.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall contract with the National 
     Academy of Sciences to conduct a study of the assumptions and 
     methods used by the Federal Aviation Administration to 
     estimate staffing needs for Federal Aviation Administration 
     air traffic controllers, system specialists, and engineers to 
     ensure proper maintenance, certification, and operation of 
     the National Airspace System. The National Academy of 
     Sciences shall consult with the Exclusive Bargaining 
     Representative certified under section 7111 of title 5, 
     United States Code, and the Administration (including the 
     Civil Aeronautical Medical Institute) and examine data 
     entailing human factors, traffic activity, and the technology 
     at each facility.
       (2) Contents.--The study shall include--
       (A) recommendations for objective staffing standards that 
     maintain the safety of the National Airspace System; and
       (B) the approximate length of time for developing such 
     standards.
       (3) Report.--Not later than 24 months after executing a 
     contract under subsection (a), the National Academy of 
     Sciences shall transmit a report containing its findings and 
     recommendations to the Congress.
       (c) Safety Staffing Model.--Within 18 months after the date 
     of enactment of this Act, the Administrator of the Federal 
     Aviation Administration shall develop a staffing model for 
     aviation safety inspectors. In developing the model, the 
     Administrator shall consult with representatives of the 
     aviation safety inspectors and other interested parties.

     SEC. 709. COMMERCIAL AIR TOUR OPERATORS IN NATIONAL PARKS.

       (a) Secretary of the Interior and Overflights of National 
     Parks.--
       (1) Section 40128 is amended--
       (A) by striking paragraph (8) of subsection (f);
       (B) by striking ``Director'' each place it appears and 
     inserting ``Secretary of the Interior'';
       (C) by striking ``National Park Service'' in subsection 
     (a)(2)(B)(vi) and inserting ``Department of the Interior''; 
     and
       (D) by striking ``National Park Service'' in subsection 
     (b)(4)(C) and inserting ``Department of the Interior''.
       (2) The National Parks Air Tour Management Act of 2000 (49 
     U.S.C. 40128 note) is amended--
       (A) by striking ``Director'' in section 804(b) and 
     inserting ``Secretary of the Interior'';
       (B) in section 805--
       (i) by striking ``Director of the National Park Service'' 
     in subsection (a) and inserting ``Secretary of the 
     Interior'';
       (ii) by striking ``Director'' each place it appears and 
     inserting ``Secretary of the Interior'';
       (iii) by striking ``National Park Service'' each place it 
     appears in subsection (b) and inserting ``Department of the 
     Interior'';
       (iv) by striking ``National Park Service'' in subsection 
     (d)(2) and inserting ``Department of the Interior''; and
       (C) in section 807--
       (i) by striking ``National Park Service'' in subsection 
     (a)(1) and inserting ``Department of the Interior''; and
       (ii) by striking ``Director of the National Park Service'' 
     in subsection (b) and inserting ``Secretary of the 
     Interior''.

[[Page 7141]]

       (b) Allowing Overflights in Case of Agreement.--Paragraph 
     (1) of subsection (a) of section 40128 is amended--
       (1) by striking ``and'' in subparagraph (B);
       (2) by striking ``lands.'' in subparagraph (C) and 
     inserting ``lands; and''; and
       (3) by adding at the end the following:
       ``(D) in accordance with a voluntary agreement between the 
     commercial air tour operator and appropriate representatives 
     of the national park or tribal lands, as the case may be.''.
       (c) Additional Exemptions to Air Tour Management Plans.--
     Subsection (a) of section 40128 is further amended by adding 
     at the end the following:
       ``(5) Waiver for national parks with 100 or fewer 
     commercial air tour operations per year.--
       ``(A) In general.--Subject to subparagraph (B), and without 
     further administrative or environmental process, the 
     Secretary may waive the requirements of this section with 
     respect to a national park over which 100 or fewer commercial 
     air tour operations are conducted in a year.
       ``(B) Exception to waiver if necessary to protect park 
     resources.--
       ``(i) In general.--The Secretary may not waive the 
     requirements of this section if the Secretary determines that 
     an air tour management plan is necessary to protect park 
     resources and values.
       ``(ii) Notice and publication.--The Secretary shall inform 
     the Administrator in writing of the determinations under 
     clause (i), and the Secretary and the Administrator shall 
     publish in the Federal Register a list of the national parks 
     that fall under this subparagraph.
       ``(6) Waiver with respect to voluntary agreements.--
       ``(A) In general.--The Secretary may waive the requirements 
     of this section if a commercial air tour operator enters into 
     a voluntary agreement with a national park to manage 
     commercial air tour operations over the national park.
       ``(B) Purpose of voluntary agreements.--A voluntary 
     agreement described in subparagraph (A) shall seek to protect 
     park resources and visitor experiences without compromising 
     aviation safety, and may--
       ``(i) include provisions described in subparagraph (B) 
     through (E) of subsection (b)(3);
       ``(ii) include provisions to ensure the stability of, and 
     compliance with, the provisions of the voluntary agreement; 
     and
       ``(iii) set forth a fee schedule for operating over the 
     national park.
       ``(C) Consultation.--Before entering into a voluntary 
     agreement described in subparagraph (A), a national park 
     shall consult with any Indian tribe over whose tribal lands a 
     commercial air tour operator may conduct commercial air tour 
     operations pursuant to the voluntary agreement.
       ``(D) Review and approval by the secretary and the 
     administrator.--
       ``(i) Review.--Before executing a voluntary agreement 
     described in subparagraph (A), a national park shall submit 
     the voluntary agreement to the Secretary and the 
     Administrator for review and approval.
       ``(ii) Approval.--Not later than 60 days after receiving 
     the agreement from the national park, the Secretary and the 
     Administrator shall inform the national park of the 
     determination of the Secretary and the Administrator 
     regarding the approval of the agreement.
       ``(E) Rescission of voluntary agreement.--
       ``(i) By the secretary.--The Secretary may rescind a 
     voluntary agreement described in subparagraph (A) if the 
     Secretary determines that the agreement does not adequately 
     protect park resources or visitor experiences.
       ``(ii) By the administrator.--The Administrator may rescind 
     a voluntary agreement described in subparagraph (A) if the 
     Administrator determines that the agreement adversely affects 
     aviation safety or the management of the national airspace 
     system.
       ``(iii) Effect of rescission.--If the Secretary or the 
     Administrator rescinds a voluntary agreement described in 
     subparagraph (A), the commercial air tour operator that was a 
     party to the agreement shall operate under the requirements 
     for interim operating authority of subsection (c) until an 
     air tour management plan for the national park becomes 
     effective.''.
       (d) Modification of Interim Operating Authority.--
     Subsection (c)(2)(I) of section 40128 is amended to read as 
     follows:
       ``(I) may allow for modifications of the interim operating 
     authority without further environmental process, if--
       ``(i) adequate information on the existing and proposed 
     operations of the commercial air tour operator is provided to 
     the Administrator and the Secretary by the operator seeking 
     operating authority;
       ``(ii) the Administrator determines that the modifications 
     would not adversely affect aviation safety or the management 
     of the national airspace system; and
       ``(iii) the Secretary agrees that the modifications would 
     not adversely affect park resources and visitor 
     experiences.''.
       (e) Reporting Requirements for Commercial Air Tour 
     Operators.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, and annually thereafter, each 
     commercial air tour conducting commercial air tour operations 
     over a national park shall report to the Administrator of the 
     Federal Aviation Administration and the Secretary of the 
     Interior on--
       (A) the number of commercial air tour operations conducted 
     by such operator over the national park each day;
       (B) any relevant characteristics of commercial air tour 
     operations, including the routes, altitudes, duration, and 
     time of day of flights; and
       (C) such other information as the Administrator and the 
     Secretary may determine necessary to administer the 
     provisions of the National Parks Air Tour Management Act of 
     2000 (49 U.S.C. 40128 note).
       (2) Format.--The report required by paragraph (1) shall be 
     submitted in such form as the Administrator and the Secretary 
     determine to be appropriate.
       (3) Effect of failure to report.--The Administrator shall 
     rescind the operating authority of a commercial air tour 
     operator that fails to file a report not later than 180 days 
     after the date for the submittal of the report described in 
     paragraph (1).
       (4) Audit of reports.--Not later than 2 years after the 
     date of the enactment of this Act, and at such times 
     thereafter as the Inspector General of the Department of 
     Transportation determines necessary, the Inspector General 
     shall audit the reports required by paragraph (1).
       (f) Collection of Fees From Air Tour Operations.--
       (1) In general.--The Secretary of the Interior may assess a 
     fee in an amount determined by the Secretary under paragraph 
     (2) on a commercial air tour operator conducting commercial 
     air tour operations over a national park.
       (2) Amount of fee.--In determining the amount of the fee 
     assessed under paragraph (1), the Secretary shall consider 
     the cost of developing air tour management plans for each 
     national park.
       (3) Effect of failure to pay fee.--The Administrator of the 
     Federal Aviation Administration shall revoke the operating 
     authority of a commercial air tour operator conducting 
     commercial air tour operations over any national park, 
     including the Grand Canyon National Park, that has not paid 
     the fee assessed by the Secretary under paragraph (1) by the 
     date that is 180 days after the date on which the Secretary 
     determines the fee shall be paid.
       (g) Authorization of Appropriations for Air Tour Management 
     Plans.--
       (1) In general.--There are authorized to be appropriated 
     $10,000,000 to the Secretary of the Interior for the 
     development of air tour management plans under section 
     40128(b) of title 49, United States Code.
       (2) Use of funds.--The funds authorized to be appropriated 
     by paragraph (1) shall be used to develop air tour management 
     plans for the national parks the Secretary determines would 
     most benefit from such a plan.
       (h) Guidance to District Offices on Commercial Air Tour 
     Operators.--The Administrator of the Federal Aviation 
     Administration shall provide to the Administration's district 
     offices clear guidance on the ability of commercial air tour 
     operators to obtain--
       (1) increased safety certifications;
       (2) exemptions from regulations requiring safety 
     certifications; and
       (3) other information regarding compliance with the 
     requirements of this Act and other Federal and State laws and 
     regulations.
       (i) Operating Authority of Commercial Air Tour Operators.--
       (1) Transfer of operating authority.--
       (A) In general.--Subject to subparagraph (B), a commercial 
     air tour operator that obtains operating authority from the 
     Administrator under section 40128 of title 49, United States 
     Code, to conduct commercial air tour operations may transfer 
     such authority to another commercial air tour operator at any 
     time.
       (B) Notice.--Not later than 30 days before the date on 
     which a commercial air tour operator transfers operating 
     authority under subparagraph (A), the operator shall notify 
     the Administrator and the Secretary of the intent of the 
     operator to transfer such authority.
       (C) Regulations.--Not later than 180 days after the date of 
     the enactment of this Act, the Administrator shall prescribe 
     regulations to allow transfers of operating authority 
     described in subparagraph (A).
       (2) Time for determination regarding operating authority.--
     Notwithstanding any other provision of law, the Administrator 
     shall determine whether to grant a commercial air tour 
     operator operating authority under section 40128 of title 49, 
     United States Code, not later than 180 days after the earlier 
     of the date on which--
       (A) the operator submits an application; or
       (B) an air tour management plan is completed for the 
     national park over which the operator seeks to conduct 
     commercial air tour operations.
       (3) Increase in interim operating authority.--The 
     Administrator and the Secretary may increase the interim 
     operating authority while an air tour management plan is 
     being developed for a park if--

[[Page 7142]]

       (A) the Secretary determines that such an increase does not 
     adversely impact park resources or visitor experiences; and
       (B) the Administrator determines that granting interim 
     operating authority does not adversely affect aviation safety 
     or the management of the national airspace system.
       (4) Enforcement of operating authority.--The Administrator 
     is authorized and directed to enforce the requirements of 
     this Act and any agency rules or regulations related to 
     operating authority.

     SEC. 710. PHASEOUT OF STAGE 1 AND 2 AIRCRAFT.

       (a) In General.--Subchapter II of chapter 475 is amended by 
     adding at the end the following:

     ``Sec. 47534. Prohibition on operating certain aircraft 
       weighing 75,000 pounds or less not complying with Stage 3 
       noise levels

       ``(a) Prohibition.--Except as provided in subsection (b), 
     (c), or (d), a person may not operate a civil subsonic 
     turbojet with a maximum weight of 75,000 pounds or less to or 
     from an airport in the United States unless the Secretary of 
     Transportation finds that the aircraft complies with stage 3 
     noise levels.
       ``(b) Exception.--Subsection (a) shall not apply to 
     aircraft operated only outside the 48 contiguous States.
       ``(c) Opt-Out.--Subsection (a) shall not apply at an 
     airport where the airport operator has notified the Secretary 
     that it wants to continue to permit the operation of civil 
     subsonic turbojets with a maximum weight of 75,000 pounds or 
     less that do not comply with stage 3 noise levels. The 
     Secretary shall post the notices received under this 
     subsection on its website or in another place easily 
     accessible to the public.
       ``(d) Limitation.--The Secretary shall permit a person to 
     operate Stage 1 and Stage 2 aircraft with a maximum weight of 
     75,000 pounds or less to or from an airport in the contiguous 
     48 States in order--
       ``(1) to sell, lease, or use the aircraft outside the 48 
     contiguous States;
       ``(2) to scrap the aircraft;
       ``(3) to obtain modifications to the aircraft to meet stage 
     3 noise levels;
       ``(4) to perform scheduled heavy maintenance or significant 
     modifications on the aircraft at a maintenance facility 
     located in the contiguous 48 states;
       ``(5) to deliver the aircraft to an operator leasing the 
     aircraft from the owner or return the aircraft to the lessor;
       ``(6) to prepare or park or store the aircraft in 
     anticipation of any of the activities described in paragraphs 
     (1) through (5); or
       ``(7) to divert the aircraft to an alternative airport in 
     the 48 contiguous States on account of weather, mechanical, 
     fuel air traffic control or other safety reasons while 
     conducting a flight in order to perform any of the activities 
     described in paragraphs (1) through (6).
       ``(e) Statutory Construction.--Nothing in the section may 
     be construed as interfering with, nullifying, or otherwise 
     affecting determinations made by the Federal Aviation 
     Administration, or to be made by the Administration, with 
     respect to applications under part 161 of title 14, Code of 
     Federal Regulations, that were pending on the date of 
     enactment of the Aircraft Noise Reduction Act of 2006.''.
       (b) Conforming Amendments.--
       (1) Section 47531 is amended by striking ``47529, or 
     47530'' and inserting ``47529, 47530, or 47534''.
       (2) Section 47532 is amended by striking ``47528-47531'' 
     and inserting ``47528 through 47531 or 47534''.
       (3) The chapter analysis for chapter 475 is amended by 
     inserting after the item relating to section 47533 the 
     following:

``47534. Prohibition on operating certain aircraft weighing 75,000 
              pounds or less not complying with stage 3 noise levels''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 5 years after the date of enactment of this 
     Act.

     SEC. 711. WEIGHT RESTRICTIONS AT TETERBORO AIRPORT.

       On and after the date of the enactment of this Act, the 
     Administrator of the Federal Aviation Administration is 
     prohibited from taking actions designed to challenge or 
     influence weight restrictions or prior permission rules at 
     Teterboro Airport in Teterboro, New Jersey.

     SEC. 712. PILOT PROGRAM FOR REDEVELOPMENT OF AIRPORT 
                   PROPERTIES.

       (a) In General.--Within 1 year after the date of enactment 
     of this Act, the Administrator of the Federal Aviation 
     Administration shall establish a pilot program at up to 4 
     public-use airports for airport sponsors that have submitted 
     a noise compatibility program to the Federal Aviation 
     Administration, from funds apportioned under section 47504 or 
     section 40117 of title 49, United States Code, in partnership 
     with affected neighboring local jurisdictions, to support 
     joint planning, engineering design, and environmental 
     permitting for the assembly and redevelopment of property 
     purchased with noise mitigation funds or passenger facility 
     charge funds, to encourage airport-compatible land uses and 
     generate economic benefits to the local airport authority and 
     adjacent community.
       (b) Noise Compatability Measures.--Section 47504(a)(2) is 
     amended--
       (1) by striking ``and'' after the semicolon in subparagraph 
     (D);
       (2) by striking ``operations.'' in subparagraph (E) and 
     inserting ``operations;''; and
       (3) by adding at the end the following:
       ``(F) joint comprehensive land use planning including 
     master plans, traffic studies, environmental evaluation and 
     economic and feasibility studies, with neighboring local 
     jurisdictions undertaking community redevelopment in the area 
     where the land or other property interests acquired by the 
     airport operator pursuant to this subsection is located, to 
     encourage and enhance redevelopment opportunities that 
     reflect zoning and uses that will prevent the introduction of 
     additional incompatible uses and enhance redevelopment 
     potential; and
       ``(G) utility upgrades and other site preparation 
     efforts.''.
       (c) Grant Requirements.--The Administrator may not make a 
     grant under subsection (a) unless the grant is made--
       (1) to enable the airport operator and local jurisdictions 
     undertaking the community redevelopment effort to expedite 
     redevelopment efforts;
       (2) subject to a requirement that the local jurisdiction 
     governing the property interests in question has adopted 
     zoning regulations that permit airport compatible 
     redevelopment; and
       (3) subject to a requirement that, in determining the part 
     of the proceeds from disposing of the land that is subject to 
     repayment or reinvestment under section 47107(c)(2)(A) of 
     title 49, United States Code, the total amount of the grant 
     issued under this section shall be added to the amount of any 
     grants issued for acquisition of land.
       (d) Demonstration Grants.--
       (1) In general.--The Administrator shall provide grants 
     under subsection (a) for demonstration projects distributed 
     geographically and targeted to airports that demonstrate--
       (A) a readiness to implement cooperative land use 
     management and redevelopment plans with the adjacent 
     community; and
       (B) the probability of clear economic benefit to the local 
     community and financial return to the airport through the 
     implementation of the redevelopment plan.
       (2) Federal share.--
       (A) Notwithstanding any other provision of law, the Federal 
     share of the allowable costs of a project carried out under 
     the pilot program shall be 80 percent.
       (B) In determining the allowable costs, the Administrator 
     shall deduct from the total costs of the activities described 
     in subsection (a) that portion of the costs which is equal to 
     that portion of the total property to be redeveloped under 
     this section that is not owned or to be acquired by the 
     airport operator pursuant to the noise compatibility program 
     or that is not owned by the affected neighboring local 
     jurisdictions or other public entities.
       (3) Maximum amount.--Not more than $5,000,000 in funds made 
     available under section 47117(e) of title 49, United States 
     Code, may be expended under the pilot program at any single 
     public-use airport.
       (4) Exception.--Amounts paid to the Administrator under 
     subsection (c)(3)--
       (A) shall be in addition to amounts authorized under 
     section 48203 of title 49, United States Code;
       (B) shall not be subject to any limitation on grant 
     obligations for any fiscal year; and
       (C) shall remain available until expended.
       (e) Use of Passenger Revenue.--An airport sponsor that owns 
     or operates an airport participating in the pilot program may 
     use passenger facility revenue collected under section 40117 
     of title 49, United States Code, to pay any project cost 
     described in subsection (a) that is not financed by a grant 
     under the program.
       (f) Sunset.--This section, other than the amendments made 
     by subsections (b), shall not be in effect after September 
     30, 2011.
       (g) Report to Congress.--The Administrator shall report to 
     Congress within 18 months after making the first grant under 
     this section on the effectiveness of this program on 
     returning Part 150 lands to productive use.

     SEC. 713. AIR CARRIAGE OF INTERNATIONAL MAIL.

       (a) Contracting Authority.--Section 5402 of title 39, 
     United States Code, is amended by striking subsections (b) 
     and (c) and inserting the following:
       ``(b) International Mail.--
       ``(1) In general.--
       ``(A) Except as otherwise provided in this subsection, the 
     Postal Service may contract for the transportation of mail by 
     aircraft between any of the points in foreign air 
     transportation only with certificated air carriers. A 
     contract may be awarded to a certificated air carrier to 
     transport mail by air between any of the points in foreign 
     air transportation that the Secretary of Transportation has 
     authorized the carrier to serve either directly or through a 
     code-share relationship with one or more foreign air 
     carriers.
       ``(B) If the Postal Service has sought offers or proposals 
     from certificated air carriers to transport mail in foreign 
     air transportation between points, or pairs of points within 
     a geographic region or regions, and has not received offers 
     or proposals that meet Postal

[[Page 7143]]

     Service requirements at a fair and reasonable price from at 
     least 2 such carriers, the Postal Service may seek offers or 
     proposals from foreign air carriers. Where service in foreign 
     air transportation meeting the Postal Service's requirements 
     is unavailable at a fair and reasonable price from at least 2 
     certificated air carriers, either directly or through a code-
     share relationship with one or more foreign air carriers, the 
     Postal Service may contract with foreign air carriers to 
     provide the service sought if, when the Postal Service seeks 
     offers or proposals from foreign air carriers, it also seeks 
     an offer or proposal to provide that service from any 
     certificated air carrier providing service between those 
     points, or pairs of points within a geographic region or 
     regions, on the same terms and conditions that are being 
     sought from foreign air carriers.
       ``(C) For purposes of this subsection, the Postal Service 
     shall use a methodology for determining fair and reasonable 
     prices for the Postal Service designated region or regions 
     developed in consultation with, and with the concurrence of, 
     certificated air carriers representing at least 51 percent of 
     available ton miles in the markets of interest.
       ``(D) For purposes of this subsection, ceiling prices 
     determined pursuant to the methodology used under 
     subparagraph (C) shall be presumed to be fair and reasonable 
     if they do not exceed the ceiling prices derived from--
       ``(i) a weighted average based on market rate data 
     furnished by the International Air Transport Association or a 
     subsidiary unit thereof; or
       ``(ii) if such data are not available from those sources, 
     such other neutral, regularly updated set of weighted average 
     market rates as the Postal Service, with the concurrence of 
     certificated air carriers representing at least 51 percent of 
     available ton miles in the markets of interest, may 
     designate.
       ``(E) If, for purposes of subparagraph (D)(ii), concurrence 
     cannot be attained, then the most recently available market 
     rate data described in this subparagraph shall continue to 
     apply for the relevant market or markets.
       ``(2) Contract process.--The Postal Service shall contract 
     for foreign air transportation as set forth in paragraph (1) 
     through an open procurement process that will provide--
       ``(A) potential offerors with timely notice of business 
     opportunities in sufficient detail to allow them to make a 
     proposal;
       ``(B) requirements, proposed terms and conditions, and 
     evaluation criteria to potential offerors; and
       ``(C) an opportunity for unsuccessful offerors to receive 
     prompt feedback upon request.
       ``(3) Emergency or unanticipated conditions; inadequate 
     lift space.--The Postal Service may enter into contracts to 
     transport mail by air in foreign air transportation with a 
     certificated air carrier or a foreign air carrier without 
     complying with the requirements of paragraphs (b)(1) and (2) 
     if--
       ``(A) emergency or unanticipated conditions exist that make 
     it impractical for the Postal Service to comply with such 
     requirements; or
       ``(B) its demand for lift exceeds the space available to it 
     under existing contracts and--
       ``(i) there is insufficient time available to seek 
     additional lift using procedures that comply with those 
     requirements without compromising the Postal Service's 
     service commitments to its own customers; and
       ``(ii) the Postal Service first offers any certificated air 
     carrier holding a contract to carry mail between the relevant 
     points the opportunity to carry such excess volumes under the 
     terms of its existing contract.
       ``(c) Good Faith Effort Required.--The Postal Service and 
     potential offerors shall put a good-faith effort into 
     resolving disputes concerning the award of contracts made 
     under subsection (b).''.
       (b) Conforming Amendments to Title 49.--
       (1) Section 41901(a) is amended by striking ``39.'' and 
     inserting ``39, and in foreign air transportation under 
     section 5402(b) and (c) of title 39.''.
       (2) Section 41901(b)(1) is amended by striking ``in foreign 
     air transportation or''.
       (3) Section 41902 is amended--
       (A) by striking ``in foreign air transportation or'' in 
     subsection (a);
       (B) by striking subsection (b) and inserting the following:
       ``(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 paragraph (1) and every 
     change in each schedule; and
       ``(3) for each schedule, the places served by the carrier 
     and the time of arrival at, and departure from, each such 
     place.'';
       (C) by striking ``subsection (b)(3)'' each place it appears 
     in subsections (c)(1) and (d) and inserting ``subsection 
     (b)(2)''; and
       (D) by striking subsections (e) and (f).
       (4) Section 41903 is amended by striking ``in foreign air 
     transportation or'' each place it appears.
       (5) Section 41904 is amended--
       (A) by striking ``to or in foreign countries'' in the 
     section heading;
       (B) by striking ``to or in a foreign country'' and 
     inserting ``between two points outside the United States''; 
     and
       (C) by inserting after ``transportation.'' the following: 
     ``Nothing in this section shall affect the authority of the 
     Postal Service to make arrangements with noncitizens for the 
     carriage of mail in foreign air transportation under 
     subsections 5402(b) and (c) of title 39.''.
       (6) Section 41910 is amended by striking the first sentence 
     and inserting ``The United States Postal Service may weigh 
     mail transported by aircraft between places in Alaska and 
     make statistical and -administrative computations necessary 
     in the interest of mail service.''.
       (7) Chapter 419 is amended--
       (A) by striking sections 41905, 41907, 41908, and 41911; 
     and
       (B) redesignating sections 41906, 41909, 41910, and 49112 
     as sections 41905, 41906, 41907, and 41908, respectively.
       (8) The chapter analysis for chapter 419 is amended by 
     redesignating the items relating to sections 41906, 41909, 
     41910, and 49112 as relating to sections 41905, 41906, 41907, 
     and 41908, respectively.
       (9) Section 101(f) of title 39, United States Code, is 
     amended by striking ``mail and shall make a fair and 
     equitable distribution of mail business to carriers providing 
     similar modes of transportation services to the Postal 
     Service.'' and inserting ``mail.''.
       (9) Subsections (b) and (c) of section 3401 of title 39, 
     United States Code, are amended--
       (A) by striking ``at rates fixed and determined by the 
     Secretary of Transportation in accordance with section 41901 
     of title 49'' and inserting ``or, for carriage of mail in 
     foreign air transportation, other air carriers, air taxi 
     operators or foreign air carriers as permitted by section 
     5402 of this title'';
       (B) by striking ``at rates not to exceed those so fixed and 
     determined for scheduled United States air carriers'';
       (C) by striking ``scheduled'' each place it appears and 
     inserting ``certificated''; and
       (D) by striking the last sentence in each such subsection.
       (10) Section 5402(a) of title 39, United States Code, is 
     amended--
       (A) by inserting ``  `foreign air carrier'.  '' after ``  
     `interstate air transportation',  '' in paragraph (2);
       (B) by redesignating paragraphs (7) through (23) as 
     paragraphs (8) through (24) and inserting after paragraph (6) 
     the following:
       ``(7) the term `certificated air carrier' means an air 
     carrier that holds a ---certificate of public convenience and 
     necessity issued under section 41102(a) of ---title 49;''; 
     and
       (C) by redesignating paragraphs (9) through (24), as 
     redesignated, as paragraphs (10) through (25), respectively, 
     and inserting after paragraph (8) the following:
       ``(9) the term `code-share relationship' means a 
     relationship pursuant to which any certificated air carrier 
     or foreign air carrier's designation code is used to identify 
     a flight operated by another air carrier or foreign air 
     carrier;''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2008.

     SEC. 714. TRANSPORTING MUSICAL INSTRUMENTS.

       (a) In General.--Subchapter I of chapter 417 is amended by 
     adding at the end thereof the following:

     ``Sec. 41724. Musical instruments

       ``(a) In General.--
       ``(1) Small instruments as carry-on baggage.--An air 
     carrier providing air transportation shall permit a passenger 
     to carry a violin, guitar, or other musical instrument in the 
     aircraft cabin without charge if--
       ``(A) the instrument can be stowed safely in a suitable 
     baggage compartment in the aircraft cabin or under a 
     passenger seat; and
       ``(B) there is space for such stowage at the time the 
     passenger boards the aircraft.
       ``(2) Larger instruments as carry-on baggage.--An air 
     carrier providing air transportation shall permit a passenger 
     to carry a musical instrument that is too large to meet the 
     requirements of paragraph (1) in the aircraft cabin without 
     charge if--
       ``(A) the instrument is contained in a case or covered so 
     as to avoid injury to other passengers;
       ``(B) the weight of the instrument, including the case or 
     covering, does not exceed 165 pounds;
       ``(C) the instrument can be secured by a seat belt to avoid 
     shifting during flight;
       ``(D) the instrument does not restrict access to, or use 
     of, any required emergency exit, regular exit, or aisle;
       ``(E) the instrument does not obscure any passenger's view 
     of any illuminated exit, warning, or other informational 
     sign;
       ``(F) neither the instrument nor the case contains any 
     object not otherwise permitted to be carried in an aircraft 
     cabin because of a law or regulation of the United States; 
     and
       ``(G) the passenger wishing to carry the instrument in the 
     aircraft cabin has purchased an additional seat to 
     accommodate the instrument.
       ``(3) Large instruments as checked baggage.--An air carrier 
     shall transport as baggage, without charge, a musical 
     instrument that is the property of a passenger traveling

[[Page 7144]]

     in air transportation that may not be carried in the aircraft 
     cabin if--
       ``(A) the sum of the length, width, and height measured in 
     inches of the outside linear dimensions of the instrument 
     (including the case) does not exceed 120 inches; and
       ``(B) the weight of the instrument does not exceed 100 
     pounds.
       ``(b) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to implement 
     subsection (a).''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     417 is amended by inserting after the item relating to 
     section 41723 the following:

``41724. Musical instruments''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 30 days after the date of enactment of this 
     Act.

     SEC. 715. RECYCLING PLANS FOR AIRPORTS.

       (a) Airport Planning.--section 47102(5) is amended by 
     striking ``planning.'' and inserting ``planning and a plan 
     for recycling and minimizing the generation of airport solid 
     waste, consistent with applicable State and local recycling 
     laws, including the cost of a waste audit.''.
       (b) Master Plan.--Section 47106(a) is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking ``proposed.'' in paragraph (5) and 
     inserting ``proposed; and''; and
       (3) by adding at the end the following:
       ``(6) if the project is for an airport that has an airport 
     master plan, the master plan addresses--
       ``(A) the feasibility of solid waste recycling at the 
     airport;
       ``(B) minimizing the generation of solid waste at the 
     airport;
       ``(C) operation and maintenance requirements;
       ``(D) the review of waste management contracts;
       ``(E) the potential for cost savings or the generation of 
     revenue; and
       ``(F) training and education requirements.''.

     SEC. 716. CONSUMER INFORMATION PAMPHLET.

       Within 6 months after the date of enactment of this Act, 
     the Secretary of Transportation shall develop and make 
     available to the public in written and electronic form a 
     consumer and parental information pamphlet that includes--
       (1) a summary of the unaccompanied minor policies of major 
     air carriers serving United States airports;
       (2) a summary of such carriers' policies pertaining to 
     passenger air travel by children aged 17 and under;
       (3) recommendations to parents about who the appropriate 
     authorities are to notify if a minor is traveling 
     unsupervised and without parental consent on a major air 
     carrier; and
       (4) any additional recommendations the Secretary deems 
     appropriate or necessary.

     TITLE VIII--AMERICAN INFRASTRUCTURE INVESTMENT AND IMPROVEMENT

     SECTION 800. SHORT TITLE, ETC.

       (a) Short Title; Amendment of 1986 Code.--This title may be 
     cited as the ``American Infrastructure Investment and 
     Improvement Act of 2008''.
       (b) 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 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.

 Subtitle A--Airport and Airway Trust Fund Provisions and Related Taxes

     SEC. 801. EXTENSION OF TAXES FUNDING AIRPORT AND AIRWAY TRUST 
                   FUND.

       (a) Fuel Taxes.--Subparagraph (B) of section 4081(d)(2) is 
     amended by striking ``June 30, 2008'' and inserting 
     ``September 30, 2011''.
       (b) Ticket Taxes.--
       (1) Persons.--Clause (ii) of section 4261(j)(1)(A) is 
     amended by striking ``June 30, 2008'' and inserting 
     ``September 30, 2011''.
       (2) Property.--Clause (ii) of section 4271(d)(1)(A) is 
     amended by striking ``June 30, 2008'' and inserting 
     ``September 30, 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008.

     SEC. 802. EXTENSION OF AIRPORT AND AIRWAY TRUST FUND 
                   EXPENDITURE AUTHORITY.

       (a) In General.--Paragraph (1) of section 9502(d) is 
     amended--
       (1) by striking ``July 1, 2008'' in the matter preceding 
     subparagraph (A) and inserting ``October 1, 2011'', and
       (2) by striking the semicolon at the end of subparagraph 
     (A) and inserting ``or the Aviation Investment and 
     Modernization Act of 2008;''.
       (b) Conforming Amendment.--Paragraph (2) of section 9502(e) 
     is amended by striking ``July 1, 2008'' and inserting 
     ``October 1, 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008.

     SEC. 803. MODIFICATION OF EXCISE TAX ON KEROSENE USED IN 
                   AVIATION.

       (a) Rate of Tax on Aviation-Grade Kerosene.--
       (1) In general.--Subparagraph (A) of section 4081(a)(2) 
     (relating to rates of tax) is amended by striking ``and'' at 
     the end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) in the case of aviation-grade kerosene, 35.9 cents 
     per gallon.''.
       (2) Fuel removed directly into fuel tank of airplane used 
     in noncommercial aviation.--Subparagraph (C) of section 
     4081(a)(2) is amended to read as follows:
       ``(C) Taxes imposed on fuel used in commercial aviation.--
     In the case of aviation-grade kerosene which is removed from 
     any refinery or terminal directly into the fuel tank of an 
     aircraft for use in commercial aviation by a person 
     registered for such use under section 4101, the rate of tax 
     under subparagraph (A)(iv) shall be 4.3 cents per gallon.''.
       (3) Exemption for aviation-grade kerosene removed into an 
     aircraft.--Subsection (e) of section 4082 is amended--
       (A) by striking ``kerosene'' and inserting ``aviation-grade 
     kerosene'',
       (B) by striking ``section 4081(a)(2)(A)(iii)'' and 
     inserting ``section 4081(a)(2)(A)(iv)'', and
       (C) by striking ``Kerosene'' in the heading and inserting 
     ``Aviation-Grade Kerosene''.
       (4) Conforming amendments.--
       (A) Clause (iii) of section 4081(a)(2)(A) is amended by 
     inserting ``other than aviation-grade kerosene'' after 
     ``kerosene''.
       (B) The following provisions are each amended by striking 
     ``kerosene'' and inserting ``aviation-grade kerosene'':
       (i) Section 4081(a)(3)(A)(ii).
       (ii) Section 4081(a)(3)(A)(iv).
       (iii) Section 4081(a)(3)(D).
       (C) Section 4081(a)(3)(D) is amended--
       (i) by striking ``paragraph (2)(C)(i)'' in clause (i) and 
     inserting ``paragraph (2)(C)'', and
       (ii) by striking ``paragraph (2)(C)(ii)'' in clause (ii) 
     and inserting ``paragraph (2)(A)(iv)''.
       (D) Section 4081(a)(4) is amended--
       (i) in the heading by striking ``kerosene'' and inserting 
     ``aviation-grade kerosene'', and
       (ii) by striking ``paragraph (2)(C)(i)'' and inserting 
     ``paragraph (2)(C)''.
       (E) Section 4081(d)(2) is amended by striking 
     ``(a)(2)(C)(ii)'' and inserting ``(a)(2)(A)(iv)''.
       (b) Retail Tax on Aviation Fuel.--
       (1) Exemption for previously taxed fuel.--Paragraph (2) of 
     section 4041(c) is amended by inserting ``at the rate 
     specified in subsection (a)(2)(A)(iv) thereof'' after 
     ``section 4081''.
       (2) Rate of tax.--Paragraph (3) of section 4041(c) is 
     amended to read as follows:
       ``(3) Rate of tax.--The rate of tax imposed by this 
     subsection shall be the rate of tax in effect under section 
     4081(a)(2)(A)(iv) (4.3 cents per gallon with respect to any 
     sale or use for commercial aviation).''.
       (c) Refunds Relating to Aviation-Grade Kerosene.--
       (1) Kerosene used in commercial aviation.--Clause (ii) of 
     section 6427(l)(4)(A) is amended by striking ``specified in 
     section 4041(c) or 4081(a)(2)(A)(iii), as the case may be,'' 
     and inserting ``so imposed''.
       (2) Kerosene used in aviation.--Paragraph (4) of section 
     6427(l) is amended--
       (A) by striking subparagraph (B) and redesignating 
     subparagraph (C) as subparagraph (B), and
       (B) by amending subparagraph (B), as redesignated by 
     subparagraph (A), to read as follows:
       ``(B) Payments to ultimate, registered vendor.--With 
     respect to any kerosene used in aviation (other than kerosene 
     to which paragraph (6) applies), if the ultimate purchaser of 
     such kerosene waives (at such time and in such form and 
     manner as the Secretary shall prescribe) the right to payment 
     under paragraph (1) and assigns such right to the ultimate 
     vendor, then the Secretary shall pay (without interest) the 
     amount which would be paid under paragraph (1) to such 
     ultimate vendor, but only if such ultimate vendor--
       ``(i) is registered under section 4101, and
       ``(ii) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.
       (3) Aviation-grade kerosene not used in aviation.--
     Subsection (l) of section 6427 is amended by redesignating 
     paragraph (5) as paragraph (6) and by inserting after 
     paragraph (4) the following new paragraph:
       ``(5) Refunds for aviation-grade kerosene not used in 
     aviation.--If tax has been imposed under section 4081 at the 
     rate specified in section 4081(a)(2)(A)(iv) and the fuel is 
     used other than in an aircraft, the Secretary shall pay 
     (without interest) to the ultimate purchaser of such fuel an 
     amount equal to the amount of tax imposed on such fuel 
     reduced by the amount of tax that would be imposed under 
     section 4041 if no tax under section 4081 had been 
     imposed.''.
       (4) Conforming amendments.--
       (A) Section 4082(d)(2)(B) is amended by striking 
     ``6427(l)(5)(B)'' and inserting ``6427(l)(6)(B)''.
       (B) Section 6427(i)(4) is amended--
       (i) by striking ``(4)(C)'' the first two places it occurs 
     and inserting ``(4)(B)'', and
       (ii) by striking ``, (l)(4)(C)(ii), and'' and inserting 
     ``and''.
       (C) The heading of section 6427(l) is amended by striking 
     ``Diesel Fuel and Kerosene'' and inserting ``Diesel Fuel, 
     Kerosene, and Aviation Fuel''.

[[Page 7145]]

       (D) Section 6427(l)(1) is amended by striking ``paragraph 
     (4)(C)(i)'' and inserting ``paragraph (4)(B)''.
       (E) Section 6427(l)(4) is amended--
       (i) by striking ``kerosene used in aviation'' in the 
     heading and inserting ``aviation-grade kerosene used in 
     commercial aviation'', and
       (ii) in subparagraph (A)--

       (I) by striking ``kerosene'' and inserting ``aviation-grade 
     kerosene'',
       (II) by striking ``Kerosene used in commercial aviation'' 
     in the heading and inserting ``In general''.

       (d) Transfers to the Airport and Airway Trust Fund.--
       (1) In general.--Subparagraph (C) of section 9502(b)(1) is 
     amended to read as follows:
       ``(C) section 4081 with respect to aviation gasoline and 
     aviation-grade kerosene, and''.
       (2) Transfers on account of certain refunds.--
       (A) In general.--Subsection (d) of section 9502 is 
     amended--
       (i) in paragraph (2) by striking ``(other than subsection 
     (l)(4) thereof)'', and
       (ii) in paragraph (3) by striking ``(other than payments 
     made by reason of paragraph (4) of section 6427(l))''.
       (B) Conforming amendments.--
       (i) Section 9503(b)(4) is amended by striking ``or'' at the 
     end of subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting a comma, and by inserting 
     after subparagraph (D) the following:
       ``(E) section 4081 to the extent attributable to the rate 
     specified in clause (ii) or (iv) of section 4081(a)(2)(A), or
       ``(F) section 4041(c).''.
       (ii) Section 9503(c) is amended by striking the last 
     paragraph (relating to transfers from the Trust Fund for 
     certain aviation fuel taxes).
       (iii) Section 9502(a) is amended--

       (I) by striking ``appropriated, credited, or paid into'' 
     and inserting ``appropriated or credited to'', and
       (II) by striking ``, section 9503(c)(7),''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to fuels removed, entered, or sold after December 
     31, 2008.
       (f) Floor Stocks Tax.--
       (1) Imposition of tax.--In the case of aviation fuel which 
     is held on January 1, 2009, by any person, there is hereby 
     imposed a floor stocks tax on aviation fuel equal to--
       (A) the tax which would have been imposed before such date 
     on such fuel had the amendments made by this section been in 
     effect at all times before such date, reduced by
       (B) the sum of--
       (i) the tax imposed before such date on such fuel under 
     section 4081 of the Internal Revenue Code of 1986, as in 
     effect on such date, and
       (ii) in the case of kerosene held exclusively for such 
     person's own use, the amount which such person would (but for 
     this clause) reasonably expect (as of such date) to be paid 
     as a refund under section 6427(l) of such Code with respect 
     to such kerosene.
       (2) Liability for tax and method of payment.--
       (A) Liability for tax.--A person holding aviation fuel on 
     January 1, 2009, shall be liable for such tax.
       (B) Time and method of payment.--The tax imposed by 
     paragraph (1) shall be paid at such time and in such manner 
     as the Secretary of the Treasury shall prescribe.
       (3) Transfer of floor stock tax revenues to trust funds.--
     For purposes of determining the amount transferred to the 
     Airport and Airway Trust Fund, the tax imposed by this 
     subsection shall be treated as imposed by section 
     4081(a)(2)(A)(iv) of the Internal Revenue Code of 1986.
       (4) Definitions.--For purposes of this subsection--
       (A) Aviation fuel.--The term ``aviation fuel'' means 
     aviation-grade kerosene and aviation gasoline, as such terms 
     are used within the meaning of section 4081 of the Internal 
     Revenue Code of 1986.
       (B) Held by a person.--Aviation fuel shall be considered as 
     held by a person if title thereto has passed to such person 
     (whether or not delivery to the person has been made).
       (C) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or the Secretary's delegate.
       (5) Exception for exempt uses.--The tax imposed by 
     paragraph (1) shall not apply to any aviation fuel held by 
     any person exclusively for any use to the extent a credit or 
     refund of the tax is allowable under the Internal Revenue 
     Code of 1986 for such use.
       (6) Exception for certain amounts of fuel.--
       (A) In general.--No tax shall be imposed by paragraph (1) 
     on any aviation fuel held on January 1, 2009, by any person 
     if the aggregate amount of such aviation fuel held by such 
     person on such date does not exceed 2,000 gallons. The 
     preceding sentence shall apply only if such person submits to 
     the Secretary (at the time and in the manner required by the 
     Secretary) such information as the Secretary shall require 
     for purposes of this subparagraph.
       (B) Exempt fuel.--For purposes of subparagraph (A), there 
     shall not be taken into account any aviation fuel held by any 
     person which is exempt from the tax imposed by paragraph (1) 
     by reason of paragraph (6).
       (C) Controlled groups.--For purposes of this subsection--
       (i) Corporations.--

       (I) In general.--All persons treated as a controlled group 
     shall be treated as 1 person.
       (II) Controlled group.--The term ``controlled group'' has 
     the meaning given to such term by subsection (a) of section 
     1563 of the Internal Revenue Code of 1986; except that for 
     such purposes the phrase ``more than 50 percent'' shall be 
     substituted for the phrase ``at least 80 percent'' each place 
     it appears in such subsection.

       (ii) Nonincorporated persons under common control.--Under 
     regulations prescribed by the Secretary, principles similar 
     to the principles of subparagraph (A) shall apply to a group 
     of persons under common control if 1 or more of such persons 
     is not a corporation.
       (7) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the taxes 
     imposed by section 4081 of the Internal Revenue Code of 1986 
     on the aviation fuel involved shall, insofar as applicable 
     and not inconsistent with the provisions of this subsection, 
     apply with respect to the floor stock taxes imposed by 
     paragraph (1) to the same extent as if such taxes were 
     imposed by such section.

     SEC. 804. AIR TRAFFIC CONTROL SYSTEM MODERNIZATION ACCOUNT.

       (a) In General.--Section 9502 (relating to the Airport and 
     Airway Trust Fund) is amended by adding at the end the 
     following new subsection:
       ``(g) Establishment of Air Traffic Control System 
     Modernization Account.--
       ``(1) Creation of account.--There is established in the 
     Airport and Airway Trust Fund a separate account to be known 
     as the `Air Traffic Control System Modernization Account' 
     consisting of such amounts as may be transferred or credited 
     to the Air Traffic Control System Modernization Account as 
     provided in this subsection or section 9602(b).
       ``(2) Transfers to air traffic control system modernization 
     account.--On October 1, 2008, and annually thereafter, the 
     Secretary shall transfer to the Air Traffic Control System 
     Modernization Account from amounts appropriated to the 
     Airport and Airway Trust Fund under subsection (b) which are 
     attributable to taxes on aviation-grade kerosene an amount 
     equal to $400,000,000.
       ``(3) Expenditures from account.--Amounts in the Air 
     Traffic Control System Modernization Account shall be 
     available subject to appropriation for expenditures relating 
     to the modernization of the air traffic control system 
     (including facility and equipment account expenditures).''.
       (b) Conforming Amendment.--Section 9502(d)(1) is amended by 
     striking ``Amounts'' and inserting ``Except as provided in 
     subsection (g), amounts''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 805. TREATMENT OF FRACTIONAL AIRCRAFT OWNERSHIP 
                   PROGRAMS.

       (a) Fuel Surtax.--
       (1) In general.--Subchapter B of chapter 31 is amended by 
     adding at the end the following new section:

     ``SEC. 4043. SURTAX ON FUEL USED IN AIRCRAFT PART OF A 
                   FRACTIONAL OWNERSHIP PROGRAM.

       ``(a) In General.--There is hereby imposed a tax on any 
     liquid used during any calendar quarter by any person as a 
     fuel in an aircraft which is--
       ``(1) registered in the United States, and
       ``(2) part of a fractional ownership aircraft program.
       ``(b) Amount of Tax.--The rate of tax imposed by subsection 
     (a) is 14.1 cents per gallon.
       ``(c) Fractional Ownership Aircraft Program.--For purposes 
     of this section--
       ``(1) In general.--The term `fractional ownership aircraft 
     program' means a program under which--
       ``(A) a single fractional ownership program manager 
     provides fractional ownership program management services on 
     behalf of the fractional owners,
       ``(B) 2 or more airworthy aircraft are part of the program,
       ``(C) there are 1 or more fractional owners per program 
     aircraft, with at least 1 program aircraft having more than 1 
     owner,
       ``(D) each fractional owner possesses at least a minimum 
     fractional ownership interest in 1 or more program aircraft,
       ``(E) there exists a dry-lease exchange arrangement among 
     all of the fractional owners, and
       ``(F) there are multi-year program agreements covering the 
     fractional ownership, fractional ownership program management 
     services, and dry-lease aircraft exchange aspects of the 
     program.
       ``(2) Minimum fractional ownership interest.--The term 
     `minimum fractional ownership interest' means, with respect 
     to each type of aircraft--
       ``(A) a fractional ownership interest equal to or greater 
     than \1/16\ of at least 1 subsonic, fixed wing or powered 
     lift program aircraft, or
       ``(B) a fractional ownership interest equal to or greater 
     than \1/32\ of a least 1 rotorcraft program aircraft.
       ``(3) Dry-lease exchange arrangement.--A `dry-lease 
     aircraft exchange' means an

[[Page 7146]]

     agreement, documented by the written program agreements, 
     under which the program aircraft are available, on an as 
     needed basis without crew, to each fractional owner.
       ``(d) Termination.--This section shall not apply to liquids 
     used as a fuel in an aircraft after September 30, 2011.''.
       (2) Conforming amendment.--Section 4082(e) is amended by 
     inserting ``(other than an aircraft described in section 
     4043(a))'' after ``an aircraft''.
       (3) Transfer of revenues to airport and airway trust 
     fund.--Section 9502(b)(1) is amended by redesignating 
     subparagraphs (B) and (C) as subparagraphs (C) and (D), 
     respectively, and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) section 4043 (relating to surtax on fuel used in 
     aircraft part of a fractional ownership program),''.
       (4) Clerical amendment.--The table of sections for 
     subchapter B of chapter 31 is amended by adding at the end 
     the following new item:

``Sec. 4043. Surtax on fuel used in aircraft part of a fractional 
              ownership program.''.
       (b) Fractional Ownership Programs Treated as Non-Commercial 
     Aviation.--Subsection (b) of section 4083 is amended by 
     adding at the end the following new sentence: ``Such term 
     shall not include the use of any aircraft which is part of a 
     fractional ownership aircraft program (as defined by section 
     4043(c)).''.
       (c) Exemption From Tax on Transportation of Persons.--
     Section 4261, as amended by this Act, is amended by 
     redesignating subsection (j) as subsection (k) and by 
     inserting after subsection (i) the following new subsection:
       ``(j) Exemption for Aircraft in Fractional Ownership 
     Aircraft Programs.--No tax shall be imposed by this section 
     or section 4271 on any air transportation by an aircraft 
     which is part of a fractional ownership aircraft program (as 
     defined by section 4043(c)).''.
       (d) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsections (a) 
     shall apply to fuel used after December 31, 2008.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall apply to uses of aircraft after December 31, 2008.
       (3) Subsection (c).--The amendments made by subsection (c) 
     shall apply to taxable transportation provided after December 
     31, 2008.

     SEC. 806. TERMINATION OF EXEMPTION FOR SMALL AIRCRAFT ON 
                   NONESTABLISHED LINES.

       (a) In General.--Section 4281 is amended to read as 
     follows:

     ``SEC. 4281. SMALL AIRCRAFT OPERATED SOLELY FOR SIGHTSEEING.

       ``The taxes imposed by sections 4261 and 4271 shall not 
     apply to transportation by an aircraft having a maximum 
     certificated takeoff weight of 6,000 pounds or less at any 
     time during which such aircraft is being operated on a flight 
     the sole purpose of which is sightseeing. For purposes of the 
     preceding sentence, the term `maximum certificated takeoff 
     weight' means the maximum such weight contained in the type 
     certificate or airworthiness certificate.''.
       (b) Conforming Amendment.--The item relating to section 
     4281 in the table of sections for part III of subchapter C of 
     chapter 33 is amended by striking ``on nonestablished lines'' 
     and inserting ``operated solely for sightseeing''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable transportation provided after December 
     31, 2008.

     SEC. 807. TRANSPARENCY IN PASSENGER TAX DISCLOSURES.

       (a) In General.--Section 7275 (relating to penalty for 
     offenses relating to certain airline tickets and advertising) 
     is amended--
       (1) by redesignating subsection (c) as subsection (d),
       (2) by striking ``subsection (a) or (b)'' in subsection 
     (d), as so redesignated, and inserting ``subsection (a), (b), 
     or (c)'', and
       (3) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Non-Tax Charges.--
       ``(1) In general.--In the case of transportation by air for 
     which disclosure on the ticket or advertising for such 
     transportation of the amounts paid for passenger taxes is 
     required by subsection (a)(2) or (b)(1)(B), it shall be 
     unlawful for the disclosure of the amount of such taxes on 
     such ticket or advertising to include any amounts not 
     attributable to the taxes imposed by subsection (a), (b), or 
     (c) of section 4261.
       ``(2) Inclusion in transportation cost.--Nothing in this 
     subsection shall prohibit the inclusion of amounts not 
     attributable to the taxes imposed by subsection (a), (b), or 
     (c) of section 4261 in the disclosure of the amount paid for 
     transportation as required by subsection (a)(1) or (b)(1)(A), 
     or in a separate disclosure of amounts not attributable to 
     such taxes.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable transportation provided after December 
     31, 2008.

     SEC. 808. REQUIRED FUNDING OF NEW ACCRUALS UNDER AIR CARRIER 
                   PENSION PLANS.

       (a) In General.--Section 402(a) of the Pension Protection 
     Act of 2006, as amended by section 6615(a) of the U. S. Troop 
     Readiness, Veterans' Care, Katrina Recovery, and Iraq 
     Accountability Appropriations Act, 2007 (Public Law 110-28), 
     is amended--
       (1) in paragraph (2)--
       (A) by striking ``to its first taxable year beginning in 
     2008'',
       (B) by striking ``for such taxable year'' and inserting 
     ``for its first plan year beginning in 2008'', and
       (C) by striking ``and by using, in determining the funding 
     target for each of the 10 plan years during such period, an 
     interest rate of 8.25 percent (rather than the segment rates 
     calculated on the basis of the corporate bond yield curve)'', 
     and
       (2) by adding at the end the following new flush matter:

     ``If the plan sponsor of an eligible plan elects the 
     application of paragraph (2), the plan sponsor may also 
     elect, in determining the funding target for each of the 10 
     plan years during the period described in paragraph (2), to 
     use an interest rate of 8.25 percent (rather than the segment 
     rates calculated on the basis of the corporate bond yield 
     curve). Notwithstanding the preceding sentence, in the case 
     of any plan year of the eligible plan for which such 8.25 
     percent interest rate is used, the minimum required 
     contribution under section 303 of such Act and section 430 of 
     such Code shall in no event be less than the target normal 
     cost of the plan for such plan year (as determined under 
     section 303(b) of such Act and section 430(b) of such Code). 
     A plan sponsor may revoke the election to use the 8.25 
     percent interest rate and if the revocation is made, the 
     revocation shall apply to the plan year for which made and 
     all subsequent plan years and the plan sponsor may not elect 
     to use the 8.25 percent interest rate for any subsequent plan 
     year.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Pension Protection Act of 2006 to which such amendments 
     relate.

          Subtitle B--Increased Funding for Highway Trust Fund

     SEC. 811. REPLENISH EMERGENCY SPENDING FROM HIGHWAY TRUST 
                   FUND.

       (a) In General.--Section 9503(b) is amended--
       (1) by adding at the end the following new paragraph:
       ``(7) Emergency spending replenishment.--There is hereby 
     appropriated to the Highway Trust Fund $3,400,000,000.'', and
       (2) by striking ``Amounts Equivalent to Certain Taxes and 
     Penalties'' in the heading and inserting ``Certain Amounts''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 812. SUSPENSION OF TRANSFERS FROM HIGHWAY TRUST FUND FOR 
                   CERTAIN REPAYMENTS AND CREDIT.

       Section 9503(c)(2) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Temporary suspension.--This paragraph shall not apply 
     to 85 percent of the amounts estimated by the Secretary to be 
     attributable to the 6-month period beginning on the date of 
     the enactment of the American Infrastructure Investment and 
     Improvement Act of 2008.''.

     SEC. 813. TAXATION OF TAXABLE FUELS IN FOREIGN TRADE ZONES.

       (a) Tax Imposed on Removals and Entries in Foreign Trade 
     Zones.--
       (1) In general.--Subsection (a) of section 4083 (relating 
     to definitions) is amended by adding at the end the following 
     new paragraph:
       ``(4) United states.--The term `United States' includes any 
     foreign trade zone or bonded warehouse located in the United 
     States.''.
       (2) Conforming amendment.--Section 4081(a)(1)(A) (relating 
     to imposition of tax) is amended--
       (A) in clause (i), by inserting ``in the United States'' 
     after ``refinery''; and
       (B) in clause (ii), by inserting ``in the United States'' 
     after ``terminal''.
       (b) Treatment of Taxable Fuel in Foreign Trade Zones.--
     Paragraph (2) of section 81c(a) of title 19, United States 
     Code, is amended by inserting ``(other than the provisions 
     relating to taxable fuel (as defined under section 4083(a) of 
     the Internal Revenue Code of 1986))'' after ``thereunder''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply to removals and entries after December 31, 2008.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall take effect on January 1, 2009.

     SEC. 814. CLARIFICATION OF PENALTY FOR SALE OF FUEL FAILING 
                   TO MEET EPA REGULATIONS.

       (a) In General.--Subsection (a) of section 6720A (relating 
     to penalty with respect to certain adulterated fuels) is 
     amended by striking ``applicable EPA regulations (as defined 
     in section 45H(c)(3))'' and inserting ``the requirements for 
     diesel fuel under section 211 of the Clean Air Act, as 
     determined by the Secretary,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any transfer, sale, or holding out for sale or 
     resale occurring after the date of the enactment of this Act.

[[Page 7147]]



     SEC. 815. TREATMENT OF QUALIFIED ALCOHOL FUEL MIXTURES AND 
                   QUALIFIED BIODIESEL FUEL MIXTURES AS TAXABLE 
                   FUELS.

       (a) In General.--
       (1) Qualified alcohol fuel mixtures.--Paragraph (2) of 
     section 4083(a) (relating to gasoline) is amended--
       (A) by striking ``and'' at the end of subparagraph (A),
       (B) by redesignating subparagraph (B) as subparagraph (C), 
     and
       (C) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) includes any qualified mixture (as defined in section 
     40(b)(1)(B)) which is a mixture of alcohol and special fuel, 
     and''.
       (2) Qualified biodiesel fuel mixtures.--Subparagraph (A) of 
     section 4083(a)(3) (relating to diesel fuel) is amended by 
     striking ``and'' at the end of clause (ii), by redesignating 
     clause (iii) as clause (iv), and inserting after clause (ii) 
     the following new clause:
       ``(iii) any qualified biodiesel mixture (as defined in 
     section 40A(b)(1)(B)), and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to fuels removed, entered, or sold after December 
     31, 2008.

     SEC. 816. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.

       (a) In General.--Paragraph (4) of section 40(d) (relating 
     to volume of alcohol) is amended by striking ``5 percent'' 
     and inserting ``2 percent''.
       (b) Conforming Amendment for Excise Tax Credit.--Section 
     6426(b) (relating to alcohol fuel mixture credit) is amended 
     by redesignating paragraph (5) as paragraph (6) and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) Volume of alcohol.--For purposes of determining under 
     subsection (a) the number of gallons of alcohol with respect 
     to which a credit is allowable under subsection (a), the 
     volume of alcohol shall include the volume of any denaturant 
     (including gasoline) which is added under any formulas 
     approved by the Secretary to the extent that such denaturants 
     do not exceed 2 percent of the volume of such alcohol 
     (including denaturants).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after December 31, 2008.

     SEC. 817. BULK TRANSFER EXCEPTION NOT TO APPLY TO FINISHED 
                   GASOLINE.

       (a) In General.--Subparagraph (B) of section 4081(a)(1) 
     (relating to tax on removal, entry, or sale) is amended by 
     adding at the end the following new clause:
       ``(iii) Exception for finished gasoline.--Clause (i) shall 
     not apply to any finished gasoline.''.
       (b) Exception to Tax on Finished Gasoline for Prior Taxable 
     Removals.--Paragraph (1) of section 4081(a) is amended by 
     adding at the end the following new subparagraph:
       ``(C) Exemption for previously taxed finished gasoline.--
     The tax imposed by this paragraph shall not apply to the 
     removal of gasoline described in subparagraph (B)(iii) from 
     any terminal if there was a prior taxable removal or entry of 
     such fuel under clause (i), (ii), or (iii) of subparagraph 
     (A). The preceding sentence shall not apply to the volume of 
     any product added to such gasoline at the terminal unless 
     there was a prior taxable removal or entry of such product 
     under clause (i), (ii), or (iii) of subparagraph (A).''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to fuel removed, entered, or sold after December 
     31, 2008.

     SEC. 818. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST 
                   FUND TAX.

       (a) Increase in Rate.--
       (1) In general.--Section 4611(c)(2)(B) (relating to rates) 
     is amended by striking ``5 cents'' and inserting ``10 
     cents''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply on and after the first day of the first calendar 
     quarter beginning more than 60 days after the date of the 
     enactment of this Act.
       (b) Extension.--
       (1) In general.--Section 4611(f) (relating to application 
     of Oil Spill Liability Trust Fund financing rate) is amended 
     by striking paragraphs (2) and (3) and inserting the 
     following new paragraph:
       ``(2) Termination.--The Oil Spill Liability Trust Fund 
     financing rate shall not apply after September 30, 2018.''.
       (2) Conforming amendment.--Section 4611(f)(1) is amended by 
     striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
     (2)''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.

     SEC. 819. APPLICATION OF RULES TREATING INVERTED CORPORATIONS 
                   AS DOMESTIC CORPORATIONS TO CERTAIN 
                   TRANSACTIONS OCCURRING AFTER MARCH 20, 2002.

       (a) In General.--Section 7874(b) (relating to inverted 
     corporations treated as domestic corporations) is amended to 
     read as follows:
       ``(b) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--Notwithstanding section 7701(a)(4), a 
     foreign corporation shall be treated for purposes of this 
     title as a domestic corporation if such corporation would be 
     a surrogate foreign corporation if subsection (a)(2) were 
     applied by substituting `80 percent' for `60 percent'.
       ``(2) Special rule for certain transactions occurring after 
     march 20, 2002.--
       ``(A) In general.--If--
       ``(i) paragraph (1) does not apply to a foreign 
     corporation, but
       ``(ii) paragraph (1) would apply to such corporation if, in 
     addition to the substitution under paragraph (1), subsection 
     (a)(2) were applied by substituting `March 20, 2002' for 
     `March 4, 2003' each place it appears,
     then paragraph (1) shall apply to such corporation but only 
     with respect to taxable years of such corporation beginning 
     after the date of the enactment of the American 
     Infrastructure Investment and Improvement Act of 2008.
       ``(B) Special rules.--Subject to such rules as the 
     Secretary may prescribe, in the case of a corporation to 
     which paragraph (1) applies by reason of this paragraph--
       ``(i) the corporation shall be treated, as of the close of 
     its first taxable year ending after the date of the enactment 
     of the American Infrastructure Investment and Improvement Act 
     of 2008, as having transferred all of its assets, 
     liabilities, and earnings and profits to a domestic 
     corporation in a transaction with respect to which no tax is 
     imposed under this title,
       ``(ii) the bases of the assets transferred in the 
     transaction to the domestic corporation shall be the same as 
     the bases of the assets in the hands of the foreign 
     corporation, subject to any adjustments under this title for 
     built-in losses,
       ``(iii) the basis of the stock of any shareholder in the 
     domestic corporation shall be the same as the basis of the 
     stock of the shareholder in the foreign corporation for which 
     it is treated as exchanged, and
       ``(iv) the transfer of any earnings and profits by reason 
     of clause (i) shall be disregarded in determining any deemed 
     dividend or foreign tax creditable to the domestic 
     corporation with respect to such transfer.
       ``(C) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this paragraph, including regulations to prevent the 
     avoidance of the purposes of this paragraph.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 820. DENIAL OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (2) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``Or Punitive Damages'' after 
     ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(h) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 821. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.

       (a) In General.--Section 11141 of the Safe, Accountable, 
     Flexible, Efficient Transportation Equity Act: A Legacy for 
     Users is amended to read as follows:

     ``SEC. 11141. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.

       ``(a) Establishment.--There is established a Motor Fuel Tax 
     Enforcement Advisory Commission (in this section referred to 
     as the `Commission').
       ``(b) Membership.--
       ``(1) Appointment.--The Commission shall be composed of 14 
     members, of which--

[[Page 7148]]

       ``(A) 1 shall be appointed by the Administrator of the 
     Federal Highway Administration as a representative of the 
     Federal Highway Administration,
       ``(B) 1 shall be appointed by the Inspector General for the 
     Department of Transportation as a representative the Office 
     of Inspector General for the Department of Transportation,
       ``(C) 1 shall be appointed by the Secretary of 
     Transportation as a representative of the Department of 
     Transportation,
       ``(D) 1 shall be appointed by the Secretary of Homeland 
     Security to be a representative of the Department of Homeland 
     Security,
       ``(E) 1 shall be appointed by the Secretary of Defense to 
     be a representative of the Department of Defense,
       ``(F) 1 shall be appointed by the Attorney General to be a 
     representative of the Department of Justice,
       ``(G) 2 shall be appointed by the Chairman of the Committee 
     on Finance of the Senate,
       ``(H) 2 shall be appointed by the Ranking Member of the 
     Committee on Finance of the Senate,
       ``(I) 2 shall be appointed by Chairman of the Committee on 
     Ways and Means of the House of Representatives, and
       ``(J) 2 shall be appointed by Ranking Member of the 
     Committee on Ways and Means of the House of Representatives.
       ``(2) Qualification for certain members.--Of the members 
     appointed under subparagraphs (G), (H), (I) and (J)--
       ``(A) at least 1 shall be representative from the 
     Federation of State Tax Administrators,
       ``(B) at least 1shall be a representative from any State 
     department of transportation,
       ``(C) at least 1 shall be a representative from the retail 
     fuel industry, and
       ``(D) at least 1 shall be a representative from industries 
     relating to fuel distribution (such a refiners, distributors, 
     pipeline operators, and terminal operators).
       ``(3) Terms.--Members shall be appointed for the life of 
     the Commission.
       ``(4) Vacancies.--A vacancy in the Commission shall be 
     filled in the manner in which the original appointment was 
     made.
       ``(5) Travel expenses.--Members of the Commission shall 
     serve without pay but shall receive travel expenses, 
     including per diem in lieu of subsistence, in accordance with 
     sections 5702 and 5703 of title 5, United States Code.
       ``(6) Chairman.--The Chairman of the Commission shall be 
     elected by the members.
       ``(c) Duties.--
       ``(1) In general.--The Commission shall--
       ``(A) review motor fuel revenue collections, historical and 
     current;
       ``(B) review the progress of investigations;
       ``(C) develop and review legislative proposals with respect 
     to motor fuel taxes;
       ``(D) monitor the progress of administrative regulation 
     projects relating to motor fuel taxes;
       ``(E) evaluate and make recommendations to the President 
     and Congress regarding--
       ``(i) the effectiveness of existing Federal enforcement 
     programs regarding motor fuel taxes,
       ``(ii) enforcement personnel allocation, and
       ``(iii) proposals for regulatory projects, legislation, and 
     funding.
       ``(2) Report.--Not later than September 30, 2009, the 
     Commission shall submit to Congress a final report that 
     contains a detailed statement on the findings and conclusions 
     of the Commission, together with recommendations for such 
     legislation and administrative action as the Commission 
     considers appropriate or necessary.
       ``(d) Powers.--
       ``(1) Hearings.--The Commission may hold such hearings for 
     the purpose of carrying out this Act, sit and act at such 
     times and places, take such testimony, and receive such 
     evidence as the Commission considers advisable to carry out 
     this Act. The Commission may administer oaths and 
     affirmations to witnesses appearing before the Commission.
       ``(2) Obtaining data.--The Commission may secure directly 
     from any department or agency of the United States, 
     information (other than information required by any law to be 
     kept confidential by such department or agency) necessary for 
     the Commission to carry out its duties under this section. 
     Upon request of the Commission, the head of that department 
     or agency shall furnish such nonconfidential information to 
     the Commission. The Commission shall also gather evidence 
     through such means as it may determine appropriate, including 
     through holding hearings and soliciting comments by means of 
     Federal Register notices.
       ``(3) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       ``(4) Gifts.--The Commission may accept, hold, administer, 
     and utilize gifts, donations, and requests of property, both 
     real and personal, for the purposes of aiding or facilitating 
     the work of the Commission. Gifts and bequests of money, and 
     the proceeds from the sale of any other property received as 
     gifts or bequests, shall be deposited in the Treasury in a 
     separate fund and shall be disbursed upon order of the 
     Commission. For purposes of Federal income, estate, and gift 
     taxation, property accepted under this section shall be 
     considered as a gift or bequest to or for the use of the 
     United States.
       ``(e) Support Services.--
       ``(1) Administrative support services.--Upon the request of 
     the Commission, the Secretary of Transportation shall provide 
     to the Commission administrative support services necessary 
     to enable the Commission to carry out its duties under this 
     Act.
       ``(2) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(3) Voluntary services.--
       ``(A) In general.--Notwithstanding the provisions of 
     section 1342 of title 31, United States Code, the Commission 
     is authorized to accept and utilize the services of 
     volunteers serving without compensation. The Commission may 
     reimburse such volunteers for local travel and office 
     supplies, and for other travel expenses, including per diem 
     in lieu of subsistence as authorized by section 5703, United 
     States Code.
       ``(B) Treatment of volunteers.--A person providing 
     volunteer services to the Commission shall be considered an 
     employee of the Federal Government in the performance of 
     those services for the purposes of the following provisions 
     of law:
       ``(i) chapter 81 of title 5, United States Code, relating 
     to compensation for work-related injuries;
       ``(ii) chapter 171 of title 28, United States Code, 
     relating to tort claims; and
       ``(iii) chapter 11 of title 18, United States Code, 
     relating to conflicts of interest.
       ``(4) Consultation.--Upon request of the Commission, 
     representatives of the Department of the Treasury and the 
     Internal Revenue Service shall be available for consultation 
     to assist the Commission in carrying out its duties under 
     this section.
       ``(5) Cooperation.--The staff of the Department of 
     Transportation, the Department of Homeland Security, the 
     Department of Justice, and the Department of Defense shall 
     cooperate with the Commission as necessary.
       ``(f) Inapplicability of Federal Advisory Committee Act.--
     The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Commission.
       ``(g) Termination.--
       ``(1) In general.--The Commission shall terminate on the 
     date that is 90 days after the date on which the Commission 
     submits the report required under subsection (c)(2).
       ``(2) Records.--Not later than the date on which the 
     Commission terminates, the Commission shall transmit all 
     records of the Commission to the National Archives.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 822. HIGHWAY TRUST FUND CONFORMING EXPENDITURE 
                   AMENDMENT.

       (a) In General.--Subsections (c)(1) and (e)(3) of section 
     9503 are each amended by inserting ``, as amended by An Act 
     to authorize additional funds for emergency repairs and 
     reconstruction of the Interstate I-35 bridge located in 
     Minneapolis, Minnesota, that collapsed on August 1, 2007, to 
     waive the $100,000,000 limitation on emergency relief funds 
     for those emergency repairs and reconstruction, and for other 
     purposes,'' after ``Users''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of An Act 
     to authorize additional funds for emergency repairs and 
     reconstruction of the Interstate I-35 bridge located in 
     Minneapolis, Minnesota, that collapsed on August 1, 2007, to 
     waive the $100,000,000 limitation on emergency relief funds 
     for those emergency repairs and reconstruction, and for other 
     purposes.

    Subtitle C--Additional Infrastructure Modifications and Revenue 
                               Provisions

     SEC. 831. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

       (a) In General.--Part I of subchapter Y of chapter 1 is 
     amended by redesignating section 1400L as 1400K and by adding 
     at the end the following new section:

     ``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and

[[Page 7149]]

       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $2,000,000,000.
       ``(C) Annual limit.--
       ``(i) In general.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--

       ``(I) the applicable limit, plus
       ``(II) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.

       ``(ii) Applicable limit.--For purposes of clause (i), the 
     applicable limit for any calendar year in the credit period 
     is $169,000,000 and in the case of any calendar year after 
     2020, zero.
       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

       ``(I) such excess, or
       ``(II) the qualifying project expenditure amount for such 
     calendar year, reduced by

       ``(ii) the aggregate amount allocated under this 
     subparagraph for all preceding calendar years.
       ``(4) Allocation to payroll periods.--Each New York Liberty 
     Zone governmental unit which has been allocated a portion of 
     the qualifying project expenditure amount under paragraph (3) 
     for a calendar year may allocate such portion to payroll 
     periods beginning in such calendar year as such governmental 
     unit determines appropriate.
       ``(c) Carryover of Unused Allocations.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the amount allocated under subsection (b)(3) to a New York 
     Liberty Zone governmental unit for any calendar year exceeds 
     the aggregate taxes imposed by section 3402 for which such 
     governmental unit is liable under section 3403 for periods 
     beginning in such year, such excess shall be carried to the 
     succeeding calendar year and added to the allocation of such 
     governmental unit for such succeeding calendar year. No 
     amount may be carried under the preceding sentence to a 
     calendar year after 2025.
       ``(2) Reallocation.--If a New York Liberty Zone 
     governmental unit does not use an amount allocated to it 
     under subsection (b)(3) within the time prescribed by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, then such amount shall after such time 
     be treated for purposes of subsection (b)(3) in the same 
     manner as if it had never been allocated.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Credit period.--The term `credit period' means the 
     12-year period beginning on January 1, 2009.
       ``(2) New york liberty zone governmental unit.--The term 
     `New York Liberty Zone governmental unit' means--
       ``(A) the State of New York,
       ``(B) the City of New York, New York, and
       ``(C) any agency or instrumentality of such State or City.
       ``(3) Treatment of funds.--Any expenditure for a qualifying 
     project taken into account for purposes of the credit under 
     this section shall be considered State and local funds for 
     the purpose of any Federal program.
       ``(4) Treatment of credit amounts for purposes of 
     withholding taxes.--For purposes of this title, a New York 
     Liberty Zone governmental unit shall be treated as having 
     paid to the Secretary, on the day on which wages are paid to 
     employees, an amount equal to the amount of the credit 
     allowed to such entity under subsection (a) with respect to 
     such wages, but only if such governmental unit deducts and 
     withholds wages for such payroll period under section 3401 
     (relating to wage withholding).
       ``(e) Reporting.--The Governor of the State of New York and 
     the Mayor of the City of New York, New York, shall jointly 
     submit to the Secretary an annual report--
       ``(1) which certifies--
       ``(A) the qualifying project expenditure amount for the 
     calendar year, and
       ``(B) the amount allocated to each New York Liberty Zone 
     governmental unit under subsection (b)(3) for the calendar 
     year, and
       ``(2) includes such other information as the Secretary may 
     require to carry out this section.
       ``(f) Guidance.--The Secretary may prescribe such guidance 
     as may be necessary or appropriate to ensure compliance with 
     the purposes of this section.
       ``(g) Termination.--No credit shall be allowed under 
     subsection (a) for any calender year after 2025.''.
       (b) Termination of Special Allowance and Expensing.--
     Section 1400K(b)(2)(A)(v), as redesignated by subsection (a), 
     is amended by striking ``the termination date'' and inserting 
     ``the date of the enactment of the American Infrastructure 
     Investment and Improvement Act of 2008 or the termination 
     date if pursuant to a binding contract in effect on such 
     enactment date''.
       (c) Conforming Amendments.--
       (1) Section 38(c)(3)(B) is amended by striking ``section 
     1400L(a)'' and inserting ``section 1400K(a)''.
       (2) Section 168(k)(2)(D)(ii) is amended by striking 
     ``section 1400L(c)(2)'' and inserting ``1400K(c)(2)''.
       (3) The table of sections for part I of subchapter Y of 
     chapter 1 is amended by striking ``1400L'' and inserting 
     ``1400K''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to periods 
     beginning after December 31, 2008.
       (2) Termination of special allowance and expensing.--The 
     amendment made by subsection (b) shall take effect on the 
     date of the enactment of this Act.

     SEC. 832. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 833. INCREASED INFORMATION RETURN PENALTIES.

       (a) Failure to File Correct Information Returns.--
       (1) In general.--Section 6721(a)(1) (relating to imposition 
     of penalty) is amended--
       (A) by striking ``$50'' and inserting ``$250'', and
       (B) by striking ``$250,000'' and inserting ``$3,000,000''.
       (2) Reduction where correction in specified period.--
       (A) Correction within 30 days.--Section 6721(b)(1) is 
     amended--
       (i) by striking ``$15'' and inserting ``$50'',
       (ii) by striking ``in lieu of $50'' and inserting ``in lieu 
     of $250'', and
       (iii) by striking ``$75,000'' and inserting ``$500,000''.
       (B) Failures corrected on or before august 1.--Section 
     6721(b)(2) is amended--
       (i) by striking ``$30'' and inserting ``$100'',
       (ii) by striking ``$50'' and inserting ``$250'', and
       (iii) by striking ``$150,000'' and inserting 
     ``$1,500,000''.
       (3) Lower limitation for persons with gross receipts of not 
     more than $5,000,000.--Section 6721(d)(1) is amended--
       (A) in subparagraph (A)--
       (i) by striking ``$100,000'' and inserting ``$1,000,000'', 
     and
       (ii) by striking ``$250,000'' and inserting ``$3,000,000'',
       (B) in subparagraph (B)--
       (i) by striking ``$25,000'' and inserting ``$175,000'', and
       (ii) by striking ``$75,000'' and inserting ``$500,000'', 
     and
       (C) in subparagraph (C)--
       (i) by striking ``$50,000'' and inserting ``$500,000'', and
       (ii) by striking ``$150,000'' and inserting ``$1,500,000''.
       (4) Penalty in case of intentional disregard.--Section 
     6721(e) is amended--
       (A) by striking ``$100'' in paragraph (2) and inserting 
     ``$500'',
       (B) by striking ``$250,000'' in paragraph (3)(A) and 
     inserting ``$3,000,000''.
       (b) Failure to Furnish Correct Payee Statements.--
       (1) In general.--Section 6722(a) is amended--

[[Page 7150]]

       (A) by striking ``$50'' and inserting ``$250'', and
       (B) by striking ``$100,000'' and inserting ``$1,000,000''.
       (2) Penalty in case of intentional disregard.--Section 
     6722(c) is amended--
       (A) by striking ``$100'' in paragraph (1) and inserting 
     ``$500'', and
       (B) by striking ``$100,000'' in paragraph (2)(A) and 
     inserting ``$1,000,000''.
       (c) Failure to Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$250'', and
       (2) by striking ``$100,000'' and inserting ``$1,000,000''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2009.

     SEC. 834. EXEMPTION OF CERTAIN COMMERCIAL CARGO FROM HARBOR 
                   MAINTENANCE TAX.

       (a) In General.--Section 4462 is amended--
       (1) by redesignating subsection (i) as subsection (j), and
       (2) by inserting after subsection (h) the following new 
     subsection:
       ``(i) Exemption for Certain Cargo Transported on the Great 
     Lakes Saint Lawrence Seaway System.--
       ``(1) In general.--No tax shall be imposed under section 
     4461(a) with respect to--
       ``(A) commercial cargo (other than bulk cargo) loaded at a 
     port in the United States located in the Great Lakes Saint 
     Lawrence Seaway System and unloaded at another port in the 
     United States located in such system, and
       ``(B) commercial cargo (other than bulk cargo) unloaded at 
     a port in the United States located in the Great Lakes Saint 
     Lawrence Seaway System which was loaded at a port in Canada 
     located in such system.
       ``(2) Bulk cargo.--For purposes of this subsection, the 
     term `bulk cargo' shall have the meaning given such term by 
     section 53101(1) of title 46, United States Code (as in 
     effect on the date of the enactment of this section).
       ``(3) Great lakes saint lawrence seaway system.--For 
     purposes of this subsection, the term `Great Lakes Saint 
     Lawrence Seaway System' means the waterway between Duluth, 
     Minnesota and Sept. Iles, Quebec, encompassing the five Great 
     Lakes, their connecting channels, and the Saint Lawrence 
     River.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 835. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE 
                   BONDS.

       (a) In General.--Subpart H of part IV of subchapter A of 
     chapter 1 (relating to credits against tax) is amended by 
     adding at the end the following new section:

     ``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED RAIL 
                   INFRASTRUCTURE BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     rail infrastructure bond on 1 or more credit allowance dates 
     of the bond occurring during any taxable year, there shall be 
     allowed as a credit against the tax imposed by this chapter 
     for the taxable year an amount equal to the sum of the 
     credits determined under subsection (b) with respect to such 
     dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified rail infrastructure bond is 25 percent 
     of the annual credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified rail infrastructure bond is the 
     product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any qualified rail infrastructure bond, the 
     Secretary shall determine daily or cause to be determined 
     daily a credit rate which shall apply to the first day on 
     which there is a binding, written contract for the sale or 
     exchange of the bond. The credit rate for any day is the 
     credit rate which the Secretary or the Secretary's designee 
     estimates will permit the issuance of qualified rail 
     infrastructure bonds with a specified maturity or redemption 
     date, without discount and without interest cost to the 
     qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than this subpart, subpart C, and section 1400N(l)).
       ``(d) Qualified Rail Infrastructure Bond.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified rail infrastructure 
     bond' means any bond issued as part of an issue if--
       ``(A) the bond is issued by a qualified issuer pursuant to 
     an allocation by the Secretary to such issuer of a portion of 
     the national qualified rail infrastructure bond annual 
     limitation under subsection (f)(2) by not later than the end 
     of the calendar year following the year of such allocation,
       ``(B) 95 percent or more of the proceeds of such issue are 
     to be used for capital expenditures incurred for 1 or more 
     qualified projects,
       ``(C) the qualified issuer designates such bond for 
     purposes of this section and the bond is in registered form, 
     and
       ``(D) the issue meets the requirements of subsection (h).
       ``(2) Qualified project; special use rules.--
       ``(A) In general.--The term `qualified project' means a 
     project eligible under section 26101(b) of title 49, United 
     States Code (determined without regard to paragraph (2) 
     thereof), which the Secretary determines was selected using 
     the criteria of subsection (c) of such section 26101 by the 
     Secretary of Transportation, that makes a substantial 
     contribution to improving a rail transportation corridor for 
     intercity passenger rail use.
       ``(B) Certification required regarding certain projects.--
     The Secretary shall not consider a project to be a qualified 
     project unless an applicant certifies to the Secretary that--
       ``(i) if a project involves a rail transportation corridor 
     which includes the use of rights-of-way owned by a freight 
     railroad, the applicant has entered into a written agreement 
     with such freight railroad regarding the use of the rights-
     of-way and has received assurances that collective bargaining 
     agreements between such freight railroad and its employees 
     (including terms regarding the contracting of work performed 
     on such corridor) shall remain in full force and effect 
     during the term of such written agreement,
       ``(ii) any person which provides railroad transportation 
     over infrastructure improved or acquired pursuant to this 
     section, is a rail carrier as defined by section 10102 of 
     title 49, United States Code, and
       ``(iii) the applicant shall, with respect to improvements 
     to rail infrastructure made pursuant to this section, comply 
     with the standards applicable to construction work in such 
     title 49, in the same manner in which the National Railroad 
     Passenger Corporation is required to comply with such 
     standards.
       ``(C) Refinancing rules.--For purposes of paragraph (1)(B), 
     a qualified project may be refinanced with proceeds of a 
     qualified rail infrastructure bond only if the indebtedness 
     being refinanced (including any obligation directly or 
     indirectly refinanced by such indebtedness) was originally 
     incurred after the date of the enactment of this section.
       ``(D) Reimbursement.--For purposes of paragraph (1)(B), a 
     qualified rail infrastructure bond may be issued to reimburse 
     for amounts paid after the date of the enactment of this 
     section with respect to a qualified project, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     issuer declared its intent to reimburse such expenditure with 
     the proceeds of a qualified rail infrastructure bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the qualified issuer adopts an official intent 
     to reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(E) Treatment of changes in use.--For purposes of 
     paragraph (1)(B), the proceeds of an issue shall not be 
     treated as used for a qualified project to the extent that a 
     qualified issuer takes any action within its control which 
     causes such proceeds not to be used for a qualified project. 
     The Secretary shall prescribe regulations specifying remedial 
     actions that may be taken (including conditions to taking 
     such remedial actions) to prevent an action described in the 
     preceding sentence from causing a bond to fail to be a 
     qualified rail infrastructure bond.
       ``(e) Maturity Limitations.--
       ``(1) Duration of term.--A bond shall not be treated as a 
     qualified rail infrastructure bond if the maturity of such 
     bond exceeds the maximum term determined by the Secretary 
     under paragraph (2) with respect to such bond.
       ``(2) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being

[[Page 7151]]

     equal to 50 percent of the face amount of such bond. Such 
     present value shall be determined without regard to the 
     requirements of paragraph (3) and using as a discount rate 
     the average annual interest rate of tax-exempt obligations 
     having a term of 10 years or more which are issued during the 
     month. If the term as so determined is not a multiple of a 
     whole year, such term shall be rounded to the next highest 
     whole year.
       ``(3) Ratable principal amortization required.--A bond 
     shall not be treated as a qualified rail infrastructure bond 
     unless it is part of an issue which provides for an equal 
     amount of principal to be paid by the qualified issuer during 
     each 12-month period that the issue is outstanding (other 
     than the first 12-month period).
       ``(f) Annual Limitation on Amount of Bonds Designated.--
       ``(1) National annual limitation.--There is a national 
     qualified rail infrastructure bond annual limitation for each 
     calendar year. Such limitation is $900,000,000 for 2009, 
     2010, and 2011, and, except as provided in paragraph (3), 
     zero thereafter.
       ``(2) Allocation by secretary.--The national qualified rail 
     infrastructure bond annual limitation for a calendar year 
     shall be allocated by the Secretary among qualified projects 
     in such manner as the Secretary determines appropriate.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year, the national qualified rail infrastructure bond annual 
     limitation for such year exceeds the amount of bonds 
     allocated during such year, such limitation for the following 
     calendar year shall be increased by the amount of such 
     excess. Any carryforward of a limitation may be carried only 
     to the first 2 years following the unused limitation year. 
     For purposes of the preceding sentence, a limitation shall be 
     treated as used on a first-in first-out basis.
       ``(g) Credit Treated as Interest.--For purposes of this 
     title, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(h) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the qualified issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds of the issue are 
     to be spent for 1 or more qualified projects within the 5-
     year period beginning on the date of issuance of the 
     qualified rail infrastructure bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds of the issue will be 
     incurred within the 6-month period beginning on the date of 
     issuance of the qualified rail infrastructure bond, and
       ``(C) such projects will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the qualified 
     issuer establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     projects will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the qualified issuer shall redeem 
     all of the nonqualified bonds within 90 days after the end of 
     such period. For purposes of this paragraph, the amount of 
     the nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(i) Special Rules Relating to Arbitrage.--A bond which is 
     part of an issue shall not be treated as a qualified rail 
     infrastructure bond unless, with respect to the issue of 
     which the bond is a part, the qualified issuer satisfies the 
     arbitrage requirements of section 148 with respect to 
     proceeds of the issue.
       ``(j) Special Rules Relating to Pool Bonds.--No portion of 
     a pooled financing bond may be allocable to loan unless the 
     borrower has entered into a written loan commitment for such 
     portion prior to the issue date of such issue.
       ``(k) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Pooled financing bond.--The term `pooled financing 
     bond' shall have the meaning given such term by section 
     149(f)(4)(A).
       ``(3) Qualified issuer.--The term `qualified issuer' means 
     1 or more States or an interstate compact of States.
       ``(4) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(5) S corporations and partnerships.--In the case of a 
     qualified rail infrastructure bond held by an S corporation 
     or partnership, the allocation of the credit allowed by this 
     section to the shareholders of the corporation or partners of 
     such partnership shall be treated as a distribution.
       ``(6) Bonds held by regulated investment companies.--If any 
     qualified rail infrastructure bond is held by a regulated 
     investment company, the credit determined under subsection 
     (a) shall be allowed to shareholders of such company under 
     procedures prescribed by the Secretary.
       ``(7) Reporting.--Issuers of qualified rail infrastructure 
     bonds shall submit reports similar to the reports required 
     under section 149(e).
       ``(8) Termination.--This section shall not apply with 
     respect to any bond issued after December 31, 2013.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on qualified rail infrastructure 
     bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A(g) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54A(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) The table of sections for subpart H of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54A. Credit to holders of qualified rail infrastructure 
              bonds.''.
       (2) Section 54(c)(2) is amended by inserting ``, section 
     54A,'' after ``subpart C''.
       (d) Issuance of Regulations.--The Secretary of Treasury 
     shall issue regulations required under section 54A of the 
     Internal Revenue Code of 1986 (as added by this section) not 
     later than 120 days after the date of the enactment of this 
     Act.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 836. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND 
                   INTEREST.

       (a) In General.--Section 6404 is amended by striking 
     subsection (g).
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to notices 
     provided by the Secretary of the Treasury, or his delegate 
     after the date which is 6 months after the date of the 
     enactment of the Small Business and Work Opportunity Tax Act 
     of 2007.
       (2) Exception for certain taxpayers.--The amendments made 
     by this section shall not apply to any taxpayer with respect 
     to whom a suspension of any interest, penalty, addition to 
     tax, or other amount is in effect on the date which is 6 
     months after the date of the enactment of the Small Business 
     and Work Opportunity Tax Act of 2007.

     SEC. 837. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to--
       ``(A) the violation of any law, or
       ``(B) an investigation or inquiry into the potential 
     violation of any law which is initiated by such government or 
     entity.
       ``(2) Exception for amounts constituting restitution or 
     paid to come into compliance with law.--Paragraph (1) shall 
     not apply to any amount which--
       ``(A) the taxpayer establishes--
       ``(i) constitutes restitution (or remediation of property) 
     for damage or harm caused by, or which may be caused by, the 
     violation of any law or the potential violation of any law, 
     or
       ``(ii) is paid to come into compliance with any law which 
     was violated or involved in the investigation or inquiry, and
       ``(B) is identified as an amount described in clause (i) or 
     (ii) of subparagraph (A), as the case may be, in the court 
     order or settlement agreement, except that the requirement of 
     this subparagraph shall not apply in the case of any 
     settlement agreement which requires the taxpayer to pay or 
     incur an amount not greater than $1,000,000.
     A taxpayer shall not meet the requirements of subparagraph 
     (A) solely by reason an identification under subparagraph 
     (B). This paragraph shall not apply to any amount paid or 
     incurred as reimbursement to the government or entity for the 
     costs of any investigation or litigation unless such amount 
     is paid or incurred for a cost or fee regularly charged for 
     any routine audit or other customary review performed by the 
     government or entity.

[[Page 7152]]

       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (b) Reporting of Deductible Amounts.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6050V the 
     following new section:

     ``SEC. 6050W. INFORMATION WITH RESPECT TO CERTAIN FINES, 
                   PENALTIES, AND OTHER AMOUNTS.

       ``(a) Requirement of Reporting.--
       ``(1) In general.--The appropriate official of any 
     government or entity which is described in section 162(f)(4) 
     which is involved in a suit or agreement described in 
     paragraph (2) shall make a return in such form as determined 
     by the Secretary setting forth--
       ``(A) the amount required to be paid as a result of the 
     suit or agreement to which paragraph (1) of section 162(f) 
     applies,
       ``(B) any amount required to be paid as a result of the 
     suit or agreement which constitutes restitution or 
     remediation of property, and
       ``(C) any amount required to be paid as a result of the 
     suit or agreement for the purpose of coming into compliance 
     with any law which was violated or involved in the 
     investigation or inquiry.
       ``(2) Suit or agreement described.--
       ``(A) In general.--A suit or agreement is described in this 
     paragraph if--
       ``(i) it is--

       ``(I) a suit with respect to a violation of any law over 
     which the government or entity has authority and with respect 
     to which there has been a court order, or
       ``(II) an agreement which is entered into with respect to a 
     violation of any law over which the government or entity has 
     authority, or with respect to an investigation or inquiry by 
     the government or entity into the potential violation of any 
     law over which such government or entity has authority, and

       ``(ii) the aggregate amount involved in all court orders 
     and agreements with respect to the violation, investigation, 
     or inquiry is $600 or more.
       ``(B) Adjustment of reporting threshold.--The Secretary may 
     adjust the $600 amount in subparagraph (A)(ii) as necessary 
     in order to ensure the efficient administration of the 
     internal revenue laws.
       ``(3) Time of filing.--The return required under this 
     subsection shall be filed not later than--
       ``(A) 30 days after the date on which a court order is 
     issued with respect to the suit or the date the agreement is 
     entered into, as the case may be, or
       ``(B) the date specified by the Secretary.
       ``(b) Statements To Be Furnished to Individuals Involved in 
     the Settlement.--Every person required to make a return under 
     subsection (a) shall furnish to each person who is a party to 
     the suit or agreement a written statement showing--
       ``(1) the name of the government or entity, and
       ``(2) the information supplied to the Secretary under 
     subsection (a)(1).
     The written statement required under the preceding sentence 
     shall be furnished to the person at the same time the 
     government or entity provides the Secretary with the 
     information required under subsection (a).
       ``(c) Appropriate Official Defined.--For purposes of this 
     section, the term `appropriate official' means the officer or 
     employee having control of the suit, investigation, or 
     inquiry or the person appropriately designated for purposes 
     of this section.''.
       (2) Conforming amendment.--The table of sections for 
     subpart B of part III of subchapter A of chapter 61 is 
     amended by inserting after the item relating to section 6050V 
     the following new item:

``Sec. 6050W. Information with respect to certain fines, penalties, and 
              other amounts.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendments 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.

     SEC. 838. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--All property of a covered expatriate 
     shall be treated as sold on the day before the expatriation 
     date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.
     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence, determined without 
     regard to paragraph (3).
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be includible in the gross income of any 
     individual by reason of paragraph (1) shall be reduced (but 
     not below zero) by $600,000.
       ``(B) Adjustment for inflation.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2008, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2007' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the nearest multiple of $1,000.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the time for payment of the 
     additional tax attributable to such property shall be 
     extended until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of extension.--The due date for payment 
     of tax may not be extended under this subsection later than 
     the due date for the return of tax imposed by this chapter 
     for the taxable year which includes the date of death of the 
     expatriate (or, if earlier, the time that the security 
     provided with respect to the property fails to meet the 
     requirements of paragraph (4), unless the taxpayer corrects 
     such failure within the time specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond which is furnished to, and accepted by, 
     the Secretary, which is conditioned on the payment of tax 
     (and interest thereon), and which meets the requirements of 
     section 6325, or
       ``(ii) it is another form of security for such payment 
     (including letters of credit) that meets such requirements as 
     the Secretary may prescribe.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer makes an irrevocable 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable.
       ``(7) Interest.--For purposes of section 6601, the last 
     date for the payment of tax shall be determined without 
     regard to the election under this subsection.
       ``(c) Exception for Certain Property.--Subsection (a) shall 
     not apply to--
       ``(1) any deferred compensation item (as defined in 
     subsection (d)(4)),
       ``(2) any specified tax deferred account (as defined in 
     subsection (e)(2)), and
       ``(3) any interest in a nongrantor trust (as defined in 
     subsection (f)(3)).
       ``(d) Treatment of Deferred Compensation Items.--
       ``(1) Withholding on eligible deferred compensation 
     items.--

[[Page 7153]]

       ``(A) In general.--In the case of any eligible deferred 
     compensation item, the payor shall deduct and withhold from 
     any taxable payment to a covered expatriate with respect to 
     such item a tax equal to 30 percent thereof.
       ``(B) Taxable payment.--For purposes of subparagraph (A), 
     the term `taxable payment' means with respect to a covered 
     expatriate any payment to the extent it would be includible 
     in the gross income of the covered expatriate if such 
     expatriate continued to be subject to tax as a citizen or 
     resident of the United States. A deferred compensation item 
     shall be taken into account as a payment under the preceding 
     sentence when such item would be so includible.
       ``(2) Other deferred compensation items.--In the case of 
     any deferred compensation item which is not an eligible 
     deferred compensation item--
       ``(A)(i) with respect to any deferred compensation item to 
     which clause (ii) does not apply, an amount equal to the 
     present value of the covered expatriate's accrued benefit 
     shall be treated as having been received by such individual 
     on the day before the expatriation date as a distribution 
     under the plan, and
       ``(ii) with respect to any deferred compensation item 
     referred to in paragraph (4)(D), the rights of the covered 
     expatriate to such item shall be treated as becoming 
     transferable and not subject to a substantial risk of 
     forfeiture on the day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the plan to reflect such treatment.
       ``(3) Eligible deferred compensation items.--For purposes 
     of this subsection, the term `eligible deferred compensation 
     item' means any deferred compensation item with respect to 
     which--
       ``(A) the payor of such item is--
       ``(i) a United States person, or
       ``(ii) a person who is not a United States person but who 
     elects to be treated as a United States person for purposes 
     of paragraph (1) and meets such requirements as the Secretary 
     may provide to ensure that the payor will meet the 
     requirements of paragraph (1), and
       ``(B) the covered expatriate--
       ``(i) notifies the payor of his status as a covered 
     expatriate, and
       ``(ii) makes an irrevocable waiver of any right to claim 
     any reduction under any treaty with the United States in 
     withholding on such item.
       ``(4) Deferred compensation item.--For purposes of this 
     subsection, the term `deferred compensation item' means--
       ``(A) any interest in a plan or arrangement described in 
     section 219(g)(5),
       ``(B) any interest in a foreign pension plan or similar 
     retirement arrangement or program,
       ``(C) any item of deferred compensation, and
       ``(D) any property, or right to property, which the 
     individual is entitled to receive in connection with the 
     performance of services to the extent not previously taken 
     into account under section 83 or in accordance with section 
     83.
       ``(5) Exception.--Paragraphs (1) and (2) shall not apply to 
     any deferred compensation item which is attributable to 
     services performed outside the United States while the 
     covered expatriate was not a citizen or resident of the 
     United States.
       ``(6) Special rules.--
       ``(A) Application of withholding rules.--Rules similar to 
     the rules of subchapter B of chapter 3 shall apply for 
     purposes of this subsection.
       ``(B) Application of tax.--Any item subject to the 
     withholding tax imposed under paragraph (1) shall be subject 
     to tax under section 871.
       ``(C) Coordination with other withholding requirements.--
     Any item subject to withholding under paragraph (1) shall not 
     be subject to withholding under section 1441 or chapter 24.
       ``(e) Treatment of Specified Tax Deferred Accounts.--
       ``(1) Account treated as distributed.--In the case of any 
     interest in a specified tax deferred account held by a 
     covered expatriate on the day before the expatriation date--
       ``(A) the covered expatriate shall be treated as receiving 
     a distribution of his entire interest in such account on the 
     day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the account to reflect such treatment.
       ``(2) Specified tax deferred account.--For purposes of 
     paragraph (1), the term `specified tax deferred account' 
     means an individual retirement plan (as defined in section 
     7701(a)(37)) other than any arrangement described in 
     subsection (k) or (p) of section 408, a qualified tuition 
     program (as defined in section 529), a Coverdell education 
     savings account (as defined in section 530), a health savings 
     account (as defined in section 223), and an Archer MSA (as 
     defined in section 220).
       ``(f) Special Rules for Nongrantor Trusts.--
       ``(1) In general.--In the case of a distribution (directly 
     or indirectly) of any property from a nongrantor trust to a 
     covered expatriate--
       ``(A) the trustee shall deduct and withhold from such 
     distribution an amount equal to 30 percent of the taxable 
     portion of the distribution, and
       ``(B) if the fair market value of such property exceeds its 
     adjusted basis in the hands of the trust, gain shall be 
     recognized to the trust as if such property were sold to the 
     expatriate at its fair market value.
       ``(2) Taxable portion.--For purposes of this subsection, 
     the term `taxable portion' means, with respect to any 
     distribution, that portion of the distribution which would be 
     includible in the gross income of the covered expatriate if 
     such expatriate continued to be subject to tax as a citizen 
     or resident of the United States.
       ``(3) Nongrantor trust.--For purposes of this subsection, 
     the term `nongrantor trust' means the portion of any trust 
     that the individual is not considered the owner of under 
     subpart E of part I of subchapter J. The determination under 
     the preceding sentence shall be made immediately before the 
     expatriation date.
       ``(4) Special rules relating to withholding.--For purposes 
     of this subsection--
       ``(A) rules similar to the rules of subsection (d)(6) shall 
     apply, and
       ``(B) the covered expatriate shall be treated as having 
     waived any right to claim any reduction under any treaty with 
     the United States in withholding on any distribution to which 
     paragraph (1)(A) applies.
       ``(g) Definitions and Special Rules Relating to 
     Expatriation.--For purposes of this section--
       ``(1) Covered expatriate.--
       ``(A) In general.--The term `covered expatriate' means an 
     expatriate who meets the requirements of subparagraph (A), 
     (B), or (C) of section 877(a)(2).
       ``(B) Exceptions.--An individual shall not be treated as 
     meeting the requirements of subparagraph (A) or (B) of 
     section 877(a)(2) if--
       ``(i) the individual--

       ``(I) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(II) has been a resident of the United States (as defined 
     in section 7701(b)(1)(A)(ii)) for not more than 10 taxable 
     years during the 15-taxable year period ending with the 
     taxable year during which the expatriation date occurs, or

       ``(ii)(I) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(II) the individual has been a resident of the United 
     States (as so defined) for not more than 10 taxable years 
     before the date of relinquishment.
       ``(C) Covered expatriates also subject to tax as citizens 
     or residents.--In the case of any covered expatriate who is 
     subject to tax as a citizen or resident of the United States 
     for any period beginning after the expatriation date, such 
     individual shall not be treated as a covered expatriate 
     during such period for purposes of subsections (d)(1) and (f) 
     and section 2801.
       ``(2) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes his 
     citizenship, and
       ``(B) any long-term resident of the United States who 
     ceases to be a lawful permanent resident of the United States 
     (within the meaning of section 7701(b)(6)).
       ``(3) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date on which the individual ceases to be a 
     lawful permanent resident of the United States (within the 
     meaning of section 7701(b)(6)).
       ``(4) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing his United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces his United States 
     nationality before a diplomatic or consular officer of the 
     United States pursuant to paragraph (5) of section 349(a) of 
     the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.
     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.

[[Page 7154]]

       ``(5) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(6) Early distribution tax.--The term `early distribution 
     tax' means any increase in tax imposed under section 72(t), 
     220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
       ``(h) Other Rules.--
       ``(1) Termination of deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(A) any time period for acquiring property which would 
     result in the reduction in the amount of gain recognized with 
     respect to property disposed of by the taxpayer shall 
     terminate on the day before the expatriation date, and
       ``(B) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(2) Step-up in basis.--Solely for purposes of determining 
     any tax imposed by reason of subsection (a), property which 
     was held by an individual on the date the individual first 
     became a resident of the United States (within the meaning of 
     section 7701(b)) shall be treated as having a basis on such 
     date of not less than the fair market value of such property 
     on such date. The preceding sentence shall not apply if the 
     individual elects not to have such sentence apply. Such an 
     election, once made, shall be irrevocable.
       ``(3) Coordination with section 684.--If the expatriation 
     of any individual would result in the recognition of gain 
     under section 684, this section shall be applied after the 
     application of section 684.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Tax on Gifts and Bequests Received by United States 
     Citizens and Residents From Expatriates.--
       (1) In general.--Subtitle B (relating to estate and gift 
     taxes) is amended by inserting after chapter 14 the following 
     new chapter:

           ``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

``Sec. 2801. Imposition of tax.

     ``SEC. 2801. IMPOSITION OF TAX.

       ``(a) In General.--If, during any calendar year, any United 
     States citizen or resident receives any covered gift or 
     bequest, there is hereby imposed a tax equal to the product 
     of--
       ``(1) the highest rate of tax specified in the table 
     contained in section 2001(c) as in effect on the date of such 
     receipt (or, if greater, the highest rate of tax specified in 
     the table applicable under section 2502(a) as in effect on 
     the date), and
       ``(2) the value of such covered gift or bequest.
       ``(b) Tax To Be Paid by Recipient.--The tax imposed by 
     subsection (a) on any covered gift or bequest shall be paid 
     by the person receiving such gift or bequest.
       ``(c) Exception for Certain Gifts.--Subsection (a) shall 
     apply only to the extent that the value of covered gifts and 
     bequests received by any person during the calendar year 
     exceeds $10,000.
       ``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax 
     imposed by subsection (a) on any covered gift or bequest 
     shall be reduced by the amount of any gift or estate tax paid 
     to a foreign country with respect to such covered gift or 
     bequest.
       ``(e) Covered Gift or Bequest.--
       ``(1) In general.--For purposes of this chapter, the term 
     `covered gift or bequest' means--
       ``(A) any property acquired by gift directly or indirectly 
     from an individual who, at the time of such acquisition, is a 
     covered expatriate, and
       ``(B) any property acquired directly or indirectly by 
     reason of the death of an individual who, immediately before 
     such death, was a covered expatriate.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Such term shall not include--
       ``(A) any property shown on a timely filed return of tax 
     imposed by chapter 12 which is a taxable gift by the covered 
     expatriate, and
       ``(B) any property included in the gross estate of the 
     covered expatriate for purposes of chapter 11 and shown on a 
     timely filed return of tax imposed by chapter 11 of the 
     estate of the covered expatriate.
       ``(3) Transfers in trust.--
       ``(A) Domestic trusts.--In the case of a covered gift or 
     bequest made to a domestic trust--
       ``(i) subsection (a) shall apply in the same manner as if 
     such trust were a United States citizen, and
       ``(ii) the tax imposed by subsection (a) on such gift or 
     bequest shall be paid by such trust.
       ``(B) Foreign trusts.--
       ``(i) In general.--In the case of a covered gift or bequest 
     made to a foreign trust, subsection (a) shall apply to any 
     distribution attributable to such gift or bequest from such 
     trust (whether from income or corpus) to a United States 
     citizen or resident in the same manner as if such 
     distribution were a covered gift or bequest.
       ``(ii) Deduction for tax paid by recipient.--There shall be 
     allowed as a deduction under section 164 the amount of tax 
     imposed by this section which is paid or accrued by a United 
     States citizen or resident by reason of a distribution from a 
     foreign trust, but only to the extent such tax is imposed on 
     the portion of such distribution which is included in the 
     gross income of such citizen or resident.
       ``(iii) Election to be treated as domestic trust.--Solely 
     for purposes of this section, a foreign trust may elect to be 
     treated as a domestic trust. Such an election may be revoked 
     with the consent of the Secretary.
       ``(f) Covered Expatriate.--For purposes of this section, 
     the term `covered expatriate' has the meaning given to such 
     term by section 877A(g)(1).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     B is amended by inserting after the item relating to chapter 
     14 the following new item:

         ``Chapter 15. Gifts and Bequests From Expatriates.''.

       (c) Definition of Termination of United States 
     Citizenship.--
       (1) In general.--Section 7701(a) is amended by adding at 
     the end the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(g)(4).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 877(e) is amended to read as 
     follows:
       ``(1) In general.--Any long-term resident of the United 
     States who ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)) 
     shall be treated for purposes of this section and sections 
     2107, 2501, and 6039G in the same manner as if such resident 
     were a citizen of the United States who lost United States 
     citizenship on the date of such cessation or commencement.''.
       (B) Paragraph (6) of section 7701(b) is amended by adding 
     at the end the following flush sentence:

     ``An individual shall cease to be treated as a lawful 
     permanent resident of the United States if such individual 
     commences to be treated as a resident of a foreign country 
     under the provisions of a tax treaty between the United 
     States and the foreign country, does not waive the benefits 
     of such treaty applicable to residents of the foreign 
     country, and notifies the Secretary of the commencement of 
     such treatment.''.
       (C) Section 7701 is amended by striking subsection (n) and 
     by redesignating subsections (o) and (p) as subsections (n) 
     and (o), respectively.
       (d) Information Returns.--Section 6039G is amended--
       (1) by inserting ``or 877A'' after ``section 877(b)'' in 
     subsection (a), and
       (2) by inserting ``or 877A'' after ``section 877(a)'' in 
     subsection (d).
       (e) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.
       (f) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (as defined in section 877A(g) of the Internal Revenue Code 
     of 1986, as added by this section) whose expatriation date 
     (as so defined) is on or after the date of the enactment of 
     this Act.
       (2) Gifts and bequests.--Chapter 15 of the Internal Revenue 
     Code of 1986 (as added by subsection (b)) shall apply to 
     covered gifts and bequests (as defined in section 2801 of 
     such Code, as so added) received on or after the date of the 
     enactment of this Act, regardless of when the transferor 
     expatriated.
                                 ______
                                 
  SA 4586. Mr. MENENDEZ submitted an amendment intended to be proposed 
by him to the bill H.R. 2881, to amend title 49, United States Code, to 
authorize appropriations for the Federal Aviation Administration for 
fiscal years 2008 through 2011, to improve aviation safety and 
capacity, to provide stable funding for the national aviation system, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert the following:

     SEC. ___. 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, 2011''.

[[Page 7155]]



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