[House Report 119-552]
[From the U.S. Government Publishing Office]


119th Congress    }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                      {     119-552

======================================================================



 
                 AIRPORT REGULATORY RELIEF ACT OF 2025

                                _______
                                

 March 16, 2026.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

         Mr. Graves, from the Committee on Transportation and 
                Infrastructure, submitted the following

                              R E P O R T

                        [To accompany H.R. 6427]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 6427) to amend title 49, United 
States Code, to permit the use of State highway standards for 
airfield pavement construction and improvement under certain 
circumstances, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose of Legislation...........................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Legislative History and Consideration............................     3
Committee Votes..................................................     3
Committee Oversight Findings and Recommendations.................     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     4
Performance Goals and Objectives.................................     5
Duplication of Federal Programs..................................     5
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     5
Federal Mandates Statement.......................................     5
Preemption Clarification.........................................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill, as Reported............     6
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Airport Regulatory Relief Act of 
2025''.

SEC. 2. USE OF STATE HIGHWAY STANDARDS.

  Section 47114(d)(4) of title 49, United States Code, is amended to 
read as follows:
          ``(4) Use of state highway specifications.--
                  ``(A) In general.--The Secretary shall use the 
                highway specifications of a State for airfield pavement 
                construction and improvement using funds made available 
                under this subsection or subsection (c)(1)(D) at 
                nonprimary airports serving aircraft that do not exceed 
                60,000 pounds gross weight if--
                          ``(i) such State provides notice to the 
                        Secretary that nonprimary airports in the State 
                        intend to use such highway specifications; and
                          ``(ii) the Secretary determines that such 
                        specifications will not negatively affect 
                        safety.
                  ``(B) Deadline.--The Secretary shall make a 
                determination described in subparagraph (A)(ii) not 
                later than 6 months after a State provides notice to 
                the Secretary under subparagraph (A)(i).
                  ``(C) Extension.--If the Secretary determines that 
                the time provided under subparagraph (B) is 
                insufficient to make a determination, the Secretary may 
                extend the determination period by 6 months, so long as 
                the Secretary--
                          ``(i) notifies the State that provided notice 
                        pursuant to subparagraph (A)(i) of the 
                        extension; and
                          ``(ii) provides justification for the 
                        extension to such State.
                  ``(D) Additional extensions.--The Secretary may 
                authorize additional extensions under subparagraph 
                (C).''.

                         Purpose of Legislation

    The purpose of H.R. 6427, as amended, is to amend title 49, 
United States Code, to permit the use of State highway 
standards for airfield pavement construction and improvement 
under certain circumstances, and for other purposes.

                  Background and Need for Legislation

    Historically, certain non-primary airports seeking to use 
state highway specifications for an airfield pavement 
construction project instead of Federal aviation paving 
standards had to formally request approval from the Secretary 
of Transportation. The formality of requesting permission to 
use state highway specifications can lead to increased backlogs 
of approvals and increased project construction time.
    H.R. 6427, as amended, affords certain non-primary airports 
the opportunity to be more agile in their project planning by 
removing the requirement that states formally request 
permission from the Secretary to use state highway 
specifications. By allowing states to notify the Secretary of 
their intention to use state highway specifications, rather 
than request permission, critical airfield pavement 
construction projects will no longer be subject to lengthy and 
bureaucratic delays. To ensure safety, H.R. 6427, as amended, 
maintains the requirement that the Secretary of Transportation 
make a determination on whether the use of such state highway 
standards would negatively affect aviation safety. However, the 
Secretary's determination must now be made within six months 
after receiving an initial notification from a non-primary 
airport. The Secretary is further allowed to issue themselves 
additional six-month extensions, so long as the Secretary 
provides notice and justification for each extension.

                                Hearings

    For the purposes of rule XIII, clause 3(c)(6)(A) of the 
119th Congress--
    The following hearing was used to develop or consider H.R. 
6427: On Tuesday, April 8, 2025, the Subcommittee on Aviation 
held a hearing entitled, ``America Builds: Airport 
Infrastructure, Safety, and Regulatory Environment.'' At the 
hearing, Members received testimony from Mr. Michael Landguth, 
President, Chief Executive Officer, Raleigh-Durham Airport 
Authority (RDU); Mr. Lawrence Krauter, Chief Executive Officer, 
Cincinnati & Northern Kentucky International Airport (CVG); and 
Mr. Andre Sutton, International Vice President, Director, Air 
Division, Transport Workers Union of America, AFL-CIO. The 
hearing examined the current state of America's airport 
infrastructure and regulatory hurdles that airports face when 
renovating outdated infrastructure.

                 Legislative History and Consideration

    H.R. 6427, the ``Airport Regulatory Relief Act of 2025,'' 
was introduced in the United States House of Representatives on 
December 4, 2025, by Representative Nicholas Begich (R-AK), 
with Representatives Ed Case (D-HI), David Taylor (R-OH) and 
Jill Tokuda (D-HI) as original cosponsors, and referred to the 
Committee on Transportation and Infrastructure. Within the 
Committee on Transportation and Infrastructure, H.R. 6427 was 
referred to the Subcommittee on Aviation. The Subcommittee on 
Aviation was discharged from further consideration of H.R. 6427 
on December 18, 2025.
    The Committee considered H.R. 6427 on December 18, 2025, 
and ordered the measure to be reported to the House with a 
favorable recommendation, with amendment, by voice vote.
    The following amendment was offered:
    An Amendment in the Nature of a Substitute to H.R. 6427, 
offered by Mr. Begich of Alaska; was AGREED TO by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires each committee report to include the 
total number of votes cast for and against on each record vote 
on a motion to report and on any amendment offered to the 
measure or matter, and the names of those members voting for 
and against.
    No recorded votes were requested.

            Committee Oversight Findings and Recommendations

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

               Congressional Budget Office Cost Estimate

    With respect to the requirement of clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
402 of the Congressional Budget Act of 1974, the Committee has 
received the enclosed cost estimate for H.R. 6427 from the 
Director of the Congressional Budget Office:

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    H.R. 6427 would amend requirements for the Airport 
Improvement Program (AIP) grants to nonprimary airports by 
streamlining the process for using state construction standards 
in airfield pavement projects. Under current law, airports 
generally are required to use Federal Aviation Administration 
(FAA) construction standards to receive AIP funding for such 
projects. However, certain nonprimary airports may use state 
standards if the FAA determines they would not negatively 
affect safety or pavement quality. The bill would allow 
nonprimary airports to declare their intent to use state 
standards rather than FAA standards.
    H.R. 6427 would not change the total amount of AIP grants 
awarded. However, CBO expects that the bill could affect the 
timing of spending for certain projects that use previously 
appropriated funds. On that basis, CBO estimates that enacting 
H.R. 6427 would have an insignificant effect on direct spending 
over the 2026-2031 period and no net effect over the 2026-2036 
period. Implementing the bill would not affect spending subject 
to appropriation.
    The CBO staff contact for this estimate is Emma Uebelhor. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

                    Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goal and objective of this legislation is to amend 
title 49, United States Code, to permit the use of State 
highway standards for airfield pavement construction and 
improvement under certain circumstances, and for other 
purposes.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that no provision 
of H.R. 6427 establishes or reauthorizes a program of the 
Federal government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    In compliance with clause 9 of rule XXI of the Rules of the 
House of Representatives, this bill, as reported, contains no 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of the rule 
XXI.

                       Federal Mandates Statement

    An estimate of Federal mandates prepared by the Director of 
the Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act was not made available to the 
Committee in time for the filing of this report. The Chairman 
of the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee.

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local, 
or tribal law. The Committee finds that H.R. 6427 does not 
preempt any state, local, or tribal law.

                      Advisory Committee Statement

    No advisory committees within the definition of Section 
5(b) of the appendix to Title 5, United States Code, are 
created by this legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section provides that this bill may be cited as the 
``Airport Regulatory Relief Act of 2025.''

Section 2. Use of state highway standards

    This section amends title 49, United States Code, section 
47114(d)(4) to allow non-primary airports serving aircraft that 
do not exceed 60,000 pounds of gross weight to use state 
highway specifications for airfield pavement construction 
projects if the state provides notice to the Secretary of 
Transportation that they intend to use such specifications and 
the Secretary subsequently determines the specifications will 
not negatively impact aviation safety.
    Additionally, this section requires the Secretary to make a 
determination on the impact to aviation safety within six 
months. If the Secretary determines that six months is an 
inadequate time to make such a determination, the Secretary may 
extend the determination period by an extra six months provided 
the Secretary notifies the state of such an extension.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 49, UNITED STATES CODE




           *       *       *       *       *       *       *
SUBTITLE VII--AVIATION PROGRAMS

           *       *       *       *       *       *       *


PART B--AIRPORT DEVELOPMENT AND NOISE

           *       *       *       *       *       *       *


CHAPTER 471--AIRPORT DEVELOPMENT

           *       *       *       *       *       *       *



SUBCHAPTER I--AIRPORT IMPROVEMENT

           *       *       *       *       *       *       *



Sec. 47114. Apportionments

  (a) Definition.--In this section, ``amount subject to 
apportionment'' means the amount newly made available under 
section 48103 of this title for a fiscal year.
  (b) Apportionment Date.--On the first day of each fiscal 
year, the Secretary of Transportation shall apportion the 
amount subject to apportionment for that fiscal year as 
provided in this section.
  (c) Amounts Apportioned to Sponsors.--
          (1) Primary and commercial service airports.--
                  (A) Primary airport apportionment.--The 
                Secretary shall apportion to the sponsor of 
                each primary airport for each fiscal year an 
                amount equal to--
                          (i) $15.60 for each of the first 
                        50,000 passenger boardings at the 
                        airport during the prior calendar year;
                          (ii) $10.40 for each of the next 
                        50,000 passenger boardings at the 
                        airport during the prior calendar year;
                          (iii) $5.20 for each of the next 
                        400,000 passenger boardings at the 
                        airport during the prior calendar year;
                          (iv) $1.30 for each of the next 
                        500,000 passenger boardings at the 
                        airport during the prior calendar year; 
                        and
                          (v) $1.00 for each additional 
                        passenger boarding at the airport 
                        during the prior calendar year.
                  (B) Minimum and maximum apportionments.--Not 
                less than $1,300,000 nor more than $22,000,000 
                may be apportioned under subparagraph (A) to an 
                airport sponsor for a primary airport for each 
                fiscal year.
                  (C) New airport.--Notwithstanding 
                subparagraph (A), the Secretary shall apportion 
                in the first fiscal year following the official 
                opening of a new airport with scheduled 
                passenger air transportation an amount equal to 
                $1,300,000 to the sponsor of such airport.
                  (D) Nonprimary commercial service airport 
                apportionment.--
                          (i) In general.--The Secretary shall 
                        apportion to each commercial service 
                        airport that is not a primary airport 
                        an amount equal to--
                                  (I) $60 for each of the first 
                                2,500 passenger boardings at 
                                the airport during the prior 
                                calendar year; and
                                  (II) $153.33 for each of the 
                                next 7,499 passenger boardings 
                                at the airport during the prior 
                                calendar year.
                          (ii) Applicability.--Paragraphs (4) 
                        and (5) of subsection (d) shall apply 
                        to funds apportioned under this 
                        subparagraph.
                  (E) Public airports with military use.--
                Notwithstanding any other provision of law, a 
                public airport shall be considered a primary 
                airport in each of fiscal years 2025 through 
                2028 for purposes of this chapter if such 
                airport was--
                          (i) designated as a primary airport 
                        in fiscal year 2017; and
                          (ii) in use by an air reserve station 
                        in the calendar year used to calculate 
                        apportionments to airport sponsors in a 
                        fiscal year.
                  (F) Special rule for fiscal year 2024.--
                Notwithstanding any other provision of this 
                paragraph or the absence of scheduled passenger 
                service at an airport, the Secretary shall 
                apportion in fiscal year 2024 to the sponsor of 
                an airport an amount based on the number of 
                passenger boardings at the airport during 
                whichever of the following years that would 
                result in the highest apportioned amount under 
                this paragraph:
                          (i) Calendar year 2018.
                          (ii) Calendar year 2019.
                          (iii) The prior full calendar year 
                        prior to fiscal year 2024.
  (2) Cargo airports.--
          (A) Apportionment.--Subject to subparagraph (D), the 
        Secretary shall apportion an amount equal to 4 percent 
        of the amount subject to apportionment each fiscal year 
        to the sponsors of airports served by aircraft 
        providing air transportation of only cargo with a total 
        annual landed weight of more than 25,000,000 pounds.
          (B) Suballocation formula.--Any funds apportioned 
        under subparagraph (A) to sponsors of airports 
        described in subparagraph (A) shall be allocated among 
        those airports in the proportion that the total annual 
        landed weight of aircraft described in subparagraph (A) 
        landing at each of those airports bears to the total 
        annual landed weight of those aircraft landing at all 
        those airports.
          (C) Distribution to other airports.--Before 
        apportioning amounts to the sponsors of airports under 
        subparagraph (A) for a fiscal year, the Secretary may 
        set-aside a portion of such amounts for distribution to 
        the sponsors of other airports, selected by the 
        Secretary, that the Secretary finds will be served 
        primarily by aircraft providing air transportation of 
        only cargo.
          (D) Determination of landed weight.--Landed weight 
        under this paragraph is the landed weight of aircraft 
        landing at each airport described in subparagraph (A) 
        during the prior calendar year.
  (d) Amounts Apportioned for General Aviation Airports.--
          (1) Definitions.--In this subsection, the following 
        definitions apply:
                  (A) Area.--The term ``area'' includes land 
                and water.
                  (B) Population.--The term ``population'' 
                means the population stated in the latest 
                decennial census of the United States.
          (2) Apportionment.--In any fiscal year in which the 
        total amount made available under section 48103 is 
        $3,200,000,000 or more, rather than making an 
        apportionment under paragraph (2), the Secretary shall 
        apportion 25 percent of the amount subject to 
        apportionment for each fiscal year as follows:
                  (A) To each airport, excluding commercial 
                service airports but including reliever 
                airports, in States the lesser of--
                          (i) $150,000; or
                          (ii) 1/5 of the most recently 
                        published estimate of the 5-year costs 
                        for airport improvement for the 
                        airport, as listed in the national plan 
                        of integrated airport systems developed 
                        by the Federal Aviation Administration 
                        under section 47103.
                  (B) Any remaining amount to States as 
                follows:
                          (i) 0.62 percent of the remaining 
                        amount to Guam, American Samoa, the 
                        Commonwealth of the Northern Mariana 
                        Islands, and the Virgin Islands.
                          (ii) Except as provided in paragraph 
                        (4), 49.69 percent of the remaining 
                        amount for airports, excluding 
                        commercial service airports but 
                        including reliever airports, in States 
                        not named in clause (i) in the 
                        proportion that the population of each 
                        of those States bears to the total 
                        population of all of those States.
                          (iii) Except as provided in paragraph 
                        (4), 49.69 percent of the remaining 
                        amount for airports, excluding 
                        commercial service airports but 
                        including reliever airports, in States 
                        not named in clause (i) in the 
                        proportion that the area of each of 
                        those States bears to the total area of 
                        all of those States.
                  (C) An airport that has previously been 
                listed as unclassified under the national plan 
                of integrated airport systems that has 
                reestablished the classified status of such 
                airport as of the date of apportionment shall 
                be eligible to accrue apportionment funds 
                pursuant to subparagraph (A) so long as such 
                airport retains such classified status.
          (3) Airports in noncontiguous states and 
        territories.--
                  (A) Alaska, puerto rico, and hawaii.--An 
                amount apportioned under this subsection to 
                Alaska, Puerto Rico, or Hawaii for airports in 
                such State may be made available by the 
                Secretary for any public airport in those 
                respective jurisdictions.
                  (B) Other territories.--An amount apportioned 
                under paragraph (2)(B)(i) may be made available 
                by the Secretary for any public-use airport in 
                Guam, American Samoa, the Northern Mariana 
                Islands, or the Virgin Islands if the Secretary 
                determines that there are insufficient 
                qualified grant applications for projects at 
                airports that are otherwise eligible for 
                funding under that paragraph. The Secretary 
                shall prioritize the use of such amounts in the 
                territory the amount was originally apportioned 
                in.
          [(4) Use of state highway specifications.--The 
        Secretary shall use the highway specifications of a 
        State for airfield pavement construction and 
        improvement using funds made available under this 
        subsection or subsection (c)(1)(D) at nonprimary 
        airports serving aircraft that do not exceed 60,000 
        pounds gross weight if--
                  [(A) such State requests the use of such 
                specifications; and
                  [(B) the Secretary determines that--
                          [(i) safety will not be negatively 
                        affected; and
                          [(ii) the life of the pavement, with 
                        necessary maintenance and upkeep, will 
                        not be shorter than it would be if 
                        constructed using Administration 
                        standards.]
          (4) Use of state highway specifications.--
                  (A) In general.--The Secretary shall use the 
                highway specifications of a State for airfield 
                pavement construction and improvement using 
                funds made available under this subsection or 
                subsection (c)(1)(D) at nonprimary airports 
                serving aircraft that do not exceed 60,000 
                pounds gross weight if--
                          (i) such State provides notice to the 
                        Secretary that nonprimary airports in 
                        the State intend to use such highway 
                        specifications; and
                          (ii) the Secretary determines that 
                        such specifications will not negatively 
                        affect safety.
                  (B) Deadline.--The Secretary shall make a 
                determination described in subparagraph (A)(ii) 
                not later than 6 months after a State provides 
                notice to the Secretary under subparagraph 
                (A)(i).
                  (C) Extension.--If the Secretary determines 
                that the time provided under subparagraph (B) 
                is insufficient to make a determination, the 
                Secretary may extend the determination period 
                by 6 months, so long as the Secretary--
                          (i) notifies the State that provided 
                        notice pursuant to subparagraph (A)(i) 
                        of the extension; and
                          (ii) provides justification for the 
                        extension to such State.
                  (D) Additional extensions.--The Secretary may 
                authorize additional extensions under 
                subparagraph (C).
          (5) Integrated airport system planning.--
        Notwithstanding any other provision of this section, 
        funds made available under this subsection or 
        subsection (c)(1)(D) may be used for integrated airport 
        system planning that encompasses one or more primary 
        airports.
          (6) Eligibility to receive primary airport minimum 
        apportionment amount.--Notwithstanding any other 
        provision of this subsection, the Secretary may 
        apportion to an airport sponsor in a fiscal year an 
        amount equal to the minimum apportionment available 
        under subsection (c)(1)(B) if the Secretary finds that 
        the airport--
                  (A) received scheduled or unscheduled air 
                service from a large certificated air carrier 
                (as defined in part 241 of title 14, Code of 
                Federal Regulations, or such other regulations 
                as may be issued by the Secretary under the 
                authority of section 41709) in the calendar 
                year used to calculate the apportionment; and
                  (B) had more than 10,000 passenger boardings 
                in the calendar year used to calculate the 
                apportionment.
  (e) Supplemental Apportionment for Alaska.--
          (1) In general.--Notwithstanding subsections (c) and 
        (d) of this section, the Secretary may apportion 
        amounts for airports in Alaska in the way in which 
        amounts were apportioned in the fiscal year ending 
        September 30, 1980, under section 15(a) of the Act. 
        However, in apportioning amounts for a fiscal year 
        under this subsection, the Secretary shall apportion--
                  (A) for each primary airport at least as much 
                as would be apportioned for the airport under 
                subsection (c)(1) of this section; and
                  (B) a total amount at least equal to the 
                minimum amount required to be apportioned to 
                airports in Alaska in the fiscal year ending 
                September 30, 1980, under section 15(a)(3)(A) 
                of the Act.
          (2) Authority for discretionary grants.--This 
        subsection does not prohibit the Secretary from making 
        project grants for airports in Alaska from the 
        discretionary fund under section 47115 of this title.
          (3) Airports eligible for funds.--An amount 
        apportioned under this subsection may be used for any 
        public airport in Alaska.
          (4) Special rule.--In any fiscal year in which the 
        total amount made available under section 48103 is 
        $3,200,000,000 or more, the amount that may be 
        apportioned for airports in Alaska under paragraph (1) 
        shall be increased by doubling the amount that would 
        otherwise be apportioned.
  (f) Reducing Apportionments.--
          (1) In general.--Subject to paragraph (3), an amount 
        that would be apportioned under this section (except 
        subsection (c)(2)) in a fiscal year to the sponsor of a 
        medium or large hub airport for which a charge is 
        imposed in the fiscal year under section 40117 of this 
        title shall be reduced by an amount equal to--
                  (A) in the case of a charge of $3.00 or 
                less--
                          (i) except as provided in clause 
                        (ii), 40 percent of the projected 
                        revenues from the charge in the fiscal 
                        year but not by more than 40 percent of 
                        the amount that otherwise would be 
                        apportioned under this section; or
                          (ii) with respect to an airport in 
                        Hawaii, 40 percent of the projected 
                        revenues from the charge in the fiscal 
                        year but not by more than 40 percent of 
                        the excess of--
                                  (I) the amount that otherwise 
                                would be apportioned under this 
                                section; over
                                  (II) the amount equal to the 
                                amount specified in subclause 
                                (I) multiplied by the 
                                percentage of the total 
                                passenger boardings at the 
                                applicable airport that are 
                                comprised of interisland 
                                passengers; and
                  (B) in the case of a charge of more than 
                $3.00--
                          (i) except as provided in clause 
                        (ii), 60 percent of the projected 
                        revenues from the charge in the fiscal 
                        year but not by more than 60 percent of 
                        the amount that otherwise would be 
                        apportioned under this section; or
                          (ii) with respect to an airport in 
                        Hawaii, 60 percent of the projected 
                        revenues from the charge in the fiscal 
                        year but not by more than 60 percent of 
                        the excess of--
                                  (I) the amount that otherwise 
                                would be apportioned under this 
                                section; over
                                  (II) the amount equal to the 
                                amount specified in subclause 
                                (I) multiplied by the 
                                percentage of the total 
                                passenger boardings at the 
                                applicable airport that are 
                                comprised of interisland 
                                passengers.
          (2) Effective date of reduction.--
                  (A) New charge collection.--A reduction in an 
                apportionment under paragraph (1) shall not 
                take effect until the first fiscal year 
                following the year in which the collection of 
                the charge imposed under section 40117 has 
                begun.
                  (B) New categorization.--A reduction in an 
                apportionment under paragraph (1) shall only be 
                applied to an airport if such airport has been 
                designated as a medium or large hub airport for 
                3 consecutive years.
  (g) Supplemental Apportionment for Puerto Rico and United 
States Territories.--The Secretary shall apportion amounts for 
airports in Puerto Rico and all other United States territories 
in accordance with this section. This subsection does not 
prohibit the Secretary from making project grants for airports 
in Puerto Rico or other United States territories from the 
discretionary fund under section 47115.

           *       *       *       *       *       *       *


                                  [all]