for projects to replace baggage conveyer systems related to aviation security;

for projects to reconfigure terminal baggage areas as needed to install explosive detection systems;

for projects to enable the Administrator of the Transportation Security Administration to deploy explosive detection systems behind the ticket counter, in the baggage sorting area, or in line with the baggage handling system; and

for other airport security capital improvement projects.

The Administrator of the Transportation Security Administration shall issue a letter of intent to a sponsor committing to obligate from future budget authority an amount, not more than the Federal Government’s share of the project’s cost, for an airport security improvement project (including interest costs and costs of formulating the project).

A letter of intent under this subsection shall establish a schedule under which the Administrator of the Transportation Security Administration will reimburse the sponsor for the Government’s share of the project’s costs, as amounts become available, if the sponsor, after the Administrator of the Transportation Security Administration issues the letter, carries out the project without receiving amounts under this section.

A sponsor that has been issued a letter of intent under this subsection shall notify the Administrator of the Transportation Security Administration of the sponsor’s intent to carry out a project before the project begins.

The Administrator of the Transportation Security Administration shall transmit to the Committees on Appropriations and Transportation and Infrastructure of the House of Representatives and the Committees on Appropriations and Commerce, Science 1 and Transportation of the Senate a written notification at least 3 days before the issuance of a letter of intent under this section.

A letter of intent issued under this subsection is not an obligation of the Government under section 1501 of title 31, and the letter is not deemed to be an administrative commitment for financing. An obligation or administrative commitment may be made only as amounts are provided in authorization and appropriations laws.

Nothing in this subsection shall be construed to prohibit the obligation of amounts pursuant to a letter of intent under this subsection in the same fiscal year as the letter of intent is issued.

There is established within the Department of Homeland Security a fund to be known as the Aviation Security Capital Fund. The first $250,000,000 derived from fees received under section 44940(a)(1) in each of fiscal years 2004 through 2028 shall be available to be deposited in the Fund. The Administrator of the Transportation Security Administration shall impose the fee authorized by section 44940(a)(1) so as to collect at least $250,000,000 in each of such fiscal years for deposit into the Fund. Amounts in the Fund shall be available to the Administrator of the Transportation Security Administration to make grants under this section.

Of the amount made available under paragraph (1) for a fiscal year, not less than $200,000,000 shall be allocated to fulfill letters of intent issued under subsection (d).

Of the amount made available under paragraph (1) for a fiscal year, up to $50,000,000 shall be used to make discretionary grants, including other transaction agreements for airport security improvement projects, with priority given to small hub airports and nonhub airports.