WASHINGTON, May 7 (Reuters) -

U.S. House and Senate negotiators have agreed to revise

language in an aviation reform bill to ensure quick refunds for

airline passengers whose flights are canceled and who are not

seeking alternative flights.

On April 24, the U.S. Transportation Department finalized

new rules that will later this year require automatic cash

refunds for canceled flights when passengers choose not to take

a new flight. A bipartisan proposal in Congress released last

week said passengers must request the refunds. This raised

concerns the law could undercut USDOT rule that would ensure

people who bought non-refundable tickets got reimbursed for

canceled flights.

Instead, refunds would be automatic in many instances under

revised language seen by Reuters. But the automatic refunds

would not apply if passengers rebooked and accepted a new

flight.

U.S. senators hope the revised bill will win approval before

a Friday deadline to reauthorize the Federal Aviation

Administration for five years.

An aide to Senate Commerce Committee chair Maria Cantwell

said the new language "reaffirms a passenger's right to a refund

in law, provides additional clarity for consumers, while

maintaining strong bipartisan support needed for the

legislation."

An spokesperson for Senator Ted Cruz, the panel's top

Republican, said he and Cantwell had agreed to add a "clarifying

point affirming the right of consumers to get a refund if that

is their preference."

Senators Elizabeth Warren and Josh Hawley had proposed an

amendment to make the refunds automatic and "crack down on

burdensome corporate processes put in place to maximize

airlines' profits." The new provision is similar to what Warren

and Hawley had sought in their amendment.

Neither the rule nor the legislation mandates compensation

for delays -- as is required for some lengthy waits in the

European Union. President Joe Biden said last May that the

Transportation Department would propose new rules requiring

airlines to compensate passengers with cash for significant

controllable flight delays or cancellations.

The nearly 1,100-page $105 billion bill would also boost air

traffic controller staffing and hike funding to avert runway

close-call incidents. But it does not include a House-passed

provision to raise the airline pilot retirement age to 67 from

65.

The bill prohibits airlines from charging fees for families

to sit together, adds five daily roundtrip flights at busy

Washington National Airport and requires airlines to accept

vouchers and credits for at least five years.

The bill also requires airplanes to be equipped with 25-hour

cockpit recording devices, directs the FAA to deploy advanced

airport surface technology to help prevent collisions and

requires USDOT to post a dashboard on minimum size by airline.