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UPDATE 1-U.S. House approves bill to extend FAA, hurricane tax relief

(Adds details of bill, adds details of Senate approving different version)

WASHINGTON, Sept 28 (Reuters) - The U.S. House of Representatives on Thursday voted to approve a bill to allow the Federal Aviation Administration to continue to operate and a package of tax relief bills to aid hurricane victims.

Authorization for the FAA is set to expire on Saturday, the end of the budget year. The bill will extend the agency for another six months as Congress debates whether to privatize the countrys air traffic control system and considers new airline passenger protections.

The bill also extends three healthcare programs, but would not extend a childrens healthcare program and Community Health Centers that are set to expire on Saturday. It also has some flood relief provisions to which some Democrats objected.

The U.S. Senate passed a similar version of the bill unanimously Thursday that did not have flood insurance provisions. Now the House must decide whether to adopt the Senate version.

If the House and Senate fail to agree on a bill, then the FAA would not have the authorization to operate starting Saturday, which marks the beginning of the new budget year.

President Donald Trump in March proposed handing over control of U.S. air traffic control to a privately-operated board, but has faced resistance among many in Congress and owners of private planes.

Major U.S. carriers, including American Airlines Group Inc , United Airlines Inc, Southwest Airlines Co and JetBlue Airways Inc, all back the privatization proposal.

Senator Jerry Moran, a Kansas Republican, said Thursday the privatization proposal will not pass when the issue comes up next year.

Republicans argued the flood insurance provisions would open the market to lower-cost private insurance plans, but Democrats said it would leave the government program with nearly $25 billion in debt and allow private insurers to focus on lower-risk policies.

The bill would make it easier for people with hurricane losses to write them off on their taxes, eliminating a requirement that personal losses must exceed 10 percent of adjusted gross income to qualify for a deduction.

It would also give hurricane victims penalty-free access to retirement funds and temporarily suspends limitations on the deduction for charitable contributions to hurricane relief made before year-end.

The bill provides a tax credit for 40 percent of wages, up to $6,000 per employee, paid by a disaster-affected employer in certain disaster area. (Reporting by David Shepardson; Editing by Chizu Nomiyama and Diane Craft)