Passenger Rail Investment Reform Act

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3211 Introduced in House (IH)]

108th CONGRESS
1st Session
H. R. 3211

To amend title 49, United States Code, to provide for stable,
productive, and efficient passenger rail service in the United States,
and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

September 30, 2003

Mr. Young of Alaska (for himself and Mr. Oberstar) (both by request)
introduced the following bill; which was referred to the Committee on
Transportation and Infrastructure

_______________________________________________________________________

A BILL

To amend title 49, United States Code, to provide for stable,
productive, and efficient passenger rail service in the United States,
and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Passenger Rail
Investment Reform Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes; definitions.
TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

Sec. 101. Board of directors of Amtrak.
Sec. 102. Passenger rail service restructuring.
Sec. 103. Northeast Corridor Compact.
Sec. 104. Assistance to address capital needs.
Sec. 105. Employee transition assistance; authorization.
Sec. 106. Limit on operating assistance for long-distance routes.
Sec. 107. Repeal of obsolete and executed provisions of law; other.
TITLE II--FINANCIAL REFORMS

Sec. 201. Limitations on availability of grants.
Sec. 202. Spending plans for capital backlog reduction.
Sec. 203. Redemption of common stock.
Sec. 204. Retirement of preferred stock; transfer of assets.
Sec. 205. Real estate and asset sales; other.
Sec. 206. Management and transfer of secured debt.
Sec. 207. Transition assistance.
TITLE III--GRANTS AND OTHER ASSISTANCE FOR INTERCITY PASSENGER RAIL
SERVICE

Sec. 301. Capital assistance for intercity passenger rail service.
Sec. 302. Final regulations on applications by States for development
grants.
Sec. 303. Authority for interstate compacts for corridor development.

SEC. 2. PURPOSES; DEFINITIONS.

(a) Purposes.--The purposes of this Act are to--
(1) preserve an intercity passenger rail service system in
the United States that is driven by sound economics;
(2) provide a transition from the existing structure for
providing such service to a structure that is more aligned with
existing and emerging transportation needs;
(3) develop a system that provides high quality passenger
rail service at a reasonable cost;
(4) establish a long-term partnership among the states and
the Federal Government to support intercity passenger rail
service; and
(5) create an effective public-private partnership, after a
reasonable transition, to manage the capital assets of the
Northeast Corridor.
(b) Definitions.--In this Act--
(1) the term ``Year One'' means the next Federal fiscal
year to begin after the date of enactment of this Act, except
that the term means the current Federal fiscal year if the date
of enactment of the Act is within 60 days of the first day of
the current Federal fiscal year; and
(2) the terms ``Year Two'', ``Year Three'', ``Year Four'',
``Year Five'', and ``Year Six'' mean, respectively, the Federal
fiscal year that follows Year One by one, two, three, four, and
five years, respectively.

TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

SEC. 101. BOARD OF DIRECTORS OF AMTRAK.

Section 24302 of title 49, United States Code, is amended to read
as follows:
``Sec. 24302. Board of Directors
``(a) Membership.--(1) The Transition Board of Directors of Amtrak
shall consist of 11 voting members, including--
``(A) the Secretary of Transportation, or an officer of the
United States within the Department of Transportation
compensated under the Executive Schedule under title 5, United
States Code, who is designated by the Secretary (hereafter in
this section the `Secretary's delegate'); and
``(B) 10 other members appointed by the President, by and
with the advice and consent of the Senate.
``(2) The President of Amtrak shall serve as an ex officio,
nonvoting member of the Board of Directors.
``(b) Compensation.--Each member of the Board of Directors shall
not be compensated for service as such member, but shall receive with
respect to such service travel expenses, including per diem in lieu of
subsistence, in accordance with sections 5702 and 5703 of title 5.
``(c) Term of Office.--Members serving unexpired terms on the date
of enactment of this section may continue to serve until the earlier of
the expiration of their terms or the date on which the restructuring
mandated under section 24310 of this title is implemented. Members
appointed by the President under subsection (a)(1)(B) shall serve for a
term that expires on the date the restructuring mandated in section
24310 of this title is implemented. At the expiration of their terms,
members of the Board shall be eligible to serve as members of the
boards of successor corporations to Amtrak.
``(d) Quorum.--At any time after the date of enactment of this
section, a majority of the Board members who have been lawfully
appointed shall constitute a quorum for purposes of conducting Board
meetings and making all necessary decisions regarding the operations,
structure, and business affairs of Amtrak.
``(e) Transition Committee.--(1) The Board of Directors shall form
an Asset Transition Committee comprised of the Secretary, or the
Secretary's delegate, and two other members, or one other member if two
other members are not lawfully appointed.
``(2) In addition to other powers and duties assigned by the Board,
the Asset Transition Committee has the duty to ensure that the public
interest is served in Board decisions and Amtrak management actions
that change the use of or status of--
``(A) the contractual right of access of Amtrak to rail
lines of other railroads;
``(B) Amtrak secured debt;
``(C) Northeast Corridor real property and assets; and
``(D) rolling stock.
``(3) The Board may not take an action with regard to the assets or
secured debt specified in paragraph (2), or permit an Amtrak management
action with regard to those assets, that is not approved by the Asset
Transition Committee.
``(f) Modification of Board After Restructuring.--(1) Upon the
commencement of operations of the Passenger Rail Service Provider and
the Passenger Rail Infrastructure Manager under section 24310 of this
title, the Board of Directors of Amtrak shall consist of--
``(A) the Secretary of Transportation;
``(B) the Federal Railroad Administrator or another officer
of the United States within the Department of Transportation
compensated under the Executive Schedule under title 5, United
States Code, who is designated by the Secretary; and
``(C) the Federal Transit Administrator or another officer
of the United States within the Department of Transportation
compensated under the Executive Schedule under title 5, United
States Code, who is designated by the Secretary.
``(2) Upon the designation of directors by the Secretary under
paragraph (1), and with the exception of the Secretary of
Transportation, the members of the Transition Board of Directors shall
no longer serve as appointees of the President to the Amtrak Board of
Directors, but shall instead become members of the Board of Directors
of the entities referred to in Federal law as the Passenger Rail
Service Provider or the Passenger Rail Infrastructure Manager.''.

SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

(a) In General.--Title 49, United States Code, is amended by
inserting the following after section 24309:
``Sec. 24310. Amtrak restructuring mandate
``(a) In General.--Within 6 months after Year One begins, and
notwithstanding any other provision of this title, the Board of
Directors shall prepare a plan to restructure Amtrak management,
personnel, assets, operations, and other activities and relationships
to conform to the requirements of this section. The Board shall
transmit the completed plan to the Committee on Commerce, Science, and
Transportation of the Senate, the Committee on Transportation and
Infrastructure of the House of Representatives, and the Committees on
Appropriations of the House of Representatives and Senate.
``(b) Minimum Requirements.--At a minimum, the restructuring plan
required under this section shall provide for the following:
``(1) The filing of appropriate Articles of Incorporation
under State law for two business corporations that are entirely
independent of Amtrak, hereinafter referred to as the
`Passenger Rail Service Provider' and the `Passenger Rail
Infrastructure Manager' or collectively the `successor
corporations'.
``(2) The division of Amtrak into three functionally
independent entities that provide the following:
``(A) A corporation, hereinafter referred to as
`Amtrak', that shall provide overall supervision of
Amtrak restructuring and subsequent management of
residual responsibilities, including succeeding to the
legal rights of the National Railroad Passenger
Corporation, and including specifically Amtrak's legal
right of access to other railroads, following transfer
of rail operations and infrastructure management to the
successor corporations established under paragraph (1).
``(B) Passenger rail operating services nationwide,
including operation of the reservation centers and
ownership and management of existing rolling stock and
its maintenance.
``(C) Passenger rail infrastructure management.
``(3) The assignment of all Amtrak personnel by name to one
of the entities specified in paragraph (2), with no loss of pay
or benefits, including seniority rights to employment within
any entity, except that an employee who elects employment with
the entity specified by paragraph (2)(A) shall become an
employee of the corporation, with only such rights regarding
pay and benefits as the corporation shall determine.
``(4) The division of accounting, finance, budget, assets,
and personnel to provide for the operation and funding of each
entity independently.
``(5) A transition schedule that provides for completion of
the restructuring not later than the last day of Year One.
``(c) Successor Corporations.--(1) Consistent with the business
corporation law of the State of incorporation of the successor
corporations specified by subsection (b)(1) of this section, each of
the successor corporations shall be qualified to undertake railroad
activities of an operational or infrastructure nature on a contractual
basis with Amtrak or any other entity.
``(2) The Passenger Rail Service Provider--
``(A) shall have the exclusive right, until the last day of
Year Three, to continue to provide the intercity passenger
service that is being provided by Amtrak on the date of
enactment of the Passenger Rail Investment Reform Act, but
after the last day of Year One, may operate such passenger rail
service only under a contract; and
``(B) shall provide interline reservations services to any
other provider of intercity passenger rail services on the same
basis and rates as services are provided to the operational
entities that provide service within Amtrak on the date of
enactment.
``(3) The Passenger Rail Infrastructure Manager--
``(A) shall have the exclusive right, until the last day of
Year Six, to continue to provide the dispatching, maintenance,
and infrastructure services that are being provided by Amtrak
on the date of enactment of the Passenger Rail Investment
Reform Act, but after the last day of Year One, may provide
these services only under a contract; and
``(B) shall carry out the multiyear infrastructure plan
prepared by Amtrak, to the extent funds are made available.
``(4)(A) The successor corporations are not a department, agency,
or instrumentality of the United States Government nor are they
Government corporations (as defined in section 103 of title 5).
``(B) Chapter 105 of this title does not apply to the successor
corporations. However, laws and regulations governing safety, employee
representation for collective bargaining purposes, the handling of
disputes between carriers and employees, employee retirement, annuity,
and unemployment systems, and other dealings with employees that apply
to a rail carrier providing transportation subject to subchapter I of
chapter 105 apply to the successor corporations. The employee
retirement, annuity, and unemployment systems that apply to a rail
carrier providing transportation subject to subchapter I of chapter 105
apply to the entity specified by subsection (b)(2)(A) of this section.
``(C) Subsections (c) through (l) of section 24301 of this title
shall apply to the successor corporations.
``(5) Subject to further action by the Board of Directors, the
President of Amtrak on the date of enactment of the Passenger Rail
Investment Reform Act shall be offered the position of Chief Executive
Officer of the Passenger Rail Service Provider.
``(6) The contractual rights of successor corporations to provide
services may not be extended beyond the dates set forth in subsections
(c)(2) and (c)(3), as applicable, without competitive bid.
``(7) The Passenger Rail Service Provider shall provide to the
Secretary of Transportation not later than 18 months after the
enactment of the Passenger Rail Investment Reform Act, recommendations
on the feasibility, advantages, and disadvantages of separation of the
reservation centers into a free-standing entity that can become an
element of an intermodal reservations service.
``(8) The functionally independent entity specified by subsection
(b)(2)(A) shall retain all legal rights pertaining to the name
`Amtrak', and may, at its option, license or otherwise make the name
`Amtrak' commercially available in connection with intercity passenger
rail and related services.
``(d) Rolling Stock and Shops.--(1) With respect to any route on
which intercity passenger rail service is provided on the date of
enactment of the Passenger Rail Investment Reform Act, the Passenger
Rail Service Provider shall make available to any replacement operator
the legacy equipment that is associated with the service on the route.
``(2) Such equipment and services shall be made available on such
terms as Amtrak determines are fair, reasonable, and in the public
interest.
``(e) Freight and Commuter Operations.--(1) Amtrak shall ensure
that the implementation of the restructuring prescribed in this section
gives due consideration to the needs of freight and commuter rail
operations that, as of the effective date of the Passenger Rail
Investment Reform Act, operate in the Northeast Corridor on Amtrak
right of way.
``(2) Notwithstanding paragraph (1), commuter services
headquartered in a State or Commonwealth that is not a member of the
Northeast Corridor Compact after the last day of Year Two shall pay the
fully allocated costs incurred by the successor corporation or any
successor entity for access to and use of the Northeast Corridor for
such services.
``(3) The right of access by Amtrak to rail lines owned by other
carriers is, as of the effective date of the Passenger Rail Investment
Reform Act, restricted as follows:
``(A) The terms and conditions for operation of an
intercity passenger rail route or frequency to be added after
the date of enactment of the Passenger Rail Investment Reform
Act shall be determined by negotiation and mutual agreement
between the host railroad and the operator of the route or
frequency sought to be added, with no preferential right of
access.
``(B) If not utilized by Amtrak, Amtrak's right of access
to any segment of rail line owned by another rail carrier may
be assigned to no more than one intercity passenger rail
operator during the term of the assignment, except by agreement
among Amtrak, its assignee, and the owner of the rail line.''.
(b) Conforming Amendments.--(1) The analysis of chapter 243 of
title 49, United States Code, is amended by inserting the following
after the item relating to section 24309:

``24310. Amtrak restructuring mandate.''.
(2) Section 24102 (Definitions) of title 49, United States Code, is
amended--
(A) by inserting the following after section 24102(5):
``(5a) `legacy equipment' means the rolling stock required
to provide intercity passenger rail service owned or leased by
the National Railroad Passenger Corporation on the date of
enactment of this chapter.''; and
(B) by inserting the following at the end:
``(10) `Year One' means the next Federal fiscal year to
begin after the date of enactment of the Passenger Rail
Investment Reform Act, except that the term means the current
Federal fiscal year if the date of enactment of the Act is
within 60 days of the first day of the current Federal fiscal
year.
``(11) `Year Two', `Year Three', `Year Four', `Year Five',
and `Year Six' mean, respectively, the Federal fiscal year that
follows year one by one, two, three, four, and five years,
respectively.''.

SEC. 103. NORTHEAST CORRIDOR COMPACT.

(a) Consent to Compact.--(1) The States and District that
constitute the Northeast Corridor, as defined in section 24102 of title
49, United States Code, may enter into an agreement, not in conflict
with a law of the United States and titled the ``Northeast Corridor
Compact'', to provide passenger rail service and to conduct related
activities in the Northeast Corridor.
(2) The Northeast Corridor Compact shall be submitted to Congress
for its consent, and it is the sense of Congress that rapid consent to
the Compact shall be a priority of Congress.
(b) Compact Commission.--(1) There is hereby established a
commission to be known as the Northeast Corridor Compact Commission
(hereinafter referred to in this section as the ``Commission''). The
Commission shall be composed of five members as follows:
(A) Two members (or their designees), to be selected by the
Secretary of Transportation.
(B) Two members (or their designees), to be selected by
agreement of the following government representatives:
(i) The governors of Maryland, Delaware,
Pennsylvania, New Jersey, New York, Connecticut, Rhode
Island, and Massachusetts.
(ii) The mayor of the District of Columbia.
(C) One member to be selected by the four members selected
under subparagraphs (A) and (B) of this paragraph.
(2) The following applies to the Commission:
(A) Members shall be appointed for the life of the
Commission.
(B) A vacancy in the Commission shall be filled in the
manner in which the original appointment was made.
(C) Members 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.
(D) The Chairman of the Commission shall be elected by the
members.
(E) The Commission may appoint and fix the pay of such
personnel as it considers appropriate.
(F) Upon request of the Commission, 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 Commission to assist it in carrying out its
duties under this section.
(G) Upon the request of the Commission, the Administrator
of General Services shall provide to the Commission, on a
reimbursable basis, the administrative support services
necessary for the Commission to carry out its responsibilities
under this section.
(c) Functions.--(1) The Commission shall prepare for the
consideration of and adoption by participating States, the District of
Columbia, and the Secretary of Transportation an interstate compact
that provides for the following:
(A) Full authority for 99 years to succeed to the
responsibilities of the National Railroad Passenger Corporation
as operator of the Northeast Corridor, subject to the
provisions of a lease from the Department of Transportation.
(B) Execution of a lease of the Northeast Corridor from the
Department of Transportation, for a period of 99 years, subject
to appropriate provisions protecting the lessor's interests,
including reversion of all lease interests to the lessor in the
event the lessee fails to meet its financial obligations or
otherwise assume financial responsibility for Northeast
Corridor functions.
(C) Responsibility for Corridor maintenance and
improvement.
(D) Operation of intercity passenger rail service.
(E) Arrangements for operation of freight railroad
operations and commuter operations.
(F) Assumption of financial responsibility for Northeast
Corridor functions.
(G) Authority to make use of the Corridor for nonrail
purposes.
(H) Participation by the Department of Transportation, as
the nonvoting representative of the United States.
(2) The compact terms shall, at a minimum, conform to the
requirements of subsections (e) through (i) of this section.
(d) Final Compact Proposal.--(1) The Commission shall submit a
final compact proposal to member States, the District of Columbia, and
the Federal Government not later than the last day of Year One.
(2) The Commission shall terminate on the 180th day following the
date of transmittal of the final compact proposal under this
subsection. All records and papers of the Commission shall thereupon be
delivered by the Administrator of General Services for deposit in the
National Archives.
(e) Governance and Funding Requirements for Compact.--(1) The
governance provisions of the compact shall provide a mechanism to
ensure voting representation for the States, Commonwealths, and
District that comprise the Northeast Corridor, and non-voting
representation for the Secretary of Transportation as an ex officio
member participating in all Compact affairs.
(2) The provisions of the compact shall establish the financial
obligations of each compact member and shall provide for its management
of rail services in the Corridors.
(f) Employee Interest Requirements for Compact.--The employee
provisions of the compact shall, at a minimum, provide the following
with regard to employees in the Northeast Corridor if the Compact
chooses to replace the successor corporations for operation and
maintenance of the physical plant or operation of passenger trains, or
both:
(1) Payment of any labor protection payments owed and not
paid by the successor corporations established under section
24310(b) of title 49, United States Code.
(2) In the case of an employee who is employed by the
National Railroad Passenger Corporation on the date of
enactment of the Passenger Rail Investment Reform Act and who
accepts employment by a successor corporation, a right of first
refusal to accept a substantially similar position with the
replacement operator when the successor corporation is
replaced.
(g) Federal Interest Requirements for Compact.--The provisions of
the Compact shall hold the United States Government harmless as to the
actions of the Compact under the lease of rights to the Northeast
Corridor by the United States Government.
(h) Compact Borrowing Authority.--(1) The borrowing authority
provisions of the compact may authorize the compact to issue bonds or
other debt instruments from time to time in its discretion, for
purposes that include paying any part of the cost of rail service
improvements, construction, and rehabilitation and the acquisition of
real and personal property, including operating equipment, except that
debt issued by the compact may be secured only by revenues to the
compact and may not be a debt of the member States or of the Federal
Government.
(2) The debt authorized by this subsection shall under no
circumstances be backed by the full faith and credit of the United
States, and a grant made under the authority of this Act or under the
authority of part C of subtitle V of title 49, United States Code,
shall include an express acknowledgement by the grantee that the debt
does not constitute an obligation of the United States.
(i) Adoption of Compact; Turnover.--(1) The members shall adopt a
final compact agreement not later than the last day of Year Two, and
the compact shall thereafter assume responsibility for all Corridor
operations from the successor corporations on a date that is not later
than 8 months following adoption of the compact, which date shall be
known as the ``NEC turnover date.''
(2) In the event that the members do not adopt the final compact
agreement and make it operational under the schedule set forth in this
section, the Secretary of Transportation shall assume control of the
entity specified by section 24310(b)(2)(A) of title 49, United States
Code, and shall make such legislative recommendations as the President
judges necessary and expedient to Congress that address the monetary
contributions by Northeast Corridor States and the District of Columbia
that would be necessary to provide continued intercity passenger rail
service in the Northeast Corridor.
(j) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out the purposes of
this section.

SEC. 104. ASSISTANCE TO ADDRESS CAPITAL NEEDS.

(a) In General.--There are authorized to be appropriated to the
Secretary of Transportation, for capital expenditures in compliance
with capital spending plans developed under section 202 of this Act,
including the Secretary's expenses related thereto, the following
amounts:
(1) such sums as may be necessary for Year Three.
(2) such sums as may be necessary for Year Four.
(3) such sums as may be necessary for Year Five.
(4) such sums as may be necessary for Year Six.
(b) Obligation Options.--(1) Subject to paragraph (2), the
Secretary may obligate the funds authorized by this section through
grants to or cooperative agreements with States, the Passenger Rail
Service Provider, the Northeast Corridor Compact or another qualified
Compact, or through contracts with private companies.
(2) Funds appropriated under this section shall not be obligated
and not be disbursed from the Treasury for the Northeast Corridor
Compact until it has been established and is empowered and qualified to
enter into contracts for the expenditure of the funds.
(c) Eligibility of Expenditures.--(1) The Federal share of
expenditures for capital improvements under this section may be not
more than 100 percent and is solely authorized for the purpose of
funding deferred maintenance, safety, and security projects.
Expenditures for capacity expansion are not authorized by this section.
(2) Funds appropriated under this section may be obligated for an
expenditure only if the Secretary has determined in writing that the
expenditure on any railroad infrastructure investments is limited to a
route or routes with a useful life of at least 5 years.

SEC. 105. EMPLOYEE TRANSITION ASSISTANCE; AUTHORIZATION.

(a) Provision of Financial Incentives.--To facilitate the
restructuring required by this title, the Secretary is authorized to
develop a program under which the Secretary may, in the Secretary's
discretion, provide grants for financial incentives to be provided to
employees of the National Railroad Passenger Corporation who
voluntarily terminate their employment with the Corporation or the
successor corporations and relinquish any legal rights to receive
termination-related payments under any contractual agreement with the
Corporation or the successor corporations.
(b) Conditions for Financial Incentives.--As a condition for
receiving financial assistance grants under this section, the
Corporation or the successor corporations must certify that--
(1) the financial assistance results in a net reduction in
the total number of employees equal to the number receiving
financial incentives;
(2) the financial assistance results in a net reduction in
total employment expense equivalent to the total employment
expenses associated with the employees receiving financial incentives;
and
(3) the total number of employees eligible for termination-
related payments will not be increased without the express
written consent of the Secretary.
(c) Amount of Financial Incentives.--The financial incentives
authorized under this section may be no greater than $50,000 per
employee.
(d) Authorization of Appropriations.--There are hereby authorized
to be appropriated to the Secretary of Transportation such sums as may
be necessary to make grants to the National Railroad Passenger
Corporation or the successor corporation to fund termination-related
payments to employees under existing contractual agreements until four
years from the first day of Year One.

SEC. 106. LIMIT ON OPERATING ASSISTANCE FOR LONG-DISTANCE ROUTES.

(a) In General.--Title 49, United States Code, is amended by
inserting the following after section 24315:
``Sec. 24316. Limit on operating assistance for long-distance routes
``(a) General Authority.--(1) After the last day of Year One, the
Secretary of Transportation may make grants for operating assistance
under the authority of this section, and not under any other provision
of law, to reimburse operators of long-distance routes, as defined in
section 24102, and corridor feeder routes for the operating expenses
incurred in operating those routes to provide intercity passenger rail
transportation.
``(2) The Secretary shall require that a grant under this section
be subject to the terms, conditions, requirements, and provisions the
Secretary decides are necessary or appropriate for the purposes of this
section, including the definition of eligible expenses and the
documentation of eligible operating losses on a quarterly basis.
``(b) Federal Share of Operating Expenses.--(1) No funds
appropriated under this part shall be used to fund operating expenses
of a long-distance route after the last day of Year One, except as
provided in paragraph (2) of this subsection.
``(2) Funds appropriated under this section may be used to
reimburse the operator of a long-distance route or a corridor feeder
route for operating expenses on that route provided that amounts
reimbursed do not exceed the operating losses on the route and do not
constitute a reimbursement per-passenger mile greater than--
``(A) $0.40 during Year Two;
``(B) $0.20 during Year Three;
``(C) $0.10 during Year Four; and
``(D) $0.00 for each year thereafter.
``(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as may be necessary to carry
out this section, including the Secretary's expenses related
thereto.''.
(b) Conforming Amendments.--(1) The analysis of chapter 243 of
title 49, United States Code, is amended by inserting the following
after the item relating to section 24315:

``24316. Limit on operating assistance for long-distance routes.''.
(2) Section 24102 (Definitions) of title 49, United States Code, is
amended--
(A) by inserting the following after section 24102(4):
``(4a) `corridor feeder route' means a portion of a long
distance train or route that provides services between regional
corridors by connecting to endpoints of the corridors.''; and
(B) by inserting the following after section 24102(5a), as
added by this Act:
``(5b) `long distance train' or `long distance route' means
one of or a portion of the following trains or routes operated
by the National Railroad Passenger Corporation on the date of
enactment of this section: the Silver Star, the Three Rivers,
the Cardinal, the Silver Meteor, the Empire Builder, the
Capitol Limited, the California Zephyr, the Southwest Chief,
the City of New Orleans, the Texas Eagle, the Sunset Limited,
the Coast Starlight, the Lake Shore Limited, the Palmetto, the
Crescent, the Pennsylvanian, and the Auto Train.''.

SEC. 107. REPEAL OF OBSOLETE AND EXECUTED PROVISIONS OF LAW; OTHER.

(a) In General.--Title 49, United States Code, is amended by repeal
of the following sections:
(1) Section 24701 (Operation of basic system).
(2) Section 24706 (Discontinuance).
(3) Section 24901 (Definitions).
(4) Section 24902 (Goals and Requirements).
(5) Section 24904 (General Authority).
(6) Section 24906 (Eliminating highway at-grade crossings).
(7) Section 24909 (Authorization of appropriations).
(b) Revisions to Section 24305.--(1) Section 24305 (a) is amended
by striking paragraph (2) and renumbering paragraph (3) as paragraph
(2).
(2) Section 24305(b) is amended by striking paragraph (4) and
renumbering paragraph (5) as paragraph (4) and paragraph (6) as
paragraph (5).
(3) Subsection 24305(f)(2) is amended by inserting before the word
``Amtrak'', the following ``With regard to items acquired with funds
provided by the Federal Government,''.
(c) Conforming Amendment.--The analysis of chapters 243, 247, and
249 are amended by deleting, as appropriate, items relating to the
following sections: 24307, 24701, 24706, 24901, 24902, 24904, 24906,
24908, and 24909.
(d) Effective Date.--The effective date of this section is the
first day of Year One.

TITLE II--FINANCIAL REFORMS

SEC. 201. LIMITATIONS ON AVAILABILITY OF GRANTS.

(a) In General.--Title 49, United States Code, is amended by
inserting the following after section 24313:
``Sec. 24314. Transitional limitations on availability of grants
``(a) Requirements Prior to Restructuring.--A grant made to the
National Railroad Passenger Corporation under the authority of part C
of subtitle V of this title between the first day of Year One, and the
establishment and commencement of operations by the successor
corporations under section 24310 of this title may only be made subject
to the following limitations:
``(1) The Secretary of Transportation shall not disburse
funding to cover operating losses on a long-distance train
route without first receiving and approving a grant request for
that specific train route.
``(2) Each such grant request shall be accompanied by a
detailed financial analysis and revenue projection justifying
the Federal support to the Secretary's satisfaction.
``(3) The Secretary of Transportation and the Board of
Directors of the Corporation shall ensure that, of the amount
made available by appropriations for capital and operating
assistance to the Corporation in a fiscal year, sufficient sums
are reserved to satisfy the contractual obligations of the
Corporation to provide commuter and intrastate passenger rail
service.
``(4) Not later than December 31 prior to each fiscal year
in which grants are made to the Corporation, the Corporation
shall transmit to the Secretary of Transportation, the
Committee on Commerce, Science, and Transportation of the
Senate, the Committee on Transportation and Infrastructure of
the House of Representatives, and the House of Representatives
and Senate Committees on Appropriations a business plan for
operating and capital improvements to be funded in the fiscal
year under section 24104(a) of title 49, United States Code.
``(5) The business plan shall include a description of the
work to be funded, along with cost estimates and an estimated
timetable for completion of the projects covered by the
business plan.
``(6) Each month of each fiscal year in which grants are
made to the Corporation, the Corporation shall submit to the
Secretary of Transportation, the Committee on Commerce,
Science, and Transportation of the Senate, the Committee on
Transportation and Infrastructure of the House of
Representatives, and the House of Representatives and Senate
Committees on Appropriations a supplemental report regarding
the business plan, which shall describe the work completed to
date, any changes to the business plan, and the reasons for
such changes.
``(7) A grant may not be used for operating expenses or
capital projects that is not approved by the Secretary of
Transportation or an element of the Corporation's current
fiscal year business plan, or that is obligated or expended
unless the Corporation certifies, as part of the grant
agreement, that it has complied with and will abide by the
following requirements:
``(A) The Corporation's management will maintain
financial controls and accounting transparency to the
satisfaction of the Secretary, including developing or
enhancing any existing capacity separately to report--
``(i) all revenue and expenses associated
with rail operations by route; and
``(ii) budgeted and actual expenditures for
all capital investments.
``(B) The Corporation's management will provide to
the Board of Directors, the Department of
Transportation and Congress its Monthly Performance
Report. The Corporation shall also make available to
the Department of Transportation the same details and
reports on its financial performance that it makes
available to Amtrak management, at the same time that
it provides those reports and details to Amtrak
management.
``(C) The Corporation shall expend funds only for
the continuation of existing plants and services. With
the exception of expenditures for which it obtains
written approval from the Department of Transportation,
The Corporation will not use of any of its funds for
actual expansion or planning for expansion of rail
service, including high speed rail service.
``(D) The Corporation has negotiated with its
employees substantial operating cost reductions needed
to make its operations competitive with private-sector
service providers.
``(b) Requirements Following Restructuring.--Any grant made
directly to either of the successor corporations under the authority of
part C of subtitle V of this title may only be made subject to the
following limitations:
``(1) The Secretary of Transportation shall not disburse
funding to cover operating losses on a long-distance train
route without first receiving and approving a grant request for
that specific train route.
``(2) Each such grant request shall be accompanied by a
detailed financial analysis and revenue projection justifying
the Federal support to the Secretary's satisfaction.
``(3) The Secretary of Transportation shall ensure that, of
the amount made available by appropriations for capital and
operating assistance in a fiscal year, sufficient sums are
reserved to satisfy the successor corporation's contractual
obligations, if any, with respect to commuter and intrastate
passenger rail service.
``(4) Not later than December 31 prior to each fiscal year
in which grants are made, the successor corporations shall each
transmit to the Secretary of Transportation a business plan for
operating and capital improvements to be funded in the fiscal
year.
``(5) The business plan shall include a description of the
work to be funded, along with cost estimates and an estimated
timetable for completion of the projects covered by the
business plan.
``(6) Each month of each fiscal year in which grants are
made, the successor corporations shall each submit to the
Secretary of Transportation a supplemental report regarding the
business plan, which shall describe the work completed to date,
any changes to the business plan, and the reasons for such
changes.
``(7) A grant may not be used for operating expenses or
capital projects that is not approved by the Secretary of
Transportation or an element of the current fiscal year
business plan, or that is obligated or expended unless the
successor corporation agrees, as part of the grant agreement,
to abide by the following requirements:
``(A) Management will maintain financial controls
and accounting transparency to the satisfaction of the
Secretary, including developing or enhancing any
existing capacity separately to report--
``(i) all revenue and expenses associated
with rail operations by route; and
``(ii) budgeted and actual expenditures for
all capital investments.
``(B) Management of each successor corporation
shall make available to the Department of
Transportation the same details and reports on its
financial performance that it makes available
internally, at the same time that it provides those
reports and details internally.
``(C) Funds will be spent only on existing plants
and services.''.
(b) Conforming Amendments.--The analysis of chapter 243 of title
49, United States Code, is amended by inserting the following after the
item relating to section 24313:

``24314. Transitional limitations on availability of grants.''.

SEC. 202. SPENDING PLANS FOR CAPITAL BACKLOG REDUCTION.

(a) In General.--Within 6 months after Year One begins, and as a
condition of grants to the National Railroad Passenger Corporation
between that date and the implementation of the restructuring required
under section 24310 of title 49, United States Code, the Corporation
shall prepare a capital spending plan that addresses capital needs,
consistent with the funding levels authorized to be provided for Year
One and each fiscal year thereafter through Year Six, for--
(1) Northeast Corridor capital assets;
(2) capital assets on long-distance routes other than on
the Northeast Corridor; and
(3) capital assets on short-distance routes other than the
Northeast Corridor.
(b) Approval by the Secretary and the Compact.--(1) The Corporation
shall submit the capital spending plan prepared under this section to
the Secretary of Transportation for review and approval. The plan shall
be implemented only after approval by the Secretary, and with any
modifications specified by the Secretary.
(2) The Secretary of Transportation shall require that the plan be
updated at least annually.
(3) On and after creation of Northeast Corridor Compact, the
Secretary shall make no grants to the Compact for Northeast Corridor
for capital investments, except in accordance with a capital spending
plan prepared by the Compact and approved by both the Compact and the
Secretary. The same requirements shall apply to grants made to States
and other Compacts under this section.

SEC. 203. REDEMPTION OF COMMON STOCK.

(a) Valuation.--The Secretary of Transportation shall arrange, at
the National Railroad Passenger Corporation's expense, for a valuation
of all assets and liabilities of the Corporation to be performed by the
Secretary of the Treasury, or by a contractor selected by the Secretary
of the Treasury. Such valuation shall be conducted in accordance with
criteria and requirements to be determined by the Secretary, in the
Secretary's discretion, and shall be completed within 6 months after
Year One begins.
(b) Redemption.--(1) Prior to the transfer of assets to the
Secretary directed by section 204 of this Act, and within 9 months
after Year One begins, the Corporation shall redeem all common stock in
the Corporation issued prior to the date of enactment of this Act at
the book value of such stock, based on the valuation performed under
subsection (a).
(2) No provision of this Act, or amendments made by this Act,
provide to the owners of the common stock a priority over holders of
indebtedness or other stock of the Corporation.
(c) Acquisition Through Eminent Domain.--In the event that the
Corporation and the owners of its common stock have not completed the
redemption of such stock by a date that is within 9 months after Year
One begins, the Corporation shall exercise the eminent domain
provisions contained in section 24311 of title 49, United States Code,
as amended by this Act, to acquire that stock. The valuation performed
under subsection (a) shall be deemed to constitute just compensation
except to the extent that the owners of the common stock demonstrate
that the valuation is less than the constitutional minimum value of the
stock.
(d) Amendment of 49 U.S.C. 24311.--Section 24311 of title 49,
United States Code, is amended--
(1) by striking ``or'' at the end of subsection (a)(1)(A);
(2) by striking the period at the end of subsection
(a)(1)(B) and substituting ``; or''; and
(3) by inserting the following after subsection (a)(1)(B):
``(C) necessary to redeem the Corporation's common stock
from any holder thereof, including a rail carrier.''.
(e) Conversion of Preferred Stock to Common.--(1) Subsequent to the
redemption of the common stock in the Corporation issued prior to the
date of enactment of this Act, the Secretary of Transportation
shall convert the one share of the preferred stock of the Corporation
retained under section 204 of this Act for ten shares of common stock
in the Corporation.
(2) The Corporation shall not issue any other common stock without
the express written consent of the Secretary.

SEC. 204. RETIREMENT OF PREFERRED STOCK; TRANSFER OF ASSETS.

(a) Transfer.--Not later than 30 days after the redemption or
acquisition specified under section 203 of this Act, the Corporation
shall, in return for the consideration specified in subsection (c),
transfer to the Secretary of Transportation title to the following
assets:
(1) The portions of the Northeast Corridor currently owned
or leased by the Corporation as well as any improvements made
to these assets. The assets transferred to the Secretary shall
include the rail right-of-way, stations, track, signal
equipment, electric traction facilities, bridges, tunnels, and
all other improvements owned by Amtrak between Boston,
Massachusetts, and Washington, District of Columbia (including
the route through Springfield, Massachusetts, and the routes to
Harrisburg, Pennsylvania, and Albany, New York, from the
Northeast Corridor mainline).
(2) Chicago Union Station and rail-related assets in the
Chicago metropolitan area.
(3) All other track and right-of-way, stations, repair
facilities and other real property owned or leased by the
Corporation.
(b) Existing Encumbrances.--(1) With regard to any assets described
in subsection (a) that the Corporation has provided as security or
collateral for a debt entered into prior to the date of enactment of
this Act, the Corporation shall transfer its underlying legal interest
in such asset to the Secretary, provided, however, that the Corporation
shall remain liable for the debt secured by the asset.
(2) The obligation of the National Railroad Passenger Corporation
to repay in full any indebtedness to the United States incurred since
January 1, 1990, is not affected by this Act or an amendment made by
this Act.
(c) Consideration.--In consideration for the assets transferred to
the United States under subsection (b), the Secretary shall--
(1) deliver to the Corporation all but one share of the
preferred stock of the Corporation held by the Secretary and
forgive the Corporation's legal obligation to pay any
dividends, including accrued but unpaid dividends as of the
date of transfer, evidenced by the preferred stock
certificates; and
(2) release the Corporation from all mortgages and liens
held by the Secretary that were in existence on January 1,
1990.
(d) Agreement.--(1) Prior to accepting title to the assets
transferred under this section, the Secretary shall enter into an
agreement with the Corporation under which the Corporation will
exercise on behalf of the Secretary care, custody, and control of the
assets to be transferred.
(2) The agreement shall identify in detail the specific functions
of the Corporation's employees and equipment, and the specific numbers
and locations of the employees and equipment associated with each
function, that would be needed for continuation of commuter and freight
rail service in the event that the Corporation were to cease operation,
and identify those actions that would be required to ensure that such
functions can be continued on an interim basis to avoid any
interruption in commuter or freight rail service on the Northeast
Corridor.
(e) Further Transfers.--(1) The Secretary may, for appropriate
consideration, transfer title to all or part of Chicago Union Station
and rail-related assets in the Chicago metropolitan area acquired under
this section to a regional public transportation agency that has
significant operations in Chicago Union Station on the date of
enactment of this Act.
(2) The Secretary may, for appropriate consideration, transfer to
the underlying states title to real estate properties owned by the
Corporation between Boston, Massachusetts, and Washington, District of
Columbia, that constitute the route through Springfield, Massachusetts,
and the routes to Harrisburg, Pennsylvania, and Albany, New York, from
the Northeast Corridor mainline.
(3) The Secretary may, for appropriate consideration, transfer
title to all or part of the assets acquired under subsection (a)(3) to
a State, a public agency, a railroad, or other entity deemed
appropriate by the Secretary.
(4) All financial consideration determined by the Secretary to be
appropriate consideration for the transfer of the assets described in
paragraphs (1) through (3) shall be used exclusively to reduce the
Corporation's long-term debt that exists on the date of enactment.

SEC. 205. REAL ESTATE AND ASSET SALES; OTHER.

(a) In General.--The Amtrak Board of Directors shall undertake and
complete not later than the last day of Year Three, the disposition of
all stations, track, and other facilities outside the Northeast
Corridor mainline, including property conveyed to the Secretary of
Transportation under section 204 of this Act.
(b) Proceeds of Liquidation.--Notwithstanding section 3302 of title
31, United States Code, any proceeds from the liquidation of assets
under this section shall--
(1) be credited as an offsetting collection to the account
that finances grants for debt and interest payments under
section 206 of this Act to the Passenger Rail Service Provider
specified under section 24310 of title 49, United States Code;
and
(2) remain available until expended.

SEC. 206. MANAGEMENT AND TRANSFER OF SECURED DEBT.

(a) New Debt Prohibition.--Except as approved by the Secretary of
Transportation to refinance existing secured debt, the Corporation
shall not enter into any obligation secured by assets of the
Corporation after the date of enactment of this Act. This section does
not prohibit unsecured lines of credit used by the Corporation or any
subsidiary for working capital purposes.
(b) Secured Debt Transfer.--(1) Upon establishment of the Passenger
Rail Service Provider specified under section 24310 of title 49, United
States Code, and the transfer of ownership of the existing rolling
stock, all debt secured by the rolling stock shall be transferred to
and become a liability solely of the Passenger Rail Service Provider.
(2) Upon establishment of the Northeast Corridor Compact under
section 103 of this Act, the secured debt associated with fixed assets
in the Northeast Corridor shall be transferred to and become a
liability solely of the Northeast Corridor Compact.
(c) Authorization.--(1) There are authorized to be appropriated to
the Secretary of Transportation for grants to the Passenger Rail
Service Provider to pay principal and interest payments on secured debt
existing on the date of enactment of this Act the following amounts:
(A) Such sums as may be necessary in Year Two.
(B) Such sums as may be necessary in Year Three.
(C) Such sums as may be necessary in Year Four.
(D) Such sums as may be necessary in Year Five.
(E) Such sums as may be necessary in Year Six.
(2) The funding authorized by this section shall not--
(A) modify the extent or nature of any indebtedness of the
National Railroad Passenger Corporation to the United States in
existence of the date of enactment of this Act;
(B) change the private nature of Amtrak's or its
successors' liabilities; or
(C) imply any Federal guarantee or commitment to amortize
Amtrak's outstanding indebtedness.

SEC. 207. TRANSITION ASSISTANCE.

(a) Year One Assistance.--There are authorized to be appropriated
to the Secretary of Transportation for grants to the National Railroad
Passenger Corporation for operating and capital expenses such sums as
may be necessary in Year One.
(b) Year Two Successor Corporation Operating Assistance.--There are
authorized to be appropriated to the Secretary such sums as may be
necessary for grants to--
(1) the Passenger Rail Service Provider for operating
expenses of all services except long-distance trains and routes
in Year Two; and
(2) the Passenger Rail Infrastructure Manager for capital
expenses in Year Two.
(c) Administrative Expenses of Compacts.--There are authorized to
be appropriated to the Secretary such sums as may be necessary for
grants for the administrative expenses of interstate compacts in Years
One through Three.
(d) Expenses of Amtrak.--There are authorized to be appropriated to
the Secretary such sums as may be necessary for grants for the
administrative expenses of Amtrak in Years Two through Six.
(e) Grants Made After Year Two.--After the last day of Year Two,
the Secretary may not enter into a grant agreement under this Act,
other than section 206(c), or part C of title V of title 49, United
States Code, unless each other party to the grant agreement is a State,
regional compact, or other public entity.

TITLE III--GRANTS AND OTHER ASSISTANCE FOR INTERCITY PASSENGER RAIL
SERVICE

SEC. 301. CAPITAL ASSISTANCE FOR INTERCITY PASSENGER RAIL SERVICE.

(a) In General.--Part C of subtitle V of title 49, United States
Code, is amended by inserting the following after chapter 243:

``CHAPTER 244--INTERCITY PASSENGER RAIL SERVICE CORRIDOR CAPITAL
ASSISTANCE

``Sec.
``24401. Definitions; effective date.
``24402. Capital investment grants to support intercity passenger rail
service.
``24403. Project management oversight.
``24404. Use of capital grants to finance first-dollar liability of
grant project.
``24405. Authorization of appropriations.
``Sec. 24401. Definitions; effective date
``(a) Definitions.--In this chapter--
``(1) `applicant' means a State, an Interstate Compact
(including the Northeast Corridor Compact as specified in
section 103 of the Passenger Rail Investment Reform Act), or a
public agency established by one or more States and having
responsibility for providing intercity passenger rail service.
``(2) `capital project' means a project within a corridor
plan or program for--
``(A) acquiring, constructing, supervising, or
inspecting equipment or a facility for use in intercity
passenger rail service, expenses incidental to the
acquisition or construction (including designing,
engineering, location surveying, mapping, environmental
studies, and acquiring rights-of-way), payments for the
capital portions of rail trackage rights agreements,
passenger rail-related intelligent transportation
systems, highway-rail grade crossing improvements on
routes used for intercity passenger rail service,
relocation assistance, acquiring replacement housing
sites, and acquiring, constructing, relocating, and
rehabilitating replacement housing;
``(B) rehabilitating, remanufacturing, or
overhauling rail rolling stock and facilities used
primarily in intercity passenger rail service; and
``(C) the first-dollar liability costs for
insurance related to the provision of intercity
passenger rail service.
``(3) `intercity passenger rail service' means
transportation services with the primary purpose of passenger
transportation between towns, cities, and metropolitan areas by
rail, including high-speed rail.
``(b) Effective Date.--This chapter is effective on the first day
of Year Two.
``Sec. 24402. Capital investment grants to support intercity passenger
rail service
``(a) General Authority.--(1) The Secretary of Transportation may
make grants under this section to an applicant to assist in financing
the capital costs of facilities and equipment necessary to provide
intercity passenger rail transportation.
``(2) The Secretary shall require that a grant under this section
be subject to the terms, conditions, requirements, and provisions the
Secretary decides are necessary or appropriate for the purposes of this
section, including requirements for the disposition of net increases in
value of real property resulting from the project assisted under this
section.
``(3) A grant under this section may not be made for a project or
program of projects that qualifies for financial assistance under
chapter 53 of this title.
``(b) Project as Part of Approved Program.--(1) The Secretary may
not approve a grant for a project under this section unless the
Secretary finds that the project is part of an approved corridor plan
and program developed under section 5303 of this title and that the
applicant or recipient has or will have the legal, financial, and
technical capacity to carry out the project (including safety and
security aspects of the project), satisfactory continuing control over
the use of the equipment or facilities, and the capability and
willingness to maintain the equipment or facilities.
``(2) An applicant shall provide sufficient information upon which
the Secretary can make the findings required by this subsection.
``(3) If an applicant has not selected the proposed operator of its
service competitively, the applicant shall provide written
justification to the Secretary showing why the proposed operator is the
best, taking into account price and other factors, and that use of the
proposed operator will not increase the capital cost of the project.
``(4) An applicant shall demonstrate that it has agreed with the
railroad over which the intercity passenger rail service will operate
concerning the applicant's operating and capital plans.
``(c) Letters of Intent, Full Funding Grant Agreements, and Early
Systems Work Agreements.--(1)(A) The Secretary may issue a letter of
intent to an applicant announcing an intention to obligate, for a major
capital project under this section, an amount from future available
budget authority specified in law that is not more than the amount
stipulated as the financial participation of the Secretary in the
project.
``(B) At least 30 days before issuing a letter under subparagraph
(A) of this paragraph or entering into a full funding grant agreement,
the Secretary shall notify in writing the Committee on Transportation
and Infrastructure of the House of Representatives and the Committee on
Commerce, Science, and Transportation of the Senate and the House of
Representatives and Senate Committees on Appropriations of the proposed
letter or agreement. The Secretary shall include with the notification
a copy of the proposed letter or agreement as well as the evaluations
and ratings for the project.
``(C) The issuance of a letter is deemed not to be an obligation
under sections 1108(c) and (d), 1501, and 1502(a) of title 31, United
States Code, or an administrative commitment.
``(D) An obligation or administrative commitment may be made only
when amounts are appropriated.
``(2)(A) The Secretary may make a full funding grant agreement with
an applicant. The agreement shall--
``(i) establish the terms of participation by the United
States Government in a project under this section;
``(ii) establish the maximum amount of Government financial
assistance for the project;
``(iii) cover the period of time for completing the
project, including a period extending beyond the period of an
authorization; and
``(iv) make timely and efficient management of the project
easier according to the law of the United States.
``(B) An agreement under this paragraph obligates an amount of
available budget authority specified in law and may include a
commitment, contingent on amounts to be specified in law in advance for
commitments under this paragraph, to obligate an additional amount from
future available budget authority specified in law. The agreement shall
state that the contingent commitment is not an obligation of the
Government and is subject to the availability of appropriations made by
Federal law and to Federal laws in force on or enacted after the date
of the contingent commitment. Interest and other financing costs of
efficiently carrying out a part of the project within a reasonable time
are a cost of carrying out the project under a full funding grant
agreement, except that eligible costs may not be more than the cost of
the most favorable financing terms reasonably available for the project
at the time of borrowing. The applicant shall certify, in a way
satisfactory to the Secretary, that the applicant has shown reasonable
diligence in seeking the most favorable financing terms.
``(3)(A) The Secretary may make an early systems work agreement
with an applicant if a record of decision under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) has been
issued on the project and the Secretary finds there is reason to
believe--
``(i) a full funding grant agreement for the project will
be made; and
``(ii) the terms of the work agreement will promote
ultimate completion of the project more rapidly and at less
cost.
``(B) A work agreement under this paragraph obligates an amount of
available budget authority specified in law and shall provide for
reimbursement of preliminary costs of carrying out the project,
including land acquisition, timely procurement of system elements for
which specifications are decided, and other activities the Secretary
decides are appropriate to make efficient, long-term project management
easier. A work agreement shall cover the period of time the Secretary
considers appropriate. The period may extend beyond the period of
current authorization. Interest and other financing costs of
efficiently carrying out the work agreement within a reasonable time
are a cost of carrying out the agreement, except that eligible costs
may not be more than the cost of the most favorable financing terms
reasonably available for the project at the time of borrowing. The
applicant shall certify, in a way satisfactory to the Secretary, that
the applicant has shown reasonable diligence in seeking the most
favorable financing terms. If an applicant does not carry out the
project for reasons within the control of the applicant, the applicant
shall repay all Government payments made under the work agreement plus
reasonable interest and penalty charges the Secretary establishes in
the agreement.
``(4) The total estimated amount of future obligations of the
Government and contingent commitments to incur obligations covered by
all outstanding letters of intent, full funding grant agreements, and
early systems work agreements may be not more than the amount
authorized under section 24405 of this title, less an amount the
Secretary reasonably estimates is necessary for grants under this
section not covered by a letter. The total amount covered by new
letters and contingent commitments included in full funding grant
agreements and early systems work agreements may be not more than a
limitation specified in law.
``(d) Federal Share of Net Project Cost.--(1)(A) Based on
engineering studies, studies of economic feasibility, and information
on the expected use of equipment or facilities, the Secretary shall
estimate the net project cost.
``(B) A grant for the project shall not exceed the specified
percentage of the project net capital cost established for the year the
grant is approved, as follows:
``(i) 100 percent in the case of approval for Year Two.
``(ii) 80 percent in the case of approval for Year Three.
``(iii) 60 percent in the case of approval for Year Four.
``(iii) 50 percent in the case of approval for Year Five,
and thereafter.
``(C) The Secretary shall give priority in allocating future
obligations and contingent commitments to incur obligations to grant
requests seeking a lower Federal share of the project net capital cost.
``(2) Up to an additional 30 percent of project net capital cost
may be funded from amounts appropriated to or made available to a
department or agency of the Federal Government that are eligible to be
expended for transportation.
``(e) Undertaking Projects in Advance.--(1) The Secretary may pay
the Federal share of the net capital project cost to an applicant that
carries out any part of a project described in this section according
to all applicable procedures and requirements if--
``(A) the applicant applies for the payment;
``(B) the Secretary approves the payment; and
``(C) before carrying out the part of the project, the
Secretary approves the plans and specifications for the part in
the same way as other projects under this section.
``(2) The cost of carrying out part of a project includes the
amount of interest earned and payable on bonds issued by the applicant
to the extent proceeds of the bonds are expended in carrying out the
part. However, the amount of interest under this paragraph may not be
more than the most favorable interest terms reasonably available for
the project at the time of borrowing. The applicant shall certify, in a
manner satisfactory to the Secretary, that the applicant has shown
reasonable diligence in seeking the most favorable financial terms.
``(3) The Secretary shall consider changes in capital project cost
indices when determining the estimated cost under paragraph (2) of this
subsection.''.
``Sec. 24403. Project management oversight
``(a) Project Management Plan Requirements.--To receive Federal
financial assistance for a major capital project under this chapter, an
applicant must prepare and carry out a project management plan approved
by the Secretary of Transportation. The plan shall provide for--
``(1) adequate recipient staff organization with well-
defined reporting relationships, statements of functional
responsibilities, job descriptions, and job qualifications;
``(2) a budget covering the project management
organization, appropriate consultants, property acquisition,
utility relocation, systems demonstration staff, audits, and
miscellaneous payments the recipient may be prepared to
justify;
``(3) a construction schedule for the project;
``(4) a document control procedure and recordkeeping
system;
``(5) a change order procedure that includes a documented,
systematic approach to handling the construction change orders;
``(6) organizational structures, management skills, and
staffing levels required throughout the construction phase;
``(7) quality control and quality assurance functions,
procedures, and responsibilities for construction, system
installation, and integration of system components;
``(8) material testing policies and procedures;
``(9) internal plan implementation and reporting
requirements;
``(10) criteria and procedures to be used for testing the
operational system or its major components;
``(11) periodic updates of the plan, especially related to
project budget and project schedule, financing, and ridership
estimates; and
``(12) the recipient's commitment to submit a project
budget and project schedule to the Secretary each month.
``(b) Secretarial Oversight.--(1) The Secretary may use no more
than 0.5 percent of amounts made available in a fiscal year for capital
projects under this chapter to enter into contracts to oversee the
construction of such projects.
``(2) The Secretary may use amounts available under paragraph (1)
of this subsection to make contracts for safety, procurement,
management, and financial compliance reviews and audits of a recipient
of amounts under paragraph (1).
``(3) The Federal Government shall pay the entire cost of carrying
out a contract under this subsection.
``(c) Access to Sites and Records.--Each recipient of assistance
under this chapter shall provide the Secretary and a contractor the
Secretary chooses under subsection (b) of this section with access to
the construction sites and records of the recipient when reasonably
necessary.
``(d) Regulations.--The Secretary shall prescribe regulations
necessary to carry out this section. The regulations shall include--
``(1) a definition of `major capital project' for this
section;
``(2) a requirement that oversight begin during the
preliminary engineering stage of a project, unless the
Secretary finds it more appropriate to begin oversight during
another stage of a project, to maximize the transportation
benefits and cost savings associated with project management
oversight;
``(3) a deadline by which all grant applications for a
fiscal year must be submitted that is early enough to permit
the Secretary to evaluate all timely applications thoroughly
before making grants;
``(4) a formula based on population, track miles of
railroad, and passenger miles traveled in the prior fiscal year
by which one-half of the funds appropriated for capital grants
for each fiscal year are to be allocated among the States;
``(5) a requirement that, if a State does not timely apply
for its share of formula grant funds under paragraph (4) of
this subsection, those funds will be made available to other
States under paragraph (6) of this subsection; and
``(6) criteria by which the Secretary will allocate one-
half of the funds appropriated for capital grants for each
fiscal year, including at least projected ridership, passenger
rail and intermodal connections, congestion and air quality
mitigation, underserved communities, and the effect of the
grant on whether existing service will continue.
``Sec. 24404. Use of capital grants to finance first-dollar liability
of grant project
``Notwithstanding the requirements of section 24402 of this title,
the Secretary of Transportation may approve the use of capital
assistance under this chapter to fund self-insured retention of risk
for the first tier of liability insurance coverage for rail passenger
service associated with the capital assistance grant, but the coverage
may not exceed $20,000,000 per occurrence or $20,000,000 in aggregate
per year.
``Sec. 24405. Authorization of appropriations
``There are authorized to be appropriated to make capital financial
assistance grants under this chapter, including the Secretary's
expenses related thereto, the following amounts:
``(1) Such sums as may be necessary in Year Two.
``(2) Such sums as may be necessary in Year Three.
``(3) Such sums as may be necessary in Year Four.
``(4) Such sums as may be necessary in Year Five.
``(5) Such sums as may be necessary in Year Six.''.
(b) Conforming Amendment.--The table of chapters for subtitle V of
title 49, United States Code, is amended by inserting the following
after the item relating to chapter 243:

``244. INTERCITY PASSENGER RAIL SERVICE CORRIDOR CAPITAL       24401''.
ASSISTANCE.

SEC. 302. FINAL REGULATIONS ON APPLICATIONS BY STATES FOR DEVELOPMENT
GRANTS.

Not later than June 1 of Year One, the Administrator of the Federal
Railroad Administration shall issue final regulations setting forth
procedures for application and minimum requirements for the award of
grants on and after the first day of Year Two, under chapter 244 of
title 49, United States Code.

SEC. 303. AUTHORITY FOR INTERSTATE COMPACTS FOR CORRIDOR DEVELOPMENT.

(a) Consent to Compacts.--(1) Two or more States with an interest
in a specific form, route, or corridor of intercity passenger rail
service (including high speed rail service) may enter into interstate
compacts to implement the service, including--
(A) retaining an existing service or commencing a new
service;
(B) assembling rights-of-way; and
(C) performing capital improvements, including--
(i) the construction and rehabilitation of
maintenance facilities;
(ii) the purchase of rolling stock; and
(iii) operational improvements, including
communications, signals, and other systems.
(2) A compact entered into under the authority of this section
shall be submitted to Congress for its consent, and it is the sense of
Congress that rapid consent to the compact shall be a priority of
Congress.
(b) Financing.--(1) An interstate compact established by States
under subsection (a) may provide that, in order to carry out the
compact, the States may--
(A) accept contributions from a unit of State or local
government or a person;
(B) use any Federal or State funds made available for
intercity passenger rail service (except funds made available
for Amtrak);
(C) on such terms and conditions as the States consider
advisable--
(i) borrow money on a short-term basis and issue
notes for the borrowing; and
(ii) issue bonds; and
(D) obtain financing by other means permitted under Federal
or State law.
(2) Bonds and other indebtedness incurred under the authority of
this subsection shall under no circumstances be backed by the full
faith and credit of the United States.
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