American Rail Equity Act of 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1505 Introduced in Senate (IS)]

108th CONGRESS
1st Session
S. 1505

To establish a National Passenger Rail Office, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

July 30 (legislative day, July 21), 2003

Mrs. Hutchison (for herself, Mr. Lott, Mr. Burns, and Ms. Snowe)
introduced the following bill; which was read twice and referred to the
Committee on Finance

_______________________________________________________________________

A BILL

To establish a National Passenger Rail Office, 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.

This Act may be cited as the ``American Rail Equity Act of 2003''.

SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or a
repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of title 49,
United States Code.

SEC. 3. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Amendment of title 49, United States Code.
Sec. 3. Table of contents.
TITLE I--NATIONAL PASSENGER RAIL OFFICE

Sec. 101. Establishment of National Passenger Rail Office.
TITLE II--NATIONAL PASSENGER RAIL SYSTEM

Subtitle A--National Passenger Rail System

Sec. 201. National passenger rail system.
Subtitle B--High-Speed Corridors for Passenger Rail

Sec. 211. Interstate railroad passenger high-speed transportation
policy.
Sec. 212. High-speed rail corridor planning.
Sec. 213. Assistance for establishment of corridors for high-speed rail
service.
TITLE III--RAIL INFRASTRUCTURE IMPROVEMENT

Subtitle A--Rail Infrastructure Finance Corporation

Sec. 301. Establishment of corporation.
Sec. 302. Board of directors.
Sec. 303. Officers and employees.
Sec. 304. Nonprofit and nonpolitical nature of the corporation.
Sec. 305. Purpose and activities of corporation.
Sec. 306. Report to Congress.
Sec. 307. Administrative matters.
Sec. 308. Rail infrastructure finance trust.
Subtitle B--Rail Development Grant Program

Sec. 311. National system improvement grant program.
Sec. 312. Grant program requirements and limitations.
Subtitle C--Rail Infrastructure Tax Credit Bonds

Sec. 321. Credit to holders of qualified rail infrastructure bonds.
Sec. 322. Annual report by Treasury on rail infrastructure trust
account.
Sec. 323. Issuance of regulations.
Sec. 324. Effective date.
TITLE IV--RAIL INFRASTRUCTURE AND INTERMODAL TRANSPORTATION

Sec. 401. Intermodal transportation policy.
Sec. 402. State rail plans.

TITLE I--NATIONAL PASSENGER RAIL OFFICE

SEC. 101. ESTABLISHMENT OF NATIONAL PASSENGER RAIL OFFICE.

(a) Establishment.--(1) Chapter 1 of title 49, United States Code,
is amended by inserting after section 107 the following new section:
``Sec. 107A. National Passenger Rail Office
``(a) In General.--The National Passenger Rail Office is an office
in the Department of Transportation.
``(b) Head of Office.--The head of the Office is the Director of
the National Passenger Rail Office who is appointed by the President,
by and with the advice and consent of the Senate.
``(c) Administrative Matters.--
``(1) Administrative location.--The Office is located
within the Federal Transit Administration for administrative
purposes.
``(2) Supervision.--The Director of the National Passenger
Rail Office reports directly to the Administrator of the
Federal Transit Administration.
``(d) Duties.--The duties of the Office are as follows:
``(1) To carry out the responsibilities of the Office with
respect to the national passenger railroad system under chapter
251 of this title, including--
``(A) the allocation of funds to the National
Passenger Rail Corporation for the operations of the
Corporation under section 25005 of this title;
``(B) the responsibilities for the national
passenger railroad system set forth under section 25006
of this title;
``(C) the responsibilities for the national
passenger railroad system route map set forth under
section 25007 of this title; and
``(D) the quarterly identification of
infrastructure improvement projects for the national
passenger railroad system under section 25008 of this
title.
``(2) To carry out such other responsibilities as may be
provided by the Secretary of Transportation or by law.
``(e) Funding of Administrative Expenses.--The amount available
under section 25010(c)(1) of this title each fiscal year shall be
available for the administrative costs of the Office in such fiscal
year.''.
(2) The table of section at the beginning of such chapter is
amended by inserting after the item relating to section 107 the
following new item:

``107A. National Passenger Rail Office.''.
(b) Rate of Pay of Director of Office.--Section 5315 of title 5,
United States Code, is amended by adding at the end the following:
``Director, National Passenger Rail Office.''.

TITLE II--NATIONAL PASSENGER RAIL SYSTEM

Subtitle A--National Passenger Rail System

SEC. 201. NATIONAL PASSENGER RAIL SYSTEM.

(a) In General.--Part C of subtitle V of title 49, United States
Code, is amended by adding at the end the following new chapter:

``CHAPTER 250--NATIONAL PASSENGER RAIL SYSTEM

``Sec.
``25001. Purpose.
``25002. National passenger rail system.
``25003. Designation of Amtrak as National Passenger Rail Corporation.
``25004. National Passenger Rail Corporation: responsibility for
national passenger rail system; status.
``25005. National Passenger Rail Office: allocation of operating funds
to National Passenger Rail Corporation.
``25006. National Passenger Rail Office: responsibility for national
passenger rail system.
``25007. National Passenger Rail Office: responsibility for national
passenger rail system route map.
``25008. National Passenger Rail Office: identification of rail
infrastructure improvement projects for
national passenger rail system.
``25009. Rail infrastructure improvements grant program.
``25010. Construction with other law; preservation and allocation of
authorities.
``25011. Authorizations.
``Sec. 25001. Purpose
``The purpose of this chapter is to improve rail passenger service
in the United States by--
``(1) redesignating Amtrak as the National Passenger Rail
Corporation; and
``(2) reallocating the responsibilities of Amtrak for
intercity and commuter rail passenger transportation (and
related transportation) among the National Passenger Rail
Corporation and the National Rail Passenger Office so that--
``(A) the National Passenger Rail Corporation
retains the responsibilities of Amtrak for the
provision of such transportation; and
``(B) the National Rail Passenger Office assumes
the responsibilities of Amtrak for the equipment and
facilities of Amtrak and for the route map of the
national passenger rail system.
``Sec. 25002. National passenger rail system
``(a) In General.--The system of intercity rail passenger
transportation (and related transportation), known as the national
passenger rail system, includes--
``(1) the segment of the Northeast Corridor between Boston,
Massachusetts, and Washington, D.C.;
``(2) rail corridors that have been designated by the
Secretary of Transportation as high-speed corridors, but only
after they have been improved to permit operation of high-speed
service;
``(3) long-distance routes of more than 750 miles between
endpoints operated by Amtrak as of the date of enactment of the
American Rail Equity Act of 2003; and
``(4) short-distance corridors or routes operated by
Amtrak.
``(b) Transportation Requested by States, Authorities, and Other
Persons.--
``(1) Contracts for transportation.--Amtrak and a State, a
regional or local authority, or another person may enter into a
contract for Amtrak to operate an intercity rail service or
route not included in the national rail passenger
transportation system upon such terms as the parties thereto
may agree.
``(2) Discontinuance.--Upon termination of a contract
entered into under this subsection, or the cessation of
financial support under such a contract, Amtrak may discontinue
such service or route, notwithstanding any other provision of
law.
``Sec. 25003. Designation of Amtrak as National Passenger Rail
Corporation
``Effective as of the date of the enactment of the American Rail
Equity Act of 2003, the portion of Amtrak that is responsible for the
operations relating to intercity rail passenger transportation and
commuter rail passenger transportation (and related transportation)
specified in section 25004(b) of this title is hereby redesignated as
the National Passenger Rail Corporation.
``Sec. 25004. National Passenger Rail Corporation: responsibility for
national passenger rail system; status
``(a) Termination of For-Profit Status.--The National Passenger
Rail Corporation shall not be required to be operated or managed as a
for-profit corporation.
``(b) Limitation of Responsibilities to Transportation and Certain
Maintenance Facilities.--The Corporation shall have responsibility only
for the following:
``(1) Operations relating to the provision of intercity
rail passenger transportation.
``(2) Operations relating to the provision of commuter rail
passenger transportation.
``(3) Operations relating to the transportation of mail and
express.
``(4) Operations relating to auto-ferry transportation.
``(5) Marketing relating to transportation provided under
paragraphs (1) through (4).
``(6) Facilities for the maintenance of the rolling stock
necessary to provide transportation under paragraphs (1)
through (4).
``(c) Transfer of Other Assets and Responsibilities to National
Passenger Rail Office.--The Corporation shall transfer to the National
Passenger Rail Office jurisdiction of all equipment and facilities of
the Corporation as of the date of the enactment of the American Rail
Equity Act of 2003 that are not the responsibility of the Corporation
under subsection (b).
``Sec. 25005. National Passenger Rail Office: allocation of operating
funds to National Passenger Rail Corporation
``(a) In General.--The National Passenger Rail Office shall, from
amounts available for a fiscal year under section 25010(c)(2)(A) of
this title, allocate amounts to the National Passenger Rail Corporation
in order to permit the Corporation carry out operations for the
provision of transportation under section 25004(b) of this title.
``(b) Allocation on Route-by-Route Basis.--The Office shall
allocate amounts to the Corporation under subsection (a) on a route-by-
route basis.
``(c) Oversight of Expenditures.--The Office shall oversee and
review expenditures of amounts allocated to the Corporation under
subsection (a) in order to ensure that the Corporation is utilizing
amounts so allocated in an appropriate manner.
``Sec. 25006. National Passenger Rail Office: responsibility for
national passenger rail system
``(a) Northeast Corridor Equipment and Facilities.--The National
Passenger Rail Office shall have responsibility for all equipment and
facilities relating to the Northeast Corridor route that are
transferred to the Office under section 25003(c) of this title.
``(b) Pennsylvania Station, New York.--The Office shall treat
Pennsylvania Station, New York, and the electric power generation
facilities at Pennsylvania Station for the Northeast Corridor route, as
a part of the Northeast Corridor route under subsection (a).
``(c) Other Equipment and Facilities.--
``(1) Operation through lease required.--The Office shall
provide for the operation of any equipment and facilities
transferred to the Office under section 25004(c) of this title
that are not the responsibility of the Office under subsections
(a) and (b) through the lease of such equipment and facilities
to 1 or more appropriate persons or entities.
``(2) Full and open competition.--The Office shall identify
any lessee of equipment and facilities under paragraph (1)
utilizing procedures for full and open competition.
``Sec. 25007. National Passenger Rail Office: responsibility for
national passenger rail system route map
``(a) In General.--The National Passenger Rail Office shall have
responsibility for the modification of routes of the National Passenger
Rail Corporation.
``(b) Failure of On-Time Performance.--
``(1) Surveys of on-time performance.--Not later than 12
months after the date of the enactment of this American Rail
Equity Act of 2003 and every year thereafter, the Office shall
determine for each route of the Corporation whether the
Corporation met the on-time performance goal for such route
during the most recent performance period.
``(2) Contingent requirement to preserve routes.--The
Office may not discontinue a route of the Corporation as in
effect on the date of the enactment of that Act unless the
Office determines under paragraph (1) in any year that the
Corporation did not meet the on-time performance goal for such
route in 3 out of the 5 years immediately preceding the year in
which the determination is made.
``(3) Transportation rights following failure on on-time
performance.--
``(A) Forfeiture of rights.--If the Office
determines (in the determination under paragraph (2)
that is required to be completed 5 years after the date
of the enactment of the American Rail Equity Act of
2003) that the Corporation did not meet the on-time
performance goal for a route of the Corporation during
the most recent performance period, the Corporation
shall forfeit to the Office the right to provide
passenger rail transportation on such route (including
the right to use the tracks of such route to provide
such transportation).
``(B) Lease of forfeited rights.--The Office shall
lease to an appropriate person or entity the right to
provide passenger rail transportation on a route
(including the right to use the tracks of such route to
provide such transportation) that is forfeited under
subparagraph (A). The Office shall identify any lessee
of such right to provide rail passenger transportation
on a route utilizing procedures for full and open
competition.
``(C) Transportation.--A person or entity leasing
the right to provide rail passenger transportation on a
route under subparagraph (B) shall provide such rail
passenger transportation on the route as is specified
by the Office in the lease under subparagraph (B). The
rail passenger transportation so specified for a route
shall be equivalent to the rail passenger
transportation scheduled to provided by the Corporation
on the route before the forfeiture of the right to
provide transportation on the route under subparagraph
(A).
``(D) Assistance.--A person or entity providing
rail passenger transportation on a route under
subparagraph (B) shall be entitled to such assistance
under this part, and under any other provision of law,
for the provision of such rail passenger transportation
as would otherwise have been provided to the
Corporation if the Corporation had provided such rail
passenger transportation on such route.
``(E) Bonus.--If the Office determines that a
person or entity providing rail passenger
transportation on a route under subparagraph (B) has
met the on-time performance goal for that route during
the most recent performance period, the Office may pay
such person or entity a bonus in an amount determined
appropriate by the Office.
``(4) Failure of on-time performance based on lack of
access.--
``(A) Notice.--The Corporation shall notify the
Office of each allegation of the Corporation that the
failure of the Corporation to meet the on-time
performance goal for a route is due to the denial of
access to the tracks of the route by the rail carrier
owning the route.
``(B) Transmittal.--Amtrak shall transmit to the
Surface Transportation Board each allegation received
by the Office under subparagraph (A).
``(C) Investigation.--The Board shall investigate
each allegation transmitted under subparagraph (B).
``(D) Civil penalties.--If as a result of an
investigation under subparagraph (C) the Board verifies
an allegation under subparagraph (A), the Board may
impose a civil penalty on the rail carrier that is the
subject of the allegation in such amount as the Board
considers appropriate.
``(5) Definitions.--In this subsection:
``(A) On-time performance goal.--Within 12 months
after the date of enactment of the American Rail Equity
Act of 2003, the National Rail Office, after
consulation with Amtrak, shall establish criteria for
determining what attributes characterize an `on-time
performance goal'. In the case of a route, the criteria
shall be based upon at least 80 percent of the trains
scheduled to provide passenger rail transportation on
the route during the most recent performance period
arriving not later than their scheduled arrival time.
``(B) Performance period.--The term `performance
period' means the 12-month period ending on the date a
determination is made regarding whether the trains
scheduled to provide passenger rail transportation on a
route met their on-time performance goal.
``(c) Additional Routes.--
``(1) Additional routes.--The Office may establish 1 or
more additional routes for the national rail passenger system
if the Office determines pursuant to the study under section
502 of the American Rail Equity Act of 2003 that the
establishment of such route or routes is feasible and
advisable.
``(2) Corridors for high-speed rail service.--The Office
may add to the national passenger rail system any corridor for
high-speed rail service established pursuant to section 26104
of this title.
``Sec. 25008. National Passenger Rail Office: identification of rail
infrastructure improvement projects for national
passenger rail system
``(a) Identification of Rail Infrastructure Improvement Projects.--
``(1) In general.--The National Passenger Rail Office
shall, on a quarterly basis, identify the rail infrastructure
improvement projects that are advisable to improve or enhance
the operations of the national passenger rail system, including
operations in the Northeast Corridor.
``(2) Nature of improvements.--The infrastructure
improvements covered by rail infrastructure improvement
projects under paragraph (1) may include--
``(A) track and other capital improvements;
``(B) the acquisition of rights-of-way; and
``(C) such other improvements as the Office
considers advisable to improve or enhance the
operations of the national passenger rail system.
``(3) State input.--Recommendations of States for projects
for identification under paragraph (1) shall be submitted to
the National Passenger Rail Office in accordance with such
requirements as the Director of the Office may prescribe.
``(b) Information on Potential Projects.--A rail carrier seeking to
carry out a rail infrastructure improvement project for purposes of
subsection (a) shall submit to the Office such information on the
project as the Director of the Office shall require, including--
``(1) the nature of the infrastructure improvements under
the project;
``(2) the cost of the infrastructure improvements; and
``(3) an assessment of the extent to which the
infrastructure improvements will improve or enhance the
operations of the national passenger rail system.
``(c) Reports to National Rail Transportation Financing
Corporation.--
``(1) In general.--The Director of the Office shall, on a
quarterly basis, submit to the National Rail Transportation
Financing Corporation a report setting forth the rail
infrastructure improvement projects identified under subsection
(a) during the preceding quarter.
``(2) Report elements.--Each report under paragraph (1)
shall contain such information as the Director of the Office
and the Corporation jointly consider appropriate in order--
``(A) to fully inform the Corporation of the
nature, cost, benefits, and priority of each rail
infrastructure improvement project identified in such
report; and
``(B) to permit the Corporation to evaluate the
advisability of making a grant for each such rail
infrastructure improvement project under 306 of the
American Rail Equity Act of 2003.
``Sec. 25009. Rail infrastructure improvements grant program
``The National Passenger Rail Office may make grants for rail
infrastructure improvement projects identified under section 25008 of
this title.
``Sec. 25010. Construction with other law; preservation and allocation
of authorities
``(a) Construction.--The provisions of this chapter supersede any
provisions of this part, and any other provisions of law, that are
inconsistent with the provisions of this chapter.
``(b) Preservation of Authorities.--
``(1) National passenger rail office.--For purposes of
carrying out its responsibility under this chapter, including
the operation and maintenance of facilities under section
25005(c) of this title, the National Passenger Rail Office may
utilize any power or authority of Amtrak under this part, or
under any other provision of law, to the extent that such power
or authority is not inconsistent with a provision of this
chapter, as if the Office were Amtrak.
``(2) National passenger rail authority.--For purposes of
carrying out its responsibilities under section 25004(b) of
this title, the National Passenger Rail Corporation may utilize
any power or authority of Amtrak under this part, or under any
other provision of law, to the extent that such power or
authority is not inconsistent with a provision of this chapter,
as if the Corporation were Amtrak.
``(c) Memorandum of Understanding.--The Office and the Corporation
shall, subject to the supervision and concurrence of the Administrator
of the Federal Transit Administration, enter into a memorandum of
understanding allocating among the Office and the Corporation the
authorities, powers, and responsibilities of Amtrak under this part,
and under any other provision of law, in a manner consistent with the
provisions of this chapter.
``(d) References.--
``(1) National passenger rail authority.--Any reference to
Amtrak in any law, regulation, map, document, record, or other
paper of the United States with respect to the performance of
any function or activity that is retained by the National
Passenger Rail Corporation under this chapter shall be
considered to be a reference to the National Passenger Rail
Corporation.
``(2) National passenger rail office.--Any reference to
Amtrak in any law, regulation, map, document, record, or other
paper of the United States with respect to the performance of
any function or activity that is assumed by the National
Passenger Rail Office under this chapter shall be considered to
be a reference to the National Passenger Rail Office.
``Sec. 25011. Authorizations
``(a) In General.--There are authorized to be appropriated
$2,000,000,000 for each of fiscal years 2004 through 2009 for the
operations of the National Passenger Rail Corporation under this
chapter.
``(b) Allocations.--To the extent provided in appropriations Acts,
$3,000,000 of the amount appropriated pursuant to the authorization of
appropriations in subsection (a) in any fiscal year shall be available
for the National Passenger Rail Office for the administrative expenses
of the Office in such fiscal year.''.
(b) Clerical Amendment.--The table of chapters at the beginning of
subtitle V of title 49, United States Code, is amended by inserting
after the item relating to chapter 249 the following new item:

``250. NATIONAL PASSENGER RAILROAD SYSTEM...................   25001''.

Subtitle B--High-Speed Corridors for Passenger Rail

SEC. 211. INTERSTATE RAILROAD PASSENGER HIGH-SPEED TRANSPORTATION
POLICY.

(a) In General.--Chapter 261 is amended by inserting before section
26101 the following:
``Sec. 26100. Policy
``The Congress declares that it is the policy of the United States
that designated high-speed railroad passenger transportation corridors
are the building blocks of an interconnected interstate railroad
passenger system that serves the entire Nation.''.
(b) Conforming Amendment.--The chapter analysis for chapter 261 is
amended by inserting before the item relating to section 26101 the
following:

``26100. Policy''.

SEC. 212. HIGH-SPEED RAIL CORRIDOR PLANNING.

(a) In General.--Section 26101(a) is amended to read as follows:
``(a) Planning.--
``(1) In general.--The Secretary of Transportation shall
provide planning assistance to States or group of States and
other public agencies promoting the development of high-speed
rail corridors designated by the Secretary under section 104(d)
of title 23.
``(2) Secretary may provide direct or financial
assistance.--The Secretary may provide planning assistance
under paragraph (1) directly or by providing financial
assistance to a public agency or group of public agencies to
undertake planning activities approved by the Secretary. Not
less than 20 percent of the publicly financed planning costs
associated with projects assisted under this chapter shall come
from non-Federal sources. State matching contributions may not
be derived, directly or indirectly, from Federal funds.''.
(b) Conforming and Other Amendments to Section 26101.--Section
26101 is further amended--
(1) by striking subsection (c)(2) and inserting the
following:
``(2) the extent to which the proposed planning focuses on
high-speed rail systems, giving a priority to systems which
will achieve sustained speeds of 125 miles per hour or greater
and projects involving dedicated rail passenger rights-of-
way;'';
(2) by inserting ``and'' after the semicolon in subsection
(c)(12);
(3) by striking ``completed; and'' in subsection (c)(13)
and inserting ``completed.''; and
(4) by striking subsection (c)(14).
(c) Conforming Amendment.--Section 26105(2)(A) is amended by
striking ``more than 125 miles per hour;'' and inserting ``90 miles per
hour or more;''.
(d) Financial Assistance To Include Loans and Loan Guarantees.--
Section 26105(1) is amended by inserting ``loans, loan guarantees,''
after ``contracts,''.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation such sums as may be
necessary for each of fiscal years 2004 through 2008 to provide
planning assistance under section 26101(a) of title 49, United States
Code, as amended by subsection (a).

SEC. 213. ASSISTANCE FOR ESTABLISHMENT OF CORRIDORS FOR HIGH-SPEED RAIL
SERVICE.

(a) In General.--Chapter 261 of title 49, United States Code, is
amended--
(1) by redesignating sections 26104 and 26105 as sections
26105 and 26106, respectively; and
(2) by inserting after section 26103 the following new
section 26104:
``Sec. 26104. Additional support for establishment of high-speed rail
corridors
``(a) Purpose.--The purpose of this section is to facilitate the
establishment of a national network of corridors for high-speed rail
service.
``(b) Corporation To Make Grants.--The National Rail Transportation
Financing Corporation under title III of the American Rail Equity Act
of 2003 may make grants of financial assistance to individual States or
compacts of States for the establishment of corridors for high-speed
rail service.
``(c) Application.--A State or compact of States seeking a grant
under this section shall submit to the Corporation an application
therefor in such form, and including such information, as the
Corporation shall require.
``(d) Matching Requirement.--A State or compact of States receiving
a grant under this section for activities relating to the establishment
of a corridor for high-speed rail service shall bear not less than 80
percent of the costs of the activities funded by the grant.
``(e) Use of Grant.--A State or compact of States receiving a grant
under this section shall use the grant amount for purposes of the
establishment of 1 or more corridors for high-speed rail service,
including the purchase of rights-of-way for the provision of such
service.
``(f) Treatment of Corridors.--The National Passenger Rail Office
may treat a corridor established pursuant to this section as part of
the national passenger rail system under chapter 251 of this title.
``(g) Construction With Other Assistance Corporation.--The
authority to make grants under this section for the establishment of
corridors for high-speed rail service is in addition to any other
authority in this chapter, or under any other provision of law,
relating to the provision of assistance for the establishment of
corridors for high-speed rail service.
``(h) Funding.--Amounts derived from the issuance of qualified rail
transportation bonds under title III of the American Rail Equity Act of
2003 and section 54 of the Internal Revenue Code of 1986 shall be
available for grants under this section.''.
(b) Clerical Amendment.--The table of sections at the beginning of
chapter 261 of such title is amended by striking the items relating to
section 26104 and 26105 and inserting the following new items:

``26104. Additional support for establishment of high-speed rail
corridors.
``26105. Authorization of appropriations.
``26106. Definitions.''.

TITLE III--RAIL INFRASTRUCTURE IMPROVEMENT

Subtitle A--Rail Infrastructure Finance Corporation

SEC. 301. ESTABLISHMENT OF CORPORATION.

There is established a nonprofit corporation, to be known as the
``Rail Infrastructure Finance Corporation''. The Rail Infrastructure
Finance Corporation is not an agency or establishment of the United
States Government. The Corporation shall be subject to the provisions
of this subtitle, and, to the extent consistent with this section, to
the laws of the State of Delaware applicable to corporations not for
profit.

SEC. 302. BOARD OF DIRECTORS.

(a) Appointment.-- The Rail Infrastructure Finance Corporation
shall have a Board of Directors consisting of 9 members appointed by
the President, by and with the advice and consent of the Senate. Not
more than 5 members of the Board may be members of the same political
party.
(b) Membership Qualifications.--
(1) In general.--The 9 members of the Board shall be
appointed from among citizens of the United States (not regular
full-time employees of the United States) who are eminent in
the fields of rail transportation, rail financing, and
intermodal transportation planning, and the financing and
management of large-scale, long-term public-private cooperative
projects.
(2) Representation of specific interests.--Of the 9 members
of the Board, 8 of the members shall be selected as follows:
(A) Two members from among individuals who
represent the interests of freight rail transportation.
(B) One member from among individuals who represent
the interests of passenger rail transportation.
(C) One member from among individuals who represent
the interests of the States.
(D) One member from among individuals who represent
the interests of intercity passenger rail users.
(E) One member from among individuals who represent
the interests of organized labor.
(F) Two members from among persons who are involved
in finance.
(c) Incorporation.--The members initially appointed to the Board of
Directors shall serve as incorporators and shall take whatever actions
are necessary to establish the Corporation under the laws of Delaware.
(d) Terms of Office.--Members of the Board shall be appointed for
terms of 6 years, except that of the members first appointed, the
President shall designate 2 to serve a term of 1 year and 2 to serve a
term of 3 years. No member of the Board shall be eligible to serve in
excess of 2 consecutive full terms.
(e) Vacancies.--A member of the Board appointed to fill a vacancy
occurring before the expiration of the term for which the member's
predecessor was appointed shall serve only for the remainder of the
term. Upon the expiration of a member's term, the member shall continue
to serve until a successor is appointed.
(f) Attendance Required.--Members of the Board shall attend not
less than 50 percent of all duly convened meetings of the Board in any
calendar year. A member who fails to meet the requirement of the
preceding sentence shall forfeit membership and the President shall
appoint a new member to fill the resulting vacancy not later than 30
days after such vacancy is determined by the Chairman of the Board.
(g) Election of Chairman and Vice Chairman.--Members of the Board
shall annually elect 1 of their members to be Chairman and elect 1 or
more of their members as a Vice Chairman or Vice Chairmen.
(h) Compensation.--The members of the Board shall not, by reason of
such membership, be considered to be officers or employees of the
United States. They shall, while attending meetings of the Board or
while engaged in duties related to such meetings or other activities of
the Board pursuant to this title, be entitled to receive compensation
at the rate of $150 per day, including traveltime. No Board member
shall receive compensation of more than $10,000 in any fiscal year.
While away from their homes or regular places of business, Board
members shall be allowed travel and actual, reasonable, and necessary
expenses.
(i) Meetings Open to Public.--All meetings of the Board of
Directors of the Corporation, including any committee of the Board,
shall be open to the public under such terms, conditions, and
exceptions as the Board may establish.

SEC. 303. OFFICERS AND EMPLOYEES.

(a) In General.--The Rail Infrastructure Finance Corporation shall
have a President, and such other officers as may be named and appointed
by the Board for terms and at rates of compensation fixed by the Board.
No officer or employee of the Corporation may be compensated by the
Corporation at an annual rate of pay that exceeds the rate of basic pay
for level I of the Executive Schedule under section 5312 of title 5,
United States Code. No individual other than a citizen of the United
States may be an officer of the Corporation. Subject to section 302(h),
no officer of the Corporation may receive any salary or other
compensation (except for compensation for services on boards of
directors of other organizations that do not receive funds from the
Corporation, on committees of such boards, and in similar activities
for such organizations) from any sources other than the Corporation for
services rendered during the period of his or her employment by the
Corporation. Service by any officer on boards of directors of other
organizations, on committees of such boards, and in similar activities
for such organizations shall be subject to annual advance approval by
the Board and subject to the provisions of the Corporation's Statement
of Ethical Conduct. All officers shall serve at the pleasure of the
Board.
(b) Nonpartisan Nature of Appointments.--Except as provided in the
second sentence of section 302(a), no political test or qualification
shall be used in selecting, appointing, promoting, or taking other
personnel actions with respect to officers, agents, and employees of
the Corporation.

SEC. 304. NONPROFIT AND NONPOLITICAL NATURE OF THE CORPORATION.

(a) Stock.--The Rail Infrastructure Finance Corporation shall have
no power to issue any shares of stock, or to declare or pay any
dividends.
(b) No Private Benefit.--No part of the income or assets of the
Corporation shall inure to the benefit of any director, officer,
employee, or any other individual except as salary or reasonable
compensation for services.
(c) Political Activity Prohibited.--The Corporation may not
contribute to or otherwise support any political party or candidate for
elective public office.
(d) Conflicts of Interest.--No director, officer, or employee of
the Corporation shall in any manner, directly or indirectly,
participate in the deliberation upon or the determination of any
question affecting his or her personal interests or the interests of
any corporation, partnership, or organization in which he or she is
directly or indirectly interested. Board members shall recuse
themselves from Board decisions that directly affect either them or
entities they represent regarding grants and other assistance provided
to States by the Board.

SEC. 305. PURPOSE AND ACTIVITIES OF CORPORATION.

(a) Purpose.--The Rail Infrastructure Finance Corporation shall,
through the issuance of qualified rail infrastructure bonds in
accordance with section 54 of the Internal Revenue Code of 1986 and
this title, provide financial support for rail transportation capital
projects under subtitle B.
(b) Bond Issuance Corporation.--
(1) In general.--In order to carry out its purposes, the
Corporation is authorized to issue qualified rail
infrastructure bonds (as defined in section 54(e) of the
Internal Revenue Code of 1986) during the 6-year period
beginning October 1, 2003.
(2) Limitation.--The total face amount of the bonds
outstanding under paragraph (1) at any time may not exceed
$48,000,000,000.
(3) No federal guarantee.--
(A) Obligations insured by the corporation.--No
obligation that is insured, guaranteed, or otherwise
backed by the Corporation shall be deemed to be an
obligation that is guaranteed by the full faith and
credit of the United States.
(B) Special rule.--This paragraph shall not affect
the determination of whether such obligation is
guaranteed for purposes of Federal income taxes.
(C) Securities offered by the corporation.--No debt
or equity securities of the Corporation shall be deemed
to be guaranteed by the full faith and credit of the
United States.
(4) Authority.--To carry out the foregoing purposes and
engage in the foregoing activities, the Corporation shall have
the usual powers conferred upon a nonprofit corporation under
the laws of the State of Delaware.
(c) Federal Assistance.--The Corporation shall be eligible to
receive discretionary grants, contracts, gifts, contributions, or
technical assistance from any department or agency of the Federal
Government, but only to the extent permitted by law and to the extent
necessary to carry out the purpose set forth in subsection (a) and the
activities described in subsection (b).

SEC. 306. REPORT TO CONGRESS.

(a) In General.--On or before May 15 of each year, the Rail
Infrastructure Finance Corporation shall submit an annual report for
the fiscal year ending on September 30 of the preceding year to the
Committee on Commerce, Science, and Transportation of the Senate and
the Committee on Transportation and Infrastructure of the House of
Representatives. The report shall include a comprehensive and detailed
report of the Corporation's operations, activities, financial
condition, and accomplishments under this title and such
recommendations as the Corporation deems appropriate.
(b) Availability for Testimony.--The officers and directors of the
Corporation shall be available to testify before those committees with
respect to such report, the report of any audit made by the Comptroller
General pursuant to section 307(d)(3), or any other matter which such
committees may determine.

SEC. 307. ADMINISTRATIVE MATTERS.

(a) Budget.--The Rail Infrastructure Finance Corporation shall
establish an annual budget for the Corporation, including the Rail
Infrastructure Investment Account under subsection (c).
(b) Implementation Plan.--
(1) Requirement for plan.--The Corporation shall conduct a
study and prepare a plan on how the Corporation can best
achieve the purposes and fulfill the requirements of this
title.
(2) Consultation.--In preparing the plan, the Corporation
may consult with the Secretary of Transportation, the Secretary
of the Treasury, and representatives of State and local
governments.
(3) Other requirements.--The plan, which shall be based on
the conclusions resulting from the study conducted under
paragraph (1), shall be submitted by the Corporation to the
Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Transportation and Infrastructure
of the House of Representatives not later than January 31,
2004. Unless directed otherwise by law, the Corporation shall
implement the plan during the first fiscal year beginning after
the fiscal year in which the plan is submitted to Congress.
(c) Rail Infrastructure Investment Account.--
(1) Establishment.--The Board of Directors for the
Corporation shall establish an account to be known as the Rail
Infrastructure Investment Account.
(2) Deposit of bond proceeds.--The Corporation shall
deposit the proceeds of sales of any bonds issued under section
54 of the Internal Revenue Code of 1986 into the Account.
(3) Deposit of non-federal contributions.--The Board shall
deposit all contributions received under section 304(a) into
the Account.
(4) Disbursements.--The Board shall make available and may
disburse, at the beginning of fiscal year 2004 and of each
succeeding fiscal year thereafter, such funds as may be
available for obligation and expenditure from the Account.
(5) Use of account funds.--Funds in the Account--
(A) shall be used by the Corporation for investment
purposes through the trust established under section
308 to generate an amount sufficient--
(i) to repay the principal of the bonds at
their maturity; and
(ii) to pay the administrative costs of the
Corporation and the Rail Infrastructure Finance
Trust under section 308; and
(B) shall, to the extent of the net spendable
proceeds in the account, be held in the Rail
Infrastructure Finance Trust established under section
308 and be available for distribution as grants of
financial assistance under subtitle B.
(6) Net spendable proceeds defined.--In this subsection,
the term `net spendable proceeds', with respect to the Rail
Infrastructure Investment Account, means the amount equal to
the excess of--
(A) the total amount in such Account, over
(B) the amount in such Account that is needed for
uses under paragraph (5)(A).
(d) Records and Audit.--
(1) In general.--The account of the Corporation shall be
audited annually in accordance with generally accepted auditing
standards by independent certified public accountants or
independent licensed public accountants certified or licensed
by a regulatory authority of a State or other political
subdivision of the United States. The audits shall be conducted
at the place or places where the accounts of the Corporation
are normally kept. All books, accounts, financial records,
reports, files, and all other papers, things, or property
belonging to or in use by the Corporation and necessary to
facilitate the audits shall be made available to the person or
persons conducting the audits; and full facilities for
verifying transactions with the balances or securities held by
depositories, fiscal agents and custodians shall be afforded to
such person or persons.
(2) Audit report.--The report of each such independent
audit shall be included in the annual report required by
section 306. The audit report shall set forth the scope of the
audit and include such statements as are necessary to present
fairly the Corporation's assets and liabilities, surplus or
deficit, with an analysis of the changes therein during the
year, supplemented in reasonable detail by a statement of the
Corporation's income and expenses during the year, and a
statement of the sources and application of funds, together
with the independent auditor's opinion of those statements.
(3) Audit by comptroller general.--The financial
transactions of the Corporation may be audited by the General
Accounting Office in accordance with the principles and
procedures applicable to commercial corporate transactions and
under such rules and regulations as may be prescribed by the
Comptroller General of the United States. Any such audit shall
be conducted at the place or places where accounts of the
Corporation are normally kept. The representative of the
General Accounting Office shall have access to all books,
accounts, records, reports, files, and all other papers,
things, or property belonging to or in use by the Corporation
pertaining to its financial transactions and necessary to
facilitate the audit, and they shall be afforded full
facilities for verifying transactions with the balances or
securities held by depositories, fiscal agents, and custodians.
All such books, accounts, records, reports, files, papers and
property of the Corporation shall remain in possession and
custody of the Corporation.
(4) GAO report to congress.--A report of each audit under
paragraph (3) shall be made by the Comptroller General to the
Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Transportation and Infrastructure
of the House of Representatives. The report shall contain such
comments and information as the Comptroller General considers
necessary to inform the committees of the financial operations
and condition of the Corporation, together with such
recommendations with respect thereto as he may deem advisable.
The report shall also show specifically any program,
expenditure, or other financial transaction or undertaking
observed in the course of the audit, which, in the opinion of
the Comptroller General, has been carried on or made without
authority of law. A copy of each report shall be furnished to
the President, to the Secretary, and to the Corporation at the
time submitted to the Congress.
(5) Accounting principles.--
(A) Applicable principles.--Not later than 1 year
after the date of the enactment of this Act, the
Corporation shall develop accounting principles which
shall be used uniformly by all entities receiving funds
under this title, taking into account organizational
differences among various categories of such entities.
Such principles shall be designed to account fully for
all funds received and expended for purposes of this
title by such entities.
(B) Consultation.--The Corporation may consult with
the Comptroller General and, as appropriate, with
others in the development of the accounting principles
under subparagraph (A).
(6) Requirements for recipients.--Each entity receiving
funds under this title shall--
(A) keep its books, records, and accounts in such
form as may be required by the Corporation;
(B) either--
(i) undergo a biennial audit by independent
certified public accountants or independent
licensed public accountants certified or
licensed by a regulatory authority of a State,
which audit shall be in accordance with
auditing standards developed by the
Corporation, in consultation with the
Comptroller General; or
(ii) submit a financial statement in lieu
of the audit required by subparagraph (A) if
the Corporation determines that the cost burden
of such audit on such entity is excessive in
light of the financial condition of such
entity; and
(C) furnish biennially to the Corporation a copy of
the audit report required pursuant to the subparagraph
(B), as well as such other information regarding
finances (including an annual financial report) as the
Corporation may require.
(7) Additional recordkeeping.--Any recipient of assistance
by grant or contract under this section, other than a fixed
price contract awarded pursuant to competitive bidding
procedures, shall keep such records as may be reasonably
necessary to disclose fully the amount and the disposition by
such recipient of such assistance, that total cost of the
project or undertaking in connection with which such assistance
is given or used, and the amount and nature of that portion of
the cost of the projects or undertaking supplied by other
sources, and such other records as will facilitate an effective audit.
(8) Access to records.--The Corporation or any of its duly
authorized representatives shall have access to any books,
documents, papers, and records of any recipient of assistance
for the purpose of auditing and examining all funds received
from the Corporation. The Comptroller General of the United
States or any of his duly authorized representatives also shall
have access to such books, documents, papers, and records for
the purpose of auditing and examining all funds received from
the Corporations during any fiscal year for which Federal funds
are available to the Corporation.
(9) Public inspection.--The Corporation shall maintain the
information described in paragraphs (6), (7), and (8) at its
offices for public inspection and copying for at least 3 years,
according to such reasonable guidelines as the Corporation may
issue. This public file shall be updated regularly.

SEC. 308. RAIL INFRASTRUCTURE FINANCE TRUST.

(a) Establishment.--The Board of Directors of the Rail
Infrastructure Finance Corporation shall establish the Rail
Infrastructure Finance Trust (hereafter in this section referred to as
the ``Trust'') as a trust domiciled in the State of Delaware. The Trust
shall, to the extent not inconsistent with this Act, be subject to the
laws of the State of Delaware that are applicable to trusts. The Trust
shall manage and invest the assets of the Rail Infrastructure Account
described in section 307(c) that are transferred to it by the Board in
the manner set forth in this section.
(b) Not a Federal Agency or Instrumentality.--The Trust is not a
department, agency, or other instrumentality of the Government of the
United States and shall not be subject to title 31, United States Code.
(c) Board of Trustees.--
(1) Establishment.--The Trust shall have a Board of
Trustees.
(2) Composition.--
(A) Appointment.--The Board of Trustees shall
consist of 5 members each of whom (hereafter in this
title referred to as a ``Trustee'') is appointed by a
unanimous vote of the Board of Directors of the Rail
Infrastructure Finance Corporation. The Board of
Directors, by unanimous vote, may remove any member of
the Board of Trustees.
(B) Representation of particular interests.--The 5
members of the Board of Trustees shall be selected as
follows:
(i) One from among persons who represent
the interests of the States.
(ii) One from among persons who represent
the interests of freight railroads.
(iii) One from among persons who represent
the interests of passenger railroads.
(iv) One from among persons who represent
the interests of holders of qualified rail
infrastructure bonds issued by the Rail
Infrastructure Finance Corporation.
(v) One from among persons whose interests
are independent of interests referred to in the
other clauses of this subparagraph.
(3) Members not united states officials.--The members of
the Board of Trustees may not be considered officers or
employees of the Government of the United States.
(4) Qualifications.--The Trustees shall be appointed only
from among persons who have experience and expertise in the
management of financial investments. No member of the Board of
Directors of the Rail Infrastructure Finance Corporation is
eligible to be a Trustee.
(5) Terms.--Each member of the Board of Trustees shall be
appointed for a 3-year term. Any member whose term has expired
may serve until such member's successor has taken office, or
until the end of the calendar year in which such member's term
has expired, whichever is earlier. A vacancy in the Board of
Trustees shall not affect the powers of the Board of Trustees
and shall be filled in the same manner as the member whose
departure caused the vacancy. Any member appointed to fill a
vacancy occurring prior to the expiration of the term for which
such member's predecessor was appointed shall be appointed for
the remainder of such term.
(d) Powers.--The Board of Trustees shall--
(1) establish investment policies, including guidelines,
and retain independent advisers to assist in the formulation
and adoption of the investment guidelines;
(2) retain independent investment managers to invest the
assets of the Trust in a manner consistent with such investment
guidelines;
(3) invest assets in the Trust, pursuant to the policies
adopted in paragraph (1);
(4) pay administrative expenses of the Trust from the
assets in the Trust; and
(5) transfer money to the Rail Infrastructure Investment
Account, upon request of the Board of Directors of the Rail
Infrastructure Finance Corporation, for bond repayment and
administrative expenses, and for grants under subtitle B.
(e) Reporting Requirements and Fiduciary Standards.--The following
reporting requirements and fiduciary standards shall apply with respect
to the Trust:
(1) Duties of the board of trustees.--The Trust and each
member of the Board of Trustees shall discharge the duties of
the Trust and the duties of the Trustee, respectively
(including the voting of proxies), with respect to the assets
of the Trust solely in the interests of the Rail Infrastructure
Finance Corporation and the programs funded under this title--
(A) for the exclusive purposes of--
(i) providing sufficient funds to repay
qualified rail infrastructure bonds issued by
the Rail Infrastructure Finance Corporation, to
fund the administrative costs of the Rail
Infrastructure Finance Corporation and to provide grants for rail
capital projects under subtitle B; and
(ii) defraying reasonable expenses of
administering the Trust;
(B) with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a
like character and with like aims;
(C) by diversifying investments so as to minimize
the risk of large losses and to avoid disproportionate
influence over a particular industry or firm, unless
under the circumstances it is clearly prudent not to do
so; and
(D) in accordance with Trust governing documents
and instruments insofar as such documents and
instruments are consistent with this Act.
(2) Prohibitions with respect to members of the board of
trustees.--A member of the Board of Trustees may not--
(A) deal with the assets of the Trust in the
Trustee's own interest or for the Trustee's own
account;
(B) in an individual or in any other capacity, act
in any transaction involving the assets of the Trust on
behalf of a party (or represent a party) whose
interests are adverse to the interests of the Trust and
the Rail Infrastructure Finance Corporation; or
(C) receive any consideration for the Trustee's own
personal account from any party dealing with the assets
of the Trust.
(3) Exculpatory provisions and insurance.--Any provision in
an agreement or instrument that purports to relieve a Trustee
from responsibility or liability for any responsibility,
obligation, or duty under this Act shall be void. Nothing in
this paragraph shall be construed to preclude--
(A) the Trust from purchasing insurance for its
Trustees or for itself to cover liability or losses
occurring by reason of the act or omission of a
Trustee, if such insurance permits recourse by the
insurer against the Trustee in the case of a breach of
a fiduciary obligation by such Trustee;
(B) a Trustee from purchasing insurance to cover
liability under this section from and for his own
account; or
(C) an employer or an employee organization from
purchasing insurance to cover potential liability of 1
or more Trustees with respect to their fiduciary
responsibilities, obligations, and duties under this
section.
(4) Trustees bonds.--
(A) Requirement.--Each Trustee and every person who
handles funds or other property of the Trust (hereafter
in this section referred to as ``Trust official'')
shall be bonded. The bond shall provide protection to
the Trust against loss by reason of acts of fraud or
dishonesty on the part of any Trust official, directly
or through the connivance of others.
(B) Amount.--The amount of a bond for a Trustee
under this paragraph shall be fixed at the beginning of
each fiscal year of the Trust by the Board of Directors
of the Rail Infrastructure Finance Corporation. The
amount may not be less than 10 percent of the amount of
the funds administered by the Trust. In no case may
such bond be less than $1,000 nor more than $500,000,
except that the Board of Directors, after consideration
of the record, may prescribe an amount in excess of
$500,000, subject to the 10 percent minimum requirement
in the preceding sentence.
(C) Unlawful conduct.--It shall be unlawful for--
(i) any Trust official to receive, handle,
disburse, or otherwise exercise custody or
control of any of the funds or other property
of the Trust without being bonded as required
by this subsection;
(ii) any Trust official, or any other
person having authority to direct the
performance of such functions, to permit such
functions, or any of them, to be performed by
any Trust official, with respect to whom the
requirements of this subsection have not been
met; and
(iii) any person to procure any bond
required by this subsection from any surety or
other company or through any agent or broker in
whose business operations such person has any
control or significant financial interest,
direct or indirect.
(f) Audit and Report.--
(1) Requirement for annual audit.--The Trust shall annually
engage an independent qualified public accountant to audit the
financial statements of the Trust.
(2) Annual management report.--The Trust shall submit an
annual management report to be included in the annual report of
the Corporation required under section 306. The management
report under this paragraph shall include the following
matters:
(A) A statement of financial position.
(B) A statement of operations.
(C) A statement of cash flows.
(D) A statement on internal accounting and
administrative control systems.
(E) The report resulting from an audit of the
financial statements of the Trust conducted under
paragraph (1).
(F) Any other comments and information necessary to
inform Congress about the operations and financial
condition of the Trust.
(3) Additional copies.--The Trust shall provide the
President and the Director of the Office of Management and
Budget a copy of the management report when it is submitted to
Congress.
(g) Enforcement.--The Rail Infrastructure Finance Corporation may
commence a civil action--
(1) to enjoin any act or practice by the Trust, its Board
of Trustees, or its employees or agents that violates any
provision of this Act; or
(2) to obtain other appropriate relief to redress such
violations, or to enforce any provisions of this Act.
(h) Administrative Matters.--
(1) Authority.--The Board of Trustees shall have the
authority to make rules to govern its operations, employ
professional staff, and contract with outside advisers
(including the Rail Infrastructure Finance Corporation) to
provide legal, accounting, investment advisory, or other
services necessary for the proper administration of this
section. In the case of a contract for investment advisory
services, compensation for such services may be provided on a
fixed fee basis or on such other terms and conditions as are
customary for such services.
(2) Quorum and proceedings.--Three members of the Board of
Trustees shall constitute a quorum for the Board to conduct
business. Investment guidelines shall be adopted by a unanimous
vote of the entire Board of Trustees. All other decisions of
the Board of Trustees shall be decided by a majority vote of
the quorum present. All decisions of the Board of Trustees
shall be entered upon the records of the Board of Trustees.
(3) Compensation of trustees and employees.--The salaries
of the Trustees and the employees of the Trust are subject to
the limitations in section 303.
(4) Funding.--The expenses of the Trust and the Board of
Trustees that are incurred under this section shall be paid
from the Trust.
(i) Exemption From Tax for Rail Infrastructure Finance Trust.--
Subsection (c) of section 501 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new paragraph:
``(29) The Rail Infrastructure Finance Trust established
under section 308 of the American Rail Equity Act of 2003.''.

Subtitle B--Rail Development Grant Program

SEC. 311. NATIONAL SYSTEM IMPROVEMENT GRANT PROGRAM.

(a) Grants to States.--The Board of Directors of the Rail
Infrastructure Finance Corporation may, by grant, provide financial
assistance to a State, group of States, or the National Railroad
Passenger Corporation, for, or in connection with, intercity passenger
rail capital projects that are--
(1) designated as National System Improvement Projects
under section 22506 of title 49, United States Code; and
(2) as determined by the Board, will significantly benefit
the National System, as designated under section 25002(a) of
title 49, United States Code, of intercity passenger rail
infrastructure or services.
(b) Project Selection Criteria.--The Board, in selecting the
recipients of financial assistance to be provided under subsection (a),
shall--
(1) give preference to projects that most significantly
improve intercity passenger rail service on routes of the
National System through increased frequency of on-time
performance, reduced trip time, higher ridership, increased
service frequency, or other service measures as defined under
section 22506 of title 49, United States Code;
(2) give preference to projects that effect multiple routes
or the entire National System;
(3) require that each proposed project meet all safety
requirements that are applicable to the project under law, and
give a preference to any project determined by the Board as
having provided for particularly high levels of safety;
(4) encourage intermodal connectivity through projects that
provide direct connections between train stations, airports,
bus terminals, subway stations, ferry ports, and other modes of
transportation;
(5) ensure a general balance across geographic regions of
the United States in providing such assistance and avoid a
concentration of a disproportionate amount of such financial
assistance in a single project or region of the country;
(6) favor projects that are expected to have a significant
favorable impact on air or highway traffic congestion;
(7) encourage projects that also improve freight or
commuter rail operations;
(8) favor projects that either--
(A) have significant environmental benefits; or
(B) are--
(i) at a stage of preparation that all
precommencement compliance with environmental
protection requirements has already been
completed; and
(ii) ready to be commenced;
(9) favor projects with positive economic and employment
impacts;
(10) encourage the use of positive train control
technologies;
(11) favor projects that have commitments of funding from
non-Federal Government sources in a total amount that exceeds
the minimum amount of the non-Federal contribution required
under section 315(a);
(12) ensure that each project is compatible with, and is
operated in conformance with--
(A) plans developed pursuant to the requirements of
sections 134 and 135 of title 23, United States Code;
(B) State rail plans under chapter 225 of title 49,
United States Code; and
(C) the national rail plan; and
(13) favor projects that enhance national security.
(c) Amtrak Eligibility.--To receive a grant under this section, the
National Railroad Passenger Corporation may enter into a cooperative
agreement with 1 or more States to carry out 1 or more projects on an
approved State rail plan's ranked list of priority freight and
passenger rail capital projects developed under section 22504(5) of
title 49, United States Code, or may submit an independent application
for a grant for any project designated as a National System Improvement
Project under section 22506 of title 49, United States Code. Any such
independent grant request shall be subject to the same selection
criteria as apply under subsection (b) to projects of States, except
the criteria set forth in subparagraphs (A) and (B) of subsection
(b)(12).
(d) Limitations.--
(1) Two-year availability.--If any amount provided as a
grant to a State or the National Railroad Passenger Corporation
under this section is not obligated or expended for the
purposes described in subsections (a) and (b) within 2 years,
such sums shall be returned to the Board for other national
system improvement projects under this section at the
discretion of the Board.
(2) Single project amount.--In awarding grants to States
for eligible projects under this section, the Board shall limit
the amount of any grant made for a particular project in a
fiscal year to not more than 30 percent of the total amount of
the funds available for grants under this section for that
fiscal year.
(3) Amtrak.--The total amount of grants made under this
section to the National Railroad Passenger Corporation in a
fiscal year may not exceed 50 percent of the total amount
available under this section for all grants in that fiscal
year.
(4) Northeast corridor projects.--The total amount of
grants made under this section for the Northeast Corridor in a
fiscal year may not exceed 25 percent of the total amount
available under this section for all grants under this section
in that fiscal year.
(5) Other projects.--The total amount of grants made under
this section for projects other than projects for the Northeast
Corridor in any fiscal year may not exceed 75 percent of the
total amount available under this section for all grants under
this section in that fiscal year.
(6) Northeast corridor defined.--In this section, the term
``Northeast Corridor'' has the meaning given that term in
section 24102(6) of title 49, United States Code.
(e) Funding.--
(1) In general.--There are authorized to be appropriated to
the Secretary of Transportation for fiscal years 2004 through
2009 such sums as may be necessary to carry out subsections (a)
through (e) of this section.
(2) Northeast corridor freight-only track.--
(A) In general.--Notwithstanding any other
provision of this section, there are authorized to be
appropriated to the Secretary of Transportation for the
construction of a freight-only track on the Northeast
Corridor for fiscal year 2005 $125,000,000, including
capital improvements, improvements to signal systems,
high-speed interlockings, track, and bridges, such sum
to remain available until expended.
(B) Financial contribution from other users.--The
Secrtary shall consider the feasibility of seeking a
financial contribution to the construction of the track
and capital improvements related thereto from other
users.
(C) Project construction.--The Secretary shall
coordinate construction of the track with the owner of
the freight easement on the Northeast Corridor to
ensure that current service commitments for both
passenger and freight rail transportation are
maintained.

SEC. 312. GRANT PROGRAM REQUIREMENTS AND LIMITATIONS.

(a) Authorized Uses.--The proceeds of a grant made for a project
under this subtitle may be used to defray the costs of the project or
to reimburse the recipient for costs of the project paid by the
recipient.
(b) Non-Federal Contribution.--The proceeds of a grant for 1 or
more projects under this subtitle may be released upon receipt by the
Board of Directors of the Rail Infrastructure Finance Corporation of
cash payment by a non-Federal Government source, or 1 or more such
sources jointly, in an amount not less than the amount equal to 20
percent of the amount of the grant disbursed. The cash payment may not
be derived, directly or indirectly, from Federal funds. Amounts
received under this subsection shall be credited to the Rail
Infrastructure Investment Account established under section 307(c).
(c) Preference Involving Donated Property Interests and Services.--
In selecting projects for grant funding under this subtitle, the Board
may give preference to projects that involve donated right-of-way,
property, or in-kind services by a public sector or private sector
entity. The value of a donation under subsection (c) may not be counted
toward satisfaction of the requirement in subsection (b).
(d) Flexibility.--Notwithstanding any other provision of this
subtitle, amounts made available under section 316 may be combined and
used for projects that significantly benefit both freight rail service
and intercity passenger rail service.
(e) Suballocation; Public-Private Partnerships.--
(1) In general.--A metropolitan planning organization,
State transportation department, or other project sponsor may
enter into an agreement with any public, private, or nonprofit
entity to cooperatively implement any project funded with a
grant under this subtitle.
(2) Forms of participation.--Participation by an entity
under paragraph (1) may consist of--
(A) ownership or operation of any land, facility,
locomotive, rail car, vehicle, or other physical asset
associated with the project;
(B) cost-sharing of any project expense;
(C) carrying out administration, construction
management, project management, project operation, or
any other management or operational duty associated
with the project; and
(D) any other form of participation approved by the
Board.
(3) Sub-allocation.--A State may allocate funds under this
section to any entity described in paragraph (1).
(f) Applications.--To seek a grant under this subtitle, a State or,
in the case of a grant under section 311, the National Railroad
Passenger Corporation shall submit an application for the grant to the
Board. The application shall be submitted at such time and contain such
information as the Board requires.
(g) Procedures for Grant Award.--The Board shall prescribe
procedures for the awarding of grants under this subtitle, including
application and qualification procedures and a record of decision on
applicant eligibility. The procedures shall include the execution of a
grant agreement between the applicant and the Board. The Board shall
initiate rulemaking for the purpose of this subsection not later than
90 days after the date of the enactment of this Act.

Subtitle C--Rail Infrastructure Tax Credit Bonds

SEC. 321. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

(a) In General.--Part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to credits against tax) is
amended by adding at the end the following new subpart:

``Subpart H--Nonrefundable Credit for Holders of Qualified Rail
Infrastructure Bonds

``Sec. 54. Credit to holders of qualified
rail infrastructure bonds.

``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who holds a
qualified rail infrastructure bond on a credit allowance date of such
bond which occurs during the taxable year, there shall be allowed as a
credit against the tax imposed by this chapter for such taxable year an
amount equal to the sum of the credits determined under subsection (b)
with respect to credit allowance dates during such year on which the
taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a qualified rail infrastructure bond is 25 percent of the
annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified rail infrastructure bond is the
product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate with respect to an issue is the
rate equal to an average market yield (as of the day before the
date of sale of the issue) on outstanding long-term corporate
debt obligations (determined under regulations prescribed by
the Secretary).
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
part (other than this subpart and subpart C).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
``(d) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(e) Qualified Rail Infrastructure Bond.--For purposes of this
part, the term `qualified rail infrastructure bond' means any bond
issued as part of an issue if--
``(1) the bond is issued by the Rail Infrastructure Finance
Corporation and is in registered form,
``(2) the term of each bond which is part of such issue
does not exceed 20 years,
``(3) the payment of principal with respect to such bond is
the obligation of the Rail Infrastructure Finance Corporation
and not an obligation of the United States,
``(4) all proceeds from the sale of the issue are used for
the purposes set forth in section 307(c)(5) of the American
Rail Equity Act of 2003, and
``(5) 95 percent or more of the net spendable proceeds from
the sale of such issue are to be used for expenditures incurred
after the date of enactment of the American Rail Equity Act of
2003 for any project described in section 311, 312, 313, or 314
of that Act.
``(f) Special Rules Relating to Arbitrage.--
``(1) In general.--Subject to paragraph (2), an issue shall
be treated as meeting the requirements of this subsection if,
as of the date of issuance, the issuer reasonably expects--
``(A) to award grants under sections 311, 312, 313,
and 314 of the American Rail Equity Act of 2003 in a
total amount that is at least 95 percent of the net
spendable proceeds of the issue for 1 or more qualified
projects within the 3-year period beginning on such
date,
``(B) to incur a binding commitment with a third
party--
``(i) to spend at least 10 percent of the
net spendable proceeds of the issue, or to
commence construction, with respect to such
projects within the 6-month period beginning on
such date, and
``(ii) to proceed with due diligence to
complete such projects, and
``(C) to expend the total amount of the net
spendable proceeds of the issue.
``(2) Rules regarding continuing compliance after 3-year
determination.--If at least 95 percent of the net spendable
proceeds of the issue is not awarded as grants to be expended
for 1 or more qualified projects within the 3-year period
beginning on the date of issuance, but the requirements of
paragraph (1) are otherwise met, an issue shall be treated as
continuing to meet the requirements of paragraph (1) if either
the requirement under subparagraph (A) or the requirements
under subparagraph (B) are met, as follows:
``(A) The issuer uses all unspent proceeds from the
sale of the issue to redeem bonds of the issue within
90 days after the end of such 3-year period and
disburses any remaining net spendable proceeds to the
Secretary of Transportation within 30 days after the
end of such 3-year period.
``(B) The issuer--
``(i) awards in grants under sections 311,
312, 313, and 314 of the American Rail Equity
Act of 2003 at least 75 percent of the net
spendable proceeds of the issue for 1 or more
qualified projects within the 3-year period
beginning on the date of issuance, and
``(ii) either--
``(I) awards in grants under
sections 311, 312, 313, and 314 of the
American Rail Equity Act of 2003 at
least 95 percent of the net spendable
proceeds of the issue for 1 or more
qualified projects within the 4-year
period beginning on the date of
issuance, or
``(II) pays to the Federal
Government any earnings on the proceeds
from the sale of the issue that accrue
after the end of the 3-year period
beginning on the date of issuance and
uses all unspent proceeds from the sale
of the issue to redeem bonds of the
issue within 90 days after the end of
the 4-year period beginning on the date
of issuance.
``(g) Recapture of Portion of Credit Where Cessation of
Compliance.--
``(1) In general.--If any bond which when issued purported
to be a qualified rail infrastructure bond ceases to be such a
qualified bond, the issuer shall pay to the United States (at
the time required by the Secretary) an amount equal to the sum
of--
``(A) the aggregate of the credits allowable under
this section with respect to such bond (determined
without regard to subsection (c)) for taxable years
ending during the calendar year in which such cessation
occurs and the 2 preceding calendar years, and
``(B) interest at the underpayment rate under
section 6621 on the amount determined under
subparagraph (A) for each calendar year for the period
beginning on the first day of such calendar year.
``(2) Failure to pay.--If the issuer fails to timely pay
the amount required by paragraph (1) with respect to such bond,
the tax imposed by this chapter on each holder of any such bond
which is part of such issue shall be increased (for the taxable year of
the holder in which such cessation occurs) by the aggregate decrease in
the credits allowed under this section to such holder for taxable years
beginning in such 3 calendar years which would have resulted solely
from denying any credit under this section with respect to such issue
for such taxable years.
``(3) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable
year shall be increased under paragraph (2) only with
respect to credits allowed by reason of this section
which were used to reduce tax liability. In the case of
credits not so used to reduce tax liability, the
carryforwards and carrybacks under section 39 shall be
appropriately adjusted.
``(B) No credits against tax.--Any increase in tax
under paragraph (2) shall not be treated as a tax
imposed by this chapter for purposes of determining--
``(i) the amount of any credit allowable
under this part, or
``(ii) the amount of the tax imposed by
section 55(19).
``(h) Rail Infrastructure Finance Trust.--
``(1) In general.--The following amounts shall be held in a
trust account by the Rail Infrastructure Finance Corporation:
``(A) An amount of the proceeds from the sale of
all bonds designated for purposes of this section that,
when combined with amounts described in subparagraphs
(B), (C), and (D), is sufficient--
``(i) to ensure the Corporation's ability
to redeem all bonds upon maturity; and
``(ii) to pay the administrative expenses
of the Corporation and the Rail Infrastructure
Finance Trust.
``(B) The amount of any non-Federal contributions
required under section 304(a) of the American Rail
Equity Act of 2003.
``(C) The temporary period investment earnings on
proceeds from the sale of such bonds.
``(D) Any earnings on any amounts described in
subparagraph (A), (B), or (C).
``(2) Use of funds.--Amounts in the trust account may be
used only for investment purposes to generate sufficient funds
to redeem qualified rail infrastructure bonds at maturity and
pay the administrative expenses of the Corporation and the
Trust, and for funding grants as provided for in section
307(c)(5)(B) of the American Rail Equity Act of 2003.
``(3) Use of remaining funds in trust account.--If the
Corporation determines that the amount in the trust account
exceeds the amount required to comply with paragraph (2), the
Corporation shall transfer the excess to the Rail
Infrastructure Finance Trust.
``(i) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Net spendable proceeds.--The term `net spendable
proceeds' has the meaning give such term in section 307(c)(6)
of the American Rail Equity Act of 2003.
``(3) Qualified project.--The term `qualified project'
means any project that is eligible for grant funding under
section 311, 312, 313, or 314 of the American Rail Equity Act
of 2003.
``(4) Partnership; s corporation; and other pass-thru
entities.--Under regulations prescribed by the Secretary, in
the case of a partnership, trust, S corporation, or other pass-
thru entity, rules similar to the rules of section 41(g) shall
apply with respect to the credit allowable under subsection
(a).
``(5) Bonds held by regulated investment companies.--If any
qualified rail infrastructure bond is held by a regulated
investment company, the credit determined under subsection (a)
shall be allowed to shareholders of such company under
procedures prescribed by the Secretary.
``(6) Reporting.--Issuers of qualified rail infrastructure
bonds shall submit reports similar to the reports required
under section 149(e).''.
(b) Amendments to Other Code Sections.--
(1) Reporting.--Subsection (d) of section 6049 of the
Internal Revenue Code of 1986 (relating to returns regarding
payments of interest) is amended by adding at the end the
following new paragraph:
``(8) Reporting of credit on qualified rail infrastructure
bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54(d) and such amounts shall
be treated as paid on the credit allowance date (as
defined in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(2) Treatment for estimated tax purposes.--
(A) Individual.--Section 6654 of such Code
(relating to failure by individual to pay estimated
income tax) is amended by redesignating subsection (m)
as subsection (n) and by inserting after subsection (l)
the following new subsection:
``(m) Special Rule for Holders of Qualified Rail Infrastructure
Bonds.--For purposes of this section, the credit allowed by section 54
to a taxpayer by reason of holding a qualified rail infrastructure bond
on a credit allowance date shall be treated as if it were a payment of
estimated tax made by the taxpayer on such date.''.
(B) Corporate.--Section 6655 of such Code (relating
to failure by corporation to pay estimated income tax)
is amended by adding at the end of subsection (g) the
following new paragraph:
``(5) Special rule for holders of qualified rail
infrastructure bonds.--For purposes of this section, the credit
allowed by section 54 to a taxpayer by reason of holding a qualified
rail infrastructure bond on a credit allowance date shall be treated as
if it were a payment of estimated tax made by the taxpayer on such
date.''.
(c) Clerical Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:

``Subpart H. Nonrefundable Credit for
Holders of Qualified Rail
Infrastructure Bonds.''.
(2) Section 6401(b)(1) is amended by striking ``and G'' and
inserting ``G, and H''.

SEC. 322. ANNUAL REPORT BY TREASURY ON RAIL INFRASTRUCTURE TRUST
ACCOUNT.

The Secretary of the Treasury shall annually report to Congress as
to whether the amount deposited in the trust account established by the
Rail Infrastructure Finance Corporation under section 54(i) of the
Internal Revenue Code of 1986, as added by section 321, is sufficient
to fully repay at maturity the principal of any outstanding qualified
rail infrastructure bonds issued pursuant to section 54 of such Code
(as so added), together with amounts expected to be deposited into such
account, as certified by the Rail Infrastructure Finance Corporation in
accordance with procedures prescribed by the Secretary of the Treasury.

SEC. 323. ISSUANCE OF REGULATIONS.

The Secretary of the Treasury shall issue regulations required
under section 54 of the Internal Revenue Code of 1986 (as added by this
section 321) not later than 90 days after the date of the enactment of
this Act.

SEC. 324. EFFECTIVE DATE.

The amendments made by section 321 shall apply to obligations
issued after the date of enactment of this Act.

TITLE IV--RAIL INFRASTRUCTURE AND INTERMODAL TRANSPORTATION

SEC. 401. INTERMODAL TRANSPORTATION POLICY.

Section 302(e) is amended by striking ``system'' and inserting
``system, including freight and passenger rail service and maritime
transportation, including such transportation via inland waterways,''.

SEC. 402. STATE RAIL PLANS.

(a) In General.--Part B of subtitle V is amended by adding at the
end the following:

``CHAPTER 225--STATE RAIL PLANS

``Sec.
``22501. Authority.
``22502. Purposes and coordination.
``22503. Transparency and review.
``22504. Content.
``22505. High priority projects.
``22506. Approval.
``22507. Definitions.
``Sec. 22501. Authority
``(a) In General.--Each State may prepare and maintain a State rail
plan in accordance with the provisions of this chapter.
``(b) Requirements.--For the preparation and periodic revision of a
State rail plan, a State shall--
``(1) establish or designate a State rail transportation
authority to prepare, maintain, coordinate, and administer the
plan;
``(2) establish or designate a State rail plan approval
authority to approve the plan;
``(3) submit the approved plan to the Secretary of
Transportation for approval; and
``(4) revise and resubmit an approved plan no less
frequently than once every 7 years for reapproval by the
Secretary.
``Sec. 22502. Purposes and coordination
``(a) Purposes.--The purposes of a State rail plan are as follows:
``(1) To set forth State policy for all freight and
passenger rail transportation, including commuter rail
operations, in the State.
``(2) To establish the period covered by the State rail
plan.
``(3) To present priorities and strategies to preserve,
enhance, or expand rail service in the State.
``(4) To serve as the basis for Federal and State rail
investments within the State.
``(b) Coordination.--A State rail plan shall be coordinated with
other State transportation planning goals and programs and set forth
rail transportation's role within the State transportation system.
``Sec. 22503. Transparency and review
``(a) Preparation.--A State shall provide adequate and reasonable
notice and opportunity for comment and other input to the public, rail
carriers, commuter and transit authorities operating in, or affected by
rail operations within the State, units of local government, and other
interested parties in the preparation and review of its State rail
plan.
``(b) Annual Reviews.--Each State shall transmit an annual report
on its plan to the Secretary of Transportation. The report shall
include, for the year preceding the year in which submitted, the
following matters:
``(1) A review of progress made, and actions taken, under
the plan during the year.
``(2) A schedule of actions to be taken during the current
year.
``(3) Any modifications made in the plan after approval of
the plan by the Secretary or after the submission of the most
recent annual report on the plan to the Secretary, including
any modifications made to the priority freight or passenger
rail capital project list required by section 22504(a)(5) of
this title.
``(c) Approval of Modified Plans.--Each modification of a State
rail plan that is determined substantive by the Secretary, including
any modification to a priority freight or passenger rail capital
project list required by section 22504(a)(5) of this title, is subject
to approval (for the purposes of this chapter) by the Secretary.
``Sec. 22504. Content
``(a) In General.--Each State rail plan shall contain the
following:
``(1) An evaluation of the existing overall rail
transportation system and rail services and facilities within
the State, a prioritization of such services and facilities in
terms of their contributions to the State's rail and
transportation system.
``(2) A comprehensive review of all rail lines within the
State, including proposed high speed rail corridors and
significant rail line segments not currently in service,
containing an analysis of the transportation services provided
by those lines, their ownership, operating characteristics, the
state of their infrastructure (including capital and
maintenance requirements), and the economic and environmental
impact of those lines.
``(3) A statement of freight and passenger rail service
objectives, including minimum service levels, for rail
transportation routes in the State.
``(4) A general analysis and quantification of rail's
transportation, economic, and environmental impacts in the
State, including congestion mitigation, trade and economic
development, air quality, land-use, energy-use, and community
impacts.
``(5) A long-range rail service and investment program for
current and future freight and passenger services in the State
that meets the requirements of subsection (b).
``(6) A statement of rail financing issues in the State,
including a list of current and prospective capital and
operating funding resources, public subsidies, State and
Federal taxation, and other financial policies relating to rail
service and rail infrastructure development.
``(7) A statement of rail service issues within the State,
such as congestion and capacity, and current system
deficiencies on a regional, intrastate, and interstate basis,
that reflects consultation with neighboring States and
describes any coordination of regional rail service.
``(8) A review of major passenger and freight intermodal
rail connections and facilities within the State, including
seaports, and options to maximize service integration and
efficiency between rail and other modes of transportation
within the State.
``(9) A description of new technology that relates to rail
transportation within the State, including logistics and
process improvements.
``(10) A review of plans and projects within the State to
improve rail transportation safety and security, including all
major projects funded under section 130 of title 23.
``(11) A performance evaluation of passenger rail services
operating in the State, including possible improvements in
those services, and a description of strategies to achieve
those improvements.
``(12) A description of activities by regional planning
agencies, regional transportation authorities, and
municipalities in the State on freight and passenger rail
service within the State, or in the region in which the State
is located, including a presentation of any recommendations
made by such agencies, authorities, and municipalities.
``(13) A compilation of studies and reports on high-speed
rail corridor development within the State not included in a
previous plan under this chapter, and a plan for funding any
recommended development of such corridors in the State.
``(14) A statement that the State is in compliance with the
requirements of section 22102.
``(b) Long-Range Service and Investment Program.--
``(1) Program content.--A long-range rail service and
investment program included in a State rail plan under
subsection (a)(5) shall include the following matters:
``(A) Two ranked lists for rail capital projects,
one for priority freight rail capital projects and one
for priority passenger rail capital projects.
``(B) A detailed funding plan for the projects.
``(2) Project list content.--The ranked list of priority
freight and passenger rail capital projects shall contain--
``(A) a description of the anticipated public and
private benefits of each such project; and
``(B) a statement of the correlation between--
``(i) private funding contributions for the
projects; and
``(ii) the private benefits.
``(3) Considerations for project list.--In preparing the
ranked list of priority freight and passenger rail capital
projects, a State rail transportation authority shall take into
consideration the following matters:
``(A) Contributions made by non-Federal Government
and non-State sources through user fees, matching
funds, or other private capital involvement.
``(B) Rail capacity and congestion effects.
``(C) Highway and transportation system congestion
mitigation.
``(D) Regional balance.
``(E) Environmental impact.
``(F) Competitive and service impact for rail
carriers and shippers.
``(G) Preservation of rail service.
``(H) Economic and employment impacts.
``(I) Projected ridership for passenger projects.
``(c) Waiver.--The Secretary may waive the any requirement of
subsection (a), except the requirement in paragraph (5) of such
subsection, upon application under circumstances that the Secretary
determines appropriate.
``Sec. 22505. High priority projects
``(a) Designation of Projects.--The Secretary of Transportation may
designate as a high priority project any project that meets both of the
following criteria:
``(1) The project is on a ranked list of priority freight
and passenger rail capital projects that is included in a State
rail plan under section 22504(5).
``(2) The project focuses on key rail congestion points
that are selected by the Secretary--
``(A) on the basis of national benefits to the rail
transportation system; and
``(B) coordinated with the national rail plan.
``(b) Preferred Projects.--The Secretary, in designating high
priority projects, shall give preference to--
``(1) projects that have national significance for--
``(A) improving the national rail network and the
Nation's transportation system;
``(B) ensuring particularly high levels of safety;
``(C) increasing intermodal connectivity by
providing or improving direct connections between rail
facilities and other modes of transportation;
``(D) significantly affecting highway, aviation, or
maritime capacity, congestion, or safety;
``(E) improving both intercity passenger rail an
freight rail services;
``(F) enhancing rail completion or freight rail
service for shippers;
``(G) causing positive economic and employment
results;
``(H) producing significant environmental or
community benefits;
``(I) having received financial commitments and
other support from numerous entities such as States,
local governments, or private entities;
``(J) enhancing international trade;
``(K) enhancing national security; or
``(L) employing positive train control
technologies; and
``(2) projects that are at the stage of preparation that
all precommencement compliance with environmental protection
requirements has been completed and the projects are ready to
commence.
``(c) Regional Balance and Compatibility.--The Secretary, in
designating high priority projects, shall ensure that--
``(1) the geographic distribution of the projects
designated as high priority projects is generally balanced
among the geographic regions of the United States and a
disproportionate number of such projects is not concentrated in
a single region or State; and
``(2) all projects are compatible with, and carried out in
conformance with--
``(A) plans developed pursuant to the requirements
of sections 134 and 135 of title 23; and
``(B) the national rail plan.
``Sec. 22506. Approval
``(a) Criteria.--The Secretary may approve a State rail plan for
the purposes of this chapter if--
``(1) the plan meets all of the requirements applicable to
State plans under this chapter;
``(2) for each project listed on the ranked list of
priority freight and passenger rail capital projects under the
plan--
``(A) the project meets all safety requirements
that are applicable to the project under law; and
``(B) the State has entered into an agreement with
any owner of rail infrastructure directly affected by
the project that provides for the State to proceed with
the project; and
``(3) the content of the plan is coordinated with--
``(A) plans developed pursuant to the requirements
of sections 134 and 135 of title 23; and
``(B) the national rail plan and any other
transportation plan of the Federal Government that is
required by law.
``(b) Procedures for State Rail Plan Submission and Approval.--The
Secretary shall prescribe procedures for States to submit State rail
plans for review under this subtitle, including application and
qualification procedures. The procedures shall provide for the
Secretary to review a State rail plan and issue a record of decision of
approval or disapproval, with comment, on such plan within 180 days
after the plan is submitted.
``Sec. 22507. Definitions
``In this chapter:
``(1) Private benefit.--The term `private benefit' means a
benefit accrued to a person or private entity that directly
improves the economic and competitive condition of that person
or entity through improved assets, cost reductions, service
improvements, or any other means as defined by the Secretary.
``(2) Public benefit.--The term `public benefit' means a
benefit accrued to the public in the form of enhanced mobility
of people or goods, environmental protection or enhancement,
congestion mitigation, enhanced trade and economic development,
improved air quality or land use, more efficient energy use,
enhanced public safety or security, reduction of public
expenditures due to improved transportation efficiency or
infrastructure preservation, and any other positive community
effects as defined by the Secretary.
``(3) State.--The term `State' means any of the 50 States
and the District of Columbia.
``(4) State rail transportation authority.--The term `State
rail transportation authority' means the State agency or
official responsible under the direction of the Governor of the
State or a State law for preparation, maintenance,
coordination, and administration of the State rail plan.''.
(b) Clerical Amendment.--The table of chapters for subtitle V is
amended by inserting after the item relating to chapter 223 the
following:

``225. STATE RAIL PLANS.....................................   22501''.
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