Rail Passenger Service Restructuring, Reauthorization, and Development Act

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2306 Introduced in Senate (IS)]

108th CONGRESS
2d Session
S. 2306

To reauthorize, restructure, and reform the intercity passenger rail
service program.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

April 8, 2004

Mr. McCain (for himself and Mr. Sununu) introduced the following bill;
which was read twice and referred to the Committee on Commerce,
Science, and Transportation

_______________________________________________________________________

A BILL

To reauthorize, restructure, and reform the intercity passenger rail
service program.

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 ``Rail Passenger Service
Restructuring, Reauthorization, and Development Act''.

SEC. 2. TABLE OF CONTENTS; AMENDMENT OF TITLE 49, UNITED STATES CODE.

(a) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title.
Sec. 2. Table of contents; amendment of title 49, United States Code.
TITLE I--NETWORK RESTRUCTURING AND COST-SHARING

Subtitle A--Restructuring

Sec. 101. Findings, purpose, and goals.
Sec. 102. Passenger rail service restructuring.
Sec. 103. Definitions.
Sec. 104. Operating grants for corridor routes.
Sec. 105. Operating grants for long distance routes.
Sec. 106. Long distance route restructuring commission.
Sec. 107. Criteria for restructuring.
Sec. 108. Implementation of restructuring plan.
Sec. 109. Redemption of common stock.
Sec. 110. Retirement of preferred stock; transfer of assets.
Sec. 111. Real estate and asset sales; other.
Subtitle B--Northeast Corridor

Sec. 131. Interstate compact for the Northeast Corridor.
Sec. 132. Shut-down of commuter or freight operations.
Sec. 133. Capital grants for the Northeast Corridor.
Subtitle C--Related Matters

Sec. 151. Fair and open competition.
Sec. 152. Access to other railroads.
Sec. 153. Limitations on rail passenger transportation liability.
Sec. 154. Train operations insurance pool.
Sec. 155. Collective bargaining arrangements.
TITLE II--RAIL DEVELOPMENT

Sec. 201. Capital assistance for intercity passenger rail service.
Sec. 202. Regulations
TITLE III--REFORMS

Sec. 301. Management of secured debt.
Sec. 302. Employee transition assistance.
Sec. 303. Termination of authority for GSA to provide services to
Amtrak.
Sec. 304. Amtrak reform board of directors.
Sec. 305. Limitations on availability of grants.
Sec. 306. Repeal of obsolete and executed provisions of law.
Sec. 307. Establishment of financial accounting system.
Sec. 308. Restructuring of long-term debt and capital leases.
Sec. 309. Authorization of appropriations.
(b) Amendment of Title 49.--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.

TITLE I--NETWORK RESTRUCTURING AND COST-SHARING

Subtitle A--Restructuring

SEC. 101. FINDINGS, PURPOSE, AND GOALS.

Section 24101 is amended to read as follows:
``Sec. 24101. Findings, purpose, and goals
``(a) Findings.--
``(1) It is in the public interest of the United States to
encourage and promote the development of various modes of
transportation and transportation infrastructure to efficiently
maximize the mobility of passengers and goods.
``(2) Despite Federal subsidies of nearly $27 billion over
the past 34 years, intercity rail passenger service still
accounts for less than 1 percent of all intercity travel.
``(3) Intercity rail passenger service can be competitive
with other modes of transportation and achieve a significant
share of the travel market in short-distance corridors
connecting metropolitan areas.
``(4) Rail passenger transportation can help alleviate
overcrowding of airways and airports, and can provide needed
intermodal connections to airports, bus terminals, and mass
transit services.
``(5) Corridor routes account for approximately 85 percent
of Amtrak's ridership but only one-third of Amtrak's operating
losses, excluding depreciation.
``(6) A number of Amtrak's long-distance routes may be more
efficiently operated and attract higher ridership as connected
corridors.
``(7) Long-distance routes that cannot be restructured as
connected corridors, do not receive State financial support,
cannot be operated on a for-profit basis, or are not an
essential link to the rest of the intercity passenger rail
network, should be consolidated or discontinued.
``(8) Some States with corridor services provide
significant financial support for such services, while other
States with routes and all States with long-distance routes
contribute nothing for such services. More equitable cost-
sharing is needed to justify Federal investment in intercity
rail passenger service.
``(9) The need to invest taxpayer dollars in intercity rail
passenger service demands that fair and open competition be
permitted for the provision of such services to ensure that
service is provided in the most efficient manner without
jeopardizing the safety of such operations.
``(10) A greater degree of cooperation is necessary among
intercity passenger service operators, freight railroads,
State, regional, and local governments, the private sector,
labor organizations, and suppliers of services and equipment to
achieve the performance sufficient to justify the expenditure
of additional public money on intercity rail passenger service.
``(11) Transportation services provided by the private
freight railroads are vital to the economy and national defense
and should not be disadvantaged by the operation of intercity
passenger rail service over their rights-of-way.
``(12) The Northeast Corridor is a valuable resource of the
United States used by intercity and commuter rail passenger
transportation and freight transportation and should be
restored to a state of good repair.
``(b) Purpose.--The purpose of this part is to assist in the
preservation and development of conventional and high-speed intercity
rail passenger services where such services can play an important role
in facilitating passenger mobility in the United States.
``(c) Goals.--The goals of this part are--
``(1) to move toward a national network of interconnected
short-distance passenger rail corridor services;
``(2) to return the Northeast Corridor to a state of good
repair;
``(3) to establish a framework for the development of new
conventional and high-speed rail services;
``(4) to allow for train services to be operated under
contract to a State or group of States, with the operator of
the service selected by the State or group of States;
``(5) to establish equitable cost-sharing for capital
expenses and operating losses with the States; and
``(6) to encourage greater participation in the provision
of intercity rail passenger services by the private sector.''.

SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

(a) In General.--Chapter 243 is amended by inserting before section
24301 the following:
``Sec. 24300. Restructuring mandate
``(a) In General.--Within 6 months after the date of enactment of
the Rail Passenger Service Restructuring, Reauthorization, and
Development Act, the Amtrak Reform Board shall restructure Amtrak as 2
independent entities, as follows:
``(1) The national railroad passenger corporation.--One
entity shall be the National Railroad Passenger Corporation,
otherwise known as Amtrak, that shall provide overall
supervision of the restructuring of the intercity passenger
rail program.
``(2) The american passenger railway corporation.--The
other entity shall be a for profit corporation, to be known as
the American Passenger Railway Corporation, that shall be
responsible for conducting the passenger operations,
infrastructure maintenance, and related services, including
operation of reservation centers and ownership and maintenance
of rolling stock.
``(b) Articles of Incorporation and Other Documentation.--Within 6
months after the date of enactment of the Rail Passenger Service
Restructuring, Reauthorization, and Development Act, the Amtrak Reform
Board shall--
``(1) file appropriate articles of incorporation under
State law for the American Passenger Railway Corporation; and
``(2) amend the articles of incorporation and bylaws of the
National Railroad Passenger Corporation to reflect its changed
functions and responsibilities.
``(c) Roles and Responsibilities of the American Passenger Railway
Corporation.--
``(1) Railroad activities.--Consistent with the business
corporation law of the State of incorporation of the American
Passenger Railway Corporation, the Corporation shall be
qualified to undertake railroad activities of an operational or
infrastructure nature.
``(2) Rail operations and related functions.--The American
Passenger Railway Corporation--
``(A) shall have the exclusive right, until October
1, 2005, to continue to provide the intercity passenger
services provided by Amtrak on the date of enactment of
the Rail Passenger Service Restructuring,
Reauthorization, and Development Act;
``(B) shall, beginning October 1, 2005, operate
intercity passenger service only on a contractual basis
under negotiated terms and conditions;
``(C) shall operate a national reservations system;
and
``(D) subject to fulfillment of its contractual
obligations, shall have the exclusive right, until
management of the mainline of the Northeast Corridor
between Boston, Massachusetts, and Washington, District
of Columbia, is transferred to the interstate compact
created under section 131 or to another entity, to
provide the train operations, dispatching, maintenance,
and infrastructure services that are being provided by
Amtrak on the date of enactment of the Rail Passenger
Service Restructuring, Reauthorization, and Development
Act, but may provide such services beginning October 1,
2005, only on a contractual basis with the National
Railroad Passenger Corporation under negotiated terms
and conditions.
``(3) Status of corporation.--
``(A) The American Passenger Railway Corporation--
``(i) is a railroad carrier under section
20102(2) and chapters 261 and 281 of this
title;
``(ii) shall be operated and managed as a
for-profit corporation; and
``(iii) is not a department, agency, or
instrumentality of the United States Government
nor a Government corporation (as defined in
section 103 of title 5).
``(B) Chapter 105 of this title does not apply to the
American Passenger Railway Corporation, except that laws and
regulations governing safety, employee representation for
collective bargaining purposes, the handling of disputes
between carriers and employees, employee retirement, annuity,
and unemployment systems, and other dealings with employees
apply to the American Passenger Railway Corporation to the same
extent as they applied to Amtrak before the restructuring
required by this section.
``(C) Subsections (c), (d), and (f) through (l) of section
24301 of this title shall apply to the Corporation.
``(4) Chief executive officer.--Subject to further action
by the board of directors of the American Passenger Railway
Corporation, the individual who, on the date of enactment of
the Rail Passenger Service Restructuring, Reauthorization, and
Development Act, is President of Amtrak shall be offered the
position of chief executive officer of the American Passenger
Railway Corporation as soon as practicable after the
corporation is established.
``(5) Issuance of stock and assumption of debt.--The
Corporation may not issue stock or incur debt without the
express approval of the Secretary of Transportation.
``Sec. 24300A. American Passenger Railway Corporation board of
directors
``(a) In General.--
``(1) Membership.--The American Passenger Railway
Corporation shall be governed by a board of directors
consisting of 7 members appointed by the President, by and with
the advice and consent of the Senate.
``(2) Qualifications.--
``(A) In general.--Members of the board shall be
chosen from among individuals who have technical
qualifications, professional standing, and demonstrated
expertise in the field of transportation, corporate
management, or financial management.
``(B) Federal employees disqualified.--No
individual who is an officer or employee of the United
States may serve as a member of the board.
``(3) Term of office.--Each member shall serve for a term
of 5 years. An individual may not serve for more than 2 terms.
``(4) Quorum.--A majority of the board members who have
been lawfully appointed and qualified at any moment shall
constitute a quorum for the conduct of business.
``(b) Bylaws.--The board of directors shall adopt bylaws governing
the corporation consistent with the provisions of this section and its
articles of incorporation, and may amend, repeal, and otherwise modify
the bylaws from time to time as necessary or appropriate.
``(c) Transition Board Members.--Individuals who are serving as
members of the Amtrak Reform Board on the day before the date on which
the American Passenger Railway Corporation is established, with the
exception of the Secretary of Transportation, shall serve as members of
the board of directors of the American Passenger Railway Corporation
until 4 members of that board have been appointed and qualified.
``Sec. 24300B. National Railroad Passenger Corporation board after
restructuring
``(a) In General.--After the American Passenger Railway Corporation
is established, the Reform Board established under section 24302(a)
shall be dissolved, and the National Railroad Passenger Corporation
shall be governed by a board of directors consisting of--
``(1) the Secretary of Transportation;
``(2) the Federal Railroad Administrator or another officer
of the United States within the Department of Transportation
compensated under the Executive Schedule under title 5, United
States Code, who is designated by the Secretary; and
``(3) the Federal Transit Administrator or another officer
of the United States within the Department of Transportation
compensated under the Executive Schedule under title 5, who is
designated by the Secretary.
``(b) Roles and Responsibilities.--
``(1) Supervision and management.--After the board of
directors described in subsection (a) takes office, the
National Railroad Passenger Corporation shall--
``(A) provide overall supervision of the
restructuring of the intercity passenger rail program;
``(B) manage residual Amtrak responsibilities; and
``(C) retain and manage Amtrak's legal rights,
including its legal right of access to other railroads,
and ownership of Amtrak's real property, until that
property is transferred to the Secretary of
Transportation under section 110 of the Rail Passenger
Service Restructuring, Reauthorization, and Development
Act.
``(2) Contracts for service.--The National Railroad
Passenger Corporation shall, by contract, permit an operator to
provide intercity passenger rail service over any route
operated by Amtrak on the date prior to the date the
restructuring required by section 24300 becomes effective, at
the frequencies in effect on that date, on its behalf and to
use its right of access to any segment of rail line owned by
another rail carrier needed for the operation of that train.
The operator may be the American Passenger Railway Corporation
or another operator, but there shall be no more than 1
intercity passenger rail operator at a time over any segment of
rail line owned by another rail carrier, except in terminal
areas as determined by the Secretary or as may otherwise be
provided by agreement among the National Railroad Passenger
Corporation, the operators, and the owner of the rail line.
``(3) Use of amtrak name.--
``(A) In general.--The National Railroad Passenger
Corporation shall retain all legal rights pertaining to
the name `Amtrak,' and may, at its option, license or
otherwise make the name `Amtrak' commercially available
in connection with intercity passenger rail and related
services.
``(B) Use by american passenger railway
corporation.--Amtrak shall by contract, permit the
American Passenger Railway Corporation to market its
services under the Amtrak name.
``(4) Amtrak personnel.--All Amtrak employees shall become
American Passenger Railway Corporation employees unless
retained by the National Railroad Passenger Corporation. The
American Passenger Railway Corporation shall succeed to the
collective bargaining agreements in effect between Amtrak and
labor organizations that are in effect on the day before the
date on which that Corporation is established. An employee who elects
employment with National Railroad Passenger Corporation shall become an
employee of that Corporation, with only such rights regarding pay and
benefits as that Corporation shall determine.
``(5) Freight and commuter operations.--The National
Railroad Passenger Corporation shall ensure that the
implementation of the restructuring required by section 24300
gives due consideration to the needs of freight and commuter
operations that, as of the date of enactment of the Rail
Passenger Service Restructuring, Reauthorization, and
Development Act, operate on the Northeast Corridor using Amtrak
rights-of-way.
``(6) Rolling stock.--The National Railroad Passenger
Corporation shall set the terms under which the American
Passenger Railway Corporation must make available to any
replacement operator the legacy equipment associated with any
intercity passenger rail service provided as of the date of the
restructuring required by section 24300.''.
(b) Spinning-Off of Reservations System.--Not later than 2 years
after the date of enactment of the Rail Passenger Service
Restructuring, Reauthorization, and Development Act, the Inspector
General of the Department of Transportation shall submit to the
Secretary of Transportation, the Senate Committee on Commerce, Science,
and Transportation, and the House of Representatives Committee on
Transportation and Infrastructure recommendations on the feasibility,
advantages, and disadvantages of spinning off the national reservations
system as a private for-profit entity.
(c) Conforming Amendment.--The chapter analysis for chapter 243 is
amended by inserting the following after the item relating to section
24309:

``24300. Restructuring mandate.
``24300A. American Passenger Railway Corporation board of directors.
``24300B. Amtrak board after restructuring.''.

SEC. 103. DEFINITIONS.

Section 24102 is amended--
(1) by striking paragraph (2) and redesignating paragraphs
(3) through (9) as paragraphs (2) through (8), respectively;
(2) by redesignating paragraphs (3) through (8), as
redesignated, as paragraphs (4) through (9), respectively, and
inserting after paragraph (2) the following:
``(3) `corridor route' means--
``(A) a train route operated by Amtrak with a route
length of 750 miles or less as of January 1, 2004; or
``(B) a new conventional or high-speed route
eligible for funding under chapter 244 of this
title.'';
(3) by redesignating paragraphs (6) through (9), as
redesignated, as paragraphs (8) through (11), respectively, and
inserting after paragraph (5) the following:
``(6) `long distance route' means a train route operated by
Amtrak with a route length greater than 750 miles as of January
1, 2004.
``(7) `legacy equipment' means the rolling stock required
to provide intercity passenger rail service owned or leased by
Amtrak on the day prior to the date on which the restructuring
required by section 24300 is completed (as such date is
determined by the Secretary).''.

SEC. 104. OPERATING GRANTS FOR CORRIDOR ROUTES.

(a) In General.--Chapter 243 is amended by adding at the end the
following:
``Sec. 24316. Operating grants for corridor routes
``(a) In General.--
``(1) Operating grant authority.--Beginning on October 1,
2005, the Secretary of Transportation may make grants to States
for operating assistance under the authority of this section,
and not under any other provision of law, to reimburse
operators of the corridor routes operated by Amtrak on the day
before the date on which the restructuring required by section
24300 is completed (as determined by the Secretary) for a
portion of the operating subsidies required to operate those
routes with the same train frequencies.
``(2) Conditions.--A grant under this section shall be
subject to the terms, conditions, requirements, and provisions
the Secretary decides are necessary or appropriate for the
purposes of this section, including limitations on what
operating expenses are eligible for reimbursement.
``(b) Federal Share of Operating Losses.--
``(1) Reimbursable amount.--A grant to a State under this
section for any fiscal year may not exceed an amount equal to
the lower of--
``(A) the applicable percentage of the Federal
operating subsidy for that fiscal year; or
``(B) the percentage of the operating subsidy for a
route not borne by a State during the last fiscal year
ending before the date of enactment of the Rail
Passenger Service Restructuring, Reauthorization, and
Development Act.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage of the operating subsidy for a
fiscal year is--
``(A) 70 percent for fiscal year 2006;
``(B) 60 percent for fiscal year 2007;
``(C) 50 percent for fiscal year 2008;
``(D) 40 percent for fiscal year 2009; and
``(E) 30 percent for fiscal year 2010.
``(c) Determination of Expenses Eligible for Reimbursement.--
``(1) Annual determination of subsidy.--On an annual basis,
the Inspector General for the Department of Transportation
shall analyze and advise the Secretary of Transportation as to
the operating subsidy required on each corridor route operated
by the American Passenger Railway Corporation under contract
with a State without competitive bid. The operating loss on
such routes shall--
``(A) reflect the fully allocated costs of
operating the route, including an appropriate share of
overhead expenses, including general and administrative
expenses; and
``(B) exclude depreciation and interest expense on
long-term debt.
``(2) Aggregation of northeast corridor profits and
losses.--Operating profits and losses on corridor routes
operated exclusively on the mainline of the Northeast Corridor
extending from Washington, D.C. to Boston, MA may be aggregated
for purposes of determining the operating subsidy required on
the routes.
``(3) Determination with competitive bidding.--Expenses
eligible for Federal support pursuant to paragraph (b)(2) for
reimbursement for a corridor route that has been competitively
bid shall consist of the operating subsidy agreed upon by the
State, group of States, or other entity and the operator.
``(d) Exception to Date Cost-Sharing Required.--For any State whose
legislature has not convened in regular session after the date of
enactment of the Rail Passenger Service Restructuring, Reauthorization,
and Development Act and before October 1, 2005, the additional cost-
sharing requirements of this section shall become effective on October
1, 2006.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section--
``(1) $125,000,000 for fiscal year 2006;
``(2) $100,000,000 for fiscal year 2007;
``(3) $90,000,000 for fiscal year 2008;
``(4) $75,000,000 for fiscal year 2009; and
``(5) $50,000,000 for fiscal year 2010.''.
(b) Conforming Amendment.--The chapter analysis for chapter 243 is
amended by adding at the end the following:

``24316. Operating grants for corridor routes.''.

SEC. 105. OPERATING GRANTS FOR LONG DISTANCE ROUTES.

(a) In General.--Chapter 243, as amended by section 104, is amended
by adding at the end the following:
``Sec. 24317. Operating grants for long distance routes
``(a) In General.--
``(1) Operating grant authority.--Beginning on October 1,
2005, the Secretary of Transportation may make grants to the
American Passenger Railway Corporation or to a State providing
financial support for a long distance route for operating
assistance under the authority of this section, and not under
any other provision of law, to reimburse operators of the long
distance routes operated by Amtrak on the day before the date
on which the restructuring required by section 24300 is
completed (as determined by the Secretary) for a portion of the
operating subsidies required to operate those routes with the
same train frequencies.
``(2) Conditions.--
``(A) A grant under this section shall be subject
to the terms, conditions, requirements, and provisions
the Secretary decides are necessary or appropriate for
the purposes of this section, including limitations on
what operating expenses are eligible for reimbursement.
``(B) The Secretary shall require the American
Passenger Railway Corporation, as a condition of a
grant under this section, to systematically reduce its
route and system-wide overhead expenses by a minimum of
5 percent annually through fiscal year 2010. A contract
between the National Railroad Passenger Corporation and
the American Passenger Railway Corporation for the
operation of a long distance route or routes must
provide for a reduction in the annual operating subsidy
to reflect the reduction in such expenses.
``(3) Annual determination of subsidy.--On an annual basis,
the Inspector General for the Department of Transportation
shall analyze and advise the Secretary of Transportation as to
the operating subsidy required on each long distance route
operated by the American Passenger Railway Corporation without
competitive bid and the portion of the subsidy attributable to
route and system-wide overhead expenses.
``(b) Federal Share of Operating Losses.--Pending restructuring of
the long distance routes required by sections 106 through 108 of the
Rail Passenger Service Restructuring, Reauthorization, and Development
Act, the Federal share for an operating grant may be 100 percent of the
qualifying operating subsidy for the route.
``(c) Cost-Sharing Process for Long Distance Routes.--Within 9
months after the date of enactment of the Rail Passenger Service
Restructuring, Reauthorization, and Development Act, the Secretary
shall develop a process to facilitate State cost-sharing on long
distance routes. The process shall--
``(1) provide States the option of either--
``(A) receiving Federal grants, managing the
service, and selecting the train operator; or
``(B) having the service managed by the Federal
Government with a train operator selected by the
National Rail Passenger Corporation;
``(2) include a methodology to assist States interested in
providing financial support in equitably allocating the share
of a route's required operating subsidy among the affected
States; and
``(3) be made available to the Long Distance Restructuring
Commission established under section 106 of the Rail Passenger
Service Restructuring, Reauthorization, and Development Act and
the States to assist in the development of the restructuring
plan under that section.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation to carry out this
section--
``(1) $550,000,000 for fiscal year 2006;
``(2) $425,000,000 for fiscal year 2007;
``(3) $375,000,000 for fiscal year 2008;
``(4) $325,000,000 for fiscal year 2009; and
``(5) $300,000,000 for fiscal year 2010.''.
(b) Conforming Amendment.--The chapter analysis for chapter 243, as
amended by section 104 of this Act, is amended by adding at the end the
following:

``24317. Operating grants for long distance routes.

SEC. 106. LONG DISTANCE ROUTE RESTRUCTURING COMMISSION.

(a) Establishment.--There is established an independent commission
to be known as the Long Distance Route Restructuring Commission.
(b) Duty.--
(1) In general.--The Commission shall submit a plan to
Congress for restructuring long distance intercity passenger
rail routes in a manner that will reduce Federal operating
subsidies on the routes by at least 50 percent by the end of
fiscal year 2010 (as compared to the operating subsidies for
those routes for fiscal year 2003) by--
(A) retaining routes that provide a unique service
that can be contracted out by the National Railroad
Passenger Corporation on a for-profit basis;
(B) restructuring other routes as linked corridor
routes between major metropolitan areas; and
(C) consolidating or discontinuing service over
remaining routes.
(2) Preservation of national network.--The restructuring
plan submitted by the Commission shall ensure that no corridor
route is completely isolated from the rest of the intercity
passenger rail network.
(3) Exceptions.--
(A) In general.--A route will be excluded from
consideration for restructuring, consolidation, or
closure if a State or group of States commits, by
contractual arrangement with the American Passenger
Railway Corporation or another operator selected
through a competitive process, to provide financial
operating support at a level sufficient to offset at
least
(i) 30 percent of the operating subsidy for
fiscal year 2007;
(ii) 40 percent of the operating subsidy
for fiscal year 2008; and
(iii) 50 percent of the operating subsidy
thereafter.
(B) Failure of support.--If a State or group of
States fails to provide the financial support to which
it committed under this paragraph, then service over
the route shall be discontinued.
(4) Consultation required.--In carrying out its duties, the
Commission shall consult with the American Passenger Railway
Corporation, State and local officials, freight railroads,
companies with expertise in intercity passenger transportation,
and other organizations with an interest in the restructuring
of the long distance train routes.
(c) Appointment.--
(1) The Commission shall be composed of 7 members appointed
by the President within 6 months after the date of enactment of
this Act.
(2) The Commission members shall elect 1 member to serve as
Chairman.
(d) Termination.--The Commission shall terminate 90 days after the
Commission's recommendations for consolidation and closure are
submitted to Congress.
(e) Vacancies.--A vacancy on the Commission shall be filled in the
same manner as the original appointment.
(f) Detailees.--Upon the request of the Chairman of the Commission,
the head of any Federal department or agency may detail personnel of
that department or agency to the Commission to assist the Commission in
carrying out its duties.
(g) Compensation; Reimbursement.--Members of the Commission shall
serve without pay, but shall receive travel expenses, including per
diem in lieu of subsistence, in accordance with sections 5702 and 5703
of title 5, United States Code.
(h) Other Authority.--
(1) The Commission may procure by contract, to the extent
funds are available, the temporary or intermittent services of
experts or consultants pursuant to section 3109 of title 5,
United States Code.
(2) The Commission may lease space and acquire personal
property to the extent funds are available.
(i) Authorization of Appropriations.--There are authorized to be
appropriated for the use of the Commission in carrying out its
responsibilities under this section for each of fiscal years 2005 and
2006, $4,000,000, such sums to remain available until expended.

SEC. 107. CRITERIA FOR RESTRUCTURING.

(a) Restructuring as Linked Corridors.--
(1) Prerequisite for restructuring.--A long distance route
or portion thereof may be recommended for restructuring as a
linked corridor if--
(A) the origin-to-destination travel time of each
corridor link in the new route, at conventional train
speeds, including all station stops, will be
competitive with other modes of transportation;
(B) each corridor link in the new route connects at
least 2 major metropolitan areas or provides a link
between 2 or more existing corridor routes;
(C) the route as restructured can be reasonably
expected to attract at least 10 percent of the combined
common carrier market in the markets served;
(D) the projected cash operating loss of each of
the restructured links does not exceed 11 cents per
passenger-mile on a fully allocated cost basis; and
(E) by the end of fiscal year 2010 the Federal
operating subsidy will be reduced by at least 50
percent (as compared to the operating subsidy for the
route for fiscal year 2003), taking into account
commitments by the affected States to provide financial
support for the route so that no Federal operating
subsidy is available for any portion of a route for
which there is no such State commitment.
(2) Hours of operation.--In addition to the eligibility
criteria in paragraph (1), any long distance routes recommended
for restructuring as linked corridors shall be designed to
operate between the hours of 6:00 a.m. and 11:00 p.m.
(3) Modification of routes.--With the concurrence of the
affected States and the host railroad, the route and stations
service by a restructured long distance route may be modified
to improve ridership and financial performance.
(4) New capital plans.--As part of the restructuring plan
for reconfigured routes, the Commission shall develop a capital
plan, if additional capital is needed to reconfigure the route
as linked corridors.
(b) Contracting-Out of Profitable Long Distance Routes and
Services.--The Commission shall determine which long distance routes or
services on such routes, including auto-ferry transportation, food
service, and sleeping accommodations, could be contracted to a private
operator on a for-profit basis. In making these determinations, the
Commission shall solicit expressions of interest from the private
sector in operating long distance routes or services, including the
conditions under which private companies may be interested in operating
such services.
(c) Consolidation and Closure.--The Commission shall make
recommendations to Congress for consolidating and closing long distance
train routes or portions of routes that cannot be restructured under
subsection (a) or contracted out under subsection (b), to reduce the
Federal operating subsidy required by at least 50 percent by the end of
fiscal year 2010 (as compared to the operating subsidies for those
routes for fiscal year 2003), taking into consideration--
(1) the operating loss on a fully allocated cost basis,
including capital costs, of the route or portion thereof;
(2) the extent to which train service is the only available
public transportation to the cities and towns along the route
or portion thereof;
(3) whether an alternate route could significantly reduce
operating losses and capital requirements or increase
ridership;
(4) available capacity on the rights-of-way of the host
railroad or railroads; and
(5) commitments by the affected States to provide financial
support for the route or portion thereof.
(d) Cooperation of American Passenger Railway Corporation.--
(1) The American Passenger Railway Corporation shall
cooperate and comply, subject to the agreement of the
Commission to protect the confidentiality of proprietary
information, with all requests for financial, marketing, and
other information about the routes under consideration by the
Commission.
(2) The Secretary of Transportation may withhold all or
part of an operating or capital grant to the Corporation if the
Secretary determines the American Passenger Railway Corporation
is not cooperating with the Commission as required by this
subsection.
(e) Report.--The Commission shall submit its recommendations for
restructuring the long distance routes to the Senate Committee on
Commerce, Science, and Transportation and the House of Representatives
Committee on Transportation and Infrastructure within 18 months after
the date of enactment of this Act. The report shall include a
description of--
(1) the analysis performed by the Commission to reach its
conclusions;
(2) options considered in the development of a
restructuring plan; and
(3) the impact of the restructuring on employees of the
American Passenger Railway Corporation for any long distance
route restructured under this section.

SEC. 108. IMPLEMENTATION OF RESTRUCTURING PLAN.

(a) In General.--The Secretary of Transportation shall implement
the restructuring plan submitted to Congress by the Long Distance Route
Restructuring Commission in its report pursuant to section 106 unless a
joint resolution is enacted by the Congress disapproving such
recommendations of the Commission before the earlier of--
(1) the end of the 60-day period beginning on the date the
Commission submits its report to Congress; or
(2) the adjournment of Congress sine die for the session
during which such report is submitted.
(b) Certain Days Disregarded.--For purposes of subsection (a), the
days on which either House of Congress is not in session because of an
adjournment of more than 4 days to a day certain shall be excluded in
the computation of a period.
(c) 1-Year Implementation Period.--Unless disapproved under section
(a), the Secretary of Transportation shall fully implement the plan
within 1 year after the date on which the period described in
subsection (a) expires.

SEC. 109. REDEMPTION OF COMMON STOCK.

(a) Valuation.--The Secretary of Transportation shall arrange, at
the National Railroad Passenger Corporation's expense, for a valuation
of all Amtrak assets and liabilities with an estimated value in excess
of $1,000,000 as of the date of enactment of this Act by the Secretary
of the Treasury, or by a contractor selected by the Secretary of the
Treasury. The valuation shall be conducted in accordance with the
Uniform Standards of Professional Appraisal Practice of the Appraisal
Foundation's Appraisal Standards Board and shall be completed within 1
year after the date of enactment of this Act.
(b) Redemption.--
(1) Prior to the transfer of assets to the Secretary
directed by section 110 of this Act, and within 3 months after
the completion of the valuation under subsection (a), the
National Railroad Passenger Corporation shall redeem all common
stock in Amtrak issued prior to the date of enactment of this
Act at the fair market value of such stock, based on the
valuation performed under subsection (a).
(2) No provision of this Act, or amendments made by this
Act, provide to the owners of the common stock a priority over
holders of indebtedness or other stock of Amtrak.
(c) Acquisition Through Eminent Domain.--In the event that the
National Railroad Passenger Corporation and the owners of the Amtrak
common stock have not completed the redemption of such stock within 3
months after the completion of the valuation under subsection (a), the
National Railroad Passenger Corporation shall exercise its right of
eminent domain under section 24311 of title 49, United States Code, to
acquire that stock. The value assigned to the common stock under
subsection (a) shall be deemed to constitute just compensation except
to the extent that the owners of the common stock demonstrate that the
valuation is less than the constitutional minimum value of the stock.
(d) Amendment of Section 24311.--Section 24311(a)(1) is amended--
(1) by striking ``or'' at the end of subparagraph (A);
(2) by striking ``Amtrak.'' in subparagraph (B) and
inserting ``Amtrak; or''; and
(3) by adding at the end the following:
``(C) necessary to redeem Amtrak's common stock
from any holder thereof, including a rail carrier.''.
(e) Conversion of Preferred Stock to Common.--
(1) Subsequent to the redemption of the common stock in the
corporation issued prior to the date of enactment of this Act,
the Secretary of Transportation shall convert the one share of
the preferred stock of the corporation retained under section
110 of this Act for 10 shares of common stock in the National
Railroad Passenger Corporation.
(2) The National Railroad Passenger Corporation may not
issue any other common stock, and may not issue preferred
stock, without the express written consent of the Secretary.
(f) Termination of Section 24907 Note and Mortgage Authority.--
Section 24907 is amended by adding at the end the following:
``(d) Termination of Authority.--The authority of the Secretary to
obtain a note of indebtedness from, and make a mortgage agreement with,
the American Passenger Railway Corporation under subsection (a) is
terminated as of the date of the transfer of assets under section 110
of the Rail Passenger Service Restructuring, Reauthorization, and
Development Act.''.

SEC. 110. RETIREMENT OF PREFERRED STOCK; TRANSFER OF ASSETS.

(a) Transfer.--Not later than 30 days after the redemption or
acquisition of stock under section 109 of this Act, the National
Railroad Passenger Corporation shall, in return for the consideration
specified in subsection (c), transfer to the Secretary of
Transportation title to--
(1) the portions of the Northeast Corridor currently owned
or leased by the Corporation as well as any improvements made
to these assets, including the rail right-of-way, stations,
track, signal equipment, electric traction facilities, bridges,
tunnels, repair facilities, and all other improvements owned by
the Corporation between Boston, Massachusetts, and Washington,
District of Columbia (including the route through Springfield,
Massachusetts, and the routes to Harrisburg, Pennsylvania, and
Albany, New York, from the Northeast Corridor mainline);
(2) Chicago Union Station and rail-related assets in the
Chicago Metropolitan area; and
(3) all other track and right-of-way, stations, repair
facilities, and other real property owned or leased by the
Corporation.
(b) Existing Encumbrances.--
(1) Assumption by federal government.--Any outstanding debt
on the mainline of the Northeast Corridor (other than debt
associated with rolling stock) shall become a debt obligation
of the United States as of the date of transfer of title under
subsection (a)(1).
(2) Restructuring.--Except as provided in paragraph (1),
the obligation of the American Passenger Railway Corporation or
its successors or assigns to repay in full any indebtedness to
the United States incurred since January, 1990, is not affected
by this Act or an amendment made by this Act.
(c) Consideration.--In consideration for the assets transferred to
the United States under subsection (a), the Secretary shall--
(1) deliver to the National Passenger Railroad Corporation
all but one share of the preferred stock of the corporation
held by the Secretary and forgive the corporation's legal
obligation to pay any dividends, including accrued but unpaid
dividends as of the date of transfer, evidenced by the
preferred stock certificates; and
(2) release the National Railroad Passenger Corporation
from all mortgages and liens held by the Secretary that were in
existence on January 1, 1990.
(d) Agreement.--Prior to accepting title to the assets transferred
under this section, the Secretary shall enter into a contract with
American Passenger Railway Corporation under which American Passenger
Railway Corporation will exercise care, custody, maintenance, and
operational control of the assets to be transferred. The term of the
contract shall be for 1 year, which shall be renewed annually without
action on the part of either party unless canceled by either party with
90 days notice.
(e) Further Transfers.--
(1) The Secretary may, for appropriate consideration,
transfer title to all or part of Chicago Union Station and
rail-related assets in the Chicago metropolitan area acquired
under this section to a regional public transportation agency
that has significant operations in Chicago Union Station on the
date of enactment of this Act.
(2) The Secretary may, for appropriate consideration,
transfer to the underlying States title to real estate
properties owned by the Corporation between Boston,
Massachusetts, and Washington, District of Columbia, that
constitute the route through Springfield, Massachusetts, and
the routes to Harrisburg, Pennsylvania, and Albany, New York,
from the Northeast Corridor mainline.
(3) The Secretary may, for appropriate consideration,
transfer title to all or part of the assets acquired under
subsection (a)(3) to a State, a public agency, a railroad, or
other entity deemed appropriate by the Secretary.
(f) Use of Proceeds.--Notwithstanding section 3302 of title 31,
United States Code, any proceeds from the transfer of the assets
described subsection (e) shall be credited as off-setting collections
to the account that finances debt and interest payments to the American
Passenger Railway Corporation. Funds available for corridor development
under chapter 244 of title 49, United States Code, shall be increased
by an amount equal to the amounts credited under the preceding
sentence.

SEC. 111. REAL ESTATE AND ASSET SALES; OTHER.

(a) In General.--Within 3 years after the date of enactment of this
Act, the Secretary of Transportation shall transfer all stations,
track, and other fixed facilities outside the Northeast Corridor
mainline to which the Secretary has assumed title under section 110 of
this Act, other than equipment repair facilities, to States,
municipalities, railroads, or other entities for maximum consideration.
(b) Use of Proceeds.--Notwithstanding section 3302 of title 31,
United States Code, any proceeds from the transfer of assets under this
section shall be credited as off-setting collections to the account
that finances debt and interest payments to the American Passenger
Railway Corporation. Funds available for corridor development under
chapter 244 of title 49, United States Code, shall be increased by an
amount equal to the amounts credited under the preceding sentence.

Subtitle B--Northeast Corridor

SEC. 131. INTERSTATE COMPACT FOR THE NORTHEAST CORRIDOR.

(a) Consent to Compact.--
(1) In general.--The States and the District of Columbia
that constitute the Northeast Corridor, as defined in section
24102 of title 49, United States Code, may enter into a
multistate compact, not in conflict with any other law of the
United States, to be known as the Northeast Corridor Compact,
to manage railroad operations and rail service and conduct
related activities on the Northeast Corridor mainline between
Boston, Massachusetts, and Washington, District of Columbia.
(2) Congressional approval required.--The Northeast
Corridor Compact shall be submitted to Congress for its
consent. It is the sense of the Congress that rapid consent to
the Compact is a priority matter for the Congress.
(b) Compact Commission.--
(1) In general.--There is hereby established a commission
to be known as the Northeast Corridor Compact Commission. The
Commission shall be composed of--
(A) 2 members (or their designees), to be selected
by the Secretary of Transportation;
(B) 2 members (or their designees), to be selected
by agreement of--
(i) the governors of Maryland, Delaware,
Pennsylvania, New Jersey, New York,
Connecticut, Rhode Island, and Massachusetts
(hereinafter referred to as the ``participating
States''); and
(ii) the mayor of the District of Columbia;
and
(C) 1 member to be selected by the 4 members
selected under subparagraphs (A) and (B).
(2) Administrative provisions.--
(A) Members of the Commission shall be appointed
for the life of the Commission.
(B) A vacancy in the Commission shall be filled in
the manner in which the original appointment was made.
(C) Members shall serve without pay but shall
receive travel expenses, including per diem in lieu of
subsistence, in accordance with sections 5702 and 5703
of title 5, United States Code.
(D) The Chairman of the Commission shall be elected
by the members.
(E) The Commission may appoint and fix the pay of
such personnel as it considers appropriate.
(F) Upon the request of the Commission, the head of
any department or agency of the United States may
detail, on a reimbursable basis, any of the personnel
of that department or agency to the Commission to
assist it in carrying out its duties under this
section.
(G) Upon the request of the Commission, the
Administrator of General Services shall provide to the
Commission, on a reimbursable basis, the administrative
support services necessary for the Commission to carry
out its responsibilities under this section.
(c) Functions.--The Commission shall prepare for the consideration
of and adoption by participating States, the District of Columbia, and
the Secretary of Transportation an interstate compact that provides
for--
(1) full authority for 99 years to succeed to the
responsibilities of the National Railroad Passenger Corporation
as manager of the Northeast Corridor, subject to the provisions
of a lease from the Department of Transportation, including
responsibility for--
(A) Corridor maintenance and improvement;
(B) the operation of intercity passenger rail
service;
(C) making arrangements for operation of freight
railroad operations and commuter operations;
(D) the use of the Corridor for non-rail purposes;
and
(E) the Northeast Corridor financial operations;
(2) execution of a lease of the Northeast Corridor from the
Department of Transportation, for a period of 99 years, subject
to appropriate provisions protecting the lessor's interests,
including reversion of all lease interests to the lessor in the
event the lessee fails to meet its financial obligations or
otherwise assume financial responsibility for Northeast
Corridor functions; and
(3) participation by the Department of Transportation, as
the non-voting representative of the United States.
(d) Final Compact Proposal.--
(1) The Commission shall submit a final compact proposal to
participating States, the District of Columbia, and the Federal
Government not later than 18 months after the date of enactment
of this Act.
(2) The Commission shall terminate on the 180th day
following the date of transmittal of the final compact proposal
under this subsection.
(e) Governance and Funding Requirements for Compact.--
(1) The governance provisions of the compact shall provide
a mechanism to ensure voting representation for the
participating States and the District of Columbia and for non-
voting representation for the Secretary of Transportation and a
freight railroad that conducts operations on the Northeast
Corridor as ex officio members participating in all Compact
affairs.
(2) The provisions of the compact shall establish the
financial obligations of each compact member and shall provide
for each member's management of rail services in the Northeast
Corridor.
(f) Federal Interest Requirements for Compact.--The provisions of
the Compact shall hold the United States Government harmless as to the
actions of the Compact under the lease of rights to the Northeast
Corridor by the United States Government.
(g) Compact Borrowing Authority.--
(1) The borrowing authority provisions of the Compact may
authorize it to issue bonds or other debt instruments from time
to time at its discretion for purposes that include paying any
part of the cost of rail service improvements, construction,
and rehabilitation and the acquisition of real and personal
property, including operating equipment, except that debt
issued by the Compact may be secured only by revenues to the
Compact and may not be a debt of a participating State, the
District of Columbia, or the Federal Government.
(2) The debt authorized by this subsection shall under no
circumstances be backed by the full faith and credit of the
United States, and a grant made under the authority of this Act
or under the authority of part C of subtitle V of title 49,
United States Code, shall include an express acknowledgement by
the grantee that the debt does not constitute an obligation of
the United States.
(h) Adoption of Compact; Turnover.--
(1) In general.--The participating States and the District
of Columbia shall adopt a final compact agreement within 5
years after the date of enactment of this Act, and the Compact
shall thereafter assume responsibility for the Northeast
Corridor operations on a date that is not later than 6 months
after adoption of the Compact.
(2) Operations.--Upon leasing the Northeast Corridor to the
Compact, the Secretary shall assign to the Compact and the
Compact shall assume the then-current contract for operation of
the Northeast Corridor. Upon the termination of that contract,
the Compact may make such arrangements for operation of the
Northeast Corridor as it sees fit consistent with its lease and
this Act. If the Compact chooses to use a contractor other than
the American Passenger Railway Corporation to operate trains on
the Northeast Corridor, the contract shall be awarded
competitively.
(3) Maintenance.--Upon leasing the Northeast Corridor to
the Compact, the Secretary shall assign to the Compact and the
Compact shall assume the then-current contract for maintenance
of the Northeast Corridor. Upon the termination of that
contract, the Compact may make such arrangements for
maintenance of the Northeast Corridor as it sees fit consistent
with its lease and this Act. If the Compact chooses to use a
contractor other than the American Passenger Railway
Corporation to maintain the Northeast Corridor and provide
related services, the contract shall be awarded competitively.
(4) Non-compact alternative.--If the participating States
and the District of Columbia do not adopt the final compact
agreement and make it operational under the schedule set forth
in this section, the Secretary of Transportation, through a
competitive bidding process, shall contract with another public
or private entity to manage the Northeast Corridor, with a goal
of maximizing the return to the Federal government from such
operations.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation to carry out this
section--
(1) $3,000,000 for fiscal year 2005, and
(2) $2,000,000 for fiscal year 2006,
such sums to remain available until expended.

SEC. 132. SHUT-DOWN OF COMMUTER OR FREIGHT OPERATIONS.

(a) In General.--Section 11123 is amended by striking ``National
Railroad Passenger Corporation'' each place it appears and inserting
``American Passenger Railway Corporation''.
(b) Authorization of Appropriations.--From the funds made available
for the American Passenger Railway Corporation for fiscal years 2005
through 2010, the Secretary of Transportation shall in each fiscal year
hold in reserve from the amounts authorized by section 24402(g) of
title 49, United States Code, such sums as may be necessary to carry
out directed service orders issued under section 1123 of title 49,
United States Code, to respond to the shut-down of commuter rail
operations or freight operations due to a shut-down of operations by
the American Passenger Railway Corporation. The Secretary shall make
the reserved funds available through an appropriate grant instrument
during the fourth quarter of each fiscal year to the extent that no
grant orders have been issued by the Surface Transportation Board
during that fiscal year prior to the date of transfer of the reserved
funds or there is a balance of reserved funds not needed by the Board
to pay for any directed service order in that fiscal year.
(c) Effective Date for Subsection (a).--The amendment made by
subsection (a) shall take effect on the date, determined by the
Secretary of Transportation, on which the restructuring required by
sections 24300 of title 49, United States Code, is completed.

SEC. 133. CAPITAL GRANTS FOR NORTHEAST CORRIDOR.

(a) In General.--Chapter 243, as amended by section 105, is amended
by adding at the end the following:
``Sec. 24318. Capital authorizations for the Northeast Corridor
``(a) In General.--The Secretary of Transportation, in consultation
with the American Passenger Railway Corporation, shall develop and
implement a capital program to restore the mainline of the Northeast
Corridor between Boston, Massachusetts, and Washington, District of
Columbia, to a state of good repair, as defined by the Secretary.
``(b) Authorization of Appropriations for Capital Projects on the
Northeast Corridor.--There are authorized to be appropriated to the
Secretary of Transportation to make capital grants under this section
$200,000,000 for fiscal year 2005 and $300,000,000 for each of fiscal
years 2006 through 2010.
``(c) Achievement of State-of-Good-Repair on Northeast Corridor.--
``(1) Use of funds.--Sums authorized for the Northeast
Corridor under subsection (b) may be used solely for the
purpose of funding deferred maintenance and safety projects,
including the negotiated Federal share for life-safety
improvements in the New York Penn Station tunnels.
``(2) State of good repair.--The Northeast Corridor shall
be considered to be in a state of good repair upon the
completion of the capital program developed under subsection
(a).''.
(b) Conforming Amendment.--The chapter analysis for chapter 243, as
amended by section 105, is amended by adding at the end thereof the
following:

``24318. Capital authorizations for the Northeast Corridor.''.

Subtitle C--Related Matters

SEC. 151. FAIR AND OPEN COMPETITION.

(a) In General.--The Secretary of Transportation shall consult with
States that competitively bid intercity passenger rail services to
ensure their bidding practices provide for fair and open competition
for all bidders, including the American Passenger Railway Corporation.
The Secretary may withhold all or a portion of a grant under this Act
if the Secretary determines that the State's bidding processes do not
treat all competitors fairly.
(b) Use of Federal or State Funds.--The Secretary shall ensure that
the American Passenger Railway Corporation may not use Federal or State
financial support for a passenger rail route to subsidize a competitive
bid to operate intercity passenger rail service on another route.

SEC. 152. ACCESS TO OTHER RAILROADS.

(a) Terms and Conditions for Access to Other Railroads.--
(1) Existing routes and frequencies.--
(A) In general.--The National Railroad Passenger
Corporation shall be responsible for negotiating the
terms and conditions under which--
(i) the American Passenger Railway
Corporation, a State, or other entity may
access the property of a rail carrier to
provide intercity passenger rail service over
routes operated by Amtrak on the day before the
date, determined by the Secretary of
Transportation, on which the restructuring
required by sections 24300 of title 49, United
States Code, is completed at the frequencies in
effect on that day; and
(ii) the American Passenger Railway
Corporation, freight railroads, commuter
authorities, and other entities may obtain
access to property owned by the United States
Government to provide intercity, commuter,
freight rail and other services, except that
the National Railroad Passenger Corporation
shall delegate its authority under this clause
to the interstate compact authorized by section
131 after that compact has been adopted.
(B) Preservation of railroad benefits.--The access
and liability terms and conditions of the contracts
between the National Railroad Passenger Corporation and
other rail carriers following the restructuring
required by section 24300 of title 49, United States
Code, shall be no less favorable to the railroads than
the access and liability terms and conditions under
contracts in effect on the day before the date, as so
determined by the Secretary, on which the restructuring
is completed.
(C) Incentive payments; penalties.--The National
Railroad Passenger Corporation shall retain a system of
incentive payments and performance penalties in
negotiating compensation payments to other rail
carriers under subparagraph (A) that encourages on-time
performance.
(3) Conditions for new routes and train frequencies.--
(A) In general.--The terms and conditions for the
operation of a new intercity passenger rail route or
frequency added after the date of enactment of this Act
shall, except for the rental charge compensation to
another rail carrier, be determined by negotiation and
mutual agreement between the host railroad and the
operator or sponsor of the route or frequency to be
added.
(B) Standard of compensation.--The standard of
compensation for the rental change shall be fully
allocated costs, excluding capital investments
associated with an added route or frequency, when the
on-time performance of the new route or train frequency
meets or exceeds 95 percent of the goal set by the
parties, net of delays not within the host railroad's
control.
(C) Failure of negotiation.--If the parties cannot
agree on the terms of the rental charge, either party
may petition the Surface Transportation Board to
prescribe the terms under section 24308 of title 49,
United States Code.
(b) Fitness Qualifications for Passenger Rail.--
(1) In general.--No person may operate intercity passenger
rail service unless that person demonstrates to the
satisfaction of the Secretary of Transportation that--
(A) its intercity passenger rail operations will
meet all applicable Federal safety rules and
regulations;
(B) it will operate the service on a sound
financial basis; and
(C) it has the technical expertise to operate
intercity passenger rail service.
(2) Minimum standards.--Within 6 months after the date of
enactment of this Act, the Secretary of Transportation shall by
regulation establish minimum safety and financial
qualifications for operators of intercity passenger rail
service.

SEC. 153. LIMITATIONS ON RAIL PASSENGER TRANSPORTATION LIABILITY.

Section 28103 is amended by striking ``Amtrak shall maintain a
total'' in subsection (c) and inserting ``each operator of intercity
passenger rail service shall maintain''.

SEC. 154. TRAIN OPERATIONS INSURANCE POOL.

(a) In General.--Chapter 281 is amended by adding at the end the
following:
``Sec. 28104. Train operations insurance pool
``(a) In General.--The Secretary of Transportation is authorized to
encourage and otherwise assist insurance companies and other insurers
that meet the requirements prescribed under subsection (b) of this
section to form, associate, or otherwise join together in a pool--
``(1) to provide the insurance coverage required by section
28103; and
``(2) for the purpose of assuming, on such terms and
conditions as may be agreed upon, such financial responsibility
as will enable such companies and other insurers to assume a
reasonable proportion of responsibility for the adjustment and
payment of claims under section 28103.
``(b) Regulations To Establish Insurer Qualification
Requirements.--In order to promote the effective administration of the
intercity rail passenger program, and to assure that the objectives of
this chapter are furthered, the Secretary is authorized to prescribe
requirements for insurance companies and other insurers participating
in an insurance pool under subsection (a), including minimum
requirements for capital or surplus or assets.
``(c) Authority To Collect and Pay Premiums and Other Costs.--In
order to provide adequate insurance coverage at affordable cost to
operators of intercity passenger rail service at no cost to the United
States, the Secretary is authorized to divide the insurance premiums
and all other costs of forming and operating the insurance pool created
pursuant to this section, including the costs of any contractors or
consultants the Secretary may hire, among all the operators of
intercity passenger rail service (including the American Passenger
Railway Corporation) and collect from each operator of intercity
passenger rail service the insurance premiums and other costs the
Secretary has allocated to it. Notwithstanding any other provision of
law, the Secretary may receive funds collected under this section
directly from each operator of intercity passenger rail service, credit
the appropriation charged for the insurance premiums and other costs of
forming and operating the insurance pool, and use those funds to pay
insurance premiums and other costs of forming and operating the
insurance pool, including the costs of any contractors or consultants
the Secretary may hire. The Secretary may advance such sums as may be
necessary to pay insurance premiums and other costs of forming and
operating the insurance pool from unobligated balances available to the
Federal Railroad Administration for intercity passenger rail service,
to be reimbursed from payments received from operators of intercity
passenger rail service. Where the Secretary is making a grant of
operating funds for a route, the Secretary may collect the insurance
premiums and other costs the Secretary has allocated to it by
withholding those funds from the grant and crediting them to the
appropriation charged for the insurance premiums and other costs of
forming and operating the insurance pool.
``Sec. 28105. Use of insurance pool, companies, or other private
organizations for certain payments
``(a) Authorization To Enter Into Contracts for Certain
Responsibilities.--The Secretary of Transportation may enter into
contracts with the pool formed or otherwise created under section
28104, or any insurance company or other private organizations, for the
purpose of securing performance by such pool, company, or organization
of any or all of the following responsibilities:
``(1) Estimating and later determining any amounts of
payments to be made from the pool.
``(2) Receiving from the Secretary, disbursing, and
accounting for payments of insurance premiums.
``(3) Making such audits of the records of any insurance
company or other insurer, insurance agent or broker, or
insurance adjustment organization as may be necessary to assure
that proper payments are made.
``(4) Otherwise assisting in such manner as the contract
may provide to further the purposes of this chapter.
``(b) Terms and Conditions of Contract.--Any contract with the pool
or an insurance company or other private organization under this
section may contain such terms and conditions as the Secretary finds
necessary or appropriate for carrying out responsibilities under
subsection (a) of this section, and may provide for payment of any
costs which the Secretary determines are incidental to carrying out
such responsibilities which are covered by the contract.
``(c) Competitive Bidding.--Any contract entered into under
subsection (a) of this section may be entered into without regard to
section 5 of title 41 or any other provision of law requiring
competitive bidding.
``(d) Findings of Secretary.--No contract may be entered into under
this section unless the Secretary finds that the pool, company, or
organization will perform its obligations under the contract
efficiently and effectively, and will meet such requirements as to
financial responsibility, legal authority, and other matters as the
Secretary finds pertinent.
``(e) Term of Contract; Renewals; Termination.--Any contract
entered into under this section shall be for a term of 1 year, and may
be made automatically renewable from term to term in the absence of
notice by either party of an intention to terminate at the end of the
current term; except that the Secretary may terminate any such contract
at any time (after reasonable notice to the pool, company, or
organization involved) if the Secretary finds that the pool, company,
or organization has failed substantially to carry out the contract, or
is carrying out the contract in a manner inconsistent with the
efficient and effective administration of the intercity rail passenger
program.''.
(b) Conforming Amendments.--
(1) Chapter 281 is amended by striking ``LAW ENFORCEMENT''
in the chapter heading and inserting ``LAW ENFORCEMENT;
LIABILITY; INSURANCE''.
(2) The part analysis of subtitle V is amended by striking
the item relating to chapter 281 and inserting the following:

``281. Law enforcement; liability; insurance...............    28101''.
(3) The table of contents of the title is amended by
striking the item relating to chapter 281 and inserting the
following:

``281. Law enforcement; liability; insurance...............    28101''.
(4) The chapter analysis for chapter 281 is amended by
adding at the end the following:

``28104. Train operations insurance pool.
``28105. Use of insurance pool, companies, or other private
organizations for certain payments.''.

SEC. 155. COLLECTIVE BARGAINING ARRANGEMENTS.

(a) Status as Employer or Carrier.--
(1) In general.--Any entity providing intercity passenger
railroad transportation (within the meaning of section 20102 of
title 49, United States Code) that begins operations after the
date of enactment of this Act shall be considered an employer
for purposes of the Railroad Retirement Act of 1974 (45 U.S.C.
231 et seq.) and considered a carrier for purposes of the
Railway Labor Act (45 U.S.C. 151 et seq.).
(2) Collective bargaining agreement.--Any entity providing
intercity passenger railroad transportation (within the meaning
of section 20102 of title 49, United States Code) that begins
operations after the date of enactment of this Act and replaces
intercity rail passenger service that was provided by another
entity as of the date of enactment of this Act, shall enter
into an agreement with the authorized bargaining agent or
agents for employees of the predecessor provider that--
(A) gives each employee of the predecessor provider
priority in hiring according to the employee's
seniority on the predecessor provider for each position
with the replacing entity that is in the employee's
craft or class and is available within three years
after the termination of the service being replaced;
(B) establishes a procedure for notifying such an
employee of such positions;
(C) establishes a procedure for such an employee to
apply for such positions; and
(D) establishes rates of pay, rules, and working
conditions.
(3) Replacement of existing rail passenger service.--
(A) Negotiations.--An entity providing replacement
intercity rail passenger service under paragraph (2)
shall give written notice of its plan to replace
existing rail passenger service to the authorized
collective bargaining agent or agents for the employees
of the predecessor provider at least 90 days prior to
the date it plans to commence service. Within 5 days
after the date of receipt of such written notice,
negotiations between the replacing entity and the
collective bargaining agent or agents for the employees
of the predecessor provider shall commence for the
purpose of reaching agreement with respect to all
matters set forth in subparagraphs (A) through (D) of
paragraph (2). The negotiations shall continue for 30
days or until an agreement is reached, whichever is
sooner. If at the end of 30 days the parties have not
entered into an agreement with respect to all such
matters, the unresolved issues shall be submitted for
arbitration in accordance with the procedure set forth
in subparagraph (B).
(B) Arbitration.--If an agreement has not been
entered into with respect to all matters set forth in
subparagraphs (A) through (D) of paragraph (2) as
provided in subparagraph (A) of this paragraph, the
parties shall select an arbitrator. If the parties are
unable to agree upon the selection of such arbitrator
within 5 days, either or both parties shall notify the
National Mediation Board, which shall provide a list of
7 arbitrators with experience in arbitrating rail labor
protection disputes. Within 5 days after such
notification, the parties shall alternately strike
names from the list until only one name remains, and
that person shall serve as the neutral arbitrator.
Within 45 days after selection of the arbitrator, the
arbitrator shall conduct a hearing on the dispute and
shall render a decision with respect to the unresolved
issues set forth in subparagraphs (A) through (D) of
paragraph (2). This decision shall be final, binding,
and conclusive upon the parties. The salary and
expenses of the arbitrator shall be borne equally by
the parties, but all other expenses shall be paid by
the party incurring them.
(C) Service commencement.--An entity providing
replacement intercity rail passenger service under
paragraph (2) shall commence service only after an
agreement is entered into with respect to the matters
set forth in subparagraphs (A) through (D) of paragraph
(2) or the decision of the arbitrator has been
rendered.
(b) Regulations.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of Transportation shall issue
regulations for carrying out this section.

TITLE II--RAIL DEVELOPMENT

SEC. 201. CAPITAL ASSISTANCE FOR INTERCITY PASSENGER RAIL SERVICE.

(a) In General.--Part C of subtitle V is amended by inserting after
chapter 243 the following:

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

``Sec.
``24401. Definitions.
``24402. Capital investment grants to support intercity passenger rail
service.
``24403. Project management oversight.
``24404. Inclusion of projects in Budget.
``24405. Local share and maintenance of effort.
``24406. Grants for maintenance and modernization.
``Sec. 24401. Definitions
``In this chapter:
``(1) Applicant.--The term `applicant' means a State, a
group of States, including an interstate compact formed under
section 410 of the Amtrak Reform and Accountability Act of 1997
(49 U.S.C. 24101 note) or section 131 of the Rail Passenger
Service Restructuring, Reauthorization, and Development Act, or
a public corporation, board, commission, or agency established
by one or more States designated as the lead agency of a State
for providing intercity passenger rail service.
``(2) Capital project.--The term `capital project' means a
project for--
``(A) acquiring or constructing equipment or a
facility for use in intercity passenger rail service,
expenses incidental to the acquisition or construction
(including designing, inspecting, supervising,
engineering, location surveying, mapping, environmental
studies, and acquiring rights-of-way), alternatives
analysis related to the development of such train
services, capacity improvements on the property over
which the service will be conducted, passenger rail-
related intelligent transportation systems, highway-
rail grade crossing improvements or closures on routes
used for intercity passenger rail service, relocation
assistance, acquiring replacement housing sites, and
acquiring, constructing, relocating, and rehabilitating
replacement housing;
``(B) rehabilitating or remanufacturing rail
rolling stock and associated facilities used primarily
in intercity passenger rail service;
``(C) leasing equipment or a facility for use in
intercity passenger rail service, subject to
regulations (to be prescribed by the Secretary of
Transportation) limiting such leasing arrangements to
arrangements that are more cost-effective than purchase
or construction;
``(D) modernizing existing intercity passenger rail
service facilities and information systems;
``(E) the introduction of new technology, through
innovative and improved products, other than magnetic
levitation; or
``(F) defraying, with respect to new service
established under section 24402, the cost of rental
charges to freight railroads.
``(3) Intercity corridor passenger rail service.--The term
`intercity corridor passenger rail service' means the
transportation of passengers between major metropolitan areas
by rail, including high-speed rail (as defined in section
26105(2) of this title), at multiple daily frequencies in
corridors of 300 miles or less in length or with trip times of
4 hours or less.
``(4) Net project cost.--The term `net project cost' means
that portion of the cost of a project than cannot be financed
from revenues reasonably expected to be generated by the
project.
``Sec. 24402. Capital investment grants to support new intercity
passenger rail service
``(a) General Authority.--
``(1) Grants.--The Secretary of Transportation may make
grants under this section to an applicant to assist in
financing capital investments to establish or add additional
train frequencies for new intercity corridor passenger rail
service.
``(2) Terms and conditions.--The Secretary shall require
that a grant under this section be subject to the terms,
conditions, requirements, and provisions the Secretary decides
are necessary or appropriate for the purposes of this section,
including requirements for the disposition of net increases in
value of real property resulting from the project assisted
under this section.
``(3) Application with chapter 53.--A grant under this
section may not be made for a project or program of projects
that qualifies for financial assistance under chapter 53 of
this title.
``(b) Project as Part of Approved Program.--
``(1) In general.--The Secretary may not approve a grant
for a project under this section unless the Secretary finds
that the project is part of an approved corridor plan and
program developed under section 135 of title 23 and that the
applicant or recipient has or will have the legal, financial,
and technical capacity to carry out the project (including
safety and security aspects of the project), satisfactory
continuing control over the use of the equipment or facilities,
and the capability and willingness to maintain the equipment or
facilities.
``(2) Eligibility information.--An applicant shall provide
sufficient information upon which the Secretary can make the
findings required by this subsection.
``(3) Proposed operator justification.--If an applicant has
not selected the proposed operator of its service
competitively, the applicant shall provide written
justification to the Secretary showing why the proposed
operator is preferred, taking into account price and other
factors, and that use of the proposed operator will not
increase the capital cost of the project.
``(4) Rail agreement.--The Secretary of Transportation may
not approve a grant under this section unless the applicant
demonstrates that the railroad over which the intercity
passenger rail service will operate concurs with the
applicant's operating plans and infrastructure improvement
requirements.
``(c) Criteria for Grants for Intercity Corridor Passenger Rail
Projects.--
``(1) In general.--The Secretary may approve a grant under
this section for a capital project only if the Secretary
determines that the proposed project is--
``(A) justified, based on--
``(i) the results of an alternatives
analysis and preliminary engineering; and
``(ii) a comprehensive review of its
mobility improvements, environmental benefits,
cost effectiveness, and operating efficiencies;
and
``(B) supported by an acceptable degree of State
and local financial commitment, including evidence of
stable and dependable financing sources to construct,
maintain, and operate the system or extension.
``(2) Alternatives analysis and preliminary engineering.--
In evaluating a project under paragraph (1)(A), the Secretary
shall analyze and consider the results of the alternatives
analysis and preliminary engineering for the project.
``(3) Project justification.--In evaluating a project under
paragraph (1)(B), the Secretary shall consider--
``(A) the direct and indirect benefits and costs of
relevant alternatives;
``(B) the ability of the service to compete with
other modes of transportation;
``(C) the extent to which the project fills an
unmet transportation need;
``(D) the ability of the service to fund its
operating expenses from fare revenues;
``(E) population density in the corridor;
``(F) the technical capability of the grant
recipient to construct the project;
``(G) factors such as congestion relief, improved
mobility, air pollution, noise pollution, energy
consumption, and all associated ancillary and
mitigating cost increases necessary to carry out each alternative
analyzed;
``(H) the level of private sector financial
participation and risk sharing in the project;
``(I) differences in local land, construction, and
operating costs in evaluating project justification;
and
``(J) other factors that the Secretary determines
appropriate to carry out this chapter.
``(4) Local financial commitment.--
``(A) Evaluation of project.--In evaluating a
project under paragraph (1)(C), the Secretary shall
require that--
``(i) the proposed project plan provides
for the availability of contingency amounts
that the Secretary determines to be reasonable
to cover unanticipated cost increases;
``(ii) each proposed State or local source
of capital and operating financing is stable,
reliable, and available within the proposed
project timetable; and
``(iii) State or local resources are
available to operate the proposed service.
``(B) Considerations.--In assessing the stability,
reliability, and availability of proposed sources of
local financing under subparagraph (A), the Secretary
shall consider--
``(i) existing grant commitments;
``(ii) the degree to which financing
sources are dedicated to the purposes proposed;
``(iii) any debt obligation that exists or
is proposed by the applicant for the proposed
project or other intercity passenger rail
service purpose; and
``(iv) the extent to which the project has
a local financial commitment that exceeds the
required non-Federal share of the cost of the
project.
``(5) Project evaluation and rating.--A proposed project
may advance from alternatives analysis to preliminary
engineering, and may advance from preliminary engineering to
final design and construction, only if the Secretary finds that
the project meets the requirements of this section and there is
a reasonable likelihood that the project will continue to meet
such requirements. In making such findings, the Secretary shall
evaluate and rate the project as `highly recommended',
`recommended', or `not recommended', based on the results of
alternatives analysis, the project justification criteria, and
the degree of local financial commitment, as required under
this subsection. In rating the projects, the Secretary shall
provide, in addition to the overall project rating, individual
ratings for each of the criteria established under the
regulations issued under paragraph (5).
``(6) Full funding grant agreement.--A project financed
under this subsection shall be carried out through a full
funding grant agreement. The Secretary shall enter into a full
funding grant agreement based on the evaluations and ratings
required under this subsection. The Secretary shall not enter
into a full funding grant agreement for a project unless that
project is authorized for final design and construction.
``(d) Letters of Intent, Full Funding Grant Agreements, and Early
Systems Work Agreements.--
``(1) Letter of intent.--
``(A) The Secretary may issue a letter of intent to
an applicant announcing an intention to obligate, for a
project under this section, an amount from future
available budget authority specified in law that is not
more than the amount stipulated as the financial
participation of the Secretary in the project.
``(B) At least 60 days before issuing a letter
under subparagraph (A) of this paragraph or entering
into a full funding grant agreement, the Secretary
shall notify in writing the Senate Committee on
Commerce, Science, and Transportation and the House of
Representatives Committee on Transportation and
Infrastructure, and the House of Representatives and
Senate Committees on Appropriations of the proposed
letter or agreement. The Secretary shall include with
the notification a copy of the proposed letter or
agreement as well as the evaluations and ratings for
the project.
``(C) The issuance of a letter is deemed not to be
an obligation under sections 1108(c) and (d), 1501, and
1502(a) of title 31, or an administrative commitment.
``(D) An obligation or administrative commitment
may be made only when amounts are appropriated.
``(2) Full funding agreement.--
``(A) The Secretary may make a full funding grant
agreement with an applicant. The agreement shall--
``(i) establish the terms of participation
by the United States Government in a project
under this section;
``(ii) establish the maximum amount of
Government financial assistance for the
project, which, with respect to a high-speed
rail project, shall be sufficient to complete
at least an operable segment;
``(iii) cover the period of time for
completing the project, including a period
extending beyond the period of an
authorization; and
``(iv) make timely and efficient management
of the project easier according to the law of
the United States.
``(B) An agreement under this paragraph obligates
an amount of available budget authority specified in
law and may include a commitment, contingent on amounts
to be specified in law in advance for commitments under
this paragraph, to obligate an additional amount from
future available budget authority specified in law. The
agreement shall state that the contingent commitment is
not an obligation of the Federal Government and is
subject to the availability of appropriations made by
Federal law and to Federal laws in force on or enacted
after the date of the contingent commitment. Interest
and other financing costs of efficiently carrying out a
part of the project within a reasonable time are a cost
of carrying out the project under a full funding grant
agreement, except that eligible costs may not be more
than the cost of the most favorable financing terms
reasonably available for the project at the time of
borrowing. The applicant shall certify, in a way
satisfactory to the Secretary, that the applicant has
shown reasonable diligence in seeking the most
favorable financing terms.
``(3) Early systems work agreement.--
``(A) The Secretary may make an early systems work
agreement with an applicant if a record of decision
under the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.) has been issued on the project and
the Secretary finds there is reason to believe--
``(i) a full funding grant agreement for
the project will be made; and
``(ii) the terms of the work agreement will
promote ultimate completion of the project more
rapidly and at less cost.
``(B) A work agreement under this paragraph
obligates an amount of available budget authority
specified in law and shall provide for reimbursement of
preliminary costs of carrying out the project,
including land acquisition, timely procurement of
system elements for which specifications are decided,
and other activities the Secretary decides are
appropriate to make efficient, long-term project
management easier. A work agreement shall cover the
period of time the Secretary considers appropriate. The
period may extend beyond the period of current
authorization. Interest and other financing costs of
efficiently carrying out the work agreement within a
reasonable time are a cost of carrying out the
agreement, except that eligible costs may not be more
than the cost of the most favorable financing terms
reasonably available for the project at the time of
borrowing. The applicant shall certify, in a way
satisfactory to the Secretary, that the applicant has
shown reasonable diligence in seeking the most
favorable financing terms. If an applicant does not
carry out the project for reasons within the control of
the applicant, the applicant shall repay all Government
payments made under the work agreement plus reasonable
interest and penalty charges the Secretary establishes
in the agreement.
``(4) Limit on total obligations and commitments.--The
total estimated amount of future obligations of the Government
and contingent commitments to incur obligations covered by all
outstanding letters of intent, full funding grant agreements,
and early systems work agreements under this section, when
combined with obligations under section 5309 of this title, may
be not more than the amount authorized under section 5338(b) of
this title, less an amount the Secretary reasonably estimates
is necessary for grants under this section not covered by a
letter. The total amount covered by new letters and contingent
commitments included in full funding grant agreements and early
systems work agreements may be not more than a limitation
specified in law.
``(e) Federal Share of Net Project Cost.--
``(1) In general.--
``(A) Based on engineering studies, studies of
economic feasibility, and information on the expected
use of equipment or facilities, the Secretary shall
estimate the net project cost.
``(B) A grant for the project may be for up to 50
percent of the net project cost. The remainder shall be
provided in cash from non-Federal sources.
``(f) Undertaking Projects in Advance.--
``(1) In general.--The Secretary may pay the Federal share
of the net capital project cost to an applicant that carries
out any part of a project described in this section according
to all applicable procedures and requirements if--
``(A) the applicant applies for the payment;
``(B) the Secretary approves the payment; and
``(C) before carrying out a part of the project,
the Secretary approves the plans and specifications for
the part in the same way as other projects under this
section.
``(2) Interest costs.--The cost of carrying out part of a
project includes the amount of interest earned and payable on
bonds issued by the applicant to the extent proceeds of the
bonds are expended in carrying out the part. The amount of
interest includable as cost under this paragraph may not be
more than the most favorable interest terms reasonably
available for the project at the time of borrowing. The
applicant shall certify, in a manner satisfactory to the
Secretary, that the applicant has shown reasonable diligence in
seeking the most favorable financial terms.
``(3) Use of cost indices.--The Secretary shall consider
changes in capital project cost indices when determining the
estimated cost under paragraph (2) of this subsection.
``(g) Funding.--There are authorized to be appropriated to the
Secretary of Transportation for purposes of this section--
``(1) $525,000,000 for fiscal year 2006,
``(2) $525,000,000 for fiscal year 2007,
``(3) $650,000,000 for fiscal year 2008,
``(4) $750,000,000 for fiscal year 2009, and
``(5) $800,000,000 for fiscal year 2010,
such sums to remain available until expended.
``Sec. 24403. Project management oversight
``(a) Project Management Plan Requirements.--To receive Federal
financial assistance for a major capital project under this chapter, an
applicant shall prepare and carry out a project management plan
approved by the Secretary of Transportation. The plan shall provide
for--
``(1) adequate recipient staff organization with well-
defined reporting relationships, statements of functional
responsibilities, job descriptions, and job qualifications;
``(2) a budget for the project, including the project
management organization, appropriate consultants, property
acquisition, utility relocation, systems demonstration staff,
audits, and miscellaneous payments the recipient may be
prepared to justify;
``(3) a construction schedule for the project;
``(4) a document control procedure and recordkeeping
system;
``(5) a change order procedure that includes a documented,
systematic approach to handling the construction change orders;
``(6) organizational structures, management skills, and
staffing levels required throughout the construction phase;
``(7) quality control and quality assurance functions,
procedures, and responsibilities for construction, system
installation, and integration of system components;
``(8) material testing policies and procedures;
``(9) internal plan implementation and reporting
requirements;
``(10) criteria and procedures to be used for testing the
operational system or its major components;
``(11) annual updates of the plan, especially related to
project budget and project schedule, financing, and ridership
estimates; and
``(12) the recipient's commitment to submit a project
budget and project schedule to the Secretary each month.
``(b) Plan Approval.--
``(1) 60-day decision.--The Secretary shall approve or
disapprove a plan not later than 60 days after it is submitted.
If the approval process cannot be completed within 60 days, the
Secretary shall notify the recipient, explain the reasons for
the delay, and estimate the additional time that will be
required.
``(2) Explanation of disapproval.--If the Secretary
disapproves a plan, the Secretary shall inform the applicant of
the reasons for disapproval of the plan.
``(c) Secretarial Oversight.--
``(1) In general.--The Secretary may use no more than 0.5
percent of amounts made available in a fiscal year for capital
projects under this chapter to enter into contracts to oversee
the construction of such projects.
``(2) Use of funds.--The Secretary may use amounts
available under paragraph (1) of this subsection to make
contracts for safety, procurement, management, and financial
compliance reviews and audits of a recipient of amounts under
paragraph (1).
``(3) Federal share.--The Federal Government may pay the
entire cost of carrying out a contract under this subsection.
``(d) Access to Sites and Records.--Each recipient of assistance
under this chapter shall provide the Secretary and a contractor the
Secretary chooses under subsection (b) of this section with access to
the construction sites and records of the recipient when reasonably
necessary.
``Sec. 24404. Inclusion of projects in Budget
``Beginning with fiscal year 2005, the Secretary of Transportation
shall transmit to the Office of Management and Budget for inclusion in
the President's budget submission for the fiscal year a list of
projects recommended for funding under section 24402 for the fiscal
year.
``Sec. 24405. Local share and maintenance of effort
``(a) In General.--Notwithstanding any other provision of law, a
recipient of assistance under section 24402 may use, as part of the
local matching funds for a capital project, the proceeds from the
issuance of revenue bonds.
``(b) Maintenance of Effort.--The Secretary of Transportation shall
approve the use of proceeds from the issuance of revenue bonds for the
non-Federal share of the net project cost only if the aggregate amount
of financial support for intercity passenger rail service from the
State is not less than the average annual amount provided by the State
during the preceding 3 years.
``Sec. 24406. Grants for maintenance and modernization
``(a) In General.--The Secretary of Transportation may make capital
grants for renewal and modernization of intercity passenger rail
services to--
``(1) the American Passenger Railway Corporation for
services it operates under contract with the Secretary of
Transportation; or
``(2) to States for intercity passenger rail services
operated under a contract with the American Passenger Railway
Corporation or another train operator.
``(b) Use of Funds.--Grants under this section may be used--
``(1) to purchase, lease, rehabilitate, or remanufacture
rolling stock and associated facilities used primarily in
intercity passenger rail service;
``(2) to modernize existing intercity passenger rail
service facilities and information systems; or
``(3) to defray the cost of rental charges to freight
railroads for the addition of train frequencies.
``(c) Federal Share.--For fiscal years 2005 through 2010, the
Federal share for a capital grant under this section may be 100
percent, except that the Federal share for a grant made under
subsection (b)(3) may not exceed 50 percent. After fiscal year 2010,
the Federal share for a capital grant under this section may not exceed
80 percent.
``(d) Allocation Formula.--Funds made available by this section
shall be allocated equitably among the States based on a formula to be
determined by the Secretary.
``(e) Sleeping and Dining Cars.--Pending the restructuring of long
distance routes under sections 106 through 108 of the Rail Passenger
Service Restructuring, Reauthorization, and Development Act, capital
grants may be made to the American Passenger Railway Corporation for
sleeping and dining cars only to the extent necessary to maintain the
equipment in working order and not for the purpose of refurbishing,
rebuilding, or renewing such equipment to extend the equipment's useful
life.
``(f) Long Distance Restructuring Plan.--Unless the restructuring
plan submitted by the Long Distance Route Restructuring Commission
under section 106 of the Rail Passenger Service Restructuring,
Reauthorization, and Development Act is disapproved by Congress, from
the sums authorized for capital projects outside of the Northeast
Corridor, the Secretary may reserve up to $20,000,000 in each of fiscal
years 2007 through 2010 to assist in the restructuring of long distance
routes as linked corridors, and the Federal share of such assistance
shall be 100 percent.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation $200,000,000 for each
of fiscal years 2005 through 2010 to carry out this section.''.

SEC. 202. REGULATIONS IMPLEMENTING CHAPTER 244.

(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary of Transportation shall issue final
regulations under chapter 244 of title 49, United States Code.
(b) Specific Requirements.--The regulations under chapter 244 of
title 49, United States Code, shall include--
(1) the manner in which the Secretary will evaluate and
rate projects based on the results of alternatives analysis,
project justification, and the degree of local financial
commitment, as required by section 24402 of that title;
(2) a definition of ``major capital project'' for purposes
of section 24403;
(3) a requirement that project oversight begin during the
preliminary engineering stage of a project, unless the
Secretary finds it more appropriate to begin oversight during
another stage of a project, to maximize the transportation
benefits and cost savings associated with project management
oversight;
(4) a deadline by which all grant applications for a fiscal
year shall be submitted that is early enough to permit the
Secretary to evaluate all timely applications thoroughly before
making grants;
(5) a formula based on infrastructure ownership, boardings,
and passenger-miles traveled in the prior fiscal year by which
the funds authorized for modernization of existing services
will be allocated among the States; and
(6) a requirement that, if a State does not apply for its
share of formula grant funds under paragraph (5) of this
subsection in a timely manner, those funds will be made
available to other States.

TITLE III--REFORMS

SEC. 301. MANAGEMENT OF SECURED DEBT.

Except as approved by the Secretary of Transportation to refinance
existing secured debt, Amtrak (until the American Passenger Railway
Corporation is established) and the American Passenger Railway
Corporation thereafter, may not enter into any obligation secured by
assets after the date of enactment of this Act. This section does not
prohibit unsecured lines of credit used for working capital purposes.

SEC. 302. EMPLOYEE ASSISTANCE.

(a) Transition Financial Incentives.--
(1) In general.--To reduce operating expenses in
preparation for competition from other rail carriers, the
American Passenger Railway Corporation may institute a program
under which it may, at its discretion, provide financial
incentives to employees who voluntarily terminate their
employment with the Corporation and relinquish any legal rights
to receive termination-related payments under any contractual
agreement with the Corporation.
(2) Conditions for financial incentives.--As a condition
for receiving financial assistance grants under this section,
the American Passenger Railway Corporation shall certify to the
Secretary of Transportation that--
(A) the financial assistance results in a net
reduction in the total number of employees equal to the
number receiving financial incentives;
(B) the financial assistance results in a net
reduction in total employment expense equivalent to the
total employment expenses associated with the employees
receiving financial incentives; and
(C) the total number of employees eligible for
termination-related payments will not be increased
without the express written consent of the Secretary.
(3) Amount of financial incentives.--The financial
incentives authorized under this section may not exceed 1
year's base pay.
(4) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary of Transportation
$25,000,000 for each of fiscal years 2005, 2006, and 2007 to
make grants to the American Passenger Railway Corporation to
fund financial incentive payments to employees under this
subsection.
(b) Labor Protection for Employees of the American Passenger
Railway Corporation.--
(1) In general.--The American Passenger Railway Corporation
shall be responsible for obligations imposed by law or
collective bargaining agreement for compensation and benefits
payable to its employees terminated in connection with the
restructuring of passenger rail service under this Act and the
amendments made by this Act. The responsibility of the American
Passenger Railway Corporation under the preceding sentence, and
the obligations for which it is responsible under that
sentence, may not be transferred to any other entity in
connection with such restructuring by contract or otherwise.
(2) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary of Transportation for the
use of the American Passenger Railway Corporation in meeting
its responsibility under paragraph (1) $75,000,000 for each of
fiscal years 2007 through 2010.
(3) Not an obligation of the united states.--
Notwithstanding paragraph (2), nothing in paragraph (1) shall
be construed to mean that any labor protection obligation of
the American Passenger Railway Corporation under that paragraph
is an obligation of the United States Government.

SEC. 303. TERMINATION OF AUTHORITY FOR GSA TO PROVIDE SERVICES TO
AMTRAK.

Section 1110 of division A of H.R. 5666 (114 Stat. 2763A-202), as
enacted by section 1(a)(4) of the Consolidated Appropriations Act,
2001, is repealed.

SEC. 304. AMTRAK REFORM BOARD OF DIRECTORS.

Section 24302 is amended by adding at the end the following:
``(d) Asset Transition Committee.--
``(1) In general.--The Reform Board shall form an asset
transition committee comprised of the Secretary or the
Secretary's designee, and 2 other members, or 1 other member if
2 other members are not lawfully appointed.
``(2) Powers and duties.--In addition to other powers and
duties assigned by the board, the Asset Transition Committee
has the duty to ensure that the public interest is served in
board decisions and Amtrak management actions that change the
use of or status of--
``(A) the contractual right of access of Amtrak to
rail lines of other railroads;
``(B) Amtrak's secured debt;
``(C) Northeast Corridor real property and assets;
and
``(D) rolling stock.
``(3) Approval required.--The board may not take an action
with regard to the assets or secured debt specified in
paragraph (2), or permit Amtrak management action with regard
to those assets, that is not approved by the asset transition
committee.''.

SEC. 305. LIMITATIONS ON AVAILABILITY OF GRANTS.

(a) In General.--Chapter 243, as amended by section 136 of this Act
is amended by inserting after section 24318 the following:
``Sec. 24319. Limitations on availability of grants
``(a) In General.--In addition to any other requirement imposed
under this title, grants under this subtitle are subject to the
following conditions:
``(1) The Secretary of Transportation may approve funding
to cover operating losses or operating expenses (including
advance purchase orders) only after receiving and approving a
grant request for each specific train route to which the grant
relates.
``(2) Each such grant request shall be accompanied by a
detailed financial analysis, revenue projection, and capital
expenditure program justifying the Federal support to the
Secretary's satisfaction.
``(3) Not later than December 31st prior to each fiscal
year in which a grant under this subtitle is to be made, the
grant recipient shall transmit a business plan for operating
and capital improvements to be funded in the fiscal year under
section 24104(a) to the Secretary of Transportation, the
Committee on Commerce, Science, and Transportation of the
Senate, the Committee on Transportation and Infrastructure of
the House of Representatives, and the House of Representatives
and Senate Committees on Appropriations.
``(4) The business plan shall include--
``(A) targets, as applicable, for ridership,
revenues, and capital and operating expenses;
``(B) a separate accounting for such targets--
``(i) on the Northeast Corridor;
``(ii) each intercity train route;
``(iii) as a group for long distance trains
and corridor services; and
``(iv) commercial activities, including
contract operations and mail and express; and
``(C) a description of the work to be funded, along
with cost estimates and an estimated timetable for
completion of the projects covered by the business
plan.
``(5) Each month of each fiscal year in which grants are
made under this subtitle, the grant recipient shall submit a
supplemental report in electronic format regarding the business
plan, which shall describe the work completed to date, any
changes to the business plan, and the reasons for such changes,
to the Secretary of Transportation, the Committee on Commerce,
Science, and Transportation of the Senate, the Committee on
Transportation and Infrastructure of the House of
Representatives, and the House of Representatives and Senate
Committees on Appropriations.
``(6) None of the funds authorized by this subtitle or the
Rail Passenger Service Restructuring, Reauthorization, and
Development Act may be disbursed for operating expenses,
including advance purchase orders and capital projects not
approved by the Secretary nor in the business plan submitted by
the grant recipient under paragraph (3).
``(7) The grant recipient shall display the business plan
required by paragraph (3) and all subsequent supplemental plans
required by paragraph (5) on its website within a reasonable
time after they are submitted to the Secretary and the Congress
under this section.
``(8) The Secretary may not make any grant under this
subtitle, until the grant recipient agrees to continue abiding
by the provisions of paragraphs (1), (2), (5), (9), and (11) of
the summary of conditions on the direct loan agreement of June
28, 2002, until the loan is repaid.
``(9) With respect to any route on which intercity
passenger rail service is provided on the day before the date
on which the restructuring required by section 24300 is
completed (as determined by the Secretary), the American
Passenger Railway Corporation shall make available to any
replacement operator the legacy equipment that is associated
with the service on the route. The equipment shall be made
available on such terms as the National Railroad Passenger
Corporation determines are fair, reasonable, and in the public
interest.
``(10) The American Passenger Railway Corporation shall
provide interline reservations services to any other provider
of intercity passenger rail transportation on the same basis
and at the same rates as those services were provided to the
operating entities that provide passenger rail service within
Amtrak as of the date of enactment of the Rail Passenger
Service Restructuring, Reauthorization, and Development Act.
``(b) Grant Recipient.--In this section, the term `grant recipient'
means--
``(1) Amtrak, until the date on which the American
Passenger Railway Corporation is established; and
``(2) the American Passenger Railway Corporation, after it
is established.''.
(b) Conforming Amendment.--The chapter analysis for chapter 243 is
amended by inserting after the item relating to section 24318 the
following:

``24319. Limitations on availability of grants.''.

SEC. 306. REPEAL OF OBSOLETE AND EXECUTED PROVISIONS OF LAW.

(a) In General.--The following sections are repealed:
(1) Section 24701.
(2) Section 24706.
(3) Section 24901.
(4) Section 24902.
(5) Section 24904.
(6) Section 24906.
(7) Section 24909.
(b) Amendment of Section 24305.--Section 24305 is amended--
(1) by striking paragraph (2) of subsection (a) and
redesignating paragraph (3) as paragraph (2); and
(2) by inserting ``With regard to items acquired with funds
provided by the Federal Government,'' before ``Amtrak'' in
subsection (f)(2).
(c) Conforming Amendments.--The chapter analyses for chapters 243,
247, and 249 are amended, as appropriate, by striking the items
relating to sections 24307, 24701, 24706, 24901, 24902, 24904, 24906,
24908, and 24909.

SEC. 307. ESTABLISHMENT OF FINANCIAL ACCOUNTING SYSTEM.

(a) In General.--The Inspector General of the Department of
Transportation shall employ an independent financial consultant--
(1) to assess Amtrak's financial accounting and reporting
system and practices as of the date of enactment of this Act;
(2) to design and assist the American Passenger Railway
Corporation in implementing a modern financial accounting and
reporting system, on the basis of the assessment, that will
produce accurate and timely financial information in sufficient
detail--
(A) to enable the American Passenger Railway
Corporation to assign revenues and expenses
appropriately to each of its lines of business and to
each major activity within each line of business
activity, including train operations, equipment
maintenance, ticketing, and reservations;
(B) to aggregate expenses and revenues related to
infrastructure and distinguish them from expenses and
revenues related to rail operations; and
(C) to provide ticketing and reservation
information on a real-time basis.
(b) Verification of System; Report.--The Inspector General of the
Department of Transportation shall review the accounting system
designed and implemented under subsection (a) to ensure that it
accomplishes the purposes for which it is intended. The Inspector
General shall report his findings and conclusions, together with any
recommendations, to the Senate Committee on Commerce, Science, and
Transportation and the House of Representatives Committee on
Transportation and Infrastructure.
(c) Separate Financial Statements for Northeast Corridor
Infrastructure.--Beginning with fiscal year 2006, the American
Passenger Railway Corporation shall issue separate financial statements
for activities related to the infrastructure of the Northeast Corridor.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation $2,500,000 for fiscal
year 2005 to carry out subsection (a), such sums to remain available
until expended.

SEC. 308. RESTRUCTURING OF LONG-TERM DEBT AND CAPITAL LEASES.

(a) In General.--The Secretary of the Treasury, in consultation
with the Secretary of Transportation and Amtrak, shall restructure
Amtrak's indebtedness as of the date of enactment of this Act.
(b) Debt Redemption.--The Secretary of Transportation, in
consultation with the Secretary of the Treasury, shall enter into
negotiations with the holders of Amtrak debt, including leases, that is
outstanding on the date of enactment of this Act for the purpose of
restructuring that debt. The Secretary, in consultation with the
Secretary of the Treasury, shall secure agreements for repayment on
such terms as the Secretary deems favorable to the interests of the
Government.
(c) Criteria.--In redeeming or restructuring Amtrak's indebtedness,
the Secretaries and Amtrak--
(1) shall ensure that the restructuring imposes the least
practicable burden on taxpayers; and
(2) take into consideration repayment costs, the term of
any loan or loans, and market conditions.
(d) Early Redemption Plan.--Within 1 year after the date of
enactment of this Act, the Secretary of Transportation and the
Secretary of the Treasury shall transmit to the Congress--
(1) a plan for the early redemption of Amtrak debt; and
(2) a proposal for covering the costs associated with the
early redemption.
(e) Amtrak Principal and Interest Payments.--
(1) Principal on debt service.--Unless the Secretary of
Transportation and the Secretary of the Treasury restructure or
redeem the debt, there are authorized to be appropriated to the
Secretary of Transportation for the use of Amtrak (before the
date, determined by the Secretary of Transportation, on which
the restructuring required by section 24300 of title 49, United
States Code, is completed) and the American Passenger Railway
Corporation (after that date) for retirement of principal on
loans for capital equipment, or capital leases, not more than
the following amounts:
(A) For fiscal year 2005, $110,000,000.
(B) For fiscal year 2006, $115,000,000.
(C) For fiscal year 2007, $205,000,000.
(D) For fiscal year 2008, $165,000,000.
(E) For fiscal year 2009, $155,000,000.
(F) For fiscal year 2010, $150,000,000.
(2) Interest on debt.--Unless the Secretary of
Transportation and the Secretary of the Treasury restructure or
redeem the debt, there are authorized to be appropriated to the
Secretary of Transportation for the use of Amtrak (before the
date, determined by the Secretary of Transportation, on which
the restructuring required by section 24300 of title 49, United
States Code, is completed) and the American Passenger Railway
Corporation (after that date) for the payment of interest on
loans for capital equipment, or capital leases, the following
amounts:
(A) For fiscal year 2005, $155,000,000.
(B) For fiscal year 2006, $150,000,000.
(C) For fiscal year 2007, $140,000,000.
(D) For fiscal year 2008, $130,000,000.
(E) For fiscal year 2009, $125,000,000.
(F) For fiscal year 2010, $115,000,000.
(3) Reductions in authorization levels.--Whenever action
taken by the Secretary of the Treasury under subsection (c)
results in reductions in amounts of principle and interest that
Amtrak must service on existing debt, Amtrak shall submit to
the Senate Committee on Commerce, Science and Transportation,
the House of Representatives Committee on Transportation and
Infrastructure, the Senate Committee on Appropriations, and
House of Representatives Committee on Appropriations revised
requests for amounts authorized by paragraphs (1) and (2) that
reflect such reductions.
(f) Legal Effect of Payments Under This Section.--The payment of
principal and interest secured debt with the proceeds of grants under
subsection (f) shall not--
(1) modify the extent or nature of any indebtedness of the
National Railroad Passenger Corporation to the United States in
existence of the date of enactment of this Act;
(2) change the private nature of Amtrak's or its
successors' liabilities; or
(3) imply any Federal guarantee or commitment to amortize
Amtrak's outstanding indebtedness.

SEC. 309. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary of
Transportation for the benefit of Amtrak for fiscal year 2005
$750,000,000 for operating expenses.
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