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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2571 Reported in House (RH)]

                                                 Union Calendar No. 206
108th CONGRESS
  1st Session
                                H. R. 2571

                  [Report No. 108-278, Parts I and II]

To provide for the financing of high-speed rail infrastructure, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 24, 2003

  Mr. Young of Alaska (for himself, Mr. Oberstar, Mr. Quinn, and Ms. 
  Corrine Brown of Florida) introduced the following bill; which was 
referred to the Committee on Transportation and Infrastructure, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

                           September 18, 2003

 Reported from the Committee on Transportation and Infrastructure with 
                              an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                           September 18, 2003

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than October 3, 2003

                            October 3, 2003

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than October 31, 2003

                            October 31, 2003

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than November 7, 2003

                            November 6, 2003

      Additional sponsors: Mr. Houghton and Mr. Smith of Michigan

                            November 6, 2003

    Reported from the Committee on Ways and Means with amendments, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed
[Omit the part struck through in boldface brackets and insert the part 
                      printed in boldface italic]

_______________________________________________________________________

                                 A BILL

 
To provide for the financing of high-speed rail infrastructure, and for 
                            other purposes.

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

<DELETED>SECTION 1. SHORT TITLE.

</DELETED>    This Act may be cited as the ``Rail Infrastructure 
Development and Expansion Act for the 21st Century''.

</DELETED>[<DELETED>SEC. 2. HIGH-SPEED INTERCITY RAIL FACILITY BONDS.

</DELETED>    [<DELETED>(a) Amendment.--Chapter 261 of title 49, United 
States Code, is amended by adding at the end the following new section:
</DELETED>[<DELETED>``Sec. 26106. High-speed rail infrastructure bonds
</DELETED>    [<DELETED>``(a) Designation.--The Secretary may designate 
bonds for purposes of subsection (f) or section 54 of the Internal 
Revenue Code of 1986 if--
        </DELETED>    [<DELETED>``(1) the bonds are to be issued by--
                </DELETED>    [<DELETED>``(A) a State, if the entire 
                railroad passenger transportation corridor containing 
                the infrastructure project to be financed is within the 
                State;
                </DELETED>    [<DELETED>``(B) 1 or more of the States 
                that have entered into an agreement or an interstate 
                compact consented to by Congress under section 410(a) 
                of Public Law 105-134 (49 U.S.C 24101 nt); or
                </DELETED>    [<DELETED>``(C) an agreement or an 
                interstate compact described in subparagraph (B);
        </DELETED>    [<DELETED>``(2) the bonds are for the purpose of 
        financing--
                </DELETED>    [<DELETED>``(A) projects that make a 
                substantial contribution to providing the 
                infrastructure and equipment required to complete a 
                high-speed rail transportation corridor (including 
                projects for the acquisition, financing, or refinancing 
                of equipment and other capital improvements, including 
                the introduction of new high-speed technologies such as 
                magnetic levitation systems, track or signal 
                improvements, the elimination of grade crossings, 
                development of intermodal facilities, improvement of 
                train speeds or safety, or both, and station 
                rehabilitation or construction), but only if the 
                Secretary determines that the projects are part of a 
                viable and comprehensive high-speed rail transportation 
                corridor design for intercity passenger service, 
                including a design for minimally operable segments of a 
                corridor designated under section 104(d)(2) of title 
                23, United States Code; or
                </DELETED>    [<DELETED>``(B) projects for the Alaska 
                Railroad;
        </DELETED>    [<DELETED>``(3) for a railroad passenger 
        transportation corridor design that includes the use of rights-
        of-way owned by a freight railroad, a written agreement exists 
        between the applicant and the freight railroad regarding such 
        use and ownership, including compensation for such use and 
        assurances regarding the adequacy of infrastructure capacity to 
        accommodate both existing and future freight and passenger 
        operations, and including an assurance by the freight railroad 
        that collective bargaining agreements with the freight 
        railroad's employees (including terms regulating the 
        contracting of work) shall remain in full force and effect 
        according to their terms for work performed by the freight 
        railroad on such railroad passenger transportation corridor;
        </DELETED>    [<DELETED>``(4) the corridor design eliminates 
        existing railway-highway grade crossings that the Secretary 
        determines would impede high-speed rail operations;
        </DELETED>    [<DELETED>``(5) the applicant agrees to comply 
        with--
                </DELETED>    [<DELETED>``(A) the standards of section 
                24312, as in effect on September 1, 2002, with respect 
                to the project in the same manner that the National 
                Railroad Passenger Corporation is required to comply 
                with such standards for construction work financed 
                under an agreement made under section 24308(a); and
                </DELETED>    [<DELETED>``(B) the protective 
                arrangements established under section 504 of the 
                Railroad Revitalization and Regulatory Reform Act of 
                1976 (45 U.S.C. 836) with respect to employees affected 
                by actions taken in connection with the project to be 
                financed by the bond; and
        </DELETED>    [<DELETED>``(6) the applicant agrees not to pay 
        the principal or interest on the bonds using funds derived 
        directly or indirectly from the Highway Trust Fund, except as 
        permitted by law as of the date of the enactment of this 
        section.
</DELETED>    [<DELETED>``(b) Bond Amount Limitation.--
        </DELETED>    [<DELETED>``(1) In general.--The amount of bonds 
        designated under this section may not exceed--
                </DELETED>    [<DELETED>``(A) in the case of subsection 
                (f) bonds, $1,200,000,000 for each of the fiscal years 
                2004 through 2013; and
                </DELETED>    [<DELETED>``(B) in the case of section 54 
                bonds, $1,200,000,000 for each of the fiscal years 2004 
                through 2013.
        </DELETED>    [<DELETED>``(2) Carryover of unused limitation.--
        If for any fiscal year the limitation amount under subparagraph 
        (A) or (B) of paragraph (1) exceeds--
                </DELETED>    [<DELETED>``(A) with respect to 
                subparagraph (A) of paragraph (1), the amount of 
                subsection (f) bonds issued during such year; or
                </DELETED>    [<DELETED>``(B) with respect to 
                subparagraph (B) of paragraph (1), the amount of 
                section 54 bonds issued during such year,
        the limitation amount under subparagraph (A) or (B) of 
        paragraph (1), as the case may be, for the following fiscal 
        year (through fiscal year 2017) shall be increased by the 
        amount of such excess.
</DELETED>    [<DELETED>``(c) Preference.--The Secretary shall give 
preference to the designation under this section of bonds for 
projects--
        </DELETED>    [<DELETED>``(1) to be funded through a 
        combination of subsection (f) bonds and section 54 bonds;
        </DELETED>    [<DELETED>``(2) which propose to link rail 
        passenger service with other modes of transportation;
        </DELETED>    [<DELETED>``(3) expected to have a significant 
        impact on air traffic congestion;
        </DELETED>    [<DELETED>``(4) expected to also improve commuter 
        rail operations;
        </DELETED>    [<DELETED>``(5) where all environmental work has 
        already been completed and the project is ready to commence; or
        </DELETED>    [<DELETED>``(6) that have received financial 
        commitments and other support of State and local governments.
</DELETED>    [<DELETED>``(d) Timely Disposition of Application.--The 
Secretary shall grant or deny a requested designation within 9 months 
after receipt of an application.
</DELETED>    [<DELETED>``(e) Annual Reports.--
        </DELETED>    [<DELETED>``(1) From issuer of bonds.--The issuer 
        of bonds designated under subsection (a) shall report annually 
        to the Secretary regarding the terms of outstanding designated 
        bonds and the progress made with respect to the project 
        financed by the bonds.
        </DELETED>    [<DELETED>``(2) From secretary.--The Secretary, 
        in consultation with the Secretary of the Treasury, shall 
        transmit to the Congress an annual report which includes--
                </DELETED>    [<DELETED>``(A) reports received under 
                paragraph (1); and
                </DELETED>    [<DELETED>``(B) an assessment of the 
                progress made toward completion of high-speed rail 
                transportation corridors resulting from projects 
                financed by bonds designated under subsection (a).
</DELETED>    [<DELETED>``(f) Tax Treatment of Subsection (f) 
Bonds</DELETED>.--
            [<DELETED>``(1) Exclusion from gross income.--The interest 
        on a bond designated by the Secretary under subsection (a) for 
        purposes of this subsection shall be excluded from gross income 
        under section 103 of the Internal Revenue Code of 1986, 
        notwithstanding section 149(c) of such Code.
        </DELETED>    [<DELETED>``(2) Exemption from volume cap.--For 
        purposes of section 146 of such Code, a bond designated by the 
        Secretary under subsection (a) for purposes of this subsection 
        shall be considered to be exempt from the volume cap of the 
        issuing authority in the same manner as bonds listed in 
        subsection (g) of such section 146.
</DELETED>    [<DELETED>``(g) Refinancing Rules.--Bonds designated by 
the Secretary under subsection (a) may be issued for refinancing 
projects only if the indebtedness being refinanced (including any 
obligation directly or indirectly refinanced by such indebtedness) was 
originally incurred by the issuer--
        </DELETED>    [<DELETED>``(1) after the date of the enactment 
        of this section;
        </DELETED>    [<DELETED>``(2) for a term of not more than 3 
        years;
        </DELETED>    [<DELETED>``(3) to finance projects described in 
        subsection (a)(2); and
        </DELETED>    [<DELETED>``(4) in anticipation of being 
        refinanced with proceeds of a bond designated under subsection 
        (a).
</DELETED>    [<DELETED>``(h) Provisions Regarding High-Speed Rail 
Service.--
        </DELETED>    [<DELETED>``(1) Status as employer or carrier.--
        Any entity providing railroad transportation (within the 
        meaning of section 20102) that begins operations after the date 
        of enactment of this section and that uses property acquired 
        pursuant to this section (except as provided in subsection 
        (a)(2)(B)), 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.).
        </DELETED>    [<DELETED>``(2) Collective bargaining 
        agreement.--Any entity providing high-speed intercity passenger 
        railroad transportation (within the meaning of section 20102) 
        that begins operations after the date of enactment of this 
        section on a project funded in whole or in part by bonds 
        designated under subsection (a), and replaces intercity rail 
        passenger service that was provided by another entity as of the 
        date of enactment of this section, shall enter into an 
        agreement with the authorized bargaining agent or agents for 
        employees of the predecessor provider that--
                </DELETED>    [<DELETED>``(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;
                </DELETED>    [<DELETED>``(B) establishes a procedure 
                for notifying such an employee of such positions;
                </DELETED>    [<DELETED>``(C) establishes a procedure 
                for such an employee to apply for such positions; and
                </DELETED>    [<DELETED>``(D) establishes rates of pay, 
                rules, and working conditions.
        </DELETED>    [<DELETED>``(3) Immediate replacement of existing 
        rail passenger service.--
                </DELETED>    [<DELETED>(A) Negotiations.--If the 
                replacement of preexisting intercity rail passenger 
                service occurs concurrent with or within a reasonable 
                amount of time before the commencement of the replacing 
                entity's high-speed rail passenger service, the 
                replacing entity 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 paragraph (2)(A)-(D). 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).
                </DELETED>    [<DELETED>``(B) Arbitration.--If an 
                agreement has not been entered into with respect to all 
                matters set forth in paragraph (2)(A)-(D) 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 seven 
                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 paragraph (2)(A)-(D). 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; all other 
                expenses shall be paid by the party incurring them.
                </DELETED>    [<DELETED>``(C) Service commencement.--A 
                replacing entity under this paragraph shall commence 
                service only after an agreement is entered into with 
                respect to the matters set forth in paragraph (2)(A)-
                (D) or the decision of the arbitrator has been 
                rendered.
        </DELETED>    [<DELETED>``(4) Subsequent replacement of 
        existing rail passenger service.--If the replacement of 
        existing rail passenger service takes place within 3 years 
        after the replacing entity commences high-speed rail passenger 
        service, the replacing entity and the collective bargaining 
        agent or agents for the employees of the predecessor provider 
        shall enter into an agreement with respect to the matters set 
        forth in paragraph (2)(A)-(D). If the parties have not entered 
        into an agreement with respect to all such matters within 60 
        days after the date on which the replacing entity replaces the 
        predecessor provider, the parties shall select an arbitrator 
        using the procedures set forth in paragraph (3)(B), who shall, 
        within 20 days after the commencement of the arbitration, 
        conduct a hearing and decide all unresolved issues. This 
        decision shall be final, binding, and conclusive upon the 
        parties.
</DELETED>    [<DELETED>``(i) Issuance of Regulations.--Not later than 
6 months after the date of the enactment of this section, the Secretary 
shall issue regulations for carrying out this section.
</DELETED>    [<DELETED>``(j) Definitions.--For purposes of this 
section--
        </DELETED>    [<DELETED>``(1) Subsection (f) bond.--The term 
        `subsection (f) bond' means a bond designated by the Secretary 
        under subsection (a) for purposes of subsection (f).
        </DELETED>    [<DELETED>``(2) Section 54 bond.--The term 
        `section 54 bond' means a bond designated by the Secretary 
        under subsection (a) for purposes of section 54 of the Internal 
        Revenue Code of 1986 (relating to credit to holders of 
        qualified high-speed rail infrastructure bonds).''.
</DELETED>    [<DELETED>(b) Table of Sections Amendment.--The table of 
sections of chapter 261 of title 49, United States Code, is amended by 
adding after the item relating to section 26105 the following new item:

</DELETED>[<DELETED>``26106.  High-speed rail infrastructure bonds.''.

</DELETED>[<DELETED>SEC. 3. TAX CREDIT TO HOLDERS OF QUALIFIED HIGH-
              SPEED RAIL INFRASTRUCTURE BONDS.

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

 </DELETED>[<DELETED>``Subpart H--Nonrefundable Credit for Holders of 
             Qualified High-Speed Rail Infrastructure Bonds

                              </DELETED>[<DELETED>``Sec. 54. Credit to 
                                        holders of qualified high-speed 
                                        rail infrastructure bonds.

</DELETED>[<DELETED>``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED HIGH-
              SPEED RAIL INFRASTRUCTURE BONDS.

</DELETED>    [<DELETED>``(a) Allowance of Credit.--In the case of a 
taxpayer who holds a qualified high-speed rail infrastructure bond on a 
credit allowance date of such bond which occurs during the taxable 
year, there shall be allowed as a credit against the tax imposed by 
this chapter for such taxable year an amount equal to the sum of the 
credits determined under subsection (b) with respect to credit 
allowance dates during such year on which the taxpayer holds such bond.
</DELETED>    [<DELETED>``(b) Amount of Credit.--
        </DELETED>    [<DELETED>``(1) In general.--The amount of the 
        credit determined under this subsection with respect to any 
        credit allowance date for a qualified high-speed rail 
        infrastructure bond is 25 percent of the annual credit 
        determined with respect to such bond.
        </DELETED>    [<DELETED>``(2) Annual credit.--The annual credit 
        determined with respect to any qualified high-speed rail 
        infrastructure bond is the product of--
                </DELETED>    [<DELETED>``(A) the applicable credit 
                rate, multiplied by
                </DELETED>    [<DELETED>``(B) the outstanding face 
                amount of the bond.
        </DELETED>    [<DELETED>``(3) Applicable credit rate.--For 
        purposes of paragraph (2), the applicable credit rate with 
        respect to an issue is the rate equal to an average market 
        yield (as of the day before the date of sale of the issue) on 
        outstanding long-term corporate debt obligations (determined 
        under regulations prescribed by the Secretary).
        </DELETED>    [<DELETED>``(4) Credit allowance date.--For 
        purposes of this section, the term `credit allowance date' 
        means--
                </DELETED>    [<DELETED>``(A) March 15,
                </DELETED>    [<DELETED>``(B) June 15,
                </DELETED>    [<DELETED>``(C) September 15, and
                </DELETED>    [<DELETED>``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
        </DELETED>    [<DELETED>``(5) Special rule for issuance and 
        redemption.--In the case of a bond which is issued during the 
        3-month period ending on a credit allowance date, the amount of 
        the credit determined under this subsection with respect to 
        such credit allowance date shall be a ratable portion of the 
        credit otherwise determined based on the portion of the 3-month 
        period during which the bond is outstanding. A similar rule 
        shall apply when the bond is redeemed.
</DELETED>    [<DELETED>``(c) Limitation Based on Amount of Tax.--
        </DELETED>    [<DELETED>``(1) In general.--The credit allowed 
        under subsection (a) for any taxable year shall not exceed the 
        excess of--
                </DELETED>    [<DELETED>``(A) the sum of the regular 
                tax liability (as defined in section 26(b)) plus the 
                tax imposed by section 55, over
                </DELETED>    [<DELETED>``(B) the sum of the credits 
                allowable under this part (other than this subpart and 
                subpart C).
        </DELETED>    [<DELETED>``(2) Carryover of unused credit.--If 
        the credit allowable under subsection (a) exceeds the 
        limitation imposed by paragraph (1) for such taxable year, such 
        excess shall be carried to the succeeding taxable year and 
        added to the credit allowable under subsection (a) for such 
        taxable year.
</DELETED>    [<DELETED>``(d) Credit Included in Gross Income.--Gross 
income includes the amount of the credit allowed to the taxpayer under 
this section (determined without regard to subsection (c)) and the 
amount so included shall be treated as interest income.
</DELETED>    [<DELETED>``(e) Qualified High-Speed Rail Infrastructure 
Bond.--For purposes of this part, the term `qualified high-speed rail 
infrastructure bond' means any bond issued as part of an issue if--
        </DELETED>    [<DELETED>``(1) the issuer certifies that the 
        Secretary of Transportation has designated the bond for 
        purposes of this section under section 26106(a) of title 49, 
        United States Code, as in effect on the date of the enactment 
        of this section,
        </DELETED>    [<DELETED>``(2) 95 percent or more of the 
        proceeds from the sale of such issue are to be used for 
        expenditures incurred after the date of the enactment of this 
        section for any project described in section 26106(a)(2) of 
        title 49, United States Code,
        </DELETED>    [<DELETED>``(3) the term of each bond which is 
        part of such issue does not exceed 20 years,
        </DELETED>    [<DELETED>``(4) the payment of principal with 
        respect to such bond is the obligation solely of the issuer, 
        and
        </DELETED>    [<DELETED>``(5) the issue meets the requirements 
        of subsection (f) (relating to arbitrage).
</DELETED>    [<DELETED>``(f) Special Rules Relating to Arbitrage.--
        </DELETED>    [<DELETED>``(1) In general.--Subject to paragraph 
        (2), an issue shall be treated as meeting the requirements of 
        this subsection if as of the date of issuance, the issuer 
        reasonably expects--
                </DELETED>    [<DELETED>``(A) to spend at least 95 
                percent of the proceeds from the sale of the issue for 
                1 or more qualified projects within the 3-year period 
                beginning on such date,
                </DELETED>    [<DELETED>``(B) to incur a binding 
                commitment with a third party to spend at least 10 
                percent of the proceeds from the sale of the issue, or 
                to commence construction, with respect to such projects 
                within the 6-month period beginning on such date, and
                </DELETED>    [<DELETED>``(C) to proceed with due 
                diligence to complete such projects and to spend the 
                proceeds from the sale of the issue.
        </DELETED>    [<DELETED>``(2) Rules regarding continuing 
        compliance after 3-year determination.--If at least 95 percent 
        of the proceeds from the sale of the issue is not expended for 
        1 or more qualified projects within the 3-year period beginning 
        on the date of issuance, but the requirements of paragraph (1) 
        are otherwise met, an issue shall be treated as continuing to 
        meet the requirements of this subsection if either--
                </DELETED>    [<DELETED>``(A) the issuer uses all 
                unspent proceeds from the sale of the issue to redeem 
                bonds of the issue within 90 days after the end of such 
                3-year period, or
                </DELETED>    [<DELETED>``(B) the following 
                requirements are met:
                        </DELETED>    [<DELETED>``(i) The issuer spends 
                        at least 75 percent of the proceeds from the 
                        sale of the issue for 1 or more qualified 
                        projects within the 3-year period beginning on 
                        the date of issuance.
                        </DELETED>    [<DELETED>``(ii) Either--
                                </DELETED>    [<DELETED>``(I) the 
                                issuer spends at least 95 percent of 
                                the proceeds from the sale of the issue 
                                for 1 or more qualified projects within 
                                the 4-year period beginning on the date 
                                of issuance, or
                                </DELETED>    [<DELETED>``(II) the 
                                issuer pays to the Federal Government 
                                any earnings on the proceeds from the 
                                sale of the issue that accrue after the 
                                end of the 3-year period beginning on 
                                the date of issuance and uses all 
                                unspent proceeds from the sale of the 
                                issue to redeem bonds of the issue 
                                within 90 days after the end of the 4-
                                year period beginning on the date of 
                                issuance.
</DELETED>    [<DELETED>``(g) Recapture of Portion of Credit Where 
Cessation of Compliance.--
        </DELETED>    [<DELETED>``(1) In general.--If any bond which 
        when issued purported to be a qualified high-speed rail 
        infrastructure bond ceases to be such a qualified bond, the 
        issuer shall pay to the United States (at the time required by 
        the Secretary) an amount equal to the sum of--
                </DELETED>    [<DELETED>``(A) the aggregate of the 
                credits allowable under this section with respect to 
                such bond (determined without regard to subsection (c)) 
                for taxable years ending during the calendar year in 
                which such cessation occurs and the 2 preceding 
                calendar years, and
                </DELETED>    [<DELETED>``(B) interest at the 
                underpayment rate under section 6621 on the amount 
                determined under subparagraph (A) for each calendar 
                year for the period beginning on the first day of such 
                calendar year.
        </DELETED>    [<DELETED>``(2) Failure to pay.--If the issuer 
        fails to timely pay the amount required by paragraph (1) with 
        respect to such bond, the tax imposed by this chapter on each 
        holder of any such bond which is part of such issue shall be 
        increased (for the taxable year of the holder in which such 
        cessation occurs) by the aggregate decrease in the credits 
        allowed under this section to such holder for taxable years 
        beginning in such 3 calendar years which would have resulted 
        solely from denying any credit under this section with respect 
        to such issue for such taxable years.
        </DELETED>    [<DELETED>``(3) Special rules.--
                </DELETED>    [<DELETED>``(A) Tax benefit rule.--The 
                tax for the taxable year shall be increased under 
                paragraph (2) only with respect to credits allowed by 
                reason of this section which were used to reduce tax 
                liability. In the case of credits not so used to reduce 
                tax liability, the carryforwards and carrybacks under 
                section 39 shall be appropriately adjusted.
                </DELETED>    [<DELETED>``(B) No credits against tax.--
                Any increase in tax under paragraph (2) shall not be 
                treated as a tax imposed by this chapter for purposes 
                of determining--
                        </DELETED>    [<DELETED>``(i) the amount of any 
                        credit allowable under this part, or
                        </DELETED>    [<DELETED>``(ii) the amount of 
                        the tax imposed by section 55.
</DELETED>    [<DELETED>``(h) Other Definitions and Special Rules.--For 
purposes of this section--
        </DELETED>    [<DELETED>``(1) Bond.--The term `bond' includes 
        any obligation.
        </DELETED>    [<DELETED>``(2) Qualified project.--The term 
        `qualified project' means any project described in section 
        26106(a)(2) of title 49, United States Code.
        </DELETED>    [<DELETED>``(3) Treatment of changes in use.--For 
        purposes of subsection (e)(2), the proceeds from the sale of an 
        issue shall not be treated as used for a qualified project to 
        the extent that the issuer takes any action within its control 
        which causes such proceeds not to be used for a qualified 
        project. The Secretary shall prescribe regulations specifying 
        remedial actions that may be taken (including conditions to 
        taking such remedial actions) to prevent an action described in 
        the preceding sentence from causing a bond to fail to be a 
        qualified high-speed rail infrastructure bond.
        </DELETED>    [<DELETED>``(4) Partnership; s corporation; and 
        other pass-thru entities.--Under regulations prescribed by the 
        Secretary, in the case of a partnership, trust, S corporation, 
        or other pass-thru entity, rules similar to the rules of 
        section 41(g) shall apply with respect to the credit allowable 
        under subsection (a).
        </DELETED>    [<DELETED>``(5) Bonds held by regulated 
        investment companies.--If any qualified high-speed rail 
        infrastructure bond is held by a regulated investment company, 
        the credit determined under subsection (a) shall be allowed to 
        shareholders of such company under procedures prescribed by the 
        Secretary.
        </DELETED>    [<DELETED>``(6) Reporting.--Issuers of qualified 
        high-speed rail infrastructure bonds shall submit reports 
        similar to the reports required under section 149(e).''.
</DELETED>    [<DELETED>(b) Amendments to Other Code Sections.--
        </DELETED>    [<DELETED>(1) Reporting.--Subsection (d) of 
        section 6049 of the Internal Revenue Code of 1986 (relating to 
        returns regarding payments of interest) is amended by adding at 
        the end the following new paragraph:
        </DELETED>    [<DELETED>``(8) Reporting of credit on qualified 
        high-speed rail infrastructure bonds.--
                </DELETED>    [<DELETED>``(A) In general.--For purposes 
                of subsection (a), the term `interest' includes amounts 
                includible in gross income under section 54(d) and such 
                amounts shall be treated as paid on the credit 
                allowance date (as defined in section 54(b)(4)).
                </DELETED>    [<DELETED>``(B) Reporting to 
                corporations, etc.--Except as otherwise provided in 
                regulations, in the case of any interest described in 
                subparagraph (A), subsection (b)(4) shall be applied 
                without regard to subparagraphs (A), (H), (I), (J), 
                (K), and (L)(i) of such subsection.
                </DELETED>    [<DELETED>``(C) Regulatory authority.--
                The Secretary may prescribe such regulations as are 
                necessary or appropriate to carry out the purposes of 
                this paragraph, including regulations which require 
                more frequent or more detailed reporting.''.
        </DELETED>    [<DELETED>(2) Treatment for estimated tax 
        purposes.--
                </DELETED>    [<DELETED>(A) Individual.--Section 6654 
                of such Code (relating to failure by individual to pay 
                estimated income tax) is amended by redesignating 
                subsection (m) as subsection (n) and by inserting after 
                subsection (l) the following new subsection:
</DELETED>    [<DELETED>``(m) Special Rule for Holders of Qualified 
High-Speed Rail Infrastructure Bonds.--For purposes of this section, 
the credit allowed by section 54 to a taxpayer by reason of holding a 
qualified high-speed rail infrastructure bond on a credit allowance 
date shall be treated as if it were a payment of estimated tax made by 
the taxpayer on such date.''.
                </DELETED>    [<DELETED>(B) Corporate.--Section 6655 of 
                such Code (relating to failure by corporation to pay 
                estimated income tax) is amended by adding at the end 
                of subsection (g) the following new paragraph:
        </DELETED>    [<DELETED>``(5) Special rule for holders of 
        qualified high-speed rail infrastructure bonds.--For purposes 
        of this section, the credit allowed by section 54 to a taxpayer 
        by reason of holding a qualified high-speed rail infrastructure 
        bond on a credit allowance date shall be treated as if it were 
        a payment of estimated tax made by the taxpayer on such 
        date.''.
</DELETED>    [<DELETED>(c) Clerical Amendments.--
        </DELETED>    [<DELETED>(1) The table of subparts for part IV 
        of subchapter A of chapter 1 is amended by adding at the end 
        the following new item:

                              </DELETED>[<DELETED>``Subpart H. 
                                        Nonrefundable Credit for 
                                        Holders of Qualified Amtrak 
                                        Bonds.''.
        </DELETED>    [<DELETED>(2) Section 6401(b)(1) is amended by 
        striking ``and G'' and inserting ``G, and H''.
</DELETED>    [<DELETED>(d) Issuance of Regulations.--Not later than 6 
months after the date of the enactment of this section, the Secretary 
of the Treasury shall issue regulations for carrying out this section 
and the amendments made by this section.
</DELETED>    [<DELETED>(e) High-Speed Intercity Rail Facilities.--
        </DELETED>    [<DELETED>(1) Requirement to meet title 49 
        requirements.--Section 142(i) of the Internal Revenue Code of 
        1986 is amended by adding at the end the following new 
        paragraph:
        </DELETED>    [<DELETED>``(4) Additional requirements.--A bond 
        issued as part of an issue described in subsection (a)(11) 
        shall not be considered an exempt facility bond unless the 
        requirements of paragraphs (1) through (6) of section 26106(a) 
        of title 49, United States Code, are met.''.
        </DELETED>    [<DELETED>(2) Revision of speed requirement.--
        Section 142(i)(1) of such Code is amended by striking ``150 
        miles per hour'' and inserting ``110 miles per hour''.
</DELETED>    [<DELETED>(f) Effective Date.--The amendments made by 
this section shall apply to obligations issued after the date of 
enactment of this Act.</DELETED>]

<DELETED>SEC.</DELETED> [<DELETED>4.</DELETED>] 2. <DELETED>HIGH-SPEED 
              RAIL CORRIDOR DEVELOPMENT.

</DELETED>    (a) Corridor Development.--
        </DELETED>    (1) Amendments.--Section 26101 of title 49, 
        United States Code, is amended--
                </DELETED>    (A) in the section heading, by striking 
                ``planning'' and inserting ``development'';
                </DELETED>    (B) in the heading of subsection (a), by 
                striking ``Planning'' and inserting ``Development'';
                </DELETED>    (C) by striking ``corridor planning'' 
                each place it appears and inserting ``corridor 
                development'';
                </DELETED>    (D) in subsection (b)(1)--
                        </DELETED>    (i) by inserting ``, or if it is 
                        an activity described in subparagraph (M)'' 
                        after ``high-speed rail improvements'';
                        </DELETED>    (ii) by striking ``and'' at the 
                        end of subparagraph (K);
                        </DELETED>    (iii) by striking the period at 
                        the end of subparagraph (L) and inserting ``; 
                        and''; and
                        </DELETED>    (iv) by adding at the end the 
                        following new subparagraph:
        </DELETED>    ``(M) the acquisition of locomotives, rolling 
        stock, track, and signal equipment.''; and
                <DELETED>    (E) in subsection (c)(2), by striking 
                ``planning'' and inserting ``development''.</DELETED>
        <DELETED>    (2) Conforming amendment.--The item relating to 
        section 26101 in the table of sections of chapter 261 of title 
        49, United States Code, is amended by striking ``planning'' and 
        inserting ``development''.</DELETED>
<DELETED>    (b) Authorization of Appropriations.--Section 26104 of 
title 49, United States Code, is amended to read as follows:</DELETED>
<DELETED>``Sec. 26104. Authorization of appropriations</DELETED>
<DELETED>    ``(a) Fiscal Years 2004 Through 2011.--There are 
authorized to be appropriated to the Secretary--</DELETED>
        <DELETED>    ``(1) $70,000,000 for carrying out section 26101; 
        and</DELETED>
        <DELETED>    ``(2) $30,000,000 for carrying out section 
        26102,</DELETED>
<DELETED>for each of the fiscal years 2004 through 2011.</DELETED>
<DELETED>    ``(b) Funds To Remain Available.--Funds made available 
under this section shall remain available until expended.''.</DELETED>

SEC. </DELETED>[<DELETED>5.</DELETED>] 3. <DELETED>REHABILITATION AND 
              IMPROVEMENT FINANCING.

<DELETED>    (a) Definitions.--Section 102(7) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 802(7)) is 
amended to read as follows:</DELETED>
        <DELETED>    ``(7) `railroad' has the meaning given that term 
        in section 20102 of title 49, United States Code; 
        and''.</DELETED>
<DELETED>    (b) General Authority.--Section 502(a) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(a)) is 
amended by striking ``Secretary may provide direct loans and loan 
guarantees to State and local governments,'' and inserting ``Secretary 
shall provide direct loans and loan guarantees to State and local 
governments, agreements or interstate compacts consented to by Congress 
under section 410(a) of Public Law 105-134 (49 U.S.C 24101 
nt),''.</DELETED>
<DELETED>    (c) Extent of Authority.--Section 502(d) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)) is 
amended--</DELETED>
        <DELETED>    (1) by striking ``$3,500,000,000'' and inserting 
        ``$35,000,000,000'';</DELETED>
        <DELETED>    (2) by striking ``$1,000,000,000'' and inserting 
        ``$7,000,000,000''; and</DELETED>
        <DELETED>    (3) by adding at the end the following new 
        sentence: ``The Secretary shall not establish any limit on the 
        proportion of the unused amount authorized under this 
        subsection that may be used for 1 loan or loan 
        guarantee.''.</DELETED>
<DELETED>    (d) Cohorts of Loans.--Section 502(f) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(f)) is 
amended--</DELETED>
        <DELETED>    (1) in paragraph (2)--</DELETED>
                <DELETED>    (A) by striking ``and'' at the end of 
                subparagraph (D);</DELETED>
                <DELETED>    (B) by redesignating subparagraph (E) as 
                subparagraph (F); and</DELETED>
                <DELETED>    (C) by adding after subparagraph (D) the 
                following new subparagraph:</DELETED>
                <DELETED>    ``(E) the size and characteristics of the 
                cohort of which the loan or loan guarantee is a member; 
                and''; and</DELETED>
        <DELETED>    (2) by adding at the end of paragraph (4) the 
        following: ``A cohort may include loans and loan guarantees. 
        The Secretary shall not establish any limit on the proportion 
        of a cohort that may be used for 1 loan or loan 
        guarantee.''.</DELETED>
<DELETED>    (e) Conditions of Assistance.--Section 502 of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822) is 
amended--</DELETED>
        <DELETED>    (1) in subsection (f)(2)(A), by inserting ``, if 
        any'' after ``collateral offered''; and</DELETED>
        <DELETED>    (2) by adding at the end of subsection (h) the 
        following:</DELETED>
<DELETED>``The Secretary shall not require an applicant for a direct 
loan or loan guarantee under this section to provide collateral. The 
Secretary shall not require that an applicant for a direct loan or loan 
guarantee under this section have previously sought the financial 
assistance requested from another source. The Secretary shall require 
recipients of direct loans or loan guarantees under this section to 
apply the standards of section 26106(a)(5) of title 49, United States 
Code, to their projects.''.</DELETED>
<DELETED>    (f) Time Limit for Approval or Disapproval.--Section 502 
of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 
U.S.C. 822) is amended by adding at the end the following new 
subsection:</DELETED>
<DELETED>    ``(i) Time Limit for Approval or Disapproval.--Not later 
than 90 days after receiving a complete application for a direct loan 
or loan guarantee under this section, the Secretary shall approve or 
disapprove the application.''.</DELETED>
<DELETED>    (g) Fees and Charges.--Section 503 of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 823) is 
amended by adding at the end the following new subsection:</DELETED>
<DELETED>    ``(l) Fees and Charges.--Except as provided in this title, 
the Secretary may not assess any fees, including user fees, or charges 
in connection with a direct loan or loan guarantee provided under 
section 502.''.</DELETED>
<DELETED>    (h) Substantive Criteria and Standards.--Not later than 30 
days after the date of the enactment of this Act, the Secretary of 
Transportation shall publish in the Federal Register and post on the 
Department of Transportation web site the substantive criteria and 
standards used by the Secretary to determine whether to approve or 
disapprove applications submitted under section 502 of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 
822).</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rail Infrastructure Development and 
Expansion Act for the 21st Century''.

SEC. 2. HIGH-SPEED INTERCITY RAIL FACILITY BONDS.

    (a) Amendment.--Chapter 261 of title 49, United States Code, is 
amended by adding at the end the following new section:
``Sec. 26106. High-speed rail infrastructure bonds
    ``(a) Designation.--The Secretary may designate bonds for purposes 
of subsection (f) or section 54 of the Internal Revenue Code of 1986 
if--
            ``(1) the bonds are to be issued by--
                    ``(A) a State, if the entire railroad passenger 
                transportation corridor containing the infrastructure 
                project to be financed is within the State;
                    ``(B) 1 or more of the States that have entered 
                into an agreement or an interstate compact consented to 
                by Congress under section 410(a) of Public Law 105-134 
                (49 U.S.C 24101 nt); or
                    ``(C) an agreement or an interstate compact 
                described in subparagraph (B);
            ``(2) the bonds are for the purpose of financing--
                    ``(A) projects that make a substantial contribution 
                to providing the infrastructure and equipment required 
                to complete a high-speed rail transportation corridor 
                (including projects for the acquisition, financing, or 
                refinancing of equipment and other capital 
                improvements, including the introduction of new high-
                speed technologies such as magnetic levitation systems, 
                track or signal improvements, the elimination of grade 
                crossings, development of intermodal facilities, 
                improvement of train speeds or safety, or both, and 
                station rehabilitation or construction), but only if 
                the Secretary determines that the projects are part of 
                a viable and comprehensive high-speed rail 
                transportation corridor design for intercity passenger 
                service, including a design for minimally operable 
                segments of a corridor designated under section 
                104(d)(2) of title 23, United States Code; or
                    ``(B) projects for the Alaska Railroad;
            ``(3) for a railroad passenger transportation corridor 
        design that includes the use of rights-of-way owned by a 
        freight railroad, a written agreement exists between the 
        applicant and the freight railroad regarding such use and 
        ownership, including compensation for such use and assurances 
        regarding the adequacy of infrastructure capacity to 
        accommodate both existing and future freight and passenger 
        operations, and including an assurance by the freight railroad 
        that collective bargaining agreements with the freight 
        railroad's employees (including terms regulating the 
        contracting of work) shall remain in full force and effect 
        according to their terms for work performed by the freight 
        railroad on such railroad passenger transportation corridor;
            ``(4) the corridor design eliminates existing railway-
        highway grade crossings that the Secretary determines would 
        impede high-speed rail operations;
            ``(5) the applicant agrees to comply with--
                    ``(A) the standards of section 24312, as in effect 
                on September 1, 2002, with respect to the project in 
                the same manner that the National Railroad Passenger 
                Corporation is required to comply with such standards 
                for construction work financed under an agreement made 
                under section 24308(a); and
                    ``(B) the protective arrangements established under 
                section 504 of the Railroad Revitalization and 
                Regulatory Reform Act of 1976 (45 U.S.C. 836) with 
                respect to employees affected by actions taken in 
                connection with the project to be financed by the bond; 
                and
            ``(6) the applicant agrees not to pay the principal or 
        interest on the bonds using funds derived directly or 
        indirectly from the Highway Trust Fund, except as permitted by 
        law as of the date of the enactment of this section.
    ``(b) Bond Amount Limitation.--
            ``(1) In general.--The amount of bonds designated under 
        this section may not exceed--
                    ``(A) in the case of subsection (f) bonds, 
                $1,200,000,000 for each of the fiscal years 2004 
                through 2013; and
                    ``(B) in the case of section 54 bonds, 
                $1,200,000,000 for each of the fiscal years 2004 
                through 2013.
            ``(2) Carryover of unused limitation.--If for any fiscal 
        year the limitation amount under subparagraph (A) or (B) of 
        paragraph (1) exceeds--
                    ``(A) with respect to subparagraph (A) of paragraph 
                (1), the amount of subsection (f) bonds issued during 
                such year; or
                    ``(B) with respect to subparagraph (B) of paragraph 
                (1), the amount of section 54 bonds issued during such 
                year,
        the limitation amount under subparagraph (A) or (B) of 
        paragraph (1), as the case may be, for the following fiscal 
        year (through fiscal year 2017) shall be increased by the 
        amount of such excess.
    ``(c) Preference.--The Secretary shall give preference to the 
designation under this section of bonds for projects--
            ``(1) to be funded through a combination of subsection (f) 
        bonds and section 54 bonds;
            ``(2) which propose to link rail passenger service with 
        other modes of transportation;
            ``(3) expected to have a significant impact on air traffic 
        congestion;
            ``(4) expected to also improve commuter rail operations;
            ``(5) where all environmental work has already been 
        completed and the project is ready to commence; or
            ``(6) that have received financial commitments and other 
        support of State and local governments.
    ``(d) Timely Disposition of Application.--The Secretary shall grant 
or deny a requested designation within 9 months after receipt of an 
application.
    ``(e) Annual Reports.--
            ``(1) From issuer of bonds.--The issuer of bonds designated 
        under subsection (a) shall report annually to the Secretary 
        regarding the terms of outstanding designated bonds and the 
        progress made with respect to the project financed by the 
        bonds.
            ``(2) From secretary.--The Secretary, in consultation with 
        the Secretary of the Treasury, shall transmit to the Congress 
        an annual report which includes--
                    ``(A) reports received under paragraph (1); and
                    ``(B) an assessment of the progress made toward 
                completion of high-speed rail transportation corridors 
                resulting from projects financed by bonds designated 
                under subsection (a).
    ``(f) Tax Treatment of Subsection (f) Bonds.--
            ``(1) Exclusion from gross income.--The interest on a bond 
        designated by the Secretary under subsection (a) for purposes 
        of this subsection shall be excluded from gross income under 
        section 103 of the Internal Revenue Code of 1986, 
        notwithstanding section 149(c) of such Code.
            ``(2) Exemption from volume cap.--For purposes of section 
        146 of such Code, a bond designated by the Secretary under 
        subsection (a) for purposes of this subsection shall be 
        considered to be exempt from the volume cap of the issuing 
        authority in the same manner as bonds listed in subsection (g) 
        of such section 146.
    ``(g) Refinancing Rules.--Bonds designated by the Secretary under 
subsection (a) may be issued for refinancing projects only if the 
indebtedness being refinanced (including any obligation directly or 
indirectly refinanced by such indebtedness) was originally incurred by 
the issuer--
            ``(1) after the date of the enactment of this section;
            ``(2) for a term of not more than 3 years;
            ``(3) to finance projects described in subsection (a)(2); 
        and
            ``(4) in anticipation of being refinanced with proceeds of 
        a bond designated under subsection (a).
    ``(h) Provisions Regarding High-Speed Rail Service.--
            ``(1) Status as employer or carrier.--Any entity providing 
        railroad transportation (within the meaning of section 20102) 
        that begins operations after the date of enactment of this 
        section and that uses property acquired pursuant to this 
        section (except as provided in subsection (a)(2)(B)), 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 high-speed intercity passenger railroad 
        transportation (within the meaning of section 20102) that 
        begins operations after the date of enactment of this section 
        on a project funded in whole or in part by bonds designated 
        under subsection (a), and replaces intercity rail passenger 
        service that was provided by another entity as of the date of 
        enactment of this section, 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) Immediate replacement of existing rail passenger 
        service.--
                    ``(A) Negotiations.--If the replacement of 
                preexisting intercity rail passenger service occurs 
                concurrent with or within a reasonable amount of time 
                before the commencement of the replacing entity's high-
                speed rail passenger service, the replacing entity 
                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 paragraph (2)(A)-(D). 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 
                paragraph (2)(A)-(D) 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 seven 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 paragraph (2)(A)-(D). 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; all other expenses shall be 
                paid by the party incurring them.
                    ``(C) Service commencement.--A replacing entity 
                under this paragraph shall commence service only after 
                an agreement is entered into with respect to the 
                matters set forth in paragraph (2)(A)-(D) or the 
                decision of the arbitrator has been rendered.
            ``(4) Subsequent replacement of existing rail passenger 
        service.--If the replacement of existing rail passenger service 
        takes place within 3 years after the replacing entity commences 
        high-speed rail passenger service, the replacing entity and the 
        collective bargaining agent or agents for the employees of the 
        predecessor provider shall enter into an agreement with respect 
        to the matters set forth in paragraph (2)(A)-(D). If the 
        parties have not entered into an agreement with respect to all 
        such matters within 60 days after the date on which the 
        replacing entity replaces the predecessor provider, the parties 
        shall select an arbitrator using the procedures set forth in 
        paragraph (3)(B), who shall, within 20 days after the 
        commencement of the arbitration, conduct a hearing and decide 
        all unresolved issues. This decision shall be final, binding, 
        and conclusive upon the parties.
    ``(i) Issuance of Regulations.--Not later than 6 months after the 
date of the enactment of this section, the Secretary shall issue 
regulations for carrying out this section.
    ``(j) Definitions.--For purposes of this section--
            ``(1) Subsection (f) bond.--The term `subsection (f) bond' 
        means a bond designated by the Secretary under subsection (a) 
        for purposes of subsection (f).
            ``(2) Section 54 bond.--The term `section 54 bond' means a 
        bond designated by the Secretary under subsection (a) for 
        purposes of section 54 of the Internal Revenue Code of 1986 
        (relating to credit to holders of qualified high-speed rail 
        infrastructure bonds).''.
    (b) Table of Sections Amendment.--The table of sections of chapter 
261 of title 49, United States Code, is amended by adding after the 
item relating to section 26105 the following new item:

``26106.  High-speed rail infrastructure bonds.''.

SEC. 3. TAX CREDIT TO HOLDERS OF QUALIFIED HIGH-SPEED RAIL 
              INFRASTRUCTURE BONDS.

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

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

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

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

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified high-speed rail infrastructure bond on a credit allowance 
date of such bond which occurs during the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for such 
taxable year an amount equal to the sum of the credits determined under 
subsection (b) with respect to credit allowance dates during such year 
on which the taxpayer holds such bond.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified high-speed rail infrastructure bond is 25 
        percent of the annual credit determined with respect to such 
        bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified high-speed rail infrastructure bond is 
        the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (2), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of sale of the issue) on outstanding long-term corporate 
        debt obligations (determined under regulations prescribed by 
        the Secretary).
            ``(4) Credit allowance date.--For purposes of this section, 
        the term `credit allowance date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(5) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than this subpart and subpart C).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(e) Qualified High-Speed Rail Infrastructure Bond.--For purposes 
of this part, the term `qualified high-speed rail infrastructure bond' 
means any bond issued as part of an issue if--
            ``(1) the issuer certifies that the Secretary of 
        Transportation has designated the bond for purposes of this 
        section under section 26106(a) of title 49, United States Code, 
        as in effect on the date of the enactment of this section,
            ``(2) 95 percent or more of the proceeds from the sale of 
        such issue are to be used for expenditures incurred after the 
        date of the enactment of this section for any project described 
        in section 26106(a)(2) of title 49, United States Code,
            ``(3) the term of each bond which is part of such issue 
        does not exceed 20 years,
            ``(4) the payment of principal with respect to such bond is 
        the obligation solely of the issuer, and
            ``(5) the issue meets the requirements of subsection (f) 
        (relating to arbitrage).
    ``(f) Special Rules Relating to Arbitrage.--
            ``(1) In general.--Subject to paragraph (2), an issue shall 
        be treated as meeting the requirements of this subsection if as 
        of the date of issuance, the issuer reasonably expects--
                    ``(A) to spend at least 95 percent of the proceeds 
                from the sale of the issue for 1 or more qualified 
                projects within the 3-year period beginning on such 
                date,
                    ``(B) to incur a binding commitment with a third 
                party to spend at least 10 percent of the proceeds from 
                the sale of the issue, or to commence construction, 
                with respect to such projects within the 6-month period 
                beginning on such date, and
                    ``(C) to proceed with due diligence to complete 
                such projects and to spend the proceeds from the sale 
                of the issue.
            ``(2) Rules regarding continuing compliance after 3-year 
        determination.--If at least 95 percent of the proceeds from the 
        sale of the issue is not expended for 1 or more qualified 
        projects within the 3-year period beginning on the date of 
        issuance, but the requirements of paragraph (1) are otherwise 
        met, an issue shall be treated as continuing to meet the 
        requirements of this subsection if either--
                    ``(A) the issuer uses all unspent proceeds from the 
                sale of the issue to redeem bonds of the issue within 
                90 days after the end of such 3-year period, or
                    ``(B) the following requirements are met:
                            ``(i) The issuer spends at least 75 percent 
                        of the proceeds from the sale of the issue for 
                        1 or more qualified projects within the 3-year 
                        period beginning on the date of issuance.
                            ``(ii) Either--
                                    ``(I) the issuer spends at least 95 
                                percent of the proceeds from the sale 
                                of the issue for 1 or more qualified 
                                projects within the 4-year period 
                                beginning on the date of issuance, or
                                    ``(II) the issuer pays to the 
                                Federal Government any earnings on the 
                                proceeds from the sale of the issue 
                                that accrue after the end of the 3-year 
                                period beginning on the date of 
                                issuance and uses all unspent proceeds 
                                from the sale of the issue to redeem 
                                bonds of the issue within 90 days after 
                                the end of the 4-year period beginning 
                                on the date of issuance.
    ``(g) Recapture of Portion of Credit Where Cessation of 
Compliance.--
            ``(1) In general.--If any bond which when issued purported 
        to be a qualified high-speed rail infrastructure bond ceases to 
        be such a qualified bond, the issuer shall pay to the United 
        States (at the time required by the Secretary) an amount equal 
        to the sum of--
                    ``(A) the aggregate of the credits allowable under 
                this section with respect to such bond (determined 
                without regard to subsection (c)) for taxable years 
                ending during the calendar year in which such cessation 
                occurs and the 2 preceding calendar years, and
                    ``(B) interest at the underpayment rate under 
                section 6621 on the amount determined under 
                subparagraph (A) for each calendar year for the period 
                beginning on the first day of such calendar year.
            ``(2) Failure to pay.--If the issuer fails to timely pay 
        the amount required by paragraph (1) with respect to such bond, 
        the tax imposed by this chapter on each holder of any such bond 
        which is part of such issue shall be increased (for the taxable 
        year of the holder in which such cessation occurs) by the 
        aggregate decrease in the credits allowed under this section to 
        such holder for taxable years beginning in such 3 calendar 
        years which would have resulted solely from denying any credit 
        under this section with respect to such issue for such taxable 
        years.
            ``(3) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (2) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under paragraph (2) shall not be treated as a tax 
                imposed by this chapter for purposes of determining--
                            ``(i) the amount of any credit allowable 
                        under this part, or
                            ``(ii) the amount of the tax imposed by 
                        section 55.
    ``(h) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Qualified project.--The term `qualified project' 
        means any project described in section 26106(a)(2) of title 49, 
        United States Code.
            ``(3) Treatment of changes in use.--For purposes of 
        subsection (e)(2), the proceeds from the sale of an issue shall 
        not be treated as used for a qualified project to the extent 
        that the issuer takes any action within its control which 
        causes such proceeds not to be used for a qualified project. 
        The Secretary shall prescribe regulations specifying remedial 
        actions that may be taken (including conditions to taking such 
        remedial actions) to prevent an action described in the 
        preceding sentence from causing a bond to fail to be a 
        qualified high-speed rail infrastructure bond.
            ``(4) Partnership; s corporation; and other pass-thru 
        entities.--Under regulations prescribed by the Secretary, in 
        the case of a partnership, trust, S corporation, or other pass-
        thru entity, rules similar to the rules of section 41(g) shall 
        apply with respect to the credit allowable under subsection 
        (a).
            ``(5) Bonds held by regulated investment companies.--If any 
        qualified high-speed rail infrastructure bond is held by a 
        regulated investment company, the credit determined under 
        subsection (a) shall be allowed to shareholders of such company 
        under procedures prescribed by the Secretary.
            ``(6) Reporting.--Issuers of qualified high-speed rail 
        infrastructure bonds shall submit reports similar to the 
        reports required under section 149(e).''.
    (b) Amendments to Other Code Sections.--
            (1) Reporting.--Subsection (d) of section 6049 of the 
        Internal Revenue Code of 1986 (relating to returns regarding 
        payments of interest) is amended by adding at the end the 
        following new paragraph:
            ``(8) Reporting of credit on qualified high-speed rail 
        infrastructure bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 54(d) and such amounts shall 
                be treated as paid on the credit allowance date (as 
                defined in section 54(b)(4)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A), subsection 
                (b)(4) shall be applied without regard to subparagraphs 
                (A), (H), (I), (J), (K), and (L)(i) of such subsection.
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''.
            (2) Treatment for estimated tax purposes.--
                    (A) Individual.--Section 6654 of such Code 
                (relating to failure by individual to pay estimated 
                income tax) is amended by redesignating subsection (m) 
                as subsection (n) and by inserting after subsection (l) 
                the following new subsection:
    ``(m) Special Rule for Holders of Qualified High-Speed Rail 
Infrastructure Bonds.--For purposes of this section, the credit allowed 
by section 54 to a taxpayer by reason of holding a qualified high-speed 
rail infrastructure bond on a credit allowance date shall be treated as 
if it were a payment of estimated tax made by the taxpayer on such 
date.''.
                    (B) Corporate.--Section 6655 of such Code (relating 
                to failure by corporation to pay estimated income tax) 
                is amended by adding at the end of subsection (g) the 
                following new paragraph:
            ``(5) Special rule for holders of qualified high-speed rail 
        infrastructure bonds.--For purposes of this section, the credit 
        allowed by section 54 to a taxpayer by reason of holding a 
        qualified high-speed rail infrastructure bond on a credit 
        allowance date shall be treated as if it were a payment of 
        estimated tax made by the taxpayer on such date.''.
    (c) Clerical Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        item:

                              ``Subpart H. Nonrefundable Credit for 
                                        Holders of Qualified High-Speed 
                                        Rail Infrastructure Bonds.''.
            (2) Section 6401(b)(1) of such Code is amended by striking 
        ``and G'' and inserting ``G, and H''.
    (d) Issuance of Regulations.--Not later than 6 months after the 
date of the enactment of this section, the Secretary of the Treasury 
shall issue regulations for carrying out this section and the 
amendments made by this section.
    (e) High-Speed Intercity Rail Facilities.--
            (1) Requirement to meet title 49 requirements.--Section 
        142(i) of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new paragraph:
            ``(4) Additional requirements.--A bond issued as part of an 
        issue described in subsection (a)(11) shall not be considered 
        an exempt facility bond unless the requirements of paragraphs 
        (1) through (6) of section 26106(a) of title 49, United States 
        Code, are met.''.
            (2) Revision of speed requirement.--Section 142(i)(1) of 
        such Code is amended by striking ``150 miles per hour'' and 
        inserting ``110 miles per hour''.
    (f) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of enactment of this Act.

SEC. 4. HIGH-SPEED RAIL CORRIDOR DEVELOPMENT.

    (a) Corridor Development.--
            (1) Amendments.--Section 26101 of title 49, United States 
        Code, is amended--
                    (A) in the section heading, by striking 
                ``planning'' and inserting ``development'';
                    (B) in the heading of subsection (a), by striking 
                ``Planning'' and inserting ``Development'';
                    (C) by striking ``corridor planning'' each place it 
                appears and inserting ``corridor development'';
                    (D) in subsection (b)(1)--
                            (i) by inserting ``, or if it is an 
                        activity described in subparagraph (M)'' after 
                        ``high-speed rail improvements'';
                            (ii) by striking ``and'' at the end of 
                        subparagraph (K);
                            (iii) by striking the period at the end of 
                        subparagraph (L) and inserting ``; and''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
            ``(M) the acquisition of locomotives, rolling stock, track, 
        and signal equipment.''; and
                    (E) in subsection (c)(2), by striking ``planning'' 
                and inserting ``development''.
            (2) Conforming amendment.--The item relating to section 
        26101 in the table of sections of chapter 261 of title 49, 
        United States Code, is amended by striking ``planning'' and 
        inserting ``development''.
    (b) Authorization of Appropriations.--Section 26104 of title 49, 
United States Code, is amended to read as follows:
``Sec. 26104. Authorization of appropriations
    ``(a) Fiscal Years 2004 Through 2011.--There are authorized to be 
appropriated to the Secretary--
            ``(1) $70,000,000 for carrying out section 26101; and
            ``(2) $30,000,000 for carrying out section 26102,
for each of the fiscal years 2004 through 2011.
    ``(b) Funds To Remain Available.--Funds made available under this 
section shall remain available until expended.''.

SEC. 5. REHABILITATION AND IMPROVEMENT FINANCING.

    (a) Definitions.--Section 102(7) of the Railroad Revitalization and 
Regulatory Reform Act of 1976 (45 U.S.C. 802(7)) is amended to read as 
follows:
            ``(7) `railroad' has the meaning given that term in section 
        20102 of title 49, United States Code; and''.
    (b) General Authority.--Section 502(a) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(a)) is 
amended by striking ``Secretary may provide direct loans and loan 
guarantees to State and local governments,'' and inserting ``Secretary 
shall provide direct loans and loan guarantees to State and local 
governments, agreements or interstate compacts consented to by Congress 
under section 410(a) of Public Law 105-134 (49 U.S.C 24101 nt),''.
    (c) Extent of Authority.--Section 502(d) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)) is 
amended--
            (1) by striking ``$3,500,000,000'' and inserting 
        ``$35,000,000,000'';
            (2) by striking ``$1,000,000,000'' and inserting 
        ``$7,000,000,000''; and
            (3) by adding at the end the following new sentence: ``The 
        Secretary shall not establish any limit on the proportion of 
        the unused amount authorized under this subsection that may be 
        used for 1 loan or loan guarantee.''.
    (d) Cohorts of Loans.--Section 502(f) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(f)) is 
amended--
            (1) in paragraph (2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (D);
                    (B) by redesignating subparagraph (E) as 
                subparagraph (F); and
                    (C) by adding after subparagraph (D) the following 
                new subparagraph:
                    ``(E) the size and characteristics of the cohort of 
                which the loan or loan guarantee is a member; and''; 
                and
            (2) by adding at the end of paragraph (4) the following: 
        ``A cohort may include loans and loan guarantees. The Secretary 
        shall not establish any limit on the proportion of a cohort 
        that may be used for 1 loan or loan guarantee.''.
    (e) Conditions of Assistance.--Section 502 of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822) is 
amended--
            (1) in subsection (f)(2)(A), by inserting ``, if any'' 
        after ``collateral offered''; and
            (2) by adding at the end of subsection (h) the following:
``The Secretary shall not require an applicant for a direct loan or 
loan guarantee under this section to provide collateral. The Secretary 
shall not require that an applicant for a direct loan or loan guarantee 
under this section have previously sought the financial assistance 
requested from another source. The Secretary shall require recipients 
of direct loans or loan guarantees under this section to apply the 
standards of section 26106(a)(5) of title 49, United States Code, to 
their projects.''.
    (f) Time Limit for Approval or Disapproval.--Section 502 of the 
Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 
822) is amended by adding at the end the following new subsection:
    ``(i) Time Limit for Approval or Disapproval.--Not later than 90 
days after receiving a complete application for a direct loan or loan 
guarantee under this section, the Secretary shall approve or disapprove 
the application.''.
    (g) Fees and Charges.--Section 503 of the Railroad Revitalization 
and Regulatory Reform Act of 1976 (45 U.S.C. 823) is amended by adding 
at the end the following new subsection:
    ``(l) Fees and Charges.--Except as provided in this title, the 
Secretary may not assess any fees, including user fees, or charges in 
connection with a direct loan or loan guarantee provided under section 
502.''.
    (h) Substantive Criteria and Standards.--Not later than 30 days 
after the date of the enactment of this Act, the Secretary of 
Transportation shall publish in the Federal Register and post on the 
Department of Transportation web site the substantive criteria and 
standards used by the Secretary to determine whether to approve or 
disapprove applications submitted under section 502 of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822).

                                                 Union Calendar No. 206

108th CONGRESS

  1st Session

                               H. R. 2571

                  [Report No. 108-278, Parts I and II]

_______________________________________________________________________

                                 A BILL

To provide for the financing of high-speed rail infrastructure, and for 
                            other purposes.

_______________________________________________________________________

                            November 6, 2003

    Reported from the Committee on Ways and Means with amendments, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed
```