I 

108TH CONGRESS 

1ST SESSION H. R. 3578

To amend title 49, United States Code, to ensure the continuation of fixed 

guideway system projects, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2003

Mr. HONDA (for himself, Mrs. TAUSCHER, Mr. CASE, Mr. ACEVEDO-VILA ́, Ms. 

LOFGREN, Mrs. JONES of Ohio, Mr. GEORGE MILLER of California, Mr. 

MEEKS of New York, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. 

LEWIS of Georgia, Mr. BLUMENAUER, and Mr. ABERCROMBIE) introduced the following bill; which was referred to the Committee on Transportation and Infrastructure 

A BILL

To amend title 49, United States Code, to ensure the continuation of fixed guideway system projects, and for 

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘New Starts Enhance5 ment and Local Investment Promotion Act of 2003’’. 
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1 SEC. 2. DETERMINATION OF PROJECT JUSTIFICATION CRI2 TERIA FOR FIXED GUIDEWAY PROJECTS. 

3 Section 5309(e)(6) of title 49, United States Code, 

4 is amended—

5 (1) by striking ‘‘A proposed project’’ and insert6 ing the following: 

7 ‘‘(A) IN GENERAL.—A proposed project’’; 

8 and 

9 (2) by adding at the end the following: 

10 ‘‘(B) DETERMINATION OF COST EFFEC11 TIVENESS.—

12 ‘‘(i) IN GENERAL.—For purposes of 

13 paragraph (1)(B), the Secretary shall use 

14 the new starts cost to determine the cost 

15 effectiveness of a project. 

16 ‘‘(ii) NEW STARTS COST DEFINED.—

17 In this subparagraph, the term ‘new starts 

18 cost’ means the amounts allocated for the 

19 project from amounts made available to 

20 carry out this section.’’. 

21 SEC. 3. UNDERTAKING PROJECTS IN ADVANCE. 

22 Section 5309(n) is amended by adding at the end the 

23 following: 

24 ‘‘(4) If a State or local governmental authority agrees 

25 to provide 60 percent or more of the net cost of a project 

26 from non-Federal funds, the Secretary, at the request of 
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1 the State or local governmental authority, shall waive the 

2 requirement of paragraph (1)(C) with respect to the 

3 project, thereby allowing the State or local governmental 

4 authority to carry out any pre-construction part of the 

5 project without regard to whether the Secretary has ap6 proved in advance the plans and specifications for that 

7 part. If a State or local governmental authority requests 

8 a waiver for a project under this paragraph, the agreed 

9 upon non-Federal share shall continue to apply through 

10 completion of the project.’’. 

11 SEC. 4. DETERMINATION OF ELIGIBILITY AND PROJECT SE12 LECTION. 

13 Section 182 of title 23, United States Code, is 

14 amended—

15 (1) in subsection (a)—

16 (A) paragraph (2) by adding at the end 

17 the following: ‘‘The application process for a 

18 new starts project approved for a full funding 

19 grant agreement under section 5309(g) of title 

20 49, shall serve jointly as an application for a se21 cured loan, line of credit, and loan guarantee 

22 under this subchapter.’’; and 

23 (B) in paragraph (3) by adding at the end 

24 the following: 
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1 ‘‘(C) NEW STARTS PROJECTS.—In the case 

2 of a new starts project approved for a full fund3 ing grant agreement described in section 5309 

4 of title 49, eligible project costs shall be deter5 mined in accordance with the allowable cost 

6 thresholds in such section.’’; and 

7 (2) in subsection (b)(2)—

8 (A) subparagraph (A) by striking ‘‘The se9 lection criteria’’ and inserting the following: 

10 ‘‘Except as provided in subparagraph (B), the 

11 selection criteria’’; 

12 (B) by redesignating subparagraph (B) as 

13 subparagraph (C); and 

14 (C) by inserting after subparagraph (A) 

15 the following: 

16 ‘‘(B) NEW STARTS PROJECTS.—Approval 

17 of a full funding grant agreement for the new 

18 starts program under section 5309 of title 49 

19 shall constitute eligibility for selection in this 

20 subsection subject to confirmation of a prelimi21 nary rating opinion letter in subparagraph 

22 (C).’’

23 SEC. 5. LINES OF CREDIT. 

24 Section 184 of title 23, United States Code, is 

25 amended—
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1 (1) in subsection (a) by striking paragraph (2) 

2 and inserting the following: 

3 ‘‘(2) USE OF PROCEEDS.—

4 ‘‘(A) The proceeds of a line of credit made 

5 available under this section shall be available to 

6 pay eligible project costs, including debt service 

7 on project obligations issued to finance eligible 

8 project costs, extraordinary repair and replace9 ment costs, operation and maintenance ex10 penses, and costs associated with unexpected 

11 Federal or State environmental restrictions. 

12 ‘‘(B) For projects with an approved full 

13 funding grant agreement under section 5309 of 

14 title 49 and a non-Federal revenue share of at 

15 least 60 percent of the project cost, the pro16 ceeds of a line of credit made available under 

17 this section shall be available to pay eligible 

18 project costs as defined in subparagraph (A) 

19 and to provide liquidity for a variable rate re20 marketing program.’’; and 

21 (2) in subsection (b)—

22 (A) by striking paragraphs (3) and (4) and 

23 inserting the following: 

24 ‘‘(3) DRAWS.—Any draw on the line of credit 

25 shall not represent a guarantee of debt payment, but 
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1 shall represent a direct loan and shall be made and 

2 repaid only under the terms, rate, and conditions as 

3 agreed to by the project sponsor and Secretary. 

4 ‘‘(4) INTEREST RATE.—The interest rate on a 

5 direct loan resulting from a draw on the line of cred6 it shall be not less than one of the following rates 

7 as selected by the obligor: 

8 ‘‘(A) FIXED RATE.—The fixed rate shall 

9 be the yield on 30-year marketable United 

10 States Treasury securities as of the date on 

11 which the line of credit is obligated. 

12 ‘‘(B) VARIABLE RATE.—The variable rate 

13 shall be the yield on a 30-day Treasury bill auc14 tioned for the preceding 3-month period to be 

15 reset monthly on the first business day of each 

16 month.’’; 

17 (B) by striking paragraph (6) and insert18 ing the following: 

19 ‘‘(6) PERIOD OF AVAILABILITY.—

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph B, the line of credit shall be 

22 available during the period beginning on the 

23 date of substantial completion of the project, as 

24 determined by the project sponsor, and ending 

25 not later than 10 years after that date. 
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1 ‘‘(B) AVAILABILITY.—For projects with an 

2 approved full funding grant agreement under 

3 section 5309 of title 49, the line of credit shall 

4 be available during the period beginning on the 

5 date of approval of the full funding grant agree6 ment and ending not later than 10 years after 

7 the date of substantial completion of the 

8 project.’’; and 

9 (C) by striking paragraph (9) and insert10 ing the following: 

11 ‘‘(9) FEES.—The Secretary may establish fees 

12 at a level sufficient to cover all or a portion of the 

13 costs to the Government in providing a line of credit 

14 under this section. Fees shall be waived for projects 

15 with an approved full funding grant agreement 

16 under section 5309 of title 49.’’. 

17 SEC. 6. FUNDING. 

18 Section 188(a) of title 23 is amended by inserting 

19 ‘‘and section 5340 of title 49’’ after ‘‘this subchapter’’. 

20 SEC. 7. ASSURANCE OF EXISTING FULL FUNDING GRANT 

21 AGREEMENT. 

22 Chapter 53 of title 49, United States Code, is amend23 ed—

24 (1) by redesignating section 5339 as section 

25 5341; and 
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1 (2) by inserting after section 5338 the fol2 lowing: 

3 ‘‘§ 5339. New starts full funding grant agreement au4 thorizations 

5 ‘‘(a) PURPOSE.—The purpose of this section is to en6 sure that agreements made pursuant to section 5309(g) 

7 are honored in the annual appropriations process. 

8 ‘‘(b) GENERAL AUTHORITY.—In conjunction with the 

9 report required each February under section 5309(o), the 

10 Secretary shall provide information in such report regard11 ing the project readiness and the difference between the 

12 full funding grant agreement amount for a fiscal year and 

13 the amount appropriated in the same year for such 

14 project. 

15 ‘‘(c) APPORTIONMENTS.—

16 ‘‘(1) IN GENERAL.—Subject to section 5309, 

17 each new starts project with a full funding grant 

18 agreement shall be funded from amounts made 

19 available from the capital program grants and loans 

20 under section 5338(b) for each of fiscal years 2004 

21 through 2009 to carry out such project in accord22 ance with the annual schedule contained in each 

23 agreement. 

24 ‘‘(2) FULL FUNDING GRANT AGREEMENTS.—
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1 ‘‘(A) EXISTING FULL FUNDING GRANT

2 AGREEMENT PROJECTS.—The following is a list 

3 of existing projects with full funding grant 

4 agreements: 

5 ‘‘(i) Atlanta-North Springs Extension. 

6 ‘‘(ii) Baltimore-Central LRT Double 

7 Tracking. 

8 ‘‘(iii) Boston-Piers-MOS-2 (So. Sta. 

9 to Wo. Tr.). 

10 ‘‘(iv) Chicago-Douglas Branch Recon11 struction. 

12 ‘‘(v) Chicago-North Central Corridor 

13 Commuter Rail. 

14 ‘‘(vi) Chicago-Metra Southwest Cor15 ridor Commuter Rail. 

16 ‘‘(vii) Chicago-Union-Pacific West 

17 Line Extension. 

18 ‘‘(viii) Dallas-North Central LRT Ex19 tension. 

20 ‘‘(ix) Denver Southeast Corridor 

21 LRT. 

22 ‘‘(x) Fort Lauderdale-Tri-Rail Com23 muter Rail Upgrade. 

24 ‘‘(xi) Los Angeles-North Hollywood. 
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1 ‘‘(xii) Memphis-Medical Center Exten2 sion. 

3 ‘‘(xiii) Minneapolis-Hiawatha Corridor 

4 LRT. 

5 ‘‘(xiv) New Jersey Urban Core-Hud6 son-Bergen LRT. 

7 ‘‘(xv) Newark Rail Link (MOS–1). 

8 ‘‘(xvi) New Orleans-Canal Street 

9 ‘‘(xvii) Northern New Jersey-Hudson10 Berger LRT MOS–2. 

11 ‘‘(xviii) Pittsburgh-Stage II LRT Re12 construction. 

13 ‘‘(xix) Portland-Interstate MAX LRT 

14 Extension. 

15 ‘‘(xx) Salt Lake City-CBD to Univer16 sity LRT. 

17 ‘‘(xxi) Salt Lake City-Medical Center. 

18 ‘‘(xxii) San Diego-Mission Valley East 

19 LRT Extension. 

20 ‘‘(xxiii) San Diego-Oceanside Escon21 dido. 

22 ‘‘(xxiv) San Francisco-BART Exten23 sion to San Francisco Airport. 

24 ‘‘(xxv) San Juan-Tren Urbano. 
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1 ‘‘(xxvi) St. Louis St. Clair MetroLink 

2 Extension [Phase IIa]. 

3 ‘‘(xxvii) Washington DC/MD-Largo 

4 Metrorail Extension. 

5 ‘‘(B) FUTURE FULL FUNDING GRANT

6 AGREEMENTS.—The provisions of paragraph 

7 (1) shall apply to all future full funding grant 

8 agreements approved by the Secretary of 

9 Transportation. 

10 ‘‘(d) FAILURE TO COMPLY.—If the Secretary deter11 mines that a project delay is the result of a cause other 

12 than a delay in receipt of funding per the full funding 

13 grant agreement payment schedule, this section shall not 

14 apply.’’. 

15 ‘‘SEC. 5340. NEW STARTS PROJECT STABILITY LOAN PRO16 GRAM. 

17 ‘‘(a) PURPOSE.—The purpose of this section is to en18 sure that new starts projects with an approved full fund19 ing grant agreement are held financially harmless in the 

20 event that the annual Federal appropriation falls short of 

21 the annual amounts identified in the full funding grant 

22 agreement payment schedule. 

23 ‘‘(b) GENERAL AUTHORITY.—

24 ‘‘(1) IN GENERAL.—The Secretary of Transpor25 tation shall make loans available to a new starts 
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1 project sponsor in an amount equal to the difference 

2 between the full funding grant agreement amount 

3 for a fiscal year, and the amount appropriated in the 

4 same year for such project if the amount appro5 priated is lower than the full funding agreement 

6 amount for such year. 

7 ‘‘(2) Except as provided in this paragraph, the 

8 secured loan shall be made in accordance with sec9 tion 183 of title 23. 

10 ‘‘(A) MAXIMUM AMOUNT.—The maximum 

11 amount of the secured loan available to a new 

12 starts project sponsor shall equal the amount of 

13 the difference between the full funding grant 

14 agreement amount for a fiscal year and the 

15 amount appropriated for a project in the same 

16 year if the amount appropriated is lower than 

17 the full funding agreement amount for such 

18 year. 

19 ‘‘(B) PAYMENT.—The secured loan shall 

20 be repaid by the Federal Government through 

21 a subsequent appropriation from the new starts 

22 program as authorized in section 5338(b). Any 

23 interest expense paid shall not be assigned to a 

24 specific new starts project, and therefore, shall 

25 not result in any change to the full funding 
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1 grant agreement, schedule, or commitment 

2 under section 5309. 

3 ‘‘(C) FEES.—No fees shall be established 

4 or charged for secured loans made subject to 

5 this section. 

6 ‘‘(D) REPAYMENT.—

7 ‘‘(i) COMMENCEMENT.—Scheduled 

8 loan repayments of principal or interest on 

9 a secured loan under this section shall 

10 commence with the next available appro11 priations of new starts funding for the 

12 project. 

13 ‘‘(ii) SOURCES OF REPAYMENT OF

14 FUNDS.—The source of funds for sched15 uled loan repayments under this section 

16 shall be new starts funding as authorized 

17 under section 5338(b) of title 49 or other 

18 Federal funds as determined by the Sec19 retary. 

20 ‘‘(3) For purposes of calculating the threshold 

21 of 33 percent of the eligible project cost under sec22 tion 184(b)(10) of title 23, any secured loans made 

23 pursuant to this section shall be excluded.’’. 
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1 SEC. 8. NEW STARTS AMENDMENTS. 

2 (a) GRANTS AS CONTRACTUAL OBLIGATIONS.—Sec3 tion 5309 of title 49 is amended—

4 (1) in subsection (g)(1)(D) by inserting before 

5 the period the following: ‘‘or as made available for 

6 grant agreements under section 5339 and loans 

7 under section 5340’’; 

8 (2) in subsection (g)(2)(A)—

9 (A) in clause (iii) by striking ‘‘and’’ after 

10 the semicolon; 

11 (B) in clause (iv) by striking the period 

12 and inserting a semicolon; and 

13 (C) by adding at the end the following: 

14 ‘‘(v) authorize a project sponsor as el15 igible for a line of credit under subchapter 

16 II of chapter 1 of title 23; and 

17 ‘‘(vi) provide the maximum amount of 

18 Government financial assistance for inter19 est expenses incurred through a new starts 

20 project financial stability loan authorized 

21 under section 5340.’’; 

22 (3) by striking subsection (g)(2)(B) and insert23 ing the following: 

24 ‘‘(B)(i) An agreement under this para25 graph obligates an amount of available budget 

26 authority specified in law and may include a 
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1 commitment, contingent on amounts to be spec2 ified in law in advance for commitments under 

3 this paragraph, to obligate an additional 

4 amount from future available budget authority 

5 specified in law. The agreement shall state that 

6 the contingent commitment is not an obligation 

7 of the Government. Interest and other financing 

8 costs of efficiently carrying out a part of the 

9 project within a reasonable time are a cost of 

10 carrying out the project under a full funding 

11 grant agreement, except that eligible costs may 

12 not be more than the cost of the most favorable 

13 financing terms reasonably available for the 

14 project at the time of borrowing. The applicant 

15 shall certify, in a manner satisfactory to the 

16 Secretary of Transportation, that the applicant 

17 has shown reasonable diligence in seeking the 

18 most favorable financing terms. The amount 

19 stipulated in an agreement under this para20 graph for a fixed guideway project shall be suf21 ficient to complete at least an operable seg22 ment. 

23 ‘‘(ii) An amount equal to the difference be24 tween the full funding grant agreement amount 

25 for a fiscal year, and the amount appropriated 
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1 in the same year if the amount appropriated is 

2 lower than the full funding agreement amount 

3 for such year, may be loaned to the project 

4 sponsor through a new starts financial stability 

5 loan authorized under section 5340. Interest ex6 penses associated with a new starts financial 

7 stability loan shall—

8 ‘‘(I) shall be funded from amounts 

9 made available under section 5338(b); and 

10 ‘‘(II) not be assigned to a specific new 

11 starts project for purposes of full funding 

12 grant agreement calculations.’’; and 

13 (4) by striking subsection (k) and inserting the 

14 following: 

15 ‘‘(k) LIMITATION ON MAKING LOANS AND GRANTS

16 FOR PROJECTS.—Except as provided under subchapter II 

17 of chapter 1 of title 23, the Secretary of Transportation 

18 may not make a loan under this section for a project for 

19 which a grant (except a relocation payment grant) is made 

20 under this section. Notwithstanding the preceding sen21 tence and subchapter II of chapter 1 of title 23, the Sec22 retary may make a project grant under this section in a 

23 case in which real property for the project has been or 

24 shall be acquired through a loan under subsection (b) of 

25 this section.’’. 
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1 SEC. 9. FIXED GUIDEWAY PROJECTS. 

2 Section 5309(e) of title 49, United States Code, is 

3 amended by adding at the end the following: 

4 ‘‘(9) PROHIBITION ON IMPOSITION OF OVERALL

5 FUNDING LIMITS.—The Secretary may not impose 

6 an overall limitation on the amount of Government 

7 financial assistance that may be expended for—

8 ‘‘(A) alternatives analysis and preliminary 

9 engineering for a project under this subsection; 

10 or 

11 ‘‘(B) a full funding grant agreement for a 

12 project entered into under paragraph (7).’’. 

13 SEC. 10. DEFINITIONS. 

14 Section 181 of title 23, United States Code, is 

15 amended—

16 (1) by redesignating paragraph (6) as para17 graph (8); 

18 (2) by redesignating paragraphs (3) through 

19 (5) as paragraphs (4) through (6), respectively; 

20 (3) by inserting after paragraph (6), as redesig21 nated, the following: 

22 ‘‘(7) LIQUIDITY.—The term ‘liquidity’ means 

23 an agreement by the Federal Government to provide 

24 a credit support instrument that will provide for the 

25 potential purchase of any variable or other short26 term security issued in conjunction with the financ-
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1 ing plan that cannot be remarketed or resold under 

2 the marketing or remarketing agreement signed by 

3 the project sponsor. Any such draw or use of the li4 quidity shall then constitute a secured loan to be re5 paid under terms consistent with this section and 

6 approved by the Secretary.’’.

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