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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1713 Introduced in House (IH)]

109th CONGRESS
  1st Session
                                H. R. 1713

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

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 20, 2005

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

_______________________________________________________________________

                                 A BILL

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

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

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

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

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

SEC. 2. PURPOSES; DEFINITIONS.

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

         TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

SEC. 101. BOARD OF DIRECTORS OF AMTRAK.

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

SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

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

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

SEC. 103. NORTH EAST CORRIDOR COMPACT.

    (a) Consent to Compact.--(1) The States and District that 
constitute the Northeast Corridor, as defined in 49 U.S.C. 24102, may 
enter into an agreement, not in conflict with a law of the United 
States and titled the ``North East Corridor Compact'', to provide 
passenger rail service and to conduct related activities in the 
Northeast Corridor.
    (2) The North East Corridor Compact shall be submitted to Congress 
for its consent, and it is the sense of Congress that rapid consent to 
the Compact shall be a priority of Congress.
    (b) Compact Commission.--(1) There is hereby established a 
commission to be known as the ``North East Corridor Compact Commission 
(hereinafter referred to in this section as the `Commission')''. The 
Commission shall be composed of five members as follows:
            (A) Two members (or their designees), to be selected by the 
        Secretary of Transportation.
            (B) Two members (or their designees), to be selected by 
        agreement of the following government representatives:
                    (i) The governors of Maryland, Delaware, 
                Pennsylvania, New Jersey, New York, Connecticut, Rhode 
                Island, and Massachusetts.
                    (ii) The mayor of the District of Columbia.
            (C) One member to be selected by the four members selected 
        under paragraphs (1) and (2) of this subsection.
    (2) The following applies to the Commission:
            (A) Members shall be appointed for the life of the 
        Commission.
            (B) A vacancy in the Commission shall be filled in the 
        manner in which the original appointment was made.
            (C) Members shall serve without pay but shall receive 
        travel expenses, including per diem in lieu of subsistence, in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
            (D) The Chairman of the Commission shall be elected by the 
        members.
            (E) The Commission may appoint and fix the pay of such 
        personnel as it considers appropriate.
            (F) Upon request of the Commission, the head of any 
        department or agency of the United States may detail, on a 
        reimbursable basis, any of the personnel of that department or 
        agency to the Commission to assist it in carrying out its 
        duties under this section.
            (G) Upon the request of the Commission, the Administrator 
        of General Services shall provide to the Commission, on a 
        reimbursable basis, the administrative support services 
        necessary for the Commission to carry out its responsibilities 
        under this section.
    (c) Functions.--(1) The Commission shall prepare for the 
consideration of and adoption by participating States, the District of 
Columbia, and the Secretary of Transportation an interstate compact 
that provides for the following:
            (A) Full authority for 99 years to succeed to the 
        responsibilities of the National Railroad Passenger Corporation 
        as operator of the Northeast Corridor, subject to the 
        provisions of a lease from the Department of Transportation.
            (B) Execution of a lease of the Northeast Corridor from the 
        Department of Transportation, for a period of 99 years, subject 
        to appropriate provisions protecting the lessor's interests, 
        including reversion of all lease interests to the lessor in the 
        event the lessee fails to meet its financial obligations or 
        otherwise assume financial responsibility for Northeast 
        Corridor functions.
            (C) Responsibility for Corridor maintenance and 
        improvement.
            (D) Operation of intercity passenger rail service.
            (E) Arrangements for operation of freight railroad 
        operations and commuter operations.
            (F) Assumption of financial responsibility for Northeast 
        Corridor functions.
            (G) Authority to make use of the Corridor for non-rail 
        purposes.
            (H) Participation by the Department of Transportation, as 
        the non-voting representative of the United States.
    (2) The compact terms shall, at a minimum, conform to the 
requirements of subsections (e) through (i) of this section.
    (d) Final Compact Proposal.--(1) The Commission shall submit a 
final compact proposal to member States, the District of Columbia, and 
the Federal Government not later than the last day of Year One.
    (2) The Commission shall terminate on the 180th day following the 
date of transmittal of the final compact proposal under this 
subsection. All records and papers of the Commission shall thereupon be 
delivered by the Administrator of General Services for deposit in the 
National Archives.
    (e) Governance and Funding Requirements for Compact.--(1) The 
governance provisions of the compact shall provide a mechanism to 
ensure voting representation for the States, Commonwealths, and 
District that comprise the Northeast Corridor, and non-voting 
representation for the Secretary of Transportation as an ex officio 
member participating in all Compact affairs.
    (2) The provisions of the compact shall establish the financial 
obligations of each compact member and shall provide for its management 
of rail services in the Corridors.
    (f) Employee Interest Requirements for Compact.--The employee 
provisions of the compact shall, at a minimum, provide the following 
with regard to employees in the Northeast Corridor if the Compact 
chooses to replace the successor corporations for operation and 
maintenance of the physical plant or operation of passenger trains, or 
both:
            (1) Payment of any labor protection payments owed and not 
        paid by the successor corporations established under 49 U.S.C. 
        24310(b).
            (2) In the case of an employee who is employed by the 
        National Railroad Passenger Corporation on the date of 
        enactment of the Passenger Rail Investment Reform Act and who 
        accepts employment by a successor corporation, a right of first 
        refusal to accept a substantially similar position with the 
        replacement operator when the successor corporation is 
        replaced.
    (g) Federal Interest Requirements for Compact.--The provisions of 
the Compact shall hold the United States Government harmless as to the 
actions of the Compact under the lease of rights to the Northeast 
Corridor by the United States Government.
    (h) Compact Borrowing Authority.--(1) The borrowing authority 
provisions of the compact may authorize the compact to issue bonds or 
other debt instruments from time to time in its discretion, for 
purposes that include paying any part of the cost of rail service 
improvements, construction, and rehabilitation and the acquisition of 
real and personal property, including operating equipment, except that 
debt issued by the compact may be secured only by revenues to the 
compact and may not be a debt of the member States or of the Federal 
Government.
    (2) The debt authorized by this subsection shall under no 
circumstances be backed by the full faith and credit of the United 
States, and a grant made under the authority of this Act or under the 
authority of Part C of Subtitle V of title 49, United States Code, 
shall include an express acknowledgement by the grantee that the debt 
does not constitute an obligation of the United States.
    (i) Adoption of Compact; Turnover.--(1) The members shall adopt a 
final compact agreement not later than the last day of Year Two, and 
the compact shall thereafter assume responsibility for all Corridor 
operations from the successor corporations on a date that is not later 
than 8 months following adoption of the compact, which date shall be 
known as the ``NEC turnover date''.
    (2) In the event that the members do not adopt the final compact 
agreement and make it operational under the schedule set forth in this 
section, the Secretary of Transportation shall assume control of the 
entity specified by 49 U.S.C. 24310(b)(2)(A) and shall make such 
legislative recommendations as the President judges necessary and 
expedient to Congress that address the monetary contributions by 
Northeast Corridor States and the District of Columbia that would be 
necessary to provide continued intercity passenger rail service in the 
Northeast Corridor.
    (j) Authorization of Appropriations.--There are authorized such 
sums as may be necessary to carry out the purposes of this section.

SEC. 104. ASSISTANCE TO ADDRESS CAPITAL NEEDS.

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

SEC. 105. EMPLOYEE TRANSITION ASSISTANCE; AUTHORIZATION.

    (a) Provision of Financial Incentives.--To facilitate the 
restructuring required by this title, the Secretary is authorized to 
develop a program under which the Secretary may, in the Secretary's 
discretion, provide grants for financial incentives to be provided to 
employees of the National Railroad Passenger Corporation who 
voluntarily terminate their employment with the Corporation or the 
successor corporations and relinquish any legal rights to receive 
termination-related payments under any contractual agreement with the 
Corporation or the successor corporations.
    (b) Conditions for Financial Incentives.--As a condition for 
receiving financial assistance grants under this section, the 
Corporation or the successor corporations must certify that--
            (1) the financial assistance results in a net reduction in 
        the total number of employees equal to the number receiving 
        financial incentives;
            (2) the financial assistance results in a net reduction in 
        total employment expense equivalent to the total employment 
        expenses associated with the employees receiving financial 
        incentives; and
            (3) the total number of employees eligible for termination-
        related payments will not be increased without the express 
        written consent of the Secretary.
    (c) Amount of Financial Incentives.--The financial incentives 
authorized under this section may be no greater than $50,000.00 per 
employee.
    (d) Authorization of Appropriations.--There are hereby authorized 
to the Secretary such sums as may be necessary to make grants to the 
National Railroad Passenger Corporation or the successor corporation to 
fund termination-related payments to employees under existing 
contractual agreements until four years from the first day of Year One.

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

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

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

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

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

                      TITLE II--FINANCIAL REFORMS

SEC. 201. LIMITATIONS ON AVAILABILITY OF GRANTS.

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

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

SEC. 202. SPENDING PLANS FOR CAPITAL BACKLOG REDUCTION.

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

SEC. 203. REDEMPTION OF COMMON STOCK.

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

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

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

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

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

SEC. 206. MANAGEMENT AND TRANSFER OF SECURED DEBT.

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

SEC. 207. TRANSITION ASSISTANCE.

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

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

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

    (a) Part C of Subtitle V of title 49, United States Code, is 
amended by inserting the following after chapter 243:

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

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

``244. Intercity Passenger Rail Service Capital Assistance     24401''.
    (2) The chapter analysis for subtitle V of title 49, United States 
Code, is amended by inserting the following after the item relating to 
chapter 243:

``244. Intercity Passenger Rail Service Capital Assistance     24401''.

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

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

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

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