IB 

Union Calendar No. 201 

109TH CONGRESS 

2D SESSION H. R. 1631 

[Report No. 109–314, Parts I and II] 

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

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 14, 2005 

Mr. YOUNG of Alaska (for himself, Mr. OBERSTAR, Mr. LATOURETTE, and 

Ms. CORRINE BROWN of Florida) introduced the following bill; which was 

referred to the Committee on Transportation and Infrastructure, and in 

addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

NOVEMBER 18, 2005 

Reported from the Committee on Transportation and Infrastructure 

NOVEMBER 18, 2005 

Referral to the Committee on Ways and Means extended for a period ending 

not later than December 31, 2005 

DECEMBER 31, 2005 

Referral to the Committee on Ways and Means extended for a period ending 

not later than February 3, 2006 

FEBRUARY 3, 2006 

Additional sponsors: Mr. SIMMONS, Ms. NORTON, Ms. MILLENDER-MCDONALD, Mr. BISHOP of New York, Mr. WEINER, Mr. BOSWELL, Mr. 

BLUMENAUER, Mr. CHANDLER, Ms. CARSON, Mr. KUHL of New York, 

Mr. PLATTS, Mr. WELLER, Mr. GERLACH, Mr. NEY, Mr. MCHUGH, Mr. 

DAVIS of Illinois, Mr. HOLT, Mr. HONDA, Ms. MCCOLLUM of Minnesota, 

Mr. ABERCROMBIE, Mr. RAHALL, Ms. BALDWIN, Mr. REYES, Mr. 

ISRAEL, Mr. RUPPERSBERGER, Mr. BRADY of Pennsylvania, Mr. HINCHEY, Mr. DEFAZIO, Mrs. JONES of Ohio, Mr. PAYNE, Mr. GRIJALVA, 

Mr. LEWIS of Georgia, Mr. CARNAHAN, Mrs. MCCARTHY, Mr. CUELLAR, 
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Mr. MENENDEZ, Mr. LIPINSKI, Mr. MCNULTY, Mr. MATSUI, Ms. BERKLEY, Ms. WOOLSEY, Mr. ENGEL, Mr. BACA, Mr. ACKERMAN, Mr. LANTOS, Mr. RANGEL, Mr. PASTOR, Mr. MORAN of Virginia, Mr. EVANS, Mr. 

DOYLE, Mr. MCGOVERN, Mr. KILDEE, Mr. LOBIONDO, Mr. POMEROY, 

Mr. BROWN of Ohio, Mr. MCINTYRE, Mr. PALLONE, Mr. LYNCH, Mr. 

BOUCHER, Mr. MICHAUD, Mr. MILLER of North Carolina, Mr. GUTIERREZ, Mr. SCHWARZ of Michigan, Mr. FILNER, Mr. BUTTERFIELD, Mr. 

WEXLER, Mr. LARSEN of Washington, Mr. CUMMINGS, Ms. LINDA T. 

SA ́NCHEZ of California, and Mr. COSTA

FEBRUARY 3, 2006 

Reported from the Committee on Ways and Means with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed 

[Omit the part struck through and insert the part printed in italic] 

A BILL 

To provide for the financing of high-speed rail infrastructure, 

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 ‘‘Rail Infrastructure De5 velopment and Expansion Act for the 21st Century’’. 

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

7 (a) AMENDMENT.—Chapter 261 of title 49, United 

8 States Code, is amended by adding at the end the fol9 lowing new section: 

10 ‘‘§ 26106. High-speed rail infrastructure bonds 

11 ‘‘(a) DESIGNATION.—The Secretary may designate 

12 bonds for purposes of subsection (f) or section 54 of the 

13 Internal Revenue Code of 1986 if— 
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1 ‘‘(1) the bonds are to be issued by— 

2 ‘‘(A) a State, if the entire railroad pas3 senger transportation corridor containing the 

4 infrastructure project to be financed is within 

5 the State; 

6 ‘‘(B) 1 or more of the States that have en7 tered into an agreement or an interstate com8 pact consented to by Congress under section 

9 410(a) of Public Law 105–134 (49 U.S.C 

10 24101 nt); or 

11 ‘‘(C) an agreement or an interstate com12 pact described in subparagraph (B); 

13 ‘‘(2) the bonds are for the purpose of financ14 ing— 

15 ‘‘(A) projects that make a substantial con16 tribution to providing the infrastructure and 

17 equipment required to complete a high-speed 

18 rail transportation corridor (including projects 

19 for the acquisition, financing, or refinancing of 

20 equipment and other capital improvements, in21 cluding the introduction of new high-speed tech22 nologies such as magnetic levitation systems, 

23 track or signal improvements, the elimination of 

24 grade crossings, development of intermodal fa25 cilities, improvement of train speeds or safety, 
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1 or both, and station rehabilitation or construc2 tion), but only if the Secretary determines that 

3 the projects are part of a viable and comprehen4 sive high-speed rail transportation corridor de5 sign for intercity passenger service, including a 

6 design for minimally operable segments of a 

7 corridor designated under section 104(d)(2) of 

8 title 23, United States Code; or 

9 ‘‘(B) projects for the Alaska Railroad; 

10 ‘‘(3) for a railroad passenger transportation 

11 corridor design that includes the use of rights-of-way 

12 owned by a freight railroad, a written agreement ex13 ists between the applicant and the freight railroad 

14 regarding such use and ownership, including com15 pensation for such use and assurances regarding the 

16 adequacy of infrastructure capacity to accommodate 

17 both existing and future freight and passenger oper18 ations, and including an assurance by the freight 

19 railroad that collective bargaining agreements with 

20 the freight railroad’s employees (including terms 

21 regulating the contracting of work) shall remain in 

22 full force and effect according to their terms for 

23 work performed by the freight railroad on such rail24 road passenger transportation corridor; 
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1 ‘‘(4) the corridor design eliminates existing rail2 way-highway grade crossings that the Secretary de3 termines would impede high-speed rail operations; 

4 ‘‘(5) the applicant agrees to comply with— 

5 ‘‘(A) the standards of section 24312, as in 

6 effect on September 1, 2002, with respect to 

7 the project in the same manner that the Na8 tional Railroad Passenger Corporation is re9 quired to comply with such standards for con10 struction work financed under an agreement 

11 made under section 24308(a); and 

12 ‘‘(B) the protective arrangements estab13 lished under section 504 of the Railroad Revi14 talization and Regulatory Reform Act of 1976 

15 (45 U.S.C. 836) with respect to employees af16 fected by actions taken in connection with the 

17 project to be financed by the bond; and 

18 ‘‘(6) the applicant agrees not to pay the prin19 cipal or interest on the bonds using funds derived di20 rectly or indirectly from the Highway Trust Fund, 

21 except as permitted by law as of the date of the en22 actment of this section. 

23 ‘‘(b) BOND AMOUNT LIMITATION.— 

24 ‘‘(1) IN GENERAL.—The amount of bonds des25 ignated under this section may not exceed— 
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1 ‘‘(A) in the case of subsection (f) bonds, 

2 $1,200,000,000 for each of the fiscal years 

3 2006 through 2015; and 

4 ‘‘(B) in the case of section 54 bonds, 

5 $1,200,000,000 for each of the fiscal years 

6 2006 through 2015. 

7 ‘‘(2) CARRYOVER OF UNUSED LIMITATION.—If 

8 for any fiscal year the limitation amount under sub9 paragraph (A) or (B) of paragraph (1) exceeds— 

10 ‘‘(A) with respect to subparagraph (A) of 

11 paragraph (1), the amount of subsection (f) 

12 bonds issued during such year; or 

13 ‘‘(B) with respect to subparagraph (B) of 

14 paragraph (1), the amount of section 54 bonds 

15 issued during such year, 

16 the limitation amount under subparagraph (A) or 

17 (B) of paragraph (1), as the case may be, for the 

18 following fiscal year (through fiscal year 2019) shall 

19 be increased by the amount of such excess. 

20 ‘‘(c) PREFERENCE.—The Secretary shall give pref21 erence to the designation under this section of bonds for 

22 projects— 

23 ‘‘(1) to be funded through a combination of 

24 subsection (f) bonds and section 54 bonds; 
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1 ‘‘(2) which propose to link rail passenger serv2 ice with other modes of transportation; 

3 ‘‘(3) expected to have a significant impact on 

4 air traffic congestion; 

5 ‘‘(4) expected to also improve commuter rail op6 erations; 

7 ‘‘(5) where all environmental work has already 

8 been completed and the project is ready to com9 mence; or 

10 ‘‘(6) that have received financial commitments 

11 and other support of State and local governments. 

12 ‘‘(d) TIMELY DISPOSITION OF APPLICATION.—The 

13 Secretary shall grant or deny a requested designation 

14 within 9 months after receipt of an application. 

15 ‘‘(e) ANNUAL REPORTS.— 

16 ‘‘(1) FROM ISSUER OF BONDS.—The issuer of 

17 bonds designated under subsection (a) shall report 

18 annually to the Secretary regarding the terms of 

19 outstanding designated bonds and the progress made 

20 with respect to the project financed by the bonds. 

21 ‘‘(2) FROM SECRETARY.—The Secretary, in 

22 consultation with the Secretary of the Treasury, 

23 shall transmit to the Congress an annual report 

24 which includes— 
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1 ‘‘(A) reports received under paragraph (1); 

2 and 

3 ‘‘(B) an assessment of the progress made 

4 toward completion of high-speed rail transpor5 tation corridors resulting from projects financed 

6 by bonds designated under subsection (a). 

7 ‘‘(f) TAX TREATMENT OF SUBSECTION (f) BONDS.— 

8 ‘‘(1) EXCLUSION FROM GROSS INCOME.—The 

9 interest on a bond designated by the Secretary 

10 under subsection (a) for purposes of this subsection 

11 shall be excluded from gross income under section 

12 103 of the Internal Revenue Code of 1986, notwith13 standing section 149(c) of such Code. 

14 ‘‘(2) EXEMPTION FROM VOLUME CAP.—For 

15 purposes of section 146 of such Code, a bond des16 ignated by the Secretary under subsection (a) for 

17 purposes of this subsection shall be considered to be 

18 exempt from the volume cap of the issuing authority 

19 in the same manner as bonds listed in subsection (g) 

20 of such section 146. 

21 ‘‘(g) REFINANCING RULES.—Bonds designated by 

22 the Secretary under subsection (a) may be issued for refi23 nancing projects only if the indebtedness being refinanced 

24 (including any obligation directly or indirectly refinanced 
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1 by such indebtedness) was originally incurred by the 

2 issuer— 

3 ‘‘(1) after the date of the enactment of this sec4 tion; 

5 ‘‘(2) for a term of not more than 3 years; 

6 ‘‘(3) to finance projects described in subsection 

7 (a)(2); and 

8 ‘‘(4) in anticipation of being refinanced with 

9 proceeds of a bond designated under subsection (a). 

10 ‘‘(h) PROVISIONS REGARDING HIGH-SPEED RAIL

11 SERVICE.— 

12 ‘‘(1) STATUS AS EMPLOYER OR CARRIER.—Any 

13 entity providing railroad transportation (within the 

14 meaning of section 20102) that begins operations 

15 after the date of the enactment of this section and 

16 that uses property acquired pursuant to this section 

17 (except as provided in subsection (a)(2)(B)), shall be 

18 considered an employer for purposes of the Railroad 

19 Retirement Act of 1974 (45 U.S.C. 231 et seq.) and 

20 considered a carrier for purposes of the Railway 

21 Labor Act (45 U.S.C. 151 et seq.). 

22 ‘‘(2) COLLECTIVE BARGAINING AGREEMENT.— 

23 Any entity providing high-speed intercity passenger 

24 railroad transportation (within the meaning of sec25 tion 20102) that begins operations after the date of 
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1 enactment of this section on a project funded in 

2 whole or in part by bonds designated under sub3 section (a), and replaces intercity rail passenger 

4 service that was provided by another entity as of the 

5 date of enactment of this section, shall enter into an 

6 agreement with the authorized bargaining agent or 

7 agents for employees of the predecessor provider 

8 that— 

9 ‘‘(A) gives each employee of the prede10 cessor provider priority in hiring according to 

11 the employee’s seniority on the predecessor pro12 vider for each position with the replacing entity 

13 that is in the employee’s craft or class and is 

14 available within three years after the termi15 nation of the service being replaced; 

16 ‘‘(B) establishes a procedure for notifying 

17 such an employee of such positions; 

18 ‘‘(C) establishes a procedure for such an 

19 employee to apply for such positions; and 

20 ‘‘(D) establishes rates of pay, rules, and 

21 working conditions. 

22 ‘‘(3) IMMEDIATE REPLACEMENT OF EXISTING

23 RAIL PASSENGER SERVICE.— 

24 ‘‘(A) NEGOTIATIONS.—If the replacement 

25 of preexisting intercity rail passenger service oc-
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1 curs concurrent with or within a reasonable 

2 amount of time before the commencement of 

3 the replacing entity’s high-speed rail passenger 

4 service, the replacing entity shall give written 

5 notice of its plan to replace existing rail pas6 senger service to the authorized collective bar7 gaining agent or agents for the employees of 

8 the predecessor provider at least 90 days prior 

9 to the date it plans to commence service. With10 in 5 days after the date of receipt of such writ11 ten notice, negotiations between the replacing 

12 entity and the collective bargaining agent or 

13 agents for the employees of the predecessor pro14 vider shall commence for the purpose of reach15 ing agreement with respect to all matters set 

16 forth in paragraph (2)(A)–(D). The negotia17 tions shall continue for 30 days or until an 

18 agreement is reached, whichever is sooner. If at 

19 the end of 30 days the parties have not entered 

20 into an agreement with respect to all such mat21 ters, the unresolved issues shall be submitted 

22 for arbitration in accordance with the procedure 

23 set forth in subparagraph (B). 

24 ‘‘(B) ARBITRATION.—If an agreement has 

25 not been entered into with respect to all mat-
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1 ters set forth in paragraph (2)(A)–(D) as pro2 vided in subparagraph (A) of this paragraph, 

3 the parties shall select an arbitrator. If the par4 ties are unable to agree upon the selection of 

5 such arbitrator within 5 days, either or both 

6 parties shall notify the National Mediation 

7 Board, which shall provide a list of seven arbi8 trators with experience in arbitrating rail labor 

9 protection disputes. Within 5 days after such 

10 notification, the parties shall alternately strike 

11 names from the list until only one name re12 mains, and that person shall serve as the neu13 tral arbitrator. Within 45 days after selection of 

14 the arbitrator, the arbitrator shall conduct a 

15 hearing on the dispute and shall render a deci16 sion with respect to the unresolved issues set 

17 forth in paragraph (2)(A)–(D). This decision 

18 shall be final, binding, and conclusive upon the 

19 parties. The salary and expenses of the arbi20 trator shall be borne equally by the parties; all 

21 other expenses shall be paid by the party incur22 ring them. 

23 ‘‘(C) SERVICE COMMENCEMENT.—A re24 placing entity under this paragraph shall com25 mence service only after an agreement is en-
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1 tered into with respect to the matters set forth 

2 in paragraph (2)(A)–(D) or the decision of the 

3 arbitrator has been rendered. 

4 ‘‘(4) SUBSEQUENT REPLACEMENT OF EXISTING

5 RAIL PASSENGER SERVICE.—If the replacement of 

6 existing rail passenger service takes place within 3 

7 years after the replacing entity commences high8 speed rail passenger service, the replacing entity and 

9 the collective bargaining agent or agents for the em10 ployees of the predecessor provider shall enter into 

11 an agreement with respect to the matters set forth 

12 in paragraph (2)(A)–(D). If the parties have not en13 tered into an agreement with respect to all such 

14 matters within 60 days after the date on which the 

15 replacing entity replaces the predecessor provider, 

16 the parties shall select an arbitrator using the proce17 dures set forth in paragraph (3)(B), who shall, with18 in 20 days after the commencement of the arbitra19 tion, conduct a hearing and decide all unresolved 

20 issues. This decision shall be final, binding, and con21 clusive upon the parties. 

22 ‘‘(i) ISSUANCE OF REGULATIONS.—Not later than 6 

23 months after the date of the enactment of this section, 

24 the Secretary shall issue regulations for carrying out this 

25 section. 
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1 ‘‘(j) DEFINITIONS.—For purposes of this section— 

2 ‘‘(1) SUBSECTION (f) BOND.—The term ‘sub3 section (f) bond’ means a bond designated by the 

4 Secretary under subsection (a) for purposes of sub5 section (f). 

6 ‘‘(2) SECTION 54 BOND.—The term ‘section 54 

7 bond’ means a bond designated by the Secretary 

8 under subsection (a) for purposes of section 54 of 

9 the Internal Revenue Code of 1986 (relating to cred10 it to holders of qualified high-speed rail infrastruc11 ture bonds).’’. 

12 (b) TABLE OF SECTIONS AMENDMENT.—The table of 

13 sections of chapter 261 of title 49, United States Code, 

14 is amended by adding after the item relating to section 

15 26105 the following new item: 

‘‘26106. High-speed rail infrastructure bonds.’’. 

16 SEC. 3. TAX CREDIT TO HOLDERS OF QUALIFIED HIGH17 SPEED RAIL INFRASTRUCTURE BONDS. 

18 (a) IN GENERAL.—Part IV of subchapter A of chap19 ter 1 of the Internal Revenue Code of 1986 (relating to 

20 credits against tax) is amended by adding at the end the 

21 following new subpart: 

22 ‘‘Subpart H—Nonrefundable Credit for Holders of 

23 Qualified High-Speed Rail Infrastructure Bonds 

‘‘Sec. 54. Credit to holders of qualified high-speed rail infrastructure bonds. 
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1 ‘‘SEC. 54. CREDIT TO HOLDERS OF QUALIFIED HIGH-SPEED 

2 RAIL INFRASTRUCTURE BONDS. 

3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax4 payer who holds a qualified high-speed rail infrastructure 

5 bond on a credit allowance date of such bond which occurs 

6 during the taxable year, there shall be allowed as a credit 

7 against the tax imposed by this chapter for such taxable 

8 year an amount equal to the sum of the credits determined 

9 under subsection (b) with respect to credit allowance dates 

10 during such year on which the taxpayer holds such bond. 

11 ‘‘(b) AMOUNT OF CREDIT.— 

12 ‘‘(1) IN GENERAL.—The amount of the credit 

13 determined under this subsection with respect to any 

14 credit allowance date for a qualified high-speed rail 

15 infrastructure bond is 25 percent of the annual cred16 it determined with respect to such bond. 

17 ‘‘(2) ANNUAL CREDIT.—The annual credit de18 termined with respect to any qualified high-speed 

19 rail infrastructure bond is the product of— 

20 ‘‘(A) the applicable credit rate, multiplied 

21 by 

22 ‘‘(B) the outstanding face amount of the 

23 bond. 

24 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

25 of paragraph (2), the applicable credit rate with re26 spect to an issue is the rate equal to an average 
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1 market yield (as of the day before the date of sale 

2 of the issue) on outstanding long-term corporate 

3 debt obligations (determined under regulations pre4 scribed by the Secretary). 

5 ‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 

6 of this section, the term ‘credit allowance date’ 

7 means— 

8 ‘‘(A) March 15, 

9 ‘‘(B) June 15, 

10 ‘‘(C) September 15, and 

11 ‘‘(D) December 15. 

12 Such term includes the last day on which the bond 

13 is outstanding. 

14 ‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE15 DEMPTION.—In the case of a bond which is issued 

16 during the 3-month period ending on a credit allow17 ance date, the amount of the credit determined 

18 under this subsection with respect to such credit al19 lowance date shall be a ratable portion of the credit 

20 otherwise determined based on the portion of the 3- 

21 month period during which the bond is outstanding. 

22 A similar rule shall apply when the bond is re23 deemed. 

24 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 
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1 ‘‘(1) IN GENERAL.—The credit allowed under 

2 subsection (a) for any taxable year shall not exceed 

3 the excess of— 

4 ‘‘(A) the sum of the regular tax liability 

5 (as defined in section 26(b)) plus the tax im6 posed by section 55, over 

7 ‘‘(B) the sum of the credits allowable 

8 under this part (other than this subpart and 

9 subpart C). 

10 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

11 credit allowable under subsection (a) exceeds the 

12 limitation imposed by paragraph (1) for such taxable 

13 year, such excess shall be carried to the succeeding 

14 taxable year and added to the credit allowable under 

15 subsection (a) for such taxable year. 

16 ‘‘(d) CREDIT INCLUDED IN GROSS INCOME.—Gross 

17 income includes the amount of the credit allowed to the 

18 taxpayer under this section (determined without regard to 

19 subsection (c)) and the amount so included shall be treat20 ed as interest income. 

21 ‘‘(e) QUALIFIED HIGH-SPEED RAIL INFRASTRUC22 TURE BOND.—For purposes of this part, the term ‘quali23 fied high-speed rail infrastructure bond’ means any bond 

24 issued as part of an issue if— 
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1 ‘‘(1) the issuer certifies that the Secretary of 

2 Transportation has designated the bond for purposes 

3 of this section under section 26106(a) of title 49, 

4 United States Code, as in effect on the date of the 

5 enactment of this section, 

6 ‘‘(2) 95 percent or more of the proceeds from 

7 the sale of such issue are to be used for expenditures 

8 incurred after the date of the enactment of this sec9 tion for any project described in section 26106(a)(2) 

10 of title 49, United States Code, 

11 ‘‘(3) the term of each bond which is part of 

12 such issue does not exceed 20 years, 

13 ‘‘(4) the payment of principal with respect to 

14 such bond is the obligation solely of the issuer, and 

15 ‘‘(5) the issue meets the requirements of sub16 section (f) (relating to arbitrage). 

17 ‘‘(f) SPECIAL RULES RELATING TO ARBITRAGE.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

19 an issue shall be treated as meeting the require20 ments of this subsection if as of the date of 

21 issuance, the issuer reasonably expects— 

22 ‘‘(A) to spend at least 95 percent of the 

23 proceeds from the sale of the issue for 1 or 

24 more qualified projects within the 3-year period 

25 beginning on such date, 
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1 ‘‘(B) to incur a binding commitment with 

2 a third party to spend at least 10 percent of the 

3 proceeds from the sale of the issue, or to com4 mence construction, with respect to such 

5 projects within the 6-month period beginning on 

6 such date, and 

7 ‘‘(C) to proceed with due diligence to com8 plete such projects and to spend the proceeds 

9 from the sale of the issue. 

10 ‘‘(2) RULES REGARDING CONTINUING COMPLI11 ANCE AFTER 3-YEAR DETERMINATION.—If at least 

12 95 percent of the proceeds from the sale of the issue 

13 is not expended for 1 or more qualified projects 

14 within the 3-year period beginning on the date of 

15 issuance, but the requirements of paragraph (1) are 

16 otherwise met, an issue shall be treated as con17 tinuing to meet the requirements of this subsection 

18 if either— 

19 ‘‘(A) the issuer uses all unspent proceeds 

20 from the sale of the issue to redeem bonds of 

21 the issue within 90 days after the end of such 

22 3-year period, or 

23 ‘‘(B) the following requirements are met: 

24 ‘‘(i) The issuer spends at least 75 per25 cent of the proceeds from the sale of the 
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1 issue for 1 or more qualified projects with2 in the 3-year period beginning on the date 

3 of issuance. 

4 ‘‘(ii) Either— 

5 ‘‘(I) the issuer spends at least 95 

6 percent of the proceeds from the sale 

7 of the issue for 1 or more qualified 

8 projects within the 4-year period be9 ginning on the date of issuance, or 

10 ‘‘(II) the issuer pays to the Fed11 eral Government any earnings on the 

12 proceeds from the sale of the issue 

13 that accrue after the end of the 3-year 

14 period beginning on the date of 

15 issuance and uses all unspent pro16 ceeds from the sale of the issue to re17 deem bonds of the issue within 90 

18 days after the end of the 4-year pe19 riod beginning on the date of 

20 issuance. 

21 ‘‘(g) RECAPTURE OF PORTION OF CREDIT WHERE

22 CESSATION OF COMPLIANCE.— 

23 ‘‘(1) IN GENERAL.—If any bond which when 

24 issued purported to be a qualified high-speed rail in25 frastructure bond ceases to be such a qualified bond, 
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1 the issuer shall pay to the United States (at the 

2 time required by the Secretary) an amount equal to 

3 the sum of— 

4 ‘‘(A) the aggregate of the credits allowable 

5 under this section with respect to such bond 

6 (determined without regard to subsection (c)) 

7 for taxable years ending during the calendar 

8 year in which such cessation occurs and the 2 

9 preceding calendar years, and 

10 ‘‘(B) interest at the underpayment rate 

11 under section 6621 on the amount determined 

12 under subparagraph (A) for each calendar year 

13 for the period beginning on the first day of 

14 such calendar year. 

15 ‘‘(2) FAILURE TO PAY.—If the issuer fails to 

16 timely pay the amount required by paragraph (1) 

17 with respect to such bond, the tax imposed by this 

18 chapter on each holder of any such bond which is 

19 part of such issue shall be increased (for the taxable 

20 year of the holder in which such cessation occurs) by 

21 the aggregate decrease in the credits allowed under 

22 this section to such holder for taxable years begin23 ning in such 3 calendar years which would have re24 sulted solely from denying any credit under this sec-
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1 tion with respect to such issue for such taxable 

2 years. 

3 ‘‘(3) SPECIAL RULES.— 

4 ‘‘(A) TAX BENEFIT RULE.—The tax for 

5 the taxable year shall be increased under para6 graph (2) only with respect to credits allowed 

7 by reason of this section which were used to re8 duce tax liability. In the case of credits not so 

9 used to reduce tax liability, the carryforwards 

10 under subsection (c) shall be appropriately ad11 justed. 

12 ‘‘(B) NO CREDITS AGAINST TAX.—Any in13 crease in tax under paragraph (2) shall not be 

14 treated as a tax imposed by this chapter for 

15 purposes of determining— 

16 ‘‘(i) the amount of any credit allow17 able under this part, or 

18 ‘‘(ii) the amount of the tax imposed 

19 by section 55. 

20 ‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 

21 For purposes of this section— 

22 ‘‘(1) BOND.—The term ‘bond’ includes any ob23 ligation. 
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1 ‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 

2 project’ means any project described in section 

3 26106(a)(2) of title 49, United States Code. 

4 ‘‘(3) TREATMENT OF CHANGES IN USE.—For 

5 purposes of subsection (e)(2), the proceeds from the 

6 sale of an issue shall not be treated as used for a 

7 qualified project to the extent that the issuer takes 

8 any action within its control which causes such pro9 ceeds not to be used for a qualified project. The Sec10 retary shall prescribe regulations specifying remedial 

11 actions that may be taken (including conditions to 

12 taking such remedial actions) to prevent an action 

13 described in the preceding sentence from causing a 

14 bond to fail to be a qualified high-speed rail infra15 structure bond. 

16 ‘‘(4) PARTNERSHIP; S CORPORATION; AND

17 OTHER PASS-THRU ENTITIES.—Under regulations 

18 prescribed by the Secretary, in the case of a partner19 ship, trust, S corporation, or other pass-thru entity, 

20 rules similar to the rules of section 41(g) shall apply 

21 with respect to the credit allowable under subsection 

22 (a). 

23 ‘‘(5) BONDS HELD BY REGULATED INVEST24 MENT COMPANIES.—If any qualified high-speed rail 

25 infrastructure bond is held by a regulated invest-
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1 ment company, the credit determined under sub2 section (a) shall be allowed to shareholders of such 

3 company under procedures prescribed by the Sec4 retary. 

5 ‘‘(6) REPORTING.—Issuers of qualified high6 speed rail infrastructure bonds shall submit reports 

7 similar to the reports required under section 

8 149(e).’’. 

9 (b) AMENDMENTS TO OTHER CODE SECTIONS.— 

10 (1) REPORTING.—Subsection (d) of section 

11 6049 of the Internal Revenue Code of 1986 (relating 

12 to returns regarding payments of interest) is amend13 ed by adding at the end the following new para14 graph: 

15 ‘‘(8) REPORTING OF CREDIT ON QUALIFIED

16 HIGH-SPEED RAIL INFRASTRUCTURE BONDS.— 

17 ‘‘(A) IN GENERAL.—For purposes of sub18 section (a), the term ‘interest’ includes amounts 

19 includible in gross income under section 54(d) 

20 and such amounts shall be treated as paid on 

21 the credit allowance date (as defined in section 

22 54(b)(4)). 

23 ‘‘(B) REPORTING TO CORPORATIONS, 

24 ETC.—Except as otherwise provided in regula25 tions, in the case of any interest described in 
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1 subparagraph (A), subsection (b)(4) shall be 

2 applied without regard to subparagraphs (A), 

3 (H), (I), (J), (K), and (L)(i) of such subsection. 

4 ‘‘(C) REGULATORY AUTHORITY.—The Sec5 retary may prescribe such regulations as are 

6 necessary or appropriate to carry out the pur7 poses of this paragraph, including regulations 

8 which require more frequent or more detailed 

9 reporting.’’. 

10 (2) TREATMENT FOR ESTIMATED TAX PUR11 POSES.— 

12 (A) INDIVIDUAL.—Section 6654 of such 

13 Code (relating to failure by individual to pay es14 timated income tax) is amended by redesig15 nating subsection (m) as subsection (n) and by 

16 inserting after subsection (l) the following new 

17 subsection: 

18 ‘‘(m) SPECIAL RULE FOR HOLDERS OF QUALIFIED

19 HIGH-SPEED RAIL INFRASTRUCTURE BONDS.—For pur20 poses of this section, the credit allowed by section 54 to 

21 a taxpayer by reason of holding a qualified high-speed rail 

22 infrastructure bond on a credit allowance date shall be 

23 treated as if it were a payment of estimated tax made by 

24 the taxpayer on such date.’’. 
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1 (B) CORPORATE.—Section 6655 of such 

2 Code (relating to failure by corporation to pay 

3 estimated income tax) is amended by adding at 

4 the end of subsection (g) the following new 

5 paragraph: 

6 ‘‘(5) SPECIAL RULE FOR HOLDERS OF QUALI7 FIED HIGH-SPEED RAIL INFRASTRUCTURE BONDS.— 

8 For purposes of this section, the credit allowed by 

9 section 54 to a taxpayer by reason of holding a 

10 qualified high-speed rail infrastructure bond on a 

11 credit allowance date shall be treated as if it were 

12 a payment of estimated tax made by the taxpayer on 

13 such date.’’. 

14 (c) CLERICAL AMENDMENTS.— 

15 (1) The table of subparts for part IV of sub16 chapter A of chapter 1 is amended by adding at the 

17 end the following new item: 

‘‘SUBPART H. NONREFUNDABLE CREDIT FOR HOLDERS OF QUALIFIED HIGHSPEED RAIL INFRASTRUCTURE BONDS’’. 

18 (2) Section 6401(b)(1) is amended by striking 

19 ‘‘and G’’ and inserting ‘‘G, and H’’. 

20 (d) ISSUANCE OF REGULATIONS.—Not later than 6 

21 months after the date of the enactment of this section, 

22 the Secretary of the Treasury shall issue regulations for 

23 carrying out this section and the amendments made by 

24 this section. 
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1 (e) HIGH-SPEED INTERCITY RAIL FACILITIES.— 

2 (1) REQUIREMENT TO MEET TITLE 49 RE3 QUIREMENTS.—Section 142(i) of the Internal Rev4 enue Code of 1986 is amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(4) ADDITIONAL REQUIREMENTS.—A bond 

7 issued as part of an issue described in subsection 

8 (a)(11) shall not be considered an exempt facility 

9 bond unless the requirements of paragraphs (1) 

10 through (6) of section 26106(a) of title 49, United 

11 States Code, are met.’’. 

12 (2) REVISION OF SPEED REQUIREMENT.—Sec13 tion 142(i)(1) of such Code is amended by striking 

14 ‘‘150 miles per hour’’ and inserting ‘‘110 miles per 

15 hour’’. 

16 (f) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to obligations issued after the date 

18 of the enactment of this Act. 

19 SEC. 4. 2. HIGH-SPEED RAIL CORRIDOR DEVELOPMENT. 

20 (a) CORRIDOR DEVELOPMENT.— 

21 (1) AMENDMENTS.—Section 26101 of title 49, 

22 United States Code, is amended— 

23 (A) in the section heading, by striking 

24 ‘‘planning’’ and inserting ‘‘development’’; 
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1 (B) in the heading of subsection (a), by 

2 striking ‘‘PLANNING’’ and inserting ‘‘DEVELOP3 MENT’’; 

4 (C) by striking ‘‘corridor planning’’ each 

5 place it appears and inserting ‘‘corridor devel6 opment’’; 

7 (D) in subsection (b)(1)— 

8 (i) by inserting ‘‘, or if it is an activity 

9 described in subparagraph (M)’’ after 

10 ‘‘high-speed rail improvements’’; 

11 (ii) by striking ‘‘and’’ at the end of 

12 subparagraph (K); 

13 (iii) by striking the period at the end 

14 of subparagraph (L) and inserting ‘‘; and’’; 

15 and 

16 (iv) by adding at the end the following 

17 new subparagraph: 

18 ‘‘(M) the acquisition of locomotives, rolling 

19 stock, track, and signal equipment.’’; and 

20 (E) in subsection (c)(2), by striking ‘‘plan21 ning’’ and inserting ‘‘development’’. 

22 (2) CONFORMING AMENDMENT.—The item re23 lating to section 26101 in the table of sections of 

24 chapter 261 of title 49, United States Code, is 
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1 amended by striking ‘‘planning’’ and inserting ‘‘de2 velopment’’. 

3 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

4 26104 of title 49, United States Code, is amended to read 

5 as follows: 

6 ‘‘§ 26104. Authorization of appropriations 

7 ‘‘(a) FISCAL YEARS 2006 THROUGH 2013.—There 

8 are authorized to be appropriated to the Secretary— 

9 ‘‘(1) $70,000,000 for carrying out section 

10 26101; and 

11 ‘‘(2) $30,000,000 for carrying out section 

12 26102, 

13 for each of the fiscal years 2006 through 2013. 

14 ‘‘(b) FUNDS TO REMAIN AVAILABLE.—Funds made 

15 available under this section shall remain available until ex16 pended.’’. 

17 SEC. 5. 3. REHABILITATION AND IMPROVEMENT 

18 FINANCING. 

19 (a) DEFINITIONS.—Section 102(7) of the Railroad 

20 Revitalization and Regulatory Reform Act of 1976 (45 

21 U.S.C. 802(7)) is amended to read as follows: 

22 ‘‘(7) ‘railroad’ has the meaning given that term 

23 in section 20102 of title 49, United States Code; 

24 and’’. 
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1 (b) GENERAL AUTHORITY.—Section 502(a) of the 

2 Railroad Revitalization and Regulatory Reform Act of 

3 1976 (45 U.S.C. 822(a)) is amended by striking ‘‘Sec4 retary may provide direct loans and loan guarantees to 

5 State and local governments,’’ and inserting ‘‘Secretary 

6 shall provide direct loans and loan guarantees to State and 

7 local governments, agreements or interstate compacts con8 sented to by Congress under section 410(a) of Public Law 

9 105–134 (49 U.S.C 24101 nt),’’. 

10 (c) EXTENT OF AUTHORITY.—Section 502(d) of the 

11 Railroad Revitalization and Regulatory Reform Act of 

12 1976 (45 U.S.C. 822(d)) is amended— 

13 (1) by striking ‘‘$3,500,000,000’’ and inserting 

14 ‘‘$35,000,000,000’’; 

15 (2) by striking ‘‘$1,000,000,000’’ and inserting 

16 ‘‘$7,000,000,000’’; and 

17 (3) by adding at the end the following new sen18 tence: ‘‘The Secretary shall not establish any limit 

19 on the proportion of the unused amount authorized 

20 under this subsection that may be used for 1 loan 

21 or loan guarantee.’’. 

22 (d) COHORTS OF LOANS.—Section 502(f) of the Rail23 road Revitalization and Regulatory Reform Act of 1976 

24 (45 U.S.C. 822(f)) is amended— 

25 (1) in paragraph (2)— 
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1 (A) by striking ‘‘and’’ at the end of sub2 paragraph (D); 

3 (B) by redesignating subparagraph (E) as 

4 subparagraph (F); and 

5 (C) by adding after subparagraph (D) the 

6 following new subparagraph: 

7 ‘‘(E) the size and characteristics of the co8 hort of which the loan or loan guarantee is a 

9 member; and’’; and 

10 (2) by adding at the end of paragraph (4) the 

11 following: ‘‘A cohort may include loans and loan 

12 guarantees. The Secretary shall not establish any 

13 limit on the proportion of a cohort that may be used 

14 for 1 loan or loan guarantee.’’. 

15 (e) CONDITIONS OF ASSISTANCE.—Section 502 of the 

16 Railroad Revitalization and Regulatory Reform Act of 

17 1976 (45 U.S.C. 822) is amended— 

18 (1) in subsection (f)(2)(A), by inserting ‘‘, if 

19 any’’ after ‘‘collateral offered’’; and 

20 (2) by adding at the end of subsection (h) the 

21 following: 

22 ‘‘The Secretary shall not require an applicant for a direct 

23 loan or loan guarantee under this section to provide collat24 eral. The Secretary shall not require that an applicant for 

25 a direct loan or loan guarantee under this section have 
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1 previously sought the financial assistance requested from 

2 another source. The Secretary shall require recipients of 

3 direct loans or loan guarantees under this section to apply 

4 the standards of section 26106(a)(5) of title 49, United 

5 States Code, to their projects.’’. 

6 (f) TIME LIMIT FOR APPROVAL OR DISAPPROVAL.— 

7 Section 502 of the Railroad Revitalization and Regulatory 

8 Reform Act of 1976 (45 U.S.C. 822) is amended by add9 ing at the end the following new subsection: 

10 ‘‘(i) TIME LIMIT FOR APPROVAL OR DISAPPROVAL.— 

11 Not later than 90 days after receiving a complete applica12 tion for a direct loan or loan guarantee under this section, 

13 the Secretary shall approve or disapprove the applica14 tion.’’. 

15 (g) FEES AND CHARGES.—Section 503 of the Rail16 road Revitalization and Regulatory Reform Act of 1976 

17 (45 U.S.C. 823) is amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(l) FEES AND CHARGES.—Except as provided in 

20 this title, the Secretary may not assess any fees, including 

21 user fees, or charges in connection with a direct loan or 

22 loan guarantee provided under section 502.’’. 

23 (h) SUBSTANTIVE CRITERIA AND STANDARDS.—Not 

24 later than 30 days after the date of the enactment of this 

25 Act, the Secretary of Transportation shall publish in the 
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1 Federal Register and post on the Department of Trans2 portation web site the substantive criteria and standards 

3 used by the Secretary to determine whether to approve 

4 or disapprove applications submitted under section 502 of 

5 the Railroad Revitalization and Regulatory Reform Act of 

6 1976 (45 U.S.C. 822). 
Union Calendar No. 201 

109TH CONGRESS 

2D SESSION H. R. 1631 

[Report No. 109–314, Parts I and II] 

A BILL 

To provide for the financing of high-speed rail 

infrastructure, and for other purposes. 

FEBRUARY 3, 2006 

Reported from the Committee on Ways and Means with 

to be printed Whole House on the State of the Union, and ordered an amendment, committed to the Committee of the