II 

108TH CONGRESS 

2D SESSION S. 2306 

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

program. 

IN THE SENATE OF THE UNITED STATES 

APRIL 8, 2004 

Mr. MCCAIN (for himself and Mr. SUNUNU) introduced the following bill; 

which was read twice and referred to the Committee on Commerce, 

Science, and Transportation 

A BILL 

To reauthorize, restructure, and reform the intercity 

passenger rail service program. 

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 Passenger Service 

5 Restructuring, Reauthorization, and Development Act’’. 

6 SEC. 2. TABLE OF CONTENTS; AMENDMENT OF TITLE 49, 

7 UNITED STATES CODE. 

8 (a) TABLE OF CONTENTS.—The table of contents for 

9 this Act is as follows: 

Sec. 1. Short title. 

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

Subtitle A—Restructuring 

Sec. 101. Findings, purpose, and goals. 

Sec. 102. Passenger rail service restructuring. 

Sec. 103. Definitions. 

Sec. 104. Operating grants for corridor routes. 

Sec. 105. Operating grants for long distance routes. 

Sec. 106. Long distance route restructuring commission. 

Sec. 107. Criteria for restructuring. 

Sec. 108. Implementation of restructuring plan. 

Sec. 109. Redemption of common stock. 

Sec. 110. Retirement of preferred stock; transfer of assets. 

Sec. 111. Real estate and asset sales; other. 

Subtitle B—Northeast Corridor 

Sec. 131. Interstate compact for the Northeast Corridor. 

Sec. 132. Shut-down of commuter or freight operations. 

Sec. 133. Capital grants for the Northeast Corridor. 

Subtitle C—Related Matters 

Sec. 151. Fair and open competition. 

Sec. 152. Access to other railroads. 

Sec. 153. Limitations on rail passenger transportation liability. 

Sec. 154. Train operations insurance pool. 

Sec. 155. Collective bargaining arrangements. 

TITLE II—RAIL DEVELOPMENT 

Sec. 201. Capital assistance for intercity passenger rail service. 

Sec. 202. Regulations 

TITLE III—REFORMS 

Sec. 301. Management of secured debt. 

Sec. 302. Employee transition assistance. 

Sec. 303. Termination of authority for GSA to provide services to Amtrak. 

Sec. 304. Amtrak reform board of directors. 

Sec. 305. Limitations on availability of grants. 

Sec. 306. Repeal of obsolete and executed provisions of law. 

Sec. 307. Establishment of financial accounting system. 

Sec. 308. Restructuring of long-term debt and capital leases. 

Sec. 309. Authorization of appropriations. 

1 (b) AMENDMENT OF TITLE 49.—Except as otherwise 

2 expressly provided, whenever in this Act an amendment 

3 or repeal is expressed in terms of an amendment to, or 

4 a repeal of, a section or other provision, the reference shall 
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1 be considered to be made to a section or other provision 

2 of title 49, United States Code. 

3 TITLE I—NETWORK RESTRUC4 TURING AND COST-SHARING 

5 Subtitle A—Restructuring 

6 SEC. 101. FINDINGS, PURPOSE, AND GOALS. 

7 Section 24101 is amended to read as follows: 

8 ‘‘§ 24101. Findings, purpose, and goals 

9 ‘‘(a) FINDINGS.— 

10 ‘‘(1) It is in the public interest of the United 

11 States to encourage and promote the development of 

12 various modes of transportation and transportation 

13 infrastructure to efficiently maximize the mobility of 

14 passengers and goods. 

15 ‘‘(2) Despite Federal subsidies of nearly $27 

16 billion over the past 34 years, intercity rail pas17 senger service still accounts for less than 1 percent 

18 of all intercity travel. 

19 ‘‘(3) Intercity rail passenger service can be 

20 competitive with other modes of transportation and 

21 achieve a significant share of the travel market in 

22 short-distance corridors connecting metropolitan 

23 areas. 

24 ‘‘(4) Rail passenger transportation can help al25 leviate overcrowding of airways and airports, and 
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1 can provide needed intermodal connections to air2 ports, bus terminals, and mass transit services. 

3 ‘‘(5) Corridor routes account for approximately 

4 85 percent of Amtrak’s ridership but only one-third 

5 of Amtrak’s operating losses, excluding depreciation. 

6 ‘‘(6) A number of Amtrak’s long-distance 

7 routes may be more efficiently operated and attract 

8 higher ridership as connected corridors. 

9 ‘‘(7) Long-distance routes that cannot be re10 structured as connected corridors, do not receive 

11 State financial support, cannot be operated on a for12 profit basis, or are not an essential link to the rest 

13 of the intercity passenger rail network, should be 

14 consolidated or discontinued. 

15 ‘‘(8) Some States with corridor services provide 

16 significant financial support for such services, while 

17 other States with routes and all States with long-dis18 tance routes contribute nothing for such services. 

19 More equitable cost-sharing is needed to justify Fed20 eral investment in intercity rail passenger service. 

21 ‘‘(9) The need to invest taxpayer dollars in 

22 intercity rail passenger service demands that fair 

23 and open competition be permitted for the provision 

24 of such services to ensure that service is provided in 
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1 the most efficient manner without jeopardizing the 

2 safety of such operations. 

3 ‘‘(10) A greater degree of cooperation is nec4 essary among intercity passenger service operators, 

5 freight railroads, State, regional, and local govern6 ments, the private sector, labor organizations, and 

7 suppliers of services and equipment to achieve the 

8 performance sufficient to justify the expenditure of 

9 additional public money on intercity rail passenger 

10 service. 

11 ‘‘(11) Transportation services provided by the 

12 private freight railroads are vital to the economy and 

13 national defense and should not be disadvantaged by 

14 the operation of intercity passenger rail service over 

15 their rights-of-way. 

16 ‘‘(12) The Northeast Corridor is a valuable re17 source of the United States used by intercity and 

18 commuter rail passenger transportation and freight 

19 transportation and should be restored to a state of 

20 good repair. 

21 ‘‘(b) PURPOSE.—The purpose of this part is to assist 

22 in the preservation and development of conventional and 

23 high-speed intercity rail passenger services where such 

24 services can play an important role in facilitating pas25 senger mobility in the United States. 
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1 ‘‘(c) GOALS.—The goals of this part are— 

2 ‘‘(1) to move toward a national network of 

3 interconnected short-distance passenger rail corridor 

4 services; 

5 ‘‘(2) to return the Northeast Corridor to a state 

6 of good repair; 

7 ‘‘(3) to establish a framework for the develop8 ment of new conventional and high-speed rail serv9 ices; 

10 ‘‘(4) to allow for train services to be operated 

11 under contract to a State or group of States, with 

12 the operator of the service selected by the State or 

13 group of States; 

14 ‘‘(5) to establish equitable cost-sharing for cap15 ital expenses and operating losses with the States; 

16 and 

17 ‘‘(6) to encourage greater participation in the 

18 provision of intercity rail passenger services by the 

19 private sector.’’. 

20 SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING. 

21 (a) IN GENERAL.—Chapter 243 is amended by in22 serting before section 24301 the following: 

23 ‘‘§ 24300. Restructuring mandate 

24 ‘‘(a) IN GENERAL.—Within 6 months after the date 

25 of enactment of the Rail Passenger Service Restructuring, 
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1 Reauthorization, and Development Act, the Amtrak Re2 form Board shall restructure Amtrak as 2 independent en3 tities, as follows: 

4 ‘‘(1) THE NATIONAL RAILROAD PASSENGER

5 CORPORATION.—One entity shall be the National 

6 Railroad Passenger Corporation, otherwise known as 

7 Amtrak, that shall provide overall supervision of the 

8 restructuring of the intercity passenger rail pro9 gram. 

10 ‘‘(2) THE AMERICAN PASSENGER RAILWAY COR11 PORATION.—The other entity shall be a for profit 

12 corporation, to be known as the American Passenger 

13 Railway Corporation, that shall be responsible for 

14 conducting the passenger operations, infrastructure 

15 maintenance, and related services, including oper16 ation of reservation centers and ownership and 

17 maintenance of rolling stock. 

18 ‘‘(b) ARTICLES OF INCORPORATION AND OTHER

19 DOCUMENTATION.—Within 6 months after the date of en20 actment of the Rail Passenger Service Restructuring, Re21 authorization, and Development Act, the Amtrak Reform 

22 Board shall— 

23 ‘‘(1) file appropriate articles of incorporation 

24 under State law for the American Passenger Rail25 way Corporation; and 
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1 ‘‘(2) amend the articles of incorporation and 

2 bylaws of the National Railroad Passenger Corpora3 tion to reflect its changed functions and responsibil4 ities. 

5 ‘‘(c) ROLES AND RESPONSIBILITIES OF THE AMER6 ICAN PASSENGER RAILWAY CORPORATION.— 

7 ‘‘(1) RAILROAD ACTIVITIES.—Consistent with 

8 the business corporation law of the State of incorpo9 ration of the American Passenger Railway Corpora10 tion, the Corporation shall be qualified to undertake 

11 railroad activities of an operational or infrastructure 

12 nature. 

13 ‘‘(2) RAIL OPERATIONS AND RELATED FUNC14 TIONS.—The American Passenger Railway Corpora15 tion— 

16 ‘‘(A) shall have the exclusive right, until 

17 October 1, 2005, to continue to provide the 

18 intercity passenger services provided by Amtrak 

19 on the date of enactment of the Rail Passenger 

20 Service Restructuring, Reauthorization, and 

21 Development Act; 

22 ‘‘(B) shall, beginning October 1, 2005, op23 erate intercity passenger service only on a con24 tractual basis under negotiated terms and con25 ditions; 
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1 ‘‘(C) shall operate a national reservations 

2 system; and 

3 ‘‘(D) subject to fulfillment of its contrac4 tual obligations, shall have the exclusive right, 

5 until management of the mainline of the North6 east Corridor between Boston, Massachusetts, 

7 and Washington, District of Columbia, is trans8 ferred to the interstate compact created under 

9 section 131 or to another entity, to provide the 

10 train operations, dispatching, maintenance, and 

11 infrastructure services that are being provided 

12 by Amtrak on the date of enactment of the Rail 

13 Passenger Service Restructuring, Reauthoriza14 tion, and Development Act, but may provide 

15 such services beginning October 1, 2005, only 

16 on a contractual basis with the National Rail17 road Passenger Corporation under negotiated 

18 terms and conditions. 

19 ‘‘(3) STATUS OF CORPORATION.— 

20 ‘‘(A) The American Passenger Railway 

21 Corporation— 

22 ‘‘(i) is a railroad carrier under section 

23 20102(2) and chapters 261 and 281 of 

24 this title; 
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1 ‘‘(ii) shall be operated and managed 

2 as a for-profit corporation; and 

3 ‘‘(iii) is not a department, agency, or 

4 instrumentality of the United States Gov5 ernment nor a Government corporation (as 

6 defined in section 103 of title 5). 

7 ‘‘(B) Chapter 105 of this title does not apply to 

8 the American Passenger Railway Corporation, except 

9 that laws and regulations governing safety, employee 

10 representation for collective bargaining purposes, the 

11 handling of disputes between carriers and employees, 

12 employee retirement, annuity, and unemployment 

13 systems, and other dealings with employees apply to 

14 the American Passenger Railway Corporation to the 

15 same extent as they applied to Amtrak before the re16 structuring required by this section. 

17 ‘‘(C) Subsections (c), (d), and (f) through (l) of 

18 section 24301 of this title shall apply to the Cor19 poration. 

20 ‘‘(4) CHIEF EXECUTIVE OFFICER.—Subject to 

21 further action by the board of directors of the Amer22 ican Passenger Railway Corporation, the individual 

23 who, on the date of enactment of the Rail Passenger 

24 Service Restructuring, Reauthorization, and Devel25 opment Act, is President of Amtrak shall be offered 
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1 the position of chief executive officer of the Amer2 ican Passenger Railway Corporation as soon as prac3 ticable after the corporation is established. 

4 ‘‘(5) ISSUANCE OF STOCK AND ASSUMPTION OF

5 DEBT.—The Corporation may not issue stock or 

6 incur debt without the express approval of the Sec7 retary of Transportation. 

8 ‘‘§ 24300A. American Passenger Railway Corporation 

9 board of directors 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) MEMBERSHIP.—The American Passenger 

12 Railway Corporation shall be governed by a board of 

13 directors consisting of 7 members appointed by the 

14 President, by and with the advice and consent of the 

15 Senate. 

16 ‘‘(2) QUALIFICATIONS.— 

17 ‘‘(A) IN GENERAL.—Members of the board 

18 shall be chosen from among individuals who 

19 have technical qualifications, professional stand20 ing, and demonstrated expertise in the field of 

21 transportation, corporate management, or fi22 nancial management. 

23 ‘‘(B) FEDERAL EMPLOYEES DISQUALI24 FIED.—No individual who is an officer or em-
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1 ployee of the United States may serve as a 

2 member of the board. 

3 ‘‘(3) TERM OF OFFICE.—Each member shall 

4 serve for a term of 5 years. An individual may not 

5 serve for more than 2 terms. 

6 ‘‘(4) QUORUM.—A majority of the board mem7 bers who have been lawfully appointed and qualified 

8 at any moment shall constitute a quorum for the 

9 conduct of business. 

10 ‘‘(b) BYLAWS.—The board of directors shall adopt 

11 bylaws governing the corporation consistent with the pro12 visions of this section and its articles of incorporation, and 

13 may amend, repeal, and otherwise modify the bylaws from 

14 time to time as necessary or appropriate. 

15 ‘‘(c) TRANSITION BOARD MEMBERS.—Individuals 

16 who are serving as members of the Amtrak Reform Board 

17 on the day before the date on which the American Pas18 senger Railway Corporation is established, with the excep19 tion of the Secretary of Transportation, shall serve as 

20 members of the board of directors of the American Pas21 senger Railway Corporation until 4 members of that board 

22 have been appointed and qualified. 
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1 ‘‘§ 24300B. National Railroad Passenger Corporation 

2 board after restructuring 

3 ‘‘(a) IN GENERAL.—After the American Passenger 

4 Railway Corporation is established, the Reform Board es5 tablished under section 24302(a) shall be dissolved, and 

6 the National Railroad Passenger Corporation shall be gov7 erned by a board of directors consisting of— 

8 ‘‘(1) the Secretary of Transportation; 

9 ‘‘(2) the Federal Railroad Administrator or an10 other officer of the United States within the Depart11 ment of Transportation compensated under the Ex12 ecutive Schedule under title 5, United States Code, 

13 who is designated by the Secretary; and 

14 ‘‘(3) the Federal Transit Administrator or an15 other officer of the United States within the Depart16 ment of Transportation compensated under the Ex17 ecutive Schedule under title 5, who is designated by 

18 the Secretary. 

19 ‘‘(b) ROLES AND RESPONSIBILITIES.— 

20 ‘‘(1) SUPERVISION AND MANAGEMENT.—After 

21 the board of directors described in subsection (a) 

22 takes office, the National Railroad Passenger Cor23 poration shall— 

24 ‘‘(A) provide overall supervision of the re25 structuring of the intercity passenger rail pro26 gram; 
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1 ‘‘(B) manage residual Amtrak responsibil2 ities; and 

3 ‘‘(C) retain and manage Amtrak’s legal 

4 rights, including its legal right of access to 

5 other railroads, and ownership of Amtrak’s real 

6 property, until that property is transferred to 

7 the Secretary of Transportation under section 

8 110 of the Rail Passenger Service Restruc9 turing, Reauthorization, and Development Act. 

10 ‘‘(2) CONTRACTS FOR SERVICE.—The National 

11 Railroad Passenger Corporation shall, by contract, 

12 permit an operator to provide intercity passenger 

13 rail service over any route operated by Amtrak on 

14 the date prior to the date the restructuring required 

15 by section 24300 becomes effective, at the fre16 quencies in effect on that date, on its behalf and to 

17 use its right of access to any segment of rail line 

18 owned by another rail carrier needed for the oper19 ation of that train. The operator may be the Amer20 ican Passenger Railway Corporation or another op21 erator, but there shall be no more than 1 intercity 

22 passenger rail operator at a time over any segment 

23 of rail line owned by another rail carrier, except in 

24 terminal areas as determined by the Secretary or as 

25 may otherwise be provided by agreement among the 
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1 National Railroad Passenger Corporation, the opera2 tors, and the owner of the rail line. 

3 ‘‘(3) USE OF AMTRAK NAME.— 

4 ‘‘(A) IN GENERAL.—The National Railroad 

5 Passenger Corporation shall retain all legal 

6 rights pertaining to the name ‘Amtrak,’ and 

7 may, at its option, license or otherwise make 

8 the name ‘Amtrak’ commercially available in 

9 connection with intercity passenger rail and re10 lated services. 

11 ‘‘(B) USE BY AMERICAN PASSENGER RAIL12 WAY CORPORATION.—Amtrak shall by contract, 

13 permit the American Passenger Railway Cor14 poration to market its services under the Am15 trak name. 

16 ‘‘(4) AMTRAK PERSONNEL.—All Amtrak em17 ployees shall become American Passenger Railway 

18 Corporation employees unless retained by the Na19 tional Railroad Passenger Corporation. The Amer20 ican Passenger Railway Corporation shall succeed to 

21 the collective bargaining agreements in effect be22 tween Amtrak and labor organizations that are in 

23 effect on the day before the date on which that Cor24 poration is established. An employee who elects em25 ployment with National Railroad Passenger Corpora-
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1 tion shall become an employee of that Corporation, 

2 with only such rights regarding pay and benefits as 

3 that Corporation shall determine. 

4 ‘‘(5) FREIGHT AND COMMUTER OPERATIONS.— 

5 The National Railroad Passenger Corporation shall 

6 ensure that the implementation of the restructuring 

7 required by section 24300 gives due consideration to 

8 the needs of freight and commuter operations that, 

9 as of the date of enactment of the Rail Passenger 

10 Service Restructuring, Reauthorization, and Devel11 opment Act, operate on the Northeast Corridor 

12 using Amtrak rights-of-way. 

13 ‘‘(6) ROLLING STOCK.—The National Railroad 

14 Passenger Corporation shall set the terms under 

15 which the American Passenger Railway Corporation 

16 must make available to any replacement operator the 

17 legacy equipment associated with any intercity pas18 senger rail service provided as of the date of the re19 structuring required by section 24300.’’. 

20 (b) SPINNING-OFF OF RESERVATIONS SYSTEM.—Not 

21 later than 2 years after the date of enactment of the Rail 

22 Passenger Service Restructuring, Reauthorization, and 

23 Development Act, the Inspector General of the Depart24 ment of Transportation shall submit to the Secretary of 

25 Transportation, the Senate Committee on Commerce, 
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1 Science, and Transportation, and the House of Represent2 atives Committee on Transportation and Infrastructure 

3 recommendations on the feasibility, advantages, and dis4 advantages of spinning off the national reservations sys5 tem as a private for-profit entity. 

6 (c) CONFORMING AMENDMENT.—The chapter anal7 ysis for chapter 243 is amended by inserting the following 

8 after the item relating to section 24309: 

‘‘24300. Restructuring mandate. 

‘‘24300A. American Passenger Railway Corporation board of directors. 

‘‘24300B. Amtrak board after restructuring.’’. 

9 SEC. 103. DEFINITIONS. 

10 Section 24102 is amended— 

11 (1) by striking paragraph (2) and redesignating 

12 paragraphs (3) through (9) as paragraphs (2) 

13 through (8), respectively; 

14 (2) by redesignating paragraphs (3) through 

15 (8), as redesignated, as paragraphs (4) through (9), 

16 respectively, and inserting after paragraph (2) the 

17 following: 

18 ‘‘(3) ‘corridor route’ means— 

19 ‘‘(A) a train route operated by Amtrak 

20 with a route length of 750 miles or less as of 

21 January 1, 2004; or 

22 ‘‘(B) a new conventional or high-speed 

23 route eligible for funding under chapter 244 of 

24 this title.’’; 
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1 (3) by redesignating paragraphs (6) through 

2 (9), as redesignated, as paragraphs (8) through 

3 (11), respectively, and inserting after paragraph (5) 

4 the following: 

5 ‘‘(6) ‘long distance route’ means a train route 

6 operated by Amtrak with a route length greater than 

7 750 miles as of January 1, 2004. 

8 ‘‘(7) ‘legacy equipment’ means the rolling stock 

9 required to provide intercity passenger rail service 

10 owned or leased by Amtrak on the day prior to the 

11 date on which the restructuring required by section 

12 24300 is completed (as such date is determined by 

13 the Secretary).’’. 

14 SEC. 104. OPERATING GRANTS FOR CORRIDOR ROUTES. 

15 (a) IN GENERAL.—Chapter 243 is amended by add16 ing at the end the following: 

17 ‘‘§ 24316. Operating grants for corridor routes 

18 ‘‘(a) IN GENERAL.— 

19 ‘‘(1) OPERATING GRANT AUTHORITY.—Begin20 ning on October 1, 2005, the Secretary of Transpor21 tation may make grants to States for operating as22 sistance under the authority of this section, and not 

23 under any other provision of law, to reimburse oper24 ators of the corridor routes operated by Amtrak on 

25 the day before the date on which the restructuring 
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1 required by section 24300 is completed (as deter2 mined by the Secretary) for a portion of the oper3 ating subsidies required to operate those routes with 

4 the same train frequencies. 

5 ‘‘(2) CONDITIONS.—A grant under this section 

6 shall be subject to the terms, conditions, require7 ments, and provisions the Secretary decides are nec8 essary or appropriate for the purposes of this sec9 tion, including limitations on what operating ex10 penses are eligible for reimbursement. 

11 ‘‘(b) FEDERAL SHARE OF OPERATING LOSSES.— 

12 ‘‘(1) REIMBURSABLE AMOUNT.—A grant to a 

13 State under this section for any fiscal year may not 

14 exceed an amount equal to the lower of— 

15 ‘‘(A) the applicable percentage of the Fed16 eral operating subsidy for that fiscal year; or 

17 ‘‘(B) the percentage of the operating sub18 sidy for a route not borne by a State during the 

19 last fiscal year ending before the date of enact20 ment of the Rail Passenger Service Restruc21 turing, Reauthorization, and Development Act. 

22 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

23 of paragraph (1), the applicable percentage of the 

24 operating subsidy for a fiscal year is— 

25 ‘‘(A) 70 percent for fiscal year 2006; 
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1 ‘‘(B) 60 percent for fiscal year 2007; 

2 ‘‘(C) 50 percent for fiscal year 2008; 

3 ‘‘(D) 40 percent for fiscal year 2009; and 

4 ‘‘(E) 30 percent for fiscal year 2010. 

5 ‘‘(c) DETERMINATION OF EXPENSES ELIGIBLE FOR

6 REIMBURSEMENT.— 

7 ‘‘(1) ANNUAL DETERMINATION OF SUBSIDY.— 

8 On an annual basis, the Inspector General for the 

9 Department of Transportation shall analyze and ad10 vise the Secretary of Transportation as to the oper11 ating subsidy required on each corridor route oper12 ated by the American Passenger Railway Corpora13 tion under contract with a State without competitive 

14 bid. The operating loss on such routes shall— 

15 ‘‘(A) reflect the fully allocated costs of op16 erating the route, including an appropriate 

17 share of overhead expenses, including general 

18 and administrative expenses; and 

19 ‘‘(B) exclude depreciation and interest ex20 pense on long-term debt. 

21 ‘‘(2) AGGREGATION OF NORTHEAST CORRIDOR

22 PROFITS AND LOSSES.—Operating profits and losses 

23 on corridor routes operated exclusively on the main24 line of the Northeast Corridor extending from Wash25 ington, D.C. to Boston, MA may be aggregated for 
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1 purposes of determining the operating subsidy re2 quired on the routes. 

3 ‘‘(3) DETERMINATION WITH COMPETITIVE BID4 DING.—Expenses eligible for Federal support pursu5 ant to paragraph (b)(2) for reimbursement for a cor6 ridor route that has been competitively bid shall con7 sist of the operating subsidy agreed upon by the 

8 State, group of States, or other entity and the oper9 ator. 

10 ‘‘(d) EXCEPTION TO DATE COST-SHARING RE11 QUIRED.—For any State whose legislature has not con12 vened in regular session after the date of enactment of 

13 the Rail Passenger Service Restructuring, Reauthoriza14 tion, and Development Act and before October 1, 2005, 

15 the additional cost-sharing requirements of this section 

16 shall become effective on October 1, 2006. 

17 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to the Secretary to carry 

19 out this section— 

20 ‘‘(1) $125,000,000 for fiscal year 2006; 

21 ‘‘(2) $100,000,000 for fiscal year 2007; 

22 ‘‘(3) $90,000,000 for fiscal year 2008; 

23 ‘‘(4) $75,000,000 for fiscal year 2009; and 

24 ‘‘(5) $50,000,000 for fiscal year 2010.’’. 
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1 (b) CONFORMING AMENDMENT.—The chapter anal2 ysis for chapter 243 is amended by adding at the end the 

3 following: 

‘‘24316. Operating grants for corridor routes.’’. 

4 SEC. 105. OPERATING GRANTS FOR LONG DISTANCE 

5 ROUTES. 

6 (a) IN GENERAL.—Chapter 243, as amended by sec7 tion 104, is amended by adding at the end the following: 

8 ‘‘§ 24317. Operating grants for long distance routes 

9 ‘‘(a) IN GENERAL.— 

10 ‘‘(1) OPERATING GRANT AUTHORITY.—Begin11 ning on October 1, 2005, the Secretary of Transpor12 tation may make grants to the American Passenger 

13 Railway Corporation or to a State providing finan14 cial support for a long distance route for operating 

15 assistance under the authority of this section, and 

16 not under any other provision of law, to reimburse 

17 operators of the long distance routes operated by 

18 Amtrak on the day before the date on which the re19 structuring required by section 24300 is completed 

20 (as determined by the Secretary) for a portion of the 

21 operating subsidies required to operate those routes 

22 with the same train frequencies. 

23 ‘‘(2) CONDITIONS.— 

24 ‘‘(A) A grant under this section shall be 

25 subject to the terms, conditions, requirements, 
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1 and provisions the Secretary decides are nec2 essary or appropriate for the purposes of this 

3 section, including limitations on what operating 

4 expenses are eligible for reimbursement. 

5 ‘‘(B) The Secretary shall require the 

6 American Passenger Railway Corporation, as a 

7 condition of a grant under this section, to sys8 tematically reduce its route and system-wide 

9 overhead expenses by a minimum of 5 percent 

10 annually through fiscal year 2010. A contract 

11 between the National Railroad Passenger Cor12 poration and the American Passenger Railway 

13 Corporation for the operation of a long distance 

14 route or routes must provide for a reduction in 

15 the annual operating subsidy to reflect the re16 duction in such expenses. 

17 ‘‘(3) ANNUAL DETERMINATION OF SUBSIDY.— 

18 On an annual basis, the Inspector General for the 

19 Department of Transportation shall analyze and ad20 vise the Secretary of Transportation as to the oper21 ating subsidy required on each long distance route 

22 operated by the American Passenger Railway Cor23 poration without competitive bid and the portion of 

24 the subsidy attributable to route and system-wide 

25 overhead expenses. 
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1 ‘‘(b) FEDERAL SHARE OF OPERATING LOSSES.— 

2 Pending restructuring of the long distance routes required 

3 by sections 106 through 108 of the Rail Passenger Service 

4 Restructuring, Reauthorization, and Development Act, the 

5 Federal share for an operating grant may be 100 percent 

6 of the qualifying operating subsidy for the route. 

7 ‘‘(c) COST-SHARING PROCESS FOR LONG DISTANCE

8 ROUTES.—Within 9 months after the date of enactment 

9 of the Rail Passenger Service Restructuring, Reauthoriza10 tion, and Development Act, the Secretary shall develop a 

11 process to facilitate State cost-sharing on long distance 

12 routes. The process shall— 

13 ‘‘(1) provide States the option of either— 

14 ‘‘(A) receiving Federal grants, managing 

15 the service, and selecting the train operator; or 

16 ‘‘(B) having the service managed by the 

17 Federal Government with a train operator se18 lected by the National Rail Passenger Corpora19 tion; 

20 ‘‘(2) include a methodology to assist States in21 terested in providing financial support in equitably 

22 allocating the share of a route’s required operating 

23 subsidy among the affected States; and 

24 ‘‘(3) be made available to the Long Distance 

25 Restructuring Commission established under section 
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1 106 of the Rail Passenger Service Restructuring, 

2 Reauthorization, and Development Act and the 

3 States to assist in the development of the restruc4 turing plan under that section. 

5 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated to the Secretary of 

7 Transportation to carry out this section— 

8 ‘‘(1) $550,000,000 for fiscal year 2006; 

9 ‘‘(2) $425,000,000 for fiscal year 2007; 

10 ‘‘(3) $375,000,000 for fiscal year 2008; 

11 ‘‘(4) $325,000,000 for fiscal year 2009; and 

12 ‘‘(5) $300,000,000 for fiscal year 2010.’’. 

13 (b) CONFORMING AMENDMENT.—The chapter anal14 ysis for chapter 243, as amended by section 104 of this 

15 Act, is amended by adding at the end the following: 

‘‘24317. Operating grants for long distance routes. 

16 SEC. 106. LONG DISTANCE ROUTE RESTRUCTURING COM17 MISSION. 

18 (a) ESTABLISHMENT.—There is established an inde19 pendent commission to be known as the Long Distance 

20 Route Restructuring Commission. 

21 (b) DUTY.— 

22 (1) IN GENERAL.—The Commission shall sub23 mit a plan to Congress for restructuring long dis24 tance intercity passenger rail routes in a manner 

25 that will reduce Federal operating subsidies on the 
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1 routes by at least 50 percent by the end of fiscal 

2 year 2010 (as compared to the operating subsidies 

3 for those routes for fiscal year 2003) by— 

4 (A) retaining routes that provide a unique 

5 service that can be contracted out by the Na6 tional Railroad Passenger Corporation on a for7 profit basis; 

8 (B) restructuring other routes as linked 

9 corridor routes between major metropolitan 

10 areas; and 

11 (C) consolidating or discontinuing service 

12 over remaining routes. 

13 (2) PRESERVATION OF NATIONAL NETWORK.— 

14 The restructuring plan submitted by the Commission 

15 shall ensure that no corridor route is completely iso16 lated from the rest of the intercity passenger rail 

17 network. 

18 (3) EXCEPTIONS.— 

19 (A) IN GENERAL.—A route will be ex20 cluded from consideration for restructuring, 

21 consolidation, or closure if a State or group of 

22 States commits, by contractual arrangement 

23 with the American Passenger Railway Corpora24 tion or another operator selected through a 

25 competitive process, to provide financial oper-
27 

•S2306 IS 

1 ating support at a level sufficient to offset at 

2 least 

3 (i) 30 percent of the operating subsidy 

4 for fiscal year 2007; 

5 (ii) 40 percent of the operating sub6 sidy for fiscal year 2008; and 

7 (iii) 50 percent of the operating sub8 sidy thereafter. 

9 (B) FAILURE OF SUPPORT.—If a State or 

10 group of States fails to provide the financial 

11 support to which it committed under this para12 graph, then service over the route shall be dis13 continued. 

14 (4) CONSULTATION REQUIRED.—In carrying 

15 out its duties, the Commission shall consult with the 

16 American Passenger Railway Corporation, State and 

17 local officials, freight railroads, companies with ex18 pertise in intercity passenger transportation, and 

19 other organizations with an interest in the restruc20 turing of the long distance train routes. 

21 (c) APPOINTMENT.— 

22 (1) The Commission shall be composed of 7 

23 members appointed by the President within 6 

24 months after the date of enactment of this Act. 
28 

•S2306 IS 

1 (2) The Commission members shall elect 1 

2 member to serve as Chairman. 

3 (d) TERMINATION.—The Commission shall terminate 

4 90 days after the Commission’s recommendations for con5 solidation and closure are submitted to Congress. 

6 (e) VACANCIES.—A vacancy on the Commission shall 

7 be filled in the same manner as the original appointment. 

8 (f) DETAILEES.—Upon the request of the Chairman 

9 of the Commission, the head of any Federal department 

10 or agency may detail personnel of that department or 

11 agency to the Commission to assist the Commission in car12 rying out its duties. 

13 (g) COMPENSATION; REIMBURSEMENT.—Members of 

14 the Commission shall serve without pay, but shall receive 

15 travel expenses, including per diem in lieu of subsistence, 

16 in accordance with sections 5702 and 5703 of title 5, 

17 United States Code. 

18 (h) OTHER AUTHORITY.— 

19 (1) The Commission may procure by contract, 

20 to the extent funds are available, the temporary or 

21 intermittent services of experts or consultants pursu22 ant to section 3109 of title 5, United States Code. 

23 (2) The Commission may lease space and ac24 quire personal property to the extent funds are 

25 available. 
29 

•S2306 IS 

1 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated for the use of the Com3 mission in carrying out its responsibilities under this sec4 tion for each of fiscal years 2005 and 2006, $4,000,000, 

5 such sums to remain available until expended. 

6 SEC. 107. CRITERIA FOR RESTRUCTURING. 

7 (a) RESTRUCTURING AS LINKED CORRIDORS.— 

8 (1) PREREQUISITE FOR RESTRUCTURING.—A 

9 long distance route or portion thereof may be rec10 ommended for restructuring as a linked corridor if— 

11 (A) the origin-to-destination travel time of 

12 each corridor link in the new route, at conven13 tional train speeds, including all station stops, 

14 will be competitive with other modes of trans15 portation; 

16 (B) each corridor link in the new route 

17 connects at least 2 major metropolitan areas or 

18 provides a link between 2 or more existing cor19 ridor routes; 

20 (C) the route as restructured can be rea21 sonably expected to attract at least 10 percent 

22 of the combined common carrier market in the 

23 markets served; 

24 (D) the projected cash operating loss of 

25 each of the restructured links does not exceed 
30 

•S2306 IS 

1 11 cents per passenger-mile on a fully allocated 

2 cost basis; and 

3 (E) by the end of fiscal year 2010 the Fed4 eral operating subsidy will be reduced by at 

5 least 50 percent (as compared to the operating 

6 subsidy for the route for fiscal year 2003), tak7 ing into account commitments by the affected 

8 States to provide financial support for the route 

9 so that no Federal operating subsidy is avail10 able for any portion of a route for which there 

11 is no such State commitment. 

12 (2) HOURS OF OPERATION.—In addition to the 

13 eligibility criteria in paragraph (1), any long dis14 tance routes recommended for restructuring as 

15 linked corridors shall be designed to operate between 

16 the hours of 6:00 a.m. and 11:00 p.m. 

17 (3) MODIFICATION OF ROUTES.—With the con18 currence of the affected States and the host railroad, 

19 the route and stations service by a restructured long 

20 distance route may be modified to improve ridership 

21 and financial performance. 

22 (4) NEW CAPITAL PLANS.—As part of the re23 structuring plan for reconfigured routes, the Com24 mission shall develop a capital plan, if additional 
31 

•S2306 IS 

1 capital is needed to reconfigure the route as linked 

2 corridors. 

3 (b) CONTRACTING-OUT OF PROFITABLE LONG DIS4 TANCE ROUTES AND SERVICES.—The Commission shall 

5 determine which long distance routes or services on such 

6 routes, including auto-ferry transportation, food service, 

7 and sleeping accommodations, could be contracted to a 

8 private operator on a for-profit basis. In making these de9 terminations, the Commission shall solicit expressions of 

10 interest from the private sector in operating long distance 

11 routes or services, including the conditions under which 

12 private companies may be interested in operating such 

13 services. 

14 (c) CONSOLIDATION AND CLOSURE.—The Commis15 sion shall make recommendations to Congress for consoli16 dating and closing long distance train routes or portions 

17 of routes that cannot be restructured under subsection (a) 

18 or contracted out under subsection (b), to reduce the Fed19 eral operating subsidy required by at least 50 percent by 

20 the end of fiscal year 2010 (as compared to the operating 

21 subsidies for those routes for fiscal year 2003), taking into 

22 consideration— 

23 (1) the operating loss on a fully allocated cost 

24 basis, including capital costs, of the route or portion 

25 thereof; 
32 

•S2306 IS 

1 (2) the extent to which train service is the only 

2 available public transportation to the cities and 

3 towns along the route or portion thereof; 

4 (3) whether an alternate route could signifi5 cantly reduce operating losses and capital require6 ments or increase ridership; 

7 (4) available capacity on the rights-of-way of 

8 the host railroad or railroads; and 

9 (5) commitments by the affected States to pro10 vide financial support for the route or portion there11 of. 

12 (d) COOPERATION OF AMERICAN PASSENGER RAIL13 WAY CORPORATION.— 

14 (1) The American Passenger Railway Corpora15 tion shall cooperate and comply, subject to the 

16 agreement of the Commission to protect the con17 fidentiality of proprietary information, with all re18 quests for financial, marketing, and other informa19 tion about the routes under consideration by the 

20 Commission. 

21 (2) The Secretary of Transportation may with22 hold all or part of an operating or capital grant to 

23 the Corporation if the Secretary determines the 

24 American Passenger Railway Corporation is not co-
33 

•S2306 IS 

1 operating with the Commission as required by this 

2 subsection. 

3 (e) REPORT.—The Commission shall submit its rec4 ommendations for restructuring the long distance routes 

5 to the Senate Committee on Commerce, Science, and 

6 Transportation and the House of Representatives Com7 mittee on Transportation and Infrastructure within 18 

8 months after the date of enactment of this Act. The report 

9 shall include a description of— 

10 (1) the analysis performed by the Commission 

11 to reach its conclusions; 

12 (2) options considered in the development of a 

13 restructuring plan; and 

14 (3) the impact of the restructuring on employ15 ees of the American Passenger Railway Corporation 

16 for any long distance route restructured under this 

17 section. 

18 SEC. 108. IMPLEMENTATION OF RESTRUCTURING PLAN. 

19 (a) IN GENERAL.—The Secretary of Transportation 

20 shall implement the restructuring plan submitted to Con21 gress by the Long Distance Route Restructuring Commis22 sion in its report pursuant to section 106 unless a joint 

23 resolution is enacted by the Congress disapproving such 

24 recommendations of the Commission before the earlier 

25 of— 
34 

•S2306 IS 

1 (1) the end of the 60-day period beginning on 

2 the date the Commission submits its report to Con3 gress; or 

4 (2) the adjournment of Congress sine die for 

5 the session during which such report is submitted. 

6 (b) CERTAIN DAYS DISREGARDED.—For purposes of 

7 subsection (a), the days on which either House of Con8 gress is not in session because of an adjournment of more 

9 than 4 days to a day certain shall be excluded in the com10 putation of a period. 

11 (c) 1-YEAR IMPLEMENTATION PERIOD.—Unless dis12 approved under section (a), the Secretary of Transpor13 tation shall fully implement the plan within 1 year after 

14 the date on which the period described in subsection (a) 

15 expires. 

16 SEC. 109. REDEMPTION OF COMMON STOCK. 

17 (a) VALUATION.—The Secretary of Transportation 

18 shall arrange, at the National Railroad Passenger Cor19 poration’s expense, for a valuation of all Amtrak assets 

20 and liabilities with an estimated value in excess of 

21 $1,000,000 as of the date of enactment of this Act by the 

22 Secretary of the Treasury, or by a contractor selected by 

23 the Secretary of the Treasury. The valuation shall be con24 ducted in accordance with the Uniform Standards of Pro25 fessional Appraisal Practice of the Appraisal Foundation’s 
35 

•S2306 IS 

1 Appraisal Standards Board and shall be completed within 

2 1 year after the date of enactment of this Act. 

3 (b) REDEMPTION.— 

4 (1) Prior to the transfer of assets to the Sec5 retary directed by section 110 of this Act, and with6 in 3 months after the completion of the valuation 

7 under subsection (a), the National Railroad Pas8 senger Corporation shall redeem all common stock in 

9 Amtrak issued prior to the date of enactment of this 

10 Act at the fair market value of such stock, based on 

11 the valuation performed under subsection (a). 

12 (2) No provision of this Act, or amendments 

13 made by this Act, provide to the owners of the com14 mon stock a priority over holders of indebtedness or 

15 other stock of Amtrak. 

16 (c) ACQUISITION THROUGH EMINENT DOMAIN.—In 

17 the event that the National Railroad Passenger Corpora18 tion and the owners of the Amtrak common stock have 

19 not completed the redemption of such stock within 3 

20 months after the completion of the valuation under sub21 section (a), the National Railroad Passenger Corporation 

22 shall exercise its right of eminent domain under section 

23 24311 of title 49, United States Code, to acquire that 

24 stock. The value assigned to the common stock under sub25 section (a) shall be deemed to constitute just compensa-
36 

•S2306 IS 

1 tion except to the extent that the owners of the common 

2 stock demonstrate that the valuation is less than the con3 stitutional minimum value of the stock. 

4 (d) AMENDMENT OF SECTION 24311.—Section 

5 24311(a)(1) is amended— 

6 (1) by striking ‘‘or’’ at the end of subparagraph 

7 (A); 

8 (2) by striking ‘‘Amtrak.’’ in subparagraph (B) 

9 and inserting ‘‘Amtrak; or’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(C) necessary to redeem Amtrak’s com12 mon stock from any holder thereof, including a 

13 rail carrier.’’. 

14 (e) CONVERSION OF PREFERRED STOCK TO COM15 MON.— 

16 (1) Subsequent to the redemption of the com17 mon stock in the corporation issued prior to the date 

18 of enactment of this Act, the Secretary of Transpor19 tation shall convert the one share of the preferred 

20 stock of the corporation retained under section 110 

21 of this Act for 10 shares of common stock in the 

22 National Railroad Passenger Corporation. 

23 (2) The National Railroad Passenger Corpora24 tion may not issue any other common stock, and 
37 

•S2306 IS 

1 may not issue preferred stock, without the express 

2 written consent of the Secretary. 

3 (f) TERMINATION OF SECTION 24907 NOTE AND

4 MORTGAGE AUTHORITY.—Section 24907 is amended by 

5 adding at the end the following: 

6 ‘‘(d) TERMINATION OF AUTHORITY.—The authority 

7 of the Secretary to obtain a note of indebtedness from, 

8 and make a mortgage agreement with, the American Pas9 senger Railway Corporation under subsection (a) is termi10 nated as of the date of the transfer of assets under section 

11 110 of the Rail Passenger Service Restructuring, Reau12 thorization, and Development Act.’’. 

13 SEC. 110. RETIREMENT OF PREFERRED STOCK; TRANSFER 

14 OF ASSETS. 

15 (a) TRANSFER.—Not later than 30 days after the re16 demption or acquisition of stock under section 109 of this 

17 Act, the National Railroad Passenger Corporation shall, 

18 in return for the consideration specified in subsection (c), 

19 transfer to the Secretary of Transportation title to— 

20 (1) the portions of the Northeast Corridor cur21 rently owned or leased by the Corporation as well as 

22 any improvements made to these assets, including 

23 the rail right-of-way, stations, track, signal equip24 ment, electric traction facilities, bridges, tunnels, re25 pair facilities, and all other improvements owned by 
38 

•S2306 IS 

1 the Corporation between Boston, Massachusetts, and 

2 Washington, District of Columbia (including the 

3 route through Springfield, Massachusetts, and the 

4 routes to Harrisburg, Pennsylvania, and Albany, 

5 New York, from the Northeast Corridor mainline); 

6 (2) Chicago Union Station and rail-related as7 sets in the Chicago Metropolitan area; and 

8 (3) all other track and right-of-way, stations, 

9 repair facilities, and other real property owned or 

10 leased by the Corporation. 

11 (b) EXISTING ENCUMBRANCES.— 

12 (1) ASSUMPTION BY FEDERAL GOVERNMENT.— 

13 Any outstanding debt on the mainline of the North14 east Corridor (other than debt associated with roll15 ing stock) shall become a debt obligation of the 

16 United States as of the date of transfer of title 

17 under subsection (a)(1). 

18 (2) RESTRUCTURING.—Except as provided in 

19 paragraph (1), the obligation of the American Pas20 senger Railway Corporation or its successors or as21 signs to repay in full any indebtedness to the United 

22 States incurred since January, 1990, is not affected 

23 by this Act or an amendment made by this Act. 
39 

•S2306 IS 

1 (c) CONSIDERATION.—In consideration for the assets 

2 transferred to the United States under subsection (a), the 

3 Secretary shall— 

4 (1) deliver to the National Passenger Railroad 

5 Corporation all but one share of the preferred stock 

6 of the corporation held by the Secretary and forgive 

7 the corporation’s legal obligation to pay any divi8 dends, including accrued but unpaid dividends as of 

9 the date of transfer, evidenced by the preferred 

10 stock certificates; and 

11 (2) release the National Railroad Passenger 

12 Corporation from all mortgages and liens held by the 

13 Secretary that were in existence on January 1, 

14 1990. 

15 (d) AGREEMENT.—Prior to accepting title to the as16 sets transferred under this section, the Secretary shall 

17 enter into a contract with American Passenger Railway 

18 Corporation under which American Passenger Railway 

19 Corporation will exercise care, custody, maintenance, and 

20 operational control of the assets to be transferred. The 

21 term of the contract shall be for 1 year, which shall be 

22 renewed annually without action on the part of either 

23 party unless canceled by either party with 90 days notice. 

24 (e) FURTHER TRANSFERS.— 
40 

•S2306 IS 

1 (1) The Secretary may, for appropriate consid2 eration, transfer title to all or part of Chicago Union 

3 Station and rail-related assets in the Chicago metro4 politan area acquired under this section to a regional 

5 public transportation agency that has significant op6 erations in Chicago Union Station on the date of en7 actment of this Act. 

8 (2) The Secretary may, for appropriate consid9 eration, transfer to the underlying States title to 

10 real estate properties owned by the Corporation be11 tween Boston, Massachusetts, and Washington, Dis12 trict of Columbia, that constitute the route through 

13 Springfield, Massachusetts, and the routes to Har14 risburg, Pennsylvania, and Albany, New York, from 

15 the Northeast Corridor mainline. 

16 (3) The Secretary may, for appropriate consid17 eration, transfer title to all or part of the assets ac18 quired under subsection (a)(3) to a State, a public 

19 agency, a railroad, or other entity deemed appro20 priate by the Secretary. 

21 (f) USE OF PROCEEDS.—Notwithstanding section 

22 3302 of title 31, United States Code, any proceeds from 

23 the transfer of the assets described subsection (e) shall 

24 be credited as off-setting collections to the account that 

25 finances debt and interest payments to the American Pas-
41 

•S2306 IS 

1 senger Railway Corporation. Funds available for corridor 

2 development under chapter 244 of title 49, United States 

3 Code, shall be increased by an amount equal to the 

4 amounts credited under the preceding sentence. 

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

6 (a) IN GENERAL.—Within 3 years after the date of 

7 enactment of this Act, the Secretary of Transportation 

8 shall transfer all stations, track, and other fixed facilities 

9 outside the Northeast Corridor mainline to which the Sec10 retary has assumed title under section 110 of this Act, 

11 other than equipment repair facilities, to States, munici12 palities, railroads, or other entities for maximum consider13 ation. 

14 (b) USE OF PROCEEDS.—Notwithstanding section 

15 3302 of title 31, United States Code, any proceeds from 

16 the transfer of assets under this section shall be credited 

17 as off-setting collections to the account that finances debt 

18 and interest payments to the American Passenger Railway 

19 Corporation. Funds available for corridor development 

20 under chapter 244 of title 49, United States Code, shall 

21 be increased by an amount equal to the amounts credited 

22 under the preceding sentence. 
42 

•S2306 IS 

1 Subtitle B—Northeast Corridor 

2 SEC. 131. INTERSTATE COMPACT FOR THE NORTHEAST 

3 CORRIDOR. 

4 (a) CONSENT TO COMPACT.— 

5 (1) IN GENERAL.—The States and the District 

6 of Columbia that constitute the Northeast Corridor, 

7 as defined in section 24102 of title 49, United 

8 States Code, may enter into a multistate compact, 

9 not in conflict with any other law of the United 

10 States, to be known as the Northeast Corridor Com11 pact, to manage railroad operations and rail service 

12 and conduct related activities on the Northeast Cor13 ridor mainline between Boston, Massachusetts, and 

14 Washington, District of Columbia. 

15 (2) CONGRESSIONAL APPROVAL REQUIRED.— 

16 The Northeast Corridor Compact shall be submitted 

17 to Congress for its consent. It is the sense of the 

18 Congress that rapid consent to the Compact is a pri19 ority matter for the Congress. 

20 (b) COMPACT COMMISSION.— 

21 (1) IN GENERAL.—There is hereby established 

22 a commission to be known as the Northeast Corridor 

23 Compact Commission. The Commission shall be 

24 composed of— 
43 

•S2306 IS 

1 (A) 2 members (or their designees), to be 

2 selected by the Secretary of Transportation; 

3 (B) 2 members (or their designees), to be 

4 selected by agreement of— 

5 (i) the governors of Maryland, Dela6 ware, Pennsylvania, New Jersey, New 

7 York, Connecticut, Rhode Island, and Mas8 sachusetts (hereinafter referred to as the 

9 ‘‘participating States’’); and 

10 (ii) the mayor of the District of Co11 lumbia; and 

12 (C) 1 member to be selected by the 4 

13 members selected under subparagraphs (A) and 

14 (B). 

15 (2) ADMINISTRATIVE PROVISIONS.— 

16 (A) Members of the Commission shall be 

17 appointed for the life of the Commission. 

18 (B) A vacancy in the Commission shall be 

19 filled in the manner in which the original ap20 pointment was made. 

21 (C) Members shall serve without pay but 

22 shall receive travel expenses, including per diem 

23 in lieu of subsistence, in accordance with sec24 tions 5702 and 5703 of title 5, United States 

25 Code. 
44 

•S2306 IS 

1 (D) The Chairman of the Commission shall 

2 be elected by the members. 

3 (E) The Commission may appoint and fix 

4 the pay of such personnel as it considers appro5 priate. 

6 (F) Upon the request of the Commission, 

7 the head of any department or agency of the 

8 United States may detail, on a reimbursable 

9 basis, any of the personnel of that department 

10 or agency to the Commission to assist it in car11 rying out its duties under this section. 

12 (G) Upon the request of the Commission, 

13 the Administrator of General Services shall pro14 vide to the Commission, on a reimbursable 

15 basis, the administrative support services nec16 essary for the Commission to carry out its re17 sponsibilities under this section. 

18 (c) FUNCTIONS.—The Commission shall prepare for 

19 the consideration of and adoption by participating States, 

20 the District of Columbia, and the Secretary of Transpor21 tation an interstate compact that provides for— 

22 (1) full authority for 99 years to succeed to the 

23 responsibilities of the National Railroad Passenger 

24 Corporation as manager of the Northeast Corridor, 

25 subject to the provisions of a lease from the Depart-
45 

•S2306 IS 

1 ment of Transportation, including responsibility 

2 for— 

3 (A) Corridor maintenance and improve4 ment; 

5 (B) the operation of intercity passenger 

6 rail service; 

7 (C) making arrangements for operation of 

8 freight railroad operations and commuter oper9 ations; 

10 (D) the use of the Corridor for non-rail 

11 purposes; and 

12 (E) the Northeast Corridor financial oper13 ations; 

14 (2) execution of a lease of the Northeast Cor15 ridor from the Department of Transportation, for a 

16 period of 99 years, subject to appropriate provisions 

17 protecting the lessor’s interests, including reversion 

18 of all lease interests to the lessor in the event the 

19 lessee fails to meet its financial obligations or other20 wise assume financial responsibility for Northeast 

21 Corridor functions; and 

22 (3) participation by the Department of Trans23 portation, as the non-voting representative of the 

24 United States. 

25 (d) FINAL COMPACT PROPOSAL.— 
46 

•S2306 IS 

1 (1) The Commission shall submit a final com2 pact proposal to participating States, the District of 

3 Columbia, and the Federal Government not later 

4 than 18 months after the date of enactment of this 

5 Act. 

6 (2) The Commission shall terminate on the 

7 180th day following the date of transmittal of the 

8 final compact proposal under this subsection. 

9 (e) GOVERNANCE AND FUNDING REQUIREMENTS

10 FOR COMPACT.— 

11 (1) The governance provisions of the compact 

12 shall provide a mechanism to ensure voting represen13 tation for the participating States and the District 

14 of Columbia and for non-voting representation for 

15 the Secretary of Transportation and a freight rail16 road that conducts operations on the Northeast Cor17 ridor as ex officio members participating in all Com18 pact affairs. 

19 (2) The provisions of the compact shall estab20 lish the financial obligations of each compact mem21 ber and shall provide for each member’s manage22 ment of rail services in the Northeast Corridor. 

23 (f) FEDERAL INTEREST REQUIREMENTS FOR COM24 PACT.—The provisions of the Compact shall hold the 

25 United States Government harmless as to the actions of 
47 

•S2306 IS 

1 the Compact under the lease of rights to the Northeast 

2 Corridor by the United States Government. 

3 (g) COMPACT BORROWING AUTHORITY.— 

4 (1) The borrowing authority provisions of the 

5 Compact may authorize it to issue bonds or other 

6 debt instruments from time to time at its discretion 

7 for purposes that include paying any part of the cost 

8 of rail service improvements, construction, and reha9 bilitation and the acquisition of real and personal 

10 property, including operating equipment, except that 

11 debt issued by the Compact may be secured only by 

12 revenues to the Compact and may not be a debt of 

13 a participating State, the District of Columbia, or 

14 the Federal Government. 

15 (2) The debt authorized by this subsection shall 

16 under no circumstances be backed by the full faith 

17 and credit of the United States, and a grant made 

18 under the authority of this Act or under the author19 ity of part C of subtitle V of title 49, United States 

20 Code, shall include an express acknowledgement by 

21 the grantee that the debt does not constitute an obli22 gation of the United States. 

23 (h) ADOPTION OF COMPACT; TURNOVER.— 

24 (1) IN GENERAL.—The participating States and 

25 the District of Columbia shall adopt a final compact 
48 

•S2306 IS 

1 agreement within 5 years after the date of enact2 ment of this Act, and the Compact shall thereafter 

3 assume responsibility for the Northeast Corridor op4 erations on a date that is not later than 6 months 

5 after adoption of the Compact. 

6 (2) OPERATIONS.—Upon leasing the Northeast 

7 Corridor to the Compact, the Secretary shall assign 

8 to the Compact and the Compact shall assume the 

9 then-current contract for operation of the Northeast 

10 Corridor. Upon the termination of that contract, the 

11 Compact may make such arrangements for operation 

12 of the Northeast Corridor as it sees fit consistent 

13 with its lease and this Act. If the Compact chooses 

14 to use a contractor other than the American Pas15 senger Railway Corporation to operate trains on the 

16 Northeast Corridor, the contract shall be awarded 

17 competitively. 

18 (3) MAINTENANCE.—Upon leasing the North19 east Corridor to the Compact, the Secretary shall as20 sign to the Compact and the Compact shall assume 

21 the then-current contract for maintenance of the 

22 Northeast Corridor. Upon the termination of that 

23 contract, the Compact may make such arrangements 

24 for maintenance of the Northeast Corridor as it sees 

25 fit consistent with its lease and this Act. If the Com-
49 

•S2306 IS 

1 pact chooses to use a contractor other than the 

2 American Passenger Railway Corporation to main3 tain the Northeast Corridor and provide related 

4 services, the contract shall be awarded competitively. 

5 (4) NON-COMPACT ALTERNATIVE.—If the par6 ticipating States and the District of Columbia do not 

7 adopt the final compact agreement and make it 

8 operational under the schedule set forth in this sec9 tion, the Secretary of Transportation, through a 

10 competitive bidding process, shall contract with an11 other public or private entity to manage the North12 east Corridor, with a goal of maximizing the return 

13 to the Federal government from such operations. 

14 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to the Secretary of 

16 Transportation to carry out this section— 

17 (1) $3,000,000 for fiscal year 2005, and 

18 (2) $2,000,000 for fiscal year 2006, 

19 such sums to remain available until expended. 

20 SEC. 132. SHUT-DOWN OF COMMUTER OR FREIGHT OPER21 ATIONS. 

22 (a) IN GENERAL.—Section 11123 is amended by 

23 striking ‘‘National Railroad Passenger Corporation’’ each 

24 place it appears and inserting ‘‘American Passenger Rail25 way Corporation’’. 
50 

•S2306 IS 

1 (b) AUTHORIZATION OF APPROPRIATIONS.—From 

2 the funds made available for the American Passenger Rail3 way Corporation for fiscal years 2005 through 2010, the 

4 Secretary of Transportation shall in each fiscal year hold 

5 in reserve from the amounts authorized by section 

6 24402(g) of title 49, United States Code, such sums as 

7 may be necessary to carry out directed service orders 

8 issued under section 1123 of title 49, United States Code, 

9 to respond to the shut-down of commuter rail operations 

10 or freight operations due to a shut-down of operations by 

11 the American Passenger Railway Corporation. The Sec12 retary shall make the reserved funds available through an 

13 appropriate grant instrument during the fourth quarter 

14 of each fiscal year to the extent that no grant orders have 

15 been issued by the Surface Transportation Board during 

16 that fiscal year prior to the date of transfer of the reserved 

17 funds or there is a balance of reserved funds not needed 

18 by the Board to pay for any directed service order in that 

19 fiscal year. 

20 (c) EFFECTIVE DATE FOR SUBSECTION (a).—The 

21 amendment made by subsection (a) shall take effect on 

22 the date, determined by the Secretary of Transportation, 

23 on which the restructuring required by sections 24300 of 

24 title 49, United States Code, is completed. 
51 

•S2306 IS 

1 SEC. 133. CAPITAL GRANTS FOR NORTHEAST CORRIDOR. 

2 (a) IN GENERAL.—Chapter 243, as amended by sec3 tion 105, is amended by adding at the end the following: 

4 ‘‘§ 24318. Capital authorizations for the Northeast 

5 Corridor 

6 ‘‘(a) IN GENERAL.—The Secretary of Transpor7 tation, in consultation with the American Passenger Rail8 way Corporation, shall develop and implement a capital 

9 program to restore the mainline of the Northeast Corridor 

10 between Boston, Massachusetts, and Washington, District 

11 of Columbia, to a state of good repair, as defined by the 

12 Secretary. 

13 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS FOR CAP14 ITAL PROJECTS ON THE NORTHEAST CORRIDOR.—There 

15 are authorized to be appropriated to the Secretary of 

16 Transportation to make capital grants under this section 

17 $200,000,000 for fiscal year 2005 and $300,000,000 for 

18 each of fiscal years 2006 through 2010. 

19 ‘‘(c) ACHIEVEMENT OF STATE-OF-GOOD-REPAIR ON

20 NORTHEAST CORRIDOR.— 

21 ‘‘(1) USE OF FUNDS.—Sums authorized for the 

22 Northeast Corridor under subsection (b) may be 

23 used solely for the purpose of funding deferred 

24 maintenance and safety projects, including the nego25 tiated Federal share for life-safety improvements in 

26 the New York Penn Station tunnels. 
52 

•S2306 IS 

1 ‘‘(2) STATE OF GOOD REPAIR.—The Northeast 

2 Corridor shall be considered to be in a state of good 

3 repair upon the completion of the capital program 

4 developed under subsection (a).’’. 

5 (b) CONFORMING AMENDMENT.—The chapter anal6 ysis for chapter 243, as amended by section 105, is 

7 amended by adding at the end thereof the following: 

‘‘24318. Capital authorizations for the Northeast Corridor.’’. 

8 Subtitle C—Related Matters 

9 SEC. 151. FAIR AND OPEN COMPETITION. 

10 (a) IN GENERAL.—The Secretary of Transportation 

11 shall consult with States that competitively bid intercity 

12 passenger rail services to ensure their bidding practices 

13 provide for fair and open competition for all bidders, in14 cluding the American Passenger Railway Corporation. The 

15 Secretary may withhold all or a portion of a grant under 

16 this Act if the Secretary determines that the State’s bid17 ding processes do not treat all competitors fairly. 

18 (b) USE OF FEDERAL OR STATE FUNDS.—The Sec19 retary shall ensure that the American Passenger Railway 

20 Corporation may not use Federal or State financial sup21 port for a passenger rail route to subsidize a competitive 

22 bid to operate intercity passenger rail service on another 

23 route. 
53 

•S2306 IS 

1 SEC. 152. ACCESS TO OTHER RAILROADS. 

2 (a) TERMS AND CONDITIONS FOR ACCESS TO OTHER

3 RAILROADS.— 

4 (1) EXISTING ROUTES AND FREQUENCIES.— 

5 (A) IN GENERAL.—The National Railroad 

6 Passenger Corporation shall be responsible for 

7 negotiating the terms and conditions under 

8 which— 

9 (i) the American Passenger Railway 

10 Corporation, a State, or other entity may 

11 access the property of a rail carrier to pro12 vide intercity passenger rail service over 

13 routes operated by Amtrak on the day be14 fore the date, determined by the Secretary 

15 of Transportation, on which the restruc16 turing required by sections 24300 of title 

17 49, United States Code, is completed at 

18 the frequencies in effect on that day; and 

19 (ii) the American Passenger Railway 

20 Corporation, freight railroads, commuter 

21 authorities, and other entities may obtain 

22 access to property owned by the United 

23 States Government to provide intercity, 

24 commuter, freight rail and other services, 

25 except that the National Railroad Pas26 senger Corporation shall delegate its au-
54 

•S2306 IS 

1 thority under this clause to the interstate 

2 compact authorized by section 131 after 

3 that compact has been adopted. 

4 (B) PRESERVATION OF RAILROAD BENE5 FITS.—The access and liability terms and con6 ditions of the contracts between the National 

7 Railroad Passenger Corporation and other rail 

8 carriers following the restructuring required by 

9 section 24300 of title 49, United States Code, 

10 shall be no less favorable to the railroads than 

11 the access and liability terms and conditions 

12 under contracts in effect on the day before the 

13 date, as so determined by the Secretary, on 

14 which the restructuring is completed. 

15 (C) INCENTIVE PAYMENTS; PENALTIES.— 

16 The National Railroad Passenger Corporation 

17 shall retain a system of incentive payments and 

18 performance penalties in negotiating compensa19 tion payments to other rail carriers under sub20 paragraph (A) that encourages on-time per21 formance. 

22 (3) CONDITIONS FOR NEW ROUTES AND TRAIN

23 FREQUENCIES.— 

24 (A) IN GENERAL.—The terms and condi25 tions for the operation of a new intercity pas-
55 

•S2306 IS 

1 senger rail route or frequency added after the 

2 date of enactment of this Act shall, except for 

3 the rental charge compensation to another rail 

4 carrier, be determined by negotiation and mu5 tual agreement between the host railroad and 

6 the operator or sponsor of the route or fre7 quency to be added. 

8 (B) STANDARD OF COMPENSATION.—The 

9 standard of compensation for the rental change 

10 shall be fully allocated costs, excluding capital 

11 investments associated with an added route or 

12 frequency, when the on-time performance of the 

13 new route or train frequency meets or exceeds 

14 95 percent of the goal set by the parties, net of 

15 delays not within the host railroad’s control. 

16 (C) FAILURE OF NEGOTIATION.—If the 

17 parties cannot agree on the terms of the rental 

18 charge, either party may petition the Surface 

19 Transportation Board to prescribe the terms 

20 under section 24308 of title 49, United States 

21 Code. 

22 (b) FITNESS QUALIFICATIONS FOR PASSENGER

23 RAIL.— 

24 (1) IN GENERAL.—No person may operate 

25 intercity passenger rail service unless that person 
56 

•S2306 IS 

1 demonstrates to the satisfaction of the Secretary of 

2 Transportation that— 

3 (A) its intercity passenger rail operations 

4 will meet all applicable Federal safety rules and 

5 regulations; 

6 (B) it will operate the service on a sound 

7 financial basis; and 

8 (C) it has the technical expertise to oper9 ate intercity passenger rail service. 

10 (2) MINIMUM STANDARDS.—Within 6 months 

11 after the date of enactment of this Act, the Sec12 retary of Transportation shall by regulation estab13 lish minimum safety and financial qualifications for 

14 operators of intercity passenger rail service. 

15 SEC. 153. LIMITATIONS ON RAIL PASSENGER TRANSPOR16 TATION LIABILITY. 

17 Section 28103 is amended by striking ‘‘Amtrak shall 

18 maintain a total’’ in subsection (c) and inserting ‘‘each 

19 operator of intercity passenger rail service shall main20 tain’’. 

21 SEC. 154. TRAIN OPERATIONS INSURANCE POOL. 

22 (a) IN GENERAL.—Chapter 281 is amended by add23 ing at the end the following: 
57 

•S2306 IS 

1 ‘‘§ 28104. Train operations insurance pool 

2 ‘‘(a) IN GENERAL.—The Secretary of Transportation 

3 is authorized to encourage and otherwise assist insurance 

4 companies and other insurers that meet the requirements 

5 prescribed under subsection (b) of this section to form, 

6 associate, or otherwise join together in a pool— 

7 ‘‘(1) to provide the insurance coverage required 

8 by section 28103; and 

9 ‘‘(2) for the purpose of assuming, on such 

10 terms and conditions as may be agreed upon, such 

11 financial responsibility as will enable such companies 

12 and other insurers to assume a reasonable propor13 tion of responsibility for the adjustment and pay14 ment of claims under section 28103. 

15 ‘‘(b) REGULATIONS TO ESTABLISH INSURER QUALI16 FICATION REQUIREMENTS.—In order to promote the ef17 fective administration of the intercity rail passenger pro18 gram, and to assure that the objectives of this chapter 

19 are furthered, the Secretary is authorized to prescribe re20 quirements for insurance companies and other insurers 

21 participating in an insurance pool under subsection (a), 

22 including minimum requirements for capital or surplus or 

23 assets. 

24 ‘‘(c) AUTHORITY TO COLLECT AND PAY PREMIUMS

25 AND OTHER COSTS.—In order to provide adequate insur26 ance coverage at affordable cost to operators of intercity 
58 

•S2306 IS 

1 passenger rail service at no cost to the United States, the 

2 Secretary is authorized to divide the insurance premiums 

3 and all other costs of forming and operating the insurance 

4 pool created pursuant to this section, including the costs 

5 of any contractors or consultants the Secretary may hire, 

6 among all the operators of intercity passenger rail service 

7 (including the American Passenger Railway Corporation) 

8 and collect from each operator of intercity passenger rail 

9 service the insurance premiums and other costs the Sec10 retary has allocated to it. Notwithstanding any other pro11 vision of law, the Secretary may receive funds collected 

12 under this section directly from each operator of intercity 

13 passenger rail service, credit the appropriation charged for 

14 the insurance premiums and other costs of forming and 

15 operating the insurance pool, and use those funds to pay 

16 insurance premiums and other costs of forming and oper17 ating the insurance pool, including the costs of any con18 tractors or consultants the Secretary may hire. The Sec19 retary may advance such sums as may be necessary to 

20 pay insurance premiums and other costs of forming and 

21 operating the insurance pool from unobligated balances 

22 available to the Federal Railroad Administration for inter23 city passenger rail service, to be reimbursed from pay24 ments received from operators of intercity passenger rail 

25 service. Where the Secretary is making a grant of oper-
59 

•S2306 IS 

1 ating funds for a route, the Secretary may collect the in2 surance premiums and other costs the Secretary has allo3 cated to it by withholding those funds from the grant and 

4 crediting them to the appropriation charged for the insur5 ance premiums and other costs of forming and operating 

6 the insurance pool. 

7 ‘‘§ 28105. Use of insurance pool, companies, or other 

8 private organizations for certain pay9 ments 

10 ‘‘(a) AUTHORIZATION TO ENTER INTO CONTRACTS

11 FOR CERTAIN RESPONSIBILITIES.—The Secretary of 

12 Transportation may enter into contracts with the pool 

13 formed or otherwise created under section 28104, or any 

14 insurance company or other private organizations, for the 

15 purpose of securing performance by such pool, company, 

16 or organization of any or all of the following responsibil17 ities: 

18 ‘‘(1) Estimating and later determining any 

19 amounts of payments to be made from the pool. 

20 ‘‘(2) Receiving from the Secretary, disbursing, 

21 and accounting for payments of insurance pre22 miums. 

23 ‘‘(3) Making such audits of the records of any 

24 insurance company or other insurer, insurance agent 

25 or broker, or insurance adjustment organization as 
60 

•S2306 IS 

1 may be necessary to assure that proper payments 

2 are made. 

3 ‘‘(4) Otherwise assisting in such manner as the 

4 contract may provide to further the purposes of this 

5 chapter. 

6 ‘‘(b) TERMS AND CONDITIONS OF CONTRACT.—Any 

7 contract with the pool or an insurance company or other 

8 private organization under this section may contain such 

9 terms and conditions as the Secretary finds necessary or 

10 appropriate for carrying out responsibilities under sub11 section (a) of this section, and may provide for payment 

12 of any costs which the Secretary determines are incidental 

13 to carrying out such responsibilities which are covered by 

14 the contract. 

15 ‘‘(c) COMPETITIVE BIDDING.—Any contract entered 

16 into under subsection (a) of this section may be entered 

17 into without regard to section 5 of title 41 or any other 

18 provision of law requiring competitive bidding. 

19 ‘‘(d) FINDINGS OF SECRETARY.—No contract may be 

20 entered into under this section unless the Secretary finds 

21 that the pool, company, or organization will perform its 

22 obligations under the contract efficiently and effectively, 

23 and will meet such requirements as to financial responsi24 bility, legal authority, and other matters as the Secretary 

25 finds pertinent. 
61 

•S2306 IS 

1 ‘‘(e) TERM OF CONTRACT; RENEWALS; TERMI2 NATION.—Any contract entered into under this section 

3 shall be for a term of 1 year, and may be made automati4 cally renewable from term to term in the absence of notice 

5 by either party of an intention to terminate at the end 

6 of the current term; except that the Secretary may termi7 nate any such contract at any time (after reasonable no8 tice to the pool, company, or organization involved) if the 

9 Secretary finds that the pool, company, or organization 

10 has failed substantially to carry out the contract, or is car11 rying out the contract in a manner inconsistent with the 

12 efficient and effective administration of the intercity rail 

13 passenger program.’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) Chapter 281 is amended by striking ‘‘LAW 

16 ENFORCEMENT’’ in the chapter heading and in17 serting ‘‘LAW ENFORCEMENT; LIABILITY; IN18 SURANCE’’. 

19 (2) The part analysis of subtitle V is amended 

20 by striking the item relating to chapter 281 and in21 serting the following: 

‘‘281. Law enforcement; liability; insurance ....................................... 28101’’. 

22 (3) The table of contents of the title is amended 

23 by striking the item relating to chapter 281 and in24 serting the following: 

‘‘281. Law enforcement; liability; insurance ....................................... 28101’’. 
62 

•S2306 IS 

1 (4) The chapter analysis for chapter 281 is 

2 amended by adding at the end the following: 

‘‘28104. Train operations insurance pool. 

‘‘28105. Use of insurance pool, companies, or other private organizations for 

certain payments.’’. 

3 SEC. 155. COLLECTIVE BARGAINING ARRANGEMENTS. 

4 (a) STATUS AS EMPLOYER OR CARRIER.— 

5 (1) IN GENERAL.—Any entity providing inter6 city passenger railroad transportation (within the 

7 meaning of section 20102 of title 49, United States 

8 Code) that begins operations after the date of enact9 ment of this Act shall be considered an employer for 

10 purposes of the Railroad Retirement Act of 1974 

11 (45 U.S.C. 231 et seq.) and considered a carrier for 

12 purposes of the Railway Labor Act (45 U.S.C. 151 

13 et seq.). 

14 (2) COLLECTIVE BARGAINING AGREEMENT.— 

15 Any entity providing intercity passenger railroad 

16 transportation (within the meaning of section 20102 

17 of title 49, United States Code) that begins oper18 ations after the date of enactment of this Act and 

19 replaces intercity rail passenger service that was 

20 provided by another entity as of the date of enact21 ment of this Act, shall enter into an agreement with 

22 the authorized bargaining agent or agents for em23 ployees of the predecessor provider that— 
63 

•S2306 IS 

1 (A) gives each employee of the predecessor 

2 provider priority in hiring according to the em3 ployee’s seniority on the predecessor provider 

4 for each position with the replacing entity that 

5 is in the employee’s craft or class and is avail6 able within three years after the termination of 

7 the service being replaced; 

8 (B) establishes a procedure for notifying 

9 such an employee of such positions; 

10 (C) establishes a procedure for such an 

11 employee to apply for such positions; and 

12 (D) establishes rates of pay, rules, and 

13 working conditions. 

14 (3) REPLACEMENT OF EXISTING RAIL PAS15 SENGER SERVICE.— 

16 (A) NEGOTIATIONS.—An entity providing 

17 replacement intercity rail passenger service 

18 under paragraph (2) shall give written notice of 

19 its plan to replace existing rail passenger serv20 ice to the authorized collective bargaining agent 

21 or agents for the employees of the predecessor 

22 provider at least 90 days prior to the date it 

23 plans to commence service. Within 5 days after 

24 the date of receipt of such written notice, nego25 tiations between the replacing entity and the 
64 

•S2306 IS 

1 collective bargaining agent or agents for the 

2 employees of the predecessor provider shall 

3 commence for the purpose of reaching agree4 ment with respect to all matters set forth in 

5 subparagraphs (A) through (D) of paragraph 

6 (2). The negotiations shall continue for 30 days 

7 or until an agreement is reached, whichever is 

8 sooner. If at the end of 30 days the parties 

9 have not entered into an agreement with re10 spect to all such matters, the unresolved issues 

11 shall be submitted for arbitration in accordance 

12 with the procedure set forth in subparagraph 

13 (B). 

14 (B) ARBITRATION.—If an agreement has 

15 not been entered into with respect to all mat16 ters set forth in subparagraphs (A) through (D) 

17 of paragraph (2) as provided in subparagraph 

18 (A) of this paragraph, the parties shall select 

19 an arbitrator. If the parties are unable to agree 

20 upon the selection of such arbitrator within 5 

21 days, either or both parties shall notify the Na22 tional Mediation Board, which shall provide a 

23 list of 7 arbitrators with experience in arbi24 trating rail labor protection disputes. Within 5 

25 days after such notification, the parties shall al-
65 

•S2306 IS 

1 ternately strike names from the list until only 

2 one name remains, and that person shall serve 

3 as the neutral arbitrator. Within 45 days after 

4 selection of the arbitrator, the arbitrator shall 

5 conduct a hearing on the dispute and shall 

6 render a decision with respect to the unresolved 

7 issues set forth in subparagraphs (A) through 

8 (D) of paragraph (2). This decision shall be 

9 final, binding, and conclusive upon the parties. 

10 The salary and expenses of the arbitrator shall 

11 be borne equally by the parties, but all other ex12 penses shall be paid by the party incurring 

13 them. 

14 (C) SERVICE COMMENCEMENT.—An entity 

15 providing replacement intercity rail passenger 

16 service under paragraph (2) shall commence 

17 service only after an agreement is entered into 

18 with respect to the matters set forth in sub19 paragraphs (A) through (D) of paragraph (2) 

20 or the decision of the arbitrator has been ren21 dered. 

22 (b) REGULATIONS.—Not later than 6 months after 

23 the date of the enactment of this Act, the Secretary of 

24 Transportation shall issue regulations for carrying out this 

25 section. 
66 

•S2306 IS 

1 TITLE II—RAIL DEVELOPMENT 

2 SEC. 201. CAPITAL ASSISTANCE FOR INTERCITY PAS3 SENGER RAIL SERVICE. 

4 (a) IN GENERAL.—Part C of subtitle V is amended 

5 by inserting after chapter 243 the following: 

‘‘CHAPTER 244—INTERCITY PASSENGER RAIL SERVICE 

CORRIDOR CAPITAL ASSISTANCE 

‘‘Sec. 

‘‘24401. Definitions. 

‘‘24402. Capital investment grants to support intercity passenger rail service. 

‘‘24403. Project management oversight. 

‘‘24404. Inclusion of projects in Budget. 

‘‘24405. Local share and maintenance of effort. 

‘‘24406. Grants for maintenance and modernization. 

6 ‘‘§ 24401. Definitions 

7 ‘‘In this chapter: 

8 ‘‘(1) APPLICANT.—The term ‘applicant’ means 

9 a State, a group of States, including an interstate 

10 compact formed under section 410 of the Amtrak 

11 Reform and Accountability Act of 1997 (49 U.S.C. 

12 24101 note) or section 131 of the Rail Passenger 

13 Service Restructuring, Reauthorization, and Devel14 opment Act, or a public corporation, board, commis15 sion, or agency established by one or more States 

16 designated as the lead agency of a State for pro17 viding intercity passenger rail service. 

18 ‘‘(2) CAPITAL PROJECT.—The term ‘capital 

19 project’ means a project for— 
67 

•S2306 IS 

1 ‘‘(A) acquiring or constructing equipment 

2 or a facility for use in intercity passenger rail 

3 service, expenses incidental to the acquisition or 

4 construction (including designing, inspecting, 

5 supervising, engineering, location surveying, 

6 mapping, environmental studies, and acquiring 

7 rights-of-way), alternatives analysis related to 

8 the development of such train services, capacity 

9 improvements on the property over which the 

10 service will be conducted, passenger rail-related 

11 intelligent transportation systems, highway-rail 

12 grade crossing improvements or closures on 

13 routes used for intercity passenger rail service, 

14 relocation assistance, acquiring replacement 

15 housing sites, and acquiring, constructing, relo16 cating, and rehabilitating replacement housing; 

17 ‘‘(B) rehabilitating or remanufacturing rail 

18 rolling stock and associated facilities used pri19 marily in intercity passenger rail service; 

20 ‘‘(C) leasing equipment or a facility for use 

21 in intercity passenger rail service, subject to 

22 regulations (to be prescribed by the Secretary 

23 of Transportation) limiting such leasing ar24 rangements to arrangements that are more 

25 cost-effective than purchase or construction; 
68 

•S2306 IS 

1 ‘‘(D) modernizing existing intercity pas2 senger rail service facilities and information 

3 systems; 

4 ‘‘(E) the introduction of new technology, 

5 through innovative and improved products, 

6 other than magnetic levitation; or 

7 ‘‘(F) defraying, with respect to new service 

8 established under section 24402, the cost of 

9 rental charges to freight railroads. 

10 ‘‘(3) INTERCITY CORRIDOR PASSENGER RAIL

11 SERVICE.—The term ‘intercity corridor passenger 

12 rail service’ means the transportation of passengers 

13 between major metropolitan areas by rail, including 

14 high-speed rail (as defined in section 26105(2) of 

15 this title), at multiple daily frequencies in corridors 

16 of 300 miles or less in length or with trip times of 

17 4 hours or less. 

18 ‘‘(4) NET PROJECT COST.—The term ‘net 

19 project cost’ means that portion of the cost of a 

20 project than cannot be financed from revenues rea21 sonably expected to be generated by the project. 

22 ‘‘§ 24402. Capital investment grants to support new 

23 intercity passenger rail service 

24 ‘‘(a) GENERAL AUTHORITY.— 
69 

•S2306 IS 

1 ‘‘(1) GRANTS.—The Secretary of Transpor2 tation may make grants under this section to an ap3 plicant to assist in financing capital investments to 

4 establish or add additional train frequencies for new 

5 intercity corridor passenger rail service. 

6 ‘‘(2) TERMS AND CONDITIONS.—The Secretary 

7 shall require that a grant under this section be sub8 ject to the terms, conditions, requirements, and pro9 visions the Secretary decides are necessary or appro10 priate for the purposes of this section, including re11 quirements for the disposition of net increases in 

12 value of real property resulting from the project as13 sisted under this section. 

14 ‘‘(3) APPLICATION WITH CHAPTER 53.—A grant 

15 under this section may not be made for a project or 

16 program of projects that qualifies for financial as17 sistance under chapter 53 of this title. 

18 ‘‘(b) PROJECT AS PART OF APPROVED PROGRAM.— 

19 ‘‘(1) IN GENERAL.—The Secretary may not ap20 prove a grant for a project under this section unless 

21 the Secretary finds that the project is part of an ap22 proved corridor plan and program developed under 

23 section 135 of title 23 and that the applicant or re24 cipient has or will have the legal, financial, and tech25 nical capacity to carry out the project (including 
70 

•S2306 IS 

1 safety and security aspects of the project), satisfac2 tory continuing control over the use of the equip3 ment or facilities, and the capability and willingness 

4 to maintain the equipment or facilities. 

5 ‘‘(2) ELIGIBILITY INFORMATION.—An applicant 

6 shall provide sufficient information upon which the 

7 Secretary can make the findings required by this 

8 subsection. 

9 ‘‘(3) PROPOSED OPERATOR JUSTIFICATION.—If 

10 an applicant has not selected the proposed operator 

11 of its service competitively, the applicant shall pro12 vide written justification to the Secretary showing 

13 why the proposed operator is preferred, taking into 

14 account price and other factors, and that use of the 

15 proposed operator will not increase the capital cost 

16 of the project. 

17 ‘‘(4) RAIL AGREEMENT.—The Secretary of 

18 Transportation may not approve a grant under this 

19 section unless the applicant demonstrates that the 

20 railroad over which the intercity passenger rail serv21 ice will operate concurs with the applicant’s oper22 ating plans and infrastructure improvement require23 ments. 

24 ‘‘(c) CRITERIA FOR GRANTS FOR INTERCITY COR25 RIDOR PASSENGER RAIL PROJECTS.— 
71 

•S2306 IS 

1 ‘‘(1) IN GENERAL.—The Secretary may approve 

2 a grant under this section for a capital project only 

3 if the Secretary determines that the proposed project 

4 is— 

5 ‘‘(A) justified, based on— 

6 ‘‘(i) the results of an alternatives 

7 analysis and preliminary engineering; and 

8 ‘‘(ii) a comprehensive review of its 

9 mobility improvements, environmental ben10 efits, cost effectiveness, and operating effi11 ciencies; and 

12 ‘‘(B) supported by an acceptable degree of 

13 State and local financial commitment, including 

14 evidence of stable and dependable financing 

15 sources to construct, maintain, and operate the 

16 system or extension. 

17 ‘‘(2) ALTERNATIVES ANALYSIS AND PRELIMI18 NARY ENGINEERING.—In evaluating a project under 

19 paragraph (1)(A), the Secretary shall analyze and 

20 consider the results of the alternatives analysis and 

21 preliminary engineering for the project. 

22 ‘‘(3) PROJECT JUSTIFICATION.—In evaluating a 

23 project under paragraph (1)(B), the Secretary shall 

24 consider— 
72 

•S2306 IS 

1 ‘‘(A) the direct and indirect benefits and 

2 costs of relevant alternatives; 

3 ‘‘(B) the ability of the service to compete 

4 with other modes of transportation; 

5 ‘‘(C) the extent to which the project fills 

6 an unmet transportation need; 

7 ‘‘(D) the ability of the service to fund its 

8 operating expenses from fare revenues; 

9 ‘‘(E) population density in the corridor; 

10 ‘‘(F) the technical capability of the grant 

11 recipient to construct the project; 

12 ‘‘(G) factors such as congestion relief, im13 proved mobility, air pollution, noise pollution, 

14 energy consumption, and all associated ancillary 

15 and mitigating cost increases necessary to carry 

16 out each alternative analyzed; 

17 ‘‘(H) the level of private sector financial 

18 participation and risk sharing in the project; 

19 ‘‘(I) differences in local land, construction, 

20 and operating costs in evaluating project jus21 tification; and 

22 ‘‘(J) other factors that the Secretary deter23 mines appropriate to carry out this chapter. 

24 ‘‘(4) LOCAL FINANCIAL COMMITMENT.— 
73 

•S2306 IS 

1 ‘‘(A) EVALUATION OF PROJECT.—In evalu2 ating a project under paragraph (1)(C), the 

3 Secretary shall require that— 

4 ‘‘(i) the proposed project plan pro5 vides for the availability of contingency 

6 amounts that the Secretary determines to 

7 be reasonable to cover unanticipated cost 

8 increases; 

9 ‘‘(ii) each proposed State or local 

10 source of capital and operating financing is 

11 stable, reliable, and available within the 

12 proposed project timetable; and 

13 ‘‘(iii) State or local resources are 

14 available to operate the proposed service. 

15 ‘‘(B) CONSIDERATIONS.—In assessing the 

16 stability, reliability, and availability of proposed 

17 sources of local financing under subparagraph 

18 (A), the Secretary shall consider— 

19 ‘‘(i) existing grant commitments; 

20 ‘‘(ii) the degree to which financing 

21 sources are dedicated to the purposes pro22 posed; 

23 ‘‘(iii) any debt obligation that exists 

24 or is proposed by the applicant for the pro-
74 

•S2306 IS 

1 posed project or other intercity passenger 

2 rail service purpose; and 

3 ‘‘(iv) the extent to which the project 

4 has a local financial commitment that ex5 ceeds the required non-Federal share of 

6 the cost of the project. 

7 ‘‘(5) PROJECT EVALUATION AND RATING.—A 

8 proposed project may advance from alternatives 

9 analysis to preliminary engineering, and may ad10 vance from preliminary engineering to final design 

11 and construction, only if the Secretary finds that the 

12 project meets the requirements of this section and 

13 there is a reasonable likelihood that the project will 

14 continue to meet such requirements. In making such 

15 findings, the Secretary shall evaluate and rate the 

16 project as ‘highly recommended’, ‘recommended’, or 

17 ‘not recommended’, based on the results of alter18 natives analysis, the project justification criteria, 

19 and the degree of local financial commitment, as re20 quired under this subsection. In rating the projects, 

21 the Secretary shall provide, in addition to the overall 

22 project rating, individual ratings for each of the cri23 teria established under the regulations issued under 

24 paragraph (5). 
75 

•S2306 IS 

1 ‘‘(6) FULL FUNDING GRANT AGREEMENT.—A 

2 project financed under this subsection shall be car3 ried out through a full funding grant agreement. 

4 The Secretary shall enter into a full funding grant 

5 agreement based on the evaluations and ratings re6 quired under this subsection. The Secretary shall not 

7 enter into a full funding grant agreement for a 

8 project unless that project is authorized for final de9 sign and construction. 

10 ‘‘(d) LETTERS OF INTENT, FULL FUNDING GRANT

11 AGREEMENTS, AND EARLY SYSTEMS WORK AGREE12 MENTS.— 

13 ‘‘(1) LETTER OF INTENT.— 

14 ‘‘(A) The Secretary may issue a letter of 

15 intent to an applicant announcing an intention 

16 to obligate, for a project under this section, an 

17 amount from future available budget authority 

18 specified in law that is not more than the 

19 amount stipulated as the financial participation 

20 of the Secretary in the project. 

21 ‘‘(B) At least 60 days before issuing a let22 ter under subparagraph (A) of this paragraph 

23 or entering into a full funding grant agreement, 

24 the Secretary shall notify in writing the Senate 

25 Committee on Commerce, Science, and Trans-
76 

•S2306 IS 

1 portation and the House of Representatives 

2 Committee on Transportation and Infrastruc3 ture, and the House of Representatives and 

4 Senate Committees on Appropriations of the 

5 proposed letter or agreement. The Secretary 

6 shall include with the notification a copy of the 

7 proposed letter or agreement as well as the 

8 evaluations and ratings for the project. 

9 ‘‘(C) The issuance of a letter is deemed not 

10 to be an obligation under sections 1108(c) and 

11 (d), 1501, and 1502(a) of title 31, or an admin12 istrative commitment. 

13 ‘‘(D) An obligation or administrative com14 mitment may be made only when amounts are 

15 appropriated. 

16 ‘‘(2) FULL FUNDING AGREEMENT.— 

17 ‘‘(A) The Secretary may make a full fund18 ing grant agreement with an applicant. The 

19 agreement shall— 

20 ‘‘(i) establish the terms of participa21 tion by the United States Government in a 

22 project under this section; 

23 ‘‘(ii) establish the maximum amount 

24 of Government financial assistance for the 

25 project, which, with respect to a high-speed 
77 

•S2306 IS 

1 rail project, shall be sufficient to complete 

2 at least an operable segment; 

3 ‘‘(iii) cover the period of time for com4 pleting the project, including a period ex5 tending beyond the period of an authoriza6 tion; and 

7 ‘‘(iv) make timely and efficient man8 agement of the project easier according to 

9 the law of the United States. 

10 ‘‘(B) An agreement under this paragraph 

11 obligates an amount of available budget author12 ity specified in law and may include a commit13 ment, contingent on amounts to be specified in 

14 law in advance for commitments under this 

15 paragraph, to obligate an additional amount 

16 from future available budget authority specified 

17 in law. The agreement shall state that the con18 tingent commitment is not an obligation of the 

19 Federal Government and is subject to the avail20 ability of appropriations made by Federal law 

21 and to Federal laws in force on or enacted after 

22 the date of the contingent commitment. Interest 

23 and other financing costs of efficiently carrying 

24 out a part of the project within a reasonable 

25 time are a cost of carrying out the project 
78 

•S2306 IS 

1 under a full funding grant agreement, except 

2 that eligible costs may not be more than the 

3 cost of the most favorable financing terms rea4 sonably available for the project at the time of 

5 borrowing. The applicant shall certify, in a way 

6 satisfactory to the Secretary, that the applicant 

7 has shown reasonable diligence in seeking the 

8 most favorable financing terms. 

9 ‘‘(3) EARLY SYSTEMS WORK AGREEMENT.— 

10 ‘‘(A) The Secretary may make an early 

11 systems work agreement with an applicant if a 

12 record of decision under the National Environ13 mental Policy Act of 1969 (42 U.S.C. 4321 et 

14 seq.) has been issued on the project and the 

15 Secretary finds there is reason to believe— 

16 ‘‘(i) a full funding grant agreement 

17 for the project will be made; and 

18 ‘‘(ii) the terms of the work agreement 

19 will promote ultimate completion of the 

20 project more rapidly and at less cost. 

21 ‘‘(B) A work agreement under this para22 graph obligates an amount of available budget 

23 authority specified in law and shall provide for 

24 reimbursement of preliminary costs of carrying 

25 out the project, including land acquisition, time-
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1 ly procurement of system elements for which 

2 specifications are decided, and other activities 

3 the Secretary decides are appropriate to make 

4 efficient, long-term project management easier. 

5 A work agreement shall cover the period of time 

6 the Secretary considers appropriate. The period 

7 may extend beyond the period of current au8 thorization. Interest and other financing costs 

9 of efficiently carrying out the work agreement 

10 within a reasonable time are a cost of carrying 

11 out the agreement, except that eligible costs 

12 may not be more than the cost of the most fa13 vorable financing terms reasonably available for 

14 the project at the time of borrowing. The appli15 cant shall certify, in a way satisfactory to the 

16 Secretary, that the applicant has shown reason17 able diligence in seeking the most favorable fi18 nancing terms. If an applicant does not carry 

19 out the project for reasons within the control of 

20 the applicant, the applicant shall repay all Gov21 ernment payments made under the work agree22 ment plus reasonable interest and penalty 

23 charges the Secretary establishes in the agree24 ment. 
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1 ‘‘(4) LIMIT ON TOTAL OBLIGATIONS AND COM2 MITMENTS.—The total estimated amount of future 

3 obligations of the Government and contingent com4 mitments to incur obligations covered by all out5 standing letters of intent, full funding grant agree6 ments, and early systems work agreements under 

7 this section, when combined with obligations under 

8 section 5309 of this title, may be not more than the 

9 amount authorized under section 5338(b) of this 

10 title, less an amount the Secretary reasonably esti11 mates is necessary for grants under this section not 

12 covered by a letter. The total amount covered by 

13 new letters and contingent commitments included in 

14 full funding grant agreements and early systems 

15 work agreements may be not more than a limitation 

16 specified in law. 

17 ‘‘(e) FEDERAL SHARE OF NET PROJECT COST.— 

18 ‘‘(1) IN GENERAL.— 

19 ‘‘(A) Based on engineering studies, studies 

20 of economic feasibility, and information on the 

21 expected use of equipment or facilities, the Sec22 retary shall estimate the net project cost. 

23 ‘‘(B) A grant for the project may be for up 

24 to 50 percent of the net project cost. The re-
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1 mainder shall be provided in cash from non2 Federal sources. 

3 ‘‘(f) UNDERTAKING PROJECTS IN ADVANCE.— 

4 ‘‘(1) IN GENERAL.—The Secretary may pay the 

5 Federal share of the net capital project cost to an 

6 applicant that carries out any part of a project de7 scribed in this section according to all applicable 

8 procedures and requirements if— 

9 ‘‘(A) the applicant applies for the payment; 

10 ‘‘(B) the Secretary approves the payment; 

11 and 

12 ‘‘(C) before carrying out a part of the 

13 project, the Secretary approves the plans and 

14 specifications for the part in the same way as 

15 other projects under this section. 

16 ‘‘(2) INTEREST COSTS.—The cost of carrying 

17 out part of a project includes the amount of interest 

18 earned and payable on bonds issued by the applicant 

19 to the extent proceeds of the bonds are expended in 

20 carrying out the part. The amount of interest in21 cludable as cost under this paragraph may not be 

22 more than the most favorable interest terms reason23 ably available for the project at the time of bor24 rowing. The applicant shall certify, in a manner sat25 isfactory to the Secretary, that the applicant has 
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1 shown reasonable diligence in seeking the most fa2 vorable financial terms. 

3 ‘‘(3) USE OF COST INDICES.—The Secretary 

4 shall consider changes in capital project cost indices 

5 when determining the estimated cost under para6 graph (2) of this subsection. 

7 ‘‘(g) FUNDING.—There are authorized to be appro8 priated to the Secretary of Transportation for purposes 

9 of this section— 

10 ‘‘(1) $525,000,000 for fiscal year 2006, 

11 ‘‘(2) $525,000,000 for fiscal year 2007, 

12 ‘‘(3) $650,000,000 for fiscal year 2008, 

13 ‘‘(4) $750,000,000 for fiscal year 2009, and 

14 ‘‘(5) $800,000,000 for fiscal year 2010, 

15 such sums to remain available until expended. 

16 ‘‘§ 24403. Project management oversight 

17 ‘‘(a) PROJECT MANAGEMENT PLAN REQUIRE18 MENTS.—To receive Federal financial assistance for a 

19 major capital project under this chapter, an applicant 

20 shall prepare and carry out a project management plan 

21 approved by the Secretary of Transportation. The plan 

22 shall provide for— 

23 ‘‘(1) adequate recipient staff organization with 

24 well-defined reporting relationships, statements of 
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1 functional responsibilities, job descriptions, and job 

2 qualifications; 

3 ‘‘(2) a budget for the project, including the 

4 project management organization, appropriate con5 sultants, property acquisition, utility relocation, sys6 tems demonstration staff, audits, and miscellaneous 

7 payments the recipient may be prepared to justify; 

8 ‘‘(3) a construction schedule for the project; 

9 ‘‘(4) a document control procedure and record10 keeping system; 

11 ‘‘(5) a change order procedure that includes a 

12 documented, systematic approach to handling the 

13 construction change orders; 

14 ‘‘(6) organizational structures, management 

15 skills, and staffing levels required throughout the 

16 construction phase; 

17 ‘‘(7) quality control and quality assurance func18 tions, procedures, and responsibilities for construc19 tion, system installation, and integration of system 

20 components; 

21 ‘‘(8) material testing policies and procedures; 

22 ‘‘(9) internal plan implementation and reporting 

23 requirements; 
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1 ‘‘(10) criteria and procedures to be used for 

2 testing the operational system or its major compo3 nents; 

4 ‘‘(11) annual updates of the plan, especially re5 lated to project budget and project schedule, financ6 ing, and ridership estimates; and 

7 ‘‘(12) the recipient’s commitment to submit a 

8 project budget and project schedule to the Secretary 

9 each month. 

10 ‘‘(b) PLAN APPROVAL.— 

11 ‘‘(1) 60-DAY DECISION.—The Secretary shall 

12 approve or disapprove a plan not later than 60 days 

13 after it is submitted. If the approval process cannot 

14 be completed within 60 days, the Secretary shall no15 tify the recipient, explain the reasons for the delay, 

16 and estimate the additional time that will be re17 quired. 

18 ‘‘(2) EXPLANATION OF DISAPPROVAL.—If the 

19 Secretary disapproves a plan, the Secretary shall in20 form the applicant of the reasons for disapproval of 

21 the plan. 

22 ‘‘(c) SECRETARIAL OVERSIGHT.— 

23 ‘‘(1) IN GENERAL.—The Secretary may use no 

24 more than 0.5 percent of amounts made available in 

25 a fiscal year for capital projects under this chapter 
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1 to enter into contracts to oversee the construction of 

2 such projects. 

3 ‘‘(2) USE OF FUNDS.—The Secretary may use 

4 amounts available under paragraph (1) of this sub5 section to make contracts for safety, procurement, 

6 management, and financial compliance reviews and 

7 audits of a recipient of amounts under paragraph 

8 (1). 

9 ‘‘(3) FEDERAL SHARE.—The Federal Govern10 ment may pay the entire cost of carrying out a con11 tract under this subsection. 

12 ‘‘(d) ACCESS TO SITES AND RECORDS.—Each recipi13 ent of assistance under this chapter shall provide the Sec14 retary and a contractor the Secretary chooses under sub15 section (b) of this section with access to the construction 

16 sites and records of the recipient when reasonably nec17 essary. 

18 ‘‘§ 24404. Inclusion of projects in Budget 

19 ‘‘Beginning with fiscal year 2005, the Secretary of 

20 Transportation shall transmit to the Office of Manage21 ment and Budget for inclusion in the President’s budget 

22 submission for the fiscal year a list of projects rec23 ommended for funding under section 24402 for the fiscal 

24 year. 
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1 ‘‘§ 24405. Local share and maintenance of effort 

2 ‘‘(a) IN GENERAL.—Notwithstanding any other pro3 vision of law, a recipient of assistance under section 24402 

4 may use, as part of the local matching funds for a capital 

5 project, the proceeds from the issuance of revenue bonds. 

6 ‘‘(b) MAINTENANCE OF EFFORT.—The Secretary of 

7 Transportation shall approve the use of proceeds from the 

8 issuance of revenue bonds for the non-Federal share of 

9 the net project cost only if the aggregate amount of finan10 cial support for intercity passenger rail service from the 

11 State is not less than the average annual amount provided 

12 by the State during the preceding 3 years. 

13 ‘‘§ 24406. Grants for maintenance and modernization 

14 ‘‘(a) IN GENERAL.—The Secretary of Transportation 

15 may make capital grants for renewal and modernization 

16 of intercity passenger rail services to— 

17 ‘‘(1) the American Passenger Railway Corpora18 tion for services it operates under contract with the 

19 Secretary of Transportation; or 

20 ‘‘(2) to States for intercity passenger rail serv21 ices operated under a contract with the American 

22 Passenger Railway Corporation or another train op23 erator. 

24 ‘‘(b) USE OF FUNDS.—Grants under this section may 

25 be used— 
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1 ‘‘(1) to purchase, lease, rehabilitate, or remanu2 facture rolling stock and associated facilities used 

3 primarily in intercity passenger rail service; 

4 ‘‘(2) to modernize existing intercity passenger 

5 rail service facilities and information systems; or 

6 ‘‘(3) to defray the cost of rental charges to 

7 freight railroads for the addition of train fre8 quencies. 

9 ‘‘(c) FEDERAL SHARE.—For fiscal years 2005 

10 through 2010, the Federal share for a capital grant under 

11 this section may be 100 percent, except that the Federal 

12 share for a grant made under subsection (b)(3) may not 

13 exceed 50 percent. After fiscal year 2010, the Federal 

14 share for a capital grant under this section may not exceed 

15 80 percent. 

16 ‘‘(d) ALLOCATION FORMULA.—Funds made available 

17 by this section shall be allocated equitably among the 

18 States based on a formula to be determined by the Sec19 retary. 

20 ‘‘(e) SLEEPING AND DINING CARS.—Pending the re21 structuring of long distance routes under sections 106 

22 through 108 of the Rail Passenger Service Restructuring, 

23 Reauthorization, and Development Act, capital grants 

24 may be made to the American Passenger Railway Cor25 poration for sleeping and dining cars only to the extent 
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1 necessary to maintain the equipment in working order and 

2 not for the purpose of refurbishing, rebuilding, or renew3 ing such equipment to extend the equipment’s useful life. 

4 ‘‘(f) LONG DISTANCE RESTRUCTURING PLAN.—Un5 less the restructuring plan submitted by the Long Dis6 tance Route Restructuring Commission under section 106 

7 of the Rail Passenger Service Restructuring, Reauthoriza8 tion, and Development Act is disapproved by Congress, 

9 from the sums authorized for capital projects outside of 

10 the Northeast Corridor, the Secretary may reserve up to 

11 $20,000,000 in each of fiscal years 2007 through 2010 

12 to assist in the restructuring of long distance routes as 

13 linked corridors, and the Federal share of such assistance 

14 shall be 100 percent. 

15 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

16 are authorized to be appropriated to the Secretary of 

17 Transportation $200,000,000 for each of fiscal years 2005 

18 through 2010 to carry out this section.’’. 

19 SEC. 202. REGULATIONS IMPLEMENTING CHAPTER 244. 

20 (a) IN GENERAL.—Not later than 1 year after the 

21 date of enactment of this Act, the Secretary of Transpor22 tation shall issue final regulations under chapter 244 of 

23 title 49, United States Code. 
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1 (b) SPECIFIC REQUIREMENTS.—The regulations 

2 under chapter 244 of title 49, United States Code, shall 

3 include— 

4 (1) the manner in which the Secretary will 

5 evaluate and rate projects based on the results of al6 ternatives analysis, project justification, and the de7 gree of local financial commitment, as required by 

8 section 24402 of that title; 

9 (2) a definition of ‘‘major capital project’’ for 

10 purposes of section 24403; 

11 (3) a requirement that project oversight begin 

12 during the preliminary engineering stage of a 

13 project, unless the Secretary finds it more appro14 priate to begin oversight during another stage of a 

15 project, to maximize the transportation benefits and 

16 cost savings associated with project management 

17 oversight; 

18 (4) a deadline by which all grant applications 

19 for a fiscal year shall be submitted that is early 

20 enough to permit the Secretary to evaluate all timely 

21 applications thoroughly before making grants; 

22 (5) a formula based on infrastructure owner23 ship, boardings, and passenger-miles traveled in the 

24 prior fiscal year by which the funds authorized for 
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1 modernization of existing services will be allocated 

2 among the States; and 

3 (6) a requirement that, if a State does not 

4 apply for its share of formula grant funds under 

5 paragraph (5) of this subsection in a timely manner, 

6 those funds will be made available to other States. 

7 TITLE III—REFORMS 

8 SEC. 301. MANAGEMENT OF SECURED DEBT. 

9 Except as approved by the Secretary of Transpor10 tation to refinance existing secured debt, Amtrak (until 

11 the American Passenger Railway Corporation is estab12 lished) and the American Passenger Railway Corporation 

13 thereafter, may not enter into any obligation secured by 

14 assets after the date of enactment of this Act. This section 

15 does not prohibit unsecured lines of credit used for work16 ing capital purposes. 

17 SEC. 302. EMPLOYEE ASSISTANCE. 

18 (a) TRANSITION FINANCIAL INCENTIVES.— 

19 (1) IN GENERAL.—To reduce operating ex20 penses in preparation for competition from other rail 

21 carriers, the American Passenger Railway Corpora22 tion may institute a program under which it may, at 

23 its discretion, provide financial incentives to employ24 ees who voluntarily terminate their employment with 

25 the Corporation and relinquish any legal rights to 
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1 receive termination-related payments under any con2 tractual agreement with the Corporation. 

3 (2) CONDITIONS FOR FINANCIAL INCEN4 TIVES.—As a condition for receiving financial assist5 ance grants under this section, the American Pas6 senger Railway Corporation shall certify to the Sec7 retary of Transportation that— 

8 (A) the financial assistance results in a net 

9 reduction in the total number of employees 

10 equal to the number receiving financial incen11 tives; 

12 (B) the financial assistance results in a net 

13 reduction in total employment expense equiva14 lent to the total employment expenses associ15 ated with the employees receiving financial in16 centives; and 

17 (C) the total number of employees eligible 

18 for termination-related payments will not be in19 creased without the express written consent of 

20 the Secretary. 

21 (3) AMOUNT OF FINANCIAL INCENTIVES.—The 

22 financial incentives authorized under this section 

23 may not exceed 1 year’s base pay. 

24 (4) AUTHORIZATION OF APPROPRIATIONS.— 

25 There are authorized to be appropriated to the Sec-
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•S2306 IS 

1 retary of Transportation $25,000,000 for each of 

2 fiscal years 2005, 2006, and 2007 to make grants 

3 to the American Passenger Railway Corporation to 

4 fund financial incentive payments to employees 

5 under this subsection. 

6 (b) LABOR PROTECTION FOR EMPLOYEES OF THE

7 AMERICAN PASSENGER RAILWAY CORPORATION.— 

8 (1) IN GENERAL.—The American Passenger 

9 Railway Corporation shall be responsible for obliga10 tions imposed by law or collective bargaining agree11 ment for compensation and benefits payable to its 

12 employees terminated in connection with the restruc13 turing of passenger rail service under this Act and 

14 the amendments made by this Act. The responsi15 bility of the American Passenger Railway Corpora16 tion under the preceding sentence, and the obliga17 tions for which it is responsible under that sentence, 

18 may not be transferred to any other entity in con19 nection with such restructuring by contract or other20 wise. 

21 (2) AUTHORIZATION OF APPROPRIATIONS.— 

22 There are authorized to be appropriated to the Sec23 retary of Transportation for the use of the American 

24 Passenger Railway Corporation in meeting its re-
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•S2306 IS 

1 sponsibility under paragraph (1) $75,000,000 for 

2 each of fiscal years 2007 through 2010. 

3 (3) NOT AN OBLIGATION OF THE UNITED

4 STATES.—Notwithstanding paragraph (2), nothing 

5 in paragraph (1) shall be construed to mean that 

6 any labor protection obligation of the American Pas7 senger Railway Corporation under that paragraph is 

8 an obligation of the United States Government. 

9 SEC. 303. TERMINATION OF AUTHORITY FOR GSA TO PRO10 VIDE SERVICES TO AMTRAK. 

11 Section 1110 of division A of H.R. 5666 (114 Stat. 

12 2763A–202), as enacted by section 1(a)(4) of the Consoli13 dated Appropriations Act, 2001, is repealed. 

14 SEC. 304. AMTRAK REFORM BOARD OF DIRECTORS. 

15 Section 24302 is amended by adding at the end the 

16 following: 

17 ‘‘(d) ASSET TRANSITION COMMITTEE.— 

18 ‘‘(1) IN GENERAL.—The Reform Board shall 

19 form an asset transition committee comprised of the 

20 Secretary or the Secretary’s designee, and 2 other 

21 members, or 1 other member if 2 other members are 

22 not lawfully appointed. 

23 ‘‘(2) POWERS AND DUTIES.—In addition to 

24 other powers and duties assigned by the board, the 

25 Asset Transition Committee has the duty to ensure 
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•S2306 IS 

1 that the public interest is served in board decisions 

2 and Amtrak management actions that change the 

3 use of or status of— 

4 ‘‘(A) the contractual right of access of Am5 trak to rail lines of other railroads; 

6 ‘‘(B) Amtrak’s secured debt; 

7 ‘‘(C) Northeast Corridor real property and 

8 assets; and 

9 ‘‘(D) rolling stock. 

10 ‘‘(3) APPROVAL REQUIRED.—The board may 

11 not take an action with regard to the assets or se12 cured debt specified in paragraph (2), or permit Am13 trak management action with regard to those assets, 

14 that is not approved by the asset transition com15 mittee.’’. 

16 SEC. 305. LIMITATIONS ON AVAILABILITY OF GRANTS. 

17 (a) IN GENERAL.—Chapter 243, as amended by sec18 tion 136 of this Act is amended by inserting after section 

19 24318 the following: 

20 ‘‘§ 24319. Limitations on availability of grants 

21 ‘‘(a) IN GENERAL.—In addition to any other require22 ment imposed under this title, grants under this subtitle 

23 are subject to the following conditions: 

24 ‘‘(1) The Secretary of Transportation may ap25 prove funding to cover operating losses or operating 
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•S2306 IS 

1 expenses (including advance purchase orders) only 

2 after receiving and approving a grant request for 

3 each specific train route to which the grant relates. 

4 ‘‘(2) Each such grant request shall be accom5 panied by a detailed financial analysis, revenue pro6 jection, and capital expenditure program justifying 

7 the Federal support to the Secretary’s satisfaction. 

8 ‘‘(3) Not later than December 31st prior to 

9 each fiscal year in which a grant under this subtitle 

10 is to be made, the grant recipient shall transmit a 

11 business plan for operating and capital improve12 ments to be funded in the fiscal year under section 

13 24104(a) to the Secretary of Transportation, the 

14 Committee on Commerce, Science, and Transpor15 tation of the Senate, the Committee on Transpor16 tation and Infrastructure of the House of Represent17 atives, and the House of Representatives and Senate 

18 Committees on Appropriations. 

19 ‘‘(4) The business plan shall include— 

20 ‘‘(A) targets, as applicable, for ridership, 

21 revenues, and capital and operating expenses; 

22 ‘‘(B) a separate accounting for such tar23 gets— 

24 ‘‘(i) on the Northeast Corridor; 

25 ‘‘(ii) each intercity train route; 
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•S2306 IS 

1 ‘‘(iii) as a group for long distance 

2 trains and corridor services; and 

3 ‘‘(iv) commercial activities, including 

4 contract operations and mail and express; 

5 and 

6 ‘‘(C) a description of the work to be fund7 ed, along with cost estimates and an estimated 

8 timetable for completion of the projects covered 

9 by the business plan. 

10 ‘‘(5) Each month of each fiscal year in which 

11 grants are made under this subtitle, the grant recipi12 ent shall submit a supplemental report in electronic 

13 format regarding the business plan, which shall de14 scribe the work completed to date, any changes to 

15 the business plan, and the reasons for such changes, 

16 to the Secretary of Transportation, the Committee 

17 on Commerce, Science, and Transportation of the 

18 Senate, the Committee on Transportation and Infra19 structure of the House of Representatives, and the 

20 House of Representatives and Senate Committees on 

21 Appropriations. 

22 ‘‘(6) None of the funds authorized by this sub23 title or the Rail Passenger Service Restructuring, 

24 Reauthorization, and Development Act may be dis25 bursed for operating expenses, including advance 
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•S2306 IS 

1 purchase orders and capital projects not approved by 

2 the Secretary nor in the business plan submitted by 

3 the grant recipient under paragraph (3). 

4 ‘‘(7) The grant recipient shall display the busi5 ness plan required by paragraph (3) and all subse6 quent supplemental plans required by paragraph (5) 

7 on its website within a reasonable time after they 

8 are submitted to the Secretary and the Congress 

9 under this section. 

10 ‘‘(8) The Secretary may not make any grant 

11 under this subtitle, until the grant recipient agrees 

12 to continue abiding by the provisions of paragraphs 

13 (1), (2), (5), (9), and (11) of the summary of condi14 tions on the direct loan agreement of June 28, 2002, 

15 until the loan is repaid. 

16 ‘‘(9) With respect to any route on which inter17 city passenger rail service is provided on the day be18 fore the date on which the restructuring required by 

19 section 24300 is completed (as determined by the 

20 Secretary), the American Passenger Railway Cor21 poration shall make available to any replacement op22 erator the legacy equipment that is associated with 

23 the service on the route. The equipment shall be 

24 made available on such terms as the National Rail-
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1 road Passenger Corporation determines are fair, rea2 sonable, and in the public interest. 

3 ‘‘(10) The American Passenger Railway Cor4 poration shall provide interline reservations services 

5 to any other provider of intercity passenger rail 

6 transportation on the same basis and at the same 

7 rates as those services were provided to the oper8 ating entities that provide passenger rail service 

9 within Amtrak as of the date of enactment of the 

10 Rail Passenger Service Restructuring, Reauthoriza11 tion, and Development Act. 

12 ‘‘(b) GRANT RECIPIENT.—In this section, the term 

13 ‘grant recipient’ means— 

14 ‘‘(1) Amtrak, until the date on which the Amer15 ican Passenger Railway Corporation is established; 

16 and 

17 ‘‘(2) the American Passenger Railway Corpora18 tion, after it is established.’’. 

19 (b) CONFORMING AMENDMENT.—The chapter anal20 ysis for chapter 243 is amended by inserting after the item 

21 relating to section 24318 the following: 

‘‘24319. Limitations on availability of grants.’’. 

22 SEC. 306. REPEAL OF OBSOLETE AND EXECUTED PROVI23 SIONS OF LAW. 

24 (a) IN GENERAL.—The following sections are re25 pealed: 
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•S2306 IS 

1 (1) Section 24701. 

2 (2) Section 24706. 

3 (3) Section 24901. 

4 (4) Section 24902. 

5 (5) Section 24904. 

6 (6) Section 24906. 

7 (7) Section 24909. 

8 (b) AMENDMENT OF SECTION 24305.—Section 

9 24305 is amended— 

10 (1) by striking paragraph (2) of subsection (a) 

11 and redesignating paragraph (3) as paragraph (2); 

12 and 

13 (2) by inserting ‘‘With regard to items acquired 

14 with funds provided by the Federal Government,’’ 

15 before ‘‘Amtrak’’ in subsection (f)(2). 

16 (c) CONFORMING AMENDMENTS.—The chapter anal17 yses for chapters 243, 247, and 249 are amended, as ap18 propriate, by striking the items relating to sections 24307, 

19 24701, 24706, 24901, 24902, 24904, 24906, 24908, and 

20 24909. 

21 SEC. 307. ESTABLISHMENT OF FINANCIAL ACCOUNTING 

22 SYSTEM. 

23 (a) IN GENERAL.—The Inspector General of the De24 partment of Transportation shall employ an independent 

25 financial consultant— 
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1 (1) to assess Amtrak’s financial accounting and 

2 reporting system and practices as of the date of en3 actment of this Act; 

4 (2) to design and assist the American Pas5 senger Railway Corporation in implementing a mod6 ern financial accounting and reporting system, on 

7 the basis of the assessment, that will produce accu8 rate and timely financial information in sufficient 

9 detail— 

10 (A) to enable the American Passenger 

11 Railway Corporation to assign revenues and ex12 penses appropriately to each of its lines of busi13 ness and to each major activity within each line 

14 of business activity, including train operations, 

15 equipment maintenance, ticketing, and reserva16 tions; 

17 (B) to aggregate expenses and revenues re18 lated to infrastructure and distinguish them 

19 from expenses and revenues related to rail oper20 ations; and 

21 (C) to provide ticketing and reservation in22 formation on a real-time basis. 

23 (b) VERIFICATION OF SYSTEM; REPORT.—The In24 spector General of the Department of Transportation shall 

25 review the accounting system designed and implemented 
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•S2306 IS 

1 under subsection (a) to ensure that it accomplishes the 

2 purposes for which it is intended. The Inspector General 

3 shall report his findings and conclusions, together with 

4 any recommendations, to the Senate Committee on Com5 merce, Science, and Transportation and the House of Rep6 resentatives Committee on Transportation and Infrastruc7 ture. 

8 (c) SEPARATE FINANCIAL STATEMENTS FOR NORTH9 EAST CORRIDOR INFRASTRUCTURE.—Beginning with fis10 cal year 2006, the American Passenger Railway Corpora11 tion shall issue separate financial statements for activities 

12 related to the infrastructure of the Northeast Corridor. 

13 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

14 are authorized to be appropriated to the Secretary of 

15 Transportation $2,500,000 for fiscal year 2005 to carry 

16 out subsection (a), such sums to remain available until 

17 expended. 

18 SEC. 308. RESTRUCTURING OF LONG-TERM DEBT AND CAP19 ITAL LEASES. 

20 (a) IN GENERAL.—The Secretary of the Treasury, in 

21 consultation with the Secretary of Transportation and 

22 Amtrak, shall restructure Amtrak’s indebtedness as of the 

23 date of enactment of this Act. 

24 (b) DEBT REDEMPTION.—The Secretary of Trans25 portation, in consultation with the Secretary of the Treas-
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1 ury, shall enter into negotiations with the holders of Am2 trak debt, including leases, that is outstanding on the date 

3 of enactment of this Act for the purpose of restructuring 

4 that debt. The Secretary, in consultation with the Sec5 retary of the Treasury, shall secure agreements for repay6 ment on such terms as the Secretary deems favorable to 

7 the interests of the Government. 

8 (c) CRITERIA.—In redeeming or restructuring Am9 trak’s indebtedness, the Secretaries and Amtrak— 

10 (1) shall ensure that the restructuring imposes 

11 the least practicable burden on taxpayers; and 

12 (2) take into consideration repayment costs, the 

13 term of any loan or loans, and market conditions. 

14 (d) EARLY REDEMPTION PLAN.—Within 1 year after 

15 the date of enactment of this Act, the Secretary of Trans16 portation and the Secretary of the Treasury shall transmit 

17 to the Congress— 

18 (1) a plan for the early redemption of Amtrak 

19 debt; and 

20 (2) a proposal for covering the costs associated 

21 with the early redemption. 

22 (e) AMTRAK PRINCIPAL AND INTEREST PAY23 MENTS.— 

24 (1) PRINCIPAL ON DEBT SERVICE.—Unless the 

25 Secretary of Transportation and the Secretary of the 
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1 Treasury restructure or redeem the debt, there are 

2 authorized to be appropriated to the Secretary of 

3 Transportation for the use of Amtrak (before the 

4 date, determined by the Secretary of Transportation, 

5 on which the restructuring required by section 

6 24300 of title 49, United States Code, is completed) 

7 and the American Passenger Railway Corporation 

8 (after that date) for retirement of principal on loans 

9 for capital equipment, or capital leases, not more 

10 than the following amounts: 

11 (A) For fiscal year 2005, $110,000,000. 

12 (B) For fiscal year 2006, $115,000,000. 

13 (C) For fiscal year 2007, $205,000,000. 

14 (D) For fiscal year 2008, $165,000,000. 

15 (E) For fiscal year 2009, $155,000,000. 

16 (F) For fiscal year 2010, $150,000,000. 

17 (2) INTEREST ON DEBT.—Unless the Secretary 

18 of Transportation and the Secretary of the Treasury 

19 restructure or redeem the debt, there are authorized 

20 to be appropriated to the Secretary of Transpor21 tation for the use of Amtrak (before the date, deter22 mined by the Secretary of Transportation, on which 

23 the restructuring required by section 24300 of title 

24 49, United States Code, is completed) and the 

25 American Passenger Railway Corporation (after that 
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1 date) for the payment of interest on loans for capital 

2 equipment, or capital leases, the following amounts: 

3 (A) For fiscal year 2005, $155,000,000. 

4 (B) For fiscal year 2006, $150,000,000. 

5 (C) For fiscal year 2007, $140,000,000. 

6 (D) For fiscal year 2008, $130,000,000. 

7 (E) For fiscal year 2009, $125,000,000. 

8 (F) For fiscal year 2010, $115,000,000. 

9 (3) REDUCTIONS IN AUTHORIZATION LEVELS.— 

10 Whenever action taken by the Secretary of the 

11 Treasury under subsection (c) results in reductions 

12 in amounts of principle and interest that Amtrak 

13 must service on existing debt, Amtrak shall submit 

14 to the Senate Committee on Commerce, Science and 

15 Transportation, the House of Representatives Com16 mittee on Transportation and Infrastructure, the 

17 Senate Committee on Appropriations, and House of 

18 Representatives Committee on Appropriations re19 vised requests for amounts authorized by paragraphs 

20 (1) and (2) that reflect such reductions. 

21 (f) LEGAL EFFECT OF PAYMENTS UNDER THIS SEC22 TION.—The payment of principal and interest secured 

23 debt with the proceeds of grants under subsection (f) shall 

24 not— 
105 

•S2306 IS 

1 (1) modify the extent or nature of any indebt2 edness of the National Railroad Passenger Corpora3 tion to the United States in existence of the date of 

4 enactment of this Act; 

5 (2) change the private nature of Amtrak’s or its 

6 successors’ liabilities; or 

7 (3) imply any Federal guarantee or commit8 ment to amortize Amtrak’s outstanding indebted9 ness. 

10 SEC. 309. AUTHORIZATION OF APPROPRIATIONS. 

11 There are authorized to be appropriated to the Sec12 retary of Transportation for the benefit of Amtrak for fis13 cal year 2005 $750,000,000 for operating expenses. 

Æ