I 
110TH CONGRESS 
1ST SESSION H. R. 1606 
To amend title 49, United States Code, to provide for the establishment 
of a flexibility incentive grant program. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 20, 2007 
Ms. MATSUI introduced the following bill; which was referred to the 
Committee on Transportation and Infrastructure 
A BILL 
To amend title 49, United States Code, to provide for the 
establishment of a flexibility incentive grant program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. FLEXIBILITY INCENTIVE GRANT PILOT PRO-
GRAM. 
(a) IN GENERAL.—Chapter 53 of title 49, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 5341. Flexibility incentive grant pilot program 
‘‘(a) PURPOSE.—The purpose of this section is to 
provide incentives to encourage States to establish new 
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sources of revenue for public transportation projects and 
services and to reward States for creating more flexibility 
in the use of their existing transportation funds. 
‘‘(b) ESTABLISHMENT OF PROGRAM.—The Secretary 
of Transportation shall establish a flexibility incentive 
grant pilot program in accordance with this section. 
‘‘(c) APPLICATIONS.— 
‘‘(1) IN GENERAL.—A State may submit appli-
cation to the Secretary for a grant under the section 
for each of fiscal years 2008, 2009, 2010, and 2011 
not later than the August 1 preceding the first day 
of such fiscal year. 
‘‘(2) CONTENTS.—An application of a State for 
a grant for a fiscal year under this section shall con-
tain, at a minimum, the aggregate amount that the 
State and the counties of the State expended (ex-
cluding amounts from Federal sources) on public 
transportation projects and services for each of the 
State’s 2 fiscal years preceding the date of the appli-
cation, together with such supporting documentation 
as the Secretary may require by regulation. 
‘‘(d) DETERMINATIONS BY THE SECRETARY.—Not 
later than September 1 of each of calendar years 2008 
through 2011, the Secretary shall determine for each 
State that submitted an application for a grant under sub-
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section (c) for the fiscal year beginning on September 30th 
of that calendar year if the State and the counties of the 
State increased the aggregate amount that the State and 
such counties expended (excluding amounts from Federal 
sources) on public transportation projects and services 
from the State’s second fiscal year preceding such Sep-
tember 1 to the State’s first fiscal year preceding such 
September 1, the amount of such increase, and the per-
centage of such increase over the State’s second preceding 
fiscal year. 
‘‘(e) GRANTS FOR INCREASED PUBLIC TRANSPOR-
TATION FUNDING.— 
‘‘(1) STATES WITH AN INCREASE OF 10 PER-
CENT OR MORE.—Subject to paragraph (2) and sub-
section (g)— 
‘‘(A) the Secretary shall make a grant for 
each of fiscal years 2008 through 2011 to each 
State— 
‘‘(i) whose percentage increase, as de-
termined by the Secretary under sub-
section (d) with respect to such fiscal year, 
in expenditures for public transportation 
projects and services over the preceding 
fiscal year of the State was 10 percent or 
more; and 
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‘‘(ii) whose aggregate expenditures for 
such projects and services in the State’s 
preceding fiscal year was $1,000,000,000 
or less, as determined by the Secretary 
under subsection (d). 
‘‘(B) the amount of the grant shall be 
equal to the increase in the aggregate amount 
that the State and the counties of the State ex-
pended 
(excluding 
amounts 
from 
Federal 
sources) on public transportation projects and 
services from the second preceding fiscal year of 
the State to the first preceding fiscal year of 
the State, as determined by the Secretary under 
subsection (d). 
‘‘(2) LARGE STATES WITH AN INCREASE OF 1 
PERCENT OR MORE.—Subject to subsection (h), for 
each of fiscal years 2008 through 2011, the Sec-
retary shall make a grant of $50,000,000 to each 
State— 
‘‘(A) whose percentage increase, as deter-
mined by the Secretary under subsection (d) 
with respect to such fiscal year, in expenditures 
for public transportation projects and services 
over the preceding fiscal year of the State was 
1 percent or more; and 
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‘‘(B) whose aggregate expenditures for 
such projects and services in the State’s pre-
ceding 
fiscal 
year 
was 
more 
than 
$1,000,000,000, as determined by the Secretary 
under subsection (d). 
‘‘(f) STATES CREATING FLEXIBLE TRANSPORTATION 
FUNDS.— 
‘‘(1) NEW DEDICATED SOURCE OF REVENUE.— 
‘‘(A) IN GENERAL.—Subject to subsection 
(g), for each of fiscal years 2008 through 2011, 
the 
Secretary 
shall 
make 
a 
grant 
of 
$10,000,000 to each State that established in 
the first preceding fiscal year of the State a 
dedicated source of revenue for carrying out 
only public transportation projects and services 
that the Secretary— 
‘‘(i) determines was not in effect in 
the second preceding fiscal year of the 
State; and 
‘‘(ii) projects will result in an increase 
of 10 percent in State funds available for 
expenditure on such projects and services 
within 2 years after the date of such imple-
mentation. 
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‘‘(B) DEDICATED SOURCE OF REVENUES 
DEFINED.—For purposes of this paragraph, the 
term ‘dedicated source of revenue’ may include 
the dedication of a State motor fuels tax or 
sales tax, interest on existing highway funds, 
motor vehicle excise tax, tolls, loans to be made 
out of highway funds, and such other sources of 
revenue as the Secretary determines. 
‘‘(2) 
UNRESTRICTED
USE
OF
HIGHWAY 
FUNDS.—Subject to subsection (h), for each of fiscal 
years 2008 through 2011, the Secretary shall make 
a grant of $10,000,000 to each State that in the 
preceding fiscal year of the State amended State law 
or the State constitution to allow funds that were re-
stricted for highway purposes only to be used for 
public transportation projects and services as well as 
highway purposes. 
‘‘(g) LIMITATION
FOR STATES ELIGIBILITY
FOR 
MULTIPLE GRANTS.—If the Secretary determines that a 
State is eligible for a grant under more than one of sub-
sections (e)(1), (e)(2), (f)(1), and (f)(2) for a fiscal year, 
the Secretary may only make the grant to the State that 
is for the greatest amount the State is eligible for under 
such subsections. 
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‘‘(h) USE OF GRANTS.—A State may obligate funds 
granted to it under this section for any project or activity 
eligible for assistance under title 23 or chapter 53. 
‘‘(i) GRANT REQUIREMENTS.—Except as otherwise 
provided in this section— 
‘‘(1) a grant under this section being used for 
a public transportation project or activity shall be 
subject to all of the terms and conditions to which 
a grant made under section 5307 is subject; and 
‘‘(2) a grant under this section being used for 
a highway project or activity shall be subject to all 
of the terms and conditions that would be applicable 
to such project or activity if such project or activity 
were being carried out under title 23, United States 
Code. 
‘‘(j) FEDERAL SHARE.—The Federal share of the 
cost of a project or activity funded under this section shall 
be 100 percent. 
‘‘(k) AUTHORIZATIONS OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
for each of fiscal years 2008 through 2011 $250,000,000. 
Such sums shall remain available until expended. 
‘‘(l) PROGRAM EVALUATION.—Not later than 5 years 
after the date of enactment of this section, the Secretary 
shall— 
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‘‘(1) conduct a study to evaluate the pilot pro-
gram authorized by this section; and 
‘‘(2) submit to the Committee on Transpor-
tation and Infrastructure of the House of Represent-
atives and the Committee on Banking, Housing and 
Urban Affairs of the Senate a report describing the 
results of the study.’’. 
(b) CONFORMING AMENDMENT.—The analysis for 
such chapter is amended by adding at the end the fol-
lowing: 
‘‘5341. Flexibility incentive grant pilot program’’. 
Æ 
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