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(1) Section 114(a) of title 23, United States
Code, is amended—
(A) in the first sentence by striking ‘‘high-
ways or portions of highways located on a Fed-
eral-aid system’’ and inserting ‘‘Federal-aid
highway or a portion of a Federal-aid highway’’;
and
(B) by striking the second sentence and in-
serting ‘‘The Secretary shall have the right to
conduct such inspections and take such corrective
action as the Secretary determines to be appro-
priate.’’.
(2) Section 117 of title 23, United States Code,
is amended—
(A) by striking subsection (d); and
(B) by redesignating subsections (e) through
(h) as subsections (d) through (g), respectively.
SEC. 1803. REVISION OF REGULATIONS.
Section 112(b)(3) of title 23, United States Code, is
amended—
(1) by redesignating subparagraph (D) as sub-
paragraph (E); and
(2) by striking subparagraph (C) and inserting
the following:
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‘‘(C) QUALIFIED
PROJECTS.—A qualified
project referred to in subparagraph (A) is a
project under this chapter (including intermodal
projects) for which the Secretary has approved
the use of design-build contracting under criteria
specified in regulations promulgated by the Sec-
retary.
‘‘(D) REGULATORY
PROCESS.—Not later
than 90 days after the date of enactment of the
Safe, Affordable, Flexible, and Efficient Trans-
portation Equity Act of 2005, the Secretary shall
promulgate revised regulations under section
1307(c) of the Transportation Equity Act for
21st Century (23 U.S.C. 112 note; 112 Stat.
230) that—
‘‘(i) do not preclude State transpor-
tation departments or local transportation
agencies from—
‘‘(I) issuing requests for proposals;
‘‘(II) proceeding with awards of
design-build contracts; or
‘‘(III) issuing notices to proceed
with preliminary design work under
design-build contracts;
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prior to compliance with section 102 of the National Envi-
ronmental Policy Act of 1969 (42 U.S.C. 4332);
‘‘(ii) require that the State transpor-
tation department or local transportation
agency receive concurrence from the Sec-
retary before carrying out an activity under
clause (i); and
‘‘(iii) preclude the design-build con-
tractor from proceeding with final design or
construction of any permanent improve-
ment prior to completion of the process
under section 102 of the National Environ-
mental Policy Act of 1969 (42 U.S.C.
4332).’’.
SEC. 1804. PROGRAM EFFICIENCIES—FINANCE.
(a) ADVANCE CONSTRUCTION.—Section 115 of title 23,
United States Code, is amended—
(1) by redesignating subsection (c) as subsection
(d);
(2) 
by 
redesignating 
subsections 
(a)(2),
(a)(2)(A), and (a)(2)(B) as subsections (c), (c)(1),
and (c)(2), respectively, and indenting appropriately;
(3) by striking ‘‘(a) CONGESTION’’ and all that
follows through subsection (a)(1)(B);
(4) by striking subsection (b); and
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(5) by inserting after the section heading the fol-
lowing:
‘‘(a) IN GENERAL.—The Secretary may authorize a
State to proceed with a project authorized under this title—
‘‘(1) without the use of Federal funds; and
‘‘(2) in accordance with all procedures and re-
quirements applicable to the project other than those
procedures and requirements that limit the State to
implementation of a project—
‘‘(A) with the aid of Federal funds pre-
viously apportioned or allocated to the State; or
‘‘(B) with obligation authority previously
allocated to the State.
‘‘(b) OBLIGATION
OF FEDERAL SHARE.—The Sec-
retary, on the request of a State and execution of a project
agreement, may obligate all or a portion of the Federal
share of the project authorized under this section from any
category of funds for which the project is eligible.’’.
(b) OBLIGATION AND RELEASE OF FUNDS.—Section
118 of title 23, United States Code, is amended by striking
subsection (d) and inserting the following:
‘‘(d) OBLIGATION AND RELEASE OF FUNDS.—
‘‘(1) IN GENERAL.—Funds apportioned or allo-
cated to a State for a particular purpose for any fis-
cal year shall be considered to be obligated if a sum
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equal to the total of the funds apportioned or allo-
cated to the State for that purpose for that fiscal year
and previous fiscal years is obligated.
‘‘(2) RELEASED FUNDS.—Any funds released by
the final payment for a project, or by modifying the
project agreement for a project, shall be—
‘‘(A) credited to the same class of funds pre-
viously apportioned or allocated to the State;
and
‘‘(B) immediately available for obligation.
‘‘(3) NET
OBLIGATIONS.—Notwithstanding any
other provision of law (including a regulation), obli-
gations recorded against funds made available under
this section shall be recorded and reported as net obli-
gations.’’.
SEC. 1805. SET-ASIDES FOR INTERSTATE DISCRETIONARY
PROJECTS.
Section 118(c)(1) of title 23, United States Code, is
amended—
(1) by striking ‘‘$50,000,000’’ and all that
follows 
through 
‘‘2003’’ 
and 
inserting
‘‘$93,862,893 for each of fiscal years 2005
through 2009’’; and
(2) by striking ‘‘Transportation Equity Act
for the 21st Century’’ and inserting ‘‘Safe, Ac-
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countable, Flexible, and Efficient Transportation
Equity Act of 2005’’.
SEC. 1806. FEDERAL LANDS HIGHWAYS PROGRAM.
(a) FEDERAL SHARE PAYABLE.—
(1) IN
GENERAL.—Section 120(k) of title 23,
United States Code, is amended—
(A) by striking ‘‘Federal-aid highway’’; and
(B) by striking ‘‘section 104’’ and inserting
‘‘this title or chapter 53 of title 49’’.
(2) TECHNICAL REFERENCES.—Section 120(l) of
title 23, United States Code, is amended by striking
‘‘section 104’’ and inserting ‘‘this title or chapter 53
of title 49’’.
(b) PAYMENTS TO FEDERAL AGENCIES FOR FEDERAL-
AID PROJECTS.—Section 132 of title 23, United States
Code, is amended—
(1) by striking the first 2 sentences and inserting
the following:
‘‘(a) IN GENERAL.—In a case in which a proposed
Federal-aid project is to be undertaken by a Federal agency
in accordance with an agreement between a State and the
Federal agency, the State may—
‘‘(1) direct the Secretary to transfer the funds for
the Federal share of the project directly to the Federal
agency; or