204
ranty that is of a duration sufficient to ensure 
that—
(i) the cost to the State of the project 
that will be carried out is less than the esti-
mated cost to construct the project without 
the warranty plus the estimated costs that 
would be incurred by the State and that 
would otherwise be covered during the pro-
posed warranty period if a warranty were 
in effect; and 
(ii) the estimated cost to road users 
during the warranty period is less than 
such estimated cost without a warranty. 
(B) In determining the sufficient duration 
of a long-term limited warranty under subpara-
graph (A), the Secretary shall establish separate 
sufficient 
durations 
for 
different 
types 
of 
projects, such as initial construction, pavement 
resurfacing and rehabilitation, and pavement 
markings. 
(C) A requirement that the limited war-
ranty must address, at a minimum—
(i) the responsibilities of the warranty 
provider;
205
(ii) the responsibilities of the Depart-
ment of Transportation; 
(iii) the terms of the warranty, includ-
ing duration and, if applicable, traffic vol-
umes and vehicle classification; and 
(iv) performance criteria to be met to 
determine if maintenance is required. 
(2) FACTORS TO CONSIDER.—In issuing the rule, 
the Secretary may consider the following factors as 
requirements for the warranty contract for eligibility 
under the pilot program: 
(A) A plan to account for inflation during 
the warranty period. 
(B) The frequency of performance assess-
ments performed. 
(C) The response time for repairs. 
(D) A plan for emergency repairs. 
(E) Clearly set out limits of liability under 
the warranty, if any. 
(F) Dispute resolution provisions. 
(G) A severability provision. 
(H) Other provisions the Secretary con-
siders necessary for carrying out the program. 
(g) SAVINGS.—Section 112 of title 23, United States 
Code, shall apply to the projects carried out under this sec-
206
tion unless the Secretary determines that applying such sec-
tion to such projects is inconsistent with the provisions of 
this section. 
(h) REPORTS.—Not later than 5 years after the date 
of enactment of this Act and every year thereafter, the Sec-
retary shall transmit to the Committee on Transportation 
and Infrastructure of the House of Representatives and the 
Committee on Environment and Public Works of the Senate 
a report outlining activities carried out under the program 
and the results of the program. 
SEC. 1503. PRIVATE INVESTMENT STUDY. 
(a) STUDY.—Not later than 6 months after the date 
of enactment of this Act, the Secretary shall enter into an 
agreement with the National Academy of Sciences to con-
duct a comprehensive study of private investment in surface 
transportation infrastructure. 
(b) MATTERS TO BE EVALUATED.—Under the agree-
ment, the National Academy of Sciences shall evaluate the 
advantages and disadvantages of private investment in sur-
face transportation infrastructure and the impact of such 
investment on the ability of State and local authorities to 
use innovative financing, including—
(1) preconstruction funding requirements; 
(2) integration of private investment in the 
transportation planning process;
207
(3) use of toll revenues by State and local au-
thorities; 
(4) use of toll credits by State and local authori-
ties; 
(5) requirements for debt financing instruments, 
reimbursable expenses, and conditions on payments; 
(6) limitation on fees charged at federally funded 
fringe and corridor parking facilities; 
(7) revenues needed to provide a reasonable rate 
of return to private investors; 
(8) costs to users of facilities due to imposition 
of tolls; 
(9) sales-in-lease-out arrangement of transpor-
tation assets; and 
(10) such other matters as the Secretary con-
siders appropriate. 
(c) REPORT.—
(1) TO SECRETARY.—Under the agreement, the 
National Academy of Sciences shall submit to the Sec-
retary a report on the results of the study by such 
date as the Secretary may require. 
(2) TO CONGRESS.—Not later than January 1, 
2007, the Secretary shall transmit to the Committee 
on Transportation and Infrastructure of the House of 
Representatives and the Committee on Environment
208
and Public Works of the Senate a copy of the report 
of the National Academy of Sciences, together with 
such recommendations as the Secretary considers ap-
propriate. 
SEC. 1504. HIGHWAYS FOR LIFE PILOT PROGRAM. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary shall establish 
and implement a pilot program to be known as the 
‘‘Highways for LIFE pilot program’’. 
(2) PURPOSE.—The purpose of the pilot program 
shall be to advance longer-lasting highways using in-
novative technologies and practices to accomplish the 
fast construction of efficient and safe highways and 
bridges. 
(3) OBJECTIVES.—Under the pilot program, the 
Secretary shall provide leadership and incentives to 
demonstrate and promote state-of-the-art technologies, 
elevated performance standards, and new business 
practices in the highway construction process that re-
sult in improved safety, faster construction, reduced 
congestion from construction, and improved quality 
and user satisfaction. 
(b) PROJECTS.—
(1) APPLICATIONS.—To be eligible to participate 
in the pilot program, a State shall submit to the Sec-
209
retary an application that is in such form and con-
tains such information as the Secretary requires. 
Each application shall contain a description of pro-
posed projects to be carried by the State under the 
pilot program. 
(2) ELIGIBILITY.—A proposed project shall be el-
igible for assistance under the pilot program if the 
project—
(A) constructs, reconstructs, or rehabilitates 
a route or connection on a Federal-aid highway 
eligible for assistance under chapter 1 of title 23, 
United States Code; 
(B) uses innovative technologies, manufac-
turing processes, financing, or contracting meth-
ods that improve safety, reduce congestion due to 
construction, and improve quality; and 
(C) meets additional criteria as determined 
by the Secretary. 
(3) PROJECT
PROPOSAL.—A project proposal 
submitted under paragraph (1) shall contain—
(A) an identification and description of the 
projects to be delivered; 
(B) a description of how the projects will 
result in improved safety, faster construction, re-
210
duced congestion due to construction, user satis-
faction, and improved quality; 
(C) a description of the innovative tech-
nologies, manufacturing processes, financing, 
and contracting methods that will be used for the 
proposed projects; and 
(D) such other information as the Secretary 
may require. 
(4) SELECTION CRITERIA.—In selecting projects 
for approval under this section, the Secretary shall 
ensure that the projects provide an evaluation of a 
broad range of technologies in a wide variety of 
project types and shall give priority to the projects 
that—
(A) address achieving the Highways for 
LIFE performance standards for quality, safety, 
and speed of construction; 
(B) deliver and deploy innovative tech-
nologies, manufacturing processes, financing, 
contracting practices, and performance measures 
that will demonstrate substantial improvements 
in safety, congestion, quality, and cost-effective-
ness; 
(C) include innovation that will lead to 
change in the administration of the State’s
211
transportation program to more quickly con-
struct long-lasting, high-quality, cost-effective 
projects that improve safety and reduce conges-
tion; 
(D) are or will be ready for construction 
within 12 months of approval of the project pro-
posal; and 
(E) meet such other criteria as the Sec-
retary determines appropriate. 
(5) FINANCIAL ASSISTANCE.—
(A) FUNDS
FOR
HIGHWAYS
FOR
LIFE 
PROJECTS.—Out of amounts made available to 
carry out this section for a fiscal year, the Sec-
retary may allocate to a State up to 20 percent, 
but not more than $15,000,000, of the total cost 
of a project approved under this section. Not-
withstanding any other provision of law, funds 
allocated to a State under this subparagraph 
may be applied to the non-Federal share of the 
cost of construction of a project under title 23, 
United States Code. 
(B) USE OF APPORTIONED FUNDS.—A State 
may obligate not more than 10 percent of the 
amount apportioned to the State under 1 or 
more of paragraphs (1), (2), (3), and (4) of sec-
212
tion 104(b) of title 23, United States Code, for 
a fiscal year for projects approved under this sec-
tion. 
(C) INCREASED
FEDERAL
SHARE.—Not-
withstanding sections 120 and 129 of title 23, 
United States Code, the Federal share payable on 
account of any project constructed with Federal 
funds allocated under this section, or appor-
tioned under section 104(b) of such title, to a 
State under such title and approved under this 
section may amount to 100 percent of the cost of 
construction of such project. 
(D) LIMITATION ON STATUTORY CONSTRUC-
TION.—Except as provided in subparagraph (C), 
nothing in this subsection shall be construed as 
altering or otherwise affecting the applicability 
of the requirements of chapter 1 of title 23, 
United States Code (including requirements re-
lating to the eligibility of a project for assistance 
under the program and the location of the 
project), to amounts apportioned to a State for 
a program under section 104(b) that are obli-
gated by the State for projects approved under 
this subsection.
213
(6) PROJECT SELECTIONS.—In the period of fis-
cal years 2005 through 2009, the Secretary shall ap-
prove at least one project in each State for participa-
tion in the pilot program and for financial assistance 
under paragraph (5) if the State submits an applica-
tion and the project meets the eligibility requirements 
and selection criteria under this subsection. 
(c) TECHNOLOGY PARTNERSHIPS.—
(1) IN
GENERAL.—The Secretary may make 
grants or enter into cooperative agreements or other 
transactions to foster the development, improvement, 
and creation of innovative technologies and facilities 
to improve safety, enhance the speed of highway con-
struction, and improve the quality and durability of 
highways. 
(2) FEDERAL SHARE.—The Federal share of the 
cost of an activity carried out under this subsection 
shall not exceed 80 percent. 
(d) TECHNOLOGY TRANSFER AND INFORMATION DIS-
SEMINATION.—
(1) IN GENERAL.—The Secretary shall conduct a 
Highways for LIFE technology transfer program. 
(2) AVAILABILITY OF INFORMATION.—The Sec-
retary shall ensure that the information and tech-
nology used, developed, or deployed under this sub-
214
section is made available to the transportation com-
munity and the public. 
(e) STAKEHOLDER INPUT AND INVOLVEMENT.—The 
Secretary shall establish a process for stakeholder input and 
involvement in the development, implementation, and eval-
uation of the Highways for LIFE pilot program. The proc-
ess may include participation by representatives of State 
departments of transportation and other interested persons. 
(f) PROJECT MONITORING
AND EVALUATION.—The 
Secretary shall monitor and evaluate the effectiveness of 
any activity carried out under this section. 
(g) CONTRACT AUTHORITY.—Funds authorized to be 
appropriated to carry out this section shall be available for 
obligation in the same manner as if the funds were appor-
tioned under chapter 1 of title 23, United States Code. 
(h) STATE
DEFINED.—In this section, the term 
‘‘State’’ has the meaning such term has under section 
101(a) of title 23, United States Code. 
Subtitle F—Finance 
SEC. 1601. TRANSPORTATION INFRASTRUCTURE FINANCE 
AND INNOVATION ACT. 
(a) DEFINITIONS.—Section 181 of title 23, United 
States Code, is amended—
(1) in paragraph (3)—
(A) by striking ‘‘category’’; and
215
(B) by striking ‘‘offered into the capital 
markets’’; 
(2) by striking paragraph (7); 
(3) by redesignating paragraphs (8) through (15) 
as paragraphs (7) through (14), respectively; 
(4) by striking the period at the end of para-
graph (8)(B) (as so redesignated) and inserting a 
semicolon; and 
(5) in paragraph (10) (as so redesignated) by 
striking ‘‘bond’’ and inserting ‘‘credit’’. 
(b) DETERMINATION OF ELIGIBILITY.—Section 182(a) 
of such title is amended—
(1) by striking paragraphs (1) and (2) and in-
serting the following: 
‘‘(1) INCLUSION IN TRANSPORTATION PLANS AND 
PROGRAMS.—The project shall satisfy the applicable 
planning and programming requirements of sections 
134 and 135 at such time as an agreement to make 
available a Federal credit instrument is entered into 
under this subchapter. 
‘‘(2) APPLICATION.—A State, a local government, 
public authority, public-private partnership, or any 
other legal entity undertaking the project and author-
ized by the Secretary, shall submit a project applica-
tion to the Secretary.’’;
216
(2) 
in 
paragraph 
(3)(A)(i) 
by 
striking 
‘‘$100,000,000’’ and inserting ‘‘$50,000,000’’; 
(3) 
in 
paragraph 
(3)(B) 
by 
striking 
‘‘$30,000,000’’ and inserting ‘‘$15,000,000’’; and 
(4) in paragraph (4)—
(A) by striking ‘‘Project financing’’ and in-
serting ‘‘The Federal credit instrument’’; and 
(B) by inserting before the period at the end 
‘‘that also secure the project obligations’’. 
(c) PROJECT SELECTION.—Section 182(b) of such title 
is amended—
(1) in paragraph (1) by striking ‘‘criteria’’ the 
second place it appears and inserting ‘‘requirements’’; 
and 
(2) in paragraph (2)(B) by inserting ‘‘, which 
may be the Federal credit instrument,’’ after ‘‘obliga-
tions’’. 
(d) SECURED LOANS.—
(1) AGREEMENTS.—Section 183(a)(1) of such 
title is amended—
(A) in each of subparagraphs (A) and (B) 
by inserting ‘‘of any project selected under sec-
tion 602’’ after ‘‘costs’’; and
217
(B) by striking the semicolon at the end of 
subparagraph (B) and all that follows through 
‘‘under section 602’’. 
(2) 
INVESTMENT-GRADE
RATING
REQUIRE-
MENT.—Section 183(a)(4) of such title is amended—
(A) by striking ‘‘The funding’’ and insert-
ing ‘‘The execution’’; and 
(B) by striking the first comma and all that 
follows through ‘‘1 rating agency’’. 
(3) TERMS AND LIMITATIONS.—Section 183(b) of 
such title is amended—
(A) in paragraph (2) by inserting ‘‘the less-
er of’’ after ‘‘exceed’’; 
(B) in paragraph (2) by inserting ‘‘or the 
amount of the senior project obligations’’ after 
‘‘costs’’; 
(C) in paragraph (3)(A)(i) by inserting 
‘‘that also secure the senior project obligations’’ 
after ‘‘sources’’; and 
(D) in paragraph (4) by striking ‘‘market-
able’’. 
(4) REPAYMENT.—Section 183(c) is amended—
(A) by striking paragraph (3); and 
(B) by redesignating paragraphs (4) and 
(5) as paragraphs (3) and (4), respectively.
218
(e) LINES OF CREDIT.—
(1) TERMS AND LIMITATIONS.—Section 184(b) of 
such title is amended—
(A) in paragraph (3)—
(i) by striking the first comma; and 
(ii) by striking ‘‘any debt service re-
serve fund, and any other available reserve’’ 
and inserting ‘‘but not including reasonably 
required financing reserves’’; 
(B) in paragraph (4)—
(i) by striking ‘‘marketable’’; 
(ii) by striking ‘‘on which’’ and insert-
ing ‘‘of execution of’’; and 
(iii) by striking ‘‘is obligated’’ and in-
serting ‘‘agreement’’; and 
(C) in paragraph (5)(A)(i) by inserting 
‘‘that also secure the senior project obligations’’ 
after ‘‘sources’’; and 
(2) REPAYMENT.—Section 184(c) of such title is 
amended—
(A) in paragraph (2)—
(i) by striking ‘‘scheduled’’; 
(ii) by inserting ‘‘be scheduled to’’ after 
‘‘shall’’; and
219
(iii) by striking ‘‘be fully repaid, with 
interest,’’ and inserting ‘‘conclude, with full 
repayment of principal and interest,’’; and 
(B) by striking paragraph (3). 
(f) PROGRAM ADMINISTRATION.—Section 185 of such 
title is amended to read as follows: 
‘‘§ 185. Program administration 
‘‘(a) REQUIREMENT.—The Secretary shall establish a 
uniform system to service the Federal credit instrument 
made available under this chapter. 
‘‘(b) FEES.—The Secretary may establish fees at a 
level to cover all or a portion of the costs to the Federal 
Government of servicing the Federal credit instrument. 
‘‘(c) SERVICES.—The Secretary may identify a finan-
cial entity to assist the Secretary in servicing a Federal 
credit instrument. The services—
‘‘(1) shall act as the agent for the Secretary; and 
‘‘(2) shall receive a servicing fee, subject to ap-
proval by the Secretary. 
‘‘(d) ASSISTANCE FROM EXPERT FIRMS.—The Sec-
retary may retain the services of one or more expert firms, 
including counsel, in the field of municipal and project fi-
nance to assist in the underwriting and servicing of Federal 
credit instruments.’’.
220
(g) FUNDING.—Section 188 of such title is amended 
to read as follows: 
‘‘§ 188. Funding 
‘‘(a) FUNDING.—
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated from the Highway Trust Fund (other 
than the Mass Transit Account) $130,000,000 for fis-
cal year 2004 and $140,000,000 for each of fiscal 
years 2005 through 2009 to carry out this chapter. 
‘‘(2) 
ADMINISTRATIVE
COSTS.—From 
funds 
made available under paragraph (1), the Secretary 
may use, for the administration of this subchapter, 
not more than $3,000,000 for each of fiscal years 
2004 through 2009. 
‘‘(3) AVAILABILITY.—Amounts made available 
under paragraph (1) shall remain available until ex-
pended. 
‘‘(b) CONTRACT AUTHORITY.—
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, approval by the Secretary of a Fed-
eral credit instrument that uses funds made available 
under this chapter shall be deemed to be acceptance 
by the United States of a contractual obligation to 
fund the Federal credit instrument.