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‘5306. Private enterprise participation in planning; relationship to other limita-
tions.’.
SEC. 3008. URBANIZED AREA FORMULA GRANTS. 
(a) TECHNICAL AMENDMENTS.—Section 5307 is 
amended—
(1) by striking subsections (h) and (k); and 
(2) by redesignating subsections (i), (j), (l), 
(m), and (n) as subsections (h), (i), (j), (k), and (l), 
respectively. 
(b) DEFINITIONS.—Section 5307(a)(2)(A) is amend-
ed—
(1) by striking ‘a person’ and inserting ‘an enti-
ty’; and 
(2) by striking ‘section 5305(a) of this title’ 
and inserting ‘chapter 52’. 
(c) GENERAL
AUTHORITY.—Section 5307(b) is 
amended—
(1) by striking paragraph (1) and inserting the 
following: 
‘(1) GRANTS.—The Secretary may make grants 
under this section for—
‘(A) capital projects and associated capital 
maintenance items; 
‘(B) planning; 
‘(C) transit enhancements; and
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‘(D) operating costs of equipment and fa-
cilities for use in public transportation in an ur-
banized area with a population of less than 
200,000.’; 
(2) in the heading to paragraph (2) by striking 
‘FISCAL YEARS 2003 AND 2004 AND FOR THE PERIOD 
OF OCTOBER 1, 2004, THROUGH MAY 31, 2005’ and in-
serting ‘FISCAL YEARS 2003 THROUGH 2005’; 
(3) in paragraph (2)(A) by striking ‘fiscal year 
2003’ and all that follows through ‘2005’ and insert-
ing ‘fiscal years 2003, 2004, and 2005,’; 
(4) in paragraph (3) by striking ‘section 
5305(a) of this title’ and inserting ‘chapter 52’; and 
(5) in paragraph (3)(A) by striking ‘section 
5303 of this title’ and inserting ‘chapter 52’. 
(d) GRANT
RECIPIENT
REQUIREMENTS.—Section 
5307(d)(1) is amended—
(1) in subparagraph (A) by inserting ‘, includ-
ing safety and security aspects of the program’ after 
‘program’; 
(2) in subparagraph (H) by striking ‘sections 
5301(a) and (d), 5303–5306, and 5310(a)–(d) of 
this title’ and inserting ‘subsections (a) and (d) of 
section 5301 and sections 5303 through 5306’;
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(3) in subparagraph (I) by striking ‘and’ at the 
end; and 
(4) by adding at the end the following: 
‘(K) in the case of a recipient for an ur-
banized area with a population of at least 
200,000—
‘(i) will expend one percent of the 
amount the recipient receives each fiscal 
year under this section for projects for 
transit enhancements, as defined in section 
5302(a); and 
‘(ii) will submit an annual report list-
ing projects carried out in the preceding 
fiscal year with those funds; and’. 
(e) GOVERNMENT’S
SHARE
OF
COSTS.—Section 
5307(e) is amended to read as follows: 
‘(e) GOVERNMENT’S SHARE OF COSTS.—
‘(1) CAPITAL PROJECTS.—A grant for a capital 
project (including associated capital maintenance 
items) under this section shall be for 80 percent of 
the net project cost of the project. The recipient may 
provide additional local matching amounts. 
‘(2) OPERATING EXPENSES.—A grant for oper-
ating expenses under this section may not exceed 50 
percent of the net project cost of the project.
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‘(3) REMAINDER.—The remainder of the net 
project cost shall be provided—
‘(A) in cash from sources other than 
amounts of the Government or revenues from 
providing public transportation (excluding reve-
nues derived from the sale of advertising and 
concessions); 
‘(B) from an undistributed cash surplus, a 
replacement or depreciation cash fund or re-
serve, or new capital; and 
‘(C) from amounts received under a service 
agreement with a State or local social service 
agency or private social service organization.’. 
(f) REVIEWS, AUDITS, AND EVALUATIONS.—Section 
5307(h)(1)(A) (as redesignated by subsection (a) of this 
section) is amended by striking ‘shall’ and inserting ‘may’. 
(g) RELATIONSHIP
TO
OTHER
LAWS.—Section 
5307(l) (as redesignated by subsection (a) of this section) 
is amended—
(1) by striking paragraph (1); 
(2) by redesignating paragraph (2) as para-
graph (1); 
(3) by inserting ‘This chapter.—’ before ‘Sec-
tions 5302’; 
(4) by adding at the end the following:
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‘(2) CHAPTER 15 OF TITLE 5.—The provision of 
assistance under this chapter shall not be construed 
as bringing within the application of chapter 15 of 
title 5 any nonsupervisory employee of a public 
transportation system (or any other agency or entity 
performing related functions) to which such chapter 
is otherwise inapplicable.’; and 
(5) by aligning the left margin of paragraph (1) 
(as so redesignated) with paragraph (2) (as added 
by paragraph (4) of this subsection). 
(h) TREATMENT.—At the end of section 5307, add 
the following: 
‘(m) TREATMENT.—For purposes of this section, the 
United States Virgin Islands shall be treated as an urban-
ized area, as defined in section 5302.’. 
SEC. 3009. CLEAN FUELS FORMULA GRANT PROGRAM. 
Section 5308 is amended to read as follows: 
‘§ 5308. Clean fuels formula grant program 
‘(a) DEFINITIONS.—In this section, the following 
definitions apply: 
‘(1) CLEAN FUEL BUS.—The term ‘‘clean fuel 
bus’’ means a passenger vehicle used to provide pub-
lic transportation that—
‘(A) is powered by—
‘(i) compressed natural gas;
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‘(ii) liquefied natural gas; 
‘(iii) biodiesel fuels; 
‘(iv) batteries; 
‘(v) alcohol-based fuels; 
‘(vi) hybrid electric; 
‘(vii) fuel cell; 
‘(viii) clean diesel, to the extent al-
lowed under this section; or 
‘(ix) other low or zero emissions tech-
nology; and 
‘(B) the Administrator of the Environ-
mental Protection Agency has certified suffi-
ciently reduces harmful emissions. 
‘(2) ELIGIBLE
PROJECT.—The term ‘‘eligible 
project’’—
‘(A) means a project in a nonattainment or 
maintenance 
area 
described 
in 
paragraph 
(4)(A) for—
‘(i) purchasing or leasing clean fuel 
buses, including buses that employ a light-
weight composite primary structure; 
‘(ii) constructing or leasing clean fuel 
buses or electrical recharging facilities and 
related equipment for such buses; or
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‘(iii) improving existing public trans-
portation facilities to accommodate clean 
fuel buses; and 
‘(B) at the discretion of the Secretary, may 
include a project located in a nonattainment or 
maintenance 
area 
described 
in 
paragraph 
(3)(A) relating to clean fuel, biodiesel, hybrid 
electric, or zero emissions technology buses that 
exhibit equivalent or superior emissions reduc-
tions to existing clean fuel or hybrid electric 
technologies. 
‘(3) MAINTENANCE AREA.—The term ‘‘mainte-
nance area’’ has the meaning such term has under 
section 101 of title 23. 
‘(4) RECIPIENT.—
‘(A) IN GENERAL.—The term ‘‘recipient’’ 
means a designated recipient (as defined in sec-
tion 5307(a)(2)) for an area that, and a recipi-
ent for an urbanized area with a population of 
less than 200,000 that—
‘(i) is designated as a nonattainment 
area for ozone or carbon monoxide under 
section 107(d) of the Clean Air Act (42 
U.S.C. 7407(d)); or
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‘(ii) is a maintenance area for ozone 
or carbon monoxide. 
‘(B) SMALLER URBANIZED AREAS.—In the 
case of an urbanized area with a population of 
less than 200,000, the State in which the area 
is located shall act as the recipient for the area 
under this section. 
‘(b) AUTHORITY.—The Secretary shall make grants 
in accordance with this section to recipients to finance eli-
gible projects. 
‘(c) APPORTIONMENT OF FUNDS.—
‘(1) FORMULA.—The Secretary shall apportion 
among recipients amounts made available to carry 
out this section for a fiscal year. Of such amounts—
‘(A) two-thirds shall be apportioned to re-
cipients serving urbanized areas with a popu-
lation of at least 1,000,000, of which—
‘(i) 50 percent shall be apportioned so 
that each such recipient receives a grant 
under this section in an amount equal to 
the ratio that—
‘(I) the number of vehicles in the 
bus fleet of the recipient, weighted by 
severity of nonattainment for the area 
served by the recipient; bears to
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‘(II) the total number of vehicles 
in the bus fleets of all such recipients, 
weighted by severity of nonattainment 
for all areas served by such recipients; 
and 
‘(ii) 50 percent shall be apportioned 
so that each such recipient receives a grant 
under this section in an amount equal to 
the ratio that—
‘(I) the number of bus passenger 
miles (as defined in section 5336(c)) 
of the recipient, weighted by severity 
of nonattainment of the area served 
by the recipient; bears to 
‘(II) the total number of bus pas-
senger miles (as defined in section 
5336(c)) 
of 
all 
such 
recipients, 
weighted by severity of nonattainment 
of all areas served by such recipients; 
and 
‘(B) one-third shall be apportioned to re-
cipients serving urbanized areas with a popu-
lation of less than 1,000,000, of which—
‘(i) 50 percent shall be apportioned so 
that each such recipient receives a grant
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under this section in an amount equal to 
the ratio that—
‘(I) the number of vehicles in the 
bus fleet of the recipient, weighted by 
severity of nonattainment for the area 
served by the recipient; bears to 
‘(II) the total number of vehicles 
in the bus fleets of all such recipients, 
weighted by severity of nonattainment 
for all areas served by such recipients; 
and 
‘(ii) 50 percent shall be apportioned 
so that each such recipient receives a grant 
under this section in an amount equal to 
the ratio that—
‘(I) the number of bus passenger 
miles (as defined in section 5336(c)) 
of the recipient, weighted by severity 
of nonattainment of the area served 
by the recipient; bears to 
‘(II) the total number of bus pas-
senger miles (as defined in section 
5336(c)) 
of 
all 
such 
recipients, 
weighted by severity of nonattainment 
of all areas served by such recipients.
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‘(2) WEIGHTING OF SEVERITY OF NONATTAIN-
MENT.—
‘(A) IN GENERAL.—For purposes of para-
graph (1), subject to subparagraph (B), the 
number of buses in the bus fleet, or the number 
of passenger miles, shall be multiplied by a fac-
tor of—
‘(i) 1.0 if, at the time of the appor-
tionment, the area is a maintenance area 
for ozone or carbon monoxide; 
‘(ii) 1.1 if, at the time of the appor-
tionment, the area is classified as a mar-
ginal ozone nonattainment area under sub-
part 2 of part D of title I of the Clean Air 
Act (42 U.S.C. 7511 et seq.); 
‘(iii) 1.2 if, at the time of the appor-
tionment, the area is classified as a mod-
erate ozone nonattainment area under sub-
part 2 of such part; 
‘(iv) 1.3 if, at the time of the appor-
tionment, the area is classified as a serious 
ozone nonattainment area under subpart 2 
of such part; 
‘(v) 1.4 if, at the time of the appor-
tionment, the area is classified as a severe
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ozone nonattainment area under subpart 2 
of such part; or 
‘(vi) 1.5 if, at the time of the appor-
tionment, the area is classified as an ex-
treme ozone nonattainment area under 
subpart 2 of such part. 
‘(B) ADDITIONAL ADJUSTMENT FOR CAR-
BON
MONOXIDE
AREAS.—If, in addition to 
being classified as a nonattainment or mainte-
nance area for ozone under subpart 2 of such 
part, the area was also classified under subpart 
3 of such part as a nonattainment area for car-
bon monoxide, the weighted nonattainment or 
maintenance area fleet and passenger miles for 
the recipient, as calculated under subparagraph 
(A), shall be further multiplied by a factor of 
1.2. 
‘(d) CLEAN DIESEL BUSES.—Not more than 35 per-
cent of the amount made available by or appropriated 
under section 5338 in each fiscal year to carry out this 
section may be made available to fund clean diesel buses. 
‘(e) GRANT REQUIREMENTS.—
‘(1) IN GENERAL.—A grant under this section 
shall be subject to the requirements of section 5307.
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‘(2) GOVERNMENT’S SHARE OF COSTS FOR CER-
TAIN PROJECTS.—Section 5323(i) applies to projects 
carried out under this section. 
‘(f) AVAILABILITY OF FUNDS.—Any amount made 
available or appropriated under this section—
‘(1) shall remain available to a project for 1 
year after the fiscal year for which the amount is 
made available or appropriated; and 
‘(2) that remains unobligated at the end of the 
period described in paragraph (1) shall be added to 
the amount made available in the following fiscal 
year.’. 
SEC. 3010. CAPITAL INVESTMENT GRANTS. 
(a) SECTION HEADING.—Section 5309 is amended by 
striking the section heading and inserting the following: 
‘§ 5309. Capital investment grants’. 
(b) LOANS FOR REAL PROPERTY INTERESTS.—Sec-
tion 5309 is amended—
(1) in subsections (a)(1) and (a)(2) by striking 
‘and loans’; 
(2) by striking subsections (b) and (c); and 
(3) by redesignating subsection (d) as sub-
section (b).
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(c) PROJECT AS PART OF APPROVED PROGRAM OF 
PROJECTS.—Section 5309(b) (as redesignated by sub-
section (b) of this section) is amended—
(1) by striking ‘Except as provided in sub-
sections (b)(2) and (e) of the section, the’ and in-
serting ‘The’; and 
(2) by striking ‘or loan’. 
(d) CRITERIA
AND
FUNDING.—Section 5309 is 
amended by striking subsections (e) through (p) and in-
serting the following: 
‘(c) MAJOR
CAPITAL
INVESTMENT
GRANTS
OF 
$75,000,000 OR MORE.—
‘(1) FULL
FUNDING
GRANT
AGREEMENT.—A 
major new fixed guideway capital project financed 
under this subsection shall be carried out through a 
full funding grant agreement. The Secretary shall 
enter into a full funding grant agreement based on 
the evaluations and ratings required under this sub-
section. The Secretary shall not enter into a full 
funding grant agreement for a project unless that 
project is authorized for final design and construc-
tion. 
‘(2) APPROVAL
OF
GRANTS.—The Secretary 
may approve a grant under this section for a major 
new fixed guideway capital project only if the Sec-
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retary, based upon evaluations and considerations 
set forth in paragraph (3), determines that the pro-
posal is—
‘(A) based on the results of an alternatives 
analysis and preliminary engineering; 
‘(B) justified based on a comprehensive re-
view of its mobility improvements, environ-
mental benefits, cost effectiveness, operating ef-
ficiencies, and transit supportive policies, and 
existing land use; and 
‘(C) supported by an acceptable degree of 
local financial commitment (including evidence 
of stable and dependable financing sources) to 
construct, maintain, and operate the system or 
extension. 
‘(3) CONSIDERATIONS.—
‘(A) RESULTS OF ALTERNATIVES ANALYSIS 
AND
PRELIMINARY
ENGINEERING.—In evalu-
ating a proposed project for purposes of making 
the finding required by paragraph (2)(A), the 
Secretary shall analyze and consider the results 
of the alternatives analysis and preliminary en-
gineering for the project. 
‘(B) PROJECT JUSTIFICATION.—In evalu-
ating a proposed project for purposes of making
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the finding required by paragraph (2)(B), the 
Secretary shall—
‘(i) consider the direct and indirect 
costs of relevant alternatives; 
‘(ii) consider factors such as conges-
tion relief, improved mobility, air pollution, 
noise pollution, energy consumption, and 
all associated ancillary and mitigation 
costs necessary to carry out each alter-
native analyzed and recognize reductions in 
local infrastructure costs achieved through 
compact land use development; 
‘(iii) identify and consider public 
transportation supportive existing land use 
policies and future patterns and the cost of 
suburban sprawl; 
‘(iv) consider the degree to which the 
project increases the mobility of the public 
transportation dependent population or 
promotes economic development; 
‘(v) consider population density and 
current transit ridership in the corridor; 
‘(vi) consider the technical capability 
of the grant recipient to construct the 
project;
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‘(vii) adjust the project justification to 
reflect differences in local land, construc-
tion, and operating costs; and 
‘(viii) consider other factors that the 
Secretary determines appropriate to carry 
out this chapter. 
‘(C) LOCAL FINANCIAL COMMITMENT.—In 
evaluating a proposed project under paragraph 
(2)(C), the Secretary shall require that—
‘(i) the proposed project plan provides 
for the availability of contingency amounts 
that the Secretary determines to be reason-
able to cover unanticipated cost increases; 
‘(ii) each proposed local source of cap-
ital and operating financing is stable, reli-
able, and available within the proposed 
project timetable; and 
‘(iii) local resources are available to 
operate the overall proposed public trans-
portation system (including essential feeder 
bus and other services necessary to achieve 
the projected ridership levels) without re-
quiring a reduction in existing public 
transportation services to operate the pro-
posed project.
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‘(D) ASSESSMENT
OF
LOCAL
FINANC-
ING.—In assessing the stability, reliability, and 
availability of proposed sources of local financ-
ing under paragraph (2)(C), the Secretary shall 
consider—
‘(i) existing grant commitments; 
‘(ii) the degree to which financing 
sources are dedicated to the purposes pro-
posed; 
‘(iii) any debt obligation that exists or 
is proposed by the recipient for the pro-
posed project or other public transpor-
tation purpose; and 
‘(iv) the extent to which the project 
has a local financial commitment that ex-
ceeds the required non-Federal share of 
the cost of the project. 
‘(4) EVALUATION AND RATING OF PROJECTS.—
A proposed project under this subsection may ad-
vance from alternatives analysis to preliminary engi-
neering, and may advance from preliminary engi-
neering to final design and construction, only if the 
Secretary finds that the project meets the require-
ments of this section and there is a reasonable likeli-
hood that the project will continue to meet such re-
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quirements. In making the findings, the Secretary 
shall evaluate and rate the project as ‘‘highly rec-
ommended’’, 
‘‘recommended’’, 
or 
‘‘not 
rec-
ommended’’ based on the results of alternatives 
analysis, the project justification criteria, and the 
degree of local financial commitment, as required 
under this subsection. In rating the projects, the 
Secretary shall provide, in addition to the overall 
project rating, individual ratings for each of the cri-
teria established by regulation. 
‘(5) MAJOR
DEFINED.—In this section, the 
term ‘‘major’’, as used with respect to a new fixed 
guideway capital project, means the Federal assist-
ance provided or to be provided under this section 
for the project is $75,000,000 or more. 
‘(d) CAPITAL INVESTMENT GRANTS LESS THAN 
$75,000,000.—
‘(1) IN GENERAL.—Subject to the provisions of 
this subsection, if the Federal assistance provided or 
to be provided under this section with respect to a 
new fixed guideway capital project is less than 
$75,000,000, and not less than $25,000,000, the 
project shall be subject to the requirements in this 
subsection.
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‘(2) SELECTION CRITERIA.—The Secretary may 
provide Federal assistance under this subsection 
with respect to a proposed project only if the Sec-
retary finds that the project is—
‘(A) based on the results of planning and 
alternatives analysis; 
‘(B) justified based on a review of its pub-
lic transportation supportive land use policies, 
cost effectiveness, and effect on local economic 
development; and 
‘(C) supported by an acceptable degree of 
local financial commitment. 
‘(3) PLANNING AND ALTERNATIVES.—In evalu-
ating a project under paragraph (2)(A), the Sec-
retary shall analyze and consider the results of plan-
ning and alternatives analysis for the project. 
‘(4) PROJECT JUSTIFICATION.—For purposes of 
making the finding under paragraph (2)(B), the 
Secretary shall—
‘(A) determine the degree to which the 
project is consistent with local land use policies 
and is likely to achieve local developmental 
goals;
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‘(B) determine the cost effectiveness of the 
project at the time of the initiation of revenue 
service; 
‘(C) determine the degree to which the 
project will have a positive effect on local eco-
nomic development; 
‘(D) consider the reliability of the forecasts 
of costs and ridership associated with the 
project; and 
‘(E) consider other factors that the Sec-
retary determines appropriate to carry out this 
subsection. 
‘(5) LOCAL
FINANCIAL
COMMITMENT.—For 
purposes of paragraph (2)(C), the Secretary shall re-
quire that each proposed local source of capital and 
operating financing is stable, reliable, and available 
within the proposed project timetable. 
‘(6) ADVANCEMENT OF PROJECT TO DEVELOP-
MENT AND CONSTRUCTION.—
‘(A) GENERAL RULE.—A proposed project 
under this subsection may advance from plan-
ning and alternatives analysis to project devel-
opment and construction only if—
‘(i) the Secretary finds that the 
project meets the requirements of this sub-
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section and there is a reasonable likelihood 
that the project will continue to meet such 
requirements; and 
‘(ii) the metropolitan planning organi-
zation has adopted the locally preferred al-
ternative for the project into the long-
range transportation plan. 
‘(B) EVALUATION.—In making the find-
ings under subparagraph (A), the Secretary 
shall evaluate and rate the project as ‘‘rec-
ommended’’ or ‘‘not recommended’’ based on 
the results of the analysis of the project jus-
tification criteria and the degree of local finan-
cial commitment, as required by this subsection. 
‘(7) CONTENTS
OF
PROJECT
CONSTRUCTION 
GRANT AGREEMENT.—A project construction grant 
agreement under this subsection shall specify the 
scope of the project to be constructed, the estimated 
net project cost of the project, the schedule under 
which the project shall be constructed, the maximum 
amount of funding to be obtained under this sub-
section, the proposed schedule for obligation of fu-
ture Federal grants, and the sources of funding 
from other than the Government. The agreement 
may include a commitment on the part of the Sec-
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retary to provide funding for the project in future 
fiscal years. 
‘(8) LIMITATION ON ENTRY INTO CONSTRUC-
TION
GRANT
AGREEMENT.—The Secretary may 
enter into a project construction grant agreement 
for a project under this subsection only if the project 
is authorized for construction and has been rated as 
‘‘recommended’’ under this subsection. 
‘(9) REGULATIONS.—Not later than 120 days 
after the date of enactment of the Federal Public 
Transportation Act of 2005, the Secretary shall 
issue regulations establishing an evaluation and rat-
ing process for proposed projects under this sub-
section that is based on the results of project jus-
tification and local financial commitment, as re-
quired under this subsection. 
‘(10) FIXED GUIDEWAY CAPITAL PROJECT.—In 
this subsection, the term ‘‘fixed guideway capital 
project’’ includes a corridor-based public transpor-
tation bus capital project if the majority of the 
project’s corridor right-of-way is dedicated alignment 
for exclusive use by public transportation vehicles for 
all or part of the day. 
‘(e) PREVIOUSLY ISSUED LETTER OF INTENT OR 
FULL FUNDING GRANT AGREEMENT.—Subsections (c)
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and (d) do not apply to projects for which the Secretary 
has issued a letter of intent or entered into a full funding 
grant agreement before the date of enactment of the Fed-
eral Public Transportation Act of 2005. 
‘(f) LETTERS OF INTENT, FULL FUNDING GRANT 
AGREEMENTS, AND EARLY SYSTEMS WORK AGREE-
MENTS.—
‘(1) LETTERS OF INTENT.—
‘(A) AMOUNTS
INTENDED
TO
BE
OBLI-
GATED.—The Secretary may issue a letter of 
intent to an applicant announcing an intention 
to obligate, for a capital project under this sec-
tion, an amount from future available budget 
authority specified in law that is not more than 
the amount stipulated as the financial partici-
pation of the Secretary in the project. When a 
letter is issued for fixed guideway projects, the 
amount shall be sufficient to complete at least 
an operable segment. 
‘(B) TREATMENT.—The issuance of a let-
ter under subparagraph (A) is deemed not to be 
an obligation under sections 1108(c), 1108(d), 
1501, and 1502(a) of title 31 or an administra-
tive commitment. 
‘(2) FULL FUNDING GRANT AGREEMENTS.—