187
(b) CAPITAL
PROJECT.—Section 5302(a)(1) is 
amended—
(1) in subparagraph (G) by inserting ‘‘construc-
tion, renovation, and improvement of intercity bus 
stations and terminals,’’ before ‘‘and the renovation 
and improvement of historic transportation facili-
ties,’’; 
(2) in subparagraph (G)(ii) by inserting ‘‘(other 
than a intercity bus station or terminal)’’ after 
‘‘commercial revenue-producing facility’’; 
(3) by striking ‘‘or’’ at the end of subparagraph 
(H); 
(4) by striking the period at the end of sub-
paragraph (I) and inserting a semicolon; and 
(5) by adding at the end the following: 
‘‘(J) crime prevention and security—
‘‘(i) including—
‘‘(I) projects to refine and de-
velop security and emergency response 
plans; 
‘‘(II) projects aimed at detecting 
chemical and biological agents in pub-
lic transportation; 
‘‘(III) the conduct of emergency 
response drills with public transpor-
188
tation agencies and local first re-
sponse agencies; and 
‘‘(IV) security training for public 
transportation employees; but 
‘‘(ii) excluding all expenses related to 
operations, other than such expenses in-
curred in conducting activities described in 
subclauses (III) and (IV); 
‘‘(K) establishment of a debt service re-
serve made up of deposits with a bondholders’ 
trustee in a noninterest bearing account for the 
purpose of ensuring timely payment of principal 
and interest on bonds issued by a grant recipi-
ent for purposes of financing an eligible project 
under this chapter; or 
‘‘(L) mobility management—
‘‘(i) consisting of short-range planning 
and management activities and projects for 
improving 
coordination 
among 
public 
transportation and other transportation 
service providers carried out by a recipient 
or subrecipient through an agreement en-
tered into with a person, including a gov-
ernmental entity, under this chapter (other 
than section 5309); but
189
‘‘(ii) excluding operating public trans-
portation services.’’. 
(c) INDIVIDUAL
WITH
A
DISABILITY.—Section 
5302(a)(5) is amended—
(1) by striking ‘‘HANDICAPPED
INDIVIDUAL’’ 
and inserting ‘‘INDIVIDUAL
WITH
A
DISABILITY’’; 
and 
(2) by striking ‘‘handicapped individual’’ and 
inserting ‘‘individual with a disability’’. 
(d) MASS TRANSPORTATION.—Section 5302(a)(7) is 
amended to read as follows: 
‘‘(7) MASS TRANSPORTATION.—The term ‘mass 
transportation’ means public transportation.’’. 
(e) PUBLIC TRANSPORTATION.—Section 5302(a)(10) 
is amended to read as follows: 
‘‘(10) PUBLIC
TRANSPORTATION.—The term 
‘public transportation’ means transportation by a 
conveyance that provides regular and continuing 
general or special transportation to the public, but 
does not include schoolbus, charter, or sightseeing 
transportation.’’. 
(f) URBANIZED
AREA.—Section 5302(a)(17) is 
amended to read as follows: 
‘‘(17) URBANIZED AREA.—The term ‘urbanized 
area’ means an area encompassing a population of
190
at least 50,000 people that has been defined and 
designated in the latest decennial census as an ur-
banized area by the Secretary of Commerce.’’. 
(g) AUTHORITY TO MODIFY DEFINITION.—Section 
5302(b) is amended—
(1) by striking ‘‘HANDICAPPED INDIVIDUAL’’ 
and inserting ‘‘INDIVIDUAL WITH A DISABILITY’’; 
and 
(2) by striking ‘‘handicapped individual’’ and 
inserting ‘‘individual with a disability’’. 
SEC. 3004. METROPOLITAN PLANNING. 
Section 5303 is amended to read as follows: 
‘‘§ 5303. Metropolitan planning 
‘‘(a) IN GENERAL.—Grants made under sections 
5307, 5308, 5309, 5310, 5311, 5316, and 5317 shall be 
carried out in accordance with the metropolitan planning 
provisions of chapter 52. 
‘‘(b) CERTIFICATION.—
‘‘(1) IN GENERAL.—The Secretary shall ensure 
and certify that each metropolitan planning organi-
zation in each transportation management area is 
carrying out its responsibilities under applicable laws 
of the United States. The Secretary may make the 
certification only if the organization is complying 
with chapter 52 and other applicable requirements
191
of laws of the United States and the organization 
and chief executive officer have approved a transpor-
tation improvement program for the area. 
‘‘(2) LIMITATION
ON
WITHHOLDING
CERTIFI-
CATION.—The Secretary may not withhold certifi-
cation based on the policies and criteria a metropoli-
tan planning organization or mass transportation 
grant recipient establishes under section 5306(a) for 
deciding the feasibility of private enterprise partici-
pation.’’. 
SEC. 3005. STATEWIDE PLANNING. 
(a) IN GENERAL.—Section 5304 is amended to read 
as follows: 
‘‘§ 5304. Statewide planning 
‘‘Grants made under sections 5307, 5308, 5309, 
5310, 5311, 5316, and 5317 shall be carried out in ac-
cordance with the statewide planning provisions of chapter 
52.’’. 
(b) CONFORMING AMENDMENT.—The analysis for 
chapter 53 is amended by striking the item relating to 
section 5304 and inserting the following:
‘‘5304. Statewide planning.’’.
SEC. 3006. PLANNING PROGRAMS. 
(a) IN GENERAL.—Section 5305 is amended to read 
as follows:
192
‘‘§ 5305. Planning programs 
‘‘(a) STATE DEFINED.—In this section the term 
‘State’ means a State of the United States, the District 
of Columbia, and Puerto Rico. 
‘‘(b) GENERAL AUTHORITY.—
‘‘(1) ASSISTANCE.—Under criteria to be estab-
lished by the Secretary, the Secretary may provide 
assistance for—
‘‘(A) the development of transportation 
plans and programs; 
‘‘(B) planning, engineering, designing, and 
evaluating a public transportation project; and 
‘‘(C) for other technical studies. 
‘‘(2) 
GRANTS, 
AGREEMENTS, 
AND
CON-
TRACTS.—The Secretary may provide assistance 
under paragraph (1)—
‘‘(A) by making grants to States, authori-
ties of States, metropolitan planning organiza-
tions, and local governmental authorities; or 
‘‘(B) by making agreements with other de-
partments, agencies, and instrumentalities of 
the Government. 
‘‘(3) ELIGIBLE ACTIVITIES.—Activities eligible 
for assistance under paragraph (1) include the fol-
lowing:
193
‘‘(A) Studies related to management, plan-
ning, operations, capital requirements, and eco-
nomic feasibility. 
‘‘(B) 
Evaluating 
previously 
financed 
projects. 
‘‘(C) Peer reviews and exchanges of tech-
nical data, information, assistance, and related 
activities in support of planning and environ-
mental analyses among metropolitan planning 
organizations and other transportation plan-
ners. 
‘‘(D) Other similar and related activities 
preliminary to and in preparation for con-
structing, acquiring, or improving the operation 
of facilities and equipment. 
‘‘(c) PURPOSE.—To the extent practicable, the Sec-
retary shall ensure that amounts appropriated or made 
available under section 5338 to carry out this section and 
sections 5303 and 5304 are used to support balanced and 
comprehensive transportation planning that considers the 
relationships among land use and all transportation 
modes, without regard to the programmatic source of the 
planning amounts. 
‘‘(d) METROPOLITAN PLANNING PROGRAM.—
‘‘(1) APPORTIONMENT TO STATES.—
194
‘‘(A) IN
GENERAL.—The Secretary shall 
apportion 80 percent of the amounts made 
available under subsection (g)(1) among the 
States to carry out sections 5303 and 5306 in 
the ratio that—
‘‘(i) the population of urbanized areas 
in each State, as shown by the latest avail-
able decennial census of population; bears 
to 
‘‘(ii) the total population of urbanized 
areas in all States, as shown by that cen-
sus. 
‘‘(B) MINIMUM
APPORTIONMENT.—Not-
withstanding subparagraph (A), a State may 
not receive less than 0.5 percent of the amount 
apportioned under this paragraph. 
‘‘(2) ALLOCATION TO MPO’S.—Amounts appor-
tioned to a State under paragraph (1) shall be made 
available promptly after allocation to metropolitan 
planning organizations in the State designated under 
this section under a formula that—
‘‘(A) considers population of urbanized 
areas;
195
‘‘(B) provides an appropriate distribution 
for urbanized areas to carry out the cooperative 
processes described in this section; 
‘‘(C) the State develops in cooperation with 
the metropolitan planning organizations; and 
‘‘(D) the Secretary approves. 
‘‘(3) SUPPLEMENTAL AMOUNTS—
‘‘(A) IN
GENERAL.—The Secretary shall 
apportion 20 percent of the amounts made 
available under subsection (g)(1) among the 
States to supplement allocations made under 
paragraph (1) for metropolitan planning organi-
zations. 
‘‘(B) FORMULA.—The Secretary shall ap-
portion amounts referred to in subparagraph 
(A) under a formula that reflects the additional 
cost of carrying out planning, programming, 
and project selection responsibilities under sec-
tions 5303 and 5306 in certain urbanized 
areas. 
‘‘(e) STATE PLANNING AND RESEARCH PROGRAM.—
‘‘(1) APPORTIONMENT TO STATES.—
‘‘(A) IN
GENERAL.—The Secretary shall 
apportion the amounts made available under 
subsection (g)(2) among the States for grants
196
and contracts to carry out sections 5303 
through 5306, 5312, 5315, and 5322 in the 
ratio that—
‘‘(i) the population of urbanized areas 
in each State, as shown by the latest avail-
able decennial census; bears to 
‘‘(ii) the population of urbanized areas 
in all States, as shown by that census. 
‘‘(B) MINIMUM
APPORTIONMENT.—Not-
withstanding subparagraph (A), a State may 
not receive less than 0.5 percent of the amount 
apportioned under this paragraph. 
‘‘(2) SUPPLEMENTAL
AMOUNTS—A State, as 
the State considers appropriate, may authorize part 
of the amount made available under this subsection 
to be used to supplement amounts made available 
under subsection (d). 
‘‘(f) GOVERNMENT’S SHARE OF COSTS.—The Gov-
ernment’s share of the cost of an activity funded using 
amounts made available under this section may not exceed 
80 percent of the cost of the activity unless the Secretary 
determines that it is in the interests of the Government 
not to require a State or local match. 
‘‘(g) ALLOCATION OF FUNDS.—Of the funds made 
available by or appropriated to carry out this section
197
under section 5338(c) for fiscal years 2004 through 
2009—
‘‘(1) 82.72 percent shall be available for the 
metropolitan planning program under subsection (d); 
and 
‘‘(2) 17.28 percent shall be available to carry 
out subsection (e). 
‘‘(h) AVAILABILITY OF FUNDS.—Funds apportioned 
under this section in a State shall remain available for 
obligation in that State for a period of 3 years after the 
last day of the fiscal year for which the funds are author-
ized. Any amounts so apportioned that remain unobligated 
at the end of that period shall be reapportioned among 
the States.’’. 
(b) CONFORMING AMENDMENT.—The analysis for 
chapter 53 is amended by striking the item relating to 
section 5305 and inserting the following:
‘‘5305. Planning programs.’’.
SEC. 3007. PRIVATE ENTERPRISE PARTICIPATION. 
(a) SECTION HEADING.—Section 5306 is amended by 
striking the section heading and inserting the following: 
‘‘§ 5306. Private enterprise participation in planning; 
relationship to other limitations’’. 
(b) CONFORMING AMENDMENT.—The analysis for 
chapter 53 is amended by striking the item relating to 
section 5306 and inserting the following:
198
‘‘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 by striking ‘‘a person’’ and in-
serting ‘‘an entity’’; 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
199
‘‘(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 YEAR 2003 AND FOR THE PERIOD OF OCTO-
BER 1, 2003, THROUGH FEBRUARY 29, 2004’’ and in-
serting ‘‘FISCAL YEARS 2003 THROUGH 2005’’; 
(3) in paragraph (2)(A) by striking ‘‘fiscal year 
2003’’ and all that follows through ‘‘2004’’ and in-
serting ‘‘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 
5305 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’’;
200
(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.
201
‘‘(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 serv-
ice agreement with a State or local social serv-
ice agency or private social service organiza-
tion.’’. 
(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 (1) as para-
graph (2);
202
(3) by inserting ‘‘THIS
CHAPTER.—’’ before 
‘‘Section 5302’’; 
(4) by adding at the end the following: 
‘‘(2) CHAPTER 15 OF TITLE 5.—The provision 
of assistance under this chapter shall not be con-
strued 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). 
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; 
‘‘(ii) liquefied natural gas; 
‘‘(iii) biodiesel fuels;
203
‘‘(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) DESIGNATED RECIPIENT.—The term ‘des-
ignated recipient’ has the meaning that term has in 
section 5307(a)(2). 
‘‘(3) ELIGIBLE
PROJECT.—The term ‘eligible 
project’—
‘‘(A) means a project 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;
204
‘‘(iii) improving existing mass trans-
portation facilities to accommodate clean 
fuel buses; 
‘‘(iv) repowering pre-1993 bus engines 
with clean fuel technology that meets the 
current urban bus emission standards; or 
‘‘(v) retrofitting or rebuilding pre-
1993 bus engines if before half life to re-
build; and 
‘‘(B) in the discretion of the Secretary, 
may include projects relating to clean fuel, bio-
diesel, hybrid electric, or zero emissions tech-
nology buses that exhibit equivalent or superior 
emissions reductions to existing clean fuel or 
hybrid electric technologies. 
‘‘(b) AUTHORITY.—The Secretary shall make grants 
in accordance with this section to designated recipients to 
finance eligible projects. 
‘‘(c) APPLICATION.—
‘‘(1) IN GENERAL.—Not later than January 1 
of each year, any designated recipient seeking to 
apply for a grant under this section for an eligible 
project shall submit an application to the Secretary, 
in such form and in accordance with such require-
ments as the Secretary shall establish by regulation.
205
‘‘(2) CERTIFICATION
REQUIRED.—An applica-
tion submitted under paragraph (1) shall contain a 
certification by the applicant that the grantee will 
operate buses purchased with a grant under this sec-
tion only with clean fuels. 
‘‘(d) APPORTIONMENT OF FUNDS.—
‘‘(1) FORMULA.—Not later than February 1 of 
each year, the Secretary shall apportion amounts 
made available to carry out this section to des-
ignated recipients submitting applications under sub-
section (c), of which—
‘‘(A) two-thirds shall be apportioned to 
designated recipients with eligible projects in 
urban areas with a population of at least 
1,000,000, of which—
‘‘(i) 50 percent shall be apportioned, 
such that each such designated 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 eligible project of the 
designated recipient, weighted by se-
verity of nonattainment for the area 
in which the eligible project is located, 
as provided in paragraph (2); bears to
206
‘‘(II) the total number of vehicles 
in the bus fleets of all eligible projects 
in areas with a population of at least 
1,000,000 funded under this section, 
weighted by severity of nonattainment 
for all areas in which those eligible 
projects are located, as provided in 
paragraph (2); and 
‘‘(ii) 50 percent shall be apportioned, 
such that each such designated recipient 
receives a grant under this section in an 
amount equal to the ratio that—
‘‘(I) the number of bus passenger 
miles (as that term is defined in sec-
tion 5336(c)) of the eligible project of 
the designated recipient, weighted by 
severity of nonattainment of the area 
in which the eligible project is located, 
as provided in paragraph (2); bears to 
‘‘(II) the total number of bus 
passenger miles of all eligible projects 
in areas with a population of at least 
1,000,000 funded under this section, 
weighted by severity of nonattainment 
of all areas in which those eligible
207
projects are located, as provided in 
paragraph (2); and 
‘‘(B) one-third shall be apportioned to des-
ignated recipients with eligible projects in urban 
areas with a population of less than 1,000,000, 
of which—
‘‘(i) 50 percent shall be apportioned, 
such that each such designated 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 eligible project of the 
designated recipient, weighted by se-
verity of nonattainment for the area 
in which the eligible project is located, 
as provided in paragraph (2); bears to 
‘‘(II) the total number of vehicles 
in the bus fleets of all eligible projects 
in areas with a population of less than 
1,000,000 funded under this section, 
weighted by severity of nonattainment 
for all areas in which those eligible 
projects are located, as provided in 
paragraph (2); and
208
‘‘(ii) 50 percent shall be apportioned, 
such that each such designated recipient 
receives a grant under this section in an 
amount equal to the ratio that—
‘‘(I) the number of bus passenger 
miles (as that term is defined in sec-
tion 5336(c) of the eligible project of 
the designated recipient, weighted by 
severity of nonattainment of the area 
in which the eligible project is located, 
as provided in paragraph (2); and 
‘‘(II) the total number of bus 
passenger miles of all eligible projects 
in areas with a population of less than 
1,000,000 funded under this section, 
weighted by severity of nonattainment 
of all areas in which those eligible 
projects are located, as provided in 
paragraph (2). 
‘‘(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
209
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 
(as that term is defined in section 101 of 
title 23) 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—
‘‘(I) a moderate ozone nonattain-
ment area under subpart 2 of part D 
of title I of the Clean Air Act (42 
U.S.C. 7511 et seq.); or 
‘‘(II) a moderate carbon mon-
oxide nonattainment area under sub-
part 3 of part D of title I of the Clean 
Air Act (42 U.S.C. 7512 et seq.); 
‘‘(iv) 1.3 if, at the time of the appor-
tionment, the area is classified as a serious 
ozone nonattainment area under subpart 2
210
of part D of title I of the Clean Air Act 
(42 U.S.C. 7511 et seq.); or 
‘‘(v) 1.4 if, at the time of the appor-
tionment, the area is classified as a severe 
ozone nonattainment area under subpart 2 
of part D of title I of the Clean Air Act 
(42 U.S.C. 7511 et seq.); 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 part D of title I of the Clean 
Air Act (42 U.S.C. 7511 et seq.). 
‘‘(B) ADDITIONAL ADJUSTMENT FOR CAR-
BON
MONOXIDE
AREAS.—If, in addition to 
being classified as a nonattainment or mainte-
nance area (as that term is defined in section 
101 of title 23) for ozone under subpart 2 of 
part D of title I of the Clean Air Act (42 
U.S.C. 7511 et seq.), the area was also classi-
fied under subpart 3 of part D of title I of that 
Act (42 U.S.C. 7512 et seq.) as a nonattain-
ment area for carbon monoxide, the weighted 
nonattainment or maintenance area fleet and 
passenger miles for the eligible project, as cal-
211
culated under subparagraph (A), shall be fur-
ther multiplied by a factor of 1.2. 
‘‘(3) MAXIMUM GRANT AMOUNT.—
‘‘(A) IN
GENERAL.—The amount of a 
grant made to a designated recipient under this 
section shall not exceed the lesser of—
‘‘(i) for an eligible project in an 
area—
‘‘(I) with a population of less 
than 1,000,000, $15,000,000; and 
‘‘(II) with a population of at 
least 1,000,000, $25,000,000; or 
‘‘(ii) 80 percent of the total cost of 
the eligible project. 
‘‘(B) REAPPORTIONMENT.—Any amounts 
that would otherwise be apportioned to a des-
ignated recipient under this subsection that ex-
ceed the amount described in subparagraph (A) 
shall be reapportioned among other designated 
recipients in accordance with paragraph (1). 
‘‘(e) ADDITIONAL REQUIREMENTS.—
‘‘(1) LIMITATION ON USES.—Not less than 5 
percent of the amount made available by or appro-
priated under section 5338 in each fiscal year to 
carry out this section shall be available for any eligi-
212
ble projects for which an application is received from 
a designated recipient, for—
‘‘(A) the purchase or construction of hy-
brid electric or battery-powered buses; or 
‘‘(B) facilities specifically designed to serv-
ice those buses. 
‘‘(2) CLEAN DIESEL BUSES.—Not more than 35 
percent of the amount made available by or appro-
priated under section 5338 in each fiscal year to 
carry out this section may be made available to fund 
clean diesel buses. 
‘‘(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:
213
‘‘§ 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). 
(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-
214
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-
retary, based upon evaluations and considerations 
set forth in paragraph (3), determines that the pro-
posal is—
‘‘(A) based on the results of an alter-
natives analysis and preliminary engineering; 
‘‘(B) justified based on a comprehensive 
review of its mobility improvements, environ-
mental benefits, cost effectiveness, operating ef-
ficiencies, transit supportive policies, and exist-
ing 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
ANAL-
YSIS
AND
PRELIMINARY
ENGINEERING.—In
215
evaluating 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 pre-
liminary engineering for the project. 
‘‘(B) PROJECT JUSTIFICATION.—In evalu-
ating a proposed project for purposes of making 
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
216
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; 
‘‘(vii) adjust the project justification 
to reflect differences in local land, con-
struction, 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 pro-
vides for the availability of contingency 
amounts that the Secretary determines to 
be reasonable to cover unanticipated cost 
increases; 
‘‘(ii) each proposed local source of 
capital and operating financing is stable, 
reliable, and available within the proposed 
project timetable; and
217
‘‘(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. 
‘‘(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.
218
‘‘(4) 
EVALUATION
AND
RATING
OF 
PROJECTS.—A proposed project under this sub-
section may advance from alternatives analysis to 
preliminary engineering, and may advance from pre-
liminary engineering to final design and construc-
tion, only if the Secretary finds that the project 
meets the requirements of this section and there is 
a reasonable likelihood that the project will continue 
to meet such requirements. In making the findings, 
the Secretary shall evaluate and rate the project as 
‘highly recommended’, ‘recommended’, or ‘not rec-
ommended’ based on the results of alternatives anal-
ysis, 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 rat-
ing, individual ratings for each of the criteria estab-
lished 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.—
219
‘‘(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. 
‘‘(2) SELECTION
CRITERIA.—The Secretary 
may provide Federal assistance under this sub-
section with respect to a proposed project only if the 
Secretary 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 (1)(A), the Sec-
retary shall analyze and consider the results of plan-
ning and alternatives analysis for the project.
220
‘‘(4) PROJECT JUSTIFICATION.—For purposes 
of making the finding under paragraph (1)(B), the 
Secretary shall—
‘‘(A) determine the degree to which public 
transportation supportive land use policies re-
lated to the project are consistent with local 
land use policies and are likely to achieve local 
developmental goals; 
‘‘(B) determine the cost effectiveness of 
the project at the time of the initiation of rev-
enue 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 fore-
casts 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 (1)(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.
221
‘‘(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-
section and there is a reasonable likelihood 
that the project will continue to meet such 
requirements; and 
‘‘(ii) the metropolitan planning orga-
nization has adopted the locally preferred 
alternative 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 justifica-
tion criteria and the degree of local financial 
commitment, as required by this subsection. 
‘‘(7) CONTENTS
OF
PROJECT
CONSTRUCTION 
GRANT AGREEMENT.—A project construction grant 
agreement under this subsection shall specify the
222
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-
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 2004, 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.
223
‘‘(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) 
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 2004. 
‘‘(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
224
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.—
‘‘(A) TERMS.—The Secretary may make a 
full funding grant agreement with an applicant. 
The agreement shall—
‘‘(i) establish the terms of participa-
tion by the Government in a project under 
this section; 
‘‘(ii) establish the maximum amount 
of Government financial assistance for the 
project; 
‘‘(iii) cover the period of time for com-
pleting the project, including a period ex-
tending beyond the period of an authoriza-
tion; and 
‘‘(iv) make timely and efficient man-
agement of the project easier according to 
the law of the United States.
225
‘‘(B) SPECIAL FINANCIAL RULES.—
‘‘(i) IN
GENERAL.—An agreement 
under this paragraph obligates an amount 
of available budget authority specified in 
law and may include a commitment, con-
tingent on amounts to be specified in law 
in advance for commitments under this 
paragraph, 
to 
obligate 
an 
additional 
amount from future available budget au-
thority specified in law. 
‘‘(ii) STATEMENT
OF
CONTINGENT 
COMMITMENT.—The agreement shall state 
that the contingent commitment is not an 
obligation of the Government. 
‘‘(iii) INTEREST AND OTHER FINANC-
ING COSTS.—Interest and other financing 
costs of efficiently carrying out a part of 
the project within a reasonable time are a 
cost of carrying out the project under a 
full funding grant agreement, except that 
eligible costs may not be more than the 
cost of the most favorable financing terms 
reasonably available for the project at the 
time of borrowing. The applicant shall cer-
tify, in a way satisfactory to the Secretary,
226
that the applicant has shown reasonable 
diligence in seeking the most favorable fi-
nancing terms. 
‘‘(iv) COMPLETION
OF
OPERABLE 
SEGMENT.—The amount stipulated in an 
agreement under this paragraph for a fixed 
guideway project shall be sufficient to com-
plete at least an operable segment. 
‘‘(3) EARLY SYSTEM WORK AGREEMENTS.—
‘‘(A) CONDITIONS.—The Secretary may 
make an early systems work agreement with an 
applicant if a record of decision under the Na-
tional Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.) has been issued on the 
project and the Secretary finds there is reason 
to believe—
‘‘(i) a full funding grant agreement 
for the project will be made; and 
‘‘(ii) the terms of the work agreement 
will promote ultimate completion of the 
project more rapidly and at less cost. 
‘‘(B) CONTENTS.—
‘‘(i) IN GENERAL.—A work agreement 
under this paragraph obligates an amount 
of available budget authority specified in
227
law and shall provide for reimbursement of 
preliminary costs of carrying out the 
project, including land acquisition, timely 
procurement of system elements for which 
specifications are decided, and other activi-
ties the Secretary decides are appropriate 
to make efficient, long-term project man-
agement easier. 
‘‘(ii) 
PERIOD
COVERED.—A 
work 
agreement under this paragraph shall 
cover the period of time the Secretary con-
siders appropriate. The period may extend 
beyond the period of current authorization. 
‘‘(iii) INTEREST AND OTHER FINANC-
ING COSTS.—Interest and other financing 
costs of efficiently carrying out the work 
agreement within a reasonable time are a 
cost of carrying out the agreement, except 
that eligible costs may not be more than 
the cost of the most favorable financing 
terms reasonably available for the project 
at the time of borrowing. The applicant 
shall certify, in a way satisfactory to the 
Secretary, that the applicant has shown
228
reasonable diligence in seeking the most 
favorable financing terms. 
‘‘(iv) 
FAILURE
TO
CARRY
OUT 
PROJECT.—If an applicant does not carry 
out the project for reasons within the con-
trol of the applicant, the applicant shall 
repay all Government payments made 
under the work agreement plus reasonable 
interest and penalty charges the Secretary 
establishes in the agreement. 
‘‘(4) LIMITATION ON AMOUNTS.—
‘‘(A) PROGRAMMATIC.—The total esti-
mated amount of future obligations of the Gov-
ernment and contingent commitments to incur 
obligations covered by all outstanding letters of 
intent, full funding grant agreements, and early 
systems work agreements under this subsection 
may be not more than the greater of the 
amount authorized under section 5338(b) for 
new fixed guideway capital projects or an 
amount equivalent to the last 3 fiscal years of 
funding allocated under subsection (m)(1)(B) 
for new fixed guideway capital projects, less an 
amount the Secretary reasonably estimates is 
necessary for grants under this section not cov-
317
cost of the project only to the extent that amounts 
are provided in advance in an appropriations Act. 
‘‘(h) AVAILABILITY OF AMOUNTS.—Amounts made 
available by or appropriated under subsections (a) through 
(f) shall remain available until expended.’’. 
SEC. 3035. OVER-THE-ROAD BUS ACCESSIBILITY PROGRAM. 
(a) IN GENERAL.—Section 3038 of the Transpor-
tation Equity Act for the 21st Century (49 U.S.C. 5310 
note; 112 Stat. 392) is amended—
(1) by striking the section heading and insert-
ing the following: 
‘‘SEC. 3038. OVER-THE-ROAD BUS ACCESSIBILITY PRO-
GRAM’’; 
(2) by striking subsection (e) and inserting the 
following: 
‘‘(e) FEDERAL SHARE
OF COSTS.—The Federal 
share of costs under this section shall be provided from 
funds made available to carry out this section. The Fed-
eral share of the costs for a project shall not exceed 50 
percent of the project cost.’’; and 
(3) by striking subsection (g) and inserting the 
following: 
‘‘(g) FUNDING.—
‘‘(1) Of the amounts made available to carry 
out this section in each fiscal year, 75 percent shall
318
be available for operators of over-the-road buses 
used substantially or exclusively in intercity, fixed-
route over-the-road bus service to finance the incre-
mental capital and training costs of the Department 
of Transportation’s final rule regarding accessibility 
of over-the-road buses. Such amounts shall remain 
available until expended. 
‘‘(2) Of the amounts made available to carry 
out this section in each fiscal year, 25 percent shall 
be available for operators of other over-the-road bus 
service to finance the incremental capital and train-
ing costs of the Department of Transportation’s 
final rule regarding accessibility of over-the-road 
buses. Such amounts shall remain available until ex-
pended.’’. 
(b) CONFORMING AMENDMENTS.—The table of con-
tents contained in section 1(b) of the Transportation Eq-
uity Act for the 21st Century (112 Stat. 107) is amended 
by striking the item relating to section 3038 and inserting 
the following:
‘‘Sec. 3038. Over-the-road bus accessibility program.’’.
SEC. 3036. UPDATED TERMINOLOGY. 
Chapter 53, including the chapter analysis, is amend-
ed by striking ‘‘mass’’ each place it appears before ‘‘trans-
portation’’ and inserting ‘‘public’’, except in sections