House and Senate Committees on Appropriations a 
supplemental report regarding the business plan, 
which shall describe the work completed to date, any 
changes to the business plan, and the reasons for 
such changes. 
‘‘(7) A grant may not be used for operating ex-
penses or capital projects that is not approved by 
the Secretary of Transportation or an element of the 
Corporation’s current fiscal year business plan, or 
that is obligated or expended unless the Corporation 
certifies, as part of the grant agreement, that it has 
complied with and will abide by the following re-
quirements: 
‘‘(A) The Corporation’s management will 
maintain financial controls and accounting 
transparency to the satisfaction of the Sec-
retary, including developing or enhancing any 
existing capacity separately to report (a) all 
revenue and expenses associated with rail oper-
ations by route; and (b) budgeted and actual 
expenditures for all capital investments. 
‘‘(B) The Corporation’s management will 
provide to the Board of Directors, the Depart-
ment of Transportation and Congress its 
Monthly Performance Report. The Corporation
shall also make available to the Department of 
Transportation the same details and reports on 
its financial performance that it makes avail-
able to Amtrak management, at the same time 
that it provides those reports and details to 
Amtrak management. 
‘‘(C) The Corporation shall expend funds 
only for the continuation of existing plants and 
services. With the exception of expenditures for 
which it obtains written approval from the De-
partment of Transportation, The Corporation 
will not use of any of its funds for actual ex-
pansion or planning for expansion of rail serv-
ice, including high speed rail service. 
‘‘(D) The Corporation has negotiated with 
its employees substantial operating cost reduc-
tions needed to make its operations competitive 
with private-sector service providers. 
‘‘(b) 
REQUIREMENTS
FOLLOWING
RESTRUC-
TURING.—Any grant made directly to either of the suc-
cessor corporations under the authority of Part C of Sub-
title V of this title may only be made subject to the fol-
lowing limitations: 
‘‘(1) The Secretary of Transportation shall not 
disburse funding to cover operating losses on a long-
distance train route without first receiving and ap-
proving a grant request for that specific train route. 
‘‘(2) Each such grant request shall be accom-
panied by a detailed financial analysis and revenue 
projection justifying the Federal support to the Sec-
retary’s satisfaction. 
‘‘(3) The Secretary of Transportation shall en-
sure that, of the amount made available by appro-
priations for capital and operating assistance in a 
fiscal year, sufficient sums are reserved to satisfy 
the successor corporation’s contractual obligations, if 
any, with respect to commuter and intrastate pas-
senger rail service. 
‘‘(4) Not later than December 31 prior to each 
fiscal year in which grants are made, the successor 
corporations shall each transmit to the Secretary of 
Transportation a business plan for operating and 
capital improvements to be funded in the fiscal year. 
‘‘(5) The business plan shall include a descrip-
tion of the work to be funded, along with cost esti-
mates and an estimated timetable for completion of 
the projects covered by the business plan. 
‘‘(6) Each month of each fiscal year in which 
grants are made, the successor corporations shall 
each submit to the Secretary of Transportation a
supplemental report regarding the business plan, 
which shall describe the work completed to date, any 
changes to the business plan, and the reasons for 
such changes. 
‘‘(7) A grant may not be used for operating ex-
penses or capital projects that is not approved by 
the Secretary of Transportation or an element of the 
current fiscal year business plan, or that is obligated 
or expended unless the successor corporation agrees, 
as part of the grant agreement, to abide by the fol-
lowing requirements: 
‘‘(A) Management will maintain financial 
controls and accounting transparency to the 
satisfaction of the Secretary, including devel-
oping or enhancing any existing capacity sepa-
rately to report (a) all revenue and expenses as-
sociated with rail operations by route; and (b) 
budgeted and actual expenditures for all capital 
investments. 
‘‘(B) Management of each successor cor-
poration shall make available to the Depart-
ment of Transportation the same details and 
reports on its financial performance that it 
makes available internally, at the same time
that it provides those reports and details inter-
nally. 
‘‘(C) Funds will be spent only on existing 
plants and services.’’. 
(b) CONFORMING AMENDMENTS.—The analysis of 
chapter 243 of title 49, United States Code, is amended 
by inserting the following after the item relating to section 
24313: 
‘‘24314. Transitional limitations on availability of grants.’’. 
SEC. 202. SPENDING PLANS FOR CAPITAL BACKLOG RE-
DUCTION. 
(a) IN GENERAL.—Within 6 months after Year One 
begins, and as a condition of grants to the National Rail-
road Passenger Corporation between that date and the im-
plementation of the restructuring required under 49 
U.S.C. 24310, the Corporation shall prepare a capital 
spending plan that addresses capital needs, consistent 
with the funding levels authorized to be provided for Year 
One and each fiscal year thereafter through Year Six, 
for— 
(1) Northeast Corridor capital assets; 
(2) capital assets on long-distance routes other 
than on the Northeast Corridor; and 
(3) capital assets on short-distance routes other 
than the Northeast Corridor.
(b) APPROVAL BY THE SECRETARY AND THE COM-
PACT.—(1) The Corporation shall submit the capital 
spending plan prepared under this section to the Secretary 
of Transportation for review and approval. The plan shall 
be implemented only after approval by the Secretary, and 
with any modifications specified by the Secretary. 
(2) The Secretary of Transportation shall require 
that the plan be updated at least annually. 
(3) On and after creation of North East Corridor 
Compact, the Secretary shall make no grants to the Com-
pact for Northeast Corridor for capital investments, except 
in accordance with a capital spending plan prepared by 
the Compact and approved by both the Compact and the 
Secretary. The same requirements shall apply to grants 
made to States and other Compacts under this section. 
SEC. 203. REDEMPTION OF COMMON STOCK. 
(a) VALUATION.—The Secretary of Transportation 
shall arrange, at the National Railroad Passenger Cor-
poration’s expense, for a valuation of all assets and liabil-
ities of the Corporation to be performed by the Secretary 
of the Treasury, or by a contractor selected by the Sec-
retary of the Treasury. Such valuation shall be conducted 
in accordance with criteria and requirements to be deter-
mined by the Secretary, in the Secretary’s discretion, and 
shall be completed within 6 months after Year One begins.
(b) REDEMPTION.—(1) Prior to the transfer of assets 
to the Secretary directed by section 204 of this Act, and 
within 9 months after Year One begins, the Corporation 
shall redeem all common stock in the Corporation issued 
prior to the date of enactment of this Act at the book 
value of such stock, based on the valuation performed 
under subsection (a). 
(2) No provision of this Act, or amendments made 
by this Act, provide to the owners of the common stock 
a priority over holders of indebtedness or other stock of 
the Corporation. 
(c) ACQUISITION THROUGH EMINENT DOMAIN.—In 
the event that the Corporation and the owners of its com-
mon stock have not completed the redemption of such 
stock by a date that is within 9 months after Year One 
begins, the Corporation shall exercise the eminent domain 
provisions contained in 49 U.S.C. 24311, as amended by 
this Act, to acquire that stock. The valuation performed 
under subsection (a) shall be deemed to constitute just 
compensation except to the extent that the owners of the 
common stock demonstrate that the valuation is less than 
the constitutional minimum value of the stock. 
(d) AMENDMENT
OF 49 U.S.C. 24311.—Section 
24311 of title 49, United States Code, is amended—
(1) by striking ‘‘or’’ at the end of subsection 
(a)(1)(A); 
(2) by striking the period at the end of sub-
section (a)(1)(B) and substituting ‘‘; or’’; and 
(3) by inserting the following after subsection 
(a)(1)(B): 
‘‘(C) necessary to redeem the Corporation’s 
common stock from any holder thereof, includ-
ing a rail carrier.’’. 
(e) CONVERSION OF PREFERRED STOCK TO COM-
MON.—(1) Subsequent to the redemption of the common 
stock in the Corporation issued prior to the date of enact-
ment of this Act, the Secretary of Transportation shall 
convert the one share of the preferred stock of the Cor-
poration retained under section 204 of this Act for ten 
shares of common stock in the Corporation. 
(2) The Corporation shall not issue any other com-
mon stock without the express written consent of the Sec-
retary. 
SEC. 204. RETIREMENT OF PREFERRED STOCK; TRANSFER 
OF ASSETS. 
(a) TRANSFER.—Not later than 30 days after the re-
demption or acquisition specified under section 203 of this 
Act, the Corporation shall, in return for the consideration
specified in subsection (c), transfer to the Secretary of 
Transportation title to the following assets: 
(1) The portions of the Northeast Corridor cur-
rently owned or leased by the Corporation as well as 
any improvements made to these assets. The assets 
transferred to the Secretary shall include the rail 
right-of-way, stations, track, signal equipment, elec-
tric traction facilities, bridges, tunnels and all other 
improvements owned by Amtrak between Boston, 
Massachusetts and Washington, District of Colum-
bia (including the route through Springfield, Massa-
chusetts and the routes to Harrisburg, Pennsylvania 
and Albany, New York from the Northeast Corridor 
mainline). 
(2) Chicago Union Station and rail-related as-
sets in the Chicago metropolitan area. 
(3) All other track and right-of-way, stations, 
repair facilities and other real property owned or 
leased by the Corporation. 
(b) EXISTING ENCUMBRANCES.—(1) With regard to 
any assets described in subsection (a) that the Corporation 
has provided as security or collateral for a debt entered 
into prior to the date of enactment of this Act, the Cor-
poration shall transfer its underlying legal interest in such 
asset to the Secretary, provided, however, that the Cor-
poration shall remain liable for the debt secured by the 
asset. 
(2) The obligation of the National Railroad Pas-
senger Corporation to repay in full any indebtedness to 
the United States incurred since January 1, 1990, is not 
affected by this Act or an amendment made by this Act. 
(c) CONSIDERATION.—In consideration for the assets 
transferred to the United States under subsection (b) 
above, the Secretary shall— 
(1) deliver to the Corporation all but one share 
of the preferred stock of the Corporation held by the 
Secretary and forgive the Corporation’s legal obliga-
tion to pay any dividends, including accrued but un-
paid dividends as of the date of transfer, evidenced 
by the preferred stock certificates; and 
(2) Release the Corporation from all mortgages 
and liens held by the Secretary that were in exist-
ence on January 1, 1990. 
(d) AGREEMENT.—(1) Prior to accepting title to the 
assets transferred under this section, the Secretary shall 
enter into an agreement with the Corporation under which 
the Corporation will exercise on behalf of the Secretary 
care, custody and control of the assets to be transferred. 
(2) The agreement shall identify in detail the specific 
functions of the Corporation’s employees and equipment,
and the specific numbers and locations of the employees 
and equipment associated with each function, that would 
be needed for continuation of commuter and freight rail 
service in the event that the Corporation were to cease 
operation, and identify those actions that would be re-
quired to ensure that such functions can be continued on 
an interim basis to avoid any interruption in commuter 
or freight rail service on the Northeast Corridor. 
(e) FURTHER TRANSFERS.—(1) The Secretary may, 
for appropriate consideration, transfer title to all or part 
of Chicago Union Station and rail-related assets in the 
Chicago metropolitan area acquired under this section to 
a regional public transportation agency that has signifi-
cant operations in Chicago Union Station on the date of 
enactment of this Act. 
(2) The Secretary may, for appropriate consideration, 
transfer to the underlying States title to real estate prop-
erties owned by the Corporation between Boston, Massa-
chusetts and Washington, District of Columbia that con-
stitute the route through Springfield, Massachusetts and 
the routes to Harrisburg, Pennsylvania and Albany, New 
York from the Northeast Corridor mainline. 
(3) The Secretary may, for appropriate consideration, 
transfer title to all or part of the assets acquired under
subsection (a)(3) to a State, a public agency, a railroad, 
or other entity deemed appropriate by the Secretary. 
(4) All financial consideration determined by the Sec-
retary to be appropriate consideration for the transfer of 
the assets described in paragraphs (1)–(3) shall be used 
exclusively to reduce the Corporation’s long-term debt that 
exists on the date of enactment. 
SEC. 205. REAL ESTATE AND ASSET SALES; OTHER. 
(a) IN GENERAL.—The Amtrak Board of Directors 
shall undertake and complete not later than the last day 
of Year Three, the disposition of all stations, track, and 
other facilities outside the Northeast Corridor mainline, 
including property conveyed to the Secretary of Transpor-
tation under section 204 of this Act. 
(b) PROCEEDS OF LIQUIDATION.—Notwithstanding 
section 3302 of title 31, United States Code, any proceeds 
from the liquidation of assets under this section shall— 
(1) be credited as an offsetting collection to the 
account that finances grants for debt and interest 
payments under section 206 of this Act to the Pas-
senger Rail Service Provider specified under 49 
U.S.C. 24310; and 
(2) remain available until expended.
SEC. 206. MANAGEMENT AND TRANSFER OF SECURED 
DEBT. 
(a) NEW DEBT PROHIBITION.—Except as approved 
by the Secretary of Transportation to re-finance existing 
secured debt, the Corporation shall not enter into any obli-
gation secured by assets of the Corporation after the date 
of enactment of this Act. This section does not prohibit 
unsecured lines of credit used by the Corporation or any 
subsidiary for working capital purposes. 
(b) SECURED DEBT TRANSFER.—(1) Upon establish-
ment of the Passenger Rail Service Provider specified 
under 49 U.S.C. 24310 and the transfer of ownership of 
the existing rolling stock, all debt secured by the rolling 
stock shall be transferred to and become a liability solely 
of, the Passenger Rail Service Provider. 
(2) Upon establishment of the North East Corridor 
Compact under section 103 of this Act, the secured debt 
associated with fixed assets in the Northeast Corridor 
shall be transferred to and become a liability solely of, the 
North East Corridor Compact. 
(c) AUTHORIZATION.—(1) There are authorized to be 
appropriated to the Secretary for grants to the Passenger 
Rail Service Provider to pay principal and interest pay-
ments on secured debt existing on the date of enactment 
of this Act the following amounts:
(A) Such sums as may be necessary in Year 
Two. 
(B) Such sums as may be necessary in Year 
Three. 
(C) Such sums as may be necessary in Year 
Four. 
(D) Such sums as may be necessary in Year 
Five. 
(E) Such sums as may be necessary in Year 
Six. 
(2) The funding authorized by this section shall 
not— 
(A) modify the extent or nature of any indebt-
edness of the National Railroad Passenger Corpora-
tion to the United States in existence of the date of 
enactment of this Act; 
(B) change the private nature of Amtrak’s or 
its successors’ liabilities; or 
(C) imply any Federal guarantee or commit-
ment to amortize Amtrak’s outstanding indebted-
ness. 
SEC. 207. TRANSITION ASSISTANCE. 
(a) YEAR ONE ASSISTANCE.—There are authorized 
to be appropriated to the Secretary for grants to the Na-
tional Railroad Passenger Corporation for operating and
capital expenses such sums as may be necessary in Year 
One. 
(b) YEAR TWO SUCCESSOR CORPORATION OPER-
ATING ASSISTANCE.—There are authorized to be appro-
priated to the Secretary such sums as may be necessary 
for grants to— 
(1) the Passenger Rail Service Provider for op-
erating expenses of all services except long-distance 
trains and routes in Year Two; and 
(2) the Passenger Rail Infrastructure Manager 
for capital expenses in Year Two. 
(c) ADMINISTRATIVE EXPENSES
OF COMPACTS.— 
There are authorized to be appropriated to the Secretary 
such sums as may be necessary for grants for the adminis-
trative expenses of interstate compacts in Years One 
through Three. 
(d) EXPENSES OF AMTRAK.—There are authorized to 
be appropriated to the Secretary such sums as may be 
necessary for grants for the administrative expenses of 
Amtrak in Years Two through Six.. 
(e) GRANTS MADE AFTER YEAR TWO.—After the 
last day of Year Two, the Secretary may not enter into 
a grant agreement under this Act, other than section 
206(c), or part C of Title V of title 49, United States
Code, unless each other party to the grant agreement is 
a State, regional compact, or other public entity. 
TITLE III—GRANTS AND OTHER 
ASSISTANCE FOR INTERCITY 
PASSENGER RAIL SERVICE 
SEC. 301. CAPITAL ASSISTANCE FOR INTERCITY PAS-
SENGER RAIL SERVICE. 
(a) Part C of Subtitle V of title 49, United States 
Code, is amended by inserting the following after chapter 
243: 
‘‘CHAPTER 
244—INTERCITY 
PASSENGER 
RAIL SERVICE CORRIDOR CAPITAL AS-
SISTANCE 
‘‘§ 24401. Definitions; effective date 
‘‘(a) DEFINITIONS.—In this chapter— 
‘‘(1) ‘applicant’ means a State, an Interstate 
Compact (including the North East Corridor Com-
pact as specified in section 103 of the Passenger 
Rail Investment Reform Act), or a public agency es-
tablished by one or more States and having responsi-
bility for providing intercity passenger rail service. 
‘‘(2) ‘capital project’ means a project within a 
corridor plan or program for— 
‘‘(A) acquiring, constructing, supervising 
or inspecting equipment or a facility for use in
intercity passenger rail service, expenses inci-
dental to the acquisition or construction (in-
cluding designing, engineering, location sur-
veying, mapping, environmental studies, and ac-
quiring rights-of-way), payments for the capital 
portions of rail trackage rights agreements, 
passenger rail-related intelligent transportation 
systems, highway-rail grade crossing improve-
ments on routes used for intercity passenger 
rail service, relocation assistance, acquiring re-
placement housing sites, and acquiring, con-
structing, relocating, and rehabilitating replace-
ment housing; 
‘‘(B) rehabilitating, remanufacturing or 
overhauling rail rolling stock and facilities used 
primarily in intercity passenger rail service; and 
‘‘(C) the first-dollar liability costs for in-
surance related to the provision of intercity pas-
senger rail service. 
‘‘(3) ‘intercity passenger rail service’ means 
transportation services with the primary purpose of 
passenger transportation between towns, cities and 
metropolitan areas by rail, including high-speed rail. 
‘‘(b) EFFECTIVE DATE.—This chapter is effective on 
the first day of Year Two.
‘‘§ 24402. Capital investment grants to support inter-
city passenger rail service 
‘‘(a) GENERAL AUTHORITY.—(1) The Secretary of 
Transportation may make grants under this section to an 
applicant to assist in financing the capital costs of facili-
ties and equipment necessary to provide intercity pas-
senger rail transportation. 
‘‘(2) The Secretary shall require that a grant under 
this section be subject to the terms, conditions, require-
ments, and provisions the Secretary decides are necessary 
or appropriate for the purposes of this section, including 
requirements for the disposition of net increases in value 
of real property resulting from the project assisted under 
this section. 
‘‘(3) A grant under this section may not be made for 
a project or program of projects that qualifies for financial 
assistance under chapter 53 of this title. 
‘‘(b) PROJECT AS PART OF APPROVED PROGRAM.— 
(1) The Secretary may not approve a grant for a project 
under this section unless the Secretary finds that the 
project is part of an approved corridor plan and program 
developed under section 5303 of this title and that the 
applicant or recipient has or will have the legal, financial, 
and technical capacity to carry out the project (including 
safety and security aspects of the project), satisfactory 
continuing control over the use of the equipment or facili-
ties, and the capability and willingness to maintain the 
equipment or facilities. 
‘‘(2) An applicant shall provide sufficient information 
upon which the Secretary can make the findings required 
by this subsection. 
‘‘(3) If an applicant has not selected the proposed op-
erator of its service competitively, the applicant shall pro-
vide written justification to the Secretary showing why the 
proposed operator is the best, taking into account price 
and other factors, and that use of the proposed operator 
will not increase the capital cost of the project. 
‘‘(4) An applicant shall demonstrate that it has 
agreed with the railroad over which the intercity passenger 
rail service will operate concerning the applicant’s oper-
ating and capital plans. 
‘‘(c) LETTERS OF INTENT, FULL FUNDING GRANT 
AGREEMENTS, AND EARLY SYSTEMS WORK AGREE-
MENTS.—(1)(A) The Secretary may issue a letter of intent 
to an applicant announcing an intention to obligate, for 
a major capital project under this section, an amount from 
future available budget authority specified in law that is 
not more than the amount stipulated as the financial par-
ticipation of the Secretary in the project. 
‘‘(B) At least 30 days before issuing a letter under 
subparagraph (A) of this paragraph or entering into a full
funding grant agreement, the Secretary shall notify in 
writing the Committee on Transportation and Infrastruc-
ture of the House of Representatives and the Committee 
on Commerce, Science, and Transportation of the Senate 
and the House and Senate Committees on Appropriations 
of the proposed letter or agreement. The Secretary shall 
include with the notification a copy of the proposed letter 
or agreement as well as the evaluations and ratings for 
the project. 
‘‘(C) The issuance of a letter is deemed not to be 
an obligation under sections 1108(c) and (d), 1501, and 
1502(a) of title 31, U.S.C., or an administrative commit-
ment. 
‘‘(D) An obligation or administrative commitment 
may be made only when amounts are appropriated. 
‘‘(2)(A) The Secretary may make a full funding grant 
agreement with an applicant. The agreement shall— 
‘‘(i) establish the terms of participation by the 
United States Government in a project under this 
section; 
‘‘(ii) establish the maximum amount of Govern-
ment financial assistance for the project; 
‘‘(iii) cover the period of time for completing 
the project, including a period extending beyond the 
period of an authorization; and
‘‘(iv) make timely and efficient management of 
the project easier according to the law of the United 
States. 
‘‘(B) An agreement under this paragraph obligates 
an amount of available budget authority specified in law 
and may include a commitment, contingent on amounts 
to be specified in law in advance for commitments under 
this paragraph, to obligate an additional amount from fu-
ture available budget authority specified in law. The 
agreement shall state that the contingent commitment is 
not an obligation of the Government and is subject to sub-
ject to the availability of appropriations made by Federal 
law and to Federal laws in force on or enacted after the 
date of the contingent commitment. Interest and other fi-
nancing 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 
certify, in a way satisfactory to the Secretary, that the 
applicant has shown reasonable diligence in seeking the 
most favorable financing terms. 
‘‘(3)(A) The Secretary may make an early systems 
work agreement with an applicant if a record of decision
under the National 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 pro-
mote ultimate completion of the project more rapidly 
and at less cost. 
‘‘(B) A work agreement under this paragraph obli-
gates an amount of available budget authority specified 
in law and shall provide for reimbursement of preliminary 
costs of carrying out the project, including land acquisi-
tion, timely procurement of system elements for which 
specifications are decided, and other activities the Sec-
retary decides are appropriate to make efficient, long-term 
project management easier. A work agreement shall cover 
the period of time the Secretary considers appropriate. 
The period may extend beyond the period of current au-
thorization. Interest and other financing costs of effi-
ciently carrying out the work agreement within a reason-
able 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 reasonable diligence in seeking the 
most favorable financing terms. If an applicant does not 
carry out the project for reasons within the control of the 
applicant, the applicant shall repay all Government pay-
ments made under the work agreement plus reasonable in-
terest and penalty charges the Secretary establishes in the 
agreement. 
‘‘(4) The total estimated amount of future obligations 
of the Government and contingent commitments to incur 
obligations covered by all outstanding letters of intent, full 
funding grant agreements, and early systems work agree-
ments may be not more than the amount authorized under 
section 24405 of this title, less an amount the Secretary 
reasonably estimates is necessary for grants under this 
section not covered by a letter. The total amount covered 
by new letters and contingent commitments included in 
full funding grant agreements and early systems work 
agreements may be not more than a limitation specified 
in law. 
‘‘(d) FEDERAL SHARE OF NET PROJECT COST.— 
(1)(A) Based on engineering studies, studies of economic 
feasibility, and information on the expected use of equip-
ment or facilities, the Secretary shall estimate the net 
project cost.
‘‘(B) A grant for the project shall not exceed the 
specified percentage of the project net capital cost estab-
lished for the year the grant is approved, as follows: 
‘‘(i) 100 percent in the case of approval for 
Year Two. 
‘‘(ii) 80 percent in the case of approval for Year 
Three. 
‘‘(iii) 60 percent in the case of approval for 
Year Four. 
‘‘(iii) 50 percent in the case of approval for 
Year Five, and thereafter. 
‘‘(C) The Secretary shall give priority in allocating 
future obligations and contingent commitments to incur 
obligations to grant requests seeking a lower Federal 
share of the project net capital cost. 
‘‘(2) Up to an additional 30 percent of project net 
capital cost may be funded from amounts appropriated to 
or made available to a department or agency of the Fed-
eral Government that are eligible to be expended for trans-
portation. 
‘‘(e) UNDERTAKING PROJECTS
IN ADVANCE.—(1) 
The Secretary may pay the Federal share of the net cap-
ital project cost to an applicant that carries out any part 
of a project described in this section according to all appli-
cable procedures and requirements if—
‘‘(A) the applicant applies for the payment; 
‘‘(B) the Secretary approves the payment; and 
‘‘(C) before carrying out the part of the project, 
the Secretary approves the plans and specifications 
for the part in the same way as other projects under 
this section. 
‘‘(2) The cost of carrying out part of a project in-
cludes the amount of interest earned and payable on bonds 
issued by the applicant to the extent proceeds of the bonds 
are expended in carrying out the part. However, the 
amount of interest under this paragraph may not be more 
than the most favorable interest terms reasonably avail-
able for the project at the time of borrowing. The appli-
cant shall certify, in a manner satisfactory to the Sec-
retary, that the applicant has shown reasonable diligence 
in seeking the most favorable financial terms. 
‘‘(3) The Secretary shall consider changes in capital 
project cost indices when determining the estimated cost 
under paragraph (2) of this subsection. 
‘‘§ 24403. Project management oversight 
‘‘(a) PROJECT
MANAGEMENT
PLAN
REQUIRE-
MENTS.—To receive Federal financial assistance for a 
major capital project under this chapter, an applicant 
must prepare and carry out a project management plan
approved by the Secretary of Transportation. The plan 
shall provide for— 
‘‘(1) adequate recipient staff organization with 
well-defined reporting relationships, statements of 
functional responsibilities, job descriptions, and job 
qualifications; 
‘‘(2) a budget covering the project management 
organization, appropriate consultants, property ac-
quisition, utility relocation, systems demonstration 
staff, audits, and miscellaneous payments the recipi-
ent may be prepared to justify; 
‘‘(3) a construction schedule for the project; 
‘‘(4) a document control procedure and record-
keeping system; 
‘‘(5) a change order procedure that includes a 
documented, systematic approach to handling the 
construction change orders; 
‘‘(6) organizational structures, management 
skills, and staffing levels required throughout the 
construction phase; 
‘‘(7) quality control and quality assurance func-
tions, procedures, and responsibilities for construc-
tion, system installation, and integration of system 
components; 
‘‘(8) material testing policies and procedures;