minimum standards developed under section 207 of 
the Passenger Rail Investment and Improvement 
Act of 2008; 
‘‘(3) encourage intermodal connectivity through 
projects that provide direct connections between 
train stations, airports, bus terminals, subway sta-
tions, ferry ports, and other modes of transpor-
tation; 
‘‘(4) ensure that each project is compatible 
with, and is operated in conformance with— 
‘‘(A) plans developed pursuant to the re-
quirements of section 135 of title 23, United 
States Code; and 
‘‘(B) the national rail plan (if it is avail-
able); and 
‘‘(5) favor the following kinds of projects: 
‘‘(A) Projects that are expected to have a 
significant favorable impact on air or highway 
traffic congestion, capacity, or safety. 
‘‘(B) Projects that improve freight or com-
muter rail operations. 
‘‘(C) Projects that have significant envi-
ronmental benefits, including projects that in-
volve the purchase of environmentally sensitive, 
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fuel-efficient, and cost-effective passenger rail 
equipment. 
‘‘(D) Projects that are— 
‘‘(i) at a stage of preparation that all 
pre-commencement compliance with envi-
ronmental protection requirements has al-
ready been completed; and 
‘‘(ii) ready to be commenced. 
‘‘(E) Projects with positive economic and 
employment impacts. 
‘‘(F) Projects that encourage the use of 
positive train control technologies. 
‘‘(G) Projects that have commitments of 
funding from non-Federal Government sources 
in a total amount that exceeds the minimum 
amount of the non-Federal contribution re-
quired for the project. 
‘‘(H) Projects that involve donated prop-
erty interests or services. 
‘‘(I) Projects that are identified by the 
Surface Transportation Board as necessary to 
improve the on time performance and reliability 
of intercity passenger rail under section 
24308(f). 
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‘‘(J) 
Projects 
described 
in 
section 
5302(a)(1)(G) of this title that are designed to 
support intercity passenger rail service. 
‘‘(K) Projects that encourage intermodal 
connectivity, create significant opportunity for 
State and private contributions toward station 
development, are energy and environmentally 
efficient, and have economic benefits. 
‘‘(d) AMTRAK ELIGIBILITY.—To receive a grant 
under this section, the National Railroad Passenger Cor-
poration may enter into a cooperative agreement with 1 
or more States to carry out 1 or more projects on a State 
rail plan’s ranked list of rail capital projects developed 
under section 22504(a)(5) of this title. 
‘‘(e) LETTERS OF INTENT, FULL FUNDING GRANT 
AGREEMENTS, AND EARLY SYSTEMS WORK AGREE-
MENTS.— 
‘‘(1)(A) The Secretary may issue a letter of in-
tent to an applicant announcing an intention to obli-
gate, 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 participation of the Sec-
retary in the project. 
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‘‘(B) At least 30 days before issuing a letter 
under subparagraph (A) of this paragraph or enter-
ing into a full funding grant agreement, the Sec-
retary shall notify in writing the Committee on 
Transportation and Infrastructure 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 pro-
posed letter or agreement as well as the evaluations 
and ratings for the project. 
‘‘(C) An obligation or administrative commit-
ment may be made only when amounts are appro-
priated. 
‘‘(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 
Government financial assistance for the project; 
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‘‘(iii) cover the period of time for com-
pleting the project, including a period extending 
beyond the period of an authorization; and 
‘‘(iv) make timely and efficient manage-
ment of the project easier according to the law 
of the United States. 
‘‘(B) An agreement under this paragraph obli-
gates an amount of available budget authority speci-
fied in law and may include a commitment, contin-
gent on amounts to be specified in law in advance 
for commitments under this paragraph, to obligate 
an additional amount from future 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 the availability 
of appropriations made by Federal law and to Fed-
eral laws in force on or enacted after the date of the 
contingent commitment. 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 reason-
ably available for the project at the time of bor-
rowing. The applicant shall certify, in a way satis-
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factory to the Secretary, that the applicant has 
shown reasonable diligence in seeking the most fa-
vorable financing terms. 
‘‘(3)(A) The Secretary may make an early sys-
tems 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 
promote ultimate completion of the project 
more rapidly and at less cost. 
‘‘(B) A work agreement under this paragraph 
obligates an amount of available budget authority 
specified in law and shall provide for reimbursement 
of preliminary costs of carrying out the project, in-
cluding land acquisition, timely procurement of sys-
tem elements for which specifications are decided, 
and other activities the Secretary decides are appro-
priate to make efficient, long-term project manage-
ment easier. A work agreement shall cover the pe-
riod of time the Secretary considers appropriate. 
The period may extend beyond the period of current 
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ered by new letters and contingent commitments in-
cluded in full funding grant agreements and early 
systems work agreements may be not more than a 
limitation specified in law. 
‘‘(f) FEDERAL SHARE OF NET PROJECT COST.— 
‘‘(1)(A) Based on engineering studies, studies 
of economic feasibility, and information on the ex-
pected use of equipment or facilities, the Secretary 
shall estimate the net project cost. 
‘‘(B) A grant for the project shall not exceed 80 
percent of the project net capital cost. 
‘‘(C) The Secretary shall give priority in allo-
cating future obligations and contingent commit-
ments to incur obligations to grant requests seeking 
a lower Federal share of the project net capital cost. 
‘‘(2) Up to an additional 20 percent of the re-
quired non-Federal funds may be funded from 
amounts appropriated to or made available to a de-
partment or agency of the Federal Government that 
are eligible to be expended for transportation. 
‘‘(3) 50 percent of the average amounts ex-
pended by a State or group of States (including the 
District of Columbia) for capital projects to benefit 
intercity passenger rail service and operating costs 
in fiscal years 2002, 2003, 2004, 2005, 2006, 2007, 
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and 2008 shall be credited towards the matching re-
quirements for grants awarded in fiscal years 2009, 
2010, and 2011 under this section. The Secretary 
may require such information as necessary to verify 
such expenditures. 
‘‘(4) 50 percent of the average amounts ex-
pended by a State or group of States (including the 
District of Columbia) in a fiscal year, beginning in 
fiscal year 2007, for capital projects to benefit inter-
city passenger rail service or for the operating costs 
of such service above the average capital and oper-
ating expenditures made for such service in fiscal 
years 2004, 2005, 2006, 2007, and 2008 shall be 
credited towards the matching requirements for 
grants awarded under this section. The Secretary 
may require such information as necessary to verify 
such expenditures. 
‘‘(g) UNDERTAKING PROJECTS IN ADVANCE.— 
‘‘(1) The Secretary may pay the Federal share 
of the net capital project cost to an applicant that 
carries out any part of a project described in this 
section according to all applicable procedures and re-
quirements if— 
‘‘(A) the applicant applies for the payment; 
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‘‘(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 
includes the amount of interest earned and payable 
on bonds issued by the applicant to the extent pro-
ceeds 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 available for the project at 
the time of borrowing. The applicant shall certify, in 
a manner satisfactory to the Secretary, that the ap-
plicant 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 es-
timated cost under paragraph (2) of this subsection. 
‘‘(h) 2-YEAR AVAILABILITY.—Funds appropriated 
under this section shall remain available until expended. 
If any amount provided as a grant under this section is 
not obligated or expended for the purposes described in 
subsection (a) within 2 years after the date on which the 
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State received the grant, such sums shall be returned to 
the Secretary for other intercity passenger rail develop-
ment projects under this section at the discretion of the 
Secretary. 
‘‘(i) SPECIAL TRANSPORTATION CIRCUMSTANCES.— 
In carrying out this section, the Secretary shall allocate 
an appropriate portion of the amounts available under this 
section to provide grants to States— 
‘‘(1) in which there is no intercity passenger 
rail service for the purpose of funding freight rail 
capital projects that are on a State rail plan devel-
oped under chapter 225 of this title that provide 
public benefits (as defined in chapter 225) as deter-
mined by the Secretary; or 
‘‘(2) in which the rail transportation system is 
not physically connected to rail systems in the conti-
nental United States or may not otherwise qualify 
for a grant under this section due to the unique 
characteristics of the geography of that State or 
other relevant considerations, for the purpose of 
funding transportation-related capital projects. 
‘‘(j) SMALL CAPITAL PROJECTS.—The Secretary 
shall make available $10,000,000 annually from the 
amounts authorized under section 101(d) of the Passenger 
Rail Investment and Improvement Act of 2008 beginning 
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in fiscal year 2009 for grants for capital projects eligible 
under this section not exceeding $2,000,000, including 
costs eligible under section 206(c) of that Act. The Sec-
retary may wave requirements of this section, including 
state rail plan requirements, as appropriate. 
‘‘§ 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; 
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‘‘(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; 
‘‘(9) internal plan implementation and reporting 
requirements; 
‘‘(10) criteria and procedures to be used for 
testing the operational system or its major compo-
nents; 
‘‘(11) periodic updates of the plan, especially 
related to project budget and project schedule, fi-
nancing, and ridership estimates; and 
‘‘(12) the recipient’s commitment to submit a 
project budget and project schedule to the Secretary 
each month. 
‘‘(b) SECRETARIAL OVERSIGHT.— 
‘‘(1) The Secretary may use no more than 0.5 
percent of amounts made available in a fiscal year 
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for capital projects under this chapter to enter into 
contracts to oversee the construction of such 
projects. 
‘‘(2) The Secretary may use amounts available 
under paragraph (1) of this subsection to make con-
tracts for safety, procurement, management, and fi-
nancial compliance reviews and audits of a recipient 
of amounts under paragraph (1). 
‘‘(3) The Federal Government shall pay the en-
tire cost of carrying out a contract under this sub-
section. 
‘‘(c) ACCESS TO SITES AND RECORDS.—Each recipi-
ent of assistance under this chapter shall provide the Sec-
retary and a contractor the Secretary chooses under sub-
section (c) of this section with access to the construction 
sites and records of the recipient when reasonably nec-
essary. 
‘‘§ 24404. Use of capital grants to finance first-dollar 
liability of grant project 
‘‘Notwithstanding the requirements of section 24402 
of this chapter, the Secretary of Transportation may ap-
prove the use of capital assistance under this chapter to 
fund self-insured retention of risk for the first tier of li-
ability insurance coverage for rail passenger service associ-
ated with the capital assistance grant, but the coverage 
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may 
not 
exceed 
$20,000,000 
per 
occurrence 
or 
$20,000,000 in aggregate per year. 
‘‘§ 24405. Grant conditions 
‘‘(a) DOMESTIC BUYING PREFERENCE.— 
‘‘(1) REQUIREMENT.— 
‘‘(A) IN
GENERAL.—In carrying out a 
project funded in whole or in part with a grant 
under this title, the grant recipient shall pur-
chase only— 
‘‘(i) unmanufactured articles, mate-
rial, and supplies mined or produced in the 
United States; or 
‘‘(ii) manufactured articles, material, 
and supplies manufactured in the United 
States substantially from articles, material, 
and supplies mined, produced, or manufac-
tured in the United States. 
‘‘(B) DE
MINIMIS
AMOUNT.—Subpara-
graph (A) applies only to a purchase in an total 
amount that is not less than $1,000,000. 
‘‘(2) EXEMPTIONS.—On application of a recipi-
ent, the Secretary may exempt a recipient from the 
requirements of this subsection if the Secretary de-
cides that, for particular articles, material, or sup-
plies— 
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‘‘(A) such requirements are inconsistent 
with the public interest; 
‘‘(B) the cost of imposing the requirements 
is unreasonable; or 
‘‘(C) the articles, material, or supplies, or 
the articles, material, or supplies from which 
they are manufactured, are not mined, pro-
duced, or manufactured in the United States in 
sufficient and reasonably available commercial 
quantities and are not of a satisfactory quality. 
‘‘(3) UNITED STATES DEFINED.—In this sub-
section, the term ‘the United States’ means the 
States, territories, and possessions of the United 
States and the District of Columbia. 
‘‘(b) OPERATORS DEEMED RAIL CARRIERS AND EM-
PLOYERS FOR CERTAIN PURPOSES.—A person that con-
ducts rail operations over rail infrastructure constructed 
or improved with funding provided in whole or in part in 
a grant made under this title shall be considered a rail 
carrier as defined in section 10102(5) of this title for pur-
poses of this title and any other statute that adopts that 
definition or in which that definition applies, including— 
‘‘(1) the Railroad Retirement Act of 1974 (45 
U.S.C. 231 et seq.); 
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‘‘(2) the Railway Labor Act (43 U.S.C. 151 et 
seq.); and 
‘‘(3) the Railroad Unemployment Insurance Act 
(45 U.S.C. 351 et seq.). 
‘‘(c) GRANT CONDITIONS.—The Secretary shall re-
quire as a condition of making any grant under this title 
for a project that uses rights-of-way owned by a railroad 
that— 
‘‘(1) a written agreement exist between the ap-
plicant and the railroad regarding such use and 
ownership, including— 
‘‘(A) any compensation for such use; 
‘‘(B) assurances regarding the adequacy of 
infrastructure capacity to accommodate both 
existing and future freight and passenger oper-
ations; 
‘‘(C) an assurance by the railroad that col-
lective bargaining agreements with the rail-
road’s employees (including terms regulating 
the contracting of work) will remain in full 
force and effect according to their terms for 
work performed by the railroad on the railroad 
transportation corridor; and 
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‘‘(D) an assurance that an applicant com-
plies with liability requirements consistent with 
section 28103 of this title; and 
‘‘(2) the applicant agrees to comply with— 
‘‘(A) the standards of section 24312 of this 
title, as such section was in effect on September 
1, 2003, with respect to the project in the same 
manner that the National Railroad Passenger 
Corporation is required to comply with those 
standards for construction work financed under 
an agreement made under section 24308(a) of 
this title; and 
‘‘(B) the protective arrangements estab-
lished under section 504 of the Railroad Revi-
talization and Regulatory Reform Act of 1976 
(45 U.S.C. 836) with respect to employees af-
fected by actions taken in connection with the 
project to be financed in whole or in part by 
grants under this chapter. 
‘‘(d) REPLACEMENT OF EXISTING INTERCITY PAS-
SENGER RAIL SERVICE.— 
‘‘(1) COLLECTIVE
BARGAINING
AGREEMENT 
FOR INTERCITY PASSENGER RAIL PROJECTS.—Any 
entity providing intercity passenger railroad trans-
portation that begins operations after the date of en-
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actment of this Act on a project funded in whole or 
in part by grants made under this title and replaces 
intercity rail passenger service that was provided by 
Amtrak, unless such service was provided solely by 
Amtrak to another entity, as of such date shall enter 
into an agreement with the authorized bargaining 
agent or agents for adversely affected employees of 
the predecessor provider that— 
‘‘(A) gives each such qualified employee of 
the predecessor provider priority in hiring ac-
cording to the employee’s seniority on the pred-
ecessor provider for each position with the re-
placing entity that is in the employee’s craft or 
class and is available within 3 years after the 
termination of the service being replaced; 
‘‘(B) establishes a procedure for notifying 
such an employee of such positions; 
‘‘(C) establishes a procedure for such an 
employee to apply for such positions; and 
‘‘(D) establishes rates of pay, rules, and 
working conditions. 
‘‘(2) IMMEDIATE REPLACEMENT SERVICE.— 
‘‘(A) NEGOTIATIONS.—If the replacement 
of preexisting intercity rail passenger service oc-
curs concurrent with or within a reasonable 
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time before the commencement of the replacing 
entity’s rail passenger service, the replacing en-
tity shall give written notice of its plan to re-
place existing rail passenger service to the au-
thorized collective bargaining agent or agents 
for the potentially adversely affected employees 
of the predecessor provider at least 90 days be-
fore the date on which it plans to commence 
service. Within 5 days after the date of receipt 
of such written notice, negotiations between the 
replacing entity and the collective bargaining 
agent or agents for the employees of the prede-
cessor provider shall commence for the purpose 
of reaching agreement with respect to all mat-
ters set forth in subparagraphs (A) through (D) 
of paragraph (1). The negotiations shall con-
tinue for 30 days or until an agreement is 
reached, whichever is sooner. If at the end of 
30 days the parties have not entered into an 
agreement with respect to all such matters, the 
unresolved issues shall be submitted for arbitra-
tion in accordance with the procedure set forth 
in subparagraph (B). 
‘‘(B) ARBITRATION.—If an agreement has 
not been entered into with respect to all mat-
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ters set forth in subparagraphs (A) through (D) 
of paragraph (1) as described in subparagraph 
(A) of this paragraph, the parties shall select 
an arbitrator. If the parties are unable to agree 
upon the selection of such arbitrator within 5 
days, either or both parties shall notify the Na-
tional Mediation Board, which shall provide a 
list of seven arbitrators with experience in arbi-
trating rail labor protection disputes. Within 5 
days after such notification, the parties shall al-
ternately strike names from the list until only 
1 name remains, and that person shall serve as 
the neutral arbitrator. Within 45 days after se-
lection of the arbitrator, the arbitrator shall 
conduct a hearing on the dispute and shall 
render a decision with respect to the unresolved 
issues among the matters set forth in subpara-
graphs (A) through (D) of paragraph (1). This 
decision shall be final, binding, and conclusive 
upon the parties. The salary and expenses of 
the arbitrator shall be borne equally by the par-
ties; all other expenses shall be paid by the 
party incurring them. 
‘‘(3) SERVICE
COMMENCEMENT.—A replacing 
entity under this subsection shall commence service 
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only after an agreement is entered into with respect 
to the matters set forth in subparagraphs (A) 
through (D) of paragraph (1) or the decision of the 
arbitrator has been rendered. 
‘‘(4) SUBSEQUENT
REPLACEMENT
OF
SERV-
ICE.—If the replacement of existing rail passenger 
service takes place within 3 years after the replacing 
entity commences intercity passenger rail service, 
the replacing entity and the collective bargaining 
agent or agents for the adversely affected employees 
of the predecessor provider shall enter into an agree-
ment with respect to the matters set forth in sub-
paragraphs (A) through (D) of paragraph (1). If the 
parties have not entered into an agreement with re-
spect to all such matters within 60 days after the 
date on which the replacing entity replaces the pred-
ecessor provider, the parties shall select an arbi-
trator using the procedures set forth in paragraph 
(2)(B), who shall, within 20 days after the com-
mencement of the arbitration, conduct a hearing and 
decide all unresolved issues. This decision shall be 
final, binding, and conclusive upon the parties. 
‘‘(e) INAPPLICABILITY
TO CERTAIN RAIL OPER-
ATIONS.—Nothing in this section applies to— 
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‘‘(1) commuter rail passenger transportation 
(as defined in section 24102(4) of this title) oper-
ations of a State or local government authority (as 
those terms are defined in section 5302(11) and (6), 
respectively, of this title) eligible to receive financial 
assistance under section 5307 of this title, or to its 
contractor performing services in connection with 
commuter rail passenger operations (as so defined); 
‘‘(2) the Alaska Railroad or its contractors; or 
‘‘(3) the National Railroad Passenger Corpora-
tion’s access rights to railroad rights of way and fa-
cilities under current law’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The table of chapters for the title is amend-
ed by inserting the following after the item relating 
to chapter 243: 
‘‘244. Intercity passenger rail service capital assistance ...24401’’. 
(2) The chapter analysis for subtitle V is 
amended by inserting the following after the item re-
lating to chapter 243: 
‘‘244. Intercity passenger rail service capital assistance ...24401’’. 
SEC. 302. STATE RAIL PLANS. 
(a) IN GENERAL.—Part B of subtitle V is amended 
by adding at the end the following: 
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‘‘CHAPTER 225—STATE RAIL PLANS AND 
HIGH PRIORITY PROJECTS 
‘‘Sec. 22501. Definitions. 
‘‘Sec. 22502. Authority. 
‘‘Sec. 22503. Purposes. 
‘‘Sec. 22504. Transparency; coordination; review. 
‘‘Sec. 22505. Content. 
‘‘Sec. 22506. Review. 
‘‘§ 22501. Definitions 
‘‘In this chapter: 
‘‘(1) PRIVATE BENEFIT.— 
‘‘(A) IN
GENERAL.—The term ‘private 
benefit’— 
‘‘(i) means a benefit accrued to a per-
son or private entity, other than the Na-
tional Railroad Passenger Corporation, 
that directly improves the economic and 
competitive condition of that person or en-
tity through improved assets, cost reduc-
tions, service improvements, or any other 
means as defined by the Secretary; and 
‘‘(ii) shall be determined on a project- 
by-project basis, based upon an agreement 
between the parties. 
‘‘(B) CONSULTATION.—The Secretary may 
seek the advice of the States and rail carriers 
in further defining this term. 
‘‘(2) PUBLIC BENEFIT.— 
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‘‘(A) IN GENERAL.—The term ‘public ben-
efit’— 
‘‘(i) means a benefit accrued to the 
public in the form of enhanced mobility of 
people or goods, environmental protection 
or enhancement, congestion mitigation, en-
hanced trade and economic development, 
improved air quality or land use, more effi-
cient energy use, enhanced public safety, 
reduction of public expenditures due to im-
proved transportation efficiency or infra-
structure preservation, and any other posi-
tive community effects as defined by the 
Secretary; and 
‘‘(ii) shall be determined on a project- 
by-project basis, based upon an agreement 
between the parties. 
‘‘(B) CONSULTATION.—The Secretary may 
seek the advice of the States and rail carriers 
in further defining this term. 
‘‘(3) STATE.—The term ‘State’ means any of 
the 50 States and the District of Columbia. 
‘‘(4) STATE
RAIL
TRANSPORTATION
AUTHOR-
ITY.—The term ‘State rail transportation authority’ 
means the State agency or official responsible under 
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