to Congress a report that identifies, across the Armed 
Forces, the locations and concentrations of flex-fuel vehi-
cles in the current and planned inventory of the Depart-
ment of Defense, as well as the diesel engine vehicles and 
equipment, so as to prioritize the location and placement 
of new alternative fuel infrastructure to maximize the use 
of alternative fuels (such as E–85 and biodiesel) in vehi-
cles acquired under the requirements of the Energy Policy 
Act of 1992. The report shall also identify the locations 
that are currently served by contract or commercial avail-
ability, and contain recommendations for future coordina-
tion and use of commercial outlets of alternative fuels. 
SEC. 407. FUNDS SET ASIDE FOR ALTERNATIVE FUEL IN-
FRASTRUCTURE. 
(a) PERCENTAGE REQUIRED.—Of the amounts ap-
propriated or otherwise made available for a fiscal year 
for activities of the Defense Energy Support Center of the 
Defense Logistics Agency for noncombat fuel infrastruc-
ture, not less than 5 percent shall be available only for 
alternative fuel (such as E–85 and biodiesel) infrastruc-
ture. 
(b) TERMINATION.—The requirement of subsection 
(a) terminates as of the date on which the Secretary of 
Defense submits to Congress the Secretary’s certification 
that the Department of Defense can run all noncombat 
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flex-fuel vehicles in the inventory of the Department on 
alternative fuels (such as E–85 and biodiesel). 
SEC. 408. AUTHORITY FOR DEPARTMENT OF DEFENSE TO 
ENTER INTO LONG-TERM CONTRACTS TO 
PROCURE BIOBASED FUEL AND UNCONVEN-
TIONAL FUEL. 
Section 2922d of title 10, United States Code, is 
amended— 
(1) in subsection (b), by inserting after ‘‘cov-
ered fuel’’ the following: ‘‘, biobased fuel, or coal-to- 
liquid fuel’’; 
(2) in subsection (d)— 
(A) by inserting after ‘‘covered fuel’’ the 
following: ‘‘, biobased fuel, or coal-to-liquid 
fuel’’; and 
(B) by striking ‘‘1 or more years’’ and in-
serting ‘‘up to 25 years’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) The term ‘biobased fuel’ has the meaning 
provided in section 303(2) of the Biomass Research 
and Development Act of 2000 (7 U.S.C. 8101 
note)), including E–85 gasoline, biodiesel, or bio-
diesel blended fuel. 
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‘‘(2) The term ‘coal-to-liquid fuel’ means a fuel 
produced from a coal-to-liquid process or technology 
in a coal-to-liquid facility. 
‘‘(3) The term ‘coal-to-liquid’ means— 
‘‘(A) with respect to a process or tech-
nology, the use of the coal resources of the 
United States, using the class of chemical reac-
tions known as Fischer-Tropsch, to produce 
synthetic fuel suitable for transportation; and 
‘‘(B) with respect to a facility, the portion 
of a facility related to the Fischer-Tropsch 
process, or related to Fischer-Tropsch finished 
fuel production, that ensures the capture, trans-
portation, and sequestration of byproducts of 
the use of coal at the facility, including carbon 
emissions.’’. 
SEC. 409. FEDERAL SUPPORT FOR PLUG-IN HYBRID ELEC-
TRIC VEHICLES. 
(a) AMENDMENT.—Section 301 of the Energy Policy 
Act of 1992 (42 U.S.C. 13211) is amended— 
(1) in paragraph (8)— 
(A) by striking ‘‘or’’ at the end of subpara-
graph (A); 
(B) by inserting ‘‘or’’ at the end of sub-
paragraph (B); and 
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(C) by adding after subparagraph (B) the 
following new subparagraph: 
‘‘(C) a hybrid electric vehicle;’’; 
(2) by redesignating paragraphs (11), (12), 
(13), and (14) as paragraphs (12), (13), (14), and 
(16) respectively; 
(3) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) the term ‘hybrid electric vehicle’ means a 
vehicle that— 
‘‘(A) can operate on either liquid combus-
tible fuel or electric power provided by an on-
board battery; and 
‘‘(B) utilizes regenerative power capture 
technology to recover energy expended in brak-
ing the vehicle for use in recharging the bat-
tery;’’; 
(4) in paragraph (14), as so redesignated by 
paragraph (2) of this subsection, by striking ‘‘and’’ 
at the end; and 
(5) by inserting after paragraph (14), as so re-
designated by paragraph (2) of this subsection, the 
following new paragraph: 
‘‘(15) the term ‘plug-in hybrid electric vehicle’ 
means a hybrid electric vehicle that can operate sole-
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ly on electric power for a minimum of 20 miles 
under city driving conditions, and that is capable of 
recharging its battery from an offboard electricity 
source; and’’. 
(b) PLUG-IN HYBRID ELECTRIC VEHICLE MATCHING 
GRANTS.— 
(1) ESTABLISHMENT.—The Secretary of En-
ergy shall establish a competitive grant program to 
provide not more than 25 grants annually to State 
governments, local governments, metropolitan trans-
portation authorities, or combinations thereof for the 
purposes of procuring and testing plug-in hybrid 
electric vehicles. 
(2) APPLICATIONS.— 
(A) REQUIREMENTS.—The Secretary shall 
issue requirements for applying for grants 
under the program. The Secretary shall require 
that applications, at a minimum, include a de-
scription of how data will be— 
(i) collected on the— 
(I) performance of the vehicle or 
vehicles and the components, includ-
ing the battery, energy management, 
and charging systems, under various 
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driving speeds, trip ranges, traffic, 
and other driving conditions; 
(II) costs of the vehicle or vehi-
cles, including acquisition, operating, 
and maintenance costs, and how the 
project or projects will be self-sus-
taining after Federal assistance is 
completed; and 
(III) emissions of the vehicle or 
vehicles, including greenhouse gases, 
and the amount of petroleum dis-
placed as a result of the project or 
projects; and 
(ii) summarized for dissemination to 
the Department of Energy, other grantees, 
and the public. 
(B) PARTNERS.—An applicant under sub-
paragraph (A) may carry out a project or 
projects in partnership with one or more private 
entities. 
(C) RESTRICTIONS.—The Secretary shall 
award grants under this subsection with geo-
graphic diversity such that there is at least one 
recipient government partner in every PADD, 
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and in every Sub-PADD in the case of PADD 
1. 
(c) REPORT.—The Secretary of Energy shall report 
to Congress on the potential for Federal Government pro-
curement and acquisition of plug-in electric hybrid vehi-
cles, including a proposed schedule for the acquisition of 
such vehicles, and including possible participation in com-
mitment programs such as the National Plug-in Partners 
Campaign. 
SEC. 410. CONGRESSIONAL ALTERNATIVE FUEL USE IN VE-
HICLES. 
(a) FINDINGS.—The Congress finds that— 
(1) Members of Congress should follow their 
own example of setting forth legislation that encour-
ages the use of alternatively fueled vehicles; 
(2) in 2005, the total cost of automobile leases 
for Members of Congress surpassed $1,000,000, and 
a collective switch to alternative fuel vehicles, hybrid 
vehicles, or vehicles powered by biofuels could poten-
tially save American taxpayers thousands of dollars 
annually; and 
(3) the General Services Administration has al-
ready purchased over 68,000 alternative fueled vehi-
cles for the use of Federal customers, more than any 
other organization in the United States. 
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(b) STUDY.—Not later than 6 months after the date 
of enactment of this Act, the Comptroller General shall 
transmit to the Congress the results of a study, along with 
recommendations, as to how best to enable Members of 
Congress to procure alternative fuel vehicles for official 
use. 
(c) LEASING ADVICE.—The Chief Administrative Of-
ficer of the House of Representatives and the Secretary 
of the Senate shall advise Members of their respective bod-
ies as to the available options to lease alternative fuel vehi-
cles, including vehicles treated as alternative fuels vehicles 
by the Administrator of General Services under standards 
established by the Administrator, any other vehicles pow-
ered by alternative fuel or synthetic fuel, and any other 
vehicles powered in whole or in part by flexible-fuel oper-
ating systems, biofuel operating systems, electrical oper-
ating systems, or hybrid-electrical operating systems. 
TITLE V—TRANSIT PROMOTION 
AND RAIL INFRASTRUCTURE 
DEVELOPMENT 
Subtitle A—Transit 
SEC. 501. INCREASE AND EXPANSION OF EMPLOYER-PRO-
VIDED MASS TRANSIT FRINGE BENEFITS. 
(a) EQUALIZATION OF LIMITATION FOR EMPLOYER- 
PROVIDED MASS TRANSIT FRINGE BENEFIT WITH LIMI-
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TATION
FOR EMPLOYER-PROVIDED PARKING FRINGE 
BENEFIT.— 
(1) IN GENERAL.—Subparagraph (A) of section 
132(f)(2) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘$100’’ and inserting ‘‘$175’’. 
(2) INFLATION
ADJUSTMENT.—Subparagraph 
(A) of section 132(f)(6) of such Code is amended by 
striking the last sentence thereof. 
(b) EXTENSION OF TRANSPORTATION FRINGE BEN-
EFIT TO BICYCLE COMMUTERS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
132(f) of the Internal Revenue Code of 1986 (relat-
ing to general rule for qualified transportation 
fringe) is amended by adding at the end the fol-
lowing: 
‘‘(D) Bicycle commuting allowance.’’. 
(2) BICYCLE
COMMUTING
ALLOWANCE
DE-
FINED.—Paragraph (5) of section 132(f) of such 
Code (relating to definitions) is amended by adding 
at the end the following: 
‘‘(F) BICYCLE COMMUTING ALLOWANCE.— 
The term ‘bicycle commuting allowance’ means 
an amount provided to an employee for trans-
portation on a bicycle if such transportation is 
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in connection with travel between the employ-
ee’s residence and place of employment.’’. 
(3) LIMITATION
ON
EXCLUSION.—Subpara-
graph (A) of section 132(f)(2) of such Code is 
amended by striking ‘‘subparagraphs (A) and (B)’’ 
and inserting ‘‘subparagraphs (A), (B), and (D)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 502. GRANTS TO IMPROVE PUBLIC TRANSPORTATION 
SERVICES. 
(a) AUTHORIZATIONS OF APPROPRIATIONS.— 
(1) URBANIZED AREA FORMULA GRANTS.—In 
addition to other amounts authorized or made avail-
able, there is authorized to be appropriated 
$2,000,000,000 for fiscal year 2008 to carry out 
section 5307 of title 49, United States Code. 
(2) FORMULA GRANTS FOR OTHER THAN UR-
BANIZED AREAS.—In addition to other amounts au-
thorized or made available, there is authorized to be 
appropriated $200,000,000 for fiscal year 2008 to 
carry out section 5311 of such title. 
(b) USE OF FUNDS.— 
(1) IN GENERAL.—Funds appropriated pursu-
ant to this section shall be used for projects that will 
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expand or improve public transportation services 
provided by existing public transportation systems, 
as determined by the Secretary of Transportation. 
(2) PRIORITY.—In awarding grants using funds 
appropriated pursuant to subsection (a)(2), the Sec-
retary shall give priority to projects involving vehi-
cles that use clean fuels or are powered by biofuels. 
(c) MATCHING SHARE.— 
(1) DEFERRAL.—In awarding a grant for a 
project using funds appropriated pursuant to sub-
section (a), the Secretary may permit the recipient 
of the grant to defer payment of the non-Federal 
share of cost of the project for a period not to ex-
ceed 2 fiscal years. 
(2) LIMITATION.—The Secretary may permit 
such a deferral only if the Secretary determines that 
the deferral will not result in a decrease in the ag-
gregate amount of funds provided by the recipient in 
a fiscal year for projects under section 5307 or 5311 
of such title, as appropriate, as compared to the pre-
ceding fiscal year. 
(d) AVAILABILITY OF FUNDS.—Funds appropriated 
pursuant to this section shall remain available until ex-
pended. 
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SEC. 503. STUDY OF FUEL SAVINGS FROM INTELLIGENT 
TRANSPORTATION SYSTEMS. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary of Energy shall, in consultation 
with the Secretary of Transportation, report to Congress 
on the potential fuel savings from intelligent transpor-
tation systems that help businesses and consumers to plan 
their travel and avoid delays. These systems may include 
web-based real-time transit information systems, conges-
tion information systems, carpool information systems, 
parking information systems, freight route management, 
and traffic management systems. The report shall include 
analysis of fuel savings, analysis of system costs, assess-
ment of local, State, and regional differences in applica-
bility, and evaluation of case studies, best practices, and 
emerging technologies from both the private and public 
sector. 
Subtitle B—Secure Access for 
Commuter Rail 
SEC. 511. SHORT TITLE. 
This subtitle may be cited as the ‘‘Transit Rail Ac-
commodation Improvement and Needs Act’’. 
SEC. 512. FINDINGS. 
The Congress finds that— 
(1) modern and efficient fixed guideway trans-
portation is important to the viability and well-being 
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of metropolitan areas and to the energy conservation 
and self-sufficiency goals of the United States; 
(2) public convenience and necessity require the 
development of fixed guideway transportation sys-
tems in metropolitan areas presently without such 
service, and the expansion of existing systems in 
metropolitan areas already receiving such service; 
and 
(3) use of existing railroad trackage and rights- 
of-way in and around metropolitan areas provides a 
unique and valuable opportunity for the development 
and expansion of fixed guideway transportation fa-
cilities with a minimum of disruption to the environ-
ment and the surrounding community. 
SEC. 513. RAIL TRANSIT ACCESS. 
(a) AMENDMENT.—Part E of subtitle V of title 49, 
United States Code, is amended by adding at the end the 
following new chapter: 
‘‘CHAPTER 285—RAIL TRANSIT ACCESS 
‘‘Sec. 
‘‘28501. Definitions. 
‘‘28502. Shared use of rail carrier trackage by mass transportation authorities. 
‘‘28503. Shared use of rail rights-of-way by mass transportation authorities. 
‘‘28504. Applicability of other laws. 
‘‘28505. Standards for Board action. 
‘‘§ 28501. Definitions 
‘‘In this chapter— 
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‘‘(1) the term ‘Board’ means the Surface 
Transportation Board; 
‘‘(2) the term ‘capital work’ means mainte-
nance, restoration, reconstruction, capacity enhance-
ment, or rehabilitation work on trackage that would 
be treated, in accordance with generally accepted ac-
counting principles, as a capital item rather than an 
expense; 
‘‘(3) the term ‘fixed guideway transportation’ 
means mass transportation (as defined in section 
5302(a)(7)) provided on, by, or using a fixed guide-
way (as defined in section 5302(a)(4)); 
‘‘(4) the term ‘mass transportation authority’ 
means a local governmental authority (as defined in 
section 5302(a)(6)) established to provide, or make 
a contract providing for, fixed guideway transpor-
tation; 
‘‘(5) the term ‘rail carrier’ means a person, 
other than a governmental authority, providing com-
mon carrier railroad transportation for compensation 
subject to the jurisdiction of the Board under chap-
ter 105; 
‘‘(6) the term ‘segregated fixed guideway facil-
ity’ means a fixed guideway facility constructed 
within the railroad right-of-way of a rail carrier but 
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physically separate from trackage, including relo-
cated trackage, within the right-of-way used by a 
rail carrier for freight transportation purposes; and 
‘‘(7) the term ‘trackage’ means a railroad line 
of a rail carrier, including a spur, industrial, team, 
switching, side, yard, or station track, and a facility 
of a rail carrier. 
‘‘§ 28502. Shared use of rail carrier trackage by mass 
transportation authorities 
‘‘(a) AUTHORITY.—If, after a reasonable period of 
negotiation, a mass transportation authority cannot reach 
agreement with a rail carrier to use trackage of, and have 
related services provided by, the rail carrier for purposes 
of fixed guideway transportation, the Board shall, upon 
application of the mass transportation authority or the rail 
carrier, and if the Board finds it necessary or useful to 
carry out this chapter— 
‘‘(1) order that the trackage be made available 
and the related services be provided to the mass 
transportation authority; and 
‘‘(2) prescribe reasonable terms and compensa-
tion for use of the trackage and provision of the re-
lated services, including the performance of capital 
work if the mass transportation authority has dem-
onstrated that such capital work is required for effi-
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cient and reliable passenger operations on the track-
age to be used. 
‘‘(b) STANDARD FOR COMPENSATION; QUALITY OF 
SERVICE.—When prescribing reasonable compensation 
under subsection (a)(2), the Board shall consider alter-
native cost allocation principles, including incremental cost 
and fully allocated cost, under rules promulgated by the 
Board within 6 months after the date of the enactment 
of the Transit Rail Accommodation Improvement and 
Needs Act. The Board shall consider quality of service by 
the rail carrier as a major factor when determining com-
pensation for the use of the trackage and providing the 
related services. 
‘‘(c) TERMS OF OPERATION.—When prescribing rea-
sonable terms under subsection (a)(2), the Board may pre-
scribe the number of trains that may be operated by or 
for the mass transportation authority, the speeds at which 
such trains may be operated, and the trackage mainte-
nance levels to be provided by the rail carrier. 
‘‘(d) ADDITIONAL TRAINS.—When a rail carrier and 
a mass transportation authority cannot agree to terms for 
the operation of additional trains by or for a mass trans-
portation authority over a rail line of the carrier, the mass 
transportation authority or the rail carrier may apply to 
the Board for an order establishing such terms. If the 
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Board finds it reasonable to carry out this chapter, the 
Board shall order the rail carrier to allow operation of the 
requested additional trains on such terms as the Board 
finds reasonable under the circumstances. 
‘‘(e) TRACKAGE MAINTENANCE.—If a mass transpor-
tation authority believes that maintenance or related cap-
ital work of trackage operated by or for the mass transpor-
tation authority has fallen below a necessary level to main-
tain reliable service at speeds necessary to provide conven-
ient and efficient mass transportation service, the mass 
transportation authority may, after notice to the rail car-
rier and a sufficient period for maintenance or related cap-
ital work improvements, apply to the Board for an order 
requiring the rail carrier to provide increased or improved 
maintenance or related capital work on the trackage. If 
the Board finds it reasonable to carry out this part, the 
Board shall order the rail carrier to provide such increased 
or improved maintenance or related capital work as the 
Board finds reasonable under the circumstances. The rem-
edy available under this subsection shall be in addition to 
any contract rights that a mass transportation authority 
may possess with respect to trackage maintenance or re-
lated capital work. 
‘‘(f) ACCELERATED SPEEDS.—If a rail carrier re-
fuses to allow accelerated speeds for trains operated by 
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or for a mass transportation authority, the mass transpor-
tation authority may apply to the Board for an order re-
quiring the rail carrier to allow the accelerated speeds and 
related capital work required to permit operation at the 
accelerated speeds. The Board shall decide whether accel-
erated speeds are practicable and which capital work 
would be required to make accelerated speeds practicable. 
The Board shall establish the maximum allowable speeds 
for trains operated by or for a mass transportation author-
ity on terms the Board decides are reasonable. 
‘‘(g) PREFERENCE
OVER
FREIGHT
TRANSPOR-
TATION.—Except in an emergency, and consistent with 
subtitle E of title V of the PROGRESS Act and regula-
tions issued thereunder, fixed guideway transportation 
provided by or for a mass transportation authority pursu-
ant to an order issued under subsection (a) has preference 
over freight transportation in using a rail line, junction, 
or crossing unless the Board orders otherwise under this 
chapter. A rail carrier affected by this subsection may 
apply to the Board for relief. If the Board decides that 
preference for fixed guideway transportation materially 
will lessen the quality of freight transportation provided 
to shippers, the Board shall establish the rights of the rail 
carrier and the mass transportation authority on reason-
able terms. 
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‘‘(h) FINAL
DETERMINATION.—The Board shall 
make a determination under this section not later than 
120 days after a mass transportation authority or a rail 
carrier submits an application to the Board. 
‘‘§ 28503. Shared use of rail rights-of-way by mass 
transportation authorities 
‘‘(a) GENERAL AUTHORITY.—If, after a reasonable 
period of negotiation, a mass transportation authority can-
not reach agreement with a rail carrier to acquire an inter-
est in a railroad right-of-way for the construction and op-
eration of a segregated fixed guideway facility, the mass 
transportation authority may apply to the Board for an 
order requiring the rail carrier to convey an interest to 
the authority. The Board, not later than 120 days after 
receiving the application, shall order the interest conveyed 
if— 
‘‘(1) the mass transportation authority assumes 
a reasonable allocation of costs associated with any 
necessary relocation of a rail carrier’s trackage with-
in the right-of-way; and 
‘‘(2) the fixed guideway transportation purpose 
of the proposed segregated fixed guideway facility 
cannot be met adequately at a reasonable cost by ac-
quiring an interest in other property. 
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‘‘(b) COMPENSATION AND TERMS.—A conveyance or-
dered by the Board under this section shall be subject to 
the payment of just compensation and to such other rea-
sonable terms as the Board may prescribe. 
‘‘§ 28504. Applicability of other laws 
‘‘(a) BOARD REVIEW OR APPROVAL.—Operations or 
conveyances undertaken pursuant to an order issued 
under section 28502 or 28503 are not subject to Board 
review or approval under subtitle IV of this title unless 
the Board, on a case-by-case basis, has determined that 
the mass transportation authority has assumed rights or 
obligations under such order to provide transportation 
subject to the jurisdiction of the Board under chapter 105. 
‘‘(b) CONTRACTUAL OBLIGATIONS
FOR CLAIMS.— 
Nothing in this chapter shall be construed to limit a rail 
transportation provider’s right under section 28103(b) to 
enter into contracts that allocate financial responsibility 
for claims. 
‘‘§ 28505. Standards for Board action 
‘‘In proceedings under sections 28502 and 28503 the 
Board shall utilize, to the extent relevant and feasible, the 
principles, standards, and precedents utilized in pro-
ceedings under sections 24308 and 24311(c) involving the 
National Railroad Passenger Corporation.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) LIMITATIONS ON RAIL PASSENGER TRANS-
PORTATION
LIABILITY.—Section 28103(a) of title 
49, United States Code, is amended by inserting ‘‘or 
other fixed guideway transportation’’ after ‘‘com-
muter’’. 
(2) TABLE OF CHAPTERS.—The table of chap-
ters of subtitle V of title 49, United States Code, is 
amended by adding after the item relating to chap-
ter 283 the following new item: 
‘‘285. RAIL TRANSIT ACCESS ............................................................ 28501’’. 
SEC. 514. RAIL TRANSPORTATION POLICY. 
Section 10101 of title 49, United States Code, is 
amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(14); 
(2) by striking the period at the end of para-
graph (15) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(16) to encourage and promote the operation 
of safe, efficient, and reliable commuter rail pas-
senger service and other fixed guideway transpor-
tation systems, including operations where the serv-
ice will share lines, corridors, or other facilities with 
freight railroads or with intercity rail passenger 
service.’’. 
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Subtitle C—Intercity Passenger 
Rail and Rail Bond Program 
SEC. 521. CAPITAL ASSISTANCE FOR INTERCITY PAS-
SENGER RAIL SERVICE; STATE RAIL PLANS. 
(a) IN GENERAL.—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 ASSISTANCE 
‘‘Sec. 
‘‘24401. Definitions. 
‘‘24402. Capital investment grants to support intercity passenger rail service. 
‘‘24403. Project management oversight. 
‘‘24404. Use of capital grants to finance first-dollar liability of grant project. 
‘‘24405. Grant conditions. 
‘‘24406. Authorization of appropriations. 
‘‘§ 24401. Definitions 
‘‘In this chapter: 
‘‘(1) APPLICANT.—The term ‘applicant’ means 
a State (including the District of Columbia), a group 
of States, an Interstate Compact, or a public agency 
established by one or more States and having re-
sponsibility for providing intercity passenger rail 
service. 
‘‘(2) CAPITAL
PROJECT.—The term ‘capital 
project’ means a project or program in a State rail 
plan developed under chapter 225 of this title for— 
‘‘(A) acquiring, constructing, improving, or 
inspecting equipment or a facility for use in or 
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for the primary benefit of intercity passenger 
rail service, expenses incidental to the acquisi-
tion or construction (including designing, engi-
neering, location surveying, mapping, environ-
mental studies, and acquiring rights-of-way), 
payments for the capital portions of rail track-
age rights agreements, highway-rail grade 
crossing improvements related to intercity pas-
senger rail service, security, mitigating environ-
mental impacts, communication and signaliza-
tion improvements, relocation assistance, ac-
quiring replacement housing sites, and acquir-
ing, constructing, relocating, and rehabilitating 
replacement housing; 
‘‘(B) rehabilitating, remanufacturing or 
overhauling rail rolling stock and facilities used 
primarily in intercity passenger rail service; 
‘‘(C) costs associated with developing State 
rail plans; and 
‘‘(D) the first-dollar liability costs for in-
surance related to the provision of intercity pas-
senger rail service under section 24404. 
‘‘(3) INTERCITY PASSENGER RAIL SERVICE.— 
The term ‘intercity passenger rail service’ means 
transportation services with the primary purpose of 
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passenger transportation between towns, cities and 
metropolitan areas by rail, including high-speed rail, 
as defined in section 24102. 
‘‘§ 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 facilities and 
equipment necessary to provide or improve intercity 
passenger rail transportation. 
‘‘(2) The Secretary shall require that a grant 
under this section be subject to the terms, condi-
tions, requirements, and provisions the Secretary de-
cides are necessary or appropriate for the purposes 
of this section, including requirements for the dis-
position of net increases in value of real property re-
sulting from the project assisted under this section 
and shall prescribe procedures and schedules for the 
awarding of grants under this chapter, including ap-
plication and qualification procedures and a record 
of decision on applicant eligibility. The Secretary 
shall issue a final rule establishing such procedures 
not later than 90 days after the date of enactment 
of this chapter. 
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‘‘(b) PROJECT AS PART OF STATE RAIL PLAN.— 
‘‘(1) The Secretary may not approve a grant for 
a project under this section unless the Secretary 
finds that the project is part of a State rail plan de-
veloped under chapter 225 of this title and that the 
applicant or recipient has or will have the legal, fi-
nancial, and technical capacity to carry out the 
project, satisfactory continuing control over the use 
of the equipment or facilities, and the capability and 
willingness to maintain the equipment or facilities. 
‘‘(2) An applicant shall provide sufficient infor-
mation upon which the Secretary can make the find-
ings required by this subsection. 
‘‘(3) If an applicant has not selected the pro-
posed operator of its service competitively, the appli-
cant shall provide written justification to the Sec-
retary showing why the proposed operator is the 
best, taking into account price and other factors, 
and that use of the proposed operator will not un-
necessarily increase the cost of the project. 
‘‘(c) PROJECT
SELECTION
CRITERIA.—The Sec-
retary, in selecting the recipients of financial assistance 
to be provided under subsection (a), shall— 
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‘‘(1) require that each proposed project meet all 
safety and security requirements that are applicable 
to the project under law; 
‘‘(2) give preference to projects with high levels 
of estimated ridership, increased on-time perform-
ance, reduced trip time, additional service frequency, 
or other significant service enhancements; 
‘‘(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 also improve freight or 
commuter rail operations. 
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‘‘(C) Projects that have significant envi-
ronmental benefits. 
‘‘(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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‘‘(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) 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 speci-
fied in law that is not more than the amount stipu-
lated as the financial participation of the Secretary 
in the project. 
‘‘(2) The Secretary may make a full funding 
grant agreement with an applicant. The agreement 
shall— 
‘‘(A) establish the terms of participation by 
the United States Government in a project 
under this section; 
‘‘(B) establish the maximum amount of 
Government financial assistance for the project; 
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‘‘(C) cover the period of time for com-
pleting the project, including a period extending 
beyond the period of an authorization; and 
‘‘(D) make timely and efficient manage-
ment of the project easier according to the law 
of the United States. 
‘‘(3) The total estimated amount of future obli-
gations of the Government and contingent commit-
ments to incur obligations covered by all outstanding 
letters of intent, full funding grant agreements, and 
early systems work agreements may be not more 
than the amount authorized under section 24406, 
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 agree-
ments 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. 
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‘‘(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) 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 in fiscal years 2006 
and 2007 shall be credited towards the matching re-
quirements for grants awarded under this section. 
The Secretary may require such information as nec-
essary to verify such expenditures. 
‘‘(3) 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 
2008 for capital projects to benefit intercity pas-
senger rail service or for the operating costs of such 
service above the average of expenditures made for 
such service in fiscal years 2006 and 2007 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. 
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‘‘(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; 
‘‘(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. 
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‘‘(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 
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) PUBLIC-PRIVATE PARTNERSHIPS.— 
‘‘(1) IN
GENERAL.—A metropolitan planning 
organization, State transportation department, or 
other project sponsor may enter into an agreement 
with any public, private, or nonprofit entity to coop-
eratively implement any project funded with a grant 
under this chapter. 
‘‘(2) FORMS OF PARTICIPATION.—Participation 
by an entity under paragraph (1) may consist of— 
‘‘(A) ownership or operation of any land, 
facility, locomotive, rail car, vehicle, or other 
physical asset associated with the project; 
‘‘(B) cost-sharing of any project expense; 
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‘‘(C) carrying out administration, construc-
tion management, project management, project 
operation, or any other management or oper-
ational duty associated with the project; and 
‘‘(D) any other form of participation ap-
proved by the Secretary. 
‘‘(3) SUBALLOCATION.—A State may allocate 
funds under this section to any entity described in 
paragraph (1). 
‘‘(j) 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 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 
developed under chapter 225 of this title that provide pub-
lic benefits (as defined in chapter 225) as determined by 
the Secretary. 
‘‘§ 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. 
‘‘(b) SECRETARIAL OVERSIGHT.— 
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‘‘(1) The Secretary may use no more than 0.5 
percent of amounts made available in a fiscal year 
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 (b) 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-
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ability insurance coverage for rail passenger service associ-
ated with the capital assistance grant, but the coverage 
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 chapter, the grant recipient shall 
purchase 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-
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cides that, for particular articles, material, or sup-
plies— 
‘‘(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 chapter— 
‘‘(1) shall be considered an employer for pur-
poses of the Railroad Retirement Act of 1974 (45 
U.S.C. 231 et seq.); and 
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‘‘(2) shall be considered a carrier for purposes 
of the Railway Labor Act (43 U.S.C. 151 et seq.). 
‘‘(c) GRANT CONDITIONS.—The Secretary shall re-
quire as a condition of making any grant under this chap-
ter that includes the improvement or use of 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; and 
‘‘(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 
‘‘(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 
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