ments of this subsection if as of the date of 
issuance, the issuer reasonably expects—
‘‘(A) to spend at least 95 percent of the 
proceeds from the sale of the issue for 1 or 
more qualified projects within the 3-year period 
beginning on such date, 
‘‘(B) to incur a binding commitment with 
a third party to spend at least 10 percent of the 
proceeds from the sale of the issue, or to com-
mence construction, with respect to such 
projects within the 6-month period beginning on 
such date, and 
‘‘(C) to proceed with due diligence to com-
plete such projects and to spend the proceeds 
from the sale of the issue. 
‘‘(2) RULES REGARDING CONTINUING COMPLI-
ANCE AFTER 3-YEAR DETERMINATION.—If at least 
95 percent of the proceeds from the sale of the issue 
is not expended for 1 or more qualified projects 
within the 3-year period beginning on the date of 
issuance, but the requirements of paragraph (1) are 
otherwise met, an issue shall be treated as con-
tinuing to meet the requirements of this subsection 
if either—
‘‘(A) the issuer uses all unspent proceeds 
from the sale of the issue to redeem bonds of 
the issue within 90 days after the end of such 
3-year period, or 
‘‘(B) the following requirements are met: 
‘‘(i) The issuer spends at least 75 per-
cent of the proceeds from the sale of the 
issue for 1 or more qualified projects with-
in the 3-year period beginning on the date 
of issuance. 
‘‘(ii) Either—
‘‘(I) the issuer spends at least 95 
percent of the proceeds from the sale 
of the issue for 1 or more qualified 
projects within the 4-year period be-
ginning on the date of issuance, or 
‘‘(II) the issuer pays to the Fed-
eral Government any earnings on the 
proceeds from the sale of the issue 
that accrue after the end of the 3-year 
period beginning on the date of 
issuance and uses all unspent pro-
ceeds from the sale of the issue to re-
deem bonds of the issue within 90 
days after the end of the 4-year pe-
riod 
beginning 
on 
the 
date 
of 
issuance. 
‘‘(g) RECAPTURE OF PORTION OF CREDIT WHERE 
CESSATION OF COMPLIANCE.—
‘‘(1) IN GENERAL.—If any bond which when 
issued purported to be a qualified high-speed rail in-
frastructure bond ceases to be such a qualified bond, 
the issuer shall pay to the United States (at the 
time required by the Secretary) an amount equal to 
the sum of—
‘‘(A) the aggregate of the credits allowable 
under this section with respect to such bond 
(determined without regard to subsection (c)) 
for taxable years ending during the calendar 
year in which such cessation occurs and the 2 
preceding calendar years, and 
‘‘(B) interest at the underpayment rate 
under section 6621 on the amount determined 
under subparagraph (A) for each calendar year 
for the period beginning on the first day of 
such calendar year. 
‘‘(2) FAILURE TO PAY.—If the issuer fails to 
timely pay the amount required by paragraph (1) 
with respect to such bond, the tax imposed by this 
chapter on each holder of any such bond which is
part of such issue shall be increased (for the taxable 
year of the holder in which such cessation occurs) by 
the aggregate decrease in the credits allowed under 
this section to such holder for taxable years begin-
ning in such 3 calendar years which would have re-
sulted solely from denying any credit under this sec-
tion with respect to such issue for such taxable 
years. 
‘‘(3) SPECIAL RULES.—
‘‘(A) TAX
BENEFIT
RULE.—The tax for 
the taxable year shall be increased under para-
graph (2) only with respect to credits allowed 
by reason of this section which were used to re-
duce tax liability. In the case of credits not so 
used to reduce tax liability, the carryforwards 
under subsection (c) shall be appropriately ad-
justed. 
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under paragraph (2) shall not be 
treated as a tax imposed by this chapter for 
purposes of determining—
‘‘(i) the amount of any credit allow-
able under this part, or 
‘‘(ii) the amount of the tax imposed 
by section 55.
‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.—
For purposes of this section—
‘‘(1) BOND.—The term ‘bond’ includes any ob-
ligation. 
‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 
project’ means any project described in section 
26106(a)(2) of title 49, United States Code. 
‘‘(3) TREATMENT OF CHANGES IN USE.—For 
purposes of subsection (e)(2), the proceeds from the 
sale of an issue shall not be treated as used for a 
qualified project to the extent that the issuer takes 
any action within its control which causes such pro-
ceeds not to be used for a qualified project. The Sec-
retary shall prescribe regulations specifying remedial 
actions that may be taken (including conditions to 
taking such remedial actions) to prevent an action 
described in the preceding sentence from causing a 
bond to fail to be a qualified high-speed rail infra-
structure bond. 
‘‘(4) PARTNERSHIP; 
S
CORPORATION; 
AND 
OTHER
PASS-THRU
ENTITIES.—Under regulations 
prescribed by the Secretary, in the case of a partner-
ship, trust, S corporation, or other pass-thru entity, 
rules similar to the rules of section 41(g) shall apply
with respect to the credit allowable under subsection 
(a). 
‘‘(5) BONDS
HELD
BY
REGULATED
INVEST-
MENT COMPANIES.—If any qualified high-speed rail 
infrastructure bond is held by a regulated invest-
ment company, the credit determined under sub-
section (a) shall be allowed to shareholders of such 
company under procedures prescribed by the Sec-
retary. 
‘‘(6) REPORTING.—Issuers of qualified high-
speed rail infrastructure bonds shall submit reports 
similar to the reports required under section 
149(e).’’. 
(b) AMENDMENTS TO OTHER CODE SECTIONS.—
(1) REPORTING.—Subsection (d) of section 
6049 of the Internal Revenue Code of 1986 (relating 
to returns regarding payments of interest) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(8) REPORTING
OF
CREDIT
ON
QUALIFIED 
HIGH-SPEED RAIL INFRASTRUCTURE BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 54(d) 
and such amounts shall be treated as paid on
the credit allowance date (as defined in section 
54(b)(4)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in 
subparagraph (A), subsection (b)(4) shall be 
applied without regard to subparagraphs (A), 
(H), (I), (J), (K), and (L)(i) of such subsection. 
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’. 
(2) TREATMENT
FOR
ESTIMATED
TAX
PUR-
POSES.—
(A) INDIVIDUAL.—Section 6654 of such 
Code (relating to failure by individual to pay es-
timated income tax) is amended by redesig-
nating subsection (m) as subsection (n) and by 
inserting after subsection (l) the following new 
subsection: 
‘‘(m) SPECIAL RULE FOR HOLDERS OF QUALIFIED 
HIGH-SPEED RAIL INFRASTRUCTURE BONDS.—For pur-
poses of this section, the credit allowed by section 54 to
a taxpayer by reason of holding a qualified high-speed rail 
infrastructure bond on a credit allowance date shall be 
treated as if it were a payment of estimated tax made by 
the taxpayer on such date.’’. 
(B) CORPORATE.—Section 6655 of such 
Code (relating to failure by corporation to pay 
estimated income tax) is amended by adding at 
the end of subsection (g) the following new 
paragraph: 
‘‘(5) SPECIAL RULE FOR HOLDERS OF QUALI-
FIED HIGH-SPEED RAIL INFRASTRUCTURE BONDS.—
For purposes of this section, the credit allowed by 
section 54 to a taxpayer by reason of holding a 
qualified high-speed rail infrastructure bond on a 
credit allowance date shall be treated as if it were 
a payment of estimated tax made by the taxpayer on 
such date.’’. 
(c) CLERICAL AMENDMENTS.—
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by adding at the 
end the following new item:
‘‘SUBPART H. NONREFUNDABLE CREDIT FOR HOLDERS OF QUALIFIED HIGH-
SPEED RAIL INFRASTRUCTURE BONDS’’.
(2) Section 6401(b)(1) is amended by striking 
‘‘and G’’ and inserting ‘‘G, and H’’.
(d) ISSUANCE OF REGULATIONS.—Not later than 6 
months after the date of the enactment of this section, 
the Secretary of the Treasury shall issue regulations for 
carrying out this section and the amendments made by 
this section. 
(e) HIGH-SPEED INTERCITY RAIL FACILITIES.—
(1) REQUIREMENT
TO
MEET
TITLE
RE-
QUIREMENTS.—Section 142(i) of the Internal Rev-
enue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(4) ADDITIONAL
REQUIREMENTS.—A bond 
issued as part of an issue described in subsection 
(a)(11) shall not be considered an exempt facility 
bond unless the requirements of paragraphs (1) 
through (6) of section 26106(a) of title 49, United 
States Code, are met.’’. 
(2) REVISION OF SPEED REQUIREMENT.—Sec-
tion 142(i)(1) of such Code is amended by striking 
‘‘150 miles per hour’’ and inserting ‘‘110 miles per 
hour’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 4. HIGH-SPEED RAIL CORRIDOR DEVELOPMENT. 
(a) CORRIDOR DEVELOPMENT.—
(1) AMENDMENTS.—Section 26101 of title 49, 
United States Code, is amended—
(A) in the section heading, by striking 
‘‘planning’’ and inserting ‘‘development’’; 
(B) in the heading of subsection (a), by 
striking ‘‘PLANNING’’ and inserting ‘‘DEVELOP-
MENT’’; 
(C) by striking ‘‘corridor planning’’ each 
place it appears and inserting ‘‘corridor devel-
opment’’; 
(D) in subsection (b)(1)—
(i) by inserting ‘‘, or if it is an activity 
described in subparagraph (M)’’ after 
‘‘high-speed rail improvements’’; 
(ii) by striking ‘‘and’’ at the end of 
subparagraph (K); 
(iii) by striking the period at the end 
of subparagraph (L) and inserting ‘‘; and’’; 
and 
(iv) by adding at the end the following 
new subparagraph: 
‘‘(M) the acquisition of locomotives, rolling 
stock, track, and signal equipment.’’; and 
(E) in subsection (c)(2), by striking ‘‘plan-
ning’’ and inserting ‘‘development’’.
(2) CONFORMING AMENDMENT.—The item re-
lating to section 26101 in the table of sections of 
chapter 261 of title 49, United States Code, is 
amended by striking ‘‘planning’’ and inserting ‘‘de-
velopment’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
26104 of title 49, United States Code, is amended to read 
as follows: 
‘‘§ 26104. Authorization of appropriations 
‘‘(a) FISCAL YEARS 2006 THROUGH 2013.—There 
are authorized to be appropriated to the Secretary—
‘‘(1) $70,000,000 for carrying out section 
26101; and 
‘‘(2) $30,000,000 for carrying out section 
26102, 
for each of the fiscal years 2006 through 2013. 
‘‘(b) FUNDS TO REMAIN AVAILABLE.—Funds made 
available under this section shall remain available until ex-
pended.’’. 
SEC. 5. REHABILITATION AND IMPROVEMENT FINANCING. 
(a) DEFINITIONS.—Section 102(7) of the Railroad 
Revitalization and Regulatory Reform Act of 1976 (45 
U.S.C. 802(7)) is amended to read as follows:
‘‘(7) ‘railroad’ has the meaning given that term 
in section 20102 of title 49, United States Code; 
and’’. 
(b) GENERAL AUTHORITY.—Section 502(a) of the 
Railroad Revitalization and Regulatory Reform Act of 
1976 (45 U.S.C. 822(a)) is amended by striking ‘‘Sec-
retary may provide direct loans and loan guarantees to 
State and local governments,’’ and inserting ‘‘Secretary 
shall provide direct loans and loan guarantees to State and 
local governments, agreements or interstate compacts con-
sented to by Congress under section 410(a) of Public Law 
105–134 (49 U.S.C 24101 nt),’’. 
(c) EXTENT OF AUTHORITY.—Section 502(d) of the 
Railroad Revitalization and Regulatory Reform Act of 
1976 (45 U.S.C. 822(d)) is amended—
(1) by striking ‘‘$3,500,000,000’’ and inserting 
‘‘$35,000,000,000’’; 
(2) by striking ‘‘$1,000,000,000’’ and inserting 
‘‘$7,000,000,000’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘The Secretary shall not establish any limit 
on the proportion of the unused amount authorized 
under this subsection that may be used for 1 loan 
or loan guarantee.’’.
(d) COHORTS OF LOANS.—Section 502(f) of the Rail-
road Revitalization and Regulatory Reform Act of 1976 
(45 U.S.C. 822(f)) is amended—
(1) in paragraph (2)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D); 
(B) by redesignating subparagraph (E) as 
subparagraph (F); and 
(C) by adding after subparagraph (D) the 
following new subparagraph: 
‘‘(E) the size and characteristics of the co-
hort of which the loan or loan guarantee is a 
member; and’’; and 
(2) by adding at the end of paragraph (4) the 
following: ‘‘A cohort may include loans and loan 
guarantees. The Secretary shall not establish any 
limit on the proportion of a cohort that may be used 
for 1 loan or loan guarantee.’’. 
(e) CONDITIONS OF ASSISTANCE.—Section 502 of the 
Railroad Revitalization and Regulatory Reform Act of 
1976 (45 U.S.C. 822) is amended—
(1) in subsection (f)(2)(A), by inserting ‘‘, if 
any’’ after ‘‘collateral offered’’; and 
(2) by adding at the end of subsection (h) the 
following:
‘‘The Secretary shall not require an applicant for a direct 
loan or loan guarantee under this section to provide collat-
eral. The Secretary shall not require that an applicant for 
a direct loan or loan guarantee under this section have 
previously sought the financial assistance requested from 
another source. The Secretary shall require recipients of 
direct loans or loan guarantees under this section to apply 
the standards of section 26106(a)(5) of title 49, United 
States Code, to their projects.’’. 
(f) TIME LIMIT FOR APPROVAL OR DISAPPROVAL.—
Section 502 of the Railroad Revitalization and Regulatory 
Reform Act of 1976 (45 U.S.C. 822) is amended by add-
ing at the end the following new subsection: 
‘‘(i) TIME LIMIT FOR APPROVAL OR DISAPPROVAL.—
Not later than 90 days after receiving a complete applica-
tion for a direct loan or loan guarantee under this section, 
the Secretary shall approve or disapprove the applica-
tion.’’. 
(g) FEES AND CHARGES.—Section 503 of the Rail-
road Revitalization and Regulatory Reform Act of 1976 
(45 U.S.C. 823) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(l) FEES AND CHARGES.—Except as provided in 
this title, the Secretary may not assess any fees, including
user fees, or charges in connection with a direct loan or 
loan guarantee provided under section 502.’’. 
(h) SUBSTANTIVE CRITERIA AND STANDARDS.—Not 
later than 30 days after the date of the enactment of this 
Act, the Secretary of Transportation shall publish in the 
Federal Register and post on the Department of Trans-
portation web site the substantive criteria and standards 
used by the Secretary to determine whether to approve 
or disapprove applications submitted under section 502 of 
the Railroad Revitalization and Regulatory Reform Act of 
1976 (45 U.S.C. 822).
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