I 
108TH CONGRESS 
1ST SESSION H. R. 3578
To amend title 49, United States Code, to ensure the continuation of fixed 
guideway system projects, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 21, 2003
Mr. HONDA (for himself, Mrs. TAUSCHER, Mr. CASE, Mr. ACEVEDO-VILA´, Ms. 
LOFGREN, Mrs. JONES of Ohio, Mr. GEORGE MILLER of California, Mr. 
MEEKS of New York, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. 
LEWIS of Georgia, Mr. BLUMENAUER, and Mr. ABERCROMBIE) intro-
duced the following bill; which was referred to the Committee on Trans-
portation and Infrastructure 
A BILL 
To amend title 49, United States Code, to ensure the con-
tinuation of fixed guideway system projects, and for 
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘New Starts Enhance-
ment and Local Investment Promotion Act of 2003’’.
SEC. 2. DETERMINATION OF PROJECT JUSTIFICATION CRI-
TERIA FOR FIXED GUIDEWAY PROJECTS. 
Section 5309(e)(6) of title 49, United States Code, 
is amended—
(1) by striking ‘‘A proposed project’’ and insert-
ing the following: 
‘‘(A) IN GENERAL.—A proposed project’’; 
and 
(2) by adding at the end the following: 
‘‘(B) DETERMINATION
OF
COST
EFFEC-
TIVENESS.—
‘‘(i) IN
GENERAL.—For purposes of 
paragraph (1)(B), the Secretary shall use 
the new starts cost to determine the cost 
effectiveness of a project. 
‘‘(ii) NEW STARTS COST DEFINED.—
In this subparagraph, the term ‘new starts 
cost’ means the amounts allocated for the 
project from amounts made available to 
carry out this section.’’. 
SEC. 3. UNDERTAKING PROJECTS IN ADVANCE. 
Section 5309(n) is amended by adding at the end the 
following: 
‘‘(4) If a State or local governmental authority agrees 
to provide 60 percent or more of the net cost of a project 
from non-Federal funds, the Secretary, at the request of
‘‘(C) NEW STARTS PROJECTS.—In the case 
of a new starts project approved for a full fund-
ing grant agreement described in section 5309 
of title 49, eligible project costs shall be deter-
mined in accordance with the allowable cost 
thresholds in such section.’’; and 
(2) in subsection (b)(2)—
(A) subparagraph (A) by striking ‘‘The se-
lection criteria’’ and inserting the following: 
‘‘Except as provided in subparagraph (B), the 
selection criteria’’; 
(B) by redesignating subparagraph (B) as 
subparagraph (C); and 
(C) by inserting after subparagraph (A) 
the following: 
‘‘(B) NEW
STARTS
PROJECTS.—Approval 
of a full funding grant agreement for the new 
starts program under section 5309 of title 49 
shall constitute eligibility for selection in this 
subsection subject to confirmation of a prelimi-
nary rating opinion letter in subparagraph 
(C).’’
SEC. 5. LINES OF CREDIT. 
Section 184 of title 23, United States Code, is 
amended—
(1) in subsection (a) by striking paragraph (2) 
and inserting the following: 
‘‘(2) USE OF PROCEEDS.—
‘‘(A) The proceeds of a line of credit made 
available under this section shall be available to 
pay eligible project costs, including debt service 
on project obligations issued to finance eligible 
project costs, extraordinary repair and replace-
ment costs, operation and maintenance ex-
penses, and costs associated with unexpected 
Federal or State environmental restrictions. 
‘‘(B) For projects with an approved full 
funding grant agreement under section 5309 of 
title 49 and a non-Federal revenue share of at 
least 60 percent of the project cost, the pro-
ceeds of a line of credit made available under 
this section shall be available to pay eligible 
project costs as defined in subparagraph (A) 
and to provide liquidity for a variable rate re-
marketing program.’’; and 
(2) in subsection (b)—
(A) by striking paragraphs (3) and (4) and 
inserting the following: 
‘‘(3) DRAWS.—Any draw on the line of credit 
shall not represent a guarantee of debt payment, but
shall represent a direct loan and shall be made and 
repaid only under the terms, rate, and conditions as 
agreed to by the project sponsor and Secretary. 
‘‘(4) INTEREST RATE.—The interest rate on a 
direct loan resulting from a draw on the line of cred-
it shall be not less than one of the following rates 
as selected by the obligor: 
‘‘(A) FIXED RATE.—The fixed rate shall 
be the yield on 30-year marketable United 
States Treasury securities as of the date on 
which the line of credit is obligated. 
‘‘(B) VARIABLE RATE.—The variable rate 
shall be the yield on a 30-day Treasury bill auc-
tioned for the preceding 3-month period to be 
reset monthly on the first business day of each 
month.’’; 
(B) by striking paragraph (6) and insert-
ing the following: 
‘‘(6) PERIOD OF AVAILABILITY.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph B, the line of credit shall be 
available during the period beginning on the 
date of substantial completion of the project, as 
determined by the project sponsor, and ending 
not later than 10 years after that date.
‘‘(B) AVAILABILITY.—For projects with an 
approved full funding grant agreement under 
section 5309 of title 49, the line of credit shall 
be available during the period beginning on the 
date of approval of the full funding grant agree-
ment and ending not later than 10 years after 
the date of substantial completion of the 
project.’’; and 
(C) by striking paragraph (9) and insert-
ing the following: 
‘‘(9) FEES.—The Secretary may establish fees 
at a level sufficient to cover all or a portion of the 
costs to the Government in providing a line of credit 
under this section. Fees shall be waived for projects 
with an approved full funding grant agreement 
under section 5309 of title 49.’’. 
SEC. 6. FUNDING. 
Section 188(a) of title 23 is amended by inserting 
‘‘and section 5340 of title 49’’ after ‘‘this subchapter’’. 
SEC. 7. ASSURANCE OF EXISTING FULL FUNDING GRANT 
AGREEMENT. 
Chapter 53 of title 49, United States Code, is amend-
ed—
(1) by redesignating section 5339 as section 
5341; and
(2) by inserting after section 5338 the fol-
lowing: 
‘‘§ 5339. New starts full funding grant agreement au-
thorizations 
‘‘(a) PURPOSE.—The purpose of this section is to en-
sure that agreements made pursuant to section 5309(g) 
are honored in the annual appropriations process. 
‘‘(b) GENERAL AUTHORITY.—In conjunction with the 
report required each February under section 5309(o), the 
Secretary shall provide information in such report regard-
ing the project readiness and the difference between the 
full funding grant agreement amount for a fiscal year and 
the amount appropriated in the same year for such 
project. 
‘‘(c) APPORTIONMENTS.—
‘‘(1) IN
GENERAL.—Subject to section 5309, 
each new starts project with a full funding grant 
agreement shall be funded from amounts made 
available from the capital program grants and loans 
under section 5338(b) for each of fiscal years 2004 
through 2009 to carry out such project in accord-
ance with the annual schedule contained in each 
agreement. 
‘‘(2) FULL FUNDING GRANT AGREEMENTS.—
‘‘(A) EXISTING
FULL
FUNDING
GRANT 
AGREEMENT PROJECTS.—The following is a list 
of existing projects with full funding grant 
agreements: 
‘‘(i) Atlanta-North Springs Extension. 
‘‘(ii) Baltimore-Central LRT Double 
Tracking. 
‘‘(iii) Boston-Piers-MOS-2 (So. Sta. 
to Wo. Tr.). 
‘‘(iv) Chicago-Douglas Branch Recon-
struction. 
‘‘(v) Chicago-North Central Corridor 
Commuter Rail. 
‘‘(vi) Chicago-Metra Southwest Cor-
ridor Commuter Rail. 
‘‘(vii) 
Chicago-Union-Pacific 
West 
Line Extension. 
‘‘(viii) Dallas-North Central LRT Ex-
tension. 
‘‘(ix) 
Denver 
Southeast 
Corridor 
LRT. 
‘‘(x) Fort Lauderdale-Tri-Rail Com-
muter Rail Upgrade. 
‘‘(xi) Los Angeles-North Hollywood.
‘‘(xii) Memphis-Medical Center Exten-
sion. 
‘‘(xiii) Minneapolis-Hiawatha Corridor 
LRT. 
‘‘(xiv) New Jersey Urban Core-Hud-
son-Bergen LRT. 
‘‘(xv) Newark Rail Link (MOS–1). 
‘‘(xvi) New Orleans-Canal Street 
‘‘(xvii) Northern New Jersey-Hudson-
Berger LRT MOS–2. 
‘‘(xviii) Pittsburgh-Stage II LRT Re-
construction. 
‘‘(xix) Portland-Interstate MAX LRT 
Extension. 
‘‘(xx) Salt Lake City-CBD to Univer-
sity LRT. 
‘‘(xxi) Salt Lake City-Medical Center. 
‘‘(xxii) San Diego-Mission Valley East 
LRT Extension. 
‘‘(xxiii) San Diego-Oceanside Escon-
dido. 
‘‘(xxiv) San Francisco-BART Exten-
sion to San Francisco Airport. 
‘‘(xxv) San Juan-Tren Urbano.
‘‘(xxvi) St. Louis St. Clair MetroLink 
Extension [Phase IIa]. 
‘‘(xxvii) Washington DC/MD-Largo 
Metrorail Extension. 
‘‘(B) FUTURE
FULL
FUNDING
GRANT 
AGREEMENTS.—The provisions of paragraph 
(1) shall apply to all future full funding grant 
agreements approved by the Secretary of 
Transportation. 
‘‘(d) FAILURE TO COMPLY.—If the Secretary deter-
mines that a project delay is the result of a cause other 
than a delay in receipt of funding per the full funding 
grant agreement payment schedule, this section shall not 
apply.’’. 
‘‘SEC. 5340. NEW STARTS PROJECT STABILITY LOAN PRO-
GRAM. 
‘‘(a) PURPOSE.—The purpose of this section is to en-
sure that new starts projects with an approved full fund-
ing grant agreement are held financially harmless in the 
event that the annual Federal appropriation falls short of 
the annual amounts identified in the full funding grant 
agreement payment schedule. 
‘‘(b) GENERAL AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary of Transpor-
tation shall make loans available to a new starts
project sponsor in an amount equal to the difference 
between the full funding grant agreement amount 
for a fiscal year, and the amount appropriated in the 
same year for such project if the amount appro-
priated is lower than the full funding agreement 
amount for such year. 
‘‘(2) Except as provided in this paragraph, the 
secured loan shall be made in accordance with sec-
tion 183 of title 23. 
‘‘(A) MAXIMUM AMOUNT.—The maximum 
amount of the secured loan available to a new 
starts project sponsor shall equal the amount of 
the difference between the full funding grant 
agreement amount for a fiscal year and the 
amount appropriated for a project in the same 
year if the amount appropriated is lower than 
the full funding agreement amount for such 
year. 
‘‘(B) PAYMENT.—The secured loan shall 
be repaid by the Federal Government through 
a subsequent appropriation from the new starts 
program as authorized in section 5338(b). Any 
interest expense paid shall not be assigned to a 
specific new starts project, and therefore, shall 
not result in any change to the full funding
grant agreement, schedule, or commitment 
under section 5309. 
‘‘(C) FEES.—No fees shall be established 
or charged for secured loans made subject to 
this section. 
‘‘(D) REPAYMENT.—
‘‘(i) 
COMMENCEMENT.—Scheduled 
loan repayments of principal or interest on 
a secured loan under this section shall 
commence with the next available appro-
priations of new starts funding for the 
project. 
‘‘(ii) SOURCES
OF
REPAYMENT
OF 
FUNDS.—The source of funds for sched-
uled loan repayments under this section 
shall be new starts funding as authorized 
under section 5338(b) of title 49 or other 
Federal funds as determined by the Sec-
retary. 
‘‘(3) For purposes of calculating the threshold 
of 33 percent of the eligible project cost under sec-
tion 184(b)(10) of title 23, any secured loans made 
pursuant to this section shall be excluded.’’.
SEC. 8. NEW STARTS AMENDMENTS. 
(a) GRANTS AS CONTRACTUAL OBLIGATIONS.—Sec-
tion 5309 of title 49 is amended—
(1) in subsection (g)(1)(D) by inserting before 
the period the following: ‘‘or as made available for 
grant agreements under section 5339 and loans 
under section 5340’’; 
(2) in subsection (g)(2)(A)—
(A) in clause (iii) by striking ‘‘and’’ after 
the semicolon; 
(B) in clause (iv) by striking the period 
and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(v) authorize a project sponsor as el-
igible for a line of credit under subchapter 
II of chapter 1 of title 23; and 
‘‘(vi) provide the maximum amount of 
Government financial assistance for inter-
est expenses incurred through a new starts 
project financial stability loan authorized 
under section 5340.’’; 
(3) by striking subsection (g)(2)(B) and insert-
ing the following: 
‘‘(B)(i) An agreement under this para-
graph obligates an amount of available budget 
authority specified in law and may include a
commitment, contingent on amounts to be spec-
ified 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. Interest and other financing 
costs of efficiently carrying out a part of the 
project within a reasonable time are a cost of 
carrying out the project under a full funding 
grant agreement, except that eligible costs may 
not be more than the cost of the most favorable 
financing terms reasonably available for the 
project at the time of borrowing. The applicant 
shall certify, in a manner satisfactory to the 
Secretary of Transportation, that the applicant 
has shown reasonable diligence in seeking the 
most favorable financing terms. The amount 
stipulated in an agreement under this para-
graph for a fixed guideway project shall be suf-
ficient to complete at least an operable seg-
ment. 
‘‘(ii) An amount equal to the difference be-
tween the full funding grant agreement amount 
for a fiscal year, and the amount appropriated
in the same year if the amount appropriated is 
lower than the full funding agreement amount 
for such year, may be loaned to the project 
sponsor through a new starts financial stability 
loan authorized under section 5340. Interest ex-
penses associated with a new starts financial 
stability loan shall—
‘‘(I) shall be funded from amounts 
made available under section 5338(b); and 
‘‘(II) not be assigned to a specific new 
starts project for purposes of full funding 
grant agreement calculations.’’; and 
(4) by striking subsection (k) and inserting the 
following: 
‘‘(k) LIMITATION ON MAKING LOANS AND GRANTS 
FOR PROJECTS.—Except as provided under subchapter II 
of chapter 1 of title 23, the Secretary of Transportation 
may not make a loan under this section for a project for 
which a grant (except a relocation payment grant) is made 
under this section. Notwithstanding the preceding sen-
tence and subchapter II of chapter 1 of title 23, the Sec-
retary may make a project grant under this section in a 
case in which real property for the project has been or 
shall be acquired through a loan under subsection (b) of 
this section.’’.
SEC. 9. FIXED GUIDEWAY PROJECTS. 
Section 5309(e) of title 49, United States Code, is 
amended by adding at the end the following: 
‘‘(9) PROHIBITION ON IMPOSITION OF OVERALL 
FUNDING LIMITS.—The Secretary may not impose 
an overall limitation on the amount of Government 
financial assistance that may be expended for—
‘‘(A) alternatives analysis and preliminary 
engineering for a project under this subsection; 
or 
‘‘(B) a full funding grant agreement for a 
project entered into under paragraph (7).’’. 
SEC. 10. DEFINITIONS. 
Section 181 of title 23, United States Code, is 
amended—
(1) by redesignating paragraph (6) as para-
graph (8); 
(2) by redesignating paragraphs (3) through 
(5) as paragraphs (4) through (6), respectively; 
(3) by inserting after paragraph (6), as redesig-
nated, the following: 
‘‘(7) LIQUIDITY.—The term ‘liquidity’ means 
an agreement by the Federal Government to provide 
a credit support instrument that will provide for the 
potential purchase of any variable or other short-
term security issued in conjunction with the financ-
ing plan that cannot be remarketed or resold under 
the marketing or remarketing agreement signed by 
the project sponsor. Any such draw or use of the li-
quidity shall then constitute a secured loan to be re-
paid under terms consistent with this section and 
approved by the Secretary.’’.
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