539
of all areas served by such recipients;
and
‘‘(B) one-third shall be apportioned to re-
cipients serving urbanized areas with a popu-
lation of less than 1,000,000, of which—
‘‘(i) 50 percent shall be apportioned
so that each such recipient receives a grant
under this section in an amount equal to
the ratio that—
‘‘(I) the number of vehicles in the
bus fleet of the recipient, weighted by
severity of nonattainment for the area
served by the recipient; bears to
‘‘(II) the total number of vehicles
in the bus fleets of all such recipients,
weighted by severity of nonattainment
for all areas served by such recipients;
and
‘‘(ii) 50 percent shall be apportioned
so that each such recipient receives a grant
under this section in an amount equal to
the ratio that—
‘‘(I) the number of bus passenger
miles (as defined in section 5336(c))
of the recipient, weighted by severity
540
of nonattainment of the area served
by the recipient; bears to
‘‘(II) the total number of bus
passenger miles (as defined in section
5336(c)) 
of 
all 
such 
recipients,
weighted by severity of nonattainment
of all areas served by such recipients.
‘‘(2) WEIGHTING OF SEVERITY OF NONATTAIN-
MENT.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), subject to subparagraph (B), the
number of buses in the bus fleet, or the number
of passenger miles, shall be multiplied by a fac-
tor of—
‘‘(i) 1.0 if, at the time of the appor-
tionment, the area is a maintenance area
for ozone or carbon monoxide;
‘‘(ii) 1.1 if, at the time of the appor-
tionment, the area is classified as a mar-
ginal ozone nonattainment area under sub-
part 2 of part D of title I of the Clean Air
Act (42 U.S.C. 7511 et seq.);
‘‘(iii) 1.2 if, at the time of the appor-
tionment, the area is classified as a mod-
541
erate ozone nonattainment area under sub-
part 2 of such part;
‘‘(iv) 1.3 if, at the time of the appor-
tionment, the area is classified as a serious
ozone nonattainment area under subpart 2
of such part;
‘‘(v) 1.4 if, at the time of the appor-
tionment, the area is classified as a severe
ozone nonattainment area under subpart 2
of such part; or
‘‘(vi) 1.5 if, at the time of the appor-
tionment, the area is classified as an ex-
treme ozone nonattainment area under
subpart 2 of such part.
‘‘(B) ADDITIONAL ADJUSTMENT FOR CAR-
BON
MONOXIDE
AREAS.—If, in addition to
being classified as a nonattainment or mainte-
nance area for ozone under subpart 2 of such
part, the area was also classified under subpart
3 of such part as a nonattainment area for car-
bon monoxide, the weighted nonattainment or
maintenance area fleet and passenger miles for
the recipient, as calculated under subparagraph
(A), shall be further multiplied by a factor of
1.2.
542
‘‘(d) CLEAN DIESEL BUSES.—Not more than 25 per-
cent of the amount made available by or appropriated
under section 5338 in each fiscal year to carry out this
section may be made available to fund clean diesel buses.
‘‘(e) GRANT REQUIREMENTS.—
‘‘(1) IN GENERAL.—A grant under this section
shall be subject to the requirements of section 5307.
‘‘(2) GOVERNMENT’S
SHARE
OF
COSTS
FOR
CERTAIN
PROJECTS.—Section 5323(i) applies to
projects carried out under this section.
‘‘(f) AVAILABILITY OF FUNDS.—Any amount made
available or appropriated under this section—
‘‘(1) shall remain available to a project for 1
year after the fiscal year for which the amount is
made available or appropriated; and
‘‘(2) that remains unobligated at the end of the
period described in paragraph (1) shall be added to
the amount made available in the following fiscal
year.’’.
SEC. 3010. CAPITAL INVESTMENT GRANTS.
(a) SECTION HEADING.—Section 5309 is amended by
striking the section heading and inserting the following:
‘‘§ 5309. Capital investment grants’’.
(b) LOANS FOR REAL PROPERTY INTERESTS.—Sec-
tion 5309 is amended—
543
(1) in subsections (a)(1) and (a)(2) by striking
‘‘and loans’’;
(2) by striking subsections (b) and (c); and
(3) by redesignating subsection (d) as sub-
section (b).
(c) PROJECT AS PART OF APPROVED PROGRAM OF
PROJECTS.—Section 5309(b) (as redesignated by sub-
section (b) of this section) is amended—
(1) by striking ‘‘Except as provided in sub-
sections (b)(2) and (e) of the section, the’’ and in-
serting ‘‘The’’; and
(2) by striking ‘‘or loan’’.
(d) CRITERIA
AND
FUNDING.—Section 5309 is
amended by striking subsections (e) through (p) and in-
serting the following:
‘‘(c) MAJOR
CAPITAL
INVESTMENT
GRANTS
OF
$75,000,000 OR MORE.—
‘‘(1) FULL FUNDING GRANT AGREEMENT.—A
major new fixed guideway capital project financed
under this subsection shall be carried out through a
full funding grant agreement. The Secretary shall
enter into a full funding grant agreement based on
the evaluations and ratings required under this sub-
section. The Secretary shall not enter into a full
funding grant agreement for a project unless that
544
project is authorized for final design and construc-
tion.
‘‘(2) APPROVAL
OF
GRANTS.—The Secretary
may approve a grant under this section for a major
new fixed guideway capital project only if the Sec-
retary, based upon evaluations and considerations
set forth in paragraph (3), determines that the pro-
posal is—
‘‘(A) based on the results of an alter-
natives analysis and preliminary engineering;
‘‘(B) justified based on a comprehensive
review of its mobility improvements, environ-
mental benefits, cost effectiveness, operating ef-
ficiencies, and transit supportive policies, and
existing land use; and
‘‘(C) supported by an acceptable degree of
local financial commitment (including evidence
of stable and dependable financing sources) to
construct, maintain, and operate the system or
extension.
‘‘(3) CONSIDERATIONS.—
‘‘(A) RESULTS
OF
ALTERNATIVES
ANAL-
YSIS
AND
PRELIMINARY
ENGINEERING.—In
evaluating a proposed project for purposes of
making the finding required by paragraph
545
(2)(A), the Secretary shall analyze and consider
the results of the alternatives analysis and pre-
liminary engineering for the project.
‘‘(B) PROJECT JUSTIFICATION.—In evalu-
ating a proposed project for purposes of making
the finding required by paragraph (2)(B), the
Secretary shall—
‘‘(i) consider the direct and indirect
costs of relevant alternatives;
‘‘(ii) consider factors such as conges-
tion relief, improved mobility, air pollution,
noise pollution, energy consumption, and
all associated ancillary and mitigation
costs necessary to carry out each alter-
native analyzed and recognize reductions in
local infrastructure costs achieved through
compact land use development;
‘‘(iii) identify and consider public
transportation supportive existing land use
policies and future patterns and the cost of
suburban sprawl;
‘‘(iv) consider the degree to which the
project increases the mobility of the public
transportation dependent population or
promotes economic development;
546
‘‘(v) consider population density and
current transit ridership in the corridor;
‘‘(vi) consider the technical capability
of the grant recipient to construct the
project;
‘‘(vii) adjust the project justification
to reflect differences in local land, con-
struction, and operating costs; and
‘‘(viii) consider other factors that the
Secretary determines appropriate to carry
out this chapter.
‘‘(C) LOCAL FINANCIAL COMMITMENT.—In
evaluating a proposed project under paragraph
(2)(C), the Secretary shall require that—
‘‘(i) the proposed project plan pro-
vides for the availability of contingency
amounts that the Secretary determines to
be reasonable to cover unanticipated cost
increases;
‘‘(ii) each proposed local source of
capital and operating financing is stable,
reliable, and available within the proposed
project timetable; and
‘‘(iii) local resources are available to
operate the overall proposed public trans-
547
portation system (including essential feeder
bus and other services necessary to achieve
the projected ridership levels) without re-
quiring a reduction in existing public
transportation services to operate the pro-
posed project.
‘‘(D) ASSESSMENT
OF
LOCAL
FINANC-
ING.—In assessing the stability, reliability, and
availability of proposed sources of local financ-
ing under paragraph (2)(C), the Secretary shall
consider—
‘‘(i) existing grant commitments;
‘‘(ii) the degree to which financing
sources are dedicated to the purposes pro-
posed;
‘‘(iii) any debt obligation that exists
or is proposed by the recipient for the pro-
posed project or other public transpor-
tation purpose; and
‘‘(iv) the extent to which the project
has a local financial commitment that ex-
ceeds the required non-Federal share of
the cost of the project.
‘‘(4) 
EVALUATION
AND
RATING
OF
PROJECTS.—A proposed project under this sub-
548
section may advance from alternatives analysis to
preliminary engineering, and may advance from pre-
liminary engineering to final design and construc-
tion, only if the Secretary finds that the project
meets the requirements of this section and there is
a reasonable likelihood that the project will continue
to meet such requirements. In making the findings,
the Secretary shall evaluate and rate the project as
‘highly recommended’, ‘recommended’, or ‘not rec-
ommended’ based on the results of alternatives anal-
ysis, the project justification criteria, and the degree
of local financial commitment, as required under this
subsection. In rating the projects, the Secretary
shall provide, in addition to the overall project rat-
ing, individual ratings for each of the criteria estab-
lished by regulation.
‘‘(5) MAJOR
DEFINED.—In this section, the
term ‘major’, as used with respect to a new fixed
guideway capital project, means the Federal assist-
ance provided or to be provided under this section
for the project is $75,000,000 or more.
‘‘(d) CAPITAL INVESTMENT GRANTS LESS THAN
$75,000,000.—
‘‘(1) IN GENERAL.—Subject to the provisions of
this subsection, if the Federal assistance provided or
549
to be provided under this section with respect to a
new fixed guideway capital project is less than
$75,000,000, and not less than $25,000,000, and
the total estimated net capital cost of the project is
less than $200,000,000, the project shall be subject
to the requirements in this subsection. A new fixed
guideway capital project is not subject to the re-
quirements of this subsection if the assistance pro-
vided under this section with respect to the project
is less than $25,000,000.
‘‘(2) SELECTION
CRITERIA.—The Secretary
may provide Federal assistance under this sub-
section with respect to a proposed project only if the
Secretary finds that the project is—
‘‘(A) based on the results of planning and
alternatives analysis;
‘‘(B) justified based on a review of its pub-
lic transportation supportive land use policies,
cost effectiveness, and effect on local economic
development; and
‘‘(C) supported by an acceptable degree of
local financial commitment.
‘‘(3) PLANNING AND ALTERNATIVES.—In evalu-
ating a project under paragraph (2)(A), the Sec-
550
retary shall analyze and consider the results of plan-
ning and alternatives analysis for the project.
‘‘(4) PROJECT JUSTIFICATION.—For purposes
of making the finding under paragraph (2)(B), the
Secretary shall—
‘‘(A) determine the degree to which the
project is consistent with local land use policies
and is likely to achieve local developmental
goals;
‘‘(B) determine the cost effectiveness of
the project at the time of the initiation of rev-
enue service;
‘‘(C) determine the degree to which the
project will have a positive effect on local eco-
nomic development;
‘‘(D) consider the reliability of the fore-
casts of costs and ridership associated with the
project; and
‘‘(E) consider other factors that the Sec-
retary determines appropriate to carry out this
subsection.
‘‘(5) LOCAL
FINANCIAL
COMMITMENT.—For
purposes of paragraph (2)(C), the Secretary shall re-
quire that each proposed local source of capital and
551
operating financing is stable, reliable, and available
within the proposed project timetable.
‘‘(6) ADVANCEMENT OF PROJECT TO DEVELOP-
MENT AND CONSTRUCTION.—
‘‘(A) GENERAL RULE.—A proposed project
under this subsection may advance from plan-
ning and alternatives analysis to project devel-
opment and construction only if—
‘‘(i) the Secretary finds that the
project meets the requirements of this sub-
section and there is a reasonable likelihood
that the project will continue to meet such
requirements; and
‘‘(ii) the metropolitan planning orga-
nization has adopted the locally preferred
alternative for the project into the long-
range transportation plan.
‘‘(B) EVALUATION.—In making the find-
ings under subparagraph (A), the Secretary
shall evaluate and rate the project as ‘rec-
ommended’ or ‘not recommended’ based on the
results of the analysis of the project justifica-
tion criteria and the degree of local financial
commitment, as required by this subsection.
552
‘‘(7) CONTENTS
OF
PROJECT
CONSTRUCTION
GRANT AGREEMENT.—A project construction grant
agreement under this subsection shall specify the
scope of the project to be constructed, the estimated
net project cost of the project, the schedule under
which the project shall be constructed, the maximum
amount of funding to be obtained under this sub-
section, the proposed schedule for obligation of fu-
ture Federal grants, and the sources of funding
from other than the Government. The agreement
may include a commitment on the part of the Sec-
retary to provide funding for the project in future
fiscal years.
‘‘(8) LIMITATION ON ENTRY INTO CONSTRUC-
TION
GRANT
AGREEMENT.—The Secretary may
enter into a project construction grant agreement
for a project under this subsection only if the project
is authorized for construction and has been rated as
‘recommended’ under this subsection.
‘‘(9) REGULATIONS.—Not later than 120 days
after the date of enactment of the Federal Public
Transportation Act of 2005, the Secretary shall
issue regulations establishing an evaluation and rat-
ing process for proposed projects under this sub-
section that is based on the results of project jus-
553
tification and local financial commitment, as re-
quired under this subsection.
‘‘(10) FIXED GUIDEWAY CAPITAL PROJECT.—In
this subsection, the term ‘fixed guideway capital
project’ includes a corridor-based public transpor-
tation bus capital project if the majority of the
project’s corridor right-of-way is dedicated alignment
for exclusive use by public transportation vehicles for
all or part of the day.
‘‘(e) PREVIOUSLY ISSUED LETTER OF INTENT OR
FULL FUNDING GRANT AGREEMENT.—Subsections (c)
and (d) do not apply to projects for which the Secretary
has issued a letter of intent or entered into a full funding
grant agreement before the date of enactment of the Fed-
eral Public Transportation Act of 2005. Subsection (d)
also does not apply to projects for which the Secretary
has received an application for final design before such
date of enactment.
‘‘(f) LETTERS OF INTENT, FULL FUNDING GRANT
AGREEMENTS, AND EARLY SYSTEMS WORK AGREE-
MENTS.—
‘‘(1) LETTERS OF INTENT.—
‘‘(A) AMOUNTS
INTENDED
TO
BE
OBLI-
GATED.—The Secretary may issue a letter of
intent to an applicant announcing an intention
554
to obligate, for a capital project under this sec-
tion, an amount from future available budget
authority specified in law that is not more than
the amount stipulated as the financial partici-
pation of the Secretary in the project. When a
letter is issued for fixed guideway projects, the
amount shall be sufficient to complete at least
an operable segment.
‘‘(B) TREATMENT.—The issuance of a let-
ter under subparagraph (A) is deemed not to be
an obligation under sections 1108(c), 1108(d),
1501, and 1502(a) of title 31 or an administra-
tive commitment.
‘‘(2) FULL FUNDING GRANT AGREEMENTS.—
‘‘(A) TERMS.—The Secretary may make a
full funding grant agreement with an applicant.
The agreement shall—
‘‘(i) establish the terms of participa-
tion by the Government in a project under
this section;
‘‘(ii) establish the maximum amount
of Government financial assistance for the
project;
‘‘(iii) cover the period of time for com-
pleting the project, including a period ex-
555
tending beyond the period of an authoriza-
tion; and
‘‘(iv) make timely and efficient man-
agement of the project easier according to
the law of the United States.
‘‘(B) SPECIAL FINANCIAL RULES.—
‘‘(i) IN
GENERAL.—An agreement
under this paragraph obligates an amount
of available budget authority specified in
law and may include a commitment, con-
tingent on amounts to be specified in law
in advance for commitments under this
paragraph, 
to 
obligate 
an 
additional
amount from future available budget au-
thority specified in law.
‘‘(ii) STATEMENT
OF
CONTINGENT
COMMITMENT.—The agreement shall state
that the contingent commitment is not an
obligation of the Government.
‘‘(iii) INTEREST AND OTHER FINANC-
ING COSTS.—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
556
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 cer-
tify, in a way satisfactory to the Secretary,
that the applicant has shown reasonable
diligence in seeking the most favorable fi-
nancing terms.
‘‘(iv) COMPLETION
OF
OPERABLE
SEGMENT.—The amount stipulated in an
agreement under this paragraph for a fixed
guideway project shall be sufficient to com-
plete at least an operable segment.
‘‘(3) EARLY SYSTEM WORK AGREEMENTS.—
‘‘(A) CONDITIONS.—The Secretary may
make an early systems work agreement with an
applicant if a record of decision under the Na-
tional 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
557
‘‘(ii) the terms of the work agreement
will promote ultimate completion of the
project more rapidly and at less cost.
‘‘(B) CONTENTS.—
‘‘(i) IN GENERAL.—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, including land acquisition, timely
procurement of system elements for which
specifications are decided, and other activi-
ties the Secretary decides are appropriate
to make efficient, long-term project man-
agement easier.
‘‘(ii) 
PERIOD
COVERED.—A 
work
agreement under this paragraph shall
cover the period of time the Secretary con-
siders appropriate. The period may extend
beyond the period of current authorization.
‘‘(iii) INTEREST AND OTHER FINANC-
ING COSTS.—Interest and other financing
costs of efficiently carrying out the work
agreement within a reasonable time are a
cost of carrying out the agreement, except
558
that eligible costs may not be more than
the cost of the most favorable financing
terms reasonably available for the project
at the time of borrowing. The applicant
shall certify, in a way satisfactory to the
Secretary, that the applicant has shown
reasonable diligence in seeking the most
favorable financing terms.
‘‘(iv) 
FAILURE
TO
CARRY
OUT
PROJECT.—If an applicant does not carry
out the project for reasons within the con-
trol of the applicant, the applicant shall
repay all Government payments made
under the work agreement plus reasonable
interest and penalty charges the Secretary
establishes in the agreement.
‘‘(4) LIMITATION ON AMOUNTS.—
‘‘(A) 
MAJOR
CAPITAL
INVESTMENT
GRANTS
CONTINGENT
COMMITMENT
AUTHOR-
ITY.—The total estimated amount of future ob-
ligations of the Government and contingent
commitments to incur obligations covered by all
outstanding letters of intent, full funding grant
agreements, and early systems work agreements
under this subsection for major new fixed
559
guideway capital projects may be not more than
the greater of the amount authorized under sec-
tions 5338(b) and 5338(h)(1) for such projects
or an amount equivalent to the last 3 fiscal
years of funding allocated under subsections
(m)(1)(B) and (m)(2)(B)(ii) for such projects,
less an amount the Secretary reasonably esti-
mates is necessary for grants under this section
for those of such projects that are not covered
by a letter or agreement. The total amount cov-
ered by new letters and contingent commit-
ments included in full funding grant agree-
ments and early systems work agreements for
such projects may be not more than a limitation
specified in law.
‘‘(B) OTHER
CONTINGENT
COMMITMENT
AUTHORITY.—The total estimated amount of
future obligations of the Government and con-
tingent commitments to incur obligations cov-
ered by all project construction grant agree-
ments and early system work agreements under
this subsection for small capital projects de-
scribed in subsection (d) may be not more than
the greater of the amount allocated under sub-
section (m)(2)(A) for such projects or an
560
amount equivalent to the last fiscal year of
funding allocated under subsection (m)(2)(A)
for such projects, less an amount the Secretary
reasonably estimates is necessary for grants
under this section for those of such projects
that are not covered by an agreement. The total
amount covered by new contingent commit-
ments included in project construction grant
agreements and early systems work agreements
for such projects may be not more than a limi-
tation specified in law.
‘‘(C) INCLUSION
OF
CERTAIN
COMMIT-
MENTS.—Future obligations of the Government
and contingent commitments made against the
contingent commitment authority under section
3032(g)(2) of the Intermodal Surface Trans-
portation Efficiency Act of 1991 (106 Stat.
2125) for the San Francisco BART to the Air-
port project for fiscal years 2002, 2003, 2004,
2005, and 2006 shall be charged against sec-
tion 3032(g)(2) of that Act.
‘‘(D) APPROPRIATION REQUIRED.—An ob-
ligation may be made under this subsection only
when amounts are appropriated for the obliga-
tion.
561
‘‘(5) NOTIFICATION OF CONGRESS.—At least 60
days before issuing a letter of intent or entering into
a full funding grant agreement or project construc-
tion grant agreement under this section, the Sec-
retary shall notify, in writing, the Committee on
Transportation and Infrastructure of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate of the
proposed letter or agreement. The Secretary shall in-
clude with the notification a copy of the proposed
letter or agreement as well as the evaluations and
ratings for the project.
‘‘(g) GOVERNMENT’S
SHARE
OF
NET
PROJECT
COST.—
‘‘(1) FEDERAL SHARE.—Based on engineering
studies, studies of economic feasibility, and informa-
tion on the expected use of equipment or facilities,
the Secretary shall estimate the net project cost. A
grant for the project shall be for 80 percent of the
net capital project cost, unless the grant recipient
requests a lower grant percentage.
‘‘(2) REMAINDER OF NET PROJECT COST.—The
remainder of net project costs shall be provided from
an undistributed cash surplus, a replacement or de-
preciation cash fund or reserve, or new capital.
562
‘‘(3) LIMITATION
ON
STATUTORY
CONSTRUC-
TION.—Nothing in this section, including paragraph
(1) and subsections (c)(3)(D)(iv) and (c)(4), shall be
construed as authorizing the Secretary to require a
non-Federal financial commitment for a project that
is more than 20 percent of the net capital project
cost.
‘‘(4) SPECIAL
RULE
FOR
ROLLING
STOCK
COSTS.—In addition to amounts allowed pursuant to
paragraph (1), a planned extension to a fixed guide-
way system may include the cost of rolling stock pre-
viously purchased if the applicant satisfies the Sec-
retary that only amounts other than amounts of the
Government were used and that the purchase was
made for use on the extension. A refund or reduc-
tion of the remainder may be made only if a refund
of a proportional amount of the grant of the Govern-
ment is made at the same time.
‘‘(5) LIMITATION
ON
APPLICABILITY.—This
subsection does not apply to projects for which the
Secretary has entered into a full funding grant
agreement before the date of enactment of the Fed-
eral Public Transportation Act of 2005.
‘‘(h) FISCAL CAPACITY CONSIDERATIONS.—If the
Secretary gives priority consideration to financing projects
563
that include more than the non-Government share re-
quired under subsection (g), the Secretary shall give equal
consideration to differences in the fiscal capacity of State
and local governments.
‘‘(i) REPORTS ON NEW STARTS.—
‘‘(1) ANNUAL
DOT
REPORT.—Not later than
the first Monday in February of each year, the Sec-
retary shall submit to the Committee on Transpor-
tation and Infrastructure of the House of Represent-
atives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report that includes—
‘‘(A) a proposal of allocations of amounts
to be available to finance grants for new fixed
guideway capital projects among applicants for
these amounts;
‘‘(B) evaluations and ratings, as required
under subsection (c), for each such project that
is authorized by the Federal Public Transpor-
tation Act of 2005; and
‘‘(C) recommendations of such projects for
funding based on the evaluations and ratings
and on existing commitments and anticipated
funding levels for the next 3 fiscal years and for
the next 10 fiscal years based on information
currently available to the Secretary.
564
‘‘(2) ANNUAL GAO REVIEW.—The Comptroller
General shall—
‘‘(A) conduct an annual review of—
‘‘(i) the processes and procedures for
evaluating, rating, and recommending new
fixed guideway capital projects; and
‘‘(ii) the Secretary’s implementation
of such processes and procedures; and
‘‘(B) report to Congress on the results of
such review by May 31 of each year.
‘‘(j) UNDERTAKING PROJECTS IN ADVANCE.—
‘‘(1) IN GENERAL.—The Secretary may pay the
Government’s share of the net capital project cost to
a State or local governmental authority that carries
out any part of a project described in this section
without the aid of amounts of the Government and
according to all applicable procedures and require-
ments if—
‘‘(A) the State or local governmental au-
thority 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
565
specifications for the part in the same way as
other projects under this section.
‘‘(2) FINANCING COSTS.—
‘‘(A) IN GENERAL.—The cost of carrying
out part of a project includes the amount of in-
terest earned and payable on bonds issued by
the State or local governmental authority to the
extent proceeds of the bonds are expended in
carrying out the part.
‘‘(B) LIMITATION ON AMOUNT OF INTER-
EST.—The amount of interest under this para-
graph may not be more than the most favorable
interest terms reasonably available for the
project at the time of borrowing.
‘‘(C) CERTIFICATION.—The applicant shall
certify, in a manner satisfactory to the Sec-
retary, that the applicant has shown reasonable
diligence in seeking the most favorable financial
terms.
‘‘(3) CAPITAL
PROJECT
COST
INDICES.—The
Secretary shall consider changes in capital project
cost indices when determining the estimated cost
under paragraph (2).
‘‘(k) BUS AND BUS FACILITIES PROJECTS.—In mak-
ing 
grants 
under 
subsections 
(m)(1)(C) 
and
566
(m)(2)(B)(iii), the Secretary shall consider the age of
buses, bus fleets, related equipment, and bus-related facili-
ties.
‘‘(l) AVAILABILITY OF AMOUNTS.—An amount made
available or appropriated under section 5338(b), 5338(g),
or 5338(h) for replacement, rehabilitation, and purchase
of buses and related equipment and construction of bus-
related facilities or for new fixed guideway capital projects
shall remain available for 3 fiscal years, including the fis-
cal year in which the amount is made available or appro-
priated. Any of such amounts that are unobligated at the
end of the 3-fiscal-year period shall be deobligated and
may be used by the Secretary for any purpose under this
section.
‘‘(m) ALLOCATING AMOUNTS.—
‘‘(1) FISCAL YEAR 2004.—The total amount of
funds made available by or appropriated under sec-
tion 5338(b) for fiscal year 2004 shall be allocated
as follows:
‘‘(A) 40 percent for fixed guideway mod-
ernization;
‘‘(B) 40 percent for major new fixed guide-
way capital projects; and
567
‘‘(C) 20 percent to replace, rehabilitate,
and purchase buses and related equipment and
to construct bus-related facilities.
‘‘(2) FISCAL
YEARS
2005–2009.—The total
amount of funds made available by section 5338(g),
and appropriated under section 5338(h), for each of
fiscal years 2005 through 2009 shall be allocated in
the fiscal year as follows:
‘‘(A) SMALL
CAPITAL
PROJECTS.—From
funds appropriated under section 5338(h) for
new fixed guideway capital projects described in
subsection (d)—
‘‘(i) $135,000,000 in fiscal year 2005;
‘‘(ii) $175,000,000 in fiscal year
2006;
‘‘(iii) $200,000,000 in fiscal year
2007;
‘‘(iv) $200,000,000 in fiscal year
2008; and
‘‘(v) $225,000,000 in fiscal year
2009.
‘‘(B) REMAINDER.—After the allocation
under subparagraph (A), the remainder of such
total amount shall be allocated as follows:
568
‘‘(i) 40 percent for fixed guideway
modernization, to be derived from funds
made available under section 5338(g).
‘‘(ii) 40 percent for major new fixed
capital guideway projects, to be derived
from funds appropriated under section
5338(h).
‘‘(iii) 20 percent to replace, rehabili-
tate, and purchase buses and related
equipment and to construct bus-related fa-
cilities, to be derived from funds made
available under section 5338(g).
‘‘(3) FUNDING FOR FERRY BOAT SYSTEMS.—Of
the amounts made available under paragraphs
(1)(B) and (2)(B)(ii), $10,400,000 shall be available
in each of fiscal years 2004 through 2009 for new
fixed guideway capital projects in Alaska or Hawaii
that are for ferry boats or ferry terminal facilities or
that are for approaches to ferry terminal facilities.
Of the amounts made available under paragraphs
(1)(C) and (2)(B)(iii), $10,000,000 shall be avail-
able in each of fiscal years 2005 through 2009 for
ferry boats or ferry terminal facilities.
‘‘(4) FUEL
CELL
BUS
PROGRAM.—Of the
amounts made available under subsections (m)(1)(C)
569
and (m)(2)(B)(iii) for a fiscal year, the following
amounts shall be set aside for the national fuel cell
bus technology development program under section
3039 of the Federal Public Transportation Act of
2005:
‘‘(A) $4,849,950 for fiscal year 2004.
‘‘(B) $10,000,000 for fiscal year 2005.
‘‘(C) $11,000,000 for fiscal year 2006.
‘‘(D) $12,000,000 for fiscal year 2007.
‘‘(E) $13,000,000 for fiscal year 2008.
‘‘(F) $14,000,000 for fiscal year 2009.
‘‘(n) NEW FIXED GUIDEWAY CAPITAL PROJECT DE-
FINED.—In this section, the term ‘new fixed guideway
capital project’ means a minimum operable segment of a
capital project for a new fixed guideway system or exten-
sion to an existing fixed guideway system.’’.
(e) CONFORMING AMENDMENTS.—
(1) CHAPTER
ANALYSIS.—The analysis for
chapter 53 is amended by striking the item relating
to section 5309 and inserting the following:
‘‘5309. Capital investment grants.’’.
(2) 
SECTION
5328.—Section 
5328(a) 
is
amended—
(A) in paragraph (2) by striking ‘‘5309(e)’’
and inserting ‘‘5309(c)’’; and
570
(B) in paragraph (4) by striking ‘‘under
section 5309(o)(1)’’ and inserting ‘‘under sec-
tion 5309(i)(1)’’.
SEC. 3011. FORMULA GRANTS FOR SPECIAL NEEDS OF EL-
DERLY INDIVIDUALS AND INDIVIDUALS WITH
DISABILITIES.
(a) IN GENERAL.—Section 5310 is amended—
(1) by striking the section heading and insert-
ing the following:
‘‘§ 5310. Formula grants for special needs of elderly
individuals and individuals with disabil-
ities’’;
(2) by striking subsections (a) through (g) and
inserting the following:
‘‘(a) GENERAL AUTHORITY.—
‘‘(1) 
GRANTS.—The 
Secretary 
may 
make
grants to States and local governmental authorities
under this section for public transportation capital
projects, and operating costs associated with public
transportation capital projects, planned, designed,
and carried out to meet the special needs of elderly
individuals and individuals with disabilities.
‘‘(2) SUBRECIPIENTS.—A State that receives a
grant under this section may allocate the amounts of
the grant to—
571
‘‘(A) a private nonprofit organization if the
public transportation service provided under
paragraph (1) is unavailable, insufficient, or in-
appropriate; or
‘‘(B) a governmental authority that—
‘‘(i) is approved by the State to co-
ordinate services for elderly individuals and
individuals with disabilities; or
‘‘(ii) certifies that there are not any
nonprofit organizations readily available in
the area to provide the services described
under paragraph (1).
‘‘(3) 
ACQUIRING
PUBLIC
TRANSPORTATION
SERVICES.—A public transportation capital project
under this section may include acquisition of public
transportation services as an eligible capital expense.
‘‘(4) ADMINISTRATIVE EXPENSES.—A State or
local governmental authority may use not more than
10 percent of the amounts apportioned to the State
under this section to administer, plan, and provide
technical assistance for a project funded under this
section.
‘‘(b) APPORTIONMENT AND TRANSFERS.—
‘‘(1) APPORTIONMENT.—
572
‘‘(A) FORMULA.—The Secretary shall ap-
portion amounts made available to carry out
this section under a formula the Secretary ad-
ministers that considers the number of elderly
individuals and individuals with disabilities in
each State.
‘‘(B) LOW DENSITY ADJUSTMENT.—In ad-
ministering the apportionment formula under
subparagraph (A)—
‘‘(i) in the case of a State with a pop-
ulation density of 10 or fewer persons per
square mile, the Secretary shall multiply
by a factor of 2 the number of elderly indi-
viduals and individuals with disabilities in
the State (as determined using the most
recent decennial United States Census);
and
‘‘(ii) in the case of a State with a pop-
ulation density of more than 10 but equal
to or fewer than 30 persons per square
mile, the Secretary shall multiply by a fac-
tor of 1.25 the number of elderly individ-
uals and individuals with disabilities in the
State (as determined using the most recent
decennial United States Census).
573
‘‘(2) TRANSFERS.—Any State’s apportionment
remaining available for obligation at the beginning
of the 90-day period before the end of the period of
availability of the apportionment is available to the
State for transfer to supplement amounts appor-
tioned to the State under section 5311(c) or
5336(a)(1), or both. Any funds transferred pursuant
to this paragraph shall be made available only for el-
igible projects as described in this section.
‘‘(c) GOVERNMENT’S SHARE OF COSTS.—
‘‘(1) CAPITAL PROJECTS.—A grant for a capital
project under this section shall be for 80 percent of
the net capital costs of the project, as determined by
the Secretary; except that in the case of a State de-
scribed in section 120(b)(1) of title 23, such percent-
age shall be increased in accordance with such sec-
tion.
‘‘(2) OPERATING ASSISTANCE.—A grant made
under this section for operating assistance may not
exceed 50 percent of the net operating costs of the
project, as determined by the Secretary.
‘‘(3) REMAINDER.—The remainder of the net
project costs—
‘‘(A) may be provided from an undistrib-
uted cash surplus, a replacement or deprecia-