124 
(B) by inserting ‘‘, 54A(b)(4),’’ after 
‘‘54(b)(4)’’. 
(2) CONFORMING AMENDMENT.—The heading 
of section 6049(d)(8) of such Code is amended by 
striking ‘‘CLEAN RENEWABLE ENERGY BONDS’’ and 
inserting ‘‘CERTAIN TAX CREDIT BONDS’’. 
(c) CLERICAL AMENDMENT.—The table of subparts 
for subpart H of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 54A. Credit to holders of qualified high-speed rail infrastructure bonds.’’. 
(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) 
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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. 
Subtitle D—Energy Supply and 
Freight Rail 
SEC. 531. SHORT TITLE. 
This subtitle may be cited as the ‘‘Railroad Track 
Modernization Act of 2007’’. 
SEC. 532. CAPITAL GRANTS FOR RAILROAD TRACK. 
(a) AMENDMENT.—Chapter 223 of title 49, United 
States Code, is amended to read as follows: 
‘‘CHAPTER 223—CAPITAL GRANTS FOR 
RAILROAD TRACK 
‘‘Sec. 
‘‘22301. Capital grants for railroad track. 
‘‘§ 22301. Capital grants for railroad track 
‘‘(a) ESTABLISHMENT OF PROGRAM.— 
‘‘(1) 
ESTABLISHMENT.—The 
Secretary 
of 
Transportation shall establish a program of capital 
grants for the rehabilitation, preservation, or im-
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provement of railroad track (including roadbed, 
bridges, and related track structures) of class II and 
class III railroads. Such grants shall be for rehabili-
tating, preserving, or improving track used primarily 
for freight transportation to a standard ensuring 
that the track can be operated safely and efficiently, 
including grants for rehabilitating, preserving, or im-
proving track to handle 286,000 pound rail cars. 
Grants may be provided under this chapter— 
‘‘(A) directly to the class II or class III 
railroad; or 
‘‘(B) with the concurrence of the class II 
or class III railroad, to a State or local govern-
ment. 
‘‘(2) STATE COOPERATION.—Class II and class 
III railroad applicants for a grant under this chap-
ter are encouraged to utilize the expertise and assist-
ance of State transportation agencies in applying for 
and administering such grants. State transportation 
agencies are encouraged to provide such expertise 
and assistance to such railroads. 
‘‘(3) INTERIM REGULATIONS.—Not later than 
December 31, 2007, the Secretary shall issue tem-
porary regulations to implement the program under 
this section. Subchapter II of chapter 5 of title 5 
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does not apply to a temporary regulation issued 
under this paragraph or to an amendment to such 
a temporary regulation. 
‘‘(4) FINAL REGULATIONS.—Not later than Oc-
tober 1, 2008, the Secretary shall issue final regula-
tions to implement the program under this section. 
‘‘(b) MAXIMUM FEDERAL SHARE.—The maximum 
Federal share for carrying out a project under this section 
shall be 80 percent of the project cost. The non-Federal 
share may be provided by any non-Federal source in cash, 
equipment, or supplies. Other in-kind contributions may 
be approved by the Secretary on a case by case basis con-
sistent with this chapter. 
‘‘(c) PROJECT ELIGIBILITY.—For a project to be eli-
gible for assistance under this section the track must have 
been operated or owned by a class II or class III railroad 
as of the date of the enactment of the Railroad Track 
Modernization Act of 2007. 
‘‘(d) USE OF FUNDS.—Grants provided under this 
section shall be used to implement track capital projects 
as soon as possible. In no event shall grant funds be con-
tractually obligated for a project later than the end of the 
third Federal fiscal year following the year in which the 
grant was awarded. Any funds not so obligated by the end 
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of such fiscal year shall be returned to the Secretary for 
reallocation. 
‘‘(e) ADDITIONAL PURPOSE.—In addition to making 
grants for projects as provided in subsection (a), the Sec-
retary may also make grants to supplement direct loans 
or loan guarantees made under title V of the Railroad Re-
vitalization and Regulatory Reform Act of 1976 (45 
U.S.C. 822(d)), for projects described in the last sentence 
of section 502(d) of such title. Grants made under this 
subsection may be used, in whole or in part, for paying 
credit risk premiums, lowering rates of interest, or pro-
viding for a holiday on principal payments. 
‘‘(f) EMPLOYEE PROTECTION.—The Secretary shall 
require as a condition of any grant made under this sec-
tion that the recipient railroad provide a fair arrangement 
at least as protective of the interests of employees who 
are affected by the project to be funded with the grant 
as the terms imposed under section 11326(a), as in effect 
on the date of the enactment of the Railroad Track Mod-
ernization Act of 2007. 
‘‘(g) LABOR STANDARDS.— 
‘‘(1) PREVAILING WAGES.—The Secretary shall 
ensure that laborers and mechanics employed by 
contractors and subcontractors in construction work 
financed by a grant made under this section will be 
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