466
OF OCTOBER 1, 2004, THROUGH MAY 31, 2005’’ and in-
serting ‘‘FISCAL YEARS 2003 THROUGH 2005’’; 
(3) in paragraph (2)(A) by striking ‘‘fiscal years 
2003’’ and all that follows through ‘‘2005’’ and insert-
ing ‘‘fiscal years 2003, 2004, and 2005’’; 
(4) in paragraph (3) by striking ‘‘section 
5305(a) of this title’’ and inserting ‘‘chapter 52’’; and 
(5) in paragraph (3)(A) by striking ‘‘section 
5303 of this title’’ and inserting ‘‘chapter 52’’. 
(d) GRANT
RECIPIENT
REQUIREMENTS.—Section 
5307(d)(1) is amended—
(1) in subparagraph (A) by inserting ‘‘, includ-
ing safety and security aspects of the program’’ after 
‘‘program’’; 
(2) in subparagraph (H) by striking ‘‘sections 
5301(a) and (d), 5303–5306, and 5310(a)–(d) of this 
title’’ and inserting ‘‘subsections (a) and (d) of section 
5301 and sections 5303 through 5306’’; 
(3) in subparagraph (I) by striking ‘‘and’’ at the 
end; and 
(4) by adding at the end the following: 
‘‘(K) in the case of a recipient for an ur-
banized area with a population of at least 
200,000—
467
‘‘(i) will expend one percent of the 
amount the recipient receives each fiscal 
year under this section for projects for tran-
sit enhancements, as defined in section 
5302(a); and 
‘‘(ii) will submit an annual report list-
ing projects carried out in the preceding fis-
cal year with those funds; and’’. 
(e) GOVERNMENT’S
SHARE
OF
COSTS.—Section 
5307(e) is amended to read as follows: 
‘‘(e) GOVERNMENT’S SHARE OF COSTS.—
‘‘(1) CAPITAL PROJECTS.—A grant for a capital 
project (including associated capital maintenance 
items) under this section shall be for 80 percent of the 
net project cost of the project. The recipient may pro-
vide additional local matching amounts. 
‘‘(2) OPERATING EXPENSES.—A grant for oper-
ating expenses under this section may not exceed 50 
percent of the net project cost of the project. 
‘‘(3) REMAINDER.—The remainder of the net 
project cost shall be provided—
‘‘(A) in cash from sources other than 
amounts of the Government or revenues from 
providing public transportation (excluding reve-
468
nues derived from the sale of advertising and 
concessions); 
‘‘(B) from an undistributed cash surplus, a 
replacement or depreciation cash fund or reserve, 
or new capital; and 
‘‘(C) from amounts received under a service 
agreement with a State or local social service 
agency or private social service organization.’’. 
(f) REVIEWS, AUDITS, AND EVALUATIONS.—Section 
5307(h)(1)(A) (as redesignated by subsection (a) of this sec-
tion) is amended by striking ‘‘shall’’ and inserting ‘‘may’’. 
(g) RELATIONSHIP TO OTHER LAWS.—Section 5307(l) 
(as redesignated by subsection (a) of this section) is amend-
ed—
(1) by striking paragraph (1); 
(2) by redesignating paragraph (2) as para-
graph (1); 
(3) by inserting ‘‘This chapter.—’’ before ‘‘Sec-
tions 5302’’; 
(4) by adding at the end the following: 
‘‘(2) CHAPTER 15 OF TITLE 5.—The provision of 
assistance under this chapter shall not be construed as 
bringing within the application of chapter 15 of title 
5 any nonsupervisory employee of a public transpor-
tation system (or any other agency or entity per-
469
forming related functions) to which such chapter is 
otherwise inapplicable.’’; and 
(5) by aligning the left margin of paragraph (1) 
(as so redesignated) with paragraph (2) (as added by 
paragraph (4) of this subsection). 
(h) TREATMENT.—At the end of section 5307, add the 
following: 
‘‘(m) TREATMENT.—For purposes of this section, the 
United States Virgin Islands shall be treated as an urban-
ized area, as defined in section 5302.’’. 
SEC. 3009. CLEAN FUELS FORMULA GRANT PROGRAM. 
Section 5308 is amended to read as follows: 
‘‘§ 5308. Clean fuels formula grant program 
‘‘(a) DEFINITIONS.—In this section, the following defi-
nitions apply: 
‘‘(1) CLEAN FUEL BUS.—The term ‘clean fuel 
bus’ means a passenger vehicle used to provide public 
transportation that—
‘‘(A) is powered by—
‘‘(i) compressed natural gas; 
‘‘(ii) liquefied natural gas; 
‘‘(iii) biodiesel fuels; 
‘‘(iv) batteries; 
‘‘(v) alcohol-based fuels; 
‘‘(vi) hybrid electric;
470
‘‘(vii) fuel cell; 
‘‘(viii) clean diesel, to the extent al-
lowed under this section; or 
‘‘(ix) other low or zero emissions tech-
nology; and 
‘‘(B) the Administrator of the Environ-
mental Protection Agency has certified suffi-
ciently reduces harmful emissions. 
‘‘(2) ELIGIBLE
PROJECT.—The term ‘eligible 
project’—
‘‘(A) means a project in a nonattainment or 
maintenance area described in paragraph (4)(A) 
for—
‘‘(i) purchasing or leasing clean fuel 
buses, including buses that employ a light-
weight composite primary structure; 
‘‘(ii) constructing or leasing clean fuel 
buses or electrical recharging facilities and 
related equipment for such buses; or 
‘‘(iii) constructing new or improving 
existing public transportation facilities to 
accommodate clean fuel buses; and 
‘‘(B) at the discretion of the Secretary, may 
include a project located in a nonattainment or 
maintenance area described in paragraph (4)(A)
471
relating to clean fuel, biodiesel, hybrid electric, 
or zero emissions technology buses that exhibit 
equivalent or superior emissions reductions to 
existing clean fuel or hybrid electric technologies. 
‘‘(3) MAINTENANCE
AREA.—The term ‘mainte-
nance area’ has the meaning such term has under sec-
tion 101 of title 23. 
‘‘(4) RECIPIENT.—
‘‘(A) IN
GENERAL.—The term ‘recipient’ 
means a designated recipient (as defined in sec-
tion 5307(a)(2)) for an area that, and a recipi-
ent for an urbanized area with a population of 
less than 200,000 that—
‘‘(i) is designated as a nonattainment 
area for ozone or carbon monoxide under 
section 107(d) of the Clean Air Act (42 
U.S.C. 7407(d)); or 
‘‘(ii) is a maintenance area for ozone 
or carbon monoxide. 
‘‘(B) SMALLER URBANIZED AREAS.—In the 
case of an urbanized area with a population of 
less than 200,000, the State in which the area is 
located shall act as the recipient for the area 
under this section.
472
‘‘(b) AUTHORITY.—The Secretary shall make grants in 
accordance with this section to recipients to finance eligible 
projects. 
‘‘(c) APPORTIONMENT OF FUNDS.—
‘‘(1) FORMULA.—The Secretary shall apportion 
among recipients amounts made available to carry 
out this section for a fiscal year. Of such amounts—
‘‘(A) two-thirds shall be apportioned to re-
cipients serving urbanized areas with a popu-
lation of at least 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
473
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 of 
nonattainment of the area served by 
the recipient; bears to 
‘‘(II) the total number of bus pas-
senger miles (as defined in section 
5336(c)) of all such recipients, weight-
ed by severity of nonattainment 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,
474
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 of 
nonattainment of the area served by 
the recipient; bears to 
‘‘(II) the total number of bus pas-
senger miles (as defined in section 
5336(c)) of all such recipients, weight-
ed 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 num-
ber of buses in the bus fleet, or the number of 
passenger miles, shall be multiplied by a factor 
of—
475
‘‘(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-
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 sub-
part 2 of such part.
476
‘‘(B) ADDITIONAL
ADJUSTMENT
FOR
CAR-
BON MONOXIDE AREAS.—If, in addition to being 
classified as a nonattainment or maintenance 
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 carbon mon-
oxide, the weighted nonattainment or mainte-
nance area fleet and passenger miles for the re-
cipient, as calculated under subparagraph (A), 
shall be further multiplied by a factor of 1.2. 
‘‘(d) CLEAN DIESEL BUSES.—Not more than 35 per-
cent of the amount made available by or appropriated 
under section 5338 in each fiscal year to carry out this sec-
tion 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 CER-
TAIN 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
477
‘‘(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.—Section 
5309 is amended—
(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 subsection 
(b). 
(c) PROJECT AS PART OF APPROVED PROGRAM OF 
PROJECTS.—Section 5309(b) (as redesignated by subsection 
(b) of this section) is amended—
(1) by striking ‘‘Except as provided in sub-
sections (b)(2) and (e) of the section, the’’ and insert-
ing ‘‘The’’; and 
(2) by striking ‘‘or loan’’. 
(d) CRITERIA AND FUNDING.—Section 5309 is amend-
ed by striking subsections (e) through (p) and inserting the 
following:
478
‘‘(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 fund-
ing grant agreement for a project unless that project 
is authorized for final design and construction. 
‘‘(2) APPROVAL OF GRANTS.—The Secretary may 
approve a grant under this section for a major new 
fixed guideway capital project only if the Secretary, 
based upon evaluations and considerations set forth 
in paragraph (3), determines that the proposal is—
‘‘(A) based on the results of an alternatives 
analysis and preliminary engineering; 
‘‘(B) justified based on a comprehensive re-
view of its mobility improvements, environ-
mental benefits, cost effectiveness, operating effi-
ciencies, and transit supportive policies, and ex-
isting land use; and 
‘‘(C) supported by an acceptable degree of 
local financial commitment (including evidence
479
of stable and dependable financing sources) to 
construct, maintain, and operate the system or 
extension. 
‘‘(3) CONSIDERATIONS.—
‘‘(A) RESULTS OF ALTERNATIVES ANALYSIS 
AND PRELIMINARY ENGINEERING.—In evaluating 
a proposed project for purposes of making the 
finding required by paragraph (2)(A), the Sec-
retary shall analyze and consider the results of 
the alternatives analysis and preliminary engi-
neering 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 alternative ana-
lyzed and recognize reductions in local in-
frastructure costs achieved through compact 
land use development;
480
‘‘(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; 
‘‘(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, construc-
tion, 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 provides 
for the availability of contingency amounts
481
that the Secretary determines to be reason-
able to cover unanticipated cost increases; 
‘‘(ii) each proposed local source of cap-
ital and operating financing is stable, reli-
able, and available within the proposed 
project timetable; and 
‘‘(iii) local resources are available to 
operate the overall proposed public trans-
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 FINANCING.—
In assessing the stability, reliability, and avail-
ability of proposed sources of local financing 
under paragraph (2)(C), the Secretary shall con-
sider—
‘‘(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 proposed
482
project or other public transportation pur-
pose; 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 subsection may advance 
from alternatives analysis to preliminary engineer-
ing, and may advance from preliminary engineering 
to final design and construction, 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’, ‘rec-
ommended’, or ‘not recommended’ based on the results 
of alternatives analysis, the project justification cri-
teria, 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 rating, individual ratings for each 
of the criteria established by regulation. 
‘‘(5) MAJOR DEFINED.—In this section, the term 
‘major’, as used with respect to a new fixed guideway
483
capital project, means the Federal assistance 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 
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, the 
project shall be subject to the requirements in this 
subsection. A new fixed guideway capital project is 
not subject to the requirements of this subsection if the 
assistance provided 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 subsection 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 de-
velopment; and
484
‘‘(C) supported by an acceptable degree of 
local financial commitment. 
‘‘(3) PLANNING AND ALTERNATIVES.—In evalu-
ating a project under paragraph (2)(A), the Secretary 
shall analyze and consider the results of planning and 
alternatives analysis for the project. 
‘‘(4) PROJECT JUSTIFICATION.—For purposes of 
making the finding under paragraph (2)(B), the Sec-
retary 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 revenue 
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 forecasts 
of costs and ridership associated with the project; 
and 
‘‘(E) consider other factors that the Sec-
retary determines appropriate to carry out this 
subsection.
485
‘‘(5) LOCAL FINANCIAL COMMITMENT.—For pur-
poses of paragraph (2)(C), the Secretary shall require 
that each proposed local source of capital and oper-
ating financing is stable, reliable, and available with-
in 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 develop-
ment and construction only if—
‘‘(i) the Secretary finds that the project 
meets the requirements of this subsection 
and there is a reasonable likelihood that the 
project will continue to meet such require-
ments; 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 findings 
under subparagraph (A), the Secretary shall 
evaluate and rate the project as ‘recommended’ 
or ‘not recommended’ based on the results of the 
analysis of the project justification criteria and
486
the degree of local financial commitment, as re-
quired by this subsection. 
‘‘(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 subsection, the 
proposed schedule for obligation of future Federal 
grants, and the sources of funding from other than the 
Government. The agreement may include a commit-
ment on the part of the Secretary to provide funding 
for the project in future fiscal years. 
‘‘(8) LIMITATION ON ENTRY INTO CONSTRUCTION 
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 rating 
process for proposed projects under this subsection
487
that is based on the results of project justification and 
local financial commitment, as required 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 Federal 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 in-
tent to an applicant announcing an intention to
488
obligate, for a capital project under this section, 
an amount from future available budget author-
ity specified in law that is not more than the 
amount stipulated as the financial participation 
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 oper-
able segment. 
‘‘(B) TREATMENT.—The issuance of a letter 
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 administrative 
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-
489
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 para-
graph, to obligate an additional amount 
from future available budget authority spec-
ified in law. 
‘‘(ii) STATEMENT OF CONTINGENT COM-
MITMENT.—The agreement shall state that 
the contingent commitment is not an obli-
gation 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 eligi-
490
ble costs may not be more than the cost of 
the most favorable financing terms reason-
ably 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) COMPLETION OF OPERABLE SEG-
MENT.—The amount stipulated in an agree-
ment 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 
‘‘(ii) the terms of the work agreement 
will promote ultimate completion of the 
project more rapidly and at less cost.
491
‘‘(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 manage-
ment easier. 
‘‘(ii) 
PERIOD
COVERED.—A 
work 
agreement under this paragraph shall cover 
the period of time the Secretary considers 
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 
that eligible costs may not be more than the 
cost of the most favorable financing terms 
reasonably available for the project at the
492
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) 
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
AUTHORITY.—The 
total estimated amount of future obligations of 
the Government and contingent commitments to 
incur obligations covered by all outstanding let-
ters of intent, full funding grant agreements, and 
early systems work agreements under this sub-
section for major new fixed guideway capital 
projects may be not more than the greater of the 
amount authorized under sections 5338(b) and 
5338(h)(1) for such projects or an amount equiv-
493
alent to the last 3 fiscal years of funding allo-
cated 
under 
subsections 
(m)(1)(B) 
and 
(m)(2)(B)(ii) 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 a letter or agree-
ment. The total amount covered by new letters 
and contingent commitments included in full 
funding grant agreements and early systems 
work agreements for such projects may be not 
more than a limitation specified in law. 
‘‘(B) OTHER CONTINGENT COMMITMENT AU-
THORITY.—The total estimated amount of future 
obligations of the Government and contingent 
commitments to incur obligations covered by all 
project construction grant agreements and early 
system work agreements under this subsection for 
small capital projects described in subsection (d) 
may be not more than the greater of the amount 
allocated under subsection (m)(2)(A) for such 
projects or an amount equivalent to the last fis-
cal 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
494
projects that are not covered by an agreement. 
The total amount covered by new contingent 
commitments included in project construction 
grant agreements and early systems work agree-
ments for such projects may be not more than a 
limitation 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 Transpor-
tation Efficiency Act of 1991 (106 Stat. 2125) 
for the San Francisco BART to the Airport 
project for fiscal years 2002, 2003, 2004, 2005, 
and 2006 shall be charged against section 
3032(g)(2) of that Act. 
‘‘(D) APPROPRIATION REQUIRED.—An obli-
gation may be made under this subsection only 
when amounts are appropriated for the obliga-
tion. 
‘‘(5) NOTIFICATION OF CONGRESS.—At least 60 
days before issuing a letter of intent or entering into 
a full funding grant agreement or project construction 
grant agreement under this section, the Secretary 
shall notify, in writing, the Committee on Transpor-
495
tation and Infrastructure of the House of Representa-
tives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate of the proposed letter or 
agreement. The Secretary shall include with the noti-
fication 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 cap-
ital 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. 
‘‘(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.
496
‘‘(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 reduction 
of the remainder may be made only if a refund of a 
proportional amount of the grant of the Government 
is made at the same time. 
‘‘(5) LIMITATION ON APPLICABILITY.—This sub-
section does not apply to projects for which the Sec-
retary has entered into a full funding grant agree-
ment before the date of enactment of the Federal Pub-
lic Transportation Act of 2005. 
‘‘(h) FISCAL CAPACITY CONSIDERATIONS.—If the Sec-
retary gives priority consideration to financing projects 
that include more than the non-Government share required 
under subsection (g), the Secretary shall give equal consid-
eration 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 Secretary
497
shall submit to the Committee on Transportation and 
Infrastructure of the House of Representatives 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 Transportation 
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. 
‘‘(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
498
‘‘(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 
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 ex-
499
tent proceeds of the bonds are expended in car-
rying 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 Sec-
retary 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 (m)(2)(B)(iii), 
the Secretary shall consider the age of buses, bus fleets, re-
lated equipment, and bus-related facilities. 
‘‘(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
500
remain available for 3 fiscal years, including the fiscal year 
in which the amount is made available or appropriated. 
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 
‘‘(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 ap-
propriated under section 5338(h), for each of fiscal 
years 2005 through 2009 shall be allocated in the fis-
cal year as follows: 
‘‘(A) SMALL
CAPITAL
PROJECTS.—From 
funds appropriated under section 5338(h) for
501
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: 
‘‘(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 equip-
ment and to construct bus-related facilities, 
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)
502
and (2)(B)(ii), $10,400,000 shall be available in each 
of fiscal years 2004 through 2009 for new fixed guide-
way 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 available 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) 
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 cap-
ital project’ means a minimum operable segment of a cap-
503
ital project for a new fixed guideway system or extension 
to an existing fixed guideway system.’’. 
(e) CONFORMING AMENDMENTS.—
(1) CHAPTER ANALYSIS.—The analysis for chap-
ter 53 is amended by striking the item relating to sec-
tion 5309 and inserting the following:
‘‘5309. Capital investment grants.’’.
(2) SECTION 5328.—Section 5328(a) is amend-
ed—
(A) in paragraph (2) by striking ‘‘5309(e)’’ 
and inserting ‘‘5309(c)’’; and 
(B) in paragraph (4) by striking ‘‘under 
section 5309(o)(1)’’ and inserting ‘‘under section 
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 inserting 
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.—
504
‘‘(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 transpor-
tation 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—
‘‘(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 coordi-
nate services for elderly individuals and in-
dividuals 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 SERV-
ICES.—A public transportation capital project under
505
this section may include acquisition of public trans-
portation 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.—
‘‘(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 popu-
lation density of 10 or fewer persons per 
square mile, the Secretary shall multiply by 
a factor of 2 the number of elderly individ-
uals and individuals with disabilities in the
506
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 factor of 
1.25 the number of elderly individuals and 
individuals with disabilities in the State 
(as determined using the most recent decen-
nial United States Census). 
‘‘(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 apportioned 
to the State under section 5311(c) or 5336(a)(1), or 
both. Any funds transferred pursuant to this para-
graph shall be made available only for eligible 
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 described
507
in section 120(b)(1) of title 23, such percentage shall 
be increased in accordance with such section. 
‘‘(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 depreciation 
cash fund or reserve, a service agreement with a 
State or local social service agency or a private 
social service organization, or new capital; and 
‘‘(B) may be derived from amounts appro-
priated to or made available to a department or 
agency of the Government (other than the De-
partment of Transportation) that are eligible to 
be expended for transportation. 
‘‘(4) USE OF CERTAIN FUNDS.—For purposes of 
paragraph (3)(B), the prohibitions on the use of funds 
for 
matching 
requirements 
under 
section 
403(a)(5)(C)(vii) of the Social Security Act (42 
U.S.C. 603(a)(5)(C)(vii)) shall not apply to Federal 
or State funds to be used for transportation purposes. 
‘‘(d) GRANT REQUIREMENTS.—
508
‘‘(1) IN GENERAL.—A grant under this section 
shall be subject to all requirements of a grant under 
section 5307. A grant to a subrecipient under this sec-
tion shall be subject to such requirements to the extent 
the Secretary considers appropriate. 
‘‘(2) COORDINATION
WITH
NONPROFIT
PRO-
VIDERS.—A recipient that transfers funds to an ap-
portionment under section 5336(a)(1) pursuant to 
subsection (b)(2) shall certify that the project for 
which the funds are requested under this section has 
been coordinated with nonprofit providers of services. 
‘‘(3) PROJECT SELECTION AND PLANNING.—Be-
ginning in fiscal year 2007, a recipient of funds 
under this section shall certify that—
‘‘(A) the projects selected were derived from 
a locally developed, coordinated public transit-
human services transportation plan; and 
‘‘(B) the plan was developed through a 
process that included representatives of public, 
private, 
and 
nonprofit 
transportation 
and 
human services providers and participation by 
the public. 
‘‘(4) FAIR
AND
EQUITABLE
DISTRIBUTION.—A 
recipient of a grant under this section shall certify
509
that allocations of the grant to subrecipients are dis-
tributed on a fair and equitable basis. 
‘‘(e) STATE PROGRAM.—
‘‘(1) IN GENERAL.—Amounts made available to 
carry out this section may be used for transportation 
projects to assist in providing transportation services 
for elderly individuals and individuals with disabil-
ities that are included in a State program of projects. 
‘‘(2) SUBMISSION AND APPROVAL.—A program 
shall be submitted annually to the Secretary for ap-
proval and shall contain an assurance that the pro-
gram provides for maximum feasible coordination of 
transportation services assisted under this section 
with transportation services assisted by other Govern-
ment sources. 
‘‘(f) LEASING VEHICLES.—Vehicles acquired under 
this section may be leased to local governmental authorities 
to improve transportation services designed to meet the spe-
cial needs of elderly individuals and individuals with dis-
abilities.’’; and 
(3) by redesignating subsections (h) through (j) 
as subsections (g) through (i), respectively. 
(b) CONFORMING
AMENDMENT.—The analysis for 
chapter 53 is amended by striking the item relating to sec-
tion 5310 and inserting the following:
510
‘‘5310. Formula grants for special needs of elderly individuals and individuals 
with disabilities.’’.
SEC. 3012. FORMULA GRANTS FOR OTHER THAN URBAN-
IZED AREAS. 
(a) DEFINITIONS.—Section 5311(a) is amended to 
read as follows: 
‘‘(a) DEFINITIONS.—In this section, the following defi-
nitions apply: 
‘‘(1) RECIPIENT.—The term ‘recipient’ means a 
State that receives a Federal transit program grant 
directly from the Government. 
‘‘(2) SUBRECIPIENT.—The term ‘subrecipient’ 
means a State or local governmental authority, non-
profit organization, or operator of public transpor-
tation services that receives a Federal transit pro-
gram grant indirectly through a recipient.’’. 
(b) GENERAL AUTHORITY.—Section 5311(b) is amend-
ed to read as follows: 
‘‘(b) GENERAL AUTHORITY.—
‘‘(1) GRANTS.—Except as provided in paragraph 
(2), the Secretary may make grants to other than ur-
banized areas under this section for the following: 
‘‘(A) Public transportation capital projects. 
‘‘(B) Operating costs of equipment and fa-
cilities for use in public transportation.
511
‘‘(C) Acquisition of public transportation 
services, including service agreements with pri-
vate providers of public transportation services. 
‘‘(2) STATE PROGRAM.—
‘‘(A) IN GENERAL.—Amounts made avail-
able to carry out this section shall be used for 
projects included in a State program for public 
transportation projects, including service agree-
ments with private providers of public transpor-
tation. 
‘‘(B) SUBMISSION.—The program shall be 
submitted annually to the Secretary for ap-
proval. 
‘‘(C) APPROVAL.—The Secretary may ap-
prove the program only if the Secretary finds 
that the program provides a fair distribution of 
amounts in the State, including Indian reserva-
tions, and the maximum feasible coordination of 
public transportation service assisted under this 
section with transportation service assisted by 
other Federal sources. 
‘‘(3) RURAL TRANSPORTATION ASSISTANCE PRO-
GRAM.—
512
‘‘(A) IN
GENERAL.—The Secretary shall 
carry out a rural transportation assistance pro-
gram in other than urbanized areas. 
‘‘(B) GRANTS
AND
CONTRACTS.—In car-
rying out this paragraph, the Secretary may use 
not more than 2 percent of the amount made 
available to carry out this section to make grants 
and contracts for transportation research, tech-
nical assistance, training, and related support 
services in other than urbanized areas. 
‘‘(C) PROJECTS OF A NATIONAL SCOPE.—
Not more than 15 percent of the amounts avail-
able under subparagraph (B) may be used by the 
Secretary to carry out projects of a national 
scope, with the remaining balance provided to 
the States.’’. 
(c) APPORTIONMENTS.—Section 5311(c) is amended to 
read as follows: 
‘‘(c) APPORTIONMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall appor-
tion amounts made available to carry out this section 
among the States in the ratio that—
‘‘(A) the population of other than urbanized 
areas in each State, as shown by the most recent
513
Government decennial census of population; 
bears to 
‘‘(B) the population of all other than urban-
ized areas in the United States, as shown by that 
census. 
‘‘(2) LOW
DENSITY
ADJUSTMENT.—In admin-
istering the apportionment formula under paragraph 
(1)—
‘‘(A) in the case of a State with a popu-
lation density of 10 or fewer persons per square 
mile in other than urbanized areas of the State, 
the Secretary shall multiply by a factor of 1.5 
the population of such other than urbanized 
areas (as determined using the most recent de-
cennial United States Census); and 
‘‘(B) in the case of a State with a popu-
lation density of more than 10 but equal to or 
fewer than 12 persons per square mile in other 
than urbanized areas of the State, the Secretary 
shall multiply by a factor of 1.25 the population 
of such other than urbanized areas (as deter-
mined using the most recent decennial United 
States Census). 
‘‘(3) AVAILABILITY.—The amount apportioned to 
a State under this subsection may be obligated by the
514
State for 2 fiscal years after the fiscal year in which 
the amount is apportioned. An amount that is not ob-
ligated at the end of that period shall be reappor-
tioned among the States for the next fiscal year.’’. 
(d) USE FOR ADMINISTRATION, PLANNING, AND TECH-
NICAL ASSISTANCE.—Section 5311(e) is amended—
(1) in the subsection heading by inserting ‘‘, 
planning,’’ after ‘‘administration’’; 
(2) by striking ‘‘(1) The Secretary’’ and insert-
ing ‘‘The Secretary’’; 
(3) by striking paragraph (2); and 
(4) by striking ‘‘recipient’’ and inserting ‘‘sub-
recipient’’. 
(e) 
INTERCITY
BUS
TRANSPORTATION.—Section 
5311(f) is amended—
(1) in paragraph (1) by striking ‘‘after Sep-
tember 30, 1993,’’; and 
(2) in paragraph (2) by striking ‘‘A State’’ and 
inserting ‘‘After consultation with affected intercity 
bus service providers, a State’’. 
(f) 
GOVERNMENT’S
SHARE
OF
COSTS.—Section 
5311(g) is amended to read as follows: 
‘‘(g) GOVERNMENT’S SHARE OF COSTS.—
‘‘(1) CAPITAL PROJECTS.—A grant for a capital 
project under this section shall be for 80 percent of the
515
net capital costs of the project, as determined by the 
Secretary; except that in the case of a State described 
in section 120(b)(1) of title 23, such percentage shall 
be increased in accordance with such section. 
‘‘(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 net project 
costs—
‘‘(A) may be provided from an undistrib-
uted cash surplus, a replacement or depreciation 
cash fund or reserve, a service agreement with a 
State or local social service agency or a private 
social service organization, or new capital; and 
‘‘(B) may be derived from amounts appro-
priated to or made available to a department or 
agency of the Government (other than the De-
partment of Transportation) that are eligible to 
be expended for transportation. 
‘‘(4) USE OF CERTAIN FUNDS.—For purposes of 
paragraph (3)(B), the prohibitions on the use of funds 
for 
matching 
requirements 
under 
section 
403(a)(5)(C)(vii) of the Social Security Act (42
516
U.S.C. 603(a)(5)(C)(vii)) shall not apply to Federal 
or State funds to be used for transportation purposes. 
‘‘(5) LIMITATION ON OPERATING ASSISTANCE.—
A State carrying out a program of operating assist-
ance under this section may not limit the level or ex-
tent of use of the Government grant for the payment 
of operating expenses.’’. 
(g) RELATIONSHIP TO OTHER LAWS.—Section 5311 is 
amended—
(1) by striking subsection (h); and 
(2) by redesignating subsections (i) and (j) as 
subsections (h) and (i), respectively. 
(h) CORRECTION TO CHAPTER ANALYSIS.—The anal-
ysis for chapter 53 is amended by striking the item relating 
to section 5311 and inserting the following:
‘‘5311. Formula grants for other than urbanized areas.’’.
SEC. 3013. RESEARCH, DEVELOPMENT, DEMONSTRATION, 
AND DEPLOYMENT PROJECTS. 
(a) IN GENERAL.—Section 5312 is amended—
(1) in subsection (a)—
(A) by striking the first parenthetical 
phrase; 
(B) by striking ‘‘or contracts’’ and inserting 
‘‘, contracts, cooperative agreements, or other 
transactions’’;
517
(C) by striking ‘‘help reduce urban trans-
portation needs, improve mass transportation 
service,’’ and inserting ‘‘improve transportation 
service’’; 
(D) by striking ‘‘urban’’ each place it ap-
pears; and 
(E) 
by 
striking 
‘‘and 
demonstration 
projects’’ and inserting ‘‘, demonstration or de-
ployment projects, or evaluation of technology of 
national significance’’; 
(2) by striking subsections (b) and (c); 
(3) by redesignating subsections (d) and (e) as 
subsections (b) and (c), respectively; 
(4) in subsection (b)(2) (as so redesignated) by 
striking ‘‘other agreements’’ and inserting ‘‘other 
transactions’’; and 
(5) in subsection (c)(2) (as so redesignated) by 
striking ‘‘public and’’ and inserting ‘‘public or’’. 
(b) CONFORMING AMENDMENTS.—
(1) SECTION HEADING.—Section 5312 is amend-
ed by striking the section heading and inserting the 
following:
518
‘‘§ 5312. Research, development, demonstration, and 
deployment projects’’. 
(2) CHAPTER ANALYSIS.—The analysis for chap-
ter 53 is amended by striking the item relating to sec-
tion 5312 and inserting the following:
‘‘5312. Research, development, demonstration, and deployment projects.’’.
SEC. 3014. COOPERATIVE RESEARCH PROGRAM. 
(a) IN GENERAL.—Section 5313 is amended—
(1) in subsection (a) by striking ‘‘(1) The 
amounts made available under paragraphs (1) and 
(2)(C)(ii) of section 5338(d) of this title’’ and insert-
ing ‘‘The amounts made available under paragraphs 
(1)(C)(iv) and (2)(C) of section 5338(d)’’; 
(2) by striking subsection (b); 
(3) in subsection (a)(2) by striking ‘‘(2) The’’ 
and inserting ‘‘(b) FEDERAL ASSISTANCE.—The’’; 
and 
(4) in subsection (c) by striking ‘‘subsection (a) 
of’’. 
(b) CONFORMING AMENDMENTS.—
(1) IN GENERAL.—Section 5313 is amended by 
striking the section heading and inserting the fol-
lowing:
519
‘‘§ 5313. Cooperative research program’’. 
(2) CHAPTER ANALYSIS.—The analysis for chap-
ter 53 is amended by striking the item relating to sec-
tion 5313 and inserting the following:
‘‘5313. Cooperative research program.’’.
SEC. 3015. NATIONAL RESEARCH AND TECHNOLOGY PRO-
GRAMS. 
(a) IN GENERAL.—Section 5314 is amended—
(1) by striking the section heading and inserting 
the following: 
‘‘§ 5314. National research and technology programs’’; 
(2) in subsection (a)(1)—
(A) by striking ‘‘subsections (d) and (h)(7) 
of section 5338 of this title’’ and inserting ‘‘sec-
tion 5338(d)’’; 
(B) by striking ‘‘and contracts’’ and insert-
ing ‘‘, contracts, cooperative agreements, or other 
transactions’’; 
(C) by striking ‘‘5303–5306,’’; and 
(D) by striking ‘‘5317,’’; 
(3) in subsection (a)(2) by striking ‘‘Of the 
amounts’’ and all that follows through ‘‘$3,000,000 
to’’ and inserting ‘‘The Secretary shall’’; 
(4) by striking subsection (a)(4)(B); 
(5) by redesignating subsection (a)(4)(C) as sub-
section (a)(4)(B); and
520
(6) in subsection (b) by striking ‘‘or contract’’ 
and all that follows through ‘‘section,’’ and inserting 
‘‘, contract, cooperative agreement, or other trans-
action under subsection (a) or section 5312,’’. 
(b) CONFORMING
AMENDMENT.—The analysis for 
chapter 53 is amended by striking the item relating to sec-
tion 5314 and inserting the following:
‘‘5314. National research and technology programs.’’.
SEC. 3016. NATIONAL TRANSIT INSTITUTE. 
Section 5315 is amended—
(1) in subsection (a) by striking ‘‘public mass 
transportation’’ and inserting ‘‘public transpor-
tation’’; and 
(2) in subsection (d) by striking ‘‘mass’’ each 
place it appears. 
SEC. 3017. JOB ACCESS AND REVERSE COMMUTE FORMULA 
GRANTS. 
(a) IN GENERAL.—Chapter 53 is amended by insert-
ing after section 5315 the following: 
‘‘§ 5316. Job access and reverse commute formula 
grants 
‘‘(a) DEFINITIONS.—In this section, the following defi-
nitions apply: 
‘‘(1) ACCESS TO JOBS PROJECT.—The term ‘ac-
cess to jobs project’ means a project relating to the de-
velopment and maintenance of transportation services
521
designed to transport welfare recipients and eligible 
low-income individuals to and from jobs and activi-
ties related to their employment, including—
‘‘(A) transportation projects to finance 
planning, capital, and operating costs of pro-
viding access to jobs under this chapter; 
‘‘(B) promoting public transportation by 
low-income workers, including the use of public 
transportation by workers with nontraditional 
work schedules; 
‘‘(C) promoting the use of transit vouchers 
for welfare recipients and eligible low-income in-
dividuals; and 
‘‘(D) promoting the use of employer-pro-
vided transportation, including the transit pass 
benefit program under section 132 of the Inter-
nal Revenue Code of 1986. 
‘‘(2) ELIGIBLE
LOW-INCOME
INDIVIDUAL.—The 
term ‘eligible low-income individual’ means an indi-
vidual whose family income is at or below 150 per-
cent of the poverty line (as that term is defined in 
section 673(2) of the Community Services Block 
Grant Act (42 U.S.C. 9902(2)), including any revi-
sion required by that section) for a family of the size 
involved.
522
‘‘(3) RECIPIENT.—The term ‘recipient’ means a 
designated recipient (as defined in section 5307(a)(2)) 
and a State that receives a grant under this section 
directly. 
‘‘(4) REVERSE
COMMUTE
PROJECT.—The term 
‘reverse commute project’ means a public transpor-
tation project designed to transport residents of ur-
banized areas and other than urbanized areas to sub-
urban employment opportunities, including any 
projects to—
‘‘(A) subsidize the costs associated with add-
ing reverse commute bus, train, carpool, van 
routes, or service from urbanized areas and other 
than urbanized areas to suburban workplaces; 
‘‘(B) subsidize the purchase or lease by a 
nonprofit organization or public agency of a van 
or bus dedicated to shuttling employees from 
their residences to a suburban workplace; or 
‘‘(C) otherwise facilitate the provision of 
public transportation services to suburban em-
ployment opportunities. 
‘‘(5) SUBRECIPIENT.—The term ‘subrecipient’ 
means a State or local governmental authority, non-
profit organization, or operator of public transpor-
523
tation services that receives a grant under this section 
indirectly through a recipient. 
‘‘(6) WELFARE RECIPIENT.—The term ‘welfare 
recipient’ means an individual who has received as-
sistance under a State or tribal program funded 
under part A of title IV of the Social Security Act at 
any time during the 3-year period before the date on 
which the applicant applies for a grant under this 
section. 
‘‘(b) GENERAL AUTHORITY.—
‘‘(1) GRANTS.—The Secretary may make grants 
under this section to a recipient for access to jobs and 
reverse commute projects carried out by the recipient 
or a subrecipient. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—A recipient 
may use not more than 10 percent of the amounts ap-
portioned to the recipient under this section to ad-
minister, plan, and provide technical assistance for a 
project funded under this section. 
‘‘(c) APPORTIONMENTS.—
‘‘(1) FORMULA.—The Secretary shall apportion 
amounts made available to carry out this section as 
follows: 
‘‘(A) 60 percent of the funds shall be appor-
tioned among designated recipients (as defined
524
in section 5307(a)(2)) for urbanized areas with 
a population of 200,000 or more in the ratio 
that—
‘‘(i) the number of eligible low-income 
individuals and welfare recipients in each 
such urbanized area; bears to 
‘‘(ii) the number of eligible low-income 
individuals and welfare recipients in all 
such urbanized areas. 
‘‘(B) 20 percent of the funds shall be appor-
tioned among the States in the ratio that—
‘‘(i) the number of eligible low-income 
individuals and welfare recipients in ur-
banized areas with a population of less than 
200,000 in each State; bears to 
‘‘(ii) the number of eligible low-income 
individuals and welfare recipients in ur-
banized areas with a population of less than 
200,000 in all States. 
‘‘(C) 20 percent of the funds shall be appor-
tioned among the States in the ratio that—
‘‘(i) the number of eligible low-income 
individuals and welfare recipients in other 
than urbanized areas in each State; bears to
525
‘‘(ii) the number of eligible low-income 
individuals and welfare recipients in other 
than urbanized areas in all States. 
‘‘(2) USE OF APPORTIONED FUNDS.—Except as 
provided in paragraph (3)—
‘‘(A) funds apportioned under paragraph 
(1)(A) shall be used for projects serving urban-
ized areas with a population of 200,000 or more; 
‘‘(B) funds apportioned under paragraph 
(1)(B) shall be used for projects serving urban-
ized areas with a population of less than 
200,000; and 
‘‘(C) funds apportioned under paragraph 
(1)(C) shall be used for projects serving other 
than urbanized areas. 
‘‘(3) EXCEPTIONS.—A State may use funds ap-
portioned under paragraphs (1)(B) and (1)(C)—
‘‘(A) for projects serving areas other than 
the area specified in paragraph (2)(B) or (2)(C), 
as the case may be, if the Governor of the State 
certifies that all of the objectives of this section 
are being met in the specified area; or 
‘‘(B) for projects anywhere in the State if 
the State has established a statewide program for 
meeting the objectives of this section.
526
‘‘(d) COMPETITIVE PROCESS FOR GRANTS TO SUB-
RECIPIENTS.—
‘‘(1) AREAWIDE SOLICITATIONS.—A recipient of 
funds apportioned under subsection (c)(1)(A) shall 
conduct, in cooperation with the appropriate metro-
politan planning organization, an areawide solicita-
tion for applications for grants to the recipient and 
subrecipients under this section. 
‘‘(2) STATEWIDE SOLICITATION.—A recipient of 
funds apportioned under subsection (c)(1)(B) or 
(c)(1)(C) shall conduct a statewide solicitation for ap-
plications for grants to the recipient and subrecipi-
ents under this section. 
‘‘(3) APPLICATION.—Recipients and subrecipi-
ents seeking to receive a grant from funds apportioned 
under subsection (c) shall submit to the recipient an 
application in the form and in accordance with such 
requirements as the recipient shall establish. 
‘‘(4) GRANT AWARDS.—The recipient shall award 
grants under paragraphs (1) and (2) on a competitive 
basis. 
‘‘(e) TRANSFERS.—
‘‘(1) IN GENERAL.—A State may transfer any 
funds apportioned to it under subsection (c)(1)(B) or
527
(c)(1)(C), or both, to an apportionment under section 
5311(c) or 5336, or both. 
‘‘(2) LIMITED TO ELIGIBLE PROJECTS.—Any ap-
portionment transferred under this subsection shall be 
made available only for eligible job access and reverse 
commute projects as described in this section. 
‘‘(3) CONSULTATION.—A State may make a 
transfer of an amount under this subsection only after 
consulting with responsible local officials and publicly 
owned operators of public transportation in each area 
for which the amount originally was awarded under 
subsection (d)(4). 
‘‘(f) GRANT REQUIREMENTS.—
‘‘(1) IN GENERAL.—A grant under this section 
shall be subject to the requirements of section 5307. 
‘‘(2) FAIR
AND
EQUITABLE
DISTRIBUTION.—A 
recipient of a grant under this section shall certify to 
the Secretary that allocations of the grant to sub-
recipients are distributed on a fair and equitable 
basis. 
‘‘(g) COORDINATION.—
‘‘(1) IN GENERAL.—The Secretary shall coordi-
nate activities under this section with related activi-
ties under programs of other Federal departments and 
agencies.
528
‘‘(2) WITH
NONPROFIT
PROVIDERS.—A State 
that transfers funds to an apportionment under sec-
tion 5336 pursuant to subsection (e) shall certify to 
the Secretary that any project for which the funds are 
requested under this section has been coordinated with 
nonprofit providers of services. 
‘‘(3) PROJECT SELECTION AND PLANNING.—A re-
cipient of funds under this section shall certify to the 
Secretary that—
‘‘(A) the projects selected were derived from 
a locally developed, coordinated public transit-
human services transportation plan; and 
‘‘(B) the plan was developed through a 
process that included representatives of public, 
private, 
and 
nonprofit 
transportation 
and 
human services providers and participation by 
the public. 
‘‘(h) GOVERNMENT’S SHARE OF COSTS.—
‘‘(1) CAPITAL PROJECTS.—A grant for a capital 
project under this section may not exceed 80 percent 
of the net capital costs of the project, as determined 
by the Secretary. 
‘‘(2) OPERATING
ASSISTANCE.—A grant made 
under this section for operating assistance may not
529
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 depreciation 
cash fund or reserve, a service agreement with a 
State or local social service agency or a private 
social service organization, or new capital; and 
‘‘(B) may be derived from amounts appro-
priated to or made available to a department or 
agency of the Government (other than the De-
partment of Transportation) that are eligible to 
be expended for transportation. 
‘‘(4) USE OF CERTAIN FUNDS.—For purposes of 
paragraph (3)(B), the prohibitions on the use of funds 
for 
matching 
requirements 
under 
section 
403(a)(5)(C)(vii) of the Social Security Act (42 
U.S.C. 603(a)(5)(C)(vii)) shall not apply to Federal 
or State funds to be used for transportation purposes. 
‘‘(5) LIMITATION ON OPERATING ASSISTANCE.—
A recipient carrying out a program of operating as-
sistance under this section may not limit the level or 
extent of use of the Government grant for the payment 
of operating expenses.
530
‘‘(i) PROGRAM EVALUATION.—
‘‘(1) COMPTROLLER
GENERAL.—Beginning 1 
year after the date of enactment of the Federal Public 
Transportation Act of 2005, and every 2 years there-
after, the Comptroller General shall—
‘‘(A) conduct a study to evaluate the grant 
program authorized by this section; and 
‘‘(B) transmit to the Committee on Trans-
portation and Infrastructure of the House of 
Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate a re-
port describing the results of the study under 
subparagraph (A). 
‘‘(2) DEPARTMENT
OF
TRANSPORTATION.—Not 
later than 3 years after the date of enactment of Fed-
eral Public Transportation Act of 2005, the Secretary 
shall—
‘‘(A) conduct a study to evaluate the effec-
tiveness of the grant program authorized by this 
section and the effectiveness of recipients making 
grants to subrecipients under this section; and 
‘‘(B) transmit to the committees referred to 
in paragraph (1)(B) a report describing the re-
sults of the study under subparagraph (A).’’.
531
(b) CONFORMING
AMENDMENT.—The analysis for 
chapter 53 is amended by inserting after the item relating 
to section 5315 the following:
‘‘5316. Job access and reverse commute formula grants.’’.
(c) REPEAL.—Section 3037 of the Transportation Eq-
uity Act for the 21st Century (49 U.S.C. 5309 note; 112 
Stat. 387) is repealed. 
SEC. 3018. NEW FREEDOM PROGRAM. 
(a) IN GENERAL.—Chapter 53 is further amended by 
inserting after section 5316 the following: 
‘‘§ 5317. New Freedom program 
‘‘(a) DEFINITIONS.—In this section, the following defi-
nitions apply: 
‘‘(1) RECIPIENT.—The term ‘recipient’ means a 
designated recipient (as defined in section 5307(a)(2)) 
and a State that receives a grant under this section 
directly. 
‘‘(2) SUBRECIPIENT.—The term ‘subrecipient’ 
means a State or local governmental authority, non-
profit organization, or operator of public transpor-
tation services that receives a grant under this section 
indirectly through a recipient. 
‘‘(b) GENERAL AUTHORITY.—
‘‘(1) GRANTS.—The Secretary may make grants 
under this section to a recipient for new public trans-
portation services and public transportation alter-
532
natives beyond those required by the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) that 
assist individuals with disabilities with transpor-
tation, including transportation to and from jobs and 
employment support services. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—A recipient 
may use not more than 10 percent of the amounts ap-
portioned to the recipient under this section to ad-
minister, plan, and provide technical assistance for a 
project funded under this section. 
‘‘(c) APPORTIONMENTS.—
‘‘(1) FORMULA.—The Secretary shall apportion 
amounts made available to carry out this section as 
follows: 
‘‘(A) 60 percent of the funds shall be appor-
tioned among designated recipients (as defined 
in section 5307(a)(2)) for urbanized areas with 
a population of 200,000 or more in the ratio 
that—
‘‘(i) the number of individuals with 
disabilities in each such urbanized area; 
bears to 
‘‘(ii) the number of individuals with 
disabilities in all such urbanized areas.