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PROBLEM: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Shareholder Empowerment Act of
2009''.

SEC. 2. MAJORITY VOTING FOR DIRECTORS.

The Securities Exchange Act of 1934 is amended by adding after
section 16 the following new section:

''SEC. 16A. ELECTION OF DIRECTORS.

''(a) Standards Relating to Election of Directors.--
''(1) Commission rules.--Not later than 270 days after the
date of enactment of this section, the Commission shall, by
rule, direct the national securities exchanges and national
securities associations to prohibit the listing of any security
of an issuer that is not in compliance with the requirements of
any portion of paragraph (2). Such rules shall provide for
appropriate procedures for an issuer to have an opportunity to
cure any defects that would be the basis for such a prohibition
before the imposition of such prohibition.
''(2) Standards for election of directors.--
''(A) Majority voting.--Each issuer shall, to the
extent permitted under State law, provide in its
governing documents that--
''(i) directors in uncontested elections
shall be elected by a majority of the votes
cast as to each nominee; and
''(ii) in contested elections where the
number of nominees exceeds the number of
directors to be elected, directors shall be
elected by the vote of a plurality of the
shares represented at any meeting and entitled
to vote on the election of directors.
''(B) Resignation policy.--Each issuer shall also,
to the extent permitted under State law, adopt
procedures under which any director who is not elected
to a new term shall offer to tender his or her
resignation to the board of directors. The board of
directors, with the advice of a committee of the board
if such a committee has been established for that
purpose, shall determine what action should be taken as
to that resignation and shall publicly disclose its
decision and the rationale for that decision within a
reasonable period after certification of the election
results.
''(b) Shareholder Access to the Proxy in Director Elections.--
''(1) Rule.--Not later than 270 days after the date of
enactment of this section, the Commission shall, by rule,
require that in proxy statements and proxies, authorizations or
consents prepared by an issuer pursuant to section 14, the
issuer shall identify and provide security holders with an
opportunity to vote on candidates for the board of directors
who have been nominated by holders in the aggregate at least 1
percent of the issuer's voting securities for at least 2 years
prior to a record date established by the issuer for a meeting
of security holders.
''(2) Application.--This rule shall specify the information
to be provided to an issuer by security holders who nominate
candidates for inclusion in an issuer's proxy materials under
this section and shall require the issuer to disclose
information about such candidates in the issuer's proxy
materials to the same extent that information must be disclosed
about candidates nominated by the issuer. This rule shall apply
only when eligible security holders have nominated fewer than a
majority of the number of directors then authorized to serve on
the board of directors, and the rule shall specify procedures
to be followed if different security holders nominate
candidates sufficient to constitute a majority of the board of
directors.
''(3) Effective date.--The rule shall apply to proxy voting
for meetings of security holders held on or after January 1,
2010, except to the extent that a meeting was originally
scheduled to be held in 2009, but was adjourned to 2010.
''(c) Broker Discretionary Voting in Uncontested Director
Elections.--Not later than 270 days after the date of enactment of this
section, the Commission shall by, rule, require that a broker shall not
be allowed to vote securities on an uncontested election to the board
of directors of an issuer to the extent that the beneficial owner of
those securities has not provided specific instructions to the broker.
The rule shall apply to proxy voting for meetings of security holders
held on or after January 1, 2010, except to the extent that a meeting
was originally scheduled to be held in 2009, but was adjourned to 2010.
''(d) Independent Chairman of the Board of Directors.--
''(1) Commission rules.--Not later than 270 days after the
date of enactment of this section, the Commission shall, by
rule, direct the national securities exchanges and national
securities associations to prohibit the listing of any security
of an issuer that is not in compliance with the requirements of
any portion of paragraph (2). Such rules shall provide for
appropriate procedures for an issuer to have an opportunity to
cure any defects that would be the basis for such a prohibition
before the imposition of such prohibition.
''(2) Independent chairman of the board of directors.--Each
issuer shall provide in its governing documents or a public
statement of corporate policy that, to the extent possible and
consistent with the issuer's status as a publicly traded
company, the chairman of the board of directors shall be an
independent director who has not previously served as an
executive officer of the issuer. Such rule shall be implemented
with due regard for contracts in existence on the date of
enactment of this section. For purposes of this subsection, an
'independent director' shall be one who during the preceding 5
years has not been--
''(A) employed by the issuer in an executive
capacity;
''(B) an employee, director or owner greater than
20 percent of the beneficial shares of a firm that is a
paid adviser or consultant to the issuer;
''(C) employed by a significant customer or
supplier of the issuer;
''(D) a party to a personal services contract with
the issuer, as well as with the issuer's Chair, chief
executive officer, or other senior executive officer;
''(E) an employee, officer or director of a
foundation, university or other non-profit organization
that receives the greater of $100,000 or 1 percent of
total annual donations from the issuer;
''(F) a relative of an executive of the issuer;
''(G) part of an interlocking directorate in which
the issuer's chief executive officer or another
executive serves on the board of another issuer
employing that director; and
''(H) engaged in any other relationship with the
issuer or senior executives that the Commission
determines would not render that director an
independent director.''.

SEC. 3. EXECUTIVE COMPENSATION REQUIREMENTS.

The Securities Exchange Act of 1934 is further amended by adding
after the section 16A, as added by section 2, the following new section

''SEC. 16B. EXECUTIVE COMPENSATION REQUIREMENTS.

''(a) Shareholder Approval of Executive Compensation.--
''(1) Annual shareholder vote on executive compensation.--
Any proxy or consent or authorization for an annual or other
meeting of an issuer shall permit a separate vote by
shareholders to approve the compensation of senior executive
officers, as disclosed pursuant to the compensation disclosure
rules of the Commission (which disclosure shall include the
compensation discussion and analysis, the compensation tables,
and any related material).
''(2) Non-binding nature of vote.--A shareholder vote
described in paragraph (1) shall not be binding on the board of
directors of an issuer and may not be construed as overruling a
decision by such board, nor to create or imply any additional
fiduciary duty by such board, nor shall such vote be construed
to restrict or limit the ability of security holders to make
proposals for inclusion in proxy materials related to executive
compensation.
''(3) Deadline for rules.--Not later than 1 year after the
date of enactment of this section, the Commission shall issue
any final rules and regulations required by this section.
''(4) Exception.--This provision shall not apply to any
issuer who is subject to a similar recoupment requirement under
another provision of Federal law.
''(b) Independent Compensation Advisers.--
''(1) Requirement.--Not later than 1 year after the date of
enactment of this section, the Commission shall, by rule,
require that if an issuer's board of directors or a committee
thereof retains an individual adviser or advisory firm in
conjunction with negotiating employment contracts or
compensation agreements with the issuer's executives, the
individual adviser and his or her firm shall be independent of
the issuer, its executives and directors, and shall report
solely to the board of directors or the committee thereof
responsible for executive compensation. The rule shall further
require that issuers shall not agree to indemnify or limit the
liability of compensation advisers or advisory firms.
''(2) Determination.--In determining the extent to which an
adviser or advisory firm is independent of an issuer within the
meaning of this section, the Commission shall consider such
matters as--
''(A) the extent (as measured by annual fees and
other relevant metrics) to which an individual adviser
or advisory firm provides services in conjunction with
negotiating employment contracts or compensation
agreements with the issuer's executives, as compared to
other services that the adviser or advisory firm
provides to the issuer or executives;
''(B) whether individual advisers are permitted to
hold equity and do hold equity in the issuer; and
''(C) whether an advisory firm's incentive
compensation plan links the compensation of individual
advisers to the advisory firm's provision of other
services to the issuer.
''(c) Clawbacks of Unearned Performance-Based Pay.--
''(1) Commission rules.--Not later than 270 days after the
date of enactment of this section, the Commission shall, by
rule, direct the national securities exchanges and national
securities associations to prohibit the listing of any security
of an issuer that is not in compliance with the requirements of
any portion of paragraph (2). Such rules shall provide for
appropriate procedures for an issuer to have an opportunity to
cure any defects that would be the basis for such a prohibition
before the imposition of such prohibition.
''(2) Recoupment of unearned compensation.--An issuer's
board of directors or a committee thereof shall develop and
disclose a policy for reviewing unearned bonus payments,
incentive payments, or equity payments that were awarded to
executive officers owing to fraud, financial results that
require restatement, or some other cause. The policy should
require recovery or cancellation of any unearned payments to
the extent that it is feasible and practical to do so.
''(3) Exception.--This provision shall not apply to any
issuer who is subject to a similar recoupment requirement under
another provision of Federal law.
''(d) Severance Agreements Tied to Performance.--
''(1) Commission rules.--Not later than 270 days after the
date of enactment of this section, the Commission shall, by
rule, direct the national securities exchanges and national
securities associations to prohibit the listing of any security
of an issuer that is not in compliance with the requirements of
any portion of paragraph (2). Such rules shall provide for
appropriate procedures for an issuer to have an opportunity to
cure any defects that would be the basis for such a prohibition
before the imposition of such prohibition.
''(2) Severance agreements tied to performance.--An
issuer's board of directors or a committee thereof shall not
enter into agreements providing for severance payments to a
senior executive officer who is terminated because of poor
performance as an executive, as determined by the board of
directors. To the extent that an issuer is able to terminate a
senior executive officer for cause, poor performance by the
executive, as determined by the board of directors, shall be
considered as one such cause. The rule shall be implemented
with due regard for contracts in existence on the date of
enactment of this section.
''(e) Improved Disclosure of Compensation Targets.--Not later than
1 year after the date of enactment of this section, the Commission
shall, by rule, require additional disclosure of specific performance
targets that are used by issuers to determine a senior executive
officer's eligibility for bonuses, equity and incentive compensation.
The Commission shall consider methods to improve disclosure in
situations when it is claimed that disclosure would result in
competitive harm to the issuer, including, requirements that the issuer
describe its past experience with similar target levels, disclose any
inconsistencies between compensation targets and targets set in other
contexts, submit a request for confidential treatment of the
performance targets under Commission rules, or disclose the data after
disclosure would no longer be considered competitively harmful.''.

SOLUTION: Shareholder Empowerment Act of 2009 - Amends the Securities Exchange Act of 1934 to direct the Securities and Exchange Commission (SEC) to prohibit national securities exchanges and associations from listing the securities of any issuer unless, to the extent permitted by state law, such issuer requires: (1) the election of directors who receive the majority of votes in uncontested elections or a plurality of votes in contested elections; and (2) directors who are not reelected to offer to tender their resignations.

Directs the SEC to: (1) require issuers to identify and provide security holders with an opportunity to vote on director candidates who have been nominated by holders of at least 1% of the issuer's voting securities for at least two years, provided security holders have nominated fewer than a majority of the directors then authorized to serve; (2) prohibit brokers from voting securities on an uncontested election to the board of directors without having received specific instructions from the securities' beneficial owners; and (3) requires listed issuers, to the extent possible, to have an independent chairman of their board of directors who has not served as an executive of the issuer.

Requires any proxy or consent or authorization for an annual or other meeting of a securities issuer to permit a separate shareholder vote on executive compensation, though such vote shall not be binding on its board of directors.

Directs the SEC to direct the national securities exchanges and national securities associations to prohibit: (1) issuers from retaining advisors in negotiating executive employment or compensation agreements that are not independent or are protected from liability by such issuers; (2) the listing of issuers that do not have a (clawback) policy of recovering executive payments that were unearned due to fraud, faulty financial statements, or some other cause; and (3) the listing of issuers that provide severance payments to senior executives who are terminated for poor performance.

Directs the SEC to require additional disclosure of specific performance targets issuers use in determining a senior executive's eligibility for bonuses, equity, and incentive compensation.

PROBLEM: SECTION 1. ESTABLISHMENT OF NEW FASHION MODEL NONIMMIGRANT
CLASSIFICATION.

(a) In General.--
(1) New classification.--Section 101(a)(15)(P) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(P)) is
amended--
(A) in clause (iii), by striking ''or'' at the end;
(B) in clause (iv), by striking ''clause (i), (ii),
or (iii)'' and inserting ''clause (i), (ii), (iii), or
(iv)'';
(C) by redesignating clause (iv) as clause (v); and
(D) by inserting after clause (iii) the following:
''(iv) is a fashion model who is of distinguished
merit and ability and who is seeking to enter the
United States temporarily to perform fashion modeling
services that involve events or productions which have
a distinguished reputation or that are performed for an
organization or establishment that has a distinguished
reputation for, or a record of, utilizing prominent
modeling talent; or''.
(2) Authorized period of stay.--Section 214(a)(2)(B) of the
Immigration and Nationality Act (8 U.S.C. 1184(a)(2)(B)) is
amended in the second sentence--
(A) by inserting ''or fashion models'' after
''athletes''; and
(B) by inserting ''or fashion model'' after
''athlete''.
(3) Numerical limitation.--Section 214(c)(4) of the
Immigration and Nationality Act (8 U.S.C. 1184(c)(4)) is
amended by adding at the end the following:
''(I)(i) The total number of aliens who may be issued visas or
otherwise provided nonimmigrant status during any fiscal year under
section 101(a)(15)(P)(iv) may not exceed 1,000.
''(ii) The numerical limitation established by clause (i) shall
only apply to principal aliens and not to the spouses or children of
such aliens.
''(iii) An alien who has already been counted toward the limitation
established by clause (i) shall not be counted again during the same
period of stay or authorized extension under subsection (a)(2)(B),
irrespective of whether there is a change in petitioner under
subparagraph (C).''.
(4) Consultation.--
(A) In general.--Section 214(c)(4)(D) of the
Immigration and Nationality Act (8 U.S.C.
1184(c)(4)(D)) is amended by striking ''clause (i) or
(iii)'' and inserting ''clause (i), (iii), or (iv)''.
(B) Advisory opinion.--Section 214(c)(6)(A)(iii) of
the Immigration and Nationality Act (8 U.S.C.
1184(c)(6)(A)(iii)) is amended--
(i) by striking ''section 101(a)(15)(P)(i)
or 101(a)(15)(P)(iii),'' and inserting ''clause
(i), (iii), or (iv) of section
101(a)(15)(P),''; and
(ii) by striking ''of athletics or
entertainment''.
(C) Expedited procedures.--Section 214(c)(6)(E)(i)
of the Immigration and Nationality Act (8 U.S.C.
1184(c)(6)(E)(i)) is amended by striking ''artists or
entertainers'' and inserting ''artists, entertainers,
or fashion models''.
(b) Elimination of H-1B Classification for Fashion Models.--Section
101(a)(15)(H)(i)(b) of the Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(H)(i)(b)) is amended--
(1) by striking ''or as a fashion model''; and
(2) by striking ''or, in the case of a fashion model, is of
distinguished merit and ability''.
(c) Effective Date and Implementation.--
(1) In general.--The amendments made by this section shall
take effect on the date of the enactment of this Act.
(2) Regulations, guidelines, and precedents.--The
regulations, guidelines and precedents in effect on the date of
the enactment of this Act for the adjudication of petitions for
fashion models under section 101(a)(15)(H)(i)(b) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(H)(i)(b)), shall be applied to petitions for
fashion models under section 101(a)(15)(P)(iv) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(P)(iv)),
as added by this Act, except to the extent modified by the
Secretary of Homeland Security through final regulations (not
through interim regulations) promulgated in accordance with
subchapter II of chapter 5, and chapter 7, of title 5, United
States Code (commonly known as the ''Administrative Procedure
Act'').
(3) Construction.--Nothing in this section shall be
construed as preventing an alien who is a fashion model from
obtaining nonimmigrant status under section 101(a)(15)(O)(i) of
the Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(O)(i)) if such alien is otherwise qualified for
such status.
(4) Treatment of pending petitions.--Petitions filed on
behalf of fashion models under section 101(a)(15)(H)(i)(b) of
the Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(H)(i)(b)) that are pending on the date of the
enactment of this Act shall be treated as if they had been
filed under section 101(a)(15)(P)(iv) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(15)(P)(iv)), as added by this
Act.

SOLUTION: Amends the Immigration and Nationality Act to replace the current nonimmigrant (H-1B) visa category for fashion models with a new (P-4) visa category.

Defines such category as a fashion model who is of distinguished merit and ability and who is seeking to enter the United States temporarily to perform fashion modeling services that involve events or productions which have a distinguished reputation or that are performed for an organization or establishment that has a distinguished reputation for, or a record of, utilizing prominent modeling talent.

Provides that such entrants may not: (1) exceed 1,000 in any fiscal year, not including accompanying spouses or children; and (2) stay in the United States for more than 10 years (initial five-year period with one five-year extension).

Makes an employer petition for such alien models eligible for expedited consultation procedures.

States that applicable H-1B regulations, guidelines, and precedents in effect on the date of the enactment of this Act for the adjudication of fashion model petitions shall be applied to P-4 petitions, except to the extent modified by the Secretary of Homeland Security.

PROBLEM: SECTION 1. SHORT TITLE.

This Act may be cited as the ''State Transportation Flexibility
Act''.

SEC. 2. DIRECT FEDERAL-AID HIGHWAY PROGRAM.

(a) In General.--Chapter 1 of title 23, United States Code, is
amended by adding at the end the following:
''Sec. 171. Direct Federal-aid highway program
''(a) Election by State Not To Participate.--Notwithstanding any
other provision of law and in accordance with this section, a State may
elect not to participate in any Federal program relating to highways,
including a Federal highway program under the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(Public Law 109-59; 119 Stat. 1144), the Moving Ahead for Progress in
the 21st Century Act (Public Law 112-141; 126 Stat. 405), the Fixing
America's Surface Transportation Act (Public Law 114-94; 129 Stat.
1312), this title, or title 49.
''(b) Direct Federal-Aid Highway Program.--
''(1) In general.--The Secretary shall carry out a direct
Federal-aid highway program (referred to in this section as the
'program') in accordance with the requirements of this section
under which the legislature of a State may elect, not fewer
than 90 days before the beginning of a fiscal year--
''(A) to waive the right of the State to receive
amounts apportioned or allocated to the State under
this chapter for the fiscal year to which the election
relates; and
''(B) to receive an amount for that fiscal year
that is determined in accordance with subsection (e)
for that fiscal year.
''(2) Effect.--On making an election under paragraph (1), a
State--
''(A) assumes all Federal obligations relating to
each program that is the subject of the election; and
''(B) shall fulfill those obligations using the
amounts transferred to the State under subsection (e).
''(3) Eligible years.--A State may make an election with
respect to fiscal year 2019 and any fiscal year thereafter.
''(c) State Responsibility.--
''(1) In general.--The Governor of a State making an
election under subsection (b) shall--
''(A) agree to maintain the Interstate System in
accordance with the current Interstate System program;
''(B) submit a plan to the Secretary describing--
''(i) the purposes, projects, and uses to
which amounts received under the program will
be put; and
''(ii) which programmatic requirements of
this title the State elects to continue;
''(C) agree to obligate or expend amounts received
under the program exclusively for projects that would
be eligible for funding under section 133(b) if the
State was not participating in the program; and
''(D) agree--
''(i) to report annually to the Secretary
on the use of amounts received under the
program; and
''(ii) to make the report available to the
public in an easily accessible format.
''(2) No federal limitation on use of funds.--Except as
provided in paragraph (1), the expenditure or obligation of
funds received by a State under the program shall not be
subject to any Federal requirement under this title (except for
this section), title 49, or any other Federal law (including
regulations).
''(3) Election irrevocable.--An election under subsection
(b) shall be irrevocable during the applicable fiscal year.
''(d) Effect on Preexisting Commitments.--An election under
subsection (b) shall not affect any responsibility or commitment of the
State under this title for any fiscal year with respect to--
''(1) a project or program funded under this title (other
than under this section); or
''(2) any project or program funded under this title in any
fiscal year for which an election under subsection (b) is not
in effect.
''(e) Transfers.--
''(1) In general.--The amount to be transferred to a State
under the program for a fiscal year shall be the portion of the
taxes appropriated to the Highway Trust Fund (other than for
the Mass Transit Account) for that fiscal year that is
attributable to highway users in that State during that fiscal
year, reduced by a pro rata share withheld by the Secretary to
fund contract authority for programs of the National Highway
Traffic Safety Administration and the Federal Motor Carrier
Safety Administration.
''(2) Transfers under program.--
''(A) In general.--Transfers under the program--
''(i) shall be made at the same time as
deposits to the Highway Trust Fund are made by
the Secretary of the Treasury; and
''(ii) shall--
''(I) be made on the basis of
estimates by the Secretary, in
consultation with the Secretary of the
Treasury, based on the most recent data
available; and
''(II) include proper adjustments
in amounts subsequently transferred to
the extent prior estimates were in
excess of, or less than, the amounts
required to be transferred.
''(B) Limitation.--
''(i) In general.--An adjustment under
subparagraph (A)(ii)(II) to any transfer may
not exceed 5 percent of the transferred amount
to which the adjustment relates.
''(ii) Adjustment greater than 5 percent.--
If the adjustment required under subparagraph
(A)(ii)(II) exceeds the percentage described in
clause (i), the excess shall be taken into
account in making subsequent adjustments under
subparagraph (A)(ii)(II).
''(f) Application With Other Authority.--Any contract authority
under this chapter (and any obligation limitation) authorized for a
State for a fiscal year for which an election by that State is in
effect under subsection (b)--
''(1) shall be rescinded or canceled; and
''(2) shall not be reallocated or distributed to any other
State under this chapter.
''(g) Maintenance of Effort.--
''(1) In general.--Not later than 30 days after the date on
which an amount is distributed to a State or State agency under
the program, the Governor of the State shall certify to the
Secretary that the State will maintain the effort of the State
with regard to State funding for the types of projects that are
funded by the amounts distributed.
''(2) Amounts.--As part of the certification under
paragraph (1), the Governor shall submit to the Secretary a
statement that identifies the amount of funds the State plans
to expend from State sources during the covered period for the
types of projects that are funded by the amounts.
''(h) Treatment of General Revenues.--For purposes of this section,
any general revenue funds appropriated to the Highway Trust Fund shall
be transferred to a State under the program in the manner described in
subsection (e)(1).''.
(b) Conforming Amendment.--The analysis for chapter 1 of title 23,
United States Code, is amended by inserting after the item relating to
section 170 the following:

''171. Direct Federal-aid highway program.''.

SEC. 3. ALTERNATIVE FUNDING OF PUBLIC TRANSPORTATION PROGRAMS.

(a) In General.--Chapter 53 of title 49, United States Code, is
amended by adding at the end the following:
''Sec. 5341. Alternative funding of public transportation programs
''(a) Definitions.--In this section--
''(1) the term 'alternative funding program' means the
program established under subsection (c);
''(2) the term 'covered program' means a Federal public
transportation program that is funded using amounts made
available from the Mass Transit Account of the Highway Trust
Fund; and
''(3) the term 'Federal public transportation program'
means a Federal program that provides funding for public
transportation, including under--
''(A) the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (Public
Law 109-59; 119 Stat. 1144);
''(B) the Moving Ahead for Progress in the 21st
Century Act (Public Law 112-141; 126 Stat. 405);
''(C) the Fixing America's Surface Transportation
Act (Public Law 114-94; 129 Stat. 1312);
''(D) title 23; or
''(E) this chapter.
''(b) Election by State Not To Participate.--Notwithstanding any
other provision of law and in accordance with this section, a State may
elect not to participate in any covered program.
''(c) Direct Public Transportation Funding Program.--
''(1) In general.--The Secretary shall carry out a direct
public transportation funding program in accordance with the
requirements of this section under which the legislature of a
State may elect, not fewer than 90 days before the beginning of
a fiscal year--
''(A) to waive the right of the State to receive
amounts apportioned or allocated to the State under the
covered programs for the fiscal year to which the
election relates; and
''(B) to receive an amount for that fiscal year
that is determined in accordance with subsection (f).
''(2) Effect.--On making an election under paragraph (1), a
State--
''(A) assumes all Federal obligations relating to
each program that is the subject of the election; and
''(B) shall fulfill those obligations using the
amounts transferred to the State under subsection (f).
''(3) Eligible years.--A State may make an election with
respect to fiscal year 2019 and any fiscal year thereafter.
''(d) State Responsibility.--
''(1) In general.--The Governor of a State that
participates in the alternative funding program shall--
''(A) submit a plan to the Secretary that
describes--
''(i) the purposes, projects, and uses to
which amounts received under the alternative
funding program will be put; and
''(ii) which programmatic requirements of
the covered programs the State elects to
continue;
''(B) agree to obligate or expend amounts received
under the alternative funding program exclusively for
projects that would be eligible for funding under the
covered programs if the State was not participating in
the alternative funding program;
''(C) submit to the Secretary an annual report on
the use of amounts received under the alternative
funding program; and
''(D) make the annual report available to the
public in an easily accessible format.
''(2) No federal limitation on use of funds.--Except as
provided in paragraph (1), the expenditure or obligation of
funds received by a State under the alternative funding program
shall not be subject to the requirements of--
''(A) this chapter (except for this section);
''(B) any covered program not under this chapter;
''(C) title 23; or
''(D) any other Federal law (including
regulations).
''(3) Election irrevocable.--An election under subsection
(c) shall be irrevocable during the applicable fiscal year.
''(e) Effect on Preexisting Commitments.--An election by a State
under subsection (c) shall not affect any responsibility or commitment
of the State with respect to a project or program funded under a
covered program in a fiscal year for which an election under subsection
(c) is not in effect.
''(f) Transfers.--
''(1) In general.--The amount to be transferred to a State
under the alternative funding program for a fiscal year shall
be the portion of the taxes transferred to the Mass Transit
Account of the Highway Trust Fund under section 9503(e) of the
Internal Revenue Code of 1986 for that fiscal year that is
attributable to highway users in that State during that fiscal
year.
''(2) Transfers under program.--
''(A) In general.--Transfers under the alternative
funding program--
''(i) shall be made at the same time as
transfers to the Mass Transit Account of the
Highway Trust Fund are made by the Secretary of
the Treasury; and
''(ii) shall--
''(I) be made on the basis of
estimates by the Secretary, in
consultation with the Secretary of the
Treasury, based on the most recent data
available; and
''(II) include proper adjustments
in amounts subsequently transferred
under the alternative funding program,
to the extent prior estimates were in
excess of, or less than, the amounts
required to be transferred under the
alternative funding program.
''(B) Limitation.--
''(i) In general.--An adjustment under
subparagraph (A)(ii)(II) to any transfer may
not exceed 5 percent of the transferred amount
to which the adjustment relates.
''(ii) Adjustment greater than 5 percent.--
If the adjustment required under subparagraph
(A)(ii)(II) exceeds the percentage described in
clause (i) of this subparagraph, the excess
shall be taken into account in making
subsequent adjustments under subparagraph
(A)(ii)(II).
''(g) Application With Other Authority.--Any contract authority
under a covered program (and any obligation limitation) authorized for
a State for a fiscal year for which the State elects to participate in
the alternative funding program shall be rescinded or canceled.
''(h) Maintenance of Effort.--
''(1) In general.--Not later than 30 days after the date on
which amounts are distributed to a State or State agency under
the alternative funding program, the Governor of the State
shall certify to the Secretary that the State will maintain the
effort of the State with regard to State funding for the types
of projects that are funded by the amounts distributed.
''(2) Amounts.--As part of the certification under
paragraph (1), the Governor shall submit to the Secretary a
statement that identifies the amount of funds the State plans
to expend from State sources for projects funded under the
alternative funding program during the fiscal year for which
the State elects to participate in the alternative funding
program.
''(i) Treatment of General Revenues.--For purposes of this section,
any general revenue funds appropriated to the Mass Transit Account of
the Highway Trust Fund shall be transferred to a State under the
alternative funding program in the manner described in subsection
(f)(1).''.
(b) Conforming Amendment.--The analysis for chapter 53 of title 49,
United States Code, is amended by inserting after the item relating to
section 5340 the following:

''5341. Alternative funding of public transportation programs.''.

SOLUTION:
State Transportation Flexibility Act This bill allows a state to elect not to participate in the federal-aid highway program, including any federal highway program under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, the Moving Ahead for Progress in the 21st Century Act, or the Fixing America's Surface Transportation (FAST) Act. The Department of Transportation (DOT) shall carry out a direct federal-aid highway program to permit a state legislature, at least 90 days before the beginning of a fiscal year, to elect to: waive the state's right to receive apportioned or allocated funds under the federal-aid highway program, and receive a prorated amount of taxes appropriated to the Highway Trust Fund (other than for the Mass Transit Account) which are attributable to highway users in the state. The state making an election shall: agree to maintain the Interstate System in accordance with the current Interstate System program; submit a plan describing the purposes, projects, and uses to which such amounts will be put and the federal-aid highway programmatic requirements the state elects to continue; agree to obligate or expend program amounts exclusively for projects that would be eligible for surface transportation program funding; and. agree to report annually to DOT on the use of amounts received under the program and to make the report publicly available. DOT shall carry out a similar alternative funding program for public transportation programs.