[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1501 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1501

     To amend title 49, United States Code, to provide for stable, 
productive, and efficient passenger rail service in the United States, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 30 (legislative day, July 21), 2003

 Mr. McCain (by request) introduced the following bill; which was read 
     twice and referred to the Committee on Commerce, Science, and 
                             Transportation

_______________________________________________________________________

                                 A BILL


 
     To amend title 49, United States Code, to provide for stable, 
productive, and efficient passenger rail service in the United States, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Passenger Rail 
Investment Reform Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes; Definitions.
         TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

Sec. 101. Board of directors of Amtrak.
Sec. 102. Passenger rail service restructuring.
Sec. 103. Northeast Corridor Compact.
Sec. 104. Assistance to address capital needs.
Sec. 105. Employee transition assistance; authorization.
Sec. 106. Limit on operating assistance for long-distance routes.
Sec. 107. Definitions.
Sec. 108. Repeal of obsolete and executed provisions of law; other.
                       TITLE II--FINANCIAL REFORM

Sec. 201. Limitations on availability of grants.
Sec. 202. Spending plans for capital backlog reduction.
Sec. 203. Redemption of common stock.
Sec. 204. Retirement of preferred stock; transfer of assets.
Sec. 205. Real estate and asset sales.
Sec. 206. Management and transfer of secured debt.
Sec. 207. Transition assistance.
  TITLE III--GRANTS AND OTHER ASSISTANCE FOR INTERCITY PASSENGER RAIL 
                                SERVICE

Sec. 301. Capital assistance for intercity passenger rail service.
Sec. 302. Final regulations on applications by States for corridor 
                            development grants.
Sec. 303. Authority for interstate compacts for corridor development.

SEC. 2. PURPOSES; DEFINITIONS.

    (a) Purposes.--The purposes of this Act are to--
            (1) preserve an intercity passenger rail service system in 
        the United States that is driven by sound economics;
            (2) provide a transition from the existing structure for 
        providing such service to a structure that is more aligned with 
        existing and emerging transportation needs;
            (3) develop a system that provides high quality passenger 
        rail service at a reasonable cost;
            (4) establish a long-term partnership among the states and 
        the Federal government to support intercity passenger rail 
        service; and
            (5) create an effective public-private partnership, after a 
        reasonable transition, to manage the capital assets of the 
        Northeast Corridor.
    (b) Definitions.--In this Act:
            (1) Year 1.--The term ``year 1'' means the earlier of--
                    (A) the fiscal year in which this Act is enacted if 
                the fiscal year began less than 61 days before such 
                date; or
                    (B) the first fiscal year beginning after the date 
                of enactment of this Act.
            (2) Years 2, 3, 4, 5, and 6.--The terms ``year 2'', ``year 
        3'', ``year 4'', ``year 5'', and ``year 6'', mean, 
        respectively, the first, second, third, fourth, and fifth 
        fiscal years following year 1.

         TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

SEC. 101. BOARD OF DIRECTORS OF AMTRAK.

    Section 24302 of title 49, United States Code, is amended to read 
as follows:
``Sec. 24302. Board of directors
    ``(a) Membership.--
            ``(1) In general.--Until the board of directors provided 
        for in subsection (f) assumes operational responsibility and 
        control, the board of directors of Amtrak shall be the 
        transition board provided for by this subsection.
            ``(2) Transition board.--The transition board of directors 
        of Amtrak shall consist of 11 voting members, including--
                    ``(A) the Secretary of Transportation, or an 
                officer of the United States within the Department of 
                Transportation compensated under the Executive Schedule 
                under title 5, who is designated by the Secretary; and
                    ``(B) 10 other members appointed by the President, 
                by and with the advice and consent of the Senate.
            ``(3) President of amtrak.--The President of Amtrak shall 
        serve as an ex officio, nonvoting, member of the transition 
        board of directors.
    ``(b) Compensation.--Members of the transition board of directors 
shall serve without pay, but shall receive travel expenses, including 
per diem in lieu of subsistence, in accordance with sections 5702 and 
5703 of title 5.
    ``(c) Term of Office.--Members serving un-expired terms on the date 
of enactment of the Passenger Rail Investment Reform Act may continue 
to serve until the earlier of the expiration of their terms or the date 
on which the restructuring mandated under section 24310 of this title 
is implemented. Members appointed by the President under subsection 
(a)(1)(B) shall serve for a term that expires on the date the 
restructuring mandated in section 24310 of this title is implemented. 
At the expiration of their terms, members of the Board shall be 
eligible to serve as members of the boards of successor corporations to 
Amtrak.
    ``(d) Quorum.--At any time after the date of enactment of the 
Passenger Rail Investment Reform Act, a majority of the transition 
board members who have been lawfully appointed shall constitute a 
quorum for purposes of conducting board meetings and making all 
necessary decisions regarding the operations, structure, and business 
affairs of Amtrak.
    ``(e) Asset Transition Committee.--
            ``(1) In general.--The transition board of directors shall 
        form an asset transition committee comprised of the Secretary 
        or the Secretary's designee, and 2 other members, or 1 other 
        member if 2 other members are not lawfully appointed.
            ``(2) Powers and duties.--In addition to other powers and 
        duties assigned by the board, the Asset Transition Committee 
        has the duty to ensure that the public interest is served in 
        board decisions and Amtrak management actions that change the 
        use of or status of--
                    ``(A) the contractual right of access of Amtrak to 
                rail lines of other railroads;
                    ``(B) Amtrak secured debt;
                    ``(C) Northeast Corridor real property and assets; 
                and
                    ``(D) rolling stock.
            ``(3) Approval required.--The board may not take an action 
        with regard to the assets or secured debt specified in 
        paragraph (2), or permit an Amtrak management action with 
        regard to those assets, that is not approved by the asset 
        transition committee.
    ``(f) Board after Restructuring Completed.--
            ``(1) In general.--Upon the commencement of operations of 
        the Passenger Rail Service Provider and the Passenger Rail 
        Infrastructure Manager established under section 24310 of this 
        title, the board of directors of Amtrak shall consist of--
                    ``(A) the Secretary of Transportation;
                    ``(B) the Federal Railroad Administrator or another 
                officer of the United States within the Department of 
                Transportation compensated under the Executive Schedule 
                under title 5, United States Code, who is designated by 
                the Secretary; and
                    ``(C) the Federal Transit Administrator or another 
                officer of the United States within the Department of 
                Transportation compensated under the Executive Schedule 
                under title 5, who is designated by the Secretary.
            ``(2) Transition board directors shifted.--When the board 
        of directors provided for in paragraph (1) takes office, the 
        members of the transition board of directors, with the 
        exception of the Secretary of Transportation, shall--
                    ``(A) cease to serve as appointees of the President 
                to the transition board of directors; and
                    ``(B) become members of the board of directors of 
                the Passenger Rail Service Provider or the Passenger 
                Rail Infrastructure Manager established under section 
                24310 of this title.''.

SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

    (a) In General.--Chapter 243 of title 49, United States Code, is 
amended by inserting after section 24309 the following:
``Sec. 24310. Amtrak restructuring mandate
    ``(a) In General.--Within 6 months after year 1 begins, and 
notwithstanding any other provision of this title, the transition board 
of directors shall prepare a plan to restructure Amtrak management, 
personnel, assets, operations, and other activities and relationships 
to conform to the requirements of this section. The board shall 
transmit the completed plan to the Committee on Commerce, Science, and 
Transportation of the Senate, the Committee on Transportation and 
Infrastructure of the House of Representatives, and the Committees on 
Appropriations of the House of Representatives and Senate.
    ``(b) Minimum Requirements.--At a minimum, the restructuring plan 
shall provide for the following:
            ``(1) Article of incorporation for 2 new entities.--The 
        filing of appropriate articles of incorporation under State law 
        for 2 business corporations that are entirely independent of 
        Amtrak, 1 of which shall be known as the `Passenger Rail 
        Service Provider' and the other of which shall be knows as the 
        `Passenger Rail Infrastructure Manager', and referred to 
        collectively as the `successor corporations'.
            ``(2) Trifurcation of amtrak.--The division of Amtrak into 
        3 functionally independent entities as follows:
                    ``(A) A corporation, hereinafter referred to as 
                `Amtrak', that shall provide overall supervision of 
                Amtrak restructuring and subsequent management of 
                residual responsibilities, including succeeding to the 
                legal rights of the National Railroad Passenger 
                Corporation, and including specifically Amtrak's legal 
                right of access to other railroads, following transfer 
                of rail operations and infrastructure management to the 
                successor corporations established under paragraph (1).
                    ``(B) A corporation that shall provide passenger 
                rail operating services nationwide, including operation 
                of the reservation centers and ownership and management 
                of existing rolling stock and its maintenance.
                    ``(C) A corporation that shall provide passenger 
                rail infrastructure management.
            ``(3) Assignment of amtrak personnel.--The assignment of 
        all Amtrak personnel by name to one of the entities specified 
        in paragraph (2), with no loss of pay or benefits, including 
        seniority rights to employment within any entity, except that 
        an employee who elects employment with the corporation 
        described in paragraph (2)(A) shall become an employee of that 
        corporation, with only such rights regarding pay and benefits 
        as the corporation shall determine.
    ``(4) The division of accounting, finance, budget, assets, and 
personnel to provide for the operation and funding of each entity 
independently.
    ``(5) A transition schedule that provides for completion of the 
restructuring not later than the last day of year 1.
    ``(c) Successor Corporations.--
            ``(1) Consistent with the business corporation law of the 
        State of incorporation of the successor corporations under 
        subsection (b)(1), each of the successor corporations shall be 
        qualified to undertake railroad activities of an operational or 
        infrastructure nature on a contractual basis with Amtrak or any 
        other entity.
            ``(2) The Passenger Rail Service Provider--
                    ``(A) shall have the exclusive right, until the 
                last day of year 3, to continue to provide the 
                intercity passenger service that is being provided by 
                Amtrak on the date of enactment of the Passenger Rail 
Investment Reform Act, but after the last day of year 1, may operate 
such passenger rail service only under a contract; and
                    ``(B) shall provide interline reservations services 
                to any other provider of intercity passenger rail 
                services on the same basis and rates as services are 
                provided to the operational entities that provide 
                service within Amtrak on the date of enactment of that 
                Act.
            ``(3) The Passenger Rail Infrastructure Manager--
                    ``(A) shall have the exclusive right, until the 
                last day of year 6, to continue to provide the 
                dispatching, maintenance, and infrastructure services 
                that are being provided by Amtrak on the date of 
                enactment of the Passenger Rail Investment Reform Act, 
                but after the last day of year 1, may provide these 
                services only under a contract; and
                    ``(B) shall carry out the multi-year infrastructure 
                plan prepared by Amtrak to the extent that funds are 
                made available.
            ``(4)(A) The successor corporations are not a department, 
        agency, or instrumentality of the United States Government nor 
        are they Government corporations (as defined in section 103 of 
        title 5).
            ``(B) Chapter 105 of this title does not apply to the 
        successor corporations, except that--
                            ``(i) laws and regulations governing 
                        safety, employee representation for collective 
                        bargaining purposes, the handling of disputes 
                        between carriers and employees, employee 
                        retirement, annuity, and unemployment systems, 
                        and other dealings with employees that apply to 
                        a rail carrier providing transportation subject 
                        to chapter 105 apply to the successor 
                        corporations; and
                            ``(ii) the employee retirement, annuity, 
                        and unemployment systems that apply to a rail 
                        carrier providing transportation subject to 
                        chapter 105 apply to the corporation described 
                        in subsection (b)(2)(A).
            ``(C) Subsections (c) through (l) of section 24301 of this 
        title shall apply to the successor corporations.
            ``(5) Subject to further action by the board of directors, 
        the president of Amtrak on the date of enactment of the 
        Passenger Rail Investment Reform Act shall be offered the 
        position of chief executive officer of the Passenger Rail 
        Service Provider.
            ``(6) The contractual rights of successor corporations to 
        provide services may not be extended beyond the dates set forth 
        in paragraphs (2) and (3), as applicable, without competitive 
        bid.
            ``(7) The Passenger Rail Service Provider shall provide to 
        the Secretary of Transportation not later than the end of year 
        2, recommendations on the feasibility, advantages, and 
        disadvantages of separation of the reservation centers into a 
        free-standing entity that can become an element of an 
        intermodal reservations service.
            ``(8) The corporation described in subsection (b)(2)(A) 
        shall retain all legal rights pertaining to the name `Amtrak', 
        and may, at its option, license or otherwise make the name 
        `Amtrak' commercially available in connection with intercity 
        passenger rail and related services.
    ``(d) Rolling Stock and Shops.--
            ``(1) With respect to any route on which intercity 
        passenger rail service is provided on the date of enactment of 
        the Passenger Rail Investment Reform Act, the Passenger Rail 
        Service Provider shall make available to any replacement 
        operator the legacy equipment that is associated with the 
        service on the route.
            ``(2) Such equipment and services shall be made available 
        on such terms as Amtrak determines are fair, reasonable, and in 
        the public interest.
    ``(e) Freight and Commuter Operations.--
            ``(1) Amtrak shall ensure that the implementation of the 
        restructuring prescribed in this section gives due 
        consideration to the needs of freight and commuter rail 
        operations that, as of the effective date of the Passenger Rail 
        Investment Reform Act, operate in the Northeast Corridor on 
        Amtrak right of way.
            ``(2) Notwithstanding paragraph (1), commuter services 
        headquartered in a State or Commonwealth that is not a member 
        of the Northeast Corridor Compact after the last day of year 2, 
        shall pay the fully allocated costs incurred by the successor 
        corporation or any successor entity for access to and use of 
        the Northeast Corridor for such services.
            ``(3) The right of access by Amtrak to rail lines owned by 
        other carriers is, as of the date of enactment of the Passenger 
        Rail Investment Reform Act, restricted as follows:
                    ``(A) The terms and conditions for operation of an 
                intercity passenger rail route or frequency to be added 
                after that date shall be determined by negotiation and 
                mutual agreement between the host railroad and the 
                operator of the route or frequency sought to be added, 
                with no preferential right of access.
                    ``(B) If not utilized by Amtrak, Amtrak's right of 
                access to any segment of rail line owned by another 
                rail carrier may be assigned to no more than 1 
                intercity passenger rail operator during the term of 
                the assignment, except by agreement among Amtrak, its 
                assignee, and the owner of the rail line.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 243 of 
title 49, United States Code, is amended by inserting the following 
after the item relating to section 24309:

``24310. Amtrak restructuring mandate.''.

SEC. 103. NORTHEAST CORRIDOR COMPACT.

    (a) Consent to Compact.--
            (1) In general.--The States and the District of Columbia 
        that constitute the Northeast Corridor, as defined in section 
        24102 of title 49, United States Code, may enter into a 
        multistate compact, not in conflict with any other law of the 
        United States, to be known as the Northeast Corridor Compact, 
to provide passenger rail service and to conduct related activities in 
the Northeast Corridor.
            (2) Congressional approval required.--The Northeast 
        Corridor Compact shall be submitted to Congress for its 
        consent. It is the sense of the Congress that rapid consent to 
        the Compact is a priority matter for the Congress.
    (b) Compact Commission.--
            (1) In general.--There is hereby established a commission 
        to be known as the Northeast Corridor Compact Commission. The 
        Commission shall be composed of--
                    (A) 2 members (or their designees), to be selected 
                by the Secretary of Transportation;
                    (B) 2 members (or their designees), to be selected 
                by agreement of--
                            (i) the governors of Maryland, Delaware, 
                        Pennsylvania, New Jersey, New York, 
                        Connecticut, Rhode Island, and Massachusetts 
                        (hereinafter referred to as the ``participating 
                        States''); and
                            (ii) the mayor of the District of Columbia; 
                        and
                    (C) 1 member to be selected by the 4 members 
                selected under subparagraphs (A) and (B).
            (2) Administrative provisions.--
                    (A) Members of the Commission shall be appointed 
                for the life of the Commission.
                    (B) A vacancy in the Commission shall be filled in 
                the manner in which the original appointment was made.
                    (C) Members shall serve without pay but shall 
                receive travel expenses, including per diem in lieu of 
                subsistence, in accordance with sections 5702 and 5703 
                of title 5, United States Code.
                    (D) The Chairman of the Commission shall be elected 
                by the members.
                    (E) The Commission may appoint and fix the pay of 
                such personnel as it considers appropriate.
                    (F) Upon the request of the Commission, the head of 
                any department or agency of the United States may 
                detail, on a reimbursable basis, any of the personnel 
                of that department or agency to the Commission to 
                assist it in carrying out its duties under this 
                section.
                    (G) Upon the request of the Commission, the 
                Administrator of General Services shall provide to the 
                Commission, on a reimbursable basis, the administrative 
                support services necessary for the Commission to carry 
                out its responsibilities under this section.
    (c) Functions.--
            (1) The Commission shall prepare for the consideration of 
        and adoption by participating States, the District of Columbia, 
        and the Secretary of Transportation an interstate compact that 
        provides for--
                    (A) full authority for 99 years to succeed to the 
                responsibilities of the National Railroad Passenger 
                Corporation as operator of the Northeast Corridor, 
                subject to the provisions of a lease from the 
                Department of Transportation;
                    (B) execution of a lease of the Northeast Corridor 
                from the Department of Transportation, for a period of 
                99 years, subject to appropriate provisions protecting 
                the lessor's interests, including reversion of all 
                lease interests to the lessor in the event the lessee 
                fails to meet its financial obligations or otherwise 
                assume financial responsibility for Northeast Corridor 
                functions;
                    (C) responsibility for Corridor maintenance and 
                improvement;
                    (D) operation of intercity passenger rail service;
                    (E) arrangements for operation of freight railroad 
                operations and commuter operations;
                    (F) assumption of financial responsibility for 
                Northeast Corridor functions;
                    (G) authority to make use of the Corridor for non-
                rail purposes; and
                    (H) participation by the Department of 
                Transportation, as the non-voting representative of the 
                United States.
            (2) The compact terms shall, at a minimum, conform to the 
        requirements of subsections (e) through (i) of this section.
    (d) Final Compact Proposal.--
            (1) The Commission shall submit a final compact proposal to 
        participating States, the District of Columbia, and the Federal 
        Government not later than the last day of year 1.
            (2) The Commission shall terminate on the 180th day 
        following the date of transmittal of the final compact proposal 
under this subsection. All records and papers of the Commission shall 
thereupon be delivered to the Administrator of General Services for 
deposit in the National Archives.
    (e) Governance and Funding Requirements for Compact.--
            (1) The governance provisions of the compact shall provide 
        a mechanism to ensure voting representation for the 
        participating States and the District of Columbia and for non-
        voting representation for the Secretary of Transportation as an 
        ex officio member participating in all Compact affairs.
            (2) The provisions of the compact shall establish the 
        financial obligations of each compact member and shall provide 
        for its management of rail services in the Northeast Corridor.
    (f) Employee Interest Requirements for Compact.--The employee 
provisions of the compact shall, at a minimum, provide the following 
with regard to employees in the Northeast Corridor if the Compact 
chooses to replace the successor corporations for operation and 
maintenance of the physical plant or operation of passenger trains, or 
both:
            (1) Payment of any labor protection payments owed and not 
        paid by the successor corporations established under section 
        24310(b) of title 49, United States Code.
            (2) In the case of an employee who is employed by the 
        National Railroad Passenger Corporation on the date of 
        enactment of the Passenger Rail Investment Reform Act and who 
        accepts employment by a successor corporation, a right of first 
        refusal to accept a substantially similar position with the 
        replacement operator when the successor corporation is 
        replaced.
    (g) Federal Interest Requirements for Compact.--The provisions of 
the Compact shall hold the United States Government harmless as to the 
actions of the Compact under the lease of rights to the Northeast 
Corridor by the United States Government.
    (h) Compact Borrowing Authority.--
            (1) The borrowing authority provisions of the Compact may 
        authorize it to issue bonds or other debt instruments from time 
        to time at its discretion for purposes that include paying any 
        part of the cost of rail service improvements, construction, 
        and rehabilitation and the acquisition of real and personal 
        property, including operating equipment, except that debt 
        issued by the Compact may be secured only by revenues to the 
        Compact and may not be a debt of a participating State, the 
        District of Columbia, or the Federal Government.
            (2) The debt authorized by this subsection shall under no 
        circumstances be backed by the full faith and credit of the 
        United States, and a grant made under the authority of this Act 
        or under the authority of part C of subtitle V of title 49, 
        United States Code, shall include an express acknowledgement by 
        the grantee that the debt does not constitute an obligation of 
        the United States.
    (i) Adoption of Compact; Turnover.--
            (1) The participating States and the District of Columbia 
        shall adopt a final compact agreement not later than the last 
        day of year 2, and the Compact shall thereafter assume 
        responsibility for all Northeast Corridor operations from the 
        successor corporations on a date that is not later than 8 
        months following adoption of the Compact.
            (2) In the event that the participating States and the 
        District of Columbia do not adopt the final compact agreement 
        and make it operational under the schedule set forth in this 
        section, the Secretary of Transportation shall assume control 
        of the corporation described in section 24310(b)(2)(A) of title 
        49, United States Code, and shall make such legislative 
        recommendations as the President judges necessary and expedient 
        to Congress that address the monetary contributions by 
        Northeast Corridor states and the District of Columbia that 
        would be necessary to provide continued intercity passenger 
        rail service in the Northeast Corridor.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation such sums as may be 
necessary to carry out the purposes of this section.

SEC. 104. ASSISTANCE TO ADDRESS CAPITAL NEEDS.

    (a) In General.--There are authorized to be appropriated to the 
Secretary of Transportation, for capital expenditures in compliance 
with capital spending plans developed under section 202 of this Act, 
including the Secretary's expenses related thereto, the following 
amounts:
            (1) Such sums as may be necessary for year 3.
            (2) Such sums as may be necessary for year 4.
            (3) Such sums as may be necessary for year 5.
            (4) Such sums as may be necessary for year 6.
    (b) Obligation Options.--
            (1) Subject to paragraph (2), the Secretary may obligate 
        the funds authorized by this section through grants to or 
        cooperative agreements with States, the Passenger Rail Service 
        Provider, the Northeast Corridor Compact or another qualified 
        Compact, or through contracts with private companies.
            (2) Funds appropriated under this section shall not be 
        obligated and not be disbursed from the Treasury for the 
        Northeast Corridor Compact until it has been established and is 
        empowered and qualified to enter into contracts for the 
        expenditure of the funds.
    (c) Eligibility of Expenditures.--
            (1) The Federal share of expenditures for capital 
        improvements under this section may be not more than 100 
        percent and is solely authorized for the purpose of funding 
        deferred maintenance, safety, and security projects. 
        Expenditures for capacity expansion are not authorized by this 
        section.
            (2) Funds appropriated under this section may be obligated 
        for an expenditure only if the Secretary has determined in 
        writing that the expenditure on any railroad infrastructure 
        investments is limited to a route or routes with a useful life 
        of at least 5 years.

SEC. 105. EMPLOYEE TRANSITION ASSISTANCE; AUTHORIZATION.

    (a) Provision of Financial Incentives.--To facilitate the 
restructuring required by this title, the Secretary is authorized to 
develop a program under which the Secretary may, at the Secretary's 
discretion, provide grants for financial incentives to be provided to 
employees of the National Railroad Passenger Corporation who 
voluntarily terminate their employment with the Corporation or the 
successor corporations (as such term is used in section 24310(b)(1) of 
title 49, United States Code) and relinquish any legal rights to 
receive termination-related payments under any contractual agreement 
with the Corporation or the successor corporations.
    (b) Conditions for Financial Incentives.--As a condition for 
receiving financial assistance grants under this section, the 
Corporation or the successor corporations shall certify that--
            (1) the financial assistance results in a net reduction in 
        the total number of employees equal to the number receiving 
        financial incentives;
            (2) the financial assistance results in a net reduction in 
        total employment expense equivalent to the total employment 
        expenses associated with the employees receiving financial 
        incentives; and
            (3) the total number of employees eligible for termination-
        related payments will not be increased without the express 
        written consent of the Secretary.
    (c) Amount of Financial Incentives.--The financial incentives 
authorized under this section may not exceed $50,000 per employee.
    (d) Authorization of Appropriations.--There are hereby authorized 
to be appropriated to the Secretary such sums as may be necessary to 
make grants to the National Railroad Passenger Corporation or the 
successor corporations to fund termination-related payments to 
employees under existing contractual agreements from the first day of 
year 1 through the last day of year 4.

SEC. 106. LIMIT ON OPERATING ASSISTANCE FOR LONG-DISTANCE ROUTES.

    (a) In General.--Chapter 243 of title 49, United States Code, is 
amended by adding at the end the following:
``Sec. 24316. Limit on operating assistance for long-distance routes
    ``(a) General Authority.--
            ``(1) Grant authority.--After the last day of year 1, the 
        Secretary of Transportation may make grants for operating 
        assistance under the authority of this section, and not under 
        any other provision of law, to reimburse operators of long-
        distance routes and corridor feeder routes for the operating 
        expenses incurred in operating those routes to provide 
        intercity passenger rail transportation.
            ``(2) Conditions.--A grant under this section shall be 
        subject to the terms, conditions, requirements, and provisions 
        the Secretary decides are necessary or appropriate for the 
        purposes of this section, including limitations on what 
        operating expenses are eligible for reimbursement and 
        documentation of eligible operating losses on a quarterly 
        basis.
    ``(b) Federal Share of Operating Expenses.--
            ``(1) In general.--No funds appropriated to carry out this 
        section may be used to fund operating expenses of a long-
        distance route after the last day of year 1, except as provided 
        in paragraph (2).
            ``(2) Reimbursable amount for years 2, 3, and 4.--The 
        Secretary may reimburse an operator of a long-distance route or 
        a corridor feeder route for operating expenses on that route 
        that do not exceed the operating losses on that route and are 
        not more than--
                    ``(A) $0.40 per-passenger mile during year 2;
                    ``(B) $0.20 per-passenger mile during year 3; or
                    ``(C) $0.10 per-passenger mile during year 4.
            ``(3) Termination after year 4.--The Secretary may not 
        reimburse an operator of a long-distance route or a corridor 
        feeder route for operating expenses under this section after 
        year 4.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to carry 
out this section, including administrative costs.''.
    (b) Conforming Amendments.--The chapter analysis for chapter 243 of 
title 49, United States Code, is amended by adding at the end the 
following:

``24316. Limit on operating assistance for long-distance routes.''.

SEC. 107. DEFINITIONS.

    Section 24102 of title 49, United States Code, is amended--
            (1) by redesignating paragraphs (5) through (9) as 
        paragraphs (6) through (10), respectively;
            (2) by inserting after paragraph (4) the following:
            ``(5) `corridor feeder route' means a portion of a long 
        distance train or route that provides services between regional 
        corridors by connecting to endpoints of the corridors.'';
            (3) by redesignating paragraphs (7) through (10), as 
        redesignated, as paragraphs (9) through (12), respectively;
            (4) by inserting after paragraph (6), as redesignated, the 
        following:
            ``(7) `legacy equipment' means the rolling stock required 
        to provide intercity passenger rail service owned or leased by 
        the National Railroad Passenger Corporation on the date of 
        enactment of the Passenger Rail Investment Reform Act.
            ``(8) `long distance train' or `long distance route' means 
        all or a portion of the following trains or routes operated by 
        the National Railroad Passenger Corporation on the date of 
        enactment of the Passenger Rail Investment Reform Act:
                    ``(A) The Silver Star.
                    ``(B) The Three Rivers.
                    ``(C) The Cardinal.
                    ``(D) The Silver Meteor.
                    ``(E) The Empire Builder.
                    ``(F) The Capitol Limited.
                    ``(G) The California Zephyr.
                    ``(H) The Southwest Chief.
                    ``(I) The City of New Orleans.
                    ``(J) The Texas Eagle.
                    ``(K) The Sunset Limited.
                    ``(L) The Coast Starlight.
                    ``(M) The Lake Shore Limited.
                    ``(N) The Palmetto.
                    ``(O) The Crescent.
                    ``(P) The Pennsylvanian.
                    ``(Q) The Auto Train.''; and
            (5) by adding at the end the following:
            ``(13) `year 1' means the earlier of--
                    ``(A) the fiscal year in which the Passenger Rail 
                Investment Reform Act is enacted if the fiscal year 
                began less than 61 days before such date; or
                    ``(B) the first fiscal year beginning after the 
                date of enactment of that Act.
            ``(14) `year 2', `year 3', `year 4', `year 5', and `year 
        6', mean, respectively, the first, second, third, fourth, and 
        fifth fiscal years following year 1.''.

SEC. 108. REPEAL OF OBSOLETE AND EXECUTED PROVISIONS OF LAW.

    (a) In General.--Title 49, United States Code, is amended by repeal 
of the following sections:
            (1) Section 24701.
            (2) Section 24706.
            (3) Section 24901.
            (4) Section 24902.
            (5) Section 24904.
            (6) Section 24906.
            (7) Section 24909.
    (b) Amendment of Section 24305.--Section 24305 of title 49, United 
States Code, is amended--
            (1) by striking paragraph (2) of subsection (a) and 
        redesignating paragraph (3) as paragraph (2);
            (2) by striking paragraph (4) of subsection (b) and 
        redesignating paragraphs (5) and (6) as paragraphs (4) and (5), 
        respectively; and
            (3) by inserting ``With regard to items acquired with funds 
        provided by the Federal Government,'' before ``Amtrak'' in 
        subsection (f)(2).
    (c) Conforming Amendments.--The chapter analyses for chapters 243, 
247, and 249 or title 49, United States Code, are amended, as 
appropriate, by striking the items relating to sections 24307, 24701, 
24706, 24901, 24902, 24904, 24906, 24908, and 24909.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the first day of year 1.

                      TITLE II--FINANCIAL REFORMS

SEC. 201. LIMITATIONS ON AVAILABILITY OF GRANTS.

    (a) In General.--Chapter 43 of title 49, United States Code, is 
amended by inserting after section 24313 the following:
``Sec. 24314. Transitional limitations on availability of grants
    ``(a) Requirements Prior to Restructuring.--A grant made to the 
National Railroad Passenger Corporation under the authority of this 
part between the first day of year 1, and the establishment and 
commencement of operations by the successor corporations under section 
24310 of this title may only be made subject to the following 
limitations:
            ``(1) The Secretary of Transportation shall not disburse 
        funding to cover operating losses on a long-distance train 
        route without first receiving and approving a grant request for 
        that specific train route.
            ``(2) Each such grant request shall be accompanied by a 
        detailed financial analysis and revenue projection justifying 
        the Federal support to the Secretary's satisfaction.
            ``(3) The Secretary of Transportation and the board of 
        directors of the Corporation shall ensure that, of the amount 
        made available by appropriations for capital and operating 
        assistance to the Corporation in a fiscal year, sufficient sums 
        are reserved to satisfy the contractual obligations of the 
        Corporation to provide commuter and intrastate passenger rail 
        service.
            ``(4) Not later than December 31 prior to each fiscal year 
        in which grants are made to the Corporation, the Corporation 
        shall transmit to the Secretary of Transportation, the 
        Committee on Commerce, Science, and Transportation of the 
        Senate, the Committee on Transportation and Infrastructure of 
        the House of Representatives, and the House of Representatives 
        and Senate Committees on Appropriations a business plan for 
        operating and capital improvements to be funded in the fiscal 
        year under section 24104(a) of this title 49.
            ``(5) The business plan shall include a description of the 
        work to be funded, along with cost estimates and an estimated 
        timetable for completion of the projects covered by the 
        business plan.
            ``(6) Each month of each fiscal year in which grants are 
        made to the Corporation, the Corporation shall submit to the 
        Secretary of Transportation, the Committee on Commerce, 
        Science, and Transportation of the Senate, the Committee on 
        Transportation and Infrastructure of the House of 
        Representatives, and the House of Representatives and Senate 
        Committees on Appropriations a supplemental report regarding 
        the business plan, which shall describe the work completed to 
        date, any changes to the business plan, and the reasons for 
        such changes.
            ``(7) A grant that is not approved by the Secretary of 
        Transportation and an element of the Corporation's current 
        fiscal year business plan may not be used for operating 
        expenses or capital projects, and may not be obligated or 
        expended unless the Corporation certifies, as part of the grant 
        agreement, that it has complied with and will abide by the 
        following requirements:
                    ``(A) The Corporation's management will maintain 
                financial controls and accounting transparency to the 
                satisfaction of the Secretary, including developing or 
                enhancing any existing capacity separately to report--
                            ``(i) all revenue and expenses associated 
                        with rail operations by route; and
                            ``(ii) budgeted and actual expenditures for 
                        all capital investments.
                    ``(B) The Corporation's management will provide a 
                monthly performance report to the board of directors, 
the Secretary of Transportation, and the committees of Congress 
described paragraph (6). The Corporation shall also make available to 
the Secretary the same details and reports on its financial performance 
that it makes available to Amtrak management, at the same time that it 
provides those reports and details to Amtrak management.
                    ``(C) The Corporation shall expend funds only for 
                the continuation of existing plants and services. With 
                the exception of expenditures for which it obtains 
                written approval from the Secretary of Transportation, 
                the Corporation will not use of any of its funds for 
                expansion or planning for expansion of rail service, 
                including high speed rail service.
                    ``(D) The Corporation has negotiated with its 
                employees substantial operating cost reductions needed 
                to make its operations competitive with private-sector 
                service providers.
    ``(b) Requirements Following Restructuring.--Any grant made 
directly to a successor corporation (as such term is used in section 
24310(b)(1)) under the authority of this part may only be made subject 
to the following limitations:
            ``(1) The Secretary of Transportation shall not disburse 
        funding to cover operating losses on a long-distance train 
        route without first receiving and approving a grant request for 
        that specific train route.
            ``(2) Each such grant request shall be accompanied by a 
        detailed financial analysis and revenue projection justifying 
        the Federal support to the Secretary's satisfaction.
            ``(3) The Secretary shall ensure that, of the amount made 
        available by appropriations for capital and operating 
        assistance in a fiscal year, sufficient sums are reserved to 
        satisfy the successor corporation's contractual obligations, if 
        any, with respect to commuter and intrastate passenger rail 
        service.
            ``(4) Not later than December 31 prior to each fiscal year 
        in which grants are made, the successor corporations shall each 
        transmit to the Secretary of Transportation a business plan for 
        operating and capital improvements to be funded in the fiscal 
        year.
            ``(5) The business plan shall include a description of the 
        work to be funded, along with cost estimates and an estimated 
        timetable for completion of the projects covered by the 
        business plan.
            ``(6) Each month of each fiscal year in which grants are 
        made, the successor corporations shall each submit to the 
        Secretary a supplemental report regarding the business plan, 
        which shall describe the work completed to date, any changes to 
        the business plan, and the reasons for such changes.
            ``(7) A grant that is not approved by the Secretary of 
        Transportation and an element of the Corporation's current 
        fiscal year business plan may not be used for operating 
        expenses or capital projects, and may not be obligated or 
        expended unless the Corporation certifies, as part of the grant 
        agreement, that it has complied with and will abide by the 
        following requirements:
                    ``(A) Management will maintain financial controls 
                and accounting transparency to the satisfaction of the 
                Secretary, including developing or enhancing any 
                existing capacity separately to report--
                            ``(i) all revenue and expenses associated 
                        with rail operations by route; and
                            ``(ii) budgeted and actual expenditures for 
                        all capital investments.
                    ``(B) Management of each successor corporation 
                shall make available to the Secretary the same details 
                and reports on its financial performance that it makes 
                available internally, at the same time that it provides 
                those reports and details internally.
                    ``(C) Funds will be spent only on existing plants 
                and services.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 243 of 
title 49, United States Code, is amended by inserting after the item 
relating to section 24313 the following:

``24314. Transitional limitations on availability of grants.''.

SEC. 202. SPENDING PLANS FOR CAPITAL BACKLOG REDUCTION.

    (a) In General.--Within 6 months after year 1 begins, and as a 
condition of grants to the National Railroad Passenger Corporation 
between that date and the implementation of the restructuring required 
under section 24310 of title 49, United States Code, the Corporation 
shall prepare a capital spending plan that addresses capital needs, 
consistent with the funding levels authorized to be provided for year 1 
and each fiscal year thereafter through year 6, for--
            (1) Northeast Corridor capital assets;
            (2) capital assets on long-distance routes other than on 
        the Northeast Corridor; and
            (3) capital assets on short-distance routes other than the 
        NortheastCorridor.
    (b) Approval by the Secretary and the Compact.--
            (1) In general.--The Corporation shall submit the capital 
        spending plan prepared under subsection (a) to the Secretary of 
        Transportation for review and approval. The plan shall be 
        implemented only after approval by the Secretary, and with any 
        modifications specified by the Secretary.
            (2) Annual updates.--The plan shall be updated and 
        resubmitted at least annually.
            (3) No plan no grant.--After creation of Northeast Corridor 
        Compact, the Secretary may not make a grant to the Compact for 
        capital investments except in accordance with a capital 
        spending plan prepared by the Compact and approved by both the 
        Compact and the Secretary. The same requirements shall apply to 
        grants made to States and other Compacts under this section.

SEC. 203. REDEMPTION OF COMMON STOCK.

    (a) Valuation.--The Secretary of Transportation shall arrange, at 
the National Railroad Passenger Corporation's expense, for a valuation 
of all assets and liabilities of the Corporation to be performed by the 
Secretary of the Treasury, or by a contractor selected by the Secretary 
of the Treasury. The valuation shall be conducted in accordance with 
criteria and requirements to be determined by the Secretary in the 
Secretary's discretion and shall be completed within 6 months after 
year 1 begins.
    (b) Redemption.--
            (1) Prior to the transfer of assets to the Secretary 
        directed by section 204 of this Act, and within 9 months after 
        year 1 begins, the Corporation shall redeem all common stock in 
        the Corporation issued prior to the date of enactment of this 
        Act at the value of such stock, based on the valuation 
        performed under subsection (a).
            (2) No provision of this Act, or amendments made by this 
        Act, provide to the owners of the common stock a priority over 
        holders of indebtedness or other stock of the Corporation.
    (c) Acquisition Through Eminent Domain.--In the event that the 
Corporation and the owners of its common stock have not completed the 
redemption of such stock by a date that is within 9 months after year 1 
begins, the Corporation shall exercise its right of eminent domain 
under section 24311 of title 49, United States Code, to acquire that 
stock. The valuation performed under subsection (a) shall be deemed to 
constitute just compensation except to the extent that the owners of 
the common stock demonstrate that the valuation is less than the 
constitutional minimum value of the stock.
    (d) Amendment of Section 24311.--Section 24311(a)(1) of title 49, 
United States Code, is amended--
            (1) by striking ``or'' at the end of subparagraph (A);
            (2) by striking ``Amtrak.'' in subparagraph (B) and 
        inserting ``Amtrak; or''; and
            (3) by adding at the end the following:
                    ``(C) necessary to redeem the Corporation's common 
                stock from any holder thereof, including a rail 
                carrier.''.
    (e) Conversion of Preferred Stock to Common.--
            (1) Subsequent to the redemption of the common stock in the 
        corporation issued prior to the date of enactment of this Act, 
        the Secretary of Transportation shall convert the one share of 
        the preferred stock of the Corporation retained under section 
        204 of this Act for 10 shares of common stock in the 
        Corporation.
            (2) The Corporation shall not issue any other common stock 
        without the express written consent of the Secretary.

SEC. 204. RETIREMENT OF PREFERRED STOCK; TRANSFER OF ASSETS.

    (a) Transfer.-- Not later than 30 days after the redemption or 
acquisition of stock under section 203 of this Act, the Corporation 
shall, in return for the consideration specified in subsection (c), 
transfer to the Secretary of Transportation title to the following 
assets:
            (1) The portions of the Northeast Corridor currently owned 
        or leased by the Corporation as well as any improvements made 
        to these assets, including the rail right-of-way, stations, 
        track, signal equipment, electric traction facilities, bridges, 
        tunnels and all other improvements owned by Amtrak between 
        Boston, Massachusetts, and Washington, District of Columbia 
        (including the route through Springfield, Massachusetts, and 
        the routes to Harrisburg, Pennsylvania, and Albany, New York, 
        from the Northeast Corridor mainline).
            (2) Chicago Union Station and rail-related assets in the 
        Chicago metropolitan area.
            (3) All other track and right-of-way, stations, repair 
        facilities, and other real property owned or leased by the 
        Corporation.
    (b) Existing Encumbrances.--(1) With regard to any assets described 
in subsection (a) that the Corporation has provided as security or 
collateral for a debt entered into prior to the date of enactment of 
this Act, the Corporation shall transfer its underlying legal interest 
in such asset to the Secretary, but the Corporation shall remain liable 
for the debt secured by the asset.
    (2) The obligation of the National Railroad Passenger Corporation 
to repay in full any indebtedness to the United States incurred since 
January 1, 1990, is not affected by this Act or an amendment made by 
this Act.
    (c) Consideration.--In consideration for the assets transferred to 
the United States under subsection (b), the Secretary shall--
            (1) deliver to the Corporation all but 1 share of the 
        preferred stock of the Corporation held by the Secretary and 
        forgive the Corporation's legal obligation to pay any 
        dividends, including accrued but unpaid dividends as of the 
        date of transfer, evidenced by the preferred stock 
        certificates; and
            (2) release the Corporation from all mortgages and liens 
        held by the Secretary that were in existence on January 1, 
        1990.
    (d) Agreement.--Prior to accepting title to the assets transferred 
under this section, the Secretary shall enter into an agreement with 
the Corporation under which the Corporation will exercise on behalf of 
the Secretary care, custody, and control of the assets to be 
transferred. The agreement shall identify in detail the specific 
functions of the Corporation's employees and equipment, and the 
specific numbers and locations of the employees and equipment 
associated with each function, that would be needed for continuation of 
commuter and freight rail service in the event that the Corporation 
were to cease operation, and identify those actions that would be 
required to ensure that such functions can be continued on an interim 
basis to avoid any interruption in commuter or freight rail service on 
the Northeast Corridor.
    (e) Further Transfers.--
            (1) The Secretary may, for appropriate consideration, 
        transfer title to all or part of Chicago Union Station and 
        rail-related assets in the Chicago metropolitan area acquired 
        under this section to a regional public transportation agency 
        that has significant operations in Chicago Union Station on the 
        date of enactment of this Act.
            (2) The Secretary may, for appropriate consideration, 
        transfer to the underlying States title to real estate 
        properties owned by the Corporation between Boston, 
        Massachusetts, and Washington, District of Columbia, that 
        constitute the route through Springfield, Massachusetts, and 
        the routes to Harrisburg, Pennsylvania, and Albany, New York, 
        from the Northeast Corridor mainline.
            (3) The Secretary may, for appropriate consideration, 
        transfer title to all or part of the assets acquired under 
        subsection (a)(3) to a State, a public agency, a railroad, or 
        other entity deemed appropriate by the Secretary.
            (4) All financial consideration determined by the Secretary 
        to be appropriate consideration for the transfer of the assets 
        described in paragraphs (1) through (3) shall be used 
        exclusively to reduce the Corporation's long-term debt that 
        exists on the date of enactment.

SEC. 205. REAL ESTATE AND ASSET SALES; OTHER.

    (a) In General.--The Amtrak board of directors shall undertake and 
complete not later than the last day of year 3, the disposition of all 
stations, track, and other facilities outside the Northeast Corridor 
mainline, including property conveyed to the Secretary of 
Transportation under section 204 of this Act.
    (b) Proceeds of Liquidation.--Notwithstanding section 3302 of title 
31, United States Code, any proceeds from the liquidation of assets 
under this section shall--
            (1) be credited as an offsetting collection to the account 
        that finances grants for debt and interest payments under 
        section 206 of this Act to the Passenger Rail Service Provider 
        established under section 24310 of title 49, United States 
        Code; and
            (2) remain available until expended.

SEC. 206. MANAGEMENT AND TRANSFER OF SECURED DEBT.

    (a) New Debt Prohibition.--Except as approved by the Secretary of 
Transportation to refinance existing secured debt, the Corporation 
shall not enter into any obligation secured by assets of the 
Corporation after the date of enactment of this Act. This section does 
not prohibit unsecured lines of credit used by the Corporation or any 
subsidiary for working capital purposes.
    (b) Secured Debt Transfer.--
            (1) Upon establishment of the Passenger Rail Service 
        Provider established under section 24310 of title 49, United 
        States Code, and the transfer of ownership of the existing 
        rolling stock, all debt secured by the rolling stock shall be 
        transferred to and become a liability solely of, the Passenger 
        Rail Service Provider.
            (2) Upon establishment of the Northeast Corridor Compact 
        under section 103 of this Act, the secured debt associated with 
        fixed assets in the Northeast Corridor shall be transferred to, 
        and become a liability solely of, the Northeast Corridor 
        Compact.
    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary of Transportation for grants to the Passenger 
        Rail Service Provider established under section 24310 of title 
        49, United States Code, to pay principal and interest payments 
        on secured debt existing on the date of enactment of this Act 
        the following amounts:
                    (A) Such sums as may be necessary in year 2.
                    (B) Such sums as may be necessary in year 3.
                    (C) Such sums as may be necessary in year 4.
                    (D) Such sums as may be necessary in year 5.
                    (E) Such sums as may be necessary in year 6.
            (2) Legal effect of payments under this section.--The 
        payment of principal and interest secured debt with the 
        proceeds of grants under paragraph (1) on funding authorized by 
        this section shall not--
                    (A) modify the extent or nature of any indebtedness 
                of the National Railroad Passenger Corporation to the 
                United States in existence of the date of enactment of 
                this Act;
                    (B) change the private nature of Amtrak's or its 
                successors' liabilities; or
                    (C) imply any Federal guarantee or commitment to 
                amortize Amtrak's outstanding indebtedness.

SEC. 207. TRANSITION ASSISTANCE.

    (a) Year 1 Assistance.--There are authorized to be appropriated to 
the Secretary of Transportation for grants to the National Railroad 
Passenger Corporation for operating and capital expenses such sums as 
may be necessary in year 1.
    (b) Year 2 Successor Corporation Operating Assistance.--There are 
authorized to be appropriated to the Secretary such sums as may be 
necessary for grants to--
            (1) the Passenger Rail Service Provider established under 
        section 24310 of title 49, United States Code, for operating 
        expenses of all services except long-distance trains and routes 
        in year 2; and
            (2) the Passenger Rail Infrastructure Manager established 
        under that section for capital expenses in year 2.
    (c) Administrative Expenses of Compacts.--There are authorized to 
be appropriated to the Secretary such sums as may be necessary for 
grants for the administrative expenses of interstate compacts in years 
1 through 3.
    (d) Expenses of Amtrak.-- There are authorized to be appropriated 
to the Secretary such sums as may be necessary for grants for the 
administrative expenses of Amtrak in years 2 through 6.
    (e) Grants Made After Year 2.--After the last day of year 2, the 
Secretary may not enter into a grant agreement under this Act, other 
than section 206(c), or part C of title V of title 49, United States 
Code, unless each other party to the grant agreement is a State, 
regional compact, or other public entity.

  TITLE III--GRANTS AND OTHER ASSISTANCE FOR INTERCITY PASSENGER RAIL 
                                SERVICE

SEC. 301. CAPITAL ASSISTANCE FOR INTERCITY PASSENGER RAIL SERVICE.

    (a) In General.--Part C of subtitle V of title 49, United States 
Code, is amended by inserting after chapter 243 the following:

   ``CHAPTER 244--INTERCITY PASSENGER RAIL SERVICE CORRIDOR CAPITAL 
                               ASSISTANCE

``Sec.
``24401. Definitions; effective date.
``24402. Capital investment grants to support intercity passenger rail 
                            service.
``24403. Project management oversight.
``24404. Use of capital grants to finance first-dollar liability of 
                            grant project.
``24405. Authorization of appropriations.
``Sec. 24401. Definitions; effective date.
    ``(a) Definitions.--In this chapter:
            ``(1) Applicant.--The term `applicant' means a State, an 
        Interstate Compact (including the Northeast Corridor Compact as 
        specified in section 103 of the Passenger Rail Investment 
        Reform Act), or a public agency established by one or more 
        States and having responsibility for providing intercity 
        passenger rail service.
            ``(2) Capital project.--The term `capital project' means a 
        project within a corridor plan or program for--
                    ``(A) acquiring, constructing, supervising or 
                inspecting equipment or a facility for use in intercity 
                passenger rail service, expenses incidental to the 
                acquisition or construction (including designing, 
                engineering, location surveying, mapping, environmental 
                studies, and acquiring rights-of-way), payments for the 
                capital portions of rail trackage rights agreements, 
                passenger rail-related intelligent transportation 
                systems, highway-rail grade crossing improvements on 
                routes used for intercity passenger rail service, 
                relocation assistance, acquiring replacement housing 
                sites, and acquiring, constructing, relocating, and 
                rehabilitating replacement housing;
                    ``(B) rehabilitating, remanufacturing or 
                overhauling rail rolling stock and facilities used 
                primarily in intercity passenger rail service; or
                    ``(C) the first-dollar liability costs for 
                insurance related to the provision of intercity 
                passenger rail service.
            ``(3) Intercity passenger rail service.--The term 
        `intercity passenger rail service' means transportation 
        services with the primary purpose of passenger transportation 
        between towns, cities, and metropolitan areas by rail, 
        including high-speed rail.
    ``(b) Effective Date.--This chapter is effective on the first day 
of year 2.
``Sec. 24402. Capital investment grants to support intercity passenger 
              rail service
    ``(a) General Authority.--
            ``(1) Grants.--The Secretary of Transportation may make 
        grants under this section to an applicant to assist in 
        financing the capital costs of facilities and equipment 
        necessary to provide intercity passenger rail transportation.
            ``(2) Terms and conditions.--The Secretary shall require 
        that a grant under this section be subject to the terms, 
        conditions, requirements, and provisions the Secretary decides 
        are necessary or appropriate for the purposes of this section, 
        including requirements for the disposition of net increases in 
        value of real property resulting from the project assisted 
        under this section.
            ``(3) Limitation.--A grant under this section may not be 
        made for a project or program of projects that qualifies for 
        financial assistance under chapter 53 of this title.
    ``(b) Project as Part of Approved Program.--
            ``(1) In general.--The Secretary may not approve a grant 
        for a project under this section unless the Secretary finds 
        that the project is part of an approved corridor plan and 
        program developed under section 5303 of this title and that the 
        applicant or recipient has or will have the legal, financial, 
        and technical capacity to carry out the project (including 
        safety and security aspects of the project), satisfactory 
        continuing control over the use of the equipment or facilities, 
        and the capability and willingness to maintain the equipment or 
        facilities.
            ``(2) Eligibility information.--An applicant shall provide 
        sufficient information upon which the Secretary can make the 
        findings required by this subsection.
            ``(3) Proposed operator justification.--If an applicant has 
        not selected the proposed operator of its service 
        competitively, the applicant shall provide written 
        justification to the Secretary showing why the proposed 
        operator is the best, taking into account price and other 
        factors, and that use of the proposed operator will not 
        increase the capital cost of the project.
            ``(4) Rail agreement.--An applicant shall demonstrate that 
        it has agreed with the railroad over which the intercity 
passenger rail service will operate concerning the applicant's 
operating and capital plans.
    ``(c) Letters of Intent, Full Funding Grant Agreements, and Early 
Systems Work Agreements.--
            ``(1) Letter of intent.--
                    ``(A) The Secretary may issue a letter of intent to 
                an applicant announcing an intention to obligate, for a 
                major capital project under this section, an amount 
                from future available budget authority specified in law 
                that is not more than the amount stipulated as the 
                financial participation of the Secretary in the 
                project.
                    ``(B) At least 30 days before issuing a letter 
                under subparagraph (A) of this paragraph or entering 
                into a full funding grant agreement, the Secretary 
                shall notify in writing the Committee on Transportation 
                and Infrastructure of the House of Representatives and 
                the Committee on Commerce, Science, and Transportation 
                of the Senate and the House of Representatives and 
                Senate Committees on Appropriations of the proposed 
                letter or agreement. The Secretary shall include with 
                the notification a copy of the proposed letter or 
                agreement as well as the evaluations and ratings for 
                the project.
                    ``(C) The issuance of a letter is deemed not to be 
                an obligation under sections 1108(c) and (d), 1501, and 
                1502(a) of title 31, or an administrative commitment.
                    ``(D) An obligation or administrative commitment 
                may be made only when amounts are appropriated.
            ``(2) Full funding agreement.--
                    ``(A) The Secretary may make a full funding grant 
                agreement with an applicant. The agreement shall--
                            ``(i) establish the terms of participation 
                        by the United States 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 
                        completing the project, including a period 
                        extending beyond the period of an 
                        authorization; and
                            ``(iv) make timely and efficient management 
                        of the project easier according to the law of 
                        the United States.
                    ``(B) An agreement under this paragraph obligates 
                an amount of available budget authority specified in 
                law and may include a commitment, contingent on amounts 
                to be specified in law in advance for commitments under 
                this paragraph, to obligate an additional amount from 
                future available budget authority specified in law. The 
                agreement shall state that the contingent commitment is 
                not an obligation of the Government and is subject to 
                subject to the availability of appropriations made by 
                Federal law and to Federal laws in force on or enacted 
                after the date of the contingent commitment. Interest 
                and other financing costs of efficiently carrying out a 
                part of the project within a reasonable time are a cost 
                of carrying out the project under a full funding grant 
                agreement, except that eligible costs may not be more 
                than the cost of the most favorable financing terms 
                reasonably available for the project at the time of 
                borrowing. The applicant shall certify, in a way 
                satisfactory to the Secretary, that the applicant has 
                shown reasonable diligence in seeking the most 
                favorable financing terms.
            ``(3) Early systems work agreement.--
                    ``(A) The Secretary may make an early systems work 
                agreement with an applicant if a record of decision 
                under the National 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.
                    ``(B) 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 activities the Secretary decides are 
                appropriate to make efficient, long-term project 
                management easier. A work agreement shall cover the 
                period of time the Secretary considers appropriate. The 
                period may extend beyond the period of current 
                authorization. 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 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. If an applicant does not 
                carry out the project for reasons within the control 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) Limit on total obligations and commitments.--The 
        total estimated amount of future obligations of the Government 
        and contingent commitments to incur obligations covered by all 
        outstanding letters of intent, full funding grant agreements, 
        and early systems work agreements may be not more than the 
        amount authorized under section 24405 of this title, less an 
        amount the Secretary reasonably estimates is necessary for 
        grants under this section not covered by a letter. The total 
        amount covered by new letters and contingent commitments 
        included in full funding grant agreements and early systems 
        work agreements may be not more than a limitation specified in 
        law.
    ``(d) Federal Share of Net Project Cost.--
            ``(1) In general.--
                    ``(A) Based on engineering studies, studies of 
                economic feasibility, and information on the expected 
                use of equipment or facilities, the Secretary shall 
                estimate the net project cost.
                    ``(B) A grant for the project shall not exceed the 
                specified percentage of the project net capital cost 
                established for the year the grant is approved, as 
                follows:
                            ``(i) 100 percent in the case of approval 
                        for year 2.
                            ``(ii) 80 percent in the case of approval 
                        for year 3.
                            ``(iii) 60 percent in the case of approval 
                        for year 4.
                            ``(iv) 50 percent in the case of approval 
                        for year 5, and thereafter.
                    ``(C) The Secretary shall give priority in 
                allocating future obligations and contingent 
                commitments to incur obligations to grant requests 
                seeking a lower federal share of the project net 
                capital cost.
            ``(2) Additional funding.--Up to an additional 30 percent 
        of project net capital cost may be funded from amounts 
        appropriated to or made available to a department or agency of 
        the Federal Government that are eligible to be expended for 
        transportation.
    ``(e) Undertaking Projects in Advance.--
            ``(1) In general.--The Secretary may pay the Federal share 
        of the net capital project cost to an applicant that carries 
        out any part of a project described in this section according 
        to all applicable procedures and requirements if--
                    ``(A) the applicant applies for the payment;
                    ``(B) the Secretary approves the payment; and
                    ``(C) before carrying out a 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) Interest costs.--The cost of carrying out part of a 
        project includes the amount of interest earned and payable on 
        bonds issued by the applicant to the extent proceeds of the 
        bonds are expended in carrying out the part. The amount of 
        interest includable as cost under this paragraph may not be 
        more than the most favorable interest terms reasonably 
        available for the project at the time of borrowing. The 
        applicant shall certify, in a manner satisfactory to the 
        Secretary, that the applicant has shown reasonable diligence in 
        seeking the most favorable financial terms.
            ``(3) Use of cost indices.--The Secretary shall consider 
        changes in capital project cost indices when determining the 
        estimated cost under paragraph (2) of this subsection.
``Sec. 24403. Project management oversight
    ``(a) Project Management Plan Requirements.--To receive Federal 
financial assistance for a major capital project under this chapter, an 
applicant shall prepare and carry out a project management plan 
approved by the Secretary of Transportation. The plan shall provide 
for--
            ``(1) adequate recipient staff organization with well-
        defined reporting relationships, statements of functional 
        responsibilities, job descriptions, and job qualifications;
            ``(2) a budget covering the project management 
        organization, appropriate consultants, property acquisition, 
        utility relocation, systems demonstration staff, audits, and 
        miscellaneous payments the recipient may be prepared to 
        justify;
            ``(3) a construction schedule for the project;
            ``(4) a document control procedure and recordkeeping 
        system;
            ``(5) a change order procedure that includes a documented, 
        systematic approach to handling the construction change orders;
            ``(6) organizational structures, management skills, and 
        staffing levels required throughout the construction phase;
            ``(7) quality control and quality assurance functions, 
        procedures, and responsibilities for construction, system 
        installation, and integration of system components;
            ``(8) material testing policies and procedures;
            ``(9) internal plan implementation and reporting 
        requirements;
            ``(10) criteria and procedures to be used for testing the 
        operational system or its major components;
            ``(11) periodic updates of the plan, especially related to 
        project budget and project schedule, financing, and ridership 
        estimates; and
            ``(12) the recipient's commitment to submit a project 
        budget and project schedule to the Secretary each month.
    ``(b) Secretarial Oversight.--
            ``(1) In general.--The Secretary may use no more than 0.5 
        percent of amounts made available in a fiscal year for capital 
        projects under this chapter to enter into contracts to oversee 
        the construction of such projects.
            ``(2) Use of funds.--The Secretary may use amounts 
        available under paragraph (1) of this subsection to make 
        contracts for safety, procurement, management, and financial 
        compliance reviews and audits of a recipient of amounts under 
        paragraph (1).
            ``(3) Federal share.--The Federal Government shall pay the 
        entire cost of carrying out a contract under this subsection.
    ``(c) Access to Sites and Records.--Each recipient of assistance 
under this chapter shall provide the Secretary and a contractor the 
Secretary chooses under subsection (b) of this section with access to 
the construction sites and records of the recipient when reasonably 
necessary.
    ``(d) Regulations.--The Secretary shall prescribe regulations 
necessary to carry out this section. The regulations shall include--
            ``(1) a definition of `major capital project' for this 
        section;
            ``(2) a requirement that oversight begin during the 
        preliminary engineering stage of a project, unless the 
        Secretary finds it more appropriate to begin oversight during 
        another stage of a project, to maximize the transportation 
        benefits and cost savings associated with project management 
        oversight;
            ``(3) a deadline by which all grant applications for a 
        fiscal year shall be submitted that is early enough to permit 
        the Secretary to evaluate all timely applications thoroughly 
        before making grants;
            ``(4) a formula based on population, track miles of 
        railroad, and passenger miles traveled in the prior fiscal year 
        by which one-half of the funds appropriated for capital grants 
        for each fiscal year are to be allocated among the States;
            ``(5) a requirement that, if a State does not timely apply 
        for its share of formula grant funds under paragraph (4) of 
        this subsection, those funds will be made available to other 
        States under paragraph (6) of this subsection; and
            ``(6) criteria by which the Secretary will allocate one-
        half of the funds appropriated for capital grants for each 
        fiscal year, including at least projected ridership, passenger 
        rail and intermodal connections, congestion and air quality 
        mitigation, underserved communities, and the effect of the 
        grant on whether existing service will continue.
``Sec. 24404. Use of capital grants to finance first-dollar liability 
              of grant project
    ``Notwithstanding the requirements of section 24402 of this title, 
the Secretary of Transportation may approve the use of capital 
assistance under this chapter to fund self-insured retention of risk 
for the first tier of liability insurance coverage for rail passenger 
service associated with the capital assistance grant, but the coverage 
may not exceed $20,000,000 per occurrence or $20,000,000 in aggregate 
per year.
``Sec. 24405. Authorization of appropriations
    ``There are authorized to be appropriated to the Secretary of 
Transportation to make capital financial assistance grants under this 
chapter, including administrative expenses, the following amounts:
            ``(1) Such sums as may be necessary in year 2.
            ``(2) Such sums as may be necessary in year 3.
            ``(3) Such sums as may be necessary in year 4.
            ``(4) Such sums as may be necessary in year 5.
            ``(5) Such sums as may be necessary in year 6.''.
    (b) Conforming Amendments.--
            (1) The table of chapters for title 49, United States Code, 
        is amended by inserting the following after the item relating 
        to chapter 243:

``244. INTERCITY PASSENGER RAIL SERVICE CAPITAL ASSISTANCE..   24401''.
            (2) The chapter analysis for subtitle V of title 49, United 
        States Code, is amended by inserting the following after the 
        item relating to chapter 243:

``244. Intercity Passenger Rail Service Capital Assistance..   24401''.

SEC. 302. FINAL REGULATIONS ON APPLICATIONS BY STATES FOR DEVELOPMENT 
              GRANTS.

    Not later than June 1 of year 1, the Administrator of the Federal 
Railroad Administration shall issue final regulations setting forth 
procedures for application and minimum requirements for the award of 
grants on and after the first day of year 2, under chapter 244 of title 
49, United States Code.

SEC. 303. AUTHORITY FOR INTERSTATE COMPACTS FOR CORRIDOR DEVELOPMENT.

    (a) Consent to Compacts.--
            (1) 2 or more States with an interest in a specific form, 
        route, or corridor of intercity passenger rail service 
        (including high speed rail service) may enter into interstate 
        compacts to implement the service, including--
                    (A) retaining an existing service or commencing a 
                new service;
                    (B) assembling rights-of-way; and
                    (C) performing capital improvements, including--
                            (i) the construction and rehabilitation of 
                        maintenance facilities;
                            (ii) the purchase of rolling stock; and
                            (iii) operational improvements, including 
                        communications, signals, and other systems.
            (2) A compact entered into under the authority of this 
        section shall be submitted to Congress for its consent. It is 
        the sense of Congress that rapid consent to the Compact is a 
        priority for the Congress.
    (b) Financing.--
            (1) An interstate compact established by States under 
        subsection (a) may provide that, in order to carry out the 
        compact, the States may--
                    (A) accept contributions from a unit of State or 
                local government or a person;
                    (B) use any Federal or State funds made available 
                for intercity passenger rail service (except funds made 
                available for Amtrak);
                    (C) on such terms and conditions as the States 
                consider advisable--
                            (i) borrow money on a short-term basis and 
                        issue notes for the borrowing; and
                            (ii) issue bonds; and
                    (D) obtain financing by other means permitted under 
                Federal or State law.
            (2) Bonds and other indebtedness incurred under the 
        authority of this subsection shall under no circumstances be 
        backed by the full faith and credit of the United States.
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