[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1505 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1505

 To establish a National Passenger Rail Office, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 30 (legislative day, July 21), 2003

   Mrs. Hutchison (for herself, Mr. Lott, Mr. Burns, and Ms. Snowe) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To establish a National Passenger Rail Office, 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.

    This Act may be cited as the ``American Rail Equity Act of 2003''.

SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or a 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of title 49, 
United States Code.

SEC. 3. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Amendment of title 49, United States Code.
Sec. 3. Table of contents.
                TITLE I--NATIONAL PASSENGER RAIL OFFICE

Sec. 101. Establishment of National Passenger Rail Office.
                TITLE II--NATIONAL PASSENGER RAIL SYSTEM

               Subtitle A--National Passenger Rail System

Sec. 201. National passenger rail system.
          Subtitle B--High-Speed Corridors for Passenger Rail

Sec. 211. Interstate railroad passenger high-speed transportation 
                            policy.
Sec. 212. High-speed rail corridor planning.
Sec. 213. Assistance for establishment of corridors for high-speed rail 
                            service.
               TITLE III--RAIL INFRASTRUCTURE IMPROVEMENT

          Subtitle A--Rail Infrastructure Finance Corporation

Sec. 301. Establishment of corporation.
Sec. 302. Board of directors.
Sec. 303. Officers and employees.
Sec. 304. Nonprofit and nonpolitical nature of the corporation.
Sec. 305. Purpose and activities of corporation.
Sec. 306. Report to Congress.
Sec. 307. Administrative matters.
Sec. 308. Rail infrastructure finance trust.
               Subtitle B--Rail Development Grant Program

Sec. 311. National system improvement grant program.
Sec. 312. Grant program requirements and limitations.
            Subtitle C--Rail Infrastructure Tax Credit Bonds

Sec. 321. Credit to holders of qualified rail infrastructure bonds.
Sec. 322. Annual report by Treasury on rail infrastructure trust 
                            account.
Sec. 323. Issuance of regulations.
Sec. 324. Effective date.
      TITLE IV--RAIL INFRASTRUCTURE AND INTERMODAL TRANSPORTATION

Sec. 401. Intermodal transportation policy.
Sec. 402. State rail plans.

                TITLE I--NATIONAL PASSENGER RAIL OFFICE

SEC. 101. ESTABLISHMENT OF NATIONAL PASSENGER RAIL OFFICE.

    (a) Establishment.--(1) Chapter 1 of title 49, United States Code, 
is amended by inserting after section 107 the following new section:
``Sec. 107A. National Passenger Rail Office
    ``(a) In General.--The National Passenger Rail Office is an office 
in the Department of Transportation.
    ``(b) Head of Office.--The head of the Office is the Director of 
the National Passenger Rail Office who is appointed by the President, 
by and with the advice and consent of the Senate.
    ``(c) Administrative Matters.--
            ``(1) Administrative location.--The Office is located 
        within the Federal Transit Administration for administrative 
        purposes.
            ``(2) Supervision.--The Director of the National Passenger 
        Rail Office reports directly to the Administrator of the 
        Federal Transit Administration.
    ``(d) Duties.--The duties of the Office are as follows:
            ``(1) To carry out the responsibilities of the Office with 
        respect to the national passenger railroad system under chapter 
        251 of this title, including--
                    ``(A) the allocation of funds to the National 
                Passenger Rail Corporation for the operations of the 
                Corporation under section 25005 of this title;
                    ``(B) the responsibilities for the national 
                passenger railroad system set forth under section 25006 
                of this title;
                    ``(C) the responsibilities for the national 
                passenger railroad system route map set forth under 
                section 25007 of this title; and
                    ``(D) the quarterly identification of 
                infrastructure improvement projects for the national 
                passenger railroad system under section 25008 of this 
                title.
            ``(2) To carry out such other responsibilities as may be 
        provided by the Secretary of Transportation or by law.
    ``(e) Funding of Administrative Expenses.--The amount available 
under section 25010(c)(1) of this title each fiscal year shall be 
available for the administrative costs of the Office in such fiscal 
year.''.
    (2) The table of section at the beginning of such chapter is 
amended by inserting after the item relating to section 107 the 
following new item:

``107A. National Passenger Rail Office.''.
    (b) Rate of Pay of Director of Office.--Section 5315 of title 5, 
United States Code, is amended by adding at the end the following:
            ``Director, National Passenger Rail Office.''.

                TITLE II--NATIONAL PASSENGER RAIL SYSTEM

               Subtitle A--National Passenger Rail System

SEC. 201. NATIONAL PASSENGER RAIL SYSTEM.

    (a) In General.--Part C of subtitle V of title 49, United States 
Code, is amended by adding at the end the following new chapter:

             ``CHAPTER 250--NATIONAL PASSENGER RAIL SYSTEM

``Sec.
``25001. Purpose.
``25002. National passenger rail system.
``25003. Designation of Amtrak as National Passenger Rail Corporation.
``25004. National Passenger Rail Corporation: responsibility for 
                            national passenger rail system; status.
``25005. National Passenger Rail Office: allocation of operating funds 
                            to National Passenger Rail Corporation.
``25006. National Passenger Rail Office: responsibility for national 
                            passenger rail system.
``25007. National Passenger Rail Office: responsibility for national 
                            passenger rail system route map.
``25008. National Passenger Rail Office: identification of rail 
                            infrastructure improvement projects for 
                            national passenger rail system.
``25009. Rail infrastructure improvements grant program.
``25010. Construction with other law; preservation and allocation of 
                            authorities.
``25011. Authorizations.
``Sec. 25001. Purpose
    ``The purpose of this chapter is to improve rail passenger service 
in the United States by--
            ``(1) redesignating Amtrak as the National Passenger Rail 
        Corporation; and
            ``(2) reallocating the responsibilities of Amtrak for 
        intercity and commuter rail passenger transportation (and 
        related transportation) among the National Passenger Rail 
        Corporation and the National Rail Passenger Office so that--
                    ``(A) the National Passenger Rail Corporation 
                retains the responsibilities of Amtrak for the 
                provision of such transportation; and
                    ``(B) the National Rail Passenger Office assumes 
                the responsibilities of Amtrak for the equipment and 
                facilities of Amtrak and for the route map of the 
                national passenger rail system.
``Sec. 25002. National passenger rail system
    ``(a) In General.--The system of intercity rail passenger 
transportation (and related transportation), known as the national 
passenger rail system, includes--
            ``(1) the segment of the Northeast Corridor between Boston, 
        Massachusetts, and Washington, D.C.;
            ``(2) rail corridors that have been designated by the 
        Secretary of Transportation as high-speed corridors, but only 
        after they have been improved to permit operation of high-speed 
        service;
            ``(3) long-distance routes of more than 750 miles between 
        endpoints operated by Amtrak as of the date of enactment of the 
        American Rail Equity Act of 2003; and
            ``(4) short-distance corridors or routes operated by 
        Amtrak.
    ``(b) Transportation Requested by States, Authorities, and Other 
Persons.--
            ``(1) Contracts for transportation.--Amtrak and a State, a 
        regional or local authority, or another person may enter into a 
        contract for Amtrak to operate an intercity rail service or 
        route not included in the national rail passenger 
        transportation system upon such terms as the parties thereto 
        may agree.
            ``(2) Discontinuance.--Upon termination of a contract 
        entered into under this subsection, or the cessation of 
        financial support under such a contract, Amtrak may discontinue 
        such service or route, notwithstanding any other provision of 
        law.
``Sec. 25003. Designation of Amtrak as National Passenger Rail 
              Corporation
    ``Effective as of the date of the enactment of the American Rail 
Equity Act of 2003, the portion of Amtrak that is responsible for the 
operations relating to intercity rail passenger transportation and 
commuter rail passenger transportation (and related transportation) 
specified in section 25004(b) of this title is hereby redesignated as 
the National Passenger Rail Corporation.
``Sec. 25004. National Passenger Rail Corporation: responsibility for 
              national passenger rail system; status
    ``(a) Termination of For-Profit Status.--The National Passenger 
Rail Corporation shall not be required to be operated or managed as a 
for-profit corporation.
    ``(b) Limitation of Responsibilities to Transportation and Certain 
Maintenance Facilities.--The Corporation shall have responsibility only 
for the following:
            ``(1) Operations relating to the provision of intercity 
        rail passenger transportation.
            ``(2) Operations relating to the provision of commuter rail 
        passenger transportation.
            ``(3) Operations relating to the transportation of mail and 
        express.
            ``(4) Operations relating to auto-ferry transportation.
            ``(5) Marketing relating to transportation provided under 
        paragraphs (1) through (4).
            ``(6) Facilities for the maintenance of the rolling stock 
        necessary to provide transportation under paragraphs (1) 
        through (4).
    ``(c) Transfer of Other Assets and Responsibilities to National 
Passenger Rail Office.--The Corporation shall transfer to the National 
Passenger Rail Office jurisdiction of all equipment and facilities of 
the Corporation as of the date of the enactment of the American Rail 
Equity Act of 2003 that are not the responsibility of the Corporation 
under subsection (b).
``Sec. 25005. National Passenger Rail Office: allocation of operating 
              funds to National Passenger Rail Corporation
    ``(a) In General.--The National Passenger Rail Office shall, from 
amounts available for a fiscal year under section 25010(c)(2)(A) of 
this title, allocate amounts to the National Passenger Rail Corporation 
in order to permit the Corporation carry out operations for the 
provision of transportation under section 25004(b) of this title.
    ``(b) Allocation on Route-by-Route Basis.--The Office shall 
allocate amounts to the Corporation under subsection (a) on a route-by-
route basis.
    ``(c) Oversight of Expenditures.--The Office shall oversee and 
review expenditures of amounts allocated to the Corporation under 
subsection (a) in order to ensure that the Corporation is utilizing 
amounts so allocated in an appropriate manner.
``Sec. 25006. National Passenger Rail Office: responsibility for 
              national passenger rail system
    ``(a) Northeast Corridor Equipment and Facilities.--The National 
Passenger Rail Office shall have responsibility for all equipment and 
facilities relating to the Northeast Corridor route that are 
transferred to the Office under section 25003(c) of this title.
    ``(b) Pennsylvania Station, New York.--The Office shall treat 
Pennsylvania Station, New York, and the electric power generation 
facilities at Pennsylvania Station for the Northeast Corridor route, as 
a part of the Northeast Corridor route under subsection (a).
    ``(c) Other Equipment and Facilities.--
            ``(1) Operation through lease required.--The Office shall 
        provide for the operation of any equipment and facilities 
        transferred to the Office under section 25004(c) of this title 
        that are not the responsibility of the Office under subsections 
        (a) and (b) through the lease of such equipment and facilities 
        to 1 or more appropriate persons or entities.
            ``(2) Full and open competition.--The Office shall identify 
        any lessee of equipment and facilities under paragraph (1) 
        utilizing procedures for full and open competition.
``Sec. 25007. National Passenger Rail Office: responsibility for 
              national passenger rail system route map
    ``(a) In General.--The National Passenger Rail Office shall have 
responsibility for the modification of routes of the National Passenger 
Rail Corporation.
    ``(b) Failure of On-Time Performance.--
            ``(1) Surveys of on-time performance.--Not later than 12 
        months after the date of the enactment of this American Rail 
        Equity Act of 2003 and every year thereafter, the Office shall 
        determine for each route of the Corporation whether the 
        Corporation met the on-time performance goal for such route 
        during the most recent performance period.
            ``(2) Contingent requirement to preserve routes.--The 
        Office may not discontinue a route of the Corporation as in 
        effect on the date of the enactment of that Act unless the 
        Office determines under paragraph (1) in any year that the 
        Corporation did not meet the on-time performance goal for such 
        route in 3 out of the 5 years immediately preceding the year in 
        which the determination is made.
            ``(3) Transportation rights following failure on on-time 
        performance.--
                    ``(A) Forfeiture of rights.--If the Office 
                determines (in the determination under paragraph (2) 
                that is required to be completed 5 years after the date 
                of the enactment of the American Rail Equity Act of 
                2003) that the Corporation did not meet the on-time 
                performance goal for a route of the Corporation during 
                the most recent performance period, the Corporation 
                shall forfeit to the Office the right to provide 
                passenger rail transportation on such route (including 
                the right to use the tracks of such route to provide 
                such transportation).
                    ``(B) Lease of forfeited rights.--The Office shall 
                lease to an appropriate person or entity the right to 
                provide passenger rail transportation on a route 
                (including the right to use the tracks of such route to 
                provide such transportation) that is forfeited under 
                subparagraph (A). The Office shall identify any lessee 
                of such right to provide rail passenger transportation 
                on a route utilizing procedures for full and open 
                competition.
                    ``(C) Transportation.--A person or entity leasing 
                the right to provide rail passenger transportation on a 
                route under subparagraph (B) shall provide such rail 
                passenger transportation on the route as is specified 
                by the Office in the lease under subparagraph (B). The 
                rail passenger transportation so specified for a route 
                shall be equivalent to the rail passenger 
                transportation scheduled to provided by the Corporation 
                on the route before the forfeiture of the right to 
                provide transportation on the route under subparagraph 
                (A).
                    ``(D) Assistance.--A person or entity providing 
                rail passenger transportation on a route under 
                subparagraph (B) shall be entitled to such assistance 
                under this part, and under any other provision of law, 
                for the provision of such rail passenger transportation 
                as would otherwise have been provided to the 
                Corporation if the Corporation had provided such rail 
                passenger transportation on such route.
                    ``(E) Bonus.--If the Office determines that a 
                person or entity providing rail passenger 
                transportation on a route under subparagraph (B) has 
                met the on-time performance goal for that route during 
                the most recent performance period, the Office may pay 
                such person or entity a bonus in an amount determined 
                appropriate by the Office.
            ``(4) Failure of on-time performance based on lack of 
        access.--
                    ``(A) Notice.--The Corporation shall notify the 
                Office of each allegation of the Corporation that the 
                failure of the Corporation to meet the on-time 
                performance goal for a route is due to the denial of 
                access to the tracks of the route by the rail carrier 
                owning the route.
                    ``(B) Transmittal.--Amtrak shall transmit to the 
                Surface Transportation Board each allegation received 
by the Office under subparagraph (A).
                    ``(C) Investigation.--The Board shall investigate 
                each allegation transmitted under subparagraph (B).
                    ``(D) Civil penalties.--If as a result of an 
                investigation under subparagraph (C) the Board verifies 
                an allegation under subparagraph (A), the Board may 
                impose a civil penalty on the rail carrier that is the 
                subject of the allegation in such amount as the Board 
                considers appropriate.
            ``(5) Definitions.--In this subsection:
                    ``(A) On-time performance goal.--Within 12 months 
                after the date of enactment of the American Rail Equity 
                Act of 2003, the National Rail Office, after 
                consulation with Amtrak, shall establish criteria for 
                determining what attributes characterize an `on-time 
                performance goal'. In the case of a route, the criteria 
                shall be based upon at least 80 percent of the trains 
                scheduled to provide passenger rail transportation on 
                the route during the most recent performance period 
                arriving not later than their scheduled arrival time.
                    ``(B) Performance period.--The term `performance 
                period' means the 12-month period ending on the date a 
                determination is made regarding whether the trains 
                scheduled to provide passenger rail transportation on a 
                route met their on-time performance goal.
    ``(c) Additional Routes.--
            ``(1) Additional routes.--The Office may establish 1 or 
        more additional routes for the national rail passenger system 
        if the Office determines pursuant to the study under section 
        502 of the American Rail Equity Act of 2003 that the 
        establishment of such route or routes is feasible and 
        advisable.
            ``(2) Corridors for high-speed rail service.--The Office 
        may add to the national passenger rail system any corridor for 
        high-speed rail service established pursuant to section 26104 
        of this title.
``Sec. 25008. National Passenger Rail Office: identification of rail 
              infrastructure improvement projects for national 
              passenger rail system
    ``(a) Identification of Rail Infrastructure Improvement Projects.--
            ``(1) In general.--The National Passenger Rail Office 
        shall, on a quarterly basis, identify the rail infrastructure 
        improvement projects that are advisable to improve or enhance 
        the operations of the national passenger rail system, including 
        operations in the Northeast Corridor.
            ``(2) Nature of improvements.--The infrastructure 
        improvements covered by rail infrastructure improvement 
        projects under paragraph (1) may include--
                    ``(A) track and other capital improvements;
                    ``(B) the acquisition of rights-of-way; and
                    ``(C) such other improvements as the Office 
                considers advisable to improve or enhance the 
                operations of the national passenger rail system.
            ``(3) State input.--Recommendations of States for projects 
        for identification under paragraph (1) shall be submitted to 
        the National Passenger Rail Office in accordance with such 
        requirements as the Director of the Office may prescribe.
    ``(b) Information on Potential Projects.--A rail carrier seeking to 
carry out a rail infrastructure improvement project for purposes of 
subsection (a) shall submit to the Office such information on the 
project as the Director of the Office shall require, including--
            ``(1) the nature of the infrastructure improvements under 
        the project;
            ``(2) the cost of the infrastructure improvements; and
            ``(3) an assessment of the extent to which the 
        infrastructure improvements will improve or enhance the 
        operations of the national passenger rail system.
    ``(c) Reports to National Rail Transportation Financing 
Corporation.--
            ``(1) In general.--The Director of the Office shall, on a 
        quarterly basis, submit to the National Rail Transportation 
        Financing Corporation a report setting forth the rail 
        infrastructure improvement projects identified under subsection 
        (a) during the preceding quarter.
            ``(2) Report elements.--Each report under paragraph (1) 
        shall contain such information as the Director of the Office 
        and the Corporation jointly consider appropriate in order--
                    ``(A) to fully inform the Corporation of the 
                nature, cost, benefits, and priority of each rail 
                infrastructure improvement project identified in such 
                report; and
                    ``(B) to permit the Corporation to evaluate the 
                advisability of making a grant for each such rail 
                infrastructure improvement project under 306 of the 
                American Rail Equity Act of 2003.
``Sec. 25009. Rail infrastructure improvements grant program
    ``The National Passenger Rail Office may make grants for rail 
infrastructure improvement projects identified under section 25008 of 
this title.
``Sec. 25010. Construction with other law; preservation and allocation 
              of authorities
    ``(a) Construction.--The provisions of this chapter supersede any 
provisions of this part, and any other provisions of law, that are 
inconsistent with the provisions of this chapter.
    ``(b) Preservation of Authorities.--
            ``(1) National passenger rail office.--For purposes of 
        carrying out its responsibility under this chapter, including 
        the operation and maintenance of facilities under section 
        25005(c) of this title, the National Passenger Rail Office may 
        utilize any power or authority of Amtrak under this part, or 
        under any other provision of law, to the extent that such power 
        or authority is not inconsistent with a provision of this 
        chapter, as if the Office were Amtrak.
            ``(2) National passenger rail authority.--For purposes of 
        carrying out its responsibilities under section 25004(b) of 
        this title, the National Passenger Rail Corporation may utilize 
        any power or authority of Amtrak under this part, or under any 
        other provision of law, to the extent that such power or 
        authority is not inconsistent with a provision of this chapter, 
        as if the Corporation were Amtrak.
    ``(c) Memorandum of Understanding.--The Office and the Corporation 
shall, subject to the supervision and concurrence of the Administrator 
of the Federal Transit Administration, enter into a memorandum of 
understanding allocating among the Office and the Corporation the 
authorities, powers, and responsibilities of Amtrak under this part, 
and under any other provision of law, in a manner consistent with the 
provisions of this chapter.
    ``(d) References.--
            ``(1) National passenger rail authority.--Any reference to 
        Amtrak in any law, regulation, map, document, record, or other 
        paper of the United States with respect to the performance of 
        any function or activity that is retained by the National 
        Passenger Rail Corporation under this chapter shall be 
        considered to be a reference to the National Passenger Rail 
        Corporation.
            ``(2) National passenger rail office.--Any reference to 
        Amtrak in any law, regulation, map, document, record, or other 
        paper of the United States with respect to the performance of 
        any function or activity that is assumed by the National 
        Passenger Rail Office under this chapter shall be considered to 
        be a reference to the National Passenger Rail Office.
``Sec. 25011. Authorizations
    ``(a) In General.--There are authorized to be appropriated 
$2,000,000,000 for each of fiscal years 2004 through 2009 for the 
operations of the National Passenger Rail Corporation under this 
chapter.
    ``(b) Allocations.--To the extent provided in appropriations Acts, 
$3,000,000 of the amount appropriated pursuant to the authorization of 
appropriations in subsection (a) in any fiscal year shall be available 
for the National Passenger Rail Office for the administrative expenses 
of the Office in such fiscal year.''.
    (b) Clerical Amendment.--The table of chapters at the beginning of 
subtitle V of title 49, United States Code, is amended by inserting 
after the item relating to chapter 249 the following new item:

``250. NATIONAL PASSENGER RAILROAD SYSTEM...................   25001''.

          Subtitle B--High-Speed Corridors for Passenger Rail

SEC. 211. INTERSTATE RAILROAD PASSENGER HIGH-SPEED TRANSPORTATION 
              POLICY.

    (a) In General.--Chapter 261 is amended by inserting before section 
26101 the following:
``Sec. 26100. Policy
    ``The Congress declares that it is the policy of the United States 
that designated high-speed railroad passenger transportation corridors 
are the building blocks of an interconnected interstate railroad 
passenger system that serves the entire Nation.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 261 is 
amended by inserting before the item relating to section 26101 the 
following:

``26100. Policy''.

SEC. 212. HIGH-SPEED RAIL CORRIDOR PLANNING.

    (a) In General.--Section 26101(a) is amended to read as follows:
    ``(a) Planning.--
            ``(1) In general.--The Secretary of Transportation shall 
        provide planning assistance to States or group of States and 
        other public agencies promoting the development of high-speed 
        rail corridors designated by the Secretary under section 104(d) 
        of title 23.
            ``(2) Secretary may provide direct or financial 
        assistance.--The Secretary may provide planning assistance 
        under paragraph (1) directly or by providing financial 
        assistance to a public agency or group of public agencies to 
        undertake planning activities approved by the Secretary. Not 
        less than 20 percent of the publicly financed planning costs 
        associated with projects assisted under this chapter shall come 
        from non-Federal sources. State matching contributions may not 
        be derived, directly or indirectly, from Federal funds.''.
    (b) Conforming and Other Amendments to Section 26101.--Section 
26101 is further amended--
            (1) by striking subsection (c)(2) and inserting the 
        following:
            ``(2) the extent to which the proposed planning focuses on 
        high-speed rail systems, giving a priority to systems which 
        will achieve sustained speeds of 125 miles per hour or greater 
        and projects involving dedicated rail passenger rights-of-
        way;'';
            (2) by inserting ``and'' after the semicolon in subsection 
        (c)(12);
            (3) by striking ``completed; and'' in subsection (c)(13) 
        and inserting ``completed.''; and
            (4) by striking subsection (c)(14).
    (c) Conforming Amendment.--Section 26105(2)(A) is amended by 
striking ``more than 125 miles per hour;'' and inserting ``90 miles per 
hour or more;''.
    (d) Financial Assistance To Include Loans and Loan Guarantees.--
Section 26105(1) is amended by inserting ``loans, loan guarantees,'' 
after ``contracts,''.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation such sums as may be 
necessary for each of fiscal years 2004 through 2008 to provide 
planning assistance under section 26101(a) of title 49, United States 
Code, as amended by subsection (a).

SEC. 213. ASSISTANCE FOR ESTABLISHMENT OF CORRIDORS FOR HIGH-SPEED RAIL 
              SERVICE.

    (a) In General.--Chapter 261 of title 49, United States Code, is 
amended--
            (1) by redesignating sections 26104 and 26105 as sections 
        26105 and 26106, respectively; and
            (2) by inserting after section 26103 the following new 
        section 26104:
``Sec. 26104. Additional support for establishment of high-speed rail 
              corridors
    ``(a) Purpose.--The purpose of this section is to facilitate the 
establishment of a national network of corridors for high-speed rail 
service.
    ``(b) Corporation To Make Grants.--The National Rail Transportation 
Financing Corporation under title III of the American Rail Equity Act 
of 2003 may make grants of financial assistance to individual States or 
compacts of States for the establishment of corridors for high-speed 
rail service.
    ``(c) Application.--A State or compact of States seeking a grant 
under this section shall submit to the Corporation an application 
therefor in such form, and including such information, as the 
Corporation shall require.
    ``(d) Matching Requirement.--A State or compact of States receiving 
a grant under this section for activities relating to the establishment 
of a corridor for high-speed rail service shall bear not less than 80 
percent of the costs of the activities funded by the grant.
    ``(e) Use of Grant.--A State or compact of States receiving a grant 
under this section shall use the grant amount for purposes of the 
establishment of 1 or more corridors for high-speed rail service, 
including the purchase of rights-of-way for the provision of such 
service.
    ``(f) Treatment of Corridors.--The National Passenger Rail Office 
may treat a corridor established pursuant to this section as part of 
the national passenger rail system under chapter 251 of this title.
    ``(g) Construction With Other Assistance Corporation.--The 
authority to make grants under this section for the establishment of 
corridors for high-speed rail service is in addition to any other 
authority in this chapter, or under any other provision of law, 
relating to the provision of assistance for the establishment of 
corridors for high-speed rail service.
    ``(h) Funding.--Amounts derived from the issuance of qualified rail 
transportation bonds under title III of the American Rail Equity Act of 
2003 and section 54 of the Internal Revenue Code of 1986 shall be 
available for grants under this section.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 261 of such title is amended by striking the items relating to 
section 26104 and 26105 and inserting the following new items:

``26104. Additional support for establishment of high-speed rail 
                            corridors.
``26105. Authorization of appropriations.
``26106. Definitions.''.

               TITLE III--RAIL INFRASTRUCTURE IMPROVEMENT

          Subtitle A--Rail Infrastructure Finance Corporation

SEC. 301. ESTABLISHMENT OF CORPORATION.

    There is established a nonprofit corporation, to be known as the 
``Rail Infrastructure Finance Corporation''. The Rail Infrastructure 
Finance Corporation is not an agency or establishment of the United 
States Government. The Corporation shall be subject to the provisions 
of this subtitle, and, to the extent consistent with this section, to 
the laws of the State of Delaware applicable to corporations not for 
profit.

SEC. 302. BOARD OF DIRECTORS.

    (a) Appointment.-- The Rail Infrastructure Finance Corporation 
shall have a Board of Directors consisting of 9 members appointed by 
the President, by and with the advice and consent of the Senate. Not 
more than 5 members of the Board may be members of the same political 
party.
    (b) Membership Qualifications.--
            (1) In general.--The 9 members of the Board shall be 
        appointed from among citizens of the United States (not regular 
        full-time employees of the United States) who are eminent in 
        the fields of rail transportation, rail financing, and 
        intermodal transportation planning, and the financing and 
        management of large-scale, long-term public-private cooperative 
        projects.
            (2) Representation of specific interests.--Of the 9 members 
        of the Board, 8 of the members shall be selected as follows:
                    (A) Two members from among individuals who 
                represent the interests of freight rail transportation.
                    (B) One member from among individuals who represent 
                the interests of passenger rail transportation.
                    (C) One member from among individuals who represent 
                the interests of the States.
                    (D) One member from among individuals who represent 
                the interests of intercity passenger rail users.
                    (E) One member from among individuals who represent 
                the interests of organized labor.
                    (F) Two members from among persons who are involved 
                in finance.
    (c) Incorporation.--The members initially appointed to the Board of 
Directors shall serve as incorporators and shall take whatever actions 
are necessary to establish the Corporation under the laws of Delaware.
    (d) Terms of Office.--Members of the Board shall be appointed for 
terms of 6 years, except that of the members first appointed, the 
President shall designate 2 to serve a term of 1 year and 2 to serve a 
term of 3 years. No member of the Board shall be eligible to serve in 
excess of 2 consecutive full terms.
    (e) Vacancies.--A member of the Board appointed to fill a vacancy 
occurring before the expiration of the term for which the member's 
predecessor was appointed shall serve only for the remainder of the 
term. Upon the expiration of a member's term, the member shall continue 
to serve until a successor is appointed.
    (f) Attendance Required.--Members of the Board shall attend not 
less than 50 percent of all duly convened meetings of the Board in any 
calendar year. A member who fails to meet the requirement of the 
preceding sentence shall forfeit membership and the President shall 
appoint a new member to fill the resulting vacancy not later than 30 
days after such vacancy is determined by the Chairman of the Board.
    (g) Election of Chairman and Vice Chairman.--Members of the Board 
shall annually elect 1 of their members to be Chairman and elect 1 or 
more of their members as a Vice Chairman or Vice Chairmen.
    (h) Compensation.--The members of the Board shall not, by reason of 
such membership, be considered to be officers or employees of the 
United States. They shall, while attending meetings of the Board or 
while engaged in duties related to such meetings or other activities of 
the Board pursuant to this title, be entitled to receive compensation 
at the rate of $150 per day, including traveltime. No Board member 
shall receive compensation of more than $10,000 in any fiscal year. 
While away from their homes or regular places of business, Board 
members shall be allowed travel and actual, reasonable, and necessary 
expenses.
    (i) Meetings Open to Public.--All meetings of the Board of 
Directors of the Corporation, including any committee of the Board, 
shall be open to the public under such terms, conditions, and 
exceptions as the Board may establish.

SEC. 303. OFFICERS AND EMPLOYEES.

    (a) In General.--The Rail Infrastructure Finance Corporation shall 
have a President, and such other officers as may be named and appointed 
by the Board for terms and at rates of compensation fixed by the Board. 
No officer or employee of the Corporation may be compensated by the 
Corporation at an annual rate of pay that exceeds the rate of basic pay 
for level I of the Executive Schedule under section 5312 of title 5, 
United States Code. No individual other than a citizen of the United 
States may be an officer of the Corporation. Subject to section 302(h), 
no officer of the Corporation may receive any salary or other 
compensation (except for compensation for services on boards of 
directors of other organizations that do not receive funds from the 
Corporation, on committees of such boards, and in similar activities 
for such organizations) from any sources other than the Corporation for 
services rendered during the period of his or her employment by the 
Corporation. Service by any officer on boards of directors of other 
organizations, on committees of such boards, and in similar activities 
for such organizations shall be subject to annual advance approval by 
the Board and subject to the provisions of the Corporation's Statement 
of Ethical Conduct. All officers shall serve at the pleasure of the 
Board.
    (b) Nonpartisan Nature of Appointments.--Except as provided in the 
second sentence of section 302(a), no political test or qualification 
shall be used in selecting, appointing, promoting, or taking other 
personnel actions with respect to officers, agents, and employees of 
the Corporation.

SEC. 304. NONPROFIT AND NONPOLITICAL NATURE OF THE CORPORATION.

    (a) Stock.--The Rail Infrastructure Finance Corporation shall have 
no power to issue any shares of stock, or to declare or pay any 
dividends.
    (b) No Private Benefit.--No part of the income or assets of the 
Corporation shall inure to the benefit of any director, officer, 
employee, or any other individual except as salary or reasonable 
compensation for services.
    (c) Political Activity Prohibited.--The Corporation may not 
contribute to or otherwise support any political party or candidate for 
elective public office.
    (d) Conflicts of Interest.--No director, officer, or employee of 
the Corporation shall in any manner, directly or indirectly, 
participate in the deliberation upon or the determination of any 
question affecting his or her personal interests or the interests of 
any corporation, partnership, or organization in which he or she is 
directly or indirectly interested. Board members shall recuse 
themselves from Board decisions that directly affect either them or 
entities they represent regarding grants and other assistance provided 
to States by the Board.

SEC. 305. PURPOSE AND ACTIVITIES OF CORPORATION.

    (a) Purpose.--The Rail Infrastructure Finance Corporation shall, 
through the issuance of qualified rail infrastructure bonds in 
accordance with section 54 of the Internal Revenue Code of 1986 and 
this title, provide financial support for rail transportation capital 
projects under subtitle B.
    (b) Bond Issuance Corporation.--
            (1) In general.--In order to carry out its purposes, the 
        Corporation is authorized to issue qualified rail 
        infrastructure bonds (as defined in section 54(e) of the 
        Internal Revenue Code of 1986) during the 6-year period 
        beginning October 1, 2003.
            (2) Limitation.--The total face amount of the bonds 
        outstanding under paragraph (1) at any time may not exceed 
        $48,000,000,000.
            (3) No federal guarantee.--
                    (A) Obligations insured by the corporation.--No 
                obligation that is insured, guaranteed, or otherwise 
                backed by the Corporation shall be deemed to be an 
                obligation that is guaranteed by the full faith and 
                credit of the United States.
                    (B) Special rule.--This paragraph shall not affect 
                the determination of whether such obligation is 
                guaranteed for purposes of Federal income taxes.
                    (C) Securities offered by the corporation.--No debt 
                or equity securities of the Corporation shall be deemed 
                to be guaranteed by the full faith and credit of the 
                United States.
            (4) Authority.--To carry out the foregoing purposes and 
        engage in the foregoing activities, the Corporation shall have 
        the usual powers conferred upon a nonprofit corporation under 
        the laws of the State of Delaware.
    (c) Federal Assistance.--The Corporation shall be eligible to 
receive discretionary grants, contracts, gifts, contributions, or 
technical assistance from any department or agency of the Federal 
Government, but only to the extent permitted by law and to the extent 
necessary to carry out the purpose set forth in subsection (a) and the 
activities described in subsection (b).

SEC. 306. REPORT TO CONGRESS.

    (a) In General.--On or before May 15 of each year, the Rail 
Infrastructure Finance Corporation shall submit an annual report for 
the fiscal year ending on September 30 of the preceding year to the 
Committee on Commerce, Science, and Transportation of the Senate and 
the Committee on Transportation and Infrastructure of the House of 
Representatives. The report shall include a comprehensive and detailed 
report of the Corporation's operations, activities, financial 
condition, and accomplishments under this title and such 
recommendations as the Corporation deems appropriate.
    (b) Availability for Testimony.--The officers and directors of the 
Corporation shall be available to testify before those committees with 
respect to such report, the report of any audit made by the Comptroller 
General pursuant to section 307(d)(3), or any other matter which such 
committees may determine.

SEC. 307. ADMINISTRATIVE MATTERS.

    (a) Budget.--The Rail Infrastructure Finance Corporation shall 
establish an annual budget for the Corporation, including the Rail 
Infrastructure Investment Account under subsection (c).
    (b) Implementation Plan.--
            (1) Requirement for plan.--The Corporation shall conduct a 
        study and prepare a plan on how the Corporation can best 
        achieve the purposes and fulfill the requirements of this 
        title.
            (2) Consultation.--In preparing the plan, the Corporation 
        may consult with the Secretary of Transportation, the Secretary 
        of the Treasury, and representatives of State and local 
        governments.
            (3) Other requirements.--The plan, which shall be based on 
        the conclusions resulting from the study conducted under 
        paragraph (1), shall be submitted by the Corporation to the 
        Committee on Commerce, Science, and Transportation of the 
        Senate and the Committee on Transportation and Infrastructure 
        of the House of Representatives not later than January 31, 
        2004. Unless directed otherwise by law, the Corporation shall 
        implement the plan during the first fiscal year beginning after 
        the fiscal year in which the plan is submitted to Congress.
    (c) Rail Infrastructure Investment Account.--
            (1) Establishment.--The Board of Directors for the 
        Corporation shall establish an account to be known as the Rail 
        Infrastructure Investment Account.
            (2) Deposit of bond proceeds.--The Corporation shall 
        deposit the proceeds of sales of any bonds issued under section 
        54 of the Internal Revenue Code of 1986 into the Account.
            (3) Deposit of non-federal contributions.--The Board shall 
        deposit all contributions received under section 304(a) into 
        the Account.
            (4) Disbursements.--The Board shall make available and may 
        disburse, at the beginning of fiscal year 2004 and of each 
        succeeding fiscal year thereafter, such funds as may be 
available for obligation and expenditure from the Account.
            (5) Use of account funds.--Funds in the Account--
                    (A) shall be used by the Corporation for investment 
                purposes through the trust established under section 
                308 to generate an amount sufficient--
                            (i) to repay the principal of the bonds at 
                        their maturity; and
                            (ii) to pay the administrative costs of the 
                        Corporation and the Rail Infrastructure Finance 
                        Trust under section 308; and
                    (B) shall, to the extent of the net spendable 
                proceeds in the account, be held in the Rail 
                Infrastructure Finance Trust established under section 
                308 and be available for distribution as grants of 
                financial assistance under subtitle B.
            (6) Net spendable proceeds defined.--In this subsection, 
        the term `net spendable proceeds', with respect to the Rail 
        Infrastructure Investment Account, means the amount equal to 
        the excess of--
                    (A) the total amount in such Account, over
                    (B) the amount in such Account that is needed for 
                uses under paragraph (5)(A).
    (d) Records and Audit.--
            (1) In general.--The account of the Corporation shall be 
        audited annually in accordance with generally accepted auditing 
        standards by independent certified public accountants or 
        independent licensed public accountants certified or licensed 
        by a regulatory authority of a State or other political 
        subdivision of the United States. The audits shall be conducted 
        at the place or places where the accounts of the Corporation 
        are normally kept. All books, accounts, financial records, 
        reports, files, and all other papers, things, or property 
        belonging to or in use by the Corporation and necessary to 
        facilitate the audits shall be made available to the person or 
        persons conducting the audits; and full facilities for 
        verifying transactions with the balances or securities held by 
        depositories, fiscal agents and custodians shall be afforded to 
        such person or persons.
            (2) Audit report.--The report of each such independent 
        audit shall be included in the annual report required by 
        section 306. The audit report shall set forth the scope of the 
        audit and include such statements as are necessary to present 
        fairly the Corporation's assets and liabilities, surplus or 
        deficit, with an analysis of the changes therein during the 
        year, supplemented in reasonable detail by a statement of the 
        Corporation's income and expenses during the year, and a 
        statement of the sources and application of funds, together 
        with the independent auditor's opinion of those statements.
            (3) Audit by comptroller general.--The financial 
        transactions of the Corporation may be audited by the General 
        Accounting Office in accordance with the principles and 
        procedures applicable to commercial corporate transactions and 
        under such rules and regulations as may be prescribed by the 
        Comptroller General of the United States. Any such audit shall 
        be conducted at the place or places where accounts of the 
        Corporation are normally kept. The representative of the 
        General Accounting Office shall have access to all books, 
        accounts, records, reports, files, and all other papers, 
        things, or property belonging to or in use by the Corporation 
        pertaining to its financial transactions and necessary to 
        facilitate the audit, and they shall be afforded full 
        facilities for verifying transactions with the balances or 
        securities held by depositories, fiscal agents, and custodians. 
        All such books, accounts, records, reports, files, papers and 
        property of the Corporation shall remain in possession and 
        custody of the Corporation.
            (4) GAO report to congress.--A report of each audit under 
        paragraph (3) shall be made by the Comptroller General to the 
        Committee on Commerce, Science, and Transportation of the 
        Senate and the Committee on Transportation and Infrastructure 
        of the House of Representatives. The report shall contain such 
        comments and information as the Comptroller General considers 
        necessary to inform the committees of the financial operations 
        and condition of the Corporation, together with such 
        recommendations with respect thereto as he may deem advisable. 
        The report shall also show specifically any program, 
        expenditure, or other financial transaction or undertaking 
        observed in the course of the audit, which, in the opinion of 
        the Comptroller General, has been carried on or made without 
        authority of law. A copy of each report shall be furnished to 
        the President, to the Secretary, and to the Corporation at the 
        time submitted to the Congress.
            (5) Accounting principles.--
                    (A) Applicable principles.--Not later than 1 year 
                after the date of the enactment of this Act, the 
                Corporation shall develop accounting principles which 
                shall be used uniformly by all entities receiving funds 
                under this title, taking into account organizational 
                differences among various categories of such entities. 
                Such principles shall be designed to account fully for 
                all funds received and expended for purposes of this 
                title by such entities.
                    (B) Consultation.--The Corporation may consult with 
                the Comptroller General and, as appropriate, with 
                others in the development of the accounting principles 
                under subparagraph (A).
            (6) Requirements for recipients.--Each entity receiving 
        funds under this title shall--
                    (A) keep its books, records, and accounts in such 
                form as may be required by the Corporation;
                    (B) either--
                            (i) undergo a biennial audit by independent 
                        certified public accountants or independent 
                        licensed public accountants certified or 
                        licensed by a regulatory authority of a State, 
                        which audit shall be in accordance with 
                        auditing standards developed by the 
                        Corporation, in consultation with the 
                        Comptroller General; or
                            (ii) submit a financial statement in lieu 
                        of the audit required by subparagraph (A) if 
                        the Corporation determines that the cost burden 
                        of such audit on such entity is excessive in 
                        light of the financial condition of such 
                        entity; and
                    (C) furnish biennially to the Corporation a copy of 
                the audit report required pursuant to the subparagraph 
                (B), as well as such other information regarding 
                finances (including an annual financial report) as the 
                Corporation may require.
            (7) Additional recordkeeping.--Any recipient of assistance 
        by grant or contract under this section, other than a fixed 
        price contract awarded pursuant to competitive bidding 
        procedures, shall keep such records as may be reasonably 
        necessary to disclose fully the amount and the disposition by 
        such recipient of such assistance, that total cost of the 
        project or undertaking in connection with which such assistance 
        is given or used, and the amount and nature of that portion of 
        the cost of the projects or undertaking supplied by other 
sources, and such other records as will facilitate an effective audit.
            (8) Access to records.--The Corporation or any of its duly 
        authorized representatives shall have access to any books, 
        documents, papers, and records of any recipient of assistance 
        for the purpose of auditing and examining all funds received 
        from the Corporation. The Comptroller General of the United 
        States or any of his duly authorized representatives also shall 
        have access to such books, documents, papers, and records for 
        the purpose of auditing and examining all funds received from 
        the Corporations during any fiscal year for which Federal funds 
        are available to the Corporation.
            (9) Public inspection.--The Corporation shall maintain the 
        information described in paragraphs (6), (7), and (8) at its 
        offices for public inspection and copying for at least 3 years, 
        according to such reasonable guidelines as the Corporation may 
        issue. This public file shall be updated regularly.

SEC. 308. RAIL INFRASTRUCTURE FINANCE TRUST.

    (a) Establishment.--The Board of Directors of the Rail 
Infrastructure Finance Corporation shall establish the Rail 
Infrastructure Finance Trust (hereafter in this section referred to as 
the ``Trust'') as a trust domiciled in the State of Delaware. The Trust 
shall, to the extent not inconsistent with this Act, be subject to the 
laws of the State of Delaware that are applicable to trusts. The Trust 
shall manage and invest the assets of the Rail Infrastructure Account 
described in section 307(c) that are transferred to it by the Board in 
the manner set forth in this section.
    (b) Not a Federal Agency or Instrumentality.--The Trust is not a 
department, agency, or other instrumentality of the Government of the 
United States and shall not be subject to title 31, United States Code.
    (c) Board of Trustees.--
            (1) Establishment.--The Trust shall have a Board of 
        Trustees.
            (2) Composition.--
                    (A) Appointment.--The Board of Trustees shall 
                consist of 5 members each of whom (hereafter in this 
                title referred to as a ``Trustee'') is appointed by a 
                unanimous vote of the Board of Directors of the Rail 
                Infrastructure Finance Corporation. The Board of 
                Directors, by unanimous vote, may remove any member of 
                the Board of Trustees.
                    (B) Representation of particular interests.--The 5 
                members of the Board of Trustees shall be selected as 
                follows:
                            (i) One from among persons who represent 
                        the interests of the States.
                            (ii) One from among persons who represent 
                        the interests of freight railroads.
                            (iii) One from among persons who represent 
                        the interests of passenger railroads.
                            (iv) One from among persons who represent 
                        the interests of holders of qualified rail 
                        infrastructure bonds issued by the Rail 
                        Infrastructure Finance Corporation.
                            (v) One from among persons whose interests 
                        are independent of interests referred to in the 
                        other clauses of this subparagraph.
            (3) Members not united states officials.--The members of 
        the Board of Trustees may not be considered officers or 
        employees of the Government of the United States.
            (4) Qualifications.--The Trustees shall be appointed only 
        from among persons who have experience and expertise in the 
        management of financial investments. No member of the Board of 
        Directors of the Rail Infrastructure Finance Corporation is 
        eligible to be a Trustee.
            (5) Terms.--Each member of the Board of Trustees shall be 
        appointed for a 3-year term. Any member whose term has expired 
        may serve until such member's successor has taken office, or 
        until the end of the calendar year in which such member's term 
        has expired, whichever is earlier. A vacancy in the Board of 
        Trustees shall not affect the powers of the Board of Trustees 
        and shall be filled in the same manner as the member whose 
        departure caused the vacancy. Any member appointed to fill a 
        vacancy occurring prior to the expiration of the term for which 
        such member's predecessor was appointed shall be appointed for 
        the remainder of such term.
    (d) Powers.--The Board of Trustees shall--
            (1) establish investment policies, including guidelines, 
        and retain independent advisers to assist in the formulation 
        and adoption of the investment guidelines;
            (2) retain independent investment managers to invest the 
        assets of the Trust in a manner consistent with such investment 
        guidelines;
            (3) invest assets in the Trust, pursuant to the policies 
        adopted in paragraph (1);
            (4) pay administrative expenses of the Trust from the 
        assets in the Trust; and
            (5) transfer money to the Rail Infrastructure Investment 
        Account, upon request of the Board of Directors of the Rail 
        Infrastructure Finance Corporation, for bond repayment and 
        administrative expenses, and for grants under subtitle B.
    (e) Reporting Requirements and Fiduciary Standards.--The following 
reporting requirements and fiduciary standards shall apply with respect 
to the Trust:
            (1) Duties of the board of trustees.--The Trust and each 
        member of the Board of Trustees shall discharge the duties of 
        the Trust and the duties of the Trustee, respectively 
        (including the voting of proxies), with respect to the assets 
        of the Trust solely in the interests of the Rail Infrastructure 
        Finance Corporation and the programs funded under this title--
                    (A) for the exclusive purposes of--
                            (i) providing sufficient funds to repay 
                        qualified rail infrastructure bonds issued by 
                        the Rail Infrastructure Finance Corporation, to 
                        fund the administrative costs of the Rail 
Infrastructure Finance Corporation and to provide grants for rail 
capital projects under subtitle B; and
                            (ii) defraying reasonable expenses of 
                        administering the Trust;
                    (B) with the care, skill, prudence, and diligence 
                under the circumstances then prevailing that a prudent 
                person acting in a like capacity and familiar with such 
                matters would use in the conduct of an enterprise of a 
                like character and with like aims;
                    (C) by diversifying investments so as to minimize 
                the risk of large losses and to avoid disproportionate 
                influence over a particular industry or firm, unless 
                under the circumstances it is clearly prudent not to do 
                so; and
                    (D) in accordance with Trust governing documents 
                and instruments insofar as such documents and 
                instruments are consistent with this Act.
            (2) Prohibitions with respect to members of the board of 
        trustees.--A member of the Board of Trustees may not--
                    (A) deal with the assets of the Trust in the 
                Trustee's own interest or for the Trustee's own 
                account;
                    (B) in an individual or in any other capacity, act 
                in any transaction involving the assets of the Trust on 
                behalf of a party (or represent a party) whose 
                interests are adverse to the interests of the Trust and 
                the Rail Infrastructure Finance Corporation; or
                    (C) receive any consideration for the Trustee's own 
                personal account from any party dealing with the assets 
                of the Trust.
            (3) Exculpatory provisions and insurance.--Any provision in 
        an agreement or instrument that purports to relieve a Trustee 
        from responsibility or liability for any responsibility, 
        obligation, or duty under this Act shall be void. Nothing in 
        this paragraph shall be construed to preclude--
                    (A) the Trust from purchasing insurance for its 
                Trustees or for itself to cover liability or losses 
                occurring by reason of the act or omission of a 
                Trustee, if such insurance permits recourse by the 
                insurer against the Trustee in the case of a breach of 
                a fiduciary obligation by such Trustee;
                    (B) a Trustee from purchasing insurance to cover 
                liability under this section from and for his own 
                account; or
                    (C) an employer or an employee organization from 
                purchasing insurance to cover potential liability of 1 
                or more Trustees with respect to their fiduciary 
                responsibilities, obligations, and duties under this 
                section.
            (4) Trustees bonds.--
                    (A) Requirement.--Each Trustee and every person who 
                handles funds or other property of the Trust (hereafter 
                in this section referred to as ``Trust official'') 
                shall be bonded. The bond shall provide protection to 
                the Trust against loss by reason of acts of fraud or 
                dishonesty on the part of any Trust official, directly 
                or through the connivance of others.
                    (B) Amount.--The amount of a bond for a Trustee 
                under this paragraph shall be fixed at the beginning of 
                each fiscal year of the Trust by the Board of Directors 
                of the Rail Infrastructure Finance Corporation. The 
                amount may not be less than 10 percent of the amount of 
                the funds administered by the Trust. In no case may 
                such bond be less than $1,000 nor more than $500,000, 
                except that the Board of Directors, after consideration 
                of the record, may prescribe an amount in excess of 
                $500,000, subject to the 10 percent minimum requirement 
                in the preceding sentence.
                    (C) Unlawful conduct.--It shall be unlawful for--
                            (i) any Trust official to receive, handle, 
                        disburse, or otherwise exercise custody or 
                        control of any of the funds or other property 
                        of the Trust without being bonded as required 
                        by this subsection;
                            (ii) any Trust official, or any other 
                        person having authority to direct the 
                        performance of such functions, to permit such 
                        functions, or any of them, to be performed by 
                        any Trust official, with respect to whom the 
                        requirements of this subsection have not been 
                        met; and
                            (iii) any person to procure any bond 
                        required by this subsection from any surety or 
                        other company or through any agent or broker in 
                        whose business operations such person has any 
                        control or significant financial interest, 
                        direct or indirect.
    (f) Audit and Report.--
            (1) Requirement for annual audit.--The Trust shall annually 
        engage an independent qualified public accountant to audit the 
        financial statements of the Trust.
            (2) Annual management report.--The Trust shall submit an 
        annual management report to be included in the annual report of 
        the Corporation required under section 306. The management 
        report under this paragraph shall include the following 
        matters:
                    (A) A statement of financial position.
                    (B) A statement of operations.
                    (C) A statement of cash flows.
                    (D) A statement on internal accounting and 
                administrative control systems.
                    (E) The report resulting from an audit of the 
                financial statements of the Trust conducted under 
                paragraph (1).
                    (F) Any other comments and information necessary to 
                inform Congress about the operations and financial 
                condition of the Trust.
            (3) Additional copies.--The Trust shall provide the 
        President and the Director of the Office of Management and 
Budget a copy of the management report when it is submitted to 
Congress.
    (g) Enforcement.--The Rail Infrastructure Finance Corporation may 
commence a civil action--
            (1) to enjoin any act or practice by the Trust, its Board 
        of Trustees, or its employees or agents that violates any 
        provision of this Act; or
            (2) to obtain other appropriate relief to redress such 
        violations, or to enforce any provisions of this Act.
    (h) Administrative Matters.--
            (1) Authority.--The Board of Trustees shall have the 
        authority to make rules to govern its operations, employ 
        professional staff, and contract with outside advisers 
        (including the Rail Infrastructure Finance Corporation) to 
        provide legal, accounting, investment advisory, or other 
        services necessary for the proper administration of this 
        section. In the case of a contract for investment advisory 
        services, compensation for such services may be provided on a 
        fixed fee basis or on such other terms and conditions as are 
        customary for such services.
            (2) Quorum and proceedings.--Three members of the Board of 
        Trustees shall constitute a quorum for the Board to conduct 
        business. Investment guidelines shall be adopted by a unanimous 
        vote of the entire Board of Trustees. All other decisions of 
        the Board of Trustees shall be decided by a majority vote of 
        the quorum present. All decisions of the Board of Trustees 
        shall be entered upon the records of the Board of Trustees.
            (3) Compensation of trustees and employees.--The salaries 
        of the Trustees and the employees of the Trust are subject to 
        the limitations in section 303.
            (4) Funding.--The expenses of the Trust and the Board of 
        Trustees that are incurred under this section shall be paid 
        from the Trust.
    (i) Exemption From Tax for Rail Infrastructure Finance Trust.--
Subsection (c) of section 501 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
            ``(29) The Rail Infrastructure Finance Trust established 
        under section 308 of the American Rail Equity Act of 2003.''.

               Subtitle B--Rail Development Grant Program

 SEC. 311. NATIONAL SYSTEM IMPROVEMENT GRANT PROGRAM.

    (a) Grants to States.--The Board of Directors of the Rail 
Infrastructure Finance Corporation may, by grant, provide financial 
assistance to a State, group of States, or the National Railroad 
Passenger Corporation, for, or in connection with, intercity passenger 
rail capital projects that are--
            (1) designated as National System Improvement Projects 
        under section 22506 of title 49, United States Code; and
            (2) as determined by the Board, will significantly benefit 
        the National System, as designated under section 25002(a) of 
        title 49, United States Code, of intercity passenger rail 
        infrastructure or services.
    (b) Project Selection Criteria.--The Board, in selecting the 
recipients of financial assistance to be provided under subsection (a), 
shall--
            (1) give preference to projects that most significantly 
        improve intercity passenger rail service on routes of the 
        National System through increased frequency of on-time 
        performance, reduced trip time, higher ridership, increased 
        service frequency, or other service measures as defined under 
        section 22506 of title 49, United States Code;
            (2) give preference to projects that effect multiple routes 
        or the entire National System;
            (3) require that each proposed project meet all safety 
        requirements that are applicable to the project under law, and 
        give a preference to any project determined by the Board as 
        having provided for particularly high levels of safety;
            (4) encourage intermodal connectivity through projects that 
        provide direct connections between train stations, airports, 
        bus terminals, subway stations, ferry ports, and other modes of 
        transportation;
            (5) ensure a general balance across geographic regions of 
        the United States in providing such assistance and avoid a 
        concentration of a disproportionate amount of such financial 
        assistance in a single project or region of the country;
            (6) favor projects that are expected to have a significant 
        favorable impact on air or highway traffic congestion;
            (7) encourage projects that also improve freight or 
        commuter rail operations;
            (8) favor projects that either--
                    (A) have significant environmental benefits; or
                    (B) are--
                            (i) at a stage of preparation that all 
                        precommencement compliance with environmental 
                        protection requirements has already been 
                        completed; and
                            (ii) ready to be commenced;
            (9) favor projects with positive economic and employment 
        impacts;
            (10) encourage the use of positive train control 
        technologies;
            (11) favor projects that have commitments of funding from 
        non-Federal Government sources in a total amount that exceeds 
        the minimum amount of the non-Federal contribution required 
        under section 315(a);
            (12) ensure that each project is compatible with, and is 
        operated in conformance with--
                    (A) plans developed pursuant to the requirements of 
                sections 134 and 135 of title 23, United States Code;
                    (B) State rail plans under chapter 225 of title 49, 
                United States Code; and
                    (C) the national rail plan; and
            (13) favor projects that enhance national security.
    (c) Amtrak Eligibility.--To receive a grant under this section, the 
National Railroad Passenger Corporation may enter into a cooperative 
agreement with 1 or more States to carry out 1 or more projects on an 
approved State rail plan's ranked list of priority freight and 
passenger rail capital projects developed under section 22504(5) of 
title 49, United States Code, or may submit an independent application 
for a grant for any project designated as a National System Improvement 
Project under section 22506 of title 49, United States Code. Any such 
independent grant request shall be subject to the same selection 
criteria as apply under subsection (b) to projects of States, except 
the criteria set forth in subparagraphs (A) and (B) of subsection 
(b)(12).
    (d) Limitations.--
            (1) Two-year availability.--If any amount provided as a 
        grant to a State or the National Railroad Passenger Corporation 
        under this section is not obligated or expended for the 
        purposes described in subsections (a) and (b) within 2 years, 
        such sums shall be returned to the Board for other national 
        system improvement projects under this section at the 
        discretion of the Board.
            (2) Single project amount.--In awarding grants to States 
        for eligible projects under this section, the Board shall limit 
        the amount of any grant made for a particular project in a 
        fiscal year to not more than 30 percent of the total amount of 
        the funds available for grants under this section for that 
        fiscal year.
            (3) Amtrak.--The total amount of grants made under this 
        section to the National Railroad Passenger Corporation in a 
        fiscal year may not exceed 50 percent of the total amount 
        available under this section for all grants in that fiscal 
        year.
            (4) Northeast corridor projects.--The total amount of 
        grants made under this section for the Northeast Corridor in a 
        fiscal year may not exceed 25 percent of the total amount 
        available under this section for all grants under this section 
        in that fiscal year.
            (5) Other projects.--The total amount of grants made under 
        this section for projects other than projects for the Northeast 
        Corridor in any fiscal year may not exceed 75 percent of the 
        total amount available under this section for all grants under 
        this section in that fiscal year.
            (6) Northeast corridor defined.--In this section, the term 
        ``Northeast Corridor'' has the meaning given that term in 
        section 24102(6) of title 49, United States Code.
    (e) Funding.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary of Transportation for fiscal years 2004 through 
        2009 such sums as may be necessary to carry out subsections (a) 
        through (e) of this section.
            (2) Northeast corridor freight-only track.--
                    (A) In general.--Notwithstanding any other 
                provision of this section, there are authorized to be 
                appropriated to the Secretary of Transportation for the 
                construction of a freight-only track on the Northeast 
                Corridor for fiscal year 2005 $125,000,000, including 
                capital improvements, improvements to signal systems, 
                high-speed interlockings, track, and bridges, such sum 
                to remain available until expended.
                    (B) Financial contribution from other users.--The 
                Secrtary shall consider the feasibility of seeking a 
                financial contribution to the construction of the track 
                and capital improvements related thereto from other 
                users.
                    (C) Project construction.--The Secretary shall 
                coordinate construction of the track with the owner of 
                the freight easement on the Northeast Corridor to 
                ensure that current service commitments for both 
                passenger and freight rail transportation are 
                maintained.

SEC. 312. GRANT PROGRAM REQUIREMENTS AND LIMITATIONS.

    (a) Authorized Uses.--The proceeds of a grant made for a project 
under this subtitle may be used to defray the costs of the project or 
to reimburse the recipient for costs of the project paid by the 
recipient.
    (b) Non-Federal Contribution.--The proceeds of a grant for 1 or 
more projects under this subtitle may be released upon receipt by the 
Board of Directors of the Rail Infrastructure Finance Corporation of 
cash payment by a non-Federal Government source, or 1 or more such 
sources jointly, in an amount not less than the amount equal to 20 
percent of the amount of the grant disbursed. The cash payment may not 
be derived, directly or indirectly, from Federal funds. Amounts 
received under this subsection shall be credited to the Rail 
Infrastructure Investment Account established under section 307(c).
    (c) Preference Involving Donated Property Interests and Services.--
In selecting projects for grant funding under this subtitle, the Board 
may give preference to projects that involve donated right-of-way, 
property, or in-kind services by a public sector or private sector 
entity. The value of a donation under subsection (c) may not be counted 
toward satisfaction of the requirement in subsection (b).
    (d) Flexibility.--Notwithstanding any other provision of this 
subtitle, amounts made available under section 316 may be combined and 
used for projects that significantly benefit both freight rail service 
and intercity passenger rail service.
    (e) Suballocation; Public-Private Partnerships.--
            (1) In general.--A metropolitan planning organization, 
        State transportation department, or other project sponsor may 
        enter into an agreement with any public, private, or nonprofit 
        entity to cooperatively implement any project funded with a 
        grant under this subtitle.
            (2) Forms of participation.--Participation by an entity 
        under paragraph (1) may consist of--
                    (A) ownership or operation of any land, facility, 
                locomotive, rail car, vehicle, or other physical asset 
                associated with the project;
                    (B) cost-sharing of any project expense;
                    (C) carrying out administration, construction 
                management, project management, project operation, or 
                any other management or operational duty associated 
                with the project; and
                    (D) any other form of participation approved by the 
                Board.
            (3) Sub-allocation.--A State may allocate funds under this 
        section to any entity described in paragraph (1).
    (f) Applications.--To seek a grant under this subtitle, a State or, 
in the case of a grant under section 311, the National Railroad 
Passenger Corporation shall submit an application for the grant to the 
Board. The application shall be submitted at such time and contain such 
information as the Board requires.
    (g) Procedures for Grant Award.--The Board shall prescribe 
procedures for the awarding of grants under this subtitle, including 
application and qualification procedures and a record of decision on 
applicant eligibility. The procedures shall include the execution of a 
grant agreement between the applicant and the Board. The Board shall 
initiate rulemaking for the purpose of this subsection not later than 
90 days after the date of the enactment of this Act.

            Subtitle C--Rail Infrastructure Tax Credit Bonds

SEC. 321. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended by adding at the end the following new subpart:

    ``Subpart H--Nonrefundable Credit for Holders of Qualified Rail 
                          Infrastructure Bonds

                              ``Sec. 54. Credit to holders of qualified 
                                        rail infrastructure bonds.

``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified rail infrastructure bond on a credit allowance date of such 
bond which occurs during the taxable year, there shall be allowed as a 
credit against the tax imposed by this chapter for such taxable year an 
amount equal to the sum of the credits determined under subsection (b) 
with respect to credit allowance dates during such year on which the 
taxpayer holds such bond.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified rail infrastructure bond is 25 percent of the 
        annual credit determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified rail infrastructure bond is the 
        product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (2), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of sale of the issue) on outstanding long-term corporate 
        debt obligations (determined under regulations prescribed by 
        the Secretary).
            ``(4) Credit allowance date.--For purposes of this section, 
        the term `credit allowance date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(5) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than this subpart and subpart C).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(e) Qualified Rail Infrastructure Bond.--For purposes of this 
part, the term `qualified rail infrastructure bond' means any bond 
issued as part of an issue if--
            ``(1) the bond is issued by the Rail Infrastructure Finance 
        Corporation and is in registered form,
            ``(2) the term of each bond which is part of such issue 
        does not exceed 20 years,
            ``(3) the payment of principal with respect to such bond is 
        the obligation of the Rail Infrastructure Finance Corporation 
        and not an obligation of the United States,
            ``(4) all proceeds from the sale of the issue are used for 
        the purposes set forth in section 307(c)(5) of the American 
        Rail Equity Act of 2003, and
            ``(5) 95 percent or more of the net spendable proceeds from 
        the sale of such issue are to be used for expenditures incurred 
        after the date of enactment of the American Rail Equity Act of 
        2003 for any project described in section 311, 312, 313, or 314 
        of that Act.
    ``(f) Special Rules Relating to Arbitrage.--
            ``(1) In general.--Subject to paragraph (2), an issue shall 
        be treated as meeting the requirements of this subsection if, 
        as of the date of issuance, the issuer reasonably expects--
                    ``(A) to award grants under sections 311, 312, 313, 
                and 314 of the American Rail Equity Act of 2003 in a 
                total amount that is at least 95 percent of the net 
                spendable proceeds of the issue for 1 or more qualified 
                projects within the 3-year period beginning on such 
                date,
                    ``(B) to incur a binding commitment with a third 
                party--
                            ``(i) to spend at least 10 percent of the 
                        net spendable proceeds of the issue, or to 
                        commence construction, with respect to such 
                        projects within the 6-month period beginning on 
                        such date, and
                            ``(ii) to proceed with due diligence to 
                        complete such projects, and
                    ``(C) to expend the total amount of the net 
                spendable proceeds of the issue.
            ``(2) Rules regarding continuing compliance after 3-year 
        determination.--If at least 95 percent of the net spendable 
        proceeds of the issue is not awarded as grants to be expended 
        for 1 or more qualified projects within the 3-year period 
        beginning on the date of issuance, but the requirements of 
        paragraph (1) are otherwise met, an issue shall be treated as 
        continuing to meet the requirements of paragraph (1) if either 
        the requirement under subparagraph (A) or the requirements 
        under subparagraph (B) are met, as follows:
                    ``(A) The issuer uses all unspent proceeds from the 
                sale of the issue to redeem bonds of the issue within 
                90 days after the end of such 3-year period and 
                disburses any remaining net spendable proceeds to the 
                Secretary of Transportation within 30 days after the 
                end of such 3-year period.
                    ``(B) The issuer--
                            ``(i) awards in grants under sections 311, 
                        312, 313, and 314 of the American Rail Equity 
                        Act of 2003 at least 75 percent of the net 
                        spendable proceeds of the issue for 1 or more 
                        qualified projects within the 3-year period 
                        beginning on the date of issuance, and
                            ``(ii) either--
                                    ``(I) awards in grants under 
                                sections 311, 312, 313, and 314 of the 
                                American Rail Equity Act of 2003 at 
                                least 95 percent of the net spendable 
                                proceeds of the issue for 1 or more 
                                qualified projects within the 4-year 
                                period beginning on the date of 
                                issuance, or
                                    ``(II) pays to the Federal 
                                Government any earnings on the proceeds 
                                from the sale of the issue that accrue 
                                after the end of the 3-year period 
                                beginning on the date of issuance and 
                                uses all unspent proceeds from the sale 
                                of the issue to redeem bonds of the 
                                issue within 90 days after the end of 
                                the 4-year period beginning on the date 
                                of issuance.
    ``(g) Recapture of Portion of Credit Where Cessation of 
Compliance.--
            ``(1) In general.--If any bond which when issued purported 
        to be a qualified rail infrastructure bond ceases to be such a 
        qualified bond, the issuer shall pay to the United States (at 
        the time required by the Secretary) an amount equal to the sum 
        of--
                    ``(A) the aggregate of the credits allowable under 
                this section with respect to such bond (determined 
                without regard to subsection (c)) for taxable years 
                ending during the calendar year in which such cessation 
                occurs and the 2 preceding calendar years, and
                    ``(B) interest at the underpayment rate under 
                section 6621 on the amount determined under 
                subparagraph (A) for each calendar year for the period 
                beginning on the first day of such calendar year.
            ``(2) Failure to pay.--If the issuer fails to timely pay 
        the amount required by paragraph (1) with respect to such bond, 
        the tax imposed by this chapter on each holder of any such bond 
which is part of such issue shall be increased (for the taxable year of 
the holder in which such cessation occurs) by the aggregate decrease in 
the credits allowed under this section to such holder for taxable years 
beginning in such 3 calendar years which would have resulted solely 
from denying any credit under this section with respect to such issue 
for such taxable years.
            ``(3) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (2) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under paragraph (2) shall not be treated as a tax 
                imposed by this chapter for purposes of determining--
                            ``(i) the amount of any credit allowable 
                        under this part, or
                            ``(ii) the amount of the tax imposed by 
                        section 55(19).
    ``(h) Rail Infrastructure Finance Trust.--
            ``(1) In general.--The following amounts shall be held in a 
        trust account by the Rail Infrastructure Finance Corporation:
                    ``(A) An amount of the proceeds from the sale of 
                all bonds designated for purposes of this section that, 
                when combined with amounts described in subparagraphs 
                (B), (C), and (D), is sufficient--
                            ``(i) to ensure the Corporation's ability 
                        to redeem all bonds upon maturity; and
                            ``(ii) to pay the administrative expenses 
                        of the Corporation and the Rail Infrastructure 
                        Finance Trust.
                    ``(B) The amount of any non-Federal contributions 
                required under section 304(a) of the American Rail 
                Equity Act of 2003.
                    ``(C) The temporary period investment earnings on 
                proceeds from the sale of such bonds.
                    ``(D) Any earnings on any amounts described in 
                subparagraph (A), (B), or (C).
            ``(2) Use of funds.--Amounts in the trust account may be 
        used only for investment purposes to generate sufficient funds 
        to redeem qualified rail infrastructure bonds at maturity and 
        pay the administrative expenses of the Corporation and the 
        Trust, and for funding grants as provided for in section 
        307(c)(5)(B) of the American Rail Equity Act of 2003.
            ``(3) Use of remaining funds in trust account.--If the 
        Corporation determines that the amount in the trust account 
        exceeds the amount required to comply with paragraph (2), the 
        Corporation shall transfer the excess to the Rail 
        Infrastructure Finance Trust.
    ``(i) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Net spendable proceeds.--The term `net spendable 
        proceeds' has the meaning give such term in section 307(c)(6) 
        of the American Rail Equity Act of 2003.
            ``(3) Qualified project.--The term `qualified project' 
        means any project that is eligible for grant funding under 
        section 311, 312, 313, or 314 of the American Rail Equity Act 
        of 2003.
            ``(4) Partnership; s corporation; and other pass-thru 
        entities.--Under regulations prescribed by the Secretary, in 
        the case of a partnership, trust, S corporation, or other pass-
        thru entity, rules similar to the rules of section 41(g) shall 
        apply with respect to the credit allowable under subsection 
        (a).
            ``(5) Bonds held by regulated investment companies.--If any 
        qualified rail infrastructure bond is held by a regulated 
        investment company, the credit determined under subsection (a) 
        shall be allowed to shareholders of such company under 
        procedures prescribed by the Secretary.
            ``(6) Reporting.--Issuers of qualified rail infrastructure 
        bonds shall submit reports similar to the reports required 
        under section 149(e).''.
    (b) Amendments to Other Code Sections.--
            (1) Reporting.--Subsection (d) of section 6049 of the 
        Internal Revenue Code of 1986 (relating to returns regarding 
        payments of interest) is amended by adding at the end the 
        following new paragraph:
            ``(8) Reporting of credit on qualified rail infrastructure 
        bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 54(d) and such amounts shall 
                be treated as paid on the credit allowance date (as 
                defined in section 54(b)(4)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A), subsection 
                (b)(4) shall be applied without regard to subparagraphs 
                (A), (H), (I), (J), (K), and (L)(i) of such subsection.
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''.
            (2) Treatment for estimated tax purposes.--
                    (A) Individual.--Section 6654 of such Code 
                (relating to failure by individual to pay estimated 
                income tax) is amended by redesignating subsection (m) 
                as subsection (n) and by inserting after subsection (l) 
                the following new subsection:
    ``(m) Special Rule for Holders of Qualified Rail Infrastructure 
Bonds.--For purposes of this section, the credit allowed by section 54 
to a taxpayer by reason of holding a qualified rail infrastructure bond 
on a credit allowance date shall be treated as if it were a payment of 
estimated tax made by the taxpayer on such date.''.
                    (B) Corporate.--Section 6655 of such Code (relating 
                to failure by corporation to pay estimated income tax) 
                is amended by adding at the end of subsection (g) the 
                following new paragraph:
            ``(5) Special rule for holders of qualified rail 
        infrastructure bonds.--For purposes of this section, the credit 
allowed by section 54 to a taxpayer by reason of holding a qualified 
rail infrastructure bond on a credit allowance date shall be treated as 
if it were a payment of estimated tax made by the taxpayer on such 
date.''.
    (c) Clerical Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        item:

                              ``Subpart H. Nonrefundable Credit for 
                                        Holders of Qualified Rail 
                                        Infrastructure Bonds.''.
            (2) Section 6401(b)(1) is amended by striking ``and G'' and 
        inserting ``G, and H''.

SEC. 322. ANNUAL REPORT BY TREASURY ON RAIL INFRASTRUCTURE TRUST 
              ACCOUNT.

    The Secretary of the Treasury shall annually report to Congress as 
to whether the amount deposited in the trust account established by the 
Rail Infrastructure Finance Corporation under section 54(i) of the 
Internal Revenue Code of 1986, as added by section 321, is sufficient 
to fully repay at maturity the principal of any outstanding qualified 
rail infrastructure bonds issued pursuant to section 54 of such Code 
(as so added), together with amounts expected to be deposited into such 
account, as certified by the Rail Infrastructure Finance Corporation in 
accordance with procedures prescribed by the Secretary of the Treasury.

SEC. 323. ISSUANCE OF REGULATIONS.

    The Secretary of the Treasury shall issue regulations required 
under section 54 of the Internal Revenue Code of 1986 (as added by this 
section 321) not later than 90 days after the date of the enactment of 
this Act.

SEC. 324. EFFECTIVE DATE.

    The amendments made by section 321 shall apply to obligations 
issued after the date of enactment of this Act.

      TITLE IV--RAIL INFRASTRUCTURE AND INTERMODAL TRANSPORTATION

SEC. 401. INTERMODAL TRANSPORTATION POLICY.

    Section 302(e) is amended by striking ``system'' and inserting 
``system, including freight and passenger rail service and maritime 
transportation, including such transportation via inland waterways,''.

SEC. 402. STATE RAIL PLANS.

    (a) In General.--Part B of subtitle V is amended by adding at the 
end the following:

                    ``CHAPTER 225--STATE RAIL PLANS

        ``Sec.
        ``22501. Authority.
        ``22502. Purposes and coordination.
        ``22503. Transparency and review.
        ``22504. Content.
        ``22505. High priority projects.
        ``22506. Approval.
        ``22507. Definitions.
``Sec. 22501. Authority
    ``(a) In General.--Each State may prepare and maintain a State rail 
plan in accordance with the provisions of this chapter.
    ``(b) Requirements.--For the preparation and periodic revision of a 
State rail plan, a State shall--
            ``(1) establish or designate a State rail transportation 
        authority to prepare, maintain, coordinate, and administer the 
        plan;
            ``(2) establish or designate a State rail plan approval 
        authority to approve the plan;
            ``(3) submit the approved plan to the Secretary of 
        Transportation for approval; and
            ``(4) revise and resubmit an approved plan no less 
        frequently than once every 7 years for reapproval by the 
        Secretary.
``Sec. 22502. Purposes and coordination
    ``(a) Purposes.--The purposes of a State rail plan are as follows:
            ``(1) To set forth State policy for all freight and 
        passenger rail transportation, including commuter rail 
        operations, in the State.
            ``(2) To establish the period covered by the State rail 
        plan.
            ``(3) To present priorities and strategies to preserve, 
        enhance, or expand rail service in the State.
            ``(4) To serve as the basis for Federal and State rail 
        investments within the State.
    ``(b) Coordination.--A State rail plan shall be coordinated with 
other State transportation planning goals and programs and set forth 
rail transportation's role within the State transportation system.
``Sec. 22503. Transparency and review
    ``(a) Preparation.--A State shall provide adequate and reasonable 
notice and opportunity for comment and other input to the public, rail 
carriers, commuter and transit authorities operating in, or affected by 
rail operations within the State, units of local government, and other 
interested parties in the preparation and review of its State rail 
plan.
    ``(b) Annual Reviews.--Each State shall transmit an annual report 
on its plan to the Secretary of Transportation. The report shall 
include, for the year preceding the year in which submitted, the 
following matters:
            ``(1) A review of progress made, and actions taken, under 
        the plan during the year.
            ``(2) A schedule of actions to be taken during the current 
        year.
            ``(3) Any modifications made in the plan after approval of 
        the plan by the Secretary or after the submission of the most 
        recent annual report on the plan to the Secretary, including 
        any modifications made to the priority freight or passenger 
        rail capital project list required by section 22504(a)(5) of 
        this title.
    ``(c) Approval of Modified Plans.--Each modification of a State 
rail plan that is determined substantive by the Secretary, including 
any modification to a priority freight or passenger rail capital 
project list required by section 22504(a)(5) of this title, is subject 
to approval (for the purposes of this chapter) by the Secretary.
``Sec. 22504. Content
    ``(a) In General.--Each State rail plan shall contain the 
following:
            ``(1) An evaluation of the existing overall rail 
        transportation system and rail services and facilities within 
        the State, a prioritization of such services and facilities in 
        terms of their contributions to the State's rail and 
        transportation system.
            ``(2) A comprehensive review of all rail lines within the 
        State, including proposed high speed rail corridors and 
        significant rail line segments not currently in service, 
        containing an analysis of the transportation services provided 
        by those lines, their ownership, operating characteristics, the 
        state of their infrastructure (including capital and 
        maintenance requirements), and the economic and environmental 
        impact of those lines.
            ``(3) A statement of freight and passenger rail service 
        objectives, including minimum service levels, for rail 
        transportation routes in the State.
            ``(4) A general analysis and quantification of rail's 
        transportation, economic, and environmental impacts in the 
        State, including congestion mitigation, trade and economic 
        development, air quality, land-use, energy-use, and community 
        impacts.
            ``(5) A long-range rail service and investment program for 
        current and future freight and passenger services in the State 
        that meets the requirements of subsection (b).
            ``(6) A statement of rail financing issues in the State, 
        including a list of current and prospective capital and 
        operating funding resources, public subsidies, State and 
        Federal taxation, and other financial policies relating to rail 
        service and rail infrastructure development.
            ``(7) A statement of rail service issues within the State, 
        such as congestion and capacity, and current system 
        deficiencies on a regional, intrastate, and interstate basis, 
        that reflects consultation with neighboring States and 
        describes any coordination of regional rail service.
            ``(8) A review of major passenger and freight intermodal 
        rail connections and facilities within the State, including 
        seaports, and options to maximize service integration and 
        efficiency between rail and other modes of transportation 
        within the State.
            ``(9) A description of new technology that relates to rail 
        transportation within the State, including logistics and 
        process improvements.
            ``(10) A review of plans and projects within the State to 
        improve rail transportation safety and security, including all 
        major projects funded under section 130 of title 23.
            ``(11) A performance evaluation of passenger rail services 
        operating in the State, including possible improvements in 
        those services, and a description of strategies to achieve 
        those improvements.
            ``(12) A description of activities by regional planning 
        agencies, regional transportation authorities, and 
        municipalities in the State on freight and passenger rail 
        service within the State, or in the region in which the State 
        is located, including a presentation of any recommendations 
        made by such agencies, authorities, and municipalities.
            ``(13) A compilation of studies and reports on high-speed 
        rail corridor development within the State not included in a 
        previous plan under this chapter, and a plan for funding any 
        recommended development of such corridors in the State.
            ``(14) A statement that the State is in compliance with the 
        requirements of section 22102.
    ``(b) Long-Range Service and Investment Program.--
            ``(1) Program content.--A long-range rail service and 
        investment program included in a State rail plan under 
        subsection (a)(5) shall include the following matters:
                    ``(A) Two ranked lists for rail capital projects, 
                one for priority freight rail capital projects and one 
                for priority passenger rail capital projects.
                    ``(B) A detailed funding plan for the projects.
            ``(2) Project list content.--The ranked list of priority 
        freight and passenger rail capital projects shall contain--
                    ``(A) a description of the anticipated public and 
                private benefits of each such project; and
                    ``(B) a statement of the correlation between--
                            ``(i) private funding contributions for the 
                        projects; and
                            ``(ii) the private benefits.
            ``(3) Considerations for project list.--In preparing the 
        ranked list of priority freight and passenger rail capital 
        projects, a State rail transportation authority shall take into 
        consideration the following matters:
                    ``(A) Contributions made by non-Federal Government 
                and non-State sources through user fees, matching 
                funds, or other private capital involvement.
                    ``(B) Rail capacity and congestion effects.
                    ``(C) Highway and transportation system congestion 
                mitigation.
                    ``(D) Regional balance.
                    ``(E) Environmental impact.
                    ``(F) Competitive and service impact for rail 
                carriers and shippers.
                    ``(G) Preservation of rail service.
                    ``(H) Economic and employment impacts.
                    ``(I) Projected ridership for passenger projects.
    ``(c) Waiver.--The Secretary may waive the any requirement of 
subsection (a), except the requirement in paragraph (5) of such 
subsection, upon application under circumstances that the Secretary 
determines appropriate.
``Sec. 22505. High priority projects
    ``(a) Designation of Projects.--The Secretary of Transportation may 
designate as a high priority project any project that meets both of the 
following criteria:
            ``(1) The project is on a ranked list of priority freight 
        and passenger rail capital projects that is included in a State 
        rail plan under section 22504(5).
            ``(2) The project focuses on key rail congestion points 
        that are selected by the Secretary--
                    ``(A) on the basis of national benefits to the rail 
                transportation system; and
                    ``(B) coordinated with the national rail plan.
    ``(b) Preferred Projects.--The Secretary, in designating high 
priority projects, shall give preference to--
            ``(1) projects that have national significance for--
                    ``(A) improving the national rail network and the 
                Nation's transportation system;
                    ``(B) ensuring particularly high levels of safety;
                    ``(C) increasing intermodal connectivity by 
                providing or improving direct connections between rail 
                facilities and other modes of transportation;
                    ``(D) significantly affecting highway, aviation, or 
                maritime capacity, congestion, or safety;
                    ``(E) improving both intercity passenger rail an 
                freight rail services;
                    ``(F) enhancing rail completion or freight rail 
                service for shippers;
                    ``(G) causing positive economic and employment 
                results;
                    ``(H) producing significant environmental or 
                community benefits;
                    ``(I) having received financial commitments and 
                other support from numerous entities such as States, 
                local governments, or private entities;
                    ``(J) enhancing international trade;
                    ``(K) enhancing national security; or
                    ``(L) employing positive train control 
                technologies; and
            ``(2) projects that are at the stage of preparation that 
        all precommencement compliance with environmental protection 
        requirements has been completed and the projects are ready to 
        commence.
    ``(c) Regional Balance and Compatibility.--The Secretary, in 
designating high priority projects, shall ensure that--
            ``(1) the geographic distribution of the projects 
        designated as high priority projects is generally balanced 
        among the geographic regions of the United States and a 
        disproportionate number of such projects is not concentrated in 
        a single region or State; and
            ``(2) all projects are compatible with, and carried out in 
        conformance with--
                    ``(A) plans developed pursuant to the requirements 
                of sections 134 and 135 of title 23; and
                    ``(B) the national rail plan.
``Sec. 22506. Approval
    ``(a) Criteria.--The Secretary may approve a State rail plan for 
the purposes of this chapter if--
            ``(1) the plan meets all of the requirements applicable to 
        State plans under this chapter;
            ``(2) for each project listed on the ranked list of 
        priority freight and passenger rail capital projects under the 
        plan--
                    ``(A) the project meets all safety requirements 
                that are applicable to the project under law; and
                    ``(B) the State has entered into an agreement with 
                any owner of rail infrastructure directly affected by 
                the project that provides for the State to proceed with 
                the project; and
            ``(3) the content of the plan is coordinated with--
                    ``(A) plans developed pursuant to the requirements 
                of sections 134 and 135 of title 23; and
                    ``(B) the national rail plan and any other 
                transportation plan of the Federal Government that is 
                required by law.
    ``(b) Procedures for State Rail Plan Submission and Approval.--The 
Secretary shall prescribe procedures for States to submit State rail 
plans for review under this subtitle, including application and 
qualification procedures. The procedures shall provide for the 
Secretary to review a State rail plan and issue a record of decision of 
approval or disapproval, with comment, on such plan within 180 days 
after the plan is submitted.
``Sec. 22507. Definitions
    ``In this chapter:
            ``(1) Private benefit.--The term `private benefit' means a 
        benefit accrued to a person or private entity that directly 
        improves the economic and competitive condition of that person 
        or entity through improved assets, cost reductions, service 
        improvements, or any other means as defined by the Secretary.
            ``(2) Public benefit.--The term `public benefit' means a 
        benefit accrued to the public in the form of enhanced mobility 
        of people or goods, environmental protection or enhancement, 
        congestion mitigation, enhanced trade and economic development, 
        improved air quality or land use, more efficient energy use, 
        enhanced public safety or security, reduction of public 
        expenditures due to improved transportation efficiency or 
        infrastructure preservation, and any other positive community 
        effects as defined by the Secretary.
            ``(3) State.--The term `State' means any of the 50 States 
        and the District of Columbia.
            ``(4) State rail transportation authority.--The term `State 
        rail transportation authority' means the State agency or 
        official responsible under the direction of the Governor of the 
        State or a State law for preparation, maintenance, 
        coordination, and administration of the State rail plan.''.
    (b) Clerical Amendment.--The table of chapters for subtitle V is 
amended by inserting after the item relating to chapter 223 the 
following:

``225. STATE RAIL PLANS.....................................   22501''.
                                 <all>