[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5965 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 5965

  To strengthen national security and promote energy independence by 
   reducing the Nation's reliance on foreign oil, improving vehicle 
 technology and efficiency, increasing the distribution of alternative 
 fuels, bolstering rail infrastructure, and expanding access to public 
                                transit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 28, 2006

  Mr. Hoyer (for himself, Mr. Dingell, Mr. Skelton, Mr. Oberstar, Mr. 
 Spratt, Mr. Obey, Mr. Frank of Massachusetts, Mr. Gordon, Mr. Berman, 
  Mr. Udall of Colorado, Ms. Herseth, Mr. Blumenauer, Mr. Schiff, Mr. 
 Ackerman, Ms. Bean, Ms. Berkley, Mr. Bishop of New York, Mr. Boucher, 
 Ms. Corrine Brown of Florida, Mr. Cardin, Mr. Case, Mr. Cleaver, Mr. 
Costa, Mr. Cummings, Mr. Davis of Florida, Ms. DeLauro, Mr. Etheridge, 
Mr. Fattah, Mr. Holt, Mr. Kildee, Mr. Kind, Mr. Kucinich, Ms. Lee, Ms. 
     Matsui, Ms. McCollum of Minnesota, Mr. McGovern, Ms. Moore of 
  Wisconsin, Ms. Norton, Mr. Price of North Carolina, Mr. Reyes, Mr. 
     Sabo, Ms. Schwartz of Pennsylvania, Mr. Serrano, Mr. Smith of 
    Washington, Mrs. Tauscher, Mr. Van Hollen, Mr. Miller of North 
     Carolina, Mr. Ross, Ms. DeGette, Mr. Clay, Mr. Gonzalez, Mr. 
 Ruppersberger, Mr. Davis of Illinois, Mr. Moran of Virginia, and Mr. 
  Hinojosa) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
  Armed Services, Government Reform, Rules, Science, Ways and Means, 
  House Administration, and Transportation and Infrastructure, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  To strengthen national security and promote energy independence by 
   reducing the Nation's reliance on foreign oil, improving vehicle 
 technology and efficiency, increasing the distribution of alternative 
 fuels, bolstering rail infrastructure, and expanding access to public 
                                transit.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Program for Real 
Energy Security Act'' or the ``PROGRESS Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
 TITLE I--NATIONAL COMMISSION ON ENERGY SECURITY AND TRANSITION TO NEW 
                                 FUELS

Sec. 101. Establishment.
Sec. 102. Duties of Commission.
Sec. 103. Membership.
Sec. 104. Initial meeting.
Sec. 105. Administrative assistance.
Sec. 106. Powers of Commission.
Sec. 107. Reports.
Sec. 108. Action on report recommendations.
Sec. 109. Termination.
      TITLE II--NEW MANHATTAN CENTER FOR HIGH EFFICIENCY VEHICLES

Sec. 201. Findings.
Sec. 202. Definitions.
Sec. 203. New Manhattan Center for High Efficiency Vehicles.
Sec. 204. Advisory council.
Sec. 205. Responsibilities.
Sec. 206. Export of high-efficiency vehicle manufacturing.
Sec. 207. Protection of information.
Sec. 208. Authorization on appropriations.
Sec. 209. Advanced battery loan guarantee program.
Sec. 210. Domestic manufacturing conversion grant program.
             TITLE III--BIOFUELS INFRASTRUCTURE DEVELOPMENT

Sec. 301. Biofuels infrastructure development.
            TITLE IV--GOVERNMENT USE AND DIVERSITY OF SUPPLY

Sec. 401. Renewable fuel regulations.
Sec. 402. Grants for cellulosic ethanol production.
Sec. 403. Standard specifications for biodiesel.
Sec. 404. Requirement for greater use of alternative fuels in Federal 
                            fleet.
Sec. 405. Requirement for Inspector General investigations relating to 
                            alternative fuel use and supply in Federal 
                            agencies and regulations.
Sec. 406. Report on vehicles and infrastructure for alternative fuel 
                            use.
Sec. 407. Funds set aside for alternative fuel infrastructure.
Sec. 408. Authority for Department of Defense to enter into long-term 
                            contracts to procure biobased fuel and 
                            unconventional fuel.
Sec. 409. Federal support for plug-in hybrid electric vehicles.
Sec. 410. Congressional alternative fuel use in vehicles.
     TITLE V--TRANSIT PROMOTION AND RAIL INFRASTRUCTURE DEVELOPMENT

                          Subtitle A--Transit

Sec. 501. Increase and expansion of employer-provided mass transit 
                            fringe benefits.
Sec. 502. Grants to improve public transportation services.
Sec. 503. Study of fuel savings from intelligent transportation 
                            systems.
              Subtitle B--Secure Access for Commuter Rail

Sec. 511. Short title.
Sec. 512. Findings.
Sec. 513. Rail transit access.
Sec. 514. Rail transportation policy.
       Subtitle C--Intercity Passenger Rail and Rail Bond Program

Sec. 521. Capital assistance for intercity passenger rail service; 
                            State rail plans.
Sec. 522. State rail plans.
Sec. 523. Rail cooperative research program.
Sec. 524. High-speed intercity rail facility bonds.
Sec. 525. Tax credit to holders of qualified high-speed rail 
                            infrastructure bonds.
               Subtitle D--Energy Supply and Freight Rail

Sec. 531. Short title.
Sec. 532. Capital grants for railroad track.
                      Subtitle E--Rail Reliability

Sec. 541. Reliability of railroad transportation of energy supplies.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The United States dependence on foreign petroleum poses 
        a serious risk to our national security and our economic well-
        being. The United States must immediately develop a proactive 
        energy strategy that includes the promotion of energy 
        efficiency and the investment in alternative and new energy 
        technologies.
            (2) America should achieve energy independence by reducing 
        its reliance on oil from the Middle East and other unstable 
        regions of the world by developing emerging technologies that 
        work in synergy with the existing energy infrastructure. A 
        sustained investment in research and development is crucial to 
        creating cutting-edge technologies that allow us to develop 
        clean, sustainable energy alternatives and capitalize on 
        America's vast renewable natural resources.
            (3) The Federal Government should lead the Nation in an 
        effort to substantially reduce the use of petroleum based fuels 
        by rapidly expanding production and distribution of synthetic 
        and biobased fuels, such as ethanol derived from cellulosic 
        sources, and by deploying new engine technologies for fuel-
        flexible, hybrid, plug-in hybrid, and biodiesel vehicles.
            (4) The Nation will be more secure by making a concerted 
        effort to improve the diversity and reliability of the Nation's 
        energy resources and transportation fuels. We must make greater 
        investments in renewable energy, alternative fuels such as 
        biomass, and efficiency improvements to answer our growing 
        demand for energy.
            (5) The Federal Government should undertake a complete 
        review of regulations that may affect supply and bottlenecks 
        that create regional emergencies that threaten the well-being 
        of our economy and the health and safety of our citizens. We 
        must make every effort to use all of our energy sources, making 
        each a cleaner, safer contributor to the Nation's energy 
        resources.
            (6) Despite the expenditure of billions of dollars on 
        homeland security since 9/11, the American people are still 
        vulnerable to attack by terrorists at home. Recent natural 
        disasters have also underscored the vulnerability and critical 
        importance of energy supply to the Nation's economic vitality. 
        Our energy facilities, transportation systems, and critical 
        infrastructure must be adequately secured.
            (7) Not only must our energy infrastructure be secured, but 
        Americans must feel safe in utilizing mass transit systems. 
        Transit provides an alternative form of commuting, reduces the 
        use of oil and gasoline, and plays a key role in moving 
        Americans and their families in times of emergencies as well. 
        Increasing security for mass transit through additional funding 
        for rail, bus, and subway security is part of the Nation's 
        energy security.

 TITLE I--NATIONAL COMMISSION ON ENERGY SECURITY AND TRANSITION TO NEW 
                                 FUELS

SEC. 101. ESTABLISHMENT.

    There is established a commission to be known as the ``National 
Commission on Energy Security and Transition to New Fuels'' (in this 
title referred to as the ``Commission'').

SEC. 102. DUTIES OF COMMISSION.

    The Commission shall make recommendations to the Congress and the 
President for preserving the national energy security in the event of a 
terrorist attack or natural disaster, and for reducing United States 
dependence on foreign oil according to a schedule for national energy 
independence over the next 5, 10, 15, and 20 years. The Commission 
shall focus on regional approaches to achieving such goals, taking into 
account regional differences in energy supply and demand, and shall--
            (1) address fuel supply and infrastructure needs to support 
        the development of wide-scale use of alternative fueled 
        vehicles, including flexible-fuel vehicles, electric hybrid 
        vehicles, advanced diesel engines, and hydrogen fueled 
        vehicles, for passenger cars, commercial fleets, and industrial 
        vehicles;
            (2) identify vulnerabilities in energy infrastructure, such 
        as overreliance on refining capacity concentrated in areas 
        susceptible to hurricane damage, and recommend actions to 
        remedy or mitigate such vulnerabilities;
            (3) propose legislative actions to--
                    (A) promote efficiency and biomass and other 
                alternative resource use, including the development of 
                biofuels, battery, and composite material technologies; 
                and
                    (B) pursue near-term options to reduce 
                transportation fuel demand, such as expanded use of 
                public transit; and
            (4) propose Federal, State, and local fiscal and regulatory 
        changes to accomplish the purposes described in this 
        subsection, and develop uniform codes and other tools for use 
        by governments to accomplish those purposes.

SEC. 103. MEMBERSHIP.

    (a) Number and Appointment.--
            (1) In general.--The Commission shall consist of--
                    (A) 6 members appointed by the Speaker of the House 
                of Representatives, including--
                            (i) 1 appointed in consultation with the 
                        chairman of the Committee on Energy and 
                        Commerce;
                            (ii) 1 appointed in consultation with the 
                        chairman of the Committee on Transportation and 
                        Infrastructure;
                            (iii) 1 appointed in consultation with the 
                        chairman of the Committee on Agriculture;
                            (iv) 1 appointed in consultation with the 
                        chairman of the Committee on Government Reform;
                            (v) 1 appointed in consultation with the 
                        chairman of the Committee on Science; and
                            (vi) 1 appointed in consultation with the 
                        chairman of the Committee on Armed Services;
                    (B) 6 members appointed by the minority leader of 
                the House of Representatives, including--
                            (i) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Energy and Commerce;
                            (ii) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Transportation and Infrastructure;
                            (iii) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Agriculture;
                            (iv) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Government Reform;
                            (v) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Science; and
                            (vi) 1 appointed in consultation with the 
                        chairman of the Committee on Armed Services;
                    (C) 6 members appointed by the majority leader of 
                the Senate, including--
                            (i) 1 appointed in consultation with the 
                        chairman of the Committee on Commerce, Science, 
                        and Transportation;
                            (ii) 1 appointed in consultation with the 
                        chairman of the Committee on Energy and Natural 
                        Resources;
                            (iii) 1 appointed in consultation with the 
                        chairman of the Committee on Homeland Security 
                        and Governmental Affairs; and
                            (iv) 1 appointed in consultation with the 
                        chairman of the Committee on Armed Services;
                    (D) 6 members appointed by the minority leader of 
                the Senate, including--
                            (i) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Commerce, Science, and Transportation;
                            (ii) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Energy and Natural Resources;
                            (iii) 1 appointed in consultation with the 
                        ranking minority member of the Committee on 
                        Homeland Security and Governmental Affairs; and
                            (iv) 1 appointed in consultation with the 
                        chairman of the Committee on Armed Services; 
                        and
                    (E) 12 members appointed by the President, 
                including--
                            (i) 1 appointed in consultation with the 
                        Secretary of Energy;
                            (ii) 1 appointed in consultation with the 
                        Secretary of Transportation;
                            (iii) 1 appointed in consultation with the 
                        Secretary of Commerce;
                            (iv) 1 appointed in consultation with the 
                        Secretary of Agriculture; and
                            (v) 1 appointed in consultation with the 
                        Administrator of the Environmental Protection 
                        Agency.
            (2) Appointment principles.--
                    (A) Chairman.--The President shall designate 1 
                member appointed under paragraph (1)(E) to be Chairman 
                of the Commission.
                    (B) Consultation.--At least 3 of the appointments 
                by the President shall be made in consultation with the 
                bipartisan national associations representing elected 
                State and local governmental officials.
                    (C) Limitation on party membership.--Not more than 
                3 of the members appointed by the President under 
                paragraph (1)(E), other than members appointed under 
                clauses (i) through (v) of that subparagraph, shall be 
                members of the same political party as the President.
                    (D) Balance.--Each person appointing members of the 
                Commission under paragraph (1) shall seek to achieve a 
                balance of Commission members among representatives of 
                appropriate Federal, State, and local government 
                agencies, industry, academia, and nonprofit stakeholder 
                organizations, and among diverse geographical areas.
    (b) Vacancies.--Any vacancy occurring before the termination of the 
Commission shall be filled in the same manner as the original 
appointment.
    (c) Compensation.--
            (1) In general.--Except as provided in paragraph (2), 
        members of the Commission shall serve without pay.
            (2) Travel expenses.--Each member shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with applicable provisions under chapter I of 
        chapter 57 of title 5, United States Code.
    (d) Recommendations.--The Commission may only make recommendations 
if 75 percent or more of its membership approve those recommendations.

SEC. 104. INITIAL MEETING.

    The Commission shall hold its initial meeting not later than 60 
days after the date of enactment of this Act.

SEC. 105. ADMINISTRATIVE ASSISTANCE.

    (a) In General.--The Secretary of Energy shall provide to the 
Commission any administrative assistance necessary for the Commission 
to carry out its duties under this title.
    (b) Experts and Consultants.--The Commission may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code.
    (c) Staff of Federal Agencies.--Upon request of the Commission, the 
head of any Federal department or agency may detail, on a reimbursable 
basis, any of the personnel of that department or agency to the 
Commission to assist it in carrying out its duties under this title.

SEC. 106. POWERS OF COMMISSION.

    (a) Hearings and Sessions.--The Commission may, for the purpose of 
carrying out this title, hold hearings, sit and act at times and 
places, take testimony, and receive evidence as the Commission 
considers appropriate.
    (b) Powers of Members and Agents.--Any member or agent of the 
Commission may, if authorized by the Commission, take any action which 
the Commission is authorized to take by this section.
    (c) Obtaining Official Data.--The Commission may secure directly 
from any department or agency of the United States information 
necessary to enable it to carry out this title. Upon request of the 
Chairperson of the Commission, the head of that department or agency 
shall furnish that information to the Commission.
    (d) Mails.--The Commission may use the United States mails in the 
same manner and under the same conditions as other departments and 
agencies of the United States.
    (e) Subpoena Power.--
            (1) In general.--The Commission may issue subpoenas 
        requiring the attendance and testimony of witnesses and the 
        production of any evidence relating to any matter which the 
        Commission is empowered to investigate by this title. The 
        attendance of witnesses and the production of evidence may be 
        required from any place within the United States at any 
        designated place of hearing within the United States.
            (2) Failure to obey a subpoena.--If a person refuses to 
        obey a subpoena issued under paragraph (1), the Commission may 
        apply to a United States district court for an order requiring 
        that person to appear before the Commission to give testimony, 
        produce evidence, or both, relating to the matter under 
        investigation. The application may be made within the judicial 
        district where the hearing is conducted or where that person is 
        found, resides, or transacts business. Any failure to obey the 
        order of the court may be punished by the court as civil 
        contempt.
            (3) Service of subpoenas.--The subpoenas of the Commission 
        shall be served in the manner provided for subpoenas issued by 
        a United States district court under the Federal Rules of Civil 
        Procedure for the United States district courts.
            (4) Service of process.--All process of any court to which 
        application is made under paragraph (2) may be served in the 
        judicial district in which the person required to be served 
        resides or may be found.

SEC. 107. REPORTS.

    (a) Initial Report.--Not later than 3 months after the first 
meeting of the Commission, the Commission shall transmit to the 
President and the Congress and initial report containing such 
recommendations as the Commission has been able to prepare at that 
time.
    (b) Final Report.--Not later than 6 months after transmittal of the 
report under subsection (a), the Commission shall transmit a final 
report to the President and the Congress. The final report shall 
contain a detailed statement of the findings and conclusions of the 
Commission, together with its recommendations.

SEC. 108. ACTION ON REPORT RECOMMENDATIONS.

    (a) Presidential Response.--Not later than 30 days after receiving 
a report from the Commission under section 107(a) or (b), the President 
shall transmit to Congress a response consisting of either approval or 
disapproval of each of the recommendations contained in the report from 
the Commission. Such response shall include an explanation for the 
disapproval of any such recommendation.
    (b) Implementation.--The appropriate Federal officials shall, 
unless a joint resolution described in subsection (c) is enacted 
pursuant to this section, implement all recommendations approved by the 
President under subsection (a).
    (c) Terms of the Resolution.--For purposes of subsection (b), the 
term ``joint resolution'' means only a joint resolution which is 
introduced within the 10-day period beginning on the date on which the 
President transmits the response to the Congress under subsection (a), 
and--
            (1) which does not have a preamble;
            (2) the matter after the resolving clause of which is as 
        follows ``That Congress disapproves the recommendations of the 
        National Commission on Energy Security and Transition to New 
        Fuels as submitted by the President on _____'', the blank space 
        being filled in with the appropriate date; and
            (3) the title of which is as follows: ``Joint resolution 
        disapproving the recommendations of the National Commission on 
        Energy Security and Transition to New Fuels''.
    (d) Referral.--A resolution described in subsection (c) that is 
introduced in the House of Representatives shall be referred to the 
appropriate committees of the House of Representatives. A resolution 
described in subsection (c) introduced in the Senate shall be referred 
to the appropriate committees of the Senate.
    (e) Discharge.--If the committee to which a resolution described in 
subsection (c) is referred has not reported such resolution (or an 
identical resolution) by the end of the 20-day period beginning on the 
date on which the President transmits the response to the Congress 
under subsection (a), such committee shall be, at the end of such 
period, discharged from further consideration of such resolution, and 
such resolution shall be placed on the appropriate calender of the 
House involved.
    (f) Consideration.--(1) On or after the third day after the date on 
which the committee to which such a resolution is referred has 
reported, or has been discharged (under subsection (e)) from further 
consideration of, such a resolution, it is in order (even though a 
previous motion to the same effect has been disagreed to) for any 
Member of the respective House to move to proceed to the consideration 
of the resolution. A Member may make the motion only on the day after 
the calender day on which the Member announces to the House concerned 
the Member's intention to make the motion, except that, in the case of 
the House of Representatives, the motion may be made without such prior 
announcement if the motion is made by direction of the committee to 
which the resolution was referred. All points of order against the 
resolution (and against consideration of the resolution) are waived. 
The motion is highly privileged in the House of Representatives and is 
privileged in the Senate and is not debatable. The motion is not 
subject to amendment, or to a motion to postpone, or to a motion to 
proceed to the consideration of other business. A motion to reconsider 
the vote by which the motion is agreed to or disagreed to shall not be 
in order. If a motion to proceed to the consideration of the resolution 
is agreed to, the respective House shall immediately proceed to 
consideration of the joint resolution without intervening motion, 
order, or other business, and the resolution shall remain the 
unfinished business of the respective House until disposed of.
    (2) Debate on the resolution, and on all debatable motions and 
appeals in connection therewith, shall be limited to not more than 2 
hours, which shall be divided equally between those favoring and those 
opposing the resolution. An amendment to the resolution is not in 
order. A motion to postpone, or a motion to proceed to the 
consideration of other business, or a motion to recommit the resolution 
is not in order. A motion to reconsider the vote by which the 
resolution is agreed to or disagreed to is not in order.
    (3) Immediately following the conclusion of the debate on a 
resolution described in subsection (c) and a single quorum call at the 
conclusion of the debate if requested in accordance with the rules of 
the appropriate House, the vote on final passage of the resolution 
shall occur.
    (4) Appeals from the decisions of the Chair relating to the 
application of the rules of the Senate or the House of Representatives, 
as the case may be, to the procedure relating to a resolution described 
in subsection (c) shall be decided without debate.
    (g) Consideration by Other House.--(1) If, before the passage by 
one House of a resolution of that House described in subsection (c), 
that House receives from the other House a resolution described in 
subsection (c), then the following procedures shall apply:
            (A) The resolution of the other House shall not be referred 
        to a committee and may not be considered in the House receiving 
        it except in the case of final passage as provided in 
        subparagraph (B)(ii).
            (B) With respect to a resolution described in subsection 
        (c) of the House receiving the resolution--
                    (i) the procedure in that House shall be the same 
                as if no resolution had been received from the other 
                House; but
                    (ii) the vote on final passage shall be on the 
                resolution of the other House.
    (2) Upon disposition of the resolution received from the other 
House, it shall no longer be in order to consider the resolution that 
originated in the receiving House.
    (h) Rules of the Senate and House.--This section is enacted by 
Congress--
            (1) as an exercise of the rulemaking power of the Senate 
        and House of Representatives, respectively, and as such it is 
        deemed a part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of a resolution described in subsection 
        (c), and it supersedes other rules only to the extent that it 
        is inconsistent with such rules; and
            (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.

SEC. 109. TERMINATION.

    The Commission shall terminate 60 days after transmitting its final 
report pursuant to section 107(b).

      TITLE II--NEW MANHATTAN CENTER FOR HIGH EFFICIENCY VEHICLES

SEC. 201. FINDINGS.

    The Congress finds that--
            (1) private, academic, and government research and 
        development resources need to be focused and coordinated to 
        accomplish the rapid commercialization and deployment of 
        technologies and resources needed to achieve energy 
        independence;
            (2) a project similar to the Manhattan Project is needed to 
        bring national attention to the need for energy independence 
        and to move the United States beyond its reliance on oil and 
        gasoline;
            (3) an independent entity is needed to identify the areas 
        where scientific breakthroughs and government investment are 
        best focused, in coordination with private and academic 
        efforts, to encourage the commercial development of viable 
        vehicle and fuel technologies in areas such as efficiency, 
        biomass, and hydrogen that could play a role in reducing demand 
        for oil and meeting growing domestic economic needs for fuel;
            (4) such an entity could encourage the development of those 
        technologies, help break through private sector risk barriers 
        to their development, and advise Congress and the President on 
        policies needed to foster their use; and
            (5) such an effort would improve the Nation's energy and 
        national security by lowering demand for petroleum, increasing 
        domestic fuel supplies, creating jobs, and improving the 
        environment.

SEC. 202. DEFINITIONS.

    In this title--
            (1) Advisory council.--The term ``Advisory Council'' means 
        the Advisory Council established under section 204.
            (2) Center.--The term ``Center'' means the New Manhattan 
        Center for High Efficiency Vehicles established under section 
        203(c).
            (3) Research.--The term ``research'' includes research on 
        the technologies, materials, and manufacturing processes 
        required for high efficiency vehicles.

SEC. 203. NEW MANHATTAN CENTER FOR HIGH EFFICIENCY VEHICLES.

    (a) Summit.--Not later than 60 days after the date of enactment of 
this Act, the President shall convene a summit of the principal 
advisors and directors of all programs in the Federal Government 
related to the development of vehicle (or related and component parts) 
technologies and alternative fuels, including ethanol and biofuels, 
electric drive, and hydrogen. Such summit shall include leading 
researchers at the Federal laboratories and representatives of private 
sector partners, and affiliated labor unions, engaged in the production 
and manufacturing of these vehicle and fuel technologies. The summit 
shall be for the purpose of--
            (1) reviewing the progress and promise for each of these 
        technologies toward increasing fuel economy, the 
        interrelationship of these technologies to each other, and 
        additional funding resources needed to accelerate the progress 
        of these programs toward improving efficiency and economy 
        dramatically in the next decade, including review of technology 
        developed and lessons learned from the Federal Government's 
        initiative known as the Partnership for a New Generation of 
        Vehicles; and
            (2) making recommendations as to the organization and 
        structure of the Center described in this section.
    (b) Program.--The Secretary of Energy, in consultation with the 
Secretary of Defense, the Secretary of Transportation, and the 
Administrator of the Environmental Protection Agency, shall carry out a 
program consisting of a collaborative effort with industry, government, 
and academia to support research, development, demonstration, and 
commercial application activities related to high efficiency vehicles. 
Such program shall include examination of motors, clutches, sensors, 
controllers, cooling systems, variable combustion engine technologies, 
flexible fueled and dual fuel fueling systems, hybrid electric flexible 
fuel vehicles, electric drive accessory components, and advanced 
batteries in an effort to--
            (1) reduce production costs to the lowest possible level, 
        with special emphasis on identifying electric drive components 
        and systems that can be advanced through research and 
        development toward commercialization;
            (2) increase fuel economy; and
            (3) coordinate related Federal research, development, and 
        commercialization programs in accordance with the 
        recommendations resulting from the summit convened under 
        subsection (a).
    (c) Grants.--Such program shall consist of grants to--
            (1) the Center, made in accordance with the memorandum of 
        understanding entered into under subsection (e);
            (2) researchers, including Center participants;
            (3) small businesses;
            (4) National Laboratories; and
            (5) institutions of higher education.
    (d) Center.--Not later than 90 days after the date of enactment of 
this Act, the Secretary of Energy shall competitively select a 
consortium to serve as the New Manhattan Center for High Efficiency 
Vehicles, which shall consist of participants who are private, for-
profit United States firms, open to large and small businesses, that, 
as a group, are broadly representative of United States high efficiency 
vehicle research, development, infrastructure, and manufacturing 
expertise as a whole.
    (e) Memorandum of Understanding.--The Secretary of Energy shall 
enter into a memorandum of understanding with the Center for the 
purposes of this title. The memorandum of understanding shall require 
the following:
            (1) That the Center shall have--
                    (A) a charter agreed to by all representatives of 
                the automotive industry that are participating members 
                of the Center; and
                    (B) an annual operating plan that is developed in 
                the consultation with the Secretary of Energy and the 
                Advisory Council.
            (2) That the total amount of funds made available to the 
        Center by Federal, State, and local government agencies for any 
        fiscal year for the support of the research and development 
        activities of the Center under this section may not exceed 50 
        percent of the total cost of such activities.
            (3) That the Center, in conducting research and development 
        activities pursuant to the memorandum of understanding, 
        cooperate with and draw on the expertise of the National 
        Laboratories of the Department of Energy and of colleges and 
        universities in the United States in the field of automotive 
        manufacturing technology.
            (4) That an independent, commercial auditor be retained--
                    (A) to determine the extent to which the funds made 
                available to the Center by the United States for the 
                research and development activities of the Center have 
                been expended in a manner that is consistent withe the 
                purposes of this title, the charter of the Center, and 
                the annual operating plan of the Center; and
                    (B) to submit to the Secretary of Energy, the 
                Center, and the Comptroller General of the United 
                States an annual report containing the findings and 
                determinations of such auditor.
            (5) That the Center take all steps necessary to maximize 
        the expeditious and timely transfer of technology developed and 
        owned by the Center to the participants in the Center in 
        accordance with the agreement between the Center and those 
        participants and for the purpose of improving the high 
        efficiency vehicle manufacturing productivity of United States 
        automotive firms.
    (f) Cost Sharing.--In carrying out this section, the Secretary of 
Energy shall require cost sharing in accordance with section 988 of the 
Energy Policy Act of 2005 (42 U.S.C.16352).
    (g) Rights to Intellectual Property.--The Secretary of Energy may 
require (in accordance with section 202(a)(ii) of title 35, United 
States Code, section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 
2182), and section 9 of the Federal Nonnuclear Energy Research and 
Development Act of 1974 (42 U.S.C. 5908)) that for any new invention 
developed under this title--
            (1) the Center participants who are active participants in 
        research, development, and demonstration activities related to 
        the high efficiency vehicle technologies that are covered by 
        this section shall be granted the first option to negotiate 
        with the invention owner, at least in the field of high 
        efficiency vehicles, nonexclusive licenses and royalties on 
        terms that are reasonable under the circumstances;
            (2) for 1 year after a United States patent is issued for 
        the invention--
                    (A) the patent holder shall not negotiate any 
                license or royalty with any entity that is not a 
                participant in the Center; and
                    (B) the patent holder shall negotiate nonexclusive 
                licenses and royalties in good faith with any 
                interested participant in the Center; and
            (3) such other terms are applied as the Secretary 
        determines are required to promote accelerated 
        commercialization of inventions made under this section.
    (h) National Academy Review.--The Secretary of Energy shall enter 
into an arrangement with the National Academy of Sciences to conduct 
periodic reviews of the program under this section.

SEC. 204. ADVISORY COUNCIL.

    (a) Establishment.--There is established the Advisory Council on 
Federal Participation in the New Manhattan Center for High Efficiency 
Vehicles.
    (b) Functions.--(1) The Advisory Council shall advise the Center 
and the Secretary of Energy on appropriate technology goals for the 
research and development activities of the Center, and shall develop a 
plan to achieve those goals. The plan shall provide for the development 
of high-quality, high-yield high efficiency vehicle manufacturing 
technologies that meet the national energy security and commercial 
needs of the United States.
    (2) The Advisory Council shall--
            (A) conduct an annual review of the activities of the 
        Center for the purpose of determining the extent of the 
        progress made by the Center in carrying out the plan referred 
        to in paragraph (1); and
            (B) on the basis of its determinations under subparagraph 
        (A), submit to the Center any recommendations for modification 
        of the plan or the technological goals in the plan considered 
        appropriate by the Advisory Council.
    (3) The Advisory Council shall review the research activities of 
the Center and shall submit to the Secretary of Energy and the Congress 
an annual report containing a description of the extent to which the 
Center is achieving its research and development goals.
    (c) Membership.--The Advisory Council shall be composed of 12 
members as follows:
            (1) The Under Secretary for Science of the Department of 
        Energy.
            (2) The Administrator of the Research and Innovative 
        Technology Administration.
            (3) The Director of the National Science Foundation.
            (4) The Chairman of the Federal Laboratory Consortium for 
        Technology Transfer.
            (5) Eight members appointed by the President as follows:
                    (A) Three members who are eminent individuals in 
                the automotive technology and manufacturing industry.
                    (B) Two members who are eminent individuals in the 
                fields of alternative fuels technology.
                    (C) Two members who represent organized labor in 
                these related manufacturing fields.
                    (D) One member who represents consumer interests in 
                energy efficiency and conservation.
    (d) Terms of Membership.--Each member of the Advisory Council 
appointed under subsection (c)(5) shall be appointed for a term of 
three years, except that of the members first appointed, two shall be 
appointed for a term of one year, two shall be appointed for a term of 
two years, and three shall be appointed for a term of three years, as 
designated by the President at the time of appointment. A member of the 
Advisory Council may serve after the expiration of the member's term 
until a successor has taken office.
    (e) Vacancies.--A vacancy in the Advisory Council shall not affect 
its powers but, in the case of a member appointed under subsection 
(c)(5), shall be filled in the same manner as the original appointment 
was made. Any member appointed to fill a vacancy for an unexpired term 
shall be appointed for the remainder of such term.
    (f) Quorum.--Seven members of the Advisory Council shall constitute 
a quorum.
    (g) Meetings.--The Advisory Council shall meet at the call of the 
Chairman or a majority of its members.
    (h) Compensation.--(1) Each member of the Advisory Council shall 
serve without compensation.
    (2) While away from their homes or regular places of business in 
the performance of duties for the Advisory Council, members of the 
Advisory Council shall be allowed travel expenses, including per diem 
in lieu of subsistence, at rates authorized for employees of agencies 
under sections 5702 and 5703 of title 5, United States Code.
    (i) Federal Advisory Committee Act.--Section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Advisory 
Council.

SEC. 205. RESPONSIBILITIES.

    The Comptroller General of the United States shall--
            (1) review the annual reports of the auditor submitted to 
        the Comptroller General in accordance with section 
        202(d)(4)(B); and
            (2) transmit to the Congress comments of the accuracy and 
        completeness of those reports, and any additional comments on 
        the reports that the Comptroller General considers appropriate.

SEC. 206. EXPORT OF HIGH-EFFICIENCY VEHICLE MANUFACTURING.

    Any export of materials, equipment, and technology developed by the 
Center in whole or in part with financial assistance provided under 
this title shall be subject to the Export Administration Act of 1979 
(50 U.S.C. App. 2401 et seq.), as continued in effect under the 
International Emergency Economic Powers Act, and shall not be subject 
to the Arms Export Control Act.

SEC. 207. PROTECTION OF INFORMATION.

    (a) Freedom of Information Act.--Section 552 of title 5, United 
States Code, shall not apply to information obtained by the Federal 
Government on a confidential basis under this title.
    (b) Information.--Notwithstanding any other provision of law, 
intellectual property, trade secrets, and technical data owned and 
developed by the Center or any of the participants in the Center may 
not be disclosed by any officer or employee of the Department of Energy 
except as provided in the provision included in the memorandum of 
understanding pursuant to section 202(d).

SEC. 208. AUTHORIZATION ON APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of Energy 
for carrying out this title $500,000,000 for each of the fiscal years 
2007 through 2016.

SEC. 209. ADVANCED BATTERY LOAN GUARANTEE PROGRAM.

    (a) Establishment of Program.--The Secretary of Energy shall 
establish a program to provide guarantees of loans by private 
institutions for the construction of facilities for the manufacture of 
advanced vehicle batteries that are developed and produced in the 
United States, including advanced lithium ion batteries.
    (b) Requirements.--The Secretary may provide a loan guarantee under 
subsection (a) to an applicant if--
            (1) without a loan guarantee, credit is not available to 
        the applicant under reasonable terms or conditions sufficient 
        to finance the construction of a facility described in 
        subsection (a);
            (2) the prospective earning power of the applicant and the 
        character and value of the security pledged provide a 
        reasonable assurance of repayment of the loan to be guaranteed 
        in accordance with the terms of the loan; and
            (3) the loan bears interest at a rate determined by the 
        Secretary to be reasonable, taking into account the current 
        average yield on outstanding obligations of the United States 
        with remaining periods of maturity comparable to the maturity 
        of the loan.
    (c) Criteria.--In selecting recipients of loan guarantees from 
among applicants, the Secretary shall give preference to proposals 
that--
            (1) meet all applicable Federal and State permitting 
        requirements;
            (2) are most likely to be successful; and
            (3) are located in local markets that have the greatest 
        need for the facility.
    (d) Maturity.--A loan guaranteed under subsection (a) shall have a 
maturity of not more than 20 years.
    (e) Terms and Conditions.--The loan agreement for a loan guaranteed 
under subsection (a) shall provide that no provision of the loan 
agreement may be amended or waived without the consent of the 
Secretary.
    (f) Assurance of Repayment.--The Secretary shall require that an 
applicant for a loan guarantee under subsection (a) provide an 
assurance of repayment in the form of a performance bond, insurance, 
collateral, or other means acceptable to the Secretary in an amount 
equal to not less than 20 percent of the amount of the loan.
    (g) Guarantee Fee.--The recipient of a loan guarantee under 
subsection (a) shall pay the Secretary an amount determined by the 
Secretary to be sufficient to cover the administrative costs of the 
Secretary relating to the loan guarantee.
    (h) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees made under this 
section. Any such guarantee made by the Secretary shall be conclusive 
evidence of the eligibility of the loan for the guarantee with respect 
to principal and interest. The validity of the guarantee shall be 
incontestable in the hands of a holder of the guaranteed loan.
    (i) Reports.--Until each guaranteed loan under this section has 
been repaid in full, the Secretary shall annually submit to Congress a 
report on the activities of the Secretary under this section.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    (k) Termination of Authority.--The authority of the Secretary to 
issue a loan guarantee under subsection (a) terminates on the date that 
is 10 years after the date of enactment of this Act.

SEC. 210. DOMESTIC MANUFACTURING CONVERSION GRANT PROGRAM.

    Section 712 of the Energy Policy Act of 2005 (42 U.S.C. 16062) is 
amended--
            (1) in subsection (a)--
                    (A) by inserting ``and components thereof, 
                including vehicles and components derived from the 
                activities of the New Manhattan Center for High 
                Efficiency Vehicles'' after ``sales of efficient hybrid 
                and advanced diesel vehicles'';
                    (B) by inserting ``, plug-in electric hybrid, 
                flexible-fuel,'' after ``production of efficient 
                hybrid''; and
                    (C) by adding at the end the following: ``Priority 
                shall be given to the refurbishment or retooling of 
                manufacturing facilities that have recently ceased 
                operation or will cease operation in the near 
                future.''; and
            (2) by striking subsection (b) and inserting the following:
    ``(b) Coordination With State and Local Programs.--The Secretary 
may coordinate implementation of this section with State and local 
programs designed to accomplish similar goals, including the retention 
and retraining of skilled workers from the such manufacturing 
facilities, including by establishing matching grant arrangements.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section--
            ``(1) $200,000,000 for each of the fiscal years 2007 
        through 2011; and
            ``(2) such sums as may be necessary for each of the fiscal 
        years 2012 through 2015.''.

             TITLE III--BIOFUELS INFRASTRUCTURE DEVELOPMENT

SEC. 301. BIOFUELS INFRASTRUCTURE DEVELOPMENT.

    (a) Grant Program.--The Secretary of Energy shall establish a 
program for making grants for providing assistance to retail and 
wholesale motor fuel dealers or other entities for the installation, 
replacement, or conversion of motor fuel storage and dispensing 
infrastructure to be used exclusively to store and dispense biobased 
fuel (as defined in section 303(2) of the Biomass Research and 
Development Act of 2000 (7 U.S.C. 8101 note)), including E-85 gasoline, 
biodiesel, or biodiesel blended fuel. Such infrastructure may include 
equipment used in the blending, distribution, and transport of such 
fuels.
    (b) Retail Technical and Marketing Assistance.--The Secretary of 
Energy shall enter into contracts with entities with demonstrated 
experience in assisting retail fueling stations in installing refueling 
systems and marketing alternative fuels nationally, for the provision 
of technical and marketing assistance to recipients of grants under 
this section. Such assistance shall include--
            (1) technical advice for compliance with applicable Federal 
        and State environmental requirements;
            (2) help in identifying supply sources and securing long-
        term contracts; and
            (3) provision of public outreach, education, and labeling 
        materials.
    (c) Allocation.--Grants under this section shall be made to 
applicants based upon criteria that will maximize the availability and 
use of the alternative fuel, and that will ensure that alternative 
fuels are available across the country, such as population, number of 
vehicles that can operate on E-85, number of diesel powered vehicles, 
number of retail fuel outlets, and saturation of vehicles capable of 
operating on the fuels described in subsection (a). The Secretary of 
Energy may also reserve funds appropriated for carrying out this 
section to support biofuels infrastructure development projects with a 
cost of greater than $1,000,000, that are of national significance. The 
Secretary shall reserve funds appropriated for the biofuels 
infrastructure development grant program for technical and marketing 
assistance described in subsection (b). Grants shall be prioritized 
based on criteria that include--
            (1) the public demand for each alternative fuel in a 
        particular geographic area based on State registration records 
        showing the number of automobiles that can be operated with 
        alternative fuel; and
            (2) the opportunity to create or expand corridors of 
        alternative fuel stations along interstate or State highways.
    (d) Combined Applications.--States and local government entities 
and nonprofit entities may apply for assistance under this section on 
behalf of a group of retailers within a certain geographic area, or to 
carry out regional or multistate deployment projects. Any such 
application shall certify the availability and details of a program to 
match the Federal grant as required under subsection (e) and list the 
retail locations that would receive the funds.
    (e) Limitations.--Assistance provided under this section shall not 
exceed--
            (1) 33 percent of the estimated cost of the installation, 
        replacement, or conversion of motor fuel storage and dispensing 
        infrastructure; or
            (2) $180,000 for a combination of equipment at any one 
        retail outlet.
    (f) Operation of Alternative Fuel Stations.--The Secretary shall 
establish rules that set forth requirements for grant recipients under 
this section that include providing to the public the alternative fuel, 
establishing a marketing plan that informs consumers of the price and 
availability of the alternative fuel, clearly labeling the dispensers 
and related equipment, and providing periodic reports on the status of 
the alternative fuel sales, the type and amount of the alternative fuel 
dispensed at each location, and the average price of such fuel.
    (g) Notification Requirements.--Not later than the date on which 
each alternative fuel station begins to offer alternative fuel to the 
public, the grant recipient that used grant funds to construct or 
upgrade such station shall notify the Secretary of Energy of such 
opening. The Secretary of Energy shall add each new alternative fuel 
station to the alternative fuel station locator on its Website when it 
receives notification under this subsection.
    (h) Ineligibility.--No person may receive assistance under this 
section and receive a credit under section 30C of the Internal Revenue 
Code of 1986.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy for carrying out this section 
$200,000,000 for each of the fiscal years 2007 through 2011, and such 
sums as may be necessary thereafter.

            TITLE IV--GOVERNMENT USE AND DIVERSITY OF SUPPLY

SEC. 401. RENEWABLE FUEL REGULATIONS.

    The Secretary of Energy shall issue regulations under section 212 
of the Clean Air Act (as added by section 1511 of the Energy Policy Act 
of 2005) to provide for cellulosic ethanol production loan guarantees 
and issue a request for proposals under subsection (b) of such section 
212 within 90 days after the enactment of this Act.

SEC. 402. GRANTS FOR CELLULOSIC ETHANOL PRODUCTION.

    Subsection (s) of section 211 of the Clean Air Act is redesignated 
as subsection (t) and subsection (r) of such section 211 (as added by 
section 1512 of the Energy Policy Act of 2005), relating to conversion 
assistance for cellulosic biomass, waste-derived ethanol, and approved 
renewable fuels, is redesignated as subsection (s) and amended as 
follows:
            (1) By adding the following new subparagraphs at the end of 
        paragraph (3):
                    ``(D) $500,000,000 for fiscal year 2009.
                    ``(E) $500,000,000 for fiscal year 2010.''.
            (2) By adding the following new paragraph at the end 
        thereof:
            ``(5) Geographical dispersion.--The grants under this 
        subsection shall be made to recipients distributed regionally 
        across the country in such manner that an eligible production 
        facility is constructed in each PADD (and each of the subpads 
        in PADD 1) throughout the country with each such facility 
        using, to the extent possible, a different feedstock 
        material.''.

SEC. 403. STANDARD SPECIFICATIONS FOR BIODIESEL.

    Section 211 of the Clean Air Act is amended by adding the following 
new subsection at the end thereof:
    ``(u) Standard Specifications for Biodiesel.--Not later than 180 
days after the enactment of this subsection, the Administrator shall 
promulgate regulations establishing a series of uniform per gallon fuel 
standards for categories of biodiesel fuel and designate an 
identification number for fuel meeting each the standard in each such 
category so that vehicle manufacturers are able to design engines to 
use biodiesel fuel meeting one or more of such standards.''.

SEC. 404. REQUIREMENT FOR GREATER USE OF ALTERNATIVE FUELS IN FEDERAL 
              FLEET.

    Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act 
(42 U.S.C. 6374(a)(3)(E)) is amended by adding at the end the following 
new clauses:
    ``(iii) The report under clause (ii) also shall include an 
identification of the geographic areas where the alternative fuel 
required to be used in dual fueled vehicles acquired pursuant to this 
section is not reasonably available, as certified under clause (i)(I), 
and a list of such areas where it would be most beneficial, in order of 
priority, to install a pump for dispensing a fuel known as E-85 or 
biodiesel fuel for such vehicles.
    ``(iv) The Secretary may not grant a waiver under clause (i) in any 
fiscal year following a fiscal year in which the report under clause 
(ii) is not filed. In the case of an agency that receives a waiver 
under clause (i) for 2 successive fiscal years, the agency shall submit 
to the Secretary and Congress recommendations for solving the problems 
causing the need for the waiver.''.

SEC. 405. REQUIREMENT FOR INSPECTOR GENERAL INVESTIGATIONS RELATING TO 
              ALTERNATIVE FUEL USE AND SUPPLY IN FEDERAL AGENCIES AND 
              REGULATIONS.

    (a) Requirement.--The Inspector General of each department or 
agency shall conduct a comprehensive investigation into alternative 
fuel use and supply within the department or agency to identify the 
reasons why alternative fuels are not being used in all dual fueled 
vehicles operated by the department or agency.
    (b) Matters Covered.--At a minimum, the investigation required 
under subsection (a) shall cover the following:
            (1) The location of the dual fueled vehicles operated by 
        the department or agency and the location of the nearest 
        alternative fuel pumps.
            (2) Whether dual fueled vehicles operated by the department 
        or agency would make better use of alternative fuel if the 
        vehicles were redeployed to other geographic areas.
            (3) The steps undertaken by the head of the department or 
        agency to ensure that the dual fueled vehicles use alternative 
        fuel, including--
                    (A) whether such use is a priority for the 
                department or agency; and
                    (B) whether and how often waivers are sought and 
                obtained under section 400AA(a)(3)(E) of the Energy 
                Policy and Conservation Act (42 U.S.C. 6374(a)(3)(E)).
            (4) The manner in which use of alternative fuel is kept 
        track of in vehicles leased by the department or agency.
    (c) Report.--The Inspector General of each department or agency 
shall submit to Congress a report on the investigation conducted under 
subsection (a) not later than January 3, 2007. The report shall include 
the results of the investigation and recommendations by the Inspector 
General for increased use of alternative fuels in the dual fueled 
vehicles operated by the department or agency.

SEC. 406. REPORT ON VEHICLES AND INFRASTRUCTURE FOR ALTERNATIVE FUEL 
              USE.

    Not later than 90 days after the date of the enactment of this Act, 
the Secretary of Defense shall submit to Congress a report that 
identifies, across the Armed Forces, the locations and concentrations 
of flex-fuel vehicles in the current and planned inventory of the 
Department of Defense, as well as the diesel engine vehicles and 
equipment, so as to prioritize the location and placement of new 
alternative fuel infrastructure to maximize the use of alternative 
fuels (such as E-85 and biodiesel) in vehicles acquired under the 
requirements of the Energy Policy Act of 1992. The report shall also 
identify the locations that are currently served by contract or 
commercial availability, and contain recommendations for future 
coordination and use of commercial outlets of alternative fuels.

SEC. 407. FUNDS SET ASIDE FOR ALTERNATIVE FUEL INFRASTRUCTURE.

    (a) Percentage Required.--Of the amounts appropriated or otherwise 
made available for a fiscal year for activities of the Defense Energy 
Support Center of the Defense Logistics Agency for noncombat fuel 
infrastructure, not less than 5 percent shall be available only for 
alternative fuel (such as E-85 and biodiesel) infrastructure.
    (b) Termination.--The requirement of subsection (a) terminates as 
of the date on which the Secretary of Defense submits to Congress the 
Secretary's certification that the Department of Defense can run all 
noncombat flex-fuel vehicles in the inventory of the Department on 
alternative fuels (such as E-85 and biodiesel).

SEC. 408. AUTHORITY FOR DEPARTMENT OF DEFENSE TO ENTER INTO LONG-TERM 
              CONTRACTS TO PROCURE BIOBASED FUEL AND UNCONVENTIONAL 
              FUEL.

    Section 2398a of title 10, United States Code, is amended--
            (1) in subsection (b), by inserting after ``covered fuel'' 
        the following: ``, biobased fuel, or coal-to-liquid fuel'';
            (2) in subsection (d)--
                    (A) by inserting after ``covered fuel'' the 
                following: ``, biobased fuel, or coal-to-liquid fuel''; 
                and
                    (B) by striking ``1 or more years'' and inserting 
                ``up to 25 years''; and
            (3) by adding at the end the following new subsection:
    ``(f) Definitions.--In this section:
            ``(1) The term `biobased fuel' has the meaning provided in 
        section 303(2) of the Biomass Research and Development Act of 
        2000 (7 U.S.C. 8101 note)), including E-85 gasoline, biodiesel, 
        or biodiesel blended fuel.
            ``(2) The term `coal-to-liquid fuel' means a fuel produced 
        from a coal-to-liquid process or technology in a coal-to-liquid 
        facility.
            ``(3) The term `coal-to-liquid' means--
                    ``(A) with respect to a process or technology, the 
                use of the coal resources of the United States, using 
                the class of chemical reactions known as Fischer-
                Tropsch, to produce synthetic fuel suitable for 
                transportation; and
                    ``(B) with respect to a facility, the portion of a 
                facility related to the Fischer-Tropsch process, or 
                related to Fischer-Tropsch finished fuel production, 
                that ensures the capture, transportation, and 
                sequestration of byproducts of the use of coal at the 
                facility, including carbon emissions.''.

SEC. 409. FEDERAL SUPPORT FOR PLUG-IN HYBRID ELECTRIC VEHICLES.

    (a) Amendment.--Section 301 of the Energy Policy Act of 1992 (42 
U.S.C. 13211) is amended--
            (1) in paragraph (8)--
                    (A) by striking ``or'' at the end of subparagraph 
                (A);
                    (B) by inserting ``or'' at the end of subparagraph 
                (B); and
                    (C) by adding after subparagraph (B) the following 
                new subparagraph:
                    ``(C) a hybrid electric vehicle;'';
            (2) by redesignating paragraphs (11), (12), (13), and (14) 
        as paragraphs (12), (13), (14), and (16) respectively;
            (3) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) the term `hybrid electric vehicle' means a vehicle 
        that--
                    ``(A) can operate on either liquid combustible fuel 
                or electric power provided by an onboard battery; and
                    ``(B) utilizes regenerative power capture 
                technology to recover energy expended in braking the 
                vehicle for use in recharging the battery;'';
            (4) in paragraph (14), as so redesignated by paragraph (2) 
        of this subsection, by striking ``and'' at the end; and
            (5) by inserting after paragraph (14), as so redesignated 
        by paragraph (2) of this subsection, the following new 
        paragraph:
            ``(15) the term `plug-in hybrid electric vehicle' means a 
        hybrid electric vehicle that can operate solely on electric 
        power for a minimum of 20 miles under city driving conditions, 
        and that is capable of recharging its battery from an offboard 
        electricity source; and''.
    (b) Plug-in Hybrid Electric Vehicle Matching Grants.--
            (1) Establishment.--The Secretary of Energy shall establish 
        a competitive grant program to provide not more than 25 grants 
        annually to State governments, local governments, metropolitan 
        transportation authorities, or combinations thereof for the 
        purposes of procuring and testing plug-in hybrid electric 
        vehicles.
            (2) Applications.--
                    (A) Requirements.--The Secretary shall issue 
                requirements for applying for grants under the program. 
                The Secretary shall require that applications, at a 
                minimum, include a description of how data will be--
                            (i) collected on the--
                                    (I) performance of the vehicle or 
                                vehicles and the components, including 
                                the battery, energy management, and 
                                charging systems, under various driving 
                                speeds, trip ranges, traffic, and other 
                                driving conditions;
                                    (II) costs of the vehicle or 
                                vehicles, including acquisition, 
                                operating, and maintenance costs, and 
                                how the project or projects will be 
                                self-sustaining after Federal 
                                assistance is completed; and
                                    (III) emissions of the vehicle or 
                                vehicles, including greenhouse gases, 
                                and the amount of petroleum displaced 
                                as a result of the project or projects; 
                                and
                            (ii) summarized for dissemination to the 
                        Department of Energy, other grantees, and the 
                        public.
                    (B) Partners.--An applicant under subparagraph (A) 
                may carry out a project or projects in partnership with 
                one or more private entities.
                    (C) Restrictions.--The Secretary shall award grants 
                under this subsection with geographic diversity such 
                that there is at least one recipient government partner 
                in every PADD, and in every Sub-PADD in the case of 
                PADD 1.
    (c) Report.--The Secretary of Energy shall report to Congress on 
the potential for Federal Government procurement and acquisition of 
plug-in electric hybrid vehicles, including a proposed schedule for the 
acquisition of such vehicles, and including possible participation in 
commitment programs such as the National Plug-in Partners Campaign.

SEC. 410. CONGRESSIONAL ALTERNATIVE FUEL USE IN VEHICLES.

    (a) Findings.--The Congress finds that--
            (1) Members of Congress should follow their own example of 
        setting forth legislation that encourages the use of 
        alternatively fueled vehicles;
            (2) in 2005, the total cost of automobile leases for 
        Members of Congress surpassed $1,000,000, and a collective 
        switch to alternative fuel vehicles, hybrid vehicles, or 
        vehicles powered by biofuels could potentially save American 
        taxpayers thousands of dollars annually; and
            (3) the General Services Administration has already 
        purchased over 68,000 alternative fueled vehicles for the use 
        of Federal customers, more than any other organization in the 
        United States.
    (b) Study.--Not later than 6 months after the date of enactment of 
this Act, the Comptroller General shall transmit to the Congress the 
results of a study, along with recommendations, as to how best to 
enable Members of Congress to procure alternative fuel vehicles for 
official use.
    (c) Leasing Advice.--The Chief Administrative Officer of the House 
of Representatives and the Secretary of the Senate shall advise Members 
of their respective bodies as to the available options to lease 
alternative fuel vehicles, including vehicles treated as alternative 
fuels vehicles by the Administrator of General Services under standards 
established by the Administrator, any other vehicles powered by 
alternative fuel or synthetic fuel, and any other vehicles powered in 
whole or in part by flexible-fuel operating systems, biofuel operating 
systems, electrical operating systems, or hybrid-electrical operating 
systems.

     TITLE V--TRANSIT PROMOTION AND RAIL INFRASTRUCTURE DEVELOPMENT

                          Subtitle A--Transit

SEC. 501. INCREASE AND EXPANSION OF EMPLOYER-PROVIDED MASS TRANSIT 
              FRINGE BENEFITS.

    (a) Equalization of Limitation for Employer-Provided Mass Transit 
Fringe Benefit With Limitation for Employer-Provided Parking Fringe 
Benefit.--
            (1) In general.--Subparagraph (A) of section 132(f)(2) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``$100'' and inserting ``$175''.
            (2) Inflation adjustment.--Subparagraph (A) of section 
        132(f)(6) of such Code is amended by striking the last sentence 
        thereof.
    (b) Extension of Transportation Fringe Benefit to Bicycle 
Commuters.--
            (1) In general.--Paragraph (1) of section 132(f) of the 
        Internal Revenue Code of 1986 (relating to general rule for 
        qualified transportation fringe) is amended by adding at the 
        end the following:
                    ``(D) Bicycle commuting allowance.''.
            (2) Bicycle commuting allowance defined.--Paragraph (5) of 
        section 132(f) of such Code (relating to definitions) is 
        amended by adding at the end the following:
                    ``(F) Bicycle commuting allowance.--The term 
                `bicycle commuting allowance' means an amount provided 
                to an employee for transportation on a bicycle if such 
                transportation is in connection with travel between the 
                employee's residence and place of employment.''.
            (3) Limitation on exclusion.--Paragraph (2) of section 
        132(f) of such Code is amended by striking ``subparagraphs (A) 
        and (B)'' and inserting ``subparagraphs (A), (B), and (D)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 502. GRANTS TO IMPROVE PUBLIC TRANSPORTATION SERVICES.

    (a) Authorizations of Appropriations.--
            (1) Urbanized area formula grants.--In addition to other 
        amounts authorized or made available, there is authorized to be 
        appropriated $2,000,000,000 for fiscal year 2007 to carry out 
        section 5307 of title 49, United States Code.
            (2) Formula grants for other than urbanized areas.--In 
        addition to other amounts authorized or made available, there 
        is authorized to be appropriated $200,000,000 for fiscal year 
        2007 to carry out section 5311 of such title.
    (b) Use of Funds.--
            (1) In general.--Funds appropriated pursuant to this 
        section shall be used for projects that will expand or improve 
        public transportation services provided by existing public 
        transportation systems, as determined by the Secretary of 
        Transportation.
            (2) Priority.--In awarding grants using funds appropriated 
        pursuant to subsection (a)(2), the Secretary shall give 
        priority to projects involving vehicles that use clean fuels or 
        are powered by biofuels.
    (c) Matching Share.--
            (1) Deferral.--In awarding a grant for a project using 
        funds appropriated pursuant to subsection (a), the Secretary 
        may permit the recipient of the grant to defer payment of the 
        non-Federal share of cost of the project for a period not to 
        exceed 2 fiscal years.
            (2) Limitation.--The Secretary may permit such a deferral 
        only if the Secretary determines that the deferral will not 
        result in a decrease in the aggregate amount of funds provided 
        by the recipient in a fiscal year for projects under section 
        5307 or 5311 of such title, as appropriate, as compared to the 
        preceding fiscal year.
    (d) Availability of Funds.--Funds appropriated pursuant to this 
section shall remain available until expended.

SEC. 503. STUDY OF FUEL SAVINGS FROM INTELLIGENT TRANSPORTATION 
              SYSTEMS.

    Not later than 2 years after the date of enactment of this Act, the 
Secretary of Energy shall, in consultation with the Secretary of 
Transportation, report to Congress on the potential fuel savings from 
intelligent transportation systems that help businesses and consumers 
to plan their travel and avoid delays. These systems may include web-
based real-time transit information systems, congestion information 
systems, carpool information systems, parking information systems, 
freight route management, and traffic management systems. The report 
shall include analysis of fuel savings, analysis of system costs, 
assessment of local, State, and regional differences in applicability, 
and evaluation of case studies, best practices, and emerging 
technologies from both the private and public sector.

              Subtitle B--Secure Access for Commuter Rail

SEC. 511. SHORT TITLE.

    This subtitle may be cited as the ``Transit Rail Accommodation 
Improvement and Needs Act''.

SEC. 512. FINDINGS.

    The Congress finds that--
            (1) modern and efficient fixed guideway transportation is 
        important to the viability and well-being of metropolitan areas 
        and to the energy conservation and self-sufficiency goals of 
        the United States;
            (2) public convenience and necessity require the 
        development of fixed guideway transportation systems in 
        metropolitan areas presently without such service, and the 
        expansion of existing systems in metropolitan areas already 
        receiving such service; and
            (3) use of existing railroad trackage and rights-of-way in 
        and around metropolitan areas provides a unique and valuable 
        opportunity for the development and expansion of fixed guideway 
        transportation facilities with a minimum of disruption to the 
        environment and the surrounding community.

SEC. 513. RAIL TRANSIT ACCESS.

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

                   ``CHAPTER 285--RAIL TRANSIT ACCESS

``Sec.
``28501. Definitions.
``28502. Shared use of rail carrier trackage by mass transportation 
                            authorities.
``28503. Shared use of rail rights-of-way by mass transportation 
                            authorities.
``28504. Applicability of other laws.
``28505. Standards for Board action.
``Sec. 28501. Definitions
    ``In this chapter--
            ``(1) the term `Board' means the Surface Transportation 
        Board;
            ``(2) the term `capital work' means maintenance, 
        restoration, reconstruction, capacity enhancement, or 
        rehabilitation work on trackage that would be treated, in 
        accordance with generally accepted accounting principles, as a 
        capital item rather than an expense;
            ``(3) the term `fixed guideway transportation' means mass 
        transportation (as defined in section 5302(a)(7)) provided on, 
        by, or using a fixed guideway (as defined in section 
        5302(a)(4));
            ``(4) the term `mass transportation authority' means a 
        local governmental authority (as defined in section 5302(a)(6)) 
        established to provide, or make a contract providing for, fixed 
        guideway transportation;
            ``(5) the term `rail carrier' means a person, other than a 
        governmental authority, providing common carrier railroad 
        transportation for compensation subject to the jurisdiction of 
        the Board under chapter 105;
            ``(6) the term `segregated fixed guideway facility' means a 
        fixed guideway facility constructed within the railroad right-
        of-way of a rail carrier but physically separate from trackage, 
        including relocated trackage, within the right-of-way used by a 
        rail carrier for freight transportation purposes; and
            ``(7) the term `trackage' means a railroad line of a rail 
        carrier, including a spur, industrial, team, switching, side, 
        yard, or station track, and a facility of a rail carrier.
``Sec. 28502. Shared use of rail carrier trackage by mass 
              transportation authorities
    ``(a) Authority.--If, after a reasonable period of negotiation, a 
mass transportation authority cannot reach agreement with a rail 
carrier to use trackage of, and have related services provided by, the 
rail carrier for purposes of fixed guideway transportation, the Board 
shall, upon application of the mass transportation authority or the 
rail carrier, and if the Board finds it necessary or useful to carry 
out this chapter--
            ``(1) order that the trackage be made available and the 
        related services be provided to the mass transportation 
        authority; and
            ``(2) prescribe reasonable terms and compensation for use 
        of the trackage and provision of the related services, 
        including the performance of capital work if the mass 
        transportation authority has demonstrated that such capital 
        work is required for efficient and reliable passenger 
        operations on the trackage to be used.
    ``(b) Standard for Compensation; Quality of Service.--When 
prescribing reasonable compensation under subsection (a)(2), the Board 
shall consider alternative cost allocation principles, including 
incremental cost and fully allocated cost, under rules promulgated by 
the Board within 6 months after the date of the enactment of the 
Transit Rail Accommodation Improvement and Needs Act. The Board shall 
consider quality of service by the rail carrier as a major factor when 
determining compensation for the use of the trackage and providing the 
related services.
    ``(c) Terms of Operation.--When prescribing reasonable terms under 
subsection (a)(2), the Board may prescribe the number of trains that 
may be operated by or for the mass transportation authority, the speeds 
at which such trains may be operated, and the trackage maintenance 
levels to be provided by the rail carrier.
    ``(d) Additional Trains.--When a rail carrier and a mass 
transportation authority cannot agree to terms for the operation of 
additional trains by or for a mass transportation authority over a rail 
line of the carrier, the mass transportation authority or the rail 
carrier may apply to the Board for an order establishing such terms. If 
the Board finds it reasonable to carry out this chapter, the Board 
shall order the rail carrier to allow operation of the requested 
additional trains on such terms as the Board finds reasonable under the 
circumstances.
    ``(e) Trackage Maintenance.--If a mass transportation authority 
believes that maintenance or related capital work of trackage operated 
by or for the mass transportation authority has fallen below a 
necessary level to maintain reliable service at speeds necessary to 
provide convenient and efficient mass transportation service, the mass 
transportation authority may, after notice to the rail carrier and a 
sufficient period for maintenance or related capital work improvements, 
apply to the Board for an order requiring the rail carrier to provide 
increased or improved maintenance or related capital work on the 
trackage. If the Board finds it reasonable to carry out this part, the 
Board shall order the rail carrier to provide such increased or 
improved maintenance or related capital work as the Board finds 
reasonable under the circumstances. The remedy available under this 
subsection shall be in addition to any contract rights that a mass 
transportation authority may possess with respect to trackage 
maintenance or related capital work.
    ``(f) Accelerated Speeds.--If a rail carrier refuses to allow 
accelerated speeds for trains operated by or for a mass transportation 
authority, the mass transportation authority may apply to the Board for 
an order requiring the rail carrier to allow the accelerated speeds and 
related capital work required to permit operation at the accelerated 
speeds. The Board shall decide whether accelerated speeds are 
practicable and which capital work would be required to make 
accelerated speeds practicable. The Board shall establish the maximum 
allowable speeds for trains operated by or for a mass transportation 
authority on terms the Board decides are reasonable.
    ``(g) Preference Over Freight Transportation.--Except in an 
emergency, and consistent with subtitle E of title V of the PROGRESS 
Act and regulations issued thereunder, fixed guideway transportation 
provided by or for a mass transportation authority pursuant to an order 
issued under subsection (a) has preference over freight transportation 
in using a rail line, junction, or crossing unless the Board orders 
otherwise under this chapter. A rail carrier affected by this 
subsection may apply to the Board for relief. If the Board decides that 
preference for fixed guideway transportation materially will lessen the 
quality of freight transportation provided to shippers, the Board shall 
establish the rights of the rail carrier and the mass transportation 
authority on reasonable terms.
    ``(h) Final Determination.--The Board shall make a determination 
under this section not later than 120 days after a mass transportation 
authority or a rail carrier submits an application to the Board.
``Sec. 28503. Shared use of rail rights-of-way by mass transportation 
              authorities
    ``(a) General Authority.--If, after a reasonable period of 
negotiation, a mass transportation authority cannot reach agreement 
with a rail carrier to acquire an interest in a railroad right-of-way 
for the construction and operation of a segregated fixed guideway 
facility, the mass transportation authority may apply to the Board for 
an order requiring the rail carrier to convey an interest to the 
authority. The Board, not later than 120 days after receiving the 
application, shall order the interest conveyed if--
            ``(1) the mass transportation authority assumes a 
        reasonable allocation of costs associated with any necessary 
        relocation of a rail carrier's trackage within the right-of-
        way; and
            ``(2) the fixed guideway transportation purpose of the 
        proposed segregated fixed guideway facility cannot be met 
        adequately at a reasonable cost by acquiring an interest in 
        other property.
    ``(b) Compensation and Terms.--A conveyance ordered by the Board 
under this section shall be subject to the payment of just compensation 
and to such other reasonable terms as the Board may prescribe.
``Sec. 28504. Applicability of other laws
    ``(a) Board Review or Approval.--Operations or conveyances 
undertaken pursuant to an order issued under section 28502 or 28503 are 
not subject to Board review or approval under subtitle IV of this title 
unless the Board, on a case-by-case basis, has determined that the mass 
transportation authority has assumed rights or obligations under such 
order to provide transportation subject to the jurisdiction of the 
Board under chapter 105.
    ``(b) Contractual Obligations for Claims.--Nothing in this chapter 
shall be construed to limit a rail transportation provider's right 
under section 28103(b) to enter into contracts that allocate financial 
responsibility for claims.
``Sec. 28505. Standards for Board action
    ``In proceedings under sections 28502 and 28503 the Board shall 
utilize, to the extent relevant and feasible, the principles, 
standards, and precedents utilized in proceedings under sections 24308 
and 24311(c) involving the National Railroad Passenger Corporation.''.
    (b) Conforming Amendments.--
            (1) Limitations on rail passenger transportation 
        liability.--Section 28103(a) of title 49, United States Code, 
        is amended by inserting ``or other fixed guideway 
        transportation'' after ``commuter''.
            (2) Table of chapters.--The table of chapters of subtitle V 
        of title 49, United States Code, is amended by adding after the 
        item relating to chapter 283 the following new item:

``285. RAIL TRANSIT ACCESS..................................   28501''.

SEC. 514. RAIL TRANSPORTATION POLICY.

    Section 10101 of title 49, United States Code, is amended--
            (1) by striking ``and'' at the end of paragraph (14);
            (2) by striking the period at the end of paragraph (15) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(16) to encourage and promote the operation of safe, 
        efficient, and reliable commuter rail passenger service and 
        other fixed guideway transportation systems, including 
        operations where the service will share lines, corridors, or 
        other facilities with freight railroads or with intercity rail 
        passenger service.''.

       Subtitle C--Intercity Passenger Rail and Rail Bond Program

SEC. 521. CAPITAL ASSISTANCE FOR INTERCITY PASSENGER RAIL SERVICE; 
              STATE RAIL PLANS.

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

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

``Sec.
``24401. Definitions.
``24402. Capital investment grants to support intercity passenger rail 
                            service.
``24403. Project management oversight.
``24404. Use of capital grants to finance first-dollar liability of 
                            grant project.
``24405. Grant conditions.
``24406. Authorization of appropriations.
``Sec. 24401. Definitions
    ``In this chapter:
            ``(1) Applicant.--The term `applicant' means a State 
        (including the District of Columbia), a group of States, an 
        Interstate Compact, or a public agency established by one or 
        more States and having responsibility for providing intercity 
        passenger rail service.
            ``(2) Capital project.--The term `capital project' means a 
        project or program in a State rail plan developed under chapter 
        225 of this title for--
                    ``(A) acquiring, constructing, improving, or 
                inspecting equipment or a facility for use in or for 
                the primary benefit of intercity passenger rail 
                service, expenses incidental to the acquisition or 
                construction (including designing, engineering, 
                location surveying, mapping, environmental studies, and 
                acquiring rights-of-way), payments for the capital 
                portions of rail trackage rights agreements, highway-
                rail grade crossing improvements related to intercity 
                passenger rail service, security, mitigating 
                environmental impacts, communication and signalization 
                improvements, relocation assistance, acquiring 
                replacement housing sites, and acquiring, constructing, 
                relocating, and rehabilitating replacement housing;
                    ``(B) rehabilitating, remanufacturing or 
                overhauling rail rolling stock and facilities used 
                primarily in intercity passenger rail service;
                    ``(C) costs associated with developing State rail 
                plans; and
                    ``(D) the first-dollar liability costs for 
                insurance related to the provision of intercity 
                passenger rail service under section 24404.
            ``(3) Intercity passenger rail service.--The term 
        `intercity passenger rail service' means transportation 
        services with the primary purpose of passenger transportation 
        between towns, cities and metropolitan areas by rail, including 
        high-speed rail, as defined in section 24102.
``Sec. 24402. Capital investment grants to support intercity passenger 
              rail service
    ``(a) General Authority.--
            ``(1) The Secretary of Transportation may make grants under 
        this section to an applicant to assist in financing the capital 
        costs of facilities and equipment necessary to provide or 
        improve intercity passenger rail transportation.
            ``(2) The Secretary shall require that a grant under this 
        section be subject to the terms, conditions, requirements, and 
        provisions the Secretary decides are necessary or appropriate 
        for the purposes of this section, including requirements for 
        the disposition of net increases in value of real property 
        resulting from the project assisted under this section and 
        shall prescribe procedures and schedules for the awarding of 
        grants under this chapter, including application and 
        qualification procedures and a record of decision on applicant 
        eligibility. The Secretary shall issue a final rule 
        establishing such procedures not later than 90 days after the 
        date of enactment of this chapter.
    ``(b) Project as Part of State Rail Plan.--
            ``(1) The Secretary may not approve a grant for a project 
        under this section unless the Secretary finds that the project 
        is part of a State rail plan developed under chapter 225 of 
        this title and that the applicant or recipient has or will have 
        the legal, financial, and technical capacity to carry out the 
        project, satisfactory continuing control over the use of the 
        equipment or facilities, and the capability and willingness to 
        maintain the equipment or facilities.
            ``(2) An applicant shall provide sufficient information 
        upon which the Secretary can make the findings required by this 
        subsection.
            ``(3) If an applicant has not selected the proposed 
        operator of its service competitively, the applicant shall 
        provide written justification to the Secretary showing why the 
        proposed operator is the best, taking into account price and 
        other factors, and that use of the proposed operator will not 
        unnecessarily increase the cost of the project.
    ``(c) Project Selection Criteria.--The Secretary, in selecting the 
recipients of financial assistance to be provided under subsection (a), 
shall--
            ``(1) require that each proposed project meet all safety 
        and security requirements that are applicable to the project 
        under law;
            ``(2) give preference to projects with high levels of 
        estimated ridership, increased on-time performance, reduced 
        trip time, additional service frequency, or other significant 
        service enhancements;
            ``(3) encourage intermodal connectivity through projects 
        that provide direct connections between train stations, 
        airports, bus terminals, subway stations, ferry ports, and 
        other modes of transportation;
            ``(4) ensure that each project is compatible with, and is 
        operated in conformance with--
                    ``(A) plans developed pursuant to the requirements 
                of section 135 of title 23, United States Code; and
                    ``(B) the national rail plan (if it is available); 
                and
            ``(5) favor the following kinds of projects:
                    ``(A) Projects that are expected to have a 
                significant favorable impact on air or highway traffic 
                congestion, capacity, or safety.
                    ``(B) Projects that also improve freight or 
                commuter rail operations.
                    ``(C) Projects that have significant environmental 
                benefits.
                    ``(D) Projects that are--
                            ``(i) at a stage of preparation that all 
                        pre-commencement compliance with environmental 
                        protection requirements has already been 
                        completed; and
                            ``(ii) ready to be commenced.
                    ``(E) Projects with positive economic and 
                employment impacts.
                    ``(F) Projects that encourage the use of positive 
                train control technologies.
                    ``(G) 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 for the project.
                    ``(H) Projects that involve donated property 
                interests or services.
                    ``(I) Projects that are identified by the Surface 
                Transportation Board as necessary to improve the on 
                time performance and reliability of intercity passenger 
                rail under section 24308(f).
    ``(d) 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 a State rail plan's ranked list of rail capital projects 
developed under section 22504(a)(5) of this title.
    ``(e) Letters of Intent, Full Funding Grant Agreements, and Early 
Systems Work Agreements.--
            ``(1) The Secretary may issue a letter of intent to an 
        applicant announcing an intention to obligate, for a major 
        capital project under this section, an amount from future 
        available budget authority specified in law that is not more 
        than the amount stipulated as the financial participation of 
        the Secretary in the project.
            ``(2) The Secretary may make a full funding grant agreement 
        with an applicant. The agreement shall--
                    ``(A) establish the terms of participation by the 
                United States Government in a project under this 
                section;
                    ``(B) establish the maximum amount of Government 
                financial assistance for the project;
                    ``(C) cover the period of time for completing the 
                project, including a period extending beyond the period 
                of an authorization; and
                    ``(D) make timely and efficient management of the 
                project easier according to the law of the United 
                States.
            ``(3) The total estimated amount of future obligations of 
        the Government and contingent commitments to incur obligations 
        covered by all outstanding letters of intent, full funding 
        grant agreements, and early systems work agreements may be not 
        more than the amount authorized under section 24406, less an 
        amount the Secretary reasonably estimates is necessary for 
        grants under this section not covered by a letter. The total 
        amount covered by new letters and contingent commitments 
        included in full funding grant agreements and early systems 
        work agreements may be not more than a limitation specified in 
        law.
    ``(f) Federal Share of Net Project Cost.--
            ``(1)(A) Based on engineering studies, studies of economic 
        feasibility, and information on the expected use of equipment 
        or facilities, the Secretary shall estimate the net project 
        cost.
            ``(B) A grant for the project shall not exceed 80 percent 
        of the project net capital cost.
            ``(C) The Secretary shall give priority in allocating 
        future obligations and contingent commitments to incur 
        obligations to grant requests seeking a lower Federal share of 
        the project net capital cost.
            ``(2) 50 percent of the average amounts expended by a State 
        or group of States (including the District of Columbia) for 
        capital projects to benefit intercity passenger rail service in 
        fiscal years 2005 and 2006 shall be credited towards the 
        matching requirements for grants awarded under this section. 
        The Secretary may require such information as necessary to 
        verify such expenditures.
            ``(3) 50 percent of the average amounts expended by a State 
        or group of States (including the District of Columbia) in a 
        fiscal year beginning in 2007 for capital projects to benefit 
        intercity passenger rail service or for the operating costs of 
        such service above the average of expenditures made for such 
        service in fiscal years 2005 and 2006 shall be credited towards 
        the matching requirements for grants awarded under this 
        section. The Secretary may require such information as 
        necessary to verify such expenditures.
    ``(g) Undertaking Projects in Advance.--
            ``(1) The Secretary may pay the Federal share of the net 
        capital project cost to an applicant that carries out any part 
        of a project described in this section according to all 
        applicable procedures and requirements if--
                    ``(A) the applicant applies for the payment;
                    ``(B) the Secretary approves the payment; and
                    ``(C) before carrying out the part of the project, 
                the Secretary approves the plans and specifications for 
                the part in the same way as other projects under this 
                section.
            ``(2) The cost of carrying out part of a project includes 
        the amount of interest earned and payable on bonds issued by 
        the applicant to the extent proceeds of the bonds are expended 
        in carrying out the part. However, the amount of interest under 
        this paragraph may not be more than the most favorable interest 
        terms reasonably available for the project at the time of 
        borrowing. The applicant shall certify, in a manner 
        satisfactory to the Secretary, that the applicant has shown 
        reasonable diligence in seeking the most favorable financial 
        terms.
            ``(3) The Secretary shall consider changes in capital 
        project cost indices when determining the estimated cost under 
        paragraph (2) of this subsection.
    ``(h) 2-Year Availability.--Funds appropriated under this section 
shall remain available until expended. If any amount provided as a 
grant under this section is not obligated or expended for the purposes 
described in subsection (a) within 2 years after the date on which the 
State received the grant, such sums shall be returned to the Secretary 
for other intercity passenger rail development projects under this 
section at the discretion of the Secretary.
    ``(i) 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 chapter.
            ``(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 Secretary.
            ``(3) Suballocation.--A State may allocate funds under this 
        section to any entity described in paragraph (1).
    ``(j) Special Transportation Circumstances.--In carrying out this 
section, the Secretary shall allocate an appropriate portion of the 
amounts available under this section to provide grants to States in 
which there is no intercity passenger rail service for the purpose of 
funding freight rail capital projects that are on a State rail plan 
developed under chapter 225 of this title that provide public benefits 
(as defined in chapter 225) as determined by the Secretary.
``Sec. 24403. Project management oversight
    ``(a) Project Management Plan Requirements.--To receive Federal 
financial assistance for a major capital project under this chapter, an 
applicant must prepare and carry out a project management plan approved 
by the Secretary of Transportation.
    ``(b) Secretarial Oversight.--
            ``(1) The Secretary may use no more than 0.5 percent of 
        amounts made available in a fiscal year for capital projects 
        under this chapter to enter into contracts to oversee the 
        construction of such projects.
            ``(2) The Secretary may use amounts available under 
        paragraph (1) of this subsection to make contracts for safety, 
        procurement, management, and financial compliance reviews and 
        audits of a recipient of amounts under paragraph (1).
            ``(3) The Federal Government shall pay the entire cost of 
        carrying out a contract under this subsection.
    ``(c) Access to Sites and Records.--Each recipient of assistance 
under this chapter shall provide the Secretary and a contractor the 
Secretary chooses under subsection (b) of this section with access to 
the construction sites and records of the recipient when reasonably 
necessary.
``Sec. 24404. Use of capital grants to finance first-dollar liability 
              of grant project
    ``Notwithstanding the requirements of section 24402 of this 
chapter, the Secretary of Transportation may approve the use of capital 
assistance under this chapter to fund self-insured retention of risk 
for the first tier of liability insurance coverage for rail passenger 
service associated with the capital assistance grant, but the coverage 
may not exceed $20,000,000 per occurrence or $20,000,000 in aggregate 
per year.
``Sec. 24405. Grant conditions
    ``(a) Domestic Buying Preference.--
            ``(1) Requirement.--
                    ``(A) In general.--In carrying out a project funded 
                in whole or in part with a grant under this chapter, 
                the grant recipient shall purchase only--
                            ``(i) unmanufactured articles, material, 
                        and supplies mined or produced in the United 
                        States; or
                            ``(ii) manufactured articles, material, and 
                        supplies manufactured in the United States 
                        substantially from articles, material, and 
                        supplies mined, produced, or manufactured in 
                        the United States.
                    ``(B) De minimis amount.--Subparagraph (A) applies 
                only to a purchase in an total amount that is not less 
                than $1,000,000.
            ``(2) Exemptions.--On application of a recipient, the 
        Secretary may exempt a recipient from the requirements of this 
        subsection if the Secretary decides that, for particular 
        articles, material, or supplies--
                    ``(A) such requirements are inconsistent with the 
                public interest;
                    ``(B) the cost of imposing the requirements is 
                unreasonable; or
                    ``(C) the articles, material, or supplies, or the 
                articles, material, or supplies from which they are 
                manufactured, are not mined, produced, or manufactured 
                in the United States in sufficient and reasonably 
                available commercial quantities and are not of a 
                satisfactory quality.
            ``(3) United states defined.--In this subsection, the term 
        `the United States' means the States, territories, and 
        possessions of the United States and the District of Columbia.
    ``(b) Operators Deemed Rail Carriers and Employers for Certain 
Purposes.--A person that conducts rail operations over rail 
infrastructure constructed or improved with funding provided in whole 
or in part in a grant made under this chapter--
            ``(1) shall be considered an employer for purposes of the 
        Railroad Retirement Act of 1974 (45 U.S.C. 231 et seq.); and
            ``(2) shall be considered a carrier for purposes of the 
        Railway Labor Act (43 U.S.C. 151 et seq.).
    ``(c) Grant Conditions.--The Secretary shall require as a condition 
of making any grant under this chapter that includes the improvement or 
use of rights-of-way owned by a railroad that--
            ``(1) a written agreement exist between the applicant and 
        the railroad regarding such use and ownership, including--
                    ``(A) any compensation for such use;
                    ``(B) assurances regarding the adequacy of 
                infrastructure capacity to accommodate both existing 
                and future freight and passenger operations; and
                    ``(C) an assurance by the railroad that collective 
                bargaining agreements with the railroad's employees 
                (including terms regulating the contracting of work) 
                will remain in full force and effect according to their 
                terms for work performed by the railroad on the 
                railroad transportation corridor; and
            ``(2) the applicant agrees to comply with--
                    ``(A) the standards of section 24312 of this title, 
                as such section was in effect on September 1, 2003, 
                with respect to the project in the same manner that the 
                National Railroad Passenger Corporation is required to 
                comply with those standards for construction work 
                financed under an agreement made under section 24308(a) 
                of this title; and
                    ``(B) the protective arrangements established under 
                section 504 of the Railroad Revitalization and 
                Regulatory Reform Act of 1976 (45 U.S.C. 836) with 
                respect to employees affected by actions taken in 
                connection with the project to be financed in whole or 
                in part by grants under this chapter.
    ``(d) Replacement of Existing Intercity Passenger Rail Service.--
            ``(1) Collective bargaining agreement for intercity 
        passenger rail projects.--Any entity providing intercity 
        passenger railroad transportation that begins operations after 
        the date of enactment of this Act on a project funded in whole 
        or in part by grants made under this chapter and replaces 
        intercity rail passenger service that was provided by Amtrak, 
        unless such service was provided solely by Amtrak to another 
        entity, as of such date shall enter into an agreement with the 
        authorized bargaining agent or agents for adversely affected 
        employees of the predecessor provider that--
                    ``(A) gives each such qualified employee of the 
                predecessor provider priority in hiring according to 
                the employee's seniority on the predecessor provider 
                for each position with the replacing entity that is in 
                the employee's craft or class and is available within 3 
                years after the termination of the service being 
                replaced;
                    ``(B) establishes a procedure for notifying such an 
                employee of such positions;
                    ``(C) establishes a procedure for such an employee 
                to apply for such positions; and
                    ``(D) establishes rates of pay, rules, and working 
                conditions.
            ``(2) Immediate replacement service.--
                    ``(A) Negotiations.--If the replacement of 
                preexisting intercity rail passenger service occurs 
                concurrent with or within a reasonable time before the 
                commencement of the replacing entity's rail passenger 
                service, the replacing entity shall give written notice 
                of its plan to replace existing rail passenger service 
                to the authorized collective bargaining agent or agents 
                for the potentially adversely affected employees of the 
                predecessor provider at least 90 days before the date 
                on which it plans to commence service. Within 5 days 
                after the date of receipt of such written notice, 
                negotiations between the replacing entity and the 
                collective bargaining agent or agents for the employees 
                of the predecessor provider shall commence for the 
                purpose of reaching agreement with respect to all 
                matters set forth in subparagraphs (A) through (D) of 
                paragraph (1). The negotiations shall continue for 30 
                days or until an agreement is reached, whichever is 
                sooner. If at the end of 30 days the parties have not 
                entered into an agreement with respect to all such 
                matters, the unresolved issues shall be submitted for 
                arbitration in accordance with the procedure set forth 
                in subparagraph (B).
                    ``(B) Arbitration.--If an agreement has not been 
                entered into with respect to all matters set forth in 
                subparagraphs (A) through (D) of paragraph (1) as 
                described in subparagraph (A) of this paragraph, the 
                parties shall select an arbitrator. If the parties are 
                unable to agree upon the selection of such arbitrator 
                within 5 days, either or both parties shall notify the 
                National Mediation Board, which shall provide a list of 
                seven arbitrators with experience in arbitrating rail 
                labor protection disputes. Within 5 days after such 
                notification, the parties shall alternately strike 
                names from the list until only 1 name remains, and that 
                person shall serve as the neutral arbitrator. Within 45 
                days after selection of the arbitrator, the arbitrator 
                shall conduct a hearing on the dispute and shall render 
                a decision with respect to the unresolved issues among 
                the matters set forth in subparagraphs (A) through (D) 
                of paragraph (1). This decision shall be final, 
                binding, and conclusive upon the parties. The salary 
                and expenses of the arbitrator shall be borne equally 
                by the parties; all other expenses shall be paid by the 
                party incurring them.
            ``(3) Service commencement.--A replacing entity under this 
        subsection shall commence service only after an agreement is 
        entered into with respect to the matters set forth in 
        subparagraphs (A) through (D) of paragraph (1) or the decision 
        of the arbitrator has been rendered.
            ``(4) Subsequent replacement of service.--If the 
        replacement of existing rail passenger service takes place 
        within 3 years after the replacing entity commences intercity 
        passenger rail service, the replacing entity and the collective 
        bargaining agent or agents for the adversely affected employees 
        of the predecessor provider shall enter into an agreement with 
        respect to the matters set forth in subparagraphs (A) through 
        (D) of paragraph (1). If the parties have not entered into an 
        agreement with respect to all such matters within 60 days after 
        the date on which the replacing entity replaces the predecessor 
        provider, the parties shall select an arbitrator using the 
        procedures set forth in paragraph (2)(B), who shall, within 20 
        days after the commencement of the arbitration, conduct a 
        hearing and decide all unresolved issues. This decision shall 
        be final, binding, and conclusive upon the parties.
    ``(e) Inapplicability to Certain Rail Operations.--Nothing in this 
section applies to--
            ``(1) commuter rail passenger transportation (as defined in 
        section 24102(4) of this title) operations of a State or local 
        government authority (as those terms are defined in section 
        5302(11) and (6), respectively, of this title) eligible to 
        receive financial assistance under section 5307 of this title, 
        or to its contractor performing services in connection with 
        commuter rail passenger operations (as so defined); or
            ``(2) the National Railroad Passenger Corporation's access 
        rights to railroad rights of way and facilities under current 
        law for projects funded under this chapter where train 
        operating speeds do not exceed 79 miles per hour.
``Sec. 24406. Authorization of appropriations.
    ``There are authorized to be appropriated to the Secretary of 
Transportation for carrying out this chapter $200,000,000 for each of 
the fiscal years 2007 through 2011.''.
    (b) Conforming Amendments.--The table of chapters for subtitle V of 
title 49, United States Code, is amended by inserting the following 
after the item relating to chapter 243:

``244.  INTERCITY PASSENGER RAIL SERVICE CAPITAL ASSISTANCE.   24401''.

SEC. 522. STATE RAIL PLANS.

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

       ``CHAPTER 225--STATE RAIL PLANS AND HIGH PRIORITY PROJECTS

``Sec.
``22501. Definitions.
``22502. Authority.
``22503. Purposes.
``22504. Transparency; coordination; review.
``22505. Content.
``22506. Review.
``Sec. 22501. Definitions
    ``In this subchapter:
            ``(1) Private benefit.--
                    ``(A) In general.--The term `private benefit'--
                            ``(i) means a benefit accrued to a person 
                        or private entity, other than the National 
                        Railroad Passenger Corporation, 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; 
                        and
                            ``(ii) shall be determined on a project-by-
                        project basis, based upon an agreement between 
                        the parties.
                    ``(B) Consultation.--The Secretary may seek the 
                advice of the States and rail carriers in further 
                defining this term.
            ``(2) Public benefit.--
                    ``(A) In general.--The term `public benefit'--
                            ``(i) 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; and
                            ``(ii) shall be determined on a project-by-
                        project basis, based upon an agreement between 
                        the parties.
                    ``(B) Consultation.--The Secretary may seek the 
                advice of the States and rail carriers in further 
                defining this term.
            ``(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.''.
``Sec. 22502. Authority
    ``(a) In General.--Each State may prepare and maintain a State rail 
plan in accordance with the provisions of this subchapter.
    ``(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 State's approved plan to the Secretary of 
        Transportation for review; and
            ``(4) revise and resubmit a State-approved plan no less 
        frequently than once every 5 years for reapproval by the 
        Secretary.
``Sec. 22503. Purposes
    ``(a) Purposes.--The purposes of a State rail plan are as follows:
            ``(1) To set forth State policy involving 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 enhance rail 
        service in the State that benefits the public.
            ``(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. 22504. Transparency; coordination; 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) Intergovernmental Coordination.--A State shall review the 
freight and passenger rail service activities and initiatives by 
regional planning agencies, regional transportation authorities, and 
municipalities within the State, or in the region in which the State is 
located, while preparing the plan, and shall include any 
recommendations made by such agencies, authorities, and municipalities 
as deemed appropriate by the State.
``Sec. 22505. Content
    ``(a) In General.--Each State rail plan shall contain the 
following:
            ``(1) An inventory of the existing overall rail 
        transportation system and rail services and facilities within 
        the State and an analysis of the role of rail transportation 
        within the State's surface transportation system.
            ``(2) A review of all rail lines within the State, 
        including proposed high speed rail corridors and significant 
        rail line segments not currently in service.
            ``(3) A statement of the State's passenger rail service 
        objectives, including minimum service levels, for rail 
        transportation routes in the State.
            ``(4) A general analysis 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 investment program for current and 
        future freight and passenger infrastructure in the State that 
        meets the requirements of subsection (b).
            ``(6) A statement of public financing issues for rail 
        projects and service in the State, including a list of current 
        and prospective public capital and operating funding resources, 
        public subsidies, State taxation, and other financial policies 
        relating to rail infrastructure development.
            ``(7) An identification of rail infrastructure issues 
        within the State that reflects consultation with all relevant 
        stake holders.
            ``(8) A review of major passenger and freight intermodal 
        rail connections and facilities within the State, including 
        seaports, and prioritized options to maximize service 
        integration and efficiency between rail and other modes of 
        transportation within the State.
            ``(9) A review of publicly funded projects within the State 
        to improve rail transportation safety and security, including 
        all major projects funded under section 130 of title 23.
            ``(10) 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.
            ``(11) A compilation of studies and reports on high-speed 
        rail corridor development within the State not included in a 
        previous plan under this subchapter, and a plan for funding any 
        recommended development of such corridors in the State.
            ``(12) 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 investment 
        program included in a State rail plan under subsection (a)(5) 
        shall include the following matters:
                    ``(A) A list of any rail capital projects expected 
                to be undertaken or supported in whole or in part by 
                the State.
                    ``(B) A detailed funding plan for those projects.
            ``(2) Project list content.--The list of 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) public funding contributions for the 
                        projects; and
                            ``(ii) the public benefits.
            ``(3) Considerations for project list.--In preparing the 
        list of freight and intercity passenger rail capital projects, 
        a State rail transportation authority should take into 
        consideration the following matters:
                    ``(A) Contributions made by non-Federal and non-
                State sources through user fees, matching funds, or 
                other private capital involvement.
                    ``(B) Rail capacity and congestion effects.
                    ``(C) Effects to highway, aviation, and maritime 
                capacity, congestion, or safety.
                    ``(D) Regional balance.
                    ``(E) Environmental impact.
                    ``(F) Economic and employment impacts.
                    ``(G) Projected ridership and other service 
                measures for passenger rail projects.
``Sec. 22506. Review
    ``The Secretary shall prescribe procedures for States to submit 
State rail plans for review under this title, including standardized 
format and data requirements.''.
    (b) Conforming Amendment.--The table of chapters for subtitle V of 
title 49, United States Code, is amended by inserting the following 
after the item relating to chapter 223:

``225. STATE RAIL PLANS.....................................   22501''.

SEC. 523. RAIL COOPERATIVE RESEARCH PROGRAM.

    (a) Establishment and Content.--Chapter 249 of title 49, United 
States Code, is amended by adding at the end the following:
``Sec. 24910. Rail cooperative research program
    ``(a) In General.--The Secretary shall establish and carry out a 
rail cooperative research program. The program shall--
            ``(1) address, among other matters, intercity rail 
        passenger and freight rail services, including existing rail 
        passenger and freight technologies and speeds, incrementally 
        enhanced rail systems and infrastructure, and new high-speed 
        wheel-on-rail systems and rail security;
            ``(2) address ways to expand the transportation of 
        international trade traffic by rail, enhance the efficiency of 
        intermodal interchange at ports and other intermodal terminals, 
        and increase capacity and availability of rail service for 
        seasonal freight needs;
            ``(3) consider research on the interconnectedness of 
        commuter rail, passenger rail, freight rail, and other rail 
        networks; and
            ``(4) give consideration to regional concerns regarding 
        rail passenger and freight transportation, including meeting 
        research needs common to designated high-speed corridors, long-
        distance rail services, and regional intercity rail corridors, 
        projects, and entities.
    ``(b) Content.--The program to be carried out under this section 
shall include research designed--
            ``(1) to identify the unique aspects and attributes of rail 
        passenger and freight service;
            ``(2) to develop more accurate models for evaluating the 
        impact of rail passenger and freight service, including the 
        effects on highway and airport and airway congestion, 
        environmental quality, and energy consumption;
            ``(3) to develop a better understanding of modal choice as 
        it affects rail passenger and freight transportation, including 
        development of better models to predict utilization;
            ``(4) to recommend priorities for technology demonstration 
        and development;
            ``(5) to meet additional priorities as determined by the 
        advisory board established under subsection (c), including any 
        recommendations made by the National Research Council;
            ``(6) to explore improvements in management, financing, and 
        institutional structures;
            ``(7) to address rail capacity constraints that affect 
        passenger and freight rail service through a wide variety of 
        options, ranging from operating improvements to dedicated new 
        infrastructure, taking into account the impact of such options 
        on operations;
            ``(8) to improve maintenance, operations, customer service, 
        or other aspects of intercity rail passenger and freight 
        service;
            ``(9) to recommend objective methodologies for determining 
        intercity passenger rail routes and services, including the 
        establishment of new routes, the elimination of existing 
        routes, and the contraction or expansion of services or 
        frequencies over such routes;
            ``(10) to review the impact of equipment and operational 
        safety standards on the further development of high speed 
        passenger rail operations connected to or integrated with non-
        high speed freight or passenger rail operations; and
            ``(11) to recommend any legislative or regulatory changes 
        necessary to foster further development and implementation of 
        high speed passenger rail operations while ensuring the safety 
        of such operations that are connected to or integrated with 
        non-high speed freight or passenger rail operations.
    ``(c) Advisory Board.--
            ``(1) Establishment.--In consultation with the heads of 
        appropriate Federal departments and agencies, the Secretary 
        shall establish an advisory board to recommend research, 
        technology, and technology transfer activities related to rail 
        passenger and freight transportation.
            ``(2) Membership.--The advisory board shall include--
                    ``(A) representatives of State transportation 
                agencies;
                    ``(B) transportation and environmental economists, 
                scientists, and engineers; and
                    ``(C) representatives of Amtrak, the Alaska 
                Railroad, freight railroads, transit operating 
                agencies, intercity rail passenger agencies, railway 
                labor organizations, and environmental organizations.
    ``(d) National Academy of Sciences.--The Secretary may make grants 
to, and enter into cooperative agreements with, the National Academy of 
Sciences to carry out such activities relating to the research, 
technology, and technology transfer activities described in subsection 
(b) as the Secretary deems appropriate.''.
    (b) Clerical Amendment.--The chapter analysis for chapter 249 is 
amended by adding at the end the following:

``24910. Rail cooperative research program.''.

SEC. 524. HIGH-SPEED INTERCITY RAIL FACILITY BONDS.

    (a) Amendment.--Chapter 261 of title 49, United States Code, is 
amended by adding at the end the following new section:
``Sec. 26106. High-speed rail infrastructure bonds
    ``(a) Designation.--The Secretary may designate bonds for purposes 
of subsection (f) or section 54 of the Internal Revenue Code of 1986 
if--
            ``(1) the bonds are to be issued by--
                    ``(A) a State, if the entire railroad passenger 
                transportation corridor containing the infrastructure 
                project to be financed is within the State;
                    ``(B) 1 or more of the States that have entered 
                into an agreement or an interstate compact consented to 
                by Congress under section 410(a) of Public Law 105-134 
                (49 U.S.C 24101 nt); or
                    ``(C) an agreement or an interstate compact 
                described in subparagraph (B);
            ``(2) the bonds are for the purpose of financing--
                    ``(A) projects that make a substantial contribution 
                to providing the infrastructure and equipment required 
                to complete a high-speed rail transportation corridor 
                (including projects for the acquisition, financing, or 
                refinancing of equipment and other capital 
                improvements, including the introduction of new high-
                speed technologies such as magnetic levitation systems, 
                track or signal improvements, the elimination of grade 
                crossings, development of intermodal facilities, 
                improvement of train speeds or safety, or both, and 
                station rehabilitation or construction), but only if 
                the Secretary determines that the projects are part of 
                a viable and comprehensive high-speed rail 
                transportation corridor design for intercity passenger 
                service, including a design for minimally operable 
                segments of a corridor designated under section 
                104(d)(2) of title 23, United States Code; or
                    ``(B) projects for the Alaska Railroad;
            ``(3) for a railroad passenger transportation corridor 
        design that includes the use of rights-of-way owned by a 
        freight railroad, a written agreement exists between the 
        applicant and the freight railroad regarding such use and 
        ownership, including compensation for such use and assurances 
        regarding the adequacy of infrastructure capacity to 
        accommodate both existing and future freight and passenger 
        operations, and including an assurance by the freight railroad 
        that collective bargaining agreements with the freight 
        railroad's employees (including terms regulating the 
        contracting of work) shall remain in full force and effect 
        according to their terms for work performed by the freight 
        railroad on such railroad passenger transportation corridor;
            ``(4) the corridor design eliminates existing railway-
        highway grade crossings that the Secretary determines would 
        impede high-speed rail operations;
            ``(5) the applicant agrees to comply with--
                    ``(A) the standards of section 24312, as in effect 
                on September 1, 2002, with respect to the project in 
                the same manner that the National Railroad Passenger 
                Corporation is required to comply with such standards 
                for construction work financed under an agreement made 
                under section 24308(a); and
                    ``(B) the protective arrangements established under 
                section 504 of the Railroad Revitalization and 
                Regulatory Reform Act of 1976 (45 U.S.C. 836) with 
                respect to employees affected by actions taken in 
                connection with the project to be financed by the bond; 
                and
            ``(6) the applicant agrees not to pay the principal or 
        interest on the bonds using funds derived directly or 
        indirectly from the Highway Trust Fund, except as permitted by 
        law as of the date of the enactment of this section.
    ``(b) Bond Amount Limitation.--
            ``(1) In general.--The amount of bonds designated under 
        this section may not exceed--
                    ``(A) in the case of subsection (f) bonds, 
                $1,200,000,000 for each of the fiscal years 2007 
                through 2016; and
                    ``(B) in the case of section 54 bonds, 
                $1,200,000,000 for each of the fiscal years 2007 
                through 2016.
            ``(2) Carryover of unused limitation.--If for any fiscal 
        year the limitation amount under subparagraph (A) or (B) of 
        paragraph (1) exceeds--
                    ``(A) with respect to subparagraph (A) of paragraph 
                (1), the amount of subsection (f) bonds issued during 
                such year; or
                    ``(B) with respect to subparagraph (B) of paragraph 
                (1), the amount of section 54 bonds issued during such 
                year,
        the limitation amount under subparagraph (A) or (B) of 
        paragraph (1), as the case may be, for the following fiscal 
        year (through fiscal year 2020) shall be increased by the 
        amount of such excess.
    ``(c) Preference.--The Secretary shall give preference to the 
designation under this section of bonds for projects--
            ``(1) to be funded through a combination of subsection (f) 
        bonds and section 54 bonds;
            ``(2) which propose to link rail passenger service with 
        other modes of transportation;
            ``(3) expected to have a significant impact on air traffic 
        congestion;
            ``(4) expected to also improve commuter rail operations;
            ``(5) where all environmental work has already been 
        completed and the project is ready to commence; or
            ``(6) that have received financial commitments and other 
        support of State and local governments.
    ``(d) Timely Disposition of Application.--The Secretary shall grant 
or deny a requested designation within 9 months after receipt of an 
application.
    ``(e) Annual Reports.--
            ``(1) From issuer of bonds.--The issuer of bonds designated 
        under subsection (a) shall report annually to the Secretary 
        regarding the terms of outstanding designated bonds and the 
        progress made with respect to the project financed by the 
        bonds.
            ``(2) From secretary.--The Secretary, in consultation with 
        the Secretary of the Treasury, shall transmit to the Congress 
        an annual report which includes--
                    ``(A) reports received under paragraph (1); and
                    ``(B) an assessment of the progress made toward 
                completion of high-speed rail transportation corridors 
                resulting from projects financed by bonds designated 
                under subsection (a).
    ``(f) Tax Treatment of Subsection (f) Bonds.--
            ``(1) Exclusion from gross income.--The interest on a bond 
        designated by the Secretary under subsection (a) for purposes 
        of this subsection shall be excluded from gross income under 
        section 103 of the Internal Revenue Code of 1986, 
        notwithstanding section 149(c) of such Code.
            ``(2) Exemption from volume cap.--For purposes of section 
        146 of such Code, a bond designated by the Secretary under 
        subsection (a) for purposes of this subsection shall be 
        considered to be exempt from the volume cap of the issuing 
        authority in the same manner as bonds listed in subsection (g) 
        of such section 146.
    ``(g) Refinancing Rules.--Bonds designated by the Secretary under 
subsection (a) may be issued for refinancing projects only if the 
indebtedness being refinanced (including any obligation directly or 
indirectly refinanced by such indebtedness) was originally incurred by 
the issuer--
            ``(1) after the date of the enactment of this section;
            ``(2) for a term of not more than 3 years;
            ``(3) to finance projects described in subsection (a)(2); 
        and
            ``(4) in anticipation of being refinanced with proceeds of 
        a bond designated under subsection (a).
    ``(h) Provisions Regarding High-Speed Rail Service.--
            ``(1) Status as employer or carrier.--Any entity providing 
        railroad transportation (within the meaning of section 20102) 
        that begins operations after the date of the enactment of this 
        section and that uses property acquired pursuant to this 
        section (except as provided in subsection (a)(2)(B)), shall be 
        considered an employer for purposes of the Railroad Retirement 
        Act of 1974 (45 U.S.C. 231 et seq.) and considered a carrier 
        for purposes of the Railway Labor Act (45 U.S.C. 151 et seq.).
            ``(2) Collective bargaining agreement.--Any entity 
        providing high-speed intercity passenger railroad 
        transportation (within the meaning of section 20102) that 
        begins operations after the date of enactment of this section 
        on a project funded in whole or in part by bonds designated 
        under subsection (a), and replaces intercity rail passenger 
        service that was provided by another entity as of the date of 
        enactment of this section, shall enter into an agreement with 
        the authorized bargaining agent or agents for employees of the 
        predecessor provider that--
                    ``(A) gives each employee of the predecessor 
                provider priority in hiring according to the employee's 
                seniority on the predecessor provider for each position 
                with the replacing entity that is in the employee's 
                craft or class and is available within three years 
                after the termination of the service being replaced;
                    ``(B) establishes a procedure for notifying such an 
                employee of such positions;
                    ``(C) establishes a procedure for such an employee 
                to apply for such positions; and
                    ``(D) establishes rates of pay, rules, and working 
                conditions.
            ``(3) Immediate replacement of existing rail passenger 
        service.--
                    ``(A) Negotiations.--If the replacement of 
                preexisting intercity rail passenger service occurs 
                concurrent with or within a reasonable amount of time 
                before the commencement of the replacing entity's high-
                speed rail passenger service, the replacing entity 
                shall give written notice of its plan to replace 
                existing rail passenger service to the authorized 
                collective bargaining agent or agents for the employees 
                of the predecessor provider at least 90 days prior to 
                the date it plans to commence service. Within 5 days 
                after the date of receipt of such written notice, 
                negotiations between the replacing entity and the 
                collective bargaining agent or agents for the employees 
                of the predecessor provider shall commence for the 
                purpose of reaching agreement with respect to all 
                matters set forth in paragraph (2) (A)-(D). The 
                negotiations shall continue for 30 days or until an 
                agreement is reached, whichever is sooner. If at the 
                end of 30 days the parties have not entered into an 
                agreement with respect to all such matters, the 
                unresolved issues shall be submitted for arbitration in 
                accordance with the procedure set forth in subparagraph 
                (B).
                    ``(B) Arbitration.--If an agreement has not been 
                entered into with respect to all matters set forth in 
                paragraph (2) (A)-(D) as provided in subparagraph (A) 
                of this paragraph, the parties shall select an 
                arbitrator. If the parties are unable to agree upon the 
                selection of such arbitrator within 5 days, either or 
                both parties shall notify the National Mediation Board, 
                which shall provide a list of seven arbitrators with 
                experience in arbitrating rail labor protection 
                disputes. Within 5 days after such notification, the 
                parties shall alternately strike names from the list 
                until only one name remains, and that person shall 
                serve as the neutral arbitrator. Within 45 days after 
                selection of the arbitrator, the arbitrator shall 
                conduct a hearing on the dispute and shall render a 
                decision with respect to the unresolved issues set 
                forth in paragraph (2) (A)-(D). This decision shall be 
                final, binding, and conclusive upon the parties. The 
                salary and expenses of the arbitrator shall be borne 
                equally by the parties; all other expenses shall be 
                paid by the party incurring them.
                    ``(C) Service commencement.--A replacing entity 
                under this paragraph shall commence service only after 
                an agreement is entered into with respect to the 
                matters set forth in paragraph (2) (A)-(D) or the 
                decision of the arbitrator has been rendered.
            ``(4) Subsequent replacement of existing rail passenger 
        service.--If the replacement of existing rail passenger service 
        takes place within 3 years after the replacing entity commences 
        high-speed rail passenger service, the replacing entity and the 
        collective bargaining agent or agents for the employees of the 
        predecessor provider shall enter into an agreement with respect 
        to the matters set forth in paragraph (2) (A)-(D). If the 
        parties have not entered into an agreement with respect to all 
        such matters within 60 days after the date on which the 
        replacing entity replaces the predecessor provider, the parties 
        shall select an arbitrator using the procedures set forth in 
        paragraph (3)(B), who shall, within 20 days after the 
        commencement of the arbitration, conduct a hearing and decide 
        all unresolved issues. This decision shall be final, binding, 
        and conclusive upon the parties.
    ``(i) Issuance of Regulations.--Not later than 6 months after the 
date of the enactment of this section, the Secretary shall issue 
regulations for carrying out this section.
    ``(j) Definitions.--For purposes of this section--
            ``(1) Subsection (f) bond.--The term `subsection (f) bond' 
        means a bond designated by the Secretary under subsection (a) 
        for purposes of subsection (f).
            ``(2) Section 54 bond.--The term `section 54 bond' means a 
        bond designated by the Secretary under subsection (a) for 
        purposes of section 54 of the Internal Revenue Code of 1986 
        (relating to credit to holders of qualified high-speed rail 
        infrastructure bonds).''.
    (b) Table of Sections Amendment.--The table of sections of chapter 
261 of title 49, United States Code, is amended by adding after the 
item relating to section 26105 the following new item:

``26106. High-speed rail infrastructure bonds.''.

SEC. 525. TAX CREDIT TO HOLDERS OF QUALIFIED HIGH-SPEED 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 High-Speed 
                       Rail Infrastructure Bonds

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

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

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified high-speed 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 high-speed 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 high-speed 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 High-Speed Rail Infrastructure Bond.--For purposes 
of this part, the term `qualified high-speed rail infrastructure bond' 
means any bond issued as part of an issue if--
            ``(1) the issuer certifies that the Secretary of 
        Transportation has designated the bond for purposes of this 
        section under section 26106(a) of title 49, United States Code, 
        as in effect on the date of the enactment of this section,
            ``(2) 95 percent or more of the proceeds from the sale of 
        such issue are to be used for expenditures incurred after the 
        date of the enactment of this section for any project described 
        in section 26106(a)(2) of title 49, United States Code,
            ``(3) the term of each bond which is part of such issue 
        does not exceed 20 years,
            ``(4) the payment of principal with respect to such bond is 
        the obligation solely of the issuer, and
            ``(5) the issue meets the requirements of subsection (f) 
        (relating to arbitrage).
    ``(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 spend at least 95 percent of the proceeds 
                from the sale 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 to spend at least 10 percent of the proceeds from 
                the sale of the issue, or to commence construction, 
                with respect to such projects within the 6-month period 
                beginning on such date, and
                    ``(C) to proceed with due diligence to complete 
                such projects and to spend the proceeds from the sale 
                of the issue.
            ``(2) Rules regarding continuing compliance after 3-year 
        determination.--If at least 95 percent of the proceeds from the 
        sale of the issue is not 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 this subsection if either--
                    ``(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, or
                    ``(B) the following requirements are met:
                            ``(i) The issuer spends at least 75 percent 
                        of the proceeds from the sale of the issue for 
                        1 or more qualified projects within the 3-year 
                        period beginning on the date of issuance.
                            ``(ii) Either--
                                    ``(I) the issuer spends at least 95 
                                percent of the proceeds from the sale 
                                of the issue for 1 or more qualified 
                                projects within the 4-year period 
                                beginning on the date of issuance, or
                                    ``(II) the issuer 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 high-speed 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 under subsection (c) 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.
    ``(h) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Qualified project.--The term `qualified project' 
        means any project described in section 26106(a)(2) of title 49, 
        United States Code.
            ``(3) Treatment of changes in use.--For purposes of 
        subsection (e)(2), the proceeds from the sale of an issue shall 
        not be treated as used for a qualified project to the extent 
        that the issuer takes any action within its control which 
        causes such proceeds not to be used for a qualified project. 
        The Secretary shall prescribe regulations specifying remedial 
        actions that may be taken (including conditions to taking such 
        remedial actions) to prevent an action described in the 
        preceding sentence from causing a bond to fail to be a 
        qualified high-speed rail infrastructure bond.
            ``(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 high-speed 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 high-speed 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 high-speed 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 High-Speed Rail 
Infrastructure Bonds.--For purposes of this section, the credit allowed 
by section 54 to a taxpayer by reason of holding a qualified high-speed 
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 high-speed rail 
        infrastructure bonds.--For purposes of this section, the credit 
        allowed by section 54 to a taxpayer by reason of holding a 
        qualified high-speed 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 high-speed 
                      rail infrastructure bonds''.
            (2) Section 6401(b)(1) is amended by striking ``and G'' and 
        inserting ``G, and H''.
    (d) Issuance of Regulations.--Not later than 6 months after the 
date of the enactment of this section, the Secretary of the Treasury 
shall issue regulations for carrying out this section and the 
amendments made by this section.
    (e) High-Speed Intercity Rail Facilities.--
            (1) Requirement to meet title 49 requirements.--Section 
        142(i) of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new paragraph:
            ``(4) Additional requirements.--A bond issued as part of an 
        issue described in subsection (a)(11) shall not be considered 
        an exempt facility bond unless the requirements of paragraphs 
        (1) through (6) of section 26106(a) of title 49, United States 
        Code, are met.''.
            (2) Revision of speed requirement.--Section 142(i)(1) of 
        such Code is amended by striking ``150 miles per hour'' and 
        inserting ``110 miles per hour''.
    (f) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

               Subtitle D--Energy Supply and Freight Rail

SEC. 531. SHORT TITLE.

    This subtitle may be cited as the ``Railroad Track Modernization 
Act of 2006''.

SEC. 532. CAPITAL GRANTS FOR RAILROAD TRACK.

    (a) Amendment.--Chapter 223 of title 49, United States Code, is 
amended to read as follows:

            ``CHAPTER 223--CAPITAL GRANTS FOR RAILROAD TRACK

``Sec.
``22301. Capital grants for railroad track.
``Sec. 22301. Capital grants for railroad track
    ``(a) Establishment of Program.--
            ``(1) Establishment.--The Secretary of Transportation shall 
        establish a program of capital grants for the rehabilitation, 
        preservation, or improvement of railroad track (including 
        roadbed, bridges, and related track structures) of class II and 
        class III railroads. Such grants shall be for rehabilitating, 
        preserving, or improving track used primarily for freight 
        transportation to a standard ensuring that the track can be 
        operated safely and efficiently, including grants for 
        rehabilitating, preserving, or improving track to handle 
        286,000 pound rail cars. Grants may be provided under this 
        chapter--
                    ``(A) directly to the class II or class III 
                railroad; or
                    ``(B) with the concurrence of the class II or class 
                III railroad, to a State or local government.
            ``(2) State cooperation.--Class II and class III railroad 
        applicants for a grant under this chapter are encouraged to 
        utilize the expertise and assistance of State transportation 
        agencies in applying for and administering such grants. State 
        transportation agencies are encouraged to provide such 
        expertise and assistance to such railroads.
            ``(3) Interim regulations.--Not later than December 31, 
        2006, the Secretary shall issue temporary regulations to 
        implement the program under this section. Subchapter II of 
        chapter 5 of title 5 does not apply to a temporary regulation 
        issued under this paragraph or to an amendment to such a 
        temporary regulation.
            ``(4) Final regulations.--Not later than October 1, 2007, 
        the Secretary shall issue final regulations to implement the 
        program under this section.
    ``(b) Maximum Federal Share.--The maximum Federal share for 
carrying out a project under this section shall be 80 percent of the 
project cost. The non-Federal share may be provided by any non-Federal 
source in cash, equipment, or supplies. Other in-kind contributions may 
be approved by the Secretary on a case by case basis consistent with 
this chapter.
    ``(c) Project Eligibility.--For a project to be eligible for 
assistance under this section the track must have been operated or 
owned by a class II or class III railroad as of the date of the 
enactment of the Railroad Track Modernization Act of 2006.
    ``(d) Use of Funds.--Grants provided under this section shall be 
used to implement track capital projects as soon as possible. In no 
event shall grant funds be contractually obligated for a project later 
than the end of the third Federal fiscal year following the year in 
which the grant was awarded. Any funds not so obligated by the end of 
such fiscal year shall be returned to the Secretary for reallocation.
    ``(e) Additional Purpose.--In addition to making grants for 
projects as provided in subsection (a), the Secretary may also make 
grants to supplement direct loans or loan guarantees made under title V 
of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 
U.S.C. 822(d)), for projects described in the last sentence of section 
502(d) of such title. Grants made under this subsection may be used, in 
whole or in part, for paying credit risk premiums, lowering rates of 
interest, or providing for a holiday on principal payments.
    ``(f) Employee Protection.--The Secretary shall require as a 
condition of any grant made under this section that the recipient 
railroad provide a fair arrangement at least as protective of the 
interests of employees who are affected by the project to be funded 
with the grant as the terms imposed under section 11326(a), as in 
effect on the date of the enactment of the Railroad Track Modernization 
Act of 2006.
    ``(g) Labor Standards.--
            ``(1) Prevailing wages.--The Secretary shall ensure that 
        laborers and mechanics employed by contractors and 
        subcontractors in construction work financed by a grant made 
        under this section will be paid wages not less than those 
        prevailing on similar construction in the locality, as 
        determined by the Secretary of Labor under the Act of March 3, 
        1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a et seq.). 
        The Secretary shall make a grant under this section only after 
        being assured that required labor standards will be maintained 
        on the construction work.
            ``(2) Wage rates.--Wage rates in a collective bargaining 
        agreement negotiated under the Railway Labor Act (45 U.S.C. 151 
        et seq.) are deemed for purposes of this subsection to comply 
        with the Act of March 3, 1931 (known as the Davis-Bacon Act; 40 
        U.S.C. 276a et seq.).
    ``(h) Study.--The Secretary shall conduct a study of the projects 
carried out with grant assistance under this section to determine the 
public interest benefits associated with the light density railroad 
networks in the States and their contribution to a multimodal 
transportation system. Not later than March 31, 2008, the Secretary 
shall report to Congress any recommendations the Secretary considers 
appropriate regarding the eligibility of light density rail networks 
for Federal infrastructure financing.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation $350,000,000 for each 
of the fiscal years 2007 through 2009 for carrying out this section.''.
    (b) Conforming Amendment.--The item relating to chapter 223 in the 
table of chapters of subtitle V of title 49, United States Code, is 
amended to read as follows:

``223. CAPITAL GRANTS FOR RAILROAD TRACK....................   22301''.

                      Subtitle E--Rail Reliability

SEC. 541. RELIABILITY OF RAILROAD TRANSPORTATION OF ENERGY SUPPLIES.

    (a) Finding.--The Congress finds that the Nation's rail system is a 
critical part of national security, and that the Surface Transportation 
Board has the obligation and authority to ensure that the Nation's rail 
infrastructure is adequate to enable safe, efficient, and reliable 
delivery of passengers, energy supplies, and other goods and services, 
and that the Nation's rail carriers meet their common carrier 
obligations to deliver products and maintain infrastructure at a level 
which provides for the safe, efficient, and reliable delivery of 
passengers, energy supplies, and other goods and services.
    (b) Reliability Requirements.--Not later than 180 days after the 
date of enactment of this Act, the Surface Transportation Board, after 
consultation with the Secretary of Transportation, the Secretary of 
Energy, the Secretary of Commerce, the Secretary of Agriculture, the 
Secretary of Defense, and the Chairman of the Federal Energy Regulatory 
Commission, shall issue regulations requiring implementation of the 
reliability standards approved under this section.
    (c) Definition.--For purposes of this section, the term 
``reliability standard'' means a requirement, approved by the Surface 
Transportation Board under this section, to provide for reliable and 
timely operation of railroad transportation of passengers, energy 
supplies, and other goods and services. The term shall include a 
requirement for operation and maintenance of the railroad system as 
well as for efficient transfer of freight cars and train sets between 
different railroads.
    (d) Advisory Panel.--Not later than 90 days after the date of 
enactment of this Act, the Surface Transportation Board shall establish 
an advisory panel, consisting of representatives of the rail carrier 
industry, energy supply companies, and industrial and individual 
consumers of energy and rail transportation services. Such advisory 
panel shall ensure its independence of the users, owners, and operators 
of the railroad system while ensuring fair stakeholder representation 
in the selection of its directors, ensure balanced decisionmaking in 
any committee or organizational structure, and provide for reasonable 
notice and opportunity for public comment, due process, openness, and 
balance of interests in developing reliablility standards and otherwise 
exercising its duties. Such advisory panel shall, after obtaining all 
relevant stakeholder comments, make recommendations for the 
establishment of standards for rail operations to ensure the timely and 
efficient transportation of fuels and energy feedstocks, especially 
during times of energy or fuel supply emergencies. The first such 
recommendations shall be transmitted to the Surface Transportation 
Board not later than 270 days after the date of enactment of this Act. 
These recommendations may include suggestions for expanded rail 
infrastructure to expand, connect new, or bolster existing points 
within the current rail line network.
    (e) Surface Transportation Board Approval.--
            (1) In general.--The Surface Transportation Board may 
        approve, by rule or order, a proposed reliability standard or 
        modification to a reliability standard if it determines that 
        the standard is just, reasonable, not unduly discriminatory or 
        preferential, and in the public interest. The Surface 
        Transportation Board shall use the recommendations developed by 
        the advisory panel under subsection (d) with respect to the 
        content of a proposed standard or modification to a reliability 
        standard. A proposed standard or modification shall take effect 
        upon approval by the Surface Transportation Board. The Surface 
        Transportation Board shall approve or disapprove the first 
        recommended standards transmitted by the advisory panel not 
        later than 1 year after receiving such transmittal.
            (2) Remand.--The Surface Transportation Board shall remand 
        to the advisory panel for further consideration a proposed 
        reliability standard or a modification to a reliability 
        standard that the Surface Transportation Board disapproves in 
        whole or in part.
            (3) Surface transportation board initiated standards.--The 
        Surface Transportation Board, upon its own motion or upon 
        complaint, may request the advisory panel to submit to the 
        Surface Transportation Board a recommendation for a proposed 
        reliability standard or modification to a reliability standard 
        that addresses a specific matter if the Surface Transportation 
        Board considers such a new or modified reliability standard 
        appropriate to carry out this section. If the advisory panel 
        fails to submit a proposed or modified standard within 1 year 
        after such a request from the Surface Transportation Board, the 
        Board may implement its own standard to carry out this section.
            (4) Conflict.--A final rule adopted under this section 
        shall include fair processes for the identification and timely 
        resolution of any conflict between a reliability standard and 
        any function, rule, order, tariff, rate schedule, or agreement 
        accepted, approved, or ordered by the Surface Transportation 
        Board applicable to a rail carrier. Such rail carrier shall 
        continue to comply with such function, rule, order, tariff, 
        rate schedule, or agreement accepted approved, or ordered by 
        the Surface Transportation Board until--
                    (A) the Surface Transportation Board finds a 
                conflict exists between a reliability standard and any 
                such provision;
                    (B) the Surface Transportation Board orders a 
                change to such provision; and
                    (C) the ordered change becomes effective.
        If the Surface Transportation Board determines that a 
        reliability standard needs to be changed as a result of such a 
        conflict, it shall order the advisory panel to develop and 
        recommend to the Surface Transportation Board a modified 
        reliability standard.
            (5) Penalties.--On its own motion or upon complaint, the 
        Surface Transportation Board may order compliance with a 
        reliability standard and may impose a penalty against a rail 
        carrier or other entity if the Surface Transportation Board 
        finds, after notice and opportunity for a hearing, that the 
        rail carrier or other entity has engaged or is about to engage 
        in any acts or practices that constitute or will constitute a 
        violation of a reliability standard.
                                 <all>