[Congressional Record Volume 149, Number 115 (Wednesday, July 30, 2003)]
[Senate]
[Pages S10278-S10285]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (by request):
  S. 1501. A bill to amend title 49, United States code, to provide for 
stable, productive, and efficient passenger rail service in the United 
States, and for other purposes; to the Committee on Commerce, Science, 
and Transportation.
  Mr. McCAIN. Mr. President, today, by request, I am introducing the 
Passenger Rail Investment Reform Act, the Administration's long-awaited 
legislative proposal for restructuring Amtrak and the intercity 
passenger rail program. In doing so, I want to express my appreciation 
to Transportation Secretary Mineta and departing Deputy Secretary 
Michael Jackson for meeting their commitment to me in April to deliver 
the Administration's proposal before the August recess. I also want to 
credit the work of the Amtrak Reform Council, the basis for several 
elements of the Administration's plan.
  Amtrak began operation in 1971 as a for-profit corporation and was to 
be free of all Federal support by 1973. Throughout its history, 
including between 1997 and 2001, Amtrak led Congress to believe that 
profitability, or at least operational self-sufficiency was achievable. 
But 32 years after its establishment, Amtrak is running annual deficits 
exceeding $1 billion; has run up a debt of nearly $5 billion; continues 
to operate trains that lose over $400 per passenger; and yet still has 
less than 1 percent of the intercity travel market. Clearly, reform is 
needed.
  I hope the legislation I am introducing today will serve as the basis 
for developing a consensus about the future of Amtrak and intercity 
rail passenger service. Even Amtrak supporters should admit that 
without significant restructuring, the passenger rail program cannot be 
entrusted with billions of dollars of additional financial support from 
the taxpayers, as some are proposing, particularly financing outside of 
the annual appropriations process, which at least gives Congress the 
ability to adjust Amtrak's funding based on its performance and use of 
taxpayer dollars. Nor, in my view, should high-speed rail projects go 
forward until the Amtrak problem is solved.
  My priority is to establish a network of train service that makes 
economic sense, minimizes subsidies at all levels of government, and 
provides fair and open competition for Amtrak. The Administration's 
proposal is a good start. Federal support for intercity passenger rail 
service would be modeled after the existing transit program and consist 
of capital funding matched by the States and managed through a ``full 
funding grant agreement'' process. States, rather than the Federal 
Government, would be responsible for funding operating losses after a 
transition period.
  Following the recommendation of the Amtrak Reform Council, the 
legislation would divide Amtrak into an operating company which would 
operate train services, and an infrastructure company which would 
maintain the Northeast Corridor (NEC). After a transition period, the 
services provided by both companies would be subject to competition 
through competitive bidding. The NEC would be restored to a state of 
good repair, and leased to and managed by an interstate compact. Amtrak 
would not be privatized but would have to compete with companies in the 
private sector, ensuring a lower-cost solution for the taxpayers.
  I intend to hold a hearing on the Administration's bill and the bill 
being introduced today by Senator Hutchison, the Chairman of the 
Subcommittee on Surface Transportation and Merchant Marine. If a 
consensus can be reached on a responsible proposal to fund and reform 
Amtrak and provide for an improved rail passenger program, the 
Committee will mark up legislation in the fall.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1501

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Purposes; Definitions.

         TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

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

                       TITLE II--FINANCIAL REFORM

Sec. 201. Limitations on availability of grants.
Sec. 202. Spending plans for capital backlog reduction.
Sec. 203. Redemption of common stock.
Sec. 204. Retirement of preferred stock; transfer of assets.
Sec. 205. Real estate and asset sales.
Sec. 206. Management and transfer of secured debt.
Sec. 207. Transition assistance.

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

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

     SEC. 2. PURPOSES; DEFINITIONS.

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

         TITLE I--NATIONAL PASSENGER RAIL SERVICE RESTRUCTURING

     SEC. 101. BOARD OF DIRECTORS OF AMTRAK.

       Section 24302 of title 49, United States Code, is amended 
     to read as follows:

     ``Sec. 24302. Board of directors

       ``(a) Membership.--
       ``(1) In general.--Until the board of directors provided 
     for in subsection (f) assumes operational responsibility and 
     control, the board of directors of Amtrak shall be the 
     transition board provided for by this subsection.
       ``(2) Transition board.--The transition board of directors 
     of Amtrak shall consist of 11 voting members, including--
       ``(A) the Secretary of Transportation, or an officer of the 
     United States within the Department of Transportation 
     compensated under the Executive Schedule under title 5, who 
     is designated by the Secretary; and
       ``(B) 10 other members appointed by the President, by and 
     with the advice and consent of the Senate.
       ``(3) President of Amtrak.--The President of Amtrak shall 
     serve as an ex officio, nonvoting, member of the transition 
     board of directors.
       ``(b) Compensation.--Members of the transition board of 
     directors shall serve without pay, but shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with sections 5702 and 5703 of title 5.

[[Page S10279]]

       ``(c) Term of Office.--Members serving un-expired terms on 
     the date of enactment of the Passenger Rail Investment Reform 
     Act may continue to serve until the earlier of the expiration 
     of their terms or the date on which the restructuring 
     mandated under section 24310 of this title is implemented. 
     Members appointed by the President under subsection (a)(1)(B) 
     shall serve for a term that expires on the date the 
     restructuring mandated in section 24310 of this title is 
     implemented. At the expiration of their terms, members of the 
     Board shall be eligible to serve as members of the boards of 
     successor corporations to Amtrak.
       ``(d) Quorum.--At any time after the date of enactment of 
     the Passenger Rail Investment Reform Act, a majority of the 
     transition board members who have been lawfully appointed 
     shall constitute a quorum for purposes of conducting board 
     meetings and making all necessary decisions regarding the 
     operations, structure, and business affairs of Amtrak.
       ``(e) Asset Transition Committee.--
       ``(1) In general.--The transition board of directors shall 
     form an asset transition committee comprised of the Secretary 
     or the Secretary's designee, and 2 other members, or 1 other 
     member if 2 other members are not lawfully appointed.
       ``(2) Powers and duties.--In addition to other powers and 
     duties assigned by the board, the Asset Transition Committee 
     has the duty to ensure that the public interest is served in 
     board decisions and Amtrak management actions that change the 
     use of or status of--
       ``(A) the contractual right of access of Amtrak to rail 
     lines of other railroads;
       ``(B) Amtrak secured debt;
       ``(C) Northeast Corridor real property and assets; and
       ``(D) rolling stock.
       ``(3) Approval required.--The board may not take an action 
     with regard to the assets or secured debt specified in 
     paragraph (2), or permit an Amtrak management action with 
     regard to those assets, that is not approved by the asset 
     transition committee.
       ``(f) Board after Restructuring Completed.--
       ``(1) In general.--Upon the commencement of operations of 
     the Passenger Rail Service Provider and the Passenger Rail 
     Infrastructure Manager established under section 24310 of 
     this title, the board of directors of Amtrak shall consist 
     of--
       ``(A) the Secretary of Transportation;
       ``(B) the Federal Railroad Administrator or another officer 
     of the United States within the Department of Transportation 
     compensated under the Executive Schedule under title 5, 
     United States Code, who is designated by the Secretary; and
       ``(C) the Federal Transit Administrator or another officer 
     of the United States within the Department of Transportation 
     compensated under the Executive Schedule under title 5, who 
     is designated by the Secretary.
       ``(2) Transition board directors shifted.--When the board 
     of directors provided for in paragraph (1) takes office, the 
     members of the transition board of directors, with the 
     exception of the Secretary of Transportation, shall--
       ``(A) cease to serve as appointees of the President to the 
     transition board of directors; and
       ``(B) become members of the board of directors of the 
     Passenger Rail Service Provider or the Passenger Rail 
     Infrastructure Manager established under section 24310 of 
     this title.''.

     SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

       (a) In General.--Chapter 243 of title 49, United States 
     Code, is amended by inserting after section 24309 the 
     following:

     ``Sec. 24310. Amtrak restructuring mandate

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

[[Page S10280]]

       ``(1) Amtrak shall ensure that the implementation of the 
     restructuring prescribed in this section gives due 
     consideration to the needs of freight and commuter rail 
     operations that, as of the effective date of the Passenger 
     Rail Investment Reform Act, operate in the Northeast Corridor 
     on Amtrak right of way.
       ``(2) Notwithstanding paragraph (1), commuter services 
     headquartered in a State or Commonwealth that is not a member 
     of the Northeast Corridor Compact after the last day of year 
     2, shall pay the fully allocated costs incurred by the 
     successor corporation or any successor entity for access to 
     and use of the Northeast Corridor for such services.
       ``(3) The right of access by Amtrak to rail lines owned by 
     other carriers is, as of the date of enactment of the 
     Passenger Rail Investment Reform Act, restricted as follows:
       ``(A) The terms and conditions for operation of an 
     intercity passenger rail route or frequency to be added after 
     that date shall be determined by negotiation and mutual 
     agreement between the host railroad and the operator of the 
     route or frequency sought to be added, with no preferential 
     right of access.
       ``(B) If not utilized by Amtrak, Amtrak's right of access 
     to any segment of rail line owned by another rail carrier may 
     be assigned to no more than 1 intercity passenger rail 
     operator during the term of the assignment, except by 
     agreement among Amtrak, its assignee, and the owner of the 
     rail line.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     243 of title 49, United States Code, is amended by inserting 
     the following after the item relating to section 24309:

  ``24310. Amtrak restructuring mandate''.

     SEC. 103. NORTHEAST CORRIDOR COMPACT.

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

     SEC. 104. ASSISTANCE TO ADDRESS CAPITAL NEEDS.

       (a) In General.--There are authorized to be appropriated to 
     the Secretary of Transportation, for capital expenditures in 
     compliance with capital spending plans developed under 
     section 202 of this Act, including the Secretary's expenses 
     related thereto, the following amounts:
       (1) Such sums as may be necessary for year 3.

[[Page S10281]]

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

     SEC. 105. EMPLOYEE TRANSITION ASSISTANCE; AUTHORIZATION.

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

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

       (a) In General.--Chapter 243 of title 49, United States 
     Code, is amended by adding at the end the following:

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

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

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

     SEC. 107. DEFINITIONS.

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

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

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

                      TITLE II--FINANCIAL REFORMS

     SEC. 201. LIMITATIONS ON AVAILABILITY OF GRANTS.

       (a) In General.--Chapter 43 of title 49, United States 
     Code, is amended by inserting after section 24313 the 
     following:

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

       ``(a) Requirements Prior to Restructuring.--A grant made to 
     the National Railroad Passenger Corporation under the 
     authority of this part between the first day of year 1, and 
     the establishment and commencement of operations by the 
     successor corporations under section 24310 of this title may 
     only be made subject to the following limitations:
       ``(1) The Secretary of Transportation shall not disburse 
     funding to cover operating losses on a long-distance train 
     route without first receiving and approving a grant request 
     for that specific train route.
       ``(2) Each such grant request shall be accompanied by a 
     detailed financial analysis and revenue projection justifying 
     the Federal support to the Secretary's satisfaction.
       ``(3) The Secretary of Transportation and the board of 
     directors of the Corporation

[[Page S10282]]

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

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

     SEC. 202. SPENDING PLANS FOR CAPITAL BACKLOG REDUCTION.

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

     SEC. 203. REDEMPTION OF COMMON STOCK.

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

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

       (a) Transfer.-- Not later than 30 days after the redemption 
     or acquisition of stock

[[Page S10283]]

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

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

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

     SEC. 206. MANAGEMENT AND TRANSFER OF SECURED DEBT.

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

     SEC. 207. TRANSITION ASSISTANCE.

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

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

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

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

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

``Sec.
``24401. Definitions; effective date
``24402. Capital investment grants to support intercity passenger rail 
              service
``24403. Project management oversight
``24404. Use of capital grants to finance first-dollar liability of 
              grant project
``24405. Authorization of appropriations

     ``Sec. 24401. Definitions; effective date.

       ``(a) Definitions.--In this chapter:
       ``(1) Applicant.--The term `applicant' means a State, an 
     Interstate Compact (including the Northeast Corridor Compact 
     as specified in section 103 of the Passenger Rail Investment 
     Reform Act), or a public agency established by one or more 
     States and having responsibility for providing intercity 
     passenger rail service.
       ``(2) Capital project.--The term `capital project' means a 
     project within a corridor plan or program for--
       ``(A) acquiring, constructing, supervising or inspecting 
     equipment or a facility for use in intercity passenger rail 
     service, expenses incidental to the acquisition or 
     construction (including designing, engineering, location 
     surveying, mapping, environmental studies, and acquiring 
     rights-of-way), payments for the capital portions of rail 
     trackage rights agreements, passenger rail-related 
     intelligent transportation systems, highway-rail grade 
     crossing improvements on routes used

[[Page S10284]]

     for intercity passenger rail service, relocation assistance, 
     acquiring replacement housing sites, and acquiring, 
     constructing, relocating, and rehabilitating replacement 
     housing;
       ``(B) rehabilitating, remanufacturing or overhauling rail 
     rolling stock and facilities used primarily in intercity 
     passenger rail service; or
       ``(C) the first-dollar liability costs for insurance 
     related to the provision of intercity passenger rail service.
       ``(3) Intercity passenger rail service.--The term 
     `intercity passenger rail service' means transportation 
     services with the primary purpose of passenger transportation 
     between towns, cities, and metropolitan areas by rail, 
     including high-speed rail.
       ``(b) Effective Date.--This chapter is effective on the 
     first day of year 2.

     ``Sec. 24402. Capital investment grants to support intercity 
       passenger rail service

       ``(a) General Authority.--
       ``(1) Grants.--The Secretary of Transportation may make 
     grants under this section to an applicant to assist in 
     financing the capital costs of facilities and equipment 
     necessary to provide intercity passenger rail transportation.
       ``(2) Terms and conditions.--The Secretary shall require 
     that a grant under this section be subject to the terms, 
     conditions, requirements, and provisions the Secretary 
     decides are necessary or appropriate for the purposes of this 
     section, including requirements for the disposition of net 
     increases in value of real property resulting from the 
     project assisted under this section.
       ``(3) Limitation.--A grant under this section may not be 
     made for a project or program of projects that qualifies for 
     financial assistance under chapter 53 of this title.
       ``(b) Project as Part of Approved Program.--
       ``(1) In general.--The Secretary may not approve a grant 
     for a project under this section unless the Secretary finds 
     that the project is part of an approved corridor plan and 
     program developed under section 5303 of this title and that 
     the applicant or recipient has or will have the legal, 
     financial, and technical capacity to carry out the project 
     (including safety and security aspects of the project), 
     satisfactory continuing control over the use of the equipment 
     or facilities, and the capability and willingness to maintain 
     the equipment or facilities.
       ``(2) Eligibility information.--An applicant shall provide 
     sufficient information upon which the Secretary can make the 
     findings required by this subsection.
       ``(3) Proposed operator justification.--If an applicant has 
     not selected the proposed operator of its service 
     competitively, the applicant shall provide written 
     justification to the Secretary showing why the proposed 
     operator is the best, taking into account price and other 
     factors, and that use of the proposed operator will not 
     increase the capital cost of the project.
       ``(4) Rail agreement.--An applicant shall demonstrate that 
     it has agreed with the railroad over which the intercity 
     passenger rail service will operate concerning the 
     applicant's operating and capital plans.
       ``(c) Letters of Intent, Full Funding Grant Agreements, and 
     Early Systems Work Agreements.--
       ``(1) Letter of intent.--
       ``(A) The Secretary may issue a letter of intent to an 
     applicant announcing an intention to obligate, for a major 
     capital project under this section, an amount from future 
     available budget authority specified in law that is not more 
     than the amount stipulated as the financial participation of 
     the Secretary in the project.
       ``(B) At least 30 days before issuing a letter under 
     subparagraph (A) of this paragraph or entering into a full 
     funding grant agreement, the Secretary shall notify in 
     writing the Committee on Transportation and Infrastructure of 
     the House of Representatives and the Committee on Commerce, 
     Science, and Transportation of the Senate and the House of 
     Representatives and Senate Committees on Appropriations of 
     the proposed letter or agreement. The Secretary shall include 
     with the notification a copy of the proposed letter or 
     agreement as well as the evaluations and ratings for the 
     project.
       ``(C) The issuance of a letter is deemed not to be an 
     obligation under sections 1108(c) and (d), 1501, and 1502(a) 
     of title 31, or an administrative commitment.
       ``(D) An obligation or administrative commitment may be 
     made only when amounts are appropriated.
       ``(2) Full funding agreement.--
       ``(A) The Secretary may make a full funding grant agreement 
     with an applicant. The agreement shall--
       ``(i) establish the terms of participation by the United 
     States Government in a project under this section;
       ``(ii) establish the maximum amount of Government financial 
     assistance for the project;
       ``(iii) cover the period of time for completing the 
     project, including a period extending beyond the period of an 
     authorization; and
       ``(iv) make timely and efficient management of the project 
     easier according to the law of the United States.
       ``(B) An agreement under this paragraph obligates an amount 
     of available budget authority specified in law and may 
     include a commitment, contingent on amounts to be specified 
     in law in advance for commitments under this paragraph, to 
     obligate an additional amount from future available budget 
     authority specified in law. The agreement shall state that 
     the contingent commitment is not an obligation of the 
     Government and is subject to subject to the availability of 
     appropriations made by Federal law and to Federal laws in 
     force on or enacted after the date of the contingent 
     commitment. Interest and other financing costs of efficiently 
     carrying out a part of the project within a reasonable time 
     are a cost of carrying out the project under a full funding 
     grant agreement, except that eligible costs may not be more 
     than the cost of the most favorable financing terms 
     reasonably available for the project at the time of 
     borrowing. The applicant shall certify, in a way satisfactory 
     to the Secretary, that the applicant has shown reasonable 
     diligence in seeking the most favorable financing terms.
       ``(3) Early systems work agreement.--
       ``(A) The Secretary may make an early systems work 
     agreement with an applicant if a record of decision under the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) has been issued on the project and the Secretary finds 
     there is reason to believe--
       ``(i) a full funding grant agreement for the project will 
     be made; and
       ``(ii) the terms of the work agreement will promote 
     ultimate completion of the project more rapidly and at less 
     cost.
       ``(B) A work agreement under this paragraph obligates an 
     amount of available budget authority specified in law and 
     shall provide for reimbursement of preliminary costs of 
     carrying out the project, including land acquisition, timely 
     procurement of system elements for which specifications are 
     decided, and other activities the Secretary decides are 
     appropriate to make efficient, long-term project management 
     easier. A work agreement shall cover the period of time the 
     Secretary considers appropriate. The period may extend beyond 
     the period of current authorization. Interest and other 
     financing costs of efficiently carrying out the work 
     agreement within a reasonable time are a cost of carrying out 
     the agreement, except that eligible costs may not be more 
     than the cost of the most favorable financing terms 
     reasonably available for the project at the time of 
     borrowing. The applicant shall certify, in a way satisfactory 
     to the Secretary, that the applicant has shown reasonable 
     diligence in seeking the most favorable financing terms. If 
     an applicant does not carry out the project for reasons 
     within the control of the applicant, the applicant shall 
     repay all Government payments made under the work agreement 
     plus reasonable interest and penalty charges the Secretary 
     establishes in the agreement.
       ``(4) Limit on total obligations and commitments.--The 
     total estimated amount of future obligations of the 
     Government and contingent commitments to incur obligations 
     covered by all outstanding letters of intent, full funding 
     grant agreements, and early systems work agreements may be 
     not more than the amount authorized under section 24405 of 
     this title, less an amount the Secretary reasonably estimates 
     is necessary for grants under this section not covered by a 
     letter. The total amount covered by new letters and 
     contingent commitments included in full funding grant 
     agreements and early systems work agreements may be not more 
     than a limitation specified in law.
       ``(d) Federal Share of Net Project Cost.--
       ``(1) In general.--
       ``(A) Based on engineering studies, studies of economic 
     feasibility, and information on the expected use of equipment 
     or facilities, the Secretary shall estimate the net project 
     cost.
       ``(B) A grant for the project shall not exceed the 
     specified percentage of the project net capital cost 
     established for the year the grant is approved, as follows:
       ``(i) 100 percent in the case of approval for year 2.
       ``(ii) 80 percent in the case of approval for year 3.
       ``(iii) 60 percent in the case of approval for year 4.
       ``(iii) 50 percent in the case of approval for year 5, and 
     thereafter.
       ``(C) The Secretary shall give priority in allocating 
     future obligations and contingent commitments to incur 
     obligations to grant requests seeking a lower federal share 
     of the project net capital cost.
       ``(2) Additional funding.--Up to an additional 30 percent 
     of project net capital cost may be funded from amounts 
     appropriated to or made available to a department or agency 
     of the Federal Government that are eligible to be expended 
     for transportation.
       ``(e) Undertaking Projects in Advance.--
       ``(1) In general.--The Secretary may pay the Federal share 
     of the net capital project cost to an applicant that carries 
     out any part of a project described in this section according 
     to all applicable procedures and requirements if--
       ``(A) the applicant applies for the payment;
       ``(B) the Secretary approves the payment; and
       ``(C) before carrying out a part of the project, the 
     Secretary approves the plans and specifications for the part 
     in the same way as other projects under this section.
       ``(2) Interest costs.--The cost of carrying out part of a 
     project includes the amount of interest earned and payable on 
     bonds issued by the applicant to the extent proceeds of the 
     bonds are expended in carrying out the part. The amount of 
     interest includable as cost under this paragraph may not be 
     more

[[Page S10285]]

     than the most favorable interest terms reasonably available 
     for the project at the time of borrowing. The applicant shall 
     certify, in a manner satisfactory to the Secretary, that the 
     applicant has shown reasonable diligence in seeking the most 
     favorable financial terms.
       ``(3) Use of cost indices.--The Secretary shall consider 
     changes in capital project cost indices when determining the 
     estimated cost under paragraph (2) of this subsection.

     ``Sec. 24403. Project management oversight

       ``(a) Project Management Plan Requirements.--To receive 
     Federal financial assistance for a major capital project 
     under this chapter, an applicant shall prepare and carry out 
     a project management plan approved by the Secretary of 
     Transportation. The plan shall provide for--
       ``(1) adequate recipient staff organization with well-
     defined reportingrelationships, statements of functional 
     responsibilities, job descriptions, and job qualifications;
       ``(2) a budget covering the project management 
     organization, appropriateconsultants, property acquisition, 
     utility relocation, systems demonstration staff, audits, and 
     miscellaneous payments the recipient may be prepared to 
     justify;
       ``(3) a construction schedule for the project;
       ``(4) a document control procedure and recordkeeping 
     system;
       ``(5) a change order procedure that includes a documented, 
     systematicapproach to handling the construction change 
     orders;
       ``(6) organizational structures, management skills, and 
     staffing levelsrequired throughout the construction phase;
       ``(7) quality control and quality assurance functions, 
     procedures, and responsibilities for construction, system 
     installation, and integration of system components;
       ``(8) material testing policies and procedures;
       ``(9) internal plan implementation and reporting 
     requirements;
       ``(10) criteria and procedures to be used for testing the 
     operationalsystem or its major components;
       ``(11) periodic updates of the plan, especially related to 
     project budget and project schedule, financing, and ridership 
     estimates; and
       ``(12) the recipient's commitment to submit a project 
     budget and project schedule to the Secretary each month.
       ``(b) Secretarial Oversight.--
       ``(1) In general.--The Secretary may use no more than 0.5 
     percent of amounts made available in a fiscal year for 
     capital projects under this chapter to enter into contracts 
     to oversee the construction of such projects.
       ``(2) Use of funds.--The Secretary may use amounts 
     available under paragraph (1) of this subsection to make 
     contracts for safety, procurement, management, and financial 
     compliance reviews and audits of a recipient of amounts under 
     paragraph (1).
       ``(3) Federal share.--The Federal Government shall pay the 
     entire cost of carrying out a contract under this subsection.
       ``(c) Access to Sites and Records.--Each recipient of 
     assistance under this chapter shall provide the Secretary and 
     a contractor the Secretary chooses under subsection (b) of 
     this section with access to the construction sites and 
     records of the recipient when reasonably necessary.
       ``(d) Regulations.-- The Secretary shall prescribe 
     regulations necessary to carry out this section. The 
     regulations shall include--
       ``(1) a definition of `major capital project' for this 
     section;
       ``(2) a requirement that oversight begin during the 
     preliminary engineering stage of a project, unless the 
     Secretary finds it more appropriate to begin oversight during 
     another stage of a project, to maximize the transportation 
     benefits and cost savings associated with project management 
     oversight;
       ``(3) a deadline by which all grant applications for a 
     fiscal year shall be submitted that is early enough to permit 
     the Secretary to evaluate all timely applications thoroughly 
     before making grants;
       ``(4) a formula based on population, track miles of 
     railroad, and passenger miles traveled in the prior fiscal 
     year by which one-half of the funds appropriated for capital 
     grants for each fiscal year are to be allocated among the 
     States;
       ``(5) a requirement that, if a State does not timely apply 
     for its share of formula grant funds under paragraph (4) of 
     this subsection, those funds will be made available to other 
     States under paragraph (6) of this subsection; and
       ``(6) criteria by which the Secretary will allocate one-
     half of the funds appropriated for capital grants for each 
     fiscal year, including at least projected ridership, 
     passenger rail and intermodal connections, congestion and air 
     quality mitigation, underserved communities, and the effect 
     of the grant on whether existing service will continue.

     ``Sec. 24404. Use of capital grants to finance first-dollar 
       liability of grant project.

       ``Notwithstanding the requirements of section 24402 of this 
     title, the Secretary of Transportation may approve the use of 
     capital assistance under this chapter to fund self-insured 
     retention of risk for the first tier of liability insurance 
     coverage for rail passenger service associated with the 
     capital assistance grant, but the coverage may not exceed 
     $20,000,000 per occurrence or $20,000,000 in aggregate per 
     year.

     ``Sec. 24405. Authorization of appropriations.

       ``There are authorized to be appropriated to the Secretary 
     of Transportation to make capital financial assistance grants 
     under this chapter, including administrative expenses, the 
     following amounts:
       ``(1) Such sums as may be necessary in year 2.
       ``(2) Such sums as may be necessary in year 3.
       ``(3) Such sums as may be necessary in year 4.
       ``(4) Such sums as may be necessary in year 5.
       ``(5) Such sums as may be necessary in year 6.''.
       (b) Conforming Amendments.--
       (1) The table of chapters for title 49, United States Code, 
     is amended by inserting the following after the item relating 
     to chapter 243:

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

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

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

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

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

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