[Congressional Record Volume 150, Number 49 (Thursday, April 8, 2004)]
[Senate]
[Pages S4030-S4042]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself and Mr. Sununu):
  S. 2306. A bill to reauthorize, restructure, and reform the intercity 
passenger rail service program; to the Committee on Commerce, Science, 
and Transportation.
  Mr. McCAIN. Mr. President, today, joined by Senator Sununu, I am 
introducing legislation to fundamentally reform our Nation's intercity 
rail passenger program. The proposal adopts the core concepts for 
reform advanced by the administration in its Amtrak legislation--cost-
sharing with the States, a network of trains that makes economic sense, 
and fair and open competition for Amtrak. However, in recognition of 
the magnitude and complexity of the task of restructuring Amtrak, the 
legislation takes a more moderate, realistic approach to reform. While 
I would prefer to see more accomplished in the next 6 years, enactment 
of the restructuring and reforms we are proposing today would represent 
meaningful progress toward creating an intercity passenger rail program 
that makes economic sense and meets the needs of the traveling public.
  It is past time for Congress to come to terms with Amtrak's problems 
and why it is largely a failure. Year after year, for more than 3 
decades, Congress has funded an essentially nationalized passenger 
railroad, that in most areas of the country neither meets a market 
demand nor provides needed public transportation. After 34 years and 
$27 billion in taxpayer subsidies, Amtrak still serves less than 1 
percent of intercity travelers.
  My colleagues and I may not agree on exactly how Amtrak should be 
restructured, but we should agree that what exists today is far from 
ideal. Amtrak loses over $1 billion annually. Its debt stands at almost 
$5 billion, a legacy the taxpayers will bear for years to come. It has 
mortgaged nearly every asset it owns, including a portion of New's 
York's Penn Station, to avoid bankruptcy. It operates routes, many of 
them in the middle of the night, that lose hundreds of dollars per 
passenger. And despite a Federal investment of $3.2 billion for high-
speed service on the Northeast Corridor, the Acela service has been 
plagued by equipment and operating problems. In a report prepared at my 
request, the General Accounting Office recently found that Amtrak 
mismanaged the project, blatantly ignoring the Federal master plan and 
failing to complete 51 of the project's 72 work elements.
  It is past time to end the status quo. If the collective wisdom of 
Congress is to continue to fund intercity passenger rail service, then 
we should do so in a manner that makes economic sense. The legislation 
we are introducing today would restructure the passenger rail program 
in a realistic way and provide responsible funding for existing service 
and new corridor development.
  First, the legislation would make cost-sharing on shorter-distance 
corridor routes more equitable. Today, California, Washington, Oregon, 
and a number of other States play an active role in funding and 
managing passenger service on corridor routes in their States, while 
other States pay nothing. This legislation would require equitable 
cost-sharing for all corridor trains. By the end of the 6-year 
reauthorization period, States would be required to fund 70 percent of 
the operating losses on corridor services, the level of contribution 
already being made by California, the Pacific Northwest, Oklahoma, 
Missouri, and several other States. Furthermore, the Federal share of 
operating subsidies would be payable as grants to the States. Where 
States have taken an active role in managing Amtrak service, there has 
been more accountability, better customer service, and a higher level 
of efficiency.

  Second, the legislation would restructure Amtrak's long distance 
routes. I am not proposing, as many of my colleagues would expect, to 
``whack'' every long distance train. In fact, closure and consolidation 
would be a last resort under my proposal. The ultimate goal would be to 
reduce the annual operating subsidy required for these routes by at 
least 50 percent whether by restructuring the route, reducing operating 
expenses, contracting out service to a private operator, or securing 
State financial support. Amtrak operates 16 long distance trains, 
including the Sunset Limited, a train that runs through Arizona on its 
3-day odyssey from Los Angeles to Orlando and loses over $400 per 
passenger. Reducing the burden of these trains on the taxpayer is one 
of my top priorities.
  This proposal would also establish fair and open competition for 
Amtrak. If, after 34 years of being told by Amtrak that profitability 
is just a few years away or, more recently, that it is on a ``glide-
path'' to self-sufficiency, we are now to conclude that Amtrak will 
always run operating and capital deficits. Our duty to the taxpayers is 
to ensure that service is operated as efficiently as possible to 
minimize subsidies. To achieve this goal, there must be fair and open 
competition for Amtrak from private sector companies and commuter 
authorities.
  Some of my colleagues contend that the private sector would not be 
interested in operating passenger service, noting that Amtrak was 
created because the freight railroads did not wish to continue 
providing what had become unprofitable service with the development of 
air travel and the Interstate Highway System. But times have changed. 
Norfolk Southern recently told transportation officials in Georgia that 
it wants to be considered to run the State's planned commuter service 
between Atlanta and Macon. Herzon, a private company headquarted in 
Missouri, operates commuter services in Texas and California, and has 
been trying to bid against Amtrak to operate the ``Mules'' service 
between St. Louis and Kansas City. Further, 14 private corporations 
expressed interest in operating service following a Commerce Committee 
hearing in which the question of private sector interest was posed.
  Fourth, this legislation would establish a process for corridor 
development modeled after the transit ``new starts'' program. Many 
States have expressed interest in developing new conventional or high-
speed intercity passenger service in highly-traveled corridors. My 
proposal would evaluate new intercity services on a competitive basis 
and require that projects meet planning and design requirements similar 
to those that apply to the well-respected new starts program 
administered by the Federal Transit Administration. As the States 
assume more responsibility for operating subsidies, the amount of 
funding available for corridor development would increase. By year 6 of 
the reauthorization period, $800 million would be authorized for 
corridor development.
  This legislation also addresses ownership, management, and 
maintenance of Northeast Corridor. As recommended by the 
administration, the bill proposes that the Federal Government assume 
ownership of the Northeast Corridor and implement a plan to restore the 
Corridor to a state of good repair. The Northeast Corridor States would 
be encouraged to adopt an interstate compact within 5 years and assume 
responsibility for the Corridor's management. Other States would be 
expected to manage their corridor services, and the Northeast Corridor 
should be no exception. Moreover, over 1,000 of the 1,200 or so trains 
operated daily on the Corridor are commuter trains, not intercity 
services. Until the interstate compact is in place, Amtrak would 
continue to operate and maintain the Corridor.

  Finally, the legislation institutes reforms at Amtrak. Amtrak would 
be required to perform its services under

[[Page S4031]]

contract with the Federal Government or States, and would be required 
to develop a more accurate and transparent cost accounting system. As 
recommended by the DOT Inspector General, an effort would be made to 
restructure Amtrak's debt to reduce the cost to the taxpayers.
  We encourage our colleagues to support this legislation. Reforming 
Amtrak and the way our intercity passenger rail program is now 
organized must be accomplished before Congress considers expanding 
intercity service. Simply throwing billions more at Amtrak as some of 
my colleagues propose--whether through appropriations, bonds, or some 
other funding scheme--will not solve the fundamental problems. We can 
and must do better.
  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. 2306

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rail Passenger Service 
     Restructuring, Reauthorization, and Development Act''.

     SEC. 2. TABLE OF CONTENTS; AMENDMENT OF TITLE 49, UNITED 
                   STATES CODE.

       (a) Table of Contents.--The table of contents for this Act 
     is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents; amendment of title 49, United States Code.

            Title I--Network Restructuring and Cost-sharing

                       Subtitle A--Restructuring

Sec. 101. Findings, purpose, and goals.
Sec. 102. Passenger rail service restructuring.
Sec. 103. Definitions.
Sec. 104. Operating grants for corridor routes.
Sec. 105. Operating grants for long distance routes
Sec. 106. Long distance route restructuring commission.
Sec. 107. Criteria for restructuring.
Sec. 108. Implementation of restructuring plan.
Sec. 109. Redemption of common stock.
Sec. 110. Retirement of preferred stock; transfer of assets.
Sec. 111. Real estate and asset sales; other.

                     Subtitle B--Northeast Corridor

Sec. 131. Interstate compact for the Northeast Corridor.
Sec. 132. Shut-down of commuter or freight operations.
Sec. 133. Capital grants for the Northeast Corridor.

                      Subtitle C--Related Matters

Sec. 151. Fair and open competition.
Sec. 152. Access to other railroads.
Sec. 153. Limitations on rail passenger transportation liability.
Sec. 154. Train operations insurance pool.
Sec. 155. Collective bargaining arrangements.

                       Title II--Rail Development

Sec. 201. Capital assistance for intercity passenger rail service.
Sec. 202. Regulations

                           Title III--Reforms

Sec. 301. Management of secured debt.
Sec. 302. Employee transition assistance.
Sec. 303. Termination of authority for GSA to provide services to 
              Amtrak.
Sec. 304. Amtrak reform board of directors.
Sec. 305. Limitations on availability of grants.
Sec. 306. Repeal of obsolete and executed provisions of law.
Sec. 307. Establishment of financial accounting system.
Sec. 308. Restructuring of long-term debt and capital leases.
Sec. 309. Authorization of appropriations.
       (b) Amendment of Title 49.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or a repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of title 49, 
     United States Code.

            TITLE I--NETWORK RESTRUCTURING AND COST-SHARING

                       Subtitle A--Restructuring

     SEC. 101. FINDINGS, PURPOSE, AND GOALS.

       Section 24101 is amended to read as follows:

     ``Sec. 24101. Findings, purpose, and goals

       ``(a) Findings.--
       ``(1) It is in the public interest of the United States to 
     encourage and promote the development of various modes of 
     transportation and transportation infrastructure to 
     efficiently maximize the mobility of passengers and goods.
       ``(2) Despite Federal subsidies of nearly $27 billion over 
     the past 34 years, intercity rail passenger service still 
     accounts for less than 1 percent of all intercity travel.
       ``(3) Intercity rail passenger service can be competitive 
     with other modes of transportation and achieve a significant 
     share of the travel market in short-distance corridors 
     connecting metropolitan areas.
       ``(4) Rail passenger transportation can help alleviate 
     overcrowding of airways and airports, and can provide needed 
     intermodal connections to airports, bus terminals, and mass 
     transit services.
       ``(5) Corridor routes account for approximately 85 percent 
     of Amtrak's ridership but only one-third of Amtrak's 
     operating losses, excluding depreciation.
       ``(6) A number of Amtrak's long-distance routes may be more 
     efficiently operated and attract higher ridership as 
     connected corridors.
       ``(7) Long-distance routes that cannot be restructured as 
     connected corridors, do not receive State financial support, 
     cannot be operated on a for-profit basis, or are not an 
     essential link to the rest of the intercity passenger rail 
     network, should be consolidated or discontinued.
       ``(8) Some States with corridor services provide 
     significant financial support for such services, while other 
     States with routes and all States with long-distance routes 
     contribute nothing for such services. More equitable cost-
     sharing is needed to justify Federal investment in intercity 
     rail passenger service.
       ``(9) The need to invest taxpayer dollars in intercity rail 
     passenger service demands that fair and open competition be 
     permitted for the provision of such services to ensure that 
     service is provided in the most efficient manner without 
     jeopardizing the safety of such operations.
       ``(10) A greater degree of cooperation is necessary among 
     intercity passenger service operators, freight railroads, 
     State, regional, and local governments, the private sector, 
     labor organizations, and suppliers of services and equipment 
     to achieve the performance sufficient to justify the 
     expenditure of additional public money on intercity rail 
     passenger service.
       ``(11) Transportation services provided by the private 
     freight railroads are vital to the economy and national 
     defense and should not be disadvantaged by the operation of 
     intercity passenger rail service over their rights-of-way.
       ``(12) The Northeast Corridor is a valuable resource of the 
     United States used by intercity and commuter rail passenger 
     transportation and freight transportation and should be 
     restored to a state of good repair.
       ``(b) Purpose.--The purpose of this part is to assist in 
     the preservation and development of conventional and high-
     speed intercity rail passenger services where such services 
     can play an important role in facilitating passenger mobility 
     in the United States.
       ``(c) Goals.--The goals of this part are--
       ``(1) to move toward a national network of interconnected 
     short-distance passenger rail corridor services;
       ``(2) to return the Northeast Corridor to a state of good 
     repair;
       ``(3) to establish a framework for the development of new 
     conventional and high-speed rail services;
       ``(4) to allow for train services to be operated under 
     contract to a State or group of States, with the operator of 
     the service selected by the State or group of States;
       ``(5) to establish equitable cost-sharing for capital 
     expenses and operating losses with the States; and
       ``(6) to encourage greater participation in the provision 
     of intercity rail passenger services by the private 
     sector.''.

     SEC. 102. PASSENGER RAIL SERVICE RESTRUCTURING.

       (a) In General.--Chapter 243 is amended by inserting before 
     section 24301 the following:

     ``Sec. 24300. Restructuring mandate

       ``(a) In General.--Within 6 months after the date of 
     enactment of the Rail Passenger Service Restructuring, 
     Reauthorization, and Development Act, the Amtrak Reform Board 
     shall restructure Amtrak as 2 independent entities, as 
     follows:
       ``(1) The national railroad passenger corporation.--One 
     entity shall be the National Railroad Passenger Corporation, 
     otherwise known as Amtrak, that shall provide overall 
     supervision of the restructuring of the intercity passenger 
     rail program.
       ``(2) The american passenger railway corporation.--The 
     other entity shall be a for profit corporation, to be known 
     as the American Passenger Railway Corporation, that shall be 
     responsible for conducting the passenger operations, 
     infrastructure maintenance, and related services, including 
     operation of reservation centers and ownership and 
     maintenance of rolling stock.
       ``(b) Articles of Incorporation and Other Documentation.--
     Within 6 months after the date of enactment of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act, the Amtrak Reform Board shall--
       ``(1) file appropriate articles of incorporation under 
     State law for the American Passenger Railway Corporation; and
       ``(2) amend the articles of incorporation and bylaws of the 
     National Railroad Passenger Corporation to reflect its 
     changed functions and responsibilities.
       ``(c) Roles and Responsibilities of the American Passenger 
     Railway Corporation.--
       ``(1) Railroad activities.--Consistent with the business 
     corporation law of the State of incorporation of the American 
     Passenger Railway Corporation, the Corporation shall be 
     qualified to undertake railroad activities of an operational 
     or infrastructure nature.

[[Page S4032]]

       ``(2) Rail operations and related functions.--The American 
     Passenger Railway Corporation--
       ``(A) shall have the exclusive right, until October 1, 
     2005, to continue to provide the intercity passenger services 
     provided by Amtrak on the date of enactment of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act;
       ``(B) shall, beginning October 1, 2005, operate intercity 
     passenger service only on a contractual basis under 
     negotiated terms and conditions;
       ``(C) shall operate a national reservations system; and
       ``(D) subject to fulfillment of its contractual 
     obligations, shall have the exclusive right, until management 
     of the mainline of the Northeast Corridor between Boston, 
     Massachusetts, and Washington, District of Columbia, is 
     transferred to the interstate compact created under section 
     131 or to another entity, to provide the train operations, 
     dispatching, maintenance, and infrastructure services that 
     are being provided by Amtrak on the date of enactment of the 
     Rail Passenger Service Restructuring, Reauthorization, and 
     Development Act, but may provide such services beginning 
     October 1, 2005, only on a contractual basis with the 
     National Railroad Passenger Corporation under negotiated 
     terms and conditions.
       ``(3) Status of corporation.--
       ``(A) The American Passenger Railway Corporation--
       ``(i) is a railroad carrier under section 20102(2) and 
     chapters 261 and 281 of this title;
       ``(ii) shall be operated and managed as a for-profit 
     corporation; and
       ``(iii) is not a department, agency, or instrumentality of 
     the United States Government nor a Government corporation (as 
     defined in section 103 of title 5).
       ``(B) Chapter 105 of this title does not apply to the 
     American Passenger Railway Corporation, except that 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 
     apply to the American Passenger Railway Corporation to the 
     same extent as they applied to Amtrak before the 
     restructuring required by this section.
       ``(C) Subsections (c), (d), and (f) through (l) of section 
     24301 of this title shall apply to the Corporation.
       ``(4) Chief executive officer.--Subject to further action 
     by the board of directors of the American Passenger Railway 
     Corporation, the individual who, on the date of enactment of 
     the Rail Passenger Service Restructuring, Reauthorization, 
     and Development Act, is President of Amtrak shall be offered 
     the position of chief executive officer of the American 
     Passenger Railway Corporation as soon as practicable after 
     the corporation is established.
       ``(5) Issuance of stock and assumption of debt.--The 
     Corporation may not issue stock or incur debt without the 
     express approval of the Secretary of Transportation.

     ``Sec. 24300A. American Passenger Railway Corporation board 
       of directors

       ``(a) In General.--
       ``(1) Membership.--The American Passenger Railway 
     Corporation shall be governed by a board of directors 
     consisting of 7 members appointed by the President, by and 
     with the advice and consent of the Senate.
       ``(2) Qualifications.--
       ``(A) In general.--Members of the board shall be chosen 
     from among individuals who have technical qualifications, 
     professional standing, and demonstrated expertise in the 
     field of transportation, corporate management, or financial 
     management.
       ``(B) Federal employees disqualified.--No individual who is 
     an officer or employee of the United States may serve as a 
     member of the board.
       ``(3) Term of office.--Each member shall serve for a term 
     of 5 years. An individual may not serve for more than 2 
     terms.
       ``(4) Quorum.--A majority of the board members who have 
     been lawfully appointed and qualified at any moment shall 
     constitute a quorum for the conduct of business.
       ``(b) Bylaws.--The board of directors shall adopt bylaws 
     governing the corporation consistent with the provisions of 
     this section and its articles of incorporation, and may 
     amend, repeal, and otherwise modify the bylaws from time to 
     time as necessary or appropriate.
       ``(c) Transition Board Members.--Individuals who are 
     serving as members of the Amtrak Reform Board on the day 
     before the date on which the American Passenger Railway 
     Corporation is established, with the exception of the 
     Secretary of Transportation, shall serve as members of the 
     board of directors of the American Passenger Railway 
     Corporation until 4 members of that board have been appointed 
     and qualified.

     ``Sec. 24300B. National Railroad Passenger Corporation board 
       after restructuring

       ``(a) In General.--After the American Passenger Railway 
     Corporation is established, the Reform Board established 
     under section 24302(a) shall be dissolved, and the National 
     Railroad Passenger Corporation shall be governed by a board 
     of directors consisting of--
       ``(1) the Secretary of Transportation;
       ``(2) 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
       ``(3) 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.
       ``(b) Roles and Responsibilities.--
       ``(1) Supervision and management.--After the board of 
     directors described in subsection (a) takes office, the 
     National Railroad Passenger Corporation shall--
       ``(A) provide overall supervision of the restructuring of 
     the intercity passenger rail program;
       ``(B) manage residual Amtrak responsibilities; and
       ``(C) retain and manage Amtrak's legal rights, including 
     its legal right of access to other railroads, and ownership 
     of Amtrak's real property, until that property is transferred 
     to the Secretary of Transportation under section 110 of the 
     Rail Passenger Service Restructuring, Reauthorization, and 
     Development Act.
       ``(2) Contracts for service.--The National Railroad 
     Passenger Corporation shall, by contract, permit an operator 
     to provide intercity passenger rail service over any route 
     operated by Amtrak on the date prior to the date the 
     restructuring required by section 24300 becomes effective, at 
     the frequencies in effect on that date, on its behalf and to 
     use its right of access to any segment of rail line owned by 
     another rail carrier needed for the operation of that train. 
     The operator may be the American Passenger Railway 
     Corporation or another operator, but there shall be no more 
     than 1 intercity passenger rail operator at a time over any 
     segment of rail line owned by another rail carrier, except in 
     terminal areas as determined by the Secretary or as may 
     otherwise be provided by agreement among the National 
     Railroad Passenger Corporation, the operators, and the owner 
     of the rail line.
       ``(3) Use of amtrak name.--
       ``(A) In general.--The National Railroad Passenger 
     Corporation 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.
       ``(B) Use by american passenger railway corporation.--
     Amtrak shall by contract, permit the American Passenger 
     Railway Corporation to market its services under the Amtrak 
     name.
       ``(4) Amtrak personnel.--All Amtrak employees shall become 
     American Passenger Railway Corporation employees unless 
     retained by the National Railroad Passenger Corporation. The 
     American Passenger Railway Corporation shall succeed to the 
     collective bargaining agreements in effect between Amtrak and 
     labor organizations that are in effect on the day before the 
     date on which that Corporation is established. An employee 
     who elects employment with National Railroad Passenger 
     Corporation shall become an employee of that Corporation, 
     with only such rights regarding pay and benefits as that 
     Corporation shall determine.
       ``(5) Freight and commuter operations.--The National 
     Railroad Passenger Corporation shall ensure that the 
     implementation of the restructuring required by section 24300 
     gives due consideration to the needs of freight and commuter 
     operations that, as of the date of enactment of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act, operate on the Northeast Corridor using 
     Amtrak rights-of-way.
       ``(6) Rolling stock.--The National Railroad Passenger 
     Corporation shall set the terms under which the American 
     Passenger Railway Corporation must make available to any 
     replacement operator the legacy equipment associated with any 
     intercity passenger rail service provided as of the date of 
     the restructuring required by section 24300.''.
       (b) Spinning-off of Reservations System.--Not later than 2 
     years after the date of enactment of the Rail Passenger 
     Service Restructuring, Reauthorization, and Development Act, 
     the Inspector General of the Department of Transportation 
     shall submit to the Secretary of Transportation, the Senate 
     Committee on Commerce, Science, and Transportation, and the 
     House of Representatives Committee on Transportation and 
     Infrastructure recommendations on the feasibility, 
     advantages, and disadvantages of spinning off the national 
     reservations system as a private for-profit entity.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     243 is amended by inserting the following after the item 
     relating to section 24309:

  ``24300. Restructuring mandate
  ``24300A. American Passenger Railway Corporation board of directors
  ``24300B. Amtrak board after restructuring''.

     SEC. 103. DEFINITIONS.

       Section 24102 is amended--
       (1) by striking paragraph (2) and redesignating paragraphs 
     (3) through (9) as paragraphs (2) through (8), respectively;
       (2) by redesignating paragraphs (3) through (8), as 
     redesignated, as paragraphs (4) through (9), respectively, 
     and inserting after paragraph (2) the following:
       ``(3) `corridor route' means--
       ``(A) a train route operated by Amtrak with a route length 
     of 750 miles or less as of January 1, 2004; or
       ``(B) a new conventional or high-speed route eligible for 
     funding under chapter 244 of this title.'';
       (3) by redesignating paragraphs (6) through (9), as 
     redesignated, as paragraphs (8)

[[Page S4033]]

     through (11), respectively, and inserting after paragraph (5) 
     the following:
       ``(6) `long distance route' means a train route operated by 
     Amtrak with a route length greater than 750 miles as of 
     January 1, 2004.
       ``(7) `legacy equipment' means the rolling stock required 
     to provide intercity passenger rail service owned or leased 
     by Amtrak on the day prior to the date on which the 
     restructuring required by section 24300 is completed (as such 
     date is determined by the Secretary).''.

     SEC. 104. OPERATING GRANTS FOR CORRIDOR ROUTES.

       (a) In General.--Chapter 243 is amended by adding at the 
     end the following:

     ``Sec. 24316. Operating grants for corridor routes

       ``(a) In General.--
       ``(1) Operating grant authority.--Beginning on October 1, 
     2005, the Secretary of Transportation may make grants to 
     States for operating assistance under the authority of this 
     section, and not under any other provision of law, to 
     reimburse operators of the corridor routes operated by Amtrak 
     on the day before the date on which the restructuring 
     required by section 24300 is completed (as determined by the 
     Secretary) for a portion of the operating subsidies required 
     to operate those routes with the same train frequencies.
       ``(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.
       ``(b) Federal Share of Operating Losses.--
       ``(1) Reimbursable amount.--A grant to a State under this 
     section for any fiscal year may not exceed an amount equal to 
     the lower of--
       ``(A) the applicable percentage of the Federal operating 
     subsidy for that fiscal year; or
       ``(B) the percentage of the operating subsidy for a route 
     not borne by a State during the last fiscal year ending 
     before the date of enactment of the Rail Passenger Service 
     Restructuring, Reauthorization, and Development Act.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage of the operating subsidy for a 
     fiscal year is--
       ``(A) 70 percent for fiscal year 2006;
       ``(B) 60 percent for fiscal year 2007;
       ``(C) 50 percent for fiscal year 2008;
       ``(D) 40 percent for fiscal year 2009; and
       ``(E) 30 percent for fiscal year 2010.
       ``(c) Determination of Expenses Eligible for 
     Reimbursement.--
       ``(1) Annual determination of subsidy.--On an annual basis, 
     the Inspector General for the Department of Transportation 
     shall analyze and advise the Secretary of Transportation as 
     to the operating subsidy required on each corridor route 
     operated by the American Passenger Railway Corporation under 
     contract with a State without competitive bid. The operating 
     loss on such routes shall--
       ``(A) reflect the fully allocated costs of operating the 
     route, including an appropriate share of overhead expenses, 
     including general and administrative expenses; and
       ``(B) exclude depreciation and interest expense on long-
     term debt.
       ``(2) Aggregation of northeast corridor profits and 
     losses.--Operating profits and losses on corridor routes 
     operated exclusively on the mainline of the Northeast 
     Corridor extending from Washington, D.C. to Boston, MA may be 
     aggregated for purposes of determining the operating subsidy 
     required on the routes.
       ``(3) Determination with competitive bidding.--Expenses 
     eligible for Federal support pursuant to paragraph (b)(2) for 
     reimbursement for a corridor route that has been 
     competitively bid shall consist of the operating subsidy 
     agreed upon by the State, group of States, or other entity 
     and the operator.
       ``(d) Exception to Date Cost-sharing Required.--For any 
     State whose legislature has not convened in regular session 
     after the date of enactment of the Rail Passenger Service 
     Restructuring, Reauthorization, and Development Act and 
     before October 1, 2005, the additional cost-sharing 
     requirements of this section shall become effective on 
     October 1, 2006.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     this section--
       ``(1) $125,000,000 for fiscal year 2006;
       ``(2) $100,000,000 for fiscal year 2007;
       ``(3) $90,000,000 for fiscal year 2008;
       ``(4) $75,000,000 for fiscal year 2009; and
       ``(5) $50,000,000 for fiscal year 2010.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     243 is amended by adding at the end the following:

``24316. Operating grants for corridor routes''.

     SEC. 105. OPERATING GRANTS FOR LONG DISTANCE ROUTES

       (a) In General.--Chapter 243, as amended by section 104, is 
     amended by adding at the end the following:

     ``Sec. 24317. Operating grants for long distance routes

       ``(a) In General.--
       ``(1) Operating grant authority.--Beginning on October 1, 
     2005, the Secretary of Transportation may make grants to the 
     American Passenger Railway Corporation or to a State 
     providing financial support for a long distance route for 
     operating assistance under the authority of this section, and 
     not under any other provision of law, to reimburse operators 
     of the long distance routes operated by Amtrak on the day 
     before the date on which the restructuring required by 
     section 24300 is completed (as determined by the Secretary) 
     for a portion of the operating subsidies required to operate 
     those routes with the same train frequencies.
       ``(2) Conditions.--
       ``(A) 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.
       ``(B) The Secretary shall require the American Passenger 
     Railway Corporation, as a condition of a grant under this 
     section, to systematically reduce its route and system-wide 
     overhead expenses by a minimum of 5 percent annually through 
     fiscal year 2010. A contract between the National Railroad 
     Passenger Corporation and the American Passenger Railway 
     Corporation for the operation of a long distance route or 
     routes must provide for a reduction in the annual operating 
     subsidy to reflect the reduction in such expenses.
       ``(3) Annual determination of subsidy.--On an annual basis, 
     the Inspector General for the Department of Transportation 
     shall analyze and advise the Secretary of Transportation as 
     to the operating subsidy required on each long distance route 
     operated by the American Passenger Railway Corporation 
     without competitive bid and the portion of the subsidy 
     attributable to route and system-wide overhead expenses.
       ``(b) Federal Share of Operating Losses.--Pending 
     restructuring of the long distance routes required by 
     sections 106 through 108 of the Rail Passenger Service 
     Restructuring, Reauthorization, and Development Act, the 
     Federal share for an operating grant may be 100 percent of 
     the qualifying operating subsidy for the route.
       ``(c) Cost-sharing Process for Long Distance Routes.--
     Within 9 months after the date of enactment of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act, the Secretary shall develop a process to 
     facilitate State cost-sharing on long distance routes. The 
     process shall--
       ``(1) provide States the option of either--
       ``(A) receiving Federal grants, managing the service, and 
     selecting the train operator; or
       ``(B) having the service managed by the Federal government 
     with a train operator selected by the National Rail Passenger 
     Corporation;
       ``(2) include a methodology to assist States interested in 
     providing financial support in equitably allocating the share 
     of a route's required operating subsidy among the affected 
     States; and
       ``(3) be made available to the Long Distance Restructuring 
     Commission established under section 106 of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act and the States to assist in the development 
     of the restructuring plan under that section.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of 
     Transportation to carry out this section--
       ``(1) $550,000,000 for fiscal year 2006;
       ``(2) $425,000,000 for fiscal year 2007;
       ``(3) $375,000,000 for fiscal year 2008;
       ``(4) $325,000,000 for fiscal year 2009; and
       ``(5) $300,000,000 for fiscal year 2010.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     243, as amended by section 104 of this Act, is amended by 
     adding at the end the following:

``24317. Operating grants for long distance routes

     SEC. 106. LONG DISTANCE ROUTE RESTRUCTURING COMMISSION.

       (a) Establishment.--There is established an independent 
     commission to be known as the Long Distance Route 
     Restructuring Commission.
       (b) Duty.--
       (1) In general.--The Commission shall submit a plan to 
     Congress for restructuring long distance intercity passenger 
     rail routes in a manner that will reduce Federal operating 
     subsidies on the routes by at least 50 percent by the end of 
     fiscal year 2010 (as compared to the operating subsidies for 
     those routes for fiscal year 2003) by--
       (A) retaining routes that provide a unique service that can 
     be contracted out by the National Railroad Passenger 
     Corporation on a for-profit basis;
       (B) restructuring other routes as linked corridor routes 
     between major metropolitan areas; and
       (C) consolidating or discontinuing service over remaining 
     routes.
       (2) Preservation of national network.--The restructuring 
     plan submitted by the Commission shall ensure that no 
     corridor route is completely isolated from the rest of the 
     intercity passenger rail network.
       (3) Exceptions.--
       (A) In general.--A route will be excluded from 
     consideration for restructuring, consolidation, or closure if 
     a State or group of States commits, by contractual 
     arrangement with the American Passenger Railway Corporation 
     or another operator selected through a competitive process, 
     to provide financial operating support at a level sufficient 
     to offset at least
       (i) 30 percent of the operating subsidy for fiscal year 
     2007;

[[Page S4034]]

       (ii) 40 percent of the operating subsidy for fiscal year 
     2008; and
       (iii) 50 percent of the operating subsidy thereafter.
       (B) Failure of support.--If a State or group of States 
     fails to provide the financial support to which it committed 
     under this paragraph, then service over the route shall be 
     discontinued.
       (4) Consultation required.--In carrying out its duties, the 
     Commission shall consult with the American Passenger Railway 
     Corporation, State and local officials, freight railroads, 
     companies with expertise in intercity passenger 
     transportation, and other organizations with an interest in 
     the restructuring of the long distance train routes.
       (c) Appointment.--
       (1) The Commission shall be composed of 7 members appointed 
     by the President within 6 months after the date of enactment 
     of this Act.
       (2) The Commission members shall elect 1 member to serve as 
     Chairman.
       (d) Termination.--The Commission shall terminate 90 days 
     after the Commission's recommendations for consolidation and 
     closure are submitted to Congress.
       (e) Vacancies.--A vacancy on the Commission shall be filled 
     in the same manner as the original appointment.
       (f) Detailees.--Upon the request of the Chairman of the 
     Commission, the head of any Federal department or agency may 
     detail personnel of that department or agency to the 
     Commission to assist the Commission in carrying out its 
     duties.
       (g) Compensation; reimbursement.--Members of the Commission 
     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.
       (h) Other Authority.--
       (1) The Commission may procure by contract, to the extent 
     funds are available, the temporary or intermittent services 
     of experts or consultants pursuant to section 3109 of title 
     5, United States Code.
       (2) The Commission may lease space and acquire personal 
     property to the extent funds are available.
       (i) Authorization of Appropriations.--There are authorized 
     to be appropriated for the use of the Commission in carrying 
     out its responsibilities under this section for each of 
     fiscal years 2005 and 2006, $4,000,000, such sums to remain 
     available until expended.

     SEC. 107. CRITERIA FOR RESTRUCTURING.

       (a) Restructuring as Linked Corridors.--
       (1) Prerequisite for restructuring.--A long distance route 
     or portion thereof may be recommended for restructuring as a 
     linked corridor if--
       (A) the origin-to-destination travel time of each corridor 
     link in the new route, at conventional train speeds, 
     including all station stops, will be competitive with other 
     modes of transportation;
       (B) each corridor link in the new route connects at least 2 
     major metropolitan areas or provides a link between 2 or more 
     existing corridor routes;
       (C) the route as restructured can be reasonably expected to 
     attract at least 10 percent of the combined common carrier 
     market in the markets served;
       (D) the projected cash operating loss of each of the 
     restructured links does not exceed 11 cents per passenger-
     mile on a fully allocated cost basis; and
       (E) by the end of fiscal year 2010 the Federal operating 
     subsidy will be reduced by at least 50 percent (as compared 
     to the operating subsidy for the route for fiscal year 2003), 
     taking into account commitments by the affected States to 
     provide financial support for the route so that no Federal 
     operating subsidy is available for any portion of a route for 
     which there is no such State commitment.
       (2) Hours of operation.--In addition to the eligibility 
     criteria in paragraph (1), any long distance routes 
     recommended for restructuring as linked corridors shall be 
     designed to operate between the hours of 6:00 a.m. and 11:00 
     p.m.
       (3) Modification of routes.--With the concurrence of the 
     affected States and the host railroad, the route and stations 
     service by a restructured long distance route may be modified 
     to improve ridership and financial performance.
       (4) New capital plans.--As part of the restructuring plan 
     for reconfigured routes, the Commission shall develop a 
     capital plan, if additional capital is needed to reconfigure 
     the route as linked corridors.
       (b) Contracting-Out of Profitable Long Distance Routes and 
     Services.--The Commission shall determine which long distance 
     routes or services on such routes, including auto-ferry 
     transportation, food service, and sleeping accommodations, 
     could be contracted to a private operator on a for-profit 
     basis. In making these determinations, the Commission shall 
     solicit expressions of interest from the private sector in 
     operating long distance routes or services, including the 
     conditions under which private companies may be interested in 
     operating such services.
       (c) Consolidation and Closure.--The Commission shall make 
     recommendations to Congress for consolidating and closing 
     long distance train routes or portions of routes that cannot 
     be restructured under subsection (a) or contracted out under 
     subsection (b), to reduce the Federal operating subsidy 
     required by at least 50 percent by the end of fiscal year 
     2010 (as compared to the operating subsidies for those routes 
     for fiscal year 2003), taking into consideration--
       (1) the operating loss on a fully allocated cost basis, 
     including capital costs, of the route or portion thereof;
       (2) the extent to which train service is the only available 
     public transportation to the cities and towns along the route 
     or portion thereof;
       (3) whether an alternate route could significantly reduce 
     operating losses and capital requirements or increase 
     ridership;
       (4) available capacity on the rights-of-way of the host 
     railroad or railroads; and
       (5) commitments by the affected States to provide financial 
     support for the route or portion thereof.
       (d) Cooperation of American Passenger Railway 
     Corporation.--
       (1) The American Passenger Railway Corporation shall 
     cooperate and comply, subject to the agreement of the 
     Commission to protect the confidentiality of proprietary 
     information, with all requests for financial, marketing, and 
     other information about the routes under consideration by the 
     Commission.
       (2) The Secretary of Transportation may withhold all or 
     part of an operating or capital grant to the Corporation if 
     the Secretary determines the American Passenger Railway 
     Corporation is not cooperating with the Commission as 
     required by this subsection.
       (e) Report.--The Commission shall submit its 
     recommendations for restructuring the long distance routes to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure within 18 months after the date of 
     enactment of this Act. The report shall include a description 
     of--
       (1) the analysis performed by the Commission to reach its 
     conclusions;
       (2) options considered in the development of a 
     restructuring plan; and
       (3) the impact of the restructuring on employees of the 
     American Passenger Railway Corporation for any long distance 
     route restructured under this section.

     SEC. 108. IMPLEMENTATION OF RESTRUCTURING PLAN.

       (a) In General.--The Secretary of Transportation shall 
     implement the restructuring plan submitted to Congress by the 
     Long Distance Route Restructuring Commission in its report 
     pursuant to section 106 unless a joint resolution is enacted 
     by the Congress disapproving such recommendations of the 
     Commission before the earlier of--
       (1) the end of the 60-day period beginning on the date the 
     Commission submits its report to Congress; or
       (2) the adjournment of Congress sine die for the session 
     during which such report is submitted.
       (b) Certain Days Disregarded.--For purposes of subsection 
     (a), the days on which either House of Congress is not in 
     session because of an adjournment of more than 4 days to a 
     day certain shall be excluded in the computation of a period.
       (c) 1-year Implementation Period.--Unless disapproved under 
     section (a), the Secretary of Transportation shall fully 
     implement the plan within 1 year after the date on which the 
     period described in subsection (a) expires.

     SEC. 109. 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 Amtrak assets and liabilities 
     with an estimated value in excess of $1,000,000 as of the 
     date of enactment of this Act 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 
     the Uniform Standards of Professional Appraisal Practice of 
     the Appraisal Foundation's Appraisal Standards Board and 
     shall be completed within 1 year after the date of enactment 
     of this Act.
       (b) Redemption.--
       (1) Prior to the transfer of assets to the Secretary 
     directed by section 110 of this Act, and within 3 months 
     after the completion of the valuation under subsection (a), 
     the National Railroad Passenger Corporation shall redeem all 
     common stock in Amtrak issued prior to the date of enactment 
     of this Act at the fair market 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 Amtrak.
       (c) Acquisition through Eminent Domain.--In the event that 
     the National Railroad Passenger Corporation and the owners of 
     the Amtrak common stock have not completed the redemption of 
     such stock within 3 months after the completion of the 
     valuation under subsection (a), the National Railroad 
     Passenger Corporation shall exercise its right of eminent 
     domain under section 24311 of title 49, United States Code, 
     to acquire that stock. The value assigned to the common stock 
     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) is 
     amended--
       (1) by striking ``or'' at the end of subparagraph (A);

[[Page S4035]]

       (2) by striking ``Amtrak.'' in subparagraph (B) and 
     inserting ``Amtrak; or''; and
       (3) by adding at the end the following:
       ``(C) necessary to redeem Amtrak'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 110 of this Act for 10 shares of common stock 
     in the National Railroad Passenger Corporation.
       (2) The National Railroad Passenger Corporation may not 
     issue any other common stock, and may not issued preferred 
     stock, without the express written consent of the Secretary.
       (f) Termination of Section 24907 Note and Mortgage 
     Authority.--Section 24907 is amended by adding at the end the 
     following:
       ``(d) Termination of Authority.--The authority of the 
     Secretary to obtain a note of indebtedness from, and make a 
     mortgage agreement with, the American Passenger Railway 
     Corporation under subsection (a) is terminated as of the date 
     of the transfer of assets under section 110 of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act.''.

     SEC. 110. RETIREMENT OF PREFERRED STOCK; TRANSFER OF ASSETS.

       (a) Transfer.--Not later than 30 days after the redemption 
     or acquisition of stock under section 109 of this Act, the 
     National Railroad Passenger Corporation shall, in return for 
     the consideration specified in subsection (c), transfer to 
     the Secretary of Transportation title to--
       (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, repair facilities, and all other 
     improvements owned by the Corporation 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; and
       (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) Assumption by Federal Government.--Any outstanding debt 
     on the mainline of the Northeast Corridor (other than debt 
     associated with rolling stock) shall become a debt obligation 
     of the United States as of the date of transfer of title 
     under subsection (a)(1).
       (2) Restructuring.--Except as provided in paragraph (1), 
     the obligation of the American Passenger Railway Corporation 
     or its successors or assigns to repay in full any 
     indebtedness to the United States incurred since January, 
     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 (a), the 
     Secretary shall--
       (1) deliver to the National Passenger Railroad Corporation 
     all but one 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 National Railroad Passenger 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 a contract with American Passenger Railway Corporation 
     under which American Passenger Railway Corporation will 
     exercise care, custody, maintenance, and operational control 
     of the assets to be transferred. The term of the contract 
     shall be for 1 year, which shall be renewed annually without 
     action on the part of either party unless canceled by either 
     party with 90 days notice.
       (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.
       (f) Use of Proceeds.--Notwithstanding section 3302 of title 
     31, United States Code, any proceeds from the transfer of the 
     assets described subsection (e) shall be credited as off-
     setting collections to the account that finances debt and 
     interest payments to the American Passenger Railway 
     Corporation. Funds available for corridor development under 
     chapter 244 of title 49, United States Code, shall be 
     increased by an amount equal to the amounts credited under 
     the preceding sentence.

     SEC. 111. REAL ESTATE AND ASSET SALES; OTHER.

       (a) In General.--Within 3 years after the date of enactment 
     of this Act, the Secretary of Transportation shall transfer 
     all stations, track, and other fixed facilities outside the 
     Northeast Corridor mainline to which the Secretary has 
     assumed title under section 110 of this Act, other than 
     equipment repair facilities, to States, municipalities, 
     railroads, or other entities for maximum consideration.
       (b) Use of Proceeds.--Notwithstanding section 3302 of title 
     31, United States Code, any proceeds from the transfer of 
     assets under this section shall be credited as off-setting 
     collections to the account that finances debt and interest 
     payments to the American Passenger Railway Corporation. Funds 
     available for corridor development under chapter 244 of title 
     49, United States Code, shall be increased by an amount equal 
     to the amounts credited under the preceding sentence.

                     Subtitle B--Northeast Corridor

     SEC. 131. INTERSTATE COMPACT FOR THE NORTHEAST CORRIDOR.

       (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 manage railroad operations and rail service and conduct 
     related activities on the Northeast Corridor mainline between 
     Boston, Massachusetts, and Washington, District of Columbia.
       (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.--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--
       (1) full authority for 99 years to succeed to the 
     responsibilities of the National Railroad Passenger 
     Corporation as manager of the Northeast Corridor, subject to 
     the provisions of a lease from the Department of 
     Transportation, including responsibility for--
       (A) Corridor maintenance and improvement;
       (B) the operation of intercity passenger rail service;
       (C) making arrangements for operation of freight railroad 
     operations and commuter operations;
       (D) the use of the Corridor for non-rail purposes; and
       (E) the Northeast Corridor financial operations;
       (2) 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; and

[[Page S4036]]

       (C) participation by the Department of Transportation, as 
     the non-voting representative of the United States.
       (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 18 months after the date of 
     enactment of this Act.
       (2) The Commission shall terminate on the 180th day 
     following the date of transmittal of the final compact 
     proposal under this subsection.
       (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 
     and a freight railroad that conducts operations on the 
     Northeast Corridor as ex officio members participating in all 
     Compact affairs.
       (2) The provisions of the compact shall establish the 
     financial obligations of each compact member and shall 
     provide for each member's management of rail services in the 
     Northeast Corridor.
       (f) 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.
       (g) 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.
       (h) Adoption of Compact; Turnover.--
       (1) In general.--The participating States and the District 
     of Columbia shall adopt a final compact agreement within 5 
     years after the date of enactment of this Act, and the 
     Compact shall thereafter assume responsibility for the 
     Northeast Corridor operations on a date that is not later 
     than 6 months after adoption of the Compact.
       (2) Operations.--Upon leasing the Northeast Corridor to the 
     Compact, the Secretary shall assign to the Compact and the 
     Compact shall assume the then-current contract for operation 
     of the Northeast Corridor. Upon the termination of that 
     contract, the Compact may make such arrangements for 
     operation of the Northeast Corridor as it sees fit consistent 
     with its lease and this Act. If the Compact chooses to use a 
     contractor other than the American Passenger Railway 
     Corporation to operate trains on the Northeast Corridor, the 
     contract shall be awarded competitively.
       (3) Maintenance.--Upon leasing the Northeast Corridor to 
     the Compact, the Secretary shall assign to the Compact and 
     the Compact shall assume the then-current contract for 
     maintenance of the Northeast Corridor. Upon the termination 
     of that contract, the Compact may make such arrangements for 
     maintenance of the Northeast Corridor as it sees fit 
     consistent with its lease and this Act. If the Compact 
     chooses to use a contractor other than the American Passenger 
     Railway Corporation to maintain the Northeast Corridor and 
     provide related services, the contract shall be awarded 
     competitively.
       (4) Non-compact alternative.--If 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, 
     through a competitive bidding process, shall contract with 
     another public or private entity to manage the Northeast 
     Corridor, with a goal of maximizing the return to the Federal 
     government from such operations.
       (i) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation to 
     carry out this section--
       (1) $3,000,000 for fiscal year 2005, and
       (2) $2,000,000 for fiscal year 2006,
     such sums to remain available until expended.

     SEC. 132. SHUT-DOWN OF COMMUTER OR FREIGHT OPERATIONS.

       (a) In General.--Section 11123 is amended by striking 
     ``National Railroad Passenger Corporation'' each place it 
     appears and inserting ``American Passenger Railway 
     Corporation''.
       (b) Authorization of Appropriations.--From the funds made 
     available for the American Passenger Railway Corporation for 
     fiscal years 2005 through 2010, the Secretary of 
     Transportation shall in each fiscal year hold in reserve from 
     the amounts authorized by section 24402(g) of title 49, 
     United States Code, such sums as may be necessary to carry 
     out directed service orders issued under section 1123 of 
     title 49, United States Code, to respond to the shut-down of 
     commuter rail operations or freight operations due to a shut-
     down of operations by the American Passenger Railway 
     Corporation. The Secretary shall make the reserved funds 
     available through an appropriate grant instrument during the 
     fourth quarter of each fiscal year to the extent that no 
     grant orders have been issued by the Surface Transportation 
     Board during that fiscal year prior to the date of transfer 
     of the reserved funds or there is a balance of reserved funds 
     not needed by the Board to pay for any directed service order 
     in that fiscal year.
       (c) Effective Date for Subsection (a).--The amendment made 
     by subsection (a) shall take effect on the date, determined 
     by the Secretary of Transportation, on which the 
     restructuring required by sections 24300 of title 49, United 
     States Code, is completed.

     SEC. 133. CAPITAL GRANTS FOR NORTHEAST CORRIDOR.

       (a) In General.--Chapter 243, as amended by section 105, is 
     amended by adding at the end the following:

     ``Sec. 24318. Capital authorizations for the Northeast 
       Corridor

       ``(a) In General.--The Secretary of Transportation, in 
     consultation with the American Passenger Railway Corporation, 
     shall develop and implement a capital program to restore the 
     mainline of the Northeast Corridor between Boston, 
     Massachusetts, and Washington, District of Columbia, to a 
     state of good repair, as defined by the Secretary.
       ``(b) Authorization of Appropriations for Capital Projects 
     on the Northeast Corridor.--There are authorized to be 
     appropriated to the Secretary of Transportation to make 
     capital grants under this section $200,000,000 for fiscal 
     year 2005 and $300,000,000 for each of fiscal years 2006 
     through 2010.
       ``(c) Achievement of State-of-good-repair on Northeast 
     Corridor.--
       ``(1) Use of funds.--Sums authorized for the Northeast 
     Corridor under subsection (b) may be used solely for the 
     purpose of funding deferred maintenance and safety projects, 
     including the negotiated Federal share for life-safety 
     improvements in the New York Penn Station tunnels.
       ``(2) State of good repair.--The Northeast Corridor shall 
     be considered to be in a state of good repair upon the 
     completion of the capital program developed under subsection 
     (a).''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     243, as amended by section 105, is amended by adding at the 
     end thereof the following:

``24318. Capital authorizations for the Northeast Corridor''.

                      Subtitle C--Related Matters

     SEC. 151. FAIR AND OPEN COMPETITION.

       (a) In General.--The Secretary of Transportation shall 
     consult with States that competitively bid intercity 
     passenger rail services to ensure their bidding practices 
     provide for fair and open competition for all bidders, 
     including the American Passenger Railway Corporation. The 
     Secretary may withhold all or a portion of a grant under this 
     Act if the Secretary determines that the State's bidding 
     processes do not treat all competitors fairly.
       (b) Use of Federal or State Funds.--The Secretary shall 
     ensure that the American Passenger Railway Corporation may 
     not use Federal or State financial support for a passenger 
     rail route to subsidize a competitive bid to operate 
     intercity passenger rail service on another route.

     SEC. 152. ACCESS TO OTHER RAILROADS.

       (a) Terms and Conditions for Access to Other Railroads.--
       (1) Existing routes and frequencies.--
       (A) In general.--The National Railroad Passenger 
     Corporation shall be responsible for negotiating the terms 
     and conditions under which--
       (i) the American Passenger Railway Corporation, a State, or 
     other entity may access the property of a rail carrier to 
     provide intercity passenger rail service over routes operated 
     by Amtrak on the day before the date, determined by the 
     Secretary of Transportation, on which the restructuring 
     required by sections 24300 of title 49, United States Code, 
     is completed at the frequencies in effect on that day; and
       (ii) the American Passenger Railway Corporation, freight 
     railroads, commuter authorities, and other entities may 
     obtain access to property owned by the United States 
     Government to provide intercity, commuter, freight rail and 
     other services, except that the National Railroad Passenger 
     Corporation shall delegate its authority under this clause to 
     the interstate compact authorized by section 131 after that 
     compact has been adopted.
       (B) Preservation of railroad benefits.--The access and 
     liability terms and conditions of the contracts between the 
     National Railroad Passenger Corporation and other rail 
     carriers following the restructuring required by section 
     24300 of title 49, United States Code, shall be no less 
     favorable to the railroads than the access and liability 
     terms and conditions under contracts in effect on the day 
     before the date, as so determined by the Secretary, on which 
     the restructuring is completed.
       (C) Incentive payments; penalties.--The National Railroad 
     Passenger Corporation shall retain a system of incentive 
     payments and performance penalties in negotiating 
     compensation payments to other rail carriers under 
     subparagraph (A) that encourages on-time performance.
       (3) Conditions for new routes and train frequencies.--

[[Page S4037]]

       (A) In general.--The terms and conditions for the operation 
     of a new intercity passenger rail route or frequency added 
     after the date of enactment of this Act shall, except for the 
     rental charge compensation to another rail carrier, be 
     determined by negotiation and mutual agreement between the 
     host railroad and the operator or sponsor of the route or 
     frequency to be added.
       (B) Standard of compensation.--The standard of compensation 
     for the rental change shall be fully allocated costs, 
     excluding capital investments associated with an added route 
     or frequency, when the on-time performance of the new route 
     or train frequency meets or exceeds 95 percent of the goal 
     set by the parties, net of delays not within the host 
     railroad's control.
       (C) Failure of negotiation.--If the parties cannot agree on 
     the terms of the rental charge, either party may petition the 
     Surface Transportation Board to prescribe the terms under 
     section 24308 of title 49, United States Code.
       (b) Fitness Qualifications for Passenger Rail.--
       (1) In general.--No person may operate intercity passenger 
     rail service unless that person demonstrates to the 
     satisfaction of the Secretary of Transportation that--
       ``(A) its intercity passenger rail operations will meet all 
     applicable Federal safety rules and regulations;
       ``(B) it will operate the service on a sound financial 
     basis; and
       ``(C) it has the technical expertise to operate intercity 
     passenger rail service.''.
       (2) Minimum standards.--Within 6 months after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     by regulation establish minimum safety and financial 
     qualifications for operators of intercity passenger rail 
     service.

     SEC. 153. LIMITATIONS ON RAIL PASSENGER TRANSPORTATION 
                   LIABILITY.

       Section 28103 is amended by striking ``Amtrak shall 
     maintain a total'' in subsection (c) and inserting ``each 
     operator of intercity passenger rail service shall 
     maintain''.

     SEC. 154. TRAIN OPERATIONS INSURANCE POOL.

       (a) In General.--Chapter 281 is amended by adding at the 
     end the following:

     ``Sec. 28104. Train operations insurance pool

       ``(a) In General.--The Secretary of Transportation is 
     authorized to encourage and otherwise assist insurance 
     companies and other insurers that meet the requirements 
     prescribed under subsection (b) of this section to form, 
     associate, or otherwise join together in a pool--
       ``(1) to provide the insurance coverage required by section 
     28103; and
       ``(2) for the purpose of assuming, on such terms and 
     conditions as may be agreed upon, such financial 
     responsibility as will enable such companies and other 
     insurers to assume a reasonable proportion of responsibility 
     for the adjustment and payment of claims under section 28103.
       ``(b) Regulations To Establish Insurer Qualification 
     Requirements.--In order to promote the effective 
     administration of the intercity rail passenger program, and 
     to assure that the objectives of this chapter are furthered, 
     the Secretary is authorized to prescribe requirements for 
     insurance companies and other insurers participating in an 
     insurance pool under subsection (a), including minimum 
     requirements for capital or surplus or assets.
       ``(c) Authority To Collect and Pay Premiums and Other 
     Costs.--In order to provide adequate insurance coverage at 
     affordable cost to operators of intercity passenger rail 
     service at no cost to the United States, the Secretary is 
     authorized to divide the insurance premiums and all other 
     costs of forming and operating the insurance pool created 
     pursuant to this section, including the costs of any 
     contractors or consultants the Secretary may hire, among all 
     the operators of intercity passenger rail service (including 
     the American Passenger Railway Corporation) and collect from 
     each operator of intercity passenger rail service the 
     insurance premiums and other costs the Secretary has 
     allocated to it. Notwithstanding any other provision of law, 
     the Secretary may receive funds collected under this section 
     directly from each operator of intercity passenger rail 
     service, credit the appropriation charged for the insurance 
     premiums and other costs of forming and operating the 
     insurance pool, and use those funds to pay insurance premiums 
     and other costs of forming and operating the insurance pool, 
     including the costs of any contractors or consultants the 
     Secretary may hire. The Secretary may advance such sums as 
     may be necessary to pay insurance premiums and other costs of 
     forming and operating the insurance pool from unobligated 
     balances available to the Federal Railroad Administration for 
     intercity passenger rail service, to be reimbursed from 
     payments received from operators of intercity passenger rail 
     service. Where the Secretary is making a grant of operating 
     funds for a route, the Secretary may collect the insurance 
     premiums and other costs the Secretary has allocated to it by 
     withholding those funds from the grant and crediting them to 
     the appropriation charged for the insurance premiums and 
     other costs of forming and operating the insurance pool.

     ``Sec. 28105. Use of insurance pool, companies, or other 
       private organizations for certain payments

       ``(a) Authorization To Enter into Contracts for Certain 
     Responsibilities.--The Secretary of Transportation may enter 
     into contracts with the pool formed or otherwise created 
     under section 28104, or any insurance company or other 
     private organizations, for the purpose of securing 
     performance by such pool, company, or organization of any or 
     all of the following responsibilities:
       ``(1) Estimating and later determining any amounts of 
     payments to be made from the pool.
       ``(2) Receiving from the Secretary, disbursing, and 
     accounting for payments of insurance premiums.
       ``(3) Making such audits of the records of any insurance 
     company or other insurer, insurance agent or broker, or 
     insurance adjustment organization as may be necessary to 
     assure that proper payments are made.
       ``(4) Otherwise assisting in such manner as the contract 
     may provide to further the purposes of this chapter.
       ``(b) Terms and Conditions of Contract.--Any contract with 
     the pool or an insurance company or other private 
     organization under this section may contain such terms and 
     conditions as the Secretary finds necessary or appropriate 
     for carrying out responsibilities under subsection (a) of 
     this section, and may provide for payment of any costs which 
     the Secretary determines are incidental to carrying out such 
     responsibilities which are covered by the contract.
       ``(c) Competitive Bidding.--Any contract entered into under 
     subsection (a) of this section may be entered into without 
     regard to section 5 of title 41 or any other provision of law 
     requiring competitive bidding.
       ``(d) Findings of Secretary.--No contract may be entered 
     into under this section unless the Secretary finds that the 
     pool, company, or organization will perform its obligations 
     under the contract efficiently and effectively, and will meet 
     such requirements as to financial responsibility, legal 
     authority, and other matters as the Secretary finds 
     pertinent.
       ``(e) Term of Contract; Renewals; Termination.--Any 
     contract entered into under this section shall be for a term 
     of 1 year, and may be made automatically renewable from term 
     to term in the absence of notice by either party of an 
     intention to terminate at the end of the current term; except 
     that the Secretary may terminate any such contract at any 
     time (after reasonable notice to the pool, company, or 
     organization involved) if the Secretary finds that the pool, 
     company, or organization has failed substantially to carry 
     out the contract, or is carrying out the contract in a manner 
     inconsistent with the efficient and effective administration 
     of the intercity rail passenger program.''.
       (b) Conforming Amendments.--
       (1) Chapter 281 is amended by striking ``LAW ENFORCEMENT'' 
     in the chapter heading and inserting ``LAW ENFORCEMENT; 
     LIABILITY; INSURANCE''.
       (2) The part analysis of subtitle V is amended by striking 
     the item relating to chapter 281 and inserting the following:

``281. Law enforcement; liability; insurance...................28101''.

       (3) The table of contents of the title is amended by 
     striking the item relating to chapter 281 and inserting the 
     following:

``281. Law enforcement; liability; insurance...................28101''.

       (4) The chapter analysis for chapter 281 is amended by 
     adding at the end the following:

``28104. Train operations insurance pool
``28105. Use of insurance pool, companies, or other private 
              organizations for certain payments''.

     SEC. 155. COLLECTIVE BARGAINING ARRANGEMENTS.

       (a) Status as Employer or Carrier.--
       (1) In general.--Any entity providing intercity passenger 
     railroad transportation (within the meaning of section 20102 
     of title 49, United States Code) that begins operations after 
     the date of enactment of this Act 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 
     intercity passenger railroad transportation (within the 
     meaning of section 20102 of title 49, United States Code) 
     that begins operations after the date of enactment of this 
     Act and replaces intercity rail passenger service that was 
     provided by another entity as of the date of enactment of 
     this Act, 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) Replacement of existing rail passenger service.--
       (A) Negotiations.--An entity providing replacement 
     intercity rail passenger service under paragraph (2) 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

[[Page S4038]]

     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 (2). 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 (2) 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 7 
     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 subparagraphs (A) through (D) 
     of paragraph (2). 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, but all 
     other expenses shall be paid by the party incurring them.
       (C) Service commencement.--An entity providing replacement 
     intercity rail passenger service under paragraph (2) shall 
     commence service only after an agreement is entered into with 
     respect to the matters set forth in subparagraphs (A) through 
     (D) of paragraph (2) or the decision of the arbitrator has 
     been rendered.
       (b) Regulations.--Not later than 6 months after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall issue regulations for carrying out this section.

                       TITLE II--RAIL DEVELOPMENT

     SEC. 201. CAPITAL ASSISTANCE FOR INTERCITY PASSENGER RAIL 
                   SERVICE.

       (a) In General.--Part C of subtitle V is amended by 
     inserting after chapter 243 the following:

   ``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. Inclusion of projects in Budget
``24405. Local share and maintenance of effort
``24406. Grants for maintenance and modernization

     ``Sec. 24401. Definitions

       ``In this chapter:
       ``(1) Applicant.--The term `applicant' means a State, a 
     group of States, including an interstate compact formed under 
     section 410 of the Amtrak Reform and Accountability Act of 
     1997 (49 U.S.C. 24101 note) or section 131 of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act, or a public corporation, board, commission, 
     or agency established by one or more States designated as the 
     lead agency of a State for providing intercity passenger rail 
     service.
       ``(2) Capital project.--The term `capital project' means a 
     project for--
       ``(A) acquiring or constructing equipment or a facility for 
     use in intercity passenger rail service, expenses incidental 
     to the acquisition or construction (including designing, 
     inspecting, supervising, engineering, location surveying, 
     mapping, environmental studies, and acquiring rights-of-way), 
     alternatives analysis related to the development of such 
     train services, capacity improvements on the property over 
     which the service will be conducted, passenger rail-related 
     intelligent transportation systems, highway-rail grade 
     crossing improvements or closures on routes used for 
     intercity passenger rail service, relocation assistance, 
     acquiring replacement housing sites, and acquiring, 
     constructing, relocating, and rehabilitating replacement 
     housing;
       ``(B) rehabilitating or remanufacturing rail rolling stock 
     and associated facilities used primarily in intercity 
     passenger rail service;
       ``(C) leasing equipment or a facility for use in intercity 
     passenger rail service, subject to regulations (to be 
     prescribed by the Secretary of Transportation) limiting such 
     leasing arrangements to arrangements that are more cost-
     effective than purchase or construction;
       ``(D) modernizing existing intercity passenger rail service 
     facilities and information systems;
       ``(E) the introduction of new technology, through 
     innovative and improved products, other than magnetic 
     levitation; or
       ``(F) defraying, with respect to new service established 
     under section 24402, the cost of rental charges to freight 
     railroads.
       ``(3) Intercity corridor passenger rail service.--The term 
     `intercity corridor passenger rail service' means the 
     transportation of passengers between major metropolitan areas 
     by rail, including high-speed rail (as defined in section 
     26105(2) of this title), at multiple daily frequencies in 
     corridors of 300 miles or less in length or with trip times 
     of 4 hours or less.
       ``(4) Net project cost.--The term `net project cost' means 
     that portion of the cost of a project than cannot be financed 
     from revenues reasonably expected to be generated by the 
     project.

     ``Sec. 24402. Capital investment grants to support new 
       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 capital investments to establish or add additional 
     train frequencies for new intercity corridor passenger rail 
     service.
       ``(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) Application with chapter 53.--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 135 of title 23 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 preferred, 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.--The Secretary of Transportation may 
     not approve a grant under this section unless the applicant 
     demonstrates that the railroad over which the intercity 
     passenger rail service will operate concurs with the 
     applicant's operating plans and infrastructure improvement 
     requirements.
       ``(c) Criteria for Grants for Intercity Corridor Passenger 
     Rail Projects.--
       ``(1) In general.--The Secretary may approve a grant under 
     this section for a capital project only if the Secretary 
     determines that the proposed project is--
       ``(A) justified, based on--
       ``(i) the results of an alternatives analysis and 
     preliminary engineering; and
       ``(ii) a comprehensive review of its mobility improvements, 
     environmental benefits, cost effectiveness, and operating 
     efficiencies; and
       ``(B) supported by an acceptable degree of State and local 
     financial commitment, including evidence of stable and 
     dependable financing sources to construct, maintain, and 
     operate the system or extension.
       ``(2) Alternatives analysis and preliminary engineering.--
     In evaluating a project under paragraph (1)(A), the Secretary 
     shall analyze and consider the results of the alternatives 
     analysis and preliminary engineering for the project.
       ``(3) Project justification.--In evaluating a project under 
     paragraph (1)(B), the Secretary shall consider--
       ``(A) the direct and indirect benefits and costs of 
     relevant alternatives;
       ``(B) the ability of the service to compete with other 
     modes of transportation;
       ``(C) the extent to which the project fills an unmet 
     transportation need;
       ``(D) the ability of the service to fund its operating 
     expenses from fare revenues;
       ``(E) population density in the corridor;
       ``(F) the technical capability of the grant recipient to 
     construct the project;
       ``(G) factors such as congestion relief, improved mobility, 
     air pollution, noise pollution, energy consumption, and all 
     associated ancillary and mitigating cost increases necessary 
     to carry out each alternative analyzed;
       ``(H) the level of private sector financial participation 
     and risk sharing in the project;
       ``(I) differences in local land, construction, and 
     operating costs in evaluating project justification; and
       ``(J) other factors that the Secretary determines 
     appropriate to carry out this chapter.
       ``(4) Local financial commitment.--
       ``(A) Evaluation of project.--In evaluating a project under 
     paragraph (1)(C), the Secretary shall require that--
       ``(i) the proposed project plan provides for the 
     availability of contingency amounts that the Secretary 
     determines to be reasonable to cover unanticipated cost 
     increases;
       ``(ii) each proposed State or local source of capital and 
     operating financing is stable, reliable, and available within 
     the proposed project timetable; and
       ``(iii) State or local resources are available to operate 
     the proposed service.

[[Page S4039]]

       ``(B) Considerations.--In assessing the stability, 
     reliability, and availability of proposed sources of local 
     financing under subparagraph (A), the Secretary shall 
     consider--
       ``(i) existing grant commitments;
       ``(ii) the degree to which financing sources are dedicated 
     to the purposes proposed;
       ``(iii) any debt obligation that exists or is proposed by 
     the applicant for the proposed project or other intercity 
     passenger rail service purpose; and
       ``(iv) the extent to which the project has a local 
     financial commitment that exceeds the required non-Federal 
     share of the cost of the project.
       ``(5) Project evaluation and rating.--A proposed project 
     may advance from alternatives analysis to preliminary 
     engineering, and may advance from preliminary engineering to 
     final design and construction, only if the Secretary finds 
     that the project meets the requirements of this section and 
     there is a reasonable likelihood that the project will 
     continue to meet such requirements. In making such findings, 
     the Secretary shall evaluate and rate the project as `highly 
     recommended', `recommended', or `not recommended', based on 
     the results of alternatives analysis, the project 
     justification criteria, and the degree of local financial 
     commitment, as required under this subsection. In rating the 
     projects, the Secretary shall provide, in addition to the 
     overall project rating, individual ratings for each of the 
     criteria established under the regulations issued under 
     paragraph (5).
       ``(6) Full funding grant agreement.--A project financed 
     under this subsection shall be carried out through a full 
     funding grant agreement. The Secretary shall enter into a 
     full funding grant agreement based on the evaluations and 
     ratings required under this subsection. The Secretary shall 
     not enter into a full funding grant agreement for a project 
     unless that project is authorized for final design and 
     construction.
       ``(d) 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 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 60 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 Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure, 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, which, with respect to a high-
     speed rail project, shall be sufficient to complete at least 
     an operable segment;
       ``(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 Federal 
     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 under 
     this section, when combined with obligations under section 
     5309 of this title, may be not more than the amount 
     authorized under section 5338(b) 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.
       ``(e) 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 may be for up to 50 percent 
     of the net project cost. The remainder shall be provided in 
     cash from non-Federal sources.
       ``(f) Undertaking Projects in Advance.--
       ``(1) In general.--The Secretary may pay the Federal share 
     of the net capital project cost to an applicant that carries 
     out any part of a project described in this section according 
     to all applicable procedures and requirements if--
       ``(A) the applicant applies for the payment;
       ``(B) the Secretary approves the payment; and
       ``(C) before carrying out a part of the project, the 
     Secretary approves the plans and specifications for the part 
     in the same way as other projects under this section.
       ``(2) Interest costs.--The cost of carrying out part of a 
     project includes the amount of interest earned and payable on 
     bonds issued by the applicant to the extent proceeds of the 
     bonds are expended in carrying out the part. The amount of 
     interest includable as cost under this paragraph may not be 
     more than the most favorable interest terms reasonably 
     available for the project at the time of borrowing. The 
     applicant shall certify, in a manner satisfactory to the 
     Secretary, that the applicant has shown reasonable diligence 
     in seeking the most favorable financial terms.
       ``(3) Use of cost indices.--The Secretary shall consider 
     changes in capital project cost indices when determining the 
     estimated cost under paragraph (2) of this subsection.
       ``(g) Funding.--There are authorized to be appropriated to 
     the Secretary of Transportation for purposes of this 
     section--
       ``(1) $525,000,000 for fiscal year 2006,
       ``(2) $525,000,000 for fiscal year 2007,
       ``(3) $650,000,000 for fiscal year 2008,
       ``(4) $750,000,000 for fiscal year 2009, and
       ``(5) $800,000,000 for fiscal year 2010,
     such sums to remain available until expended.

     ``Sec. 24403. Project management oversight

       ``(a) Project Management Plan Requirements.--To receive 
     Federal financial assistance for a major capital project 
     under this chapter, an applicant shall prepare and carry out 
     a project management plan approved by the Secretary of 
     Transportation. The plan shall provide for--
       ``(1) adequate recipient staff organization with well-
     defined reporting relationships, statements of functional 
     responsibilities, job descriptions, and job qualifications;
       ``(2) a budget for the project, including the project 
     management organization, appropriate consultants, property 
     acquisition, utility relocation, systems demonstration staff, 
     audits, and miscellaneous payments the recipient may be 
     prepared to justify;
       ``(3) a construction schedule for the project;
       ``(4) a document control procedure and recordkeeping 
     system;

[[Page S4040]]

       ``(5) a change order procedure that includes a documented, 
     systematic approach to handling the construction change 
     orders;
       ``(6) organizational structures, management skills, and 
     staffing levels required throughout the construction phase;
       ``(7) quality control and quality assurance functions, 
     procedures, and responsibilities for construction, system 
     installation, and integration of system components;
       ``(8) material testing policies and procedures;
       ``(9) internal plan implementation and reporting 
     requirements;
       ``(10) criteria and procedures to be used for testing the 
     operational system or its major components;
       ``(11) annual 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) Plan Approval.--
       ``(1) 60-day decision.--The Secretary shall approve or 
     disapprove a plan not later than 60 days after it is 
     submitted. If the approval process cannot be completed within 
     60 days, the Secretary shall notify the recipient, explain 
     the reasons for the delay, and estimate the additional time 
     that will be required.
       ``(2) Explanation of disapproval.--If the Secretary 
     disapproves a plan, the Secretary shall inform the applicant 
     of the reasons for disapproval of the plan.
       ``(c) 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 may pay the 
     entire cost of carrying out a contract under this subsection.
       ``(d) 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. Inclusion of projects in Budget

       ``Beginning with fiscal year 2005, the Secretary of 
     Transportation shall transmit to the Office of Management and 
     Budget for inclusion in the President's budget submission for 
     the fiscal year a list of projects recommended for funding 
     under section 24402 for the fiscal year.

     ``Sec. 24405. Local share and maintenance of effort

       ``(a) In General.--Notwithstanding any other provision of 
     law, a recipient of assistance under section 24402 may use, 
     as part of the local matching funds for a capital project, 
     the proceeds from the issuance of revenue bonds.
       ``(b) Maintenance of Effort.--The Secretary of 
     Transportation shall approve the use of proceeds from the 
     issuance of revenue bonds for the non-Federal share of the 
     net project cost only if the aggregate amount of financial 
     support for intercity passenger rail service from the State 
     is not less than the average annual amount provided by the 
     State during the preceding 3 years.

     ``Sec. 24406. Grants for maintenance and modernization

       ``(a) In General.--The Secretary of Transportation may make 
     capital grants for renewal and modernization of intercity 
     passenger rail services to--
       ``(1) the American Passenger Railway Corporation for 
     services it operates under contract with the Secretary of 
     Transportation; or
       ``(2) to States for intercity passenger rail services 
     operated under a contract with the American Passenger Railway 
     Corporation or another train operator.
       ``(b) Use of Funds.--Grants under this section may be 
     used--
       ``(1) to purchase, lease, rehabilitate, or remanufacture 
     rolling stock and associated facilities used primarily in 
     intercity passenger rail service;
       ``(2) to modernize existing intercity passenger rail 
     service facilities and information systems; or
       ``(3) to defray the cost of rental charges to freight 
     railroads for the addition of train frequencies.
       ``(c) Federal Share.--For fiscal years 2005 through 2010, 
     the Federal share for a capital grant under this section may 
     be 100 percent, except that the Federal share for a grant 
     made under subsection (b)(3) may not exceed 50 percent. After 
     fiscal year 2010, the Federal share for a capital grant under 
     this section may not exceed 80 percent.
       ``(d) Allocation Formula.--Funds made available by this 
     section shall be allocated equitably among the States based 
     on a formula to be determined by the Secretary.
       ``(e) Sleeping and Dining Cars.--Pending the restructuring 
     of long distance routes under sections 106 through 108 of the 
     Rail Passenger Service Restructuring, Reauthorization, and 
     Development Act, capital grants may be made to the American 
     Passenger Railway Corporation for sleeping and dining cars 
     only to the extent necessary to maintain the equipment in 
     working order and not for the purpose of refurbishing, 
     rebuilding, or renewing such equipment to extend the 
     equipment's useful life.
       ``(f) Long Distance Restructuring Plan.--Unless the 
     restructuring plan submitted by the Long Distance Route 
     Restructuring Commission under section 106 of the Rail 
     Passenger Service Restructuring, Reauthorization, and 
     Development Act is disapproved by Congress, from the sums 
     authorized for capital projects outside of the Northeast 
     Corridor, the Secretary may reserve up to $20,000,000 in each 
     of fiscal years 2007 through 2010 to assist in the 
     restructuring of long distance routes as linked corridors, 
     and the Federal share of such assistance shall be 100 
     percent.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of 
     Transportation $200,000,000 for each of fiscal years 2005 
     through 2010 to carry out this section.''.

     SEC. 202. REGULATIONS IMPLEMENTING CHAPTER 244.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     issue final regulations under chapter 244 of title 49, United 
     States Code.
       ``(b) Specific Requirements.--The regulations under chapter 
     244 of title 49, United States Code, shall include--
       ``(1) the manner in which the Secretary will evaluate and 
     rate projects based on the results of alternatives analysis, 
     project justification, and the degree of local financial 
     commitment, as required by section 24402 of that title;
       ``(2) a definition of `major capital project' for purposes 
     of section 24403;
       ``(3) a requirement that project 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;
       ``(4) 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;
       ``(5) a formula based on infrastructure ownership, 
     boardings, and passenger-miles traveled in the prior fiscal 
     year by which the funds authorized for modernization of 
     existing services will be allocated among the States; and
       ``(6) a requirement that, if a State does not apply for its 
     share of formula grant funds under paragraph (5) of this 
     subsection in a timely manner, those funds will be made 
     available to other States.

                           TITLE III--REFORMS

     SEC. 301. MANAGEMENT OF SECURED DEBT.

       Except as approved by the Secretary of Transportation to 
     refinance existing secured debt, Amtrak (until the American 
     Passenger Railway Corporation is established) and the 
     American Passenger Railway Corporation thereafter, may not 
     enter into any obligation secured by assets after the date of 
     enactment of this Act. This section does not prohibit 
     unsecured lines of credit used for working capital purposes.

     SEC. 302. EMPLOYEE ASSISTANCE.

       (a) Transition Financial Incentives.--
       (1) In general.--To reduce operating expenses in 
     preparation for competition from other rail carriers, the 
     American Passenger Railway Corporation may institute a 
     program under which it may, at its discretion, provide 
     financial incentives to employees who voluntarily terminate 
     their employment with the Corporation and relinquish any 
     legal rights to receive termination-related payments under 
     any contractual agreement with the Corporation.
       (2) Conditions for financial incentives.--As a condition 
     for receiving financial assistance grants under this section, 
     the American Passenger Railway Corporation shall certify to 
     the Secretary of Transportation that--
       (A) the financial assistance results in a net reduction in 
     the total number of employees equal to the number receiving 
     financial incentives;
       (B) 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
       (C) the total number of employees eligible for termination-
     related payments will not be increased without the express 
     written consent of the Secretary.
       (3) Amount of financial incentives.--The financial 
     incentives authorized under this section may not exceed 1 
     year's base pay.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation 
     $25,000,000 for each of fiscal years 2005, 2006, and 2007 to 
     make grants to the American Passenger Railway Corporation to 
     fund financial incentive payments to employees under this 
     subsection.
       (b) Labor Protection for Employees of the American 
     Passenger Railway Corporation.--
       (1) In general.--The American Passenger Railway Corporation 
     shall be responsible for obligations imposed by law or 
     collective bargaining agreement for compensation and benefits 
     payable to its employees terminated in connection with the 
     restructuring of passenger rail service under this Act and 
     the amendments made by this Act. The responsibility of the 
     American Passenger Railway Corporation under the preceding 
     sentence,

[[Page S4041]]

     and the obligations for which it is responsible under that 
     sentence, may not be transferred to any other entity in 
     connection with such restructuring by contract or otherwise.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation for the 
     use of the American Passenger Railway Corporation in meeting 
     its responsibility under paragraph (1) $75,000,000 for each 
     of fiscal years 2007 through 2010.
       (3) Not an obligation of the united states.--
     Notwithstanding paragraph (2), nothing in paragraph (1) shall 
     be construed to mean that any labor protection obligation of 
     the American Passenger Railway Corporation under that 
     paragraph is an obligation of the United States Government.

     SEC. 303. TERMINATION OF AUTHORITY FOR GSA TO PROVIDE 
                   SERVICES TO AMTRAK.

       Section 1110 of division A of H.R. 5666 (114 Stat. 2763A-
     202), as enacted by section 1(a)(4) of the Consolidated 
     Appropriations Act, 2001, is repealed.

     SEC. 304. AMTRAK REFORM BOARD OF DIRECTORS.

       Section 24302 is amended by adding at the end the 
     following:
       ``(d) Asset Transition Committee.--
       ``(1) In general.--The Reform Board 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's 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 Amtrak management action with regard 
     to those assets, that is not approved by the asset transition 
     committee.''.

     SEC. 305. LIMITATIONS ON AVAILABILITY OF GRANTS.

       (a) In General.--Chapter 243, as amended by section 136 of 
     this Act is amended by inserting after section 24318 the 
     following:

     ``Sec. 24319. Limitations on availability of grants

       ``(a) In General.--In addition to any other requirement 
     imposed under this title, grants under this subtitle are 
     subject to the following conditions:
       ``(1) The Secretary of Transportation may approve funding 
     to cover operating losses or operating expenses (including 
     advance purchase orders) only after receiving and approving a 
     grant request for each specific train route to which the 
     grant relates.
       ``(2) Each such grant request shall be accompanied by a 
     detailed financial analysis, revenue projection, and capital 
     expenditure program justifying the Federal support to the 
     Secretary's satisfaction.
       ``(3) Not later than December 31st prior to each fiscal 
     year in which a grant under this subtitle is to be made, the 
     grant recipient shall transmit a business plan for operating 
     and capital improvements to be funded in the fiscal year 
     under section 24104(a) 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.
       ``(4) The business plan shall include--
       ``(A) targets, as applicable, for ridership, revenues, and 
     capital and operating expenses;
       ``(B) a separate accounting for such targets--
       ``(i) on the Northeast Corridor;
       ``(ii) each intercity train route;
       ``(iii) as a group for long distance trains and corridor 
     services; and
       ``(iv) commercial activities, including contract operations 
     and mail and express; and
       ``(C) 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.
       ``(5) Each month of each fiscal year in which grants are 
     made under this subtitle, the grant recipient shall submit a 
     supplemental report in electronic format regarding the 
     business plan, which shall describe the work completed to 
     date, any changes to the business plan, and the reasons for 
     such changes, 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.
       ``(6) None of the funds authorized by this subtitle or the 
     Rail Passenger Service Restructuring, Reauthorization, and 
     Development Act may be disbursed for operating expenses, 
     including advance purchase orders and capital projects not 
     approved by the Secretary nor in the business plan submitted 
     by the grant recipient under paragraph (3).
       ``(7) The grant recipient shall display the business plan 
     required by paragraph (3) and all subsequent supplemental 
     plans required by paragraph (5) on its website within a 
     reasonable time after they are submitted to the Secretary and 
     the Congress under this section.
       ``(8) The Secretary may not make any grant under this 
     subtitle, until the grant recipient agrees to continue 
     abiding by the provisions of paragraphs (1), (2), (5), (9), 
     and (11) of the summary of conditions on the direct loan 
     agreement of June 28, 2002, until the loan is repaid.
       ``(9) With respect to any route on which intercity 
     passenger rail service is provided on the day before the date 
     on which the restructuring required by section 24300 is 
     completed (as determined by the Secretary), the American 
     Passenger Railway Corporation shall make available to any 
     replacement operator the legacy equipment that is associated 
     with the service on the route. The equipment shall be made 
     available on such terms as the National Railroad Passenger 
     Corporation determines are fair, reasonable, and in the 
     public interest.
       ``(10) The American Passenger Railway Corporation shall 
     provide interline reservations services to any other provider 
     of intercity passenger rail transportation on the same basis 
     and at the same rates as those services were provided to the 
     operating entities that provide passenger rail service within 
     Amtrak as of the date of enactment of the Rail Passenger 
     Service Restructuring, Reauthorization, and Development Act.
       ``(b) Grant Recipient.--In this section, the term `grant 
     recipient' means--
       ``(1) Amtrak, until the date on which the American 
     Passenger Railway Corporation is established; and
       ``(2) the American Passenger Railway Corporation, after it 
     is established.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     243 is amended by inserting after the item relating to 
     section 24318 the following:

``24319. Limitations on availability of grants''.

     SEC. 306. REPEAL OF OBSOLETE AND EXECUTED PROVISIONS OF LAW.

       (a) In General.--The following sections are repealed:
       (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 is amended--
       (1) by striking paragraph (2) of subsection (a) and 
     redesignating paragraph (3) as paragraph (2); and
       (2) 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 are amended, as appropriate, by 
     striking the items relating to sections 24307, 24701, 24706, 
     24901, 24902, 24904, 24906, 24908, and 24909.

     SEC. 307. ESTABLISHMENT OF FINANCIAL ACCOUNTING SYSTEM.

       (a) In General.--The Inspector General of the Department of 
     Transportation shall employ an independent financial 
     consultant--
       (1) to assess Amtrak's financial accounting and reporting 
     system and practices as of the date of enactment of this Act;
       (2) to design and assist the American Passenger Railway 
     Corporation in implementing a modern financial accounting and 
     reporting system, on the basis of the assessment, that will 
     produce accurate and timely financial information in 
     sufficient detail--
       (A) to enable the American Passenger Railway Corporation to 
     assign revenues and expenses appropriately to each of its 
     lines of business and to each major activity within each line 
     of business activity, including train operations, equipment 
     maintenance, ticketing, and reservations;
       (B) to aggregate expenses and revenues related to 
     infrastructure and distinguish them from expenses and 
     revenues related to rail operations; and
       (C) to provide ticketing and reservation information on a 
     real-time basis.
       (b) Verification of System; Report.--The Inspector General 
     of the Department of Transportation shall review the 
     accounting system designed and implemented under subsection 
     (a) to ensure that it accomplishes the purposes for which it 
     is intended. The Inspector General shall report his findings 
     and conclusions, together with any recommendations, to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure.
       (c) Separate Financial Statements for Northeast Corridor 
     Infrastructure.--Beginning with fiscal year 2006, the 
     American Passenger Railway Corporation shall issue separate 
     financial statements for activities related to the 
     infrastructure of the Northeast Corridor.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation 
     $2,500,000 for fiscal year 2005 to carry out subsection (a), 
     such sums to remain available until expended.

     SEC. 308. RESTRUCTURING OF LONG-TERM DEBT AND CAPITAL LEASES.

       (a) In General.--The Secretary of the Treasury, in 
     consultation with the Secretary of Transportation and Amtrak, 
     shall restructure Amtrak's indebtedness as of the date of 
     enactment of this Act.
       (b) Debt Redemption.--The Secretary of Transportation, in 
     consultation with the Secretary of the Treasury, shall enter 
     into negotiations with the holders of Amtrak

[[Page S4042]]

     debt, including leases, that is outstanding on the date of 
     enactment of this Act for the purpose of restructuring that 
     debt. The Secretary, in consultation with the Secretary of 
     the Treasury, shall secure agreements for repayment on such 
     terms as the Secretary deems favorable to the interests of 
     the Government.
       (c) Criteria.--In redeeming or restructuring Amtrak's 
     indebtedness, the Secretaries and Amtrak--
       (1) shall ensure that the restructuring imposes the least 
     practicable burden on taxpayers; and
       (2) take into consideration repayment costs, the term of 
     any loan or loans, and market conditions.
       (d) Early Redemption Plan.--Within 1 year after the date of 
     enactment of this Act, the Secretary of Transportation and 
     the Secretary of the Treasury shall transmit to the 
     Congress--
       (1) a plan for the early redemption of Amtrak debt; and
       (2) a proposal for covering the costs associated with the 
     early redemption.
       (e) Amtrak Principal and Interest Payments.--
       (1) Principal on debt service.--Unless the Secretary of 
     Transportation and the Secretary of the Treasury restructure 
     or redeem the debt, there are authorized to be appropriated 
     to the Secretary of Transportation for the use of Amtrak 
     (before the date, determined by the Secretary of 
     Transportation, on which the restructuring required by 
     section 24300 of title 49, United States Code, is completed) 
     and the American Passenger Railway Corporation (after that 
     date) for retirement of principal on loans for capital 
     equipment, or capital leases, not more than the following 
     amounts:
       (A) For fiscal year 2005, $110,000,000.
       (B) For fiscal year 2006, $115,000,000.
       (C) For fiscal year 2007, $205,000,000.
       (D) For fiscal year 2008, $165,000,000.
       (E) For fiscal year 2009, $155,000,000.
       (F) For fiscal year 2010, $150,000,000.
       (2) Interest on debt.--Unless the Secretary of 
     Transportation and the Secretary of the Treasury restructure 
     or redeem the debt, there are authorized to be appropriated 
     to the Secretary of Transportation for the use of Amtrak 
     (before the date, determined by the Secretary of 
     Transportation, on which the restructuring required by 
     section 24300 of title 49, United States Code, is completed) 
     and the American Passenger Railway Corporation (after that 
     date) for the payment of interest on loans for capital 
     equipment, or capital leases, the following amounts:
       (A) For fiscal year 2005, $155,000,000.
       (B) For fiscal year 2006, $150,000,000.
       (C) For fiscal year 2007, $140,000,000.
       (D) For fiscal year 2008, $130,000,000.
       (E) For fiscal year 2009, $125,000,000.
       (F) For fiscal year 2010, $115,000,000.
       (3) Reductions in authorization levels.--Whenever action 
     taken by the Secretary of the Treasury under subsection (c) 
     results in reductions in amounts of principle and interest 
     that Amtrak must service on existing debt, Amtrak shall 
     submit to the Senate Committee on Commerce, Science and 
     Transportation, the House of Representatives Committee on 
     Transportation and Infrastructure, the Senate Committee on 
     Appropriations, and House of Representatives Committee on 
     Appropriations revised requests for amounts authorized by 
     paragraphs (1) and (2) that reflect the such reductions.
       (g) Legal Effect of Payments under this Section.--The 
     payment of principal and interest secured debt with the 
     proceeds of grants under subsection (f) shall not--
       (1) 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;
       (2) change the private nature of Amtrak's or its 
     successors' liabilities; or
       (3) imply any Federal guarantee or commitment to amortize 
     Amtrak's outstanding indebtedness.

     SEC. 309. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     Transportation for the benefit of Amtrak for fiscal year 2005 
     $750,000,000 for operating expenses.
                                 ______