[Congressional Record (Bound Edition), Volume 150 (2004), Part 8]
[Senate]
[Pages 10829-10970]
[From the U.S. Government Publishing Office, www.gpo.gov]




SAFE, ACCOUNTABLE, FLEXIBLE, AND EFFICIENT TRANSPORTATION EQUITY ACT OF 
                                  2005

  On Wednesday, May 19, 2004, the Senate passed H.R. 3550, as follows:

         Resolved, That the bill from the House of Representatives 
     (H.R. 3550) entitled ``An Act to authorize funds for Federal-
     aid highways, highway safety programs, and transit programs, 
     and for other purposes.'', do pass with the following 
     amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Safe, 
     Accountable, Flexible, and Efficient Transportation Equity 
     Act of 2004''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. General definitions.
Sec. 3. Definitions for title 23.

                     TITLE I--FEDERAL-AID HIGHWAYS

                          Subtitle A--Funding

Sec. 1101. Authorization of appropriations.
Sec. 1102. Obligation ceiling.
Sec. 1103. Apportionments.
Sec. 1104. Equity bonus programs.
Sec. 1105. Revenue aligned budget authority.

                        Subtitle B--New Programs

Sec. 1201. Infrastructure performance and maintenance program.
Sec. 1202. Future of surface transportation system.
Sec. 1203. Freight transportation gateways; freight intermodal 
              connections.
Sec. 1204. Construction of ferry boats and ferry terminal and 
              maintenance facilities; coordination of ferry 
              construction and maintenance.
Sec. 1205. Designation of Daniel Patrick Moynihan Interstate Highway.
Sec. 1206. State-by-State comparison of highway construction costs.

                          Subtitle C--Finance

Sec. 1301. Federal share.
Sec. 1302. Transfer of highway and transit funds.
Sec. 1303. Transportation Infrastructure Finance and Innovation Act 
              Amendments.
Sec. 1304. Facilitation of international registration plans and 
              international fuel tax agreements.
Sec. 1305. National Commission on Future Revenue Sources to Support the 
              Highway Trust Fund and Finance the Needs of the Surface 
              Transportation System.
Sec. 1306. State infrastructure banks.
Sec. 1307. Public-private partnerships pilot program.
Sec. 1308. Wagering.

                           Subtitle D--Safety

Sec. 1401. Highway safety improvement program.
Sec. 1402. Operation lifesaver.
Sec. 1403. License suspension.
Sec. 1404. Bus axle weight exemption.
Sec. 1405. Safe routes to schools program.
Sec. 1406. Purchases of equipment.
Sec. 1407. Workzone safety.
Sec. 1408. Worker injury prevention and free flow of vehicular traffic.
Sec. 1409. Identity authentication standards.
Sec. 1410. Open container requirements.

             Subtitle E--Environmental Planning and Review

                   Chapter 1--Transportation Planning

Sec. 1501. Integration of natural resource concerns into State and 
              metropolitan transportation planning.
Sec. 1502. Consultation between transportation agencies and resource 
              agencies in transportation planning.
Sec. 1503. Integration of natural resource concerns into transportation 
              project planning.
Sec. 1504. Public involvement in transportation planning and projects.
Sec. 1505. Project mitigation.

         Chapter 2--Transportation Project Development Process

Sec. 1511. Transportation project development process.
Sec. 1512. Assumption of responsibility for categorical exclusions.
Sec. 1513. Surface transportation project delivery pilot program.
Sec. 1514. Parks, recreation areas, wildlife and waterfowl refuges, and 
              historic sites.
Sec. 1515. Regulations.

                        Chapter 3--Miscellaneous

Sec. 1521. Critical real property acquisition.
Sec. 1522. Planning capacity building initiative.

                        Subtitle F--Environment

Sec. 1601. Environmental restoration and pollution abatement; control 
              of invasive plant species and establishment of native 
              species.
Sec. 1602. National scenic byways program.
Sec. 1603. Recreational trails program.
Sec. 1604. Exemption of Interstate System.
Sec. 1605. Standards.
Sec. 1606. Use of high occupancy vehicle lanes.
Sec. 1607. Bicycle transportation and pedestrian walkways.
Sec. 1608. Idling reduction facilities in Interstate rights-of-way.
Sec. 1609. Toll programs.
Sec. 1610. Federal reference method.
Sec. 1611. Addition of particulate matter areas to CMAQ.
Sec. 1612. Addition to CMAQ-eligible projects.
Sec. 1613. Improved interagency consultation.
Sec. 1614. Evaluation and assessment of CMAQ projects.
Sec. 1615. Synchronized planning and conformity timelines, 
              requirements, and horizon.
Sec. 1616. Transition to new air quality standards.
Sec. 1617. Reduced barriers to air quality improvements.
Sec. 1618. Air quality monitoring data influenced by exceptional 
              events.
Sec. 1619. Conforming amendments.
Sec. 1620. Highway stormwater discharge mitigation program.
Sec. 1621. Exemption from certain hazardous materials transportation 
              requirements.
Sec. 1622. Funds for rebuilding fish stocks.

                         Subtitle G--Operations

Sec. 1701. Transportation systems management and operations.
Sec. 1702. Real-time system management information program.
Sec. 1703. Contracting for engineering and design services.
Sec. 1704. Off-duty time for drivers of commercial vehicles.
Sec. 1705. Designation of transportation management areas.

                  Subtitle H--Federal-Aid Stewardship

Sec. 1801. Future Interstate System routes.
Sec. 1802. Stewardship and oversight.
Sec. 1803. Design-build contracting.
Sec. 1804. Program efficiencies--finance.
Sec. 1805. Set-asides for interstate discretionary projects.
Sec. 1806. Federal lands highways program.
Sec. 1807. Highway bridge program.
Sec. 1808. Appalachian development highway system.
Sec. 1809. Multistate corridor program.
Sec. 1810. Border planning, operations, technology, and capacity 
              program.
Sec. 1811. Puerto Rico highway program.
Sec. 1812. National historic covered bridge preservation.
Sec. 1813. Transportation and community and system preservation 
              program.
Sec. 1814. Parking pilot programs.
Sec. 1815. Interstate oasis program.
Sec. 1816. Tribal-State road maintenance agreements.
Sec. 1817. National forest system roads.
Sec. 1818. Territorial highway program.
Sec. 1819. Magnetic levitation transportation technology deployment 
              program.
Sec. 1820. Donations and credits.
Sec. 1821. Disadvantaged business enterprises.
Sec. 1822. Emergency relief.
Sec. 1823. Priority for pedestrian and bicycle facility enhancement 
              projects.
Sec. 1824. The Delta Regional Authority.
Sec. 1825. Multistate international corridor development program.
Sec. 1826. Authorization of contract authority for States with Indian 
              Reservations.

                   Subtitle I--Technical Corrections

Sec. 1901. Repeal or update of obsolete text.
Sec. 1902. Clarification of date.
Sec. 1903. Inclusion of requirements for signs identifying funding 
              sources in title 23.
Sec. 1904. Inclusion of Buy America requirements in title 23.
Sec. 1905. Technical amendments to nondiscrimination section.

                   TITLE II--TRANSPORTATION RESEARCH

                          Subtitle A--Funding

Sec. 2001. Authorization of appropriations.
Sec. 2002. Obligation ceiling.
Sec. 2003. Notice.

                  Subtitle B--Research and Technology

Sec. 2101. Research and technology program.
Sec. 2102. Study of data collection and statistical analysis efforts.
Sec. 2103. Centers for surface transportation excellence.
Sec. 2104. Motorcycle crash causation study grants.
Sec. 2105. Transportation technology innovation and demonstration 
              program

         Subtitle C--Intelligent Transportation System Research

Sec. 2201. Intelligent transportation system research and technical 
              assistance program.

                    TITLE III--PUBLIC TRANSPORTATION

Sec. 3001. Short title.

[[Page 10830]]

Sec. 3002. Amendments to title 49, United States Code; updated 
              terminology.
Sec. 3003. Policies, findings, and purposes.
Sec. 3004. Definitions.
Sec. 3005. Metropolitan transportation planning.
Sec. 3006. Statewide transportation planning.
Sec. 3007. Transportation management areas.
Sec. 3008. Private enterprise participation.
Sec. 3009. Urbanized area formula grants.
Sec. 3010. Planning programs.
Sec. 3011. Capital investment program.
Sec. 3012. New freedom for elderly persons and persons with 
              disabilities.
Sec. 3013. Formula grants for other than urbanized areas.
Sec. 3014. Research, development, demonstration, and deployment 
              projects.
Sec. 3015. Transit cooperative research program.
Sec. 3016. National research programs.
Sec. 3017. National transit institute.
Sec. 3018. Bus testing facility.
Sec. 3019. Bicycle facilities.
Sec. 3020. Suspended light rail technology pilot project.
Sec. 3021. Crime prevention and security.
Sec. 3022. General provisions on assistance.
Sec. 3023. Special provisions for capital projects.
Sec. 3024. Contract requirements.
Sec. 3025. Project management oversight and review.
Sec. 3026. Project review.
Sec. 3027. Investigations of safety and security risk.
Sec. 3028. State safety oversight.
Sec. 3029. Sensitive security information.
Sec. 3030. Terrorist attacks and other acts of violence against public 
              transportation systems.
Sec. 3031. Controlled substances and alcohol misuse testing.
Sec. 3032. Employee protective arrangements.
Sec. 3033. Administrative procedures.
Sec. 3034. Reports and audits.
Sec. 3035. Apportionments of appropriations for formula grants.
Sec. 3036. Apportionments for fixed guideway modernization.
Sec. 3037. Authorizations.
Sec. 3038. Apportionments based on growing States formula factors.
Sec. 3039. Job access and reverse commute grants.
Sec. 3040. Over-the-road bus accessibility program.
Sec. 3041. Alternative transportation in parks and public lands.
Sec. 3042. Obligation ceiling.
Sec. 3043. Adjustments for the Surface Transportation Extension Act of 
              2003.
Sec. 3044. Disadvantaged business enterprise.
Sec. 3045. Intermodal passenger facilities.

                TITLE IV--SURFACE TRANSPORTATION SAFETY

Sec. 4001. Short title.

                       Subtitle A--Highway Safety

                  Part I--Highway Safety Grant Program

Sec. 4101. Short title; amendment of title 23, United States Code.
Sec. 4102. Authorization of appropriations.
Sec. 4103. Highway safety programs.
Sec. 4104. Highway safety research and outreach programs.
Sec. 4105. National Highway Safety Advisory Committee technical 
              correction.
Sec. 4106. Occupant protection grants.
Sec. 4107. School bus driver training.
Sec. 4108. Emergency medical services.
Sec. 4109. Repeal of authority for alcohol traffic safety programs.
Sec. 4110. Impaired driving program.
Sec. 4111. State traffic safety information system improvements.
Sec. 4112. NHTSA accountability.

            Part II--Specific Vehicle Safety-Related Rulings

Sec. 4151. Amendment of title 49, United States Code.
Sec. 4152. Vehicle crash ejection prevention.
Sec. 4153. Vehicle backover avoidance technology study.
Sec. 4154. Vehicle backover data collection.
Sec. 4155. Aggressivity and incompatibility reduction standard.
Sec. 4156. Improved crashworthiness.
Sec. 4157. 15-passenger vans.
Sec. 4158. Additional safety performance criteria for tires.
Sec. 4159. Safety belt use reminders.
Sec. 4160. Missed deadlines reports.
Sec. 4161. Grants for improving child passenger safety programs.
Sec. 4162. Authorization of appropriations.

                   Part III--Miscellaneous Provisions

Sec. 4171. Driver licensing and education.
Sec. 4172. Amendment of Automobile Information Disclosure Act.
Sec. 4173. Child safety.
Sec. 4174. Safe intersections.
Sec. 4175. Study on increased speed limits.

   Subtitle B--Motor Carrier Safety and Unified Carrier Registration

                     Part I--Administrative Matters

Sec. 4201. Short title; amendment of title 49, United States Code.
Sec. 4202. Required completion of overdue reports, studies, and 
              rulemakings.
Sec. 4203. Contract authority.

                     Part II--Motor Carrier Safety

Sec. 4221. Minimum guarantee.
Sec. 4222. Authorization of appropriations.
Sec. 4223. Motor carrier safety grants.
Sec. 4224. CDL working group.
Sec. 4225. CDL learner's permit program.
Sec. 4226. Hobbs Act.
Sec. 4227. Penalty for denial of access to records.
Sec. 4228. Medical program.
Sec. 4229. Operation of commercial motor vehicles by individuals who 
              use insulin to treat diabetes mellitus.
Sec. 4230. Financial responsibility for private motor carriers.
Sec. 4231. Increased penalties for out-of-service violations and false 
              records.
Sec. 4232. Elimination of commodity and service exemptions.
Sec. 4233. Intrastate operations of interstate motor carriers.
Sec. 4234. Authority to stop commercial motor vehicles.
Sec. 4235. Revocation of operating authority.
Sec. 4236. Pattern of safety violations by motor carrier management.
Sec. 4237. Motor carrier research and technology program.
Sec. 4238. Review of commercial zone exemption provision.
Sec. 4239. International cooperation.
Sec. 4240. Performance and registration information system management.
Sec. 4241. Commercial vehicle information systems and networks 
              deployment. 
Sec. 4242. Outreach and education.
Sec. 4243. Operation of restricted property-carrying units on national 
              highway system.
Sec. 4244. Operation of longer combination vehicles on national highway 
              system.
Sec. 4245. Application of safety standards to certain foreign motor 
              carriers.
Sec. 4246. Background checks for Mexican and Canadian drivers hauling 
              hazardous materials.
Sec. 4247. Exemption of drivers of utility service vehicles.
Sec. 4248. Operation of commercial motor vehicles transporting 
              agricultural commodities and farm supplies.
Sec. 4249. Safety performance history screening.
Sec. 4250. Compliance review audit.

                 Part III--Unified Carrier Registration

Sec. 4261. Short title.
Sec. 4262. Relationship to other laws.
Sec. 4263. Inclusion of motor private and exempt carriers.
Sec. 4264. Unified carrier registration system.
Sec. 4265. Registration of motor carriers by States.
Sec. 4266. Identification of vehicles.
Sec. 4267. Use of UCR agreement revenues as matching funds.
Sec. 4268. Clerical amendments.

                   Subtitle C--Household Goods Movers

Sec. 4301. Short title; amendment of title 49, United States Code.
Sec. 4302. Findings; sense of Congress.
Sec. 4303. Definitions.
Sec. 4304. Payment of rates.
Sec. 4305. Household goods carrier operations.
Sec. 4306. Liability of carriers under receipts and bills of lading.
Sec. 4307. Dispute settlement for shipments of household goods.
Sec. 4308. Enforcement of regulations related to transportation of 
              household goods.
Sec. 4309. Working group for development of practices and procedures to 
              enhance Federal-State relations.
Sec. 4310. Consumer handbook on DOT website.
Sec. 4311. Information about household goods transportation on 
              carriers' websites.
Sec. 4312. Consumer complaints.
Sec. 4313. Review of liability of carriers.
Sec. 4314. Civil penalties relating to household goods brokers.
Sec. 4315. Civil and criminal penalty for failing to give up possession 
              of household goods.
Sec. 4316. Progress report.
Sec. 4317. Additional registration requirements for motor carriers of 
              household goods.

   Subtitle D--Hazardous Materials Transportation Safety and Security

Sec. 4401. Short title.
Sec. 4402. Amendment of title 49, United States Code.

  Part I--General Authorities on Transportation of Hazardous Materials

Sec. 4421. Purpose.
Sec. 4422. Definitions.
Sec. 4423. General regulatory authority.
Sec. 4424. Limitation on issuance of hazmat licenses.
Sec. 4425. Representation and tampering.
Sec. 4426. Transporting certain highly radioactive material.
Sec. 4427. Hazmat employee training requirements and grants.
Sec. 4428. Registration.
Sec. 4429. Shipping papers and disclosure.
Sec. 4430. Rail tank cars.
Sec. 4431. Highway routing of hazardous material.
Sec. 4432. Unsatisfactory safety ratings.
Sec. 4433. Air transportation of ionizing radiation material.
Sec. 4434. Training curriculum for the public sector.
Sec. 4435. Planning and training grants; emergency preparedness fund.
Sec. 4436. Special permits and exclusions.
Sec. 4437. Uniform forms and procedures.

[[Page 10831]]

Sec. 4438. International uniformity of standards and requirements.
Sec. 4439. Hazardous materials transportation safety and security.
Sec. 4440. Enforcement.
Sec. 4441. Civil penalties.
Sec. 4442. Criminal penalties.
Sec. 4443. Preemption.
Sec. 4444. Relationship to other laws.
Sec. 4445. Judicial review.
Sec. 4446. Authorization of appropriations.
Sec. 4447. Additional civil and criminal penalties.

                         Part II--Other Matters

Sec. 4461. Administrative authority for research and special programs 
              administration.
Sec. 4462. Mailability of hazardous materials.
Sec. 4463. Criminal matters.
Sec. 4464. Cargo inspection program.
Sec. 4465. Information on hazmat registrations.
Sec. 4466. Report on applying hazardous materials regulations to 
              persons who reject hazardous materials.

                 Part III--Sanitary Food Transportation

Sec. 4481. Short title.
Sec. 4482. Responsibilities of the Secretary of Health and Human 
              Services.
Sec. 4483. Department of Transportation requirements.
Sec. 4484. Effective date.

            Subtitle E--Recreational Boating Safety Programs

Sec. 4501. Short title.

      Part I--Federal Aid in Sport Fish Restoration Act Amendments

Sec. 4521. Amendment of Federal aid in Fish Restoration Act.
Sec. 4522. Authorization of appropriations.
Sec. 4523. Division of annual appropriations.
Sec. 4524. Maintenance of projects.
Sec. 4525. Boating infrastructure.
Sec. 4526. Requirements and restrictions concerning use of amounts for 
              expenses for administration.
Sec. 4527. Payments of funds to and cooperation with Puerto Rico, the 
              District of Columbia, Guam, American Samoa, the 
              Commonwealth of the Northern Mariana Islands, and the 
              Virgin Islands.
Sec. 4528. Multistate conservation grant program.

                  Part II--Clean Vessel Act Amendments

Sec. 4541. Grant program.

        Part III--Recreational Boating Safety Program Amendments

Sec. 4561. State matching funds requirement.
Sec. 4562. Availability of allocations.
Sec. 4563. Authorization of appropriations for State recreational 
              boating safety programs.
Sec. 4564. Maintenance of effort for State recreational boating safety 
              programs.

                         Part IV--Miscellaneous

Sec. 4581. Technical correction to Homeland Security Act.

                    Subtitle F--Rail Transportation

                             Part I--Amtrak

Sec. 4601. Authorization of appropriations.
Sec. 4602. Establishment of Build America Corporation.
Sec. 4603. Federal bonds for transportation infrastructure.

                 Part II--Railroad Track Modernization

Sec. 4631. Short title.
Sec. 4632. Capital grants for railroad track.
Sec. 4633. Regulations.
Sec. 4634. Study of grant-funded projects.
Sec. 4635. Authorization of appropriations.

         Part III--Other Rail Transportation-Related Provisions

Sec. 4661. Capital grants for rail line relocation projects.
Sec. 4662. Use of congestion mitigation and air quality improvement 
              funds for Boston to Portland passenger rail service.

     TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION

Sec. 5000. Short title; amendment of 1986 code.

                 Subtitle A--Trust Fund Reauthorization

Sec. 5001. Extension of Highway Trust Fund and Aquatic Resources Trust 
              Fund expenditure authority and related taxes.
Sec. 5002. Full accounting of funds received by the Highway Trust Fund.
Sec. 5003. Modification of adjustments of apportionments.

            Subtitle B--Volumetric Ethanol Excise Tax Credit

Sec. 5101. Short title.
Sec. 5102. Alcohol and biodiesel excise tax credit and extension of 
              alcohol fuels income tax credit.
Sec. 5103. Biodiesel income tax credit.

                   Subtitle C--Fuel Fraud Prevention

Sec. 5200. Short title.

                       Part I--Aviation Jet Fuel

Sec. 5211. Taxation of aviation-grade kerosene.
Sec. 5212. Transfer of certain amounts from the Airport and Airway 
              Trust Fund to the Highway Trust Fund to reflect highway 
              use of jet fuel.

                           Part II--Dyed Fuel

Sec. 5221. Dye injection equipment.
Sec. 5222. Elimination of administrative review for taxable use of dyed 
              fuel. 
Sec. 5223. Penalty on untaxed chemically altered dyed fuel mixtures.
Sec. 5224. Termination of dyed diesel use by intercity buses.

       Part III--Modification of Inspection of Records Provisions

Sec. 5231. Authority to inspect on-site records.
Sec. 5232. Assessable penalty for refusal of entry.

            Part IV--Registration and Reporting Requirements

Sec. 5241. Registration of pipeline or vessel operators required for 
              exemption of bulk transfers to registered terminals or 
              refineries.
Sec. 5242. Display of registration.
Sec. 5243. Registration of persons within foreign trade zones, etc.
Sec. 5244. Penalties for failure to register and failure to report.
Sec. 5245. Information reporting for persons claiming certain tax 
              benefits.
Sec. 5246. Electronic reporting.

                            Part V--Imports

Sec. 5251. Tax at point of entry where importer not registered.
Sec. 5252. Reconciliation of on-loaded cargo to entered cargo.

                   Part VI--Miscellaneous Provisions

Sec. 5261. Tax on sale of diesel fuel whether suitable for use or not 
              in a diesel-powered vehicle or train.
Sec. 5262. Modification of ultimate vendor refund claims with respect 
              to farming.
Sec. 5263. Taxable fuel refunds for certain ultimate vendors.
Sec. 5264. Two-party exchanges.
Sec. 5265. Modifications of tax on use of certain vehicles.
Sec. 5266. Dedication of revenues from certain penalties to the Highway 
              Trust Fund.
Sec. 5267. Nonapplication of export exemption to delivery of fuel to 
              motor vehicles removed from United States.

                     Part VII--Total Accountability

Sec. 5271. Total accountability.
Sec. 5272. Excise tax reporting.
Sec. 5273. Information reporting.

               Subtitle D--Definition of Highway Vehicle

Sec. 5301. Exemption from certain excise taxes for mobile machinery.
Sec. 5302. Modification of definition of off-highway vehicle.

            Subtitle E--Excise Tax Reform and Simplification

                      Part I--Highway Excise Taxes

Sec. 5401. Dedication of gas guzzler tax to Highway Trust Fund.
Sec. 5402. Repeal certain excise taxes on rail diesel fuel and inland 
              waterway barge fuels.

                     Part II--Aquatic Excise Taxes

Sec. 5411. Elimination of Aquatic Resources Trust Fund and 
              transformation of Sport Fish Restoration Account.
Sec. 5412. Exemption of LED devices from sonar devices suitable for 
              finding fish.
Sec. 5413. Repeal of harbor maintenance tax on exports.
Sec. 5414. Cap on excise tax on certain fishing equipment.
Sec. 5415. Reduction in rate of tax on portable aerated bait 
              containers.

                     Part III--Aerial Excise Taxes

Sec. 5421. Clarification of excise tax exemptions for agricultural 
              aerial applicators and exemption for fixed-wing aircraft 
              engaged in forestry operations.
Sec. 5422. Modification of rural airport definition.
Sec. 5423. Exemption from ticket taxes for transportation provided by 
              seaplanes.
Sec. 5424. Certain sightseeing flights exempt from taxes on air 
              transportation.

                Part IV--Alcoholic Beverage Excise Taxes

Sec. 5431. Repeal of special occupational taxes on producers and 
              marketers of alcoholic beverages.
Sec. 5432. Suspension of limitation on rate of rum excise tax cover 
              over to Puerto Rico and Virgin Islands.

                       Part V--Sport Excise Taxes

Sec. 5441. Custom gunsmiths.
Sec. 5442. Modified taxation of imported archery products.
Sec. 5443. Treatment of tribal governments for purposes of Federal 
              wagering excise and occupational taxes.

                       Part VI--Other Provisions

Sec. 5451. Income tax credit for distilled spirits wholesalers and for 
              distilled spirits in control State bailment warehouses 
              for costs of carrying Federal excise taxes on bottled 
              distilled spirits.
Sec. 5452. Credit for taxpayers owning commercial power takeoff 
              vehicles.
Sec. 5453. Credit for auxiliary power units installed on diesel-powered 
              trucks.

                  Subtitle F--Miscellaneous Provisions

Sec. 5501. Motor Fuel Tax Enforcement Advisory Commission.
Sec. 5502. National Surface Transportation Infrastructure Financing 
              Commission.
Sec. 5503. Treasury study of fuel tax compliance and interagency 
              cooperation.

[[Page 10832]]

Sec. 5504. Expansion of Highway Trust Fund expenditure purposes to 
              include funding for studies of supplemental or 
              alternative financing for the Highway Trust Fund.
Sec. 5505. Treasury study of highway fuels used by trucks for non-
              transportation purposes.
Sec. 5506. Delta regional transportation plan.
Sec. 5507. Treatment of employer-provided transit and van pooling 
              benefits.
Sec. 5508. Study of incentives for production of biodiesel.

                      Subtitle G--Revenue Offsets

     Part I--Limitation on Expensing Certain Passengers Automobiles

Sec. 5601. Expansion of limitation on depreciation of certain passenger 
              automobiles.

          Part II--Provisions Designed To Curtail Tax Shelters

Sec. 5611. Clarification of economic substance doctrine.
Sec. 5612. Penalty for failing to disclose reportable transaction.
Sec. 5613. Accuracy-related penalty for listed transactions and other 
              reportable transactions having a significant tax 
              avoidance purpose.
Sec. 5614. Penalty for understatements attributable to transactions 
              lacking economic substance, etc.
Sec. 5615. Modifications of substantial understatement penalty for 
              nonreportable transactions.
Sec. 5616. Tax shelter exception to confidentiality privileges relating 
              to taxpayer communications.
Sec. 5617. Disclosure of reportable transactions.
Sec. 5618. Modifications to penalty for failure to register tax 
              shelters.
Sec. 5619. Modification of penalty for failure to maintain lists of 
              investors.
Sec. 5620. Modification of actions to enjoin certain conduct related to 
              tax shelters and reportable transactions.
Sec. 5621. Understatement of taxpayer's liability by income tax return 
              preparer.
Sec. 5622. Penalty on failure to report interests in foreign financial 
              accounts.
Sec. 5623. Frivolous tax submissions.
Sec. 5624. Regulation of individuals practicing before the Department 
              of Treasury.
Sec. 5625. Penalty on promoters of tax shelters.
Sec. 5626. Statute of limitations for taxable years for which required 
              listed transactions not reported.
Sec. 5627. Denial of deduction for interest on underpayments 
              attributable to nondisclosed reportable and noneconomic 
              substance transactions.
Sec. 5628. Authorization of appropriations for tax law enforcement.

            Part III--Other Corporate Governance Provisions

Sec. 5631. Affirmation of consolidated return regulation authority.
Sec. 5632. Declaration by chief executive officer relating to Federal 
              annual corporate income tax return.
Sec. 5633. Denial of deduction for certain fines, penalties, and other 
              amounts.
Sec. 5634. Disallowance of deduction for punitive damages.
Sec. 5635. Increase in criminal monetary penalty limitation for the 
              underpayment or overpayment of tax due to fraud.
Sec. 5636. Doubling of certain penalties, fines, and interest on 
              underpayments related to certain offshore financial 
              arrangements.

             Part IV--Enron-Related Tax Shelter Provisions

Sec. 5641. Limitation on transfer or importation of built-in losses.
Sec. 5642. No reduction of basis under section 734 in stock held by 
              partnership in corporate partner.
Sec. 5643. Repeal of special rules for FASITs.
Sec. 5644. Expanded disallowance of deduction for interest on 
              convertible debt.
Sec. 5645. Expanded authority to disallow tax benefits under section 
              269.
Sec. 5646. Modification of interaction between subpart F and passive 
              foreign investment company rules.

             Part V--Provisions To Discourage Expatriation

Sec. 5651. Tax treatment of inverted corporate entities.
Sec. 5652. Imposition of mark-to-market tax on individuals who 
              expatriate.
Sec. 5653. Excise tax on stock compensation of insiders in inverted 
              corporations.
Sec. 5654. Reinsurance of United States risks in foreign jurisdictions.

               Subtitle H--Additional Revenue Provisions

                   Part I--Administrative Provisions

Sec. 5671. Extension of IRS user fees.
Sec. 5672. Clarification of rules for payment of estimated tax for 
              certain deemed asset sales.
Sec. 5673. Partial payment of tax liability in installment agreements.

                     Part II--Financial Instruments

Sec. 5675. Treatment of stripped interests in bond and preferred stock 
              funds, etc.
Sec. 5676. Application of earnings stripping rules to partnerships and 
              S corporations.
Sec. 5677. Recognition of cancellation of indebtedness income realized 
              on satisfaction of debt with partnership interest.
Sec. 5678. Modification of straddle rules.
Sec. 5679. Denial of installment sale treatment for all readily 
              tradeable debt.

                Part III--Corporations and Partnerships

Sec. 5680. Modification of treatment of transfers to creditors in 
              divisive reorganizations.
Sec. 5681. Clarification of definition of nonqualified preferred stock.
Sec. 5682. Modification of definition of controlled group of 
              corporations
Sec. 5683. Mandatory basis adjustments in connection with partnership 
              distributions and transfers of partnership interests.
Sec. 5684. Class lives for utility grading costs.
Sec. 5685. Consistent amortization of periods for intangibles.

  Subtitle I--Tax-Exempt Financing of Highway Projects and Rail-Truck 
                          Transfer Facilities

Sec. 5691. Tax-exempt financing of highway projects and rail-truck 
              transfer facilities.
Sec. 5692. Addition of vaccines against hepatitis A to list of taxable 
              vaccines.
Sec. 5693. Addition of vaccines against influenza to list of taxable 
              vaccines.
Sec. 5694. Extension of amortization of intangibles to sports 
              franchises.

 TITLE VI--TRANSPORTATION DISCRETIONARY SPENDING GUARANTEE AND BUDGET 
                                OFFSETS

Sec. 6101. Sense of the Senate on overall Federal budget.
Sec. 6102. Discretionary spending categories.
Sec. 6103. Level of obligation limitations.

                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 7001. Reimbursement of certain transportation costs incurred by 
              members of the United States Armed Forces on rest and 
              recuperation leave.

                    TITLE VIII--SOLID WASTE DISPOSAL

Sec. 8001. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.
Sec. 8002. Use of granular mine tailings.

     SEC. 2. GENERAL DEFINITIONS.

       In this Act:
       (1) Department.--The term ``Department'' means the 
     Department of Transportation.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Transportation.

     SEC. 3. DEFINITIONS FOR TITLE 23.

       Section 101 of title 23, United States Code, is amended by 
     striking subsection (a) and inserting the following:
       ``(a) Definitions.--In this title:
       ``(1) Apportionment.--The term `apportionment' includes an 
     unexpended apportionment made under a law enacted before the 
     date of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004.
       ``(2) Carpool project.--
       ``(A) In general.--The term `carpool project' means any 
     project to encourage the use of carpools and vanpools.
       ``(B) Inclusions.--The term `carpool project' includes a 
     project--
       ``(i) to provide carpooling opportunities to the elderly 
     and individuals with disabilities;
       ``(ii) to develop and implement a system for locating 
     potential riders and informing the riders of carpool 
     opportunities;
       ``(iii) to acquire vehicles for carpool use;
       ``(iv) to designate highway lanes as preferential carpool 
     highway lanes;
       ``(v) to provide carpool-related traffic control devices; 
     and
       ``(vi) to designate facilities for use for preferential 
     parking for carpools.
       ``(3) Construction.--
       ``(A) In general.--The term `construction' means the 
     supervision, inspection, and actual building of, and 
     incurring of all costs incidental to the construction or 
     reconstruction of a highway, including bond costs and other 
     costs relating to the issuance in accordance with section 122 
     of bonds or other debt financing instruments and costs 
     incurred by the State in performing Federal-aid project 
     related audits that directly benefit the Federal-aid highway 
     program.
       ``(B) Inclusions.--The term `construction' includes--
       ``(i) locating, surveying, and mapping (including the 
     establishment of temporary and permanent geodetic markers in 
     accordance with specifications of the National Oceanic and 
     Atmospheric Administration);
       ``(ii) resurfacing, restoration, and rehabilitation;
       ``(iii) acquisition of rights-of-way;
       ``(iv) relocation assistance, acquisition of replacement 
     housing sites, and acquisition and rehabilitation, 
     relocation, and construction of replacement housing;
       ``(v) elimination of hazards of railway grade crossings;
       ``(vi) elimination of roadside obstacles;
       ``(vii) improvements that directly facilitate and control 
     traffic flow, such as--

       ``(I) grade separation of intersections;
       ``(II) widening of lanes;
       ``(III) channelization of traffic;
       ``(IV) traffic control systems; and
       ``(V) passenger loading and unloading areas;

       ``(viii) capital improvements that directly facilitate an 
     effective vehicle weight enforcement program, such as--

[[Page 10833]]

       ``(I) scales (fixed and portable);
       ``(II) scale pits;
       ``(III) scale installation; and
       ``(IV) scale houses;

       ``(ix) improvements directly relating to securing 
     transportation infrastructures for detection, preparedness, 
     response, and recovery;
       ``(x) operating costs relating to traffic monitoring, 
     management, and control;
       ``(xi) operational improvements; and
       ``(xii) transportation system management and operations.
       ``(4) County.--The term `county' includes--
       ``(A) a corresponding unit of government under any other 
     name in a State that does not have county organizations; and
       ``(B) in those States in which the county government does 
     not have jurisdiction over highways, any local government 
     unit vested with jurisdiction over local highways.
       ``(5) Federal-aid highway.--
       ``(A) In general.--The term `Federal-aid highway' means a 
     highway eligible for assistance under this chapter.
       ``(B) Exclusions.--The term `Federal-aid highway' does not 
     include a highway classified as a local road or rural minor 
     collector.
       ``(6) Federal-aid system.--The term `Federal-aid system' 
     means any of the Federal-aid highway systems described in 
     section 103.
       ``(7) Federal lands highway.--The term `Federal lands 
     highway' means--
       ``(A) a forest highway;
       ``(B) a recreation road;
       ``(C) a public Forest Service road;
       ``(D) a park road;
       ``(E) a parkway;
       ``(F) a refuge road;
       ``(G) an Indian reservation road; and
       ``(H) a public lands highway.
       ``(8) Forest highway.--The term `forest highway' means a 
     forest road that is--
       ``(A) under the jurisdiction of, and maintained by, a 
     public authority; and
       ``(B) is open to public travel.
       ``(9) Forest road or trail.--
       ``(A) In general.--The term `forest road or trail' means a 
     road or trail wholly or partly within, or adjacent to, and 
     serving National Forest System land that is necessary for the 
     protection, administration, use, and development of the 
     resources of that land.
       ``(B) Inclusions.--The term `forest road or trail' 
     includes--
       ``(i) a classified forest road;
       ``(ii) an unclassified forest road;
       ``(iii) a temporary forest road; and
       ``(iv) a public forest service road.
       ``(10) Freight transportation gateway.--
       ``(A) In general.--The term `freight transportation 
     gateway' means a nationally or regionally significant 
     transportation port of entry or hub for domestic and global 
     trade or military mobilization.
       ``(B) Inclusions.--The term `freight transportation 
     gateway' includes freight intermodal and Strategic Highway 
     Network connections that provide access to and from a port or 
     hub described in subparagraph (A).
       ``(11) Highway.--The term `highway' includes--
       ``(A) a road, street, and parkway;
       ``(B) a right-of-way, bridge, railroad-highway crossing, 
     tunnel, drainage structure, sign, guardrail, and protective 
     structure, in connection with a highway; and
       ``(C) a portion of any interstate or international bridge 
     or tunnel (including the approaches to the interstate or 
     international bridge or tunnel, and such transportation 
     facilities as may be required by the United States Customs 
     Service and the Bureau of Citizenship and Immigration 
     Services in connection with the operation of an international 
     bridge or tunnel), the cost of which is assumed by a State 
     transportation department.
       ``(12) Highway safety improvement project.--The term 
     `highway safety improvement project' means a project that 
     meets the requirements of section 148.
       ``(13) Indian reservation road.--
       ``(A) In general.--The term `Indian reservation road' means 
     a public road that is located within or provides access to an 
     area described in subparagraph (B) on which or in which 
     reside Indians or Alaskan Natives that, as determined by the 
     Secretary of the Interior, are eligible for services 
     generally available to Indians under Federal laws 
     specifically applicable to Indians.
       ``(B) Areas.--The areas referred to in subparagraph (A) 
     are--
       ``(i) an Indian reservation;
       ``(ii) Indian trust land or restricted Indian land that is 
     not subject to fee title alienation without the approval of 
     the Federal Government; and
       ``(iii) an Indian or Alaska Native village, group, or 
     community.
       ``(14) Interstate system.--The term `Interstate System' 
     means the Dwight D. Eisenhower National System of Interstate 
     and Defense Highways described in section 103(c).
       ``(15) Maintenance.--
       ``(A) In general.--The term `maintenance' means the 
     preservation of a highway.
       ``(B) Inclusions.--The term `maintenance' includes the 
     preservation of--
       ``(i) the surface, shoulders, roadsides, and structures of 
     a highway; and
       ``(ii) such traffic-control devices as are necessary for 
     safe, secure, and efficient use of a highway.
       ``(16) Maintenance area.--The term `maintenance area' means 
     an area that was designated as a nonattainment area, but was 
     later redesignated by the Administrator of the Environmental 
     Protection Agency as an attainment area, under section 107(d) 
     of the Clean Air Act (42 U.S.C. 7407(d)).
       ``(17) National forest system road or trail.--The term 
     `National Forest System road or trail' means a forest road or 
     trail that is under the jurisdiction of the Forest Service.
       ``(18) National highway system.--The term `National Highway 
     System' means the Federal-aid highway system described in 
     section 103(b).
       ``(19) Operating costs for traffic monitoring, management, 
     and control.--The term `operating costs for traffic 
     monitoring, management, and control' includes--
       ``(A) labor costs;
       ``(B) administrative costs;
       ``(C) costs of utilities and rent;
       ``(D) costs incurred by transportation agencies for 
     technology to monitor critical transportation infrastructure 
     for security purposes; and
       ``(E) other costs associated with transportation systems 
     management and operations and the continuous operation of 
     traffic control, such as--
       ``(i) an integrated traffic control system;
       ``(ii) an incident management program; and
       ``(iii) a traffic control center.
       ``(20) Operational improvement.--
       ``(A) In general.--The term `operational improvement' 
     means--
       ``(i) a capital improvement for installation or 
     implementation of--

       ``(I) a transportation system management and operations 
     program;
       ``(II) traffic and transportation security surveillance and 
     control equipment;
       ``(III) a computerized signal system;
       ``(IV) a motorist information system;
       ``(V) an integrated traffic control system;
       ``(VI) an incident management program;
       ``(VII) equipment and programs for transportation response 
     to manmade and natural disasters; or
       ``(VIII) a transportation demand management facility, 
     strategy, or program; and

       ``(ii) such other capital improvements to a public road as 
     the Secretary may designate by regulation.
       ``(B) Exclusions.--The term `operational improvement' does 
     not include--
       ``(i) a resurfacing, restorative, or rehabilitative 
     improvement;
       ``(ii) construction of an additional lane, interchange, or 
     grade separation; or
       ``(iii) construction of a new facility on a new location.
       ``(21) Park road.--The term `park road' means a public road 
     (including a bridge built primarily for pedestrian use, but 
     with capacity for use by emergency vehicles) that is located 
     within, or provides access to, an area in the National Park 
     System with title and maintenance responsibilities vested in 
     the United States.
       ``(22) Parkway.--The term `parkway' means a parkway 
     authorized by an Act of Congress on land to which title is 
     vested in the United States.
       ``(23) Project.--The term `project' means--
       ``(A)(i) an undertaking to construct a particular portion 
     of a highway; or
       ``(ii) if the context so implies, a particular portion of a 
     highway so constructed; and
       ``(B) any other undertaking eligible for assistance under 
     this title.
       ``(24) Project agreement.--The term `project agreement' 
     means the formal instrument to be executed by the Secretary 
     and recipient of funds under this title.
       ``(25) Public authority.--The term `public authority' means 
     a Federal, State, county, town, or township, Indian tribe, 
     municipal or other local government or instrumentality with 
     authority to finance, build, operate, or maintain toll or 
     toll-free facilities.
       ``(26) Public forest service road.--The term `public Forest 
     Service road' means a classified forest road--
       ``(A) that is open to public travel;
       ``(B) for which title and maintenance responsibility is 
     vested in the Federal Government; and
       ``(C) that has been designated a public road by the Forest 
     Service.
       ``(27) Public lands development roads and trails.--The term 
     `public lands development roads and trails' means roads and 
     trails that the Secretary of the Interior determines are of 
     primary importance for the development, protection, 
     administration, and use of public lands and resources under 
     the control of the Secretary of the Interior.
       ``(28) Public lands highway.--The term `public lands 
     highway' means--
       ``(A) a forest road that is--
       ``(i) under the jurisdiction of, and maintained by, a 
     public authority; and
       ``(ii) open to public travel; and
       ``(B) any highway through unappropriated or unreserved 
     public land, nontaxable Indian land, or any other Federal 
     reservation (including a main highway through such land or 
     reservation that is on the Federal-aid system) that is--
       ``(i) under the jurisdiction of, and maintained by, a 
     public authority; and
       ``(ii) open to public travel.
       ``(29) Public road.--The term `public road' means any road 
     or street that is--
       ``(A) under the jurisdiction of, and maintained by, a 
     public authority; and
       ``(B) open to public travel.
       ``(30) Recreational road.--The term `recreational road' 
     means a public road--
       ``(A) that provides access to a museum, lake, reservoir, 
     visitors center, gateway to a major wilderness area, public 
     use area, or recreational or historic site; and
       ``(B) for which title is vested in the Federal Government.

[[Page 10834]]

       ``(31) Refuge road.--The term `refuge road' means a public 
     road--
       ``(A) that provides access to or within a unit of the 
     National Wildlife Refuge System or a national fish hatchery; 
     and
       ``(B) for which title and maintenance responsibility is 
     vested in the United States Government.
       ``(32) Rural area.--The term `rural area' means an area of 
     a State that is not included in an urban area.
       ``(33) Secretary.--The term `Secretary' means the Secretary 
     of Transportation.
       ``(34) State.--The term `State' means--
       ``(A) a State;
       ``(B) the District of Columbia; and
       ``(C) the Commonwealth of Puerto Rico.
       ``(35) State funds.--The term `State funds' includes funds 
     that are--
       ``(A) raised under the authority of the State (or any 
     political or other subdivision of a State); and
       ``(B) made available for expenditure under the direct 
     control of the State transportation department.
       ``(36) State transportation department.--The term `State 
     transportation department' means the department, agency, 
     commission, board, or official of any State charged by the 
     laws of the State with the responsibility for highway 
     construction.
       ``(37) Territorial highway system.--The term `territorial 
     highway system' means the system of arterial highways, 
     collector roads, and necessary interisland connectors in 
     American Samoa, the Commonwealth of the Northern Mariana 
     Islands, Guam, and the United States Virgin Islands that have 
     been designated by the appropriate Governor or chief 
     executive officer of a territory, and approved by the 
     Secretary, in accordance with section 215.
       ``(38) Transportation enhancement activity.--The term 
     `transportation enhancement activity' means, with respect to 
     any project or the area to be served by the project, any of 
     the following activities as the activities relate to surface 
     transportation:
       ``(A) Provision of facilities for pedestrians and bicycles.
       ``(B) Provision of safety and educational activities for 
     pedestrians and bicyclists.
       ``(C) Acquisition of scenic easements and scenic or 
     historic sites (including historic battlefields).
       ``(D) Scenic or historic highway programs (including the 
     provision of tourist and welcome center facilities).
       ``(E) Landscaping and other scenic beautification.
       ``(F) Historic preservation.
       ``(G) Rehabilitation and operation of historic 
     transportation buildings, structures, or facilities 
     (including historic railroad facilities and canals).
       ``(H) Preservation of abandoned railway corridors 
     (including the conversion and use of the corridors for 
     pedestrian or bicycle trails).
       ``(I) Control and removal of outdoor advertising.
       ``(J) Archaeological planning and research.
       ``(K) Environmental mitigation--
       ``(i) to address water pollution due to highway runoff; or
       ``(ii) reduce vehicle-caused wildlife mortality while 
     maintaining habitat connectivity.
       ``(L) Establishment of transportation museums.
       ``(39) Transportation systems management and operations.--
       ``(A) In general.--The term `transportation systems 
     management and operations' means an integrated program to 
     optimize the performance of existing infrastructure through 
     the implementation of multimodal and intermodal, cross-
     jurisdictional systems, services, and projects designed to 
     preserve capacity and improve security, safety, and 
     reliability of the transportation system.
       ``(B) Inclusions.--The term `transportation systems 
     management and operations' includes--
       ``(i) regional operations collaboration and coordination 
     activities between transportation and public safety agencies; 
     and
       ``(ii) improvements to the transportation system such as 
     traffic detection and surveillance, arterial management, 
     freeway management, demand management, work zone management, 
     emergency management, electronic toll collection, automated 
     enforcement, traffic incident management, roadway weather 
     management, traveler information services, commercial vehicle 
     operations, traffic control, freight management, and 
     coordination of highway, rail, transit, bicycle, and 
     pedestrian operations.
       ``(40) Urban area.--The term `urban area' means--
       ``(A) an urbanized area (or, in the case of an urbanized 
     area encompassing more than 1 State, the portion of the 
     urbanized area in each State); and
       ``(B) an urban place designated by the Bureau of the Census 
     that--
       ``(i) has a population of 5,000 or more;
       ``(ii) is not located within any urbanized area; and
       ``(iii) is located within boundaries that--

       ``(I) are fixed cooperatively by responsible State and 
     local officials, subject to approval by the Secretary; and
       ``(II) encompass, at a minimum, the entire urban place 
     designated by the Bureau of the Census (except in the case of 
     cities in the State of Maine and in the State of New 
     Hampshire).

       ``(41) Urbanized area.--The term `urbanized area' means an 
     area that--
       ``(A) has a population of 50,000 or more;
       ``(B) is designated by the Bureau of the Census; and
       ``(C) is located within boundaries that--
       ``(i) are fixed cooperatively by responsible State and 
     local officials, subject to approval by the Secretary; and
       ``(ii) encompass, at a minimum, the entire urbanized area 
     within a State as designated by the Bureau of the Census.''.

                     TITLE I--FEDERAL-AID HIGHWAYS

                          Subtitle A--Funding

     SEC. 1101. AUTHORIZATION OF APPROPRIATIONS.

       The following sums are authorized to be appropriated out of 
     the Highway Trust Fund (other than the Mass Transit Account):
       (1) Interstate maintenance program.--For the Interstate 
     maintenance program under section 119 of title 23, United 
     States Code--
       (A) $5,442,371,792 for fiscal year 2004;
       (B) $6,425,168,342 for fiscal year 2005;
       (C) $6,683,176,289 for fiscal year 2006;
       (D) $6,702,365,186 for fiscal year 2007;
       (E) $7,036,621,314 for fiscal year 2008; and
       (F) $7,139,130,081 for fiscal year 2009.
       (2) National highway system.--For the National Highway 
     System under section 103 of that title--
       (A) $6,593,922,257 for fiscal year 2004;
       (B) $7,815,590,130 for fiscal year 2005;
       (C) $8,125,241,450 for fiscal year 2006;
       (D) $8,148,531,791 for fiscal year 2007;
       (E) $8,554,231,977 for fiscal year 2008; and
       (F) $8,678,591,297 for fiscal year 2009.
       (3) Bridge program.--For the bridge program under section 
     144 of that title--
       (A) $4,650,754,076 for fiscal year 2004;
       (B) $5,507,287,150 for fiscal year 2005;
       (C) $5,713,860,644 for fiscal year 2006;
       (D) $5,730,266,418 for fiscal year 2007;
       (E) $6,016,042,650 for fiscal year 2008; and
       (F) $6,103,714,622 for fiscal year 2009.
       (4) Surface transportation program.--For the surface 
     transportation program under section 133 of that title--
       (A) $6,877,178,900 for fiscal year 2004;
       (B) $8,107,950,527 for fiscal year 2005;
       (C) $8,417,741,127 for fiscal year 2006;
       (D) $8,441,910,349 for fiscal year 2007;
       (E) $8,862,919,976 for fiscal year 2008; and
       (F) $8,992,134,975 for fiscal year 2009.
       (5) Congestion mitigation and air quality improvement 
     program.--For the congestion mitigation and air quality 
     improvement program under section 149 of that title--
       (A) $1,880,092,073 for fiscal year 2004;
       (B) $2,192,716,180 for fiscal year 2005;
       (C) $2,270,239,273 for fiscal year 2006;
       (D) $2,276,757,639 for fiscal year 2007;
       (E) $2,390,302,660 for fiscal year 2008; and
       (F) $2,425,236,569 for fiscal year 2009.
       (6) Highway safety improvement program.--For the highway 
     safety improvement program under section 148 of that title--
       (A) $1,187,426,572 for fiscal year 2004;
       (B) $1,325,828,388 for fiscal year 2005;
       (C) $1,377,448,548 for fiscal year 2006;
       (D) $1,381,403,511 for fiscal year 2007;
       (E) $1,450,295,996 for fiscal year 2008; and
       (F) $1,471,607,029 for fiscal year 2009.
       (7) Appalachian development highway system program.--For 
     the Appalachian development highway system program under 
     section 170 of that title, $590,000,000 for each of fiscal 
     years 2004 through 2009.
       (8) Recreational trails program.--For the recreational 
     trails program under section 206 of that title, $60,000,000 
     for each of fiscal years 2004 through 2009.
       (9) Federal lands highways program.--
       (A) Indian reservation roads.--For Indian reservation roads 
     under section 204 of that title--
       (i) $300,000,000 for fiscal year 2004;
       (ii) $325,000,000 for fiscal year 2005;
       (iii) $350,000,000 for fiscal year 2006;
       (iv) $375,000,000 for fiscal year 2007;
       (v) $400,000,000 for fiscal year 2008; and
       (vi) $425,000,000 for fiscal year 2009.
       (B) Recreation roads.--For recreation roads under section 
     204 of that title, $50,000,000 for each of fiscal years 2004 
     through 2009.
       (C) Park roads and parkways.--For park roads and parkways 
     under section 204 of that title--
       (i) $300,000,000 for fiscal year 2004;
       (ii) $310,000,000 for fiscal year 2005; and
       (iii) $320,000,000 for each of fiscal years 2006 through 
     2009.
       (D) Refuge roads.--For refuge roads under section 204 of 
     that title, $30,000,000 for each of fiscal years 2004 through 
     2009.
       (E) Public lands highways.--For Federal lands highways 
     under section 204 of that title, $300,000,000 for each of 
     fiscal years 2004 through 2009.
       (F) Safety.--For safety under section 204 of that title, 
     $40,000,000 for each of fiscal years 2004 through 2009.
       (10) Multistate corridor program.--For the multistate 
     corridor program under section 171 of that title--
       (A) $112,500,000 for fiscal year 2004;
       (B) $135,000,000 for fiscal year 2005;
       (C) $157,500,000 for fiscal year 2006;
       (D) $180,000,000 for fiscal year 2007;
       (E) $202,500,000 for fiscal year 2008; and
       (F) $225,000,000 for fiscal year 2009.
       (11) Border planning, operations, and technology program.--
     For the border planning, operations, and technology program 
     under section 172 of that title--
       (A) $112,500,000 for fiscal year 2004;
       (B) $135,000,000 for fiscal year 2005;
       (C) $157,500,000 for fiscal year 2006;
       (D) $180,000,000 for fiscal year 2007;
       (E) $202,500,000 for fiscal year 2008; and
       (F) $225,000,000 for fiscal year 2009.
       (12) National scenic byways program.--For the national 
     scenic byways program under section 162 of that title--

[[Page 10835]]

       (A) $34,000,000 for fiscal year 2004;
       (B) $35,000,000 for fiscal year 2005;
       (C) $36,000,000 for fiscal year 2006;
       (D) $37,000,000 for fiscal year 2007; and
       (E) $39,000,000 for each of fiscal years 2008 and 2009.
       (13) Infrastructure performance and maintenance program.--
     For carrying out the infrastructure performance and 
     maintenance program under section 139 of that title 
     $2,000,000,000 for fiscal year 2004.
       (14) Construction of ferry boats and ferry terminal 
     facilities.--For construction of ferry boats and ferry 
     terminal facilities under section 147 of that title, 
     $60,000,000 for each of fiscal years 2004 through 2009.
       (15) Commonwealth of puerto rico highway program.--For the 
     Commonwealth of Puerto Rico highway program under section 173 
     of that title--
       (A) $140,000,000 for fiscal year 2004;
       (B) $145,000,000 for fiscal year 2005;
       (C) $149,000,000 for fiscal year 2006;
       (D) $154,000,000 for fiscal year 2007;
       (E) $160,000,000 for fiscal year 2008; and
       (F) $163,000,000 for fiscal year 2009.
       (16) Public-private partnerships pilot program.--For the 
     public-private partnerships pilot program under section 
     109(c)(3) of that title, $10,000,000 for each of fiscal years 
     2004 through 2009.
       (17) Denali access system.--For the Denali Access System 
     under section 309 of the Denali Commission Act of 1998 (42 
     U.S.C. 3121 note; Public Law 105-277), $30,000,000 for each 
     of fiscal years 2004 through 2009.
       (18) Delta region tranportation development program.--For 
     planning and construction activities authorized under the 
     Delta Regional Authority, $80,000,000 for each of fiscal 
     years 2004 through 2009.

     SEC. 1102. OBLIGATION CEILING.

       (a) General Limitation.--Subject to subsections (g) and 
     (h), and notwithstanding any other provision of law, the 
     obligations for Federal-aid highway and highway safety 
     construction programs shall not exceed--
       (1) $33,643,326,300 for fiscal year 2004;
       (2) $37,900,000,000 for fiscal year 2005;
       (3) $39,100,000,000 for each of fiscal years 2006 and 2007;
       (4) $39,400,000,000 for fiscal year 2008; and
       (5) $44,400,000,000 for fiscal year 2009.
       (b) Exceptions.--The limitations under subsection (a) shall 
     not apply to obligations under or for--
       (1) section 125 of title 23, United States Code;
       (2) section 147 of the Surface Transportation Assistance 
     Act of 1978 (23 U.S.C. 144 note; 92 Stat. 2714);
       (3) section 9 of the Federal-Aid Highway Act of 1981 
     (Public Law 97-134; 95 Stat. 1701);
       (4) subsections (b) and (j) of section 131 of the Surface 
     Transportation Assistance Act of 1982 (Public Law 97-424; 96 
     Stat. 2119);
       (5) subsections (b) and (c) of section 149 of the Surface 
     Transportation and Uniform Relocation Assistance Act of 1987 
     (Public Law 100-17; 101 Stat. 198);
       (6) sections 1103 through 1108 of the Intermodal Surface 
     Transportation Efficiency Act of 1991 (Public Law 102-240; 
     105 Stat. 2027);
       (7) section 157 of title 23, United States Code (as in 
     effect on June 8, 1998);
       (8) section 105 of title 23, United States Code (as in 
     effect for fiscal years 1998 through 2003, but only in an 
     amount equal to $639,000,000 for each of those fiscal years);
       (9) Federal-aid highway programs for which obligation 
     authority was made available under the Transportation Equity 
     Act for the 21st Century (Public Law 105-178; 112 Stat. 107) 
     or subsequent public laws for multiple years or to remain 
     available until used, but only to the extent that the 
     obligation authority has not lapsed or been used; and
       (10) section 105 of title 23, United States Code (but, for 
     each of fiscal years 2004 through 2009, only in an amount 
     equal to $439,000,000 per fiscal year).
       (c) Distribution of Obligation Authority.--For each of 
     fiscal years 2004 through 2009, the Secretary--
       (1) shall not distribute obligation authority provided by 
     subsection (a) for the fiscal year for--
       (A) amounts authorized for administrative expenses and 
     programs by section 104(a) of title 23, United States Code;
       (B) programs funded from the administrative takedown 
     authorized by section 104(a)(1) of title 23, United States 
     Code; and
       (C) amounts authorized for the highway use tax evasion 
     program and the Bureau of Transportation Statistics;
       (2) shall not distribute an amount of obligation authority 
     provided by subsection (a) that is equal to the unobligated 
     balance of amounts made available from the Highway Trust Fund 
     (other than the Mass Transit Account) for Federal-aid highway 
     and highway safety programs for previous fiscal years the 
     funds for which are allocated by the Secretary;
       (3) shall determine the ratio that--
       (A) the obligation authority provided by subsection (a) for 
     the fiscal year, less the aggregate of amounts not 
     distributed under paragraphs (1) and (2); bears to
       (B) the total of the sums authorized to be appropriated for 
     the Federal-aid highway and highway safety construction 
     programs (other than sums authorized to be appropriated for 
     provisions of law described in paragraphs (1) through (9) of 
     subsection (b) and sums authorized to be appropriated for 
     section 105 of title 23, United States Code, equal to the 
     amount referred to in subsection (b)(10) for the fiscal 
     year), less the aggregate of the amounts not distributed 
     under paragraphs (1) and (2);
       (4) shall distribute the obligation authority provided by 
     subsection (a) less the aggregate amounts not distributed 
     under paragraphs (1) and (2), for section 14501 of title 40, 
     United States Code, so that the amount of obligation 
     authority available for that section is equal to the amount 
     determined by multiplying--
       (A) the ratio determined under paragraph (3); by
       (B) the sums authorized to be appropriated for that section 
     for the fiscal year;
       (5) shall distribute among the States the obligation 
     authority provided by subsection (a), less the aggregate 
     amounts not distributed under paragraphs (1) and (2), for 
     each of the programs that are allocated by the Secretary 
     under this Act and title 23, United States Code (other than 
     to programs to which paragraph (1) applies), by multiplying--
       (A) the ratio determined under paragraph (3); by
       (B) the amounts authorized to be appropriated for each such 
     program for the fiscal year; and
       (6) shall distribute the obligation authority provided by 
     subsection (a), less the aggregate amounts not distributed 
     under paragraphs (1) and (2) and the amounts distributed 
     under paragraphs (4) and (5), for Federal-aid highway and 
     highway safety construction programs (other than the amounts 
     apportioned for the equity bonus program, but only to the 
     extent that the amounts apportioned for the equity bonus 
     program for the fiscal year are greater than $439,000,000, 
     and the Appalachian development highway system program) that 
     are apportioned by the Secretary under this Act and title 23, 
     United States Code, in the ratio that--
       (A) amounts authorized to be appropriated for the programs 
     that are apportioned to each State for the fiscal year; bear 
     to
       (B) the total of the amounts authorized to be appropriated 
     for the programs that are apportioned to all States for the 
     fiscal year.
       (d) Redistribution of Unused Obligation Authority.--
     Notwithstanding subsection (c), the Secretary shall, after 
     August 1 of each of fiscal years 2004 through 2009--
       (1) revise a distribution of the obligation authority made 
     available under subsection (c) if an amount distributed 
     cannot be obligated during that fiscal year; and
       (2) redistribute sufficient amounts to those States able to 
     obligate amounts in addition to those previously distributed 
     during that fiscal year, giving priority to those States 
     having large unobligated balances of funds apportioned under 
     sections 104 and 144 of title 23, United States Code.
       (e) Applicability of Obligation Limitations to 
     Transportation Research Programs.--
       (1) In general.--Except as provided in paragraph (2), 
     obligation limitations imposed by subsection (a) shall apply 
     to contract authority for transportation research programs 
     carried out under--
       (A) chapter 5 of title 23, United States Code; and
       (B) title II of this Act.
       (2) Exception.--Obligation authority made available under 
     paragraph (1) shall--
       (A) remain available for a period of 3 fiscal years; and
       (B) be in addition to the amount of any limitation imposed 
     on obligations for Federal-aid highway and highway safety 
     construction programs for future fiscal years.
       (f) Redistribution of Certain Authorized Funds.--
       (1) In general.--Not later than 30 days after the date of 
     distribution of obligation authority under subsection (c) for 
     each of fiscal years 2004 through 2009, the Secretary shall 
     distribute to the States any funds that--
       (A) are authorized to be appropriated for the fiscal year 
     for Federal-aid highway programs; and
       (B) the Secretary determines will not be allocated to the 
     States, and will not be available for obligation, in the 
     fiscal year due to the imposition of any obligation 
     limitation for the fiscal year.
       (2) Ratio.--Funds shall be distributed under paragraph (1) 
     in the same ratio as the distribution of obligation authority 
     under subsection (c)(6).
       (3) Availability.--Funds distributed under paragraph (1) 
     shall be available for any purpose described in section 
     133(b) of title 23, United States Code.
       (g) Special Rule.--Obligation authority distributed for a 
     fiscal year under subsection (c)(4) for the provision 
     specified in subsection (c)(4) shall--
       (1) remain available until used for obligation of funds for 
     that provision; and
       (2) be in addition to the amount of any limitation imposed 
     on obligations for Federal-aid highway and highway safety 
     construction programs for future fiscal years.
       (h) Adjustment in Obligation Limit.--
       (1) In general.--A limitation on obligations imposed by 
     subsection (a) for a fiscal year shall be adjusted by an 
     amount equal to the amount determined in accordance with 
     section 251(b)(1)(B) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985 (2 U.S.C. 901(b)(1)(B)) for the 
     fiscal year.
       (2) Distribution.--An adjustment under paragraph (1) shall 
     be distributed in accordance with this section.
       (i) Limitations on Obligations for Administrative 
     Expenses.--Notwithstanding any other provision of law, the 
     total amount of all obligations under section 104(a) of title 
     23, United States Code, shall not exceed--

[[Page 10836]]

       (1) $450,000,000 for fiscal year 2004;
       (2) $465,000,000 for fiscal year 2005;
       (3) $480,000,000 for fiscal year 2006;
       (4) $495,000,000 for fiscal year 2007;
       (5) $510,000,000 for fiscal year 2008; and
       (6) $525,000,000 for fiscal year 2009.
       (j) National Highway System Component.--Section 104(b)(1) 
     of title 23, United States Code, is amended by striking 
     ``$36,400,000'' and insert ``$50,000,000''.

     SEC. 1103. APPORTIONMENTS.

       (a) Administrative Expenses.--
       (1) In general.--Section 104 of title 23, United States 
     Code, is amended by striking subsection (a) and inserting the 
     following:
       ``(a) Administrative Expenses.--
       ``(1) In general.--There are authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to be made available to the Secretary of 
     Transportation for administrative expenses of the Federal 
     Highway Administration--
       ``(A) $450,000,000 for fiscal year 2004;
       ``(B) $465,000,000 for fiscal year 2005;
       ``(C) $480,000,000 for fiscal year 2006;
       ``(D) $495,000,000 for fiscal year 2007;
       ``(E) $510,000,000 for fiscal year 2008; and
       ``(F) $525,000,000 for fiscal year 2009.
       ``(2) Purposes.--The funds authorized by this subsection 
     shall be used--
       ``(A) to administer the provisions of law to be financed 
     from appropriations for the Federal-aid highway program and 
     programs authorized under chapter 2; and
       ``(B) to make transfers of such sums as the Secretary 
     determines to be appropriate to the Appalachian Regional 
     Commission for administrative activities associated with the 
     Appalachian development highway system.
       ``(3) Availability.--The funds made available under 
     paragraph (1) shall remain available until expended.''.
       (2) Conforming amendments.--Section 104 of title 23, United 
     States Code, is amended--
       (A) in the matter preceding paragraph (1) of subsection 
     (b), by striking ``the deduction authorized by subsection (a) 
     and'';
       (B) in the first sentence of subsection (e)(1), by striking 
     ``, and also'' and all that follows through ``this section''; 
     and
       (C) in subsection (i), by striking ``deducted'' and 
     inserting ``made available''.
       (b) Metropolitan Planning.--Section 104(f) of title 23, 
     United States Code, is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Set-aside.--On October 1 of each fiscal year, the 
     Secretary shall set aside 1.5 percent of the funds authorized 
     to be appropriated for the Interstate maintenance, national 
     highway system, surface transportation, congestion mitigation 
     and air quality improvement, highway safety improvement, and 
     highway bridge programs authorized under this title to carry 
     out the requirements of section 134.'';
       (2) in paragraph (2), by striking ``per centum'' and 
     inserting ``percent'';
       (3) in paragraph (3)--
       (A) by striking ``The funds'' and inserting the following:
       ``(A) In general.--The funds''; and
       (B) by striking ``These funds'' and all that follows and 
     inserting the following:
       ``(B) Unused funds.--Any funds that are not used to carry 
     out section 134 may be made available by a metropolitan 
     planning organization to the State to fund activities under 
     section 135.''; and
       (4) by adding at the end the following:
       ``(6) Federal share.--Funds apportioned to a State under 
     this subsection shall be matched in accordance with section 
     120(b) unless the Secretary determines that the interests of 
     the Federal-aid highway program would be best served without 
     the match.''.
       (c) Alaska Highway.--Section 104(b)(1)(A) of title 23, 
     United States Code, is amended by striking ``1998 through 
     2002'' and inserting ``2004 through 2009''.

     SEC. 1104. EQUITY BONUS PROGRAM.

       (a) In General.--Section 105 of title 23, United States 
     Code, is amended to read as follows:

     ``Sec. 105. Equity bonus program

       ``(a) Program.--
       ``(1) In general.--Subject to subsections (c) and (d), for 
     each of fiscal years 2004 through 2009, the Secretary shall 
     allocate among the States amounts sufficient to ensure that 
     no State receives a percentage of the total apportionments 
     for the fiscal year for the programs specified in paragraph 
     (2) that is less than the percentage calculated under 
     subsection (b).
       ``(2) Specific programs.--The programs referred to in 
     subsection (a) are--
       ``(A) the Interstate maintenance program under section 119;
       ``(B) the national highway system program under section 
     103;
       ``(C) the bridge program under section 144;
       ``(D) the surface transportation program under section 133;
       ``(E) the highway safety improvement program under section 
     148;
       ``(F) the congestion mitigation and air quality improvement 
     program under section 149;
       ``(G) metropolitan planning programs under section 104(f) 
     (other than planning programs funded by amounts provided 
     under the equity bonus program under this section);
       ``(H) the infrastructure performance and maintenance 
     program under section 139;
       ``(I) the equity bonus program under this section;
       ``(J) the Appalachian development highway system program 
     under subtitle IV of title 40;
       ``(K) the recreational trails program under section 206;
       ``(L) the safe routes to schools program under section 150; 
     and
       ``(M) the rail-highway grade crossing program under section 
     130.
       ``(b) State Percentage.--
       ``(1) In general.--The percentage referred to in subsection 
     (a) for each State shall be--
       ``(A) 95 percent of the quotient obtained by dividing--
       ``(i) the estimated tax payments attributable to highway 
     users in the State paid into the Highway Trust Fund (other 
     than the Mass Transit Account) in the most recent fiscal year 
     for which data are available; by
       ``(ii) the estimated tax payments attributable to highway 
     users in all States paid into the Highway Trust Fund (other 
     than the Mass Transit Account) for the fiscal year; or
       ``(B) for a State with a total population density of less 
     than 20 persons per square mile, as reported in the decennial 
     census conducted by the Federal Government in 2000, a total 
     population of less than 1,000,000, as reported in that 
     decennial census, or a median household income of less than 
     $35,000, as reported in that decennial census, the greater 
     of--
       ``(i) the percentage under paragraph (1); or
       ``(ii) the average percentage of the State's share of total 
     apportionments for the period of fiscal years 1998 through 
     2003 for the programs specified in paragraph (2).
       ``(2) Specific programs.--The programs referred to in 
     paragraph (1)(B)(ii) are (as in effect on the day before the 
     date of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004)--
       ``(A) the Interstate maintenance program under section 119;
       ``(B) the national highway system program under section 
     103;
       ``(C) the bridge program under section 144;
       ``(D) the surface transportation program under section 133;
       ``(E) the recreational trails program under section 206;
       ``(F) the high priority projects program under section 117;
       ``(G) the minimum guarantee provided under this section;
       ``(H) revenue aligned budget authority amounts provided 
     under section 110;
       ``(I) the congestion mitigation and air quality improvement 
     program under section 149;
       ``(J) the Appalachian development highway system program 
     under subtitle IV of title 40; and
       ``(K) metropolitan planning programs under section 104(f).
       ``(c) Special Rules.--
       ``(1) Minimum combined allocation.--For each fiscal year, 
     before making the allocations under subsection (a)(1), the 
     Secretary shall allocate among the States amounts sufficient 
     to ensure that no State receives a combined total of amounts 
     allocated under subsection (a)(1), apportionments for the 
     programs specified in subsection (a)(2), and amounts 
     allocated under this subsection, that is less than 110 
     percent of the average for fiscal years 1998 through 2003 of 
     the annual apportionments for the State for all programs 
     specified in subsection (b)(2).
       ``(2) No negative adjustment.--Notwithstanding subsection 
     (d), no negative adjustment shall be made under subsection 
     (a)(1) to the apportionment of any State.
       ``(3) Minimum share of tax payments.--Notwithstanding 
     subsection (d), for each fiscal year, the Secretary shall 
     allocate among the States amounts sufficient to ensure that 
     no State receives a percentage of apportionments for the 
     fiscal year for the programs specified in subsection (a)(2) 
     that is less than 90.5 percent of the percentage share of the 
     State of estimated tax payments attributable to highway users 
     in the State paid into the Highway Trust Fund (other than the 
     Mass Transit Account) in the most recent fiscal year for 
     which data are available.
       ``(d) Limitation on Adjustments.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3) of subsection (c), no State shall receive, for any fiscal 
     year, additional amounts under subsection (a)(1) if--
       ``(A) the total apportionments of the State for the fiscal 
     year for the programs specified in subsection (a)(2); exceed
       ``(B) the percentage of the average, for the period of 
     fiscal years 1998 through 2003, of the annual apportionments 
     of the State for all programs specified in subsection (b)(2), 
     as specified in paragraph (2).
       ``(2) Percentages.--The percentages referred to in 
     paragraph (1)(B) are--
       ``(A) for fiscal year 2004, 120 percent;
       ``(B) for fiscal year 2005, 130 percent;
       ``(C) for fiscal year 2006, 134 percent;
       ``(D) for fiscal year 2007, 137 percent;
       ``(E) for fiscal year 2008, 145 percent; and
       ``(F) for fiscal year 2009, 250 percent.
       ``(e) Programmatic Distribution of Funds.--The Secretary 
     shall apportion the amounts made available under this section 
     so that the amount apportioned to each State under this 
     section for each program referred to in subparagraphs (A) 
     through (G) of subsection (a)(2) is equal to the amount 
     determined by multiplying the amount to be apportioned under 
     this section by the proportion that--
       ``(1) the amount of funds apportioned to each State for 
     each program referred to in subparagraphs (A) through (G) of 
     subsection (a)(2) for a fiscal year; bears to
       ``(2) the total amount of funds apportioned to each State 
     for all such programs for the fiscal year.
       ``(f) Metro Planning Set Aside.--Notwithstanding section 
     104(f), no set aside provided for

[[Page 10837]]

     under that section shall apply to funds allocated under this 
     section.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated from the Highway Trust Fund 
     (other than the Mass Transit Account) such sums as are 
     necessary to carry out this section for each of fiscal years 
     2004 through 2009.''.
       (b) Conforming Amendments.--
       (1) The analysis for subchapter I of chapter 1 of title 23, 
     United States Code, is amended by striking the item relating 
     to section 105 and inserting the following:

``105. Equity bonus program.''

       (2) Section 104(a)(1) of title 23, United States Code, is 
     amended by striking ``minimum guarantee'' and inserting 
     ``equity bonus''.

     SEC. 1105. REVENUE ALIGNED BUDGET AUTHORITY.

       Section 110 of title 23, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraphs (1) and (2), by striking ``2000'' and 
     inserting ``2006'';
       (B) in paragraph (1), by inserting ``(as in effect on 
     September 30, 2002)'' after ``(2 U.S.C. 
     901(b)(2)(B)(ii)(I)(cc))''; and
       (C) in paragraph (2)--
       (i) by striking ``If the amount'' and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     if the amount'';
       (ii) by inserting ``(as in effect on September 30, 2002)'' 
     after ``(2 U.S.C. 901(b)(1)(B)(ii)(I)(cc)'';
       (iii) by striking ``the succeeding'' and inserting 
     ``that'';
       (iv) by striking ``and the motor carrier safety grant 
     program''; and
       (v) by adding at the end the following:
       ``(B) Limitation.--No reduction under subparagraph (A) 
     shall be made for a fiscal year if, as of October 1 of the 
     fiscal year, the cash balance in the Highway Trust Fund 
     (other than the Mass Transit Account) exceeds 
     $6,000,000,000.'';
       (2) in subsection (b)(1), by striking subparagraph (A) and 
     inserting the following:
       ``(A) the sums authorized to be appropriated from the 
     Highway Trust Fund (other than the Mass Transit Account) for 
     each of the Federal-aid highway and highway safety 
     construction programs (other than the equity bonus program) 
     and for which funds are allocated from the Highway Trust Fund 
     by the Secretary under this title and the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004; 
     bears to'';
       (3) in subsection (c), by inserting ``the highway safety 
     improvement program,'' after ``the surface transportation 
     program,''; and
       (4) by striking subsections (e), (f), and (g).

                        Subtitle B--New Programs

     SEC. 1201. INFRASTRUCTURE PERFORMANCE AND MAINTENANCE 
                   PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code, is amended by inserting after section 138 
     the following:

     ``Sec. 139. Infrastructure performance and maintenance 
       program

       ``(a) Establishment.--The Secretary shall establish and 
     implement an infrastructure performance and maintenance 
     program in accordance with this section.
       ``(b) Eligible Projects.--A State may obligate funds 
     allocated to the State under this section only for projects 
     eligible under the Interstate maintenance program under 
     section 119, the National Highway System program under 
     section 103, the surface transportation program under section 
     133, the highway safety improvement program under section 
     148, the highway bridge program under section 144, and the 
     congestion mitigation and air quality improvement program 
     under section 149 that will--
       ``(1) preserve, maintain, or otherwise extend, in a cost-
     effective manner, the useful life of existing highway 
     infrastructure elements; or
       ``(2) provide operational improvements (including traffic 
     management and intelligent transportation system strategies 
     and limited capacity enhancements) at points of recurring 
     highway congestion.
       ``(c) Period of Availability.--
       ``(1) Obligation within 180 days.--
       ``(A) In general.--Funds allocated to a State under this 
     section shall be obligated by the State not later than 180 
     days after the date of apportionment.
       ``(B) Unobligated funds.--Any amounts that remain 
     unobligated at the end of that period shall be allocated in 
     accordance with subsection (d).
       ``(2) Obligation by end of fiscal year.--
       ``(A) In general.--All funds allocated or reallocated under 
     this section shall remain available for obligation until the 
     last day of the fiscal year for which the funds are 
     apportioned.
       ``(B) Unobligated funds.--Any amounts allocated that remain 
     unobligated at the end of the fiscal year shall lapse.
       ``(d) Redistribution of Allocated Funds and Obligation 
     Authority.--
       ``(1) In general.--On the date that is 180 days after the 
     date of allocation, or as soon thereafter as practicable, for 
     each fiscal year, the Secretary shall--
       ``(A) withdraw--
       ``(i) any funds allocated to a State under this section 
     that remain unobligated; and
       ``(ii) an equal amount of obligation authority provided for 
     the use of the funds in accordance with section 1101(13) of 
     the Safe, Accountable, Flexible, and Efficient Transportation 
     Equity Act of 2004; and
       ``(B) reallocate the funds and redistribute the obligation 
     authority to those States that--
       ``(i) have fully obligated all amounts allocated under this 
     section for the fiscal year; and
       ``(ii) demonstrate that the State is able to obligate 
     additional amounts for projects eligible under this section 
     before the end of the fiscal year.
       ``(2) Equity bonus.--The calculation and distribution of 
     funds under section 105 shall be adjusted as a result of the 
     allocation of funds under this subsection.
       ``(e) Federal Share Payable.--The Federal share payable for 
     a project funded under this section shall be determined in 
     accordance with section 120.''.
       (b) Conforming Amendment.--The analysis for chapter 1 of 
     title 23, United States Code, is amended by adding after the 
     item relating to section 138 the following:

``139. Infrastructure performance and maintenance program.''.

     SEC. 1202. FUTURE OF SURFACE TRANSPORTATION SYSTEM.

       (a) Declaration of Policy.--Section 101 of title 23, United 
     States Code, is amended--
       (1) by striking ``(b) It is hereby declared to be'' and 
     inserting the following:
       ``(b) Declaration of Policy.--
       ``(1) Acceleration of construction of federal-aid highway 
     systems.--Congress declares that it is'';
       (2) in the second paragraph, by striking ``It is hereby 
     declared'' and inserting the following:
       ``(2) Completion of interstate system.--Congress 
     declares''; and
       (3) by striking the last paragraph and inserting the 
     following:
       ``(3) Transportation needs of 21st century.--Congress 
     declares that--
       ``(A) it is in the national interest to preserve and 
     enhance the surface transportation system to meet the needs 
     of the United States for the 21st Century;
       ``(B) the current urban and long distance personal travel 
     and freight movement demands have surpassed the original 
     forecasts and travel demand patterns are expected to change;
       ``(C) continued planning for and investment in surface 
     transportation is critical to ensure the surface 
     transportation system adequately meets the changing travel 
     demands of the future;
       ``(D) among the foremost needs that the surface 
     transportation system must meet to provide for a strong and 
     vigorous national economy are safe, efficient, and reliable--
       ``(i) national and interregional personal mobility 
     (including personal mobility in rural and urban areas) and 
     reduced congestion;
       ``(ii) flow of interstate and international commerce and 
     freight transportation; and
       ``(iii) travel movements essential for national security;
       ``(E) special emphasis should be devoted to providing safe 
     and efficient access for the type and size of commercial and 
     military vehicles that access designated National Highway 
     System intermodal freight terminals;
       ``(F) it is in the national interest to seek ways to 
     eliminate barriers to transportation investment created by 
     the current modal structure of transportation financing;
       ``(G) the connection between land use and infrastructure is 
     significant;
       ``(H) transportation should play a significant role in 
     promoting economic growth, improving the environment, and 
     sustaining the quality of life; and
       ``(I) the Secretary should take appropriate actions to 
     preserve and enhance the Interstate System to meet the needs 
     of the 21st Century.''.
       (b) National Surface Transportation System Study.--
       (1) In general.--The Secretary shall--
       (A) conduct a complete investigation and study of the 
     current condition and future needs of the surface 
     transportation system of the United States, including--
       (i) the National Highway System;
       (ii) the Interstate System;
       (iii) the strategic highway network;
       (iv) congressional high priority corridors;
       (v) intermodal connectors;
       (vi) freight facilities;
       (vii) navigable waterways;
       (viii) mass transportation;
       (ix) freight and intercity passenger rail infrastructure 
     and facilities; and
       (x) surface access to airports; and
       (B) develop a conceptual plan, with alternative approaches, 
     for the future to ensure that the surface transportation 
     system will continue to serve the needs of the United States, 
     including specific recommendations regarding design and 
     operational standards, Federal policies, and legislative 
     changes.
       (2) Specific issues.--In conducting the investigation and 
     study, the Secretary shall specifically address--
       (A) the current condition and performance of the Interstate 
     System (including the physical condition of bridges and 
     pavements and operational characteristics and performance), 
     relying primarily on existing data sources;
       (B) the future of the Interstate System, based on a range 
     of legislative and policy approaches for 15-, 30-, and 50-
     year time periods;
       (C) the expected demographics and business uses that impact 
     the surface transportation system;
       (D) the expected use of the surface transportation system, 
     including the effects of changing vehicle types, modes of 
     transportation, fleet size and weights, and traffic volumes;
       (E) desirable design policies and standards for future 
     improvements of the surface transportation system, including 
     additional access points;

[[Page 10838]]

       (F) the identification of urban, rural, national, and 
     interregional needs for the surface transportation system;
       (G) the potential for expansion, upgrades, or other changes 
     to the surface transportation system, including--
       (i) deployment of advanced materials and intelligent 
     technologies;
       (ii) critical multistate, urban, and rural corridors 
     needing capacity, safety, and operational enhancements;
       (iii) improvements to intermodal linkages;
       (iv) security and military deployment enhancements;
       (v) strategies to enhance asset preservation; and
       (vi) implementation strategies;
       (H) the improvement of emergency preparedness and 
     evacuation using the surface transportation system, 
     including--
       (i) examination of the potential use of all modes of the 
     surface transportation system in the safe and efficient 
     evacuation of citizens during times of emergency;
       (ii) identification of the location of critical 
     bottlenecks; and
       (iii) development of strategies to improve system 
     redundancy, especially in areas with a high potential for 
     terrorist attacks;
       (I) alternatives for addressing environmental concerns 
     associated with the future development of the surface 
     transportation system;
       (J) the evaluation and assessment of the current and future 
     capabilities for conducting system-wide real-time performance 
     data collection and analysis, traffic monitoring, and 
     transportation systems operations and management; and
       (K) a range of policy and legislative alternatives for 
     addressing future needs for the surface transportation 
     system, including funding needs and potential approaches to 
     provide funds.
       (3) Technical advisory committee.--The Secretary shall 
     establish a technical advisory committee, in a manner 
     consistent with the Federal Advisory Committee Act (5 U.S.C. 
     App.), to collect and evaluate technical input from--
       (A) the Department of Defense;
       (B) appropriate Federal, State, and local officials with 
     responsibility for transportation;
       (C) appropriate State and local elected officials;
       (D) transportation and trade associations;
       (E) emergency management officials;
       (F) freight providers;
       (G) the general public; and
       (H) other entities and persons determined appropriate by 
     the Secretary to ensure a diverse range of views.
       (4) Report.--Not later than 4 years after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Environment and Public Works of the Senate and 
     the Committee on Transportation and Infrastructure of the 
     House of Representatives, and make readily available to the 
     public, a report on the results of the investigation and 
     study conducted under this subsection.

     SEC. 1203. FREIGHT TRANSPORTATION GATEWAYS; FREIGHT 
                   INTERMODAL CONNECTIONS.

       (a) Freight Transportation Gateways.--Chapter 3 of title 
     23, United States Code, is amended by adding at the end the 
     following:

     ``Sec. 325. Freight transportation gateways

       ``(a) In General.--
       ``(1) Establishment.--The Secretary shall establish a 
     freight transportation gateways program to improve 
     productivity, security, and safety of freight transportation 
     gateways, while mitigating congestion and community impacts 
     in the area of the gateways.
       ``(2) Purposes.--The purposes of the freight transportation 
     gateways program shall be--
       ``(A) to facilitate and support multimodal freight 
     transportation initiatives at the State and local levels in 
     order to improve freight transportation gateways and mitigate 
     the impact of congestion on the environment in the area of 
     the gateways;
       ``(B) to provide capital funding to address infrastructure 
     and freight operational needs at freight transportation 
     gateways;
       ``(C) to encourage adoption of new financing strategies to 
     leverage State, local, and private investment in freight 
     transportation gateways;
       ``(D) to facilitate access to intermodal freight transfer 
     facilities; and
       ``(E) to increase economic efficiency by facilitating the 
     movement of goods.
       ``(b) State Responsibilities.--
       ``(1) Project development process.--Each State, in 
     coordination with metropolitan planning organizations, shall 
     ensure that intermodal freight transportation, trade 
     facilitation, and economic development needs are adequately 
     considered and fully integrated into the project development 
     process, including transportation planning through final 
     design and construction of freight-related transportation 
     projects.
       ``(2) Freight transportation coordinator.--
       ``(A) In general.--Each State shall designate a freight 
     transportation coordinator.
       ``(B) Duties.--The coordinator shall--
       ``(i) foster public and private sector collaboration needed 
     to implement complex solutions to freight transportation and 
     freight transportation gateway problems, including--

       ``(I) coordination of metropolitan and statewide 
     transportation activities with trade and economic interests;
       ``(II) coordination with other States, agencies, and 
     organizations to find regional solutions to freight 
     transportation problems; and
       ``(III) coordination with local officials of the Department 
     of Defense and the Department of Homeland Security, and with 
     other organizations, to develop regional solutions to 
     military and homeland security transportation needs; and

       ``(ii) promote programs that build professional capacity to 
     better plan, coordinate, integrate, and understand freight 
     transportation needs for the State.
       ``(c) Innovative Finance Strategies.--
       ``(1) In general.--States and localities are encouraged to 
     adopt innovative financing strategies for freight 
     transportation gateway improvements, including--
       ``(A) new user fees;
       ``(B) modifications to existing user fees, including trade 
     facilitation charges;
       ``(C) revenue options that incorporate private sector 
     investment; and
       ``(D) a blending of Federal-aid and innovative finance 
     programs.
       ``(2) Technical assistance.--The Secretary shall provide 
     technical assistance to States and localities with respect to 
     the strategies.
       ``(d) Intermodal Freight Transportation Projects.--
       ``(1) Use of surface transportation program funds.--A State 
     may obligate funds apportioned to the State under section 
     104(b)(3) for publicly-owned intermodal freight 
     transportation projects that provide community and highway 
     benefits by addressing economic, congestion, system 
     reliability, security, safety, or environmental issues 
     associated with freight transportation gateways.
       ``(2) Eligible projects.--A project eligible for funding 
     under this section--
       ``(A) may include publicly-owned intermodal freight 
     transfer facilities, access to the facilities, and 
     operational improvements for the facilities (including 
     capital investment for intelligent transportation systems), 
     except that projects located within the boundaries of port 
     terminals shall only include the surface transportation 
     infrastructure modifications necessary to facilitate direct 
     intermodal interchange, transfer, and access into and out of 
     the port; and
       ``(B) may involve the combining of private and public 
     funds.''.
       (b) Eligibility for Surface Transportation Program Funds.--
     Section 133(b) of title 23, United States Code, is amended by 
     inserting after paragraph (11) the following:
       ``(12) Intermodal freight transportation projects in 
     accordance with section 325(d)(2).''.
       (c) Freight Intermodal Connections to NHS.--Section 103(b) 
     of title 23, United States Code, is amended by adding at the 
     end the following:
       ``(7) Freight intermodal connections to the nhs.--
       ``(A) Funding set-aside.--Of the funds apportioned to a 
     State for each fiscal year under section 104(b)(1), an amount 
     determined in accordance with subparagraph (B) shall only be 
     available to the State to be obligated for projects on--
       ``(i) National Highway System routes connecting to 
     intermodal freight terminals identified according to criteria 
     specified in the report to Congress entitled `Pulling 
     Together: The National Highway System and its Connections to 
     Major Intermodal Terminals' dated May 24, 1996, referred to 
     in paragraph (1), and any modifications to the connections 
     that are consistent with paragraph (4);
       ``(ii) strategic highway network connectors to strategic 
     military deployment ports; and
       ``(iii) projects to eliminate railroad crossings or make 
     railroad crossing improvements.
       ``(B) Determination of amount.--The amount of funds for 
     each State for a fiscal year that shall be set aside under 
     subparagraph (A) shall be equal to the greater of--
       ``(i) the product obtained by multiplying--

       ``(I) the total amount of funds apportioned to the State 
     under section 104(b)(1); by
       ``(II) the percentage of miles that routes specified in 
     subparagraph (A) constitute of the total miles on the 
     National Highway System in the State; or

       ``(ii) 2 percent of the annual apportionment to the State 
     of funds under 104(b)(1).
       ``(C) Exemption from set-aside.--For any fiscal year, a 
     State may obligate the funds otherwise set aside by this 
     paragraph for any project that is eligible under paragraph 
     (6) and is located in the State on a segment of the National 
     Highway System specified in paragraph (2), if the State 
     certifies and the Secretary concurs that--
       ``(i) the designated National Highway System intermodal 
     connectors described in subparagraph (A) are in good 
     condition and provide an adequate level of service for 
     military vehicle and civilian commercial vehicle use; and
       ``(ii) significant needs on the designated National Highway 
     System intermodal connectors are being met or do not 
     exist.''.
       (d) Federal Share Payable.--Section 120 of title 23, United 
     States Code, is amended by adding at the end the following:
       ``(m) Increased Federal Share for Connectors.--In the case 
     of a project to support a National Highway System intermodal 
     freight connection or strategic highway network connector to 
     a strategic military deployment port described in section 
     103(b)(7), except as otherwise provided in section 120, the 
     Federal share of the total cost of the project shall be 90 
     percent.''.
       (e) Length Limitations.--Section 31111(e) of title 49, 
     United States Code, is amended--
       (1) by striking ``The'' and inserting the following:
       ``(1) In general.--The''; and
       (2) by adding at the end the following:

[[Page 10839]]

       ``(2) Length limitations.--In the interests of economic 
     competitiveness, security, and intermodal connectivity, not 
     later than 3 years after the date of enactment of this 
     paragraph, States shall update the list of those qualifying 
     highways to include--
       ``(A) strategic highway network connectors to strategic 
     military deployment ports; and
       ``(B) National Highway System intermodal freight 
     connections serving military and commercial truck traffic 
     going to major intermodal terminals as described in section 
     103(b)(7)(A)(i).''.
       (f) Conforming Amendment.--The analysis of chapter 3 of 
     title 23, United States Code, is amended by adding at the end 
     the following:

``325. Freight transportation gateways.''.

     SEC. 1204. CONSTRUCTION OF FERRY BOATS AND FERRY TERMINAL AND 
                   MAINTENANCE FACILITIES; COORDINATION OF FERRY 
                   CONSTRUCTION AND MAINTENANCE.

       (a) In General.--Section 147 of title 23, United States 
     Code, is amended to read as follows:

     ``Sec. 147. Construction of ferry boats and ferry terminal 
       and maintenance facilities; coordination of ferry 
       construction and maintenance

       ``(a) Construction of Ferry Boats and Ferry Terminal 
     Facilities.--
       ``(1) In general.--The Secretary shall carry out a program 
     for construction of ferry boats and ferry terminal facilities 
     in accordance with section 129(c).
       ``(2) Federal share.--The Federal share of the cost of 
     construction of ferry boats and ferry terminals and 
     maintenance facilities under this subsection shall be 80 
     percent.
       ``(3) Allocation of funds.--The Secretary shall give 
     priority in the allocation of funds under this subsection to 
     those ferry systems, and public entities responsible for 
     developing ferries, that--
       ``(A) carry the greatest number of passengers and vehicles;
       ``(B) carry the greatest number of passengers in passenger-
     only service; or
       ``(C) provide critical access to areas that are not well-
     served by other modes of surface transportation.
       ``(b) Non-Contract Authority Authorization of 
     Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) $60,000,000 for each fiscal year to carry out this 
     section.
       ``(2) Availability.--Notwithstanding section 118(a), funds 
     made available under paragraph (1) shall be available in 
     advance of an annual appropriation.''.
       (b) Conforming Amendments.--
       (1) The analysis for subchapter I of chapter 1 of title 23, 
     United States Code, is amended by striking the item relating 
     to section 147 and inserting the following:

``147. Construction of ferry boats and ferry terminal and maintenance 
              facilities.''.

       (2) Section 1064 of the Intermodal Surface Transportation 
     Efficiency Act of 1991 (105 Stat. 2005) is repealed.

     SEC. 1205. DESIGNATION OF DANIEL PATRICK MOYNIHAN INTERSTATE 
                   HIGHWAY.

       (a) Designation.--Interstate Highway 86 in the State of New 
     York, extending from the Pennsylvania border near Lake Erie 
     through Orange County, New York, shall be known and 
     designated as the ``Daniel Patrick Moynihan Interstate 
     Highway''.
       (b) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     highway referred to in subsection (a) shall be deemed to be a 
     reference to the Daniel Patrick Moynihan Interstate Highway.

     SEC. 1206. STATE-BY-STATE COMPARISON OF HIGHWAY CONSTRUCTION 
                   COSTS.

       (a) Collection of Data.--
       (1) In general.--The Administrator of the Federal Highway 
     Administration (referred to in this section as the 
     ``Administrator'') shall collect from States any bid price 
     data that is necessary to make State-by-State comparisons of 
     highway construction costs.
       (2) Data required.--In determining which data to collect 
     and the procedures for collecting data, the Administrator 
     shall take into account the data collection deficiencies 
     identified in the report prepared by the General Accounting 
     Office numbered GAO-04-113R.
       (b) Report.--
       (1) In general.--The Administrator shall submit to Congress 
     an annual report on the bid price data collected under 
     subsection (a).
       (2) Inclusions.--The report shall include--
       (A) State-by-State comparisons of highway construction 
     costs for the previous fiscal year (including the cost to 
     construct a 1-mile road segment of a standard design, as 
     determined by the Administrator); and
       (B) a description of the competitive bidding procedures 
     used in each State; and
       (C) a determination by Administrator as to whether the 
     competitive bidding procedures described under subparagraph 
     (B) are effective.

                          Subtitle C--Finance

     SEC. 1301. FEDERAL SHARE.

       Section 120 of title 23, United States Code, is amended--
       (1) in subsection (a), by striking paragraph (1) and 
     inserting the following:
       ``(1) In general.--Except as otherwise provided in this 
     chapter, the Federal share payable on account of any project 
     on the Interstate System (including a project to add high 
     occupancy vehicle lanes and a project to add auxiliary lanes 
     but excluding a project to add any other lanes) shall be 90 
     percent of the total cost of the project.'';
       (2) in subsection (b)--
       (A) by striking ``Except as otherwise'' and inserting the 
     following:
       ``(1) In general.--Except as otherwise'';
       (B) by striking ``shall be--'' and all that follows and 
     inserting ``shall be 80 percent of the cost of the 
     project.''; and
       (C) by adding at the end the following:
       ``(2) State-determined lower federal share.--In the case of 
     any project subject to this subsection, a State may determine 
     a lower Federal share than the Federal share determined under 
     paragraph (1).'';
       (3) by striking subsection (d) and inserting the following:
       ``(d) Increased Federal Share.--
       ``(1) In general.--The Federal share payable under 
     subsection (a) or (b) may be increased for projects and 
     activities in each State in which is located--
       ``(A) nontaxable Indian land;
       ``(B) public land (reserved or unreserved);
       ``(C) a national forest; or
       ``(D) a national park or monument.
       ``(2) Amount.--
       ``(A) In general.--The Federal share for States described 
     in paragraph (1) shall be increased by a percentage of the 
     remaining cost that--
       ``(i) is equal to the percentage that--

       ``(I) the area of all land described in paragraph (1) in a 
     State; bears to
       ``(II) the total area of the State; but

       ``(ii) does not exceed 95 percent of the total cost of the 
     project or activity for which the Federal share is provided.
       ``(B) Adjustment.--The Secretary shall adjust the Federal 
     share for States under subparagraph (A) as the Secretary 
     determines necessary, on the basis of data provided by the 
     Federal agencies that are responsible for maintaining the 
     data.''.

     SEC. 1302. TRANSFER OF HIGHWAY AND TRANSIT FUNDS.

       Section 104 of title 23, United States Code, is amended by 
     striking subsection (k) and inserting the following:
       ``(k) Transfer of Highway and Transit Funds.--
       ``(1) Transfer of highway funds for transit projects.--
       ``(A) In general.--Subject to subparagraph (B), funds made 
     available for transit projects or transportation planning 
     under this title may be transferred to and administered by 
     the Secretary in accordance with chapter 53 of title 49.
       ``(B) Non-federal share.--The provisions of this title 
     relating to the non-Federal share shall apply to the 
     transferred funds.
       ``(2) Transfer of transit funds for highway projects.--
     Funds made available for highway projects or transportation 
     planning under chapter 53 of title 49 may be transferred to 
     and administered by the Secretary in accordance with this 
     title.
       ``(3) Transfer of highway funds to other federal 
     agencies.--
       ``(A) In general.--Except as provided in clauses (i) and 
     (ii) and subparagraph (B), funds made available under this 
     title or any other Act that are derived from Highway Trust 
     Fund (other than the Mass Transit account) may be transferred 
     to another Federal agency if--
       ``(i)(I) an expenditure is specifically authorized in 
     Federal-aid highway legislation or as a line item in an 
     appropriation act; or
       ``(II) a State transportation department consents to the 
     transfer of funds;
       ``(ii) the Secretary determines, after consultation with 
     the State transportation department (as appropriate), that 
     the Federal agency should carry out a project with the funds; 
     and
       ``(iii) the other Federal agency agrees to accept the 
     transfer of funds and to administer the project.
       ``(B) Administration.--
       ``(i) Procedures.--A project carried out with funds 
     transferred to a Federal agency under subparagraph (A) shall 
     be administered by the Federal agency under the procedures of 
     the Federal agency.
       ``(ii) Appropriations.--Funds transferred to a Federal 
     agency under subparagraph (A) shall not be considered an 
     augmentation of the appropriations of the Federal agency.
       ``(iii) Non-federal share.--The provisions of this title, 
     or an Act described in subparagraph (A), relating to the non-
     Federal share shall apply to a project carried out with the 
     transferred funds, unless the Secretary determines that it is 
     in the best interest of the United States that the non-
     Federal share be waived.
       ``(4) Transfer of funds among states or to federal highway 
     administration.--
       ``(A) In general.--Subject to subparagraphs (B) through 
     (D), the Secretary may, at the request of a State, transfer 
     funds apportioned or allocated to the State to another State, 
     or to the Federal Highway Administration, for the purpose of 
     funding 1 or more specific projects.
       ``(B) Administration.--The transferred funds shall be used 
     for the same purpose and in the same manner for which the 
     transferred funds were authorized.
       ``(C) Apportionment.--The transfer shall have no effect on 
     any apportionment formula used to distribute funds to States 
     under this section or section 105 or 144.
       ``(D) Surface transportation program.--Funds that are 
     apportioned or allocated to a

[[Page 10840]]

     State under subsection (b)(3) and attributed to an urbanized 
     area of a State with a population of over 200,000 individuals 
     under section 133(d)(2) may be transferred under this 
     paragraph only if the metropolitan planning organization 
     designated for the area concurs, in writing, with the 
     transfer request.
       ``(5) Transfer of obligation authority.--Obligation 
     authority for funds transferred under this subsection shall 
     be transferred in the same manner and amount as the funds for 
     the projects are transferred under this subsection.''.

     SEC. 1303. TRANSPORTATION INFRASTRUCTURE FINANCE AND 
                   INNOVATION ACT AMENDMENTS.

       (a) Definitions.--Section 181 of title 23, United States 
     Code, is amended--
       (1) in paragraph (3), by striking ``category'' and 
     ``offered into the capital markets'';
       (2) by striking paragraph (7) and redesignating paragraphs 
     (8) through (15) as paragraphs (7) through (14) respectively;
       (3) in paragraph (8) (as redesignated by paragraph (2))--
       (A) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (B) by striking subparagraph (D) and inserting the 
     following:
       ``(D) a project that--
       ``(i)(I) is a project for--

       ``(aa) a public freight rail facility or a private facility 
     providing public benefit;
       ``(bb) an intermodal freight transfer facility;
       ``(cc) a means of access to a facility described in item 
     (aa) or (bb);
       ``(dd) a service improvement for a facility described in 
     item (aa) or (bb) (including a capital investment for an 
     intelligent transportation system); or

       ``(II) comprises a series of projects described in 
     subclause (I) with the common objective of improving the flow 
     of goods;
       ``(ii) may involve the combining of private and public 
     sector funds, including investment of public funds in private 
     sector facility improvements; and
       ``(iii) if located within the boundaries of a port 
     terminal, includes only such surface transportation 
     infrastructure modifications as are necessary to facilitate 
     direct intermodal interchange, transfer, and access into and 
     out of the port.''; and
       (4) in paragraph (10) (as redesignated by paragraph (2)) by 
     striking ``bond'' and inserting ``credit''.
       (b) Determination of Eligibility and Project Selection.--
     Section 182 of title 23, United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) Inclusion in transportation plans and programs.--The 
     project shall satisfy the applicable planning and programming 
     requirements of sections 134 and 135 at such time as an 
     agreement to make available a Federal credit instrument is 
     entered into under this subchapter.
       ``(2) Application.--A State, local government, public 
     authority, public-private partnership, or any other legal 
     entity undertaking the project and authorized by the 
     Secretary shall submit a project application to the 
     Secretary.'';
       (B) in paragraph (3)(A)--
       (i) in clause (i), by striking ``$100,000,000'' and 
     inserting ``$50,000,000''; and
       (ii) in clause (ii), by striking ``50'' and inserting 
     ``20''; and
       (C) in paragraph (4)--
       (i) by striking ``Project financing'' and inserting ``The 
     Federal credit instrument''; and
       (ii) by inserting before the period at the end the 
     following: ``that also secure the project obligations''; and
       (2) in subsection (b)--
       (A) in paragraph (1), by striking ``criteria'' the second 
     place it appears and inserting ``requirements''; and
       (B) in paragraph (2)(B), by inserting ``(which may be the 
     Federal credit instrument)'' after ``obligations''.
       (c) Secured Loans.--Section 183 of title 23, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``of any project selected under section 
     182.'' at the end;
       (ii) in subparagraphs (A) and (B), by inserting ``of any 
     project selected under section 182'' after ``costs'' ; and
       (iii) in subparagraph (B), by striking the semicolon at the 
     end and inserting a period; and
       (B) in paragraph (4)--
       (i) by striking ``funding'' and inserting ``execution''; 
     and
       (ii) by striking ``rating,'' and all that follows and 
     inserting a period;
       (2) in subsection (b)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Maximum amount.--The amount of the secured loan shall 
     not exceed the lesser of--
       ``(A) 33 percent of the reasonably anticipated eligible 
     project costs; or
       ``(B) the amount of the senior project obligations.'';
       (B) in paragraph (3)(A)(i), by inserting ``that also secure 
     the senior project obligations'' after ``sources''; and
       (C) in paragraph (4), by striking ``marketable''; and
       (3) in subsection (c)--
       (A) by striking paragraph (3);
       (B) by redesignating paragraphs (4) and (5) as paragraphs 
     (3) and (4), respectively; and
       (C) in paragraph (3) (as redesignated by subparagraph 
     (B))--
       (i) in subparagraph (A), by striking ``during the 10 
     years''; and
       (ii) in subparagraph (B)(ii), by striking ``loan'' and all 
     that follows and inserting ``loan.''.
       (d) Lines of Credit.--Section 184 of title 23, United 
     States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (3), by striking ``interest, any debt 
     service reserve fund, and any other available reserve'' and 
     inserting ``interest (but not including reasonably required 
     financing reserves)'';
       (B) in paragraph (4), by striking ``marketable United 
     States Treasury securities as of the date on which the line 
     of credit is obligated'' and inserting `` United States 
     Treasury securities as of the date of execution of the line 
     of credit agreement''; and
       (C) in paragraph (5)(A)(i), by inserting ``that also secure 
     the senior project obligations'' after ``sources''; and
       (2) in subsection (c)--
       (A) in paragraph (2)--
       (i) by striking ``scheduled'';
       (ii) by inserting ``be scheduled to'' after ``shall''; and
       (iii) by striking ``be fully repaid, with interest,'' and 
     inserting ``to conclude, with full repayment of principal and 
     interest,''; and
       (B) by striking paragraph (3).
       (e) Program Administration.--Section 185 of title 23, 
     United States Code, is amended to read as follows:

     ``Sec. 185. Program administration

       ``(a) Requirement.--The Secretary shall establish a uniform 
     system to service the Federal credit instruments made 
     available under this subchapter.
       ``(b) Fees.--The Secretary may establish fees at a level to 
     cover all or a portion of the costs to the Federal government 
     of servicing the Federal credit instruments.
       ``(c) Servicer.--
       ``(1) In general.--The Secretary may appoint a financial 
     entity to assist the Secretary in servicing the Federal 
     credit instruments.
       ``(2) Duties.--The servicer shall act as the agent for the 
     Secretary.
       ``(3) Fee.--The servicer shall receive a servicing fee, 
     subject to approval by the Secretary.
       ``(d) Assistance From Expert Firms.--The Secretary may 
     retain the services of expert firms, including counsel, in 
     the field of municipal and project finance to assist in the 
     underwriting and servicing of Federal credit instruments.''.
       (f) Funding.--Section 188 of title 23, United States Code, 
     is amended to read as follows:

     ``Sec. 188. Funding

       ``(a) Funding.--
       ``(1) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this subchapter $130,000,000 for each 
     of fiscal years 2004 through 2009.
       ``(2) Administrative costs.--Of amounts made available 
     under paragraph (1), the Secretary may use for the 
     administration of this subchapter not more than $2,000,000 
     for each of fiscal years 2004 through 2009.
       ``(3) Collected fees and services.--In addition to funds 
     provided under paragraph (2)--
       ``(A) all fees collected under this subchapter shall be 
     made available without further appropriation to the Secretary 
     until expended, for use in administering this subchapter; and
       ``(B) the Secretary may accept and use payment or services 
     provided by transaction participants, or third parties that 
     are paid by participants from transaction proceeds, for due 
     diligence, legal, financial, or technical services.
       ``(4) Availability.--Amounts made available under paragraph 
     (1) shall remain available until expended.
       ``(b) Contract Authority.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, approval by the Secretary of a Federal credit instrument 
     that uses funds made available under this subchapter shall be 
     deemed to be acceptance by the United States of a contractual 
     obligation to fund the Federal credit investment.
       ``(2) Availability.--Amounts authorized under this section 
     for a fiscal year shall be available for obligation on 
     October 1 of the fiscal year.''.
       (g) Repeal.--Section 189 of title 23, United States code, 
     is repealed.
       (h) Conforming Amendments.--The analysis for chapter 1 of 
     title 23, United States Code, is amended--
       (1) by striking the item relating to section 185 and 
     inserting the following:

``185. Program administration.'';

     and
       (2) by striking the item relating to section 189.

     SEC. 1304. FACILITATION OF INTERNATIONAL REGISTRATION PLANS 
                   AND INTERNATIONAL FUEL TAX AGREEMENTS.

       (a) In General.--Chapter 317 of title 49, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 31708. Facilitation of international registration 
       plans and international fuel tax agreements

       ``The Secretary may provide assistance to any State that is 
     participating in the International Registration Plan and 
     International Fuel Tax Agreement, as provided in sections 
     31704 and 31705, respectively, and that serves as a base 
     jurisdiction for motor carriers that are domiciled in Mexico, 
     to assist the State with administrative costs resulting from 
     serving as a base jurisdiction for motor carriers from 
     Mexico.''.
       (b) Conforming Amendment.--The analysis for chapter 317 of 
     title 49, United States Code, is amended by adding at the end 
     the following:


[[Page 10841]]


``31708. Facilitation of international registration plans and 
              international fuel tax agreements.''.

     SEC. 1305. NATIONAL COMMISSION ON FUTURE REVENUE SOURCES TO 
                   SUPPORT THE HIGHWAY TRUST FUND AND FINANCE THE 
                   NEEDS OF THE SURFACE TRANSPORTATION SYSTEM.

       (a) Establishment.--There is established a commission to be 
     known as the ``National Commission on Future Revenue Sources 
     to Support the Highway Trust Fund and Finance the Needs of 
     the Surface Transportation System'' (referred to in this 
     section as the ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 11 
     members, of whom--
       (A) 3 members shall be appointed by the President;
       (B) 2 members shall be appointed by the Speaker of the 
     House of Representatives;
       (C) 2 members shall be appointed by the minority leader of 
     the House of Representatives;
       (D) 2 members shall be appointed by the majority leader of 
     the Senate; and
       (E) 2 members shall be appointed by the minority leader of 
     the Senate.
       (2) Qualifications.--Members appointed under paragraph (1) 
     shall have experience in or represent the interests of--
       (A) public finance, including experience in developing 
     State and local revenue resources;
       (B) surface transportation program administration;
       (C) organizations that use surface transportation 
     facilities;
       (D) academic research into related issues; or
       (E) other activities that provide unique perspectives on 
     current and future requirements for revenue sources to 
     support the Highway Trust Fund.
       (3) Date of appointments.--The appointment of a member of 
     the Commission shall be made not later than 120 days after 
     the date of establishment of the Commission.
       (4) Terms.--A member shall be appointed for the life of the 
     Commission.
       (5) Vacancies.--A vacancy on the Commission--
       (A) shall not affect the powers of the Commission; and
       (B) shall be filled in the same manner as the original 
     appointment was made.
       (6) Initial meeting.--Not later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold the initial meeting of the 
     Commission.
       (7) Meetings.--The Commission shall meet at the call of the 
     Chairperson.
       (8) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (9) Chairperson and vice chairperson.--The Commission shall 
     select a Chairperson and Vice Chairperson from among the 
     members of the Commission.
       (c) Duties.--
       (1) In general.--The Commission shall--
       (A) conduct a comprehensive study of alternatives to 
     replace or to supplement the fuel tax as the principal 
     revenue source to support the Highway Trust Fund and suggest 
     new or alternative sources of revenue to fund the needs of 
     the surface transportation system over at least the next 30 
     years;
       (B) conduct the study in a manner that builds on--
       (i) findings, conclusions, and recommendations of the 
     recent study conducted by the Transportation Research Board 
     on alternatives to the fuel tax to support highway program 
     financing; and
       (ii) other relevant prior research;
       (C) consult with the Secretary and the Secretary of the 
     Treasury in conducting the study to ensure that the views of 
     the Secretaries concerning essential attributes of Highway 
     Trust Fund revenue alternatives are considered;
       (D) consult with representatives of State Departments of 
     Transportation and metropolitan planning organizations and 
     other key interested stakeholders in conducting the study to 
     ensure that--
       (i) the views of the stakeholders on alternative revenue 
     sources to support State transportation improvement programs 
     are considered; and
       (ii) any recommended Federal financing strategy takes into 
     account State financial requirements; and
       (E) based on the study, make specific recommendations 
     regarding--
       (i) actions that should be taken to develop alternative 
     revenue sources to support the Highway Trust Fund; and
       (ii) the time frame for taking those actions.
       (2) Specific matters.--The study shall address 
     specifically--
       (A) the advantages and disadvantages of alternative revenue 
     sources to meet anticipated Federal surface transportation 
     financial requirements;
       (B) recommendations concerning the most promising revenue 
     sources to support long-term Federal surface transportation 
     financing requirements;
       (C) development of a broad transition strategy to move from 
     the current tax base to new funding mechanisms, including the 
     time frame for various components of the transition strategy;
       (D) recommendations for additional research that may be 
     needed to implement recommended alternatives; and
       (E) the extent to which revenues should reflect the 
     relative use of the highway system.
       (3) Related work.--To the maximum extent practicable, the 
     study shall build on related work that has been done by--
       (A) the Secretary of Transportation;
       (B) the Secretary of Energy;
       (C) the Transportation Research Board; and
       (D) other entities and persons.
       (4) Factors.--In developing recommendations under this 
     subsection, the Commission shall consider--
       (A) the ability to generate sufficient revenues from all 
     modes to meet anticipated long-term surface transportation 
     financing needs;
       (B) the roles of the various levels of government and the 
     private sector in meeting future surface transportation 
     financing needs;
       (C) administrative costs (including enforcement costs) to 
     implement each option;
       (D) the expected increase in non-taxed fuels and the impact 
     of taxing those fuels;
       (E) the likely technological advances that could ease 
     implementation of each option;
       (F) the equity and economic efficiency of each option;
       (G) the flexibility of different options to allow various 
     pricing alternatives to be implemented; and
       (H) potential compatibility issues with State and local tax 
     mechanisms under each alternative.
       (5) Report and recommendations.--Not later than September 
     30, 2007, the Commission shall submit to Congress a final 
     report that contains--
       (A) a detailed statement of the findings and conclusions of 
     the Commission; and
       (B) the recommendations of the Commission for such 
     legislation and administrative actions as the Commission 
     considers appropriate.
       (d) Powers.--
       (1) Hearings.--The Commission may hold such hearings, meet 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out this section.
       (2) Information from federal agencies.--
       (A) In general.--The Commission may secure directly from a 
     Federal agency such information as the Commission considers 
     necessary to carry out this section.
       (B) Provision of information.--On request of the 
     Chairperson of the Commission, the head of the agency shall 
     provide the information to the Commission.
       (3) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other agencies of the Federal Government.
       (4) Donations.--The Commission may accept, use, and dispose 
     of donations of services or property.
       (e) Commission Personnel Matters.--
       (1) Members.--A member of the Commission shall serve 
     without pay but shall be allowed travel expenses, including 
     per diem in lieu of subsistence, at rates authorized for an 
     employee of an agency under subchapter I of chapter 57 of 
     title 5, United States Code, while away from the home or 
     regular place of business of the member in the performance of 
     the duties of the Commission.
       (2) Contractor.--The Commission may contract with an 
     appropriate organization, agency, or entity to conduct the 
     study required under this section, under the strategic 
     guidance of the Commission.
       (3) Administrative support.--On the request of the 
     Commission, the Administrator of the Federal Highway 
     Administration shall provide to the Commission, on a 
     reimbursable basis, the administrative support and services 
     necessary for the Commission to carry out the duties of the 
     Commission under this section.
       (4) Detail of department personnel.--
       (A) In general.--On the request of the Commission, the 
     Secretary may detail, on a reimbursable basis, any of the 
     personnel of the Department to the Commission to assist the 
     Commission in carrying out the duties of the Commission under 
     this section.
       (B) Civil service status.--The detail of the employee shall 
     be without interruption or loss of civil service status or 
     privilege.
       (5) Cooperation.--The staff of the Secretary shall 
     cooperate with the Commission in the study required under 
     this section, including providing such nonconfidential data 
     and information as are necessary to conduct the study.
       (f) Relationship to Other Laws.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), funds made available to carry out this section shall be 
     available for obligation in the same manner as if the funds 
     were apportioned under chapter 1 of title 23, United States 
     Code.
       (2) Federal share.--The Federal share of the cost of the 
     study and the Commission under this section shall be 100 
     percent.
       (3) Availability.--Funds made available to carry out this 
     section shall remain available until expended.
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out this section 
     $3,000,000 for fiscal year 2004.
       (h) Termination.--
       (1) In general.--The Commission shall terminate on the date 
     that is 180 days after the date on which the Commission 
     submits the report of the Commission under subsection (c)(5).
       (2) Records.--Not later than the termination date for the 
     Commission, all records and papers of the Commission shall be 
     delivered to the Archivist of the United States for deposit 
     in the National Archives.

     SEC. 1306. STATE INFRASTRUCTURE BANKS.

       Section 1511(b)(1)(A) of the Transportation Equity Act for 
     the 21st Century (23 U.S.C. 181

[[Page 10842]]

     note; 112 Stat. 251) is amended by striking ``Missouri,'' and 
     all that follows through ``for the establishment'' and 
     inserting ``Missouri, Rhode Island, Texas, and any other 
     State that seeks such an agreement for the establishment''.

     SEC. 1307. PUBLIC-PRIVATE PARTNERSHIPS PILOT PROGRAM.

       Section 109(c) of title 23, United States Code, is amended 
     by adding at the end the following:
       ``(3) Public-private partnerships pilot program.--
       ``(A) In general.--The Secretary may undertake a pilot 
     program to demonstrate the advantages of public-private 
     partnerships for critical capital development projects, 
     including highway, bridge, and freight intermodal connector 
     projects authorized under this title.
       ``(B) Projects.--In carrying out the program, the Secretary 
     shall--
       ``(i) select not less than 10 qualified public-private 
     partnership projects that are authorized under applicable 
     State and local laws; and
       ``(ii) use funds made available to carry out the program to 
     provide to sponsors of the projects assistance for 
     development phase activities described in section 181(1)(A), 
     to enhance project delivery and reduce overall costs.''.

     SEC. 1308. WAGERING.

       (a) In General.--Chapter 35 of the Internal Revenue Code of 
     1986 is repealed.
       (b) Conforming Amendments.--
       (1) Section 4901 of the Internal Revenue Code is amended to 
     read as follows:

     ``SEC. 4901. PAYMENT OF TAX.

       ``All special taxes shall be imposed as of on the first day 
     of July in each year, or on commencing any trade or business 
     on which such tax is imposed. In the former case the tax 
     shall be reckoned for 1 year, and in the latter case it shall 
     be reckoned proportionately, from the first day of the month 
     in which the liability to a special tax commenced, to and 
     including the 30th day of June following.''.
       (2) Section 4903 of such Code is amended by striking ``, 
     other than the tax imposed by section 4411,''.
       (3) Section 4905 of such Code is amended to read as 
     follows:

     ``SEC. 4905. LIABILITY IN CASE OF DEATH OR CHANGE OF 
                   LOCATION.

       ``When any person who has paid the special tax for any 
     trade or business dies, his spouse or child, or executors or 
     administrators or other legal representatives, may occupy the 
     house or premises, and in like manner carry on, for the 
     residue of the term for which the tax is paid, the same trade 
     or business as the deceased before carried on, in the same 
     house and upon the same premises, without the payment of any 
     additional tax. When any person removes from the house or 
     premises for which any trade or business was taxed to any 
     other place, he may carry on the trade or business specified 
     in the register kept in the office of the official in charge 
     of the internal revenue district at the place to which he 
     removes, without the payment of any additional tax: Provided, 
     That all cases of death, change, or removal, as aforesaid, 
     with the name of the successor to any person deceased, or of 
     the person making such change or removal, shall be registered 
     with the Secretary, under regulations to be prescribed by the 
     Secretary.''.
       (4) Section 4907 of such Code is amended by striking ``, 
     except the tax imposed by section 4411,''.
       (5) Section 6103(i)(8)(A) of such Code is amended--
       (A) by striking ``, except to the extent authorized by 
     subsection (f) or (p)(6), disclose to any person, other than 
     another officer or employee of such office whose official 
     duties require such disclosure, any return or return 
     information described in section 4424(a) in a form which can 
     be associated with, or otherwise identify, directly or 
     indirectly, a particular taxpayer, nor shall such officer or 
     employee disclose any other'' and inserting ``disclose any'', 
     and
       (B) by striking ``such other officer'' and inserting ``such 
     officer''.
       (6) Section 6103(o) of such Code is amended to read as 
     follows:
       ``(o) Disclosure of Returns and Return Information With 
     Respect to Taxes Imposed by Subtitle E.--Returns and return 
     information with respect to taxes imposed by subtitle E 
     (relating to taxes on alcohol, tobacco, and firearms) shall 
     be open to inspection by or disclosure to officers and 
     employees of a Federal agency whose official duties require 
     such inspection or disclosure.''.
       (7)(A) Subchapter B of chapter 65 of such Code is amended 
     by striking section 6419 (relating to excise tax on 
     wagering).
       (B) The table of section of subchapter B of chapter 65 of 
     such Code is amended by striking the item relating to section 
     6419.
       (8) Section 6806 of such Code is amended by striking 
     ``under subchapter B of chapter 35, under subchapter B of 
     chapter 36,'' and inserting ``under subchapter B of chapter 
     36''.
       (9) Section 7012 of such Code is amended by striking 
     paragraph (2) and by redesignating paragraphs (3), (4), and 
     (5) as paragraphs (2), (3), and (4), respectively.
       (10)(A) Subchapter B of chapter 75 of such Code is amended 
     by striking section 7262 (relating to violation of 
     occupational tax laws relating to wagering-failure to pay 
     special tax).
       (B) The table of sections of subchapter B of chapter 75 of 
     such Code is amended by striking the item relating to section 
     7262.
       (11) Section 7272 of such Code, as amended by section 5244 
     of this Act, is amended to read as follows:

     ``SEC. 7272. PENALTY FOR FAILURE TO REGISTER.

       ``Any person (other than persons required to register under 
     subtitle E, or persons engaging in a trade or business on 
     which a special tax is imposed by such subtitle) who fails to 
     register with the Secretary as required by this title or by 
     regulations issued thereunder shall be liable to a penalty of 
     $50 ($10,000 in the case of a failure to register under 
     section 4101).''.
       (12) Section 7613(a) is amended by striking ``or other data 
     in the case of'' and all that follows and inserting ``or 
     other data in the case of alcohol, tobacco, and firearms 
     taxes, see subtitle E.''.
       (13) The table of chapters of subtitle D of such Code is 
     amended by striking the item relating to chapter 35.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to wagers placed 
     after the date of the enactment of this Act.
       (2) Special taxes.--In the case of amendments made by this 
     section relating to special taxes imposed by subchapter B of 
     chapter 35, the amendments made by this section shall take 
     effect on July 1, 2004.

                           Subtitle D--Safety

     SEC. 1401. HIGHWAY SAFETY IMPROVEMENT PROGRAM.

       (a) Safety Improvement.--
       (1) In general.--Section 148 of title 23, United States 
     Code, is amended to read as follows:

     ``Sec. 148. Highway safety improvement program

       ``(a) Definitions.--In this section:
       ``(1) Highway safety improvement program.--The term 
     `highway safety improvement program' means the program 
     carried out under this section.
       ``(2) Highway safety improvement project.--
       ``(A) In general.--The term `highway safety improvement 
     project' means a project described in the State strategic 
     highway safety plan that--
       ``(i) corrects or improves a hazardous road location or 
     feature; or
       ``(ii) addresses a highway safety problem.
       ``(B) Inclusions.--The term `highway safety improvement 
     project' includes a project for--
       ``(i) an intersection safety improvement;
       ``(ii) pavement and shoulder widening (including addition 
     of a passing lane to remedy an unsafe condition);
       ``(iii) installation of rumble strips or another warning 
     device, if the rumble strips or other warning devices do not 
     adversely affect the safety or mobility of bicyclists and 
     pedestrians;
       ``(iv) installation of a skid-resistant surface at an 
     intersection or other location with a high frequency of 
     accidents;
       ``(v) an improvement for pedestrian or bicyclist safety;
       ``(vi)(I) construction of any project for the elimination 
     of hazards at a railway-highway crossing that is eligible for 
     funding under section 130, including the separation or 
     protection of grades at railway-highway crossings;
       ``(II) construction of a railway-highway crossing safety 
     feature; or
       ``(III) the conduct of a model traffic enforcement activity 
     at a railway-highway crossing;
       ``(vii) construction of a traffic calming feature;
       ``(viii) elimination of a roadside obstacle;
       ``(ix) improvement of highway signage and pavement 
     markings;
       ``(x) installation of a priority control system for 
     emergency vehicles at signalized intersections;
       ``(xi) installation of a traffic control or other warning 
     device at a location with high accident potential;
       ``(xii) safety-conscious planning;
       ``(xiii) improvement in the collection and analysis of 
     crash data;
       ``(xiv) planning, integrated, interoperable emergency 
     communications, equipment, operational activities, or traffic 
     enforcement activities (including police assistance) relating 
     to workzone safety;
       ``(xv) installation of guardrails, barriers (including 
     barriers between construction work zones and traffic lanes 
     for the safety of motorists and workers), and crash 
     attenuators;
       ``(xvi) the addition or retrofitting of structures or other 
     measures to eliminate or reduce accidents involving vehicles 
     and wildlife; or
       ``(xvii) installation and maintenance of signs (including 
     fluorescent, yellow-green signs) at pedestrian-bicycle 
     crossings and in school zones.
       ``(3) Safety project under any other section.--
       ``(A) In general.--The term `safety project under any other 
     section' means a project carried out for the purpose of 
     safety under any other section of this title.
       ``(B) Inclusion.--The term `safety project under any other 
     section' includes a project to--
       ``(i) promote the awareness of the public and educate the 
     public concerning highway safety matters; or
       ``(ii) enforce highway safety laws.
       ``(4) State highway safety improvement program.--The term 
     `State highway safety improvement program' means projects or 
     strategies included in the State strategic highway safety 
     plan carried out as part of the State transportation 
     improvement program under section 135(f).
       ``(5) State strategic highway safety plan.--The term `State 
     strategic highway safety plan' means a plan developed by the 
     State transportation department that--
       ``(A) is developed after consultation with--
       ``(i) a highway safety representative of the Governor of 
     the State;

[[Page 10843]]

       ``(ii) regional transportation planning organizations and 
     metropolitan planning organizations, if any;
       ``(iii) representatives of major modes of transportation;
       ``(iv) State and local traffic enforcement officials;
       ``(v) persons responsible for administering section 130 at 
     the State level;
       ``(vi) representatives conducting Operation Lifesaver;
       ``(vii) representatives conducting a motor carrier safety 
     program under section 31104 or 31107 of title 49;
       ``(viii) motor vehicle administration agencies; and
       ``(ix) other major State and local safety stakeholders;
       ``(B) analyzes and makes effective use of State, regional, 
     or local crash data;
       ``(C) addresses engineering, management, operation, 
     education, enforcement, and emergency services elements 
     (including integrated, interoperable emergency 
     communications) of highway safety as key factors in 
     evaluating highway projects;
       ``(D) considers safety needs of, and high-fatality segments 
     of, public roads;
       ``(E) considers the results of State, regional, or local 
     transportation and highway safety planning processes;
       ``(F) describes a program of projects or strategies to 
     reduce or eliminate safety hazards;
       ``(G) is approved by the Governor of the State or a 
     responsible State agency; and
       ``(H) is consistent with the requirements of section 
     135(f).
       ``(b) Program.--
       ``(1) In general.--The Secretary shall carry out a highway 
     safety improvement program.
       ``(2) Purpose.--The purpose of the highway safety 
     improvement program shall be to achieve a significant 
     reduction in traffic fatalities and serious injuries on 
     public roads.
       ``(c) Eligibility.--
       ``(1) In general.--To obligate funds apportioned under 
     section 104(b)(5) to carry out this section, a State shall 
     have in effect a State highway safety improvement program 
     under which the State--
       ``(A) develops and implements a State strategic highway 
     safety plan that identifies and analyzes highway safety 
     problems and opportunities as provided in paragraph (2);
       ``(B) produces a program of projects or strategies to 
     reduce identified safety problems;
       ``(C) evaluates the plan on a regular basis to ensure the 
     accuracy of the data and priority of proposed improvements; 
     and
       ``(D) submits to the Secretary an annual report that--
       ``(i) describes, in a clearly understandable fashion, not 
     less than 5 percent of locations determined by the State, 
     using criteria established in accordance with paragraph 
     (2)(B)(ii), as exhibiting the most severe safety needs; and
       ``(ii) contains an assessment of--

       ``(I) potential remedies to hazardous locations identified;
       ``(II) estimated costs associated with those remedies; and
       ``(III) impediments to implementation other than cost 
     associated with those remedies.

       ``(2) Identification and analysis of highway safety 
     problems and opportunities.--As part of the State strategic 
     highway safety plan, a State shall--
       ``(A) have in place a crash data system with the ability to 
     perform safety problem identification and countermeasure 
     analysis;
       ``(B) based on the analysis required by subparagraph (A)--
       ``(i) identify hazardous locations, sections, and elements 
     (including roadside obstacles, railway-highway crossing 
     needs, and unmarked or poorly marked roads) that constitute a 
     danger to motorists, bicyclists, pedestrians, and other 
     highway users; and
       ``(ii) using such criteria as the State determines to be 
     appropriate, establish the relative severity of those 
     locations, in terms of accidents, injuries, deaths, traffic 
     volume levels, and other relevant data;
       ``(C) adopt strategic and performance-based goals that--
       ``(i) address traffic safety, including behavioral and 
     infrastructure problems and opportunities on all public 
     roads;
       ``(ii) focus resources on areas of greatest need; and
       ``(iii) are coordinated with other State highway safety 
     programs;
       ``(D) advance the capabilities of the State for traffic 
     records data collection, analysis, and integration with other 
     sources of safety data (such as road inventories) in a manner 
     that--
       ``(i) complements the State highway safety program under 
     chapter 4 and the commercial vehicle safety plan under 
     section 31102 of title 49;
       ``(ii) includes all public roads;
       ``(iii) identifies hazardous locations, sections, and 
     elements on public roads that constitute a danger to 
     motorists, bicyclists, pedestrians, and other highway users; 
     and
       ``(iv) includes a means of identifying the relative 
     severity of hazardous locations described in clause (iii) in 
     terms of accidents, injuries, deaths, and traffic volume 
     levels;
       ``(E)(i) determine priorities for the correction of 
     hazardous road locations, sections, and elements (including 
     railway-highway crossing improvements), as identified through 
     crash data analysis;
       ``(ii) identify opportunities for preventing the 
     development of such hazardous conditions; and
       ``(iii) establish and implement a schedule of highway 
     safety improvement projects for hazard correction and hazard 
     prevention; and
       ``(F)(i) establish an evaluation process to analyze and 
     assess results achieved by highway safety improvement 
     projects carried out in accordance with procedures and 
     criteria established by this section; and
       ``(ii) use the information obtained under clause (i) in 
     setting priorities for highway safety improvement projects.
       ``(d) Eligible Projects.--
       ``(1) In general.--A State may obligate funds apportioned 
     to the State under section 104(b)(5) to carry out--
       ``(A) any highway safety improvement project on any public 
     road or publicly owned bicycle or pedestrian pathway or 
     trail; or
       ``(B) as provided in subsection (e), for other safety 
     projects.
       ``(2) Use of other funding for safety.--
       ``(A) Effect of section.--Nothing in this section prohibits 
     the use of funds made available under other provisions of 
     this title for highway safety improvement projects.
       ``(B) Use of other funds.--States are encouraged to address 
     the full scope of their safety needs and opportunities by 
     using funds made available under other provisions of this 
     title (except a provision that specifically prohibits that 
     use).
       ``(e) Flexible Funding for States With a Strategic Highway 
     Safety Plan.--
       ``(1) In general.--To further the implementation of a State 
     strategic highway safety plan, a State may use up to 25 
     percent of the amount of funds made available under this 
     section for a fiscal year to carry out safety projects under 
     any other section as provided in the State strategic highway 
     safety plan.
       ``(2) Other transportation and highway safety plans.--
     Nothing in this subsection requires a State to revise any 
     State process, plan, or program in effect on the date of 
     enactment of this section.
       ``(f) Reports.--
       ``(1) In general.--A State shall submit to the Secretary a 
     report that--
       ``(A) describes progress being made to implement highway 
     safety improvement projects under this section;
       ``(B) assesses the effectiveness of those improvements; and
       ``(C) describes the extent to which the improvements funded 
     under this section contribute to the goals of--
       ``(i) reducing the number of fatalities on roadways;
       ``(ii) reducing the number of roadway-related injuries;
       ``(iii) reducing the occurrences of roadway-related 
     crashes;
       ``(iv) mitigating the consequences of roadway-related 
     crashes; and
       ``(v) reducing the occurrences of roadway-railroad grade 
     crossing crashes.
       ``(2) Contents; schedule.--The Secretary shall establish 
     the content and schedule for a report under paragraph (1).
       ``(3) Transparency.--The Secretary shall make reports under 
     subsection (c)(1)(D) available to the public through--
       ``(A) the Internet site of the Department; and
       ``(B) such other means as the Secretary determines to be 
     appropriate.
       ``(4) Discovery and admission into evidence of certain 
     reports, surveys, and information.--Notwithstanding any other 
     provision of law, reports, surveys, schedules, lists, or data 
     compiled or collected for any purpose directly relating to 
     paragraph (1) or subsection (c)(1)(D), or published by the 
     Secretary in accordance with paragraph (3), shall not be 
     subject to discovery or admitted into evidence in a Federal 
     or State court proceeding or considered for other purposes in 
     any action for damages arising from any occurrence at a 
     location identified or addressed in such reports, surveys, 
     schedules, lists, or other data.
       ``(g) Federal Share of Highway Safety Improvement 
     Projects.--Except as provided in sections 120 and 130, the 
     Federal share of the cost of a highway safety improvement 
     project carried out with funds made available under this 
     section shall be 90 percent.
       ``(h) Funds for Bicycle and Pedestrian Safety.--A State 
     shall allocate for bicycle and pedestrian improvements in the 
     State a percentage of the funds remaining after 
     implementation of sections 130(e) and 150, in an amount that 
     is equal to or greater than the percentage of all fatal 
     crashes in the States involving bicyclists and pedestrians.
       ``(i) Roadway Safety Improvements for Older Drivers and 
     Pedestrians.--For each of fiscal years 2004 through 2009, 
     $25,000,000 is authorized to be appropriated out of the 
     Highway Trust Fund (other than the Mass Transit Account) for 
     projects in all States to improve traffic signs and pavement 
     markings in a manner consistent with the recommendations 
     included in the publication of the Federal Highway 
     Administration entitled `Guidelines and Recommendations to 
     Accommodate Older Drivers and Pedestrians (FHWA-RD-01-103)' 
     and dated October 2001.''.
       (2) Allocations of apportioned funds.--Section 133(d) of 
     title 23, United States Code, is amended--
       (A) by striking paragraph (1);
       (B) by redesignating paragraphs (2) through (5) as 
     paragraphs (1) through (4), respectively;
       (C) in paragraph (2) (as redesignated by subparagraph 
     (B))--
       (i) in the first sentence of subparagraph (A)--

       (I) by striking ``subparagraphs (C) and (D)'' and inserting 
     ``subparagraph (C)''; and

[[Page 10844]]

       (II) by striking ``80 percent'' and inserting ``90 
     percent'';

       (ii) in subparagraph (B), by striking ``tobe'' and 
     inserting ``to be'';
       (iii) by striking subparagraph (C);
       (iv) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (C) and (D), respectively; and
       (v) in subparagraph (C) (as redesignated by clause (iv)), 
     by adding a period at the end; and
       (D) in paragraph (4)(A) (as redesignated by subparagraph 
     (B)), by striking ``paragraph (2)'' and inserting ``paragraph 
     (1)''.
       (3) Administration.--Section 133(e) of title 23, United 
     States Code, is amended in each of paragraphs (3)(B)(i), 
     (5)(A), and (5)(B) of subsection (e), by striking ``(d)(2)'' 
     each place it appears and inserting ``(d)(1)''.
       (4) Conforming amendments.--
       (A) The analysis for chapter 1 of title 23, United States 
     Code, is amended by striking the item relating to section 148 
     and inserting the following:

``148. Highway safety improvement program.''.

       (B) Section 104(g) of title 23, United States Code, is 
     amended in the first sentence by striking ``sections 130, 
     144, and 152 of this title'' and inserting ``sections 130 and 
     144''.
       (C) Section 126 of title 23, United States Code, is 
     amended--
       (i) in subsection (a), by inserting ``under'' after 
     ``State's apportionment''; and
       (ii) in subsection (b)--

       (I) in the first sentence, by striking ``the last sentence 
     of section 133(d)(1) or to section 104(f) or to section 
     133(d)(3)'' and inserting ``section 104(f) or 133(d)(2)''; 
     and
       (II) in the second sentence, by striking ``or 133(d)(2)''.

       (D) Sections 154, 164, and 409 of title 23, United States 
     Code, are amended by striking ``152'' each place it appears 
     and inserting ``148''.
       (b) Apportionment of Highway Safety Improvement Program 
     Funds.--Section 104(b) of title 23, United States Code, is 
     amended--
       (1) in the matter preceding paragraph (1), by inserting 
     after ``Improvement program,'' the following: ``the highway 
     safety improvement program,''; and
       (2) by adding at the end the following:
       ``(5) Highway safety improvement program.--
       ``(A) In general.--For the highway safety improvement 
     program, in accordance with the following formula:
       ``(i) 25 percent of the apportionments in the ratio that--

       ``(I) the total lane miles of Federal-aid highways in each 
     State; bears to
       ``(II) the total lane miles of Federal-aid highways in all 
     States.

       ``(ii) 40 percent of the apportionments in the ratio that--

       ``(I) the total vehicle miles traveled on lanes on Federal-
     aid highways in each State; bears to
       ``(II) the total vehicle miles traveled on lanes on 
     Federal-aid highways in all States.

       ``(iii) 35 percent of the apportionments in the ratio 
     that--

       ``(I) the estimated tax payments attributable to highway 
     users in each State paid into the Highway Trust Fund (other 
     than the Mass Transit Account) in the latest fiscal year for 
     which data are available; bears to
       ``(II) the estimated tax payments attributable to highway 
     users in all States paid into the Highway Trust Fund (other 
     than the Mass Transit Account) in the latest fiscal year for 
     which data are available.

       ``(B) Minimum apportionment.--Notwithstanding subparagraph 
     (A), each State shall receive a minimum of \1/2\ of 1 percent 
     of the funds apportioned under this paragraph.''.
       (c) Elimination of Hazards Relating to Railway-Highway 
     Crossings.--
       (1) Funds for railway-highway crossings.--Section 130(e) of 
     title 23, United States Code, is amended by inserting before 
     ``At least'' the following: ``For each fiscal year, at least 
     $200,000,000 of the funds authorized and expended under 
     section 148 shall be available for the elimination of hazards 
     and the installation of protective devices at railway-highway 
     crossings.''.
       (2) Biennial reports to congress.--Section 130(g) of title 
     23, United States Code, is amended in the third sentence--
       (A) by inserting ``and the Committee on Commerce, Science, 
     and Transportation,'' after ``Public Works''; and
       (B) by striking ``not later than April 1 of each year'' and 
     inserting ``every other year''.
       (3) Expenditure of funds.--Section 130 of title 23, United 
     States Code, is amended by adding at the end the following:
       ``(k) Expenditure of Funds.--Funds made available to carry 
     out this section shall be--
       ``(1) available for expenditure on compilation and analysis 
     of data in support of activities carried out under subsection 
     (g); and
       ``(2) apportioned in accordance with section 104(b)(5).''.
       (d) Transition.--
       (1) Implementation.--Except as provided in paragraph (2), 
     the Secretary shall approve obligations of funds apportioned 
     under section 104(b)(5) of title 23, United States Code (as 
     added by subsection (b)) to carry out section 148 of that 
     title, only if, not later than October 1 of the second fiscal 
     year after the date of enactment of this Act, a State has 
     developed and implemented a State strategic highway safety 
     plan as required under section 148(c) of that title.
       (2) Interim period.--
       (A) In general.--Before October 1 of the second fiscal year 
     after the date of enactment of this Act and until the date on 
     which a State develops and implements a State strategic 
     highway safety plan, the Secretary shall apportion funds to a 
     State for the highway safety improvement program and the 
     State may obligate funds apportioned to the State for the 
     highway safety improvement program under section 148 for 
     projects that were eligible for funding under sections 130 
     and 152 of that title, as in effect on the day before the 
     date of enactment of this Act.
       (B) No strategic highway safety plan.--If a State has not 
     developed a strategic highway safety plan by October 1 of the 
     second fiscal year after the date of enactment of this Act, 
     but demonstrates to the satisfaction of the Secretary that 
     progress is being made toward developing and implementing 
     such a plan, the Secretary shall continue to apportion funds 
     for 1 additional fiscal year for the highway safety 
     improvement program under section 148 of title 23, United 
     States Code, to the State, and the State may continue to 
     obligate funds apportioned to the State under this section 
     for projects that were eligible for funding under sections 
     130 and 152 of that title, as in effect on the day before the 
     date of enactment of this Act.
       (C) Penalty.--If a State has not adopted a strategic 
     highway safety plan by the date that is 2 years after the 
     date of enactment of this Act, funds made available to the 
     State under section 1101(6) shall be redistributed to other 
     States in accordance with section 104(b)(3) of title 23, 
     United States Code.

     SEC. 1402. OPERATION LIFESAVER.

       Section 104(d)(1) of title 23, United States Code, is 
     amended--
       (1) by striking ``subsection (b)(3)'' and inserting 
     ``subsection (b)(5)''; and
       (2) by striking ``$500,000'' and inserting ``$600,000''.

     SEC. 1403. LICENSE SUSPENSION.

       Section 164(a) of title 23, United States Code, is amended 
     by striking paragraph (3) and inserting the following:
       ``(3) License suspension.--The term `license suspension' 
     means--
       ``(A) the suspension of all driving privileges of an 
     individual for the duration of the suspension period; or
       ``(B) a combination of suspension of all driving privileges 
     of an individual for the first 90 days of the suspension 
     period, followed by reinstatement of limited driving 
     privileges requiring the individual to operate only motor 
     vehicles equipped with an ignition interlock system or other 
     device approved by the Secretary during the remainder of the 
     suspension period.''.

     SEC. 1404. BUS AXLE WEIGHT EXEMPTION.

       Section 1023 of the Intermodal Surface Transportation 
     Efficiency Act of 1991 (23 U.S.C. 127 note; 105 Stat. 1951) 
     is amended by striking subsection (h) and inserting the 
     following:
       ``(h) Over-the-Road Bus and Public Transit Vehicle 
     Exemption.--
       ``(1) In general.--The second sentence of section 127 of 
     title 23, United States Code (relating to axle weight 
     limitations for vehicles using the Dwight D. Eisenhower 
     System of Interstate and Defense Highways), shall not apply 
     to--
       ``(A) any over-the-road bus (as defined in section 301 of 
     the Americans With Disabilities Act of 1990 (42 U.S.C. 
     12181)); or
       ``(B) any vehicle that is regularly and exclusively used as 
     an intrastate public agency transit passenger bus.
       ``(2) State action.--No State or political subdivision of a 
     State, or any political authority of 2 or more States, shall 
     impose any axle weight limitation on any vehicle described in 
     paragraph (1) in any case in which such a vehicle is using 
     the Dwight D. Eisenhower System of Interstate and Defense 
     Highways.''.

     SEC. 1405. SAFE ROUTES TO SCHOOLS PROGRAM.

       (a) In General.--Subchapter I of chapter I of title 23, 
     United States Code, is amended by inserting after section 149 
     the following:

     ``Sec. 150. Safe routes to schools program

       ``(a) Definitions.--In this section:
       ``(1) Primary and secondary school.--The term `primary and 
     secondary school' means a school that provides education to 
     children in any of grades kindergarten through 12.
       ``(2) Program.--The term `program' means the safe routes to 
     schools program established under subsection (b).
       ``(3) Vicinity of a school.--The term `vicinity of a 
     school' means the area within 2 miles of a primary or 
     secondary school.
       ``(b) Establishment.--The Secretary shall establish and 
     carry out a safe routes to school program for the benefit of 
     children in primary and secondary schools in accordance with 
     this section.
       ``(c) Purposes.--The purposes of the program shall be--
       ``(1) to enable and to encourage children to walk and 
     bicycle to school;
       ``(2) to encourage a healthy and active lifestyle by making 
     walking and bicycling to school safer and more appealing 
     transportation alternatives; and
       ``(3) to facilitate the planning, development, and 
     implementation of projects and activities that will improve 
     safety in the vicinity of schools.
       ``(d) Eligible Recipients.--A State shall use amounts 
     apportioned under this section to provide financial 
     assistance to State, regional, and local agencies that 
     demonstrate an ability to meet the requirements of this 
     section.
       ``(e) Eligible Projects and Activities.--
       ``(1) Infrastructure-related projects.--
       ``(A) In general.--Amounts apportioned to a State under 
     this section may be used for the planning, design, and 
     construction of infrastructure-related projects to encourage 
     walking and bicycling to school, including--

[[Page 10845]]

       ``(i) sidewalk improvements;
       ``(ii) traffic calming and speed reduction improvements;
       ``(iii) pedestrian and bicycle crossing improvements;
       ``(iv) on-street bicycle facilities;
       ``(v) off-street bicycle and pedestrian facilities;
       ``(vi) secure bicycle parking facilities;
       ``(vii) traffic signal improvements; and
       ``(viii) pedestrian-railroad grade crossing improvements.
       ``(B) Location of projects.--Infrastructure-related 
     projects under subparagraph (A) may be carried out on--
       ``(i) any public road in the vicinity of a school; or
       ``(ii) any bicycle or pedestrian pathway or trail in the 
     vicinity of a school.
       ``(2) Behavioral activities.--
       ``(A) In general.--In addition to projects described in 
     paragraph (1), amounts apportioned to a State under this 
     section may be used for behavioral activities to encourage 
     walking and bicycling to school, including--
       ``(i) public awareness campaigns and outreach to press and 
     community leaders;
       ``(ii) traffic education and enforcement in the vicinity of 
     schools; and
       ``(iii) student sessions on bicycle and pedestrian safety, 
     health, and environment.
       ``(B) Allocation.--Of the amounts apportioned to a State 
     under this section for a fiscal year, not less than 10 
     percent shall be used for behavioral activities under this 
     paragraph.
       ``(f) Funding.--
       ``(1) Set aside.--Before apportioning amounts to carry out 
     section 148 for a fiscal year, the Secretary shall set aside 
     and use $70,000,000 to carry out this section.
       ``(2) Apportionment.--Amounts made available to carry out 
     this section shall be apportioned to States in accordance 
     with section 104(b)(5).
       ``(3) Administration of amounts.--Amounts apportioned to a 
     State under this section shall be administered by the State 
     transportation department.
       ``(4) Federal share.--Except as provided in sections 120 
     and 130, the Federal share of the cost of a project or 
     activity funded under this section shall be 90 percent.
       ``(5) Period of availability.--Notwithstanding section 
     118(b)(2), amounts apportioned under this section shall 
     remain available until expended.''.
       (b) Conforming Amendments.--The analysis for subchapter I 
     of chapter 1 of title 23, United States Code is amended by 
     inserting after the item relating to section 149 the 
     following:

``150. Safe routes to school program.''.

     SEC. 1406. PURCHASES OF EQUIPMENT.

       (a) In General.--Section 152 of title 23, United States 
     Code is amended to read as follows:

     ``Sec. 152. Purchases of equipment

       ``(a) In General.--Subject to subsection (b), a State 
     carrying out a project under this chapter shall purchase 
     device, tool or other equipment needed for the project only 
     after completing and providing a written analysis 
     demonstrating the cost savings associated with purchasing the 
     equipment compared with renting the equipment from a 
     qualified equipment rental provider before the project 
     commences
       ``(b) Applicability.--This section shall apply to--
       ``(1) earth moving, road machinery, and material handling 
     equipment, or any other item, with a purchase price in excess 
     of $75,000; and
       ``(2) aerial work platforms with a purchase price in excess 
     of $25,000.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     striking the item relating to section 152 and inserting the 
     following:

``152. Purchases of equipment.''.

     SEC. 1407. WORKZONE SAFETY.

       Section 358(b) of the National Highway System Designation 
     Act of 1995 (109 Stat. 625) is amended by adding at the end 
     the following:
       ``(7) Recommending all federally-assisted projects in 
     excess of $15,000,000 to enter into contracts only with work 
     zone safety services contractors, traffic control 
     contractors, and trench safety and shoring contractors that 
     carry general liability insurance in an amount not less than 
     $15,000,000.
       ``(8) Recommending federally-assisted projects the costs of 
     which exceed $15,000,000 to include work zone intelligent 
     transportation systems that are--
       ``(A) provided by a qualified vendor; and
       ``(B) monitored continuously.
       ``(9) Recommending federally-assisted projects to fully 
     fund not less than 5 percent of project costs for work zone 
     safety and temporary traffic control measures, in addition to 
     the cost of the project, which measures shall be provided by 
     a qualified work zone safety or traffic control provider.
       ``(10) Ensuring that any recommendation made under any of 
     paragraphs (7) through (9) provides for an exemption for 
     applicability to a State, with respect to a project or class 
     of projects, to the extent that a State notifies the 
     Secretary in writing that safety is not expected to be 
     adversely affected by nonapplication of the requirement to 
     the project or class of projects.''.

     SEC. 1408. WORKER INJURY PREVENTION AND FREE FLOW OF 
                   VEHICULAR TRAFFIC.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall promulgate regulations--
       (1) to decrease the probability of worker injury;
       (2) to maintain the free flow of vehicular traffic by 
     requiring workers whose duties place the workers on, or in 
     close proximity to, a Federal-aid highway (as defined in 
     section 101 of title 23, United States Code) to wear high-
     visibility clothing; and
       (3) to require such other worker-safety measures for 
     workers described in paragraph (2) as the Secretary 
     determines appropriate.

     SEC. 1409. IDENTITY AUTHENTICATION STANDARDS.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1815(a)), is 
     amended by adding at the end the following:

     ``Sec. 178. Identity authentication standards

       ``(a) Definition of Information-Based Identity 
     Authentication.--In this section, the term `information-based 
     identity authentication' means the determination of the 
     identity of an individual, through the comparison of 
     information provided by a person, with other information 
     pertaining to that individual with a system using scoring 
     models and algorithms.
       ``(b) Standards.--Not later than 180 days after the date of 
     enactment of this section, the Secretary, in consultation 
     with the Secretary of Homeland Security and the Federal Motor 
     Carrier Safety Administration, shall promulgate regulations 
     establishing minimum standards for State departments of motor 
     vehicles regarding the use of information-based identity 
     authentication to determine the identity of an applicant for 
     a commercial driver's license, or the renewal, transfer or 
     upgrading, of a commercial driver's license.
       ``(c) Minimum Standards.--The regulations shall, at a 
     minimum, require State departments of motor vehicles to 
     implement, and applicants for commercial driver's licenses, 
     (or the renewal, transfer, or upgrading of commercial 
     driver's licenses), to comply with, reasonable procedures for 
     operating an information-based identity authentication 
     program before issuing, renewing, transferring, or upgrading 
     a commercial driver's license.
       ``(d) Key Factors.--In promulgating regulations under this 
     section, the Secretary shall require that an information-
     based identity authentication program carried out under this 
     section establish processes that--
       ``(1) use multiple sources of matching information;
       ``(2) enable the measurement of the accuracy of the 
     determination of an applicant's identity;
       ``(3) support continuous auditing of compliance with 
     applicable laws, policies, and practices governing the 
     collection, use, and distribution of information in the 
     operation of the program; and
       ``(4) incorporate industry best practices to protect 
     significant privacy interests in the information used in the 
     program and the appropriate safeguarding of the storage of 
     the information.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter I of title 23, United States Code (as amended by 
     section 1815(b)), is amended by adding at the end the 
     following:

``178. Identity authentication standards.''.

     SEC. 1410. OPEN CONTAINER REQUIREMENTS.

       Section 154 of title 23, United States Code, is amended by 
     striking subsection (c) and inserting the following:
       ``(c) Transfer of Funds.--
       ``(1) In general.--The Secretary shall withhold the 
     applicable percentage for the fiscal year of the amount 
     required to be apportioned for Federal-aid highways to any 
     State under each of paragraphs (1), (3), and (4) of section 
     104(b), if a State has not enacted or is not enforcing a 
     provision described in subsection (b), as follows:

The applicable percentage is:
2 percent.r 2008.......................................................
2 percent.r 2009.......................................................
2 percent.r 2010.......................................................
2 percent.r 2011 and each subsequent fiscal year.......................
       ``(2) Restoration.--If (during the 4-year period beginning 
     on the date the apportionment for any State is reduced in 
     accordance with this subsection) the Secretary determines 
     that the State has enacted and is enforcing a provision 
     described in subsection (b), the apportionment of the State 
     shall be increased by an amount equal to the amount of the 
     reduction made during the 4-year period.''.

             Subtitle E--Environmental Planning and Review

                   CHAPTER 1--TRANSPORTATION PLANNING

     SEC. 1501. INTEGRATION OF NATURAL RESOURCE CONCERNS INTO 
                   STATE AND METROPOLITAN TRANSPORTATION PLANNING.

       (a) Metropolitan Planning.--Section 134(f) of title 23, 
     United States Code, is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (D)--
       (i) by inserting after ``environment'' the following: 
     ``(including the protection of habitat, water quality, and 
     agricultural and forest land, while minimizing invasive 
     species)''; and
       (ii) by inserting before the semicolon the following: 
     ``(including minimizing adverse health effects from mobile 
     source air pollution and promoting the linkage of the 
     transportation and development goals of the metropolitan 
     area)''; and
       (B) in subparagraph (G), by inserting ``and efficient use'' 
     after ``preservation'';
       (2) by redesignating paragraph (2) as paragraph (3); and

[[Page 10846]]

       (3) by inserting after paragraph (1) the following:
       ``(2) Selection of factors.--After soliciting and 
     considering any relevant public comments, the metropolitan 
     planning organization shall determine which of the factors 
     described in paragraph (1) are most appropriate for the 
     metropolitan area to consider.''.
       (b) Statewide Planning.--Section 135(c) of title 23, United 
     States Code, is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (D)--
       (i) by inserting after ``environment'' the following: 
     ``(including the protection of habitat, water quality, and 
     agricultural and forest land, while minimizing invasive 
     species)''; and
       (ii) by inserting before the semicolon the following: 
     ``(including minimizing adverse health effects from mobile 
     source air pollution and promoting the linkage of the 
     transportation and development goals of the State)''; and
       (B) in subparagraph (G), by inserting ``and efficient use'' 
     after ``preservation'';
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Selection of projects and strategies.--After 
     soliciting and considering any relevant public comments, the 
     State shall determine which of the projects and strategies 
     described in paragraph (1) are most appropriate for the State 
     to consider.''.

     SEC. 1502. CONSULTATION BETWEEN TRANSPORTATION AGENCIES AND 
                   RESOURCE AGENCIES IN TRANSPORTATION PLANNING.

       (a) In General.--Section 134(g) of title 23, United States 
     Code, is amended--
       (1) in paragraph (2)--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (B) by inserting after subparagraph (A) the following:
       ``(B) Mitigation activities.--
       ``(i) In general.--A long-range transportation plan shall 
     include a discussion of--

       ``(I) types of potential habitat, hydrological, and 
     environmental mitigation activities that may assist in 
     compensating for loss of habitat, wetland, and other 
     environmental functions; and
       ``(II) potential areas to carry out these activities, 
     including a discussion of areas that may have the greatest 
     potential to restore and maintain the habitat types and 
     hydrological or environmental functions affected by the plan.

       ``(ii) Consultation.--The discussion shall be developed in 
     consultation with Federal, State, and tribal wildlife, land 
     management, and regulatory agencies.'';
       (2) by redesignating paragraphs (4), (5), and (6) as 
     paragraphs (5), (6), and (7), respectively; and
       (3) by inserting after paragraph (3) the following:
       ``(4) Consultation.--
       ``(A) In general.--In each metropolitan area, the 
     metropolitan planning organization shall consult, as 
     appropriate, with State and local agencies responsible for 
     land use management, natural resources, environmental 
     protection, conservation, and historic preservation 
     concerning the development of a long-range transportation 
     plan.
       ``(B) Issues.--The consultation shall involve--
       ``(i) comparison of transportation plans with State 
     conservation plans or with maps, if available;
       ``(ii) comparison of transportation plans to inventories of 
     natural or historic resources, if available; or
       ``(iii) consideration of areas where wildlife crossing 
     structures may be needed to ensure connectivity between 
     wildlife habitat linkage areas.''.
       (b) Improved Consultation During State Transportation 
     Planning.--
       (1) In general.--Section 135(e)(2) of title 23, United 
     States Code, is amended by adding at the end the following:
       ``(D) Consultation, comparison, and consideration.--
       ``(i) In general.--The long-range transportation plan shall 
     be developed, as appropriate, in consultation with State and 
     local agencies responsible for--

       ``(I) land use management;
       ``(II) natural resources;
       ``(III) environmental protection;
       ``(IV) conservation; and
       ``(V) historic preservation.

       ``(ii) Comparison and consideration.--Consultation under 
     clause (i) shall involve--

       ``(I) comparison of transportation plans to State 
     conservation plans or maps, if available;
       ``(II) comparison of transportation plans to inventories of 
     natural or historic resources, if available; or
       ``(III) consideration of areas where wildlife crossing 
     structures may be needed to ensure connectivity between 
     wildlife habitat linkage areas.''.

       (2) Additional requirements.--Section 135(e) of title 23, 
     United States Code, is amended--
       (A) by redesignating paragraphs (4) and (5) as paragraphs 
     (6) and (7), respectively; and
       (B) by inserting after paragraph (3) the following:
       ``(4) Mitigation activities.--
       ``(A) In general.--A long-range transportation plan shall 
     include a discussion of--
       ``(i) types of potential habitat, hydrological, and 
     environmental mitigation activities that may assist in 
     compensating for loss of habitat, wetlands, and other 
     environmental functions; and
       ``(ii) potential areas to carry out these activities, 
     including a discussion of areas that may have the greatest 
     potential to restore and maintain the habitat types and 
     hydrological or environmental functions affected by the plan.
       ``(B) Consultation.--The discussion shall be developed in 
     consultation with Federal, State, and tribal wildlife, land 
     management, and regulatory agencies.
       ``(5) Transportation strategies.--A long-range 
     transportation plan shall identify transportation strategies 
     necessary to efficiently serve the mobility needs of 
     people.''.

     SEC. 1503. INTEGRATION OF NATURAL RESOURCE CONCERNS INTO 
                   TRANSPORTATION PROJECT PLANNING.

       Section 109(c)(2) of title 23, United States Code, is 
     amended--
       (1) by striking ``consider the results'' and inserting 
     ``consider--
       ``(A) the results'';
       (2) by striking the period at the end and inserting a 
     semicolon; and
       (3) by adding at the end the following:
       ``(B) the publication entitled `Flexibility in Highway 
     Design' of the Federal Highway Administration;
       ``(C) `Eight Characteristics of Process to Yield Excellence 
     and the Seven Qualities of Excellence in Transportation 
     Design' developed by the conference held during 1998 entitled 
     `Thinking Beyond the Pavement National Workshop on 
     Integrating Highway Development with Communities and the 
     Environment while Maintaining Safety and Performance'; and
       ``(D) any other material that the Secretary determines to 
     be appropriate.''.

     SEC. 1504. PUBLIC INVOLVEMENT IN TRANSPORTATION PLANNING AND 
                   PROJECTS.

       (a) Metropolitan Planning.--
       (1) Participation by interested parties.--Section 134(g)(5) 
     of title 23, United States Code (as redesignated by section 
     1502(a)(1)), is amended--
       (A) by striking ``Before approving'' and inserting the 
     following:
       ``(A) In general.--Before approving''; and
       (B) by adding at the end the following:
       ``(B) Methods.--In carrying out subparagraph (A), the 
     metropolitan planning organization shall, to the maximum 
     extent practicable--
       ``(i) hold any public meetings at convenient and accessible 
     locations and times;
       ``(ii) employ visualization techniques to describe plans; 
     and
       ``(iii) make public information available in electronically 
     accessible format and means, such as the World Wide Web.''.
       (2) Publication of long-range transportation plans.--
     Section 134(g)(6)(i) of title 23, United States Code (as 
     redesignated by section 1502(a)(1)), is amended by inserting 
     before the semicolon the following: ``, including (to the 
     maximum extent practicable) in electronically accessible 
     formats and means such as the World Wide Web''.
       (b) Statewide Planning.--
       (1) Participation by interested parties.--Section 135(e)(3) 
     of title 23, United States Code, is amended by striking 
     subparagraph (B) and inserting the following:
       ``(B) Methods.--In carrying out subparagraph (A), the State 
     shall, to the maximum extent practicable--
       ``(i) hold any public meetings at convenient and accessible 
     locations and times;
       ``(ii) employ visualization techniques to describe plans; 
     and
       ``(iii) make public information available in electronically 
     accessible format and means, such as the World Wide Web.''.
       (2) Publication of long-range transportation plans.--
     Section 135(e) of title 23, United States Code (as amended by 
     section 1502(b)(2)), is amended by adding at the end the 
     following:
       ``(8) Publication of long-range transportation plans.--Each 
     long-range transportation plan prepared by a State shall be 
     published or otherwise made available, including (to the 
     maximum extent practicable) in electronically accessible 
     formats and means, such as the World Wide Web.''.

     SEC. 1505. PROJECT MITIGATION.

       (a) Mitigation for National Highway System Projects.--
     Section 103(b)(6)(M) of title 23, United States Code, is 
     amended--
       (1) by inserting ``(i)'' after ``(M); and
       (2) by adding at the end the following:
       ``(ii) State habitat, streams, and wetlands mitigation 
     efforts under section 155.''.
       (b) Mitigation for Surface Transportation Program 
     Projects.--Section 133(b)(11) of title 23, United States 
     Code, is amended--
       (1) by inserting ``(A)'' after ``(11)''; and
       (2) by adding at the end the following:
       ``(B) State habitat, streams, and wetlands mitigation 
     efforts under section 155.''.
       (c) State Habitat, Streams, and Wetlands Mitigation 
     Funds.--Section 155 of title 23, United States Code, is 
     amended to read as follows:

     ``Sec. 155. State habitat, streams, and wetlands mitigation 
       funds

       ``(a) Establishment.--A State should establish a habitat, 
     streams, and wetlands mitigation fund (referred to in this 
     section as a `State fund').
       ``(b) Purpose.--The purpose of a State fund is to encourage 
     efforts for habitat, streams, and wetlands mitigation in 
     advance of or in conjunction with highway or transit projects 
     to--
       ``(1) ensure that the best habitat, streams, and wetland 
     mitigation sites now available are used; and

[[Page 10847]]

       ``(2) accelerate transportation project delivery by making 
     high-quality habitat, streams, and wetland mitigation credits 
     available when needed.
       ``(c) Funds.--A State may deposit into a State fund part of 
     the funds apportioned to the State under--
       ``(1) section 104(b)(1) for the National Highway System; 
     and
       ``(2) section 104(b)(3) for the surface transportation 
     program.
       ``(d) Use.--
       ``(1) In general.--Amounts deposited in a State fund shall 
     be used (in a manner consistent with this section) for 
     habitat, streams, or wetlands mitigation related to 1 or more 
     projects funded under this title, including a project under 
     the transportation improvement program of the State developed 
     under section 135(f).
       ``(2) Endangered species.--In carrying out this section, a 
     State and cooperating agency shall give consideration to 
     mitigation projects, on-site or off-site, that restore and 
     preserve the best available sites to conserve biodiversity 
     and habitat for--
       ``(A) Federal or State listed threatened or endangered 
     species of plants and animals; and
       ``(B) plant or animal species warranting listing as 
     threatened or endangered, as determined by the Secretary of 
     the Interior in accordance with section 4(b)(3)(B) of the 
     Endangered Species Act of 1973 (16 U.S.C. 1533(b)(3)(B)).
       ``(3) Mitigation in closed basins.--
       ``(A) In general.--A State may use amounts deposited in the 
     State fund for projects to protect existing roadways from 
     anticipated flooding of a closed basin lake, including--
       ``(i) construction--

       ``(I) necessary for the continuation of roadway services 
     and the impoundment of water, as the State determines to be 
     appropriate; or
       ``(II) for a grade raise to permanently restore a roadway 
     the use of which is lost or reduced, or could be lost or 
     reduced, as a result of an actual or predicted water level 
     that is within 3 feet of causing inundation of the roadway in 
     a closed lake basin;

       ``(ii) monitoring, studies, evaluations, design, or 
     preliminary engineering relating to construction; and
       ``(iii) monitoring and evaluations relating to proposed 
     construction.
       ``(B) Reimbursement.--The Secretary may permit a State that 
     expends funds under subparagraph (A) to be reimbursed for the 
     expenditures through the use of amounts made available under 
     section 125(c)(1).
       ``(e) Consistency With Applicable Requirements.--
     Contributions from the State fund to mitigation efforts may 
     occur in advance of project construction only if the efforts 
     are consistent with all applicable requirements of Federal 
     law (including regulations).''.
       (d) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     striking the item relating to section 155 and inserting the 
     following:

``155. State habitat, streams, and wetlands mitigation funds.''.

         CHAPTER 2--TRANSPORTATION PROJECT DEVELOPMENT PROCESS

     SEC. 1511. TRANSPORTATION PROJECT DEVELOPMENT PROCESS.

       (a) In General.--Chapter 3 of title 23, United States Code 
     (as amended by section 1203(a)), is amended by inserting 
     after section 325 the following:

     ``Sec. 326. Transportation project development process

       ``(a) Definitions.--In this section:
       ``(1) Agency.--The term `agency' means any agency, 
     department, or other unit of Federal, State, local, or 
     federally recognized tribal government.
       ``(2) Environmental impact statement.--The term 
     `environmental impact statement' means a detailed statement 
     of the environmental impacts of a project required to be 
     prepared under the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.).
       ``(3) Environmental review process.--
       ``(A) In general.--The term `environmental review process' 
     means the process for preparing, for a project--
       ``(i) an environmental impact statement; or
       ``(ii) any other document or analysis required to be 
     prepared under the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.)
       ``(B) Inclusions.--The term `environmental review process' 
     includes the process for and completion of any environmental 
     permit, approval, review, or study required for a project 
     under any Federal law other than the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(4) Project.--The term `project' means any highway or 
     transit project that requires the approval of the Secretary.
       ``(5) Project sponsor.--The term `project sponsor' means an 
     agency or other entity (including any private or public-
     private entity), that seeks approval of the Secretary for a 
     project.
       ``(6) State transportation department.--The term `State 
     transportation department' means any statewide agency of a 
     State with responsibility for transportation.
       ``(b) Process.--
       ``(1) Lead agency.--
       ``(A) In general.--The Department of Transportation shall 
     be the lead Federal agency in the environmental review 
     process for a project.
       ``(B) Joint lead agencies.--Nothing in this section 
     precludes another agency from being a joint lead agency in 
     accordance with regulations under the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(C) Concurrence of project sponsor.--The lead agency may 
     carry out the environmental review process in accordance with 
     this section only with the concurrence of the project 
     sponsor.
       ``(2) Request for process.--
       ``(A) In general.--A project sponsor may request that the 
     lead agency carry out the environmental review process for a 
     project or group of projects in accordance with this section.
       ``(B) Grant of request; public notice.--The lead agency 
     shall--
       ``(i) grant a request under subparagraph (A); and
       ``(ii) provide public notice of the request.
       ``(3) Effective date.--The environmental review process 
     described in this section may be applied to a project only 
     after the date on which public notice is provided under 
     subparagraph (B)(ii).
       ``(c) Roles and Responsibility of Lead Agency.--With 
     respect to the environmental review process for any project, 
     the lead agency shall have authority and responsibility to--
       ``(A) identify and invite cooperating agencies in 
     accordance with subsection (d);
       ``(B) develop an agency coordination plan with review, 
     schedule, and timelines in accordance with subsection (e);
       ``(C) determine the purpose and need for the project in 
     accordance with subsection (f);
       ``(D) determine the range of alternatives to be considered 
     in accordance with subsection (g);
       ``(E) convene dispute-avoidance and decision resolution 
     meetings and related efforts in accordance with subsection 
     (h);
       ``(F) take such other actions as are necessary and proper, 
     within the authority of the lead agency, to facilitate the 
     expeditious resolution of the environmental review process 
     for the project; and
       ``(G) prepare or ensure that any required environmental 
     impact statement or other document required to be completed 
     under the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.) is completed in accordance with this 
     section and applicable Federal law.
       ``(d) Roles and Responsibilities of Cooperating Agencies.--
       ``(1) In general.--With respect to a project, each Federal 
     agency shall carry out any obligations of the Federal agency 
     in the environmental review process in accordance with this 
     section and applicable Federal law.
       ``(2) Invitation.--
       ``(A) In general.--The lead agency shall--
       ``(i) identify, as early as practicable in the 
     environmental review process for a project, any other 
     agencies that may have an interest in the project, 
     including--

       ``(I) agencies with jurisdiction over environmentally-
     related matters that may affect the project or may be 
     required by law to conduct an environmental-related 
     independent review or analysis of the project or determine 
     whether to issue an environmental-related permit, license, or 
     approval for the project; and
       ``(II) agencies with special expertise relevant to the 
     project;

       ``(ii) invite the agencies identified in clause (i) to 
     become participating agencies in the environmental review 
     process for that project; and
       ``(iii) grant requests to become cooperating agencies from 
     agencies not originally invited.
       ``(B) Responses.--The deadline for receipt of a response 
     from an agency that receives an invitation under subparagraph 
     (A)(ii)--
       ``(i) shall be 30 days after the date of receipt by the 
     agency of the invitation; but
       ``(ii) may be extended by the lead agency for good cause.
       ``(3) Declining of invitations.--A Federal agency that is 
     invited by the lead agency to participate in the 
     environmental review process for a project shall be 
     designated as a cooperating agency by the lead agency, unless 
     the invited agency informs the lead agency in writing, by the 
     deadline specified in the invitation, that the invited 
     agency--
       ``(A) has no jurisdiction or authority with respect to the 
     project;
       ``(B) has no expertise or information relevant to the 
     project; and
       ``(C) does not intend to submit comments on the project.
       ``(4) Effect of designation.--Designation as a cooperating 
     agency under this subsection shall not imply that the 
     cooperating agency--
       ``(A) supports a proposed project; or
       ``(B) has any jurisdiction over, or special expertise with 
     respect to evaluation of, the project.
       ``(5) Designations for categories of projects.--
       ``(A) In general.--The Secretary may invite other agencies 
     to become cooperating agencies for a category of projects.
       ``(B) Designation.--An agency may be designated as a 
     cooperating agency for a category of projects only with the 
     consent of the agency.
       ``(6) Concurrent reviews.--Each Federal agency shall, to 
     the maximum extent practicable--
       ``(A) carry out obligations of the Federal agency under 
     other applicable law concurrently, and in conjunction, with 
     the review required under the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.), unless doing so would 
     impair the ability of the Federal agency to carry out those 
     obligations; and
       ``(B) formulate and implement administrative, policy, and 
     procedural mechanisms to enable the agency to ensure 
     completion of the environmental review process in a timely, 
     coordinated, and environmentally responsible manner.
       ``(e) Development of Flexible Process and Timeline.--

[[Page 10848]]

       ``(1) Coordination plan.--
       ``(A) In general.--The lead agency shall establish a 
     coordination plan, which may be incorporated into a 
     memorandum of understanding, to coordinate agency and public 
     participation in and comment on the environmental review 
     process for a project or category of projects.
       ``(B) Workplan.--
       ``(i) In general.--The lead agency shall develop, as part 
     of the coordination plan, a workplan for completing the 
     collection, analysis, and evaluation of baseline data and 
     future impacts modeling necessary to complete the 
     environmental review process, including any data, analyses, 
     and modeling necessary for related permits, approvals, 
     reviews, or studies required for the project under other 
     laws.
       ``(ii) Consultation.--In developing the workplan under 
     clause (i), the lead agency shall consult with--

       ``(I) each cooperating agency for the project;
       ``(II) the State in which the project is located; and
       ``(III) if the State is not the project sponsor, the 
     project sponsor.

       ``(C) Schedule.--
       ``(i) In general.--The lead agency shall establish as part 
     of the coordination plan, after consultation with each 
     cooperating agency for the project and with the State in 
     which the project is located (and, if the State is not the 
     project sponsor, with the project sponsor), a schedule for 
     completion of the environmental review process for the 
     project.
       ``(ii) Factors for consideration.--In establishing the 
     schedule, the lead agency shall consider factors such as--

       ``(I) the responsibilities of cooperating agencies under 
     applicable laws;
       ``(II) resources available to the cooperating agencies;
       ``(III) overall size and complexity of a project;
       ``(IV) the overall schedule for and cost of a project; and
       ``(V) the sensitivity of the natural and historic resources 
     that could be affected by the project.

       ``(D) Consistency with other time periods.--A schedule 
     under subparagraph (C) shall be consistent with any other 
     relevant time periods established under Federal law.
       ``(E) Modification.--The lead agency may--
       ``(i) lengthen a schedule established under subparagraph 
     (C) for good cause; and
       ``(ii) shorten a schedule only with the concurrence of the 
     affected cooperating agencies.
       ``(F) Dissemination.--A copy of a schedule under 
     subparagraph (C), and of any modifications to the schedule, 
     shall be--
       ``(i) provided to all cooperating agencies and to the State 
     transportation department of the State in which the project 
     is located (and, if the State is not the project sponsor, to 
     the project sponsor); and
       ``(ii) made available to the public.
       ``(2) Comments and timelines.--
       ``(A) In general.--A schedule established under paragraph 
     (1)(C) shall include--
       ``(i) opportunities for comment, deadline for receipt of 
     any comments submitted, deadline for lead agency response to 
     comments; and
       ``(ii) except as otherwise provided under paragraph (1)--

       ``(I) an opportunity to comment by agencies and the public 
     on a draft or final environmental impact statement for a 
     period of not more than 60 days longer than the minimum 
     period required under the National Environmental Policy Act 
     of 1969 (42 U.S.C. 4321 et seq.); and
       ``(II) for all other comment periods established by the 
     lead agency for agency or public comments in the 
     environmental review process, a period of not more than the 
     longer of--

       ``(aa) 30 days after the final day of the minimum period 
     required under Federal law (including regulations), if 
     available; or
       ``(bb) if a minimum period is not required under Federal 
     law (including regulations), 30 days.
       ``(B) Extension of comment periods.--The lead agency may 
     extend a period of comment established under this paragraph 
     for good cause.
       ``(C) Late comments.--A comment concerning a project 
     submitted under this paragraph after the date of termination 
     of the applicable comment period or extension of a comment 
     period shall not be eligible for consideration by the lead 
     agency unless the lead agency or project sponsor determines 
     there was good cause for the delay or the lead agency is 
     required to consider significant new circumstances or 
     information in accordance with sections 1501.7 and 1502.9 of 
     title 40, Code of Federal Regulations.
       ``(D) Deadlines for decisions under other laws.--In any 
     case in which a decision under any Federal law relating to a 
     project (including the issuance or denial of a permit or 
     license) is required to be made by the later of the date that 
     is 180 days after the date on which the Secretary made all 
     final decisions of the lead agency with respect to the 
     project, or 180 days after the date on which an application 
     was submitted for the permit or license, the Secretary shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives--
       ``(i) as soon as practicable after the 180-day period, an 
     initial notice of the failure of the Federal agency to make 
     the decision; and
       ``(ii) every 60 day thereafter until such date as all 
     decisions of the Federal agency relating to the project have 
     been made by the Federal agency, an additional notice that 
     describes the number of decisions of the Federal agency that 
     remain outstanding as of the date of the additional notice.
       ``(3) Involvement of the public.--Nothing in this 
     subsection shall reduce any time period provided for public 
     comment in the environmental review process under existing 
     Federal law (including a regulation).
       ``(f) Development of Project Purpose and Need Statement.--
       ``(1) In general.--With respect to the environmental review 
     process for a project, the purpose and need for the project 
     shall be defined in accordance with this subsection.
       ``(2) Authority.--The lead agency shall define the purpose 
     and need for a project, including the transportation 
     objectives and any other objectives intended to be achieved 
     by the project.
       ``(3) Involvement of cooperating agencies and the public.--
     Before determining the purpose and need for a project, the 
     lead agency shall solicit for 30 days, and consider, any 
     relevant comments on the draft statement of purpose and need 
     for a proposed project received from the public and 
     cooperating agencies.
       ``(4) Effect on other reviews.--For the purpose of 
     compliance with the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.) and any other law requiring an 
     agency that is not the lead agency to determine or consider a 
     project purpose or project need, such an agency acting, 
     permitting, or approving under, or otherwise applying, 
     Federal law with respect to a project shall adopt the 
     determination of purpose and need for the project made by the 
     lead agency.
       ``(5) Savings.--Nothing in this subsection preempts or 
     interferes with any power, jurisdiction, responsibility, or 
     authority of an agency under applicable law (including 
     regulations) with respect to a project.
       ``(6) Contents.--
       ``(A) In general.--The statement of purpose and need shall 
     include a clear statement of the objectives that the proposed 
     project is intended to achieve.
       ``(B) Effect on existing standards.--Nothing in this 
     subsection shall alter existing standards for defining the 
     purpose and need of a project.
       ``(7) Factors to consider.--The lead agency may determine 
     that any of the following factors and documents are 
     appropriate for consideration in determining the purpose of 
     and need for a project:
       ``(A) Transportation plans and related planning documents 
     developed through the statewide and metropolitan 
     transportation planning process under sections 134 and 135.
       ``(B) Land use plans adopted by units of State, local, or 
     tribal government (or, in the case of Federal land, by the 
     applicable Federal land management agencies).
       ``(C) Economic development plans adopted by--
       ``(i) units of State, local, or tribal government; or
       ``(ii) established economic development planning 
     organizations or authorities.
       ``(D) Environmental protection plans, including plans for 
     the protection or treatment of--
       ``(i) air quality;
       ``(ii) water quality and runoff;
       ``(iii) habitat needs of plants and animals;
       ``(iv) threatened and endangered species;
       ``(v) invasive species;
       ``(vi) historic properties; and
       ``(vii) other environmental resources.
       ``(E) Any publicly available plans or policies relating to 
     the national defense, national security, or foreign policy of 
     the United States.
       ``(g) Development of Project Alternatives.--
       ``(1) In general.--With respect to the environmental review 
     process for a project, the alternatives shall be determined 
     in accordance with this subsection.
       ``(2) Authority.--The lead agency shall determine the 
     alternatives to be considered for a project.
       ``(3) Involvement of cooperating agencies and the public.--
       ``(A) In general.--Before determining the alternatives for 
     a project, the lead agency shall solicit for 30 days and 
     consider any relevant comments on the proposed alternatives 
     received from the public and cooperating agencies.
       ``(B) Alternatives.--The lead agency shall consider--
       ``(i) alternatives that meet the purpose and need of the 
     project; and
       ``(ii) the alternative of no action.
       ``(C) Effect on existing standards.--Nothing in this 
     subsection shall alter the existing standards for determining 
     the range of alternatives.
       ``(4) Effect on other reviews.--Any other agency acting 
     under or applying Federal law with respect to a project shall 
     consider only the alternatives determined by the lead agency.
       ``(5) Savings.--Nothing in this subsection preempts or 
     interferes with any power, jurisdiction, responsibility, or 
     authority of an agency under applicable law (including 
     regulations) with respect to a project.
       ``(6) Factors to consider.--The lead agency may determine 
     that any of the following factors and documents are 
     appropriate for consideration in determining the alternatives 
     for a project:
       ``(A) The overall size and complexity of the proposed 
     action.
       ``(B) The sensitivity of the potentially affected 
     resources.
       ``(C) The overall schedule and cost of the project.
       ``(D) Transportation plans and related planning documents 
     developed through the statewide and metropolitan 
     transportation planning process under sections 134 and 135 of 
     title 23 of the United States Code.

[[Page 10849]]

       ``(E) Land use plans adopted by units of State, local, or 
     tribal government (or, in the case of Federal land, by the 
     applicable Federal land management agencies).
       ``(F) Economic development plans adopted by--
       ``(i) units of State, local, or tribal government; or
       ``(ii) established economic development planning 
     organizations or authorities.
       ``(G) environmental protection plans, including plans for 
     the protection or treatment of--
       ``(i) air quality;
       ``(ii) water quality and runoff;
       ``(iii) habitat needs of plants and animals;
       ``(iv) threatened and endangered species;
       ``(v) invasive species;
       ``(vi) historic properties; and
       ``(vii) other environmental resources.
       ``(H) Any publicly available plans or policies relating to 
     the national defense, national security, or foreign policy of 
     the United States.
       ``(h) Prompt Issue Identification and Resolution Process.--
       ``(1) In general.--The lead agency, the project sponsor, 
     and the cooperating agencies shall work cooperatively, in 
     accordance with this section, to identify and resolve issues 
     that could--
       ``(A) delay completion of the environmental review process; 
     or
       ``(B) result in denial of any approvals required for the 
     project under applicable laws.
       ``(2) Lead agency responsibilities.--
       ``(A) In general.--The lead agency, with the assistance of 
     the project sponsor, shall make information available to the 
     cooperating agencies, as early as practicable in the 
     environmental review process, regarding--
       ``(i) the environmental and socioeconomic resources located 
     within the project area; and
       ``(ii) the general locations of the alternatives under 
     consideration.
       ``(B) Basis for information.--Information about resources 
     in the project area may be based on existing data sources, 
     including geographic information systems mapping.
       ``(3) Cooperating agency responsibilities.--
       ``(A) In general.--Based on information received from the 
     lead agency, cooperating agencies shall promptly identify to 
     the lead agency any major issues of concern regarding the 
     potential environmental or socioeconomic impacts of a 
     project.
       ``(B) Major issues of concern.--A major issue of concern 
     referred to in subparagraph (A) may include any issue that 
     could substantially delay or prevent an agency from granting 
     a permit or other approval that is needed for a project, as 
     determined by a cooperating agency.
       ``(4) Issue resolution.--On identification of a major issue 
     of concern under paragraph (3), or at any time upon the 
     request of a project sponsor or the Governor of a State, the 
     lead agency shall promptly convene a meeting with 
     representatives of each of the relevant cooperating agencies, 
     the project sponsor, and the Governor to address and resolve 
     the issue.
       ``(5) Notification.--If a resolution of a major issue of 
     concern under paragraph (4) cannot be achieved by the date 
     that is 30 days after the date on which a meeting under that 
     paragraph is convened, the lead agency shall provide 
     notification of the failure to resolve the major issue of 
     concern to--
       ``(A) the heads of all cooperating agencies;
       ``(B) the project sponsor;
       ``(C) the Governor involved;
       ``(D) the Committee on Environment and Public Works of the 
     Senate; and
       ``(E) the Committee on Transportation and Infrastructure of 
     the House of Representatives.
       ``(i) Performance Measurement.--
       ``(1) Progress reports.--The Secretary shall establish a 
     program to measure and report on progress toward improving 
     and expediting the planning and environmental review process.
       ``(2) Minimum requirements.--The program shall include, at 
     a minimum--
       ``(A) the establishment of criteria for measuring 
     consideration of--
       ``(i) State and metropolitan planning, project planning, 
     and design criteria; and
       ``(ii) environmental processing times and costs;
       ``(B) the collection of data to assess performance based on 
     the established criteria; and
       ``(C) the annual reporting of the results of the 
     performance measurement studies.
       ``(3) Involvement of the public and cooperating agencies.--
       ``(A) In general.--The Secretary shall biennially conduct a 
     survey of agencies participating in the environmental review 
     process under this section to assess the expectations and 
     experiences of each surveyed agency with regard to the 
     planning and environmental review process for projects 
     reviewed under this section.
       ``(B) Public participation.--In conducting the survey, the 
     Secretary shall solicit comments from the public.
       ``(j) Assistance to Affected Federal and State Agencies.--
       ``(1) In general.--The Secretary may approve a request by a 
     State or recipient to provide funds made available under this 
     title for a highway project, or made available under chapter 
     53 of title 49 for a mass transit project, to agencies 
     participating in the coordinated environmental review process 
     established under this section in order to provide the 
     resources necessary to meet any time limits established under 
     this section.
       ``(2) Amounts.--Such requests under paragraph (1) shall be 
     approved only--
       ``(A) for such additional amounts as the Secretary 
     determines are necessary for the affected Federal and State 
     agencies to meet the time limits for environmental review; 
     and
       ``(B) if those time limits are less than the customary time 
     necessary for that review.
       ``(k) Judicial Review and Savings Clause.--
       ``(1) Judicial review.--Nothing in this section shall 
     affect the reviewability of any final Federal agency action 
     in any United States district court or State court.
       ``(2) Savings clause.--Nothing in this section shall 
     affect--
       ``(A) the applicability of the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.) or any other 
     Federal environmental statute; or
       ``(B) the responsibility of any Federal officer to comply 
     with or enforce such a statute.''.
       (b) Conforming Amendments.--
       (1) The analysis for chapter 3 of title 23, United States 
     Code, is amended by inserting after the item relating to 
     section 325 (as added by section 1203(f)) the following:

``326. Transportation project development process.''.

       (2) Section 1309 of the Transportation Equity Act for the 
     21st Century (112 Stat. 232) is repealed.

     SEC. 1512. ASSUMPTION OF RESPONSIBILITY FOR CATEGORICAL 
                   EXCLUSIONS.

       (a) In General.--Chapter 3 of title 23, United States Code 
     (as amended by section 1511(a)), is amended by inserting 
     after section 326 the following:

     ``Sec. 327. Assumption of responsibility for categorical 
       exclusions

       ``(a) Categorical Exclusion Determinations.--
       ``(1) In general.--The Secretary may assign, and a State 
     may assume, responsibility for determining whether certain 
     designated activities are included within classes of action 
     identified in regulation by the Secretary that are 
     categorically excluded from requirements for environmental 
     assessments or environmental impact statements pursuant to 
     regulations promulgated by the Council on Environmental 
     Quality under part 1500 of title 40, Code of Federal 
     Regulations (as in effect on October 1, 2003).
       ``(2) Scope of authority.--A determination described in 
     paragraph (1) shall be made by a State in accordance with 
     criteria established by the Secretary and only for types of 
     activities specifically designated by the Secretary.
       ``(3) Criteria.--The criteria under paragraph (2) shall 
     include provisions for public availability of information 
     consistent with section 552 of title 5 and the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(b) Other Applicable Federal Laws.--
       ``(1) In general.--If a State assumes responsibility under 
     subsection (a), the Secretary may also assign and the State 
     may assume all or part of the responsibilities of the 
     Secretary for environmental review, consultation, or other 
     related actions required under any Federal law applicable to 
     activities that are classified by the Secretary as 
     categorical exclusions, with the exception of government-to-
     government consultation with Indian tribes, subject to the 
     same procedural and substantive requirements as would be 
     required if that responsibility were carried out by the 
     Secretary.
       ``(2) Sole responsibility.--A State that assumes 
     responsibility under paragraph (1) with respect to a Federal 
     law shall be solely responsible and solely liable for 
     complying with and carrying out that law, and the Secretary 
     shall have no such responsibility or liability.
       ``(c) Memoranda of Understanding.--
       ``(1) In general.--The Secretary and the State, after 
     providing public notice and opportunity for comment, shall 
     enter into a memorandum of understanding setting forth the 
     responsibilities to be assigned under this section and the 
     terms and conditions under which the assignments are made, 
     including establishment of the circumstances under which the 
     Secretary would reassume responsibility for categorical 
     exclusion determinations.
       ``(2) Term.--A memorandum of understanding--
       ``(A) shall have term of not more than 3 years; and
       ``(B) shall be renewable.
       ``(3) Acceptance of jurisdiction.--In a memorandum of 
     understanding, the State shall consent to accept the 
     jurisdiction of the Federal courts for the compliance, 
     discharge, and enforcement of any responsibility of the 
     Secretary that the State assumes.
       ``(4) Monitoring.--The Secretary shall--
       ``(A) monitor compliance by the State with the memorandum 
     of understanding and the provision by the State of financial 
     resources to carry out the memorandum of understanding; and
       ``(B) take into account the performance by the State when 
     considering renewal of the memorandum of understanding.
       ``(d) Termination.--The Secretary may terminate any 
     assumption of responsibility under a memorandum of 
     understanding on a determination that the State is not 
     adequately carrying out the responsibilities assigned to the 
     State.
       ``(e) State Agency Deemed To Be Federal Agency.--A State 
     agency that is assigned a responsibility under a memorandum 
     of understanding shall be deemed to be a Federal agency for 
     the purposes of the Federal law under which the 
     responsibility is exercised.''.
       (b) Conforming Amendment.--The analysis for chapter 3 of 
     title 23, United States Code (as amended by section 1511(b)), 
     is amended by inserting after the item relating to section 
     326 the following:

``327. Assumption of responsibility for categorical exclusions.''.

[[Page 10850]]



     SEC. 1513. SURFACE TRANSPORTATION PROJECT DELIVERY PILOT 
                   PROGRAM.

       (a) In General.--Chapter 3 of title 23, United States Code 
     (as amended by section 1512(a)), is amended by inserting 
     after section 327 the following:

     ``Sec. 328. Surface transportation project delivery pilot 
       program

       ``(a) Establishment.--
       ``(1) In general.--The Secretary shall carry out a surface 
     transportation project delivery pilot program (referred to in 
     this section as the `program').
       ``(2) Assumption of responsibility.--
       ``(A) In general.--Subject to the other provisions of this 
     section, with the written agreement of the Secretary and a 
     State, which may be in the form of a memorandum of 
     understanding, the Secretary may assign, and the State may 
     assume, the responsibilities of the Secretary with respect to 
     1 or more highway projects within the State under the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.).
       ``(B) Additional responsibility.--If a State assumes 
     responsibility under subparagraph (A)--
       ``(i) the Secretary may assign to the State, and the State 
     may assume, all or part of the responsibilities of the 
     Secretary for environmental review, consultation, or other 
     action required under any Federal environmental law 
     pertaining to the review or approval of a specific project; 
     but
       ``(ii) the Secretary may not assign--

       ``(I) responsibility for any conformity determination 
     required under section 176 of the Clean Air Act (42 U.S.C. 
     7506); or
       ``(II) any responsibility imposed on the Secretary by 
     section 134 or 135.

       ``(C) Procedural and substantive requirements.--A State 
     shall assume responsibility under this section subject to the 
     same procedural and substantive requirements as would apply 
     if that responsibility were carried out by the Secretary.
       ``(D) Federal responsibility.--Any responsibility of the 
     Secretary not explicitly assumed by the State by written 
     agreement under this section shall remain the responsibility 
     of the Secretary.
       ``(E) No effect on authority.--Nothing in this section 
     preempts or interferes with any power, jurisdiction, 
     responsibility, or authority of an agency, other than the 
     Department of Transportation, under applicable law (including 
     regulations) with respect to a project.
       ``(b) State Participation.--
       ``(1) Number of participating states.--The Secretary may 
     permit not more than 5 States (including the State of 
     Oklahoma) to participate in the program.
       ``(2) Application.--Not later than 270 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations that establish requirements relating to 
     information required to be contained in any application of a 
     State to participate in the program, including, at a 
     minimum--
       ``(A) the projects or classes of projects for which the 
     State anticipates exercising the authority that may be 
     granted under the program;
       ``(B) verification of the financial resources necessary to 
     carry out the authority that may be granted under the 
     program; and
       ``(C) evidence of the notice and solicitation of public 
     comment by the State relating to participation of the State 
     in the program, including copies of comments received from 
     that solicitation.
       ``(3) Public notice.--
       ``(A) In general.--Each State that submits an application 
     under this subsection shall give notice of the intent of the 
     State to participate in the program not later than 30 days 
     before the date of submission of the application.
       ``(B) Method of notice and solicitation.--The State shall 
     provide notice and solicit public comment under this 
     paragraph by publishing the complete application of the State 
     in accordance with the appropriate public notice law of the 
     State.
       ``(4) Selection criteria.--The Secretary may approve the 
     application of a State under this section only if--
       ``(A) the regulatory requirements under paragraph (2) have 
     been met;
       ``(B) the Secretary determines that the State has the 
     capability, including financial and personnel, to assume the 
     responsibility; and
       ``(C) the head of the State agency having primary 
     jurisdiction over highway matters enters into a written 
     agreement with the Secretary described in subsection (c).
       ``(5) Other federal agency views.--If a State applies to 
     assume a responsibility of the Secretary that would have 
     required the Secretary to consult with another Federal 
     agency, the Secretary shall solicit the views of the Federal 
     agency before approving the application.
       ``(c) Written Agreement.--A written agreement under this 
     section shall--
       ``(1) be executed by the Governor or the top-ranking 
     transportation official in the State who is charged with 
     responsibility for highway construction;
       ``(2) be in such form as the Secretary may prescribe;
       ``(3) provide that the State--
       ``(A) agrees to assume all or part of the responsibilities 
     of the Secretary described in subsection (a);
       ``(B) expressly consents, on behalf of the State, to accept 
     the jurisdiction of the Federal courts for the compliance, 
     discharge, and enforcement of any responsibility of the 
     Secretary assumed by the State;
       ``(C) certifies that State laws (including regulations) are 
     in effect that--
       ``(i) authorize the State to take the actions necessary to 
     carry out the responsibilities being assumed; and
       ``(ii) are comparable to section 552 of title 5, including 
     providing that any decision regarding the public availability 
     of a document under those State laws is reviewable by a court 
     of competent jurisdiction; and
       ``(D) agrees to maintain the financial resources necessary 
     to carry out the responsibilities being assumed.
       ``(d) Jurisdiction.--
       ``(1) In general.--The United States district courts shall 
     have exclusive jurisdiction over any civil action against a 
     State for failure to carry out any responsibility of the 
     State under this section.
       ``(2) Legal standards and requirements.--A civil action 
     under paragraph (1) shall be governed by the legal standards 
     and requirements that would apply in such a civil action 
     against the Secretary had the Secretary taken the actions in 
     question.
       ``(3) Intervention.--The Secretary shall have the right to 
     intervene in any action described in paragraph (1).
       ``(e) Effect of Assumption of Responsibility.--A State that 
     assumes responsibility under subsection (a)(2) shall be 
     solely responsible and solely liable for carrying out, in 
     lieu of the Secretary, the responsibilities assumed under 
     subsection (a)(2), until the program is terminated as 
     provided in subsection (i).
       ``(f) Limitations on Agreements.--Nothing in this section 
     permits a State to assume any rulemaking authority of the 
     Secretary under any Federal law.
       ``(g) Audits.--
       ``(1) In general.--To ensure compliance by a State with any 
     agreement of the State under subsection (c)(1) (including 
     compliance by the State with all Federal laws for which 
     responsibility is assumed under subsection (a)(2)), for each 
     State participating in the program under this section, the 
     Secretary shall conduct--
       ``(A) semiannual audits during each of the first 2 years of 
     State participation; and
       ``(B) annual audits during each subsequent year of State 
     participation.
       ``(2) Public availability and comment.--
       ``(A) In general.--An audit conducted under paragraph (1) 
     shall be provided to the public for comment.
       ``(B) Response.--Not later than 60 days after the date on 
     which the period for public comment ends, the Secretary shall 
     respond to public comments received under subparagraph (A).
       ``(h) Report to Congress.--The Secretary shall submit to 
     Congress an annual report that describes the administration 
     of the program.
       ``(i) Termination.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     program shall terminate on the date that is 6 years after the 
     date of enactment of this section.
       ``(2) Termination by secretary.--The Secretary may 
     terminate the participation of any State in the program if--
       ``(A) the Secretary determines that the State is not 
     adequately carrying out the responsibilities assigned to the 
     State;
       ``(B) the Secretary provides to the State--
       ``(i) notification of the determination of noncompliance; 
     and
       ``(ii) a period of at least 30 days during which to take 
     such corrective action as the Secretary determines is 
     necessary to comply with the applicable agreement; and
       ``(C) the State, after the notification and period provided 
     under subparagraph (B), fails to take satisfactory corrective 
     action, as determined by Secretary.''.
       (b) Conforming Amendment.--The analysis for chapter 3 of 
     title 23, United States Code (as amended by section 1512(b)), 
     is amended by inserting after the item relating to section 
     327 the following:

``328. Surface transportation project delivery pilot program.''.

     SEC. 1514. PARKS, RECREATION AREAS, WILDLIFE AND WATERFOWL 
                   REFUGES, AND HISTORIC SITES.

       (a) Programs and Projects With de Minimis Impacts.--
       (1) Title 23.--Section 138 of title 23, United States Code, 
     is amended--
       (A) in the first sentence, by striking ``It is hereby'' and 
     inserting the following:
       ``(a) Declaration of Policy.--It is''; and
       (B) by adding at the end the following:
       ``(b) De Minimis Impacts.--
       ``(1) Requirements.--
       ``(A) In general.--The requirements of this section shall 
     be considered to be satisfied with respect to an area 
     described in paragraph (2) or (3) if the Secretary 
     determines, in accordance with this subsection, that a 
     transportation program or project will have a de minimis 
     impact on the area.
       ``(B) Criteria.--In making any determination under this 
     subsection, the Secretary shall consider to be part of a 
     transportation program or project any avoidance, 
     minimization, mitigation, or enhancement measures that are 
     required to be implemented as a condition of approval of the 
     transportation program or project.
       ``(2) Historic sites.--With respect to historic sites, the 
     Secretary may make a finding of de minimis impact only if--
       ``(A) the Secretary has determined, in accordance with the 
     consultation process required under section 106 of the 
     National Historic Preservation Act (16 U.S.C. 470f), that--
       ``(i) the transportation program or project will have no 
     adverse effect on the historic site; or

[[Page 10851]]

       ``(ii) there will be no historic properties affected by the 
     transportation program or project;
       ``(B) the finding of the Secretary has received written 
     concurrence from the applicable State historic preservation 
     officer or tribal historic preservation officer (and from the 
     Advisory Council on Historic Preservation, if participating 
     in the consultation); and
       ``(C) the finding of the Secretary has been developed in 
     consultation with parties consulting as part of the process 
     referred to in subparagraph (A).
       ``(3) Parks, recreation areas, and wildlife and waterfowl 
     refuges.--With respect to parks, recreation areas, and 
     wildlife or waterfowl refuges, the Secretary may make a 
     finding of de minimis impact only if--
       ``(A) the Secretary has determined, in accordance with the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) (including public notice and opportunity for public 
     review and comment), that the transportation program or 
     project will not adversely affect the activities, features, 
     and attributes of the park, recreation area, or wildlife or 
     waterfowl refuge eligible for protection under this section; 
     and
       ``(B) the finding of the Secretary has received concurrence 
     from the officials with jurisdiction over the park, 
     recreation area, or wildlife or waterfowl refuge.''.
       (2) Title 49.--Section 303 of title 49, United States Code, 
     is amended--
       (A) by striking ``(c) The Secretary'' and inserting the 
     following:
       ``(c) Approval of Programs and Projects.--Subject to 
     subsection (d), the Secretary''; and
       (B) by adding at the end the following:
       ``(d) De Minimis Impacts.--
       ``(1) Requirements.--
       ``(A) In general.--The requirements of this section shall 
     be considered to be satisfied with respect to an area 
     described in paragraph (2) or (3) if the Secretary 
     determines, in accordance with this subsection, that a 
     transportation program or project will have a de minimis 
     impact on the area.
       ``(B) Criteria.--In making any determination under this 
     subsection, the Secretary shall consider to be part of a 
     transportation program or project any avoidance, 
     minimization, mitigation, or enhancement measures that are 
     required to be implemented as a condition of approval of the 
     transportation program or project.
       ``(2) Historic sites.--With respect to historic sites, the 
     Secretary may make a finding of de minimis impact only if--
       ``(A) the Secretary has determined, in accordance with the 
     consultation process required under section 106 of the 
     National Historic Preservation Act (16 U.S.C. 470f), that--
       ``(i) the transportation program or project will have no 
     adverse effect on the historic site; or
       ``(ii) there will be no historic properties affected by the 
     transportation program or project;
       ``(B) the finding of the Secretary has received written 
     concurrence from the applicable State historic preservation 
     officer or tribal historic preservation officer (and from the 
     Advisory Council on Historic Preservation, if participating 
     in the consultation); and
       ``(C) the finding of the Secretary has been developed in 
     consultation with parties consulting as part of the process 
     referred to in subparagraph (A).
       ``(3) Parks, recreation areas, and wildlife and waterfowl 
     refuges.--With respect to parks, recreation areas, and 
     wildlife or waterfowl refuges, the Secretary may make a 
     finding of de minimis impact only if--
       ``(A) the Secretary has determined, in accordance with the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) (including public notice and opportunity for public 
     review and comment), that the transportation program or 
     project will not adversely affect the activities, features, 
     and attributes of the park, recreation area, or wildlife or 
     waterfowl refuge eligible for protection under this section; 
     and
       ``(B) the finding of the Secretary has received concurrence 
     from the officials with jurisdiction over the park, 
     recreation area, or wildlife or waterfowl refuge.''.
       (b) Clarification of Existing Standards.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall (in consultation 
     with affected agencies and interested parties) promulgate 
     regulations that clarify the factors to be considered and the 
     standards to be applied in determining the prudence and 
     feasibility of alternatives under section 138 of title 23 and 
     section 303 of title 49, United States Code.
       (2) Requirements.--The regulations--
       (A) shall clarify the application of the legal standards to 
     a variety of different types of transportation programs and 
     projects depending on the circumstances of each case; and
       (B) may include, as appropriate, examples to facilitate 
     clear and consistent interpretation by agency decisionmakers.
       (c) Implementation Study.--
       (1) In general.--The Secretary and the Transportation 
     Research Board of the National Academy of Sciences shall 
     jointly conduct a study on the implementation of this section 
     and the amendments made by this section.
       (2) Components.--In conducting the study, the Secretary and 
     the Transportation Research Board shall evaluate--
       (A) the processes developed under this section and the 
     amendments made by this section and the efficiencies that may 
     result;
       (B) the post-construction effectiveness of impact 
     mitigation and avoidance commitments adopted as part of 
     projects conducted under this section and the amendments made 
     by this section; and
       (C) the quantity of projects with impacts that are 
     considered de minimis under this section and the amendments 
     made by this section, including information on the location, 
     size, and cost of the projects.
       (3) Report requirement.--The Secretary and the 
     Transportation Research Board shall prepare--
       (A) not earlier than the date that is 4 years after the 
     date of enactment of this Act, a report on the results of the 
     study conducted under this subsection; and
       (B) not later than September 30, 2009, an update on the 
     report required under subparagraph (A).
       (4) Report recipients.--The Secretary and the 
     Transportation Research Board shall--
       (A) submit the report and update required under paragraph 
     (3) to--
       (i) the appropriate committees of Congress;
       (ii) the Secretary of the Interior; and
       (iii) the Advisory Council on Historic Preservation; and
       (B) make the report and update available to the public.

     SEC. 1515. REGULATIONS.

       Except as provided in section 1513, not later than 1 year 
     after the date of enactment of this Act, the Secretary shall 
     promulgate regulations necessary to implement the amendments 
     made by chapter 1 and this chapter.

                        CHAPTER 3--MISCELLANEOUS

     SEC. 1521. CRITICAL REAL PROPERTY ACQUISITION.

       Section 108 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(d) Critical Real Property Acquisition.--
       ``(1) In general.--Subject to paragraph (2), funds 
     apportioned to a State under this title may be used to pay 
     the costs of acquiring any real property that is determined 
     to be critical under paragraph (2) for a project proposed for 
     funding under this title.
       ``(2) Reimbursement.--The Federal share of the costs 
     referred to in paragraph (1) shall be eligible for 
     reimbursement out of funds apportioned to a State under this 
     title if, before the date of acquisition, the Secretary 
     determines that--
       ``(A) the property is offered for sale on the open market;
       ``(B) in acquiring the property, the State will comply with 
     the Uniform Relocation Assistance and Real Property 
     Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.); 
     and
       ``(C) immediate acquisition of the property is critical 
     because--
       ``(i) based on an appraisal of the property, the value of 
     the property is increasing significantly;
       ``(ii) there is an imminent threat of development or 
     redevelopment of the property; and
       ``(iii) the property is necessary for the implementation of 
     the goals stated in the proposal for the project.
       ``(3) Applicable law.--An acquisition of real property 
     under this section shall be considered to be an exempt 
     project under section 176 of the Clean Air Act (42 U.S.C. 
     7506).
       ``(4) Environmental review.--
       ``(A) In general.--A project proposed to be conducted under 
     this title shall not be conducted on property acquired under 
     paragraph (1) until all required environmental reviews for 
     the project have been completed.
       ``(B) Effect on consideration of project alternatives.--The 
     number of critical acquisitions of real property associated 
     with a project shall not affect the consideration of project 
     alternatives during the environmental review process.
       ``(5) Proceeds from the sale or lease of real property.--
     Section 156(c) shall not apply to the sale, use, or lease of 
     any real property acquired under paragraph (1).''.

     SEC. 1522. PLANNING CAPACITY BUILDING INITIATIVE.

       Section 104 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(m) Planning Capacity Building Initiative.--
       ``(1) In general.--The Secretary shall carry out a planning 
     capacity building initiative to support enhancements in 
     transportation planning to--
       ``(A) strengthen the processes and products of metropolitan 
     and statewide transportation planning under this title;
       ``(B) enhance tribal capacity to conduct joint 
     transportation planning under chapter 2;
       ``(C) participate in the metropolitan and statewide 
     transportation planning programs under this title; and
       ``(D) increase the knowledge and skill level of 
     participants in metropolitan and statewide transportation.
       ``(2) Priority.--The Secretary shall give priority to 
     planning practices and processes that support--
       ``(A) the transportation elements of homeland security 
     planning, including--
       ``(i) training and best practices relating to emergency 
     evacuation;
       ``(ii) developing materials to assist areas in coordinating 
     emergency management and transportation officials; and
       ``(iii) developing training on how planning organizations 
     may examine security issues;
       ``(B) performance-based planning, including--
       ``(i) data and data analysis technologies to be shared with 
     States, metropolitan planning organizations, local 
     governments, and nongovernmental organizations that--

       ``(I) participate in transportation planning;
       ``(II) use the data and data analysis to engage in 
     metropolitan, tribal, or statewide transportation planning;

[[Page 10852]]

       ``(III) involve the public in the development of 
     transportation plans, projects, and alternative scenarios; 
     and
       ``(IV) develop strategies to avoid, minimize, and mitigate 
     the impacts of transportation facilities and projects; and

       ``(ii) improvement of the quality of congestion management 
     systems, including the development of--

       ``(I) a measure of congestion;
       ``(II) a measure of transportation system reliability; and
       ``(III) a measure of induced demand;

       ``(C) safety planning, including--
       ``(i) development of State strategic safety plans 
     consistent with section 148;
       ``(ii) incorporation of work zone safety into planning; and
       ``(iii) training in the development of data systems 
     relating to highway safety;
       ``(D) operations planning, including--
       ``(i) developing training of the integration of 
     transportation system operations and management into the 
     transportation planning process; and
       ``(ii) training and best practices relating to regional 
     concepts of operations;
       ``(E) freight planning, including--
       ``(i) modeling of freight at a regional and statewide 
     level; and
       ``(ii) techniques for engaging the freight community with 
     the planning process;
       ``(F) air quality planning, including--
       ``(i) assisting new and existing nonattainment and 
     maintenance areas in developing the technical capacity to 
     perform air quality conformity analysis;
       ``(ii) providing training on areas such as modeling and 
     data collection to support air quality planning and analysis;
       ``(iii) developing concepts and techniques to assist areas 
     in meeting air quality performance timeframes; and
       ``(iv) developing materials to explain air quality issues 
     to decisionmakers and the public; and
       ``(G) integration of environment and planning.
       ``(3) Use of funds.--The Secretary shall use amounts made 
     available under paragraph (4) to make grants to, or enter 
     into contracts, cooperative agreements, and other 
     transactions with, a Federal agency, State agency, local 
     agency, federally recognized Indian tribal government or 
     tribal consortium, authority, association, nonprofit or for-
     profit corporation, or institution of higher education for 
     research, program development, information collection and 
     dissemination, and technical assistance.
       ``(4) Set-aside.--
       ``(A) In general.--On October 1 of each fiscal year, of the 
     funds made available under subsection (a), the Secretary 
     shall set aside $4,000,000 to carry out this subsection.
       ``(B) Federal share.--The Federal share of the cost of an 
     activity carried out using funds made available under 
     subparagraph (A) shall be 100 percent.
       ``(C) Availability.--Funds made available under 
     subparagraph (A) shall remain available until expended.''.

                        Subtitle F--Environment

     SEC. 1601. ENVIRONMENTAL RESTORATION AND POLLUTION ABATEMENT; 
                   CONTROL OF INVASIVE PLANT SPECIES AND 
                   ESTABLISHMENT OF NATIVE SPECIES.

       (a) Modification to NHS/STP for Environmental Restoration, 
     Pollution Abatement, and Invasive Species.--
       (1) Modifications to national highway system.--Section 
     103(b)(6) of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(Q) Environmental restoration and pollution abatement in 
     accordance with section 165.
       ``(R) Control of invasive plant species and establishment 
     of native species in accordance with section 166.''.
       (2) Modifications to surface transportation program.--
     Section 133(b) of title 23, is amended by striking paragraph 
     (14) and inserting the following:
       ``(14) Environmental restoration and pollution abatement in 
     accordance with section 165.
       ``(15) Control of invasive plant species and establishment 
     of native species in accordance with section 166.''.
       (b) Eligible Activities.--Subchapter I of chapter 1 of 
     title 23, United States Code, is amended by adding at the end 
     the following:

     ``Sec. 165. Eligibility for environmental restoration and 
       pollution abatement

       ``(a) In General.--Subject to subsection (b), environmental 
     restoration and pollution abatement to minimize or mitigate 
     the impacts of any transportation project funded under this 
     title (including retrofitting and construction of storm water 
     treatment systems to meet Federal and State requirements 
     under sections 401 and 402 of the Federal Water Pollution 
     Control Act (33 U.S.C. 1341, 1342)) may be carried out to 
     address water pollution or environmental degradation caused 
     wholly or partially by a transportation facility.
       ``(b) Maximum Expenditure.--In a case in which a 
     transportation facility is undergoing reconstruction, 
     rehabilitation, resurfacing, or restoration, the expenditure 
     of funds under this section for environmental restoration or 
     pollution abatement described in subsection (a) shall not 
     exceed 20 percent of the total cost of the reconstruction, 
     rehabilitation, resurfacing, or restoration of the facility.

     ``Sec. 166. Control of invasive plant species and 
       establishment of native species

       ``(a) Definitions.--In this section:
       ``(1) Invasive plant species--The term `invasive plant 
     species' means a nonindigenous species the introduction of 
     which causes or is likely to cause economic or environmental 
     harm or harm to human health.
       ``(2) Native plant species.--The term `native plant 
     species' means, with respect to a particular ecosystem, a 
     species that, other than as result of an introduction, 
     historically occurred or currently occurs in that ecosystem.
       ``(b) Control of Species.--
       ``(1) In general.--In accordance with all applicable 
     Federal law (including regulations), funds made available to 
     carry out this section may be used for--
       ``(A) participation in the control of invasive plant 
     species; and
       ``(B) the establishment of native species.
       ``(2) Included activities.--The participation and 
     establishment under paragraph (1) may include--
       ``(A) participation in statewide inventories of invasive 
     plant species and desirable plant species;
       ``(B) regional native plant habitat conservation and 
     mitigation;
       ``(C) native revegetation;
       ``(D) elimination of invasive species to create fuel breaks 
     for the prevention and control of wildfires; and
       ``(E) training.
       ``(3) Contributions.--
       ``(A) In general.--Subject to subparagraph (B), an activity 
     described in paragraph (1) may be carried out concurrently 
     with, in advance of, or following the construction of a 
     project funded under this title.
       ``(B) Condition for activities conducted in advance of 
     project construction.--An activity described in paragraph (1) 
     may be carried out in advance of construction of a project 
     only if the activity is carried out in accordance with all 
     applicable requirements of Federal law (including 
     regulations) and State transportation planning processes.''.
       (c) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1406(b)), is amended by adding at the end the 
     following:

``165. Eligibility for environmental restoration and pollution 
              abatement.
``166. Control of invasive plant species and establishment of native 
              species.''.

     SEC. 1602. NATIONAL SCENIC BYWAYS PROGRAM.

       (a) In General.--Section 162 of title 23, United States 
     Code, is amended--
       (1) in subsection (a)(1), by striking ``the roads as'' and 
     all that follows and inserting ``the roads as--
       ``(A) National Scenic Byways;
       ``(B) All-American Roads; or
       ``(C) America's Byways.'';
       (2) in subsection (b)--
       (A) in paragraph (1)(A), by striking ``designated as'' and 
     all that follows and inserting ``designated as--
       ``(i) National Scenic Byways;
       ``(ii) All-American Roads; or
       ``(iii) America's Byways; and'';
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``Byway or All-
     American Road'' and inserting ``Byway, All-American Road, or 
     1 of America's Byways''; and
       (ii) in subparagraph (B), by striking ``designation as a'' 
     and all that follows and inserting ``designation as--
       ``(i) a National Scenic Byway;
       ``(ii) an All-American Road; or
       ``(iii) 1 of America's Byways; and''; and
       (3) in subsection (c)(4), by striking ``passing lane,''.
       (b) Research, Technical Assistance, Marketing, and 
     Promotion.--Section 162 of title 23, United States Code, is 
     amended--
       (1) by redesignating subsections (d), (e), and (f) as 
     subsections (e), (f), and (g), respectively;
       (2) by inserting after subsection (c) the following:
       ``(d) Research, Technical Assistance, Marketing, and 
     Promotion.--
       ``(1) In general.--The Secretary may carry out technical 
     assistance, marketing, market research, and promotion with 
     respect to State Scenic Byways, National Scenic Byways, All-
     American Roads, and America's Byways.
       ``(2) Cooperation, grants, and contracts.--The Secretary 
     may make grants to, or enter into contracts, cooperative 
     agreements, and other transactions with, any Federal agency, 
     State agency, authority, association, institution, for-profit 
     or nonprofit corporation, organization, or person, to carry 
     out projects and activities under this subsection.
       ``(3) Funds.--The Secretary may use not more than 
     $2,000,000 for each fiscal year of funds made available for 
     the National Scenic Byways Program to carry out projects and 
     activities under this subsection.
       ``(4) Priority.--The Secretary shall give priority under 
     this subsection to partnerships that leverage Federal funds 
     for research, technical assistance, marketing and 
     promotion.''; and
       (3) in subsection (g) (as redesignated by paragraph (1)), 
     by striking ``80 percent'' and inserting ``the share 
     applicable under section 120, as adjusted under subsection 
     (d) of that section''.

     SEC. 1603. RECREATIONAL TRAILS PROGRAM.

       (a) Recreational Trails Program Formula.--Section 104(h)(1) 
     of title 23, United States Code, is amended--
       (1) by striking ``Whenever'' and inserting the following:
       ``(A) In general.--In any case in which'';
       (2) by striking ``research and technical assistance under 
     the recreational trails program and

[[Page 10853]]

     for the administration of the National Recreational Trails 
     Advisory Committee'' and inserting ``research, technical 
     assistance, and training under the recreational trails 
     program''; and
       (3) by striking ``The Secretary'' and inserting the 
     following:
       ``(B) Contracts and agreements.--The Secretary''.
       (b) Recreational Trails Program Administration.--Section 
     206 of title 23, United States Code, is amended--
       (1) in subsection (d)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Permissible uses.--Permissible uses of funds 
     apportioned to a State for a fiscal year to carry out this 
     section include--
       ``(A) maintenance and restoration of recreational trails;
       ``(B) development and rehabilitation of trailside and 
     trailhead facilities and trail linkages for recreational 
     trails;
       ``(C) purchase and lease of recreational trail construction 
     and maintenance equipment;
       ``(D) construction of new recreational trails, except that, 
     in the case of new recreational trails crossing Federal land, 
     construction of the trails shall be--
       ``(i) permissible under other law;
       ``(ii) necessary and recommended by a statewide 
     comprehensive outdoor recreation plan that is--

       ``(I) required under the Land and Water Conservation Fund 
     Act of 1965 (16 U.S.C. 460l-4 et seq.); and
       ``(II) in effect;

       ``(iii) approved by the administering agency of the State 
     designated under subsection (c)(1)(A); and
       ``(iv) approved by each Federal agency having jurisdiction 
     over the affected land, under such terms and conditions as 
     the head of the Federal agency determines to be appropriate, 
     except that the approval shall be contingent on compliance by 
     the Federal agency with all applicable laws, including--

       ``(I) the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.);
       ``(II) the Forest and Rangeland Renewable Resources 
     Planning Act of 1974 (16 U.S.C. 1600 et seq.); and
       ``(III) the Federal Land Policy and Management Act of 1976 
     (43 U.S.C. 1701 et seq.);

       ``(E) acquisition of easements and fee simple title to 
     property for recreational trails or recreational trail 
     corridors;
       ``(F) assessment of trail conditions for accessibility and 
     maintenance;
       ``(G) use of trail crews, youth conservation or service 
     corps, or other appropriate means to carry out activities 
     under this section;
       ``(H) development and dissemination of publications and 
     operation of educational programs to promote safety and 
     environmental protection, as those objectives relate to the 
     use of recreational trails, supporting non-law enforcement 
     trail safety and trail use monitoring patrol programs, and 
     providing trail-related training, but in an amount not to 
     exceed 5 percent of the apportionment made to the State for 
     the fiscal year; and
       ``(I) payment of costs to the State incurred in 
     administering the program, but in an amount not to exceed 7 
     percent of the apportionment made to the State for the fiscal 
     year to carry out this section.''; and
       (B) in paragraph (3)--
       (i) in subparagraph (D), by striking ``(2)(F)'' and 
     inserting ``(2)(I)''; and
       (ii) by adding at the end the following:
       ``(E) Use of youth conservation or service corps.--A State 
     shall make available not less than 10 percent of the 
     apportionments of the State to provide grants to, or to enter 
     into cooperative agreements or contracts with, qualified 
     youth conservation or service corps to perform recreational 
     trails program activities.'';
       (2) in subsection (f)--
       (A) in paragraph (1)--
       (i) by inserting ``and the Federal share of the 
     administrative costs of a State'' after ``project''; and
       (ii) by striking ``not exceed 80 percent'' and inserting 
     ``be determined in accordance with section 120'';
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``80 percent of'' and 
     inserting ``the amount determined in accordance with section 
     120 for''; and
       (ii) in subparagraph (B), by inserting ``sponsoring the 
     project'' after ``Federal agency'';
       (C) by striking paragraph (5);
       (D) by redesignating paragraph (4) as paragraph (5);
       (E) by inserting after paragraph (3) the following:
       ``(4) Use of recreational trails program funds to match 
     other federal program funds.--Notwithstanding any other 
     provision of law, funds made available under this section may 
     be used to pay the non-Federal matching share for other 
     Federal program funds that are--
       ``(A) expended in accordance with the requirements of the 
     Federal program relating to activities funded and populations 
     served; and
       ``(B) expended on a project that is eligible for assistance 
     under this section.''; and
       (F) in paragraph (5) (as redesignated by subparagraph (D)), 
     by striking ``80 percent'' and inserting ``the Federal share 
     as determined in accordance with section 120''; and
       (3) in subsection (h)--
       (A) in paragraph (1), by inserting after subparagraph (B) 
     the following:
       ``(C) Planning and environmental assessment costs incurred 
     prior to project approval.--A project funded under any of 
     subparagraphs (A) through (H) of subsection (d)(2) may permit 
     preapproval planning and environmental compliance costs 
     incurred not more than 18 months before project approval to 
     be credited toward the non-Federal share in accordance with 
     subsection (f).''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Waiver of highway program requirements.--A project 
     funded under this section--
       ``(A) is intended to enhance recreational opportunity;
       ``(B) is not considered to be a highway project; and
       ``(C) is not subject to--
       ``(i) section 112, 114, 116, 134, 135, 138, 217, or 301 of 
     this title; or
       ``(ii) section 303 of title 49.''.

     SEC. 1604. EXEMPTION OF INTERSTATE SYSTEM.

       Subsection 103(c) of title 23, United States Code, is 
     amended by adding at the end the following:
       ``(5) Exemption of interstate system.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Interstate System shall not be considered to be a 
     historic site under section 303 of title 49 or section 138 of 
     this title, regardless of whether the Interstate System or 
     portions of the Interstate System are listed on, or eligible 
     for listing on, the National Register of Historic Places.
       ``(B) Individual elements.--A portion of the Interstate 
     System that possesses an independent feature of historic 
     significance, such as a historic bridge or a highly 
     significant engineering feature, that would qualify 
     independently for listing on the National Register of 
     Historic Places, shall be considered to be a historic site 
     under section 303 of title 49 or section 138 of this title, 
     as applicable.''.

     SEC. 1605. STANDARDS.

       (a) In General.--Section 109(a) of title 23, United States 
     Code, is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) consider the preservation, historic, scenic, natural 
     environmental, and community values.''.
       (b) Context Sensitive Design.--Section 109 of title 23, 
     United States Code, is amended by striking subsection (p) and 
     inserting the following:
       ``(p) Context Sensitive Design.--
       ``(1) In general.--The Secretary shall encourage States to 
     design projects funded under this title that--
       ``(A) allow for the preservation of environmental, scenic, 
     or historic values;
       ``(B) ensure the safe use of the facility;
       ``(C) provide for consideration of the context of the 
     locality;
       ``(D) encourage access for other modes of transportation; 
     and
       ``(E) comply with subsection (a).
       ``(2) Approval by secretary.--Notwithstanding subsections 
     (b) and (c), the Secretary may approve a project described in 
     paragraph (1) for the National Highway System if the project 
     is designed to achieve the criteria specified in that 
     paragraph.''.

     SEC. 1606. USE OF HIGH OCCUPANCY VEHICLE LANES.

       Section 102 of title 23, United States Code, is amended by 
     striking subsection (a) and inserting the following:
       ``(a) High Occupancy Vehicle Lane Passenger Requirements.--
       ``(1) Definitions.--In this subsection:
       ``(A) Responsible agency.--The term `responsible agency' 
     means--
       ``(i) a State transportation department; and
       ``(ii) a local agency in a State that is responsible for 
     transportation matters.
       ``(B) Seriously degraded.--The term `seriously degraded', 
     with respect to a high occupancy vehicle lane, means, in the 
     case of a high occupancy vehicle lane, the minimum average 
     operating speed, performance threshold, and associated time 
     period of the high occupancy vehicle lane, calculated and 
     determined jointly by all applicable responsible agencies and 
     based on conditions unique to the roadway, are 
     unsatisfactory.
       ``(2) Requirements.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     State, 1 or more responsible agencies shall establish the 
     occupancy requirements of vehicles operating on high 
     occupancy vehicle lanes.
       ``(B) Minimum number of occupants.--Except as provided in 
     paragraph (3), an occupancy requirement established under 
     subparagraph (A) shall--
       ``(i) require at least 2 occupants per vehicle for a 
     vehicle operating on a high occupancy vehicle lane; and
       ``(ii) in the case of a high occupancy vehicle lane that 
     traverses an adjacent State, be established in consultation 
     with the adjacent State.
       ``(3) Exceptions to hov occupancy requirements.--
       ``(A) Motorcycles.--For the purpose of this subsection, a 
     motorcycle--
       ``(i) shall not be considered to be a single occupant 
     vehicle; and
       ``(ii) shall be allowed to use a high occupancy vehicle 
     lane unless a responsible agency--

       ``(I) certifies to the Secretary the use of a high 
     occupancy vehicle lane by a motorcycle would create a safety 
     hazard; and
       ``(II) restricts that the use of the high occupancy vehicle 
     lane by motorcycles.

[[Page 10854]]

       ``(B) Low emission and energy-efficient vehicles.--
       ``(i) Definition of low emission and energy-efficient 
     vehicle.--In this subparagraph, the term `low emission and 
     energy-efficient vehicle' means a vehicle that has been 
     certified by the Administrator of the Environmental 
     Protection Agency--

       ``(I)(aa) to have a 45-mile per gallon or greater fuel 
     economy highway rating; or
       ``(bb) to qualify as an alternative fueled vehicle under 
     section 301 of the Energy Policy Act of 1992 (42 U.S.C. 
     13211); and
       ``(II) as meeting Tier II emission level established in 
     regulations promulgated by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act (42 U.S.C. 7521(i)) for that make and model 
     year vehicle.

       ``(ii) Exemption for low emission and energy-efficient 
     vehicles.--A responsible agency may permit qualifying low 
     emission and energy-efficient vehicles that do not meet 
     applicable occupancy requirements (as determined by the 
     responsible agency) to use high occupancy vehicle lanes if 
     the responsible agency--

       ``(I) establishes a program that addresses how those 
     qualifying low emission and energy-efficient vehicles are 
     selected and certified;
       ``(II) establishes requirements for labeling qualifying low 
     emission and energy-efficient vehicles (including procedures 
     for enforcing those requirements);
       ``(III) continuously monitors, evaluates, and reports to 
     the Secretary on performance; and
       ``(IV) imposes such restrictions on the use on high 
     occupancy vehicle lanes by vehicles that do not satisfy 
     established occupancy requirements as are necessary to ensure 
     that the performance of individual high occupancy vehicle 
     lanes, and the entire high occupancy vehicle lane system, 
     will not become seriously degraded.

       ``(C) Tolling of vehicles.--
       ``(i) In general.--A responsible agency may permit 
     vehicles, in addition to the vehicles described in paragraphs 
     (A), (B), and (D) that do not satisfy established occupancy 
     requirements, to use a high occupancy vehicle lane only if 
     the responsible agency charges those vehicles a toll.
       ``(ii) Applicable authority.--In imposing a toll under 
     clause (i), a responsible agency shall--

       ``(I) be subject to section 129;
       ``(II) establish a toll program that addresses ways in 
     which motorists may enroll and participate in the program;
       ``(III) develop, manage, and maintain a system that will 
     automatically collect the tolls from covered vehicles;
       ``(IV) continuously monitor, evaluate, and report on 
     performance of the system;
       ``(V) establish such policies and procedures as are 
     necessary--

       ``(aa) to vary the toll charged in order to manage the 
     demand for use of high occupancy vehicle lanes; and
       ``(bb) to enforce violations; and

       ``(VI) establish procedures to impose such restrictions on 
     the use of high occupancy vehicle lanes by vehicles that do 
     not satisfy established occupancy requirements as are 
     necessary to ensure that the performance of individual high 
     occupancy vehicle lanes, and the entire high occupancy 
     vehicle lane system, will not become seriously degraded.

       ``(D) Designated public transportation vehicles.--
       ``(i) Definition of designated public transportation 
     vehicle.--In this subparagraph, the term `designated public 
     transportation vehicle' means a vehicle that--

       ``(I) provides designated public transportation (as defined 
     in section 221 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12141)); and
       ``(II)(aa) is owned or operated by a public entity; or
       ``(bb) is operated under a contract with a public entity.

       ``(ii) Use of high occupancy vehicle lanes.--A responsible 
     agency may permit designated public transportation vehicles 
     that do not satisfy established occupancy requirements to use 
     high occupancy vehicle lanes if the responsible agency--

       ``(I) requires the clear and identifiable labeling of each 
     designated public transportation vehicle operating under a 
     contract with a public entity with the name of the public 
     entity on all sides of the vehicle;
       ``(II) continuously monitors, evaluates, and reports on 
     performance of those designated public transportation 
     vehicles; and
       ``(III) imposes such restrictions on the use of high 
     occupancy vehicle lanes by designated public transportation 
     vehicles as are necessary to ensure that the performance of 
     individual high occupancy vehicle lanes, and the entire high 
     occupancy vehicle lane system, will not become seriously 
     degraded.

       ``(E) HOV lane management, operation, and monitoring.--
       ``(i) In general.--A responsible agency that permits any of 
     the exceptions specified in this paragraph shall comply with 
     clauses (ii) and (iii).
       ``(ii) Performance monitoring, evaluation, and reporting.--
     A responsible agency described in clause (i) shall establish, 
     manage, and support a performance monitoring, evaluation, and 
     reporting program under which the responsible agency 
     continuously monitors, assesses, and reports on the effects 
     that any vehicle permitted to use a high occupancy vehicle 
     lane under an exception under this paragraph may have on the 
     operation of--

       ``(I) individual high occupancy vehicle lanes; and
       ``(II) the entire high occupancy vehicle lane system.

       ``(iii) Operation of hov lane or system.--A responsible 
     agency described in clause (i) shall limit use of, or cease 
     to use, any of the exceptions specified in this paragraph if 
     the presence of any vehicle permitted to use a high occupancy 
     vehicle lane under an exception under this paragraph 
     seriously degrades the operation of--

       ``(I) individual high occupancy vehicle lanes; and
       ``(II) the entire high occupancy vehicle lane system.''.

     SEC. 1607. BICYCLE TRANSPORTATION AND PEDESTRIAN WALKWAYS.

       (a) In General.--Section 217 of title 23, United States 
     Code, is amended--
       (1) in subsection (a), by inserting ``pedestrian and'' 
     after ``safe'';
       (2) in subsection (e), by striking ``bicycles'' each place 
     it appears and inserting ``pedestrians or bicyclists'';
       (3) by striking subsection (f) and inserting the following:
       ``(f) Federal Share.--The Federal share of the construction 
     of bicycle transportation facilities and pedestrian walkways, 
     and for carrying out nonconstruction projects relating to 
     safe pedestrian and bicycle use, shall be determined in 
     accordance with section 120(b).'';
       (4) by redesignating subsection (j) as subsection (k);
       (5) by inserting after subsection (i) the following:
       ``(j) Bicycle and Pedestrian Safety Grants.--
       ``(1) In general.--The Secretary shall select and make 
     grants to a national, nonprofit organization engaged in 
     promoting bicycle and pedestrian safety--
       ``(A) to operate a national bicycle and pedestrian 
     clearinghouse;
       ``(B) to develop information and educational programs 
     regarding walking and bicycling; and
       ``(C) to disseminate techniques and strategies for 
     improving bicycle and pedestrian safety.
       ``(2) Funding.--The Secretary may use funds set aside under 
     section 104(n) to carry out this subsection.
       ``(3) Applicability of title 23.--Funds authorized to be 
     appropriated to carry out this subsection shall be available 
     for obligation in the same manner as if the funds were 
     apportioned under section 104, except that the funds shall 
     remain available until expended.''; and
       (6) in subsection (k) (as redesignated by paragraph (4))--
       (A) by redesignating paragraph (4) as paragraph (5); and
       (B) by inserting after paragraph (3) the following:
       ``(4) Shared use path.--The term `shared use path' means a 
     multiuse trail or other path that is--
       ``(A) physically separated from motorized vehicular traffic 
     by an open space or barrier, either within a highway right-
     of-way or within an independent right-of-way; and
       ``(B) usable for transportation purposes (including by 
     pedestrians, bicyclists, skaters, equestrians, and other 
     nonmotorized users).''.
       (b) Reservation of Funds.--Section 104 of title 23, United 
     States Code (as amended by section 1522), is amended by 
     adding at the end the following:
       ``(n) Bicycle and Pedestrian Safety Grants.--On October 1 
     of each of fiscal years 2004 through 2009, the Secretary, 
     after making the deductions authorized by subsections (a) and 
     (f), shall set aside $500,000 of the remaining funds 
     apportioned under subsection (b)(3) for use in carrying out 
     the bicycle and pedestrian safety grant program under section 
     217.''.

     SEC. 1608. IDLING REDUCTION FACILITIES IN INTERSTATE RIGHTS-
                   OF-WAY.

       Section 111 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(d) Idling Reduction Facilities in Interstate Rights-of-
     Way.--
       ``(1) In general.--Notwithstanding subsection (a), a State 
     may--
       ``(A) permit electrification or other idling reduction 
     facilities and equipment, for use by motor vehicles used for 
     commercial purposes, to be placed in rest and recreation 
     areas, and in safety rest areas, constructed or located on 
     rights-of-way of the Interstate System in the State, so long 
     as those idling reduction measures do not--
       ``(i) reduce the existing number of designated truck 
     parking spaces at any given rest or recreation area; or
       ``(ii) preclude the use of those spaces by trucks employing 
     alternative idle reduction technologies; and
       ``(B) charge a fee, or permit the charging of a fee, for 
     the use of those parking spaces actively providing power to a 
     truck to reduce idling.
       ``(2) Purpose.--The exclusive purpose of the facilities 
     described in paragraph (1) (or similar technologies) shall be 
     to enable operators of motor vehicles used for commercial 
     purposes--
       ``(A) to reduce idling of a truck while parked in the rest 
     or recreation area; and
       ``(B) to use installed or other equipment specifically 
     designed to reduce idling of a truck, or provide alternative 
     power for supporting driver comfort, while parked.''.

     SEC. 1609. TOLL PROGRAMS.

       (a) Interstate System Reconstruction and Rehabilitation 
     Pilot Program.--Section 1216(b) of the Transportation Equity 
     Act for the 21st Century (23 U.S.C. 129 note; 112 Stat. 
     212)--
       (1) is amended--

[[Page 10855]]

       (A) in paragraph (1)--
       (i) by striking ``The Secretary'' and inserting 
     ``Notwithstanding section 301, the Secretary''; and
       (ii) by striking ``that could not otherwise be adequately 
     maintained or functionally improved without the collection of 
     tolls'';
       (B) in paragraph (3), by striking subparagraph (C) and 
     inserting the following:
       ``(C) An analysis demonstrating that financing the 
     reconstruction or rehabilitation of the facility with the 
     collection of tolls under this pilot program is the most 
     efficient, economical, or expeditious way to advance the 
     project.'';
       (C) in paragraph (4)--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) the State's analysis showing that financing the 
     reconstruction or rehabilitation of a facility with the 
     collection of tolls under the pilot program is the most 
     efficient, economical, or expeditious way to advance the 
     project;'';
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) the facility needs reconstruction or rehabilitation, 
     including major work that may require replacing sections of 
     the existing facility on new alignment;'';
       (iii) by striking subparagraph (C); and
       (iv) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (C) and (D), respectively;
       (2) is redesignated as subsection (d) of section 129 of 
     title 23, United States Code, and moved to appear at the end 
     of that section; and
       (3) by striking ``of title 23, United States Code'' each 
     place it appears.
       (b) Fast and Sensible Toll (FAST) Lanes Program.--Section 
     129 of title 23, United States Code (as amended by subsection 
     (a)(2)), is amended by adding at the end the following:
       ``(e) Fast and Sensible Toll (FAST) Lanes Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible toll facility.--The term `eligible toll 
     facility' includes--
       ``(i) a facility in existence on the date of enactment of 
     this subsection that collects tolls;
       ``(ii) a facility in existence on the date of enactment of 
     this subsection, including a facility that serves high 
     occupancy vehicles;
       ``(iii) a facility modified or constructed after the date 
     of enactment of this subsection to create additional tolled 
     capacity (including a facility constructed by a private 
     entity or using private funds); and
       ``(iv) in the case of a new lane added to a previously non-
     tolled facility, only the new lane.
       ``(B) Nonattainment area.--The term `nonattainment area' 
     has the meaning given the term in section 171 of the Clean 
     Air Act (42 U.S.C. 7501).
       ``(2) Establishment.--Notwithstanding sections 129 and 301, 
     the Secretary shall permit a State, public authority, or a 
     public or private entity designated by a State, to collect a 
     toll from motor vehicles at an eligible toll facility for any 
     highway, bridge, or tunnel, including facilities on the 
     Interstate System--
       ``(A) to manage high levels of congestion;
       ``(B) to reduce emissions in a nonattainment area or 
     maintenance area; or
       ``(C) to finance the expansion of a highway, for the 
     purpose of reducing traffic congestion, by constructing 1 or 
     more additional lanes (including bridge, tunnel, support, and 
     other structures necessary for that construction) on the 
     Interstate System.
       ``(3) Limitation on use of revenues.--
       ``(A) Use.--
       ``(i) In general.--Toll revenues received under paragraph 
     (2) shall be used by a State, public authority, or private 
     entity designated by a State, for--

       ``(I) debt service for debt incurred on 1 or more highway 
     or transit projects carried out under this title or title 49;
       ``(II) a reasonable return on investment of any private 
     financing;
       ``(III) the costs necessary for proper operation and 
     maintenance of any facilities under paragraph (2) (including 
     reconstruction, resurfacing, restoration, and 
     rehabilitation); or
       ``(IV) if the State, public authority, or private entity 
     annually certifies that the tolled facility is being 
     adequately operated and maintained, any other purpose 
     relating to a highway or transit project carried out under 
     this title or title 49.

       ``(B) Requirements.--
       ``(i) Variable price requirement.--A facility that charges 
     tolls under this subsection may establish a toll that varies 
     in price according to time of day or level of traffic, as 
     appropriate to manage congestion or improve air quality.
       ``(ii) HOV variable pricing requirement.--The Secretary 
     shall require, for each high occupancy vehicle facility that 
     charges tolls under this subsection, that the tolls vary in 
     price according to time of day or level of traffic, as 
     appropriate to manage congestion or improve air quality.
       ``(iii) HOV passenger requirements.--In addition to the 
     exceptions to the high occupancy vehicle passenger 
     requirements established under section 102(a)(2), a State may 
     permit motor vehicles with fewer than 2 occupants to operate 
     in high occupancy vehicle lanes as part of a variable toll 
     pricing program established under this subsection.
       ``(C) Agreement.--
       ``(i) In general.--Before the Secretary may permit a 
     facility to charge tolls under this subsection, the Secretary 
     and the applicable State, public authority, or private entity 
     designated by a State shall enter into an agreement for each 
     facility incorporating the conditions described in 
     subparagraphs (A) and (B).
       ``(ii) Termination.--An agreement under clause (i) shall 
     terminate with respect to a facility upon the decision of the 
     State, public authority, or private entity designated by a 
     State to discontinue the variable tolling program under this 
     subsection for the facility.
       ``(iii) Debt.--

       ``(I) In general.--If there is any debt outstanding on a 
     facility at the time at which the decision is made to 
     discontinue the program under this subsection with respect to 
     the facility, the facility may continue to charge tolls in 
     accordance with the terms of the agreement until such time as 
     the debt is retired.
       ``(II) Notice.--On retirement of the debt of a tolled 
     facility, the applicable State, public authority, or private 
     entity designated by a State shall provide notice to the 
     public of that retirement.

       ``(D) Limitation on federal share.--The Federal share of 
     the cost of a project on a facility tolled under this 
     subsection, including a project to install the toll 
     collection facility shall be a percentage, not to exceed 80 
     percent, determined by the applicable State.
       ``(4) Eligibility.--To be eligible to participate in the 
     program under this subsection, a State, public authority, or 
     private entity designated by a State shall provide to the 
     Secretary--
       ``(A) a description of the congestion or air quality 
     problems sought to be addressed under the program;
       ``(B) a description of--
       ``(i) the goals sought to be achieved under the program; 
     and
       ``(ii) the performance measures that would be used to gauge 
     the success made toward reaching those goals; and
       ``(C) such other information as the Secretary may require.
       ``(5) Automation.--Fees collected from motorists using a 
     FAST lane shall be collected only through the use of noncash 
     electronic technology that optimizes the free flow of traffic 
     on the tolled facility.
       ``(6) Interoperability.--
       ``(A) Rule.--
       ``(i) In general.--Not later than 180 days after the date 
     of enactment of this paragraph, the Secretary shall 
     promulgate a final rule specifying requirements, standards, 
     or performance specifications for automated toll collection 
     systems implemented under this section.
       ``(ii) Development.--In developing that rule, which shall 
     be designed to maximize the interoperability of electronic 
     collection systems, the Secretary shall, to the maximum 
     extent practicable--

       ``(I) seek to accelerate progress toward the national goal 
     of achieving a nationwide interoperable electronic toll 
     collection system;
       ``(II) take into account the use of noncash electronic 
     technology currently deployed within an appropriate 
     geographical area of travel and the noncash electronic 
     technology likely to be in use within the next 5 years; and
       ``(III) seek to minimize additional costs and maximize 
     convenience to users of toll facility and to the toll 
     facility owner or operator.

       ``(B) Future modifications.--As the state of technology 
     progresses, the Secretary shall modify the rule promulgated 
     under subparagraph (A), as appropriate.
       ``(7) Reporting.--
       ``(A) In general.--The Secretary, in cooperation with State 
     and local agencies and other program participants and with 
     opportunity for public comment, shall--
       ``(i) develop and publish performance goals for each FAST 
     lane project;
       ``(ii) establish a program for regular monitoring and 
     reporting on the achievement of performance goals, 
     including--

       ``(I) effects on travel, traffic, and air quality;
       ``(II) distribution of benefits and burdens;
       ``(III) use of alternative transportation modes; and
       ``(IV) use of revenues to meet transportation or impact 
     mitigation needs.

       ``(B) Reports to congress.--The Secretary shall submit to 
     the Committee on Environment and Public Works of the Senate 
     and the Committee on Transportation and Infrastructure of the 
     House of Representatives--
       ``(i) not later than 1 year after the date of enactment of 
     this subsection, and annually thereafter, a report that 
     describes in detail the uses of funds under this subsection 
     in accordance with paragraph (8)(D); and
       ``(ii) not later than 3 years after the date of enactment 
     of this subsection, and every 3 years thereafter, a report 
     that describes any success of the program under this 
     subsection in meeting congestion reduction and other 
     performance goals established for FAST lane programs.
       ``(8) Funding.--
       ``(A) Authorization of appropriations.--There is authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out pre-implementation 
     studies and post-implementation evaluations of projects 
     planned or implemented under this subsection $11,000,000 for 
     each of fiscal years 2004 through 2009.
       ``(B) Availability.--Funds allocated by the Secretary to a 
     State under this subsection shall remain available for 
     obligation by the State for a period of 3 years after the 
     last day of the fiscal year for which the funds were 
     authorized.
       ``(C) Contract authority.--Funds authorized to be 
     appropriated under this paragraph shall be available for 
     obligation in the same manner as if the funds were 
     apportioned under this chapter, except that the Federal share 
     of the cost of any project carried out under this subsection 
     and the availability of funds authorized by this paragraph 
     shall be determined in accordance with this subsection.

[[Page 10856]]

       ``(D) Program promotion.--Notwithstanding any other 
     provision of this section, the Secretary shall use an amount 
     not to exceed 2 percent of the funds made available under 
     subparagraph (A)--
       ``(i) to make grants to promote the purposes of the program 
     under this subsection;
       ``(ii) to provide technical support to State and local 
     governments or other public or private entities involved in 
     implementing or considering FAST lane programs; and
       ``(iii) to conduct research on variable pricing that will 
     support State or local efforts to initiate those pricing 
     requirements.
       ``(E) Effect on other apportionments and allocations.--
     Revenues collected from tolls established under this 
     subsection shall not be taken into account in determining the 
     apportionments and allocations that any State or 
     transportation district within a State shall be entitled to 
     receive under or in accordance with this chapter.
       ``(9) Compliance.--The Secretary shall ensure that any 
     project or activity carried out under this section complies 
     with requirements under section 106 of this title and section 
     307 of title 49.
       ``(10) Voluntary use.--Nothing in this subsection requires 
     any highway user to use a FAST lane.
       ``(11) Environmental requirements.--Nothing in this 
     subsection affects any environmental requirement applicable 
     to the construction or operation of an eligible toll facility 
     under this title or any other provision of law.''.
       (c) Conforming Amendments.--
       (1) In general.--Section 1012 of the Intermodal Surface 
     Transportation Efficiency Act (23 U.S.C. 149 note; 105 Stat. 
     1938; 112 Stat. 211) is amended by striking subsection (b).
       (2) Continuation of program.--Notwithstanding the amendment 
     made by paragraph (1), the Secretary shall monitor and allow 
     any value pricing program established under a cooperative 
     agreement in effect on the day before the date of enactment 
     of this Act to continue.

     SEC. 1610. FEDERAL REFERENCE METHOD.

       (a) In General.--Section 6102 of the Transportation Equity 
     Act for the 21st Century (42 U.S.C. 7407 note; 112 Stat. 464) 
     is amended by striking subsection (e) and inserting the 
     following:
       ``(e) Field Study.--Not later than 2 years after the date 
     of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004, the 
     Administrator shall--
       ``(1) conduct a field study of the ability of the 
     PM2.5 Federal Reference Method to differentiate 
     those particles that are larger than 2.5 micrometers in 
     diameter;
       ``(2) develop a Federal reference method to measure 
     directly particles that are larger than 2.5 micrometers in 
     diameter without reliance on subtracting from coarse particle 
     measurements those particles that are equal to or smaller 
     than 2.5 micrometers in diameter;
       ``(3) develop a method of measuring the composition of 
     coarse particles; and
       ``(4) submit a report on the study and responsibilities of 
     the Administrator under paragraphs (1) through (3) to--
       ``(A) the Committee on Commerce of the House of 
     Representatives; and
       ``(B) the Committee on Environment and Public Works of the 
     Senate.''.

     SEC. 1611. ADDITION OF PARTICULATE MATTER AREAS TO CMAQ.

       Section 104(b)(2) of title 23, United States Code, is 
     amended--
       (1) in subparagraph (B)--
       (A) in the matter preceding clause (i), by striking ``ozone 
     or carbon monoxide'' and inserting ``ozone, carbon monoxide, 
     or fine particulate matter (PM2.5)'';
       (B) by striking clause (i) and inserting the following:
       ``(i) 1.0, if at the time of apportionment, the area is a 
     maintenance area;'';
       (C) in clause (vi), by striking ``or'' after the semicolon; 
     and
       (D) in clause (vii)--
       (i) by striking ``area as described in section 149(b) for 
     ozone,'' and inserting ``area for ozone (as described in 
     section 149(b) or for PM-2.5''; and
       (ii) by striking the period at the end and inserting a 
     semicolon;
       (2) by adding at the end the following:
       ``(viii) 1.0 if, at the time of apportionment, any county 
     that is not designated as a nonattainment or maintenance area 
     under the 1-hour ozone standard is designated as 
     nonattainment under the 8-hour ozone standard; or
       ``(ix) 1.2 if, at the time of apportionment, the area is 
     not a nonattainment or maintenance area as described in 
     section 149(b) for ozone or carbon monoxide, but is an area 
     designated nonattainment under the PM-2.5 standard.'';
       (3) by striking subparagraph (C) and inserting the 
     following:
       ``(C) Additional adjustment for carbon monoxide areas.--If, 
     in addition to being designated as a nonattainment or 
     maintenance area for ozone as described in section 149(b), 
     any county within the area was also classified under subpart 
     3 of part D of title I of the Clean Air Act (42 U.S.C. 7512 
     et seq.) as a nonattainment or maintenance area described in 
     section 149(b) for carbon monoxide, the weighted 
     nonattainment or maintenance area population of the county, 
     as determined under clauses (i) through (vi) or clause (viii) 
     of subparagraph (B), shall be further multiplied by a factor 
     of 1.2.'';
       (4) by redesignating subparagraph (D) and (E) as 
     subparagraphs (E) and (F) respectively; and
       (5) by inserting after subparagraph (C) the following:
       ``(D) Additional adjustment for pm 2.5 areas.--If, in 
     addition to being designated as a nonattainment or 
     maintenance area for ozone or carbon monoxide, or both as 
     described in section 149(b), any county within the area was 
     also designated under the PM-2.5 standard as a nonattainment 
     or maintenance area, the weighted nonattainment or 
     maintenance area population of those counties shall be 
     further multiplied by a factor of 1.2.''.

     SEC. 1612. ADDITION TO CMAQ-ELIGIBLE PROJECTS.

       (a) Eligible Projects.--Section 149(b) of title 23, United 
     States Code, is amended--
       (1) in paragraph (4), by striking ``or'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(6) if the project or program is for the purchase of 
     alternative fuel (as defined in section 301 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13211)) or biodiesel; or
       ``(7) if the project or program involves the purchase of 
     integrated, interoperable emergency communications 
     equipment.''.
       (b) States Receiving Minimum Apportionment.--Section 149(c) 
     of title 23, United States Code, is amended--
       (1) in paragraph (1), by striking ``for any project 
     eligible under the surface transportation program under 
     section 133.'' and inserting the following: ``for any project 
     in the State that--
       ``(A) would otherwise be eligible under this section as if 
     the project were carried out in a nonattainment or 
     maintenance area; or
       ``(B) is eligible under the surface transportation program 
     under section 133.''; and
       (2) in paragraph (2), by striking ``for any project in the 
     State eligible under section 133.'' and inserting the 
     following: ``for any project in the State that--
       ``(A) would otherwise be eligible under this section as if 
     the project were carried out in a nonattainment or 
     maintenance area; or
       ``(B) is eligible under the surface transportation program 
     under section 133.''.
       (c) Responsibility of States.--
       (1) In general.--Each State shall be responsible for 
     ensuring that subrecipients of Federal funds within the State 
     under section 149 of title 23, United States Code, have 
     emission reduction strategies for fleets that are--
       (A) used in construction projects located in nonattainment 
     and maintenance areas; and
       (B) funded under title 23, United States Code.
       (2) Emission reduction strategies.--The Administrator of 
     the Environmental Protection Agency, in consultation with the 
     Secretary, shall develop a nonbinding list of emission 
     reduction strategies and supporting technical information for 
     each strategy, including--
       (A) contract preferences;
       (B) requirements for the use of anti-idling equipment;
       (C) diesel retrofits; and
       (D) such other matters as the Administrator of the 
     Environmental Protection Agency, in consultation with the 
     Secretary, determine to be appropriate.
       (3) Use of cmaq funds.--A State may use funds made 
     available under this title and title 23, United States Code, 
     for the congestion mitigation and air quality program under 
     section 149 of title 23, United States Code, to ensure the 
     deployment of the emission reduction strategies described in 
     paragraph (1).

     SEC. 1613. IMPROVED INTERAGENCY CONSULTATION.

       Section 149 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(g) Interagency Consultation.--The Secretary shall 
     encourage States and metropolitan planning organizations to 
     consult with State and local air quality agencies in 
     nonattainment and maintenance areas on the estimated emission 
     reductions from proposed congestion mitigation and air 
     quality improvement programs and projects.''.

     SEC. 1614. EVALUATION AND ASSESSMENT OF CMAQ PROJECTS.

       Section 149 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(h) Evaluation and Assessment of Projects.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator of the Environmental Protection Agency, shall 
     evaluate and assess a representative sample of projects 
     funded under the congestion mitigation and air quality 
     program to--
       ``(A) determine the direct and indirect impact of the 
     projects on air quality and congestion levels; and
       ``(B) ensure the effective implementation of the program.
       ``(2) Database.--Using appropriate assessments of projects 
     funded under the congestion mitigation and air quality 
     program and results from other research, the Secretary shall 
     maintain and disseminate a cumulative database describing the 
     impacts of the projects.
       ``(3) Consideration.--The Secretary, in consultation with 
     the Administrator of the Environmental Protection Agency, 
     shall consider the recommendations and findings of the report 
     submitted to Congress under section 1110(e) of the 
     Transportation Equity Act for the 21st Century (112 Stat. 
     144), including recommendations and findings that would 
     improve the operation and evaluation of the congestion 
     mitigation and air quality improvement program under section 
     149.''.

     SEC. 1615. SYNCHRONIZED PLANNING AND CONFORMITY TIMELINES, 
                   REQUIREMENTS, AND HORIZON.

       (a) Metropolitan Planning.--

[[Page 10857]]

       (1) Development of long-range transportation plan.--Section 
     134(g)(1) of title 23, United States Code, is amended by 
     striking ``periodically, according to a schedule that the 
     Secretary determines to be appropriate,'' and inserting 
     ``every 4 years (or more frequently, in a case in which the 
     metropolitan planning organization elects to update a 
     transportation plan more frequently) in areas designated as 
     nonattainment, as defined in section 107(d) of the Clean Air 
     Act (42 U.S.C. 7407(d)), and in areas that were nonattainment 
     that have been redesignated to attainment in accordance with 
     section 107(d)(3) of that Act (42 U.S.C. 7407(d)(3)), with a 
     maintenance plan under section 175A of that Act (42 U.S.C. 
     7505a), or every 5 years (or more frequently, in a case in 
     which the metropolitan planning organization elects to update 
     a transportation plan more frequently) in areas designated as 
     attainment (as defined in section 107(d) of that Act (42 
     U.S.C. 7407(d))),''.
       (2) Metropolitan transportation improvement program.--
     Section 134(h) of title 23, United States Code, is amended--
       (A) in paragraph (1)(D), by striking ``2 years'' and 
     inserting ``4 years''; and
       (B) in paragraph (2)(A), by striking ``3-year'' and 
     inserting ``4-year''.
       (3) Statewide transportation improvement program.--Section 
     135(f)(1)(A) of title 23, United States Code, is amended by 
     inserting after ``program'' the following: ``(which program 
     shall cover a period of 4 years and be updated every 4 
     years)''.
       (4) Final regulations.--Not later than 18 months after the 
     date of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004, the Secretary 
     shall promulgate regulations that are consistent with the 
     amendments made by this subsection.
       (b) Synchronized Conformity Determination.--Section 176(c) 
     of the Clean Air Act (42 U.S.C. 7506(c)) is amended--
       (1) in paragraph (2)--
       (A) by striking ``(2) Any transportation plan'' and 
     inserting the following:
       ``(2) Transportation plans and programs.--Any 
     transportation plan'';
       (B) in subparagraph (C)(iii), by striking the period at the 
     end and inserting a semicolon;
       (C) in subparagraph (D)--
       (i) by striking ``Any project'' and inserting ``any 
     transportation project''; and
       (ii) by striking the period at the end and inserting ``; 
     and''; and
       (D) by adding at the end the following:
       ``(E) the appropriate metropolitan planning organization 
     shall redetermine conformity of existing transportation plans 
     and programs not later than 2 years after the date on which 
     the Administrator--
       ``(i) finds a motor vehicle emissions budget to be adequate 
     in accordance with section 93.118(e)(4) of title 40, Code of 
     Federal Regulations (as in effect on October 1, 2003);
       ``(ii) approves an implementation plan that establishes a 
     motor vehicle emissions budget, if that budget has not yet 
     been used in a conformity determination prior to approval; or
       ``(iii) promulgates an implementation plan that establishes 
     or revises a motor vehicle emissions budget.'';
       (2) in paragraph (4)(B)(ii), by striking ``but in no case 
     shall such determinations for transportation plans and 
     programs be less frequent than every 3 years; and'' and 
     inserting ``but the frequency for making conformity 
     determinations on updated transportation plans and programs 
     shall be every 4 years, except in a case in which--

       ``(I) the metropolitan planning organization elects to 
     update a transportation plan or program more frequently; or
       ``(II) the metropolitan planning organization is required 
     to determine conformity in accordance with paragraph (2)(E); 
     and'';

       (3) in paragraph (4)(B)--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(iv) address the effects of the most recent population, 
     economic, employment, travel, transit ridership, congestion, 
     and induced travel demand information in the development and 
     application of the latest travel and emissions models.'';
       (4) by adding at the end the following:
       ``(7) Conformity horizon for transportation plans.--
       ``(A) In general.--For the purposes of this section, a 
     transportation plan in a nonattainment or maintenance area 
     shall be considered to be a transportation plan or a portion 
     of a transportation plan that extends for the longest of the 
     following periods:
       ``(i) The first 10-year period of any such transportation 
     plan.
       ``(ii) The latest year in the implementation plan 
     applicable to the area that contains a motor vehicle emission 
     budget.
       ``(iii) The year after the completion date of a regionally 
     significant project, if the project requires approval before 
     the subsequent conformity determination.
       ``(B) Exception.--In a case in which an area has a revision 
     to an implementation plan under section 175A(b) and the 
     Administrator has found the motor vehicle emissions budgets 
     from that revision to be adequate in accordance with section 
     93.118(e)(4) of title 40, Code of Federal Regulations (as in 
     effect on October 1, 2003), or has approved the revision, the 
     transportation plan shall be considered to be a 
     transportation plan or portion of a transportation plan that 
     extends through the last year of the implementation plan 
     required under section 175A(b).
       ``(8) Definitions.--In this subsection:
       ``(A) Regionally significant project.--
       ``(i) In general.--The term `regionally significant 
     project' means a transportation project that is on a facility 
     that serves a regional transportation need, including--

       ``(I) access to and from the area outside of the region;
       ``(II) access to and from major planned developments, 
     including new retail malls, sports complexes, or 
     transportation terminals; and
       ``(III) most transportation terminals.

       ``(ii) Principal arterials and fixed guideways.--The term 
     `regionally significant project' includes, at a minimum--

       ``(I) all principal arterial highways; and
       ``(II) all fixed guideway transit facilities that offer an 
     alternative to regional highway travel.

       ``(iii) Additional projects.--The interagency consultation 
     process and procedures described in section 93.105(c) of 
     title 40, Code of Federal Regulations (as in effect on 
     October 1, 2003), shall be used to make determinations as to 
     whether minor arterial highways and other transportation 
     projects should be considered `regionally significant 
     projects'.
       ``(iv) Exclusions.--The term `regionally significant 
     project' does not include any project of a type listed in 
     sections 93.126 or 127 of title 40, Code of Federal 
     Regulations (as in effect on October 1, 2003).
       ``(B) Significant revision.--The term `significant 
     revision' means--
       ``(i) with respect to a regionally significant project, a 
     significant change in design concept or scope to the project; 
     and
       ``(ii) with respect to any other kind of project, a change 
     that converts a project that is not a regionally significant 
     project into a regionally significant project.
       ``(C) Transportation project.--The term `transportation 
     project' includes only a project that is--
       ``(i) a regionally significant project; or
       ``(ii) a project that makes a significant revision to an 
     existing project.''; and
       (5) in the matter following paragraph (3)(B), by inserting 
     ``transportation'' before ``project'' each place it appears.

     SEC. 1616. TRANSITION TO NEW AIR QUALITY STANDARDS.

       Section 176(c) of the Clean Air Act (42 U.S.C. 7506(c)) is 
     amended by striking paragraph (3) and inserting the 
     following:
       ``(3) Methods of conformity determination before budget is 
     available.--
       ``(A) In general.--Until such time as a motor vehicle 
     emission budget from an implementation plan submitted for a 
     national ambient air quality standard is determined to be 
     adequate in accordance with section 93.118(e)(4) of title 40, 
     Code of Federal Regulations (as in effect on October 1, 
     2003), or the submitted implementation plan is approved, 
     conformity of such a plan, program, or project shall be 
     demonstrated, in accordance with clauses (i) and (ii) and as 
     selected through the consultation process required under 
     paragraph (4)(D)(i), with--
       ``(i) a motor vehicle emission budget that has been found 
     adequate in accordance with section 93.118(e)(4) of title 40, 
     Code of Federal Regulations (as in effect on October 1, 
     2003), or that has been approved, from an implementation plan 
     for the most recent prior applicable national ambient air 
     quality standard addressing the same pollutant; or
       ``(ii) other such tests as the Administrator shall 
     determine to ensure that--

       ``(I) the transportation plan or program--

       ``(aa) is consistent with the most recent estimates of 
     mobile source emissions;
       ``(bb) provides for the expeditious implementation of 
     transportation control measures in the applicable 
     implementation plan; and
       ``(cc) with respect to an ozone or carbon monoxide 
     nonattainment area, contributes to annual emissions 
     reductions consistent with sections 182(b)(1) and 187(a)(7); 
     and

       ``(II) the transportation project--

       ``(aa) comes from a conforming transportation plan and 
     program described in this subparagraph; and
       ``(bb) in a carbon monoxide nonattainment area, eliminates 
     or reduces the severity and number of violations of the 
     carbon monoxide standards in the area substantially affected 
     by the project.
       ``(B) Determination for a transportation project in a 
     carbon monoxide nonattainment area.--A determination under 
     subparagraph (A)(ii)(II)(bb) may be made as part of either 
     the conformity determination for the transportation program 
     or for the individual project taken as a whole during the 
     environmental review phase of project development.''.

     SEC. 1617. REDUCED BARRIERS TO AIR QUALITY IMPROVEMENTS.

       Section 176(c) of the Clean Air Act (42 U.S.C. 7506(c)) (as 
     amended by section 1615(b)(4)) is amended--
       (1) by redesignating paragraph (8) as paragraph (9); and
       (2) by inserting after paragraph (7) the following:
       ``(8) Substitution for transportation control measures.--
       ``(A) In general.--Transportation control measures that are 
     specified in an implementation plan may be replaced or added 
     to the implementation plan with alternate or additional 
     transportation control measures if--
       ``(i) the substitute measures achieve equivalent or greater 
     emissions reductions than the control measure to be replaced, 
     as demonstrated with an analysis that is consistent with the 
     current methodology used for evaluating the replaced control 
     measure in the implementation plan;

[[Page 10858]]

       ``(ii) the substitute control measures are implemented--

       ``(I) in accordance with a schedule that is consistent with 
     the schedule provided for control measures in the 
     implementation plan; or
       ``(II) if the implementation plan date for implementation 
     of the control measure to be replaced has passed, as soon as 
     practicable after the implementation plan date but not later 
     than the date on which emission reductions are necessary to 
     achieve the purpose of the implementation plan;

       ``(iii) the substitute and additional control measures are 
     accompanied with evidence of adequate personnel, funding, and 
     authority under State or local law to implement, monitor, and 
     enforce the control measures;
       ``(iv) the substitute and additional control measures were 
     developed through a collaborative process that included--

       ``(I) participation by representatives of all affected 
     jurisdictions (including local air pollution control 
     agencies, the State air pollution control agency, and State 
     and local transportation agencies);
       ``(II) consultation with the Administrator; and
       ``(III) reasonable public notice and opportunity for 
     comment; and

       ``(v) the metropolitan planning organization, State air 
     pollution control agency, and the Administrator concur with 
     the equivalency of the substitute or additional control 
     measures.
       ``(B) Adoption.--After carrying out subparagraph (A), a 
     State shall adopt the substitute or additional transportation 
     control measure in the applicable implementation plan.
       ``(C) No requirement for express permission.--The 
     substitution or addition of a transportation control measure 
     in accordance with this paragraph shall not be contingent on 
     there being any provision in the implementation plan that 
     expressly permits such a substitution or addition.
       ``(D) No requirement for new conformity determination.--The 
     substitution or addition of a transportation control measure 
     in accordance with this paragraph shall not require--
       ``(i) a new conformity determination for the transportation 
     plan; or
       ``(ii) a revision of the implementation plan.
       ``(E) Continuation of control measure being replaced.--A 
     control measure that is being replaced by a substitute 
     control measure under this paragraph shall remain in effect 
     until the substitute control measure is adopted by the State 
     pursuant to subparagraph (B).
       ``(F) Effect of adoption.--Adoption of a substitute control 
     measure shall constitute rescission of the previously 
     applicable control measure.''.

     SEC. 1618. AIR QUALITY MONITORING DATA INFLUENCED BY 
                   EXCEPTIONAL EVENTS.

       (a) In General.--Section 319 of the Clean Air Act (42 
     U.S.C. 7619) is amended--
       (1) by striking the section heading and all that follows 
     through ``after notice and opportunity for public hearing'' 
     and inserting the following:

     ``SEC. 319. AIR QUALITY MONITORING.

       ``(a) In General.--After notice and opportunity for public 
     hearing''; and
       (2) by adding at the end the following:
       ``(b) Air Quality Monitoring Data Influenced by Exceptional 
     Events.--
       ``(1) Definition of exceptional event.--In this section:
       ``(A) In general.--The term `exceptional event' means an 
     event that--
       ``(i) affects air quality;
       ``(ii) is not reasonably controllable or preventable;
       ``(iii) is--

       ``(I) a natural event; or
       ``(II) an event caused by human activity that is unlikely 
     to recur at a particular location; and

       ``(iv) is determined by the Administrator through the 
     process established in the regulations promulgated under 
     paragraph (2) to be an exceptional event.
       ``(B) Exclusions.--The term `exceptional event' does not 
     include--
       ``(i) stagnation of air masses or meteorological 
     inversions;
       ``(ii) a meteorological event involving high temperatures 
     or lack of precipitation; or
       ``(iii) air pollution relating to source noncompliance.
       ``(2) Regulations.--
       ``(A) Proposed regulations.--Not later than March 1, 2005, 
     after consultation with Federal land managers and State air 
     pollution control agencies, the Administrator shall publish 
     in the Federal Register proposed regulations governing the 
     review and handling of air quality monitoring data influenced 
     by exceptional events.
       ``(B) Final regulations.--Not later than 1 year after the 
     date on which the Administrator publishes proposed 
     regulations under subparagraph (A), and after providing an 
     opportunity for interested persons to make oral presentations 
     of views, data, and arguments regarding the proposed 
     regulations, the Administrator shall promulgate final 
     regulations governing the review and handling or air quality 
     monitoring data influenced by an exceptional event that are 
     consistent with paragraph (3).
       ``(3) Principles and requirements.--
       ``(A) Principles.--In promulgating regulations under this 
     section, the Administrator shall follow--
       ``(i) the principle that protection of public health is the 
     highest priority;
       ``(ii) the principle that timely information should be 
     provided to the public in any case in which the air quality 
     is unhealthy;
       ``(iii) the principle that all ambient air quality data 
     should be included in a timely manner, an appropriate Federal 
     air quality database that is accessible to the public;
       ``(iv) the principle that each State must take necessary 
     measures to safeguard public health regardless of the source 
     of the air pollution; and
       ``(v) the principle that air quality data should be 
     carefully screened to ensure that events not likely to recur 
     are represented accurately in all monitoring data and 
     analyses.
       ``(B) Requirements.--Regulations promulgated under this 
     section shall, at a minimum, provide that--
       ``(i) the occurrence of an exceptional event must be 
     demonstrated by reliable, accurate data that is promptly 
     produced and provided by Federal, State, or local government 
     agencies;
       ``(ii) a clear causal relationship must exist between the 
     measured exceedances of a national ambient air quality 
     standard and the exceptional event to demonstrate that the 
     exceptional event caused a specific air pollution 
     concentration at a particular air quality monitoring 
     location;
       ``(iii) there is a public process for determining whether 
     an event is exceptional; and
       ``(iv) there are criteria and procedures for the Governor 
     of a State to petition the Administrator to exclude air 
     quality monitoring data that is directly due to exceptional 
     events from use in determinations by the Environmental 
     Protection Agency with respect to exceedances or violations 
     of the national ambient air quality standards.
       ``(4) Interim provision.--Until the effective date of a 
     regulation promulgated under paragraph (2), the following 
     guidance issued by the Administrator shall continue to apply:
       ``(A) Guidance on the identification and use of air quality 
     data affected by exceptional events (July 1986).
       ``(B) Areas affected by PM-10 natural events, May 30, 1996.
       ``(C) Appendices I, K, and N to part 50 of title 40, Code 
     of Federal Regulations.''.

     SEC. 1619. CONFORMING AMENDMENTS.

       Section 176(c)(4) of the Clean Air Act (42 U.S.C. 
     7506(c)(4) is amended--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (D) through (F), respectively;
       (2) by striking ``(4)(A) No later than one year after the 
     date of enactment of the Clean Air Act Amendments of 1990, 
     the Administrator shall promulgate'' and inserting the 
     following:
       ``(4) Criteria and procedures for determining conformity.--
       ``(A) In general.--The Administrator shall promulgate, and 
     periodically update,'';
       (3) in subparagraph (A)--
       (A) in the second sentence, by striking ``No later than one 
     year after such date of enactment, the Administrator, with 
     the concurrence of the Secretary of Transportation, shall 
     promulgate'' and inserting the following:
       ``(B) Transportation plans, programs, and projects.--The 
     Administrator, with the concurrence of the Secretary of 
     Transportation, shall promulgate, and periodically update,''; 
     and
       (B) in the third sentence, by striking ``A suit'' and 
     inserting the following:
       ``(C) Civil action to compel promulgation.--A civil 
     action''; and
       (4) by striking subparagraph (E) (as redesignated by 
     paragraph (1)) and inserting the following:
       ``(E) Inclusion of criteria and procedures in sip.--Not 
     later than 2 years after the date of enactment of the Safe, 
     Accountable, Flexible, and Efficient Transportation Equity 
     Act of 2004, the procedures under subparagraph (A) shall 
     include a requirement that each State include in the State 
     implementation plan criteria and procedures for consultation 
     in accordance with the Administrator's criteria and 
     procedures for consultation required by subparagraph 
     (D)(i).''.

     SEC. 1620. HIGHWAY STORMWATER DISCHARGE MITIGATION PROGRAM.

       (a) Highway Stormwater Mitigation Projects.--Section 133(d) 
     of title 23, United States Code (as amended by section 
     1401(a)(2)(B)), is amended by adding at the end the 
     following:
       ``(5) Highway stormwater discharge mitigation projects.--Of 
     the amount apportioned to a State under section 104(b)(3) for 
     a fiscal year, 2 percent shall be available only for projects 
     and activities carried out under section 167.''.
       (b) Highway Stormwater Discharge Mitigation Program.--
     Subchapter I of chapter 1 of title 23, United States Code (as 
     amended by section 1601(a)), is amended by adding at the end 
     the following:

     ``Sec. 167. Highway stormwater discharge mitigation program

       ``(a) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Environmental Protection Agency.
       ``(2) Eligible mitigation project.--The term `eligible 
     mitigation project' means a practice or technique that--
       ``(A) improves stormwater discharge water quality;
       ``(B) attains preconstruction hydrology;
       ``(C) promotes infiltration of stormwater into groundwater;
       ``(D) recharges groundwater;
       ``(E) minimizes stream bank erosion;
       ``(F) promotes natural filters;
       ``(G) otherwise mitigates water quality impacts of highway 
     stormwater discharges, improves surface water quality, or 
     enhances groundwater recharge; or

[[Page 10859]]

       ``(H) reduces flooding caused by highway stormwater 
     discharge.
       ``(3) Federal-aid highway and associated facility.--The 
     term `Federal-aid highway and associated facility' means--
       ``(A) a Federal-aid highway; or
       ``(B) a facility or land owned by a State (or political 
     subdivision of a State) that is directly associated with the 
     Federal-aid highway.
       ``(4) Highway stormwater discharge.--The term `highway 
     stormwater discharge' means stormwater discharge from a 
     Federal-aid highway, or a Federal-aid highway and associated 
     facility, that was constructed before the date of enactment 
     of this section.
       ``(5) Highway stormwater discharge mitigation.--The term 
     `highway stormwater discharge mitigation' means--
       ``(A) the reduction of water quality impacts of stormwater 
     discharges from Federal-aid highways or Federal-aid highways 
     and associated facilities; or
       ``(B) the enhancement of groundwater recharge from 
     stormwater discharges from Federal-aid highways or Federal-
     aid highways and associated facilities.
       ``(6) Program.--The term `program' means the highway 
     stormwater discharge mitigation program established under 
     subsection (b).
       ``(b) Establishment.--The Secretary shall establish a 
     highway stormwater discharge mitigation program--
       ``(1) to improve the quality of stormwater discharge from 
     Federal-aid highways or Federal-aid highways and associated 
     facilities; and
       ``(2) to enhance groundwater recharge.
       ``(c) Priority of Projects.--For projects funded from the 
     allocation under section 133(d)(6), a State shall give 
     priority to projects sponsored by a State or local government 
     that assist the State or local government in complying with 
     the Federal Water Pollution Control Act (33 U.S.C. 1251 et 
     seq.).
       ``(d) Guidance.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Secretary, in consultation 
     with the Administrator, shall issue guidance to assist States 
     in carrying out this section.
       ``(2) Requirements for guidance.--The guidance issued under 
     paragraph (1) shall include information concerning innovative 
     technologies and nonstructural best management practices to 
     mitigate highway stormwater discharges.''.
       (c) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1601(b), is amended by inserting after the item 
     relating to section 166 the following:

``167. Highway stormwater discharge mitigation program.''.

     SEC. 1621. EXEMPTION FROM CERTAIN HAZARDOUS MATERIALS 
                   TRANSPORTATION REQUIREMENTS.

       (a) Definition of Eligible Person.--In this section, the 
     term ``eligible person'' means an agricultural producer that 
     has gross agricultural commodity sales that do not exceed 
     $500,000.
       (b) Exemption.--Subject to subsection (c), part 172 of 
     title 49, Code of Federal Regulations, shall not apply to an 
     eligible person that transports a fertilizer, pesticide, 
     propane, gasoline, or diesel fuel for agricultural purposes, 
     to the extent determined by the Secretary.
       (c) Applicability.--Subsection (b) applies to security plan 
     requirements under subpart I of part 172 of title 49, Code of 
     Federal Regulations (or a successor regulation).

     SEC. 1622. FUNDS FOR REBUILDING FISH STOCKS.

       Section 105 of the Miscellaneous Appropriations and Offsets 
     Act, 2004 (Division H of the Consolidated Appropriations Act, 
     2004 (Public Law 108-199)) is repealed.

                         Subtitle G--Operations

     SEC. 1701. TRANSPORTATION SYSTEMS MANAGEMENT AND OPERATIONS.

       (a) Surface Transportation Program Eligibility.--Section 
     133(b) of title 23, United States Code (as amended by section 
     1601(a)(2)), is amended by adding at the end the following:
       ``(16) Regional transportation operations collaboration and 
     coordination activities that are associated with regional 
     improvements, such as traffic incident management, technology 
     deployment, emergency management and response, traveler 
     information, and regional congestion relief.
       ``(17) Rush hour congestion relief.--
       ``(A) In general.--Subject to subparagraph (B), a State may 
     spend the funds apportioned under this section to reduce 
     traffic delays caused by motor vehicle accidents and 
     breakdowns on highways during peak driving times.
       ``(B) Use of funds.--A State, metropolitan planning 
     organization, or local government may use the funds under 
     subparagraph (A)--
       ``(i) to develop a region-wide coordinated plan to mitigate 
     traffic delays caused by motor vehicle accidents and 
     breakdowns;
       ``(ii) to purchase or lease telecommunications equipment 
     for first responders;
       ``(iii) to purchase or lease towing and recovery services;
       ``(iv) to pay contractors for towing and recovery;
       ``(v) to rent vehicle storage areas adjacent to roadways;
       ``(vi) to fund service patrols, equipment, and operations;
       ``(vii) to purchase incident detection equipment;
       ``(viii) to carry out training.''.
       (b) Congestion Mitigation and Air Quality Improvement 
     Program Eligibility.--Section 149(b)(5) of title 23, United 
     States Code, is amended by inserting ``improve transportation 
     systems management and operations,'' after 
     ``intersections,''.
       (c) Transportation Systems Management and Operations.--
       (1) In general.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1620(b)), is 
     amended by adding at the end the following:

     ``Sec. 168. Transportation systems management and operations

       ``(a) In General.--The Secretary shall carry out a 
     transportation systems management and operations program to--
       ``(1) ensure efficient and effective transportation systems 
     management and operations on Federal-aid highways through 
     collaboration, coordination, and real-time information 
     sharing at a regional and Statewide level among--
       ``(A) managers and operators of major modes of 
     transportation;
       ``(B) public safety officials; and
       ``(C) the general public; and
       ``(2) manage and operate Federal-aid highways in a 
     coordinated manner to preserve the capacity and maximize the 
     performance of highway and transit facilities for travelers 
     and carriers.
       ``(b) Authorized Activities.--
       ``(1) In general.--In carrying out the program under 
     subsection (a), the Secretary may carry out activities to--
       ``(A) encourage managers and operators of major modes of 
     transportation, public safety officials, and transportation 
     planners in urbanized areas that are responsible for 
     conducting the day-to-day management, operations, public 
     safety, and planning of transportation facilities and 
     services to collaborate on and coordinate, on a regional 
     level and in a continuous and sustained manner, improved 
     transportation systems management and operations; and
       ``(B) encourage States to--
       ``(i) establish a system of basic real-time monitoring for 
     the surface transportation system; and
       ``(ii) provide the means to share the data gathered under 
     clause (i) among--

       ``(I) highway, transit, and public safety agencies;
       ``(II) jurisdictions (including States, cities, counties, 
     and metropolitan planning organizations);
       ``(III) private-sector entities; and
       ``(IV) the general public.

       ``(2) Activities.--Activities to be carried out under 
     paragraph (1) include--
       ``(A) developing a regional concept of operations that 
     defines a regional strategy shared by all transportation and 
     public safety participants with respect to the manner in 
     which the transportation systems of the region should be 
     managed, operated, and measured;
       ``(B) the sharing of information among operators, service 
     providers, public safety officials, and the general public; 
     and
       ``(C) guiding, in a regionally-coordinated manner and in a 
     manner consistent with and integrated into the metropolitan 
     and statewide transportation planning processes and regional 
     intelligent transportation system architecture, the 
     implementation of regional transportation system management 
     and operations initiatives, including--
       ``(i) emergency evacuation and response;
       ``(ii) traffic incident management;
       ``(iii) technology deployment; and
       ``(iv) traveler information systems delivery.
       ``(c) Cooperation.--In carrying out the program under 
     subsection (a), the Secretary may assist and cooperate with 
     other Federal agencies, State and local governments, 
     metropolitan planning organizations, private industry, and 
     other interested parties to improve regional collaboration 
     and real-time information sharing between managers and 
     operators of major modes of transportation, public safety 
     officials, emergency managers, and the general public to 
     increase the security, safety, and reliability of Federal-aid 
     highways.
       ``(d) Guidance; Regulations.--
       ``(1) In general.--In carrying out the program under 
     subsection (a), the Secretary may issue guidance or 
     promulgate regulations for the procurement of transportation 
     system management and operations facilities, equipment, and 
     services, including--
       ``(A) equipment procured in preparation for natural 
     disasters, disasters caused by human activity, and 
     emergencies;
       ``(B) system hardware;
       ``(C) software; and
       ``(D) software integration services.
       ``(2) Considerations.--In developing the guidance or 
     regulations under paragraph (1), the Secretary may consider 
     innovative procurement methods that support the timely and 
     streamlined execution of transportation system management and 
     operations programs and projects.
       ``(3) Financial assistance.--The Secretary may authorize 
     the use of funds made available under section 104(b)(3) to 
     provide assistance for regional operations collaboration and 
     coordination activities that are associated with regional 
     improvements, such as--
       ``(A) traffic incident management;
       ``(B) technology deployment;
       ``(C) emergency management and response;
       ``(D) traveler information; and
       ``(E) congestion relief.''.
       (2) Conforming amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1620(c)), is amended by adding at the end:

``168. Transportation systems management and operations.''.

[[Page 10860]]



     SEC. 1702. REAL-TIME SYSTEM MANAGEMENT INFORMATION PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1701(c)(1)), is 
     amended by adding at the end the following:

     ``Sec. 169. Real-time system management information program

       ``(a) In General.--The Secretary shall carry out a real-
     time system management information program to--
       ``(1) provide a nationwide system of basic real-time 
     information for managing and operating the surface 
     transportation system;
       ``(2)(A) identify long-range real-time highway and transit 
     monitoring needs; and
       ``(B) develop plans and strategies for meeting those needs;
       ``(3) provide the capability and means to share the basic 
     real-time information with State and local governments and 
     the traveling public; and
       ``(4) provide the nationwide capability to monitor, in 
     real-time, the traffic and travel conditions of major 
     highways in the United States, and to share that information 
     with State and local governments and the traveling public, 
     to--
       ``(A) improve the security of the surface transportation 
     system;
       ``(B) address congestion problems;
       ``(C) support improved response to weather events; and
       ``(D) facilitate the distribution of national and regional 
     traveler information.
       ``(b) Data Exchange Formats.--Not later than 1 year after 
     the date of enactment of this section, the Secretary shall 
     establish data exchange formats to ensure that the data 
     provided by highway and transit monitoring systems (including 
     statewide incident reporting systems) can readily be 
     exchanged between jurisdictions to facilitate the nationwide 
     availability of information on traffic and travel conditions.
       ``(c) Statewide Incident Reporting System.--Not later than 
     2 years after the date of enactment of this section, or not 
     later than 5 years after the date of enactment of this 
     section if the Secretary determines that adequate real-time 
     communications capability will not be available within 2 
     years after the date of enactment of this section, each State 
     shall establish a statewide incident reporting system to 
     facilitate the real-time electronic reporting of highway and 
     transit incidents to a central location for use in--
       ``(1) monitoring an incident;
       ``(2) providing accurate traveler information on the 
     incident; and
       ``(3) responding to the incident as appropriate.
       ``(d) Regional ITS Architecture.--
       ``(1) In general.--In developing or updating regional 
     intelligent transportation system architectures under section 
     940.9 of title 23, Code of Federal Regulations (or any 
     successor regulation), States and local governments shall 
     address--
       ``(A) the real-time highway and transit information needs 
     of the State or local government, including coverage, 
     monitoring systems, data fusion and archiving, and methods of 
     exchanging or sharing information; and
       ``(B) the systems needed to meet those needs.
       ``(2) Data exchange formats.--In developing or updating 
     regional intelligent transportation system architectures, 
     States and local governments are encouraged to incorporate 
     the data exchange formats developed by the Secretary under 
     subsection (b) to ensure that the data provided by highway 
     and transit monitoring systems can readily be--
       ``(A) exchanged between jurisdictions; and
       ``(B) shared with the traveling public.
       ``(e) Eligible Funding.--Subject to project approval by the 
     Secretary, a State may--
       ``(1) use funds available to the State under section 505(a) 
     to carry out activities relating to the planning of real-time 
     monitoring elements; and
       ``(2) use funds apportioned to the State under paragraphs 
     (1) and (3) of section 104(b) to carry out activities 
     relating to the planning and deployment of real-time 
     monitoring elements.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1701(c)(2)), is amended adding at the end the 
     following:

``169. Real-time system management information program.''.

     SEC. 1703. CONTRACTING FOR ENGINEERING AND DESIGN SERVICES.

       Section 112(b)(2) of title 23, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``title 40'' and all 
     that follows through the period and inserting ``title 40.'';
       (2) by striking subparagraph (B);
       (3) by redesignating subparagraphs (C) through (F) as 
     subparagraphs (B) through (E), respectively; and
       (4) by striking subparagraph (G).

     SEC. 1704. OFF-DUTY TIME FOR DRIVERS OF COMMERCIAL VEHICLES.

       Section 345(a)(2) of the National Highway System 
     Designation Act of 1995 (49 U.S.C. 31136 note; 109 Stat. 613) 
     is amended by adding at the end the following: ``No 
     additional off-duty time for a driver of such a vehicle shall 
     be required in order for the driver to operate the 
     vehicle.''.

     SEC. 1705. DESIGNATION OF TRANSPORTATION MANAGEMENT AREAS.

       (a) Funding.--Section 134(d)(3)(C)(ii) of title 23, United 
     States Code, is amended by striking subclause (II) and 
     inserting the following:

       ``(II) Funding.--In addition to funds made available to the 
     metropolitan planning organization for the Lake Tahoe Region 
     under this title and chapter 53 of title 49, 1 percent of all 
     funds distributed under section 202 shall be used to carry 
     out the transportation planning process for the Lake Tahoe 
     region under this subparagraph.''.

       (b) Special Designation.--Section 134(i)(1) of title 23, 
     United States Code, is amended by adding at the end the 
     following:
       ``(C) Special designation.--
       ``(i) In general.--The urbanized areas of Oklahoma City, 
     Oklahoma, and Norman, Oklahoma, shall be designated as a 
     single transportation management area.
       ``(ii) Allocation.--The allocation of funds to the Oklahoma 
     City-Norman Transportation Management Area designated under 
     clause (i) shall be based on the aggregate population of the 
     2 urbanized areas referred to in that clause, as determined 
     by the Bureau of the Census.''.

                  Subtitle H--Federal-Aid Stewardship

     SEC. 1801. FUTURE INTERSTATE SYSTEM ROUTES.

       Section 103(c)(4)(B) of title 23, United States Code, is 
     amended--
       (1) in clause (ii), by striking ``12'' and inserting 
     ``25''; and
       (2) in clause (iii)--
       (A) in subclause (I), by striking ``in the agreement 
     between the Secretary and the State or States''; and
       (B) by adding at the end the following:

       ``(III) Existing agreements.--An agreement described in 
     clause (ii) that is entered into before the date of enactment 
     of this subparagraph shall be deemed to include the 25-year 
     time limitation described in that clause, regardless of any 
     earlier construction completion date in the agreement.''.

     SEC. 1802. STEWARDSHIP AND OVERSIGHT.

       (a) In General.--Section 106 of title 23, United States 
     Code, is amended--
       (1) by striking subsection (e) and inserting the following:
       ``(e) Value Engineering Analysis.--
       ``(1) Definition of value engineering analysis.--
       ``(A) In general.--In this subsection, the term `value 
     engineering analysis' means a systematic process of review 
     and analysis of a project, during the concept and design 
     phases, by a multidisciplined team of persons not involved in 
     the project, that is conducted to provide recommendations 
     such as those described in subparagraph (B) for--
       ``(i) providing the needed functions safely, reliably, and 
     at the lowest overall cost; and
       ``(ii) improving the value and quality of the project.
       ``(B) Inclusions.--The recommendations referred to in 
     subparagraph (A) include, with respect to a project--
       ``(i) combining or eliminating otherwise inefficient use of 
     costly parts of the original proposed design for the project; 
     and
       ``(ii) completely redesigning the project using different 
     technologies, materials, or methods so as to accomplish the 
     original purpose of the project.
       ``(2) Analysis.--The State shall provide a value 
     engineering analysis or other cost-reduction analysis for--
       ``(A) each project on the Federal-Aid System with an 
     estimated total cost of $25,000,000 or more;
       ``(B) a bridge project with an estimated total cost of 
     $20,000,000 or more; and
       ``(C) any other project the Secretary determines to be 
     appropriate.
       ``(3) Major projects.--The Secretary may require more than 
     1 analysis described in paragraph (2) for a major project 
     described in subsection (h).
       ``(4) Requirements.--Analyses described in paragraph (1) 
     for a bridge project shall--
       ``(A) include bridge substructure requirements based on 
     construction material; and
       ``(B) be evaluated--
       ``(i) on engineering and economic bases, taking into 
     consideration acceptable designs for bridges; and
       ``(ii) using an analysis of life-cycle costs and duration 
     of project construction.''; and
       (2) by striking subsections (g) and (h) and inserting the 
     following:
       ``(g) Oversight Program.--
       ``(1) Program.--
       ``(A) In general.--The Secretary shall establish an 
     oversight program to monitor the effective and efficient use 
     of funds made available under this title.
       ``(B) Minimum requirements.--At a minimum, the program 
     shall monitor and respond to all areas relating to financial 
     integrity and project delivery.
       ``(2) Financial integrity.--
       ``(A) Financial management systems.--
       ``(i) In general.--The Secretary shall perform annual 
     reviews of the financial management systems of State 
     transportation departments that affect projects approved 
     under subsection (a).
       ``(ii) Review areas.--In carrying out clause (i), the 
     Secretary shall use risk assessment procedures to identify 
     areas to be reviewed.
       ``(B) Project costs.--The Secretary shall--
       ``(i) develop minimum standards for estimating project 
     costs; and
       ``(ii) periodically evaluate practices of the States for--

       ``(I) estimating project costs;
       ``(II) awarding contracts; and
       ``(III) reducing project costs.

       ``(C) Responsibility of the states.--
       ``(i) In general.--Each State shall be responsible for 
     ensuring that subrecipients of Federal funds within the State 
     under this section have--

       ``(I) sufficient accounting controls to properly manage the 
     Federal funds; and

[[Page 10861]]

       ``(II) adequate project delivery systems for projects 
     approved under this section.

       ``(ii) Review by secretary.--The Secretary shall 
     periodically review monitoring by the States of those 
     subrecipients.
       ``(3) Project delivery.--The Secretary shall--
       ``(A) perform annual reviews of the project delivery system 
     of each State, including analysis of 1 or more activities 
     that are involved in the life cycle of a project; and
       ``(B) employ risk assessment procedures to identify areas 
     to be reviewed.
       ``(4) Specific oversight responsibilities.--Nothing in this 
     section discharges or otherwise affects any oversight 
     responsibility of the Secretary--
       ``(A) specifically provided for under this title or other 
     Federal law; or
       ``(B) for the design and construction of all Appalachian 
     development highways under section 14501 of title 40 or 
     section 170 of this title.
       ``(h) Major Projects.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, a recipient of Federal financial assistance for 
     a project under this title with an estimated total cost of 
     $1,000,000,000 or more, and recipients for such other 
     projects as may be identified by the Secretary, shall submit 
     to the Secretary for each project--
       ``(A) a project management plan; and
       ``(B) an annual financial plan.
       ``(2) Project management plan.--A project management plan 
     shall document--
       ``(A) the procedures and processes that are in effect to 
     provide timely information to the project decisionmakers to 
     effectively manage the scope, costs, schedules, and quality 
     of, and the Federal requirements applicable to, the project; 
     and
       ``(B) the role of the agency leadership and management team 
     in the delivery of the project.
       ``(3) Financial plan.--A financial plan shall--
       ``(A) be based on detailed estimates of the cost to 
     complete the project; and
       ``(B) provide for the annual submission of updates to the 
     Secretary that are based on reasonable assumptions, as 
     determined by the Secretary, of future increases in the cost 
     to complete the project.
       ``(i) Other Projects.--A recipient of Federal financial 
     assistance for a project under this title that receives 
     $100,000,000 or more in Federal assistance for the project, 
     and that is not covered by subsection (h), shall prepare, and 
     make available to the Secretary at the request of the 
     Secretary, an annual financial plan for the project.''.
       (b) Conforming Amendments.--
       (1) Section 114(a) of title 23, United States Code, is 
     amended--
       (A) in the first sentence by striking ``highways or 
     portions of highways located on a Federal-aid system'' and 
     inserting ``Federal-aid highway or a portion of a Federal-aid 
     highway''; and
       (B) by striking the second sentence and inserting ``The 
     Secretary shall have the right to conduct such inspections 
     and take such corrective action as the Secretary determines 
     to be appropriate.''.
       (2) Section 117 of title 23, United States Code, is 
     amended--
       (A) by striking subsection (d); and
       (B) by redesignating subsections (e) through (h) as 
     subsections (d) through (g), respectively.
       (c) Contractor Suspension and Debarment Policy; Sharing 
     Fraud Monetary Recoveries.--
       (1) In general.--Section 307 of title 49, United States 
     Code, is amended to read as follows:

     ``Sec. 307. Contractor suspension and debarment policy; 
       sharing fraud monetary recoveries

       ``(a) Mandatory Enforcement Policy.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Secretary--
       ``(A) shall debar any contractor or subcontractor convicted 
     of a criminal or civil offense involving fraud relating to a 
     project receiving Federal highway or transit funds for such 
     period as the Secretary determines to be appropriate; and
       ``(B) subject to approval by the Attorney General--
       ``(i) except as provided in paragraph (2), shall suspend 
     any contractor or subcontractor upon indictment for criminal 
     or civil offenses involving fraud; and
       ``(ii) may exclude nonaffiliated subsidiaries of a debarred 
     business entity.
       ``(2) National security exception.--If the Secretary finds 
     that mandatory debarment or suspension of a contractor or 
     subcontractor under paragraph (1) would be contrary to the 
     national security of the United States, the Secretary--
       ``(A) may waive the debarment or suspension; and
       ``(B) in the instance of each waiver, shall provide 
     notification to Congress of the waiver with appropriate 
     details.
       ``(b) Sharing of Monetary Recoveries.--
       ``(1) In general.--Notwithstanding any other provision of 
     law--
       ``(A) monetary judgments accruing to the Federal Government 
     from judgments in Federal criminal prosecutions and civil 
     judgments pertaining to fraud in highway and transit programs 
     shall be shared with the State or local transit agency 
     involved; and
       ``(B) the State or local transit agency shall use the funds 
     for transportation infrastructure and oversight activities 
     relating to programs authorized under title 23 and this 
     title.
       ``(2) Amount.--The amount of recovered funds to be shared 
     with an affected State or local transit agency shall be--
       ``(A) determined by the Attorney General, in consultation 
     with the Secretary; and
       ``(B) considered to be Federal funds to be used in 
     compliance with other relevant Federal transportation laws 
     (including regulations).
       ``(3) Fraudulent activity.--Paragraph (1) shall not apply 
     in any case in which a State or local transit agency is found 
     by the Attorney General, in consultation with the Secretary, 
     to have been involved or negligent with respect to the 
     fraudulent activities.''.
       (2) Conforming amendment.--The analysis for chapter 3 of 
     title 49, United States Code, is amended by striking the item 
     relating to section 307 and inserting the following:

``307. Contractor suspension and debarment policy; sharing fraud 
              monetary recoveries.''.

     SEC. 1803. DESIGN-BUILD CONTRACTING.

       Section 112(b)(3) of title 23, United States Code, is 
     amended by striking subparagraph (C) and inserting the 
     following:
       ``(C) Qualified projects.--A qualified project referred to 
     in subparagraph (A) is a project under this chapter 
     (including intermodal projects) for which the Secretary has 
     approved the use of design-build contracting under criteria 
     specified in regulations promulgated by the Secretary.''.

     SEC. 1804. PROGRAM EFFICIENCIES--FINANCE.

       (a) Advance Construction.--Section 115 of title 23, United 
     States Code, is amended--
       (1) by redesignating subsection (c) as subsection (d);
       (2) by redesignating subsections (a)(2), (a)(2)(A), and 
     (a)(2)(B) as subsections (c), (c)(1), and (c)(2), 
     respectively, and indenting appropriately;
       (3) by striking ``(a) Congestion'' and all that follows 
     through subsection (a)(1)(B);
       (4) by striking subsection (b); and
       (5) by inserting after the section heading the following:
       ``(a) In General.--The Secretary may authorize a State to 
     proceed with a project authorized under this title--
       ``(1) without the use of Federal funds; and
       ``(2) in accordance with all procedures and requirements 
     applicable to the project other than those procedures and 
     requirements that limit the State to implementation of a 
     project--
       ``(A) with the aid of Federal funds previously apportioned 
     or allocated to the State; or
       ``(B) with obligation authority previously allocated to the 
     State.
       ``(b) Obligation of Federal Share.--The Secretary, on the 
     request of a State and execution of a project agreement, may 
     obligate all or a portion of the Federal share of the project 
     authorized under this section from any category of funds for 
     which the project is eligible.''.
       (b) Obligation and Release of Funds.--Section 118 of title 
     23, United States Code, is amended by striking subsection (d) 
     and inserting the following:
       ``(d) Obligation and Release of Funds.--
       ``(1) In general.--Funds apportioned or allocated to a 
     State for a particular purpose for any fiscal year shall be 
     considered to be obligated if a sum equal to the total of the 
     funds apportioned or allocated to the State for that purpose 
     for that fiscal year and previous fiscal years is obligated.
       ``(2) Released funds.--Any funds released by the final 
     payment for a project, or by modifying the project agreement 
     for a project, shall be--
       ``(A) credited to the same class of funds previously 
     apportioned or allocated to the State; and
       ``(B) immediately available for obligation.
       ``(3) Net obligations.--Notwithstanding any other provision 
     of law (including a regulation), obligations recorded against 
     funds made available under this section shall be recorded and 
     reported as net obligations.''.

     SEC. 1805. SET-ASIDES FOR INTERSTATE DISCRETIONARY PROJECTS.

       Section 118(c)(1) of title 23, United States Code, is 
     amended--
       (1) by striking ``$50,000,000'' and all that follows 
     through ``2003'' and inserting ``$100,000,000 for each of 
     fiscal years 2004 through 2009''; and
       (2) by striking ``Transportation Equity Act for the 21st 
     Century'' and inserting ``Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004''.

     SEC. 1806. FEDERAL LANDS HIGHWAYS PROGRAM.

       (a) Federal Share Payable.--
       (1) In general.--Section 120(k) of title 23, United States 
     Code, is amended--
       (A) by striking ``Federal-aid highway''; and
       (B) by striking ``section 104'' and inserting ``this title 
     or chapter 53 of title 49''.
       (2) Technical references.--Section 120(l) of title 23, 
     United States Code, is amended by striking ``section 104'' 
     and inserting ``this title or chapter 53 of title 49''.
       (b) Payments to Federal Agencies for Federal-Aid 
     Projects.--Section 132 of title 23, United States Code, is 
     amended--
       (1) by striking the first 2 sentences and inserting the 
     following:
       ``(a) In General.--In a case in which a proposed Federal-
     aid project is to be undertaken by a Federal agency in 
     accordance with an agreement between a State and the Federal 
     agency, the State may--
       ``(1) direct the Secretary to transfer the funds for the 
     Federal share of the project directly to the Federal agency; 
     or
       ``(2) make such deposit with, or payment to, the Federal 
     agency as is required to meet the obligation of the State 
     under the agreement for the work undertaken or to be 
     undertaken by the Federal agency.

[[Page 10862]]

       ``(b) Reimbursement.--On execution of a project agreement 
     with a State described in subsection (a), the Secretary may 
     reimburse the State, using any available funds, for the 
     estimated Federal share under this title of the obligation of 
     the State deposited or paid under subsection (a)(2).''; and
       (2) in the last sentence, by striking ``Any sums'' and 
     inserting the following:
       ``(c) Recovery and Crediting of Funds.--Any sums''.
       (c) Allocations.--Section 202 of title 23, United States 
     Code, is amended--
       (1) in subsection (a), by striking ``(a) On October 1'' and 
     all that follows through ``Such allocation'' and inserting 
     the following:
       ``(a) Allocation Based on Need.--
       ``(1) In general.--On October 1 of each fiscal year, the 
     Secretary shall allocate sums authorized to be appropriated 
     for the fiscal year for forest development roads and trails 
     according to the relative needs of the various national 
     forests and grasslands.
       ``(2) Planning.--The allocation under paragraph (1)'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Allocation for Public Lands Highways.--
       ``(1) Public lands highways.--
       ``(A) In general.--On October 1 of each fiscal year, the 
     Secretary shall allocate 33\1/3\ percent of the sums 
     authorized to be appropriated for that fiscal year for public 
     lands highways among those States having unappropriated or 
     unreserved public lands, or nontaxable Indian lands or other 
     Federal reservations, on the basis of need in the States, 
     respectively, as determined by the Secretary, on application 
     of the State transportation departments of the respective 
     States.
       ``(B) Preference.--In making the allocation under 
     subparagraph (A), the Secretary shall give preference to 
     those projects that are significantly impacted by Federal 
     land and resource management activities that are proposed by 
     a State that contains at least 3 percent of the total public 
     land in the United States.
       ``(2) Forest highways.--
       ``(A) In general.--On October 1 of each fiscal year, the 
     Secretary shall allocate 66\2/3\ percent of the funds 
     authorized to be appropriated for public lands highways for 
     forest highways in accordance with section 134 of the 
     Federal-Aid Highway Act of 1987 (23 U.S.C. 202 note; 101 
     Stat. 173).
       ``(B) Public access to and within national forest system.--
     In making the allocation under subparagraph (A), the 
     Secretary shall give equal consideration to projects that 
     provide access to and within the National Forest System, as 
     identified by the Secretary of Agriculture through--
       ``(i) renewable resource and land use planning; and
       ``(ii) assessments of the impact of that planning on 
     transportation facilities.'';
       (3) in subsection (c)--
       (A) by striking ``(c) On'' and inserting the following:
       ``(c) Park Roads and Parkways.--
       ``(1) In general.--On''; and
       (B) by adding at the end the following:
       ``(2) Priority.--
       ``(A) Definition of qualifying national park.--In this 
     paragraph, the term ``qualifying national park'' means a 
     National Park that is used more than 1,000,000 recreational 
     visitor days per year, based on an average of the 3 most 
     recent years of available data from the National Park 
     Service.
       ``(B) Priority.--Notwithstanding any other provision of 
     law, with respect to funds authorized for park roads and 
     parkways, the Secretary shall give priority in the allocation 
     of funds to projects for highways that--
       ``(i) are located in, or provide access to, a qualifying 
     National Park; and
       ``(ii) were initially constructed before 1940.
       ``(C) Priority conflicts.--If there is a conflict between 
     projects described in subparagraph (B), the Secretary shall 
     give highest priority to projects that--
       ``(i) are in, or that provide access to, parks that are 
     adjacent to a National Park of a foreign country; or
       ``(ii) are located in more than 1 State;'';
       (4) in subsection (d)--
       (A) in paragraph (1)--
       (i) in the paragraph heading, by striking ``1999'' and 
     inserting ``2005''; and
       (ii) by striking ``1999'' and inserting ``2005'';
       (B) in paragraph (2)--
       (i) in the paragraph heading, by striking ``2000'' and 
     inserting ``2005'';
       (ii) in subparagraphs (A), (B), and (D), by striking 
     ``2000'' each place it appears and inserting ``2005'';
       (iii) in subparagraph (B), by striking ``1999'' each place 
     it appears and inserting ``2004''; and
       (iv) by adding at the end the following:
       ``(E) Transferred funds.--
       ``(i) In general.--Not later than 30 days after the date on 
     which funds are made available to the Secretary of the 
     Interior under this paragraph, the funds shall be distributed 
     to, and available for immediate use by, the eligible Indian 
     tribes, in accordance with the formula applicable for each 
     fiscal year.
       ``(ii) Formula.--If the Secretary of the Interior has not 
     promulgated final regulations for the distribution of funds 
     under clause (i) for a fiscal year by the date on which the 
     funds for the fiscal year are required to be distributed 
     under that clause, the Secretary of the Interior shall 
     distribute the funds under clause (i) in accordance with the 
     applicable funding formula for the preceding year.
       ``(iii) Use of funds.--Notwithstanding any other provision 
     of this section, funds available to Indian tribes for Indian 
     reservation roads shall be expended on projects identified in 
     a transportation improvement program approved by the 
     Secretary.'';
       (C) in paragraph (3)--
       (i) in subparagraph (A), by striking ``under this title'' 
     and inserting ``under this chapter and section 125(e)''; and
       (ii) by adding at the end the following:
       ``(C) Federal lands highway program demonstration 
     project.--
       ``(i) In general.--The Secretary shall establish a 
     demonstration project under which all funds made available 
     under this chapter for Indian reservation roads and for 
     highway bridges located on Indian reservation roads as 
     provided for in subparagraph (A) shall be made available, on 
     the request of an affected Indian tribal government, to the 
     Indian tribal government for use in carrying out, in 
     accordance with the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450b et seq.), contracts and 
     agreements for the planning, research, engineering, and 
     construction described in that subparagraph.
       ``(ii) Exclusion of agency participation.--In accordance 
     with subparagraph (B), all funds for Indian reservation roads 
     and for highway bridges located on Indian reservation roads 
     to which clause (i) applies shall be paid without regard to 
     the organizational level at which the Federal lands highway 
     program has previously carried out the programs, functions, 
     services, or activities involved.
       ``(iii) Selection of participating tribes.--

       ``(I) Participants.--

       ``(aa) In general.--In addition to Indian tribes or tribal 
     organizations that, as of the date of enactment of this 
     subparagraph, are contracting or compacting for any Indian 
     reservation road function or program, for each fiscal year, 
     the Secretary may select up to 15 Indian tribes from the 
     applicant pool described in subclause (II) to participate in 
     the demonstration project carried out under clause (i).
       ``(bb) Consortia.--Two or more Indian tribes that are 
     otherwise eligible to participate in a program or activity to 
     which this title applies may form a consortium to be 
     considered as a single Indian tribe for the purpose of 
     becoming part of the applicant pool under subclause (II).
       ``(cc) Funding.--An Indian tribe participating in the pilot 
     program under this subparagraph shall receive funding in an 
     amount equal to the sum of the funding that the Indian tribe 
     would otherwise receive in accordance with the funding 
     formula established under the other provisions of this 
     subsection, and an additional percentage of that amount equal 
     to the percentage of funds withheld during the applicable 
     fiscal year for the road program management costs of the 
     Bureau of Indian Affairs under subsection (f)(1).

       ``(II) Applicant pool.--The applicant pool described in 
     this subclause shall consist of each Indian tribe (or 
     consortium) that--

       ``(aa) has successfully completed the planning phase 
     described in subclause (IV);
       ``(bb) has requested participation in the demonstration 
     project under this subparagraph through the adoption of a 
     resolution or other official action by the tribal governing 
     body; and
       ``(cc) has demonstrated financial stability and financial 
     management capability in accordance with subclause (III) 
     during the 3-fiscal-year period immediately preceding the 
     fiscal year for which participation under this subparagraph 
     is being requested.

       ``(III) Criteria for determining financial stability and 
     financial management capacity.--For the purpose of subclause 
     (II), evidence that, during the 3-year period referred to in 
     subclause (II)(cc), an Indian tribe had no uncorrected 
     significant and material audit exceptions in the required 
     annual audit of the Indian tribe's self-determination 
     contracts or self-governance funding agreements with any 
     Federal agency shall be conclusive evidence of the required 
     stability and capability.
       ``(IV) Planning phase.--

       ``(aa) In general.--An Indian tribe (or consortium) 
     requesting participation in the demonstration project under 
     this subparagraph shall complete a planning phase that shall 
     include legal and budgetary research and internal tribal 
     government and organization preparation.
       ``(bb) Eligibility.--An Indian tribe (or consortium) 
     described in item (aa) shall be eligible to receive a grant 
     under this subclause to plan and negotiate participation in a 
     project described in that item.

       ``(V) Report to congress.--Not later than September 30, 
     2006, the Secretary shall submit to Congress a report 
     describing the implementation of the demonstration project 
     and any recommendations for improving the project.''; and

       (D) in paragraph (4)--
       (i) in subparagraph (B)--

       (I) by striking ``(B) Reservation.--Of the amounts'' and 
     all that follows through ``to replace,'' and inserting the 
     following:

       ``(B) Funding.--
       ``(i) Authorization of appropriations.--In addition to any 
     other funds made available for Indian reservation roads for 
     each fiscal year, there is authorized to be appropriated from 
     the Highway Trust Fund (other than the Mass Transit Account) 
     $15,000,000 for each of fiscal years 2004 through 2009 to 
     carry out planning, design, engineering, preconstruction, 
     construction, and inspection of projects to replace,''; and

[[Page 10863]]

       (II) by adding at the end the following:

       ``(ii) Availability.--Funds made available to carry out 
     this subparagraph shall be available for obligation in the 
     same manner as if the funds were apportioned under chapter 
     1.''; and
       (ii) by striking subparagraph (D) and inserting the 
     following:
       ``(D) Approval requirement.--
       ``(i) In general.--Subject to clause (ii), on request by an 
     Indian tribe or the Secretary of the Interior, the Secretary 
     may make funds available under this subsection for 
     preliminary engineering for Indian reservation road bridge 
     projects.
       ``(ii) Construction and construction engineering.--The 
     Secretary may make funds available under clause (i) for 
     construction and construction engineering only after approval 
     by the Secretary of applicable plans, specifications, and 
     estimates.''; and
       (5) by adding at the end the following:
       ``(f) Administration of Indian Reservation Roads.--
       ``(1) Contract authority.--Notwithstanding any other 
     provision of law, for any fiscal year, not more than 6 
     percent of the contract authority amounts made available from 
     the Highway Trust Fund to the Bureau of Indian Affairs under 
     this title shall be used to pay the expenses incurred by the 
     Bureau in administering the Indian reservation roads program 
     (including the administrative expenses relating to individual 
     projects associated with the Indian reservation roads 
     program).
       ``(2) Health and safety assurances.--Notwithstanding any 
     other provision of law, an Indian tribe or tribal 
     organization may commence road and bridge construction under 
     the Transportation Equity Act for the 21st Century (Public 
     Law 105-178) or the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004 that is funded 
     through a contract or agreement under the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b et 
     seq.) if the Indian tribe or tribal organization--
       ``(A) provides assurances in the contract or agreement that 
     the construction will meet or exceed applicable health and 
     safety standards;
       ``(B) obtains the advance review of the plans and 
     specifications from a licensed professional that has 
     certified that the plans and specifications meet or exceed 
     the applicable health and safety standards; and
       ``(C) provides a copy of the certification under 
     subparagraph (B) to the Assistant Secretary for Indian 
     Affairs.''.
       (d) Planning and Agency Coordination.--Section 204 of title 
     23, United States Code, is amended--
       (1) in subsection (a)(1), by inserting ``refuge roads, 
     recreation roads,'' after ``parkways,'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Use of Funds.--
       ``(1) In general.--Funds available for public lands 
     highways, recreation roads, park roads and parkways, forest 
     highways, and Indian reservation roads shall be used by the 
     Secretary and the Secretary of the appropriate Federal land 
     management agency to pay the cost of transportation planning, 
     research, engineering, operation and maintenance of transit 
     facilities, and construction of the highways, roads, 
     parkways, forest highways, and transit facilities located on 
     public land, national parks, and Indian reservations.
       ``(2) Contract.--In connection with an activity described 
     in paragraph (1), the Secretary and the Secretary of the 
     appropriate Federal land management agency may enter into a 
     construction contract or other appropriate agreement with--
       ``(A) a State (including a political subdivision of a 
     State); or
       ``(B) an Indian tribe.
       ``(3) Indian reservation roads.--In the case of an Indian 
     reservation road--
       ``(A) Indian labor may be used, in accordance with such 
     rules and regulations as may be promulgated by the Secretary 
     of the Interior, to carry out any construction or other 
     activity described in paragraph (1); and
       ``(B) funds made available to carry out this section may be 
     used to pay bridge preconstruction costs (including planning, 
     design, and engineering).
       ``(4) Federal employment.--No maximum on Federal employment 
     shall be applicable to construction or improvement of Indian 
     reservation roads.
       ``(5) Availability of funds.--Funds available under this 
     section for each class of Federal lands highway shall be 
     available for any kind of transportation project eligible for 
     assistance under this title that is within or adjacent to, or 
     that provides access to, the areas served by the particular 
     class of Federal lands highway.
       ``(6) Reservation of funds.--The Secretary of the Interior 
     may reserve funds from administrative funds of the Bureau of 
     Indian Affairs that are associated with the Indian 
     reservation road program to finance the Indian technical 
     centers authorized under section 504(b).''; and
       (3) in subsection (k)(1)--
       (A) in subparagraph (B)--
       (i) by striking ``(2), (5),'' and inserting ``(2), (3), 
     (5),''; and
       (ii) by striking ``and'' after the semicolon;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(D) maintenance of public roads in national fish 
     hatcheries under the jurisdiction of the United States Fish 
     and Wildlife Service;
       ``(E) the non-Federal share of the cost of any project 
     funded under this title or chapter 53 of title 49 that 
     provides access to or within a wildlife refuge; and
       ``(F) maintenance and improvement of recreational trails 
     (except that expenditures on trails under this subparagraph 
     shall not exceed 5 percent of available funds for each fiscal 
     year).''.
       (e) Maintenance of Indian Reservation Roads.--Section 
     204(c) of title 23, United States Code, is amended by 
     striking the second and third sentences and inserting the 
     following: ``Notwithstanding any other provision of this 
     title, of the amount of funds apportioned for Indian 
     reservation roads from the Highway Trust Fund, an Indian 
     tribe may expend for the purpose of maintenance not more than 
     the greater of $250,000 or 25 percent of the apportioned 
     amount. The Bureau of Indian Affairs shall continue to retain 
     primary responsibility, including annual funding request 
     responsibility, for road maintenance programs on Indian 
     reservations. The Secretary shall ensure that funding made 
     available under this subsection for maintenance of Indian 
     reservation roads for each fiscal year is supplementary to 
     and not in lieu of any obligation of funds by the Bureau of 
     Indian Affairs for road maintenance programs on Indian 
     reservations.''.
       (e) Safety.--
       (1) Allocations.--Section 202 of title 23, United States 
     Code (as amended by subsection (c)(5)), is amended by adding 
     at the end the following:
       ``(g) Safety.--Subject to paragraph (2), on October 1 of 
     each fiscal year, the Secretary shall allocate the sums 
     authorized to be appropriated for the fiscal year for safety 
     as follows:
       ``(1) 12 percent to the Bureau of Reclamation.
       ``(2) 18 percent to the Bureau of Indian Affairs.
       ``(3) 17 percent to the Bureau of Land Management.
       ``(4) 17 percent to the Forest Service.
       ``(5) 7 percent to the United States Fish and Wildlife 
     Service.
       ``(6) 17 percent to the National Park Service.
       ``(7) 12 percent to the Corps of Engineers.''.
       (2) Availability of funds.--Section 203 of title 23, United 
     States Code, is amended by inserting ``safety projects or 
     activities,'' after ``refuge roads,'' each place it appears.
       (3) Use of funding.--Section 204 of title 23, United States 
     Code, is amended by adding at the end the following:
       ``(l) Safety Activities.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, funds made available for safety under this title 
     shall be used by the Secretary and the head of the 
     appropriate Federal land management agency only to pay the 
     costs of carrying out--
       ``(A) transportation safety improvement activities;
       ``(B) activities to eliminate high-accident locations;
       ``(C) projects to implement protective measures at, or 
     eliminate, at-grade railway-highway crossings;
       ``(D) collection of safety information;
       ``(E) transportation planning projects or activities;
       ``(F) bridge inspection;
       ``(G) development and operation of safety management 
     systems;
       ``(H) highway safety education programs; and
       ``(I) other eligible safety projects and activities 
     authorized under chapter 4.
       ``(2) Contracts.--In carrying out paragraph (1), the 
     Secretary and the Secretary of the appropriate Federal land 
     management agency may enter into contracts or agreements 
     with--
       ``(A) a State;
       ``(B) a political subdivision of a State; or
       ``(C) an Indian tribe.
       ``(3) Exception.--The cost sharing requirements under the 
     Federal Water Project Recreation Act (16 U.S.C. 460l-12 et 
     seq.) shall not apply to funds made available to the Bureau 
     of Reclamation under this subsection.''.
       (f) Recreation Roads.--
       (1) Authorizations.--Section 201 of title 23, United States 
     Code, is amended in the first sentence by inserting 
     ``recreation roads,'' after ``public lands highways,''.
       (2) Allocations.--Section 202 of title 23, United States 
     Code (as amended by subsection (e)(1)), is amended by adding 
     at the end the following:
       ``(h) Recreation Roads.--
       ``(1) In general.--Subject to paragraphs (2) and (3), on 
     October 1 of each fiscal year, the Secretary, after 
     completing the transfer under subsection 204(i), shall 
     allocate the sums authorized to be appropriated for the 
     fiscal year for recreation roads as follows:
       ``(A) 8 percent to the Bureau of Reclamation.
       ``(B) 9 percent to the Corps of Engineers.
       ``(C) 13 percent to the Bureau of Land Management.
       ``(D) 70 percent to the Forest Service.
       ``(2) Allocation within agencies.--Recreation road funds 
     allocated to a Federal agency under paragraph (1) shall be 
     allocated for projects and activities of the Federal agency 
     according to the relative needs of each area served by 
     recreation roads under the jurisdiction of the Federal 
     agency, as indicated in the approved transportation 
     improvement program for each Federal agency.''.
       (3) Availability of funds.--Section 203 of title 23, United 
     States Code, is amended--
       (A) in the first sentence, by inserting ``recreation 
     roads,'' after ``Indian reservation roads,''; and
       (B) in the fourth sentence, by inserting ``, recreation 
     roads,'' after ``Indian roads''.

[[Page 10864]]

       (4) Use of funding.--Section 204 of title 23, United States 
     Code (as amended by subsection (e)(3)), is amended by adding 
     at the end the following:
       ``(m) Recreation Roads.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, funds made available for recreation roads under 
     this title shall be used by the Secretary and the Secretary 
     of the appropriate Federal land management agency only to pay 
     the cost of--
       ``(A) maintenance or improvements of existing recreation 
     roads;
       ``(B) maintenance and improvements of eligible projects 
     described in paragraph (1), (2), (3), (5), or (6) of 
     subsection (h) that are located in or adjacent to Federal 
     land under the jurisdiction of--
       ``(i) the Department of Agriculture; or
       ``(ii) the Department of the Interior;
       ``(C) transportation planning and administrative activities 
     associated with those maintenance and improvements; and
       ``(D) the non-Federal share of the cost of any project 
     funded under this title or chapter 53 of title 49 that 
     provides access to or within Federal land described in 
     subparagraph (B).
       ``(2) Contracts.--In carrying out paragraph (1), the 
     Secretary and the Secretary of the appropriate Federal land 
     management agency may enter into contracts or agreements 
     with--
       ``(A) a State;
       ``(B) a political subdivision of a State; or
       ``(C) an Indian tribe.
       ``(3) New roads.--No funds made available under this 
     section shall be used to pay the cost of the design or 
     construction of new recreation roads.
       ``(4) Compliance with other environmental laws.--A 
     maintenance or improvement project that is funded under this 
     subsection, and that is consistent with or has been 
     identified in a land use plan for an area under the 
     jurisdiction of a Federal agency, shall not require any 
     additional environmental reviews or assessments under the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) if--
       ``(A) the Federal agency that promulgated the land use plan 
     analyzed the specific proposal for the maintenance or 
     improvement project under that Act; and
       ``(B) as of the date on which the funds are to be expended, 
     there are--
       ``(i) no significant changes to the proposal bearing on 
     environmental concerns; and
       ``(ii) no significant new information.
       ``(5) Exception.--The cost sharing requirements under the 
     Federal Water Project Recreation Act (16 U.S.C. 460l-12 et 
     seq.) shall not apply to funds made available to the Bureau 
     of Reclamation under this subsection.''.
       (g) Conforming Amendments.--
       (1) Sections 120(e) and 125(e) of title 23, United States 
     Code, are amended by striking ``public lands highways,'' each 
     place it appears and inserting ``public lands highways, 
     recreation roads,''.
       (2) Sections 120(e), 125(e), 201, 202(a), and 203 of title 
     23, United States Code, are amended by striking ``forest 
     development roads'' each place it appears and inserting 
     ``National Forest System roads''.
       (3) Section 202(e) of title 23, United States Code, is 
     amended by striking ``Refuge System,'' and inserting ``Refuge 
     System and the various national fish hatcheries,''.
       (4) Section 204 of title 23, United States Code, is 
     amended--
       (A) in subsection (a)(1), by striking ``public lands 
     highways,'' and inserting ``public lands highways, recreation 
     roads, forest highways,''; and
       (B) in subsection (i), by striking ``public lands 
     highways'' each place it appears and inserting ``public lands 
     highways, recreation roads, and forest highways''.
       (5) Section 205 of title 23, United States Code, is 
     amended--
       (A) by striking the section heading and inserting the 
     following:

     ``Sec. 205. National Forest System roads and trails'';

     and
       (B) in subsections (a) and (d), by striking ``forest 
     development roads'' each place it appears and inserting 
     ``National Forest System roads''.
       (6) The analysis for chapter 2 of title 23, United States 
     Code, is amended by striking the item relating to section 205 
     and inserting the following:

``205. National Forest System roads and trails.''.

       (7) Section 217(c) of title 23, United States Code, is 
     amended by inserting ``refuge roads,'' after ``Indian 
     reservation roads,''.

     SEC. 1807. HIGHWAY BRIDGE PROGRAM.

       (a) In General.--Section 144 of title 23, United States 
     Code, is amended--
       (1) by striking the section heading and all that follows 
     through subsection (a) and inserting the following:

     ``Sec. 144. Highway bridge program

       ``(a) Congressional Statement.--Congress finds and declares 
     that it is in the vital interest of the United States that a 
     highway bridge program be established to enable States to 
     improve the condition of their bridges through replacement, 
     rehabilitation, and systematic preventative maintenance on 
     highway bridges over waterways, other topographical barriers, 
     other highways, or railroads at any time at which the States 
     and the Secretary determine that a bridge is unsafe because 
     of structural deficiencies, physical deterioration, or 
     functional obsolescence.'';
       (2) by striking subsection (d) and inserting the following:
       ``(d) Participation in Program.--
       ``(1) In general.--On application by a State to the 
     Secretary for assistance in replacing or rehabilitating a 
     highway bridge that has been determined to be eligible for 
     replacement or rehabilitation under subsection (b) or (c), 
     the Secretary may approve Federal participation in--
       ``(A) replacing the bridge with a comparable bridge; or
       ``(B) rehabilitating the bridge.
       ``(2) Specific kinds of rehabilitation.--On application by 
     a State to the Secretary for assistance in painting, seismic 
     retrofit, or preventative maintenance of, or installation of 
     scour countermeasures or applying calcium magnesium acetate, 
     sodium acetate/formate, or other environmentally acceptable, 
     minimally corrosive anti-icing and de-icing compositions to, 
     the structure of a highway bridge, the Secretary may approve 
     Federal participation in the painting, seismic retrofit, or 
     preventative maintenance of, or installation of scour 
     countermeasures or application of acetate or sodium acetate/
     formate or such anti-icing or de-icing composition to, the 
     structure.
       ``(3) Eligibility.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary shall determine the eligibility of highway 
     bridges for replacement or rehabilitation for each State 
     based on the number of unsafe highway bridges in the State.
       ``(B) Preventative maintenance.--A State may carry out a 
     project for preventative maintenance on a bridge, seismic 
     retrofit of a bridge, or installation of scour 
     countermeasures to a bridge under this section without regard 
     to whether the bridge is eligible for replacement or 
     rehabilitation under this section.'';
       (3) in subsection (e)--
       (A) in the third sentence, by striking ``square footage'' 
     and inserting ``area'';
       (B) in the fourth sentence--
       (i) by striking ``by the total cost of any highway bridges 
     constructed under subsection (m) in such State, relating to 
     replacement of destroyed bridges and ferryboat services, 
     and,''; and
       (ii) by striking ``1997'' and inserting ``2003''; and
       (C) in the seventh sentence, by striking ``the Federal-aid 
     primary system'' and inserting ``Federal-aid highways'';
       (4) by striking subsections (f) and (g) and inserting the 
     following:
       ``(f) Set Asides.--
       ``(1) Discretionary bridge program.--
       ``(A) In general.--Of the amounts authorized to be 
     appropriated to carry out the bridge program under this 
     section for each of fiscal years 2004 through 2009, all but 
     $150,000,000 shall be apportioned as provided in subsection 
     (e).
       ``(B) Availability.--The $150,000,000 referred to in 
     subparagraph (A) shall be available at the discretion of the 
     Secretary, except that not to exceed $25,000,000 of that 
     amount shall be available only for projects for the seismic 
     retrofit of bridges.
       ``(C) Set asides.--For fiscal year 2004, the Secretary 
     shall provide--
       ``(i) $50,000,000 to the State of Nevada for construction 
     of a replacement of the federally-owned bridge over the 
     Hoover Dam in the Lake Mead National Recreation Area; and
       ``(ii) $50,000,000 to the State of Missouri for 
     construction of a structure over the Mississippi River to 
     connect the city of St. Louis, Missouri, to the State of 
     Illinois.
       ``(2) Off-system bridges.--
       ``(A) In general.--Not less than 15 percent of the amount 
     apportioned to each State in each of fiscal years 2004 
     through 2009 shall be expended for projects to replace, 
     rehabilitate, perform systematic preventative maintenance or 
     seismic retrofit, or apply calcium magnesium acetate, sodium 
     acetate/formate, or other environmentally acceptable, 
     minimally corrosive anti-icing and de-icing compositions or 
     install scour countermeasures to highway bridges located on 
     public roads, other than those on a Federal-aid highway, or 
     to complete the Warwick Intermodal Station (including the 
     construction of a people mover between the Station and the 
     T.F. Green Airport).
       ``(B) Reduction of expenditures.--The Secretary, after 
     consultation with State and local officials, may, with 
     respect to the State, reduce the requirement for expenditure 
     for bridges not on a Federal-aid highway if the Secretary 
     determines that the State has inadequate needs to justify the 
     expenditure.'';
       (5) in subsection (i)--
       (A) in paragraph (3), by striking ``and'';
       (B) in paragraph (4), by striking the period at the end and 
     inserting ``; and'';
       (C) by striking ``Such reports'' and all that follows 
     through ``to Congress.''; and
       (D) by adding at the end the following:
       ``(5) biennially submit such reports as are required under 
     this subsection to the appropriate committees of Congress 
     simultaneously with the report required by section 502(g).'';
       (6) in the first sentence of subsection (n), by striking 
     ``all standards'' and inserting ``all general engineering 
     standards'';
       (7) in subsection (o)--
       (A) in paragraph (3)--
       (i) by striking ``title (including this section)'' and 
     inserting ``section''; and
       (ii) by inserting ``200 percent of'' after ``shall not 
     exceed''; and
       (B) in paragraph (4)(B)--
       (i) in the second sentence, by inserting ``200 percent of'' 
     after ``not to exceed''; and
       (ii) in the last sentence, by striking ``title'' and 
     inserting ``section'';

[[Page 10865]]

       (8) by redesignating subsections (h) through (q) as 
     subsections (g) through (p), respectively; and
       (9) by adding at the end the following:
       ``(q) Continuation of Annual Materials Report on New Bridge 
     Construction and Bridge Rehabilitation.--Not later than 1 
     year after the date of enactment of this subsection, and 
     annually thereafter, the Secretary shall publish in the 
     Federal Register a report describing construction materials 
     used in new Federal-aid bridge construction and bridge 
     rehabilitation projects.
       ``(r) Federal Share.--The Federal share of the cost of a 
     project payable from funds made available to carry out this 
     section shall be the share applicable under section 120(b), 
     as adjusted under subsection (d) of that section.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     striking the item relating to section 144 and inserting the 
     following:

``144. Highway bridge program.''.

     SEC. 1808. APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1702(a)), is 
     amended by adding at the end the following:

     ``Sec. 170. Appalachian development highway system

       ``(a) Apportionment.--
       ``(1) In general.--The Secretary shall apportion funds made 
     available under section 1101(7) of the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004 for 
     fiscal years 2004 through 2009 among States based on the 
     latest available estimate of the cost to construct highways 
     and access roads for the Appalachian development highway 
     system program prepared by the Appalachian Regional 
     Commission under section 14501 of title 40.
       ``(2) Availability.--Funds described in paragraph (1) shall 
     be available to construct highways and access roads under 
     chapter 145 of title 40.
       ``(b) Applicability of Title.--Funds made available under 
     section 1101(7) of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004 for the 
     Appalachian development highway system shall be available for 
     obligation in the same manner as if the funds were 
     apportioned under this chapter, except that--
       ``(1) the Federal share of the cost of any project under 
     this section shall be determined in accordance with subtitle 
     IV of title 40; and
       ``(2) the funds shall remain available until expended.''.
       (b) Conforming Amendments.--
       (1) Use of toll credits.--Section 120(j)(1) of title 23, 
     United States Code is amended by inserting ``and the 
     Appalachian development highway system program under subtitle 
     IV of title 40'' after ``(other than the emergency relief 
     program authorized by section 125''.
       (2) Analysis.--The analysis of chapter 1 of title 23, 
     United States Code (as amended by section 1702(b)), is 
     amended by adding at the end the following:

``170. Appalachian development highway system.''.

     SEC. 1809. MULTISTATE CORRIDOR PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by 1808(a)), is amended by 
     adding at the end the following:

     ``Sec. 171. Multistate corridor program

       ``(a) Establishment and Purpose.--The Secretary shall carry 
     out a program to--
       ``(1) support and encourage multistate transportation 
     planning and development; and
       ``(2) facilitate transportation decisionmaking and 
     coordinate project delivery involving multistate corridors.
       ``(b) Eligible Recipients.--A State transportation 
     department and a metropolitan planning organization may 
     receive and administer funds provided under this section.
       ``(c) Eligible Activities.--The Secretary shall make 
     allocations under this program for multistate highway and 
     multimodal planning studies and construction.
       ``(d) Other Provisions Regarding Eligibility.--
       ``(1) Studies.--All studies funded under this program shall 
     be consistent with the continuing, cooperative, and 
     comprehensive planning processes required by sections 134 and 
     135.
       ``(2) Construction.--All construction funded under this 
     program shall be consistent with section 133(b)(1).
       ``(e) Selection Criteria.--The Secretary shall select 
     studies and projects to be carried out under the program 
     based on--
       ``(1) the existence and significance of signed and binding 
     multijurisdictional agreements;
       ``(2) endorsement of the study or project by applicable 
     elected State and local representatives;
       ``(3) prospects for early completion of the study or 
     project; or
       ``(4) whether the projects to be studied or constructed are 
     located on corridors identified by section 1105(c) of the 
     Intermodal Surface Transportation Efficiency Act of 1991 
     (Public Law 102-240; 105 Stat. 2032).
       ``(f) Program Priorities.--In administering the program, 
     the Secretary shall--
       ``(1) encourage and enable States and other jurisdictions 
     to work together to develop plans for multimodal and 
     multijurisdictional transportation decisionmaking; and
       ``(2) give priority to studies or projects that emphasize 
     multimodal planning, including planning for operational 
     improvements that--
       ``(A) increase--
       ``(i) mobility;
       ``(ii) freight productivity;
       ``(iii) access to marine or inland ports;
       ``(iv) safety and security; and
       ``(v) reliability; and
       ``(B) enhance the environment.
       ``(g) Federal Share.--Except as provided in section 120, 
     the Federal share of the cost of a study or project carried 
     out under the program, using funds from all Federal sources, 
     shall be 80 percent.
       ``(h) Applicability.--Funds authorized to be appropriated 
     under section 1101(10) of the Safe, Accountable, Flexible, 
     and Efficient Transportation Equity Act of 2004 to carry out 
     this section shall be available for obligation in the same 
     manner as if the funds were apportioned under this 
     chapter.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1809(b)) is amended by adding at the end the 
     following:

``171. Multistate corridor program.''.

     SEC. 1810. BORDER PLANNING, OPERATIONS, TECHNOLOGY, AND 
                   CAPACITY PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1809(a)), is 
     amended by adding at the end the following:

     ``Sec. 172. Border planning, operations, technology, and 
       capacity program

       ``(a) Definitions.--In this section:
       ``(1) Border state.--The term `border State' means any of 
     the States of Alaska, Arizona, California, Idaho, Maine, 
     Michigan, Minnesota, Montana, New Hampshire, New Mexico, New 
     York, North Dakota, Texas, Vermont, and Washington.
       ``(2) Program.--The term `program' means the border 
     planning, operations, technology, and capacity program 
     established under subsection (b).
       ``(b) Establishment and Purpose.--The Secretary shall 
     establish and carry out a border planning, operations, 
     technology, and capacity improvement program to support 
     coordination and improvement in bi-national transportation 
     planning, operations, efficiency, information exchange, 
     safety, and security at the international borders of the 
     United States with Canada and Mexico.
       ``(c) Eligible Activities.--
       ``(1) In general.--The Secretary shall make allocations 
     under the program for projects to carry out eligible 
     activities described in paragraph (2) at or near 
     international land borders in border States.
       ``(2) Eligible activities.--A border State may obligate 
     funds apportioned to the border State under this section 
     for--
       ``(A) highway and multimodal planning or environmental 
     studies;
       ``(B) cross-border port of entry and safety inspection 
     improvements, including operational enhancements and 
     technology applications;
       ``(C) technology and information exchange activities; and
       ``(D) right-of-way acquisition, design, and construction, 
     as needed--
       ``(i) to implement the enhancements or applications 
     described in subparagraphs (B) and (C);
       ``(ii) to decrease air pollution emissions from vehicles or 
     inspection facilities at border crossings; or
       ``(iii) to increase highway capacity at or near 
     international borders.
       ``(d) Other Provisions Regarding Eligibility.--
       ``(1) In general.--Each project funded under the program 
     shall be carried out in accordance with the continuing, 
     cooperative, and comprehensive planning processes required by 
     sections 134 and 135.
       ``(2) Regionally significant projects.--To be funded under 
     the program, a regionally significant project shall be 
     included on the applicable transportation plan and program 
     required by sections 134 and 135.
       ``(e) Program Priorities.--Border States shall give 
     priority to projects that emphasize--
       ``(1) multimodal planning;
       ``(2) improvements in infrastructure; and
       ``(3) operational improvements that--
       ``(A) increase safety, security, freight capacity, or 
     highway access to rail, marine, and air services; and
       ``(B) enhance the environment.
       ``(f) Mandatory Program.--
       ``(1) In general.--For each fiscal year, the Secretary 
     shall allocate among border States, in accordance with the 
     formula described in paragraph (2), funds to be used in 
     accordance with subsection (d).
       ``(2) Formula.--Subject to paragraph (3), the amount 
     allocated to a border State under this paragraph shall be 
     determined by the Secretary, as follows:
       ``(A) 25 percent in the ratio that--
       ``(i) the average annual weight of all cargo entering the 
     border State by commercial vehicle across the international 
     border with Canada or Mexico, as the case may be; bears to
       ``(ii) the average annual weight of all cargo entering all 
     border States by commercial vehicle across the international 
     borders with Canada and Mexico.
       ``(B) 25 percent in the ratio that--
       ``(i) the average trade value of all cargo imported into 
     the border State and all cargo exported from the border State 
     by commercial vehicle across the international border with 
     Canada or Mexico, as the case may be; bears to
       ``(ii) the average trade value of all cargo imported into 
     all border States and all cargo exported from all border 
     States by commercial vehicle across the international borders 
     with Canada and Mexico.

[[Page 10866]]

       ``(C) 25 percent in the ratio that--
       ``(i) the number of commercial vehicles annually entering 
     the border State across the international border with Canada 
     or Mexico, as the case may be; bears to
       ``(ii) the number of all commercial vehicles annually 
     entering all border States across the international borders 
     with Canada and Mexico.
       ``(D) 25 percent in the ratio that--
       ``(i) the number of passenger vehicles annually entering 
     the border State across the international border with Canada 
     or Mexico, as the case may be; bears to
       ``(ii) the number of all passenger vehicles annually 
     entering all border States across the international borders 
     with Canada and Mexico.
       ``(3) Data source.--
       ``(A) In general.--The data used by the Secretary in making 
     allocations under this subsection shall be based on the 
     Bureau of Transportation Statistics Transborder Surface 
     Freight Dataset (or other similar database).
       ``(B) Basis of calculation.--All formula calculations shall 
     be made using the average values for the most recent 5-year 
     period for which data are available.
       ``(4) Minimum allocation.--Notwithstanding paragraph (2), 
     for each fiscal year, each border State shall receive at 
     least \1/2\ of 1 percent of the funds made available for 
     allocation under this paragraph for the fiscal year.
       ``(g) Federal Share.--Except as provided in section 120, 
     the Federal share of the cost of a project carried out under 
     the program shall be 80 percent.
       ``(h) Obligation.--Funds made available under section 
     1101(11) of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004 to carry out the program 
     shall be available for obligation in the same manner as if 
     the funds were apportioned under this chapter.
       ``(i) Information Exchange.--No individual project the 
     scope of work of which is limited to information exchange 
     shall receive an allocation under the program in an amount 
     that exceeds $500,000 for any fiscal year.
       ``(j) Projects in Canada or Mexico.--A project in Canada or 
     Mexico, proposed by a border State to directly and 
     predominantly facilitate cross-border vehicle and commercial 
     cargo movements at an international gateway or port of entry 
     into the border region of the State, may be constructed using 
     funds made available under the program if, before obligation 
     of those funds, Canada or Mexico, or the political 
     subdivision of Canada or Mexico that is responsible for the 
     operation of the facility to be constructed, provides 
     assurances satisfactory to the Secretary that any facility 
     constructed under this subsection will be--
       ``(1) constructed in accordance with standards equivalent 
     to applicable standards in the United States; and
       ``(2) properly maintained and used over the useful life of 
     the facility for the purpose for which the Secretary 
     allocated funds to the project.
       ``(k) Transfer of Funds to the General Services 
     Administration.--
       ``(1) State funds.--At the request of a border State, funds 
     made available under the program may be transferred to the 
     General Services Administration for the purpose of funding 1 
     or more specific projects if--
       ``(A) the Secretary determines, after consultation with the 
     State transportation department of the border State, that the 
     General Services Administration should carry out the project; 
     and
       ``(B) the General Services Administration agrees to accept 
     the transfer of, and to administer, those funds.
       ``(2) Non-federal share.--
       ``(A) In general.--A border State that makes a request 
     under paragraph (1) shall provide directly to the General 
     Services Administration, for each project covered by the 
     request, the non-Federal share of the cost of each project 
     described in subsection (f).
       ``(B) No augmentation of appropriations.--Funds provided by 
     a border State under subparagraph (A)--
       ``(i) shall not be considered to be an augmentation of the 
     appropriations made available to the General Services 
     Administration; and
       ``(ii) shall be--

       ``(I) administered in accordance with the procedures of the 
     General Services Administration; but
       ``(II) available for obligation in the same manner as if 
     the funds were apportioned under this chapter.

       ``(C) Obligation authority.--Obligation authority shall be 
     transferred to the General Services Administration in the 
     same manner and amount as the funds provided for projects 
     under subparagraph (A).
       ``(3) Direct transfer of authorized funds.--
       ``(A) In general.--In addition to allocations to States and 
     metropolitan planning organizations under subsection (c), the 
     Secretary may transfer funds made available to carry out this 
     section to the General Services Administration for 
     construction of transportation infrastructure projects at or 
     near the border in border States, if--
       ``(i) the Secretary determines that the transfer is 
     necessary to effectively carry out the purposes of this 
     program; and
       ``(ii) the General Services Administration agrees to accept 
     the transfer of, and to administer, those funds.
       ``(B) No augmentation of appropriations.--Funds transferred 
     by the Secretary under subparagraph (A)--
       ``(i) shall not be considered to be an augmentation of the 
     appropriations made available to the General Services 
     Administration; and
       ``(ii) shall be--

       ``(I) administered in accordance with the procedures of the 
     General Services Administration; but
       ``(II) available for obligation in the same manner as if 
     the funds were apportioned under this chapter.

       ``(C) Obligation authority.--Obligation authority shall be 
     transferred to the General Services Administration in the 
     same manner and amount as the funds transferred under 
     subparagraph (A).''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1809(b)), is amended by adding at the end the 
     following:

``172. Border planning, operations, and technology program.''.

     SEC. 1811. PUERTO RICO HIGHWAY PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1810(a)), is 
     amended by adding at the end the following:

     ``Sec. 173. Puerto Rico highway program

       ``(a) In General.--The Secretary shall allocate funds 
     authorized by section 1101(15) of the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004 for 
     each of fiscal years 2004 through 2009 to the Commonwealth of 
     Puerto Rico to carry out a highway program in the 
     Commonwealth.
       ``(b) Applicability of Title.--
       ``(1) In general.--Amounts made available by section 
     1101(15) of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004 shall be available for 
     obligation in the same manner as if such funds were 
     apportioned under this chapter.
       ``(2) Limitation on obligations.--The amounts shall be 
     subject to any limitation on obligations for Federal-aid 
     highway and highway safety construction programs.
       ``(c) Treatment of Funds.--Amounts made available to carry 
     out this section for a fiscal year shall be administered as 
     follows:
       ``(1) Apportionment.--For the purpose of imposing any 
     penalty under this title or title 49, the amounts shall be 
     treated as being apportioned to Puerto Rico under sections 
     104(b) and 144, for each program funded under those sections 
     in an amount determined by multiplying--
       ``(A) the aggregate of the amounts for the fiscal year; by
       ``(B) the ratio that--
       ``(i) the amount of funds apportioned to Puerto Rico for 
     each such program for fiscal year 1997; bears to
       ``(ii) the total amount of funds apportioned to Puerto Rico 
     for all such programs for fiscal year 1997.
       ``(2) Penalty.--The amounts treated as being apportioned to 
     Puerto Rico under each section referred to in paragraph (1) 
     shall be deemed to be required to be apportioned to Puerto 
     Rico under that section for purposes of the imposition of any 
     penalty under this title and title 49.
       ``(3) Effect on allocations and apportionments.--Subject to 
     paragraph (2), nothing in this section affects any allocation 
     under section 105 and any apportionment under sections 104 
     and 144.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1810(b)), is amended by adding at the end the 
     following:

``173. Puerto Rico highway program.''.

     SEC. 1812. NATIONAL HISTORIC COVERED BRIDGE PRESERVATION.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1811(a)), is 
     amended by adding at the end the following:

     ``Sec. 174. National historic covered bridge preservation

       ``(a) Definition of Historic Covered Bridge.--In this 
     section, the term `historic covered bridge' means a covered 
     bridge that is listed or eligible for listing on the National 
     Register of Historic Places.
       ``(b) Historic Covered Bridge Preservation.--Subject to the 
     availability of appropriations, the Secretary shall--
       ``(1) collect and disseminate information on historic 
     covered bridges;
       ``(2) conduct educational programs relating to the history 
     and construction techniques of historic covered bridges;
       ``(3) conduct research on the history of historic covered 
     bridges; and
       ``(4) conduct research on, and study techniques for, 
     protecting historic covered bridges from rot, fire, natural 
     disasters, or weight-related damage.
       ``(c) Grants.--
       ``(1) In general.--Subject to the availability of 
     appropriations, the Secretary shall make a grant to a State 
     that submits an application to the Secretary that 
     demonstrates a need for assistance in carrying out 1 or more 
     historic covered bridge projects described in paragraph (2).
       ``(2) Eligible projects.--A grant under paragraph (1) may 
     be made for a project--
       ``(A) to rehabilitate or repair a historic covered bridge; 
     or
       ``(B) to preserve a historic covered bridge, including 
     through--
       ``(i) installation of a fire protection system, including a 
     fireproofing or fire detection system and sprinklers;
       ``(ii) installation of a system to prevent vandalism and 
     arson; or
       ``(iii) relocation of a bridge to a preservation site.
       ``(3) Authenticity requirements.--A grant under paragraph 
     (1) may be made for a project only if--

[[Page 10867]]

       ``(A) to the maximum extent practicable, the project--
       ``(i) is carried out in the most historically appropriate 
     manner; and
       ``(ii) preserves the existing structure of the historic 
     covered bridge; and
       ``(B) the project provides for the replacement of wooden 
     components with wooden components, unless the use of wood is 
     impracticable for safety reasons.
       ``(4) Federal share.--Except as provided in section 120, 
     the Federal share of the cost of a project carried out with a 
     grant under this subsection shall be 80 percent.
       ``(d) Funding.--There is authorized to be appropriated to 
     carry out this section $14,000,000 for each of fiscal years 
     2004 through 2009, to remain available until expended.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1811(b)), is amended by adding at the end the 
     following:

``174. National historic covered bridge preservation.''.

     SEC. 1813. TRANSPORTATION AND COMMUNITY AND SYSTEM 
                   PRESERVATION PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1812(a)), is 
     amended by adding at the end the following:

     ``Sec. 175. Transportation and community and system 
       preservation program

       ``(a) Establishment.--The Secretary shall establish a 
     comprehensive program to facilitate the planning, 
     development, and implementation of strategies by States, 
     metropolitan planning organizations, federally-recognized 
     Indian tribes, and local governments to integrate 
     transportation, community, and system preservation plans and 
     practices that address the goals described in subsection (b).
       ``(b) Goals.--The goals of the program are to--
       ``(1) improve the efficiency of the transportation system 
     in the United States;
       ``(2) reduce the impacts of transportation on the 
     environment;
       ``(3) reduce the need for costly future investments in 
     public infrastructure;
       ``(4) provide efficient access to jobs, services, and 
     centers of trade; and
       ``(5) examine development patterns, and to identify 
     strategies, to encourage private sector development patterns 
     that achieve the goals identified in paragraphs (1) through 
     (4).
       ``(c) Allocation of Funds for Implementation.--
       ``(1) In general.--The Secretary shall allocate funds made 
     available to carry out this subsection to States, 
     metropolitan planning organizations, and local governments to 
     carry out projects to address transportation efficiency and 
     community and system preservation.
       ``(2) Criteria.--In allocating funds made available to 
     carry out this subsection, the Secretary shall give priority 
     to applicants that--
       ``(A) have instituted preservation or development plans and 
     programs that--
       ``(i) meet the requirements of this title and chapter 53 of 
     title 49, United States Code; and
       ``(ii)(I) are coordinated with State and local adopted 
     preservation or development plans;
       ``(II) are intended to promote cost-effective and strategic 
     investments in transportation infrastructure that minimize 
     adverse impacts on the environment; or
       ``(III) are intended to promote innovative private sector 
     strategies.
       ``(B) have instituted other policies to integrate 
     transportation and community and system preservation 
     practices, such as--
       ``(i) spending policies that direct funds to high-growth 
     areas;
       ``(ii) urban growth boundaries to guide metropolitan 
     expansion;
       ``(iii) `green corridors' programs that provide access to 
     major highway corridors for areas targeted for efficient and 
     compact development; or
       ``(iv) other similar programs or policies as determined by 
     the Secretary;
       ``(C) have preservation or development policies that 
     include a mechanism for reducing potential impacts of 
     transportation activities on the environment;
       ``(D) examine ways to encourage private sector investments 
     that address the purposes of this section; and
       ``(E) propose projects for funding that address the 
     purposes described in subsection (b)(2).
       ``(3) Equitable distribution.--In allocating funds to carry 
     out this subsection, the Secretary shall ensure the equitable 
     distribution of funds to a diversity of populations and 
     geographic regions.
       ``(4) Use of allocated funds.--
       ``(A) In general.--An allocation of funds made available to 
     carry out this subsection shall be used by the recipient to 
     implement the projects proposed in the application to the 
     Secretary.
       ``(B) Types of projects.--The allocation of funds shall be 
     available for obligation for--
       ``(i) any project eligible for funding under this title or 
     chapter 53 of title 49, United States Code; or
       ``(ii) any other activity relating to transportation and 
     community and system preservation that the Secretary 
     determines to be appropriate, including corridor preservation 
     activities that are necessary to implement--

       ``(I) transit-oriented development plans;
       ``(II) traffic calming measures; or
       ``(III) other coordinated transportation and community and 
     system preservation practices.

       ``(d) Funding.--
       ``(1) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this section $50,000,000 for each of 
     fiscal years 2004 through 2009.
       ``(2) Contract authority.--Funds authorized under this 
     subsection shall be available for obligation in the same 
     manner as if the funds were apportioned under this 
     chapter.''.
       (b) Eligible Projects.--Section 133(b) of title 23, United 
     States Code (as amended by section 1701(a)), is amended by 
     adding at the end the following:
       ``(18) Transportation and community system preservation to 
     facilitate the planning, development, and implementation of 
     strategies of metropolitan planning organizations and local 
     governments to integrate transportation, community, and 
     system preservation plans and practices that address the 
     following:
       ``(A) Improvement of the efficiency of the transportation 
     system in the United States.
       ``(B) Reduction of the impacts of transportation on the 
     environment.
       ``(C) Reduction of the need for costly future investments 
     in public infrastructure.
       ``(D) Provision of efficient access to jobs, services, and 
     centers of trade.
       ``(E) Examination of development patterns, and 
     identification of strategies to encourage private sector 
     development patterns, that achieve the goals identified in 
     subparagraphs (A) through (D).
       ``(19) Projects relating to intersections, including 
     intersections--
       ``(A) that--
       ``(i) have disproportionately high accident rates;
       ``(ii) have high levels of congestion, as evidenced by--

       ``(I) interrupted traffic flow at the intersection; and
       ``(II) a level of service rating, issued by the 
     Transportation Research Board of the National Academy of 
     Sciences in accordance with the Highway Capacity Manual, that 
     is not better than `F' during peak travel hours; and

       ``(iii) are directly connected to or located on a Federal-
     aid highway; and
       ``(B) improvements that are approved in the regional plan 
     of the appropriate local metropolitan planning 
     organization.''.
       (c) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code (as amended by 
     section 1812(b)), is amended by adding at the end the 
     following:

``175. Transportation and community and system preservation pilot 
              program.''.

     SEC. 1814. PARKING PILOT PROGRAMS.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1813(a)), is 
     amended by adding at the end the following:

     ``Sec. 176. Parking pilot programs

       ``(a) Commercial Truck Parking Pilot Program.--
       ``(1) Establishment.--In cooperation with appropriate 
     State, regional, and local governments, the Secretary shall 
     establish a pilot program to address the shortage of long-
     term parking for drivers of commercial motor vehicles on the 
     National Highway System.
       ``(2) Allocation of funds.--
       ``(A) In general.--The Secretary shall allocate funds made 
     available under this subsection to States, metropolitan 
     planning organizations, and local governments.
       ``(B) Criteria.--In allocating funds under this subsection, 
     the Secretary shall give priority to an applicant that--
       ``(i) demonstrates a severe shortage of commercial vehicle 
     parking capacity on the corridor to be addressed;
       ``(ii) consults with affected State and local governments, 
     community groups, private providers of commercial vehicle 
     parking, and motorist and trucking organizations; and
       ``(iii) demonstrates that the project proposed by the 
     applicant is likely to have a positive effect on highway 
     safety, traffic congestion, or air quality.
       ``(3) Use of allocated funds.--
       ``(A) In general.--A recipient of funds allocated under 
     this subsection shall use the funds to carry out the project 
     proposed in the application submitted by the recipient to the 
     Secretary.
       ``(B) Types of projects.--Funds under this subsection shall 
     be available for obligation for projects that serve the 
     National Highway System, including--
       ``(i) construction of safety rest areas that include 
     parking for commercial motor vehicles;
       ``(ii) construction of commercial motor vehicle parking 
     facilities that are adjacent to commercial truck stops and 
     travel plazas;
       ``(iii) costs associated with the opening of facilities 
     (including inspection and weigh stations and park-and-ride 
     facilities) to provide commercial motor vehicle parking;
       ``(iv) projects that promote awareness of the availability 
     of public or private commercial motor vehicle parking on the 
     National Highway System, including parking in connection with 
     intelligent transportation systems and other systems;
       ``(v) construction of turnouts along the National Highway 
     System for commercial motor vehicles;
       ``(vi) capital improvements to public commercial motor 
     vehicle truck parking facilities closed on a seasonal basis 
     in order to allow the facilities to remain open year-around; 
     and
       ``(vii) improvements to the geometric design at 
     interchanges on the National Highway System to improve access 
     to commercial motor vehicle parking facilities.

[[Page 10868]]

       ``(4) Report.--Not later than 5 years after the date of 
     enactment of this section, the Secretary shall submit to 
     Congress a report on the results of the pilot program carried 
     out under this subsection.
       ``(5) Federal share.--The Federal share of the cost of a 
     project carried out under this subsection shall be consistent 
     with section 120.
       ``(6) Funding.--
       ``(A) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this subsection $10,000,000 for each of 
     fiscal years 2005 through 2009.
       ``(B) Contract authority.--Funds authorized under this 
     paragraph shall be available for obligation in the same 
     manner as if the funds were apportioned under this chapter.
       ``(b) Corridor and Fringe Parking Pilot Program.--
       ``(1) Establishment.--
       ``(A) In general.--In cooperation with appropriate State, 
     regional, and local governments, the Secretary shall carry 
     out a pilot program to provide corridor and fringe parking 
     facilities.
       ``(B) Primary function.--The primary function of a corridor 
     and fringe parking facility funded under this subsection 
     shall be to provide parking capacity to support car pooling, 
     van pooling, ride sharing, commuting, and high occupancy 
     vehicle travel.
       ``(C) Overnight parking.--A State may permit a facility 
     described in subparagraph (B) to be used for the overnight 
     parking of commercial vehicles if the use does not foreclose 
     or unduly limit the primary function of the facility 
     described in subparagraph (B).
       ``(2) Allocation of funds.--
       ``(A) In general.--The Secretary shall allocate funds made 
     available to carry out this subsection to States.
       ``(B) Criteria.--In allocating funds under this subsection, 
     the Secretary shall give priority to a State that--
       ``(i) demonstrates demand for corridor and fringe parking 
     on the corridor to be addressed;
       ``(ii) consults with affected metropolitan planning 
     organizations, local governments, community groups, and 
     providers of corridor and fringe parking; and
       ``(iii) demonstrates that the project proposed by the State 
     is likely to have a positive effect on ride sharing, traffic 
     congestion, or air quality.
       ``(3) Use of allocated funds.--
       ``(A) In general.--A recipient of funds allocated under 
     this subsection shall use the funds to carry out the project 
     proposed in the application submitted by the recipient to the 
     Secretary.
       ``(B) Types of projects.--Funds under this subsection shall 
     be available for obligation for projects that serve the 
     Federal-aid system, including--
       ``(i) construction of corridor and fringe parking 
     facilities;
       ``(ii) costs associated with the opening of facilities;
       ``(iii) projects that promote awareness of the availability 
     of corridor and fringe parking through the use of signage and 
     other means;
       ``(iv) capital improvements to corridor and fringe parking 
     facilities closed on a seasonal basis in order to allow the 
     facilities to remain open year-around; and
       ``(v) improvements to the geometric design on adjoining 
     roadways to facilitate access to, and egress from, corridor 
     and fringe parking facilities.
       ``(4) Report.--Not later than 5 years after the date of 
     enactment of this section, the Secretary shall submit to 
     Congress a report on the results of the pilot program carried 
     out under this subsection.
       ``(5) Federal share.--The Federal share of the cost of a 
     project carried out under this subsection shall be consistent 
     with section 120.
       ``(6) Funding.--
       ``(A) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this subsection $10,000,000 for each of 
     fiscal years 2005 through 2009.
       ``(B) Contract authority.--Funds authorized under this 
     paragraph shall be available for obligation in the same 
     manner as if the funds were apportioned under this 
     chapter.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter I of title 23, United States Code (as amended by 
     section 1813(c)), is amended by adding at the end the 
     following:

``176. Parking pilot programs.''.

     SEC. 1815. INTERSTATE OASIS PROGRAM.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1814(a)), is 
     amended by adding at the end the following:

     ``Sec. 177. Interstate oasis program

       ``(a) In General.--Not later than 180 days after the date 
     of enactment of this section, in consultation with the States 
     and other interested parties, the Secretary shall--
       ``(1) establish an Interstate oasis program; and
       ``(2) develop standards for designating, as an Interstate 
     oasis, a facility that--
       ``(A) offers--
       ``(i) products and services to the public;
       ``(ii) 24-hour access to restrooms; and
       ``(iii) parking for automobiles and heavy trucks; and
       ``(B) meets other standards established by the Secretary.
       ``(b) Standards for Designation.--The standards for 
     designation under subsection (a) shall include standards 
     relating to--
       ``(1) the appearance of a facility; and
       ``(2) the proximity of the facility to the Interstate 
     System.
       ``(c) Eligibility for Designation.--If a State elects to 
     participate in the interstate oasis program, any facility 
     meeting the standards established by the Secretary shall be 
     eligible for designation under this section.
       ``(d) Logo.--The Secretary shall design a logo to be 
     displayed by a facility designated under this section.''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter I of title 23, United States Code (as amended by 
     section 1814(b)), is amended by adding at the end the 
     following:

``177. Interstate oasis program.''.

     SEC. 1816. TRIBAL-STATE ROAD MAINTENANCE AGREEMENTS.

       Section 204 of title 23, United States Code (as amended by 
     section 1806(f)(4)), is amended by adding at the end the 
     following:
       ``(n) Tribal-State Road Maintenance Agreements.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, regulation, policy, or guideline, an Indian tribe and a 
     State may enter into a road maintenance agreement under which 
     an Indian tribe assumes the responsibilities of the State 
     for--
       ``(A) Indian reservation roads; and
       ``(B) roads providing access to Indian reservation roads.
       ``(2) Tribal-state agreements.--Agreements entered into 
     under paragraph (1)--
       ``(A) shall be negotiated between the State and the Indian 
     tribe; and
       ``(B) shall not require the approval of the Secretary.
       ``(3) Annual report.--Effective beginning with fiscal year 
     2004, the Secretary shall prepare and submit to Congress an 
     annual report that identifies--
       ``(A) the Indian tribes and States that have entered into 
     agreements under paragraph (1);
       ``(B) the number of miles of roads for which Indian tribes 
     have assumed maintenance responsibilities; and
       ``(C) the amount of funding transferred to Indian tribes 
     for the fiscal year under agreements entered into under 
     paragraph (1).''.

     SEC. 1817. NATIONAL FOREST SYSTEM ROADS.

       Section 205 of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(e) Of the amounts made available for National Forest 
     System roads, $15,000,000 for each fiscal year shall be used 
     by the Secretary of Agriculture to pay the costs of 
     facilitating the passage of aquatic species beneath roads in 
     the National Forest System, including the costs of 
     constructing, maintaining, replacing, or removing culverts 
     and bridges, as appropriate.''.

     SEC. 1818. TERRITORIAL HIGHWAY PROGRAM.

       (a) In General.--Chapter 2 of title 23, United States Code, 
     is amended by striking section 215 and inserting the 
     following:

     ``Sec. 215. Territorial highway program

       ``(a) Definitions.--In this section:
       ``(1) Program.--The term `program' means the territorial 
     highway program established under subsection (b).
       ``(2) Territory.--The term `territory' means the any of the 
     following territories of the United States:
       ``(A) American Samoa.
       ``(B) The Commonwealth of the Northern Mariana Islands.
       ``(C) Guam.
       ``(D) The United States Virgin Islands.
       ``(b) Program.--
       ``(1) In general.--Recognizing the mutual benefits that 
     will accrue to the territories and the United States from the 
     improvement of highways in the territories, the Secretary may 
     carry out a program to assist each territorial government in 
     the construction and improvement of a system of arterial and 
     collector highways, and necessary inter-island connectors, 
     that is--
       ``(A) designated by the Governor or chief executive officer 
     of each territory; and
       ``(B) approved by the Secretary.
       ``(2) Federal share.--The Secretary shall provide Federal 
     financial assistance to territories under this section in 
     accordance with section 120(h).
       ``(c) Technical Assistance.--
       ``(1) In general.--To continue a long-range highway 
     development program, the Secretary may provide technical 
     assistance to the governments of the territories to enable 
     the territories to, on a continuing basis--
       ``(A) engage in highway planning;
       ``(B) conduct environmental evaluations;
       ``(C) administer right-of-way acquisition and relocation 
     assistance programs; and
       ``(D) design, construct, operate, and maintain a system of 
     arterial and collector highways, including necessary inter-
     island connectors.
       ``(2) Form and terms of assistance.--Technical assistance 
     provided under paragraph (1), and the terms for the sharing 
     of information among territories receiving the technical 
     assistance, shall be included in the agreement required by 
     subsection (e).
       ``(d) Nonapplicability of Certain Provisions.--
       ``(1) In general.--Except to the extent that provisions of 
     chapter 1 are determined by the Secretary to be inconsistent 
     with the needs of the territories and the intent of the 
     program, chapter 1 (other than provisions of chapter 1 
     relating to the apportionment and allocation of funds) shall 
     apply to funds authorized to be appropriated for the program.
       ``(2) Applicable provisions.--The specific sections of 
     chapter 1 that are applicable to each territory, and the 
     extent of the applicability of those section, shall be 
     identified in the agreement required by subsection (e).

[[Page 10869]]

       ``(e) Agreement.--
       ``(1) In general.--Except as provided in paragraph (3), 
     none of the funds made available for the program shall be 
     available for obligation or expenditure with respect to any 
     territory until the Governor or chief executive officer of 
     the territory enters into a new agreement with the Secretary 
     (which new agreement shall be entered into not later than 1 
     year after the date of enactment of the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004), 
     providing that the government of the territory shall--
       ``(A) implement the program in accordance with applicable 
     provisions of chapter 1 and subsection (d);
       ``(B) design and construct a system of arterial and 
     collector highways, including necessary inter-island 
     connectors, in accordance with standards that are--
       ``(i) appropriate for each territory; and
       ``(ii) approved by the Secretary;
       ``(C) provide for the maintenance of facilities constructed 
     or operated under this section in a condition to adequately 
     serve the needs of present and future traffic; and
       ``(D) implement standards for traffic operations and 
     uniform traffic control devices that are approved by the 
     Secretary.
       ``(2) Technical assistance.--The new agreement required by 
     paragraph (1) shall--
       ``(A) specify the kind of technical assistance to be 
     provided under the program;
       ``(B) include appropriate provisions regarding information 
     sharing among the territories; and
       ``(C) delineate the oversight role and responsibilities of 
     the territories and the Secretary.
       ``(3) Review and revision of agreement.--The new agreement 
     entered into under paragraph (1) shall be reevaluated and, as 
     necessary, revised, at least every 2 years.
       ``(4) Existing agreements.--With respect to an agreement 
     between the Secretary and the Governor or chief executive 
     officer of a territory that is in effect as of the date of 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004--
       ``(A) the agreement shall continue in force until replaced 
     by a new agreement in accordance with paragraph (1); and
       ``(B) amounts made available for the program under the 
     agreement shall be available for obligation or expenditure so 
     long as the agreement, or a new agreement under paragraph 
     (1), is in effect.
       ``(f) Permissible Uses of Funds.--
       ``(1) In general.--Funds made available for the program may 
     be used only for the following projects and activities 
     carried out in a territory:
       ``(A) Eligible surface transportation program projects 
     described in section 133(b).
       ``(B) Cost-effective, preventive maintenance consistent 
     with section 116.
       ``(C) Ferry boats, terminal facilities, and approaches, in 
     accordance with subsections (b) and (c) of section 129.
       ``(D) Engineering and economic surveys and investigations 
     for the planning, and the financing, of future highway 
     programs.
       ``(E) Studies of the economy, safety, and convenience of 
     highway use.
       ``(F) The regulation and equitable taxation of highway use.
       ``(G) Such research and development as are necessary in 
     connection with the planning, design, and maintenance of the 
     highway system.
       ``(2) Prohibition on use of funds for routine 
     maintenance.--None of the funds made available for the 
     program shall be obligated or expended for routine 
     maintenance.
       ``(g) Location of Projects.--Territorial highway projects 
     (other than those described in paragraphs (1), (3), and (4) 
     of section 133(b)) may not be undertaken on roads 
     functionally classified as local.''.
       (b) Conforming Amendments.--
       (1) Eligible projects.--Section 103(b)(6) of title 23, 
     United States Code, is amended by striking subparagraph (P) 
     and inserting the following:
       ``(P) Projects eligible for assistance under the 
     territorial highway program under section 215.''.
       (2) Funding.--Section 104(b)(1)(A) of title 23, United 
     States Code, is amended by striking ``to the Virgin Islands, 
     Guam, American Samoa, and the Commonwealth of Northern 
     Mariana Islands'' and inserting ``for the territorial highway 
     program authorized under section 215''.
       (3) Analysis.--The analysis for chapter 2 of title 23, 
     United States Code, is amended by striking the item relating 
     to section 215 and inserting the following:

``215. Territorial highway program.''.

     SEC. 1819. MAGNETIC LEVITATION TRANSPORTATION TECHNOLOGY 
                   DEPLOYMENT PROGRAM.

       Section 322 of title 23, United States Code, is amended--
       (1) in subsection (c)--
       (A) by striking ``Not later than'' and inserting the 
     following:
       ``(1) Initial solicitation.--Not later than''; and
       (B) by adding at the end the following:
       ``(2) Additional solicitation.--Not later than 1 year after 
     the date of enactment of this paragraph, the Secretary may 
     solicit additional applications from States, or authorities 
     designated by 1 or more States, for financial assistance 
     authorized by subsection (b) for planning, design, and 
     construction of eligible MAGLEV projects.'';
       (2) in subsection (e), by striking ``Prior to soliciting 
     applications, the Secretary'' and inserting ``The 
     Secretary'';
       (3) in subsection (h)--
       (A) in subparagraph (A), by striking clause (i) and 
     inserting the following:
       ``(i) In general.--There is authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this section $15,000,000 for each of 
     fiscal years 2004 through 2009.''; and
       (B) in subparagraph (B), by striking clause (i) and 
     inserting the following:
       ``(i) In general.--There are authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out this section--

       ``(I) $375,000,000 for fiscal year 2004;
       ``(II) $400,000,000 for fiscal year 2005;
       ``(III) $415,000,000 for fiscal year 2006;
       ``(IV) $425,000,000 for fiscal year 2007;
       ``(V) $435,000,000 for fiscal year 2008; and
       ``(VI) $450,000,000 for fiscal year 2009.''; and

       (4) by striking subsection (i).

     SEC. 1820. DONATIONS AND CREDITS.

       Section 323 of title 23, United States Code, is amended--
       (1) in the first sentence of subsection (c), by inserting 
     ``, or a local government from offering to donate funds, 
     materials, or services performed by local government 
     employees,'' after ``services''; and
       (2) striking subsection (e).

     SEC. 1821. DISADVANTAGED BUSINESS ENTERPRISES.

       (a) General Rule.--Except to the extent that the Secretary 
     determines otherwise, not less than 10 percent of the amounts 
     made available for any program under titles I, II, and III of 
     this Act shall be expended with small business concerns owned 
     and controlled by socially and economically disadvantaged 
     individuals.
       (b) Definitions.--In this section:
       (1) Small business concern.--
       (A) In general.--The term ``small business concern'' has 
     the meaning given the term under section 3 of the Small 
     Business Act (15 U.S.C. 632).
       (B) Exclusion.--The term ``small business concern'' does 
     not include any concern or group of concerns controlled by 
     the same socially and economically disadvantaged individual 
     or individuals that has average annual gross receipts over 
     the preceding 3 fiscal years in excess of $17,420,000, as 
     adjusted by the Secretary for inflation.
       (2) Socially and economically disadvantaged individuals.--
     The term ``socially and economically disadvantaged 
     individuals'' has the meaning given the term under section 
     8(d) of the Small Business Act (15 U.S.C. 637(d)) and 
     relevant subcontracting regulations promulgated under that 
     section, except that women shall be presumed to be socially 
     and economically disadvantaged individuals for the purposes 
     of this section.
       (c) Annual Listing of Disadvantaged Business Enterprises.--
     Each State shall annually survey and compile a list of the 
     small business concerns referred to in subsection (a) and the 
     location of such concerns in the State and notify the 
     Secretary, in writing, of the percentage of such concerns 
     which are controlled by women, by socially and economically 
     disadvantaged individuals (other than women), and by 
     individuals who are women and are otherwise socially and 
     economically disadvantaged individuals.
       (d) Uniform Certification.--The Secretary shall establish 
     minimum uniform criteria for State governments to use in 
     certifying whether a concern qualifies for purposes of this 
     section. Such minimum uniform criteria shall include on-site 
     visits, personal interviews, licenses, analysis of stock 
     ownership, listing of equipment, analysis of bonding 
     capacity, listing of work completed, resume of principal 
     owners, financial capacity, and type of work preferred.
       (e) Compliance With Court Orders.--Nothing in this section 
     limits the eligibility of an entity or person to receive 
     funds made available under titles I, III, and V of this Act, 
     if the entity or person is prevented, in whole or in part, 
     from complying with subsection (a) because a Federal court 
     issues a final order in which the court finds that the 
     requirement of subsection (a), or the program established 
     under subsection (a), is unconstitutional.

     SEC. 1822. EMERGENCY RELIEF.

       Section 125(c)(1) of title 23, United States Code, is 
     amended by striking $100,000,000'' and inserting 
     ``$300,000,000''.

     SEC. 1823. PRIORITY FOR PEDESTRIAN AND BICYCLE FACILITY 
                   ENHANCEMENT PROJECTS.

       Section 133(e)(5) of title 23, United States Code, is 
     amended by adding at the end the following:
       ``(D) Priority for pedestrian and bicycle facility 
     enhancement projects.--The Secretary shall encourage States 
     to give priority to pedestrian and bicycle facility 
     enhancement projects that include a coordinated physical 
     activity or healthy lifestyles program.''.

     SEC. 1824. THE DELTA REGIONAL AUTHORITY.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code (as amended by section 1814(a)), is 
     amended by adding at the end the following:

     ``Sec. 178. Delta Region transportation development program

       ``(a) In General.--The Secretary shall carry out a program 
     to--
       ``(1) support and encourage multistate transportation 
     planning and corridor development;
       ``(2) provide for transportation project development;
       ``(3) facilitate transportation decisionmaking; and
       ``(4) support transportation construction.
       ``(b) Eligible Recipients.--A State transportation 
     department or metropolitan planning organization may receive 
     and administer funds provided under the program.

[[Page 10870]]

       ``(c) Eligible Activities.--The Secretary shall make 
     allocations under the program for multistate highway and 
     transit planning, development, and construction projects.
       ``(d) Other Provisions Regarding Eligibility.--All 
     activities funded under this program shall be consistent with 
     the continuing, cooperative, and comprehensive planning 
     processes required by section 134 and 135.
       ``(e) Selection Criteria.--The Secretary shall select 
     projects to be carried out under the program based on--
       ``(1) whether the project is located--
       ``(A) in an area that is part of the Delta Regional 
     Authority; and
       ``(B) on the Federal-aid system;
       ``(2) endorsement of the project by the State department of 
     transportation; and
       ``(3) evidence of the ability to complete the project.
       ``(f) Program Priorities.--In administering the program, 
     the Secretary shall--
       ``(1) encourage State and local officials to work together 
     to develop plans for multimodal and multijurisdictional 
     transportation decisionmaking; and
       ``(2) give priority to projects that emphasize multimodal 
     planning, including planning for operational improvements 
     that--
       ``(A) increase the mobility of people and goods;
       ``(B) improve the safety of the transportation system with 
     respect to catastrophic--
       ``(i) natural disasters; or
       ``(ii) disasters caused by human activity; and
       ``(C) contribute to the economic vitality of the area in 
     which the project is being carried out.
       ``(g) Federal Share.--Amounts provided by the Delta 
     Regional Authority to carry out a project under this section 
     shall be applied to the non-Federal share required by section 
     120.
       ``(h) Availability of Funds.--Amounts made available to 
     carry out this section shall remain available until 
     expended.''.
       (b) Conforming Amendment.--The analysis for chapter 1 of 
     title 23, United States Code (as amended by section 1814(b)), 
     is amended by adding at the end the following:

``178. Delta Region transportation development program.''.

     SEC. 1825. MULTISTATE INTERNATIONAL CORRIDOR DEVELOPMENT 
                   PROGRAM.

       (a) Establishment.--The Secretary shall establish a program 
     to develop international trade corridors to facilitate the 
     movement of freight from international ports of entry and 
     inland ports through and to the interior of the United 
     States.
       (b) Eligible Recipients.--State transportation departments 
     and metropolitan planning organizations shall be eligible to 
     receive and administer funds provided under the program.
       (c) Eligible Activities.--The Secretary shall make 
     allocations under this program for any activity eligible for 
     funding under title 23, United States Code, including 
     multistate highway and multistate multimodal planning and 
     project construction.
       (d) Other Provisions Regarding Eligibility.--All activities 
     funded under this program shall be consistent with the 
     continuing, cooperative, and comprehensive planning processes 
     required by sections 134 and 135 of title 23, United States 
     Code.
       (e) Selection Criteria.--The Secretary shall only select 
     projects for corridors--
       (1) that have significant levels or increases in truck and 
     traffic volume relating to international freight movement;
       (2) connect to at least 1 international terminus or inland 
     port;
       (3) traverse at least 3 States; and
       (4) are identified by section 115(c) of the Intermodal 
     Transportation Efficiency Act of 1991 (Public Law 102-240; 
     105 Stat. 2032).
       (f) Program Priorities.--In administering the program, the 
     Secretary shall--
       (1) encourage and enable States and other jurisdictions to 
     work together to develop plans for multimodal and 
     multijurisdictional transportation decisionmaking; and
       (2) give priority to studies that emphasize multimodal 
     planning, including planning for operational improvements 
     that increase mobility, freight productivity, access to 
     marine ports, safety, and security while enhancing the 
     environment.
       (g) Federal Share.--The Federal share required for any 
     study carried out under this section shall be available for 
     obligation in the same manner as if the funds were 
     apportioned under chapter I of title 23, United States Code.

     SEC. 1826. AUTHORIZATION OF CONTRACT AUTHORITY FOR STATES 
                   WITH INDIAN RESERVATIONS.

       Section 1214(d)(5)(A) of the Transportation Equity Act for 
     the 21st Century (23 U.S.C. 202 note; 112 Stat. 206) is 
     amended by striking ``$1,500,000 for each of fiscal years 
     1998 through 2003'' and inserting ``$1,800,000 for each of 
     fiscal years 2004 through 2009''.

                   Subtitle I--Technical Corrections

     SEC. 1901. REPEAL OR UPDATE OF OBSOLETE TEXT.

       (a) Letting of Contracts.--Section 112 of title 23, United 
     States Code, is amended--
       (1) by striking subsection (f); and
       (2) by redesignating subsection (g) as subsection (f).
       (b) Fringe and Corridor Parking Facilities.--Section 137(a) 
     of title 23, United States Code, is amended in the first 
     sentence by striking ``on the Federal-aid urban system'' and 
     inserting ``on a Federal-aid highway''.

     SEC. 1902. CLARIFICATION OF DATE.

       Section 109(g) of title 23, United States Code, is amended 
     in the first sentence by striking ``The Secretary'' and all 
     that follows through ``of 1970'' and inserting ``Not later 
     than January 30, 1971, the Secretary shall issue''.

     SEC. 1903. INCLUSION OF REQUIREMENTS FOR SIGNS IDENTIFYING 
                   FUNDING SOURCES IN TITLE 23.

       (a) In General.--Section 154 of the Federal-Aid Highway Act 
     of 1987 (23 U.S.C. 101 note; 101 Stat. 209) is--
       (1) transferred to title 23, United States Code;
       (2) redesignated as section 321;
       (3) moved to appear after section 320 of that title; and
       (4) amended by striking the section heading and inserting 
     the following:

     ``Sec. 321. Signs identifying funding sources''.

       (b) Conforming Amendment.--The analysis for chapter 3 of 
     title 23, United States Code, is amended by inserting after 
     the item relating to section 320 the following:

``321. Signs identifying funding sources.''.

     SEC. 1904. INCLUSION OF BUY AMERICA REQUIREMENTS IN TITLE 23.

       (a) In General.--Section 165 of the Highway Improvement Act 
     of 1982 (23 U.S.C. 101 note; 96 Stat. 2136) is--
       (1) transferred to title 23, United States Code;
       (2) redesignated as section 313;
       (3) moved to appear after section 312 of that title; and
       (4) amended by striking the section heading and inserting 
     the following:

     ``Sec. 313. Buy America''.

       (b) Conforming Amendments.--
       (1) The analysis for chapter 3 of title 23, United States 
     Code, is amended by inserting after the item relating to 
     section 312 the following:

``313. Buy America.''.

       (2) Section 313 of title 23, United States Code (as added 
     by subsection (a)), is amended--
       (A) in subsection (a), by striking ``by this Act'' the 
     first place it appears and all that follows through ``of 
     1978'' and inserting ``to carry out the Surface 
     Transportation Assistance Act of 1982 (96 Stat. 2097) or this 
     title'';
       (B) in subsection (b), by redesignating paragraph (4) as 
     paragraph (3);
       (C) in subsection (d), by striking ``this Act,'' and all 
     that follows through ``Code, which'' and inserting ``the 
     Surface Transportation Assistance Act of 1982 (96 Stat. 2097) 
     or this title that'';
       (D) by striking subsection (e); and
       (E) by redesignating subsections (f) and (g) as subsections 
     (e) and (f), respectively.

     SEC. 1905. TECHNICAL AMENDMENTS TO NONDISCRIMINATION SECTION.

       Section 140 of title 23, United States Code, is amended--
       (1) in subsection (a)--
       (A) in the first sentence, by striking ``subsection (a) of 
     section 105 of this title'' and inserting ``section 135'';
       (B) in the second sentence, by striking ``He'' and 
     inserting ``The Secretary'';
       (C) in the third sentence, by striking ``where he considers 
     it necessary to assure'' and inserting ``if necessary to 
     ensure''; and
       (D) in the last sentence--
       (i) by striking ``him'' and inserting ``the Secretary'' and
       (ii) by striking ``he'' and inserting ``the Secretary'';
       (2) in subsection (b)--
       (A) in the first sentence, by striking ``highway 
     construction'' and inserting ``surface transportation''; and
       (B) in the second sentence--
       (i) by striking ``as he may deem necessary'' and inserting 
     ``as necessary''; and
       (ii) by striking ``not to exceed $2,500,000 for the 
     transition quarter ending September 30, 1976, and'';
       (3) in the second sentence of subsection (c)--
       (A) by striking ``subsection 104(b)(3) of this title'' and 
     inserting ``section 104(b)(3)''; and
       (B) by striking ``he may deem''; and
       (4) in the heading of subsection (d), by striking ``and 
     contracting''.

                   TITLE II--TRANSPORTATION RESEARCH

                          Subtitle A--Funding

     SEC. 2001. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--The following sums are authorized to be 
     appropriated out of the Highway Trust Fund (other than the 
     Mass Transit Account):
       (1) Surface transportation research.--
       (A) In general.--For carrying out sections 502, 503, 506, 
     507, 508, and 511 of title 23, United States Code--
       (i) $211,000,000 for each of fiscal years 2004 and 2005;
       (ii) $215,000,000 for fiscal year 2006;
       (iii) $218,000,000 for fiscal year 2007;
       (iv) $220,000,000 for fiscal year 2008; and
       (v) $223,000,000 for fiscal year 2009.
       (B) Surface transportation-environmental cooperative 
     research program.--For each of fiscal years 2004 through 
     2009, the Secretary shall set aside $20,000,000 of the funds 
     authorized under subparagraph (A) to carry out the surface 
     transportation-environmental cooperative research program 
     under section 507 of title 23, United States Code.
       (2) Training and education.--For carrying out section 504 
     of title 23, United States Code--
       (A) $27,000,000 for fiscal year 2004;
       (B) $28,000,000 for fiscal year 2005;
       (C) $29,000,000 for fiscal year 2006;
       (D) $30,000,000 for fiscal year 2007;
       (E) $31,000,000 for fiscal year 2008; and
       (F) $32,000,000 for fiscal year 2009.
       (3) Bureau of transportation statistics.--For the Bureau of 
     Transportation Statistics to

[[Page 10871]]

     carry out section 111 of title 49, United States Code, 
     $28,000,000 for each of fiscal years 2004 through 2009.
       (4) ITS standards, research, operational tests, and 
     development.--For carrying out sections 524, 525, 526, 527, 
     528, and 529 of title 23, United States Code--
       (A) $120,000,000 for fiscal year 2004;
       (B) $123,000,000 for fiscal year 2005;
       (C) $126,000,000 for fiscal year 2006;
       (D) $129,000,000 for fiscal year 2007;
       (E) $132,000,000 for fiscal year 2008; and
       (F) $135,000,000 for fiscal year 2009.
       (5) University transportation centers.--For carrying out 
     section 510 of title 23, United States Code--
       (A) $40,000,000 for fiscal year 2004; and
       (B) $45,000,000 for each of fiscal years 2005 through 2009.
       (b) Applicability of Title 23, United States Code.--Funds 
     authorized to be appropriated by subsection (a)--
       (1) shall be available for obligation in the same manner as 
     if the funds were apportioned under chapter 1 of title 23, 
     United States Code, except that the Federal share of the cost 
     of a project or activity carried out using the funds shall be 
     the share applicable under section 120(b) of title 23, United 
     States Code, as adjusted under subsection (d) of that section 
     (unless otherwise specified or otherwise determined by the 
     Secretary); and
       (2) shall remain available until expended.
       (c) Allocations.--
       (1) Surface transportation research.--Of the amounts made 
     available under subsection (a)(1)--
       (A) $27,000,000 for each of fiscal years 2004 through 2009 
     shall be available to carry out advanced, high-risk, long-
     term research under section 502(d) of title 23, United States 
     Code;
       (B) $18,000,000 for fiscal years 2004 and 2005, $17,000,000 
     for fiscal year 2006, $15,000,000 for fiscal year 2007, 
     $12,000,000 for fiscal year 2008, and $10,00,000 for fiscal 
     year 2009 shall be available to carry out the long-term 
     pavement performance program under section 502(e) of that 
     title;
       (C) $6,000,000 for each of fiscal years 2004 through 2009 
     shall be available to carry out the high-performance concrete 
     bridge research and technology transfer program under section 
     502(i) of that title;
       (D) $6,000,000 for each of fiscal years 2004 through 2009 
     shall be made available to carry out research on asphalt used 
     in highway pavements;
       (E) $6,000,000 for each of fiscal years 2004 through 2009 
     shall be made available to carry out research on concrete 
     pavements;
       (F) $3,000,000 for each of fiscal years 2004 through 2009 
     shall be made available to carry out research on aggregates 
     used in highway pavements;
       (G) $4,750,000 for each of fiscal years 2004 through 2009 
     shall be made available for further development and 
     deployment of techniques to prevent and mitigate alkali 
     silica reactivity;
       (H) $2,000,000 for fiscal year 2005 shall be remain 
     available until expended for asphalt and asphalt-related 
     reclamation research at the South Dakota School of Mines; and
       (I) $3,000,000 for each of fiscal years 2004 through 2009 
     shall be made available to carry out section 502(f)(3) of 
     title 23, United States Code.
       (2) Technology application program.--Of the amounts made 
     available under subsection (a)(1), $60,000,000 for each of 
     fiscal years 2004 through 2009 shall be available to carry 
     out section 503 of title 23, United States Code.
       (3) Training and education.--Of the amounts made available 
     under subsection (a)(2)--
       (A) $12,000,000 for fiscal year 2004, $12,500,000 for 
     fiscal year 2005, $13,000,000 for fiscal year 2006, 
     $13,500,000 for fiscal year 2007, $14,000,000 for fiscal year 
     2008, and $14,500,000 for fiscal year 2009 shall be available 
     to carry out section 504(a) of title 23, United States Code 
     (relating to the National Highway Institute);
       (B) $15,000,000 for each of fiscal years 2004 through 2009 
     shall be available to carry out section 504(b) of that title 
     (relating to local technical assistance); and
       (C) $3,000,000 for each of fiscal years 2004 through 2009 
     shall be available to carry out section 504(c)(2) of that 
     title (relating to the Eisenhower Transportation Fellowship 
     Program).
       (4) International highway transportation outreach 
     program.--Of the amounts made available under subsection 
     (a)(1), $500,000 for each of fiscal years 2004 through 2009 
     shall be available to carry out section 506 of title 23, 
     United States Code.
       (5) New strategic highway research program.--For each of 
     fiscal years 2004 through 2009, to carry out section 509 of 
     title 23, United States Code, the Secretary shall set aside--
       (A) $15,000,000 of the amounts made available to carry out 
     the interstate maintenance program under section 119 of title 
     23, United States Code, for the fiscal year;
       (B) $19,000,000 of the amounts made available for the 
     National Highway System under section 101 of title 23, United 
     States Code, for the fiscal year;
       (C) $13,000,000 of the amounts made available to carry out 
     the bridge program under section 144 of title 23, United 
     States Code, for the fiscal year;
       (D) $20,000,000 of the amounts made available to carry out 
     the surface transportation program under section 133 of title 
     23, United States Code, for the fiscal year;
       (E) $5,000,000 of the amounts made available to carry out 
     the congestion mitigation and air quality improvement program 
     under section 149 of title 23, United States Code, for the 
     fiscal year; and
       (F) $3,000,000 of the amounts made available to carry out 
     the highway safety improvement program under section 148 of 
     title 23, United States Code, for the fiscal year.
       (6) Commercial vehicle intelligent transportation system 
     infrastructure program.--Of the amounts made available under 
     subsection (a)(4), not less than $30,000,000 for each of 
     fiscal years 2004 through 2009 shall be available to carry 
     out section 527 of title 23, United States Code.
       (d) Transfers of Funds.--The Secretary may transfer--
       (1) to an amount made available under paragraphs (1), (2), 
     or (4) of subsection (c), not to exceed 10 percent of the 
     amount allocated for a fiscal year under any other of those 
     paragraphs; and
       (2) to an amount made available under subparagraphs (A), 
     (B), or (C) of subsection (c)(3), not to exceed 10 percent of 
     the amount allocated for a fiscal year under any other of 
     those subparagraphs.

     SEC. 2002. OBLIGATION CEILING.

       Notwithstanding any other provision of law, the total of 
     all obligations from amounts made available from the Highway 
     Trust Fund (other than the Mass Transit Account) by section 
     2001(a) shall not exceed--
       (1) $426,200,000 for fiscal year 2004;
       (2) $435,200,000 for fiscal year 2005;
       (3) $443,200,000 for fiscal year 2006;
       (4) $450,200,000 for fiscal year 2007;
       (5) $456,200,000 for fiscal year 2008; and
       (6) $463,200,000 for fiscal year 2009.

     SEC. 2003. NOTICE.

       (a) Notice of Reprogramming.--If any funds authorized for 
     carrying out this title or the amendments made by this title 
     are subject to a reprogramming action that requires notice to 
     be provided to the Committee on Appropriations of the House 
     of Representatives and the Committee on Appropriations of the 
     Senate, notice of that action shall be concurrently provided 
     to the Committee on Transportation and Infrastructure and the 
     Committee on Science of the House of Representatives and the 
     Committee on Environment and Public Works of the Senate.
       (b) Notice of Reorganization.--On or before the 15th day 
     preceding the date of any major reorganization of a program, 
     project, or activity of the Department of Transportation for 
     which funds are authorized by this title or the amendments 
     made by this title, the Secretary shall provide notice of the 
     reorganization to the Committee on Transportation and 
     Infrastructure and the Committee on Science of the House of 
     Representatives and the Committee on Environment and Public 
     Works of the Senate.

                  Subtitle B--Research and Technology

     SEC. 2101. RESEARCH AND TECHNOLOGY PROGRAM.

       (a) In General.--Chapter 5 of title 23, United States Code, 
     is amended to read as follows:

                  ``CHAPTER 5--RESEARCH AND TECHNOLOGY

                 ``SUBCHAPTER I--SURFACE TRANSPORTATION

``Sec.
``501. Definitions.
``502. Surface transportation research.
``503. Technology application program.
``504. Training and education.
``505. State planning and research.
``506. International highway transportation outreach program.
``507. Surface transportation-environmental cooperative research 
              program.
``508. Surface transportation research technology deployment and 
              strategic planning.
``509. New strategic highway research program.
``510. University transportation centers.
``511. Multistate corridor operations and management.
``512. Transportation analysis simulation system.

    ``SUBCHAPTER II--INTELLIGENT TRANSPORTATION SYSTEM RESEARCH AND 
                      TECHNICAL ASSISTANCE PROGRAM

``521. Finding.
``522. Goals and purposes.
``523. Definitions.
``524. General authorities and requirements.
``525. National ITS Program Plan.
``526. National ITS architecture and standards.
``527. Commercial vehicle intelligent transportation system 
              infrastructure program.
``528. Research and development.
``529. Use of funds.

                 ``SUBCHAPTER I--SURFACE TRANSPORTATION

     ``Sec. 501. Definitions

       ``In this subchapter:
       ``(1) Federal laboratory.--The term `Federal laboratory' 
     includes--
       ``(A) a Government-owned, Government-operated laboratory; 
     and
       ``(B) a Government-owned, contractor-operated laboratory.
       ``(2) Safety.--The term `safety' includes highway and 
     traffic safety systems, research, and development relating 
     to--
       ``(A) vehicle, highway, driver, passenger, bicyclist, and 
     pedestrian characteristics;
       ``(B) accident investigations;
       ``(C) integrated, interoperable emergency communications;
       ``(D) emergency medical care; and

[[Page 10872]]

       ``(E) transportation of the injured.

     ``Sec. 502. Surface transportation research

       ``(a) In General.--
       ``(1) Research, development, and technology transfer 
     activities.--The Secretary may carry out research, 
     development, and technology transfer activities with respect 
     to--
       ``(A) all phases of transportation planning and development 
     (including new technologies, construction, transportation 
     systems management and operations development, design, 
     maintenance, safety, security, financing, data collection and 
     analysis, demand forecasting, multimodal assessment, and 
     traffic conditions); and
       ``(B) the effect of State laws on the activities described 
     in subparagraph (A).
       ``(2) Tests and development.--The Secretary may test, 
     develop, or assist in testing and developing, any material, 
     invention, patented article, or process.
       ``(3) Cooperation, grants, and contracts.--
       ``(A) In general.--The Secretary may carry out this 
     section--
       ``(i) independently;
       ``(ii) in cooperation with--

       ``(I) any other Federal agency or instrumentality; and
       ``(II) any Federal laboratory; or

       ``(iii) by making grants to, or entering into contracts, 
     cooperative agreements, and other transactions with--

       ``(I) the National Academy of Sciences;
       ``(II) the American Association of State Highway and 
     Transportation Officials;
       ``(III) planning organizations;
       ``(IV) a Federal laboratory;
       ``(V) a State agency;
       ``(VI) an authority, association, institution, or 
     organization;
       ``(VII) a for-profit or nonprofit corporation;
       ``(VIII) a foreign country; or
       ``(IX) any other person.

       ``(B) Competition; review.--All parties entering into 
     contracts, cooperative agreements or other transactions with 
     the Secretary, or receiving grants, to perform research or 
     provide technical assistance under this section shall be 
     selected, to the maximum extent practicable and appropriate--
       ``(i) on a competitive basis; and
       ``(ii) on the basis of the results of peer review of 
     proposals submitted to the Secretary.
       ``(4) Technological innovation.--The programs and 
     activities carried out under this section shall be consistent 
     with the surface transportation research and technology 
     development strategic plan developed under section 508(c).
       ``(5) Funds.--
       ``(A) Special account.--In addition to other funds made 
     available to carry out this section, the Secretary shall use 
     such funds as may be deposited by any cooperating 
     organization or person in a special account of the Treasury 
     established for this purpose.
       ``(B) Use of funds.--The Secretary shall use funds made 
     available to carry out this section to develop, administer, 
     communicate, and promote the use of products of research, 
     development, and technology transfer programs under this 
     section.
       ``(b) Collaborative Research and Development.--
       ``(1) In general.--To encourage innovative solutions to 
     surface transportation problems and stimulate the deployment 
     of new technology, the Secretary may carry out, on a cost-
     shared basis, collaborative research and development with--
       ``(A) non-Federal entities (including State and local 
     governments, foreign governments, colleges and universities, 
     corporations, institutions, partnerships, sole 
     proprietorships, and trade associations that are incorporated 
     or established under the laws of any State); and
       ``(B) Federal laboratories.
       ``(2) Agreements.--In carrying out this subsection, the 
     Secretary may enter into cooperative research and development 
     agreements (as defined in section 12 of the Stevenson-Wydler 
     Technology Innovation Act of 1980 (15 U.S.C. 3710a)).
       ``(3) Federal share.--
       ``(A) In general.--The Federal share of the cost of 
     activities carried out under a cooperative research and 
     development agreement entered into under this subsection 
     shall not exceed 50 percent, except that if there is 
     substantial public interest or benefit, the Secretary may 
     approve a greater Federal share.
       ``(B) Non-federal share.--All costs directly incurred by 
     the non-Federal partners, including personnel, travel, and 
     hardware development costs, shall be credited toward the non-
     Federal share of the cost of the activities described in 
     subparagraph (A).
       ``(4) Use of technology.--The research, development, or use 
     of a technology under a cooperative research and development 
     agreement entered into under this subsection, including the 
     terms under which the technology may be licensed and the 
     resulting royalties may be distributed, shall be subject to 
     the Stevenson-Wydler Technology Innovation Act of 1980 (15 
     U.S.C. 3701 et seq.).
       ``(5) Waiver of advertising requirements.--Section 3709 of 
     the Revised Statutes (41 U.S.C. 5) shall not apply to a 
     contract or agreement entered into under this chapter.
       ``(c) Contents of Research Program.--The Secretary shall 
     include as priority areas of effort within the surface 
     transportation research program--
       ``(1) the development of new technologies and methods in 
     materials, pavements, structures, design, and construction, 
     with the objectives of--
       ``(A)(i) increasing to 50 years the expected life of 
     pavements;
       ``(ii) increasing to 100 years the expected life of 
     bridges; and
       ``(iii) significantly increasing the durability of other 
     infrastructure;
       ``(B) lowering the life-cycle costs, including--
       ``(i) construction costs;
       ``(ii) maintenance costs;
       ``(iii) operations costs; and
       ``(vi) user costs.
       ``(2) the development, and testing for effectiveness, of 
     nondestructive evaluation technologies for civil 
     infrastructure using existing and new technologies;
       ``(3) the investigation of--
       ``(A) the application of current natural hazard mitigation 
     techniques to manmade hazards; and
       ``(B) the continuation of hazard mitigation research 
     combining manmade and natural hazards;
       ``(4) the improvement of safety--
       ``(A) at intersections;
       ``(B) with respect to accidents involving vehicles run off 
     the road; and
       ``(C) on rural roads;
       ``(5) the reduction of work zone incursions and improvement 
     of work zone safety;
       ``(6) the improvement of geometric design of roads for the 
     purpose of safety;
       ``(7) the examination of data collected through the 
     national bridge inventory conducted under section 144 using 
     the national bridge inspection standards established under 
     section 151, with the objectives of determining whether--
       ``(A) the most useful types of data are being collected; 
     and
       ``(B) any improvement could be made in the types of data 
     collected and the manner in which the data is collected, with 
     respect to bridges in the United States;
       ``(8) the improvement of the infrastructure investment 
     needs report described in subsection (g) through--
       ``(A) the study and implementation of new methods of 
     collecting better quality data, particularly with respect to 
     performance, congestion, and infrastructure conditions;
       ``(B) monitoring of the surface transportation system in a 
     system-wide manner, through the use of--
       ``(i) intelligent transportation system technologies of 
     traffic operations centers; and
       ``(ii) other new data collection technologies as sources of 
     better quality performance data;
       ``(C) the determination of the critical metrics that should 
     be used to determine the condition and performance of the 
     surface transportation system; and
       ``(D) the study and implementation of new methods of 
     statistical analysis and computer models to improve the 
     prediction of future infrastructure investment requirements;
       ``(9) the development of methods to improve the 
     determination of benefits from infrastructure improvements, 
     including--
       ``(A) more accurate calculations of benefit-to-cost ratios, 
     considering benefits and impacts throughout local and 
     regional transportation systems;
       ``(B) improvements in calculating life-cycle costs; and
       ``(C) valuation of assets;
       ``(10) the improvement of planning processes to better 
     predict outcomes of transportation projects, including the 
     application of computer simulations in the planning process 
     to predict outcomes of planning decisions;
       ``(11) the multimodal applications of Geographic 
     Information Systems and remote sensing, including such areas 
     of application as--
       ``(A) planning;
       ``(B) environmental decisionmaking and project delivery; 
     and
       ``(C) freight movement;
       ``(12) the development and application of methods of 
     providing revenues to the Highway Trust Fund with the 
     objective of offsetting potential reductions in fuel tax 
     receipts;
       ``(13) the development of tests and methods to determine 
     the benefits and costs to communities of major transportation 
     investments and projects;
       ``(14) the conduct of extreme weather research, including 
     research to--
       ``(A) reduce contraction and expansion damage;
       ``(B) reduce or repair road damage caused by freezing and 
     thawing;
       ``(C) improve deicing or snow removal techniques;
       ``(D) develop better methods to reduce the risk of thermal 
     collapse, including collapse from changes in underlying 
     permafrost;
       ``(E) improve concrete and asphalt installation in extreme 
     weather conditions; and
       ``(F) make other improvements to protect highway 
     infrastructure or enhance highway safety or performance;
       ``(15) the improvement of surface transportation planning;
       ``(16) environmental research;
       ``(17) transportation system management and operations; and
       ``(18) any other surface transportation research topics 
     that the Secretary determines, in accordance with the 
     strategic planning process under section 508, to be critical.
       ``(d) Advanced, High-Risk Research.--
       ``(1) In general.--The Secretary shall establish and carry 
     out, in accordance with the surface transportation research 
     and technology development strategic plan developed under 
     section 508(c) and research priority areas described in 
     subsection (c), an advanced research program that addresses 
     longer-term, higher-risk research with potentially dramatic 
     breakthroughs for improving the durability, efficiency, 
     environmental impact, productivity, and safety (including 
     bicycle and pedestrian safety) aspects of highway and 
     intermodal transportation systems.

[[Page 10873]]

       ``(2) Partnerships.--In carrying out the program, the 
     Secretary shall seek to develop partnerships with the public 
     and private sectors.
       ``(3) Report.--The Secretary shall include in the strategic 
     plan required under section 508(c) a description of each of 
     the projects, and the amount of funds expended for each 
     project, carried out under this subsection during the fiscal 
     year.
       ``(e) Long-Term Pavement Performance Program.--
       ``(1) Authority.--The Secretary shall continue, through 
     September 30, 2009, the long-term pavement performance 
     program tests, monitoring, and data analysis.
       ``(2) Grants, cooperative agreements, and contracts.--Under 
     the program, the Secretary shall make grants and enter into 
     cooperative agreements and contracts to--
       ``(A) monitor, material-test, and evaluate highway test 
     sections in existence as of the date of the grant, agreement, 
     or contract;
       ``(B) analyze the data obtained in carrying out 
     subparagraph (A); and
       ``(C) prepare products to fulfill program objectives and 
     meet future pavement technology needs.
       ``(3) Conclusion of program.--
       ``(A) Summary report.--The Secretary shall include in the 
     strategic plan required under section 508(c) a report on the 
     initial conclusions of the long-term pavement performance 
     program that includes--
       ``(i) an analysis of any research objectives that remain to 
     be achieved under the program;
       ``(ii) an analysis of other associated longer-term 
     expenditures under the program that are in the public 
     interest;
       ``(iii) a detailed plan regarding the storage, maintenance, 
     and user support of the database, information management 
     system, and materials reference library of the program;
       ``(iv) a schedule for continued implementation of the 
     necessary data collection and analysis and project plan under 
     the program; and
       ``(v) an estimate of the costs of carrying out each of the 
     activities described in clauses (i) through (iv) for each 
     fiscal year during which the program is carried out.
       ``(B) Deadline; usefulness of advances.--The Secretary 
     shall, to the maximum extent practicable--
       ``(i) ensure that the long-term pavement performance 
     program is concluded not later than September 30, 2009; and
       ``(ii) make such allowances as are necessary to ensure the 
     usefulness of the technological advances resulting from the 
     program.
       ``(f) Seismic Research.--The Secretary shall--
       ``(1) in consultation and cooperation with Federal agencies 
     participating in the National Earthquake Hazards Reduction 
     Program established by section 5 of the Earthquake Hazards 
     Reduction Act of 1977 (42 U.S.C. 7704), coordinate the 
     conduct of seismic research;
       ``(2) take such actions as are necessary to ensure that the 
     coordination of the research is consistent with--
       ``(A) planning and coordination activities of the Director 
     of the Federal Emergency Management Agency under section 
     5(b)(1) of that Act (42 U.S.C. 7704(b)(1)); and
       ``(B) the plan developed by the Director of the Federal 
     Emergency Management Agency under section 8(b) of that Act 
     (42 U.S.C. 7705b(b)); and
       ``(3) in cooperation with the Center for Civil Engineering 
     Research at the University of Nevada, Reno, carry out a 
     seismic research program--
       ``(A) to study the vulnerability of the Federal-aid highway 
     system and other surface transportation systems to seismic 
     activity;
       ``(B) to develop and implement cost-effective methods to 
     reduce the vulnerability; and
       ``(C) to conduct seismic research and upgrade earthquake 
     simulation facilities as necessary to carry out the program.
       ``(g) Infrastructure Investment Needs Report.--
       ``(1) In general.--Not later than July 31, 2004, and July 
     31 of every second year thereafter, the Secretary shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives a report that 
     describes--
       ``(A) estimates of the future highway and bridge needs of 
     the United States; and
       ``(B) the backlog of current highway and bridge needs.
       ``(2) Comparison with prior reports.--Each report under 
     paragraph (1) shall provide the means, including all 
     necessary information, to relate and compare the conditions 
     and service measures used in the previous biennial reports.
       ``(h) Security Related Research and Technology Transfer 
     Activities.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004, the Secretary, 
     in consultation with the Secretary of Homeland Security, with 
     key stakeholder input (including State transportation 
     departments) shall develop a 5-year strategic plan for 
     research and technology transfer and deployment activities 
     pertaining to the security aspects of highway infrastructure 
     and operations.
       ``(2) Components of plan.--The plan shall include--
       ``(A) an identification of which agencies are responsible 
     for the conduct of various research and technology transfer 
     activities;
       ``(B) a description of the manner in which those activities 
     will be coordinated; and
       ``(C) a description of the process to be used to ensure 
     that the advances derived from relevant activities supported 
     by the Federal Highway Administration are consistent with the 
     operational guidelines, policies, recommendations, and 
     regulations of the Department of Homeland Security; and
       ``(D) a systematic evaluation of the research that should 
     be conducted to address, at a minimum--
       ``(i) vulnerabilities of, and measures that may be taken to 
     improve, emergency response capabilities and evacuations;
       ``(ii) recommended upgrades of traffic management during 
     crises;
       ``(iii) integrated, interoperable emergency communications 
     among the public, the military, law enforcement, fire and 
     emergency medical services, and transportation agencies;
       ``(iv) protection of critical, security-related 
     infrastructure; and
       ``(v) structural reinforcement of key facilities.
       ``(3) Submission.--On completion of the plan under this 
     subsection, the Secretary shall submit to the Committee on 
     Environment and Public Works of the Senate and the Committee 
     on Transportation and Infrastructure of the House of 
     Representatives--
       ``(A) a copy of the plan developed under paragraph (1); and
       ``(B) a copy of a memorandum of understanding specifying 
     coordination strategies and assignment of responsibilities 
     covered by the plan that is signed by the Secretary and the 
     Secretary of Homeland Security.
       ``(i) High-Performance Concrete Bridge Research and 
     Technology Transfer Program.--In accordance with the 
     objectives described in subsection (c)(1) and the 
     requirements under sections 503(b)(4) and 504(b), the 
     Secretary shall carry out a program to demonstrate the 
     application of high-performance concrete in the construction 
     and rehabilitation of bridges.
       ``(j) Biobased Transportation Research.--There shall be 
     available from the Highway Trust Fund (other than the Mass 
     Transit Account) $18,000,000 for each of fiscal years 2004 
     through 2009 equally divided and available to carry out 
     biobased research of national importance at the National 
     Biodiesel Board and at research centers identified in section 
     9011 of Public Law 107-171.

     ``Sec. 503. Technology application program

       ``(a) Technology Application Initiatives and Partnerships 
     Program.--
       ``(1) Establishment.--The Secretary, in consultation with 
     interested stakeholders, shall develop and administer a 
     national technology and innovation application initiatives 
     and partnerships program.
       ``(2) Purpose.--The purpose of the program shall be to 
     significantly accelerate the adoption of technology and 
     innovation by the surface transportation community.
       ``(3) Application goals.--
       ``(A) Establishment.--Not later than 180 days after the 
     date of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004, the Secretary, 
     in consultation with the Surface Transportation Research 
     Technology Advisory Committee, State transportation 
     departments, and other interested stakeholders, shall 
     establish, as part of the surface transportation research and 
     technology development strategic plan under section 508(c), 
     goals to carry out paragraph (1).
       ``(B) Design.--Each of the goals and the program developed 
     to achieve the goals shall be designed to provide tangible 
     benefits, with respect to transportation systems, in the 
     areas of efficiency, safety, reliability, service life, 
     environmental protection, and sustainability.
       ``(C) Strategies for achievement.--For each goal, the 
     Secretary, in cooperation with representatives of the 
     transportation community, such as States, local governments, 
     the private sector, and academia, shall use domestic and 
     international technology to develop strategies and 
     initiatives to achieve the goal, including technical 
     assistance in deploying technology and mechanisms for sharing 
     information among program participants.
       ``(4) Integration with other programs.--The Secretary shall 
     integrate activities carried out under this subsection with 
     the efforts of the Secretary to--
       ``(A) disseminate the results of research sponsored by the 
     Secretary; and
       ``(B) facilitate technology transfer.
       ``(5) Leveraging of federal resources.--In selecting 
     projects to be carried out under this subsection, the 
     Secretary shall give preference to projects that leverage 
     Federal funds with other significant public or private 
     resources.
       ``(6) Grants, cooperative agreements, and contracts.--Under 
     the program, the Secretary may make grants and enter into 
     cooperative agreements and contracts to foster alliances and 
     support efforts to stimulate advances in transportation 
     technology.
       ``(7) Reports.--The results and progress of activities 
     carried out under this section shall be published as part of 
     the annual transportation research report prepared by the 
     Secretary under section 508(c)(5).
       ``(8) Allocation.--To the extent appropriate to achieve the 
     goals established under paragraph (3), the Secretary may 
     further allocate funds made available to carry out this 
     section to States for use by those States.
       ``(b) Innovative Surface Transportation Infrastructure 
     Research and Construction Program.--
       ``(1) In general.--The Secretary shall establish and carry 
     out a program for the application of innovative material, 
     design, and construction technologies in the construction, 
     preservation,

[[Page 10874]]

     and rehabilitation of elements of surface transportation 
     infrastructure.
       ``(2) Goals.--The goals of the program shall include--
       ``(A) the development of new, cost-effective, and 
     innovative materials;
       ``(B) the reduction of maintenance costs and life-cycle 
     costs of elements of infrastructure, including the costs of 
     new construction, replacement, and rehabilitation;
       ``(C) the development of construction techniques to 
     increase safety and reduce construction time and traffic 
     congestion;
       ``(D) the development of engineering design criteria for 
     innovative products and materials for use in surface 
     transportation infrastructure;
       ``(E) the development of highway bridges and structures 
     that will withstand natural disasters and disasters caused by 
     human activity; and
       ``(F) the development of new, nondestructive technologies 
     and techniques for the evaluation of elements of 
     transportation infrastructure.
       ``(3) Grants, cooperative agreements, and contracts.--
       ``(A) In general.--Under the program, the Secretary shall 
     make grants to, and enter into cooperative agreements and 
     contracts with--
       ``(i) States, other Federal agencies, universities and 
     colleges, private sector entities, and nonprofit 
     organizations, to pay the Federal share of the cost of 
     research, development, and technology transfer concerning 
     innovative materials and methods; and
       ``(ii) States, to pay the Federal share of the cost of 
     repair, rehabilitation, replacement, and new construction of 
     elements of surface transportation infrastructure that 
     demonstrate the application of innovative materials and 
     methods.
       ``(B) Applications.--
       ``(i) In general.--To receive a grant under this 
     subsection, an entity described in subparagraph (A) shall 
     submit to the Secretary an application in such form and 
     containing such information as the Secretary may require.
       ``(ii) Approval.--The Secretary shall select and approve an 
     application based on whether the proposed project that is the 
     subject of the application would meet the goals described in 
     paragraph (2).
       ``(4) Technology and information transfer.--The Secretary 
     shall take such action as is necessary to--
       ``(A) ensure that the information and technology resulting 
     from research conducted under paragraph (3) is made available 
     to State and local transportation departments and other 
     interested parties, as specified by the Secretary; and
       ``(B) encourage the use of the information and technology.
       ``(5) Federal share.--The Federal share of the cost of a 
     project under this section shall be determined by the 
     Secretary.

     ``Sec. 504. Training and education

       ``(a) National Highway Institute.--
       ``(1) In general.--The Secretary shall--
       ``(A) operate, in the Federal Highway Administration, a 
     National Highway Institute (referred to in this subsection as 
     the `Institute'); and
       ``(B) administer, through the Institute, the authority 
     vested in the Secretary by this title or by any other law for 
     the development and conduct of education and training 
     programs relating to highways.
       ``(2) Duties of the institute.--In cooperation with State 
     transportation departments, industries in the United States, 
     and national or international entities, the Institute shall 
     develop and administer education and training programs of 
     instruction for--
       ``(A) Federal Highway Administration, State, and local 
     transportation agency employees;
       ``(B) regional, State, and metropolitan planning 
     organizations;
       ``(C) State and local police, public safety, and motor 
     vehicle employees; and
       ``(D) United States citizens and foreign nationals engaged 
     or to be engaged in surface transportation work of interest 
     to the United States.
       ``(3) Courses.--
       ``(A) In general.--The Institute shall--
       ``(i) develop or update existing courses in asset 
     management, including courses that include such components 
     as--

       ``(I) the determination of life-cycle costs;
       ``(II) the valuation of assets;
       ``(III) benefit-to-cost ratio calculations; and
       ``(IV) objective decisionmaking processes for project 
     selection; and

       ``(ii) continually develop courses relating to the 
     application of emerging technologies for--

       ``(I) transportation infrastructure applications and asset 
     management;
       ``(II) intelligent transportation systems;
       ``(III) operations (including security operations);
       ``(IV) the collection and archiving of data;
       ``(V) expediting the planning and development of 
     transportation projects; and
       ``(VI) the intermodal movement of individuals and freight.

       ``(B) Additional courses.--In addition to the courses 
     developed under subparagraph (A), the Institute, in 
     consultation with State transportation departments, 
     metropolitan planning organizations, and the American 
     Association of State Highway and Transportation Officials, 
     may develop courses relating to technology, methods, 
     techniques, engineering, construction, safety, maintenance, 
     environmental mitigation and compliance, regulations, 
     management, inspection, and finance.
       ``(C) Revision of courses offered.--The Institute shall 
     periodically--
       ``(i) review the course inventory of the Institute; and
       ``(ii) revise or cease to offer courses based on course 
     content, applicability, and need.
       ``(4) Eligibility; federal share.--The funds apportioned to 
     a State under section 104(b)(3) for the surface 
     transportation program shall be available for expenditure by 
     the State transportation department for the payment of not to 
     exceed 80 percent of the cost of tuition and direct 
     educational expenses (excluding salaries) in connection with 
     the education and training of employees of State and local 
     transportation agencies in accordance with this subsection.
       ``(5) Federal responsibility.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     education and training of employees of Federal, State, and 
     local transportation (including highway) agencies authorized 
     under this subsection may be provided--
       ``(i) by the Secretary, at no cost to the States and local 
     governments, if the Secretary determines that provision at no 
     cost is in the public interest; or
       ``(ii) by the State, through grants, cooperative 
     agreements, and contracts with public and private agencies, 
     institutions, individuals, and the Institute.
       ``(B) Payment of full cost by private persons.--Private 
     agencies, international or foreign entities, and individuals 
     shall pay the full cost of any education and training 
     (including the cost of course development) received by the 
     agencies, entities, and individuals, unless the Secretary 
     determines that payment of a lesser amount of the cost is of 
     critical importance to the public interest.
       ``(6) Training fellowships; cooperation.--The Institute 
     may--
       ``(A) engage in training activities authorized under this 
     subsection, including the granting of training fellowships; 
     and
       ``(B) exercise the authority of the Institute independently 
     or in cooperation with any--
       ``(i) other Federal or State agency;
       ``(ii) association, authority, institution, or 
     organization;
       ``(iii) for-profit or nonprofit corporation;
       ``(iv) national or international entity;
       ``(v) foreign country; or
       ``(vi) person.
       ``(7) Collection of fees.--
       ``(A) In general.--In accordance with this subsection, the 
     Institute may assess and collect fees to defray the costs of 
     the Institute in developing or administering education and 
     training programs under this subsection.
       ``(B) Persons subject to fees.--Fees may be assessed and 
     collected under this subsection only with respect to--
       ``(i) persons and entities for whom education or training 
     programs are developed or administered under this subsection; 
     and
       ``(ii) persons and entities to whom education or training 
     is provided under this subsection.
       ``(C) Amount of fees.--The fees assessed and collected 
     under this subsection shall be established in a manner that 
     ensures that the liability of any person or entity for a fee 
     is reasonably based on the proportion of the costs referred 
     to in subparagraph (A) that relate to the person or entity.
       ``(D) Use.--All fees collected under this subsection shall 
     be used, without further appropriation, to defray costs 
     associated with the development or administration of 
     education and training programs authorized under this 
     subsection.
       ``(8) Relation to fees.--The funds made available to carry 
     out this subsection may be combined with or held separate 
     from the fees collected under--
       ``(A) paragraph (7);
       ``(B) memoranda of understanding;
       ``(C) regional compacts; and
       ``(D) other similar agreements.
       ``(b) Local Technical Assistance Program.--
       ``(1) Authority.--The Secretary shall carry out a local 
     technical assistance program that will provide access to 
     surface transportation technology to--
       ``(A) highway and transportation agencies in urbanized 
     areas;
       ``(B) highway and transportation agencies in rural areas;
       ``(C) contractors that perform work for the agencies; and
       ``(D) infrastructure security.
       ``(2) Grants, cooperative agreements, and contracts.--The 
     Secretary may make grants and enter into cooperative 
     agreements and contracts to provide education and training, 
     technical assistance, and related support services to--
       ``(A) assist rural, local transportation agencies and 
     tribal governments, and the consultants and construction 
     personnel working for the agencies and governments, to--
       ``(i) develop and expand expertise in road and 
     transportation areas (including pavement, bridge, concrete 
     structures, intermodal connections, safety management 
     systems, intelligent transportation systems, incident 
     response, operations, and traffic safety countermeasures);
       ``(ii) improve roads and bridges;
       ``(iii) enhance--

       ``(I) programs for the movement of passengers and freight; 
     and
       ``(II) intergovernmental transportation planning and 
     project selection; and

       ``(iv) deal effectively with special transportation-related 
     problems by preparing and providing training packages, 
     manuals, guidelines, and technical resource materials;
       ``(B) develop technical assistance for tourism and 
     recreational travel;

[[Page 10875]]

       ``(C) identify, package, and deliver transportation 
     technology and traffic safety information to local 
     jurisdictions to assist urban transportation agencies in 
     developing and expanding their ability to deal effectively 
     with transportation-related problems (particularly the 
     promotion of regional cooperation);
       ``(D) operate, in cooperation with State transportation 
     departments and universities--
       ``(i) local technical assistance program centers designated 
     to provide transportation technology transfer services to 
     rural areas and to urbanized areas; and
       ``(ii) local technical assistance program centers 
     designated to provide transportation technical assistance to 
     tribal governments; and
       ``(E) allow local transportation agencies and tribal 
     governments, in cooperation with the private sector, to 
     enhance new technology implementation.
       ``(c) Research Fellowships.--
       ``(1) General authority.--The Secretary, acting 
     independently or in cooperation with other Federal agencies 
     and instrumentalities, may make grants for research 
     fellowships for any purpose for which research is authorized 
     by this chapter.
       ``(2) Dwight david eisenhower transportation fellowship 
     program.--The Secretary shall establish and implement a 
     transportation research fellowship program, to be known as 
     the `Dwight David Eisenhower Transportation Fellowship 
     Program', for the purpose of attracting qualified students to 
     the field of transportation.

     ``Sec. 505. State planning and research

       ``(a) In General.--Two percent of the sums apportioned to a 
     State for fiscal year 2004 and each fiscal year thereafter 
     under sections 104 (other than subsections (f) and (h)) and 
     144 shall be available for expenditure by the State, in 
     consultation with the Secretary, only for--
       ``(1) the conduct of engineering and economic surveys and 
     investigations;
       ``(2) the planning of--
       ``(A) future highway programs and local public 
     transportation systems; and
       ``(B) the financing of those programs and systems, 
     including metropolitan and statewide planning under sections 
     134 and 135;
       ``(3) the development and implementation of management 
     systems under section 303;
       ``(4) the conduct of studies on--
       ``(A) the economy, safety, and convenience of surface 
     transportation systems; and
       ``(B) the desirable regulation and equitable taxation of 
     those systems;
       ``(5) research, development, and technology transfer 
     activities necessary in connection with the planning, design, 
     construction, management, and maintenance of highway, public 
     transportation, and intermodal transportation systems;
       ``(6) the conduct of studies, research, and training 
     relating to the engineering standards and construction 
     materials for surface transportation systems described in 
     paragraph (5) (including the evaluation and accreditation of 
     inspection and testing and the regulation of and charging for 
     the use of the standards and materials); and
       ``(7) the conduct of activities relating to the planning of 
     real-time monitoring elements.
       ``(b) Minimum Expenditures on Research, Development, and 
     Technology Transfer Activities.--
       ``(1) In general.--Subject to paragraph (2), not less than 
     25 percent of the funds subject to subsection (a) that are 
     apportioned to a State for a fiscal year shall be expended by 
     the State for research, development, and technology transfer 
     activities that--
       ``(A) are described in subsection (a); and
       ``(B) relate to highway, public transportation, and 
     intermodal transportation systems.
       ``(2) Waivers.--The Secretary may waive the application of 
     paragraph (1) with respect to a State for a fiscal year if--
       ``(A) the State certifies to the Secretary for the fiscal 
     year that total expenditures by the State for transportation 
     planning under sections 134 and 135 will exceed 75 percent of 
     the funds described in paragraph (1); and
       ``(B) the Secretary accepts the certification of the State.
       ``(3) Nonapplicability of assessment.--Funds expended under 
     paragraph (1) shall not be considered to be part of the 
     extramural budget of the agency for the purpose of section 9 
     of the Small Business Act (15 U.S.C. 638).
       ``(c) Federal Share.--The Federal share of the cost of a 
     project carried out using funds subject to subsection (a) 
     shall be the share applicable under section 120(b), as 
     adjusted under subsection (d) of that section.
       ``(d) Administration of Sums.--Funds subject to subsection 
     (a) shall be--
       ``(1) combined and administered by the Secretary as a 
     single fund; and
       ``(2) available for obligation for the period described in 
     section 118(b)(2).
       ``(e) Eligible Use of State Planning and Research Funds.--A 
     State, in coordination with the Secretary, may obligate funds 
     made available to carry out this section for any purpose 
     authorized under section 506(a).

     ``Sec. 506. International highway transportation outreach 
       program

       ``(a) Establishment.--The Secretary may establish an 
     international highway transportation outreach program--
       ``(1) to inform the United States highway community of 
     technological innovations in foreign countries that could 
     significantly improve highway transportation in the United 
     States;
       ``(2) to promote United States highway transportation 
     expertise, goods, and services in foreign countries; and
       ``(3) to increase transfers of United States highway 
     transportation technology to foreign countries.
       ``(b) Activities.--Activities carried out under the program 
     may include--
       ``(1) the development, monitoring, assessment, and 
     dissemination in the United States of information about 
     highway transportation innovations in foreign countries that 
     could significantly improve highway transportation in the 
     United States;
       ``(2) research, development, demonstration, training, and 
     other forms of technology transfer and exchange;
       ``(3) the provision to foreign countries, through 
     participation in trade shows, seminars, expositions, and 
     other similar activities, of information relating to the 
     technical quality of United States highway transportation 
     goods and services;
       ``(4) the offering of technical services of the Federal 
     Highway Administration that cannot be readily obtained from 
     private sector firms in the United States for incorporation 
     into the proposals of those firms undertaking highway 
     transportation projects outside the United States, if the 
     costs of the technical services will be recovered under the 
     terms of the project;
       ``(5) the conduct of studies to assess the need for, or 
     feasibility of, highway transportation improvements in 
     foreign countries; and
       ``(6) the gathering and dissemination of information on 
     foreign transportation markets and industries.
       ``(c) Cooperation.--The Secretary may carry out this 
     section in cooperation with any appropriate--
       ``(1) Federal, State, or local agency;
       ``(2) authority, association, institution, or organization;
       ``(3) for-profit or nonprofit corporation;
       ``(4) national or international entity;
       ``(5) foreign country; or
       ``(6) person.
       ``(d) Funds.--
       ``(1) Contributions.--Funds available to carry out this 
     section shall include funds deposited by any cooperating 
     organization or person into a special account of the Treasury 
     established for this purpose.
       ``(2) Eligible uses of funds.--The funds deposited into the 
     account, and other funds available to carry out this section, 
     shall be available to cover the cost of any activity eligible 
     under this section, including the cost of--
       ``(A) promotional materials;
       ``(B) travel;
       ``(C) reception and representation expenses; and
       ``(D) salaries and benefits.
       ``(3) Reimbursements for salaries and benefits.--
     Reimbursements for salaries and benefits of Department of 
     Transportation employees providing services under this 
     section shall be credited to the account.
       ``(e) Report--For each fiscal year, the Secretary shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives a report that 
     describes the destinations and individual trip costs of 
     international travel conducted in carrying out activities 
     described in this section.

     ``Sec. 507. Surface transportation-environmental cooperative 
       research program

       ``(a) In General.--The Secretary shall establish and carry 
     out a surface transportation-environmental cooperative 
     research program.
       ``(b) Contents.--The program carried out under this section 
     may include research--
       ``(1) to develop more accurate models for evaluating 
     transportation control measures and transportation system 
     designs that are appropriate for use by State and local 
     governments (including metropolitan planning organizations) 
     in designing implementation plans to meet Federal, State, and 
     local environmental requirements;
       ``(2) to improve understanding of the factors that 
     contribute to the demand for transportation;
       ``(3) to develop indicators of economic, social, and 
     environmental performance of transportation systems to 
     facilitate analysis of potential alternatives;
       ``(4) to meet additional priorities as determined by the 
     Secretary in the strategic planning process under section 
     508; and
       ``(5) to refine, through the conduct of workshops, 
     symposia, and panels, and in consultation with stakeholders 
     (including the Department of Energy, the Environmental 
     Protection Agency, and other appropriate Federal and State 
     agencies and associations) the scope and research emphases of 
     the program.
       ``(c) Program Administration.--The Secretary shall--
       ``(1) administer the program established under this 
     section; and
       ``(2) ensure, to the maximum extent practicable, that--
       ``(A) the best projects and researchers are selected to 
     conduct research in the priority areas described in 
     subsection (b)--
       ``(i) on the basis of merit of each submitted proposal; and
       ``(ii) through the use of open solicitations and selection 
     by a panel of appropriate experts;
       ``(B) a qualified, permanent core staff with the ability 
     and expertise to manage a large multiyear budget is used;
       ``(C) the stakeholders are involved in the governance of 
     the program, at the executive, overall program, and technical 
     levels, through the use of expert panels and committees; and

[[Page 10876]]

       ``(D) there is no duplication of research effort between 
     the program established under this section and the new 
     strategic highway research program established under section 
     509.
       ``(d) National Academy of Sciences.--The Secretary may make 
     grants to, and enter into cooperative agreements with, the 
     National Academy of Sciences to carry out such activities 
     relating to the research, technology, and technology transfer 
     activities described in subsections (b) and (c) as the 
     Secretary determines to be appropriate.

     ``Sec. 508. Surface transportation research technology 
       deployment and strategic planning

       ``(a) Planning.--
       ``(1) Establishment.--The Secretary shall--
       ``(A) establish, in accordance with section 306 of title 5, 
     a strategic planning process that--
       ``(i) enhances effective implementation of this section 
     through the establishment in accordance with paragraph (2) of 
     the Surface Transportation Research Technology Advisory 
     Committee; and
       ``(ii) focuses on surface transportation research funded 
     through paragraphs (1), (2), (4), and (5) of section 2001(a) 
     of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004, taking into consideration 
     national surface transportation system needs and 
     intermodality requirements;
       ``(B) coordinate Federal surface transportation research, 
     technology development, and deployment activities;
       ``(C) at such intervals as are appropriate and practicable, 
     measure the results of those activities and the ways in which 
     the activities affect the performance of the surface 
     transportation systems of the United States; and
       ``(D) ensure, to the maximum extent practicable, that 
     planning and reporting activities carried out under this 
     section are coordinated with all other surface transportation 
     planning and reporting requirements.
       ``(2) Surface transportation research technology advisory 
     committee.--
       ``(A) Establishment.--Not later than 90 days after the date 
     of enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004, the Secretary 
     shall establish a committee to be known as the `Surface 
     Transportation Research Technology Advisory Committee' 
     (referred to in this section as the `Committee').
       ``(B) Membership.--The Committee shall be composed of 12 
     members appointed by the Secretary--
       ``(i) each of which shall have expertise in a particular 
     area relating to Federal surface transportation programs, 
     including--

       ``(I) safety;
       ``(II) operations;
       ``(III) infrastructure (including pavements and 
     structures);
       ``(IV) planning and environment;
       ``(V) policy; and
       ``(VI) asset management; and

       ``(ii) of which--

       ``(I) 3 members shall be individuals representing the 
     Federal Government;
       ``(II) 3 members--

       ``(aa) shall be exceptionally qualified to serve on the 
     Committee, as determined by the Secretary, based on 
     education, training, and experience; and
       ``(bb) shall not be officers or employees of the United 
     States;

       ``(III) 3 members--

       ``(aa) shall represent the transportation industry 
     (including the pavement industry); and
       ``(bb) shall not be officers or employees of the United 
     States; and

       ``(IV) 3 members shall represent State transportation 
     departments from 3 different geographical regions of the 
     United States.

       ``(C) Meetings.--The advisory subcommittees shall meet on a 
     regular basis, but not less than twice each year.
       ``(D) Duties.--The Committee shall provide to the 
     Secretary, on a continuous basis, advice and guidance 
     relating to--
       ``(i) the determination of surface transportation research 
     priorities;
       ``(ii) the improvement of the research planning and 
     implementation process;
       ``(iii) the design and selection of research projects;
       ``(iv) the review of research results;
       ``(v) the planning and implementation of technology 
     transfer activities and
       ``(vi) the formulation of the surface transportation 
     research and technology deployment and deployment strategic 
     plan required under subsection (c).
       ``(E) Authorization of appropriations.--There is authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out this paragraph 
     $200,000 for each fiscal year.
       ``(b) Implementation.--The Secretary shall--
       ``(1) provide for the integrated planning, coordination, 
     and consultation among the operating administrations of the 
     Department of Transportation, all other Federal agencies with 
     responsibility for surface transportation research and 
     technology development, State and local governments, 
     institutions of higher education, industry, and other private 
     and public sector organizations engaged in surface 
     transportation-related research and development activities; 
     and
       ``(2) ensure that the surface transportation research and 
     technology development programs of the Department do not 
     duplicate other Federal, State, or private sector research 
     and development programs.
       ``(c) Surface Transportation Research and Technology 
     Deployment Strategic Plan.--
       ``(1) In general.--After receiving, and based on, extensive 
     consultation and input from stakeholders representing the 
     transportation community and the Surface Transportation 
     Research Advisory Committee, the Secretary shall, not later 
     than 1 year after the date of enactment of the Safe, 
     Accountable, Flexible, and Efficient Transportation Equity 
     Act of 2004, complete, and shall periodically update 
     thereafter, a strategic plan for each of the core surface 
     transportation research areas, including--
       ``(A) safety;
       ``(B) operations;
       ``(C) infrastructure (including pavements and structures);
       ``(D) planning and environment;
       ``(E) policy; and
       ``(F) asset management.
       ``(2) Components.--The strategic plan shall specify--
       ``(A) surface transportation research objectives and 
     priorities;
       ``(B) specific surface transportation research projects to 
     be conducted;
       ``(C) recommended technology transfer activities to promote 
     the deployment of advances resulting from the surface 
     transportation research conducted; and
       ``(D) short- and long-term technology development and 
     deployment activities.
       ``(3) Review and submission of findings.--The Secretary 
     shall enter into a contract with the Transportation Research 
     Board of the National Academy of Sciences, on behalf of the 
     Research and Technology Coordinating Committee of the 
     National Research Council, under which--
       ``(A) the Transportation Research Board shall--
       ``(i) review the research and technology planning and 
     implementation process used by Federal Highway 
     Administration; and
       ``(ii) evaluate each of the strategic plans prepared under 
     this subsection--

       ``(I) to ensure that sufficient stakeholder input is being 
     solicited and considered throughout the preparation process; 
     and
       ``(II) to offer recommendations relevant to research 
     priorities, project selection, and deployment strategies; and

       ``(B) the Secretary shall ensure that the Research and 
     Technology Coordinating Committee, in a timely manner, 
     informs the Committee on Environment and Public Works of the 
     Senate and the Committee on Transportation and Infrastructure 
     of the House of Representatives of the findings of the review 
     and evaluation under subparagraph (A).
       ``(4) Responses of secretary.--Not later than 60 days after 
     the date of completion of the strategic plan under this 
     subsection, the Secretary shall submit to the Committee on 
     Environment and Public Works of the Senate and the Committee 
     on Transportation and Infrastructure of the House of 
     Representatives written responses to each of the 
     recommendations of the Research and Technology Coordinating 
     Committee under paragraph (3)(A)(ii)(II).
       ``(d) Consistency With Government Performance and Results 
     Act of 1993.--The plans and reports developed under this 
     section shall be consistent with and incorporated as part of 
     the plans developed under section 306 of title 5 and sections 
     1115 and 1116 of title 31.

     ``Sec. 509. New strategic highway research program

       ``(a) In General.--The National Research Council shall 
     establish and carry out, through fiscal year 2009, a new 
     strategic highway research program.
       ``(b) Basis; Priorities.--With respect to the program 
     established under subsection (a)--
       ``(1) the program shall be based on--
       ``(A) National Research Council Special Report No. 260, 
     entitled `Strategic Highway Research'; and
       ``(B) the results of the detailed planning work 
     subsequently carried out to scope the research areas through 
     National Cooperative Research Program Project 20-58.
       ``(2) the scope and research priorities of the program 
     shall--
       ``(A) be refined through stakeholder input in the form of 
     workshops, symposia, and panels; and
       ``(B) include an examination of--
       ``(i) the roles of highway infrastructure, drivers, and 
     vehicles in fatalities on public roads;
       ``(ii) high-risk areas and activities associated with the 
     greatest numbers of highway fatalities;
       ``(iii) the roles of various levels of government agencies 
     and non-governmental organizations in reducing highway 
     fatalities (including recommendations for methods of 
     strengthening highway safety partnerships);
       ``(iv) measures that may save the greatest number of lives 
     in the short- and long-term;
       ``(v) renewal of aging infrastructure with minimum impact 
     on users of facilities;
       ``(vi) driving behavior and likely crash causal factors to 
     support improved countermeasures;
       ``(vii) reduction in congestion due to nonrecurring 
     congestion;
       ``(viii) planning and designing of new road capacity to 
     meet mobility, economic, environmental, and community needs;
       ``(3) the program shall consider, at a minimum, the results 
     of studies relating to the implementation of the Strategic 
     Highway Safety Plan prepared by the American Association of 
     State Highway and Transportation Officials; and
       ``(4) the research results of the program, expressed in 
     terms of technologies, methodologies, and other appropriate 
     categorizations, shall be disseminated to practicing 
     engineers as soon as practicable for their use.

[[Page 10877]]

       ``(c) Program Administration.--In carrying out the program 
     under this section, the National Research Council shall 
     ensure, to the maximum extent practicable, that--
       ``(1) the best projects and researchers are selected to 
     conduct research for the program and priorities described in 
     subsection (b)--
       ``(A) on the basis of the merit of each submitted proposal; 
     and
       ``(B) through the use of open solicitations and selection 
     by a panel of appropriate experts;
       ``(2) the National Research Council acquires a qualified, 
     permanent core staff with the ability and expertise to manage 
     a large research program and multiyear budget;
       ``(3) the stakeholders are involved in the governance of 
     the program, at the executive, overall program, and technical 
     levels, through the use of expert panels and committees; and
       ``(4) there is no duplication of research effort between 
     the program established under this section and the surface 
     transportation-environment cooperative research program 
     established under section 507 or any other research effort of 
     the Department.
       ``(d) National Academy of Sciences.--The Secretary may make 
     grants to, and enter into cooperative agreements with, the 
     National Academy of Sciences to carry out such activities 
     relating to research, technology, and technology transfer 
     described in subsections (b) and (c) as the Secretary 
     determines to be appropriate.
       ``(e) Report on Implementation of Results.--
       ``(1) In general.--Not later than October 1, 2007, the 
     Secretary shall enter into a contract with the Transportation 
     Research Board of the National Academy of Sciences under 
     which the Transportation Research Board shall complete a 
     report on the strategies and administrative structure to be 
     used for implementation of the results of new strategic 
     highway research program.
       ``(2) Components.--The report under paragraph (1) shall 
     include, with respect to the new strategic highway research 
     program--
       ``(A) an identification of the most promising results of 
     research under the program (including the persons most likely 
     to use the results);
       ``(B) a discussion of potential incentives for, impediments 
     to, and methods of, implementing those results;
       ``(C) an estimate of costs that would be incurred in 
     expediting implementation of those results; and
       ``(D) recommendations for the way in which implementation 
     of the results of the program under this section should be 
     conducted, coordinated, and supported in future years, 
     including a discussion of the administrative structure and 
     organization best suited to carry out those responsibilities.
       ``(3) Consultation.--In developing the report, the 
     Transportation Research Board shall consult with a wide 
     variety of stakeholders, including--
       ``(A) the American Association of State highway Officials;
       ``(B) the Federal Highway Administration; and
       ``(C) the Surface Transportation Research Technology 
     Advisory Committee.
       ``(4) Submission.--Not later than February 1, 2009, the 
     Secretary shall submit to the Committee on Environment and 
     Public Works of the Senate and the Committee on 
     Transportation and Infrastructure of the House of 
     Representatives the report under this subsection.

     ``Sec. 510. University transportation centers

       ``(a) Centers.--
       ``(1) In general.--During fiscal year 2004, the Secretary 
     shall provide grants to 40 nonprofit institutions of higher 
     learning (or consortia of institutions of higher learning) to 
     establish centers to address transportation design, 
     management, research, development, and technology matters, 
     especially the education and training of greater numbers of 
     individuals to enter into the professional field of 
     transportation.
       ``(2) Distribution of centers.--Not more than 1 university 
     transportation center (or lead university in a consortia of 
     institutions of higher learning), other than a center or 
     university selected through a competitive process, may be 
     located in any State.
       ``(3) Identification of centers.--The university 
     transportation centers established under this section shall--
       ``(A) comply with applicable requirements under subsection 
     (c); and
       ``(B) be located at the institutions of higher learning 
     specified in paragraph (4).
       ``(4) Identification of groups.--For the purpose of making 
     grants under this subsection, the following grants are 
     identified:
       ``(A) Group a.--Group A shall consist of the 10 regional 
     centers selected under subsection (b).
       ``(B) Group b.--Group B shall consist of the following:
       ``(i) [_________].
       ``(ii) [_________].
       ``(iii) [_________].
       ``(iv) [_________].
       ``(v) [_________].
       ``(vi) [_________].
       ``(vii) [_________].
       ``(viii) [_________]
       ``(ix) [_________].
       ``(x) [_________].
       ``(xi) [_________].
       ``(C) Group c.--Group C shall consist of the following:
       ``(i) [_________].
       ``(ii) [_________].
       ``(iii) [_________].
       ``(iv) [_________].
       ``(v) [_________].
       ``(vi) [_________].
       ``(vii) [_________].
       ``(viii) [_________].
       ``(ix) [_________].
       ``(x) [_________].
       ``(xi) [_________].
       ``(D) Group d.--Group D shall consist of the following:
       ``(i) [_________].
       ``(ii) [_________].
       ``(iii) [_________].
       ``(iv) [_________].
       ``(v) [_________].
       ``(vi) [_________].
       ``(vii) [_________].
       ``(viii) [_________].
       ``(b) Regional Centers.--
       ``(1) In general.--Not later than September 30, 2004, the 
     Secretary shall provide to nonprofit institutions of higher 
     learning (or consortia of institutions of higher learning) 
     grants to be used during the period of fiscal years 2005 
     through 2009 to establish and operate 1 university 
     transportation center in each of the 10 Federal regions that 
     comprise the Standard Federal Regional Boundary System.
       ``(2) Selection of regional centers.--
       ``(A) Proposals.--In order to be eligible to receive a 
     grant under this subsection, an institution described in 
     paragraph (1) shall submit to the Secretary a proposal, in 
     response to any request for proposals that shall be made by 
     the Secretary, that is in such form and contains such 
     information as the Secretary shall prescribe.
       ``(B) Request schedule.--The Secretary shall request 
     proposals once for the period of fiscal years 2004 through 
     2006 and once for the period of fiscal years 2007 through 
     2009.
       ``(C) Eligibility.--Any institution of higher learning (or 
     consortium of institutions of higher learning) that meets the 
     criteria described in subsection (c) (including any 
     institution identified in subsection (a)(4)) may apply for a 
     grant under this subsection.
       ``(D) Selection criteria.--The Secretary shall select each 
     recipient of a grant under this subsection through a 
     competitive process on the basis of--
       ``(i) the location of the center within the Federal region 
     to be served;
       ``(ii) the demonstrated research capabilities and extension 
     resources available to the recipient to carry out this 
     section;
       ``(iii) the capability of the recipient to provide 
     leadership in making national and regional contributions to 
     the solution of immediate and long-range transportation 
     problems;
       ``(iv) the demonstrated ability of the recipient to 
     disseminate results of transportation research and education 
     programs through a statewide or regionwide continuing 
     education program; and
       ``(v) the strategic plan that the recipient proposes to 
     carry out using funds from the grant.
       ``(E) Selection process.--In selecting the recipients of 
     grants under this subsection, the Secretary shall consult 
     with, and consider the advice of--
       ``(i) the Research and Special Programs Administration;
       ``(ii) the Federal Highway Administration; and
       ``(iii) the Federal Transit Administration.
       ``(c) Center Requirements.--
       ``(1) In general.--With respect to a university 
     transportation center established under subsection (a) or 
     (b), the institution or consortium that receives a grant to 
     establish the center--
       ``(A) shall annually contribute at least $250,000 to the 
     operation and maintenance of the center, except that payment 
     by the institution or consortium of the salary required for 
     transportation-related faculty and staff for a period greater 
     than 90 days may not be counted against that contribution;
       ``(B) shall have established, as of the date of receipt of 
     the grant, undergraduate or graduate programs in--
       ``(i) civil engineering;
       ``(ii) transportation engineering;
       ``(iii) transportation systems management and operations; 
     or
       ``(iv) any other field significantly related to surface 
     transportation systems, as determined by the Secretary; and
       ``(C) not later than 120 days after the date on which the 
     institution or consortium receives notice of selection as a 
     site for the establishment of a university transportation 
     center under this section, shall submit to the Secretary a 6-
     year program plan for the university transportation center 
     that includes, with respect to the center--
       ``(i) a description of the purposes of programs to be 
     conducted by the center;
       ``(ii) a description of the undergraduate and graduate 
     transportation education efforts to be carried out by the 
     center;
       ``(iii) a description of the nature and scope of research 
     to be conducted by the center;
       ``(iv) a list of personnel, including the roles and 
     responsibilities of those personnel within the center; and
       ``(v) a detailed budget, including the amount of 
     contributions by the institution or consortium to the center; 
     and
       ``(D) shall establish an advisory committee that--
       ``(i) is composed of a representative from each of the 
     State transportation department of the State in which the 
     institution or consortium is located, the Department of 
     Transportation, and the institution or consortia, as 
     appointed by those respective entities;
       ``(ii) in accordance with paragraph (2), shall review and 
     approve or disapprove the plan of

[[Page 10878]]

     the institution or consortium under subparagraph (C); and
       ``(iii) shall, to the maximum extent practicable, ensure 
     that the proposed research to be carried out by the 
     university transportation center will contribute to the 
     national highway research and technology agenda, as 
     periodically updated by the Secretary, in consultation with 
     stakeholders representing the highway community.
       ``(2) Peer review.--
       ``(A) In general.--The Secretary shall require peer review 
     for each report on research carried out using funds made 
     available for this section.
       ``(B) Purposes of peer review.--Peer review of a report 
     under this section shall be carried out to evaluate--
       ``(i) the relevance of the research described in the report 
     with respect to the strategic plan under, and the goals of, 
     this section;
       ``(ii) the research covered by the report, and to recommend 
     modifications to individual project plans;
       ``(iii) the results of the research before publication of 
     those results; and
       ``(iv) the overall outcomes of the research.
       ``(C) Internet availability.--Each report under this 
     section that is received by the Secretary shall be 
     published--
       ``(i) by the Secretary, on the Internet website of the 
     Department of Transportation; and
       ``(ii) by the University Transportation Center.
       ``(3) Approval of plans--A plan of an institution or 
     consortium described in paragraph (1)(C) shall not be 
     submitted to the Secretary until such time as the advisory 
     committee established under paragraph (1)(D) reviews and 
     approves the plan.
       ``(4) Failure to comply.--If a recipient of a grant under 
     this subsection fails to submit a program plan acceptable to 
     the Secretary and in accordance with paragraph (1)(C)--
       ``(A) the recipient shall forfeit the grant and the 
     selection of the recipient as a site for the establishment of 
     a university transportation center; and
       ``(B) the Secretary shall select a replacement recipient 
     for the forfeited grant.
       ``(5) Applicability.--This subsection does not apply to any 
     research funds received in accordance with a competitive 
     contract offered and entered into by the Federal Highway 
     Administration.
       ``(d) Objectives.--Each university transportation center 
     established under subsection (a) or (b) shall carry out--
       ``(1) undergraduate or graduate education programs that 
     include--
       ``(A) multidisciplinary coursework; and
       ``(B) opportunities for students to participate in 
     research;
       ``(2) basic and applied research, the results and products 
     of which shall be judged by peers or other experts in the 
     field so as to advance the body of knowledge in 
     transportation; and
       ``(3) an ongoing program of technology transfer that makes 
     research results available to potential users in such form as 
     will enable the results to be implemented, used, or otherwise 
     applied.
       ``(e) Maintenance of Effort.--To be eligible to receive a 
     grant under this section, an applicant shall--
       ``(1) enter into an agreement with the Secretary to ensure 
     that the applicant will maintain total expenditures from all 
     other sources to establish and operate a university 
     transportation center and related educational and research 
     activities at a level that is at least equal to the average 
     level of those expenditures during the 2 fiscal years before 
     the date on which the grant is provided;
       ``(2) provide the annual institutional contribution 
     required under subsection (c)(1); and
       ``(3) submit to the Secretary, in a timely manner, for use 
     by the Secretary in the preparation of the annual research 
     report under section 508(c)(5) of title 23, an annual report 
     on the projects and activities of the university 
     transportation center for which funds are made available 
     under section 2001 of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004 that contains, at 
     a minimum, for the fiscal year covered by the report, a 
     description of--
       ``(A) the goals of the center;
       ``(B) the educational activities carried out by the center 
     (including a detailed summary of the budget for those 
     educational activities);
       ``(C) teaching activities of faculty at the center;
       ``(D) each research project carried out by the center, 
     including--
       ``(i) the identity and location of each investigator 
     working on a research project;
       ``(ii) the overall funding amount for each research project 
     (including the amounts expended for the project as of the 
     date of the report);
       ``(iii) the current schedule for each research project; and
       ``(iv) the results of each research project through the 
     date of submission of the report, with particular emphasis on 
     results for the fiscal year covered by the report; and
       ``(E) overall technology transfer and implementation 
     efforts of the center.
       ``(f) Program Coordination.--The Secretary shall--
       ``(1) coordinate the research, education, training, and 
     technology transfer activities carried out by recipients of 
     grants under this section; and
       ``(2) establish and operate a clearinghouse for, and 
     disseminate, the results of those activities.
       ``(g) Funding.--
       ``(1) Number and amount of grants.--The Secretary shall 
     make the following grants under this subsection:
       ``(A) Group a.--For each of fiscal years 2004 through 2009, 
     the Secretary shall make a grant in the amount of $20,000,000 
     to each of the institutions in group A (as described in 
     subsection (a)(4)(A)).
       ``(B) Group b.--The Secretary shall make a grant to each of 
     the institutions in group B (as described in subsection 
     (a)(4)(B)) in the amount of--
       ``(i) $4,000,000 for each of fiscal years 2004 and 2005; 
     and
       ``(ii) $6,000,000 for each of fiscal years 2006 and 2007.
       ``(C) Group c.--For each of fiscal years 2004 through 2007, 
     the Secretary shall make a grant in the amount of $10,000,000 
     to each of the institutions in group C (as described in 
     subsection (a)(4)(C)).
       ``(D) Group d.--For each of fiscal years 2004 through 2009, 
     the Secretary shall make a grant in the amount of $25,000,000 
     to each of the institutions in group D (as described in 
     subsection (a)(4)(D)).
       ``(E) Limited grants for groups b and c.--For each of 
     fiscal years 2008 and 2009, of the institutions classified in 
     groups B and C (as described in subsection (a)(4)(B)), the 
     Secretary shall select and make a grant in the amount of 
     $10,000,000 to each of not more than 15 institutions.
       ``(2) Use of funds--
       ``(A) In general.--Of the funds made available for a fiscal 
     year to a university transportation center established under 
     subsection (a) or (b)--
       ``(i) not less than $250,000 shall be used to establish and 
     maintain new faculty positions for the teaching of 
     undergraduate, transportation-related courses;
       ``(ii) not more than $500,000 for the fiscal year, or 
     $1,000,000 in the aggregate, may be used to construct or 
     improve transportation-related laboratory facilities; and
       ``(iii) not more than $300,000 for the fiscal year may be 
     used for student internships of not more than 180 days in 
     duration to enable students to gain experience by working on 
     transportation projects as interns with design or 
     construction firms.
       ``(B) Facilities and administration fee.--Not more than 10 
     percent of any grant made available to a university 
     transportation center (or any institution or consortium that 
     establishes such a center) for a fiscal year may be used to 
     pay to the appropriate nonprofit institution of higher 
     learning any administration and facilities fee (or any 
     similar overhead fee) for the fiscal year.
       ``(3) Limitation on availability of funds.--Funds made 
     available under this subsection shall remain available for 
     obligation for a period of 2 years after September 30 of the 
     fiscal year for which the funds are authorized.

     ``Sec. 511. Multistate corridor operations and management

       ``(a) In General.--The Secretary shall encourage multistate 
     cooperative agreements, coalitions, or other arrangements to 
     promote regional cooperation, planning, and shared project 
     implementation for programs and projects to improve 
     transportation system management and operations.
       ``(b) Interstate Route I-95 Corridor Coalition 
     Transportation Systems Management and Operations.--
       ``(1) In general.--The Secretary shall make grants under 
     this subsection to States to continue intelligent 
     transportation system management and operations in the 
     Interstate Route I- 95 corridor coalition region initiated 
     under the Intermodal Surface Transportation Efficiency Act of 
     1991 (Public Law 102-240).
       ``(2) Funding.--Of the amounts made available under section 
     2001(a)(4) of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004, the Secretary shall use to 
     carry out this subsection--
       ``(A) $8,000,000 for fiscal year 2004;
       ``(B) $10,000,000 for fiscal year 2005;
       ``(C) $12,000,000 for fiscal year 2006;
       ``(D) $12,000,000 for fiscal year 2007;
       ``(E) $12,000,000 for fiscal year 2008; and
       ``(F) $12,000,000 for fiscal year 2009.

     ``Sec. 512. Transportation analysis simulation system

       ``(a) Continuation of Transims Development.--
       ``(1) In general.--The Secretary shall continue the 
     deployment of the advanced transportation model known as the 
     `Transportation Analysis Simulation System' (referred to in 
     this section as `TRANSIMS') developed by the Los Alamos 
     National Laboratory.
       ``(2) Requirements and considerations.--In carrying out 
     paragraph (1), the Secretary shall--
       ``(A) further improve TRANSIMS to reduce the cost and 
     complexity of using the TRANSIMS;
       ``(B) continue development of TRANSIMS for applications to 
     facilitate transportation planning, regulatory compliance, 
     and response to natural disasters and other transportation 
     disruptions; and
       ``(C) assist State transportation departments and 
     metropolitan planning organizations, especially smaller 
     metropolitan planning organizations, in the implementation of 
     TRANSIMS by providing training and technical assistance.
       ``(b) Eligible Activities.--The Secretary shall use funds 
     made available to carry out this section--
       ``(1) to further develop TRANSIMS for additional 
     applications, including--

[[Page 10879]]

       ``(A) congestion analyses;
       ``(B) major investment studies;
       ``(C) economic impact analyses;
       ``(D) alternative analyses;
       ``(E) freight movement studies;
       ``(F) emergency evacuation studies;
       ``(G) port studies; and
       ``(H) airport access studies;
       ``(2) provide training and technical assistance with 
     respect to the implementation and application of TRANSIMS to 
     States, local governments, and metropolitan planning 
     organizations with responsibility for travel modeling;
       ``(3) develop methods to simulate the national 
     transportation infrastructure as a single, integrated system 
     for the movement of individuals and goods;
       ``(4) provide funding to State transportation departments 
     and metropolitan planning organizations for implementation of 
     TRANSIMS.
       ``(c) Allocation of Funds.--Of the funds made available to 
     carry out this section for each fiscal year, not less than 15 
     percent shall be allocated for activities described in 
     subsection (b)(3).
       ``(d) Funding.--Of the amounts made available under section 
     2001(a) of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004 for each of fiscal years 
     2004 through 2009, the Secretary shall use $1,000,000 to 
     carry out this section.
       ``(e) Availability of Funds.--Funds made available under 
     this section shall be available to the Secretary through the 
     Transportation Planning, Research, and Development Account of 
     the Office of the Secretary.''.
       (b) Other University Funding.--No university (other than 
     university transportation centers specified in section 510 of 
     title 23, United States Code (as added by subsection (a)) 
     shall receive funds made available under section 2001 to 
     carry out research unless the university is selected to 
     receive the funds--
       (1) through a competitive process that incorporates merit-
     based peer review; and
       (2) based on a proposal submitted to the Secretary by the 
     university in response to a request for proposals issued by 
     the Secretary.
       (c) Conforming Amendment.--Section 5505 of title 49, United 
     States Code, is repealed.

     SEC. 2102. STUDY OF DATA COLLECTION AND STATISTICAL ANALYSIS 
                   EFFORTS.

       (a) Definitions.--In this section:
       (1) Administration.--The term ``Administration'' means the 
     Federal Highway Administration.
       (2) Board.--The term ``Board'' means the Transportation 
     Research Board of the National Academy of Sciences.
       (3) Bureau.--The term ``Bureau'' means the Bureau of 
     Transportation Statistics.
       (4) Department.--The term ``Department'' means the 
     Department of Transportation.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Transportation.
       (b) Priority Areas of Effort.--
       (1) Statistical standards.--The Secretary shall direct the 
     Bureau to assume the role of the lead agency in working with 
     other agencies of the Department to establish, by not later 
     the date that is 1 year after the date of enactment of this 
     Act, statistical standards for the Department.
       (2) Statistical analysis effort.--
       (A) In general.--The Bureau shall provide to the Secretary, 
     on an annual basis, an overview of the level of effort 
     expended on statistical analyses by each agency within the 
     Department.
       (B) Duty of agencies.--Each agency of the Department shall 
     provide to the Bureau such information as the Bureau may 
     require in carrying out subparagraph (A).
       (3) National security.--The Bureau shall--
       (A) conduct a study of the ways in which transportation 
     statistics are and may be used for the purpose of national 
     security; and
       (B) submit to the Transportation Security Administration 
     recommendations for means by which the use of transportation 
     statistics for the purpose of national security may be 
     improved.
       (4) Modernization.--The Bureau shall develop new protocols 
     for adapting data collection and delivery efforts in 
     existence as of the date of enactment of this Act to deliver 
     information in a more timely and frequent fashion.
       (c) Study.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall provide a grant 
     to, or enter into a cooperative agreement or contract with, 
     the Board for the conduct of a study of the data collection 
     and statistical analysis efforts of the Department with 
     respect to the modes of surface transportation for which 
     funds are made available under this Act.
       (2) Purpose.--The purpose of the study shall be to provide 
     to the Department information for use by agencies of the 
     Department in providing to surface transportation agencies 
     and individuals engaged in the surface transportation field 
     higher quality, and more relevant and timely, data, 
     statistical analyses, and products.
       (3) Content.--The study shall include--
       (A) an examination and analysis of the efforts, analyses, 
     and products (with respect to usefulness and policy 
     relevance) of the Bureau as of the date of the study, as 
     compared with the duties of the Bureau specified in 
     subsections (c) through (f) of section 111 of title 49, 
     United States Code;
       (B) an examination and analysis of data collected by, 
     methods of data collection of, and analyses performed by, 
     agencies within the Department; and
       (C) recommendations relating to--
       (i) the future efforts of the Department in the area of 
     surface transportation with respect to--

       (I) types of data collected;
       (II) methods of data collection;
       (III) types of analyses performed; and
       (IV) products made available by the Secretary to the 
     transportation community and Congress;

       (ii) the means by which the Department may cooperate with 
     State transportation departments to provide technical 
     assistance in the use of data collected by traffic operations 
     centers; and
       (iii) duplication of efforts within the Department, 
     including ways in which--

       (I) the duplication may be reduced or eliminated; and
       (II) each agency of the Department may cooperate with, and 
     complement the efforts of, the others.

       (4) Consultation.--In conducting the study, the Board shall 
     consult with such stakeholders, agencies, and other entities 
     as the Board considers to be appropriate.
       (5) Report.--Not later than 1 year after the date on which 
     a grant is provided, or a cooperative agreement or contract 
     is entered into, for a study under paragraph (1)--
       (A) the Board shall submit to the Secretary, the Committee 
     on Environment and Public Works of the Senate, and the 
     Committee on Transportation and Infrastructure of the House 
     of Representatives a final report on the results of the 
     study; and
       (B) the results of the study shall be published--
       (i) by the Secretary, on the Internet website of the 
     Department; and
       (ii) by the Board, on the Internet website of the Board.
       (6) Implementation of results.--The Bureau shall, to the 
     maximum extent practicable, implement any recommendations 
     made with respect to the results of the study under this 
     subsection.
       (7) Compliance.--
       (A) In general.--The Comptroller General of the United 
     States shall conduct a review of the study under this 
     subsection.
       (B) Noncompliance.--If the Comptroller General of the 
     United States determines that the Bureau failed to conduct 
     the study under this subsection, the Bureau shall be 
     ineligible to receive funds from the Highway Trust Fund until 
     such time as the Bureau conducts the study under this 
     subsection.
       (d) Conforming Amendments.--
       (1) Section 111 of title 49, United States Code, is 
     amended--
       (A) by redesignating subsection (k) as subsection (m);
       (B) by inserting after subsection (j) the following:
       ``(k) Annual Report.--
       ``(1) In general.--For fiscal year 2005 and each fiscal 
     year thereafter, the Bureau shall prepare and submit to the 
     Secretary an annual report that--
       ``(A) describes progress made in responding to study 
     recommendations for the fiscal year; and
       ``(B) summarizes the activities and expenditure of funds by 
     the Bureau for the fiscal year.
       ``(2) Availability.--The Bureau shall--
       ``(A) make the report described in paragraph (1) available 
     to the public; and
       ``(B) publish the report on the Internet website of the 
     Bureau.
       ``(3) Combination of reports.--The report required under 
     paragraph (1) may be included in or combined with the 
     Transportation Statistics Annual Report required by 
     subsection (j).
       ``(l) Expenditure of Funds.--Funds from the Highway Trust 
     Fund (other than the Mass Transit Account) that are 
     authorized to be appropriated, and made available, in 
     accordance with section 2001(a)(3) of the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004 
     shall be used only for the collection and statistical 
     analysis of information relating to surface transportation 
     systems.''; and
       (C) in subsection (m) (as redesignated by subparagraph 
     (A)), by inserting ``surface transportation'' after ``sale 
     of''.
       (2) The analysis for chapter 55 of title 49, United States 
     Code, is amended by striking the item relating to section 
     5505 and inserting the following:

``5505. University transportation centers.''.

     SEC. 2103. CENTERS FOR SURFACE TRANSPORTATION EXCELLENCE.

       (a) Establishment.--The Secretary shall establish the 
     centers for surface transportation excellence described in 
     subsection (b) to promote high-quality outcomes in support of 
     strategic national programs and activities, including--
       (1) the environment;
       (2) operations;
       (3) surface transportation safety;
       (4) project finance; and
       (5) asset management.
       (b) Centers.--The centers for surface transportation 
     excellence referred to in subsection (a) are--
       (1) a Center for Environmental Excellence to provide 
     technical assistance, information sharing of best practices, 
     and training in the use of tools and decision-making 
     processes to assist States in planning and delivering 
     environmentally-sound surface transportation projects;
       (2) a Center for Operations Excellence to provide support 
     for an integrated and coordinated national program for 
     implementing operations in planning and management (including 
     standards development) for the transportation system in the 
     United States;
       (3) a Center for Excellence in Surface Transportation 
     Safety to implement a program of support for State 
     transportation departments, including--

[[Page 10880]]

       (A) the maintenance of an Internet site to provide critical 
     information on safety programs;
       (B) the provision of technical assistance to support a lead 
     State transportation department for each of the safety 
     emphasis areas (as identified by the Secretary); and
       (C) the provision of training and education to enhance 
     knowledge of personnel of State transportation departments in 
     support of safety highway goals;
       (4) a Center for Excellence in Project Finance--
       (A) to provide support to State transportation departments 
     in the development of finance plans and project oversight 
     tools; and
       (B) to develop and offer training in state-of-the-art 
     financing methods to advance projects and leverage funds; and
       (5) a Center for Excellence in Asset Management to develop 
     and conduct research, provide training and education, and 
     disseminate information on the benefits and tools for asset 
     management.
       (c) Program Administration.--
       (1) In general.--Before funds authorized under this section 
     for fiscal years 2005 through 2009 are obligated, the 
     Secretary shall review and approve a multiyear strategic plan 
     to be submitted by each of the centers.
       (2) Timing.--The plan shall be submitted before the 
     beginning of fiscal year 2005 and, subsequently, shall be 
     annually updated.
       (3) Content.--The plan shall include--
       (A) a list of research and technical assistance projects 
     and objectives; and
       (B) a description of any other technology transfer 
     activities, including a summary of training efforts.
       (4) Cooperation and competition.--
       (A) In general.--The Secretary shall carry out this section 
     by making grants to, or entering into contracts, cooperative 
     agreements, and other transactions with--
       (i) the National Academy of Sciences;
       (ii) the American Association of State Highway and 
     Transportation Officials;
       (iii) planning organizations;
       (iv) a Federal laboratory;
       (v) a State agency;
       (vi) an authority, association, institution, or 
     organization; or
       (vii) a for-profit or nonprofit corporation.
       (B) Competition; review.--All parties entering into 
     contracts, cooperative agreements, or other transactions with 
     the Secretary, or receiving grants, to perform research or 
     provide technical assistance under this section shall be 
     selected, to the maximum extent practicable--
       (i) on a competitive basis; and
       (ii) on the basis of the results of peer review of 
     proposals submitted to the Secretary.
       (5) Nonduplication.--The Secretary shall ensure that 
     activities conducted by each of the centers do not duplicate, 
     and to the maximum extent practicable, are integrated and 
     coordinated with similar activities conducted by the Federal 
     Highway Administration, the local technical assistance 
     program, university transportation centers, and other 
     research efforts supported with funds authorized by this 
     title.
       (d) Allocations.--
       (1) In general.--For each of fiscal years 2004 through 
     2009, of the funds made available under section 
     2001(a)(1)(A), the Secretary shall set aside $10,000,000 to 
     carry out this section.
       (2) Allocation of funds.--Of the funds made available under 
     paragraph (1)--
       (A) 20 percent shall be allocated to the Center for 
     Environmental Excellence established under subsection (b)(1);
       (B) 30 percent shall be allocated to the Center for 
     Operations Excellence established under subsection (b)(2);
       (C) 20 percent shall be allocated to the Center for 
     Excellence in Surface Transportation Safety established under 
     subsection (b)(3);
       (D) 10 percent shall be allocated to the Center for 
     Excellence in Project Finance established under subsection 
     (b)(4); and
       (E) 20 percent shall be allocated to the Center for 
     Excellence in Asset Management established under subsection 
     (b)(5).
       (3) Applicability of title 23.--Funds made available under 
     this section shall be available for obligation in the same 
     manner as if the funds were apportioned under chapter 1 of 
     title 23, United States Code, except that the Federal share 
     shall be 100 percent.

     SEC. 2104. MOTORCYCLE CRASH CAUSATION STUDY GRANTS.

       (a) Grants.--The Secretary shall provide grants for the 
     purpose of conducting a comprehensive, in-depth motorcycle 
     crash causation study that employs the common international 
     methodology for in-depth motorcycle accident investigation of 
     the Organization for Economic Cooperation and Development.
       (b) Funding.--Of the amounts made available under section 
     2001(a)(3), $1,500,000 for each of fiscal years 2004 and 2005 
     shall be available to carry out this section.

     SEC. 2105. TRANSPORTATION TECHNOLOGY INNOVATION AND 
                   DEMONSTRATION PROGRAM.

       (a) In General.--Section 5117(b)(3) of the Transportation 
     Equity Act for the 21st Century (112 Stat. 449; 112 Stat. 
     864; 115 Stat. 2330) is amended--
       (1) in subparagraph (B)--
       (A) in clause (i)--
       (i) in the first sentence--

       (I) by striking ``Build an'' and inserting ``Build or 
     integrate an''; and
       (II) by striking ``$2,000,000'' and inserting 
     ``$2,500,000''; and

       (ii) in the second sentence--

       (I) by striking ``300,000 and that'' and inserting 
     ``300,000,''; and
       (II) by inserting before the period at the end the 
     following: ``, and includes major transportation corridors 
     serving that metropolitan area'';

       (B) in clause (ii), by striking all that follows ``will 
     be'' and inserting ``reinvested in the intelligent 
     transportation infrastructure system.'';
       (C) by striking clause (iii); and
       (D) by redesignating clauses (iv) and (v) as clauses (iii) 
     and (iv), respectively;
       (2) in subparagraph (C)(ii), by striking ``July 1, 2002'' 
     and inserting ``the date that is 180 days after the date of 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2003'';
       (3) in subparagraph (E), by striking clause (ii) and 
     inserting the following:
       ``(ii) The term ``follow-on deployment areas'' means the 
     metropolitan areas of Albany, Atlanta, Austin, Baltimore, 
     Birmingham, Boston, Burlington Vermont, Charlotte, Chicago, 
     Cleveland, Columbus, Dallas/Ft. Worth, Denver, Detroit, 
     Greensboro, Hartford, Houston, Indianapolis, Jacksonville, 
     Kansas City, Las Vegas, Los Angeles, Louisville, Miami, 
     Milwaukee, Minneapolis-St. Paul, Nashville, New Orleans, New 
     York/Northern New Jersey, Norfolk, Northern Kentucky/
     Cincinnati, Oklahoma City, Orlando, Philadelphia, Phoenix, 
     Pittsburgh, Portland, Providence, Raleigh, Richmond, 
     Sacramento, Salt Lake, San Diego, San Francisco, San Jose, 
     St. Louis, Seattle, Tampa, Tucson, Tulsa, and Washington, 
     District of Columbia.'';
       (4) in subparagraph (F)--
       (A) by striking ``Of the amounts'' and inserting the 
     following:
       ``(i) This act.--Of the amounts''; and
       (B) by adding at the end the following:
       ``(ii) SAFETEA.--There are authorized to be appropriated 
     out of the Highway Trust Fund (other than the Mass Transit 
     Account) $5,000,000 for each fiscal year to carry out this 
     paragraph.
       ``(iii) Availability; no reduction or setaside.--Amounts 
     made available by this subparagraph--

       ``(I) shall remain available until expended; and
       ``(II) shall not be subject to any reduction or 
     setaside.''; and

       (5) by adding at the end the following:
       ``(H) Use of rights-of-way.--
       ``(i) In general.--An intelligent transportation system 
     project described in paragraph (3) or (6) that involves 
     privately owned intelligent transportation system components 
     and is carried out using funds made available from the 
     Highway Trust Fund shall not be subject to any law (including 
     a regulation) of a State or political subdivision of a State 
     prohibiting or regulating commercial activities in the 
     rights-of-way of a highway for which Federal-aid highway 
     funds have been used for planning, design, construction, or 
     maintenance, if the Secretary determines that such use is in 
     the public interest.
       ``(ii) Effect of subparagraph.--Nothing in this 
     subparagraph affects the authority of a State or political 
     subdivision of a State to regulate highway safety.''.
       (b) Conforming Amendment.--Section 5204 of the 
     Transportation Equity Act for the 21st Century (112 Stat. 
     453) is amended by striking subsection (k) (112 Stat. 2681-
     478).

         Subtitle C--Intelligent Transportation System Research

     SEC. 2201. INTELLIGENT TRANSPORTATION SYSTEM RESEARCH AND 
                   TECHNICAL ASSISTANCE PROGRAM.

       (a) In General.--Chapter 5 of title 23, United States Code 
     (as amended by section 2101), is amended by adding at the end 
     the following:

    ``SUBCHAPTER II--INTELLIGENT TRANSPORTATION SYSTEM RESEARCH AND 
                      TECHNICAL ASSISTANCE PROGRAM

     ``Sec. 521. Finding

       ``Congress finds that continued investment in architecture 
     and standards development, research, technical assistance for 
     State and local governments, and systems integration is 
     needed to accelerate the rate at which intelligent 
     transportation systems--
       ``(1) are incorporated into the national surface 
     transportation network; and
       ``(2) as a result of that incorporation, improve 
     transportation safety and efficiency and reduce costs and 
     negative impacts on communities and the environment.

     ``Sec. 522. Goals and purposes

       ``(a) Goals.--The goals of the intelligent transportation 
     system research and technical assistance program include--
       ``(1) enhancement of surface transportation efficiency and 
     facilitation of intermodalism and international trade--
       ``(A) to meet a significant portion of future 
     transportation needs, including public access to employment, 
     goods, and services; and
       ``(B) to reduce regulatory, financial, and other 
     transaction costs to public agencies and system users;
       ``(2) the acceleration of the use of intelligent 
     transportation systems to assist in the achievement of 
     national transportation safety goals, including the 
     enhancement of safe operation of motor vehicles and 
     nonmotorized vehicles, with particular emphasis on decreasing 
     the number and severity of collisions;
       ``(3) protection and enhancement of the natural environment 
     and communities affected by surface transportation, with 
     particular emphasis on assisting State and local governments 
     in achieving national environmental goals;
       ``(4) accommodation of the needs of all users of surface 
     transportation systems, including--
       ``(A) operators of commercial vehicles, passenger vehicles, 
     and motorcycles;

[[Page 10881]]

       ``(B) users of public transportation users (with respect to 
     intelligent transportation system user services); and
       ``(C) individuals with disabilities; and
       ``(5)(A) improvement of the ability of the United States to 
     respond to emergencies and natural disasters; and
       ``(B) enhancement of national security and defense 
     mobility.
       ``(b) Purposes.--The Secretary shall carry out activities 
     under the intelligent transportation system research and 
     technical assistance program to, at a minimum--
       ``(1) assist in the development of intelligent 
     transportation system technologies;
       ``(2) ensure that Federal, State, and local transportation 
     officials have adequate knowledge of intelligent 
     transportation systems for full consideration in the 
     transportation planning process;
       ``(3) improve regional cooperation, interoperability, and 
     operations for effective intelligent transportation system 
     performance;
       ``(4) promote the innovative use of private resources;
       ``(5) assist State transportation departments in developing 
     a workforce capable of developing, operating, and maintaining 
     intelligent transportation systems;
       ``(6) maintain an updated national ITS architecture and 
     consensus-based standards while ensuring an effective Federal 
     presence in the formulation of domestic and international ITS 
     standards;
       ``(7) advance commercial vehicle operations components of 
     intelligent transportation systems--
       ``(A) to improve the safety and productivity of commercial 
     vehicles and drivers; and
       ``(B) to reduce costs associated with commercial vehicle 
     operations and Federal and State commercial vehicle 
     regulatory requirements;
       ``(8) evaluate costs and benefits of intelligent 
     transportation systems projects;
       ``(9) improve, as part of the Archived Data User Service 
     and in cooperation with the Bureau of Transportation 
     Statistics, the collection of surface transportation system 
     condition and performance data through the use of intelligent 
     transportation system technologies; and
       ``(10) ensure access to transportation information and 
     services by travelers of all ages.

     ``Sec. 523. Definitions

       ``In this subchapter:
       ``(1) Commercial vehicle information systems and 
     networks.--The term `commercial vehicle information systems 
     and networks' means the information systems and 
     communications networks that support commercial vehicle 
     operations.
       ``(2) Commercial vehicle operations.--
       ``(A) In general.--The term `commercial vehicle operations' 
     means motor carrier operations and motor vehicle regulatory 
     activities associated with the commercial movement of goods 
     (including hazardous materials) and passengers.
       ``(B) Inclusions.--The term `commercial vehicle 
     operations', with respect to the public sector, includes--
       ``(i) the issuance of operating credentials;
       ``(ii) the administration of motor vehicle and fuel taxes; 
     and
       ``(iii) roadside safety and border crossing inspection and 
     regulatory compliance operations.
       ``(3) Intelligent transportation infrastructure.--The term 
     `intelligent transportation infrastructure' means fully 
     integrated public sector intelligent transportation system 
     components, as defined by the Secretary.
       ``(4) Intelligent transportation system.--The term 
     `intelligent transportation system' means electronics, 
     communications, or information processing used singly or in 
     combination to improve the efficiency or safety of a surface 
     transportation system.
       ``(5) National its architecture.--The term `national ITS 
     architecture' means the common framework for interoperability 
     adopted by the Secretary that defines--
       ``(A) the functions associated with intelligent 
     transportation system user services;
       ``(B) the physical entities or subsystems within which the 
     functions reside;
       ``(C) the data interfaces and information flows between 
     physical subsystems; and
       ``(D) the communications requirements associated with the 
     information flows.
       ``(6) Standard.--The term `standard' means a document 
     that--
       ``(A) contains technical specifications or other precise 
     criteria for intelligent transportation systems that are to 
     be used consistently as rules, guidelines, or definitions of 
     characteristics so as to ensure that materials, products, 
     processes, and services are fit for their purposes; and
       ``(B) may--
       ``(i) support the national ITS architecture; and
       ``(ii) promote--

       ``(I) the widespread use and adoption of intelligent 
     transportation system technology as a component of the 
     surface transportation systems of the United States; and
       ``(II) interoperability among intelligent transportation 
     system technologies implemented throughout the States.

     ``Sec. 524. General authorities and requirements

       ``(a) Scope.--Subject to this subchapter, the Secretary 
     shall carry out an ongoing intelligent transportation system 
     research program--
       ``(1) to research, develop, and operationally test 
     intelligent transportation systems; and
       ``(2) to provide technical assistance in the nationwide 
     application of those systems as a component of the surface 
     transportation systems of the United States.
       ``(b) Policy.--Intelligent transportation system 
     operational tests and projects funded under this subchapter 
     shall encourage, but not displace, public-private 
     partnerships or private sector investment in those tests and 
     projects.
       ``(c) Cooperation With Governmental, Private, and 
     Educational Entities.--The Secretary shall carry out the 
     intelligent transportation system research and technical 
     assistance program in cooperation with--
       ``(1) State and local governments and other public 
     entities;
       ``(2) the private sector;
       ``(3) Federal laboratories (as defined in section 501); and
       ``(4) colleges and universities, including historically 
     black colleges and universities and other minority 
     institutions of higher education.
       ``(d) Consultation With Federal Officials.--In carrying out 
     the intelligent transportation system research program, the 
     Secretary, as appropriate, shall consult with--
       ``(1) the Secretary of Commerce;
       ``(2) the Secretary of the Treasury;
       ``(3) the Administrator of the Environmental Protection 
     Agency;
       ``(4) the Director of the National Science Foundation; and
       ``(5) the Secretary of Homeland Security.
       ``(e) Technical Assistance, Training, and Information.--The 
     Secretary may provide technical assistance, training, and 
     information to State and local governments seeking to 
     implement, operate, maintain, or evaluate intelligent 
     transportation system technologies and services.
       ``(f) Transportation Planning.--The Secretary may provide 
     funding to support adequate consideration of transportation 
     system management and operations (including intelligent 
     transportation systems) within metropolitan and statewide 
     transportation planning processes.
       ``(g) Information Clearinghouse.--The Secretary shall--
       ``(1) maintain a repository for technical and safety data 
     collected as a result of federally sponsored projects carried 
     out under this subchapter; and
       ``(2) on request, make that information (except for 
     proprietary information and data) readily available to all 
     users of the repository at an appropriate cost.
       ``(h) Advisory Committees.--
       ``(1) In general.--In carrying out this subchapter, the 
     Secretary--
       ``(A) may use 1 or more advisory committees; and
       ``(B) shall designate a public-private organization, the 
     members of which participate in on-going research, planning, 
     standards development, deployment, and marketing of ITS 
     programs, products, and services, and coordinate the 
     development and deployment of intelligent transportation 
     systems in the United States, as the Federal advisory 
     committee authorized by section 5204(h) of the Transportation 
     Equity Act for the 21st Century (112 Stat. 454).
       ``(2) Funding.--Of the amount made available to carry out 
     this subchapter, the Secretary may use $1,500,000 for each 
     fiscal year for advisory committees described in paragraph 
     (1).
       ``(3) Applicability of federal advisory committee act.--Any 
     advisory committee described in paragraph (1) shall be 
     subject to the Federal Advisory Committee Act (5 U.S.C. 
     App.).
       ``(i) Procurement Methods.--The Secretary shall develop and 
     provide appropriate technical assistance and guidance to 
     assist State and local agencies in evaluating and selecting 
     appropriate methods of deployment and procurement for 
     intelligent transportation system projects carried out using 
     funds made available from the Highway Trust Fund, including 
     innovative and nontraditional methods such as Information 
     Technology Omnibus Procurement (as developed by the 
     Secretary).
       ``(j) Evaluations.--
       ``(1) Guidelines and requirements.--
       ``(A) In general.--The Secretary shall issue revised 
     guidelines and requirements for the evaluation of operational 
     tests and other intelligent transportation system projects 
     carried out under this subchapter.
       ``(B) Objectivity and independence.--The guidelines and 
     requirements issued under subparagraph (A) shall include 
     provisions to ensure the objectivity and independence of the 
     evaluator so as to avoid any real or apparent conflict of 
     interest or potential influence on the outcome by--
       ``(i) parties to any such test; or
       ``(ii) any other formal evaluation carried out under this 
     subchapter.
       ``(C) Funding.--The guidelines and requirements issued 
     under subparagraph (A) shall establish evaluation funding 
     levels based on the size and scope of each test that ensure 
     adequate evaluation of the results of the test or project.
       ``(2) Special rule.--Any survey, questionnaire, or 
     interview that the Secretary considers necessary to carry out 
     the evaluation of any test or program assessment activity 
     under this subchapter shall not be subject to chapter 35 of 
     title 44.

     ``Sec. 525. National ITS Program Plan

       ``(a) In General.--
       ``(1) Updates.--Not later than 1 year after the date of 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004, the Secretary, in 
     consultation with interested stakeholders (including State 
     transportation departments) shall develop a 5-year National 
     ITS Program Plan.
       ``(2) Scope.--The National ITS Program Plan shall--
       ``(A) specify the goals, objectives, and milestones for the 
     research and deployment of intelligent transportation systems 
     in the contexts of--

[[Page 10882]]

       ``(i) major metropolitan areas;
       ``(ii) smaller metropolitan and rural areas; and
       ``(iii) commercial vehicle operations;
       ``(B) specify the manner in which specific programs and 
     projects will achieve the goals, objectives, and milestones 
     referred to in subparagraph (A), including consideration of a 
     5-year timeframe for the goals and objectives;
       ``(C) identify activities that provide for the dynamic 
     development, testing, and necessary revision of standards and 
     protocols to promote and ensure interoperability in the 
     implementation of intelligent transportation system 
     technologies, including actions taken to establish standards; 
     and
       ``(D) establish a cooperative process with State and local 
     governments for--
       ``(i) determining desired surface transportation system 
     performance levels; and
       ``(ii) developing plans for accelerating the incorporation 
     of specific intelligent transportation system capabilities 
     into surface transportation systems.
       ``(b) Reporting.--The National ITS Program Plan shall be 
     transmitted and biennially updated as part of the surface 
     transportation research and technology development strategic 
     plan developed under section 508(c).

     ``Sec. 526. National ITS architecture and standards

       ``(a) In General.--
       ``(1) Development, implementation, and maintenance.--In 
     accordance with section 12(d) of the National Technology 
     Transfer and Advancement Act of 1995 (15 U.S.C. 272 note; 110 
     Stat. 783), the Secretary shall develop, implement, and 
     maintain a national ITS architecture and supporting standards 
     and protocols to promote the widespread use and evaluation of 
     intelligent transportation system technology as a component 
     of the surface transportation systems of the United States.
       ``(2) Interoperability and efficiency.--To the maximum 
     extent practicable, the national ITS architecture shall 
     promote interoperability among, and efficiency of, 
     intelligent transportation system technologies implemented 
     throughout the United States.
       ``(3) Use of standards development organizations.--In 
     carrying out this section, the Secretary shall use the 
     services of such standards development organizations as the 
     Secretary determines to be appropriate.
       ``(b) Provisional Standards.--
       ``(1) In general.--If the Secretary finds that the 
     development or selection of an intelligent transportation 
     system standard jeopardizes the timely achievement of the 
     objectives identified in subsection (a), the Secretary may 
     establish a provisional standard--
       ``(A) after consultation with affected parties; and
       ``(B) by using, to the maximum extent practicable, the work 
     product of appropriate standards development organizations.
       ``(2) Critical standards.--If a standard identified by the 
     Secretary as critical has not been adopted and published by 
     the appropriate standards development organization by the 
     date of enactment of this subchapter, the Secretary shall 
     establish a provisional standard--
       ``(A) after consultation with affected parties; and
       ``(B) by using, to the maximum extent practicable, the work 
     product of appropriate standards development organizations.
       ``(3) Period of effectiveness.--A provisional standard 
     established under paragraph (1) or (2) shall--
       ``(A) be published in the Federal Register; and
       ``(B) remain in effect until such time as the appropriate 
     standards development organization adopts and publishes a 
     standard.
       ``(c) Waiver of Requirement To Establish Provisional 
     Critical Standard.--
       ``(1) In general.--The Secretary may waive the requirement 
     under subsection (b)(2) to establish a provisional standard 
     if the Secretary determines that additional time would be 
     productive in, or that establishment of a provisional 
     standard would be counterproductive to, the timely 
     achievement of the objectives identified in subsection (a).
       ``(2) Notice.--The Secretary shall publish in the Federal 
     Register a notice that describes--
       ``(A) each standard for which a waiver of the provisional 
     standard requirement is granted under paragraph (1);
       ``(B) the reasons for and effects of granting the waiver; 
     and
       ``(C) an estimate as to the date on which the standard is 
     expected to be adopted through a process consistent with 
     section 12(d) of the National Technology Transfer and 
     Advancement Act of 1995 (15 U.S.C. 272 note; 110 Stat. 783).
       ``(3) Withdrawal of waiver.--
       ``(A) In general.--The Secretary may withdraw a waiver 
     granted under paragraph (1) at any time.
       ``(B) Notice.--On withdrawal of a waiver, the Secretary 
     shall publish in the Federal Register a notice that 
     describes--
       ``(i) each standard for which the waiver has been 
     withdrawn; and
       ``(ii) the reasons for withdrawing the waiver.
       ``(d) Conformity With National ITS Architecture.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary shall ensure that intelligent 
     transportation system projects carried out using funds made 
     available from the Highway Trust Fund conform to the national 
     ITS architecture, applicable standards or provisional 
     standards, and protocols developed under subsection (a).
       ``(2) Discretion of secretary.--The Secretary may authorize 
     exceptions to paragraph (1) for projects designed to achieve 
     specific research objectives outlined in--
       ``(A) the National ITS Program Plan under section 525; or
       ``(B) the surface transportation research and technology 
     development strategic plan developed under section 508(c).
       ``(3) Exceptions.--Paragraph (1) shall not apply to funds 
     used for operation or maintenance of an intelligent 
     transportation system in existence on the date of enactment 
     of this subchapter.

     ``Sec. 527. Commercial vehicle information systems and 
       networks deployment

       ``(a) Definitions.--In this section:
       ``(1) Commercial vehicle information systems and 
     networks.--The term `commercial vehicle information systems 
     and networks' means the information systems and 
     communications networks that provide the capability to--
       ``(A) improve the safety of commercial vehicle operations;
       ``(B) increase the efficiency of regulatory inspection 
     processes to reduce administrative burdens by advancing 
     technology to facilitate inspections and increase the 
     effectiveness of enforcement efforts;
       ``(C) advance electronic processing of registration 
     information, driver licensing information, fuel tax 
     information, inspection and crash data, and other safety 
     information;
       ``(D) enhance the safe passage of commercial vehicles 
     across the United States and across international borders; 
     and
       ``(E) promote the communication of information among the 
     States and encourage multistate cooperation and corridor 
     development.
       ``(2) Commercial vehicle operations.--
       ``(A) In general.--The term `commercial vehicle operations' 
     means motor carrier operations and motor vehicle regulatory 
     activities associated with the commercial movement of goods 
     (including hazardous materials) and passengers.
       ``(B) Inclusions.--The term `commercial vehicle 
     operations', with respect to the public sector, includes--
       ``(i) the issuance of operating credentials;
       ``(ii) the administration of motor vehicle and fuel taxes; 
     and
       ``(iii) the administration of roadside safety and border 
     crossing inspection and regulatory compliance operations.
       ``(3) Core deployment.--The term `core deployment' means 
     the deployment of systems in a State necessary to provide the 
     State with--
       ``(A) safety information exchange to--
       ``(i) electronically collect and transmit commercial 
     vehicle and driver inspection data at a majority of 
     inspection sites;
       ``(ii) connect to the Safety and Fitness Electronic Records 
     system for access to--

       ``(I) interstate carrier and commercial vehicle data;
       ``(II) summaries of past safety performance; and
       ``(III) commercial vehicle credentials information; and

       ``(iii) exchange carrier data and commercial vehicle safety 
     and credentials information within the State and connect to 
     Safety and Fitness Electronic Records system for access to 
     interstate carrier and commercial vehicle data;
       ``(B) interstate credentials administration to--
       ``(i)(I) perform end-to-end (including carrier application) 
     jurisdiction application processing, and credential issuance, 
     of at least the International Registration Plan and 
     International Fuel Tax Agreement credentials; and
       ``(II) extend the processing to other credentials, 
     including intrastate, titling, oversize or overweight 
     requirements, carrier registration, and hazardous materials;
       ``(ii) connect to the International Registration Plan and 
     International Fuel Tax Agreement clearinghouses; and
       ``(iii)(I) have at least 10 percent of the transaction 
     volume handled electronically; and
       ``(II) have the capability to add more carriers and to 
     extend to branch offices where applicable; and
       ``(C) roadside electronic screening to electronically 
     screen transponder-equipped commercial vehicles at a minimum 
     of 1 fixed or mobile inspection site and to replicate the 
     screening at other sites.
       ``(4) Expanded deployment.--The term `expanded deployment' 
     means the deployment of systems in a State that--
       ``(A) exceed the requirements of a core deployment of 
     commercial vehicle information systems and networks;
       ``(B) improve safety and the productivity of commercial 
     vehicle operations; and
       ``(C) enhance transportation security.
       ``(b) Program.--The Secretary shall carry out a commercial 
     vehicle information systems and networks program to--
       ``(1) improve the safety and productivity of commercial 
     vehicles and drivers; and
       ``(2) reduce costs associated with commercial vehicle 
     operations and Federal and State commercial vehicle 
     regulatory requirements.
       ``(c) Purpose.--It is the purpose of the program to advance 
     the technological capability and promote the deployment of 
     intelligent transportation system applications for commercial 
     vehicle operations, including commercial vehicle, commercial 
     driver, and carrier-specific information systems and 
     networks.
       ``(d) Core Deployment Grants.--
       ``(1) In general.--The Secretary shall make grants to 
     eligible States for the core deployment of commercial vehicle 
     information systems and networks.

[[Page 10883]]

       ``(2) Eligibility.--To be eligible for a core deployment 
     grant under this subsection, a State shall--
       ``(A) have a commercial vehicle information systems and 
     networks program plan and a top level system design approved 
     by the Secretary;
       ``(B) certify to the Secretary that the commercial vehicle 
     information systems and networks deployment activities of the 
     State (including hardware procurement, software and system 
     development, and infrastructure modifications)--
       ``(i) are consistent with the national intelligent 
     transportation systems and commercial vehicle information 
     systems and networks architectures and available standards; 
     and
       ``(ii) promote interoperability and efficiency, to the 
     maximum extent practicable; and
       ``(C) agree to execute interoperability tests developed by 
     the Federal Motor Carrier Safety Administration to verify 
     that the systems of the State conform with the national 
     intelligent transportation systems architecture, applicable 
     standards, and protocols for commercial vehicle information 
     systems and networks.
       ``(3) Amount of grants.--The maximum aggregate amount a 
     State may receive under this subsection for the core 
     deployment of commercial vehicle information systems and 
     networks may not exceed $2,500,000, including funds received 
     under section 2001(a) of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004 for the core 
     deployment of commercial vehicle information systems and 
     networks.
       ``(4) Use of funds.--
       ``(A) In general.--Subject to subparagraph (B), funds from 
     a grant under this subsection may only be used for the core 
     deployment of commercial vehicle information systems and 
     networks.
       ``(B) Remaining funds.--An eligible State that has 
     completed the core deployment of commercial vehicle 
     information systems and networks, or completed the deployment 
     before core deployment grant funds are expended, may use the 
     remaining core deployment grant funds for the expanded 
     deployment of commercial vehicle information systems and 
     networks in the State.
       ``(e) Expanded Deployment Grants.--
       ``(1) In general.--For each fiscal year, from the funds 
     remaining after the Secretary has made core deployment grants 
     under subsection (d), the Secretary may make grants to each 
     eligible State, on request, for the expanded deployment of 
     commercial vehicle information systems and networks.
       ``(2) Eligibility.--Each State that has completed the core 
     deployment of commercial vehicle information systems and 
     networks shall be eligible for an expanded deployment grant.
       ``(3) Amount of grants.--Each fiscal year, the Secretary 
     may distribute funds available for expanded deployment grants 
     equally among the eligible States in an amount that does not 
     exceed $1,000,000 for each State.
       ``(4) Use of funds.--A State may use funds from a grant 
     under this subsection only for the expanded deployment of 
     commercial vehicle information systems and networks.
       ``(f) Federal Share.--The Federal share of the cost of a 
     project payable from funds made available to carry out this 
     section shall be the share applicable under section 120(b), 
     as adjusted under subsection (d) of that section.
       ``(g) Funding.--Funds authorized to be appropriated to 
     carry out this section shall be available for obligation in 
     the same manner and to the same extent as if the funds were 
     apportioned under chapter 1, except that the funds shall 
     remain available until expended.

     ``Sec. 528. Research and development

       ``(a) In General.--The Secretary shall carry out a 
     comprehensive program of intelligent transportation system 
     research, development, and operational tests of intelligent 
     vehicles and intelligent infrastructure systems, and other 
     similar activities that are necessary to carry out this 
     subchapter.
       ``(b) Priority Areas.--Under the program, the Secretary 
     shall give priority to funding projects that--
       ``(1) assist in the development of an interconnected 
     national intelligent transportation system network that--
       ``(A) improves the reliability of the surface 
     transportation system;
       ``(B) supports national security;
       ``(C) reduces, by at least 20 percent, the cost of 
     manufacturing, deploying, and operating intelligent 
     transportation systems network components;
       ``(D) could assist in deployment of the Armed Forces in 
     response to a crisis; and
       ``(E) improves response to, and evacuation of the public 
     during, an emergency situation;
       ``(2) address traffic management, incident management, 
     transit management, toll collection traveler information, or 
     highway operations systems with goals of--
       ``(A) reducing metropolitan congestion by 5 percent by 
     2010;
       ``(B) ensuring that a national, interoperable 511 system, 
     along with a national traffic information system that 
     includes a user-friendly, comprehensive website, is fully 
     implemented for use by travelers throughout the United States 
     by September 30, 2010; and
       ``(C)(i) improving incident management response, 
     particularly in rural areas, so that rural emergency response 
     times are reduced by an average of 10 minutes; and
       ``(ii) subject to subsection (d), improving communication 
     between emergency care providers and trauma centers;
       ``(3) address traffic management, incident management, 
     transit management, toll collection, traveler information, or 
     highway operations systems;
       ``(4) conduct operational tests of the integration of at 
     least 3 crash-avoidance technologies in passenger vehicles;
       ``(5) incorporate human factors research, including the 
     science of the driving process;
       ``(6) facilitate the integration of intelligent 
     infrastructure, vehicle, and control technologies;
       ``(7) incorporate research on the impact of environmental, 
     weather, and natural conditions on intelligent transportation 
     systems, including the effects of cold climates;
       ``(8) as determined by the Secretary, will improve the 
     overall safety performance of vehicles and roadways, 
     including the use of real-time setting of speed limits 
     through the use of speed management technology;
       ``(9) examine--
       ``(A) the application to intelligent transportation systems 
     of appropriately modified existing technologies from other 
     industries; and
       ``(B) the development of new, more robust intelligent 
     transportation systems technologies and instrumentation;
       ``(10) develop and test communication technologies that--
       ``(A) are based on an assessment of the needs of officers 
     participating in a motor carrier safety program funded under 
     section 31104 of title 49;
       ``(B) take into account the effectiveness and adequacy of 
     available technology;
       ``(C) address systems integration, connectivity, and 
     interoperability challenges; and
       ``(D) provide the means for officers participating in a 
     motor carrier safety program funded under section 31104 of 
     title 49 to directly assess, without an intermediary, current 
     and accurate safety and regulatory information on motor 
     carriers, commercial motor vehicles and drivers at roadside 
     or mobile inspection facilities;
       ``(11) enhance intermodal use of intelligent transportation 
     systems for diverse groups, including for emergency and 
     health-related services;
       ``(12) improve sensing and wireless communications that 
     provide real-time information regarding congestion and 
     incidents;
       ``(13) develop and test high-accuracy, lane-level, real-
     time accessible digital map architectures that can be used by 
     intelligent vehicles and intelligent infrastructure elements 
     to facilitate safety and crash avoidance (including 
     establishment of national standards for an open-architecture 
     digital map of all public roads that is compatible with 
     electronic 9-1-1 services);
       ``(14) encourage the dual-use of intelligent transportation 
     system technologies (such as wireless communications) for--
       ``(A) emergency services;
       ``(B) road pricing; and
       ``(C) local economic development; and
       ``(15) advance the use of intelligent transportation 
     systems to facilitate high-performance transportation 
     systems, such as through--
       ``(A) congestion-pricing;
       ``(B) real-time facility management;
       ``(C) rapid-emergency response; and
       ``(D) just-in-time transit.
       ``(c) Operational Tests.--Operational tests conducted under 
     this section shall be designed for--
       ``(1) the collection of data to permit objective evaluation 
     of the results of the tests;
       ``(2) the derivation of cost-benefit information that is 
     useful to others contemplating deployment of similar systems; 
     and
       ``(3) the development and implementation of standards.
       ``(d) Federal Share.--The Federal share of the costs of 
     operational tests under subsection (a) shall not exceed 80 
     percent.

     ``Sec. 529. Use of funds

       ``(a) In General.--For each fiscal year, not more than 
     $5,000,000 of the funds made available to carry out this 
     subchapter shall be used for intelligent transportation 
     system outreach, public relations, displays, tours, and 
     brochures.
       ``(b) Applicability.--Subsection (a) shall not apply to 
     intelligent transportation system training, scholarships, or 
     the publication or distribution of research findings, 
     technical guidance, or similar documents.''.
       (b) Conforming Amendment.--Title V of the Transportation 
     Equity Act for the 21st Century is amended by striking 
     subtitle C (23 U.S.C. 502 note; 112 Stat. 452).

                    TITLE III--PUBLIC TRANSPORTATION

     SEC. 3001. SHORT TITLE.

       This title may be cited as the ``Federal Public 
     Transportation Act of 2004''.

     SEC. 3002. AMENDMENTS TO TITLE 49, UNITED STATES CODE; 
                   UPDATED TERMINOLOGY.

       (a) Amendments to Title 49.--Except as otherwise 
     specifically provided, whenever in this title an amendment or 
     repeal is expressed in terms of an amendment to, or repeal 
     of, a section or other provision of law, the reference shall 
     be considered to be made to a section or other provision of 
     title 49, United States Code.
       (b) Updated Terminology.--Except for sections 5301(f), 
     5302(a)(7), and 5315, chapter 53, including the chapter 
     analysis, is amended by striking ``mass transportation'' each 
     place it appears and inserting ``public transportation''.

     SEC. 3003. POLICIES, FINDINGS, AND PURPOSES.

       (a) Development and Revitalization of Public Transportation 
     Systems.--Section 5301(a) is amended to read as follows:
       ``(a) Development and Revitalization of Public 
     Transportation Systems.--It is in the economic interest of 
     the United States to foster the development and 
     revitalization of public

[[Page 10884]]

     transportation systems, which are coordinated with other 
     modes of transportation, that maximize the efficient, secure, 
     and safe mobility of individuals and minimize environmental 
     impacts.''.
       (b) General Findings.--Section 5301(b)(1) is amended--
       (1) by striking ``70 percent'' and inserting ``two-
     thirds''; and
       (2) by striking ``urban areas'' and inserting ``urbanized 
     areas''.
       (c) Preserving the Environment.--Section 5301(e) is 
     amended--
       (1) by striking ``an urban'' and inserting ``a''; and
       (2) by striking ``under sections 5309 and 5310 of this 
     title''.
       (d) General Purposes.--Section 5301(f) is amended--
       (1) in paragraph (1)--
       (A) by striking ``improved mass'' and inserting ``improved 
     public''; and
       (B) by striking ``public and private mass transportation 
     companies'' and inserting ``public transportation companies 
     and private companies engaged in public transportation'';
       (2) in paragraph (2)--
       (A) by striking ``urban mass'' and inserting ``public''; 
     and
       (B) by striking ``public and private mass transportation 
     companies'' and inserting ``public transportation companies 
     and private companies engaged in public transportation'';
       (3) in paragraph (3)--
       (A) by striking ``urban mass'' and inserting ``public''; 
     and
       (B) by striking ``public or private mass transportation 
     companies'' and inserting ``public transportation companies 
     or private companies engaged in public transportation''; and
       (4) in paragraph (5), by striking ``urban mass'' and 
     inserting ``public''.

     SEC. 3004. DEFINITIONS.

       Section 5302(a) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (G)(i), by inserting ``including the 
     intercity bus and intercity rail portions of such facility or 
     mall,'' after ``transportation mall,'';
       (B) in subparagraph (G)(ii), by inserting ``, except for 
     the intercity bus portion of intermodal facilities or 
     malls,'' after ``commercial revenue-producing facility'';
       (C) in subparagraph (H)--
       (i) by striking ``and'' after ``innovative'' and inserting 
     ``or''; and
       (ii) by striking ``or'' after the semicolon at the end;
       (D) in subparagraph (I), by striking the period at the end 
     and inserting a semicolon; and
       (E) by adding at the end the following:
       ``(J) crime prevention and security, including--
       ``(i) projects to refine and develop security and emergency 
     response plans; or
       ``(ii) projects to detect chemical or biological agents in 
     public transportation;
       ``(K) conducting emergency response drills with public 
     transportation agencies and local first response agencies or 
     security training for public transportation employees, except 
     for expenses relating to operations; or
       ``(L) establishing a debt service reserve, made up of 
     deposits with a bondholder's trustee, to ensure the timely 
     payment of principal and interest on bonds issued by a grant 
     recipient to finance an eligible project under this 
     chapter.'';
       (2) by striking paragraph (16);
       (3) by redesignating paragraphs (8) through (15) as 
     paragraphs (9) through (16), respectively;
       (4) by striking paragraph (7) and inserting the following:
       ``(7) Mass transportation.--The term `mass transportation' 
     means public transportation.
       ``(8) Mobility management.--The term `mobility management' 
     means a short-range planning or management activity or 
     project that does not include operating public transportation 
     services and--
       ``(A) improves coordination among public transportation 
     providers, including private companies engaged in public 
     transportation;
       ``(B) addresses customer needs by tailoring public 
     transportation services to specific market niches; or
       ``(C) manages public transportation demand.'';
       (5) by amending paragraph (11), as redesignated, to read as 
     follows:
       ``(11) Public transportation.--The term `public 
     transportation' means transportation by a conveyance that 
     provides local regular and continuing general or special 
     transportation to the public, but does not include school 
     bus, charter bus, intercity bus or passenger rail, or 
     sightseeing transportation.'';
       (6) in subparagraphs (A) and (E) of paragraph (16), as 
     redesignated, by striking ``and'' each place it appears and 
     inserting ``or''; and
       (7) by amending paragraph (17) to read as follows:
       ``(17) Urbanized area.--The term `urbanized area' means an 
     area encompassing a population of not less than 50,000 people 
     that has been defined and designated in the most recent 
     decennial census as an `urbanized area' by the Secretary of 
     Commerce.''.

     SEC. 3005. METROPOLITAN TRANSPORTATION PLANNING.

       Section 5303 is amended to read as follows:

     ``Sec. 5303. Metropolitan transportation planning

       ``(a) Definitions.--As used in this section and in section 
     5304, the following definitions shall apply:
       ``(1) Consultation.--A `consultation' occurs when 1 party--
       ``(A) confers with another identified party in accordance 
     with an established process;
       ``(B) prior to taking action, considers the views of the 
     other identified party; and
       ``(C) periodically informs that party about action taken.
       ``(2) Metropolitan planning area.--The term `metropolitan 
     planning area' means the geographic area determined by 
     agreement between the metropolitan planning organization and 
     the Governor under subsection (d).
       ``(3) Metropolitan planning organization.--The term 
     `metropolitan planning organization' means the Policy Board 
     of the organization designated under subsection (c).
       ``(4) Nonmetropolitan area.--The term `nonmetropolitan 
     area' means any geographic area outside all designated 
     metropolitan planning areas.
       ``(5) Nonmetropolitan local official.--The term 
     `nonmetropolitan local official' means any elected or 
     appointed official of general purpose local government 
     located in a nonmetropolitan area who is responsible for 
     transportation services for such local government.
       ``(b) General Requirements.--
       ``(1) Development of plans and programs.--To accomplish the 
     objectives described in section 5301(a), each metropolitan 
     planning organization, in cooperation with the State and 
     public transportation operators, shall develop transportation 
     plans and programs for metropolitan planning areas of the 
     State in which it is located.
       ``(2) Contents.--The plans and programs developed under 
     paragraph (1) for each metropolitan planning area shall 
     provide for the development and integrated management and 
     operation of transportation systems and facilities (including 
     pedestrian walkways and bicycle transportation facilities) 
     that will function as an intermodal transportation system for 
     the metropolitan planning area and as an integral part of an 
     intermodal transportation system for the State and the United 
     States.
       ``(3) Process of development.--The process for developing 
     the plans and programs shall provide for consideration of all 
     modes of transportation and shall be continuing, cooperative, 
     and comprehensive to the degree appropriate, based on the 
     complexity of the transportation problems to be addressed.
       ``(4) Planning and project development.--The metropolitan 
     planning organization, the State Department of 
     Transportation, and the appropriate public transportation 
     provider shall agree upon the approaches that will be used to 
     evaluate alternatives and identify transportation 
     improvements that address the most complex problems and 
     pressing transportation needs in the metropolitan area.
       ``(c) Designation of Metropolitan Planning Organizations.--
       ``(1) In general.--To carry out the transportation planning 
     process under this section, a metropolitan planning 
     organization shall be designated for each urbanized area--
       ``(A) by agreement between the Governor and units of 
     general purpose local government that combined represent not 
     less than 75 percent of the affected population (including 
     the incorporated city or cities named by the Bureau of the 
     Census in designating the urbanized area); or
       ``(B) in accordance with procedures established by 
     applicable State or local law.
       ``(2) Structure.--Each metropolitan planning organization 
     designated under paragraph (1) that serves an area identified 
     as a transportation management area shall consist of--
       ``(A) local elected officials;
       ``(B) officials of public agencies that administer or 
     operate major modes of transportation in the metropolitan 
     area; and
       ``(C) appropriate State officials.
       ``(3) Limitation on statutory construction.--Nothing in 
     this subsection shall be construed to interfere with the 
     authority, under any State law in effect on December 18, 
     1991, of a public agency with multimodal transportation 
     responsibilities--
       ``(A) to develop plans and programs for adoption by a 
     metropolitan planning organization; and
       ``(B) to develop long-range capital plans, coordinate 
     transit services and projects, and carry out other activities 
     pursuant to State law.
       ``(4) Continuing designation.--The designation of a 
     metropolitan planning organization under this subsection or 
     any other provision of law shall remain in effect until the 
     metropolitan planning organization is redesignated under 
     paragraph (5).
       ``(5) Redesignation procedures.--A metropolitan planning 
     organization may be redesignated by agreement between the 
     Governor and units of general purpose local government that 
     combined represent not less than 75 percent of the existing 
     planning area population (including the incorporated city or 
     cities named by the Bureau of the Census in designating the 
     urbanized area) as appropriate to carry out this section.
       ``(6) Designation of more than 1 metropolitan planning 
     organization.--More than 1 metropolitan planning organization 
     may be designated within an existing metropolitan planning 
     area only if the Governor and the existing metropolitan 
     planning organization determine that the size and complexity 
     of the existing metropolitan planning area make designation 
     of more than 1 metropolitan planning organization for the 
     area appropriate.
       ``(d) Metropolitan Planning Area Boundaries.--

[[Page 10885]]

       ``(1) In general.--For the purposes of this section, the 
     boundaries of a metropolitan planning area shall be 
     determined by agreement between the metropolitan planning 
     organization and the Governor.
       ``(2) Included area.--Each metropolitan planning area--
       ``(A) shall encompass at least the existing urbanized area 
     and the contiguous area expected to become urbanized within a 
     20-year forecast period for the transportation plan; and
       ``(B) may encompass the entire metropolitan statistical 
     area or consolidated metropolitan statistical area, as 
     defined by the Office of Management and Budget.
       ``(3) Identification of new urbanized areas within existing 
     planning area boundaries.--The designation by the Bureau of 
     the Census of new urbanized areas within an existing 
     metropolitan planning area shall not require the 
     redesignation of the existing metropolitan planning 
     organization.
       ``(4) Existing metropolitan planning areas in 
     nonattainment.--Notwithstanding paragraph (2), in the case of 
     an urbanized area designated as a nonattainment area for 
     ozone or carbon monoxide under the Clean Air Act (42 U.S.C. 
     7401 et seq.), the boundaries of the metropolitan planning 
     area in existence as of the date of enactment of the Federal 
     Public Transportation Act of 2004 shall be retained, except 
     that the boundaries may be adjusted by agreement of the 
     Governor and affected metropolitan planning organizations in 
     accordance with paragraph (5).
       ``(5) New metropolitan planning areas in nonattainment.--If 
     an urbanized area is designated after the date of enactment 
     of this paragraph in a nonattainment area for ozone or carbon 
     monoxide, the boundaries of the metropolitan planning area--
       ``(A) shall be established in accordance with subsection 
     (c)(1);
       ``(B) shall encompass the areas described in paragraph 
     (2)(A);
       ``(C) may encompass the areas described in paragraph 
     (2)(B); and
       ``(D) may address any nonattainment identified under the 
     Clean Air Act (42 U.S.C. 7401 et seq.) for ozone or carbon 
     monoxide.
       ``(e) Coordination in Multistate Areas.--
       ``(1) In general.--The Secretary shall encourage each 
     Governor with responsibility for a portion of a multistate 
     metropolitan area and the appropriate metropolitan planning 
     organizations to provide coordinated transportation planning 
     for the entire metropolitan area.
       ``(2) Interstate compacts.--States are authorized--
       ``(A) to enter into agreements or compacts with other 
     States, which agreements or compacts are not in conflict with 
     any law of the United States, for cooperative efforts and 
     mutual assistance in support of activities authorized under 
     this section as the activities pertain to interstate areas 
     and localities within the States; and
       ``(B) to establish such agencies, joint or otherwise, as 
     the States may determine desirable for making the agreements 
     and compacts effective.
       ``(3) Lake tahoe region.--
       ``(A) Definition.--In this paragraph, the term `Lake Tahoe 
     region' has the meaning given the term `region' in 
     subdivision (a) of article II of the Tahoe Regional Planning 
     Compact, as set forth in the first section of Public Law 96-
     551 (94 Stat. 3234).
       ``(B) Transportation planning process.--The Secretary 
     shall--
       ``(i) establish with the Federal land management agencies 
     that have jurisdiction over land in the Lake Tahoe region a 
     transportation planning process for the region; and
       ``(ii) coordinate the transportation planning process with 
     the planning process required of State and local governments 
     under this section and section 5304.
       ``(C) Interstate compact.--
       ``(i) In general.--Subject to clause (ii) and 
     notwithstanding subsection (c), to carry out the 
     transportation planning process required by this section, 
     California and Nevada may designate a metropolitan planning 
     organization for the Lake Tahoe region, by agreement between 
     the Governor of the State of California, the Governor of the 
     State of Nevada, and units of general purpose local 
     government that combined represent not less than 75 percent 
     of the affected population (including the incorporated city 
     or cities named by the Bureau of the Census in designating 
     the urbanized area), or in accordance with procedures 
     established by applicable State or local law.
       ``(ii) Involvement of federal land management agencies.--

       ``(I) Representation.--The policy board of a metropolitan 
     planning organization designated under clause (i) shall 
     include a representative of each Federal land management 
     agency that has jurisdiction over land in the Lake Tahoe 
     region.
       ``(II) Funding.--In addition to funds made available to the 
     metropolitan planning organization under other provisions of 
     title 23 and this chapter, not more than 1 percent of the 
     funds allocated under section 202 of title 23 may be used to 
     carry out the transportation planning process for the Lake 
     Tahoe region under this subparagraph.

       ``(D) Activities.--Highway projects included in 
     transportation plans developed under this paragraph--
       ``(i) shall be selected for funding in a manner that 
     facilitates the participation of the Federal land management 
     agencies that have jurisdiction over land in the Lake Tahoe 
     region; and
       ``(ii) may, in accordance with chapter 2 of title 23, be 
     funded using funds allocated under section 202 of title 23.
       ``(f) Coordination of Metropolitan Planning 
     Organizations.--
       ``(1) Nonattainment areas.--If more than 1 metropolitan 
     planning organization has authority within a metropolitan 
     area or an area which is designated as a nonattainment area 
     for ozone or carbon monoxide under the Clean Air Act (42 
     U.S.C. 7401 et seq.), each metropolitan planning organization 
     shall consult with the other metropolitan planning 
     organizations designated for such area and the State in the 
     coordination of plans required by this section.
       ``(2) Transportation improvements located in multiple 
     metropolitan planning areas.--If a transportation improvement 
     funded from the highway trust fund is located within the 
     boundaries of more than 1 metropolitan planning area, the 
     metropolitan planning organizations shall coordinate plans 
     regarding the transportation improvement.
       ``(3) Interregional and interstate project impacts.--
     Planning for National Highway System, commuter rail projects, 
     or other projects with substantial impacts outside a single 
     metropolitan planning area or State shall be coordinated 
     directly with the affected, contiguous, metropolitan planning 
     organizations and States.
       ``(4) Coordination with other planning processes.--
       ``(A) In general.--The Secretary shall encourage each 
     metropolitan planning organization to coordinate its planning 
     process, to the maximum extent practicable, with those 
     officials responsible for other types of planning activities 
     that are affected by transportation, including State and 
     local land use planning, economic development, environmental 
     protection, airport operations, housing, and freight.
       ``(B) Other considerations.--The metropolitan planning 
     process shall develop transportation plans with due 
     consideration of, and in coordination with, other related 
     planning activities within the metropolitan area. This should 
     include the design and delivery of transportation services 
     within the metropolitan area that are provided by--
       ``(i) recipients of assistance under this chapter;
       ``(ii) governmental agencies and nonprofit organizations 
     (including representatives of the agencies and organizations) 
     that receive Federal assistance from a source other than the 
     Department of Transportation to provide nonemergency 
     transportation services; and
       ``(iii) recipients of assistance under section 204 of title 
     23.
       ``(g) Scope of Planning Process.--
       ``(1) In general.--The goals and objectives developed 
     through the metropolitan planning process for a metropolitan 
     planning area under this section shall address, in relation 
     to the performance of the metropolitan area transportation 
     systems--
       ``(A) supporting the economic vitality of the metropolitan 
     area, especially by enabling global competitiveness, 
     productivity, and efficiency, including through services 
     provided by public and private operators;
       ``(B) increasing the safety of the transportation system 
     for motorized and nonmotorized users;
       ``(C) increasing the security of the transportation system 
     for motorized and nonmotorized users;
       ``(D) increasing the accessibility and mobility of people 
     and for freight, including through services provided by 
     public and private operators;
       ``(E) protecting and enhancing the environment (including 
     the protection of habitat, water quality, and agricultural 
     and forest land, while minimizing invasive species), 
     promoting energy conservation, and promoting consistency 
     between transportation improvements and State and local land 
     use planning and economic development patterns (including 
     minimizing adverse health effects from mobile source air 
     pollution and promoting the linkage of the transportation and 
     development goals of the metropolitan area);
       ``(F) enhancing the integration and connectivity of the 
     transportation system, across and between modes, for people 
     and freight, including through services provided by public 
     and private operators;
       ``(G) promoting efficient system management and operation; 
     and
       ``(H) emphasizing the preservation and efficient use of the 
     existing transportation system, including services provided 
     by public and private operators.
       ``(2) Selection of factors.--After soliciting and 
     considering any relevant public comments, the metropolitan 
     planning organization shall determine which of the factors 
     described in paragraph (1) are most appropriate to consider.
       ``(3) Failure to consider factors.--The failure to consider 
     any factor specified in paragraph (1) shall not be reviewable 
     by any court under title 23, this title, subchapter II of 
     chapter 5 of title 5, or chapter 7 of title 5 in any matter 
     affecting a transportation plan, a transportation improvement 
     plan, a project or strategy, or the certification of a 
     planning process.
       ``(h) Development of Transportation Plan.--
       ``(1) In general.--
       ``(A) Requirement.--Each metropolitan planning organization 
     shall develop a transportation plan for its metropolitan 
     planning area in accordance with this subsection, and update 
     such plan--
       ``(i) not less frequently than once every 4 years in areas 
     designated as nonattainment, as defined in section 107(d) of 
     the Clean Air Act (42

[[Page 10886]]

     U.S.C. 7407(d)), and in areas that were nonattainment that 
     have been redesignated as attainment, in accordance with 
     paragraph (3) of such section, with a maintenance plan under 
     section 175A of the Clean Air Act (42 U.S.C. 7505a); or
       ``(ii) not less frequently than once every 5 years in areas 
     designated as attainment, as defined in section 107(d) of the 
     Clean Air Act.
       ``(B) Coordination factors.--In developing the 
     transportation plan under this section, each metropolitan 
     planning organization shall consider the factors described in 
     subsection (f) over a 20-year forecast period.
       ``(C) Financial estimates.--For the purpose of developing 
     the transportation plan, the metropolitan planning 
     organization, transit operator, and State shall cooperatively 
     develop estimates of funds that will be available to support 
     plan implementation.
       ``(2) Mitigation activities.--
       ``(A) In general.--A transportation plan under this 
     subsection shall include a discussion of--
       ``(i) types of potential habitat, hydrological, and 
     environmental mitigation activities that may assist in 
     compensating for loss of habitat, wetland, and other 
     environmental functions; and
       ``(ii) potential areas to carry out these activities, 
     including a discussion of areas that may have the greatest 
     potential to restore and maintain the habitat types and 
     hydrological or environmental functions affected by the plan.
       ``(B) Consultation.--The discussion described in 
     subparagraph (A) shall be developed in consultation with 
     Federal and State tribal wildlife, land management, and 
     regulatory agencies.
       ``(3) Contents.-- A transportation plan under this 
     subsection shall be in a form that the Secretary determines 
     to be appropriate and shall contain--
       ``(A) an identification of transportation facilities, 
     including major roadways, transit, multimodal and intermodal 
     facilities, intermodal connectors, and other relevant 
     facilities identified by the metropolitan planning 
     organization, which should function as an integrated 
     metropolitan transportation system, emphasizing those 
     facilities that serve important national and regional 
     transportation functions;
       ``(B) a financial plan that--
       ``(i) demonstrates how the adopted transportation plan can 
     be implemented;
       ``(ii) indicates resources from public and private sources 
     that are reasonably expected to be made available to carry 
     out the plan;
       ``(iii) recommends any additional financing strategies for 
     needed projects and programs; and
       ``(iv) may include, for illustrative purposes, additional 
     projects that would be included in the adopted transportation 
     plan if approved by the Secretary and reasonable additional 
     resources beyond those identified in the financial plan were 
     available;
       ``(C) operational and management strategies to improve the 
     performance of existing transportation facilities to relieve 
     vehicular congestion and maximize the safety and mobility of 
     people and goods;
       ``(D) capital investment and other strategies to preserve 
     the existing metropolitan transportation infrastructure and 
     provide for multimodal capacity increases based on regional 
     priorities and needs; and
       ``(E) proposed transportation and transit enhancement 
     activities.
       ``(4) Consultation.--
       ``(A) In general.--In each metropolitan area, the 
     metropolitan planning organization shall consult, as 
     appropriate, with State and local agencies responsible for 
     land use management, natural resources, environmental 
     protection, conservation, and historic preservation 
     concerning the development of a long-range transportation 
     plan.
       ``(B) Issues.--The consultation shall involve--
       ``(i) comparison of transportation plans with State 
     conservation plans or with maps, if available;
       ``(ii) comparison of transportation plans to inventories of 
     natural or historic resources, if available; or
       ``(iii) consideration of areas where wildlife crossing 
     structures may be needed to ensure connectivity between 
     wildlife habitat linkage areas.
       ``(5) Coordination with clean air act agencies.--In 
     metropolitan areas in nonattainment for ozone or carbon 
     monoxide under the Clean Air Act (42 U.S.C. 7401 et seq.), 
     the metropolitan planning organization shall coordinate the 
     development of a transportation plan with the process for 
     development of the transportation control measures of the 
     State implementation plan required by the Clean Air Act.
       ``(6) Approval of the transportation plan.--Each 
     transportation plan prepared by a metropolitan planning 
     organization shall be--
       ``(A) approved by the metropolitan planning organization; 
     and
       ``(B) submitted to the Governor for information purposes at 
     such time and in such manner as the Secretary may reasonably 
     require.
       ``(i) Participation by Interested Parties.--
       ``(1) Development of participation plan.--Not less 
     frequently than every 4 years, each metropolitan planning 
     organization shall develop and adopt a plan for participation 
     in the process for developing the metropolitan transportation 
     plan and programs by--
       ``(A) citizens;
       ``(B) affected public agencies;
       ``(C) representatives of public transportation employees;
       ``(D) freight shippers;
       ``(E) providers of freight transportation services;
       ``(F) private providers of transportation;
       ``(G) representatives of users of public transit;
       ``(H) representatives of users of pedestrian walkways and 
     bicycle transportation facilities; and
       ``(I) other interested parties.
       ``(2) Contents of participation plan.--The participation 
     plan--
       ``(A) shall be developed in a manner the Secretary 
     determines to be appropriate;
       ``(B) shall be developed in consultation with all 
     interested parties; and
       ``(C) shall provide that all interested parties have 
     reasonable opportunities to comment on--
       ``(i) the process for developing the transportation plan; 
     and
       ``(ii) the contents of the transportation plan.
       ``(3) Methods.--The participation plan shall provide that 
     the metropolitan planning organization shall, to the maximum 
     extent practicable--
       ``(A) hold any public meetings at convenient and accessible 
     locations and times;
       ``(B) employ visualization techniques to describe plans; 
     and
       ``(C) make public information available in electronically 
     accessible format and means, such as the World Wide Web.
       ``(4) Certification.--Before the metropolitan planning 
     organizations approve a transportation plan or program, each 
     metropolitan planning organization shall certify that it has 
     complied with the requirements of the participation plan it 
     has adopted.
       ``(j) Transportation Improvement Program.--
       ``(1) Development and update.--
       ``(A) In general.--In cooperation with the State and 
     affected operators of public transportation, a metropolitan 
     planning organization designated for a metropolitan planning 
     area shall develop a transportation improvement program for 
     the area.
       ``(B) Participation.--In developing the transportation 
     improvement program, the metropolitan planning organization, 
     in cooperation with the Governor and any affected operator of 
     public transportation, shall provide an opportunity for 
     participation by interested parties in the development of the 
     program, in accordance with subsection (i).
       ``(C) Updates.--The transportation improvement program 
     shall be updated not less than once every 4 years and shall 
     be approved by the metropolitan planning organization and the 
     Governor.
       ``(D) Funding estimate.--In developing the transportation 
     improvement program, the metropolitan planning organization, 
     operators of public transportation, and the State shall 
     cooperatively develop estimates of funds that are reasonably 
     expected to be available to support program implementation.
       ``(E) Project advancement.--Projects listed in the 
     transportation improvement program may be selected for 
     advancement consistent with the project selection 
     requirements.
       ``(F) Major amendments.--Major amendments to the list 
     described in subparagraph (E), including the addition, 
     deletion, or concept and scope change of a regionally 
     significant project, may not be advanced without--
       ``(i) appropriate public involvement;
       ``(ii) financial planning;
       ``(iii) transportation conformity analyses; and
       ``(iv) a finding by the Federal Highway Administration and 
     Federal Transit Administration that the amended plan was 
     produced in a manner consistent with this section.
       ``(2) Included projects.--
       ``(A) Projects under chapter 1 of title 23 and this 
     chapter.--A transportation improvement program developed 
     under this section for a metropolitan area shall include the 
     projects and strategies within the metropolitan area that are 
     proposed for funding under chapter 1 of title 23 and this 
     chapter.
       ``(B) Projects under chapter 2 of title 23.--
       ``(i) Regionally significant projects.--Regionally 
     significant projects proposed for funding under chapter 2 of 
     title 23 shall be identified individually in the metropolitan 
     transportation improvement program.
       ``(ii) Other projects.--Projects proposed for funding under 
     chapter 2 of title 23 that are not regionally significant 
     shall be grouped in 1 line item or identified individually in 
     the metropolitan transportation improvement program.
       ``(3) Selection of projects.--
       ``(A) In general.--Except as otherwise provided under 
     subsection (k)(4), the selection of federally funded projects 
     in metropolitan planning areas shall be carried out, from the 
     approved transportation plan--
       ``(i) by the State, in the case of projects under chapter 1 
     of title 23 or section 5308, 5310, 5311, or 5317 of this 
     title;
       ``(ii) by the designated recipient, in the case of projects 
     under section 5307; and
       ``(iii) in cooperation with the metropolitan planning 
     organization.
       ``(B) Modifications to project priority.--Notwithstanding 
     any other provision of law, a project may be advanced from 
     the transportation improvement program in place of another 
     project in the same transportation improvement program 
     without the approval of the Secretary.
       ``(4) Publication requirements.--
       ``(A) Publication of transportation improvement program.--A 
     transportation improvement program involving Federal 
     participation shall be published or otherwise made readily 
     available by the metropolitan planning organization for 
     public review, including, to the

[[Page 10887]]

     maximum extent practicable, in electronically accessible 
     formats and means, such as the World Wide Web.
       ``(B) Publication of annual listings of projects.--An 
     annual listing of projects, including investments in 
     pedestrian walkways and bicycle transportation facilities, 
     for which Federal funds have been obligated in the preceding 
     4 years shall be published or otherwise made available for 
     public review by the cooperative effort of the State, transit 
     operator, and the metropolitan planning organization. This 
     listing shall be consistent with the funding categories 
     identified in the transportation improvement program.
       ``(C) Rulemaking.--Not later than 120 days after the date 
     of enactment of the Federal Public Transportation Act of 
     2004, the Secretary shall issue regulations specifying--
       ``(i) the types of data to be included in the list 
     described in subparagraph (B), including--

       ``(I) the name, type, purpose, and geocoded location of 
     each project;
       ``(II) the Federal, State, and local identification numbers 
     assigned to each project;
       ``(III) amounts obligated and expended on each project, 
     sorted by funding source and transportation mode, and the 
     date on which each obligation was made; and
       ``(IV) the status of each project; and

       ``(ii) the media through which the list described in 
     subparagraph (B) will be made available to the public, 
     including written and visual components for each of the 
     projects listed.
       ``(k) Transportation Management Areas.--
       ``(1) Required identification.--The Secretary shall 
     identify each urbanized area with a population of more than 
     200,000 individuals as a transportation management area.
       ``(2) Transportation plans and programs.--Transportation 
     plans and programs for a metropolitan planning area serving a 
     transportation management area shall be based on a continuing 
     and comprehensive transportation planning process carried out 
     by the metropolitan planning organization in cooperation with 
     the State and transit operators.
       ``(3) Congestion management system.--
       ``(A) In general.--The transportation planning process 
     under this section shall address congestion management 
     through a process that provides for effective management and 
     operation, based on a cooperatively developed and implemented 
     metropolitan-wide strategy, of new and existing 
     transportation facilities eligible for funding under title 23 
     and this chapter through the use of travel demand reduction 
     and operational management strategies.
       ``(B) Phase-in schedule.--The Secretary shall establish a 
     phase-in schedule that provides for full compliance with the 
     requirements of this section not later than 1 year after the 
     identification of transportation management areas under 
     paragraph (1).
       ``(4) Selection of projects.--
       ``(A) In general.--All federally funded projects carried 
     out within the boundaries of a metropolitan planning area 
     serving a transportation management area under title 23 
     (except for projects carried out on the National Highway 
     System and projects carried out under the bridge program or 
     the interstate maintenance program) or under this chapter 
     shall be selected for implementation from the approved 
     transportation improvement program by the metropolitan 
     planning organization designated for the area in consultation 
     with the State and any affected public transit operator.
       ``(B) National highway system projects.--Projects on the 
     National Highway System carried out within the boundaries of 
     a metropolitan planning area serving a transportation 
     management area and projects carried out within such 
     boundaries under the bridge program or the interstate 
     maintenance program under title 23 shall be selected for 
     implementation from the approved transportation improvement 
     program by the State in cooperation with the metropolitan 
     planning organization designated for the area.
       ``(5) Certification.--
       ``(A) In general.--The Secretary shall--
       ``(i) ensure that the metropolitan planning process of a 
     metropolitan planning organization serving a transportation 
     management area is being carried out in accordance with 
     Federal law; and
       ``(ii) subject to subparagraph (B), certify, not less 
     frequently than once every 4 years in nonattainment and 
     maintenance areas (as defined under the Clean Air Act) and 
     not less frequently than once every 5 years in attainment 
     areas (as defined under such Act), that the requirements of 
     this paragraph are met with respect to the metropolitan 
     planning process.
       ``(B) Requirements for certification.--The Secretary may 
     make the certification under subparagraph (A) if--
       ``(i) the transportation planning process complies with the 
     requirements of this section and all other applicable Federal 
     law; and
       ``(ii) a transportation plan and a transportation 
     improvement program for the metropolitan planning area have 
     been approved by the metropolitan planning organization and 
     the Governor.
       ``(C) Penalty for failing to certify.--
       ``(i) Withholding project funds.--If the metropolitan 
     planning process of a metropolitan planning organization 
     serving a transportation management area is not certified, 
     the Secretary may withhold any funds otherwise available to 
     the metropolitan planning area for projects funded under 
     title 23 and this chapter.
       ``(ii) Restoration of withheld funds.--Any funds withheld 
     under clause (i) shall be restored to the metropolitan 
     planning area when the metropolitan planning process is 
     certified by the Secretary.
       ``(D) Review of certification.--In making a certification 
     under this paragraph, the Secretary shall provide for public 
     involvement appropriate to the metropolitan area under 
     review.
       ``(l) Abbreviated Plans for Certain Areas.--
       ``(1) In general.--Subject to paragraph (2), in the case of 
     a metropolitan area not designated as a transportation 
     management area under this section, the Secretary may provide 
     for the development of an abbreviated transportation plan and 
     transportation improvement program for the metropolitan 
     planning area that the Secretary determines is appropriate to 
     achieve the purposes of this section, after considering the 
     complexity of transportation problems in the area.
       ``(2) Nonattainment areas.--The Secretary may not permit 
     abbreviated plans for a metropolitan area that is in 
     nonattainment for ozone or carbon monoxide under the Clean 
     Air Act (42 U.S.C. 7401 et seq.).
       ``(m) Additional Requirements for Certain Nonattainment 
     Areas.--
       ``(1) In general.--Notwithstanding any other provisions of 
     title 23 or this chapter, Federal funds may not be advanced 
     for transportation management areas classified as 
     nonattainment for ozone or carbon monoxide pursuant to the 
     Clean Air Act (42 U.S.C. 7401 et seq.) for any highway 
     project that will result in a significant increase in 
     carrying capacity for single-occupant vehicles unless the 
     project is addressed through a congestion management process.
       ``(2) Applicability.--This subsection applies to any 
     nonattainment area within the metropolitan planning area 
     boundaries determined under subsection (d).
       ``(n) Limitation on Statutory Construction.--Nothing in 
     this section shall be construed to confer on a metropolitan 
     planning organization the authority to impose legal 
     requirements on any transportation facility, provider, or 
     project that is not eligible under title 23 or this chapter.
       ``(o) Availability of Funds.--Funds set aside under section 
     104(f) of title 23 or section 5308 of this title shall be 
     available to carry out this section.
       ``(p) Continuation of Current Review Practice.--Any 
     decision by the Secretary concerning a plan or program 
     described in this section shall not be considered to be a 
     Federal action subject to review under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).''.

     SEC. 3006. STATEWIDE TRANSPORTATION PLANNING.

       Section 5304 is amended to read as follows:

     ``Sec. 5304. Statewide transportation planning

       ``(a) General Requirements.--
       ``(1) Development of plans and programs.--To support the 
     policies described in section 5301(a), each State shall 
     develop a statewide transportation plan (referred to in this 
     section as a ``Plan'') and a statewide transportation 
     improvement program (referred to in this section as a 
     ``Program'') for all areas of the State subject to section 
     5303.
       ``(2) Contents.--The Plan and the Program developed for 
     each State shall provide for the development and integrated 
     management and operation of transportation systems and 
     facilities (including pedestrian walkways and bicycle 
     transportation facilities) that will function as an 
     intermodal transportation system for the State and an 
     integral part of an intermodal transportation system for the 
     United States.
       ``(3) Process of development.--The process for developing 
     the Plan and the Program shall--
       ``(A) provide for the consideration of all modes of 
     transportation and the policies described in section 5301(a); 
     and
       ``(B) be continuing, cooperative, and comprehensive to the 
     degree appropriate, based on the complexity of the 
     transportation problems to be addressed.
       ``(b) Coordination With Metropolitan Planning; State 
     Implementation Plan.--Each State shall--
       ``(1) coordinate planning under this section with--
       ``(A) the transportation planning activities under section 
     5303 for metropolitan areas of the State; and
       ``(B) other related statewide planning activities, 
     including trade and economic development and related 
     multistate planning efforts; and
       ``(2) develop the transportation portion of the State 
     implementation plan, as required by the Clean Air Act (42 
     U.S.C. 7401 et seq.).
       ``(c) Interstate Agreements.--States may enter into 
     agreements or compacts with other States for cooperative 
     efforts and mutual assistance in support of activities 
     authorized under this section related to interstate areas and 
     localities in the States and establishing authorities the 
     States consider desirable for making the agreements and 
     compacts effective.
       ``(d) Scope of Planning Process.--
       ``(1) In general.--Each State shall carry out a statewide 
     transportation planning process that provides for the 
     consideration of projects, strategies, and implementing 
     projects and services that will--
       ``(A) support the economic vitality of the United States, 
     the States, nonmetropolitan areas, and metropolitan areas, 
     especially by enabling global competitiveness, productivity, 
     and efficiency;
       ``(B) increase the safety of the transportation system for 
     motorized and nonmotorized users;
       ``(C) increase the security of the transportation system 
     for motorized and nonmotorized users;

[[Page 10888]]

       ``(D) increase the accessibility and mobility of people and 
     freight;
       ``(E) protect and enhance the environment (including the 
     protection of habitat, water quality, and agricultural and 
     forest land, while minimizing invasive species), promote 
     energy conservation, promote consistency between 
     transportation improvements and State and local land use 
     planning and economic development patterns, and improve the 
     quality of life (including minimizing adverse health effects 
     from mobile source air pollution and promoting the linkage of 
     the transportation and development goals of the State);
       ``(F) enhance the integration and connectivity of the 
     transportation system, across and between modes throughout 
     the State, for people and freight;
       ``(G) promote efficient system management and operation; 
     and
       ``(H) emphasize the preservation and efficient use of the 
     existing transportation system.
       ``(2) Selection of projects and strategies.--After 
     soliciting and considering any relevant public comments, the 
     State shall determine which of the projects and strategies 
     described in paragraph (1) are most appropriate.
       ``(3) Mitigation activities.--
       ``(A) In general.--A transportation plan under this 
     subsection shall include a discussion of--
       ``(i) types of potential habitat, hydrological, and 
     environmental mitigation activities that may assist in 
     compensating for loss of habitat, wetland, and other 
     environmental functions; and
       ``(ii) potential areas to carry out these activities, 
     including a discussion of areas that may have the greatest 
     potential to restore and maintain the habitat types and 
     hydrological or environmental functions affected by the plan.
       ``(B) Consultation.--The discussion described in 
     subparagraph (A) shall be developed in consultation with 
     Federal and State tribal wildlife, land management, and 
     regulatory agencies.
       ``(4) Failure to consider factors.--The failure to consider 
     any factor described in paragraph (1) shall not be reviewable 
     by any court under title 23, this title, subchapter II of 
     chapter 5 of title 5, or chapter 7 of title 5 in any matter 
     affecting a Plan, a Program, a project or strategy, or the 
     certification of a planning process.
       ``(e) Additional Requirements.--In carrying out planning 
     under this section, each State shall consider--
       ``(1) with respect to nonmetropolitan areas, the concerns 
     of affected local officials with responsibility for 
     transportation;
       ``(2) the concerns of Indian tribal governments and Federal 
     land management agencies that have jurisdiction over land 
     within the boundaries of the State; and
       ``(3) coordination of Plans, Programs, and planning 
     activities with related planning activities being carried out 
     outside of metropolitan planning areas and between States.
       ``(f) Statewide Transportation Plan.--
       ``(1) Development.--Each State shall develop a Plan, with a 
     minimum 20-year forecast period for all areas of the State, 
     that provides for the development and implementation of the 
     intermodal transportation system of the State.
       ``(2) Consultation with governments.--
       ``(A) Metropolitan planning areas.--The Plan shall be 
     developed for each metropolitan planning area in the State in 
     cooperation with the metropolitan planning organization 
     designated for the metropolitan planning area under section 
     5303.
       ``(B) Nonmetropolitan areas.--With respect to 
     nonmetropolitan areas, the statewide transportation plan 
     shall be developed in consultation with affected 
     nonmetropolitan officials with responsibility for 
     transportation. The consultation process shall not require 
     the review or approval of the Secretary.
       ``(C) Indian tribal areas.--With respect to each area of 
     the State under the jurisdiction of an Indian tribal 
     government, the Plan shall be developed in consultation with 
     the tribal government and the Secretary of the Interior.
       ``(D) Consultation, comparison, and consideration.--
       ``(i) In general.--The Plan shall be developed, as 
     appropriate, in consultation with State and local agencies 
     responsible for--

       ``(I) land use management;
       ``(II) natural resources;
       ``(III) environmental protection;
       ``(IV) conservation; and
       ``(V) historic preservation.

       ``(ii) Comparison and consideration.--Consultation under 
     clause (i) shall involve--

       ``(I) comparison of transportation plans to State 
     conservation plans or maps, if available;
       ``(II) comparison of transportation plans to inventories of 
     natural or historic resources, if available; or
       ``(III) consideration of areas where wildlife crossing 
     structures may be needed to ensure connectivity between 
     wildlife habitat linkage areas.

       ``(3) Participation by interested parties.--In developing 
     the Plan, the State shall--
       ``(A) provide citizens, affected public agencies, 
     representatives of public transportation employees, freight 
     shippers, private providers of transportation, 
     representatives of users of public transportation, 
     representatives of users of pedestrian walkways and bicycle 
     transportation facilities, providers of freight 
     transportation services, and other interested parties with a 
     reasonable opportunity to comment on the proposed Plan; and
       ``(B) to the maximum extent practicable--
       ``(i) hold any public meetings at convenient and accessible 
     locations and times;
       ``(ii) employ visualization techniques to describe plans; 
     and
       ``(iii) make public information available in electronically 
     accessible format and means, such as the World Wide Web.
       ``(4) Mitigation activities.--
       ``(A) In general.--A Plan shall include a discussion of--
       ``(i) types of potential habitat, hydrological, and 
     environmental mitigation activities that may assist in 
     compensating for loss of habitat, wetlands, and other 
     environmental functions; and
       ``(ii) potential areas to carry out these activities, 
     including a discussion of areas that may have the greatest 
     potential to restore and maintain the habitat types and 
     hydrological or environmental functions affected by the plan.
       ``(B) Consultation.--The discussion described in 
     subparagraph (A) shall be developed in consultation with 
     Federal and State tribal wildlife, land management, and 
     regulatory agencies.
       ``(5) Transportation strategies.--A Plan shall identify 
     transportation strategies necessary to efficiently serve the 
     mobility needs of people.
       ``(6) Financial plan.--The Plan may include a financial 
     plan that--
       ``(A) demonstrates how the adopted Plan can be implemented;
       ``(B) indicates resources from public and private sources 
     that are reasonably expected to be made available to carry 
     out the Plan;
       ``(C) recommends any additional financing strategies for 
     needed projects and programs; and
       ``(D) may include, for illustrative purposes, additional 
     projects that would be included in the adopted Plan if 
     reasonable additional resources beyond those identified in 
     the financial plan were available.
       ``(7) Selection of projects from illustrative list.--A 
     State shall not be required to select any project from the 
     illustrative list of additional projects described in 
     paragraph (6)(D).
       ``(8) Existing system.--The Plan should include capital, 
     operations and management strategies, investments, 
     procedures, and other measures to ensure the preservation and 
     most efficient use of the existing transportation system.
       ``(9) Publication of long-range transportation plans.--Each 
     Plan prepared by a State shall be published or otherwise made 
     available, including, to the maximum extent practicable, in 
     electronically accessible formats and means, such as the 
     World Wide Web.
       ``(g) Statewide Transportation Improvement Program.--
       ``(1) Development.--Each State shall develop a Program for 
     all areas of the State.
       ``(2) Consultation with governments.--
       ``(A) Metropolitan planning areas.--With respect to each 
     metropolitan planning area in the State, the Program shall be 
     developed in cooperation with the metropolitan planning 
     organization designated for the metropolitan planning area 
     under section 5303.
       ``(B) Nonmetropolitan areas.--With respect to each 
     nonmetropolitan area in the State, the Program shall be 
     developed in consultation with affected nonmetropolitan local 
     officials with responsibility for transportation. The 
     consultation process shall not require the review or approval 
     of the Secretary.
       ``(C) Indian tribal areas.--With respect to each area of 
     the State under the jurisdiction of an Indian tribal 
     government, the Program shall be developed in consultation 
     with the tribal government and the Secretary of the Interior.
       ``(3) Participation by interested parties.--In developing 
     the Program, the State shall provide citizens, affected 
     public agencies, representatives of public transportation 
     employees, freight shippers, private providers of 
     transportation, providers of freight transportation services, 
     representatives of users of public transit, representatives 
     of users of pedestrian walkways and bicycle transportation 
     facilities, and other interested parties with a reasonable 
     opportunity to comment on the proposed Program.
       ``(4) Included projects.--
       ``(A) In general.--A Program developed under this 
     subsection for a State shall include federally supported 
     surface transportation expenditures within the boundaries of 
     the State.
       ``(B) Listing of projects.--
       ``(i) In general.--The Program shall cover a minimum of 4 
     years, identify projects by year, be fiscally constrained by 
     year, and be updated not less than once every 4 years.
       ``(ii) Publication.--An annual listing of projects for 
     which funds have been obligated in the preceding 4 years in 
     each metropolitan planning area shall be published or 
     otherwise made available by the cooperative effort of the 
     State, transit operator, and the metropolitan planning 
     organization for public review. The listing shall be 
     consistent with the funding categories identified in each 
     metropolitan transportation improvement program.
       ``(C) Individual identification.--
       ``(i) Regionally significant projects.--Regionally 
     significant projects proposed for funding under chapter 2 of 
     title 23 shall be identified individually in the 
     transportation improvement program.
       ``(ii) Other projects.--Projects proposed for funding under 
     chapter 2 of title 23 that are not determined to be 
     regionally significant shall be grouped in 1 line item or 
     identified individually.
       ``(D) Consistency with statewide transportation plan.--Each 
     project included in the list described in subparagraph (B) 
     shall be--
       ``(i) consistent with the Plan developed under this section 
     for the State;

[[Page 10889]]

       ``(ii) identical to the project or phase of the project as 
     described in each year of the approved metropolitan 
     transportation improvement program; and
       ``(iii) in conformance with the applicable State air 
     quality implementation plan developed under the Clean Air Act 
     (42 U.S.C. 7401 et seq.), if the project is carried out in an 
     area designated as nonattainment for ozone or carbon monoxide 
     under that Act.
       ``(E) Requirement of anticipated full funding.--The Program 
     shall not include a project, or an identified phase of a 
     project, unless full funding can reasonably be anticipated to 
     be available for the project within the time period 
     contemplated for completion of the project.
       ``(F) Financial plan.--The Program may include a financial 
     plan that--
       ``(i) demonstrates how the approved Program can be 
     implemented;
       ``(ii) indicates resources from public and private sources 
     that are reasonably expected to be made available to carry 
     out the Program;
       ``(iii) recommends any additional financing strategies for 
     needed projects and programs; and
       ``(iv) may include, for illustrative purposes, additional 
     projects that would be included in the adopted transportation 
     plan if reasonable additional resources beyond those 
     identified in the financial plan were available.
       ``(G) Selection of projects from illustrative list.--
       ``(i) No required selection.--Notwithstanding subparagraph 
     (F), a State shall not be required to select any project from 
     the illustrative list of additional projects described in 
     subparagraph (F)(iv).
       ``(ii) Required approval by the secretary.--A State shall 
     not include any project from the illustrative list of 
     additional projects described in subparagraph (F)(iv) in an 
     approved Program without the approval of the Secretary.
       ``(H) Priorities.--The Program shall reflect the priorities 
     for programming and expenditures of funds, including 
     transportation and transit enhancement activities, required 
     by title 23 and this chapter, and transportation control 
     measures included in the State's air quality implementation 
     plan.
       ``(5) Project selection for areas with fewer than 50,000 
     individuals.--
       ``(A) In general.--Each State, in cooperation with the 
     affected nonmetropolitan local officials with responsibility 
     for transportation, shall select projects to be carried out 
     in areas with fewer than 50,000 individuals from the approved 
     Program (excluding projects carried out under the National 
     Highway System, the bridge program, or the interstate 
     maintenance program under title 23 or sections 5310 and 5311 
     of this title).
       ``(B) Certain programs.--Each State, in consultation with 
     the affected nonmetropolitan local officials with 
     responsibility for transportation, shall select, from the 
     approved Program, projects to be carried out in areas with 
     fewer than 50,000 individuals under the National Highway 
     System, the bridge program, or the Interstate maintenance 
     program under title 23 or under sections 5310 and 5311 of 
     this title.
       ``(6) Statewide transportation improvement program 
     approval.--A Program developed under this subsection shall be 
     reviewed and based on a current planning finding approved by 
     the Secretary not less frequently than once every 4 years.
       ``(7) Planning finding.--Not less frequently than once 
     every 4 years, the Secretary shall determine whether the 
     transportation planning process through which Plans and 
     Programs are developed are consistent with this section and 
     section 5303.
       ``(8) Modifications to project priority.--Notwithstanding 
     any other provision of law, a project included in the 
     approved Program may be advanced in place of another project 
     in the program without the approval of the Secretary.
       ``(h) Funding.--Funds set aside pursuant to section 104(i) 
     of title 23 and 5308 of this title shall be available to 
     carry out this section.
       ``(i) Treatment of Certain State Laws as Congestion 
     Management Systems.--For purposes of this section and section 
     5303, State laws, rules, or regulations pertaining to 
     congestion management systems or programs may constitute the 
     congestion management system under section 5303(i)(3) if the 
     Secretary determines that the State laws, rules, or 
     regulations are consistent with, and fulfill the intent of, 
     the purposes of section 5303.
       ``(j) Continuation of Current Review Practice.--Any 
     decision by the Secretary under this section, regarding a 
     metropolitan or statewide transportation plan or the Program, 
     shall not be considered to be a Federal action subject to 
     review under the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.).''.

     SEC. 3007. TRANSPORTATION MANAGEMENT AREAS.

       Section 5305 is repealed.

     SEC. 3008. PRIVATE ENTERPRISE PARTICIPATION.

       Section 5306 is amended--
       (1) in subsection (a)--
       (A) by striking ``5305 of this title'' and inserting 
     ``5308''; and
       (B) by inserting ``, as determined by local policies, 
     criteria, and decision making,'' after ``feasible'';
       (2) in subsection (b) by striking ``5303-5305 of this 
     title'' and inserting ``5303, 5304, and 5308''; and
       (3) by adding at the end the following:
       ``(c) Regulations.--Not later than 1 year after the date of 
     enactment of the Federal Public Transportation Act of 2004, 
     the Secretary shall issue regulations describing how the 
     requirements under this chapter relating to subsection (a) 
     shall be enforced.''.

     SEC. 3009. URBANIZED AREA FORMULA GRANTS.

       (a) Technical Amendments.--Section 5307 is amended--
       (1) by striking subsections (h), (j) and (k); and
       (2) by redesignating subsections (i), (l), (m), and (n) as 
     subsections (h), (i), (j), and (k), respectively.
       (b) Definitions.--Section 5307(a) is amended--
       (1) by amending paragraph (2)(A) to read as follows:
       ``(A) an entity designated, in accordance with the planning 
     process under sections 5303, 5304, and 5306, by the chief 
     executive officer of a State, responsible local officials, 
     and publicly owned operators of public transportation, to 
     receive and apportion amounts under sections 5336 and 5337 
     that are attributable to transportation management areas 
     designated under section 5303; or''; and
       (2) by adding at the end the following:
       ``(3) Subrecipient.--The term `subrecipient' means a State 
     or local governmental authority, a nonprofit organization, or 
     a private operator of public transportation service that may 
     receive a Federal transit program grant indirectly through a 
     recipient, rather than directly from the Federal 
     Government.''.
       (c) General Authority.--Section 5307(b) is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) In general.--The Secretary of Transportation may 
     award grants under this section for--
       ``(A) capital projects, including associated capital 
     maintenance items;
       ``(B) planning, including mobility management;
       ``(C) transit enhancements;
       ``(D) operating costs of equipment and facilities for use 
     in public transportation in an urbanized area with a 
     population of less than 200,000; and
       ``(E) operating costs of equipment and facilities for use 
     in public transportation in a portion or portions of an 
     urbanized area with a population of at least 200,000, but not 
     more than 225,000, if--
       ``(i) the urbanized area includes parts of more than 1 
     State;
       ``(ii) the portion of the urbanized area includes only 1 
     State;
       ``(iii) the population of the portion of the urbanized area 
     is less than 30,000; and
       ``(iv) the grants will not be used to provide public 
     transportation outside of the portion of the urbanized 
     area.'';
       (2) by amending paragraph (2) to read as follows:
       ``(2) Special rule for fiscal years 2004 through 2006--
       ``(A) Increased flexibility.--The Secretary may award 
     grants under this section, from funds made available to carry 
     out this section for each of the fiscal years 2004 through 
     2006, to finance the operating cost of equipment and 
     facilities for use in mass transportation in an urbanized 
     area with a population of at least 200,000, as determined by 
     the 2000 decennial census of population if--
       ``(i) the urbanized area had a population of less than 
     200,000, as determined by the 1990 decennial census of 
     population;
       ``(ii) a portion of the urbanized area was a separate 
     urbanized area with a population of less than 200,000, as 
     determined by the 1990 decennial census of population;
       ``(iii) the area was not designated as an urbanized area, 
     as determined by the 1990 decennial census of population; or
       ``(iv) a portion of the area was not designated as an 
     urbanized area, as determined by the 1990 decennial census, 
     and received assistance under section 5311 in fiscal year 
     2002.
       ``(B) Maximum amounts in fiscal year 2004.--In fiscal year 
     2004--
       ``(i) amounts made available to any urbanized area under 
     clause (i) or (ii) of subparagraph (A) shall be not more than 
     the amount apportioned in fiscal year 2002 to the urbanized 
     area with a population of less than 200,000, as determined in 
     the 1990 decennial census of population;
       ``(ii) amounts made available to any urbanized area under 
     subparagraph (A)(iii) shall be not more than the amount 
     apportioned to the urbanized area under this section for 
     fiscal year 2003; and
       ``(iii) each portion of any area not designated as an 
     urbanized area, as determined by the 1990 decennial census, 
     and eligible to receive funds under subparagraph (A)(iv), 
     shall receive an amount of funds to carry out this section 
     that is not less than the amount the portion of the area 
     received under section 5311 for fiscal year 2002.
       ``(C) Maximum amounts in fiscal year 2005.--In fiscal year 
     2005--
       ``(i) amounts made available to any urbanized area under 
     clause (i) or (ii) of subparagraph (A) shall be not more than 
     50 percent of the amount apportioned in fiscal year 2002 to 
     the urbanized area with a population of less than 200,000, as 
     determined in the 1990 decennial census of population;
       ``(ii) amounts made available to any urbanized area under 
     subparagraph (A)(iii) shall be not more than 50 percent of 
     the amount apportioned to the urbanized area under this 
     section for fiscal year 2003; and
       ``(iii) each portion of any area not designated as an 
     urbanized area, as determined by the 1990 decennial census, 
     and eligible to receive funds under subparagraph (A)(iv), 
     shall receive an

[[Page 10890]]

     amount of funds to carry out this section that is not less 50 
     percent of the amount the portion of the area received under 
     section 5311 for fiscal year 2002.
       ``(D) Maximum amounts in fiscal year 2006.--In fiscal year 
     2006--
       ``(i) amounts made available to any urbanized area under 
     clause (i) or (ii) of subparagraph (A) shall be not more than 
     25 percent of the amount apportioned in fiscal year 2002 to 
     the urbanized area with a population of less than 200,000, as 
     determined in the 1990 decennial census of population;
       ``(ii) amounts made available to any urbanized area under 
     subparagraph (A)(iii) shall be not more than 25 percent of 
     the amount apportioned to the urbanized area under this 
     section for fiscal year 2003; and
       ``(iii) each portion of any area not designated as an 
     urbanized area, as determined by the 1990 decennial census, 
     and eligible to receive funds under subparagraph (A)(iv), 
     shall receive an amount of funds to carry out this section 
     that is not less than 25 percent of the amount the portion of 
     the area received under section 5311 in fiscal year 2002.''; 
     and
       (3) by striking paragraph (4).
       (d) Public Participation Requirements.--Section 5307(c)(5) 
     is amended by striking ``section 5336'' and inserting 
     ``sections 5336 and 5337''.
       (e) Grant Recipient Requirements.--Section 5307(d)(1) is 
     amended--
       (1) in subparagraph (A), by inserting ``, including safety 
     and security aspects of the program'' after ``program'';
       (2) in subparagraph (E), by striking ``section'' and all 
     that follows and inserting ``section, the recipient will 
     comply with sections 5323 and 5325;'';
       (3) in subparagraph (H), by striking ``sections 5301(a) and 
     (d), 5303-5306, and 5310(a)-(d) of this title'' and inserting 
     ``subsections (a) and (d) of section 5301 and sections 5303 
     through 5306'';
       (4) in subparagraph (I) by striking ``and'' at the end;
       (5) in subparagraph (J), by striking the period at the end 
     and inserting ``; and''; and
       (6) by adding at the end the following:
       ``(K) if located in an urbanized area with a population of 
     at least 200,000, will expend not less than 1 percent of the 
     amount the recipient receives each fiscal year under this 
     section for transit enhancement activities described in 
     section 5302(a)(15).''.
       (f) Government's Share of Costs.--Section 5307(e) is 
     amended--
       (1) by striking the first sentence and inserting the 
     following:
       ``(1) Capital projects.--A grant for a capital project 
     under this section shall cover 80 percent of the net project 
     cost.'';
       (2) by striking ``A grant for operating expenses'' and 
     inserting the following:
       ``(2) Operating expenses.--A grant for operating 
     expenses'';
       (3) by striking the fourth sentence and inserting the 
     following:
       ``(3) Remaining costs.--The remainder of the net project 
     cost shall be provided in cash from non-Federal sources or 
     revenues derived from the sale of advertising and concessions 
     and amounts received under a service agreement with a State 
     or local social service agency or a private social service 
     organization.''; and
       (4) by adding at the end the following: ``The prohibitions 
     on the use of funds for matching requirements under section 
     403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C. 
     603(a)(5)(C)(vii)) shall not apply to the remainder.''.
       (g) Undertaking Projects in Advance.--Section 5307(g) is 
     amended by striking paragraph (4).
       (h) Relationship to Other Laws.--Section 5307(k), as 
     redesignated, is amended to read as follows:
       ``(k) Relationship to Other Laws.--
       ``(1) Applicable provisions.--Sections 5301, 5302, 5303, 
     5304, 5306, 5315(c), 5318, 5319, 5323, 5325, 5327, 5329, 
     5330, 5331, 5332, 5333 and 5335 apply to this section and to 
     any grant made under this section.
       ``(2) Inapplicable provisions.--
       ``(A) In general.--Except as provided under this section, 
     no other provision of this chapter applies to this section or 
     to a grant made under this section.
       ``(B) Title 5.--The provision of assistance under this 
     chapter shall not be construed as bringing within the 
     application of chapter 15 of title 5, any nonsupervisory 
     employee of a public transportation system (or any other 
     agency or entity performing related functions) to which such 
     chapter is otherwise inapplicable.''.

     SEC. 3010. PLANNING PROGRAMS.

       (a) In General.--Section 5308 is amended to read as 
     follows:

     ``Sec. 5308. Planning programs

       ``(a) Grants Authorized.--Under criteria established by the 
     Secretary, the Secretary may award grants to States, 
     authorities of the States, metropolitan planning 
     organizations, and local governmental authorities, make 
     agreements with other departments, agencies, or 
     instrumentalities of the Government, or enter into contracts 
     with private nonprofit or for-profit entities to--
       ``(1) develop transportation plans and programs;
       ``(2) plan, engineer, design, and evaluate a public 
     transportation project; or
       ``(3) conduct technical studies relating to public 
     transportation, including--
       ``(A) studies related to management, planning, operations, 
     capital requirements, and economic feasibility;
       ``(B) evaluations of previously financed projects;
       ``(C) peer reviews and exchanges of technical data, 
     information, assistance, and related activities in support of 
     planning and environmental analyses among metropolitan 
     planning organizations and other transportation planners; and
       ``(D) other similar and related activities preliminary to, 
     and in preparation for, constructing, acquiring, or improving 
     the operation of facilities and equipment.
       ``(b) Purpose.--To the extent practicable, the Secretary 
     shall ensure that amounts appropriated pursuant to section 
     5338 to carry out this section and sections 5303, 5304, and 
     5306 are used to support balanced and comprehensive 
     transportation planning that considers the relationships 
     among land use and all transportation modes, without regard 
     to the programmatic source of the planning amounts.
       ``(c) Metropolitan Planning Program.--
       ``(1) Allocations to States.--
       ``(A) In general.--The Secretary shall allocate 80 percent 
     of the amount made available under subsection (g)(3)(A) to 
     States to carry out sections 5303 and 5306 in a ratio equal 
     to the population in urbanized areas in each State, divided 
     by the total population in urbanized areas in all States, as 
     shown by the latest available decennial census of population.
       ``(B) Minimum allocation.--Each State shall receive not 
     less than 0.5 percent of the total amount allocated under 
     this paragraph.
       ``(2) Availability of funds.--A State receiving an 
     allocation under paragraph (1) shall promptly distribute such 
     funds to metropolitan planning organizations in the State 
     under a formula--
       ``(A) developed by the State in cooperation with the 
     metropolitan planning organizations;
       ``(B) approved by the Secretary of Transportation;
       ``(C) that considers population in urbanized areas; and
       ``(D) that provides an appropriate distribution for 
     urbanized areas to carry out the cooperative processes 
     described in this section.
       ``(3) Supplemental allocations.--
       ``(A) In general.--The Secretary shall allocate 20 percent 
     of the amount made available under subsection (g)(3)(A) to 
     States to supplement allocations made under paragraph (1) for 
     metropolitan planning organizations.
       ``(B) Allocation formula.--Amounts under this paragraph 
     shall be allocated under a formula that reflects the 
     additional cost of carrying out planning, programming, and 
     project selection responsibilities in complex metropolitan 
     planning areas under sections 5303, 5304, and 5306.
       ``(d) State Planning and Research Program.--
       ``(1) In general.--The Secretary shall allocate amounts 
     made available pursuant to subsection (g)(3)(B) to States for 
     grants and contracts to carry out sections 5304, 5306, 5315, 
     and 5322 so that each State receives an amount equal to the 
     ratio of the population in urbanized areas in that State, 
     divided by the total population in urbanized areas in all 
     States, as shown by the latest available decennial census.
       ``(2) Minimum allocation.--Each State shall receive not 
     less than 0.5 percent of the amount allocated under this 
     subsection.
       ``(3) Reallocation.--A State may authorize part of the 
     amount made available under this subsection to be used to 
     supplement amounts available under subsection (c).
       ``(e) Planning Capacity Building Program.--
       ``(1) Establishment.--The Secretary shall establish a 
     Planning Capacity Building Program (referred to in this 
     subsection as the ``Program'') to support and fund innovative 
     practices and enhancements in transportation planning.
       ``(2) Purpose.--The purpose of the Program shall be to 
     promote activities that support and strengthen the planning 
     processes required under this section and sections 5303 and 
     5304.
       ``(3) Administration.--The Program shall be administered by 
     the Federal Transit Administration in cooperation with the 
     Federal Highway Administration.
       ``(4) Use of funds.--
       ``(A) In general.--Appropriations authorized under 
     subsection (g)(1) to carry out this subsection may be used--
       ``(i) to provide incentive grants to States, metropolitan 
     planning organizations, and public transportation operators; 
     and
       ``(ii) to conduct research, disseminate information, and 
     provide technical assistance.
       ``(B) Grants, contracts, cooperative agreements.--In 
     carrying out the activities described in subparagraph (A), 
     the Secretary may--
       ``(i) expend appropriated funds directly; or
       ``(ii) award grants to, or enter into contracts, 
     cooperative agreements, and other transactions with, a 
     Federal agency, State agency, local governmental authority, 
     association, nonprofit or for-profit entity, or institution 
     of higher education.
       ``(f) Government's Share of Costs.--Amounts made available 
     to carry out subsections (c), (d), and (e) may not exceed 80 
     percent of the costs of the activity unless the Secretary of 
     Transportation determines that it is in the interest of the 
     Government not to require State or local matching funds.
       ``(g) Allocation of Funds.--Of the amounts made available 
     under section 5338(b)(2)(B) for fiscal year 2005 and each 
     fiscal year thereafter to carry out this section--

[[Page 10891]]

       ``(1) $5,000,000 shall be allocated for the Planning 
     Capacity Building Program established under subsection (e);
       ``(2) $20,000,000 shall be allocated for grants under 
     subsection (a)(2) for alternatives analyses required by 
     section 5309(e)(2)(A); and
       ``(3) of the remaining amount--
       ``(A) 82.72 percent shall be allocated for the metropolitan 
     planning program described in subsection (d); and
       ``(B) 17.28 percent shall be allocated to carry out 
     subsection (b).
       ``(h) Reallocations.--Any amount allocated under this 
     section that has not been used 3 years after the end of the 
     fiscal year in which the amount was allocated shall be 
     reallocated among the States.''.
       (b) Conforming Amendment.--The item relating to section 
     5308 in the table of sections for chapter 53 is amended to 
     read as follows:

``5308. Planning programs.''.

     SEC. 3011. CAPITAL INVESTMENT PROGRAM.

       (a) Section Heading.--The section heading of section 5309 
     is amended to read as follows:

     ``Sec. 5309. Capital investment grants''.

       (b) General Authority.--Section 5309(a) is amended--
       (1) in paragraph (1)--
       (A) by striking ``(1) The Secretary of Transportation may 
     make grants and loans'' and inserting the following:
       ``(1) Grants authorized.--The Secretary may award grants'';
       (B) in subparagraph (A), by striking ``alternatives 
     analysis related to the development of systems,'';
       (C) by striking subparagraphs (B), (C), (D), and (G);
       (D) by redesignating subparagraphs (E), (F), and (H) as 
     subparagraphs (B), (C), and (D), respectively;
       (E) in subparagraph (C), as redesignated, by striking the 
     semicolon at the end and inserting ``, including programs of 
     bus and bus-related projects for assistance to subrecipients 
     which are public agencies, private companies engaged in 
     public transportation, or private nonprofit organizations; 
     and''; and
       (F) in subparagraph (D), as redesignated--
       (i) by striking ``to support fixed guideway systems''; and
       (ii) by striking ``dedicated bus and high occupancy 
     vehicle'';
       (2) by amending paragraph (2) to read as follows:
       ``(2) Grantee requirements.--
       ``(A) Grantee in urbanized area.--The Secretary shall 
     require that any grants awarded under this section to a 
     recipient or subrecipient located in an urbanized area shall 
     be subject to all terms, conditions, requirements, and 
     provisions that the Secretary determines to be necessary or 
     appropriate for the purposes of this section, including 
     requirements for the disposition of net increases in the 
     value of real property resulting from the project assisted 
     under this section.
       ``(B) Grantee not in urbanized area.--The Secretary shall 
     require that any grants awarded under this section to a 
     recipient or subrecipient not located in an urbanized area 
     shall be subject to the same terms, conditions, requirements, 
     and provisions as a recipient or subrecipient of assistance 
     under section 5311.
       ``(C) Subrecipient.--The Secretary shall require that any 
     private, nonprofit organization that is a subrecipient of a 
     grant awarded under this section shall be subject to the same 
     terms, conditions, requirements, and provisions as a 
     subrecipient of assistance under section 5310.
       ``(D) Statewide transit provider grantees.--A statewide 
     transit provider that receives a grant under this section 
     shall be subject to the terms, conditions, requirements, and 
     provisions of this section or section 5311, consistent with 
     the scope and purpose of the grant and the location of the 
     project.''; and
       (3) by adding at the end the following:
       ``(3) Certification.--An applicant that has submitted the 
     certifications required under subparagraphs (A), (B), (C), 
     and (H) of section 5307(d)(1) shall be deemed to have 
     provided sufficient information upon which the Secretary may 
     make the findings required under this subsection.''.
       (c) Defined Term.--Section 5309(b) is amended to read as 
     follows:
       ``(b) Defined Term.--As used in this section, the term 
     `alternatives analysis' means a study conducted as part of 
     the transportation planning process required under sections 
     5303 and 5304, which includes--
       ``(1) an assessment of a wide range of public 
     transportation alternatives designed to address a 
     transportation problem in a corridor or subarea;
       ``(2) sufficient information to enable the Secretary to 
     make the findings of project justification and local 
     financial commitment required under this section;
       ``(3) the selection of a locally preferred alternative; and
       ``(4) the adoption of the locally preferred alternative as 
     part of the long-range transportation plan required under 
     section 5303.''.
       (d) Grant Requirements.--Section 5309(d) is amended to read 
     as follows:
       ``(d) Grant Requirements.--The Secretary may not approve a 
     grant for a project under this section unless the Secretary 
     determines that--
       ``(1) the project is part of an approved transportation 
     plan and program of projects required under sections 5303, 
     5304, and 5306; and
       ``(2) the applicant has, or will have--
       ``(A) the legal, financial, and technical capacity to carry 
     out the project, including safety and security aspects of the 
     project;
       ``(B) satisfactory continuing control over the use of the 
     equipment or facilities; and
       ``(C) the capability and willingness to maintain the 
     equipment or facilities.''.
       (e) Major Capital Investment Projects of $75,000,000 or 
     More.--Section 5309(e) is amended to read as follows:
       ``(e) Major Capital Investment Projects of $75,000,000 or 
     More.--
       ``(1) Full funding grant agreement.--The Secretary shall 
     enter into a full funding grant agreement, based on the 
     evaluations and ratings required under this subsection, with 
     each grantee receiving not less than $75,000,000 under this 
     subsection for a new fixed guideway capital project that--
       ``(A) is authorized for final design and construction; and
       ``(B) has been rated as medium, medium-high, or high, in 
     accordance with paragraph (5)(B).
       ``(2) Determinations.--The Secretary may not award a grant 
     under this subsection for a new fixed guideway capital 
     project unless the Secretary determines that the proposed 
     project is--
       ``(A) based on the results of an alternatives analysis and 
     preliminary engineering;
       ``(B) justified based on a comprehensive review of its 
     mobility improvements, environmental benefits, cost-
     effectiveness, operating efficiencies, economic development 
     effects, and public transportation supportive land use 
     patterns and policies; and
       ``(C) supported by an acceptable degree of local financial 
     commitment, including evidence of stable and dependable 
     financing sources to construct the project, and maintain and 
     operate the entire public transportation system, while 
     ensuring that the extent and quality of existing public 
     transportation services are not degraded.
       ``(3) Evaluation of project justification.--In making the 
     determinations under paragraph (2)(B) for a major capital 
     investment grant, the Secretary shall analyze, evaluate, and 
     consider--
       ``(A) the results of the alternatives analysis and 
     preliminary engineering for the proposed project;
       ``(B) the reliability of the forecasts of costs and 
     utilization made by the recipient and the contractors to the 
     recipient;
       ``(C) the direct and indirect costs of relevant 
     alternatives;
       ``(D) factors such as--
       ``(i) congestion relief;
       ``(ii) improved mobility;
       ``(iii) air pollution;
       ``(iv) noise pollution;
       ``(v) energy consumption; and
       ``(vi) all associated ancillary and mitigation costs 
     necessary to carry out each alternative analyzed;
       ``(E) reductions in local infrastructure costs achieved 
     through compact land use development and positive impacts on 
     the capacity, utilization, or longevity of other surface 
     transportation assets and facilities;
       ``(F) the cost of suburban sprawl;
       ``(G) the degree to which the project increases the 
     mobility of the public transportation dependent population or 
     promotes economic development;
       ``(H) population density and current transit ridership in 
     the transportation corridor;
       ``(I) the technical capability of the grant recipient to 
     construct the project;
       ``(J) any adjustment to the project justification necessary 
     to reflect differences in local land, construction, and 
     operating costs; and
       ``(K) other factors that the Secretary determines to be 
     appropriate to carry out this chapter.
       ``(4) Evaluation of local financial commitment.--
       ``(A) In general.--In evaluating a project under paragraph 
     (2)(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 local source of capital and operating 
     financing is stable, reliable, and available within the 
     proposed project timetable; and
       ``(iii) local resources are available to recapitalize and 
     operate the overall proposed public transportation system, 
     including essential feeder bus and other services necessary 
     to achieve the projected ridership levels, while ensuring 
     that the extent and quality of existing public transportation 
     services are not degraded.
       ``(B) Evaluation criteria.--In assessing the stability, 
     reliability, and availability of proposed sources of local 
     financing under paragraph (2)(C), the Secretary shall 
     consider--
       ``(i) the reliability of the forecasts of costs and 
     utilization made by the recipient and the contractors to the 
     recipient;
       ``(ii) existing grant commitments;
       ``(iii) the degree to which financing sources are dedicated 
     to the proposed purposes;
       ``(iv) any debt obligation that exists, or is proposed by 
     the recipient, for the proposed project or other public 
     transportation purpose; and
       ``(v) the extent to which the project has a local financial 
     commitment that exceeds the required non-Federal share of the 
     cost of the project, provided that if the Secretary gives 
     priority to financing projects that include more than the 
     non-Federal share required under subsection (h), the 
     Secretary shall give equal consideration to differences in 
     the fiscal capacity of State and local governments.

[[Page 10892]]

       ``(5) Project advancement and ratings.--
       ``(A) Project advancement.--A proposed project under this 
     subsection shall not advance from alternatives analysis to 
     preliminary engineering or from preliminary engineering to 
     final design and construction unless the Secretary determines 
     that the project meets the requirements of this section and 
     there is a reasonable likelihood that the project will 
     continue to meet such requirements.
       ``(B) Ratings.--In making a determination under 
     subparagraph (A), the Secretary shall evaluate and rate the 
     project on a 5-point scale (high, medium-high, medium, 
     medium-low, or low) based on the results of the 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 by 
     regulation.
       ``(6) Applicability.--This subsection shall not apply to 
     projects for which the Secretary has issued a letter of 
     intent or entered into a full funding grant agreement before 
     the date of enactment of the Federal Public Transportation 
     Act of 2004.
       ``(7) Rulemaking.--Not later than 240 days after the date 
     of enactment of the Federal Public Transportation Act of 
     2004, the Secretary shall issue regulations on the manner by 
     which the Secretary shall evaluate and rate projects based on 
     the results of alternatives analysis, project justification, 
     and local financial commitment, in accordance with this 
     subsection.
       ``(8) Policy guidance.--
       ``(A) Publication.--The Secretary shall publish policy 
     guidance regarding the new starts project review and 
     evaluation process--
       ``(i) not later than 120 days after the date of enactment 
     of the Federal Public Transportation Act of 2004; and
       ``(ii) each time significant changes are made by the 
     Secretary to the new starts project review and evaluation 
     process and criteria, but not less frequently than once every 
     2 years.
       ``(B) Public comment and response.--The Secretary shall--
       ``(i) invite public comment to the policy guidance 
     published under subparagraph (A); and
       ``(ii) publish a response to the comments received under 
     clause (i).''.
       (f) Major Capital Investment Projects of Less Than 
     $75,000,000.-- Section 5309(f) is amended to read as follows:
       ``(f) Major Capital Investment Projects of Less Than 
     $75,000,000.--
       ``(1) Project construction grant agreement.--
       ``(A) In general.--The Secretary shall enter into a project 
     construction grant agreement, based on evaluations and 
     ratings required under this subsection, with each grantee 
     receiving less than $75,000,000 under this subsection for a 
     new fixed guideway or corridor improvement capital project 
     that--
       ``(i) is authorized by law; and
       ``(ii) has been rated as medium, medium-high, or high, in 
     accordance with paragraph (3)(B).
       ``(B) Contents.--
       ``(i) In general.--An agreement under this paragraph shall 
     specify--

       ``(I) the scope of the project to be constructed;
       ``(II) the estimated net cost of the project;
       ``(III) the schedule under which the project shall be 
     constructed;
       ``(IV) the maximum amount of funding to be obtained under 
     this subsection;
       ``(V) the proposed schedule for obligation of future 
     Federal grants; and
       ``(VI) the sources of non-Federal funding.

       ``(ii) Additional funding.--The agreement may include a 
     commitment on the part of the Secretary to provide funding 
     for the project in future fiscal years.
       ``(C) Full funding grant agreement.--An agreement under 
     this paragraph shall be considered a full funding grant 
     agreement for the purposes of subsection (g).
       ``(2) Selection process.--
       ``(A) Selection criteria.--The Secretary may not award a 
     grant under this subsection for a proposed project unless the 
     Secretary determines that the project is--
       ``(i) based on the results of planning and alternatives 
     analysis;
       ``(ii) justified based on a review of its public 
     transportation supportive land use policies, cost 
     effectiveness, and effect on local economic development; and
       ``(iii) supported by an acceptable degree of local 
     financial commitment.
       ``(B) Planning and alternatives.--In evaluating a project 
     under subparagraph (A)(i), the Secretary shall analyze and 
     consider the results of planning and alternatives analysis 
     for the project.
       ``(C) Project justification.--In making the determinations 
     under subparagraph (A)(ii), the Secretary shall--
       ``(i) determine the degree to which local land use policies 
     are supportive of the public transportation project and the 
     degree to which the project is likely to achieve local 
     developmental goals;
       ``(ii) determine the cost effectiveness of the project at 
     the time of the initiation of revenue service;
       ``(iii) determine the degree to which the project will have 
     a positive effect on local economic development;
       ``(iv) consider the reliability of the forecasts of costs 
     and ridership associated with the project; and
       ``(v) consider other factors that the Secretary determines 
     to be appropriate to carry out this subsection.
       ``(D) Local financial commitment.--For purposes of 
     subparagraph (A)(iii), the Secretary shall require that each 
     proposed local source of capital and operating financing is 
     stable, reliable, and available within the proposed project 
     timetable.
       ``(3) Advancement of project to development and 
     construction.--
       ``(A) In general.--A proposed project under this subsection 
     may not advance from the planning and alternatives analysis 
     stage to project development and construction unless--
       ``(i) the Secretary finds that the project meets the 
     requirements of this subsection and there is a reasonable 
     likelihood that the project will continue to meet such 
     requirements; and
       ``(ii) the metropolitan planning organization has adopted 
     the locally preferred alternative for the project into the 
     long-range transportation plan.
       ``(B) Evaluation.--In making the findings under 
     subparagraph (A), the Secretary shall evaluate and rate the 
     project as high, medium-high, medium, medium-low, or low, 
     based on the results of the analysis of the project 
     justification criteria and the degree of local financial 
     commitment, as required under this subsection.
       ``(4) Impact report.--
       ``(A) In general.--Not later than 240 days after the date 
     of enactment of the Federal Public Transportation Act of 
     2004, the Federal Transit Administration shall submit a 
     report on the methodology to be used in evaluating the land 
     use and economic development impacts of non-fixed guideway or 
     partial fixed guideway projects to--
       ``(i) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate; and
       ``(ii) the Committee on Transportation and Infrastructure 
     of the House of Representatives.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall address any qualitative and quantitative 
     differences between fixed guideway and non-fixed guideway 
     projects with respect to land use and economic development 
     impacts.
       ``(5) Regulations.--Not later than 120 days after the date 
     of enactment of the Federal Public Transportation Act of 
     2004, the Secretary shall issue regulations establishing an 
     evaluation and rating process for proposed projects under 
     this subsection that is based on the results of project 
     justification and local financial commitment, as required 
     under this subsection.''.
       (g) Full Funding Grant Agreements.--Section 5309(g)(2) is 
     amended by adding at the end the following:
       ``(C) Before and after study.--
       ``(i) In general.--Each full funding grant agreement shall 
     require the applicant to conduct a study that--
       ``(I) describes and analyzes the impacts of the new start 
     project on transit services and transit ridership;
       ``(II) evaluates the consistency of predicted and actual 
     project characteristics and performance; and
       ``(III) identifies sources of differences between predicted 
     and actual outcomes.
       ``(ii) Information collection and analysis plan.--
       ``(I) Submission of plan.--Applicants seeking a full 
     funding grant agreement shall submit a complete plan for the 
     collection and analysis of information to identify the 
     impacts of the new start project and the accuracy of the 
     forecasts prepared during the development of the project. 
     Preparation of this plan shall be included in the full 
     funding grant agreement as an eligible activity.
       ``(II) Contents of plan.--The plan submitted under 
     subclause (I) shall provide for--
       ``(aa) the collection of data on the current transit system 
     regarding transit service levels and ridership patterns, 
     including origins and destinations, access modes, trip 
     purposes, and rider characteristics;
       ``(bb) documentation of the predicted scope, service 
     levels, capital costs, operating costs, and ridership of the 
     project;
       ``(cc) collection of data on the transit system 2 years 
     after the opening of the new start project, including 
     analogous information on transit service levels and ridership 
     patterns and information on the as-built scope and capital 
     costs of the new start project; and
       ``(dd) analysis of the consistency of predicted project 
     characteristics with the after data.
       ``(D) Collection of data on current system.--To be eligible 
     for a full funding grant agreement, recipients shall have 
     collected data on the current system, according to the plan 
     required, before the beginning of construction of the 
     proposed new start project. Collection of this data shall be 
     included in the full funding grant agreement as an eligible 
     activity.
       ``(E) Public private partnership pilot program.--
       ``(i) Authorization.--The Secretary may establish a pilot 
     program to demonstrate the advantages of public-private 
     partnerships for certain fixed guideway systems development 
     projects.
       ``(ii) Identification of qualified projects.--The Secretary 
     shall identify qualified public-private partnership projects 
     as permitted by applicable State and local enabling laws and 
     work with project sponsors to enhance project delivery and 
     reduce overall costs.''.
       (h) Federal Share of Net Project Cost.--Section 5309(h) is 
     amended to read as follows:
       ``(h) Federal Share of Adjusted Net Project Cost.--

[[Page 10893]]

       ``(1) In general.--The Secretary shall estimate the net 
     project cost based on engineering studies, studies of 
     economic feasibility, and information on the expected use of 
     equipment or facilities.
       ``(2) Adjustment for completion under budget.--The 
     Secretary may adjust the final net project cost of a major 
     capital investment project evaluated under subsections (e) 
     and (f) to include the cost of eligible activities not 
     included in the originally defined project if the Secretary 
     determines that the originally defined project has been 
     completed at a cost that is significantly below the original 
     estimate.
       ``(3) Maximum federal share.--
       ``(A) In general.--A grant for the project shall be for 80 
     percent of the net project cost, or the net project cost as 
     adjusted under paragraph (2), unless the grant recipient 
     requests a lower grant percentage.
       ``(B) Exceptions.--The Secretary may provide a higher grant 
     percentage than requested by the grant recipient if--
       ``(i) the Secretary determines that the net project cost of 
     the project is not more than 10 percent higher than the net 
     project cost estimated at the time the project was approved 
     for advancement into preliminary engineering; and
       ``(ii) the ridership estimated for the project is not less 
     than 90 percent of the ridership estimated for the project at 
     the time the project was approved for advancement into 
     preliminary engineering.
       ``(4) Other sources.--The costs not funded by a grant under 
     this section may be funded from--
       ``(A) an undistributed cash surplus;
       ``(B) a replacement or depreciation cash fund or reserve; 
     or
       ``(C) new capital, including any Federal funds that are 
     eligible to be expended for transportation.
       ``(5) Planned extension to fixed guideway system.--In 
     addition to amounts allowed under paragraph (1), a planned 
     extension to a fixed guideway system may include the cost of 
     rolling stock previously purchased if the Secretary 
     determines that only non-Federal funds were used and that the 
     purchase was made for use on the extension. A refund or 
     reduction of the costs not funded by a grant under this 
     section may be made only if a refund of a proportional amount 
     of the grant is made at the same time.
       ``(6) Exception.--The prohibitions on the use of funds for 
     matching requirements under section 403(a)(5)(C)(vii) of the 
     Social Security Act (42 U.S.C. 603(a)(5)(C)(vii)) shall not 
     apply to amounts allowed under paragraph (4).''.
       (i) Loan Provisions and Fiscal Capacity Considerations.--
     Section 5309 is amended--
       (1) by striking subsections (i), (j), (k), and (l);
       (2) by redesignating subsections (m) and (n) as subsections 
     (i) and (j), respectively;
       (3) by striking subsection (o) (as added by section 3009(i) 
     of the Federal Transit Act of 1998); and
       (4) by redesignating subsections (o) and (p) as subsections 
     (k) and (l), respectively.
       (j) Allocating Amounts.--Section 5309(i), as redesignated, 
     is amended to read as follows:
       ``(i) Allocating Amounts.--
       ``(1) Fiscal year 2004.--Of the amounts made available or 
     appropriated for fiscal year 2004 under section 5338(a)(3)--
       ``(A) $1,315,983,615 shall be allocated for projects of not 
     less than $75,000,000 for major capital projects for new 
     fixed guideway systems and extensions of such systems under 
     subsection (e) and projects for new fixed guideway or 
     corridor improvement capital projects under subsection (f);
       ``(B) $1,199,387,615 shall be allocated for capital 
     projects for fixed guideway modernization; and
       ``(C) $603,617,520 shall be allocated for capital projects 
     for buses and bus-related equipment and facilities.
       ``(2) In general.--Of the amounts made available or 
     appropriated for fiscal year 2005 and each fiscal year 
     thereafter for grants under this section pursuant to 
     subsections (b)(4) and (c) of section 5338--
       ``(A) the amounts appropriated under section 5338(c) shall 
     be allocated for major capital projects for--
       ``(i) new fixed guideway systems and extensions of not less 
     than $75,000,000, in accordance with subsection (e); and
       ``(ii) projects for new fixed guideway or corridor 
     improvement capital projects, in accordance with subsection 
     (f); and
       ``(B) the amounts made available under section 5338(b)(4) 
     shall be allocated for capital projects for buses and bus-
     related equipment and facilities.
       ``(3) Fixed guideway modernization.--The amounts made 
     available for fixed guideway modernization under section 
     5338(b)(2)(K) for fiscal year 2005 and each fiscal year 
     thereafter shall be allocated in accordance with section 
     5337.
       ``(4) Preliminary engineering.--Not more that 8 percent of 
     the allocation described in paragraphs (1)(A) and (2)(A) may 
     be expended on preliminary engineering.
       ``(5) Funding for ferry boats.--Of the amounts described in 
     paragraphs (1)(A) and (2)(A), $10,400,000 shall be available 
     in each of the fiscal years 2004 through 2009 for capital 
     projects in Alaska and Hawaii for new fixed guideway systems 
     and extension projects utilizing ferry boats, ferry boat 
     terminals, or approaches to ferry boat terminals.
       ``(6) Bus and bus facility grants.--
       ``(A) Considerations.--In making grants under paragraphs 
     (1)(C) and (2)(B), the Secretary shall consider the age and 
     condition of buses, bus fleets, related equipment, and bus-
     related facilities.
       ``(B) Projects not in urbanized areas.--Of the amounts made 
     available under paragraphs (1)(C) and (2)(B), not less than 
     5.5 percent shall be available in each fiscal year for 
     projects that are not in urbanized areas.
       ``(C) Intermodal terminals.--Of the amounts made available 
     under paragraphs (1)(C) and (2)(B), not less than $75,000,000 
     shall be available in each fiscal year for intermodal 
     terminal projects, including the intercity bus portion of 
     such projects.''.
       (k) Reports.--Section 5309 is amended by inserting at the 
     end the following:
       ``(m) Reports.--
       ``(1) Annual report on funding recommendations.--
       ``(A) In general.--Not later than the first Monday of 
     February of each year, the Secretary shall submit a report on 
     funding recommendations to--
       ``(i) the Committee on Transportation and Infrastructure of 
     the House of Representatives;
       ``(ii) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate;
       ``(iii) the Subcommittee on Transportation of the Committee 
     on Appropriations of the House of Representatives; and
       ``(iv) the Subcommittee on Transportation of the Committee 
     on Appropriations of the Senate.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall contain--
       ``(i) a proposal on the allocation of amounts to finance 
     grants for capital investment projects among grant 
     applicants;
       ``(ii) a recommendation of projects to be funded based on--

       ``(I) the evaluations and ratings determined under 
     subsection (e) and (f); and
       ``(II) existing commitments and anticipated funding levels 
     for the subsequent 3 fiscal years; and

       ``(iii) detailed ratings and evaluations on each project 
     recommended for funding.
       ``(2) Triennial reports on project ratings.--
       ``(A) In general.--Not later than the first Monday of 
     February, the first Monday of June, and the first Monday of 
     October of each year, the Secretary shall submit a report on 
     project ratings to--
       ``(i) the Committee on Transportation and Infrastructure of 
     the House of Representatives;
       ``(ii) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate;
       ``(iii) the Subcommittee on Transportation of the Committee 
     on Appropriations of the House of Representatives; and
       ``(iv) the Subcommittee on Transportation of the Committee 
     on Appropriations of the Senate.
       ``(B) Contents.--Each report submitted under subparagraph 
     (A) shall contain--
       ``(i) a summary of the ratings of all capital investment 
     projects for which funding was requested under this section;
       ``(ii) detailed ratings and evaluations on the project of 
     each applicant that had significant changes to the finance or 
     project proposal or has completed alternatives analysis or 
     preliminary engineering since the date of the latest report; 
     and
       ``(iii) all relevant information supporting the evaluation 
     and rating of each updated project, including a summary of 
     the financial plan of each updated project.
       ``(3) Before and after study reports.--Not later than the 
     first Monday of August of each year, the Secretary shall 
     submit a report containing a summary of the results of the 
     studies conducted under subsection (g)(2) to--
       ``(A) the Committee on Transportation and Infrastructure of 
     the House of Representatives;
       ``(B) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate;
       ``(C) the Subcommittee on Transportation of the Committee 
     on Appropriations of the House of Representatives; and
       ``(D) the Subcommittee on Transportation of the Committee 
     on Appropriations of the Senate.
       ``(4) Contractor performance assessment report.--
       ``(A) In general.--Not later than 180 days after the 
     enactment of the Federal Public Transportation Act of 2004, 
     and each year thereafter, the Secretary shall submit a report 
     analyzing the consistency and accuracy of cost and ridership 
     estimates made by each contractor to public transportation 
     agencies developing major investment projects to the 
     committees and subcommittees listed under paragraph (3).
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall compare the cost and ridership estimates made at 
     the time projects are approved for entrance into preliminary 
     engineering with--
       ``(i) estimates made at the time projects are approved for 
     entrance into final design;
       ``(ii) costs and ridership when the project commences 
     revenue operation; and
       ``(iii) costs and ridership when the project has been in 
     operation for 2 years.
       ``(5) Annual general accounting office review.--
       ``(A) Review.--The Comptroller General of the United States 
     shall conduct an annual review of the processes and 
     procedures for evaluating and rating projects and 
     recommending projects and the Secretary's implementation of 
     such processes and procedures.
       ``(B) Report.--Not later than 90 days after the submission 
     of each report required under paragraph (1), the Comptroller 
     General shall submit a report to Congress that summarizes the 
     results of the review conducted under subparagraph (A).
       ``(6) Contractor performance incentive report.--Not later 
     than 180 days after the enactment of the Federal Public 
     Transportation Act

[[Page 10894]]

     of 2004, the Secretary shall submit a report to the 
     committees and subcommittees listed under paragraph (3) on 
     the suitability of allowing contractors to public 
     transportation agencies that undertake major capital 
     investments under this section to receive performance 
     incentive awards if a project is completed for less than the 
     original estimated cost.''.

     SEC. 3012. NEW FREEDOM FOR ELDERLY PERSONS AND PERSONS WITH 
                   DISABILITIES.

       (a) In General.--Section 5310 is amended to read as 
     follows:

     ``Sec. 5310. New freedom for elderly persons and persons with 
       disabilities

       ``(a) General Authority.--
       ``(1) Authorization.--The Secretary may award grants to a 
     State for capital public transportation projects that are 
     planned, designed, and carried out to meet the needs of 
     elderly individuals and individuals with disabilities, with 
     priority given to the needs of these individuals to access 
     necessary health care.
       ``(2) Acquisition of public transportation services.--A 
     capital public transportation project under this section may 
     include acquiring public transportation services as an 
     eligible capital expense.
       ``(3) Administrative costs.--A State may use not more than 
     15 percent of the amounts received under this section to 
     administer, plan, and provide technical assistance for a 
     project funded under this section.
       ``(b) Allotments Among States.--
       ``(1) In general.--From amounts made available or 
     appropriated in each fiscal year under subsections 
     (a)(1)(C)(iv) and (b)(2)(D) of section 5338 for grants under 
     this section, the Secretary shall allot amounts to each State 
     under a formula based on the number of elderly individuals 
     and individuals with disabilities in each State.
       ``(2) Transfer of funds.--Any funds allotted to a State 
     under paragraph (1) may be transferred by the State to the 
     apportionments made under sections 5311(c) and 5336 if such 
     funds are only used for eligible projects selected under this 
     section.
       ``(3) Reallocation of funds.--A State receiving a grant 
     under this section may reallocate such grant funds to--
       ``(A) a private nonprofit organization;
       ``(B) a public transportation agency or authority; or
       ``(C) a governmental authority that--
       ``(i) has been approved by the State to coordinate services 
     for elderly individuals and individuals with disabilities;
       ``(ii) certifies that nonprofit organizations are not 
     readily available in the area that can provide the services 
     described under this subsection; or
       ``(iii) will provide services to persons with disabilities 
     that exceed those services required by the Americans with 
     Disabilities Act.
       ``(c) Federal Share.--
       ``(1) Maximum.--
       ``(A) In general.--A grant for a capital project under this 
     section may not exceed 80 percent of the net capital costs of 
     the project, as determined by the Secretary.
       ``(B) Exception.--A State described in section 120(d) of 
     title 23 shall receive an increased Federal share in 
     accordance with the formula under that section.
       ``(2) Remaining costs.--The costs of a capital project 
     under this section that are not funded through a grant under 
     this section--
       ``(A) may be funded from an undistributed cash surplus, a 
     replacement or depreciation cash fund or reserve, a service 
     agreement with a State or local social service agency or a 
     private social service organization, or new capital; and
       ``(B) may be derived from amounts appropriated to or made 
     available to any Federal agency (other than the Department of 
     Transportation, except for Federal Lands Highway funds) that 
     are eligible to be expended for transportation.
       ``(3) Exception.--For purposes of paragraph (2), the 
     prohibitions on the use of funds for matching requirements 
     under section 403(a)(5)(C)(vii) of the Social Security Act 
     (42 U.S.C. 603(a)(5)(C)(vii)) shall not apply to Federal or 
     State funds to be used for transportation purposes.
       ``(d) Grant Requirements.--
       ``(1) In general.--A grant recipient under this section 
     shall be subject to the requirements of a grant recipient 
     under section 5307 to the extent the Secretary determines to 
     be appropriate.
       ``(2) Certification requirements.--
       ``(A) Fund transfers.--A grant recipient under this section 
     that transfers funds to a project funded under section 5336 
     in accordance with subsection (b)(2) shall certify that the 
     project for which the funds are requested has been 
     coordinated with private nonprofit providers of services 
     under this section.
       ``(B) Project selection and plan development.--Each grant 
     recipient under this section shall certify that--
       ``(i) the projects selected were derived from a locally 
     developed, coordinated public transit-human services 
     transportation plan; and
       ``(ii) the plan was developed through a process that 
     included representatives of public, private, and nonprofit 
     transportation and human services providers and participation 
     by the public.
       ``(C) Allocations to subrecipients.--Each grant recipient 
     under this section shall certify that allocations of the 
     grant to subrecipients, if any, are distributed on a fair and 
     equitable basis.
       ``(e) State Program of Projects.--
       ``(1) Submission to secretary.--Each State shall annually 
     submit a program of transportation projects to the Secretary 
     for approval with an assurance that the program provides for 
     maximum feasible coordination between transportation services 
     funded under this section and transportation services 
     assisted by other Federal sources.
       ``(2) Use of funds.--Each State may use amounts made 
     available to carry out this section to provide transportation 
     services for elderly individuals and individuals with 
     disabilities if such services are included in an approved 
     State program of projects.
       ``(f) Leasing Vehicles.--Vehicles acquired under this 
     section may be leased to local governmental authorities to 
     improve transportation services designed to meet the needs of 
     elderly individuals and individuals with disabilities.
       ``(g) Meal Delivery for Homebound Individuals.--Public 
     transportation service providers receiving assistance under 
     this section or section 5311(c) may coordinate and assist in 
     regularly providing meal delivery service for homebound 
     individuals if the delivery service does not conflict with 
     providing public transportation service or reduce service to 
     public transportation passengers.
       ``(h) Transfers of Facilities and Equipment.--With the 
     consent of the recipient in possession of a facility or 
     equipment acquired with a grant under this section, a State 
     may transfer the facility or equipment to any recipient 
     eligible to receive assistance under this chapter if the 
     facility or equipment will continue to be used as required 
     under this section.
       ``(i) Fares Not Required.--This section does not require 
     that elderly individuals and individuals with disabilities be 
     charged a fare.''.
       (b) Conforming Amendment.--The item relating to section 
     5310 in the table of sections for chapter 53 is amended to 
     read as follows:

``5310. New freedom for elderly persons and persons with 
              disabilities.''.

     SEC. 3013. FORMULA GRANTS FOR OTHER THAN URBANIZED AREAS.

       (a) Definitions.--Section 5311(a) is amended to read as 
     follows:
       ``(a) Definitions.--As used in this section, the following 
     definitions shall apply:
       ``(1) Recipient.--The term `recipient' means a State or 
     Indian tribe that receives a Federal transit program grant 
     directly from the Federal Government.
       ``(2) Subrecipient.--The term `subrecipient' means a State 
     or local governmental authority, a nonprofit organization, or 
     a private operator of public transportation or intercity bus 
     service that receives Federal transit program grant funds 
     indirectly through a recipient.''.
       (b) General Authority.--Section 5311(b) is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) Grants authorized.--Except as provided under 
     paragraph (2), the Secretary may award grants under this 
     section to recipients located in areas other than urbanized 
     areas for--
       ``(A) public transportation capital projects;
       ``(B) operating costs of equipment and facilities for use 
     in public transportation; and
       ``(C) the acquisition of public transportation services.'';
       (2) by redesignating paragraph (2) as paragraph (3);
       (3) by inserting after paragraph (1) the following:
       ``(2) State program.--
       ``(A) In general.--A project eligible for a grant under 
     this section shall be included in a State program for public 
     transportation service projects, including agreements with 
     private providers of public transportation service.
       ``(B) Submission to secretary.--Each State shall annually 
     submit the program described in subparagraph (A) to the 
     Secretary.
       ``(C) Approval.--The Secretary may not approve the program 
     unless the Secretary determines that--
       ``(i) the program provides a fair distribution of amounts 
     in the State; and
       ``(ii) the program provides the maximum feasible 
     coordination of public transportation service assisted under 
     this section with transportation service assisted by other 
     Federal sources.'';
       (4) in paragraph (3), as redesignated--
       (A) by striking ``(3) The Secretary of Transportation'' and 
     inserting the following:
       ``(3) Rural transportation assistance program.--
       ``(A) Establishment.--The Secretary'';
       (B) by striking ``make'' and inserting ``use not more than 
     2 percent of the amount made available to carry out this 
     section to award''; and
       (C) by adding at the end the following:
       ``(B) Data Collection.--
       ``(i) Report.--Each grantee under this section shall submit 
     an annual report to the Secretary containing information on 
     capital investment, operations, and service provided with 
     funds received under this section, including--

       ``(I) total annual revenue;
       ``(II) sources of revenue;
       ``(III) total annual operating costs;
       ``(IV) total annual capital costs;
       ``(V) fleet size and type, and related facilities;
       ``(VI) revenue vehicle miles; and
       ``(VII) ridership.''; and

       (5) by adding after paragraph (3) the following:
       ``(4) Of the amount made available to carry out paragraph 
     (3)--
       ``(A) not more than 15 percent may be used to carry out 
     projects of a national scope; and
       ``(B) any amounts not used under subparagraph (A) shall be 
     allocated to the States.''.
       (c) Apportionments.--Section 5311(c) is amended to read as 
     follows:

[[Page 10895]]

       ``(c) Apportionments.--
       ``(1) Public transportation on indian reservations.--Of the 
     amounts made available or appropriated for each fiscal year 
     pursuant to subsections (a)(1)(C)(v) and (b)(2)(F) of section 
     5338, the following amounts shall be apportioned for grants 
     to Indian tribes for any purpose eligible under this section, 
     under such terms and conditions as may be established by the 
     Secretary:
       ``(A) $6,000,000 for fiscal year 2005.
       ``(B) $8,000,000 for fiscal year 2006.
       ``(C) $10,000,000 for fiscal year 2007.
       ``(D) $12,000,000 for fiscal year 2008.
       ``(E) $15,000,000 for fiscal year 2009.
       ``(2) Remaining amounts.--Of the amounts made available or 
     appropriated for each fiscal year pursuant to subsections 
     (a)(1)(C)(v) and (b)(2)(F) of section 5338 that are not 
     apportioned under paragraph (1)--
       ``(A) 20 percent shall be apportioned to the States in 
     accordance with paragraph (3); and
       ``(B) 80 percent shall be apportioned to the States in 
     accordance with paragraph (4).
       ``(3) Apportionments based on land area in nonurbanized 
     areas.--
       ``(A) In general.--Subject to subparagraph (B), each State 
     shall receive an amount that is equal to the amount 
     apportioned under paragraph (2)(A) multiplied by the ratio of 
     the land area in areas other than urbanized areas in that 
     State and divided by the land area in all areas other than 
     urbanized areas in the United States, as shown by the most 
     recent decennial census of population.
       ``(B) Maximum apportionment.--No State shall receive more 
     than 5 percent of the amount apportioned under this 
     paragraph.
       ``(4) Apportionments based on population in nonurbanized 
     areas.--Each State shall receive an amount equal to the 
     amount apportioned under paragraph (2)(B) multiplied by the 
     ratio of the population of areas other than urbanized areas 
     in that State divided by the population of all areas other 
     than urbanized areas in the United States, as shown by the 
     most recent decennial census of population.''.
       (d) Use for Administrative, Planning, and Technical 
     Assistance.--Section 5311(e) is amended--
       (1) by striking ``and Technical Assistance.--(1) The 
     Secretary of Transportation'' and inserting ``, Planning, and 
     Technical Assistance.--The Secretary'';
       (2) by striking ``to a recipient''; and
       (3) by striking paragraph (2).
       (e) Intercity Bus Transportation.--Section 5311(f) is 
     amended--
       (1) in paragraph (1)--
       (A) by striking ``(1)'' and inserting the following:
       ``(1) In general.--''; and
       (B) by striking ``after September 30, 1993,''; and
       (2) in paragraph (2)--
       (A) by striking ``A State'' and inserting ``After 
     consultation with affected intercity bus service providers, a 
     State''; and
       (B) by striking ``of Transportation''.
       (f) Federal Share of Costs.--Section 5311(g) is amended to 
     read as follows:
       ``(g) Federal Share of Costs.--
       ``(1) Maximum federal share.--
       ``(A) Capital projects.--
       ``(i) In general.--Except as provided under clause (ii), a 
     grant awarded under this section for any purpose other than 
     operating assistance may not exceed 80 percent of the net 
     capital costs of the project, as determined by the Secretary.
       ``(ii) Exception.--A State described in section 120(d) of 
     title 23 shall receive a Federal share of the net capital 
     costs in accordance with the formula under that section.
       ``(B) Operating assistance.--
       ``(i) In general.--Except as provided under clause (ii), a 
     grant made under this section for operating assistance may 
     not exceed 50 percent of the net operating costs of the 
     project, as determined by the Secretary.
       ``(ii) Exception.--A State described in section 120(d) of 
     title 23 shall receive a Federal share of the net operating 
     costs equal to 62.5 percent of the Federal share provided for 
     under subparagraph (A)(ii).
       ``(2) Other funding sources.--Funds for a project under 
     this section that are not provided for by a grant under this 
     section--
       ``(A) may be provided from--
       ``(i) an undistributed cash surplus;
       ``(ii) a replacement or depreciation cash fund or reserve;
       ``(iii) a service agreement with a State or local social 
     service agency or a private social service organization; or
       ``(iv) new capital; and
       ``(B) may be derived from amounts appropriated to or made 
     available to a Federal agency (other than the Department of 
     Transportation, except for Federal Land Highway funds) that 
     are eligible to be expended for transportation.
       ``(3) Use of federal grant.--A State carrying out a program 
     of operating assistance under this section may not limit the 
     level or extent of use of the Federal grant for the payment 
     of operating expenses.
       ``(4) Exception.--For purposes of paragraph (2)(B), the 
     prohibitions on the use of funds for matching requirements 
     under section 403(a)(5)(c)(vii) of the Social Security Act 
     (42 U.S.C. 603(a)(5)(c)(vii)) shall not apply to Federal or 
     State funds to be used for transportation purposes.''.
       (g) Waiver Condition.--Section 5311(j)(1) is amended by 
     striking ``but the Secretary of Labor may waive the 
     application of section 5333(b)'' and inserting ``if the 
     Secretary of Labor utilizes a Special Warranty that provides 
     a fair and equitable arrangement to protect the interests of 
     employees''.

     SEC. 3014. RESEARCH, DEVELOPMENT, DEMONSTRATION, AND 
                   DEPLOYMENT PROJECTS.

       (a) In General.--Section 5312 is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Research, Development, and Demonstration Projects.--
       ``(1) In general.--The Secretary may make grants, 
     contracts, cooperative agreements, or other transactions 
     (including agreements with departments, agencies, and 
     instrumentalities of the United States Government) for 
     research, development, demonstration or deployment projects, 
     or evaluation of technology of national significance to 
     public transportation that the Secretary determines will 
     improve public transportation service or help public 
     transportation service meet the total transportation needs at 
     a minimum cost.
       ``(2) Information.--The Secretary may request and receive 
     appropriate information from any source.
       ``(3) Savings provision.--This subsection does not limit 
     the authority of the Secretary under any other law.'';
       (2) by striking subsections (b) and (c);
       (3) by redesignating subsections (d) and (e) as (b) and 
     (c), respectively.
       (4) in subsection (b), as redesignated--
       (A) in paragraph (2), by striking ``other agreements'' and 
     inserting ``other transactions''; and
       (B) in paragraph (5), by striking ``within the Mass Transit 
     Account of the Highway Trust Fund''; and
       (5) in subsection (c), as redesignated--
       (A) in paragraph (2), by striking ``public and private'' 
     and inserting ``public or private''; and
       (B) in paragraph (3), by striking ``within the Mass Transit 
     Account of the Highway Trust Fund'' .
       (b) Conforming Amendments.--
       (1) Section heading.--The heading of section 5312 is 
     amended to read as follows:

     ``Sec. 5312. Research, development, demonstration, and 
       deployment projects''.

       (2) Table of sections.--The item relating to section 5312 
     in the table of sections for chapter 53 is amended to read as 
     follows:

``5312. Research, development, demonstration, and deployment 
              projects.''.

     SEC. 3015. TRANSIT COOPERATIVE RESEARCH PROGRAM.

       (a) In General.--Section 5313 is amended--
       (1) by striking subsection (b);
       (2) in subsection (a)--
       (A) in paragraph (1), by striking ``(1) The amounts made 
     available under paragraphs (1) and (2)C)(ii) of section 
     5338(c) of this title'' and inserting ``The amounts made 
     available under subsections (a)(5)(C)(iii) and (b)(2)(G)(i) 
     of section 5338''; and
       (B) in paragraph (2), by striking ``(2)'' and inserting the 
     following:
       ``(b) Federal Assistance.--''; and
       (3) by amending subsection (c) to read as follows:
       ``(c) Federal Share.--If there would be a clear and direct 
     financial benefit to an entity under a grant or contract 
     financed under this section, the Secretary shall establish a 
     Federal share consistent with such benefit.''.
       (b) Conforming Amendments.--
       (1) Section heading.--The heading of section 5313 is 
     amended to read as follows:

     ``Sec. 5313. Transit cooperative research program''.

       (2) Table of sections.--The item relating to section 5313 
     in the table of sections for chapter 53 is amended to read as 
     follows:

``5313. Transit cooperative research program.''.

     SEC. 3016. NATIONAL RESEARCH PROGRAMS.

       (a) In General.--Section 5314 is amended--
       (1) in subsection (a)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) Availability of funds.--The Secretary may use amounts 
     made available under subsections (a)(5)(C)(iv) and 
     (b)(2)(G)(iv) of section 5338 for grants, contracts, 
     cooperative agreements, or other transactions for the 
     purposes described in sections 5312, 5315, and 5322.'';
       (B) in paragraph (2), by striking ``(2) Of'' and inserting 
     the following:
       ``(2) ADA compliance.--From'';
       (C) by amending paragraph (3) to read as follows:
       ``(3) Special demonstration initiatives.--The Secretary may 
     use not more than 25 percent of the amounts made available 
     under paragraph (1) for special demonstration initiatives, 
     subject to terms that the Secretary determines to be 
     consistent with this chapter. For a nonrenewable grant of not 
     more than $100,000, the Secretary shall provide expedited 
     procedures for complying with the requirements of this 
     chapter.'';
       (D) in paragraph (4)--
       (i) by striking subparagraph (B); and
       (ii) by redesignating subparagraph (C) as subparagraph (B); 
     and
       (E) by adding at the end the following:
       ``(6) Medical transportation demonstration grants.--
       ``(A) Grants authorized.--The Secretary may award 
     demonstration grants, from funds made available under 
     paragraph (1), to eligible entities to provide transportation 
     services to individuals to access dialysis treatments and 
     other medical treatments for renal disease.
       ``(B) Eligible entities.--An entity shall be eligible to 
     receive a grant under this paragraph if the entity--

[[Page 10896]]

       ``(i) meets the conditions described in section 501(c)(3) 
     of the Internal Revenue Code of 1986; or
       ``(ii) is an agency of a State or unit of local government.
       ``(C) Use of funds.--Grant funds received under this 
     paragraph may be used to provide transportation services to 
     individuals to access dialysis treatments and other medical 
     treatments for renal disease.
       ``(D) Application.--
       ``(i) In general.--Each eligible entity desiring a grant 
     under this paragraph shall submit an application to the 
     Secretary at such time, at such place, and containing such 
     information as the Secretary may reasonably require.
       ``(ii) Selection of grantees.--In awarding grants under 
     this paragraph, the Secretary shall give preference to 
     eligible entities from communities with--

       ``(I) high incidence of renal disease; and
       ``(II) limited access to dialysis facilities.

       ``(E) Rulemaking.--The Secretary shall issue regulations to 
     implement and administer the grant program established under 
     this paragraph.
       ``(F) Report.--The Secretary shall submit a report on the 
     results of the demonstration projects funded under this 
     paragraph to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives.''; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Federal Share.--If there would be a clear and direct 
     financial benefit to an entity under a grant, contract, 
     cooperative agreement, or other transaction financed under 
     subsection (a) or section 5312, 5313, 5315, or 5322, the 
     Secretary shall establish a Federal share consistent with 
     such benefit.''.
       (c) National Technical Assistance Center for Senior 
     Transportation; Alternative Fuels Study.--Section 5314 is 
     amended by adding at the end the following:
       ``(c) National Technical Assistance Center for Senior 
     Transportation.--
       ``(1) Establishment.--The Secretary shall award grants to a 
     national not-for-profit organization for the establishment 
     and maintenance of a national technical assistance center.
       ``(2) Eligibility.--An organization shall be eligible to 
     receive the grant under paragraph (1) if the organization--
       ``(A) focuses significantly on serving the needs of the 
     elderly;
       ``(B) has demonstrated knowledge and expertise in senior 
     transportation policy and planning issues;
       ``(C) has affiliates in a majority of the States;
       ``(D) has the capacity to convene local groups to consult 
     on operation and development of senior transportation 
     programs; and
       ``(E) has established close working relationships with the 
     Federal Transit Administration and the Administration on 
     Aging.
       ``(3) Use of funds.--The national technical assistance 
     center established under this section shall--
       ``(A) gather best practices from throughout the country and 
     provide such practices to local communities that are 
     implementing senior transportation programs;
       ``(B) work with teams from local communities to identify 
     how they are successfully meeting the transportation needs of 
     senior and any gaps in services in order to create a plan for 
     an integrated senior transportation program;
       ``(C) provide resources on ways to pay for senior 
     transportation services;
       ``(D) create a web site to publicize and circulate 
     information on senior transportation programs;
       ``(E) establish a clearinghouse for print, video, and audio 
     resources on senior mobility; and
       ``(F) administer the demonstration grant program 
     established under paragraph (4).
       ``(4) Grants authorized.--
       ``(A) In general.--The national technical assistance center 
     established under this section, in consultation with the 
     Federal Transit Administration, shall award senior 
     transportation demonstration grants to--
       ``(i) local transportation organizations;
       ``(ii) State agencies;
       ``(iii) units of local government; and
       ``(iv) nonprofit organizations.
       ``(B) Use of funds.--Grant funds received under this 
     paragraph may be used to--
       ``(i) evaluate the state of transportation services for 
     senior citizens;
       ``(ii) recognize barriers to mobility that senior citizens 
     encounter in their communities;
       ``(iii) establish partnerships and promote coordination 
     among community stakeholders, including public, not-for-
     profit, and for-profit providers of transportation services 
     for senior citizens;
       ``(iv) identify future transportation needs of senior 
     citizens within local communities; and
       ``(v) establish strategies to meet the unique needs of 
     healthy and frail senior citizens.
       ``(C) Selection of grantees.--The Secretary shall select 
     grantees under this subsection based on a fair representation 
     of various geographical locations throughout the United 
     States.
       ``(5) Allocations.--From the funds made available for each 
     fiscal year under subsections (a)(5)(C)(iv) and (b)(2)(G)(iv) 
     of section 5338, $3,000,000 shall be allocated to carry out 
     this subsection.
       ``(d) Alternative Fuels Study.--
       ``(1) Study.--The Secretary shall conduct a study of the 
     actions necessary to facilitate the purchase of increased 
     volumes of alternative fuels (as defined in section 301 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13211)) for use in 
     public transit vehicles
       ``(2) Scope of study.--The study conducted under this 
     subsection shall focus on the incentives necessary to 
     increase the use of alternative fuels in public transit 
     vehicles, including buses, fixed guideway vehicles, and 
     ferries.
       ``(3) Contents.--The study shall consider--
       ``(A) the environmental benefits of increased use of 
     alternative fuels in transit vehicles;
       ``(B) existing opportunities available to transit system 
     operators that encourage the purchase of alternative fuels 
     for transit vehicle operation;
       ``(C) existing barriers to transit system operators that 
     discourage the purchase of alternative fuels for transit 
     vehicle operation, including situations where alternative 
     fuels that do not require capital improvements to transit 
     vehicles are disadvantaged over fuels that do require such 
     improvements; and
       ``(D) the necessary levels and type of support necessary to 
     encourage additional use of alternative fuels for transit 
     vehicle operation.
       ``(4) Recommendations.--The study shall recommend 
     regulatory and legislative alternatives that will result in 
     the increased use of alternative fuels in transit vehicles.
       ``(5) Report.--Not later than 1 year after the date of 
     enactment of the Federal Public Transportation Act of 2004, 
     the Secretary shall submit the study completed under this 
     subsection to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives''.
       (c) Conforming Amendments.--
       (1) Section heading.--The heading for section 5314 is 
     amended to read as follows:

     ``Sec. 5314. National research programs''.

       (2) Table of sections.--The item relating to section 5314 
     in the table of sections for chapter 53 is amended to read as 
     follows:

``5314. National research programs.''.

     SEC. 3017. NATIONAL TRANSIT INSTITUTE.

       (a) Section 5315 is amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Establishment.--The Secretary shall award a grant to 
     Rutgers University to conduct a national transit institute.
       ``(b) Duties.--
       ``(1) In general.--In cooperation with the Federal Transit 
     Administration, State transportation departments, public 
     transportation authorities, and national and international 
     entities, the institute established pursuant to subsection 
     (a) shall develop and conduct training programs for Federal, 
     State, and local transportation employees, United States 
     citizens, and foreign nationals engaged or to be engaged in 
     Government-aid public transportation work.
       ``(2) Training programs.--The training programs developed 
     under paragraph (1) may include courses in recent 
     developments, techniques, and procedures related to--
       ``(A) intermodal and public transportation planning;
       ``(B) management;
       ``(C) environmental factors;
       ``(D) acquisition and joint use rights of way;
       ``(E) engineering and architectural design;
       ``(F) procurement strategies for public transportation 
     systems;
       ``(G) turnkey approaches to delivering public 
     transportation systems;
       ``(H) new technologies;
       ``(I) emission reduction technologies;
       ``(J) ways to make public transportation accessible to 
     individuals with disabilities;
       ``(K) construction, construction management, insurance, and 
     risk management;
       ``(L) maintenance;
       ``(M) contract administration;
       ``(N) inspection;
       ``(O) innovative finance;
       ``(P) workplace safety; and
       ``(Q) public transportation security.''; and
       (2) in subsection (d), by striking ``mass'' each place it 
     appears.

     SEC. 3018. BUS TESTING FACILITY.

       Section 5318 is amended--
       (1) in subsection (a)--
       (A) by striking ``Establishment.--The Secretary of 
     Transportation shall establish one facility'' and inserting 
     ``In General.--The Secretary shall maintain 1 facility''; and
       (B) by striking ``established by renovating'' and inserting 
     ``maintained at''; and
       (2) in subsection (d), by striking ``section 5309(m)(1)(C) 
     of this title'' and inserting ``paragraphs (1)(C) and (2)(B) 
     of section 5309(i)''.

     SEC. 3019. BICYCLE FACILITIES.

       Section 5319 is amended by striking ``5307(k)'' and 
     inserting ``5307(d)(1)(K)''.

     SEC. 3020. SUSPENDED LIGHT RAIL TECHNOLOGY PILOT PROJECT.

       Section 5320 is repealed.

     SEC. 3021. CRIME PREVENTION AND SECURITY.

       Section 5321 is repealed.

     SEC. 3022. GENERAL PROVISIONS ON ASSISTANCE.

       Section 5323 is amended--
       (1) in subsection (a)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) In general.--Financial assistance provided under this 
     chapter to a State or a local governmental authority may be 
     used to acquire an interest in, or to buy property of, a 
     private company engaged in public transportation, for a 
     capital project for property acquired from a private company 
     engaged in public transportation after July 9, 1964, or to 
     operate a public transportation facility or equipment in 
     competition with, or in addition to, transportation service

[[Page 10897]]

     provided by an existing public transportation company, only 
     if--
       ``(A) the Secretary determines that such financial 
     assistance is essential to a program of projects required 
     under sections 5303, 5304, and 5306;
       ``(B) the Secretary determines that the program provides 
     for the participation of private companies engaged in public 
     transportation to the maximum extent feasible; and
       ``(C) just compensation under State or local law will be 
     paid to the company for its franchise or property.''; and
       (B) in paragraph (2), by striking ``(2)'' and inserting the 
     following:
       ``(2) Limitation.--'';
       (2) by amending subsection (b) to read as follows:
       ``(b) Notice and Public Hearing.--
       ``(1) In general.--An application for a grant under this 
     chapter for a capital project that will substantially affect 
     a community, or the public transportation service of a 
     community, shall include, in the environmental record for the 
     project, evidence that the applicant has--
       ``(A) provided an adequate opportunity for public review 
     and comment on the project;
       ``(B) held a public hearing on the project if the project 
     affects significant economic, social, or environmental 
     interests;
       ``(C) considered the economic, social, and environmental 
     effects of the project; and
       ``(D) found that the project is consistent with official 
     plans for developing the urban area.
       ``(2) Contents of notice.--Notice of a hearing under this 
     subsection--
       ``(A) shall include a concise description of the proposed 
     project; and
       ``(B) shall be published in a newspaper of general 
     circulation in the geographic area the project will serve.'';
       (3) by amending subsection (c) to read as follows:
       ``(c) New Technology.--A grant for financial assistance 
     under this chapter for new technology, including innovative 
     or improved products, techniques, or methods, shall be 
     subject to the requirements of section 5309 to the extent the 
     Secretary determines to be appropriate.'';
       (4) by amending subsection (d) to read as follows:
       ``(d) Conditions on Bus Transportation Service.--Financial 
     assistance under this chapter may be used to buy or operate a 
     bus only if the recipient agrees to comply with the following 
     conditions on bus transportation service:
       ``(1) Charter bus service.--
       ``(A) In general.--Except as provided under subparagraph 
     (B), a recipient may provide incidental charter bus service 
     only within its lawful service area if--
       ``(i) the recipient annually publishes, by electronic and 
     other appropriate means, a notice--

       ``(I) indicating its intent to offer incidental charter bus 
     service within its lawful service area; and
       ``(II) soliciting notices from private bus operators that 
     wish to appear on a list of carriers offering charter bus 
     service in that service area;

       ``(ii) the recipient provides private bus operators with an 
     annual opportunity to notify the recipient of its desire to 
     appear on a list of carriers offering charter bus service in 
     such service area;
       ``(iii) upon receiving a request for charter bus service, 
     the recipient electronically notifies the private bus 
     operators listed as offering charter service in that service 
     area with the name and contact information of the requestor 
     and the nature of the charter service request; and
       ``(iv) the recipient does not offer to provide charter bus 
     service unless no private bus operator indicates that it is 
     willing and able to provide the service within a 72-hour 
     period after the receipt of such notice.
       ``(B) Exception.--A recipient that operates 2,000 or fewer 
     vehicles in fixed-route peak hour service may provide 
     incidental charter bus transportation directly to --
       ``(i) local governments; and
       ``(ii) social service entities with limited resources.
       ``(C) Irregularly scheduled events.--Service, other than 
     commuter service, by a recipient to irregularly scheduled 
     events, where the service is conducted in whole or in part 
     outside the service area of the recipient, regardless of 
     whether the service is contracted for individually with 
     passengers, is subject to a rebuttable presumption that such 
     service is charter service.
       ``(2) Violation of agreements.--
       ``(A) Complaints.--A complaint regarding the violation of a 
     charter bus service agreement shall be submitted to the 
     Regional Administrator of the Federal Transit Administration, 
     who shall--
       ``(i) provide a reasonable opportunity for the recipient to 
     respond to the complaint;
       ``(ii) provide the recipient with an opportunity for an 
     informal hearing; and
       ``(iii) issue a written decision not later than 60 days 
     after the parties have completed their submissions.
       ``(B) Appeals.--
       ``(i) In general.--A decision by the Regional Administrator 
     may be appealed to a panel comprised of the Federal Transit 
     Administrator, personnel in the Office of the Secretary of 
     Transportation, and other persons with expertise in surface 
     passenger transportation issues.
       ``(ii) Standard of review.--The panel described in clause 
     (i) shall consider the complaint de novo on all issues of 
     fact and law.
       ``(iii) Written decision.--The appeals panel shall issue a 
     written decision on an appeal not later than 60 days after 
     the completion of submissions. This decision shall be the 
     final order of the agency and subject to judicial review in 
     district court.
       ``(C) Correction.--If the Secretary determines that a 
     violation of an agreement relating to the provision of 
     charter service has occurred, the Secretary shall correct the 
     violation under terms of the agreement.
       ``(D) Remedies.--The Secretary may issue orders to 
     recipients to cease and desist in actions that violate the 
     agreement, and such orders shall be binding upon the parties. 
     In addition to any remedy spelled out in the agreement, if a 
     recipient has failed to correct a violation within 60 days 
     after the receipt of a notice of violation from the 
     Secretary, the Secretary shall withhold from the recipient 
     the lesser of--
       ``(i) 5 percent of the financial assistance available to 
     the recipient under this chapter for the next fiscal year; or
       ``(ii) $200,000.
       ``(3) Regulations.--Not later than 1 year after the date of 
     enactment of the Federal Public Transportation Act of 2004, 
     the Secretary shall issue amended regulations that--
       ``(A) implement this subsection, as revised by such Act; 
     and
       ``(B) impose restrictions, procedures, and remedies in 
     connection with sightseeing service by a recipient.
       ``(4) Public notice.--The Secretary shall make all written 
     decisions, guidance, and other pertinent materials relating 
     to the procedures in this subsection available to the public 
     in electronic and other appropriate formats in a timely 
     manner.'';
       (5) by striking subsection (e);
       (6) by redesignating subsection (f) as subsection (e);
       (7) in subsection (e), as redesignated--
       (A) by striking ``(1)'' and inserting the following:
       ``(1) In general.--'';
       (B) by striking paragraph (2);
       (C) by striking ``This subsection'' and inserting the 
     following:
       ``(2) Exceptions.--This subsection; and
       (D) by adding at the end the following:
       ``(3) Penalty.--If the Secretary determines that an 
     applicant, governmental authority, or publicly owned operator 
     has violated the agreement required under paragraph (1), the 
     Secretary shall bar the applicant, authority, or operator 
     from receiving Federal transit assistance in an amount the 
     Secretary determines to be appropriate.'';
       (8) by inserting after subsection (e) the following:
       ``(f) Bond Proceeds Eligible for Local Share.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a recipient of assistance under section 5307 or 5309, 
     may use the proceeds from the issuance of revenue bonds as 
     part of the local matching funds for a capital project.
       ``(2) Reimbursement by secretary.--The Secretary may 
     reimburse an eligible recipient for deposits of bond proceeds 
     in a debt service reserve that the recipient established 
     pursuant to section 5302(a)(1)(K) from amounts made available 
     to the recipient under section 5307 or 5309.'';
       (9) in subsection (g)--
       (A) by striking ``(f)'' each place it appears and inserting 
     ``(e)''; and
       (B) by striking ``103(e)(4) and 142 (a) or (c)'' each place 
     it appears and inserting ``133 and 142'';
       (10) by amending subsection (h) to read as follows:
       ``(h) Transfer of Lands or Interests in Lands Owned by the 
     United States.--
       (1) Request by secretary.--If the Secretary determines that 
     any part of the lands or interests in lands owned by the 
     United States and made available as a result of a military 
     base closure is necessary for transit purposes eligible under 
     this chapter, including corridor preservation, the Secretary 
     shall submit a request to the head of the Federal agency 
     supervising the administration of such lands or interests in 
     lands. Such request shall include a map showing the portion 
     of such lands or interests in lands, which is desired to be 
     transferred for public transportation purposes.
       ``(2) Transfer of land.--If 4 months after submitting a 
     request under paragraph (1), the Secretary does not receive a 
     response from the Federal agency described in paragraph (1) 
     that certifies that the proposed appropriation of land is 
     contrary to the public interest or inconsistent with the 
     purposes for which such land has been reserved, or if the 
     head of such agency agrees to the utilization or transfer 
     under conditions necessary for the adequate protection and 
     utilization of the reserve, such land or interests in land 
     may be utilized or transferred to a State, local governmental 
     authority, or public transportation operator for such 
     purposes and subject to the conditions specified by such 
     agency.
       ``(3) Reversion.--If at any time the lands or interests in 
     land utilized or transferred under paragraph (2) are no 
     longer needed for public transportation purposes, the State, 
     local governmental authority, or public transportation 
     operator that received the land shall notify to the 
     Secretary, and such lands shall immediately revert to the 
     control of the head of the Federal agency from which the land 
     was originally transferred.'';
       (11) in subsection (j)(5), by striking ``Intermodal Surface 
     Transportation Efficiency Act of 1991 (Public Law 102-240, 
     105 Stat. 1914)'' and inserting ``Federal Public 
     Transportation Act of 2004'';
       (12) by amending subsection (l) to read as follows:

[[Page 10898]]

       ``(l) Relationship to Other Laws.--Section 1001 of title 18 
     applies to a certificate, submission, or statement provided 
     under this chapter. The Secretary may terminate financial 
     assistance under this chapter and seek reimbursement 
     directly, or by offsetting amounts, available under this 
     chapter, if the Secretary determines that a recipient of such 
     financial assistance has made a false or fraudulent statement 
     or related act in connection with a Federal transit 
     program.'';
       (13) in subsection (m), by inserting at the end the 
     following: ``Requirements to perform preaward and 
     postdelivery reviews of rolling stock purchases to ensure 
     compliance with subsection (j) shall not apply to private 
     nonprofit organizations or to grantees serving urbanized 
     areas with a population of fewer than 1,000,000.'';
       (14) in subsection (o), by striking ``the Transportation 
     Infrastructure Finance and Innovation Act of 1998'' and 
     inserting ``sections 181 through 188 of title 23''; and
       (15) by adding at the end the following:
       ``(p) Prohibited Use of Funds.--Grant funds received under 
     this chapter may not be used to pay ordinary governmental or 
     nonproject operating expenses.''.

     SEC. 3023. SPECIAL PROVISIONS FOR CAPITAL PROJECTS.

       (a) In General.--Section 5324 is amended to read as 
     follows:

     ``Sec. 5324. Special provisions for capital projects

       ``(a) Real Property and Relocation Services.--Whenever real 
     property is acquired or furnished as a required contribution 
     incident to a project, the Secretary shall not approve the 
     application for financial assistance unless the applicant has 
     made all payments and provided all assistance and assurances 
     that are required of a State agency under sections 210 and 
     305 of the Uniform Relocation Assistance and Real Property 
     Acquisition Policies Act of 1970 (42 U.S.C. 4630 and 4655). 
     The Secretary must be advised of specific references to any 
     State law that are believed to be an exception to section 301 
     or 302 of such Act (42 U.S.C. 4651 and 4652).
       ``(b) Advance Real Property Acquisitions.--
       (1) In general.--The Secretary may participate in the 
     acquisition of real property for any project that may use the 
     property if the Secretary determines that external market 
     forces are jeopardizing the potential use of the property for 
     the project and if--
       ``(A) there are offers on the open real estate market to 
     convey that property for a use that is incompatible with the 
     project under study;
       ``(B) there is an imminent threat of development or 
     redevelopment of the property for a use that is incompatible 
     with the project under study;
       ``(C) recent appraisals reflect a rapid increase in the 
     fair market value of the property;
       ``(D) the property, because it is located near an existing 
     transportation facility, is likely to be developed and to be 
     needed for a future transportation improvement; or
       ``(E) the property owner can demonstrate that, for health, 
     safety, or financial reasons, retaining ownership of the 
     property poses an undue hardship on the owner in comparison 
     to other affected property owners and requests the 
     acquisition to alleviate that hardship.
       ``(2) Environmental reviews.--Property acquired in 
     accordance with this subsection may not be developed in 
     anticipation of the project until all required environmental 
     reviews for the project have been completed.
       ``(3) Limitation.--The Secretary shall limit the size and 
     number of properties acquired under this subsection as 
     necessary to avoid any prejudice to the Secretary's objective 
     evaluation of project alternatives.
       ``(4) Exemption.--An acquisition under this section shall 
     be considered an exempt project under section 176 of the 
     Clean Air Act (42 U.S.C. 7506).
       ``(c) Railroad Corridor Preservation.--
       ``(1) In general.--The Secretary may assist an applicant to 
     acquire railroad right-of-way before the completion of the 
     environmental reviews for any project that may use the right-
     of-way if the acquisition is otherwise permitted under 
     Federal law. The Secretary may establish restrictions on such 
     an acquisition as the Secretary determines to be necessary 
     and appropriate.
       ``(2) Environmental reviews.--Railroad right-of-way 
     acquired under this subsection may not be developed in 
     anticipation of the project until all required environmental 
     reviews for the project have been completed.
       ``(d) Consideration of Economic, Social, and Environmental 
     Interests.--
       ``(1) In general.--The Secretary may not approve an 
     application for financial assistance for a capital project 
     under this chapter unless the Secretary determines that the 
     project has been developed in accordance with the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
     The Secretary's findings under this paragraph shall be made a 
     matter of public record.
       ``(2) Cooperation and consultation.--In carrying out 
     section 5301(e), the Secretary shall cooperate and consult 
     with the Secretary of the Interior and the Administrator of 
     the Environmental Protection Agency on each project that may 
     have a substantial impact on the environment.''.
       (b) Conforming Amendment.--The item relating to section 
     5324 in the table of sections for chapter 53 is amended to 
     read as follows:

``5324. Special provisions for capital projects.''.

     SEC. 3024. CONTRACT REQUIREMENTS.

       (a) In General.--Section 5325 is amended to read as 
     follows:

     ``Sec. 5325. Contract requirements

       ``(a) Competition.--Recipients of assistance under this 
     chapter shall conduct all procurement transactions in a 
     manner that provides full and open competition as determined 
     by the Secretary.
       ``(b) Architectural, Engineering, and Design Contracts.--
       ``(1) In general.--A contract or requirement for program 
     management, architectural engineering, construction 
     management, a feasibility study, and preliminary engineering, 
     design, architectural, engineering, surveying, mapping, or 
     related services for a project for which Federal assistance 
     is provided under this chapter shall be awarded in the same 
     manner as a contract for architectural and engineering 
     services is negotiated under chapter 11 of title 40, or an 
     equivalent qualifications-based requirement of a State. This 
     subsection does not apply to the extent a State has adopted 
     or adopts by law a formal procedure for procuring those 
     services.
       ``(2) Additional requirements.--When awarding a contract 
     described in paragraph (1), recipients of assistance under 
     this chapter shall comply with the following requirements:
       ``(A) Any contract or subcontract awarded under this 
     chapter shall be performed and audited in compliance with 
     cost principles contained in part 31 of title 48, Code of 
     Federal Regulations (commonly known as the Federal 
     Acquisition Regulation).
       ``(B) A recipient of funds under a contract or subcontract 
     awarded under this chapter shall accept indirect cost rates 
     established in accordance with the Federal Acquisition 
     Regulation for 1-year applicable accounting periods by a 
     cognizant Federal or State government agency, if such rates 
     are not currently under dispute.
       ``(C) After a firm's indirect cost rates are accepted under 
     subparagraph (B), the recipient of the funds shall apply such 
     rates for the purposes of contract estimation, negotiation, 
     administration, reporting, and contract payment, and shall 
     not be limited by administrative or de facto ceilings.
       ``(D) A recipient requesting or using the cost and rate 
     data described in subparagraph (C) shall notify any affected 
     firm before such request or use. Such data shall be 
     confidential and shall not be accessible or provided by the 
     group of agencies sharing cost data under this subparagraph, 
     except by written permission of the audited firm. If 
     prohibited by law, such cost and rate data shall not be 
     disclosed under any circumstances.
       ``(c) Efficient Procurement.--A recipient may award a 
     procurement contract under this chapter to other than the 
     lowest bidder if the award furthers an objective consistent 
     with the purposes of this chapter, including improved long-
     term operating efficiency and lower long-term costs.
       ``(d) Design-Build Projects.--
       ``(1) Defined term.--As used in this subsection, the term 
     `design-build project'--
       ``(A) means a project under which a recipient enters into a 
     contract with a seller, firm, or consortium of firms to 
     design and build an operable segment of a public 
     transportation system that meets specific performance 
     criteria; and
       ``(B) may include an option to finance, or operate for a 
     period of time, the system or segment or any combination of 
     designing, building, operating, or maintaining such system or 
     segment.
       ``(2) Financial assistance for capital costs.--Federal 
     financial assistance under this chapter may be provided for 
     the capital costs of a design-build project after the 
     recipient complies with Government requirements.
       ``(e) Rolling Stock.--
       ``(1) Acquisition.--A recipient of financial assistance 
     under this chapter may enter into a contract to expend that 
     assistance to acquire rolling stock--
       ``(A) with a party selected through a competitive 
     procurement process; or
       ``(B) based on--
       ``(i) initial capital costs; or
       ``(ii) performance, standardization, life cycle costs, and 
     other factors.
       ``(2) Multiyear contracts.--A recipient procuring rolling 
     stock with Federal financial assistance under this chapter 
     may make a multiyear contract, including options, to buy not 
     more than 5 years of requirements for rolling stock and 
     replacement parts. The Secretary shall allow a recipient to 
     act on a cooperative basis to procure rolling stock under 
     this paragraph and in accordance with other Federal 
     procurement requirements.
       ``(f) Examination of Records.--Upon request, the Secretary 
     and the Comptroller General, or any of their representatives, 
     shall have access to and the right to examine and inspect all 
     records, documents, and papers, including contracts, related 
     to a project for which a grant is made under this chapter.
       ``(g) Grant Prohibition.--A grant awarded under this 
     chapter may not be used to support a procurement that uses an 
     exclusionary or discriminatory specification.
       ``(h) Bus Dealer Requirements.--No State law requiring 
     buses to be purchased through in-State dealers shall apply to 
     vehicles purchased with a grant under this chapter.
       ``(i) Awards to Responsible Contractors.--
       ``(1) In general.--Federal financial assistance under this 
     chapter may be provided for contracts only if a recipient 
     awards such contracts to responsible contractors possessing 
     the ability to successfully perform under the terms and 
     conditions of a proposed procurement.
       ``(2) Criteria.--Before making an award to a contractor 
     under paragraph (1), a recipient shall consider--

[[Page 10899]]

       ``(A) the integrity of the contractor;
       ``(B) the contractor's compliance with public policy;
       ``(C) the contractor's past performance, including the 
     performance reported in the Contractor Performance Assessment 
     Reports required under section 5309(m)(4); and
       ``(D) the contractor's financial and technical 
     resources.''.
       (b) Conforming Amendments.--Chapter 53 is amended by 
     striking section 5326.

     SEC. 3025. PROJECT MANAGEMENT OVERSIGHT AND REVIEW.

       (a) Project Management Plan Requirements.--Section 5327(a) 
     is amended--
       (1) in paragraph (11), by striking ``and'' at the end;
       (2) in paragraph (12), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(13) safety and security management.''.
       (b) Limitations on Use of Available Amounts.--Section 
     5327(c) is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) In general.--The Secretary may not use more than 1 
     percent of amounts made available for a fiscal year to carry 
     out any of sections 5307 through 5311, 5316, or 5317, or a 
     project under the National Capital Transportation Act of 1969 
     (Public Law 91-143) to make a contract to oversee the 
     construction of major projects under any of sections 5307 
     through 5311, 5316, or 5317 or under that Act.'';
       (2) in paragraph (2)--
       (A) by striking ``(2)'' and inserting the following:
       ``(2) Other allowable uses.--''; and
       (B) by inserting ``and security'' after ``safety''; and
       (3) in paragraph (3), by striking ``(3) The Government 
     shall'' and inserting the following:
       ``(3) Federal share.--Federal funds shall be used to''.

     SEC. 3026. PROJECT REVIEW.

       Section 5328 is amended--
       (1) in subsection (a)--
       (A) in paragraph (1) by striking ``(1) When the Secretary 
     of Transportation allows a new fixed guideway project to 
     advance into the alternatives analysis stage of project 
     review, the Secretary shall cooperate with the applicant'' 
     and inserting the following:
       ``(1) Alternatives analysis.--The Secretary shall cooperate 
     with an applicant undertaking an alternatives analysis under 
     subsections (e) and (f) of section 5309'';
       (B) in paragraph (2)--
       (i) by striking ``(2)'' and inserting the following:
       ``(2) Advancement to preliminary engineering stage.--''; 
     and
       (ii) by striking ``is consistent with'' and inserting 
     ``meets the requirements of'';
       (C) in paragraph (3)--
       (i) by striking ``(3)'' and inserting the following:
       ``(3) Record of decision.--'';
       (ii) by striking ``of construction''; and
       (iii) by adding before the period at the end the following: 
     ``if the Secretary determines that the project meets the 
     requirements of subsection (e) or (f) of section 5309''; and
       (D) by striking paragraph (4); and
       (2) by striking subsection (c).

     SEC. 3027. INVESTIGATIONS OF SAFETY AND SECURITY RISK.

       (a) In General.--Section 5329 is amended to read as 
     follows:

     ``Sec. 5329. Investigation of safety hazards and security 
       risks

       ``(a) In General.--The Secretary may conduct investigations 
     into safety hazards and security risks associated with a 
     condition in equipment, a facility, or an operation financed 
     under this chapter to establish the nature and extent of the 
     condition and how to eliminate, mitigate, or correct it.
       ``(b) Submission of Corrective Plan.--If the Secretary 
     establishes that a safety hazard or security risk warrants 
     further protective measures, the Secretary shall require the 
     local governmental authority receiving amounts under this 
     chapter to submit a plan for eliminating, mitigating, or 
     correcting it.
       ``(c) Withholding of Funds.--Financial assistance under 
     this chapter, in an amount to be determined by the Secretary, 
     may be withheld until a plan is approved and carried out.
       ``(d) Public Transportation Security.--
       ``(1) In general.--Not later than 90 days after the date of 
     enactment of the Federal Public Transportation Act of 2004, 
     the Secretary shall enter into a memorandum of understanding 
     with the Secretary of Homeland Security to define and clarify 
     the respective roles and responsibilities of the Department 
     of Transportation and the Department of Homeland Security 
     relating to public transportation security.
       ``(2) Contents.--The memorandum of understanding described 
     in paragraph (1) shall--
       ``(A) establish national security standards for public 
     transportation agencies;
       ``(B) establish funding priorities for grants from the 
     Department of Homeland Security to public transportation 
     agencies;
       ``(C) create a method of coordination with public 
     transportation agencies on security matters; and
       ``(D) address any other issues determined to be appropriate 
     by the Secretary and the Secretary of Homeland Security.''.
       (b) Conforming Amendment.--The item relating to section 
     5329 in the table of sections for chapter 53 is amended to 
     read as follows:

``5329. Investigation of safety hazards and security risks.''.

     SEC. 3028. STATE SAFETY OVERSIGHT.

       (a) In General.--Section 5330 is amended--
       (1) by amending the heading to read as follows:

     ``Sec. 5330. Withholding amounts for noncompliance with State 
       safety oversight requirements'';

       (2) by amending subsection (a) to read as follows:
       ``(a) Application.--This section shall only apply to--
       ``(1) States that have rail fixed guideway public 
     transportation systems that are not subject to regulation by 
     the Federal Railroad Administration; and
       ``(2) States that are designing rail fixed guideway public 
     transportation systems that will not be subjected to 
     regulation by the Federal Railroad Administration.'';
       (3) in subsection (d), by striking ``affected States'' and 
     inserting the following: ``affected States--
       ``(1) shall ensure uniform safety standards and 
     enforcement; or
       ``(2) may designate''; and
       (4) in subsection (f), by striking ``Not later than 
     December 18, 1992, the'' and inserting ``The''.
       (b) Conforming Amendment.--The item relating to section 
     5330 in the table of sections for chapter 53 is amended to 
     read as follows:

``5330. Withholding amounts for noncompliance with State safety 
              oversight requirements.''.

     SEC. 3029. SENSITIVE SECURITY INFORMATION.

       Section 40119(b) is amended--
       (1) in paragraph (1)(C), by inserting ``, transportation 
     facilities or infrastructure, or transportation employees'' 
     before the period at the end; and
       (2) by adding at the end the following:
       ``(3) A State or local government may not enact, enforce, 
     prescribe, issue, or continue in effect any law, regulation, 
     standard, or order to the extent it is inconsistent with this 
     section or regulations prescribed under this section.''.

     SEC. 3030. TERRORIST ATTACKS AND OTHER ACTS OF VIOLENCE 
                   AGAINST PUBLIC TRANSPORTATION SYSTEMS.

       (a) In General.--Section 1993 of title 18, United States 
     Code, is amended--
       (1) by striking ``mass'' each place it appears and 
     inserting ``public'';
       (2) in subsection (a)(5), by inserting ``controlling,'' 
     after ``operating''; and
       (3) in subsection (c)(5), by striking ``5302(a)(7) of title 
     49, United States Code,'' and inserting ``5302(a) of title 
     49,''.
       (b) Conforming Amendment.--The table of contents for 
     chapter 97 of title 18, United States Code is amended by 
     amending the item related to section 1993 to read as follows:

``1993. Terrorist attacks and other acts of violence against public 
              transportation systems.''.

     SEC. 3031. CONTROLLED SUBSTANCES AND ALCOHOL MISUSE TESTING.

       Section 5331 is amended--
       (1) in subsection (a)(3), by inserting before the period at 
     the end the following: ``or sections 2303a, 7101(i), or 
     7302(e) of title 46. The Secretary may also decide that a 
     form of public transportation is covered adequately, for 
     employee alcohol and controlled substances testing purposes, 
     under the alcohol and controlled substance statutes or 
     regulations of an agency within the Department of 
     Transportation or other Federal agency''; and
       (2) in subsection (f), by striking paragraph (3).

     SEC. 3032. EMPLOYEE PROTECTIVE ARRANGEMENTS.

       Section 5333(b) is amended--
       (1) in paragraph (3), by striking the period at the end and 
     inserting ``: Provided, That--
       ``(A) the protective period shall not exceed 4 years; and
       ``(B) the separation allowance shall not exceed 12 
     months.''; and
       (2) by adding at the end the following:
       ``(4) An arrangement under this subsection shall not 
     guarantee continuation of employment as a result of a change 
     in private contractors through competitive bidding unless 
     such continuation is otherwise required under subparagraph 
     (A), (B), or (D) of paragraph (2).
       ``(5) Fair and equitable arrangements to protect the 
     interests of employees utilized by the Secretary of Labor for 
     assistance to purchase like-kind equipment or facilities, and 
     amendments to existing assistance agreements, shall be 
     certified without referral.
       ``(6) Nothing in this subsection shall affect the level of 
     protection provided to freight railroad employees.''.

     SEC. 3033. ADMINISTRATIVE PROCEDURES.

       Section 5334 is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``5309-5311 of this 
     title'' and all that follows and inserting ``5309 through 
     5311;'';
       (B) in paragraph (9), by striking ``and'' at the end;
       (C) in paragraph (10), by striking the period at the end 
     and inserting ``; and''; and
       (D) by inserting at the end the following:
       ``(11) issue regulations as necessary to carry out the 
     purposes of this chapter.'';
       (2) by redesignating subsections (b), (c), (d), (e), (f), 
     (g), (h), (i), and (j) as subsections (c), (d), (e), (f), 
     (g), (h), (i), (j), and (k), respectively;
       (3) by adding after subsection (a) the following:
       ``(b) Prohibitions Against Regulating Operations and 
     Charges.--

[[Page 10900]]

       ``(1) In general.--Except as directed by the President for 
     purposes of national defense or in the event of a national or 
     regional emergency, the Secretary may not regulate--
       ``(A) the operation, routes, or schedules of a public 
     transportation system for which a grant is made under this 
     chapter; or
       ``(B) the rates, fares, tolls, rentals, or other charges 
     prescribed by any public or private transportation provider.
       ``(2) Compliance with agreement.--Nothing in this 
     subsection shall prevent the Secretary from requiring a 
     recipient of funds under this chapter to comply with the 
     terms and conditions of its Federal assistance agreement.''; 
     and
       (4) in subsection (j)(1), as redesignated, by striking 
     ``carry out section 5312(a) and (b)(1) of this title'' and 
     inserting ``advise and assist the Secretary in carrying out 
     section 5312(a)''.

     SEC. 3034. REPORTS AND AUDITS.

       Section 5335 is amended--
       (1) by striking subsection (b); and
       (2) in subsection (a)--
       (A) in paragraph (1), by striking ``(1)''; and
       (B) in paragraph (2), by striking ``(2) The Secretary may 
     make a grant under section 5307 of this title'' and inserting 
     the following:
       ``(b) Reporting and Uniform Systems.--The Secretary may 
     award a grant under section 5307 or 5311''.

     SEC. 3035. APPORTIONMENTS OF APPROPRIATIONS FOR FORMULA 
                   GRANTS.

       Section 5336 is amended--
       (1) by striking subsection (d);
       (2) by striking subsection (h);
       (3) by striking subsection (k);
       (4) by redesignating subsections (a) through (c) as 
     subsections (b) through (d), respectively;
       (5) by adding before subsection (b), as redesignated, the 
     following:
       ``(a) Apportionments.--Of the amounts made available for 
     each fiscal year under subsections (a)(1)(C)(vi) and 
     (b)(2)(L) of section 5338--
       ``(1) there shall be apportioned, in fiscal year 2005 and 
     each fiscal year thereafter, $35,000,000 to certain urbanized 
     areas with populations of less than 200,000 in accordance 
     with subsection (k); and
       ``(2) any amount not apportioned under paragraph (1) shall 
     be apportioned to urbanized areas in accordance with 
     subsections (b) through (d).'';
       (6) in subsection (b), as redesignated--
       (A) by striking ``Of the amount made available or 
     appropriated under section 5338(a) of this title'' and 
     inserting ``Of the amount apportioned under subsection 
     (a)(3)''; and
       (B) in paragraph (2), by striking ``subsections (b) and (c) 
     of this section'' and inserting ``subsections (c) and (d)'';
       (7) in subsection (c)(2), as redesignated, by striking 
     ``subsection (a)(2) of this section'' and inserting 
     ``subsection (b)(2)'';
       (8) in subsection (d), as redesignated, by striking 
     ``subsection (a)(2) of this section'' and inserting 
     ``subsection (b)(2)'';
       (9) in subsection (e)(1), by striking ``subsections (a) and 
     (h)(2) of section 5338 of this title'' and inserting 
     ``subsections (a) and (b) of section 5338'';
       (10) in subsection (g), by striking ``subsection (a)(1) of 
     this section'' each place it appears and inserting 
     ``subsection (b)(1)''; and
       (11) by adding at the end the following:
       ``(k) Small Transit Intensive Cities Factors.--The amount 
     apportioned under subsection (a)(1) shall be apportioned to 
     urbanized areas as follows:
       ``(1) The Secretary shall calculate a factor equal to the 
     sum of revenue vehicle hours operated within urbanized areas 
     with a population of between 200,000 and 1,000,000 divided by 
     the sum of the population of all such urbanized areas.
       ``(2) The Secretary shall designate as eligible for an 
     apportionment under this subsection all urbanized areas with 
     a population of under 200,000 for which the number of revenue 
     vehicle hours operated within the urbanized area divided by 
     the population of the urbanized area exceeds the factor 
     calculated under paragraph (1).
       ``(3) For each urbanized area qualifying for an 
     apportionment under paragraph (2), the Secretary shall 
     calculate an amount equal to the product of the population of 
     that urbanized area and the factor calculated under paragraph 
     (1).
       ``(4) For each urbanized area qualifying for an 
     apportionment under paragraph (2), the Secretary shall 
     calculate an amount equal to the difference between the 
     number of revenue vehicle hours within that urbanized area 
     less the amount calculated in paragraph (3).
       ``(5) Each urbanized area qualifying for an apportionment 
     under paragraph (2) shall receive an amount equal to the 
     amount to be apportioned under this subsection multiplied by 
     the amount calculated for that urbanized area under paragraph 
     (4) divided by the sum of the amounts calculated under 
     paragraph (4) for all urbanized areas qualifying for an 
     apportionment under paragraph (2).
       ``(l) Study on Incentives in Formula Programs.--
       ``(1) Study.--The Secretary shall conduct a study to assess 
     the feasibility and appropriateness of developing and 
     implementing an incentive funding system under sections 5307 
     and 5311 for operators of public transportation.
       ``(2) Report.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of the Federal Public Transportation Act of 2004, 
     the Secretary shall submit a report on the results of the 
     study conducted under paragraph (1) to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Transportation and Infrastructure of the House 
     of Representatives.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall include--
       ``(i) an analysis of the availability of appropriate 
     measures to be used as a basis for the distribution of 
     incentive payments;
       ``(ii) the optimal number and size of any incentive 
     programs;
       ``(iii) what types of systems should compete for various 
     incentives;
       ``(iv) how incentives should be distributed; and
       ``(v) the likely effects of the incentive funding 
     system.''.

     SEC. 3036. APPORTIONMENTS FOR FIXED GUIDEWAY MODERNIZATION.

       Section 5337 is amended--
       (1) in subsection (a), by striking ``for each of fiscal 
     years 1998 through 2003''; and
       (2) by striking ``section 5336(b)(2)(A)'' each place it 
     appears and inserting ``section 5336(c)(2)(A)''.

     SEC. 3037. AUTHORIZATIONS.

       Section 5338 is amended to read as follows:

     ``Sec. 5338. Authorizations

       ``(a) Fiscal Year 2004.--
       ``(1) Formula grants.--
       ``(A) Trust fund.--For fiscal year 2004, $3,053,079,920 
     shall be available from the Mass Transit Account of the 
     Highway Trust Fund to carry out sections 5307, 5309, 5310, 
     and 5311 of this chapter and section 3038 of the 
     Transportation Equity Act for the 21st Century (49 U.S.C. 
     5310 note).
       ``(B) General fund.--In addition to the amounts made 
     available under subparagraph (A), there are authorized to be 
     appropriated $763,269,980 for fiscal year 2004 to carry out 
     sections 5307, 5309, 5310, and 5311 of this chapter and 
     section 3038 of the Transportation Equity Act for the 21st 
     Century (49 U.S.C. 5310 note).
       ``(C) Allocation of funds.--Of the amounts made available 
     or appropriated under this paragraph--
       ``(i) $4,821,335 shall be available to the Alaska Railroad 
     for improvements to its passenger operations under section 
     5307;
       ``(ii) $6,908,995 shall be available to provide over-the-
     road bus accessibility grants under section 3038 of the 
     Transportation Equity Act for the 21st Century (49 U.S.C. 
     5310 note);
       ``(iii) $90,117,950 shall be available to provide 
     transportation services to elderly individuals and 
     individuals with disabilities under section 5310;
       ``(iv) $239,188,058 shall be available to provide financial 
     assistance for other than urbanized areas under section 5311;
       ``(v) $3,425,608,562 shall be available to provide 
     financial assistance for urbanized areas under section 5307; 
     and
       ``(vi) $49,705,000 shall be available to provide financial 
     assistance for buses and bus facilities under section 5309..
       ``(2) Job access and reverse commute.--
       ``(A) Trust fund.--For fiscal year 2004, $99,410,000 shall 
     be available from the Mass Transit Account of the Highway 
     Trust Fund to carry out section 3037 of the Transportation 
     Equity Act for the 21st Century (49 U.S.C. 5309 note).
       ``(B) General fund.--In addition to the amounts made 
     available under paragraph (A), there are authorized to be 
     appropriated $24,852,500 for fiscal year 2004 to carry out 
     section 3037 of the Transportation Equity Act of the 21st 
     Century (49 U.S.C. 5309 note).
       ``(3) Capital program grants.--
       ``(A) Trust fund.--For fiscal year 2004, $2,495,191,000 
     shall be available from the Mass Transit Account of the 
     Highway Trust Fund to carry out section 5309.
       ``(B) General fund.--In addition to the amounts made 
     available under subparagraph (A), there are authorized to be 
     appropriated $623,797,750 for fiscal year 2004 to carry out 
     section 5309.
       ``(4) Planning.--
       ``(A) Trust fund.--For fiscal year 2004, $58,254,260 shall 
     be available from the Mass Transit Account of the Highway 
     Trust Fund to carry out section 5308.
       ``(B) General fund.--In addition to the amounts made 
     available under subparagraph (A), there are authorized to be 
     appropriated $14,315,040 for fiscal year 2004 to carry out 
     section 5308.
       ``(C) Allocation of funds.--Of the amounts made available 
     or appropriated under this paragraph--
       ``(i) 82.72 percent shall be allocated for metropolitan 
     planning under section 5308(c); and
       ``(ii) 17.28 percent shall be allocated for State planning 
     under section 5308(d).
       ``(5) Research.--
       ``(A) Trust fund.--For fiscal year 2004, $41,951,020 shall 
     be available from the Mass Transit Account of the Highway 
     Trust Fund to carry out sections 5311(b), 5312, 5313, 5314, 
     5315, and 5322.
       ``(B) General fund.--In addition to the amounts made 
     available under subparagraph (A), there are authorized to be 
     appropriated $10,736,280 for fiscal year 2004 to carry out 
     sections 5311(b), 5312, 5313, 5314, 5315, and 5322.
       ``(C) Allocation of funds.--Of the funds made available or 
     appropriated under this paragraph--
       ``(i) not less than $3,976,400 shall be available to carry 
     out programs of the National Transit Institute under section 
     5315;
       ``(ii) not less than $5,219,025 shall be available to carry 
     out section 5311(b)(2);

[[Page 10901]]

       ``(iii) not less than $8,201,325 shall be available to 
     carry out section 5313; and
       ``(iv) the remainder shall be available to carry out 
     national research and technology programs under sections 
     5312, 5314, and 5322.
       ``(6) University transportation research.--
       ``(A) Trust fund.--For fiscal year 2004, $4,771,680 shall 
     be available from the Mass Transit Account of the Highway 
     Trust Fund to carry out sections 5505 and 5506.
       ``(B) General fund.--In addition to amounts made available 
     under subparagraph (A), there are authorized to be 
     appropriated $1,192,920 for fiscal year 2004 to carry out 
     sections 5505 and 5506.
       ``(C) Allocation of funds.--Of the amounts made available 
     or appropriated under this paragraph--
       ``(i) $1,988,200 shall be available for grants under 
     5506(f)(5) to the institution identified in section 
     5505(j)(3)(E), as in effect on the day before the date of 
     enactment of the Federal Public Transportation Act of 2004;
       ``(ii) $1,988,200 shall be available for grants under 
     section 5505(d) to the institution identified in section 
     5505(j)(4)(A), as in effect on the date specified in clause 
     (i); and
       ``(iii) $1,988,200 shall be available for grants under 
     section 5505(d) to the institution identified in section 
     5505(j)(4)(F), as in effect on the date specified in 
     subclause (I).
       ``(C) Special rule.--Nothing in this paragraph shall be 
     construed to limit the transportation research conducted by 
     the centers receiving financial assistance under this 
     section.
       ``(7) Administration.--
       ``(A) Trust fund.--For fiscal year 2004, $60,043,640 shall 
     be available from the Mass Transit Account of the Highway 
     Trust Fund to carry out section 5334.
       ``(B) General fund.--In addition to amounts made available 
     under subparagraph (A), there are authorized to be 
     appropriated $15,010,910 for fiscal year 2004 to carry out 
     section 5334.
       ``(8) Grants as contractual obligations.--
       ``(A) Grants financed from highway trust fund.--A grant or 
     contract that is approved by the Secretary and financed with 
     amounts made available under paragraph (1)(A), (2)(A), 
     (3)(A), (4)(A), (5)(A), (6)(A), or (7)(A) is a contractual 
     obligation of the United States Government to pay the Federal 
     share of the cost of the project.
       ``(B) Grants financed from general fund.--A grant or 
     contract that is approved by the Secretary and financed with 
     amounts appropriated in advance under paragraph (1)(B), 
     (2)(B), (3)(B), (4)(B), (5)(B), (6)(B), or (7)(B) is a 
     contractual obligation of the United States Government to pay 
     the Federal share of the cost of the project only to the 
     extent that amounts are appropriated for such purpose by an 
     Act of Congress.
       ``(9) Availability of Amounts.--Amounts made available or 
     appropriated under paragraphs (1) through (6) shall remain 
     available until expended.''.
       ``(b) Formula Grants and Research.--
       ``(1) In general.--There shall be available from the Mass 
     Transit Account of the Highway Trust Fund to carry out 
     sections 5307, 5308, 5309, 5310 through 5316, 5322, 5335, 
     5340, and 5505 of this title, and sections 3037 and 3038 of 
     the Federal Transit Act of 1998 (112 Stat. 387 et seq.)--
       ``(A) $6,262,600,000 for fiscal year 2005;
       ``(B) $6,577,629,000 for fiscal year 2006;
       ``(C) $6,950,400,000 for fiscal year 2007;
       ``(D) $7,594,760,000 for fiscal year 2008; and
       ``(E) $8,275,320,000 for fiscal year 2009.
       ``(2) Allocation of funds.--Of the amounts made available 
     under paragraph (1) for each fiscal year--
       ``(A) 0.092 percent shall be available for grants to the 
     Alaska Railroad under section 5307 for improvements to its 
     passenger operations;
       ``(B) 1.75 percent shall be available to carry out section 
     5308;
       ``(C) 2.05 percent shall be available to provide financial 
     assistance for job access and reverse commute projects under 
     section 3037 of the Federal Transit Act of 1998 (49 U.S.C. 
     5309 note);
       ``(D) 3.00 percent shall be available to provide financial 
     assistance for services for elderly persons and persons with 
     disabilities under section 5310;
       ``(E) 0.125 percent shall be available to carry out section 
     3038 of the Transportation Equity Act for the 21st Century 
     (49 U.S.C. 5310 note);
       ``(F) 6.25 percent shall be available to provide financial 
     assistance for other than urbanized areas under section 5311;
       ``(G) 0.89 percent shall be available to carry out transit 
     cooperative research programs under section 5313, the 
     National Transit Institute under section 5315, university 
     research centers under section 5505, and national research 
     programs under sections 5312, 5313, 5314, and 5322, of 
     which--
       ``(i) 17.0 percent shall be allocated to carry out transit 
     cooperative research programs under section 5313;
       ``(ii) 7.5 percent shall be allocated to carry out programs 
     under the National Transit Institute under section 5315, 
     including not more than $1,000,000 to carry out section 
     5315(a)(16);
       ``(iii) 11.0 percent shall be allocated to carry out the 
     university centers program under section 5505; and
       ``(iv) any funds made available under this subparagraph 
     that are not allocated under clauses (i) through (iii) shall 
     be allocated to carry out national research programs under 
     sections 5312, 5313, 5314, and 5322;
       ``(H) $25,000,000 shall be available for each of the fiscal 
     years 2005 through 2009 to carry out section 5316;
       ``(I) there shall be available to carry out section 5335--
       ``(i) $3,700,000 in fiscal year 2005;
       ``(ii) $3,900,000 in fiscal year 2006;
       ``(iii) $4,200,000 in fiscal year 2007;
       ``(iv) $4,600,000 in fiscal year 2008; and
       ``(v) $5,000,000 in fiscal year 2009;
       ``(J) 6.25 percent shall be allocated in accordance with 
     section 5340 to provide financial assistance for urbanized 
     areas under section 5307 and other than urbanized areas under 
     section 5311; and
       ``(K) 22.0 percent shall be allocated in accordance with 
     section 5337 to provide financial assistance under section 
     5309(i)(3); and
       ``(L) any amounts not made available under subparagraphs 
     (A) through (K) shall be allocated in accordance with section 
     5336 to provide financial assistance for urbanized areas 
     under section 5307.
       ``(3) University centers program.--
       ``(A) Allocation.--Of the amounts allocated under paragraph 
     (2)(G)(iii), $1,000,000 shall be available in each of the 
     fiscal years 2005 through 2009 for Morgan State University to 
     provide transportation research, training, and curriculum 
     development.
       ``(B) Requirements.--The university specified under 
     subparagraph (A) shall be considered a University 
     Transportation Center under section 510 of title 23, and 
     shall be subject to the requirements under subsections (c), 
     (d), (e), and (f) of such section.
       ``(C) Report.--In addition to the report required under 
     section 510(e)(3) of title 23, the university specified under 
     subparagraph (A) shall annually submit a report to the 
     Secretary that describes the university's contribution to 
     public transportation.
       ``(4) Bus grants.--In addition to the amounts made 
     available under paragraph (1), there shall be available from 
     the Mass Transit Account of the Highway Trust Fund to carry 
     out section 5309(i)(2)(B)--
       ``(A) $839,829,000 for fiscal year 2005;
       ``(B) $882,075,000 for fiscal year 2006;
       ``(C) $932,064,000 for fiscal year 2007;
       ``(D) $1,018,474,000 for fiscal year 2008; and
       ``(E) $1,109,739,000 for fiscal year 2009.
       ``(c) Major Capital Investment Grants.--There are 
     authorized to be appropriated to carry out section 
     5309(i)(2)(A)--
       ``(1) $1,461,072,000 for fiscal year 2005;
       ``(2) $1,534,568,000 for fiscal year 2006;
       ``(3) $1,621,536,000 for fiscal year 2007;
       ``(4) $1,771,866,000 for fiscal year 2008; and
       ``(5) $1,930,641,000 for fiscal year 2009.
       ``(d) Administration.--There shall be available from the 
     Mass Transit Account of the Highway Trust Fund to carry out 
     section 5334--
       ``(1) $86,500,000 for fiscal year 2005;
       ``(2) $90,851,000 for fiscal year 2006;
       ``(3) $96,000,000 for fiscal year 2007;
       ``(4) $104,900,000 for fiscal year 2008; and
       ``(5) $114,300,000 for fiscal year 2009.
       ``(e) Grants as Contractual Obligations.--
       ``(1) Mass transit account funds.--A grant or contract 
     approved by the Secretary that is financed with amounts made 
     available under subsection (b)(1) or (d) is a contractual 
     obligation of the United States Government to pay the Federal 
     share of the cost of the project.
       ``(2) Appropriated funds.--A grant or contract approved by 
     the Secretary that is financed with amounts made available 
     under subsection (b)(2) or (c) is a contractual obligation of 
     the United States Government to pay the Federal share of the 
     cost of the project only to the extent that amounts are 
     appropriated in advance for such purpose by an Act of 
     Congress.
       ``(f) Availability of Amounts.--Amounts made available by 
     or appropriated under subsections (b) and (c) shall remain 
     available until expended.''.

     SEC. 3038. APPORTIONMENTS BASED ON GROWING STATES FORMULA 
                   FACTORS.

       (a) In General.--Chapter 53 is amended by adding at the end 
     the following:

     ``Sec. 5340. Apportionments based on growing States and high 
       density State formula factors

       ``(a) Allocation.--Of the amounts made available for each 
     fiscal year under section 5338(b)(2)(J), the Secretary shall 
     apportion--
       ``(1) 50 percent to States and urbanized areas in 
     accordance with subsection (b); and
       ``(2) 50 percent to States and urbanized areas in 
     accordance with subsection (c).
       ``(b) Growing State Apportionments.--
       ``(1) Apportionment among states.--The amounts apportioned 
     under paragraph (a)(1) shall provide each State with an 
     amount equal to the total amount apportioned multiplied by a 
     ratio equal to the population of that State forecast for the 
     year that is 15 years after the most recent decennial census, 
     divided by the total population of all States forecast for 
     the year that is 15 years after the most recent decennial 
     census. Such forecast shall be based on the population trend 
     for each State between the most recent decennial census and 
     the most recent estimate of population made by the Secretary 
     of Commerce.
       ``(2) Apportionments between urbanized areas and other than 
     urbanized areas in each state.--
       ``(A) In general.--The Secretary shall apportion amounts to 
     each State under paragraph (1) so that urbanized areas in 
     that State receive an amount equal to the amount apportioned 
     to that State multiplied by a ratio equal to the sum of the 
     forecast population of all urbanized areas in that State 
     divided by the total forecast population of that State. In 
     making the apportionment under this subparagraph, the 
     Secretary shall utilize any available forecasts made by the 
     State. If no forecasts are available, the Secretary shall 
     utilize data on urbanized areas and

[[Page 10902]]

     total population from the most recent decennial census.
       ``(B) Remaining amounts.--Amounts remaining for each State 
     after apportionment under subparagraph (A) shall be 
     apportioned to that State and added to the amount made 
     available for grants under section 5311.
       ``(3) Apportionments among urbanized areas in each state.--
     The Secretary shall apportion amounts made available to 
     urbanized areas in each State under subsection (b)(2)(A) so 
     that each urbanized area receives an amount equal to the 
     amount apportioned under subsection (b)(2)(A) multiplied by a 
     ratio equal to the population of each urbanized area divided 
     by the sum of populations of all urbanized areas in the 
     State. Amounts apportioned to each urbanized area shall be 
     added to amounts apportioned to that urbanized area under 
     section 5336, and made available for grants under section 
     5307.
       ``(c) High Density State Apportionments.--Amounts to be 
     apportioned under subsection (a)(2) shall be apportioned as 
     follows:
       ``(1) Eligible states.--The Secretary shall designate as 
     eligible for an apportionment under this subsection all 
     States with a population density in excess of 370 persons per 
     square mile.
       ``(2) State urbanized land factor.--For each State 
     qualifying for an apportionment under paragraph (1), the 
     Secretary shall calculate an amount equal to the product of 
     the urban land area of urbanized areas in the State times 370 
     persons per square mile.
       ``(3) State apportionment factor.--For each State 
     qualifying for an apportionment under paragraph (1), the 
     Secretary shall calculate an amount equal to the difference 
     between the total population of the State less the amount 
     calculated in paragraph (2).
       ``(4) State apportionment.--Each State qualifying for an 
     apportionment under paragraph (1) shall receive an amount 
     equal to the amount to be apportioned under this subsection 
     multiplied by the amount calculated for the State under 
     paragraph (3) divided by the sum of the amounts calculated 
     under paragraph (3) for all States qualifying for an 
     apportionment under paragraph (1).
       ``(5) Apportionments between urbanized areas and other than 
     urbanized areas in each state.--
       ``(A) In general.--The Secretary shall apportion amounts 
     apportioned to each State under paragraph (4) so that 
     urbanized areas in that State receive an amount equal to the 
     amount apportioned to that State multiplied by a ratio equal 
     to the sum of the population of all urbanized areas in that 
     State divided by the total population of that State.
       ``(B) Remaining amounts.--Amounts remaining for each State 
     after apportionment under subparagraph (a) shall be 
     apportioned to that State and added to the amount made 
     available for grants under section 5311.
       ``(6) Apportionments among urbanized areas in each state.--
     The Secretary shall apportion amounts made available to 
     urbanized areas in each State under subsection (c)(5)(A) so 
     that each urbanized area receives an amount equal to the 
     amount apportioned under subsection (c)(5)(A) multiplied by a 
     ratio equal to the population of each urbanized area divided 
     by the sum of populations of all urbanized areas in the 
     State. Amounts apportioned to each urbanized area shall be 
     added to amounts apportioned to that urbanized area under 
     section 5336, and made available for grants under section 
     5307.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 53 is amended by adding at the end the following:

``5340. Apportionments based on growing States and high density States 
              formula factors.''.

     SEC. 3039. JOB ACCESS AND REVERSE COMMUTE GRANTS.

       Section 3037 of the Federal Transit Act of 1998 (49 U.S.C. 
     5309 note) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) by striking ``means an individual'' and inserting the 
     following: ``means--
       ``(A) an individual''; and
       (ii) by striking the period at the end and inserting ``; or
       ``(B) an individual who is eligible for assistance under 
     the State program of Temporary Assistance to Needy Families 
     funded under part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et. seq.) in the State in which the recipient 
     of a grant under this section is located.''; and
       (B) in paragraph (2), by striking ``development of'' each 
     place it appears and inserting ``development and provision 
     of'';
       (2) in subsection (i), by amending paragraph (2) to read as 
     follows:
       ``(2) Coordination.--
       ``(A) In general.--The Secretary shall coordinate 
     activities under this section with related activities under 
     programs of other Federal departments and agencies.
       ``(B) Certification.--A recipient of funds under this 
     section shall certify that--
       ``(i) the project has been derived from a locally 
     developed, coordinated public transit human services 
     transportation plan; and
       ``(ii) the plan was developed through a process that 
     included representatives of public, private, and nonprofit 
     transportation and human services providers and participation 
     by the public.'';
       (3) by amending subsection (j) to read as follows:
       ``(j) Grant Requirements.--
       ``(1) In general.--
       ``(A) Urbanized areas.--A grant awarded under this section 
     to a public agency or private company engaged in public 
     transportation in an urbanized area shall be subject to the 
     all of the terms and conditions to which a grant awarded 
     under section 5307 of title 49, United States Code, is 
     subject, to the extent the Secretary considers appropriate.
       ``(B) Other than urbanized areas.--A grant awarded under 
     this section to a public agency or a private company engaged 
     in public transportation in an area other than urbanized 
     areas shall be subject to all of the terms and conditions to 
     which a grant awarded under section 5311 of title 49, United 
     States Code, is subject, to the extent the Secretary 
     considers appropriate.
       ``(C) Nonprofit organizations.--A grant awarded under this 
     section to a private nonprofit organization shall be subject 
     to all of the terms and conditions to which a grant made 
     under section 5310 of title 49, United States Code, is 
     subject, to the extent the Secretary considers appropriate.
       ``(2) Special warranty.--
       ``(A) In general.--Section 5333(b) of title 49, United 
     States Code, shall apply to grants under this section if the 
     Secretary of Labor utilizes a Special Warranty that provides 
     a fair and equitable arrangement to protect the interests of 
     employees.
       ``(B) Waiver.--The Secretary may waive the applicability of 
     the Special Warranty under subparagraph (A) for private non-
     profit recipients on a case-by-case basis as the Secretary 
     considers appropriate.''; and
       (4) by striking subsections (k) and (l).

     SEC. 3040. OVER-THE-ROAD BUS ACCESSIBILITY PROGRAM.

       (a) Section Heading.--The section heading for section 3038 
     of the Federal Transit Act of 1998 (49 U.S.C. 5310 note), is 
     amended to read as follows:

     ``SEC. 3038. OVER-THE-ROAD BUS ACCESSIBILITY PROGRAM.''.

       (b) Funding.--Section 3038(g) of the Federal Transit Act of 
     1998 (49 U.S.C. 5310 note) is amended to read as follows:
       ``(g) Funding.--Of the amounts made available for each 
     fiscal year under subsections (a)(1)(C)(iii) and (b)(2)(E) of 
     section 5338 of title 49, United States Code--
       ``(1) 75 percent shall be available, and shall remain 
     available until expended, for operators of over-the-road 
     buses, used substantially or exclusively in intercity, fixed-
     route over-the-road bus service, to finance the incremental 
     capital and training costs of the Department of 
     Transportation's final rule regarding accessibility of over-
     the-road buses; and
       ``(2) 25 percent shall be available, and shall remain 
     available until expended, for operators of over-the-road bus 
     service not described in paragraph (1), to finance the 
     incremental capital and training costs of the Department of 
     Transportation's final rule regarding accessibility of over-
     the-road buses.''.
       (b) Conforming Amendment.--The item relating to section 
     3038 in the table of contents for the Transportation Equity 
     Act for the 21st Century (Public Law 105-178) is amended to 
     read as follows:

``Sec. 3038. Over-the-road bus accessibility program.''.

     SEC. 3041. ALTERNATIVE TRANSPORTATION IN PARKS AND PUBLIC 
                   LANDS.

       (a) In General.--Chapter 53 is amended by inserting after 
     section 5315 the following:

     ``Sec. 5316. Alternative transportation in parks and public 
       lands

       ``(a) In General.--
       ``(1) Authorization.--
       ``(A) In general.--The Secretary, in consultation with the 
     Secretary of the Interior, may award a grant or enter into a 
     contract, cooperative agreement, interagency agreement, 
     intraagency agreement, or other transaction to carry out a 
     qualified project under this section to enhance the 
     protection of America's National Parks and public lands and 
     increase the enjoyment of those visiting the parks and public 
     lands by ensuring access to all, including persons with 
     disabilities, improving conservation and park and public land 
     opportunities in urban areas through partnering with state 
     and local governments, and improving park and public land 
     transportation infrastructure.
       ``(B) Consultation with other agencies.--To the extent that 
     projects are proposed or funded in eligible areas that are 
     not within the jurisdiction of the Department of the 
     Interior, the Secretary of the Interior shall consult with 
     the heads of the relevant Federal land management agencies in 
     carrying out the responsibilities under this section.
       ``(2) Use of funds.--A grant, cooperative agreement, 
     interagency agreement, intraagency agreement, or other 
     transaction for a qualified project under this section shall 
     be available to finance the leasing of equipment and 
     facilities for use in public transportation, subject to any 
     regulation that the Secretary may prescribe limiting the 
     grant or agreement to leasing arrangements that are more 
     cost-effective than purchase or construction.
       ``(b) Definitions.--As used in this section, the following 
     definitions shall apply:
       ``(1) Eligible area.--The term `eligible area' means any 
     federally owned or managed park, refuge, or recreational area 
     that is open to the general public, including--
       ``(A) a unit of the National Park System;
       ``(B) a unit of the National Wildlife Refuge System;
       ``(C) a recreational area managed by the Bureau of Land 
     Management; and
       ``(D) a recreation area managed by the Bureau of 
     Reclamation.

[[Page 10903]]

       ``(2) Federal land management agency.--The term `Federal 
     land management agency' means a Federal agency that manages 
     an eligible area.
       ``(3) Alternative transportation.--The term `alternative 
     transportation' means transportation by bus, rail, or any 
     other publicly or privately owned conveyance that provides to 
     the public general or special service on a regular basis, 
     including sightseeing service.
       ``(4) Qualified participant.--The term `qualified 
     participant' means--
       ``(A) a Federal land management agency; or
       ``(B) a State, tribal, or local governmental authority with 
     jurisdiction over land in the vicinity of an eligible area 
     acting with the consent of the Federal land management 
     agency, alone or in partnership with a Federal land 
     management agency or other Governmental or nongovernmental 
     participant.
       ``(5) Qualified project.--The term `qualified project' 
     means a planning or capital project in or in the vicinity of 
     an eligible area that--
       ``(A) is an activity described in section 5302, 5303, 5304, 
     5308, or 5309(a)(1)(A);
       ``(B) involves--
       ``(i) the purchase of rolling stock that incorporates clean 
     fuel technology or the replacement of buses of a type in use 
     on the date of enactment of this section with clean fuel 
     vehicles; or
       ``(ii) the deployment of alternative transportation 
     vehicles that introduce innovative technologies or methods;
       ``(C) relates to the capital costs of coordinating the 
     Federal land management agency public transportation systems 
     with other public transportation systems;
       ``(D) provides a nonmotorized transportation system 
     (including the provision of facilities for pedestrians, 
     bicycles, and nonmotorized watercraft);
       ``(E) provides waterborne access within or in the vicinity 
     of an eligible area, as appropriate to and consistent with 
     this section; or
       ``(F) is any other alternative transportation project 
     that--
       ``(i) enhances the environment;
       ``(ii) prevents or mitigates an adverse impact on a natural 
     resource;
       ``(iii) improves Federal land management agency resource 
     management;
       ``(iv) improves visitor mobility and accessibility and the 
     visitor experience;
       ``(v) reduces congestion and pollution (including noise 
     pollution and visual pollution); or
       ``(vi) conserves a natural, historical, or cultural 
     resource (excluding rehabilitation or restoration of a non-
     transportation facility).
       ``(c) Federal Agency Cooperative Arrangements.--The 
     Secretary shall develop cooperative arrangements with the 
     Secretary of the Interior that provide for--
       ``(1) technical assistance in alternative transportation;
       ``(2) interagency and multidisciplinary teams to develop 
     Federal land management agency alternative transportation 
     policy, procedures, and coordination; and
       ``(3) the development of procedures and criteria relating 
     to the planning, selection, and funding of qualified projects 
     and the implementation and oversight of the program of 
     projects in accordance with this section.
       ``(d) Limitation on Use of Available Amounts.--
       ``(1) In general.--The Secretary, in consultation with the 
     Secretary of the Interior, may use not more than 10 percent 
     of the amount made available for a fiscal year under section 
     5338(a)(2)(I) to carry out planning, research, and technical 
     assistance under this section, including the development of 
     technology appropriate for use in a qualified project.
       ``(2) Additional amounts.--Amounts made available under 
     this subsection are in addition to amounts otherwise 
     available to the Secretary to carry out planning, research, 
     and technical assistance under this title or any other 
     provision of law.
       ``(3) Maximum amount.--No qualified project shall receive 
     more than 12 percent of the total amount made available to 
     carry out this section under section 5338(a)(2)(I) for any 
     fiscal year.
       ``(e) Planning Process.--In undertaking a qualified project 
     under this section,
       ``(1) if the qualified participant is a Federal land 
     management agency--
       ``(A) the Secretary, in cooperation with the Secretary of 
     the Interior, shall develop transportation planning 
     procedures that are consistent with--
       ``(i) the metropolitan planning provisions under section 
     5303 of this title;
       ``(ii) the statewide planning provisions under section 5304 
     of this title; and
       ``(iii) the public participation requirements under section 
     5307(e); and
       ``(B) in the case of a qualified project that is at a unit 
     of the National Park system, the planning process shall be 
     consistent with the general management plans of the unit of 
     the National Park system; and
       ``(2) if the qualified participant is a State or local 
     governmental authority, or more than one State or local 
     governmental authority in more than one State, the qualified 
     participant shall--
       ``(A) comply with the metropolitan planning provisions 
     under section 5303 of this title;
       ``(B) comply with the statewide planning provisions under 
     section 5304 of this title;
       ``(C) comply with the public participation requirements 
     under section 5307(e) of this title; and
       ``(D) consult with the appropriate Federal land management 
     agency during the planning process.
       ``(f) Cost Sharing.--
       ``(1) The Secretary, in cooperation with the Secretary of 
     the Interior, shall establish the agency share of net project 
     cost to be provided under this section to a qualified 
     participant.
       ``(2) In establishing the agency share of net project cost 
     to be provided under this section, the Secretary shall 
     consider--
       ``(A) visitation levels and the revenue derived from user 
     fees in the eligible area in which the qualified project is 
     carried out;
       ``(B) the extent to which the qualified participant 
     coordinates with a public transportation authority or private 
     entity engaged in public transportation;
       ``(C) private investment in the qualified project, 
     including the provision of contract services, joint 
     development activities, and the use of innovative financing 
     mechanisms;
       ``(D) the clear and direct benefit to the qualified 
     participant; and
       ``(E) any other matters that the Secretary considers 
     appropriate to carry out this section.
       ``(3) Notwithstanding any other provision of law, Federal 
     funds appropriated to any Federal land management agency may 
     be counted toward the non-agency share of the net project 
     cost of a qualified project.
       ``(g) Selection of Qualified Projects.--
       ``(1) The Secretary of the Interior, after consultation 
     with and in cooperation with the Secretary, shall determine 
     the final selection and funding of an annual program of 
     qualified projects in accordance with this section.
       ``(2) In determining whether to include a project in the 
     annual program of qualified projects, the Secretary of the 
     Interior shall consider--
       ``(A) the justification for the qualified project, 
     including the extent to which the qualified project would 
     conserve resources, prevent or mitigate adverse impact, and 
     enhance the environment;
       ``(B) the location of the qualified project, to ensure that 
     the selected qualified projects--
       ``(i) are geographically diverse nationwide; and
       ``(ii) include qualified projects in eligible areas located 
     in both urban areas and rural areas;
       ``(C) the size of the qualified project, to ensure that 
     there is a balanced distribution;
       ``(D) the historical and cultural significance of a 
     qualified project;
       ``(E) safety;
       ``(F) the extent to which the qualified project would-
       ``(i) enhance livable communities;
       ``(ii) reduce pollution (including noise pollution, air 
     pollution, and visual pollution);
       ``(iii) reduce congestion; and
       ``(iv) improve the mobility of people in the most efficient 
     manner; and
       ``(G) any other matters that the Secretary considers 
     appropriate to carry out this section, including--
       ``(i) visitation levels;
       ``(ii) the use of innovative financing or joint development 
     strategies; and
       ``(iii) coordination with gateway communities.
       ``(h) Qualified Projects Carried Out in Advance.--
       ``(1) When a qualified participant carries out any part of 
     a qualified project without assistance under this section in 
     accordance with all applicable procedures and requirements, 
     the Secretary, in consultation with the Secretary of the 
     Interior, may pay the share of the net capital project cost 
     of a qualified project if--
       ``(A) the qualified participant applies for the payment;
       ``(B) the Secretary approves the payment; and
       ``(C) before carrying out that part of the qualified 
     project, the Secretary approves the plans and specifications 
     in the same manner as plans and specifications are approved 
     for other projects assisted under this section.
       ``(2)(A) The cost of carrying out part of a qualified 
     project under paragraph (1) includes the amount of interest 
     earned and payable on bonds issued by a State or local 
     governmental authority, to the extent that proceeds of the 
     bond are expended in carrying out that part.
       ``(B) The rate of interest under this paragraph may not 
     exceed the most favorable rate reasonably available for the 
     qualified project at the time of borrowing.
       ``(C) The qualified participant shall certify, in a manner 
     satisfactory to the Secretary, that the qualified participant 
     has exercised reasonable diligence in seeking the most 
     favorable interest rate.
       ``(i) Relationship to Other Laws.--
       ``(1) Section 5307.--A qualified participant under this 
     section shall be subject to the requirements of sections 5307 
     and 5333(a) to the extent the Secretary determines to be 
     appropriate.
       ``(2) Other requirements.--A qualified participant under 
     this section is subject to any other terms, conditions, 
     requirements, and provisions that the Secretary determines to 
     be appropriate to carry out this section, including 
     requirements for the distribution of proceeds on disposition 
     of real property and equipment resulting from a qualified 
     project assisted under this section.
       ``(3) Project management plan.--If the amount of assistance 
     anticipated to be required for a qualified project under this 
     section is not less than $25,000,000--
       ``(A) the qualified project shall, to the extent the 
     Secretary considers appropriate, be carried out through a 
     full funding grant agreement, in accordance with section 
     5309(g); and
       ``(B) the qualified participant shall prepare a project 
     management plan in accordance with section 5327(a).

[[Page 10904]]

       ``(i) Asset Management.--The Secretary, in consultation 
     with the Secretary of the Interior, may transfer the interest 
     of the Department of Transportation in, and control over, all 
     facilities and equipment acquired under this section to a 
     qualified participant for use and disposition in accordance 
     with any property management regulations that the Secretary 
     determines to be appropriate.
       ``(j) Coordination of Research and Deployment of New 
     Technologies.--
       ``(1) The Secretary, in cooperation with the Secretary of 
     the Interior, may undertake, or make grants, cooperative 
     agreements, contracts (including agreements with departments, 
     agencies, and instrumentalities of the Federal Government) or 
     other transactions for research, development, and deployment 
     of new technologies in eligible areas that will--
       ``(A) conserve resources;
       ``(B) prevent or mitigate adverse environmental impact;
       ``(C) improve visitor mobility, accessibility, and 
     enjoyment; and
       ``(D) reduce pollution (including noise pollution and 
     visual pollution).
       ``(2) The Secretary may request and receive appropriate 
     information from any source.
       ``(3) Grants, cooperative agreements, contracts or other 
     transactions under paragraph (1) shall be awarded from 
     amounts allocated under subsection (c)(1).
       ``(k) Innovative Financing.--A qualified project receiving 
     financial assistance under this section shall be eligible for 
     funding through a state infrastructure bank or other 
     innovative financing mechanism available to finance an 
     eligible project under this chapter.
       ``(l) Reports.--
       ``(1) In general.--The Secretary, in consultation with the 
     Secretary of the Interior, shall annually submit a report on 
     the allocation of amounts made available to assist qualified 
     projects under this section to--
       ``(A) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate; and
       ``(B) the Committee on Transportation and Infrastructure of 
     the House of Representatives.
       ``(2) Annual and supplemental reports.--The report required 
     under paragraph (1) shall be included in the report submitted 
     under section 5309(m).''.
       (b) Conforming Amendments.--The table of sections for 
     chapter 53 is amended by inserting after the item relating to 
     section 5315 the following:

``5316. Alternative transportation in parks and public lands.''.

     SEC. 3042. OBLIGATION CEILING.

       Notwithstanding any other provision of law, the total of 
     all obligations from amounts made available from the Mass 
     Transit Account of the Highway Trust Fund by, and amounts 
     appropriated under, subsections (a) through (c) of section 
     5338 of title 49, United States Code, shall not exceed--
       (1) $7,265,876,900 for fiscal year 2004;
       (2) $8,650,000,000 for fiscal year 2005;
       (3) $9,085,123,000 for fiscal year 2006;
       (4) $9,600,000,000 for fiscal year 2007;
       (5) $10,490,000,000 for fiscal year 2008; and
       (6) $11,430,000,000 for fiscal year 2009.

     SEC. 3043. ADJUSTMENTS FOR THE SURFACE TRANSPORTATION 
                   EXTENSION ACT OF 2003.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary shall reduce the total apportionments and 
     allocations made for fiscal year 2004 to each grant recipient 
     under section 5338 of title 49, United States Code, by the 
     amount apportioned to that recipient pursuant to section 8 of 
     the Surface Transportation Extension Act of 2003 (117 Stat. 
     1121).
       (b) Fixed Guideway Modernization Adjustment.--In making the 
     apportionments described in subsection (a), the Secretary 
     shall adjust the amount apportioned for fiscal year 2004 to 
     each urbanized area for fixed guideway modernization to 
     reflect the apportionment method set forth in 5337(a) of 
     title 49, United States Code.

     SEC. 3044. DISADVANTAGED BUSINESS ENTERPRISE.

       Section 1101(b) of the Transportation Equity Act of the 
     21st Century shall apply to all funds authorized or otherwise 
     made available under this title.

     SEC. 3045. INTERMODAL PASSENGER FACILITIES.

       (a) In General.--Chapter 55 of title 49, United States 
     Code, is amended by adding at the end the following:

           ``SUBCHAPTER III--INTERMODAL PASSENGER FACILITIES

     Sec. 5571. Policy and purposes

       ``(a) Development and Enhancement of Intermodal Passenger 
     Facilities.--It is in the economic interest of the United 
     States to improve the efficiency of public surface 
     transportation modes by ensuring their connection with and 
     access to intermodal passenger terminals, thereby 
     streamlining the transfer of passengers among modes, 
     enhancing travel options, and increasing passenger 
     transportation operating efficiencies.
       ``(b) General Purposes.--The purposes of this subchapter 
     are to accelerate intermodal integration among North 
     America's passenger transportation modes through--
       ``(1) ensuring intercity public transportation access to 
     intermodal passenger facilities;
       ``(2) encouraging the development of an integrated system 
     of public transportation information; and
       ``(3) providing intercity bus intermodal passenger facility 
     grants.

     Sec. 5572. Definitions

       ``In this subchapter--
       ``(1) `capital project' means a project for--
       ``(A) acquiring, constructing, improving, or renovating an 
     intermodal facility that is related physically and 
     functionally to intercity bus service and establishes or 
     enhances coordination between intercity bus service and 
     transportation, including aviation, commuter rail, intercity 
     rail, public transportation, seaports, and the National 
     Highway System, such as physical infrastructure associated 
     with private bus operations at existing and new intermodal 
     facilities, including special lanes, curb cuts, ticket kiosks 
     and counters, baggage and package express storage, employee 
     parking, office space, security, and signage; and
       ``(B) establishing or enhancing coordination between 
     intercity bus service and transportation, including aviation, 
     commuter rail, intercity rail, public transportation, and the 
     National Highway System through an integrated system of 
     public transportation information.
       ``(2) `commuter service' means service designed primarily 
     to provide daily work trips within the local commuting area.
       ``(3) `intercity bus service' means regularly scheduled bus 
     service for the general public which operates with limited 
     stops over fixed routes connecting two or more urban areas 
     not in close proximity, which has the capacity for 
     transporting baggage carried by passengers, and which makes 
     meaningful connections with scheduled intercity bus service 
     to more distant points, if such service is available and may 
     include package express service, if incidental to passenger 
     transportation, but does not include air, commuter, water or 
     rail service.
       ``(4) `intermodal passenger facility' means passenger 
     terminal that does, or can be modified to, accommodate 
     several modes of transportation and related facilities, 
     including some or all of the following: intercity rail, 
     intercity bus, commuter rail, intracity rail transit and bus 
     transportation, airport limousine service and airline ticket 
     offices, rent-a-car facilities, taxis, private parking, and 
     other transportation services.
       ``(5) `local governmental authority' includes--
       ``(A) a political subdivision of a State;
       ``(B) an authority of at least one State or political 
     subdivision of a State;
       ``(C) an Indian tribe; and
       ``(D) a public corporation, board, or commission 
     established under the laws of the State.
       ``(6) `owner or operator of a public transportation 
     facility' means an owner or operator of intercity-rail, 
     intercity-bus, commuter-rail, commuter-bus, rail-transit, 
     bus-transit, or ferry services.
       ``(7) `recipient' means a State or local governmental 
     authority or a nonprofit organization that receives a grant 
     to carry out this section directly from the Federal 
     government.
       ``(8) `Secretary' means the Secretary of Transportation.
       ``(9) `State' means a State of the United States, the 
     District of Columbia, Puerto Rico, the Northern Mariana 
     Islands, Guam, American Samoa, and the Virgin Islands.
       ``(10) `urban area' means an area that includes a 
     municipality or other built-up place that the Secretary, 
     after considering local patterns and trends of urban growth, 
     decides is appropriate for a local public transportation 
     system to serve individuals in the locality.

     ``Sec. 5573. Assurance of access to intermodal passenger 
       facilities

       ``Intercity buses and other modes of transportation shall, 
     to the maximum extent practicable, have access to publicly 
     funded intermodal passenger facilities, including those 
     passenger facilities seeking funding under section 5574.

     ``Sec. 5574. Intercity bus intermodal passenger facility 
       grants

       ``(a) General Authority.--The Secretary of Transportation 
     may make grants under this section to recipients in financing 
     a capital project only if the Secretary finds that the 
     proposed project is justified and has adequate financial 
     commitment.
       ``(b) Competitive Grant Selection.--The Secretary shall 
     conduct a national solicitation for applications for grants 
     under this section. Grantees shall be selected on a 
     competitive basis.
       ``(c) Share of Net Project Costs.--A grant shall not exceed 
     50 percent of the net project cost, as determined by the 
     Secretary.
       ``(d) Regulations.--The Secretary may promulgate such 
     regulations as are necessary to carry out this section.

     ``Sec. 5575. Funding

       ``(a) Highway Account.--
       ``(1) There is authorized to be appropriated from the 
     Highway Trust Fund (other than the Mass Transit Account) to 
     carry out this subchapter $10,000,000 for each of fiscal 
     years 2005 through 2009.
       ``(2) The funding made available under paragraph (1) shall 
     be available for obligation in the same manner as if such 
     funds were apportioned under chapter 1 of title 23 and shall 
     be subject to any obligation limitation imposed on funds for 
     Federal-aid highways and highway safety construction 
     programs.
       ``(b) Period of Availability.--Amounts made available under 
     subsection (a) shall remain available until expended.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     55 of title 49, United States Code, is amended by adding at 
     the end the following:

            ``Subchapter III--Intermodal Passenger Facilities

Sec.
``5571. Policy and Purposes.

[[Page 10905]]

``5572. Definitions.
``5573. Assurance of access to intermodal facilities.
``5574. Intercity bus intermodal facility grants.
``5575. Funding.''.

                TITLE IV--SURFACE TRANSPORTATION SAFETY

     SEC. 4001. SHORT TITLE.

       This title may be cited as the ``Surface Transportation 
     Safety Reauthorization Act of 2004''.

                       Subtitle A--Highway Safety

                  PART I--HIGHWAY SAFETY GRANT PROGRAM

     SEC. 4101. SHORT TITLE; AMENDMENT OF TITLE 23, UNITED STATES 
                   CODE.

       (a) Short Title.--This subpart may be cited as the 
     ``Highway Safety Grant Program Reauthorization Act of 2004''.
       (b) Amendment of Title 23, United States Code.--Except as 
     otherwise expressly provided, whenever in this subpart 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 23, United States Code.

     SEC. 4102. AUTHORIZATION OF APPROPRIATIONS.

       (a) Amounts for Fiscal Years 2004 Through 2009.--There are 
     authorized to be appropriated from the Highway Trust Fund 
     (other than the Mass Transit Account) to the Secretary of 
     Transportation for the National Highway Traffic Safety 
     Administration the following:
       (1) To carry out the Highway Safety Programs under section 
     402 of title 23, United States Code, $170,000,000 in fiscal 
     year 2004, $174,000,000 in fiscal year 2005, $179,000,000 in 
     fiscal year 2006, $185,000,000 in fiscal year 2007, 
     $204,000,000 in fiscal year 2008, and $207,000,000 in fiscal 
     year 2009.
       (2) To carry out the Highway Safety Research and Outreach 
     Programs under section 403 of title 23, United States Code, 
     $110,000,000 in fiscal year 2004, $112,000,000 in fiscal year 
     2005, $114,000,000 in fiscal year 2006, $116,000,000 in 
     fiscal year 2007, $118,000,000 in fiscal year 2008, and 
     $120,000,000 in fiscal year 2009.
       (3) To carry out the Occupant Protection Programs under 
     section 405 of title 23, United States Code, $120,000,000 in 
     fiscal year 2004, $122,000,000 in fiscal year 2005, 
     $124,000,000 in fiscal year 2006, $126,000,000 in fiscal year 
     2007, $128,000,000 in fiscal year 2008, and $130,000,000 in 
     fiscal year 2009.
       (4) To carry out the Emergency Medical Services Program 
     under section 407A of title 23, United States Code, 
     $5,000,000 in each of fiscal years 2004 through 2009.
       (5) To carry out the Impaired Driving Program under section 
     410 of title 23, United States Code, $85,000,000 in fiscal 
     year 2004, $89,000,000 in fiscal year 2005, $93,000,000 in 
     fiscal year 2006, $110,000,000 in fiscal year 2007, 
     $126,000,000 in fiscal year 2008, and $130,000,000 in fiscal 
     year 2009.
       (6) To carry out the State Traffic Safety Information 
     System Improvements under section 412 of title 23, United 
     States Code, $45,000,000 in each of fiscal years 2004 through 
     2009.
       (7) To carry out chapter 303 of title 49, United States 
     Code, $4,000,000 for each of fiscal years 2004 through 2009.
       (b) Prohibition on Other Uses.--Except as otherwise 
     provided in this subtitle, the amounts allocated from the 
     Highway Trust Fund for programs provided for in chapter 4 of 
     title 23, United States Code, shall only be used for such 
     programs and may not be used by States or local governments 
     for construction purposes.
       (c) Effect of Revenue Deficiency.--If revenue to the 
     Highway Trust Fund for a given fiscal year is lower than the 
     amounts authorized by this subpart, any subsequent reductions 
     in the overall funding for highway and transit programs shall 
     not affect the highway safety programs provided for in 
     chapter 4 of title 23, United States Code.
       (d) Proportional Increases.--For each fiscal year from 2004 
     through 2009, if revenue to the Highway Trust Fund increases 
     above the amounts for each such fiscal year set forth in the 
     fiscal year 2004 joint budget resolution, then the amounts 
     made available in such year for the programs in sections 402, 
     405, and 410 shall increase by the same percentage.

     SEC. 4103. HIGHWAY SAFETY PROGRAMS.

       (a) Programs To Be Included.--
       (1) Motor vehicle airbags public awareness.--Section 
     402(a)(2) is amended by striking ``vehicles and to increase 
     public awareness of the benefit of motor vehicles equipped 
     with airbags'' and inserting ``vehicles,''.
       (2) Agressive driving.--Section 402(a) is further amended--
       (A) by redesignating clause (6) as clause (8);
       (B) by inserting after ``involving school buses,'' at the 
     end of clause (5) the following: ``(6) to reduce aggressive 
     driving and to educate drivers about defensive driving, (7) 
     to reduce accidents resulting from fatigued and distracted 
     drivers, including distractions arising from the use of 
     electronic devices in vehicles,''; and
       (C) by inserting ``aggressive driving, distracted 
     driving,'' after ``school bus accidents,''.
       (b) Apportionment.--
       (1) Tribal government programs.--Section 402(c) is amended 
     by striking ``three-fourths of 1 percent'' and inserting ``2 
     percent''.
       (c) Extra Funding for Occupant Protection and Impaired 
     Driving Programs.--Section 402 is amended by inserting after 
     subsection (g) the following:
       ``(h) Grants.--Funds available to States under this section 
     may be used for making grants of financial assistance for 
     programs and initiatives authorized by sections 405 and 410 
     of this title.''.
       (d) Law Enforcement Chase Training.--Section 402 is amended 
     by adding at the end the following:
       ``(l) Limitation Relating to Law Enforcement Vehicular 
     Pursuit Training.--No State may receive any funds available 
     for fiscal years after fiscal year 2004 for programs under 
     this chapter until the State submits to the Secretary a 
     written statement that the State actively encourages all 
     relevant law enforcement agencies in that State to follow the 
     guidelines established for police chases issued by the 
     International Association of Chiefs of Police that are in 
     effect on the date of enactment of the Highway Safety Grant 
     Program Reauthorization Act of 2004, or as revised and in 
     effect after that date as determined by the Secretary.
       ``(m) Consolidation of Grant Applications.--The Secretary 
     shall establish an approval process by which a State may 
     apply for all grants included under this chapter through a 
     single application with a single annual deadline. The Bureau 
     of Indian Affairs shall establish a similarly simplified 
     process for applications from Indian tribes.
       ``(n) Administrative Expenses.--Funds authorized to be 
     appropriated to carry out this section shall be subject to a 
     deduction of not to exceed 5 percent for the necessary costs 
     of administering the provisions of this section, section 405, 
     section 407A, section 410, and 413 of this chapter.''.

     SEC. 4104. HIGHWAY SAFETY RESEARCH AND OUTREACH PROGRAMS.

       (a) Revised Authority and Requirements.--Section 403 is 
     amended to read as follows:

     ``Sec. 403. Highway safety research and development

       ``(a) Authority of the Secretary.--The Secretary is 
     authorized to use funds appropriated to carry out this 
     section to--
       ``(1) conduct research on all phases of highway safety and 
     traffic conditions, including accident causation, highway or 
     driver characteristics, communications, and emergency care;
       ``(2) conduct ongoing research into driver behavior and its 
     effect on traffic safety;
       ``(3) conduct research on, and launch initiatives to 
     counter, fatigued driving by drivers of motor vehicles and 
     distracted driving in such vehicles, including the effect 
     that the use of electronic devices and other factors deemed 
     relevant by the Secretary have on driving;
       ``(4) conduct training or education programs in cooperation 
     with other Federal departments and agencies, States, private 
     sector persons, highway safety personnel, and law enforcement 
     personnel;
       ``(5) conduct research on, and evaluate the effectiveness 
     of, traffic safety countermeasures, including seat belts and 
     impaired driving initiatives; and
       ``(6) conduct demonstration projects.
       ``(b) Specific Research Programs.--
       ``(1) Required programs.--The Secretary shall conduct 
     research on the following:
       ``(A) Effects of use of controlled substances.--A study on 
     the effects of the use of controlled substances on driver 
     behavior to determine--
       ``(i) methodologies for measuring driver impairment 
     resulting from use of the most common controlled substances 
     (including the use of such substances in combination with 
     alcohol); and
       ``(ii) effective and efficient methods for training law 
     enforcement personnel to detect or measure the level of 
     impairment of a driver who is under the influence of a 
     controlled substance by the use of technology or otherwise.
       ``(B) On-scene motor vehicle collision causation.--A 
     nationally representative study to collect on-scene motor 
     vehicle collision data, and to determine crash causation, for 
     which the Secretary shall enter into a contract with the 
     National Academy of Sciences to conduct a review of the 
     research, design, methodology, and implementation of the 
     study.
       ``(C) Toll facilities workplace safety.--A study on the 
     safety of highway toll collection facilities, including toll 
     booths, conducted in cooperation with State and local highway 
     safety organizations to determine the safety of highway toll 
     collection facilities for the toll collectors who work in and 
     around such facilities and to develop best practices that 
     would be of benefit to State and local highway safety 
     organizations. The study shall consider--
       ``(i) any problems resulting from design or construction of 
     facilities that contribute to the occurrence of vehicle 
     collisions with the facilities;
       ``(ii) the safety of crosswalks used by toll collectors in 
     transit to and from toll booths;
       ``(iii) the extent of the enforcement of speed limits at 
     and in the vicinity of toll facilities;
       ``(iv) the use of warning devices, such as vibration and 
     rumble strips, to alert drivers approaching toll facilities;
       ``(v) the use of cameras to record traffic violations in 
     the vicinity of toll facilities;
       ``(vi) the use of traffic control arms in the vicinity of 
     toll facilities;
       ``(vii) law enforcement practices and jurisdictional issues 
     that affect safety at and in the vicinity of toll facilities; 
     and
       ``(viii) data (which shall be collected in conducting the 
     research) regarding the incidence of accidents and injuries 
     at and around toll booth facilities.
       ``(2) Time for completion of studies.--The studies 
     conducted in subparagraphs (A), (B), and (C) of paragraph (1) 
     may be conducted in concert with other Federal departments 
     and agencies with relevant expertise. The Secretary shall 
     submit an annual report to the Senate

[[Page 10906]]

     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Transportation and 
     Infrastructure on the progress of each study conducted under 
     this subsection.
       ``(3) Ongoing studies.--The studies under subparagraphs (A) 
     and (B) of paragraph (1) shall be conducted on an ongoing 
     basis.
       ``(4) Reports.--
       ``(A) One-time study.--Not later than 2 years after the 
     date of enactment of the Highway Safety Grant Program 
     Reauthorization Act of 2004, the Secretary shall submit a 
     final report on the study referred to in paragraph (1)(C) to 
     the Committee on Commerce, Science, and Transportation of the 
     Senate and the Committee on Transportation and Infrastructure 
     of the House of Representatives.
       ``(B) Ongoing studies.--The Secretary shall submit a report 
     on the studies referred to in paragraph (3) to the Committees 
     of Congress referred to in subparagraph (A) not later than 
     December 31, 2005, and shall submit additional reports on 
     such studies to such committees every 2 years. Such 
     additional reports shall contain the findings, progress, 
     remaining challenges, research objectives, and other relevant 
     data relating to the ongoing studies.
       ``(5) Research on distracted, inattentive, and fatigued 
     drivers.--In conducting research under subsection (a)(3), the 
     Secretary shall carry out not less than 5 demonstration 
     projects to evaluate new and innovative means of combatting 
     traffic system problems caused by distracted, inattentive, or 
     fatigued drivers. The demonstration projects shall be in 
     addition to any other research carried out under this 
     subsection.
       ``(c) Nationwide Traffic Safety Campaigns.--
       ``(1) Requirement for campaigns.--The Administrator of the 
     National Highway Traffic Safety Administration shall 
     establish and administer a program under which 3 high-
     visibility traffic safety law enforcement campaigns will be 
     carried out for the purposes specified in paragraph (2) in 
     each of years 2004 through 2009.
       ``(2) Purpose.--The purpose of each law enforcement 
     campaign is to achieve either or both of the following 
     objectives:
       ``(A) Reduce alcohol-impaired or drug-impaired operation of 
     motor vehicles.
       ``(B) Increase use of seat belts by occupants of motor 
     vehicles.
       ``(3) Advertising.--The Administrator may use, or authorize 
     the use of, funds available under this section to pay for the 
     development, production, and use of broadcast and print media 
     advertising in carrying out traffic safety law enforcement 
     campaigns under this subsection. Consideration shall be given 
     to advertising directed at non-English speaking populations, 
     including those who listen, read, or watch nontraditional 
     media.
       ``(4) Coordination with states.--The Administrator shall 
     coordinate with the States in carrying out the traffic safety 
     law enforcement campaigns under this subsection, including 
     advertising funded under paragraph (3), with a view to--
       ``(A) relying on States to provide the law enforcement 
     resources for the campaigns out of funding available under 
     this section and sections 402, 405, and 410 of this title; 
     and
       ``(B) providing out of National Highway Traffic Safety 
     Administration resources most of the means necessary for 
     national advertising and education efforts associated with 
     the law enforcement campaigns.
       ``(5) Annual evaluation.--The Secretary shall conduct an 
     annual evaluation of the effectiveness of such initiatives.
       ``(6) Funding.--The Secretary shall use $24,000,000 in each 
     of fiscal years 2004 through 2009 for advertising and 
     educational initiatives to be carried out nationwide in 
     support of the campaigns under this section.
       ``(d) Improving Older Driver Safety.--
       ``(1) In general.--Of the funds made available under this 
     section, the Secretary shall allocate $2,000,000 in each of 
     fiscal years 2004 through 2009 to conduct a comprehensive 
     research and demonstration program to improve traffic safety 
     pertaining to older drivers. The program shall--
       ``(A) provide information and guidelines to assist 
     physicians and other related medical personnel, families, 
     licensing agencies, enforcement officers, and various public 
     and transit agencies in enhancing the safety and mobility of 
     older drivers;
       ``(B) improve the scientific basis of medical standards and 
     screenings strategies used in the licensing of all drivers in 
     a non-discriminatory manner;
       ``(C) conduct field tests to assess the safety benefits and 
     mobility impacts of different driver licensing strategies and 
     driver assessment and rehabilitation methods;
       ``(D) assess the value and improve the safety potential of 
     driver retraining courses of particular benefit to older 
     drivers; and
       ``(E) conduct other activities to accomplish the objectives 
     of this action.
       ``(2) Formulation of plan.--After consultation with 
     affected parties, the Secretary shall formulate an older 
     driver traffic safety plan to guide the design and 
     implementation of this program. The plan shall be submitted 
     to the House of Representatives Committee on Transportation 
     and Infrastructure and the Senate Committee on Commerce, 
     Science, and Transportation within 180 days after the date of 
     enactment of the Highway Safety Grant Program Reauthorization 
     Act of 2004.
       ``(e) Law Enforcement Training.--
       ``(1) Requirement for program.--The Administrator of the 
     National Highway Traffic Safety Administration shall carry 
     out a program to train law enforcement personnel of each 
     State and political subdivision thereof in police chase 
     techniques that are consistent with the police chase 
     guidelines issued by the International Association of Chiefs 
     of Police.
       ``(2) Amount for program.--Of the amount available for a 
     fiscal year to carry out this section, $200,000 shall be 
     available for carrying out this subsection.
       ``(f) International Cooperation.--
       ``(1) Authority.--The Administrator of the National Highway 
     Traffic Safety Administration may participate and cooperate 
     in international activities to enhance highway safety.
       ``(2) Amount for program.--Of the amount available for a 
     fiscal year to carry out this section, $200,000 may be used 
     for activities authorized under paragraph (1).''.
       (b) Study on Refusal of Intoxication Testing.--
       (1) Requirement for study.--In addition to studies under 
     section 403 of title 23, United States Code, the Secretary of 
     Transportation shall carry out a study of the frequency with 
     which persons arrested for the offense of operating a motor 
     vehicle under the influence of alcohol and persons arrested 
     for the offense of operating a motor vehicle while 
     intoxicated refuse to take a test to determine blood alcohol 
     concentration levels and the effect such refusals have on the 
     ability of States to prosecute such persons for those 
     offenses.
       (2) Consultation.--In carrying out the study under this 
     section, the Secretary shall consult with the Governors of 
     the States, the States' Attorneys General, and the United 
     States Sentencing Commission.
       (3) Report.--
       (A) requirement for report.--Not later than 1 year after 
     the date of the enactment of this Act, the Secretary shall 
     submit a report on the results of the study to the Committee 
     on Commerce, Science, and Transportation of the Senate and 
     the Committee on Transportation and Infrastructure of the 
     House of Representatives.
       (B) Content.--The report shall include any recommendation 
     for legislation, including any recommended model State 
     legislation, and any other recommendations that the Secretary 
     considers appropriate for implementing a program designed to 
     decrease the occurrence refusals by arrested persons to 
     submit to a test to determine blood alcohol concentration 
     levels.

     SEC. 4105. NATIONAL HIGHWAY SAFETY ADVISORY COMMITTEE 
                   TECHNICAL CORRECTION.

       Section 404(d) is amended by striking ``Commerce'' and 
     inserting ``Transportation''.

     SEC. 4106. OCCUPANT PROTECTION GRANTS.

       Section 405 is amended--
       (1) by striking the second sentence of subsection (a)(1);
       (2) by striking ``Transportation Equity Act for the 21st 
     Century.'' in subsection (a)(2) and inserting ``Highway 
     Safety Grant Program Reauthorization Act of 2004.'';
       (3) by striking subsections (a)(3) and (4), (b), (c), and 
     (d) and redesignating subsections (e) and (f) as subsections 
     (d) and (e), respectively; and
       (4) by inserting after subsection (a) the following:
       ``(b) Occupant Protection Grants.--
       ``(1) In general.--In addition to the grants authorized by 
     subsection (a), the Secretary shall make grants in accordance 
     with this subsection.
       ``(2) Safety belt performance grants.--
       ``(A) Primary safety belt use law.--
       ``(i) For fiscal years 2004 and 2005, the Secretary shall 
     make a grant to each State that enacted, and is enforcing, a 
     primary safety belt use law for all passenger motor vehicles 
     that became effective by December 31, 2002.
       ``(ii) For each of fiscal years 2004 through 2009, the 
     Secretary shall, after making grants under clause (i) of this 
     subparagraph, make a one-time grant to each State that either 
     enacts for the first time after December 31, 2002, and has in 
     effect a primary safety belt use law for all passenger motor 
     vehicles, or, in the case of a State that does not have such 
     a primary safety belt use law, has a State safety belt use 
     rate in the preceding fiscal year of at least 90 percent, as 
     measured under criteria determined by the Secretary.
       ``(iii) Of the funds authorized for grants under this 
     subsection, $100,000,000 in each of fiscal years 2004 through 
     2009 shall be available for grants under this paragraph. The 
     amount of a grant available to a State in each of fiscal 
     years 2004 and 2005 under clause (i) of this subparagraph 
     shall be equal to \1/2\ of the amount of funds apportioned to 
     the State under section 402(c) for fiscal year 2003. The 
     amount of a grant available to a State in fiscal year 2004 or 
     in a subsequent fiscal year under clause (ii) of this 
     subparagraph shall be equal to 5 times the amount apportioned 
     to the State for fiscal year 2003 under section 402(c). A 
     State that receives a grant under clause (ii) of this 
     subparagraph is ineligible to receive funding under 
     subparagraph (B) for that fiscal year and the following 
     fiscal year. The Federal share payable for grants under this 
     subparagraph shall be 100 percent. If the total amount of 
     grants under clause (ii) of this subparagraph for a fiscal 
     year exceeds the amount of funds available in the fiscal 
     year, grants shall be made to each eligible State, in the 
     order in which its primary safety belt use law became 
     effective or its safety belt use rate reached 90 percent, 
     until the funds for the fiscal year are exhausted. A State 
     that does not receive a grant for which it is eligible in a 
     fiscal

[[Page 10907]]

     year shall receive the grant in the succeeding fiscal year so 
     long as its law remains in effect or its safety belt use rate 
     remains at or above 90 percent. If the total amount of grants 
     under this subparagraph for a fiscal year is less than the 
     amount available in the fiscal year, the Secretary shall use 
     any funds that exceed the total amount for grants under 
     subparagraph (B) of this paragraph.
       ``(B) Safety belt use rate.--
       ``(i) For each fiscal year, from 2004 through 2009, the 
     funds authorized for a grant under this subparagraph shall be 
     awarded to States that increase their measured safety belt 
     use rate, as determined by the Secretary, by decreasing the 
     proportion of non-users of safety belts by 10 percent, as 
     compared to the proportion of non-users, in the preceding 
     fiscal year.
       ``(ii) Each State that meets the requirement of clause (i) 
     of this subparagraph shall be apportioned an amount of funds 
     that is equal to the amount available under this subparagraph 
     for the relevant fiscal year multiplied by the ratio that the 
     funds apportioned to the State under section 402 for such 
     fiscal year bear to the funds apportioned under section 402 
     for such fiscal year to all states that qualify for a grant 
     for such fiscal year.
       ``(iii) Of the funds authorized for grants under this 
     subsection, $20,000,000 for fiscal year 2004, $22,000,000 for 
     fiscal year 2005, $24,000,000 for fiscal year 2006, 
     $26,000,000 for fiscal year 2007, $28,000,000 for fiscal year 
     2008, and $30,000,000 for fiscal year 2009 shall be available 
     for safety belt use rate grants under this subparagraph.
       ``(iv) The Federal share payable for grants under this 
     subparagraph shall be 100 percent.
       ``(c) Use of Grants.--A State allocated an amount for a 
     grant under subparagraph (A) or (B) of subsection (b)(2) may 
     use the amount for activities eligible for assistance under 
     sections 402, 405, and 410 of this title.''.

     SEC. 4107. SCHOOL BUS DRIVER TRAINING.

       Section 406(c) is amended by striking the first, second, 
     and third sentences.

     SEC. 4108. EMERGENCY MEDICAL SERVICES.

       (a) Federal Coordination and Enhanced Support of Emergency 
     Medical Services.--Chapter 4 is amended by inserting after 
     section 407 the following:

     ``Sec. 407A. Federal coordination and enhanced support of 
       emergency medical services

       ``(a) Federal Interagency Committee on Emergency Medical 
     Services.--
       ``(1) Establishment.--The Secretary of Transportation and 
     the Secretary of Homeland Security, through the Under 
     Secretary for Emergency Preparedness and Response, shall 
     establish a Federal Interagency Committee on Emergency 
     Medical Services. In establishing the Interagency Committee, 
     the Secretary of Transportation and the Secretary of Homeland 
     Security through the Under Secretary for Emergency 
     Preparedness and Response shall consult with the Secretary of 
     Health and Human Services.
       ``(2) Membership.--The Interagency Committee shall consist 
     of the following officials, or their designees:
       ``(A) The Administrator, National Highway Traffic Safety 
     Administration.
       ``(B) The Director, Preparedness Division, Emergency 
     Preparedness and Response Directorate, Department of Homeland 
     Security.
       ``(C) The Administrator, Health Resources and Services 
     Administration, Department of Health and Human Services.
       ``(D) The Director, Centers for Disease Control and 
     Prevention, Department of Health and Human Services.
       ``(E) The Administrator, United States Fire Administration, 
     Emergency Preparedness and Response Directorate, Department 
     of Homeland Security.
       ``(F) The Director, Center for Medicare and Medicaid 
     Services, Department of Health and Human Services.
       ``(G) The Undersecretary of Defense for Personnel and 
     Readiness.
       ``(H) The Director, Indian Health Service, Department of 
     Health and Human Services.
       ``(I) The Chief, Wireless Telecom Bureau, Federal 
     Communications Commission.
       ``(J) A representative of any other Federal agency 
     identified by the Secretary of Transportation or the 
     Secretary of Homeland Security through the Under Secretary 
     for Emergency Preparedness and Response, in consultation with 
     the Secretary of Health and Human Services, as having a 
     significant role in relation to the purposes of the 
     Interagency Committee.
       ``(3) Purposes.--The purposes of the Interagency Committee 
     are as follows:
       ``(A) To ensure coordination among the Federal agencies 
     involved with State, local, tribal, or regional emergency 
     medical services and 9-1-1 systems.
       ``(B) To identify State, local, tribal, or regional 
     emergency medical services and 9-1-1 needs.
       ``(C) To recommend new or expanded programs, including 
     grant programs, for improving State, local, tribal, or 
     regional emergency medical services and implementing improved 
     emergency medical services communications technologies, 
     including wireless 9-1-1.
       ``(D) To identify ways to streamline the process through 
     which Federal agencies support State, local, tribal or 
     regional emergency medical services.
       ``(E) To assist State, local, tribal or regional emergency 
     medical services in setting priorities based on identified 
     needs.
       ``(F) To advise, consult, and make recommendations on 
     matters relating to the implementation of the coordinated 
     State emergency medical services programs.
       ``(4) Administration.--The Administrator of the National 
     Highway Traffic Safety Administration, in cooperation with 
     the Director, Preparedness Division, Emergency Preparedness 
     and Response Directorate, Department of Homeland Security, 
     shall provide administrative support to the Interagency 
     Committee, including scheduling meetings, setting agendas, 
     keeping minutes and records, and producing reports.
       ``(5) Leadership.--The members of the Interagency Committee 
     shall select a chairperson of the Committee annually.
       ``(6) Meetings.--The Interagency Committee shall meet as 
     frequently as is determined necessary by the chairperson of 
     the Committee.
       ``(7) Annual reports.--The Interagency Committee shall 
     prepare an annual report to Congress on the Committee's 
     activities, actions, and recommendations.
       ``(b) Coordinated Nationwide Emergency Medical Services 
     Program.--
       ``(1) Program requirement.--The Secretary of 
     Transportation, acting through the Administrator of the 
     National Highway Traffic Safety Administration, shall 
     coordinate with officials of other Federal departments and 
     agencies, and may assist State and local governments and 
     emergency medical services organizations (whether or not a 
     firefighter organization), private industry, and other 
     interested parties, to ensure the development and 
     implementation of a coordinated nationwide emergency medical 
     services program that is designed to strengthen 
     transportation safety and public health and to implement 
     improved emergency medical services communication systems, 
     including 9-1-1.
       ``(2) Coordinated state emergency medical services 
     program.--Each State shall establish a program, to be 
     approved by the Secretary, to coordinate the emergency 
     medical services and resources deployed throughout the State, 
     so as to ensure--
       ``(A) improved emergency medical services communication 
     systems, including 9-1-1;
       ``(B) utilization of established best practices in system 
     design and operations;
       ``(C) implementation of quality assurance programs; and
       ``(D) incorporation of data collection and analysis 
     programs that facilitate system development and data linkages 
     with other systems and programs useful to emergency medical 
     services.
       ``(3) Administration of state programs.--The Secretary may 
     not approve a coordinated State emergency medical services 
     program under this subsection unless the program--
       ``(A) provides that the Governor of the State is 
     responsible for its administration through a State office of 
     emergency medical services that has adequate powers and is 
     suitably equipped and organized to carry out such program and 
     coordinates such program with the highway safety office of 
     the State; and
       ``(B) authorizes political subdivisions of the State to 
     participate in and receive funds under such program, 
     consistent with a goal of achieving statewide coordination of 
     emergency medical services and 9-1-1 activities.
       ``(4) Funding.--
       ``(A) Use of funds.--Funds authorized to be appropriated to 
     carry out this subsection shall be used to aid the States in 
     conducting coordinated emergency medical services and 9-1-1 
     programs as described in paragraph (2).
       ``(B) Apportionment.--
       ``(i) Apportionment formula.--The funds shall be 
     apportioned as follows: 75 percent in the ratio that the 
     population of each State bears to the total population of all 
     the States, as shown by the latest available Federal census, 
     and 25 percent in the ratio that the public road mileage in 
     each State bears to the total public road mileage in all 
     States. For the purpose of this subparagraph, a `public road' 
     means any road under the jurisdiction of and maintained by a 
     public authority and open to public travel. Public road 
     mileage as used in this subsection shall be determined as of 
     the end of the calendar year prior to the year in which the 
     funds are apportioned and shall be certified by the Governor 
     of the State and subject to approval by the Secretary.
       ``(ii) Minimum apportionment.--The annual apportionment to 
     each State shall not be less than \1/2\ of 1 percent of the 
     total apportionment, except that the apportionment to the 
     Secretary of the Interior on behalf of Indian tribes shall 
     not be less than \3/4\ of 1 percent of the total 
     apportionment, and the apportionments to the Virgin Islands, 
     Guam, American Samoa, and the Commonwealth of the Northern 
     Mariana Islands shall not be less than \1/4\ of 1 percent of 
     the total apportionment.
       ``(5) Applicability of chapter 1.--Section 402(d) of this 
     title shall apply in the administration of this subsection.
       ``(6) Federal share.--The Federal share of the cost of a 
     project or program funded under this subsection shall be 80 
     percent.
       ``(7) Application in indian country.--
       ``(A) Use of terms.--For the purpose of application of this 
     subsection in Indian country, the terms `State' and `Governor 
     of the State' include the Secretary of the Interior and the 
     term `political subdivisions of the State' includes an Indian 
     tribe.
       ``(B) Indian country defined.--In this subsection, the term 
     `Indian country' means--
       ``(i) all land within the limits of any Indian reservation 
     under the jurisdiction of the United States, notwithstanding 
     the issuance of any patent and including rights-of-way 
     running through the reservation;
       ``(ii) all dependent Indian communities within the borders 
     of the United States, whether within

[[Page 10908]]

     the original or subsequently acquired territory thereof and 
     whether within or without the limits of a State; and
       ``(iii) all Indian allotments, the Indian titles to which 
     have not been extinguished, including rights-of-way running 
     through such allotments.
       ``(c) State Defined.--In this section, the term `State' 
     means each of the 50 States, the District of Columbia, Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, and the 
     Secretary of the Interior on behalf of Indian tribes.
       ``(d) Construction With Respect to District of Columbia.--
     In the administration of this section with respect to the 
     District of Columbia, a reference in this section to the 
     Governor of a State shall refer to the Mayor of the District 
     of Columbia.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 4 
     is amended by inserting after the item relating to section 
     407 the following:

``407A. Federal coordination and enhanced support of emergency medical 
              services.''.

     SEC. 4109. REPEAL OF AUTHORITY FOR ALCOHOL TRAFFIC SAFETY 
                   PROGRAMS.

       (a) Repeal.--Section 408 is repealed.
       (b) Clerical Amendment.--The chapter analysis for chapter 4 
     is amended by striking the item relating to section 408.

     SEC. 4110. IMPAIRED DRIVING PROGRAM.

       (a) Maintenance of Effort.--Section 410(a)(2) is amended by 
     striking ``the Transportation Equity Act for the 21st 
     Century'' and inserting ``the Highway Safety Grant Program 
     Reauthorization Act of 2004''.
       (b) Revised Grant Authority.--Section 410 is amended--
       (1) by striking paragraph (3) of subsection (a) and 
     redesignating paragraph (4) as paragraph (3); and
       (2) by striking subsections (b) through (f) and inserting 
     the following:
       ``(b) Program-Related Eligibility Requirements.--To be 
     eligible for a grant under this section, a State shall--
       ``(1) carry out each of the programs and activities 
     required under subsection (c);
       ``(2) comply with the additional requirements set forth in 
     subsection (d) with respect to such programs and activities; 
     and
       ``(3) comply with any additional requirements of the 
     Secretary.
       ``(c) Required State Programs and Activities.--For the 
     purpose of subsection (b)(1), a State must meet the 
     requirements of 4 of the following 6 criteria in order to 
     receive a grant under this section:
       ``(1) Check-point, saturation patrol program.--
       ``(A) A State program to conduct of a series of high-
     visibility, Statewide law enforcement campaigns in which law 
     enforcement personnel monitor for impaired driving, either 
     through use of check-points or saturation patrols, on a 
     nondiscriminatory, lawful basis for the purpose of 
     determining whether the operators of the motor vehicles are 
     driving while under the influence of alcohol or controlled 
     substances that meets the requirements of subparagraphs (B) 
     and (C).
       ``(B) A program meets the requirements of this subparagraph 
     only if a State organizes the campaigns in cooperation with 
     related national campaigns organized by the National Highway 
     Traffic Safety Administration, but this subparagraph does not 
     preclude a State from initiating high-visibility, Statewide 
     law enforcement campaigns independently of the cooperative 
     efforts.
       ``(C) A program meets the requirements of this subparagraph 
     only if, for each fiscal year, a State demonstrates to the 
     Secretary that the State and the political subdivisions of 
     the State that receive funds under this section have 
     increased, in the aggregate, the total number of impaired 
     driving law enforcement activities, as described in 
     subparagraph (A) (or any other similar activity approved by 
     the Secretary), initiated in such State during the preceding 
     fiscal year by a factor that the Secretary determines 
     meaningful for the State over the number of such activities 
     initiated in such State during the preceding fiscal year, 
     which shall not be less than 5 percent.
       ``(2) Prosecution and adjudication program.--For grants 
     made during fiscal years after fiscal year 2004, a State 
     prosecution and adjudication program under which--
       ``(A) judges and prosecutors are actively encouraged to 
     prosecute and adjudicate cases of defendants who repeatedly 
     commit impaired driving offenses by reducing the use of State 
     diversion programs, or other means that have the effect of 
     avoiding or expunging a permanent record of impaired driving 
     in such cases;
       ``(B) the courts in a majority of the judicial 
     jurisdictions of the State are monitored on the courts' 
     adjudication of cases of impaired driving offenses; or
       ``(C) annual Statewide outreach is provided for judges and 
     prosecutors on innovative approaches to the prosecution and 
     adjudication of cases of impaired driving offenses that have 
     the potential for significantly improving the prosecution and 
     adjudication of such cases.
       ``(3) Impaired operator information system.--
       ``(A) A State impaired operator information system that--
       ``(i) tracks drivers who are arrested or convicted for 
     violation of laws prohibiting impaired operation of motor 
     vehicles;
       ``(ii) includes information about each case of an impaired 
     driver beginning at the time of arrest through case 
     disposition, including information about any trial, plea, 
     plea agreement, conviction or other disposition, sentencing 
     or other imposition of sanctions, and substance abuse 
     treatment;
       ``(iii) provides--

       ``(I) accessibility to the information for law enforcement 
     personnel Statewide and for United States law enforcement 
     personnel; and
       ``(II) linkage for the sharing of the information and of 
     the information in State traffic record systems among 
     jurisdictions and appropriate agencies, court systems and 
     offices of the States;

       ``(iv) shares information with the National Highway Traffic 
     Safety Administration for compilation and use for the 
     tracking of impaired operators of motor vehicles who move 
     from State to State; and
       ``(v) meets the requirements of subparagraphs (B), (C), and 
     (D) of this paragraph, as applicable.
       ``(B) A program meets the requirements of this subparagraph 
     only if, during fiscal years 2004 and 2005, a State--
       ``(i) assesses the system used by the State for tracking 
     drivers who are arrested or convicted for violation of laws 
     prohibiting impaired operation of motor vehicles;
       ``(ii) identifies ways to improve the system, as well as to 
     enhance the capability of the system to provide information 
     in coordination with impaired operator information systems of 
     other States; and
       ``(iii) develops a strategic plan that sets forth the 
     actions to be taken and the resources necessary to achieve 
     the identified improvements and to enhance the capability for 
     coordination with the systems of other States.
       ``(C) A program meets the requirements of this subparagraph 
     only if, in each of fiscal years 2006, 2007, and 2008, a 
     State demonstrates to the Secretary that the State has made 
     substantial and meaningful progress in improving the State's 
     impaired operator information system, and makes public a 
     report on the progress of the information system.
       ``(D) A program meets the requirements of this subparagraph 
     only if, in fiscal year 2009, a State demonstrates to the 
     Secretary that the State's impaired operator information 
     system meets the basic standards for such systems as 
     determined by the Secretary.
       ``(4) Impaired driving performance.--The percentage of 
     fatally-injured drivers with 0.08 percent or greater blood 
     alcohol concentration in the State has decreased in each of 
     the 2 most recent calendar years.
       ``(5) Impaired driving task force.--(A) Establishment of an 
     impaired driving task force that involves all relevant State, 
     tribal, and local agencies responsible for reducing alcohol 
     impairment and impaired driving and meets the requirements of 
     subparagraphs (B), (C), and (D). The purpose of the task 
     force is to oversee efforts to reduce impaired driving by 
     strengthening applicable laws, regulations, programs, and 
     policies, and to coordinate impaired driving resources and 
     programs among different jurisdictions. The impaired driving 
     task force shall include State, Tribal, and local law 
     enforcement, motor carrier safety agencies, and State alcohol 
     and drug abuse prevention agencies, State and local court 
     systems, State drivers licensing agencies, the State highway 
     safety office, and State parole and probation agencies.
       ``(B) In fiscal year 2004 and fiscal year 2005, the State 
     shall establish a statewide impaired driving task force to 
     assess the State's impaired driving system, identify the 
     opportunities for improvements in the system, and develop a 
     strategic plan that outlines the steps and resources 
     necessary to improve the system and enhance coordination 
     among State and local agencies responsible for reducing 
     impaired driving.
       ``(C) In each subsequent fiscal year, the State 
     demonstrates progress in the implementation of top priorities 
     of the strategic plan.
       ``(D) The State provides the Secretary a copy of the 
     strategic plan developed under subparagraph and in subsequent 
     years, a report detailing the progress of the strategic plan. 
     The Secretary shall make available for public viewing each 
     strategic plan and progress report.
       ``(6) Impaired driving courts.--
       ``(A) In general.--A program to consolidate and coordinate 
     impaired driving cases into courts that specialize in 
     impaired driving cases, with the emphasis on tracking and 
     processing offenders of impaired driving laws, (hereinafter 
     referred to as DWI courts) that meets the requirements of 
     this paragraph.
       ``(B) Characteristics.--A DWI Court is a distinct function 
     performed by a court system for the purpose of changing the 
     behavior of alcohol or drug dependent offenders arrested for 
     driving while impaired. A DWI Court can be a dedicated court 
     with dedicated personnel, including judges, prosecutors and 
     probation officers. A DWI court may be an existing court 
     system that serves the following essential DWI Court 
     functions:
       ``(i) A DWI Court performs an assessment of high-risk 
     offenders utilizing a team headed by the judge and including 
     all criminal justice stakeholders (prosecutors, defense 
     attorneys, probations officers, law enforcement personnel and 
     others) along with alcohol/drug treatment professionals.
       ``(ii) The DWI Court team recommends a specific plea 
     agreement or contract for each offender that can include 
     incarceration, treatment, and close community supervision. 
     The agreement maximizes the probability of rehabilitation and 
     minimizes the likelihood of recidivism.
       ``(iii) Compliance with the agreement is verified with 
     thorough monitoring and frequent alcohol testing. Periodic 
     status hearings assess

[[Page 10909]]

     offender progress and allow an opportunity for modifying the 
     sentence if necessary.
       ``(C) Assessment.--In the first year of operation, the 
     States shall assess the number of court systems in its 
     jurisdiction that are consistently performing the DWI Court 
     functions.
       ``(D) Plan.--In the second year of operation, the State 
     shall develop a strategic plan for increasing the number of 
     courts performing the DWI function.
       ``(E) Progress.--In subsequent years of operation, the 
     State shall demonstrate progress in increasing the number of 
     DWI Courts and in increasing the number of high-risk 
     offenders participating in and successfully completing DWI 
     Court agreements.
       ``(d) Uses of Grants.--Grants made under this section may 
     be used for programs and activities described in subsection 
     (c) and to defray the following costs:
       ``(1) Labor costs, management costs, and equipment 
     procurement costs for the high-visibility, Statewide law 
     enforcement campaigns under subsection (c)(1).
       ``(2) The costs of the training of law enforcement 
     personnel and the procurement of technology and equipment, 
     such as and including video equipment and passive alcohol 
     sensors, to counter directly impaired operation of motor 
     vehicles.
       ``(3) The costs of public awareness, advertising, and 
     educational campaigns that publicize use of sobriety check 
     points or increased law enforcement efforts to counter 
     impaired operation of motor vehicles.
       ``(4) The costs of public awareness, advertising, and 
     educational campaigns that target impaired operation of motor 
     vehicles by persons under 34 years of age.
       ``(5) The costs of the development and implementation of a 
     State impaired operator information system described in 
     subsection (c)(3).
       ``(6) The costs of operating programs that impound the 
     vehicle of an individual arrested as an impaired operator of 
     a motor vehicle for not less than 12 hours after the operator 
     is arrested.
       ``(e) Additional Authorities for Certain Authorized Uses.--
       ``(1) Combination of grant proceeds.--Grant funds used for 
     a campaign under subsection (d)(3) may be combined, or 
     expended in coordination, with proceeds of grants under 
     section 402 of this title.
       ``(2) Coordination of uses.--Grant funds used for a 
     campaign under paragraph (3) or (4) of subsection (d) may be 
     expended--
       ``(A) in coordination with employers, schools, entities in 
     the hospitality industry, and nonprofit traffic safety 
     groups; and
       ``(B) in coordination with sporting events and concerts and 
     other entertainment events.
       ``(f) Funding.--
       ``(1) In general.--Except as provided in paragraph (2), 
     grant funding under this section shall be allocated among 
     eligible States on the basis of the apportionment formula 
     that applies for apportionments under section 402(c) of this 
     title.
       ``(2) High fatality-rate states.--The amount of the grant 
     funds allocated under this subsection to each of the 10 
     States with the highest impaired driving-related fatality 
     rate for the most recent fiscal year for which the data is 
     available preceding the fiscal year of the allocation shall 
     be twice the amount that, except for this subparagraph, would 
     otherwise be allocated to the State under paragraph (1).
       ``(g) Use of Funds by High Fatality-Rate States.--
       ``(1) Required uses.--At least \1/2\ of the amounts 
     allocated to States under subsection (f)(2) shall be used for 
     the program described in subsection (c)(1).
       ``(2) Requirement for plan.--A State receiving an 
     allocation of grant funds under subsection (f)(2) shall 
     expend those funds only after consulting with the 
     Administrator of the National Highway Traffic Safety 
     Administration regarding such expenditures.
       ``(h) Definitions.--In this section:
       ``(1) Impaired operator.--The term `impaired operator' 
     means a person who, while operating a motor vehicle--
       ``(A) has a blood alcohol content of 0.08 percent or 
     higher; or
       ``(B) is under the influence of a controlled substance.
       ``(2) Impaired driving-related fatality rate.--The term 
     `impaired driving-related fatality rate' means the rate of 
     the fatal accidents that involve impaired drivers while 
     operating motor vehicles, as calculated in accordance with 
     regulations which the Administrator of the National Highway 
     Traffic Safety Administration shall prescribe.''.
       (c) NHTSA To Issue Regulations.--Not later than 12 months 
     after the date of enactment of the Highway Safety Grant 
     Program Reauthorization Act of 2004, the National Highway 
     Traffic Safety Administration shall issue guidelines to the 
     States specifying the types and formats of data that States 
     should collect relating to drivers who are arrested or 
     convicted for violation of laws prohibiting the impaired 
     operation of motor vehicles.

     SEC. 4111. STATE TRAFFIC SAFETY INFORMATION SYSTEM 
                   IMPROVEMENTS.

       (a) Grant Program Authority.--Chapter 4 is amended by 
     adding at the end the following:

     ``Sec. 412. State traffic safety information system 
       improvements

       ``(a) Grant Authority.--Subject to the requirements of this 
     section, the Secretary shall make grants of financial 
     assistance to eligible States to support the development and 
     implementation of effective programs by such States to--
       ``(1) improve the timeliness, accuracy, completeness, 
     uniformity, integration, and accessibility of the safety data 
     of the State that is needed to identify priorities for 
     national, State, and local highway and traffic safety 
     programs;
       ``(2) evaluate the effectiveness of efforts to make such 
     improvements;
       ``(3) link the State data systems, including traffic 
     records, with other data systems within the State, such as 
     systems that contain medical, roadway, and economic data; and
       ``(4) improve the compatibility and interoperability of the 
     data systems of the State with national data systems and data 
     systems of other States and enhance the ability of the 
     Secretary to observe and analyze national trends in crash 
     occurrences, rates, outcomes, and circumstances.
       ``(b) First-Year Grants.--
       ``(1) Eligibility.--To be eligible for a first-year grant 
     under this section in a fiscal year, a State shall 
     demonstrate to the satisfaction of the Secretary that the 
     State has--
       ``(A) established a highway safety data and traffic records 
     coordinating committee with a multidisciplinary membership 
     that includes, among others, managers, collectors, and users 
     of traffic records and public health and injury control data 
     systems; and
       ``(B) developed a multiyear highway safety data and traffic 
     records system strategic plan that addresses existing 
     deficiencies in the State's highway safety data and traffic 
     records system, is approved by the highway safety data and 
     traffic records coordinating committee, and--
       ``(i) specifies how existing deficiencies in the State's 
     highway safety data and traffic records system were 
     identified;
       ``(ii) prioritizes, on the basis of the identified highway 
     safety data and traffic records system deficiencies, the 
     highway safety data and traffic records system needs and 
     goals of the State, including the activities under subsection 
     (a);
       ``(iii) identifies performance-based measures by which 
     progress toward those goals will be determined; and
       ``(iv) specifies how the grant funds and any other funds of 
     the State are to be used to address needs and goals 
     identified in the multiyear plan.
       ``(2) Grant amount.--Subject to subsection (d)(3), the 
     amount of a first-year grant to a State for a fiscal year 
     shall the higher of--
       ``(A) the amount determined by multiplying--
       ``(i) the amount appropriated to carry out this section for 
     such fiscal year, by
       ``(ii) the ratio that the funds apportioned to the State 
     under section 402 of this title for fiscal year 2003 bears to 
     the funds apportioned to all States under such section for 
     fiscal year 2003; or
       ``(B) $300,000.
       ``(c) Successive Year Grants.--
       ``(1) Eligibility.--A State shall be eligible for a grant 
     under this subsection in a fiscal year succeeding the first 
     fiscal year in which the State receives a grant under 
     subsection (b) if the State, to the satisfaction of the 
     Secretary--
       ``(A) submits an updated multiyear plan that meets the 
     requirements of subsection (b)(1)(B);
       ``(B) certifies that its highway safety data and traffic 
     records coordinating committee continues to operate and 
     supports the multiyear plan;
       ``(C) specifies how the grant funds and any other funds of 
     the State are to be used to address needs and goals 
     identified in the multiyear plan;
       ``(D) demonstrates measurable progress toward achieving the 
     goals and objectives identified in the multiyear plan; and
       ``(E) includes a current report on the progress in 
     implementing the multiyear plan.
       ``(2) Grant amount.--Subject to subsection (d)(3), the 
     amount of a year grant made to a State for a fiscal year 
     under this subsection shall equal the higher of--
       ``(A) the amount determined by multiplying--
       ``(i) the amount appropriated to carry out this section for 
     such fiscal year, by
       ``(ii) the ratio that the funds apportioned to the State 
     under section 402 of this title for fiscal year 2003 bears to 
     the funds apportioned to all States under such section for 
     fiscal year 2003; or
       ``(B) $500,000.
       ``(d) Additional Requirements and Limitations.--
       ``(1) Model data elements.--The Secretary, in consultation 
     with States and other appropriate parties, shall determine 
     the model data elements that are useful for the observation 
     and analysis of State and national trends in occurrences, 
     rates, outcomes, and circumstances of motor vehicle traffic 
     accidents. In order to be eligible for a grant under this 
     section, a State shall submit to the Secretary a 
     certification that the State has adopted and uses such model 
     data elements, or a certification that the State will use 
     grant funds provided under this section toward adopting and 
     using the maximum number of such model data elements as soon 
     as practicable.
       ``(2) Data on use of electronic devices.--The model data 
     elements required under paragraph (1) shall include data 
     elements, as determined appropriate by the Secretary in 
     consultation with the States and with appropriate elements of 
     the law enforcement community, on the impact on traffic 
     safety of the use of electronic devices while driving.
       ``(3) Maintenance of effort.--No grant may be made to a 
     State under this section in any fiscal year unless the State 
     enters into such agreements with the Secretary as the 
     Secretary may require to ensure that the State will maintain 
     its aggregate expenditures from all other sources for highway 
     safety data programs at or above the average level of such 
     expenditures maintained by such State in the 2 fiscal years 
     preceding the date of enactment of the Highway

[[Page 10910]]

     Safety Grant Program Reauthorization Act of 2003.
       ``(4) Federal share.--The Federal share of the cost of 
     adopting and implementing in a fiscal year a State program 
     described in subsection (a) may not exceed 80 percent.
       ``(5) Limitation on use of grant proceeds.--A State may use 
     the proceeds of a grant received under this section only to 
     implement the program described in subsection (a) for which 
     the grant is made.
       ``(e) Applicability of Chapter 1.--Section 402(d) of this 
     title shall apply in the administration of this section.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 4 
     is amended by adding at the end the following:

``412. State traffic safety information system improvements.''.

     SEC. 4112. NHTSA ACCOUNTABILITY.

       (a) In General.--Chapter 4, as amended by section 4111, is 
     amended by adding at the end the following:

     ``Sec. 413. Agency accountability

       ``(a) Triennial State Management Reviews.--At least once 
     every 3 years the National Highway Traffic Safety 
     Administration shall conduct a review of each State highway 
     safety program. The review shall include a management 
     evaluation of all grant programs partially or fully funded 
     under this title. The Administrator shall provide review-
     based recommendations on how each State may improve the 
     management and oversight of its grant activities and may 
     provide a management and oversight plan.
       ``(b) Recommendations Before Submission.--In order to 
     provide guidance to State highway safety agencies on matters 
     that should be addressed in the State highway safety program 
     goals and initiatives as part of its highway safety plan 
     before the plan is submitted for review, the Administrator 
     shall provide non-binding data-based recommendations to each 
     State at least 90 days before the date on which the plan is 
     to be submitted for approval.
       ``(c) State Program Review.--The Administrator shall--
       ``(1) conduct a program improvement review of any State 
     that does not make substantial progress over a 3-year period 
     in meeting its priority program goals; and
       ``(2) provide technical assistance and safety program 
     recommendations to the State for any goal not achieved.
       ``(d) Regional Harmonization.--The Administration and the 
     Inspector General of the Department of Transportation shall 
     undertake a State grant administrative review of the 
     practices and procedures of the management reviews and 
     program reviews conducted by Administration regional offices 
     and formulate a report of best practices to be completed 
     within 180 days after the date of enactment of the Highway 
     Safety Grant Program Reauthorization Act of 2004.
       ``(e) Best Practices Guidelines.--
       ``(1) Uniform guidelines.--The Administration shall issue 
     uniform management review and program review guidelines based 
     on the report under subsection (d). Each regional office 
     shall use the guidelines in executing its State 
     administrative review duties.
       ``(2) Publication.--The Administration shall make the 
     following documents available via the Internet upon their 
     completion:
       ``(A) The Administration's management review and program 
     review guidelines.
       ``(B) State highway safety plans.
       ``(C) State annual accomplishment reports.
       ``(D) The Administration's State management reviews.
       ``(E) The Administration's State program improvement plans.
       ``(3) Reports to state highway safety agencies.--The 
     Administrator may not make a plan, report, or review 
     available under paragraph (2) that is directed to a State 
     highway safety agency until after it has been submitted to 
     that agency.
       ``(f) General Accounting Office Review.--The General 
     Accounting Office shall analyze the effectiveness of the 
     National Highway Traffic Safety Administration's oversight of 
     traffic safety grants by seeking to determine the usefulness 
     of the Administration's advice to the States regarding grants 
     administration and State activities, the extent to which the 
     States incorporate the Administration's recommendation into 
     their highway safety plans and programs, and improvements 
     that result in a State's highway safety program that may be 
     attributable to the Administration's recommendations. Based 
     on this analysis, the General Accounting Office shall submit 
     a report by not later than the end of fiscal year 2008 to the 
     House of Representatives Committee on Transportation and 
     Infrastructure and the Senate Committee on Commerce, Science, 
     and Transportation.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     4, as amended by section 4111, is amended by inserting after 
     the item relating to section 412 the following:

``413. Agency accountability.''.

            PART II--SPECIFIC VEHICLE SAFETY-RELATED RULINGS

     SEC. 4151. AMENDMENT OF TITLE 49, UNITED STATES CODE.

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

     SEC. 4152. VEHICLE CRASH EJECTION PREVENTION.

       (a) In General.--Subchapter II of chapter 301 is amended by 
     adding at the end the following:

     ``Sec. 30128. Vehicle accident ejection protection

       ``(a) In General.--The Secretary of Transportation shall 
     prescribe a safety standard under this chapter or upgrade 
     existing Federal motor vehicle safety standards to reduce 
     complete and partial occupant ejection from motor vehicles 
     with a gross vehicle weight rating of not more than 10,000 
     pounds that are involved in accidents that present a risk of 
     occupant ejection. In formulating the safety standard, the 
     Secretary shall consider the ejection-mitigation capabilities 
     of safety technologies, such as advanced side glazing, side 
     curtains, and side impact air bags.
       ``(b) Door Lock and Retention Standard.--The Secretary 
     shall upgrade Federal Motor Vehicle Safety Standard No. 206 
     to require manufacturers of new motor vehicles with a gross 
     vehicle weight rating of not more than 10,000 pounds that are 
     distributed in commerce for sale in the United States to make 
     such modifications to door locks, door latches, and retention 
     components of doors in such vehicles as the Secretary 
     determines to be necessary to reduce occupant ejection from 
     such vehicles in motor vehicle accidents.''.
       (b) Rulemaking Deadlines.--
       (1) Rulemaking.--The Secretary of Transportation shall 
     issue--
       (A) a notice of a proposed rulemaking under section 30128 
     of title 49, United States Code, not later than June 30, 
     2006; and
       (B) a final rule under that section not later than 18 
     months after the publication of the notice of proposed 
     rulemaking.
       (2) Effective date of requirements.--In the final rule, the 
     Secretary shall set forth effective dates for the 
     requirements contained in the rule.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation 
     $500,000 for each of fiscal years 2004 and 2005 to promulgate 
     rules under section 30128 of title 49, United States Code.
       (d) Conforming Amendment.--The chapter analysis for chapter 
     301 is amended by inserting after the item relating to 
     section 30127 the following:

``30128. Vehicle accident ejection protection.''.

     SEC. 4153. VEHICLE BACKOVER AVOIDANCE TECHNOLOGY STUDY.

       (a) In General.--The Administrator of the National Highway 
     Traffic Safety Administration shall conduct a study of 
     effective methods for reducing the incidence of injury and 
     death outside of parked passenger motor vehicles with a gross 
     vehicle weight rating of not more than 10,000 pounds 
     attributable to movement of such vehicles. The Administrator 
     shall complete the study within 1 year after the date of 
     enactment of this Act and report its findings to the Senate 
     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Energy and Commerce not 
     later than 5 months after the date of enactment of this Act.
       (b) Specific Issues To Be Covered.--The study required by 
     subsection (a) shall--
       (1) include an analysis of backover prevention technology;
       (2) identify, evaluate, and compare the available 
     technologies for detecting people or objects behind a motor 
     vehicle with a gross vehicle weight rating of not more than 
     10,000 pounds for their accuracy, effectiveness, cost, and 
     feasibility for installation; and
       (3) provide an estimate of cost savings that would result 
     from widespread use of backover prevention devices and 
     technologies in motor vehicles with a gross vehicle weight 
     rating of not more than 10,000 pounds, including savings 
     attributable to the prevention of--
       (A) injuries and fatalities; and
       (B) damage to bumpers and other motor vehicle parts and 
     damage to other objects.

     SEC. 4154. VEHICLE BACKOVER DATA COLLECTION.

       In conjunction with the study required in section 4153, the 
     National Highway Traffic Safety Administration may establish 
     a method to collect and maintain data on the number and types 
     of injuries and deaths involving motor vehicles with a gross 
     vehicle weight rating of not more than 10,000 pounds in non-
     traffic, non-accident incidents to assist in the analysis 
     required in section 4153 of this Act regarding the inclusion 
     of backover prevention technologies in motor vehicles with a 
     gross vehicle weight rating of not more than 10,000 pounds.

     SEC. 4155. AGGRESSIVITY AND INCOMPATIBILITY REDUCTION 
                   STANDARD.

       (a) In General.--Subchapter II of chapter 301, as amended 
     by section 4152, is amended by adding at the end the 
     following:

     ``Sec. 30129. Vehicle incompatibility and aggressivity 
       reduction standard

       ``(a) In General.--The Secretary of Transportation shall 
     issue motor vehicle safety standards to reduce vehicle 
     incompatibility and aggressivity for motor vehicles with a 
     gross vehicle weight rating of not more than 10,000 pounds. 
     In formulating the standards, the Secretary shall consider 
     factors such as bumper height, weight, and any other design 
     characteristics necessary to ensure better management of 
     crash forces in frontal and side impact crashes among 
     different types, sizes, and weights of motor vehicles with a 
     gross vehicle weight rating of not more than 10,000 pounds in 
     order to reduce occupant deaths and injuries.
       ``(b) Standards.--The Secretary shall develop a standard 
     rating metric to evaluate compatibility and aggressivity 
     among motor vehicles

[[Page 10911]]

     with a gross vehicle weight rating of not more than 10,000 
     pounds.
       ``(c) Public Information.--The Secretary shall create a 
     public information program that includes vehicle ratings 
     based on risks posed by vehicle incompatibility and 
     aggressivity to occupants, risks posed by vehicle 
     incompatibility and agressivity to other motorists, and 
     combined risks posed by vehicle incompatibility and 
     agressivity by vehicle make and model.''.
       (b) Rulemaking Deadlines.--
       (1) Rulemaking.--The Secretary of Transportation shall 
     issue--
       (A) a notice of a proposed rulemaking under section 30129 
     of title 49, United States Code, not later than January 31, 
     2007; and
       (B) a final rule under that section not later than 18 
     months after the publication of the notice of proposed 
     rulemaking.
       (2) Effective date of requirements.--In the final rule, the 
     Secretary shall set forth effective dates for the 
     requirements contained in the rule.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     301 is amended by inserting after the item relating to 
     section 30128 the following:

``30129. Vehicle incompatibility and aggressivity reduction 
              standard.''.

     SEC. 4156. IMPROVED CRASHWORTHINESS.

       (a) Improved Crashworthiness.--Subchapter II of chapter 
     301, as amended by section 4155, is amended by adding at the 
     end the following:

     ``Sec. 30130. Improved crashworthiness of motor vehicles

       ``(a) Rollovers.--
       ``(1) In general.--The Secretary of Transportation shall 
     prescribe a motor vehicle safety standard under this chapter 
     for rollover crashworthiness standards for motor vehicles 
     with a gross weight rating of not more than 10,000 pounds. In 
     formulating the safety standard, the Secretary shall consider 
     the prescription of a roof strength standard based on dynamic 
     tests that realistically duplicate the actual forces 
     transmitted to a passenger motor vehicle during an on-roof 
     rollover crash, and shall consider safety technologies and 
     design improvements such as--
       ``(A) improved seat structure and safety belt design, 
     including seat belt pretensioners;
       ``(B) side impact head protection airbags; and
       ``(C) roof injury protection measures.
       ``(2) Rollover resistance standard.--The Secretary shall 
     prescribe a motor vehicle safety standard under this chapter 
     to improve on the basic design characteristics of motor 
     vehicles with a gross vehicle weight rating of not more than 
     10,000 pounds to increase their resistance to rollover. The 
     Secretary shall also consider additional technologies to 
     improve the handling of motor vehicles with a gross vehicle 
     weight rating of not more than 10,000 pounds and thereby 
     reduce the likelihood of vehicle instability and rollovers.
       ``(3) Study.--The Secretary shall conduct a study on 
     electronic stability control systems and other technologies 
     designed to improve the handling of motor vehicles with a 
     gross vehicle weight rating of not more than 10,000 pounds 
     and shall report the results of that study to the Senate 
     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Transportation and 
     Infrastructure by December 31, 2005.
       ``(b) Frontal Impact Standards and Crash Tests.--
       ``(1) In general.--The Secretary shall prescribe a motor 
     vehicle safety standard under this chapter or upgrade 
     existing Federal motor vehicle safety standards to improve 
     the protection of occupants in frontal impact crashes 
     involving motor vehicles with a gross vehicle weight rating 
     of not more than 10,000 pounds.
       ``(2) Test methodology.--In determining the standard under 
     paragraph (1), the Secretary shall--
       ``(A) evaluate additional test barriers and measurements of 
     occupant head impact and neck injuries; and
       ``(B) review frontal impact criteria, including 
     consideration of criteria established by the Insurance 
     Institute for Highway Safety.
       ``(c) Side Impact Standards and Crash Tests.--
       ``(1) In general.--The Secretary shall prescribe a motor 
     vehicle safety standard under this chapter or upgrade 
     existing Federal motor vehicle safety standards to improve 
     the protection afforded to occupants in side impact crashes 
     involving motor vehicles with a gross vehicle weight rating 
     of not more than 10,000 pounds.
       ``(2) Test methodology.--In prescribing the standard under 
     paragraph (1), the Secretary shall--
       ``(A) evaluate additional test barriers and measurements of 
     occupant head impact and neck injuries;
       ``(C) consider the need for additional and new crash test 
     dummies that represent the full range of occupant sizes and 
     weights; and
       ``(D) review side impact criteria, including consideration 
     of criteria established by the Insurance Institute for 
     Highway Safety.''.
       (b) Rulemaking Deadlines.--
       (1) Rulemaking.--The Secretary of Transportation shall--
       (A) issue a notice of a proposed rulemaking under section 
     30130 of title 49, United States Code, not later than June 
     30, 2006; and
       (B) issue a final rule not later than 18 months after 
     publication of the notice of proposed rulemaking.
       (2) Effective date of requirements.--In the final rule, the 
     Secretary shall set forth effective dates for the 
     requirements contained in this rule.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     301 is amended by inserting after the item relating to 
     section 30129 the following:

``30130. Improved crashworthiness of passenger motor vehicles.''.

     SEC. 4157. 15-PASSENGER VANS.

       (a) In General.--The Secretary of Transportation shall 
     initiate a rulemaking and issue a final regulation not later 
     than September 31, 2005, to include all 15-passenger vans 
     with a gross vehicle weight rating of not more than 10,000 
     pounds in the National Highway Traffic Safety 
     Administration's dynamic rollover testing program and require 
     such vans to comply with all existing and prospective Federal 
     Motor Vehicle Safety Standards for occupant protection and 
     vehicle crash avoidance that are relevant to such vehicles.
       (b) New Car Assessment Program.--The Secretary shall 
     initiate a rulemaking and issue a final regulation not later 
     than September 31, 2005, to include all 15-passenger vans 
     with a gross vehicle weight of not more than 10,000 pounds in 
     the Administration's New Car Assessment Program rollover 
     resistance program.
       (c) Vehicle Control Technology for 15-Passenger Vans.--The 
     National Highway Traffic Safety Administration shall evaluate 
     and test the potential of technological systems, particularly 
     electronic stability control systems and rollover warning 
     systems, to assist drivers in maintaining control of 15-
     passenger vans with a gross vehicle weight rating of not more 
     than 10,000 pounds.
       (d) Certain Specialized Vehicles Excluded.--In this 
     section, the term ``15-passenger van'' does not include an 
     ambulance, tow truck, or other vehicle designed primarily for 
     the transportation of property or special purpose equipment.

     SEC. 4158. ADDITIONAL SAFETY PERFORMANCE CRITERIA FOR TIRES.

       (a) Strength and Road Hazard Protection.--The Secretary of 
     Transportation shall issue a final rule to upgrade Federal 
     Motor Vehicle Safety Standard No. 139 to include strength and 
     road hazard protection safety performance criteria for light 
     vehicle tires, which are criteria that were not addressed in 
     the June 2003 final rule mandated by the Transportation 
     Recall Enhancement, Accountability, and Documentation Act of 
     2000.
       (b) Resistance to Bead Unseating and Aging.--The Secretary 
     of Transportation shall issue a final rule to upgrade Federal 
     Motor Vehicle Safety Standard No. 139 to include resistance 
     to bead unseating and aging safety performance criteria for 
     passenger motor vehicle tires, which are criteria that were 
     not addressed in the June, 2003, final rule mandated by the 
     Transportation Recall Enhancement, Accountability, and 
     Documentation Act of 2000.
       (c) Rulemaking Deadlines.--The Secretary of Transportation 
     shall--
       (1) issue a notice of proposed rulemaking under subsection 
     (a) not later than June 30, 2005, and under subsection(b) not 
     later than December 31, 2005; and
       (2) issue a final rule relating to subsection (a) not later 
     than 18 months after June 30, 2005, and a final rule under 
     subsection (b) not later than 18 months after December 31, 
     2005.
       (d) Technology Use and Report.--The Secretary shall 
     reconsider the use of shearography analysis, on a sampling 
     basis, for regulatory compliance and the Administrator of the 
     National Highway Traffic Safety Administration shall report 
     to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure on the most cost effective 
     methods of using such technology within 2 years after the 
     date of enactment of the Highway Safety Grant Program 
     Reauthorization Act of 2004.

     SEC. 4159. SAFETY BELT USE REMINDERS.

       (a) Notice of Proposed Rules To Encourage More Seat Belt 
     Use.--Not later than 12 months after the date of enactment of 
     this Act, the Secretary of Transportation shall issue a 
     Notice of Proposed Rulemaking to amend the Federal Motor 
     Vehicle Safety Standard No. 208 for motor vehicles with a 
     gross vehicle weight rating of not more than 10,000 pounds to 
     encourage increased seat belt usage by drivers and 
     passengers. The proposed rulemaking shall take into account 
     the potential safety benefits and public acceptability of 
     alternative means to encourage increased seat belt usage, 
     including intermittent or continuous audible or visual 
     reminders when a driver or passenger is not wearing a seat 
     belt, features to prevent operation of convenience or 
     entertainment features of the vehicle when a driver or 
     passenger is not wearing a seat belt, and shall consider 
     technology, including but not limited to technology 
     identified by the National Academy of Sciences in its study 
     of the potential benefits of seat belt usage reminder 
     technologies.
       (b) Final Rule.--Not later than 24 months after the date of 
     enactment of this Act, the Secretary shall issue the final 
     rule required by subsection (a).
       (c) Buzzer Law.--
       (1) In general.--Section 30124 is amended--
       (A) by striking ``not'' the first place it appears; and
       (B) by striking ``except'' and inserting ``including''.
       (2) Conforming amendment.--Section 30122 is amended by 
     striking subsection (d).

[[Page 10912]]



     SEC. 4160. MISSED DEADLINES REPORTS.

       (a) In General.--If the Secretary of Transportation fails 
     to meet any rulemaking deadline established in this subtitle, 
     the Secretary shall transmit a report to the Senate Committee 
     on Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure within 90 days after missing the deadline--
       (1) explaining why the Secretary failed to meet the 
     deadline; and
       (2) setting forth a date by which the Secretary anticipates 
     that the rulemaking will be made.
       (b) Consideration of Effects.--The Secretary of 
     Transportation shall consider and report the potential 
     consequences, in terms of the number of deaths and the number 
     and severity of injuries, that may result from not meeting 
     any such deadline.

     SEC. 4161. GRANTS FOR IMPROVING CHILD PASSENGER SAFETY 
                   PROGRAMS.

       (a) In General.--Chapter 4 of title 23, United States Code, 
     as amended by section 4112 of this Act, is amended by adding 
     at the end the following:

     ``Sec. 414. Booster seat incentive grants

       ``(a) In General.--The Secretary of Transportation shall 
     make a grant under this section to any eligible State.
       ``(b) Eligibility Requirements.--
       ``(1) In general.--The Secretary shall make a grant to each 
     State that, as determined by the Secretary, enacts or has 
     enacted, and is enforcing a law requiring that children 
     riding in passenger motor vehicles (as defined in section 
     405(d)(4)) who are too large to be secured in a child safety 
     seat be secured in a child restraint (as defined in section 
     7(1) of Anton's Law (49 U.S.C. 30127 note)) that meets 
     requirements prescribed by the Secretary under section 3 of 
     Anton's Law.
       ``(2) Year in which first eligible.--
       ``(A) Early qualification.--A State that has enacted a law 
     described in paragraph (1) that is in effect before October 
     1, 2005, is first eligible to receive a grant under 
     subsection (a) in fiscal year 2006.
       ``(B) Subsequent qualification.--A State that enacts a law 
     described in paragraph (1) that takes effect after September 
     30, 2005, is first eligible to receive a grant under 
     subsection (a) in the first fiscal year beginning after the 
     date on which the law is enacted.
       ``(3) Continuing eligibility.--A State that is eligible 
     under paragraph (1) to receive a grant may receive a grant 
     during each fiscal year listed in subsection (f) in which it 
     is eligible.
       ``(4) Maximum number of grants.--A State may not receive 
     more than 4 grants under this section.
       ``(c) Grant Amount.--Amounts available for grants under 
     this section in any fiscal year shall be apportioned among 
     the eligible States on the basis of population.
       ``(d) Use of Grant Amounts.--
       ``(1) In general.--Of the amounts received by a State under 
     this section for any fiscal year--
       ``(A) 50 percent shall be used for the enforcement of, and 
     education to promote public awareness of, State child 
     passenger protection laws; and
       ``(B) 50 percent shall be used to fund programs that 
     purchase and distribute child booster seats, child safety 
     seats, and other appropriate passenger motor vehicle child 
     restraints to indigent families without charge.
       ``(2) Report.--Within 60 days after the State fiscal year 
     in which a State receives a grant under this section, the 
     State shall transmit to the Secretary a report documenting 
     the manner in which grant amounts were obligated or expended 
     and identifying the specific programs supports by grant 
     funds. The report shall be in a form prescribed by the 
     Secretary and may be combined with other State grant 
     reporting requirements under this chapter.
       ``(e) Definition of Child Safety Seat.--The term `child 
     safety seat' means any device (except safety belts (as such 
     term is defined in section 405(d)(5)), designed for use in a 
     motor vehicle (as such term is defined in section 405(d)(1)) 
     to restrain, seat, or position a child who weighs 50 pounds 
     or less.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of 
     Transportation, out of the Highway Trust Fund--
       ``(1) $18,000,000 for fiscal year 2006;
       ``(2) $20,000,000 for fiscal year 2007;
       ``(3) $25,000,000 for fiscal year 2008; and
       ``(4) $30,000,000 for fiscal year 2009.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 4 
     of title 23, United States Code, is amended by inserting 
     after the item relating to section 411 the following:

``414. Booster seat incentive grants.''.

     SEC. 4162. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     Transportation to carry out this subtitle and chapter 301 of 
     title 49, United States Code--
       (1) $130,500,000 for fiscal year 2004;
       (2) $133,500,000 for fiscal year 2005;
       (3) $133,600,000 for fiscal year 2006;
       (4) $134,500,000 for fiscal year 2007;
       (5) $138,000,000 for fiscal year 2008; and
       (6) $141,000,000 for fiscal year 2009.

                   PART III--MISCELLANEOUS PROVISIONS

     SEC. 4171. DRIVER LICENSING AND EDUCATION.

       (a) National Office of Driver Licensing and Education.--
     Section 105 of title 49, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(f)(1) There is a National Office of Driver Licensing and 
     Education in the National Highway Traffic Safety 
     Administration.
       ``(2) The head of the National Office of Driver Licensing 
     and Education is the Director.
       ``(3) The functions of the National Office of Driver 
     Licensing and Education are as follows:
       ``(A) To provide States with services for coordinating the 
     motor vehicle driver training and licensing programs of the 
     States.
       ``(B) To develop and make available to the States a 
     recommended comprehensive model for motor vehicle driver 
     education and graduated licensing that incorporates the best 
     practices in driver education and graduated licensing, 
     including best practices with respect to--
       ``(i) vehicle handling and crash avoidance;
       ``(ii) driver behavior and risk reduction;
       ``(iii) roadway features and associated safety 
     implications;
       ``(iv) roadway interactions involving all types of vehicles 
     and road users, such as car-truck and pedestrian-car 
     interactions;
       ``(v) parent education; and
       ``(vi) other issues identified by the Director.
       ``(C) To carry out such research (pursuant to cooperative 
     agreements or otherwise) and undertake such other activities 
     as the Director determines appropriate to develop and, on an 
     ongoing basis, improve the recommended comprehensive model.
       ``(D) To provide States with technical assistance for the 
     implementation and deployment of the motor vehicle driver 
     education and licensing comprehensive model recommended under 
     subparagraph (B).
       ``(E) To develop and recommend to the States methods for 
     harmonizing the presentation of motor vehicle driver 
     education and licensing with the requirements of multistage 
     graduated licensing systems, including systems described in 
     section 410(c)(4) of title 23, and to demonstrate and 
     evaluate the effectiveness of those methods in selected 
     States.
       ``(F) To assist States with the development and 
     implementation of programs to certify driver education 
     instructors, including the development and implementation of 
     proposed uniform certification standards.
       ``(G) To provide States with financial assistance under 
     section 412 of title 23 for--
       ``(i) the implementation of the motor vehicle driver 
     education and licensing comprehensive model recommended under 
     subparagraph (B);
       ``(ii) the establishment or improved administration of 
     multistage graduated licensing systems; and
       ``(iii) the support of other improvements in motor vehicle 
     driver education and licensing programs.
       ``(H) To evaluate the effectiveness of the comprehensive 
     model recommended under subparagraph (B).
       ``(I) To examine different options for delivering driver 
     education in the States.
       ``(J) To perform such other functions relating to motor 
     vehicle driver education or licensing as the Secretary may 
     require.
       ``(4) Not later than 42 months after the date of the 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004, the Director shall submit 
     to Congress a report on the progress made by the National 
     Office of Driver Licensing and Education with respect to the 
     functions under paragraph (3).''.
       (b) Grant Program for Improvement of Driver Education and 
     Licensing.--
       (1) Authority.--
       (A) In general.--Chapter 4 of title 23, United States Code, 
     is amended by adding at the end the following new section:

     ``SEC. 412. DRIVER EDUCATION AND LICENSING.

       ``(a) Authority.--
       ``(1) In general.--The Secretary shall carry out a program 
     to provide States, by grant, with financial assistance to 
     support the improvement of motor vehicle driver education 
     programs and the establishment and improved administration of 
     graduated licensing systems, including systems described in 
     section 410(c)(4) of this title.
       ``(2) Administrative office.--The Secretary shall 
     administer the program under this section through the 
     Director of the National Office of Driver Licensing and 
     Education.
       ``(b) Eligibility Requirements.--
       ``(1) Regulations.--The Secretary shall prescribe in 
     regulations the eligibility requirements, application and 
     approval procedures and standards, and authorized uses of 
     grant proceeds for the grant program under this section. The 
     regulations shall, at a minimum, authorize use of grant 
     proceeds for the following activities:
       ``(A) Quality assurance testing, including follow-up 
     testing to monitor the effectiveness of--
       ``(i) driver licensing and education programs;
       ``(ii) instructor certification testing; and
       ``(iii) other statistical research designed to evaluate the 
     performance of driver education and licensing programs.
       ``(B) Improvement of motor vehicle driver education 
     curricula.
       ``(C) Training of instructors for motor vehicle driver 
     education programs.
       ``(D) Testing and evaluation of motor vehicle driver 
     performance.
       ``(E) Public education and outreach regarding motor vehicle 
     driver education and licensing.
       ``(F) Improvements with respect to State graduated 
     licensing programs, as well as related enforcement 
     activities.
       ``(2) Consultation requirement.--In prescribing the 
     regulations, the Secretary shall consult with the following:
       ``(A) The Administrator of the National Highway Traffic 
     Safety Administration.
       ``(B) The heads of such other departments and agencies of 
     the United States as the Secretary considers appropriate on 
     the basis of relevant interests or expertise.

[[Page 10913]]

       ``(C) Appropriate officials of the governments of States 
     and political subdivisions of States.
       ``(D) Other relevant experts.
       ``(c) Maximum Amount of Grant.--The maximum amount of a 
     grant of financial assistance for a program, project, or 
     activity under this section may not exceed 75 percent of the 
     total cost of such program, project, or activity.''.
       (B) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``412. Driver education and licensing.''.
       (2) Time for promulgation of regulations.--The Secretary of 
     Transportation shall promulgate the regulations under section 
     412(b) of title 23, United States Code (as added by paragraph 
     (1)), not later than October 1, 2005.
       (c) Grant Program for Public Awareness of Organ Donation 
     Through Driver Licensing Programs.--
       (1) Authority.--
       (A) In general.--Chapter 4 of title 23, United States Code 
     (as amended by subsection (b)), is further amended by adding 
     at the end the following new section:

     ``SEC. 413. ORGAN DONATION THROUGH DRIVER LICENSING.

       ``(a) Authority.--
       ``(1) In general.--The Secretary shall carry out a program 
     to provide eligible recipients, by grant, with financial 
     assistance to carry out campaigns to increase public 
     awareness of, and training on, authority and procedures under 
     State law to provide for the donation of organs through a 
     declaration recorded on a motor vehicle driver license.
       ``(2) Administrative office.--The Secretary shall 
     administer the program under this section through the 
     Director of the National Office of Driver Licensing and 
     Education.
       ``(b) Eligibility Requirements.--
       ``(1) Regulations.--The Secretary shall prescribe in 
     regulations the eligibility requirements, application and 
     approval procedures and standards, and authorized uses of 
     grant proceeds for the grant program under this section.
       ``(2) Consultation requirement.--In prescribing the 
     regulations, the Secretary shall consult with the following:
       ``(A) The Administrator of the National Highway Traffic 
     Safety Administration.
       ``(B) The heads of such other departments and agencies of 
     the United States as the Secretary considers appropriate on 
     the basis of relevant interests or expertise.
       ``(C) Appropriate officials of the governments of States 
     and political subdivisions of States.
       ``(D) Representatives of private sector organizations 
     recognized for relevant expertise.''.
       (B) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``413. Organ donation through driver licensing.''.

       (2) Time for promulgation of regulations.--The Secretary of 
     Transportation shall promulgate the regulations under section 
     413(b) of title 23, United States Code (as added by paragraph 
     (1)), not later than October 1, 2005.
       (d) Study of National Driver Education Standards.--
       (1) Requirement for study.--The Secretary of Transportation 
     shall carry out a study to determine whether the 
     establishment and imposition of nationwide minimum standards 
     of motor vehicle driver education would improve national 
     highway traffic safety or the performance and legal 
     compliance of novice drivers.
       (2) Time for completion of study.--The Secretary shall 
     complete the study not later than 2 years after the date of 
     the enactment of this Act.
       (3) Report.--The Secretary shall publish a report on the 
     results of the study under this section not later than 2 
     years after the study is completed.
       (e) Authorization of Appropriations.--Of the amounts 
     available to carry out section 403 of title 23, United States 
     Code, for each of the fiscal years 2005 through 2010, 
     $5,000,000 may be made available for each such fiscal year to 
     carry out sections 412 and 413 of title 23, United States 
     Code (as added by subsections (b) and (c), respectively).

     SEC. 4172. AMENDMENT OF AUTOMOBILE INFORMATION DISCLOSURE 
                   ACT.

       (a) Safety Labeling Requirement.--Section 3 of the 
     Automobile Information Disclosure Act (15 U.S.C. 1232) is 
     amended by adding at the end the following:
       ``(g) if one or more safety ratings for such automobile 
     have been assigned and formally published or released by the 
     National Highway Traffic Safety Administration under the New 
     Car Assessment Program, information about safety ratings 
     that--
       ``(1) includes a graphic depiction of the number of stars 
     that corresponds to each such assigned safety rating 
     displayed in a clearly differentiated fashion from stars 
     indicating the unattained safety rating;
       ``(2) refers to frontal impact crash tests, side impact 
     crash tests, and rollover resistance tests (whether or not 
     such automobile has been assigned a safety rating for such 
     tests), including statements that--
       ``(A) frontal impact crash test ratings are based on risk 
     of head and chest injury;
       ``(B) side impact crash test ratings are based on risk of 
     chest injury; and
       ``(C) rollover resistance ratings are based on risk of 
     rollover in the event of a single automobile crash;
       ``(3) is presented in a legible, visible, and prominent 
     fashion and covers at least--
       ``(A) 8 percent of the total area of the label; or
       ``(B) an area with a minimum length of 4 \1/2\ inches and a 
     minimum height of 3 \1/2\ inches; and
       ``(4) contains a heading titled `Government Safety 
     Information' and a disclaimer including the following text: 
     `Star ratings for frontal impact crash tests can only be 
     compared to other vehicles in the same weight class and those 
     plus or minus 250 pounds. Side impact and rollover ratings 
     can be compared across all vehicle weights and classes. For 
     more information on safety and testing, please visit http://
www.nhtsa.dot.gov'; and
       ``(h) if an automobile has not been tested by the National 
     Highway Traffic Safety Administration under the New Car 
     Assessment Program, or safety ratings for such automobile 
     have not been assigned in one or more rating categories, a 
     statement to that effect.''.
       (b) Regulations.--Not later than January 1, 2005, the 
     Secretary of Transportation shall prescribe regulations to 
     implement the labeling requirements under subsections (g) and 
     (h) of section 3 of such Act (as added by subsection (a)).
       (c) Conforming and Technical Amendments.--Section 3 of such 
     Act is further amended--
       (1) in subsection (e), by striking ``and'' after the 
     semicolon; and
       (2) in subsection (f)--
       (A) by adding ``and'' at the end of paragraph (3); and
       (B) by striking the period at the end and inserting a 
     semicolon.
       (d) Applicability.--The labeling requirements under 
     subsections (g) and (h) of section 3 of such Act (as added by 
     subsection (a)), and the regulations prescribed under 
     subsection (b), shall apply to new automobiles delivered on 
     or after--
       (1) September 1, 2005, if the regulations under subsection 
     (b) are prescribed not later than August 31, 2004; or
       (2) September 1, 2006, if the regulations under subsection 
     (b) are prescribed after August 31, 2004.

     SEC. 4173. CHILD SAFETY.

       (a) Incorporation of Child Dummies in Safety Tests.--
       (1) Rulemaking required.--Not later than 2 years after the 
     date of the enactment of this Act, the Administrator of the 
     National Highway Traffic Safety Administration shall conduct 
     a rulemaking to increase utilization of child dummies, 
     including Hybrid-III child dummies, in motor vehicle safety 
     tests, including crash tests, conducted by the 
     Administration.
       (2) Criteria.--In conducting the rulemaking under 
     subsection (a), the Administrator shall select motor vehicle 
     safety tests in which the inclusion of child dummies will 
     lead to--
       (A) increased understanding of crash dynamics with respect 
     to children; and
       (B) measurably improved child safety.
       (3) Report.--Not later than one year after the date of the 
     enactment of this Act, the Secretary of Transportation shall 
     publish a report regarding the implementation of this 
     section.
       (b) Child Safety in Rollover Crashes.--
       (1) Consumer information program.--Not later than 2 years 
     after the date of the enactment of this Act, the Secretary of 
     Transportation shall implement a consumer information program 
     relating to child safety in rollover crashes. The Secretary 
     shall make information related to the program available to 
     the public following completion of the program.
       (2) Child dummy development.--
       (A) In general.--The Administrator of the National Highway 
     Traffic Safety Administration shall initiate the development 
     of a biofidelic child crash test dummy capable of measuring 
     injury forces in a simulated rollover crash.
       (B) Reports.--The Secretary shall submit to Congress a 
     report on progress related to such development--
       (i) not later than 1 year after the date of the enactment 
     of this Act; and
       (ii) not later than 3 years after the date of the enactment 
     of this Act.
       (c) Report on Enhanced Vehicle Safety Technologies.--Not 
     later than 2 years after the date of the enactment of this 
     Act, the Secretary of Transportation shall submit to Congress 
     a report that describes, evaluates, and determines the 
     relative effectiveness of--
       (1) currently available and emerging technologies, 
     including auto-reverse functions and child-safe window 
     switches, that are designed to prevent and reduce the number 
     of injuries and deaths to children left unattended inside 
     parked motor vehicles, including injuries and deaths that 
     result from hyperthermia or are related to power windows or 
     power sunroofs; and
       (2) currently available and emerging technologies that are 
     designed to improve the performance of safety belts with 
     respect to the safety of occupants aged between 4 and 8 years 
     old.
       (d) Completion of Rulemaking Regarding Power Windows.--Not 
     later than 180 days after the date of the enactment of this 
     Act, the Secretary of Transportation shall--
       (1) complete the rulemaking initiated by the National 
     Highway Traffic Safety Administration that is ongoing on the 
     date of the enactment of this Act and relates to a 
     requirement that window switches be designed to reduce the 
     accidental closing by children of power windows; and
       (2) issue performance-based regulations to take effect not 
     later than September 1, 2006, requiring that window switches 
     or related technologies be designed to prevent the accidental 
     closing by children of power windows.
       (e) Database on Injuries and Deaths in Nontraffic, Noncrash 
     Events.--
       (1) In general.--The Secretary of Transportation shall 
     establish a new database of, and

[[Page 10914]]

     collect data regarding, injuries and deaths in nontraffic, 
     noncrash events involving motor vehicles. The database shall 
     include information regarding--
       (A) the number, types, and proximate causes of injuries and 
     deaths resulting from such events;
       (B) the characteristics of motor vehicles involved in such 
     events;
       (C) the characteristics of the motor vehicle operators and 
     victims involved in such events; and
       (D) the presence or absence in motor vehicles involved in 
     such events of advanced technologies designed to prevent such 
     injuries and deaths.
       (2) Rulemaking.--The Secretary shall conduct a rulemaking 
     regarding how to structure and compile the database.
       (3) Availability.--The Secretary shall make the database 
     available to the public.

     SEC. 4174. SAFE INTERSECTIONS.

       (a) In General.--Chapter 2 of title 18, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 39. Traffic signal preemption transmitters

       ``(a) Offenses.--
       ``(1) Sale.--A person who provides for sale to unauthorized 
     users a traffic signal preemption transmitter in or affecting 
     interstate or foreign commerce shall be fined not more than 
     $10,000, imprisoned not more than 1 year, or both.
       ``(2) Possession.--A person who is an unauthorized user in 
     possession of a traffic signal preemption transmitter in or 
     affecting interstate or foreign commerce shall be fined not 
     more than $10,000, imprisoned not more than 6 months, or 
     both.
       ``(b) Definitions.--In this section, the following 
     definitions apply:
       ``(1) Traffic signal preemption transmitter.--The term 
     `traffic signal preemption transmitter' means any device or 
     mechanism that can change a traffic signal's phase.
       ``(2) Unauthorized user.--The term `unauthorized user' 
     means a user of a traffic signal preemption transmitter who 
     is not a government approved user.''.
       (b) Chapter Analysis.--The chapter analysis for chapter 2 
     of title 18, United States Code, is amended by adding at the 
     end the following:

``39. Traffic signal preemption transmitters.''.

     SEC. 4175. STUDY ON INCREASED SPEED LIMITS.

       (a) Study.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall conduct a study to 
     examine the effects of increased speed limits enacted by 
     States after 1995.
       (2) Requirements.--The study shall collect empirical data 
     regarding--
       (A) increases or decreases in driving speeds on Interstate 
     highways since 1995;
       (B) correlations between changes in driving speeds and 
     accident, injury, and fatality rates;
       (C) correlations between posted speed limits and observed 
     driving speeds;
       (D) the overall impact on motor vehicle safety resulting 
     from the repeal of the national maximum speed limit in 1995; 
     and
       (E) such other matters as the Secretary determines to be 
     appropriate.
       (b) Report.--Not later than 1 year after the date of 
     completion of the study under subsection (a), the Secretary 
     shall submit to Congress a report that describes the results 
     of the study.

   Subtitle B--Motor Carrier Safety and Unified Carrier Registration

                     PART I--ADMINISTRATIVE MATTERS

     SEC. 4201. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES 
                   CODE.

       (a) Short Title.--This subtitle may be cited as the ``Motor 
     Carrier Safety Reauthorization Act of 2004''.
       (b) Amendment of Title 49, United States Code.--Except as 
     otherwise specifically provided, whenever in this subtitle an 
     amendment is expressed in terms of an amendment to a section 
     or other provision of law, the reference shall be considered 
     to be made to a section or other provision of title 49, 
     United States Code.

     SEC. 4202. REQUIRED COMPLETION OF OVERDUE REPORTS, STUDIES, 
                   AND RULE-
                   MAKINGS.

       (a) Requirement for Completion.--By no later than 36 months 
     after the date of enactment of this Act, the Secretary of 
     Transportation shall complete all reports, studies, and 
     rulemaking proceedings to issue regulations which Congress 
     directed the Secretary to complete in previous laws and which 
     are not yet completed, including the following:
        (1) Commercial Vehicle Driver Biometric Identifier, 
     section 9105, Truck and Bus Safety and Regulatory Reform Act 
     of 1988.
        (2) General Transportation of HAZMAT, section 8(b), 
     Hazardous Materials Transportation Uniform Safety Act of 
     1990.
        (3) Nationally Uniform System of Permits for Interstate 
     Motor Carrier Transport of HAZMAT, section 22, Hazardous 
     Materials Transportation Uniform Safety Act of 1990.
        (4) Training for Entry-Level Drivers of Commercial Motor 
     Vehicles, section 4007 (a), Intermodal Surface Transportation 
     Efficiency Act of 1991.
        (5) Minimum Training Requirements for Operators and for 
     Training Instructors of Multiple Trailer Combination 
     Vehicles, section 4007(b)(2), Intermodal Surface 
     Transportation Efficiency Act of 1991.
        (6) Railroad-Highway Grade Crossing Safety, section 112, 
     Hazardous Materials Transportation Authorization Act of 1994.
        (7) Safety Performance History of New Drivers, section 
     114, Hazardous Materials Transportation Authorization Act of 
     1994.
        (8) Motor Carrier Replacement Information and Registration 
     System, section 103, ICC Termination Act of 1995.
        (9) General Jurisdiction Over Freight Forwarder Service, 
     section 13531, ICC Termination Act of 1995.
        (10) Waivers, Exemptions, and Pilot Programs, section 
     4007, Transportation Equity Act for the Twenty-First Century.
        (11) Safety Performance History of New Drivers, section 
     4014, Transportation Equity Act for the Twenty-First Century.
        (12) Performance-based CDL Testing, section 4019, 
     Transportation Equity Act for the Twenty-First Century.
        (13) Improved Flow of Driver History Pilot Program, 
     section 4022, Transportation Equity Act for the Twenty-First 
     Century.
        (14) Employee Protections, section 4023, Transportation 
     Equity Act for the Twenty-First Century.
        (15) Improved Interstate School Bus Safety, section 4024, 
     Transportation Equity Act for the Twenty-First Century.
        (16) Federal Motor Carrier Safety Administration 2010 
     Strategy, section 104, Motor Carrier Safety Improvement Act 
     of 1999.
        (17) New Motor Carrier Entrant Requirements, section 210, 
     Motor Carrier Safety Improvement Act of 1999.
        (18) Certified Motor Carrier Safety Auditors, section 211, 
     Motor Carrier Safety Improvement Act of 1999.
        (19) Medical Certificate, section 215, Motor Carrier 
     Safety Improvement Act of 1999.
        (20) Report on Any Pilots Undertaken to Develop Innovative 
     Methods of Improving Motor Carrier Compliance with Traffic 
     Laws, section 220, Motor Carrier Safety Improvement Act of 
     1999.
        (21) Status Report on the Implementation of Electronic 
     Transmission of Data State-to-State on Convictions for All 
     Motor Vehicle Control Law Violations for CDL Holders, section 
     221, Motor Carrier Safety Improvement Act of 1999.
        (22) Assessment of Civil Penalties, section 222, Motor 
     Carrier Safety Improvement Act of 1999.
        (23) Truck Crash Causation Study, section 224, Motor 
     Carrier Safety Improvement Act of 1999.
        (24) Drug Test Results Study, section 226, Motor Carrier 
     Safety Improvement Act of 1999.
       (b) Final Rule Required.--Unless specifically permitted by 
     law, rulemaking proceedings shall be considered completed for 
     purposes of this section only when the Secretary has issued a 
     final rule and the docket for the rulemaking proceeding is 
     closed.
       (c) Schedule for Completion.--No fewer than one-third of 
     the reports, studies, and rulemaking proceedings in 
     subsection (a) shall be completed every 12 months after the 
     date of enactment of this Act. The Inspector General of the 
     Department of Transportation shall make an annual 
     determination as to whether this schedule has been met.
       (d) Failure To Comply.--If the Secretary fails to complete 
     the required number of reports, studies, and rulemaking 
     proceedings according to the schedule set forth in subsection 
     (c) during any fiscal year, the Secretary shall allocate to 
     the States $3,000,000 from the amount authorized by section 
     31104(i)(1) of title 49, United States Code, for 
     administrative expenses of the Federal Motor Carrier Safety 
     Administration to conduct additional compliance reviews under 
     section 31102 of that title instead of obligating or 
     expending such amount for those administrative expenses.
       (e) Amendments to the Listed Reports, Studies, and 
     Rulemaking Proceedings.--In addition to completing the 
     reports, studies and rulemaking proceedings listed in 
     subsection (c), the Secretary shall--
       (1) amend the Interim Final Rule addressing New Motor 
     Carrier Entrant Requirements to require that a safety audit 
     be immediately converted to a compliance review and 
     appropriate enforcement actions be taken if the safety audit 
     discloses acute safety violations by the new entrant; and
       (2) eliminate a proposed provision in the rulemaking 
     proceeding addressing Commercial Van Operations Transporting 
     Nine to Fifteen Passengers which exempts commercial van 
     operations that operate within a 75-mile radius.
       (f) Completion of New Rulemaking Proceedings.--Nothing in 
     this section delays or changes the deadlines specified for 
     new reports, studies, or rulemaking mandates contained in 
     this title.
       (g) Report of Other Agency Actions.--Within 12 months after 
     the date of enactment of this Act, the Secretary shall submit 
     to the Senate Committee on Commerce, Science, and 
     Transportation and to the House Committee on Transportation 
     and Infrastructure a report on the status of the following 
     projects:
       (1) Rescinding the current regulation which prohibits truck 
     and bus drivers from viewing television and monitor screens 
     while operating commercial vehicles.
       (2) Incorporating Out-Of-Service Criteria regulations 
     enforced by the Federal Motor Carrier Safety Administration.
       (3) Revision of the safety fitness rating system of motor 
     carriers.
       (4) Amendment of Federal Motor Carrier Safety 
     Administration rules of practice for conducting motor carrier 
     administrative proceedings, investigations, 
     disqualifications, and for issuing penalties.
       (5) Requiring commercial drivers to have a sufficient 
     functional speaking and reading comprehension of the English 
     language.
       (6) Inspection, repair and maintenance of intermodal 
     container chassis and trailers.

[[Page 10915]]



     SEC. 4203. CONTRACT AUTHORITY.

       Authorizations from the Highway Trust Fund (other than the 
     Mass Transit Account) to carry out this subtitle shall be 
     available for obligation on the date of their apportionment 
     or allocation or on October 1 of the fiscal year for which 
     they are authorized, whichever occurs first. Approval by the 
     Secretary of a grant with funds made available under this 
     title imposes upon the United States Government a contractual 
     obligation for payment of the Government's share of costs 
     incurred in carrying out the objectives of the grant.

                     PART II--MOTOR CARRIER SAFETY

     SEC. 4221. MINIMUM GUARANTEE.

       There are authorized to be appropriated from the Highway 
     Trust Fund (other than the Mass Transit Account) not less 
     than 1.21 percent of the total amounts made available in any 
     fiscal year from the Highway Trust Fund for purposes of this 
     part.

     SEC. 4222. AUTHORIZATION OF APPROPRIATIONS.

       (a) Administrative Expenses.--Section 31104 is amended by 
     adding at the end the following:
       ``(i) Administrative expenses.--
       ``(1) There are authorized to be appropriated from the 
     Highway Trust Fund (other than the Mass Transit Account) for 
     the Secretary of Transportation to pay administrative 
     expenses of the Federal Motor Carrier Safety Administration--
       ``(A) $202,900,000 for fiscal year 2004;
       ``(B) $206,200,000 for fiscal year 2005;
       ``(C) $211,400,000 for fiscal year 2006;
       ``(D) $217,500,000 for fiscal year 2007;
       ``(E) $222,600,000 for fiscal year 2008; and
       ``(F) $228,500,000 for fiscal year 2009.
       ``(2) The funds authorized by this subsection shall be used 
     for personnel costs; administrative infrastructure; rent; 
     information technology; programs for research and technology, 
     information management, regulatory development (including a 
     medical review board and rules for medical examiners), 
     performance and registration information system management, 
     and outreach and education; other operating expenses and 
     similar matters; and such other expenses as may from time to 
     time become necessary to implement statutory mandates not 
     funded from other sources.
       ``(3) From the funds authorized by this section, the 
     Secretary shall ensure that compliance reviews are completed 
     on the motor carriers that have demonstrated through 
     performance data that they pose the highest safety risk. At a 
     minimum, compliance reviews shall be conducted within 6 
     months after whenever a carrier is rated as category A or B.
       ``(4) The amounts made available under this section shall 
     remain available until expended.
       ``(5) Of the funds authorized by paragraph (1), $6,750,000 
     in each of fiscal years 2004 through 2009 shall be used to 
     carry out the medical program under section 31149.''.
       (b) Amendment to Apportionment Provision of Title 23.--
     Section 104(a) of title 23, United States Code, is amended--
       (1) by striking ``exceed--'' and so much of subparagraph 
     (A) as precedes clause (i) and inserting ``exceed 1\1/6\ 
     percent of all sums so made available, as the Secretary 
     determines necessary--'';
       (2) by redesignating clause (i) and (ii) of subparagraph 
     (A) as subparagraphs (A) and (B), and indenting such clauses, 
     as so redesignated, 2 em spaces; and
       (3) by striking ``system; and'' in subparagraph (B) as so 
     redesignated, and all that follows through ``research.'' and 
     inserting ``system.''.
       (c) Grant Programs.--There are authorized to be 
     appropriated from the Highway Trust Fund (other than the Mass 
     Transit Account) for the following Federal Motor Carrier 
     Safety Administration programs:
       (1) Border enforcement grants under section 31107 of title 
     49, United States Code--
       (A) $32,000,000 for fiscal year 2004;
       (B) $33,000,000 for fiscal year 2005;
       (C) $33,000,000 for fiscal year 2006;
       (D) $34,000,000 for fiscal year 2007;
       (E) $35,000,000 for fiscal year 2008; and
       (F) $36,000,000 for fiscal year 2009.
       (2) Performance and registration information system 
     management grant program under 31109 of title 49, United 
     States Code--
       (A) $4,000,000 for fiscal year 2004;
       (B) $4,000,000 for fiscal year 2005;
       (C) $4,000,000 for fiscal year 2006;
       (D) $4,000,000 for fiscal year 2007;
       (E) $4,000,000 for fiscal year 2008; and
       (F) $4,000,000 for fiscal year 2009.
       (3) Commercial driver's license and driver improvement 
     program grants under section 31318 of title 49, United States 
     Code--
       (A) $22,000,000 for fiscal year 2004;
       (B) $22,000,000 for fiscal year 2005;
       (C) $23,000,000 for fiscal year 2006;
       (D) $23,000,000 for fiscal year 2007;
       (E) $24,000,000 for fiscal year 2008; and
       (F) $25,000,000 for fiscal year 2009.
       (4) Deployment of the Commercial Vehicle Informations 
     Systems and Networks established under section 4241 of this 
     title, $25,000,000 for each of fiscal years 2004 through 
     2009.
       (d) Motor Carrier Safety Account.--Funds made available 
     under subsection (c) shall be administered in the account 
     established in the Treasury entitled ``Motor Carrier Safety 
     69-8055-0-7-401''.
       (e) Period of Availability.--The amounts made available 
     under subsection (c) of this section shall remain available 
     until expended.

     SEC. 4223. MOTOR CARRIER SAFETY GRANTS.

       (a) Motor Carrier Safety Assistance Program.--
       (1) Section 31102 is amended--
       (A) by striking ``activities by fiscal year 2000;'' in 
     subsection (b)(1)(A) and inserting ``activities for 
     commercial motor vehicles of passengers and freight;'';
       (B) by striking ``years before December 18, 1991;'' in 
     subsection (b)(1)(E) and inserting ``years'';
       (C) by striking ``and'' after the semicolon in subsection 
     (b)(1)(S);
       (D) by striking ``personnel.'' in subsection (b)(1)(T) and 
     inserting ``personnel;'';
       (E) adding at the end of subsection (b)(1) the following:
       ``(U) ensures that inspections of motor carriers of 
     passengers are conducted at stations, terminals, border 
     crossings, or maintenance facilities, except in the case of 
     an imminent or obvious safety hazard;
       ``(V) provides that the State will include in the training 
     manual for the licensing examination to drive a non-
     commercial motor vehicle and a commercial motor vehicle, 
     information on best practices for driving safely in the 
     vicinity of commercial motor vehicles and in the vicinity of 
     non-commercial vehicles, respectively; and
       ``(W) provides that the State will enforce the registration 
     requirements of section 13902 by suspending the operation of 
     any vehicle discovered to be operating without registration 
     or beyond the scope of its registration.''; and
       (F) by striking subsection (c) and inserting the following:
       ``(c) Use of Grants To Enforce Other Laws.--A State may use 
     amounts received under a grant under subsection (a) of this 
     section for the following activities:
       ``(1) If the activities are carried out in conjunction with 
     an appropriate inspection of the commercial motor vehicle to 
     enforce Government or State commercial motor vehicle safety 
     regulations--
       ``(A) enforcement of commercial motor vehicle size and 
     weight limitations at locations other than fixed weight 
     facilities, at specific locations such as steep grades or 
     mountainous terrains where the weight of a commercial motor 
     vehicle can significantly affect the safe operation of the 
     vehicle, or at ports where intermodal shipping containers 
     enter and leave the United States; and
       ``(B) detection of the unlawful presence of a controlled 
     substance (as defined under section 102 of the Comprehensive 
     Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 
     802)) in a commercial motor vehicle or on the person of any 
     occupant (including the operator) of the vehicle.
       ``(2) Documented enforcement of State traffic laws and 
     regulations designed to promote the safe operation of 
     commercial motor vehicles, including documented enforcement 
     of such laws and regulations against non-commercial motor 
     vehicles when necessary to promote the safe operation of 
     commercial motor vehicles.''.
       (2) Section 31103(b) is amended--
       (A) by inserting ``(1)'' after ``activities.--''; and
       (B) by adding at the end the following:
       ``(2) New entrant motor carrier audit funds.--From the 
     amounts designated under section 31104(f)(4), the Secretary 
     may allocate new entrant motor carrier audit funds to States 
     and local governments without requiring a matching 
     contribution from such States or local governments.''.
       (3) Section 31104(a) is amended to read as follows:
       ``(a) In General.--There are authorized to be appropriated 
     from the Highway Trust Fund (other than the Mass Transit 
     Account) to carry out section 31102:
       ``(1) Not more than $186,100,000 for fiscal year 2004.
       ``(2) Not more than $189,800,000 for fiscal year 2005.
       ``(3) Not more than $193,600,000 for fiscal year 2006.
       ``(4) Not more than $197,500,000 for fiscal year 2007.
       ``(5) Not more than $201,400,000 for fiscal year 2008.
       ``(6) Not more than $205,500,000 for fiscal year 2009.''.
       (4) Section 31104(f) is amended by striking paragraph (2) 
     and inserting the following:
       ``(2) High-priority activities.--The Secretary may 
     designate up to 5 percent of amounts available for allocation 
     under paragraph (1) for States, local governments, and 
     organizations representing government agencies or officials 
     for carrying out high priority activities and projects that 
     improve commercial motor vehicle safety and compliance with 
     commercial motor vehicle safety regulations, including 
     activities and projects that are national in scope, increase 
     public awareness and education, or demonstrate new 
     technologies. The amounts designated under this paragraph 
     shall be allocated by the Secretary to State agencies, local 
     governments, and organizations representing government 
     agencies or officials that use and train qualified officers 
     and employees in coordination with State motor vehicle safety 
     agencies. At least 80 percent of the amounts designated under 
     this paragraph shall be awarded to State agencies and local 
     government agencies.
       ``(3) Safety-performance incentive programs.--The Secretary 
     may designate up to 10 percent of the amounts available for 
     allocation under paragraph (1) for safety performance 
     incentive programs for States. The Secretary shall establish 
     safety performance criteria to be used to distribute 
     incentive program funds. Such criteria shall include, at a 
     minimum, reduction in the number and rate of fatal accidents 
     involving commercial motor vehicles. Allocations under this 
     paragraph do not require a matching contribution from a 
     State.

[[Page 10916]]

       ``(4) New entrant audits.--The Secretary shall designate up 
     to $29,000,000 of the amounts available for allocation under 
     paragraph (1) for audits of new entrant motor carriers 
     conducted pursuant to 31144(f). The Secretary may withhold 
     such funds from a State or local government that is unable to 
     use government employees to conduct new entrant motor carrier 
     audits, and may instead utilize the funds to conduct audits 
     in those jurisdictions.''.
       (b) Grants to States for Border Enforcement.--Section 31107 
     is amended to read as follows:

     ``Sec. 31107. Border enforcement grants

       ``(a) General Authority.--From the funds authorized by 
     section 4222(c)(1) of the Motor Carrier Safety 
     Reauthorization Act of 2004, the Secretary may make a grant 
     in a fiscal year to a State that shares a border with another 
     country for carrying out border commercial motor vehicle 
     safety programs and related enforcement activities and 
     projects.
       ``(b) Maintenance of Expenditures.--The Secretary may make 
     a grant to a State under this section only if the State 
     agrees that the total expenditure of amounts of the State and 
     political subdivisions of the State, exclusive of United 
     States Government amounts, for carrying out border commercial 
     motor vehicle safety programs and related enforcement 
     activities and projects will be maintained at a level at 
     least equal to the average level of that expenditure by the 
     State and political subdivisions of the State for the last 2 
     State or Federal fiscal years before October 1, 2003.''.
       (c) Grants to States for Commercial Driver's License 
     Improvements.--Chapter 313 is amended by adding at the end 
     the following:

     ``Sec. 31318. Grants for commercial driver's license program 
       improvements

       ``(a) General Authority.--From the funds authorized by 
     section 4222(c)(3) of the Motor Carrier Safety 
     Reauthorization Act of 2004, the Secretary may make a grant 
     to a State, except as otherwise provided in subsection (e), 
     in a fiscal year to improve its implementation of the 
     commercial driver's license program, providing the State is 
     in substantial compliance with the requirements of section 
     31311 and this section. The Secretary shall establish 
     criteria for the distribution of grants and notify the States 
     annually of such criteria.
       ``(b) Conditions.--Except as otherwise provided in 
     subsection (e), a State may use a grant under this section 
     only for expenses directly related to its commercial driver's 
     license program, including, but not limited to, computer 
     hardware and software, publications, testing, personnel, 
     training, and quality control. The grant may not be used to 
     rent, lease, or buy land or buildings. The Secretary shall 
     give priority to grants that will be used to achieve 
     compliance with the requirements of the Motor Carrier Safety 
     Improvement Act of 1999. The Secretary may allocate the funds 
     appropriated for such grants in a fiscal year among the 
     eligible States whose applications for grants have been 
     approved, under criteria established by the Secretary.
       ``(c) Maintenance of Expenditures.--Except as otherwise 
     provided in subsection (e), the Secretary may make a grant to 
     a State under this section only if the State agrees that the 
     total expenditure of amounts of the State and political 
     subdivisions of the State, exclusive of United States 
     Government amounts, for the operation of the commercial 
     driver's license program will be maintained at a level at 
     least equal to the average level of that expenditure by the 
     State and political subdivisions of the State for the last 2 
     fiscal years before October 1, 2003.
       ``(d) Government Share.--Except as otherwise provided in 
     subsection (e), the Secretary shall reimburse a State, from a 
     grant made under this section, an amount that is not more 
     than 80 percent of the costs incurred by the State in a 
     fiscal year in implementing the commercial driver's license 
     improvements described in subsection (b). In determining 
     those costs, the Secretary shall include in-kind 
     contributions by the State.
       ``(e) High-Priority Activities.--
       ``(1) The Secretary may make a grant to a State agency, 
     local government, or organization representing government 
     agencies or officials for the full cost of research, 
     development, demonstration projects, public education, or 
     other special activities and projects relating to commercial 
     driver licensing and motor vehicle safety that are of benefit 
     to all jurisdictions or designed to address national safety 
     concerns and circumstances.
       ``(2) The Secretary may designate up to 10 percent of the 
     amounts made available under section 4222(c)(3) of the Motor 
     Carrier Safety Reauthorization Act of 2004 in a fiscal year 
     for high-priority activities under subsection (e)(1).
       ``(f) Emerging Issues.--The Secretary may designate up to 
     10 percent of the amounts made available under section 
     4222(c)(3) of the Motor Carrier Safety Reauthorization Act of 
     2004 in a fiscal year for allocation to a State agency, local 
     government, or other person at the discretion of the 
     Secretary to address emerging issues relating to commercial 
     driver's license improvements.
       ``(g) Apportionment.--Except as otherwise provided in 
     subsections (e) and (f), all amounts available in a fiscal 
     year to carry out this section shall be apportioned to States 
     according to a formula prescribed by the Secretary.
       ``(h) Deduction for Administrative Expenses.--On October 1 
     of each fiscal year or as soon after that date as 
     practicable, the Secretary may deduct, from amounts made 
     available under section 4222(c)(3) of the Motor Carrier 
     Safety Reauthorization Act of 2004 for that fiscal year, up 
     to 0.75 percent of those amounts for administrative expenses 
     incurred in carrying out this section in that fiscal year.''.
       (d) Noncompliance With CDL Requirements.--Section 31314 is 
     amended by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) First Fiscal Year.--The Secretary of Transportation 
     shall withhold up to 5 percent of the amount required to be 
     apportioned to a State under section 104(b)(1), (3), and (4) 
     of title 23 on the first day of the fiscal year after the 
     first fiscal year beginning after September 30, 1992, 
     throughout which the State does not comply substantially with 
     a requirement of section 31311(a) of this title.
       ``(b) Second Fiscal Year.--The Secretary shall withhold up 
     to 10 percent of the amount required to be apportioned to a 
     State under section 104(b)(1), (3), and (4) of title 23 on 
     the first day of each fiscal year after the second fiscal 
     year beginning after September 30, 1992, throughout which the 
     State does not comply substantially with a requirement of 
     section 31311(a) of this title.''.
       (e) Conforming Amendments.--(1) The chapter analysis for 
     chapter 311 is amended--
       (A) by striking the item relating to Subchapter I, and 
     inserting the following:

         ``SUBCHAPTER I--GENERAL AUTHORITY AND STATE GRANTS'';

       and
       (B) by striking the item relating to section 31107, and 
     inserting the following:

``31107. Border enforcement grants.''.

       (2) Subchapter I of chapter 311 is amended by striking the 
     subchapter heading and inserting the following:

          ``SUBCHAPTER I--GENERAL AUTHORITY AND STATE GRANTS''

       (3) The chapter analysis for chapter 313 is amended by 
     inserting the following after the item relating to section 
     31317:

``31318. Grants for commercial driver's license program 
              improvements.''.

     SEC. 4224. CDL WORKING GROUP.

       (a) In General.--The Secretary of Transportation shall 
     convene a working group to study and address current 
     impediments and foreseeable challenges to the commercial 
     driver's license program's effectiveness and measures needed 
     to realize the full safety potential of the commercial 
     driver's license program. The working group shall address 
     such issues as State enforcement practices, operational 
     procedures to detect and deter fraud, needed improvements for 
     seamless information sharing between States, effective 
     methods for accurately sharing electronic data between 
     States, updated technology, and timely notification from 
     judicial bodies concerning traffic and criminal convictions 
     of commercial driver's license holders.
       (b) Membership.--Members of the working group should 
     include State motor vehicle administrators, organizations 
     representing government agencies or officials, members of the 
     Judicial Conference, representatives of the trucking 
     industry, representatives of labor organizations, safety 
     advocates, and other significant stakeholders.
       (c) Report.--Within 2 years after the date of enactment of 
     this Act, the Secretary, on behalf of the working group, 
     shall complete a report of the working group's findings and 
     recommendations for legislative, regulatory, and enforcement 
     changes to improve the commercial driver's license program. 
     The Secretary shall promptly transmit the report to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure.
       (d) Funding.--From the funds authorized by section 
     4222(c)(3) of this title, $200,000 shall be made available 
     for each of fiscal years 2004 and 2005 to carry out this 
     section.

     SEC. 4225. CDL LEARNER'S PERMIT PROGRAM.

       (a) In General.--Chapter 313 is amended--
       (1) by striking ``time.'' in section 31302 and inserting 
     ``license, and may have only 1 learner's permit at any 
     time.'';
       (2) by inserting ``and learners' permits'' after 
     ``licenses'' the first place it appears in section 31308;
       (3) by striking ``licenses.'' in section 31308 and 
     inserting ``licenses and permits.'';
       (4) by redesignating paragraphs (2) and (3) of section 
     31308 as paragraphs (3) and (4), respectively, and inserting 
     after paragraph (1) the following:
       ``(2) before a commercial driver's license learner's permit 
     can be issued to an individual, the individual must pass a 
     written test on the operation of a commercial motor vehicle 
     that complies with the minimum standards prescribed by the 
     Secretary under section 31305(a) of this title;'';
       (5) by inserting ``or learner's permit'' after ``license'' 
     each place it appears in paragraphs (3) and (4), as 
     redesignated, of section 31308; and
       (6) by inserting ``or learner's permit'' after ``license'' 
     each place it appears in section 31309(b).
       (b) Conforming Amendments.--
       (1) Section 31302 is amended by inserting ``and learner's 
     permits'' in the section caption.
       (2) Sections 31308 and 31309 are each amended by inserting 
     ``and learner's permit'' after ``license'' in the section 
     captions.
       (3) The chapter analysis for chapter 313 is amended by 
     striking the item relating to section 31302 and inserting the 
     following:

``31302. Limitation on the number of driver's licenses and learner's 
              permits.''.

       (4) The chapter analysis for chapter 313 is amended by 
     striking the items relating to sections 31308 and 31309 and 
     inserting the following:


[[Page 10917]]


``31308. Commercial driver's license and learner's permit.
``31309. Commercial driver's license and learner's permit information 
              system.''.

     SEC. 4226. HOBBS ACT.

       (a) Section 2342(3)(A) of title 28, United States Code, is 
     amended to read as follows:
       ``(A) the Secretary of Transportation issued pursuant to 
     section 2, 9, 37, or 41 of the Shipping Act, 1916 (46 U.S.C. 
     App. 802, 803, 808, 835, 839, and 841a) or pursuant to Part B 
     or C of subtitle IV of title 49 or pursuant to subchapter III 
     of chapter 311, chapter 313, and chapter 315 of Part B of 
     subtitle VI of title 49; and''.
       (b) Section 351(a) is amended to read as follows:
       ``(a) Judicial Review.--An action of the Secretary of 
     Transportation in carrying out a duty or power transferred 
     under the Department of Transportation Act (Public Law 89-
     670; 80 Stat. 931), or an action of the Administrator of the 
     Federal Railroad Administration, Federal Motor Carrier Safety 
     Administration, or the Federal Aviation Administration in 
     carrying out a duty or power specifically assigned to the 
     Administrator by that Act, may be reviewed judicially to the 
     same extent and in the same way as if the action had been an 
     action by the department, agency, or instrumentality of the 
     United States Government carrying out the duty or power 
     immediately before the transfer or assignment.''.
       (c) Section 352 is amended to read as follows:

     ``Sec. 352. Authority to carry out certain transferred duties 
       and powers

       ``In carrying out a duty or power transferred under the 
     Department of Transportation Act (Public Law 89-670; 80 Stat. 
     931), the Secretary of Transportation and the Administrators 
     of the Federal Railroad Administration, the Federal Motor 
     Carrier Safety Administration, and the Federal Aviation 
     Administration have the same authority that was vested in the 
     department, agency, or instrumentality of the United States 
     Government carrying out the duty or power immediately before 
     the transfer. An action of the Secretary or Administrator in 
     carrying out the duty or power has the same effect as when 
     carried out by the department, agency, or instrumentality.''.

     SEC. 4227. PENALTY FOR DENIAL OF ACCESS TO RECORDS.

       Section 521(b)(2) is amended by adding at the end the 
     following:
       ``(E) Copying of records and access to equipment, lands, 
     and buildings.--A motor carrier subject to chapter 51 of 
     subtitle III, a motor carrier, broker, or freight forwarder 
     subject to part B of subtitle IV, or the owner or operator of 
     a commercial motor vehicle subject to part B of subtitle VI 
     of this title who fails to allow the Secretary, or an 
     employee designated by the Secretary, promptly upon demand to 
     inspect and copy any record or inspect and examine equipment, 
     lands, buildings and other property in accordance with 
     sections 504(c), 5121(c), and 14122(b) of this title shall be 
     liable to the United States for a civil penalty not to exceed 
     $500 for each offense, and each day the Secretary is denied 
     the right to inspect and copy any record or inspect and 
     examine equipment, lands, buildings and other property shall 
     constitute a separate offense, except that the total of all 
     civil penalties against any violator for all offenses related 
     to a single violation shall not exceed $5,000. It shall be a 
     defense to such penalty that the records did not exist at the 
     time of the Secretary's request or could not be timely 
     produced without unreasonable expense or effort. Nothing 
     herein amends or supersedes any remedy available to the 
     Secretary under sections 502(d), 507(c), or other provision 
     of this title.''.

     SEC. 4228. MEDICAL PROGRAM.

       (a) In General.--Subchapter III of chapter 311 is amended 
     by adding at the end the following:

     ``Sec. 31149. Medical program

       ``(a) Medical Review Board.--
       ``(1) Establishment and function.--The Secretary of 
     Transportation shall establish a Medical Review Board to 
     serve as an advisory committee to provide the Federal Motor 
     Carrier Safety Administration with medical advice and 
     recommendations on driver qualification medical standards and 
     guidelines, medical examiner education, and medical research.
       ``(2) Composition.--The Medical Review Board shall be 
     appointed by the Secretary and shall consist of 5 members 
     selected from medical institutions and private practice. The 
     membership shall reflect expertise in a variety of 
     specialties relevant to the functions of the Federal Motor 
     Carrier Safety Administration.
       ``(b) Chief Medical Examiner.--The Secretary shall appoint 
     a chief medical examiner for the Federal Motor Carrier Safety 
     Administration.
       ``(c) Medical Standards and Requirements.--The Secretary, 
     with the advice of the Medical Review Board and the chief 
     medical examiner, shall--
       ``(1) establish, review, and revise--
       ``(A) medical standards for applicants for and holders of 
     commercial driver's licenses that will ensure that the 
     physical condition of operators of commercial motor vehicles 
     is adequate to enable them to operate the vehicles safely;
       ``(B) requirements for periodic physical examinations of 
     such operators performed by medical examiners who have 
     received training in physical and medical examination 
     standards and are listed on a national registry maintained by 
     the Department of Transportation; and
       ``(C) requirements for notification of the chief medical 
     examiner if such an applicant or holder--
       ``(i) fails to meet the applicable standards; or
       ``(ii) is found to have a physical or mental disability or 
     impairment that would interfere with the individual's ability 
     to operate a commercial motor vehicle safely;
       ``(2) require each holder of a commercial driver's license 
     or learner's permit to have a current valid medical 
     certificate;
       ``(3) issue such certificates to such holders and 
     applicants who are found, upon examination, to be physically 
     qualified to operate a commercial motor vehicle and to meet 
     applicable medical standards; and
       ``(4) develop, as appropriate, specific courses and 
     materials for medical examiners listed in the national 
     registry established under this section, and require those 
     medical examiners to complete specific training, including 
     refresher courses, to be listed in the registry.
       ``(d) National Registry of Medical Examiners.--The 
     Secretary, through the Federal Motor Carrier Safety 
     Administration--
       ``(1) shall establish and maintain a current national 
     registry of medical examiners who are qualified to perform 
     examination, testing, inspection, and issuance of a medical 
     certificate;
       ``(2) shall delegate to those examiners the authority to 
     issue such certificates if the Medical Review Board develops 
     a system to identify the medical examination forms uniquely 
     and track them; and
       ``(3) shall remove from the registry the name of any 
     medical examiner that fails to meet the qualifications 
     established by the Secretary for being listed in the 
     registry.
       ``(e) Consultation and Cooperation with FAA.--
       ``(1) In general.--The Administrator of the Federal Motor 
     Carrier Safety Administration shall consult the Administrator 
     of the Federal Aviation Administration with respect to 
     examinations, the issuance of certificates, standards, and 
     procedures under this section in order to take advantage of 
     such aspects of the Federal Aviation Administration's airman 
     certificate program under chapter 447 of this title as the 
     Administrator deems appropriate for carrying out this 
     section.
       ``(2) Use of FAA-qualified examiners.--The Administrator of 
     the Federal Motor Carrier Safety Administration and the 
     Administrator of the Federal Aviation Administration are 
     authorized and encouraged to execute a memorandum of 
     understanding under which individuals holding or applying for 
     a commercial driver's license or learner's permit may be 
     examined, for purposes of this section, by medical examiners 
     who are qualified to administer medical examinations for 
     airman certificates under chapter 447 of this title and the 
     regulations thereunder--
       ``(A) until the national registry required by subsection 
     (d) is fully established; and
       ``(B) to the extent that the Administrators determine 
     appropriate, after that registry is established.
       ``(f) Regulations.--The Secretary is authorized to 
     promulgate such regulations as may be necessary to carry out 
     this section.''.
       (b) Medical Examiners.--Section 31136(a)(3) is amended to 
     read as follows:
       ``(3) the physical condition of operators of commercial 
     motor vehicles is adequate to enable them to operate the 
     vehicles safely, and the periodic physical examinations 
     required of such operators are performed by medical examiners 
     who have received training in physical and medical 
     examination standards and are listed on a national registry 
     maintained by the Department of Transportation; and''.
       (c) Definition of Medical Examiner.--Section 31132 is 
     amended--
       (1) by redesignating paragraphs (6) through (10) as 
     paragraphs (7) through (11), respectively; and
       (2) by inserting after paragraph (5) the following:
       ``(6) `medical examiner' means an individual licensed, 
     certified, or registered in accordance with regulations 
     issued by the Federal Motor Carrier Safety Administration as 
     a medical examiner.''.
       (d) Conforming Amendment.--The chapter analysis for chapter 
     311 is amended by inserting after the item relating to 
     section 31148 the following:

``31149. Medical program.''.

       (e) Effective Date.--The amendment made by subsection (a) 
     shall take effect 1 year after the date of enactment of this 
     Act.

     SEC. 4229. OPERATION OF COMMERCIAL MOTOR VEHICLES BY 
                   INDIVIDUALS WHO USE INSULIN TO TREAT DIABETES 
                   MELLITUS.

       (a) Revision of Final Rule.--Not later than 90 days after 
     the date of the enactment of this Act, the Secretary shall 
     revise the final rule to allow individuals who use insulin to 
     treat their diabetes to operate commercial motor vehicles in 
     interstate commerce. The revised final rule shall provide for 
     the individual assessment of applicants who use insulin to 
     treat their diabetes and who are, except for their use of 
     insulin, otherwise qualified under the Federal Motor Carrier 
     Safety Regulations. The revised final rule shall be 
     consistent with the criteria described in section 4018 of the 
     Transportation Equity Act for the 21st Century (49 U.S.C. 
     31305 note) and shall conclude the rulemaking process in the 
     Federal Motor Carrier Safety Administration docket relating 
     to qualifications of drivers with diabetes.
       (b) No History of Driving While Using Insulin Required for 
     Qualification.--The Secretary may not require individuals to 
     have experience operating commercial motor vehicles while 
     using insulin in order to qualify to operate a commercial 
     motor vehicle in interstate commerce.
       (c) History of Diabetes Control.--The Secretary may require 
     an individual to have used

[[Page 10918]]

     insulin for a minimum period of time and demonstrated stable 
     control of diabetes in order to qualify to operate a 
     commercial motor vehicle in interstate commerce. Any such 
     requirement, including any requirement with respect to the 
     duration of such insulin use, shall be consistent with the 
     findings of the expert medical panel reported in July 2000 in 
     ``A Report to Congress on the Feasibility of a Program to 
     Qualify Individuals with Insulin-Treated Diabetes Mellitus to 
     Operate Commercial Motor Vehicles in Interstate Commerce as 
     Directed by the Transportation Equity Act for the 21st 
     Century''.
       (d) Applicable Standard.--The Secretary shall ensure that 
     individuals who use insulin to treat their diabetes are not 
     held to a higher standard than other qualified commercial 
     drivers, except to the extent that limited operating, 
     monitoring, or medical requirements are deemed medically 
     necessary by experts in the field of diabetes medicine.

     SEC. 4230. FINANCIAL RESPONSIBILITY FOR PRIVATE MOTOR 
                   CARRIERS.

       (a) Transportation of Passengers.--
       (1) Section 31138(a) is amended to read as follows:
       ``(a) General Requirement.--The Secretary of Transportation 
     shall prescribe regulations to require minimum levels of 
     financial responsibility sufficient to satisfy liability 
     amounts established by the Secretary covering public 
     liability and property damage for the transportation of 
     passengers by motor vehicle in the United States between a 
     place in a State and--
       ``(1) a place in another State;
       ``(2) another place in the same State through a place 
     outside of that State; or
       ``(3) a place outside the United States.''.
       (2) Section 31138(c) is amended by adding at the end the 
     following:
       ``(4) The Secretary may require a person, other than a 
     motor carrier as defined in section 13102(12) of this title, 
     transporting passengers by motor vehicle to file with the 
     Secretary the evidence of financial responsibility specified 
     in subsection (c)(1) of this section in an amount not less 
     than that required by this section, and the laws of the State 
     or States in which the person is operating, to the extent 
     applicable. The extent of the financial responsibility must 
     be sufficient to pay, not more than the amount of the 
     financial responsibility, for each final judgment against the 
     person for bodily injury to, or death of, an individual 
     resulting from the negligent operation, maintenance, or use 
     of motor vehicles, or for loss or damage to property, or 
     both.''.
       (b) Transportation of Property.--Section 31139 is amended--
       (1) by striking so much of subsection (b) as precedes 
     paragraph (2) and inserting the following:
       ``(b) General Requirements and Minimum Amount.--
       ``(1) The Secretary of Transportation shall prescribe 
     regulations to require minimum levels of financial 
     responsibility sufficient to satisfy liability amounts 
     established by the Secretary covering public liability, 
     property damage, and environmental restoration for the 
     transportation of property by motor vehicle in the United 
     States between a place in a State and--
       ``(A) a place in another State;
       ``(B) another place in the same State through a place 
     outside of that State; or
       ``(C) a place outside the United States.'';
       (2) by aligning the left margin of paragraph (2) of 
     subsection (b) with the left margin of paragraph (1) of that 
     subsection (as amended by paragraph (1) of this subsection); 
     and
       (3) by redesignating subsection (c) through (g) as 
     subsections (d) through (h), respectively, and inserting 
     after subsection (b) the following:
       ``(c) Filing of Evidence of Financial Responsibility.--The 
     Secretary may require a motor private carrier, as defined in 
     section 13102 of this title, to file with the Secretary the 
     evidence of financial responsibility specified in subsection 
     (b) of this section in an amount not less than that required 
     by this section, and the laws of the State or States in which 
     the motor private carrier is operating, to the extent 
     applicable. The amount of the financial responsibility must 
     be sufficient to pay, not more than the amount of the 
     financial responsibility, for each final judgment against the 
     motor private carrier for bodily injury to, or death of, an 
     individual resulting from negligent operation, maintenance, 
     or use of motor vehicles, or for loss or damage to property, 
     or both.''.

     SEC. 4231. INCREASED PENALTIES FOR OUT-OF-SERVICE VIOLATIONS 
                   AND FALSE RECORDS.

       (a) Section 521(b)(2)(B) is amended to read as follows:
       ``(B) Recordkeeping and reporting violations.--A person 
     required to make a report to the Secretary, answer a 
     question, or make, prepare, or preserve a record under 
     section 504 of this title or under any regulation issued by 
     the Secretary pursuant to subchapter III of chapter 311 
     (except sections 31138 and 31139) or section 31502 of this 
     title about transportation by motor carrier, motor carrier of 
     migrant workers, or motor private carrier, or an officer, 
     agent, or employee of that person--
       ``(i) who does not make that report, does not specifically, 
     completely, and truthfully answer that question in 30 days 
     from the date the Secretary requires the question to be 
     answered, or does not make, prepare, or preserve that record 
     in the form and manner prescribed by the Secretary, shall be 
     liable to the United States for a civil penalty in an amount 
     not to exceed $1,000 for each offense, and each day of the 
     violation shall constitute a separate offense, except that 
     the total of all civil penalties assessed against any 
     violator for all offenses related to any single violation 
     shall not exceed $10,000; or
       ``(ii) who knowingly falsifies, destroys, mutilates, or 
     changes a required report or record, knowingly files a false 
     report with the Secretary, knowingly makes or causes or 
     permits to be made a false or incomplete entry in that record 
     about an operation or business fact or transaction, or 
     knowingly makes, prepares, or preserves a record in violation 
     of a regulation or order of the Secretary, shall be liable to 
     the United States for a civil penalty in an amount not to 
     exceed $10,000 for each violation, if any such action can be 
     shown to have misrepresented a fact that constitutes a 
     violation other than a reporting or recordkeeping 
     violation.''.
       (b) Section 31310(i)(2) is amended to read as follows:
       ``(2) The Secretary shall prescribe regulations 
     establishing sanctions and penalties related to violations of 
     out-of-service orders by individuals operating commercial 
     motor vehicles. The regulations shall require at least that--
       ``(A) an operator of a commercial motor vehicle found to 
     have committed a first violation of an out-of-service order 
     shall be disqualified from operating such a vehicle for at 
     least 180 days and liable for a civil penalty of at least 
     $2,500;
       ``(B) an operator of a commercial motor vehicle found to 
     have committed a second violation of an out-of-service order 
     shall be disqualified from operating such a vehicle for at 
     least 2 years and not more than 5 years and liable for a 
     civil penalty of at least $5,000;
       ``(C) an employer that knowingly allows or requires an 
     employee to operate a commercial motor vehicle in violation 
     of an out-of-service order shall be liable for a civil 
     penalty of not more than $25,000; and
       ``(D) an employer that knowingly and willfully allows or 
     requires an employee to operate a commercial motor vehicle in 
     violation of an out-of-service order shall, upon conviction, 
     be subject for each offense to imprisonment for a term not to 
     exceed 1 year or a fine under title 18, United States Code, 
     or both.''.

     SEC. 4232. ELIMINATION OF COMMODITY AND SERVICE EXEMPTIONS.

       (a) Section 13506(a) is amended--
       (1) by striking paragraphs (6), (11), (12), (13), and (15);
       (2) by redesignating paragraphs (7), (8), (9), (10), and 
     (14) as paragraphs (6), (7), (8), (9) and (10), respectively;
       (3) by inserting ``or'' after the semicolon in paragraph 
     (9), as redesignated; and
       (4) striking ``13904(d); or'' in paragraph (1), as 
     redesignated, and inserting ``14904(d).''.
       (b) Section 13507 is amended by striking ``(6), (8), (11), 
     (12), or (13)'' and inserting ``(6)''.

     SEC. 4233. INTRASTATE OPERATIONS OF INTERSTATE MOTOR 
                   CARRIERS.

       (a) Subsection (a) of section 31144 is amended to read as 
     follows:
       ``(a) In General.--The Secretary shall--
       ``(1) determine whether an owner or operator is fit to 
     operate safely commercial motor vehicles, utilizing among 
     other things the accident record of an owner or operator 
     operating in interstate commerce and the accident record and 
     safety inspection record of such owner or operator in 
     operations that affect interstate commerce;
       ``(2) periodically update such safety fitness 
     determinations;
       ``(3) make such final safety fitness determinations readily 
     available to the public; and
       ``(4) prescribe by regulation penalties for violations of 
     this section consistent with section 521.''.
       (b) Subsection (c) of section 31144 is amended by adding at 
     the end the following:
       ``(5) Transportation affecting interstate commerce.--Owners 
     or operators of commercial motor vehicles prohibited from 
     operating in interstate commerce pursuant to paragraphs (1) 
     through (3) of this section may not operate any commercial 
     motor vehicle that affects interstate commerce until the 
     Secretary determines that such owner or operator is fit.''.
       (c) Section 31144 is amended by redesignating subsections 
     (d), (e), and the second subsection (c) as subsections (e), 
     (f), and (g), respectively, and inserting after subsection 
     (c) the following:
       ``(d) Determination of Unfitness by a State.--If a State 
     that receives Motor Carrier Safety Assistance Program funds 
     pursuant to section 31102 of this title determines, by 
     applying the standards prescribed by the Secretary under 
     subsection (b) of this section, that an owner or operator of 
     commercial motor vehicles that has its principal place of 
     business in that State and operates in intrastate commerce is 
     unfit under such standards and prohibits the owner or 
     operator from operating such vehicles in the State, the 
     Secretary shall prohibit the owner or operator from operating 
     such vehicles in interstate commerce until the State 
     determines that the owner or operator is fit.''.

     SEC. 4234. AUTHORITY TO STOP COMMERCIAL MOTOR VEHICLES.

       (a) In General.--Chapter 2 of title 18, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 38. Commercial motor vehicles required to stop for 
       inspections

       ``(a) A driver of a commercial motor vehicle, as defined in 
     section 31132(1) of title 49, shall stop and submit to 
     inspection of the vehicle, driver, cargo, and required 
     records when directed to do so by an authorized employee of 
     the Federal Motor Carrier Safety Administration, Department 
     of Transportation, at or in the vicinity of an inspection 
     site. The driver shall not leave the inspection site until 
     authorized to do so by an authorized employee.

[[Page 10919]]

       ``(b) A driver of a commercial motor vehicle, as defined in 
     subsection (a), who knowingly fails to stop for inspection 
     when directed to do so by an authorized employee of the 
     Federal Motor Carrier Safety Administration at or in the 
     vicinity of an inspection site, or leaves the inspection site 
     without authorization, shall be fined under this title or 
     imprisoned not more than 1 year, or both.''.
       (b) Authority of FMCSA.--Chapter 203 of title 18, United 
     States Code, is amended by adding at the end the following:

     ``Sec. 3064. Powers of Federal Motor Carrier Safety 
       Administration

       ``Authorized employees of the Federal Motor Carrier Safety 
     Administration may direct a driver of a commercial motor 
     vehicle, as defined in 49 U.S.C. 31132(1), to stop for 
     inspection of the vehicle, driver, cargo, and required 
     records at or in the vicinity of an inspection site.''.
       (c) Conforming Amendments.--
       (1) The chapter analysis for chapter 2 of title 18, United 
     States Code, is amended by inserting after the item relating 
     to section 37 the following:

``38. Commercial motor vehicles required to stop for inspections.''.

       (2) The chapter analysis for chapter 203 of title 18, 
     United States Code, is amended by inserting after the item 
     relating to section 3063 the following:

``3064. Powers of Federal Motor Carrier Safety Administration.''.

     SEC. 4235. REVOCATION OF OPERATING AUTHORITY.

       Section 13905(e) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Protection of safety.--Notwithstanding subchapter II 
     of chapter 5 of title 5, the Secretary--
       ``(A) may suspend the registration of a motor carrier, a 
     freight forwarder, or a broker for failure to comply with 
     requirements of the Secretary pursuant to section 13904(c) or 
     13906 of this title, or an order or regulation of the 
     Secretary prescribed under those sections; and
       ``(B) shall revoke the registration of a motor carrier that 
     has been prohibited from operating in interstate commerce for 
     failure to comply with the safety fitness requirements of 
     section 31144 of this title.'';
       (2) by striking ``may suspend a registration''in paragraph 
     (2) and inserting ``shall revoke the registration''; and
       (3) by striking paragraph (3) and inserting the following:
       ``(3) Notice; period of suspension.--The Secretary may 
     suspend or revoke under this subsection the registration only 
     after giving notice of the suspension or revocation to the 
     registrant. A suspension remains in effect until the 
     registrant complies with the applicable sections or, in the 
     case of a suspension under paragraph (2), until the Secretary 
     revokes the suspension.''.

     SEC. 4236. PATTERN OF SAFETY VIOLATIONS BY MOTOR CARRIER 
                   MANAGEMENT.

       (a) In General.--Section 31135 is amended--
       (1) by inserting ``(a) In General.--'' before ``Each''; and
       (2) by adding at the end the following:
       ``(b) Pattern of Non-Compliance.--If an officer of a motor 
     carrier engages in a pattern or practice of avoiding 
     compliance, or masking or otherwise concealing non-
     compliance, with regulations on commercial motor vehicle 
     safety prescribed under this subchapter, the Secretary may 
     suspend, amend, or revoke any part of the motor carrier's 
     registration under section 13905 of this title.
       ``(c) List of Proposed Officers.--Each person seeking 
     registration as a motor carrier under section 13902 of this 
     title shall submit a list of the proposed officers of the 
     motor carrier. If the Secretary determines that any of the 
     proposed officers has previously engaged in a pattern or 
     practice of avoiding compliance, or masking or otherwise 
     concealing non-compliance, with regulations on commercial 
     motor vehicle safety prescribed under this chapter, the 
     Secretary may deny the person's application for registration 
     as a motor carrier under section 13902(a)(3).
       ``(d) Regulations.--The Secretary shall by regulation 
     establish standards to implement subsections (b) and (c).
       ``(e) Definitions.--In this section:
       ``(1) Motor carrier.--The term motor carrier has the 
     meaning given the term in section 13102(12) of this title; 
     and
       ``(2) Officer.--The term officer means an owner, chief 
     executive officer, chief operating officer, chief financial 
     officer, safety director, vehicle maintenance supervisor and 
     driver supervisor of a motor carrier, regardless of the title 
     attached to those functions.''.
       (b) Registration of Carriers.--Section 13902(a)(1)(B) is 
     amended to read as follows:
       ``(B) any safety regulations imposed by the Secretary, the 
     duties of employers and employees established by the 
     Secretary under section 31135, and the safety fitness 
     requirements established by the Secretary under section 
     31144; and''.

     SEC. 4237. MOTOR CARRIER RESEARCH AND TECHNOLOGY PROGRAM.

       (a) In General.--Section 31108 is amended to read as 
     follows:

     ``Sec. 31108. Motor carrier research and technology program

       ``(a) Research, Technology, and Technology Transfer 
     Activities.--
       ``(1) The Secretary of Transportation shall establish and 
     carry out a motor carrier and motor coach research and 
     technology program. The Secretary may carry out research, 
     development, technology, and technology transfer activities 
     with respect to--
       ``(A) the causes of accidents, injuries and fatalities 
     involving commercial motor vehicles; and
       ``(B) means of reducing the number and severity of 
     accidents, injuries and fatalities involving commercial motor 
     vehicles.
       ``(2) The Secretary may test, develop, or assist in testing 
     and developing any material, invention, patented article, or 
     process related to the research and technology program.
       ``(3) The Secretary may use the funds appropriated to carry 
     out this section for training or education of commercial 
     motor vehicle safety personnel, including, but not limited 
     to, training in accident reconstruction and detection of 
     controlled substances or other contraband, and stolen cargo 
     or vehicles.
       ``(4) The Secretary may carry out this section--
       ``(A) independently;
       ``(B) in cooperation with other Federal departments, 
     agencies, and instrumentalities and Federal laboratories; or
       ``(C) by making grants to, or entering into contracts, 
     cooperative agreements, and other transactions with, any 
     Federal laboratory, State agency, authority, association, 
     institution, for-profit or non-profit corporation, 
     organization, foreign country, or person.
       ``(5) The Secretary shall use funds made available to carry 
     out this section to develop, administer, communicate, and 
     promote the use of products of research, technology, and 
     technology transfer programs under this section.
       ``(b) Collaborative Research and Development.--
       ``(1) To advance innovative solutions to problems involving 
     commercial motor vehicle and motor carrier safety, security, 
     and efficiency, and to stimulate the deployment of emerging 
     technology, the Secretary may carry out, on a cost-shared 
     basis, collaborative research and development with--
       ``(A) non-Federal entities, including State and local 
     governments, foreign governments, colleges and universities, 
     corporations, institutions, partnerships, and sole 
     proprietorships that are incorporated or established under 
     the laws of any State; and
       ``(B) Federal laboratories.
       ``(2) In carrying out this subsection, the Secretary may 
     enter into cooperative research and development agreements 
     (as defined in section 12 of the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3710a)).
       ``(3)(A) The Federal share of the cost of activities 
     carried out under a cooperative research and development 
     agreement entered into under this subsection shall not exceed 
     50 percent, except that if there is substantial public 
     interest or benefit, the Secretary may approve a greater 
     Federal share.
       ``(B) All costs directly incurred by the non-Federal 
     partners, including personnel, travel, and hardware or 
     software development costs, shall be credited toward the non-
     Federal share of the cost of the activities described in 
     subparagraph (A).
       ``(4) The research, development, or use of a technology 
     under a cooperative research and development agreement 
     entered into under this subsection, including the terms under 
     which the technology may be licensed and the resulting 
     royalties may be distributed, shall be subject to the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3701 et seq.).
       ``(5) Section 5 of title 41, United States Code, shall not 
     apply to a contract or agreement entered into under this 
     section.
       ``(c) Availability of Amounts.--The amounts made available 
     under section 4222(a) of the Motor Carrier Safety 
     Reauthorization Act of 2004 to carry out this section shall 
     remain available until expended.
       ``(d) Contract Authority.--Approval by the Secretary of a 
     grant with funds made available under section 4222(a) of the 
     Motor Carrier Safety Reauthorization Act of 2004 to carry out 
     this section imposes upon the United States Government a 
     contractual obligation for payment of the Government's share 
     of costs incurred in carrying out the objectives of the 
     grant.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     311 is amended by striking the item relating to section 
     31108, and inserting the following:

``31108. Motor carrier research and technology program.''.

     SEC. 4238. REVIEW OF COMMERCIAL ZONE EXEMPTION PROVISION.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     complete a review of part 372 of title 49, Code of Federal 
     Regulations, as it pertains to commercial zone exemptions 
     (excluding border commercial zones) from Department of 
     Transportation and Surface Transportation Board regulations 
     governing interstate commerce. The Secretary shall determine 
     whether such exemptions should continue to apply as written, 
     should undergo revision, or should be revoked. The Secretary 
     shall submit to the Senate Committee on Commerce, Science, 
     and Transportation and the House of Representatives Committee 
     on Transportation and Infrastructure a report of the review 
     not later than 14 months after such date of enactment.
       (b) Notice.--The Secretary shall publish notice of the 
     review required by subsection (a) and provide and opportunity 
     for the public to submit comments on the effect of 
     continuing, revising, or revoking the commercial zone 
     exemptions in part 372 of title 49, Code of Federal 
     Regulations.

     SEC. 4239. INTERNATIONAL COOPERATION.

       (a) In General.--Chapter 311 is amended by inserting at the 
     end the following:

[[Page 10920]]



                     ``Subchapter IV--Miscellaneous

     ``Sec. 31161. International cooperation

       ``The Secretary is authorized to use funds appropriated 
     under section 31104(i) of this title to participate and 
     cooperate in international activities to enhance motor 
     carrier, commercial motor vehicle, driver, and highway safety 
     by such means as exchanging information, conducting research, 
     and examining needs, best practices, and new technology.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     311 is amended by adding at the end the following:

                     ``SUBCHAPTER IV--MISCELLANEOUS

``31161. International cooperation.''.

     SEC. 4240. PERFORMANCE AND REGISTRATION INFORMATION SYSTEM 
                   MANAGEMENT.

       (a) In General.--Section 31106(b) is amended--
       (1) by striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) Design.--The program shall link Federal motor carrier 
     safety information systems with State commercial vehicle 
     registration and licensing systems and shall be designed to 
     enable a State to--
       ``(A) determine the safety fitness of a motor carrier or 
     registrant when licensing or registering the registrant or 
     motor carrier or while the license or registration is in 
     effect; and
       ``(B) deny, suspend, or revoke the commercial motor vehicle 
     registrations of a motor carrier or registrant that has been 
     issued an operations out-of-service order by the Secretary.
       ``(3) Conditions for participation.--The Secretary shall 
     require States, as a condition of participation in the 
     program, to--
       ``(A) comply with the uniform policies, procedures, and 
     technical and operational standards prescribed by the 
     Secretary under subsection (a)(4);
       ``(B) possess the authority to impose sanctions relating to 
     commercial motor vehicle registration on the basis of a 
     Federal safety fitness determination; and
       ``(C) cancel the motor vehicle registration and seize the 
     registration plates of an employer found liable under section 
     31310(i)(2)(C) of this title for knowingly allowing or 
     requiring an employee to operate a commercial motor vehicle 
     in violation of an out-of-service order.''; and
       (2) by striking paragraph (4).
       (b) Performance and Registration Information System 
     Management Grants.--
       (1) Subchapter I of chapter 311, as amended by this title, 
     is further amended by adding at the end the following:

     ``Sec. 31109. Performance and Registration Information System 
       Management

       ``(a) In General.--From the funds authorized by section 
     4222(c)(2) of the Motor Carrier Safety Reauthorization Act of 
     2004, the Secretary may make a grant in a fiscal year to a 
     State to implement the performance and registration 
     information system management requirements of section 
     31106(b).
       ``(b) Availability of Amounts.--Amounts made available to a 
     State under section 4222(c)(2) of the Motor Carrier Safety 
     Reauthorization Act of 2004 to carry out this section shall 
     remain available until expended.
       ``(c) Secretary's Approval.--Approval by the Secretary of a 
     grant to a State under section 4222(c)(2) of the Motor 
     Carrier Safety Reauthorization Act of 2004 to carry out this 
     section is a contractual obligation of the Government for 
     payment of the amount of the grant.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     311 is amended by inserting after the item relating to 
     section 31108 the following:

``31109. Performance and Registration Information System Management.''.

     SEC. 4241. COMMERCIAL VEHICLE INFORMATION SYSTEMS AND 
                   NETWORKS DEPLOYMENT.

       (a) In General.--The Secretary shall carry out a commercial 
     vehicle information systems and networks program to--
       (1) improve the safety and productivity of commercial 
     vehicles; and
       (2) reduce costs associated with commercial vehicle 
     operations and Federal and State commercial vehicle 
     regulatory requirements.
       (b) Purpose.--The program shall advance the technological 
     capability and promote the deployment of intelligent 
     transportation system applications for commercial vehicle 
     operations, including commercial vehicle, commercial driver, 
     and carrier-specific information systems and networks.
       (c) Core Deployment Grants.--
       (1) In general.--The Secretary shall make grants to 
     eligible States for the core deployment of commercial vehicle 
     information systems and networks.
       (2) Eligibility.--To be eligible for a core deployment 
     grant under this section, a State--
       (A) shall have a commercial vehicle information systems and 
     networks program plan and a top level system design approved 
     by the Secretary;
       (B) shall certify to the Secretary that its commercial 
     vehicle information systems and networks deployment 
     activities, including hardware procurement, software and 
     system development, and infrastructure modifications, are 
     consistent with the national intelligent transportation 
     systems and commercial vehicle information systems and 
     networks architectures and available standards, and promote 
     interoperability and efficiency to the extent practicable; 
     and
       (C) shall agree to execute interoperability tests developed 
     by the Federal Motor Carrier Safety Administration to verify 
     that its systems conform with the national intelligent 
     transportation systems architecture, applicable standards, 
     and protocols for commercial vehicle information systems and 
     networks.
       (3) Amount of grants.--The maximum aggregate amount a State 
     may receive under this section for the core deployment of 
     commercial vehicle information systems and networks may not 
     exceed $2,500,000.
       (4) Use of funds.--Funds from a grant under this subsection 
     may only be used for the core deployment of commercial 
     vehicle information systems and networks. Eligible States 
     that have either completed the core deployment of commercial 
     vehicle information systems and networks or completed such 
     deployment before core deployment grant funds are expended 
     may use the remaining core deployment grant funds for the 
     expanded deployment of commercial vehicle information systems 
     and networks in their State.
       (d) Expanded Deployment Grants.--
       (1) In general.--For each fiscal year, from the funds 
     remaining after the Secretary has made core deployment grants 
     under subsection (c) of this section, the Secretary may make 
     grants to each eligible State, upon request, for the expanded 
     deployment of commercial vehicle information systems and 
     networks.
       (2) Eligibility.--Each State that has completed the core 
     deployment of commercial vehicle information systems and 
     networks is eligible for an expanded deployment grant.
       (3) Amount of grants.--Each fiscal year, the Secretary may 
     distribute funds available for expanded deployment grants 
     equally among the eligible States, but not to exceed 
     $1,000,000 per State.
       (4) Use of funds.--A State may use funds from a grant under 
     this subsection only for the expanded deployment of 
     commercial vehicle information systems and networks.
       (e) Federal Share.--The Federal share of the cost of a 
     project payable from funds made available to carry out this 
     section shall not exceed 50 percent. The total Federal share 
     of the cost of a project payable from all eligible sources 
     shall not exceed 80 percent.
       (f) Applicability of Title 23, United States Code.--Funds 
     authorized to be appropriated under section 4222(c)(4) shall 
     be available for obligation in the same manner and to the 
     same extent as if such funds were apportioned under chapter 1 
     of title 23, United States Code, except that such funds shall 
     remain available until expended.
       (g) Definitions.--In this section:
       (1) Commercial vehicle information systems and networks.--
     The term ``commercial vehicle information systems and 
     networks'' means the information systems and communications 
     networks that provide the capability to--
       (A) improve the safety of commercial vehicle operations;
       (B) increase the efficiency of regulatory inspection 
     processes to reduce administrative burdens by advancing 
     technology to facilitate inspections and increase the 
     effectiveness of enforcement efforts;
       (C) advance electronic processing of registration 
     information, driver licensing information, fuel tax 
     information, inspection and crash data, and other safety 
     information;
       (D) enhance the safe passage of commercial vehicles across 
     the United States and across international borders; and
       (E) promote the communication of information among the 
     States and encourage multistate cooperation and corridor 
     development.
       (2) Commercial vehicle operations.--The term ``commercial 
     vehicle operations''--
       (A) means motor carrier operations and motor vehicle 
     regulatory activities associated with the commercial movement 
     of goods, including hazardous materials, and passengers; and
       (B) with respect to the public sector, includes the 
     issuance of operating credentials, the administration of 
     motor vehicle and fuel taxes, and roadside safety and border 
     crossing inspection and regulatory compliance operations.
       (3) Core deployment.--The term ``core deployment'' means 
     the deployment of systems in a State necessary to provide the 
     State with the following capabilities:
       (A) Safety information exchange.--Safety information 
     exchange to--
       (i) electronically collect and transmit commercial vehicle 
     and driver inspection data at a majority of inspection sites;
       (ii) connect to the Safety and Fitness Electronic Records 
     system for access to interstate carrier and commercial 
     vehicle data, summaries of past safety performance, and 
     commercial vehicle credentials information; and
       (iii) exchange carrier data and commercial vehicle safety 
     and credentials information within the State and connect to 
     Safety and Fitness Electronic Records for access to 
     interstate carrier and commercial vehicle data.
       (B) Interstate credentials administration.--Interstate 
     credentials administration to--
       (i) perform end-to-end processing, including carrier 
     application, jurisdiction application processing, and 
     credential issuance, of at least the International 
     Registration Plan and International Fuel Tax Agreement 
     credentials and extend this processing to other credentials, 
     including intrastate, titling, oversize/overweight, carrier 
     registration, and hazardous materials;
       (ii) connect to the International Registration Plan and 
     International Fuel Tax Agreement clearinghouses; and
       (iii) have at least 10 percent of the transaction volume 
     handled electronically, and have the capability to add more 
     carriers and to extend to branch offices where applicable.
       (C) Roadside screening.--Roadside electronic screening to 
     electronically screen transponder-

[[Page 10921]]

     equipped commercial vehicles at a minimum of 1 fixed or 
     mobile inspection sites and to replicate this screening at 
     other sites.
       (4) Expanded deployment.--The term ``expanded deployment'' 
     means the deployment of systems in a State that exceed the 
     requirements of an core deployment of commercial vehicle 
     information systems and networks, improve safety and the 
     productivity of commercial vehicle operations, and enhance 
     transportation security.

     SEC. 4242. OUTREACH AND EDUCATION.

       (a) In General.--The Secretary of Transportation, through 
     the National Highway Traffic Safety Administration and the 
     Federal Motor Carrier Safety Administration, may undertake 
     outreach and education initiatives, including the ``Share the 
     Road Safely'' program, that may reduce the number of highway 
     accidents, injuries, and fatalities involving commercial 
     motor vehicles. The Secretary may not use funds authorized by 
     this part for the ``Safety Is Good Business'' program.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for fiscal year 2004 to 
     carry out this section--
       (1) $250,000 for the Federal Motor Carrier Safety 
     Administration; and
       (2) $750,000 for the National Highway Traffic Safety 
     Administration.

     SEC. 4243. OPERATION OF RESTRICTED PROPERTY-CARRYING UNITS ON 
                   NATIONAL HIGHWAY SYSTEM.

       (a) Restricted Property-Carrying Unit Defined.--Section 
     31111(a) is amended--
       (1) by redesignating paragraph (3) as paragraph (4); and
       (2) by inserting after paragraph (2) the following:
       ``(3) Restricted property-carrying unit.--The term 
     `restricted property-carrying unit' means any trailer, semi-
     trailer, container, or other property-carrying unit that is 
     longer than 53 feet.''.
       (b) Prohibition on Operation of Restricted Property-
     Carrying Units.--
       (1) In general.--Section 31111(b)(1)(C) is amended to read 
     as follows:
       ``(C) allows operation on any segment of the National 
     Highway System, including the Interstate System, of a 
     restricted property-carrying unit unless the operation is 
     specified on the list published under subsection (h);''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect 270 days after the date of enactment of 
     this subsection.
       (c) Limitations.--Section 31111 is amended by adding at the 
     end the following:
       ``(h) Restricted Property-Carrying Units.--
       ``(1) Applicability of prohibition.--
       ``(A) In general.--Notwithstanding subsection (b)(1)(C), a 
     restricted property-carrying unit may continue to operate on 
     a segment of the National Highway System if the operation of 
     such unit is specified on the list published under paragraph 
     (2).
       ``(B) Applicability of state laws and regulations.--All 
     operations specified on the list published under paragraph 
     (2) shall continue to be subject to all State statutes, 
     regulations, limitations and conditions, including routing-
     specific, commodity-specific, and configuration-specific 
     designations and all other restrictions, in force on June 1, 
     2003.
       ``(C) Fire-fighting units.--Subsection (b)(1)(C) shall not 
     apply to the operation of a restricted property-carrying unit 
     that is used exclusively for fire-fighting.
       ``(2) Listing of restricted property-carrying units.--
       ``(A) In general.--Not later than 60 days after the date of 
     enactment of the Motor Carrier Safety Reauthorization Act of 
     2004, the Secretary shall initiate a proceeding to determine 
     and publish a list of restricted property-carrying units that 
     were authorized by State officials pursuant to State statute 
     or regulation on June 1, 2003, and in actual and lawful 
     operation on a regular or periodic basis (including seasonal 
     operations) on or before June 1, 2003.
       ``(B) Limitation.--A restricted property-carrying unit may 
     not be included on the list published under subparagraph (A) 
     on the basis that a State law or regulation could have 
     authorized the operation of the unit at some prior date by 
     permit or otherwise.
       ``(C) Publication of final list.--Not later than 270 days 
     after the date of enactment of this subsection, the Secretary 
     shall publish a final list of restricted property-carrying 
     units described in subparagraph (A).
       ``(D) Updates.--The Secretary shall update the list 
     published under subparagraph (C) as necessary to reflect new 
     designations made to the National Highway System.
       ``(3) Applicability of prohibition.--The prohibition 
     established by subsection (b)(1)(C) shall apply to any new 
     designation made to the National Highway System and remain in 
     effect on those portions of the National Highway System that 
     cease to be designated as part of the National Highway 
     System.
       ``(4) Limitation on statutory construction.--This 
     subsection does not prevent a State from further restricting 
     in any manner or prohibiting the operation of a restricted 
     property-carrying unit; except that such restrictions or 
     prohibitions shall be consistent with the requirements of 
     this section and sections 31112 through 31114.''.
       (d) Enforcement.--The second sentence of section 141(a) of 
     title 23, United States Code, is amended by striking 
     ``section 31112'' and inserting ``sections 31111 and 31112''.

     SEC. 4244. OPERATION OF LONGER COMBINATION VEHICLES ON 
                   NATIONAL HIGHWAY SYSTEM.

       (a) In General.--Section 31112 is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (g) and (h), respectively; and
       (2) by inserting after subsection (e) the following:
       ``(f) National Highway System.--
       ``(1) General rule.--A State may not allow, on a segment of 
     the National Highway System that is not covered under 
     subsection (b) or (c), the operation of a commercial motor 
     vehicle combination (except a vehicle or load that cannot be 
     dismantled easily or divided easily and that has been issued 
     a special permit under applicable State law) with more than 1 
     property- carrying unit (not including the truck tractor) 
     whose property-carrying units are more than--
       ``(A) the maximum combination trailer, semitrailer, or 
     other type of length limitation allowed by law or regulation 
     of that State on June 1, 2003; or
       ``(B) the length of the property-carrying units of those 
     commercial motor vehicle combinations, by specific 
     configuration, in actual and lawful operation on a regular or 
     periodic basis (including continuing seasonal operation) in 
     that State on or before June 1, 2003.
       ``(2) Additional limitations.--
       ``(A) Applicability of state restrictions.--A commercial 
     motor vehicle combination whose operation in a State is not 
     prohibited under paragraph (1) may continue to operate in the 
     State on highways described in paragraph (1) only in 
     compliance with all State laws, regulations, limitations, and 
     conditions, including routing-specific and configuration-
     specific designations and all other restrictions in force in 
     the State on June 1, 2003. Subject to regulations prescribed 
     by the Secretary under subsection (h), the State may make 
     minor adjustments of a temporary and emergency nature to 
     route designations and vehicle operating restrictions in 
     effect on June 1, 2003, for specific safety purposes and road 
     construction.
       ``(B) Additional state restrictions.--This subsection does 
     not prevent a State from further restricting in any manner or 
     prohibiting the operation of a commercial motor vehicle 
     combination subject to this section, except that such 
     restrictions or prohibitions shall be consistent with this 
     section and sections 31113(a), 31113(b), and 31114.
       ``(C) Minor adjustments.--A State making a minor adjustment 
     of a temporary and emergency nature as authorized by 
     subparagraph (A) or further restricting or prohibiting the 
     operation of a commercial motor vehicle combination as 
     authorized by subparagraph (B) shall advise the Secretary not 
     later than 30 days after the action. The Secretary shall 
     publish a notice of the action in the Federal Register.
       ``(3) List of state length limitations.--
       ``(A) State submissions.--Not later than 60 days after the 
     date of enactment of the Motor Carrier Safety Reauthorization 
     Act of 2004, each State shall submit to the Secretary for 
     publication a complete list of State length limitations 
     applicable to commercial motor vehicle combinations operating 
     in the State on the highways described in paragraph (1). The 
     list shall indicate the applicable State laws and regulations 
     associated with the length limitations. If a State does not 
     submit the information as required, the Secretary shall 
     complete and file the information for the State.
       ``(B) Publication of interim list.--Not later than 90 days 
     after the date of enactment of the Motor Carrier Safety 
     Reauthorization Act of 2004, the Secretary shall publish an 
     interim list in the Federal Register consisting of all 
     information submitted under subparagraph (A). The Secretary 
     shall review for accuracy all information submitted by a 
     State under subparagraph (A) and shall solicit and consider 
     public comment on the accuracy of the information.
       ``(C) Limitation.--A law or regulation may not be included 
     on the list submitted by a State or published by the 
     Secretary merely because it authorized, or could have 
     authorized, by permit or otherwise, the operation of 
     commercial motor vehicle combinations not in actual operation 
     on a regular or periodic basis on or before June 1, 2003.
       ``(D) Publication of final list.--Except as revised under 
     this subparagraph or subparagraph (E), the list shall be 
     published as final in the Federal Register not later than 270 
     days after the date of enactment of the Motor Carrier Safety 
     Reauthorization Act of 2004. In publishing the final list, 
     the Secretary shall make any revisions necessary to correct 
     inaccuracies identified under subparagraph (B). After 
     publication of the final list, commercial motor vehicle 
     combinations prohibited under paragraph (1) may not operate 
     on a highway described in paragraph (1) except as published 
     on the list.
       ``(E) Inaccuracies.--On the Secretary's own motion or on 
     request by any person (including a State), the Secretary 
     shall review the list published under subparagraph (D). If 
     the Secretary decides there is reason to believe a mistake 
     was made in the accuracy of the list, the Secretary shall 
     begin a proceeding to decide whether a mistake was made. If 
     the Secretary decides there was a mistake, the Secretary 
     shall publish the correction.''.
       (b) Conforming Amendments.--Section 31112 is amended--
       (1) by inserting ``126(e) or'' before ``127(d)'' in 
     subsection (g)(1) (as redesignated by subsection (a) of this 
     section);
       (2) by inserting ``(or June 1, 2003, with respect to 
     highways described in subsection (f)(1))'' after ``June 2, 
     1991'' in subsection (g)(3) (as redesignated by subsection 
     (a) of this section); and

[[Page 10922]]

       (3) by striking ``Not later than June 15, 1992, the 
     Secretary'' in subsection (h)(2) (as redesignated by 
     subsection (a) of this section) and inserting ``The 
     Secretary''; and
       (4) by inserting ``or (f)'' in subsection (h)(2) (as 
     redesignated by subsection (a) of this section) after 
     ``subsection (d)''.

     SEC. 4245. APPLICATION OF SAFETY STANDARDS TO CERTAIN FOREIGN 
                   MOTOR CARRIERS.

       (a) Application of Safety Standards.--Section 30112 is 
     amended--
       (1) by striking ``person'' in subsection (a) and inserting 
     ``person, including a foreign motor carrier,''; and
       (2) by adding at the end the following:
       ``(c) Definitions.--In this section:
       ``(1) Foreign motor carrier.--The term `foreign motor 
     carrier' has the meaning given that term in section 13102 of 
     this title.
       ``(2) Import.--The term `import' means transport by any 
     means into the United States, on a permanent or temporary 
     basis, including the transportation of a motor vehicle into 
     the United States for the purpose of providing the 
     transportation of cargo or passengers.''.
       (b) Requirement for Certificate of Compliance.--Section 
     30115 is amended by adding at the end the following:
       ``(c) Application to Foreign Motor Carriers.--
       ``(1) In general.--The requirement for certification 
     described in subsection (a) shall apply to a foreign motor 
     carrier that imports a motor vehicle or motor vehicle 
     equipment into the United States. Such certification shall be 
     made to the Secretary of Transportation prior to the import 
     of the vehicle or equipment.
       ``(2) Definitions.--In this subsection:
       ``(A) Foreign motor carrier.--The term `foreign motor 
     carrier' has the meaning given that term in section 13102 of 
     this title.
       ``(B) Import.--The term `import' has the meaning given that 
     term in section 30112 of this title.''.
       (c) Time for Compliance.--The amendments made by sections 
     (a) and (b) shall take effect on September 1, 2004.

     SEC. 4246. BACKGROUND CHECKS FOR MEXICAN AND CANADIAN DRIVERS 
                   HAULING HAZARDOUS MATERIALS.

       (a) In General.--No commercial motor vehicle operator 
     registered to operate in Mexico or Canada may operate a 
     commercial motor vehicle transporting a hazardous material in 
     commerce in the United States until the operator has 
     undergone a background records check similar to the 
     background records check required for commercial motor 
     vehicle operators licensed in the United States to transport 
     hazardous materials in commerce.
       (b) Definitions.--In this section:
       (1) Hazardous materials.--The term ``hazardous material'' 
     means any material determined by the Secretary of 
     Transportation to be a hazardous material for purposes of 
     this section.
       (2) Commercial motor vehicle.--The term ``commercial motor 
     vehicle'' has the meaning given that term by section 31101 of 
     title 49, United States Code.
       (c) Effective Date.--This section takes effect on April 1, 
     2004.

     SEC. 4247. EXEMPTION OF DRIVERS OF UTILITY SERVICE VEHICLES.

       Section 345 of the National Highway System Designation Act 
     of 1995 (49 U.S.C. 31136 note) is amended--
       (1) by striking paragraph (4) of subsection (a) and 
     inserting the following:
       ``(4) Drivers of utility service vehicles.--
       ``(A) Inapplicability of federal regulations.--Such 
     regulations may not apply to a driver of a utility service 
     vehicle.
       ``(B) Prohibition on state regulations.--A State, a 
     political subdivision of a State, an interstate agency, or 
     other entity consisting of 2 or more States, may not enact or 
     enforce any law, rule, regulation, or standard that imposes 
     requirements on a driver of a utility service vehicle that 
     are similar to the requirements contained in such 
     regulations.'';
       (2) by striking ``Nothing'' in subsection (b) and inserting 
     ``Except as provided in subsection (a)(4), nothing''; and
       (3) by striking ``paragraph (2)'' in the first sentence of 
     subsection (c) and inserting ``an exemption under paragraph 
     (2) or (4)''.

     SEC. 4248. OPERATION OF COMMERCIAL MOTOR VEHICLES 
                   TRANSPORTING AGRICULTURAL COMMODITIES AND FARM 
                   SUPPLIES.

       (a) Exemption From Hours-of-Service Requirements.--
       (1) In general.--Section 345(c) of the National Highway 
     System Designation Act of 1995 (49 U.S.C. 31136 note), as 
     amended by section 4247(3) of this title, is amended by 
     striking ``paragraph (2) or (4)'' and inserting ``paragraph 
     (1), (2), or (4) of that subsection)''.
       (2) Applicability.--The exemption provided by section 
     345(a)(1) of the National Highway System Designation Act of 
     1995 (49 U.S.C. 31136 note) shall apply to a person 
     transporting agricultural commodities or farm supplies for 
     agricultural purposes under that section on and after the 
     date of enactment of this Act regardless of any action taken 
     by the Secretary of Transportation under section 345(c) of 
     that Act before the date of enactment of this Act.
       (b) Definition of Agricultural Commodity.--Section 345(e) 
     of the National Highway System Designation Act of 1995 (49 
     U.S.C. 31136 note) is amended--
       (1) by redesignating paragraphs (3), (4), (5), and (6) as 
     paragraphs (5), (6), (4), and (7), respectively, and moving 
     the paragraphs so as to appear in numerical order; and
       (2) by inserting after paragraph (2) the following:
       ``(3) Agricultural commodity.--The term `agricultural 
     commodity' has the meaning given the term in section 102 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5602).''.

     SEC. 4249. SAFETY PERFORMANCE HISTORY SCREENING.

       (a) In General.--Subchapter III of chapter 311, as amended 
     by section 4228, is amended by adding at the end the 
     following:

     ``Sec. 31150. Safety performance history screening

       ``(a) In General.--The Secretary of Transportation shall 
     provide companies conducting pre-employment screening 
     services for the motor carrier industry electronic access 
     to--
       ``(1) commercial motor vehicle accident reports,
       ``(2) inspection reports that contain no driver-related 
     safety violations, and
       ``(3) serious driver-related safety violation inspection 
     reports that are contained in the Motor Carrier Management 
     Information System.
       ``(b) Establishment.--Prior to making information available 
     to such companies under subsection (a), the Secretary shall--
       ``(1) ensure that any information released is done in 
     accordance with the Fair Credit Reporting Act (15 U.S.C. 1681 
     et seq.) and all applicable Federal laws;
       ``(2) require the driver applicant's written consent as a 
     condition of releasing the information;
       ``(3) ensure that the information made available to 
     companies providing pre-employment screening services is not 
     released to any other unauthorized company or individual, 
     unless expressly authorized or required by law; and
       ``(4) provide a procedure for drivers to remedy incorrect 
     information in a timely manner.
       ``(c) Design.--To be eligible to have access to information 
     under subsection (a), a company conducting pre-employment 
     screening services for the motor carrier industry shall 
     utilize a screening process--
       ``(1) that is designed to assist the motor carrier industry 
     in assessing an individual driver's crash and serious safety 
     violation inspection history as a pre-employment condition;
       ``(2) the use of which is not mandatory; and
       ``(3) which is used only during the pre-employment 
     assessment of a driver-applicant.
       ``(d) Serious Driver-Related Safety Violations.--In this 
     section, the term `serious driver-related safety violation' 
     means a violation listed in the North American Standard 
     Driver Out-of-service Criteria that prohibits the continued 
     operation of a commercial motor vehicle.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     311, as amended by section 4228, is amended by inserting 
     after the item relating to section 31149 the following:

``31150. Safety performance history screening.''.

     SEC. 4250. COMPLIANCE REVIEW AUDIT.

       Within 1 year after the date of enactment of this Act, the 
     Inspector General for the Department of Transportation shall 
     audit the compliance reviews performed by the Federal Motor 
     Carrier Safety Administration in fiscal year 2003 and submit 
     a report to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure on--
       (1) the enforcement actions taken as a result of the 
     compliance reviews, including fines, suspension or revocation 
     of operating authority, unsatisfactory ratings, and follow-up 
     actions to ensure compliance with Federal motor carrier 
     safety regulations;
       (2) whether compliance reviews are or should be performed 
     on a corporate-wide basis for all affiliates of the motor 
     carrier selected for a compliance review as a result of its 
     Safety Status Measurement System ranking or the submission of 
     a complaint;
       (3) whether the enforcement actions taken by the Federal 
     Motor Carrier Safety Administration are adequate to assure 
     future compliance of the motor carrier with Federal safety 
     regulations and what deterrent effect those enforcement 
     actions may have industry-wide;
       (4) whether the methodology for calculating the crash rate 
     of commercial motor vehicles in the Safety Status Measurement 
     System would be more appropriately based on the number of 
     vehicle miles driven by a motor carrier rather than the 
     number of trucks operated by the carrier;
       (5) whether the public access information in the Safety 
     Status Measurement System meets the agency's requirements 
     under the Data Quality Act; and
       (6) the existing information Selection System Indicators 
     criteria and weighting and whether the safety evaluation area 
     containing data on accidents should receive higher priority 
     for complaince reviews and inspection selection.

                 PART III--UNIFIED CARRIER REGISTRATION

     SEC. 4261. SHORT TITLE.

       This part may be cited as the ``Unified Carrier 
     Registration Act of 2004''.

     SEC. 4262. RELATIONSHIP TO OTHER LAWS.

       Except as provided in section 14504 of title 49, United 
     States Code, and sections 14504a and 14506 of title 49, 
     United States Code, as added by this part, this part is not 
     intended to prohibit any State or any political subdivision 
     of any State from enacting, imposing, or enforcing any law or 
     regulation with respect to a motor carrier, motor private 
     carrier, broker, freight forwarder, or leasing company that 
     is not otherwise prohibited by law.

[[Page 10923]]



     SEC. 4263. INCLUSION OF MOTOR PRIVATE AND EXEMPT CARRIERS.

       (a) Persons Registered To Provide Transportation or Service 
     as a Motor Carrier or Motor Private Carrier.--Section 13905 
     is amended by--
       (1) redesignating subsections (b), (c), (d), and (e) as 
     subsections (c), (d), (e), and (f), respectively; and
       (2) inserting after subsection (a) the following:
       ``(b) Person Registered With Secretary.--Any person having 
     registered with the Secretary to provide transportation or 
     service as a motor carrier or motor private carrier under 
     this title, as in effect on January 1, 2002, but not having 
     registered pursuant to section 13902(a) of this title, shall 
     be deemed, for purposes of this part, to be registered to 
     provide such transportation or service for purposes of 
     sections 13908 and 14504a of this title.''.
       (b) Security Requirement.--Section 13906(a) is amended by--
       (1) redesignating paragraphs (2) and (3) as paragraphs (3) 
     and (4), respectively; and
       (2) inserting the following:
       ``(2) Security Requirement.--Not later than 120 days after 
     the date of enactment of the Unified Carrier Registration Act 
     of 2004, any person, other than a motor private carrier, 
     registered with the Secretary to provide transportation or 
     service as a motor carrier under section 13905(b) of this 
     title shall file with the Secretary a bond, insurance policy, 
     or other type of security approved by the Secretary, in an 
     amount not less than required by sections 31138 and 31139 of 
     this title.''.

     SEC. 4264. UNIFIED CARRIER REGISTRATION SYSTEM.

       (a) Section 13908 is amended to read as follows:

     ``Sec. 13908. Registration and other reforms

       ``(a) Establishment of Unified Carrier Registration 
     System.--The Secretary, in cooperation with the States, 
     representatives of the motor carrier, motor private carrier, 
     freight forwarder and broker industries, and after notice and 
     opportunity for public comment, shall issue within 1 year 
     after the date of enactment of the Unified Carrier 
     Registration Act of 2004 regulations to establish, an online, 
     Federal registration system to be named the Unified Carrier 
     Registration System to replace--
       ``(1) the current Department of Transportation 
     identification number system, the Single State Registration 
     System under section 14504 of this title;
       ``(2) the registration system contained in this chapter and 
     the financial responsibility information system under section 
     13906; and
       ``(3) the service of process agent systems under sections 
     503 and 13304 of this title.
       ``(b) Role as Clearinghouse and Depository of 
     Information.--The Unified Carrier Registration System shall 
     serve as a clearinghouse and depository of information on, 
     and identification of, all foreign and domestic motor 
     carriers, motor private carriers, brokers, and freight 
     forwarders, and others required to register with the 
     Department, including information with respect to a carrier's 
     safety rating, compliance with required levels of financial 
     responsibility, and compliance with the provisions of section 
     14504a of this title. The Secretary shall ensure that Federal 
     agencies, States, representatives of the motor carrier 
     industry, and the public have access to the Unified Carrier 
     Registration System, including the records and information 
     contained in the System.
       ``(c) Procedures for Correcting Information.--Not later 
     than 60 days after the effective date of this section, the 
     Secretary shall prescribe regulations establishing procedures 
     that enable a motor carrier to correct erroneous information 
     contained in any part of the Unified Carrier Registration 
     System.
       ``(d) Fee System.--The Secretary shall establish, under 
     section 9701 of title 31, a fee system for the Unified 
     Carrier Registration System according to the following 
     guidelines:
       ``(1) Registration and filing evidence of financial 
     responsibility.--The fee for new registrants shall as nearly 
     as possible cover the costs of processing the registration 
     and conducting the safety audit or examination, if required, 
     but shall not exceed $300.
       ``(2) Evidence of financial responsibility.--The fee for 
     filing evidence of financial responsibility pursuant to this 
     section shall not exceed $10 per filing. No fee shall be 
     charged for a filing for purposes of designating an agent for 
     service of process or the filing of other information 
     relating to financial responsibility.
       ``(3) Access and retrieval fees.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the fee system shall include a nominal fee for the access to 
     or retrieval of information from the Unified Carrier 
     Registration System to cover the costs of operating and 
     upgrading the System, including the personnel costs incurred 
     by the Department and the costs of administration of the 
     Unified Carrier Registration Agreement.
       ``(B) Exceptions.--There shall be no fee charged--
       ``(i) to any agency of the Federal Government or a State 
     government or any political subdivision of any such 
     government for the access to or retrieval of information and 
     data from the Unified Carrier Registration System for its own 
     use; or
       ``(ii) to any representative of a motor carrier, motor 
     private carrier, leasing company, broker, or freight 
     forwarder (as each is defined in section 14504a of this 
     title) for the access to or retrieval of the individual 
     information related to such entity from the Unified Carrier 
     Registration System for the individual use of such entity.''.

     SEC. 4265. REGISTRATION OF MOTOR CARRIERS BY STATES.

       (a) Termination of Registration Provisions.--Section 14504 
     is amended by adding at the end the following:
       ``(d) Termination of Provisions.--Subsections (b) and (c) 
     shall cease to be effective on the first January 1st 
     occurring more than 12 months after the date of enactment of 
     the Unified Carrier Registration Act of 2004.''.
       (b) Unified Carrier Registration System Plan and 
     Agreement.--Chapter 145 is amended by inserting after section 
     14504 the following:

     ``Sec. 14504a. Unified carrier registration system plan and 
       agreement

       ``(a) Definitions.--In this section and section 14506 of 
     this title:
       ``(1) Commercial motor vehicle.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `commercial motor vehicle' has the meaning given the 
     term in section 31101 of this title.
       ``(B) Exception.--With respect to motor carriers required 
     to make any filing or pay any fee to a State with respect to 
     the motor carrier's authority or insurance related to 
     operation within such State, the term `commercial motor 
     vehicle' means any self-propelled vehicle used on the highway 
     in commerce to transport passengers or property for 
     compensation regardless of the gross vehicle weight rating of 
     the vehicle or the number of passengers transported by such 
     vehicle.
       ``(2) Base-state.--
       ``(A) In general.--The term `Base-State' means, with 
     respect to the Unified Carrier Registration Agreement, a 
     State--
       ``(i) that is in compliance with the requirements of 
     subsection (e); and
       ``(ii) in which the motor carrier, motor private carrier, 
     broker, freight forwarder or leasing company maintains its 
     principal place of business.
       ``(B) Designation of base-state.--A motor carrier, motor 
     private carrier, broker, freight forwarder or leasing company 
     may designate another State in which it maintains an office 
     or operating facility as its Base-State in the event that--
       ``(i) the State in which the motor carrier, motor private 
     carrier, broker, freight forwarder or leasing company 
     maintains its principal place of business is not in 
     compliance with the requirements of subsection (e); or
       ``(ii) the motor carrier, motor private carrier, broker, 
     freight forwarder or leasing company does not have a 
     principal place of business in the United States.
       ``(3) Intrastate fee.--The term `intrastate fee' means any 
     fee, tax, or other type of assessment, including per vehicle 
     fees and gross receipts taxes, imposed on a motor carrier or 
     motor private carrier for the renewal of the intrastate 
     authority or insurance filings of such carrier with a State.
       ``(4) Leasing company.--The term `leasing company' means a 
     lessor that is engaged in the business of leasing or renting 
     for compensation motor vehicles without drivers to a motor 
     carrier, motor private carrier, or freight forwarder.
       ``(5) Motor carrier.--The term `motor carrier' has the 
     meaning given the term in section 13102(12) of this title, 
     but shall include all carriers that are otherwise exempt from 
     the provisions of part B of this title pursuant to the 
     provisions of chapter 135 of this title or exemption actions 
     by the former Interstate Commerce Commission under this 
     title.
       ``(6) Participating state.--The term `participating state' 
     means a State that has complied with the requirements of 
     subsection (e) of this section.
       ``(7) SSRS.--The term `SSRS' means the Single State 
     Registration System in effect on the date of enactment of the 
     Unified Carrier Registration Act of 2004.
       ``(8) Unified carrier registration agreement.--The terms 
     `Unified Carrier Registration Agreement' and `UCR Agreement' 
     mean the interstate agreement developed under the Unified 
     Carrier Registration Plan governing the collection and 
     distribution of registration and financial responsibility 
     information provided and fees paid by motor carriers, motor 
     private carriers, brokers, freight forwarders and leasing 
     companies pursuant to this section.
       ``(9) Unified carrier registration plan.--The terms 
     `Unified Carrier Registration Plan' and `UCR Plan' mean the 
     organization of State, Federal and industry representatives 
     responsible for developing, implementing and administering 
     the Unified Carrier Registration Agreement.
       ``(10) Vehicle registration.--The term `vehicle 
     registration' means the registration of any commercial motor 
     vehicle under the International Registration Plan or any 
     other registration law or regulation of a jurisdiction.
       ``(b) Applicability of Provisions to Freight Forwarders.--A 
     Freight forwarder that operates commercial motor vehicles and 
     is not required to register as a carrier pursuant to section 
     13903(b) of this title shall be subject to the provisions of 
     this section as if a motor carrier.
       ``(c) Unreasonable Burden.--For purposes of this section, 
     it shall be considered an unreasonable burden upon interstate 
     commerce for any State or any political subdivision of a 
     State, or any political authority of 2 or more States--
       ``(1) to enact, impose, or enforce any requirement or 
     standards, or levy any fee or charge on any interstate motor 
     carrier or interstate motor private carrier in connection 
     with--
       ``(A) the registration with the State of the interstate 
     operations of a motor carrier or motor private carrier;
       ``(B) the filing with the State of information relating to 
     the financial responsibility of a

[[Page 10924]]

     motor carrier or motor private carrier pursuant to sections 
     31138 or 31139 of this title;
       ``(C) the filing with the State of the name of the local 
     agent for service of process of a motor carrier or motor 
     private carrier pursuant to sections 503 or 13304 of this 
     title; or
       ``(D) the annual renewal of the intrastate authority, or 
     the insurance filings, of a motor carrier or motor private 
     carrier, or other intrastate filing requirement necessary to 
     operate within the State, if the motor carrier or motor 
     private carrier is--
       ``(i) registered in compliance with section 13902 or 
     section 13905(b) of this title; and
       ``(ii) in compliance with the laws and regulations of the 
     State authorizing the carrier to operate in the State 
     pursuant to section 14501(c)(2)(A) of this title
     except with respect to--

       ``(I) intrastate service provided by motor carriers of 
     passengers that is not subject to the preemptive provisions 
     of section 14501(a) of this title,
       ``(II) motor carriers of property, motor private carriers, 
     brokers, or freight forwarders, or their services or 
     operations, that are described in subparagraphs (B) and (C) 
     of section 14501(c)(2) and section 14506(c)(3) or permitted 
     pursuant to section 14506(b) of this title, and
       ``(III) the intrastate transportation of waste or 
     recycables by any carrier); or

       ``(2) to require any interstate motor carrier or motor 
     private carrier to pay any fee or tax, not proscribed by 
     paragraph (1)(D) of this subsection, that a motor carrier or 
     motor private carrier that pays a fee which is proscribed by 
     that paragraph is not required to pay.
       ``(d) Unified Carrier Registration Plan.--
       ``(1) Board of directors.--
       ``(A) Governance of plan.--The Unified Carrier Registration 
     Plan shall be governed by a Board of Directors consisting of 
     representatives of the Department of Transportation, 
     Participating States, and the motor carrier industry.
       ``(B) Number.--The Board shall consist of 15 directors.
       ``(C) Composition.--The Board shall be composed of 
     directors appointed as follows:
       ``(i) Federal motor carrier safety administration.--The 
     Secretary shall appoint 1 director from each of the Federal 
     Motor Carrier Safety Administration's 4 Service Areas (as 
     those areas were defined by the Federal Motor Carrier Safety 
     Administration on January 1, 2003), from among the chief 
     administrative officers of the State agencies responsible for 
     overseeing the administration of the UCR Agreement.
       ``(ii) State agencies.--The Secretary shall appoint 5 
     directors from the professional staffs of State agencies 
     responsible for overseeing the administration of the UCR 
     Agreement in their respective States. Nominees for these 5 
     directorships shall be submitted to the Secretary by the 
     national association of professional employees of the State 
     agencies responsible for overseeing the administration of the 
     UCR Agreement in their respective States.
       ``(iii) Motor carrier industry.--The Secretary shall 
     appoint 5 directors from the motor carrier industry. At least 
     1 of the appointees shall be an employee of the national 
     trade association representing the general motor carrier of 
     property industry.
       ``(iv) Department of transportation.--The Secretary shall 
     appoint the Deputy Administrator of the Federal Motor Carrier 
     Safety Administration, or such other presidential appointee 
     from the United States Department of Transportation, as the 
     Secretary may designate, to serve as a director.
       ``(D) Chairperson and vice-chairperson.--The Secretary 
     shall designate 1 director as Chairperson and 1 director as 
     Vice-Chairperson of the Board. The Chairperson and Vice-
     Chairperson shall serve in such capacity for the term of 
     their appointment as directors.
       ``(E) Term.--In appointing the initial Board, the Secretary 
     shall designate 5 of the appointed directors for initial 
     terms of 3 years, 5 of the appointed directors for initial 
     terms of 2 years, and 5 of the appointed directors for 
     initial terms of 1 year. Thereafter, all directors shall be 
     appointed for terms of 3 years, except that the term of the 
     Deputy Administrator or other individual designated by the 
     Secretary under subparagraph (C)(iv) shall be at the 
     discretion of the Secretary. A director may be appointed to 
     succeed himself or herself. A director may continue to serve 
     on the Board until his or her successor is appointed.
       ``(2) Rules and regulations governing the ucr agreement.--
     The Board of Directors shall develop the rules and 
     regulations to govern the UCR Agreement and submit such rules 
     and regulations to the Secretary for approval and adoption. 
     The rules and regulations shall--
       ``(A) prescribe uniform forms and formats, for--
       ``(i) the annual submission of the information required by 
     a Base-State of a motor carrier, motor private carrier, 
     leasing company, broker, or freight forwarder;
       ``(ii) the transmission of information by a Participating 
     State to the Unified Carrier Registration System;
       ``(iii) the payment of excess fees by a State to the 
     designated depository and the distribution of fees by the 
     depository to those States so entitled; and
       ``(iv) the providing of notice by a motor carrier, motor 
     private carrier, broker, freight forwarder, or leasing 
     company to the Board of the intent of such entity to change 
     its Base-State, and the procedures for a State to object to 
     such a change under subparagraph (C) of this paragraph;
       ``(B) provide for the administration of the Unified Carrier 
     Registration Agreement, including procedures for amending the 
     Agreement and obtaining clarification of any provision of the 
     Agreement;
       ``(C) provide procedures for dispute resolution that 
     provide due process for all involved parties; and
       ``(D) designate a depository.
       ``(3) Compensation and expenses.--Except for the 
     representative of the Department of Transportation appointed 
     pursuant to paragraph 1(D), no director shall receive any 
     compensation or other benefits from the Federal Government 
     for serving on the Board or be considered a Federal employee 
     as a result of such service. All Directors shall be 
     reimbursed for expenses they incur attending duly called 
     meetings of the Board. In addition, the Board may approve the 
     reimbursement of expenses incurred by members of any 
     subcommittee or task force appointed pursuant to paragraph 
     (5). The reimbursement of expenses to directors and 
     subcommittee and task force members shall be based on the 
     then applicable rules of the General Service Administration 
     governing reimbursement of expenses for travel by Federal 
     employees.
       ``(4) Meetings.--
       ``(A) In general.--The Board shall meet at least once per 
     year. Additional meetings may be called, as needed, by the 
     Chairperson of the Board, a majority of the directors, or the 
     Secretary.
       ``(B) Quorum.--A majority of directors shall constitute a 
     quorum.
       ``(C) Voting.--Approval of any matter before the Board 
     shall require the approval of a majority of all directors 
     present at the meeting.
       ``(D) Open meetings.--Meetings of the Board and any 
     subcommittees or task forces appointed pursuant to paragraph 
     (5) of this section shall be subject to the provisions of 
     section 552b of title 5.
       ``(5) Subcommittees.--
       ``(A) Industry advisory subcommittee.--The Chairperson 
     shall appoint an Industry Advisory Subcommittee. The Industry 
     Advisory Subcommittee shall consider any matter before the 
     Board and make recommendations to the Board.
       ``(B) Other subcommittees.--The Chairperson shall appoint 
     an Audit Subcommittee, a Dispute Resolution Subcommittee, and 
     any additional subcommittees and task forces that the Board 
     determines to be necessary.
       ``(C) Membership.--The chairperson of each subcommittee 
     shall be a director. The other members of subcommittees and 
     task forces may be directors or non-directors.
       ``(D) Representation on subcommittees.--Except for the 
     Industry Advisory Subcommittee (the membership of which shall 
     consist solely of representatives of entities subject to the 
     fee requirements of subsection (f) of this section), each 
     subcommittee and task force shall include representatives of 
     the Federal Motor Carrier Safety Administration, the 
     Participating States, and the motor carrier industry.
       ``(6) Delegation of authority.--The Board may contract with 
     any private commercial or non-profit entity or any agency of 
     a State to perform administrative functions required under 
     the Unified Carrier Registration Agreement, but may not 
     delegate its decision or policy-making responsibilities.
       ``(7) Determination of fees.--The Board shall determine the 
     annual fees to be assessed carriers, leasing companies, 
     brokers, and freight forwarders pursuant to the Unified 
     Carrier Registration Agreement. In determining the level of 
     fees to be assessed in the next Agreement year, the Board 
     shall consider--
       ``(A) the administrative costs associated with the Unified 
     Carrier Registration Plan and the Agreement;
       ``(B) whether the revenues generated in the previous year 
     and any surplus or shortage from that or prior years enable 
     the Participating States to achieve the revenue levels set by 
     the Board; and
       ``(C) the parameters for fees set forth in subsection 
     (f)(1).
       ``(8) Liability protections for directors.--No individual 
     appointed to serve on the Board shall be liable to any other 
     director or to any other party for harm, either economic or 
     non-economic, caused by an act or omission of the individual 
     arising from the individual's service on the Board if--
       ``(A) the individual was acting within the scope of his or 
     her responsibilities as a director; and
       ``(B) the harm was not caused by willful or criminal 
     misconduct, gross negligence, reckless misconduct, or a 
     conscious, flagrant indifference to the right or safety of 
     the party harmed by the individual.
       ``(9) Inapplicability of federal advisory committee act.--
     The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Unified Carrier Registration Plan or its 
     committees.
       ``(10) Certain fees not affected.--This section does not 
     limit the amount of money a State may charge for vehicle 
     registration or the amount of any fuel use tax a State may 
     impose pursuant to the International Fuel Tax Agreement.
       ``(e) State Participation.--
       ``(1) State plan.--No State shall be eligible to 
     participate in the Unified Carrier Registration Plan or to 
     receive any revenues derived under the Agreement, unless the 
     State submits to the Secretary, not later than 3 years after 
     the date of enactment of the Unified Carrier Registration Act 
     of 2004, a plan--
       ``(A) identifying the State agency that has or will have 
     the legal authority, resources, and

[[Page 10925]]

     qualified personnel necessary to administer the Unified 
     Carrier Registration Agreement in accordance with the rules 
     and regulations promulgated by the Board of Directors of the 
     Unified Carrier Registration Plan; and
       ``(B) containing assurances that an amount at least equal 
     to the revenue derived by the State from the Unified Carrier 
     Registration Agreement shall be used for motor carrier safety 
     programs, enforcement, and financial responsibility, or the 
     administration of the UCR Plan and UCR Agreement.
       ``(2) Amended plans.--A State may change the agency 
     designated in the plan submitted under this subsection by 
     filing an amended plan with the Secretary and the Chairperson 
     of the Unified Carrier Registration Plan.
       ``(3) Withdrawal of plan.--In the event a State withdraws, 
     or notifies the Secretary that it is withdrawing, the plan 
     submitted under this subsection, the State may no longer 
     participate in the Unified Carrier Registration Agreement or 
     receive any portion of the revenues derived under the 
     Agreement.
       ``(4) Termination of eligibility.--If a State fails to 
     submit a plan to the Secretary as required by paragraph (1) 
     or withdraws its plan under paragraph (3), the State shall be 
     prohibited from subsequently submitting or resubmitting a 
     plan or participating in the Agreement.
       ``(5) Provision of plan to chairperson.--The Secretary 
     shall provide a copy of each plan submitted under this 
     subsection to the initial Chairperson of the Board of 
     Directors of the Unified Carrier Registration Plan not later 
     than 90 days of appointing the Chairperson.
       ``(f) Contents of Unified Carrier Registration Agreement.--
     The Unified Carrier Registration Agreement shall provide the 
     following:
       ``(1) Determination of fees.--
       ``(A) Fees charged motor carriers, motor private carriers, 
     or freight forwarders in connection with the filing of proof 
     of financial responsibility under the UCR Agreement shall be 
     based on the number of commercial motor vehicles owned or 
     operated by the motor carrier, motor private carrier, or 
     freight forwarder. Brokers and leasing companies shall pay 
     the same fees as the smallest bracket of motor carriers, 
     motor private carriers, and freight forwarders.
       ``(B) The fees shall be determined by the Board with the 
     approval of the Secretary.
       ``(C) The Board shall develop no more than 6 and no less 
     than 4 ranges of carriers by size of fleet.
       ``(D) The fee scale shall be progressive and use different 
     vehicle ratios for different ranges of carrier fleet size.
       ``(E) The Board may adjust the fees within a reasonable 
     range on an annual basis if the revenues derived from the 
     fees--
       ``(i) are insufficient to provide the revenues to which the 
     States are entitled under this section; or
       ``(ii) exceed those revenues.
       ``(2) Determination of ownership or operation.--Commercial 
     motor vehicles owned or operated by a motor carrier, motor 
     private carrier, or freight forwarder shall mean those 
     commercial motor vehicles registered in the name of the motor 
     carrier, motor private carrier, or freight forwarder or 
     controlled by the motor carrier, motor private carrier, or 
     freight forwarder under a long term lease during a vehicle 
     registration year.
       ``(3) Calculation of number of commercial motor vehicles 
     owned or operated.--The number of commercial motor vehicles 
     owned or operated by a motor carrier, motor private carrier, 
     or freight forwarder for purposes of subsection (e)(1) shall 
     be based either on the number of commercial motor vehicles 
     the motor carrier, motor private carrier, or freight 
     forwarder has indicated it operates on its most recently 
     filed MCS-150 or the total number of such vehicles it owned 
     or operated for the 12-month period ending on June 30 of the 
     year immediately prior to the each registration year of the 
     Unified Carrier Registration System.
       ``(4) Payment of fees.--Motor carriers, motor private 
     carriers, leasing companies, brokers, and freight forwarders 
     shall pay all fees required under this section to their Base-
     State pursuant to the UCR Agreement.
       ``(g) Payment of Fees.--Revenues derived under the UCR 
     Agreement shall be allocated to Participating States as 
     follows:
       ``(1) A State that participated in the Single State 
     Registration System in the last calendar year ending before 
     the date of enactment of the Unified Carrier Registration Act 
     of 2004 and complies with the requirements of subsection (e) 
     of this section is entitled to receive a portion of the UCR 
     Agreement revenues generated under the Agreement equivalent 
     to the revenues it received under the SSRS in the last 
     calendar year ending before the date of enactment of the 
     Unified Carrier Registration Act of 2004, as long as the 
     State continues to comply with the provisions of subsection 
     (e).
       ``(2) A State that collected intrastate registration fees 
     from interstate motor carriers, interstate motor private 
     carriers, or interstate exempt carriers and complies with the 
     requirements of subsection (e) of this section is entitled to 
     receive an additional portion of the UCR Agreement revenues 
     generated under the Agreement equivalent to the revenues it 
     received from such interstate carriers in the last calendar 
     year ending before the date of enactment of the Unified 
     Carrier Registration Act of 2004, as long as the State 
     continues to comply with the provisions of subsection (e).
       ``(3) States that comply with the requirements of 
     subsection (e) of this section but did not participate in 
     SSRS during the last calendar year ending before the date of 
     enactment of the Unified Carrier Registration Act of 2004 
     shall be entitled to an annual allotment not to exceed 
     $500,000 from the UCR Agreement revenues generated under the 
     Agreement as long as the State continues to comply with the 
     provisions of subsection (e).
       ``(4) The amount of UCR Agreement revenues to which a State 
     is entitled under this section shall be calculated by the 
     Board and approved by the Secretary.
       ``(h) Distribution of UCR Agreement Revenues.--
       ``(1) Eligibility.--Each State that is in compliance with 
     the provisions of subsection (e) shall be entitled to a 
     portion of the revenues derived from the UCR Agreement in 
     accordance with subsection (g).
       ``(2) Entitlement to revenues.--A State that is in 
     compliance with the provisions of subsection (e) may retain 
     an amount of the gross revenues it collects from motor 
     carriers, motor private carriers, brokers, freight forwarders 
     and leasing companies under the UCR Agreement equivalent to 
     the portion of revenues to which the State is entitled under 
     subsection (g). All revenues a Participating State collects 
     in excess of the amount to which the State is so entitled 
     shall be forwarded to the depository designated by the Board 
     under subsection (d)(2)(D).
       ``(3) Distribution of funds from depository.--The excess 
     funds collected in the depository shall be distributed as 
     follows:
       ``(A) Excess funds shall be distributed on a pro rata basis 
     to each Participating State that did not collect revenues 
     under the UCR Agreement equivalent to the amount such State 
     is entitled under subsection (g), except that the sum of the 
     gross UCR Agreement revenues collected by a Participating 
     State and the amount distributed to it from the depository 
     shall not exceed the amount to which the State is entitled 
     under subsection (g).
       ``(B) Any excess funds held by the depository after all 
     distributions under subparagraph (A) have been made shall be 
     used to pay the administrative costs of the UCR Plan and the 
     UCR Agreement.
       ``(C) Any excess funds held by the depository after 
     distributions and payments under subparagraphs (A) and (B) 
     shall be retained in the depository, and the UCR Agreement 
     fees for motor carriers, motor private carriers, leasing 
     companies, freight forwarders, and brokers for the next fee 
     year shall be reduced by the Board accordingly.
       ``(i) Enforcement.--
       ``(1) Civil actions.--Upon request by the Secretary of 
     Transportation, the Attorney General may bring a civil action 
     in a court of competent jurisdiction to enforce compliance 
     with this section and with the terms of the Unified Carrier 
     Registration Agreement.
       ``(2) Venue.--An action under this section may be brought 
     only in the Federal court sitting in the State in which an 
     order is required to enforce such compliance.
       ``(3) Relief.--Subject to section 1341 of title 28, the 
     court, on a proper showing--
       ``(A) shall issue a temporary restraining order or a 
     preliminary or permanent injunction; and
       ``(B) may issue an injunction requiring that the State or 
     any person comply with this section.
       ``(4) Enforcement by states.--Nothing in this section--
       ``(A) prohibits a Participating State from issuing 
     citations and imposing reasonable fines and penalties 
     pursuant to applicable State laws and regulations on any 
     motor carrier, motor private carrier, freight forwarder, 
     broker, or leasing company for failure to--
       ``(i) submit documents as required under subsection (d)(2); 
     or
       ``(ii) pay the fees required under subsection (f); or
       ``(B) authorizes a State to require a motor carrier, motor 
     private carrier, or freight forwarder to display as evidence 
     of compliance any form of identification in excess of those 
     permitted under section 14506 of this title on or in a 
     commercial motor vehicle.
       ``(j) Application to Intrastate Carriers.--Notwithstanding 
     any other provision of this section, a State may elect to 
     apply the provisions of the UCR Agreement to motor carriers 
     and motor private carriers subject to its jurisdiction that 
     operate solely in intrastate commerce within the borders of 
     the State.''.

     SEC. 4266. IDENTIFICATION OF VEHICLES.

       Chapter 145 is amended by adding at the end the following:

     ``Sec. 14506. Identification of vehicles

       ``(a) Restriction on Requirements.--No State, political 
     subdivision of a State, interstate agency, or other political 
     agency of 2 or more States may enact or enforce any law, 
     rule, regulation standard, or other provision having the 
     force and effect of law that requires a motor carrier, motor 
     private carrier, freight forwarder, or leasing company to 
     display any form of identification on or in a commercial 
     motor vehicle, other than forms of identification required by 
     the Secretary of Transportation under section 390.21 of title 
     49, Code of Federal Regulations.
       ``(b) Exception.--Notwithstanding paragraph (a), a State 
     may continue to require display of credentials that are 
     required--
       ``(1) under the International Registration Plan under 
     section 31704 of this title;
       ``(2) under the International Fuel Tax Agreement under 
     section 31705 of this title;
       ``(3) in connection with Federal requirements for hazardous 
     materials transportation under section 5103 of this title; or
       ``(4) in connection with the Federal vehicle inspection 
     standards under section 31136 of this title.''.

[[Page 10926]]



     SEC. 4267. USE OF UCR AGREEMENT REVENUES AS MATCHING FUNDS.

       Section 31103(a) is amended by inserting ``Amounts 
     generated by the Unified Carrier Registration Agreement, 
     under section 14504a of this title and received by a State 
     and used for motor carrier safety purposes may be included as 
     part of the State's share not provided by the United 
     States.'' after ``United States Government.''.

     SEC. 4268. CLERICAL AMENDMENTS.

       (a) Section 13906 Caption.--The section caption for section 
     13906 is amended by inserting ``motor private carriers,'' 
     after ``motor carriers,''.
       (b) Table of Contents.--The chapter analysis for chapter 
     139 is amended by striking the item relating to section 13906 
     and inserting the following:

``13906. Security of motor carriers, motor private carriers, brokers, 
              and freight forwarders.''.

                   Subtitle C--Household Goods Movers

     SEC. 4301. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES 
                   CODE.

       (a) Short Title.--This subtitle may be cited as the 
     ``Household Goods Mover Oversight Enforcement and Reform Act 
     of 2004''.
       (b) Amendment of Title 49, United States Code.--Except as 
     otherwise specifically provided, whenever in this subtitle an 
     amendment is expressed in terms of an amendment to a section 
     or other provision of law, the reference shall be considered 
     to be made to a section or other provision of title 49, 
     United States Code.

     SEC. 4302. FINDINGS; SENSE OF CONGRESS.

       The Congress finds the following:
       (1) There are approximately 1,500,000 interstate household 
     moves every year. While the vast majority of these interstate 
     moves are completed successfully, consumer complaints have 
     been increasing since the Interstate Commerce Commission was 
     abolished in 1996 and oversight of the household goods 
     industry was transferred to the Department of Transportation.
       (2) While the overwhelming majority of household goods 
     carriers are honest and operate within the law, there appears 
     to be a growing criminal element that is exploiting a 
     perceived void in Federal and State enforcement efforts. The 
     growing criminal element tends to prey upon consumers.
       (3) The movement of an individual's household goods is 
     unique and differs from the movement of a commercial 
     shipment. A consumer may utilize a moving company once or 
     twice in the consumer's lifetime and entrust virtually all of 
     the consumer's worldly goods to a mover.
       (4) Federal resources are inadequate to properly police or 
     deter, on a nationwide basis, those movers who willfully 
     violate Federal regulations governing the household goods 
     industry and knowingly prey on consumers who are in a 
     vulnerable position. It is appropriate that a Federal-State 
     partnership be created to enhance enforcement against 
     fraudulent moving companies.

     SEC. 4303. DEFINITIONS.

       In this title, the terms ``carrier'', ``household goods'', 
     ``motor carrier'', ``Secretary'', and ``transportation'' have 
     the meaning given such terms in section 13102 of title 49, 
     United States Code.

     SEC. 4304. PAYMENT OF RATES.

       Section 13707(b) is amended by adding at the end the 
     following:
       ``(3) Shipments of household goods.--
       ``(A) In general.--A carrier providing transportation for a 
     shipment of household goods shall give up possession of the 
     household goods transported at the destination upon payment 
     of--
       ``(i) 100 percent of the charges contained in a binding 
     estimate provided by the carrier;
       ``(ii) not more than 110 percent of the charges contained 
     in a nonbinding estimate provided by the carrier; or
       ``(iii) in the case of a partial delivery of the shipment, 
     the prorated percentage of the charges calculated in 
     accordance with subparagraph (B).
       ``(B) Calculation of prorated charges.--For purposes of 
     subparagraph (A)(iii), the prorated percentage of the charges 
     shall be the percentage of the total charges due to the 
     carrier as described in clause (i) or (ii) of subparagraph 
     (A) that is equal to the percentage of the weight of that 
     portion of the shipment delivered to the total weight of the 
     shipment.
       ``(C) Post-contract services.--Subparagraph (A) does not 
     apply to additional services requested by a shipper after the 
     contract of service is executed that were not included in the 
     estimate.
       ``(D) Impracticable operations.--Subparagraph (A) does 
     apply to impracticable operations, as defined by the 
     applicable carrier tariff, if the shipper agrees to pay the 
     charges for such operations within 30 days after the goods 
     are delivered.''.

     SEC. 4305. HOUSEHOLD GOODS CARRIER OPERATIONS.

       Section 14104 is amended--
       (1) by striking paragraph (1) of subsection (b) and 
     inserting the following:
       ``(1) Requirement for written estimate.--A motor carrier 
     providing transportation of household goods subject to 
     jurisdiction under subchapter I of chapter 135 shall provide 
     to a prospective shipper a written estimate of all charges 
     related to the transportation of the household goods, 
     including charges for--
       ``(A) packing;
       ``(B) unpacking;
       ``(C) loading;
       ``(D) unloading; and
       ``(E) handling of the shipment from the point of origin to 
     the final destination (whether that destination is storage or 
     transit).'';
       (2) by redesignating paragraph (2) of such subsection as 
     paragraph (4); and
       (3) by inserting after paragraph (1), as amended by 
     paragraph (1), the following:
       ``(2) Other information.--At the time that a motor carrier 
     provides the written estimate required by paragraph (1), the 
     motor carrier shall provide the shipper a copy of the 
     Department of Transportation publication FMCSA-ESA-03-005 (or 
     its successor edition or publication) entitled `Ready to 
     Move?'. Before the execution of a contract for service, a 
     motor carrier shall provide the shipper a copy of the 
     Department of Transportation publication OCE 100, entitled 
     `Your Rights and Responsibilities When You Move' required by 
     section 375.2 of title 49, Code of Federal Regulations (or 
     any corresponding similar regulation).
       ``(3) Binding and nonbinding estimates.--The written 
     estimate required by paragraph (1) may be either binding or 
     nonbinding. The written estimate shall be based on a visual 
     inspection of the household goods if the household goods are 
     located within a 50-mile radius of the location of the 
     carrier's household goods agent preparing the estimate. The 
     Secretary may not prohibit any such carrier from charging a 
     prospective shipper for providing a written, binding estimate 
     for the transportation and related services.'';
       (4) by redesignating subsection (c) as subsection (e); and
       (5) by inserting after subsection (b), as amended by 
     paragraphs (1) and (2), the following:
       ``(c) Notification of Final Charges.--If the final charges 
     for a shipment of household goods exceed 100 percent of a 
     binding estimate or 110 percent of a nonbinding estimate, the 
     motor carrier shall provide the shipper an itemized statement 
     of the charges. The statement shall be provided to the 
     shipper within 24 hours prior to the delivery of the shipment 
     unless the shipper waives this requirement or the shipper 
     cannot be reached by fax, regular mail, or electronic mail. 
     Such notification shall--
       ``(1) be delivered in writing at the motor carrier's 
     expense; and
       ``(2) disclose the requirements of section 13707(b)(3) of 
     this title regarding payment for delivery of a shipment of 
     household goods.
       ``(d) Requirement for Inventory.--A motor carrier providing 
     transportation of a shipment of household goods, as defined 
     in section 13102(10), that is subject to jurisdiction under 
     subchapter I of chapter 135 of this title shall, before or at 
     the time of loading the shipment, prepare a written inventory 
     of all articles tendered and accepted by the motor carrier 
     for transportation. Such inventory shall--
       ``(1) list or otherwise reasonably identify each item 
     tendered for transportation;
       ``(2) be signed by the shipper and the motor carrier, or 
     the agent of the shipper or carrier, at the time the shipment 
     is loaded and at the time the shipment is unloaded at the 
     final destination;
       ``(3) be attached to, and considered part of, the bill of 
     lading; and
       ``(4) be subject to the same requirements of the Secretary 
     for record inspection and preservation that apply to bills of 
     lading.''.

     SEC. 4306. LIABILITY OF CARRIERS UNDER RECEIPTS AND BILLS OF 
                   LADING.

       Section 14706(f) is amended--
       (1) by resetting the text as a paragraph indented 2 ems 
     from the left margin and inserting ``(1) In general.--'' 
     before ``A carrier''; and
       (2) by adding at the end, the following:
       ``(2) Full value protection obligation.--Unless the carrier 
     receives a waiver in writing under paragraph (3), a carrier's 
     maximum liability for household goods that are lost, damaged, 
     destroyed, or otherwise not delivered to the final 
     destination is an amount equal to the replacement value of 
     such goods, subject to a maximum amount equal to the declared 
     value of the shipment, subject to rules issued by the Surface 
     Transportation Board and applicable tariffs.
       ``(3) Application of rates.--The released rates established 
     by the Board under paragraph (1) (commonly known as `released 
     rates') shall not apply to the transportation of household 
     goods by a carrier unless the liability of the carrier for 
     the full value of such household goods under paragraph (2) is 
     waived in writing by the shipper.''.

     SEC. 4307. DISPUTE SETTLEMENT FOR SHIPMENTS OF HOUSEHOLD 
                   GOODS.

       (a) In General.--Section 14708(a) is amended--
       (1) by resetting the text as a paragraph indented 2 ems 
     from the left margin and inserting ``(1) Requirement to 
     offer.--'' before ``As a condition''; and
       (2) by striking ``shippers of household goods concerning 
     damage or loss to the household goods transported.'' and 
     inserting ``shippers. The carrier may not require the shipper 
     to agree to use arbitration as a means to settle such a 
     dispute.''; and
       (3) by inserting at the end, the following:
       ``(2) Requirements for carriers.--If a dispute with a 
     carrier providing transportation of household goods involves 
     a claim that is--
       ``(A) not more than $10,000 and the shipper requests 
     arbitration, such arbitration shall be binding on the 
     parties; or
       ``(B) for more than $10,000 and the shipper requests 
     arbitration, such arbitration shall be binding on the parties 
     only if the carrier agrees to arbitration.''.
       (b) Arbitration Requirements.--
       (1) In general.--Section 14708(b) is amended--
       (A) by striking paragraph (4) and inserting the following:

[[Page 10927]]

       ``(4) Independence of arbitrator.--The Secretary shall 
     establish a system for the certification of persons 
     authorized to arbitrate or otherwise settle a dispute between 
     a shipper of household goods and a carrier. The Secretary 
     shall ensure that each person so certified is--
       ``(A) independent of the parties to the dispute;
       ``(B) capable, as determined under such regulations as the 
     Secretary may issue, to resolve such disputes fairly and 
     expeditiously; and
       ``(C) authorized and able to obtain from the shipper or 
     carrier any material and relevant information to the extent 
     necessary to carry out a fair and expeditious decisionmaking 
     process.'';
       (B) by striking paragraph (6); and
       (C) by redesignating paragraphs (7) and (8) as paragraphs 
     (6) and (7), respectively.
       (2) Conforming amendment.--Section 14708(d)(3)(A) is 
     amended by striking ``(b)(8)'' and inserting ``(b)(7)''.
       (c) Attorney's Fees to Carriers.--Section 14708(e) is 
     further amended by striking ``only if'' and all that follows 
     through the period at the end and inserting ``if--
       ``(1) the court proceeding is to enforce a decision 
     rendered in favor of the carrier through arbitration under 
     this section and is instituted after the shipper has a 
     reasonable opportunity to pay any charges required by such 
     decision; or
       ``(2) the shipper brought such action in bad faith--
       ``(A) after resolution of such dispute through arbitration 
     under this section; or
       ``(B) after institution of an arbitration proceeding by the 
     shipper to resolve such dispute under this section but 
     before--
       ``(i) the period provided under subsection (b)(7) for 
     resolution of such dispute (including, if applicable, an 
     extension of such period under such subsection) ends; and
       ``(ii) a decision resolving such dispute is rendered.''.
       (d) Review and Report on Dispute Settlement Programs.--
       (1) Review and report.--Not later than 18 months after the 
     date of enactment of this Act, the Secretary of 
     Transportation shall complete a review of the outcomes and 
     the effectiveness of the programs carried out under title 49, 
     United States Code, to settle disputes between motor carriers 
     and shippers and submit a report on the review to the Senate 
     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Transportation and 
     Infrastructure. The report shall describe--
       (A) the subject of, and amounts at issue is, the disputes;
       (B) patterns in disputes or settlements;
       (C) the prevailing party in disputes, if identifiable; and
       (D) any other matters the Secretary considers appropriate.
       (2) Requirement for public comment.--The Secretary shall 
     publish notice of the review required by paragraph (1) and 
     provide an opportunity for the public to submit comments on 
     the effectiveness of such programs. Notwithstanding any 
     confidentiality or non-disclosure provision in a settlement 
     agreement between a motor carrier and a shipper, it shall not 
     be a violation of that provision for a motor carrier or 
     shipper to submit a copy of the settlement agreement, or to 
     provide information included in the agreement, to the 
     Secretary for use in evaluating dispute settlement programs 
     under this subsection. Notwithstanding anything to the 
     contrary in section 552 of title 5, United States Code, the 
     Secretary may not post on the Department of Transportation's 
     electronic docket system, or make available to any requester 
     in paper or electronic format, any information submitted to 
     the Secretary by a motor carrier or shipper under the 
     preceding sentence. The Secretary shall use the settlement 
     agreements or other information submitted by a motor carrier 
     or shipper solely to evaluate the effectiveness of dispute 
     settlement programs and shall not include in the report 
     required by this subsection the names or, or other 
     identifying information concerning, motor carriers or 
     shippers that submitted comments or information under this 
     subsection.

     SEC. 4308. ENFORCEMENT OF REGULATIONS RELATED TO 
                   TRANSPORTATION OF HOUSEHOLD GOODS.

       (a) Nonpreemption of Intrastate Transportation of Household 
     Goods.--Section 14501(c)(2)(B) is amended by inserting 
     ``intrastate'' before ``transportation''.
       (b) Enforcement of Federal Law With Respect to Interstate 
     Household Goods Carriers.--
       (1) In general.--Chapter 147 is amended by adding at the 
     end the following:

     ``Sec. 14710. Enforcement of Federal laws and regulations 
       with respect to transportation of household goods

       ``(a) Enforcement by States.--Notwithstanding any other 
     provision of this title, a State authority may enforce the 
     consumer protection provisions, as determined by the 
     Secretary of Transportation, of this title that are related 
     to the transportation of household goods in interstate 
     commerce. Any fine or penalty imposed on a carrier in a 
     proceeding under this subsection shall, notwithstanding any 
     provision of law to the contrary, be paid to and retained by 
     the State.
       ``(b) State Authority Defined.--The term `State authority' 
     means an agency of a State that has authority under the laws 
     of the State to regulate the intrastate movement of household 
     goods.

     ``Sec. 14711. Enforcement by State attorneys general

       ``(a) In General.--A State, as parens patriae, may bring a 
     civil action on behalf of its residents in an appropriate 
     district court of the United States to enforce the consumer 
     protection provisions, as determined by the Secretary of 
     Transportation, of this title that are related to the 
     transportation of household goods in interstate commerce, or 
     regulations or orders of the Secretary or the Board 
     thereunder, or to impose the civil penalties authorized by 
     this part or such regulation or order, whenever the attorney 
     general of the State has reason to believe that the interests 
     of the residents of the State have been or are being 
     threatened or adversely affected by a carrier or broker 
     providing transportation subject to jurisdiction under 
     subchapter I or III of chapter 135 of this title, or a 
     foreign motor carrier providing transportation registered 
     under section 13902 of this title, that is engaged in 
     household goods transportation that violates this part or a 
     regulation or order of the Secretary or Board, as applicable, 
     promulgated under this part.
       ``(b) Notice.--The State shall serve written notice to the 
     Secretary or the Board, as the case may be, of any civil 
     action under subsection (a) prior to initiating such civil 
     action. The notice shall include a copy of the complaint to 
     be filed to initiate such civil action, except that if it is 
     not feasible for the State to provide such prior notice, the 
     State shall provide such notice immediately upon instituting 
     such civil action.
       ``(c) Authority To Intervene.--Upon receiving the notice 
     required by subsection (b), the Secretary or Board may 
     intervene in such civil action and upon intervening--
       ``(1) be heard on all matters arising in such civil action; 
     and
       ``(2) file petitions for appeal of a decision in such civil 
     action.
       ``(d) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this section shall 
     prevent the attorney general of a State from exercising the 
     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(e) Venue; Service of Process.--In a civil action brought 
     under subsection (a)--
       ``(1) the venue shall be a judicial district in which--
       ``(A) the carrier, foreign motor carrier, or broker 
     operates;
       ``(B) the carrier, foreign motor carrier, or broker was 
     authorized to provide transportation at the time the 
     complaint arose; or
       ``(C) where the defendant in the civil action is found;
       ``(2) process may be served without regard to the 
     territorial limits of the district or of the State in which 
     the civil action is instituted; and
       ``(3) a person who participated with a carrier or broker in 
     an alleged violation that is being litigated in the civil 
     action may be joined in the civil action without regard to 
     the residence of the person.
       ``(f) Enforcement of State Law.--Nothing contained in this 
     section shall prohibit an authorized State official from 
     proceeding in State court to enforce a criminal statute of 
     such State.''.
       (2) Conforming amendment.--The analysis for chapter 147 is 
     amended by inserting after the item relating to section 14709 
     the following:

``14710. Enforcement of Federal laws and regulations with respect to 
              transportation of household goods.
``14711. Enforcement by State attorneys general.''.

     SEC. 4309. WORKING GROUP FOR DEVELOPMENT OF PRACTICES AND 
                   PROCEDURES TO ENHANCE FEDERAL-STATE RELATIONS.

       (a) In General.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall establish a 
     working group of State attorneys general, State authorities 
     that regulate the movement of household goods, and Federal 
     and local law enforcement officials for the purpose of 
     developing practices and procedures to enhance the Federal-
     State partnership in enforcement efforts, exchange of 
     information, and coordination of enforcement efforts with 
     respect to interstate transportation of household goods and 
     making legislative and regulatory recommendations to the 
     Secretary concerning such enforcement efforts.
       (b) Consultation.--In carrying out subsection (a), the 
     working group shall consult with industries involved in the 
     transportation of household goods, the public, and other 
     interested parties.

     SEC. 4310. CONSUMER HANDBOOK ON DOT WEBSITE.

       Within 6 months after the date of enactment of this Act, 
     the Secretary shall take such action as may be necessary to 
     ensure that the Department of Transportation publication OCE 
     100, entitled ``Your Rights and Responsibilities When You 
     Move'' required by section 375.2 of title 49, Code of Federal 
     Regulations (or any corresponding similar regulation), is 
     prominently displayed, and available in language that is 
     readily understandable by the general public, on the website 
     of the Department of Transportation.

     SEC. 4311. INFORMATION ABOUT HOUSEHOLD GOODS TRANSPORTATION 
                   ON CARRIERS' WEBSITES.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall modify the regulations contained in 
     part 375 of title 49, Code of Federal Regulations, to require 
     a motor carrier or broker that is subject to such regulations 
     and that establishes and maintains a website to prominently 
     display on the website--

[[Page 10928]]

       (1) the number assigned to the motor carrier or broker by 
     the Department of Transportation;
       (2) the OCE 100 publication referred to in section 4310; 
     and
       (3) in the case of a broker, a list of all motor carriers 
     providing transportation of household goods used by the 
     broker and a statement that the broker is not a motor carrier 
     providing transportation of household goods.

     SEC. 4312. CONSUMER COMPLAINTS.

       (a) Requirement for Database.--Subchapter II of chapter 141 
     is amended by adding at the end the following:

     ``Sec. 14124. Consumer complaints

       ``(a) Establishment of System and Database.--The Secretary 
     of Transportation shall--
       ``(1) establish a system to--
       ``(A) file and log a complaint made by a shipper that 
     relates to motor carrier transportation of household goods; 
     and
       ``(B) to solicit information gathered by a State regarding 
     the number and type of complaints involving the interstate 
     transportation of household goods;
       ``(2) establish a database of such complaints; and
       ``(3) develop a procedure--
       ``(A) to provide the public access to the database;
       ``(B) to forward a complaint, including the motor carrier 
     bill of lading number related to the complaint to a motor 
     carrier named in such complaint and to an appropriate State 
     authority (as defined in section 14710(c) in the State in 
     which the complainant resides; and
       ``(C) to permit a motor carrier to challenge information in 
     the database.
       ``(b) Requirement for Annual Reports.--The Secretary shall 
     issue regulations requiring a motor carrier that provides 
     transportation of household goods to submit to the Secretary, 
     not later than March 31st of each year, an annual report 
     covering the 12-month period ending on the preceding March 
     31st that includes--
       ``(1) the number of interstate shipments of household goods 
     that the motor carrier received from shippers and that were 
     delivered to a final destination during the preceding 
     calendar year;
       ``(2) the number and general category of complaints lodged 
     against the motor carrier during the preceding calendar year;
       ``(3) the number of shipments described in paragraph (1) 
     that resulted in the filing of a claim against the motor 
     carrier for loss or damage to the shipment for an amount in 
     excess of $500 during the preceding calendar year; and
       ``(4) the number of shipments described in paragraph (3) 
     that were--
       ``(A) resolved during the preceding calendar year; or
       ``(B) pending on the last day of the preceding calendar 
     year.
       ``(c) Summary to Congress.--The Secretary shall transmit a 
     summary each year of the complaints filed and logged under 
     subsection (a) for the preceding calendar year to the Senate 
     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Transportation and 
     Infrastructure.''.
       (b) Conforming Amendment.--The analysis for chapter 141 is 
     amended by inserting after the item relating to section 14123 
     the following:

``14124. Consumer complaints.''.

     SEC. 4313. REVIEW OF LIABILITY OF CARRIERS.

       (a) Review.--Not later than 1 year after the date of 
     enactment of this Act, the Surface Transportation Board shall 
     complete a review of the current Federal regulations 
     regarding the level of liability protection provided by motor 
     carriers that provide transportation of household goods and 
     revise such regulations, if necessary, to provide enhanced 
     protection in the case of loss or damage.
       (b) Determinations.--The review required by subsection (a) 
     shall include a determination of--
       (1) whether the current regulations provide adequate 
     protection;
       (2) the benefits of purchase by a shipper of insurance to 
     supplement the carrier's limitations on liability;
       (3) whether there are abuses of the current regulations 
     that leave the shipper unprotected in the event of loss and 
     damage to a shipment of household goods; and
       (4) whether the section 14706 of title 49, United States 
     Code, should be modified or repealed.

     SEC. 4314. CIVIL PENALTIES RELATING TO HOUSEHOLD GOODS 
                   BROKERS.

       Section 14901(d) is amended--
       (1) by resetting the text as a paragraph indented 2 ems 
     from the left margin and inserting ``(1) In general.--'' 
     before ``If a carrier''; and
       (2) by adding at the end the following:
       ``(2) Estimate of broker without carrier agreement.--If a 
     broker for transportation of household goods subject to 
     jurisdiction under subchapter I of chapter 135 of this title 
     makes an estimate of the cost of transporting any such goods 
     before entering into an agreement with a carrier to provide 
     transportation of household goods subject to such 
     jurisdiction, the broker is liable to the United States for a 
     civil penalty of not less than $10,000 for each violation.
       ``(3) Unauthorized transportation.--If a person provides 
     transportation of household goods subject to jurisdiction 
     under subchapter I of chapter 135 this title or provides 
     broker services for such transportation without being 
     registered under chapter 139 of this title to provide such 
     transportation or services as a motor carrier or broker, as 
     the case may be, such person is liable to the United States 
     for a civil penalty of not less than $25,000 for each 
     violation.''.

     SEC. 4315. CIVIL AND CRIMINAL PENALTY FOR FAILING TO GIVE UP 
                   POSSESSION OF HOUSEHOLD GOODS.

       (a) In General.--Chapter 149 is amended by adding at the 
     end the following:

     ``Sec. 14915. Penalties for failure to give up possession of 
       household goods

       ``(a) Civil Penalty.--Whoever is found to have failed to 
     give up possession of household goods is liable to the United 
     States for a civil penalty of not less than $10,000. Each day 
     a carrier is found to have failed to give up possession of 
     household goods may constitute a separate violation. If such 
     person is a carrier or broker, the Secretary may suspend for 
     a period of not less than 6 months the registration of such 
     carrier or broker under chapter 139 of this title.
       ``(b) Criminal Penalty.--Whoever has been convicted of 
     having failed to give up possession of household goods shall 
     be fined under title 18 or imprisoned for not more than 2 
     years, or both.
       ``(c) Failure To Give Up Possession of Household Goods 
     Defined.--For purposes of this section, the term `failed to 
     give up possession of household goods' means the knowing and 
     willful failure of a motor carrier to deliver to, or unload 
     at, the destination of a shipment of household goods that is 
     subject to jurisdiction under subchapter I or III of chapter 
     135 of this title, for which charges have been estimated by 
     the motor carrier providing transportation of such goods, and 
     for which the shipper has tendered a payment described in 
     clause (i), (ii), or (iii) of section 13707(b)(3)(A) of this 
     title.''.
       (b) Conforming Amendment.--The analysis for such chapter is 
     amended by adding at the end the following:

``14915. Penalties for failure to give up possession of household 
              goods.''.

     SEC. 4316. PROGRESS REPORT.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall transmit to Congress a report on the 
     progress being made in implementing the provisions of this 
     title.

     SEC. 4317. ADDITIONAL REGISTRATION REQUIREMENTS FOR MOTOR 
                   CARRIERS OF HOUSEHOLD GOODS.

       Section 13902(a) is amended--
       (1) by striking paragraphs (2) and (3);
       (2) by redesignating paragraph (4) as paragraph (5) and 
     inserting after paragraph (1) the following:
       ``(2) Additional registration requirements for household 
     goods transportation.--Notwithstanding paragraph (1), the 
     Secretary may register a person to provide transportation of 
     household goods (as defined in section 13102(10) of this 
     title) only after that person--
       ``(A) provides evidence of participation in an arbitration 
     program and provides a copy of the notice of that program as 
     required by section 14708(b)(2) of this title;
       ``(B) identifies its tariff and provides a copy of the 
     notice of the availability of that tariff for inspection as 
     required by section 13702(c) of this title;
       ``(C) provides evidence that it has access to, has read, is 
     familiar with, and will observe all laws relating to consumer 
     protection, estimating, consumers' rights and 
     responsibilities, and options for limitations of liability 
     for loss and damage; and
       ``(D) discloses any relationship involving common stock, 
     common ownership, common management, or common familial 
     relationships between that person and any other motor 
     carrier, freight forwarder, or broker of household goods 
     within the past 3 years.
       ``(3) Consideration of evidence; findings.--The Secretary 
     shall consider, and, to the extent applicable, make findings 
     on any evidence demonstrating that the registrant is unable 
     to comply with any applicable requirement of paragraph (1) 
     or, in the case of a registrant to which paragraph (2) 
     applies, paragraph (1) or (2).
       ``(4) Withholding.--If the Secretary determines that a 
     registrant under this section does not meet, or is not able 
     to meet, any requirement of paragraph (1) or, in the case of 
     a registrant to which paragraph (2) applies, paragraph (1) or 
     (2), the Secretary shall withhold registration.''; and
       (3) by adding at the end of paragraph (5), as redesignated, 
     ``In the case of a registration for the transportation of 
     household goods (as defined in section 13102(10 of this 
     title), the Secretary may also hear a complaint on the ground 
     that the registrant fails or will fail to comply with the 
     requirements of paragraph (2) of this subsection.''.

   Subtitle D--Hazardous Materials Transportation Safety and Security

     SEC. 4401. SHORT TITLE.

       This subtitle may be cited as the ``Hazardous Material 
     Transportation Safety and Security Reauthorization Act of 
     2004''.

     SEC. 4402. AMENDMENT OF TITLE 49, UNITED STATES CODE.

       Except as otherwise expressly provided, whenever in this 
     subtitle an amendment or repeal is expressed in terms of an 
     amendment to, or 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.

  PART I--GENERAL AUTHORITIES ON TRANSPORTATION OF HAZARDOUS MATERIALS

     SEC. 4421. PURPOSE.

       The text of section 5101 is amended to read as follows:
       ``The purpose of this chapter is to protect against the 
     risks to life, property, and the environment that are 
     inherent in the transportation of hazardous material in 
     intrastate, interstate, and foreign commerce.''.

[[Page 10929]]



     SEC. 4422. DEFINITIONS.

       Section 5102 is amended as follows:
       (1) Commerce.--Paragraph (1) is amended--
       (A) by striking ``or'' after the semicolon in subparagraph 
     (A);
       (B) by striking the ``State.'' in subparagraph (B) and 
     inserting ``State; or''; and
       (C) by adding at the end the following:
       ``(C) on a United States-registered aircraft.''.
       (2) Hazmat employee.--Paragraph (3) is amended to read as 
     follows:
       ``(3) `hazmat employee' means an individual--
       ``(A) who--
       ``(i) is employed or used by a hazmat employer; or
       ``(ii) is self-employed, including an owner-operator of a 
     motor vehicle, vessel, or aircraft, transporting hazardous 
     material in commerce; and
       ``(B) who performs a function regulated by the Secretary 
     under section 5103(b)(1) of this title.''.
       (3) Hazmat employer.--Paragraph (4) is amended to read as 
     follows:
       ``(4) `hazmat employer' means a person--
       ``(A) who--
       ``(i) employs or uses at least 1 hazmat employee; or
       ``(ii) is self-employed, including an owner-operator of a 
     motor vehicle, vessel, or aircraft, transporting hazardous 
     material in commerce; and
       ``(B) who performs, or employs or uses at least 1 hazmat 
     employee to perform, a function regulated by the Secretary 
     under section 5103(b)(1) of this title.''.
       (4) Imminent hazard.--Paragraph (5) is amended by inserting 
     ``relating to hazardous material'' after ``of a condition''.
       (5) Motor carrier.--Paragraph (7) is amended to read as 
     follows:
       ``(7) `motor carrier'--
       ``(A) means a motor carrier, motor private carrier, and 
     freight forwarder as those terms are defined in section 13102 
     of this title; but
       ``(B) does not include a freight forwarder, as so defined, 
     if the freight forwarder is not performing a function 
     relating to highway transportation.''.
       (6) National response team.--Paragraph (8) is amended--
       (A) by striking ``national response team'' both places it 
     appears and inserting ``National Response Team''; and
       (B) by striking ``national contingency plan'' and inserting 
     ``National Contingency Plan''.
       (7) Person.--Paragraph (9)(A) is amended by striking 
     ``offering'' and all that follows and inserting ``that--
       ``(i) offers hazardous material for transportation in 
     commerce;
       ``(ii) transports hazardous material to further a 
     commercial enterprise; or
       ``(iii) manufactures, designs, inspects, tests, 
     reconditions, marks, or repairs a packaging or packaging 
     component that is represented as qualified for use in 
     transporting hazardous material in commerce; but''.
       (8) Secretary of transportation.--Section 5101 is further 
     amended--
       (A) by redesignating paragraphs (11), (12), and (13), as 
     paragraphs (12), (13), and (14), respectively; and
       (B) by inserting after paragraph (10) the following:
       ``(11) `Secretary' means the Secretary of Transportation 
     except as otherwise provided.''.

     SEC. 4423. GENERAL REGULATORY AUTHORITY.

       (a) Reference to Secretary of Transportation.--Section 
     5103(a) is amended by striking ``of Transportation''.
       (b) Designating Material as Hazardous.--Section 5103(a) is 
     further amended--
       (1) by striking ``etiologic agent'' and all that follows 
     through ``corrosive material,'' and inserting ``infectious 
     substance, flammable or combustible liquid, solid, or gas, 
     toxic, oxidizing, or corrosive material,''; and
       (2) by striking ``decides'' and inserting ``determines''.
       (c) Regulations for Safe Transportation.--Section 
     5103(b)(1)(A) is amended to read as follows:
       ``(A) apply to a person who--
       ``(i) transports hazardous material in commerce;
       ``(ii) causes hazardous material to be transported in 
     commerce;
       ``(iii) manufactures, designs, inspects, tests, 
     reconditions, marks, or repairs a packaging or packaging 
     component that is represented as qualified for use in 
     transporting hazardous material in commerce;
       ``(iv) prepares or accepts hazardous material for 
     transportation in commerce;
       ``(v) is responsible for the safety of transporting 
     hazardous material in commerce;
       ``(vi) certifies compliance with any requirement under this 
     chapter;
       ``(vii) misrepresents whether such person is engaged in any 
     activity under clause (i) through (vi) of this subparagraph; 
     or
       ``(viii) performs any other act or function relating to the 
     transportation of hazardous material in commerce; and''.
       (d) Technical Amendment Regarding Consultation.--Section 
     5103 is amended--
       (1) by striking subsection (b)(1)(C); and
       (2) by adding at the end the following:
       ``(c) Consultation.--When prescribing a security regulation 
     or issuing a security order that affects the safety of the 
     transportation of hazardous material, the Secretary of 
     Homeland Security shall consult with the Secretary of 
     Transportation.''.

     SEC. 4424. LIMITATION ON ISSUANCE OF HAZMAT LICENSES.

       (a) Reference to Secretary of Transportation.--Section 
     5103a is amended by striking ``of Transportation'' each place 
     it appears in subsections (a)(1), (c)(1)(B), and (d) and 
     inserting ``of Homeland Security''.
       (b) Covered Hazardous Materials.--Section 5103a(b) is 
     amended by striking ``with respect to--'' and all that 
     follows and inserting ``with respect to any material defined 
     as hazardous material by the Secretary for which the 
     Secretary requires placarding of a commercial motor vehicle 
     transporting that material in commerce.''.
       (c) Recommendations on Chemical or Biological Materials.--
     Section 5103a is further amended--
       (1) by redesignating subsections (c), (d), and (e) as 
     subsections (d), (e), and (f), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Recommendations on Chemical and Biological 
     Materials.--The Secretary of Health and Human Services shall 
     recommend to the Secretary any chemical or biological 
     material or agent for regulation as a hazardous material 
     under section 5103(a) of this title if the Secretary of 
     Health and Human Services determines that such material or 
     agent is a threat to the national security of the United 
     States.''.
       (d) Conforming Amendment.--Section 5103a(a)(1) is amended 
     by striking ``subsection (c)(1)(B),'' and inserting 
     ``subsection (d)(1)(B),''.

     SEC. 4425. REPRESENTATION AND TAMPERING.

       (a) Representation.--Section 5104(a) is amended--
       (1) by striking ``a container,'' and all that follows 
     through ``packaging) for'' and inserting ``a package, 
     component of a package, or packaging for''; and
       (2) by striking ``the container'' and all that follows 
     through ``packaging) meets'' and inserting ``the package, 
     component of a package, or packaging meets''.
       (b) Tampering.--Section 5104(b) is amended--
       (1) by inserting ``, without authorization from the owner 
     or custodian,'' after ``may not'';
       (2) by striking ``unlawfully''; and
       (3) by inserting ``component of a package, or packaging,'' 
     after ``package,'' in paragraph (2).

     SEC. 4426. TRANSPORTING CERTAIN HIGHLY RADIOACTIVE MATERIAL.

       (a) Repeal of Routes and Modes Study.--Section 5105 is 
     amended by striking subsection (d).
       (b) Repeal of Requirement for Inspections of Certain Motor 
     Vehicles.--Section 5105 is amended by striking subsection 
     (e).

     SEC. 4427. HAZMAT EMPLOYEE TRAINING REQUIREMENTS AND GRANTS.

       (a) Reference to Secretary of Transportation.--Section 5107 
     is amended by striking ``of Transportation'' each place it 
     appears in subsections (a), (b), (c) (other than in paragraph 
     (1)), (d), and (f).
       (b) Training Grants.--Section 5107(e) is amended--
       (1) by striking ``section 5127(c)(3)'' and inserting 
     ``section 5128(b)(1) of this title'';
       (2) by inserting ``and, to the extent determined 
     appropriate by the Secretary, grants for such instructors to 
     train hazmat employees'' after ``employees'' in the first 
     sentence thereof.

     SEC. 4428. REGISTRATION.

       (a) Reference to Secretary of Transportation.--Section 5108 
     is amended by striking ``of Transportation'' each place it 
     appears in subsections (a), (b) (other than following 
     ``Department''), (d), (e), (f), (g), (h), and (i).
       (b) Persons Required To File.--
       (1) Requirement to file.--Section 5108(a)(1)(B) is amended 
     by striking ``class A or B explosive'' and inserting 
     ``Division 1.1, 1.2, or 1.3 explosive material''.
       (2) Authority to require to file.--Section 5108(a)(2)(B) is 
     amended to read as follows:
       ``(B) a person manufacturing, designing, inspecting, 
     testing, reconditioning, marking, or repairing a package or 
     packaging component that is represented as qualified for use 
     in transporting hazardous material in commerce.''.
       (3) No transportation without filing.--Section 5108(a)(3) 
     is amended by striking ``fabricate,'' and all that follows 
     through ``package or'' and inserting ``design, inspect, test, 
     recondition, mark, or repair a package, packaging component, 
     or''.
       (c) Form and Content of Filings.--Section 5108(b)(1)(C) by 
     striking ``the activity.'' and inserting ``any of the 
     activities.''.
       (d) Filing.--Section 5108(c) is amended to read as follows:
       ``(c) Filing.--Each person required to file a registration 
     statement under subsection (a) of this section shall file the 
     statement in accordance with regulations prescribed by the 
     Secretary.''.
       (e) Fees.--Section 5108(g)(1) is amended by striking ``may 
     establish,'' and inserting ``shall establish,''.
       (f) Relationship to Other Laws.--Section 5108(i)(2)(B) is 
     amended by inserting ``an Indian tribe,'' after ``subdivision 
     of a State,''.
       (g) Registration and Annual Fees.--
       (1) Reduction in cap.--Section 5108(g)(2)(A) is amended by 
     striking ``$5,000'' and inserting ``$2,000''.
       (2) Rulemaking.--Any rule, regulation, or order issued by 
     the Secretary of Transportation under which the assessment, 
     payment, or collection of fees under section 5108(g) of title 
     49, United States Code, was suspended or terminated before 
     the date of enactment of this Act is declared null and void 
     effective 30 days after such date of enactment. Beginning on 
     the 31st day after such date of enactment, the fee schedule 
     established by the Secretary and set forth at

[[Page 10930]]

     65 Federal Register 7297 (as modified by the rule set forth 
     at 67 Federal Register 58343) shall take effect and apply 
     until such time as it may be modified by a rulemaking 
     proceeding.
       (3) Planning and training grants.--Notwithstanding any 
     other provision of law to the contrary, including any 
     limitation on the amount of grants authorized by section 5116 
     of title 49, United States Code, not contained in that 
     section, the Secretary shall make grants under that section 
     from the account established under section 5116(i) to reduce 
     the balance in that account over the 6 fiscal year period 
     beginning with fiscal year 2004, but in no fiscal year shall 
     the grants distributed exceed the level authorized by section 
     5116 of title 49, United States Code.

     SEC. 4429. SHIPPING PAPERS AND DISCLOSURE.

       (a) Reference to Secretary of Transportation.--Section 
     5110(a) is amended by striking ``of Transportation''.
       (b) Disclosure Considerations and Requirements.--Section 
     5110 is amended--
       (1) by striking ``under subsection (b) of this section.'' 
     in subsection (a) and inserting ``in regulations.'';
       (2) by striking subsection (b); and
       (3) by redesignating subsections (c), (d), and (e) as 
     subsections (b), (c), and (d), respectively.
       (c) Retention of Papers.--The first sentence of section 
     5110(d), as redesignated by subsection (b)(3) of this 
     section, is amended to read as follows: ``The person who 
     provides the shipping paper, and the carrier required to keep 
     it, under this section shall retain the paper, or an 
     electronic format of it, for a period of 3 years after the 
     date the shipping paper is provided to the carrier, with the 
     paper and format to be accessible through their respective 
     principal places of business.''.

     SEC. 4430. RAIL TANK CARS.

       (a) Repeal of Requirements.--Section 5111 is repealed.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     51 is amended by striking the item relating to section 5111.

     SEC. 4431. HIGHWAY ROUTING OF HAZARDOUS MATERIAL.

       The second sentence of section 5112(a)(1) is amended by 
     striking ``However, the Secretary of Transportation'' and 
     inserting ``The Secretary''.

     SEC. 4432. UNSATISFACTORY SAFETY RATINGS.

       (a) In General.--The text of section 5113 is amended to 
     read as follows:
       ``A violation of section 31144(c)(3) of this title shall be 
     considered a violation of this chapter, and shall be subject 
     to the penalties in sections 5123 and 5124 of this title.''.
       (b) Conforming Amendments.--The first subsection (c) of 
     section 31144 is amended--
       (1) by striking ``sections 521(b)(5)(A) and 5113'' in 
     paragraph (1) and inserting ``section 521(b)(5)(A) of this 
     title''; and
       (2) by adding at the end of paragraph (3) ``A violation of 
     this paragraph by an owner or operator transporting hazardous 
     material shall be considered a violation of chapter 51 of 
     this title, and shall be subject to the penalties in sections 
     5123 and 5124 of this title.''.

     SEC. 4433. AIR TRANSPORTATION OF IONIZING RADIATION MATERIAL.

       Section 5114(b) is amended by striking ``of 
     Transportation''.

     SEC. 4434. TRAINING CURRICULUM FOR THE PUBLIC SECTOR.

       (a) In General.--Section 5115(a) is amended to read as 
     follows:
       ``(a) In General.--In coordination with the Director of the 
     Federal Emergency Management Agency, the Chairman of the 
     Nuclear Regulatory Commission, the Administrator of the 
     Environmental Protection Agency, the Secretaries of Labor, 
     Energy, and Health and Human Services, and the Director of 
     the National Institute of Environmental Health Sciences, and 
     using existing coordinating mechanisms of the National 
     Response Team and, for radioactive material, the Federal 
     Radiological Preparedness Coordinating Committee, the 
     Secretary shall maintain a current curriculum of lists of 
     courses necessary to train public sector emergency response 
     and preparedness teams in matters relating to the 
     transportation of hazardous material.''.
       (b) Requirements.--Section 5115(b) is amended--
       (1) by striking ``developed'' in the matter preceding 
     paragraph (1) and inserting ``maintained''; and
       (2) by striking ``under other United States Government 
     grant programs'' in paragraph (1)(C) and all that follows and 
     inserting ``with Federal assistance; and''.
       (c) Training on Compliance With Legal Requirements.--
     Section 5115(c)(3) is amended by striking ``Association.'' 
     and inserting ``Association or by any other voluntary 
     organization establishing consensus-based standards that the 
     Secretary considers appropriate.''.
       (d) Distribution and Publication.--Section 5115(d) is 
     amended--
       (1) by striking ``national response team--'' and inserting 
     ``National Response Team--''; and
       (2) by striking ``publish a list'' in paragraph (2) and all 
     that follows and inserting ``publish and distribute the list 
     of courses maintained under this section, and of any programs 
     utilizing such courses.''.

     SEC. 4435. PLANNING AND TRAINING GRANTS; EMERGENCY 
                   PREPAREDNESS FUND.

       (a) Reference to Secretary of Transportation.--Section 5116 
     is amended by striking ``of Transportation'' each place it 
     appears in subsections (a), (b), (c), (d), (g), and (i).
       (b) Government Share of Costs.--Section 5116(e) is amended 
     by striking the second sentence.
       (c) Monitoring and Technical Assistance.--Section 5116(f) 
     is amended by striking ``national response team'' and 
     inserting ``National Response Team''.
       (d) Delegation of Authority.--Section 5116(g) is amended by 
     striking ``Government grant programs'' and inserting 
     ``Federal financial assistance programs''.
       (e) Emergency Preparedness Fund.--
       (1) Name of fund.--Section 5116(i) is amended by inserting 
     after ``an account'' the following: ``(to be known as the 
     `Emergency Preparedness Fund')''.
       (2) Publication of emergency response guide.--Section 
     5116(i) is further amended--
       (A) by striking ``collects under section 5108(g)(2)(A) of 
     this title and'';
       (B) by striking ``and'' after the semicolon in paragraph 
     (2);
       (C) by redesignating paragraph (3) as paragraph (4); and
       (D) by inserting after paragraph (2) the following:
       ``(3) to publish and distribute an emergency response 
     guide; and''.
       (3) Conforming amendment.--Section 5108(g)(2)(C) is amended 
     by striking ``the account the Secretary of the Treasury 
     establishes'' and inserting ``the Emergency Response Fund 
     established''.
       (f) Reports.--Section 5116(k) is amended--
       (1) by striking the first sentence and inserting ``The 
     Secretary shall make available to the public annually 
     information on the allocation and uses of planning grants 
     under subsection (a), training grants under subsection (b), 
     and grants under subsection (j) of this section and under 
     section 5107 of this title.''; and
       (2) by striking ``Such report'' in the second sentence and 
     inserting ``The information''.

     SEC. 4436. SPECIAL PERMITS AND EXCLUSIONS.

       (a) Special Permits and Exclusions.--
       (1) In general.--Section 5117(a)(1) is amended by striking 
     ``the Secretary of Transportation may issue'' and all that 
     follows through ``in a way'' and inserting ``the Secretary 
     may issue, modify, or terminate a special permit authorizing 
     variances from this chapter, or a regulation prescribed under 
     section 5103(b), 5104, 5110, or 5112 of this title, to a 
     person performing a function regulated by the Secretary under 
     section 5103(b)(1) of this title in a way''.
       (2) Duration.--Section 5117(a)(2) is amended to read as 
     follows:
       ``(2) A special permit under this subsection--
       ``(A) shall be effective when first issued for not more 
     than 2 years; and
       ``(B) may be renewed for successive periods of not more 
     than 4 years each.''.
       (b) References to Special Permits.--Section 5117 is further 
     amended--
       (1) by striking ``an exemption'' each place it appears and 
     inserting ``a special permit''; and
       (2) by striking ``the exemption'' each place it appears and 
     inserting ``the special permit''.
       (c) Conforming and Clerical Amendments.--
       (1) Conforming amendment.--The heading of section 5117 is 
     amended to read as follows:

     ``Sec. 5117. Special permits and exclusions''

       (2) Clerical amendment.--The chapter analysis for chapter 
     51 is amended by striking the item relating to section 5117 
     and inserting the following:

``5117. Special permits and exclusions.''.

       (d) Repeal of Section 5118.--
       (1) Section 5118 is repealed.
       (2) The chapter analysis for chapter 51 is amended by 
     striking the item relating to section 5118 and inserting the 
     following:

``5118. Repealed.''.

     SEC. 4437. UNIFORM FORMS AND PROCEDURES.

       The text of section 5119 is amended to read as follows:
       ``(a) In General.--The Secretary may prescribe regulations 
     to establish uniform forms and regulations for States on the 
     following:
       ``(1) To register and issue permits to persons that 
     transport or cause to be transported hazardous material by 
     motor vehicles in a State.
       ``(2) To permit the transportation of hazardous material in 
     a State.
       ``(b) Uniformity in Forms and Procedures.--In prescribing 
     regulations under subsection (a) of this section, the 
     Secretary shall develop procedures to eliminate discrepancies 
     among the States in carrying out the activities covered by 
     the regulations.
       ``(c) Limitation.--The regulations prescribed under 
     subsection (a) of this section may not define or limit the 
     amount of any fees imposed or collected by a State for any 
     activities covered by the regulations.
       ``(d) Effective Date.--
       ``(1) In general.--Except as provided in paragraph (2) of 
     this subsection, the regulations prescribed under subsection 
     (a) of this section shall take effect 1 year after the date 
     on which prescribed.
       ``(2) Extension.--The Secretary may extend the 1-year 
     period in subsection (a) for an additional year for good 
     cause.
       ``(e) State Regulations.--After the regulations prescribed 
     under subsection (a) of this section take effect under 
     subsection (d) of this section, a State may establish, 
     maintain, or enforce a requirement relating to the same 
     subject matter only if the requirement is consistent with 
     applicable requirements with respect to such activity in the 
     regulations.
       ``(f) Interim State Programs.--Pending the prescription of 
     regulations under subsection (a) of this section, States may 
     participate in the program of uniform forms and procedures 
     recommended by the Alliance for Uniform Hazmat Transportation 
     Procedures.''.

[[Page 10931]]



     SEC. 4438. INTERNATIONAL UNIFORMITY OF STANDARDS AND 
                   REQUIREMENTS.

       Section 5120 is amended by striking ``of Transportation'' 
     each place it appears in subsections (a), (b), and (c)(1).

     SEC. 4439. HAZARDOUS MATERIALS TRANSPORTATION SAFETY AND 
                   SECURITY.

       The text of section 5121 is amended to read as follows:
       ``(a) General Authority.--
       ``(1) To carry out this chapter, the Secretary may 
     investigate, conduct tests, make reports, issue subpoenas, 
     conduct hearings, require the production of records and 
     property, take depositions, and conduct research, 
     development, demonstration, and training activities.
       ``(2) Except as provided in subsections (c) and (d) of this 
     section, the Secretary shall provide notice and an 
     opportunity for a hearing before issuing an order directing 
     compliance with this chapter, a regulation prescribed under 
     this chapter, or an order, special permit, or approval issued 
     under this chapter.
       ``(b) Records, Reports, Property, and Information.--A 
     person subject to this chapter shall--
       ``(1) maintain records, make reports, and provide property 
     and information that the Secretary by regulation or order 
     requires; and
       ``(2) make the records, reports, property, and information 
     available for inspection when the Secretary undertakes an 
     inspection or investigation.
       ``(c) Inspections and Investigations.--
       ``(1) A designated officer or employee of the Secretary 
     may--
       ``(A) inspect and investigate, at a reasonable time and in 
     a reasonable way, records and property relating to a function 
     described in section 5103(b)(1) of this title;
       ``(B) except for packaging immediately adjacent to the 
     hazardous material contents, gain access to, open, and 
     examine a package offered for or in transportation when the 
     officer or employees has an objectively reasonable and 
     articulable belief that the package may contain hazardous 
     material;
       ``(C) remove from transportation a package or related 
     packages in a shipment offered for or in transportation for 
     which--
       ``(i) such officer or employee has an objectively 
     reasonable and articulable belief that the package may pose 
     an imminent hazard; and
       ``(ii) such officer or employee contemporaneously documents 
     such belief in accordance with procedures set forth in 
     regulations prescribed under subsection (e) of this section;
       ``(D) gather information from the offeror, carrier, 
     packaging manufacturer or retester, or other person 
     responsible for a package or packages to ascertain the nature 
     and hazards of the contents of the package or packages;
       ``(E) as necessary under terms and conditions prescribed by 
     the Secretary, order the offeror, carrier, or other person 
     responsible for a package or packages to have the package or 
     packages transported to an appropriate facility, opened, 
     examined, and analyzed; and
       ``(F) when safety might otherwise be compromised, authorize 
     properly qualified personnel to assist in activities carried 
     out under this paragraph.
       ``(2) An officer or employee acting under the authority of 
     the Secretary under this subsection shall display proper 
     credentials when requested.
       ``(3) In instances when, as a result of an inspection or 
     investigation under this subsection, an imminent hazards is 
     not found to exist, the Secretary shall, in accordance with 
     procedures set forth in regulations prescribed under 
     subsection (e) of this section, assist the safe resumption of 
     transportation of the package, packages, or transport unit 
     concerned.
       ``(d) Emergency Orders.--
       ``(1) If, upon inspection, investigation, testing, or 
     research, the Secretary determines that a violation of a 
     provision of this chapter, or a regulation prescribed under 
     this chapter, or an unsafe condition or practice, constitutes 
     or is causing an imminent hazard, the Secretary may issue or 
     impose emergency restrictions, prohibitions, recalls, or out-
     of-service orders, without notice or an opportunity for a 
     hearing, but only to the extent necessary to abate the 
     imminent hazard.
       ``(2) The action of the Secretary under paragraph (1) of 
     this subsection shall be in a written emergency order that--
       ``(A) describes the violation, condition, or practice that 
     constitutes or is causing the imminent hazard;
       ``(B) states the restrictions, prohibitions, recalls, or 
     out-of-service orders issued or imposed; and
       ``(C) describe the standards and procedures for obtaining 
     relief from the order.
       ``(3) After taking action under paragraph (1) of this 
     subsection, the Secretary shall provide for review of the 
     action under section 554 of title 5 if a petition for review 
     is filed within 20 calendar days of the issuance of the order 
     for the action.
       ``(4) If a petition for review of an action is filed under 
     paragraph (3) of this subsection and the review under that 
     paragraph is not completed by the end of the 30-day period 
     beginning on the date the petition is filed, the action shall 
     cease to be effective at the end of such period unless the 
     Secretary determines, in writing, that the imminent hazard 
     providing a basis for the action continues to exist.
       ``(5) In this subsection, the term `out-of-service order' 
     means a requirement that an aircraft, vessel, motor vehicle, 
     train, railcar, locomotive, other vehicle, transport unit, 
     transport vehicle, freight container, potable tank, or other 
     package not be moved until specified conditions have been 
     met.
       ``(e) Regulations.--The Secretary shall prescribe in 
     accordance with section 553 of title 5 regulations to carry 
     out the authority in subsections (c) and (d) of this section.
       ``(f) Facility, Staff, and Reporting System on Risks, 
     Emergencies, and Actions.--
       ``(1) The Secretary shall--
       ``(A) maintain a facility and technical staff sufficient to 
     provide, within the United States Government, the capability 
     of evaluating a risk relating to the transportation of 
     hazardous material and material alleged to be hazardous;
       ``(B) maintain a central reporting system and information 
     center capable of providing information and advice to law 
     enforcement and firefighting personnel, and other interested 
     individuals, and officers and employees of the United States 
     Government and State and local governments on meeting an 
     emergency relating to the transportation of hazardous 
     material; and
       ``(C) conduct a continuous review on all aspects of 
     transporting hazardous material to decide on and take 
     appropriate actions to ensure safe transportation of 
     hazardous material.
       ``(2) Paragraph (1) of this subsection shall not prevent 
     the Secretary from making a contract with a private entity 
     for use of a supplemental reporting system and information 
     center operated and maintained by the contractor.
       ``(g) Grants, Cooperative Agreements, and Other 
     Transactions.--The Secretary may enter into grants, 
     cooperative agreements, and other transactions with a person, 
     agency, or instrumentality of the United States, a unit of 
     State or local government, an Indian tribe, a foreign 
     government (in coordination with the Department of State), an 
     educational institution, or other appropriate entity--
       ``(1) to expand risk assessment and emergency response 
     capabilities with respect to the security of transportation 
     of hazardous material;
       ``(2) to conduct research, development, demonstration, risk 
     assessment and emergency response planning and training 
     activities; or
       ``(3) to otherwise carry out this chapter.
       ``(h) Reports.--
       ``(1) The Secretary shall, once every 2 years, submit to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure a comprehensive report on the 
     transportation of hazardous material during the preceding 2 
     calendar years. Each report shall include, for the period 
     covered by such report--
       ``(A) a statistical compilation of the accidents, 
     incidents, and casualties related to the transportation of 
     hazardous material during such period;
       ``(B) a list and summary of applicable Government 
     regulations, criteria, orders, and special permits;
       ``(C) a summary of the basis for each special permit 
     issued;
       ``(D) an evaluation of the effectiveness of enforcement 
     activities relating to the transportation of hazardous 
     material during such period, and of the degree of voluntary 
     compliance with regulations;
       ``(E) a summary of outstanding problems in carrying out 
     this chapter, set forth in order of priority; and
       ``(F) any recommendations for legislative or administrative 
     action that the Secretary considers appropriate.
       ``(2) Before December 31, 2005, and every 3 years 
     thereafter, the Secretary, through the Bureau of 
     Transportation Statistics and in consultation with other 
     Federal departments and agencies, shall submit a report to 
     the Senate Committee on Commerce, Science, and Transportation 
     and the House of Representatives Committee on Transportation 
     and Infrastructure on the transportation of hazardous 
     material in all modes of transportation during the preceding 
     3 calendar years. Each report shall include, for the period 
     covered by such report--
       ``(A) a summary of the hazardous material shipments, 
     deliveries, and movements during such period, set forth by 
     hazardous materials type, by tonnage and ton-miles, and by 
     mode, both domestically and across United States borders; and
       ``(B) a summary of shipment estimates during such period as 
     a proxy for risk.
       ``(i) Security Sensitive Information.--
       ``(1) If the Secretary determines that particular 
     information may reveal a vulnerability of a hazardous 
     material to attack during transportation in commerce, or may 
     facilitate the diversion of hazardous material during 
     transportation in commerce for use in an attack on people or 
     property, the Secretary may disclose such information only--
       ``(A) to the owner, custodian, offeror, or carrier of such 
     hazardous material;
       ``(B) to an officer, employee, or agent of the United 
     States Government, or a State or local government, including 
     volunteer fire departments, concerned with carrying out 
     transportation safety laws, protecting hazardous material in 
     the course of transportation in commerce, protecting public 
     safety or national security, or enforcing Federal law 
     designed to protect public health or the environment; or
       ``(C) in an administrative or judicial proceeding brought 
     under this chapter, under other Federal law intended to 
     protect public health or the environment, or under other 
     Federal law intended to address terrorist actions or threats 
     of terrorist actions.
       ``(2) The Secretary may make determinations under paragraph 
     (1) of this subsection with respect categories of information 
     in accordance with regulations prescribed by the Secretary.

[[Page 10932]]

       ``(3) A release of information pursuant to a determination 
     under paragraph (1) of this subsection shall not be treated 
     as a release of such information to the public for purposes 
     of section 552 of title 5.''.

     SEC. 4440. ENFORCEMENT.

       (a) Reference to Secretary of Transportation.--Section 
     5122(a) is amended by striking ``of Transportation''.
       (b) General.--Section 5122(a) is further amended--
       (1) by striking ``chapter or a regulation prescribed or 
     order''in the first sentence and inserting ``chapter, a 
     regulation prescribed under this chapter, or an order, 
     special permit, or approval''; and
       (2) by striking the second sentence and inserting ``In an 
     action under this subsection, the court may award appropriate 
     relief, including a temporary or permanent injunction, civil 
     penalties under section 5123 of this title, and punitive 
     damages.''.
       (c) Imminent Hazards.--Section 5122(b)(1)(B) is amended by 
     striking ``ameliorate'' and inserting ``mitigate''.

     SEC. 4441. CIVIL PENALTIES.

       (a) Reference to Secretary of Transportation.--Section 
     5123(b) is amended by striking ``of Transportation''.
       (b) Penalty.--Section 5123(a)(1) is amended--
       (1) by striking ``chapter or a regulation prescribed or 
     order'' and inserting ``chapter, a regulation prescribed 
     under this chapter, or an order, special permit, or 
     approval''; and
       (2) by striking ``$25,000'' and inserting ``$100,000''.
       (c) Hearing Requirement.--Section 5123(b) is amended by 
     striking ``chapter or a regulation prescribed'' and inserting 
     ``chapter, a regulation prescribed under this chapter, or an 
     order, special permit, or approval issued''.
       (d) Civil Actions To Collect.--Section 5123(d) is amended 
     by striking ``section.'' and inserting ``section and any 
     accrued interest on the civil penalty as calculated in 
     accordance with section 1005 of the Oil Pollution Act of 1990 
     (33 U.S.C. 2705). In the civil action, the amount and 
     appropriateness of the civil penalty shall not be subject to 
     review.''.
       (e) Effective Date.--(1) The amendments made by subsections 
     (b) and (c) of this section shall take effect on the date of 
     the enactment of this Act, and shall apply with respect to 
     violations described in section 5123(a) of title 49, United 
     States Code (as amended by this section), that occur on or 
     after that date.
       (2) The amendment made by subsection (d) of this section 
     shall apply with respect to civil penalties imposed on 
     violations described in section 5123(a) of title 49, United 
     States Code (as amended by this section), which violations 
     occur on or after the date of the enactment of this Act.

     SEC. 4442. CRIMINAL PENALTIES.

       (a) In General.--Section 5124 is amended--
       (1) by inserting ``(a) In General.--'' before ``A person''; 
     and
       (2) by striking ``chapter or a regulation prescribed or 
     order'' and inserting ``chapter, a regulation prescribed 
     under this chapter, or an order, special permit, or 
     approval''.
       (b) Additional Matters.--That section is further amended by 
     adding at the end the following:
       ``(b) Aggravated Violations.--A person knowingly violating 
     section 5104(b) of this title or willfully violating this 
     chapter or a regulation prescribed, or an order, special 
     permit, or approval issued, under this chapter, who thereby 
     causes the release of hazardous material shall be fined under 
     title 18, imprisoned for not more than 20 years, or both.
       ``(c) Separate Violations.--A separate violation occurs for 
     each day the violation, committed by a person who transports 
     or causes to be transported hazardous material, continues.''.

     SEC. 4443. PREEMPTION.

       (a) Reference to Secretary of Transportation.--Section 
     5125(b)(2) is amended by striking ``of Transportation''.
       (b) Purposes.--Section 5125 is amended--
       (1) by redesignating subsections (a), (b), (c), (d), (e), 
     (f), and (g) as subsections (b), (c), (d), (e), (f), (g), and 
     (h), respectively;
       (2) by inserting before subsection (b), as so redesignated, 
     the following:
       ``(a) Purposes.--The Secretary shall exercise the authority 
     in this section--
       ``(1) to achieve uniform regulation of the transportation 
     of hazardous material;
       ``(2) to eliminate rules that are inconsistent with the 
     regulations prescribed under this chapter; and
       ``(3) to otherwise promote the safe and efficient movement 
     of hazardous material in commerce.'';
       (3) by striking subsection (g), as redesignated; and
       (4) by redesignating subsection (h), as redesignated, as 
     subsection (g).
       (c) General Preemption.--Section 5125(b), as redesignated 
     by subsection (b)(1) of this section, is further amended by 
     striking ``General.--Except as provided in subsection (b), 
     (c), and (e)'' and inserting ``Preemption Generally.--Except 
     as provided in subsections (c), (d), and (f)''.
       (d) Substantive Differences.--Section 5125(c), as so 
     redesignated, is further amended--
       (1) in the matter preceding subparagraph (A) of paragraph 
     (1), by striking ``subsection (c)'' and inserting 
     ``subsection (d)'';
       (2) by striking subparagraph (E) of paragraph (1) and 
     inserting the following:
       ``(E) the manufacturing, designing, inspecting, testing, 
     reconditioning, or repairing of a packaging or packaging 
     component that is represented as qualified for use in 
     transporting hazardous material in commerce.''; and
       (3) by striking ``prescribes after November 16, 1990. 
     However, the'' in paragraph (2) and inserting ``prescribes. 
     The''.
       (e) Decisions on Preemption.--Section 5125(e), as so 
     redesignated, is further amended by striking ``subsection 
     (a), (b)(1), or (c) of this section.'' in the first sentence 
     and inserting ``subsection (b), (c)(1), or (d) of this 
     section or section 5119(b) of this title.''.
       (f) Waiver of Preemption.--Section 5125(f), as so 
     redesignated, is further amended by striking ``subsection 
     (a), (b)(1), or (c) of this section.'' and inserting 
     ``subsection (b), (c)(1), or (d) of this section or section 
     5119(b) of this title.''.
       (g) Emergency Waiver of Preemption; Additional Matters.--
     Section 5125 is further amended--
       (1) by redesignating subsection (g), as redesignated by 
     subsection (b)(4) of this section, as subsection (j); and
       (2) by inserting after subsection (f), as redesignated by 
     subsection (b)(1) of this section, the following:
       ``(g) Emergency Waiver of Preemption.--
       ``(1) The Secretary may, upon a finding of good cause, 
     waive the preemption of a requirement of a State, political 
     subdivision of a State, or Indian tribe under this section 
     without prior notice or an opportunity for public comment 
     thereon.
       ``(2) For purposes of paragraph (1) of this subsection, 
     good cause exists when--
       ``(A) there is a potential threat that hazardous material 
     being transported in commerce may be used in an attack on 
     people or property; and
       ``(B) notice and an opportunity for public comment thereon 
     are impracticable or contrary to the public interest.
       ``(3)(A) A waiver of preemption under paragraph (1) of this 
     subsection shall be in effect for a period specified by the 
     Secretary, but not more than 6 months.
       ``(B) If the Secretary determines before the expiration of 
     a waiver of preemption under subparagraph (A) of this 
     paragraph that the potential threat providing the basis for 
     the waiver continues to exist, the Secretary may, after 
     providing notice and an opportunity for public comment 
     thereon, extend the duration of the waiver for such period 
     after the expiration of the waiver under that subparagraph as 
     the Secretary considers appropriate.
       ``(4) An action of the Secretary under paragraph (1) or (3) 
     of this subsection shall be in writing and shall set forth 
     the standards and procedures for seeking reconsideration of 
     the action.
       ``(5) After taking action under paragraph (1) or (3) of 
     this subsection, the Secretary shall provide for review of 
     the action if a petition for review of the action is filed 
     within 20 calendar days after the date of the action.
       ``(6) If a petition for review of an action is filed under 
     paragraph (5) of this subsection and review of the action is 
     not completed by the end of the 30-day period beginning on 
     the date the petition is filed, the waiver under this 
     subsection shall cease to be effective at the end of such 
     period unless the Secretary determines, in writing, that the 
     potential threat providing the basis for the waiver 
     continues.
       ``(h) Application of Each Preemption Standard.--Each 
     standard for preemption in subsection (b), (c)(1), or (d) of 
     this section, and in section 5119(b) of this title, is 
     independent in its application to a requirement of a State, 
     political subdivision of a State, or Indian tribe.
       ``(i) Non-Federal Enforcement Standards.--This section does 
     not apply to any procedure, penalty, required mental state, 
     or other standard utilized by a State, political subdivision 
     of a State, or Indian tribe to enforce a requirement 
     applicable to the transportation of hazardous material.''.

     SEC. 4444. RELATIONSHIP TO OTHER LAWS.

       Section 5126 is amended--
       (1) by striking ``or causes to be transported hazardous 
     material,'' in subsection (a) and inserting ``hazardous 
     material, or causes hazardous material to be transported,'';
       (2) by striking ``manufactures,'' and all that follows 
     through ``or sells'' in subsection (a) and inserting 
     ``manufactures, designs, inspects, tests, reconditions, 
     marks, or repairs a packaging or packaging component that is 
     represented'';
       (3) by striking ``must'' in subsection (a) and inserting 
     ``shall'';
       (4) by striking ``manufacturing,'' in subsection (a) and 
     all that follows through ``testing'' and inserting 
     ``manufacturing, designing, inspecting, testing, 
     reconditioning, marking, or repairing''; and
       (5) by striking ``39.'' in subsection (b)(2) and inserting 
     ``39, except in the case of an imminent hazard.''.

     SEC. 4445. JUDICIAL REVIEW.

       (a) In General.--Chapter 51 is amended--
       (1) by redesignating section 5127 as section 5128; and
       (2) by inserting after section 5126 the following:

     ``Sec. 5127. Judicial review

       ``(a) Filing and Venue.--Except as provided in section 
     20114(c) of this title, a person suffering legal wrong or 
     adversely affected or aggrieved by a final action of the 
     Secretary under this chapter may petition for review of the 
     final action in the United States Court of Appeals for the 
     District of Columbia or in the court of appeals of the United 
     States for the circuit in which the person or resides or has 
     the principal place of business. The petition shall be filed 
     not

[[Page 10933]]

     more than 60 days after the action of the Secretary becomes 
     final.
       ``(b) Procedures.--When a petition on a final action is 
     filed under subsection (a) of this section, the clerk of the 
     court shall immediately send a copy of the petition to the 
     Secretary. The Secretary shall file with the court a record 
     of any proceeding in which the final action was issued as 
     provided in section 2112 of title 28.
       ``(c) Authority of Court.--The court in which a petition on 
     a final action is filed under subsection (a) of this section 
     has exclusive jurisdiction, as provided in subchapter II of 
     chapter 5 of title 5 to affirm or set aside any part of the 
     final action and may order the Secretary to conduct further 
     proceedings. Findings of fact by the Secretary, if supported 
     by substantial evidence, are conclusive.
       ``(d) Requirement for Prior Objections.--In reviewing a 
     final action under this section, the court may consider an 
     objection to the final action only if--
       ``(1) the objection was made in the course of a proceeding 
     or review conducted by the Secretary; or
       ``(2) there was a reasonable ground for not making the 
     objection in the proceeding.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     51 is amended by striking the item relating to section 5127 
     and inserting the following:

``5127. Judicial review.
``5128. Authorization of appropriations.''.

     SEC. 4446. AUTHORIZATION OF APPROPRIATIONS.

       Section 5128, as redesignated by section 4445 of this 
     title, is amended to read as follows:

     ``Sec. 5128. Authorization of appropriations

       ``(a) General.--In order to carry out this chapter (except 
     sections 5107(e), 5108(g), 5112, 5113, 5115, 5116, and 5119 
     of this title), the following amounts are authorized to be 
     appropriated to the Secretary:
       ``(1) For fiscal year 2004, not more than $24,981,000.
       ``(2) For fiscal year 2005, not more than $27,000,000.
       ``(3) For fiscal year 2006, not more than $29,000,000.
       ``(4) For each of fiscal years 2007 through 2009, not more 
     than $30,000,000.
       ``(b) Emergency Preparedness Fund.--There shall be 
     available from the Emergency Preparedness Fund under section 
     5116(i) of this title, amounts as follows:
       ``(1) To carry out section 5107(e) of this title, 
     $4,000,000 for each of fiscal years 2004 through 2009.
       ``(2) To carry out section 5115 of this title, $200,000 for 
     each of fiscal years 2004 through 2009.
       ``(3) To carry out section 5116(a) of this title, 
     $8,000,000 for each of fiscal years 2004 through 2009.
       ``(4) To carry out section 5116(b) of this title, 
     $13,800,000 for each of fiscal years 2004 through 2009.
       ``(5) To carry out section 5116(f) of this title, $150,000 
     for each of fiscal years 2004 through 2009.
       ``(6) To carry out section 5116(i)(4) of this title, 
     $150,000 for each of fiscal years 2004 through 2009.
       ``(7) To carry out section 5116(j) of this title, 
     $1,000,000 for each of fiscal years 2004 through 2009.
       ``(8) To publish and distribute an emergency response 
     guidebook under section 5116(i)(3) of title 49, United States 
     Code, $500,000 for each of fiscal years 2004 through 2009.
       ``(c) Section 5121 Reports.--There are authorized to be 
     appropriated to the Secretary of Transportation for the use 
     of the Bureau of Transportation Statistics such sums as may 
     be necessary to carry out section 5121(h) of this title.''.
       ``(d) Credit to Appropriations.--The Secretary may credit 
     to any appropriation to carry out this chapter an amount 
     received from a State, political subdivision of a State, 
     Indian tribe, or other public authority or private entity for 
     expenses the Secretary incurs in providing training to the 
     State, political subdivision, Indian tribe, or other 
     authority or entity.
       ``(e) Availability of Amounts.--Amounts available under 
     subsections (a) and (b) of this section shall remain 
     available until expended.''.

     SEC. 4447. ADDITIONAL CIVIL AND CRIMINAL PENALTIES.

       (a) Title 49 Penalties.--Section 46312 is amended--
       (1) by striking ``part--'' in subsection (a) and inserting 
     ``part or chapter 51 of this title--''; and
       (2) by inserting ``or chapter 51 of this title'' in 
     subsection (b) after ``under this part''.
       (b) Title 18 Penalties.--Section 3663(a)(1)(A) of title 18, 
     United States Code, is amended by inserting ``5124,'' before 
     ``46312,''.

                         PART II--OTHER MATTERS

     SEC. 4461. ADMINISTRATIVE AUTHORITY FOR RESEARCH AND SPECIAL 
                   PROGRAMS ADMINISTRATION.

       Section 112 is amended--
       (1) by redesignating subsection (e) as subsection (f); and
       (2) by inserting after subsection (d) the following:
       ``(e) Administrative Authorities.--
       ``(1) Grants, cooperative agreements, and other 
     transactions.--The Administrator may enter into grants, 
     cooperative agreements, and other transactions with Federal 
     agencies, State and local government agencies, other public 
     entities, private organizations, and other persons--
       ``(A) to conduct research into transportation service and 
     infrastructure assurance; and
       ``(B) to carry out other research activities of the 
     Administration.
       ``(2) Limitation on disclosure of certain information.--
       ``(A) Limitation.--If the Administrator determines that 
     particular information developed in research sponsored by the 
     Administration may reveal a systemic vulnerability of 
     transportation service or infrastructure, such information 
     may be disclosed only to--
       ``(i) a person responsible for the security of the 
     transportation service or infrastructure; or
       ``(ii) a person responsible for protecting public safety; 
     or
       ``(iii) an officer, employee, or agent of the Federal 
     Government, or a State or local government, who, as 
     determined by the Administrator, has need for such 
     information in the performance of official duties.
       ``(B) Treatment of release.--The release of information 
     under subparagraph (A) shall not be treated as a release to 
     the public for purposes of section 552 of title 5.''.

     SEC. 4462. MAILABILITY OF HAZARDOUS MATERIALS.

       (a) Nonmailability Generally.--Section 3001 of title 39, 
     United States Code, is amended--
       (1) by redesignating subsection (n) as subsection (o); and
       (2) by inserting after subsection (m) the following:
       ``(n)(1) Except as otherwise authorized by law or 
     regulations of the Postal Service under section 3018 of this 
     title, hazardous material is nonmailable.
       ``(2) In this subsection, the term `hazardous material' 
     means a substance or material designated by the Secretary of 
     Transportation as hazardous material under section 5103(a) of 
     title 49.''.
       (b) Mailability.--
       (1) In General.--Chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3018. Hazardous material

       ``(a) In General.--The Postal Service shall prescribe 
     regulations for the safe transportation of hazardous material 
     in the mails.
       ``(b) Prohibitions.--No person may--
       ``(1) mail or cause to be mailed hazardous material that 
     has been declared by statute or Postal Service regulation to 
     be nonmailable;
       ``(2) mail or cause to be mailed hazardous material in 
     violation of any statute or Postal Service regulation 
     restricting the time, place, or manner in which hazardous 
     material may be mailed; or
       ``(3) manufacture, distribute, or sell any container, 
     packaging kit, or similar device that--
       ``(A) is represented, marked, certified, or sold by such 
     person for use in the mailing of hazardous material; and
       ``(B) fails to conform with any statute or Postal Service 
     regulation setting forth standards for a container, packaging 
     kit, or similar device used for the mailing of hazardous 
     material.
       ``(c) Civil Penalty.--
       ``(1) In general.--A person who knowingly violates this 
     section or a regulation prescribed under this section shall 
     be liable to the Postal Service for--
       ``(A) a civil penalty of at least $250, but not more than 
     $100,000, for each violation;
       ``(B) the costs of any clean-up associated with such 
     violation; and
       ``(C) damages.
       ``(2) Knowing action.--A person acts knowingly for purposes 
     of paragraph (1) when--
       ``(A) the person has actual knowledge of the facts giving 
     rise to the violation; or
       ``(B) a reasonable person acting in the circumstances and 
     exercising reasonable care would have had that knowledge.
       ``(3) Knowledge of statute or regulation not element of 
     offense.--Knowledge of the existence of a statutory provision 
     or Postal Service regulation is not an element of an offense 
     under this subsection.
       ``(4) Separate violations.--
       ``(A) Violations over time.--A separate violation under 
     this subsection occurs for each day hazardous material, 
     mailed or cause to be mailed in noncompliance with this 
     section, is in the mail.
       ``(B) Separate items.--A separate violation under this 
     subsection occurs for each item containing hazardous material 
     that is mailed or caused to be mailed in noncompliance with 
     this section.
       ``(d) Hearings.--The Postal Service may determine that a 
     person has violated this section or a regulation prescribed 
     under this section only after notice and an opportunity for a 
     hearing.
       ``(e) Penalty Considerations.--In determining the amount of 
     a civil penalty for a violation of this section, the Postal 
     Service shall consider--
       ``(1) the nature, circumstances, extent, and gravity of the 
     violation;
       ``(2) with respect to the person who committed the 
     violation, the degree of culpability, any history of prior 
     violations, the ability to pay, and any effect on the ability 
     to continue in business;
       ``(3) the impact on Postal Service operations; and
       ``(4) any other matters that justice requires.
       ``(f) Civil Actions To Collect.--
       ``(1) In general.--In accordance with section 4409(d) of 
     this title, a civil action may be commenced in an appropriate 
     district court of the United States to collect a civil 
     penalty, clean-up costs, and damages assessed under 
     subsection (c).

[[Page 10934]]

       ``(2) Limitation.--In a civil action under paragraph (1), 
     the validity, amount, and appropriateness of the civil 
     penalty, clean-up costs, and damages covered by the civil 
     action shall not be subject to review.
       ``(3) Compromise.--The Postal Service may compromise the 
     amount a civil penalty, clean-up costs, and damages assessed 
     under subsection (c) before commencing a civil action with 
     respect to such civil penalty, clean-up costs, and damages 
     under paragraph (1).
       ``(g) Civil Judicial Penalties.--
       ``(1) In general.--At the request of the Postal Service, 
     the Attorney General may bring a civil action in an 
     appropriate district court of the United States to enforce 
     this section or a regulation prescribed under this section.
       ``(2) Relief.--The court in a civil action under paragraph 
     (1) may award appropriate relief, including a temporary or 
     permanent injunction, civil penalties as determined in 
     accordance with this section, or punitive damages.
       ``(3) Construction.--A civil action under this subsection 
     shall be in lieu of civil penalties for the same violation 
     under subsection (c)(1)(A).
       ``(h) Deposit of Amounts Collected.--Amounts collected 
     under this section shall be deposited into the Postal Service 
     Fund under section 2003 of this title.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     30 of title 39, United States Code, is amended by adding at 
     the end the following:

``3018. Hazardous material.''.

       (c) Conforming Amendment.--Section 2003(b) of title 39, 
     United States Code, is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (7);
       (2) by striking ``purposes.'' in paragraph (8) and 
     inserting ``purposes; and''; and
       (3) by adding at the end the following:
       ``(9) any amounts collected under section 3018 of this 
     title.''.

     SEC. 4463. CRIMINAL MATTERS.

       Section 845(a)(1) of title 18, United States Code, is 
     amended by striking ``which are regulated'' and all that 
     follows and inserting ``that is subject to the authority of 
     the Departments of Transportation and Homeland Security;''.

     SEC. 4464. CARGO INSPECTION PROGRAM.

       (a) In General.--The Secretary of Transportation may 
     establish a program of random inspections of cargo at points 
     of entry into the United States for the purpose of 
     determining the extent to which undeclared hazardous material 
     is being offered for transportation in commerce through such 
     points of entry.
       (b) Inspections.--Under the program under subsection (a)--
       (1) an officer of the Department of Transportation who is 
     not located at a point of entry into the United States may 
     select at random cargo shipments at points of entry into the 
     United States for inspection; and
       (2) an officer or employee of the Department may open and 
     inspect each cargo shipment so selected for the purpose 
     described in subsection (a).
       (c) Coordination.--The Secretary of Transportation shall 
     coordinate any inspections under the program under subsection 
     (a) with the Secretary of Homeland Security.
       (d) Disposition of Hazardous Materials.--The Secretary of 
     Transportation shall provide for the appropriate handling and 
     disposition of any hazardous material discovered pursuant to 
     inspections under the program under subsection (a).

     SEC. 4465. INFORMATION ON HAZMAT REGISTRATIONS.

       The Administrator of the Department of Transportation's 
     Research and Special Programs Administration shall--
       (1) transmit current hazardous material registrant 
     information to the Federal Motor Carrier Safety 
     Administration to cross reference the registrant's Federal 
     motor carrier registration number; and
       (2) notify the Federal Motor Carrier Safety Administration 
     immediately, and provide a registrant's United States 
     Department of Transportation identification number to the 
     Administration, whenever a new registrant registers to 
     transport hazardous materials as a motor carrier.

     SEC. 4466. REPORT ON APPLYING HAZARDOUS MATERIALS REGULATIONS 
                   TO PERSONS WHO REJECT HAZARDOUS MATERIALS.

       Within 6 months after the date of enactment of this Act, 
     the Secretary of Transportation shall complete an assessment 
     of the costs and benefits of subjecting persons who reject 
     hazardous material for transportation in commerce to the 
     hazardous materials laws and regulations. In completing this 
     assessment, the Secretary shall--
       (1) estimate the number of affected employers and 
     employees;
       (2) determine what actions would be required by them to 
     comply with such laws and regulations; and
       (3) consider whether and to what extent the application of 
     Federal hazardous materials laws and regulations should be 
     limited to--
       (A) particular modes of transportation;
       (B) certain categories of employees; or
       (C) certain classes or categories of hazardous materials.

                 PART III--SANITARY FOOD TRANSPORTATION

     SEC. 4481. SHORT TITLE.

       This part may be cited as the ``Sanitary Food 
     Transportation Act of 2004''.

     SEC. 4482. RESPONSIBILITIES OF THE SECRETARY OF HEALTH AND 
                   HUMAN SERVICES.

       (a) Unsanitary Transport Deemed Adulteration.--Section 402 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 342) 
     is amended by adding at the end the following:
       ``(i) Noncompliance With Sanitary Transportation 
     Practices.--If the food is transported under conditions that 
     are not in compliance with the sanitary transportation 
     practices prescribed by the Secretary under section 416.''.
       (b) Sanitary Transportation Requirements.--Chapter IV of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 341 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 416. SANITARY TRANSPORTATION PRACTICES.

       ``(a) Definitions.--In this section:
       ``(1) Bulk vehicle.--The term `bulk vehicle' includes a 
     tank truck, hopper truck, rail tank car, hopper car, cargo 
     tank, portable tank, freight container, or hopper bin, and 
     any other vehicle in which food is shipped in bulk, with the 
     food coming into direct contact with the vehicle.
       ``(2) Transportation.--The term `transportation' means any 
     movement in commerce by motor vehicle or rail vehicle.
       ``(b) Regulations.--The Secretary shall by regulation 
     require shippers, carriers by motor vehicle or rail vehicle, 
     receivers, and other persons engaged in the transportation of 
     food to use sanitary transportation practices prescribed by 
     the Secretary to ensure that food is not transported under 
     conditions that may render the food adulterated.
       ``(c) Contents.--The regulations shall--
       ``(1) prescribe such practices as the Secretary determines 
     to be appropriate relating to--
       ``(A) sanitation;
       ``(B) packaging, isolation, and other protective measures;
       ``(C) limitations on the use of vehicles;
       ``(D) information to be disclosed--
       ``(i) to a carrier by a person arranging for the transport 
     of food; and
       ``(ii) to a manufacturer or other person that--

       ``(I) arranges for the transportation of food by a carrier; 
     or
       ``(II) furnishes a tank vehicle or bulk vehicle for the 
     transportation of food; and

       ``(E) recordkeeping; and
       ``(2) include--
       ``(A) a list of nonfood products that the Secretary 
     determines may, if shipped in a bulk vehicle, render 
     adulterated food that is subsequently transported in the same 
     vehicle; and
       ``(B) a list of nonfood products that the Secretary 
     determines may, if shipped in a motor vehicle or rail vehicle 
     (other than a tank vehicle or bulk vehicle), render 
     adulterated food that is simultaneously or subsequently 
     transported in the same vehicle.
       ``(d) Waivers.--
       ``(1) In general.--The Secretary may waive any requirement 
     under this section, with respect to any class of persons, 
     vehicles, food, or nonfood products, if the Secretary 
     determines that the waiver--
       ``(A) will not result in the transportation of food under 
     conditions that would be unsafe for human or animal health; 
     and
       ``(B) will not be contrary to the public interest.
       ``(2) Publication.--The Secretary shall publish in the 
     Federal Register any waiver and the reasons for the waiver.
       ``(e) Preemption.--
       ``(1) In general.--No State or political subdivision of a 
     State may directly or indirectly establish or continue in 
     effect, as to any food in interstate commerce, any authority 
     or requirement concerning transportation of food that is not 
     identical to an authority or requirement under this section.
       ``(2) Applicability.--This subsection applies to 
     transportation that occurs on or after the effective date of 
     the regulations promulgated under subsection (b).
       ``(f) Assistance of Other Agencies.--The Secretary of 
     Transportation, the Secretary of Agriculture, the 
     Administrator of the Environmental Protection Agency, and the 
     heads of other Federal agencies, as appropriate, shall 
     provide assistance on request, to the extent resources are 
     available, to the Secretary for the purposes of carrying out 
     this section.''.
       (c) Inspection of Transportation Records.--
       (1) Requirement.--Section 703 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 373) is amended--
       (A) by striking the section heading and all that follows 
     through ``For the purpose'' and inserting the following:

     ``SEC. 703. RECORDS.

       ``(a) In General.--For the purpose''; and
       (B) by adding at the end the following:
       ``(b) Food Transportation Records.--A shipper, carrier by 
     motor vehicle or rail vehicle, receiver, or other person 
     subject to section 416 shall, on request of an officer or 
     employee designated by the Secretary, permit the officer or 
     employee, at reasonable times, to have access to and to copy 
     all records that the Secretary requires to be kept under 
     section 416(c)(1)(E).''.
       (2) Conforming amendment.--Subsection (a) of section 703 of 
     the Federal Food, Drug, and Cosmetic Act (as designated by 
     paragraph (1)(A)) is amended by striking ``carriers.'' and 
     inserting ``carriers, except as provided in subsection (b)''.
       (d) Prohibited Acts.--
       (1) Records inspection.--Section 301(e) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 331(e)) is amended by 
     inserting ``416,'' before ``504,'' each place it appears.

[[Page 10935]]

       (2) Unsafe food transportation.--Section 301 of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 331) is amended by 
     adding at the end the following:
       ``(hh) Noncompliance With Sanitary Transportation 
     Practices.--The failure by a shipper, carrier by motor 
     vehicle or rail vehicle, receiver, or any other person 
     engaged in the transportation of food to comply with the 
     sanitary transportation practices prescribed by the Secretary 
     under section 416.''.

     SEC. 4483. DEPARTMENT OF TRANSPORTATION REQUIREMENTS.

       Chapter 57, is amended to read as follows:

               ``CHAPTER 57--SANITARY FOOD TRANSPORTATION

``Sec.
``5701. Food transportation safety inspections.

     ``Sec. 5701. Food transportation safety inspections

       ``(a) Inspection Procedures.--
       ``(1) In general.--The Secretary of Transportation, in 
     consultation with the Secretary of Health and Human Services 
     and the Secretary of Agriculture, shall--
       ``(A) establish procedures for transportation safety 
     inspections for the purpose of identifying suspected 
     incidents of contamination or adulteration of--
       ``(i) food in violation of regulations promulgated under 
     section 416 of the Federal Food, Drug, and Cosmetic Act; and
       ``(ii) meat subject to detention under section 402 of the 
     Federal Meat Inspection Act (21 U.S.C. 672); and
       ``(iii) poultry products subject to detention under section 
     19 of the Poultry Products Inspection Act (21 U.S.C. 467a); 
     and
       ``(B) train personnel of the Department of Transportation 
     in the appropriate use of the procedures.
       ``(2) Applicability.--The procedures established under 
     paragraph (1) of this subsection shall apply, at a minimum, 
     to Department of Transportation personnel that perform 
     commercial motor vehicle or railroad safety inspections.
       ``(b) Notification of Secretary of Health and Human 
     Services or Secretary of Agriculture.--The Secretary of 
     Transportation shall promptly notify the Secretary of Health 
     and Human Services or the Secretary of Agriculture, as 
     applicable, of any instances of potential food contamination 
     or adulteration of a food identified during transportation 
     safety inspections.
       ``(c) Use of State Employees.--The means by which the 
     Secretary of Transportation carries out subsection (b) of 
     this section may include inspections conducted by State 
     employees using funds authorized to be appropriated under 
     sections 31102 through 31104 of this title.''.

     SEC. 4484. EFFECTIVE DATE.

       This part takes effect on October 1, 2003.

            Subtitle E--Recreational Boating Safety Programs

     SEC. 4501. SHORT TITLE.

       This subtitle may be cited as the ``Sport Fishing and 
     Recreational Boating Safety Act''.

      PART I--FEDERAL AID IN SPORT FISH RESTORATION ACT AMENDMENTS

     SEC. 4521. AMENDMENT OF FEDERAL AID IN FISH RESTORATION ACT.

       Except as otherwise expressly provided, whenever in this 
     subtitle an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Act entitled ``An Act to provide that 
     the United States shall aid the States in fish restoration 
     and management projects, and for other purposes,'' approved 
     August 9, 1950 (64 Stat. 430; 16 U.S.C. 777 et seq.).

     SEC. 4522. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 3 (16 U.S.C. 777b) is amended--
       (1) by striking ``the succeeding fiscal year.'' in the 
     third sentence and inserting ``succeeding fiscal years.''; 
     and
       (2) by striking ``in carrying on the research program of 
     the Fish and Wildlife Service in respect to fish of material 
     value for sport and recreation.'' and inserting ``to 
     supplement the 55.3 percent of each annual appropriation to 
     be apportioned among the States, as provided for in section 
     4(b) of this title.''.
       (b) Conforming Amendments.--
       (1) In general.--Section 3 of the Dingell-Johnson Sport 
     Fish Restoration Act (16 U.S.C. 777b) is amended in the first 
     sentence--
       (A) by striking ``Sport Fish Restoration Account'' and 
     inserting ``Sport Fish Restoration Trust Fund''; and
       (B) by striking ``that Account'' and inserting ``that Trust 
     Fund, except as provided in section 9504(c) of the Internal 
     Revenue Code of 1986''.
       (2) Effective date.--The amendments made by paragraph (1) 
     take effect on October 1, 2004.

     SEC. 4523. DIVISION OF ANNUAL APPROPRIATIONS.

       Section 4 (16 U.S.C. 777c) is amended--
       (1) by striking subsections (a) through (d) and 
     redesignating subsections (e), (f), and (g) as subsections 
     (b), (c), and (d);
       (2) by inserting before subsection (b), as redesignated, 
     the following:
       ``(a) In General.--For fiscal years 2004 through 2009, each 
     annual appropriation made in accordance with the provisions 
     of section 3 of this title shall be distributed as follows:
       ``(1) Coastal wetlands.--18 percent to the Secretary of the 
     Interior for distribution as provided in the Coastal Wetlands 
     Planning, Protection, and Restoration Act (16 U.S.C. 3951 et 
     seq.).
       ``(2) Boating safety.--18 percent to the Secretary of 
     Homeland Security for State recreational boating safety 
     programs under section 13106 of title 46, United States Code.
       ``(3) Clean vessel act.--1.9 percent to the Secretary of 
     the Interior for qualified projects under section 5604(c) of 
     the Clean Vessel Act of 1992 (33 U.S.C. 1322 note).
       ``(4) Boating infrastructure.--1.9 percent to the Secretary 
     of the Interior for obligation for qualified projects under 
     section 7404(d) of the Sportfishing and Boating Safety Act of 
     1998 (16 U.S.C. 777g-1(d)).
       ``(5) National outreach and communications.--1.9 percent to 
     the Secretary of the Interior for the National Outreach and 
     Communications Program under section 8(d) of this title. Such 
     amounts shall remain available for 3 fiscal years, after 
     which any portion thereof that is unobligated by the 
     Secretary for that program may be expended by the Secretary 
     under subsection (b) of this section.
       ``(6) Set-aside for expenses for administration of this 
     chapter.--
       ``(A) In general.--2.1 percent to the Secretary of the 
     Interior for expenses for administration incurred in 
     implementation of this title, in accordance with this 
     section, section 9, and section 14 of this title.
       ``(B) Apportionment of unobligated funds.--If any portion 
     of the amount made available to the Secretary under 
     subparagraph (A) remains unexpended and unobligated at the 
     end of a fiscal year, that portion shall be apportioned among 
     the States, on the same basis and in the same manner as other 
     amounts made available under this title are apportioned among 
     the States under subsection (b) of this section, within 60 
     days after the end of that fiscal year. Any amount 
     apportioned among the States under this subparagraph shall be 
     in addition to any amounts otherwise available for 
     apportionment among the States under subsection (b) for the 
     fiscal year.'';
       (3) by striking ``of the Interior, after the distribution, 
     transfer, use, and deduction under subsections (a), (b), (c), 
     and (d), respectively, and after deducting amounts used for 
     grants under section 14, shall apportion the remainder'' in 
     subsection (b), as redesignated, and inserting ``shall 
     apportion 55.3 percent'';
       (4) by striking ``per centum'' each place it appears in 
     subsection (b), as redesignated, and inserting ``percent'';
       (5) by striking ``subsections (a), (b)(3)(A), (b)(3)(B), 
     and (c)'' in paragraph (1) of subsection (d), as 
     redesignated, and inserting ``paragraphs (1), (3), (4), and 
     (5) of subsection (a)''; and
       (6) by adding at the end the following:
       ``(e) Transfer of Certain Funds.--Amounts available under 
     paragraphs (3) and (4) of subsection (a) that are unobligated 
     by the Secretary after 3 fiscal years shall be transferred to 
     the Secretary of Homeland Security and shall be expended for 
     State recreational boating safety programs under section 
     13106(a) of title 46, United States Code.''.

     SEC. 4524. MAINTENANCE OF PROJECTS.

       Section 8 (16 U.S.C. 777g) is amended--
       (1) by striking ``in carrying out the research program of 
     the Fish and Wildlife Service in respect to fish of material 
     value for sport or recreation.'' in subsection (b)(2) and 
     inserting ``to supplement the 55.3 percent of each annual 
     appropriation to be apportioned among the States under 
     section 4(b) of this title.''; and
       (2) by striking ``subsection (c) or (d) of section 4'' in 
     subsection (d)(3) and inserting ``paragraph (5) or (6) of 
     section 4(a)''.

     SEC. 4525. BOATING INFRASTRUCTURE.

       Section 7404(d)(1) of the Sportfishing and Boating Safety 
     Act of 1998 (16 U.S.C. 777g-1(d)(1)) is amended by striking 
     ``section 4(b)(3)(B)'' and inserting ``section 4(a)(4)''.

     SEC. 4526. REQUIREMENTS AND RESTRICTIONS CONCERNING USE OF 
                   AMOUNTS FOR EXPENSES FOR ADMINISTRATION.

       Section 9 (16 U.S.C. 777h) is amended--
       (1) by striking ``section 4(d)(1)'' in subsection (a) and 
     inserting ``section 4(a)(6)''; and
       (2) by striking ``section 4(d)(1)'' in subsection (b)(1) 
     and inserting ``section 4(a)(6)''.

     SEC. 4527. PAYMENTS OF FUNDS TO AND COOPERATION WITH PUERTO 
                   RICO, THE DISTRICT OF COLUMBIA, GUAM, AMERICAN 
                   SAMOA, THE COMMONWEALTH OF THE NORTHERN MARIANA 
                   ISLANDS, AND THE VIRGIN ISLANDS.

       Section 12 (16 U.S.C. 777k) is amended by striking ``in 
     carrying on the research program of the Fish and Wildlife 
     Service in respect to fish of material value for sport or 
     recreation.'' and inserting ``to supplement the 55.3 percent 
     of each annual appropriation to be apportioned among the 
     States under section 4(b) of this title.''.

     SEC. 4528. MULTISTATE CONSERVATION GRANT PROGRAM.

       Section 14 (16 U.S.C. 777m) is amended--
       (1) by striking so much of subsection (a) as precedes 
     paragraph (2) and inserting the following:
       ``(a) In General.--
       ``(1) Amount for grants.--For each of fiscal years 2004 
     through 2009, 0.9 percent of each annual appropriation made 
     in accordance with the provisions of section 3 of this title 
     shall be distributed to the Secretary of the Interior for 
     making multistate conservation project grants in accordance 
     with this section.'';
       (2) by striking ``section 4(e)'' each place it appears in 
     subsection (a)(2)(B) and inserting ``section 4(b)''; and
       (3) by striking ``Of the balance of each annual 
     appropriation made under section 3 remaining

[[Page 10936]]

     after the distribution and use under subsections (a), (b), 
     and (c) of section 4 for each fiscal year and after deducting 
     amounts used for grants under subsection (a)--'' in 
     subsection (e) and inserting ``Of amounts made available 
     under section 4(a)(6) for each fiscal year--''.

                  PART II--CLEAN VESSEL ACT AMENDMENTS

     SEC. 4541. GRANT PROGRAM.

       Section 5604(c)(2) of the Clean Vessel Act of 1992 (33 
     U.S.C. 1322 note) is amended--
       (1) by striking subparagraph (A); and
       (2) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively.

        PART III--RECREATIONAL BOATING SAFETY PROGRAM AMENDMENTS

     SEC. 4561. STATE MATCHING FUNDS REQUIREMENT.

       Section 13103(b) of title 46, United States Code, is 
     amended by striking ``one-half'' and inserting ``75 
     percent''.

     SEC. 4562. AVAILABILITY OF ALLOCATIONS.

       Section 13104(a) of title 46, United States Code, is 
     amended--
       (1) by striking ``2 years'' in paragraph (1) and inserting 
     ``3 years''; and
       (2) by striking ``2-year'' in paragraph (2) and inserting 
     ``3-year''.

     SEC. 4563. AUTHORIZATION OF APPROPRIATIONS FOR STATE 
                   RECREATIONAL BOATING SAFETY PROGRAMS.

       Section 13106(c) of title 46, United States Code, is 
     amended--
       (1) by striking ``Secretary of Transportation under 
     paragraphs (2) and (3) of section 4(b)'' and inserting 
     ``Secretary under subsections (a)(2) and (e) of section 4''; 
     and
       (2) by inserting ``a minimum of'' before ``$2,083,333''.

     SEC. 4564. MAINTENANCE OF EFFORT FOR STATE RECREATIONAL 
                   BOATING SAFETY PROGRAMS.

       (a) In General.--Chapter 131 of title 46, United States 
     Code, is amended by inserting after section 13106 the 
     following:

     ``Sec. 13107. Maintenance of effort for State recreational 
       boating safety programs

       ``(a) In General.--The amount payable to a State for a 
     fiscal year from an allocation under section 13103 of this 
     chapter shall be reduced if the usual amounts expended by the 
     State for the State's recreational boating safety program, as 
     determined under section 13105 of this chapter, for the 
     previous fiscal year is less than the average of the total of 
     such expenditures for the 3 fiscal years immediately 
     preceding that previous fiscal year. The reduction shall be 
     proportionate, as a percentage, to the amount by which the 
     level of State expenditures for such previous fiscal year is 
     less than the average of the total of such expenditures for 
     the 3 fiscal years immediately preceding that previous fiscal 
     year.
       ``(b) Reduction of Threshhold.--If the total amount 
     available for allocation and distribution under this chapter 
     in a fiscal year for all participating State recreational 
     boating safety programs is less than such amount for the 
     preceding fiscal year, the level of State expenditures 
     required under subsection (a) of this section for the 
     preceding fiscal year shall be decreased proportionately.
       ``(c) Waiver.--
       ``(1) In general.--Upon the written request of a State, the 
     Secretary may waive the provisions of subsection (a) of this 
     section for 1 fiscal year if the Secretary determines that a 
     reduction in expenditures for the State's recreational 
     boating safety program is attributable to a non- selective 
     reduction in expenditures for the programs of all Executive 
     branch agencies of the State government, or for other reasons 
     if the State demonstrates to the Secretary's satisfaction 
     that such waiver is warranted.
       ``(2) 30-day decision.--The Secretary shall approve or deny 
     a request for a waiver not later than 30 days after the date 
     the request is received.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     131 of title 46, United States Code, is amended by inserting 
     after the item relating to section 13106 the following:

``13107. Maintenance of effort for State recreational boating safety 
              programs.''.

                         PART IV--MISCELLANEOUS

     SEC. 4581. TECHNICAL CORRECTION TO HOMELAND SECURITY ACT.

       Section 1511(e)(2) of the Homeland Security Act of 2002 
     (Pub. L. 107-296) is amended by striking ``and to any funds 
     provided to the Coast Guard from the Aquatic Resources Trust 
     Fund of the Highway Trust Fund for boating safety programs.'' 
     and inserting ``and any funds provided to the Coast Guard 
     from the Highway Trust Fund and transferred into the Sport 
     Fish Restoration Account of the Aquatic Resources Trust Fund 
     for boating safety programs.''.

                    Subtitle F--Rail Transportation

                             PART I--AMTRAK

     SEC. 4601. AUTHORIZATION OF APPROPRIATIONS.

       The text of section 24104 of title 49, United States Code, 
     is amended to read as follows:
       ``There are authorized to be appropriated to the Secretary 
     of Transportation $2,000,000,000 for each of fiscal years 
     2004, 2005, 2006, 2007, 2008, and 2009 for the benefit of 
     Amtrak for operating expenses.''.

     SEC. 4602. ESTABLISHMENT OF BUILD AMERICA CORPORATION.

       There is established a nonprofit corporation, to be known 
     as the ``Build America Corporation''. The Build America 
     Corporation is not an agency or establishment of the United 
     States Government. The purpose of the Corporation is to 
     support qualified projects described in section 4603(c)(2) 
     through the issuance of Build America bonds. The Corporation 
     shall be subject, to the extent consistent with this section, 
     to the laws of the State of Delaware applicable to 
     corporations not for profit.

     SEC. 4603. FEDERAL BONDS FOR TRANSPORTATION INFRASTRUCTURE.

       (a) Use of Bond Proceeds.--The proceeds from the sale of--
       (1) any bonds authorized, issued, or guaranteed by the 
     Federal Government that are available to fund passenger rail 
     projects pursuant to any Federal law (enacted before, on, or 
     after the date of the enactment of this Act), and
       (2) any Build America bonds issued by the Build America 
     Corporation as authorized by section 4602,

     may be used to fund a qualified project if the Secretary of 
     Transportation determines that the qualified project is a 
     cost-effective alternative for efficiently maximizing 
     mobility of individuals and goods.
       (b) Compliance of Beneficiaries With Certain Standards.--A 
     recipient of proceeds of a grant, loan, Federal tax-credit 
     bonds, or any other form of financial assistance provided 
     under this title shall comply with the standards described in 
     section 24312 of title 49, United States Code, as in effect 
     on June 25, 2003, with respect to any qualified project 
     described in subsection (c)(1) in the same manner that the 
     National Passenger Railroad Corporation is required to comply 
     with such standards for construction work financed under an 
     agreement entered into under section 24308(a) of such title.
       (c) Qualified Project Defined.--In this section--
       (1) In general.--Except as provided in paragraph (2), the 
     term ``qualified project'' means any transportation 
     infrastructure project of any governmental unit or other 
     person that is proposed by a State, including a highway 
     project, a transit system project, a railroad project, an 
     airport project, a port project, and an inland waterways 
     project.
       (2) Build america corporation projects.--
       (A) In general.--With respect to any Build America bonds 
     issued by the Build America Corporation as authorized by 
     section 4602, the term ``qualified project'' means any--
       (i) qualified highway project,
       (ii) qualified public transportation project, and
       (iii) congestion relief project,
     proposed by 1 or more States and approved by the Build 
     America Corporation, which meets the requirements under 
     clauses (i), (ii), and (iii) of subparagraph (D).
       (B) Qualified highway project.--The term ``qualified 
     highway project'' means a project for highway facilities or 
     other facilities which are eligible for assistance under 
     title 23, United States Code.
       (C) Qualified public transportation project.--The term 
     ``qualified public transportation project'' means a project 
     for public transportation facilities or other facilities 
     which are eligible for assistance under chapter 53 of title 
     49, United States Code.
       (D) Congestion relief project.--The term ``congestion 
     relief project'' means an intermodal freight transfer 
     facility, freight rail facility, freight movement corridor, 
     intercity passenger rail or facility, intercity bus vehicle 
     or facility, border crossing facility, or other public or 
     private facility approved as a congestion relief project by 
     the Secretary of Transportation. In making such approvals, 
     the Secretary of Transportation shall--
       (i) consider the economic, environmental, mobility, and 
     national security improvements to be realized through the 
     project, and
       (ii) give preference to projects with national or regional 
     significance, including any projects sponsored by a coalition 
     of States or a combination of States and private sector 
     entities, in terms of generating economic benefits, 
     supporting international commerce, or otherwise enhancing the 
     national transportation system.
       (D) Additional requirements for qualified projects.--For 
     purposes of subparagraph (A)--
       (i) Costs of qualified projects.--The requirement of this 
     clause is met if the costs of the qualified project funded by 
     Build America bonds only relate to capital investments in 
     depreciable assets and do not include any costs relating to 
     operations, maintenance, or rolling stock.
       (ii) Applicability of federal law.--The requirement of this 
     clause is met if the requirements of any Federal law, 
     including titles 23, 40, and 49 of the United States Code, 
     which would otherwise apply to projects to which the United 
     States is a party or to funds made available under such law 
     and projects assisted with those funds are applied to--

       (I) funds made available under Build America bonds for 
     similar qualified projects, and
       (II) similar qualified projects assisted by the Build 
     America Corporation through the use of such funds.

       (iii) Utilization of updated construction technology for 
     qualified projects.--The requirement of this clause is met if 
     the appropriate State agency relating to the qualified 
     project has updated its accepted construction technologies to 
     match a list prescribed by the Secretary of Transportation 
     and in effect on the date of the approval of the project as a 
     qualified project.

                 PART II--RAILROAD TRACK MODERNIZATION

     SEC. 4631. SHORT TITLE.

       This part may be cited as the ``Railroad Track 
     Modernization Act of 2004''.

[[Page 10937]]



     SEC. 4632. CAPITAL GRANTS FOR RAILROAD TRACK.

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

            ``CHAPTER 223--CAPITAL GRANTS FOR RAILROAD TRACK

``Sec.
``22301. Capital grants for railroad track.

     ``Sec. 22301. Capital grants for railroad track

       ``(a) Establishment of Program.--
       ``(1) Establishment.--The Secretary of Transportation shall 
     establish a program of capital grants for the rehabilitation, 
     preservation, or improvement of railroad track (including 
     roadbed, bridges, and related track structures) of class II 
     and class III railroads. Such grants shall be for 
     rehabilitating, preserving, or improving track used primarily 
     for freight transportation to a standard ensuring that the 
     track can be operated safely and efficiently, including 
     grants for rehabilitating, preserving, or improving track to 
     handle 286,000 pound rail cars. Grants may be provided under 
     this chapter--
       ``(A) directly to the class II or class III railroad; or
       ``(B) with the concurrence of the class II or class III 
     railroad, to a State or local government.
       ``(2) State cooperation.--Class II and class III railroad 
     applicants for a grant under this chapter are encouraged to 
     utilize the expertise and assistance of State transportation 
     agencies in applying for and administering such grants. State 
     transportation agencies are encouraged to provide such 
     expertise and assistance to such railroads.
       ``(3) Regulations.--
       ``(A) In general.--The Secretary shall prescribe 
     regulations to carry out the program under this section.
       ``(B) Criteria.--In developing the regulations, the 
     Secretary shall establish criteria that--
       ``(i) condition the award of a grant to a railroad on 
     reasonable assurances by the railroad that the facilities to 
     be rehabilitated and improved will be economically and 
     efficiently utilized;
       ``(ii) ensure that the award of a grant is justified by 
     present and probable future demand for rail services by the 
     railroad to which the grant is to be awarded;
       ``(iii) ensure that consideration is given to projects that 
     are part of a State-sponsored rail plan; and
       ``(iv) ensure that all such grants are awarded on a 
     competitive basis.
       ``(b) Maximum Federal Share.--The maximum Federal share for 
     carrying out a project under this section shall be 80 percent 
     of the project cost. The non-Federal share may be provided by 
     any non-Federal source in cash, equipment, or supplies. Other 
     in-kind contributions may be approved by the Secretary on a 
     case by case basis consistent with this chapter.
       ``(c) Project Eligibility.--For a project to be eligible 
     for assistance under this section the track must have been 
     operated or owned by a class II or class III railroad as of 
     the date of the enactment of the Railroad Track Modernization 
     Act of 2004.
       ``(d) Use of Funds.--Grants provided under this section 
     shall be used to implement track capital projects as soon as 
     possible. In no event shall grant funds be contractually 
     obligated for a project later than the end of the third 
     Federal fiscal year following the year in which the grant was 
     awarded. Any funds not so obligated by the end of such fiscal 
     year shall be returned to the Secretary for reallocation.
       ``(e) Additional Purpose.--In addition to making grants for 
     projects as provided in subsection (a), the Secretary may 
     also make grants to supplement direct loans or loan 
     guarantees made under title V of the Railroad Revitalization 
     and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)), for 
     projects described in the last sentence of section 502(d) of 
     such title. Grants made under this subsection may be used, in 
     whole or in part, for paying credit risk premiums, lowering 
     rates of interest, or providing for a holiday on principal 
     payments.
       ``(f) Employee Protection.--The Secretary shall require as 
     a condition of any grant made under this section that the 
     recipient railroad provide a fair arrangement at least as 
     protective of the interests of employees who are affected by 
     the project to be funded with the grant as the terms imposed 
     under section 11326(a), as in effect on the date of the 
     enactment of the Railroad Track Modernization Act of 2001.
       ``(g) Labor Standards.--
       ``(1) Prevailing wages.--The Secretary shall ensure that 
     laborers and mechanics employed by contractors and 
     subcontractors in construction work financed by a grant made 
     under this section will be paid wages not less than those 
     prevailing on similar construction in the locality, as 
     determined by the Secretary of Labor under the Act of March 
     3, 1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a et 
     seq.). The Secretary shall make a grant under this section 
     only after being assured that required labor standards will 
     be maintained on the construction work.
       ``(2) Wage rates.--Wage rates in a collective bargaining 
     agreement negotiated under the Railway Labor Act (45 U.S.C. 
     151 et seq.) are deemed for purposes of this subsection to 
     comply with the Act of March 3, 1931 (known as the Davis-
     Bacon Act; 40 U.S.C. 276a et seq.).''.
       (b) Conforming Amendment.--The item relating to chapter 223 
     in the table of chapters of subtitle V of title 49, United 
     States Code, is amended to read as follows:

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

     SEC. 4633. REGULATIONS.

       (a) Regulations.--The Secretary of Transporation shall 
     prescribe under subsection (a)(3) of section 22301 of title 
     49, United States Code (as added by section 4601), interim 
     and final regulations for the administration of the grant 
     program under such section as follows:
       (1) Interim regulations.--The Secretary shall prescribe the 
     interim regulations to implement the program not later than 
     December 31, 2003.
       (2) Final regulations.--The Secretary shall prescribe the 
     final regulations not later than October 1, 2004.
       (b) Inapplicability of Rulemaking Procedure to Interim 
     Regulations.--Subchapter II of chapter 5 of title 5, United 
     States Code, shall not apply to the issuance of an interim 
     regulation or to any amendment of such an interim regulation.
       (c) Criteria.--The requirement for the establishment of 
     criteria under subparagraph (B) of section 22301(a)(3) of 
     title 49, United States Code, applies to the interim 
     regulations as well as to the final regulations.

     SEC. 4634. STUDY OF GRANT-FUNDED PROJECTS.

       (a) Requirement for Study.--The Secretary of Transportation 
     shall conduct a study of the projects carried out with grant 
     assistance under section 22301 of title 49, United States 
     Code (as added by section 4601), to determine the public 
     interest benefits associated with the light density railroad 
     networks in the States and their contribution to a multimodal 
     transportation system.
       (b) Report.--Not later than March 31, 2004, the Secretary 
     shall submit to Congress a report on the results of the study 
     under subsection (a). The report shall include any 
     recommendations that the Secretary considers appropriate 
     regarding the eligibility of light density rail networks for 
     Federal infrastructure financing.

     SEC. 4635. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     Transportation $350,000,000 for each of fiscal years 2004, 
     2005, and 2006 for carrying out section 22301 of title 49, 
     United States Code (as added by section 4601).

         PART III--OTHER RAIL TRANSPORTATION-RELATED PROVISIONS

     SEC. 4661. CAPITAL GRANTS FOR RAIL LINE RELOCATION PROJECTS.

       (a) Establishment of Program.--
       (1) Program requirements.--Chapter 201 of title 49, United 
     States Code, is amended by adding at the end of subchapter II 
     the following:

     ``Sec. 20154. Capital grants for rail line relocation 
       projects

       ``(a) Establishment of Program.--The Secretary of 
     Transportation shall carry out a grant program to provide 
     financial assistance for local rail line relocation projects.
       ``(b) Eligibility.--A State is eligible for a grant under 
     this section for any project for the improvement of the route 
     or structure of a rail line passing through a municipality of 
     the State that--
       ``(1) is carried out for the purpose of mitigating the 
     adverse effects of rail traffic on safety, motor vehicle 
     traffic flow, or economic development in the municipality;
       ``(2) involves a lateral or vertical relocation of any 
     portion of the rail line within the municipality to avoid a 
     closing of a grade crossing or the construction of a road 
     underpass or overpass; and
       ``(3) meets the costs-benefits requirement set forth in 
     subsection (c).
       ``(c) Costs-Benefits Requirement.--A grant may be awarded 
     under this section for a project for the relocation of a rail 
     line only if the benefits of the project for the period equal 
     to the estimated economic life of the relocated rail line 
     exceed the costs of the project for that period, as 
     determined by the Secretary considering the following 
     factors:
       ``(1) The effects of the rail line and the rail traffic on 
     motor vehicle and pedestrian traffic, safety, and area 
     commerce if the rail line were not so relocated.
       ``(2) The effects of the rail line, relocated as proposed, 
     on motor vehicle and pedestrian traffic, safety, and area 
     commerce.
       ``(3) The effects of the rail line, relocated as proposed, 
     on the freight and passenger rail operations on the rail 
     line.
       ``(d) Considerations for Approval of Grant Applications.--
     In addition to considering the relationship of benefits to 
     costs in determining whether to award a grant to an eligible 
     State under this section, the Secretary shall consider the 
     following factors:
       ``(1) The capability of the State to fund the rail line 
     relocation project without Federal grant funding.
       ``(2) The requirement and limitation relating to allocation 
     of grant funds provided in subsection (e).
       ``(3) Equitable treatment of the various regions of the 
     United States.
       ``(e) Allocation Requirements.--
       ``(1) Grants not greater than $20,000,000.--At least 50 
     percent of all grant funds awarded under this section out of 
     funds appropriated for a fiscal year shall be provided as 
     grant awards of not more than $20,000,000 each.
       ``(2) Limitation per project.--Not more than 25 percent of 
     the total amount available for carrying out this section for 
     a fiscal year may be provided for any 1 project in that 
     fiscal year.
       ``(f) Federal Share.--The total amount of a grant awarded 
     under this section for a rail line relocation project shall 
     be 90 percent of the

[[Page 10938]]

     shared costs of the project, as determined under subsection 
     (g)(4).
       ``(g) State Share.--
       ``(1) Percentage.--A State shall pay 10 percent of the 
     shared costs of a project that is funded in part by a grant 
     awarded under this section.
       ``(2) Forms of contributions.--The share required by 
     paragraph (1) may be paid in cash or in kind.
       ``(3) In-kind contributions.--The in-kind contributions 
     that are permitted to be counted under paragraph (2) for a 
     project for a State are as follows:
       ``(A) A contribution of real property or tangible personal 
     property (whether provided by the State or a person for the 
     State).
       ``(B) A contribution of the services of employees of the 
     State, calculated on the basis of costs incurred by the State 
     for the pay and benefits of the employees, but excluding 
     overhead and general administrative costs.
       ``(C) A payment of any costs that were incurred for the 
     project before the filing of an application for a grant for 
     the project under this section, and any in-kind contributions 
     that were made for the project before the filing of the 
     application, if and to the extent that the costs were 
     incurred or in-kind contributions were made, as the case may 
     be, to comply with a provision of a statute required to be 
     satisfied in order to carry out the project.
       ``(4) Costs not shared.--
       ``(A) In general.--For the purposes of subsection (f) and 
     this subsection, the shared costs of a project in a 
     municipality do not include any cost that is defrayed with 
     any funds or in-kind contribution that a source other than 
     the municipality makes available for the use of the 
     municipality without imposing at least 1 of the following 
     conditions:
       ``(i) The condition that the municipality use the funds or 
     contribution only for the project.
       ``(ii) The condition that the availability of the funds or 
     contribution to the municipality is contingent on the 
     execution of the project.
       ``(B) Determinations of the secretary.--The Secretary shall 
     determine the amount of the costs, if any, that are not 
     shared costs under this paragraph and the total amount of the 
     shared costs. A determination of the Secretary shall be 
     final.
       ``(h) Multistate Agreements To Combine Amounts.--Two or 
     more States (not including political subdivisions of States) 
     may, pursuant to an agreement entered into by the States, 
     combine any part of the amounts provided through grants for a 
     project under this section if--
       ``(1) the project will benefit each of the States entering 
     into the agreement; and
       ``(2) the agreement is not a violation of a law of any such 
     State.
       ``(i) Regulations.--The Secretary shall prescribe 
     regulations for carrying out this section.
       ``(j) State Defined.--In this section, the term `State' 
     includes, except as otherwise specifically provided, a 
     political subdivision of a State.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary for use in 
     carrying out this section $350,000,000 for each of the fiscal 
     years 2004 through 2008.''.
       (2) Clerical amendment.--The chapter analysis for such 
     chapter is amended by adding at the end the following:

``20154. Capital grants for rail line relocation projects.''.

       (b) Regulations.--
       (1) Interim regulations.--Not later than October 1, 2003, 
     the Secretary of Transportation shall issue temporary 
     regulations to implement the grant program under section 
     20154 of title 49, United States Code, as added by subsection 
     (a). Subchapter II of chapter 5 of title 5, United States 
     Code, shall not apply to the issuance of a temporary 
     regulation under this subsection or of any amendment of such 
     a temporary regulation.
       (2) Final regulations.--Not later than April 1, 2004, the 
     Secretary shall issue final regulations implementing the 
     program.

     SEC. 4662. USE OF CONGESTION MITIGATION AND AIR QUALITY 
                   IMPROVEMENT FUNDS FOR BOSTON TO PORTLAND 
                   PASSENGER RAIL SERVICE.

       Notwithstanding any other provision of law, funds 
     authorized to be appropriated under section 1101(5) that are 
     made available to the State of Maine may be used to support, 
     through December 15, 2006, the operation of passenger rail 
     service between Boston, Massachusetts, and Portland, Maine.

     TITLE V--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION

     SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This title may be cited as the ``Highway 
     Reauthorization and Excise Tax Simplification Act of 2004''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this title an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

                 Subtitle A--Trust Fund Reauthorization

     SEC. 5001. EXTENSION OF HIGHWAY TRUST FUND AND AQUATIC 
                   RESOURCES TRUST FUND EXPENDITURE AUTHORITY AND 
                   RELATED TAXES.

       (a) Highway Trust Fund Expenditure Authority.--
       (1) Highway account.--Paragraph (1) of section 9503(c) 
     (relating to transfers from Highway Trust Fund for certain 
     repayments and credits) is amended--
       (A) in the matter before subparagraph (A), by striking 
     ``March 1, 2004'' and inserting ``October 1, 2009'',
       (B) by striking ``or'' at the end of subparagraph (E),
       (C) by striking the period at the end of subparagraph (F) 
     and inserting ``, or'',
       (D) by inserting after subparagraph (F), the following new 
     subparagraph:
       ``(G) authorized to be paid out of the Highway Trust Fund 
     under the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004.'', and
       (E) in the matter after subparagraph (G), as added by 
     subparagraph (D), by striking ``Surface Transportation 
     Extension Act of 2003'' and inserting ``Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004''.
       (2) Mass transit account.--Paragraph (3) of section 9503(e) 
     (relating to establishment of Mass Transit Account) is 
     amended--
       (A) in the matter before subparagraph (A), by striking 
     ``March 1, 2004'' and inserting ``October 1, 2009'',
       (B) by striking ``or'' at the end of subparagraph (C),
       (C) by striking the period at the end of subparagraph (D) 
     and inserting ``, or'',
       (D) by inserting after subparagraph (D), the following new 
     subparagraph:
       ``(E) the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004,'', and
       (E) in the matter after subparagraph (E), as added by 
     subparagraph (D), by striking ``Surface Transportation 
     Extension Act of 2003'' and inserting ``Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004''.
       (3) Exception to limitation on transfers.--Subparagraph (B) 
     of section 9503(b)(5) (relating to limitation on transfers to 
     Highway Trust Fund) is amended by striking ``March 1, 2004'' 
     and inserting ``October 1, 2009''.
       (b) Aquatic Resources Trust Fund Expenditure Authority.--
       (1) Sport fish restoration account.--Paragraph (2) of 
     section 9504(b) (relating to Sport Fish Restoration Account) 
     is amended by striking ``Surface Transportation Extension Act 
     of 2003'' each place it appears and inserting ``Safe, 
     Accountable, Flexible, and Efficient Transportation Equity 
     Act of 2004''.
       (2) Boat safety account.--Section 9504(c) (relating to 
     expenditures from Boat Safety Account) is amended--
       (A) by striking ``March 1, 2004'' and inserting ``October 
     1, 2009'', and
       (B) by striking ``Surface Transportation Extension Act of 
     2003'' and inserting ``Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004''.
       (3) Exception to limitation on transfers.--Paragraph (2) of 
     section 9504(d) (relating to limitation on transfers to 
     Aquatic Resources Trust Fund) is amended by striking ``March 
     1, 2004'' and inserting ``October 1, 2009''.
       (4) Technical correction.--The last sentence of paragraph 
     (2) of section 9504(b) is amended by striking ``subparagraph 
     (B)'', and inserting ``subparagraph (C)''.
       (c) Extension of Taxes.--
       (1) In general.--The following provisions are each amended 
     by striking ``2005'' each place it appears and inserting 
     ``2009'':
       (A) Section 4041(a)(1)(C)(iii)(I) (relating to rate of tax 
     on certain buses).
       (B) Section 4041(a)(2)(B) (relating to rate of tax on 
     special motor fuels).
       (C) Section 4041(m)(1)(A) (relating to certain alcohol 
     fuels produced from natural gas).
       (D) Section 4051(c) (relating to termination of tax on 
     heavy trucks and trailers).
       (E) Section 4071(d) (relating to termination of tax on 
     tires).
       (F) Section 4081(d)(1) (relating to termination of tax on 
     gasoline, diesel fuel, and kerosene).
       (G) Section 4481(e) (relating to period tax in effect).
       (H) Section 4482(c)(4) (relating to taxable period).
       (I) Section 4482(d) (relating to special rule for taxable 
     period in which termination date occurs).
       (2) Floor stocks refunds.--Section 6412(a)(1) (relating to 
     floor stocks refunds) is amended--
       (A) by striking ``2005'' each place it appears and 
     inserting ``2009'', and
       (B) by striking ``2006'' each place it appears and 
     inserting ``2010''.
       (d) Extension of Certain Exemptions.--The following 
     provisions are each amended by striking ``2005'' and 
     inserting ``2009'':
       (1) Section 4221(a) (relating to certain tax-free sales).
       (2) Section 4483(g) (relating to termination of exemptions 
     for highway use tax).
       (e) Extension of Deposits Into, and Certain Transfers From, 
     Trust Fund.--
       (1) In general.--Subsections (b), (c)(2), (c)(3), 
     (c)(4)(A)(i), and (c)(5)(A) of section 9503 (relating to the 
     Highway Trust Fund) are amended--
       (A) by striking ``2005'' each place it appears and 
     inserting ``2009'', and
       (B) by striking ``2006'' each place it appears and 
     inserting ``2010''.
       (2) Conforming amendments to land and water conservation 
     fund.--Section 201(b) of the Land and Water Conservation Fund 
     Act of 1965 (16 U.S.C. 460l-11(b)) is amended--
       (A) by striking ``2003'' and inserting ``2007'', and
       (B) by striking ``2004'' each place it appears and 
     inserting ``2008''.
       (f) Extension of Tax Benefits for Qualified Methanol and 
     Ethanol Fuel Produced From Coal.--Section 4041(b)(2) 
     (relating to

[[Page 10939]]

     qualified methanol and ethanol fuel) is amended--
       (1) by striking ``2007'' in subparagraph (C)(ii) and 
     inserting ``2010'', and
       (2) by striking ``October 1, 2007'' in subparagraph (D) and 
     inserting ``January 1, 2011''.
       (g) Prohibition on Use of Highway Account for Rail 
     Projects.--Section 9503(c) (relating to transfers from 
     Highway Trust Fund for certain repayments and credits) is 
     amended by adding at the end the following new paragraph:
       ``(6) Prohibition on use of highway account for certain 
     rail projects.--With respect to rail projects beginning after 
     the date of the enactment of this paragraph, no amount shall 
     be available from the Highway Account (as defined in 
     subsection (e)(5)(B)) for any rail project, except for any 
     rail project involving publicly owned rail facilities or any 
     rail project yielding a public benefit.''.
       (h) Highway Trust Fund Expenditures for Highway Use Tax 
     Evasion Projects.--Section 9503(c), as amended by subsection 
     (g), is amended to add at the end the following new 
     paragraph:
       ``(7) Highway use tax evasion projects.--From amounts 
     available in the Highway Trust Fund, there is authorized to 
     be expended--
       ``(A) for each fiscal year after 2003 to the Internal 
     Revenue Service--
       ``(i) $30,000,000 for enforcement of fuel tax compliance, 
     including the per-certification of tax-exempt users,
       ``(ii) $10,000,000 for Xstars, and
       ``(iii) $10,000,000 for xfirs, and
       ``(B) for each fiscal year after 2003 to the Federal 
     Highway Administration, $50,000,000 to be allocated 
     $1,000,000 to each State to combat fuel tax evasion on the 
     State level.''.
       (i) Effective Date.--The amendments made by and provisions 
     of this section shall take effect on the date of the 
     enactment of this Act.

     SEC. 5002. FULL ACCOUNTING OF FUNDS RECEIVED BY THE HIGHWAY 
                   TRUST FUND.

       (a) In General.--Section 9503(c) (relating to transfers 
     from Highway Trust Fund for certain repayments and credits), 
     as amended by section 5001 of this Act, is amended by 
     striking paragraph (2) and redesignating paragraphs (3), (4), 
     (5), (6), and (7) as paragraphs (2), (3), (4), (5), and (6), 
     respectively.
       (b) Interest on Unexpended Balances Credited to Trust 
     Fund.--Section 9503 (relating to the Highway Trust Fund) is 
     amended by striking subsection (f).
       (c) Conforming Amendments.--
       (1) Section 9503(b)(4)(D) is amended by striking 
     ``paragraph (4)(D) or (5)(B)'' and inserting ``paragraph 
     (3)(D) or (4)(B)''.
       (2) Paragraph (2) of section 9503(c) (as redesignated by 
     subsection (a)) is amended by adding at the end the following 
     new sentence: ``The amounts payable from the Highway Trust 
     Fund under this paragraph shall be determined by taking into 
     account only the portion of the taxes which are deposited 
     into the Highway Trust Fund.''.
       (3) Section 9504(a)(2) is amended by striking ``section 
     9503(c)(4), section 9503(c)(5)'' and inserting ``section 
     9503(c)(3), section 9503(c)(4)''.
       (4) Paragraph (2) of section 9504(b), as amended by section 
     5001 of this Act, is amended by striking ``section 
     9503(c)(5)'' and inserting ``section 9503(c)(4)''.
       (5) Section 9504(e) is amended by striking ``section 
     9503(c)(4)'' and inserting ``section 9503(c)(3)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to amounts paid 
     for which no transfer from the Highway Trust Fund has been 
     made before April 1, 2004.
       (2) Interest credited.--The amendment made by subsection 
     (b) shall take effect on the date of the enactment of this 
     Act.

     SEC. 5003. MODIFICATION OF ADJUSTMENTS OF APPORTIONMENTS.

       (a) In General.--Section 9503(d) (relating to adjustments 
     for apportionments) is amended--
       (1) by striking ``24-month'' in paragraph (1)(B) and 
     inserting ``48-month'', and
       (2) by striking ``2 years''' in the heading for paragraph 
     (3) and inserting ``4 years'''.
       (b) Measurement of Net Highway Receipts.--Section 9503(d) 
     is amended by redesignating paragraph (6) as paragraph (7) 
     and by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) Measurement of net highway receipts.--For purposes of 
     making any estimate under paragraph (1) of net highway 
     receipts for periods ending after the date specified in 
     subsection (b)(1), the Secretary shall treat--
       ``(A) each expiring provision of subsection (b) which is 
     related to appropriations or transfers to the Highway Trust 
     Fund to have been extended through the end of the 48-month 
     period referred to in paragraph (1)(B), and
       ``(B) with respect to each tax imposed under the sections 
     referred to in subsection (b)(1), the rate of such tax during 
     the 48-month period referred to in paragraph (1)(B) to be the 
     same as the rate of such tax as in effect on the date of such 
     estimate.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

            Subtitle B--Volumetric Ethanol Excise Tax Credit

     SEC. 5101. SHORT TITLE.

       This subtitle may be cited as the ``Volumetric Ethanol 
     Excise Tax Credit (VEETC) Act of 2004''.

     SEC. 5102. ALCOHOL AND BIODIESEL EXCISE TAX CREDIT AND 
                   EXTENSION OF ALCOHOL FUELS INCOME TAX CREDIT.

       (a) In General.--Subchapter B of chapter 65 (relating to 
     rules of special application) is amended by inserting after 
     section 6425 the following new section:

     ``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

       ``(a) Allowance of Credits.--There shall be allowed as a 
     credit against the tax imposed by section 4081 an amount 
     equal to the sum of--
       ``(1) the alcohol fuel mixture credit, plus
       ``(2) the biodiesel mixture credit.
       ``(b) Alcohol Fuel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     alcohol fuel mixture credit is the product of the applicable 
     amount and the number of gallons of alcohol used by the 
     taxpayer in producing any alcohol fuel mixture for sale or 
     use in a trade or business of the taxpayer.
       ``(2) Applicable amount.--For purposes of this subsection--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 52 cents (51 cents in the case of 
     any sale or use after 2004).
       ``(B) Mixtures not containing ethanol.--In the case of an 
     alcohol fuel mixture in which none of the alcohol consists of 
     ethanol, the applicable amount is 60 cents.
       ``(3) Alcohol fuel mixture.--For purposes of this 
     subsection, the term `alcohol fuel mixture' means a mixture 
     of alcohol and a taxable fuel which--
       ``(A) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel,
       ``(B) is used as a fuel by the taxpayer producing such 
     mixture, or
       ``(C) is removed from the refinery by a person producing 
     such mixture.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Alcohol.--The term `alcohol' includes methanol and 
     ethanol but does not include--
       ``(i) alcohol produced from petroleum, natural gas, or coal 
     (including peat), or
       ``(ii) alcohol with a proof of less than 190 (determined 
     without regard to any added denaturants).

     Such term also includes an alcohol gallon equivalent of ethyl 
     tertiary butyl ether or other ethers produced from such 
     alcohol.
       ``(B) Taxable fuel.--The term `taxable fuel' has the 
     meaning given such term by section 4083(a)(1).
       ``(5) Termination.--This subsection shall not apply to any 
     sale, use, or removal for any period after December 31, 2010.
       ``(c) Biodiesel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     biodiesel mixture credit is the product of the applicable 
     amount and the number of gallons of biodiesel used by the 
     taxpayer in producing any biodiesel mixture for sale or use 
     in a trade or business of the taxpayer.
       ``(2) Applicable amount.--For purposes of this subsection--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 50 cents.
       ``(B) Amount for agri-biodiesel.--In the case of any 
     biodiesel which is agri-biodiesel, the applicable amount is 
     $1.00.
       ``(3) Biodiesel mixture.--For purposes of this section, the 
     term `biodiesel mixture' means a mixture of biodiesel and 
     diesel fuel (as defined in section 4083(a)(3)), determined 
     without regard to any use of kerosene, which--
       ``(A) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel,
       ``(B) is used as a fuel by the taxpayer producing such 
     mixture, or
       ``(C) is removed from the refinery by a person producing 
     such mixture.
       ``(4) Certification for biodiesel.--No credit shall be 
     allowed under this section unless the taxpayer obtains a 
     certification (in such form and manner as prescribed by the 
     Secretary) from the producer of the biodiesel which 
     identifies the product produced and the percentage of 
     biodiesel and agri-biodiesel in the product.
       ``(5) Other definitions.--Any term used in this subsection 
     which is also used in section 40A shall have the meaning 
     given such term by section 40A.
       ``(6) Termination.--This subsection shall not apply to any 
     sale, use, or removal for any period after December 31, 2006.
       ``(d) Mixture not used as a fuel, etc.--
       ``(1) Imposition of tax.--If--
       ``(A) any credit was determined under this section with 
     respect to alcohol or biodiesel used in the production of any 
     alcohol fuel mixture or biodiesel mixture, respectively, and
       ``(B) any person--
       ``(i) separates the alcohol or biodiesel from the mixture, 
     or
       ``(ii) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the applicable amount and the number of 
     gallons of such alcohol or biodiesel.
       ``(2) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     paragraph (1) as if such tax were imposed by section 4081 and 
     not by this section.
       ``(e) Coordination With Exemption From Excise Tax.--Rules 
     similar to the rules under section 40(c) shall apply for 
     purposes of this section.''.
       (b) Registration Requirement.--Section 4101(a)(1) (relating 
     to registration), as amended by sections 5211 and 5242 of 
     this Act, is amended

[[Page 10940]]

     by inserting ``and every person producing or importing 
     biodiesel (as defined in section 40A(d)(1)) or alcohol (as 
     defined in section 6426(b)(4)(A))'' after ``4081''.
       (c) Additional Amendments.--
       (1) Section 40(c) is amended by striking ``subsection 
     (b)(2), (k), or (m) of section 4041, section 4081(c), or 
     section 4091(c)'' and inserting ``section 4041(b)(2), section 
     6426, or section 6427(e)''.
       (2) Paragraph (4) of section 40(d) is amended to read as 
     follows:
       ``(4) Volume of alcohol.--For purposes of determining under 
     subsection (a) the number of gallons of alcohol with respect 
     to which a credit is allowable under subsection (a), the 
     volume of alcohol shall include the volume of any denaturant 
     (including gasoline) which is added under any formulas 
     approved by the Secretary to the extent that such denaturants 
     do not exceed 5 percent of the volume of such alcohol 
     (including denaturants).''.
       (3) Section 40(e)(1) is amended--
       (A) by striking ``2007'' in subparagraph (A) and inserting 
     ``2010'', and
       (B) by striking ``2008'' in subparagraph (B) and inserting 
     ``2011''.
       (4) Section 40(h) is amended--
       (A) by striking ``2007'' in paragraph (1) and inserting 
     ``2010'', and
       (B) by striking ``, 2006, or 2007'' in the table contained 
     in paragraph (2) and inserting ``through 2010''.
       (5) Section 4041(b)(2)(B) is amended by striking ``a 
     substance other than petroleum or natural gas'' and inserting 
     ``coal (including peat)''.
       (6) Section 4041 is amended by striking subsection (k).
       (7) Section 4081 is amended by striking subsection (c).
       (8) Paragraph (2) of section 4083(a) is amended to read as 
     follows:
       ``(2) Gasoline.--The term `gasoline'--
       ``(A) includes any gasoline blend, other than qualified 
     methanol or ethanol fuel (as defined in section 
     4041(b)(2)(B)), partially exempt methanol or ethanol fuel (as 
     defined in section 4041(m)(2)), or a denatured alcohol, and
       ``(B) includes, to the extent prescribed in regulations--
       ``(i) any gasoline blend stock, and
       ``(ii) any product commonly used as an additive in gasoline 
     (other than alcohol).
     For purposes of subparagraph (B)(i), the term `gasoline blend 
     stock' means any petroleum product component of gasoline.''.
       (9) Section 6427 is amended by inserting after subsection 
     (d) the following new subsection:
       ``(e) Alcohol or Biodiesel Used To Produce Alcohol Fuel and 
     Biodiesel Mixtures or Used as Fuels.--Except as provided in 
     subsection (k)--
       ``(1) Used to produce a mixture.--If any person produces a 
     mixture described in section 6426 in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the alcohol fuel mixture credit or 
     the biodiesel mixture credit with respect to such mixture.
       ``(2) Used as fuel.--If alcohol (as defined in section 
     40(d)(1)) or biodiesel (as defined in section 40A(d)(1)) or 
     agri-biodiesel (as defined in section 40A(d)(2)) which is not 
     in a mixture described in section 6426--
       ``(A) is used by any person as a fuel in a trade or 
     business, or
       ``(B) is sold by any person at retail to another person and 
     placed in the fuel tank of such person's vehicle,

     the Secretary shall pay (without interest) to such person an 
     amount equal to the alcohol credit (as determined under 
     section 40(b)(2)) or the biodiesel credit (as determined 
     under section 40A(b)(2)) with respect to such fuel.
       ``(3) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any mixture with respect to which an amount is allowed as a 
     credit under section 6426.
       ``(4) Termination.--This subsection shall not apply with 
     respect to--
       ``(A) any alcohol fuel mixture (as defined in section 
     6426(b)(3)) or alcohol (as so defined) sold or used after 
     December 31, 2010, and
       ``(B) any biodiesel mixture (as defined in section 
     6426(c)(3)) or biodiesel (as so defined) or agri-biodiesel 
     (as so defined) sold or used after December 31, 2006.''.
       (10) Section 6427(i)(3) is amended--
       (A) by striking ``subsection (f)'' both places it appears 
     in subparagraph (A) and inserting ``subsection (e)(1)'',
       (B) by striking ``gasoline, diesel fuel, or kerosene used 
     to produce a qualified alcohol mixture (as defined in section 
     4081(c)(3))'' in subparagraph (A) and inserting ``a mixture 
     described in section 6426'',
       (C) by adding at the end of subparagraph (A) the following 
     new flush sentence:

     ``In the case of an electronic claim, this subparagraph shall 
     be applied without regard to clause (i).'',
       (D) by striking ``subsection (f)(1)'' in subparagraph (B) 
     and inserting ``subsection (e)(1)'',
       (E) by striking ``20 days of the date of the filing of such 
     claim'' in subparagraph (B) and inserting ``45 days of the 
     date of the filing of such claim (20 days in the case of an 
     electronic claim)'', and
       (F) by striking ``alcohol mixture'' in the heading and 
     inserting ``alcohol fuel and biodiesel mixture''.
       (11) Section 9503(b)(1) is amended by adding at the end the 
     following new flush sentence:

     ``For purposes of this paragraph, taxes received under 
     sections 4041 and 4081 shall be determined without reduction 
     for credits under section 6426.''.
       (12) Section 9503(b)(4), as amended by section 5101 of this 
     Act, is amended--
       (A) by adding ``or'' at the end of subparagraph (C),
       (B) by striking the comma at the end of subparagraph 
     (D)(iii) and inserting a period, and
       (C) by striking subparagraphs (E) and (F).
       (13) The table of sections for subchapter B of chapter 65 
     is amended by inserting after the item relating to section 
     6425 the following new item:

``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.

       (14) Tariff schedule.--Headings 9901.00.50 and 9901.00.52 
     of the Harmonized Tariff Schedule of the United States (19 
     U.S.C. 3007) are each amended in the effective period column 
     by striking ``10/1/2007'' each place it appears and inserting 
     ``1/1/2011''.
       (d) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel sold or used after September 30, 2004.
       (2) Registration requirement.--The amendment made by 
     subsection (b) shall take effect on April 1, 2005.
       (3) Extension of alcohol fuels credit.--The amendments made 
     by paragraphs (3), (4), and (14) of subsection (c) shall take 
     effect on the date of the enactment of this Act.
       (4) Repeal of general fund retention of certain alcohol 
     fuels taxes.--The amendments made by subsection (c)(12) shall 
     apply to fuel sold or used after September 30, 2003.
       (e) Format for Filing.--The Secretary of the Treasury shall 
     describe the electronic format for filing claims described in 
     section 6427(i)(3)(B) of the Internal Revenue Code of 1986 
     (as amended by subsection (c)(10)(C)) not later than 
     September 30, 2004.

     SEC. 5103. BIODIESEL INCOME TAX CREDIT.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by inserting after section 40 the following new section:

     ``SEC. 40A. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the sum of--
       ``(1) the biodiesel mixture credit, plus
       ``(2) the biodiesel credit.
       ``(b) Definition of Biodiesel Mixture Credit and Biodiesel 
     Credit.--For purposes of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is 50 cents for each gallon of 
     biodiesel used by the taxpayer in the production of a 
     qualified biodiesel mixture.
       ``(B) Qualified biodiesel mixture.--The term `qualified 
     biodiesel mixture' means a mixture of biodiesel and diesel 
     fuel (as defined in section 4083(a)(3)), determined without 
     regard to any use of kerosene, which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(C) Sale or use must be in trade or business, etc.--
     Biodiesel used in the production of a qualified biodiesel 
     mixture shall be taken into account--
       ``(i) only if the sale or use described in subparagraph (B) 
     is in a trade or business of the taxpayer, and
       ``(ii) for the taxable year in which such sale or use 
     occurs.
       ``(D) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(2) Biodiesel credit.--
       ``(A) In general.--The biodiesel credit of any taxpayer for 
     any taxable year is 50 cents for each gallon of biodiesel 
     which is not in a mixture with diesel fuel and which during 
     the taxable year--
       ``(i) is used by the taxpayer as a fuel in a trade or 
     business, or
       ``(ii) is sold by the taxpayer at retail to a person and 
     placed in the fuel tank of such person's vehicle.
       ``(B) User credit not to apply to biodiesel sold at 
     retail.--No credit shall be allowed under subparagraph (A)(i) 
     with respect to any biodiesel which was sold in a retail sale 
     described in subparagraph (A)(ii).
       ``(3) Credit for agri-biodiesel.--In the case of any 
     biodiesel which is agri-biodiesel, paragraphs (1)(A) and 
     (2)(A) shall be applied by substituting `$1.00' for `50 
     cents'.
       ``(4) Certification for biodiesel.--No credit shall be 
     allowed under this section unless the taxpayer obtains a 
     certification (in such form and manner as prescribed by the 
     Secretary) from the producer or importer of the biodiesel 
     which identifies the product produced and the percentage of 
     biodiesel and agri-biodiesel in the product.
       ``(c) Coordination With Credit Against Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any biodiesel shall be properly reduced to take 
     into account any benefit provided with respect to such 
     biodiesel solely by reason of the application of section 6426 
     or 6427(e).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel.--The term `biodiesel' means the monoalkyl 
     esters of long chain fatty acids derived from plant or animal 
     matter which meet--
       ``(A) the registration requirements for fuels and fuel 
     additives established by the Environmental Protection Agency 
     under section 211 of the Clean Air Act (42 U.S.C. 7545), and

[[Page 10941]]

       ``(B) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Agri-biodiesel.--The term `agri-biodiesel' means 
     biodiesel derived solely from virgin oils, including esters 
     derived from virgin vegetable oils from corn, soybeans, 
     sunflower seeds, cottonseeds, canola, crambe, rapeseeds, 
     safflowers, flaxseeds, rice bran, and mustard seeds, and from 
     animal fats.
       ``(3) Mixture or biodiesel not used as a fuel, etc.--
       ``(A) Mixtures.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel used in the production of any qualified 
     biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates the biodiesel from the mixture, or
       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the rate applicable under subsection (b)(1)(A) 
     and the number of gallons of such biodiesel in such mixture.
       ``(B) Biodiesel.--If--
       ``(i) any credit was determined under this section with 
     respect to the retail sale of any biodiesel, and
       ``(ii) any person mixes such biodiesel or uses such 
     biodiesel other than as a fuel,
     then there is hereby imposed on such person a tax equal to 
     the product of the rate applicable under subsection (b)(2)(A) 
     and the number of gallons of such biodiesel.
       ``(C) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) or (B) as if such tax were imposed by 
     section 4081 and not by this chapter.
       ``(4) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     sale or use after December 31, 2006.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit) is 
     amended by striking ``plus'' at the end of paragraph (14), by 
     striking the period at the end of paragraph (15) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(16) the biodiesel fuels credit determined under section 
     40A(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d) is amended by adding at the end the 
     following new paragraph:
       ``(11) No carryback of biodiesel fuels credit before 
     effective date.--No portion of the unused business credit for 
     any taxable year which is attributable to the biodiesel fuels 
     credit determined under section 40A may be carried back to a 
     taxable year ending on or before September 30, 2004.''.
       (2)(A) Section 87 is amended to read as follows:

     ``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.

       ``Gross income includes--
       ``(1) the amount of the alcohol fuels credit determined 
     with respect to the taxpayer for the taxable year under 
     section 40(a), and
       ``(2) the biodiesel fuels credit determined with respect to 
     the taxpayer for the taxable year under section 40A(a).''.
       (B) The item relating to section 87 in the table of 
     sections for part II of subchapter B of chapter 1 is amended 
     by striking ``fuel credit'' and inserting ``and biodiesel 
     fuels credits''.
       (3) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40A(a).''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 is amended by adding after the item 
     relating to section 40 the following new item:

``Sec. 40A. Biodiesel used as fuel.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel produced, and sold or used, after 
     September 30, 2004, in taxable years ending after such date.

                   Subtitle C--Fuel Fraud Prevention

     SEC. 5200. SHORT TITLE.

       This subtitle may be cited as the ``Fuel Fraud Prevention 
     Act of 2004''.

                       PART I--AVIATION JET FUEL

     SEC. 5211. TAXATION OF AVIATION-GRADE KEROSENE.

       (a) Rate of Tax.--
       (1) In general.--Subparagraph (A) of section 4081(a)(2) is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) in the case of aviation-grade kerosene, 21.8 cents 
     per gallon.''.
       (2) Commercial aviation.--Paragraph (2) of section 4081(a) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Taxes imposed on fuel used in commercial aviation.--
     In the case of aviation-grade kerosene which is removed from 
     any refinery or terminal directly into the fuel tank of an 
     aircraft for use in commercial aviation, the rate of tax 
     under subparagraph (A)(iv) shall be 4.3 cents per gallon.''.
       (3) Nontaxable uses.--
       (A) In general.--Section 4082 is amended by redesignating 
     subsections (e) and (f) as subsections (f) and (g), 
     respectively, and by inserting after subsection (d) the 
     following new subsection:
       ``(e) Aviation-Grade Kerosene.--In the case of aviation-
     grade kerosene which is exempt from the tax imposed by 
     section 4041(c) (other than by reason of a prior imposition 
     of tax) and which is removed from any refinery or terminal 
     directly into the fuel tank of an aircraft, the rate of tax 
     under section 4081(a)(2)(A)(iv) shall be zero.''.
       (B) Conforming amendments.--
       (i) Subsection (b) of section 4082 is amended by adding at 
     the end the following new flush sentence: ``The term 
     `nontaxable use' does not include the use of aviation-grade 
     kerosene in an aircraft.''.
       (ii) Section 4082(d) is amended by striking paragraph (1) 
     and by redesignating paragraphs (2) and (3) as paragraphs (1) 
     and (2), respectively.
       (4) Nonaircraft use of aviation-grade kerosene.--
       (A) In general.--Subparagraph (B) of section 4041(a)(1) is 
     amended by adding at the end the following new sentence: 
     ``This subparagraph shall not apply to aviation-grade 
     kerosene.''.
       (B) Conforming amendment.--The heading for paragraph (1) of 
     section 4041(a) is amended by inserting ``and kerosene'' 
     after ``diesel fuel''.
       (b) Commercial Aviation.--Section 4083 is amended 
     redesignating subsections (b) and (c) as subsections (c) and 
     (d), respectively, and by inserting after subsection (a) the 
     following new subsection:
       ``(b) Commercial Aviation.--For purposes of this subpart, 
     the term `commercial aviation' means any use of an aircraft 
     in a business of transporting persons or property for 
     compensation or hire by air, unless properly allocable to any 
     transportation exempt from the taxes imposed by section 4261 
     and 4271 by reason of section 4281 or 4282 or by reason of 
     section 4261(h).''.
       (c) Refunds.--
       (1) In general.--Paragraph (4) of section 6427(l) is 
     amended to read as follows:
       ``(4) Refunds for aviation-grade kerosene.--
       ``(A) No refund of certain taxes on fuel used in commercial 
     aviation.--In the case of aviation-grade kerosene used in 
     commercial aviation (as defined in section 4083(b)) (other 
     than supplies for vessels or aircraft within the meaning of 
     section 4221(d)(3)), paragraph (1) shall not apply to so much 
     of the tax imposed by section 4081 as is attributable to--
       ``(i) the Leaking Underground Storage Tank Trust Fund 
     financing rate imposed by such section, and
       ``(ii) so much of the rate of tax specified in section 
     4081(a)(2)(A)(iv) as does not exceed 4.3 cents per gallon.
       ``(B) Payment to ultimate, registered vendor.--With respect 
     to aviation-grade kerosene, if the ultimate purchaser of such 
     kerosene waives (at such time and in such form and manner as 
     the Secretary shall prescribe) the right to payment under 
     paragraph (1) and assigns such right to the ultimate vendor, 
     then the Secretary shall pay the amount which would be paid 
     under paragraph (1) to such ultimate vendor, but only if such 
     ultimate vendor--
       ``(i) is registered under section 4101, and
       ``(ii) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.
       (2) Time for filing claims.--Paragraph (4) of section 
     6427(i) is amended by striking ``subsection (l)(5)'' and 
     inserting ``paragraph (4)(B) or (5) of subsection (l)''.
       (3) Conforming amendment.--Subparagraph (B) of section 
     6427(l)(2) is amended to read as follows:
       ``(B) in the case of aviation-grade kerosene--
       ``(i) any use which is exempt from the tax imposed by 
     section 4041(c) other than by reason of a prior imposition of 
     tax, or
       ``(ii) any use in commercial aviation (within the meaning 
     of section 4083(b)).''.
       (d) Repeal of Prior Taxation of Aviation Fuel.--
       (1) In general.--Part III of subchapter A of chapter 32 is 
     amended by striking subpart B and by redesignating subpart C 
     as subpart B.
       (2) Conforming amendments.--
       (A) Section 4041(c) is amended to read as follows:
       ``(c) Aviation-Grade Kerosene.--
       ``(1) In general.--There is hereby imposed a tax upon 
     aviation-grade kerosene--
       ``(A) sold by any person to an owner, lessee, or other 
     operator of an aircraft for use in such aircraft, or
       ``(B) used by any person in an aircraft unless there was a 
     taxable sale of such fuel under subparagraph (A).
       ``(2) Exemption for previously taxed fuel.--No tax shall be 
     imposed by this subsection on the sale or use of any 
     aviation-grade kerosene if tax was imposed on such liquid 
     under section 4081 and the tax thereon was not credited or 
     refunded.
       ``(3) Rate of tax.--The rate of tax imposed by this 
     subsection shall be the rate of tax specified in section 
     4081(a)(2)(A)(iv) which is in effect at the time of such sale 
     or use.''.
       (B) Section 4041(d)(2) is amended by striking ``section 
     4091'' and inserting ``section 4081''.
       (C) Section 4041 is amended by striking subsection (e).
       (D) Section 4041 is amended by striking subsection (i).
       (E) Section 4041(m)(1) is amended to read as follows:
       ``(1) In general.--In the case of the sale or use of any 
     partially exempt methanol or ethanol

[[Page 10942]]

     fuel, the rate of the tax imposed by subsection (a)(2) shall 
     be--
       ``(A) after September 30, 1997, and before September 30, 
     2009--
       ``(i) in the case of fuel none of the alcohol in which 
     consists of ethanol, 9.15 cents per gallon, and
       ``(ii) in any other case, 11.3 cents per gallon, and
       ``(B) after September 30, 2009--
       ``(i) in the case of fuel none of the alcohol in which 
     consists of ethanol, 2.15 cents per gallon, and
       ``(ii) in any other case, 4.3 cents per gallon.''.
       (F) Sections 4101(a), 4103, 4221(a), and 6206 are each 
     amended by striking ``, 4081, or 4091'' and inserting ``or 
     4081''.
       (G) Section 6416(b)(2) is amended by striking ``4091 or''.
       (H) Section 6416(b)(3) is amended by striking ``or 4091'' 
     each place it appears.
       (I) Section 6416(d) is amended by striking ``or to the tax 
     imposed by section 4091 in the case of refunds described in 
     section 4091(d)''.
       (J) Section 6427 is amended by striking subsection (f).
       (K) Section 6427(j)(1) is amended by striking ``, 4081, and 
     4091'' and inserting ``and 4081''.
       (L)(i) Section 6427(l)(1) is amended to read as follows:
       ``(1) In general.--Except as otherwise provided in this 
     subsection and in subsection (k), if any diesel fuel or 
     kerosene on which tax has been imposed by section 4041 or 
     4081 is used by any person in a nontaxable use, the Secretary 
     shall pay (without interest) to the ultimate purchaser of 
     such fuel an amount equal to the aggregate amount of tax 
     imposed on such fuel under section 4041 or 4081, as the case 
     may be, reduced by any refund paid to the ultimate vendor 
     under paragraph (4)(B).''.
       (ii) Paragraph (5)(B) of section 6427(l) is amended by 
     striking ``Paragraph (1)(A) shall not apply to kerosene'' and 
     inserting ``Paragraph (1) shall not apply to kerosene (other 
     than aviation-grade kerosene)''.
       (M) Subparagraph (B) of section 6724(d)(1) is amended by 
     striking clause (xv) and by redesignating the succeeding 
     clauses accordingly.
       (N) Paragraph (2) of section 6724(d) is amended by striking 
     subparagraph (W) and by redesignating the succeeding 
     subparagraphs accordingly.
       (O) Paragraph (1) of section 9502(b) is amended by adding 
     ``and'' at the end of subparagraph (B) and by striking 
     subparagraphs (C) and (D) and inserting the following new 
     subparagraph:
       ``(C) section 4081 with respect to aviation gasoline and 
     aviation-grade kerosene, and''.
       (P) The last sentence of section 9502(b) is amended to read 
     as follows:

     ``There shall not be taken into account under paragraph (1) 
     so much of the taxes imposed by section 4081 as are 
     determined at the rate specified in section 4081(a)(2)(B).''.
       (Q) Subsection (b) of section 9508 is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (R) Section 9508(c)(2)(A) is amended by striking ``sections 
     4081 and 4091'' and inserting ``section 4081''.
       (S) The table of subparts for part III of subchapter A of 
     chapter 32 is amended to read as follows:

``Subpart A. Motor and aviation fuels.
``Subpart B. Special provisions applicable to fuels tax.''.

       (T) The heading for subpart A of part III of subchapter A 
     of chapter 32 is amended to read as follows:

                ``Subpart A--Motor and Aviation Fuels''.

       (U) The heading for subpart B of part III of subchapter A 
     of chapter 32 is amended to read as follows:

       ``Subpart B--Special Provisions Applicable to Fuels Tax''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to aviation-grade kerosene removed, entered, or 
     sold after September 30, 2004.
       (f) Floor Stocks Tax.--
       (1) In general.--There is hereby imposed on aviation-grade 
     kerosene held on October 1, 2004, by any person a tax equal 
     to--
       (A) the tax which would have been imposed before such date 
     on such kerosene had the amendments made by this section been 
     in effect at all times before such date, reduced by
       (B) the tax imposed before such date under section 4091 of 
     the Internal Revenue Code of 1986, as in effect on the day 
     before the date of the enactment of this Act.
       (2) Liability for tax and method of payment.--
       (A) Liability for tax.--The person holding the kerosene on 
     October 1, 2004, to which the tax imposed by paragraph (1) 
     applies shall be liable for such tax.
       (B) Method and time for payment.--The tax imposed by 
     paragraph (1) shall be paid at such time and in such manner 
     as the Secretary of the Treasury shall prescribe, including 
     the nonapplication of such tax on de minimis amounts of 
     kerosene.
       (3) Transfer of floor stock tax revenues to trust funds.--
     For purposes of determining the amount transferred to any 
     trust fund, the tax imposed by this subsection shall be 
     treated as imposed by section 4081 of the Internal Revenue 
     Code of 1986--
       (A) at the Leaking Underground Storage Tank Trust Fund 
     financing rate under such section to the extent of 0.1 cents 
     per gallon, and
       (B) at the rate under section 4081(a)(2)(A)(iv) to the 
     extent of the remainder.
       (4) Held by a person.--For purposes of this section, 
     kerosene shall be considered as held by a person if title 
     thereto has passed to such person (whether or not delivery to 
     the person has been made).
       (5) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the tax 
     imposed by section 4081 of such Code shall, insofar as 
     applicable and not inconsistent with the provisions of this 
     subsection, apply with respect to the floor stock tax imposed 
     by paragraph (1) to the same extent as if such tax were 
     imposed by such section.

     SEC. 5212. TRANSFER OF CERTAIN AMOUNTS FROM THE AIRPORT AND 
                   AIRWAY TRUST FUND TO THE HIGHWAY TRUST FUND TO 
                   REFLECT HIGHWAY USE OF JET FUEL.

       (a) In General.--Section 9502(d) is amended by adding at 
     the end the following new paragraph:
       ``(7) Transfers from the trust fund to the highway trust 
     fund.--
       ``(A) In general.--The Secretary shall pay annually from 
     the Airport and Airway Trust Fund into the Highway Trust Fund 
     an amount (as determined by him) equivalent to amounts 
     received in the Airport and Airway Trust Fund which are 
     attributable to fuel that is used primarily for highway 
     transportation purposes.
       ``(B) Amounts transferred to mass transit account.--The 
     Secretary shall transfer 11 percent of the amounts paid into 
     the Highway Trust Fund under subparagraph (A) to the Mass 
     Transit Account established under section 9503(e).''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 9503 is amended--
       (A) by striking ``appropriated or credited'' and inserting 
     ``paid, appropriated, or credited'', and
       (B) by striking ``or section 9602(b)'' and inserting ``, 
     section 9502(d)(7), or section 9602(b)''.
       (2) Subsection (e)(1) of section 9503 is amended by 
     striking ``or section 9602(b)'' and inserting ``, section 
     9502(d)(7), or section 9602(b)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

                           PART II--DYED FUEL

     SEC. 5221. DYE INJECTION EQUIPMENT.

       (a) In General.--Section 4082(a)(2) (relating to exemptions 
     for diesel fuel and kerosene) is amended by inserting ``by 
     mechanical injection'' after ``indelibly dyed''.
       (b) Dye Injector Security.--Not later than June 30, 2004, 
     the Secretary of the Treasury shall issue regulations 
     regarding mechanical dye injection systems described in the 
     amendment made by subsection (a), and such regulations shall 
     include standards for making such systems tamper resistant.
       (c) Penalty for Tampering With or Failing To Maintain 
     Security Requirements for Mechanical Dye Injection Systems.--
       (1) In general.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties) is amended by adding after 
     section 6715 the following new section:

     ``SEC. 6715A. TAMPERING WITH OR FAILING TO MAINTAIN SECURITY 
                   REQUIREMENTS FOR MECHANICAL DYE INJECTION 
                   SYSTEMS.

       ``(a) Imposition of Penalty--
       ``(1) Tampering.--If any person tampers with a mechanical 
     dye injection system used to indelibly dye fuel for purposes 
     of section 4082, then such person shall pay a penalty in 
     addition to the tax (if any).
       ``(2) Failure to maintain security requirements.--If any 
     operator of a mechanical dye injection system used to 
     indelibly dye fuel for purposes of section 4082 fails to 
     maintain the security standards for such system as 
     established by the Secretary, then such operator shall pay a 
     penalty.
       ``(b) Amount of Penalty.--The amount of the penalty under 
     subsection (a) shall be--
       ``(1) for each violation described in paragraph (1), the 
     greater of--
       ``(A) $25,000, or
       ``(B) $10 for each gallon of fuel involved, and
       ``(2) for each--
       ``(A) failure to maintain security standards described in 
     paragraph (2), $1,000, and
       ``(B) failure to correct a violation described in paragraph 
     (2), $1,000 per day for each day after which such violation 
     was discovered or such person should have reasonably known of 
     such violation.
       ``(c) Joint and Several Liability.--
       ``(1) In general.--If a penalty is imposed under this 
     section on any business entity, each officer, employee, or 
     agent of such entity or other contracting party who willfully 
     participated in any act giving rise to such penalty shall be 
     jointly and severally liable with such entity for such 
     penalty.
       ``(2) Affiliated groups.--If a business entity described in 
     paragraph (1) is part of an affiliated group (as defined in 
     section 1504(a)), the parent corporation of such entity shall 
     be jointly and severally liable with such entity for the 
     penalty imposed under this section.''.
       (2) Clerical amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by adding after the 
     item related to section 6715 the following new item:

``Sec. 6715A. Tampering with or failing to maintain security 
              requirements for mechanical dye injection systems.''.

       (d) Effective Date.--The amendments made by subsections (a) 
     and (c) shall take effect 180 days after the date on which 
     the Secretary issues the regulations described in subsection 
     (b).

[[Page 10943]]



     SEC. 5222. ELIMINATION OF ADMINISTRATIVE REVIEW FOR TAXABLE 
                   USE OF DYED FUEL.

       (a) In General.--Section 6715 is amended by inserting at 
     the end the following new subsection:
       ``(e) No Administrative Appeal for Third and Subsequent 
     Violations.--In the case of any person who is found to be 
     subject to the penalty under this section after a chemical 
     analysis of such fuel and who has been penalized under this 
     section at least twice after the date of the enactment of 
     this subsection, no administrative appeal or review shall be 
     allowed with respect to such finding except in the case of a 
     claim regarding--
       ``(1) fraud or mistake in the chemical analysis, or
       ``(2) mathematical calculation of the amount of the 
     penalty.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to penalties assessed after the date of the 
     enactment of this Act.

     SEC. 5223. PENALTY ON UNTAXED CHEMICALLY ALTERED DYED FUEL 
                   MIXTURES.

       (a) In General.--Section 6715(a) (relating to dyed fuel 
     sold for use or used in taxable use, etc.) is amended by 
     striking ``or'' in paragraph (2), by inserting ``or'' at the 
     end of paragraph (3), and by inserting after paragraph (3) 
     the following new paragraph:
       ``(4) any person who has knowledge that a dyed fuel which 
     has been altered as described in paragraph (3) sells or holds 
     for sale such fuel for any use which the person knows or has 
     reason to know is not a nontaxable use of such fuel,''.
       (b) Conforming Amendment.--Section 6715(a)(3) is amended by 
     striking ``alters, or attempts to alter,'' and inserting 
     ``alters, chemically or otherwise, or attempts to so 
     alter,''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5224. TERMINATION OF DYED DIESEL USE BY INTERCITY BUSES.

       (a) In General.--Paragraph (3) of section 4082(b) (relating 
     to nontaxable use) is amended to read as follows:
       ``(3) any use described in section 
     4041(a)(1)(C)(iii)(II).''.
       (b) Ultimate Vendor Refund.--Subsection (b) of section 6427 
     is amended by adding at the end the following new paragraph:
       ``(4) Refunds for use of diesel fuel in certain intercity 
     buses.--
       ``(A) In general.--With respect to any fuel to which 
     paragraph (2)(A) applies, if the ultimate purchaser of such 
     fuel waives (at such time and in such form and manner as the 
     Secretary shall prescribe) the right to payment under 
     paragraph (1) and assigns such right to the ultimate vendor, 
     then the Secretary shall pay the amount which would be paid 
     under paragraph (1) to such ultimate vendor, but only if such 
     ultimate vendor--
       ``(i) is registered under section 4101, and
       ``(ii) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).
       ``(B) Credit cards.--For purposes of this paragraph, if the 
     sale of such fuel is made by means of a credit card, the 
     person extending credit to the ultimate purchaser shall be 
     deemed to be the ultimate vendor.''.
       (c) Payment of Refunds.--Subparagraph (A) of section 
     6427(i)(4), as amended by section 5211 of this Act, is 
     amended by inserting ``subsections (b)(4) and'' after ``filed 
     under''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to fuel sold after September 30, 2004.

       PART III--MODIFICATION OF INSPECTION OF RECORDS PROVISIONS

     SEC. 5231. AUTHORITY TO INSPECT ON-SITE RECORDS.

       (a) In General.--Section 4083(d)(1)(A) (relating to 
     administrative authority), as amended by section 5211 of this 
     Act, is amended by striking ``and'' at the end of clause (i) 
     and by inserting after clause (ii) the following new clause:
       ``(iii) inspecting any books and records and any shipping 
     papers pertaining to such fuel, and''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5232. ASSESSABLE PENALTY FOR REFUSAL OF ENTRY.

       (a) In General.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties), as amended by section 
     5221 of this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 6717. REFUSAL OF ENTRY.

       ``(a) In General.--In addition to any other penalty 
     provided by law, any person who refuses to admit entry or 
     refuses to permit any other action by the Secretary 
     authorized by section 4083(d)(1) shall pay a penalty of 
     $1,000 for such refusal.
       ``(b) Joint and Several Liability.--
       ``(1) In general.--If a penalty is imposed under this 
     section on any business entity, each officer, employee, or 
     agent of such entity or other contracting party who willfully 
     participated in any act giving rise to such penalty shall be 
     jointly and severally liable with such entity for such 
     penalty.
       ``(2) Affiliated groups.--If a business entity described in 
     paragraph (1) is part of an affiliated group (as defined in 
     section 1504(a)), the parent corporation of such entity shall 
     be jointly and severally liable with such entity for the 
     penalty imposed under this section.
       ``(c) Reasonable Cause Exception.--No penalty shall be 
     imposed under this section with respect to any failure if it 
     is shown that such failure is due to reasonable cause.''.
       (b) Conforming Amendments.--
       (1) Section 4083(d)(3), as amended by section 5211 of this 
     Act, is amended--
       (A) by striking ``entry.--The penalty'' and inserting: 
     ``entry.--
       ``(A) Forfeiture.--The penalty'', and
       (B) by adding at the end the following new subparagraph:
       ``(B) Assessable penalty.--For additional assessable 
     penalty for the refusal to admit entry or other refusal to 
     permit an action by the Secretary authorized by paragraph 
     (1), see section 6717.''.
       (2) The table of sections for part I of subchapter B of 
     chapter 68, as amended by section 5221 of this Act, is 
     amended by adding at the end the following new item:

``Sec. 6717. Refusal of entry.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

            PART IV--REGISTRATION AND REPORTING REQUIREMENTS

     SEC. 5241. REGISTRATION OF PIPELINE OR VESSEL OPERATORS 
                   REQUIRED FOR EXEMPTION OF BULK TRANSFERS TO 
                   REGISTERED TERMINALS OR REFINERIES.

       (a) In General.--Section 4081(a)(1)(B) (relating to 
     exemption for bulk transfers to registered terminals or 
     refineries) is amended--
       (1) by inserting ``by pipeline or vessel'' after 
     ``transferred in bulk'', and
       (2) by inserting ``, the operator of such pipeline or 
     vessel,'' after ``the taxable fuel''.
       (b) Civil Penalty for Carrying Taxable Fuels by 
     Nonregistered Pipelines or Vessels.--
       (1) In general.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties), as amended by section 
     5232 of this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 6718. CARRYING TAXABLE FUELS BY NONREGISTERED 
                   PIPELINES OR VESSELS.

       ``(a) Imposition of Penalty.--If any person knowingly 
     transfers any taxable fuel (as defined in section 4083(a)(1)) 
     in bulk pursuant to section 4081(a)(1)(B) to an unregistered, 
     such person shall pay a penalty in addition to the tax (if 
     any).
       ``(b) Amount of Penalty.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     amount of the penalty under subsection (a) on each act shall 
     be an amount equal to the greater of--
       ``(A) $10,000, or
       ``(B) $1 per gallon.
       ``(2) Multiple violations.--In determining the penalty 
     under subsection (a) on any person, paragraph (1) shall be 
     applied by increasing the amount in paragraph (1) by the 
     product of such amount and the number of prior penalties (if 
     any) imposed by this section on such person (or a related 
     person or any predecessor of such person or related person).
       ``(c) Joint and Several Liability.--
       ``(1) In general.--If a penalty is imposed under this 
     section on any business entity, each officer, employee, or 
     agent of such entity or other contracting party who willfully 
     participated in any act giving rise to such penalty shall be 
     jointly and severally liable with such entity for such 
     penalty.
       ``(2) Affiliated groups.--If a business entity described in 
     paragraph (1) is part of an affiliated group (as defined in 
     section 1504(a)), the parent corporation of such entity shall 
     be jointly and severally liable with such entity for the 
     penalty imposed under this section.
       ``(d) Reasonable Cause Exception.--No penalty shall be 
     imposed under this section with respect to any failure if it 
     is shown that such failure is due to reasonable cause.''.
       (2) Clerical amendment.--The table of sections for part I 
     of subchapter B of chapter 68, as amended by section 5232 of 
     this Act, is amended by adding at the end the following new 
     item:

``Sec. 6718. Carrying taxable fuels by nonregistered pipelines or 
              vessels.''.

       (c) Publication of Registered Persons.--Not later than June 
     30, 2004, the Secretary of the Treasury shall publish a list 
     of persons required to be registered under section 4101 of 
     the Internal Revenue Code of 1986.
       (d) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on October 1, 2004.

     SEC. 5242. DISPLAY OF REGISTRATION.

       (a) In General.--Subsection (a) of section 4101 (relating 
     to registration) is amended--
       (1) by striking ``Every'' and inserting the following:
       ``(1) In general.--Every'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Display of registration.--Every operator of a vessel 
     required by the Secretary to register under this section 
     shall display proof of registration through an electronic 
     identification device prescribed by the Secretary on each 
     vessel used by such operator to transport any taxable 
     fuel.''.
       (b) Civil Penalty for Failure to Display Registration.--
       (1) In general.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties), as amended by section 
     5241 of this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 6719. FAILURE TO DISPLAY REGISTRATION OF VESSEL.

       ``(a) Failure to Display Registration.--Every operator of a 
     vessel who fails to display

[[Page 10944]]

     proof of registration pursuant to section 4101(a)(2) shall 
     pay a penalty of $500 for each such failure. With respect to 
     any vessel, only one penalty shall be imposed by this section 
     during any calendar month.
       ``(b) Multiple Violations.--In determining the penalty 
     under subsection (a) on any person, subsection (a) shall be 
     applied by increasing the amount in subsection (a) by the 
     product of such amount and the number of prior penalties (if 
     any) imposed by this section on such person (or a related 
     person or any predecessor of such person or related person).
       ``(c) Reasonable Cause Exception.--No penalty shall be 
     imposed under this section with respect to any failure if it 
     is shown that such failure is due to reasonable cause.''.
       (2) Clerical amendment.--The table of sections for part I 
     of subchapter B of chapter 68, as amended by section 5241 of 
     this Act, is amended by adding at the end the following new 
     item:

``Sec. 6719. Failure to display registration of vessel.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 5243. REGISTRATION OF PERSONS WITHIN FOREIGN TRADE 
                   ZONES, ETC.

       (a) In General.--Section 4101(a), as amended by section 
     5242 of this Act, is amended by redesignating paragraph (2) 
     as paragraph (3), and by inserting after paragraph (1) the 
     following new paragraph:
       ``(2) Registration of persons within foreign trade zones, 
     etc..--The Secretary shall require registration by any person 
     which--
       ``(A) operates a terminal or refinery within a foreign 
     trade zone or within a customs bonded storage facility, or
       ``(B) holds an inventory position with respect to a taxable 
     fuel in such a terminal.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 5244. PENALTIES FOR FAILURE TO REGISTER AND FAILURE TO 
                   REPORT.

       (a) Increased Penalty.--Subsection (a) of section 7272 
     (relating to penalty for failure to register) is amended by 
     inserting ``($10,000 in the case of a failure to register 
     under section 4101)'' after ``$50''.
       (b) Increased Criminal Penalty.--Section 7232 (relating to 
     failure to register under section 4101, false representations 
     of registration status, etc.) is amended by striking 
     ``$5,000'' and inserting ``$10,000''.
       (c) Assessable Penalty for Failure to Register.--
       (1) In general.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties), as amended by section 
     5242 of this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 6720. FAILURE TO REGISTER.

       ``(a) Failure to Register.--Every person who is required to 
     register under section 4101 and fails to do so shall pay a 
     penalty in addition to the tax (if any).
       ``(b) Amount of Penalty.--The amount of the penalty under 
     subsection (a) shall be--
       ``(1) $10,000 for each initial failure to register, and
       ``(2) $1,000 for each day thereafter such person fails to 
     register.
       ``(c) Reasonable Cause Exception.--No penalty shall be 
     imposed under this section with respect to any failure if it 
     is shown that such failure is due to reasonable cause.''.
       (2) Clerical amendment.--The table of sections for part I 
     of subchapter B of chapter 68, as amended by section 5242 of 
     this Act, is amended by adding at the end the following new 
     item:

``Sec. 6720. Failure to register.''.

       (d) Assessable Penalty for Failure to Report.--
       (1) In general.--Part II of subchapter B of chapter 68 
     (relating to assessable penalties) is amended by adding at 
     the end the following new section:

     ``SEC. 6725. FAILURE TO REPORT INFORMATION UNDER SECTION 
                   4101.

       ``(a) In General.--In the case of each failure described in 
     subsection (b) by any person with respect to a vessel or 
     facility, such person shall pay a penalty of $10,000 in 
     addition to the tax (if any).
       ``(b) Failures Subject to Penalty.--For purposes of 
     subsection (a), the failures described in this subsection 
     are--
       ``(1) any failure to make a report under section 4101(d) on 
     or before the date prescribed therefor, and
       ``(2) any failure to include all of the information 
     required to be shown on such report or the inclusion of 
     incorrect information.
       ``(c) Reasonable Cause Exception.--No penalty shall be 
     imposed under this section with respect to any failure if it 
     is shown that such failure is due to reasonable cause.''.
       (2) Clerical amendment.--The table of sections for part II 
     of subchapter B of chapter 68 is amended by adding at the end 
     the following new item:

``Sec. 6725. Failure to report information under section 4101.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to failures pending or occurring after September 
     30, 2004.

     SEC. 5245. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN 
                   TAX BENEFITS.

       (a) In General.--Subpart C of part III of subchapter A of 
     chapter 32 is amended by adding at the end the following new 
     section:

     ``SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING 
                   CERTAIN TAX BENEFITS.

       ``(a) In General.--The Secretary shall require any person 
     claiming tax benefits--
       ``(1) under the provisions of section 34, 40, and 40A to 
     file a return at the time such person claims such benefits 
     (in such manner as the Secretary may prescribe), and
       ``(2) under the provisions of section 4041(b)(2), 6426, or 
     6427(e) to file a monthly return (in such manner as the 
     Secretary may prescribe).
       ``(b) Contents of Return.--Any return filed under this 
     section shall provide such information relating to such 
     benefits and the coordination of such benefits as the 
     Secretary may require to ensure the proper administration and 
     use of such benefits.
       ``(c) Enforcement.--With respect to any person described in 
     subsection (a) and subject to registration requirements under 
     this title, rules similar to rules of section 4222(c) shall 
     apply with respect to any requirement under this section.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart C of part III of subchapter A of chapter 32 is 
     amended by adding at the end the following new item:

``Sec. 4104. Information reporting for persons claiming certain tax 
              benefits.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 5246. ELECTRONIC REPORTING.

       (a) In General.--Section 4101(d), as amended by section 
     5273 of this Act, is amended by adding at the end the 
     following new sentence: ``Any person who is required to 
     report under this subsection and who has 25 or more 
     reportable transactions in a month shall file such report in 
     electronic format.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply on October 1, 2004.

                            PART V--IMPORTS

     SEC. 5251. TAX AT POINT OF ENTRY WHERE IMPORTER NOT 
                   REGISTERED.

       (a) Tax at Point of Entry Where Importer Not Registered.--
       (1) In general.--Subpart C of part III of subchapter A of 
     chapter 31, as amended by section 5245 of this Act, is 
     amended by adding at the end the following new section:

     ``SEC. 4105. TAX AT ENTRY WHERE IMPORTER NOT REGISTERED.

       ``(a) In General.--Any tax imposed under this part on any 
     person not registered under section 4101 for the entry of a 
     fuel into the United States shall be imposed at the time and 
     point of entry.
       ``(b) Enforcement of Assessment.--If any person liable for 
     any tax described under subsection (a) has not paid the tax 
     or posted a bond, the Secretary may--
       ``(1) seize the fuel on which the tax is due, or
       ``(2) detain any vehicle transporting such fuel,
     until such tax is paid or such bond is filed.
       ``(c) Levy of Fuel.--If no tax has been paid or no bond has 
     been filed within 5 days from the date the Secretary seized 
     fuel pursuant to subsection (b), the Secretary may sell such 
     fuel as provided under section 6336.''.
       (2) Conforming amendment.--The table of sections for 
     subpart C of part III of subchapter A of chapter 31 of the 
     Internal Revenue Code of 1986, as amended by section 5245 of 
     this Act, is amended by adding after the last item the 
     following new item:

``Sec. 4105. Tax at entry where importer not registered.''.

       (b) Denial of Entry Where Tax Not Paid.--The Secretary of 
     Homeland Security is authorized to deny entry into the United 
     States of any shipment of a fuel which is taxable under 
     section 4081 of the Internal Revenue Code of 1986 if the 
     person entering such shipment fails to pay the tax imposed 
     under such section or post a bond in accordance with the 
     provisions of section 4105 of such Code.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5252. RECONCILIATION OF ON-LOADED CARGO TO ENTERED 
                   CARGO.

       (a) In General.--Subsection (a) of section 343 of the Trade 
     Act of 2002 is amended by inserting at the end the following 
     new paragraph:
       ``(4) In General.--Subject to paragraphs (2) and (3), not 
     later than 1 year after the enactment of this paragraph, the 
     Secretary of Homeland Security, together with the Secretary 
     of the Treasury, shall promulgate regulations providing for 
     the transmission to the Internal Revenue Service, through an 
     electronic data interchange system, of information pertaining 
     to cargo of taxable fuels (as defined in section 4083 of the 
     Internal Revenue Code of 1986) destined for importation into 
     the United States prior to such importation.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

                   PART VI--MISCELLANEOUS PROVISIONS

     SEC. 5261. TAX ON SALE OF DIESEL FUEL WHETHER SUITABLE FOR 
                   USE OR NOT IN A DIESEL-POWERED VEHICLE OR 
                   TRAIN.

       (a) In General.--Section 4083(a)(3) is amended--
       (1) by striking ``The term'' and inserting the following:
       ``(A) In general.--The term'', and
       (2) by inserting at the end the following new subparagraph:
       ``(B) Liquid sold as diesel fuel.--The term `diesel fuel' 
     includes any liquid which is sold as

[[Page 10945]]

     or offered for sale as a fuel in a diesel-powered highway 
     vehicle or a diesel-powered train.''.
       (b) Conforming Amendments.--
       (1) Section 40A(b)(1)(B), as amended by section 5103 of 
     this Act, is amended by striking ``4083(a)(3)'' and inserting 
     ``4083(a)(3)(A)''.
       (2) Section 6426(c)(3), as added by section 5102 of this 
     Act, is amended by striking ``4083(a)(3)'' and inserting 
     ``4083(a)(3)(A)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5262. MODIFICATION OF ULTIMATE VENDOR REFUND CLAIMS WITH 
                   RESPECT TO FARMING.

       (a) In General.--
       (1) Refunds.--Section 6427(l) is amended by adding at the 
     end the following new paragraph:
       ``(6) Registered vendors permitted to administer certain 
     claims for refund of diesel fuel and kerosene sold to 
     farmers.--
       ``(A) In general.--In the case of diesel fuel or kerosene 
     used on a farm for farming purposes (within the meaning of 
     section 6420(c)), paragraph (1) shall not apply to the 
     aggregate amount of such diesel fuel or kerosene if such 
     amount does not exceed 500 gallons (as determined under 
     subsection (i)(5)(A)(iii)).
       ``(B) Payment to ultimate vendor.--The amount which would 
     (but for subparagraph (A)) have been paid under paragraph (1) 
     with respect to any fuel shall be paid to the ultimate vendor 
     of such fuel, if such vendor--
       ``(i) is registered under section 4101, and
       ``(ii) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.
       (2) Filing of claims.--Section 6427(i) is amended by 
     inserting at the end the following new paragraph:
       ``(5) Special rule for vendor refunds with respect to 
     farmers.--
       ``(A) In general.--A claim may be filed under subsection 
     (l)(6) by any person with respect to fuel sold by such person 
     for any period--
       ``(i) for which $200 or more ($100 or more in the case of 
     kerosene) is payable under subsection (l)(6),
       ``(ii) which is not less than 1 week, and
       ``(iii) which is for not more than 500 gallons for each 
     farmer for which there is a claim.

     Notwithstanding subsection (l)(1), paragraph (3)(B) shall 
     apply to claims filed under the preceding sentence.
       ``(B) Time for filing claim.--No claim filed under this 
     paragraph shall be allowed unless filed on or before the last 
     day of the first quarter following the earliest quarter 
     included in the claim.''.
       (3) Conforming amendments.--
       (A) Section 6427(l)(5)(A) is amended to read as follows:
       ``(A) In general.--Paragraph (1) shall not apply to diesel 
     fuel or kerosene used by a State or local government.''.
       (B) The heading for section 6427(l)(5) is amended by 
     striking ``farmers and''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels sold for nontaxable use after the date 
     of the enactment of this Act.

     SEC. 5263. TAXABLE FUEL REFUNDS FOR CERTAIN ULTIMATE VENDORS.

       (a) In General.--Paragraph (4) of section 6416(a) (relating 
     to abatements, credits, and refunds) is amended to read as 
     follows:
       ``(4) Registered ultimate vendor to administer credits and 
     refunds of gasoline tax.--
       ``(A) In general.--For purposes of this subsection, if an 
     ultimate vendor purchases any gasoline on which tax imposed 
     by section 4081 has been paid and sells such gasoline to an 
     ultimate purchaser described in subparagraph (C) or (D) of 
     subsection (b)(2) (and such gasoline is for a use described 
     in such subparagraph), such ultimate vendor shall be treated 
     as the person (and the only person) who paid such tax, but 
     only if such ultimate vendor is registered under section 
     4101. For purposes of this subparagraph, if the sale of 
     gasoline is made by means of a credit card, the person 
     extending the credit to the ultimate purchaser shall be 
     deemed to be the ultimate vendor.
       ``(B) Timing of claims.--The procedure and timing of any 
     claim under subparagraph (A) shall be the same as for claims 
     under section 6427(i)(4), except that the rules of section 
     6427(i)(3)(B) regarding electronic claims shall not apply 
     unless the ultimate vendor has certified to the Secretary for 
     the most recent quarter of the taxable year that all ultimate 
     purchasers of the vendor are certified and entitled to a 
     refund under subparagraph (C) or (D) of subsection (b)(2).''.
       (b) Credit Card Purchases of Diesel Fuel or Kerosene by 
     State and Local Governments.--Section 6427(l)(5)(C) (relating 
     to nontaxable uses of diesel fuel, kerosene, and aviation 
     fuel), as amended by section 5252 of this Act, is amended by 
     adding at the end the following new sentence: ``For purposes 
     of this subparagraph, if the sale of diesel fuel or kerosene 
     is made by means of a credit card, the person extending the 
     credit to the ultimate purchaser shall be deemed to be the 
     ultimate vendor.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 5264. TWO-PARTY EXCHANGES.

       (a) In General.--Subpart C of part III of subchapter A of 
     chapter 32, as amended by section 5251 of this Act, is 
     amended by adding at the end the following new section:

     ``SEC. 4106. TWO-PARTY EXCHANGES.

       ``(a) In General.--In a two-party exchange, the delivering 
     person shall not be liable for the tax imposed under of 
     section 4081(a)(1)(A)(ii).
       ``(b) Two-Party Exchange.--The term `two-party exchange' 
     means a transaction, other than a sale, in which taxable fuel 
     is transferred from a delivering person registered under 
     section 4101 as a taxable fuel registrant to a receiving 
     person who is so registered where all of the following occur:
       ``(1) The transaction includes a transfer from the 
     delivering person, who holds the inventory position for 
     taxable fuel in the terminal as reflected in the records of 
     the terminal operator.
       ``(2) The exchange transaction occurs before or 
     contemporaneous with completion of removal across the rack 
     from the terminal by the receiving person.
       ``(3) The terminal operator in its books and records treats 
     the receiving person as the person that removes the product 
     across the terminal rack for purposes of reporting the 
     transaction to the Secretary.
       ``(4) The transaction is the subject of a written 
     contract.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart C of part III of subchapter A of chapter 32, as 
     amended by section 5251 of this Act, is amended by adding 
     after the last item the following new item:

``Sec. 4106. Two-party exchanges.''.

       (c) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5265. MODIFICATIONS OF TAX ON USE OF CERTAIN VEHICLES.

       (a) No Proration of Tax Unless Vehicle Is Destroyed or 
     Stolen.--
       (1) In general.--Section 4481(c) (relating to proration of 
     tax) is amended to read as follows:
       ``(c) Proration of Tax Where Vehicle Sold, Destroyed, or 
     Stolen.--
       ``(1) In general.--If in any taxable period a highway motor 
     vehicle is sold, destroyed, or stolen before the first day of 
     the last month in such period and not subsequently used 
     during such taxable period, the tax shall be reckoned 
     proportionately from the first day of the month in such 
     period in which the first use of such highway motor vehicle 
     occurs to and including the last day of the month in which 
     such highway motor vehicle was sold, destroyed, or stolen.
       ``(2) Destroyed.--For purposes of paragraph (1), a highway 
     motor vehicle is destroyed if such vehicle is damaged by 
     reason of an accident or other casualty to such an extent 
     that it is not economic to rebuild.''.
       (2) Conforming amendments.--
       (A) Section 6156 (relating to installment payment of tax on 
     use of highway motor vehicles) is repealed.
       (B) The table of sections for subchapter A of chapter 62 is 
     amended by striking the item relating to section 6156.
       (b) Display of Tax Certificate.--Paragraph (2) of section 
     4481(d) (relating to one tax liability for period) is amended 
     to read as follows:
       ``(2) Display of tax certificate.--Every taxpayer which 
     pays the tax imposed under this section with respect to a 
     highway motor vehicle shall, not later than 1 month after the 
     due date of the return of tax with respect to each taxable 
     period, receive and display on such vehicle an electronic 
     identification device prescribed by the Secretary.''.
       (c) Electronic filing.--Section 4481, as amended by section 
     5001 of this Act, is amended by redesignating subsection (e) 
     as subsection (f) and by inserting after subsection (d) the 
     following new subsection:
       ``(e) Electronic filing.--Any taxpayer who files a return 
     under this section with respect to 25 or more vehicles for 
     any taxable period shall file such return electronically.''.
       (d) Repeal of reduction in tax for certain trucks.--Section 
     4483 of the Internal Revenue Code of 1986 is amended by 
     striking subsection (f).
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable 
     periods beginning after the date of the enactment of this 
     Act.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall take effect on October 1, 2005.

     SEC. 5266. DEDICATION OF REVENUES FROM CERTAIN PENALTIES TO 
                   THE HIGHWAY TRUST FUND.

       (a) In General.--Subsection (b) of section 9503 (relating 
     to transfer to Highway Trust Fund of amounts equivalent to 
     certain taxes), as amended by section 5001 of this Act, is 
     amended by redesignating paragraph (5) as paragraph (6) and 
     inserting after paragraph (4) the following new paragraph:
       ``(5) Certain penalties.--There are hereby appropriated to 
     the Highway Trust Fund amounts equivalent to the penalties 
     assessed under sections 6715, 6715A, 6717, 6718, 6719, 6720, 
     6725, 7232, and 7272 (but only with regard to penalties under 
     such section related to failure to register under section 
     4101).''.
       (b) Conforming Amendments.--
       (1) The heading of subsection (b) of section 9503 is 
     amended by inserting ``and Penalties'' after ``Taxes''.
       (2) The heading of paragraph (1) of section 9503(b) is 
     amended by striking ``In general'' and inserting ``Certain 
     taxes''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to penalties assessed after October 1, 2004.

     SEC. 5267. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF 
                   FUEL TO MOTOR VEHICLES REMOVED FROM UNITED 
                   STATES.

       (a) In General.--Section 4221(d)(2) (defining export) is 
     amended by adding at the end the following new sentence: 
     ``Such term does not include the delivery of a taxable fuel 
     (as defined

[[Page 10946]]

     in section 4083(a)(1)) into a fuel tank of a motor vehicle 
     which is shipped or driven out of the United States.''.
       (b) Conforming Amendments.--
       (1) Section 4041(g) (relating to other exemptions) is 
     amended by adding at the end the following new sentence: 
     ``Paragraph (3) shall not apply to the sale for delivery of a 
     liquid into a fuel tank of a motor vehicle which is shipped 
     or driven out of the United States.''.
       (2) Clause (iv) of section 4081(a)(1)(A) (relating to tax 
     on removal, entry, or sale) is amended by inserting ``or at a 
     duty-free sales enterprise (as defined in section 555(b)(8) 
     of the Tariff Act of 1930)'' after ``section 4101''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales or deliveries made after the date of the 
     enactment of this Act.

                     PART VII--TOTAL ACCOUNTABILITY

     SEC. 5271. TOTAL ACCOUNTABILITY.

       (a) Taxation of Reportable Liquids.--
       (1) In general.--Section 4081(a), as amended by this Act, 
     is amended--
       (A) by inserting ``or reportable liquid'' after ``taxable 
     fuel'' each place it appears, and
       (B) by inserting ``such liquid'' after ``such fuel'' in 
     paragraph (1)(A)(iv).
       (2) Rate of tax.--Subparagraph (A) of section 4081(a)(2), 
     as amended by section 5211 of this Act, is amended by 
     striking ``and'' at the end of clause (iii), by striking the 
     period at the end of clause (iv) and inserting ``, and'', and 
     by adding at the end the following new clause:
       ``(v) in the case of reportable liquids, the rate 
     determined under section 4083(c)(2).''.
       (3) Exemption.--Section 4081(a)(1) is amended by adding at 
     the end the following new subparagraph:
       ``(C) Exemption for registered transfers of reportable 
     liquids.--The tax imposed by this paragraph shall not apply 
     to any removal, entry, or sale of a reportable liquid if--
       ``(i) such removal, entry, or sale is to a registered 
     person who certifies that such liquid will not be used as a 
     fuel or in the production of a fuel, or
       ``(ii) the sale is to the ultimate purchaser of such 
     liquid.''.
       (4) Reportable liquids.--Section 4083, as amended by this 
     Act, is amended by redesignating subsections (c) and (d) (as 
     redesignated by section 5211 of this Act) as subsections (d) 
     and (e), respectively, and by inserting after subsection (b) 
     the following new section:
       ``(c) Reportable liquid.--For purposes of this subpart--
       ``(1) In general.--The term `reportable liquid' means any 
     petroleum-based liquid other than a taxable fuel.
       ``(2) Taxation.--
       ``(A) Gasoline blend stocks and additives.--Gasoline blend 
     stocks and additives which are reportable liquids (as defined 
     in paragraph (1)) shall be subject to the rate of tax under 
     clause (i) of section 4081(a)(2)(A).
       ``(B) Other reportable liquids.--Any reportable liquid (as 
     defined in paragraph (1)) not described in subparagraph (A) 
     shall be subject to the rate of tax under clause (iii) of 
     section 4081(a)(2)(A).''.
       (5) Conforming amendments.--
       (A) Section 4081(e) is amended by inserting ``or reportable 
     liquid'' after ``taxable fuel''.
       (B) Section 4083(d) (relating to certain use defined as 
     removal), as redesignated by paragraph (4), is amended by 
     inserting ``or reportable liquid'' after ``taxable fuel''.
       (C) Section 4083(e)(1) (relating to administrative 
     authority), as redesignated by paragraph (4), is amended--
       (i) in subparagraph (A)--

       (I) by inserting ``or reportable liquid'' after ``taxable 
     fuel'', and
       (II) by inserting ``or such liquid'' after ``such fuel'' 
     each place it appears, and

       (ii) in subparagraph (B), by inserting ``or any reportable 
     liquid'' after ``any taxable fuel''.
       (D) Section 4101(a)(2), as added by section 5243 of this 
     Act, is amended by inserting ``or a reportable liquid'' after 
     ``taxable fuel''.
       (E) Section 4101(a)(3), as added by section 5242 of this 
     Act and redesignated by section 5243 of this Act, is amended 
     by inserting ``or any reportable liquid'' before the period 
     at the end.
       (F) Section 4102 is amended by inserting ``or any 
     reportable liquid'' before the period at the end.
       (G)(i) Section 6718, as added by section 5241 of this Act, 
     is amended--
       (I) in subsection (a), by inserting ``or any reportable 
     liquid (as defined in section 4083(c)(1))'' after `` section 
     4083(a)(1))'', and
       (II) in the heading, by inserting ``or reportable liquids'' 
     after ``taxable fuel''.
       (ii) The item relating to section 6718 in table of sections 
     for part I of subchapter B of chapter 68, as added by section 
     5241 of this Act, is amended by inserting ``or reportable 
     liquids'' after ``taxable fuels''.
       (H) Section 6427(h) is amended to read as follows:
       ``(h) Gasoline Blend Stocks or Additives and Reportable 
     Liquids.--Except as provided in subsection (k)--
       ``(1) if any gasoline blend stock or additive (within the 
     meaning of section 4083(a)(2)) is not used by any person to 
     produce gasoline and such person establishes that the 
     ultimate use of such gasoline blend stock or additive is not 
     to produce gasoline, or
       ``(2) if any reportable liquid (within the meaning of 
     section 4083(c)(1)) is not used by any person to produce a 
     taxable fuel and such person establishes that the ultimate 
     use of such reportable liquid is not to produce a taxable 
     fuel,

     then the Secretary shall pay (without interest) to such 
     person an amount equal to the aggregate amount of the tax 
     imposed on such person with respect to such gasoline blend 
     stock or additive or such reportable fuel.''.
       (I) Section 7232, as amended by this Act, is amended by 
     inserting ``or reportable liquid (within the meaning of 
     section 4083(c)(1))'' after ``section 4083)''.
       (J) Section 343 of the Trade Act of 2002, as amended by 
     section 5252 of this Act, is amended by inserting ``and 
     reportable liquids (as defined in section 4083(c)(1) of such 
     Code)'' after ``Internal Revenue Code of 1986)''.
       (b) Dyed Diesel.--Section 4082(a) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``and'', and by 
     inserting after paragraph (3) the following new paragraph:
       ``(4) which is removed, entered, or sold by a person 
     registered under section 4101.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to reportable liquids (as defined in section 
     4083(c) of the Internal Revenue Code) and fuel sold or used 
     after September 30, 2004.

     SEC. 5272. EXCISE TAX REPORTING.

       (a) In General.--Part II of subchapter A of chapter 61 is 
     amended by adding at the end the following new subpart:

                   ``Subpart E--Excise Tax Reporting

     ``SEC. 6025. RETURNS RELATING TO FUEL TAXES.

       ``(a) In General.--The Secretary shall require any person 
     liable for the tax imposed under Part III of subchapter A of 
     chapter 32 to file a return of such tax on a monthly basis.
       ``(b) Information Included with Return.--The Secretary 
     shall require any person filing a return under subsection (a) 
     to provide information regarding any refined product (whether 
     or not such product is taxable under this title) removed from 
     a terminal during the period for which such return 
     applies.''.
       (b) Conforming Amendment.--The table of parts for 
     subchapter A of chapter 61 is amended by adding at the end 
     the following new item:

``Subpart E--Excise Tax Reporting''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after September 30, 2004.

     SEC. 5273. INFORMATION REPORTING.

       (a) In General.--Section 4101(d) is amended by adding at 
     the end the following new flush sentence:
     ``The Secretary shall require reporting under the previous 
     sentence with respect to taxable fuels removed, entered, or 
     transferred from any refinery, pipeline, or vessel which is 
     registered under this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply on October 1, 2004.

               Subtitle D--Definition of Highway Vehicle

     SEC. 5301. EXEMPTION FROM CERTAIN EXCISE TAXES FOR MOBILE 
                   MACHINERY.

       (a) Exemption From Tax on Heavy Trucks and Trailers Sold at 
     Retail.--
       (1) In general.--Section 4053 (relating to exemptions) is 
     amended by adding at the end the following new paragraph:
       ``(8) Mobile machinery.--Any vehicle which consists of a 
     chassis--
       ``(A) to which there has been permanently mounted (by 
     welding, bolting, riveting, or other means) machinery or 
     equipment to perform a construction, manufacturing, 
     processing, farming, mining, drilling, timbering, or similar 
     operation if the operation of the machinery or equipment is 
     unrelated to transportation on or off the public highways,
       ``(B) which has been specially designed to serve only as a 
     mobile carriage and mount (and a power source, where 
     applicable) for the particular machinery or equipment 
     involved, whether or not such machinery or equipment is in 
     operation, and
       ``(C) which, by reason of such special design, could not, 
     without substantial structural modification, be used as a 
     component of a vehicle designed to perform a function of 
     transporting any load other than that particular machinery or 
     equipment or similar machinery or equipment requiring such a 
     specially designed chassis.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect on the day after the date of the enactment 
     of this Act.
       (b) Exemption From Tax on Use of Certain Vehicles.--
       (1) In general.--Section 4483 (relating to exemptions) is 
     amended by redesignating subsection (g) as subsection (h) and 
     by inserting after subsection (f) the following new 
     subsection:
       ``(g) Exemption for Mobile Machinery.--No tax shall be 
     imposed by section 4481 on the use of any vehicle described 
     in section 4053(8).''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on the day after the date of the enactment 
     of this Act.
       (d) Exemption From Fuel Taxes.--
       (1) In general.--Section 6421(e)(2) (defining off-highway 
     business use) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Uses in mobile machinery.--
       ``(i) In general.--The term `off-highway business use' 
     shall include any use in a vehicle which meets the 
     requirements described in clause (ii).
       ``(ii) Requirements for mobile machinery.--The requirements 
     described in this clause are--

       ``(I) the design-based test, and
       ``(II) the use-based test.

       ``(iii) Design-based test.--For purposes of clause (ii)(I), 
     the design-based test is met if the vehicle consists of a 
     chassis--

       ``(I) to which there has been permanently mounted (by 
     welding, bolting, riveting, or other

[[Page 10947]]

     means) machinery or equipment to perform a construction, 
     manufacturing, processing, farming, mining, drilling, 
     timbering, or similar operation if the operation of the 
     machinery or equipment is unrelated to transportation on or 
     off the public highways,
       ``(II) which has been specially designed to serve only as a 
     mobile carriage and mount (and a power source, where 
     applicable) for the particular machinery or equipment 
     involved, whether or not such machinery or equipment is in 
     operation, and
       ``(III) which, by reason of such special design, could not, 
     without substantial structural modification, be used as a 
     component of a vehicle designed to perform a function of 
     transporting any load other than that particular machinery or 
     equipment or similar machinery or equipment requiring such a 
     specially designed chassis.

       ``(iv) Use-based test.--For purposes of clause (ii)(II), 
     the use-based test is met if the use of the vehicle on public 
     highways was less than 5,000 miles during the taxpayer's 
     taxable year.
       ``(v) Special rule for use by certain tax-exempt 
     organizations.--In the case of any use in a vehicle by an 
     organization which is described in section 501(c) and exempt 
     from tax under section 501(a), clause (ii) shall be applied 
     without regard to subclause (II) thereof.''.
       (2) Annual refund of tax paid.--Section 6427(i)(2) 
     (relating to exceptions) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Nonapplication of paragraph.--This paragraph shall 
     not apply to any fuel used in any off-highway business use 
     described in section 6421(e)(2)(C).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5302. MODIFICATION OF DEFINITION OF OFF-HIGHWAY VEHICLE.

       (a) In General.--Section 7701(a) (relating to definitions) 
     is amended by adding at the end the following new paragraph:
       ``(48) Off-highway vehicles.--
       ``(A) Off-highway transportation vehicles.--
       ``(i) In general.--A vehicle shall not be treated as a 
     highway vehicle if such vehicle is specially designed for the 
     primary function of transporting a particular type of load 
     other than over the public highway and because of this 
     special design such vehicle's capability to transport a load 
     over the public highway is substantially limited or impaired.
       ``(ii) Determination of vehicle's design.--For purposes of 
     clause (i), a vehicle's design is determined solely on the 
     basis of its physical characteristics.
       ``(iii) Determination of substantial limitation or 
     impairment.--For purposes of clause (i), in determining 
     whether substantial limitation or impairment exists, account 
     may be taken of factors such as the size of the vehicle, 
     whether such vehicle is subject to the licensing, safety, and 
     other requirements applicable to highway vehicles, and 
     whether such vehicle can transport a load at a sustained 
     speed of at least 25 miles per hour. It is immaterial that a 
     vehicle can transport a greater load off the public highway 
     than such vehicle is permitted to transport over the public 
     highway.
       ``(B) Nontransportation trailers and semitrailers.--A 
     trailer or semitrailer shall not be treated as a highway 
     vehicle if it is specially designed to function only as an 
     enclosed stationary shelter for the carrying on of an off-
     highway function at an off-highway site.''.
       (c) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Fuel taxes.--With respect to taxes imposed under 
     subchapter B of chapter 31 and part III of subchapter A of 
     chapter 32, the amendment made by this section shall apply to 
     taxable periods beginning after the date of the enactment of 
     this Act.

            Subtitle E--Excise Tax Reform and Simplification

                      PART I--HIGHWAY EXCISE TAXES

     SEC. 5401. DEDICATION OF GAS GUZZLER TAX TO HIGHWAY TRUST 
                   FUND.

       (a) In General.--Section 9503(b)(1) (relating to transfer 
     to Highway Trust Fund of amounts equivalent to certain 
     taxes), as amended by section 5101 of this Act, is amended by 
     redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (D), (E), and (F), respectively, and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) section 4064 (relating to gas guzzler tax),''.
       (b) Uniform Application of Tax.--Subparagraph (A) of 
     section 4064(b)(1) (defining automobile) is amended by 
     striking the second sentence.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5402. REPEAL CERTAIN EXCISE TAXES ON RAIL DIESEL FUEL 
                   AND INLAND WATERWAY BARGE FUELS.

       (a) Taxes on Trains.--
       (1) In general.--Subparagraph (A) of section 4041(a)(1) is 
     amended by striking ``or a diesel-powered train'' each place 
     it appears and by striking ``or train''.
       (2) Conforming amendments.--
       (A) Subparagraph (C) of section 4041(a)(1), as amended by 
     section 5001 of this Act, is amended by striking clause (ii) 
     and by redesignating clause (iii) as clause (ii).
       (B) Subparagraph (C) of section 4041(b)(1) is amended by 
     striking all that follows ``section 6421(e)(2)'' and 
     inserting a period.
       (C) Subsection (d) of section 4041 is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Diesel fuel used in trains.--There is hereby imposed 
     a tax of 0.1 cent per gallon on any liquid other than 
     gasoline (as defined in section 4083)--
       ``(A) sold by any person to an owner, lessee, or other 
     operator of a diesel-powered train for use as a fuel in such 
     train, or
       ``(B) used by any person as a fuel in a diesel-powered 
     train unless there was a taxable sale of such fuel under 
     subparagraph (A).

     No tax shall be imposed by this paragraph on the sale or use 
     of any liquid if tax was imposed on such liquid under section 
     4081.''.
       (D) Subsection (f) of section 4082 is amended by striking 
     ``section 4041(a)(1)'' and inserting ``subsections (d)(3) and 
     (a)(1) of section 4041, respectively''.
       (E) Subparagraphs (A) and (B) of section 4083(a)(3), as 
     amended by section 5261 of this Act, are amended by striking 
     ``or a diesel-powered train''.
       (F) Paragraph (3) of section 6421(f) is amended to read as 
     follows:
       ``(3) Gasoline used in trains.--In the case of gasoline 
     used as a fuel in a train, this section shall not apply with 
     respect to the Leaking Underground Storage Tank Trust Fund 
     financing rate under section 4081.''.
       (G) Paragraph (3) of section 6427(l) is amended to read as 
     follows:
       ``(3) Refund of certain taxes on fuel used in diesel-
     powered trains.--For purposes of this subsection, the term 
     `nontaxable use' includes fuel used in a diesel-powered 
     train. The preceding sentence shall not apply to the tax 
     imposed by section 4041(d) and the Leaking Underground 
     Storage Tank Trust Fund financing rate under section 4081 
     except with respect to fuel sold for exclusive use by a State 
     or any political subdivision thereof.''.
       (b) Fuel Used on Inland Waterways.--
       (1) In general.--Paragraph (1) of section 4042(b) is 
     amended by adding ``and'' at the end of subparagraph (A), by 
     striking ``, and'' at the end of subparagraph (B) and 
     inserting a period, and by striking subparagraph (C).
       (2) Conforming amendment.--Paragraph (2) of section 4042(b) 
     is amended by striking subparagraph (C).
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

                     PART II--AQUATIC EXCISE TAXES

     SEC. 5411. ELIMINATION OF AQUATIC RESOURCES TRUST FUND AND 
                   TRANSFORMATION OF SPORT FISH RESTORATION 
                   ACCOUNT.

       (a) Simplification of Funding for Boat Safety Account.--
       (1) In general.--Section 9503(c)(3) (relating to transfers 
     from Trust Fund for motorboat fuel taxes), as redesignated by 
     section 5002 of this Act, is amended--
       (A) by striking ``Fund--'' and all that follows through 
     ``shall be transferred'' in subparagraph (B) and inserting 
     ``Fund which is attributable to motorboat fuel taxes shall be 
     transferred'', and
       (B) by striking subparagraph (A), and
       (C) by redesignating subparagraphs (B) through (E) as 
     subparagraphs (A) through (D), respectively.
       (2) Conforming amendments.--
       (A) Section 9503(b)(4), as amended by section 5102 of this 
     Act, is amended--
       (i) by adding ``or'' at the end of subparagraph (B),
       (ii) by striking the comma at the end of subparagraph (C) 
     and inserting a period, and
       (iii) by striking subparagraph (D).
       (B) Subparagraph (B) of section 9503(c)(3), as redesignated 
     by section 5002 of this Act and subsection (a)(3), is 
     amended--
       (i) by striking ``account'' in the heading and inserting 
     ``trust fund'',
       (ii) by striking ``or (B)'' in clause (ii), and
       (iii) by striking ``Account in the Aquatic Resources''.
       (C) Subparagraph (C) of section 9503(c)(3), as redesignated 
     by section 5002 of this Act and subsection (a)(3), is amended 
     by striking ``, but only to the extent such taxes are 
     deposited into the Highway Trust Fund''.
       (D) Paragraph (4) of section 9503(c), as redesignated by 
     section 5002 of this Act, is amended--
       (i) by striking ``Account in the Aquatic Resources'' in 
     subparagraph (A), and
       (ii) by striking ``, but only to the extent such taxes are 
     deposited into the Highway Trust Fund'' in subparagraph (B).
       (b) Merging of Accounts.--
       (1) In general.--Subsection (a) of section 9504 is amended 
     to read as follows:
       ``(a) Creation of Trust Fund.--There is hereby established 
     in the Treasury of the United States a trust fund to be known 
     as the `Sport Fish Restoration Trust Fund'. Such Trust Fund 
     shall consist of such amounts as may be appropriated, 
     credited, or paid to it as provided in this section, section 
     9503(c)(3), section 9503(c)(4), or section 9602(b).''.
       (2) Conforming amendments.--
       (A) Subsection (b) of section 9504 is amended--
       (i) by striking ``Account'' in the heading and inserting 
     ``Trust Fund'',
       (ii) by striking ``Account'' both places it appears in 
     paragraphs (1) and (2) and inserting ``Trust Fund'', and
       (iii) by striking ``account'' both places it appears in the 
     headings for paragraphs (1) and (2) and inserting ``trust 
     fund''.

[[Page 10948]]

       (B) Subsection (d) of section 9504, as amended by section 
     5001 of this Act, is amended--
       (i) by striking ``Aquatic Resources'' in the heading,
       (ii) by striking ``any Account in the Aquatic Resources'' 
     in paragraph (1) and inserting ``the Sports Fish 
     Restoration'', and
       (iii) by striking ``any such Account'' in paragraph (1) and 
     inserting ``such Trust Fund''.
       (C) Subsection (e) of section 9504, as amended by section 
     5002 of this Act, is amended by striking ``Boat Safety 
     Account and Sport Fish Restoration Account'' and inserting 
     ``Sport Fish Restoration Trust Fund''.
       (D) Section 9504 is amended by striking ``AQUATIC 
     RESOURCES'' in the heading and inserting ``SPORT FISH 
     RESTORATION''.
       (E) The item relating to section 9504 in the table of 
     sections for subchapter A of chapter 98 is amended by 
     striking ``aquatic resources'' and inserting ``sport fish 
     restoration''.
       (c) Phaseout of Boat Safety Account.--Subsection (c) of 
     section 9504 is amended to read as follows:
       ``(c) Expenditures From Boat Safety Account.--Amounts 
     remaining in the Boat Safety Account on October 1, 2004, and 
     amounts thereafter credited to the Account under section 
     9602(b), shall be available, as provided by appropriation 
     Acts, for making expenditures before October 1, 2009, to 
     carry out the purposes of section 13106 of title 46, United 
     States Code (as in effect on the date of the enactment of the 
     Safe, Accountable, Flexible, and Efficient Transportation 
     Equity Act of 2004).''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 5412. EXEMPTION OF LED DEVICES FROM SONAR DEVICES 
                   SUITABLE FOR FINDING FISH.

       (a) In General.--Section 4162(b) (defining sonar device 
     suitable for finding fish) is amended by striking ``or'' at 
     the end of paragraph (3), by striking the period at the end 
     of paragraph (4) and inserting ``, or'', and by adding at the 
     end the following new paragraph:
       ``(5) an LED display.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to articles sold by the manufacturer, producer, 
     or importer after September 30, 2004.

     SEC. 5413. REPEAL OF HARBOR MAINTENANCE TAX ON EXPORTS.

       (a) In General.--Subsection (d) of section 4462 (relating 
     to definitions and special rules) is amended to read as 
     follows:
       ``(d) Nonapplicability of Tax to Exports.--The tax imposed 
     by section 4461(a) shall not apply to any port use with 
     respect to any commercial cargo to be exported from the 
     United States.''.
       (b) Conforming Amendments.--
       (1) Section 4461(c)(1) is amended by adding ``or'' at the 
     end of subparagraph (A), by striking subparagraph (B), and by 
     redesignating subparagraph (C) as subparagraph (B).
       (2) Section 4461(c)(2) is amended by striking ``imposed--'' 
     and all that follows through ``in any other case,'' and 
     inserting ``imposed''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect before, on, and after the date of the 
     enactment of this Act.

     SEC. 5414. CAP ON EXCISE TAX ON CERTAIN FISHING EQUIPMENT.

       (a) In General.--Paragraph (1) of section 4161(a) (relating 
     to sport fishing equipment) is amended to read as follows:
       ``(1) Imposition of tax.--
       ``(A) In general.--There is hereby imposed on the sale of 
     any article of sport fishing equipment by the manufacturer, 
     producer, or importer a tax equal to 10 percent of the price 
     for which so sold.
       ``(B) Limitation on tax imposed on fishing rods and 
     poles.--The tax imposed by subparagraph (A) on any fishing 
     rod or pole shall not exceed $10.''.
       (b) Conforming Amendments.--Section 4161(a)(2) is amended 
     by striking ``paragraph (1)'' both places it appears and 
     inserting ``paragraph (1)(A)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to articles sold by the manufacturer, producer, 
     or importer after September 30, 2004.

     SEC. 5415. REDUCTION IN RATE OF TAX ON PORTABLE AERATED BAIT 
                   CONTAINERS.

       (a) In General.--Section 4161(a)(2)(A) (relating to 3 
     percent rate of tax for electric outboard motors and sonar 
     devices suitable for finding fish) is amended by inserting 
     ``or a portable aerated bait container'' after ``fish''.
       (b) Conforming Amendment.--The heading of section 
     4161(a)(2) is amended by striking ``electric outboard motors 
     and sonar devices suitable for finding fish'' and inserting 
     ``certain sport fishing equipment''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to articles sold by the manufacturer, producer, 
     or importer after September 30, 2004.

                     PART III--AERIAL EXCISE TAXES

     SEC. 5421. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR 
                   AGRICULTURAL AERIAL APPLICATORS AND EXEMPTION 
                   FOR FIXED-WING AIRCRAFT ENGAGED IN FORESTRY 
                   OPERATIONS.

       (a) No Waiver by Farm Owner, Tenant, or Operator 
     Necessary.--Subparagraph (B) of section 6420(c)(4) (relating 
     to certain farming use other than by owner, etc.) is amended 
     to read as follows:
       ``(B) if the person so using the gasoline is an aerial or 
     other applicator of fertilizers or other substances and is 
     the ultimate purchaser of the gasoline, then subparagraph (A) 
     of this paragraph shall not apply and the aerial or other 
     applicator shall be treated as having used such gasoline on a 
     farm for farming purposes.''.
       (b) Exemption Includes Fuel Used Between Airfield and 
     Farm.--Section 6420(c)(4), as amended by subsection (a), is 
     amended by adding at the end the following new flush 
     sentence:
     ``For purposes of this paragraph, in the case of an aerial 
     applicator, gasoline shall be treated as used on a farm for 
     farming purposes if the gasoline is used for the direct 
     flight between the airfield and 1 or more farms.''.
       (c) Exemption from Tax on Air Transportation of Persons for 
     Forestry Purposes Extended to Fixed-Wing Aircraft.--
     Subsection (f) of section 4261 (relating to tax on air 
     transportation of persons) is amended to read as follows:
       ``(f) Exemption for Certain Uses.--No tax shall be imposed 
     under subsection (a) or (b) on air transportation--
       ``(1) by helicopter for the purpose of transporting 
     individuals, equipment, or supplies in the exploration for, 
     or the development or removal of, hard minerals, oil, or gas, 
     or
       ``(2) by helicopter or by fixed-wing aircraft for the 
     purpose of the planting, cultivation, cutting, or 
     transportation of, or caring for, trees (including logging 
     operations),
     but only if the helicopter or fixed-wing aircraft does not 
     take off from, or land at, a facility eligible for assistance 
     under the Airport and Airway Development Act of 1970, or 
     otherwise use services provided pursuant to section 44509 or 
     44913(b) or subchapter I of chapter 471 of title 49, United 
     States Code, during such use. In the case of helicopter 
     transportation described in paragraph (1), this subsection 
     shall be applied by treating each flight segment as a 
     distinct flight.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel use or air transportation after the date 
     of the enactment of this Act.

     SEC. 5422. MODIFICATION OF RURAL AIRPORT DEFINITION.

       (a) In General.--Section 4261(e)(1)(B) (defining rural 
     airport) is amended--
       (1) by inserting ``(in the case of any airport described in 
     clause (ii)(III), on flight segments of at least 100 miles)'' 
     after ``by air'' in clause (i), and
       (2) by striking the period at the end of subclause (II) of 
     clause (ii) and inserting ``, or'', and by adding at the end 
     of clause (ii) the following new subclause:

       ``(III) is not connected by paved roads to another 
     airport.''.

       (b) Effective Date.--The amendments made by this section 
     shall take effect on April 1, 2004.

     SEC. 5423. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION 
                   PROVIDED BY SEAPLANES.

       (a) In General.--Section 4261 (relating to imposition of 
     tax) is amended by redesignating subsection (i) as subsection 
     (j) and by inserting after subsection (h) the following new 
     subsection:
       ``(i) Exemption for Seaplanes.--No tax shall be imposed by 
     this section or section 4271 on any air transportation by a 
     seaplane with respect to any segment consisting of a takeoff 
     from, and a landing on, water, but only if the places at 
     which such takeoff and landing occur have not received and 
     are not receiving financial assistance from the Airport and 
     Airways Trust Fund.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transportation beginning after March 31, 2004.

     SEC. 5424. CERTAIN SIGHTSEEING FLIGHTS EXEMPT FROM TAXES ON 
                   AIR TRANSPORTATION.

       (a) In General.--Section 4281 (relating to small aircraft 
     on nonestablished lines) is amended by adding at the end the 
     following new sentence: ``For purposes of this section, an 
     aircraft shall not be considered as operated on an 
     established line if such aircraft is operated on a flight the 
     sole purpose of which is sightseeing.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to transportation beginning on or 
     after the date of the enactment of this Act, but shall not 
     apply to any amount paid before such date for such 
     transportation.

                PART IV--ALCOHOLIC BEVERAGE EXCISE TAXES

     SEC. 5431. REPEAL OF SPECIAL OCCUPATIONAL TAXES ON PRODUCERS 
                   AND MARKETERS OF ALCOHOLIC BEVERAGES.

       (a) Repeal of Occupational Taxes.--
       (1) In general.--The following provisions of part II of 
     subchapter A of chapter 51 (relating to occupational taxes) 
     are hereby repealed:
       (A) Subpart A (relating to proprietors of distilled spirits 
     plants, bonded wine cellars, etc.).
       (B) Subpart B (relating to brewer).
       (C) Subpart D (relating to wholesale dealers) (other than 
     sections 5114 and 5116).
       (D) Subpart E (relating to retail dealers) (other than 
     section 5124).
       (E) Subpart G (relating to general provisions) (other than 
     sections 5142, 5143, 5145, and 5146).
       (2) Nonbeverage domestic drawback.--Section 5131 is amended 
     by striking ``, on payment of a special tax per annum,''.
       (3) Industrial use of distilled spirits.--Section 5276 is 
     hereby repealed.
       (b) Conforming Amendments.--
       (1)(A) The heading for part II of subchapter A of chapter 
     51 and the table of subparts for such part are amended to 
     read as follows:

                  ``PART II--MISCELLANEOUS PROVISIONS

``Subpart A. Manufacturers of stills.

[[Page 10949]]

``Subpart B. Nonbeverage domestic drawback claimants.
``Subpart C. Recordkeeping by dealers.
``Subpart D. Other provisions.''.

       (B) The table of parts for such subchapter A is amended by 
     striking the item relating to part II and inserting the 
     following new item:

``Part II. Miscellaneous provisions.''.

       (2) Subpart C of part II of such subchapter (relating to 
     manufacturers of stills) is redesignated as subpart A.
       (3)(A) Subpart F of such part II (relating to nonbeverage 
     domestic drawback claimants) is redesignated as subpart B and 
     sections 5131 through 5134 are redesignated as sections 5111 
     through 5114, respectively.
       (B) The table of sections for such subpart B, as so 
     redesignated, is amended--
       (i) by redesignating the items relating to sections 5131 
     through 5134 as relating to sections 5111 through 5114, 
     respectively, and
       (ii) by striking ``and rate of tax'' in the item relating 
     to section 5111, as so redesignated.
       (C) Section 5111, as redesignated by subparagraph (A), is 
     amended--
       (i) by striking ``AND RATE OF TAX'' in the section heading,
       (ii) by striking the subsection heading for subsection (a), 
     and
       (iii) by striking subsection (b).
       (4) Part II of subchapter A of chapter 51 is amended by 
     adding after subpart B, as redesignated by paragraph (3), the 
     following new subpart:

                 ``Subpart C--Recordkeeping by Dealers

``Sec. 5121. Recordkeeping by wholesale dealers.
``Sec. 5122. Recordkeeping by retail dealers.
``Sec. 5123. Preservation and inspection of records, and entry of 
              premises for inspection.''.

       (5)(A) Section 5114 (relating to records) is moved to 
     subpart C of such part II and inserted after the table of 
     sections for such subpart.
       (B) Section 5114 is amended--
       (i) by striking the section heading and inserting the 
     following new heading:

     ``SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.'',

     and
       (ii) by redesignating subsection (c) as subsection (d) and 
     by inserting after subsection (b) the following new 
     subsection:
       ``(c) Wholesale Dealers.--For purposes of this part--
       ``(1) Wholesale dealer in liquors.--The term `wholesale 
     dealer in liquors' means any dealer (other than a wholesale 
     dealer in beer) who sells, or offers for sale, distilled 
     spirits, wines, or beer, to another dealer.
       ``(2) Wholesale dealer in beer.--The term `wholesale dealer 
     in beer' means any dealer who sells, or offers for sale, 
     beer, but not distilled spirits or wines, to another dealer.
       ``(3) Dealer.--The term `dealer' means any person who 
     sells, or offers for sale, any distilled spirits, wines, or 
     beer.
       ``(4) Presumption in case of sale of 20 wine gallons or 
     more.--The sale, or offer for sale, of distilled spirits, 
     wines, or beer, in quantities of 20 wine gallons or more to 
     the same person at the same time, shall be presumptive 
     evidence that the person making such sale, or offer for sale, 
     is engaged in or carrying on the business of a wholesale 
     dealer in liquors or a wholesale dealer in beer, as the case 
     may be. Such presumption may be overcome by evidence 
     satisfactorily showing that such sale, or offer for sale, was 
     made to a person other than a dealer.''.
       (C) Paragraph (3) of section 5121(d), as so redesignated, 
     is amended by striking ``section 5146'' and inserting 
     ``section 5123''.
       (6)(A) Section 5124 (relating to records) is moved to 
     subpart C of part II of subchapter A of chapter 51 and 
     inserted after section 5121.
       (B) Section 5124 is amended--
       (i) by striking the section heading and inserting the 
     following new heading:

     ``SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.'',

       (ii) by striking ``section 5146'' in subsection (c) and 
     inserting ``section 5123'', and
       (iii) by redesignating subsection (c) as subsection (d) and 
     inserting after subsection (b) the following new subsection:
       ``(c) Retail Dealers.--For purposes of this section--
       ``(1) Retail dealer in liquors.--The term `retail dealer in 
     liquors' means any dealer (other than a retail dealer in beer 
     or a limited retail dealer) who sells, or offers for sale, 
     distilled spirits, wines, or beer, to any person other than a 
     dealer.
       ``(2) Retail dealer in beer.--The term `retail dealer in 
     beer' means any dealer (other than a limited retail dealer) 
     who sells, or offers for sale, beer, but not distilled 
     spirits or wines, to any person other than a dealer.
       ``(3) Limited retail dealer.--The term `limited retail 
     dealer' means any fraternal, civic, church, labor, 
     charitable, benevolent, or ex-servicemen's organization 
     making sales of distilled spirits, wine or beer on the 
     occasion of any kind of entertainment, dance, picnic, bazaar, 
     or festival held by it, or any person making sales of 
     distilled spirits, wine or beer to the members, guests, or 
     patrons of bona fide fairs, reunions, picnics, carnivals, or 
     other similar outings, if such organization or person is not 
     otherwise engaged in business as a dealer.
       ``(4) Dealer.--The term `dealer' has the meaning given such 
     term by section 5121(c)(3).''.
       (7) Section 5146 is moved to subpart C of part II of 
     subchapter A of chapter 51, inserted after section 5122, and 
     redesignated as section 5123.
       (8) Part II of subchapter A of chapter 51 is amended by 
     inserting after subpart C the following new subpart:

                     ``Subpart D--Other Provisions

``Sec. 5131. Packaging distilled spirits for industrial uses.
``Sec. 5132. Prohibited purchases by dealers.''.

       (9) Section 5116 is moved to subpart D of part II of 
     subchapter A of chapter 51, inserted after the table of 
     sections, redesignated as section 5131, and amended by 
     inserting ``(as defined in section 5121(c))'' after 
     ``dealer'' in subsection (a).
       (10) Subpart D of part II of subchapter A of chapter 51 is 
     amended by adding at the end thereof the following new 
     section:

     ``SEC. 5132. PROHIBITED PURCHASES BY DEALERS.

       ``(a) In General.--Except as provided in regulations 
     prescribed by the Secretary, it shall be unlawful for a 
     dealer to purchase distilled spirits for resale from any 
     person other than a wholesale dealer in liquors who is 
     required to keep the records prescribed by section 5121.
       ``(b) Limited Retail Dealers.--A limited retail dealer may 
     lawfully purchase distilled spirits for resale from a retail 
     dealer in liquors.
       ``(c) Penalty and Forfeiture.--

  ``For penalty and forfeiture provisions applicable to violations of 
subsection (a), see sections 5687 and 7302.''.

       (11) Subsection (b) of section 5002 is amended--
       (A) by striking ``section 5112(a)'' and inserting ``section 
     5121(c)(3)'',
       (B) by striking ``section 5112'' and inserting ``section 
     5121(c)'',
       (C) by striking ``section 5122'' and inserting ``section 
     5122(c)''.
       (12) Subparagraph (A) of section 5010(c)(2) is amended by 
     striking ``section 5134'' and inserting ``section 5114''.
       (13) Subsection (d) of section 5052 is amended to read as 
     follows:
       ``(d) Brewer.--For purposes of this chapter, the term 
     `brewer' means any person who brews beer or produces beer for 
     sale. Such term shall not include any person who produces 
     only beer exempt from tax under section 5053(e).''.
       (14) The text of section 5182 is amended to read as 
     follows:
       ``For provisions requiring recordkeeping by wholesale 
     liquor dealers, see section 5121, and by retail liquor 
     dealers, see section 5122.''.
       (15) Subsection (b) of section 5402 is amended by striking 
     ``section 5092'' and inserting ``section 5052(d)''.
       (16) Section 5671 is amended by striking ``or 5091''.
       (17)(A) Part V of subchapter J of chapter 51 is hereby 
     repealed.
       (B) The table of parts for such subchapter J is amended by 
     striking the item relating to part V.
       (18)(A) Sections 5142, 5143, and 5145 are moved to 
     subchapter D of chapter 52, inserted after section 5731, 
     redesignated as sections 5732, 5733, and 5734, respectively, 
     and amended by striking ``this part'' each place it appears 
     and inserting ``this subchapter''.
       (B) Section 5732, as redesignated by subparagraph (A), is 
     amended by striking ``(except the tax imposed by section 
     5131)'' each place it appears.
       (C) Paragraph (2) of section 5733(c), as redesignated by 
     subparagraph (A), is amended by striking ``liquors'' both 
     places it appears and inserting ``tobacco products and 
     cigarette papers and tubes''.
       (D) The table of sections for subchapter D of chapter 52 is 
     amended by adding at the end thereof the following:

``Sec. 5732. Payment of tax.
``Sec. 5733. Provisions relating to liability for occupational taxes.
``Sec. 5734. Application of State laws.''.

       (E) Section 5731 is amended by striking subsection (c) and 
     by redesignating subsection (d) as subsection (c).
       (19) Subsection (c) of section 6071 is amended by striking 
     ``section 5142'' and inserting ``section 5732''.
       (20) Paragraph (1) of section 7652(g) is amended--
       (A) by striking ``subpart F'' and inserting ``subpart B'', 
     and
       (B) by striking ``section 5131(a)'' and inserting ``section 
     5111''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2004, but shall not apply to 
     taxes imposed for periods before such date.

     SEC. 5432. SUSPENSION OF LIMITATION ON RATE OF RUM EXCISE TAX 
                   COVER OVER TO PUERTO RICO AND VIRGIN ISLANDS.

       (a) In General.--Section 7652(f)(1) (relating to limitation 
     on cover over of tax on distilled spirits) is amended by 
     striking ``January 1, 2004'' and inserting ``October 1, 2004, 
     and $13.50 in the case of distilled spirits brought into the 
     United States after September 30, 2004, and before January 1, 
     2006''.
       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to articles containing distilled spirits brought into 
     the United States after December 31, 2003.
       (2) Special rule.--
       (A) In general.--After September 30, 2004, the treasury of 
     Puerto Rico shall make a Conservation Trust Fund transfer 
     within 30 days from the date of each cover over payment to 
     such treasury under section 7652(e) of the Internal Revenue 
     Code of 1986.
       (B) Conservation trust fund transfer.--
       (i) In general.--For purposes of this paragraph, the term 
     ``Conservation Trust Fund transfer'' means a transfer to the 
     Puerto Rico Conservation Trust Fund of an amount equal to

[[Page 10950]]

     50 cents per proof gallon of the taxes imposed under section 
     5001 or section 7652 of such Code on distilled spirits that 
     are covered over to the treasury of Puerto Rico under section 
     7652(e) of such Code.
       (ii) Treatment of transfer.--Each Conservation Trust Fund 
     transfer shall be treated as principal for an endowment, the 
     income from which to be available for use by the Puerto Rico 
     Conservation Trust Fund for the purposes for which the Trust 
     Fund was established.
       (iii) Result of nontransfer.--

       (I) In general.--Upon notification by the Secretary of the 
     Interior that a Conservation Trust Fund transfer has not been 
     made by the treasury of Puerto Rico, the Secretary of the 
     Treasury shall, except as provided in subclause (II), deduct 
     and withhold from the next cover over payment to be made to 
     the treasury of Puerto Rico under section 7652(e) of such 
     Code an amount equal to the appropriate Conservation Trust 
     Fund transfer and interest thereon at the underpayment rate 
     established under section 6621 of such Code as of the due 
     date of such transfer. The Secretary of the Treasury shall 
     transfer such amount deducted and withheld, and the interest 
     thereon, directly to the Puerto Rico Conservation Trust Fund.
       (II) Good cause exception.--If the Secretary of the 
     Interior finds, after consultation with the Governor of 
     Puerto Rico, that the failure by the treasury of Puerto Rico 
     to make a required transfer was for good cause, and notifies 
     the Secretary of the Treasury of the finding of such good 
     cause before the due date of the next cover over payment 
     following the notification of nontransfer, then the Secretary 
     of the Treasury shall not deduct the amount of such 
     nontransfer from any cover over payment.

       (C) Puerto rico conservation trust fund.--For purposes of 
     this paragraph, the term ``Puerto Rico Conservation Trust 
     Fund'' means the fund established pursuant to a Memorandum of 
     Understanding between the United States Department of the 
     Interior and the Commonwealth of Puerto Rico, dated December 
     24, 1968.

                       PART V--SPORT EXCISE TAXES

     SEC. 5441. CUSTOM GUNSMITHS.

       (a) Small Manufacturers Exempt From Firearms Excise Tax.--
     Section 4182 (relating to exemptions) is amended by 
     redesignating subsection (c) as subsection (d) and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Small Manufacturers, Etc.--
       ``(1) In general.--The tax imposed by section 4181 shall 
     not apply to any article described in such section if 
     manufactured, produced, or imported by a person who 
     manufactures, produces, and imports less than 50 of such 
     articles during the calendar year.
       ``(2) Controlled groups.--All persons treated as a single 
     employer for purposes of subsection (a) or (b) of section 52 
     shall be treated as one person for purposes of paragraph 
     (1).''.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to articles sold by the manufacturer, producer, or 
     importer on or after the date which is the first day of the 
     month beginning at least 2 weeks after the date of the 
     enactment of this Act.
       (2) No inference.--Nothing in the amendments made by this 
     section shall be construed to create any inference with 
     respect to the proper tax treatment of any sales before the 
     effective date of such amendments.

     SEC. 5442. MODIFIED TAXATION OF IMPORTED ARCHERY PRODUCTS.

       (a) Bows.--Paragraph (1) of section 4161(b) (relating to 
     bows) is amended to read as follows:
       ``(1) Bows.--
       ``(A) In general.--There is hereby imposed on the sale by 
     the manufacturer, producer, or importer of any bow which has 
     a peak draw weight of 30 pounds or more, a tax equal to 11 
     percent of the price for which so sold.
       ``(B) Archery equipment.--There is hereby imposed on the 
     sale by the manufacturer, producer, or importer--
       ``(i) of any part or accessory suitable for inclusion in or 
     attachment to a bow described in subparagraph (A), and
       ``(ii) of any quiver or broadhead suitable for use with an 
     arrow described in paragraph (2),
     a tax equal to 11 percent of the price for which so sold.''.
       (b) Arrows.--Subsection (b) of section 4161 (relating to 
     bows and arrows, etc.) is amended by redesignating paragraph 
     (3) as paragraph (4) and inserting after paragraph (2) the 
     following:
       ``(3) Arrows.--
       ``(A) In general.--There is hereby imposed on the sale by 
     the manufacturer, producer, or importer of any arrow, a tax 
     equal to 12 percent of the price for which so sold.
       ``(B) Exception.--In the case of any arrow of which the 
     shaft or any other component has been previously taxed under 
     paragraph (1) or (2)--
       ``(i) section 6416(b)(3) shall not apply, and
       ``(ii) the tax imposed by subparagraph (A) shall be an 
     amount equal to the excess (if any) of--

       ``(I) the amount of tax imposed by this paragraph 
     (determined without regard to this subparagraph), over
       ``(II) the amount of tax paid with respect to the tax 
     imposed under paragraph (1) or (2) on such shaft or 
     component.

       ``(C) Arrow.--For purposes of this paragraph, the term 
     `arrow' means any shaft described in paragraph (2) to which 
     additional components are attached.''.
       (c) Conforming Amendments.--Section 4161(b)(2) is amended--
       (1) by inserting ``(other than broadheads)'' after 
     ``point'', and
       (2) by striking ``Arrows.--'' in the heading and inserting 
     ``Arrow components.--''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to articles sold by the manufacturer, producer, 
     or importer after the date of the enactment of this Act.

     SEC. 5443. TREATMENT OF TRIBAL GOVERNMENTS FOR PURPOSES OF 
                   FEDERAL WAGERING EXCISE AND OCCUPATIONAL TAXES.

       (a) In General.--Subsection (a) of section 7871 (relating 
     to Indian tribal governments treated as States for certain 
     purposes) is amended by striking ``and'' at the end of 
     paragraph (6), by striking the period at the end of paragraph 
     (7) and inserting ``; and'', and by adding at the end the 
     following new paragraph:
       ``(8) for purposes of chapter 35 (relating to taxes on 
     wagering).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2004, but shall not apply to 
     taxes imposed for periods before such date.

                       PART VI--OTHER PROVISIONS

     SEC. 5451. INCOME TAX CREDIT FOR DISTILLED SPIRITS 
                   WHOLESALERS AND FOR DISTILLED SPIRITS IN 
                   CONTROL STATE BAILMENT WAREHOUSES FOR COSTS OF 
                   CARRYING FEDERAL EXCISE TAXES ON BOTTLED 
                   DISTILLED SPIRITS.

       (a) In General.--Subpart A of part I of subchapter A of 
     chapter 51 (relating to gallonage and occupational taxes) is 
     amended by adding at the end the following new section:

     ``SEC. 5011. INCOME TAX CREDIT FOR AVERAGE COST OF CARRYING 
                   EXCISE TAX.

       ``(a) In General.--For purposes of section 38, the amount 
     of the distilled spirits credit for any taxable year is the 
     amount equal to the product of--
       ``(1) in the case of--
       ``(A) any eligible wholesaler--
       ``(i) the number of cases of bottled distilled spirits--

       ``(I) which were bottled in the United States, and
       ``(II) which are purchased by such wholesaler during the 
     taxable year directly from the bottler of such spirits, or

       ``(B) any person which is subject to section 5005 and which 
     is not an eligible wholesaler, the number of cases of bottled 
     distilled spirits which are stored in a warehouse operated 
     by, or on behalf of, a State, or agency or political 
     subdivision thereof, on which title has not passed on an 
     unconditional sale basis, and
       ``(2) the average tax-financing cost per case for the most 
     recent calendar year ending before the beginning of such 
     taxable year.
       ``(b) Eligible Wholesaler.--For purposes of this section, 
     the term `eligible wholesaler' means any person which holds a 
     permit under the Federal Alcohol Administration Act as a 
     wholesaler of distilled spirits which is not a State, or 
     agency or political subdivision thereof.
       ``(c) Average Tax-Financing Cost.--
       ``(1) In general.--For purposes of this section, the 
     average tax-financing cost per case for any calendar year is 
     the amount of interest which would accrue at the deemed 
     financing rate during a 60-day period on an amount equal to 
     the deemed Federal excise tax per case.
       ``(2) Deemed financing rate.--For purposes of paragraph 
     (1), the deemed financing rate for any calendar year is the 
     average of the corporate overpayment rates under paragraph 
     (1) of section 6621(a) (determined without regard to the last 
     sentence of such paragraph) for calendar quarters of such 
     year.
       ``(3) Deemed federal excise tax per case.--For purposes of 
     paragraph (1), the deemed Federal excise tax per case is 
     $25.68.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Case.--The term `case' means 12 80-proof 750 
     milliliter bottles.
       ``(2) Number of cases in lot.--The number of cases in any 
     lot of distilled spirits shall be determined by dividing the 
     number of liters in such lot by 9.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit), as 
     amended by section 5103 of this Act, is amended by striking 
     ``plus'' at the end of paragraph (15), by striking the period 
     at the end of paragraph (16) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(17) the distilled spirits credit determined under 
     section 5011(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by section 5103 of this Act, 
     is amended by adding at the end the following new paragraph:
       ``(12) No carryback of section 5011 credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit determined 
     under section 5011(a) may be carried back to a taxable year 
     beginning before the date of the enactment of section 
     5011.''.
       (2) The table of sections for subpart A of part I of 
     subchapter A of chapter 51 is amended by adding at the end 
     the following new item:

``Sec. 5011. Income tax credit for average cost of carrying excise 
              tax.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

[[Page 10951]]



     SEC. 5452. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER 
                   TAKEOFF VEHICLES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business-related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.

       ``(a) General Rule.--For purposes of section 38, the amount 
     of the commercial power takeoff vehicles credit determined 
     under this section for the taxable year is $250 for each 
     qualified commercial power takeoff vehicle owned by the 
     taxpayer as of the close of the calendar year in which or 
     with which the taxable year of the taxpayer ends.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified commercial power takeoff vehicle.--The term 
     `qualified commercial power takeoff vehicle' means any 
     highway vehicle described in paragraph (2) which is propelled 
     by any fuel subject to tax under section 4041 or 4081 if such 
     vehicle is used in a trade or business or for the production 
     of income (and is licensed and insured for such use).
       ``(2) Highway vehicle described.--A highway vehicle is 
     described in this paragraph if such vehicle is--
       ``(A) designed to engage in the daily collection of refuse 
     or recyclables from homes or businesses and is equipped with 
     a mechanism under which the vehicle's propulsion engine 
     provides the power to operate a load compactor, or
       ``(B) designed to deliver ready mixed concrete on a daily 
     basis and is equipped with a mechanism under which the 
     vehicle's propulsion engine provides the power to operate a 
     mixer drum to agitate and mix the product en route to the 
     delivery site.
       ``(c) Exception for Vehicles Used by Governments, Etc.--No 
     credit shall be allowed under this section for any vehicle 
     owned by any person at the close of a calendar year if such 
     vehicle is used at any time during such year by--
       ``(1) the United States or an agency or instrumentality 
     thereof, a State, a political subdivision of a State, or an 
     agency or instrumentality of one or more States or political 
     subdivisions, or
       ``(2) an organization exempt from tax under section 501(a).
       ``(d) Termination.--This section shall not apply with 
     respect to any calendar year after 2006.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit), as 
     amended by section 5451 of this Act, is amended by striking 
     ``plus'' at the end of paragraph (16), by striking the period 
     at the end of paragraph (17) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(18) the commercial power takeoff vehicles credit under 
     section 45G(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by section 5451 of this Act, 
     is amended by adding at the end the following new paragraph:
       ``(13) No carryback of section 45g credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit determined 
     under section 45G(a) may be carried back to a taxable year 
     beginning on or before the date of the enactment of section 
     45G.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 45G. Commercial power takeoff vehicles credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5453. CREDIT FOR AUXILIARY POWER UNITS INSTALLED ON 
                   DIESEL-POWERED TRUCKS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business-related credits), as amended 
     by section 5452 of this Act, is amended by adding at the end 
     the following new section:

     ``SEC. 45H. AUXILIARY POWER UNIT CREDIT.

       ``(a) General Rule.--For purposes of section 38, the amount 
     of the auxiliary power unit credit determined under this 
     section for the taxable year is $250 for each qualified 
     auxiliary power unit--
       ``(1) purchased by the taxpayer, and
       ``(2) installed or caused to be installed by the taxpayer 
     on a qualified heavy-duty highway vehicle during such taxable 
     year.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified auxiliary power unit.--The term `qualified 
     auxiliary power unit' means any integrated system which--
       ``(A) provides heat, air conditioning, engine warming, and 
     electricity to the factory installed components on a 
     qualified heavy-duty highway vehicle as if the main drive 
     engine of such vehicle was in operation,
       ``(B) is employed to reduce long-term idling of the diesel 
     engine on such a vehicle, and
       ``(C) is certified by the Environmental Protection Agency 
     as meeting emission standards in regulations in effect on the 
     date of the enactment of this section.
       ``(2) Qualified heavy-duty highway vehicle.--The term 
     `qualified heavy-duty highway vehicle' means any highway 
     vehicle weighing more than 12,500 pounds and powered by a 
     diesel engine.
       ``(c) Termination.--This section shall not apply with 
     respect to any installation occurring after December 31, 
     2006.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit), as 
     amended by section 5452 of this Act, is amended by striking 
     ``plus'' at the end of paragraph (17), by striking the period 
     at the end of paragraph (18) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(19) the auxiliary power unit credit under section 
     45H(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by section 5452 of this Act, 
     is amended by adding at the end the following new paragraph:
       ``(14) No carryback of section 45h credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit determined 
     under section 45H(a) may be carried back to a taxable year 
     beginning on or before the date of the enactment of section 
     45H.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by section 5452 of this 
     Act, is amended by adding at the end the following new item:

``Sec. 45H. Auxiliary power unit credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to auxiliary power units purchased and installed 
     for taxable years beginning after the date of the enactment 
     of this Act.

                  Subtitle F--Miscellaneous Provisions

     SEC. 5501. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.

       (a) Establishment.--There is established a Motor Fuel Tax 
     Enforcement Advisory Commission (in this section referred to 
     as the ``Commission'').
       (b) Function.--The Commission shall--
       (1) review motor fuel revenue collections, historical and 
     current;
       (2) review the progress of investigations;
       (3) develop and review legislative proposals with respect 
     to motor fuel taxes;
       (4) monitor the progress of administrative regulation 
     projects relating to motor fuel taxes;
       (5) review the results of Federal and State agency 
     cooperative efforts regarding motor fuel taxes;
       (6) review the results of Federal interagency cooperative 
     efforts regarding motor fuel taxes; and
       (7) evaluate and make recommendations regarding--
       (A) the effectiveness of existing Federal enforcement 
     programs regarding motor fuel taxes,
       (B) enforcement personnel allocation, and
       (C) proposals for regulatory projects, legislation, and 
     funding.
       (c) Membership.--
       (1) Appointment.--The Commission shall be composed of the 
     following representatives appointed by the Chairmen and the 
     Ranking Members of the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives:
       (A) At least 1 representative from each of the following 
     Federal entities: the Department of Homeland Security, the 
     Department of Transportation--Office of Inspector General, 
     the Federal Highway Administration, the Department of 
     Defense, and the Department of Justice.
       (B) At least 1 representative from the Federation of State 
     Tax Administrators.
       (C) At least 1 representative from any State department of 
     transportation.
       (D) 2 representatives from the highway construction 
     industry.
       (E) 5 representatives from industries relating to fuel 
     distribution -- refiners (2 representatives), distributors (1 
     representative), pipelines (1 representative), and terminal 
     operators (2 representatives).
       (F) 1 representative from the retail fuel industry.
       (G) 2 representatives from the staff of the Committee on 
     Finance of the Senate and 2 representatives from the staff of 
     the Committee on Ways and Means of the House of 
     Representatives.
       (2) Terms.--Members shall be appointed for the life of the 
     Commission.
       (3) Vacancies.--A vacancy in the Commission shall be filled 
     in the manner in which the original appointment was made.
       (4) Travel expenses.--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.
       (5) Chairman.--The Chairman of the Commission shall be 
     elected by the members.
       (d) Funding.--Such sums as are necessary shall be available 
     from the Highway Trust fund for the expenses of the 
     Commission.
       (e) Consultation.--Upon request of the Commission, 
     representatives of the Department of the Treasury and the 
     Internal Revenue Service shall be available for consultation 
     to assist the Commission in carrying out its duties under 
     this section.
       (f) Obtaining Data.--The Commission may secure directly 
     from any department or agency of the United States, 
     information (other than information required by any law to be 
     kept confidential by such department or agency) necessary for 
     the Commission to carry out its duties under this section. 
     Upon request of the Commission, the head of that department 
     or agency shall furnish such nonconfidential information to 
     the Commission. The Commission shall also gather evidence 
     through such means as it may deem appropriate, including 
     through holding hearings and soliciting comments by means of 
     Federal Register notices.

[[Page 10952]]

       (g) Termination.--The Commission shall terminate after 
     September 30, 2009.

     SEC. 5502. NATIONAL SURFACE TRANSPORTATION INFRASTRUCTURE 
                   FINANCING COMMISSION.

       (a) Establishment.--There is established a National Surface 
     Transportation Infrastructure Financing Commission (in this 
     section referred to as the ``Commission''). The Commission 
     shall hold its first meeting within 90 days of the 
     appointment of the eighth individual to be named to the 
     Commission.
       (b) Function.--
       (1) In general.--The Commission shall--
       (A) make a thorough investigation and study of revenues 
     flowing into the Highway Trust Fund under current law, 
     including the individual components of the overall flow of 
     such revenues;
       (B) consider whether the amount of such revenues is likely 
     to increase, decline, or remain unchanged, absent changes in 
     the law, particularly by taking into account the impact of 
     possible changes in public vehicular choice, fuel use, or 
     travel alternatives that could be expected to reduce or 
     increase revenues into the Highway Trust Fund;
       (C) consider alternative approaches to generating revenues 
     for the Highway Trust Fund, and the level of revenues that 
     such alternatives would yield;
       (D) consider highway and transit needs and whether 
     additional revenues into the Highway Trust Fund, or other 
     Federal revenues dedicated to highway and transit 
     infrastructure, would be required in order to meet such 
     needs; and
       (E) study such other matters closely related to the 
     subjects described in the preceding subparagraphs as it may 
     deem appropriate.
       (2) Time frame of investigation and study.--The time frame 
     to be considered by the Commission shall extend through the 
     year 2015.
       (3) Preparation of report.--Based on such investigation and 
     study, the Commission shall develop a final report, with 
     recommendations and the bases for those recommendations, 
     indicating policies that should be adopted, or not adopted, 
     to achieve various levels of annual revenue for the Highway 
     Trust Fund and to enable the Highway Trust Fund to receive 
     revenues sufficient to meet highway and transit needs. Such 
     recommendations shall address, among other matters as the 
     Commission may deem appropriate--
       (A) what levels of revenue are required by the Federal 
     Highway Trust Fund in order for it to meet needs to--
       (i) maintain, and
       (ii) improve the condition and performance of the Nation's 
     highway and transit systems;
       (B) what levels of revenue are required by the Federal 
     Highway Trust Fund in order to ensure that Federal levels of 
     investment in highways and transit do not decline in real 
     terms; and
       (C) the extent, if any, to which the Highway Trust Fund 
     should be augmented by other mechanisms or funds as a Federal 
     means of financing highway and transit infrastructure 
     investments.
       (c) Membership.--
       (1) Appointment.--The Commission shall be composed of 15 
     members, appointed as follows:
       (A) 7 members appointed by the Secretary of Transportation, 
     in consultation with the Secretary of the Treasury.
       (B) 2 members appointed by the Chairman of the Committee on 
     Ways and Means of the House of Representatives.
       (C) 2 members appointed by the Ranking Minority Member of 
     the Committee on Ways and Means of the House of 
     Representatives.
       (D) 2 members appointed by the Chairman of the Committee on 
     Finance of the Senate.
       (E) 2 members appointed by the Ranking Minority Member of 
     the Committee on Finance of the Senate.
       (2) Qualifications.--Members appointed pursuant to 
     paragraph (1) shall be appointed from among individuals 
     knowledgeable in the fields of public transportation finance 
     or highway and transit programs, policy, and needs, and may 
     include representatives of interested parties, such as State 
     and local governments or other public transportation 
     authorities or agencies, representatives of the 
     transportation construction industry (including suppliers of 
     technology, machinery and materials), transportation labor 
     (including construction and providers), transportation 
     providers, the financial community, and users of highway and 
     transit systems.
       (3) Terms.--Members shall be appointed for the life of the 
     Commission.
       (4) Vacancies.--A vacancy in the Commission shall be filled 
     in the manner in which the original appointment was made.
       (5) Travel expenses.--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.
       (6) Chairman.--The Chairman of the Commission shall be 
     elected by the members.
       (d) Staff.--The Commission may appoint and fix the pay of 
     such personnel as it considers appropriate.
       (e) Funding.--Funding for the Commission shall be provided 
     by the Secretary of the Treasury and by the Secretary of 
     Transportation, out of funds available to those agencies for 
     administrative and policy functions.
       (f) Staff of Federal Agencies.--Upon request of the 
     Commission, the head of any department or agency of the 
     United States may detail any of the personnel of that 
     department or agency to the Commission to assist in carrying 
     out its duties under this section.
       (g) Obtaining Data.--The Commission may secure directly 
     from any department or agency of the United States, 
     information (other than information required by any law to be 
     kept confidential by such department or agency) necessary for 
     the Commission to carry out its duties under this section. 
     Upon request of the Commission, the head of that department 
     or agency shall furnish such nonconfidential information to 
     the Commission. The Commission shall also gather evidence 
     through such means as it may deem appropriate, including 
     through holding hearings and soliciting comments by means of 
     Federal Register notices.
       (h) Report.--Not later than 2 years after the date of its 
     first meeting, the Commission shall transmit its final 
     report, including recommendations, to the Secretary of 
     Transportation, the Secretary of the Treasury, and the 
     Committee on Ways and Means of the House of Representatives, 
     the Committee on Finance of the Senate, the Committee on 
     Transportation and Infrastructure of the House of 
     Representatives, the Committee on Environment and Public 
     Works of the Senate, and the Committee on Banking, Housing, 
     and Urban Affairs of the Senate.
       (i) Termination.--The Commission shall terminate on the 
     180th day following the date of transmittal of the report 
     under subsection (h). All records and papers of the 
     Commission shall thereupon be delivered to the Administrator 
     of General Services for deposit in the National Archives.

     SEC. 5503. TREASURY STUDY OF FUEL TAX COMPLIANCE AND 
                   INTERAGENCY COOPERATION.

       (a) In General.--Not later than January 31, 2006, the 
     Secretary of the Treasury shall submit to the Committee on 
     Finance of the Senate and the Committee on Ways and Means of 
     the House of Representatives a report regarding fuel tax 
     enforcement which shall include the information and analysis 
     specified in subsections (b) and (c) and any other 
     information and recommendations the Secretary of the Treasury 
     may deem appropriate.
       (b) Audits.--With respect to audits conducted by the 
     Internal Revenue Service, the report required under 
     subsection (a) shall include--
       (1) the number and geographic distribution of audits 
     conducted annually, by fiscal year, between October 1, 2001, 
     and September 30, 2005;
       (2) the total volume involved for each of the taxable fuels 
     covered by such audits and a comparison to the annual 
     production of such fuels;
       (3) the staff hours and number of personnel devoted to the 
     audits per year; and
       (4) the results of such audits by year, including total tax 
     collected, total penalties collected, and number of referrals 
     for criminal prosecution.
       (c) Enforcement Activities.--With respect to enforcement 
     activities, the report required under subsection (a) shall 
     include--
       (1) the number and geographic distribution of criminal 
     investigations and prosecutions annually, by fiscal year, 
     between October 1, 2001, and September 30, 2005, and the 
     results of such investigations and prosecutions;
       (2) to the extent such investigations and prosecutions 
     involved other agencies, State or Federal, a breakdown by 
     agency of the number of joint investigations involved;
       (3) an assessment of the effectiveness of joint action and 
     cooperation between the Department of the Treasury and other 
     Federal and State agencies, including a discussion of the 
     ability and need to share information across agencies for 
     both civil and criminal Federal tax enforcement and 
     enforcement of State or Federal laws relating to fuels;
       (4) the staff hours and number of personnel devoted to 
     criminal investigations and prosecutions per year;
       (5) the staff hours and number of personnel devoted to 
     administrative collection of fuel taxes; and
       (6) the results of administrative collection efforts 
     annually, by fiscal year, between October 1, 2001, and 
     September 30, 2005.

     SEC. 5504. EXPANSION OF HIGHWAY TRUST FUND EXPENDITURE 
                   PURPOSES TO INCLUDE FUNDING FOR STUDIES OF 
                   SUPPLEMENTAL OR ALTERNATIVE FINANCING FOR THE 
                   HIGHWAY TRUST FUND.

       (a) In General.--From amounts available in the Highway 
     Trust Fund, there is authorized to be expended for 2 
     comprehensive studies of supplemental or alternative funding 
     sources for the Highway Trust Fund--
       (1) $1,000,000 to the Western Transportation Institute of 
     the College of Engineering at Montana State University for 
     the study and report described in subsection (b), and
       (2) $16,500,000 to the Public Policy Center of the 
     University of Iowa for the study and report described in 
     subsection (c).
       (b) Study of Funding Mechanisms.--Not later than December 
     31, 2006, the Western Transportation Institute of the College 
     of Engineering at Montana State University shall report to 
     the Secretary of the Treasury and the Secretary of 
     Transportation on a study of highway funding mechanisms of 
     other industrialized nations, an examination of the viability 
     of alternative funding proposals, including congestion 
     pricing, greater reliance on tolls, privatization of 
     facilities, and bonding for construction of added capacity, 
     and an examination of increasing the rates of motor fuels 
     taxes in effect on the date of the enactment of this Act, 
     including the indexation of such rates.
       (c) Study on Field Test of On-Board Computer Assessment of 
     Highway Use Taxes.--Not later than December 31, 2011, the 
     Public Policy Center of the University of Iowa shall direct, 
     analyze, and report to the Secretary of the Treasury and the 
     Secretary of Transportation

[[Page 10953]]

     on a long-term field test of an approach to assessing highway 
     use taxes based upon actual mileage driven by a specific 
     vehicle on specific types of highways by use of an on-board 
     computer--
       (1) which is linked to satellites to calculate highway 
     mileage traversed,
       (2) which computes the appropriate highway use tax for each 
     of the Federal, State, and local governments as the vehicle 
     makes use of the highways, and
       (3) the data from which is periodically downloaded by the 
     vehicle owner to a collection center for an assessment of 
     highway use taxes due in each jurisdiction traversed.The 
     components of the field test shall include 2 years for 
     preparation, including selection of vendors and test 
     participants, and 3-year testing period.

     SEC. 5505. TREASURY STUDY OF HIGHWAY FUELS USED BY TRUCKS FOR 
                   NON-TRANSPORTATION PURPOSES.

       (a) Study.--The Secretary of the Treasury shall conduct a 
     study regarding the use of highway motor fuel by trucks that 
     is not used for the propulsion of the vehicle. As part of 
     such study--
       (1) in the case of vehicles carrying equipment that is 
     unrelated to the transportation function of the vehicle--
       (A) the Secretary of the Treasury, in consultation with the 
     Secretary of Transportation, and with public notice and 
     comment, shall determine the average annual amount of tax 
     paid fuel consumed per vehicle, by type of vehicle, used by 
     the propulsion engine to provide the power to operate the 
     equipment attached to the highway vehicle, and
       (B) the Secretary of the Treasury shall review the 
     technical and administrative feasibility of exempting such 
     nonpropulsive use of highway fuels for the highway motor 
     fuels excise taxes,
       (2) in the case where non-transportation equipment is run 
     by a separate motor--
       (A) the Secretary of the Treasury shall determine the 
     annual average amount of fuel exempted from tax in the use of 
     such equipment by equipment type, and
       (B) the Secretary of the Treasury shall review issues of 
     administration and compliance related to the present-law 
     exemption provided for such fuel use, and
       (3) the Secretary of the Treasury shall--
       (A) estimate the amount of taxable fuel consumed by trucks 
     and the emissions of various pollutants due to the long-term 
     idling of diesel engines, and
       (B) determine the cost of reducing such long-term idling 
     through the use of plug-ins at truck stops, auxiliary power 
     units, or other technologies.
       (b) Report.--Not later than January 1, 2006, the Secretary 
     of the Treasury shall report the findings of the study 
     required under subsection (a) to the Committee on Finance of 
     the Senate and the Committee on Ways and Means of the House 
     of Representatives.

     SEC. 5506. DELTA REGIONAL TRANSPORTATION PLAN.

       (a) Study.--The Delta Regional Authority shall conduct a 
     study of the transportation assets and needs in the States of 
     Alabama, Arkansas, Illinois, Kentucky, Louisiana, 
     Mississippi, Missouri, and Tennessee which comprise the Delta 
     region.
       (b) Regional Strategic Transportation Plan.--Upon 
     completion of the study required under subsection (a), the 
     Delta Regional Authority shall establish a regional strategic 
     transportation plan to achieve efficient transportation 
     systems in the Delta region. In developing the regional 
     strategic transportation plan, the Delta Regional Authority 
     shall consult with local planning and development districts, 
     local and regional governments, metropolitan planning 
     organizations, State transportation entities, and Federal 
     transportation agencies.
       (c) Elements of Study and Plan.--The study and plan under 
     this section shall include the following transportation modes 
     and systems: transit, rail, highway, interstate, bridges, 
     air, airports, waterways and ports.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Delta Regional Authority $1,000,000 
     to carry out the purposes of this section, to remain 
     available until expended.

     SEC. 5507. TREATMENT OF EMPLOYER-PROVIDED TRANSIT AND VAN 
                   POOLING BENEFITS.

       (a) In General.--Subparagraph (A) of section 132(f)(2) 
     (relating to limitation on exclusion) is amended by striking 
     ``$100'' and inserting ``$120''.
       (b) Inflation Adjustment Conforming Amendments.--The last 
     sentence of section 132(f)(6)(A) (relating to inflation 
     adjustment) is amended--
       (1) by striking ``2002'' and inserting ``2005'', and
       (2) by striking ``2001'' and inserting ``2004''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 5508. STUDY OF INCENTIVES FOR PRODUCTION OF BIODIESEL.

       (a) Study.--The General Comptroller of the United States 
     shall conduct a study related to biodiesel fuels and the tax 
     credit for biodiesel fuels established under this Act. Such 
     study shall include--
       (1) an assessment on whether such credit provides 
     sufficient assistance to the producers of biodiesel fuel to 
     establish the fuel as a viable energy alternative in the 
     current market place,
       (2) an assessment on how long such credit or similar 
     subsidy would have to remain in effect before biodiesel fuel 
     can compete in the market place without such assistance,
       (3) a cost-benefit analysis of such credit, comparing the 
     cost of the credit in forgone revenue to the benefits of 
     lower fuel costs for consumers, increased profitability for 
     the biodiesel industry, increased farm income, reduced 
     program outlays from the Department of Agriculture, and the 
     improved environmental conditions through the use of 
     biodiesel fuel, and
       (4) an assessment on whether such credit results in any 
     unintended consequences for unrelated industries, including 
     the impact, if any, on the glycerin market.
       (b) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall report the findings of the study required under 
     subsection (a) to the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives.

                      Subtitle G--Revenue Offsets

     PART I--LIMITATION ON EXPENSING CERTAIN PASSENGER AUTOMOBILES

     SEC. 5601. EXPANSION OF LIMITATION ON DEPRECIATION OF CERTAIN 
                   PASSENGER AUTOMOBILES.

       (a) In General.--Section 179(b) (relating to limitations) 
     is amended by adding at the end the following new paragraph:
       ``(6) Limitation on cost taken into account for certain 
     passenger vehicles.--
       ``(A) In general.--The cost of any sport utility vehicle 
     for any taxable year which may be taken into account under 
     this section shall not exceed $25,000.
       ``(B) Sport utility vehicle.--For purposes of subparagraph 
     (A)--
       ``(i) In general.--The term `sport utility vehicle' means 
     any 4-wheeled vehicle which--

       ``(I) is manufactured primarily for use on public streets, 
     roads, and highways,
       ``(II) is not subject to section 280F, and
       ``(III) is rated at not more than 14,000 pounds gross 
     vehicle weight.

       ``(ii) Certain vehicles excluded.--Such term does not 
     include any vehicle which--

       ``(I) does not have the primary load carrying device or 
     container attached,
       ``(II) has a seating capacity of more than 12 individuals,
       ``(III) is designed for more than 9 individuals in seating 
     rearward of the driver's seat,
       ``(IV) is equipped with an open cargo area, or a covered 
     box not readily accessible from the passenger compartment, of 
     at least 72.0 inches in interior length, or
       ``(V) has an integral enclosure, fully enclosing the driver 
     compartment and load carrying device, does not have seating 
     rearward of the driver's seat, and has no body section 
     protruding more than 30 inches ahead of the leading edge of 
     the windshield.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after February 2, 
     2004.

          PART II--PROVISIONS DESIGNED TO CURTAIL TAX SHELTERS

     SEC. 5611. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

       (a) In General.--Section 7701 is amended by redesignating 
     subsection (n) as subsection (o) and by inserting after 
     subsection (m) the following new subsection:
       ``(n) Clarification of Economic Substance Doctrine; Etc.--
       ``(1) General rules.--
       ``(A) In general.--In any case in which a court determines 
     that the economic substance doctrine is relevant for purposes 
     of this title to a transaction (or series of transactions), 
     such transaction (or series of transactions) shall have 
     economic substance only if the requirements of this paragraph 
     are met.
       ``(B) Definition of economic substance.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--A transaction has economic substance 
     only if--

       ``(I) the transaction changes in a meaningful way (apart 
     from Federal tax effects) the taxpayer's economic position, 
     and
       ``(II) the taxpayer has a substantial nontax purpose for 
     entering into such transaction and the transaction is a 
     reasonable means of accomplishing such purpose.

     In applying subclause (II), a purpose of achieving a 
     financial accounting benefit shall not be taken into account 
     in determining whether a transaction has a substantial nontax 
     purpose if the origin of such financial accounting benefit is 
     a reduction of income tax.
       ``(ii) Special rule where taxpayer relies on profit 
     potential.--A transaction shall not be treated as having 
     economic substance by reason of having a potential for profit 
     unless--

       ``(I) the present value of the reasonably expected pre-tax 
     profit from the transaction is substantial in relation to the 
     present value of the expected net tax benefits that would be 
     allowed if the transaction were respected, and
       ``(II) the reasonably expected pre-tax profit from the 
     transaction exceeds a risk-free rate of return.

       ``(C) Treatment of fees and foreign taxes.--Fees and other 
     transaction expenses and foreign taxes shall be taken into 
     account as expenses in determining pre-tax profit under 
     subparagraph (B)(ii).
       ``(2) Special rules for transactions with tax-indifferent 
     parties.--
       ``(A) Special rules for financing transactions.--The form 
     of a transaction which is in substance the borrowing of money 
     or the acquisition of financial capital directly or 
     indirectly from a tax-indifferent party shall not be 
     respected if the present value of the deductions to

[[Page 10954]]

     be claimed with respect to the transaction is substantially 
     in excess of the present value of the anticipated economic 
     returns of the person lending the money or providing the 
     financial capital. A public offering shall be treated as a 
     borrowing, or an acquisition of financial capital, from a 
     tax-indifferent party if it is reasonably expected that at 
     least 50 percent of the offering will be placed with tax-
     indifferent parties.
       ``(B) Artificial income shifting and basis adjustments.--
     The form of a transaction with a tax-indifferent party shall 
     not be respected if--
       ``(i) it results in an allocation of income or gain to the 
     tax-indifferent party in excess of such party's economic 
     income or gain, or
       ``(ii) it results in a basis adjustment or shifting of 
     basis on account of overstating the income or gain of the 
     tax-indifferent party.
       ``(3) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Economic substance doctrine.--The term `economic 
     substance doctrine' means the common law doctrine under which 
     tax benefits under subtitle A with respect to a transaction 
     are not allowable if the transaction does not have economic 
     substance or lacks a business purpose.
       ``(B) Tax-indifferent party.--The term `tax-indifferent 
     party' means any person or entity not subject to tax imposed 
     by subtitle A. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if the items taken into 
     account with respect to the transaction have no substantial 
     impact on such person's liability under subtitle A.
       ``(C) Exception for personal transactions of individuals.--
     In the case of an individual, this subsection shall apply 
     only to transactions entered into in connection with a trade 
     or business or an activity engaged in for the production of 
     income.
       ``(D) Treatment of lessors.--In applying paragraph 
     (1)(B)(ii) to the lessor of tangible property subject to a 
     lease--
       ``(i) the expected net tax benefits with respect to the 
     leased property shall not include the benefits of--

       ``(I) depreciation,
       ``(II) any tax credit, or
       ``(III) any other deduction as provided in guidance by the 
     Secretary, and

       ``(ii) subclause (II) of paragraph (1)(B)(ii) shall be 
     disregarded in determining whether any of such benefits are 
     allowable.
       ``(4) Other common law doctrines not affected.--Except as 
     specifically provided in this subsection, the provisions of 
     this subsection shall not be construed as altering or 
     supplanting any other rule of law, and the requirements of 
     this subsection shall be construed as being in addition to 
     any such other rule of law.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection. Such regulations may include 
     exemptions from the application of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after February 2, 
     2004.

     SEC. 5612. PENALTY FOR FAILING TO DISCLOSE REPORTABLE 
                   TRANSACTION.

       (a) In General.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties) is amended by inserting 
     after section 6707 the following new section:

     ``SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE REPORTABLE 
                   TRANSACTION INFORMATION WITH RETURN OR 
                   STATEMENT.

       ``(a) Imposition of Penalty.--Any person who fails to 
     include on any return or statement any information with 
     respect to a reportable transaction which is required under 
     section 6011 to be included with such return or statement 
     shall pay a penalty in the amount determined under subsection 
     (b).
       ``(b) Amount of Penalty.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the amount of the penalty under subsection (a) shall be 
     $50,000.
       ``(2) Listed transaction.--The amount of the penalty under 
     subsection (a) with respect to a listed transaction shall be 
     $100,000.
       ``(3) Increase in penalty for large entities and high net 
     worth individuals.--
       ``(A) In general.--In the case of a failure under 
     subsection (a) by--
       ``(i) a large entity, or
       ``(ii) a high net worth individual,
     the penalty under paragraph (1) or (2) shall be twice the 
     amount determined without regard to this paragraph.
       ``(B) Large entity.--For purposes of subparagraph (A), the 
     term `large entity' means, with respect to any taxable year, 
     a person (other than a natural person) with gross receipts in 
     excess of $10,000,000 for the taxable year in which the 
     reportable transaction occurs or the preceding taxable year. 
     Rules similar to the rules of paragraph (2) and subparagraphs 
     (B), (C), and (D) of paragraph (3) of section 448(c) shall 
     apply for purposes of this subparagraph.
       ``(C) High net worth individual.--For purposes of 
     subparagraph (A), the term `high net worth individual' means, 
     with respect to a reportable transaction, a natural person 
     whose net worth exceeds $2,000,000 immediately before the 
     transaction.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Reportable transaction.--The term `reportable 
     transaction' means any transaction with respect to which 
     information is required to be included with a return or 
     statement because, as determined under regulations prescribed 
     under section 6011, such transaction is of a type which the 
     Secretary determines as having a potential for tax avoidance 
     or evasion.
       ``(2) Listed transaction.--Except as provided in 
     regulations, the term `listed transaction' means a reportable 
     transaction which is the same as, or substantially similar 
     to, a transaction specifically identified by the Secretary as 
     a tax avoidance transaction for purposes of section 6011.
       ``(d) Authority To Rescind Penalty.--
       ``(1) In general.--The Commissioner of Internal Revenue may 
     rescind all or any portion of any penalty imposed by this 
     section with respect to any violation if--
       ``(A) the violation is with respect to a reportable 
     transaction other than a listed transaction,
       ``(B) the person on whom the penalty is imposed has a 
     history of complying with the requirements of this title,
       ``(C) it is shown that the violation is due to an 
     unintentional mistake of fact;
       ``(D) imposing the penalty would be against equity and good 
     conscience, and
       ``(E) rescinding the penalty would promote compliance with 
     the requirements of this title and effective tax 
     administration.
       ``(2) Discretion.--The exercise of authority under 
     paragraph (1) shall be at the sole discretion of the 
     Commissioner and may be delegated only to the head of the 
     Office of Tax Shelter Analysis. The Commissioner, in the 
     Commissioner's sole discretion, may establish a procedure to 
     determine if a penalty should be referred to the Commissioner 
     or the head of such Office for a determination under 
     paragraph (1).
       ``(3) No appeal.--Notwithstanding any other provision of 
     law, any determination under this subsection may not be 
     reviewed in any administrative or judicial proceeding.
       ``(4) Records.--If a penalty is rescinded under paragraph 
     (1), the Commissioner shall place in the file in the Office 
     of the Commissioner the opinion of the Commissioner or the 
     head of the Office of Tax Shelter Analysis with respect to 
     the determination, including--
       ``(A) the facts and circumstances of the transaction,
       ``(B) the reasons for the rescission, and
       ``(C) the amount of the penalty rescinded.
       ``(5) Report.--The Commissioner shall each year report to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate--
       ``(A) a summary of the total number and aggregate amount of 
     penalties imposed, and rescinded, under this section, and
       ``(B) a description of each penalty rescinded under this 
     subsection and the reasons therefor.
       ``(e) Penalty Reported to SEC.--In the case of a person--
       ``(1) which is required to file periodic reports under 
     section 13 or 15(d) of the Securities Exchange Act of 1934 or 
     is required to be consolidated with another person for 
     purposes of such reports, and
       ``(2) which--
       ``(A) is required to pay a penalty under this section with 
     respect to a listed transaction,
       ``(B) is required to pay a penalty under section 6662A with 
     respect to any reportable transaction at a rate prescribed 
     under section 6662A(c), or
       ``(C) is required to pay a penalty under section 6662B with 
     respect to any noneconomic substance transaction,
     the requirement to pay such penalty shall be disclosed in 
     such reports filed by such person for such periods as the 
     Secretary shall specify. Failure to make a disclosure in 
     accordance with the preceding sentence shall be treated as a 
     failure to which the penalty under subsection (b)(2) applies.
       ``(f) Coordination With Other Penalties.--The penalty 
     imposed by this section is in addition to any penalty imposed 
     under this title.''.
       (b) Conforming Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by inserting after 
     the item relating to section 6707 the following:

``Sec. 6707A. Penalty for failure to include reportable transaction 
              information with return or statement.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to returns and statements the due date for which 
     is after the date of the enactment of this Act.

     SEC. 5613. ACCURACY-RELATED PENALTY FOR LISTED TRANSACTIONS 
                   AND OTHER REPORTABLE TRANSACTIONS HAVING A 
                   SIGNIFICANT TAX AVOIDANCE PURPOSE.

       (a) In General.--Subchapter A of chapter 68 is amended by 
     inserting after section 6662 the following new section:

     ``SEC. 6662A. IMPOSITION OF ACCURACY-RELATED PENALTY ON 
                   UNDERSTATEMENTS WITH RESPECT TO REPORTABLE 
                   TRANSACTIONS.

       ``(a) Imposition of Penalty.--If a taxpayer has a 
     reportable transaction understatement for any taxable year, 
     there shall be added to the tax an amount equal to 20 percent 
     of the amount of such understatement.
       ``(b) Reportable Transaction Understatement.--For purposes 
     of this section--
       ``(1) In general.--The term `reportable transaction 
     understatement' means the sum of--
       ``(A) the product of--
       ``(i) the amount of the increase (if any) in taxable income 
     which results from a difference between the proper tax 
     treatment of an item to which this section applies and the 
     taxpayer's treatment of such item (as shown on the taxpayer's 
     return of tax), and

[[Page 10955]]

       ``(ii) the highest rate of tax imposed by section 1 
     (section 11 in the case of a taxpayer which is a 
     corporation), and
       ``(B) the amount of the decrease (if any) in the aggregate 
     amount of credits determined under subtitle A which results 
     from a difference between the taxpayer's treatment of an item 
     to which this section applies (as shown on the taxpayer's 
     return of tax) and the proper tax treatment of such item.
     For purposes of subparagraph (A), any reduction of the excess 
     of deductions allowed for the taxable year over gross income 
     for such year, and any reduction in the amount of capital 
     losses which would (without regard to section 1211) be 
     allowed for such year, shall be treated as an increase in 
     taxable income.
       ``(2) Items to which section applies.--This section shall 
     apply to any item which is attributable to--
       ``(A) any listed transaction, and
       ``(B) any reportable transaction (other than a listed 
     transaction) if a significant purpose of such transaction is 
     the avoidance or evasion of Federal income tax.
       ``(c) Higher Penalty for Nondisclosed Listed and Other 
     Avoidance Transactions.--
       ``(1) In general.--Subsection (a) shall be applied by 
     substituting `30 percent' for `20 percent' with respect to 
     the portion of any reportable transaction understatement with 
     respect to which the requirement of section 6664(d)(2)(A) is 
     not met.
       ``(2) Rules applicable to assertion and compromise of 
     penalty.--
       ``(A) In general.--Only upon the approval by the Chief 
     Counsel for the Internal Revenue Service or the Chief 
     Counsel's delegate at the national office of the Internal 
     Revenue Service may a penalty to which paragraph (1) applies 
     be included in a 1st letter of proposed deficiency which 
     allows the taxpayer an opportunity for administrative review 
     in the Internal Revenue Service Office of Appeals. If such a 
     letter is provided to the taxpayer, only the Commissioner of 
     Internal Revenue may compromise all or any portion of such 
     penalty.
       ``(B) Applicable rules.--The rules of paragraphs (2), (3), 
     (4), and (5) of section 6707A(d) shall apply for purposes of 
     subparagraph (A).
       ``(d) Definitions of Reportable and Listed Transactions.--
     For purposes of this section, the terms `reportable 
     transaction' and `listed transaction' have the respective 
     meanings given to such terms by section 6707A(c).
       ``(e) Special Rules.--
       ``(1) Coordination with penalties, etc., on other 
     understatements.--In the case of an understatement (as 
     defined in section 6662(d)(2))--
       ``(A) the amount of such understatement (determined without 
     regard to this paragraph) shall be increased by the aggregate 
     amount of reportable transaction understatements and 
     noneconomic substance transaction understatements for 
     purposes of determining whether such understatement is a 
     substantial understatement under section 6662(d)(1), and
       ``(B) the addition to tax under section 6662(a) shall apply 
     only to the excess of the amount of the substantial 
     understatement (if any) after the application of subparagraph 
     (A) over the aggregate amount of reportable transaction 
     understatements and noneconomic substance transaction 
     understatements.
       ``(2) Coordination with other penalties.--
       ``(A) Application of fraud penalty.--References to an 
     underpayment in section 6663 shall be treated as including 
     references to a reportable transaction understatement and a 
     noneconomic substance transaction understatement.
       ``(B) No double penalty.--This section shall not apply to 
     any portion of an understatement on which a penalty is 
     imposed under section 6662B or 6663.
       ``(3) Special rule for amended returns.--Except as provided 
     in regulations, in no event shall any tax treatment included 
     with an amendment or supplement to a return of tax be taken 
     into account in determining the amount of any reportable 
     transaction understatement or noneconomic substance 
     transaction understatement if the amendment or supplement is 
     filed after the earlier of the date the taxpayer is first 
     contacted by the Secretary regarding the examination of the 
     return or such other date as is specified by the Secretary.
       ``(4) Noneconomic substance transaction understatement.--
     For purposes of this subsection, the term `noneconomic 
     substance transaction understatement' has the meaning given 
     such term by section 6662B(c).
       ``(5) Cross reference.--

  ``For reporting of section 6662A(c) penalty to the Securities and 
Exchange Commission, see section 6707A(e).''.

       (b) Determination of Other Understatements.--Subparagraph 
     (A) of section 6662(d)(2) is amended by adding at the end the 
     following flush sentence:
     ``The excess under the preceding sentence shall be determined 
     without regard to items to which section 6662A applies and 
     without regard to items with respect to which a penalty is 
     imposed by section 6662B.''.
       (c) Reasonable Cause Exception.--
       (1) In general.--Section 6664 is amended by adding at the 
     end the following new subsection:
       ``(d) Reasonable Cause Exception for Reportable Transaction 
     Understatements.--
       ``(1) In general.--No penalty shall be imposed under 
     section 6662A with respect to any portion of a reportable 
     transaction understatement if it is shown that there was a 
     reasonable cause for such portion and that the taxpayer acted 
     in good faith with respect to such portion.
       ``(2) Special rules.--Paragraph (1) shall not apply to any 
     reportable transaction understatement unless--
       ``(A) the relevant facts affecting the tax treatment of the 
     item are adequately disclosed in accordance with the 
     regulations prescribed under section 6011,
       ``(B) there is or was substantial authority for such 
     treatment, and
       ``(C) the taxpayer reasonably believed that such treatment 
     was more likely than not the proper treatment.
     A taxpayer failing to adequately disclose in accordance with 
     section 6011 shall be treated as meeting the requirements of 
     subparagraph (A) if the penalty for such failure was 
     rescinded under section 6707A(d).
       ``(3) Rules relating to reasonable belief.--For purposes of 
     paragraph (2)(C)--
       ``(A) In general.--A taxpayer shall be treated as having a 
     reasonable belief with respect to the tax treatment of an 
     item only if such belief--
       ``(i) is based on the facts and law that exist at the time 
     the return of tax which includes such tax treatment is filed, 
     and
       ``(ii) relates solely to the taxpayer's chances of success 
     on the merits of such treatment and does not take into 
     account the possibility that a return will not be audited, 
     such treatment will not be raised on audit, or such treatment 
     will be resolved through settlement if it is raised.
       ``(B) Certain opinions may not be relied upon.--
       ``(i) In general.--An opinion of a tax advisor may not be 
     relied upon to establish the reasonable belief of a taxpayer 
     if--

       ``(I) the tax advisor is described in clause (ii), or
       ``(II) the opinion is described in clause (iii).

       ``(ii) Disqualified tax advisors.--A tax advisor is 
     described in this clause if the tax advisor--

       ``(I) is a material advisor (within the meaning of section 
     6111(b)(1)) who participates in the organization, management, 
     promotion, or sale of the transaction or who is related 
     (within the meaning of section 267(b) or 707(b)(1)) to any 
     person who so participates,
       ``(II) is compensated directly or indirectly by a material 
     advisor with respect to the transaction,
       ``(III) has a fee arrangement with respect to the 
     transaction which is contingent on all or part of the 
     intended tax benefits from the transaction being sustained, 
     or
       ``(IV) as determined under regulations prescribed by the 
     Secretary, has a disqualifying financial interest with 
     respect to the transaction.

       ``(iii) Disqualified opinions.--For purposes of clause (i), 
     an opinion is disqualified if the opinion--

       ``(I) is based on unreasonable factual or legal assumptions 
     (including assumptions as to future events),
       ``(II) unreasonably relies on representations, statements, 
     findings, or agreements of the taxpayer or any other person,
       ``(III) does not identify and consider all relevant facts, 
     or
       ``(IV) fails to meet any other requirement as the Secretary 
     may prescribe.''.

       (2) Conforming amendment.--The heading for subsection (c) 
     of section 6664 is amended by inserting ``for Underpayments'' 
     after ``Exception''.
       (d) Conforming Amendments.--
       (1) Subparagraph (C) of section 461(i)(3) is amended by 
     striking ``section 6662(d)(2)(C)(iii)'' and inserting 
     ``section 1274(b)(3)(C)''.
       (2) Paragraph (3) of section 1274(b) is amended--
       (A) by striking ``(as defined in section 
     6662(d)(2)(C)(iii))'' in subparagraph (B)(i), and
       (B) by adding at the end the following new subparagraph:
       ``(C) Tax shelter.--For purposes of subparagraph (B), the 
     term `tax shelter' means--
       ``(i) a partnership or other entity,
       ``(ii) any investment plan or arrangement, or
       ``(iii) any other plan or arrangement,
     if a significant purpose of such partnership, entity, plan, 
     or arrangement is the avoidance or evasion of Federal income 
     tax.''.
       (3) Section 6662(d)(2) is amended by striking subparagraphs 
     (C) and (D).
       (4) Section 6664(c)(1) is amended by striking ``this part'' 
     and inserting ``section 6662 or 6663''.
       (5) Subsection (b) of section 7525 is amended by striking 
     ``section 6662(d)(2)(C)(iii)'' and inserting ``section 
     1274(b)(3)(C)''.
       (6)(A) The heading for section 6662 is amended to read as 
     follows:

     ``SEC. 6662. IMPOSITION OF ACCURACY-RELATED PENALTY ON 
                   UNDERPAYMENTS.''.

       (B) The table of sections for part II of subchapter A of 
     chapter 68 is amended by striking the item relating to 
     section 6662 and inserting the following new items:

``Sec. 6662. Imposition of accuracy-related penalty on underpayments.
``Sec. 6662A. Imposition of accuracy-related penalty on understatements 
              with respect to reportable transactions.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 5614. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       (a) In General.--Subchapter A of chapter 68 is amended by 
     inserting after section 6662A the following new section:

     ``SEC. 6662B. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       ``(a) Imposition of Penalty.--If a taxpayer has an 
     noneconomic substance transaction understatement for any 
     taxable year, there shall be

[[Page 10956]]

     added to the tax an amount equal to 40 percent of the amount 
     of such understatement.
       ``(b) Reduction of Penalty for Disclosed Transactions.--
     Subsection (a) shall be applied by substituting `20 percent' 
     for `40 percent' with respect to the portion of any 
     noneconomic substance transaction understatement with respect 
     to which the relevant facts affecting the tax treatment of 
     the item are adequately disclosed in the return or a 
     statement attached to the return.
       ``(c) Noneconomic Substance Transaction Understatement.--
     For purposes of this section--
       ``(1) In general.--The term `noneconomic substance 
     transaction understatement' means any amount which would be 
     an understatement under section 6662A(b)(1) if section 6662A 
     were applied by taking into account items attributable to 
     noneconomic substance transactions rather than items to which 
     section 6662A would apply without regard to this paragraph.
       ``(2) Noneconomic substance transaction.--The term 
     `noneconomic substance transaction' means any transaction 
     if--
       ``(A) there is a lack of economic substance (within the 
     meaning of section 7701(n)(1)) for the transaction giving 
     rise to the claimed benefit or the transaction was not 
     respected under section 7701(n)(2), or
       ``(B) the transaction fails to meet the requirements of any 
     similar rule of law.
       ``(d) Rules Applicable To Compromise of Penalty.--
       ``(1) In general.--If the 1st letter of proposed deficiency 
     which allows the taxpayer an opportunity for administrative 
     review in the Internal Revenue Service Office of Appeals has 
     been sent with respect to a penalty to which this section 
     applies, only the Commissioner of Internal Revenue may 
     compromise all or any portion of such penalty.
       ``(2) Applicable rules.--The rules of paragraphs (2), (3), 
     (4), and (5) of section 6707A(d) shall apply for purposes of 
     paragraph (1).
       ``(e) Coordination With Other Penalties.--Except as 
     otherwise provided in this part, the penalty imposed by this 
     section shall be in addition to any other penalty imposed by 
     this title.
       ``(f) Cross References.--

  ``(1) For coordination of penalty with understatements under section 
6662 and other special rules, see section 6662A(e).
  ``(2) For reporting of penalty imposed under this section to the 
Securities and Exchange Commission, see section 6707A(e).''.

       (b) Clerical Amendment.--The table of sections for part II 
     of subchapter A of chapter 68 is amended by inserting after 
     the item relating to section 6662A the following new item:

``Sec. 6662B. Penalty for understatements attributable to transactions 
              lacking economic substance, etc.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after February 2, 
     2004.

     SEC. 5615. MODIFICATIONS OF SUBSTANTIAL UNDERSTATEMENT 
                   PENALTY FOR NONREPORTABLE TRANSACTIONS.

       (a) Substantial Understatement of Corporations.--Section 
     6662(d)(1)(B) (relating to special rule for corporations) is 
     amended to read as follows:
       ``(B) Special rule for corporations.--In the case of a 
     corporation other than an S corporation or a personal holding 
     company (as defined in section 542), there is a substantial 
     understatement of income tax for any taxable year if the 
     amount of the understatement for the taxable year exceeds the 
     lesser of--
       ``(i) 10 percent of the tax required to be shown on the 
     return for the taxable year (or, if greater, $10,000), or
       ``(ii) $10,000,000.''.
       (b) Reduction for Understatement of Taxpayer Due to 
     Position of Taxpayer or Disclosed Item.--
       (1) In general.--Section 6662(d)(2)(B)(i) (relating to 
     substantial authority) is amended to read as follows:
       ``(i) the tax treatment of any item by the taxpayer if the 
     taxpayer had reasonable belief that the tax treatment was 
     more likely than not the proper treatment, or''.
       (2) Conforming amendment.--Section 6662(d) is amended by 
     adding at the end the following new paragraph:
       ``(3) Secretarial list.--For purposes of this subsection, 
     section 6664(d)(2), and section 6694(a)(1), the Secretary may 
     prescribe a list of positions for which the Secretary 
     believes there is not substantial authority or there is no 
     reasonable belief that the tax treatment is more likely than 
     not the proper tax treatment. Such list (and any revisions 
     thereof) shall be published in the Federal Register or the 
     Internal Revenue Bulletin.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5616. TAX SHELTER EXCEPTION TO CONFIDENTIALITY 
                   PRIVILEGES RELATING TO TAXPAYER COMMUNICATIONS.

       (a) In General.--Section 7525(b) (relating to section not 
     to apply to communications regarding corporate tax shelters) 
     is amended to read as follows:
       ``(b) Section Not To Apply to Communications Regarding Tax 
     Shelters.--The privilege under subsection (a) shall not apply 
     to any written communication which is--
       ``(1) between a federally authorized tax practitioner and--
       ``(A) any person,
       ``(B) any director, officer, employee, agent, or 
     representative of the person, or
       ``(C) any other person holding a capital or profits 
     interest in the person, and
       ``(2) in connection with the promotion of the direct or 
     indirect participation of the person in any tax shelter (as 
     defined in section 1274(b)(3)(C)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to communications made on or after the date of 
     the enactment of this Act.

     SEC. 5617. DISCLOSURE OF REPORTABLE TRANSACTIONS.

       (a) In General.--Section 6111 (relating to registration of 
     tax shelters) is amended to read as follows:

     ``SEC. 6111. DISCLOSURE OF REPORTABLE TRANSACTIONS.

       ``(a) In General.--Each material advisor with respect to 
     any reportable transaction shall make a return (in such form 
     as the Secretary may prescribe) setting forth--
       ``(1) information identifying and describing the 
     transaction,
       ``(2) information describing any potential tax benefits 
     expected to result from the transaction, and
       ``(3) such other information as the Secretary may 
     prescribe.
     Such return shall be filed not later than the date specified 
     by the Secretary.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Material advisor.--
       ``(A) In general.--The term `material advisor' means any 
     person--
       ``(i) who provides any material aid, assistance, or advice 
     with respect to organizing, managing, promoting, selling, 
     implementing, or carrying out any reportable transaction, and
       ``(ii) who directly or indirectly derives gross income in 
     excess of the threshold amount for such aid, assistance, or 
     advice.
       ``(B) Threshold amount.--For purposes of subparagraph (A), 
     the threshold amount is--
       ``(i) $50,000 in the case of a reportable transaction 
     substantially all of the tax benefits from which are provided 
     to natural persons, and
       ``(ii) $250,000 in any other case.
       ``(2) Reportable transaction.--The term `reportable 
     transaction' has the meaning given to such term by section 
     6707A(c).
       ``(c) Regulations.--The Secretary may prescribe regulations 
     which provide--
       ``(1) that only 1 person shall be required to meet the 
     requirements of subsection (a) in cases in which 2 or more 
     persons would otherwise be required to meet such 
     requirements,
       ``(2) exemptions from the requirements of this section, and
       ``(3) such rules as may be necessary or appropriate to 
     carry out the purposes of this section.''.
       (b) Conforming Amendments.--
       (1) The item relating to section 6111 in the table of 
     sections for subchapter B of chapter 61 is amended to read as 
     follows:

``Sec. 6111. Disclosure of reportable transactions.''.

       (2)(A) So much of section 6112 as precedes subsection (c) 
     thereof is amended to read as follows:

     ``SEC. 6112. MATERIAL ADVISORS OF REPORTABLE TRANSACTIONS 
                   MUST KEEP LISTS OF ADVISEES.

       ``(a) In General.--Each material advisor (as defined in 
     section 6111) with respect to any reportable transaction (as 
     defined in section 6707A(c)) shall maintain, in such manner 
     as the Secretary may by regulations prescribe, a list--
       ``(1) identifying each person with respect to whom such 
     advisor acted as such a material advisor with respect to such 
     transaction, and
       ``(2) containing such other information as the Secretary 
     may by regulations require.
     This section shall apply without regard to whether a material 
     advisor is required to file a return under section 6111 with 
     respect to such transaction.''.
       (B) Section 6112 is amended by redesignating subsection (c) 
     as subsection (b).
       (C) Section 6112(b), as redesignated by subparagraph (B), 
     is amended--
       (i) by inserting ``written'' before ``request'' in 
     paragraph (1)(A), and
       (ii) by striking ``shall prescribe'' in paragraph (2) and 
     inserting ``may prescribe''.
       (D) The item relating to section 6112 in the table of 
     sections for subchapter B of chapter 61 is amended to read as 
     follows:

``Sec. 6112. Material advisors of reportable transactions must keep 
              lists of advisees.''.

       (3)(A) The heading for section 6708 is amended to read as 
     follows:

     ``SEC. 6708. FAILURE TO MAINTAIN LISTS OF ADVISEES WITH 
                   RESPECT TO REPORTABLE TRANSACTIONS.''.

       (B) The item relating to section 6708 in the table of 
     sections for part I of subchapter B of chapter 68 is amended 
     to read as follows:

``Sec. 6708. Failure to maintain lists of advisees with respect to 
              reportable transactions.''.

       (c) Required Disclosure Not Subject to Claim of 
     Confidentiality.--Subparagraph (A) of section 6112(b)(1), as 
     redesignated by subsection (b)(2)(B), is amended by adding at 
     the end the following new flush sentence:
     ``For purposes of this section, the identity of any person on 
     such list shall not be privileged.''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to transactions 
     with respect to which material aid, assistance, or advice 
     referred to in section 6111(b)(1)(A)(i) of the Internal 
     Revenue Code of 1986 (as added by this section) is provided 
     after the date of the enactment of this Act.

[[Page 10957]]

       (2) No claim of confidentiality against disclosure.--The 
     amendment made by subsection (c) shall take effect as if 
     included in the amendments made by section 142 of the Deficit 
     Reduction Act of 1984.

     SEC. 5618. MODIFICATIONS TO PENALTY FOR FAILURE TO REGISTER 
                   TAX SHELTERS.

       (a) In General.--Section 6707 (relating to failure to 
     furnish information regarding tax shelters) is amended to 
     read as follows:

     ``SEC. 6707. FAILURE TO FURNISH INFORMATION REGARDING 
                   REPORTABLE TRANSACTIONS.

       ``(a) In General.--If a person who is required to file a 
     return under section 6111(a) with respect to any reportable 
     transaction--
       ``(1) fails to file such return on or before the date 
     prescribed therefor, or
       ``(2) files false or incomplete information with the 
     Secretary with respect to such transaction,
     such person shall pay a penalty with respect to such return 
     in the amount determined under subsection (b).
       ``(b) Amount of Penalty.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     penalty imposed under subsection (a) with respect to any 
     failure shall be $50,000.
       ``(2) Listed transactions.--The penalty imposed under 
     subsection (a) with respect to any listed transaction shall 
     be an amount equal to the greater of--
       ``(A) $200,000, or
       ``(B) 50 percent of the gross income derived by such person 
     with respect to aid, assistance, or advice which is provided 
     with respect to the listed transaction before the date the 
     return including the transaction is filed under section 6111.
     Subparagraph (B) shall be applied by substituting `75 
     percent' for `50 percent' in the case of an intentional 
     failure or act described in subsection (a).
       ``(c) Certain Rules To Apply.--The provisions of section 
     6707A(d) shall apply to any penalty imposed under this 
     section.
       ``(d) Reportable and Listed Transactions.--The terms 
     `reportable transaction' and `listed transaction' have the 
     respective meanings given to such terms by section 
     6707A(c).''.
       (b) Clerical Amendment.--The item relating to section 6707 
     in the table of sections for part I of subchapter B of 
     chapter 68 is amended by striking ``tax shelters'' and 
     inserting ``reportable transactions''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to returns the due date for which is after the 
     date of the enactment of this Act.

     SEC. 5619. MODIFICATION OF PENALTY FOR FAILURE TO MAINTAIN 
                   LISTS OF INVESTORS.

       (a) In General.--Subsection (a) of section 6708 is amended 
     to read as follows:
       ``(a) Imposition of Penalty.--
       ``(1) In general.--If any person who is required to 
     maintain a list under section 6112(a) fails to make such list 
     available upon written request to the Secretary in accordance 
     with section 6112(b)(1)(A) within 20 business days after the 
     date of the Secretary's request, such person shall pay a 
     penalty of $10,000 for each day of such failure after such 
     20th day.
       ``(2) Reasonable cause exception.--No penalty shall be 
     imposed by paragraph (1) with respect to the failure on any 
     day if such failure is due to reasonable cause.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

     SEC. 5620. MODIFICATION OF ACTIONS TO ENJOIN CERTAIN CONDUCT 
                   RELATED TO TAX SHELTERS AND REPORTABLE 
                   TRANSACTIONS.

       (a) In General.--Section 7408 (relating to action to enjoin 
     promoters of abusive tax shelters, etc.) is amended by 
     redesignating subsection (c) as subsection (d) and by 
     striking subsections (a) and (b) and inserting the following 
     new subsections:
       ``(a) Authority To Seek Injunction.--A civil action in the 
     name of the United States to enjoin any person from further 
     engaging in specified conduct may be commenced at the request 
     of the Secretary. Any action under this section shall be 
     brought in the district court of the United States for the 
     district in which such person resides, has his principal 
     place of business, or has engaged in specified conduct. The 
     court may exercise its jurisdiction over such action (as 
     provided in section 7402(a)) separate and apart from any 
     other action brought by the United States against such 
     person.
       ``(b) Adjudication and Decree.--In any action under 
     subsection (a), if the court finds--
       ``(1) that the person has engaged in any specified conduct, 
     and
       ``(2) that injunctive relief is appropriate to prevent 
     recurrence of such conduct,
     the court may enjoin such person from engaging in such 
     conduct or in any other activity subject to penalty under 
     this title.
       ``(c) Specified Conduct.--For purposes of this section, the 
     term `specified conduct' means any action, or failure to take 
     action, subject to penalty under section 6700, 6701, 6707, or 
     6708.''.
       (b) Conforming Amendments.--
       (1) The heading for section 7408 is amended to read as 
     follows:

     ``SEC. 7408. ACTIONS TO ENJOIN SPECIFIED CONDUCT RELATED TO 
                   TAX SHELTERS AND REPORTABLE TRANSACTIONS.''.

       (2) The table of sections for subchapter A of chapter 67 is 
     amended by striking the item relating to section 7408 and 
     inserting the following new item:

``Sec. 7408. Actions to enjoin specified conduct related to tax 
              shelters and reportable transactions.''.

       (c) Effective Date.--The amendment made by this section 
     shall take effect on the day after the date of the enactment 
     of this Act.

     SEC. 5621. UNDERSTATEMENT OF TAXPAYER'S LIABILITY BY INCOME 
                   TAX RETURN PREPARER.

       (a) Standards Conformed to Taxpayer Standards.--Section 
     6694(a) (relating to understatements due to unrealistic 
     positions) is amended--
       (1) by striking ``realistic possibility of being sustained 
     on its merits'' in paragraph (1) and inserting ``reasonable 
     belief that the tax treatment in such position was more 
     likely than not the proper treatment'',
       (2) by striking ``or was frivolous'' in paragraph (3) and 
     inserting ``or there was no reasonable basis for the tax 
     treatment of such position'', and
       (3) by striking ``Unrealistic'' in the heading and 
     inserting ``Improper''.
       (b) Amount of Penalty.--Section 6694 is amended--
       (1) by striking ``$250'' in subsection (a) and inserting 
     ``$1,000'', and
       (2) by striking ``$1,000'' in subsection (b) and inserting 
     ``$5,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to documents prepared after the date of the 
     enactment of this Act.

     SEC. 5622. PENALTY ON FAILURE TO REPORT INTERESTS IN FOREIGN 
                   FINANCIAL ACCOUNTS.

       (a) In General.--Section 5321(a)(5) of title 31, United 
     States Code, is amended to read as follows:
       ``(5) Foreign financial agency transaction violation.--
       ``(A) Penalty authorized.--The Secretary of the Treasury 
     may impose a civil money penalty on any person who violates, 
     or causes any violation of, any provision of section 5314.
       ``(B) Amount of penalty.--
       ``(i) In general.--Except as provided in subparagraph (C), 
     the amount of any civil penalty imposed under subparagraph 
     (A) shall not exceed $5,000.
       ``(ii) Reasonable cause exception.--No penalty shall be 
     imposed under subparagraph (A) with respect to any violation 
     if--

       ``(I) such violation was due to reasonable cause, and
       ``(II) the amount of the transaction or the balance in the 
     account at the time of the transaction was properly reported.

       ``(C) Willful violations.--In the case of any person 
     willfully violating, or willfully causing any violation of, 
     any provision of section 5314--
       ``(i) the maximum penalty under subparagraph (B)(i) shall 
     be increased to the greater of--

       ``(I) $25,000, or
       ``(II) the amount (not exceeding $100,000) determined under 
     subparagraph (D), and

       ``(ii) subparagraph (B)(ii) shall not apply.
       ``(D) Amount.--The amount determined under this 
     subparagraph is--
       ``(i) in the case of a violation involving a transaction, 
     the amount of the transaction, or
       ``(ii) in the case of a violation involving a failure to 
     report the existence of an account or any identifying 
     information required to be provided with respect to an 
     account, the balance in the account at the time of the 
     violation.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to violations occurring after the date of the 
     enactment of this Act.

     SEC. 5623. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

[[Page 10958]]

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 5624. REGULATION OF INDIVIDUALS PRACTICING BEFORE THE 
                   DEPARTMENT OF TREASURY.

       (a) Censure; Imposition of Penalty.--
       (1) In general.--Section 330(b) of title 31, United States 
     Code, is amended--
       (A) by inserting ``, or censure,'' after ``Department'', 
     and
       (B) by adding at the end the following new flush sentence:

     ``The Secretary may impose a monetary penalty on any 
     representative described in the preceding sentence. If the 
     representative was acting on behalf of an employer or any 
     firm or other entity in connection with the conduct giving 
     rise to such penalty, the Secretary may impose a monetary 
     penalty on such employer, firm, or entity if it knew, or 
     reasonably should have known, of such conduct. Such penalty 
     shall not exceed the gross income derived (or to be derived) 
     from the conduct giving rise to the penalty and may be in 
     addition to, or in lieu of, any suspension, disbarment, or 
     censure of the representative.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to actions taken after the date of the enactment 
     of this Act.
       (b) Tax Shelter Opinions, Etc.--Section 330 of such title 
     31 is amended by adding at the end the following new 
     subsection:
       ``(d) Nothing in this section or in any other provision of 
     law shall be construed to limit the authority of the 
     Secretary of the Treasury to impose standards applicable to 
     the rendering of written advice with respect to any entity, 
     transaction plan or arrangement, or other plan or 
     arrangement, which is of a type which the Secretary 
     determines as having a potential for tax avoidance or 
     evasion.''.

     SEC. 5625. PENALTY ON PROMOTERS OF TAX SHELTERS.

       (a) Penalty on Promoting Abusive Tax Shelters.--Section 
     6700(a) is amended by adding at the end the following new 
     sentence: ``Notwithstanding the first sentence, if an 
     activity with respect to which a penalty imposed under this 
     subsection involves a statement described in paragraph 
     (2)(A), the amount of the penalty shall be equal to 50 
     percent of the gross income derived (or to be derived) from 
     such activity by the person on which the penalty is 
     imposed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to activities after the date of the enactment of 
     this Act.

     SEC. 5626. STATUTE OF LIMITATIONS FOR TAXABLE YEARS FOR WHICH 
                   REQUIRED LISTED TRANSACTIONS NOT REPORTED.

       (a) In General.--Section 6501(c) (relating to exceptions) 
     is amended by adding at the end the following new paragraph:
       ``(10) Listed transactions.--If a taxpayer fails to include 
     on any return or statement for any taxable year any 
     information with respect to a listed transaction (as defined 
     in section 6707A(c)(2)) which is required under section 6011 
     to be included with such return or statement, the time for 
     assessment of any tax imposed by this title with respect to 
     such transaction shall not expire before the date which is 1 
     year after the earlier of--
       ``(A) the date on which the Secretary is furnished the 
     information so required; or
       ``(B) the date that a material advisor (as defined in 
     section 6111) meets the requirements of section 6112 with 
     respect to a request by the Secretary under section 6112(b) 
     relating to such transaction with respect to such 
     taxpayer.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years with respect to which the period 
     for assessing a deficiency did not expire before the date of 
     the enactment of this Act.

     SEC. 5627. DENIAL OF DEDUCTION FOR INTEREST ON UNDERPAYMENTS 
                   ATTRIBUTABLE TO NONDISCLOSED REPORTABLE AND 
                   NONECONOMIC SUBSTANCE TRANSACTIONS.

       (a) In General.--Section 163 (relating to deduction for 
     interest) is amended by redesignating subsection (m) as 
     subsection (n) and by inserting after subsection (l) the 
     following new subsection:
       ``(m) Interest on Unpaid Taxes Attributable To Nondisclosed 
     Reportable Transactions and Noneconomic Substance 
     Transactions.--No deduction shall be allowed under this 
     chapter for any interest paid or accrued under section 6601 
     on any underpayment of tax which is attributable to--
       ``(1) the portion of any reportable transaction 
     understatement (as defined in section 6662A(b)) with respect 
     to which the requirement of section 6664(d)(2)(A) is not met, 
     or
       ``(2) any noneconomic substance transaction understatement 
     (as defined in section 6662B(c)).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 5628. AUTHORIZATION OF APPROPRIATIONS FOR TAX LAW 
                   ENFORCEMENT.

       There is authorized to be appropriated $300,000,000 for 
     each fiscal year beginning after September 30, 2003, for the 
     purpose of carrying out tax law enforcement to combat tax 
     avoidance transactions and other tax shelters, including the 
     use of offshore financial accounts to conceal taxable income.

            PART III--OTHER CORPORATE GOVERNANCE PROVISIONS

     SEC. 5631. AFFIRMATION OF CONSOLIDATED RETURN REGULATION 
                   AUTHORITY.

       (a) In General.--Section 1502 (relating to consolidated 
     return regulations) is amended by adding at the end the 
     following new sentence: ``In prescribing such regulations, 
     the Secretary may prescribe rules applicable to corporations 
     filing consolidated returns under section 1501 that are 
     different from other provisions of this title that would 
     apply if such corporations filed separate returns.''.
       (b) Result Not Overturned.--Notwithstanding subsection (a), 
     the Internal Revenue Code of 1986 shall be construed by 
     treating Treasury regulation Sec. 1.1502-20(c)(1)(iii) (as in 
     effect on January 1, 2001) as being inapplicable to the type 
     of factual situation in 255 F.3d 1357 (Fed. Cir. 2001).
       (c) Effective Date.--The provisions of this section shall 
     apply to taxable years beginning before, on, or after the 
     date of the enactment of this Act.

     SEC. 5632. DECLARATION BY CHIEF EXECUTIVE OFFICER RELATING TO 
                   FEDERAL ANNUAL CORPORATE INCOME TAX RETURN.

       (a) In General.--The Federal tax return of a corporation 
     with respect to income shall also include a declaration 
     signed by the chief executive officer of such corporation (or 
     other such officer of the corporation as the Secretary of the 
     Treasury may designate if the corporation does not have a 
     chief executive officer), under penalties

[[Page 10959]]

     of perjury, that the chief executive officer has established 
     processes and procedures that ensure that such return 
     complies with the Internal Revenue Code of 1986 and that the 
     chief executive officer was provided reasonable assurance of 
     the accuracy of all material aspects of such return. The 
     preceding sentence shall not apply to any return of a 
     regulated investment company (within the meaning of section 
     851 of such Code).
       (b) Effective Date.--This section shall apply to Federal 
     tax returns filed after the date of the enactment of this 
     Act.

     SEC. 5633. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution.--
     Paragraph (1) shall not apply to any amount which the 
     taxpayer establishes constitutes restitution for damage or 
     harm caused by the violation of any law or the potential 
     violation of any law. This paragraph shall not apply to any 
     amount paid or incurred as reimbursement to the government or 
     entity for the costs of any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after April 27, 2003, 
     except that such amendment shall not apply to amounts paid or 
     incurred under any binding order or agreement entered into on 
     or before April 27, 2003. Such exception shall not apply to 
     an order or agreement requiring court approval unless the 
     approval was obtained on or before April 27, 2003.

     SEC. 5634. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended by adding at 
     the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (2) Conforming amendments.--
       (A) Section 162(g) is amended--
       (i) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (ii) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively.
       (B) The heading for section 162(g) is amended by inserting 
     ``or Punitive Damages'' after ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(f) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 5635. INCREASE IN CRIMINAL MONETARY PENALTY LIMITATION 
                   FOR THE UNDERPAYMENT OR OVERPAYMENT OF TAX DUE 
                   TO FRAUD.

       (a) In General.--Section 7206 (relating to fraud and false 
     statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due To Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 is 
     amended--
       (A) by striking ``$100,000'' and inserting ``$250,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 is amended--
       (A) in the first sentence--
       (i) by striking ``misdemeanor'' and inserting ``felony'', 
     and
       (ii) by striking ``1 year'' and inserting ``10 years'', and
       (B) by striking the third sentence.
       (3) Fraud and false statements.--Section 7206(a) (as 
     redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$250,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to underpayments and overpayments attributable to 
     actions occurring after the date of the enactment of this 
     Act.

     SEC. 5636. DOUBLING OF CERTAIN PENALTIES, FINES, AND INTEREST 
                   ON UNDERPAYMENTS RELATED TO CERTAIN OFFSHORE 
                   FINANCIAL ARRANGEMENTS.

       (a) General Rule.--If--
       (1) a taxpayer eligible to participate in--
       (A) the Department of the Treasury's Offshore Voluntary 
     Compliance Initiative, or
       (B) the Department of the Treasury's voluntary disclosure 
     initiative which applies to the taxpayer by reason of the 
     taxpayer's underreporting of United States income tax 
     liability through financial arrangements which rely on the 
     use of offshore arrangements which were the subject of the 
     initiative described in subparagraph (A), and
       (2) any interest or applicable penalty is imposed with 
     respect to any arrangement to which any initiative described 
     in paragraph (1) applied or to any underpayment of Federal 
     income tax attributable to items arising in connection with 
     any arrangement described in paragraph (1),
     then, notwithstanding any other provision of law, the amount 
     of such interest or penalty shall be equal to twice that 
     determined without regard to this section.
       (b) Definitions and Rules.--For purposes of this section--
       (1) Applicable penalty.--The term ``applicable penalty'' 
     means any penalty, addition to tax, or fine imposed under 
     chapter 68 of the Internal Revenue Code of 1986.
       (2) Voluntary offshore compliance initiative.--The term 
     ``Voluntary Offshore Compliance Initiative'' means the 
     program established by the Department of the Treasury in 
     January of 2003 under which any taxpayer was eligible to 
     voluntarily disclose previously undisclosed income on assets 
     placed in offshore accounts and accessed through credit card 
     and other financial arrangements.
       (3) Participation.--A taxpayer shall be treated as having 
     participated in the Voluntary Offshore Compliance Initiative 
     if the taxpayer submitted the request in a timely manner and 
     all information requested by the Secretary of the Treasury or 
     his delegate within a reasonable period of time following the 
     request.
       (c) Effective Date.--The provisions of this section shall 
     apply to interest, penalties, additions to tax, and fines 
     with respect to any taxable year if as of the date of the 
     enactment of this Act, the assessment of any tax, penalty, or 
     interest with respect to such taxable year is not prevented 
     by the operation of any law or rule of law.

             PART IV--ENRON-RELATED TAX SHELTER PROVISIONS

     SEC. 5641. LIMITATION ON TRANSFER OR IMPORTATION OF BUILT-IN 
                   LOSSES.

       (a) In General.--Section 362 (relating to basis to 
     corporations) is amended by adding at the end the following 
     new subsection:
       ``(e) Limitations on Built-In Losses.--
       ``(1) Limitation on importation of built-in losses.--
       ``(A) In general.--If in any transaction described in 
     subsection (a) or (b) there would (but for this subsection) 
     be an importation of a net built-in loss, the basis of each 
     property described in subparagraph (B) which is acquired in 
     such transaction shall (notwithstanding subsections (a) and 
     (b)) be its fair market value immediately after such 
     transaction.
       ``(B) Property described.--For purposes of subparagraph 
     (A), property is described in this subparagraph if--

[[Page 10960]]

       ``(i) gain or loss with respect to such property is not 
     subject to tax under this subtitle in the hands of the 
     transferor immediately before the transfer, and
       ``(ii) gain or loss with respect to such property is 
     subject to such tax in the hands of the transferee 
     immediately after such transfer.

     In any case in which the transferor is a partnership, the 
     preceding sentence shall be applied by treating each partner 
     in such partnership as holding such partner's proportionate 
     share of the property of such partnership.
       ``(C) Importation of net built-in loss.--For purposes of 
     subparagraph (A), there is an importation of a net built-in 
     loss in a transaction if the transferee's aggregate adjusted 
     bases of property described in subparagraph (B) which is 
     transferred in such transaction would (but for this 
     paragraph) exceed the fair market value of such property 
     immediately after such transaction.''.
       ``(2) Limitation on transfer of built-in losses in section 
     351 transactions.--
       ``(A) In general.--If--
       ``(i) property is transferred by a transferor in any 
     transaction which is described in subsection (a) and which is 
     not described in paragraph (1) of this subsection, and
       ``(ii) the transferee's aggregate adjusted bases of such 
     property so transferred would (but for this paragraph) exceed 
     the fair market value of such property immediately after such 
     transaction,

     then, notwithstanding subsection (a), the transferee's 
     aggregate adjusted bases of the property so transferred shall 
     not exceed the fair market value of such property immediately 
     after such transaction.
       ``(B) Allocation of basis reduction.--The aggregate 
     reduction in basis by reason of subparagraph (A) shall be 
     allocated among the property so transferred in proportion to 
     their respective built-in losses immediately before the 
     transaction.
       ``(C) Exception for transfers within affiliated group.--
     Subparagraph (A) shall not apply to any transaction if the 
     transferor owns stock in the transferee meeting the 
     requirements of section 1504(a)(2). In the case of property 
     to which subparagraph (A) does not apply by reason of the 
     preceding sentence, the transferor's basis in the stock 
     received for such property shall not exceed its fair market 
     value immediately after the transfer.''.
       (b) Comparable Treatment Where Liquidation.--Paragraph (1) 
     of section 334(b) (relating to liquidation of subsidiary) is 
     amended to read as follows:
       ``(1) In general.--If property is received by a corporate 
     distributee in a distribution in a complete liquidation to 
     which section 332 applies (or in a transfer described in 
     section 337(b)(1)), the basis of such property in the hands 
     of such distributee shall be the same as it would be in the 
     hands of the transferor; except that the basis of such 
     property in the hands of such distributee shall be the fair 
     market value of the property at the time of the 
     distribution--
       ``(A) in any case in which gain or loss is recognized by 
     the liquidating corporation with respect to such property, or
       ``(B) in any case in which the liquidating corporation is a 
     foreign corporation, the corporate distributee is a domestic 
     corporation, and the corporate distributee's aggregate 
     adjusted bases of property described in section 362(e)(1)(B) 
     which is distributed in such liquidation would (but for this 
     subparagraph) exceed the fair market value of such property 
     immediately after such liquidation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions after February 13, 2003.

     SEC. 5642. NO REDUCTION OF BASIS UNDER SECTION 734 IN STOCK 
                   HELD BY PARTNERSHIP IN CORPORATE PARTNER.

       (a) In General.--Section 755 is amended by adding at the 
     end the following new subsection:
       ``(c) No Allocation of Basis Decrease to Stock of Corporate 
     Partner.--In making an allocation under subsection (a) of any 
     decrease in the adjusted basis of partnership property under 
     section 734(b)--
       ``(1) no allocation may be made to stock in a corporation 
     (or any person which is related (within the meaning of 
     section 267(b) or 707(b)(1)) to such corporation) which is a 
     partner in the partnership, and
       ``(2) any amount not allocable to stock by reason of 
     paragraph (1) shall be allocated under subsection (a) to 
     other partnership property in such manner as the Secretary 
     may prescribe.
     Gain shall be recognized to the partnership to the extent 
     that the amount required to be allocated under paragraph (2) 
     to other partnership property exceeds the aggregate adjusted 
     basis of such other property immediately before the 
     allocation required by paragraph (2).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions after February 13, 2003.

     SEC. 5643. REPEAL OF SPECIAL RULES FOR FASITS.

       (a) In General.--Part V of subchapter M of chapter 1 
     (relating to financial asset securitization investment 
     trusts) is hereby repealed.
       (b) Conforming Amendments.--
       (1) Paragraph (6) of section 56(g) is amended by striking 
     ``REMIC, or FASIT'' and inserting ``or REMIC''.
       (2) Clause (ii) of section 382(l)(4)(B) is amended by 
     striking ``a REMIC to which part IV of subchapter M applies, 
     or a FASIT to which part V of subchapter M applies,'' and 
     inserting ``or a REMIC to which part IV of subchapter M 
     applies,''.
       (3) Paragraph (1) of section 582(c) is amended by striking 
     ``, and any regular interest in a FASIT,''.
       (4) Subparagraph (E) of section 856(c)(5) is amended by 
     striking the last sentence.
       (5)(A) Section 860G(a)(1) is amended by adding at the end 
     the following new sentence: ``An interest shall not fail to 
     qualify as a regular interest solely because the specified 
     principal amount of the regular interest (or the amount of 
     interest accrued on the regular interest) can be reduced as a 
     result of the nonoccurrence of 1 or more contingent payments 
     with respect to any reverse mortgage loan held by the REMIC 
     if, on the startup day for the REMIC, the sponsor reasonably 
     believes that all principal and interest due under the 
     regular interest will be paid at or prior to the liquidation 
     of the REMIC.''.
       (B) The last sentence of section 860G(a)(3) is amended by 
     inserting ``, and any reverse mortgage loan (and each balance 
     increase on such loan meeting the requirements of 
     subparagraph (A)(iii)) shall be treated as an obligation 
     secured by an interest in real property'' before the period 
     at the end.
       (6) Paragraph (3) of section 860G(a) is amended by adding 
     ``and'' at the end of subparagraph (B), by striking ``, and'' 
     at the end of subparagraph (C) and inserting a period, and by 
     striking subparagraph (D).
       (7) Section 860G(a)(3), as amended by paragraph (6), is 
     amended by adding at the end the following new sentence: 
     ``For purposes of subparagraph (A), if more than 50 percent 
     of the obligations transferred to, or purchased by, the REMIC 
     are originated by the United States or any State (or any 
     political subdivision, agency, or instrumentality of the 
     United States or any State) and are principally secured by an 
     interest in real property, then each obligation transferred 
     to, or purchased by, the REMIC shall be treated as secured by 
     an interest in real property.''.
       (8)(A) Section 860G(a)(3)(A) is amended by striking ``or'' 
     at the end of clause (i), by inserting ``or'' at the end of 
     clause (ii), and by inserting after clause (ii) the following 
     new clause:
       ``(iii) represents an increase in the principal amount 
     under the original terms of an obligation described in clause 
     (i) or (ii) if such increase--

       ``(I) is attributable to an advance made to the obligor 
     pursuant to the original terms of the obligation,
       ``(II) occurs after the startup day, and
       ``(III) is purchased by the REMIC pursuant to a fixed price 
     contract in effect on the startup day.''.

       (B) Section 860G(a)(7)(B) is amended to read as follows:
       ``(B) Qualified reserve fund.--For purposes of subparagraph 
     (A), the term `qualified reserve fund' means any reasonably 
     required reserve to--
       ``(i) provide for full payment of expenses of the REMIC or 
     amounts due on regular interests in the event of defaults on 
     qualified mortgages or lower than expected returns on cash 
     flow investments, or
       ``(ii) provide a source of funds for the purchase of 
     obligations described in clause (ii) or (iii) of paragraph 
     (3)(A).

     The aggregate fair market value of the assets held in any 
     such reserve shall not exceed 50 percent of the aggregate 
     fair market value of all of the assets of the REMIC on the 
     startup day, and the amount of any such reserve shall be 
     promptly and appropriately reduced to the extent the amount 
     held in such reserve is no longer reasonably required for 
     purposes specified in clause (i) or (ii) of paragraph 
     (3)(A).''.
       (9) Subparagraph (C) of section 1202(e)(4) is amended by 
     striking ``REMIC, or FASIT'' and inserting ``or REMIC''.
       (10) Clause (xi) of section 7701(a)(19)(C) is amended--
       (A) by striking ``and any regular interest in a FASIT,'', 
     and
       (B) by striking ``or FASIT'' each place it appears.
       (11) The table of parts for subchapter M of chapter 1 is 
     amended by striking the item relating to part V.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on February 
     14, 2003.
       (2) Exception for existing fasits.--Paragraph (1) shall not 
     apply to any FASIT in existence on the date of the enactment 
     of this Act to the extent that regular interests issued by 
     the FASIT before such date continue to remain outstanding in 
     accordance with the original terms of issuance.

     SEC. 5644. EXPANDED DISALLOWANCE OF DEDUCTION FOR INTEREST ON 
                   CONVERTIBLE DEBT.

       (a) In General.--Paragraph (2) of section 163(l) is amended 
     by striking ``or a related party'' and inserting ``or equity 
     held by the issuer (or any related party) in any other 
     person''.
       (b) Capitalization Allowed With Respect to Equity of 
     Persons Other Than Issuer and Related Parties.--Section 
     163(l) is amended by redesignating paragraphs (4) and (5) as 
     paragraphs (5) and (6) and by inserting after paragraph (3) 
     the following new paragraph:
       ``(4) Capitalization allowed with respect to equity of 
     persons other than issuer and related parties.--If the 
     disqualified debt instrument of a corporation is payable in 
     equity held by the issuer (or any related party) in any other 
     person (other than a related party), the basis of such equity 
     shall be increased by the

[[Page 10961]]

     amount not allowed as a deduction by reason of paragraph (1) 
     with respect to the instrument.''.
       (c) Exception for Certain Instruments Issued By Dealers In 
     Securities.--Section 163(l), as amended by subsection (b), is 
     amended by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7) and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Exception for certain instruments issued by dealers 
     in securities.--For purposes of this subsection, the term 
     `disqualified debt instrument' does not include indebtedness 
     issued by a dealer in securities (or a related party) which 
     is payable in, or by reference to, equity (other than equity 
     of the issuer or a related party) held by such dealer in its 
     capacity as a dealer in securities. For purposes of this 
     paragraph, the term `dealer in securities' has the meaning 
     given such term by section 475.''.
       (c) Conforming Amendments.--Paragraph (3) of section 163(l) 
     is amended--
       (1) by striking ``or a related party'' in the material 
     preceding subparagraph (A) and inserting ``or any other 
     person'', and
       (2) by striking ``or interest'' each place it appears.
       (d) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued after February 13, 
     2003.

     SEC. 5645. EXPANDED AUTHORITY TO DISALLOW TAX BENEFITS UNDER 
                   SECTION 269.

       (a) In General.--Subsection (a) of section 269 (relating to 
     acquisitions made to evade or avoid income tax) is amended to 
     read as follows:
       ``(a) In General.--If--
       ``(1)(A) any person or persons acquire, directly or 
     indirectly, control of a corporation, or
       ``(B) any corporation acquires, directly or indirectly, 
     property of another corporation and the basis of such 
     property, in the hands of the acquiring corporation, is 
     determined by reference to the basis in the hands of the 
     transferor corporation, and
       ``(2) the principal purpose for which such acquisition was 
     made is evasion or avoidance of Federal income tax,

     then the Secretary may disallow such deduction, credit, or 
     other allowance. For purposes of paragraph (1)(A), control 
     means the ownership of stock possessing at least 50 percent 
     of the total combined voting power of all classes of stock 
     entitled to vote or at least 50 percent of the total value of 
     all shares of all classes of stock of the corporation.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to stock and property acquired after February 13, 
     2003.

     SEC. 5646. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND 
                   PASSIVE FOREIGN INVESTMENT COMPANY RULES.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) (relating to passive foreign 
     investment company) is amended by adding at the end the 
     following flush sentence:

     ``Such term shall not include any period if the earning of 
     subpart F income by such corporation during such period would 
     result in only a remote likelihood of an inclusion in gross 
     income under section 951(a)(1)(A)(i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after February 13, 2003, and to 
     taxable years of United States shareholders with or within 
     which such taxable years of controlled foreign corporations 
     end.

             PART V--PROVISIONS TO DISCOURAGE EXPATRIATION

     SEC. 5651. TAX TREATMENT OF INVERTED CORPORATE ENTITIES.

       (a) In General.--Subchapter C of chapter 80 (relating to 
     provisions affecting more than one subtitle) is amended by 
     adding at the end the following new section:

     ``SEC. 7874. RULES RELATING TO INVERTED CORPORATE ENTITIES.

       ``(a) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--If a foreign incorporated entity is 
     treated as an inverted domestic corporation, then, 
     notwithstanding section 7701(a)(4), such entity shall be 
     treated for purposes of this title as a domestic corporation.
       ``(2) Inverted domestic corporation.--For purposes of this 
     section, a foreign incorporated entity shall be treated as an 
     inverted domestic corporation if, pursuant to a plan (or a 
     series of related transactions)--
       ``(A) the entity completes after March 20, 2002, the direct 
     or indirect acquisition of substantially all of the 
     properties held directly or indirectly by a domestic 
     corporation or substantially all of the properties 
     constituting a trade or business of a domestic partnership,
       ``(B) after the acquisition at least 80 percent of the 
     stock (by vote or value) of the entity is held--
       ``(i) in the case of an acquisition with respect to a 
     domestic corporation, by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation, or
       ``(ii) in the case of an acquisition with respect to a 
     domestic partnership, by former partners of the domestic 
     partnership by reason of holding a capital or profits 
     interest in the domestic partnership, and
       ``(C) the expanded affiliated group which after the 
     acquisition includes the entity does not have substantial 
     business activities in the foreign country in which or under 
     the law of which the entity is created or organized when 
     compared to the total business activities of such expanded 
     affiliated group.

     Except as provided in regulations, an acquisition of 
     properties of a domestic corporation shall not be treated as 
     described in subparagraph (A) if none of the corporation's 
     stock was readily tradeable on an established securities 
     market at any time during the 4-year period ending on the 
     date of the acquisition.
       ``(b) Preservation of Domestic Tax Base in Certain 
     Inversion Transactions to Which Subsection (a) Does Not 
     Apply.--
       ``(1) In general.--If a foreign incorporated entity would 
     be treated as an inverted domestic corporation with respect 
     to an acquired entity if either--
       ``(A) subsection (a)(2)(A) were applied by substituting 
     `after December 31, 1996, and on or before March 20, 2002' 
     for `after March 20, 2002' and subsection (a)(2)(B) were 
     applied by substituting `more than 50 percent' for `at least 
     80 percent', or
       ``(B) subsection (a)(2)(B) were applied by substituting 
     `more than 50 percent' for `at least 80 percent',

     then the rules of subsection (c) shall apply to any inversion 
     gain of the acquired entity during the applicable period and 
     the rules of subsection (d) shall apply to any related party 
     transaction of the acquired entity during the applicable 
     period. This subsection shall not apply for any taxable year 
     if subsection (a) applies to such foreign incorporated entity 
     for such taxable year.
       ``(2) Acquired entity.--For purposes of this section--
       ``(A) In general.--The term `acquired entity' means the 
     domestic corporation or partnership substantially all of the 
     properties of which are directly or indirectly acquired in an 
     acquisition described in subsection (a)(2)(A) to which this 
     subsection applies.
       ``(B) Aggregation rules.--Any domestic person bearing a 
     relationship described in section 267(b) or 707(b) to an 
     acquired entity shall be treated as an acquired entity with 
     respect to the acquisition described in subparagraph (A).
       ``(3) Applicable period.--For purposes of this section--
       ``(A) In general.--The term `applicable period' means the 
     period--
       ``(i) beginning on the first date properties are acquired 
     as part of the acquisition described in subsection (a)(2)(A) 
     to which this subsection applies, and
       ``(ii) ending on the date which is 10 years after the last 
     date properties are acquired as part of such acquisition.
       ``(B) Special rule for inversions occurring before march 
     21, 2002.--In the case of any acquired entity to which 
     paragraph (1)(A) applies, the applicable period shall be the 
     10-year period beginning on January 1, 2003.
       ``(c) Tax on Inversion Gains May Not Be Offset.--If 
     subsection (b) applies--
       ``(1) In general.--The taxable income of an acquired entity 
     (or any expanded affiliated group which includes such entity) 
     for any taxable year which includes any portion of the 
     applicable period shall in no event be less than the 
     inversion gain of the entity for the taxable year.
       ``(2) Credits not allowed against tax on inversion gain.--
     Credits shall be allowed against the tax imposed by this 
     chapter on an acquired entity for any taxable year described 
     in paragraph (1) only to the extent such tax exceeds the 
     product of--
       ``(A) the amount of the inversion gain for the taxable 
     year, and
       ``(B) the highest rate of tax specified in section 
     11(b)(1).

     For purposes of determining the credit allowed by section 901 
     inversion gain shall be treated as from sources within the 
     United States.
       ``(3) Special rules for partnerships.--In the case of an 
     acquired entity which is a partnership--
       ``(A) the limitations of this subsection shall apply at the 
     partner rather than the partnership level,
       ``(B) the inversion gain of any partner for any taxable 
     year shall be equal to the sum of--
       ``(i) the partner's distributive share of inversion gain of 
     the partnership for such taxable year, plus
       ``(ii) income or gain required to be recognized for the 
     taxable year by the partner under section 367(a), 741, or 
     1001, or under any other provision of chapter 1, by reason of 
     the transfer during the applicable period of any partnership 
     interest of the partner in such partnership to the foreign 
     incorporated entity, and
       ``(C) the highest rate of tax specified in the rate 
     schedule applicable to the partner under chapter 1 shall be 
     substituted for the rate of tax under paragraph (2)(B).
       ``(4) Inversion gain.--For purposes of this section, the 
     term `inversion gain' means any income or gain required to be 
     recognized under section 304, 311(b), 367, 1001, or 1248, or 
     under any other provision of chapter 1, by reason of the 
     transfer during the applicable period of stock or other 
     properties by an acquired entity--
       ``(A) as part of the acquisition described in subsection 
     (a)(2)(A) to which subsection (b) applies, or
       ``(B) after such acquisition to a foreign related person.

     The Secretary may provide that income or gain from the sale 
     of inventories or other transactions in the ordinary course 
     of a trade or business shall not be treated as inversion gain 
     under subparagraph (B) to the extent the Secretary determines 
     such treatment would not be inconsistent with the purposes of 
     this section.
       ``(5) Coordination with section 172 and minimum tax.--Rules 
     similar to the rules of paragraphs (3) and (4) of section 
     860E(a) shall apply for purposes of this section.

[[Page 10962]]

       ``(6) Statute of limitations.--
       ``(A) In general.--The statutory period for the assessment 
     of any deficiency attributable to the inversion gain of any 
     taxpayer for any pre-inversion year shall not expire before 
     the expiration of 3 years from the date the Secretary is 
     notified by the taxpayer (in such manner as the Secretary may 
     prescribe) of the acquisition described in subsection 
     (a)(2)(A) to which such gain relates and such deficiency may 
     be assessed before the expiration of such 3-year period 
     notwithstanding the provisions of any other law or rule of 
     law which would otherwise prevent such assessment.
       ``(B) Pre-inversion year.--For purposes of subparagraph 
     (A), the term `pre-inversion year' means any taxable year 
     if--
       ``(i) any portion of the applicable period is included in 
     such taxable year, and
       ``(ii) such year ends before the taxable year in which the 
     acquisition described in subsection (a)(2)(A) is completed.
       ``(d) Special Rules Applicable to Acquired Entities to 
     Which Subsection (b) Applies.--
       ``(1) Increases in accuracy-related penalties.--In the case 
     of any underpayment of tax of an acquired entity to which 
     subsection (b) applies--
       ``(A) section 6662(a) shall be applied with respect to such 
     underpayment by substituting `30 percent' for `20 percent', 
     and
       ``(B) if such underpayment is attributable to one or more 
     gross valuation understatements, the increase in the rate of 
     penalty under section 6662(h) shall be to 50 percent rather 
     than 40 percent.
       ``(2) Modifications of limitation on interest deduction.--
     In the case of an acquired entity to which subsection (b) 
     applies, section 163(j) shall be applied--
       ``(A) without regard to paragraph (2)(A)(ii) thereof, and
       ``(B) by substituting `25 percent' for `50 percent' each 
     place it appears in paragraph (2)(B) thereof.
       ``(e) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Rules for application of subsection (a)(2).--In 
     applying subsection (a)(2) for purposes of subsections (a) 
     and (b), the following rules shall apply:
       ``(A) Certain stock disregarded.--There shall not be taken 
     into account in determining ownership for purposes of 
     subsection (a)(2)(B)--
       ``(i) stock held by members of the expanded affiliated 
     group which includes the foreign incorporated entity, or
       ``(ii) stock of such entity which is sold in a public 
     offering or private placement related to the acquisition 
     described in subsection (a)(2)(A).
       ``(B) Plan deemed in certain cases.--If a foreign 
     incorporated entity acquires directly or indirectly 
     substantially all of the properties of a domestic corporation 
     or partnership during the 4-year period beginning on the date 
     which is 2 years before the ownership requirements of 
     subsection (a)(2)(B) are met with respect to such domestic 
     corporation or partnership, such actions shall be treated as 
     pursuant to a plan.
       ``(C) Certain transfers disregarded.--The transfer of 
     properties or liabilities (including by contribution or 
     distribution) shall be disregarded if such transfers are part 
     of a plan a principal purpose of which is to avoid the 
     purposes of this section.
       ``(D) Special rule for related partnerships.--For purposes 
     of applying subsection (a)(2) to the acquisition of a 
     domestic partnership, except as provided in regulations, all 
     partnerships which are under common control (within the 
     meaning of section 482) shall be treated as 1 partnership.
       ``(E) Treatment of certain rights.--The Secretary shall 
     prescribe such regulations as may be necessary--
       ``(i) to treat warrants, options, contracts to acquire 
     stock, convertible debt instruments, and other similar 
     interests as stock, and
       ``(ii) to treat stock as not stock.
       ``(2) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group as defined in 
     section 1504(a) but without regard to section 1504(b)(3), 
     except that section 1504(a) shall be applied by substituting 
     `more than 50 percent' for `at least 80 percent' each place 
     it appears.
       ``(3) Foreign incorporated entity.--The term `foreign 
     incorporated entity' means any entity which is, or but for 
     subsection (a)(1) would be, treated as a foreign corporation 
     for purposes of this title.
       ``(4) Foreign related person.--The term `foreign related 
     person' means, with respect to any acquired entity, a foreign 
     person which--
       ``(A) bears a relationship to such entity described in 
     section 267(b) or 707(b), or
       ``(B) is under the same common control (within the meaning 
     of section 482) as such entity.
       ``(5) Subsequent acquisitions by unrelated domestic 
     corporations.--
       ``(A) In general.--Subject to such conditions, limitations, 
     and exceptions as the Secretary may prescribe, if, after an 
     acquisition described in subsection (a)(2)(A) to which 
     subsection (b) applies, a domestic corporation stock of which 
     is traded on an established securities market acquires 
     directly or indirectly any properties of one or more acquired 
     entities in a transaction with respect to which the 
     requirements of subparagraph (B) are met, this section shall 
     cease to apply to any such acquired entity with respect to 
     which such requirements are met.
       ``(B) Requirements.--The requirements of the subparagraph 
     are met with respect to a transaction involving any 
     acquisition described in subparagraph (A) if--
       ``(i) before such transaction the domestic corporation did 
     not have a relationship described in section 267(b) or 
     707(b), and was not under common control (within the meaning 
     of section 482), with the acquired entity, or any member of 
     an expanded affiliated group including such entity, and
       ``(ii) after such transaction, such acquired entity--

       ``(I) is a member of the same expanded affiliated group 
     which includes the domestic corporation or has such a 
     relationship or is under such common control with any member 
     of such group, and
       ``(II) is not a member of, and does not have such a 
     relationship and is not under such common control with any 
     member of, the expanded affiliated group which before such 
     acquisition included such entity.

       ``(f) Regulations.--The Secretary shall provide such 
     regulations as are necessary to carry out this section, 
     including regulations providing for such adjustments to the 
     application of this section as are necessary to prevent the 
     avoidance of the purposes of this section, including the 
     avoidance of such purposes through--
       ``(1) the use of related persons, pass-thru or other 
     noncorporate entities, or other intermediaries, or
       ``(2) transactions designed to have persons cease to be (or 
     not become) members of expanded affiliated groups or related 
     persons.''.
       (b) Information Reporting.--The Secretary of the Treasury 
     shall exercise the Secretary's authority under the Internal 
     Revenue Code of 1986 to require entities involved in 
     transactions to which section 7874 of such Code (as added by 
     subsection (a)) applies to report to the Secretary, 
     shareholders, partners, and such other persons as the 
     Secretary may prescribe such information as is necessary to 
     ensure the proper tax treatment of such transactions.
       (c) Conforming Amendment.--The table of sections for 
     subchapter C of chapter 80 is amended by adding at the end 
     the following new item:

``Sec. 7874. Rules relating to inverted corporate entities.''.
       (d) Transition Rule for Certain Regulated Investment 
     Companies and Unit Investment Trusts.--Notwithstanding 
     section 7874 of the Internal Revenue Code of 1986 (as added 
     by subsection (a)), a regulated investment company, or other 
     pooled fund or trust specified by the Secretary of the 
     Treasury, may elect to recognize gain by reason of section 
     367(a) of such Code with respect to a transaction under which 
     a foreign incorporated entity is treated as an inverted 
     domestic corporation under section 7874(a) of such Code by 
     reason of an acquisition completed after March 20, 2002, and 
     before January 1, 2004.

     SEC. 5652. IMPOSITION OF MARK-TO-MARKET TAX ON INDIVIDUALS 
                   WHO EXPATRIATE.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.
     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2004, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2003' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.

[[Page 10963]]

       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph (4), 
     unless the taxpayer corrects such failure within the time 
     specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.
       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.
       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.
     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.
     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--

[[Page 10964]]

       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in regulations, by the 
     amount of taxes imposed by subparagraph (A) on distributions 
     from the trust with respect to nonvested interests not held 
     by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.
     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument and any letter of wishes or 
     similar document, historical patterns of trust distributions, 
     and the existence of and functions performed by a trust 
     protector or any similar adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.
       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or

[[Page 10965]]

       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(48) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(19) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--
       (i) Technical amendments.--Paragraph (4) of section 6103(p) 
     of the Internal Revenue Code of 1986, as amended by section 
     202(b)(2)(B) of the Trade Act of 2002 (Public Law 107-210; 
     116 Stat. 961), is amended by striking ``or (17)'' after 
     ``any other person described in subsection (l)(16)'' each 
     place it appears and inserting ``or (18)''.
       (ii) Conforming amendments.--Section 6103(p)(4) (relating 
     to safeguards), as amended by clause (i), is amended by 
     striking ``or (18)'' after ``any other person described in 
     subsection (l)(16)'' each place it appears and inserting 
     ``(18), or (19)''.
       (3) Effective dates.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by this subsection shall apply to 
     individuals who relinquish United States citizenship on or 
     after the date of the enactment of this Act.
       (B) Technical amendments.--The amendments made by paragraph 
     (2)(B)(i) shall take effect as if included in the amendments 
     made by section 202(b)(2)(B) of the Trade Act of 2002 (Public 
     Law 107-210; 116 Stat. 961).
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(g) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after February 2, 2004.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(F) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (4)(A) Paragraph (1) of section 6039G(d) is amended by 
     inserting ``or 877A'' after ``section 877''.
       (B) The second sentence of section 6039G(e) is amended by 
     inserting ``or who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3))'' after 
     ``877(a))''.
       (C) Section 6039G(f) is amended by inserting ``or 
     877A(e)(2)(B)'' after ``877(e)(1)''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after February 
     2, 2004.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after February 2, 2004, 
     from an individual or the estate of an individual whose 
     expatriation date (as so defined) occurs after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

     SEC. 5653. EXCISE TAX ON STOCK COMPENSATION OF INSIDERS IN 
                   INVERTED CORPORATIONS.

       (a) In General.--Subtitle D is amended by adding at the end 
     the following new chapter:

 ``CHAPTER 48--STOCK COMPENSATION OF INSIDERS IN INVERTED CORPORATIONS

``Sec. 5000A. Stock compensation of insiders in inverted corporations 
              entities.

     ``SEC. 5000A. STOCK COMPENSATION OF INSIDERS IN INVERTED 
                   CORPORATIONS.

       ``(a) Imposition of Tax.--In the case of an individual who 
     is a disqualified individual with respect to any inverted 
     corporation, there is hereby imposed on such person a tax 
     equal to 20 percent of the value (determined under subsection 
     (b)) of the specified stock compensation held (directly or 
     indirectly) by or for the benefit of such individual or a 
     member of such individual's family (as defined in section 
     267) at any time during the 12-month period beginning on the 
     date which is 6 months before the inversion date.
       ``(b) Value.--For purposes of subsection (a)--
       ``(1) In general.--The value of specified stock 
     compensation shall be--
       ``(A) in the case of a stock option (or other similar 
     right) or any stock appreciation right, the fair value of 
     such option or right, and
       ``(B) in any other case, the fair market value of such 
     compensation.
       ``(2) Date for determining value.--The determination of 
     value shall be made--
       ``(A) in the case of specified stock compensation held on 
     the inversion date, on such date,
       ``(B) in the case of such compensation which is canceled 
     during the 6 months before the inversion date, on the day 
     before such cancellation, and
       ``(C) in the case of such compensation which is granted 
     after the inversion date, on the date such compensation is 
     granted.
       ``(c) Tax To Apply Only If Shareholder Gain Recognized.--
     Subsection (a) shall apply to any disqualified individual 
     with respect to an inverted corporation only if gain (if any) 
     on any stock in such corporation is recognized in whole or 
     part by any shareholder by reason of the acquisition referred 
     to in section 7874(a)(2)(A) (determined by substituting `July 
     10, 2002' for `March 20, 2002') with respect to such 
     corporation.
       ``(d) Exception Where Gain Recognized on Compensation.--
     Subsection (a) shall not apply to--
       ``(1) any stock option which is exercised on the inversion 
     date or during the 6-month period before such date and to the 
     stock acquired in such exercise, if income is recognized 
     under section 83 on or before the inversion date with respect 
     to the stock acquired pursuant to such exercise, and
       ``(2) any specified stock compensation which is exercised, 
     sold, exchanged, distributed, cashed out, or otherwise paid 
     during such period in a transaction in which gain or loss is 
     recognized in full.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Disqualified individual.--The term `disqualified 
     individual' means, with respect to a corporation, any 
     individual who, at any time during the 12-month period 
     beginning on the date which is 6 months before the inversion 
     date--
       ``(A) is subject to the requirements of section 16(a) of 
     the Securities Exchange Act of 1934 with respect to such 
     corporation, or
       ``(B) would be subject to such requirements if such 
     corporation were an issuer of equity securities referred to 
     in such section.
       ``(2) Inverted corporation; inversion date.--
       ``(A) Inverted corporation.--The term `inverted 
     corporation' means any corporation to which subsection (a) or 
     (b) of section 7874 applies determined--
       ``(i) by substituting `July 10, 2002' for `March 20, 2002' 
     in section 7874(a)(2)(A), and
       ``(ii) without regard to subsection (b)(1)(A).
     Such term includes any predecessor or successor of such a 
     corporation.
       ``(B) Inversion date.--The term `inversion date' means, 
     with respect to a corporation, the date on which the 
     corporation first becomes an inverted corporation.
       ``(3) Specified stock compensation.--
       ``(A) In general.--The term `specified stock compensation' 
     means payment (or right to payment) granted by the inverted 
     corporation (or by any member of the expanded affiliated 
     group which includes such corporation) to any person in 
     connection with the performance of services by a disqualified 
     individual for such corporation or member if the value of 
     such payment or right is based on (or determined by reference 
     to) the value (or change in value) of stock in such 
     corporation (or any such member).
       ``(B) Exceptions.--Such term shall not include--
       ``(i) any option to which part II of subchapter D of 
     chapter 1 applies, or
       ``(ii) any payment or right to payment from a plan referred 
     to in section 280G(b)(6).
       ``(4) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group (as defined in 
     section 1504(a) without regard to section 1504(b)(3)); except 
     that section 1504(a) shall be applied by substituting `more 
     than 50 percent' for `at least 80 percent' each place it 
     appears.
       ``(f) Special Rules.--For purposes of this section--

[[Page 10966]]

       ``(1) Cancellation of restriction.--The cancellation of a 
     restriction which by its terms will never lapse shall be 
     treated as a grant.
       ``(2) Payment or reimbursement of tax by corporation 
     treated as specified stock compensation.--Any payment of the 
     tax imposed by this section directly or indirectly by the 
     inverted corporation or by any member of the expanded 
     affiliated group which includes such corporation--
       ``(A) shall be treated as specified stock compensation, and
       ``(B) shall not be allowed as a deduction under any 
     provision of chapter 1.
       ``(3) Certain restrictions ignored.--Whether there is 
     specified stock compensation, and the value thereof, shall be 
     determined without regard to any restriction other than a 
     restriction which by its terms will never lapse.
       ``(4) Property transfers.--Any transfer of property shall 
     be treated as a payment and any right to a transfer of 
     property shall be treated as a right to a payment.
       ``(5) Other administrative provisions.--For purposes of 
     subtitle F, any tax imposed by this section shall be treated 
     as a tax imposed by subtitle A.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Denial of Deduction.--
       (1) In general.--Paragraph (6) of section 275(a) is amended 
     by inserting ``48,'' after ``46,''.
       (2) $1,000,000 limit on deductible compensation reduced by 
     payment of excise tax on specified stock compensation.--
     Paragraph (4) of section 162(m) is amended by adding at the 
     end the following new subparagraph:
       ``(G) Coordination with excise tax on specified stock 
     compensation.--The dollar limitation contained in paragraph 
     (1) with respect to any covered employee shall be reduced 
     (but not below zero) by the amount of any payment (with 
     respect to such employee) of the tax imposed by section 5000A 
     directly or indirectly by the inverted corporation (as 
     defined in such section) or by any member of the expanded 
     affiliated group (as defined in such section) which includes 
     such corporation.''.
       (c) Conforming Amendments.--
       (1) The last sentence of section 3121(v)(2)(A) is amended 
     by inserting before the period ``or to any specified stock 
     compensation (as defined in section 5000A) on which tax is 
     imposed by section 5000A''.
       (2) The table of chapters for subtitle D is amended by 
     adding at the end the following new item:

``Chapter 48. Stock compensation of insiders in inverted 
              corporations.''.

       (d) Effective Date.--The amendments made by this section 
     shall take effect on July 11, 2002; except that periods 
     before such date shall not be taken into account in applying 
     the periods in subsections (a) and (e)(1) of section 5000A of 
     the Internal Revenue Code of 1986, as added by this section.

     SEC. 5654. REINSURANCE OF UNITED STATES RISKS IN FOREIGN 
                   JURISDICTIONS.

       (a) In General.--Section 845(a) (relating to allocation in 
     case of reinsurance agreement involving tax avoidance or 
     evasion) is amended by striking ``source and character'' and 
     inserting ``amount, source, or character''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any risk reinsured after April 11, 2002.

               Subtitle H--Additional Revenue Provisions

                   PART I--ADMINISTRATIVE PROVISIONS

     SEC. 5671. EXTENSION OF IRS USER FEES.

       (a) In General.--Section 7528(c) (relating to termination) 
     is amended by striking ``December 31, 2004'' and inserting 
     ``September 30, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to requests after the date of the enactment of 
     this Act.

     SEC. 5672. CLARIFICATION OF RULES FOR PAYMENT OF ESTIMATED 
                   TAX FOR CERTAIN DEEMED ASSET SALES.

       (a) In General.--Paragraph (13) of section 338(h) (relating 
     to tax on deemed sale not taken into account for estimated 
     tax purposes) is amended by adding at the end the following: 
     ``The preceding sentence shall not apply with respect to a 
     qualified stock purchase for which an election is made under 
     paragraph (10).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to transactions occurring after the date of the 
     enactment of this Act.

     SEC. 5673. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALLMENT 
                   AGREEMENTS.

       (a) In General.--
       (1) Section 6159(a) (relating to authorization of 
     agreements) is amended--
       (A) by striking ``satisfy liability for payment of'' and 
     inserting ``make payment on'', and
       (B) by inserting ``full or partial'' after ``facilitate''.
       (2) Section 6159(c) (relating to Secretary required to 
     enter into installment agreements in certain cases) is 
     amended in the matter preceding paragraph (1) by inserting 
     ``full'' before ``payment''.
       (b) Requirement To Review Partial Payment Agreements Every 
     Two Years.--Section 6159, as amended by this Act, is amended 
     by redesignating subsections (d), (e), and (f) as subsections 
     (e), (f), and (g), respectively, and inserting after 
     subsection (c) the following new subsection:
       ``(d) Secretary Required To Review Installment Agreements 
     for Partial Collection Every Two Years.--In the case of an 
     agreement entered into by the Secretary under subsection (a) 
     for partial collection of a tax liability, the Secretary 
     shall review the agreement at least once every 2 years.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     of the enactment of this Act.

                     PART II--FINANCIAL INSTRUMENTS

     SEC. 5675. TREATMENT OF STRIPPED INTERESTS IN BOND AND 
                   PREFERRED STOCK FUNDS, ETC.

       (a) In General.--Section 1286 (relating to tax treatment of 
     stripped bonds) is amended by redesignating subsection (f) as 
     subsection (g) and by inserting after subsection (e) the 
     following new subsection:
       ``(f) Treatment of Stripped Interests in Bond and Preferred 
     Stock Funds, Etc.--In the case of an account or entity 
     substantially all of the assets of which consist of bonds, 
     preferred stock, or a combination thereof, the Secretary may 
     by regulations provide that rules similar to the rules of 
     this section and 305(e), as appropriate, shall apply to 
     interests in such account or entity to which (but for this 
     subsection) this section or section 305(e), as the case may 
     be, would not apply.''.
       (b) Cross Reference.--Subsection (e) of section 305 is 
     amended by adding at the end the following new paragraph:
       ``(7) Cross reference.--

  ``For treatment of stripped interests in certain accounts or entities 
holding preferred stock, see section 1286(f).''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to purchases and dispositions after the date of 
     the enactment of this Act.

     SEC. 5676. APPLICATION OF EARNINGS STRIPPING RULES TO 
                   PARTNERSHIPS AND S CORPORATIONS.

       (a) In General.--Section 168(j) (relating to limitation on 
     deduction for interest on certain indebtedness) is amended by 
     redesignating paragraph (8) as paragraph (9) and by inserting 
     after paragraph (7) the following new paragraph:
       ``(8) Application to partnerships and s corporations.--
       ``(A) In general.--This subsection shall apply to 
     partnerships and S corporations in the same manner as it 
     applies to C corporations.
       ``(B) Allocations to certain corporate partners.--If a C 
     corporation is a partner in a partnership--
       ``(i) the corporation's allocable share of indebtedness and 
     interest income of the partnership shall be taken into 
     account in applying this subsection to the corporation, and
       ``(ii) if a deduction is not disallowed under this 
     subsection with respect to any interest expense of the 
     partnership, this subsection shall be applied separately in 
     determining whether a deduction is allowable to the 
     corporation with respect to the corporation's allocable share 
     of such interest expense.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5677. RECOGNITION OF CANCELLATION OF INDEBTEDNESS INCOME 
                   REALIZED ON SATISFACTION OF DEBT WITH 
                   PARTNERSHIP INTEREST.

       (a) In General.--Paragraph (8) of section 108(e) (relating 
     to general rules for discharge of indebtedness (including 
     discharges not in title 11 cases or insolvency)) is amended 
     to read as follows:
       ``(8) Indebtedness satisfied by corporate stock or 
     partnership interest.--For purposes of determining income of 
     a debtor from discharge of indebtedness, if--
       ``(A) a debtor corporation transfers stock, or
       ``(B) a debtor partnership transfers a capital or profits 
     interest in such partnership,
     to a creditor in satisfaction of its recourse or nonrecourse 
     indebtedness, such corporation or partnership shall be 
     treated as having satisfied the indebtedness with an amount 
     of money equal to the fair market value of the stock or 
     interest. In the case of any partnership, any discharge of 
     indebtedness income recognized under this paragraph shall be 
     included in the distributive shares of taxpayers which were 
     the partners in the partnership immediately before such 
     discharge.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to cancellations of indebtedness 
     occurring on or after the date of the enactment of this Act.

     SEC. 5678. MODIFICATION OF STRADDLE RULES.

       (a) Rules Relating to Identified Straddles.--
       (1) In general.--Subparagraph (A) of section 1092(a)(2) 
     (relating to special rule for identified straddles) is 
     amended to read as follows:
       ``(A) In general.--In the case of any straddle which is an 
     identified straddle--
       ``(i) paragraph (1) shall not apply with respect to 
     identified positions comprising the identified straddle,
       ``(ii) if there is any loss with respect to any identified 
     position of the identified straddle, the basis of each of the 
     identified offsetting positions in the identified straddle 
     shall be increased by an amount which bears the same ratio to 
     the loss as the unrecognized gain with respect to such 
     offsetting position bears to the aggregate unrecognized gain 
     with respect to all such offsetting positions, and
       ``(iii) any loss described in clause (ii) shall not 
     otherwise be taken into account for purposes of this 
     title.''.
       (2) Identified straddle.--Section 1092(a)(2)(B) (defining 
     identified straddle) is amended--

[[Page 10967]]

       (A) by striking clause (ii) and inserting the following:
       ``(ii) to the extent provided by regulations, the value of 
     each position of which (in the hands of the taxpayer 
     immediately before the creation of the straddle) is not less 
     than the basis of such position in the hands of the taxpayer 
     at the time the straddle is created, and'', and
       (B) by adding at the end the following new flush sentence:
     ``The Secretary shall prescribe regulations which specify the 
     proper methods for clearly identifying a straddle as an 
     identified straddle (and the positions comprising such 
     straddle), which specify the rules for the application of 
     this section for a taxpayer which fails to properly identify 
     the positions of an identified straddle, and which specify 
     the ordering rules in cases where a taxpayer disposes of less 
     than an entire position which is part of an identified 
     straddle.''.
       (3) Unrecognized gain.--Section 1092(a)(3) (defining 
     unrecognized gain) is amended by redesignating subparagraph 
     (B) as subparagraph (C) and by inserting after subparagraph 
     (A) the following new subparagraph:
       ``(B) Special rule for identified straddles.--For purposes 
     of paragraph (2)(A)(ii), the unrecognized gain with respect 
     to any identified offsetting position shall be the excess of 
     the fair market value of the position at the time of the 
     determination over the fair market value of the position at 
     the time the taxpayer identified the position as a position 
     in an identified straddle.''
       (4) Conforming amendment.--Section 1092(c)(2) is amended by 
     striking subparagraph (B) and by redesignating subparagraph 
     (C) as subparagraph (B).
       (b) Physically Settled Positions.--Section 1092(d) 
     (relating to definitions and special rules) is amended by 
     adding at the end the following new paragraph:
       ``(8) Special rules for physically settled positions.--For 
     purposes of subsection (a), if a taxpayer settles a position 
     which is part of a straddle by delivering property to which 
     the position relates (and such position, if terminated, would 
     result in a realization of a loss), then such taxpayer shall 
     be treated as if such taxpayer--
       ``(A) terminated the position for its fair market value 
     immediately before the settlement, and
       ``(B) sold the property so delivered by the taxpayer at its 
     fair market value.''.
       (c) Repeal of Stock Exception.--
       (1) In general.--Section 1092(d)(3) is repealed.
       (2) Conforming amendment.--Section 1258(d)(1) is amended by 
     striking ``; except that the term `personal property' shall 
     include stock''.
       (d) Repeal of Qualified Covered Call Exception.--Section 
     1092(c)(4) is amended by adding at the end the following new 
     subparagraph:
       ``(I) Termination.--This paragraph shall not apply to any 
     position established on or after the date of the enactment of 
     this subparagraph.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to positions established on or after the date of 
     the enactment of this Act.

     SEC. 5679. DENIAL OF INSTALLMENT SALE TREATMENT FOR ALL 
                   READILY TRADEABLE DEBT.

       (a) In General.--Section 453(f)(4)(B) (relating to 
     purchaser evidences of indebtedness payable on demand or 
     readily tradeable) is amended by striking ``is issued by a 
     corporation or a government or political subdivision thereof 
     and''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales occurring on or after the date of the 
     enactment of this Act.

                PART III--CORPORATIONS AND PARTNERSHIPS

     SEC. 5680. MODIFICATION OF TREATMENT OF TRANSFERS TO 
                   CREDITORS IN DIVISIVE REORGANIZATIONS.

       (a) In General.--Section 361(b)(3) (relating to treatment 
     of transfers to creditors) is amended by adding at the end 
     the following new sentence: ``In the case of a reorganization 
     described in section 368(a)(1)(D) with respect to which stock 
     or securities of the corporation to which the assets are 
     transferred are distributed in a transaction which qualifies 
     under section 355, this paragraph shall apply only to the 
     extent that the sum of the money and the fair market value of 
     other property transferred to such creditors does not exceed 
     the adjusted bases of such assets transferred.''.
       (b) Liabilities in Excess of Basis.--Section 357(c)(1)(B) 
     is amended by inserting ``with respect to which stock or 
     securities of the corporation to which the assets are 
     transferred are distributed in a transaction which qualifies 
     under section 355'' after ``section 368(a)(1)(D)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transfers of money or other property, or 
     liabilities assumed, in connection with a reorganization 
     occurring on or after the date of the enactment of this Act.

     SEC. 5681. CLARIFICATION OF DEFINITION OF NONQUALIFIED 
                   PREFERRED STOCK.

       (a) In General.--Section 351(g)(3)(A) is amended by adding 
     at the end the following: ``Stock shall not be treated as 
     participating in corporate growth to any significant extent 
     unless there is a real and meaningful likelihood of the 
     shareholder actually participating in the earnings and growth 
     of the corporation.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transactions after May 14, 2003.

     SEC. 5682. MODIFICATION OF DEFINITION OF CONTROLLED GROUP OF 
                   CORPORATIONS.

       (a) In General.--Section 1563(a)(2) (relating to brother-
     sister controlled group) is amended by striking 
     ``possessing--'' and all that follows through ``(B)'' and 
     inserting ``possessing''.
       (b) Application of Existing Rules to Other Code 
     Provisions.--Section 1563(f) (relating to other definitions 
     and rules) is amended by adding at the end the following new 
     paragraph:
       ``(5) Brother-sister controlled group definition for 
     provisions other than this part.--
       ``(A) In general.--Except as specifically provided in an 
     applicable provision, subsection (a)(2) shall be applied to 
     an applicable provision as if it read as follows:
       `(2) Brother-sister controlled group.--Two or more 
     corporations if 5 or fewer persons who are individuals, 
     estates, or trusts own (within the meaning of subsection 
     (d)(2) stock possessing--
       `(A) at least 80 percent of the total combined voting power 
     of all classes of stock entitled to vote, or at least 80 
     percent of the total value of shares of all classes of stock, 
     of each corporation, and
       `(B) more than 50 percent of the total combined voting 
     power of all classes of stock entitled to vote or more than 
     50 percent of the total value of shares of all classes of 
     stock of each corporation, taking into account the stock 
     ownership of each such person only to the extent such stock 
     ownership is identical with respect to each such 
     corporation.'
       ``(B) Applicable provision.--For purposes of this 
     paragraph, an applicable provision is any provision of law 
     (other than this part) which incorporates the definition of 
     controlled group of corporations under subsection (a).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5683. MANDATORY BASIS ADJUSTMENTS IN CONNECTION WITH 
                   PARTNERSHIP DISTRIBUTIONS AND TRANSFERS OF 
                   PARTNERSHIP INTERESTS.

       (a) In General.--Section 754 is repealed.
       (b) Adjustment to Basis of Undistributed Partnership 
     Property.--Section 734 is amended--
       (1) by striking ``, with respect to which the election 
     provided in section 754 is in effect,'' in the matter 
     preceding paragraph (1) of subsection (b),
       (2) by striking ``(as adjusted by section 732(d))'' both 
     places it appears in subsection (b),
       (3) by striking the last sentence of subsection (b),
       (4) by striking subsection (a) and by redesignating 
     subsections (b) and (c) as subsections (a) and (b), 
     respectively, and
       (5) by striking ``OPTIONAL'' in the heading.
       (c) Adjustment to Basis of Partnership Property.--Section 
     743 is amended--
       (1) by striking ``with respect to which the election 
     provided in section 754 is in effect'' in the matter 
     preceding paragraph (1) of subsection (b),
       (2) by striking subsection (a) and by redesignating 
     subsections (b) and (c) as subsections (a) and (b), 
     respectively,
       (3) by adding at the end the following new subsection:
       ``(c) Election to Adjust Basis for Transfers Upon Death of 
     Partner.--Subsection (a) shall not apply and no adjustments 
     shall be made in the case of any transfer of an interest in a 
     partnership upon the death of a partner unless an election to 
     do so is made by the partnership. Such an election shall 
     apply with respect to all such transfers of interests in the 
     partnership. Any election under section 754 in effect on the 
     date of the enactment of this subsection shall constitute an 
     election made under this subsection. Such election may be 
     revoked by the partnership, subject to such limitations as 
     may be provided by regulations prescribed by the 
     Secretary.'', and
       (4) by striking ``OPTIONAL'' in the heading.
       (d) Conforming Amendments.--
       (1) Subsection (d) of section 732 is repealed.
       (2) Section 755(a) is amended--
       (A) by striking ``section 734(b) (relating to the optional 
     adjustment'' and inserting ``section 734(a) (relating to the 
     adjustment'', and
       (B) by striking ``section 743(b) (relating to the optional 
     adjustment'' and inserting ``section 743(a) (relating to the 
     adjustment''.
       (3) Section 761(e)(2) is amended by striking ``optional''.
       (4) Section 774(a) is amended by striking ``743(b)'' both 
     places it appears and inserting ``743(a)''.
       (5) The item relating to section 734 in the table of 
     sections for subpart B of part II of subchapter K of chapter 
     1 is amended by striking ``Optional''.
       (6) The item relating to section 743 in the table of 
     sections for subpart C of part II of subchapter K of chapter 
     1 is amended by striking ``Optional''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to transfers and 
     distributions made after the date of the enactment of this 
     Act.
       (2) Repeal of section 732(d).--The amendments made by 
     subsections (b)(2) and (d)(1) shall apply to--
       (A) except as provided in subparagraph (B), transfers made 
     after the date of the enactment of this Act, and
       (B) in the case of any transfer made on or before such date 
     to which section 732(d) applies, distributions made after the 
     date which is 2 years after such date of enactment.

[[Page 10968]]



     SEC. 5684. CLASS LIVES FOR UTILITY GRADING COSTS.

       (a) Gas Utility Property.--Section 168(e)(3)(E) (defining 
     15-year property) is amended by striking ``and'' at the end 
     of clause (ii), by striking the period at the end of clause 
     (iii) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(iv) initial clearing and grading land improvements with 
     respect to gas utility property.''.
       (b) Electric Utility Property.--Section 168(e)(3) is 
     amended by adding at the end the following new subparagraph:
       ``(F) 20-year property.--The term `20-year property' means 
     initial clearing and grading land improvements with respect 
     to any electric utility transmission and distribution 
     plant.''.
       (c) Conforming Amendments.--The table contained in section 
     168(g)(3)(B) is amended--
       (1) by inserting ``or (E)(iv)'' after ``(E)(iii)'', and
       (2) by adding at the end the following new item:

  ``(F).......................................................25''.....

       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 5685. CONSISTENT AMORTIZATION OF PERIODS FOR 
                   INTANGIBLES.

       (a) Start-Up Expenditures.--
       (1) Allowance of deduction.--Paragraph (1) of section 
     195(b) (relating to start-up expenditures) is amended to read 
     as follows:
       ``(1) Allowance of deduction.--If a taxpayer elects the 
     application of this subsection with respect to any start-up 
     expenditures--
       ``(A) the taxpayer shall be allowed a deduction for the 
     taxable year in which the active trade or business begins in 
     an amount equal to the lesser of--
       ``(i) the amount of start-up expenditures with respect to 
     the active trade or business, or
       ``(ii) $5,000, reduced (but not below zero) by the amount 
     by which such start-up expenditures exceed $50,000, and
       ``(B) the remainder of such start-up expenditures shall be 
     allowed as a deduction ratably over the 180-month period 
     beginning with the month in which the active trade or 
     business begins.''.
       (2) Conforming amendment.--Subsection (b) of section 195 is 
     amended by striking ``Amortize'' and inserting ``Deduct'' in 
     the heading.
       (b) Organizational Expenditures.--Subsection (a) of section 
     248 (relating to organizational expenditures) is amended to 
     read as follows:
       ``(a) Election to Deduct.--If a corporation elects the 
     application of this subsection (in accordance with 
     regulations prescribed by the Secretary) with respect to any 
     organizational expenditures--
       ``(1) the corporation shall be allowed a deduction for the 
     taxable year in which the corporation begins business in an 
     amount equal to the lesser of--
       ``(A) the amount of organizational expenditures with 
     respect to the taxpayer, or
       ``(B) $5,000, reduced (but not below zero) by the amount by 
     which such organizational expenditures exceed $50,000, and
       ``(2) the remainder of such organizational expenditures 
     shall be allowed as a deduction ratably over the 180-month 
     period beginning with the month in which the corporation 
     begins business.''.
       (c) Treatment of Organizational and Syndication Fees or 
     Partnerships.--
       (1) In general.--Section 709(b) (relating to amortization 
     of organization fees) is amended by redesignating paragraph 
     (2) as paragraph (3) and by amending paragraph (1) to read as 
     follows:
       ``(1) Allowance of deduction.--If a taxpayer elects the 
     application of this subsection (in accordance with 
     regulations prescribed by the Secretary) with respect to any 
     organizational expenses--
       ``(A) the taxpayer shall be allowed a deduction for the 
     taxable year in which the partnership begins business in an 
     amount equal to the lesser of--
       ``(i) the amount of organizational expenses with respect to 
     the partnership, or
       ``(ii) $5,000, reduced (but not below zero) by the amount 
     by which such organizational expenses exceed $50,000, and
       ``(B) the remainder of such organizational expenses shall 
     be allowed as a deduction ratably over the 180-month period 
     beginning with the month in which the partnership begins 
     business.
       ``(2) Dispositions before close of amortization period.--In 
     any case in which a partnership is liquidated before the end 
     of the period to which paragraph (1)(B) applies, any deferred 
     expenses attributable to the partnership which were not 
     allowed as a deduction by reason of this section may be 
     deducted to the extent allowable under section 165.''.
       (2) Conforming amendment.--Subsection (b) of section 709 is 
     amended by striking ``Amortization'' and inserting 
     ``Deduction'' in the heading.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

  Subtitle I--Tax-Exempt Financing of Highway Projects and Rail-Truck 
                          Transfer Facilities

     SEC. 5691. TAX-EXEMPT FINANCING OF HIGHWAY PROJECTS AND RAIL-
                   TRUCK TRANSFER FACILITIES.

       (a) Treatment as Exempt Facility Bond.--Subsection (a) of 
     section 142 (relating to exempt facility bond) is amended by 
     striking ``or'' at the end of paragraph (12), by striking the 
     period at the end of paragraph (13), and by adding at the end 
     the following:
       ``(14) qualified highway facilities, or
       ``(15) qualified surface freight transfer facilities.''.
       (b) Qualified Highway Facilities and Qualified Surface 
     Freight Transfer Facilities.--Section 142 is amended by 
     adding at the end the following:
       ``(l) Qualified Highway and Surface Freight Transfer 
     Facilities.--
       ``(1) Qualified highway facilities.--For purposes of 
     subsection (a)(14), the term `qualified highway facilities' 
     means--
       ``(A) any surface transportation project which receives 
     Federal assistance under title 23, United States Code (as in 
     effect on the date of the enactment of this subsection), or
       ``(B) any project for an international bridge or tunnel for 
     which an international entity authorized under Federal or 
     State law is responsible and which receives Federal 
     assistance under such title 23.
       ``(2) Qualified Surface Freight Transfer Facilities.--For 
     purposes of subsection (a)(15), the term `qualified surface 
     freight transfer facilities' means facilities for the 
     transfer of freight from truck to rail or rail to truck 
     (including any temporary storage facilities directly related 
     to such transfers) which receives Federal assistance under 
     either title 23 or title 49, United States Code (as in effect 
     on the date of the enactment of this subsection).
       ``(3) Aggregate face amount of tax-exempt financing for 
     facilities.--
       ``(A) In general.--An issue shall not be treated as an 
     issue described in subsection (a)(14) or (a)(15) if the 
     aggregate face amount of bonds issued by any State pursuant 
     thereto (when added to the aggregate face amount of bonds 
     previously so issued) exceeds $15,000,000,000.
       ``(B) Allocation by secretary of transportation.--The 
     Secretary of Transportation shall allocate the amount 
     described in subparagraph (A) among eligible projects 
     described in subsections (a)(14) and (a)(15) in such manner 
     as the Secretary determines appropriate.''.
       (c) Exemption From General State Volume Caps.--Paragraph 
     (3) of section 146(g) of the Internal Revenue Code of 1986 
     (relating to exception for certain bonds) is amended by 
     striking ``or (13)'' and all that follows through the end of 
     the paragraph and inserting ``(13), (14), or (15) of section 
     142(a), and''.
       (d) Effective Date.--The amendments made by this section 
     apply to bonds issued after the date of the enactment of this 
     Act.

     SEC. 5692. ADDITION OF VACCINES AGAINST HEPATITIS A TO LIST 
                   OF TAXABLE VACCINES.

       (a) In General.--Section 4132(a)(1) (defining taxable 
     vaccine) is amended by redesignating subparagraphs (I), (J), 
     (K), and (L) as subparagraphs (J), (K), (L), and (M), 
     respectively, and by inserting after subparagraph (H) the 
     following new subparagraph:
       ``(I) Any vaccine against hepatitis A.''.
       (b) Conforming Amendment.--Section 9510(c)(1)(A) is amended 
     by striking ``October 18, 2000'' and inserting ``the date of 
     the enactment of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004''.
       (c) Effective Date.--
       (1) Sales, etc.--The amendments made by this section shall 
     apply to sales and uses on or after the first day of the 
     first month which begins more than 4 weeks after the date of 
     the enactment of this Act.
       (2) Deliveries.--For purposes of paragraph (1) and section 
     4131 of the Internal Revenue Code of 1986, in the case of 
     sales on or before the effective date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.

     SEC. 5693. ADDITION OF VACCINES AGAINST INFLUENZA TO LIST OF 
                   TAXABLE VACCINES.

       (a) In General.--Section 4132(a)(1) (defining taxable 
     vaccine), as amended by section 5692 of this Act, is amended 
     by adding at the end the following new subparagraph:
       ``(N) Any trivalent vaccine against influenza.''.
       (b) Effective Date.--
       (1) Sales, etc.--The amendment made by this section shall 
     apply to sales and uses on or after the later of--
       (A) the first day of the first month which begins more than 
     4 weeks after the date of the enactment of this Act, or
       (B) the date on which the Secretary of Health and Human 
     Services lists any vaccine against influenza for purposes of 
     compensation for any vaccine-related injury or death through 
     the Vaccine Injury Compensation Trust Fund.
       (2) Deliveries.--For purposes of paragraph (1) and section 
     4131 of the Internal Revenue Code of 1986, in the case of 
     sales on or before the effective date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.

     SEC. 5694. EXTENSION OF AMORTIZATION OF INTANGIBLES TO SPORTS 
                   FRANCHISES.

       (a) In General.--Section 197(e) (relating to exceptions to 
     definition of section 197 intangible) is amended by striking 
     paragraph (6) and by redesignating paragraphs (7) and (8) as 
     paragraphs (6) and (7), respectively.
       (b) Conforming Amendments.--
       (1)(A) Section 1056 (relating to basis limitation for 
     player contracts transferred in connection with the sale of a 
     franchise) is repealed.
       (B) The table of sections for part IV of subchapter O of 
     chapter 1 is amended by striking the item relating to section 
     1056.

[[Page 10969]]

       (2) Section 1245(a) (relating to gain from disposition of 
     certain depreciable property) is amended by striking 
     paragraph (4).
       (3) Section 1253 (relating to transfers of franchises, 
     trademarks, and trade names) is amended by striking 
     subsection (e).
       (c) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to property 
     acquired after the date of the enactment of this Act.
       (2) Section 1245.--The amendment made by subsection (b)(2) 
     shall apply to franchises acquired after the date of the 
     enactment of this Act.

 TITLE VI--TRANSPORTATION DISCRETIONARY SPENDING GUARANTEE AND BUDGET 
                                OFFSETS

     SEC. 6101. SENSE OF THE SENATE ON OVERALL FEDERAL BUDGET.

       It is the sense of the Senate that--
       (1) comprehensive statutory budget enforcement measures, 
     the jurisdiction of which lies with the Senate Budget 
     Committee and Senate Governmental Affairs Committee, should--
       (A) be enacted this year; and
       (B) address all areas of the Federal budget, including 
     discretionary spending, direct spending, and revenues; and
       (2) special allocations for transportation or any other 
     categories of spending should be considered in that context 
     and be consistent with the rest of the Federal budget.

     SEC. 6102. DISCRETIONARY SPENDING CATEGORIES.

       (a) Definitions.--
       (1) Highway category.--Section 250(c)(4)(B) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
     900(c)(4)(B)) is amended--
       (A) by striking ``Transportation Equity Act for the 21st 
     Century'' and inserting ``Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004''; and
       (B) by adding at the end the following:
       ``(v) 69-8158-0-7-401 (Motor Carrier Safety Grants).
       ``(vi) 69-8159-0-7-401 (Motor Carrier Safety Operations and 
     Programs).''.
       (2) Mass transit category.--Section 250(c)(4) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (2 
     U.S.C. 900(c)(4)) is amended by striking subparagraph (C) and 
     inserting the following:
       ``(C) Mass transit category.--The term `mass transit 
     category' means the following budget accounts, or portions of 
     the accounts, that are subject to the obligation limitations 
     on contract authority provided in the Safe, Accountable, 
     Flexible, and Efficient Transportation Equity Act of 2004 or 
     for which appropriations are provided in accordance with 
     authorizations contained in that Act:
       ``(i) 69-1120-0-1-401 (Administrative Expenses).
       ``(ii) 69-1134-0-1-401 (Capital Investment Grants).
       ``(iii) 69-8191-0-7-401 (Discretionary Grants).
       ``(iv) 69-1129-0-1-401 (Formula Grants).
       ``(v) 69-8303-0-7-401 (Formula Grants and Research).
       ``(vi) 69-1127-0-1-401 (Interstate Transfer Grants--
     Transit).
       ``(vii) 69-1125-0-1-401 (Job Access and Reverse Commute).
       ``(viii) 69-1122-0-1-401 (Miscellaneous Expired Accounts).
       ``(ix) 69-1139-0-1-401 (Major Capital Investment Grants).
       ``(x) 69-1121-0-1-401 (Research, Training and Human 
     Resources).
       ``(xi) 69-8350-0-7-401 (Trust Fund Share of Expenses).
       ``(xii) 69-1137-0-1-401 (Transit Planning and Research).
       ``(xiii) 69-1136-0-1-401 (University Transportation 
     Research).
       ``(xiv) 69-1128-0-1-401 (Washington Metropolitan Area 
     Transit Authority).''.
       (b) Highway Funding Revenue Alignment.--Section 
     251(b)(1)(B) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 901(b)(1)(B)) is amended--
       (1) in clause (i)--
       (A) by inserting ``for each of fiscal years 2006 through 
     2009'' after ``submits the budget'';
       (B) by inserting ``the obligation limitation and outlay 
     limit for'' after ``adjustments to''; and
       (C) by striking ``provided in clause (ii)(I)(cc).'' and 
     inserting the following: ``follows:

       ``(I) OMB shall take the actual level of highway receipts 
     for the year before the current year and subtract the sum of 
     the estimated level of highway receipts in clause (iii), plus 
     any amount previously calculated under clauses (i)(II) and 
     (ii) for that year.
       ``(II) OMB shall take the current estimate of highway 
     receipts for the current year and subtract the estimated 
     level of highway receipts in clause (iii) for that year.
       ``(III) OMB shall--

       ``(aa) take the sum of the amounts calculated under 
     subclauses (I) and (II) and add that amount to the obligation 
     limitation set forth in section 6103 of the Safe, 
     Accountable, Flexible, and Efficient Transportation Equity 
     Act of 2004 for the highway category for the budget year, and 
     calculate the outlay change resulting from that change in 
     obligations relative to that amount for the budget year and 
     each outyear using current estimates; and
       ``(bb) after making the calculation under item (aa), adjust 
     the obligation limitation set forth in section 6103 of the 
     Safe, Accountable, Flexible, and Efficient Transportation 
     Equity Act of 2004 for the budget year by adding the amount 
     calculated under subclauses (I) and (II).'';
       (2) by striking clause (ii) and inserting the following:
       ``(ii) When the President submits the supplementary budget 
     estimates for each of fiscal years 2006 through 2009 under 
     section 1106 of title 31, United States Code, OMB's Mid-
     Session Review shall include adjustments to the obligation 
     limitation and outlay limit for the highway category for the 
     budget year and each outyear as follows:

       ``(I) OMB shall take the most recent estimate of highway 
     receipts for the current year (based on OMB's Mid-Session 
     Review) and subtract the estimated level of highway receipts 
     in clause (iii) plus any amount previously calculated and 
     included in the President's Budget under clause (i)(II) for 
     that year.
       ``(II) OMB shall--

       ``(aa) take the amount calculated under subclause (I) and 
     add that amount to the amount of obligations set forth in 
     section 6103 of the Safe, Accountable, Flexible, and 
     Efficient Transportation Equity Act of 2004 for the highway 
     category for the budget year, and calculate the outlay change 
     resulting from that change in obligations relative to that 
     amount for the budget year and each outyear using current 
     estimates; and
       ``(bb) after making the calculation under item (aa), adjust 
     the amount of obligations set forth in section 6103 of the 
     Safe, Accountable, Flexible, and Efficient Transportation 
     Equity Act of 2004 for the budget year by adding the amount 
     calculated under subclause (I).''; and
       (3) by adding at the end the following:
       ``(iii) The estimated level of highway receipts for the 
     purpose of this subparagraph are--

       ``(I) for fiscal year 2004, $29,945,938,902;
       ``(II) for fiscal year 2005, $36,294,778,392;
       ``(III) for fiscal year 2006, $37,766,517,123;
       ``(IV) for fiscal year 2007, $38,795,061,111;
       ``(V) for fiscal year 2008, $39,832,795,606; and
       ``(VI) for fiscal year 2009, $40,964,722,457.

       ``(iv) In this subparagraph, the term ``highway receipts'' 
     means the governmental receipts and interest credited to the 
     highway account of the Highway Trust Fund.''.
       (c) Continuation of Separate Spending Categories.--For the 
     purpose of section 251(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(c)), the 
     discretionary spending limits for the highway category and 
     the mass transit category shall be--
       (1) for fiscal year 2004--
       (A) $28,876,732,956 for the highway category; and
       (B) $6,262,000,000 for the mass transit category;
       (2) for fiscal year 2005--
       (A) $31,991,246,160 for the highway category; and
       (B) $6,903,000,000 for the mass transit category;
       (3) for fiscal year 2006--
       (A) $35,598,640,776 for the highway category; and
       (B) $7,974,000,000 for the mass transit category;
       (4) for fiscal year 2007--
       (A) $37,871,760,938 for the highway category; and
       (B) $8,658,000,000 for the mass transit category;
       (5) for fiscal year 2008--
       (A) $38,722,907,474 for the highway category; and
       (B) $9,222,000,000 for the mass transit category; and
       (6) for fiscal year 2009--
       (A) $40,537,563,667 for the highway category; and
       (B) $9,897,000,000 for the mass transit category.
       (d) Additional Adjustments.--Section 251(b)(1) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (2 
     U.S.C. 901(b)(1)) is amended--
       (1) in subparagraph (C)--
       (A) in clause (i), by striking ``fiscal years 2000, 2001, 
     2002, or 2003,'' and inserting ``each of fiscal years 2006, 
     2007, 2008, and 2009,''; and
       (B) in clause (ii), by striking ``2002 and 2003'' and 
     inserting ``2008 and 2009''; and
       (2) in subparagraph (D)--
       (A) in clause (i)--
       (i) by striking ``1999'' and inserting ``2005'';
       (ii) by striking ``2000 through 2003'' and inserting ``2006 
     through 2009''; and
       (iii) by striking ``section 8103 of the Transportation 
     Equity Act for the 21st Century'' and inserting ``section 
     6102 of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2004''; and
       (B) in clause (ii), by striking ``2000, 2001, 2002, or 
     2003'' and inserting ``2006, 2007, 2008, and 2009''.

     SEC. 6103. LEVEL OF OBLIGATION LIMITATIONS.

       (a) Highway Category.--For the purpose of section 251(b) of 
     the Balanced Budget and Emergency Deficit Control Act of 1985 
     (2 U.S.C. 901(b)), the level of obligation limitations for 
     the highway category is--
       (1) for fiscal year 2004, $34,651,000,000;
       (2) for fiscal year 2005, $38,927,000,000;
       (3) for fiscal year 2006, $40,186,000,000;
       (4) for fiscal year 2007, $40,229,000,000;
       (5) for fiscal year 2008, $40,563,000,000; and
       (6) for fiscal year 2009, $45,622,000,000.
       (b) Mass Transit Category.--For the purpose of section 
     251(b) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985 (2 U.S.C. 901(b)), the level of obligation 
     limitations for the mass transit category is--
       (1) for fiscal year 2004, $7,265,877,000;
       (2) for fiscal year 2005, $8,650,000,000;
       (3) for fiscal year 2006, $9,085,123,000;

[[Page 10970]]

       (4) for fiscal year 2007, $9,600,000,000;
       (5) for fiscal year 2008, $10,490,000,000; and
       (6) for fiscal year 2009, $11,430,000,000.

     For the purpose of this subsection, the term ``obligation 
     limitations'' means the sum of budget authority and 
     obligation limitations.

                  TITLE VII--MISCELLANEOUS PROVISIONS

     SEC. 7001. REIMBURSEMENT OF CERTAIN TRANSPORTATION COSTS 
                   INCURRED BY MEMBERS OF THE UNITED STATES ARMED 
                   FORCES ON REST AND RECUPERATION LEAVE.

       The Secretary of Defense shall reimburse a member of the 
     United States Armed Forces (out of funds available for the 
     Armed Forces for operation and maintenance for the relevant 
     fiscal year) for transportation expenses incurred by such 
     member for 1 round trip by such member between 2 locations 
     within the United States in connection with leave taken under 
     the Central Command Rest and Recuperation Leave Program 
     during the period beginning on September 25, 2003, and ending 
     on December 18, 2003.

                    TITLE VIII--SOLID WASTE DISPOSAL

     SEC. 8001. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       (a) In General.--Subtitle F of the Solid Waste Disposal Act 
     (42 U.S.C. 6961 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       ``(a) Definitions.--In this section:
       ``(1) Agency head.--The term `agency head' means--
       ``(A) the Secretary of Transportation; and
       ``(B) the head of each other Federal agency that on a 
     regular basis procures, or provides Federal funds to pay or 
     assist in paying the cost of procuring, material for cement 
     or concrete projects.
       ``(2) Cement or concrete project.--The term `cement or 
     concrete project' means a project for the construction or 
     maintenance of a highway or other transportation facility or 
     a Federal, State, or local government building or other 
     public facility that--
       ``(A) involves the procurement of cement or concrete; and
       ``(B) is carried out in whole or in part using Federal 
     funds.
       ``(3) Recovered mineral component.--The term `recovered 
     mineral component' means--
       ``(A) ground granulated blast furnace slag;
       ``(B) coal combustion fly ash; and
       ``(C) any other waste material or byproduct recovered or 
     diverted from solid waste that the Administrator, in 
     consultation with an agency head, determines should be 
     treated as recovered mineral component under this section for 
     use in cement or concrete projects paid for, in whole or in 
     part, by the agency head.
       ``(b) Implementation of Requirements.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Administrator and each agency 
     head shall take such actions as are necessary to implement 
     fully all procurement requirements and incentives in effect 
     as of the date of enactment of this section (including 
     guidelines under section 6002) that provide for the use of 
     cement and concrete incorporating recovered mineral component 
     in cement or concrete projects.
       ``(2) Priority.--In carrying out paragraph (1) an agency 
     head shall give priority to achieving greater use of 
     recovered mineral component in cement or concrete projects 
     for which recovered mineral components historically have not 
     been used or have been used only minimally.
       ``(3) Conformance.--The Administrator and each agency head 
     shall carry out this subsection in accordance with section 
     6002.
       ``(c) Full Implementation Study.--
       ``(1) In general.--The Administrator, in cooperation with 
     the Secretary of Transportation and the Secretary of Energy, 
     shall conduct a study to determine the extent to which 
     current procurement requirements, when fully implemented in 
     accordance with subsection (b), may realize energy savings 
     and environmental benefits attainable with substitution of 
     recovered mineral component in cement used in cement or 
     concrete projects.
       ``(2) Matters to be addressed.--The study shall--
       ``(A) quantify the extent to which recovered mineral 
     components are being substituted for Portland cement, 
     particularly as a result of current procurement requirements, 
     and the energy savings and environmental benefits associated 
     with that substitution;
       ``(B) identify all barriers in procurement requirements to 
     greater realization of energy savings and environmental 
     benefits, including barriers resulting from exceptions from 
     current law; and
       ``(C)(i) identify potential mechanisms to achieve greater 
     substitution of recovered mineral component in types of 
     cement or concrete projects for which recovered mineral 
     components historically have not been used or have been used 
     only minimally;
       ``(ii) evaluate the feasibility of establishing guidelines 
     or standards for optimized substitution rates of recovered 
     mineral component in those cement or concrete projects; and
       ``(iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered mineral component in those cement or concrete 
     projects.
       ``(3) Report.--Not later than 30 months after the date of 
     enactment of this section, the Administrator shall submit to 
     Congress a report on the study.
       ``(d) Additional Procurement Requirements.--Unless the 
     study conducted under subsection (c) identifies any effects 
     or other problems described in subsection (c)(2)(C)(iii) that 
     warrant further review or delay, the Administrator and each 
     agency head shall, not later than 1 year after the release of 
     the report in accordance with subsection (c)(3), take 
     additional actions authorized under this Act to establish 
     procurement requirements and incentives that provide for the 
     use of cement and concrete with increased substitution of 
     recovered mineral component in the construction and 
     maintenance of cement or concrete projects, so as to--
       ``(1) realize more fully the energy savings and 
     environmental benefits associated with increased 
     substitution; and
       ``(2) eliminate barriers identified under subsection (c).
       ``(e) Effect of Section.--Nothing in this section affects 
     the requirements of section 6002 (including the guidelines 
     and specifications for implementing those requirements).''.
       (b) Table of Contents Amendment.--The table of contents in 
     section 1001 of the Solid Waste Disposal Act (42 U.S.C. prec. 
     6901) is amended by adding after the item relating to section 
     6004 the following:

``Sec. 6005. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.''.

     SEC. 8002. USE OF GRANULAR MINE TAILINGS.

       (a) In General.--Subtitle F of the Solid Waste Disposal Act 
     (42 U.S.C. 6961 et seq.) (as amended by section 8001(a)) is 
     amended by adding at the end the following:

     ``SEC. 6006. USE OF GRANULAR MINE TAILINGS.

       ``(a) Mine Tailings.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Administrator, in 
     consultation with the Secretary of Transportation and heads 
     of other Federal agencies, shall establish criteria 
     (including an evaluation of whether to establish a numerical 
     standard for concentration of lead and other hazardous 
     substances) for the safe and environmentally protective use 
     of granular mine tailings from the Tar Creek, Oklahoma Mining 
     District, known as `chat', for--
       ``(A) cement or concrete projects; and
       ``(B) transportation construction projects (including 
     transportation construction projects involving the use of 
     asphalt) that are carried out, in whole or in part, using 
     Federal funds.
       ``(2) Requirements.--In establishing criteria under 
     paragraph (1), the Administrator shall consider--
       ``(A) the current and previous uses of granular mine 
     tailings as an aggregate for asphalt; and
       ``(B) any environmental and public health risks and 
     benefits derived from the removal, transportation, and use in 
     transportation projects of granular mine tailings.
       ``(3) Public participation.--In establishing the criteria 
     under paragraph (1), the Administrator shall solicit and 
     consider comments from the public.
       ``(4) Applicability of criteria.--On the establishment of 
     the criteria under paragraph (1), any use of the granular 
     mine tailings described in paragraph (1) in a transportation 
     project that is carried out, in whole or in part, using 
     Federal funds, shall meet the criteria established under 
     paragraph (1).
       ``(b) Effect of Sections.--Nothing in this section or 
     section 6005 affects any requirement of any law (including a 
     regulation) in effect on the date of enactment of this 
     section.''.
       (b) Conforming Amendment.--The table of contents in section 
     1001 of the Solid Waste Disposal Act (42 U.S.C. prec. 6901) 
     (as amended by section 8001(b)) is amended by adding after 
     the item relating to section 6005 the following:

``Sec. 6006. Use of granular mine tailings.''.

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