True Reinvestment for Amtrak Infrastructure in the 21st Century Act

109th CONGRESS
1st Session

H. R. 2992

To provide for the continued operation of Amtrak, to establish a program for support of certain rail infrastructure projects, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

June 20, 2005

Mr. MENENDEZ (for himself, Mr. NADLER, and Ms. SCHWARTZ of Pennsylvania) introduced the following bill; which was referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide for the continued operation of Amtrak, to establish a program for support of certain rail infrastructure projects, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `True Reinvestment for Amtrak Infrastructure in the 21st Century Act'.

(b) Table of Contents- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--AMTRAK

Sec. 101. Findings amendments.

Sec. 102. Authorization of appropriations.

Sec. 103. Labor standards.

Sec. 104. Board of Directors.

Sec. 105. Redemption of common stock.

Sec. 106. Repeal of Amtrak Reform Council.

Sec. 107. Revolving credit.

TITLE II--RAIL SERVICE CORRIDORS

Sec. 201. Enhanced Rail Service Corridor Pilot Program.

Sec. 202. Additional projects.

Sec. 203. State rail plans.

Sec. 204. Additional high-speed rail corridors.

Sec. 205. High-speed rail corridor development.

TITLE III--RAIL INFRASTRUCTURE FINANCE CORPORATION

Sec. 301. Establishment of Corporation.

Sec. 302. Board of Directors.

Sec. 303. Officers and employees.

Sec. 304. Nonprofit and nonpolitical nature of the Corporation.

Sec. 305. Purpose and activities of Corporation.

Sec. 306. Report to Congress.

Sec. 307. Administrative matters.

Sec. 308. Rail Infrastructure Finance Trust.

TITLE IV--RAIL INFRASTRUCTURE TAX CREDIT BONDS

Sec. 401. Credit to holders of qualified rail infrastructure bonds.

Sec. 402. Issuance of regulations.

Sec. 403. Effective date.

TITLE I--AMTRAK

SEC. 101. FINDINGS AMENDMENTS.

Section 24101(a) of title 49, United States Code, is amended--

(1) by redesignating paragraph (8) as paragraph (10); and

(2) by inserting after paragraph (7) the following new paragraphs:

`(8) Where Amtrak currently owns the rights-of-way over which it operates, the cost complexities and risk inherent in separating operations from infrastructure outweigh the benefits.

`(9) The Federal Government, through Amtrak, is responsible for providing funding for capital and maintenance support for the valuable interstate transportation asset that the Northeast Corridor represents.'.

SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

Section 24104 of title 49, United States Code, is amended to read as follows:

`Sec. 24104. Authorization of appropriations

`(a) In General- There are authorized to be appropriated to the Secretary of Transportation $2,000,000,000 for each of the fiscal years 2006 through 2011, for the benefit of Amtrak for capital expenditures under chapters 243, 247, and 249 of this title, operating expenses, and payments described in subsection (b).

`(b) Mandatory Payments-

`(1) IN GENERAL- Funds authorized under subsection (a) shall include--

`(A) an amount equal to the amount Amtrak is required to pay under section 3221 of the Internal Revenue Code of 1986 (26 U.S.C. 3221) that is more than the amount needed for anticipated benefits for individuals who retire from Amtrak and for their beneficiaries; and

`(B) amounts necessary to pay--

`(i) obligations of Amtrak under section 8(a) of the Railroad Unemployment Insurance Act (45 U.S.C. 358(a)) due in those fiscal years that are more than obligations of Amtrak calculated on an experience-related basis; and

`(ii) obligations of Amtrak due under section 3321 of the Internal Revenue Code of 1986 (26 U.S.C. 3321).

`(2) REQUEST FOR TRANSFER OF FUNDS- The Secretary shall make payments to the Treasury of amounts authorized under paragraph (1) only after the Secretary has received from Amtrak a request for the transfer of such funds, which shall include materials supporting, to the satisfaction of the Secretary, the amount of the request.

`(c) Contractual Obligations- From amounts appropriated pursuant to this section, the Secretary and the Amtrak Board of Directors shall ensure that sufficient funds are reserved to satisfy Amtrak's contractual obligations for commuter and State-supported passenger rail service.

`(d) Annual Business Plan and Supplemental Reports-

`(1) BUSINESS PLAN- Not later than September 15 of each of 2005, 2006, 2007, 2008, 2009, and 2010, Amtrak shall transmit to the Secretary and the Congress a comprehensive business plan for the subsequent fiscal year, including, as applicable, targets for ridership, revenues, and capital and operating expenses. The plan shall include the following:

`(A) A separate accounting of such targets for each of the following:

`(i) Northeast Corridor.

`(ii) Commuter service.

`(iii) Long-distance Amtrak service.

`(iv) State-supported service.

`(v) Commercial activities (including contract operations and mail and express).

The plan shall also include targets for each intercity train route, including Autotrain.

`(B) With respect to capital projects, a description of the work to be funded, a work timetable, cost estimates, and a list of other funding sources if the project is not entirely funded by the Federal Government.

`(2) SUPPLEMENTAL REPORTS- Not later than October 1, 2005, and once each alternate month thereafter, Amtrak shall transmit to the Secretary and the Congress a supplemental report regarding the business plan transmitted under paragraph (1), which shall describe the work completed to date, any changes to the business plan, and the reasons for such changes.

`(e) Availability of Amounts and Early Appropriations- (1) Amounts appropriated under this section remain available until expended.

`(2) Amounts for capital acquisitions and improvements may be appropriated in a fiscal year before the fiscal year in which the amounts will be obligated.

`(f) Limitations on Use- Amounts appropriated under this section may not be used to subsidize operating losses of commuter rail passenger or rail freight transportation.'.

SEC. 103. LABOR STANDARDS.

(a) Current Employee Protections- Nothing in this Act, or in any amendment made by this Act, shall affect the level of protection provided to freight railroad employees, employees of the National Passenger Railroad Corporation, and mass transportation employees as it existed on the day before the date of enactment of this Act.

(b) Labor Standards-

(1) PREVAILING WAGES- The Secretary of Transportation--

(A) shall ensure that laborers and mechanics employed by contractors and subcontractors in construction work financed in whole or in part by funds authorized by this Act or by any amendment made by this Act 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.); and

(B) may make such funds available with respect to construction work 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.).

(3) EMPLOYEE PROTECTION- The Secretary of Transportation shall require as a condition of any project financed in whole or in part by funds authorized by this Act that the project be conducted in a manner that provides a fair arrangement at least as protective of the interests of employees who are affected by the project so funded as the terms imposed under arrangements reached under section 141 of the Amtrak Reform and Accountability Act of 1997 (49 U.S.C. 24706 note).

SEC. 104. BOARD OF DIRECTORS.

Section 24302 of title 49, United States Code, is amended--

(1) in subsection (a)(2)(A)--

(A) by striking `(A)(i)' and inserting `(A)';

(B) by inserting `, 6 of whom shall be' after `7 voting members';

(C) by inserting `or until their successors are appointed, and the President of Amtrak, ex officio' after `term of 5 years'; and

(D) by striking clause (ii);

(2) in subsection (a)(2)(C)(iii), by striking `6 of the 7' and inserting `5 of the 6'; and

(3) by amending subparagraph (D) of subsection (a)(2) to read as follows:

`(D) The President of Amtrak may appoint 2 additional nonvoting members who are not current employees of Amtrak.'.

SEC. 105. REDEMPTION OF COMMON STOCK.

(a) General Authority- Section 24311(a)(1) of title 49, United States Code, is amended--

(1) by striking `or' at the end of subparagraph (A);

(2) by striking the period at the end of subparagraph (B) and inserting `; or'; and

(3) by adding at the end the following new subparagraph:

`(C) necessary to redeem its common stock outstanding as of the date of enactment of this subparagraph.'.

(b) Employee Stock Option Plans- Section 24304 of title 49, United States Code, is amended by adding at the end the following: `Amtrak may transfer to any such plan the stock redeemed from its common stockholders. Employees participating in such plans may elect one nonvoting member to Amtrak's Board of Directors.'.

SEC. 106. REPEAL OF AMTRAK REFORM COUNCIL.

Sections 203, 204, and 205 of the Amtrak Reform and Accountability Act of 1997 (42 U.S.C. 24101 note), and the items relating thereto in the table of contents of that Act, are repealed.

SEC. 107. REVOLVING CREDIT.

Amtrak is authorized to issue and sell up to $250,000,000 of obligations in the form of revolving loans and letters of credit to the Federal Financing Bank. The Secretary of Transportation shall guarantee 100 percent of the principal and interest of such obligations. Such obligations shall--

(1) have a final maturity date no later than 10 years after the date of commitment;

(2) with respect to revolving loans, shall be repaid by Amtrak on an annual basis; and

(3) with respect to letters of credit, shall be repaid on commercially reasonable terms that are acceptable to the Secretary of Transportation.

TITLE II--RAIL SERVICE CORRIDORS

SEC. 201. ENHANCED RAIL SERVICE CORRIDOR PILOT PROGRAM.

(a) Establishment- The Secretary of Transportation shall establish an Enhanced Rail Service Corridor Pilot Program to support rail infrastructure projects undertaken by States or multi-State compacts, using funding provided through the Rail Infrastructure Finance Corporation under title III.

(b) Purposes- The program established under subsection (a) shall be for the purpose of improving rail service along the rail corridors described in subsection (c), with respect to the following performance metrics:

(1) Increasing the frequency of trains along a corridor.

(2) Decreasing the travel time along a corridor.

(3) Increasing overall ridership.

(4) Increasing the overall amount of passenger-miles.

(5) Increasing the ratio of operating revenue to operating expenses.

(c) Eligible Corridors- Projects on the following 4 corridors are eligible under the pilot program established under this section:

(1) Southeast Corridor--From the District of Columbia to Jacksonville, Florida, via Richmond, Virginia, Raleigh, North Carolina, Columbia, South Carolina, and Savannah, Georgia, with branches from Raleigh, North Carolina, to Atlanta, Georgia, via Charlotte, North Carolina, and Greenville, South Carolina, and from Charlotte, North Carolina, to Charleston, South Carolina, via Columbia, South Carolina.

(2) Midwest Corridor--From Chicago, Illinois, to Detroit, Michigan; Chicago, Illinois, to Minneapolis/St. Paul, Minnesota, via Milwaukee, Wisconsin, and Madison, Wisconsin; and Chicago, Illinois, to Kansas City, Missouri, via St. Louis, Missouri.

(3) California Corridor--From the San Francisco Bay Area to San Diego via Santa Barbara and Los Angeles; from San Jose to Auburn via Oakland and Sacramento; and from Oakland to Bakersfield via Stockton.

(4) Pacific Northwest Corridor--From Eugene, Oregon, to Vancouver, British Columbia, via Portland, Oregon, and Seattle, Washington.

(d) Eligible Projects- Only the following projects are eligible under the pilot program established under this section:

(1) Planning, including activities described in section 26101(b)(1) of title 49, United States Code, and environmental impact studies.

(2) New rail line development, including right of way and infrastructure acquisition and construction of track and facilities.

(3) Track upgrades and restoration.

(4) Highway-rail grade crossing improvement or elimination.

(5) Track, infrastructure, and facility relocation.

(6) Acquisition, financing, or refinancing of locomotives and rolling stock.

(7) Intermodal and station facilities.

(8) Tunnel and bridge repair or replacement.

(9) Communications and signaling improvements.

(10) Environmental impact mitigation.

(11) Security improvements.

(e) Approved Projects- A project described in this section may receive assistance from the Rail Infrastructure Finance Corporation under title III only if the Secretary of Transportation has approved it under this subsection. The Secretary shall approve projects under this subsection only if all of the following conditions are met:

(1) The Secretary has approved under section 22505 of title 49, United States Code, a State rail plan for the corridor.

(2) A near-term (6-year) service plan is provided that includes both a market/revenue forecast and an operating expense forecast.

(3) A near-term (6-year) investment plan is provided for both infrastructure and equipment.

(4) A signed agreement, with any owner of rail infrastructure or right of way over which service under the project will be operated, is provided that authorizes the State or multi-State compact to proceed with the project.

(5) Existence is established of firm funding commitments to provide the 20 percent match for the Federal grant required under section 305(a)(4).

(6) The project meets all safety and environmental requirements, including applicable requirements under the National Environmental Policy Act of 1969.

(7) Amtrak will be the sole operator of intercity passenger rail service on the corridor.

SEC. 202. ADDITIONAL PROJECTS.

(a) Authority- The Secretary of Transportation, using funding provided through the Rail Infrastructure Finance Corporation under title III, shall, pursuant to the allocation percentages under section 305(a)(5)(A), support additional rail infrastructure improvement projects--

(1) on high-speed corridors identified under section 104(d) of title 23, United States Code;

(2) sponsored by States or multi-State compacts not at the time of the award of assistance served by Amtrak;

(3) sponsored by States or multi-State compacts served by Amtrak but not eligible for assistance under section 201 of this Act; and

(4) on the Alaska Railroad.

(b) Eligible Projects- Only projects that are described in section 201(d)(1) through (11) are eligible to receive support under this section.

(c) Approved Projects- A project described in this section may receive assistance from the Rail Infrastructure Finance Corporation under title III only if the Secretary of Transportation has approved it under this subsection. The Secretary shall approve projects under this subsection only if all of the following conditions are met:

(1) With respect to projects under subsection (a)(1) or (3)--

(A) a signed agreement, with any owner of rail infrastructure or right of way over which service under the project will be operated, is provided that authorizes the State or multi-State compact to proceed with the project;

(B) existence is established of firm funding commitments to provide the 20 percent match for the Federal grant required under section 305(a)(4);

(C) the project meets all safety and environmental requirements, including applicable requirements under the National Environmental Policy Act of 1969; and

(D) Amtrak will be the sole operator of intercity passenger rail service on the corridor.

(2) With respect to projects under subsection (a)(2) or (4)--

(B) existence is established of firm funding commitments to provide the 20 percent match for the Federal grant required under section 305(a)(4); and

(C) the project meets all safety and environmental requirements, including applicable requirements under the National Environmental Policy Act of 1969.

SEC. 203. STATE RAIL PLANS.

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

`CHAPTER 225--STATE RAIL PLANS

`Sec.

`22501. Authority.

`22502. Purposes.

`22503. Transparency; coordination; review.

`22504. Content.

`22505. Approval.

`22506. Definitions.

`Sec. 22501. Authority

`(a) In General- Each State may prepare and maintain a State rail plan in accordance with the provisions of this chapter.

`(b) Requirements- For the preparation and periodic revision of a State rail plan, a State shall--

`(1) establish or designate a State rail transportation authority to prepare, maintain, coordinate, and administer the plan;

`(2) establish or designate a State rail plan approval authority to approve the plan;

`(3) submit the State's approved plan to the Secretary of Transportation for approval; and

`(4) revise and resubmit a State-approved plan no less frequently than once every 5 years for reapproval by the Secretary.

`Sec. 22502. Purposes

`(a) Purposes- The purposes of a State rail plan are as follows:

`(1) To set forth State policy involving freight and passenger rail transportation, including commuter rail operations, in the State.

`(2) To establish the period covered by the State rail plan.

`(3) To present priorities and strategies to preserve, enhance, or expand rail service in the State that benefits the public.

`(4) To serve as the basis for Federal and State rail investments within the State.

`(b) Coordination- A State rail plan shall be coordinated with other State transportation planning goals and programs and set forth rail transportation's role within the State transportation system.

`Sec. 22503. Transparency; coordination; review

`(a) Preparation- A State shall provide adequate and reasonable notice and opportunity for comment and other input to the public, rail carriers, commuter and transit authorities operating in, or affected by rail operations within the State, units of local government, and other interested parties in the preparation and review of its State rail plan.

`(b) Intergovernmental Coordination- A State shall review the freight and passenger rail service activities and initiatives by regional planning agencies, regional transportation authorities, and municipalities within the State, or in the region in which the State is located, while preparing the plan, and shall include any recommendations made by such agencies, authorities, and municipalities as deemed appropriate by the State.

`(c) Annual Reviews- Each State shall transmit an annual report on its plan to the Secretary of Transportation. The report shall include, for the year preceding the year in which submitted, the following matters:

`(1) A review of progress made, and actions taken, under the plan during the year, including an update on the budget, schedule, and financing for each project on the freight or passenger rail capital project list compiled under section 22504(a).

`(2) Any modifications made in the plan after approval of the plan by the Secretary or after the submission of the most recent annual report on the plan to the Secretary, including any modifications made to the priority freight or passenger rail capital list required by section 22504(b).

`(d) Approval of Modified Plans- Modifications of a State rail plan that are determined substantive by the Secretary, including any modification to a priority freight or passenger rail capital project list required by section 22504(b), is subject to approval (for the purposes of this chapter) by the Secretary.

`Sec. 22504. Content

`(a) In General- Each State rail plan shall contain the following:

`(1) An evaluation of the existing overall rail transportation system and rail services and facilities within the State, a prioritization of such services and facilities in terms of their contributions to the State's rail and transportation system.

`(2) A comprehensive review of all rail lines within the State, including proposed high speed rail corridors and significant rail line segments not currently in service, containing an overview of the transportation services provided by those lines, their ownership, operating characteristics, and the general state of their infrastructure.

`(3) A statement of the State's freight and passenger rail service objectives, including minimum service levels, for rail transportation routes in the State.

`(4) A general analysis of rail's transportation, economic, and environmental impacts in the State, including congestion mitigation, trade and economic development, air quality, land-use, energy-use, and community impacts.

`(5) A long-range rail service and investment program for current and future freight and passenger services in the State that meets the requirements of subsection (b).

`(6) A statement of public financing issues for rail projects and service in the State, including a list of current and prospective capital and operating funding resources, public subsidies, State taxation, and other financial policies relating to rail service and rail infrastructure development.

`(7) A statement of rail service issues within the State, such as congestion and capacity, and current system deficiencies on a regional, intrastate, and interstate basis, that reflects consultation with neighboring States and describes any coordination of regional rail service.

`(8) A review of major passenger and freight intermodal rail connections and facilities within the State, including seaports, and prioritized options to maximize service integration and efficiency between rail and other modes of transportation within the State.

`(9) A description of new technology that relates to rail transportation within the State, including logistics and process improvements.

`(10) A review of publicly funded projects within the State to improve rail transportation safety and security, including all major projects funded under section 130 of title 23.

`(11) A performance evaluation of passenger rail services operating in the State, including possible improvements in those services, and a description of strategies to achieve those improvements.

`(12) A compilation of studies and reports on high-speed rail corridor development within the State not included in a previous plan under this chapter, and a plan for funding any recommended development of such corridors in the State.

`(13) A statement that the State is in compliance with the requirements of section 22102.

`(b) Long-Range Service and Investment Program-

`(1) PROGRAM CONTENT- A long-range rail service and investment program included in a State rail plan under subsection (a)(5) shall include the following matters:

`(A) Two ranked lists for rail capital projects, 1 for freight rail capital projects and 1 for intercity passenger rail capital projects.

`(B) A detailed funding plan for the projects.

`(2) PROJECT LIST CONTENT- The ranked list of freight and intercity passenger rail capital projects shall contain--

`(A) a description of the anticipated public and private benefits of each such project; and

`(B) a statement of the correlation between--

`(i) public funding contributions for the projects; and

`(ii) the public benefits.

`(3) CONSIDERATIONS FOR PROJECT LIST- In preparing the ranked list of freight and intercity passenger rail capital projects, a State rail transportation authority shall take into consideration the following matters:

`(A) Contributions made by non-Federal and non-State sources through user fees, matching funds, or other private capital involvement.

`(B) Rail capacity and congestion effects.

`(C) Effects to highway, aviation, and maritime capacity, congestion, or safety.

`(D) Regional balance.

`(E) Environmental impact.

`(F) Competitive and service impacts for rail carriers and shippers.

`(G) Preservation of rail service.

`(H) Economic and employment impacts.

`(I) Projected ridership and other service measures for passenger rail projects.

`(c) Waiver- The Secretary may waive any requirement of subsection (a) upon application under circumstances that the Secretary determines appropriate.

`Sec. 22505. Approval

`(a) Criteria- The Secretary may approve a State rail plan for the purposes of this chapter if--

`(1) the plan meets all of the requirements applicable to State plans under this chapter;

`(2) for each ready-to-commence project listed on the ranked list of freight and intercity passenger rail capital projects under the plan--

`(A) the project meets all safety and environmental requirements including those prescribed under the National Environmental Policy Act of 1969 (42 U.S.C. 4331 et seq.) that are applicable to the project under law; and

`(B) the State has entered into an agreement with any owner of rail infrastructure or right of way over which service under the project will be operated that authorizes the State to proceed with the project; and

`(3) the content of the plan is coordinated with--

`(A) State transportation plans developed pursuant to section 135 of title 23; and

`(B) the national rail plan, the 50-year intermodal blueprint developed under section 5503(e) of this title (if either is available), and any other transportation plan of the Federal Government that is required by law and that the Secretary considers relevant.

`(b) Procedures for State Rail Plan Submission and Approval- The Secretary shall prescribe procedures for States to submit State rail plans for review under this chapter, including standardized format and data requirements and procedures for resubmittal if a State rail plan is disapproved. The procedures shall provide for the Secretary to review a State rail plan and issue a record of decision of approval or disapproval, with comment, on such plan within 180 days after the plan is submitted.

`Sec. 22506. Definitions

`In this chapter:

`(1) PRIVATE BENEFIT- The term `private benefit' means a benefit accrued to a person or private entity, other than Amtrak, that directly improves the economic and competitive condition of that person or entity through improved assets, cost reductions, service improvements, or any other means as defined by the Secretary of Transportation. The Secretary may seek the advice of the States and rail carriers in further defining this term.

`(2) PUBLIC BENEFIT- The term `public benefit' means a benefit accrued to the public in the form of enhanced mobility of people or goods, environmental protection or enhancement, congestion mitigation, enhanced trade and economic development, improved air quality or land use, more efficient energy use, enhanced public safety or security, reduction of public expenditures due to improved transportation efficiency or infrastructure preservation, and any other positive community effects as defined by the Secretary. The Secretary make seek the advice of the States and rail carriers in further defining this term.

`(3) STATE- The term `State' means any of the 50 States and the District of Columbia.

`(4) STATE RAIL TRANSPORTATION AUTHORITY- The term `State rail transportation authority' means the State agency or official responsible under the direction of the Governor of the State or a State law for preparation, maintenance, coordination, and administration of the State rail plan.'.

(b) Clerical Amendment- The table of chapters for subtitle V of title 49, United States Code, is amended by inserting after the item relating to chapter 223 the following:

--22501'.

SEC. 204. ADDITIONAL HIGH-SPEED RAIL CORRIDORS.

Section 104(d)(2)(B) of title 23, United States Code, is amended--

(1) by striking `and' at the end of clause (iv);

(2) by striking the period at the end of clause (v) and inserting a semicolon; and

(3) by adding at the end the following new clauses:

`(vi) a Gulf of Mexico high-speed corridor from Mobile, Alabama, to San Antonio, Texas, via New Orleans, Louisiana, and Houston, Texas;

`(vii) a Mississippi River high-speed corridor from New Orleans, Louisiana, to Memphis, Tennessee, via Jackson, Mississippi; and

`(viii) a Las Vegas high-speed corridor from Los Angeles, California, to Las Vegas, Nevada.'.

SEC. 205. HIGH-SPEED RAIL CORRIDOR DEVELOPMENT.

(a) Corridor Development-

(1) AMENDMENTS- Section 26101 of title 49, United States Code, is amended--

planning

development

(B) in the heading of subsection (a), by striking `Planning' and inserting `Development';

(D) in subsection (b)(1)--

(i) by inserting `, or if it is an activity described in subparagraph (M)' after `high-speed rail improvements';

(ii) by striking `and' at the end of subparagraph (K);

(iii) by striking the period at the end of subparagraph (L) and inserting `; and'; and

(iv) by adding at the end the following new subparagraph:

`(M) the acquisition of locomotives, rolling stock, track, and signal equipment.'; and

(E) in subsection (c)(2), by striking `planning' and inserting `development'.

(2) CONFORMING AMENDMENT- The item relating to section 26101 in the table of sections of chapter 261 of title 49, United States Code, is amended by striking `planning' and inserting `development'.

(b) Authorization of Appropriations- Section 26104 of title 49, United States Code, is amended to read as follows:

`Sec. 26104. Authorization of appropriations

`(a) Fiscal Years 2006 Through 2013- There are authorized to be appropriated to the Secretary--

`(1) $70,000,000 for carrying out section 26101; and

`(2) $30,000,000 for carrying out section 26102,

for each of the fiscal years 2006 through 2013.

`(b) Funds to Remain Available- Funds made available under this section shall remain available until expended.'.

TITLE III--RAIL INFRASTRUCTURE FINANCE CORPORATION

SEC. 301. ESTABLISHMENT OF CORPORATION.

There is established a nonprofit corporation, to be known as the `Rail Infrastructure Finance Corporation'. The Rail Infrastructure Finance Corporation is not an agency or establishment of the United States Government for purposes of any Federal law, including the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939. The Corporation shall be subject to the provisions of this title and, to the extent consistent with this section, to the laws of the State of Delaware applicable to corporations not for profit.

SEC. 302. BOARD OF DIRECTORS.

(a) Appointment- The Rail Infrastructure Finance Corporation shall have a Board of Directors consisting of 9 voting members appointed by the President, by and with the advice and consent of the Senate. The President shall submit all nominations for the initial Board not less than 180 days after the date of enactment of this Act. Not more than 5 voting members of the Board may be members of the same political party.

(b) Membership Qualifications-

(1) IN GENERAL- The 9 voting members of the Board shall be appointed from among citizens of the United States (not regular full-time employees of the United States) who are eminent in the fields of rail transportation, rail financing, intermodal transportation planning, and the financing and management of large-scale, long-term public-private cooperative projects.

(2) REPRESENTATION OF SPECIFIC INTERESTS- Of the 9 voting members of the Board, 8 shall be selected as follows:

(A) 1 member from among individuals who represent the interests of freight rail transportation.

(B) 1 member from among individuals who represent the interests of intermodal transportation.

(D) 1 member from among individuals who represent the interests of the States.

(E) 1 member from among individuals who represent the interests of intercity passenger rail users.

(F) 1 member from among individuals who represent the interests of organized rail labor.

(G) 2 members from among persons who are involved in finance.

(c) Incorporation- The voting members initially appointed to the Board of Directors shall serve as incorporators and, upon the establishment of a quorum, shall take whatever actions are necessary to establish the Corporation under the laws of Delaware.

(d) Terms of Office- Voting members of the Board shall be appointed for terms of 6 years. No voting member of the Board shall be eligible to serve in excess of 2 consecutive full terms.

(e) Vacancies- A voting member of the Board appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed shall be appointed for the remainder of such term. Except as provided in subsection (f), upon the expiration of a voting member's term, the member shall continue to serve until a successor is appointed.

(f) Attendance Required- Voting members of the Board shall attend not less than 50 percent of all duly convened meetings of the Board in any calendar year. A voting member who fails to meet the requirement of the preceding sentence shall forfeit membership and the President shall appoint a new member to fill the resulting vacancy not later than 90 days after such vacancy is determined by the Chairman of the Board.

(g) President of Amtrak- The President of Amtrak shall serve as an ex officio, nonvoting member of the Board of Directors.

(h) Election of Chairman and Vice Chairman- Voting members of the Board shall annually elect 1 of their voting members to be Chairman and elect 1 or more of their voting members as a Vice Chairman or Vice Chairmen.

(i) Compensation- The voting members of the Board shall not, by reason of such membership, be considered to be officers or employees of the United States. Those voting members shall, while attending meetings of the Board or while engaged in duties related to such meetings or other activities of the Board pursuant to this Act, be entitled to receive compensation at the rate of $300 per day, including traveltime. No Board voting member shall receive compensation for service on the Board of more than $10,000 in any fiscal year. While away from their homes or regular places of business, all Board members shall be allowed travel and actual, reasonable, and necessary expenses.

(j) Meetings Open to Public- All meetings of the Board of Directors of the Corporation, including any committee of the Board, shall be open to the public under such terms, conditions, and exceptions as the Board may establish.

(k) Quorum and Proceedings- Five voting members of the Board shall constitute a quorum for the Board to conduct business. All decisions of the Board shall be entered upon the records of the Board.

SEC. 303. OFFICERS AND EMPLOYEES.

(a) In General- The Rail Infrastructure Finance Corporation shall have a President, and such other officers as may be named and appointed by the Board for terms and at rates of compensation fixed by the Board. No individual other than a citizen of the United States may be an officer of the Corporation. No officer of the Corporation may receive any salary or other compensation (except for compensation for services on boards of directors of other organizations that do not receive funds from the Corporation, on committees of such boards, and in similar activities for such organizations) from any sources other than the Corporation for services rendered during the period of his or her employment by the Corporation. Service by any officer on boards of directors of other organizations, on committees of such boards, and in similar activities for such organizations shall be subject to annual advance approval by the Board and subject to the provisions of a Statement of Ethical Conduct adopted by the Corporation. All officers shall serve at the pleasure of the Board. An officer of the corporation shall not be considered to be an officer or employee of the United States by virtue of such office.

(b) Nonpartisan Nature of Appointments- No political test or qualification shall be used in selecting, appointing, promoting, or taking other personnel actions with respect to officers, agents, or employees of the Corporation.

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

(a) Stock- The Rail Infrastructure Finance Corporation shall have no power to issue any shares of stock, or to declare or pay any dividends.

(b) No Private Benefit- No part of the income or assets of the Corporation shall inure to the benefit of any director, officer, employee, or any other individual except as salary or reasonable compensation for services.

(c) Political Activity Prohibited- The Corporation may not contribute to or otherwise support any political party or candidate for elective public office.

(d) Conflicts of Interest- No director, officer, or employee of the Corporation shall in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting his or her personal interests or the interests of any corporation, partnership, or organization in which he or she has a direct or indirect financial interest. Board members shall recuse themselves from Board decisions that directly affect either them or any company or organization that they represent or in which they have a financial interest regarding grants and other financial assistance provided to States by the Board.

SEC. 305. PURPOSE AND ACTIVITIES OF CORPORATION.

(a) Purpose-

(1) IN GENERAL- The Rail Infrastructure Finance Corporation shall, through the issuance of qualified rail infrastructure bonds in accordance with section 54 of the Internal Revenue Code of 1986 and this title, provide financial support for projects approved under sections 201 and 202.

(2) SELECTION OF PROJECTS- The Board of Directors may award grants for projects that have been approved by the Secretary of Transportation under sections 201 and 202. In selecting projects for such awards, the Board shall--

(A) give preference to projects with high levels of estimated ridership, increased on-time performance, reduced trip time, and additional service frequency;

(B) give preference to projects that encourage intermodal connectivity through direct connections between train stations, airports, bus terminals, subway stations, ferry ports, and other modes of transportation;

(C) ensure a general balance of grant funding across geographic regions of the United States, and avoid a disproportionate concentration of funding in any single Corridor;

(D) favor projects that also improve freight or commuter rail operations;

(E) favor projects that are expected to have a significant favorable impact on air or highway traffic congestion, capacity, or safety;

(F) favor projects that have significant environmental benefits;

(G) favor projects that have positive economic and employment impacts;

(H) favor projects that encourage the use of positive train control technology;

(I) favor projects that enhance national security; and

(J) favor projects that have commitments of non-Federal funding in a total amount that exceeds the minimum amount required.

(3) CONTRACT AUTHORITY- The Board shall not award contract authority under this title in an aggregate amount greater than $500,000,000 for any fiscal year. Awards shall be available for expenditure over a 6-year period.

(4) NON-FEDERAL MATCHING REQUIREMENT- Recipients of awards under this title shall provide from non-Federal sources at least 20 percent of the costs of the project for which the award is made.

(5) DISTRIBUTION OF AWARDS-

(A) IN GENERAL- Of the amounts awarded under this title for any fiscal year--

(i) 75 percent shall be for projects described in section 201;

(ii) 10 percent shall be for projects described in section 202(a)(1);

(iii) 5 percent shall be for projects described in section 202(a)(2);

(iv) 5 percent shall be for projects described in section 202(a)(3); and

(v) 5 percent shall be for projects described in section 202(a)(4).

(B) CARRYOVER- If sufficient viable applications are not available to distribute the entire amount under subparagraph (A)(i), (ii), (iii), (iv), or (v) for a fiscal year, the remainder of amounts unspent shall be available for additional awards within the same category for subsequent fiscal years.

(b) Bond Issuance Authority-

(1) IN GENERAL- In order to carry out its purposes, the Corporation is authorized to issue qualified rail infrastructure bonds (as defined in section 54(e) of the Internal Revenue Code of 1986) during the 6-year period beginning on the day after the date of enactment of this Act.

(2) LIMITATION- The total face amount of the bonds outstanding under paragraph (1) at any time may not exceed $30,000,000,000.

(3) NO FEDERAL GUARANTEE-

(A) OBLIGATIONS INSURED BY THE CORPORATION- No obligation that is insured, guaranteed, or otherwise backed by the Corporation shall be deemed to be an obligation that is guaranteed by the full faith and credit of the United States.

(B) SPECIAL RULE- This paragraph shall not affect the determination of whether such obligation is guaranteed for purposes of Federal income taxes.

(C) SECURITIES OFFERED BY THE CORPORATION- No debt or equity securities of the Corporation shall be deemed to be guaranteed by the full faith and credit of the United States.

(4) AUTHORITY- To carry out the purpose set forth in subsection (a) and engage in the activities described in subsection (b), the Corporation shall have the usual powers conferred upon a nonprofit corporation under the laws of the State of Delaware.

(c) Federal Assistance- The Corporation shall be eligible to receive discretionary grants, contracts, gifts, contributions, or technical assistance from any department or agency of the Federal Government, but only to the extent permitted by law and to the extent necessary to carry out the purpose set forth in subsection (a) and the activities described in subsection (b).

SEC. 306. REPORT TO CONGRESS.

(a) In General- Not later than May 15 of each year, the Rail Infrastructure Finance Corporation shall submit an annual report for the fiscal year ending on September 30 of the preceding year to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives. The report shall include a comprehensive and detailed report of the Corporation's operations, activities, financial condition, and accomplishments under this title and such recommendations as the Corporation considers appropriate.

(b) Availability for Testimony- The officers and directors of the Corporation shall be available to testify before those committees with respect to such report or any other matter which such committees may determine.

SEC. 307. ADMINISTRATIVE MATTERS.

(a) Budget- The Rail Infrastructure Finance Corporation shall establish an annual budget for the Corporation, including the Rail Infrastructure Investment Account under subsection (c).

(b) Implementation Plan-

(1) REQUIREMENT FOR PLAN- The Corporation shall conduct a study and prepare a plan on how the Corporation can best achieve the purposes and fulfill the requirements of this title.

(2) CONSULTATION- In preparing the plan, the Corporation may consult with representatives of State and local governments, railroads, and other similar entities.

(3) OTHER REQUIREMENTS- The plan, which shall be based on the conclusions resulting from the study conducted under paragraph (1), shall be submitted by the Corporation to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives not later than 180 days after the date on which the Corporation is incorporated. Unless directed otherwise by law, the Corporation shall implement the plan during the first fiscal year beginning after the fiscal year in which the plan is submitted to Congress.

(1) ESTABLISHMENT- The Board of Directors for the Corporation shall establish an account to be known as the Rail Infrastructure Investment Account (in this section referred to as the `Account').

(2) DEPOSIT OF BOND PROCEEDS- The Corporation shall deposit the proceeds of sales of any bonds issued under section 54 of the Internal Revenue Code of 1986 into the Account.

(3) DEPOSIT OF NON-FEDERAL CONTRIBUTIONS- The Board shall deposit all non-Federal contributions received into the Account.

(4) DISBURSEMENTS- The Board may make available and may disburse, during the first fiscal year beginning after the date of enactment of this Act and during each succeeding fiscal year thereafter, such funds as may be available for obligation and expenditure from the Account.

(5) USE OF ACCOUNT FUNDS- Funds in the Account--

(A) shall be used by the Corporation for investment purposes through the Rail Infrastructure Finance Trust established under section 308 to generate an amount sufficient--

(i) to repay the principal of the bonds at their maturity; and

(ii) to pay the administrative costs of the Corporation and the Rail Infrastructure Finance Trust; and

(B) shall, to the extent of the net spendable proceeds in the account, be held in the Rail Infrastructure Finance Trust established under section 308 and be available for distribution as grants of financial assistance for projects approved under sections 201 and 202.

(6) NET SPENDABLE PROCEEDS DEFINED- In this subsection, the term `net spendable proceeds', with respect to the Rail Infrastructure Investment Account, means the amount, determined by the Board of Trustees of the Rail Infrastructure Finance Trust, equal to the excess of--

(A) the total amount in such Account, over

(B) the amount in such Account that is needed for uses under paragraph (5)(A).

(d) Records and Audit-

(1) IN GENERAL- The Account and the Corporation shall be audited annually in accordance with generally accepted auditing standards by independent certified public accountants or independent licensed public accountants certified or licensed by a regulatory authority of a State or other political subdivision of the United States. The audits shall be conducted at the place or places where the accounts of the Corporation are normally kept. All books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Corporation and necessary to facilitate the audits shall be made available to the person or persons conducting the audits; and full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents and custodians shall be afforded to such person or persons.

(2) AUDIT REPORT- The report of each such independent audit shall be included in the annual report required by section 306. The audit report shall set forth the scope of the audit and include such statements as are necessary to present fairly the Corporation's assets and liabilities, surplus or deficit, with an analysis of the changes therein during the year, supplemented in reasonable detail by a statement of the Corporation's income and expenses during the year, and a statement of the sources and application of funds, together with the independent auditor's opinion of those statements.

(3) ACCOUNTING PRINCIPLES- Not later than 1 year after the date of enactment of this Act, the Corporation shall develop accounting principles which shall be used uniformly by all entities receiving funds under this title, taking into account organizational differences among various categories of such entities. Such principles shall be designed to account fully for all funds received and expended for purposes of this title by such entities.

(4) REQUIREMENTS FOR RECIPIENTS- Each entity receiving funds under this title shall--

(A) keep its books, records, and accounts in such form as may be required by the Corporation;

(B) either--

(i) undergo an annual audit by independent certified public accountants or independent licensed public accountants certified or licensed by a regulatory authority of a State, which audit shall be in accordance with auditing standards developed by the Corporation; or

(ii) submit a financial statement in lieu of the audit described in clause (i) if the Corporation determines that the cost burden of such audit on such entity is excessive in light of the financial condition of such entity; and

(C) furnish biennially to the Corporation a copy of the audit report or financial statement required pursuant to the subparagraph (B), as well as such other information regarding finances (including an annual financial report) as the Corporation may require.

(5) ADDITIONAL RECORDKEEPING- Any recipient of assistance by grant or contract under this title, other than a fixed price contract awarded pursuant to competitive bidding procedures, shall keep such records as may be reasonably necessary to disclose fully the amount and the disposition by such recipient of such assistance, the total cost of the project or undertaking in connection with which such assistance is given or used, and the amount and nature of that portion of the cost of the projects or undertaking supplied by other sources, and such other records as will facilitate an effective audit.

(6) ACCESS TO RECORDS- The Corporation or any of its duly authorized representatives shall have access to any books, documents, papers, and records of any recipient of assistance for the purpose of auditing and examining all funds received from the Corporation.

(7) PUBLIC INSPECTION- The Corporation shall maintain the information described in paragraphs (4), (5), and (6) at its offices for public inspection and copying for at least 3 years, according to such reasonable guidelines as the Corporation may issue. This public file shall be updated regularly.

SEC. 308. RAIL INFRASTRUCTURE FINANCE TRUST.

(a) Establishment- The Board of Directors of the Rail Infrastructure Finance Corporation shall establish the Rail Infrastructure Finance Trust (in this section referred to as the `Trust') as a trust domiciled in the State of Delaware before the issuance of bonds under section 305(b). The Trust shall, to the extent not inconsistent with this title, be subject to the laws of the State of Delaware that are applicable to trusts. The Trust shall manage and invest the assets of the Rail Infrastructure Investment Account established under section 307(c) that are transferred to it by the Board of Directors in the manner set forth in this section.

(b) Not a Federal Agency or Instrumentality- The Trust is not a department, agency, or other instrumentality of the Government of the United States and shall not be subject to title 31, United States Code.

(1) ESTABLISHMENT- The Trust shall have a Board of Trustees.

(2) COMPOSITION-

(A) APPOINTMENT- The Board of Trustees shall consist of 5 members (in this title referred to as `Trustees'), 3 of whom shall be appointed by a unanimous vote of the Board of Directors of the Rail Infrastructure Finance Corporation.

(B) REPRESENTATION OF PARTICULAR INTERESTS- The 3 members of the Board of Trustees whose unanimous appointment is required under subparagraph (A) shall be selected as follows:

(i) 1 from among persons who represent the interests of the States.

(ii) 1 from among persons who represent the interests of freight and passenger railroads.

(iii) 1 from among persons who represent the interests of classes of investors who would be reasonably expected to become holders of qualified rail infrastructure bonds issued by the Rail Infrastructure Finance Corporation.

(C) ELECTED TRUSTEES- The 2 Trustees not appointed under subparagraph (A) shall be elected directly by holders of qualified rail infrastructure bonds issued by the Rail Infrastructure Finance Corporation through procedures established by the Board of Trustees to represent the interests of such bond holders. The election shall be held, and both members elected under this subparagraph shall take office as Trustees, within 1 year after the initial issuance of bonds under section 305(b).

(3) MEMBERS NOT UNITED STATES OFFICIALS- The members of the Board of Trustees may not be considered officers or employees of the Government of the United States.

(4) QUALIFICATIONS- The Trustees shall be appointed only from among persons who have experience and expertise in the management of financial investments. No member of the Board of Directors of the Rail Infrastructure Finance Corporation is eligible to be a Trustee.

(5) TERMS- Each member of the Board of Trustees shall be appointed for a 3-year term. Any member whose term has expired may serve until such member's successor has taken office, or until the end of the calendar year in which such member's term has expired, whichever is earlier. A vacancy in the Board of Trustees shall not affect the powers of the Board of Trustees and shall be filled in the same manner as the member whose departure caused the vacancy. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed shall be appointed for the remainder of such term.

(d) Powers- The Board of Trustees shall--

(1) establish investment policies, including guidelines, and retain independent advisers to assist in the formulation and adoption of the investment guidelines;

(2) retain independent investment managers to invest the assets of the Trust in a manner consistent with such investment guidelines;

(3) invest assets in the Trust, pursuant to the policies adopted under paragraph (1);

(4) pay administrative expenses of the Trust from the assets in the Trust;

(5) transfer money to the Rail Infrastructure Investment Account, upon request of the Board of Directors of the Rail Infrastructure Finance Corporation, for bond repayment and administrative expenses of the Corporation;

(6) develop a formula, subject to approval by the Board of Directors before the issuance of bonds under section 305(b), for determining when there is a sufficient trust income stream for purposes of paragraph (7); and

(7) transfer net spendable proceeds (within the meaning of section 507(c)(6)) to the Board of Directors to be used for grants under title II after determining that adequate trust funds are available, or that there is a trust income stream sufficient, to allow the Board of Trustees to meet its obligations under paragraphs (4) and (5).

(e) Reporting Requirements and Fiduciary Standards- The following reporting requirements and fiduciary standards shall apply with respect to the Trust:

(1) DUTIES OF THE BOARD OF TRUSTEES- The Trust and each member of the Board of Trustees shall discharge the duties of the Trust and the duties of the Trustee, respectively (including the voting of proxies), with respect to the assets of the Trust solely in the interests of the Rail Infrastructure Finance Corporation and the programs funded under this title--

(A) for the exclusive purposes of--

(i) providing sufficient funds to repay qualified rail infrastructure bonds issued by the Rail Infrastructure Finance Corporation;

(ii) funding the administrative costs of the Rail Infrastructure Finance Corporation;

(iii) defraying reasonable expenses of administering the Trust; and

(iv) providing grants for projects under title II; and

(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;

(C) by diversifying investments so as to minimize the risk of large losses and to avoid disproportionate influence over a particular industry or firm, unless under the circumstances it is clearly prudent not to do so; and

(D) in accordance with Trust governing documents and instruments insofar as such documents and instruments are consistent with this title.

(2) PROHIBITIONS WITH RESPECT TO MEMBERS OF THE BOARD OF TRUSTEES- A member of the Board of Trustees may not--

(A) deal with the assets of the Trust in the Trustee's own interest or for the Trustee's own account;

(B) act in an individual or in any other capacity, in any transaction involving the assets of the Trust on behalf of a party (or represent a party) whose interests are adverse to the interests of the Trust and the Rail Infrastructure Finance Corporation; or

(C) receive any consideration for the Trustee's own personal account from any party dealing with the assets of the Trust.

(3) EXCULPATORY PROVISIONS AND INSURANCE- Any provision in an agreement or instrument that purports to relieve a Trustee from responsibility or liability for any responsibility, obligation, or duty under this title shall be void. Nothing in this paragraph shall be construed to preclude--

(A) the Trust from purchasing insurance for its Trustees or for itself to cover liability or losses occurring by reason of the act or omission of a Trustee, if such insurance permits recourse by the insurer against the Trustee in the case of a breach of a fiduciary obligation by such Trustee;

(B) a Trustee from purchasing insurance to cover liability under this section from and for his own account; or

(C) an employer or an employee organization from purchasing insurance to cover potential liability of 1 or more Trustees with respect to their fiduciary responsibilities, obligations, and duties under this section.

(4) TRUSTEES, BONDS-

(A) REQUIREMENT- Each Trustee and every person who handles funds or other property of the Trust (in this section referred to as `Trust official') shall be bonded. The bond shall provide protection to the Trust against loss by reason of acts of fraud or dishonesty on the part of any Trust official, directly or through the connivance of others.

(B) AMOUNT- The amount of a bond for a Trustee under this paragraph shall be fixed at the beginning of each fiscal year of the Trust by the Board of Directors of the Rail Infrastructure Finance Corporation. The amount may not be less than 10 percent of the amount of the funds administered by the Trust.

(i) any Trust official to receive, handle, disburse, or otherwise exercise custody or control of any of the funds or other property of the Trust without being bonded as required by this subsection;

(ii) any Trust official, or any other person having authority to direct the performance of such functions, to permit such functions, or any of them, to be performed by any Trust official, with respect to whom the requirements of this subsection have not been met; and

(iii) any person to procure any bond required by this subsection from any surety or other company or through any agent or broker in whose business operations such person has any control or significant financial interest, direct or indirect.

(f) Administrative Matters-

(1) AUTHORITY- The Board of Trustees shall have the authority to make rules to govern its operations, employ professional staff, and contract with outside advisors (including the Rail Infrastructure Finance Corporation) to provide legal, accounting, investment advisory, or other services necessary for the proper administration of this section. In the case of a contract for investment advisory services, compensation for such services may be provided on a fixed fee basis or on such other terms and conditions as are customary for such services.

(2) QUORUM AND PROCEEDINGS- Three members of the Board of Trustees shall constitute a quorum for the Board to conduct business. Investment guidelines shall be adopted by a unanimous vote of the entire Board of Trustees. All other decisions of the Board of Trustees shall be decided by a majority vote of the quorum present. All decisions of the Board of Trustees shall be entered upon the records of the Board of Trustees.

(3) COMPENSATION OF TRUSTEES AND EMPLOYEES- The salaries of the Trustees are subject to the limitations in section 302(i).

(4) COMPENSATION ARRANGEMENTS- The Board of Trustees may compensate investment advisory service providers and employees of the Trust on a fixed contract fee basis or on such other terms and conditions as are customary for such services.

(5) FUNDING- The expenses of the Trust and the Board of Trustees that are incurred under this section shall be paid from the Trust.

(g) Audit and Report-

(1) REQUIREMENT FOR ANNUAL AUDIT- The Trust shall annually engage an independent qualified public accountant to audit the financial statements of the Trust.

(2) ANNUAL MANAGEMENT REPORT- The Trust shall submit an annual management report to be included in the annual report of the Corporation required under section 306. The management report under this paragraph shall include the following matters:

(A) A statement of financial position.

(B) A statement of operations.

(D) A statement on internal accounting and administrative control systems.

(E) The report resulting from an audit of the financial statements of the Trust conducted under paragraph (1).

(F) Any other comments and information necessary to inform Congress about the operations and financial condition of the Trust.

(h) Enforcement- The Rail Infrastructure Finance Corporation may commence a civil action--

(1) to enjoin any act or practice by the Trust, its Board of Trustees, or its employees or agents that violates any provision of this title; or

(2) to obtain other appropriate relief to redress such violations, or to enforce any provisions of this title.

(i) Exemption From Tax for Rail Infrastructure Finance Trust- Subsection (c) of section 501 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(29) The Rail Infrastructure Finance Trust established under section 308 of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act.'.

TITLE IV--RAIL INFRASTRUCTURE TAX CREDIT BONDS

SEC. 401. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

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

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

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

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

`(a) Allowance of Credit- In the case of a taxpayer who holds a qualified rail infrastructure bond on a credit allowance date of such bond which occurs during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for such taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to credit allowance dates during such year on which the taxpayer holds such bond.

`(b) Amount of Credit-

`(1) IN GENERAL- The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified rail infrastructure bond is 25 percent of the annual credit determined with respect to such bond.

`(2) ANNUAL CREDIT- The annual credit determined with respect to any qualified rail infrastructure bond is the product of--

`(A) the applicable credit rate, multiplied by

`(B) the outstanding face amount of the bond.

`(3) APPLICABLE CREDIT RATE- For purposes of paragraph (2), the applicable credit rate with respect to an issue is the rate equal to an average market yield (as of the day before the date of sale of the issue) on outstanding long-term corporate debt obligations (determined under regulations prescribed by the Secretary).

`(4) CREDIT ALLOWANCE DATE- For purposes of this section, the term `credit allowance date' means--

`(A) March 15,

`(B) June 15,

`(C) September 15, and

`(D) December 15.

Such term includes the last day on which the bond is outstanding.

`(5) SPECIAL RULE FOR ISSUANCE AND REDEMPTION- In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed.

`(c) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--

`(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

`(2) the sum of the credits allowable under this part (other than this subpart and subpart C).

`(d) Credit Included in Gross Income- Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection (c)) and the amount so included shall be treated as interest income.

`(e) Qualified Rail Infrastructure Bond- For purposes of this part, the term `qualified rail infrastructure bond' means any bond issued as part of an issue if--

`(1) the bond is issued by the Rail Infrastructure Finance Corporation and is in registered form,

`(2) the term of each bond which is part of such issue does not exceed 20 years,

`(3) the payment of principal with respect to such bond is the obligation of the Rail Infrastructure Finance Corporation and not an obligation of the United States,

`(4) all proceeds from the sale of the issue are used for the purposes set forth in section 307(c)(5) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act, and

`(5) 95 percent or more of the net spendable proceeds from the sale of such issue are to be used for expenditures incurred after the date of enactment of this section for any qualified project described in section 201 or 202 of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act subject to the limitations established by that Act.

`(f) Special Rules Relating to Net Spendable Proceeds-

`(1) IN GENERAL- Subject to paragraph (2), an issue shall be treated as meeting the requirements of this subsection if, as of 6 years after the date of issuance, the issuer reasonably expects--

`(A) to award grants under section 305(a) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act in a total amount that is at least 95 percent of the net spendable proceeds of the issue for 1 or more qualified projects within the 6-year period beginning on such date,

`(B) to incur a binding commitment with a third party--

`(i) to spend at least 10 percent of the net spendable proceeds of the issue, or to commence construction, with respect to such projects within the 12-month period beginning on such date, and

`(ii) to proceed with due diligence to complete such projects, and

`(C) to expend the total amount of the net spendable proceeds of the issue.

`(2) RULES REGARDING CONTINUING COMPLIANCE AFTER 6-YEAR DETERMINATION- If at least 95 percent of the net spendable proceeds of the issue is not awarded as grants to be expended for 1 or more qualified projects within the 6-year period beginning 6 years after the date of issuance, but the requirements of paragraph (1) are otherwise met, an issue shall be treated as continuing to meet the requirements of paragraph (1) if either the requirement under subparagraph (A) or the requirements under subparagraph (B) are met, as follows:

`(A) The issuer uses all unspent proceeds from the sale of the issue to redeem bonds of the issue within 90 days after the end of such 6-year period and disburses any remaining net spendable proceeds to the Secretary of Treasury within 30 days after the end of such 6-year period.

`(B) The issuer--

`(i) awards in grants under section 305(a) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act at least 75 percent of the net spendable proceeds of the issue for 1 or more qualified projects within the 6-year period beginning 6 years after the date of issuance, and

`(ii) awards in grants under section 305(a) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act at least 95 percent of the net spendable proceeds of the issue for 1 or more qualified projects within the 7-year period beginning 6 years after the date of issuance.

`(g) Recapture of Portion of Credit Where Cessation of Compliance-

`(1) IN GENERAL- If any bond which when issued purported to be a qualified rail infrastructure bond ceases to be such a qualified bond, the issuer shall pay to the United States (at the time required by the Secretary) an amount equal to the sum of--

`(A) the aggregate of the credits allowable under this section with respect to such bond (determined without regard to subsection (c)) for taxable years ending during the calendar year in which such cessation occurs and the 2 preceding calendar years, and

`(B) interest at the underpayment rate under section 6621 on the amount determined under subparagraph (A) for each calendar year for the period beginning on the first day of such calendar year.

`(2) NONCULPABLE DISQUALIFICATIONS- If a qualified rail infrastructure bond ceases to qualify as such a bond due to action taken by the recipient of a grant made under section 305(a) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act, the issuer may seek compensation under paragraph (1) of this subsection.

`(h) Rail Infrastructure Finance Trust-

`(1) IN GENERAL- The following amounts shall be held in a trust account by the Rail Infrastructure Finance Corporation:

`(A) An amount of the proceeds from the sale of all bonds designated for purposes of this section that, when combined with amounts described in subparagraphs (B), (C), and (D), is sufficient--

`(i) to ensure the Corporation's ability to redeem all bonds upon maturity; and

`(ii) to pay the administrative expenses of the Corporation and the Rail Infrastructure Finance Trust.

`(B) The amount of any non-Federal contributions required under section 305(a)(4) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act.

`(C) The temporary period investment earnings on proceeds from the sale of such bonds.

`(D) Any earnings on any amounts described in subparagraph (A), (B), or (C).

`(2) USE OF FUNDS- Amounts in the trust account may be used only for investment purposes to generate sufficient funds to redeem qualified rail infrastructure bonds at maturity and pay the administrative expenses of the Corporation and the Trust.

`(3) USE OF REMAINING FUNDS ON TRUST ACCOUNT- If the Corporation determines that the amount in the trusts account exceeds the amount required to comply with paragraph (2), the Corporation may transfer the excess to the Rail Infrastructure Investment account to be available for awarding grants as provided for in section 307(c)(5)(B) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act.

`(4) REVERSION OF REMAINING PROCEEDS- Upon retirement of all bonds issued by the Corporation, any remaining proceeds from the sale of such bonds shall be covered into the general fund of the Treasury of the United States as miscellaneous receipts.

`(i) Other Definitions and Special Rules- For purposes of this section--

`(1) BOND- The term `bond' includes any obligation.

`(2) NET SPENDABLE PROCEEDS- The term `net spendable proceeds' has the meaning given such term in section 307(c)(6) of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act.

`(3) QUALIFIED PROJECT- The term `qualified project' means any project that is eligible for grant funding under section 201 or 202 of the True Reinvestment for Amtrak Infrastructure in the 21st Century Act.

`(4) PARTNERSHIP; S CORPORATION; AND OTHER PASS-THRU ENTITIES- Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under subsection (a).

`(5) BONDS HELD BY REGULATED INVESTMENT COMPANIES- If any qualified rail infrastructure bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.

`(6) REPORTING- Issuers of qualified rail infrastructure bonds shall submit reports similar to the reports required under section 149(e).'.

(b) Amendments to Other Code Sections-

(1) REPORTING- Subsection (d) of section 6049 of the Internal Revenue Code of 1986 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:

`(8) REPORTING OF CREDIT ON QUALIFIED RAIL INFRASTRUCTURE BONDS-

`(A) IN GENERAL- For purposes of subsection (a), the term `interest' includes amounts includible in gross income under section 54(d) and such amounts shall be treated as paid on the credit allowance date (as defined in section 54(b)(4)).

`(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A), subsection (b)(4) shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i) of such subsection.

`(C) REGULATORY AUTHORITY- The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.'.

(2) TREATMENT FOR ESTIMATED TAX PURPOSES-

(A) INDIVIDUAL- Section 6654 of such Code (relating to failure by individual to pay estimated income tax) is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection:

`(m) Special Rule for Holders of Qualified Rail Infrastructure Bonds- For purposes of this section, the credit allowed by section 54 to a taxpayer by reason of holding a qualified rail infrastructure bond on a credit allowance date shall be treated as if it were a payment of estimated tax made by the taxpayer on such date.'.

(B) CORPORATE- Section 6655 of such Code (relating to failure by corporation to pay estimated income tax) is amended by adding at the end of subsection (g) the following new paragraph:

`(5) SPECIAL RULE FOR HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS- For purposes of this section, the credit allowed by section 54 to a taxpayer by reason of holding a qualified rail infrastructure bond on a credit allowance date shall be treated as if it were a payment of estimated tax made by the taxpayer on such date.'.

(1) The table of subparts for part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

`SUBPART H--NONREFUNDABLE CREDIT FOR HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS'.

(2) Section 6401(b)(1) of such Code is amended by striking `and G' and inserting `G, and H'.

SEC. 402. ISSUANCE OF REGULATIONS.

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

SEC. 403. EFFECTIVE DATE.

The amendments made by section 401 shall apply to obligations issued after the date of enactment of this Act.

END