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SEC. 1110. CONGESTION MITIGATION AND AIR QUALITY IMPROVEMENT PROGRAM.

    (a) Establishment of Program.--Section 149(a) of title 23, United
States Code, is amended by inserting after ``establish'' the following:
``and implement''.
    (b) Currently Eligible Projects.--Section 149(b) of such title is
amended--
        (1) by striking ``that was designated as a nonattainment area
    under section 107(d) of the Clean Air Act (42 U.S.C. 7407(d))
    during any part of fiscal year 1994'' and inserting the following:
    ``that is or was designated as a nonattainment area for ozone,
    carbon monoxide, or particulate matter under section 107(d) of the
    Clean Air Act (42 U.S.C. 7407(d)) and classified pursuant to
    section 181(a), 186(a), 188(a), or 188(b) of the Clean Air Act (42
    U.S.C. 7511(a), 7512(a), 7513(a), or 7513(b)) or is or was
    designated as a nonattainment area under such section 107(d) after
    December 31, 1997,'';
        (2) in paragraph (1)(A) by striking ``clauses (xii) and''; and
    inserting ``clause'';
        (3) in paragraph (1)(A)(ii) by striking ``an area'' and all
    that follows through the semicolon and inserting ``a maintenance
    area;'';
        (4) by striking ``or'' at the end of paragraph (3);
        (5) by striking ``standard.'' at the end of paragraph (4) and
    inserting ``standard; or''; and
        (6) by inserting after paragraph (4) the following:
        ``(5) if the program or project improves traffic flow,
    including projects to improve signalization, construct high
    occupancy vehicle lanes, improve intersections, and implement
    intelligent transportation system strategies and such other
    projects that are eligible for assistance under this section on the
    day before the date of enactment of this paragraph.''.
    (c) States Receiving Minimum Apportionment.--Section 149 of such
title is amended by striking subsection (c) and inserting the
following:
    ``(c) States Receiving Minimum Apportionment.--
        ``(1) States without a nonattainment area.--If a State does not
    have, and never has had, a nonattainment area designated under the
    Clean Air Act (42 U.S.C. 7401 et seq.), the State may use funds
    apportioned to the State under section 104(b)(2) for any project
    eligible under the surface transportation program under section
    133.
        ``(2) States with a nonattainment area.--If a State has a
    nonattainment area or maintenance area and receives funds under
    section 104(b)(2)(D) above the amount of funds that the State would
    have received based on its nonattainment and maintenance area
    population under subparagraphs (B) and (C) of section 104(b)(2),
    the State may use that portion of the funds not based on its
    nonattainment and maintenance area population under subparagraphs
    (B) and (C) of section 104(b)(2) for any project in the State
    eligible under section 133.''.
    (d) Public-Private Partnerships.--
        (1) In general.--Section 149 of such title is amended by adding
    at the end the following:
    ``(e) Partnerships With Nongovernmental Entities.--
        ``(1) In general.--Notwithstanding any other provision of this
    title and in accordance with this subsection, a metropolitan
    planning organization, State transportation department, or other
    project sponsor may enter into an agreement with any public,
    private, or nonprofit entity to cooperatively implement any project
    carried out under this section.
        ``(2) Forms of participation by entities.--Participation by an
    entity under paragraph (1) may consist of--
            ``(A) ownership or operation of any land, facility,
        vehicle, or other physical asset associated with the project;
            ``(B) cost sharing of any project expense;
            ``(C) carrying out of administration, construction
        management, project management, project operation, or any other
        management or operational duty associated with the project; and
            ``(D) any other form of participation approved by the
        Secretary.
        ``(3) Allocation to entities.--A State may allocate funds
    apportioned under section 104(b)(2) to an entity described in
    paragraph (1).
        ``(4) Alternative fuel projects.--In the case of a project that
    will provide for the use of alternative fuels by privately owned
    vehicles or vehicle fleets, activities eligible for funding under
    this subsection--
            ``(A) may include the costs of vehicle refueling
        infrastructure, including infrastructure that would support the
        development, production, and use of emerging technologies that
        reduce emissions of air pollutants from motor vehicles, and
        other capital investments associated with the project;
            ``(B) shall include only the incremental cost of an
        alternative fueled vehicle, as compared to a conventionally
        fueled vehicle, that would otherwise be borne by a private
        party; and
            ``(C) shall apply other governmental financial purchase
        contributions in the calculation of net incremental cost.
        ``(5) Prohibition on federal participation with respect to
    required activities.--A Federal participation payment under this
    subsection may not be made to an entity to fund an obligation
    imposed under the Clean Air Act (42 U.S.C. 7401 et seq.) or any
    other Federal law.''.
        (2) Determination by the secretary.--For the purposes of
    section 149(c) of title 23, United States Code, the Secretary shall
    determine in accordance with the procedures specified in section
    149(b) of such title whether water-phased hydrocarbon fuel emulsion
    technologies that consist of a hydrocarbon base and water in an
    amount not less than 20 percent by volume that reduce emissions of
    hydrocarbon, particulate matter, carbon monoxide, or nitrogen oxide
    from motor vehicles.
    (e) Study of CMAQ Program.--
        (1) In general.--The Secretary and the Administrator of the
    Environmental Protection Agency shall enter into arrangements with
    the National Academy of Sciences to complete, by not later than
    January 1, 2001, a study of the congestion mitigation and air
    quality improvement program under section 149 of title 23, United
    States Code. The study shall, at a minimum--
            (A) evaluate the air quality impacts of emissions from
        motor vehicles;
            (B) evaluate the negative effects of traffic congestion,
        including the economic effects of time lost due to congestion;
            (C) determine the amount of funds obligated under the
        program and make a comprehensive analysis of the types of
        projects funded under the program;
            (D) evaluate the emissions reductions attributable to
        projects of various types that have been funded under the
        program;
            (E) assess the effectiveness, including the quantitative
        and nonquantitative benefits, of projects funded under the
        program and include, in the assessment, an estimate of the cost
        per ton of pollution reduction;
            (F) assess the cost effectiveness of projects funded under
        the program with respect to congestion mitigation;
            (G) compare--
                (i) the costs of achieving the air pollutant emissions
            reductions achieved under the program; to
                (ii) the costs that would be incurred if similar
            reductions were achieved by other measures, including
            pollution controls on stationary sources;
            (H) include recommendations on improvements, including
        other types of projects, that will increase the overall
        effectiveness of the program;
            (I) include recommendations on expanding the scope of the
        program to address traffic-related pollutants that, as of the
        date of the study, are not addressed by the program.
        (2) Report.--Not later than January 1, 2000, the National
    Academy of Sciences shall transmit to the Secretary, the Committee
    on Transportation and Infrastructure and the Committee on Commerce
    of the House of Representatives, and the Committee on Environment
    and Public Works of the Senate a report on the results of the study
    with recommendations for modifications to the congestion mitigation
    and air quality improvement program in light of the results of the
    study.
        (3) Funding.--Before making the apportionment of funds under
    section 104(b)(2) of title 23, United States Code, for each of
    fiscal years 1999 and 2000, the Secretary shall deduct from the
    amount to be apportioned under such section for such fiscal year,
    and make available, $500,000 for such fiscal year to carry out this
    subsection.

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