“(a) Establishment.—

“(1) IN GENERAL.—The head of each agency (referred to in this section as the ‘agency head’) shall carry out an assignment program (referred to in this section as the ‘program’) to allow States that are eligible under subsection (b)(1) to assume certain responsibilities of the agency under section 306108 with respect to agency actions applicable to highway projects within the State.

“(2) ASSUMPTION OF RESPONSIBILITY.—

“(A) IN GENERAL.—Subject to the other requirements of this section, on written agreement of the agency head and a State (which may be in the form of a memorandum of understanding), the agency head may assign, and the State may assume, the responsibilities of the agency head under section 306108 with respect to the undertakings of the agency described in that section that are applicable to 1 or more highway projects in the State.

“(B) ADDITIONAL RESPONSIBILITY.—

“(i) IN GENERAL.—If a State assumes responsibility under subparagraph (A), subject to clause (ii), on the request of the State, the agency head may also assign to the State, and the State may assume, the responsibilities of the agency head described in that subparagraph for 1 or more railroad, public transportation, or multimodal projects within the State.

“(ii) EXCLUSION OF PROJECTS.—In any State that assumes a responsibility of the agency head under clause (i), a recipient of assistance under chapter 53 of title 49, may submit to the agency head a request that the agency head shall maintain the responsibility of the agency head with respect to 1 or more public transportation projects carried out by the recipient in the State.

“(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 the responsibility were carried out by the agency head.

“(D) FEDERAL RESPONSIBILITY.—Any responsibility of an agency head that is not explicitly assumed by a State by written agreement under this section shall remain the responsibility of the agency head.

“(E) NO EFFECT ON AUTHORITY.—Nothing in this section preempts or interferes with any power, jurisdiction, responsibility, or authority of the Secretary, the Council, or the applicable agency, except with respect to an authority delegated by the agency head pursuant to subparagraph (A) under applicable law regarding a project or agency action described in subparagraph (A) or (B).

“(F) PRESERVATION OF FLEXIBILITY.—The agency head may not require a State, as a condition of participation in the program, to forgo a project delivery method that is otherwise permissible for a project described in subparagraph (A) or (B).

“(G) LEGAL FEES.—A State that assumes a responsibility of an agency head under this section for a project described in subparagraph (A) or (B) may use funds apportioned to the State under section 104(b)(2) of title 23, as necessary, for attorneys' fees directly attributable to eligible activities associated with the project.

“(b) State participation.—

“(1) PARTICIPATING STATES.—To be eligible to participate in the program, a State shall—

“(A) be participating in the surface transportation project delivery program under section 327 of title 23; and

“(B) assume the responsibilities of the Secretary of Transportation under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) pursuant to that section.

“(2) APPLICATION.—Not later than 270 days after the date of enactment of this section, the Secretary shall amend, as appropriate, regulations that establish requirements relating to information required 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 in accordance with the regulations described in paragraph (2) shall provide to the relevant agency head and publish notice of the intent of the State to participate in the program by 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 requirements of the State.

“(4) SELECTION CRITERIA.—The agency head may approve the application of a State under this subsection only if—

“(A) any necessary changes to regulations pursuant to paragraph (2) have been carried out;

“(B) the agency head determines that the State has the capability, including financial and personnel, to assume the responsibility; and

“(C) the head of the State agency with primary jurisdiction over highway matters enters into a written agreement with the agency head, as described in subsection (c).

“(5) OTHER AGENCY VIEWS.—If a State applies to assume a responsibility of the agency head that would have required the agency head to consult with another agency, the agency head shall solicit the views of the other agency before approving the application of the State under this subsection.

“(c) Written agreement.—A written agreement under this section shall—

“(1) be executed by—

“(A) the Governor of the applicable State; or

“(B) the top-ranking transportation official in the State who is charged with responsibility for highway construction;

“(2) be in such form as the agency head may require;

“(3) provide that the State—

“(A) agrees to assume all or part of the responsibilities of the agency head referred to 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 agency head 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;

“(4) require the State to provide to the agency head any information the agency head reasonably considers necessary to ensure that the State is adequately carrying out the responsibilities assigned to the State;

“(5) have a term of not more than 5 years; and

“(6) be renewable.

“(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 assumed by the State pursuant to 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 applicable agency head had the agency head taken the actions in question.

“(3) INTERVENTION.—The applicable agency head 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, and without further approval of, the applicable agency head, those responsibilities, until the date on which the program is terminated in accordance with subsection (j).

“(f) Limitations on agreements.—Nothing in this section permits a State to assume any rulemaking authority of the Secretary or the applicable agency head under any Federal law.

“(g) Audits.—

“(1) IN GENERAL.—To ensure compliance by a State with an agreement of the State under subsection (c) (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, the applicable agency head shall—

“(A) not later than 180 days after the date of execution of the applicable agreement, meet with the State—

“(i) to review the implementation of the agreement; and

“(ii) to discuss plans for the first annual audit;

“(B) conduct annual audits during each of the first 4 years of State participation in the program; and

“(C) ensure that the time period for completing an annual audit, from initiation to completion (including public comment and responses to those comments), does not exceed 180 days.

“(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 applicable agency head shall respond to public comments received under subparagraph (A).

“(3) AUDIT TEAM.—

“(A) IN GENERAL.—An audit conducted under paragraph (1) shall be carried out by an audit team determined by the applicable agency head, in consultation with the State, in accordance with subparagraph (B).

“(B) CONSULTATION.—Consultation with the State under subparagraph (A) shall include a reasonable opportunity for the State to review, and provide comments regarding, the proposed members of the audit team.

“(h) Monitoring.—After the end of the fourth year of the participation by a State in the program, the applicable agency head shall monitor compliance by the State with the written agreement under subsection (c), including the provision by the State of financial resources to carry out the written agreement.

“(i) Report to Congress.—The Secretary or the Council shall submit to Congress an annual report that describes the administration of the program during the preceding calendar year.

“(j) Termination.—

“(1) TERMINATION BY AGENCY.—The applicable agency head may terminate the participation of a State in the program if—

“(A) the agency head determines that the State is not adequately carrying out the responsibilities assigned to the State pursuant to this section;

“(B) the agency head provides to the State—

“(i) a notification of the determination of noncompliance;

“(ii) a period of not less than 120 days to take such corrective action as the agency head determines to be necessary to comply with the applicable agreement; and

“(iii) on request of the Governor of the State, a detailed description of each responsibility in need of corrective action regarding an inadequacy identified under subparagraph (A); and

“(C) the State, after the notification and period for corrective action provided under subparagraph (B), fails to take satisfactory corrective action, as determined by the agency head.

“(2) TERMINATION BY STATE.—The State may terminate the participation of the State in the program at any time by providing to the applicable agency head a notice, by not later than the date that is 90 days before the date of termination, subject to such terms and conditions as the agency head may provide.

“(k) Capacity building.—The Council, in cooperation with representatives of State officials, may carry out education, training, peer-exchange, and other initiatives as appropriate—

“(1) to assist States in developing the capacity to participate in the program; and

“(2) to promote information sharing and collaboration among States that are participating in the program.

“(l) Relationship to locally administered projects.—A State granted authority under this section may, as appropriate and on the request of a local government—

“(1) exercise that authority on behalf of the local government for a locally administered project; or

“(2) provide guidance and training regarding consolidating and minimizing the documentation and environmental analyses necessary for sponsors of a locally administered project to comply with—

“(A) section 306108; and

“(B) any comparable requirements under State law.”.