Federal Mass Transit Reauthorization Act of 1987

Federal Mass Transit Reauthorization Act of 1987 - Amends the Urban Mass Transportation Act of 1964 to authorize the Secretary of Transportation (the Secretary) (in connection with the initial funding of a mass transportation project receiving Federal assistance) to establish a basis for multi-year financing through the issuance of a multi-year project obligation to the recipient. Sets forth guidelines for the issuance of such obligations.

Prohibits the making of grants or loans for the construction of a new fixed guideway system (or extension of such system) unless the Secretary has first ensured that the applicant has prepared a proposed project evaluation containing specified information.

Authorizes appropriations for FY 1987 through 1990 for transportation projects substituted for withdrawn Interstate segments. Sets limits upon the fund amounts which the Secretary is authorized to use for FY 1987 through 1990 for grants for innovative methods in public transportation services.

States that certain sums apportioned for the urban mass transit program which remained unobligated at the end of FY 1986 shall be added to the amount available for block grant apportionments for FY 1987. Authorizes the making of block grants to implement a whole or partial program of projects.

Makes construction project grants available to finance the leasing of mass transportation service facilities. Revises the definition of associated capital maintenance items to: (1) include tires and tubes; and (2) reduce the minimum cost of such items to one-half of one percent of the current fair market value of comparable rolling stock.

States that block grant recipients shall retain the revenues received from airspace or certain fungible mass transportation items for block grant projects. Precludes the Secretary from conditioning any Federal assistance upon the use of such revenues to finance any project for which funding is sought under such Act.

Increases the amount of apportioned block grant funds which may be used for operating assistance for small urbanized areas from 95 percent to 100 percent of the funds apportioned in FY 1982. Authorizes newly urbanized areas to use the same amount of funds for operating assistance in FY 1986 through 1990 as was available during FY 1985.

Makes eligible for construction assistance: (1) any bus remanufacturing project which extends the economic life of a bus eight years or more; and (2) any project for the overhaul of rolling stock, whether or not such overhaul increases the useful life of the rolling stock. Lowers the expense threshold for associated capital maintenance items which are eligible for certain mass transportation block grants. Makes the Federal grant for any mass transportation construction project 80 percent of the net project cost.

Authorizes appropriations for FY 1987 through 1990 for the block grant program, the formula grant program for non-urbanized areas, and other specified programs. Sets forth allocation guidelines.

Directs the Secretary to report to the Congress concerning the results of a trolley service feasibility study conducted in cooperation with the City of Philadelphia, Pennsylvania.

Changes Buy American provisions to increase from 50 percent to 85 percent the domestic content requirements for certain manufacturers of buses and other rolling stock. Makes such requirements inapplicable to contracts entered into before June 1, 1986. Increases the bid price differential for foreign manufacturers from ten percent to 25 percent.