A bill to amend the Urban Mass Transportation Act of 1964 to allow certain grants to be used for the overhaul of rolling stock and for reconstruction of equipment and materials on rolling stock, and for other purposes.

Amends the Urban Mass Transportation Act of 1964 to redefine the term "construction" to include a project for the overhaul of rolling stock, whether or not such overhaul increases the useful life of such stock.

Redefines "associated capital maintenance items" (for which block grants are available) to mean any equipment and materials each of which costs no less than one-half of one percent of the current fair market value of comparable rolling stock.

States that a project for the reconstruction of any equipment and materials, each of which will have a fair market value no less than one-half of one percent of the current fair market value of comparable rolling stock, will be considered a project for construction of an associated capital maintenance item.

Provides that removal and installation activities involved in any project for acquisition or construction of an associated capital maintenance item will be considered eligible for block grant assistance.

Provides that the Federal grant for the acquisition or construction of an associated capital maintenance item shall be 80 percent of the net project cost of such project.

Prohibits Federal grants or loans for urban mass transportation unless the Secretary of Transportation determines that the applicant has sufficient capabilities to maintain the facilities and equipment, and will do so.