Iowa is planning to start its own intercity passenger rail service under an agreement signed by the Governor of the state, Chet Culver.
Under the new agreement, the state's department of transportation will responsible for the Rail Revolving Loan and Grant Fund, and the Passenger Rail Service Revolving Fund, the Progressive Railroading website reported.
An amount of $10m has been earmarked for modal transportation projects, including rail under the government's $830m programme to upgrade Iowa's infrastructure.
The state is now planning to get federal passenger rail funding under the American Recovery and Reinvestment Act.
It is also expecting to bring new passenger rail lines to the state that will connect more Iowa communities with Chicago.