The US states of Iowa and Illinois have submitted a joint application for funds under the Federal Railroad Administration's high-speed intercity passenger rail (HSIPR) programme.
The funding will be used for the proposed $310m green line project from Chicago to Iowa City.
The proposed route would provide twice-daily round-trips and will carry trains travelling at speeds up to 79mp/h with an expected trip time of four hours and 58min.
The state of Iowa has allocated $11.5m for the project out of its $20m contribution.
Allocation of funding is expected to be made by 30 September and, if approved, the federal government will meet 80% of the cost or $248m.