Kerry, Specter Offer Bill to Provide Up to $8 Billion for High-Speed Rail

Sens. John Kerry, D-Mass., and Arlen Specter, R-Pa., have introduced a bill that would provide up to $8 billion of private-activity bonds for high-speed rail projects, as well as create a new category of tax-credit bonds to further encourage rail development.

The High-Speed Rail for America Act of 2008 was introduced Thursday and, if passed, would allow states to issue tax-exempt private-activity bonds for the projects outside of their PAB volume caps. The bill also would authorize the issuance of over $15 billion of the qualified rail bonds, a new type of tax-credit bond.

The bill "will help fix our crumbling infrastructure system, expand our economy, and match high-tech rail systems across the globe," said Kerry, who sits on the Senate Finance Committee.

The tax-exempt bonds could be issued over the next six years to help finance rail projects that would use trains that travel at a speed of at least 110 miles per hour.

Furthermore, there would two kinds of qualified rail bonds - super high-speed rail intercity facility bonds and rail infrastructure bonds. Under the legislation, $10 billion of super high-speed rail intercity facility bonds could be issued over 10 years, and $5.4 billion of the rail infrastructure bonds could be issued over six years. Tax-credit bonds provide the holders with tax credits in lieu of tax-exempt interest payments.

The Federal Rail Administration has already identified 10 planned rail corridors nationwide that could take advantage of these bonds, according to a release from the two lawmakers.

Both New York City Mayor Michael Bloomberg and Pennsylvania Gov. Edward Rendell have come out in support of the legislation, calling it a much-needed investment in infrastructure as well as a way to stimulate the country's economy.

"Investing in modern infrastructure is vital to the nation's long-term economic and environmental health - and in the short term, it would help put more Americans back to work," Bloomberg said. "Many countries in Europe and Asia are investing in high-speed rail, and if our economy is going to remain competitive, we have to start catching up."

The bill has been referred to the Senate Finance Committee, and it will likely be reintroduced when Congress begins its new session in January.

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Transportation industry
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