WASHINGTON - A bipartisan bill recently introduced by the leaders of the House Transportation and Infrastructure Committee would authorize states and interstate compacts to issue $12 billion of tax-exempt debt and $12 billion of tax-credit bonds for high-speed rail corridors over the next 10 years.
The lawmakers also sponsored a measure to provide $14.4 billion of grants for Amtrak over the next five years.
Committee chairman James L. Oberstar, D-Minn., introduced the Rail Infrastructure Development and Expansion Act for the 21st Century, or RIDE-21 Thursday, along with Reps. John Mica, R-Fla., the ranking minority member, Corrine Brown, D-Fla., chairwoman of the railroads, pipelines and hazardous materials subcommittee, and Bill Shuster, R-Pa., the panel's top minority member.
"We're expanding high-speed service with state and private partners," which makes for a "very exciting juncture in history in transportation," Mica said at a press conference on the legislation. "This sets a model. I think you'll see some pretty strong support for it."
Oberstar agreed, saying the bills incorporate a wide range of views from the committee. "It charts a route we haven't followed in the past," he said.
RIDE-21 would allow the secretary of the Department of Transportation to designate, over 10 years, $1.2 billion per year of private-activity tax-exempt bonds that could be issued outside of the private-activity bond volume cap for states, which is based on population estimates.
Private-activity bonds are debt instruments issued by state and local governments, the bond proceeds of which are used to benefit a non-public entity, such as a private company. Under tax law requirements, states are limited in the amount of private-activity bonds they can issue to $80 per resident, or $246.6 million, whichever is greater.
The bill would also allow states to issue up to $1.2 billion a year in tax-credit bonds over the same 10-year period. These are taxable bonds which allow investors to receive a tax credit against their federal income tax liability instead of a cash interest payment.
Any unused balance under the amounts authorized for these bonds and tax-credit bonds could be carried over to subsequent years.
The DOT secretary would establish preferences for projects that meet certain requirements, such as those that mix tax-credit and tax-exempt bonds, link passenger rail service to other modes of transportation, obtain state or local financial support, or reduce air traffic congestion.
The bill has been referred to the House Ways and Means Committee, which has jurisdiction over tax-related legislation.
The transportation committee has in the past offered separate high-speed rail infrastructure financing and Amtrak funding measures, which have moved through Congress at the same time, in an effort to win support for both bills. In February of 2006, the Ways and Means Committee killed similar high-speed rail legislation.
Mica and Oberstar said Thursday they are confident the bill will make it through committee, but a majority spokeswoman said it would be premature to gauge the likelihood of a full House vote.
A minority congressional staffer said there is more support for high-speed rail than ever before, and he see the Ways and Means Committee passing it. He added that, in comparison to how much money is actually needed for rail projects, $24 billion is "not that much money" and is only "a start."
The staffer said the funding would be for a kind of pilot program because realistically, the country's high-speed rail infrastructure would more likely carry a $100 billion price tag.
Meanwhile, the same four committee members as well as other lawmakers sponsored the Passenger Rail Investment and Improvement Act of 2008, which would provide $14.4 billion to Amtrak for capital and operating grants and state intercity passenger grants over five years. The bill would provide about $1.34 billion of capital grants, $606 million of operating grants, and other grants to states or Amtrak per year.
Lawmakers said the grants will bring Amtrak's Northeast Corridor to "a state of good repair." Within the $14.4 billion, $350 million yearly grants for states and/or Amtrak would be made available to finance 11 high-speed rail corridors. The bill also instructs the DOT to solicit proposals for a high-speed rail line between the District of Columbia and New York, which could include private companies.
Amtrak, which received $1.35 billion from Congress for fiscal 2008, continues to be underfunded, especially compared with rail funding in other industrialized countries, Oberstar said.
"We have an opportunity to bring something new and truly exciting and revolutionary to Amtrak," he said.