Texas Senators OK Rail Debt-Service Stream

DALLAS - Members of the Texas Senate Finance Committee on Thursday approved a plan to use $15 million of job-training funds to help pay debt service for what is expected to be the state's first rail bonds since the 1800s.

Proceeds from the bonds would finance an eight-mile rail spur that would link Burlington Northern Santa Fe Corp. rail lines to a soon-to-be-built $800 million truck manufacturing plant for Toyota Motor Corp. in San Antonio. The rail spur is expected to cost about $20 million and will be repaid with state and federal funds, officials said.

The proposal will be debated on the Senate floor in coming days.

The rail spur was part of a massive incentive package put together by state and local officials during Toyota's quest for a plant site. Toyota officials, who had looked at approximately six other possible locations for the highly coveted plant, wanted rail service from two separate rail companies.

Union Pacific Corp. currently serves the site, but officials from that company would not agree to allow Burlington Northern to use its rail lines. Bexar County officials opted to take advantage of a 1981 Texas law allowing the creation of rail districts with the authority to finance rail projects with revenue bonds.

The Bexar County Rural Rail District is moving forward with plans to issue bonds as quickly as possible to facilitate a 2005 opening of the plant. District officials will hear presentations on March 3 from three financial advisory firms that have been selected as finalists in a request-for-proposals process. Those firms -- Estrada Hinojosa & Co., RBC Dain Rauscher Inc., and Southwestern Capital Markets -- were selected as finalists from among seven firms that submitted proposals to be the district's financial adviser.