WASHINGTON, D.C. — Legislation that would provide $59 billion for high-speed rail and rail infrastructure projects was approved by the U.S. House Subcommittee on Railroads.
The Railroad Infrastructure Development and Expansion Act for the 21st Century (RIDE 21) – H.R. 2950 – was introduced by U.S. Rep. Don Young (R-Alaska), Chairman of the Transportation and Infrastructure Committee, and U.S. Rep. Jack Quinn (R-NY), Chairman of the Railroads Subcommittee.
At today’s markup, an amendment in the nature of a substitute making changes to the bill to reflect negotiations with the Democratic leadership of the Committee was offered by Chairman Quinn and approved by a voice vote. The negotiations are continuing and the legislation may be amended further by the full Transportation Committee.
RIDE 21 Is A Commitment To Improving Rail Infrastructure & Developing High-Speed Rail
“RIDE 21 is an historic commitment from this Congress to improve and expand our nation’s rail infrastructure and develop a viable high-speed rail system,” said Transportation Committee Chairman Young. “This bill addresses the increasing needs of our passenger and freight rail systems and the growing congestion problems that hinder our other transportation systems.
“The bill we passed today is of vital importance to the future expansion of our nation’s rail system. It represents a constructive, good-faith effort to include the recommendations of both the Republican and Democratic leadership of this Committee.”
“The General Accounting Office has reported that Amtrak will need approximately $50 to $70 billion to build high-speed passenger rail in the United States,” said Subcommittee Chairman Quinn. “At $59 billion, this proposal offers the level of investment necessary to build an entire high-speed rail network – not just an individual corridor or region.
“This investment is provided through three components. First, RIDE-21 permits states to issue $12 billion in federal tax-exempt bonds for eligible projects over ten years, and an additional $12 billion in federal tax-credit bonds. Funding authority for development of high-speed rail corridors, under the existing Swift Rail Development Act, will be extended through fiscal year 2009. The $100 million per year will now focus on corridor development, with an increase in technology development within those corridors.
“Also the bill increases the amount of money available under the Railroad Rehabilitation and Improvement Financing (RRIF) program to $35 billion. We also eliminated all of the obstacles that have prevented this program from fulfilling its potential. The RRIF program offers some great incentives to invest in America’s rail system. This program needs to be funded at the highest levels,” said Quinn.
The Railroad Infrastructure Development & Expansion Act for the 21st Century
H.R. 2950 establishes authority for states or interstate compacts to issue $12 billion in federally tax-exempt bonds and $12 billion in federal tax-credit bonds for infrastructure improvements for high-speed passenger railroad infrastructure. Other provisions include:
* The Secretary of Transportation may approve overall corridor design that includes the following elements:
– Has in place agreement of owning freight railroad if its rights-of-way are to be used;
– Eliminates/avoids railroad grade crossings that would impede high-speed operations;
– Applies prevailing wage rate standards to construction projects;
– Has an interstate compact in place for multi-state corridors.
* The Secretary of Transportation may approve projects to complete a major portion of the infrastructure to complete a viable and comprehensive corridor for high-speed rail as defined in 49 U.S.C. sec. 26105 (including corridors designated under ISTEA/TEA-21) at 125 mph or higher.
* The Secretary of Transportation may give preference to projects that:
– Use a mix of tax-credit and tax-exempt bonds;
– Link rail passenger service with other modes of transportation;
– Are expected to have a significant impact on air traffic congestion;
– Are expected to also improve commuter rail operations;
– Have all environmental work completed and are ready to commence; or
– Have received state or local financial support.
* The Secretary may designate $1.2 billion per year for 10 years (FY 2003-12) of private-activity tax-exempt bonds, plus $1.2 billion per year for 10 years (FY 2003-12) in tax-credit bonds. Authority to designate unused annual amounts of each type of bond carries over to subsequent years.
* State and local government bonds used for high-speed rail infrastructure must be designated by the Secretary to be tax- exempt.
* Tax-exempt bond amounts are excluded from the $225 million cap on state-issued federally tax-exempt bonds.
* Potentially displaced workers are provided protection through hiring preference for positions with new providers of high- speed rail passenger service.
* States are required to submit annual reports on status of bonds and bond-funded projects.
Bill Extends Focus On High Speed Corridor Development
H.R. 2950 reauthorizes and modifies the existing Swift Rail Development Act, a program to develop high-speed rail corridors, by extending the program authority through fiscal year 2009.
* $100 million per year in general fund grants that are subject to appropriation.
* Changes funding emphasis from technology development (from $25 million per year to $30 million per year) to corridor development (previously corridor planning) (from $10 million per year to $70 million per year) and allows acquisition of locomotives, rolling stock, track and signal equipment with program grants.
Bill Expands Rail Infrastructure Loan Program
H.R. 2950 expands the existing Railroad Rehabilitation & Infrastructure Financing (RRIF) loan and loan guarantee program by increasing funding authority from $3.5 billion to $35 billion of outstanding loan principal at any time. Modifies the RRIF program in the following ways:
* Interstate compacts as well as states are eligible for assistance.
* Magnetic levitation systems as well as steel-wheel systems are eligible for assistance.
* Amount available for primary benefit of Class II and III railroads is increased from $1 billion to $7 billion out of $35 billion in total loan principal authority.
* Eliminates obstacles in the current RRIF program (structure of loan cohorts, collateral requirements, artificial limits on loan amounts, prior rejection requirement).
* The Secretary of Transportation must approve or disapprove an application within 180 days after receiving it.
* The Secretary may not assess applicant fees or other charges.
* The Secretary is required to publish review standards and criteria within 30 days after enactment.
* Applicants must apply prevailing wage rate standards to construction projects.