Battle continues over Brightline bonds

RELATED TOPICS: PASSENGER | BRIGHTLINE | REGULATION
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Brightline_Drawbridge_Johnston
A Miami-bound Brightline train crosses Fort Lauderdale’s New River Drawbridge on May 11, 2018.
Bob Johnston

MIAMI — Does passenger rail qualify as a surface transportation project? Former Rep. John Mica and nine current members of Congress say, “Of course it does.”

The answer seems self-evident, but five Republican congressmen, led by Rep. Brian Mast, argue that “surface transportation” only means roads. Mast’s district encompasses the so-called “Treasure Coast” north of West Palm Beach, Fla., through which Brightline’s Orlando-bound trains are set to run at 110 mph after Florida East Coast Railway tracks are upgraded.

The point is at issue because of attempts to deny Brightline access to private activity bond financing. The latest salvo in the battle was fired by Mark Meadows (R-N.C.), chairman of the House Oversight and Government Reform Subcommittee on Government Operations. He sent a letter to Transportation Secretary Elaine Chao last week as a follow-up to a combative hearing held in April when the House was not in session [“Brightline receives hostile reception in congressional hearing,” News Wire, April 20.]

In the correspondence, Meadows and four colleagues ask that the Department of Transportation suspend its already-approved allocation of $1.15 billion in private activity bonds as a means of partially financing Brightline’s expansion to Orlando International Airport.

Except for the chairman, the politicians continuing to publicly challenge Brightline mostly represent constituents from Florida counties which have collectively spent about $7 million of taxpayer money on a variety of legal hurdles designed to fight the project. One lawsuit is still pending, but the rest have been dismissed.

The letter contends:

— Federal money spent on Brightline highway-rail crossing improvements should not count as a qualifying factor for the bonds because a railroad is involved;

— The money is for crossings on FEC tracks not owned by — but leased to — Brightline;

—  Involving a railroad “circumvents the intent of Congress.”

Mica, the former Amtrak gadfly, disagrees, saying he “was involved in drafting and adoption of language … with the clear intent to establish eligibility of transportation projects which have a public benefit.” Rail was included, Mica tells Chao in a letter, “to provide a means of shifting the obligation from the taxpayer to private investors, and to encourage their subscription to help fund highway, rail, and other transportation projects.” He concludes, “It would be a setback if this first-of-its-kind project in the U.S. was not afforded this opportunity as Congress intended.”

Yet another letter to Chao, penned by House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.) and eight bipartisan members of Florida’s congressional delegation, was more blunt: “We disagree with those who suggest a rail system, whether freight or passenger, is not a ‘surface transportation project.’”

Brightline sold $600 million of the bonds to help finance upgrades to the now-operating Miami-West Palm Beach right-of-way. I successful, the tax-exempt (to buyers) bonds would be less expensive than private borrowing options or a $1.75 billion Railroad Rehabilitation & Improvement Financing loan, which Brightline is also pursuing. The company has asked the Department of Transportation to extend past May 31 the private activity bond sales deadline. 

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