[House Report 109-314]
[From the U.S. Government Publishing Office]
109th Congress Rept. 109-314
HOUSE OF REPRESENTATIVES
1st Session Part 1
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RAIL INFRASTRUCTURE DEVELOPMENT AND EXPANSION ACT FOR THE 21ST CENTURY
_______
November 18, 2005.--Ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Transportation and
Infrastructure, submitted the following
R E P O R T
[To accompany H.R. 1631]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 1631) to provide for the financing
of high-speed rail infrastructure, and for other purposes,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
Purpose of the Legislation
H.R. 1631 would authorize approximately $60 billion in
infrastructure funding for high-speed rail corridors and other
rail infrastructure. This would be divided principally between
authority for states participating in a high-speed rail
corridor to issue tax-exempt and/or tax-credit bonds, and an
expansion of the existing railroad infrastructure financing
loan program established in TEA-21 (P.L. 105-178) from $3.5
billion in authorized principal to $35 billion. H.R. 1631 would
also reauthorize and expand the existing Swift Rail Development
Act program of general fund grants for planning and technology
development related to high-speed rail corridors.
Background and Need for the Legislation
H.R. 1631 was introduced by Mr. Young (of Alaska), Mr.
Oberstar, Mr. LaTourette, and Ms. Brown (of Florida) on April
14, 2005.
Over a ten-year period, states or interstate compacts would
be permitted to issue $12 billion in federally tax-exempt bonds
and $12 billion in federal tax-credit bonds for infrastructure
improvements for high-speed passenger rail. The Secretary of
Transportation would be authorized to approve overall corridor
design. The design must include the following elements:
1. The applicant must have an agreement with the
freight railroad if the latter's rights-of-way are to
be used;
2. Railroad grade crossings that would impede high-
speed operations must not be created and must be
eliminated if existing now; and
3. An interstate compact must be in place for multi-
state corridors.
Once a design has been approved, the Secretary of
Transportation would be authorized to approve specific projects
that make a substantial contribution to providing the
infrastructure and equipment to complete a high-speed rail
corridor (including corridors designated under section
104(d)(2) of title 23, U.S. Code).
The Secretary may give preference in approving bond
financing 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 and other
support.
The Secretary would be permitted to designate $1.2 billion
per year for 10 years of private-activity tax-exempt bonds,
plus $1.2 billion per year for 10 years of tax-credit bonds.
Authority to designate unused annual amounts of each type of
bond would carry over to subsequent years. Tax-exempt bond
amounts would be excluded from the $225 million cap on state-
issued federally tax-exempt bonds. States would be required to
submit annual reports on the status of bonds issued and bond-
funded projects.
Potentially displaced workers would be provided protection
through hiring preference for positions with new providers of
high-speed rail passenger service.
In addition to the foregoing, H.R. 1631 would reauthorize
and modify the existing Swift Rail Development Act, an existing
program of federal assistance for planning and design of high-
speed rail corridors, by extending the program authority
through fiscal year 2013. The bill authorizes $100 million per
year for high-speed rail technology and corridor development.
In addition, the bill shifts the funding emphasis from
technology development (increasing the current authorization
from $25 million per year to $30 million per year) to corridor
development (previously corridor planning) (increasing the
current authorization from $10 million per year to $70 million
per year) and allows acquisition of locomotives, rolling stock,
and track and signal equipment with program funds.
H.R. 1631 also would expand the existing Railroad
Rehabilitation and Infrastructure Financing (RRIF) direct loan
and loan guarantee program by increasing funding authority from
$3.5 billion to $35 billion of outstanding loan principal at
any time.
The RRIF program would be modified as follows:
--Interstate compacts as well as states are made eligible
for assistance.
--Magnetic levitation systems as well as conventional
steel-wheel systems are eligible for assistance.
--Amount reserved for 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 beyond those authorized in the statute.
--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.
H.R. 1631 provides nearly $60 billion in new funding for
high speed rail and other forms of rail transportation. States
will select and design their own corridors and choose the
appropriate technology, as well as the financing mechanism,
whether tax-credit or tax-exempt bonds, loans, loan guarantees,
orSwift Act grants, or a combination of these. The Swift Act
will be expanded to include not just infrastructure, but the purchase
of trains. The RRIF program will be expanded tenfold and impediments to
the existing program will be removed. This legislation protects the
interests of railroad employees and existing collective arrangements
with rail carriers. The Committee believes that H.R. 1631 is crucial to
the future of our nation's rail system.
Summary of the Legislation
Section 1. Short title
Section 1 names the bill the ``Rail Infrastructure
Development and Expansion Act for the 21st Century.''
Section 2. High-speed intercity rail facility bonds
Section 2 amends Chapter 261 of Title 49 by adding Section
26106, which empowers the Secretary of Transportation to
designate bonds for funding the development of high-speed rail
in the United States, and amends the table of contents of this
Chapter to reflect the addition of Section 26106. Under section
26106, the Secretary may designate two types of bonds: private-
activity bonds, the interest on which is exempt from federal
taxes, and tax-credit bonds, on which the government provides
the holder a credit rather than the issuer paying interest to
the holder. The Subsections of Section 26106 are summarized
below.
Subsection (a) provides that the Secretary of
Transportation may designate high-speed rail infrastructure
bonds if six requirements are met.
First, a State, group of States, or compact of
States, depending on the circumstances, must be the proposed
issuer of the bonds.
Second, the bonds must finance projects that make
a substantial contribution to providing the infrastructure and
equipment required to eventually complete a high-speed rail
transportation corridor design that the Secretary has
determined viable. Those projects include, but are not limited
to, some specifically enumerated projects types such as
financing or refinancing equipment and capital improvements,
eliminating grade crossings, or station rehabilitation or
construction. The Secretary must also determine that the
projects are part of a viable and comprehensive corridor design
for intercity passenger rail. The ``substantial contribution''
requirement precludes projects that do not substantially
advance the overall corridor towards high-speed rail
transportation. The provision does permit an incremental
approach to developing the corridor, both as to geographic
scope and cruising speed increase.
Third, if the rail corridor includes the use of
rights-of-way owned by a freight railroad, the state applicant
must demonstrate that it has entered into a written agreement
with such freight railroad regarding the use of the rights-of-
way, and that collective bargaining agreements with freight
railroad employees (including terms regarding the contracting
of work) shall remain in full force and effect.
Fourth, the corridor design submitted by the
applicant must eliminate railroad grade crossings that would
impede high-speed rail operations.
Fifth, the applicant must comply with the existing
Amtrak prevailing wage standards and the labor protection
benefits applicable under current law to the RRIF rail loan
program.
Sixth, the applicant must agree not to pay the
principal or interest on any bonds using funds from the Highway
Trust Fund, except as permitted by law on the date of
enactment.
Subsection (b) limits the amount of bonds the Secretary may
designate to be issued in each year to $1.2 billion per year
from 2004 to 2013 of private activity, federal tax-exempt bonds
and $1.2 billion per year from 2004 to 2013 of tax-credit
bonds. This section also provides that any amount that the
Secretary does not designate in a year may be carried over and
designated in subsequent years.
Subsection (c) provides that when designating bonds, the
Secretary shall give preference to projects that (1) are funded
through a combination of both tax-exempt and tax-credit bonds;
(2) propose to link rail passenger service to other passenger
transportation modes, such as public transportation or air
service; (3) expect to have a significant impact on air traffic
congestion; (4) expect to also improve commuter rail
operations; (5) have completed all environmental work and the
project is ready to begin construction; and (6) have received
all financial commitments and other support from state and
local governments.
Subsection (d) streamlines the designation process by
requiring that the Secretary grant or deny the applicant's
request within 9 months after receiving the application.
Subsection (e) requires the issuer of the bonds to report
annually to the Secretary. That report must include statements
about the terms of the outstanding designated bonds and about
the progress made on the project financed with the bonds. In
addition, it requires the Secretary, in consultation with the
Secretary of the Treasury, to submit to the Congress an annual
report on the program and the bonds designated.
Subsection (f) addresses the tax treatment of tax-exempt
bonds designated by the Secretary and issued by a State,
States, or compact of States. In particular, it provides that
the interest on those bonds is exempt from federal taxation.
This subsection also exempts bonds issued pursuant to the
Secretary's designation from any cap in the Internal Revenue
Code on the amount of federal tax-exempt bonds a State may
issue in one year.
Subsection (g) imposes certain requirements on the use of
bond proceeds for refinancing projects.
Subsection (h) makes entities providing intercity high-
speed rail passenger service (including magnetic levitation
systems) that use property acquired through bonds designated by
the Secretary subject to rail statutes, such as the Railway
Labor Act and the Railroad Retirement Act of 1974. Any entity
providing high-speed rail service commencing after the date of
enactment which replaces another intercity carrier must enter a
collective bargaining agreement covering employees of the
displaced carrier. It further provides for priority hiring by
new entities providing intercity high-speed rail passenger
service of workers of an incumbent rail passenger provider who
are displaced because of projects financed by bonds designated
by the Secretary. It also establishes a process for
implementing such hiring priority, pay, work rules and working
conditions. A process for negotiating new labor arrangements is
also provided.
Subsection (i) requires the Secretary to issue implementing
regulations within 6 months after enactment.
Subsection (j) defines the terms regarding (1) tax-exempt
bonds and (2) tax-credit bonds.
Section 3. Tax credit to holders of qualified high-speed rail
infrastructure bonds
Section 3 adds a new subpart to Part IV of subchapter A of
chapter 1 of the Internal Revenue Code to create the tax-credit
bonds that the Secretary may designate pursuant to the newly
created Section 26106 of Title 49.
Section 4. High-speed rail corridor development
Section 4 reauthorizes the Swift Rail Development Act
(``Swift Act'') and makes some technical amendments.
Subsection (a) amends the Swift Act to address ``corridor
development'' rather than ``corridor planning.'' It also
authorizes the acquisition of track, signals, rail rolling
stock and locomotives under the program.
Subsection (b) reauthorizes the Swift Act at $100 million
per year from Fiscal Year 2004 through Fiscal Year 2013. Of
this $100 million, $70 million is for corridor development
activities and $30 million is for technology development
activities.
Section 5. Rehabilitation and improvement financing
This Section makes technical amendments to the Railroad
Revitalization and Regulatory Reform Act of 1976 and provides
for $35 billion in direct and guaranteed loans for financing
rail capacity improvements through the Railroad Rehabilitation
and Infrastructure Financing (``RRIF'') program.
Certain technical amendments are necessary because only a
small number of loans have been issued since the Transportation
Equity Act for the 21st Century created the program in 1998 as
a successor to the 1976 program established by Section 511 of
the 4R Act. These technical amendments remove barriers that
have prevented the program from working as Congress intended.
Subsection (a) amends the definition of ``railroad'' to
include modern high-speed ground transportation technology such
as magnetic levitation.
Subsection (b) amends the scope of entities that are
eligible to participate in the RRIF program by including
interstate compacts.
Subsection (c) authorizes the RRIF program at $35 billion
in outstanding principal at any one time, with $7 billion set
aside for non-Class I railroads. It also provides that the
Secretary shall not establish any a priori limit on the amount
of one loan or loan guarantee issued under the program.
Subsection (d) amends the structure of the loan cohorts,
making the program more flexible and usable by railroads.
Subsection (e) clarifies that the applicant for a loan or
loan guarantee under this program does not have to provide
collateral (other than as an optional means of reducing a
credit risk premium) or to demonstrate that it has sought other
financial assistance before applying under the program, but
must address certain labor issues.
Subsection (f) establishes a deadline of 90 days after the
applicant submits an application for the Secretary to issue a
decision approving or disapproving an application.
Subsection (g) prohibits the Secretary from assessing fees
or charges (other than the investigative charge already
explicitly authorized) against an applicant under the RRIF
program.
Subsection (h) requires the Secretary, within 30 days after
enactment of the bill, to make publicly available and to
publish on the Department's website the substantive criteria
and standards used by the Secretary in rendering a decision to
approve or disapprove an application. This subsection does not
require a newrulemaking by the Secretary. Rather, it requires
the Secretary to publish the criteria already in use, and to continue
to make the criteria publicly available, even if amended or revised in
the future.
Legislative History and Committee Consideration
No hearings were held by the Committee on H.R. 1630 (H.R.
1631's immediate predecessor) in the 108th Congress. However,
extensive hearings were conducted on a predecessor bill, H.R.
2950, in the 107th Congress. In the 108th Congress, the
Committee reported such legislation to the House (H.R. 2950).
In the 109th Congress, the Full Committee met in open
session on April 27, 2005, and favorably reported H.R. 1631 by
voice vote. Subsequent to that action by the Committee, the
content of Sections 4 and 5 was enacted into law as Sections
9001 and 9003 of the Safe, Accountable, Flexible, Efficient
Transportation Act: A Legacy for Users Act [Public Law 109-59,
119 Stat. 1144 (Aug. 10, 2005)].
Roll Call Votes
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each roll call vote on a motion
to report and on any amendment offered to the measure or
matter, and the names of those members voting for and against.
There were no roll call votes.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
Cost of Legislation
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Compliance with House Rule XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
308(a) of the Congressional Budget Act of 1974, the Committee
references the report of the Congressional Budget Office
included below.
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
performance goals and objective of this legislation establishes
a goal of State-directed construction of high-speed rail
corridors, as well as rehabilitation and improvement of rail
infrastructure generally. States are permitted to establish
their own timetable and performance goals in building high-
speed corridors, and railroads (or joint ventures including
railroads) are permitted to establish their own priorities in
seeking direct or guaranteed loan funding.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
1631 from the Director of the Congressional Budget Office.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 12, 2005.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1631, the Rail
Infrastructure Development and Expansion Act for the 21st
Century.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lisa Cash
Driskill.
Sincerely,
Elizabeth M. Robinson
(For Douglas Holtz-Eakin, Director).
Enclosure.
H.R. 1631--Rail Infrastructure Development and Expansion Act for the
21st Century
Summary: H.R. 1631 would authorize states to issue $12
billion in tax-exempt bonds and $12 billion in tax-credit bonds
to finance infrastructure for high-speed-rail transportation
projects. The Joint Committee on Taxation (JCT) estimates that
those two provisions would lower revenues by $854 million over
the 2006-2010 period and by about $4.2 billion over the next 10
years.
In addition to authorizing the bonds, H.R. 1631 would
expand the Railroad Rehabilitation and Improvement Financing
(RRIF) program. This program authorizes the Federal Railroad
Administration (FRA) to provide direct loans and loan
guarantees for the development of railroad infrastructure. H.R.
1631 would raise the ceiling on the total amount of outstanding
loans or loan guarantees authorized under the RRIF program from
$3.5 billion to $35 billion. CBO estimates that additional
direct spending under this provision would be insignificant
until after 2015. Pursuant to section 407 of H. Con. Res. 95
(the Concurrent Resolution on the Budget, Fiscal Year 2006),
CBO estimates that enacting H.R. 1631 would be unlikely to
cause an increase in direct spending greater than $5 billion in
any of the next four 10-year periods after 2015.
Finally, H.R. 1631 would authorize the appropriation of
$100 million each year over the 2006-2013 period to provide
grants to public agencies for developing high-speed-rail
corridors and for improving the technology for high-speed-rail
systems. Assuming appropriation of the authorized amounts, CBO
estimates that implementing those provisions would cost $253
million over the 2006-2010 period and another $547 million
after 2010.
CBO has reviewed the nontax provisions of H.R. 1631 and
determined that they contain no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA); any costs to state, local, or tribal governments would
be incurred voluntarily.JCT has reviewed section 3 of H.R. 1631
and has determined that those provisions contain no intergovernmental
or private-sector mandates as defined in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1631 is shown in the following table.
The costs of this legislation fall within budget function 400
(transportation).
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By fiscal year, in millions of dollars--
--------------------------------------------------
2005 2006 2007 2008 2009 2010
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CHANGES IN REVENUES
Estimated Revenues........................................... 0 -18 -74 -154 -251 -357
SPENDING SUBJECT TO APPROPRIATION \1\
Spending Under Current Law for High-Speed-Rail Programs:
Budget Authority \2\..................................... 19 0 0 0 0 0
Estimated Outlays........................................ 29 24 18 13 6 0
Proposed Changes:
Authorization Level...................................... 0 100 100 100 100 100
Estimated Outlays........................................ 0 14 26 42 71 100
Spending Under H.R. 1631 for High-Speed-Rail Programs:
Authorization Level \2\.................................. 19 100 100 100 100 100
Estimated Outlays........................................ 29 38 44 55 77 100
----------------------------------------------------------------------------------------------------------------
\1\ Enacting the bill also would increase direct spending, but CBO estimates those effects would not be
significant over the 2006-2015 period.
\2\ The 2005 level is the amount appropriated for that year.
Sources. Congressional Budget Office and the Joint Committee on Taxation.
Basis of estimate: Enacting H.R. 1631 would lower revenues
by authorizing states to sell tax-exempt and tax-credit bonds.
Implementing H.R. 1631 would increase spending on grants to
develop high-speed-rail corridors and improvements in
technology for high-speed rail. This spending would be subject
to appropriation. Enacting H.R. 1631 would increase direct
spending after 2015 by expanding the RRIF program.
Revenues
Enacting H.R. 1631 would lower revenues to the federal
government by authorizing states to issue $12 billion in tax-
exempt and tax-credit bonds. The 10-year cost of the bond
provisions is summarized in the following table.
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Tax-Exempt Bonds................................................ -4 -16 -32 -51 -71 -92 -112 -131 -149 -168
Tax-Credit Bonds................................................ -14 -58 -122 -200 -286 -376 -461 -541 -617 -694
---------------------------------------------------------------------------------------
Total Changes in Revenues................................. -18 -74 -154 -251 -357 -468 -573 -672 -766 -862
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Bonds. H.R. 1631 would authorize states to issue
$1.2 billion in tax-exempt bonds each year over the 2006-2015
period, and states would use the bond proceeds to finance
infrastructure for high-speed-rail projects. States would pay
both principal and interest to bondholders; however, interest
on the tax-exempt bonds would be excluded from federal income
taxes, lowering revenues to the federal government. JCT
estimates that the additional tax-exempt bonds that would be
authorized under the bill would lower revenues by $174 million
over the 2006-2010 period and by $826 million over the next 10
years.
Tax-Credit Bonds. H.R. 1631 would authorize states to issue
$1.2 billion in tax-credit bonds each year over the 2006-2015
period and use the bond proceeds to finance infrastructure for
high-speed-rail projects. States would repay only the principal
to bondholders; the federal government would provide interest
to the bondholders in the form of credits against their federal
income tax liability, thus lowering revenues to the federal
government.\1\ JCT estimates that the tax-credit bonds would
lower revenues by $680 million over the 2006-2010 period and by
$3.4 billion over the next 10 years.
---------------------------------------------------------------------------
\1\ Providing tax credits has the same impact on the federal budget
as outlays for interest costs. For a more complete discussion of the
potential use of tax-credit bonds for transportation programs, see A
Comparison of Tax-Credit Bonds, Other Special-Purpose Bonds, and
Appropriations in Financing Federal Transportation Programs,
Congressional Budget Office, June 2003, available at www.cbo.gov.
---------------------------------------------------------------------------
Spending subject to appropriation
For this estimate, CBO assumes that H.R. 1631 will be
enacted this fall and that amounts authorized will be
appropriated for each year. Outlay estimates are based on
historical spending patterns and information from FRA.
High-Speed-Rail Corridors. Under current law, FRA provides
grants to public agencies for planning corridors for high-
speed-rail projects. H.R. 1631 would authorize the
appropriation of $70 million each year over the 2006-2013
period for this program, and the bill would allow agencies to
use grants for acquiring locomotives, rolling stock, track, and
signal equipment. CBO estimates that extending this grant
program would cost $177 million over the 2006-2010 period and
another $383 million after 2010, assuming appropriation of the
authorized funds.
Technology for High-Speed Rail. H.R. 1631 would authorize
the appropriation of $30 million each year over the 2006-2013
period to continue FRA's program aimed at improving high-speed-
rail technology. CBO estimates this provision would cost $76
million over the 2006-2010 period and another $164 million
after 2010, assuming appropriation of the authorized funds.
Direct spending
Under the RRIF program, FRA provides direct loans and loan
guarantees for the development of railroad infrastructure. H.R.
1631 would increase the total amount of outstanding loans or
loan guarantees authorized under the RRIF program from $3.5
billion to $35 billion. CBO estimates that the RRIF program
operates at a net cost to the federal government; however,
because we expect that the total level of loans and loan
guarantees is unlikely to exceed the program's existing
authority until after 2015, CBO estimates that enacting H.R.
1631 would not result in any significant additional costs for
this program over the next 10 years.
Under the RRIF program, borrowers can pay a premium to the
government to cover the estimated subsidy cost of their loans,
thus securing a loan or loan guarantee without further
appropriation. After borrowers have repaid their loans, current
law requires the government to return the amount of premiums
that exceeded the actual subsidy cost of their loans and
guarantees. The government is not authorized to collect
additional money, however, if the premiums do not fully cover
the subsidy cost of the loans and loan guarantees. This
asymmetry in the program structure is the reason why CBO
expects that RRIF is likely to have a net cost to the
government over many years. The actual subsidy cost of each
loan or loan guarantee made under the RRIF program may be
higher or lower than what FRA initially collects from the
borrower; however, after the excess premiums have been repaid,
some premiums may be lower than the actual subsidy cost, but
none will be higher.
The RRIF program was authorized in 1998 by the
Transportation Equity Act for the 21st Century. Since 1998, FRA
has approved 10 loans and disbursed $425 million. Based on
information from FRA, railroad associations, and railroads, CBO
does not expect that FRA will disburse more than the $3.5
billion in loan principal authorized under current law before
2015. The bill would restrict the Administration from requiring
applicants to offer collateral or seek financial assistance
from other sources before applying for credit under RRIF.
Although those changes to the program might increase demand for
credit under RRIF, CBO expects that over the next 10 years,
railroads are still likely to apply for relatively small loans
in comparison to the size of the program under current law.
Although costs after 2015 could be significant, CBO
estimates that enacting the bill would be unlikely to cause an
increase in direct spending greater than $5 billion in any of
the four 10-year periods following 2015. While the amount of
loans and guarantees made in the decades after 2015 might total
more than $30 billion, the budgetary impact would be a much
smaller amount because only the subsidy cost would appear as an
outlay on the budget.
Intergovernmental and private-sector impact: CBO has
reviewed the nontax provisions of H.R. 1631 and determined that
they contain no intergovernmental or private-sector mandates as
defined in UMRA. States that would be authorized to issue
federally tax-exempt and tax-credit bonds would be
participating in a voluntary federal program; any costs they
face would be incurred voluntarily. State and local governments
generally would benefit from using bonds, grants, loans, and
loan guarantees to finance high-speed-rail projects.
JCT has determined that the tax provisions in H.R. 1631
contain no intergovernmental or private-sector mandates as
defined in UMRA.
Estimate prepared by: Federal Costs: Lisa Cash Driskill;
Impact on State, Local, and Tribal Governments: Sarah Puro;
Impact on the Private Sector; Jean Talarico.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to clause (3)(d)(1) of rule XIII of the Rules of
the House of Representatives, committee reports on a bill or
joint resolution of a public character shall include a
statement citing the specific powers granted to the Congress in
the Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under article I, section 8 of the Constitution.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act. (Public Law 104-4).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1994
requires the report of any Committee on a bill or joint
resolution to include a statement on the extent to which the
bill or joint resolution is intended to preempt state, local or
tribal law. The Committee states that H.R. 1631 does not
preempt any state, local, or tribal law.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act. (Public Law
104-1).
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 49, UNITED STATES CODE
* * * * * * *
SUBTITLE V--RAIL PROGRAMS
* * * * * * *
PART D--HIGH-SPEED RAIL
* * * * * * *
CHAPTER 261--HIGH-SPEED RAIL ASSISTANCE
Sec.
26101. Corridor [planning] development.
* * * * * * *
26106. High-speed rail infrastructure bonds.
* * * * * * *
Sec. 26101. Corridor [planning] development
(a) Corridor [Planning] Development Assistance.--(1) The
Secretary may provide under this section financial assistance
to a public agency or group of public agencies for corridor
[planning] development for up to 50 percent of the publicly
financed costs associated with eligible activities.
(2) No less than 20 percent of the publicly financed costs
associated with eligible activities shall come from State and
local sources, which State and local sources may not include
funds from any Federal program.
(b) Eligible Activities.--(1) A corridor [planning]
development activity is eligible for financial assistance under
subsection (a) if the Secretary determines that it is necessary
to establish appropriate engineering, operational, financial,
environmental, or socioeconomic projections for the
establishment of high-speed rail service in the corridor and
that it leads toward development of a prudent financial and
institutional plan for implementation of specific high-speed
rail improvements, or if it is an activity described in
subparagraph (M). Eligible corridor [planning] development
activities include--
(A) * * *
* * * * * * *
(F) coordination with State and metropolitan area
transportation planning and corridor [planning]
development with other States;
* * * * * * *
(K) preparation of financing plans and prospectuses;
[and]
(L) creation of public/private partnerships[.]; and
(M) the acquisition of locomotives, rolling stock,
track, and signal equipment.
(2) No financial assistance shall be provided under this
section for corridor [planning] development with respect to the
main line of the Northeast Corridor, between Washington,
District of Columbia, and Boston, Massachusetts.
(c) Criteria for Determining Financial Assistance.--Selection
by the Secretary of recipients of financial assistance under
this section shall be based on such criteria as the Secretary
considers appropriate, including--
(1) * * *
(2) the extent to which the proposed [planning]
development focuses on systems which will achieve
sustained speeds of 125 mph or greater;
* * * * * * *
[Sec. 26104. Authorization of appropriations
[(a) Fiscal Year 1995.--There are authorized to be
appropriated to the Secretary $29,000,000 for fiscal year 1995,
for carrying out sections 26101 and 26102 (including payment of
administrative expenses related thereto).
[(b) Fiscal Year 1996.--(1) There are authorized to be
appropriated to the Secretary $40,000,000 for fiscal year 1996,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$30,000,000 for fiscal year 1996, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(c) Fiscal Year 1997.--(1) There are authorized to be
appropriated to the Secretary $45,000,000 for fiscal year 1997,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$40,000,000 for fiscal year 1997, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(d) Fiscal Year 1998.--(1) There are authorized to be
appropriated to the Secretary $10,000,000 for fiscal year 1998,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$25,000,000 for fiscal year 1998, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(e) Fiscal Year 1999.--(1) There are authorized to be
appropriated to the Secretary $10,000,000 for fiscal year 1999,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$25,000,000 for fiscal year 1999, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(f) Fiscal Year 2000.--(1) There are authorized to be
appropriated to the Secretary $10,000,000 for fiscal year 2000,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$25,000,000 for fiscal year 2000, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(g) Fiscal Year 2001.--(1) There are authorized to be
appropriated to the Secretary $10,000,000 for fiscal year 2001,
for carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the Secretary
$25,000,000 for fiscal year 2001, for carrying out section
26102 (including payment of administrative expenses related
thereto).
[(h) Funds to Remain Available.--Funds made available under
this section shall remain available until expended.]
Sec. 26104. Authorization of appropriations
(a) Fiscal Years 2006 Through 2013.--There are authorized to
be appropriated to the Secretary--
(1) $70,000,000 for carrying out section 26101; and
(2) $30,000,000 for carrying out section 26102,
for each of the fiscal years 2006 through 2013.
(b) Funds to Remain Available.--Funds made available under
this section shall remain available until expended.
* * * * * * *
Sec. 26106. High-speed rail infrastructure bonds
(a) Designation.--The Secretary may designate bonds for
purposes of subsection (f) or section 54 of the Internal
Revenue Code of 1986 if--
(1) the bonds are to be issued by--
(A) a State, if the entire railroad passenger
transportation corridor containing the
infrastructure project to be financed is within
the State;
(B) 1 or more of the States that have entered
into an agreement or an interstate compact
consented to by Congress under section 410(a)
of Public Law 105-134 (49 U.S.C 24101 nt); or
(C) an agreement or an interstate compact
described in subparagraph (B);
(2) the bonds are for the purpose of financing--
(A) projects that make a substantial
contribution to providing the infrastructure
and equipment required to complete a high-speed
rail transportation corridor (including
projects for the acquisition, financing, or
refinancing of equipment and other capital
improvements, including the introduction of new
high-speed technologies such as magnetic
levitation systems, track or signal
improvements, the elimination of grade
crossings, development of intermodal
facilities, improvement of train speeds or
safety, or both, and station rehabilitation or
construction), but only if the Secretary
determines that the projects are part of a
viable and comprehensive high-speed rail
transportation corridor design for intercity
passenger service, including a design for
minimally operable segments of a corridor
designated under section 104(d)(2) of title 23,
United States Code; or
(B) projects for the Alaska Railroad;
(3) for a railroad passenger transportation corridor
design that includes the use of rights-of-way owned by
a freight railroad, a written agreement exists between
the applicant and the freight railroad regarding such
use and ownership, including compensation for such use
and assurances regarding the adequacy of infrastructure
capacity to accommodate both existing and future
freight and passenger operations, and including an
assurance by the freight railroad that collective
bargaining agreements with the freight railroad's
employees (including terms regulating the contracting
of work) shall remain in full force and effect
according to their terms for work performed by the
freight railroad on such railroad passenger
transportation corridor;
(4) the corridor design eliminates existing railway-
highway grade crossings that the Secretary determines
would impede high-speed rail operations;
(5) the applicant agrees to comply with--
(A) the standards of section 24312, as in
effect on September 1, 2002, with respect to
the project in the same manner that the
National Railroad Passenger Corporation is
required to comply with such standards for
construction work financed under an agreement
made under section 24308(a); and
(B) the protective arrangements established
under section 504 of the Railroad
Revitalization and Regulatory Reform Act of
1976 (45 U.S.C. 836) with respect to employees
affected by actions taken in connection with
the project to be financed by the bond; and
(6) the applicant agrees not to pay the principal or
interest on the bonds using funds derived directly or
indirectly from the Highway Trust Fund, except as
permitted by law as of the date of the enactment of
this section.
(b) Bond Amount Limitation.--
(1) In general.--The amount of bonds designated under
this section may not exceed--
(A) in the case of subsection (f) bonds,
$1,200,000,000 for each of the fiscal years
2006 through 2015; and
(B) in the case of section 54 bonds,
$1,200,000,000 for each of the fiscal years
2006 through 2015.
(2) Carryover of unused limitation.--If for any
fiscal year the limitation amount under subparagraph
(A) or (B) of paragraph (1) exceeds--
(A) with respect to subparagraph (A) of
paragraph (1), the amount of subsection (f)
bonds issued during such year; or
(B) with respect to subparagraph (B) of
paragraph (1), the amount of section 54 bonds
issued during such year,
the limitation amount under subparagraph (A) or (B) of
paragraph (1), as the case may be, for the following
fiscal year (through fiscal year 2019) shall be
increased by the amount of such excess.
(c) Preference.--The Secretary shall give preference to the
designation under this section of bonds for projects--
(1) to be funded through a combination of subsection
(f) bonds and section 54 bonds;
(2) which propose to link rail passenger service with
other modes of transportation;
(3) expected to have a significant impact on air
traffic congestion;
(4) expected to also improve commuter rail
operations;
(5) where all environmental work has already been
completed and the project is ready to commence; or
(6) that have received financial commitments and
other support of State and local governments.
(d) Timely Disposition of Application.--The Secretary shall
grant or deny a requested designation within 9 months after
receipt of an application.
(e) Annual Reports.--
(1) From issuer of bonds.--The issuer of bonds
designated under subsection (a) shall report annually
to the Secretary regarding the terms of outstanding
designated bonds and the progress made with respect to
the project financed by the bonds.
(2) From secretary.--The Secretary, in consultation
with the Secretary of the Treasury, shall transmit to
the Congress an annual report which includes--
(A) reports received under paragraph (1); and
(B) an assessment of the progress made toward
completion of high-speed rail transportation
corridors resulting from projects financed by
bonds designated under subsection (a).
(f) Tax Treatment of Subsection (f) Bonds.--
(1) Exclusion from gross income.--The interest on a
bond designated by the Secretary under subsection (a)
for purposes of this subsection shall be excluded from
gross income under section 103 of the Internal Revenue
Code of 1986, notwithstanding section 149(c) of such
Code.
(2) Exemption from volume cap.--For purposes of
section 146 of such Code, a bond designated by the
Secretary under subsection (a) for purposes of this
subsection shall be considered to be exempt from the
volume cap of the issuing authority in the same manner
as bonds listed in subsection (g) of such section 146.
(g) Refinancing Rules.--Bonds designated by the Secretary
under subsection (a) may be issued for refinancing projects
only if the indebtedness being refinanced (including any
obligation directly or indirectly refinanced by such
indebtedness) was originally incurred by the issuer--
(1) after the date of the enactment of this section;
(2) for a term of not more than 3 years;
(3) to finance projects described in subsection
(a)(2); and
(4) in anticipation of being refinanced with proceeds
of a bond designated under subsection (a).
(h) Provisions Regarding High-Speed Rail Service.--
(1) Status as employer or carrier.--Any entity
providing railroad transportation (within the meaning
of section 20102) that begins operations after the date
of the enactment of this section and that uses property
acquired pursuant to this section (except as provided
in subsection (a)(2)(B)), shall be considered an
employer for purposes of the Railroad Retirement Act of
1974 (45 U.S.C. 231 et seq.) and considered a carrier
for purposes of the Railway Labor Act (45 U.S.C. 151 et
seq.).
(2) Collective bargaining agreement.--Any entity
providing high-speed intercity passenger railroad
transportation (within the meaning of section 20102)
that begins operations after the date of enactment of
this section on a project funded in whole or in part by
bonds designated under subsection (a), and replaces
intercity rail passenger service that was provided by
another entity as of the date of enactment of this
section, shall enter into an agreement with the
authorized bargaining agent or agents for employees of
the predecessor provider that--
(A) gives each employee of the predecessor
provider priority in hiring according to the
employee's seniority on the predecessor
provider for each position with the replacing
entity that is in the employee's craft or class
and is available within three years after the
termination of the service being replaced;
(B) establishes a procedure for notifying
such an employee of such positions;
(C) establishes a procedure for such an
employee to apply for such positions; and
(D) establishes rates of pay, rules, and
working conditions.
(3) Immediate replacement of existing rail passenger
service.--
(A) Negotiations.--If the replacement of
preexisting intercity rail passenger service
occurs concurrent with or within a reasonable
amount of time before the commencement of the
replacing entity's high-speed rail passenger
service, the replacing entity shall give
written notice of its plan to replace existing
rail passenger service to the authorized
collective bargaining agent or agents for the
employees of the predecessor provider at least
90 days prior to the date it plans to commence
service. Within 5 days after the date of
receipt of such written notice, negotiations
between the replacing entity and the collective
bargaining agent or agents for the employees of
the predecessor provider shall commence for the
purpose of reaching agreement with respect to
all matters set forth in paragraph (2)(A)-(D).
The negotiations shall continue for 30 days or
until an agreement is reached, whichever is
sooner. If at the end of 30 days the parties
have not entered into an agreement with respect
to all such matters, the unresolved issues
shall be submitted for arbitration in
accordance with the procedure set forth in
subparagraph (B).
(B) Arbitration.--If an agreement has not
been entered into with respect to all matters
set forth in paragraph (2)(A)-(D) as provided
in subparagraph (A) of this paragraph, the
parties shall select an arbitrator. If the
parties are unable to agree upon the selection
of such arbitrator within 5 days, either or
both parties shall notify the National
Mediation Board, which shall provide a list of
seven arbitrators with experience in
arbitrating rail labor protection disputes.
Within 5 days after such notification, the
parties shall alternately strike names from the
list until only one name remains, and that
person shall serve as the neutral arbitrator.
Within 45 days after selection of the
arbitrator, the arbitrator shall conduct a
hearing on the dispute and shall render a
decision with respect to the unresolved issues
set forth in paragraph (2)(A)-(D). This
decision shall be final, binding, and
conclusive upon the parties. The salary and
expenses of the arbitrator shall be borne
equally by the parties; all other expenses
shall be paid by the party incurring them.
(C) Service commencement.--A replacing entity
under this paragraph shall commence service
only after an agreement is entered into with
respect to the matters set forth in paragraph
(2)(A)-(D) or the decision of the arbitrator
has been rendered.
(4) Subsequent replacement of existing rail passenger
service.--If the replacement of existing rail passenger
service takes place within 3 years after the replacing
entity commences high-speed rail passenger service, the
replacing entity and the collective bargaining agent or
agents for the employees of the predecessor provider
shall enter into an agreement with respect to the
matters set forth in paragraph (2)(A)-(D). If the
parties have not entered into an agreement with respect
to all such matters within 60 days after the date on
which the replacing entity replaces the predecessor
provider, the parties shall select an arbitrator using
the procedures set forth in paragraph (3)(B), who
shall, within 20 days after the commencement of the
arbitration, conduct a hearing and decide all
unresolved issues. This decision shall be final,
binding, and conclusive upon the parties.
(i) Issuance of Regulations.--Not later than 6 months after
the date of the enactment of this section, the Secretary shall
issue regulations for carrying out this section.
(j) Definitions.--For purposes of this section--
(1) Subsection (f) bond.--The term ``subsection (f)
bond'' means a bond designated by the Secretary under
subsection (a) for purposes of subsection (f).
(2) Section 54 bond.--The term ``section 54 bond''
means a bond designated by the Secretary under
subsection (a) for purposes of section 54 of the
Internal Revenue Code of 1986 (relating to credit to
holders of qualified high-speed rail infrastructure
bonds).
* * * * * * *
----------
INTERNAL REVENUE CODE OF 1986
* * * * * * *
SUBTITLE A--INCOME TAXES
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter A--Determination of Tax Liability
* * * * * * *
PART IV--CREDITS AGAINST TAX
Subpart A. Nonrefundable personal credits.
* * * * * * *
Subpart H. Nonrefundable Credit for Holders of Qualified High-Speed
Rail Infrastructure Bonds
* * * * * * *
Subpart H--Nonrefundable Credit for Holders of Qualified High-Speed
Rail Infrastructure Bonds
Sec. 54. Credit to holders of qualified high-speed rail infrastructure
bonds.
SEC. 54. CREDIT TO HOLDERS OF QUALIFIED HIGH-SPEED RAIL INFRASTRUCTURE
BONDS.
(a) Allowance of Credit.--In the case of a taxpayer who holds
a qualified high-speed rail infrastructure bond on a credit
allowance date of such bond which occurs during the taxable
year, there shall be allowed as a credit against the tax
imposed by this chapter for such taxable year an amount equal
to the sum of the credits determined under subsection (b) with
respect to credit allowance dates during such year on which the
taxpayer holds such bond.
(b) Amount of Credit.--
(1) In general.--The amount of the credit determined
under this subsection with respect to any credit
allowance date for a qualified high-speed rail
infrastructure bond is 25 percent of the annual credit
determined with respect to such bond.
(2) Annual credit.--The annual credit determined with
respect to any qualified high-speed rail infrastructure
bond is the product of--
(A) the applicable credit rate, multiplied by
(B) the outstanding face amount of the bond.
(3) Applicable credit rate.--For purposes of
paragraph (2), the applicable credit rate with respect
to an issue is the rate equal to an average market
yield (as of the day before the date of sale of the
issue) on outstanding long-term corporate debt
obligations (determined under regulations prescribed by
the Secretary).
(4) Credit allowance date.--For purposes of this
section, the term ``credit allowance date'' means--
(A) March 15,
(B) June 15,
(C) September 15, and
(D) December 15.
Such term includes the last day on which the bond is
outstanding.
(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month
period ending on a credit allowance date, the amount of
the credit determined under this subsection with
respect to such credit allowance date shall be a
ratable portion of the credit otherwise determined
based on the portion of the 3-month period during which
the bond is outstanding. A similar rule shall apply
when the bond is redeemed.
(c) Limitation Based on Amount of Tax.--
(1) In general.--The credit allowed under subsection
(a) for any taxable year shall not exceed the excess
of--
(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed
by section 55, over
(B) the sum of the credits allowable under
this part (other than this subpart and subpart
C).
(2) Carryover of unused credit.--If the credit
allowable under subsection (a) exceeds the limitation
imposed by paragraph (1) for such taxable year, such
excess shall be carried to the succeeding taxable year
and added to the credit allowable under subsection (a)
for such taxable year.
(d) Credit Included in Gross Income.--Gross income includes
the amount of the credit allowed to the taxpayer under this
section (determined without regard to subsection (c)) and the
amount so included shall be treated as interest income.
(e) Qualified High-Speed Rail Infrastructure Bond.--For
purposes of this part, the term ``qualified high-speed rail
infrastructure bond'' means any bond issued as part of an issue
if--
(1) the issuer certifies that the Secretary of
Transportation has designated the bond for purposes of
this section under section 26106(a) of title 49, United
States Code, as in effect on the date of the enactment
of this section,
(2) 95 percent or more of the proceeds from the sale
of such issue are to be used for expenditures incurred
after the date of the enactment of this section for any
project described in section 26106(a)(2) of title 49,
United States Code,
(3) the term of each bond which is part of such issue
does not exceed 20 years,
(4) the payment of principal with respect to such
bond is the obligation solely of the issuer, and
(5) the issue meets the requirements of subsection
(f) (relating to arbitrage).
(f) Special Rules Relating to Arbitrage.--
(1) In general.--Subject to paragraph (2), an issue
shall be treated as meeting the requirements of this
subsection if as of the date of issuance, the issuer
reasonably expects--
(A) to spend at least 95 percent of the
proceeds from the sale of the issue for 1 or
more qualified projects within the 3-year
period beginning on such date,
(B) to incur a binding commitment with a
third party to spend at least 10 percent of the
proceeds from the sale of the issue, or to
commence construction, with respect to such
projects within the 6-month period beginning on
such date, and
(C) to proceed with due diligence to complete
such projects and to spend the proceeds from
the sale of the issue.
(2) Rules regarding continuing compliance after 3-
year determination.--If at least 95 percent of the
proceeds from the sale of the issue is not expended for
1 or more qualified projects within the 3-year period
beginning on the date of issuance, but the requirements
of paragraph (1) are otherwise met, an issue shall be
treated as continuing to meet the requirements of this
subsection if either--
(A) the issuer uses all unspent proceeds from
the sale of the issue to redeem bonds of the
issue within 90 days after the end of such 3-
year period, or
(B) the following requirements are met:
(i) The issuer spends at least 75
percent of the proceeds from the sale
of the issue for 1 or more qualified
projects within the 3-year period
beginning on the date of issuance.
(ii) Either--
(I) the issuer spends at
least 95 percent of the
proceeds from the sale of the
issue for 1 or more qualified
projects within the 4-year
period beginning on the date of
issuance, or
(II) the issuer pays to the
Federal Government any earnings
on the proceeds from the sale
of the issue that accrue after
the end of the 3-year period
beginning on the date of
issuance and uses all unspent
proceeds from the sale of the
issue to redeem bonds of the
issue within 90 days after the
end of the 4-year period
beginning on the date of
issuance.
(g) Recapture of Portion of Credit Where Cessation of
Compliance.--
(1) In general.--If any bond which when issued
purported to be a qualified high-speed rail
infrastructure bond ceases to be such a qualified bond,
the issuer shall pay to the United States (at the time
required by the Secretary) an amount equal to the sum
of--
(A) the aggregate of the credits allowable
under this section with respect to such bond
(determined without regard to subsection (c))
for taxable years ending during the calendar
year in which such cessation occurs and the 2
preceding calendar years, and
(B) interest at the underpayment rate under
section 6621 on the amount determined under
subparagraph (A) for each calendar year for the
period beginning on the first day of such
calendar year.
(2) Failure to pay.--If the issuer fails to timely
pay the amount required by paragraph (1) with respect
to such bond, the tax imposed by this chapter on each
holder of any such bond which is part of such issue
shall be increased (for the taxable year of the holder
in which such cessation occurs) by the aggregate
decrease in the credits allowed under this section to
such holder for taxable years beginning in such 3
calendar years which would have resulted solely from
denying any credit under this section with respect to
such issue for such taxable years.
(3) Special rules.--
(A) Tax benefit rule.--The tax for the
taxable year shall be increased under paragraph
(2) only with respect to credits allowed by
reason of this section which were used to
reduce tax liability. In the case of credits
not so used to reduce tax liability, the
carryforwards under subsection (c) shall be
appropriately adjusted.
(B) No credits against tax.--Any increase in
tax under paragraph (2) shall not be treated as
a tax imposed by this chapter for purposes of
determining--
(i) the amount of any credit
allowable under this part, or
(ii) the amount of the tax imposed by
section 55.
(h) Other Definitions and Special Rules.--For purposes of
this section--
(1) Bond.--The term ``bond'' includes any obligation.
(2) Qualified project.--The term ``qualified
project'' means any project described in section
26106(a)(2) of title 49, United States Code.
(3) Treatment of changes in use.--For purposes of
subsection (e)(2), the proceeds from the sale of an
issue shall not be treated as used for a qualified
project to the extent that the issuer takes any action
within its control which causes such proceeds not to be
used for a qualified project. The Secretary shall
prescribe regulations specifying remedial actions that
may be taken (including conditions to taking such
remedial actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
qualified high-speed rail infrastructure bond.
(4) Partnership; s corporation; and other pass-thru
entities.--Under regulations prescribed by the
Secretary, in the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar
to the rules of section 41(g) shall apply with respect
to the credit allowable under subsection (a).
(5) Bonds held by regulated investment companies.--If
any qualified high-speed rail infrastructure bond is
held by a regulated investment company, the credit
determined under subsection (a) shall be allowed to
shareholders of such company under procedures
prescribed by the Secretary.
(6) Reporting.--Issuers of qualified high-speed rail
infrastructure bonds shall submit reports similar to
the reports required under section 149(e).
* * * * * * *
Subchapter B--Computation of Taxable Income
* * * * * * *
PART IV--TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS
* * * * * * *
Subpart A--Private Activity Bonds
* * * * * * *
SEC. 142. EXEMPT FACILITY BOND.
(a) * * *
* * * * * * *
(i) High-speed intercity rail facilities.--
(1) In general.--For purposes of subsection (a)(11),
the term ``high-speed intercity rail facilities'' means
any facility (not including rolling stock) for the
fixed guideway rail transportation of passengers and
their baggage between metropolitan statistical areas
(within the meaning of section 143(k)(2)(B)) using
vehicles that are reasonably expected to operate at
speeds in excess of [150 miles per hour] 110 miles per
hour between scheduled stops, but only if such facility
will be made available to members of the general public
as passengers.
* * * * * * *
(4) Additional requirements.--A bond issued as part
of an issue described in subsection (a)(11) shall not
be considered an exempt facility bond unless the
requirements of paragraphs (1) through (6) of section
26106(a) of title 49, United States Code, are met.
* * * * * * *
SUBTITLE F--PROCEDURE AND ADMINISTRATION
* * * * * * *
CHAPTER 61--INFORMATION AND RETURNS
* * * * * * *
Subchapter A--Returns and Records
* * * * * * *
PART III--INFORMATIONAL RETURNS
* * * * * * *
Subpart B--Information Concerning Transactions with Other Persons
* * * * * * *
SEC. 6049. RETURNS REGARDING PAYMENTS OF INTEREST.
(a) * * *
* * * * * * *
(d) Definitions and special rules.--For purposes of
this section--(1) * * *
* * * * * * *
(8) Reporting of credit on qualified high-speed rail
infrastructure bonds.--
(A) In general.--For purposes of subsection
(a), the term ``interest'' includes amounts
includible in gross income under section 54(d)
and such amounts shall be treated as paid on
the credit allowance date (as defined in
section 54(b)(4)).
(B) Reporting to corporations, etc.--Except
as otherwise provided in regulations, in the
case of any interest described in subparagraph
(A), subsection (b)(4) shall be applied without
regard to subparagraphs (A), (H), (I), (J),
(K), and (L)(i) of such subsection.
(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require
more frequent or more detailed reporting.
* * * * * * *
CHAPTER 65--ABATEMENTS, CREDITS, AND REFUNDS
* * * * * * *
Subchapter A--Procedure in General
* * * * * * *
SEC. 6401. AMOUNTS TREATED AS OVERPAYMENTS.
(a) * * *
(b) Excessive credits
(1) In general.--If the amount allowable as credits
under subpart C of part IV of subchapter A of chapter 1
(relating to refundable credits) exceeds the tax
imposed by subtitle A (reduced by the credits allowable
under subparts A, B, D, [and G] G, and H of such part
IV), the amount of such excess shall be considered an
overpayment.
* * * * * * *
CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE
PENALTIES
* * * * * * *
Subchapter A--Additions to the Tax, Additional Amounts
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 6654. FAILURE BY INDIVIDUAL TO PAY ESTIMATED INCOME TAX.
(a) * * *
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(m) Special Rule for Holders of Qualified High-Speed Rail
Infrastructure Bonds.--For purposes of this section, the credit
allowed by section 54 to a taxpayer by reason of holding a
qualified high-speed rail infrastructure bond on a credit
allowance date shall be treated as if it were a payment of
estimated tax made by the taxpayer on such date.
[(m)] (n) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this section.
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SEC. 6655. FAILURE BY CORPORATION TO PAY ESTIMATED INCOME TAX.
(a) * * *
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(g) Definitions and special rules.--
(1) * * *
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(5) Special rule for holders of qualified high-speed
rail infrastructure bonds.--For purposes of this
section, the credit allowed by section 54 to a taxpayer
by reason of holding a qualified high-speed rail
infrastructure bond on a credit allowance date shall be
treated as if it were a payment of estimated tax made
by the taxpayer on such date.
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RAILROAD REVITALIZATION AND REGULATORY REFORM ACT OF 1976
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TITLE I--GENERAL PROVISIONS
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definitions
Sec. 102. As used in this Act, unless the context otherwise
indicates, the term--
(1) * * *
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[(7) ``railroad'' means a rail carrier subject to
part A of subtitle IV of title 49, United States Code,
and includes the National Railroad Passenger
Corporation; and]
(7) ``railroad'' has the meaning given that term in
section 20102 of title 49, United States Code; and
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TITLE V--RAILROAD REHABILITATION AND IMPROVEMENT FINANCING
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SEC. 502. DIRECT LOANS AND LOAN GUARANTEES.
(a) General Authority.--The [Secretary may provide direct
loans and loan guarantees to State and local governments,]
Secretary shall provide direct loans and loan guarantees to
State and local governments, agreements or interstate compacts
consented to by Congress under section 410(a) of Public Law
105-134 (49 U.S.C 24101 nt), government sponsored authorities
and corporations, railroads, and joint ventures that include at
least 1 railroad.
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(d) Extent of Authority.--The aggregate unpaid principal
amounts of obligations under direct loans and loan guarantees
made under this section shall not exceed [$3,500,000,000]
$35,000,000,000 at any one time. Of this amount, not less than
[$1,000,000,000] $7,000,000,000 shall be available solely for
projects primarily benefiting freight railroads other than
Class I carriers. The Secretary shall not establish any limit
on the proportion of the unused amount authorized under this
subsection that may be used for 1 loan or loan guarantee.
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(f) Infrastructure Partners.--
(1) * * *
(2) Credit risk premium amount.--The Secretary shall
determine the amount required for credit risk premiums
under this subsection on the basis of--
(A) the circumstances of the applicant,
including the amount of collateral offered, if
any;
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(D) consultation with the Congressional
Budget Office; [and]
(E) the size and characteristics of the
cohort of which the loan or loan guarantee is a
member; and
[(E)] (F) any other factors the Secretary
considers relevant.
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(4) Cohorts of loans.--In order to maintain
sufficient balances of credit risk premiums to
adequately protect the Federal Government from risk of
default, while minimizing the length of time the
Government retains possession of those balances, the
Secretary shall establish cohorts of loans. When all
obligations attached to a cohort of loans have been
satisfied, credit risk premiums paid for the cohort,
and interest accrued thereon, which were not used to
mitigate losses shall be returned to the original
source on a pro rata basis. A cohort may include loans
and loan guarantees. The Secretary shall not establish
any limit on the proportion of a cohort that may be
used for 1 loan or loan guarantee.
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(h) Conditions of Assistance.--The Secretary shall, before
granting assistance under this section, require the applicant
to agree to such terms and conditions as are sufficient, in the
judgment of the Secretary, to ensure that, as long as any
principal or interest is due and payable on such obligation,
the applicant, and any railroad or railroad partner for whose
benefit the assistance is intended--
(1) * * *
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(3) will not make any discretionary dividend payments
that unreasonably conflict with the purposes stated in
subsection (b).
The Secretary shall not require an applicant for a direct loan
or loan guarantee under this section to provide collateral. The
Secretary shall not require that an applicant for a direct loan
or loan guarantee under this section have previously sought the
financial assistance requested from another source. The
Secretary shall require recipients of direct loans or loan
guarantees under this section to apply the standards of section
26106(a)(5) of title 49, United States Code, to their projects.
(i) Time Limit for Approval or Disapproval.--Not later than
90 days after receiving a complete application for a direct
loan or loan guarantee under this section, the Secretary shall
approve or disapprove the application.
SEC. 503. ADMINISTRATION OF DIRECT LOANS AND LOAN GUARANTEES.
(a) * * *
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(l) Fees and Charges.--Except as provided in this title, the
Secretary may not assess any fees, including user fees, or
charges in connection with a direct loan or loan guarantee
provided under section 502.
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