U.S. GOVERNMENT PUBLISHING OFFICE

32–931 PDF WASHINGTON : 2018

EXAMINING TAX–EXEMPT PRIVATE ACTIVITY 

BONDS FOR ALL ABOARD FLORIDA’S BRIGHTLINE 

PASSENGER RAIL SYSTEM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GOVERNMENT OPERATIONS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

APRIL 19, 2018 

Serial No. 115–109 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.govinfo.gov 

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Vacancy 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Jimmy Gomez, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Stacey E. Plaskett, Virgin Islands 

John P. Sarbanes, Maryland 

SHERIA CLARKE, Staff Director 

WILLIAM MCKENNA, General Counsel 

CAROLINE NABITY, Counsel 

CAMERON CONNOR, Legislative Assistant 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS

Mark Meadows, North Carolina, Chairman 

Jody B. Hice, Georgia, Vice Chair 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Thomas Massie, Kentucky 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Rod Blum, Iowa 

Gerald E. Connolly, Virginia, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 


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C O N T E N T S 

Page 

Hearing held on April 19, 2018 .............................................................................. 1 

WITNESSES 

Mr. Grover Burthey, Deputy Assistant Secretary for Policy, U.S. Department 

of Transportation 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 8 

Mr. Patrick Goddard, President and Chief Operating Officer, All Aboard 

Florida/Brightline 

Oral Statement ................................................................................................. 12 

Written Statement ............................................................................................ 14 

Mr. Robert Crandall, former CEO, American Airlines 

Oral Statement ................................................................................................. 31 

Written Statement ............................................................................................ 33 

Chief Dan Wouters, Division Chief Emergency Management, Martin County 

Fire Rescue 

Oral Statement ................................................................................................. 39 

Written Statement ............................................................................................ 41 

Mr. Dylan Reingold, County Attorney, Indian River County 

Oral Statement ................................................................................................. 47 

Written Statement ............................................................................................ 49 

APPENDIX 

Florida 8th District Crossing Location Photographs submitted by Mr. Posey ... 78 

Hearing Follow-up Response submitted by Mr. Burthey, Department of 

Transportation ...................................................................................................... 85 

Response from All Aboard Florida to Mr. Meadows, Questions for the Record 87 

Response from Mr. Goddard to Mr. DeSantis, Questions for the Record ........... 95 


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EXAMINING TAX–EXEMPT PRIVATE ACTIVITY 

BONDS FOR ALL ABOARD FLORIDA’S 

BRIGHTLINE PASSENGER RAIL SYSTEM 

Thursday, April 19, 2018 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:06 a.m., in Room 

2154, Rayburn House Office Building, Hon. Mark Meadows [chairman of the subcommittee] presiding. 

Present: Representatives Meadows and Connolly. 

Also Present: Representatives Mast and Posey. 

Mr. MEADOWS. The Subcommittee on Government Operations 

will come to order. And without objection, the chair is authorized 

to declare a recess at any time. And the chair notes the presence 

today of Congressman Bill Posey of Florida and Congressman 

Bryan Mast of Florida. 

We appreciate both of you and your interest in this particular 

topic. We welcome your participation. 

I ask unanimous consent that Congressman Posey and Congressman Mast be permitted to fully participate in today’s hearing. 

Mr. CONNOLLY. No objection, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman from Virginia. So without 

objection, it is so ordered. 

I am pleased to hold this oversight hearing to examine the use 

of tax-exempt private activity bonds for All Aboard Florida’s 

Brightline project. 

It is a pleasure to welcome the local stakeholders and experts on 

this issue. I thank you all for joining us here today. 

And as you know, this committee is charged with uncovering and 

exposing waste, fraud, and abuse within the Federal Government. 

And as some of you may have seen in the news, the safety of the 

Brightline train issue raises grave safety concerns. And tragically, 

some 6 people have been killed by Brightline trains since they 

began trial runs last year. 

And so due to some of the public safety concerns, some of my colleagues, including Congressman Mast, have raised these concerns 

related to the eligibility of a private sector entity like Brightline to 

receive Federal assistance. And so as stewards of the taxpayer dollars, we take these concerns seriously. 

In 2017, All Aboard Florida applied for two allocations of a taxexempt private activity bond totaling $1.75 billion. These bonds 


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would be used to fund its Brightline passenger rail project. And 

after reviewing the request, DOT approved both applications and 

deemed the bonds eligible for tax-exempt status. 

However, questions remain as to whether the project was, in fact, 

eligible to receive this type of funding. And this is especially concerning for a number of reasons. 

So, obviously, we’ll get to hear some of the testimony today as 

it relates to the Title 23 funds and when those were received for 

this particular issue, because that’s one of the components, certainly, of getting the private activity bond. And additionally, I look 

forward to the testimony from all of you. 

But with that, I would like to yield the remaining time for my 

opening statement to the gentleman from Florida, Mr. Mast. 

Mr. MAST. Thank you, Mr. Chairman, for holding this hearing, 

for your work on rooting out waste, fraud, and abuse in the Federal 

Government. 

I could tell you one of the issues that I do hear about most frequently from my constituents are the physical and economic danger 

that are posed by the Brightline expansion into the Treasure Coast. 

There are numerous issues that deserve scrutiny when it comes 

to this expansion. On February 15, my committee of Transportation 

and Infrastructure had the opportunity to ask the National Transportation Safety Board, also the Federal Railroad Administration, 

about many of these issues. And the FRA indicated that they are 

also very concerned about these safety issues, including the deaths, 

some of them by suicide, that have been as a result of this train. 

Now, let me just start by saying, I am a supporter of private activity bonds. There are numerous important project, good projects 

that Congress has specifically intended to provide the option of private activity bonds for. There’s a list of them up on the board right 

there. 

Airport, docks, wharfs, mass commuting facilities, facilities for 

furnishing water, sewage facilities, solid waste disposal, residential 

projects, furnishing electronic and energy and gas, heating, cooling 

facilities, hazardous waste facilities, environmental enhancements 

of hydroelectric-generating facilities, and qualified public educational facilities, green building and sustainable design projects. 

There are two additional categories. The first is high-speed intercity rail facilities, which Congress defines as a railway using vehicles that are reasonably expected to be capable of obtaining a speed 

in excess of 150 miles per hour. In other words, if Brightline wants 

to use tax-exempt bonds, they have to have the capability to run 

their trains in excess of 150 miles per hour. But they don’t. 

So Brightline has, instead, sought to circumvent this congressional intent by claiming that they qualify as a highway. We’ll get 

into the theory of this claim in this hearing, but I do think we can 

all agree that based on any common understanding of the word 

‘‘highway,’’ this train does not meet that definition. 

I do believe that if Congress had intended to provide private activity bonds for a passenger train traveling 80 to 110 miles per 

hour, as Brightline does, then Congress would have laid that out. 

They would have just said so. And any other interpretation is an 

affront to the American taxpayer. 


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And in that, I thank you for the time to speak Mr. Chairman, 

and I yield back. 

Mr. MEADOWS. I thank the gentleman. 

In my remaining 35 seconds, I would like to thank the ranking 

member. As many of you know, we are not actually voting today, 

and what that normally means is that everybody is out of town almost immediately. And so the ranking member was gracious 

enough to continue on with this hearing. And I would like to personally thank him. 

And I recognize him for his opening statement. 

Mr. CONNOLLY. I thank the chair for ever being gracious. And 

I’m very well aware of the fact that for some of our colleagues, this 

obviously has great impact. And so we wanted to make sure that 

that was a possibility today. But I thank the chair. 

As a former local government official, I recognize some of the aspects of this issue in this hearing. In fact, it almost feels like I’m 

back in my old boardroom in Fairfax County. 

What we have here is a local dispute between a new transportation facility, in this case Brightline passenger rail, and the communities that object to building the facility in their backyards. 

That’s the kind of dispute I dealt with countless times as the chairman of one of the larger counties in the United States. 

No case is ever easy, but what we always hope for is a resolution 

that balances the interests of the community with the need to 

make necessary transportation improvements. And that’s what I 

hope ultimately happens in this case. 

As Federal overseers, we also have a responsibility to ensure that 

projects using government funding or financing mechanisms are 

held to high safety standards and, in fact, meet the statutory terms 

of the program as set by Congress. 

This hearing appears to focus on a local dispute which is currently subject to litigation. The witnesses are the parties to the litigation, and the testimony they’re offering tracks closely with their 

legal briefs. 

Of course, we’re not a court of law here, and nothing that happens here will affect the eventual outcome of the litigation itself, 

nor is this hearing intended to do so, nor should it. 

However, I think the hearing raises some issues that should be 

relevant to President Trump, though perhaps not in the way my 

friends on the other side of the aisle intend. 

I believe we can all agree the country’s infrastructure is in an appalling state of disrepair. The state of our infrastructure is so bad 

that the American Society of Civil Engineers gave the country an 

overall D-plus, D-plus. Although our rail systems scored a B, the 

Society stated that, quote, ‘‘U.S. rail still faces clear challenges, 

most notably in passenger rail, which faces the dual problems of 

aging infrastructure and insufficient funding.’’ 

The dispute at the center of the lawsuit is how a major passenger rail infrastructure project in Florida is funded. The project 

is privately owned and operated. It’s funded by private investors 

who receive tax exemptions for the income they earn from their investments in the railroad. The financing vehicle is called private 

activity bonds, PABs. 


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Two Florida counties and a group of homeowners in Florida’s 

Treasure Coast want to stop the project. They’re saying, in effect, 

‘‘Not in my backyard,’’ and they have gone to court to contest the 

appropriateness of the use of PABs for this infrastructure project. 

Here is why this Florida dispute should matter to President 

Trump. President Trump’s infrastructure plan abandoned the long 

tradition of public funding of major infrastructure projects. Instead, 

he relies significantly upon the private sector to finance the cost 

and upgrading of infrastructure. As is the case with this passenger 

rail project in Florida, PABs are a key part of the financing option 

that the Federal Government uses to incentivize private sector investment in infrastructure. The Trump plan depends upon them. 

So it’s not too much of a stretch to say that if this hearing and 

the accusations of crony capitalism based on government-supported 

financing mechanisms can in fact stop a private passenger rail 

project in Florida from using tax-exempt bonds intended to 

incentivize private investment in infrastructure, then President 

Trump’s plan to rely on those some instruments, that is to say 

PABs, for infrastructure projects across the country could also be 

stopped in a similar way. 

In a way, then, it’s the Trump infrastructure plan that’s also before us today. 

Isn’t it ironic that the loudest critics are likely to be in the President’s own party and probably believe in private ownership and 

private investment of infrastructure, just not in this backyard. 

I have no opinion one way or the other about whether this passenger train should be built in Florida or whether the mechanism 

used to finance it is appropriate. I am, however, skeptical that the 

Nation can rely entirely on these private instruments of finance to 

repair and improve our aging infrastructure. And I’m doubtful that 

the President’s privately funded infrastructure plan will ever be 

anything more than another campaign promise. 

I have a suspicion this hearing will shine the light on the Achilles’ heel of that infrastructure plan because it will demonstrate 

that private financing alone is not a panacea, something that will 

become more clear every time someone in this hearing attacks 

Brightline for taking advantage of existing tax-exempt bonds. 

So I think in many ways this hearing is more than about a rail 

line in Florida. It actually sheds light on how we’re going to approach the whole issue of our Nation’s infrastructure, which is so 

critical. And for that, I thank the chair for bringing us together to 

do that just that. 

With that, I look forward to hearing the testimony. 

Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman for his opening remarks. 

I’m pleased to introduce the witnesses. We have Mr. Grover 

Burthey, deputy assistant secretary for policy at the Department of 

Transportation. 

Welcome. 

Mr. Patrick Goddard, president and chief operating officer of 

Brightline All Aboard Florida. 

Welcome, Mr. Goddard. 

Mr. Robert Crandall, former chairman and CEO of American Airlines. 


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Welcome, Mr. Crandall. 

Chief Dan Wouters, division chief of the Emergency Management 

of Martin County Fire Rescue. 

Welcome, Chief. 

And Mr. Dylan Reingold, county attorney for Indian River County. 

Welcome. 

And pursuant to committee rules, all witnesses will be sworn in 

before they testify, so if you would please stand and raise your 

right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give is the truth, the whole truth, and nothing but the 

truth, so help you God? 

All right. You may be seated. 

Please, the record will reflect that all witnesses answered in the 

affirmative. 

In order to allow time for discussion, I would ask that you please 

limit your testimony, your oral testimony to 5 minutes, but your 

entire written testimony will be made part of the record. 

And as a reminder, there is a clock in front of you. And so as 

you’re looking at that clock it should have a countdown. But as it 

turns yellow, that means you need to prepare your closing remarks. 

And as it turns red, it’ll start with a gentle tap and a harder gavel 

if you continue to go beyond the 5 minutes. 

But with that, if you’ll remember to press the red talk button, 

that will turn red when you press it. 

You’re recognized, Mr. Burthey, for 5 minutes. 

WITNESS STATEMENTS 

STATEMENT OF GROVER BURTHEY 

Mr. BURTHEY. Chairman Meadows, Ranking Member Connolly, 

and members of the subcommittee, thank you for the opportunity 

to testify today. 

My name is Grover Burthey, and I’m the deputy assistant secretary for transportation policy in the Office of the Under Secretary 

at the United States Department of Transportation. 

In my role at the Department, I oversee both the Office of Infrastructure Finance and Innovation, as well as the Build America 

Bureau, the entities with historical and current responsibility managing the private activity bond allocation process. 

As you are aware, private activity bonds, or PABs, are a category 

of bonds issued by State or local governments to private investors. 

The interest on State or local bonds is normally not subject to Federal taxation. But if State or local bonds are used to fund a private 

project, the interest is only tax-exempt if the bonds fit into one of 

several categories, including the category of exempt facility bonds 

at issue here. 

Private activity bonds are a valuable tool in facilitating private 

investment in transportation infrastructure. Extending tax incentives to privately financed projects or facilities that are similar to 

those enjoyed by publicly financed projects or facilities helps to 

level the playing field and encourages increased private investment 

in transportation infrastructure. 


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Section 142 of Title 26, the Internal Revenue Code, defines several different categories of exempt facilities, including multiple categories of transportation facilities which may be financed using 

PABs. 

Many of these categories are subject to annual volume caps set 

by the statute and administered at the State level, while others are 

not limited in volume at all. Airports, docks and wharves, mass 

commuting facilities, and high-speed intercity rail facilities all fall 

into one of those categories with a volume cap. 

Qualified highway and surface freight transfer facilities, a category established in 2005 by SAFETEA–LU legislation, is unique 

in that it is subject to a nationwide volume cap of $15 billion, 

which the Secretary of Transportation is directed to allocate in 

such a manner as the Secretary determines to be appropriate. From enactment until today, approximately $8.25 billion of this 

volume cap has been issued, while an additional amount of approximately $2.8 billion is currently allocated. 

The statute authorizing this category, 26 U.S. Code 142(m), defines qualified highway or surface freight transfer facility to mean, 

among other things, any surface transportation project which receives Federal assistance under Title 23. The Department has consistently understood this language to mean any surface transportation project which receives assistance from Title 23, not limited 

to highways, is eligible for private activity bond issuance. All Aboard Florida originally applied for an allocationof $1.75 billion in PAB authority for both Phase 1 and Phase 2 of their project, 

later named Brightline, in August of 2014. Brightline Phase 1 is a 

passenger rail service from Miami to West Palm Beach, and Phase 

2 would extend the service to Orlando International Airport. 

The application indicated that in the time since the planning 

process for the All Aboard Florida project had begun, the Florida 

Department of Transportation has spent Title 23 funds improving 

railway-highway grade crossings along the project corridor. 

Based on these expenditures, the Department determined that 

the All Aboard Florida project was a surface transportation project 

which receives Federal assistance under Title 23, and it therefore 

qualified for a private activity bond allocation under 26 U.S. Code 

142(m)(1)(A). 

The Department issued an allocation letter in December of 2014. 

The Department acted subsequently to extend that allocation twice. 

In September of 2016, All Aboard Florida submitted a new application requesting a $600 million application for Phase 1 of the 

Brightline projects. It simultaneously requested that the existing 

$1.75 billion allocation be withdrawn. In November of 2016, the old 

allocation was withdrawn and the new allocation was granted. 

$600 million in private activity bonds were subsequently issued 

for Phase 1 in December of 2017. These bonds help fund construction of new stations and track infrastructure. On December 5 of 

2017, All Aboard Florida applied for an allocation of $1.15 billion 

in private activity bond authority for Phase 2 of their project. This 

allocation was granted in December of 2017 and has an expiration 

date of May 31, 2018. 

Thank you again for the opportunity to testify today regarding 

the Department’s private activity bond allocation process to the All 


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Aboard Florida Brightline project, and I look forward to your questions. 

[Prepared statement of Mr. Burthey follows:] 


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STATEMENT OF 

GROVER BUR THEY 

DEPUTY ASSISTANT SECRETARY FOR POLICY 

U.S. DEPARTMENT OF TRANSPORTATION 

BEFORE THE 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

UNITED STATES HOUSE OF REPRESENTATIVES 

HEARING ON 

EXAMINING TAX-EXEMPT PRIVATE ACTIVITY BONDS 

FOR 

ALL ABOARD FLORIDA'S BRIGHTLINE PASSENGER RAIL SYSTEM 

APRIL 19, 2018 

Chainnan Meadows, Ranking Member Connolly, and members of the subcommittee, thank you 

for the opportunity to testify today. 

My name is Grover Burthey, and I am a Deputy Assistant Secretary in the Office of the Under 

Secretary of Transportation for Policy at the United States Department of Transportation. In my 

role at the Department I oversee both the Office of Infrastructure Finance and Innovation and the 

Build America Bureau, the entities with historical and current responsibility managing the 

Private Activity Bond allocation process. 

As you are aware, Private Activity Bonds (P AB) are a category of bonds issued by State or local 

governments to private investors. The interest on State or local bonds is normally not subject to 

federal taxation. But if State or local bonds are used to fund a private project, the interest is only 

tax-exempt if the bonds fit into one of several categories, including the category of"exempt 

facility bonds" at issue here. 
9 


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Private Activity Bonds are a valuable tool in facilitating private investment in transportation 

infrastructure. Extending tax incentives to privately-financed projects or facilities that are 

similar to those enjoyed by publicly-financed projects or facilities helps to level the playing field 

and encourages increased private investment in transportation infrastructure. 

Section 142 of Title 26 (the Internal Revenue Code) defines several different categories of 

"exempt facilities," including multiple categories oftransportation facilities, which may be 

financed using P ABs. Many of these categories are subject to annual volume caps set by the 

statute and administered at the state level, while others are not limited in volume at all. Airports, 

docks and wharves, mass commuting facilities, and high-speed intercity rail facilities all fall into 

one of those categories with a volume cap. "Qualified Highway and Surface Freight Transfer 

Facilities," a category established in 2005 by SAFETEA-LU, is unique in that it is subject to a 

nationwide volume cap of $15 billion, which the Secretary of Transportation is directed to 

allocate in such as a manner as the Secretary determines to be appropriate. From enactment until 

today, approximately $8.25 billion of this volume cap has been issued, and an additional amount 

of approximately $2.8 billion is currently allocated. 

The statute authorizing this category (26 USC 142(m)) defines '"Qualified Highway and Surface 

Freight Transfer Facility" to mean, among other things, ··any surface transportation project which 

receives Federal assistance under Title 23, United States Code (as in effect on the date of 

enactment of this subsection)." The Department has consistently understood this language to 

mean any surface transportation project which receives assistance from Title 23-not highways 

alone-is eligible for PAB issuance. 

2 
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All Aboard Florida (AAF) originally applied for an allocation of$1.75 billion in Private Activity 

Bond Authority for both Phase 1 and Phase 2 of their project-later named "Brightline"-in 

August of2014. Brightline Phase 1 is passenger rail service from Miami to West Palm Beach 

and Phase 2 would extend the service to Orlando International Airport. The application 

indicated that in the time since the planning process for the AAF project had begun, the Florida 

Department of Transportation has spent Title 23 funds improving railway-highway grade 

crossings along the project corridor. Based on these expenditures, the Department determined 

that the AAF project was a "surface transportation project which receives Federal assistance 

under title 23" and it therefore qualified for a PAB allocation under 26 USC 142(m)(l)(A). The 

Department issued an allocation letter in December of 2014. The Department acted subsequently 

to extend that allocation twice. 

In September of 2016, AAF submitted a new application requesting a $600 million allocation for 

Phase I of the Brightlinc project. It simultaneously requested that the existing $1.7 5 billion 

allocation be withdrawn. In November of 2016, the old allocation was withdrawn and the new 

allocation was granted. $600 million in private activity bonds were subsequently issued for 

Phase 1 on December 19 of2017. These bonds have helped privately fund construction of new 

stations and track infrastructure from Miami to West Palm Beach that will provide a new 

passenger rail transportation alternative in South Florida. 

On December 5 of 2017, AAF applied for an allocation of $1.15 billion in P AB authority for 

Phase 2 of the project. This allocation was granted on December 20, 2017, and has an expiration 

date of May 31,2018. Shonld AAF apply for extension of their allocation, the Department will 

review that request using established procedures. 

3 
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Thank you again for the opportunity to testifY today regarding the Department's Private Activity 

Bond Allocation to the All Aboard Florida's Brightlinc Project. I look forward to your 

questions. 

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Mr. CONNOLLY. Nineteen seconds, pretty good for government 

work, Mr. Burthey. 

Mr. MEADOWS. Thank you for your testimony. 

Is it Goddard, is that correct? 

Mr. GODDARD. That’s correct. 

Mr. MEADOWS. I don’t want to pronounce it wrong the whole 

time. So 5 minutes, Mr. Goddard. Thank you. You’re recognized. 

STATEMENT OF PATRICK GODDARD 

Mr. GODDARD. Thank you, Chairman. 

Chairman Meadows, Ranking Member Connolly, and members of 

the subcommittee, thank you for the invitation to participate in 

this hearing. My name is Patrick Goddard, and I’m the president 

and chief operating officer of Brightline. 

As many of you know, Brightline has revived the legacy of Henry 

Flagler, who introduced passenger rail to Florida over 100 years 

ago. We launched our service in January between Fort Lauderdale 

and West Palm Beach, and Miami is set to begin operations in the 

coming weeks. 

Early works to Orlando are also now underway, which will connect major economic engines for the third-largest State in our country. In doing so, we have created employment for over 10,000 people. 

I’m excited to report that early ridership numbers are higher 

than anticipated and support for our current service and future expansion opportunities from consumers, elected officials, and the 

business community has been nothing short of overwhelming. 

This model serves city pairs that are too short to fly and too long 

to drive. It’s working, and it will work in other markets across the 

country. 

There was never a more important time than now to build this 

system that will benefit all of Florida and its visitors. Today, 400 

million trips are taken annually in this market relying on roads 

and airways that are among the most congested in the Nation. 

Driving speeds on the Interstate 95 highway in south Florida currently average 34 miles per hour with no capacity for improvement. 

With 20 million residents and 116 million visitors, enhanced mobility between these markets is vital to meeting the growth trajectories in this region. 

Brightline will eventually take up to 6 million trips off our highways, giving residents and tourists a safer, more reliable, and convenient means to travel around the State. 

That said, I would like to address the topics that have been 

brought to bear today. 

First of all, Brightline is a private company and is privately 

funded. Contrary to propaganda disseminated by some of our opponents, private activity bonds are not government funded and taxpayers are not at any risk whatsoever. 

The Federal Government does not guarantee the bonds, subsidize 

the interest rate on the bonds, or assume any liability for the 

project’s losses or cost overruns. Private investors assume 100 percent of the risk and local governments receive millions of dollars 

in new tax revenue. 


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In fact, it is estimated that Brightline will generate more than 

$650 million in tax revenue to Federal, State, and local governments, and there will be $6 billion in positive economic impact over 

8 years. 

In addition to the PABs, which are collateralized by our assets, 

we have invested over a billion dollars in equity, which is at risk, 

not an insignificant amount of our own money. 

Despite this investment, at our own risk and for public benefit, 

might I add, we still face opposition from a minority of narrowminded residents of two counties along our corridor who are willing 

to support passenger rail everywhere, it seems, except in their own 

backyard. 

The fact is, I concur with Mr. Connolly, President Trump’s infrastructure bill is what is actually on trial in this room and as long 

as we allow a small group of obstructionists to tie up courts and 

spend taxpayer dollars on frivolous lawsuits to stand in the way of 

necessary progress. 

On safety. Safety has been Brightline’s priority since the inception of this project back in 2012. APTA has published a recent 

study demonstrating that train travel is 90 percent safer than travel by car. With 700 deaths year-to-date on our State’s roads, I 

would say that percentage is far higher in Florida. 

Rail opponents to our north claim that recent incidents validate 

their claim that passenger rail is unsafe. But they choose to ignore 

the facts and the actual police reports surrounding these incidents, 

a common theme of bending information to suit their anti-progress 

narrative. 

In every incident to date, all of the safety and warning systems 

worked exactly as intended. These were all examples of individuals 

circumventing the very equipment that was put in place to protect 

them. 

It’s impossible to have a conversation about rail safety without 

discussing opioids and mental health. Every person who has died 

on our railroad has either chosen to end their lives or been under 

the influence of drugs. 

In every aspect of this project, Brightline has gone above and beyond what is required by regulators and what is expected of others 

in our industry. 

Early ridership and guest feedback tell us we are bringing a 

much-needed solution to south Florida. Not only are people in the 

State excited about Brightline, but in January, your colleagues Bill 

Shuster and Peter DeFazio took part in our launch, tried our 

trains, and walked away overwhelmingly impressed. 

I welcome you and all members of this subcommittee to join us 

in Florida and to see our impressive operation. 

I thank you. 

[Prepared statement of Mr. Goddard follows:] 


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Testimony of 

Patrick Goddard 

President and COO 

All Aboard Florida - Operations, LLC 

Before the 

U.S. House Oversight and Government Reform Committee 

Subcommittee on Government Operations 

On 

Examining Tax Exempt Private Activity Bonds 

For All Aboard Florida's Brightline Passenger Rail System 

Submitted by 

J!!l~ FLORIDA EAST COAST "'=Ill INDUSTRIES 

161 NW 6th Street 

Suite 900 

Miami, FL 33136 

April 19, 2018 
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Introduction 

Chairman Meadows, Ranking Member Connolly and members of the subcommittee, thank you 

for the invitation to participate in this hearing. My name is Patrick Goddard, and I am the 

President and Chief Operating Officer of Brightline. I am pleased to share a private industry 

perspective on the opportunities to introduce intercity passenger rail as an important example 

of the kind of transportation solutions needed for cities across the country where increased 

mobility options are essential to support prosperity. 

Background 

Brightline, and its holding company All Aboard Florida, are wholly owned subsidiaries of Florida 

East Coast Industries, LLC (FECI) a transportation, infrastructure, and real-estate development 

company based at our signature MiamiCentral station in downtown Miami. 

The All Aboard Florida project, now branded as Brightline, was established in 2012 to pursue 

passenger rail opportunities on a private, for-profit basis. FECI traces its roots to the late 

1890's and the company founded by Henry Flagler who first introduced an integrated rail 

network into Florida. That railroad gave rise to the growth of most of what is now the country's 

third largest state. Originally the system was built as a railroad that carried passengers from 

points north to new development projects along the Florida coastline, and also carried the 

freight to support the needs of those people and of those building the communities emerging 

along the new infrastructure backbone. In the late 1960's the passenger service ceased 

operations, (as was commonplace with many US passenger rail routes) but the freight service 

continued to support the growth of the state. After some 120 years of continuous operations, 

the original railroad remains a profitable private enterprise. 

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THE SMARTER 

WAY TO GETTHERE 

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A Vision for Passenger Rail in America 

Leveraging the legacy of the original company and its historic assets which include a century 

of previous investment into railroad infrastructure, All Aboard Florida has invested $2 billion of 

private capital over the last 5 years, invested entirely in the United States with all expeditures 

for our trains, track materials and labor in compliance with Buy America standards, toward a 

reintroduction of passenger rail service to major Florida cities. This express, intercity 

passenger train, operating under the brand name Brightline, is a newly created, consumeroriented brand built to support an optimistic vision for what it means to travel by train in 

America. Brightline is being introduced in two phases, with phase one service operating 

between Miami, Fort Lauderdale and West Palm Beach and phase two service extending from 

West Palm Beach to Orlando, terminating at the Orlando International Airport. There are 

additional potential expansions, including Tampa and Jacksonville that are being studied. 

Phase one is currently running introductory service between West Palm Beach and Fort 

Lauderdale, with Miami service set to begin in the coming weeks. This initial phase is an allimportant first step toward a vision to fully connect the Southeast and Central Florida markets 

- two driving forces of the overall economy of the third largest state in the country. 

Today, 400 million trips are taken annually in this market, relying on roads and airways that 

are among the most congested in the nation. Driving speeds on the interstate 95 highway in 

south Florida currently average 34 miles per hour. With nearly half of the state's 20 million 

residents living in communities connected to the railroad corridor, and many of the more than 

116 million visitors to Florida attracted by the complementary attributes of Central Florida 

attractions and South Florida's beaches and culture, enhanced mobility between these markets 

is vital to meeting the growth trajectories in this region. 

These trips, which we see as "too long to drive and too short to fly" represent the opportunity 

for the next generation of American train service. Today's market sensibilities are vastly 

different than those of 1969 when intercity travel by train in Florida effectively stopped. The 

demand for alternatives to private cars on crowded roads has never been clearer. Demand 

driven by growth, dysfunction generated by congestion and the social priorities of a modern 

demography all support the future prospects for passenger rail as a key component of 

transportation networks. 

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Only six years since it was conceived, Brightline is now carrying customers in a fleet of stateof-the-art, fuel-efficient trains, to three new stations, across 70 miles of modernized railroad 

infrastructure that will incorporate the most advanced signaling and safety technology 

available, including Positive Train Control. 

In addition to the new train operations, we have built new multi-modal transit hubs in the heart 

of the existing downtown cores of three of Florida's most important cities. With over 1.5 million 

square feet of mixed-used development in and around our stations, an important second 

component of the project will welcome new occupants concurrent with the Brightline trains. 

These new urban environments benefit from added transit activity and also contribute to the 

use, and therefore viability, of the new train system by increasing the density and proximity of 

many new customers. 

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MiamiCentral Station 

A major component of Brightline's intermodal advantage is its direct connection to the adjacent 

Metro Rail and Metro Mover systems and the cross-utilization of commuter and intercity rail on 

our MiamiCentral station platforms. As a result of a successful collaboration between All 

Aboard Florida and the South Florida Regional Transportation Authority (SFRTA), regional 

commuters will soon be able to get to downtown Miami with a one-seat ride on the TriRail 

system, the first downtown connection for this public system since it began in 1985. 

Brightline offers an efficient and sustainable transportation system that will connect 

communities, bringing a much needed and often overlooked component of successful urban 

redevelopment efforts. Particularly in Miami, our station and new corporate headquarters is 

located in a long-neglected and economically disadvantaged area known as Overtown. This 

once bustling African-American community was effectively marginalized when the new 

interstate system split Miami's downtown neighborhoods in the 1960's. 

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With our commitment to the Overtown community, which includes hiring preferences for local 

residents amounting to more than 24% minority participation in our workforce for the downtown 

Miami station, we are proving to be the catalyst that has already encouraged others to re-invest 

in this historic part of downtown and bridge a decades long divide in Miami's city center. 

With the second phase of Brightline, the service will stretch north from West Palm Beach for 

180 miles and ultimately connect into a new multi-modal station that is the center piece of the 

Orlando International Airport's terminal expansion. Orlando Airport's lntermodal Terminal 

Facility (ITF) is already completed and will ultimately host four train and transit operations, 

including an Automated People Mover, currently carrying passengers between terminals; 

Central Florida's commuter rail system known as Sun Rail; a future light rail system to Orlando's 

tourist district and convention center, and finally, All Aboard Florida's Brightline intercity 

passenger rail system. 

It should be noted Orlando Airport planned their ITF in the 1990's and designed it to 

accommodate a future high speed or express intercity rail system long before All Aboard 

Florida's Brightline was conceived. With the eventual demise of previous attempts to launch 

a publically funded high speed intercity rail, All Aboard Florida approached the airport authority 

with a proposal to rent that portion of the terminal originally planned for intercity high speed 

rail. Utilizing this space under a fair market lease agreement. Brightline is currently a tenant in 

that facility, paying rent today for a system that will not begin operating for another two to three 

years. With this leg the connection to Central Florida will be accomplished; and as a result, 

the linking of a major international air gateway to an intercity passenger rail network will put 

this facility among a small group of American airports that have achieved this level of 

connectivity. 

The further integration of the various other transportation systems that convene at the airport, 

in particular Central Florida's SunRail commuter system, will be facilitated with direct 

connections and immediate proximity. 

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Orlando International 

South lntermodal Terminal 

01.16.18 

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In fact, each of our station facilities have been planned and constructed to optimize connections 

and ease of cross-utilization between all existing and planned future transit systems. 

Job Creation 

When completed, All Aboard Florida's investment in Brightline will exceed $3.5 billion. In 

addition to creating up to 10,000 jobs during the design and construction phases of the rail 

system and thousands more associated with train operations and ancillary development, 

Brightline is an investment in STEM related education and employment opportunities. From 

our advanced technology train equipment with fuel efficient, environmentally friendly EPA Tier 

4 compliant engines, to modern signaling and communications systems designed to enhance 

safety and produce a high quality customer experience, Brightline is making a commitment to 

a workforce training regime that includes skill-based apprenticeship education and diversity in 

hiring. Our minority workforce currently exceeds the minimum Florida Department of 

Transportation benchmark for public infrastructure projects. 

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We believe Brightline is a prototype of what a future private passenger rail workforce may look 

like. As a new company operating alongside an existing, long-established freight company we 

find that through relationships in the form of joint-use agreements and joint-ventures, such as 

with our dispatch and infrastructure maintenance operations, we can create a working 

partnership that includes union and non-union personnel working collaboratively. 

Through equity in pay and benefits, such arrangements can contribute to healthy working 

conditions, healthy companies and safe joint operations. 

Investment Thesis 

Our business plan is quite simple. We believe that markets comprised of city pairs that are 

250-350 miles apart present opportunities for trains to provide a more efficient, comfortable, 

and reliable alternative to cars and planes. The addition of integrated real-estate development 

aligns two economic engines that revitalizes the urban landscape and addresses a state goal 

to connect the major population centers by intercity rail. 

The lack of analogous precedent for operating systems within the United States meant that 

lessons needed to be learned from a comprehensive study of the global markets where 

profitable rail services can be found. In addition to transportation analogs, we gleaned 

knowledge from the perspective drawn from other hospitality service offerings as a benchmark 

for a new transportation service. Combining these with best-practice observations from 

examples of Transit-Oriented Development (TOO), we developed a balanced approach to 

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breaking the inertia that has beset many initiatives similar to ours being considered elsewhere 

in America. 

The advantages of a private-sector model, which exacts efficiency from all parts of a process 

and focuses on the time value of money as a central tenet of achieving profitability, is also a 

key aspect of the overall business thesis. 

Opportunities for Government and Industry Cooperation 

Our experiences have sharpened our perspective on several key factors where enhanced 

interaction between government and industry will contribute to more and faster results. The 

objective should be to encourage the billions of dollars of capital earmarked for infrastructure 

to be deployed against creating new systems that will generate growth, and contribute new 

capacity into our transportation infrastructure networks. 

There is ample equity capital available in the current markets targeting the prospects for 

infrastructure and transportation as long-dated assets worthy of investment. The challenge is 

that the majority of this capital will move toward existing and established projects and therefore 

not generate incremental assistance to the core challenge of capacity. 

We applaud the most recent efforts by Congress to address the most critical areas that will 

help pioneering efforts such as ours; streamlining of complicated regulatory processes, and 

enhancements to the debt markets that must accompanying equity investments to produce 

new projects. 

Our own experiences with expanding our business into its second phase, which represents an 

incremental investment of more than $2 billion, clearly demonstrate these points. 

Financial incentives also factor heavily in these decisions. As the demand for services such 

as Brightline continue to emerge, the opportunity to attract private capital to support this new 

infrastructure can be catalyzed through efficient utilization of already existing programs such 

as Tax-Exempt Bonds, and the RRIF program. 

Tax-exempt Private Activity Bonds (PABs) have long been an effective method of attracting 

private financing of projects that provide public benefits. Brightline's eligibility for PASs fall 

under a provision of the 2005 transportation legislation known as SAFETEA-LU, which 

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amended the Internal Revenue Code to add highway and surface freight transfer facilities 

(expressly defined as "any" surface transportation project which receives Federal assistance 

under title 23, United States Code) to the types of privately developed and operated projects 

for which private activity bonds (PABs) may be issued. This change allows private activity on 

these types of projects, while maintaining the tax-exempt status of the bonds. 

Contrary to the claims of Brightline opponents, taxpayer's are not at risk by the use of Private 

Activity Bonds. The Federal government does not guarantee the bonds, subsidize the interest 

rate on the bonds, or assume any liability for the project. They do not impact the credit, 

borrowing or debt load capacity of the state, counties or municipalities. 

Private investors assume 100% of the risk and, while the investor receives a tax-credit, federal, 

state, and local governments receive millions of dollars in new tax revenue which result from 

the investment. 

In Florida, it is estimated that Brightline will generate more than $650 million dollars in tax 

revenue to federal, state and local governments and $6 billion in positive economic impact over 

eight years. 1 

As our project demonstrates, Brightline will continue to serve as an engine for growth and 

prosperity for Florida cities and local governments for years to come. 

It should be noted that in the United States there are only two privately led efforts to construct 

and operate intercity passenger rail, Florida's Brightline, and another in Texas. There are many 

other city-pairs across America with distances considered "too long to drive too short to fly" 

that can successfully and sustainably operate a passenger rail system without public subsidies. 

The old mantra that no passenger rail service can make money is simply not true. If improving 

our nation's infrastructure is truly a bi-partisan goal, as is often stated in Washington, then this 

is the kind of incentive that all should agree is most impactful on our economy and least 

impactful on taxpayers. Project such as this will jump start our national effort to repair our 

crumbling infrastructure and modernize our existing transportation systems, create jobs and 

generate new tax revenues. 

1 Washington Economics Group, May 2014 

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Safety 

This committee has also indicated its interest in our safety plan in the operation of this 

groundbreaking and transformative project Let me be clear, in the design and operation of 

this passenger railroad safety has always been our foremost goal. 

In phase two of this project, our existing railroad crossings will be significantly upgraded with 

additional safety components and traffic warning systems under the strict supervision of the 

Federal Railroad Administration (FRA) and Florida Department of Transportation (FOOT). 

Conducted by a team of engineers from FRA, FOOT, AAF, and each county and city public 

works department, every highway-railroad crossing between Miami and Cocoa was subject to 

on-site inspection and evaluation to determine the scope of improvements necessary for the 

operation of higher speed passenger rail. 

In the course of this evaluation, the FRA determined that they would require AAF to upgrade 

crossings to meet national "Sealed Corridor" standards. The Florida DOT Secretary reiterated 

this same requirement in a 2014 response to an inquiry from the Treasure Coast Regional 

Planning Council stating "We will require AAF to comply with the Federal Railroad 

Administration's guidelines for crossing safety as specified for higher speed passenger rail 

services. "2 

We have met those requirements, which have been confirmed by the FRA in separate 

correspondence, stating that AAF's "plans comply with the grade crossing mitigation 

requirements in FRA's Final Environmental Impact Statement (FEIS)."3 And in a follow up: "Let 

this email response serve as an official confirmation that the proposed set of grade crossing 

design plans (herein, "alternative design") as identified below still complies with the "Sealed 

Corridor" concept as outlined in FRA's Highway-Rail Grade Guidelines for High Speed Rail, 

conforms with the requirements of the ON-SITE FIELD ENGINEERING REPORTS, and meets 

the intent as specified inFRA's FEIS document dated August 2015."4 

2 June 4, 2014 letter from FDOT Secretary to the Treasure Coast Regional Planning Council 3 May 3, 2016 letter from Patrick Warren, Deputy Assoc. Administrator for Safety Compliance, FRA 4 August 24, 2016 email from Frank Frey, Acting Staff Director, Signal and Train Control Division, FRA 

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The efficiencies and safety benefits of major rail infrastructure and grade crossing upgrades of 

the level Brightline is installing is plainly illustrated in a 2015 safety study commissioned by 

Indian River County, one of those counties opposing this railroad. The report concluded that 

they "can find no decrease in Grade Crossing Safety with the advent of AAF. To IRC's benefit, 

the additional capacity improvements, other additional infrastructure, safety improvements, 

upgraded crossing warning devices (regulated by Federal Railroad Administration (FRA}, 

implementing suggestions for quiet zones, fencing, pavement markings, a public awareness 

campaign and a finding of no additional closure time with the additional trains, draws a 

conclusion that there is no adverse Safety impact to IRC from AAF. If the proposed upgrades 

actually occur, they will improve and update the safety factors that exist today." 

It should be noted that Indian River County, not satisfied with their consultant's conclusion, did 

not make public the report until questioned by the local newspaper. 

A major component of our commitment to safety was the restoration of the previously removed 

second track that will allow for joint freight and passenger use. The FEC Railway has always 

been considered the gold standard for safety and the early adoption of new technologies, such 

as the addition of Automatic Train Control (ATC) in the 1980's. ATC is a forerunner to PTC, 

which is currently being installed and will be operational by the end of 2018 in phase one. PTC 

will be fully installed in phase two by the time it begins service in 2021. 

We are one of the first railroads that will utilize a new technology, Vehicle Presence Detection 

(VPD), a warning system that will automatically open an exit gate for a vehicle stopped on the 

track while simultaneously warning an approaching train. 

In South Florida where Brightline began limited service in January, rail opponents to our north 

have highlighted recent fatalities as a reason to stop expansion to its waiting station in Orlando. 

One Member of Congress even demanded we shut down altogether. 

Let's look at facts. Not a single incident on our railroad has been due to a failure of safety 

systems associated with this rail service. Those who have been injured or tragically died have 

either ignored warning signals by crawling under a gate, going around a gate to beat the train, 

or have entered the corridor for purpose of suicide. 

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In fact, two people have committed suicide on our tracks since last year, with a third suspected 

but unconfirmed suicide. Suicide by rail is a major problem that should be addressed in another 

forum in the context of mental health issues and opioid abuse. 

Two other deaths have been the result of people willfully disobeying traffic warning signals, 

which is the same as running a red light and carries the same penalty under Florida law. 

Toxicology reports have confirmed each individual has been impaired by drugs or alcohol. 

Let me put this in context with some other statistics. In South Florida we have a nearby 

commuter rail (TriRail) that has been operating for about 30 years. In 2017 they recorded 17 

fatalities.; 

Central Florida's SunRail commuter rail has recorded nine fatalities in 2017, three of them ruled 

suicide. 

Florida is ranked number two in the nation in pedestrian deaths on highways with 652 deaths 

in 2016 and 303 in the first half of 2017.H 

Within Brightline's phase two operating corridor of the Treasure Coast counties, represented 

in part by the Member who requested this hearing, there were 655 pedestrian accidents 

resulting in 36 deaths in 2017m 

Railroads are among the safest forms of transportation. Less than 3% of all transportation 

fatalities are by train according to the National Safety Council statistics. 

However, be assured, Brightline is not content with simply accepting injuries and deaths when 

people trespass on active railroads or ignore warning signals. The key to safety is Education, 

Engineering & Enforcement. With these words as our guidepost, we have taken extraordinary 

extra steps to educate the public about safe behavior around railroads and to explore additional 

ways to reduces incidents. 

Since Brightline began service in January of this year, we have added a number of initiatives 

to our ongoing safety campaign: 

We have placed 20 Variable Message Signs (VMS) at major crossings with warning 

messages about new train activity 

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Working with Operation Lifesaver, we have trained 40 Brightline Teammates as 

authorized Operation Lifesaver Volunteers 

We have broadcast over 1000 public service announcements on TV and Radio in 

English, Spanish and Creole 

Brightline Teammates have been deployed at major highway- railroad crossings to 

meet with pedestrians, hand out flyers in nearby businesses, and engage and educate 

our South Florida communities about the importance of staying safe around active 

railroad tracks 

Brightline Safety and Security personnel have hosted more than a dozen First 

Responder training sessions 

More than 92,000 fliers with safety information have been distributed to families with 

school-age children. School children are given pledge cards where they pledge to 

never walk or bike along tracks, cross tracks when a train is moving and to "b safe" 

near railroads 

500 bus drivers have received training about train activity and safe driving near tracks. 

Brightline has employed off-duty police at key crossings to step up enforcement of 

trespassing laws 

Working with local cities, Brightline is installing additional safety features where 

feasible. 

Brightline is operating on a rail corridor that has been in continuous use since 1895, private 

property on which AAF/Brightline and Florida East Coast Railway share ownership. Having 

spent more than $1.5 billion dollars to date, none of which are taxpayer funds, we are 

committed to completing this rail system to Orlando, making real a long-sought Florida dream 

to give our 20 million residents and 115 million visitors an alternative to the highway. 

Strong statewide support of Brightline notwithstanding, the two counties opposing this 

passenger rail have made it clear their goal is to stop this private company from completing 

the system, thus preventing Brightline from using its private property to restore passenger rail 

to the corridor and provide this much needed public service to a growing state. 

To accomplish their goal, they have gone to great lengths to create fear among the general 

populace, conjuring up scenarios that defy logic and which have not been demonstrated to 

have occurred in other rail corridors around the nation. 

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To date, the two counties currently fighting Brightline have spent more than $7 million in tax 

dollars to fight this rail project. In January of this year, they filed their gth legal action against 

this project. They have been unsuccessful in their eight previous actions. 

It is unfortunate that a Committee of the United States Congress is now being used, while we 

are in litigation again, by a small group of rail opponents to referee a local dispute they have 

not won in court. 

We believe it would be more productive for them to sit down with us and engage in reasonable 

dialogue that can result in reasonable yet tangible benefits, a dialogue in which Brightline is 

more than willing to participate. 

As we approach our Miami service launch date, and continue work on the expansion of our 

system to Orlando, I welcome the opportunity to have any member of this committee visit our 

amazing stations in South Florida and enjoy a train travel experience that has already become 

the new benchmark for intercity passenger rail in America. 

Thank you for the opportunity to share these thoughts with you today. I am happy to answer 

any questions or comments you may have. 

'TriRail does not differentiate suicide from other categories 

"Spotlight on Highway Safety, Governors Highway Safety Association 

"' Florida Department of Highway Safety and Motor Vehicles 

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Mr. MEADOWS. Mr. Crandall, I’m going to recognize you, and I’ll 

give perhaps one just caveat based on Mr. Goddard’s opening remarks. 

Try to keep personalities out of it. And, Mr. Goddard, I don’t 

think it serves your case well when you call some of Mr. Posey and 

Mr. Mast’s constituents narrow-minded and obstructionists. But 

that’s mine. 

The rest of the panel, I would just encourage you to try to keep 

personalities out of it. 

Mr. Crandall, you are recognized for 5 minutes. 

STATEMENT OF ROBERT CRANDALL 

Mr. CRANDALL. Thank you, Mr. Chairman, Ranking Member 

Connolly, members of the subcommittee. Thank you for inviting 

me. My name is Robert Crandall. I live in the Treasure Coast region, and at one time I was chairman of American Airlines. 

CARE Florida, where I have served on the steering committee 

since 2014, is a coalition of Treasure Coast citizens and organizations trying to preserve the character of the several communities 

through which All Aboard Florida proposes to run 32 daily passenger trains at 110 miles per hour. 

I’m here to answer a straightforward question. Should this 

project be subsidized by Federal taxpayers? CARE Florida believes 

the answer to that question as no, for three reasons. 

First, the DOT’s allocation of $1.15 billion in private activity 

bonds, or PABS, to All Aboard Florida is improper, unlawful and 

in direct contravention of congressional intent. Second, because All 

Aboard Florida is unsafe as designed. And finally, because in 

CARE Florida’s judgment and mine, the project cannot be financially successful. 

I would like to spend the next couple of minutes addressing the 

PABs and then add a word on financial viability. 

All Aboard Florida portrays itself as a private enterprise, but it 

has demonstrated an insatiable desire for taxpayer-subsidized financing and is unlikely to be able to finance its project without it. 

In August of 2016, a U.S. District Court ruling on a DOT allocation of $1.75 billion, the original allocation, cited legitimate questions about All Aboard Florida’s commitment to completing the 

project without PABs. 

First of all, and I quote the Court, ‘‘PAB-based financing is not 

just the current financing plan, it appears to be the only financing 

plan.’’ And I ask that that ruling be made a part of this hearing 

record. 

Mr. MEADOWS. Without objection, so moved. 

Mr. CRANDALL. Unhappily, the U.S. DOT, in our judgment, does 

not have the statutory authority to allocate PABs for this type of 

passenger rail project. The Internal Revenue Code allows the 

issuance of tax-exempt PABs only if the project to be financed falls 

into 1 of the 15 specified categories on the chart. 

A high-speed intercity rail facility would qualify, but no one, not 

AAF and not DOT, disputes the fact that AAF is not high speed 

and does not qualify. 

DOT has chosen, therefore, to approve PAB allocations based on 

the theory that it is a qualified highway or surface freight transfer 


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facility. But AAF is a passenger railroad. It is not a highway. It 

is not a freight transfer facility. 

Nonetheless, DOT has allocated $1.15 billion, the largest PAB allocation to date, claiming that AAF can be considered a highway 

because once, years ago, the Florida Department of Transportation 

spent $9 million in Title 23 highway funds to improve highway rail 

crossings in the separately owned Florida East Coast Railway corridor in which AAF will run. 

In recent years, there have been several attempts, occasions, on 

which the Obama administration or individual Members of Congress have proposed to amend the statute to include passenger rail 

projects that do not meet the current high-speed definition. None 

of those proposals were ever enacted, but the fact that they were 

proposed is a clear admission that the authority does not exist. 

In closing, I would like to comment briefly on AAF’s projected financing. In order to succeed, they must obviously raise enough revenue to cover their costs. 

Twice, in 2013 and in 2017, they have commissioned revenue 

studies. In 2017, they proposed a study which increased the 2013 

assumptions by doubling fares and thereby increasing, according to 

this study, passengers by 52 percent and tripling revenue. 

Now, if anybody when I was running American Airlines had told 

me that we could change a route from a loss to a success by doubling our fares and would thereby triple our revenues, I would have 

paid little attention. 

We are glad this hearing is taking place. We are glad you are 

watching. We hope you will decide to end this debacle. 

Thank you very much. 

[Prepared statement of Mr. Crandall follows:] 


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Statement of 

Robert L. Crandall, on Behalf of 

Citizens Against Rail Expansion in Florida (CARE FL) 

Before the 

House Committee on Oversight and Government Reform 

Subcommittee on Government Operations 

Hearing on 

All Aboard Florida/Brightline 

Thursday, April19, 2018 

Chairman Meadows, Ranking Member Connolly and Members of the Subcommittee, 

thank you for inviting me to testify today on the All Aboard Florida passenger rail project. 

My name is Robert Crandall. I am the former Chairman of American Airlines and now live 

in the Treasure Coast region of Florida. I have served on the Steering Committee of Citizens 

Against Rail Expansion in Florida (CARE FL) since 2014. 

CARE FL is a coalition of Treasure Coast community leaders, organizations, and 

residents devoted to protecting the safety, welfare and way of life of the more than 10 

million people living in and around the areas that will be impacted by Phase II of the AAF 

project. All Aboard Florida proposes to run 32 new passenger train crossings per day up 

Florida's highly populated east coast at speeds of up to 110 mph. CARE FL opposes Phase II 

of the AAF project, which would run from West Palm Beach to Orlando-directly through 

the communities CARE FL represents. 

Today, I am here to answer a straightforward question: Should this project be 

subsidized by federal taxpayers? CARE FL believes the answer to this question is "NO"-

for three reasons. First, the U.S. DOT's allocation of $1.15 billion in private activity bonds 

(PABs) to All Aboard Florida is improper, unlawful, and in direct contravention of 

congressional intent. Second, because All Aboard Florida is inherently unsafe if operated at 
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the intended speed and finally, because in CARE FL's judgment, the project cannot be 

financially successful and could become a continuing taxpayer burden. 

I will leave the discussion of the project's serious safety concerns to my fellow 

panelist, Chief Dan Wouters from Martin County. Dylan Reingold oflndian River County 

will address the issue of safety costs being foisted on the local communities. I'd like to 

spend the next few minutes addressing the PABs and add a final word on financial viability. 

All Aboard Florida portrays itself as a private enterprise, but in reality, AAF has an 

insatiable desire for taxpayer subsidized financing and is unlikely to be able to 

finance its project without it. In August 2016, a U.S. District Court ruling on a prior DOT 

allocation of$1.75 billion in PABs to All Aboard Florida cited "legitimate questions" about 

All Aboard Florida's commitment to completing the project without PABs. The court 

stated: "First of all, PAB-based financing is not just the 'current financing plan' for the 

project-it appears to be the only financing plan."! I ask that this ruling be made a part of 

this hearing record, as read. 

As a result of litigation brought by Martin County, Indian River County, and CARE FL 

members, DOT withdrew the $1.75 billion PAB allocation to AAF in November 2016. 

Immediately thereafter, DOT approved a $600 million PAB allocation for use only on AAF 

Phase I (to replace very expensive debt issued earlier by AAF). Subsequently, on December 

20, 2017 All Aboard Florida sought an additional PAB allocation of $1.15 billion for use on 

Phase II. Not coincidentally, those two PAB allocations-$600 million for Phase I and 

$1.15 billion for Phase II-equal the same amount as the $1.75 billion PAB allocation that 

AAF sought in 2014, and that was later withdrawn in 2016. 

1 See page 9 of August 16, 2016 Memorandum Opinion from U.S. District Judge Christopher R. Cooper 

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PABs are not cost-free to the U.S. government. U.S. taxpayers foot the bill when 

the U.S. government treats PABs as tax-exempt. As the U.S. District Court highlighted in its 

August 2016 opinion, an economist found that the cost to taxpayers of the originally sought 

$1.75 billion PAB allocation would be up to $600 million over the first 10 years. 2 

More importantly, the U.S. DOT does not have the statutory authority to allocate 

PABs for this type of passenger rail project. This is evidenced by a straightforward reading 

of the Internal Revenue Code provision governing PABs and its legislative history. 

The Internal Revenue Code allows the issuance of tax-exempt PABs to finance a 

project only if it falls into one of 15 specified categories.3 A "high-speed intercity rail 

facility" would qualify if its trains are capable of traveling at speeds of more than 150 miles 

per hour, but AAF clearly does not qualify as "high speed" because its maximum speed is 

expected to be no greater than 125 miles per hour. No one-not even AAF or DOTdisputes the fact that an AAF train cannot achieve 150 miles per hour and therefore is not 

considered "high speed" under the statute. That should have been the end of the story. 

Unhappily, DOT has chosen to approve PAB allocations for the AAF project based on 

the theory that it is a "qualified highway or surface freight transfer facility."4 But AAF is a 

passenger railroad. It is neither a highway nor a freight transfer facility. 

2 See page 26 of August 16,2016 Memorandum Opinion from U.S. District Judge Christopher R. Cooper 3 The 15 categories are: "(I) airports, (2) docks and wharves, (3) mass commuting facilities, (4) facilities for the 

furnishing of water, (5) sewage facilities, (6) solid waste disposal facilities, (7) qualified residential rental projects, 

(8) facilities for the local furnishing of electric energy or gas, (9) local district heating or cooling facilities, (l 0) 

qualified hazardous waste facilities, (11) high-speed intercity rail facilities, (!2) environmental enhancements of 

hydroelectric generating facilities, (13) qualified public educational facilities, (14) qualified green building and 

sustainable design projects, or (15) qualified highway or surface freight transfer facilities." 26 U.S. C.§ 142(a) 

(emphasis added). 4 26 U.S.C. § 142(a)(l5) and (m) defines "qualified highway or surface freight transfer facilities" as follows: "(A) 

any surface transportation project which receives Federal assistance under title 23, United States Code (as in effect 

on the date of the enactment of this subsection), (B) any project for an intemational bridge or tunnel for which an 

international entitv authorized under Federal or State law is responsible and which receives Federal assistance under 

title 23, United States Code (as so in effect), or (C) any facility for the transfer of freight from truck to rail or rail to 

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Nonetheless, DOT has allocated $1.15 billion-the largest PAB allocation to date-to 

the AAF project, claiming that AAF can be considered a "highway" under the statute 

because, years ago, the Florida Department of Transportation spent $9 million in Title 23 

highway funds to improve highway-rail crossings on the separately owned Florida East 

Coast Railway (FECR) corridor in which AAF will run. DOT has bonded out an entire 

passenger rail project based on the fact that a few Title 23 highway dollars were used in 

years past to improve highway-rail intersections. 

This interpretation is clearly at odds with what Congress intended. In 2005, when 

considering the SAFETEA-LU transportation bill, Congress enacted Section 142(m) to add 

new types of projects to the then existing list of categories eligible for tax exempt PAB 

allocations. When doing so, Congress intentionally omitted lower speed passenger rail 

projects from the list of eligible projects, presumably due to fiscal concerns. Congress 

never intended to hand the Executive Branch a blank check for non-qualified projects, and 

DOT's actions are a blatant and contemptuous attempt to circumvent the statute. 

In the years that followed the enactment of SAFETEA-LU, there were several 

occasions on which the Obama Administration or individual Members of Congress 

proposed to amend the statute to include passenger rail projects that do not meet the 

current "high speed" definition of 150 mph. None of these proposals were ever enacted, 

but the fact that they were proposed is a clear admission that the authority was not granted 

under SAFETEA-LU. Your former colleague, West Virginia Congressman Nick Rahall (DWV)-the longest serving Member of the Transportation and Infrastructure Committee in 

truck (including any temporary storage facilities directly related to such transfers) which receives Federal assistance 

under either title 23 or title 49, United States Code (as so in effect)." 

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the history of the committee-set forth these facts in a 2015 declaration, detailing how it 

was not Congress' intent to do so. I ask that his declaration also be made a part of this 

hearing record as read. 

Further, on February 12, 2018, the Trump Administration released its 

Infrastructure Plan, which contradicts DOT's theory that passenger railroads are highways. 

The Plan proposes a "modified description" of 142(m) to include passenger railroads.s 

Again, this appears to be an admission that the current Administration knows it does not 

have the authority under current law to bond out a passenger rail project as a highway. 

DOT is deliberately subverting the rule of law by doing so. 

In closing, I'd also like to comment on AAF's projected finances. The project's 

financial success is dependent on selling enough tickets at an appropriate price to generate 

enough revenue to cover its costs. In 2013, a ridership and revenue study prepared by the 

Louis Berger Group-a firm that, incidentally, has been debarred by the World Bank and 

has pled guilty to conspiring to defraud the U.S. AID- prepared ridership and revenue 

predictions for AAF. In 2017 the same firm prepared an updated study in support of AAF's 

most recent PAB application. 

The new study is wildly more optimistic than the 2013 version. The 2013 expected 

average fare of$15.71 has more than doubled to $32.70 while the number of passengers 

has increased from 1.94 million to 2.94 million. Using these assumption, the 2017 study 

projects 2020 revenue of $96 million, 3 times the amount projected in 2013. In my former 

life, as Chairman of American Airlines, I would have paid slight attention to anyone who 

5 "qualified surface transportation facilities, including roads, bridges, tunnels, passenger railroads, surface freight 

transfer facilities, and other facilities that are eligible for Federal credit assistance under title 23 or 49 (i.e .. qualified 

projects under TIFIA) (existing category with modified description)." (emphasis added) 

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brought me numbers suggesting that doubling our fares would drive a 52% increase in 

passengers and a tripling of revenue. Despite their implausibility, these projections are the 

basis for the marketing of the PABs and the success of All Aboard Florida's passenger 

trains. In November 2017, Indian River County, Martin County and CARE FL submitted a 

detailed letter addressing these concerns to Florida's Joint Legislative Auditing Committee 

(I LAC). I would like to submit that letter for the record, as read. 

Mr. Chairman, I know that fiscal responsibility is important to you and the other 

Members of this Committee on both sides of the aisle. The Subcommittee's role is to 

oversee the operations of the federal government. In this instance, I think the government 

is authorizing improper financing and thus misusing taxpayer dollars on behalf of an 

inherently unsafe and likely unsuccessful venture. I am glad you are watching and hope 

you will decide to end this debacle. 

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39 

Mr. MEADOWS. Thank you, Mr. Crandall. 

Chief, you’re now recognized for 5 minutes. 

STATEMENT OF DAN WOUTERS 

Chief WOUTERS. Thank you very much. 

Chairman Meadows, Ranking Member Connolly, and members of 

the subcommittee, thank you very much for inviting me to testify 

here today on the All Aboard Florida passenger rail project. 

My name is Daniel Wouters. I’m a division chief for the Fire Rescue Department in Martin County, Florida. 

Martin County is located in the Treasure Coast region and has 

151,000 residents and 538 square miles. As the division chief, I’m 

responsible for emergency preparedness, response, and field operations in the county. 

Within the Florida East Coast Railway in which the All Aboard 

Florida high-speed passenger train project is proposed, Martin 

County has 27 at-grade crossings. Currently, 10 to 14 freight trains 

pass through our region at speeds typically between 30 to 40 miles 

per hour. 

On the upgraded rails, All Aboard Florida and FECR plan to run 

32 high-speed passenger trains up to 110 miles per hour and 

freight trains up to 70 miles per hour through our community. The 

significant increase in the numbers and speeds of those trains passing through our traffic-congested at-grade crossings will negatively 

impact public safety. 

The project will quadruple our railroad crossing closures, resulting in additional delays for fire rescue. The survivability of patients 

decrease each minute these services are delayed. The potential for 

injuries and fatalities is real, not hypothetical. 

According to the FRA accident/incident overview from 2011 

through 2017 in the FECR corridor, 107 fatalities and 191 injuries 

occurred, with 16 fatalities and 33 injuries in 2017 alone. If 32 

high-speed passenger trains as well as additional faster freight 

trains are added, statistically these fatalities and injuries will increase based on the current trends. 

In fact, this is already occurring. Since the start of the AAF trial 

runs between West Palm Beach and Fort Lauderdale, the All 

Aboard Florida trains have struck and killed five people and injuring others in separate incidents, involving pedestrians, bicyclists, 

and motorists. 

When busy traffic occurs on roadways, motorists can inadvertently get caught at traffic signals, resulting in them stopping on 

the rails. 

Two such incidents occurred on February 14 and March 10 of 

2018. In one incident, a vehicle followed another onto the tracks, 

which had inadvertently stopped, leaving it stranded. In the second 

case, an elderly driver stopped for a red light when the crossing 

guards came down. The two incidents I referenced occurred in the 

span of less than a month on just a 46-mile short span. 

In 2017, our response vehicles crossed the railroad tracks approximately 17,000 times responding to incidents as well as transporting patients to area hospitals. Based on the estimated increase 

in the rail traffic, there will be substantially more delays if the All 


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Aboard Florida project proceeds as planned due to a lack of grade 

separation through our community. 

In our downtown area, a nearly 100-year old single-track bridge 

still exists. A parked freight train waiting to pass another train 

could substantially cause delays to our downtown community and 

impact public safety and response to hospitals. 

Within the increased potential of collisions comes the potential 

for devastating chemical releases. To make this point, I would like 

to refer to a chart I have on the easel. 

In 2015, Martin County conducted a vulnerability analysis to examine the potential for an impact of a single rail car crash resulting in a chemical release. This slide shows the potential for catastrophe based on the rail corridor proximity to the community. 

If you’ll notice in the shaded areas, the red areas are where patients would have life-threatening injuries, in the orange areas, serious, irreversible conditions, and the yellow area where they would 

have effects as well. 

I summarize by simply stating that this shows a potential for significant harm to occur due to the track 

s proximity to that of Martin County. 

There are additional harmful impacts such as no pedestrian 

crossings at 10 of the 27 at-grade crossings in Martin County. All 

Aboard Florida has told the county that local taxpayers will be responsible for 100 percent of those costs to add those safety features. 

As well, with the increase in the additional track, there will be 

insufficient spacing at some locations for buses to stop between the 

traffic light and the rail. Because of this, it’s essential that the installation of vehicle presence detection as well as dynamic exit 

gates are installed at all of the crossings. 

Martin County is gravely concerned about the public safety risks 

and the increase in the proposed All Aboard Florida project. 

Mr. Chairman, the FRA approved a $1.15 billion bond allocation 

for this project based on a FEIS and the ROD that contained critically deficient safety analysis and recommendations. Given the 

track record for injuries and fatalities within the rail corridor, the 

FRA’s decision to approve the project without the safety measures 

we have sought is both startling and dangerous. 

Thank you very much. 

[Prepared statement of Chief Wouters follows:] 


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STATEMENT OF 

DANIEL J. WOUTERS, FIRE RESCUE DEPARTMENT DIVISION CHIEF 

MARTIN COUNTY, FLORIDA 

BEFORE THE 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

HEARING ON 

ALL ABOARD FLORIDAIBRIGHTLINE 

THURSDAY, APRIL 19,2018 

Chairman Meadows. Ranking Member Connolly and Members of the Subcommittee, 

thank you for inviting me to testify today on the All Aboard Florida (AAF) passenger rail 

project. My name is Daniel Wouters, and I am a Division Chief of Martin County's Fire Rescue 

Department, responsible for emergency preparedness, response and field operations. Martin 

County is located on the east coast of Florida and is the next county north of Palm Beach 

County. Martin County's population is about 151,000, a majority of whom live near the Florida 

East Coast Railway corridor (FECR). 

AAF is proposing to add 32 high speed passenger train crossings per day within the 

FECR corridor. Martin County has 27 street level or "at-grade" road crossings and Indian River 

County has 31 at-grade crossings within the corridor. The significant increase in the number of 

trains passing through these traffic congested at-grade road crossings will impact public safety 

because it will increase delays for fire rescue calls due to the increase in train crossings. Road 

closures will quadruple, blocking fire rescue units from crossing to rescue a person in need of 

emergency services or transport. Survivability of patients decreases with each minute the 

services are delayed. 

Presently there are about 10 to 14 freight trains travelling in the corridor each day. In 

2013 and 2014, we experienced about 238 railroad crossing delays. These delays are small 

considering last year our rescue vehicles cross the railroad tracks approximately 11.500 times 
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while responding to incidents and more than 5,600 times when transporting patients to area 

hospitals. 

There will be substantially more delays if AAF proceeds as planned through Martin 

County. If AAF proceeds, the U.S. DOT estimates there will be about 52 train crossings per day, 

both passenger and freight. Half of our emergency response zones for each fire rescue station 

will be negatively impacted in transporting the critically ill or injured to hospitals, which will 

take much more time. These are health emergencies in which literally every second counts. 

In addition to the effects of increased road closures in the normal course of train travel. 

the County's Fire Rescue operations will also experience potentially deadly delays when trains 

are staged on the tracks waiting for other trains to pass, creating even more delays. A parked 

freight train can be a mile long or more and could block 10 consecutive at-grade intersections 

near our main and most important hospital. 

Why would such a train be parked? Because a nearly 100-year-old single-trackdrawbridge that currently takes 20 minutes to close and reopen will be required to be "down" for 

each of the 32 passenger trains and 14 to 20 freight trains each day. If the bridge is not yet 

down, trains have to idle and stop, creating a bottle neck for trains on each side of the old bridge. 

The bottleneck will cause blocking at the at-grade road crossings, delaying public safety 

responders. I cannot overstate my concern that these delays could significantly impact the level 

of service adopted by Martin County to respond to emergencies. 

By contrast. Palm Beach County immediately south of Martin County has about 10 times 

as many people and thus has more fire stations on both sides of the rail corridor to serve its much 

greater population, so the impact there on rescue services will be less. 

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Another impact to public safety results from the increased likelihood of collisions 

because the high speed passenger trains will be sharing the corridor with freight trains. CmTently, 

freight trains typically travel in Martin County at speeds ranging from 30-40 mph. On the 

upgraded rails, AAF and FECR plan to run freight trains up to 70 mph, as long as 2 miles in 

length. in the same corridor as passenger trains up to the 11 0 mph. This increase in both the 

number aud speed of the trains-with both the high speed passenger trains and slower, longer 

freight trains sharing the tracks-significantly increases the probability of trains colliding with 

pedestrians, bicyclists, citizens in cars, children in school buses. as well as the possibility of 

these passenger aud freight trains colliding with each other as they travel in the same corridor. 

This potential for injuries and fatalities is .r£1!!, not hypotl1etical. According to an FRA 

Accident/Incident Overview on the FECR from 2011 through 2017, nmnerous fatalities and 

injuries occurred along the existing FECR corridor from slow-moving freight trains. FRA data 

lists a total of 107 fatalities and 191 injuries from 2011 through 2017, with 16 fatalities and 33 

injuries occurring in 2017 alone. If 32 high-speed passenger trains aud 20 faster freight trains 

are added to these tracks, statistically these fatality and injury figures will increase. 

In fact, this is already occurring. During trial runs for Phase I, AAF passenger trains 

killed two pedestrians in separate incidents-in July 2017 and November 2017. Further, since 

beginning limited Phase I service between West Palm Beach and Ft. Lauderdale--a 46-mile 

route-in January 2018, AAF trains have struck and killed three additional people and injured 

others in separate incidents involving pedestrians, bicyclists and motorists. 

When traffic builds on busy roadways. including at intersections near the at-grade rail 

crossings. motorists can inadvertently get caught on the tracks due to the changing of a traffic 

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signal when the traffic suddenly stops, leaving a car on the tracks between the signaling devices. 

Two recent incidents of this type along Phase I evidence this type of scenario. 

On March I 0, 2018 in the short operating segment of Phase I. an All Aboard Florida train 

hit a car that was stopped on the tracks. The car followed the vehicle in front of it onto the 

tracks. It then was stranded. Fortunately, the driver was able to exit the vehicle and survived, 

but had she not gotten out of the car, it could have been a very different outcome. A similar 

incident occurred on February 14, in which another car was hit by a train. However, in that 

instance, the elderly driver-who was in his vehicle stopped for a red light when the crossing 

gates went down-was injured, as he was unable to exit his vehicle before it was struck. The 

two incidents I just referenced occurred in the span of less than a month on a short 46-mile route. 

Similar incidents could occur in Martin County. For example, a student drop off area for 

a local elementary school is located in close proximity to an at-grade rail crossing. On a daily 

basis, parents line up in their vehicles to drop off or pick up their kids, resulting in vehicles idling 

in lines that usually span the crossing of the railroad. We all know the cars are not allowed to idle 

on the railroad tracks. However, we also know that it only takes one inadvertent error or a car in 

front of another unexpectedly stopping that could result in a tragic accident. 

Martin County is also deeply concerned with the fact that there are currently no 

pedestrian crossing facilities at I 0 of the 27 at-grade crossings in Martin County, meaning that 

pedestrians and bicyclists can only cross the rail tracks in the roadway. AAF has told the County 

if the County wants pedestrian crossings, the County will have to pay tor them in full. 

We are also concerned for our school buses. In our community, approximately 190 

school buses travel over the FECR at-grade crossings each day, with each bus being 40 feet long. 

After the addition of a second rail, many crossings in Martin County will have no more than 23-

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30 feet of storage space between the rail and parallel roadway. We are concerned school buses 

could get unintentionally stuck on the tracks, just like the two cars I mentioned earlier. because 

of the insufficient storage space. Installation of Vehicle Presence Detection and Dynamic Exit 

Gates is essentiaL 

Beyond these numerous concerns caused by the at-grade crossings, the County also is 

worried about the risk of train derailments and resulting collisions with vehicles, as well as other 

passenger or freight trains. as such incidents pose a serious threat of catastrophic damages for 

Martin County citizens. Again, this risk of collision or derailment is not hypotheticaL On 

February 11, 2017, an AAF passenger train derailed during a test run, causing hundreds of 

thousands in damages and raising further questions as to the safety of the AAF trains and their 

failure to notifY the public about the event. 

Another safety issue is the potential for a devastating chemical release in Martin County. 

To make this point, I would like to put up a visual. 

In 2015, my team conducted a Vulnerability Analysis to analyze the potential impact of a 

railcar crash resulting in a chemical release in Martin County, using software available from the 

U.S. Environmental Protection Agency and analyzing chemicals typically transported on FECR 

freight trains. In this slide, we see the potential for catastrophe based on the accidental release of 

just.!!.!!£ chemical on.!!.!!£ freight car in the rail corridor where- if the AAF project proceedsthese faster freight trains will be sharing the tracks with high speed passenger trains. 

The analysis shows the potential for significant harm should an incident occur on the 

tracks within Martin County. The degree of impact would vary based on the specific chemical 

release, amount of the release. the location and the wind conditions, but, as you can see, the 

potential for catastrophic harm is very real. 

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Mr. Chairman, the FRA approved a $1.15 billion bond allocation for this project based on 

a FEIS and ROD that contained critically deficient safety analyses and recommendations. 

Given the track record of injuries and fatalities within the rail corridor, the FRA's decision to 

approve the Project without the safety measures we have sought is both startling and dangerous. 

6 
47 

Mr. MEADOWS. Thank you, Chief. 

Mr. Reingold, you’re recognized for 5 minutes. 

STATEMENT OF DYLAN REINGOLD 

Mr. REINGOLD. Thank you, Chairman Meadows. 

Thank you Ranking Member Connolly. 

Mr. MEADOWS. You may want to pull that a little bit closer. 

We’re getting older and our hearing is not quite as good as it used 

to be. 

Mr. REINGOLD. Thank you for allowing me to testify today. My 

name is Dylan Reingold. I’m the county attorney for Indian River 

County. 

Indian River County is a small county located on the east coast 

of Florida. It is south of Kennedy Space Center and north of West 

Palm Beach. We have approximately 146,000 people who live in Indian River County, mostly in the population centers of the city of 

Vero Beach and Sebastian. 

As you may know, All Aboard Florida’s proposed Brightline service will travel from Orlando to Miami, with stops in Fort Lauderdale and West Palm Beach. It will then zip through Indian River 

County and our 31 at-grade highway railway crossings and near 

businesses and schools and residences at over 100 miles an hour. 

Please understand that safety is our biggest concern. However, 

that issue will be addressed by other speakers today. I will, therefore, focus upon the financial impact that All Aboard Florida will 

have upon local governments like Indian River County. 

The higher-speed passenger rail project is subject to the National 

Environmental Policy Act. In NEPA documents, the Department of 

Transportation has stated that it expects Indian River County to 

pay for the maintenance of safety improvements at at-grade crossings for eternity. 

Let me repeat that, because that is very important to my community. The United States Department of Transportation and the private company funded by a Japanese hedge fund expect Indian 

River County and other local governments to pay for the maintenance of those safety improvements at the crossings in eternity. 

We know where this theory originated. Indian River County currently has license agreements with the Florida East Coast Railway 

for the crossings within the jurisdiction. 

The truth is FECR has these agreements with local governments 

up and down the east coast of Florida. That is because the railroad, 

which was built approximately about 1925, existed long before the 

highways and roads that were necessary to support a population 

that has since grown by 10,000 percent. 

So Indian River County, like our sister communities to the north 

and south of us, have funded this arrangement with FECR for 

many years, which, may not necessarily be fair, represents the status quo. 

Now, All Aboard Florida is demanding to piggyback off these arrangements and to change the terms of the deal. This cannot be 

permitted. This is an unfunded mandate upon the local governments. 

First, All Aboard Florida is not an affiliate company, it is not a 

sister company of FECR. It is a separate company. 


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Second, the speed of All Aboard Florida is nothing—well, at least 

it was not contemplated when these agreements were executed by 

the parties. The existing railway corridor in Flagler’s east coast 

railway time period has never had a higher-speed passenger rail 

system. The original service was slow, it had many stops. It ceased 

to exist in 1968. And the evidence of this is that you have 159 atgrade crossings in populated areas between West Palm and Cocoa. 

To allow for the increase in speed is unconscionable. These trains 

will travel at more than three times the average speed of the current freight trains today. And the steep increase in these speeds 

mandates the need for improvements at the highway grade crossings. 

While All Aboard Florida has recently offered to pay for the installation of these improvements, it still expects and demands that 

local governments, like Indian River County, pay for the maintenance of these facilities forever. An initial cost estimate performed 

by Indian River County estimated that this will cost Indian River 

County approximately $8.2 million through 2030, which is a significant sum of money for a small county like ours. 

In closing, I want to say that Indian River County prides itself 

on being a fiscally conservative county. We keep our taxes low. We 

limit the size of our government. But we won’t be able to limit the 

cost that we spend on the maintenance of these facilities. That is 

because local governments like ours have absolutely no control over 

the cost of the maintenance for these facilities. 

So in closing, I specifically want you to remember two things. 

One, we are concerned about safety. And two, we do not want the 

bills for these safety and maintenance costs to come from the pockets of our constituents. That is unacceptable. 

Thank you very much. 

[Prepared statement of Mr. Reingold follows:] 


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STATEMENT OF 

Dylan Reingold, County Attorney 

Indian River County, Florida 

BEFORE THE 

House Committee on Oversight and Government Reform 

Subcommittee on Government Operations 

HEARING ON 

All Aboard Florida/Brightline 

Thursday, Apri/19, 2018 

Thank you, Chairman Meadows, Ranking Member Connolly and Members of the 

Subcommittee, for inviting me to testify today. My name is Dylan Reingold. I am the County 

Attorney for Indian River County. Indian River County is located on the east coast of Florida in 

the Treasure Coast, south of the Kennedy Space Center and north of Palm Beach County. Indian 

River County has approximately 146,000 people, many located in and around the population 

centers of the City of Vero Beach and the City of Sebastian. 

As you may know, All Aboard Florida's proposed Brightline service would be a higher 

speed passenger rail system proposed to travel between Miami to Orlando, with stops in Ft. 

Lauderdale and West Palm Beach. All Aboard Florida will zip through Indian River County, and 

its 31 at-grade railroad-highway crossings near schools, churches, businesses and residences, at 

over 100 miles per hour. Our community has significant concerns related to the safety ofthis 

project. That issue, however, will be addressed by other speakers today so I am going to focus 

on the financial burden All Aboard Florida's Brightline system will place on Indian River County, 

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the State of Florida, the federal government, and every other local government along its 

projected path. 

In 2013, All Aboard Florida claimed to be a privately owned, privately funded project. As 

a conservative County, the Board of County Commissioners thought this was fair. However, 

after meetings with the executive team for All Aboard Florida and its parent company, Florida 

East Coast Industries, it became apparent that this "private company" intended to pay for its 

"private project" with subsidies from the federal, state and local governments. Importantly, 

while the U.S. DOT and the State of Florida have chosen to fund this venture, local 

governments, like Indian River County, are not being given a choice- and are being mandated 

to pay for portions of this project. 

The underlying higher-speed passenger rail project is required to comply with the 

National Environmental Protection Act (NEPA). In the NEPA documents, the U.S. DOT expressly 

stated that it expects Indian River County to pay for the costs to maintain the necessary safety 

improvements at all ofthe at -grade railroad highway crossings in perpetuity without any legal 

basis for this conclusion. Let me say that again because it is very important ... the U.S. 

Department of Transportation as well as this privately owned company that is ultimately owned 

by a Japanese hedge fund, Softbank, expects local governments like my community to pay for 

the maintenance of its "private" passenger rail project for eternity. 

We know where this payment theory originated. Indian River County currently has 

license agreements with the Florida East Coast Railway for each of the at-grade railroad 

highway crossings within its jurisdiction. The truth is, Florida East Coast Railway has these 

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agreements with all of the local governments up and down the east coast of Florida because, in 

most cases, the railroad-built around 1925-existed before the highway and roads necessary 

for a population that has since grown 10,000 percent. Indian River County, like its sister 

communities to the north and south, has funded this arrangement with the FEC Railway for 

many, many years, which not particularly fair, represents the status quo. 

Now All Aboard Florida wants in on this arrangement. Not only is it seeking to piggyback 

off of these pre-existing agreements. It wants to dramatically change the underlying terms. 

This cannot and should not be permitted! It is an unfunded mandate unilaterally dumped on 

the local taxpayers. 

First of all, All Aboard Florida is not an affiliate or sister company of Florida East Coast 

Railway. All Aboard Florida is a separate company. 

Second, the speed of All Aboard Florida's Brightline service is unlike anything ever 

contemplated when the FEC crossing agreements were signed. Contrary to what All Aboard 

Florida has told the federal government, and likely members of Congress, the existing rail 

corridor has never in the history of Flagler's Florida East Coast Railway seen a higher speed 

passenger rail system. The original passenger rail service was slow and had stops all along the 

corridor. It ended in 1968. This is evidenced by the current design of the Florida East Coast 

Railway corridor, as it has approximately 159 at-grade railroad highway crossings that traverse 

through populated urban areas between West Palm Beach and Cocoa, Florida. The idea of 

operating a higher speed passenger rail at speeds up to 110 mph through these now urban 

areas is simply unconscionable. It is more than three times the average speed at which the FEC 

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trains operate today. This steep increase in speed will result in the need for additional safety 

improvements at all of the at grade railroad-highway crossings. While, All Aboard Florida has 

promised to pay for the initial installation costs of these safety improvements, its parent 

company, Florida East Coast Industries, has made it clear that it will only do so in exchange for 

Indian River County's agreement to pay for the costs of maintaining such facilities in perpetuity. 

An initial calculation performed by Indian River County estimates that these long term 

maintenance costs will be $8.2 million through 2030 for our community alone-a significant 

sum for our small County. Consequently, the local taxpayer in Indian River County will be 

paying for the permanent safety improvements for this passenger train, forever. Payments in 

perpetuity for a train that does not stop here, but does bring clear and significant threats to our 

community. 

In closing, I want to take this opportunity to say that Indian River County prides itself on 

being a fiscally conservative community. The Board of County Commissioners does everything it 

can to keep taxes low and limit the size of government, but we will be unable to limit the future 

costs of this project on our local taxpayers. This is because Indian River County has no say 

whatsoever in how much those safety costs will be. So when you hear All Aboard Florida say 

that we are a bunch of NIMBYs, or that we are angry because we do not have a stop in our 

community, I ask that you remember two things-we are opposed to Brightline because it is 

not safe and because All Aboard Florida is seeking to pay its bills with taxpayers dollars from the 

pockets of our constituents. This is not ok. Not now. Not ever. 

4 
53 

Mr. MEADOWS. Thank you, Mr. Reingold, for your testimony. 

As a personal note, probably way before your time, some 40 years 

ago, when there was a younger, thinner, more agile individual, I 

used to take highway 60 across from Brandon Florida, to surf at 

Sebastian Inlet. And so that was my indoctrination to Indian County. 

I’ll now recognize the gentleman from Florida that has been a 

strong advocate, along with the gentleman to his left, Mr. Posey, 

on this particular issue, the reason why we’re having this hearing, 

Mr. Mast, for a series of questions. 

Mr. MAST. Chairman, I’m going to have to think about you with 

surfer hair for a while now. 

Thank you all for being here. 

Mr. Goddard, I thank you for taking the time to be here for this 

hearing. Just with a couple of for-the-record questions. 

Do the All Aboard Florida trains currently operate in speeds of 

excess of 150 miles per hour? 

Mr. GODDARD. No, they do not. 

Mr. MAST. Thank you, sir. 

Mr. Burthey, did the Department of Transportation approve 

$1.15 billion in private activity bonds to All Aboard Florida as a 

qualified highway or surface freight transfer facility? 

Mr. BURTHEY. Yes. 

Mr. MAST. Thank you. I’d like to think that if Congress wanted 

to fund trains through the private activity bond process outside of 

those that are high speed, those in excess of 150 miles per hour, 

they would have put that into the list of 15 eligible projects for private activity bonds. 

Mr. Burthey, Section 142, Title 26, it does define eligibility for 

private activity bonds: A qualified highway or surface transfer facility is any surface transportation project which has received Federal assistance under Title 23. 

So I want to ask, did any Title 23 money go to the All Aboard 

Florida project? 

Mr. BURTHEY. Thank you for the question, Congressman. 

In the application from All Aboard Florida that the Department 

of Transportation received, All Aboard Florida indicated that over 

2012, 2013, and 2014 Title 23 funds were used on the corridor. 

That was after the announcement from—— 

Mr. MAST. The corridor or the All Aboard Florida project? 

Mr. BURTHEY. I’m sorry? 

Mr. MAST. The corridor being FEC corridor or the All Aboard 

Florida project specifically? 

Mr. BURTHEY. The corridor on which the All Aboard Florida 

trains will run. 

Mr. MAST. So if All Aboard Florida did not specifically receive 

funds, I would wish that the Department would withdraw their 

award letter for private activity bonds. 

But I would ask, was there actually moneys distributed or deposited to All Aboard Florida specifically, that project? Were there 

moneys distributed into an account for a surface transportation 

project to All Aboard Florida? 

Mr. BURTHEY. The Florida Department of Transportation manages Title 23 funds in the State of Florida. 


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Mr. MAST. So are you saying not to the best of your knowledge 

were dollars specifically put into an All Aboard Florida account, 

they went to FDOT, Florida Department of Transportation? 

Mr. BURTHEY. We are not aware of any funds going to an All 

Aboard Florida account; however, the application which the Department of Transportation reviewed did indicate that funds were 

used by the Florida Department of Transportation from Title 23 on 

the corridor on which the All Aboard Florida trains run, enabling 

it to be eligible for assistance under private activity bond statute. 

Mr. MAST. Thank you for that. And I think this is an important 

point of what we’re getting at here, and it has a very broad implication for what goes on with private activity bonds across the 

breadth of this country. This is the problem. 

Congress has given a list of projects to provide private activity 

bonds to. As it relates to rail, Congress said very specifically high 

speed rail, over 150 miles per hour. You said, for the record, that’s 

not you. We’re not disputing that. Nobody is. 

So what we’re using here is this kind of doublespeak that I think 

often ticks people off, where everybody is labeling this train something that it’s not. We’re saying because it once, in one section of 

the corridor, not even the same project, had some infrastructure 

upgrades done to the project, that by that rational an intersection 

was fixed somewhere on the rail, that an entirely new project is 

subject to being eligible for private activity bonds. And I think 

that’s what we’re getting at here. 

I would like to get to something else very quickly here. 

Mr. Goddard, All Aboard Florida CEO Mike Reininger testified 

in June of 2017 on the T&I Committee that I sit on. He testified 

to me that All Aboard Florida is not publicly funded at all, it is 

completely an investment of private sector capital. 

However, Brightline’s private activity bond application from December of 2017 reads: The project has received financial assistance 

under Title 23, that is the Federal assistance, and eligibility for 

private activity bonds under Title 26 mandates that the financial 

assistance is, in fact, Federal assistance. 

So my question would be, when the CEO, Mike Reininger, testified before T&I in that time, was he lying to me when he said that 

the Brightline project hadn’t received any Federal funding? Or was 

there a lie to the Department of Transportation on the application 

in saying that private activity bonds are eligible because they have 

received private assistance? That to me sounds like two completely 

different answers. 

Mr. GODDARD. No, he did not lie. He do not lie to you. That funding was relative to safety improvements. 

Mr. MAST. And with that, my time has expired, and I will yield 

back. Thank you. 

Mr. MEADOWS. The chair recognizes the gentleman from Virginia 

for a series of questions. 

Mr. CONNOLLY. I thank the chair. 

I thank the panel for being here. 

Mr. Burthey, we heard the testimony. Mr. Crandall says, inter 

alia, that this is a misuse of PABs, and it’s pretty clear in the code 

this the a circumvention of that. 


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Chief Wouters talks about safety, that there are inherent safety 

problems giving at-grade crossings, multiple at-grade crossings, 

that put the public at risk, and were never intended—never intended—for a train of this kind of capacity, speed-wise, putting the 

communities at risk. 

Mr. Reingold makes an argument that, as somebody who comes 

from local government, I can sympathize with, that in effect, 

whether by design or not, approving this project puts a permanent 

unfunded mandate on local governments to maintain whatever 

safety measures are put into place or not put into place from now 

until the end of time. 

Any of these concerns factor into the decisions at the Department 

of Transportation about this project? 

Mr. BURTHEY. Thank you, Congressman. 

So to be clear, the Department of Transportation’s responsibility 

in providing an allocation for private activity bonds is to determine 

statutory eligibility. And the Department has historically interpreted any surface transportation project that utilizes Title 23 

funds to be eligible for the phrase ‘‘qualified highway or surface 

freight facility.’’ 

Mr. CONNOLLY. Mr. Burthey, is it your testimony that upon that 

examination, irrespective of these concerns, the Department determined it was qualified? 

Mr. BURTHEY. The Department determined that the application 

met the statutory eligibility to being able to use private activity 

bonds. 

Mr. CONNOLLY. So not to create the argument, because I don’t 

wish to have the litigation by surrogate here, but so you take direct 

issue with Mr. Crandall’s testimony that it most certainly does not? 

Those are two pretty different interpretations of the code. 

Mr. BURTHEY. We do take issue with his interpretation. Our interpretation is that by statute any surface transportation project, 

which obviously a passenger rail train is a surface transportation 

project, any surface transportation project that utilizes Title 23 

funding is then eligible as a qualified highway or surface freight 

transportation project. 

Mr. CONNOLLY. Mr. Goddard, you heard the testimony of the 

three folks to your left. What is the reaction of Brightline to the 

substance of these concerns in terms of unfunded mandates, safety, 

and for that matter, eligibility? 

Mr. GODDARD. Thank you, Congressman. 

So we’ve been questioned on these issues for several years. We’ve 

been through several lawsuits on PABs, on safety, on whether or 

not we meet the criteria. We have prevailed up until this point. We 

continue to engage in dialogue with our opponents relative to these 

issues, and we seem to be talking past each other. 

Mr. CONNOLLY. But I’m asking a different question. Holding in 

abeyance for litigation and who is an opponent and all of that, I’m 

familiar with lots of different passenger rail systems, commuter 

rail, for example. And I’ll take the western suburbs of Chicago, one 

I’m quite familiar with. They don’t go 110 miles an hour. 

Mr. GODDARD. Yeah. 

Mr. CONNOLLY. They have a lot of at-grade crossings, but they 

also have safety provisions in place. And they can live peaceably 


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side-by-side. And in fact communities have grown up around the 

stations and it’s almost a way of life, but it works. But it wouldn’t 

work at 110 miles an hour, I don’t think. 

So what is your substantive reaction to—— 

Mr. GODDARD. Yeah. 

Mr. CONNOLLY. If I had, I think you said Mr. Reingold, 39 crossings? 

Mr. REINGOLD. Ranking Member, we have 31. 

Mr. CONNOLLY. Thirty-one. 

So if I’m a small county and I got 31 crossings, I have a legitimate concern about safety. What are you going to do about that? 

How can you help us address that, ameliorate that concern? 

Mr. GODDARD. Again, safety, the safety of train travel has been 

demonstrated, and, again, as substantially safer than traveling by 

car. 

I can tell you that passenger rail happens every day in this country, all over this country. Our corridor meets the sealed corridor requirements as determined by the FRA. 

We don’t actually set—— 

Mr. CONNOLLY. Mr. Goddard, with due respect, that’s a very bureaucratic answer. I asked you, what are you doing to try to ameliorate the concern in the case of Indian River County? 

Mr. REINGOLD. Yes, sir, Indian River County. 

Mr. CONNOLLY. It’s a legitimate concern. I’m worried about kids. 

I’m worried about people. 

Mr. GODDARD. Sure. 

Mr. CONNOLLY. And so how is Brightline trying to ameliorate 

that concern in a reasonable way? 

Mr. GODDARD. Sir, we have spent the last 4—about 4 years ago, 

when we started this project, in conjunction with USDOT and FRA, 

we went crossing by crossing with each municipality all the way up 

the corridor to determine what was the properly prescribed safety 

equipment to implement at each crossing—crossing-by-crossing—to 

make sure that we implemented the right safety equipment. 

Furthermore, all of that safety equipment was implemented at 

our expense, which is, again, above and beyond what is required 

of us. So we feel that we have done more than is required of us 

at every step of this process. 

Mr. MEADOWS. You’re still not answering the gentleman’s question. I mean, speak to the question. 

Mr. GODDARD. Okay. So we, again, we feel that we have met the 

demands already of these groups. We’ve had discussions, we’ve had 

dialogue with them, and we’ve met their demands. 

So if there are additional discussions that my colleagues would 

like to engage in relative to their needs, we’re prepared to have 

those discussions. But up until this point, we feel like we’ve addressed all of the concerns. 

Mr. CONNOLLY. All right. I don’t wish to impose, but if the chair 

will just indulge one last question to Mr. Crandall, because I was 

intrigued by your testimony, Mr. Crandall. 

You’ve obviously done a lot of homework. You’ve heard the testimony of Mr. Burthey that our review at DOT, this meets the criteria. You want to just take a moment to perhaps rebut that or 

give your elaborated view of why they’re wrong? 


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Mr. CRANDALL. Thank you for the opportunity, sir. 

Mr. CONNOLLY. And then I yield back. I thank the chair. 

Mr. CRANDALL. I think Mr. Mast has put his finger on the issue. 

The rule is quite clear, and that is that a project which has benefited or received funds under Section 23 might then be eligible. But 

the fact is, All Aboard Florida has not received such funds, as Mr. 

Mast, I think, quite aptly pointed out. 

Such funds have been used in prior years to improve the crossing, the point where the road crosses the tracks, perhaps to put 

paving, et cetera, et cetera, whatever what might have been done. 

But it was a long time ago. And that’s an entirely different project 

for All Aboard Florida. 

Thus, it is quite clear to me on the reading of the statute that 

All Aboard Florida is not eligible. It is a railroad and it isn’t eligible under any of those 15 categories. 

Mr. MEADOWS. I thank the gentleman from Virginia. The chair 

recognizes the gentleman from Florida, Mr. Posey, for a series of 

questions. 

Mr. POSEY. Thank you very much, Mr. Chairman, for holding 

this hearing, and, Mr. Ranking Member, I want to thank you for 

agreeing to it, and, Congressman Mast, I want to thank you for requesting this hearing. You know, the proposed Brightline service 

will run through the heart of many of my communities in my district. Obviously, I have a lot of concerns and questions. I have seen 

the data from the Federal Railroad Administration Accident Database that shows that during the period of 2007 to 2018 there was 

an average of 13.5 rail crossing deaths per year in Florida. 

In the short time Brightline has been operating during Phase I 

you have already recorded six such fatalities, almost 50 percent of 

the annual Florida average. This abysmal performance suggests a 

serious safety deficiency and should be immediately remedied. One 

of the questions I am going to have for Mr. Goddard when I am 

finished here if you would write this down now and remember to 

respond to it is I would like you to share with me your firm’s plan 

to mitigate the increased risk to pedestrians and vehicles at rail 

crossings. 

I read the summary of comments on safety in the 2015 environmental impact statement for All Aboard Florida pages 1 through 23 

of that document. Quite a few residents worried about the safety 

of grade crossings under the new train service are evident. The 

Federal Railroad Administration’s response was completely puzzling. The most troubling was the response that these safety concerns are covered by FRA safety standards, and therefore, not subject to the National Environmental Protection Act, so we have got 

to worry about protecting everything in the doggone world except 

humans. 

You know, Mr. Burthey, I appreciate you showing up today. I 

have written your agency twice with some serious questions about 

safety concerns, and I have received responses only from the FRA, 

and I still get very, very poor service and response from your agency at addressing some of the serious safety issues that we have before us here. 

You know, I am puzzled how your agency can possibly consider 

a highway and a railroad the same thing. I mean, what can you 


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drive on a highway? A bicycle, a motorcycle, an automobile, a 

truck. What can you drive on a railroad track? If you don’t have 

a train, it is no help to you, you know? Maybe you can buy a ticket, 

you know, one way to—— 

Given that the NAPA requires the agency to assess the impacts 

of the human environment, surely we don’t intend to cut off the 

process without mitigating for increased risk to pedestrians and 

drivers. I am very puzzled about the rationale for not analyzing 

and addressing safety in the environmental impact statement, obviously, and at the end, Mr. Burthey, maybe you can give us some 

further insight and wisdom on that. 

Construction of Phase II of the project, which will bring the train 

through my district, through Indian River County and Brevard 

Counties has yet to happen. Many narrow-minded residents, as you 

call them, Mr. Goddard, are understandably nervous, especially 

those residents whose homes back right up to the train tracks. 

There are schools and businesses that are in close proximity to this 

train, and, Mr. Chairman, with your indulgence, I would like to ask 

for unanimous consent to include seven images showing how close 

in proximity this train runs through my constituents’ homes, 

schools, and businesses. 

This is a photograph of the crossing at Vero Beach looking north. 

This one of downtown Melbourne. I can’t imagine a high-speed 

train going through there. This is one of Stuart. This is St. Lucie 

crossing. This is downtown Vero Beach looking from the east. And 

these are residents that setback up to the line. 

Mr. CONNOLLY. Without objection. 

Mr. MEADOWS. I thank the gentleman. 

Mr. POSEY. Thank you. Shouldn’t we open up the process to reexamine the safety issues in collaboration with the public? You know, 

we get a pledge maybe to do that today. 

It is my understanding that All Aboard Florida plans to have 

local governments like my constituents in Indian River County pay 

for the maintenance of the safety equipment necessary to operate 

as passenger and rail trains across hundreds of at grades crossings. 

This is basically an unfunded mandate from the Federal Government on local government, something that we always swear that 

we won’t do, and we inadvertently sometimes end up doing that, 

and this would be a horrible injustice. 

And given that we are providing substantial support to AAF and 

the requirements for new safety equipment due to Brightline service shouldn’t the capital and operating costs of safety equipment be 

paid for by Brightline, the people who benefit from it? 

Mr. Chairman, let me tell you how I found out about Brightline 

about this All Aboard Florida. For several years representatives 

came through and said, look, we are going to put in a high-speed 

rail. Here is our plan. We don’t need any government assistance. 

We don’t need any government approvals. We are doing this completely in-house. We are authorized completely to do it. It is all on 

our own. We are just telling you for informational purposes so you 

will know what is going on through your district. 

That went on for 3 or 4 years, and then I am asked to sign a 

letter executed by Mr. Mast’s predecessor putting them at a high 


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priority for a RRIF loan, and I go, well, I thought you guys were 

doing it—well, yeah, our plans changed. Yeah, they sure do change. 

So when we had a transportation bill come through on the floor 

I thought it would be appropriate to have a couple of amendments, 

you know, one that you should have the approval of at least majority of your local elected officials to do something like this, and we 

should also limit the amount of the loans. This would be—I think 

they were asking for $1.7 billion at the time, the most humongous 

loan in the history of RRIF loans, and, of course, follow the law because at that time they hadn’t gotten somebody to sandwich in a 

glitch fix for them because they didn’t meet the criteria for the 

money that they were asking for. 

Of course, I met with a lot of strong opposition. One of their 

strongest supporters and advocates, a Member of Congress who is 

now in Federal penitentiary, said twice shame on me for asking the 

railroad to actually follow the law. And the floor was flooded with 

colorful handouts of misinformation about the rail, and of course, 

the amendments didn’t pass. They should have, but they didn’t. I 

have correspondence from my local officials asking them—they 

were asked by Brightline to write nasty letters to the editor about 

me calling me narrow-minded and some of the things to quote Mr. 

Goddard, and I just think this attempt to do this is everything but 

straightforward and upright. 

I believe they tried to sell some bonds before, but they couldn’t 

sell them, and so now that has changed. You know, you wonder 

how fast these trains travel through these little villages? Even at 

70 miles an hour the consequences can be horrific based on how 

long it takes to stop one of these doggone things, and, you know, 

I think we have been called narrow-minded and not in my backyard people, and, you know, I think a lot of people would support 

a rail if it didn’t go through the middle of their downtowns and our 

neighborhoods and if it was actually safe, which this clearly is not. 

My own experience and I think yours and other Members of Congress we were recently in a train accident, and I was advised by 

one, the reason for the accident even though the guards work is the 

guys in the truck, one of whom lost his life, were used to seeing 

coal trains coming around that corner about 30 miles an hour, and 

they thought they would have plenty of time to get across. They 

weren’t, you know, accustomed to having our Amtrak come through 

there at 60 to 70 miles an hour, and the result was tragic just like 

it will be in many, many communities in my district and Congressman Mast’s district. 

So, you know, I have heard a lot of talk about overwhelming support for the project. Man, I sure as hell haven’t seen that, and I 

don’t think it is was overwhelming support that you are able to sell 

any bonds before. I don’t think people are all stooges, you know, 

and they are not that stupid to invest in a train. We don’t have 

any lines like this that make any money. The Federal Government 

has to subsidize them. 

The problem with the RRIF loan is after you guys would go 

broke on passenger rail if that was your real agenda then what collateral really usable collateral, safe collateral would the Federal 

Government have? So my question to ask you right now under oath 

is, Mr. Goddard, what is your real agenda here? 


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Mr. GODDARD. Congressman, I am not sure which of your questions to address first. 

Mr. POSEY. We can do the agenda question first so we don’t forget it. 

Mr. GODDARD. Our agenda is to improve mobility for millions of 

visitors and residents of South Florida. 

Mr. POSEY. Is there a reason why somebody would get off an airplane if they were going to Miami, they would get off an airplane 

that could get them to Miami in an hour and get on a train that 

would take them two hours to get there, and they would have to 

do their luggage back and forth in a train? I mean, is the model 

looked at that as being a realistic expectation? And would somebody in Miami going to Orlando or going past Orlando sacrifice an 

hour flight to get on a train and unload and load? 

Mr. GODDARD. Our business case, which Mr. Crandall to my left 

has made on many occasions is there are many corridors that are 

from 200 to 350 miles apart that are too short to fly and too far 

to drive. There are 400 million trips between Central and South 

Florida on a daily basis, and, yeah, we believe that we can capture 

a good share of those. 

Mr. POSEY. Well, if it just stayed in South Florida obviously I 

wouldn’t have an interest in this thing, but it is not just in South 

Florida, it is in East Central Florida, which affects our districts, 

and as I said before, if you were following a path west to I–95 

where there was less population and weren’t running through the 

middle of our downtowns and our school areas and it wasn’t a safety effect we would probably think that was great idea, but, you 

know, do we want to sacrifice—and I think the answer is no from 

my standpoint—the safety of our local residents for your profit and 

convenience? 

Mr. GODDARD. So if I could respond to that, there was a 2015 report commissioned by Indian River County to study the safety impacts of Brightline, and their own consultants concluded that we 

can find no decrease in grade crossing safety with the advent of All 

Aboard Florida. To Indian River County’s benefit, the additional capacity improvements, other additional infrastructure, safety improvements, upgraded crossing warns devices, which are regulated 

by the FRA, implementing suggestions for quiet zones, fencing, 

pavement markings, a public awareness campaign, and a finding of 

no additional closure time with the additional trains, draws a conclusion that there is no adverse safety impact to Indian River 

County from All Aboard Florida. If the proposed upgrades actually 

occur they will improve and update the safety factors that exist 

today. 

I would also like to add that, again, passenger rail happens in 

this country every day, and, you know, in Detroit—Detroit to Chicago that route has a similar number of grade crossings as 

Brightline and runs at grade. St. Louis to Chicago has 213 crossings that have been upgraded. Trains travel at 110 miles an hour 

through dense urban areas on those corridors, as well. 

Mr. POSEY. Well, I submit to you that sometimes a picture is 

worth a thousand words, and your remarks about this being safe 

crossings in Indian River County and St. Lucie County don’t pass 

a straight face test. 


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Mr. GODDARD. So if I may, Congressman, that is a picture of 

where exactly? 

Mr. POSEY. This is Vero Beach crossing. 

Mr. GODDARD. So obviously we haven’t made any improvements 

there yet. We haven’t actually begun construction on that segment. 

Mr. POSEY. So, you know, like there is less than—room for one 

car to back up over here, and of course, I have seen them even for 

the little local trains backed way up over here. How would you propose to make this crossing safe? 

Mr. GODDARD. Again, that is actually determined by the Federal 

railroad authority and USDOT in conjunction with your community 

leaders. So again, we over the last 4 years met with your community and determined exactly how to do that. Sitting here today, 

frankly, I’m not—you know, I don’t have the answer at my fingertips, but the net is there will be improvements on there that comply with the FRA’s sealed corridor guidelines and our States and 

other municipalities. 

Mr. POSEY. You’re going to require these local governments to 

maintain these crossings forever, yet your train is not going to stop 

in any of these communities. They get absolutely no benefit whatsoever from your train, yet they’re stuck with the liability of it. You 

know, how do you possibly think that that’s fair and reasonable? 

Mr. GODDARD. So for those who may not—for those who may not 

know, our right of way predates, you know, the communities 

through which we travel. Correspondingly, there are decades-old 

agreements between each municipality up and down the corridor, 

as each community asked if they could put a road across our railroad. 

When we granted communities that right to transverse our railroad we—the cost of creating the gates, the bells, the whistles was 

actually—that burden was on the community. 

Mr. POSEY. Well, when you said, ‘‘we,’’ you didn’t make those 

agreements. Flagler made those agreements. You know, you’re an 

international hedge fund now. I mean, you had no dog in the fight 

at that time, and those agreements are probably 100 years old. Obviously they were intended for not high speed trains going through 

their little towns, but trains that would actually stop in their 

towns, if necessary, and help promote their commerce and passengers at one time. 

Mr. GODDARD. It sounds like you might like a stop. 

Mr. POSEY. You know, that wouldn’t appease me. I know that 

has been one of the latest, you know, things that they have thrown 

out from saying absolutely, positively there will never, ever, ever 

be a stop in this high-speed rail because then it wouldn’t be a highspeed rail. To appease some critics I understand you have lately 

been saying, well, we might have a stop in your town and we might 

have a stop in your town, but we know that’s not going to happen 

because then it would take a 5-hour ride on a high-speed rail to 

get from Miami to Orlando, and, you know five times longer than 

the airline flight. 

Mr. MEADOWS. So go ahead, you can respond to that. We are 

going to do a second round of questioning, but you can go ahead 

and finish up on any response that you have, Mr. Goddard. 


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Mr. GODDARD. Thank you, chairman. So just for the record it is 

important to understand that there are longstanding agreements, 

and, in fact, the responsibility to improve the crossings are actually 

the municipalities, as well, although we have actually taken on 

that financial responsibility up and down the corridor. We have improved all of the crossings up and down the corridor. We have done 

that on our dime. We have not asked the municipalities to participate in that, but yes, they do need to continue to pay the maintenance that they agreed to pay. 

Mr. MEADOWS. All right. I thank both the gentlemen from Florida. We’ll come back and let you ask a second round of questions. 

The chair recognizes himself for a series of questions. 

Mr. Burthey would you agree that this does not qualify under 

number 11 on the statute 26 U.S.C. Code. It is not a high-speed 

rail project. Is that correct? 

Mr. BURTHEY. Yes, sir, I would agree with that. 

Mr. MEADOWS. Okay. Would you agree that it does not qualify 

as highway under that same statute? 

Mr. BURTHEY. The Department of Transportation does believe 

that it qualifies under—— 

Mr. MEADOWS. So you’re saying the Brightline rail project is a 

highway, that’s your sworn testimony? 

Mr. BURTHEY. We are saying that the definition of a qualified 

highway or—— 

Mr. MEADOWS. That’s not what I asked you. Is it a highway or 

not? 

Mr. BURTHEY. It fits the definition under the statute. 

Mr. MEADOWS. Well, it is interesting you say that because the 

definition under your guidelines and under the code would indicate 

that it is a surface transportation project. Now, I serve—I happen 

to serve on the Transportation and Infrastructure Committee. Secretary Chao would agree that surface transportation are not rail, 

and so you’re at odds with your own Secretary on that. 

Mr. BURTHEY. Again, our interpretation longstanding of the statute is that any service transportation project, including passenger 

rail, which utilizes Title 23 funds does qualify under—— 

Mr. MEADOWS. So how much Title 23 funds does somebody have 

to spend in order to qualify? 

Mr. BURTHEY. The statute does not specify. 

Mr. MEADOWS. So a dollar? 

Mr. BURTHEY. Theoretically, yes. 

Mr. MEADOWS. So do you believe that that was the intent of Congress? I can tell you it wasn’t. This is a softball answer. The intent 

of Congress was not for a dollar of Title 23 money to be able to 

qualify them for a PAB, and so, if you’re going forward, and as you 

go back to the Department of Transportation if that’s their interpretation that a dollar qualifies them, then everything qualifies because anybody would spend a dollar to say I can get some tax exempt money from the Federal Government, wouldn’t you think? 

Mr. BURTHEY. Well, what I would say is that private activity 

bonds are a very useful tool to minimize the Federal dollars that 

are required at a project. So they enable us to fund projects without having to—— 


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Mr. MEADOWS. Listen, you’re preaching to the choir here, so let’s 

dispense with that. I actually support private activity bonds, and 

in the tax reform package in the House where it was excluded I 

actually said I wasn’t going to vote for it unless we got private activity bonds back in there. As you know, it is part of that. I see 

the critical tool that it is, but we must also understand that Congress has a certain intent on how those are to be used. 

And when the Department of Transportation uses their wide discretion and what qualifies and doesn’t—it undermines the very fact 

of why we have private activity bonds, and it makes Members of 

Congress like me who have advocated for it say how in the world 

can you say that one dollar in Title 23 funding would qualify somebody for a PAB? 

Is that your sworn testimony here today? 

Mr. BURTHEY. Well, this project did receive more than one dollar 

to be clear. It received—— 

Mr. MEADOWS. I’m asking—— 

Mr. BURTHEY. —several million dollars. 

Mr. MEADOWS. Does one dollar qualify? 

Mr. BURTHEY. Technically under statute under my understanding, yes, it would. 

Mr. MEADOWS. Okay. So your sworn testimony is that the intent 

of Congress was that one dollar would qualify? 

Mr. BURTHEY. I cannot speak to the intent of Congress. 

Mr. MEADOWS. Well, but you’re here to actually convey the intent 

of Congress. That’s the whole reason why you write rules and regs 

are to take the laws that we pass and actually have the intent of 

Congress to go forward. 

Is there any scenario where you think that there was some Member of Congress who said if you will put up a dollar of Title 23 

money that we’ll allow you to do $1.75 billion in private activity 

bonds? Do you think any Member of Congress could go home and 

get reelected based on that kind of rationale? 

Mr. BURTHEY. Our responsibility is to consistently apply the statute as it is interpreted by our Department and that historically—— 

Mr. MEADOWS. So how do you do that consistently—that’s your 

word consistently—when there is not a standard of how much 

money has to be put in in terms of Title 23? So somebody, Mr. Goddard can come up—and listen, it is not my backyard and, you 

know, they’re not going to run high-speed rail to Western North 

Carolina—well, but I guess under your scenario it would qualify because if they have used—no, it has to be in the State, right, so 

you’re saying that anywhere in the State of Florida they can run 

a high-speed rail because we have some amount of money for a 

crossing that was paid some time ago. Is that correct? 

Mr. BURTHEY. Well, we are not saying that. What we are saying—— 

Mr. MEADOWS. Well, where does it stop? It obviously doesn’t stop 

in Orlando, so where does it stop? Does it stop in Jacksonville? 

Mr. BURTHEY. So here specifically the Title 23 funding was spent 

after All Aboard Florida announced their plans—— 

Mr. MEADOWS. For what? For what? 

Mr. BURTHEY. For grade crossing improvements. 

Mr. MEADOWS. For grade crossing improvements where? 


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Mr. BURTHEY. Along the tracks where the All Aboard Florida 

trains will run. 

Mr. MEADOWS. All along the entire corridor? 

Mr. BURTHEY. I do not know the exact grade—— 

Mr. MEADOWS. I do. I’m asking a question that I already know. 

So how much of this second phase of this was Title 23 funds used 

to improve crossings? Do you know that amount? 

Mr. BURTHEY. All Aboard Florida’s application indicated that 

subsequent to their announcement of their project in 2012, 2013, 

and 2014, $9 million were spent. 

Mr. MEADOWS. In this second phase? 

Mr. BURTHEY. Along the second phase of the corridor. 

Mr. MEADOWS. Okay. And where was that spent? 

Mr. BURTHEY. Again, I don’t know the exact grade crossings but 

spent on grade crossings. 

Mr. MEADOWS. You have 30 days to get that to this committee. 

Do you have that? Is that a reasonable request? 

Mr. BURTHEY. We do have the information, yes. I just don’t 

know—— 

Mr. MEADOWS. So is 30 days—I’m looking at your staff to see if 

that—because it is really their work, not yours, so is that adequate 

time? 

Mr. BURTHEY. Yes. 

Mr. MEADOWS. All right. So in 30 days you can get that to us. 

Mr. MEADOWS. So let me ask you a little bit further because I 

do not see this as fitting the definition of surface transportation 

and not not even under if you read even the statute it doesn’t seem 

to apply, and so at this particular point I have a real concern that 

the intent of Congress is being overwritten with the private activity 

bond measure here because it is really all about we wanted cooperation between a State and a Federal entity. And when we 

looked at this we wanted that cooperation to take place, wouldn’t 

you agree with that, Mr. Burthey? 

Mr. BURTHEY. Cooperation was with the State and the Federal 

entity? 

Mr. MEADOWS. Right. 

Mr. BURTHEY. That makes sense. 

Mr. MEADOWS. And so we want that cooperation, and so what 

you’re saying is is if we fix some kind of road that happens to go 

over a rail that that automatically qualifies the entire rail project 

that is going a different direction because a freight transfer system 

is not what we are talking about here, would you agree with that? 

Mr. BURTHEY. So, for example, we would draw a line—— 

Mr. MEADOWS. Answer the question. Is this a freight transfer? 

Mr. BURTHEY. That is a passenger rail system. 

Mr. MEADOWS. Okay. So under definition of 15 we now are coming down to part of the definition is is this a surface transportation 

issue or not, would you agree? That’s the only part of this statute 

that could possibly apply. 

Mr. BURTHEY. The statute specifically says that whether or not 

it is a surface transportation project which receives Federal assistance under Title 23. And again, I reiterate the statement I made 

before that our conclusion was that it did. 


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Mr. MEADOWS. All right. So would you suggest that this is not 

a freight transfer facility? So that’s the second part of that—— 

Mr. BURTHEY. There’s a distinction between applying that specific phrase versus the statutory definition. 

Mr. MEADOWS. That’s correct. 

Mr. BURTHEY. The statutory definition of a freight transfer facility includes a surface transportation project which—— 

Mr. MEADOWS. Well, it actually—that’s the third paragraph. I 

mean, actually I have actually done a little bit of reading here, and 

any facility for the transfer of freight from a truck to rail or a rail 

to truck. It is obviously not doing that. Is that correct? 

Mr. BURTHEY. It is not doing that, but our definition is under 

(m)(1)(A). 

Mr. MEADOWS. So under (A) is any surface transportation project 

that receives Federal assistance. So what you’re saying is is that 

you can give money to a highway and build a railroad right on top 

of it? Because surface transportation—let me just tell you, you 

know, you may want to say, well, this under the definition—and we 

have got very high paid lawyers sitting behind Mr. Goddard who 

would say well anything that is on the surface actually would qualify, is that what you’re saying? 

Mr. BURTHEY. We are not saying anything. 

Mr. MEADOWS. He is shaking his head yes, so 

Mr. BURTHEY. It does need to be related to the project. 

Mr. MEADOWS. So how is a railroad crossing on a road necessarily being a fraction of the cost related to that? 

Mr. BURTHEY. Well, obviously here, given all the safety concerns 

that have been mentioned, improving grade crossings is of the utmost importance. 

Mr. MEADOWS. So what percentage of the project does the Title 

23 funding have to be? 

Mr. BURTHEY. There is no percentage that’s placed in the statute. 

Mr. MEADOWS. So everything qualifies for a PAB? 

Mr. BURTHEY. Based on our statutory interpretation, yes. 

Mr. MEADOWS. Okay. Well, then I would suggest to my colleagues that I guess we need to change the law, and what is going 

happen is—and I don’t agree with that. I understand that your interpretation is that. I think the intent of Congress was very clear, 

and that was not the intent, but in doing that perhaps the Secretary needs to look at the rules and regs because you will have 

a real problem continuing on with private activity bonds being 

there. 

Mr. Goddard, let me come to you. You said that the taxpayers 

are not subsidizing this. Was that your sworn testimony? 

Mr. GODDARD. That’s correct. 

Mr. MEADOWS. All right. So that’s one. I don’t believe that to be 

the case, but if that’s this case, if the taxpayer has no exposure, 

and it is of no consequence to the taxpayer, why don’t you get private funding for this? 

Mr. GODDARD. We certainly could. 

Mr. MEADOWS. Well, why don’t you? 

Mr. GODDARD. Because—— 

Mr. MEADOWS. Most of this hearing would go away if you did 

that, so why don’t you go ahead and get private funding. It gets 


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me out of it. It takes a problem off of my desk. And you know what, 

why don’t you go ahead and get your own private funding? And 

you’re saying that you can get the same private funding at the 

same benefit without the taxpayer having any subsidy in that? 

Mr. GODDARD. Yes. 

Mr. MEADOWS. Is that what you’re saying, Mr. Goddard? 

Mr. GODDARD. No, chairman. So the reason why I would love to 

alleviate you of this burden, however, the reason why we are interested in a financial instrument such as PABs is it is a cheaper cost 

of money. It is a less expensive cost of money. 

Mr. MEADOWS. Well, then it is taxpayer subsidized, so your—— 

Mr. GODDARD. Sorry, so taxpayer subsidized—again, what is your 

definition of taxpayer? 

Mr. MEADOWS. In your sworn testimony—I asked you to clarify 

it because I didn’t think I heard what you said the first time, and 

I didn’t believe it the first time, and then you reiterated it. There 

is a benefit to your company that comes at the expense of the 

American taxpayer, is there not? 

Mr. GODDARD. There is a deferral of taxes to investors, but the 

intent of the PABs—— 

Mr. MEADOWS. So there’s a tax benefit to somebody—and let me 

just tell you—— 

Mr. GODDARD. There’s a distinction between that and receiving 

money from the government. This is a loan. 

Mr. MEADOWS. I didn’t say that you were receiving it. Listen, I’ll 

say this nicely because I have already criticized you for some of 

your opening remarks. I will say this, that what happens is PABs 

by their very design are designed to be a tool to make it more affordable for us to do projects with the Department of Transportation. In doing that we have to recognize that there is a Federal 

component to that. Would you recognize that there is a Federal 

component to private activity bonds in that that there is a deferred 

ability under tax law. I can give you the IRS code if you want. 

Mr. GODDARD. I am not an attorney, Chairman Meadows. I run 

the company. We have attorneys who understand these matters far 

better than I do. You have heard Mr. Burthey’s testimony. I feel 

that I don’t have an awful lot to add in this context. 

There’s a—we have been to court three times on this matter, and 

I think that we, again, to the extent that we are now in a new lawsuit on this I don’t wish to comment further. 

Mr. MEADOWS. Well, that’s not an option that you have, Mr. Goddard. You’re here under sworn testimony, and that’s the reason 

why I’m—it is not a criminal conviction. We can’t bring any criminal charges towards you here today, but you do have the responsibility to uphold the truth in your testimony and answer the questions. 

Mr. GODDARD. So to the best of my knowledge—I mean, you have 

heard Mr. Burthey speak about the PABs, and USDOT determined 

we are eligible. Our legal term has looked at the issue. They also 

agree that we qualify. We believe we qualify because we receive 

Section 130 funds. 

Mr. MEADOWS. And section—Title 23 funds. 

Mr. GODDARD. Title 23 funds. And—— 


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Mr. MEADOWS. Fine, I got your testimony. So Mr. Reingold, 

you’re saying over 2030 that it is going to cost your county 8 point 

something million. Is that correct? 

Mr. REINGOLD. $8.2 million, Congressman. 

Mr. MEADOWS. Is that high, Mr. Goddard? 

Mr. GODDARD. Honestly, I’m not sure. 

Mr. MEADOWS. Okay. So are you stopping in Indian River County? 

Mr. GODDARD. No. 

Mr. MEADOWS. Okay. So he is going to have to maintain railroad 

crossings so that you can get people from one area to another, and 

it will go through his county—and, listen, I’m all about commerce, 

and I realize that it is always in somebody’s backyard, so I don’t 

know that I have a whole lot of sympathy about it not being in my 

backyard. These two guys do. 

But here’s my concern, and it is with unfunded mandates. If 

you’re asking his county and his city to support the maintenance 

ongoing, and I would see that as a tangential cost to your particular operation, would you not? 

Mr. GODDARD. Again, we have existing agreements in place that, 

again, I don’t know what the material increase is from prior to 

Brightline—— 

Mr. MEADOWS. So if you’re asking their county to spend $8 million for a new railroad crossing maintenance, do you not see that 

they wouldn’t have to do that unless you were coming through 

their county? That’s an easier question. 

Mr. GODDARD. Well, they wouldn’t have to do that—I mean, 

again the road crossings—the road crossings, this is our private 

property. We are trying to run our business on our private property. 

Mr. MEADOWS. And what I’m saying is—— 

Mr. GODDARD. There is a requirement—— 

Mr. MEADOWS. I get that. Listen, there’s no one—in fact, I can 

tell you, I’m the most conservative on private property rights of 

anybody on this dais, I promise you being from Western North 

Carolina. And at the same time if you’re going to do railroad crossings and you’re going to ask them to maintain something that they 

don’t get a benefit from, do you not see a problem with that? 

Mr. GODDARD. I can see how—potentially. 

Mr. MEADOWS. Okay. So here’s what I would ask you. 

Mr. GODDARD. What I would say though, if I may, chairman. We 

have actually spent the money on improving those grade crossings. 

So we did not turn around and ask—— 

Mr. MEADOWS. I don’t disagree, and I have heard that—and let 

me just tell you, you’re going to find that I will be willing to look 

at the truth in every argument, and I get that because I can see 

your counsel when the chief was talking about how they were having to spend the money for all these railroad crossings and I could 

tell your counsel in the back he was shaking his head and saying 

that—don’t ever play poker, by the way—but in doing that, in 

doing this here’s what I’m saying is there are legitimate safety concerns the chief has made and for you to—— 

Mr. GODDARD. I would love to address those. 


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Mr. MEADOWS. Well, I know where you’re going. In your opening 

statement you talked about the opioid crisis. 

Mr. GODDARD. No, no, no, no, no. I think there are other—there 

are other actually—there’s actual real misinformation, there’s actually like a misstatement of some facts there. Like I would love to 

have a conversation with the chief. 

Mr. MEADOWS. We will have a second round. I will give you the 

opportunity, and if I haven’t you can remind me and nudge me to 

give you the opportunity for rebuttal and I’ll be—but here is my 

concern. If you’re asking this county and more specifically their 

taxpayers to fund the maintenance of railroad crossing in perpetuity and they don’t benefit, it has to be at least a cost consideration for this project, and in doing so, and I know you’re shaking 

your head no—— 

Mr. GODDARD. Just we have agreements in place. This passenger 

rail is not a new phenomenon. 

Mr. MEADOWS. You have a lot of things in place that may be in 

jeopardy, Mr. Goddard, so let me just suggest to you, let me suggest to you that you come back to this committee with how you’re 

going to address these types of concerns. Are you willing to do that 

in the next 45 days? 

Mr. GODDARD. Certainly. 

Mr. MEADOWS. All right. So you’re going to come back to the 

committee on how we are going to address the ongoing maintenance concerns that may happen with—and obviously Mr. Reingold 

is here for his county, but as we look at some of those other counties if you would do that, that would be very helpful. 

With that I’m to go ahead and recognize the gentleman Mr. Mast 

for a series of questions. 

Mr. MAST. Thank you again, Mr. Chairman. Mr. Goddard, does 

FEC have agreements in place or does Brightline have agreements 

in place with Indian River County, with Martin County, with St. 

Lucie County? 

Mr. GODDARD. FEC. 

Mr. MAST. Is FEC Brightline? 

Mr. GODDARD. No. FEC is not Brightline. 

Mr. MAST. So then is there new upgrades to these crossings that 

has to occur as a result of the Brightline crossing, not as a result 

of the FEC project? 

Mr. GODDARD. So I think it is important to clarify Congressman 

that All Aboard Florida owns the perpetual right and permanent 

easement to run passenger service on the FEC railway between 

Miami and—— 

Mr. MAST. FEC is not Brightline though? 

Mr. GODDARD. That’s right. 

Mr. MAST. And the agreements are with FEC? 

Mr. GODDARD. That is correct. 

Mr. MAST. The new infrastructure is as a result of the Brightline 

project, the new expensive infrastructure that Mr. Reingold’s county will have to pay for the upkeep of? 

Mr. GODDARD. It is shared infrastructure. 

Mr. MAST. Got it. 

Mr. GODDARD. It’s shared infrastructure. 


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Mr. MAST. And on all of the safety upgrades that were conducted 

throughout the entire corridor of train I do read on all of them it 

does say FEC crossing, FEC crossing, FEC crossing for everything, 

and so it is in that I want to get to the truth in testimony for what 

I was able to question your CEO on transportation and infrastructure or the truth on the Department of Transportation application 

and get where we left off before. 

As I said, All Aboard Florida’s CEO Mike Reininger he testified 

June 23, 2017, in transportation and infrastructure to me to a 

question that I asked that All Aboard Florida is not publicly funded 

at all, but we have been having this entire argument throughout 

this on whether there is even one dollar of public funding that has 

gone to this project, which would allow it to qualify even as a highway or a freight transfer facility, and we have gone back and forth. 

Is there one dollar, is there not one dollar, is there a limit to it? 

The testimony to me on transportation and infrastructure was is 

not publicly funded at all, it is a completely—it is completely an 

investment of private sector capital. 

So I will ask one more time. Your answer before was he did not 

lie to me. That was your answer before he did not lie to me when 

he said it is completely private. So on the application was there not 

truth on the application where you’re saying there was public funding used, which would enable you to get these private activity 

bonds? 

Mr. GODDARD. The funding that was received through Section 23 

was for what is now the shared infrastructure, and it was intended 

to improve safety crossings and the safety of crossings throughout 

the corridor. 

Mr. MAST. So you maintain there is public funding in this? 

Mr. GODDARD. There has been public funding granted to the corridor. 

Mr. MAST. So it was not truthful when you testified to me on 

transportation and infrastructure. 

Mr. GODDARD. Well, again, this was—so there’s a distinction between, I suppose, the—I’m not sure of the timing of the funding 

honestly, Congressman. I don’t know exactly when the timing was. 

I would need to get back to you. 

Mr. MAST. Please get back to me. 

Mr. GODDARD. Whether the funding preceded the inception of All 

Aboard Florida or not, I’m not certain. 

Mr. MAST. Please get back to me on that. 

Mr. Burthey, I want to get to you. So it sounds to me, and I 

heard you use the word ‘‘indicated,’’ ‘‘indicated,’’ ‘‘indicated’’ probably at least three or four times as we were talking about the application of FEC Brightline All Aboard Florida, whichever company 

it was, and it sounds to me as if from their testimony thus far the 

Department of Transportation did base the eligibility of the decision for private activity bonds on All Aboard Florida’s self-reported 

acceptance of Title 23 funds. 

That whole argument of whether there was Federal funding or 

not Federal funding, whether there was truth or not truth in the 

testimony on transportation and infrastructure. So did the Department investigate All Aboard Florida’s claims in their application at 

all? 


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Mr. BURTHEY. The Department does review all components of the 

application, including the actual use of Title 23 funds that a sponsor claims. 

Mr. MAST. Does the Department determine FEC to be 

Brightline? Are they the same company to the Department? 

Mr. BURTHEY. That is not a consideration that the Department 

makes. Given pending litigation on that issue, I cannot comment 

further. 

Mr. MAST. So the Department does not look at whether one company received Federal funding and whether a completely separate 

company is applying for private activity bonds. That’s not looked at 

in an application, when one company is claiming that they received 

Federal funding? 

Mr. BURTHEY. Unfortunately, Congressman, I cannot comment 

further on that given litigation that’s pending. 

Mr. MAST. Okay. I would hope that you could comment on this 

being that this is the primary concern of how we are determining 

whether somebody is eligible for private activity bonds. The Department does seem very unsure of whether All Aboard Florida actually received Title 23 funds or not, and as we said, that’s what 

the application is entirely based on—— 

Mr. MEADOWS. So, Mr. Burthey—hold on, if the gentleman will 

yield for just a second. So, Mr. Burthey, are you suggesting that 

you don’t know whether you evaluate that or not? 

Mr. BURTHEY. I’m not suggesting that. I’m suggesting that the 

overlap between FEC and All Aboard Florida is the subject of litigation, and I have been instructed by our counsel to not comment 

on that matter. 

Mr. MEADOWS. So let me ask you this, his question is more generic. Do you typically evaluate whether one entity and another is 

one in the same? Do you typically do that? Which would not speak 

to the litigation at bay here or at bar. I mean, do you typically 

evaluate that? 

Mr. BURTHEY. Well, obviously, all applications are very different, 

and so it would be—— 

Mr. MEADOWS. Right. So either it is typically evaluated or it is 

not because all applications are evaluated differently, but you 

would say do you consider two different entities—to Mr. Mast’s 

point—as one typically? In all your reviews—obviously if you’re 

prepared for litigation you have already looked at this and all of 

that. Would you typically do that? 

Mr. BURTHEY. Well, certainly, Congressman, Mr. Chairman, we 

do very significantly take a look at the applicant that is requesting 

private activity bond allocation, but with regard to whether or not 

when and if he is judged versus another I mean, I think it is difficult to answer that question on an overarching basis. I think it 

is very situational. 

Mr. MEADOWS. Well, can you confidentially get your counsel and 

certainly with the DOT’s help respond to this committee in 30 days 

with specificity. I see your staff is nodding yes. Is 30 days enough? 

All right. Thank you. I yield back. 

Mr. MAST. Thank you, Mr. Chairman. I’m going to complete with 

my line of questioning with this, and I would like to go to Chief 

Wouters for a minute here. In all of your time in looking at safety 


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issues, have you experienced the push on the county or have you 

heard, Mr. Reingold, the push on your county to say that because 

there is uproar about the 32 trains and train horns blowing 32 

times in the backyard of everybody or in the downtown of everybody. 

Have you been approached by the Brightline project about the 

fact that there can be quiet zones or that they can be quieted or 

they cannot below the train horn? 

Mr. WOUTERS. Thank you, Mr. Congressman. Yes, we have been 

approached about them. At this point the county’s position is we 

don’t feel that it is a good thing. We recognize the significant 

change in the train speeds and frequency through the area. It is 

something that the community needs to have time, if you were, to 

come to understand how it works. 

Much like Congressman Posey mentioned in the incident that 

happened on the train that you were on, they have to come to understand those changes in speeds affect the way they make decisions, and we don’t think that quiet zones are an important thing 

to put in. We think that all the safety features should be working 

as normal, not agreeing to those quiet zones. 

Mr. MAST. Mr. Reingold, do you have a comment? 

Mr. REINGOLD. We have concerns with quiet zones, as well. As 

we have seen already in South Florida there have been significant 

accidents and incidents already, and we certainly will take the consideration of quiet zones seriously, but we are very concerned about 

the safety of this project, and thus, are not jumping instantly into 

that issue. 

Mr. MAST. Mr. Goddard, you did mention quiet zones briefly in 

your written testimony. Is the possibility of quiet zones something 

that you push on the localities or encourage to the localities? 

Mr. GODDARD. So the quiet zones are completely at the option of 

the municipalities through which we travel. 

Mr. MAST. In order to avoid outrage of a train horn blowing at 

every interaction in an area do you encourage—have you encouraged the City of West Palm Beach or any other cities to consider 

permitting quiet zones? 

Mr. GODDARD. No. 

Mr. MAST. Okay. I don’t know if you’re aware, but this goes to 

the point, and I’ll finish with this. This goes to the point of the continued cost of this project, not just at the local level or, you know, 

potentially at the State level, but also at the Federal level, just last 

week the mayor of the City of West Palm Beach she was in my office and she was very specifically asking me that the Federal Government pay for increased infrastructure at every intersection because they permitted every intersection as a quiet zone as to avoid 

the outrage in their community of this train travelling through it 

30 times, and they now wish that the Federal Government will pay 

to get those quiet zone permitted intersections up to a higher quality because of the deaths that have occurred. 

This is in the area that this train is running and this is just in 

my opinion another example of where the Federal Government potentially gets on the hook for the cost of this line, not just from 

where FEC or Brightline is asking for dollars, but where the cities 


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and the municipalities come and ask for those dollars, as well as 

especially in the result of safety concerns. 

In that, Mr. Chairman, I thank you for the time today and thank 

you for the hearing. 

I thank all of you for your testimony to me. Thank you. 

Mr. MEADOWS. I thank the gentleman from Florida. I’m going to 

recognize the other gentleman from Florida for a probably more 

straight 5 minutes because I gave him a very generous 5 plus minutes in his opening round. So the gentleman is recognized for 5 

minutes. 

Mr. POSEY. Thank you again, Mr. Chairman, for holding this, 

and it is so enlightening. I mean, I’ll be eternally tormented trying 

to figure out how in the world a highway is the exact same as a 

railroad, and if you can solve that puzzle or you can before I do 

share it with me because it is—— 

Mr. Burthey, in 2005 Congress passed the Safe Accountable and 

Flexible Efficient Transportation Equity Act. I know that sounds 

all oxymoron, but, you know, we did, and they did. And it created 

a $15 billion pool of tax exempt bonds that could be used on eligible 

taxes and facilities. In order to obtain these tax exempt bonds private sector entities must submit an application for review. And 

what I’ll ask you to respond to in writing since we do have a very 

limited amount of time here is if you would be kind enough in the 

next 30 days to let me know if there is a high demand in the private sector for these bonds, how many applications DOT receives, 

how many applications are typically approved and how many are 

denied. 

Who oversees exactly, precisely who oversees the application review process like name and position numbers. How long a review 

process for applications typically takes from start to finish. If you 

could do that. Can you do that in the next 30 days. 

Mr. BURTHEY. Yes, sir. 

Mr. POSEY. Thank you very much. Generally given that there’s 

a $15 billion pool that we just talked about, how much do project 

sponsors request in taxes and private equity bonds? 

Mr. BURTHEY. In other words, on average how much—what is 

the average of our applications? 

Mr. POSEY. Yes. 

Mr. BURTHEY. It varies wildly. It is always in the hundreds of 

millions at least and sometimes into the billions. 

Mr. POSEY. Okay. And roughly how many requests are we talking about? 

Mr. BURTHEY. Over history or in a given year? 

Mr. POSEY. In a given year. 

Mr. BURTHEY. In a given year? I believe last year we approved 

somewhere in the neighborhood of four to six. 

Mr. POSEY. Okay. In your correspondence to me if you can also 

briefly walk me through the application process. I know it is set 

in statute somewhere, but if you would include that in the letter 

I have another reason for requesting that. 

Mr. BURTHEY. Okay. Yes, sir. 

Mr. POSEY. Who makes a determination of whether a project fits 

under one of the 15 categories in 142(A)? 


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Mr. BURTHEY. The Department does, sir. Ultimately the discretion for the program lies with the Secretary of Transportation. 

Mr. POSEY. The Secretary then. 

Mr. BURTHEY. Ultimately by statute. 

Mr. POSEY. Okay. Typically does the project sponsor have to 

specify the type of exempt facility in their application? 

Mr. BURTHEY. The Department of Transportation only manages the $15 billion with regard to the qualified highway or freight 

transfer facility. That’s the only definition that applies to the $15 

billion cap. 

Mr. POSEY. Okay. So does DOT give any difference to or rely 

upon the project sponsor’s evaluation of how their project is eligible? 

Mr. BURTHEY. Yes, we do. 

Mr. POSEY. Okay. Mr. Crandall, would you like to comment on 

the record further about the judge’s decision as to the cost of the 

taxpayers of the subsidy? 

Mr. CRANDALL. Thank you, Mr. Posey. In the district court the 

judge heard testimony as to the probable cost to taxpayers and 

reached the opinion that the original $1.75 billion, if granted, 

would cost taxpayers about $600 million during the first 10 years 

of that bond issuance. 

Mr. POSEY. Okay. Thank you. Mr. Goddard, is the RRIF loan application still pending? 

Mr. GODDARD. Thank you, Congressman. If I could just clarify 

Mr. Crandall’s response. 

Mr. POSEY. Okay. 

Mr. GODDARD. So the 600 million was actually a number that 

was formulated by one of Care’s consultants. It was not actually— 

didn’t come from the judge. We ran our own numbers. It is probably around $250 million. 

Mr. POSEY. Okay. I’m running out of time here. 

Mr. GODDARD. And we actually have—there will be a tax benefit of about $650 million from that investment of $250 million. 

Mr. POSEY. Back to the RRIF loan, is it still pending? 

Mr. GODDARD. Yes. We are actively in the process of applying for 

a RRIF loan. 

Mr. POSEY. And how much is the RRIF loan for? 

Mr. GODDARD. $1.75 billion. 

Mr. POSEY. Okay. That is 1.75 billion with a B? 

Mr. GODDARD. With a B. 

Mr. POSEY. Okay. 

Mr. REINGOLD. If I can, Congressman? This is Don Reingold. 

Mr. POSEY. Why was the decision made to seek funding through 

the tax exempt private equity bonds? 

Mr. GODDARD. I think as a private entity and stewards of our investor’s capital we are going to avail of any, any funding available 

that’s at a lower cost of capital. 

Mr. POSEY. Okay. And what other sources of funding has All 

Aboard Florida used to fund Brightline or attempted to fund 

Brightline? 

Mr. GODDARD. So in addition to, you know, obviously PABs and 

RRIF are options for us, but should they not materialize, conventional, that’s an option. 


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Mr. POSEY. Okay. Mr. Chairman, I thank you for your indulgence. 

Mr. MEADOWS. I thank both the gentlemen for your leadership 

on this particular issue, and, Mr. Reingold, I think you wanted to 

respond, and I have not forgotten Mr. Goddard’s ability to offer rebuttal on something, but go ahead Mr. Reingold, if you want to respond to Mr. Posey’s line of questioning. I think you tried to interrupt him and didn’t get recognized, so go ahead. 

Mr. REINGOLD. Thank you to the chair. Two points I want to 

make about the litigation, which has been discussed. First off, 

there have been a mention that the All Aboard Florida prevailed 

on all of the lawsuits. I just want to state that the Federal court 

had found that, in fact, that the court had found that the plaintiffs 

had adequately alleged the existence of a major Federal action. 

That was significant win for the counties. Additionally, specifically 

to the point as asked by the Congressman was that the judge found 

that over a 10-year timeframe that the amounts to what would 

amount to a $370 million to $600 million cost to the taxpayer, so 

that was exactly the information that was found and determined 

by the Federal court, not just by Care FL’s consultant, but actually 

by the court. Thank you very much for letting me clarify. 

Mr. MEADOWS. I thank you for your clarification. Mr. Goddard, 

I think you wanted to speak to the safety issue, if I recall, that you 

said there was some misinformation out there, and I told you I 

would come back, and I want to be good to my word there. 

Mr. GODDARD. I appreciate that very much, Mr. Chairman. And 

I want to recognize the good work that all first responders do in 

our communities, but I would like to just point out that the maximum allowable speed for freight trains are 60 miles an hour, not 

70 miles an hour. 

You know, this image of chaotic disruption of trains running 

through the counties is a little bit misleading. You know, freight 

trains obviously take a lot longer than passenger trains to get 

through a crossing. It takes us all of about 45 seconds to get 

through a crossing. It is actually about half the time of a red light. 

Brightline would only run 32 trains, far fewer than most systems 

throughout the country. In South Florida there’s already a local 

commuter system that runs 52 daily trains over 72 grade crossings 

with no impact on first responders. In one suburban Chicago town 

they run 102 daily trains at grade. In Long Island more than 800 

trains run over 200 crossings. 

So again, if we believe that short passenger trains are going to 

create the kind of disruption that Brightline opponents claim then 

perhaps we should consider shutting down all commuter and intercity rail systems in the country. 

Mr. MEADOWS. Well, obviously we are not debating that particular issue today. That’s a little bit of hyperbole, but I will let the 

gentleman make his case, and point well taken in terms of how 

quickly it would go through. 

Listen, obviously there are three different debates that are going 

on here. One is the fact that there are some who don’t want this 

bill for any reason whatsoever. I recognize that. There are two 

other very significant debates that are going on, and it is the proper use of private activity bonds and the way that this has come 


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about and the safety concerns that create an unfunded mandate for 

some of our municipalities and counties along the way. Those are 

two very different arguments that, quite frankly, have a lot more 

and perhaps less passion behind them, but a lot more material 

facts, Mr. Goddard, and unless we are able to answer those questions to the satisfaction of the American taxpayer we are going to 

create problems for Secretary Chao and Mr. Burthey and the others because, quite frankly, what we are doing and what I see this 

as is the PAB that you’re looking at is being used in a way that 

is not consistent with the original intent of Congress. And your 

counsel again is shaking his head no, but that’s all right. 

What we have is we have moneys that was spent for a crossing 

that goes this way, and we are building with PABs something that 

goes the exact opposite way. And when we look at that this was 

all about trying to have a partnership for Title 23 funding along 

with PABs and other things to create a highway going one way, understanding that the—on the rail transfer side of things they were 

saying we understand that there may be these like there would be 

with a seaport or an airport there would be these facilities that 

should qualify neither of which the money—Title 23 money has 

been spent for. 

So what we will do for your own edification, as well, is we will 

get some of the legislative history that I don’t think is consistent 

with the interpretation of DOT or perhaps the way that it is done 

because I can tell you based on our initial research this may not 

have been the best vehicle to use a private activity bond. 

That being said, I want to thank all of our witnesses for coming, 

and specifically Mr. Goddard, listen, I know this is like going to the 

dentist. We are now getting it over so you’re getting out of the 

chair. I get that. I was a developer. Listen, there’s no one who has 

seen not in my backyard more than I have, and at the same time 

we have a responsibility to make sure that we do things safely and 

with integrity and making sure that we don’t create a financial liability for other entities. That is a big concern of mine hearing 

what we have for these counties and knowing that we can say, 

okay, because, you know what, we don’t face the same taxpayers 

when their county commissioners have to raise rates to pay for that 

$8 million over a 10-year period. So we really need to address that. 

Mr. Burthey, I thank you for allowing for short timeframes. I 

thank your staff for doing that. Give my best to Secretary Chao, 

and as we look at this I want to make sure that we know—we are 

going to leave the record open for 2 weeks for any other opening 

statements that any of our members would like to make, especially 

in light of the fact that we are holding this on a day that we recessed yesterday. 

And additionally, any additional questions, so all of you may be 

getting additional questions in 2 weeks for additional questions for 

the record. I would ask that yourespond to the committee’s request. 

We will try to be gracious in terms of the amount of time that you 

have to respond to those questions. 

And if there is no further business before the subcommittee the 

subcommittee stands adjourned. 

[Whereupon, at 11:57 a.m., the subcommittee was adjourned.] 


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APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


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Follow up to the 4/19 Hearing on the Private Activity Bond allocation to All Aboard Florida/Brightline 

1. Total amount of Title 23 funds spent to fix grade crossings along the second phase of the 

Brightline project. Which grade crossings were fixed with the Title 23 funds? 

Answer: The attached spreadsheet documents the Title 23, Section 130 spending on rail 

crossing improvements from 2005-2014 along the project corridor. The highlighted lines 

document approximately $2.2 million in expenditures at 28 crossings in Palm Beach, Martin, St. 

Lucie, Indian River, and Brevard Counties (located in Phase 2} that occurred between 2012-2014 

while the AAF/Brightline project was in development. 

2. When reviewing an application, does DOT typically evaluate whether one entity and 

another is one in the same? Specifically, did DOT evaluate whether Florida East Coast 

Railways and Brightline/ All Aboard Florida were different companies? 

Answer: DOT did not evaluate whether Florida East Coast Railways and Brightline/AII Aboard 

Florida were different companies as part of the PAB application review. 

3. Please provide answers to the following questions: 

a. Is there a high demand by the private sector for these tax-exempt bonds? 

Answer: Yes. Nearly every major surface transportation public-private partnership in the last 10 

years has sought an allocation of PAB authority as a potential debt-financing tool. As of May 1, 

2018, approximately $8.4 billion in surface transportation PABs has been issued. 

b. How many applications does DOT receive? 

Answer: DOT receives between 3-5 applications per year. 

c. How many applications are typically approved and how many are denied? 

Answer: The Department provides technical assistance to project sponsors who are interested 

in PABs to help them understand the potential applicability of PABs to their project. Sometimes 

applicants discover PABs may not be a good fit and choose to pursue other options prior to 

receiving an allocation. To date, the Department has not formally denied any applications for 

allocations. 

d. Who oversees the application review process (including name and title)? 

Answer: The application review process is overseen by the Council on Credit and Finance and 

the Build America Bureau's Credit Review Team. These committees include or are supported by 

the following individuals: 
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-Deputy Secretary Jeffrey Rosen 

-Under Secretary Derek Kan 

-Deputy Assistant Secretary for Budget and Programs Lana Hurdle 

-General Counsel Steven Bradbury 

-Deputy Assistant Secretary for Policy Grover Burthey 

-FHWA Acting Administrator Bran dye Hendrickson 

-FTA Acting Administrator Jane Williams 

-FRA Administrator Ron Batory 

-MARAD Administrator Mark Buzby 

-OSDBU Director Willis A. Morris 

-Duane Callender (Director, Credit Office, Bureau) 

-Roger Bohnert (Director, Outreach and Project Development, Bureau) 

-Dimitri Kombolias (Risk Management Team Lead, Bureau) 

-Keith Min (Portfolio Management Team Lead, Bureau) 

-Terence Carlson (Office of General Counsel) 

-Mike Bouril (Office of the Assistant Secretary for Budget and Programs) 

-Paul Baumer (Office of the Assistant Secretary for Surface Transportation Policy) 

e. How long does the review process for applications typically take from start to 

finish? 

Answer: There are a number of factors which impact how long the Department takes to make 

an allocation following the receipt of an application, such as how far along the project is in 

procurement, and the responsiveness of the applicant to follow-up questions. Typically, the 

process takes between 30-90 days. 

f. Briefly explain the application process. 

Answer: Once an application is submitted, Bureau staff review it for completeness and identify 

any additional information which may be helpful to the Department in considering the 

application. Once staff inquiries have been satisfied, Bureau staff presents the allocation 

request to the Credit Review Team. The Credit Review Team votes on whether to recommend 

that the Council on Credit and Finance recommend that the Under Secretary approve the 

allocation request. If the Credit Review Team makes an affirmative recommendation, Bureau 

staff presents the allocation request to the Council on Credit and Finance, which considers the 

allocation request, and makes a recommendation of approval/disapproval to the Under 

Secretary. If the allocation is recommended for approval, an allocation approval letter is 

prepared for the Under Secretary's signature. 
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April30, 2018 

VIAE-MAIL 

The Honorable Mark Meadows 

Chairman, Subcommittee on Government Operations 

2157 Rayburn Building 

Washington, DC 20515 

161NVV61:-St·~,:.$_,tt 900 Mnr-:,FL3313f. 

Re: Follow up from Hearing 04/19/2018, Response to Questions 

Dear Congressman Meadows: 

We have received two questions from your office regarding the Phase II Brightline 

Construction Project from West Palm Beach, Florida to Orlando, Florida ("Project") and the 

applicability of Private Activity Bonds ("PABs") to the Project. During the past four years I have 

been heavily involved with various aspects of the Project generally, and the P ABs litigation in 

particular. As such, we thought it might be helpful for me to address these questions, as well as 

others raised at the hearing. 

Question !) How is Brightline specifically addressing the counties' concerns regarding the 

ongoing maintenance at grade crossings along the Brightline route? 

Response: 

Throughout the last century, various counties and municipalities adjacent to the Florida East 

Coast Railway ("FECR") corridor have requested the right to place public at-grade crossings 

on FECR's private property. Rather than refuse to authorize these crossings or require that 

grade separations (bridges) be constructed over the corridor, FECR agreed to placement of 

these crossings with the reasonable conditions that the counties and municipalities pay for 

1) the installation of any new crossing warning devices and roadway surfaces, and 2) the 

maintenance of those crossing warning devices and roadway surfaces. 

Now that these counties have had the benefit of many decades of usage of FECR's private 

property, some counties. in particular, Martin and Indian River counties, are asserting that 

that they no longer should be obligated to pay crossing maintenance associated with the 

portion of the crossings which is being installed as a part of the Brightline Project If these 

counties believe that the agreements, which they readily and voluntarily signed, do not 

obligate them to pay for this additional maintenance, then that is an issue which can be easily 

resolved in court proceedings, not in legislative hearings, since this is a matter of private 

contractual rights and obligations. 

However, since we want to be responsive to your questions, Jet me offer the following 

thoughts: 
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l) The agreements provide that the counties are obligated to pay for all new infrastructure 

construction at these crossings. Nevertheless, Brightline has publicly advised that it will 

pay for that new infrastructure, at a cost of many tens of millions of dollars; 

2) Even though the agreements are not executed directly between Brightline and these 

counties, FECR will operate on the new trackage constructed by Brightline, and the 

crossing warning devices will notifY pedestrians and motorists of FECR trains as well as 

Brightline trains. Therefore, it is entirely appropriate that these new improvements be 

included within the scope of the existing crossing maintenance agreements; 

3) The maintenance of these crossings is necessitated by virtue of the vehicles and pedestrians 

traversing the crossings, not by the trains which move on rails through these crossings. As 

such, the Federal Railroad Administration ("FRA"), in its regulations, has specifically 

concluded that crossing warning devices and crossing surfaces are of benefit to the 

adjoining communities; they are not of benefit to the railroads; and 

4) As an accommodation, with respect to certain counties that have not opposed the Brightline 

Project, Brightline has agreed to absorb the crossing maintenance cost for a specified 

number of years. We have not agreed to such accommodation with respect to counties who 

continue to sue us in an effort to impede or delay construction ofthis Project. 

Question 2) Whether receipt of the Title 23 funds by All Aboard Florida preceded the Brightline 

concept, or the start of Brightline construction? 

Response: 

Although this question has a narrow focus, it was clear that several committee members were 

interested in the overall applicability of PABs to the Project. As such, we are respectfully 

expanding our answer to include a discussion of PABs applicability. 

In 2005, Congress enacted SAFETEA-LU, which amended the Internal Revenue Code at 26 

U.S.C. § 142, by expanding the list of Projects eligible for PABs allocations. In particular, 

eligibility was added for "qualified highway or surface freight transfer facilities," a term 

expressly defined to include "any Surface Transportation Project which receives Federal 

assistance under title 23, [U.S.C.]." See Pub. L. No.109-59, § 11143, 119 Stat. 1144,1963-64; 

26 U.S.C. § 142(a)(l5) & (m)(l)(A). 

Thus, when reviewing US DOT's decision to approve a P ABs allocation for the Brightline Project, 

the dispositive question is whether the Project is a "Surface Transportation Project" which 

"receives Federal assistance under title 23." The Brightline Project meets both requirements. 

The Internal Revenue Code does not define the term "Surface Transportation Project" itself, 

but the plain meaning of that term unquestionably encompasses a passenger rail project, and 

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my attachment to this letter includes various other examples where USDOT has defined "Surface 

Transportation Project" to include passenger rail projects, such as Denver's rail line construction 

from the airport to Union Station and Maryland's Purple Line construction. 

Likewise, since the planning process for the Brightline Project began in December 2011, the 

Project has received approximately $9 million in funds under 23 U.S.C. § 130 to improve 

railway-highway grade crossings and to prepare the rail corridor for the reintroduction of 

passenger service and other potential growth in rail traffic. Of that $9 million in Title 23 

funds, approximately $6 million was used to fund improvements within the portion of the 

rail corridor to be used for Phase I of the Project, which spans from Miami to West Palm 

Beach, and approximately $3 million was used to fund improvements within the portion of 

the rail corridor to be used for Phase II of the Project, which will run from West Palm Beach 

to Cocoa and then head west to Orlando. USDOT received this Title 23 funding information 

as a predicate to the Brightline PABs allocation. 

The determination to initiate the Brightline Project was made in December of 2011. Thus, 

although Title 23 funds had been utilized on the rail corridor prior to December of 2011, only 

funds utilized subsequent to that determination were identified as a basis for the PASs allocation. 

In 2014, USDOT approved a PABs allocation for the Brightline Project in the amount of $1.75 

billion, recognizing that it is in fact a "Surface Transportation Project" which "receives Federal 

assistance under title 23." The proceeds of those P ABs were to be used to finance the development 

of Phase I and the portions of Phase II within Palm Beach, Brevard, and Orange Counties. 

Per Brightline's request, that initial PABs allocation was subsequently withdrawn and replaced 

with two smaller allocations -one in the amount of $600 million for use in financing Phase I, and 

the other in the amount of $1.15 billion for use in financing the portions of Phase II within Palm 

Beach, Brevard, and Orange Counties. Brightline has since completed an offering ofPABs in the 

amount of$600 million for Phase I, but has not yet gone to market with an offering for Phase II. 

In 2015, Indian River and Martin Counties each filed lawsuits in the U.S. District Court for the 

District of Columbia challenging USDOT's initial PABs allocation for the Brightline Project. 

Indian River County asserted that the allocation violated the National Environmental Policy Act 

("NEP A") and other environmental statutes, but did not dispute that the Project is eligible for P ABs 

under 26 U.S.C. § 142. Martin County, in turn, also asserted that the allocation violated NEPA 

and tacked on a claim that the Project was not eligible for PABs under 26 U.S.C. § 142. The Court 

subsequently dismissed that claim, finding Martin County was not within the zone of interests 

protected by that statute and therefore effectively lacked standing to argue that the Project was not 

eligible for PASs under 26 U.S.C. § 142. The Court ultimately dismissed the balance of the cases 

as moot in light of the withdrawal of the initial P ABs allocation. 

Earlier this year, Indian River and Martin Counties jointly filed a new lawsuit in the U.S. District 

Court for the District of Columbia challenging USDOT's recent PABs allocation for Phase II. 

Notwithstanding the Court's prior ruling, the new lawsuit once again asserts that the Project is not 

eligible for PABs under 26 U.S.C. § 142. The counties have argued that Congress' intent in 

Section 142 was for the term "any surface transportation project" to mean "any highway project" 

3!Page 
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The Counties' argument in this regard fails for several reasons, beginning with the plain language 

of the statute, which is the clearest indication of Congress' intent. In Section 142(m)(l)(A), 

Congress chose to insert the all-inclusive modifier "any" before "surface transportation project." 

Had Congress intended to include only certain kinds of"surface transportation projects," such as 

"highway projects," it could have easily done so with less expansive language. It did not. Thus, 

the statute must be read to mean what it says; it covers any "surface transportation project," which 

indisputably includes passenger rail. I have included an attachment which details various other 

factors supporting the applicability of PABs to the Brightline Project. 

I should also note that taxpayers are not at risk by the use of P ABs. The federal government does 

not guarantee the bonds, subsidize the interest rate on the bonds, or assume any liability for the 

Project. They do not impact the credit, borrowing or debt load capacity of the state, counties or 

municipalities. Private investors assume 100% of the risk and, while the investors receive a taxcredit, federal, state, and local governments receive millions of dollars in new tax revenue which 

result from the investment. In Florida, it is estimated that Brightline will generate more than $650 

million dollars in tax revenue to federal, state and local governments, $6 billion in positive 

economic impact over eight years, and thousands of new jobs. Indeed, Brightline is realizing the 

precise purpose of tax exempt bonds such as P ABs. The bonds promote private investment in 

necessary state and local infrastructure for public use and benefit. 

Question 3) Congressman Posey asked several questions about the safety of the at-grade rail 

crossings. 

Response: 

The at-grade crossings on the Brightline system will incorporate the best and most modem forms 

of crossing technology available. 

Prior to commencing the federal environmental and safety review of this Project, a diagnostic team 

was formed to analyze the appropriate warning devices at each grade crossing. The team consisted 

of engineers from the FRA, Florida Department of Transportation, Brightline, FECR, and various 

county and local municipalities. The team quite literally observed the configuration at each 

crossing and made recommendations for appropriate warning devices. 

Thereafter, FRA, which is the agency charged with railroad safety oversight in the United States, 

conducted four separate reviews ofBrightline's crossings and identified the appropriate warning 

devices to be implemented at each of those crossings. The FRA requirements at these crossings 

are based on, in part, the diagnostic team review, as well as consideration of over 15,000 public 

comments in connection with this Project. 

Pursuant to FRA's Sealed Corridor Guidelines, where Brightline trains traverse crossings at 80 

mph or greater, the crossings will incorporate vehicle presence detection, health monitoring, and 

"four quadrant" gates. Further, positive train control will be implemented on the entire corridor, 

which will enable remote stoppage of trains if speed limitations are exceeded. 

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The photographs displayed by Congressman Posey, at the recent legislative hearing, do not depict 

the anticipated warning device construction at these crossings because, of course, the construction 

from West Palm Beach to Orlando has not yet commenced. 

We look forward to meeting with Congressman Posey, in order to provide greater details as to 

anticipated crossing warning device construction. 

Question 4) Martin Countv's Fire Rescue Division Chief Wouters raised concerns about the ability 

of first responders to quickly respond to incidents. 

Response: 

The Brightline trains moving through the Treasure Coast will quite literally clear crossings (from 

gates descending to gates ascending) in approximately 45 seconds, less than the average stop light. 

As such, we do not expect any disruption in the ability of first responders to access locations on 

either side of the tracks as a result of our operations. 

Further, as with first responders in Phase I of our operation, we will be meeting with Treasure 

Coast first responders on a regular basis to ensure that they are fully apprised of our operations 

and the manner in which we can work together to safely handle incidents in and around the rail 

line. We have worked with Phase I area first responders on training, both classroom and field 

operations, and will continue to do so in Phase II. Indeed, Martin County first responders have 

already been invited to our Phase I training classes. 

We will look forward to continuing our dialogue with Chief Wouters as we move into the Phase 

II construction process. 

Very truly yours, 

~:.:~ General Counsel 

'Member of the 1/linois Bar only. and not a member of the Florida Bar 

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ATTACHMENT RE: PABs APPLICABILITY 

Many factors support USDOT's interpretation that 26 U.S.C. § 142 covers Brightline: 

• Section 142(m)(2)(C) gives the Secretary very broad decision to make allocation 

decisions "as he determines appropriate." 

• USDOT has consistently applied 142(m) to allow for allocations to passenger rail. 

In 2010, USDOT approved an allocation of approximately $398 million in private 

activity bonds for a passenger rail project from Denver International Airport to 

Denver's Union Station under the same provision under which Brightline received 

its allocations. Likewise, in 2014, USDOT approved an allocation under the 

same provision of approximately $1.3 billion in private activity bonds for a 

passenger rail project in Maryland known as the "Purple Line." 

• US DOT's interpretation fulfills the purpose of the statute to facilitate the use of 

private funds to improve crumbling or insufficient infrastructure. 

• Between 1997 and 2001, several bills were proposed that would have allowed P ABs 

allocations only for highway projects. SeeS. 275, 105th Cong. § 2(l)(A) (1997) 

(defining a "qualified highway infrastructure project" as a project for "the 

construction or reconstruction of a highway"); S. 470, 106th Cong. § 2(l)(A)(i) 

(1999) (defining a "qualified highway infrastructure project" as a project for "the 

construction or reconstruction of a highway"); S. 870, 1 07th Cong. § 2( 1 )(A) (2001) 

(defining a "qualified highway infrastructure project" as a project for the 

"construction, reconstruction, or maintenance, or maintenance of a 

highway ... "). None of those bills was adopted. Instead, following years of 

negotiations, Congress enacted SAFETEA-LU, explicitly and broadly defining the 

term "qualified highway or surface freight transfer facilities" to include "any 

surface transportation project which receives Federal assistance under title 23." 26 

U.S.C. § 142(m)(l )(A). If Congress had intended for the term "qualified highway 

or surface freight transfer facilities" to include only highway projects which receive 

Federal assistance under Title 23, they could have--and would have-defined that 

term differently. 

• Funds for rail-highway crossings are not the only title 23 funds available for rail 

projects. Title 23 includes the Transportation Infrastructure Finance and 

Innovation Act ("TIFIA") program, which provides federal assistance in the form 

of secured loans, loan guarantees and lines of credit for eligible projects. See 23 

U.S.C. §§ 603, 604. Eligible projects are defined to include "a project for intercity 

passenger bus or rail facilities and vehicles." 23 U.S. C.§ 601(a)(12). This further 

supports the conclusion that Congress intended P ABs to be available for passenger 

rail projects under Section 142(m). 

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The Counties have argued that, under 26 U.S.C. § 142(m), only those discrete portions of a 

"surface transportation project" which actually receive Title 23 funding are eligible for PABs. 

However, this argument finds no basis in the statute either. The statutory language does not in any 

way restrict eligibility to the discrete project components which receive Title 23 funding. It makes 

clear that the projects themselves shall be eligible, not individual components thereof. It also 

accords USDOT nearly complete discretion to decide how to allocate tax exemptions, stating that 

they shall be allocated "in such manner as the Secretary determines appropriate." !d. 

§ 142(m)(2)(C). 

Recognizing this, the Counties have sought to import into 26 U.S.C. § 142(m) the definition of 

"project" in Title 23, which they contend would narrow the field of projects which are eligible for 

PABs. Once again, however, they are mistaken. The Federal Highway Administration 

("FHWA"), which administers Title 23, has addressed this issue and rejected the argument being 

advanced. It found that for purposes of 26 U.S.C. § 142(m), the most reasonable definition of 

"project" is the overall surface transportation project, not just the segment(s) which received Title 

23 funds. 

FHWA weighed in on this shortly after the enactment ofSAFETEA-LU, in an opinion letter to the 

IRS. See Ltr. from FHW A Acting Chief Counsel, Edward Kussy to IRS Chief Counsel, Donald 

Korb, I 0/07/05. FHW A explained that "we believe the most reasonable reading of [Section 

142(m)] permits the proceeds of private activity bonds (PAB) authorized by this provision to be 

used on the entire transportation facility that is being financed and constructed even though only 

a portion of that facility receives Federal assistance under title 23." ld at 2. The letter then went 

on to point out that it is common for only a portion of a transportation facility to receive Title 23 

funds, in part because such funds subject recipients to various federal requirements. Id. Thus, a 

narrow reading of the term "project" would "distort the longstanding way in which facilities are 

actually funded, create needless red tape, and artificially result in the extension of Federal 

requirements that have nothing to do with the bonding of transportation facilities." /d. FHWA 

also observed that other statutory provisions and the legislative history of SAFETEA-LU indicate 

that Congress did not intend to interfere with how states choose to fund transportation projects, 

which is exactly what a narrow reading of"project" would do. Id. Finally, FHWA stressed that 

P ABs are likely to be secured by a revenue stream from the project as a whole, rather than a discrete 

segment thereof, and that it therefore makes sense to allow such bonds to fund the project as a 

whole. /d. 

Indeed, the Counties' strained interpretation of Section 142(m) would greatly limit the utility of 

PABs by making them available only for portions of a project which are already receiving federal 

funding and are therefore least likely to need additional financing. There is simply no evidence 

in the statutory language - or in the purpose of the statute - that Congress intended to restrict the 

use of tax-exempt facility bond financing in such an illogical manner. 

Undaunted, the Counties also argue that the Brightline Project is not eligible for a PABs allocation 

because Brightline does not own the historic rail corridor which is being improved and used for 

the Project, on which the Title 23 funds have been spent. The Counties contend that Brightline 

has not itself received a single dollar ofTitle 23 funds, the corridor has. They say Brightline "relies 

on Title 23 funds spent prior to August 2014 on railway-highway grade crossing improvement 

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projects undertaken by FDOT on the FECR corridor." The statutory provisions authorizing PABs 

do not require that the project proponent own the transportation facility on which Title 23 funds 

were spent in order to be eligible for P ABs. Nor do they require that the project proponent receive 

the Title 23 funds relied upon in applying for PABs. They require only that the "project" receive 

such funding. It is irrelevant which entity or entities the funding was funneled through, so long as 

the "project" received Title 23 funds. 

That requirement was clearly met here, as the approximately $9 million in question was utilized 

to improve railway-highway grade crossings which are active and in use today, and to prepare the 

rail corridor for the reintroduction of passenger service and other potential growth in rail traffic. 

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Questions for Mr. Patrick Goddard 

President and Chief Operating Officer 

All Aboard Florida/Brightline 

Questions from Representative Ron DeSantis (FL-6) 

Aprill9, 2018, Hearing: "Examining Tax-Exempt Private Activity Bonds for 

All Aboard Florida's Brightline Passenger Rail Sys..:..te"'m"''-' ______ _ 

On March 7, 2018, you stated at a chamber meeting in Miami that "train ridership is three times 

what we expected." Now that AAF has been running its inaugural46-mile route from Fort 

Lauderdale to West Palm Beach for several months, what is the average number of seats that 

have been sold on your Brightline trains? If that number varies based on the day of the week or 

time of day, please provide all relevant data to answer this question. 

What is the average ticket price for Brightline's route from Fort Lauderdale to West Palm 

Beach? When will the price increase from the current reduced introductory price, and what will 

that new price be? 

What will the average ticket price be for the longer Brightline route from Miami to Orlando? 

When providing these numbers, please differentiate between the reduced introductory price and 

the final ticket price. 
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June 1, 2018 

VIA FIRST CLASS U.S. MAIL and EMATI. 

The Honorable Mark Meadows 

Congress of the United States 

House of Representatives 

Committee on Oversight and Government Refonn 

2157 Rayburn House Office Building 

Washington, DC 20515 

Re: Questions from Representative Ron DeSantis (FL-6) 

Dear Chainnan Meadows: 

161 NW 6th StrMt, SJ1te 900, Miami, A.. 33136 

I am in receipt of your questions from Representative Ron DeSantis. The following are Brightline's 

responses: 

1) Our expanded revenue service to/from Miami/Fort Lauderdale/West Palm Beach commenced on 

Saturday, May 19, 2018. I am pleased to advise that all of our trains were virtually sold out in the 

first weekend of this expanded service. Ticket sales continue to be robust. 

2) Our introductory fares, which commenced on Monday, May 21, 2018, are $10 per each segment 

in Smart service, and $15 per each segment in Select service. For the entire trip from MiamiWest Pahn Beach or reverse, the Smart service introductory fare is $15 each way and the Select 

service introductory fare is $25 each way. Demand based pricing models will set fares after the 

introductory period. 

3) As we get closer to commencement of operations between Miami and Orlando, we will fmalize 

ticket prices for that corridor. 

Thank you for the opportunity to provide additional infonnation. We invite you and others on the 

Committee to view frrsthand the strong demand for the Brightline service. 

cc: The Honorable Gerald E. Connolly, Ranking Member, Subcommittee on Government Operations 

Representative Ron DeSantis 

Sharon Casey, Deputy Chief Clerk (sharon.~es.~0 '·'· rnaiLhQ.\!.sC.~ov)