II 

110TH CONGRESS 

2D SESSION S. 3700 

To encourage and support the development of high-speed passenger rail 

transportation in the United States, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 19, 2008 

Mr. KERRY (for himself, Mr. SPECTER, Mr. LAUTENBERG, Mr. INOUYE, Mr. 

BROWN, Ms. STABENOW, Mrs. FEINSTEIN, Mr. DODD, Mr. CASEY, Mr. 

LIEBERMAN, Mr. WHITEHOUSE, Mrs. CLINTON, Mr. SCHUMER, Ms. 

SNOWE, Mr. MENENDEZ, and Mr. CARPER) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To encourage and support the development of high-speed 

passenger rail transportation in the United States, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘High-Speed Rail for 

5 America Act of 2008’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 

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1 (1) Highway congestion, which is increasing 

2 every year, annually costs our Nation’s economy 

3 $78,000,000,000, 2,900,000,000 gallons of wasted 

4 fuel, and 4,200,000,000 lost hours of productivity. 

5 (2) High-speed rail travel, which can be more 

6 reliable than air travel, could potentially reduce trav7 el time by 30 percent, compared with air travel, for 

8 passengers traveling between 100 and 500 miles 

9 from city center to city center. 

10 (3) Several European Union countries spend as 

11 much as 20 times more than the United States 

12 spends, per capita, on intercity rail. 

13 (4) Rail travel could potentially reduce the ef14 fect of greenhouse gas emissions generated by travel 

15 between cities that are between 100 and 500 miles 

16 apart— 

17 (A) by 80 percent compared with air18 planes; and 

19 (B) by 21 percent compared with auto20 mobiles. 

21 (5) Rail travel, which is significantly safer than 

22 travel by automobile, has a fatality rate per pas23 senger mile traveled that is 96 percent less than the 

24 rate for automobile travel. 

25 (b) PURPOSE.—The purposes of this Act are to— 

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1 (1) provide for the development of world-class, 

2 high-speed passenger rail transportation in the 

3 United States; and 

4 (2) provide a constant and reliable source of 

5 funding for high-speed passenger rail and intercity 

6 passenger rail in the form of tax-exempt bonds and 

7 tax credit bonds in order to— 

8 (A) reduce nonrail traffic congestion; 

9 (B) reduce greenhouse gas emissions; and 

10 (C) provide alternative modes or transpor11 tation between city centers. 

12 SEC. 3. HIGH-SPEED PASSENGER RAIL PROGRAM. 

13 Chapter 261 of title 49, United States Code, is 

14 amended— 

15 (1) in the chapter analysis, by adding at the 

16 end the following: 

‘‘26107. Office of High-Speed Passenger Rail.’’; 

17 and 

18 (2) by adding at the end the following: 

19 ‘‘§ 26107. Office of High-Speed Passenger Rail 

20 ‘‘(a) ESTABLISHMENT.—There is established, within 

21 the Federal Railroad Administration, the Office of High22 Speed Passenger Rail, which shall be headed by the Asso23 ciate Administrator for High-Speed Rail. 

24 ‘‘(b) FUNCTIONS.—The Office shall— 

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1 ‘‘(1) assume responsibility for all high-speed 

2 rail activities carried out by the Office of Railroad 

3 Development before the date of the enactment of the 

4 High-Speed Rail for America Act of 2008; and 

5 ‘‘(2) consult with the Secretary of Transpor6 tation to assist eligible entities to— 

7 ‘‘(A) finance qualified high-speed intercity 

8 rail facility projects through bonds issued in ac9 cordance with section 54F or 142(i) of the In10 ternal Revenue Code of 1986; and 

11 ‘‘(B) understand the procedures and cri12 teria for submitting applications for financial 

13 assistance for such projects. 

14 ‘‘(c) CONSULTATION.—The Secretary of Transpor15 tation, working through the Office, shall consult with the 

16 Secretary of Homeland Security and the Secretary of De17 fense to understand how high-speed rail can benefit the 

18 Nation’s infrastructure in times of emergency and 

19 prioritize which corridors will prove most beneficial if 

20 other modes of transportation are compromised or not 

21 available or large numbers of people must be moved quick22 ly in an emergency. 

23 ‘‘(d) STAFF.—In addition to employees of the Federal 

24 Railroad Administration, the Associate Administrator, in 

25 consultation with the Administrator, may, by agreement, 

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1 on a reimbursable basis or otherwise, utilize the personnel 

2 services, equipment, and facilities of any other Federal 

3 agency in administering the program. Each individual de4 tailed to the Office from another department or agency 

5 shall report to a supervisor in the Office, who shall be re6 sponsible for the performance evaluation of such 

7 detailee.’’. 

8 SEC. 4. AUTHORIZATION OF APPROPRIATIONS. 

9 (a) IN GENERAL.—There are authorized to be appro10 priated to the Secretary of Transportation $15,000,000 

11 for each of the fiscal years 2009 through 2014, for the 

12 operation of the Office of High-Speed Passenger Rail es13 tablished under section 26107 of title 49, United States 

14 Code. 

15 (b) APPROPRIATED FUNDS REMAIN AVAILABLE.— 

16 Amounts appropriated pursuant to subsection (a) for any 

17 fiscal year shall remain available until expended. 

18 SEC. 5. PRIVATE ACTIVITY BONDS FOR HIGH-SPEED RAIL. 

19 (a) IN GENERAL.—Subsection (i) of section 142 of 

20 the Internal Revenue Code of 1986 (relating to exempt 

21 facility bond) is amended to read as follows: 

22 ‘‘(i) QUALIFIED HIGH-SPEED INTERCITY RAIL FA23 CILITY PROJECTS.— 

24 ‘‘(1) IN GENERAL.—For purposes of subsection 

25 (a)(11), the term ‘qualified high-speed intercity rail 

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1 facility project’ means a project for a high-speed 

2 intercity rail facility which the Secretary determines, 

3 after consultation with the Secretary of Transpor4 tation— 

5 ‘‘(A) satisfies the criteria described in sec6 tion 26106(e)(2) of title 49, United States 

7 Code, and 

8 ‘‘(B) makes a substantial contribution to 

9 improving a rail transportation corridor for 

10 high-speed passenger rail use. 

11 ‘‘(2) HIGH-SPEED INTERCITY RAIL FACILITY.— 

12 For purposes of this subsection, the term ‘high13 speed intercity rail facility’ means any facility used 

14 in conjunction with high-speed rail (as defined in 

15 section 26106(b)(4) of title 49, United States Code). 

16 ‘‘(3) AGGREGATE FACE AMOUNT OF TAX-EX17 EMPT FINANCING.— 

18 ‘‘(A) IN GENERAL.—An issue shall not be 

19 treated as an issue described in subsection 

20 (a)(11) if the aggregate face amount of bonds 

21 issued pursuant to such issue for a project 

22 (when added to the aggregate face amount of 

23 bonds previously so issued for such project) ex24 ceeds an amount allocated by the Secretary for 

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1 such project as part of the designation of such 

2 project under paragraph (1). 

3 ‘‘(B) LIMITATION ON AMOUNT OF

4 BONDS.—The Secretary may not allocate au5 thority to issue bonds for qualified high-speed 

6 intercity rail projects in an aggregate face 

7 amount exceeding $8,000,000,000. 

8 ‘‘(4) ELECTION BY NONGOVERNMENTAL OWN9 ERS.—A project shall be treated as described in sub10 section (a)(11) only if any owner of such project 

11 which is not a governmental unit irrevocably elects 

12 not to claim— 

13 ‘‘(A) any deduction under section 167 or 

14 168, and 

15 ‘‘(B) any credit under this subtitle, 

16 with respect to the property to be financed by the 

17 net proceeds of the issue. 

18 ‘‘(5) USE OF PROCEEDS.—A bond issued as 

19 part of an issue described in subsection (a)(11) shall 

20 not be considered an exempt facility bond unless any 

21 net proceeds not used within the 5-year period be22 ginning on the date of the issuance of such bond are 

23 used (not later than 6 months after the close of such 

24 period) to redeem bonds which are part of such 

25 issue. 

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1 ‘‘(6) CONDITIONS.—Any project for which 

2 bonds were issued under subsection (a)(11) shall be 

3 subject to the grant requirements under section 

4 24405 of title 49, United States Code.’’. 

5 (b) EXEMPTION FROM STATE VOLUME CAP.—Sec6 tion 146(g) of the Internal Revenue Code of 1986 (relat7 ing to exception for certain bonds) is amended— 

8 (1) by adding ‘‘and’’ at the end of paragraph 

9 (2), 

10 (2) by inserting ‘‘(11),’’ after ‘‘(2),’’ in para11 graph (3), and 

12 (3) by striking ‘‘, and’’ at the end of paragraph 

13 (3) and all that follows through the end of the sub14 section and inserting a period. 

15 (c) CONFORMING AMENDMENT.—Paragraph (11) of 

16 section 142(a) of the Internal Revenue Code of 1986 is 

17 amended to read as follows: 

18 ‘‘(11) qualified high-speed intercity rail facility 

19 projects,’’. 

20 (d) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—The amendments made by 

22 this section shall apply to any bond issued after the 

23 date of the enactment of this Act and on or before 

24 the date which is 6 years after such date of enact25 ment. 

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1 (2) APPLICATION OF CODE.—The Internal Rev2 enue Code of 1986 shall be applied and administered 

3 to bonds issued after the date which is 6 years after 

4 the date of the enactment of this Act as if the 

5 amendments described in paragraph (1) had never 

6 been enacted. 

7 SEC. 6. CREDIT TO HOLDERS OF QUALIFIED RAIL BONDS. 

8 (a) IN GENERAL.—Subpart I of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 is amended by adding at the end the following new 

11 section: 

12 ‘‘SEC. 54F. CREDIT TO HOLDERS OF QUALIFIED RAIL 

13 BONDS. 

14 ‘‘(a) QUALIFIED RAIL BOND.—For purposes of this 

15 subpart, the term ‘qualified rail bond’ means— 

16 ‘‘(1) any qualified super high-speed intercity 

17 rail facility bond, and 

18 ‘‘(2) any qualified rail infrastructure bond. 

19 ‘‘(b) QUALIFIED SUPER HIGH-SPEED INTERCITY

20 RAIL FACILITY BOND.—For purposes of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘qualified super 

22 high-speed intercity rail facility bond’ means any 

23 bond issued as part of an issue if— 

24 ‘‘(A) the bond is issued by a qualified 

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1 retary to such issuer of a portion of the na2 tional qualified rail bond limitation under sub3 section (f)(1)(A) by not later than the end of 

4 the calendar year following the year of such al5 location, 

6 ‘‘(B) 100 percent of the available project 

7 proceeds of such issue are to be used for capital 

8 expenditures described in paragraph (3) in9 curred for one or more qualified super high10 speed intercity rail facility projects, 

11 ‘‘(C) the State designates such bond for 

12 purposes of this section and the bond is in reg13 istered form, and 

14 ‘‘(D) in lieu of the requirements of section 

15 54A(d)(2), the issue meets the requirements of 

16 subsection (g). 

17 ‘‘(2) QUALIFIED SUPER HIGH-SPEED INTERCITY

18 RAIL FACILITY PROJECT.— 

19 ‘‘(A) IN GENERAL.—The term ‘qualified 

20 super high-speed intercity rail facility project’ 

21 means a project for a super high-speed intercity 

22 rail facility which— 

23 ‘‘(i) the Secretary determines, after 

24 consultation with the Secretary of Trans25 portation— 

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1 ‘‘(I) satisfies the criteria de2 scribed in section 26106(e)(2) of title 

3 49, United States Code, and 

4 ‘‘(II) makes a substantial con5 tribution to improving a high-speed 

6 rail transportation corridor for inter7 city passenger rail use, and 

8 ‘‘(ii) the Secretary designates as a 

9 qualified super high-speed intercity rail fa10 cility project. 

11 ‘‘(B) REQUIREMENTS FOR PROJECT DES12 IGNATION.— 

13 ‘‘(i) IN GENERAL.—A project may not 

14 be designated by the Secretary under sub15 paragraph (A) as a qualified super high16 speed intercity rail facility project unless— 

17 ‘‘(I) the passenger service pro18 vided by the project is over rail track 

19 dedicated for such service, 

20 ‘‘(II) the project does not include 

21 any at-grade rail crossings, and 

22 ‘‘(III) all Federal environmental 

23 review processes have been completed 

24 at the time of the designation. 

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1 ‘‘(ii) WAIVER OF CERTAIN REQUIRE2 MENTS.—The Secretary, after consultation 

3 with the Secretary of Transportation, may 

4 waive subclauses (I) and (II) of clause (i), 

5 in the designation of any qualified super 

6 high-speed intercity rail facility project, if 

7 the Secretary determines that it is in the 

8 public interest and is not inconsistent with 

9 the purposes of this section. 

10 ‘‘(iii) EXCEPTION FOR EXISTING

11 HIGH-SPEED RAIL CORRIDORS.—Clause (i) 

12 shall not apply in the case of any project 

13 to enhance any railroad providing high14 speed passenger rail transportation as of 

15 the date of the enactment of the High16 Speed Rail for America Act of 2008, if 

17 such railroad is capable of operating 

18 speeds of at least 150 miles per hour on 

19 such date. 

20 ‘‘(C) SUPER HIGH-SPEED INTERCITY RAIL

21 FACILITY.—For purposes of this paragraph, the 

22 term ‘super high-speed intercity rail facility’ 

23 means any facility used in conjunction with an 

24 intercity passenger rail service that is reasonmstockstill on PROD1PC66 with BILLS

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1 ably expected to operate at speeds of at least 

2 150 miles per hour. 

3 ‘‘(3) CAPITAL EXPENDITURES.—For purposes 

4 of paragraph (1)(B), the term ‘capital expenditures’ 

5 means— 

6 ‘‘(A) expenditures related to the develop7 ment and operation of high-speed rail infra8 structure for acquiring, constructing, or improv9 ing equipment, track, track structures, and 

10 rights-of-way, 

11 ‘‘(B) payments for the capital portion of 

12 rail trackage rights agreements, 

13 ‘‘(C) highway-rail grade crossing improve14 ments, separations, and closures, 

15 ‘‘(D) communication and signal improve16 ments, and 

17 ‘‘(E) other expenditures related to high18 speed rail service. 

19 ‘‘(c) QUALIFIED RAIL INFRASTRUCTURE BOND.— 

20 For purposes of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘qualified rail in22 frastructure bond’ means any bond issued as part of 

23 an issue if— 

24 ‘‘(A) the bond is issued by a qualified 

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1 retary to such issuer of a portion of the na2 tional qualified rail bond limitation under sub3 section (f)(1)(B) by not later than the end of 

4 the calendar year following the year of such al5 location, 

6 ‘‘(B) 100 percent of the available project 

7 proceeds of such issue are to be used for capital 

8 expenditures incurred for one or more qualified 

9 rail infrastructure projects, 

10 ‘‘(C) the qualified issuer designates such 

11 bond for purposes of this section and the bond 

12 is in registered form, and 

13 ‘‘(D) in lieu of the requirements of section 

14 54A(d)(2), the issue meets the requirements of 

15 subsection (g). 

16 ‘‘(2) QUALIFIED RAIL INFRASTRUCTURE

17 PROJECT.—The term ‘qualified rail infrastructure 

18 project’ means a project eligible under subsection (b) 

19 of section 26101 of title 49, United States Code (de20 termined without regard to paragraph (2) thereof), 

21 based on the criteria of subsection (c) of such sec22 tion, which the Secretary determines, after consulta23 tion with the Secretary of Transportation, makes a 

24 substantial contribution to improving a rail trans25 portation corridor for intercity passenger rail use. 

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1 ‘‘(d) SPECIAL USE RULES.—For purposes of sub2 section (b)(1)(B) or (c)(1)(B)— 

3 ‘‘(1) REFINANCING RULES.—A qualified project 

4 may be refinanced with proceeds of a qualified rail 

5 bond only if the indebtedness being refinanced (in6 cluding any obligation directly or indirectly refi7 nanced by such indebtedness) was originally incurred 

8 after the date of the enactment of this section. 

9 ‘‘(2) REIMBURSEMENT.—A qualified rail bond 

10 may be issued to reimburse for amounts paid after 

11 the date of the enactment of this section with re12 spect to a qualified project, but only if— 

13 ‘‘(A) prior to the payment of the original 

14 expenditure, the issuer declared its intent to re15 imburse such expenditure with the proceeds of 

16 a qualified rail bond, 

17 ‘‘(B) not later than 60 days after payment 

18 of the original expenditure, the issuer adopts an 

19 official intent to reimburse the original expendi20 ture with such proceeds, and 

21 ‘‘(C) the reimbursement is made not later 

22 than 18 months after the date the original ex23 penditure is paid. 

24 ‘‘(3) TREATMENT OF CHANGES IN USE.—The 

25 proceeds of an issue shall not be treated as used for 

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1 a qualified project to the extent that an issuer takes 

2 any action within its control which causes such pro3 ceeds not to be used for such project. The Secretary 

4 shall prescribe regulations specifying remedial ac5 tions that may be taken (including conditions to tak6 ing such remedial actions) to prevent an action de7 scribed in the preceding sentence from causing a 

8 bond to fail to be a qualified rail bond. 

9 ‘‘(e) MATURITY LIMITATIONS.—In lieu of section 

10 54A(d)(5), a bond shall not be treated as a qualified rail 

11 bond if the maturity of such bond exceeds— 

12 ‘‘(1) in the case of a qualified super high-speed 

13 intercity rail facility bond, 20 years, and 

14 ‘‘(2) in the case of a qualified rail infrastruc15 ture bond, 15 years. 

16 ‘‘(f) NATIONAL LIMITATION ON AMOUNT OF BONDS

17 DESIGNATED.— 

18 ‘‘(1) IN GENERAL.—There is a national quali19 fied rail bond limitation of— 

20 ‘‘(A) in the case of qualified super high21 speed intercity rail facility bonds, 

22 $10,000,000,000, and 

23 ‘‘(B) in the case of qualified rail infra24 structure bonds, $5,400,000,000. 

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1 ‘‘(2) ALLOCATION BY SECRETARY.—The na2 tional qualified rail bond limitation shall be allocated 

3 by the Secretary (in the case of qualified super high4 speed intercity rail facility bonds, after consultation 

5 with the Secretary of Transportation) among quali6 fied projects in such manner as the Secretary deter7 mines appropriate. 

8 ‘‘(g) SPECIAL RULES RELATING TO EXPENDI9 TURES.— 

10 ‘‘(1) IN GENERAL.—An issue shall be treated as 

11 meeting the requirements of this subsection if, as of 

12 the date of issuance, the issuer reasonably expects— 

13 ‘‘(A) 100 percent or more of the available 

14 project proceeds of the issue are to be spent for 

15 1 or more qualified projects within the 5-year 

16 period beginning on the date of issuance of the 

17 qualified rail bond, 

18 ‘‘(B) a binding commitment with a third 

19 party to spend at least 10 percent of the avail20 able project proceeds of the issue will be in21 curred within the 6-month period beginning on 

22 the date of issuance of the qualified rail bond, 

23 and 

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1 ‘‘(C) such projects will be completed with 

2 due diligence and the proceeds from the sale of 

3 the issue will be spent with due diligence. 

4 ‘‘(2) EXTENSION OF PERIOD.—Upon submis5 sion of a request prior to the expiration of the period 

6 described in paragraph (1)(A), the Secretary may 

7 extend such period if the issuer establishes that the 

8 failure to satisfy the 5-year requirement is due to 

9 reasonable cause and the related projects will con10 tinue to proceed with due diligence. 

11 ‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT

12 OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex13 tent that less than 100 percent of the available 

14 project proceeds of such issue are expended by the 

15 close of the 5-year period beginning on the date of 

16 issuance (or if an extension has been obtained under 

17 paragraph (2), by the close of the extended period), 

18 the issuer shall redeem all of the nonqualified bonds 

19 within 90 days after the end of such period. For 

20 purposes of this paragraph, the amount of the non21 qualified bonds required to be redeemed shall be de22 termined in the same manner as under section 142. 

23 ‘‘(h) SPECIAL RULES RELATING TO POOLED FI24 NANCING BONDS.—No portion of a pooled financing bond 

25 may be allocable to loan unless the borrower has entered 

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1 into a written loan commitment for such portion prior to 

2 the issue date of such issue. 

3 ‘‘(i) OTHER DEFINITIONS AND SPECIAL RULES.— 

4 For purposes of this section— 

5 ‘‘(1) POOLED FINANCING BOND.—The term 

6 ‘pooled financing bond’ shall have the meaning given 

7 such term by section 149(f)(6). 

8 ‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 

9 project’ means a qualified high-speed intercity rail 

10 facility project or a qualified rail infrastructure 

11 project. 

12 ‘‘(3) REPORTING.—Issuers of qualified super 

13 high-speed intercity rail facility bonds shall submit 

14 annual reports to the Secretary and the Secretary of 

15 Transportation regarding the progress of qualified 

16 super high-speed intercity rail facility projects in 

17 such manner determined by the Secretary, after con18 sultation with the Secretary of Transportation. 

19 ‘‘(4) CONDITIONS.—Any project financed with 

20 the proceeds of a qualified rail bond shall be subject 

21 to the grant requirements under section 24405 of 

22 title 49, United States Code. 

23 ‘‘(j) TERMINATION.—This section shall not apply 

24 with respect to— 

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1 ‘‘(1) any qualified super high-speed intercity 

2 rail facility bond after December 31, 2014, and 

3 ‘‘(2) any qualified rail infrastructure bond 

4 issued after December 31, 2014.’’. 

5 (b) CONFORMING AMENDMENTS.— 

6 (1) Paragraph (1) of section 54A(d) of the In7 ternal Revenue Code of 1986 is amended— 

8 (A) by striking ‘‘or’’ at the end of subpara9 graph (C), 

10 (B) by adding ‘‘or’’ at the end of subpara11 graph (D), 

12 (C) by inserting after subparagraph (D) 

13 the following new subparagraph: 

14 ‘‘(E) a qualified rail bond,’’, and 

15 (D) by inserting ‘‘(paragraphs (3), (4), 

16 and (6) in the case of a qualified rail bond)’’ 

17 after ‘‘and (6)’’. 

18 (2) Subparagraph (C) of section 54A(d)(2) of 

19 such Code is amended by striking ‘‘and’’ at the end 

20 of clause (iii), by striking the period at the end of 

21 clause (iv) and inserting ‘‘, and’’, and by adding at 

22 the end the following new clause: 

23 ‘‘(v) in the case of a qualified rail 

24 bond, a purpose specified in subsection 

25 (b)(1) or (c)(1) of section 54F.’’. 

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1 (3) The table of sections for subpart I of part 

2 IV of subchapter A of chapter 1 of such Code is 

3 amended by adding at the end the following new 

4 item: 

‘‘Sec. 54F. Qualified rail bonds.’’. 

5 (c) ISSUANCE OF REGULATIONS.—The Secretary of 

6 the Treasury shall issue regulations required under section 

7 54F of the Internal Revenue Code of 1986 (as added by 

8 this section) not later than 120 days after the date of the 

9 enactment of this Act. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to obligations issued after the date 

12 of the enactment of this Act. 

13 SEC. 7. REPORT ON REVENUE PROVISIONS FOR HIGH14 SPEED RAIL. 

15 (a) STUDY.—The Secretary of the Treasury shall 

16 conduct a study on the use of excise taxes to fund projects 

17 related to high-speed rail. 

18 (b) REPORT.—Not later than 1 year after the date 

19 of the enactment of this Act, the Secretary of the Treasury 

20 shall submit to Congress a report on the study conducted 

21 under subsection (a). 

Æ 

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