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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3700 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``High-Speed Rail for America Act of 
2008''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) Highway congestion, which is increasing every year, 
        annually costs our Nation's economy $78,000,000,000, 
        2,900,000,000 gallons of wasted fuel, and 4,200,000,000 lost 
        hours of productivity.
            (2) High-speed rail travel, which can be more reliable than 
        air travel, could potentially reduce travel time by 30 percent, 
        compared with air travel, for passengers traveling between 100 
        and 500 miles from city center to city center.
            (3) Several European Union countries spend as much as 20 
        times more than the United States spends, per capita, on 
        intercity rail.
            (4) Rail travel could potentially reduce the effect of 
        greenhouse gas emissions generated by travel between cities 
        that are between 100 and 500 miles apart--
                    (A) by 80 percent compared with airplanes; and
                    (B) by 21 percent compared with automobiles.
            (5) Rail travel, which is significantly safer than travel 
        by automobile, has a fatality rate per passenger mile traveled 
        that is 96 percent less than the rate for automobile travel.
    (b) Purpose.--The purposes of this Act are to--
            (1) provide for the development of world-class, high-speed 
        passenger rail transportation in the United States; and
            (2) provide a constant and reliable source of funding for 
        high-speed passenger rail and intercity passenger rail in the 
        form of tax-exempt bonds and tax credit bonds in order to--
                    (A) reduce nonrail traffic congestion;
                    (B) reduce greenhouse gas emissions; and
                    (C) provide alternative modes or transportation 
                between city centers.

SEC. 3. HIGH-SPEED PASSENGER RAIL PROGRAM.

    Chapter 261 of title 49, United States Code, is amended--
            (1) in the chapter analysis, by adding at the end the 
        following:

``26107. Office of High-Speed Passenger Rail.'';
        and
            (2) by adding at the end the following:
``Sec. 26107. Office of High-Speed Passenger Rail
    ``(a) Establishment.--There is established, within the Federal 
Railroad Administration, the Office of High-Speed Passenger Rail, which 
shall be headed by the Associate Administrator for High-Speed Rail.
    ``(b) Functions.--The Office shall--
            ``(1) assume responsibility for all high-speed rail 
        activities carried out by the Office of Railroad Development 
        before the date of the enactment of the High-Speed Rail for 
        America Act of 2008; and
            ``(2) consult with the Secretary of Transportation to 
        assist eligible entities to--
                    ``(A) finance qualified high-speed intercity rail 
                facility projects through bonds issued in accordance 
                with section 54F or 142(i) of the Internal Revenue Code 
                of 1986; and
                    ``(B) understand the procedures and criteria for 
                submitting applications for financial assistance for 
                such projects.
    ``(c) Consultation.--The Secretary of Transportation, working 
through the Office, shall consult with the Secretary of Homeland 
Security and the Secretary of Defense to understand how high-speed rail 
can benefit the Nation's infrastructure in times of emergency and 
prioritize which corridors will prove most beneficial if other modes of 
transportation are compromised or not available or large numbers of 
people must be moved quickly in an emergency.
    ``(d) Staff.--In addition to employees of the Federal Railroad 
Administration, the Associate Administrator, in consultation with the 
Administrator, may, by agreement, on a reimbursable basis or otherwise, 
utilize the personnel services, equipment, and facilities of any other 
Federal agency in administering the program. Each individual detailed 
to the Office from another department or agency shall report to a 
supervisor in the Office, who shall be responsible for the performance 
evaluation of such detailee.''.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to the 
Secretary of Transportation $15,000,000 for each of the fiscal years 
2009 through 2014, for the operation of the Office of High-Speed 
Passenger Rail established under section 26107 of title 49, United 
States Code.
    (b) Appropriated Funds Remain Available.--Amounts appropriated 
pursuant to subsection (a) for any fiscal year shall remain available 
until expended.

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

    (a) In General.--Subsection (i) of section 142 of the Internal 
Revenue Code of 1986 (relating to exempt facility bond) is amended to 
read as follows:
    ``(i) Qualified High-Speed Intercity Rail Facility Projects.--
            ``(1) In general.--For purposes of subsection (a)(11), the 
        term `qualified high-speed intercity rail facility project' 
        means a project for a high-speed intercity rail facility which 
        the Secretary determines, after consultation with the Secretary 
        of Transportation--
                    ``(A) satisfies the criteria described in section 
                26106(e)(2) of title 49, United States Code, and
                    ``(B) makes a substantial contribution to improving 
                a rail transportation corridor for high-speed passenger 
                rail use.
            ``(2) High-speed intercity rail facility.--For purposes of 
        this subsection, the term `high-speed intercity rail facility' 
        means any facility used in conjunction with high-speed rail (as 
        defined in section 26106(b)(4) of title 49, United States 
        Code).
            ``(3) Aggregate face amount of tax-exempt financing.--
                    ``(A) In general.--An issue shall not be treated as 
                an issue described in subsection (a)(11) if the 
                aggregate face amount of bonds issued pursuant to such 
                issue for a project (when added to the aggregate face 
                amount of bonds previously so issued for such project) 
                exceeds an amount allocated by the Secretary for such 
                project as part of the designation of such project 
                under paragraph (1).
                    ``(B) Limitation on amount of bonds.--The Secretary 
                may not allocate authority to issue bonds for qualified 
                high-speed intercity rail projects in an aggregate face 
                amount exceeding $8,000,000,000.
            ``(4) Election by nongovernmental owners.--A project shall 
        be treated as described in subsection (a)(11) only if any owner 
        of such project which is not a governmental unit irrevocably 
        elects not to claim--
                    ``(A) any deduction under section 167 or 168, and
                    ``(B) any credit under this subtitle,
        with respect to the property to be financed by the net proceeds 
        of the issue.
            ``(5) Use of proceeds.--A bond issued as part of an issue 
        described in subsection (a)(11) shall not be considered an 
        exempt facility bond unless any net proceeds not used within 
        the 5-year period beginning on the date of the issuance of such 
        bond are used (not later than 6 months after the close of such 
        period) to redeem bonds which are part of such issue.
            ``(6) Conditions.--Any project for which bonds were issued 
        under subsection (a)(11) shall be subject to the grant 
        requirements under section 24405 of title 49, United States 
        Code.''.
    (b) Exemption From State Volume Cap.--Section 146(g) of the 
Internal Revenue Code of 1986 (relating to exception for certain bonds) 
is amended--
            (1) by adding ``and'' at the end of paragraph (2),
            (2) by inserting ``(11),'' after ``(2),'' in paragraph (3), 
        and
            (3) by striking ``, and'' at the end of paragraph (3) and 
        all that follows through the end of the subsection and 
        inserting a period.
    (c) Conforming Amendment.--Paragraph (11) of section 142(a) of the 
Internal Revenue Code of 1986 is amended to read as follows:
            ``(11) qualified high-speed intercity rail facility 
        projects,''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to any bond issued after the date of the enactment of 
        this Act and on or before the date which is 6 years after such 
        date of enactment.
            (2) Application of code.--The Internal Revenue Code of 1986 
        shall be applied and administered to bonds issued after the 
        date which is 6 years after the date of the enactment of this 
        Act as if the amendments described in paragraph (1) had never 
        been enacted.

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

    (a) In General.--Subpart I of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 54F. CREDIT TO HOLDERS OF QUALIFIED RAIL BONDS.

    ``(a) Qualified Rail Bond.--For purposes of this subpart, the term 
`qualified rail bond' means--
            ``(1) any qualified super high-speed intercity rail 
        facility bond, and
            ``(2) any qualified rail infrastructure bond.
    ``(b) Qualified Super High-Speed Intercity Rail Facility Bond.--For 
purposes of this section--
            ``(1) In general.--The term `qualified super high-speed 
        intercity rail facility bond' means any bond issued as part of 
        an issue if--
                    ``(A) the bond is issued by a qualified issuer 
                pursuant to an allocation by the Secretary to such 
                issuer of a portion of the national qualified rail bond 
                limitation under subsection (f)(1)(A) by not later than 
                the end of the calendar year following the year of such 
                allocation,
                    ``(B) 100 percent of the available project proceeds 
                of such issue are to be used for capital expenditures 
                described in paragraph (3) incurred for one or more 
                qualified super high-speed intercity rail facility 
                projects,
                    ``(C) the State designates such bond for purposes 
                of this section and the bond is in registered form, and
                    ``(D) in lieu of the requirements of section 
                54A(d)(2), the issue meets the requirements of 
                subsection (g).
            ``(2) Qualified super high-speed intercity rail facility 
        project.--
                    ``(A) In general.--The term `qualified super high-
                speed intercity rail facility project' means a project 
                for a super high-speed intercity rail facility which--
                            ``(i) the Secretary determines, after 
                        consultation with the Secretary of 
                        Transportation--
                                    ``(I) satisfies the criteria 
                                described in section 26106(e)(2) of 
                                title 49, United States Code, and
                                    ``(II) makes a substantial 
                                contribution to improving a high-speed 
                                rail transportation corridor for 
                                intercity passenger rail use, and
                            ``(ii) the Secretary designates as a 
                        qualified super high-speed intercity rail 
                        facility project.
                    ``(B) Requirements for project designation.--
                            ``(i) In general.--A project may not be 
                        designated by the Secretary under subparagraph 
                        (A) as a qualified super high-speed intercity 
                        rail facility project unless--
                                    ``(I) the passenger service 
                                provided by the project is over rail 
                                track dedicated for such service,
                                    ``(II) the project does not include 
                                any at-grade rail crossings, and
                                    ``(III) all Federal environmental 
                                review processes have been completed at 
                                the time of the designation.
                            ``(ii) Waiver of certain requirements.--The 
                        Secretary, after consultation with the 
                        Secretary of Transportation, may waive 
                        subclauses (I) and (II) of clause (i), in the 
                        designation of any qualified super high-speed 
                        intercity rail facility project, if the 
                        Secretary determines that it is in the public 
                        interest and is not inconsistent with the 
                        purposes of this section.
                            ``(iii) Exception for existing high-speed 
                        rail corridors.--Clause (i) shall not apply in 
                        the case of any project to enhance any railroad 
                        providing high-speed passenger rail 
                        transportation as of the date of the enactment 
                        of the High-Speed Rail for America Act of 2008, 
                        if such railroad is capable of operating speeds 
                        of at least 150 miles per hour on such date.
                    ``(C) Super high-speed intercity rail facility.--
                For purposes of this paragraph, the term `super high-
                speed intercity rail facility' means any facility used 
                in conjunction with an intercity passenger rail service 
                that is reasonably expected to operate at speeds of at 
                least 150 miles per hour.
            ``(3) Capital expenditures.--For purposes of paragraph 
        (1)(B), the term `capital expenditures' means--
                    ``(A) expenditures related to the development and 
                operation of high-speed rail infrastructure for 
                acquiring, constructing, or improving equipment, track, 
                track structures, and rights-of-way,
                    ``(B) payments for the capital portion of rail 
                trackage rights agreements,
                    ``(C) highway-rail grade crossing improvements, 
                separations, and closures,
                    ``(D) communication and signal improvements, and
                    ``(E) other expenditures related to high-speed rail 
                service.
    ``(c) Qualified Rail Infrastructure Bond.--For purposes of this 
section--
            ``(1) In general.--The term `qualified rail infrastructure 
        bond' means any bond issued as part of an issue if--
                    ``(A) the bond is issued by a qualified issuer 
                pursuant to an allocation by the Secretary to such 
                issuer of a portion of the national qualified rail bond 
                limitation under subsection (f)(1)(B) by not later than 
                the end of the calendar year following the year of such 
                allocation,
                    ``(B) 100 percent of the available project proceeds 
                of such issue are to be used for capital expenditures 
                incurred for one or more qualified rail infrastructure 
                projects,
                    ``(C) the qualified issuer designates such bond for 
                purposes of this section and the bond is in registered 
                form, and
                    ``(D) in lieu of the requirements of section 
                54A(d)(2), the issue meets the requirements of 
                subsection (g).
            ``(2) Qualified rail infrastructure project.--The term 
        `qualified rail infrastructure project' means a project 
        eligible under subsection (b) of section 26101 of title 49, 
        United States Code (determined without regard to paragraph (2) 
        thereof), based on the criteria of subsection (c) of such 
        section, which the Secretary determines, after consultation 
        with the Secretary of Transportation, makes a substantial 
        contribution to improving a rail transportation corridor for 
        intercity passenger rail use.
    ``(d) Special Use Rules.--For purposes of subsection (b)(1)(B) or 
(c)(1)(B)--
            ``(1) Refinancing rules.--A qualified project may be 
        refinanced with proceeds of a qualified rail bond only if the 
        indebtedness being refinanced (including any obligation 
        directly or indirectly refinanced by such indebtedness) was 
        originally incurred after the date of the enactment of this 
        section.
            ``(2) Reimbursement.--A qualified rail bond may be issued 
        to reimburse for amounts paid after the date of the enactment 
        of this section with respect to a qualified project, but only 
        if--
                    ``(A) prior to the payment of the original 
                expenditure, the issuer declared its intent to 
                reimburse such expenditure with the proceeds of a 
                qualified rail bond,
                    ``(B) not later than 60 days after payment of the 
                original expenditure, the issuer adopts an official 
                intent to reimburse the original expenditure with such 
                proceeds, and
                    ``(C) the reimbursement is made not later than 18 
                months after the date the original expenditure is paid.
            ``(3) Treatment of changes in use.--The proceeds of an 
        issue shall not be treated as used for a qualified project to 
        the extent that an issuer takes any action within its control 
        which causes such proceeds not to be used for such project. The 
        Secretary shall prescribe regulations specifying remedial 
        actions that may be taken (including conditions to taking such 
        remedial actions) to prevent an action described in the 
        preceding sentence from causing a bond to fail to be a 
        qualified rail bond.
    ``(e) Maturity Limitations.--In lieu of section 54A(d)(5), a bond 
shall not be treated as a qualified rail bond if the maturity of such 
bond exceeds--
            ``(1) in the case of a qualified super high-speed intercity 
        rail facility bond, 20 years, and
            ``(2) in the case of a qualified rail infrastructure bond, 
        15 years.
    ``(f) National Limitation on Amount of Bonds Designated.--
            ``(1) In general.--There is a national qualified rail bond 
        limitation of--
                    ``(A) in the case of qualified super high-speed 
                intercity rail facility bonds, $10,000,000,000, and
                    ``(B) in the case of qualified rail infrastructure 
                bonds, $5,400,000,000.
            ``(2) Allocation by secretary.--The national qualified rail 
        bond limitation shall be allocated by the Secretary (in the 
        case of qualified super high-speed intercity rail facility 
        bonds, after consultation with the Secretary of Transportation) 
        among qualified projects in such manner as the Secretary 
        determines appropriate.
    ``(g) Special Rules Relating to Expenditures.--
            ``(1) In general.--An issue shall be treated as meeting the 
        requirements of this subsection if, as of the date of issuance, 
        the issuer reasonably expects--
                    ``(A) 100 percent or more of the available project 
                proceeds of the issue are to be spent for 1 or more 
                qualified projects within the 5-year period beginning 
                on the date of issuance of the qualified rail bond,
                    ``(B) a binding commitment with a third party to 
                spend at least 10 percent of the available project 
                proceeds of the issue will be incurred within the 6-
                month period beginning on the date of issuance of the 
                qualified rail bond, and
                    ``(C) such projects will be completed with due 
                diligence and the proceeds from the sale of the issue 
                will be spent with due diligence.
            ``(2) Extension of period.--Upon submission of a request 
        prior to the expiration of the period described in paragraph 
        (1)(A), the Secretary may extend such period if the issuer 
        establishes that the failure to satisfy the 5-year requirement 
        is due to reasonable cause and the related projects will 
        continue to proceed with due diligence.
            ``(3) Failure to spend required amount of bond proceeds 
        within 5 years.--To the extent that less than 100 percent of 
        the available project proceeds of such issue are expended by 
        the close of the 5-year period beginning on the date of 
        issuance (or if an extension has been obtained under paragraph 
        (2), by the close of the extended period), the issuer shall 
        redeem all of the nonqualified bonds within 90 days after the 
        end of such period. For purposes of this paragraph, the amount 
        of the nonqualified bonds required to be redeemed shall be 
        determined in the same manner as under section 142.
    ``(h) Special Rules Relating to Pooled Financing Bonds.--No portion 
of a pooled financing bond may be allocable to loan unless the borrower 
has entered into a written loan commitment for such portion prior to 
the issue date of such issue.
    ``(i) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Pooled financing bond.--The term `pooled financing 
        bond' shall have the meaning given such term by section 
        149(f)(6).
            ``(2) Qualified project.--The term `qualified project' 
        means a qualified high-speed intercity rail facility project or 
        a qualified rail infrastructure project.
            ``(3) Reporting.--Issuers of qualified super high-speed 
        intercity rail facility bonds shall submit annual reports to 
        the Secretary and the Secretary of Transportation regarding the 
        progress of qualified super high-speed intercity rail facility 
        projects in such manner determined by the Secretary, after 
        consultation with the Secretary of Transportation.
            ``(4) Conditions.--Any project financed with the proceeds 
        of a qualified rail bond shall be subject to the grant 
        requirements under section 24405 of title 49, United States 
        Code.
    ``(j) Termination.--This section shall not apply with respect to--
            ``(1) any qualified super high-speed intercity rail 
        facility bond after December 31, 2014, and
            ``(2) any qualified rail infrastructure bond issued after 
        December 31, 2014.''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 54A(d) of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (C),
                    (B) by adding ``or'' at the end of subparagraph 
                (D),
                    (C) by inserting after subparagraph (D) the 
                following new subparagraph:
                    ``(E) a qualified rail bond,'', and
                    (D) by inserting ``(paragraphs (3), (4), and (6) in 
                the case of a qualified rail bond)'' after ``and (6)''.
            (2) Subparagraph (C) of section 54A(d)(2) of such Code is 
        amended by striking ``and'' at the end of clause (iii), by 
        striking the period at the end of clause (iv) and inserting ``, 
        and'', and by adding at the end the following new clause:
                            ``(v) in the case of a qualified rail bond, 
                        a purpose specified in subsection (b)(1) or 
                        (c)(1) of section 54F.''.
            (3) The table of sections for subpart I of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 54F. Qualified rail bonds.''.
    (c) Issuance of Regulations.--The Secretary of the Treasury shall 
issue regulations required under section 54F of the Internal Revenue 
Code of 1986 (as added by this section) not later than 120 days after 
the date of the enactment of this Act.
    (d) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 7. REPORT ON REVENUE PROVISIONS FOR HIGH-SPEED RAIL.

    (a) Study.--The Secretary of the Treasury shall conduct a study on 
the use of excise taxes to fund projects related to high-speed rail.
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Secretary of the Treasury shall submit to Congress a 
report on the study conducted under subsection (a).
                                 <all>
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