Kerry Teams with Lautenberg on Rail Funding Improvements

Press Release

Kerry Teams with Lautenberg on Rail Funding Improvements

Sen. John Kerry announced the passage of the "Passenger Rail Investment and Improvement Financing Act", a bipartisan amendment that he offered during the Finance Committee consideration of the "American Infrastructure Investment and Improvement Act." This amendment will provide federal tax credit bonds to make it easier for states to finance intercity passenger rail capital projects. The measure is designed to help states raise the necessary capital to improve their rail corridors. Increased rail travel has a number of benefits, including big savings for states, as they provide a greener, more efficient way to travel. This week, the Texas Transportation Institute released its annual study, showing that highway congestion costs our economy $78 billion annually, and 2.9 billion gallons of wasted fuel. The amendment was based on a proposal supported by Sens. Trent Lott (R-Miss.), Frank Lautenberg of (D - N.J.) and Arlen Specter (R-Pa.)

"This amendment gives states access to much-needed funding to strengthen their railway infrastructure," Kerry said. "Numerous studies have shown that investing in mass transportation eases congestion, saves gas, is better for the environment and improves productivity. With demand for airline travel exceeding capacity, and Amtrak ridership reaching record levels, this is a perfect time to invest in our rail system and provide riders with faster, safer service."

"This funding brings us a step closer to a world-class rail system, giving travelers a real option to get out of their cars and the long lines at airports," Senator Frank R. Lautenberg said. "States across the country are ready to expand rail into their cities and this measure provides the funding to make that happen."

Specifically, the Kerry amendment will create federal tax credit qualified infrastructure bonds and provide authority to the states to issue such bonds for the purpose of financing passenger rail capital projects. Bonds could be issued by a state or a group of states, and bondholders would be entitled to an annual credit towards their federal tax liability in lieu of interest payments from the bond issuer. The term of the bonds would not exceed 15 years and the bond issuer is solely responsible for full repayment of the principle associated with any bonds issued. States would be authorized to issue up to $900 million of qualified rail infrastructure bonds, per year, during calendar FY 2008-2010. Bond proceeds must be used for intercity rail capital and equipment acquisition projects contained within a state rail plan.

The amendment was included in the American Infrastructure Investment and Improvement Act which was approved by the Senate Finance Committee and is endorsed by the National Association of Railroad Passengers.

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