Examining Tax-Exempt Private Activity Bonds for All Aboard Florida’s Brightline Passenger Rail System
Posted on April 19, 2018
By: Subcommittee on Government Operations, Oversight & Government Reform
- To examine the use of $600 million and $1.15 billion in tax-exempt private activity bonds to support the Brightline passenger rail system project in Florida, and the broader implications of this type of financing for future infrastructure projects.
- Brightline is a Florida-based passenger rail system privately owned and operated by All Aboard Florida (AAF).
- In 2005, Congress created a $15 billion pool of private activity bonds (PABs) for infrastructure projects. If the project qualifies as an exempt facility, the Department of Transportation (DOT) can exempt the PABs from federal income taxes.
- In 2017, Brightline obtained $600 million in tax-exempt PABs from DOT to complete Phase I of the project and $1.15 billion in tax-exempt PABs to complete Phase II.
- Brightline has faced criticism for six fatalities since Phase I trial runs began last year. There are also concerns about the number of highway-rail grade crossings along the Brightline route….