ORLANDO, Fla. -- Members of Florida's Congressional delegation are at odds over whether federal bonds should be allowed to finance a private company's high-speed rail expansion to Orlando.
- Florida lawmakers debate federal bonds for Brightline
- Brightline is Florida-based, private high-speed rail service
- Company eventually will expand to Brevard and Orlando
- RELATED: After deaths, warning signs to be posted at Brightline crossings
- READ DOCUMENTS:
All Aboard Florida, which privately operates Brightline, was awarded $1.15 billion in private activity bonds last year by the Department of Transportation to expand its high-speed rail service to Orlando. Brightline currently runs between West Palm Beach and Miami.
Brightline plans to expand service in the coming years by building tracks from West Palm Beach to the new terminal at Orlando International Airport. The rail would run up Florida's east coast, then turn west in Cocoa.
The bond approval allows Brightline to sell tax-exempt bonds on an open market to seek private financing.
In a letter to Transportation Secretary Elaine Chao, five Republican lawmakers argue that Brightline does not qualify for such approval.
At issue is what defines a "surface level highway," a term that has broad enough interpretation at the Department of Transportation that the agency approved Brightline's bond request.
The bond was the focus of an April 19 Congressional subcommittee meeting, referenced in a letter to Chao.
"DOT's theory, as you likely know, is that AAF -- which everyone agrees does not qualify for PABs (private activity bonds) under the 'high-speed intercity rail facilities' eligibility category -- is instead eligible under the 'qualified highway or surface transfer facilities' PAB category. That category includes 'any surface transportation project which receives Federal assistance under title 23," the letter read.
"We had a hearing, and it's not a question of being for or against, but questions are about how these private activity bonds are being utilized, how law reads on this stuff, and the testimony provided by Brightline just was not good testimony," Rep. Ron DeSantis of Jacksonville said.
Rep. Darren Soto (D-Orlando) is among nine lawmakers who wrote a letter to Chao in support of Brightline.
"We have a big state, and we are falling behind in connectivity," Soto said. "Imagine the increase with this kind of mobility."
Soto said Brightline will reach a goal of connecting growing metro areas using a low-risk, high-reward financial approach.
"We are concerned that financing programs created by Congress with the express goal of encouraging private investment in projects that serve a public purpose are under attack by certain interests attempting to undermine this project," the letter signed by nine Republican and Democratic lawmakers said. "As a surface transportation system, Brightline clearly serves a public need and its value is already being demonstrated by its successful limited service in South Florida."
In a letter to Rep. Mark Meadows of North Carolina, All Aboard Florida countered criticism, saying it meets all federal requirements.
Brightline says it also assumes all financial risk with bond approval.
"The federal government does not guarantee the bonds, subsidize the interest rate on the bonds, or assume any liability for the Project," Brightline wrote to Meadows. "Private investors assume 100 percent of risk and, while the investors receive a tax-credit, federal, state and local governments receive millions of dollars in new tax revenue which result from the investment."
Brightline estimates its high-speed rail service will generate about $650 million in tax revenue for federal, state and local governments after it's fully operational.
The private high-speed rail service is also facing challenges in court. Martin and Indian River counties have filed suit against All Aboard Florida in federal court, citing public and environmental safety concerns. It also has faced criticism about rail crossings after several pedestrian deaths in a short amount of time along its South Florida tracks earlier this year.