The Department of Transportation exceeded its authority in allocating PAB’s for the AAF Project


ON APRIL 27 PLAINTIFF’S MARTIN COUNTY, FLORIDA, Thomas Hewitt and V. Michael Fernandi filed a “Complaint for Injunctive and Declaratory Relief” against Defendants the US Department of Transportation (DOT), Anthony R. Foxx, Secretary of Transportation and Peter M. Rogoff, Under Secretary of Transportation, to declare that DOT’s decision to authorize the issuance of Private Activity Bonds (PAB) to the All Aboard Project is “improper, unjustified and unlawful because the IRS Statute on which DOT purports to rely on does not authorize the use of PAB for this type of project.”

The Statute of the IRS Code is 142, in which it states that “high speed intercity rail facilities (not including rolling stock) for the fixed guideway rail transportation of passengers and their baggage between metropolitan statistical areas (within the meaning of section 143 (k) (2) (B) using vehicles that are reasonably expected to be capable of attaining a maximum speed in excess of 150 miles per hour between scheduled stops, but only if such facility will be made available to members of the general public as passengers.”

In the American Recovery and Reinvestment Act of 2009, the wording of Section 142 was amended from being “capable of attaining” a maximum speed of 150 miles per hour to “operating” at a speed of 150 miles per hour.

As such, the All Aboard Florida passenger rail project does not qualify as a high-speed rail project since it will not operate at a speed of 150 miles per hour. In fact, if we are not mistaken, the existing tracks will not permit it to operate at speeds exceeding 115 miles per hour, unless the tracks were re-worked and welded together.

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