Does All Aboard Florida Even Quality For Private Activity Bonds?

Title 23

On June 22, 2015 Attorney Amandeeps Sidhu, representing Martin County et. al. filed a Supplemental Motion to Federal Judge Christopher R. Cooper for Expedited Jurisdictional Discovery in their lawsuit against the U. S. Department of Transportation’s approval of the Florida Development Finance Corporations’ issuance of Private Activity Bonds for the All Aboard Florida (AAF) project.

In their motion, they seek Expedited Jurisdictional Discovery to determine if AAF even qualifies for Private Activity Bonds based on Title 23 of the United States Internal Revenue Service (IRS) Code.

Title 23 falls under the Transportation Infrastructure Finance and Infrastructure Act (TIFIA), authorized in 1998, under the U.S. Department of Transportation (DOT), which allows for credit assistance for qualified projects of national significance.

Qualified highway or surface freight transfer facilities of national significance include “FIFIA-assisted transportation, intercity bus or rail facilities and vehicles, including vehicles and facilities owned by Amtrak, public freight facilities or private facilities providing public benefit for highway users, and intermodal freight trains or facilities.”

If qualified projects have “previously” received credit assistance under this program, they qualify for Private Activity Bonds.

As such, if All Aboard Florida had received Title 23 funding, it would quality for Private Activity Bonds.

But according to Attorney Stephen M. Ryan, representing Martin County at a May 29, 2015 Judicial Hearing before Federal Judge Christopher R. Cooper, “they (AAF) spent Title 23 funds to improve railway – highway grade crossings along the ‘project corridor.’ That is not the AAF project. And in fact, in 2009, when the project was authorized, there was no AAF project to give the money to.”

In their Motion to determine if AAF qualifies for Private Activity Bonds, Martin County et. al. requested “all documents related to the expenditure of Title 23 funds for construction and development of the AAF project between January 1, 2009 and present.”

Additionally, the Motion requests for production of “any and all documents related to the expenditure of Title 23 funds for rail safety, crossing and capacity and signal improvements on the FEC Corridor between January 1, 2009 and the present.”

Further, “To the extent that DOT denies any of the Requests for Admission identified below (Nos. 1-33), in whole or in part, produce any and all documents supporting the denials.”

The 33 Requests for Admission identify 33 projects where the expenditure of $ 15,773,119, from 2009 to present was for the Florida East Coast Railway (FEC) and NOT the AAF project.

The issue is whether or not AAF received Title 23 funding. If not, it would not quality for Private Activity Bonds.

Once again, in an email from IRC Attorney Dylan Reingold on July 7, 2015, he wrote that after the parties had a status conference call with Honorable Judge Cooper yesterday afternoon, this morning the court issued an order granting Martin County their request to obtain expedited discovery to determine if All Aboard Florida is even entitled to private activity bonds.

Another turn for the worm.

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