WASHINGTON -- The Senate yesterday kept alive legislation that would fully exempt issuers of tax-exempt high-speed rail bonds from the private-activity bond volume cap.
The measure was offered by Sen. Steven D. Syms, R-Idaho, as an amendment to comprehensive energy legislation that the Senate began debating yesterday.
Senate leaders tried to kill the amendment by moving to table it on the grounds that it did not directly relate to energy issues in the bill. However, the Senate refused to table the proposal on a 55-to-40 vote, and the measure was set aside while opponents discussed a new strategy to prevent the proposal from being attached to the energy bill.
Sen. Syms's amendment would expand a 1988 law that permits tax-exempt financing for high-speed rail projects and exempts 75% of a high-speed rail issue from the volume cap.
Issuers found that such issues are so large that even getting an allocation for one-quarter of an issue could dry up the volume cap in a small state or significantly dent the cap of a large state. Sen. Syms's amendment would completely do away with the requirement that 25% of a high-speed rail issue is subject to the volume cap.
Sen. Syms has raised the issue of high-speed rail bonds several times this year.
Sen. Syms's own state of Idaho has no plans for a high-speed rail system. He explained his interest by saying that Morrison-Knudsen Corp., a firm in Idaho, has won the contract to build a $7 billion high-speed rail system in Texas. Sen. Syms said $5.1 billion of the cost would be borne by private financing, coupled with issuance of $1.9 billion in tax-exempt bonds.
