[00:00:02] Speaker 03:
May it please the court to be eligible for tax-exempt financing under section 142M

[00:00:31] Speaker 03:
The surface transportation project must be the project that actually received federal assistance under Title 23.

[00:00:41] Speaker 03:
The passenger railroad, now before this Court, is not the project that received federal assistance under Title 23 and is not eligible for financing with private activity bonds.

[00:00:52] Speaker 03:
It is undisputed that the projects that received federal assistance under Title 23 were projects that were funded under Section 130 of Title 23 to eliminate hazards at the highway railroad crossings of a pre-existing freight railroad.

[00:01:14] Speaker 03:
Even if an inference can be drawn that the passenger railroad will benefit

[00:01:21] Speaker 03:
from these projects.

[00:01:24] Speaker 03:
That doesn't make the passenger railroad the surface transportation project that actually received the federal funding.

[00:01:32] Speaker 03:
Merely benefiting from another surface transportation project that received federal assistance is insufficient under the plain language of the statute.

[00:01:44] Speaker 03:
In drafting section 142M,

[00:01:48] Speaker 03:
Congress could have said any surface transportation project approved by the secretary is eligible for financing with private activity bonds.

[00:01:57] Speaker 03:
But it did not do so.

[00:01:59] Speaker 03:
Congress sought to limit the universe of surface transportation projects eligible to be financed with the bonds to the specific type of projects that were authorized to receive federal assistance

[00:02:12] Speaker 03:
under a provision of Title 23 that was in place as of August 10, 2005, and that actually received federal assistance under such provision.

[00:02:23] Speaker 03:
To be the project that receives federal assistance under a provision of Title 23, the project must be the type of project funded under that provision.

[00:02:35] Speaker 03:
The passenger railroad project is not a project

[00:02:40] Speaker 03:
to reduce hazards at railway-highway crossings and thus cannot rely on Section 130 funding to be a surface transportation project eligible for financing with private activity bonds.

[00:02:54] Speaker 03:
Both DOT and the District Court

[00:02:59] Speaker 03:
relied pretty heavily on a letter which is to be found in the record at 4493 through 95 from the Federal Highway Administration to the Internal Revenue Service dated August, excuse me, October 7, 2005.

[00:03:17] Speaker 03:
That letter states that if a segment of a highway receives federal highway funding, then the entire highway is eligible for financing of private activity bonds.

[00:03:31] Speaker 03:
This is so, the letter argues, because a contrary view would force state grantees to, quote, sprinkle, unquote, Title 23 funds to every segment of the highway.

[00:03:45] Speaker 03:
But here, the Section 130 grant monies cannot be, quote, sprinkled, unquote, to every segment of the Passenger Railroad Project.

[00:03:57] Speaker 03:
Obviously, 98% or more of the Passenger Railroad Project has nothing whatsoever to do with improving the safety of railway-highway crossings.

[00:04:06] Speaker 03:
And therefore, the vast majority of the Passenger Railroad Project is not eligible for funding under Section 130.

[00:04:13] Speaker 03:
The Federal Highway Administration ladder does not address the issue whether a surface transportation project that is different in kind from the type of project that may be funded under the relevant provision of Title 23 may be financed with private activity bonds.

[00:04:33] Speaker 03:
According to DOT, it does not matter whether the project to be financed with the bonds is the type of project authorized to receive federal monies under Title 23.

[00:04:45] Speaker 03:
It does not matter whether the project actually received federal monies under Title 23.

[00:04:50] Speaker 03:
And it doesn't matter even whether the federal grant monies were intended

[00:04:55] Speaker 03:
to benefit the surface transportation project to be financed with the bonds.

[00:05:00] Speaker 03:
According to DOT it is sufficient that the surface transportation project

[00:05:04] Speaker 03:
may enjoy a, quote, benefit, unquote, from some other surface transportation project that has received federal assistance under Title 23.

[00:05:13] Speaker 03:
But in this context, the statutory phrase in Section 142M, quote, project which receives federal assistance, unquote, means, quote, project which receives federal funding, unquote.

[00:05:28] Speaker 03:
DOT's guidance document on 142M, which is published in the Federal Register,

[00:05:34] Speaker 03:
cited in our briefs, directs applicants seeking DOT approval under section 142M to present evidence describing the, quote, Title 23 funding received by the project, unquote.

[00:05:48] Speaker 03:
The document directs the applicant to provide DOT with the, quote, amount of financial resistance, unquote, received, which clearly means the dollar amount of the funding, not an estimate of the benefit received.

[00:06:02] Speaker 03:
There is no logical reason why Congress, if it wanted to tie eligibility for private activity bond financing to Title 23 funding, would have said, well, a passenger railroad in general is not eligible for financing with these types of bonds.

[00:06:21] Speaker 03:
But if it happens to benefit from a pre-existing safety project, well, then it is.

[00:06:26] Speaker 03:
The passenger railroad in both cases is essentially the same project.

[00:06:31] Speaker 03:
Deference is not warranted under Chevron in this case.

[00:06:35] Speaker 03:
There is no indication that Congress delegated to the Secretary of Transportation the authority to, quote, speak with the force of law, unquote.

[00:06:46] Speaker 03:
And under United States versus Meade, therefore, under Chevron step zero, as some commentators have said, this is not the type of legal issue that warrants deference under Chevron.

[00:07:00] Speaker 03:
In addition, there's really nothing in the record where DOT explained why it reached the conclusion that this project was even eligible for financing with private activity bonds.

[00:07:11] Speaker 03:
It did cite the Federal Highway Administration letter, but I've already discussed that.

[00:07:15] Speaker 03:
And that letter does not even address the issue that's now before the court.

[00:07:20] Speaker 03:
The administrative record is devoid of any documents indicating that DOT even considered the issue

[00:07:26] Speaker 03:
of whether a project can be eligible for private activity bonds if it's not the type of project that is eligible to receive assistance under Title 23.

[00:07:37] Speaker 00:
So under your view, if part of a project receives Title 23 funds, is that enough then to qualify the project for private activity bond financing?

[00:07:51] Speaker 03:
No, Your Honor.

[00:07:55] Speaker 03:
Although, let me qualify that by saying it does depend on the type of financing mechanism that's used.

[00:08:03] Speaker 03:
Here, the monies were for a Section 130 project, which is a project to eliminate hazards at a railway highway crossing.

[00:08:16] Speaker 03:
Those funds, even if spent for that type of project, even if it benefits a passenger railroad project, does not make the passenger railroad project eligible for financing with private activity bonds.

[00:08:28] Speaker 03:
I think there would be a different question if what was before the court was the highway segment issue that was discussed in that Federal Highway Administration letter.

[00:08:37] Speaker 03:
There, at least the project

[00:08:41] Speaker 03:
to be financed with the bonds is the type of project eligible for funding.

[00:08:46] Speaker 03:
But that's not even the case here.

[00:08:48] Speaker 03:
Passenger railroads are not eligible for funding under Section 130.

[00:08:53] Speaker 00:
But you could just describe, it depends on how you describe the project.

[00:08:56] Speaker 00:
Because the passenger railroad project, obviously the passenger railroad project involves track that has to cross roads.

[00:09:04] Speaker 00:
if you describe that project as one that encompasses all the improvements that have to be done in order to make the passenger railroad project successful, that project could be described in a way that includes improvements to crossings.

[00:09:18] Speaker 03:
Your Honor, the way the statutory language is drafted, our position is that the

[00:09:28] Speaker 03:
only projects that are eligible to be financed with private activity bonds are the specific types of projects that are described in a provision of section, excuse me, in a provision of Title 23 that was in effect as of 2005.

[00:09:44] Speaker 03:
As applied to this case, the type of project that was funded is a project to eliminate hazards at a railway highway crossing.

[00:09:56] Speaker 03:
The fact that

[00:09:58] Speaker 03:
The passenger railroad may benefit from that project.

[00:10:01] Speaker 03:
It doesn't make the entire passenger railroad a project to eliminate hazards at a railway-highway crossing.

[00:10:07] Speaker 03:
So the statutory language says it must be the project that received federal assistance under Title 23.

[00:10:16] Speaker 03:
And the passenger railroad is not even eligible for funding under Section 130.

[00:10:21] Speaker 03:
So it's not eligible for financing with private activity bonds.

[00:10:26] Speaker 03:
I want to touch briefly on the NEPA claims, starting with the issue of public safety.

[00:10:33] Speaker 03:
I've been litigating environmental cases for 30 years.

[00:10:37] Speaker 03:
And the typical reaction of a defendant when someone says, well, the project could kill someone or harm someone, they say, well, that's very speculative.

[00:10:46] Speaker 03:
We don't have to take a hard look at that.

[00:10:48] Speaker 03:
No one's making that argument here.

[00:10:49] Speaker 03:
No one is saying that this is a speculative harm.

[00:10:52] Speaker 03:
What was in the EIS is there's railroads on the corridor, now we're going to have more railroads on the corridor, so there's greater opportunities for conflict.

[00:11:02] Speaker 03:
That's at page 5-159 of the EIS.

[00:11:06] Speaker 03:
Joint Appendix 2397.

[00:11:08] Speaker 03:
So greater frequency was disclosed.

[00:11:10] Speaker 03:
What was not discussed, and certainly not taken a hard look at, is the dramatically increased speed of the new trains as opposed to the existing freight trains rumbling up and down the corridor.

[00:11:22] Speaker 03:
The existing trains are 28.5 miles per hour.

[00:11:25] Speaker 03:
The new trains will be more than 100 miles per hour, or as we said in our brief, more than 150 feet per second.

[00:11:32] Speaker 03:
The safety risks associated with these much faster trains were not disclosed.

[00:11:38] Speaker 03:
There's no disclosure of an adverse impact.

[00:11:41] Speaker 03:
And there was no hard look at this adverse impact.

[00:11:45] Speaker 03:
And in this regard, I think it's important

[00:11:48] Speaker 03:
to consider the adequacy of the discussion by reference to 40 CFR 1502.15.

[00:11:55] Speaker 03:
That's a provision of the CEQ NEPA regs.

[00:12:00] Speaker 03:
What that provision says is that data and analysis in an EIS, quote, shall be commensurate with the importance of the impact, unquote.

[00:12:11] Speaker 03:
which is a very common sense idea.

[00:12:14] Speaker 03:
If something is not that important, it doesn't deserve extensive discussion.

[00:12:18] Speaker 03:
If something is very important, as is the case here, because we're talking about life and death and fatalities, then the degree of analysis should be commensurate with the importance of that.

[00:12:30] Speaker 03:
And there's simply no hard luck in the EIS.

[00:12:33] Speaker 03:
In fact, there was a disavowal

[00:12:34] Speaker 03:
in the EIS of any need to take a hard look on the ground that the pedestrians crossing between the crossings are trespassers and on the ground that there'll be an analysis done later under the Part 270 regulations after the EIS process.

[00:12:51] Speaker 03:
Both of those rationales are now abandoned essentially by DOJ because they have conceded that the hard look had to be in the EIS, not in the subsequent analysis.

[00:13:02] Speaker 03:
– excuse me – analysis.

[00:13:04] Speaker 03:
But there simply is no hard luck in the EIS itself.

[00:13:09] Speaker 03:
There's no discussion of the much faster trains in this document.

[00:13:15] Speaker 03:
As to noise, I see I'm – in my rebuttal time, we'll rest on our briefs.

[00:13:21] Speaker 03:
Thank you.

[00:13:30] Speaker 01:
May it please the court, my name is Joan Pepin on behalf of the Department of Transportation.

[00:13:34] Speaker 01:
I'll be sharing my time with Mr. Stearns.

[00:13:37] Speaker 01:
The All Aboard Florida Train Line is bringing... Are you dividing topics in any way?

[00:13:41] Speaker 01:
No.

[00:13:44] Speaker 01:
So the All Aboard Florida Train Line is bringing a new environmentally beneficial transportation option to an extremely busy congested travel corridor.

[00:13:52] Speaker 01:
And it's doing it predominantly with private funding.

[00:13:56] Speaker 01:
The principal question that the plaintiffs want to raise here is whether the state-issued bonds that were sold to private investors to finance this project qualify for a tax exemption that Congress created to encourage exactly this type of private investment in public infrastructure.

[00:14:12] Speaker 01:
But there is a threshold question that we have to reach first of whether Congress intended for local governments to oppose transportation projects to have a private right of action to challenge that tax exemption.

[00:14:23] Speaker 01:
And the answer is yes and no.

[00:14:26] Speaker 01:
There are statutes which protect the environmental and noise and safety interests they're raising, such as NEPA and arguably Section 147F of the Intramural Revenue Code, which requires state or local approval of such a bond issue.

[00:14:41] Speaker 01:
And they can bring suit under those statutes.

[00:14:44] Speaker 02:
Is the issue here whether they can bring under the statute or under the APA?

[00:14:48] Speaker 01:
Under what?

[00:14:49] Speaker 02:
The APA.

[00:14:50] Speaker 01:
It would be, they would need a cause of action.

[00:14:53] Speaker 02:
Well, I mean, the APA is a cause of action.

[00:14:55] Speaker 01:
Of course, but you have to be within the zone of interest.

[00:14:58] Speaker 02:
That's a different question than whether there's a private right of action, right?

[00:15:02] Speaker 01:
Okay.

[00:15:02] Speaker 01:
Well, I meant to say whether they have a cause of action, which is how the Supreme Court has renamed what used to be called Prudential Standing.

[00:15:10] Speaker 01:
And they don't have a cause of action under Section 142M.

[00:15:16] Speaker 01:
Section 142M reflects a congressional judgment that certain types of infrastructure projects that private investors are willing to build are worthy of some federal assistance in the form of a tax exemption for the private bonds that are used to issue them.

[00:15:32] Speaker 01:
And, you know, to the extent that a locality disapproves of a project, they get to have their say through a NEPA challenge.

[00:15:39] Speaker 01:
They get to have their say depending on, you know, the state gets to have their say too.

[00:15:44] Speaker 01:
But Section 147 does provide them with an opportunity.

[00:15:47] Speaker 01:
But Section 142 simply does not include the sort of localized noise and safety interests that they're trying to raise.

[00:15:54] Speaker 02:
And how is that distinct from the Potawatomi Indians' case?

[00:15:59] Speaker 01:
Well, in that case, you're talking about the very hard to pronounce?

[00:16:04] Speaker 02:
Potawatomi?

[00:16:05] Speaker 01:
Oh, OK.

[00:16:05] Speaker 01:
Yeah, I'm sorry.

[00:16:06] Speaker 01:
That is the same case.

[00:16:08] Speaker 01:
In that case, the Supreme Court found that there was a regulation.

[00:16:11] Speaker 01:
that specifically required consideration of conflicting land uses.

[00:16:16] Speaker 01:
And that is how a neighbor who argued that he had a disagreement with the land use came to be within the zone of interest.

[00:16:22] Speaker 01:
In this case, however, there is not.

[00:16:25] Speaker 01:
The plaintiffs have pointed to a guidance for applications that says, you know, submit your environmental approvals, but that is not for a substantive environmental evaluation.

[00:16:37] Speaker 01:
of the projects.

[00:16:38] Speaker 01:
This is a financing provision and they want to know is this project shovel ready or are you planning to do something that's going to require so many approvals that you have no chance of getting.

[00:16:48] Speaker 01:
So all they want is evidence that the approvals have been obtained.

[00:16:51] Speaker 01:
It is not for a substantive environmental or safety review of the project because the question under 142M is not

[00:17:01] Speaker 01:
Is this project environmentally benign?

[00:17:03] Speaker 01:
That's a question we can raise.

[00:17:05] Speaker 01:
The question under 142M is, is this an exempt facility?

[00:17:10] Speaker 01:
And the statute lays out the elements of what is an exempt facility.

[00:17:14] Speaker 01:
And that reflects Congress's judgment that certain sorts of infrastructure projects are worthy of taxes.

[00:17:19] Speaker 02:
How do you answer their point that this is not a project that's eligible under 130?

[00:17:25] Speaker 01:
They are reviving an argument that they made low and lost and didn't appeal.

[00:17:31] Speaker 01:
Below they argued that any surface transportation project doesn't mean any surface transportation project, it means a highway.

[00:17:38] Speaker 01:
Because Title 23 is entitled highways and generally funds things that are highway related.

[00:17:45] Speaker 01:
And the district court rejected that argument and they didn't appeal that.

[00:17:48] Speaker 01:
And the district court rightly found that if Congress wanted to say any highway project, any project, you know, it could have used a lot of words other than any surface transportation project, which is extremely broad.

[00:17:59] Speaker 00:
But I thought their argument was not focused on the any surface transportation project part of the text, but it was focused on the next part, which is which receives federal assistance under Title 23.

[00:18:07] Speaker 01:
Well, I think they're doing both.

[00:18:09] Speaker 01:
There's two arguments.

[00:18:10] Speaker 01:
First, they're saying that the project under 142M,

[00:18:14] Speaker 01:
has to not just include, not just have components or portions that are funded under Title 23, but has to be exactly identical and coextensive with the project that received funding.

[00:18:26] Speaker 00:
So can I just take apart what you just said?

[00:18:27] Speaker 00:
So the first part of what you said has to not just include, what's the best indicia from your perspective of the fact, suppose I agree with you that it only has to include and it doesn't have to be coextensive with.

[00:18:41] Speaker 00:
What's the best indicia from your perspective that the project does include?

[00:18:46] Speaker 01:
Oh, well, a rail line includes railroad crossings.

[00:18:51] Speaker 01:
And one of the other issues we'll be arguing about if we get to the NEPA issues is the safety of these crossings.

[00:18:57] Speaker 01:
There's 350-some-odd railway crossings on this line.

[00:19:03] Speaker 01:
And the state of Florida invested $9 million in upgrading 72 of them.

[00:19:07] Speaker 01:
That is a very substantial, with title $23.

[00:19:11] Speaker 01:
So that is some very substantial Title 23 assistance to this project.

[00:19:15] Speaker 00:
But when you say it's very substantial assistance to this project, that's the part that just seems to be.

[00:19:22] Speaker 01:
Because the grade crossings are a necessary part of this project.

[00:19:26] Speaker 01:
Now, I'm not saying that 142M would only apply where it is a necessary part.

[00:19:33] Speaker 01:
It could be that they were just related and mutually beneficial.

[00:19:36] Speaker 01:
But in this case, you have that extra layer of relationship.

[00:19:39] Speaker 01:
where you can't have a rail line without crossings.

[00:19:42] Speaker 01:
And you have to have the crossings needed to be upgraded.

[00:19:46] Speaker 01:
And that's an essential part of this project.

[00:19:48] Speaker 01:
Everybody agrees with that.

[00:19:50] Speaker 01:
And $9 million

[00:19:52] Speaker 01:
if Title 23 funds were invested in improving 72 of these.

[00:19:56] Speaker 00:
So where would I look in the record for the, what you say, I'm not saying it doesn't have intuitive force, but where would we look in the materials to show that the grade crossings are, improvements to the grade crossings that are done with Title 23 funds, at least in part, or an essential part of the passenger robot?

[00:20:15] Speaker 01:
I would look at

[00:20:17] Speaker 01:
the FRA, Federal Railway Administration, Safety Engineering Reports.

[00:20:21] Speaker 01:
And those are at 2604 to 2619.

[00:20:26] Speaker 01:
And what they did is they did a survey.

[00:20:29] Speaker 01:
This is the safety office of the Federal Railroad Administration.

[00:20:31] Speaker 01:
And they included the local government representatives.

[00:20:34] Speaker 01:
And they surveyed every grade crossing on the entire line.

[00:20:38] Speaker 01:
some 360 of them.

[00:20:40] Speaker 01:
And they required updating to the latest technology, which is, by the way, at the sealed corridor approach, it's called.

[00:20:48] Speaker 01:
And it's only actually applicable to high-speed rail lines.

[00:20:51] Speaker 01:
And this one doesn't quite qualify.

[00:20:52] Speaker 01:
So they went above and beyond in requiring an additional layer of safety here.

[00:20:57] Speaker 01:
Very impressive technological stuff that, you know, through technology can detect the presence of a train on the tracks and signal back to an approaching train.

[00:21:07] Speaker 01:
can control the traffic lights to make sure traffic can flow off the tracks.

[00:21:11] Speaker 01:
And then it includes some bricks and mortar stuff.

[00:21:14] Speaker 01:
People will drive around these gates, believe it or not, when the train is approaching.

[00:21:19] Speaker 01:
And so what it does is it puts gates on both sides of the road so you can't drive around them.

[00:21:23] Speaker 01:
That's called four quadrant grates.

[00:21:25] Speaker 01:
Or they have these long concrete medians that go back 100 feet to, again, prevent people from driving around the gates.

[00:21:36] Speaker 01:
Can my time really be that short?

[00:21:40] Speaker 01:
The other thing they're doing.

[00:21:41] Speaker 02:
The next time you should think about whether it's really worthwhile splitting your time, especially if you're not dividing into different topics.

[00:21:50] Speaker 01:
OK, well, I know that AAF has some things to say, and I don't want to use all their time.

[00:21:55] Speaker 01:
Perhaps I should ask them if you have any specific questions for me.

[00:21:57] Speaker 01:
Are there any questions?

[00:22:02] Speaker 01:
All right.

[00:22:02] Speaker 04:
Thank you.

[00:22:07] Speaker 04:
May it please the Court, Gene Sterns for Baltimore, Florida.

[00:22:10] Speaker 02:
Since we didn't get to the NEPA issue, I think it will be your responsibility to answer the questions regarding NEPA.

[00:22:17] Speaker 04:
Yes, and when we look at the NEPA issues, we have to understand the record that exists here is unusual from the standpoint of the NEPA analysis.

[00:22:26] Speaker 04:
In developing this FEIS, obviously you went through a comment period that was extensive.

[00:22:32] Speaker 04:
Once the final environmental impact statement was prepared, the agency went through a second comment period, which is quite unusual in this process, and responded in the final record of decision with responses to all of those comments.

[00:22:46] Speaker 02:
The other side has narrowed its focus, perhaps not all of its complaints.

[00:22:53] Speaker 02:
to a claim that the speed of the train was not recognized with respect to its safety consequences.

[00:23:00] Speaker 04:
It's just categorically untrue.

[00:23:03] Speaker 04:
It's just not true.

[00:23:04] Speaker 04:
In fact, this relates back to the issue of the private activity bond funding, because the appellant here makes two mutually exclusive arguments.

[00:23:14] Speaker 04:
argues that the project does not include grade crossings, and then argues that the safety analysis, which spent two years on 356 grade crossings, which is critical to be able to operate a rail system that operates at these speeds.

[00:23:29] Speaker 04:
And if I may, Your Honor, in looking at this in context,

[00:23:32] Speaker 04:
I've always thought that if Eisenhower had come back after World War II liking trains instead of the Autobahn, America would have been a different place, because trains are a more efficient way to move people and goods.

[00:23:44] Speaker 04:
And in this case, this right of way has existed since 1894.

[00:23:48] Speaker 02:
Can you say where in the EIS the discussion of the speed vis-a-vis safety was?

[00:23:54] Speaker 04:
It's discussed in every intersection where speeds are addressed and the nature of the improvements that have to be made.

[00:24:00] Speaker 04:
literally throughout the entire... Can you make a citation to the record?

[00:24:05] Speaker 04:
My fingertips, I cannot, Your Honor.

[00:24:07] Speaker 02:
Okay, and after the argument, can you send us a letter referring to the places in the record where the relationship between speed and safety was discussed?

[00:24:16] Speaker 02:
They argue that it's not there.

[00:24:18] Speaker 02:
You argue that it's everywhere.

[00:24:21] Speaker 02:
There's only one way to resolve this question.

[00:24:23] Speaker 02:
You're correct.

[00:24:23] Speaker 02:
Point us to where it is.

[00:24:24] Speaker 04:
If we're permitted, we'll file something else today that's showing all the points in the record.

[00:24:29] Speaker 02:
Please do it by the end of today.

[00:24:30] Speaker 02:
Please do it by the end of today, if you can.

[00:24:33] Speaker 04:
By the end of the day, it will be done.

[00:24:34] Speaker 04:
Thank you.

[00:24:35] Speaker 04:
Your Honor, in looking at the issues of safety, they're basically making two arguments.

[00:24:39] Speaker 04:
One is pedestrian safety, and the other is noise on the environmental impact statement.

[00:24:44] Speaker 04:
On pedestrian safety, they have in fact misstated the record.

[00:24:48] Speaker 04:
Pedestrian safety falls into two categories.

[00:24:50] Speaker 04:
One is the intersection of grade crossings and the rail system, which was extensively analyzed by the agency, the Federal Railroad Agency,

[00:24:59] Speaker 04:
And in fact, all of those grade crossings were determined to have to be improved dramatically at every single grade crossing to a higher standard than would otherwise be necessary.

[00:25:09] Speaker 02:
Can I just interrupt for one second?

[00:25:10] Speaker 02:
These 72 or so grade crossings that were provided with respect to the Title 23 money?

[00:25:19] Speaker 02:
Yes, Your Honor.

[00:25:20] Speaker 02:
Was that part of this, are those the crossings you're talking about or were those were all done before?

[00:25:27] Speaker 04:
Those were done in connection with the planning for this process.

[00:25:31] Speaker 04:
That is to say, you have a company that had two subsidiaries.

[00:25:35] Speaker 04:
One was a freight subsidiary, one was a passenger subsidiary.

[00:25:39] Speaker 04:
They enter into a written agreement, which is called a joint use agreement, where the passenger facility is undertaking the complete improvement

[00:25:47] Speaker 04:
to current highest standards of a rail system in the United States of America in order to restore passenger service on this right-of-way.

[00:25:56] Speaker 02:
So just to be clear then, the Title 23 funds were used as part of what you just described as a predecessor to the development of the train.

[00:26:08] Speaker 02:
Absolutely.

[00:26:08] Speaker 02:
Right now, sorry again.

[00:26:10] Speaker 04:
No problem.

[00:26:11] Speaker 02:
Could you include the citations in the record?

[00:26:14] Speaker 02:
that established that point?

[00:26:15] Speaker 04:
Well, that I can tell you.

[00:26:18] Speaker 04:
You're going to find it at JA4536, which is the application which identifies – and in connection with that, it's actually attached to the government's brief – is the listing of all 72 of the intersections that where the Title 23 money was invested.

[00:26:33] Speaker 04:
But I keep in mind, Your Honor, respectfully, is that

[00:26:36] Speaker 04:
But when you have an F-grade system – this is not D.C.

[00:26:39] Speaker 04:
We have a water table that's very low, a very high relative to land level – you can't do separated grades like I drive around D.C.

[00:26:48] Speaker 02:
I understand.

[00:26:49] Speaker 02:
This is a much more simple question.

[00:26:52] Speaker 02:
All I'm asking is for record citations that indicate that the 47

[00:26:58] Speaker 02:
I'm sorry, the 72 were in contemplation of the rail project that we now have in front of us.

[00:27:06] Speaker 04:
What you have is the application, which I gave you the citation to the application.

[00:27:11] Speaker 04:
Right.

[00:27:11] Speaker 04:
You have the identification, which is an amendment to the application, which is attached to the government's brief.

[00:27:18] Speaker 04:
And you have the Federal Railway Administration that reviewed the application and determined, in fact, the non-grade separations where you had at-grade intersections were part of the overall project, which is a multibillion-dollar project of which this grade – of grade crossings is an important element.

[00:27:38] Speaker 04:
Safety at grades is an important element, but it's not the entire project.

[00:27:42] Speaker 04:
And so what you have is that Congress authorized private activity bonds to incentivize private investment.

[00:27:51] Speaker 04:
And I point out, Your Honor, that this is the first privately invested rail system in the United States of America in over 100 years.

[00:27:59] Speaker 04:
And it's because a relatively small investment of US taxpayer dollars, not invested directly but deferred, will allow the investment of billions of dollars to establish a rail corridor

[00:28:10] Speaker 04:
connecting four of the most populous communities in the state of Florida.

[00:28:14] Speaker 04:
Thirty-six percent of the population of the state of Florida will now be connected by rail, from Miami to Fort Lauderdale to Palm Beach to Orlando, and the plan, of course, is to move to Tampa.

[00:28:25] Speaker 04:
And the importance of this project from an environmental standpoint is taking, you know, in excess of a million people off roads.

[00:28:35] Speaker 02:
Can I ask you one more question?

[00:28:37] Speaker 02:
I'm sorry.

[00:28:37] Speaker 02:
I'm sorry to be beating you.

[00:28:38] Speaker 02:
Ted Horse, I want to be sure I'm right about this.

[00:28:40] Speaker 02:
The government's supplemental addendum 14, this list of the projects from 2005 to 2014, did you say this was also an addendum to the application?

[00:28:50] Speaker 04:
It was part of the application, Your Honor.

[00:28:52] Speaker 04:
And what you're left with is that the project is not just a track, it's not just a station, it's not just – it is every element of the project, including grade crossings.

[00:29:06] Speaker 04:
And therefore, what the statute permits is private activity bonds, which – where the project is supported by Title 23 funding.

[00:29:16] Speaker 02:
So – Further questions from the bench?

[00:29:18] Speaker 02:
Thank you.

[00:29:19] Speaker 04:
Thank you, Your Honor.

[00:29:20] Speaker 02:
We'll hear again from Tisha.

[00:29:24] Speaker 03:
Thank you, Your Honor.

[00:29:26] Speaker 03:
Well, you just heard two essentially inconsistent approaches from DOJ counsel and from private counsel.

[00:29:35] Speaker 03:
DOJ counsel said that the evidence tying the Section 130 projects to the passenger railroad project

[00:29:44] Speaker 03:
were the FRA safety engineering reports.

[00:29:48] Speaker 03:
The FRA safety engineering reports are appendices to the FEIS.

[00:29:51] Speaker 03:
They can be found at 2604.

[00:29:54] Speaker 03:
That's the first one.

[00:29:56] Speaker 03:
And the second one begins at 26.

[00:29:59] Speaker 03:
I'm sorry.

[00:30:02] Speaker 03:
The first one is that they're around JDA 2604.

[00:30:06] Speaker 03:
They're appendices to the FEIS.

[00:30:09] Speaker 03:
These engineering reports were done in 2014.

[00:30:13] Speaker 03:
There is absolutely nothing in the record to indicate that any of the safety recommendations in these FRA engineering reports have anything whatsoever to do with the safety projects that were funded by DOT from 2009 to 2014.

[00:30:34] Speaker 03:
There's nothing whatsoever in the record to support the nexus between the FRA safety evaluation and the safety projects.

[00:30:43] Speaker 03:
As to the... Can you tell me, do you have standing?

[00:30:48] Speaker 03:
Yes, Your Honor.

[00:30:48] Speaker 05:
And how do you locate it?

[00:30:51] Speaker 03:
We are bringing this action under the Administrative Procedure Act.

[00:30:55] Speaker 03:
Okay, that doesn't answer the standing question.

[00:30:58] Speaker 03:
In terms of Article 3 standing?

[00:31:00] Speaker 03:
Yeah.

[00:31:00] Speaker 03:
Yes.

[00:31:01] Speaker 03:
We litigated Article 3 standing quite extensively in the Disha Court in the earlier litigation.

[00:31:08] Speaker 03:
Judge Cooper held we did have Article 3 standing, and that was not challenged in this case.

[00:31:12] Speaker 03:
It doesn't matter.

[00:31:13] Speaker 03:
Okay.

[00:31:13] Speaker 03:
Well, we've alleged and proven through affidavits many harms to Indian River County, and we've also— Many harms of what?

[00:31:26] Speaker 03:
The harms that we are relying on include accidents that are going to require the Emergency Services District to respond.

[00:31:43] Speaker 03:
There's delays to county vehicles.

[00:31:48] Speaker 03:
that from the progress of the trains and the closure of roads that will be closed while the trains travel through the county, we've also provided affidavits as to- And what is the remedy that you seek, forgetting the EIS part of it, what is the remedy that you seek that addresses those alleged injuries?

[00:32:12] Speaker 05:
Well, the remedy we seek... Where are you pulling it from?

[00:32:15] Speaker 05:
Are you pulling it from 130 or M?

[00:32:19] Speaker 03:
The remedy we seek, Your Honor, is vacateur of the approval of the bonds.

[00:32:24] Speaker 03:
And what we demonstrated in the district court is that if the bonds cannot be floated or cannot be used to finance this project, then the project will not be able to go forward.

[00:32:34] Speaker 03:
And then that would redress the injuries that we've alleged and proven from the project.

[00:32:43] Speaker 05:
it would redress them.

[00:32:45] Speaker 03:
Right.

[00:32:45] Speaker 03:
So we have injury in fact.

[00:32:46] Speaker 05:
We have causation between the government approval over challenging and- I mean, are you saying that there's no possibility of a bond issue, the PABs issue?

[00:32:57] Speaker 05:
You're saying you can nullify, allegedly nullify, the PABs that were, and let's assume that happens, then what?

[00:33:05] Speaker 05:
Can they never issue?

[00:33:07] Speaker 05:
And if they cannot, why not?

[00:33:11] Speaker 05:
What is your theory?

[00:33:13] Speaker 05:
Are you seeking redress to simply kill us?

[00:33:18] Speaker 05:
There should be no possibility of this ever happening, or are you saying it can happen, but it has to happen in a different way, and here's what would be required?

[00:33:26] Speaker 05:
I'm not – I just don't really understand what you're arguing.

[00:33:29] Speaker 03:
I think the answer to Your Honor's question is a little different under Section 142 and under the EIS.

[00:33:37] Speaker 03:
Under NIVA, our complaint is they didn't take a hard look – Forget the NIVA.

[00:33:41] Speaker 03:
Forget the NIVA.

[00:33:42] Speaker 03:
Okay.

[00:33:42] Speaker 03:
I understand.

[00:33:43] Speaker 03:
On Section 142, what we're saying is that this project

[00:33:46] Speaker 03:
is not a surface transportation project which has received funding under Title 23, and therefore it's not eligible to be financed with private activity bonds.

[00:33:56] Speaker 03:
And if this Court agrees, it would nullify DOT's contrary determination.

[00:34:01] Speaker 03:
The effect of that, as I understand it from the bond offering document that we cited in our reply memo, reply brief, is that

[00:34:08] Speaker 03:
there would be an extraordinary mandatory redemption of the bonds that have been issued, and the money essentially would be refunded to the investors.

[00:34:18] Speaker 05:
You never challenged the 130 issuance.

[00:34:21] Speaker 05:
You have an argument to be made that the county has an opportunity to object, right?

[00:34:28] Speaker 05:
That's not an issue here.

[00:34:30] Speaker 03:
No, we have been consistently challenging the eligibility of this project for private activity bond financing.

[00:34:37] Speaker 05:
I understand, but that's under M.

[00:34:43] Speaker 05:
142M and 130 are connected.

[00:34:47] Speaker 05:
You don't have a 142M unless you have a 130, right?

[00:34:52] Speaker 05:
And you have some rights under Warden 30, as I understand it.

[00:34:56] Speaker 05:
But you have not tried to preserve it, preserve them as I understand.

[00:35:01] Speaker 03:
We have consistently argued throughout every phase of this litigation that there's nothing whatsoever in the record that the projects that were funded from 2019 and 2014 have anything whatsoever to do with this project.

[00:35:15] Speaker 03:
That's been a consistent position we've taken throughout.

[00:35:18] Speaker 03:
This issue is certainly preserved for this appeal.

[00:35:22] Speaker 05:
Because you're essentially saying the assistance has to be coterminous.

[00:35:27] Speaker 05:
with respect to 130 and the 142, right?

[00:35:32] Speaker 03:
What we're saying is that the only type of project eligible for private activity bond financing are the types of projects that are described in one of the sections of Title 23 that was in effect as of 2005.

[00:35:48] Speaker 03:
The only section relied upon in this case is Section 130.

[00:35:54] Speaker 03:
which provides for a mechanism by which DOT can pay to improve safety at railway hardware crossings.

[00:36:02] Speaker 03:
So those projects and only those projects could potentially be eligible for financing with private activity bonds.

[00:36:11] Speaker 03:
The passenger railroad project is not... Your assumption is correct.

[00:36:16] Speaker 05:
That is, that the project has to be coterminous with the work that's being directly funded on the 130.

[00:36:25] Speaker 03:
Well, at least it has to be the same type of project.

[00:36:27] Speaker 03:
You can't take a project that has nothing to do with railway hardware crossings and say, well, because we enjoy a benefit from that type of project, then

[00:36:38] Speaker 03:
Our passenger railroad project should be able to be financed with private activity bonds.

[00:36:43] Speaker 03:
Merely enjoying a benefit from a surface transportation project which receives federal funds doesn't make the other surface transportation project

[00:36:54] Speaker 03:
that enjoys that benefit, the recipient of those funds.

[00:36:58] Speaker 05:
So your argument is there can be no BABs.

[00:37:01] Speaker 05:
It doesn't matter about the EIS or anything else.

[00:37:03] Speaker 05:
There can, in these circumstances, you're saying, there can be no private bonds.

[00:37:08] Speaker 05:
Well, certainly on the record before the court, the third, the campaign... Well, no, you tell me your position, because I'm trying to understand injury redress, what you are, and you say it cannot happen.

[00:37:18] Speaker 05:
These circumstances cannot produce

[00:37:21] Speaker 05:
the private activity bonds of the sort that are given, they can't happen.

[00:37:26] Speaker 05:
As a matter of law, they cannot happen, is your argument.

[00:37:28] Speaker 03:
Absolutely.

[00:37:29] Speaker 02:
So the bottom line is just yes, right?

[00:37:33] Speaker 02:
Your argument is if you win, there will be no federal guarantee here or whatever else is required, and the project will crash.

[00:37:43] Speaker 02:
And therefore, there will not be high-speed trains in that area, right?

[00:37:48] Speaker 02:
And therefore, you won't be injured.

[00:37:49] Speaker 02:
That's your claim on this.

[00:37:51] Speaker 02:
And if you lose this, then you have a separate claim on the EIS, and that's a different kind of standard.

[00:37:57] Speaker 02:
Yes.

[00:37:59] Speaker 02:
OK.

[00:38:00] Speaker 02:
OK.

[00:38:00] Speaker 02:
No questions.

[00:38:01] Speaker 02:
Thank you.

[00:38:02] Speaker 02:
We'll take a matter under submission.

[00:38:03] Speaker 02:
Thank you.