Stites & Harbison, PLLC

Sponsors of two bills introduced in November seek to reduce the federal deficit through the return or rescission of infrastructure funds awarded under the American Recovery and Reinvestment Act.  High-speed rail projects are specifically targeted in one bill and would be heavily impacted by the other. 

California Representative Jerry Lewis introduced the American Recovery and Reinvestment Rescission Act, H.R. 6403, on November 15. This bill, with nearly 30 co-sponsors, would rescind roughly $12 billion in unspent stimulus dollars.  $6 billion of those unobligated funds are designated for high-speed rail projects. Of the states relying on these funds, California has the largest project at stake: it stands to lose $2 billion set aside for construction of a new line.   If passed, the legislation would also eliminate funds for non-rail transportation and renewable energy projects.  
 
Wisconsin Representatives Jim Sensenbrenner, Paul Ryan, and Tom Petri introduced H.R. 6408 on November 16.  This bill would permit states to return unobligated federal funds for high-speed and intercity rail projects to the Treasury’s general fund.  While the bill contemplates deficit reduction, governors are jockeying for a reallocation of any returned funds; New York Governor-elect Andrew Cuomo and California Governor Arnold Schwarzenegger have already petitioned the Obama administration on behalf of high-speed rail projects in their states.

The introduction of H.R. 6408 follows Wisconsin Governor-elect Scott Walker’s vow to halt an $810 million federally funded rail project between Madison and Milwaukee due to deficit woes. Ohio Governor-elect John Kasich also promised to block a $400 million federally funded project linking Cincinnati, Cleveland, and Columbus. In light of the incoming governors’ repeated opposition to these projects, the Obama administration last week withdrew $1.2 billion in federal funds slated for the planned lines in Wisconsin and Ohio.  The administration will redirect those funds to 13 other states for high-speed rail projects.  
 

Lauran M. Sturm is an Associate in the firm's Louisville office where she is a member of the
Environmental, Natural Resources and Energy Service Group as an associate member of the Construction, Real Estate and Torts & Insurance Practice Service Groups.  She is a LEED Accredited Professional.