California’s Debt Limit Allocation Committee last week approved issuing $600 million in tax-exempt bonds towards the Virgin Trains USA project to link Southern California and Las Vegas with high speed rail 180 miles long.
Federal law allows Virgin to sell up to four times the amount of the $600 million in bonds in tax-free, private equity bonds, for $2.4 billion. Federal law limits how much tax-exempt debt a state can issue in a calendar year for private projects that have a qualified public benefit. The committee operates under California Treasurer Fiona Ma.
In March, the U.S. Department of Transportation approved $1 billion in tax-free private bonds for the project.
The $4.8 billion XpressWest project would go from Victorville to Las Vegas.
The state treasurer commented, “It’s not only a train but an important economic development tool for your Victorville region, creating 20,000 construction jobs, as well as thousands of housing units and a clean, green electric mass transit system. It’s like a triple win.”
The project awaits a “record of decision” from the Federal Railroad Administration on its environmental impact statement, which is expected sometime in 2020. It still needs Nevada to approve $200 million in bonds, which would allow Virgin to sell $800 million in tax-free bonds. At that point, Virgin could begin construction this year.
