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Objector claim: All Aboard Florida is being federally subsidized because it plans to use low interest RRIF loans and Private Activity Bonds whose yield is federally tax free. Analysis of the facts reveals: Neither the RRIF nor PAB programs are "subsidies" in the same sense as the direct federal funds that are used to massively subsidize highway (construction and improvement) and aviation (airport construction and improvement and the Air Traffic Control system). A June 9, 2015, article in the Fort Worth Star Telegram, references All Aboard Florida in its discussion of the Texas Central Railway's (TCR) proposal to build a high-speed passenger rail line connecting Dallas, TX with Houston, TX. From that article: "TCR says they will neither seek nor accept government grants or subsidies of any kind. They will consider federal credit assistance such as loans under the Transportation Infrastructure Finance and Innovation Act (TIFIA) and/or the Railroad Rehabilitation & Improvement Financing (RRIF) program. "Like the Florida project, TCR might seek DOT approval to issue tax-exempt private activity bonds (PABs), which are widely used on highway public-private partnership projects. "PABs are backed by project revenues. Taxpayers are not on the hook if the project defaults; only the bond buyers are. "Texas Central Railway and All Aboard Florida are private-sector projects, to be done via project finance that must be paid back from the project's own revenues. There is little or no risk to taxpayers, federal or state, in either project." A Federal subsidy is a grant and comes from the spending side of the budget. Solyndra received a subsidy. A Federal incentive differs from a subsidy because it comes from the revenue side of the budget by lowering RRIF loan interest rates and making PAB yields tax-free. By their nature, incentives are minuscule in comparison to subsidies. A tax deduction of interest on home mortgages is an incentive to own a home. Do homeowners think they are being subsidized? While a very broad definition of "subsidy" would include both direct payments and incentives, when the term "subsidy" is used, it normally refers to spending (e.g., highways & aviation subsidies). Conclusions: AAF is not being subsidized in the normal sense of the word. Set up by Congress to support public and private projects that are deemed in the public interest, the RRIF and PAB financing programs provide low-cost financing incentives, which are not direct federal funding subsidies. June 23, 2015 Page 9 of 12 //.2- 9