TRENTON, N.J. (AP) – The U.S. Transportation Department tells New Jersey it will be credited nearly half the $271 million it owes the federal government for a scrapped NY-NJ rail tunnel if it pays back all it owes.

New Jersey got the tunnel tab for money already spent after Gov. Chris Christie abandoned the $8.7 billion project because of potential cost overruns.

The bill is due Dec. 24.

Sen. Frank Lautenberg has been negotiating with federal transit authorities to get the bill reduced. Christie approved the hiring of a Washington law firm to fight it.

A Dec. 14 letter confirming that $128 million would be credited to a congestion mitigation account after New Jersey repays the debt was signed by Transportation Secretary Ray LaHood. The Associated Press has obtained a copy of the letter.

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