On the afternoon of Friday, April 2, 2004, the full House voted to approve the six-year $275B HR 3550 TEA 21 reauthorization bill by a vote of 357 to 65. Most of the approximately 23 amendments that were offered were defeated, including the controversial donor states amendment offered this morning by Rep. Isakson (R-GA). The bill now moves to conference with the Senate following the upcoming congressional recess. The two provisions which the White House indicated were grounds for a veto remain in the bill as passed – the $275B funding level and the bill “reopener” designed to revisit the funding issue in 18 months in order to increase the rate of return to donor states.

The current extension of the existing TEA 21 law expires on April 30. Although the House took quick action on its version of the bill, it appears unlikely there is enough time following the recess to resolve the many remaining controversial issues by the expiration date. Congress will consider another short term extension, but just yesterday Senate Minority Leader Tom Daschle indicated Senate Democrats may not be willing to support another extension.

Earlier on Wednesday, March 24, 2004, the House Transportation & Infrastructure (T&I) Committee marked-up and reported out HR 3550, a six-year, $275B TEA 21 reauthorization bill. The bill was marked-up in full committee and the mark-up was generally non-controversial. After numerous opening statements by committee members, Chairman Young first called for a vote on his original $375B TEA LU bill, recently reintroduced as HR 3994. It was passed by voice vote. The purpose of this vote was to put the committee on record in strong support of its original $375B funding level. Member after Member expressed strong disappointment that the committee was not in a position to pursue this higher funding level. Young then introduced a 900 page substitute amendment for HR 3550 comprised of a scaled down $275B version. It also passed by voice vote and will be sent to the floor.

The structure of the new bill is generally very similar to the original bill. It appears no significant programs, including new programs, were dropped in their entirety. Programs were simply scaled back, although some newer programs more so than others. The most significant new item is the addition of a bill “reopener”. New language would require that funding for all programs be cut off as of September 30, 2005 unless new legislation is signed into law which would increase the rate of return to the states to 92%, rising to 95% by 2009 (see discussion below) and that all states would be held harmless. This is a somewhat similar concept to the NHS reopener included in the ISTEA bill. However, the idea of a bill opener is controversial since it assumes there would be additional resources available to increase the rate of return which the White House and the House Ways & Means Committee would likely not support. Also, the Senate may not like any language that could jeopardize the stability of their six-year bill.

The main issue of controversy at the mark-up was Young’s decision to keep the current TEA 21 90.5% rate of return to states rather than bumping up the return rate to 95% as initially proposed. A number of Members from donor states were very concerned about this and Rep. John Mica (R-FL) offered an amendment to raise it back to 95%, but he then withdrew the amendment noting that with only $275B, it would be impossible to accomplish. The members of the SHARE Coalition who support the 95% return rate vowed to take their fight to the House floor and to conference. A number of other mostly minor amendments were offered but then each was withdrawn after the sponsoring Member outlined his/her issue. In each case Chairman Young indicated he would work to try to resolve the issue prior to floor action.

The approved bill includes a list of authorized New Start transit projects. It is our understanding that all New Start projects that were requested are listed in the bill. The projects are listed by name only with no dollar figures. Projects are listed in one of three categories – Full Funding Grant Agreements, Final Design & Construction and AA/PE. Also included in the bill are 2883 high priority highway projects. The project list takes up 130 pages, however the projects are not listed in any particular, making it difficult and time consuming to locate specific projects.

House Majority Leader Tom DeLay took the bill to the floor before the April recess; prior to the two week recess the weeks of April 5th and 12th. Within the total of $275B approved by the committee, $217B is authorized for the highway program (versus $255B in the Senate bill), $51.6B is authorized for the transit program (versus $56.5B in the Senate bill) and about $5B is authorized for safety programs. Year by year funding for the highway program is authorized at $33.6B in FY’04 (the current fiscal year), $34.6B in FY’05, $35.6B in ’06, $36.7B in ’07, $37.8B in ‘08 and $38.9B in ‘09.

Year by year funding for transit is authorized at $7.27B for FY’04 (the current fiscal year), $7.75B in ’05, $8.27B in ‘06, $8.82B in ‘07, $9.4B in ’08 and $10B in ’09.

The original pot of money for highway high priority projects was scaled back from $15B to about $11B. A list of 2883 projects is included in the bill. Most projects received less than $5M – mostly in the $1M to $2M range, with the exception of a few large bridge or interchange projects. The funding for these projects is spread out over the six-year life of the bill. While the project funding levels are not likely to change, the bill must still be approved by the full House and merged with the Senate-passed bill. The Senate bill does not currently include any highway earmarks. Senators anticipate adding projects in conference. The value of those projects will either be added in on top of the House projects or merged in with the House projects depending on the size of the final bill. The provision establishing a new program of Projects of National and Regional Significance remains in the bill, but no projects were earmarked for funding at this point in time.

March 31st saw a flurry of activity on the House floor and in the House Republican Conference. The Rules Committee met again early on the morning of April 1st and approved a rule for the bill making in order a large Manager’s amendment developed by the T&I Committee’s leadership and approximately 23 other amendments. Information on the pending amendments is attached to this email. The House floor debate was broadcast on CSPAN and is expected to last into Friday. The goal is to finish debate and vote on final passage sometime Friday before the House adjourns for a two-week recess, but it is unclear if this can be accomplished given all the divisive factors in play.

Debate got off to a rocky start when numerous Members, particularly Republicans, raised a variety of concerns about proceeding with the bill. The primary issues of concern relate to the size of the bill (as being both too large and too small), the renewed threat of a veto from the White House, the state equity issue and the bill “re-opener”.

On Tuesday March 30th, the White House issued a Statement of Administration Policy (SAP) on HR 3550. The SAP raises numerous concerns about the bill, but specifically says a veto would be recommended if the $275B funding level and the bill “re-opener” remain in the bill. The full SAP can be read at http://www.whitehouse.gov/omb/legislative/sap/108-2/hr3550sap-h.pdf The purpose of the bill “reopener”, as included by House T&I Committee Chairman Don Young, is to revisit the bill’s funding levels in 2005 with the hope of increasing funding at that time. The provision would require that funding for all programs be cut off as of September 30, 2005 unless new legislation is passed which would increase the rate of return to states to 95%. Such an increase in the rate of return is not currently possible without an influx of new funding. The Administration also opposes guaranteeing the general fund portion of the transit program.

The House leadership is caught in the middle between the donor state Members who are insisting on a 95% rate of return which is impossible to achieve at the $275B funding level, those who want to increase funding but fear a presidential veto and fiscal conservatives who think the bill is too expensive and should be rolled back to the Administration’s proposed level of $256B. Many House Members are also uneasy about the “we will solve all these issues in conference with the Senate” sentiment. They are leery of losing control over the bill and having their issues lost in the “behind closed doors” atmosphere of a conference.

Amendments are expected to be offered on the floor to increase the guaranteed return to states from the current 90.5% up to 95% and to count earmarked projects dollars against a state’s formula allocation. The perennial issue of the Davis Bacon wage rate is also raising concerns among many pro-labor Republicans who are vowing to vote against the bill if any anti-Davis Bacon language gets added to the bill.

The 180 page Manager’s amendment includes a rail title reauthorizing the Swift Act high speed rail program and expanding the RRIF rail loan amounts, provisions that were originally included in Young’s RIDE 21 bill. Also included is an extension of the TEA 21 budgetary firewalls and the Ways & Means Committee approved revenue provisions.