Developments in the House of Representatives point to continued problems in producing a TEA-21 bill covering 6-years at adequate investment levels. In recent days, House leaders have taken steps to push towards a six-year bill are funding levels well below those viewed as adequate by highway and transit advocates.

On March 3, House T&I Committee Chairman Don Young (R-Alaska) announced he would put before his committee on March 23 and 24 a six-year $279.5 billion TEA-21 reauthorization. This is almost $100 billion below the amount Rep. Young had been insisting on up to this point and $38.5 billion below the Senate's number. Reports indicate the new number is the one that House Ways & Means Committee Chairman Bill Thomas (R-California) insisted on as the maximum he would support.

Thomas apparently plans to advance the Highway Trust Fund financing legislation, usually attached to the actual highway and transit legislation, as part of his legislation on Foregin Sales Corporations (FSC's) instead. The FSC legislation is needed to head-off trade sanctions levied against the US on March 2 because current tax benefits for FSC's violate WTO rules. Thomas' legislation to make necessary alterations would forbid certain sale-leaseback arrangements that transit agencies and municipalities have used in recent years to reduce the capital costs of equipment. Apparently, Thomas wants to attach the tax provision relating to transportation financing to his bill because he also wants to siphon off revenues which otherwise would go to the Highway Trust Fund. These may include interest on the fund and the proceeds of highway use tax evasion enforcement efforts. The reason he wants to ensure a six-year bill is to produce enough revenue from these sources to be meaningful for him as an offset to other tax breaks in the bill.

This power play by Thomas could have the impact of dictating the cost and length of the reauthorization of TEA-21. Clearly, the House leadership would need to acquiesce in this decision.

As these events unfolded on March 3 and 4, leaders of the highway lobby met with key legislators on Capitol Hill to express their displeasure. Other highway and transit advocates and organizations representing elected officials at the state and local levels are now re-examining their positions on a six-year vs two-year bill.

The period between now and the House T&I mark-up promises to be a turbulent one. Keep you seat belts fastened. We'll have further news as it develops.