House Poised to Amend Distribution of Transportation Funds

WASHINGTON — The House was poised late Thursday to consider an amendment to the tax-extenders package that would slightly alter the distribution of nearly $1 billion to states for transportation projects.

The latest tax-extenders legislation was introduced last week by Senate Finance Committee chairman Max Baucus, D-Mont., and House Ways and Means Committee chairman Sander Levin, D-Mich. Among other things, it proposes extending the Build America Bond program through 2012 with gradual reduction in subsidy payment rates to 30% from 35%.

The transportation-related language in the amendment to that package would be a compromise of sorts between two different schemes for divvying up highway funds.

The so-called jobs bill enacted in March had included a provision to distribute $932 million among 29 states and the District of Columbia based on earmarks set when the programs were created in 2005.

The tax-extenders legislation proposed instead that all states be eligible for the share each received from fiscal 2009 highway funds, which are allocated based on a formula.

The amendment that is expected to be voted on as early as last night would alter the provision one more time. Instead, states would receive the larger of two amounts: their share of formula funds or the amount they would have gotten through the earmark provision.

The provision would add a “savings clause” to the bill, with respect to the $932 million available under the projects of national and regional significance program and the national corridor infrastructure improvement program. The savings clause would provide each state with the ability to receive the greater amount of funding from either the Hiring Incentives to Restore Employment Act that was enacted in March or this bill.

The provision also would authorize as much money “as may be necessary” from the federal highway trust fund to carry out the distributions.

Under the change, some states that would have claimed the lion’s share of funds could walk away with their share intact, while smaller states that would have been excluded would still receive funds, sources said.

Under the HIRE Act, four states — California, Illinois, Louisiana, and Washington — would receive 58% of the funds. The other 47 states including the District of Columbia would receive only 42% of funds. California would receive the largest share of the total, at $278 million. Illinois would receive $151 million, Louisiana would receive $59 million, and Washington would receive $55 million.

Almost half of states would receive nothing if the funds are distributed according to the HIRE Act, instead of according to the proposed legislation.

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