WASHINGTON — House Transportation Committee chairman Rep. John Mica said Wednesday that he will introduce a multiyear surface transportation bill later this year that includes Build America Bonds.
While the Treasury Department paid BAB issuers 35% of interest costs under a program that expired on Dec. 31, the Florida Republican told those attending the U.S. Conference of Mayors’ winter meeting here that the 35% rate was “too generous” and that he would propose a lower subsidy rate. He did not cite a specific rate.
Mica said that in mid-February, the committee will begin holding a series of field hearings across the country to gather input for the legislation. He said he hopes to complete the field hearings by the end of February.
Mica made the remarks a day after Transportation Secretary Ray LaHood said at a conference in Atlanta that he is confident a multiyear transportation bill can be approved by Congress and signed into law before the August recess. He said the timing is doable despite Republican calls for greater fiscal austerity.
The Obama administration has proposed that the transportation bill contain $50 billion of up-front funding.
Mica said he has been in talks with LaHood, a “personal friend,” about the legislation.
Mica called bonding “an important mechanism” for state and local transportation funding. He added that grant anticipation revenue vehicle bonds, or Garvees, could be enhanced under the transportation bill.
“I want to look at all the models out there and then pick what we could do that has the biggest benefit at the lowest cost to the taxpayer,” Mica said, speaking to reporters after his speech.
Mica specifically mentioned Virginia’s $4 billion transportation funding package as a possible model for state transportation funding. Republican Gov. Robert McDonnell, has proposed the state issue up to $600 million a year for three years to finance its transportation needs. The plan also includes $1.1 billion of Garvees.
Mica said the transportation package he proposes will ensure that the gas tax and other revenues in the Highway Trust Fund will be fully used and only for transportation projects.
The House passed changes to its rules during the opening week of the 112th Congress that transportation and business groups warned were ambiguous and could let revenues in trust fund remain unspent, thereby creating a surplus that would free up funding elsewhere in the budget.
“I don’t want the trust fund used for anything else,” Mica said.
Separately, the U.S. Conference of Mayors released a report showing continued high unemployment in certain metropolitan areas. The report, published by IHS Global Insight, said 32 metro areas — including Detroit, Toledo, Ohio, and Decatur, Ill. — will not return to the employment rates they had before the recession until 2025. By the end of 2011, 109 metro areas will have an unemployment rate that is 10% or higher, according to the report.