• TRANSPORTATION COMMITTEE SET TO APPROVE 6-YEAR HIGHWAY BILL
• CONGRESSIONAL BUDGET PROCESS ROLLS ALONG
• HOUSE TEA 21 FINANCING PACKAGE SET
• SPENDING PANEL HEARS FROM USGS
• NSSGA MAKES FINAL GRASSROOTS PUSH FOR REAUTHORIZATION
• NSSGA PARTNERS WITH CHAMBER OF COMMERCE ON VOTER REGISTRATION AND "GET OUT THE VOTE" EFFORT
• FLY-IN MEETINGS FOLLOW-UP

After countless hearings, months of wrangling, and even more meetings amongst themselves, House Transportation & Infrastructure Committee Chairman Don Young (R-AK) has scheduled a full committee meeting for Wednesday, March 24, to approve two versions of his 6-year highway bill. In a final gesture to show the President there is broad support for a well-funded highway bill, Chairman Young plans to have the committee vote on his $375 billion transportation bill.

Immediately after that vote, the Committee will consider a slimmed down version of the bill, totaling $275 billion in "guaranteed spending," and according to Chairman Young, "Is the one I was told to pass." The top four members of the committee, Chairman Young, ranking member Jim Oberstar (D-MN), Highway Subcommittee chairman Tom Petri (R-WI) and Subcommittee ranking member Bill Lipinski (D-IL) reluctantly support the reduced level in H.R. 3994. The bill will include all the various programs that were in the original bill, however the funding level of each program has been reduced to allow it to fit within a $275 billion spending cap.

The $275 billion bill will reportedly include a re-opener, which will allow the Transportation Committee to reconsider the entire issue during the next Congress. It is unclear how this provision will be structured or if it will make it all the way through the process. The Government Printing Office received the text of the 475-page bill late last week and it was just released for review on March 22. The managers' amendment, stretching hundreds of pages, is still being worked on and probably will be taken up in committee. The bill includes the pavement research provision from the predecessor bill, which allots not less that $10 million annually for aggregates, concrete, and asphalt research. The Senate bill, S. 1072, includes the NSSGA, ACPA, and NAPA supported language creating a pavement research and technology program that includes $3 million annually for aggregates research. We will continue to work with conferees for inclusion of the preferred Senate provision in the final bill out of conference. NSSGA staff also will closely review the new House bill for policy changes that were not included in the original bill, making sure there are no hidden provisions that will negatively affect the aggregates industry. Environmental streamlining provisions advocated by NSSGA are still not in the House bill.

The House is scheduled to begin two days of debate March 24 on the $2.4 trillion fiscal year 2005 budget resolution and, possibly, on a separate budget enforcement bill. Both House and Senate budgets affirm the President's TEA 21 six-year reauthorization spending package of $256 billion over six years. The House resolution places no discretionary caps on that figure, however, and, therefore, leaves room for the possibility that transportation spending could be in the range of $275 billion over six years - the widely anticipated House Transportation and Infrastructure Committee and Republican House Leadership proposal for TEA 21 reauthorization.

This year's budget process is likely to be particularly contentious given the renewed emphasis on the Republican side to spending restraint, concerns over future tax cuts, and the related debates over pay-as-you-go budget discipline, spending caps, and offsets. NSSGA will continue to work with House Budget Committee Chairman Jim Nussle (R-IA) and his technical staff regarding the budget process and its potential impact on highway spending and the reauthorization of TEA 21.

ETHANOL REVENUES TO HTF
On March 17, the House Ways and Means Committee marked up H.R. 3971, the "Highway Reauthorization Tax Act of 2004", setting forth a financing package of additional revenues for the Highway Trust Fund (HTF), an essential element of the TEA 21 reauthorization process. The Committee marked up a package that relies heavily on changes in the taxation of ethanol motor fuel, the so-called volumetric ethanol tax package (V-TEC) that raises the excise tax on ethanol motor fuel to the gasoline equivalent level of 18.3 cents per gallon and remits the newfound revenues to the Trust Fund - some $3 billion per year. The Ways and Means Committee package contains no increase in the gasoline user fee. The Committee's revenue package and its assumptions for the a six-year transportation revenue stream closely mirror the expected House Transportation and Infrastructure Committee/Republican leadership's programmatic reauthorization package of $275 billion over six years.

MOBILE MACHINERY PROVISION
In addition to marking up the revenue package, the Ways and Means Committee included in the bill a provision related to mobile machinery. That provision codifies the current three-part design test now in regulation, as well as adding a 4th use test. That new use test stipulates that mobile machinery must travel less than 7,500 miles on public roads to qualify for a fuel tax exemption. This House provision provides a measure of relief from the 5,000 miles threshold in the Senate TEA 21 reauthorization bill. Because of the difference in the House and Senate versions on mobile machinery, much work needs to be done to retain the 7,500-mile House threshold over the Senate-passed version of 5,000 miles. As you recall, NSSGA testified before the IRS on its proposal to change the definition of mobile machinery to any vehicle "capable of operating on-road". That rulemaking was suspended by the IRS until Congress acted on the issue in the context of TEA 21 reauthorization.

NSSGA is a member of the Mobile Machinery Coalition and has been working with its partners to build support for Representative. Paul Ryan's (R-WI) bill to codify the current three part test. We succeeded in increasing the use test, but not eliminating it. You may be certain that NSSGA will be working diligently with our colleagues from the Mobile Machinery Coalition to ensure that the better treatment for mobile machinery in the House bill is retained in the final TEA 21 reauthorization bill.

Noting March 3, 2004 was the 125th birthday of the U.S. Geological Service (USGS), Director Charles Groat, presented the Administration's fiscal year 2005 budget request to the House Interior Appropriations Subcommittee. Subcommittee Chairman Charles Taylor (R-NC) started the hearing by noting that they were likely to make changes to the budget proposal.

Director Groat's testimony focused on the five areas where the USGS was going to concentrate its funds and human resources: water resources and availability; natural hazards; biology; information technology; and supporting the science in certain Department of Interior projects. The $919.8 million budget request, he noted, was $18.2 million less than what the department received last fiscal year. Of interest to the industry was the sentence in the written testimony that stated, "To provide resources for higher priority efforts, the budget request includes a proposed reduction of $11.1 million certain individual projects and lower priority mineral resource efforts [the Geology Program as a whole received $220.8 million]." Members of the Subcommittee that asked questions mainly inquired about specific programs or projects in their district or state.

In advance of the Director's testimony before the Subcommittee, NSSGA President & CEO Joy Wilson sent a letter to Chairman Taylor and Subcommittee members urging restoration of the funding for aggregate data collection performed by the USGS's Minerals Information Team. The Administration proposed to cut the program's funding by $750,000. NSSGA will continue to monitor this important program and work to ensure enough funds remain to continue this vital data collection function.

Over the past several weeks, NSSGA's Government Affairs Division has been holding conference calls with the Government Affairs Committee and State Association Executives to update them on the latest developments regarding reauthorization and to discuss strategies for achieving the best possible bill in the current political climate. Following up on these discussions, NSSGA has sent an "Action Alert" to members of its Government Affairs Committee and State Association Executives to contact their mayors, local, county and state officials and ask them to urge their U.S. Senators and Representatives to support $318 billion as the minimum funding level for final TEA 21 reauthorization. The House of Representatives is moving forward on a $275 billion proposal and the Senate already passed a $318 billion measure.

The Senate investment level represents the mid-point between the federal share of the nation's documented transportation needs and the current inadequate highway and transit funding levels. NSSGA is seeking to stress to these locally elected officials that the $318 billion funding level was achieved by the Senate without violating any of the three principles laid out by the Bush administration for a reauthorization bill - it does not raise the highway user fee; it does not increase the federal deficit; and it does not rely upon bonding.

Congress has heard from many corners on this already, but it is more important than ever for them to hear from the local officials who will be directly impacted by the final funding level of TEA 21 reauthorization. NSSGA is working with its grassroots to encourage local leaders to drive home this message of support with their U.S. Senators and Representatives on behalf of the Senate bill's $318 billion funding level.

Once again, NSSGA has partnered with the U.S. Chamber of Commerce on the "Vote for Business" political program for the 2004 elections. This unique, bipartisan program has been designed to respond strongly to the political efforts of the business community's adversaries and could prove to be the difference in many key House and Senate races.

The "Vote for Business" web site is accessible via the Government Affairs Division section on the NSSGA web site. Following a welcome message from NSSGA President & CEO Joy Wilson, individuals are taken to the main "Vote for Business" site where they can register to vote or request an absentee ballot, learn who the elected representatives and candidates in their area are, see how their elected officials voted on the issues important to business, and find their polling places and the hours that they are open. Individuals can also access information on presidential candidates and candidates for other offices around the country through the "Vote for Business" web site.

More than ever, it is crucial for business to play a key role in electing those who will govern us. This starts with you and your coworkers being registered to vote and informed. NSSGA's "Vote for Business" project has made this easier than ever before. Just go to the Government Affairs Division section of the NSSGA web site and get started today.

If you have not already submitted the summary sheets on meetings that you attended during the recent fly-in (or other recent meetings with members of Congress), please be sure to take a moment to do so and return them to NSSGA. The ability to track and reference meetings that our members have had with Senators and Representatives is an important aspect of our lobbying efforts. A copy of the Legislator Contact Report Form is attached for your convenience.