INDIANAPOLIS | With a federal infrastructure windfall on the table in Washington, Indiana House Democrats moved Monday to raid the state's road construction cookie jar and give the money to local government.

The Democratic-controlled House Ways and Means Committee voted 15-8 to commandeer $1 billion of the proceeds remaining from Republican Gov. Mitch Daniels' $3.8 billion lease of the Indiana Toll Road.

Dubbed a state economic stimulus plan, House Bill 1656 would steer $800 million to city and county road projects over the next two years. The Indiana Department of Transportation would get the remaining $200 million to pursue state projects designed to attract more federal dollars.

"We need to put Hoosiers back to work," said Rep. Scott Pelath, D-Michigan City.

The legislation includes provisions requiring state agencies to give contracting preference to Indiana companies, including region steel mills. The state could accept Hoosier bids up to 15 percent higher than out-of-state competitors, and agency heads could hike the in-state premium to 25 percent.

State Transportation Commissioner Karl Browning told lawmakers the preferential treatment would run afoul of contracting standards Indiana must adhere to on federally funded road work. He also produced a list of nearly two dozen state highway projects, including a U.S. 20 ramp in Michigan City, that would be jeopardized if lawmakers OK the funding raid.

"Something will have to give," Browning said.

With Indiana projected to receive about $750 million in road and bridge funding from the proposed federal stimulus package, Democrats contend INDOT could relinquish the Toll Road money without incident. But Browning noted the many strings attached to the federal money, including a requirement that 45 percent of it go to local projects.

The state legislation, which moves to the full House, is less onerous than an initial version unveiled last month, but it's still likely to face long odds in the Republican-ruled Indiana Senate.