CRS Updates Report on Gasoline Excise Tax, Highway Trust Fund Extensions

The federal government levies an excise tax on various motor fuels. Under current law, the tax rate is 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel. A 0.1 cents per gallon tax is also levied on top of these fuel tax rates to help fund expenses associated with fuel regulation. These rates are not automatically adjusted for inflation. Specific tax rates also apply to special motor fuels, such as kerosene, gas derived from biomass, and compressed natural gas. Under current law, federal motor fuels excise tax collections are credited to two federal spending accounts: the Highway Trust Fund (HTF) and the Leaking Underground Storage Tank (LUST) Trust Fund.

On July 6, 2012, President Obama signed the Moving Ahead for Progress in the 21^st Century Act or MAP-21 (P.L. 112-141). This law authorized (1) federal surface transportation program authority, (2) HTF expenditure authority, and (3) related-tax authority through October 1, 2014. In particular, current law gasoline and diesel tax levels are authorized through September 30, 2016. Under current law, the tax rates on gasoline and diesel motor fuels are scheduled to decrease to 4.3 cents per gallon (regardless of fuel type) after September 30, 2016. This is the permanent law tax rate. The 0.1 cent LUST Trust Fund tax is scheduled to expire on that same date.

A major policy debate surrounding the motor fuels excise tax relates to the ability of the HTF to be self-sustaining. Approximately 90% of HTF receipts are composed of annual tax collections on gasoline and diesel fuels. Since 2008, obligations from the HTF have exceeded receipts and over $53 billion have been transferred from the Treasury's general fund to temporarily address these projected shortfalls. Tax collections have declined over time largely because of inflation's effect on the value of the tax rates, and reductions in vehicle miles traveled, among other factors. Future declines in tax collections are projected largely due to scheduled increases in corporate average fuel economy (CAFE) standards.

In the 113^th Congress, some Members have called for increasing the motor fuels excise tax rate to help finance the HTF. For example, the Update, Promote, and Develop America's Transportation Essentials Act of 2013 (H.R. 3636) would phase-in an increase in the tax rates on gasoline and diesel to 33.3 and 39.3 cents per gallon, respectively, by 2016 and would index further tax rate increases to any increases in inflation in years 2016 to 2024. Others have proposed more fundamental reductions in the federal government's role in highway financing by reducing federal motor fuels excise tax rates and devolving most federal highway programs and activities to the states (e.g., H.R. 1065, H.R. 3486, S. 1702).

Other possible options for financing surface transportation infrastructure are discussed in CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett.

This report provides an overview of current law and a recent legislative history of federal motor fuels excise tax rates (with an emphasis on gasoline and diesel fuel for highway use) and the HTF. State motor fuels tax rates are mentioned in brief. The report ends with a discussion of legislation in the 113^th Congress that would modify the federal motor fuels excise tax. Issues related to HTF spending programs and infrastructure financing, more broadly, are beyond the scope of this report, but references to relevant CRS reports are provided.

                            Contents

The federal government levies an excise tax on various motor fuels intended for highway use.¹ Under current law, the tax rate is 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel.² A 0.1 cents per gallon tax is also levied on top of these fuel tax rates to help fund expenses associated with fuel regulation. These rates do not automatically adjust for inflation. The statutory motor fuel excise tax rates were last increased in 1993. Specific tax rates also apply to special motor fuels, such as kerosene, compressed natural gas, and fuels derived from biomass. Motor fuels that are not intended for highway use are exempt from these taxes, as are specific federal government purchases of motor fuels.³

Under current law, federal motor fuels excise tax collections are credited to two federal spending accounts: the Highway Trust Fund (HTF) and the Leaking Underground Storage Tank (LUST) Trust Fund.

The HTF is a federal transportation fund that is divided into two accounts: (1) mass transit and (2) highways. According to the language in authorizing legislation, the Federal Highway Administration divides the receipts into the HTF between the states and territories.⁴ Although the HTF has other sources of revenue and is also credited with interest paid on the fund balances held by the U.S. Treasury, fuel taxes historically have provided almost 90% of the receipts to the HTF.⁵ The mass transit account receives 2.86 cents per gallon of fuel taxes, with the remainder of the tax revenue flowing into the highway account.⁶

The LUST Trust Fund receives 0.1 cents per gallon from the tax.⁷ Monies in the LUST Trust Fund are used to pay expenses incurred by the Environmental Protection Agency (EPA) and the states for preventing, detecting, and cleaning up leaks from petroleum underground storage tanks, as well as programs to evaluate the compatibility of fuel storage tanks with alternative fuels, methyl tertiary butyl ether (MTBE) compounds added to improve fuel combustion and air quality, and ethanol and biodiesel blends.⁸

Some Members of Congress have expressed concern that the HTF is no longer self-sustaining. In recent years, tax collections have declined over time largely because of inflation's effect on the real value of the tax rates and reductions in vehicle miles traveled. Future declines in tax collections are projected largely due to scheduled increases in corporate average fuel economy (CAFE) standards.⁹ Since 2008, Congress has prevented projected shortfalls in the HTF by transferring a total of $53 billion from the Treasury's general fund to the HTF. While these general fund transfers have been capable of fulfilling HTF obligations to the states temporarily, some Members of Congress have considered increasing excise tax rates or other revenue reforms to more closely align the growth of HTF receipts with the growth of obligations. Others, in contrast, have suggested cutting programs to reduce HTF outlays.¹⁰

Several bills introduced in the 113^th Congress, discussed later in this report, reflect a different perspective toward HTF financing. For instance, some propose to reduce tax rates as part of larger proposals to reduce federal involvement in interstate transportation policy and delegate more authority to the states.

This report provides an overview of current law and a legislative history of the federal motor fuels excise tax and financing of the HTF. Specifically, this report analyzes tax collections from gasoline and diesel motor fuels for highway use, since they have historically composed approximately 90% of the source of funding for the HTF. This report ends with a discussion of legislation in the 113^th Congress that would modify the federal motor fuels excise tax. The Appendix contains a legislative history of the tax dating back to its inception in 1932.

Issues related to Federal Highway Trust Fund spending programs and infrastructure financing, more broadly are beyond the scope of this report. Other CRS reports provide additional analysis of transportation finance issues:

• For more in-depth analysis of federal highway finance options (including the HTF), see CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett; and CRS Report R41869, The Donor-Donee State Issue in Highway Finance, by Robert S. Kirk.

• For an analysis of the economic effects of a change in the amount of the gasoline tax, see CRS Report R40808, The Role of Federal Gasoline Excise Taxes in Public Policy, by Robert Pirog.

• For information on transportation spending programs and infrastructure financing, see CRS Report R43156, Transportation, Housing and Urban Development, and Related Agencies (THUD): FY2014 Appropriations, by Libby Perl, David Randall Peterman, and Maggie McCarty, and CRS Report R43308, Infrastructure Banks and Debt Finance to Support Surface Transportation Investment , by William J. Mallett and Steven Maguire.

Federal Tax Rates

Federal tax rates on motor fuels used for transportation purposes are summarized in Table 1. Under current law, the federal tax on gasoline is 18.3 cents per gallon and diesel is taxed at 24.3 cents per gallon. A 0.1 cents per gallon tax is levied on top of these rates for the LUST Trust Fund.¹¹

The current tax rates on gasoline and diesel motor fuels are scheduled to decrease to the permanent law rate of 4.3 cents per gallon (regardless of fuel type) after September 30, 2016. In addition, the 0.1 cent LUST Fund Tax is scheduled to expire on that same date.¹²

         Table 1. Federal Motor Fuel Excise Tax Rates Under Current Law

              Table 2. Summary of Changes in the Statutory Rate of

Although not a focus of the analysis in this report, many state and local governments also levy their own motor fuel excise taxes. As such, changes to federal excise taxes will have an indirect impact on state and local motor fuel excise tax revenues. According to the American Petroleum Institute (API), a national trade association that represents the U.S. oil and natural gas industry, the average state excise tax rates on gasoline and diesel were 21.4 cents and 19.5 cents per gallon, respectively, as of July 2013.¹³ API also publishes variations of this analysis on a state-by-state basis.

Motor fuel excise tax administration also varies by state. Some states have different rules for the point of taxation as some tax the product "at the rack," which is upon removal from the bulk terminal. In contrast, other states impose the tax at the distributor level where distributors hold licenses and file regular (usually monthly) returns with the state and local tax authority.¹⁴ By comparison, the majority of federal excise taxes are collected by the Internal Revenue Service (IRS) when the fuel is removed from the bulk storage terminals.

The cumulative effect of federal, state, and local taxes contributes to some of the variation in fuel prices across the nation. The American Automobile Association (AAA) publishes daily average fuel prices in a particular state (and some metropolitan areas).¹⁵

Recent History

Before 2008, the HTF was mostly self-sustaining, primarily through receipts generated by motor fuels excise taxes. Since 2008, the HTF has faced potential shortfalls in revenue and has required transfers in funding from the Treasury's general fund to meet its obligations to the states (under current law, the HTF cannot run negative balances).¹⁶

On July 6, 2012, President Obama signed H.R. 4348, Moving Ahead for Progress in the 21^st Century Act, or Map-21 (P.L. 112-141). This law authorized federal surface transportation programs through September 30, 2014, and tax collection authority, including gasoline and diesel taxes, through September 30, 2016. The extended gasoline tax rate was 18.4 cents per gallon and the extended diesel tax rate was 24.4 cents per gallon. These rates include a 0.1 cent per gallon tax levied and deposited in the LUST Trust Fund.

Some Members of Congress have expressed concerns regarding the state of the HTF and its ability to be self-financed given current trends in obligations and receipts.¹⁷ According to the Congressional Budget Office (CBO), spending from the HTF is projected to be roughly $50 billion per year after FY2014 and grows at the rate of anticipated inflation, while the receipts coming into the fund are projected to be $40 billion in FY2014.¹⁸ Thus, CBO estimates that at some point in FY2015, the Department of Transportation (DOT) will be unable to reimburse states for all of the federal highway and mass transit expenses they have incurred.

Several approaches to this shortfall have been discussed, both in hearings and more generally as part of the debate over funding for the HTF. For example, Congress has prevented potential shortfalls to the HTF by transferring more than $53 billion from Treasury's general fund to the HTF.¹⁹ According to CBO, "If lawmakers chose to continue authorizing such transfers, they would have to transfer an additional $15 billion in 2015 and increasing amounts in subsequent years to prevent future shortfalls, if spending was maintained at the 2013 level, as adjusted for inflation."²⁰

While ad hoc transfers in general funding would not enable the HTF to be self-sustaining, it could ensure that HTF obligations to the states are met when potential shortfalls in the HTF arise. As previously mentioned, the HTF cannot incur a negative balance under current law.

Members have also discussed options to raise the federal gas tax as a means to offset the effects of inflation on the value of the tax rate and to compensate for other trends in motor transport (e.g., fewer passenger-car miles traveled and more fuel-efficient vehicles). Alternative tax regimes, or complements to the status quo motor fuel excise tax, such as a "vehicle miles traveled" (VMT) tax, have also been discussed as an option for addressing projected HTF shortfalls. If Congress wishes to address potential shortfalls in the HTF solely by cutting spending, CBO estimates that spending would need to be cut by about one-quarter compared with projections in the CBO's baseline.²¹

Legislative Activity in the 113^th Congress

Extension of Funding for the Highway Trust Fund

Congress's authority to obligate new funds from the HTF expires at the end of FY2014 and tax revenue directed to the HTF is expected to decline as motor fuels excise tax rates are scheduled to reduce sharply in FY2017. As of the publication date of this report, no bills have been introduced in the 113^th Congress to reauthorize expenditures for the HTF beyond the end of FY2014.

Modifications to Excise Taxes on Motor Fuels

Most of the proposals concerning federal motor fuels excise taxes focus on the issue of the level of the rates. Some Members have called for maintaining the current system of financing the HTF, but with higher rates. Others have proposed more fundamental changes in highway financing by reducing the federal government's role and transferring more responsibilities to the states.²²

Excise Tax Reductions and Highway Trust Fund Reform

The Transportation Empowerment Act (H.R. 3486, S. 1702), sponsored by Representative Tom Graves and Senator Mike Lee would phase in reductions in excise tax rates on motor fuels over a three-year period beginning in 2015. Under the Transportation Empowerment Act, the federal tax rate on gasoline would be reduced from 18.3 cents per gallon in 2014 to 9.6 cents effective October 2015, and eventually to 3.7 cents by October 2018. Tax rates on diesel and kerosene motor fuels would be reduced from 24.3 cents per gallon in 2014 to 5.0 cents effective October 2018. Similar bills were introduced in the 112^th Congress as H.R. 3264 and S. 1164. The Transportation Empowerment Act would also transfer the responsibilities over highway and transit programs to the states over five years. Over the five-year transition period, states would be provided with funding through block grants.

Proponents of the Transportation Empowerment Act argue that (1) the states are better situated to understand their transportation priorities than the federal government, (2) efficiencies for taxpayers could result from reducing the costs of managing surface transportation programs, (3) it would reduce the need for some federal regulations to be applied to the states (e.g., National Environmental Policy Act), and (4) the bill could avoid a federal motor fuels tax increase.²³

The Surface Transportation and Taxation Equity Act (H.R. 1065), sponsored by Representative Scott Garrett, would allow states to opt out of the federal transportation program and would reduce federal tax rates on motor fuels in proportion to any state tax rate increases (but the tax rates cannot be decreased below 2 cents per gallon). According to press releases, Representative Garrett's proposal aims to reduce state reliance on the federal HTF for transportation funding and, like the Transportation Empowerment Act, seeks to increase efficiencies for the taxpayer by reducing federal management costs and avoiding federal excise tax increases.²⁴ A similar bill was introduced in the 112^th Congress as H.R. 1737.

Excise Tax Increases

On December 3, 2013, Representative Earl Blumenauer introduced Update, Promote, and Develop America's Transportation Essentials (UPDATE) Act of 2013 (H.R. 3636), which would increase federal excise tax rates on gasoline, diesel, and kerosene fuels for the first time since October 1993. According to a press release from Representative Blumenauer's office, the bill would raise around $170 billion over 10 years.²⁵

Under H.R. 3636, current federal tax rates on gasoline would increase by 15 cents (from 18.3 cents to 33.3 cents) between 2013 and 2016, and diesel and kerosene tax rates would also increase by 15 cents (from 24.3 cents to 39.3 cents). Under current law, these tax rates are scheduled to decrease to the permanent law rate of 4.3 cents per gallon and the LUST tax is set to expire after September 2016. In addition, H.R. 3636 would index further tax rate increases to changes in inflation in years 2016 to 2024. A summary of the tax rate changes in H.R. 3636 is shown in Table 3.

             Table 3. Proposed Federal Motor Fuels Excise Tax Rates

Alternative Policy Approaches

As indicated by hearings on highway financing, some Members of Congress have indicated that they think that the federal motor fuels excise tax base might need to be broadened to meet the evolution of transportation in the 21^st century. ²⁹ CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett, discusses several of these options and other approaches that could be used in various combinations to reform HTF funding, such as the following:

• Indexing existing fuel taxes to some measure of inflation. For example, the tax could be adjusted to return it to the level of purchasing power it had in 1993 and indexed for inflation in the following years.³⁰

• A tax based on the percentage of the sales price (i.e., an ad valorem tax rate) instead of the current regime that levies a tax rate per gallon. An ad valorem tax rate could adjust for inflation in fuel costs over time, but it could also lead to increased tax collection volatility or decreases during times of lower prices.

• A distance-based user charge based on vehicle miles traveled (VMT) on highways could better reflect actual use of highways, but there are also privacy, cost, and administrative hurdles that would need to be addressed to implement such a system.

• Freight-related transportation taxes and fees could be used to increase HTF collections from narrower tax bases than the motor fuels tax or a VMT charge.

Gasoline Excise Tax for Deficit Reduction -- 1932

Although excise taxes have long been a source of federal tax revenue, the federal manufacturers excise tax on gasoline was first incorporated into the federal tax structure by the Revenue Act of 1932, which became law on June 6, 1932.

Prior to the 1932 act, there had been reluctance on the part of federal officials and Congress to impose this tax at the federal level. Instead, they preferred to relinquish this revenue source to the states to help them finance their revenue needs. Oregon was the first state to levy a gasoline tax in 1919. As of January 1932, all of the states and the District of Columbia had enacted legislation imposing a tax on gasoline with rates that ranged from two to seven cents per gallon.

However, during the severe depression of the 1930s, federal revenues were sharply reduced and higher expenditures were made for relief and public works programs. As a result, the Secretary of the Treasury, in his annual report for FY1931, reported that the federal government had incurred a budgetary deficit of some $903 million that year. This marked the first year in more than a decade when federal receipts failed to exceed federal expenditures and produce a budgetary surplus. Moreover, the Secretary of the Treasury estimated then that even higher deficits were anticipated in the years immediately following: $2.1 billion in FY1932, and $1.4 billion in FY1933.

To correct this budgetary imbalance, the Secretary of the Treasury submitted comprehensive tax-raising and expenditure-reduction proposals for congressional action. Among the tax recommendations were those for legislation increasing individual and corporation income, estate and gift, excise, and other taxes. Included in the excise tax proposals was the request for a new federal manufacturer's excise tax on gasoline, to be levied at the rate of one cent per gallon and scheduled to end in 1934. It was estimated that adoption of such a tax would yield the U.S. Treasury approximately $165 million in revenues during FY1933.

The House of Representatives, in its consideration of and action on these revenue-raising proposals, initially refused to impose a new federal tax on gasoline. The Senate amended the House-passed bill, however, authorizing a gasoline tax at the rate of one cent per gallon. Congress retained the tax in the final version of the bill approved by the House and Senate conference committee and signed into law.

As approved, Section 617(a) of the Revenue Act of 1932³¹ imposed a federal tax on gasoline sold by a producer or importer at the rate of one cent per gallon. Under Section 617(c) of this legislation, the term "producer" included a "refiner, compounder, or blender, and a dealer selling gasoline exclusively to producers of gasoline, as well as a producer." Gasoline was defined to include gasoline, benzyl, and any other liquids used primarily as a fuel to propel motor vehicles, motor boats, or airplanes. Section 629 of this act made this tax effective on June 21, 1932, for a temporary period, with provision for its end just over a year later on June 30, 1933. The Annual Report of the Commissioner of Internal Revenue for FY1933 reported that the federal government derived $124.9 million from the excise tax on gasoline. Thus, the gasoline tax represented 7.7% of the total Internal Revenue collection of $1.62 billion derived from all sources during FY1933.

Shortly before the tax was scheduled to expire, Congress approved two bills that extended this tax for an additional year and increased its rate. Under P.L. 73, approved by the 73^rd Congress,³² Congress extended this tax until June 30, 1934. The National Industrial Recovery Act,³³ signed into law on the same day, included provisions governing the rate of this tax. Section 211(a) of this act authorized the increase in federal gasoline tax from one cent to 1.5 cents per gallon, effective June 17, 1933. Section 217(b) provided for this tax to be reduced to one cent per gallon on the first day of the calendar year following the date proclaimed by the President when either of the following occurred: (1) the close of the first fiscal year ending after 1933 when total federal receipts exceeded total federal expenditures, or (2) the repeal of the 18^th amendment to the Constitution, establishing national prohibition (repeal would bring in additional revenues to the U.S. Treasury from alcohol taxes).

Subsequently, President Franklin D. Roosevelt proclaimed repeal of the 18^th amendment to the Constitution on December 5, 1933. Therefore, under authority of Section 217(b) of the National Industrial Recovery Act, the federal gasoline tax reverted to its former rate of one cent per gallon on January 1, 1934.

Section 603 of the Revenue Act of 1934,³⁴ approved in the spring of 1934, continued this tax at the rate of one cent per gallon beyond its scheduled expiration date of June 30, 1934.

National Defense Requirements -- 1940s and 1950s

The one-cent rate was maintained until just before the United States entered World War II, when, as a result of increased national defense requirements, Congress again took action increasing this tax. Section 210 of the Revenue Act of 1940³⁵ authorized an increase to 1.5 cents per gallon for the five-year period beginning on July 1, 1940, and continuing through June 30, 1945, as part of a defense tax.

The following year, under Section 521(a)(20) of the Revenue Act of 1941,³⁶ this rate was made permanent by elimination of the June 30, 1945, expiration date that had been specified in the Revenue Act of 1940.

The 1.5-cent per gallon rate continued for more than a decade until the outbreak of the Korean War, when Congress increased the rate to two cents per gallon under authority of Section 489 of the Revenue Act of 1951.³⁷ This rate became effective on November 1, 1951, and Congress authorized it to continue until March 31, 1954. After this date, Congress scheduled the rate to be reduced to its former rate of 1.5 cents per gallon.

Before this reduction took place, Congress passed the Excise Tax Reduction Act of 1954,³⁸ and under Section 601(a)(6) of this legislation, the two-cent per gallon rate was extended for an additional year -- until March 31, 1955.

During the next two years Congress passed legislation granting one-year extensions of the two-cent per gallon tax on gasoline by approval of the Tax Rate Extension Act of 1955³⁹ (Section 3(a)(3)) and the Tax Rate Extension Act of 1956⁴⁰ (Section 3(a)(3)), which continued the rate first to March 31, 1956, and then to March 31, 1957.

P.L. 466, approved by the 84^th Congress,⁴¹ provided that the Treasury Department refund those taxes paid on gasoline used on farms for farming purposes purchased after December 31, 1955.

Creation of the Highway Trust Fund -- 1956

The Federal Aid Highway Act of 1956⁴² provided for a significant expansion in the federal-aid highway program and authorized federal funding over a longer period to permit long-range planning. It was considered necessary to authorize the entire interstate highway program to assure orderly planning and completion of this network of highways throughout the United States as efficiently and as economically as possible. Consequently, this act authorized appropriations for the 13-year period from FY1957 through FY1969 for this highway system. To make the federal aid highway program self-sustaining, the Highway Revenue Act of 1956⁴³ was incorporated as Title II of this legislation and imposed new taxes and increased others levied on highway users who directly benefitted from this program.

Section 205 of this Highway Revenue Act authorized an increase in the federal gasoline tax from two to three cents per gallon for the 16-year period from July 1, 1956, through June 30, 1972. After that, the Congress scheduled the tax to be reduced to 1.5 cents per gallon.

Section 209 of this act authorized the creation of the Highway Trust Fund (HTF), to which there was to be appropriated from Treasury's general fund certain percentages of receipts derived from highway-user taxes: gasoline, diesel and special motor fuel, tread rubber, tires and inner tubes, trucks, buses, etc. One hundred percent of the federal gasoline tax receipts were transferred to the Highway Trust Fund.

It was argued that transferring such taxes to the HTF was necessary to cover anticipated expenditures to be made under the federal aid highway program for the 16-year period from FY1957 through FY1972. H.Rept. 2022 (84^th Congress), issued on this legislation, estimated that highway-user taxes would yield some $38.5 billion in revenues for this trust fund during this 16-year period -- enough to cover anticipated expenditures of approximately $37.3 billion (during this same period) for the federal aid highway program.

This legislation also arranged for refunding a certain portion of federal gasoline taxes paid that were used for non-highway purposes or by local transit systems.

Since enactment of this legislation, Congress has continued to pass laws extending the life of the Highway Trust Fund and extending and increasing the rates imposed on gasoline.

Under Section 201(a) of the Federal Aid Highway Act of 1959,⁴⁴ the federal gasoline tax was increased from three to four cents per gallon, a change that was to be in effect from October 1, 1959, through June 30, 1961.

Under Section 201(b) of the Federal Aid Highway Act of 1961,⁴⁵ this four-cent rate was extended beyond June 30, 1961. The scheduled reduction to 1.5 cents per gallon, which the Highway Revenue Act of 1956 had authorized to take place on July 1, 1972, was deferred until October 1, 1972.

Following the 1961 act, the next law affecting the federal gasoline tax was the Federal-Aid Highway Act of 1970.⁴⁶ Under Section 303(a)(6) of this act, the scheduled reduction in the rate of this tax to 1.5 cents per gallon was deferred from September 30, 1972, to September 30, 1977.

Again in 1976, extension of excise tax rates without the scheduled rate reductions allocated to the HTF was provided in Title III of the Federal Aid Highway Act of 1976.⁴⁷ The rate reductions were not implemented because the Interstate Highway System was obviously not going to meet the projected completion date by 1977 (it was estimated in 1976 that it might be completed in 1988). Lack of time to study and report to Congress on modifications to the HTF led to the two-year extension. Congress was concerned that without this legislation funding would be interrupted. Thus, Congress delayed decision-making until it could gather additional information.

Two years later, Congress had not yet decided on modifications to the HTF and its related taxes. The Ways and Means Committee accepted the recommendation of the Public Works Committee and approved an extension of the trust fund and the taxes payable to the fund. This five-year extension through September 30, 1984, became part of the Surface Transportation Assistance Act of 1978.⁴⁸

Congress gathered extensive information on highway finance and related taxes in 1982. Two major studies were submitted to Congress. The first was a cost allocation study done by the Department of Transportation in May 1982. The second was a study of the excise tax structure that the Department of the Treasury provided to Congress in December 1982. Further, Congress held more than a dozen hearings before the passage of the Surface Transportation Assistance Act of 1982.⁴⁹

The act contains what was commonly called the 4R Program: interstate reconstruction, resurfacing, restoration, and rehabilitation. The completion and selective expansion of the Interstate Highway System remained the primary goals under the bill. Congress raised the gasoline excise tax from its previous level of four cents per gallon to nine cents per gallon. With this increase, Congress eliminated some highway user charges while increasing others. The act also provided that one cent of the five-cent increase in the motor fuel taxes was to be allocated for mass transit purposes. The bill set up a special mass transit account for expenditures made under the Urban Mass Transportation Act of 1964.

In 1986, in response to concerns about the cost for cleanup of leaking underground storage tanks containing petroleum products, Congress established the Leaking Underground Storage Tank (LUST) Trust Fund.⁵⁰ This fund received revenues of 0.1 cent per gallon on the sale or use of gasoline (first effective January 1, 1987). Congress scheduled the tax to expire on the earlier of December 31, 1991, or the last day of the month in which the Secretary of the Treasury estimated that net revenues in the fund were at least $500 million. This additional tax ended after August 31, 1990, because the LUST Trust Fund had reached its net revenue target for cancellation.⁵¹

The Surface Transportation and Uniform Relocation Assistance Act of 1987⁵² extended the highway-related excise taxes (including the tax on gasoline) through September 30, 1993.

Gasoline Excise Tax for Deficit Reduction -- 1990s

Under provisions of the Omnibus Budget Reconciliation Act of 1990 (OBRA90),⁵³ the tax rate on highway and motorboat fuels was increased by five cents per gallon. Thus, the tax increased from nine to 14 cents per gallon of gasoline. Half of the increase in revenues from the gasoline tax imposed on highway use vehicles was dedicated as additional funding for the HTF. The remaining half of revenues was deposited in Treasury's general fund and dedicated for federal deficit reduction. Of the 2.5-cent increase dedicated to the HTF, 0.5 cents were dedicated to the Mass Transit Account in that trust fund. Thus, Congress increased mass transit account funding from one cent to 1.5 cents. OBRA90 also reinstated the LUST Trust Fund. The LUST tax recommenced at the same 0.1-cent-per-gallon tax rate.⁵⁴ The 14-cent tax rate was scheduled to expire on September 30, 1995, while the LUST tax was scheduled to terminate three months later on December 31, 1995.

The conventional view that had held since the establishment of the HTF, which was that the gasoline tax was a user tax, was challenged. With the passage of OBRA90, the gasoline tax returned to the role it served prior to 1957: a general fund revenue source, at least in part.

The following year Congress passed the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991.⁵⁵ The revenue title is the Surface Transportation Revenue Act of 1991. This act extended the highway-related excise taxes (including the tax on gasoline in Section 8002(a)(3)) for four years. Hence, this law extended the tax on gasoline (without an increase in tax rate) through September 30, 1999. In addition, under provisions of the act, states were permitted to spend their HTF grants on a broader range of alternative transportation modes and related infrastructure needs. This was done in response to the argument that highway users benefit from expenditures on mass transit and other transportation modes because the availability of these travel alternatives alleviates congestion on existing highways, which in turn reduces the need to build additional roadways.

Also included in provisions of ISTEA was the establishment of a new trust fund known as the National Recreational Trails Trust Fund. This fund receives tax transfers from the HTF that represent tax receipts (imposed on gasoline, diesel, and special motor fuels) collected from non-highway recreational fuel use. Examples of recreational fuels are those used in vehicles on recreational trails or back-country terrain, and non-business fuel used in outdoor recreational equipment, such as camp stoves.

Once again, the gasoline excise tax was changed under provisions of the Omnibus Budget Reconciliation Act of 1993 (OBRA93, Section 13241(a)).⁵⁶ Under provisions of OBRA93, the additional 2.5-cent gasoline tax dedicated for deficit reduction was transferred to the Highway Trust Fund beginning October 1, 1995. This additional 2.5-cent tax rate was extended from October 1, 1995, to September 30, 1999. The highway portion of the fund received two cents, while the mass transit account was credited with 0.5 cent of the increased funding. In addition, OBRA93 provided for a permanent, additional 4.3 cents per gallon tax on gasoline starting on October 1, 1993. Thus, the combination of the 2.5-cents OBRA90 gasoline tax rate and the permanent 4.3-cent OBRA93 gasoline tax rate resulted in a total of 6.8 cents per gallon dedicated to deficit reduction purposes between October 1, 1993, and October 1, 1995. Revenues collected from this 6.8-cent portion of the tax were placed in Treasury's general fund.

As previously mentioned, provisions of OBRA90 terminated the LUST tax rate of 0.1 cent on December 31, 1995. Thus, the 18.3-cent federal gasoline excise tax rate was in effect from January 1, 1996 to October 1, 1997, before increasing to 18.4 cents with the reintroduction of the LUST tax. This 18.3-cent rate includes the permanent 4.3 cents initially dedicated to federal deficit reduction but which now goes to the HTF.

Reversion from Deficit Reduction to User Tax Status

During the early months of 1996, the price of gasoline at the pump was rising and a renewed interest developed in federal gasoline excise taxes. Three principal views developed. The first view was that the 4.3 cents increase in federal excise taxes imposed under OBRA93 should be repealed. Proponents of repeal argued that the 4.3 cents repeal could lead to a similar reduction in gasoline pump prices. Two camps developed which supported retaining the tax. Some supporters of the tax expressed the view that while the 4.3-cent tax should be retained, the tax revenues should be returned to the HTF for long-term capital improvements. They argued for increased funding of the nation's highway infrastructure. Others expressed the view that the monies should continue to be collected and used for deficit reduction. This camp of supporters argued that the gasoline price increase was temporary and that over the long term prices would trend lower. Partially in response to this debate, the chairman of the House Ways and Means Committee, Representative Bill Archer, appointed a bi-partisan group to examine the tax treatment of each of the transportation modes with a goal of rationalizing the current myriad tax rules applying to the transportation sector.

Included in the Taxpayer Relief Act of 1997⁵⁷ was a provision that returned the general fund portion of the tax back to the HTF. This provision, first added by a Senate amendment (and modified in conference), provides that the 4.3-cent tax is divided between the highway account (3.45 cents) and the mass transit account (0.85 cent). The provision was effective on October 1, 1997. Thus, of the total 18.3 cents dedicated to the HTF, 15.44 cents goes to the highway account and 2.86 cents to the mass transit account.⁵⁸ As a consequence, the disposition of revenues was altered by the act so that all revenues now accrue to the HTF and none are applied to deficit reduction. Consumers experienced no price change due to enactment of this provision since the federal tax rate on gasoline remained the same.

In addition, the Taxpayer Relief Act of 1997 reinstated the LUST Trust Fund excise tax, which had expired January 1, 1996.⁵⁹ The tax was reinstated at its prior tax rate of 0.1 cent per gallon on all types of motor fuels. The tax rate change was effective from October 1, 1997 through March 31, 2005.⁶⁰ The LUST excise tax was then extended for an additional seven months (through September 30, 2005).⁶¹ Under a provision contained in the Energy Policy Act of 2005 the LUST tax was extended through September 30, 2011. The imposition of the gasoline tax is codified under IRC Section 4081.

Although the component of the federal gasoline tax formerly (but no longer) applied to deficit reduction continues without an expiration date, the 14 cents that was scheduled to expire on September 30, 1999, was extended. Congress not only extended the gasoline excise tax but also the other highway-related excise taxes. The House had proposed to extend the heavy truck tire tax until October 1, 2000, whereupon it would expire. However, in conference with the Senate, all the highway-related excise taxes were extended through September 30, 2005. The legislative vehicle for this extension was the Transportation Equity Act for the 21^st Century⁶² generally known as TEA-21. The revenue portion of this act (Title IX) was titled the Surface Transportation Revenue Act of 1998.

This act also provided that the HTF no longer earns interest on unspent balances (effective September 30, 1998). The balance of funds that exceed $8 billion in the Highway Account was canceled on October 1, 1998. In addition, TEA-21 provided that the National Recreational Trails Trust Fund established under ISTEA be repealed. In the absence of an appropriation of funds, no revenues had been available for expenditure. The conference agreement noted that similar expenditure purposes were provided by authorized amounts from the HTF.

Beginning in the 108^th Congress, a series of laws were passed extending the funding for the HTF.

Extensions in the 108^th Congress

Lawmakers enacted the Surface Transportation Extension Act of 2003 (P.L. 108-88), which was a short-term extension of the highway, highway safety, motor carrier safety, transit, and other programs funded out of the HTF. The five-month extension was signed into law by President Bush September 30, 2003. Four additional short-term extensions were enacted after the expiration of this initial extension. The Surface Transportation Extension Act of 2004 became P.L. 108-202 in February 2004. Part III of the Surface Transportation Extension Act of 2004, P.L. 108-263, was enacted in June 2004, and Part IV of the act, P.L. 108-280, became law at the end of July 2004. The Surface Transportation Extension Act of 2004, Part V became P.L. 108-310 and provided extensions through May 31, 2005, for those programs authorized by the Transportation Equity Act for the 21^st Century (TEA-21). This last extension provided $31.8 billion in contract authority, of which $2.7 billion was for FY2004 and $29.1 billion was available for the eight-month period from October 1, 2004 through May 31, 2005. Under provisions of the Transportation Equity Act for the 21^st Century, expenditures from the trust fund would have ceased if Congress had failed to approve these short-term extensions.⁶³

The revenue sources for the HTF include six different excise taxes, which are taxes on the highway motor fuels, gasoline, diesel fuel, and kerosene; a retail sales tax on heavy highway vehicles; a manufacturers' excise tax on heavy vehicle tires;⁶⁴ and an annual use tax on heavy vehicles. These excises were not affected by the temporary extensions, since under the law at that time the excise taxes were not scheduled for expiration until September 30, 2005.

Extensions in the 109^th Congress

The 109^th Congress initially had until Memorial Day to complete work on the new highway bill. That extension included language that provided for the 2.5 cents per gallon tax on ethanol to be deposited into the HTF for one year. Those monies had previously been deposited into the general fund. That change was estimated to generate $940 million in new revenue for the HTF. Also included was a one-year extension of the budgetary fire walls that tie gas tax revenue to highway and transit programs, while at the same time waiving for one year the Byrd self-solvency test for the trust fund and releasing the $716 million the Federal Highway Administration was holding onto as a result of the trust funds failure of that test.⁶⁵ Further, the extension "also included a new 'supplemental minimum guarantee' program that was designed to ensure that all states continue to receive their 90.5% minimum guaranteed rate of return on fuel taxes sent to the HTF."⁶⁶

Again in the 109^th Congress, it was necessary to pass a number of extensions so that the HTF could continue operations until enactment of a longer term re-authorizing measure. Accordingly, these extensions were known as the Surface Transportation Extension Acts of 2005.⁶⁷

Just prior to the summer recess in August 2005, Congress sent legislation (H.R. 3) to the President which extended trust fund expenditures through FY2009 and continued the highway related taxes through FY2011. The legislation also included provisions aimed at stopping fuel fraud, provided tax-exempt financing authority to finance highway projects and rail-truck transfer facilities, and modified a number of excise taxes (both highway and non-highway related). President Bush signed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (the "Highway Act") into law on August 10, 2005. The act extended for six years the Highway Trust Fund excise taxes due to expire in 2005 until 2011. All of the excise taxes, including the federal excise tax on gasoline, were continued at the prior tax rates. The act established the Motor Fuel Tax Enforcement Advisory Commission, which was scheduled to terminate on September 30, 2009. In other legislation, the Energy Policy Act of 2005 extended the Leaking Underground Storage Tank (LUST) Trust Fund financing rate for the same six-year period that the highway excise taxes were extended.

Extensions in the 110^th Congress

At the time of passage of SAFETEA-LU, tax changes, the unexpended balance in the trust fund, and economic growth were expected to provide sufficient financing for the Highway Trust Fund. But shortfalls developed which required general fund contributions.⁶⁸ On September 15, 2008, P.L. 110-318, To Amend the Internal Revenue Code of 1986 to Restore the Highway Trust Fund Balance, was passed. This law transferred $8.017 billion from Treasury's general fund to the HTF, which provided financing through the end of FY2008.

Extensions in the 111^th Congress

General fund transfers were used again in the 111^th Congress to keep the HTF's balance positive. According to the Congressional Budget Office,

Extensions in the 112^th Congress

In the 112^th Congress, a series of extensions of the surface transportation legislation have occurred. These extensions reauthorized the federal government's highway, mass transit, and surface transportation safety programs and levied user taxes. Extended taxes on gasoline and diesel fuels provided approximately 90% of the funding for the HTF and 80% of the funding for mass transit programs.⁷⁰ Other extended taxes were levied on heavy trucks, truck tires, gasohol, and fuel from natural or petroleum gas.

On March 4, 2011, President Obama signed H.R. 662, the Surface Transportation Extension Act of 2011 (P.L. 112-5). This law extended federal-aid highway, highway safety, motor carrier safety transit, and other programs funded out of the HTF through September 30, 2011.

On September 13, 2011, the House approved H.R. 2887, Surface and Air Transportation Programs Extension Act of 2011, which extended through March 31, 2012, existing surface transportation programs and the motor fuel, heavy truck, and truck tire taxes that support the HTF.⁷¹ On September 15, 2011, the Senate approved H.R. 2887.⁷² On September 16, 2011, President Obama signed H.R. 2887 (P.L. 112-30).⁷³

On November 4, 2011, Senators Barbara Boxer and James Inhofe introduced a two-year reauthorization of U.S. surface transportation programs at current funding levels, Moving Ahead for Progress in the 21^st Century Act or (MAP-21).⁷⁴ This bill would also have made make substantial changes to the structure, formulas, and funding distribution of the federal highway program. By February 7, 2012, all committees of jurisdiction had marked up their titles. On March 1, 2012, these titles were folded into S.Amdt. 1761 to S. 1813.

On March 30, 2012, President Obama signed H.R. 4281, Surface Transportation Extension Act of 2012 (P.L. 112-102), which extended the federal surface transportation programs and financing through June 30, 2012. On June 29, 2012, President Obama signed H.R. 6064, Temporary Surface Transportation Extension Act of 2012 (P.L. 112-140), which extended the surface transportation programs and taxes through July 6, 2012.

On July 6, 2012, President Obama signed H.R. 4348, Moving Ahead for Progress in the 21^st Century Act or Map-21 (P.L. 112-141). This law authorized appropriations for the federal surface transportation programs through October 1, 2014, expenditure authority for the HTF, and the authorization of existing highway taxes, including gasoline and diesel taxes, through September 30, 2016. The extended gasoline tax rate was 18.4 cents per gallon and the extended diesel tax rate was 24.4 cents per gallon. These rates include a 0.1 cent per gallon tax levied and deposited in the LUST Trust Fund.

Author Contact Information

Previous versions of this report were authored by James M. Bickley, now retired, and Pamela J. Jackson, specialists in Public Finance.

² See 26 USC 4081(a)(2)(A). The tax on gasoline used as aviation fuel is 19.3 cents per gallon.

³ For exemption terms, see 26 USC 4041.

⁴ For more information, see CRS Report R41869, The Donor-Donee State Issue in Highway Finance, by Robert S. Kirk; and U.S. Federal Highway Administration, "Motor Fuel and Highway Trust Attribution," at http://www.fhwa.dot.gov/policyinformation/motorfuel/aboutmf.cfm.

⁵ See U.S. Government Accountability Office, Highway Trust Fund: Options for Improving Sustainability and Mechanisms to Manage Solvency, GAO-09-845T, June 25, 2009, p. 4, at http://www.gao.gov/new.items/d09845t.pdf; and CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett.

⁶ For more information, see CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett.

⁷ See 26 USC 4081(a)(2)(B).

⁸ For more information see U.S. Congress, Joint Committee on Taxation, Present Law and Background Information on Federal Excise Taxes, committee print, 111^th Cong., 2^nd sess., January 2011, JCS-1-11 (Washington: GPO, 2011), pp. 18-19.

⁹ See testimony of Kim Cawley, Congressional Budget Office, in U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013, p. 3, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44434-HighwayTrustFund_Testimony.pdf.

¹⁰ For an example of these discussions, see U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013.

¹¹ For a complete list of motor fuels tax rates, see IRS Form 720 (Quarterly Federal Excise Tax Return), at http://www.irs.gov/pub/irs-pdf/f720.pdf.

¹² Internal Revenue Code Sections 4081(a)(2)(A)(i) and 4081(a)(2)(B).

¹³ American Petroleum Institute (API), State Motor Fuel Taxes Summary, October 21, 2013, at http://www.api.org/oil-and-natural-gas-overview/industry-economics/~/media/Files/Statistics/state-motor-fuel-taxes-report-summary.pdf. API also publishes a more detailed state-by-state analysis of excise taxes and other fuel inspection taxes and fees in American Petroleum Institute (API), State Motor Fuels One Pagers, October 8, 2013, at http://www.api.org/oil-and-natural-gas-overview/industry-economics/~/media/Files/Statistics/StateMotorFuel_OnePagers.pdf.

¹⁴ See U.S. Department of Transportation, "Motor Fuel Tax Compliance Outreach -- FAQs," at http://www.fhwa.dot.gov/motorfuel/faqs.htm.

¹⁵ See American Automobile Association (AAA), Daily Fuel Gage Report, at http://fuelgaugereport.opisnet.com/ index.asp.

¹⁶ See testimony of Kim Cawley, Congressional Budget Office, in U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013, p. 2, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44434-HighwayTrustFund_Testimony.pdf.

¹⁷ For example, see U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, How the Financial Status of the Highway Trust Fund Impacts Surface Transportation Programs, 113^th Cong., 1^st sess., July 23, 2013.

¹⁸ See testimony of Kim Cawley, Congressional Budget Office, in U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44434-HighwayTrustFund_Testimony.pdf.

¹⁹ Ibid.

²⁰ Ibid., p. 1.

²¹ See testimony of Kim Cawley, Congressional Budget Office, in U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013, p. 5, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44434-HighwayTrustFund_Testimony.pdf.

²² For more analysis on this issue, see CRS Report R40431, Federalism Issues in Surface Transportation Policy: Past and Present, by Robert Jay Dilger.

²³ For example, see Emily Goff, Empowering the States by Turning over the Federal Highway Program, The Heritage Foundation, November 15, 2013, at http://www.heritage.org/research/reports/2013/11/impact-of-turning-over-the-federal-highway-program-to-the-states, and Heritage Action, House Key Votes: Co-Sponsorship of the Transportation Empowerment Act, November 14, 2013, at http://heritageaction.com/key-votes/co-sponsorship-transportation-empowerment-act/.

²⁴ Representative Scott Garrett (NJ), "Rep. Garrett Reintroduces STATE Act: A Taxpayer-Friendly Solution for Infrastructure Funding," press release, March 12, 2013, at http://garrett.house.gov/press-release/garrett-reintroduces-state-act-taxpayer-friendly-solution-infrastructure-funding.

²⁵ See Representative Earl Blumenauer (OR-3), "Blumenauer Joined by Leaders in Transportation, Commerce, Labor, Construction to Introduce UPDATE Act to Fund Infrastructure," press release, December 4, 2013, at http://blumenauer.house.gov/press-releases/blumenauer-joined-by-leaders-in-transportation-commerce-labor-construction-to-introduce-update-act-to-fund-infrastructure/. Official revenue estimates for legislation are conducted by the Joint Committee on Taxation (JCT).

²⁶ See Section 2 of H.R. 3636.

²⁷ See ibid. and American Society of Civil Engineers, Failure to Act, at http://www.asce.org/failuretoact/. Previous reports by ASCE reached similar conclusions that higher levels of spending were necessary to meet America's economic and transportation needs.

²⁸ For example, see Evan Soltas, "The Myth of the Falling Bridge," Bloomberg Online, April 8, 2013, at http://www.bloomberg.com/news/2013-04-08/the-myth-of-the-falling-bridge.html; and Charles Marohn, ASCE and the Infrastructure Cult, Strong Towns, December 12, 2011, http://www.strongtowns.org/journal/2011/12/12/best-of-blog-asce-and-the-infrastructure-cult.html#.UuaFJbQo5zk.

²⁹ See U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, Financial Status of the Highway Trust Fund, 113^th Cong., 1^st sess., July 23, 2013.

³⁰ Various indexes could be used to adjust for inflation. The most commonly used index is the U.S. Bureau of Labor Statistics' consumer price index (CPI), which, for example, is used to adjust certain aviation user fees. Using the CPI, the inflation-adjusted tax rate on gasoline would increase from 18.3 cents per gallon to approximately 29-30 cents per gallon, and the tax rate on diesel would increase from 24.4 cents per gallon to 39 cents per gallon. CRS analysis of tax rates in the Omnibus Budget Reconciliation Act of 1993, P.L. 103-66, adjusted for inflation using Consumer Price Index for All Urban Consumers (CPI-U) for all items at http://www.bls.gov/cpi/data.htm.

³¹ Revenue Act of 1932, P.L. 154, 72^nd Congress, approved June 6, 1932.

³² Act to Extend the Gasoline Tax for One Year, to Modify Postage Rates on Mail Matter and for other Purposes, P.L. 73, 73^rd Congress, approved June 16, 1933.

³³ National Industrial Recovery Act, P.L. 67, 73^rd Congress, approved June 16, 1933.

³⁴ Revenue Act of 1934, P.L. 216, 73^rd Congress, approved May 10, 1934.

³⁵ Revenue Act of 1940, P.L. 656, 76^th Congress, approved June 25, 1940.

³⁶ Revenue Act of 1941, P.L. 250, 77^th Congress, approved September 20, 1941.

³⁷ Revenue Act of 1951, P.L. 183, 82d Congress, approved October 20, 1951.

³⁸ Excise Tax Reduction Act of 1954, P.L. 324, 83^rd Congress, approved March 31, 1954.

³⁹ Tax Rate Extension Act of 1955, P.L. 18, 84^th Congress, approved March 30, 1955.

⁴⁰ Tax Rate Extension Act of 1956, P.L. 458, 84^th Congress, approved March 29, 1956.

⁴¹ Act to Amend the Internal Revenue Code of 1954 to Relieve Farmers from Excise Taxes in the Case of Gasoline and Special Fuels Used on Farms for Farming Purposes, P.L. 266, 84^th Congress, approved April 12, 1956.

⁴² Federal-Aid Highway and Highway Revenue Act of 1956, P.L. 627, 84^th Congress, approved June 29, 1956.

⁴³ Ibid.

⁴⁴ Federal-Aid Highway Act of 1959, P.L. 86-342, approved September 21, 1959.

⁴⁵ Federal-Aid Highway Act of 1961, P.L. 87-61, approved June 29, 1961.

⁴⁶ Federal-Aid Highway Act of 1970, P.L. 91-605, approved December 31, 1970.

⁴⁷ Federal-Aid Highway Act of 1976, P.L. 94-280, approved May 5, 1976.

⁴⁸ Surface Transportation Assistance Act of 1978, P.L. 95-599, approved November 6, 1978.

⁴⁹ Surface Transportation Assistance Act of 1982, P.L. 97-424, approved January 6, 1983.

⁵⁰ Superfund Revenue Act of 1986, P.L. 99-499, approved October 17, 1986.

⁵¹ Internal Revenue Service Announcement 90-82, released June 27, 1990.

⁵² Surface Transportation and Uniform Relocation Assistance Act of 1987, P.L. 100-17, approved April 2, 1987.

⁵³ Omnibus Budget Reconciliation Act of 1990, P.L. 101-508, approved November 5, 1990.

⁵⁴ This act also instituted a new 2.5-cent per gallon tax on fuels used in rail transportation effective on December 1, 1990. Rail transportation generally uses diesel fuel. All revenues from this new tax go to general fund revenues with the tax scheduled to expire on October 1, 1995.

⁵⁵ Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991, P.L. 102-240, approved December 18, 1991.

⁵⁶ Omnibus Budget Reconciliation Act of 1993, P.L. 103-66, approved August 10, 1993.

⁵⁷ Taxpayer Relief Act of 1997, P.L. 105-34, approved August 5, 1997.

⁵⁸ A technical correction contained in the Transportation Equity Act for the 21^st Century (discussed later in this report) provides that deposits are to be equal to 2.86 cents per gallon rather than the 2.85 cents provided in the 1997 Act.

⁵⁹ Ibid.

⁶⁰ For additional information and a discussion of the LUST tax, see CRS Report RS21201, Leaking Underground Storage Tanks (USTs): Prevention and Cleanup, by Mary Tiemann.

⁶¹ Extension of the Leaking Underground Storage Tank Trust Fund Financing Rate, P.L. 109-6, approved March 31, 2005.

⁶² Transportation Equity Act for the 21^st Century, P.L. 105-178, approved June 9, 1998.

⁶³ For an additional historical perspective on extension legislation, see CRS Report RS21621, Surface Transportation and Aviation Extension Legislation: A Historical Perspective, by John W. Fischer and Robert S. Kirk.

⁶⁴ The American Jobs Creation Act of 2004 (P.L. 108-357) replaced the tax on tires from one based on tire weight to a tax based on tire load capacity. This legislation also added definitions of "taxable tires," "bias ply tires," and "super single tires." Additional clarification of the definition for "super single tires" was provided with passage of the Energy Policy Act of 2005.

⁶⁵ A characteristic of the HTF is that it was set up as a pay-as-you-go fund. When the creation of the HTF was under consideration, there were concerns that the proceeds of the taxes dedicated to the HTF might prove insufficient to make reimbursements when claims were made. The bill under consideration was amended to require a comparison of current and future resources with existing and projected unpaid authorizations and to adjust the amounts apportioned for highways if the two are out of balance. This comparison is referred to as the Byrd Amendment or the Byrd Test. The exact requirements of the Byrd Test have changed several times since it was established in 1956. See Federal Highway Administration, "Legislative Affairs and Policy Communications," at http://www.fhwa.dot.gov/policy/olsp/financingfederalaid/fund.cfm#d.

⁶⁶ Heather M. Rothman, "Highway Funding Extension Bill Cleared, With Provisions for AMT Relief, Expensing," Daily Tax Report, October 1, 2004, No. 190, p. G-11.

⁶⁷ Surface Transportation Extension Act of 2005, Part I, P.L. 109-14, approved May 31, 2005. Part II, P.L. 109-20, approved July 1, 2005. Part III, P.L. 109-35, approved July 20, 2005. Part IV, P.L. 109-37, approved July 22, 2005. Part V, P.L. 109-40, approved July 28, 2005. Part VI, P.L. 109-42, approved July 30, 2005.

⁶⁸ CRS Report R42877, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William J. Mallett.

⁶⁹ Congressional Budget Office, The Highway Trust Fund and Paying for Highways, Statement of Joseph Kile, Assistant Director for Microeconomic Studies, before the Senate Committee on Finance, May 17, 2011, p. 7.

⁷⁰ Detailed information about some of this legislation is available in CRS Report R42445, Surface Transportation Reauthorization Legislation in the 112^th Congress: MAP-21, H.R. 7, and H.R. 4348 -- Major Provisions, coordinated by Robert S. Kirk.

⁷¹ Adam Snider, "House Passes Transportation Stopgap But Coburn Could Slow Senate Floor Action," Daily Report for Executives, September 14, 2011, p. A18.

⁷² Adam Snider, "Senate OKs Transportation Policy Stopgap After Promise for Long-Term FAA Measure," Daily Report for Executives, September 16, 2011, p. A27.

⁷³ Adam Snider, "Obama Signs Highway, FAA Stopgap Bill, Avoiding Lapse in Aviation, Motor Fuel Taxes," Daily Report For Executives, September 19, 2011, p. G5.

⁷⁴ "Senators Boxer, Inhofe Unveil Surface Transportation Reauthorization Bill," Daily Report for Executives, November 4, 2011, p. 1.