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Financing Federal-aid Highways


1TEA-21 was enacted on June 9, 1998. A technical correction act to the TEA-21 was included as Title IX of P.L. 105-206, the Internal Revenue Restructuring and Reform Act of 1998, enacted July 22, 1998. Title IX is cited as the "TEA 21 Restoration Act."

2The Federal Motor Carrier Safety Administration was established as a separate operating administration within the DOT on January 1, 2000, pursuant to the Motor Carrier Safety Improvement Act of 1999 (P.L. 106-159).

3The Pipeline and Hazardous Materials Safety Administration (PHMSA) was created under the Norman Y. Mineta Research and Special Programs Improvement Act (P.L. 108-426). President Bush signed the legislation into law on November 30, 2004.

4The Research and Innovative Technology Administration (RITA) was created under the Norman Y. Mineta Research and Special Programs Improvement Act (P.L. 108-426). President Bush signed the legislation into law on November 30, 2004.

5The Legislative Reorganization Act of 1946.

6Although there are additional steps between committee approval and consideration on the floor of Congress, such as passing through the Rules Committee in the House, they are omitted for brevity.

7These activities are authorized in Titles I, V, and VI of the SAFETEA-LU. For the purposes of this report, activities in those titles not administered by the FHWA are not considered part of the FAHP.

823 U.S.C. 144.

9P.L. 109-59, Section 1117.

1023 U.S.C. 148.

11P.L. 109-59, Section 1114(e)

1223 U.S.C. 106 (g), (h), and (i).

13Although authorization amounts are set for each program, Congress also established a "trigger" mechanism to keep highway authorizations in tune (aligned) with revenues (highway user taxes paid into the Highway Account of the Highway Trust Fund). This "revenue aligned budget authority" provision is described in detail in the "Appropriations" section.

14Two other forms of budget authority exist, borrowing authority and authority related to the use of offsetting receipts and collections. These are not discussed in this document.

15P.L. 109-59, Section 1405.

1623 U.S.C. 104(b).

1723 U.S.C. 118(a).

18P.L. 93-344, Section 401(d)(1)(B).

1923 U.S.C. 121.

2023 U.S.C. 104(f)(1).

2123 U.S.C. 104(f)(2). The funds must be made available by the States to MPOs designated to carry out provisions of 23 U.S.C. 134.

22Section 104(a) of Title 23, U.S.C. was amended by Section 1103 of SAFETEA-LU to provide direct authorizations for administrative expenses. Previously, an amount (up to 1.5 percent under TEA-21) was deducted from designated programs for administering the provisions of Title 23, U.S.C. This "administrative takedown" was used to pay salaries of FHWA employees, travel expenses, supplies, office space, etc.

2323 U.S.C. 104(b)(1)(A)

2423 U.S.C. 140(b).

2523 U.S.C. 118(a).

2623 U.S.C. 505.

2723 U.S.C. 133 (d)(2).

2823 U.S.C. 133(d)(3)(A).

2923 U.S.C. 133(d)(3)(B).

3023 U.S.C. 133(d)(3)(A).

3123 U.S.C. 144(g)(2). A Federal-aid highway is any highway eligible for Federal assistance under Chapter 1 of Title 23 other than a highway functionally classified as a local road or rural minor collector.

32P.L. 109-59, Section 1101(b).

33P.L. 109-59, Section 1702.

34P.L. 109-59, Section 1934.

3523 U.S.C. 105.

3623 U.S.C. 118(b)(2).


3823 U.S.C. 144(e).

3923 U.S.C. 104 (g) and (k)

4023 U.S.C. 106(a).

4123 U.S.C. 120.

4223 U.S.C. 120(a).

4323 U.S.C. 120(b).

4423 U.S.C. 120(e).

45Funds authorized under Section 1502 of SAFETEA-LU, as well as up to 10% of a State's NHS, IM, STP, and/or CMAQ apportionments, may be used to fund Highways for LIFE projects at a Federal share of up to 100% of the cost of construction of the project.

4623 U.S.C. 143.

4723 U.S.C. 120(c).

48P.L. 105-178, Section 1302(2).

4923 U.S.C. 121(b)

5023 U.S.C. 323.

5123 U.S.C. 120(j)

5223 U.S.C. 120(k).

5323 U.S.C. 133(e)(5)(C)(ii).

5423 U.S.C. 120(l).

5523 U.S.C. 206(f)

5623 U.S.C. 121(c).

57P. L. 101-453.

58P.L. 109-59, Section 8003.

59P.L. 109-59, Section 1102(b).

60P.L. 109-59, Section 1102

61P.L. 109-59, Sections 1102(c)(1) and (2).

62P.L. 109-59, Section 1102(c)(3).

63P.L. 109-59, Section 1102(c)(4).

64P.L. 109-59, Section 1102(c)(5).

65P.L. 109-59, Section 1102(e)

66P.L. 109-59, Section 1102(f).

67The amount authorized for the National Scenic Byways program in SAFETEA-LU was $30 million, but the authorization was reduced to $29,700,000 by a 1% rescission required by section 3801 of Division B of P.L. 109-148.

68P.L. 109-59, Section 1102(c)(6).

679P.L. 109-59, Section 1102(d).

70P.L. 93-344, enacted July 12, 1974.

71DOT appropriations acts had various titles over the years. For purposes of this book, "DOT Appropriations Act" is used as a generic term to describe annual DOT appropriations acts, regardless of title.

72FHWA received $20 million in FY 2006 appropriated budget authority for the Appalachian Development Highway System (ADHS) in P.L. 109-115, the Department of Transportation Appropriations Act, but this amount was subject to the 1% across-the-board cut described in the next endnote. In addition to ADHS, there were supplemental 2006 appropriations for the Emergency Relief Program of $2,750,000,000 in P.L. 109-148 and $702,362,500 in P.L. 109-234.

73The Department of Defense Appropriations Act, 2006 (P.L. 109-148), contains a 1 percent across-the-board rescission of obligation limitation imposed for FY 2006. The resulting $360 million reduction brings the FY 2006 Federal-aid obligation limitation down to $35.672 billion.

74Balanced Budget and Emergency Deficit Control Act of 1985 and Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987.

75FY 2006 actuals as shown in the President's 2008 Budget. Note: Interest on debt included in mandatory category.

76The time period and the coverage of the spending caps have been modified several times since enactment of the BEA1990.

77The BEA1990 set a single cap for all discretionary spending. Subsequently, the Budget Enforcement Act of 1997 broke the discretionary cap into three segments—defense discretionary spending, violent crime reduction spending, and all other discretionary spending, with the Federal-aid Highway Program falling in the last category. The TEA-21 established separate discretionary spending caps for the highway and transit programs. The firewall for defense spending expired at the end of FY 1999, and the violent crime reduction category was eliminated after FY 2000.

78SAFETEA-LU section 8001 codified at 2 U.S. C. 901. The only other firewall remaining is for conservation spending which is scheduled to expire after FY 2006.

79To effect the House rule, a point of order is made during floor proceedings to assert that the rules of procedure are being violated. The point of order halts proceedings while the presiding officer rules on whether or not it is valid. If the point is found to be valid, consideration of the bill, resolution or amendment would be halted.

8023 U.S.C. 110.

81The Federal-aid Primary and Secondary Systems were the roads eligible for Federal assistance at the time.

82A portion of the fuel excise tax (4.3 cents per gallon) will continue to be imposed after that date, but it will not be credited to the Highway Trust Fund.

83The Surface Transportation Assistance Act of 1982 provided that one-ninth (about 1 cent per gallon) of the fuel tax revenue would be deposited in the Mass Transit Account. This provision has been amended several times. Effective October 1, 1997, the deposit to the Mass Transit Account is 2.86 cents per gallon of most taxable highway motor fuels.

84Effective January 1, 1987, the Leaking Underground Storage Tank Trust Fund was established and an additional tax of 0.1 cent per gallon on highway and other fuels was dedicated to this fund.

85In the case of gasohol and certain other alcohol blends, the 2.5 cents per gallon continued to be directed to the General Fund.

86Motor Carrier Safety Act of 1984; codified in 49 U.S.C. 521.

8726 U.S.C 9503(b)(5).

8826 U.S.C. 9601. While the law requires deposits to be made monthly, the practice is to make such deposits twice each month.

8926 U.S.C. 9503(f).

90The Byrd Amendment is named for Senator Harry Flood Byrd of Virginia who was a member of the Senate Finance Committee at the time the Highway Revenue Act of 1956 was being debated. His concern for the future solvency of the Highway Trust Fund led to the amendment of the bill.

91P.L.109-59, section 11102

9226 U.S.C. 9503(d).

93The current version of the Byrd Test, which allows 4 years of future receipts to be "counted on" does not serve as an effective safeguard against Highway Account cash shortfalls. Recent analyses show that the Highway Account could experience significant cash shortfalls without triggering the Byrd Test's reduction of highway apportionments.

94This is a rare occurrence. The last such action was in 1980 when an additional $1.4 billion in liquidating cash was provided by the Supplemental Appropriations and Rescission Act, 1980 (P.L. 96-304).

95Previously called the Aquatic Resources Trust Fund

9626 U.S.C. 9503(c).

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