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Highway Trust Fund

Financial Report for Fiscal Year 2004

Management's Discussion and Analysis

Table of Contents | Management's Discussion and Analysis | Financial Section | Appendices

 

The Fund

The Highway Trust Fund (HTF) was established by the Highway Revenue Act of 1956 to ensure a dependable source of financing for the National System of Interstate and Defense Highways. Although the fund was initially created to support construction of the Interstate Highway system, the HTF now funds a wide range of transportation-related projects in support of the country's changing needs. The HTF provides funding to build, maintain, and improve the nation's roads and transit systems. It also provides funding for safety programs to reduce deaths and property loss from highway and other surface transportation accidents.

Under its authorizing legislation, the HTF is to be funded from excise taxes on motor fuels, tires, truck and trailer sales and heavy vehicle use. The HTF is managed by the Department of the Treasury (Treasury). The Treasury is responsible for depositing excise taxes into the HTF, which is a separate trust fund. The funds held by Treasury are considered as the Corpus of the HTF, and any funds not needed for expenditures are to be invested. When funds are transferred from Treasury to a HTF agency's appropriation, they are still considered part of the HTF, but not the Corpus. Until October 1998, the HTF earned interest on its investments. The Transportation Equity Act for the 21st Century (TEA-21), Public Law (PL) 105-178 discontinued the earning of interest income for the HTF and the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (PL 105-277) specified that the HTF be invested in non-interest bearing Treasury non-marketable securities.

The HTF is made up of two accounts, the Highway Account (HA) and the Mass Transit Account (MTA). The MTA receives 2.86 cents per gallon of motor fuel sold, .01 cent per gallon of motor fuel sold goes to the Leaking Underground Storage Tank Trust Fund, and the remaining amount of the taxes collected is credited to the HA. Twice each month, Treasury distributes among various trust funds and the General Fund their estimated share of all excise taxes collected for that portion of the month. When the quarterly excise tax returns are filed and excise tax receipts are certified by the Internal Revenue Service, Treasury adjusts the estimates to reflect certified tax collections.

TEA-21 was the most recent long-term authorization act for the programs funded by the HTF. TEA-21 expired on September 30, 2003. Six subsequent legislative acts have extended the TEA-21 provisions through May 31, 2005, pending passage of a new authorization act.

Each fiscal year (FY), Congress appropriate funds from the HTF to the Department of Transportation (Department) to fund six Department agencies (modes) and/or certain agency programs—Federal Highway Administration (FHWA), Federal Transit Administration (FTA), Federal Motor Carrier Safety Administration (FMCSA), Federal Railroad Administration (FRA), National Highway Traffic Safety Administration (NHTSA), and Bureau of Transportation Statistics (BTS). Monies appropriated from the HTF to these agencies are used to pay for the operations of these administrations and to liquidate obligations made with contract authority previously used to award grants. In each appropriation bill, Congress also authorizes the apportionment of contract authority to fund the award of grants to states, local governments, and other organizations. Within the Department, HTF activities are managed primarily by the individual operating agencies with oversight from the Department's Office of Budget and Financial Programs and FHWA.

In FY 2004, operations of HTF modes were impacted by the lack of long-term authorizing legislation and the incremental funding of the programs. For the first five months of FY 2004, HTF modes were operating under a continuing resolution that limited spending to previous year levels. Program authorizations were extended in a series of six short-term extensions of TEA-21. As a result, issuance of grants were delayed, new programs and improvements to existing programs could not be implemented, and achievement of goals was hindered.

The chart below shows revenues deposited in the HTF for the last five years.

Graph showing revenues deposited in the HTF for the last five years.D

In FY 2004, FRA did not receive any funding from the HTF nor did it award any grants from prior year funds. As a result, though one of the six modes with programs funded from the HTF, FRA programs and accomplishments are not highlighted in this report.

The following charts depict the percentage of dollars distributed from the HTF Corpus to the HA and MTA for FY 2004:

Two pie charts. The first pie chart shows the percentage of dollars distributed from the HTF Corpus to the HA and MTA for fiscal year 2004. The second pie chart shows the fiscal year 2004 transfers received from HTF Corpus by Modal Agency.D

The HTF supports initiatives such as highway safety, environment, emergency relief, motor carrier safety, research and development (R&D), transportation statistics, use of safety belts, and preventing alcohol-impaired driving. The HTF has also recently begun to support automated toll collection, research into “smart” emergency vehicle access systems, transportation analysis, and various vehicle warning systems. All of these activities effectively contribute to supporting the Department's strategic objectives to eliminate transportation-related deaths and injuries, provide accessible and efficient transportation, protect the natural environment, and ensure the security of the U.S. transportation system.

 

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