H.R. 5021

Highway and Transportation Funding Act of 2014

Sponsor
Rep. Dave Camp

Committee
Ways and Means

Date
July 15, 2014 (113th Congress, 2nd Session)

Staff Contact
David Smentek

Floor Situation

On Tuesday, July 15, 2014, the House will consider H.R. 5021, the Highway and Transportation Funding Act of 2014, under a rule.  H.R. 5021 was introduced on July 8, 2014 by Rep. Dave Camp (R-MI), Chairman of the House Committee on Ways and Means, and Rep. Bill Shuster, Chairman of the House Committee on Transportation and Infrastructure, and referred to the Ways and Means Committee, the Transportation and Infrastructure Committee, as well as several others.  The bill was marked up by the Ways and Means Committee on July 10, 2014 and ordered reported as amended, with an the nature of a substitute, by voice vote.

Bill Summary

H.R. 5021 extends the programmatic authority and expenditure authority of the Highway Trust Fund through May 31, 2015.  Additionally, H.R. 5021 transfers $7.8 billion from the General Fund of the Treasury Department to the Highway Account of the Highway Trust Fund and $2 billion to the Mass Transit Account of the Highway Trust Fund.  H.R. 5021 also transfers $1 billion in gas-tax-funded monies in the Leaking Underground Storage Tank Trust Fund to the Highway Trust Fund.  This provision was used in the last highway funding bill.

Offsets for the transfer of funds from the Treasury Department’s General Fund come from two sources, both of which have received bipartisan and bicameral support in the past:

  • Pension Smoothing – H.R. 5021 allows single-employer defined benefit pension plans to use higher interest rates when calculating future liabilities.  This will reduce the minimum required tax-deductible employer contribution for pension plans, which will in turn increase revenues and reduce outlays.  This provision will provide a total of $6.4 billion in deficit reduction.
  • Customs User Fees – This legislation extends the passenger and conveyance processing fees and the merchandise processing fee through September 30, 2024.  This provision will provide $3.5 billion in offsetting receipts.

Background

Under current law, the federal government levies an excise tax of 18.4 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel for highway use.[1]  Federal motor fuels excise tax collections are credited to two trust funds: the Highway Trust Fund (HTF) and the Leaking Underground Storage Tank (LUST) Trust Fund.[2]  The HTF, the primary federal fund for surface transportation, is divided into two accounts: the highway account, and the mass transit account.[3]  Fuel taxes have historically provided approximately 90 percent of the receipts to the HTF.[4]  In recent years, tax collections have not kept pace with spending on federally-funded transportation projects due to the effect of inflation on both project costs the real value of non-indexed tax rates; reductions in vehicle miles travelled; and improved corporate average fuel economy (CAFE) standards.[5]  These developments have imperiled the sustainability of the fund.  According to CBO estimates, spending from the HTF is projected to be roughly $53 billion per year after FY 2014 (growing to $59 billion in 2024), while receipts coming into the HTF are projected to be approximately $39 billion per year after FY 2014.[6]  HTF outlays will exceed revenues by $167 billion over the 2015-2024 period if obligations from the fund continue at the 2014 rate.[7]  Since 2008 Congress has prevented projected HTF shortfalls by transferring $53 billion from the Treasury’s General Fund to the HTF.[8]

In 2012, President Obama signed into law H.R. 4348 (112th Congress), the Moving Ahead for Progress in the 21st Century Act, or MAP-21.  MAP-21 authorized federal surface transportation programs through September 30, 2014 and tax collection authority through September 30, 2016.[9]  To offset the cost of reauthorization, the bill transferred $18.8 billion for fiscal years 2013 and 2014[10] from the Treasury General Fund to the HTF, and $2.4 billion from the LUST Trust Fund to the HTF.[11]

The three sources of funding used to address the shortfall in the Highway Trust Fund have all received bipartisan and bicameral support in the past.[12]  Pension smoothing was included in MAP-21, has been used as an offset in the Senate unemployment insurance bills, and has received support from a majority of House and Senate Democrats.  Extensions of Customs user fees were included in the Ryan-Murray Bipartisan Budget Agreement, have been included in Senate unemployment insurance bills, and have been supported by a majority of House and Senate Democrats.  Finally, transfers from the LUST Trust Fund were included in MAP-21, and have been included in other Senate legislation proposed in the Senate.

________________
[1] Sean Lowry, “The Federal Excise Tax on Motor Fuels and the Highway Trust Fund: Current Law and Legislative History,” Congressional Research Service (Feb. 28, 2014), at 1.
[2] Id. at 1.
[3] Id. at 1.  Note: The Mass Transit Account receives 2.86 cents per gallon of fuel taxes.  The remainder goes to the highway account.s
[4] 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.
[5] Sean Lowry, “The Federal Excise Tax on Motor Fuels and the Highway Trust Fund: Current Law and Legislative History,” Congressional Research Service (Feb. 28, 2014), at 2.
[6] The Highway Trust Fund and the Treatment of Surface Transportation Programs in the Federal Budget, Congressional Budget Office (Jun. 11, 2014).
[7] The Highway Trust Fund and the Treatment of Surface Transportation Programs in the Federal Budget, Congressional Budget Office (Jun. 11, 2014).
[8] Id. at 2.
[9] Id. at 5.
[10] Note: This included $6.2 billion to the Highway Account for FY 2013; $10.4 billion to the Highway Account for FY 2014; and $2.2 billion to the Mass Transit Account for FY 2014.
[11] See Id., Table 3.
[12] http://waysandmeans.house.gov/news/documentsingle.aspx?DocumentID=387053

Cost

CBO estimates that enacting H.R. 5021 would reduce direct spending and increase revenues.  In total, those changes would reduce budget deficits in the General Fund by $9.8 billion over the 2014-2024 period.[13]  The legislation would transfer $9.8 billion from the general fund of the Treasury to the Highway Trust Fund to facilitate continued spending from that fund.[14]

________________
[13] http://www.cbo.gov/sites/default/files/cbofiles/attachments/45522-hr5021a.pdf
[14] See Id.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.