The Transportation Equity Act for the 21st Century (TEA-21) authorized $217 bill. for surface transportation programs. TEA-21 continued the use of the Highway Trust Fund as the mechanism to account for Fed. highway user tax receipts that fund various surface transportation programs. This report discusses: the Treasury Dept.'s process for allocating highway user tax receipts to the Highway Account of the Fund; FHWA's process for estimating motor fuel usage & the contributions to the account that are attributable to highway users in each state; & the impact of these processes on the amount of highway program funds distributed to each state. Charts & tables.

The federal government collect revenues from taxes paid by highway users, mostly from those levied on gasoline and diesel fuel, and credits them to the Highway Trust Fund. Those revenues and others are subsequently used for federal spending on highways and transit. In fiscal year 2010, the trust fund's revenues totaled about $35 billion. Some policymakers and transportation analysts have expressed interest in developing new sources of funding. This new book analyzes the effects of alternative approaches to funding highways and compares the effects of current fuel taxes and of possible new taxes on the number of miles highway users drive.

The Highway Account within the Highway Trust Fund is the primary mechanism for funding fed. highway programs. The account -- administered by the Fed. Highway Admin. (FHWA) -- channels about $33 billion in highway user excise taxes annually to states for highway projects. A shortfall in the balance became imminent in Aug. 2008. In Sept., Congress passed legislation to provide $8 billion to replenish the account, but officials anticipate the account could reach a critical stage again in FY 2009. This report: (1) describes the events that led to the decline in the account balance; and (2) identifies potential improvements in mechanisms to manage account solvency. Includes strategies that could be used to better align account outlays and revenues.