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 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.