Congress is taking steps to avoid a Sept. 30 shutdown of the federal highway program, but further action still is needed. The Senate Finance Committee has approved legislation that extends the motor fuels tax for five months. The bill, approved Sept. 17 by a voice vote, also has ethanol fuel provisions that benefit the Highway Trust Fund.

Young introduces 5-month and 6-month extensions in House

In the House, leaders of the Transportation and Infrastructure Committee on Sept. 16 introduced two bills to extend the highway program itself. One renews the program for six months; the other, for five months. Transportation and Infrastructure Chairman Don Young (R-Alaska) said, "An extension will give our committee and the Senate committees the needed time to complete our versions of this vital legislation."

The current transportation statute, the Transportation Equity Act for the 21st Century, runs out on Sept. 30, and if no new legislation is enacted by that date, the Federal Highway Administration would be barred from providing new funding for road projects.

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The Finance Committee's move to extend the fuel taxes that flow into the trust fund now must be followed by action by the Environment and Public Works Committee to extend the highway program itself. The environment panel had scheduled a vote for Sept. 18 on a five-month highway program extension, but that meeting was postponed because of the expected Hurricane Isabel.

The Finance panel's ethanol actions are also important. Ethanol fuels are taxed at 5.2 per gallon less than gasoline and diesel fuels. The committee voted to eliminate the tax differential, which would add about $1.6 billion a year to the Highway Trust Fund. But the committee also left gasohol refiners unharmed, by establishing a tax credit that equals the gasohol-gasoline tax spread.

Grassley's committee approves ethanol tax changes

The committee also approved shifting to the trust fund the 2.5 per gal. in existing gasohol taxes that now goes to the general fund.

Finance Chairman Charles Grassley (R-Iowa) said the bill should add more than $2 billion a year to the trust fund. But he adds, "We should remember, however, that temporarily extending the highway bill only puts a Band-Aid on the problem of agreeing upon funding for our country's transportation needs."


(Photos courtesy of Offices of Rep. Don Young and Sen. Charles Grassley)