The Senate Finance Committee on Sept. 21 unanimously approved legislation, “The American Infrastructure Investment and Improvement Act,” that will generate new revenues for the Highway Trust Fund’s (HTF) Highway Account to ensure the SAFETEA-LU investment commitments are fulfilled.

The measure also includes a number of tax provisions that generate new revenues for the Airport and Airway Trust Fund to support increased federal aviation investment as part of the reauthorization of the federal aviation programs that is currently moving through Congress.

The Bush Administration and the Congressional Budget Office currently project existing Highway Account revenues will fall short of supporting SAFETEA-LU’s highway investment commitments by $4.3 billion in FY 2009. That gap would widen to $5 billion if a proposal included in the Senate-passed transportation appropriations bill to provide an additional $1 billion in FY 2008 bridge program funds becomes law. If this situation is left unaddressed, Highway Account revenues could only support a FY 2009 federal highway program of $27 billion — 36 percent below the SAFETEA-LU guaranteed amount.

The HTF provisions approved by the Finance Committee would raise approximately $5.7 billion in new Highway Account revenues — more than enough to ensure the Highway Trust Fund’s solvency through FY 2009. The HTF proposal developed by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican Charles Grassley (R-Iowa) consists of provisions that would do the following:

Replenish the Highway Trust Fund for emergency expenditures paid out of the fund since 1998, such as federal responses to the Sept.11 terrorist attacks and several hurricanes.

The proposal recognizes this type of spending is more appropriately financed from the federal General Fund than the Highway Trust Fund.

Suspend motor fuel tax exemptions provided to state and local governments and certain agricultural activities for six months.

Implement additional reforms to further crack down on illegal fuel tax evasion.

Each of these mechanisms is consistent with the user fee financing principle that is the foundation for federal surface transportation program. Chairman Baucus and Senator Grassley deserve the sincere appreciation of all ARTBA members for their leadership and initiative in developing this proactive proposal.