Senate Finance Committee Considers Highway Funding Legislation

Proposal includes a $750-million transfer from the Leaking Underground Storage Tank (LUST) Trust Fund to the Highway Trust Fund.

June 30, 2014

WASHINGTON – Last week the U.S. Senate Finance Committee began a markup of legislation proposed by Committee Chairman Ron Wyden (D-OR) that would fund highway projects until the end of 2014. Committee votes on the bill, however, have been postponed until after the Fourth of July recess to give members more time to negotiate a bipartisan compromise with their House of Representatives counterparts.

Conceding that the broad reform needed to stabilize the highway funding system long-term is virtually impossible to achieve before the Highway Trust Fund is completely depleted (Department of Transportation estimates indicate the fund is on track to go bankrupt sometime in July), senators are debating a stopgap measure that would keep the fund solvent until year’s end. In addition to the ongoing disagreements between Democrats and Republicans over possible solutions, the upcoming November elections have made senators reluctant to vote on controversial legislation.

Wyden’s proposal would provide approximately $7.6 billion to fund highway projects until December 31, 2014, through several revenue-raising measures, including an adjustment in taxation of inherited IRA and 401k plans, a $750 million transfer from the Leaking Underground Storage Tank (LUST) Trust Fund to the Highway Trust Fund — which NACS opposes — and a modification of mortgage-interest deduction documentation. In addition, the package would modify the trust fund’s tax treatment of liquefied natural gas motor fuels, dropping the LNG fuel tax to 14.1 cents a gallon to reflect energy equivalence to diesel.

The stopgap measure would allow Congress to postpone the larger debate over a long-term funding fix until after the November elections. With less political pressure after November and more time to consider proposals for comprehensive reform, it may be easier for senators to reach a long-term solution.

The Senate Finance Committee has indicated that it will work with the House Ways and Means Committee to develop a short-term funding solution that will pass both houses of Congress. House Ways and Means Committee Chairman Dave Camp (R-MI) commented that “there is no way [the Wyden proposal’s] tax hikes to pay for more spending will fly in the House,” and that he intends to propose a “different approach” from that of Wyden that would extend highway funding for a longer period. Chairman Camp also said his committee plans to take up the issue again after the weeklong Fourth of July recess.

Stay tuned to NACS Daily for more developments on this issue.
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