Historical Perspective

The Highway Trust Fund (HTF) was established in 1956 (Public Law 84-627) to ensure a dependable source of Federal funding to support highway programs. Prior to 1956, motor fuel and vehicle taxes went to the General Fund; although highway funding was provided from the General Fund, there was no relationship between fuel tax receipts and highway funding. Since 1956, legislation has periodically extended taxation of motor fuels and the HTF. The Transportation Equity Act for the 21st Century (TEA-21) extended the HTF through September 30, 2005.

The HTF currently contains two accounts: the Highway Account and the Mass Transit Account; this document only concerns funds in the Highway Account. The income and outlays for transportation have increased steadily over time. The closing balance of funds in the Highway Account of the HTF remained at around $10 billion from 1983 through 1995. In 2000, the closing balance in the Highway Account was over $22.5 billion. It is necessary to maintain a balance of funds in the HTF to be able to meet unpaid commitments. This balance is not surplus funds because the HTF functions as a reimbursable program and must maintain funds for reimbursing obligations. The closing balance (income ­ outlays = closing balance) is shown in the following chart for 1957 through 2000 (the latest available data).

Graph of the Highway Trust Fund status showing the increase of funds in billions of dollars from 1958 through 2000  - Source US DOT Highway Statistics Table FE-210

Funds from the Highway Account are distributed to the States for highway use. Under TEA-21, State-reported motor fuel data have been used, along with other factors, in the apportionment of these funds for the Surface Transportation Program (STP), the National Highway System (NHS), the Interstate Maintenance (IM) program, and the Minimum Guarantee. 1

The Federal Highway Administration (FHWA) uses motor fuel usage data, supplied by the States, to determine where (i.e., in which State) motor fuel is being expended for on-highway use. The current process has been in place since 1985. This process for attributing on-highway motor fuel usage to the States is explained in the section "Attribution and Apportionment."


1 The Minium Guarantee program ensures that each State receives at least 90.5 percent of its share of contributions to the Highway Account of the HTF.



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