ATTRIBUTION AND APPORTIONMENT

 

Preliminary Estimation Procedures

FHWA completes several steps in the motor fuel analysis process prior to beginning the annual State-by-State analysis. These steps include an estimation of non-highway fuel uses, public fuel uses, and gasohol consumption. The estimation models are briefly described below. The models require data from several outside sources. One major dataset is the Census Bureau's Vehicle Inventory and Use Survey (VIUS). This data set contains information on annual vehicle miles of travel, percent of off-road use, major use of the truck (agriculture, retail, etc.), engine type, and the State in which the truck is registered. VIUS does not, however, provide a fuel use breakdown between gasoline and gasohol, on-road versus off-road fuel economy, or a distribution of off-road travel by State. The VIUS is conducted every five years; the latest survey was in 1997.

The vast majority of State-reported motor fuel gallons are for on-highway use. The estimation process to determine gallons of non-highway gasoline, public fuel use, and gasohol consumption is needed to ensure consistency. The following chart summarizes the reasons these three estimation models are needed.

 
ESTIMATION MODELS

Estimation of off-highway gasoline and gasohol gallons

  • Off-highway sectors: Agriculture, construction, industrial and commercial, marine, aviation, and off-road recreation
  • Why needed: Some States have no data to begin an on-highway/off-highway analysis. Without an estiamte of off-highway gallons, the States that all motor fuel gallons would over-represent their on-highway usage, because they would have included off-highway gallons as being used on-highway

Estimation of public use of gasoline

  • Public sectors: Federal civilian, state, county, municipal
  • Why needed: Some States are unable to report on gallons of tax-exempt or fully-refunded on-highway fuel usage. Also, some States are unable to separate on-highway and off-highway public fuel usage

Estimation of gasohol gallons

  • Sectors: Gasohol by Federally-legislated percentages (i.e., 5.7%, 7.7%, 10%)
  • Why needed: Few States recognize the Federal definitions; indeed, most States gasohol as a 10% blend, and State definitions of reformulated gasoline may or may not match the Federal definition of gasohol

Estimates of off-highway fuel gallons of gasoline and gasohol include fuel used for agricultural, construction, industrial and commercial, marine, aviation, and off-road recreational purposes. It should be noted that off-highway use of diesel does not need to be estimated because FHWA motor fuels reporting procedures do not include gallons of diesel used off-highway.

FHWA estimates the public use of gasoline for the same reasons that it estimates off-road uses of gasoline. Although the Federal tax code exempts public uses of gasoline, not all States do so. Thus, it would be inconsistent to use as-reported State data without adjustment. A model was developed to estimate Federal government civilian highway gasoline usage. When States report Federal use in excess of the estimation produced by the model, the excess is assumed to generally exempt from State taxes, or taxes may be fully or partially refunded, or taxes may be imposed at reduced rates. State, county, and municipal use of gasoline is included in gasoline attribution.

Some States are able to provide data on off-highway and/or public uses of motor fuels. After the FHWA models have compiled their estimation on a State-by-State basis, FHWA applies business rules to determine which data to use.

FHWA also needs reliable estimates of gasohol consumption. The Energy Policy Act of 1992 created three types of gasohol for Federal tax purposes ­ 10, 7.7, and 5.7 percent ethanol by volume. However, few States recognize or define three types of gasohol in State legislation. This disconnect in the tax treatment of gasohol requires FHWA to estimate gasohol revenues attributed to each State using the Federal definitions since attribution is based on Federal motor fuel tax revenue. Thus, FHWA runs a nationwide model to estimate the number of gallons of ethanol used within each State. The total number of gallons of ethanol used nationwide and reported to IRS is used for comparison and for production of a final percentage of use by State.

 

 

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