WASHINGTON — The Senate Finance Committee is scheduled to vote Thursday on a bill that would extend the authority to spend from the Highway Trust Fund through the end of the calendar year.
The legislation, called the Preserving America's Transit and Highways (PATH) Act, would transfer revenues to the HTF from the general fund in order to make sure the fund is solvent for the rest of 2014. To pay for the general fund transfers, the proposal would raise about $9 billion through fiscal 2024 by making tax changes.
The HTF, which is primarily stocked by motor fuel taxes, reimburses states for surface transportation projects. It is expected to become insolvent later this summer absent any congressional action. The current law that authorizes spending from the fund expires Sept. 30. The PATH Act would provide a short-term authorization extension, through Dec. 31.
There are five "tax compliance and modernization provisions" in the bill that would raise revenue to pay for transferring money to the HTF. One of the tax changes would be to increase the cap on the heavy vehicle use tax after June 30, 2015 to $1,100 per year for vehicles over 97,000 pounds. Another provision would require information returns on mortgage interest returns to include additional information after 2014.
The PATH Act would also allow taxes to be assessed within six years after a taxpayer files a return that significantly overstates the net cost of property. Additionally, it would require the State Department, starting in 2015, to deny new passports or passport renewals to people with more than $50,000 of seriously delinquent tax debts, and would allow the department to revoke passports previously issued to those people. The bill would also generally require inherited retirement savings accounts to be distributed within five years of the account holders' deaths.
Senate Finance Committee Chairman Ron Wyden, D-Ore., who put forward the bill, said in a statement that "moving the PATH Act forward is an imperative first step as the committee works together on a sustainable, long-term solution. Failure to act now could lead to a transportation shutdown, leaving our roads in disrepair and putting thousands of hard-working Americans out of their jobs."
The top Republican on the committee, Sen. Orrin Hatch of Utah, was critical of the PATH Act.
"In order to find a real solution to resolve financing for the Highway Trust Fund, the committee must act in a bipartisan manner and forge compromise by including a sizeable amount of reductions in wasteful and low-priority spending," Hatch said. "Unfortunately, even after weeks of negotiating, today's chairman's mark does not accomplish this goal."
House Republicans have also put forth a proposal that would provide a short-term patch for the HTF. That plan would fund highway and transit projects with savings from stopping most mail deliveries on Saturdays.
How a long-term surface transportation bill would be paid for remains to be seen. Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., last week proposed raising the federal gasoline and diesel taxes by 12 cents per gallon over the next two years. However, incoming House Majority Leader Kevin McCarthy, R-Calif., and President Obama both oppose a gas tax increase.
Fitch Ratings on Tuesday called the Murphy-Corker plan a good first step, but said that there need to be other sustainable long-term revenue sources because cars will become more fuel-efficient and consume less gas. Fitch believes that tolling could be such a revenue source.
