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1 1 (November 1, 2019)

handle is hein.crs/bllhgwy0001 and id is 1 raw text is: Congressional _____ SResearch Service informing the IegiAative debate since 1914 $7.569 Billion Highway Rescission Approaches November 1, 2019 Current funding for the Federal-Aid Highway Program is authorized through September 30, 2020, by the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94). However, Section 1438 of the act directs that on July 1, 2020, $7.569 billion of the unobligated balances of highway formula funds apportioned to the states under the law be permanently rescinded. Rescissions are provisions in law that cancel the availability of previously enacted budget authority before the budget authority would otherwise expire. Why the Rescission Was Included in the FAST Act The Highway Trust Fund (HTF), which is supported mostly by taxes on gasoline and diesel, has been receiving insufficient tax revenue and interest to support the authorizations that Congress has passed. Since 2008 Congress has been using transfers, mostly from the Treasury general fund, to make up the shortfalls. The FAST Act transferred $70 billion in Treasury general funds to the HTF. Under the FASTAct, 92.5% of the funding was authorized to be apportioned among the states by formula on an annual basis for the planning, design, and construction of highway projects. The rescission would, in effect, take back some of this money as well as some funds from older authorization acts. The FAST Act rescission had two purposes. Under congressional budget rules, it lowered the total cost of the five- year bill by $7.569 billion. It also lowered the size of the general fund transfers and related offsets needed to provide the HTF with sufficient balances to support the FAST Act's total authorizations. When the FAST Act was passed in 2015, it seemed likely that even if Congress did not later block the rescission, the amount of federal highway funds available to the states would not be affected. Federal highway funds are distributed as contract authority subject to an annual obligation limitation rather than annual appropriations. The obligation limitation may mean that a state is unable to use all its contract authority in a given year. If each year a state has greater contract authority than it can use under the obligation limitation, the accumulated amount of unusable contract authority can be counted against the amount of the rescission without canceling planned highway work. However, if a state's accumulated balance of unobligated contract authority is less than its rescission amount, the rescission could lead to a real loss of spending. Congressional Research Service https://crsreports.congress.gov IN11190 CRS INSIGHT Prepared for Members and Committees of Congress

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