[Congressional Record Volume 148, Number 86 (Tuesday, June 25, 2002)]
[Senate]
[Pages S6025-S6026]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Crapo, Mr. Harkin, Mr. Warner, 
        Mr. Daschle, Mr. Craig, Mr. Bond, Mr. Graham, Mrs. Carnahan, 
        Mr. Reid, Mr. Thomas, Mr. Enzi, and Mr. Johnson):
  S. 2678. A bill to amend the Internal Revenue Code of 1986 to 
transfer all excise taxes imposed on alcohol fuels to the Highway Trust 
Fund, and for other purposes; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce the MEGATRUST 
Act, the Maximum Growth for America Through the Highway Trust Fund.
  Next year, the Congress must reauthorize highway and transit programs 
and the system of Federal financing for them. This is a very important 
issue for our Nation. The highway and transit programs are very 
important in every State. Very few other pieces of legislation effect 
our country's citizens and businesses more directly than the highway 
bill. These are our ways for moving goods and people.
  They are key to our economy and our ability to connect to one 
another. This country needs good, safe highways in order to cross great 
distances, and highway and transit construction and maintenance is an 
important part of every State's economy.
  In order to facilitate our work in reauthorizing these programs, I 
plan to introduce a series of bills concerning important issues that 
Congress must address in that legislation.
  This will be the first of those bills, a proposal concerning revenues 
for the highway trust fund. But unlike other bills I will introduce, 
this one must pass more quickly because it sets the foundation for the 
other bills I will be introducing later. This bill will represent how 
this country will help pay for our highway and transit needs over the 
next several years.
  The MEGATRUST Act represents an important step in the effort to 
strengthen our Nation's economy, and improve its quality of life, by 
investing in transportation.
  It would increase revenues into the highway trust fund by several 
billion dollars annually by making some needed corrections in the way 
Federal revenues are credited to the highway trust fund.
  Nothing in this bill increases any tax. I repeat that. Nothing in 
this bill increases any tax.
  Federal dollars to help States and localities improve their highways 
and transit systems are derived largely from the Federal highway trust 
fund. Under the system today, revenues from highway user taxes are 
deposited into the highway trust fund, and, more specifically, into 
separate accounts within the fund for highways and for transit. Those 
are two separate accounts.
  These revenues are, in turn, distributed to States and localities for 
transportation investments that truly to improve our lives, create 
jobs, and make our economy better. This trust fund mechanism has been 
widely regarded as successful. But, as always, we must make adjustments 
to meet new challenges.
  This bill would improve and extend this important financing 
mechanism, principally by making sure that certain revenues not 
currently credited to the highway trust fund are, in fact, placed in 
that fund.
  The MEGATRUST Act does several things. First, it will ensure that 
taxes paid on gasohol are fully credited to the highway account of the 
highway trust fund. Today, when gasohol is taxed, the mass transit 
account of the highway trust fund receives its full share of revenues, 
as if the fuel were gasoline. But 2.5 cents of the gas tax per gallon 
that is imposed on gasohol is credited to the general fund of the 
Treasury, not to the highway account. So the MEGATRUST Act ensures that 
those 2.5 cents per gallon go to the highway account.
  Second, the MEGATRUST Act will ensure that the highway system does 
not bear the cost of our national policy to develop and promote the use 
of gasohol. This tax rate preference is part of our national policy to 
advance the use of gasohol.

  I believe the ethanol subsidy is good energy policy, good agriculture 
policy, and good tax policy. Yet ironically, it is the highway trust 
fund that bears the burden of the subsidy. Since it is good general 
policy--that is, gasohol--I believe the general fund should bear

[[Page S6026]]

the burden of the subsidy, not the highway trust fund.
  Gasohol, as a fuel, is taxed 5.3 cents per gallon less than gasoline. 
But gasohol-fueled vehicles cause the same wear and tear on roads as 
gasoline-fueled vehicles. That is obvious. They use the same roads, 
travel the same distances, et cetera.
  Ensuring necessary and affordable energy supplies is important to the 
quality of life and economic prosperity of all Americans. Policies to 
achieve these objectives, however, should not come at the expense of 
transportation infrastructure improvements.
  Accordingly, the MEGATRUST Act would leave the gasohol tax rate 
preference in place but credit the highway account of the highway trust 
fund with revenue equal to that forgone to the Treasury by the gasohol 
tax preference.
  Third, the MEGATRUST Act credits both the highway and mass transit 
accounts of the highway trust fund with interest starting in fiscal 
year 2004. Today, the highway trust fund is one of the few trust funds 
in the Federal budget that is not credited with interest on its unspent 
balance, which is highly inappropriate.
  The MEGATRUST Act would change this in order to make sure that 
collected highway user taxes are to be put to work for better 
transportation for our citizens.
  Fourth, the MEGATRUST Act would extend the basic highway user taxes 
and the highway trust fund so they do not expire.
  And last, the MEGATRUST Act would require the creation of an 
important commission concerning the future financing of the Federal 
highway and transit programs.
  Why is that important? While the current mechanism has worked well, 
we know that cars will become more fuel efficient and advancing 
technology will only bring us closer to increased fuel efficiency.
  Other changes are possible as well in our dynamic economy. While 
major changes will not occur overnight, we have to be ready for them. 
We have to understand what is likely to happen so we can consider 
making adjustments in the highway trust fund and its revenue streams, 
so we are not caught off guard and unable to adequately fund our 
transportation system.
  What am I saying? I am basically saying that the hybrid fuel 
vehicles--it could be fuels cells, other technologies for our 
automobiles of the future--they do not use gasoline, they do not use 
gasohol, therefore, revenue would not be placed in the highway trust 
fund. We have to anticipate all of those changes so our highways are 
adequately funded regardless of the types of cars and regardless of the 
type of energy that is used to propel those cars.
  I especially thank Senators Harkin, Warner, Crapo, Graham of Florida, 
Reid, Daschle, Carnahan, Bond, and Craig for working so closely with me 
on this legislation.
  In sum, through this highway trust fund proposal, I want to make 
clear to my colleagues that there are ways to increase revenue into the 
highway trust fund without raising taxes. We will need to increase 
highway trust fund resources to help us all structure a successful 
reauthorization bill next year, and I look forward to working closely 
with my colleagues to that end.
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