Highway Bill Would Raid LUST Fund ... Again

Goes after tank fund rather than increasing gas tax

Rep. Dave Camp (R-Mich.) LUST Gas Tax (CSP Daily News / Convenience Stores / Gas Stations)

WASHINGTON -- On July 15, the U.S. House of Representatives passed a bill, The Highway & Transportation Funding Act of 2014 (H.R. 5021), that would fund the highway program through May 2015 by transferring $1 billion from the Leaking Underground Storage Tank (LUST) Trust Fund, the Petroleum Marketers Association of America said in its latest PMAA News From Capitol Hill newsletter.

Representatives Dave Camp (R-Mich.) and Bill Schuster (R-Pa.) introduced the legislation in an effort to complete a short-term deal before federal officials start delaying payments on Aug. 1 to states for road and bridge construction projects.

Although the House passed the bill 367 to 55, some Democrats, who want to hold off on a short-term bill in order to keep the pressure on to pass a longer-term bill, oppose it, PMAA said.

In addition to the House bill, the U.S. Senate will debate two other funding patches--one approved by the Senate Finance Committee and a proposal authored by Senator Barbara Boxer (D-Calif.). The House bill is similar to the Senate Finance bill with both providing approximately $10.8 billion for the Highway Trust Fund.

Both plans use pension smoothing and an extension of customs user fees as offsets, but the Senate Finance Committee bill also includes $4.3 billion in tax compliance provisions that will not pass the House, said PMAA. Although President Obama would also like a long-term fix, he has approved the short-term House bill.

Most significant to petroleum marketers, the House and Senate Finance Committee plans both contain language fought by PMAA that would transfer $1 billion transfer from the Leaking Underground Storage Tank (LUST) Trust Fund, leaving only $400 million.

PMAA, the National Association of Convenience Stores (NACS) and the Society of Independent Gasoline Marketers of America (SIGMA) sent a letter in June to Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Orrin Hatch (R-Utah) urging the Senate to reject a proposal for a second, "fatal raid" of the LUST Fund. In 2012, Congress "hijacked" $2.4 billion of the $3.8 billion that PMAA, NACS and SIGMA members paid in fees to the LUST Fund. The $2.4 billion was moved to fund the Highway Trust Fund.

Petroleum marketers have supported the LUST Fund and have paid $3.8 billion in LUST taxes since its inception. In 2012, Congress included a provision in the Highway bill that took $2.4 billion out of the LUST Trust Fund said it and moved it to the Highway Trust Fund. While PMAA opposed this provision, Congress could have lessened the blow by including language which would have required that future revenue collected for the LUST Fund is used for its intended purpose. Now Congress is back to raid from the petroleum marketers fund, this time proposing to take $1 billion of the remaining $1.4 billion from the fund.

PMAA said it believes the LUST Fund should be solely used to support UST leak prevention and remediation programs. The group is also concerned that states might increase tank fees to account for the LUST Fund shortfall.

"Raiding another $1 billion from the fund will cripple important programs and ultimately harm marketing companies who have paid the tax and built the fund over the past 25 years," PMAA said. "If the fund isn't being used for its intended purpose, the fee should be eliminated."

U.S. Senators Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.) recently unveiled a bipartisan proposal to shore up the Highway Trust Fund by making changes to the federal motor fuels tax, which funds improvements to roads, bridges and transit systems. The proposal would create a long-term, stable funding mechanism for the Highway Trust Fund and enact tax relief for American families and businesses.

The senators’ proposal would increase the federal gasoline and diesel taxes by six cents in each of the next two years for a total of 12 cents. The plan would index the gas tax to inflation, using the Consumer Price Index (CPI), to ensure that it remains viable into the future.

To offset the revenue raised from increasing the gas tax to pay for roads and transportation projects, Corker and Murphy propose providing net tax relief for American families and businesses.