II 

114TH CONGRESS 

1ST SESSION S. 1404 

To free States to spend gas taxes on their transportation priorities. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2015 

Mr. PORTMAN (for himself, Mr. MCCAIN, Mr. ISAKSON, and Mr. CORNYN) introduced the following bill; which was read twice and referred to the Committee on Environment and Public Works 

A BILL 

To free States to spend gas taxes on their transportation 

priorities. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State Transportation 

5 Flexibility Act’’. 

6 SEC. 2. DIRECT FEDERAL-AID HIGHWAY PROGRAM. 

7 (a) IN GENERAL.—Chapter 1 of title 23, United 

8 States Code, is amended by inserting after section 610 the 

9 following: 


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1 ‘‘§ 611. Direct Federal-aid highway program 

2 ‘‘(a) ELECTION BY STATE NOT TO PARTICIPATE.— 

3 Notwithstanding any other provision of law, a State may 

4 elect not to participate in any Federal program relating 

5 to highways, including a Federal highway program under 

6 the Safe, Accountable, Flexible, Efficient Transportation 

7 Equity Act: A Legacy for Users (Public Law 109–59; 119 

8 Stat. 1144), the Moving Ahead for Progress in the 21st 

9 Century Act (Public Law 112–141; 126 Stat. 405), this 

10 title, or title 49. 

11 ‘‘(b) DIRECT FEDERAL-AID HIGHWAY PROGRAM.— 

12 ‘‘(1) IN GENERAL.—Beginning in fiscal year 

13 2015, the Secretary shall carry out a direct Federal14 aid highway program in accordance with the require15 ments of this section under which the legislature of 

16 a State may elect, not fewer than 90 days before the 

17 beginning of a fiscal year— 

18 ‘‘(A) to waive the right of the State to re19 ceive amounts apportioned or allocated to the 

20 State under the Federal-aid highway program 

21 for the fiscal year to which the election relates; 

22 and 

23 ‘‘(B) to receive an amount for that fiscal 

24 year that is determined in accordance with sub25 section (e) for that fiscal year. 


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1 ‘‘(2) EFFECT.—On making an election under 

2 paragraph (1), a State— 

3 ‘‘(A) assumes all Federal obligations relat4 ing to each program that is the subject of the 

5 election; and 

6 ‘‘(B) shall fulfill those obligations using 

7 the amounts transferred to the State under 

8 subsection (e). 

9 ‘‘(c) STATE RESPONSIBILITY.— 

10 ‘‘(1) IN GENERAL.—The Governor of a State 

11 making an election under subsection (b) shall— 

12 ‘‘(A) agree to maintain the Interstate Sys13 tem in accordance with the current Interstate 

14 System program; 

15 ‘‘(B) submit a plan to the Secretary de16 scribing— 

17 ‘‘(i) the purposes, projects, and uses 

18 to which amounts received under the pro19 gram will be put; and 

20 ‘‘(ii) which programmatic require21 ments of this title the State elects to con22 tinue; 

23 ‘‘(C) agree to obligate or expend amounts 

24 received under the direct Federal-aid highway 

25 program exclusively for projects that would be 


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1 eligible for funding under section 133(b) if the 

2 State was not participating in the program; and 

3 ‘‘(D) agree to report annually to the Sec4 retary on the use of amounts received under the 

5 direct Federal-aid highway program and to 

6 make the report available to the public in an 

7 easily accessible format. 

8 ‘‘(2) NO FEDERAL LIMITATION ON USE OF

9 FUNDS.—Except as provided in paragraph (1), the 

10 expenditure or obligation of funds received by a 

11 State under the direct Federal-aid highway program 

12 shall not be subject to any Federal regulation under 

13 this title (except for this section), title 49, or any 

14 other Federal law. 

15 ‘‘(3) ELECTION IRREVOCABLE.—An election 

16 under subsection (b) shall be irrevocable during the 

17 applicable fiscal year. 

18 ‘‘(d) EFFECT ON PREEXISTING COMMITMENTS.— 

19 The making of an election under subsection (b) shall not 

20 affect any responsibility or commitment of the State under 

21 this title for any fiscal year with respect to— 

22 ‘‘(1) a project or program funded under this 

23 title (other than under this section); or 


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1 ‘‘(2) any project or program funded under this 

2 title in any fiscal year for which an election under 

3 subsection (b) is not in effect. 

4 ‘‘(e) TRANSFERS.— 

5 ‘‘(1) IN GENERAL.—The amount to be trans6 ferred to a State under the direct Federal-aid high7 way program for a fiscal year shall be the portion 

8 of the taxes appropriated to the Highway Trust 

9 Fund under section 9503 of the Internal Revenue 

10 Code of 1986, other than for the Mass Transit Ac11 count, for that fiscal year that is attributable to 

12 highway users in that State during that fiscal year, 

13 reduced by a pro rata share withheld by the Sec14 retary to fund contract authority for programs of 

15 the National Highway Traffic Safety Administration 

16 and the Federal Motor Carrier Safety Administra17 tion. 

18 ‘‘(2) TRANSFERS UNDER PROGRAM.— 

19 ‘‘(A) IN GENERAL.—Transfers under the 

20 program— 

21 ‘‘(i) shall be made at the same time as 

22 deposits to the Highway Trust Fund are 

23 made by the Secretary of the Treasury; 

24 and 


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1 ‘‘(ii) shall be made on the basis of es2 timates by the Secretary, in consultation 

3 with the Secretary of the Treasury, based 

4 on the most recent data available, and 

5 proper adjustments shall be made in 

6 amounts subsequently transferred to the 

7 extent prior estimates were in excess of, or 

8 less than, the amounts required to be 

9 transferred. 

10 ‘‘(B) LIMITATION.— 

11 ‘‘(i) IN GENERAL.—An adjustment 

12 under subparagraph (A)(ii) to any transfer 

13 may not exceed 5 percent of the trans14 ferred amount to which the adjustment re15 lates. 

16 ‘‘(ii) ADJUSTMENT GREATER THAN 5

17 PERCENT.—If the adjustment required 

18 under subparagraph (A)(ii) exceeds the 

19 percentage described in clause (i), the ex20 cess shall be taken into account in making 

21 subsequent adjustments under subpara22 graph (A)(ii). 

23 ‘‘(f) APPLICATION WITH OTHER AUTHORITY.—Any 

24 contract authority under this chapter (and any obligation 

25 limitation) authorized for a State for a fiscal year for 


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1 which an election by that State is in effect under sub2 section (b)— 

3 ‘‘(1) shall be rescinded or canceled; and 

4 ‘‘(2) shall not be reallocated or distributed to 

5 any other State under the Federal-aid highway pro6 gram. 

7 ‘‘(g) MAINTENANCE OF EFFORT.— 

8 ‘‘(1) IN GENERAL.—Not later than 30 days 

9 after the date on which an amount is distributed to 

10 a State or State agency under the State Highway 

11 Flexibility Act or an amendment made by that Act, 

12 the Governor of the State shall certify to the Sec13 retary that the State will maintain the effort of the 

14 State with regard to State funding for the types of 

15 projects that are funded by the amounts. 

16 ‘‘(2) AMOUNTS.—As part of the certification, 

17 the Governor shall submit to the Secretary a state18 ment identifying the amount of funds the State 

19 plans to expend from State sources during the cov20 ered period, for the types of projects that are funded 

21 by the amounts. 

22 ‘‘(h) TREATMENT OF GENERAL REVENUES.—For 

23 purposes of this section, any general revenue funds appro24 priated to the Highway Trust Fund shall be transferred 


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1 to a State under the program in the manner described 

2 in subsection (e)(1).’’. 

3 (b) CONFORMING AMENDMENT.—The analysis for 

4 title 23, United States Code, is amended by inserting after 

5 the item relating to section 610 the following: 

‘‘611. Direct Federal-aid highway program.’’. 

6 SEC. 3. ALTERNATIVE FUNDING OF PUBLIC TRANSPOR7 TATION PROGRAMS. 

8 (a) IN GENERAL.—Chapter 53 of title 49, United 

9 States Code, is amended by adding at the end the fol10 lowing: 

11 ‘‘§ 5341. Alternative funding of public transportation 

12 programs 

13 ‘‘(a) DEFINITIONS.—In this section— 

14 ‘‘(1) ALTERNATIVE FUNDING PROGRAM.—The 

15 term ‘alternative funding program’ means the pro16 gram established under subsection (c). 

17 ‘‘(2) COVERED PROGRAMS.—The term ‘covered 

18 programs’ means the programs authorized under— 

19 ‘‘(A) sections 5305, 5307, 5309, 5310, 

20 5311, 5335, 5339, and 5340; and 

21 ‘‘(B) section 3038 of the Federal Transit 

22 Act of 1998 (49 U.S.C. 5310 note). 

23 ‘‘(b) ELECTION BY STATE NOT TO PARTICIPATE.— 

24 ‘‘(1) IN GENERAL.—Notwithstanding any other 

25 provision of law, a State may elect not to participate 


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1 in all Federal programs relating to public transpor2 tation funded under the Mass Transit Account of 

3 the Highway Trust Fund, including the Federal 

4 public transportation programs under the Safe, Ac5 countable, Flexible, Efficient Transportation Equity 

6 Act: A Legacy for Users (Public Law 109–59; 119 

7 Stat. 1144), the Moving Ahead for Progress in the 

8 21st Century Act (Public Law 112–141; 126 Stat. 

9 405), title 23, or this title. 

10 ‘‘(2) EFFECT.—On making an election under 

11 paragraph (1), a State— 

12 ‘‘(A) assumes all Federal obligations relat13 ing to each program that is the subject of the 

14 election; and 

15 ‘‘(B) shall fulfill those obligations using 

16 the amounts transferred to the State under 

17 subsection (e). 

18 ‘‘(c) PUBLIC TRANSPORTATION PROGRAM.— 

19 ‘‘(1) PROGRAM ESTABLISHED.—Beginning in 

20 fiscal year 2015, the Secretary shall carry out an al21 ternative funding program under which the legisla22 ture of a State may elect, not fewer than 90 days 

23 before the beginning of a fiscal year— 

24 ‘‘(A) to waive the right of the State to re25 ceive amounts apportioned or allocated to the 


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1 State under the covered programs for the fiscal 

2 year to which the election relates; and 

3 ‘‘(B) to receive an amount for that fiscal 

4 year that is determined in accordance with sub5 section (e). 

6 ‘‘(2) PROGRAM REQUIREMENTS.— 

7 ‘‘(A) IN GENERAL.—The Governor of a 

8 State that participates in the alternative fund9 ing program shall— 

10 ‘‘(i) submit a plan to the Secretary 

11 describing— 

12 ‘‘(I) the purposes, projects, and 

13 uses to which amounts received under 

14 the alternative funding program will 

15 be put; and 

16 ‘‘(II) which programmatic re17 quirements of this title the State 

18 elects to continue; 

19 ‘‘(ii) agree to obligate or expend 

20 amounts received under the alternative 

21 funding program exclusively for projects 

22 that would be eligible for funding under 

23 the covered programs if the State was not 

24 participating in the alternative funding 

25 program; and 


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1 ‘‘(iii) submit to the Secretary an an2 nual report on the use of amounts received 

3 under the alternative funding program, 

4 and to make the report available to the 

5 public in an easily accessible format. 

6 ‘‘(B) NO FEDERAL LIMITATION ON USE OF

7 FUNDS.—Except as provided in subparagraph 

8 (A), the expenditure or obligation of funds re9 ceived by a State under the alternative funding 

10 program shall not be subject to the provisions 

11 of this title (except for this section), title 23, or 

12 any other Federal law. 

13 ‘‘(3) ELECTION IRREVOCABLE.—An election 

14 under paragraph (1) shall be irrevocable during the 

15 applicable fiscal year. 

16 ‘‘(d) EFFECT ON PREEXISTING COMMITMENTS.— 

17 Participation in the alternative funding program shall not 

18 affect any responsibility or commitment of the State under 

19 this title for any fiscal year with respect to— 

20 ‘‘(1) a project or program funded under this 

21 title (other than under this section); or 

22 ‘‘(2) any project or program funded under this 

23 title in any fiscal year for which the State elects not 

24 to participate in the alternative funding program. 

25 ‘‘(e) TRANSFERS.— 


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1 ‘‘(1) IN GENERAL.—The amount to be trans2 ferred to a State under the alternative funding pro3 gram for a fiscal year shall be the portion of the 

4 taxes transferred to the Mass Transit Account of the 

5 Highway Trust Fund under section 9503(e) of the 

6 Internal Revenue Code of 1986, for that fiscal year, 

7 that is attributable to highway users in that State 

8 during that fiscal year. 

9 ‘‘(2) TRANSFERS.— 

10 ‘‘(A) IN GENERAL.—Transfers under the 

11 program— 

12 ‘‘(i) shall be made at the same time as 

13 transfers to the Mass Transit Account of 

14 the Highway Trust Fund are made by the 

15 Secretary of the Treasury; and 

16 ‘‘(ii) shall be made on the basis of es17 timates by the Secretary, in consultation 

18 with the Secretary of the Treasury, based 

19 on the most recent data available, and 

20 proper adjustments shall be made in 

21 amounts subsequently transferred, to the 

22 extent prior estimates were in excess of, or 

23 less than, the amounts required to be 

24 transferred. 

25 ‘‘(B) LIMITATION.— 


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1 ‘‘(i) IN GENERAL.—An adjustment 

2 under subparagraph (A)(ii) to any transfer 

3 may not exceed 5 percent of the trans4 ferred amount to which the adjustment re5 lates. 

6 ‘‘(ii) ADJUSTMENT GREATER THAN 5

7 PERCENT.—If the adjustment required 

8 under subparagraph (A)(ii) exceeds the 

9 percentage described in clause (i), the ex10 cess shall be taken into account in making 

11 subsequent adjustments under subpara12 graph (A)(ii). 

13 ‘‘(f) CONTRACT AUTHORITY.—There shall be re14 scinded or canceled any contract authority under this 

15 chapter (and any obligation limitation) authorized for a 

16 State for a fiscal year for which the State elects to partici17 pate in the alternative funding program. 

18 ‘‘(g) MAINTENANCE OF EFFORT.— 

19 ‘‘(1) IN GENERAL.—Not later than 30 days 

20 after the date on which an amount is distributed to 

21 a State or State agency under the State Highway 

22 Flexibility Act or an amendment made by that Act, 

23 the Governor of the State shall certify to the Sec24 retary that the State will maintain the effort of the 


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1 State with regard to State funding for the types of 

2 projects that are funded by the amounts. 

3 ‘‘(2) AMOUNTS.—The certification under para4 graph (1) shall include a statement identifying the 

5 amount of funds the State plans to expend from 

6 State sources for projects funded under the alter7 native funding program, during the fiscal year for 

8 which the State elects to participate in the alter9 native funding program. 

10 ‘‘(h) TREATMENT OF GENERAL REVENUES.—For 

11 purposes of this section, any general revenue funds appro12 priated to the Highway Trust Fund shall be transferred 

13 to a State under the program in the manner described 

14 in subsection (e).’’. 

15 (b) CONFORMING AMENDMENT.—The analysis for 

16 title 49, United States Code, is amended by inserting after 

17 the item relating to section 5340 the following: 

‘‘5341. Alternative funding of public transportation programs.’’. 

Æ 


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