On December 4, 2015, President Barack Obama signed the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94 ). The act authorizes spending on federal highway and public transportation programs and surface transportation safety and research activities for five years, through September 30, 2020. The act also authorizes passenger rail programs for five years, through FY2020. The act's authorization totals about $305 billion for FY2016 through FY2020. This includes $233 billion for highways and highway safety, $61 billion for public transportation, and more than $10 billion for Amtrak. The five-year duration of the act reestablishes the pattern of five- or six-year surface transportation authorization bills (often bound together by a series of short-term authorization acts) that dates back to the early 1990s. The bill also provides sufficient funds for a modest increase in spending for both highways and public transportation over expected inflation. This is a change from the pattern of declines in real spending for highways since the early 2000s. On the programmatic side, the changes were small in comparison with the previous reauthorization act, the Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ), which made major changes in programmatic structure and operations but provided for only two years of funding (FY2013-FY2014). Although the FAST Act creates several new discretionary programs, well over 92% of spending from the Highway Trust Fund (HTF) will be distributed by formula under the law. The FAST Act makes two important changes in transportation programs. It is the first surface transportation act to emphasize the national importance of moving freight, and funds two new freight programs. It is also the first law to treat intercity passenger rail as an integral part of the federal surface transportation program; previously, Amtrak was authorized under separate legislation. Almost all of federal highway funding and about 80% of federal public transportation funding comes from the HTF. The HTF is financed from a number of sources, including taxes on fuels, tires, truck and trailer sales, and a weight-based heavy-vehicle use tax . However, approximately 90% of trust fund revenue comes from excise taxes on motor fuels, 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel. The HTF consists of two separate accounts—highway and mass transit. The highway account receives an allocation equivalent to 15.44 cents of the gasoline tax, and the mass transit account receives the revenue generated by 2.86 cents of the tax. Because the fuel taxes are set in terms of cents per gallon rather than as a percentage of the sale price, their revenues do not increase with inflation. The fuel tax rates were last raised in 1993. Sluggish economic growth and improved vehicle efficiency have depressed the growth of fuel consumption and therefore the growth of fuel tax revenue. Since FY2008, the revenues flowing into the highway account of the HTF have been insufficient to fund the expenditures authorized under the Federal-Aid Highway Program. Prior to the enactment of the FAST Act, resolving this discrepancy required seven general fund and other transfers totaling $73.3 billion (of which $62.5 billion went into the highway account) over a seven-year period. Without these transfers, FHWA might have faced delays in reimbursing states for completed work. Under the FAST Act, $70 billion will be transferred from the general fund to the HTF to fund the projected difference between HTF revenues and authorized spending for FY2016 through FY2020. An additional $300 million was provided by transfers from the Leaking Underground Storage Tank (LUST) trust fund . This mixing of revenue sources lessens the relevance of the arguments that HTF funds should be used only on highways. It also reduces the salience of states' complaints that they are not receiving a fair share of highway spending relative to their highway tax payments to the HTF (the so-called donor-donee state issue). Under the FAST Act, the general fund transfers allow for spending levels for all states that will likely exceed their highway tax payments. A gap between dedicated HTF revenues and outlays is expected to persist after the FAST Act expires at the end of FY2020. The Congressional Budget Office (CBO) projects that beginning in FY2021, revenues credited to the highway and transit accounts of the HTF will be insufficient to meet the fund's obligations. CBO projects that over the five years following the expiration of the FAST Act, from FY2021 through FY2025, HTF receipts will fall $96 billion short of the amount needed to fund highway and public transportation programs at the current level, adjusted only for projected inflation. Congress will face the need to approve some combination of new taxes, an increase in existing dedicated taxes, further general fund transfers, an increase in federally supported debt financing, or reductions in the scope of the federal surface transportation program, if the FAST Act is to be replaced or extended in 2021. The Federal-Aid Highway Program (FAHP) is an umbrella term for the separate highway programs administered by the Federal Highway Administration (FHWA). These programs are almost entirely focused on highway construction, and generally do not support operations (such as administrative salaries or fuel costs) or routine maintenance (such as mowing roadway fringes or filling potholes). Each state is required to have a State Transportation Improvement Plan, which sets priorities for the state's use of FAHP funds. State departments of transportation (state DOTs) largely determine which projects are funded, award the contracts, and oversee project development and construction. More recently, metropolitan planning organizations (MPOs) have played a growing role in project decisionmaking in urban areas, but federal project funding continues to flow through state DOTs. The FAHP, unlike most other federal programs, does not rely on appropriated budget authority. Instead, FHWA exercises contract authority over monies in the HTF, and may obligate (promise to pay) funds for projects funded with contract authority prior to an appropriation. Once funds have been obligated, the federal government has a legal commitment to provide the funds. This approach shelters highway construction projects from annual decisions about appropriations. Under the FAST Act, 92% of FAHP funding is distributed through five core programs. These are the National Highway Performance Program (NHPP), the Surface Transportation Block Grant Program (STBG), the Highway Safety Improvement Program (HSIP), the Congestion Mitigation and Air Quality Improvement Program (CMAQ), and the National Highway Freight Program. The STBG was formerly known as the Surface Transportation Program, but was renamed in the FAST Act. All five core programs are formula programs, meaning that each state's share of each program's total annual authorization is based on a mathematical calculation set out in the law. The remaining programs, generally referred to as discretionary programs, are administered more directly by FHWA, but the funding distribution of some of these programs (such as the Construction of Ferry Boats and Ferry Terminal Facilities Program) is formulaic as well. The FAHP does not provide money in advance. Rather, a state receives bills from private contractors for work completed and pays those bills according to its own procedures. The state submits vouchers for reimbursement to FHWA. FHWA certifies the claims for payment and notifies the Department of the Treasury, which disburses money electronically to the state's bank, often on the same day the voucher is submitted by the state. After several years of flat funding in terms of nominal dollars, the FAST Act provides highway funding increases of 4.2% above previous law adjusted for expected future inflation (see Figure 1 and Table 1 ). The Federal-Aid Highway and research titles authorize an average of $45 billion annually for FY2016-FY2020. Of this, an average of $41 billion is provided annually for Federal-Aid Highway programs. The act includes no new congressional earmarks for highway projects. A major focus of the FAST Act is the movement of freight. This is reflected in a new formula freight program, the National Highway Freight Program (NHFP), and a new competitive discretionary grant program, the Nationally Significant Freight and Highway Projects Program (NSFHP). The freight policy aspects of the FAST Act are discussed together in a separate section of this report (see " Freight Policy "). The apportioned programs —those whose funds are distributed by formula— include the five "core" programs plus the Metropolitan Planning Program. The FAST Act does not use separate formulas to calculate each state's apportionments under each core program. Instead, the act first provides for a single gross apportionment for each of the states . Each state ' s apportionment total is then divided among the separate programs based on a series of set - asides and percentage formulas . Table 2 shows the dollar amounts of the aggregate programmatic split. Although each core program has specific objectives, the core programs also have many areas of overlapping eligibility to increase states' ability to use the funds as they prefer. The federal share for most FAHP projects is generally either 80% or 90%. States may transfer up to 50% of any apportionment to any other apportioned program. However, no transfers are permitted of funds that are suballocated to areas by population (such as a portion of STBG funds) or of Metropolitan Planning funds. The broad areas of eligibility overlap among the core programs under the FAST Act should make it easier for states to operate within the 50% restriction on transfers. NHPP is the largest of the federal-aid highway programs, with annual authorizations averaging over $23 billion. The program supports improvement of the condition and performance of the National Highway System (NHS), which includes Interstate System highways and bridges as well as virtually all other major highways.