Surface transportation "devolution" refers to shifting most current federal responsibility for building and maintaining highways and public transportation facilities from the federal government to the states. Devolution would involve reducing the federal taxes on motor fuels that currently provide most of the federal funding distributed to states and local transit authorities. States would then have the option of making up for the reduction in federal funding by raising state motor fuel taxes or providing funds from other sources, as they see fit. The federal government would maintain a much smaller program to meet limited purposes such as building and maintaining roads on federal lands and Indian reservations and providing funds for repairs after disasters. This program could be paid for either by appropriations from the general fund or by retaining federal motor fuel taxes at lower rates. Devolution would reduce the scope of many of the requirements that are attached to the use of federal funds. Federal regulation and oversight of project construction, prevailing wage requirements, federal construction standards, and federal environmental regulation would no longer apply to surface transportation projects funded exclusively with state and local resources. Advocates of devolution contend that elimination of these requirements would reduce the cost of constructing transportation projects and speed their completion. Arguments for devolution of surface transportation programs have emerged periodically since the administration of President Ronald Reagan. In 1987, devolution was recommended in a detailed report by the Advisory Commission on Intergovernmental Relations. However, Congress has given the states greater authority over the expenditure of federal highway funds in recent years, addressing one of the factors leading to calls for devolution. In addition, financial and policy concerns have deterred serious consideration of devolution proposals. Highway construction has involved a federal-state partnership since passage of the Federal Aid Road Act of 1916 (39 Stat. 355). The highway program has had three basic attributes: a required state match of federal funds, a designated network of roads eligible for federal funding, and formula apportionment of funds to the states. The Federal Aid Highway and Highway Revenue Acts of 1956 (70 Stat. 374, 387), which authorized the construction of the Interstate System, increased federal involvement in highway planning and construction. The act raised federal highway taxes and channeled the receipts into a new Highway Trust Fund (HTF), removing highway funding from the normal appropriations process. Congress subsequently created many separate programs to require that states spend shares of their HTF apportionments for specific purposes. This proliferation of programs was reversed in 2012 by the Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ), which consolidated 92% of the act's funding into five large formula-driven programs. State departments of transportation (state DOTs) largely determine which projects are funded, let the contracts, and oversee project development and construction. The federal government has provided funding for public transportation through the HTF since 1982. Unlike the federal-state relationship in the federal-aid highway program, the federal mass transit program generally involves a relationship between the federal government and a transit authority. All spending on the federal-aid highway program and about 80% of spending on public transportation are funded from the HTF, which has two accounts: the highway account and the mass transit account. The primary revenue sources for the HTF are an 18.3-cent-per-gallon federal tax on gasoline and a 24.3-cent-per-gallon federal tax on diesel fuel. Although the HTF has other sources of revenue, such as truck registration fees and a truck tire tax, and is also credited with interest paid on the fund balances held by the U.S. Treasury, fuel taxes have in recent years provided roughly 85% of the amounts paid into the fund by highway users. The mass transit account receives 2.86 cents per gallon of fuel taxes, with the remainder of the tax revenue credited to the highway account. Every year since 2008, there has been a gap between the dedicated tax revenues flowing into the HTF and the cost of surface transportation spending Congress has authorized. Congress has filled these shortfalls with a series of transfers, largely from the Treasury's general fund. These transfers have shifted a total of $143.6 billion to the HTF. The last $70 billion of these transfers were authorized in the Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94 ), which was signed by President Barack Obama on December 4, 2015. The FAST Act funds federal surface transportation programs from FY2016 through FY2020. When the act expires, the de facto policy of relying on general fund transfers to sustain the HTF will be 12 years old. Opposition to raising the federal fuels tax rates has left the rates unchanged since 1993. The taxes have lost roughly 40% of their purchasing power since then. Figure 1 shows the trust fund's financial outlook. The gap between tax revenues coming into the HTF and outlays from the fund is projected to widen. The general fund transfers authorized under the FAST Act will fill this gap through FY2020. Thereafter, Congress will need either to reduce federal spending for surface transportation or find additional resources to fund highway and public transportation programs. The difficult situation of the Highway Trust Fund poses an obstacle to devolution. The federal taxes that flow into the HTF are insufficient to fund the surface transportation program that Congress has authorized. If most of the program were to be devolved to the states and the related federal taxes were to be replaced by state taxes, total revenue would still be insufficient to support the current magnitude of highway and public transportation spending. Advocates of devolution have generally made the following case since the 1980s: The federal government is overinvolved in the planning and construction of highways and public transportation. The states have a much better understanding of their own highway needs, and federal involvement should be limited to highways that have a clear national purpose. Public transportation is inherently local and should be a local or state responsibility with no federal involvement. Some states receive more federal surface transportation funding, relative to the highway taxes paid by their motorists, than other states. Devolution would eliminate this discrepancy by giving each state control of its motorists' tax payments. The maintenance and reconstruction of the Interstate System highways, federal lands highways, and perhaps, existing federal programs supporting transportation research and highway safety are valid federal responsibilities and should remain with the federal government. Eliminating federal funding for most surface transportation projects would reduce regulatory burdens on states and localities, leading to efficiencies and cost reductions. Critics of devolution have typically made the following claims: National interests are too great to be addressed without a strong federal role. All states benefit from a broad, properly functioning national highway network. This network could be in jeopardy with less federal support, as state capital project funding may prove less reliable than federal funding. Devolution would make it more difficult for states or groups of states to concentrate funds for large projects of regional or national significance because local interests will more likely trump national needs. Some parts of the nation are less well off than others and would have trouble paying for the roads and bridges they need to support economic development and national connectivity. Regulations tied to federal funding of highways and public transportation help ensure implementation of national goals such as highway and transit safety, clean air and water, and civil rights, and may save money by leveling the playing field among contractors and encouraging national competition for bids. Devolution would require major funding transfers to pay for the transition. Changes during the last two surface transportation reauthorization acts have given states greater control over highway expenditures, and Congress has adhered to an earmark ban since 2011. These changes have addressed some of the complaints that originally led to calls for devolution. Surface transportation devolution proposals generally have certain characteristics in common: they would reduce or eliminate existing federal programs, reduce the federal taxes on motor fuels, and leave the states to provide replacement funding for highway purposes if they wish to do so. Most devolution proposals would retain existing federal programs to maintain roads on federal lands, fund transportation research, and provide relief to rebuilt roads and bridges damaged in natural disasters. Nearly all transportation devolution proposals would eliminate the federal public transportation program. At the same time, devolution proposals have taken differing approaches to a number of important matters. Some would retain a federal role in maintaining the Interstate Highway System and important bridges, while others would not. Some have retained the major highway formula grant programs, albeit on a far smaller scale, while others have proposed to eliminate those programs. The treatment of two federal safety agencies, the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration, has also been a point of contention; no proposal to date would have devolved those agencies' responsibilities to the states, but elimination of the Highway Trust Fund would leave Congress the choice of letting the programs expire or funding them from the Treasury's general fund. Devolving the current federal highway and transit programs to the states would involve substantial upfront costs. Under the current programs, surface transportation funding is usually authorized in multiyear authorization bills. Each year of funding is available for obligation for the current year and the three subsequent years. The Federal Highway Administration (FHWA) uses its contract authority to legally obligate the federal government to pay its share of a project's cost prior to construction. The state lets the contracts, oversees construction, pays the contractor, and submits vouchers to FHWA for reimbursement. As projects frequently take several years to complete, in any given year FHWA is making payments to the states based on commitments made several years earlier. These payments are made mostly from the current year's HTF receipts. Public transportation funding works in a similar manner, with the sponsoring transit agency signing contracts for approved expenditures and the Federal Transit Administration providing reimbursement as portions of the work are completed. At any time there is a build-up of outstanding obligations for which the federal government is legally responsible. At the end of FY2016, outstanding obligations totaled $65.5 billion for the highway account and $18.6 billion for the mass transit account.