highway information seminar motor fuel session november 16, 2004
TRANSCRIPT
Highway Information Seminar
Motor Fuel SessionNovember 16, 2004
The Big PictureThe Big Picture
FHWA determines how much federal Highway Trust Fund tax money comes from each StateCompared to how much each State receives from FHWADerives a “for every dollar in, how much does my State receive” ratio
The Big PictureThe Big Picture II
This analysis is extremely important:
To CongressFHWAStates
It’s important that the data be correct
Background
Uses of State motor fuel dataFederal-aid highway funds ApportionmentFederal motor fuel Attribution
Importance20 years ago, historical recordsToday, drives the distribution of significant federal fundsTomorrow, indications are the data will remain significant
Apportionments
Funds for several FHWA programs are apportioned to the States:
Formula basedSet by lawAbout 85 % of Federal highway funds are apportioned
Under TEA-21, about $12 billion (40% of Federal Highway Programs) was annually apportioned based on motor fuel data
Apportionment and MotorFuel Data
ProgramApproximate Annual Funding
Motor Fuel Factor
Apportionment Based on Motor Fuel
SurfaceTransportati
on$ 6 Billion 35 % $ 2 Billion
InterstateMaintenance
$ 6 Billion 33.3 % $ 2 Billion
NationalHighway System
$ 6 Billion 30 % $ 2 Billion
MinimumGuarantee
$ 6 Billion 100 % $ 6 Billion
The Attribution Process
FHWA attribution supports the apportionment process
How FHWA calculates attribution
The role of State data
How Attribution Works I
State-by-State contributions to the
Federal Highway Trust Fund are
not available from the Internal
Revenue Service (IRS)
How Attribution Works II
Typical federal motor fuel taxpayer is an oil company or oil wholesaler8,000 are licensed with IRSFederal tax is imposed as the fuel crosses the rackWhere is the fuel consumed? IRS didn’t know, but has begun to address fuel tracking
How Attribution Works III
IRS reports tax receipts for each motor fuel tax typeHTF contributions from highway users in each State are estimated using State motor fuel dataStates report the motor fuel taxed under each State’s proceduresFHWA uses established procedures to derive a consistent, compatible dataset for attribution
How Attribution Works IV
Measure on-highway gallons of motor fuel
(Gasoline - Gasohol - Special fuels)
Sum to derive the national total (by type)Derive each State’s share of the national totalUse those shares to determine revenue shares
How Attribution Works V
For the federal truck taxes:Tire taxTruck and trailer retail sales excise taxHeavy vehicle use tax
Attribution to each State is in proportion to the highway use of special fuels
Attribution and Data Quality
FHWA’s goal is an accurate data-set with which to determine attribution
To improve data quality, FHWA needs to work with State data providers to achieve accurate reporting
In Summary
Processes:Apportionment processAttribution process
Importance:Measurement of motor fuel dataEquitable treatment for all States
FHWA needs your commitment
FHWA Motor Fuel Reporting:
Accomplishments
ChallengesChanging
Environment
Accomplishments:
Re-AssessmentInput proceduresMotor fuel reviewsData verificationOutreach
Accomplished: Re-Assessment
Time lineBegan in late 1998Shortly after TEA-21 passed
MethodologyExpert advisory groupIdentify issuesPropose solutions
Accomplished: Re-Assessment
General Accounting Office (GAO)Concurrent assessmentCooperative effortSubstantial agreement on conclusions
GAO identified several actionsReview & verify State MF reportingDocument FHWA attribution methodologyIndependent review of FHWA methodologyEvaluate EXSTARS-EXFIRS for validation
Accomplished: Re-Assessment
FHWA identified areas for further study/revision
Federal Register NoticeGeneral support for the proposals
Publication: Attribution and Apportionment of Federal Highway Tax Revenues: Process Refinements
Accomplished: Input Procedures
Implemented a submittal processAll motor fuel data since January 2002Generally considered easy-to-use
Computer security requirementsSecure submittal siteRequired change to Input Tool use
Data providers received USERIDManaged by Division Offices
Accomplished: MF Reviews
Division Office reviewsContinuous Process Improvement Model45 States have done reviewsQuality varies
Accomplished: Data verification
Process review versus data verificationWhy verify?
Old procedure - data hand-enteredData needs checking until new procedures
Verification memoSent in March – June each yearTypically, several States revise their dataSo several iterations occur
Accomplished: Publications
Attribution and Apportionment of Federal Highway Tax Revenues: Process Refinements
Your State’s Share: Attributing Federal Highway Revenues to Each State
Guide to Reporting Highway Statistics has been revised and approved by OMB
Accomplished: Revised Guide to Reporting Highway Statistics
Data requirements have changedData providers need to be aware of these changesIt will require some effort on the State’s part to be aware and make these changesFHWA will discuss these with you at any time, if you need assistance
Challenges:
Motor fuel reviews and follow-upQuality of reviewsQuality improvementsRisk assessment
Verification of dataCommunication
Challenges: MF Reviews
Quality of reviews/Quality improvements
Need to bring up the averageThree core items:
Procedures documentProcedures assessmentOversight plan
Risk assessment
Challenges: Communication
Goal: Keep stakeholders in loop
MethodsWorkshop-Video conference options
November workshops on Highway StatisticsJanuary-February motor fuel workshopsSpecial request/event video conferences
Challenges: Verification of Data
About 20 are reviewing the dataApparently, about 30 are not reviewing the dataIt’s the States last chance to make sure what they reported is correct
Challenges: Communication II
Methods (continued)Community of Practice:
Location for all publications/materialsBulletin-board style listserv
http://knowledge.fhwa.dot.gov/cops/hcx.nsf/home?openformgroup=motor%20 fuel%20reporting/htf%20attribution
Changing Environment:
ReauthorizationReporting changesAttribution analysis changesGasohol dataFederal law changes combating tax evasion
Changing Environment: Reauthorization
TEA-21 ended September 30, 2003Administration-proposed legislation 8 month extension until May, 2005What Congress will do is unknownNo significant MF changes expected
Changing Environment:Reporting & Analysis Changes
FHWA will be treating some data differently
On-highway public diesel useAlternative fuels reportingLoss allowance treatment
Reporting changesComputer securityData uniformityState responsibilities
Changing Environment:Gasohol Revenue
Hot topic in reauthorizationAmerican Jobs Creation Act of 2004
Highway Trust Fund compensated for gasohol subsidyHow this will be treated administratively is still to be determinedWill mean increased revenue to the Trust Fund
Changing Environment:Fuel Tax Evasion
Federal law changesMobile machineryAviation grade keroseneDye injection equipmentIntercity busesPipeline/vessel registrationOther administrative changes
Contact: Linda Morris at FHWA
In Summary
Identified and discussedAccomplishmentsChallengesChanges in the MF environment
FHWA Motor Fuel Reporting:
Data Submittal Process
Discussion of Improvements
Background I
2002 and beyond motor fuel data submitted electronicallySubmitted by State DOT’s, DOR’s, or FHWAForm 551M submitted monthlyForm 556 submitted annually
Background - II
Reported using Smart Input ToolSubmitted using
Spreadsheet view Wizard viewDirect XML
Instructions for reporting – Guide to Reporting Highway Statistics – Chapter 2
Motor Fuel Reporting
We begin here……..
Motor Fuel Reporting
Gallons from tax returns of sellerDepending on point of taxation in State:
Terminal HoldersWholesalersRetailers
Motor Fuel Reporting
Gasoline and Gasohol Gross Volume Reported Includes:
Fully taxed Exempt salesFully refunded salesPartially exempted salesPartially refunded salesTaxed at reduced ratesAssessments
Motor Fuel Reporting
Diesel and LPG Gross Volume Reported Includes:
Only Highway Use of Diesel and LPGInclude Public Use DieselRevised Chapter 2 of Guide – March 2003
Motor Fuel Reporting
Other State Fuel DataAlternative fuels
Per gallon equivalentRegistration fees in lieu of per gallon taxes
Aviation FuelsTransit Fuels
Motor Fuel Reporting
Consistency in Data Entries
Enter text and data on same line each month
New text and data - Identify the entry in the comments section on page 2
Motor Fuel Reporting
New Feature in DBMS
Data that is incorrectly submitted will be rejected
State will be notified that their submittal has been rejected and comments to explain why
Motor Fuel Reporting
Stop reporting Off-Highway Diesel fuelEnter zero or nothing in the cell(s)Remember to remove the gallons from the Highway Diesel/LPG Gross Volume Reported in line 1
Motor Fuel Reporting
Report current State tax rates every January, and in any month there is a changeEnter all rates that apply in your StateEnter the effective dateImportant because the FHWA DBMS uses these entries as input
Motor Fuel Reporting
Form Section Defaults Allows you to:
Customize the form for your StateSet a time period for the custom settingsRevise the settings if your State legislature changes motor fuel tax law
Motor Fuel Reporting- Conclusions
Report accurate dataEnter text and data consistently each monthUse Form Section DefaultsEnter tax ratesStop reporting off-highway dieselNew Procedure – FHWA ability to reject dataRevised Chapter 2 – March 2003