WASHINGTON, D.C. – Senator Kay Bailey Hutchison (R-Texas), the Ranking Member on the Senate Commerce, Science, and Transportation Committee, received praise for her legislation to allow states to opt out of the Federal Highway Program from Ned S. Holmes, Texas Transportation Commissioner and Chairman, Transportation Transformation Group.  Under the legislation, opt-out states would be rebated gas tax dollars generated within their borders to use on surface transportation projects, rather than receiving funding for highway maintenance and construction via the federal formula.  Sen. Hutchison’s bill is cosponsored by Senators Mel Martinez (R-FL), John Cornyn (R-TX), and Jon Kyl (R-AZ). Companion legislation is being introduced in the House of Representatives by Rep. Jeff Flake (R-AZ). 

The following exchange took place during a Senate Commerce Committee hearing today on the future of surface transportation:

Senator Kay Bailey Hutchison: Mr. Holmes, in your testimony you have said that the federal government is many times an impediment to being able to build the highways that are needed in a high-gross state like Texas and you proposed some solution from your transportation research group. The bill I have introduced today would allow states to opt-out with the requirement that they maintain the federal highway system, but then allow them to make other choices in transportation needs with their own transportation dollars.  What are your thoughts about legislation like that?

Ned S. Holmes, Texas Transportation Commissioner and Chairman, Transportation Transformation Group: It sounds, Senator, as though that bill would provide significant increased flexibility to the states to design and implement their systems in accordance with the appropriate federal standards, and I think that would be a tremendous benefit.  Basically, there’s not enough money and there’s not enough flexibility and it takes too long to produce a new asset.  Thirteen years to produce a new roadway is incredibly counter-productive.  To shorten that cycle, to provide more money, and more flexibility would be a great benefit.

The Highway Fairness and Reform Act of 2009, S. 903, would give states the option to opt out of federal highway program, which doles out funding on a revenue-sharing basis. Instead, opt-out states would receive a rebate on federal fuel taxes collected in their states. The bill is designed to ensure a dollar for dollar return on gas tax revenue generated by a state.

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