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Obama administration sends U.S. transportation bill to Congress

WASHINGTON (Reuters) - The Obama administration on Tuesday sent a bill to Congress that aims to plug a looming shortage in funding for America's bridges, roads and transit systems, but likely opposition from Republican lawmakers make its prospects uncertain.

Funding for the four-year, $302 billion legislation would come partly from ending certain tax breaks for businesses, a provision opposed by many Republicans. Transportation Secretary Anthony Foxx said the administration would be open to other ideas to raise the money.

"At the end of the day, the important thing is that we pass a bill that avoids a destructive collapse in funding that would threaten hundreds of thousands of jobs and inflict unnecessary damage on our economy," Foxx told a media teleconference.

The Highway Trust Fund traditionally has been bankrolled by taxes on gasoline and diesel, but with fuel use stagnant the fund is not bringing in enough revenue to cover the nation's infrastructure needs. It is projected to run out of money as soon as August.

Congress has all be ruled out raising the 18.4-cents-a-gallon tax on gasoline and the 24.4-cents-a-gallon levy on diesel, which is the main source of funding for the trust fund.

Foxx said some states are already canceling or delaying transportation projects "because of the uncertainty at the federal level."

The administration's proposal would address the trust fund's looming shortfall and provide an additional $87 billion to pay for a backlog of infrastructure repairs such as structurally deficient bridges and aging transit systems.

A report last week by the American Road and Transportation Builders Association estimated that roughly one in 10 U.S. bridges - more than 63,000 - is in urgent need of repair. Many are part of the interstate highway system.

To help boost transportation funding at the state level, the legislation would loosen rules on when states are permitted to establish tolls on interstate highways.

The bill would also give a boost to the National Highway Traffic Safety Administration's efforts to oversee automotive safety. It would increase to $300 million from $35 million the civil penalties that NHTSA can levy against automakers who fail to act quickly on vehicle recalls.

NHTSA is currently investigating why General Motors waited until February to recall 2.6 million cars for faulty ignition switches when it first learned of the defect more than 10 years ago.

Peter Rogoff, acting under secretary of transportation, said the bill would also give NHTSA stronger authority to require that automakers remove vehicles from the market when a defect is first discovered.

He said bill closes a loophole in current law so that rental car companies would have to pull cars from service as soon as a recall is issued.