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This quote appears to have been written in 1982. Under normal circumstances, the US's Highway Trust Fund gets all its money from gasoline sales taxes. However, in 1982 the amount hadn't been raised in nearly 30 years. This amount was clearly no longer sufficient, as congress at the end of that year felt the need to essentially double it.
I'm not familiar with the "trade-in" provisions, but according to the linked text, it looks like they were more of an uncodified practice rather than a part of the law. In other words, you go to Congress and say you'd like to take your portion of federal highway funds in cash, then if Congress approves, they pass a law giving you the money (from general funds), leaving the trust fund alone.