UPDATE 2-Obama pushes ahead with transport fund rescue

* $20 bln proposal seeks to tap general tax revenues

* Gov't would seek to repay taxpayers with new revenues

* Infrastructure bank would be independent entity (Adds details on bank, congress returns next week)

By John Crawley and Lisa Lambert

WASHINGTON, July 1 (Reuters) - President Barack Obama is pushing ahead with plans to shore up dwindling federal reserves for highway construction and establish a government-run bank to pay for future transportation projects.

Documents obtained by Reuters late on Wednesday detailed Transportation Department proposals for injecting $20 billion of general tax revenue into a federal trust for highway and transit infrastructure projects, and outlined Obama's longer-term plan for ensuring financial backing for new initiatives.

The administration foresees the Highway Trust Fund, which relies on federal gasoline tax receipts, running dry in late August or early September. The administration proposes to replenish it over 18 months while Congress develops a six-year blueprint for transportation priorities and funding.

The current law authorizing federal spending on highway projects expires Sept. 30.

Officials at the Transportation Department said in the documents sent to Congress that lawmakers should approve the stop-gap measure before their next recess in August to avoid further strain on state budgets.

The administration also released details of Obama's vision for a national infrastructure bank, a centerpiece transportation initiative he promised to pursue during his campaign for president that was broadly described in his proposed budget this spring.

The bank would be an independent entity within the Transportation Department and would at first only focus on rail, highway, bridge and waterway projects.

The administration said in the documents that the bank could later include energy, water and telecommunications infrastructure.

In his budget, Obama asked for $2 billion this year and $5 billion next year to establish a bank that would give grants and make loans for projects that cross state lines or combine different modes of transportation.

The documents explained that state and local governments could apply for financing for projects worth at least $25 million and an oversight board on non-governmental advisors would decide how to distribute money based on the projects' merits, instead of by formula.

In the documents, the administration said the bank would not have authority to borrow from capital markets, since only the U.S. Treasury Department can borrow on behalf of the government, and can do so more cheaply and efficiently.

Congress returns from its week-long July 4 break on Monday and members influential on transportation matters have pledged to quickly address the trust fund shortfall.

As the gap became clearer in recent weeks, some senior members said any emergency remedy should be shorter than 18 months. They believe Congress must expedite its consideration of permanent funding solutions in the six-year transportation bill.

Administration transportation planners proposed on Wednesday to draw $18 billion from general tax revenues for highway construction spending and $2 billion for transit projects initiated by states through the early part of 2011.

Officials plan that the money be repaid over 10 years. The administration said it would support a range of options for covering reimbursement.

They also want to revise some criteria used to select the projects that receive federal support, including adding requirements for more data on project needs and costs and more transparency in how money is spent. (Reporting by John Crawley and Lisa Lambert; Editing by Steve Orlofsky, Bernard Orr)