Under the leadership of new Chairman David Rouzer (R-NC), the House Subcommittee on Highways and Transit held their first hearing of the 119th Congress on Wednesday of this week. The hearing, titled America Builds: Highways to move People and Freight, was focused on the many issues around highway project delivery and freight movement with an emphasis on how we can use Infrastructure Investment and Jobs (IIJA) learnings to feed into a 2026 surface transportation bill.  

The committee invited the following witnesses to provide testimony (click on their name to see their written testimony): 

• Jim Tymon, Executive Director, American Association of State Highway and Transportation Officials (AASHTO) 

• Dennis Dellinger, President and CEO, Cargo Transporters, Inc.; and Chairman, American Trucking Associations, on behalf of the American Trucking Associations (ATA) 

• Janet F. Kavinoky, Vice President, External Affairs & Corporate Communications, Vulcan Materials Company, on behalf of the National Stone, Sand & Gravel Association (NSSGA) 

• Matthew Colvin, Chief of Staff, Transportation Trades Department, AFL-CIO 

Before getting into the nitty gritty of the hearing, in case you missed it, the Trump Administration issued an executive order on Monday of this week which was quite pertinent to the folks in this hearing room. Essentially, while now understood to have been an unclear order with intent to target certain programs like those related to electric vehicles (e.g., NEVI, etc.), the language of the order potentially halted ALL disbursements for programs in the IIJA as well as Inflation Reduction Act (IRA). This included pausing all obligations and reimbursements from the Federal Highway Administration (FHWA).  

While the issue was resolved a few hours later, via an OMB memo of clarification, this was discussed multiple times throughout the hearing – particularly by democratic committee members. There are not expected to be any impacts. If you are a lucky ETW subscriber, you can check out Jeff’s more detailed breakdown of it from earlier this week.  

Planning for 2026 

The IIJA was signed into law by President Biden in November of 2021, and for highways specifically, the legislation provided $348 billion for highways. In opening statements, Chairman Rouzer noted that the increase from the five-year average of the 2015 FAST Act to the IIJA was a “staggering” 62 percent for highway programs. While Rouzer hinted at the idea that today’s pockets may not be as deep as they were in 2021, many in the room, including the witness from AASHTO Tymon, were of the opinion that we have underinvested in transportation for decades and IIJA funding levels should now be viewed as a starting point from which we continue to grow transportation funding dollars.  

While funding as a whole is one of the primary focuses for those in the transportation space, the hearing provided an opportunity for witnesses to discuss the challenges and opportunities they saw with IIJA disbursements and how these processes could be improved in a 2026 bill to better serve states and local communities, as well as the traveling public and one of the nation’s key roadway user groups – truckers.  

Transportation Spending and Project Delivery 

Under the larger umbrella of transportation spending and project delivery, there were numerous issues discussed including formula versus discretionary dollar allocation, federal regulation and red tape, impacts of inflation, project delay costs, permitting and the National Environmental Policy Act (NEPA), issues with August redistribution, and the general need for a multiyear piece of legislation.  

Formula Funding vs. Discretionary Funding (Related: Red Tape) 

One of the primary topics discussed in the hearing was the prevalence of different discretionary spending dollars disbursed to states and the consistent difficulty in actually spending those dollars. Tymon referenced a Congressional Budget Office (CBO) report which noted that an estimated 67 percent of formula dollars provided to state departments of transportation (state DOTs) by IIJA were spent out within the first two years. Conversely, discretionary spending, during the same timeframe, was between 1 and 7.4 percent.  

The federal application requirements and red tape has stifled the ability of state DOTs to actually spend this money, leaving much of this funding on the table. And as we all know, the longer we wait the more expensive a project becomes, decreasing the overall purchasing power of these funds. Members all seemed to be in agreement (it is hard to argue with the CBO numbers), but the only comment of note was from Rep. Larsen (D-WA) in his back-and-forth with Tymon. He acknowledged the very slow spend out of discretionary funds but did point out that these dollars were addressing projects that otherwise would not have been touched, like a culvert project in his district.  

Inflation and Project Delays  

Inflation and project delays were a theme throughout the hearing. It is no secret to anyone in transportation that the costs of highway projects have skyrocketed in recent years. In his testimony, Tymon noted this again flagging the 70 percent increase in highway construction cost in the last four years as a major challenge for government and the private sector alike. Janet Kavinoky echoed this concern from the aggregate and construction perspective, stating that the construction industry just does not want delays given how incredibly costly they become.  

The relationship between project delivery, permitting, construction delays, and inflation is an intertwined, and costly, ordeal. If a project has gone through the planning processes, like environmental review, and been slated for completion at a certain price point, any delay further increases that cost. 

Permitting and NEPA 

Again, NEPA is one of the most often discussed issues in the permitting process for project delivery. Spoiler: the NEPA process is slow, but NEPA is the environmental impact process required in the project planning phase. In certain situations, like the Francis Scott Key Bridge collapse from last year, there are ways to expedite NEPA in emergency situations. Rep. Stauber (R-MN) mentioned another example which was the I-35 bridge collapse in Minnesota in 2007. The bridge collapsed in downtown Minneapolis and was replaced in 13 months – a process which likely would have taken 8-10 years if it had gone through the traditional NEPA process.  

While the NEPA process can be time consuming, some states like Texas (my beloved home state), Utah, and California have entered into the pilot program which allows the state to manage the NEPA process rather than the federal government. This does help with the flow of the NEPA process but requires states to waive their sovereign immunity, which many states are not willing to do. Tymon discussed the Georgia process as an alternative, and he discussed how Georgia relies on a collaborative model of co-locating personnel from the different permitting agencies in the same room. An untraditional approach, Georgia actually uses state dollars to pay federal agency employees in order to retain them for these review purposes. This has proven to help move projects through the pipeline while still retaining sovereign immunity protections.   

While everyone recognized the importance of NEPA and resource protection, the NEPA process was flagged as something that could be revisited, along with other resource protection laws, to expedite review and get projects out the door on a more reasonable timeline. 

August Redistribution  

During his allotted time, Rep. Pappas (D-NH) dug into the issue of the August redistribution process with Tymon. At the start of each fiscal year, FHWA reserves an ever-increasing share of the total annual funding to cover its own non-formula programs. In August of each year, FHWA figures out what obligation authority it has left over from those non-formula programs, shuts the programs down until October 1, and gives the rest of the money to states if the state says it can get the money obligated by September 30.

Tymon expressed concern that the FHWA process for redistribution of funds in August is broken. While it is intended to disburse a smaller sum of money back to DOTs that can use these funds very quickly, last year $8.7 billion, or 14.5 percent of the entire federal highway program, was doled out during the redistribution process. While states were better able to utilize those funds this year due to a long pipeline of projects ready to go, there is a greater likelihood of seeing a lot of funds lapse in the future.  

Multiyear Legislation 

Also unsurprising was the witness perspective that a five-year piece of legislation is the most ideal for state DOTs, local governments, and private partners alike. The existence of a multiyear bill provides funding certainty for DOTs which enables them to better engage with metropolitan planning organizations (MPOs) and localities for project delivery. Funding certainty extends the planning horizon and enables more complicated economically impactful projects into the capital plans of states.   Additionally, this allows a greater level of security for planning with private partners, like those in the construction and aggregates industries who are planning operations for future years.  

Trucking and Labor 

As some of the nation’s most important roadway users, with a very vested stake in the quality of roads, highways, and bridges, the trucking and labor perspectives were valuable pieces of this larger conversation. As it pertained to trucking, the industry issues included safety and truck parking, driver access, the federal excise tax (FET) on trucking, emission mandates, and cargo theft.  

Safety and Truck Parking 

On more than one occasion during the hearing, ATA’s Dellinger repeated the notion that the best thing for truckers is investment in their working space – our roads and bridges. While there are many issues plaguing the trucking industry, continued investment in infrastructure enhances safety for truckers and allows them to do their jobs.  

Along with the infrastructure needs to enhance safety and increase mobility, one of the most significant issues for truckers right now is the lack of parking availability. Numerous pieces of legislation have been passed around the country, and the nation has acknowledged this as a critical need, yet parking and the safety risks of unsafe parking persist. Dellinger harped on this throughout the hearing, and Tymon echoed this as a challenge, flagging that DOTs are often limited by federal regulation and right-of-way limitations from being able to construct new rest areas and commercialize them with truck parking. 

Driver Access 

Although the trucking industry has seen some leveling of the truck driver shortage in recent years, the ongoing issue of attracting new drivers is a consistent challenge. The above issues with safety are a major limitation, potentially preventing some more vulnerable groups like younger drivers or women from considering the industry as a feasible career.  

The topic of age was also brought up numerous times throughout the hearing. There are 49 states which allow for commercial drivers licenses (CDLs) for individuals under 21 years of age, but legally, these individuals cannot cross state lines. The trucking industry perspective was that this is a major hindrance from recruiting the next generation of drivers that they can train from the get-go, but Colvin quipped that it is a bit of an oversight to say that 18- to 20-year-olds would solve trucking if they produce a subpar quality of job.  

Regardless, Dellinger and multiple members discussed the potential need to revisit the Drive Safe Act from 2018 or look into a new pilot program for engaging with younger drivers. Multiple members, Dellinger, and Colvin all discussed the need to train an emerging workforce with emerging technologies and evaluate and invest in all types of educational opportunities.  

Federal Excise Tax (FET) and Emission Mandates  

Why am I lumping these together, you ask? I shall explain.  

The FET on tractors and trailers was a big discussion point. For those unaware, during World War I, there was a federal excise tax placed on the sale of new heavy-duty trucks in an effort to help fund the war. While that seems logical, this is the highest FET in the nation at a hefty 12 percent. Dellinger rattled off some numbers telling members that this adds approximately $17,000 to each of their tractor purchases each year. For every 10 trucks purchased, they could actually purchase an 11th if this were repealed. For trailers, the tax is about $5,800 on those.  

To come full circle here, Dellinger explained how these high taxes can serve as a deterrent in adopting new technologies given the high up-front cost. This can prevent turnover of trucks with newer and better safety adaptations, but this can also stifle the adoption of more environmentally friendly models. Trucks have become 99 percent cleaner in the last 40 years due to engine advancements, but the initial cost can be prohibitive. More specifically for emissions, higher costs can drive some buyers to stick to what they perceive as more proven, or “safe,” options for investment (I’m looking at you, EV trucks).  

(Ed. Note: Dellinger was speaking on behalf of the big trucking fleets, but the FET is also an issue for the small owner-operators as well, because they usually buy the used trucks that the big fleets sell in order to buy new trucks. If the FET slows down the rate of new truck sales, then the used truck market dries up and owner-operators have to pay even more for their trucks due to price competition.)

Cargo Theft  

An increasingly prevalent occurrence, cargo theft has become highly problematic for the industry.  Thieves have taken multiple approaches to stealing cargo including posing as brokers, stealing outright, etc. Dellinger seemed almost exasperated when mentioned to Rep. Brian Babin (R-TX) that there are even truckloads of paper being stolen – anything and everything. While the problem will need a multilayer approach, Dellinger did say that a central clearinghouse for reporting these thefts would be helpful. In some cases, companies are required to go into the jurisdiction where the theft occurred for reporting, so consolidating these records would be a great first step.  

The Honorable Mentions 

While the many things mentioned above were my first and second team selections from Wednesday, I do have a couple of honorable mentions from the hearing. An ongoing and ever-present issue these days, Highway Trust Fund (HTF) solvency, was also on the docket. Multiple witnesses and members talked about the need for a long-term revenue solution for the fund – and the need for all users to pay into that fund (cough cough, EVs).  

Additionally, if you have not been tracking Vulcan’s ongoing issues with the Mexican government, that was an interesting side discussion during the hearing. Kavinoky primarily discussed aggregate operations and construction related to IIJA directly through the hearing but expanded on Mexico’s expropriation of the company’s limestone quarry when asked about it by Rep. Shomari Figures (D-AL).  

Takeaways 

The hearing was a productive opportunity for many stakeholders to share different ways the next surface reauthorization bill can be improved. Overall, the witnesses advocated for a multiyear bill with reliable funding levels, a reduction in red tape for actually spending those funds, transportation workforce investments, and some improvements for the trucking industry. While some of these fixes are easier than others, members recognized the importance of this conversation and expressed the desire to work with stakeholders through this process for the most effective legislation.