The House bill that was released yesterday starts with a roughly 300 page highway title: here are my six main take-aways from that title.

1 – We Don’t Talk About Climate, no no no

IIJA proponents made a major talking point about it including the first ever climate title in a surface transportation bill. This bill appears intent on erasing as much of it as possible. IIJA’s climate title included six programs – below is their status in this new bill:

• Grants for Charging and Refueling infrastructure – zeroed out, but with a CMAQ set-aside established;
• Reduction of truck emissions at port facilities – repealed;
• Congestion Relief program – repealed;
• Carbon Reduction Program – repealed;
• PROTECT program – formula grants repealed, but with subset of eligibilities added to STBG, and discretionary grants continued;
• Healthy Streets program – repealed.

Several other climate-related provisions also met similar ends. The Low-No Emission program set-aside remains an eligibility within the Bus and Bus Facilities program at FTA but is no longer a set-aside. Several other provisions were completely repealed including the Active Transportation Infrastructure Investment Program, and the Electric of Low-Emitting Ferry Pilot Program, both from IIJA, and the Neighborhood Access and Equity Grant program that was created in the Inflation Reduction Act. (Funding for environmental review at FHWA, also from IRA, was also repealed.)

The only real preservation of the climate title is achieved by creating a CMAQ set-aside for charging infrastructure of 10 percent in year 1, which steadily decreases. The way highway apportionments are calculated, FHWA calculates each states’ base apportionment, e.g. the total amount of federal aid highway formula dollars they’ll receive, and then CMAQ is one of the programs calculated first. The percent of funding that a State receives as CMAQ dollars varies fairly widely, based on the number of non-attainment areas that the state had back when CMAQ and all the other programs were calculated using formula factors. So as a result, this set-aside will be significantly larger percent of their overall apportionment in states like California than it will be in states like Wyoming.

In fact, the words “emission” and “climate” don’t appear a single time in the bill, and the despite preserving certain eligibilities for EV charging infrastructure, the only actual reference to charging infrastructure that appears in the bill is part of a prohibition on using any of the new truck parking grants in a way that could enable construction of charging infrastructure.

On the other hand, electric vehicles are mentioned—in the context of a new $130 annual registration fee on EVs (and a $35 fee on hybrids) that state DMVs will be required to collect or face a penalty to their apportionments.

2 – Bridge program is back (again)

A not insignificant amount of discussion about the merit of having specific amounts of funds set aside for bridges led to the removal of a bridge formula program 14 years ago in MAP-21. The authors of the FAST Act held strong and allowed State DOTs to continue to have their flexibility with regard to bridges. But then in 2018 appropriators decided to create their own bridge program with a formula to benefit small states and ever since there have multiple bridge programs created. IIJA created the Bridge Investment Program – a discretionary bridge program modeled on New Starts, and Division J created and funded the Bridge Formula Program, apportioned based on the costs of repair.

This bill repeals and replaces the Bridge Investment Program and discontinues funding for the Division J program. In their stead are a new apportioned bridge program and a competitive bridge program.

The new bridge formula program has a clear formula that ensures that each state receives $75 million and also receives at least the amount they were receiving in the IIJA bridge program, and then distributes funding based on both the amount of bridge area in each state as well as the amount of poor condition bridge area. The new bridge program also has a set-aside for off-system bridges and a requirement for States to run a competitive grant program for locally-owned bridges with a portion of the funding. There are also two set-asides before apportionment for the Secretary to run a culvert grant program and for tribal bridges. The bridge program is not technically part of the total funding for the Federal-aid Highway Program apportioned under Section 104, and funds may be treated somewhat differently from the core formula programs. For instance, the bill specifies that funding can’t be transferred unless the Secretary determines there aren’t eligible bridge projects on which to spend the money.

The bridge competitive program has certain similarities to the “large bridge” grants under the IIJA Bridge Investment Program, but significantly simplified in structure. The grants will be solely for NHS bridges, with a minimum of $50 million grant size, and the share coming from the grants limited to 50 percent of costs, although other federal funds can also be contributed. The program also allows for multiyear agreements, without the structure of creating a pipeline of projects in a report to Congressional appropriations.

The new bridge formula program funded with contract authority marks the first time there will be a program distributed to states based on formula factors (other than the rail-highway grade crossings set-aside) since 2012.

 3- A new approach for cities

One of the more striking changes in the bill is the new approach to local funding. Currently, the Surface Transportation Block Grant, including the Transportation Alternatives Program set-aside, and the Carbon Reduction Program are apportioned to states but a portion of those dollars must be suballocated by population, e.g. spent in certain geographic areas of the state based on population. In the largest metro areas – those above 200,000 people, the metropolitan planning organizations (MPOs) develop the Transportation Improvement Program (TIP), and statute affords more direct control over project decisions to the MPO for the area rather than the State DOT. But this has been a source of tension, with metropolitan areas seeking greater degrees of control and autonomy.

In this bill, in addition to suballocating contract authority, the bill requires suballocation of the obligation limitation to MPOs and further allows that the funds be made available for a 2-year period rather than the standard one year.

Even more significant, the bill directs the Secretary to establish a process to allow MPOs to qualify as a direct recipient of apportioned funds, and to be the direct recipient for the metropolitan planning (PL) funds.

The bill also creates a new planning term of “primary urbanized area” which is a city of 3.5 million people or more, or a bistate city of at least 200,000. However beyond the definition, the term is not used in the highway title.

4 – A new approach for discretionary grants

IIJA came under a fair amount of criticism for the number of discretionary grant programs it created and funded, and this bill responds to that context by repealing and consolidating a large number of those programs. This bill defunds the contract authority from INFRA, and replaces the Rural Grants program with a new program with the great acronym STAG (Surface Transportation Accelerator Grants) that seeks to be the one discretionary grant program to rule them all. The program is divided between rural, urban, and regional/local projects, with broad eligibility for applicants, and also broad eligibility for project types.

The urban grants appear to be the backdoor through which the Reconnecting Communities pilot program can remain funded, as the program allows eligibility for the grant programs under Subtitle E of IIJA Div A title 1, e.g. Miscellaneous, which includes very few grant programs: the grant programs listed in that subtitle are the Stopping Threats on Pedestrians, Reconnecting Communities Pilot Program, the Invasive Plant Elimination Program, and the Pollinator-friendly practices on roadsides and highway rights-of-way. The same subtitle also included the Active transportation infrastructure investment program, but as noted this provision of IIJA is repealed.

Presumably as an effect of being produced by the House T&I Committee’s more rational jurisdiction, the STAG discretionary grants are much more multimodal than most discretionary grants produced by the Senate. Grants from this contract authority program can be used to support any public transportation project, any passenger rail or freight rail transportation project. Funds can also be used on projects eligible under RAISE and the culverts program in title 49.

The discretionary grant program is also notable in the way that it is somewhat less discretionary than usual, including language that the Secretary shall select grant recipients based only on the selection criteria described in the program.

Another discretionary grant program – the Safe streets for all program – also escapes repeal and is continued in this bill, but with the jurisdiction rightfully transferred from the Commerce Committee’s purview to being codified in Title 23 and funded by contract authority making it clearly the domain of the Environment and Public Works Committee.

5 – Flexibility … mostly

Some say safety is the top priority, but one might be forgiven for thinking that in fact flexibility is the true top priority for the highway programs, and this bill largely continues that approach, maintaining flexibility and transfer authority between formula programs and keeping eligible activities broad, and removing certain reporting requirements. Eligibility is broader specifically for multimodal activities – a state will now be able to use up to 5% of their STBG apportionment for planning, design, construction, and improvements associated with a passenger rail station or equipment that serves a State-supported route.

Flexibility is also achieved through changes to the federal share. Recipients will have a higher share of federal funds for numerous programs, including making metropolitan planning a 95% federal share program, and allowing HSIP to be considered non-fed share for STBG if the project is for a proven safety countermeasure for bicyclists or other complete streets projects or to protect vulnerable road users.

The bill also includes new large steps toward even greater flexibility for States, by allowing STBG to achieve their federal share compliance on a programmatic basis or across multiple projects, and by creating a pilot program for block grant a state’s entire apportionment of the entire Federal-aid highway program for up to 10 states.

On the other hand, the bill includes the first new penalty associated with the performance management structure put into place in MAP-21. Under this bill, states with noncompliant State asset management plans will face a lower federal share of 65 percent until they correct their deficiencies. States will also be subject to greater transparency requirements if they choose to set safety targets that are regressive, e.g. would target an increase in fatalities and serious injuries.

The TIFIA provisions of the bill also embrace greater flexibility, allowing an alternative credit assessment as a from of creditworthiness verification.

6 – Multimodal Streamlining

Every modern reauthorization bill includes a streamlining subtitle and this one is no different. Notably, the bill includes an exemption from both 4f and Section 106  of the National Historic Preservation Act (except for projects that affect tribal lands), for all projects listed in the Advisory Council on Historic Preservation’s program comment on sustainable transportation from 2024 that had not been adopted by USDOT.

Many of the other streamlining provisions are catching the highway title up to changes made to NEPA in the Fiscal Responsibility Act and other changes made since 2021. The most significant changes are designed to produce modal parity for streamlining provisions that already exist for highway projects and State DOTs. For instance, the bill allows a “Planning and Environmental Linkages” structure for rail, enabling agencies to exclude alternatives under NEPA if they were considered in part of a State rail plan under chapter 227 of title 49. It also allows transit providers to assume responsibility for categorical exclusions under the existing Section 326 of title 23, and allows transit projects to include costs of real property acquisition prior to completion of NEPA, similar to the authority that already exists for highway projects. Another section also broadens the existing structure for programmatic agreements from MAP-21 sec 1318, which allows a state DOTs to determine whether a project meets the definition of a CE on behalf of FHWA – states would now be able to enter such an agreement with FTA and FRA as well.

The bill also would double the legislated CE that excludes projects of “limited federal assistance” to include projects receiving $12 million or less in federal funds (up from $6m) out of total project cost of $70 million of less (up from $35 m).

Additional streamlining provisions will be found in the TIFIA section, which adds a categorical exclusion for TIFIA TOD projects.

Other provisions of note

Rules that are exempt from rules:  The bill establish a few transportation rulemaking committees that are exempt from FACA rules. That includes a new rulemaking committee on roadside safety hardware. Another rulemaking committee would provide recommendations to revise Federal regulations to prevent and protect against anticompetitive practices in bidding on Federal-aid highway projects, with representatives from engineering associations, construction associations, materials associations, technology associations, and other business associations, and labor unions, along with state DOTs.

The Disadvantaged Business Enterprise set-aside provision of law became a target of the current administration, and this bill semi-preserves it but gives the authority to the Secretary to develop and publish “objective criteria to establish how State governments and unified certification programs will evaluate whether an individual qualifies as socially and economically disadvantaged.”