Bill Would Provide Continuity, While Leaving Longstanding Transportation Funding Issues Unaddressed

Last week, the House Transportation & Infrastructure Committee advanced its bipartisan BUILD America 250 Act (BA250) with a vote of 62-2. This bill gives us a first look at Congress’s priorities for transportation funding ahead of the Infrastructure Investment and Jobs Act (IIJA) expiration on September 30. 

While BA250 continues existing formula programs, it does not adequately address the significant infrastructure funding gaps for cities and transit agencies. As the House deliberations continue and the Senate develops its own bill, we hope lawmakers will use this opportunity to help close those gaps.

Business-as-Usual Spending

The vast majority of funding will continue flowing directly to state DOTs through formula programs. The bill allocates $376 billion to the Federal Highway Administration—an increase from IIJA’s $351 billion. Such programs are automatically distributed and are often used to support highway expansion efforts. City and transit priority projects receive a small portion of these funds through state-run competitive grants or Metropolitan Planning Organizations (MPOs). Formula funds are guaranteed spending for states; they may enter into binding contracts with that money, even before Congress releases the funds to pay for them.

Meanwhile, transit funding is slightly lower despite surging demand and a long list of projects waiting for funding. Compounding this, BA250 would subject transit projects to annual congressional appropriations—a hurdle not faced by highway and bridge projects. This makes it more challenging for local agencies to plan and build transit projects, as funding is not guaranteed. 

And, despite introducing new fees on electric and hybrid vehicles, the bill fails to structurally fix the Highway Trust Fund, which faces insolvency by 2028. Already, the Highway Trust Fund has received significant transfers from the General Fund to keep it afloat, including $118 billion from IIJA alone. The proposed fees on electric and hybrid vehicles may raise at most $30 billion while also discouraging the broader adoption of such automobiles.

Less Money, Fewer Guarantees for Cities 

Over its five-year span, BUILD America 250 cuts local discretionary grant access by $10 billion compared to the IIJA, leaving cities with fewer funding opportunities.

Many discretionary grant programs are eliminated in BA250, including RAISE/BUILD, Reconnecting Communities, and the Active Transportation Infrastructure Investment Program. Instead, a new Surface Transportation Accelerator Grants program would be available, worth about $12 billion over five years—pending annual appropriation.

The wildly popular and oversubscribed Safe Streets and Roads for All (SS4A) program would be retained, but available funding would be slashed from $5 billion to $3.75 billion. BA250 refocuses SS4A on implementation grants, allowing a maximum of 5% for planning and demonstration programs.

Also retained: Strengthening Mobility and Revolutionizing Transportation (SMART) grants, which have helped cities launch zero-emission delivery zones, make data-driven decisions about curb use, and understand near-misses to improve street safety. BA250 provides up to $500 million for this program.

The bill would also provide $9 billion for National Highway System bridges. A key win for local governments: states would be required to offer 25% of these funds to local agencies through a competitive grant process.

Concerning AV Preemption Language

Build America 250 would establish a framework for commercial vehicles to be equipped with higher levels of automated driving systems (ADS). Notably, this language would preempt states from regulating commercial vehicle safety, although it would allow states to develop their own laws and regulations related to cybersecurity or privacy. The rulemaking committee for automated commercial vehicles, as proposed, would not include the voices of city transportation officials—a crucial group of experts whose voices must be part of this conversation.

Cutting Red Tape

The bill does offer welcome bureaucratic relief through long-overdue reforms we’ve advocated for in our federal policy platform: 

• Expedited Capital Investment Grants (CIG) reviews for agencies with a proven track record of delivering similar projects. 
• Routine maintenance, active transportation, safety designs, and green infrastructure would be exempt from overly burdensome Historic Preservation reviews.
• BA250 would allow bus rapid transit projects to leverage private investment via the Transportation Infrastructure Financing and Investment Act (TIFIA) program.

The Path Forward

With IIJA set to expire in September, Congress still has some time to refine this legislation to truly support local communities. Lawmakers can secure reliable transit funding through advanced appropriations, increase the share of funding available directly to cities for local roads, and restore the many grants cut by the current administration. 

NACTO members can join our Policy peer network for more analysis of this bill and discuss with peers in our June 16 meeting.