$580 billion transportation bill would tweak TIFIA, add Highway Trust Fund fee

Reason Foundation

House transportation leaders late Sunday released a long-awaited surface transportation bill that features an electric vehicle fee to shore up the Highway Trust Fund and tweaks infrastructure financing programs like TIFIA while banning federal support for California's bullet train until the project is investigated.

The Building Unrivaled Infrastructure and Long-term Development for America's 250^th, or BUILD America 250 Act, would include the largest-ever investment in bridges, totaled at $50 billion. It would trim permitting requirements for certain projects and dial back the unprecedented number of discretionary grants in the current transportation law, the Infrastructure Investment and Jobs Act.

The bipartisan bill, released late Sunday by House Transportation & Infrastructure Committee leaders, would allocate $580 billion over the next five years for highway, trains and public transit.

That's up slightly from the $550 billion that went to surface transportation in the IIJA, although a significant portion of the new money would be contingent on future appropriations.

Funding for Highway Trust Fund programs would total $474 billion from fiscal 2027 through 2031. The money is provided through "contract authority," which is considered mandatory, rather than discretionary, spending. The remaining $106 billion would go to programs financed by general revenue in the annual appropriations process, which means they would have to compete with other priorities.

The IIJA will expire at the end of September, and lawmakers are hoping to pass reauthorization ahead of the expiration.

A markup is tentatively set for Thursday.

The 1,005-page bill does not address tax-related provisions closely watched by the municipal market like the private activity bond cap. A potential lifting of the $30 billion PABs cap would come later when the House Ways and Means Committee releases the bill's revenue portion, said Marc Scribner, a senior transportation policy analyst at Reason Foundation.

"We don't know what Ways and Means is going to do and we also don't know what the authorizers in the Senate are going to do and then what the Senate Finance Committee is going to allow," Scribner said. There's no set date for Ways and Means to release its portion, although it could come next month, he said.

The Senate Environment and Public Works Committee and Committee on Commerce, Science and Transportation are the main panels that will craft the bill on the Senate side, while the finance committee will take up the revenue-related provisions.

The bill "doesn't do a lot — I was hoping for more," Scribner said. "The big numbers you do see are them following through on adjusting the share of contract authority versus discretionary programs, which was a stated priority of Chairman Graves," he said. "It's not back to pre-IIJA [contract authority] levels but it's certainly not an endorsement of the greatly expanded role of discretionary grant programs that was in the IIJA."

Lobbying groups like the American Public Transportation Association and the American Association of State Highway and Transportation Officials were still digging through the bill Monday and declined to immediately comment.

The bill would revamp the Transportation Infrastructure Finance and Innovation Act program by widening eligibility to drayage trucks — which move freight short distances between ports, warehouses, or intermodal terminals — as an eligible project.

It also authorizes the use of up to 15% of TIFIA funds for airport-related projects.

The Build America Bureau, which oversees TIFIA, would be required to accept a "qualified institution's creditworthiness analysis on behalf of a TIFIA applicant in combination with the Build America Bureau's own creditworthiness analysis," according to the bill summary.

The concept of a federal infrastructure bank would get some attention under a provision that calls for a two-year study by the National Academies. The study would review "potential forms of credit assistance, examine the potential financial benefits a Federal Infrastructure Bank offers, and analyze best practices of other infrastructure banks," the summary said.

The proposed electric vehicle fee would set the fees initially at $135 and $35; starting in 2029, the fees would rise every other year by $5, topping out at $150 for EVs and $50 for hybrid. The EV fee is the Highway Trust Fund's "first new stream of revenue for infrastructure in over three decades," House T&I chair Rep. Sam Graves, R-Mo., said in a statement.

"I believe the BUILD America 250 Act is the most important surface transportation bill since President Eisenhower built the Interstate Highway System," Graves said. "Like the America 250 celebration this year, this bill is not simply about honoring our past — it's about moving forward and building upon the legacy of our nation's infrastructure."

The Highway Trust Fund, mainly funded through federal gas and diesel taxes, has long been insolvent, requiring general fund transfers to remain alive.

The bill would allocate $87.6 billion from the mass transit account of the Highway Trust Fund over fiscal years 2027 to 2031. That's up from $69.8 billion in the IIJA.

It would send $65 billion to rail programs and $41 billion to discretionary grant programs. Amtrak would see grants of $10.4 billion for the Northeast Corridor and $20.7 billion for the national network.

The measure prohibits any federal grants, awards or financial assistance to the California high-speed rail project for two years while a working group conducts a "comprehensive assessment" of the project.