Government Taxation, Spending, and Debt
Congress faces a deadline to renew federal transportation policy while the system that pays for it faces a longer-term funding gap.
What to Know
- Federal highway programs under the Infrastructure Investment and Jobs Act expire on September 30, 2026.
- The House committee approved its proposed five-year replacement, the BUILD America 250 Act, by 62–2 in May.
- The proposal would authorize highway, bridge, transit, rail, freight, and safety programs for fiscal years 2027 through 2031.
- It would create annual federal registration fees of $130 for electric vehicles and $35 for plug-in hybrids.
- The Congressional Budget Office projects that Highway Trust Fund balances will be exhausted in 2028 without further action.
Federal transportation law may sound distant from daily life, but it helps determine how states plan highway repairs, bridge replacements, freight corridors, transit improvements, and road-safety projects. The Federal Highway Administration says the IIJA provides the basis for its programs and activities through September 30, 2026.
Federal Highway Administration
That date does not mean every project stops on October 1. States and local governments can continue work supported by funds already obligated under existing agreements. But Congress must either pass a new authorization or approve a temporary extension to provide the next round of federal direction and funding certainty. The immediate deadline therefore raises a broader question: what should the next transportation law fund, and how should the country pay for it?
Why the Deadline Matters Beyond Washington
Federal authorization gives state transportation departments a framework for allocating federal aid, advancing multi-year projects, and scheduling construction. For commuters, the effect may appear gradually through road conditions, bridge repairs, safer intersections, or transit reliability. For businesses, the stakes include the routes that move food, fuel, manufactured goods, and delivery shipments.
The uncertainty matters most for projects that require long planning timelines and coordination among federal, state, local, and private partners. A short-term extension can avoid an immediate break in federal authority, but it offers less certainty than a multi-year law when agencies and contractors must make staffing, procurement, and construction decisions.
That practical need for predictability explains why the House Transportation and Infrastructure Committee has advanced a replacement proposal. The next question is what the proposal would change from current law.
What the BUILD America 250 Proposal Would Do
The House committee approved H.R. 8870, the BUILD America 250 Act, by 62–2 on May 22. The measure is a proposal, not current law: it still requires approval from the full House and Senate, followed by the president’s signature.
Proposed federal registration fees under H.R. 8870. Congressional Budget Office.
The committee’s official section-by-section summary says the bill would authorize federal-aid highway and related programs from fiscal year 2027 through fiscal year 2031. It would revise bridge programs, freight corridors, roadway safety, project delivery, transit, rail, and motor-carrier policy.
For freight, the proposal would refocus the National Highway Freight Program on high-priority corridors and require states to designate critical rural freight corridors. For commuters and local communities, it would continue federal involvement in roads, bridges, transit, safety, and planning. It also includes a framework for autonomous commercial motor vehicles.
These choices describe where Congress may direct transportation dollars. They do not resolve the separate question of whether the Highway Trust Fund can support that spending over time.
The Funding Problem Behind the Bill
The Highway Trust Fund has traditionally relied heavily on federal taxes on gasoline and diesel fuel. According to the Congressional Budget Office’s June 2026 analysis, those revenues have fallen short of spending for more than two decades, requiring transfers from the Treasury’s general fund. CBO projects the fund’s balances will be exhausted in 2028.
The underlying challenge is structural. Fuel-tax revenue declines when vehicles use less fuel per mile or use no gasoline at all, while construction, maintenance, and freight needs continue. The Government Accountability Office has found that higher fuel efficiency and more alternative-fuel vehicles have reduced gas-tax revenue, while states have tested mileage-based user fees as one possible alternative.
H.R. 8870 would impose an annual $130 registration fee on covered electric vehicles and a $35 fee on covered plug-in hybrids. However, CBO’s July estimate of the bill says the bill would not require those fees to be deposited in the Highway Trust Fund. That distinction matters because a new fee does not automatically solve the fund’s solvency problem unless Congress specifies where the revenue goes and how it fits into the overall financing plan.
How Congress handles that funding gap will shape its response to the September 30 deadline.
What Happens if Congress Needs More Time
Congress has used short-term extensions before when lawmakers needed more time to negotiate a full transportation package. In August, the Electrification Coalition urged congressional leaders to extend fiscal year 2026 authorization and funding levels while negotiations continue. That is an advocacy recommendation, not a congressional decision.
A temporary extension could maintain continuity while Congress works through disagreements over program priorities, electric-vehicle charging, freight policy, project permitting, transit, and the Highway Trust Fund. A five-year law, by contrast, would give states and transportation providers a clearer planning horizon.
The trade-off is straightforward. An extension reduces the risk of an immediate lapse, but it postpones the choices needed to establish a durable funding strategy. A long-term bill can provide certainty, but only if lawmakers agree on both the policy framework and the revenue needed to support it.
Wrap Up
September 30 is a deadline for federal transportation authority, not a single-day test of whether every American road remains open. Its larger importance is that Congress must decide how to continue programs that affect commuters, freight carriers, construction workers, state agencies, and local communities.
The BUILD America 250 Act shows the House committee’s current approach, but it has not become law. As Congress considers a full replacement or a temporary extension, the lasting issue will remain the same: how to maintain roads, bridges, transit, and freight networks when the fuel-tax system no longer produces enough revenue to support projected spending.