By: Justin Gordon

Congress is determining what comes next for federal surface transportation programs as the Biden era Infrastructure Investment and Jobs Act (“IIJA”) approaches expiration.[1] Although Congress has temporarily extended the IIJA’s authority through December 11, 2026, that temporary measure does not resolve the longer-term structure of those programs.[2] Lawmakers therefore continue to debate a replacement framework through the proposed Building Unrivaled Infrastructure and Long-term Development for America’s 250th (“BUILD America 250”) Act.[3] That bill would authorize funding through 2031 for federal programs involving highways, transit, rail, freight, and transportation safety.[4] While public discussion of the BUILD America 250 Act focuses on the scale of those transportation investments, business leaders and their legal counsel considering whether to pursue the resulting projects should ask a more specific question: “How much of that funding is legally available?”[5]

Congress may authorize a program for several years, but funding often depends on later congressional action.[6] Under BUILD America 250, some programs could remain authorized through 2031 even though funding would depend on shorter-term congressional decisions and future appropriations measures.[7] For transportation businesses, that distinction is more than a technical budgetary issue because it helps determine whether funding remains available through project completion and whether a project’s funding stream is likely to remain stable over time.[8]

To accurately assess risk, corporate counsel and business leaders must look beyond the $580 billion headline and distinguish statutory authorization from budget authority.[9] An authorization bill creates or extends a federal program and may establish intended funding levels for that program.[10] However, an authorization alone does not legally permit agencies to spend funds or enter binding financial commitments.[11] That generally requires budget authority that Congress grants through an appropriation act, although Congress may provide budget authority through other statutory mechanisms as well.[12] Contract authority is one such alternative under which Congress permits an agency to commit to projects before it receives separate appropriations funding them.[13]

For federal-aid highways, the bill would provide $474 billion in Highway Trust Fund-backed contract authority through 2031, while $106.3 billion would remain subject to future appropriations.[14] Consequently, contractors and suppliers cannot treat every dollar in the bill as equally certain, even when a majority of the funds authorized in the bill are covered by contract authority.[15] Highway Trust Fund programs may provide a firmer basis for planning and long-term investment decisions, while other programs remain more dependent on future congressional action.[16] For businesses, that difference should inform whether and how aggressively to pursue a project.[17]

Contract authority can reduce dependence on future appropriations, but it does not eliminate funding risk for businesses considering long-term surface transportation projects.[18] Even when contract authority exists, Congress may place annual spending limitations on that authority in a given year.[19] Fund exhaustion also remains a significant consideration: the Congressional Budget Office projects the Highway Trust Fund will be exhausted in 2028 under current law.[20] If the fund is exhausted in the middle of the BUILD America 250’s authorization period, even statutory contract authority cannot guarantee reliable funding.[21] Businesses that understand these constraints can better assess funding risk, evaluate long-term opportunities, and make more informed decisions about pursuing federally supported transportation projects when considering future investments, partnerships, and project opportunities.[22]

 

[1] Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, div. A, § 11101, 135 Stat. 429 (2021); William J. Mallett, Cong. Rsch. Serv., R48644, Surface Transportation Reauthorization: Public Transportation 1 (2026).

[2] Continuing Appropriations and Extensions Act, 2027, Pub. L. No. 119-103, div. C, § 3001, 140 Stat. 987 (2026); BUILD America 250 Act, H.R. 8870, 119th Cong. (2026); BUILD America 250 Act, H.R. 8870, 119th Cong. § 1(a) (2026); see Tatiana Klett & Sarah Kline, The Next Big Infrastructure Law? How the BUILD America 250 Act Aims to Reshape IIJA, Bipartisan Pol’y Ctr. (Sep. 10, 2026), https://bipartisanpolicy.org/explainer/the-next-big-infrastructure-law-how-the-build-america-250-act-aims-to-reshape-iija/.

[3] See H.R. 8870, 119th Cong. § 1(a) (2026).

[4] See H.R. 8870, 119th Cong. §§ 1101, 2001, 3001, 4001; Surface Transportation Reauthorization, Comm. on Transp. & Infrastructure, https://transportation.house.gov/surface-transportation-reauthorization/ (on file with the American University Business Law Review) (last visited Oct. 10, 2026).

[5] See Press Release, Comm. on Transp. & Infrastructure, Graves & Larsen Announce Deal on Bipartisan, Five-Year Surface Transportation Reauthorization—The BUILD America 250 Act (May 17, 2026), https://transportation.house.gov/news/documentsingle.aspx?DocumentID=409495 (on file with author).

[6] James V. Saturno, Cong. Rsch. Serv., R46497, Authorizations and the Appropriations Process 1 (2023).

[7] Ben Goldman, Cong. Rsch. Serv., R48881, Surface Transportation Reauthorization: Passenger and Freight Rail Issues 1 tbl. 1 (2026).

[8] See James V. Saturno, Cong. Rsch. Serv., R46497, Authorizations and the Appropriations Process 1 (2023); Memorandum from Brian R. Bezio, Chief Fin. Off., U.S. Dep’t of Transp., to Division Administrators of Fed. Highway Admin. (May 23, 2018), https://www.fhwa.dot.gov/cfo/projfundsmgt.cfm [https://perma.cc/6JL6-3ZR9].

[9] See Lauri A. Hettinger et al., A Closer Look at the BUILD America 250 Act, Holland & Knight (May 27, 2026), https://www.hklaw.com/en/insights/publications/2026/05/a-closer-look-at-the-build-america-250-act [https://perma.cc/98LJ-MQ5B].

[10] See James V. Saturno, Cong. Rsch. Serv., R46497, Authorizations and the Appropriations Process 1 (2023).

[11] See U.S. Gov’t Accountability Off., GAO-16-464SP, Principles of Federal Appropriations Law 2-1–2-3 (2016).

[12] James V. Saturno, Cong. Rsch. Serv., IF12105, Introduction to Budget Authority 1 (2022).

[13] See U.S. Gov’t Accountability Off., GAO-16-464SP, Principles of Federal Appropriations Law 2-4–2-5 (2016).

[14] See H.R. 8870, 119th Cong. § 1101(b) (2026); Am. Ass’n of State Highway & Transp. Offs., AASHTO’s Comprehensive Section-by-Section Analysis of BUILD America 250 Act 1 (2026) [hereinafter AASHTO], https://transportation.org/policy/wp-content/uploads/sites/56/2026/07/AASHTO-Analysis-of-BUILD-America-250-Act-June-2026-FINAL-v2.pdf (on file with the American University Business Law Review).

[15] See AASHTO, supra note 14, at 1.

[16] See id.

[17] See FHWA Major Project Delivery Process, U.S. Dep’t of Transp. Fed. Highway Admin. (July 16, 2026), https://www.fhwa.dot.gov/majorprojects/defined.cfm [https://perma.cc/84CT-42VC]; AASHTO, supra note 14, at 1.

[18] See U.S. Dep’t of Transp. Fed. Highway Admin., Funding Federal-Aid Highways 31 (2017) [hereinafter Funding Federal-Aid Highways], https://www.fhwa.dot.gov/policy/olsp/fundingfederalaid/05.cfm [https://perma.cc/FE34-F7QK]; Chad Shirley, Analyst, Cong. Budget Off., Presentation at the 2026 Mileage-Based User Fee Alliance National Conference: The Status of the Highway Trust Fund in 2026 (June 16, 2026) [hereinafter The Status of the Highway Trust Fund in 2026].

[19] See Funding Federal-Aid Highways, supra note 18, at 31.

[20] See The Status of the Highway Trust Fund in 202, supra note 18.

[21] See id.

[22] See AASHTO, supra note 14, at 1.