Senate Passes FY26 THUD Bill

UPDATE as of 2/2/26:

On January 30, the Senate passed the fiscal year 2026 Transportation-Housing and Urban Development or THUD funding bill as part of a modified “minibus” legislative package by a vote of 71-29.That modified minibus fully funds five out of the six remaining FY 2026 appropriations bills including the THUD appropriations through September 30, while separating out funding for the Department of Homeland Security.

However, because the CR from November 2025 pertaining to these six appropriations bills expired January 30 and because the House was not in session this past week and will not return until Monday, February 2, a partial government shutdown is currently in effect for federally-funded THUD, Defense, Financial Services, Labor, Health and Human Services, Education, State, and Homeland Security programs.

According to AASHTO, the House will attempt to pass the Senate-passed minibus via suspension of the rules on Monday, which requires a two-thirds majority vote.

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The House passed the FY2026 Transportation, Housing and Urban Development (THUD) funding bill as part of a four-bill minibus by a vote of 341 to 88 on January 22, sending it to the Senate for consideration.

Specific modal funding appropriations proposed in the THUD bill include:

  • Federal Highway Administration: $62.7 billion in obligation limitation from the Highway Trust Fund (HTF). From the General Fund for highway infrastructure programs: $1.5 billion for earmarks, $350 million in bridge formula for low density/small population states, $200 million for federal/tribal projects, and $200 million truck parking. This preserves funding flows for core formula programs (e.g., PL, STBG, CMAQ, CRP, ), allowing states and MPOs to maintain planning and programming assumptions. Altogether, there is $927 million in new General Fund appropriations for the FHWA in the THUD bill.
  • Federal Transit Administration: $14.6 billion in obligation authority from the Mass Transit Capital Investment Grants (CIG) continue. However, Congress pairs this continuity with expanded reporting and oversight requirements, signaling tighter expectations around project delivery timelines and transparency. From the General Fund for Transit Infrastructure Grants (TIG) funding: $148 million for earmarks, $45 million for ferries, and $15 million for public safety. Altogether there is $23 million in new General Fund appropriations for FTA in the THUD bill.

Additional funding in transit areas:

  • Office of the Secretary of Transportation: An additional $145 million in new appropriations for BUILD grants from the General Fund.
  • Public Safety Grants ($1M): Directed toward operating costs to improve public safety, reduce crime, and increase security in large, urbanized area transit systems
  • FIFA World Cup 2026 Transit Support ($100.25M): Support for planning, capital, and operating expenses in host areas for matches and related public events
  • Olympics (LA 2028) Transit Support ($94M): Repurposes unobligated legacy transit balances to support transportation planning and operations tied to the Olympic and Paralympic Games in Los Angeles.

According to AMPO, a defining feature of the bill is how it treats unobligated IIJA discretionary funding, particularly funding that has been announced but has not moved to obligation at the pace Congress expected. For several major discretionary programs, the bill applies a rescission-and-reappropriation model that effectively:

  1. Permanently rescinds unobligated balances as of September 30, 2026
  2. Reappropriates an equivalent amount of new budget authority
  3. Extends availability through 2031, but limits use to completing awards already selected, with no new competitions

This structure applies to:

  • National Infrastructure Investments (RAISE/BUILD) (FY 22 Funds)
  • Nationally Significant Freight and Highway Projects (INFRA)
  • Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (PROTECT) Competitive Program (23 S.C. §176)
  • Bridge Investment Program (BIP)