Highway Funding Transferability Improvement Act

S. 1733 would amend federal highway law to give state Departments of Transportation greater flexibility in managing federal highway funds. Currently, states receive approximately 90% of federal highway funding through formula-based programs including the National Highway Performance Program, Surface Transportation Block Grant Program, and Highway Safety Improvement Program. Under existing law, states can transfer up to 50% of their funding annually from one program to another to meet their specific transportation needs. This bill would increase that transferability cap to 75%, allowing states to shift a larger share of funds between eligible programs without requiring federal approval. Supporters argue this change would enable states to respond more quickly to pressing infrastructure challenges and allocate resources more effectively based on their unique transportation priorities. The bill is currently under consideration by the Senate Committee on Environment and Public Works and has received bipartisan support, including endorsement from the American Association of State Highway and Transportation Officials.