Highway Formula Fairness Act

Bill Summary: H.R. 7776 - Highway Formula Fairness Act

Overview

The Highway Formula Fairness Act (H.R. 7776) is a legislative proposal aimed at reforming how the federal government distributes highway funding to the states. The primary intent of the bill is to ensure that states receive a share of federal highway funds that more accurately reflects the amount of highway-related taxes paid by their residents into the federal Highway Trust Fund.

Key Provisions

The bill amends Section 104 of title 23, United States Code, to change the calculation of combined apportionments for several specific highway programs (including sections 119, 133, 148, 149, 167, 175, 176(c), and 134).

The new funding formula consists of a two-step process:

1. The Initial Calculation (Baseline)

The bill establishes a baseline distribution based on historical data. Each state's initial amount is determined by the proportion of funding it received in fiscal year 2012 relative to the total funding received by all states in that same year.

2. The "Fairness" Adjustment (The Floor)

To ensure equity, the bill introduces a mandatory adjustment. No state can receive less than a specific "floor" amount. This floor is calculated as:
* 95% of the "Applicable Percentage" multiplied by the total funds available.
* The Applicable Percentage is defined as the ratio of tax payments made by highway users in a specific state into the Highway Trust Fund compared to the total tax payments made by all users across all states for the most recent available fiscal year.

Who is Affected?

• State Governments: State departments of transportation will see a change in how their federal budgets are calculated. States that contribute a high percentage of taxes to the Highway Trust Fund—but historically received a lower proportion of funds—would likely see an increase in funding.
• Highway Users: By aligning funding with tax contributions, the bill seeks to ensure that the infrastructure investments in a state are more closely tied to the tax revenue generated by that state's drivers.

Timeline and Procedure

• Effective Date: The new calculation method would apply for fiscal year 2026 and every year thereafter.
• Implementation: The Secretary of Transportation is tasked with apportioning these funds on October 1 of each fiscal year.
• Current Status: The bill was introduced and referred to the House Committee on Transportation and Infrastructure on March 3, 2026.