Legislative and Policy Analysis
Section 60019: Rescission of neighborhood access and equity grant program
Executive Summary
Section 60019 rescinds the unobligated balances of funding made available for the Neighborhood Access and Equity Grant Program under 23 U.S.C. § 177.[1] The program was created by the Inflation Reduction Act to fund projects that reconnect communities divided by transportation infrastructure, improve walkability and safety, support affordable transportation access, reduce transportation-related air pollution and greenhouse-gas emissions, manage stormwater, reduce urban heat, and build local planning capacity in disadvantaged and underserved communities.[2]
The legal effect is straightforward: money that had not been obligated before the rescission is no longer available for new or unsigned Neighborhood Access and Equity grants. The practical effect is broader. Local governments, metropolitan planning organizations, Tribal governments, public authorities, and community partners that expected federal support for planning, design, mitigation, complete streets, greenways, highway caps, facility removal, pollution reduction, or construction may lose access to the federal funding stream unless their grants were already legally obligated.[3]
The environmental and climate impact is negative. The section does not authorize new pollution directly, but it removes federal support for projects specifically designed to reduce transportation barriers, surface-transportation emissions, air pollution, stormwater harms, heat-island exposure, safety risks, and environmental burdens in disadvantaged or underserved communities.[4]
What Section 60019 Actually Does
Section 60019 provides that “the unobligated balances of amounts made available to carry out section 177 of title 23, United States Code, are rescinded.”[1] Section 177 is the Neighborhood Access and Equity Grant Program administered by the Federal Highway Administration.[2]
The underlying program included three major funding components:
| Program or activity | Amount | What the money supports |
|---|---|---|
| General Neighborhood Access and Equity competitive grants | $1.893 billion | Grants to improve walkability, safety, affordable transportation access, community connectivity, facility removal, retrofits, caps, complete streets, greenways, active transportation networks, and access to destinations or transportation hubs.[2] |
| Economically disadvantaged community grants | $1.262 billion | Grants for the same purposes in economically disadvantaged, underserved, persistent-poverty, or community-benefit-focused communities.[2] |
| Technical assistance and administration | $50 million | Guidance, templates, training, tools, subgrants to build local delivery capacity, and Federal Highway Administration operations and administration.[2] |
Together, 23 U.S.C. § 177 appropriated $3.205 billion: $3.155 billion for grant awards and $50 million for technical assistance and administration.[2] DOT’s program materials described the $3.155 billion grant component as available for Community Planning Grants, Capital Construction Grants, and Regional Partnerships Challenge Grants, including up to $135 million for planning, up to $2.57 billion for capital construction, and up to $450 million for regional partnerships.[5]
Section 60019 does not repeal 23 U.S.C. § 177 as a section of the U.S. Code. It instead removes the remaining unobligated balances. That distinction matters: already obligated grant agreements generally remain enforceable through the normal grant-management process, but unobligated award selections, pending agreements, future awards, unused administrative funds, or uncommitted balances are cut off.[6]
Independent tracking after enactment estimated that roughly $2.4 billion, or about 76 percent of total program funding, was rescinded.[7] That figure should be treated as an estimate of unobligated funding affected, not as a new appropriation or a section-specific number written directly into Section 60019.
Legislative Mechanism
Section 60019 uses a rescission mechanism. A rescission cancels budget authority that Congress previously made available but that has not yet been obligated. Here, the target is the unobligated balance of the funding for 23 U.S.C. § 177.
The mechanism has three immediate legal consequences.
First, it cancels remaining unobligated budget authority for the Neighborhood Access and Equity Grant Program.[1] That means FHWA and DOT can no longer use those canceled balances to enter into new obligations.
Second, it separates announced or selected projects from legally obligated projects. A public grant announcement does not always mean the money has been legally obligated. For discretionary transportation grants, obligation typically occurs through a signed grant agreement or equivalent legally binding federal obligation. Projects that had been selected but not obligated before the rescission are at much greater risk because the budget authority has been removed.[6]
Third, it leaves the underlying federal-aid and grant-administration requirements relevant for surviving obligations. Projects already under valid grant agreements still move through ordinary federal grant, environmental review, reimbursement, compliance, and closeout processes unless otherwise changed by law or agreement.[2]
Expenditure Tracking and Reporting Protocol
The rescission should be tracked through federal budget-execution systems rather than through a new stand-alone public reporting mechanism created by Section 60019. The main actors are Congress, OMB, Treasury, DOT, FHWA, and grant recipients with existing or pending awards.
The relevant account-level tracking may be difficult for the public to isolate because the Neighborhood Access and Equity program was administered alongside related reconnecting-communities work, and outside analysis has noted that OMB combined NAE funding with other programs in a broader FHWA budget account, identified as “Neighborhood Access and Environmental Programs, FHWA.”[6] Public users may therefore need to compare bill text, CBO estimates, DOT award records, USAspending.gov obligation data, FHWA grant records, OMB account data, and oversight materials.
flowchart TD
A[Section 60019 rescission] --> B[OMB budget controls]
A --> C[Treasury account updates]
A --> D[DOT and FHWA execution]
D --> E[Unobligated balances canceled]
D --> F[Existing obligations continue]
D --> G[Pending awards reviewed]
F --> H[Grant agreements]
F --> I[Recipient reimbursements]
G --> J[No new obligation if funds canceled]
H --> K[USAspending data]
I --> K
D --> L[Agency financial reporting]
B --> M[CBO and budget estimates]
C --> N[Treasury reporting]
L --> O[Inspector General and GAO oversight]
K --> P[Public visibility]
M --> P
N --> P
O --> P
P --> Q[Visibility may be aggregated]
Likely tracking channels include:
| Tracking source | What it may show | Limitation |
|---|---|---|
| OMB apportionment and budget-execution records | Reduced or canceled budget authority for unobligated balances | Not usually project-level public data |
| Treasury account reporting | Account-level budget authority and outlay effects | May be aggregated with related programs |
| DOT and FHWA grant systems | Grant agreements, obligations, amendments, reimbursements, and closeout | Public access may vary by grant stage |
| USAspending.gov | Obligated awards, recipient names, award amounts, and modifications | Does not necessarily show canceled prospective awards clearly |
| CBO cost estimates | Estimated budget authority and outlay effects of rescissions | May group several rescissions together |
| DOT Inspector General, GAO, and congressional oversight | Reviews of implementation, grant cancellation, obligation timing, and program effects | Usually delayed and selective |
Public visibility is therefore mixed. Obligated grants should be more visible in award-level data, while rescinded unobligated balances may appear only as account-level reductions or in budget estimates. For communities that received announcements but not obligations, the gap between public award announcements and binding grant agreements may be especially important.
Day-to-Day Government Process Changes
For DOT and FHWA, Section 60019 changes day-to-day work from grant selection, agreement execution, and technical assistance toward rescission implementation, account reconciliation, and award-status triage.
FHWA staff would need to identify which NAE funds were unobligated, coordinate with DOT budget offices, comply with OMB and Treasury controls, and determine which projects have valid obligations. Grant-management staff would likely need to communicate with recipients, pause or terminate unsigned awards, update award files, and distinguish between projects with signed grant agreements and projects that were merely announced.
For local governments and public authorities, the section can turn a planning or implementation pipeline into a funding uncertainty problem. Communities that had expected capital construction grants may need to revise project scopes, find replacement funds, delay procurement, scale back design work, or abandon pieces of projects. Planning-only applicants may lose support for feasibility studies, public engagement, air-quality assessment, transportation-equity analysis, anti-displacement planning, and predevelopment work.[5]
For oversight staff, the provision raises implementation questions: which projects were obligated before rescission, which were not, how DOT communicated grant status, how obligation timing affected communities, and whether public datasets accurately reflect the difference between announced, obligated, and canceled awards.
Effects on Consumers
The consumer impact is indirect but real. The program targeted everyday transportation conditions: walking safety, affordable access, neighborhood connectivity, access to public spaces and transit hubs, vulnerable-road-user safety, exposure to traffic noise, air pollution, stormwater burdens, and urban heat.[2]
Consumers in communities with surviving obligated grants may still benefit from planned improvements. Consumers in communities whose grants were not obligated may see delayed or canceled projects, especially where federal funds were expected to cover a large share of capital costs. The loss is likely to be most visible in neighborhoods divided by highways, high-speed roads, rail corridors, or other transportation facilities that limit access to jobs, schools, health care, parks, transit, and local businesses.
The rescission may also shift costs to local taxpayers or ratepayers. If a city or regional agency tries to preserve a project without federal NAE funds, it may need to use local bonds, state grants, transportation sales taxes, capital budgets, or private partnerships. If replacement funding is unavailable, consumers may experience continued unsafe crossings, longer trips, poor pedestrian and bicycle access, traffic exposure, and reduced access to community destinations.
Effects on Businesses
Businesses are affected in several ways.
Construction, engineering, planning, environmental consulting, landscape architecture, and community-engagement firms may lose work tied to canceled or delayed NAE-funded projects. Because the program supported planning, predevelopment, design, environmental studies, permitting, and capital construction, the rescission can affect both early-stage professional services and later-stage construction contracts.[5]
Small and disadvantaged businesses may be affected where projects would have been administered through state DOTs or local agencies subject to federal-aid requirements, including DOT’s Disadvantaged Business Enterprise framework for state-administered funds.[2] If projects are canceled before obligation or procurement, those contracting opportunities may never reach the market.
Local businesses in divided neighborhoods may also lose expected long-term benefits from improved foot traffic, safer access, better public spaces, reduced transportation barriers, and improved connections to customers and workers. However, businesses that would have faced construction disruption from major corridor redesigns may avoid near-term disruption if projects are canceled. On balance, the business effect is negative for firms and corridors that were depending on federally supported reconnection, planning, design, and construction activity.
Environmental and Climate Impact
The environmental and climate impact is negative.
The immediate legal effect is fiscal: Section 60019 cancels unobligated funding for 23 U.S.C. § 177.[1] It does not directly approve a highway project, repeal NEPA, or authorize new emissions. But the baseline change is still environmentally significant because the rescinded program was designed to fund environmental mitigation and community reconnection projects.
The program’s eligible uses included technologies and infrastructure to reduce surface-transportation greenhouse-gas emissions and other air pollution, natural infrastructure and permeable pavement to manage stormwater runoff, infrastructure and natural features to reduce urban heat-island hot spots, safety improvements for vulnerable road users, monitoring of local air quality and transportation greenhouse-gas emissions, assessment of extreme heat and tree-canopy gaps, and planning for flood-prone transportation infrastructure.[2] Removing unobligated funding makes those benefits less likely, slower, narrower, or dependent on replacement state and local funding.
The downstream and cumulative effects are especially important. Transportation infrastructure can impose long-lived environmental burdens on adjacent communities, including particulate pollution, nitrogen oxides, noise, heat, stormwater runoff, flooding risk, severed pedestrian networks, and reduced access to parks or transit. NAE projects were aimed at mitigating those burdens, particularly in disadvantaged or underserved communities.[2] Canceling unobligated funds therefore increases the risk that existing harms remain in place longer.
Existing safeguards are not fully eliminated. Projects that proceed with other federal funds may still need to comply with NEPA, federal-aid highway requirements, civil-rights rules, procurement rules, and grant conditions. But Section 60019 weakens the practical mitigation pathway by removing dedicated funding for projects and planning activities that would have helped communities identify, design, and implement remedies. Safeguards that remain on paper do not substitute for funding that enables local governments to do air-quality analysis, community engagement, anti-displacement planning, environmental design, and construction.
The environmental justice impact is also negative. The program’s statutory design prioritized disadvantaged, underserved, economically distressed, and persistent-poverty communities, and allowed up to 100 percent federal share for projects in disadvantaged or underserved communities.[2] Rescinding unobligated balances therefore falls hardest on places with the least fiscal capacity to replace federal funds and the greatest exposure to historic transportation harms.
Major uncertainties remain about the precise project-level effect because the outcome depends on which awards were obligated before rescission, which projects can secure replacement funding, and how DOT classifies mixed NAE and Reconnecting Communities awards. Those uncertainties affect magnitude, not direction. The direction is negative because the section removes dedicated federal support for pollution reduction, climate resilience, stormwater management, heat mitigation, safety, and community reconnection.
Impact Summary
Section 60019 cancels unobligated funding for the Neighborhood Access and Equity Grant Program. It does not repeal the statutory program text, but it removes the remaining budget authority available to carry out the program.
The most immediate impact is on communities with selected, planned, or expected projects that had not yet reached legal obligation. Those communities may lose federal support for highway removal, caps, retrofits, complete streets, greenways, pedestrian and bicycle safety, environmental mitigation, air-quality monitoring, stormwater improvements, urban-heat mitigation, and planning capacity.
Consumers may face continued barriers to safe and affordable transportation access. Businesses may lose planning, design, construction, and neighborhood-revitalization opportunities. Local governments may need to delay projects, shrink scopes, or find replacement funds.
The environmental impact is negative because the section rescinds funding that would otherwise support transportation pollution reduction, climate resilience, stormwater management, heat mitigation, vulnerable-road-user safety, and environmental-justice-focused community reconnection. The harm is contingent in project-level timing but reasonably foreseeable and cumulative because canceled or delayed projects leave existing transportation burdens in place.
Key References and Sourcing
| Source | Relevance |
|---|---|
| One Big Beautiful Bill Act Senate text | Provides the Section 60019 rescission language. |
| 23 U.S.C. § 177, Neighborhood access and equity grant program | Provides the underlying program authority, eligible uses, eligible entities, cost-share rules, and appropriated amounts. |
| U.S. Department of Transportation, NAE Frequently Asked Questions | Describes DOT’s program structure, grant categories, eligible applicants, match rules, eligible activities, and funding distribution. |
| Congressional Budget Office, Reconciliation Recommendations of the House Committee on Transportation and Infrastructure | Provides budget-estimate context for grouped transportation and infrastructure rescissions. |
| Eno Center for Transportation, Reconciliation Law Kills Most, but Not All, Neighborhood Access Grants | Provides implementation analysis on obligation timing, account aggregation, and project-level effects after rescission. |
| BlueGreen Alliance, What Survived? An Update on Inflation Reduction Act Programs | Provides an outside estimate of the approximate Neighborhood Access and Equity unobligated funding rescinded. |
| USAspending.gov | Public award database relevant to tracking obligated grants and recipient-level award information. |
[1] U.S. Senate Committee on the Budget, “The One Big Beautiful Bill Act,” Section 60019, rescinding unobligated balances for 23 U.S.C. § 177, https://www.budget.senate.gov/imo/media/doc/the_one_big_beautiful_bill_act.pdf.
[2] Legal Information Institute, Cornell Law School, “23 U.S. Code § 177 - Neighborhood access and equity grant program,” statutory program purposes, eligible entities, appropriations, cost-share rules, and limitations, https://www.law.cornell.edu/uscode/text/23/177.
[3] U.S. Department of Transportation, “NAE Frequently Asked Questions,” eligible applicants, grant categories, eligible activities, and funding availability, https://www.transportation.gov/grants/rcnprogram/nae-frequently-asked-questions.
[4] Legal Information Institute, Cornell Law School, “23 U.S. Code § 177 - Neighborhood access and equity grant program,” environmental mitigation, air pollution, greenhouse-gas, stormwater, urban heat, safety, and planning provisions, https://www.law.cornell.edu/uscode/text/23/177.
[5] U.S. Department of Transportation, “NAE Frequently Asked Questions,” program funding distribution, grant categories, match rules, and eligible activities, https://www.transportation.gov/grants/rcnprogram/nae-frequently-asked-questions.
[6] Eno Center for Transportation, Jeff Davis, “Reconciliation Law Kills Most, but Not All, Neighborhood Access Grants,” July 22, 2025, implementation analysis of NAE obligation timing and budget-account aggregation, https://enotrans.org/article/reconciliation-law-kills-most-but-not-all-neighborhood-access-grants/.
[7] BlueGreen Alliance, “What Survived? An Update on Inflation Reduction Act Programs,” estimate that about $2.4 billion, or about 76 percent of total NAE funding, was rescinded, https://www.bluegreenalliance.org/wp-content/uploads/2025/08/OBBBA-user-guide.pdf.
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