Legislative and Policy Analysis
Section 60023: Rescission of environmental review implementation funds
Executive Summary
Section 60023 rescinds unobligated balances from the Inflation Reduction Act environmental review implementation funding program codified at 23 U.S.C. § 178.[1] That program originally provided $100 million to the Federal Highway Administrator, available through September 30, 2026, to support efficient and effective environmental reviews for surface transportation projects through Federal Highway Administration guidance, technical assistance, templates, training, tools, and financial support to eligible state, local, territorial, metropolitan planning, and other transportation entities.[2]
The practical effect is to remove remaining unspent federal capacity-building money for transportation environmental review. The section does not repeal the underlying legal requirement to conduct environmental reviews, and it does not itself approve or block any transportation project. But it does reduce the resources available to help governments and project sponsors prepare environmental documents, identify impacts, assess alternatives, conduct public engagement, and complete permitting-related work.[3]
The environmental and climate impact is negative and risk-increasing. The rescission targets money designed to improve the quality, capacity, and timeliness of environmental review. Losing that funding can make reviews more uneven, under-resourced, and dependent on the fiscal capacity of state, local, and project-sponsor entities. That creates foreseeable risks for public participation, mitigation analysis, environmental justice review, and the identification of impacts from transportation projects.
What Section 60023 Actually Does
Section 60023 is a short rescission provision. It states that the unobligated balances of amounts made available to carry out 23 U.S.C. § 178 are rescinded.[4] In budget terms, Congress is taking back remaining budget authority that had been appropriated but not yet legally obligated.
The affected program is the environmental review implementation funds program created by the Inflation Reduction Act. The original appropriation was $100 million for fiscal year 2022, available until September 30, 2026.[5] A later climate funding tracker identified Section 60023 as cutting $55 million from environmental review implementation funds, which appears to reflect an estimate of remaining unobligated balances rather than the full original appropriation.[6]
| Program or activity | Amount | What the money supports |
|---|---|---|
| 23 U.S.C. § 178 environmental review implementation funds | $100 million originally appropriated | FHWA guidance, technical assistance, templates, training, tools, administrative expenses, and eligible-entity support for environmental reviews of surface transportation projects |
| Section 60023 rescission | Unobligated balances; one tracker estimates $55 million | Cancels remaining uncommitted funds that would otherwise support environmental review capacity, documentation, public engagement, impact analysis, mitigation analysis, alternatives analysis, permitting support, and eligible administrative expenses |
Under 23 U.S.C. § 178, funds could be used in two broad ways. First, FHWA could use them for guidance, technical assistance, templates, training, tools, and administrative expenses connected to efficient and effective environmental review for surface transportation projects.[7] Second, FHWA could make funds available to eligible entities to build review capacity, define project scope or study areas, identify impacts and mitigation measures, evaluate reasonable alternatives, prepare planning and environmental studies, conduct public engagement, and carry out permitting or related activities that support timely completion of environmental review.[8]
Eligible entities included states, units of local government, political subdivisions of states, U.S. territories, certain transportation entities, recipients of federal lands transportation program funds, and metropolitan planning organizations.[9] The federal share for activities carried out by an eligible entity was capped at 80 percent.[10]
Section 60023 therefore does not eliminate the general obligation to comply with environmental laws. Instead, it removes remaining federal money that could help public agencies and eligible entities do that work more effectively.
Legislative Mechanism
The mechanism is a rescission of unobligated budget authority. Congress does not amend the operative text of 23 U.S.C. § 178 in the quoted section itself. Instead, it cancels remaining funds “made available to carry out” that section.[11]
That matters because the legal program framework may remain visible in the U.S. Code while the remaining money to operate it is removed. Previously obligated funds generally remain tied to their legal obligations, but unobligated balances are no longer available for new obligations after the rescission takes effect.
The rescission also changes the implementation baseline. Before Section 60023, FHWA still had statutory funding available through September 30, 2026, subject to obligation status and program administration.[12] After Section 60023, FHWA and eligible entities lose access to remaining unobligated balances, limiting new awards, technical assistance, tools, training, or capacity-building activities that would have relied on those balances.
Expenditure Tracking and Reporting Protocol
The affected financial flow is federal transportation funding administered by the Federal Highway Administration within the Department of Transportation. The original budget authority came from the Inflation Reduction Act appropriation to the Federal Highway Administrator for 23 U.S.C. § 178. Section 60023 rescinds unobligated balances, so the tracking question is not only where money would have been spent, but also how the canceled budget authority is reflected in federal budget execution.
Public visibility is likely to be mixed. The original program authority is identifiable in statute, and awarded assistance or contract activity may be visible through DOT, FHWA, USAspending.gov, federal grant records, procurement systems, agency budget materials, and oversight reports. However, the exact section-specific unobligated balance rescinded may be difficult for the public to isolate unless Treasury, OMB, DOT, FHWA, CBO, or congressional materials separately report that balance.
flowchart TD
A[IRA funding] --> B[FHWA]
B --> C[Unobligated balances]
C --> D[Section 60023 rescission]
B --> E[Agency tools and training]
B --> F[Eligible entity support]
B --> G[Contracts and assistance]
D --> H[OMB apportionment]
D --> I[Treasury accounts]
E --> J[DOT budget records]
F --> K[Grant reporting]
G --> L[USAspending and procurement]
H --> M[Public budget data]
I --> M
J --> M
K --> M
L --> M
M --> N[Limited section visibility]
M --> O[IG GAO Congress]
Likely tracking channels include:
| Tracking channel | What it would show | Likely limitation |
|---|---|---|
| FHWA and DOT budget execution records | Program obligations, unobligated balances, and administrative execution | Public documents may aggregate the program with broader transportation or IRA implementation accounts |
| OMB apportionment and budget materials | How remaining budget authority is apportioned, canceled, or reflected in budget execution | Apportionment-level detail may not provide easy public section-by-section visibility |
| Treasury account reporting | Account-level budget authority, obligations, outlays, and cancellations | Treasury data can be too aggregated to show Section 60023 cleanly |
| USAspending.gov | Reportable grants, cooperative agreements, contracts, or other awards | Only awarded or reportable activity appears; rescinded unobligated balances may not appear as a user-friendly program cut |
| FPDS or SAM.gov | Procurement actions if FHWA used contracts for tools, templates, training, or technical assistance | Contract records may not be tagged in a way that isolates 23 U.S.C. § 178 |
| Inspector General, GAO, and congressional oversight | Audits, reviews, and oversight of DOT and FHWA program implementation | Oversight may be episodic and may not produce timely section-specific totals |
The most important reporting issue is that rescissions can be less visible to the public than direct spending. A canceled unobligated balance may appear in budget execution records and scorekeeping, while the practical loss is experienced as grants not made, technical assistance not provided, training not delivered, tools not developed, or environmental review support not expanded.
Day-to-Day Government Process Changes
For FHWA, Section 60023 reduces the remaining funding available for environmental review implementation support. That can affect staff planning, technical assistance, templates, guidance development, training, and support tools for surface transportation environmental review.[13]
For state departments of transportation, metropolitan planning organizations, local governments, and other eligible entities, the change means fewer federal dollars may be available to build environmental review capacity. That can matter in places where local staff, technical consultants, environmental justice outreach capacity, tribal consultation capacity, or technical studies are already under-resourced.
The day-to-day effects are likely to show up in practical administrative ways:
| Government function | Before rescission | After rescission |
|---|---|---|
| FHWA technical assistance | Dedicated IRA funds could support guidance, templates, training, and tools | Remaining unobligated funding is canceled |
| Eligible entity capacity | States, localities, territories, MPOs, and other entities could receive support for review capacity | New support from unobligated balances is curtailed |
| Environmental documents | Funding could support planning studies and environmental documents | More costs may fall on existing agency budgets or project sponsors |
| Public engagement | Funds could support engagement activities during environmental review | Outreach may be more constrained where local budgets are limited |
| Impact and mitigation analysis | Funds could support identifying impacts, mitigation measures, and reasonable alternatives | Review quality may depend more heavily on local capacity and sponsor resources |
FHWA’s own Federal Register notice emphasized that the program was intended to support environmental review implementation and invited public input on how best to use the funds.[14] It also noted that many transportation project delays are driven by factors other than environmental review, including inadequate project funding, capital costs, lack of consensus, project complexity, local controversy, and changes in project scope.[15] That context is important: removing environmental review implementation funds does not automatically make transportation projects faster. It can instead reduce the resources available to solve the administrative, technical, and public-engagement problems that make reviews difficult.
Effects on Consumers
Consumers are affected indirectly. Section 60023 does not impose a direct household fee, tax, or price change. Its consumer effects flow through transportation project delivery, environmental review quality, public participation, and the local impacts of transportation infrastructure.
Potential consumer impacts include:
| Consumer-facing area | Likely effect |
|---|---|
| Transportation project timelines | Mixed. Some policymakers may view rescissions as reducing federal involvement, but loss of capacity funding can also slow or complicate reviews for under-resourced agencies |
| Public participation | Negative where funding would have supported outreach, engagement, translation, technical materials, or community participation |
| Local environmental quality | Negative risk where weaker or under-resourced review misses avoidable air, noise, water, land-use, safety, or habitat impacts |
| Taxpayer value | Mixed. The federal government recaptures unobligated money, but communities may face higher downstream costs if projects are poorly scoped, delayed, litigated, or insufficiently mitigated |
| Equity for smaller communities | Negative risk because wealthier jurisdictions and large sponsors are better positioned to self-fund review capacity |
For residents near proposed transportation projects, environmental review is often the main process through which project alternatives, local harms, mitigation measures, and public comments are formally considered. Reducing funding for that process can weaken the practical ability of affected communities to understand and influence project decisions.
Effects on Businesses
Business impacts are also indirect and uneven.
Large engineering, construction, transportation, and infrastructure firms may experience mixed effects. If project sponsors replace federal capacity-building funds with private consultants or sponsor-paid review support, some firms may see consulting opportunities. But if agencies lose capacity and projects become more prone to delay, rework, controversy, or litigation, businesses involved in project delivery may face greater uncertainty.
Small businesses and local contractors may be affected differently. Projects in smaller jurisdictions may have more trouble preparing environmental documents, completing studies, or managing public engagement without federal support. That can delay procurement opportunities or concentrate opportunities in jurisdictions with stronger internal capacity.
For businesses located near transportation projects, the effect depends on project type and review quality. Strong environmental review can identify construction disruption, access changes, freight impacts, stormwater effects, air pollution, noise, safety concerns, and mitigation measures. A less-resourced review process can leave businesses with less notice, fewer engagement opportunities, or weaker mitigation for project-related disruption.
Environmental and Climate Impact
The environmental and climate impact is negative and risk-increasing.
Section 60023 does not directly approve a highway, transit, bridge, port, rail, or freight project. It also does not repeal NEPA or other environmental laws. But those caveats do not make the impact neutral. The section changes the baseline by rescinding funding that was specifically designed to improve environmental review capacity, public engagement, impact identification, mitigation analysis, alternatives analysis, and permitting support for surface transportation projects.[16]
The immediate legal effect is fiscal: remaining unobligated funds are canceled. The reasonably foreseeable implementation effect is administrative: FHWA and eligible entities have less dedicated money to support environmental review work. The contingent effect depends on which projects, agencies, and communities would otherwise have received support, but the direction of risk is clear: fewer resources for review can reduce the quality, inclusiveness, and durability of environmental decision-making.
The affected environmental categories can include:
| Environmental category | Risk pathway |
|---|---|
| Greenhouse-gas emissions | Transportation project alternatives and mitigation may receive less analytical support |
| Air pollution | Localized emissions near roadways, freight corridors, and construction sites may be less thoroughly addressed |
| Water quality and stormwater | Review of runoff, wetlands, waterways, and construction impacts may be more constrained |
| Habitat and biodiversity | Alternatives and mitigation for habitat fragmentation or species impacts may receive less capacity support |
| Land disturbance | Project footprint, right-of-way, and construction effects may be harder for under-resourced entities to analyze |
| Environmental justice | Communities with less technical capacity may lose support for outreach, engagement, and cumulative-impact review |
| Public health | Noise, air pollution, safety, and access impacts may receive less practical review support |
| Climate resilience | Flooding, heat, wildfire, and extreme-weather considerations may be less consistently integrated into project planning |
The environmental justice concern is especially important. The original program allowed support for public engagement and review capacity. Communities facing transportation pollution, displacement risk, freight exposure, highway expansion, construction disruption, or cumulative environmental burdens often need technically accessible information and meaningful engagement opportunities. If funding for engagement and review capacity is rescinded, the communities most dependent on public-sector support may be the least able to compensate.
Existing environmental safeguards remain formally in place unless changed elsewhere. NEPA, transportation planning statutes, permitting requirements, civil rights requirements, and other environmental laws can still apply. But safeguards are only as effective as the capacity to implement them. Underfunded reviews can become slower, narrower, less transparent, more consultant-dependent, more vulnerable to error, and more difficult for the public to navigate.
The magnitude of harm depends on the amount of unobligated funding actually rescinded, the projects or entities that would otherwise have received support, and whether FHWA or state and local agencies can replace the lost resources. The direction is still negative: the section removes dedicated environmental review implementation funding from a program intended to make reviews more effective, evidence-based, and accessible.
Impact Summary
Section 60023 rescinds remaining unobligated environmental review implementation funds under 23 U.S.C. § 178. The original program provided $100 million for FHWA and eligible entities to improve environmental review for surface transportation projects, including through guidance, tools, training, technical assistance, public engagement, impact analysis, mitigation analysis, alternatives analysis, planning studies, and permitting support.[17]
The government process impact is a reduction in federal capacity-building support. FHWA, state transportation agencies, local governments, metropolitan planning organizations, territories, and other eligible entities may have fewer resources to complete strong and timely environmental reviews.
The consumer impact is indirect but meaningful. Households may experience weaker public engagement, less accessible review materials, less robust mitigation, or more uneven project delivery in communities where environmental review capacity is already thin.
The business impact is mixed but risk-increasing. Some consultants may receive replacement work from project sponsors, but infrastructure businesses can also face more uncertainty if under-resourced reviews lead to delay, rework, controversy, or litigation.
The environmental and climate impact is negative and risk-increasing because the section rescinds funding that would otherwise support better review of transportation-related emissions, air pollution, water impacts, habitat impacts, land disturbance, public health, climate resilience, and environmental justice concerns. The harm is immediate as a fiscal cut, reasonably foreseeable as an administrative capacity loss, and contingent in magnitude based on which projects and communities lose support.
Key References and Sourcing
| Source | Relevance |
|---|---|
| Public Law 119-21, One Big Beautiful Bill Act | Primary legal source for Section 60023 and its rescission of unobligated balances. |
| 23 U.S.C. § 178, Environmental review implementation funds | Primary statutory source for the affected program, original $100 million appropriation, eligible uses, and eligible entities. |
| Federal Register, FHWA Request for Information on IRA Section 60505 | FHWA implementation source describing the program purpose, eligible uses, public input process, and transportation review context. |
| IRA Tracker, Transportation Project Environmental Reviews | Program tracker identifying the affected IRA program and noting rescission by Section 60023 of Public Law 119-21. |
| Climate Program Portal, “How much was cut?” | Secondary budget tracker estimating the amount cut for environmental review implementation funds. |
[1] Public Law 119-21, “One Big Beautiful Bill Act,” Section 60023, rescinding unobligated balances for 23 U.S.C. § 178, https://www.govinfo.gov/app/details/PLAW-119publ21.
[2] Office of the Law Revision Counsel, “23 U.S.C. § 178: Environmental review implementation funds,” original $100 million appropriation and authorized uses, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[3] Federal Highway Administration, “Inflation Reduction Act, Request for Information,” 88 Fed. Reg. 23499, discussion of Section 60505 implementation and eligible review-support activities, https://www.federalregister.gov/documents/2023/04/17/2023-08012/inflation-reduction-act-request-for-information.
[4] Public Law 119-21, “One Big Beautiful Bill Act,” Section 60023, https://www.govinfo.gov/app/details/PLAW-119publ21.
[5] Office of the Law Revision Counsel, “23 U.S.C. § 178: Environmental review implementation funds,” appropriation available through September 30, 2026, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[6] Climate Program Portal, “How much was cut?,” identifying Section 60023 environmental review implementation funds at $55,000,000, https://climateprogramportal.org/2025/07/15/how-much-was-cut/.
[7] Office of the Law Revision Counsel, “23 U.S.C. § 178(a)(1),” FHWA guidance, technical assistance, templates, training, tools, and administrative expenses, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[8] Office of the Law Revision Counsel, “23 U.S.C. § 178(a)(2),” eligible-entity uses including capacity building, impact identification, mitigation, alternatives, studies, public engagement, and permitting support, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[9] Federal Highway Administration, “Inflation Reduction Act, Request for Information,” eligible entities for Section 60505 environmental review funds, https://www.federalregister.gov/documents/2023/04/17/2023-08012/inflation-reduction-act-request-for-information.
[10] Office of the Law Revision Counsel, “23 U.S.C. § 178(b),” federal cost-share limit, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[11] Public Law 119-21, “One Big Beautiful Bill Act,” Section 60023, https://www.govinfo.gov/app/details/PLAW-119publ21.
[12] Office of the Law Revision Counsel, “23 U.S.C. § 178(a),” availability of funds through September 30, 2026, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[13] Federal Highway Administration, “Inflation Reduction Act, Request for Information,” FHWA discussion of tools, training, templates, guidance, and program support, https://www.federalregister.gov/documents/2023/04/17/2023-08012/inflation-reduction-act-request-for-information.
[14] Federal Highway Administration, “Inflation Reduction Act, Request for Information,” request for public input on Section 60505 implementation, https://www.federalregister.gov/documents/2023/04/17/2023-08012/inflation-reduction-act-request-for-information.
[15] Federal Highway Administration, “Inflation Reduction Act, Request for Information,” discussion of transportation project delay factors, https://www.federalregister.gov/documents/2023/04/17/2023-08012/inflation-reduction-act-request-for-information.
[16] Office of the Law Revision Counsel, “23 U.S.C. § 178,” environmental review implementation purposes and eligible uses, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
[17] Office of the Law Revision Counsel, “23 U.S.C. § 178,” original funding and program design, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title23-section178.
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