South West Transit Association
SWTA Legislative News: Senate CR Includes Key Grant Rule Delay and Surface Transportation Extension
The U.S. Senate has advanced a Fiscal Year 2027 continuing resolution (CR) that includes several provisions of significant interest to public transit agencies across SWTA Nation — including a delay of the Office of Management and Budget’s proposed federal grants rule and a temporary extension of federal surface transportation programs.
The Senate Appropriations Committee released the text of the Continuing Appropriations and Extensions Act, 2027 on August 2. The Senate subsequently passed the amended measure on August 8.
For SWTA members, one of the most important provisions is language preventing implementation of OMB’s proposed grants rule for the duration of the CR. SWTA advocated for action on this issue, joining concerns about the potential impacts the proposed rule could have on federal grant recipients.
The OMB proposal would create significantly greater federal discretion over grant administration, including authority that could allow agencies to terminate certain discretionary awards when they are determined to no longer align with current agency priorities or the national interest.
The Senate CR would temporarily block implementation of that proposed rule while the continuing resolution remains in effect.
Senate Appropriations Committee Vice Chair Patty Murray noted following Senate passage that the measure prevents implementation of the OMB grants rule for the duration of the CR. She has also indicated that efforts will continue to address the proposal beyond the temporary funding measure.
Surface Transportation Programs Extended
The Senate package also includes the Surface Transportation Extension Act of 2026, which would temporarily extend federal surface transportation programs that would otherwise expire after September 30, 2026.
Under the Senate proposal, existing surface transportation authorities would continue through December 11, 2026. The extension covers key federal transportation laws and programs, including provisions affecting public transit under Chapter 53 of Title 49.
This temporary extension would provide additional time for Congress to continue negotiations on a longer-term surface transportation authorization bill.
However, the Senate measure does not extend the advanced appropriations levels provided under the Infrastructure Investment and Jobs Act (IIJA). Those advanced appropriations have provided substantial additional infrastructure investment over the life of IIJA, and their expiration remains an important funding concern for public transit and other infrastructure programs.
The lack of an extension of those advanced appropriations means that while authorization for surface transportation programs would continue temporarily, the higher supplemental funding levels associated with IIJA would not automatically continue with them.
What Happens Next?
The Senate and House approaches to the continuing resolution differ significantly. Because the Senate passed an amended version of the legislation, additional congressional action will be necessary before a final CR can become law.
Congress will return to these negotiations in September, ahead of the September 30 expiration of current federal funding.
For public transit agencies, the negotiations will be particularly important as Congress works simultaneously to prevent a federal government shutdown, determine near-term transportation funding levels, and continue work toward a new long-term surface transportation authorization.
SWTA will continue monitoring developments closely and advocating for policies that protect federal transit investment, provide stability for grant recipients, and support rural, urban, and Tribal public transit providers throughout SWTA Nation.
Why This Matters to SWTA Members
The Senate action represents a positive development on an issue SWTA has actively raised: delaying implementation of the proposed OMB grants rule. At the same time, the failure to extend IIJA advanced appropriations underscores the importance of continued advocacy as Congress determines the future of federal public transit investment.
SWTA will keep members informed as the House and Senate work toward a final agreement.
Read the Senate Appropriations Committee information and bill text:
Special thanks to Katie Kachel, Principal, Blank Rome Government Relations LLC, for providing federal legislative and policy updates to SWTA.