The House and the Senate Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations subcommittees are charged with providing annual appropriations for the Department of Transportation (DOT), the Department of Housing and Urban Development (HUD), and certain related agencies.

This report describes action on FY2023 annual appropriations for THUD, including detailed tables for each major agency and a brief overview of selected issues.

FY2023 Budget Process

Appropriations for DOT, HUD, and the related agencies typically funded in the THUD bill happen in the context of the broader annual congressional appropriations process. That process generally begins with the submission of the President's budget request, followed by adoption of congressional spending limits (generally, in a budget resolution) that set the overall level of spending for that fiscal year's appropriations bills. From there, the subcommittees of the House and Senate Committees on Appropriations generally begin action on each of the 12 appropriations bills. While each bill reported out of the Appropriations Committee may receive floor consideration individually, in recent years it has been more common for bills to be considered in combination with one another in consolidated or omnibus appropriations acts.

The President's budget request for the upcoming fiscal year is due to be submitted to Congress by the first Monday in February. However, the FY2023 budget submission was delayed until March 28, 2022.¹

The framework for budget enforcement under the congressional budget process currently involves procedural elements, primarily associated with the budget resolution.² The budget resolution limits both total discretionary spending available to the appropriations committees (commonly referred to as "302(a) allocations") and spending under the jurisdiction of each appropriations subcommittee ("302(b) suballocations").

As of the cover date of this report, a FY2023 budget resolution has not been agreed to by the House and the Senate. In the absence of a budget resolution, the House provided for budget enforcement prior to initial floor consideration of the FY2023 appropriations measures by adopting a deeming resolution, H.Res. 1151, on June 8, 2022.³ This resolution provided for 302(a) allocations to the House Appropriations Committee at a specified level, provided limits on advance appropriations,⁴ and allowed adjustments to those allocations for "emergency requirements" and other purposes. Pursuant to this resolution, the chair of the House Budget Committee, Representative Yarmuth, published in the Congressional Record the House Appropriations Committee allocations on June 21, 2022.⁵ The House Appropriations Committee reported initial 302(b) suballocations for all 12 subcommittees on June 24 (H.Rept. 117-398).⁶ The Senate has not taken similar action to establish Senate Appropriations Committee allocations.⁷

Table 1 shows the suballocation to the THUD Subcommittees, compared to the applicable FY2022 enacted level, the President's FY2023 budget request and FY2023 enacted figures.

FY2023 THUD Appropriations Process

President's Budget

As noted earlier, the President's FY2023 budget was submitted to Congress on March 28, 2022. It included the following:

• $104.5 billion for DOT (+1.5% over FY2022), including $26.8 billion in discretionary funding and $77.6 billion in mandatory funding;
• $61.6 billion for HUD, a $7.9 billion (+14.6%) increase in net funding over FY2022; and
• $416 million for the related agencies, a 4.6% increase over FY2022.

House Action

On June 30, 2022, the House Appropriations Committee approved its FY2023 THUD appropriations bill, H.R. 8294. This was preceded by THUD Subcommittee approval on June 23. Subsequently, the text of H.R. 8294 was amended to include the text of five other appropriations measures. The revised bill, retitled the FY2023 Consolidated Appropriations Act, was approved by the House on July 20, 2022.

As passed by the House, the consolidated measure proposed the following:

• $105.4 billion for DOT (+$2.4 billion, +2.4% from FY2022), including $27.8 billion in discretionary funding and $77.6 billion in mandatory funding;
• $62.7 billion for HUD (+$9.0 billion, +16.7% from FY2022); and
• $436 million for the related agencies (+$38 million, +9.5% from FY2022).

Senate Action

On July 28, 2022, the chairman of the Senate Appropriations Committee released a chairman's mark for each of the 12 appropriations bills, including draft committee reports. The same day, the chairman of the THUD Subcommittee introduced S. 4670, which contained the text of the chairman's mark for THUD. It proposed the following:

• $106.6 billion for DOT (+$3.7 billion, +3.6% from FY2022), including $29.0 billion in discretionary funding and $77.6 billion in mandatory funding;
• $59.6 billion for HUD (+$5.9 billion, +11.0% from FY2022);
• $419 million for the related agencies, (+$21 million; +5.4% from FY2022); and
• $1.4 billion in emergency funding for disaster recovery via HUD's Community Development Block Grant Disaster Recovery (CDBG-DR) program.

Continuing Resolutions

Because full-year appropriations were not enacted before the start of the fiscal year, a series of continuing resolutions were enacted to continue government operations.

On September 30, 2022, the President signed into law the FY2023 Continuing Appropriations and Ukraine Supplemental Appropriations Act (P.L. 117-180). It continued funding for federal programs and activities through the earlier of enactment of final FY2023 appropriations measures on December 16, 2022. It contained several THUD-related anomalies, including

• Section 153 extended through the end of FY2023 HUD's Market-to-Market program, which was slated to be repealed at the end of FY2022;
• Section 155 provided $2 billion in emergency disaster recovery funding via HUD's Community Development Block Grant Disaster Recovery (CDBG-DR) program, to address unmet recovery needs in communities experiencing major disasters in calendar years 2021 and 2022;
• Section 156 authorized HUD to transfer funding from the Project-Based Rental Assistance account to the Rental Housing Assistance account to address a funding shortfall related to the Section 236 Interest Reduction Payment program; and
• Section 157 extended the availability of funds awarded by DOT under the National Infrastructure Investment Grants program.
• The date of the CR was extended twice; through December 23^rd by P.L. 117-229 and through December 30^th by P.L. 117-264.

Final Action

• On December 29, 2022, the FY2023 Consolidated Appropriations Act was signed into law (P.L. 117-328). Divisions A-L contained all 12 regular appropriations acts; THUD was funded in Division L. Other divisions of the bill contained supplemental appropriations and other matters.⁸ Division N, the Disaster Relief Supplemental Appropriations Act, 2023, included funding designated as for emergency requirements for both DOT and HUD accounts.
• The law provided $87.3 billion in nonemergency discretionary funding in Division L for THUD agencies (+7.8% over FY2022), including
• $28.7 billion for DOT (+6.6% compared to FY2022),
• $58.2 billion for HUD (+8.4% compared to FY2022), and
• $420 million for related agencies (+5.4% compared to FY2022).
• In addition, Division N provided $1 billion in supplemental funding designated as emergency requirements for DOT and $6.6 billion designated as emergency requirements for HUD. Of the supplemental funding provided to HUD, $3 billion was for disaster relief and recovery via the Community Development Block Grant Disaster Recovery (CDBG-DR) program and $3.6 billion was funding to support regular program operations in the Housing Choice Voucher program and the project-based Section 8 rental assistance program.

Table 2 tracks FY2023 THUD funding at the bill title level.

Department of Transportation

The majority of DOT's annual funding is established by two periodic authorization acts, one for surface transportation programs and one for aviation programs. Most of the funding for the programs in those acts is drawn from the DOT Highway Trust Fund and the Aviation and Airways Trust Fund, respectively. Highway Trust Fund revenues come largely from fuel taxes and increasingly from transfers from the general fund of the Treasury. Aviation and Airways Trust Fund revenues come largely from taxes on passenger tickets and aviation fuel and some general fund money.

Administration Budget Request

The Administration's FY2023 budget requested a 1.5% (+$1.5 billion) increase for DOT over the amount it received through the regular FY2022 appropriations process. Within that request, the notable variations in funding requested compared to regular FY2022 appropriations include the following:

• National Infrastructure Investment program: a 94% (+$725 million) increase in funding for the RAISE grant program;
• Federal Railroad Administration: an 86% (+$625 million) increase in funding for state rail grant programs;
• Amtrak: a 29% (+$669 million) increase in funding for grants to Amtrak;
• Federal Transit Administration: a 27% (+$602 million) increase in funding for capital investment grants (including New Starts and Small Starts projects); and
• Federal Highway Administration: a 2% (-$1.2 billion) decrease in funding.

Congressional Action

The House Appropriations Committee recommended $105.4 billion for DOT for FY2023, a 2.4% (+$2.4 billion) increase from the FY2022 enacted amount of $102.9 billion and 0.9% (+$938 million) over the President's request ($104.5 billion), and the House-passed bill reflected this recommendation. Every agency within the department, save the Maritime Administration, would receive an increase compared to FY2022. The Senate Appropriations Committee chair's draft proposed a 3.6% (+$3.7 billion) increase over FY2022, which would have been 2.1% more than the President's request. The enacted bill provided $106.3 billion for DOT, +3.3% ($3.4 billion) over FY2022 and +1.8% ($1.9 billion) over the President's request. Details are provided in Table 3.

Sources: FY2022 Enacted, FY2023 President's Request, and FY2023 House figures are taken from the Comparative Statement of New Budget Authority table, as published in H.Rept. 117-402, pp. 501-532, adjusted for floor amendments; FY2023 Chairman's Mark figures are taken from S. 4670 and the draft committee report released by the chairman at https://www.appropriations.senate.gov/imo/media/doc/THUDFY23RPT.pdf. Final FY2023 figures taken from P.L. 117-328 and the explanatory statement accompanying H.R. 2617, as amended, as published in the Congressional Record on December 20, 2022.

Additional Funding for FY2023 Provided in the IIJA

DOT received $184.1 billion in additional appropriations for many DOT programs in Division J, Title VIII of the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58; commonly referred to as the bipartisan infrastructure law or BIL). These funds were appropriated in FY2022, but were divided into equal portions ($36.8 billion) that become available each year of the authorization period (FY2022-FY2026) for DOT programs authorized in Divisions A-C of the IIJA. That $36.8 billion in annual supplemental funding equals slightly over one-third of the FY2023 funding recommended for DOT in the THUD FY2023 appropriations bills. For some agencies within DOT, this additional funding represents a relatively small addition to the FY2022 regular appropriated amount (e.g., 16% (+$9.5 billion) for FHWA, 26% (+$4.3 billion) for FTA); for other agencies, the additional funding is greater than the regular FY2022 appropriated amounts (e.g., $5 billion on top of $3.9 billion for FAA infrastructure accounts, $13.2 billion on top of $725 million for FRA state rail grants). Table 4 shows the distribution of the supplemental funding available to DOT during FY2023.

Department of Housing and Urban Development

Overview

HUD is the nation's housing agency. The programs and activities it administers are designed primarily to address housing problems faced by households with very low incomes or other special housing needs and to expand access to homeownership.⁹ The largest share of HUD's budget is devoted to its rental assistance programs: Section 8 Housing Choice Vouchers; project-based rental assistance via Section 8, Section 202 and Section 811; and public housing. These programs, which serve nearly 4.6 million households, provide subsidies to allow low-income recipients to pay below-market, income-based rent.

Two flexible block grant programs—the HOME Investment Partnerships grant program and the Community Development Block Grant (CDBG) program—help states and local governments finance a variety of housing and community development activities designed to serve low-income families. Indian tribes receive their own direct housing grants through the Indian Housing Block Grant program (also called the Native American Housing Block Grant program).

Other more specialized grant programs help communities meet the needs of homeless persons (through the Homeless Assistance Grants, namely the Continuum of Care and Emergency Solutions Grants programs), including those living with HIV/AIDS (through the Housing Opportunities for Persons with AIDS program). Additional programs fund fair housing enforcement activities and healthy homes activities, including lead-based paint hazard identification and remediation.

HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to homebuyers with low down payments and to developers of multifamily rental buildings containing relatively affordable units. FHA collects fees from borrowers with FHA-insured mortgages, which are used to sustain its insurance funds.

Agency Funding

Nearly all of HUD's funding is provided via discretionary appropriations generally contained in the annual Transportation, HUD, and Related Agencies appropriations legislation. (HUD programs may also receive additional resources from supplemental or other funding measures in some years, most often in response to disasters.) The annual THUD bill provides budget authority via appropriations for HUD programs and activities for a fiscal year. The "cost" of that budget authority, as determined by the Congressional Budget Office's scorekeeping process, is generally reduced by offsetting receipts from the FHA's loan programs and the Government National Mortgage Association (GNMA) securitization of government loans. To a lesser extent, other collections and rescissions of prior-year appropriations can also effectively offset the cost of the HUD budget. Deducting the savings from offsets and rescissions from the gross budget authority provided to HUD results in the net budget authority total used for budget enforcement purposes.

FY2023 HUD Appropriations

Selected FY2023 HUD Appropriations Topics

Rental Assistance Funding

Through various programs utilizing different mechanisms, the federal government subsidizes the rents of nearly 4.6 million low-income households, allowing them to pay affordable, below-market rents, generally set at 30% of a family's income. The vast majority of HUD funding each year is devoted to maintaining these rental assistance programs, which include (from largest to smallest in terms of households [HHs] served in FY2020)

• Housing Choice Vouchers (2.3 million HHs);
• Section 8 project-based rental assistance (1.2 million HHs);
• public housing (880,000 HHs);
• Section 202 Housing for the Elderly (124,000 HHs); and
• Section 811 Housing for Persons with Disabilities (32,000 HHs).¹⁰

Funding for these rental assistance programs accounts for roughly 80% of HUD's total (gross) appropriations, most of which is used to maintain assistance for currently assisted families.

It is estimated that roughly one in four eligible households receives rental assistance,¹¹ leading to waiting lists for assistance in most communities. For many years, expansions of these programs to serve new families were limited. For example, most new Housing Choice Vouchers (referred to as incremental vouchers) that were funded in annual appropriations acts were only for homeless veterans, via the Veterans Affairs Supportive Housing (VASH) program, and for child welfare-involved families and former foster youth, via the Family Unification Program (FUP). This changed in FY2021, when Congress funded the first expansion in general purpose vouchers in nearly 20 years; and in FY2022, when Congress funded an even larger expansion.

New Housing Choice Vouchers

The President's FY2023 budget request included $1.55 billion in the tenant-based rental assistance account for new incremental Housing Choice Vouchers. Budget documents stated this would allow the program to serve an additional 200,000 families, the largest one-year increase in new vouchers since the program was created. All of these new vouchers would be general purpose vouchers, rather than being provided through VASH or FUP. This would be an increase over the $200 million that was provided for new incremental vouchers in FY2022.

The House-passed bill included $1.1 billion for general purpose new incremental vouchers, which the committee estimated would be sufficient to serve an additional 140,000 households. The bill would also have provided another $50 million for homeless veterans through VASH and $30 million for families and youth involved in the child welfare system through FUP.

The Senate chairman's mark also included funding for new incremental vouchers, but less than was requested by the President, passed in the House, or funded the previous year. Specifically, it proposed $50 million for new general purpose incremental vouchers, plus $85 million for VASH and $30 million for FUP.

The final FY2023 appropriations law included $50 million for new general purpose incremental vouchers, $50 million for new VASH vouchers, and $30 million for new FUP vouchers.

Supplemental Funding for Rental Assistance Renewals

Among the largest expenses in HUD's budget is the cost of renewing rental assistance for the more than 3 million families who are served by the project-based rental assistance and Housing Choice Voucher program. The final FY2023 appropriations law, P.L. 117-328, funded FY2023 renewal costs for these two programs using a combination of regular appropriations (provided in Division L), and supplemental emergency-designated renewal funding (provided in Division N).

As shown in Table 6, nearly 9% of the total funding for rental assistance renewal costs for these two programs was provided as emergency designated spending and therefore not subject to regular discretionary spending limits, including the THUD subcommittee's 302(b) allocations, in FY2023.

CDBG, EDI, and Section 108

The President's budget requested $3.77 billion for the Community Development Fund (CDF) account, with $3.55 billion in CDBG funds for entitlement communities, states, and insular areas. The House-passed bill proposed $5.29 billion in CDF funds, with $3.30 billion in CDBG funds and $1.97 billion in congressionally directed spending under the Economic Development Initiative (EDI). The House-passed bill also proposed $60 million in competitive economic development grants under the Community Development Loan Guarantees Program account, of which $50 million would be specifically for shopping mall redevelopment projects.¹² The Senate chairman's mark proposed $4.81 billion for the CDF account, with $3.52 billion in CDBG funds and $1.06 billion in EDI funding. The final FY2023 appropriations law included $6.40 billion for the CDF account, which included $3.3 billion for CDBG, $85 million for a new "Yes In My Backyard" competitive grant program to reduce barriers to affordable housing, and $2.98 billion for congressionally directed spending via EDIs.

HOME Down Payment Assistance Set-Aside Proposal

The HOME Investment Partnerships Program (HOME) provides formula funding to states, local governments, and insular areas that can be used for a range of eligible affordable housing activities that benefit low-income households. The President's budget requested up to $100 million in HOME funding for a new initiative titled FirstHOME Downpayment Assistance that would provide funds to states and insular areas for assistance to homebuyers. (While homebuyer assistance is currently one of several eligible use of HOME funds, FirstHOME would be a set-aside of HOME funds to be used specifically for homebuyer assistance.¹³) The House-passed bill proposed up to $50 million for FirstHOME down payment assistance. The appropriations language requested by HUD and included in the House-passed bill would have provided HUD with broad discretion in how to implement the program, although both the HUD budget justifications and the House committee report indicated that the funding would be intended to support first-time, first-generation homebuyers.¹⁴ The Senate chairman's mark did not include funding for FirstHOME down payment assistance and it was not ultimately funded in the final FY2023 appropriations law.

New Assistance for Manufactured Housing

The House committee report included language discussing the importance of manufactured housing as a source of affordable housing and certain challenges faced by residents of manufactured homes or manufactured home communities.¹⁵ In response to some of these challenges, the House-passed bill proposed $500 million to support manufactured housing through a new Preservation and Reinvestment Initiative for Community Enhancement. While no such funding was included in the Senate chairman's mark, the final FY2023 appropriations law included $225 million for the new initiative.

The funding is for competitive grants to support the preservation and revitalization of manufactured housing and eligible manufactured home communities. Eligible grantees include states, local governments, resident-owned manufactured housing communities, cooperatives, nonprofits, community development financial institutions (CDFIs), Indian tribes or their tribally designated housing entities (TDHEs), or other entities approved by the Secretary of HUD. Grant funds may be used for a range of eligible activities, including infrastructure, planning, resident and community services, resiliency activities, and other assistance, such as land and site acquisition. The House-passed bill would have designated $50 million of the total for a pilot program to help redevelop manufactured home communities as affordable replacement housing; the final FY2023 appropriations law designated $25 million of the total for this purpose.

Legislative Proposals in the Senate Chairman's Mark

The Senate chairman's mark also included the text of two standalone bills related to housing.

CDBG-DR Authorization

Title V of the Senate chairman's mark includes the text of S. 2471, the Reforming Disaster Recovery Act. It proposed to establish an Office of Disaster Management and Resiliency within HUD, to oversee disaster preparedness and response in the department, and manage inter- and intra-agency coordination. The act would further have permanently authorized CDBG-DR as a standing program under which HUD could establish a standardized regulatory structure.¹⁶ It would also have established a Long-Term Disaster Recovery Fund to provide for CDBG-DR grant assistance and program administration. This legislation was not included in the final FY2023 appropriations law.

NAHASDA Reauthorization

Title VI of the Senate chairman's mark included the text of S. 2264, the Native American Housing Assistance and Self-Determination Reauthorization Act of 2021. It proposed to reauthorize certain programs authorized under the Native American Housing Assistance and Self-Determination Act (NAHASDA); namely, the Indian Housing Block Grant and Native Hawaiian Housing Block Grant, as well as the Section 184 Indian Housing Loan Guarantee and Section 184A Native Hawaiian Loan Guarantee programs. In addition, it would have made certain changes to NAHASDA programs and include other provisions related to housing assistance for tribes. This legislation was not included in the final FY2023 appropriations law.

THUD Related Agencies

As shown in Table 7, most of the related agencies funded in the THUD bill would have received level or increased funding relative to the prior year under the President's FY2023 budget request. The largest dollar increases were proposed for the National Transportation Safety Board (+$8 million, +7%) and the Neighborhood Reinvestment Corporation/NeighborWorks America (+$4 million, +2%). The House-passed legislation proposed increases above the President's request for several agencies, including $15 million more for NeighborWorks relative to the President's budget. The Senate chairman's mark largely matched the President's request, although it included more for the Federal Maritime Commission (+$3 million compared to the President's request) and less for the Interagency Council on Homelessness (matching the FY2022 enacted level).

NeighborWorks Funding for Shared Equity Housing

Since FY2019, appropriations for NeighborWorks have included between $1 million and $3 million to support shared equity housing models.¹⁷ While specifics vary, shared equity housing generally involves limits on the future sales price of homes or other resale restrictions to preserve long-term affordability. Examples of shared equity housing models include community land trusts, limited equity cooperatives, and deed-restricted housing. Of the $170 million provided to NeighborWorks in the FY2023 appropriations law, $4 million is for shared equity housing. Of this amount, Congress directed that $1 million be used for technical assistance and $3 million be used for capital grants for NeighborWorks affiliates to acquire homes for their shared equity portfolios.¹⁸