Complete Streets Act Mandates 5% State Highway Fund Diversion for Pedestrian and Bike Safety Upgrades

The new Complete Streets Act of 2025 is setting up a national program to completely change how our local roads are designed. The big idea is simple: a "complete street" is a public road engineered to safely accommodate everyone—walkers, bikers, bus riders, drivers, and people using mobility devices. By October 1st of the third full fiscal year after enactment, states must start handing out grants for these projects, but only to local governments and planning groups that adopt an approved "complete streets policy." This isn’t just a suggestion; the bill mandates that every state must dedicate 5% of certain federal highway funds to run this new program, meaning a guaranteed funding stream for sidewalks and bike lanes is coming, but it’s money being pulled from the existing highway pot.

The New Rules of the Road: Design for All

This legislation isn't just about grants; it’s about making safety a non-negotiable part of every major road project. Specifically, Section 4 mandates that within two years, new construction or reconstruction projects on federal-aid highways costing over $10 million in metropolitan areas must incorporate specific Complete Streets design standards. This means dedicated, protected bike lanes (protection level based on traffic speed and volume), and sidewalks/crosswalks that meet updated accessibility guidelines. If you rely on walking or biking to get around, this is a massive win for safety, forcing planners to finally prioritize non-motorized users in high-traffic areas. For instance, that busy four-lane road near your office that currently has no sidewalk might now be legally required to include one when it gets reconstructed.

The Catch: Paperwork and the 5% Tax

To access the construction grants, local entities—like your city government or regional planning organization—have to jump through a few hoops. They must first create and get approval for a formal “complete streets policy” and then develop a detailed “prioritization plan” listing specific projects, costs, and timelines. This administrative lift could slow down smaller towns or rural areas that lack the planning staff to create these complex documents. More critically, Section 2 requires states to divert 5% of their core federal highway funding (from 23 U.S.C. § 104(b) or § 165) into this new program. While this ensures the Complete Streets program is funded, it means state DOTs lose flexibility and must find that 5% elsewhere, potentially slowing down other projects like traditional road maintenance or bridge repair.

Who Gets the Focus, and Who Gets a Pass?

The bill makes a specific point of directing these funds and efforts toward underserved communities, including low-income areas and Tribal lands, ensuring that infrastructure improvements aren't just concentrated in affluent neighborhoods. Projects must prioritize improving connections to jobs and services for low-income people. However, the bill does include several specific exemptions where these new standards don't have to apply. For example, limited-access highways (like interstates) are exempt. Crucially, a project can also be exempted if the cost to comply is deemed “excessively disproportionate” to the need or crash history. This vague language could be a loophole, allowing some state agencies to argue their way out of expensive but necessary safety upgrades by claiming the cost is too high, even if the road is dangerous. The bill gives the final say on these appeals to the Federal Highway Administration, meaning local MPOs can push back against state decisions, which introduces a new layer of friction into the planning process.