Adds paragraph (8) (Small project set-aside) establishing a $20,000,000 per fiscal year set-aside for grants to projects with estimated costs between $500,000 and $10,000,000, and permits reallocation of unutilized amounts to other projects under the program.

Modifies paragraph (5)(D) to qualify grants by excepting paragraph (8) from its scope.

Strikes terminal semicolons from clauses (i) and (ii) of paragraph (1)(A).

Amends 23 U.S.C. 173 by inserting conforming language ('Except as provided in subsection (p), ...') in subsection (c) and subsection (f), making an insertion in subsection (e)(1), and adding a new subsection (p) that establishes an annual $20,000,000 rural transportation demand management set-aside, lists eligible recipients and activities, and provides for reallocation of unutilized funds.

Amends section 101(a) of title 23 by inserting a new paragraph (32) defining 'transportation demand management' (including a list of included strategies) and redesignating existing paragraphs (32) through (36) as (33) through (37).

Amends subsection (b)(7) to make eligible activities explicitly include implementation of transportation demand management strategies.

Amends subsection (d) to add a new purpose clause for implementing transportation demand management strategies and adjusts paragraph punctuation; amends subsection (h)(1) to add 'activities related to the implementation of transportation demand management strategies' to the listed allowable activities.

Amends section 6702(a)(3) to insert a new subparagraph authorizing a project to implement transportation demand management strategies (and adjusts surrounding subparagraph designations/punctuation as provided).

Amends section 25005(e) of the Infrastructure Investment and Jobs Act (codified at 23 U.S.C. 502) to add 'Transportation demand management' as an eligible activity and to add related implementation activities to a subsection listing allowable activities under the Strengthening Mobility and Revolutionizing Transportation grant program.