Public Transportation Capital Investment Grant (New Starts) Program: Background and Issues for Congress

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Public Transportation Capital Investment

Grant (New Starts) Program: Background

and Issues for Congress

(name redacted)

Specialist in Transportation Policy

June 20, 2016

Congressional Research Service

7-....

www.crs.gov

R44534

Public Transportation Capital Investment Grant (New Starts) Program

Summary

The Capital Investment Grant (CIG) program, often called New Starts, is a discretionary funding

program for the construction of new fixed-guideway public transportation systems and the

expansion of existing systems. Eligible projects include transit rail, including subway/elevated

rail (heavy rail), light rail, and commuter rail, as well as bus rapid transit (BRT) and ferries.

The CIG program is one element of the federal public transportation program that is administered

by the Federal Transit Administration (FTA) within the Department of Transportation (DOT). In

December 2015, the CIG program was reauthorized from FY2016 through FY2020 as part of the

Fixing America’s Surface Transportation (FAST) Act (P.L. 114-94). Funding is authorized at $2.3

billion per year, or about 19% of the overall federal public transportation program budget. Unlike

FTA’s other major programs, funding for the CIG program comes from the general fund of the

U.S. Treasury, not the mass transit account of the Highway Trust Fund. CIG funding, therefore, is

subject to appropriation each year. The CIG program allocates discretionary grants, whereas the

other major programs apportion funds by formula.

There are four types of CIG projects:



New Starts, an operable segment of a new fixed-guideway system or an

extension of an existing system that costs $300 million or more and receives

$100 million or more in CIG funding.

Small Starts, a new fixed-guideway project or a corridor-based BRT that costs

less than $300 million and receives less than $100 million of CIG funding.

Core Capacity, expansion of an existing fixed-guideway corridor to increase

capacity by 10% or more.

Program of Interrelated Projects, the simultaneous development of two or

more New Starts, Small Starts, or Core Capacity projects, or a combination

thereof.

The five key policy issues with the CIG program are the federal role in funding major transit

projects, program funding, the types of projects supported, project delivery speed, and private

involvement in project delivery. Although disagreements exist about federal involvement in major

public transportation capital projects through the CIG program, and the appropriate level of CIG

funding, no comprehensive benefit-cost studies are available on completed CIG projects to

evaluate the relative success of the CIG program as federal policy.

Legislative and regulatory changes to the CIG program over the past decade have led to federal

support of more BRT and streetcar projects. Critics have questioned whether some of these

projects, particularly streetcars, provide enough transportation benefits to justify the costs.

Legislative changes have also sought to reduce the time it takes for projects to be developed and

constructed. Little is known about whether these changes have been effective. Private

involvement in CIG projects through public-private partnerships (P3s) has been encouraged in

federal law for many years, including changes introduced in the FAST Act. To date, however,

only a few public transportation P3s involving private-sector funding have been formed.

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Contents

Introduction ..................................................................................................................................... 1

Program Funding ............................................................................................................................. 1

Program Characteristics................................................................................................................... 4

Types of Eligible Projects ......................................................................................................... 4

New Starts and Core Capacity Planning and Approval Process ............................................... 4

Small Starts Approval Process .................................................................................................. 6

Project Rating ............................................................................................................................ 7

Key Policy Issues ............................................................................................................................ 9

Federal Role in Funding Major Capital Projects ....................................................................... 9

Program Funding..................................................................................................................... 10

Project Type.............................................................................................................................. 11

Speed and Cost of Project Delivery ........................................................................................ 12

Public-Private Partnerships (P3s) ............................................................................................ 13

Figures

Figure 1. Federal Public Transportation Program Funding Shares.................................................. 2

Figure 2. Capital Investment Grant Program Funding .................................................................... 3

Figure 3. New Starts and Core Capacity Planning and Approval Process ...................................... 5

Figure 4. New Starts and Small Starts Project Evaluation and Rating ............................................ 8

Appendixes

Appendix. Capital Investment Grant Program Legislative History............................................... 15

Contacts

Author Contact Information .......................................................................................................... 19

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Public Transportation Capital Investment Grant (New Starts) Program

Introduction

The Capital Investment Grant (CIG) program, often referred to as New Starts, provides federal

funds to public transportation agencies on a competitive basis for the construction of new fixedguideway transit systems and the expansion of existing systems (49 U.S.C. §5309). In federal

law, “fixed guideway” is defined as “a public transportation facility: using and occupying a

separate right-of-way for the exclusive use of public transportation; using rail; using a fixed

catenary system;1 for a passenger ferry system; or for a bus rapid transit system” (49 U.S.C.

§5302(7)). Public transportation, as defined in federal law, does not include transportation by

school bus, intercity bus, or intercity passenger rail (Amtrak).

Most CIG funding has gone for subway/elevated rail (heavy rail), light rail, or commuter rail

projects. With federal support, a number of cities, such as Charlotte, Denver, Minneapolis, and

Salt Lake City, have opened entirely new rail systems, and many other cities have added to

existing systems. Rail transit route-mileage more than doubled between 1985 and 2012, with light

rail mileage quadrupling, commuter rail mileage doubling, and subway mileage growing by 25%.

Rail systems now provide about 45% of public transit trips, up from 31% in 1985.2

CIG has also been the main source of federal funding for bus rapid transit (BRT), which provides

high-frequency service at widely spaced stops and may include such elements as transit stations,

level-platform boarding, separate right-of-way, traffic signal priority, and special branding.3

Congress has authorized a category of less costly CIG projects known as Small Starts, which cost

$300 million or less to build and require $100 million or less of CIG funding. Many bus rapid

transit projects are inexpensive enough to qualify as Small Starts projects.

A third type of CIG project, eligible for funding since FY2013, involves expanding an existing

fixed-guideway corridor to increase capacity by 10% or more. This might entail major

improvements to a subway or light rail line. These are termed Core Capacity projects.

The CIG program is administered by the Federal Transit Administration (FTA) within the

Department of Transportation (DOT). In December 2015, the program was reauthorized from

FY2016 through FY2020 in the Fixing America’s Surface Transportation (FAST) Act (P.L. 11494). This report explains how the CIG program is structured under the FAST Act, including

program funding and procedures for project selection. It then discusses key policy issues. The

Appendix provides a brief legislative history.

Program Funding

The CIG program is one of six major funding programs administered by FTA, accounting for

about 19% of FTA’s budget (Figure 1).4 The FAST Act authorized $2.3 billion per year from

FY2016 through FY2020 for CIG. Unlike FTA’s other major programs, funding for CIG comes

A catenary system involves overhead wires that supply electrical power to transit vehicles.

U.S. Department of Transportation, Research and Innovative Technology Administration, Bureau of Transportation

Statistics, National Transportation Statistics, table 1-1, http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/

publications/national_transportation_statistics/index.html; American Public Transportation Association, 2015 Public

Transportation Fact Book: Appendix A, table 1, http://www.apta.com/resources/statistics/Pages/transitstats.aspx.

According to data from the Bus Rapid Transit Institute, as of December 2015, 34 transit agencies operated 63 BRT

routes. See Bus Rapid Transit Institute, “Summary Tables,” http://db.nbrti.org/.

For a discussion of all FTA programs, see CRS Report R42706, Federal Public Transportation Program: In Brief, by

(name redacted) .

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from the general fund of the U.S. Treasury, not the mass transit account of the Highway Trust

Fund. For this reason, CIG funding is subject to appropriation each year. Moreover, the CIG

program allocates discretionary grants to local transit agencies, whereas the other major programs

apportion funding by formula.5

Figure 1. Federal Public Transportation Program Funding Shares

Funding Authorized, FY2016-FY2020

Source: Federal Transit Administration.

CIG funding was fairly steady from FY2005 to FY2011, except that in FY2009 the regular

appropriation was supplemented with $750 million from the American Recovery and

Reinvestment Act of 2009 (ARRA; P.L. 111-5). For FY2012, Congress decided to fund BRT

projects recommended by FTA for CIG funding from the Bus and Bus Facilities discretionary

grant program instead. Funding levels have been rising, both in nominal and inflation-adjusted

terms, since FY2014 (Figure 2).

Many CIG projects also are supported by other federal programs, such as FTA’s Urbanized Area

Formula program and the Federal Highway Administration (FHWA) Congestion Mitigation and

Air Quality Improvement (CMAQ) program. Funding transferred from FHWA is known as “flex”

funding. Funding amounts from these other programs tend to be relatively small. In an analysis of

CIG projects from October 2004 through June 2012, the Government Accountability Office

(GAO) found that almost 92% of federal funding for CIG projects came from the CIG program,

5% from FHWA flex funds, 1% from other FTA programs, and 2% from other federal sources. In

Small Starts projects, 80% came from the CIG program, 14% from FHWA flex funds, and 7%

from other FTA programs.6

Whatever the funding sources, the maximum federal share of a CIG project is 80%. However, a

New Starts project may not receive more than 60% of its total cost from the CIG program. Core

Formula funds are distributed to transit agencies, local governments, and state governments based on a variety of

factors including population, population density, and bus and fixed-guideway route miles and vehicle miles.

U.S. Government Accountability Office, Public Transit: Funding for New Starts and Small Starts Projects, October

2004 through June 2012, GAO-13-40, November 2012, http://www.gao.gov/assets/660/650030.pdf.

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Capacity and Small Starts projects may receive up to 80% of total cost from the CIG program (49

U.S.C. §5309(l)). Limits on the federal share also are enacted in annual appropriations bills. For

example, the Consolidated Appropriations Act, 2016 (P.L. 114-113), included a provision that

“none of the funds made available in this Act shall be used to enter into a full funding grant

agreement for a project with a New Starts share greater than 60 percent.”7

Figure 2. Capital Investment Grant Program Funding

FY2005-FY2016

Source: Senate appropriations reports.

Notes: Includes rescissions of budget authority in FY2009 ($58.5 million), FY2010 ($280 million), and FY2015

($121.5 million). Data for FY2016 are unadjusted for inflation.

Projects approved for CIG funding typically have had less than a 60% federal share, often much

less.8 GAO found that the federal government paid 45% of the cost of New Starts projects, on

average, with local sources paying 48% and state sources 7%. The average federal share in Small

Starts projects, by contrast, was 67%, with 24% from local sources and 9% from state sources.

The vast majority of state and local contributions came from public funds raised by taxes, bonds,

and tolls. Only about 3% of the local funding of New Starts projects came from private

investment or public-private partnerships (P3s), according to GAO.9

In addition to the limits in law, the appropriations committees have sometimes directed FTA to fund only projects that

seek a certain level of CIG funding for a project. For example, the House Committee on Appropriations directed FTA

for FY2015 that it “only further projects to a full funding grant agreement if the project requires a less than 50 percent

new starts share and rates medium high or high in the categories related to finance and reducing congestion.” U.S.

Congress, House Committee on Appropriations, Subcommittee on Transportation, Housing and Urban Development,

and Related Agencies, Departments of Transportation, and Housing and Urban Development, and Related Agencies

Appropriations Bill, 2015, 113th Cong., 2nd sess., May 27, 2014, 113-464, p. 55.

See, for example, Federal Transit Administration, Annual Report on Funding Recommendations Fiscal Year 2017:

Capital Investment Grant Program, pp. 4-5, http://www.fta.dot.gov/documents/FY17_Annual_Report.pdf.

U.S. Government Accountability Office, Public Transit: Funding for New Starts and Small Starts Projects, October

2004 through June 2012, pp. 9, 14-15.

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Program Characteristics

Types of Eligible Projects

Four types of projects are eligible for CIG funding:



New Starts projects, involving construction of an operable segment of a new

fixed-guideway system or an extension of an existing system that costs $300

million or more and receives $100 million or more in CIG funding. New Starts

include BRT projects in which the majority of the project operates in a separated

right-of-way dedicated to public transportation during peak periods.

Small Starts projects, defined as a new fixed guideway project or a corridorbased BRT project that costs less than $300 million and receives less than $100

million of CIG funding. A corridor-based BRT service is required to emulate rail

service, but the buses do not need to run most of the way in a separated right-ofway dedicated to public transportation use.

Core Capacity projects, involving expansion of an existing fixed-guideway

corridor to increase capacity by 10% or more. These types of projects, aimed at

eliminating what are sometimes called core capacity constraints, might include

expanding stations to handle more cars, upgrading electrical systems to allow

longer trains, and upgrading signaling systems to allow more trains per hour.10

Program of Interrelated projects, the simultaneous development of two or

more New Starts, Small Starts, or Core Capacity projects, or a combination

thereof.

New Starts and Core Capacity Planning and Approval Process

Federal funding for New Starts and Core Capacity projects is typically committed in a Full

Funding Grant Agreement (FFGA), usually a multi-year agreement between the federal

government and a transit agency. An FFGA establishes the terms and conditions for federal

financial participation, including the maximum amount of federal funding being committed.11 To

obtain an FFGA, a project must pass through an approval process specified in law (Figure 3).

The three major project phases for New Starts and Core Capacity projects are project

development, engineering, and construction.12 To enter the project development phase, a transit

agency or other applicant must apply to FTA and initiate the review process required by the

National Environmental Policy Act of 1969 (NEPA; P.L. 91-190). Along with the NEPA work

during project development, the project sponsor must develop the information needed by FTA to

review the project’s justification and local financial commitment. Generally, the applicant has two

years to complete project development, although an extension can be granted in certain

Cambridge Systematics, “Implications of Investments Targeted at Reducing Transit Passenger Bottlenecks,”

National Surface Transportation Policy and Revenue Study Commission, Briefing Paper 4L-04, March 3, 2007,

http://transportationfortomorrow.com/final_report/pdf/volume_3/technical_issue_papers/paper4l_04.pdf.

U.S. Government Accountability Office, Public Transportation: Improvements Are Needed to More Fully Assess

Predicted Impacts of New Starts Projects, GAO-08-844, Washington, DC, July 2008, http://www.gao.gov/new.items/

d08844.pdf.

Prior to the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141), the New Starts process

involved four major phases: planning and alternatives analysis, preliminary engineering, final design, and construction.

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circumstances. FTA is required to use an expedited process to review a sponsor’s technical

capacity if the sponsor has successfully completed a New Starts or Core Capacity project in the

recent past. FTA may also advance projects more quickly using special warrants for projects of

which the federal share is $100 million or less, or 50% or less of the total project cost. According

to FTA, special warrants are “ways in which projects may qualify for automatic ratings on the

project justification criteria,”13 thus not requiring further detailed analysis. In a rulemaking, FTA

provided this cost-effectiveness example:

if there is a certain level of transit ridership in the corridor today, and the proposed

project falls within total cost and cost per mile parameters defined by FTA, then it would

be ‘‘warranted’’ by FTA as cost-effective, it would receive an automatic medium rating

on the cost-effectiveness criterion, and the project sponsor would not need to undertake

or submit the results of certain analyses. 14

Figure 3. New Starts and Core Capacity Planning and Approval Process

Source: Congressional Research Service; Federal Transit Administration, Capital Investment Program Listening

Session, Presentation at APTA Annual Meeting, October 3, 2012, https://www.transit.dot.gov/regulations-andguidance/legislation/map-21/capital-investment-program-map-21-overview.

According to the statute, a project can enter into the engineering phase once the NEPA process is

concluded, the project is selected as the locally preferred alternative, the project is adopted into

the metropolitan plan, and the project is justified on its merits, including an acceptable degree of

local financial commitment (49 U.S.C. §5309(d)(2)). If the project is a Core Capacity project, it

also has to be in a transit corridor that is over capacity or is projected to be at or over capacity

Federal Transit Administration, Fact Sheet: Fixed Guideway Capital Investment Grants ("New Starts”), Section

5309, http://www.fta.dot.gov/documents/MAP-21_Fact_Sheet_-_Fixed_Guideway_Capital_Investment_Grants.pdf.

Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 78 Federal

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within the next five years (49 U.S.C. §5309(e)(2)). Additional requirements for interrelated

projects include the following: the projects must be logically connected; when evaluated as a

whole, they must meet the requirements of the CIG program; and there must be a project

implementation plan showing that construction of each project will start in a reasonable

timeframe (49 U.S.C. §5309(i)(2)).

The amount of CIG funding requested by the project sponsor, not the share, is fixed when the

project is approved for entry into engineering.15 This means that if a project’s cost increases after

entry into engineering, the extra cost must be borne by the project sponsor from non-CIG funding

sources. GAO found that several project sponsors believe this is too early in the process to set the

federal funding commitment, and could slow a project’s entry into engineering or funding

shortfalls later on. Prior to the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L.

112-141), enacted in 2012, a project’s costs were fixed later in the process, just before the project

was recommended for a grant agreement.16

After engineering work is completed, FTA determines whether to sign an FFGA allowing the

project to enter construction. FTA retains some oversight of a project as it is constructed to ensure

compliance with the terms of the FFGA. Moreover, FTA must request the funding that is to be

provided under the terms of the FFGA for each approved project from Congress each fiscal

year.17 In some cases, FTA may assure a project sponsor of its intention to obligate funds for a

project through what is known as a Letter of Intent (49 U.S.C. §5309(k)(1)). FTA may also

obligate some of the funding expected to be provided in an FFGA through an Early Systems

Work Agreement (49 U.S.C. §5309(k)(3)). Although not a guarantee of full funding, an Early

Systems Work Agreement provides funding so that work can begin before an FFGA is awarded.

In guidance, FTA notes that although the statutory requirements for New Starts and Core Capacity

projects are very similar, it treats Core Capacity projects “a bit differently because they are

located in established, proven successful transit corridors.” FTA may use more often “simple

eligibility parameters, simplified evaluation measures, and expanded ‘warrants’ based on readily

available, easily verifiable information whenever possible to make the process less burdensome

for both FTA and Core Capacity project sponsors.”18

Small Starts Approval Process

For Small Starts projects, those requesting less than $100 million in federal assistance and costing

less than $300 million in total, just two phases exist, project development and construction. As

with New Starts projects, entry into project development only requires the project sponsor to

apply to FTA and initiate the NEPA process. Consequently, for Small Starts only one formal

decision is made by FTA, and that is whether to award funding and, hence, move the project into

construction. Funding for a successful Small Starts project is provided in a Small Starts

Federal Transit Administration, “Final Interim Policy Guidance Federal Transit Administration Capital Investment

Grant Program,” June 2016, Chapter I, p. 6, https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/

FAST_Updated_Interim_Policy_Guidance_June%20_2016.pdf.

Moving Ahead for Progress in the 21st Century Act (P.L. 112-141); Government Accountability Office, Public

Transit: Observations on Recent Changes to the Capital Investment Grant Program, GAO-16-495, April 2016, pp. 2122, http://www.gao.gov/assets/680/676880.pdf.

See, for example, Federal Transit Administration, Annual Report on Funding Recommendations Fiscal Year 2017:

Capital Investment Grant Program, https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/FY17_Annual_Report.pdf.

Federal Transit Administration, “Final Interim Policy Guidance Federal Transit Administration Capital Investment

Grant Program,” June 2016, Chapter III, p.2, https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/

FAST_Updated_Interim_Policy_Guidance_June%20_2016.pdf.

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Construction Grant Agreement, typically fulfilling the federal government’s funding commitment

in a single year.

Project Rating

In determining whether to approve a project’s move from one step to the next in the New Starts

and Core Capacity approval process, FTA computes an overall project rating by averaging the

summary ratings of the project justification criteria and local financial commitment criteria

(Figure 4). In order to advance from project development to engineering and from engineering to

construction, a New Starts or Core Capacity project must achieve an overall rating of at least

medium on a five-point scale (low, medium-low, medium, medium-high, high) on each of the

project justification and local financial commitment summary ratings. Small Starts projects are

similarly rated, but do not need to achieve a minimum rating to be eligible for a grant.

The justification criteria are the following:



Mobility improvements, measured by the number of trips on the project, with

trips by the transit-dependent population counting double. A high rating for both

New Starts and Small Starts projects is awarded to those that generate 30 million

linked trips or more annually.

Environmental benefits, measured by the monetized value of benefits in air

quality, greenhouse gas emissions, energy use, and safety in relation to the cost of

the project. Benefits are calculated based on the estimated reduction in vehicle

miles traveled resulting from the project.

Congestion relief, measured by the number of new weekday linked transit trips

resulting from implementation of the new project. This is calculated by

comparing total weekday linked transit trips for the no-build alternative with total

weekday linked transit trips with the new project in place. A high rating is

awarded to New Starts and Small Starts projects that generate 18,000 new

weekday trips.

Economic development effects, measured by the likely effects of the project on

development in the nearby area. The rating is based on FTA’s qualitative analysis

of supportive plans and policies.

Land use (or capacity needs of the corridor for Core Capacity projects),

based on station area population density, employment served, affordable housing

in the corridor, and the amount and cost of downtown parking. The extent and

quality of pedestrian infrastructure near stations also is used in the evaluation.

For light rail and heavy rail Core Capacity projects, FTA uses the existing space

per passenger during the peak hour in the corridor, which is a function of existing

ridership and the number and size of trains in the peak period and direction. For

commuter rail projects, the number of seats rather than the amount of space is

used.

Cost effectiveness, measured by the annual capital amortized over asset lifetimes

and operating cost per trip. A high rating is awarded for projects where the cost

per trip is less than $4 for a New Starts project and less than $1 for a Small Starts

project.

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Figure 4. New Starts and Small Starts Project Evaluation and Rating

Source: Federal Transit Administration, Final Interim Policy Guidance Federal Transit Administration Capital

Investment Grant Program, June 2016.

Note: The rating for Core Capacity projects is the same, except the capacity needs of the corridor are

evaluated instead of land use.

To be approved for federal funding, a CIG project must have an acceptable degree of local

financial commitment. This includes financing that is stable, reliable, and timely; sufficient

resources to maintain and operate both the existing public transportation system and the new

addition; and contingency money to support cost overruns or funding shortfalls (49 U.S.C.

§5309(f)(1)). The measures FTA uses for the evaluation of local financial commitment for New

Starts projects are the following:

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

Reliability/financial capacity, measured by the reasonableness of the capital and

operating cost estimates and planning assumptions; and capital funding capacity

to cover cost increases or funding shortfalls through debt issuance, cash reserves,

or other committed funds.

Current capital and operating condition, measured by the average age of the

vehicle fleet, bond rating issued within the previous two years, current ratio of

assets to liabilities, and recent service history.

Commitment of funds, measured by the share of funds committed or budgeted

versus planned. Significant private contributions may increase the commitmentof-funds rating by one level.

The summary rating of local financial commitment may be raised one level if the project is rated

at least medium on local financial commitment and the CIG program funding share is less than

50%.

The project justification and the local financial commitment are weighted equally in the overall

project rating. Project justification is calculated based on an equal weighting of the six factors.

Half of the local financial commitment is based on financial capacity and the reasonableness of

the financial assumptions. The other half is based equally on current capital and operating

condition of the project sponsor; and the commitment of funds.

Once a New Starts or Core Capacity project has been rated at least medium on project

justification and local financial commitment at the end of the engineering phase, and has

complied with other federal requirements, it is typically recommended for funding. However, in

any given year, FTA first funds commitments made in existing grant agreements. After that,

within the context of the available funds, FTA considers project readiness in signing new

agreements and allocating funds.19

Key Policy Issues

Federal Role in Funding Major Capital Projects

The CIG program has not been without controversy. FTA contends the program “is needed

because it allows transit agencies to undertake major capital projects that would otherwise be

infeasible for local governments and transit agencies to finance alone.”20 Supporters insist that

growing demand for CIG funds is evidence of its success.21 Critics, however, have contended that

CIG funding encourages communities to build expensive fixed-guideway infrastructure rather

than invest lesser sums in improving bus service.22 New rail service can be detrimental to an

existing bus network as service overall is realigned and resources are shifted toward operating

Federal Transit Administration, Annual Report on Funding Recommendations Fiscal Year 2017: Capital Investment

Grant Program, https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/FY17_Annual_Report.pdf.

Federal Transit Administration, Budget Estimates FY2017, CIG-10, https://www.transportation.gov/sites/dot.gov/

files/docs/FTA-FY-2017-CJ.pdf.

American Public Transportation Association, APTA Recommendations on Federal Public Transportation

Authorizing Law, December 2013, http://www.apta.com/gap/legissues/authorization/Documents/

APTA%20Authorizing%20Law%20Recommendations_FINAL_adopted%206Dec2013.pdf.

Nathaniel Baum-Snow and Matthew E. Kahn, “Effects of Urban Rail Transit Expansions: Evidence from Sixteen

Cities, 1970–2000,” Brookings-Wharton Papers on Urban Affairs, Brookings Institution Press, 2005, pp. 147-197,

https://muse.jhu.edu/article/192572/pdf.

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and maintaining the new rail lines.23 Critics have also called for more flexibility in the use of

federal transit funds for operations, as currently a large proportion of these funds, including CIG

funds, may be used only for capital investment.

No comprehensive benefit-cost studies of completed CIG projects have been conducted to

evaluate the relative success of the CIG program as federal policy. Since 2005, federal law has

required the completion of a “before and after” study of each funded CIG project to examine

some of the expected versus actual costs and benefits. Some of the benefits that must be detailed

include service provided and ridership.24 These studies do not provide enough evidence to

determine the program’s effectiveness and to evaluate the federal government’s role in a broader

context.

In summarizing studies of rail transit systems in general, not CIG projects, one researcher has

commented that “the dominant view of economists has been that rail transit investments generally

have been ineffective and expensive, and the benefits do not justify the costs.”25 However, some

studies show significant differences in benefit/cost ratios among projects. According to one study,

two of the systems with the largest net benefits include the subway systems in San Francisco and

New York City, while the rail system in Buffalo and those operated by New Jersey Transit in

Newark, Jersey City, and Trenton have some of the largest net losses.26

Program Funding

FTA, among others, has recommended significant increases in CIG funding to accommodate

demand by project sponsors, especially because a new category of projects, Core Capacity

projects, was made eligible for funding beginning in FY2013. FTA notes in its FY2017 budget

submission that the number of projects in the CIG “pipeline” has grown from 37 in FY2012 to 63

in FY2016, with more Small Starts (from 9 to 32) and Core Capacity projects (from 0 to 7), and

fewer New Starts projects (from 28 to 24).27 According to GAO, program stakeholders believe the

increase is partly due to the fact that projects no longer have to be rated before entering project

development (as they were prior to MAP-21, enacted in 2012), and also to greater participation

by less experienced project sponsors seeking Small Starts grants. These trends have placed extra

demands on FTA for technical assistance and evaluation.28

Laura J. Nelson and Dan Weikel, “Billions Spent, But Fewer People Are Using Public Transportation in Southern

California,” Los Angeles Times, March 1, 2016; Hilary Nixon, et al., “Changes in Transit Use and Service and

Associated Changes in Driving Near a New Light Rail Transit Line,” Mineta Transportation Institute, Report 12-44,

2015.

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA; P.L. 109-59);

Federal Transit Administration, Before and After Studies of New Starts Projects, Report to Congress, February 2016,

https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/

Report%20to%20Congress%20on%20Before%20and%20After%20Studies%202016.pdf.

Richard Voith, “Comment,” Brookings-Wharton Papers on Urban Affairs, Brookings Institution Press, 2005, pp.

198-206 https://muse.jhu.edu/article/192582/pdf.

Robert Cervero and Erick Guerra, “To T or Not to T: A Ballpark Assessment of the Costs and Benefits of Urban Rail

Transportation,” Public Works Management & Policy, 16, 2, pp. 111-128. For a more critical assessment, see Peter

Gordon and Paige Elise Kolesar, “A Note on Rail Transit Cost—Benefit Analysis: Do Nonuser Benefits Make a

Difference?” Public Works Management & Policy, 16, 2, pp. 100-110; and Lisa Schweitzer, “Benefit-Cost Analysis of

Rail Projects: A Commentary,” Public Works Management & Policy, 16, 2, pp. 129-131.

Federal Transit Administration, Budget Estimates FY2017, AE-18, https://www.transportation.gov/sites/dot.gov/files/

docs/FTA-FY-2017-CJ.pdf.

Government Accountability Office, Public Transit: Observations on Recent Changes to the Capital Investment

Grant Program, GAO-16-495, April 2016, p. 24, http://www.gao.gov/assets/680/676880.pdf.

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In addition, FTA has asked for an increase in funds to accelerate projects to “not only potentially

lower financing costs incurred on these projects, but also allow FTA to better manage the overall

program given the ever growing demand for funds.”29 For FY2017, FTA’s recommendation to

Congress for CIG funding was $3.5 billion, well above the average of $2 billion per year

appropriated from FY2012 through FY2016 and the $2.3 billion per year authorized by the FAST

Act for FY2016 through FY2020.

FTA proposes to increase CIG funding as part of a much larger budget for federal public

transportation programs overall. It also proposed to shift the funding source of the CIG program

from the general fund to the mass transit account of the Highway Trust Fund. Without any other

changes, such as new revenue sources or changes in other public transportation programs,

funding the CIG program in this way would exhaust funds in the mass transit account much

sooner than currently forecast. The balance of the account is expected to approach zero in

FY2021. An additional $2 billion to $3 billion in outlays per year for the CIG program beginning

in FY2017 would accelerate the exhaustion of funds to FY2019, based on data from the

Congressional Budget Office.30

Project Type

One major criticism of the CIG program has been that it encourages large, costly rail projects

over smaller, cheaper rail and BRT projects. Changes to the program over the past 20 years, such

as the introduction of Small Starts projects, have shifted federal funding toward lower-cost

projects, including streetcars. (See Appendix for more details of the legislative and regulatory

changes in the CIG program.) FTA’s FY2017 recommendations include funding for 6 BRT

projects and 5 streetcar projects out of 31 projects. A decade earlier, FTA’s recommendations

included 1 BRT project and no streetcar projects out of 28 projects. Most projects in that year

were light rail (16 projects), heavy rail (7), and commuter rail (4). With the addition of Core

Capacity projects in MAP-21, another shift could occur, this time in favor of projects in

established fixed-guideway corridors.

At a 2013 hearing, the chair of the House Highways and Transit Subcommittee expressed concern

that funding for Core Capacity projects “could come at the expense of funding opportunities for

new public transit systems in the rest of the country.”31 The Administrator of FTA at the time,

Peter Rogoff, responded that many opportunities existed for new projects, large and small, in

many different urban areas to receive Core Capacity funding, and that Core Capacity projects

may provide some of the best chances for the CIG program to support increased ridership. Rogoff

said Core Capacity projects would not crowd out other types of projects.

Evidence on the effects of Core Capacity projects on the CIG programs is mixed. To date, four

Core Capacity projects have entered into project development: a commuter rail project in San

Francisco ($447 million requested in CIG funds), a heavy rail project in Chicago ($957 million),

a heavy rail project in New York ($100 million), and a light rail project in Dallas ($59 million).

None had a funding agreement with FTA as of March 31, 2016. Of these projects, three are

Federal Transit Administration, Annual Report on Funding Recommendations Fiscal Year 2017: Capital Investment

Grant Program, p. 6, https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/FY17_Annual_Report.pdf.

Congressional Budget Office, “Projections of Highway Trust Fund Accounts—CBO’s March 2016 Baseline,”

https://www.cbo.gov/sites/default/files/51300-2016-03-HighwayTrustFund.pdf.

U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit,

Examining the Current and Future Demands on the Federal Transit Administration’s Capital Investment Grants, 113th

Cong., 1st sess., December 11, 2013.

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projects from legacy systems.32 These three systems account for almost all of the Core Capacity

projects funding requests, but a relatively small fraction of CIG funding available since FY2013.

Within the overall evaluation framework set out in federal law, FTA has considerable discretion in

determining how the evaluation factors are measured and weighted. These decisions can have

significant influence on the types of projects that are evaluated favorably and recommended for

funding. For that reason, there have been policy debates surrounding the evaluation methodology.

For example, regulations formerly measured the cost effectiveness of projects by considering the

project cost relative to users’ time savings. In MAP-21, enacted in 2012, the criterion was

changed to consider the annualized capital and operating and maintenance cost per trip. This

change improved the ratings of projects that generally provide relatively short trips, such as

streetcars, over those that provide relatively long trips, such as commuter rail. Because

researchers have found that the primary objective of streetcar projects has been urban

revitalization rather than transportation, and that the service they provide can compare

unfavorably with bus service, critics have argued that the changes made in MAP-21 elevated

projects that provide fewer transportation benefits.33

Research on the factors that contribute to the award of CIG funding has found that local financial

capacity largely determines FTA’s decisions. Project justification scores were important to meet

the minimum threshold for funding consideration, but once the threshold was met the ability of

local project sponsors to provide funding at the local level was the most important factor.34

Speed and Cost of Project Delivery

A major concern with the CIG program over the years has been the complexity, length, and

expense of the federal funding approval process. This requires the development of extensive data

and the preparation of a large number of detailed reports and other documents, all of which are

reviewed in depth by FTA in making project approval determinations. GAO has suggested that

the evaluation process might be used as a model for other federal programs to ensure the effective

use of federal funding.35 Nevertheless, concern has been raised that the requirements are overly

time-consuming and costly.36 One transit agency estimated in 2007 that federal involvement

An accepted definition of legacy systems does not exist, but the term typically includes the rail transit systems

serving the urban regions of New York, Chicago, Philadelphia, San Francisco, Boston, and Washington, DC. Other rail

transit systems in service in 1975 were in Baltimore, Cleveland, New Orleans, and Pittsburgh. See Department of

Transportation, Changing Face of Transportation, 2000, Figure 2-11, http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/

files/publications/the_changing_face_of_transportation/pdf/entire.pdf.

Robert Poole, “Insights on the Federal Transit Administration’s New Starts, Small Starts Program,” March 20, 2012,

http://reason.org/news/show/1012725.html. Jeffrey Brown, Hilary Nixon, and Enrique Ramos, “The Purpose, Function,

and Performance of Streetcar Transit in the Modern U.S. City: A Multiple-Case-Study Investigation,” February 2015,

Mineta Transportation Institute, http://transweb.sjsu.edu/PDFs/research/1201-streetcar-transit-in-modern-US-cities.pdf.

Kate Lowe, “Funding Rail: Federal Decisions and Local Financing,” Public Works Management & Policy, 2013,

18(2), pp. 127-144.

See, for example, Government Accountability Office, Surface Transportation: Restructured Federal Approach

Needed for More Focused, Performance-Based, and Sustainable Programs, GAO-08-400, Washington, DC, March

2008, http://www.gao.gov/new.items/d08400.pdf; see also Donald J. Emerson and Jeffrey D. Ensor, New Starts:

Lessons Learned for Discretionary Federal Transportation Funding Programs, Bipartisan Policy Center, January 25,

2010, http://www.bipartisanpolicy.org/sites/default/files/New%20Starts%20Paper%20Jan%202010.pdf.

See, for example, Department of Transportation, Federal Transit Administration, New Starts Program Assessment

Final Report, Report Prepared by Deloitte, February 12, 2007, http://transportationfortomorrow.com/final_report/pdf/

volume_3/background_material/15_new_starts_program_assessment_final_report.pdf.

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through the CIG program added an extra one to two years to a project and 10% to 15% extra in

project costs.37

Legislative changes in MAP-21 and the FAST Act have sought to speed the development of CIG

projects. For example, MAP-21 simplified the project development process by reducing the

number of steps for the more expensive projects from four to three, and for less expensive

projects from three to two. Moreover, MAP-21 authorized the use of project justification warrants

in certain cases “that allow a proposed project to automatically receive a satisfactory rating on a

given criterion based on the project’s characteristics or the characteristics of the project

corridor.”38 For example, for an eligible project that costs between $50 million and $100 million

in a corridor that currently has 6,000 or more weekday transit trips, FTA will automatically give

the project a medium rating for mobility, cost effectiveness, and congestion relief. The FAST Act

created an Expedited Project Delivery for Capital Investment Grants Pilot Program to more

quickly review up to eight projects involving P3s in which the federal grant is 25% or less of the

project cost.

No comprehensive evaluations have been conducted on whether the various changes in laws and

regulations have resulted in projects progressing more quickly through the CIG pipeline. GAO

reported in 2016 that it found limited data to assess the speed of project approvals.39 It should be

noted that assessing the time it takes to complete projects can be very difficult.40 A 2009 GAO

study of delivery times of projects supported by the CIG program also pointed to data problems

even without trying to assess the length of the initial planning process.41

Public-Private Partnerships (P3s)

Federal law promotes the use of P3s in the construction of major capital transit projects, like

those supported by the CIG program, in several ways. DOT is required to provide to transit

agencies education on related laws and regulations and technical assistance on “practices and

methods to best utilize private providers of public transportation” (49 U.S.C. §5315). As part of

that mandate, in July 2014, DOT created the Build America Transportation Investment Center

(BATIC), which has as part of its mission to “cultivate” P3s. DOT also offers several types of

financing that support P3s, including loans and other types of credit assistance through the TIFIA

(Transportation Infrastructure Finance and Innovation Act) program and the issuance of private

activity bonds. The FAST Act, as noted above, created the Expedited Project Delivery for Capital

Investment Grants Pilot Program for P3 projects. CIG project sponsors have suggested that FTA

could help by providing more technical assistance for P3 projects in the form of project

development checklists and training opportunities.42

Testimony of R. Snoble, Chief Executive Officer, Los Angeles County Metropolitan Transportation Authority, in

U.S. Congress, House Subcommittee on Highways and Transit, May 10, 2007, http://transportation.house.gov/Media/

File/Highways/20070510/Roger%20Snoble%20Testimony.pdf.

Federal Transit Administration, “Final Interim Policy Guidance Federal Transit Administration Capital Investment

Grant Program,” June 2016, Chapter I, p. 30.

Government Accountability Office, Public Transit: Observations on Recent Changes to the Capital Investment

Grant Program, GAO-16-495, April 2016, p. 25, http://www.gao.gov/assets/680/676880.pdf.

CRS Report R41947, Accelerating Highway and Transit Project Delivery: Issues and Options for Congress, by

(name redacted) and (name redacted).

Government Accountability Office, Public Transportation: Better Data Needed to Assess Length of New Starts

Process, and Options Exist to Expedite Project Development, Washington, DC, August 2009, GAO-09-784, p. 14,

http://www.gao.gov/new.items/d09784.pdf.

Ibid., p. 23.

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Some of the main benefits of P3s are said to be private project financing, cost savings, quicker

project completion, infrastructure and service quality improvements, and a transfer of some risks

from the public to the private sector.43 For example, the risks being transferred to the private

sector in the development of the Purple Line light rail project in Maryland by a P3 include design

errors, problems with utility relocations, commodity and labor inflation during project

construction, contractor-caused cost overruns and schedule delays, and performance of the system

and vehicles. Risks being retained by the public sector include right-of-way acquisition and fare

revenue and ridership. Some risks, such as geotechnical risks and inflation during the operating

period, are being shared between the public and private sectors.44

Congress has previously sought to involve the private sector in CIG projects by creating the

Public-Private Partnership Pilot Program (Penta-P) and simplifying the CIG project development

process. To date, the major success of these efforts has been to involve the private sector in the

designing and building of projects through design-build contracts, and also the operation and

maintenance of constructed projects through design-build-operate-maintain contracts.45 One

public transportation P3, the Eagle Project in Denver, has involved long-term private financing.

Maryland’s Purple Line also will include private financing when it goes to financial close, which

is planned for mid-June 2016. In both cases, the public sector has agreed to make regular

payments to the private partner so long as the rail project achieves availability and performance

goals. A third transit project, the Las Vegas Monorail, was constructed as an almost purely private

venture. The private sponsors assumed the risk that too few passengers would pay to ride the

service. Due primarily to poor ridership, the Las Vegas Monorail Company was restructured in

bankruptcy in 2010, although its service continued to operate. The reorganized company is now

proposing to extend its 3.9-mile line.

CRS Report R43410, Highway and Public Transportation Infrastructure Provision Using Public-Private

Partnerships (P3s), by (name redacted) .

Maryland Transit Administration, “Purple Line P3 Agreement Risk/Responsibility Allocation,” March 2, 2016,

http://www.purplelinemd.com/images/p3/contract/MTA%20-%20Purple%20Line%20-%20Appendix%201%20%20Risk%20Allocation.pdf.

U.S. Government Accountability Office, GAO-10-19, October 2009.

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Appendix. Capital Investment Grant Program

Legislative History

The CIG program evolved from Section 3 of the Urban Mass Transportation Act of 1964 (P.L. 88365). In 1994, Section 3 became Section 5309 in a revision without substantive change to Title 49

of the United States Code.46 Beginning in the 1970s, as the commitment of, and demand for,

federal funding began to grow, DOT issued a series of policy statements on the principles by

which it would distribute discretionary money to so-called “new starts.” These statements, issued

in 1976, 1978, 1980, and 1984, introduced a series of principles that were later written into

federal law, including long-range planning, alternatives analysis incorporating a baseline

alternative, cost effectiveness, local financial commitment, multi-year contracts specifying the

limits of federal participation, supportive local land use planning, and a ratings system.47

Congress inserted many of these principles into law in the Surface Transportation and Uniform

Relocation Assistance Act of 1987 (STURAA; P.L. 100-17). STURAA established the criteria by

which CIG projects would be judged in order to be eligible for federal funding, and also required

DOT’s recommendations for funding in the subsequent fiscal year to be detailed in an annual

report to Congress. The criteria enacted in STURAA required a CIG project to be based on an

alternatives analysis and preliminary engineering, to be cost-effective, and to be supported by an

acceptable amount of local financial commitment that is stable and dependable.

In the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA; P.L. 102-240),

Congress added to the cost-effectiveness criterion the justifications of mobility improvements,

environmental benefits, and operating efficiencies. ISTEA also added a list of lesser

considerations such as congestion relief, energy consumption, transit supportive land use policies

and future patterns, and economic development. A CIG project would still need to be based on

alternatives analysis and preliminary engineering, and to have an acceptable amount of local

financial commitment.48

The Transportation Equity Act for the 21st Century (TEA-21; P.L. 105-178) left the existing law

mostly unchanged, but added a few additional considerations such as the costs of sprawl and the

technical capacity of a grantee (usually a transit agency) to undertake a project. TEA-21 required

FTA to rate projects overall as “highly recommended,” “recommended,” or “not recommended.”

TEA-21 also made it a requirement that FTA formally approve a project to move from

preliminary engineering into final design. FTA published its Final Rule in response to TEA-21 in

2000,49 and subsequently published several program guidance documents.50

Revision of Title 49, Transportation, United States Code (P.L. 103-272).

Federal Transit Administration, “Major Capital Investment Projects; Final Rule,” 65 Federal Register 76863-76884,

December 7, 2000, http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2000_register&docid=00-30921filed.pdf. See also Daniel Duff, Edward J. Gill, Jr., and G. Kent Woodman, Legal Handbook for the New Starts

Process, Legal Research Digest 30, Transit Cooperative Research Program, February 2010.

FTA issued a Notice in 1996 explaining the way in which it would evaluate New Starts projects, and amended that

Notice in 1997. See Federal Transit Administration, “Section 5309 (Section 3(j)) FTA New Starts Criteria,” 61 Federal

Starts Criteria,” 62 Federal Register 60756-60758, November 12, 1997.

Federal Transit Administration, “Major Capital Investment Projects; Final Rule,” 65 Federal Register 76864-76884,

December 7, 2000.

These were Advancing Major Transit Investments Through Planning and Project Development (2003), Additional

Guidance on Local Initiation of Alternatives Analysis Planning Studies, and New Starts Baseline Alternative Review

(continued...)

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The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users

(SAFETEA; P.L. 109-59) changed the three-point scale, introduced in TEA-21, to a five-point

scale of high, medium-high, medium, medium-low, and low. It also elevated two factors—

economic development effects and public transportation supportive land use policies and future

patterns—from considerations to project justifications. SAFETEA also created the Small Starts

program to allow smaller projects to pass through a simpler approval process. In SAFETEA,

Small Starts were defined as projects costing less than $250 million and seeking $75 million or

less in CIG funding. Beginning in FY2007, SAFETEA reserved $200 million per year of the

overall CIG program authorization for Small Starts.

Prior to the enactment of SAFETEA, FTA issued a “Dear Colleague” letter announcing that it

would target funding to those projects that received a medium or better rating for cost

effectiveness.51 According to FTA, this was in response to concerns expressed by Congress,

GAO, and DOT’s Inspector General about recommending funding for projects that received a

medium-low on cost effectiveness.52 Following the passage of SAFETEA, in a Notice of

Proposed Rulemaking (NPRM) on August 3, 2007, FTA proposed that a medium rating be

required for FTA to recommend a project for funding, and for cost effectiveness to be weighted as

50% of the project justification measure. The other 50% would consist of land use and economic

development combined into one criterion at a weight of 20%, mobility benefits (20%),

environmental benefits (5%), and benefits to transit-dependent riders (5%).53

This proposal was not well received by the House Transportation and Infrastructure Committee,54

or by those responding to the notice.55 Some of the concerns were that, contravening the intent of

SAFETEA, the rule would place too much emphasis on cost effectiveness and would not

sufficiently weight the economic development effects of transit projects. This, critics contended,

would favor projects designed for suburban commuters, such as commuter rail and BRT projects,

over more centrally located transit projects such as streetcars.56 Because of these concerns,

Congress included language in the Consolidated Appropriations Act, 2008 (P.L. 110-161)

preventing FTA from implementing a final rule. In the SAFETEA-LU Technical Corrections Act

of 2008 (P.L. 110-244), Congress amended 49 U.S.C. §5309 to require that FTA “give

comparable, but not necessarily equal, numerical weight to each project justification criteria in

(...continued)

and Approval Procedures.

Jennifer L. Dorn, Administrator, Federal Transit Administration, “New Starts Rating and Evaluation,” Dear

Colleague Letter, C-03-05, March, 9, 2005, http://www.fta.dot.gov/newsroom_297.html.

U.S. Government Accountability Office, Public Transportation: Opportunities Exist to Improve the Communication

and Transparency of Changes to the New Starts Program, GAO-05-674, Washington, DC, 2005, p. 23,

http://www.gao.gov/assets/250/246862.pdf.

Federal Transit Administration, “Major Capital Investment Projects,” 72 Federal Register 43328-43377, August 3,

2007.

U.S. Congress, House Committee on Transportation and Infrastructure, Hearing on the Federal Transit

Administration’s Proposed Rule on the New Starts and Small Starts Programs, “Summary of Subject Matter,” 110th

Cong., 1st sess., September 26, 2007, H.Hrg. 110-72 (Washington: GPO, 2007).

Federal Transit Administration, “Major Capital Investment Projects,” 74 Federal Register 7388, February 17, 2009,

http://www.gpo.gov/fdsys/pkg/FR-2009-02-17/pdf/E9-3208.pdf.

K. Siggerud, Director of Physical Infrastructure, U.S. Government Accountability Office, Preliminary Analysis of

Changes to and Trends in FTA’s New Starts and Small Starts Programs, Statement Before House Subcommittee on

Highways and Transit, May 10, 2007, GAO-07-812T, http://www.gao.gov/new.items/d07812t.pdf; T. Herrick, “A

Streetcar Named Aspire: Lines Aim to Revive Cities,” Wall Street Journal, June 20, 2007, B1.

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calculating the overall project rating.” This was carried forward in MAP-21 (49 U.S.C.

§5309(g)(2)(B)(ii) and 49 U.S.C. §5309(h)(6)).

FTA withdrew the 2007 NPRM in February 2009, and then in July 2009 issued final guidance

establishing cost effectiveness as 20% of the project justification rating. The other factors were

economic development (20%), mobility improvements (20%), land use (20%), environmental

benefits (10%), and operating efficiencies (10%). This was followed in January 2010 with an

announcement that FTA was withdrawing the policy of recommending funding only for projects

that received a medium cost-effectiveness rating or better in favor of recommending projects with

an overall rating of medium or better (although projects must score a medium or better on both

project justification and local financial commitment).57 At the same time, FTA announced that it

intended to issue a new NPRM for changes to the evaluation for New Starts and Small Starts

projects. In this regard, FTA issued an Advance Notice of Proposed Rulemaking on June 3, 2010,

requesting comments on how to improve measurement of cost effectiveness, environmental

benefits, and economic development.58 An NPRM was issued January 25, 2012, along with

proposed New Starts/Small Starts policy guidance.59 A final rule was published January 9, 2013,

along with revised proposed policy guidance.60

Before the changes in the proposed rulemaking were finalized, MAP-21 was enacted, making

substantial changes to the CIG program. Project eligibility was changed by authorizing funding

for substantial investments in existing fixed-guideway lines that increase the capacity of a

corridor by at least 10%. These are termed “Core Capacity improvement projects.” MAP-21 also

authorized the evaluation and funding of a program of interrelated projects.

As noted earlier, MAP-21 also simplified the New Starts process by reducing the number of

major stages from four to three—termed project development, engineering, and construction. To

enter the project development phase, the applicant now needed only to apply to FTA and initiate

the review process required by the National Environmental Policy Act of 1969 (NEPA; P.L. 91190). The act eliminated the duplicative alternatives analysis previously required to be conducted

separately from the alternatives analysis required by NEPA. In general, alternatives analysis is an

evaluation of different solutions to a transportation problem in a specific area or corridor and the

choice of locally preferred alternative (49 C.F.R. §611.5; 40 C.F.R. §1502.14).

MAP-21 made some changes to the project justification criteria. The act eliminated operating

efficiencies and added congestion relief. MAP-21 also changed the definition of cost

effectiveness from incremental travel time saved to cost per rider. This was expected to improve

the rating of projects that generally provide shorter trips, such as streetcars.

Some of the changes proposed by FTA in its January 2012 NPRM were incorporated into the law,

such as a change in the way cost effectiveness is measured. Some other elements of the program

Ray LaHood, Secretary of Transportation, “Dear Colleague New Starts and Small Starts Project,” January 13, 2010,

http://www.fta.dot.gov/documents/Dear_Colleague_New_Starts_and_Small_Starts_Project.pdf.

Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 75 Federal

Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 77 Federal

of Transportation, Federal Transit Administration, “Proposed New Starts/Small Starts Policy Guidance,” January 25,

2012, http://www.fta.dot.gov/12304_14971.html.

Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 78 Federal

Federal Transit Administration, “Proposed New Starts and Small Starts Policy Guidance,” January 9, 2013,

Washington, DC, http://www.fta.dot.gov/documents/NewStartsPolicyGuidance.pdf.

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subject to proposed new rules were changed by the law, and some changes in the law were not

considered in the proposed new rules. For example, operating efficiencies was dropped from the

list of project justifications and congestion relief added.

The rulemaking and revised proposed policy guidance establish some significant changes in the

evaluation of New Starts/Small Starts projects. According to the rulemaking, FTA wrote that it

has two broad goals: to measure a broader range of benefits and to simplify the evaluation

process. To accomplish the first goal, FTA stated that, for example, it will evaluate environmental

benefits by measuring anticipated changes in air quality criteria pollutants, energy use,

greenhouse gas emissions, and safety. Environmental benefits in the previous evaluation scheme

were based solely on an area’s air quality designation. To accomplish the second goal, FTA stated

it will take a number of steps including simplifying measures, eliminating the baseline alternative

requirement, and improving the ways in which data are submitted to FTA and evaluated. One of

the simplified measures is to evaluate mobility improvements as the estimated total number of

trips generated by the project, with an extra weight for trips by transit-dependent people. Prior to

the rulemaking, five measures were used to estimate mobility improvements, including

incremental travel time saved per passenger mile over the baseline alternative. This change, along

with changes to the cost effectiveness measure required by law, was expected to improve the

rating of projects that generally provide shorter trips, such as streetcars.

On August 5, 2015, FTA announced the availability of final interim policy guidance on the CIG

program.61 FTA noted that this final policy guidance was characterized as ‘‘interim’’ because it

was planning to initiate rulemaking to amend 49 C.F.R. Part 611 to fully carry out the authorizing

statute for the CIG program, 49 U.S.C. §5309, as amended by MAP-21. The final interim policy

guidance addressed four topics not previously addressed in the regulations or policy guidance:

(1) the measures and breakpoints for the congestion relief criterion applicable to New

Starts and Small Starts projects; (2) the evaluation and rating process for Core Capacity

Improvement projects, including the measures and breakpoints for all the project

justification and local financial commitment criteria applicable to those projects; (3) the

prerequisites for entry into each phase of the CIG process for each type of project in the

CIG program, and the requirements for completing each phase of that process; and (4)

ways in which certain New Starts, Small Starts, and Core Capacity Improvement projects

can qualify for ‘‘warrants’’ entitling them to automatic ratings on some of the evaluation

criteria.62

The FAST Act, enacted in December 2015, made more changes to the CIG program. The law

changed the definition of a Small Starts project to one that involves $100 million or less of CIG

funding (up from $75 million) and costs less than $300 million (up from $250 million). Also for

Small Starts, the FAST Act changed the definition of a corridor-based BRT service to eliminate

the requirement for it to provide frequent, bi-directional service for a substantial part of weekend

days. It must now provide such service only on weekdays.

The FAST Act added authority for the CIG program to fund projects that benefit both public

transportation and intercity passenger rail (although the eligible costs must be attributable to the

transit portions of the project). A New Starts project (costing $300 million or more and requesting

$100 million or more) is now limited to a CIG program funding share of 60%. The law also

created the Expedited Project Delivery for Capital Investment Grants Pilot Program.

Federal Transit Administration, Final Interim Policy Guidance Federal Transit Administration Capital Investment

Grant Program, August 2015, http://www.fta.dot.gov/grants/13094_5221.html.

Federal Transit Administration, “Notice of Availability of Final Interim Policy Guidance for the Capital Investment

Grant Program,” 80 Federal Register 46515, August 5, 2015.

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Author Contact Information

(name redacted)

Specialist in Transportation Policy

[redacted]@crs.loc.gov , 7-....

Congressional Research Service

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