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

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URL: https://www.frixlaw.com/law-library/documents/crs%3AR44534

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** June 20, 2016
- **Citation:** R44534

## Text

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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Public Transportation Capital Investment Grant (New Starts) Program

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
1

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.
3
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/.
4
For a discussion of all FTA programs, see CRS Report R42706, Federal Public Transportation Program: In Brief, by
(name redacted) .
2

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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
5

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.
6
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

7

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.
8
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.
9
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
10

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.
11
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.
12
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
13

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.
14
Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 78 Federal
Register 1992-2037, January 9, 2013, p. 2026, http://www.gpo.gov/fdsys/pkg/FR-2013-01-09/pdf/2012-31540.pdf.

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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
15

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.
16
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.
17
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.
18
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
19

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.
20
Federal Transit Administration, Budget Estimates FY2017, CIG-10, https://www.transportation.gov/sites/dot.gov/
files/docs/FTA-FY-2017-CJ.pdf.
21
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.
22
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
23

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.
24
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.
25
Richard Voith, “Comment,” Brookings-Wharton Papers on Urban Affairs, Brookings Institution Press, 2005, pp.
198-206 https://muse.jhu.edu/article/192582/pdf.
26
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.
27
Federal Transit Administration, Budget Estimates FY2017, AE-18, https://www.transportation.gov/sites/dot.gov/files/
docs/FTA-FY-2017-CJ.pdf.
28
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
29

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.
30
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.
31
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

32

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.
33
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.
34
Kate Lowe, “Funding Rail: Federal Decisions and Local Financing,” Public Works Management & Policy, 2013,
18(2), pp. 127-144.
35
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.
36
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
37

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.
38
Federal Transit Administration, “Final Interim Policy Guidance Federal Transit Administration Capital Investment
Grant Program,” June 2016, Chapter I, p. 30.
39
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.
40
CRS Report R41947, Accelerating Highway and Transit Project Delivery: Issues and Options for Congress, by
(name redacted) and (name redacted).
41
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.
42
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.

43

CRS Report R43410, Highway and Public Transportation Infrastructure Provision Using Public-Private
Partnerships (P3s), by (name redacted) .
44
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.
45
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
46

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.
48
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
Register 67093-67107, December 19, 1996; Federal Transit Administration, “Section 5309 (Section 3(j)) FTA New
Starts Criteria,” 62 Federal Register 60756-60758, November 12, 1997.
49
Federal Transit Administration, “Major Capital Investment Projects; Final Rule,” 65 Federal Register 76864-76884,
December 7, 2000.
50
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...)
47

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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.
51
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.
52
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.
53
Federal Transit Administration, “Major Capital Investment Projects,” 72 Federal Register 43328-43377, August 3,
2007.
54
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).
55
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.
56
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
57

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.
58
Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 75 Federal
Register 31385, June 3, 2010.
59
Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 77 Federal
Register 3848-3909, January 25, 2012, http://www.gpo.gov/fdsys/pkg/FR-2012-01-25/pdf/2012-1198.pdf; Department
of Transportation, Federal Transit Administration, “Proposed New Starts/Small Starts Policy Guidance,” January 25,
2012, http://www.fta.dot.gov/12304_14971.html.
60
Department of Transportation, Federal Transit Administration, “Major Capital Investment Projects,” 78 Federal
Register 1992-2037, January 9, 2013, p. 2026, http://www.gpo.gov/fdsys/pkg/FR-2013-01-09/pdf/2012-31540.pdf;
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.
61

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.
62
Federal Transit Administration, “Notice of Availability of Final Interim Policy Guidance for the Capital Investment
Grant Program,” 80 Federal Register 46515, August 5, 2015.

Congressional Research Service

18

Public Transportation Capital Investment Grant (New Starts) Program

Author Contact Information
(name redacted)
Specialist in Transportation Policy
[redacted]@crs.loc.gov , 7-....

Congressional Research Service

19

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR44534. Public record. Not legal advice.