Under one program, New Starts, FTA identifies and selects  fixed guideway transit projects for funding—including heavy, light, and  commuter rail; ferry; and certain bus projects (such as bus rapid transit). The New Starts program serves as an important source of federal funding  for the design and construction of transit projects throughout the country. 1). 2). Although many projects receive a summary rating that would  make them eligible for FFGAs, only a few are proposed for FFGAs in a  given fiscal year. 3). FTA recommended five projects for new FFGAs. In  addition, FTA recommended funding for two projects with pending  FFGAs. The administration’s fiscal year 2007 budget proposal requests that $1.47  billion be made available for the New Starts program. FTA Proposed Nine Procedural Changes to the New Starts Program and Adopted Four after Considering Comments from the Transit Community

In January 2006, FTA proposed nine procedural changes for the New  Starts program beginning with the fiscal year 2008 evaluation cycle. These  changes include linking the New Starts and NEPA planning requirements  and processes and capping New Starts funding when projects enter the  final design phase. SAFETEA-LU’s Changes to the New Starts Program Include Identifying New Evaluation Criteria to Establishing the Small Starts Program

SAFETEA-LU made a number of changes to the New Starts program,  including establishing a new eligibility category, the Small Starts program,  and identifying new evaluation criteria. FTA has also  proposed and sought public input on the new evaluation criteria and other  possible changes to the New Starts program that would affect traditional  New Starts projects. FTA has taken some initial steps in implementing SAFETEA-LU changes. For example, in January 2006, FTA published the proposed New Starts  policy guidance and, as will be discussed later in this report, the ANPRM  for the Small Starts program. The Small Starts program is a component of the  existing New Starts program that, according to the conference reports  accompanying SAFETEA-LU, is intended to provide project sponsors with  an expedited and streamlined evaluation and ratings process. In addition, others were concerned that  FTA’s proposals minimized the importance of the new land use and  economic development evaluation criteria introduced by SAFETEA-LU,  and they recommended that the measures for land use and economic  development be revised. Since FTA does not plan to issue its final rule for the New Starts and Small  Starts programs until early 2008, FTA issued final interim guidance for the  Small Starts program in July 2006 to ensure that project sponsors would  have an opportunity to apply for Small Starts funding and proposed  projects could be evaluated in the upcoming cycle (i.e., the fiscal year 2008  evaluation cycle). In its guidance, FTA also identified potential challenges in implementing  some SAFETEA-LU changes. FTA officials provided technical  clarifications, which we incorporated as appropriate. Appendix I: Scope and Methodology

To address our objectives, we reviewed the administration’s fiscal year  2007 budget request, the Federal Transit Administration’s (FTA) annual  New Starts report, FTA’s New Starts policy guidance and Small Starts  Advanced Notice of Proposed Rulemaking (ANPRM), public comments  received on FTA’s docket on New Starts and Small Starts, FTA’s fiscal year  2008 reporting instructions for the New Starts program, federal statutes  pertaining to the New Starts program, and previous GAO reports. Our interviews were  designed to gain project sponsors’ perspectives on three main topics,  including the impact of FTA’s proposed changes to the New Starts  application and project development process during the fiscal year 2008  evaluation cycle, FTA’s implementation of the newly established Small  Starts program, and FTA’s plans to align and revise its evaluation and  ratings process with the changes required by the Safe, Accountable,  Flexible, Efficient Transportation Equity Act: A Legacy for Users  (SAFETEA-LU). Table 7 summarizes FTA’s  proposed changes to the definition of eligibility, the evaluation and rating  process, and the project development process as well as FTA’s rationale  for the proposed changes and the transit community’s response to the  proposed changes.
Why GAO Did This Study

The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) authorized about $7.9 billion in commitment authority, through fiscal year 2009, for the Federal Transit Administration's (FTA) New Starts program, which is used to select fixed guideway transit projects, such as rail and trolley projects, and to award full funding grant agreements (FFGAs). The New Starts program serves as an important source of federal funding for the design and construction of transit projects throughout the country. SAFETEA-LU requires GAO to report each year on FTA's New Starts process. As such, GAO examined (1) the number of projects that were evaluated, rated, and proposed for FFGAs for the fiscal year 2007 evaluation cycle and the proposed funding commitments for the fiscal year 2007 budget; (2) procedural changes that FTA proposed for the New Starts program beginning with the fiscal year 2008 evaluation cycle; and (3) changes SAFETEA-LU made to the New Starts program and FTA's implementation of these changes. GAO reviewed New Starts documents and interviewed FTA officials and project sponsors, among other things, as part of its review. GAO is not making recommendations in this report. In commenting on a draft of this report, FTA provided technical clarifications, which we incorporated as appropriate.

What GAO Found

For the fiscal year 2007 evaluation cycle, FTA evaluated and rated 20 projects, recommended 5 projects for new FFGAs and 2 projects with pending FFGAs. FTA also identified 5 other projects that may be eligible for funding outside of FFGAs. The administration's fiscal year 2007 budget proposal requests $1.47 billion for the New Starts program, which is about $200 million more than the amount received last year. FTA proposed nine procedural, or nonregulatory, changes for the New Starts program beginning with the fiscal year 2008 evaluation cycle that were generally intended to improve the management of the New Starts process. These changes include linking the New Starts and National Environmental Policy Act planning requirements and processes and capping New Starts funding when projects enter the final design phase. As required by SAFETEA-LU, FTA published these proposals in policy guidance and sought public input. Members of the transit community supported changes that they thought would make the New Starts process more efficient, but many commenters expressed strong opposition to other changes, citing, for example, the time and resources required to analyze ridership and cost uncertainties. Consequently, FTA implemented only 4 of the proposed procedural changes, but indicated that a final decision on the other 5 proposed changes would be made through the rulemaking process. SAFETEA-LU introduced eight statutory changes to the New Starts program that include establishing the Small Starts program and identifying new evaluation criteria. FTA has taken some initial steps to implement these changes, including issuing an Advanced Notice of Proposed Rulemaking (ANPRM) for the Small Starts program and proposed policy guidance for the New Starts program, both in January 2006. The Small Starts program is a new component of the New Starts program and is intended to offer an expedited and streamlined application and review process for small projects. The transit community, however, questioned whether the Small Starts program, as outlined in the ANPRM, would provide such a process. In July 2006, FTA introduced a new eligibility category called Very Small Starts, which is for the simplest and least costly projects. Very Small Starts projects will qualify for an even simpler and more expedited evaluation process. FTA also identified and sought public input on possible changes to the New Starts program that would have an impact on traditional New Starts projects, such as revising the evaluation process to incorporate the new evaluation criteria identified by SAFETEA-LU. According to FTA, a potential challenge in moving forward is incorporating both land use and economic development as separate criteria in the evaluation process, including developing appropriate measures for the criteria and avoiding duplication in counting benefits.