Projects that compete for funding through the Capital Investment Grants  program are designed and implemented by project sponsors, which are  usually local transit agencies. FTA is also required to evaluate  and rate the local financial commitment to a project, including evidence of  stable and dependable financing sources, as well as the project sponsor’s  ability to operate the project and continue to operate any related transit  system. As mentioned earlier, the funding that projects receive is subject  to congressional appropriations. For  example, in addition to establishing Core Capacity projects as a new  category of eligible projects, MAP-21 reduced the number of phases in  the development process that projects in the Capital Investment Grants  program must follow to be eligible for and receive funding. FTA Has Not Addressed Three Out of Four Outstanding Statutory Provisions

FTA has not addressed three of four outstanding statutory provisions  concerning the Capital Investment Grants program. When we initiated our review, FTA officials told us FTA did not have  immediate plans to address the outstanding statutory provisions due to  the administration’s stated intent to phase out the Capital Investment  Grants program. However, as also mentioned earlier, in March 2018 the Consolidated  Appropriations Act, 2018, provided the program with more than $2.6  billion, and also directed FTA to continue to administer the Capital  Investment Grants program in accordance with the program’s procedural  and substantive requirements. During our review, FTA officials told us that other factors have also  influenced FTA’s decisions. For example, FTA officials noted that since  our last report, issuing regulations regarding the evaluation and rating  process for Core Capacity projects was not identified as one of the  Department’s regulatory priorities and, currently, FTA has no plans to  issue such regulations. In the case of the FAST Act’s provision establishing a pilot program— called the “Expedited Project Delivery for Capital Investment Grants Pilot  Program,” designed to create a fast-track approval process for projects  that meet specific statutory criteria, such as having a maximum federal  share of 25 percent—FTA published a notice in the Federal Register in  2016 stating that it would publish guidance describing the process project  sponsors should follow to apply for consideration as a pilot project. FTA Has a Process to Verify That Requirements Are Met before Recommending a Core Capacity Project for Funding

Based on our review of FTA’s policy guidance, instructions for applying to  the Capital Investment Grants program, and interviews with FTA  officials and six Core Capacity project sponsors, we found that FTA has  established a process to verify that proposed Core Capacity projects  meet statutory requirements before recommending projects for funding. In addition, based on our review of documentation supporting FTA’s  funding recommendations for the two Core Capacity projects with grant  agreements as of June 2017, as well as interviews with FTA officials and  both project sponsors, we found that FTA took steps to verify that the  statutory requirements were met before recommending those two projects  for full funding grant agreements. FTA stated that it is reviewing the law and determining  next steps but did not indicate that it has specific plans or timeframes for  addressing the three outstanding provisions discussed in this report. By  not addressing those provisions, FTA runs the risk of failing to implement  provisions of federal law, and the federal government or project sponsors  may be missing opportunities to deliver transit projects more efficiently. Recommendations for Executive Action

We are making the following three recommendations to the Department  of Transportation:
The FTA Administrator should initiate a rulemaking regarding the  evaluation and rating process for Core Capacity Improvement  projects, consistent with statutory provisions. (Recommendation 1)
The FTA Administrator should take steps, such as undertaking  additional research or public outreach, to enable FTA to evaluate and  rate projects in a program of interrelated projects, in a manner  consistent with statutory provisions. Accordingly, we believe that our assessment is an accurate reflection of  FTA’s progress in addressing the outstanding statutory provisions of the  Capital Investment Grants program as amended by MAP-21 and the  FAST Act.
Why GAO Did This Study

FTA's Capital Investment Grants program is the primary source of federal financial assistance to support transit projects that are locally planned, implemented, and operated. FTA evaluates and rates projects seeking funding through this program according to statutory criteria and recommends to Congress which projects to fund. The funding that project sponsors receive is subject to congressional appropriation.
MAP-21 includes a provision for GAO to biennially review FTA's implementation of the Capital Investment Grants program. This report discusses: (1) FTA's progress in addressing statutory provisions contained in MAP-21 and the FAST Act and (2) how the evaluation and rating process FTA has established for Core Capacity Improvement projects enables FTA to verify that statutory requirements are met before recommending such projects for funding. GAO reviewed the relevant laws and FTA's guidance. GAO also interviewed FTA officials and six project sponsors, representing seven of the eight Core Capacity Improvement projects in the Capital Investment Grants program at the time of GAO's review.

What GAO Found

The Federal Transit Administration (FTA) has not addressed three statutory provisions concerning the Capital Investment Grants program contained in the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the Fixing America's Surface Transportation Act (FAST Act). Specifically, FTA has not:
issued regulations regarding the evaluation and rating process for Core Capacity Improvement projects, which are a category of eligible projects within the program;
established a program of interrelated projects designed to allow for the simultaneous development of more than one transit project within the Capital Investment Grants program; or
implemented a pilot program designed to create a fast-track approval process for transit projects that meet specific statutory criteria.
Throughout this review, FTA officials told GAO they do not have immediate plans to address these three statutory provisions. Officials cited a proposal by the President to phase out the Capital Investment Grants program as one of the factors influencing this decision. However, in March the Consolidated Appropriations Act, 2018, provided the program with more than $2.6 billion and required FTA to continue to administer the program in accordance with the procedural and substantive requirements specified in statute. Subsequently, FTA officials told GAO that they are reviewing the Act and determining next steps. However FTA officials did not indicate that they intend to address these provisions. If FTA does not implement the outstanding provisions, FTA and project sponsors—that is, local transit agencies—may be missing opportunities to deliver transit projects more efficiently.
Based on a review of FTA's policy guidance, on FTA's instructions for applying to the Capital Investment Grants program, and on other documentation supporting the two Core Capacity Improvement projects that FTA has recommended for funding as of June 2017, GAO found that FTA has established a process to verify that proposed Core Capacity Improvement projects meet statutory requirements before recommending projects for funding. Core Capacity Improvement projects are capital investments designed to increase the capacity of an existing transit system and must meet specific statutory requirements to be eligible for funding through the program. GAO found that prior to recommending a project for funding FTA works with project sponsors to verify that their proposed project includes elements that will increase transit system capacity versus maintaining the current system, that the required amount of local funding is committed to the project, and that sponsors have the technical and financial capacity to complete the project they are proposing, among other statutory requirements.

What GAO Recommends

FTA should initiate a rulemaking regarding the evaluation and rating process for Core Capacity Improvement projects and take steps to address two other statutory provisions. FTA agreed with the recommendations but disagreed with certain findings on which they are based. GAO believes these findings are valid, as discussed in this report.