The New Starts program provides federal funds to public transit agencies on a largely competitive basis for the construction of new fixed-guideway transit systems and the expansion of existing fixed-guideway systems (49 U.S.C. §5309). New Starts has funded the development of bus rapid transit (BRT) and ferries, as these are eligible under the definition of fixed-guideway, but the vast majority of funding has gone to transit rail systems. The three main types of transit rail are subway/elevated rail (heavy rail), light rail, and commuter rail. With federal support, a number of cities, such as Charlotte, Denver, Minneapolis, and Salt Lake City, have opened entirely new transit rail systems, and many others have added to existing systems. Between 1985 and 2008, consequently, rail transit route-mileage almost doubled, with light rail mileage more than tripling, commuter rail mileage doubling, and subway mileage growing by 25%. Transit rail systems now provide about 43% of unlinked public transit trips, with most of the rest, about 53%, provided by bus. Public transit, as defined in federal law, does not include transportation by school bus, intercity bus, or intercity passenger rail (Amtrak). The New Starts program is one element of the federal transit program that is administered by the Federal Transit Administration (FTA) within the Department of Transportation. The federal transit program is authorized by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA) ( P.L. 109-59 ). Since SAFETEA expired on September 30, 2009, the program has operated under a series of authorization extensions. For example, the program was extended through December 31, 2010, under the Hiring Incentives to Restore Employment (HIRE) Act ( P.L. 111-147 ). During the five years of SAFETEA (FY2005 through FY2009), the New Starts Program accounted for about 18% of authorized transit funding. Other major funding programs are the Urbanized Area Formula Program (43% of funding in SAFETEA), the Fixed-Guideway (Rail) Modernization program (16%), and the Bus and Bus-Related Facilities Capital program (9%). The remaining 15% of funding authorized goes for several other smaller programs, state and metropolitan planning, research, and FTA operations. New Starts grants tend to be relatively large, and securing funding through the competitive grant making process often determines whether a project moves forward. This is a major reason for the great demand nationwide for New Starts monies. Moreover, the New Starts program, probably more than any other federal transit program, has implications for the future of transit and transit policy. Rail transit systems, more so than buses, are typically very long-lived assets that require major future financial commitments for operation and maintenance. The New Starts program underwent several significant changes in SAFETEA, and a long-term reauthorization of the surface transportation program provides a major opportunity for Congress to consider more changes. This report discuses major issues that Congress may consider in a long-term reauthorization. These include the size of the overall program and how those funds are distributed in terms of project size and the required local match; the types of transit modes that are eligible and favored within the program; the New Starts approval process, including the way in which projects are evaluated and rated for funding; and private sector participation in New Starts projects. It concludes with some thoughts on the longer-term relevance of New Starts for the future of public transit. Since the enactment of SAFETEA, New Starts has been divided into two parts, one for smaller initiatives and one for larger projects. Beginning in FY2007, SAFETEA reserved $200 million per year of the overall New Starts program authorization for smaller projects, those costing $250 million or less in total and seeking $75 million or less in federal funding. These projects are known as Small Starts. The rest of the funding authorized over the five-year life of SAFETEA, about $7.4 billion of the overall $8 billion for FY2005 through FY2009, was for major New Starts projects. Federal funding for major New Starts 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. To obtain an FFGA, a project must be authorized in law, and a project sponsor must pass through a series of steps that make up the New Starts approval process ( Figure 1 ). According to federal law, the process for obtaining an FFGA begins with a regional, multimodal planning process that includes systems planning and alternatives analysis. Systems planning examines the transportation needs of a region. Alternatives analysis examines the benefits and costs of different options, such as light rail or Bus Rapid Transit (BRT), in a specific transportation corridor or regional subarea. One of the alternatives that must be included is the "baseline alternative," which is defined by FTA as "the best that can be done to address identified transportation needs in the corridor without a major capital investment in new infrastructure." The conclusion of the alternatives analysis is the selection of a locally preferred alternative (LPA), which is submitted by the project sponsor to FTA for evaluation and approval for entry into preliminary engineering. New Starts projects must also fulfill the requirements of the National Environmental Policy Act of 1969 (NEPA) because they involve a proposed major federal action significantly affecting the environment. FTA requires a project to have moved beyond the NEPA scoping phase before entering preliminary engineering. NEPA scoping involves identifying the alternatives that will be examined in the NEPA documents and the significant environmental issues that arise from the proposed project. Preliminary engineering involves the project sponsor refining the project by examining the costs, benefits, and impacts of different design alternatives, and completing an analysis of environmental impacts as required by NEPA. Once preliminary engineering is complete, FTA may approve the project for final design. Final design includes the preparation of final construction plans and cost estimates, and may also include right-of-way acquisition and utility relocation. After final design is complete, FTA may approve the project for an FFGA, at which point the project may move into the construction phase. FTA retains some oversight of a project as it is constructed. 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. 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(g)(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(g)(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 determining whether to approve a project's move from one step to the next in the New Starts process, FTA computes an overall project rating calculated by averaging the summary ratings of the project justification criteria and local financial commitment criteria ( Figure 2 ). In order to advance into each stage of development, a project must achieve an overall rating of at least medium on a five-point scale (low, medium-low, medium, medium-high, high). The local financial commitment summary rating is derived from a project's capital finance plan (weighted 50%), the operating finance plan (weighted 30%), and the non-New Starts funding share (weighted 20%). The project justification summary rating is derived by evaluating project justification criteria with the following weights: cost effectiveness (20%), mobility improvements (20%), economic development effects (20%), public transportation supportive land use policies and future patterns (20%), environmental benefits (10%), and operating efficiencies (10%). Until recently, FTA would only recommend projects that received a medium or better on cost effectiveness in addition to an overall medium rating, but the Obama Administration has announced that this is no longer the case. Cost effectiveness is measured as the incremental cost per hour of transportation system user benefit. A project need now only receive an overall rating of medium to be recommended, with local financial commitment and project justification both receiving a rating of medium or better. Discussed in more detail below, this change is a reaction to the criticism that focusing so heavily on time savings misses many of the other potential benefits of transit, such as environmental benefits, and skews the New Starts program away from certain types of transit modes and projects, such as streetcar systems. As noted earlier, a major change made to the New Starts program in SAFETEA was the creation of a different set of requirements for projects costing $250 million or less overall that seek $75 million or less in federal funds. The Small Starts project process is a simplified version of the process for major New Starts projects (49 USC §5309(e)). A Small Starts project must still emerge from systems planning and an alternatives analysis. However, preliminary engineering and final design are combined into a single phase known as project development. FTA approval is required for entry into project development. After project development, FTA may recommend the project for a Project Construction Grant Agreement. As with major New Starts projects, the project rating is based on its project justification summary rating and local financial commitment rating. The project justification criteria and weights are different, however, with cost effectiveness, economic development, and public supportive land use each weighted at 33.3%. A project must receive at least a medium rating to be approved.