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 fixed-guideway 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; 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. 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. 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. 114-94 ). 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. The CIG program is one of six major funding programs administered by FTA, accounting for about 19% of FTA's budget ( Figure 1 ). 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 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. 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. 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 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." Projects approved for CIG funding typically have had less than a 60% federal share, often much less. 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. Four types of projects are eligible for CIG funding: New Starts p rojects , 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 p rojects , defined as a new fixed guideway project or a corridor-based 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-of-way dedicated to public transportation use. Core Capacity p rojects , 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. Program of Interrelated p rojects , the simultaneous development of two or more New Starts, Small Starts, or Core Capacity projects, or a combination thereof. 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. 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. 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 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," 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. 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)).