SAFETEA-LU authorized over $52 billion for federal transit programs, including the New Starts and JARC programs, from fiscal year 2005 through fiscal year 2009. SAFETEA-LU authorized $7.9 billion for the New Starts program and $727 million for the JARC program. Both of these programs are managed by FTA. The New Starts program is a discretionary grant program for investments in new fixed-guideway projects. Under the statutorily-defined evaluation process for the New Starts program, FTA identifies and selects fixed- guideway transit projects—including heavy, light, and commuter rail; ferry; and busway projects—for funding. FTA generally funds New Starts projects through full funding grant agreements (FFGA), which establish the terms and conditions for federal participation in a New Starts project and also define a project’s scope, including the length of the system and the number of stations; the project’s schedule, including the date when the system is expected to open for service; and the project’s cost. To obtain an FFGA, a project must progress through a local or regional review of alternatives and meet a number of federal requirements, including providing information for the New Starts evaluation and rating process. As required by SAFETEA-LU, New Starts projects must emerge from a regional, multimodal transportation planning process. The first two phases of the New Starts process—systems planning and alternatives analysis— address this requirement. The systems planning phase identifies the transportation needs of a region, while the alternatives analysis phase provides information on the benefits, costs, and impacts of different corridor-level options, such as rail lines or bus routes. The alternatives analysis phase results in the selection of a locally preferred alternative— which is intended to be the New Starts project that FTA evaluates, as required by statute. After a locally preferred alternative is selected, project sponsors seek FTA’s approval for entry into the preliminary engineering phase. Following completion of preliminary engineering and federal environmental requirements—and assuming New Starts requirements continue to be met—FTA may approve the project’s advancement into final design, after which FTA may approve the project for an FFGA and proceed to construction, as provided for in statute. FTA oversees grantees’ management of projects from the preliminary engineering phase through construction and evaluates the projects for advancement into each phase of the process, as well as annually for the New Starts report to Congress. To help inform administration and congressional decisions about which projects should receive federal funds, FTA assigns ratings based on a variety of financial and project justification criteria, and then assigns an overall rating. For the fiscal year 2007 evaluation cycle, FTA used the financial and project justification criteria identified in TEA-21. These criteria reflect a broad range of benefits and effects of the proposed project, such as cost-effectiveness, as well as the ability of the project sponsor to fund the project and finance the continued operation of its transit system (see fig. 1). FTA assigns the proposed project a rating for each criterion, then assigns a summary rating for local financial commitment and project justification. Finally, FTA develops an overall project rating. Projects are rated at several points during the New Starts process—as part of the evaluation for entry into preliminary engineering and final design, and yearly for inclusion in the New Starts annual report that is submitted to Congress. More recent than New Starts, the JARC program was created in 1998 in order to support the nation’s welfare reform goals. Without adequate transportation, welfare recipients face significant barriers in moving from welfare to work. In 1998, we reported that three-fourths of welfare recipients live in central cities or rural areas, while two-thirds of new entry-level jobs are located in suburbs. Public transportation facilities often offer limited or no access to many of these jobs. JARC, which is administered by FTA, was designed to fill these gaps in transportation services for low-income individuals. JARC is intended to increase collaboration among transit agencies, local human service agencies, nonprofit organizations, and others and to improve the mobility of low-income individuals seeking work. Programs selected to receive grants—including the expansion of public transportation routes, ridesharing activities, and promotion of transit voucher programs—are designed to assist low-income individuals in accessing employment opportunities and related services, such as child care and training. SAFETEA-LU made changes to the New Starts program that range from identifying new evaluation criteria to establishing the Small Starts program. FTA has taken some initial steps in implementing these changes, including issuing an ANPRM for the Small Starts program and 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 expedite and streamline the application and review process for small projects. The transit community, however, questioned whether the program, as outlined in the ANPRM, would streamline the process. In its January 2006 guidance, FTA also identified and sought public input on possible changes to the New Starts program that would affect traditional New Starts projects, or large starts, such as revising the evaluation process to incorporate the new evaluation criteria identified by SAFETEA-LU. FTA also identified possible implementation challenges, including how to distinguish between land use and economic development criteria in the evaluation framework. SAFETEA-LU introduced eight changes to the New Starts program, codified an existing practice, and clarified federal funding requirements. These changes range from the creation of the Small Starts program to introducing new evaluation criteria. For example, SAFETEA- LU added economic development to the list of criteria that FTA must use in the New Starts evaluation process. In addition, SAFETEA-LU codified FTA’s requirement that project sponsors conduct before and after studies for all completed projects. SAFETEA-LU also clarified the federal share requirements for New Starts projects. In particular, SAFETEA-LU states that the federal share for a New Starts project may be up to 80 percent of the project’s net capital project cost, unless the project sponsor requests a lower amount. SAFETEA-LU also prohibits the Secretary of Transportation from requiring a nonfederal share of more than 20 percent of the project’s total net capital cost. This language addresses FTA’s policy of favoring projects that seek a federal New Starts share of no more than 60 percent of the total cost. FTA instituted this policy beginning with the fiscal year 2004 evaluation cycle in response to language contained in appropriation committee reports. Table 1 describes SAFETEA-LU provisions for the New Starts program and compares them to TEA-21’s requirements. FTA has taken some initial steps in implementing SAFETEA-LU changes. For example, in January 2006, FTA published the New Starts policy guidance and, as will be discussed later, the ANPRM for the Small Starts program. FTA will continue to implement the changes outlined in SAFETEA-LU through the rulemaking process over the next year and a half. Specifically, in response to SAFETEA-LU changes, FTA is developing a Notice of Proposed Rulemaking (NPRM) for the New Starts and Small Starts programs. FTA plans to issue the NPRM in January 2007, with the goal of implementing the final rule in January 2008. Figure 2 shows a time line of FTA’s actual and planned implementation of SAFETEA-LU changes. A significant SAFETEA-LU change was the creation of the Small Starts program. The Small Starts program is a discretionary grant program for public transportation capital projects that (1) are corridor-based, (2) have a total cost of less than $250 million, and (3) are seeking less than $75 million in federal Small Starts program funding. The Small Starts program is a component of the existing New Starts program, but, according to the conference reports accompanying SAFETEA-LU, is intended to provide project sponsors with an expedited and streamlined evaluation and rating process. Table 2 compares New Starts and Small Starts program requirements. In January 2006, FTA published an ANPRM to give interested parties an opportunity to comment on the characteristics of and requirements for the Small Starts program. In its ANPRM, FTA suggests that the planning and project development process for proposed Small Starts projects could be simplified by allowing analyses of fewer alternatives for small projects, allowing the development of evaluation measures for mobility and cost- effectiveness without the use of complicated travel demand modeling procedures in some cases, and possibly defining some classes of pre- approved low-cost improvements as effective and cost-effective in certain contexts. FTA also sought the transit community’s input on three key issues in its ANPRM, including eligibility, the rating and evaluation process, and the project development process. For each of these issues, FTA outlined different options for how to proceed, and then posed a series of questions for public comment, including the following questions on the rating and evaluation process: How should the evaluation framework for New Starts be changed or adapted for Small Starts projects? How might FTA evaluate economic development and land use as distinct and separate measures? How might FTA incorporate risk and uncertainty into project evaluations for Small Starts? What weights should FTA apply to each measure? FTA’s ANPRM for Small Starts generated a significant volume of public comment. While members of the transit community were supportive of some proposals for the Small Starts program, they also had a number of concerns. In particular, the transit community questioned whether FTA’s proposals would, as intended, provide smaller projects with a more streamlined evaluation and rating process. As a result, some commenters recommended that FTA simplify some of its original proposals in the final NPRM to reflect the smaller scope of these projects.