Capital Investment Grants Program: FTA Should Address Several Statutory Provisions
Fast Facts
The Federal Transit Administration's Capital Investment Grants program is the main source of federal funds for local transit projects such as light rail and street cars. FTA decides which projects to recommend to Congress for funding based on criteria set by Congress, such as the level of economic benefit and congestion relief.
We found that the agency had not addressed three congressional requirements for the grants program, in part because the program was slated to be cut. However, funding was restored. We recommended that FTA start developing the regulations and meet the requirements.
A proposed second track for the Indiana South Shore commuter line train is one of the projects seeking funds through the Federal Transit Administration's Capital Investment Grants program
A South Shore commuter line train in Indiana.
Highlights
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.
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.
Recommendations
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.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| 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) |
FTA has taken steps toward implementing this recommendation. In July 2021, FTA published a Request for Information Concerning the Capital Investment Grants Program in the Federal Register, which sought input from the industry on improvements that could be made to the evaluation process for projects seeking funding from the Capital Investment Grants Program. Last year, FTA also published a Notice of Availability of Initial Guidance Proposals for the Capital Investment Grants Program. This notice invited public comment on initial guidance proposals covering the topic of "Eligibility as a Core Capacity project." In March 2024 FTA told us they anticipate releasing comprehensive CIG policy guidance for public comment soon, with published final version to follow by the end of calendar year 2024. We will continue to monitor FTA's efforts to implement this recommendation.
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| Department of Transportation | 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. (Recommendation 2) |
The Capital Investment Grants program is the primary source of federal financial assistance to support transit projects that are locally planned, implemented, and operated. The Federal Transit Administration (FTA) administers the program, and FTA's role is to evaluate and rate projects seeking funding through the program according to statutory criteria and recommend to Congress which projects to fund. In 2018, GAO reported that FTA had not addressed several statutory provisions concerning the program, including a provision requiring FTA to establish a program referred to in law as a "program of interrelated projects" that is designed to allow project sponsors (i.e., local transit agencies) the ability to simultaneously advance more than one project through the Capital Investment Grants program. At the time of GAO's review, FTA staff told GAO that establishing an evaluation and rating process for this program was challenging and required additional research and public outreach. FTA staff also told GAO that undertaking that additional research and public outreach was not a priority of the Department of Transportation at the time. Officials cited a proposal by the administration 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's procedural and substantive requirements. In addition, representatives from two of the project sponsors GAO spoke with, as well as representatives of the American Public Transportation Association, told GAO that the transit industry was interested in seeing FTA implement the program of interrelated projects provisions and that doing so could help transit agencies deliver projects more efficiently. Therefore, GAO recommended that FTA 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. In 2019, GAO confirmed that FTA had taken steps to implement this recommendation. First, in June and again in September 2018, FTA sought input from the transit industry regarding how to implement the statutory provisions for the program of interrelated projects during industry conferences. Then, in March 2019, FTA staff again met with industry representatives to discuss ideas for implementing the statutory provisions for the program. Second, in April and May 2019, FTA staff, including the Acting Administrator, met with the Capital Investment Grant program's authorizing and appropriations committees to discuss the statutory requirements governing the program of interrelated projects and sought feedback on the potentially conflicting statutory requirements FTA identified. By taking these steps, both FTA and project sponsors are in a better position to take advantage of opportunities to deliver transit projects more efficiently.
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| Department of Transportation | The FTA Administrator should take steps to describe the process project sponsors should follow to apply for consideration as a pilot project under the Expedited Project Delivery for Capital Investment Grants Pilot Program. (Recommendation 3) |
The Federal Transit Administration's (FTA) Capital Investment Grants program is the primary source of federal financial assistance to support transit projects that are locally planned, implemented, and operated, which are governed by statutory provisions. In 2018, GAO reported that FTA had not addressed an outstanding statutory provision concerning the Capital Investment Grants program, which stemmed from the Fixing America's Surface Transportation Act (FAST Act), enacted in 2015. Specifically, FTA had not implemented 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-that is, local transit agencies-should follow to apply for consideration as a pilot project. However, at the time of GAO's review, FTA had not provided sponsors with information that describes the process they should follow to apply for consideration as a pilot project. FTA officials told GAO that project sponsors have generally not expressed interest in participating in the program under the FAST Act and most of the project sponsors that GAO spoke with agreed. Nonetheless, in February 2018, the President's infrastructure plan recommended, among the changes that the pilot program be made available to all projects and not just on a pilot basis, and increase the federal share from 25 to 50 percent. Therefore, GAO recommended that FTA take steps to describe the process project sponsors should follow to apply for consideration as a pilot project under the Expedited Project Delivery for Capital Investment Grants Pilot Program. In 2018, GAO confirmed that FTA had taken steps to implement this recommendation. Specifically, FTA published a notice in the Federal Register soliciting interest in participating in the pilot program. FTA's Federal Register notice describes the steps interested transit agencies should take to apply to the pilot program and the deadline for submitting an application. By taking these steps, project sponsors have the information they need to apply for consideration as a pilot project under this program and could help FTA obtain a better understanding of the program and whether further changes are needed.
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