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Statement of Need: Section 3011 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act--A Legacy for Users (SAFETEA-LU) made a number of changes to 49 U.S.C. 5309, which authorizes the Federal Transit Administration's (FTA's) fixed guideway capital investment grant program known as "New Starts." SAFETEA-LU also added created a new category of major capital investments that have a total project cost of less than $250 million, and that are seeking less than $75 million in section 5309 major capital investment funds. This rulemaking proposes to implement those changes and a number of other changes that FTA believes will improve the New Starts program.

Summary of the Legal Basis: Section 5309, Title 49 of the United States Code requires the Secretary to promulgate regulations for evaluation and selection of major capital investment projects that have a total project cost of less than $250 million, and that are seeking less than $75 million in Section 5309 major capital investment funds.

Alternatives: FTA sought public input through an Advance Notice of Proposed Rulemaking and several outreach sessions on the various options it might pursue as part of this rulemaking. The Notice of Proposed Rulemaking contains a discussion of the various alternatives it considered in proposing a regulatory framework for implementing 49 U.S.C. 5309(d) and (e).

Anticipated Costs and Benefits: The single largest change in the New Starts program is the creation in SAFETEA-LU of the "Small Starts" program, to which FTA has added "Very Small Starts." Over the first ten years of the Small Starts program, the cumulative impact of transfer from New Starts to Small Starts will likely be $1.9 Billion, with a Net Present Value of $1.311 Billion using a discount rate of 7 percent. This effect is difficult to characterize in terms of cost or benefit, as it simply represents a "transfer of a transfer" from one governmental entity to another.

Risks: The proposed rulemaking provides a framework for a discretionary grant program; it does not propose to regulate other than for applicants for Federal funds. As such, the rulemaking poses no risks for the regulated community, other than for the risks inherent in pursuing Federal funds that might not be awarded if a project fails to satisfy the eligibility and evaluation criteria in the proposed regulatory structure.