This report provides the U.S. Department of Transportation's recommendations to Congress for allocation of funds to be made available under 49 U.S.C. §5309 for construction of new fixed guideway systems and extensions (major capital investments or “New Starts”) for Fiscal Year (FY) 2003. Section 5309(o)(1) requires an annual report to Congress “that includes a proposal on the allocation of amounts to be made available to finance grants and loans for capital projects for new fixed guideway systems and extensions to existing fixed guideway systems among applicants for those amounts.”

The Annual Report on New Starts is a collateral document to the President's annual budget submission to Congress. It is meant to be a constructive element in the administration of the Federal transit assistance program, enriching the information exchange between the Executive and Legislative branches at the beginning of an appropriations cycle for the next Fiscal Year.

The President's budget for FY 2003 proposes that $1,214.40 million be made available for the §5309 major capital investment program. After setting aside one percent of these funds for oversight activities as proposed in the President’s budget and approved in Public Law 107-87, and providing funding for ferry capital projects in Alaska or Hawaii as required by §5309(m)(5)(A), $1,191.96 million is available for project grants. This report recommends funding for 34 projects in FY 2003. Of these, 25 have existing Federal funding commitments in the form of Full Funding Grant Agreements (FFGAs); funding commitments are pending for two; two are expected to be ready for funding commitments before the end of FY 2003 (i.e., September 30, 2003); and five meritorious projects are recommended for one year of funding.

The funding recommendations contained in this report are the result of an extensive project development and evaluation process. All of the projects recommended for multi-year funding commitments have completed this process, have been found by FTA to be worthy of a Federal funding commitment based on a comprehensive review of project justification and local financial commitment, and have either been issued FFGAs already or are strong candidates for FFGAs in the coming year.

To be eligible for New Starts funding, proposed projects must complete the appropriate steps in the planning and project development process, as described in §§5303-5306 and §5309 of Title 49, United States Code, and receive a rating of “recommended” or higher in the most recent FTA evaluation.