Grant anticipation borrowing (commonly referred to as GARVEE bonds for highways and GANs for transit) allows public agencies to securitize anticipated federal or state grant proceeds to generate upfront proceeds to fund capital outlays-or in simpler terms, to borrow against future federal and/or state funding. (See Box 7-5.) Borrowing against future grant proceeds for various purposes is neither a direct government lending program nor a new capability and is, in fact, relatively common among state and local governments, including historically for transit investment. The administrative mechanisms to effectively use GARVEEs for highway investment, however, were not in place until the passage of the NHS Act of 1995, which modified the federal reimbursement and eligibility process necessary to borrow against future highway funds.