[Federal Register Volume 81, Number 22 (Wednesday, February 3, 2016)]
[Notices]
[Pages 5816-5819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01941]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2016-0009]


Notice of Request for Comments on Update to the Uniform System of 
Accounts (USOA) and Changes to the National Transit Database (NTD) 
Reporting Requirements

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice; request for comments on updates to the USOA and changes 
to the NTD reporting requirements.

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SUMMARY: The Federal Transit Administration is updating the Uniform 
System of Accounts (USOA). The proposed updates are prompted by the 
outdated nature of the 1995 USOA. FTA is seeking public comment on 
these proposed changes before releasing the updated USOA and 
implementing the associated changes to 49 U.S.C. 5335, National Transit 
Database.

DATES: Comments must be received by April 4, 2016. Any comments filed 
after this deadline will be considered to the extent practicable.

ADDRESSES: Please submit your comments by only one of the following 
methods, identifying your submission by Docket Number FTA-2016-0009
    <bullet> Federal eRulemaking Portal: Submit electronic comments and 
other data to http://www.regulations.gov.
    <bullet> U.S. Mail: Send comments to Docket Operations; U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., West Building 
Room W12-140, Washington, DC 20590-0001.
    <bullet> Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building, Ground Floor, at 1200 
New Jersey Avenue SE., Washington, DC, between 9:00 a.m. and 5:00 p.m., 
Monday through Friday, except Federal holidays.
    <bullet> Fax: Fax comments to Docket Operations, U.S. Department of 
Transportation, at (202) 493-2251.
    Instructions: You must include the agency name (Federal Transit 
Administration) and Docket Number (FTA-2016-0009) for this notice, at 
the beginning of your comments. If sent by mail, submit two copies of 
your comments. Due to security procedures in effect since October 2001, 
mail received through the U.S. Postal Service may be subject to delays. 
Parties submitting comments should consider using an express mail firm 
to ensure their prompt filing of any submissions not filed 
electronically or by hand. If you wish to get confirmation that FTA 
received your comments, you must include a self-addressed stamped 
postcard. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided. You 
may review U.S. DOT's complete Privacy Act Statement published in the 
Federal Register on April 11, 2000, at 65 FR 19476 or http://DocketsInfo.dot.gov.

FOR FURTHER INFORMATION CONTACT: Margaret Schilling, National Transit 
Database Program Manager, Office of Budget and Policy, (202) 366-2054, 
or email: <a href="/cdn-cgi/l/email-protection#365b574451574453421845555e5f5a5a5f58517652594218515940"><span class="__cf_email__" data-cfemail="5439352633352631207a27373c3d38383d3a3314303b207a333b22">[email protected]</span></a>. Office hours are from 8:30 a.m. 
to 5:00 p.m., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The National Transit Database (NTD) is the Federal Transit 
Administration's (FTA) primary database for statistics on the transit 
industry. Congress established the NTD to ``help meet the needs of . . 
. the public for information on which to base public transportation 
service planning . . .'' (49 U.S.C 5335). Currently, 821 transit 
providers in urbanized areas report to the NTD through its online 
reporting system. Each year, performance data from these submissions 
are used to apportion over $7 billion of FTA funds for Urbanized Area 
Formula (section 5307) grants, Rural Area Formula (section 5311) 
grants, Tribal Transit Formula grants, Bus and Bus Facilities Formula 
(section 5339) grants, and State of Good Repair (section 5337) grants. 
The data is made available on the NTD Web site at www.ntdprogram.gov 
for the benefit of the public, transit systems, and all levels of 
government. The data is also used in the annual National Transit 
Summaries and Trends report, the biennial Conditions and Performance 
Report to Congress, and in meeting FTA's obligations under the 
Government Performance and Results Act. Reporting requirements are 
governed by a Uniform System of Accounts (USOA) and Reporting Manuals 
that are issued each year. The USOA is the chart of accounts and 
accounting manual that describes how transit agencies are to report to 
the NTD. The USOA was originally published in 1977 when NTD reporting 
began. While the NTD has undergone numerous and substantial changes in 
the past 38 years, the USOA was last updated for minor changes in 1995. 
This notice proposes updates to the USOA to better align with today's 
NTD and accounting practices and to address FTA data needs and common 
questions among NTD reporters.

II. Background

    This notice proposes changes to the USOA that impact NTD reporting 
requirements. FTA proposes that changes A-J below take effect starting 
with the FY17 data reporting cycle. Change K below, the revised APC 
certification policy, would take effect when changes are proposed in 
the Federal Register. Following is a summary of proposed changes:

A. Separation of ``Passenger-Paid Fares'' and ``Organization-Paid 
Fares''
B. Separation of ``Paid Absences'' From ``Fringe Benefits''
C. Consolidation of ``Casualty and Liability Costs'' Under General 
Administration Function
D. Expansion of Assets and Liabilities Object Classes (F-60)
E. Addition of ``Voluntary Non-Exchange Transactions''
F. Addition of ``Sales and Disposals of Assets''
G. Simplification of State Fund Reporting
H. Reorganization of B-30 Contractual Relationship

    Additionally, this notice proposes the following changes to the NTD 
reporting requirements that are not directly addressed in the updated 
USOA:

I. Separation of Operators' and Non-Operators' Work Hours and Counts
J. Enhanced Auditor's Review
K. Revised APC Certification Policy

    Finally, FTA seeks comments on the decision to not require a 
separate non-add item for police force expenses.

III. Proposed Changes to the National Transit Database Reporting 
Requirements

A. Separation of ``Passenger-Paid Fares'' and ``Organization-Paid 
Fares''

    Currently, the NTD category ``Passenger Fares'' includes both 
directly paid fares collected via standard methods such as a farebox or 
purchase of monthly passes and less direct fares--for example, where a 
university pays the transit agency to provide fare-free service to 
students. This combination of revenue sources has been confusing to 
some reporters.

[[Page 5817]]

There are examples where guidance is ambiguous, including when another 
entity pays the transit agency for service but does not pay the full 
cost of the service.
    In order to address these issues and clarify reporting 
requirements, FTA proposes the separation of Passenger Fares into two 
categories: ``Passenger-Paid Fares'' and ``Organization-Paid Fares.'' 
Traditional fare revenue would be captured as ``Passenger-Paid Fares'', 
while other ``farelike'' revenue would be ``Organization-Paid Fares.'' 
This proposed update provides additional insight into the sources of 
revenues and helps the reporters identify peers with similar operating 
models.

B. Separation of ``Paid Absences'' From ``Fringe Benefits''

    Currently the NTD includes employees' paid absences, e.g., vacation 
time, holidays, and sick leave, as ``Fringe Benefits.'' However, this 
differs from many reporters' internal accounts; many reporters classify 
these expenses as salaries and wages.
    In order to resolve this discrepancy, FTA proposes the creation of 
a new category ``Paid Absences.'' This category would be further 
divided between operators and non-operators, to align with the way 
salaries and wages are reported in NTD. FTA considered simply moving 
paid absences from ``Fringe Benefits'' to ``Salaries and Wages,'' but 
did not propose this change because it would produce a discontinuity in 
the data over time.

C. Consolidation of ``Casualty and Liability Costs'' Under General 
Administration Function

    Currently the NTD captures ``Casualty and Liability Costs'' 
expenses under three functions: Vehicle Maintenance, Non-Vehicle 
Maintenance, and General Administration. However, these expenses are 
reported under these functions inconsistently across reporters. Some 
reporters divide the expenses among the three functions according to 
the type of expense, while others report all ``Casualty and Liability 
Costs'' under General Administration.
    Due to the intricacy and variety of expenses classified as 
``Casualty and Liability Costs,'' it may be impractical to provide 
classifications for all possible ``Casualty and Liability Costs'' by 
function. Therefore, FTA proposes that reporters consolidate all 
``Casualty and Liability Costs'' under the General Administration 
function. While this would produce a one-time discontinuity in the data 
for some reporters, it would improve comparability of data across 
reporters in the future and reduce reporting burden.

D. Expansion of Assets and Liabilities Object Classes (F-60)

    The current F-60 Statement of Finances form was instituted with the 
purpose of providing a transit agency's financial status at a glance. 
However the required fields in the current form do not provide a 
comprehensive insight into the agency's financial status. Its limited 
nature makes it only marginally useful for this purpose while creating 
confusion for reporters in determining what information to report.
    FTA proposes expanding the form to resemble an agency's published 
balance sheet at the summary level. FTA initially considered requiring 
agencies to upload their published balanced sheets to NTD but decided 
against this because it would not provide uniform categories with which 
to facilitate fair peer comparisons and calculation of financial 
metrics. FTA proposes the following categories:

<bullet> Assets
    [cir] Current Assets
    [ssquf] Cash and Cash Equivalents
    [ssquf] Accounts Receivable
    [ssquf] Inventory
    [ssquf] Prepaid Expenses
    [ssquf] Current Investments and Current Portions of Long-Term 
Investments
    [ssquf] Other Current Assets
    [cir] Noncurrent Assets
    [ssquf] Capital Assets
    [ssquf] Intangible Assets
    [ssquf] Capital Leases Receivable
    [ssquf] Pension Funds
    [ssquf] Special Funds
    [ssquf] Work in Process
    [ssquf] Investments
<bullet> Liabilities
    [cir] Current Liabilities
    [ssquf] Current Accounts Payable
    [ssquf] Short-Term Debt and Current Portions of Long-Term Debt
    [ssquf] Accrued Liabilities
    [ssquf] Other Current Liabilities
    [cir] Noncurrent Liabilities
    [ssquf] Long-Term Debt
    [ssquf] Noncurrent Accounts Payable
    [ssquf] Capital Lease Obligations
    [ssquf] Long-Term Pension Liabilities
    [ssquf] Estimated Liabilities
    [ssquf] Other Noncurrent Liabilities

E. Addition of ``Voluntary Non-Exchange Transactions''

    The existing USOA did not provide guidance on how agencies should 
report transaction in which an entity does not receive equal return for 
what it provides. For example, if one agency constructs a new fixed 
rail line and transfers ownership to another agency, this transaction 
is called a ``Voluntary Non-Exchange Transaction.''
    FTA proposes the addition of revenue and expense fields for 
``Voluntary Non-Exchange Transactions'' on the F-10 Sources of Funds: 
Non-Added Revenue and F-40 Operating Expenses Summary and Reconciling 
Items forms. The reporter providing the asset or service would record 
the value of the asset as a reconciling item expense, while the 
receiving reporter would record its value as non-added revenue, which 
means it would not be included in the reporter's revenue total 
alongside cash revenues like fares, local funds, and federal grants. 
This would provide explanation for the sudden decrease/increase in 
assets.

F. Addition of Sales and Disposals of Assets

    Currently, the USOA includes funds received from selling or 
disposing capital assets in directly generated funds. In most cases 
this activity is not considered a revenue, since the agency is simply 
converting an asset from one form to another (e.g., capital asset to 
cash) rather than increasing its total assets. FTA proposes to add an 
object class called ``Sales and Disposals of Assets'' under the 
category Non-Added Revenues on the F-10 Sources of Funds to capture 
funds earned from sales and disposals of capital assets. When the 
agency recognizes a gain on such a sale by selling the asset for more 
than its book value, the gain would be reported as revenue.

G. Simplification of State Fund Reporting

    All State funding comes either from the General Fund or the 
Transportation Fund. Currently, the NTD requires transit agencies to 
report the Transportation Fund at the original dedicated sources of 
funds level such as fuel taxes, income taxes, and vehicle registration 
fees. However, it has proved impractical for reporters to separate 
their Transportation Funds into these categories, since the proportion 
of the Transportation Funds provided by each funding source changes 
from year to year, and in many cases, occurs before the funding ever 
reaches the transit agency.
    FTA proposes to consolidate all Dedicated Funds and Other Funds 
under the State section on the F-10 Sources of Funds form into a single 
category called ``State Transportation Funds.'' Rather than gathering 
inaccurate or inconsistent data, NTD will simply collect whether state 
funding comes from the General Fund or the Transportation Fund.

[[Page 5818]]

H. Reorganization of B-30 Contractual Relationship

    At present, the B-30 Contractual Relationship form requires 
agencies to perform counterintuitive calculations and report data in 
fields with names that are difficult to understand. As a result, 
agencies may report inaccurate and inconsistent data into the NTD and 
data users have difficulty interpreting NTD data.
    FTA proposes to have three different versions of this form, 
customized based on whether the fare revenues are retained by the 
contractor or by the reporter, and whether the purchased transportation 
mode is Vanpool. The customized forms will reduce confusion regarding 
the calculation that must be performed to report data into the form.
    In the new scheme, there would be separate versions of the form for 
the case where the contractor retains the fare revenue, and the case 
where the agency retains the fare revenue. The reporter would complete 
fields called ``Purchased Transportation Fare Revenue,'' ``Direct 
Payment,'' ``Capital Leasing,'' ``Other Operating Expenses Incurred by 
the Buyer,'' and ``Other Reconciling Item Expenses Incurred by the 
Buyer.''
    In addition, FTA proposes that Vanpool mode should have its own 
version of the B-30 form. This will reflect the ways Vanpool contracts 
usually differ from other purchased transportation contracts. Vanpool 
reporters would complete fields called ``Passenger Fees,'' ``Passenger 
Out-of-Pocket Expenses,'' ``Agency Subsidy,'' ``Capital Leasing,'' 
``Other Operating Expenses Incurred by the Buyer,'' and ``Other 
Reconciling Item Expenses Incurred by the Buyer.''

I. Separation of Operators' and Non-Operators' Work Hours and Counts

    On the F-30 Operating Expenses form, NTD collects data on salaries 
and wages for operators and non-operators separately. However, on the 
R-10 Employees form, NTD currently collects data on hours worked and 
employee counts for these categories combined.
    FTA proposes that NTD collect data on hours worked and employee 
counts for operators and non-operators separately. This would allow 
calculation of separate wage rates and hours per employee for these two 
categories, which would be useful data to any user interested in labor 
costs. The data should be readily available in most agencies' payroll 
systems and thus a marginal increase in burden.

J. Enhanced Auditor's Review

    Currently FTA requires NTD reporters to undergo a one-time 
auditor's review at the commencement of reporting. The agency must file 
an Independent Auditor's Statement for Financial Data. The purpose of 
this review is to ensure that the reporter is equipped to report to the 
NTD according to FTA's requirements, using accrual accounting and the 
USOA. There is currently little guidance on when, if ever, an agency 
must obtain a new Auditor's Statement. In addition, Reduced Reporters 
(Small Systems) are not required to perform this review.
    FTA proposes that Reduced Reporters be required to undergo this 
review, and further, that all NTD reporters be required to undergo a 
new review once every ten years. This would provide additional 
confidence that all reporters are conforming to FTA's reporting 
requirements. Due to the limited nature and infrequency of this review, 
this new requirement should not be overly burdensome to reporters.

K. Revised APC Certification Policy

    The NTD requires the reporting of ridership data, both unlinked 
passenger trips (UPT) and passenger miles traveled (PMT), by mode and 
type of service. These two data items are important measures of service 
consumed and are used by many analysts to assess the effectiveness of 
transit services. PMT is also used in the annual formula allocation of 
federal transit funds for the Urbanized Area Formula Program (Sec.  
5307) and the Bus and Bus Facilities Grants (Sec.  5339).
    Some transit agencies use automatic passenger counters (APCs) for 
collecting UPT and PMT. This requires prior FTA approval. If a transit 
agency fails to obtain FTA approval in advance, the NTD will not accept 
the reported APC-derived data.
    In the current certification process FTA requires agencies to 
submit the following plans:
    <bullet> An APC benchmarking plan for the first year and,
    <bullet> AN APC maintenance plan for subsequent years.
    The APC benchmarking plan must include a validation of the APC 
measuring process for UPT and PMT data against a separate manual sample 
covering a full year. The maintenance plan includes an annual checkup 
to insure that the APC system continues to function correctly.
    We propose to revise the certification requirements for new APC 
systems and for maintenance testing of all APC systems. FTA believes 
that APC technologies have advanced to the point where they produce 
better data than sampling with manual counts and, as such, we no longer 
need the extensive comparisons we have required in the past. The goal 
of the new certification procedures proposed here is to insure that APC 
data collection systems are implemented correctly while reducing the 
time and effort required for reporters to demonstrate this.
    We propose to revise the benchmarking test by eliminating the full 
year comparison of manual and APC counts on randomly-selected trips and 
replacing it with a more comprehensive comparison of a much smaller 
number of trips. Reporters with fewer than 30 APC-equipped vehicles 
would need to evaluate fifteen trips. Reporters with more than 30 APC-
equipped vehicles would need to evaluate a number of trips equivalent 
to half their number of APC-equipped vehicles, up to a maximum of 50 
trips. The trips selected for evaluation must meet the following 
requirements:
    <bullet> The trips must include some of the reporter's heaviest 
passenger loads,
    <bullet> The trips must be distributed over as much of the agency's 
fleet of APC-equipped vehicles as possible, and
    <bullet> Manual and APC data sets must be collected for each trip.
    Trips do not have to be selected randomly. They can be spread over 
any convenient period of time. They no longer need to be distributed 
over an entire year.
    Manual counts can be made using data collection staff or on-board 
cameras. To insure accurate counts we recommend using a data collector 
at each door on heavily-loaded trips. APC data should be processed to 
correct for anomalies as it would be in the reporter's normal data 
collection process. The objective is to compare manually-collected data 
with processed APC data and demonstrate that they are equivalent or 
that any differences are justifiable.
    Reporters would be required to analyze the manual and APC data on a 
side-by-side basis to identify and explain inconsistencies. APC and 
manual counts of passengers getting on and off at each stop should be 
compared for each trip. FTA may ask to see this data as part of our 
certification review. A report on the results of the analysis must be 
submitted to FTA with the certification request. This report would 
include:
    <bullet> Description of the APC system(s) used,
    <bullet> Description of the benchmarking procedure,

[[Page 5819]]

    <bullet> Description of trips that were eliminated due to APC data 
that failed diagnostic tests,
    <bullet> Comparison of distances between stops used by the two 
methods,
    <bullet> Passenger count comparison (% difference),
    <bullet> Passenger miles comparison (% difference), and
    <bullet> Calculation of unbalanced error over all trips (sum of 
magnitude of differences in on and off counts at each stop as a 
percentage of the sum of manually counted on and offs).
    FTA would certify APC systems where the passenger count comparison, 
passenger mile comparison, and unbalanced error over all benchmark 
trips are each less than five percent (5%). Reporters that file a 
reduced report (formerly called a small systems waiver) do not need to 
meet the standards for passenger miles or unbalanced error.
    We propose to eliminate the maintenance plan requirement and 
replace it with a repetition of the benchmarking test in every fiscal 
year that is evenly divisible by three. APC systems already approved 
for NTD reporting would need to be retested in the next fiscal year 
that is evenly divisible by three.
    Transit agencies that collect this ridership data on all (>98 
percent) of their vehicle trips may correct for missing trips using 
average values. However, if the vehicle trips with missing data exceed 
two percent (2%) of all trips, agencies would need to have a qualified 
statistician approve the correction (or expansion) method. This is 
consistent with our treatment of manual counting methods and does not 
represent a change in policy. Thus an agency that does not have a fleet 
that is fully-equipped with APCs could use APC data in any NTD-approved 
sampling plan.

IV. Additional Comment Request

    Additionally, FTA considered requiring transit systems to report 
their police force expense as a separate non-add item in the F-30 
Operating Expenses form in addition to reporting it in the appropriate 
operating expense object classes (e.g., Salaries and Wages and Fringe 
Benefits). This change would have enabled a transit system with its own 
independent police force to subtract the police force expense from 
total operating expenses in order to perform a fair peer evaluation 
against another entity without its own police force. However, FTA 
decided against this change, as there are other types of police or 
security force arrangements that are not included in this consideration 
(e.g., municipal police force). Additionally, employing an independent 
police force is an operational decision and the related expenses are 
justifiable operating cost. FTA suggests that data users consider 
security arrangements when selecting peer groups for comparison in 
order to control for differences in operating cost. FTA seeks comment 
from transit systems on this decision.
    FTA thanks our stakeholders in advance for providing comment on the 
above proposed changes to the NTD reporting requirement.

Therese W. McMillan,
Acting Administrator.
[FR Doc. 2016-01941 Filed 2-2-16; 8:45 am]
 BILLING CODE P


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