U.S. Department of Housing and Urban Development
 
                              ADMINISTRATION
 
Special Attention of                              Notice  96-3 ADM
 
                                                   Issued:  May 31, 1996
                                                  Expires:  May 31, 1997
 
                                                  Cross References:
 
Subject:  HUD Mass Transportation Transit Subsidy Program
 
1.   PURPOSE.  This Notice establishes the policy for the U.S. Department of
     Housing and Urban Development (HUD) mass transportation Transit Subsidy
     Program.
 
2.   SCOPE.  This Notice applies to HUD Headquarters, State and Area Offices.
 
3.   BACKGROUND.  The Federal Employees Clean Air Incentives Act provides for
     the establishment of programs to encourage Federal employees to commute
     by means other than single-occupancy motor vehicles.  General Services
     Administration (GSA) guidance allows appropriated funds, if otherwise
     available, to be used for transit subsidies.  The Internal Revenue
     Service (IRS) currently permits a $65 per month de minimis exclusion
     from fringe benefit taxation for mass transit passes provided to
     employees who commute via mass transit.  The exclusion applies only if
     the passes are used for commuting to and/or from work.
 
4.   POLICY.
 
     a.   The Department promotes and encourages the use of mass
          transportation for commuting to and/or from work.
 
     b.   HUD offices may participate in any program established by a State
          or local government that encourages personnel to commute to and/or
          from work via mass transportation. Such programs may involve the
          distribution of discounted transit passes or other incentives that
          reduce the cost to personnel who commute via mass transit.  If a
          voucher or similar item which may be exchanged for a transit pass
          is not readily available for direct distribution, cash
          reimbursements may be substituted.
 
ARSES:  Distribution: W-3-1
     c.   With the exception of eligible vanpool riders, only HUD personnel
          who are not named on a worksite motor vehicle parking permit with
          HUD or any other Federal agency, and who commute via mass transit
          may participate in the Transit Subsidy Program.  Eligible vanpools
          may receive parking benefits and participate in the Transit Subsidy
          Program.
 
     d.   Vanpools are eligible if they meet the following criteria: seating
          capacity is for at least 6 adults (not including the driver), and
          the vanpool is operated by a person in the business of transporting
          persons for compensation or hire.  Carpools are not eligible.
 
     e.   Fare media are not transferable and are to be used only for the
          commute to and/or from work (unless local transit authorities issue
          monthly passes for unlimited use).  Giving or selling fare media to
          other individuals, or purchasing the same from another, is
          prohibited even if the other individual is eligible to receive a
          transit subsidy.
 
     f.   HUD offices may use available appropriated funds to subsidize mass
          transportation costs of approved participants.  At initial
          implementation, the monthly transit subsidy will be 20% of the
          local monthly cost of mass transportation, up to a maximum of
          $21.00.  A monthly minimum transit subsidy of $5.00 may be issued
          in cases where the transit subsidy would otherwise be less than $5.
          The percentage and the amount not to exceed may increase depending
          on the availability of funds from year to year, up to but not in
          excess of the maximum allowed as established by the Department.
 
     g.   Distribution of fare media or cash reimbursements may be done
          through any functional area which provides adequate safeguards and
          monitoring of Government funds.
 
     h.   Issuing fare media is the preferred method of providing a transit
          subsidy.  However, if fare media is not available in denominations
          that will conveniently allow issuance of 20% of a monthly fare,
          cash reimbursement may be issued from the imprest fund.  Employees
          must provide proof of purchase of fare media prior to being issued
          a cash reimbursement.
 
     i.   An office may issue transit subsidies less frequently than monthly,
          such as every 6 weeks or quarterly, provided the transit subsidy
          does not exceed 20% of the monthly fare.  For example, if a monthly
          fare is $54, the transit subsidy would be $10.80.  The local
          transit authority issues transit checks of $21.  The office can
          issue a transit subsidy check of $21 every 2 months.
 
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     j.   An office may also group fares into ranges to meet local
          transportation authority fare media denominations.  For example,
          monthly fares may range from $46 to $134 per month while the local
          transit authority issues fare media in denominations of $7, $15,
          and $21.  An office may establish ranges of $50 and below for a $7
          transit subsidy, $51 to $90 for a $15 transit subsidy, and $91 and
          above for a $21 transit subsidy.  Ranges should be established to
          equate as closely as possible to the office monthly budget estimate
          for transit subsidies at the 20% level.
 
     k.   HUD employees, who are located at outstations, may obtain copies of
          form HUD-80, Application for Transit Subsidy Program, from their
          Administrative Officer.  The Administrative Officer will forward
          the completed application to the Transit Subsidy Office, where it
          will be processed for inclusion in the next month's dispensing
          account.  Local State and Area Office approving officials will
          develop procedures for including qualified outstationed employees
          in the local Transit Subsidy Program.
 
     l.   The purpose of the Transit Subsidy Program is to encourage maximum
          use of mass transit for commuting to and/or from work.  To qualify
          for participation in the Transit Subsidy Program, an employee must
          use mass transit for at least 50% of monthly trips to and/or from
          work.  To the extent possible, participants should be full time
          mass transit riders.  Use of approved leave or official travel
          shall not disqualify an employee during a particular month,
          provided the transit subsidy does not exceed the actual monthly
          commuting expenses of the employee.
 
     m.   Appropriate administrative action will be taken in cases of abuse
          dependent on circumstances and frequency of occurrence.  Any action
          must be in compliance with the Agreement between the Department and
          recognized labor organizations or established HUD policy and
          procedure as related to non-bargaining unit employees.
 
5.   RESPONSIBILITIES.
 
     a.   The Office of the Assistant Secretary for Administration shall:
 
          (1)  develop Departmental policy and provide oversight of the
               Departmental Transit Subsidy Program;
 
                                Page 3
          (2)  develop, manage and operate a Transit Subsidy Program for
               Headquarters and Washington, DC Area Office employees;
 
          (3)  prepare and submit all Departmental reports in compliance with
               Federal guidelines;
 
          (4)  determine overall level of funding available for the Transit
               Subsidy Program;
 
          (5)  provide funding to support the Transit Subsidy Program; and,
 
          (6)  designate a Headquarters Approving Official.
 
     b.   Administrative Service Center Directors shall:
 
          (1)  implement the policies and procedures set forth in this Notice
               in State and Area Office locations, as appropriate;
 
          (2)  determine funds required; reimbursement will be provided to
               the servicing Budget Office from HUD Headquarters on a
               quarterly basis; charges shall be made against subobject class
               1285, Transit Subsidies;
 
          (3)  develop, manage and operate State and Area Office Transit
               Subsidy Programs, and prepare consolidated reports for the
               Office of Administration, as required; and,
 
          (4)  designate a State and Area Office Approving Official.
 
     c.   Applicants shall complete an annual "Transit Subsidy Program
          Application." A sample application is attached. Use of this
          application form is not mandatory. Application forms may be
          developed at the local level. The application must contain a
          warning statement alerting the applicant to possible criminal
          prosecution, civil penalty action, and/or disciplinary action for
          making false statements (see Attachment 1).
 
     d.   Participants shall certify in writing, upon receipt of fare media
          that they are eligible for a transit subsidy, are obtaining it for
          their commute to and/or from work, and will not transfer the fare
          media to any other individual (see Attachment 2).  An employee who
          fails to utilize public transportation after being paid a transit
          subsidy shall be indebted to the Federal Government and will be
          required to repay any part of the transit subsidy that was not
 
                                Page 4
          utilized in conformance with the employee certification.  Amounts
          owed by an employee will be recovered in accordance with 5 U.S.C.
          5514.
 
     e.   Approving Official shall review applications and verify individual
          transit subsidy amounts based on the applicant's address.
 
6.   GENERAL REQUIREMENTS.  Prior to establishing a Headquarters, State or
     Area Office Transit Subsidy Program, the Office of Administrative and
     Management Services in Headquarters, and the Administrative Service
     Center Directors shall do the following:
 
     a.   Communicate with other Federal agencies within the local area to
          exchange information and explore the possibility of creating
          consolidated programs.
 
     b.   Establish standard operating procedures to include safeguards that
          prevent waste, fraud, abuse, mismanagement, or misappropriation of
          Government funds. These procedures shall include:
 
          (1)  recording and accounting for monthly expenditures to permit
               the proper maintenance of accounts and the preparation of
               reliable financial reports;
 
          (2)  ensuring that the monthly transit subsidy to a participant
               does not exceed the monthly amount excluded from fringe
               benefit taxation under IRS regulations;
 
          (3)  ensuring that review and assessment of management controls are
               conducted annually;
 
          (4)  ensuring that participants leaving Federal service do not
               continue receiving transit subsidies;
 
          (5)  obtaining annual certifications of continuing eligibility of
               applicants for a transit subsidy;
 
          (6)  ensuring appropriate advance notice is provided to local labor
               union representatives, if applicable, and that all collective
               bargaining obligations under law and any applicable collective
               bargaining agreements are met.
 
     c.   Verify that only HUD personnel using mass transit are eligible to
          participate in the Transit Subsidy Program. Basic verification
          criteria are:
 
          (1)  the individual is a HUD employee;
 
                                Page 5
          (2)  the individual certifies in writing, at least annually, that
               he/she actually commutes or expresses an intent to commute to
               and/or from their worksite via public mass transportation;
               and,
 
          (3)  the individual is not named on any motorized vehicle parking
               permit with HUD or any other Federal agency, except as a
               member of an eligible vanpool.
 
7.   MONITORING AND CONTROLS.
 
     a.   Participation must be monitored at the site where fare media are
          provided to ensure that only one transit subsidy per month is
          provided to eligible personnel. Applications for participation in
          the Transit Subsidy Program must be cross-checked initially and at
          least quarterly thereafter to ensure applicants/participants are
          not members of carpools, or holders of any other form of vehicle
          worksite parking permit (vanpools excepted) with HUD or any other
          Federal agency.  This parking permit restriction does not apply to
          eligible vanpools.
 
     b.   Employees must certify at least annually that they are eligible to
          receive a transit subsidy, and are receiving the appropriate amount
          (this may be done monthly on the sample form attached - see
          Attachment 2).
 
     c.   Local labor organizations must be notified and any collective
          bargaining responsibilities fulfilled prior to the implementation
          of the policies and procedures set forth in this Issuance.
 
     d.   All requirements of the Privacy Act of 1974, as amended, and the
          System of Records requirements of 49 CFR Part 10 must be met.
 
8.   REPORTING REQUIREMENTS.  All HUD Offices operating a Transit Subsidy
     Program must submit an annual report to the Office of Administration.
     Reports are due by November 15th. Minimum reporting requirements include
     the following:
 
     a.   a brief description of your program;
 
     b.   number of fare media issued;
 
     c.   number of participating employees, and previous mode of commute;
 
     d.   total annual funds expended;
 
                                Page 6
     e.   a statement indicating that annual recertification by each employee
          has been completed.
 
9.   REFERENCES.
 
     a.   Public Law 103-172, dated December 2, 1993, Federal Employees Clean
          Air Incentives Act, which provides for the establishment of
          programs to encourage Federal employees to commute by means other
          than single-occupancy motor vehicles.
 
     b.   GSA Bulletin, FPMR D-227, published in the Federal Register,
          7/23/91 (56 FR 33760), pertains to participation by Federal
          agencies in State or local government programs designed to
          encourage the use of public mass transportation.
 
     c.   26 CFR Section 1.132-6 and 56 Federal Register 23038 (05/20/91)
          authorize exclusion from gross income of employer-provided fare
          media not to exceed $60 in any month.
 
     d.   The Privacy Act of 1974, as amended, restricts access to
          information identifiable to an individual.
 
     e.   49 CFR Part 10, Maintenance of and Access to Records Pertaining to
          Individuals, contains requirements for storage and security of
          personal data.
 
     f.   Section 132(f) (5) of the Internal Revenue Code of 1986
          contains definitions of transit pass and commuter
          highway vehicles.
 
                                Page 7
                                                            ATTACHMENT
 
THIS ATTACHMENT IS A COPY OF FORM HUD-80, TRANSIT SUBSIDY PROGRAM
APPLICATION.
                                                            ATTACHMENT
 
THIS ATTACHMENT IS A COPY OF FORM HUD-81, TRANSIT SUBSIDY PROGRAM
CERTIFICATION.