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FINAL RULE ON CHARTER SERVICE EXCEPTIONS
Effective April 30, 2008

The Charter Service Final Rule creates new rules regarding unauthorized competition from recipients of Federal financial assistance.

GENERAL EXCEPTIONS
All public transit agencies that receive Federal financial aid may perform the following (these five types of service are deemed not charter). There is no reporting requirement for these exceptions.

  • The transportation of public transit agency employees, other transit system employees, transit management officials, transit contractors and bidders, government officials and their contractors and official guests, to or from transit facilities or projects within their geographic service area or proposed geographic service area for the purpose of conducting oversight functions such as inspection, evaluation or review.
  • The transportation of public transit agency employees, other transit system employees, transit management officials, transit contractors and bidders, government officials and their contractors and official guests, for emergency preparedness planning and operations.
  • A public transit agency that uses Federal financial assistance from FTA for program purposes only under 49 USC 5310 (elderly and disabled), 49 USC 5311 (rural), 49 USC 5316 (job access and reverse commute) or 49 USC 5317 (new freedom).
  • Public transit agencies directly responding to an emergency declared by the President, governor, mayor or in an emergency requiring immediate action prior to a formal decision. If the emergency lasts more than 45 days, the transit agency shall report under its activity to the emergency response docket.
  • Public transit agencies in non-urbanized areas transporting their employees, other transit system employees, transit management officials, and transit contractors and bidders to or from transit training outside their geographic service area.

LIMITED EXCEPTIONS
Public transit agencies may perform charter service under the following limited exceptions:

  • Government officials on government business provided that the service stays within the transit agency's geographic service area; no revenue is generated unless it is required by law; and the agency keeps a log of the service. A public agency is limited annually to 80 charter hours for service of this nature. Under certain limited exceptions and in situations of extenuating circumstances, the agency may petition the Federal Transit Administration (FTA) for additional charter hours.
  • A qualified human service organization for the purposes of serving persons with mobility limitations related to advanced age; disabilities; or low income.
  • Under both exceptions, a transit agency must keep electronic records of service and the requests and FTA's responses must be posted by FTA to the public docket. In addition, beginning July 30, 2008, the agency shall post their required records of service on the charter registration website 30 days after the end of each calendar quarter.

EXCEPTIONS BY PETITION
Public transit agencies may also petition the FTA Administrator under one of the following exceptions:

  • Events of regional or national significance;
  • Hardships (non-urbanized areas under a population of 50,000 or small urbanized-areas with a population under 200,000); or
  • Unique and time-sensitive events (i.e. funerals of significance) in the public's interest.

A public transit agency that receives Administrator approval to provide service under one of these exceptions, shall keep a record of it and beginning July 30, 2008, shall post their required records on the charter registration website 30 days after the end of each calendar quarter.

EFFECT ON PRIVATE CHARTER OPERATORS WHO RECEIVE FEDERAL FINANCIAL ASSISTANCE
Effective April 30, 2008


A private charter operator that receives, directly or indirectly, Federal financial assistance under Section 3038 of TEA-21 (ADA grants) is exempt from the charter rules.

The non-FTA funded activities of a private charter operator that receives, directly or indirectly, Federal financial assistance under Sections 5307 (transit formula), 5309 (transit capital), 5310 (elderly and disabled), 5311 (rural transit), 5316 (job access reverse commute) and 5317 (new freedom) are exempt from the charter rules.

Therefore, the rule will require at a minimum, private operators who purchase vehicles with FTA funds to segregate their charter operations of the non-FTA funded vehicles from the Federally-funded vehicles. If a private charter operator receives FTA funds for maintenance, facilities upgrades or other operating categories that will not readily allow segregation of fleet activities, the entire fleet may be tainted by receipt of Federal funds and the operator may not provide charter service with any vehicle that benefits from the Federal funding.

In addition, a private operator that provides public transportation service under contract with a public transit agency is covered by the new rules when it is operating FTA-funded equipment or services (when the contract is funded with FTA funds or the buses are funded with FTA funds or the equipment is maintained in an FTA-funded facility) because it is deemed to be standing in the shoes of the public transit agency and therefore cannot use Federally funded equipment to provide charter services. A private charter operator that contracts with a public transit agency and uses its own vehicles is not subject to the charter service rule.

The Q and A in Appendix C includes the following:

Q: May a private charter operator that qualifies as a sub-grantee of a state, under an FTA-administered program, use vehicles purchased with Federal assistance to provide charter services?
A: It depends. A private charter operator that receives FTA assistance can use FTA-funded equipment to provide service for program purposes but not for other charter service...An intercity bus operator that receives assistance under Section 5311(f) to provide rural intercity bus service may provide charter service using an FTA-funded vehicle only if one of the exceptions applies.

IMPORTANT DEFINITIONS FROM THE FINAL RULE ON CHARTER SERVICE
Effective April 30, 2008

Charter Service:

  1. Transportation provided by a recipient at the request of a third party for the exclusive use of a bus or van for a negotiated price, but does not include demand response service to individuals. The following may be features of a charter service:

    i. A third party pays the transit provided a negotiated price for the group;
    ii. Any fares charged to individual members of the group are collected by a third party;
    iii. The service is not part of the transit provider's regularly scheduled service, or is offered for a limited period of time; or
    iv. A third party determines the origin and destination of the trip as well as scheduling; or

  2. Transportation provided by a recipient to the public for events or functions that occur on an irregular basis or for a limited duration and:

    i. A premium fare is charged that is greater than the usual or customary fixed route fare; or
    ii.     The service is paid for in whole or in part by a third party.

Charter Service Hours:
Total hours operated by buses or vans while in charter service including: hours operated while carrying passengers for hire, plus associated deadhead hours.

Exclusive:
Service that a reasonable person would conclude is intended to exclude members of the public.

Pattern of Violations:
More than one finding of unauthorized charter service by FTA beginning with the most recent finding of unauthorized charter service and looking back no more than 72 months (six years).

REGISTRATION PROCESS FOR CHARTER OPERATORS
UNDER THE CHARTER SERVICE FINAL RULE
Effective April 30, 2008


To become a registered charter provider, private charter operators must register at: http://www.fta.dot.gov/CharterRegistration please note this website may not be active until April)

You must provide:

  • Your company name, address, phone number, email address, fax number;
  • Your Federal and, if available, state motor carrier identifying number;
  • The geographic service in which you intend to provide charter service;
  • The number of buses or vans you own;
  • A certification of valid insurance; and
  • A verification of whether or not you are willing to provide free or reduced rate charter service to registered qualified human service organizations.

Please note that FTA may refuse to post a registration if the information is incomplete.

In addition, a public transit agency, private charter operator, or their authorized representative may challenge a registered charter provider's registration and request removal of the private charter operator from FTA's registration website by filing a complaint. The private charter operator must be sent a copy of the complaint. The charter provider would have 15 days to respond to the complaint. FTA then determines whether or not to remove the operator from the registration. FTA must inform all parties of its decision within 30 days.

Registered charter providers shall update their information no less than every two years.

PROCESS FOR RECEIVING REQUESTS FOR CHARTER SERVICE FROM PUBLIC TRANSIT AGENCIES
UNDER THE CHARTER SERVICE FINAL RULE
Effective April 30, 2008

Upon receiving a request for charter service a public transit agency may:

  • Decline to provide the service with or without referring them to the registration website;
  • Provide the service under one of the exceptions; or
  • Provide notice to a registered charter provider.

If the agency is interested in providing the charter service, then:

  • The agency must send email notification to the registered charter operators in its geographic service area by close of business on the day the request was received, unless the request was received after 2:00pm and then the request must be sent by close of business the next day.
  • The email must include the details of the request and the fare the public transit agency intends to charge for the service.
  • If the email is returned undelivered, the transit agency must fax the information.
  • Records of the request must be kept for 3 years.

If no registered charter provider responds to the notice:

  • A public transit agency may provide charter service on its own initiative or at the request of a third party if no registered charter provider responds to a notice within 72 hours for charter service requested to be provided in less than 30 days; or within 14 calendar days for charter service requested to be provided in 30 days or more.
  • A public transit agency may not provide charter service if a registered charter provider indicates an interest in providing the service and the charter provider has informed the public transit agency of its interest in providing the service.
  • After providing the service, the public transit agency must keep a record of the service. There is no requirement to post this type of service on the charter registration website.

Exceptions:

  • A public transit agency may provide charter service to a customer consistent with an agreement entered into with all registered charter providers in the public transit agency's geographic service area.
  • If a new charter service provider registers in the geographic service area subsequent to the initial agreement, the public transit agency may continue to provide charter service under the previous agreement with other charter providers up to 90 days without an agreement with the newly registered charter provider.
  • Any of the parties to an agreement may cancel the agreement at any time after providing the public transit agency 90-days notice.

CHARTER SERVICE VIOLATION COMPLAINT PROCESS
UNDER THE CHARTER SERVICE FINAL RULE
Effective April 30, 2008

If you wish to file a complaint against a transit agency, you have the following options:

  • Request an Advisory Opinion from the Federal Transit Administration (FTA) Chief Counsel. You must provide a copy to the transit agency. You may also include within your request an additional request for a Cease and Desist Order. Advisory Opinions are non-binding.
  • File a Complaint with the FTA Chief Counsel. If there is reasonable basis for an investigation, FTA will do so. After conducting an investigation, the FTA Chief Counsel may issue a decision; appoint a Presiding Official to review the matter; or dismiss the complaint. If a Presiding Officer is appointed, a separate investigation would be conducted, including formal hearings, and then the Presiding Officer would make recommendation the FTA Chief Counsel. The decision of the Presiding Officer may be appealed to the Administrator. The Chief Counsel has the following remedies: bar the recipient from receiving future financial assistance from FTA; order the withholding of a reasonable percentage of available Federal financial assistance; or pursue suspension and debarment of the recipient, its employees, or its contractors. In the event the FTA Chief Counsel finds a pattern of violations, the penalty shall bar a recipient from receiving Federal transit assistant in an amount he considers appropriate. Federal financial assistance may be withheld in a lump sum or over a period of time not to exceed 5 years.
  • Appeal the Decision. Decisions by FTA Chief Counsel may be appealed to the FTA Administrator, who would then review the entire record and issue a final agency decision that either accepts, rejects or modifies the Chief Counsel's decision. The Administrator may review a decision even if an appeal was not filed. If no appeal is filed and the Administrator does not review the decision, the Chief Counsel's decision takes effect on the 21st day after the decision was issued.
  • Seek Judicial Review. A person may seek Judicial Review of a final decision and order of the Administrator in the appropriate US District Court.


 

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