[Federal Register Volume 73, Number 9 (Monday, January 14, 2008)]
[Rules and Regulations]
[Pages 2326-2361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-86]
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Part III
Department of Transportation
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Federal Transit Administration
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49 CFR Part 604
Charter Service; Final Rule
Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules
and Regulations
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
49 CFR Part 604
[Docket No. FTA-2005-22657]
RIN 2132-AA85
Charter Service
AGENCY: Federal Transit Administration, DOT.
ACTION: Final rule.
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SUMMARY: This final rule amends regulations which govern the provision
of charter service by recipients of Federal funds from the Federal
Transit Administration (FTA). Pursuant to the direction contained in
the Joint Explanatory Statement of the Committee of Conference, for
section 3023(d), ``Condition on Charter Bus Transportation Service'' of
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) of 2005, FTA established a committee to
develop, through negotiated rulemaking procedures, recommendations for
improving the regulation regarding unauthorized competition from
recipients of Federal financial assistance. This final rule clarifies
the existing requirements, sets out a new definition of ``charter
service,'' allows for electronic registration of private charter
providers, which replaces the old ``willing and able'' process,
includes a new provision allowing private charter operators to request
a cease and desist order, and establishes more detailed complaint,
hearing, and appeal procedures.
DATES: Effective Date: April 30, 2008.
ADDRESSES: A copy of this rule and comments and material received from
the public, as well as any documents indicated in the preamble as being
available in the docket, are part of docket FTA-2005-22657 and are
available for inspection or copying at the Docket Management Facility,
U.S. Department of Transportation, 1200 New Jersey Ave., SE., West
Building Ground Floor, Room W12-140, Washington, DC between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays.
You may retrieve the rule and comments online through the Federal
Document Management System (FDMS) at: http://www.regulations.gov. Enter
docket number 22657 in the search field. The FDMS is available 24 hours
each day, 365 days each year. Electronic submission and retrieval help
and guidelines are available under the help section of the Web site.
An electronic copy of this document may also be downloaded from the
Government Printing Office's Electronic Bulletin Board Service at (202)
512-1661. Internet users may also reach the Office of the Federal
Register's home page at: http://www.nara.gov/fedreg and the Government
Printing Office's Web page at: http://www.gpoaccess.gov/fr/index.html.
FOR FURTHER INFORMATION CONTACT: Crystal Frederick, Ombudsman for
Charter Services, Federal Transit Administration, 1200 New Jersey Ave.,
SE., Room E54-410, Washington, DC 20590, (202) 366-4063 or
[email protected].
SUPPLEMENTARY INFORMATION:
A. Background
1. Statutory History
The Federal Transit Administration was established by the Urban
Mass Transportation Act of 1964 (UMT Act, the Act). \1\ The Act
provided funds for ``mass transportation'' purposes, defined as:
``transportation by bus or rail or other conveyance, either publicly or
privately owned, serving the general public (but not including school
buses or charter or sightseeing service) and moving over prescribed
routes.'' \2\ This provision illustrates the balance Congress sought to
strike between the public and private sectors of the economy. Congress
acted to provide Federal funding for the continued existence of urban
fixed route providers by enacting a capital program to acquire private
transit companies and establish new public transportation agencies. The
charter services provided by private companies were still profitable;
accordingly, Congress excluded charter service from the definition of
``mass transportation.''
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\1\ Pub. L. No. 88-365.
\2\ UMT Act, Section 2(b).
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The Federal Aid Highway Act of 1973 placed an additional
restriction on the use of federally funded buses for charter service.
The 1973 Act prohibited Federal assistance unless the applicant had
entered into an agreement with the Secretary of Transportation that it
would not engage in charter bus operations in competition with private
bus operators outside of the area in which the applicant provided
regularly scheduled mass transportation services.
In 1974, however, Congress eased the 1973 restriction by allowing
an applicant to provide charter services outside the urban area where
it provided regularly scheduled mass transportation if it entered into
an agreement with the Secretary of Transportation that provided ``fair
and equitable arrangements'' to ensure that federally assisted
operators did not compete with private operators of intercity charter
bus service where such private operators were willing and able to
provide the service.\3\ In other words, Federal financial assistance
should not enable applicants to foreclose private operators from the
intercity charter bus industry where there are private charter
operators willing and able to provide the service.
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\3\ Pub. L. 93087, Section 164(a), August 13, 1973.
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2. Regulatory History
FTA proposed its first regulation regarding charter service on June
13, 1975.\4\ This proposal set out policies and procedures governing
the provision of charter bus services and the reporting of charter bus
revenues and expenses under the UMT Act. The proposed regulations
required public operators to take into account both the direct and
indirect costs of operating charter service, without regard to the
receipt of Federal financial assistance, when developing their charter
rates. The proposed regulations also compelled public operators to
generate revenues equal to or greater than the cost of providing the
charter bus service.\5\ FTA finalized this regulation on April 1,
1976.\6\
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\4\ ``Charter and School Bus Operations,'' 40 FR 25304, June 13,
1975.
\5\ Id. at 25305.
\6\ ``Charter and School Bus Operations,'' 41 FR 14123, April 1,
1976.
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Public transportation agencies complained that this final
regulation created an undue administrative burden on them. Private
charter companies complained that publicly funded operators, using
federally financed equipment, were forcing them out of business.
In response, FTA issued an Advance Notice of Proposed Rulemaking
(ANPRM) in 1976, which sought to clarify the duties of recipients who
engaged in charter bus operations outside their urban area and provide
more reliable protection to private operators in the intercity charter
bus industry while reducing paperwork burdens on recipients.\7\
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\7\ 41 FR 56680, December 29, 1976.
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Another ANPRM was published in 1982, which sought to take a fresh
look at the charter regulations.\8\ The ANPRM contained four proposals
for safeguarding the use of transit equipment and protecting the health
of the private intercity charter industry.
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After reviewing the comments received, FTA determined that none of the
four proposals adequately addressed the problem. So, in 1986, FTA
issued a NPRM with a brand new proposal. This proposal would prohibit a
recipient from performing any charter bus operations to the extent that
there was a private charter operator willing and able to provide such
charter service in the area in which the recipient desired to provide
charter bus operations. This proposal also included exceptions that
allowed a public transportation agency to provide charter service in
the event there were no willing and able private charter operators, if
private charter operators did not have capacity, if private charter
operators were unable to provide accessible equipment, or for non-
urbanized areas, or if the private charter operator providing the
service would create a hardship for the customer.\9\ This proposal was
finalized in 1987.\10\
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\8\ 41 FR 5394, January 19, 1981.
\9\ 51 FR 7891, March 6, 1986.
\10\ 52 FR 11916, April 13, 1987.
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The 1976 regulation and the 1987 regulation are fundamentally
different in their approaches and provisions. The 1976 regulation
distinguished between charter service that a recipient provided in its
service area (intracity service) and charter service a recipient
provided outside its service area (intercity service). The 1976
regulation made this distinction because of the new provisions of the
UMT Act, which restricted only a recipient's intercity charter service.
The rule required recipients to certify all costs that were
attributable to the recipient's charter bus operations and maintain
records that justified their costs.
In contrast, the 1987 rule did not provide different requirements
for intercity and intracity service. The 1987 rule eliminated this
distinction because the UMT Act definition of ``mass transportation''
excluded all charter operations, thereby requiring protection for all
private charter operators from recipients, not just those providing
intercity operations or those that earned in excess of a certain
amount. Instead, the 1987 rule focused on prohibiting all charter
service by a recipient if there was a willing and able private charter
operator who could perform the service.
In 1988, Congress directed FTA to amend the charter service
regulation to permit non-profit social service agencies with a clear
need for affordable and/or accessible equipment to seek bids for
charter service from publicly funded operators. On December 30, 1988,
FTA amended the charter service regulations to provide for three new
exceptions.\11\ The first exception allowed recipients to provide
direct charter service to non-profit social service agencies. The
second exception, limited to recipients in non-urbanized areas, allowed
recipients to provide direct charter service to non-profit social
service organizations if more than fifty percent of the passengers were
elderly. The third exception allowed recipients to provide direct
charter services where there was a formal agreement between the
recipient and all private operators it had determined to be willing and
able through its annual public charter notice. The addition of these
exceptions brought the total number of exceptions contained in the rule
to eight.\12\ The rule has remained essentially unchanged since this
amendment in 1988.
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\11\ H. Report 110-498, p. H 122787 as printed in the
Congressional Record, December 21, 1987.
\12\ ``Charter Service; Amendment,'' 53 FR 53348, December 30,
1988.
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3. Demonstration Project and GAO Report
Since lingering concerns remained about the charter service
regulation and FTA's enforcement of the rule, the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA) directed FTA to issue
regulations implementing a charter service demonstration program in not
more than four states.\13\ A report evaluating the effectiveness of the
demonstration program was to be submitted in three years. The
conference report accompanying ISTEA explained that the demonstration
program was directed in response to concerns expressed by local transit
operators regarding the existing charter service regulation. Many
public operators were concerned that certain groups were not being
served under the existing regulation, that they were not able to
provide service to local government entities that provided support to
the local agency, and that they were not permitted to provide service
to support local economic development activities. The demonstration
program was to be designed to allow public operators in several
locations greater flexibility to meet local charter needs without
creating undue competition for privately owned charter operators.
Congress required FTA to collect data on the impact of the change.
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\13\ Section 3040, ``Intermodal Surface Transportation
Efficiency Act of 1991,'' Pub. L. No. 102-240, December 19, 1991.
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In September 1997, FTA submitted its report to Congress regarding
the demonstration program.\14\ The report concluded that there was no
need for FTA to substantially revise its charter service regulation.
The demonstration did not support public operators' claims of unmet
needs for the groups for which the demonstration was primarily
intended: government, civic, charitable and other community activities.
The charter service provided during the demonstration did not serve a
significant number of these groups or significantly increase the level
of service to these groups.
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\14\ ``Evaluation of the Charter Bus Demonstration,'' Federal
Transit Administration, Department of Transportation, September
1997.
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Congress also directed the Government Accounting Office (GAO) to
analyze FTA's charter service regulations. GAO conducted a nationwide
survey of public transportation operators, private charter operators,
and customers.\15\ GAO's report showed that local charter regulation
differed across localities. GAO found that most public operators stated
that the FTA regulation was too strict, but that they had not
extensively used the available exceptions to provide charter service.
Their reasons for not using the exceptions ranged from being unfamiliar
with the exceptions to the exceptions being too cumbersome for the
relatively small amount of charter service that they were interested in
providing.\16\ When asked what they would change about the regulation,
suggestions varied depending on whether the public transportation
agency was in an urban or rural area. Urban public transportation
providers would change the rule to allow them to provide charter
service to local government officials and non-profit community
organizations. Rural operators would change the rule to allow direct
charter services to nonprofit and community organizations, but also
requested clarification of the rule.\17\
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\15\ ``Charter Bus Service: Local Factors Determine the
Effectiveness of Federal Regulation, GAO Report to Congressional
Committees,'' GAO/RCED-93-162, September 7, 1993.
\16\ Id. at 3.
\17\ Id. at 4.
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GAO found that most private charter operators were satisfied with
FTA's charter service regulations. Some private charter operators did,
however, express concern about the complaint process. Specifically,
some private charter operators stated that the burden of proof fell on
them when a public operator violated the regulation, the burden of
proof fell on them and that the complaint process was lengthy and
expensive. Further, some were skeptical
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that recipients were accurately calculating their fully allocated costs
(i.e., all labor, capital, and material costs) of providing charter
service. As a result some private charter operators believed that
public transportation agencies were charging lower rates than they
should.\18\
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\18\ Id. at 37.
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The GAO also interviewed customers of charter service to find out
their concerns with FTA's charter service regulation. GAO found two
user groups that were dissatisfied with the regulation: those who
needed accessible transportation and those who needed a large number of
vehicles to serve local conventions and economic development
activities.\19\
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\19\ Id. at 38.
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The GAO report concluded that its data did not provide compelling
evidence that there were serious widespread needs for charter service
that could not be met under the current regulation. The data showed
that the current exceptions to the regulation, such as contracting with
private providers, were not widely used. GAO believed that many public
operators, particularly those in rural areas, were unfamiliar with the
process for obtaining exceptions.\20\
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\20\ Id. at 11.
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B. SAFETEA-LU
Congress next addressed concerns regarding FTA's charter service
regulation in the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU), which was enacted on
August 10, 2005. The statute amended the statutory provision regarding
charter service found at 49 U.S.C. 5323(d). Specifically, with respect
to remedies, the SAFETEA-LU amendment provides that, ``in addition to
any remedy specified in the agreement, the Secretary shall bar a
recipient or an operator from receiving Federal transit assistance in
an amount the Secretary considers appropriate if the Secretary finds a
pattern of violations of the agreement.'' Previously, the statute used
permissive language, ``may,'' rather than mandatory language,
``shall,'' with respect to withholding funds. Further, the previous
statutory language did not state that the Secretary could determine an
appropriate amount to withhold when the Secretary found a pattern of
violations. Rather, if a pattern of violations was found, the Secretary
only had the option to bar the recipient from receiving all of its
Federal funds.
Additionally, the Joint Explanatory Statement of the Committee of
Conference, for section 3023(d), ``Conditions on Charter Bus
Transportation Service'' of SAFETEA-LU, stated ``the conferees are
aware that both public transportation providers and private charter bus
providers have expressed strong concerns about the 1987 FTA rule
enforcing section 5323(d) regarding charter bus service. The conferees
direct the FTA to initiate a negotiated rulemaking seeking public
comment on the regulations implementing section 5323(d).'' The report
also directed FTA to consider the following issues during the
negotiated rulemaking:
1. Are there potential limited conditions under which public
transit agencies can provide community-based charter services directly
to local governments and private non-profit agencies that would not
otherwise be served in a cost-effective manner by private operators?
2. How can the administration and enforcement of charter bus
provisions be better communicated to the public, including the use of
Internet technology?
3. How can enforcement of violations of the charter bus regulations
be improved?
4. How can the charter complaint and administrative appeals process
be improved?
C. Federal Advisory Committee
In response to the direction contained in the Conference Committee
Report, FTA established a federal advisory committee to develop,
through negotiated rulemaking procedures, recommendations for improving
the regulation regarding charter bus services. FTA established a
Federal Advisory Committee on May 5, 2006. The Charter Bus Negotiated
Rulemaking Advisory Committee (CBNRAC) consisted of persons who
represented the interests affected by the proposed rule (i.e., charter
bus companies, public transportation agencies--recipients of FTA grant
funds) and other interested entities.
The CBNRAC included the following organizations:
American Association of State Highway and Transportation Officials;
American Bus Association;
American Public Transportation Association;
Amalgamated Transit Union;
Capital Area Transportation Authority, Lansing, Michigan;
Coach America;
Coach USA;
Community Transportation Association of America;
FTA;
Kansas City Area Transportation Authority;
Lancaster Trailways of the Carolinas;
Los Angeles County Municipal Operators Association;
Monterey Salinas Transit;
National School Transportation Association;
New York Metropolitan Transportation Authority;
Northwest Motorcoach Association/Starline Luxury Coaches;
Oklahoma State University/The Bus Community Transit System;
River Cities Transit, Pierre, South Dakota;
Southwest Transit Association;
Taxicab, Limousine & Paratransit Association;
Trailways; and
United Motorcoach Association.
The CBNRAC met in Washington, DC, on the following dates in 2006:
May 8-9
June 19-20
July 17-18
September 12-13
October 25-26
December 6-7
FTA hired Susan Podziba & Associates to facilitate the CBNRAC
meetings and prepare meeting summaries. All meeting summaries,
including materials distributed during the meetings, are contained in
the docket for this rulemaking (22657). During the first
meeting of the CBNRAC, the committee developed ground rules for the
negotiations, which are summarized briefly below:
[cir] The CBNRAC operates by consensus, meaning that agreements are
considered reached when there is no dissent by any member. Thus, no
member can be outvoted.
[cir] Work groups can be designated by the CBNRAC to address
specific issues or to develop proposals. Work groups are not authorized
to make decisions for the full CBNRAC.
[cir] All consensus agreements reached during the negotiations are
assumed to be tentative agreements contingent upon additional minor
revisions to the language until members of the CBNRAC reach final
agreement on regulatory language. Once final consensus is achieved, the
CBNRAC members may not thereafter withdraw from the consensus.
[cir] Once the CBNRAC reaches consensus on specific provisions of a
proposed rule, FTA, consistent with its legal obligations, will
incorporate this consensus into its proposed rule and publish it in the
Federal Register. This provides the required public notice under the
Administrative Procedure Act
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(APA), 5 U.S.C. 551 et seq., and allows for a public comment period.
Under the APA, the public retains the right to comment. FTA
anticipates, however, that the pre-proposal consensus agreed upon by
this committee will effectively address virtually all the major issues
prior to publication of a proposed rulemaking.
[cir] If consensus is reached on all issues, FTA will use the
consensus text as the basis of its NPRM, and the CBNRAC members will
refrain from providing formal negative comments on the NPRM.
[cir] If the CBNRAC reaches agreement by consensus on some, but not
all, issues, the CBNRAC may agree to consider those agreements as final
consensus. In such a case, FTA will include the consensus-based
language in its proposed regulation and decide all the outstanding
issues, taking into consideration the CBNRAC discussions regarding the
unresolved issues and reaching a compromise solution. The CBNRAC
members would refrain from providing formal negative comments on
sections of the rule based on consensus regulatory text, but would be
free to provide negative comments on the provisions decided by FTA.
[cir] In the event that CBNRAC fails to reach consensus on any of
the issues, FTA will rely on its judgment and expertise to decide all
issues of the charter regulation, and CBNRAC members may comment on all
components of the NPRM.
[cir] If FTA alters consensus-based language, it will identify such
changes in the preamble to the proposed rule, and the CBNRAC members
may provide formal written negative or positive comments on those
changes and on other parts of the proposed rule that might be connected
to that issue.
A complete description of the ground rules is contained in the
docket for this rulemaking.
Finally, the CBNRAC reached consensus on the issues the committee
would consider during its negotiations. The committee agreed to
consider the four issues included in the Conference Committee report,
noted in the previous section of this preamble, and these four
additional issues:
1. A new process for determining if there are private charter bus
companies willing and able to provide service that would utilize
electronic notification and response within 72 hours.
2. A new exception for transportation of government employees,
elected officials, and members of the transit industry to examine local
transit operations, facilities, and public works.
3. Review and clarify, as necessary, the definitions of regulatory
terms.
4. FTA policies relative to the enforcement of charter rules and
the boundary between charter and mass transit services in specific
circumstances, such as university transportation and transportation to/
from special events.
1. Facilitator's Final Report
The facilitator, Susan Podziba, submitted her report to FTA on
March 6, 2007. The final report summarizes the proceedings of the
CBNRAC including the agreement reached on regulatory language for the
NPRM and identifies outstanding issues. The facilitator noted in her
final report that:
As a result of the negotiated rulemaking process initiated by
FTA, the revised Charter Service regulations will account for the
interests, concerns, and nuances that were raised by all CBNRAC
members. Though the negotiations remained difficult, and, at times,
antagonistic throughout the seven months of meetings, CBNRAC members
remained committed and worked hard to identify consensus solutions
for each issue. As a result of the intensive discussions and
multiple proposals and counter-proposals offered to resolve the
twelve outstanding sub-issues, FTA has a clear understanding of the
interest and concerns of both the public transit and private charter
stakeholders as well as the range of options available for deciding
those issues. (Final Report, page 20.)
We would like to underscore the facilitator's conclusion and thank
all members of the CBNRAC for their efforts. We also agree with the
facilitator that, as a result of the negotiations, we have a clear
understanding of the interests involved with the revision of the
Charter Service regulations.
D. NPRM
On February 15, 2007, FTA published a NPRM in the Federal Register
(72 FR 7526). The NPRM was a complete revision of 49 CFR part 604.
According to the agreement established during the negotiations, FTA
included in the NPRM all of the provisions on which the CBNRAC reached
consensus. This amounted to a little more than 80 percent of the
rulemaking. For the other 20 percent, FTA used its discretion, informed
by the discussions during the negotiations, to develop its proposals.
1. Overview of Comments Received on the NPRM
We received over 300 comments in response to our NPRM. We heard
from 160 public transit agencies, 65 private charter operators, 25
public associations, 16 members of the public, 13 state departments of
transportation, 11 private charter associations, 11 cities, 10
universities, four public officials, three air transport groups, and
three anonymous comments.
We received several comments from participants on the CBNRAC. Some
comments were in full support of the proposals contained in the NPRM
and other comments rejected the proposals. Even though some of the
comments submitted by members of the CBNRAC did not conform to the
agreement reached on December 6, 2006, FTA retained much of the
consensus language. In addition, we received many helpful comments on
ways to improve the regulatory language and we made changes based on
those comments.
2. General Comments
There were a number of comments on cross-cutting issues that we
address before the section-by-section analysis. Specifically, we
received comments about the lack of appendices in the NPRM, fully
allocated costs, and when a customer specifies the type of equipment.
In addition, we received several comments questioning our intentions
regarding some of the proposals included in the NPRM.
a. Lack of Appendices
When we published the NPRM, we made reference to appendices we
intended to include in the final rule. Appendix A would be a list of
the 64 Federal programs discussed and provided during the CBNRAC
negotiations. This list is not unique; rather, other Federal agencies
reference this list and the list is available on FTA's public Web site,
http://www.fta.dot.gov. In addition, the list of Federal programs was
provided to all of the members of the CBNRAC during negotiations and is
in the docket for these proceedings. Appendix B would provide guidance
on what FTA would consider when removing a registered charter provider
or qualified human service organization from the FTA Charter
Registration Web site. Appendix C would be a list of questions and
answers to provide guidance to recipients regarding the new provisions
of the rule.
Regarding the lack of appendices in the NPRM, a large public
transportation association and several public transit agencies stated
``we are troubled by the absence of a draft Appendix A (listing the
federal programs that would qualify a social service agency to receive
services under an exception). Although we anticipate that all of the
more than five dozen federal programs under the United We Ride umbrella
will be included, we believe FTA should state
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as much or provide a draft Appendix A for comment.''
Appendices are not regulatory text and do not carry the force and
effect of law. In fact, the Office of Federal Register specifically
prohibits an appendix from containing regulatory requirements:
Rules and proposed rules. Use an appendix to improve the quality
or use of a rule but not to impose requirements or restrictions.
Use an appendix to present: (a) Supplemental, background, or
explanatory information which illustrates or amplifies a rule that
is complete in itself; or (b) Forms or charts which illustrate the
regulatory text.
You may not use the appendix as a substitute for regulatory
text. Present regulatory material as an amendment to the CFR, not
disguised as an appendix.
Material in an appendix may not: (a) Amend or affect existing
portions of CFR text; or (b) Introduce new requirements or
restrictions into your regulations.\21\
\21\ National Archives and Records Administration, Office of the
Federal Register, Federal Register Document Drafting Handbook, page
7.9 (October 1998).
Further, as noted above, an appendix is explanatory, and,
therefore, according to the Administrative Procedure Act, notice and
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comment is not required:
Except when notice or hearing is required by statute, this
subsection does not apply--
(A) To interpretative rules, general statements of policy, or
rules of agency organization, procedure, or practice; or
(B) When the agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefor in the rules
issued) that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.\22\
\22\ 5 U.S.C. section 553(b).
Based on the above, and the fact that proposed information for the
appendices was widely available to the public before publication of the
NPRM, we made the decision not to include appendices at the NPRM stage.
b. Fully Allocated Costs
Our proposed rulemaking did not include a requirement for
recipients to calculate their fully allocated costs. We decided not to
include the provision primarily because a fully allocated cost
requirement has the potential to interfere with our efforts to support
public transit agencies as mobility managers within their communities.
In addition, we are very concerned that a fully allocated cost
requirement would hinder our attempts to negotiate with other federal
agencies to develop cost allocation principles to share fairly the cost
of human service transportation.
Private charter operators submitted comment urging us to reconsider
our proposal. One comment, which represents a consolidated opinion of
several of the private charter operators on the CBNRAC, stated that
``the admonition to develop `fair charges' and to recover some
percentage of marginal operating costs consistent with the public
purpose of the service is useless as either a regulatory tool or
guidance to transit agencies. It also provides no protection to private
operators. The need for transit agencies to recover fully allocated
costs is present even for service provided under one of the many
exceptions in this proposed rule.'' They contend that, like other
social programs, if the Federal Government wishes to subsidize charter
service for certain social service organizations, it can make direct
subsidy payments to those organizations instead of creating subsidized
public bus service that undercuts the price structure in the private
market.
In addition, one international private charter association
suggested that FTA impose a new fully allocated cost requirement: ``A
system-wide cost per revenue hour dollar figure (approved operating
budget divided by revenue hours of bus service) is the fairest and
simplest way of estimating what it would cost per hour to provide bus
service to a third party. This method does not necessarily capture the
capital cost consumed, overtime driver hours or preparation time or the
infrastructure shared to make this service available to a third party,
but on balance a system-wide cost per revenue vehicle hour times total
hours of the requested service is the closest to what the actual cost
would be to provide the service.''
We understand this point of view, but disagree that requiring fully
allocated costs is necessary. The rule as written prohibits a public
transit agency from providing charter service if a private charter
operator expresses interest in providing the service. In addition, the
exceptions contained in the rule are areas of charter service that the
private charter coalition conceded are areas where public transit
agencies can provide community-based charter services that would not
otherwise be served in a cost-effective manner by private operators.
Not including fully allocated cost provisions in the final rule is
appropriate given our efforts to establish coordinated public transit
human service transportation and the protections provided for private
charter operators in the final rule such as notification procedures and
cease and desist orders.
c. When a Customer Specifies Equipment
In the NPRM, we did not address specifically what would occur if a
customer specifies certain equipment in their request for charter
service. The only reference we made to specific equipment was in the
preamble where we discussed the fact that rubber tire trolley buses are
considered buses for purposes of this rulemaking.
We received several comments on this topic unrelated to our
discussion of including rubber tire trolley buses within the scope of
buses generally. Public transit agencies encouraged us to allow a
customer to specify the type of equipment they would like use. A member
of the public encouraged us to exclude electrically powered trolleys
from the scope of the rule. Another member of the public suggested that
the notice recipients send to private providers ``should also include a
description of the specific equipment requested by the customer and not
just `buses or vans.' This comment goes on to state ``any new rule
allows the purchaser of the service to decide what kind of equipment it
needs. To that end, the notice to private providers should allow for a
reasonable amount of specificity regarding the requirements for a
particular service.''
Another comment echoed the above sentiment by stating ``I should
not be forced to obtain services from private charter operators who do
not have the proper coach equipment, to spend more money for single
door highway coaches, with high floors that take longer to load and
unload, that are not geared for city street/shuttle operations, thereby
forcing me to obtain more equipment for frequency of service * * *.''
The comments regarding types of equipment raise a tricky issue in
balancing protections for private charter operators with the need for
transit agencies to satisfy community demands. In order to provide
attractive ``fun'' alternatives to encourage downtown employees or
tourists to use transit in congested corridors, transit agencies may
acquire rubber tire replica trolleys. These trolleys can become a
popular enough local attraction that they may be sought for private
leisure charters such as weddings. The statute, however, addresses
charter without regard to equipment type. The FTA regulation relates to
the provision of transportation service, not entertainment, which is
why sightseeing is also excluded from the statutory definition of
``public transportation.'' If there is sufficient demand for such
equipment, private charter operators may eventually
[[Page 2331]]
acquire new equipment to serve this emerging market. In the meantime,
however, FTA sees no reason to amend the rule to allow an exception
under which a customer may specify the type of vehicle beyond
requesting a bus or a van.
Likewise, if there were sufficient public demand for low-floor,
double door vehicles, or size compatibility with streets to be
traveled, and private charter operators do not have that equipment,
then private charter operators may eventually acquire new equipment to
serve that market as well. But, again we decline to amend the rule to
allow for such an exception for public transit agencies.
d. Other Concerns
We received several comments questioning the intentions of the FTA
in proposing the NPRM provisions that we did. One comment from a
transit agency stated ``The tone of this proposed rule suggests a
presumption of `guilt' on the part of all transit providers.'' Another
transit agency put it this way: ``Transit providers should not have to
prove, on a daily basis, that they are following the rules.'' One
public citizen asked: ``When was legislation passed that authorized FTA
to stop supporting transit.'' Or, as a Midwestern transit agency stated
``I am opposed to federal requirements that squash our attempt to
generate some extra revenue to support the transit system.''
FTA went to great lengths to involve all of the affected and
interested parties in the CBNRAC negotiations. We prepared background
materials, brought in speakers to assist the committee, and hired a
highly competent and effective facilitator to assist throughout the
process. In addition, all of the materials and notes were posted to the
docket so that members of the public could follow the proceedings and
each meeting had a public comment period should any member of the
public wish to make comments about the proceedings. We were able to
reach consensus on 80 percent of the rulemaking. This means the CBNRAC,
which included small, medium, and large transit agencies from the West,
South, Midwest, North and East, were able to agree on a vast majority
of the regulatory text for the NPRM. The provisions were developed with
the intention of promoting public transit and protecting the private
charter industry. As indicated in the history section of this document,
achieving the right balance has been a challenge for many years. We
accepted this challenge because a negotiated rulemaking was a novel
approach to addressing the issues that have plagued this regulation for
years.
Given the above, we regret that some commenters perceived the
proposed rule to be anti-transit. The tone of this rulemaking is the
same as the current regulation and the same as any regulation that
prescribes certain behavior. We are in the business of promoting and
supporting transit agencies in their mission to provide community-based
services. We recognized and promulgated exceptions to the charter
service regulation that support transit agencies providing charter
services to the elderly, persons with disabilities, and people with low
income.
In addition, we carefully considered the interests of parties
impacted by this rulemaking. The negotiated rulemaking was a powerful
tool for collecting that information. We also considered all of the
comments received on the proposal and modified some of the regulatory
text based on the suggestions included in comments.
2. Section-by-Section Analysis
In addressing the comments received, we divided the comments
according to the applicable rulemaking section. For each section for
which we received substantive comments, we provide a brief summary of
the purpose of the regulatory text, we summarize the relevant and
representative comments received, and then we describe our decision
whether to modify that particular provision. If we modified the
provision, then we describe the modification. If we decided not to
accept the proposed modification, then we explain why and adopt the
language as proposed in the NPRM. For sections of the rule where we did
not receive substantive comments, those provisions are hereby adopted
as final.
Subpart A--General Provisions
Section 604.2--Applicability
The purpose of this provision was to state early on in the
regulation that is required to comply with this rulemaking, who is
exempt from the rule's requirements, and to set out certain situations
in which this rule does not apply.
One public transportation association noted that ``the draft rule
provides for application to all activities of FTA grantees that are
public transit agencies, without regard to the presence or absence of
federal funding * * *'' We also heard this comment from several public
transit agencies. In addition, one transit agency suggested that this
rulemaking not apply to those that receive a minimal amount of Federal
funds.
Agency Response: We note that in order to be an ``FTA grantee'' a
transit agency has accepted Federal funds from FTA. The commenter
correctly notes that to conclude otherwise would ``exceed FTA's
authority and its stated purpose of protecting private entities from
federally-assisted competition.'' Thus, as stated in the NPRM, this
rulemaking applies to those that receive Federal financial assistance
from FTA.
We do not believe setting a minimum amount of Federal funding to
trigger application of this rule is necessary. A transit agency always
has the option to segregate locally funded and maintained vehicles and
use those vehicles to provide charter service. To be clear, however, it
is not just purchasing a vehicle with Federal dollars that triggers the
application of these requirements. Housing the vehicle in FTA-funded
facilities or using FTA-funded equipment to maintain the vehicle also
triggers application of this rule. A complete segregation is necessary
to avoid the application of the requirements of this rule.
We also received a comment from a state association asking us
whether the charter service regulations apply to tribal nations. Under
our Notice of Funding Availability for the Tribal Transit Program,
published in the Federal Register on August 15, 2006 (71 FR 46959), the
charter service regulation applies to tribal nations under that
program. The charter service regulations also apply to tribes that
receive FTA grants as recipients or subrecipients under other programs.
That being said, however, the final rule provides an exemption for
section 5311 recipients, which encompasses many tribal programs that
use FTA-funded equipment for program purposes (defined as:
``transportation that serves the needs of either human service agencies
or targeted populations (elderly, individuals with disabilities, and/or
low income individuals); this does not include exclusive service for
other groups formed for purposes unrelated to the special needs of the
targeted populations.'').
FTA considered the comments on this subsection, but does not
believe the comments warrant a change to the proposed language, and,
therefore, the language is adopted as proposed.
Section 604.2(c)--Private Charter Exemption
This provision exempts from the rule's coverage private charter
operators who receive Federal financial assistance either directly or
indirectly under 49
[[Page 2332]]
U.S.C. sections 5307, 5309, 5310, 5311, 5316, and 5317, or section 3038
of the Transportation Equity Act for the 21st Century (TEA-21).
The main comment received regarding this subsection stated: ``In
removing private charter operators from its scope, it excludes up to 40
percent of the rural transit network from these rules, thus forcing
half the network to follow rules and procedures that are waived for the
private sector partners.'' Another transit agency stated ``we do not
believe that private charter operators should be treated different from
other organizations that receive Federal funds. Allowing some private
charter operators to not comply with the charter regulation and receive
Federal funds put those private charter operators at a competitive
advantage over other private operators that do not receive Federal
dollars. Either the receipt of Federal funds is an important factor or
it isn't.''
Agency Response: We respond to these comments by noting our
rationale in the NPRM for including this provision: ``The receipt of
funds from the Federal government should not interfere with a private
charter operator's business. This regulation has its genesis in the
protection of the private charter operators from unfair competition by
federally subsidized public transit agencies. To subject private
charter operators to the charter service regulations undermines the
very purpose of these regulations.'' We cite three reasons in support
of this analysis.
First, we think some comments may have confused the many private
not-for-profit agencies that provide public transit service in rural
areas with the private charter operators protected by this rule. It is
not FTA's intent to apply the requirements of the rule differently to
public transit agencies depending on whether they are governmental or
non-governmental entities.
Second, FTA's Over-the-Road Bus Program is specifically designed to
provide Federal assistance to private charter operators so that they
can retrofit their vehicles to make them accessible and comply with the
Americans with Disabilities Act. This is a federally sanctioned
activity, and, thus, to apply the charter regulations would run counter
to this Federal program. The same argument also holds true for those
private charter operators that receive Federal funds under 49 U.S.C.
section 5311(f), which provides a limited amount of Federal support for
running routes in rural areas. The point here is that there are clear
situations under which the Federal government sees a benefit to
providing Federal tax dollars to private charter operators.
Third, public transit agencies may enter into a contract with
private charter operators to purchase transportation services using the
private charter operator's vehicles. The fact that a private charter
operator contracts with a public transit agency should not have the
unintended consequence of preventing the operator from using those
vehicles, or other vehicles in its fleet, to provide charter service.
If a private charter operator, however, provides fixed route public
transportation using federally funded buses or vans under contract to a
transit agency or other public entity such as a State Department of
Transportation, the private charter operator stands in the shoes of the
transit agency and is subject to the charter service regulations in
regard to the use of those FTA-funded vehicles. That private charter
operator, however, would not be prevented from using other vehicles in
its private fleet to provide charter service.
Finally, the comment regarding this section's provisions placing
one private charter operator in a competitive advantage over another
private charter operator strikes us as disingenuous. No private charter
operator raised this issue, and if it truly was a concern, we have to
believe at least one private charter operator would have raised it.
Thus, while FTA rejects the proposed modifications to this section,
we include language to clarify that the charter service regulations do
not apply to private charter operators that receive, directly or
indirectly, Federal financial assistance under the programs listed or
to the non-FTA funded activities of private charter operators that
receive assistance under section 3038 of TEA-21.
Subsection 604.2(e)--Exemption for Transit Agencies
This provision exempts from the charter service regulation
recipients who receive funds under 49 U.S.C. sections 5310, 5316, or
5317 and provide charter service consistent with the Federal program
purpose.
We heard from numerous public transit agencies encouraging us to
expand this provision. The most common request was to expand this
provision to include recipients under 49 U.S.C. section 5311. The
second most common request was to expand the provision to exclude 49
U.S.C. section 5307 recipients that operate 50 or fewer buses in peak
hour service.
Agency Response: The CBNRAC considered the request to expand the
exemption to section 5311 recipients. The private charter caucus
opposed this provision because it believed it would lead to abuse
because there is no effective way to limit those activities. The second
request regarding 5307 recipients is a new one. We considered both
options and the concerns raised with expanding the coverage of this
section.
We believe that this section can be expanded safely to include
recipients of section 5311 funds for two reasons. First, section
604(2)(e) already limits the exception ``to program purposes only.'' We
added a definition of program purposes that states: ``transportation
that serves the needs of either human service agencies or targeted
populations (elderly, individuals with disabilities, and or low income
individuals); this does not include exclusive service for other groups
formed for purposes unrelated to the special needs of these targeted
populations.''
Second, we believe this expansion is appropriate given FTA's
efforts to support coordinated public transit human service
transportation activities. Some of the comments received noted that
without the exemption this provision could have a chilling effect on
those activities, which is something FTA wants to avoid. Thus, limiting
section 5311 recipients'' provision of charter service to program
purposes, as defined in the regulations, provides a limitation on those
services we believe will protect private charter operators. In
addition, the revised enforcement provisions will also provide a
counterbalance to this expansion if it is abused.
We reject the second request--excluding 5307 recipients with 50 or
fewer buses--because the change might unduly weaken the protections
provided by the rule to private charter operators. In an urbanized
area, even one served by a small transit system with 50 or fewer
vehicles, there are more likely to be private charter operators
available than in rural areas. In other instances, the transit system
would be able to provide charter service under other exceptions of the
rule, so this new exception would be unnecessary.
We have therefore amended 604.2(e) to include 49 U.S.C. section
5311 in the list of programs exempted from the requirements of the
charter service regulation when the charter service provided supports
program purposes.
Section 604.2(f)--Emergency Exemption
This proposed provision exempts recipients from the charter service
requirements in the event of a national,
[[Page 2333]]
regional, or local emergency lasting fewer than three business days.
We heard from several public transit agencies regarding the three
day limitation. Many expressed disappointment that the provision would
limit a public transit agency's ability to assist in the event of an
emergency. Others expressed concern that local emergencies are not
included, but could pose an equal amount of danger to the surrounding
community. One example provided was a train derailment where noxious
fumes engulfed the community where public transit is the logical choice
for evacuating the community quickly and efficiently. Another comment
asked why this provision does not include security training exercises.
Agency Response: Considering the concerns raised, we have decided
to amend this section to allow for transit agencies to respond to
declared emergencies. We will add the following language to 604.2(f):
``Actions directly responding to an emergency declared by the
President, Governor, or Mayor or in an emergency requiring immediate
action prior to a formal declaration.'' In addition, we felt it
necessary to provide a time limitation and so we are changing the three
day limit to 45 days. Thus, a transit agency has 45 days to assist with
emergency response before having to report its activity to the
emergency response docket created under subpart D of 49 CFR part 601.
Security training exercises are covered by the emergency preparedness
exemption in section 604.2(d).
Section 604.3--Exemption
This provision sets up a mechanism by which transit agencies may
``opt out'' of the charter service regulations.
We heard from transit agencies that this provision is not
necessary, the certification procedures were burdensome, and there
appears to be no purpose for the affidavit.
Agency Response: While we thought this provision would assist a
public transit agency to clearly and unambiguously state it does not
intend to provide charter services, we are convinced by the comments
that this provision is unnecessary. Therefore, we have removed the
exemption section from the final regulation.
Section 604.4--Definitions
This provision sets out the applicable definitions for this part.
Since the section contains several definitions, we will only discuss
those definitions where the public submitted comments. All other
definitions are adopted as proposed. We also added several new
definitions as a result of changes we made to the regulation based on
the comments we received.
Section 604.3(c)--Definition of ``charter service''
This is a key provision in the charter service regulation. The
definition of charter service identifies what service by public transit
agencies is considered charter service.
Generally, public transit agencies voiced concern that the proposed
definition does not ``recognize the realities of local public
transportation service by having the flexibility to add and modify
service for temporary situations, such as community events and
employers opening temporary facilities.'' A member of the public
submitted a comment that noted the proposed definition ``potentially
undermines coordinated efforts between local governments and risks
decreasing the efficiency and cost-effectiveness of service while
jeopardizing ridership incentives for universities and transit
systems.'' In addition, several transit agencies submitted comments
stating ``while the proposed rulemaking does address the issues raised
in the conference committee report, it also far exceeds what seems to
be the intent of Congress by providing a vague and poorly explained
definition of charter that could have the impact of redefining the very
definition of public transportation.''
In fact, most transit agencies submitted concerns about the
definition not including the term ``exclusive.'' One public
transportation association noted that ``the concept of exclusivity--
often referred to as ``closed door'' service--has been integral to the
definition of charter service for more than 20 years and is necessarily
the primary means of determining whether transportation is public
transportation or a private service.'' A public transit agency warned
that ``the failure to include exclusivity in the charter definition has
the potential to change the definition of public transportation.'' One
airport ground transportation association requested that ``the proposed
federal definition of charter service not supersede local state, city
and airport regulatory definitions currently in place for private motor
carriers of passengers to and from airports by maintaining the concept
of exclusivity.''
Some public transit agencies offered alternatives to the proposed
definition of charter service. A Midwestern city provided the American
Bus Association's quick reference guide on the definitions of charter,
mass transportation, and sightseeing. Three members of the public
suggested that the definition should be ``a point to point service that
is not open to the public, and not of a routine nature.'' An air
transport company recommended that the definition include ``at a fixed
charge for a motor vehicle.'' An east coast public transit authority
set forth the following indicia of charter service: ``for the sole use
of a distinct group of people; routing and frequency of service solely
determined by those people using the service or their sponsor; not open
to the general public; identification or affiliation required to board;
one-time, nonrecurring event, with no regular pattern; and service not
on a pre-published schedule or Web site.''
We also heard from public transit agencies that the examples
included in the definition of charter service should be removed.
Several public transit agencies stated the examples were unclear and
inconsistent. One east coast public transit association noted that
``there is no simple, rigid template that can simply and routinely be
applied to every situation to determine whether or not a service is or
is not mass transit. Attempting to impose one at the federal level will
inevitably result in a great disservice to the public at large.
However, reasonable and fair guidelines would be appropriate and useful
to all involved parties.''
From the private sector side, we heard from two private charter
operator coalitions regarding the definition of charter service. They
stated that while the CBNRAC did not reach consensus on the definition,
the parties did agree that ``charter service has three components: (1)
Transportation of a group of persons pursuant to a single contract with
a third party; (2) a fixed charge; and (3) according to an itinerary
determined by someone other than the public transit agency.'' In
addition, the coalitions urged FTA to not ``impose a black or white
approach to defining charter service, but should continue to look at
the intent of the service and whom the service is designed to
benefit.'' They also noted that the lack of a written contract should
not be dispositive in determining that service is charter service. One
of the coalitions recommended a definition of charter service as
``providing transportation service, using buses or vans, principally to
benefit a group of riders with mutual purpose and destinations.'' This
association also questioned the need to indicate who controls the
service as it may conflict with interpretations and the intention of
the rules: ``Who `controls' the itinerary has certainly been an
interpretation recipients have long abused, particularly in special
[[Page 2334]]
events.'' This association also recommended that ``fixed charge''
should be removed because it is often abused.
Agency Response: By far, this section received the most comments.
Since the CBNRAC could not reach a consensus on the definition of
charter service, we also received comments from several of the
committee members regarding our proposed definition. Considering all of
the comments received regarding the definition of charter service, we
decided to shorten and simplify the definition, while maintaining
flexibility in determining the intent of the charter service.
First, we added back the concept of exclusivity to the definition
of charter service. In the past, this word has caused problems because
a few public transit agencies have used the term as a loophole to avoid
the requirements of this rule. We address this issue by adding a
definition of ``exclusive''--service that a reasonable person would
conclude is intended to exclude members of the public--to the list of
definitions. Further while we do not agree that a 20 year history is
reason enough to add the term exclusive back in the definition, we do
believe that exclusivity is a good indication of intent to perform
charter service.
Second, we removed all of the examples included in the definition
of charter service. Instead, we provide factors that we will consider
in determining the intent of the service. We also believe that this
revised definition will allow transit agencies the flexibility needed
to provide public transportation to address traffic mitigation
associated with an event, as well as being able to serve community-
based public transportation.
Third, we make clear in the definition that it does not apply to
demand response services provided to an individual. We also provide a
definition of ``demand response,'' which is discussed in the next
section.
Finally, we have added a provision to the definition of charter
service to address events that are limited in duration and for which
the public transit agency charges a premium fare or for which a third
party pays for the service in whole or in part. While the new
definition does not prevent a public transit agency from establishing,
on its own, temporary or irregular routes to respond to community
demands, we believe that the nature of such service should be to
fulfill a public purpose. Thus, the definition of charter service
includes service by a public transit that is irregular or on a limited
basis for a premium fare that is greater than the usual or customary
fixed route fare or service for which a third party pays all or part of
the costs for the service. We believe service that fits in either of
those categories represents an opportunity for private sector
participation, and, therefore, if the public transit agency wishes to
provide such service it must give prior notification to registered
charter providers in its geographic service area.
Section 604.3(g)--Definition of ``demand response''
This section is new and is based on comments we receiving asking us
to define the term as used in the definition of ``charter service.''
We have taken the definition of ``demand response'' from our New
Freedom Circular, which states: ``any non-fixed route system of
transporting individuals that requires advanced scheduling by a
customer, including services provided by public entities, nonprofits,
and private providers.''
Section 604.3(h)--Definition of ``interested party''
This provision defines who is an interested party for purposes of
filing a complaint with FTA.
We received only one comment regarding this definition and it
stated that the definition was overly broad and hard to determine who,
in fact, could file a complaint.
Agency Response: This particular provision represents consensus
language from the CBNRAC. We believe that the parties identified in the
list of ``interested parties'' are clear, and, therefore, the provision
is adopted as proposed.
Section 604.3(k)--Definition of ``pattern of violations''
This provision defines what constitutes a pattern of violations for
purposes of 49 U.S.C. section 5323, which states in relevant part: ``In
addition to any remedy specified in the agreement, the Secretary shall
bar a recipient or an operator from receiving Federal transit
assistance in an amount the Secretary considers appropriate if the
Secretary finds a pattern of violations of the agreement.''
We received several comments expressing concern about our proposal
to define pattern of violations as ``more than one finding of non-
compliance with this Part by FTA beginning with the most recent finding
of non-compliance and looking back over a period of 72 months.''
Comments received focused on two aspects of this proposed
definition. First, most were concerned that a finding of non-compliance
should be for the same provision and not different provisions. Second,
several comments stated that it was unfair to examine 72 months and the
time period should be two or three years at the most. There was also a
misconception that the new rule would retroactively look back over a
recipient's compliance record. One comment, which is typical of the
comments we received from recipients, stated the issue as follows: ``We
suggest that the definition be revised to indicate that there must be
at least three violations in three years and the application of this
new definition should occur when the rule is final. Also, the
violations must be related in nature (i.e., not totally disparate
issues) in order to show a pattern.''
Private charter operators, on the other hand, agreed with the
proposed definition, but requested that FTA settle the issue of whether
a single complaint against a recipient can establish a pattern of
violations.
Agency Response: We understand recipients' concerns regarding this
definition and the potential finding of a pattern of violations for not
complying with paperwork requirements. In addition, we agree with the
suggestion that violations should be related and not completely
disparate. Thus, we have amended the definition of ``pattern of
violations'' to require that only unauthorized charter service
violations can constitute a pattern of violations. We believe that
mandatory withholding of Federal funding should only be reserved for
those cases involving unauthorized charter service only. This does not
mean, however, that there can never be a situation in which FTA will
not withhold funds for paperwork (e.g., failure to record charter
service or failure to post quarterly reports) violations. Rather, we
are simply stating that for mandatory withholding of Federal funds
under the new statutory provision contained in SAFETEA-LU, the pattern
of violations must be established based on unauthorized charter
service.
That being said, it is possible to establish a pattern of
violations in one complaint. For instance, if one complaint properly
documents three distinct charter service trips that are in violation of
Part 604, then FTA could consider those three allegations as
constituting a pattern of violations. We believe this is a reasonable
resolution to the concern of private charter operators that a single
complaint could establish a pattern of violations.
To be clear, however, each instance of a charter service violation
must be related to an event and not a single
[[Page 2335]]
instance of unauthorized charter service. In other words, the provision
of charter service for a flower show that is not in conformance with
these regulations would be an event. A single complaint alleging
unauthorized charter service, in order to properly assert a pattern of
violations, would have to include more than unauthorized service to a
flower show. In order to assert a pattern of violations, a single
complaint would have to include facts demonstrating unauthorized
charter service to a flower show, a golf tournament, and an auto
exhibition, for example.
In addition, we decline to shorten the examination period to two or
three years. While we considered including a three year period to
correspond with triennial reviews, not all recipients are subject to
triennial reviews and the six year period is consistent with other
operating administrations within the Department of Transportation that
examine a six year compliance history. Thus, we retain the six year
period, which begins on the effective date of this rule.
Section 604.4(o)--Definition of ``recipient''
This provision defines who is a recipient.
We received several comments about this definition because some
were confused as to whether the term includes ``subrecipients.''
Agency Response: We have amended the definition to state
``including subrecipients'' to make clear that the regulation applies
to direct recipients of FTA financial assistance as well as
subrecipients of FTA financial assistance.
Section 604.4(t)--Definition of ``violation''
This is a new provision to the final rule and it would define what
constitutes a violation for purposes of the charter service
regulations.
Several public transit agencies asked us to define what a
``violation'' is.
Agency Response: We added a new definition to this section to
define violation as ``a finding by FTA of a failure to comply with one
of the requirements of this Part.''
Section 604.5--Charter Service Agreement
This section discusses the terms of the Charter Service Agreement
which is part of the Certifications and Assurances recipients are
required to enter into as a condition of receiving Federal funds (49
U.S.C. section 5323(d)).
One transportation association noted that there was an
inconsistency between our intention not to apply the charter service
requirements to third party contractors and the terms of the charter
service agreement.
Agency Response: In order to address this inconsistency, we have
added the clarification that this provision applies only to a third
party contractor when they are using vehicles purchased with FTA funds.
Subpart B--Exceptions
Section 605.6--Government Officials on Official Government Business
This provision set out an exception for recipients to provide
charter service to government officials on official business. We also
proposed not to apply this provision to transit agencies with 1,000 or
more buses in peak hour service.
We received numerous comments from public transit agencies on this
provision to limit the number of bus hours to 80 annually, as proposed
by the private charter caucus.
Comments we received were along the following lines: ``The limit is
arbitrary and does not support or respect local cooperation. The
transportation of public officials by a public agency should not be
considered charter.'' One comment on this topic stated: ``How about
whoever wrote this NPRM comes on down here to tell our government
officials who sponsor the taxes that keep our transit systems operating
that they have limited number of hours that they can utilize the
charter service of the transit system.'' The same comment stated that
they do not have resources ``to conduct boarding surveys that
distinguish the government officials from anyone else that may join
them on a charter trip.'' Some public transit agencies applauded our
effort to recognize this service as an exception and felt the provision
to allow the Administrator to grant additional hours was sufficient.
Those who were not pleased with the NPRM suggested that FTA modify the
provision to allow for a greater number of hours for public transit
agencies located in state capitols. Others suggested that the limit be
based on the size of the recipient's geographic service area.
A private charter operator coalition objected to our provision to
allow additional hours upon request from a recipient. They urged that
such additional hours should only be granted in extenuating
circumstances, which should be ``invoked very rarely.'' They also
warned that this exception should not ``swallow up the general
prohibition'' of recipients providing charter service. This commenter
also requested at least 72 hours notice of all requests for additional
hours under this exception.
Finally, regarding our proposal not to apply this provision to
recipients with 1,000 or more buses in peak hour public transit
service, we heard from three of the largest east coast transit agencies
that strongly opposed the provision. Specifically, they noted
opposition to ``any regulatory change that imposes a different
application based on the size of the transit property.''
Agency Response: To be very clear, transporting a group of
government officials for official government purposes is charter
service under the existing definition of charter service. Government
officials that happen to board a fixed-route vehicle would not count
toward the 80-hour exception. This exception is targeted at government
field trips such as visiting a new stadium or wastewater processing
facility. It could also mean transporting City Council officials to a
site or business officials, accompanied by government officials,
touring a city for economic development purposes.
This exception is designed to allow recipients to provide charter
service to government officials for official government business.
Recipients may not provide charter service to governmental officials
for non-governmental purposes. We have added language to the regulatory
text to clarify this point. We have also added a definition of
government official, which states `` `government official' means an
individual appointed or elected at the local, state, or Federal
level.''
Since the transportation of government officials for government
purposes is charter service under the current regulations, as noted in
the NPRM, we believe that the 80 charter service hours per year is
appropriate because it is the baseline number of hours the private
charter operators on the CBNRAC agreed to. On the other hand, we
recognize that there may be special circumstances that might arise that
could call for additional bus hours during the year. If these
circumstances arise, we have a provision that allows the FTA
Administrator flexibility to allow those additional hours in
extenuating circumstances. Private charter operators requested that
they have the opportunity to comment on any request for additional
hours. To address this concern, we will add a Government Officials
docket (http://www.regulations.gov; FTA-2007-0020) for the purpose of
logging these requests for additional hours. Private charter
[[Page 2336]]
operators can sign up for notification when FTA places a request in the
docket. If the request raises serious concerns, the private charter
operator can contact the Ombudsman for Charter Services
([email protected]) to express those concerns. The
decision to grant a particular request is completely within the
discretion of the FTA Administrator.
Regarding the exception of transit agencies with 1,000 or more
buses in peak hour service, this provision was the subject of consensus
during the CBNRAC. During the negotiations, a CBNRAC member urged this
exception to prevent large public transit agencies from being inundated
with requests for charter service from government officials and
qualified human service organizations. Private charter operators on the
CBNRAC agreed to this provision. The response to this proposal,
however, was negative. We heard from three large east coast transit
agencies and we are convinced by their argument that large transit
agencies should not be treated differently, and, therefore, we removed
this provision from the final rule.
To conclude, we decline to modify the 80-hour annual limit. Since
the transportation of government officials for government purposes was
unauthorized charter service when provided by recipients under the old
regulation, we believe the 80-hour limit per year is a legitimate
threshold number for the new exception. In addition, we have eliminated
the language treating transit agencies with more than 1,000 buses in
peak hour public transit service differently.
Section 604.7--Qualified Human Service Organizations
This section provides an exception to the prohibition against
recipients providing charter service if they provide charter service to
qualified human service organizations (QHSO). We also proposed not to
apply this provision to transit agencies with 1,000 or more buses in
peak hour service.
The CBNRAC reached consensus on this provision because it
recognized FTA's efforts to establish coordinated public transit human
service transportation planning. In addition, this provision recognizes
the President's Executive Order on coordinated transportation
(Executive Order on Human Service Transportation Coordination, February
24, 2004).
The comments we received on this section primarily centered on the
assertion that charter service provided to QHSOs should be completely
exempt from the charter service regulations. Specifically, comments
stated ``although the negotiators agreed that services could
appropriately be provided to qualified social service agencies, the
draft process is unnecessarily complicated and incomplete.'' These
comments went on to state ``it is unclear how these additional criteria
are to be evaluated (i.e., would a qualified social service agency
certify such a mission? Would a public transit agency be obligated to
investigate the basis for such a claim?) and it is unclear why FTA
perceives a need for the additional criteria at all.'' These public
transit agencies and associations advocated that the additional
criteria should be eliminated from the rule. We also heard from several
Midwestern transit agencies supporting our provision on QHSOs: ``We
fully support the exceptions in 604.7 and 604.8 for government
officials and qualified human service organizations.'' A private
charter operator expressed a similar sentiment: ``FTA's new disclosure
procedures for human service agencies and public operator trips are a
positive step forward.''
Finally, we received several comments asking us to define the term
``struggling for self-sufficiency.''
Agency Response: The language in this section represents a
consensus from the CBNRAC. The criteria included in the NPRM were the
subject of much discussion during the negotiations and the subject of a
special presentation from FTA ``United We Ride'' staff. The criteria
are a reflection of the requirement of the President's Executive Order
on transportation coordination.
In addition, regarding the comment as to whether a transit agency
must investigate information provided by a QHSO, the FTA Charter
Registration Web site is a tool for tracking registered charter
providers and QHSOs. There is no requirement for public transit
agencies to independently verify the information submitted by a
registered charter provider or QHSO. Further, since registration on the
Web site constitutes submission of information to the government, false
submissions would be subject to sanctions under 18 U.S.C. section 1001,
which includes potential criminal fines and imprisonment.
Regarding the exemption of transit agencies with 1,000 or more
buses in peak hour service, we removed this provision from this
exception based on comments received. (See discussion under
``Government Officials'' exception above.)
Finally, we changed the phrase ``struggling for self-sufficiency''
to ``low income,'' which is a more commonly understood term in the
transportation industry.
This section is modified to remove the exception for recipients
with 1,000 or more buses in peak hour public transit service, and
change ``struggling for self-sufficiency'' to ``low income.''
Section 604.8--Hardship
In this provision we proposed to allow a transit agency in a non-
urbanized area to provide charter service to an organization if a
registered charter provider imposes minimum trip duration or the
registered charter provided would have deadhead time that exceeds the
total trip length.
Public transit agencies support this exception, but requested that
it be extended to small urban areas with populations under 200,000. One
public transit agency commented that ``FTA's proposed hardship
exception is well-crafted and provides a reasonable objective standard
for determining whether available private charter providers are too far
away to be expected to provide cost-efficient service and scale that
definition to the size of a particular charter. Expanding that
provision to, at minimum, small, urban areas would allow those areas to
be better served without impinging on the interests of private charter
operators.''
Private charter operators opposed this exception. They contend that
``hardship is largely a myth and any rule addressing `hardship' is
likely obsolete and more likely to be used to harm private operators
than relieve `hardship.' '' In addition, they assert that the rule as
written assumes the private market may not desire to serve certain
needs, even if fulfilling the service may be at an economic loss and
businesses routinely discount services, have sales, offer loss leaders,
and utilize yield-pricing strategies. In theory, a recipient creates a
``hardship dependency'' when failing to allow the marketplace to
respond.
Agency Response: We believe there is merit to retaining the
hardship exception. Rural providers are in a unique position of not
having many options to rely upon. Private operators are usually located
in urban areas and the high number of deadhead hours is a reality for
many rural communities.
On the other hand, we recognize that businesses often set minimum
trip durations and to allow public transit agencies to provide charter
service simply because the minimum trip duration exceeds the trip
duration of the requested charter service could have a
[[Page 2337]]
negative impact on small, rural private providers.
Therefore, we amended the regulatory text to include small
urbanized areas under 200,000 in population and removed the provision
that would allow a rural public transit agency to provide service when
the minimum trip duration exceeds the length of the requested service.
In addition we collapsed this provision into a new section called
``Petitions to the Administrator,'' which is located in section 604.11.
Because we have established a docket for this exception (Petitions to
the Administrator docket http://www.regulations.gov; FTA-2007-0022), we
have removed the reporting requirements for the hardship exception.
Interested persons may simply track these requests through the docket
system.
Section 604.9--Leasing FTA Funded Equipment and Drivers
This section discusses the ability of a public transit agency to
lease equipment to a private charter operator.
Private charter operators submitted comments requesting that FTA
advise ``recipients it is their responsibility to comply with the
[leasing exception requirements] with emphasis placed on the
requirement to certify the registered charter provider has exhausted
all available vehicles of all registered charter providers in the
recipient's geographic service area.''
Public transit agencies responded to this provision with the
general concern that a recipient does not have the ability to determine
if the private charter operator has capacity: ``The grantee should not
be responsible for verifying the validity of any information provided
by the leasing charter operator.'' Another comment stated it slightly
differently: ``FTA will require public agencies to maintain proof
offered by the lessor that no privately owned equipment is available
but is unclear on whether the public agency must investigate
independently or may take the proffer at face value.'' Yet another
comment pointed out that ``while this is a well-intentioned and
defensible condition, the rule should make it clear that recipient's
obligation in this area is to ask whether this has been done and that a
recipient may rely on the private charter operator's representation
that it has, supported by documentation provided by the charter
operator.''
Finally, one additional comment submitted by a public transit
agency advocates against this exception because of the impact it will
have on small private charter operators: ``There are two problems with
this proposed exception. First it would be difficult to impossible for
any private operator to guarantee that it has exhausted all of the
available vehicles of all registered charter providers in a large
municipal area. This would force recipients out of the charter leasing
business and thereby deprive the recipient of much needed funds.
Second, this provision also severely impacts smaller private charter
operators who would either have to pay whatever fee is set by the
larger private operator or turn away business. Such a scenario could
eventually force smaller private charter operators out of business,
which would then impact FTA's certification that this regulation would
not have an impact on small businesses.''
Private charter operators also expressed concern with this
provision. One of the consolidated responses for private charter
operators who participated on the CBNRAC expressed concern that the
current leasing provision allowed for sham transactions between a
private charter operator with no vehicles and a public transit agency.
The consolidated response noted support for the new provision because a
private charter operator should have the first opportunity to provide
charter bus service in the geographic service area.
Agency Response: We agree with the comments submitted regarding the
concern about a public transit agency's obligation to investigate
whether a registered charter provider has exhausted all of the
available private charter vehicles in the geographic area. We have
modified the proposed language to include a requirement that in order
for a recipient to lease vehicles to a private charter operator, the
operator must be registered on FTA's Charter Registration Web site.
Furthermore, we added a requirement that a private charter operator
identify the number of vehicles it owns when it registers. Then, when a
registered charter provider certifies that it has exhausted all of the
private vehicles in the area, a recipient need only go to the Charter
Registration Web site, note all of the registered charter providers in
the geographic service area and the number of vehicles identified in
the registration to verify that the registered charter provider's
certification is accurate. No independent verification beyond this
process is required by the regulations.
In addition, if the registered charter provider fails to exhaust
the vehicles of other registered charter providers in the geographic
service area, then the registered charter provider may be subject to a
complaint for removal from the FTA Charter Registration Web site.
We have retained the requirement to exhaust all available privately
owned vehicles in the geographic service area. This is a protection
that the private charter caucus requested during the CBNRAC
negotiations and the public transit caucus agreed to. We received a
couple of comments indicating that a private charter operator should
not have to contract with another private charter operator known to be
ineffective. In order to address this concern we do not require a
registered charter provider to lease vehicles from another registered
charter provider against whom the first registered charter provider has
filed a complaint for removal from FTA's Charter Registration Web site.
To succeed on this point, however, a registered charter provider would
have to allege facts sufficient to support removal as set out in 49 CFR
section 604.21. (See also Appendix C for examples.)
Finally, since we moved the hardship exception to the new Petitions
to the Administrator exception, the leasing exception has been
renumbered to section 604.8.
Section 604.10--Events of Regional or National Significance
This section allows for the provision of charter service by public
transit agencies for events of regional or national significance.
Private charter operators supported this provision, but requested
that any petitions received by the Administrator should be subject to a
notice and comment provision for registered charter providers. They
also requested that FTA provide a clarification that only if all
private operator vehicles have been exhausted should a recipient be
allowed to provide charter service.
Public transit agencies were concerned that this provision would
apply to events that have already been planned. In addition, one public
transit agency stated ``public transit providers should be able to
provide public transportation services for special events in their
locality that promote economic development and show their community
without the express approval of the Administrator or the requirement
for consultation with private charter operators.'' One east coast
transit agency stated ``This provision does not account for those
events that are time sensitive in which the public transit agency does
not have time to consult with all of the private charter operators in
their area, for example, a presidential inauguration.''
Agency Response: This section is now included in the ``Petitions to
the Administrator'' section located in
[[Page 2338]]
section 604.11. In response to the private charter operators' comments,
we note the establishment of a ``Petitions to the Administrator''
docket. Private charter operators are able to view requests through
this Web site (http://www.regulations.gov, FTA-2007-0022). We are not
offering a public comment period, but if a request egregiously
misstates facts, a registered charter operator could contact the
Ombudsman for Charter Services ([email protected]) to
raise specific concerns.
In addition, in response to the public transit agencies comments,
for events in the planning process, any service provided by a public
transit agency after the effective date of this rule must conform to
the requirements of the rule, including the requirement for the
recipient to exhaust all available vehicles of registered charter
providers. In other words, if the event will occur after the effective
date of this rule and the public transit agency intends to provide
service to that event, then the service must meet the special events
requirements contained in section 604.11. If the event occurs before
the effective date of this rule, then the requirements of the rule do
not apply.
We have also added a requirement that the request for this
exception include the date of the event. We added this requirement to
make it clear that the approval, if granted, would be for a one time
event only.
Section 604.11--When No Registered Charter Provider Responds to Notice
From a Recipient
This section sets out the requirements for public transit agencies
when no registered charter provider responds to a notice requesting
charter service.
Public transit agencies submitted a variety of comments on this
provision. Some disagreed with the proposed time frames included in the
regulation. Others complained that providing notice was essentially
providing free advertising/dispatch services to registered charter
providers. Still others requested that FTA consider modifying the
proposed language to allow a public transit agency to provide the
service in the event that the registered charter provider and customer
are unable to agree upon terms.
Private charter operators agreed with the provisions of this
section and noted that ``many recipients confuse the public by inasmuch
as they [sic] advertise charter service to the degree consumers may not
discern between a transit agency and a private provider. This often has
the effect of artificially creating `demand' and allowing transit
agencies to inject their tax subsidized pricing in the private market
equation, thereby indirectly stifling operating margins.'' This comment
went on to state ``the proposed rule further establishes the `first
option' to offer charter service inasmuch [sic] that recipients are not
required to notify registered charter parties of all inquiries
regarding charter bus service.''
Agency Response: We recognize the need to clarify that public
transit agencies are not required to provide notice to registered
charter providers of all requests for charter service. Notice is only
given for those requests that do not fit within one of the exceptions
and for which the public transit agency is still interested in
providing that service. Only in this instance is a public transit
agency required to provide notice to the list of registered charter
providers in its geographic service area. Other than that, the private
charter comments are correct that a public transit agency cannot
provide the requested charter service if a registered charter provider
responds affirmatively to the notice provided. This is true even if the
customer and the registered charter provider are not able to agree upon
a price.
We added language to this section clarifying that upon receipt of a
request for charter service that does not fit within one of the
exceptions outlined in subpart B, and the recipient is interested in
providing the charter service, the recipient shall provide notice to
registered charter providers in the recipient's geographic service
area. Further, due to the fact that we have moved the hardship and
special events exceptions, this provision is renumbered as section
604.9.
Section 604.12--Agreement With Registered Charter Providers
This section allows a public transit agency to provide charter
service in its geographic service area if it obtains an agreement from
all of the registered charter providers in the geographic service area.
Private charter operators recognized that this exception is a
continuation of an existing exception, but objected to the provision
because ``the rule as proposed places an unfair and unintended
restriction and subjects taxpayer subsidized competition on new
registered charter parties. It is our assertion that on the date new
private charter operators register, existing agreements will no longer
permit recipients to continue under those agreements until an agreement
may be obtained from all registered charter parties.'' The comment goes
on to propose that an agreement can be fulfilled if a contractual
obligation is completed no later than thirty days from the date a newly
registered charter provider becomes registered. Further, this comment
goes on to state that the charter service agreement should be a fluid
document that represents a meeting of the minds.
Public transit agencies submitted comments opposing the timeframes
of January 30th of each year and February 15th of each year.
Agency Response: This language represents CBNRAC consensus language
developed by the private charter caucus. Since both private charter
operators and public transit agencies oppose the January 30th and
February 15th timeframes, we modified the regulatory text to indicate
that a recipient has 90 days to enter into an agreement with a newly
registered charter provider after an initial agreement with previously
registered providers. If no agreement is reached, the recipient may not
provide charter service under this exception. Further, a registered
charter provider may cancel the agreement at any time after providing
the recipient a 90-day notice. In addition, because of other changes to
this subpart, this provision has been renumbered to section 604.10.
Section 604.13--Administrator's Discretion
This new section is designed to provide the Federal Transit
Administrator with the discretion to allow public transit agencies to
provide charter service in certain extraordinary situations.
We did not receive comments from public transit agencies on this
new exception, but we did hear from private charter operators who are
opposed to the exception. Specifically, they believe this exception
``may serve as an impediment to the private sector filling the needs,
while ultimately creating an unwarranted entitlement.'' They base this
belief on the fact that the examples provided of the funerals of
Presidents Reagan and Ford required advanced planning for those events
and the private sector could have been involved if the public transit
agency had contacted the private sector. Furthermore, the private
charter operator coalition noted that this exception is ``a solution in
search of a problem'' because there is no reason private charter
operators couldn't receive notice of the request for service and
provide buses for these kinds of events should they arise unexpectedly.
Agency Response: This section is now called the ``Petitions to the
Administrator'' exception and is located at section 604.11. The new
section
[[Page 2339]]
contains not only requests for discretionary exceptions to the charter
service regulations, but also the hardship and events of regional or
national significance, which were both discussed earlier in this
preamble.
The basis for the discretionary exception is to provide the
Administrator with discretion to respond to extraordinary
circumstances--those events where there is no time for prior planning.
While some preparations may be made in anticipation, we believe the
actual day of the event would not be known in advance and the
capability of a particular city to handle the event would likewise not
be known in advance. We intend to allow this exception only under
extraordinary circumstances. Private charter operators may track these
requests and FTA's responses through the Petitions to the Administrator
docket (http://www.regulations.gov; FTA-2007-0022).
In addition, we added a requirement to identify the date of the
event because we want to make absolutely clear that the approval is
only for the date specified in the request.
Section 604.12--Reporting Requirements for All Exceptions
This section set out the reporting requirements for public transit
agencies that provide charter service pursuant to an exception. We
proposed quarterly electronic reporting of standard information
regarding charter service trips.
Private charter operators supported this provision as providing the
type of transparency necessary to ensure that public transit agencies
are not providing unauthorized charter service. While some raised
concern about the ability to omit origination and destination for
safety and security reasons, if the reason is recorded, then most
thought this exception would be acceptable. In addition, we heard from
one association that encouraged us to increase the time period from
three years to six years for maintaining the records electronically. To
support this request, they point to the fact that our definition of
pattern of violations examines the past six years and to maintain
records less than six years would be inconsistent with this provision.
Public transit agencies opposed this provision because they believe
it to be too onerous. In addition, one commenter suggested that the
reporting provisions be consolidated so that the same information in
the same format is submitted. Other comments submitted requested that
the public Web site for storing the reports be replaced with a local
Web site for the agency or with records kept at the transit agency's
place of business, which would be publicly available. One public
transit agency stated it this way: ``Only basic information should be
reported under the exceptions. If the reporting is made too onerous,
grantees will have to charge the administrative cost to the human
service or government entity. For the other exceptions, that
information is reported through other mechanisms and this additional
reporting is unnecessary.'' Others recommended maintaining the records
in a single charter log. A Midwestern state department of
transportation stated: ``We recommend that the charter logs required by
604.7(a)(3), 604.8(d), 604.9(b), 604.10(b) and 604.12(c) be
consolidated into a single charter log. The information that must be
maintained according to the regulations can be categorized and tracked
in a spreadsheet or database.''
Agency Response: The purpose of the public Web site is to ensure
that all reports are easily available to members of the public, in
particular, private charter operators. Maintaining these records at the
transit agency does not allow for 24-hour availability. We also believe
that all of the information can be consolidated into one log. With the
exception of the special events and leasing exceptions, the information
required is the same. Thus, a single Word document or Excel spread
sheet could serve as a recipient's quarterly report.
In addition, by limiting the applicability of this regulation--
excluding recipients of section 5311 funds when providing charter
service for program purposes serving the elderly, persons with
disabilities, or persons with low income--we have substantially reduced
the reporting burden on rural and non-urbanized areas for most of the
service they operate.
Furthermore, we decline to extend the reporting period to six
years. We believe the private charter operators are confusing
complaints with reports. When we examine six years of the recipient's
compliance history we are looking at complaints filed. Since FTA
maintains the Charter Registration Web site, we will have access to
quarterly reports for purposes of reviewing a recipient's compliance
history. The regulatory requirement simply applies to a grantee's
retention of its quarterly reports, not FTA's retention of quarterly
reports.
Subpart C--Procedures for Registration and Notification
Section 604.13--Registration of Private Charter Operators
This section sets out the required information a private charter
provider must submit in order to be considered a registered charter
provider.
We received comments from public transit agencies urging us to
limit where a private charter operator can register. Specifically, one
representative comment stated that it trusts ``FTA will be vigilant and
act quickly to correct abuses by removing private operators that act in
bad faith * * * but such a process will not address the scenario in
which a registered private operator who cannot in actuality provide
service responds to a recipient's notice.''
Agency Response: Private charter operators may register with FTA at
http://www.fta.dot.gov/laws/leg_reg_179.html. We also believe that a
private charter operator should be able to register in any geographic
service area. This means that a company could register with all public
transit agencies across the United States. We believe that since this
rule affords protections to registered charter providers, the threat of
losing that registration will be deterrent enough for private charter
operators to act in a commercially reasonable manner and in good faith
when negotiating with a customer sent to them by the public transit
agency. Removal from the Charter Registration Web site carries with it
a three year period of receiving no notice from public transit
agencies. This is no small consequence and, therefore, it will protect
public transit agencies from ``vindictive'' private charter operators.
Further, as noted in the history section of this document, our findings
as well as GAO's findings have not found an ``unmet need'' with respect
to the provision of charter services. Thus, we believe that this
provision is protective of those situations in which a private charter
operator is acting in a vindictive manner.
In addition, the Web site is designed to allow quick and efficient
removal of a private charter operator once a decision has been made
that satisfies the requirements of section 604.26, ``Removal.'' We
have, therefore, adopted as final the proposed language.
Section 604.14--Recipient's Notification to Registered Charter
Providers
This section requires public transit agencies to provide notice to
registered charter providers when the public transit agency is
interested in providing the requested charter service.
[[Page 2340]]
We heard from public transit agencies and a public transit
association indicating that a clarification is necessary in this
section. Specifically, according to the association, ``as drafted,
section 604.14(b) would require pre-notification to private charter
providers upon receiving a request for service under any exception. We
believe this is a drafting error since it is inconsistent with the
language immediately proceeding in section 604.14(a) and our
understanding of the intent of the negotiators.'' In addition, the
association raised a concern regarding when an e-mail is returned
``undeliverable.'' A transit agency stated ``the regulations require
that the transit agency provide notice of a request for service by the
close of business if the request is received before 2 p.m. that day, or
the next business day if received after 2 p.m. This short time does not
allow the public transit provider to evaluate the request and make sure
that all the information is complete, before notifying the registered
private charter companies.'' One Midwestern transit agency commented
that ``the Web site will greatly reduce the private operator's
financial risk. They will no longer need to market, advertise, or
promote their business. Every morning they can just log on to FTA's
version of `Make Me a Millionaire' Web site to see what contracts they
can bid.''
Agency Response: We believe the language as proposed is clear that
only requests for charter service that do not fit within one of the
exceptions require notification to registered charter providers. In
other words, the notification procedures apply in the event one of the
exceptions does not. Even so, we decided to add a clarification to
indicate that upon receipt of a request for charter service that does
not fit within one of the exceptions in subpart B, a recipient
interested in providing the charter service shall provide notice to
registered charter providers registered in its geographic service area.
Further, we are not convinced that the time period provided does
not give public transit agency enough time to decide whether it is
interested in providing the requested charter service. The time frames
included in this particular provision were developed by the CBNRAC,
which included small, medium, and large public transit agencies.
Therefore, we retain that provision and adopt it as final.
In addition, we agree with the transportation association that a
clarification should be added to the regulatory text to take into
account when an e-mail is returned as ``undeliverable.'' In those
instances, we have required a public transit agency to also send
notification of the requested charter service by facsimile. In that
instance, the public transit agencies must maintain a record of the
``undeliverable'' e-mail notification and confirmation that a facsimile
was sent to the number provided by the registered charter provider.
Subpart D--Registration of Qualified Human Service Organizations and
Duties for Recipients Regarding Charter Registration Web Site
Section 604.15--Registration of Qualified Human Service Organizations
This section set forth the registration requirements for qualified
human service organizations (QHSO). Besides the basic information of
organization name, address, and telephone, etc., the requirements also
include basic financial information and a certification that funding
received from a state or local program includes funding for
transportation.
We heard from several public transit agencies regarding these
registration requirements. Most opposed the requirement to certify that
state or local funds include funds for transportation. One
transportation association stated ``it is the lack or dearth of
transportation funding that keeps these social service agencies from
contracting with private charter providers.'' This association requests
that the requirement be eliminated from the rule because ``the rule's
new complaint and appeals process is sufficient to ensure that non-
deserving organizations do not receive service.''
Regarding the requirement to certify funds for transportation, one
transportation authority noted that ``many agencies may not know the
terms of the original federal grant and social service agencies that
are funded for transportation would not necessarily need the free or
reduced cost services this system is intended to facilitate.'' Another
transit agency stated: ``[the requirement presents a problem] since
most federal funds are passed through one or more levels of state and
local government with no indication of the original purposes. Social
services organizations that are funded for transportation would not
necessarily need the free or reduced cost services this system is
intended to facilitate.''
From the private charter operator side, we received comments from
an association urging us to ``place the burden of qualification on the
recipient and make clear that a failure to qualify an organization will
result in a finding of violation and enforcement action.''
Agency Response: We find the arguments from the public transit
agencies regarding QHSO funding to be persuasive. Furthermore, the
emphasis on human service transportation coordination planning requires
us to be mindful of any impediments to accomplishing that goal. As
such, we are modifying the proposed language to remove the requirement
that a QHSO certify that state and local funds include funding for
transportation.
We also added a clarification in the final rule that a QHSO is
required to provide certain information and demonstrate that it is
qualified. Public transit agencies should ensure that the QHSO has a
valid registration in the FTA Charter Registration Web site that was
provided at least sixty days in advance of the requested service before
providing charter services to that organization.
Finally, we added a clarification in the final rule that a QHSO, as
part of its registration, must explain what types of future requests
for charter service it may request from a recipient and how those
charter service trips are related to the QHSO's mission.
Section 604.16--Duties for Recipients With Respect to Charter
Registration Web Site
This section provides minimum requirements for recipients of FTA
funds with respect to the Charter Registration Web site.
We received comments from public transit agencies urging us to
provide training and a training manual for the new Web site.
Agency Response: We agree with these comments and, have delayed the
effective date of the rule in order to give us time to provide the
necessary training and distribute an electronic user guide to public
transit agencies. We will also encourage transit agencies to use the
site before the effective date of the final rule and the Ombudsman for
Charter Services will assist transit agencies with any questions or
problems they may encounter ([email protected]).
We have also modified the language of this provision to require a
public transit agency to ensure that its employees and contractors
affected by this regulation have the competency to effectively use the
Web site.
Subpart E--Advisory Opinions
This subpart allows for public transit agencies and private charter
operators to request an advisory opinion from the Office of the Chief
Counsel at FTA.
[[Page 2341]]
We heard from several public transit agencies opposing this
provision. A large public transportation association went so far as to
challenge whether the CBNRAC reached consensus on this provision. Other
public transit agencies said that FTA should ``withdraw the provision
on advisory opinions because this means advice will be given on a
regional basis which will lead to inconsistencies.'' Another comment
stated ``while the intent of the advisory opinions portion of the rule
is laudable as a practical matter, our management believes it has the
potential to create more problems than it solves so we urge FTA to
eliminate it.''
Private charter operators support the advisory opinion provision.
Specifically, one southern private charter operator stated ``I commend
the committee on the consensus reached in the Advisory Opinion issue.
This rule should be invaluable to both the private and the public
operator in obtaining a clear opinion from FTA on the appropriateness
of a proposed charter movement. If executed timely, this avenue will
give a transit operator the opportunity to refrain from providing an
illegal charter.''
On the other hand, we also heard from several private charter
operates expressing concern over FTA's decision to not include cease
and desist provisions in the rule. One private charter operator stated
its concern as ``our main disagreement with the FTA proposed rule is
the lack of a process by which a complainant may apply to FTA for a
cease and desist order to stop a publicly funded transit agency from
beginning an illegal charter. Allowing private operators to apply for a
cease and desist order prior to the charter would prevent the operator
from filing and the transit agency from responding to the full
complaint, hearing, and appeals process. FTA's reluctance to propose a
cease and desist process stems solely from the agency's estimation of
the workload and human capital required to implement it. While we are
mindful of the agency's budget constraints we feel that a cease and
desist order process need not be, and should not be long and drawn
out.''
Another private charter association noted that ``since FTA cannot
recoup lost revenues when recipients are found in violation of the
Charter Service rules, it is imperative the FTA maintain a cease and
desist provision and not to include such a provision is inconsistent
with FTA's duty and fails to protect the private charter operator.''
Agency Response: We decline to remove this provision based on the
comments received from public transit agencies. The inclusion of an
advisory opinion provision allows for a more consistent, organized, and
transparent process than the one that currently exists. Further this
section was a consensus item during the CBNRAC negotiations, and,
therefore, we are reluctant to remove it.
Further, we are also persuaded by the comments from the private
charter operators requesting a cease and desist provision. This
provision was considered during the CBNRAC negotiations, but no
consensus was reached on this point. We rejected the provision in the
NPRM because we believed it would be too burdensome. Since then, we
have examined our practices, especially with respect to past decisions,
and confirmed that we have provided cease and desist orders in the
past. Therefore, we have included in the Advisory Opinion section a
provision to allow private charter operators the option of requesting a
cease and desist order. We have created an Advisory Opinion/Cease and
Desist Order docket at http://www.regulations.gov; FTA-2007-0023 to
keep track of all advisory opinions and cease and desist orders granted
or denied.
We have also included a provision to require that registered
charter providers seeking a cease and desist order serve a copy of the
request on the affected public transit agency by e-mail or facsimile.
In addition, the registered charter provider must certify that it
telephoned the public transit agency and informed an appropriate
official of the submission of the request for cease and desist order in
its request for an advisory opinion.
Subpart F--Complaints
Section 604.27--Complaints, Answers, Replies and Other Documents
This section sets out the content requirements for complaints and
provides timeframes for the filing of complaints, answers, replies, and
rebuttals. This section also allows a complainant to withdraw its
complaint at any time.
We received a variety of comments on this section. Generally, most
public transit agencies expressed concern over the new, detailed
complaint procedures. One southern public transit agency stated ``the
complaint process appears to be unwieldy, complicated, and potentially
expensive for small operators.'' A southern association of regional
councils stated ``the complaint process is overly harsh. As written,
private providers can ``tie up'' a public provider with litigation for
almost any perceived wrong. Public providers are left to stand alone
and incur significant legal fees to defend every complaint.'' This
comment also advocated for a process that addresses honest mistakes, is
administrative in nature and is free of any need for lawyers. One state
representative submitted a comment on behalf of his public transit
agency constituents stating the ``NPRM is nine and one half pages and
five of the pages address the procedures for filing a complaint that
cannot be done without the services of an attorney. The additional
administrative requirements will result in significant additional
costs--direct and indirect.'' In addition, we heard from public transit
agencies that complaints should be filed within a certain time frame.
One western transit district suggested ``FTA's jurisdiction over
complaints should be limited to complaints that are filed within the
earlier of: (a) 90 days after the event giving rise to the complaint or
(b) 30 days after the complainant knew or should have known about the
event that is the subject of the complaint.''
Private charter operators were supportive of the proposed complaint
provisions. A private charter operator stated that the ``FTA charter
bus complaint and appeals process required revision in order to achieve
consistent and timely decisions. The new process will require
additional information on the part of the complainant and should result
in complaints with enough information to determine the violation of the
charter regulations.''
Agency Response: We disagree with comments that the new complaint
process is ``unwieldy and unduly burdensome.'' We are also unconvinced
by comments asserting that the new complaint process will be more
expensive for public transit agencies. In fact, the new complaint
process places a heavier burden on registered charter providers than on
recipients. Recipients have no greater burden under the new regulation
when it comes to responding to a complaint than they did under the old
regulation. In other words, a public transit agency still has the
obligation to respond timely to a complaint filed against it, which is
exactly the same obligation it had under the old charter service rule.
This final rule, however, plainly states the burden on a transit agency
when responding to a complaint, the timeframe for responding to a
complaint, and provides clearer appeal procedures. All of these
improvements were agreed upon by all parties during the CBNRAC
negotiations.
Further, the new complaint provision requires a registered charter
provider to provide specific factual allegations regarding an alleged
charter violation.
[[Page 2342]]
Before the public transit agency has to respond to that complaint, FTA
looks at the complaint to ensure that it has met all of the regulatory
requirements. In the past, the only standard for filing a complaint was
that it ``is not without obvious merit,'' which allowed an incomplete
complaint to move forward just as easily as a complete complaint, which
did tie up public transit agencies unnecessarily. Now, a complaint must
be legally sufficient before it moves forward to the transit agency for
a response.
On the other hand, we agree with comments submitted that only
``ripe'' complaints should be considered. Thus, we modified the
language in the final rule to require that a complaint must be filed
within 90 days of the date the alleged unauthorized charter service.
Further, we asked for comment regarding the role of state
departments of transportation in the complaint process. We proposed to
allow a state department of transportation to make a first attempt to
resolve a complaint between a private charter operator and a sub-
recipient. We heard from several state transportation departments that
did not agree with our proposal. We heard from one state transportation
department that did support the idea of allowing a state to attempt to
resolve the matter initially.
Private charter operators did not support state involvement in the
complaint process. Just like the public transit comments, private
charter operators saw state involvement as leading to inconsistent
decisions and a lengthier process.
We agree with the majority of comments received and will retain the
proposed language in the final rule. The requirement in the final rule
would notify a state department of transportation that a complaint has
been filed against a sub-recipient. There are no requirements for the
state in the complaint process.
Finally, we added a clarification that complaints for removal of
registered charter provider or QHSO must be submitted within 90 days of
discovering facts that merit removal. This 90-day deadline does not
mean, however, that QHSOs that register and then are not challenged
within 90 days after registration cannot later be challenged. Rather,
when a registered charter provider or recipient finds evidence
supporting removal, then the 90-day clock begins.
Subpart H--Decisions by FTA and Appointment of a Presiding Official
(PO)
Section 604.34--Decisions by the Chief Counsel and Appointment of a PO
This provision allows FTA to appoint a presiding official (PO) in
the event that a hearing is necessary.
Public transit agencies submitted comments expressing concern that
the qualifications of a PO were not set out in the proposed rule.
Specifically, ``without reasonable criteria, vetted through public
comment, the credibility and qualifications of any particular PO will
necessarily be the first order of business in any proceeding. Must a PO
be neutral and detached? Is FTA Regional Counsel available for
assignment as a PO? Other FTA personnel? Is there a means of
challenging a PO for cause, bias, or prejudice?''
Conversely, private charter operators support this provision and
``presume that such officials will have no predisposed transit
affiliation and have proper training and experience that will instill
confidence in the complaint process.''
Agency Response: We believe anyone appointed to serve in the PO
capacity would stand in the shoes of FTA, and therefore, it is within
FTA's discretion to appoint an appropriate person to serve as a PO.
This internal decision is not subject to notice and comment. Even so,
we note that a PO will be appointed only in those rare cases where a
complaint warrants a hearing. A PO will not review initial complaints.
That function will be performed by the Office of Chief Counsel in
headquarters. In the event that a PO is appointed to conduct a hearing,
the PO's recommended decision will have to be adopted by the Chief
Counsel's Office.
To address the comments received, we modified the language with
respect to a PO to indicate that a PO will be appointed for hearing
purposes only, and, regarding qualifications, we have added language
that the official or agency representative appointed to preside as a PO
shall be a person who has had no previous contact with the parties
concerning the issue in the proceeding.
Section 604.35--Separation of functions
This section requires that FTA personnel involved in proceedings
under this subpart must not be involved with other matters relating to
the same case.
Public transit agencies raised a concern that ``could one FTA
attorney prosecute a complaint before another FTA attorney? The
internal inconsistency appears based on the iterative nature of the
drafting process. Both sections of the rule clearly place
responsibility for prosecution of any complaint on the complainant.''
In addition, several transit agencies asked the question of who bears
the costs of litigation before a PO: ``FTA has created a substantial
quasi-judicial forum and process that will almost certainly be
expensive to comply with. Who will be responsible for litigation
costs?''
Agency Response: Addressing the last comment first, as with all
litigation, and as is the case under the old charter service
regulation, the parties each bear its litigation costs. As noted
earlier, FTA will appoint a PO. In addition, FTA will provide a
suitable location to hold a hearing and hire a court reporter to
transcribe the proceedings. As in most cases, a transcript becomes a
matter of public record, and, therefore, would be available to all
parties after the proceeding. If a party wishes to expedite
transcription, then that party would bear the additional expense of an
expedited transcript.
While these new hearing procedures may appear ``substantial'' in
comparison to the existing hearing procedures, which are nonexistent,
the procedures set out in the new rule set out a basic framework for
conducting a hearing. The new provisions cover all of the basics of a
hearing in the rare event that one is necessary.
Section 604.41--Standard of Proof
This section sets out the standard of proof that must be met during
a hearing and before a PO can rule in favor of a party.
An east coast transit agency recommended that the standard of proof
should not be ``substantial evidence'' rather it should be ``a
preponderance of the reliable and probative evidence contained in the
record and is in accordance with the law.''
Agency Response: After considering the comments received on this
point, we agree that a preponderance of the evidence standard is more
consistent with other administrative proceedings. We have amended this
section accordingly.
Section 604.42--Burden of Proof
This section sets out the burden of proof in a hearing asserting
noncompliance with this Part.
A transportation association submitted a comment that this section
does not give an ``indication of what affirmative defense might be
available in the complaint process. FTA must clarify when it feels a
complainant no longer
[[Page 2343]]
carries the burden of proof in its administrative proceedings.''
Agency Response: In response to this comment, we have set out the
burden of proof for a complaint as: ``A complainant must show by a
preponderance of the evidence that a recipient provided charter
service, as defined in this Part, and that such service did not fall
within one of the exemptions or exceptions contained in this Part.'' If
the complainant meets this burden, then the burden shifts to the
recipient to demonstrate, by a preponderance of the evidence, that the
service provided was authorized under the charter service regulations.
Providing this burden shifting clarification should address the
commentor's concern and, therefore, we have removed the affirmative
defenses subparagraph.
Section 604.47--Remedies
This section set out the remedies that FTA may pursue if a
recipient is found in noncompliance with this Part.
We heard from public transit agencies on a variety of issues
regarding this section. First, some recipients asserted that FTA has no
statutory authority to order a recipient to refund funds to the U.S.
Treasury. Another argument is that FTA can only withhold a portion of
funds if a pattern of violations is found. Further, others stated that
remedies should only be ordered for violations of the same provisions
and not dissimilar provisions. A private charter operator pointed out
that ``shall mitigate the remedy'' should be ``may mitigate the
remedy.'' Another comment submitted requested that FTA include a
provision indicating where the funds will go. Others urged FTA to be
reasonable in assessing remedies because any withdrawal of funds from a
public transit agency will mean a lessening of public transit services.
Another comment submitted requested that FTA provide a range of
remedies so as to provide public transit agencies with an idea of how a
violation of this Part will result in a certain amount of withheld
funds.
Agency Response: We agree with the comment stating that we could
not order a recipient to refund funds to the Treasury. Therefore, we
have removed this as a potential remedy. Also in response to comments
received from public transit agencies, we added the fact that FTA may
pursue as a remedy the suspension and/or debarment of a recipient, its
employees and contractors, for a violation of the charter service
regulation.
Further, we believe that we do have the authority to withhold funds
for a single violation of this Part. Comments on this topic do not take
into account the statutory provision on remedies. Specifically, the
statute provides: ``If the Secretary decides that a violation has
occurred, the Secretary shall correct the violation under terms of the
agreement.'' 49 U.S.C. 5323((d)(2)(B). The agreement referenced in the
statute is the Master Agreement and the terms and conditions that all
recipients agree to in order to receive financial assistance from FTA.
(See Master Agreement, Section 11--Right of Federal Government to
Terminate: ``Upon written notice, the Recipient agrees that the Federal
Government may suspend or terminate all or any part of the Federal
assistance to be provided if the Recipient has violated the terms of
the Grant Agreement or Cooperative Agreement for the Project including
this Master Agreement * * *.'') Thus, under the terms of the agreement,
FTA can withhold financial assistance for a single violation of the
charter service regulations. We view the new statutory provision as
direction from Congress that Federal financial assistance must be
withheld if a pattern of violations is found. In contrast, previously
under the Master Agreement, FTA had the discretion to determine whether
to withhold Federal financial assistance for a pattern of violations.
Now the Master Agreement reflects the new statutory provision regarding
``Additional Remedies,'' which states FTA ``shall bar a recipient or an
operator from receiving Federal transit assistance in an amount the
Secretary considers appropriate if the Secretary finds a pattern of
violation of the agreement.'' 49 U.S.C. 5323(d)(2)C). We view the
``Additional Remedies'' section of SAFETEA-LU to mean that this remedy
is in addition to the remedies specified in the Master Agreement. We
therefore adopt these remedies as proposed.
In response to the concern that the violations must be similar in
nature in order to constitute a pattern of violations, we believe this
concern has merit. It is FTA's intention to view paperwork violations
differently from service violations. Thus, we have clarified in the
final rule that only unauthorized service violations can be counted
toward a pattern of violations. In determining the remedy to be
applied, however, we will consider whether the violation is service,
paperwork, or reporting.
We also believe that the examination period of six years is
appropriate to determine a pattern or practice. For urbanized area
recipients, FTA conducts triennial reviews of compliance with FTA
requirements. The six year period allows FTA to look at findings in two
consecutive compliance reviews. The six year period will provide a true
picture as to whether a public transit agency consistently violates the
charter service regulations. Moreover, we know that a vast majority of
transit agencies diligently comply with the charter service
regulations. So, we doubt there will be many cases in which this
provision will come into play.
We also want to respond to the private charter companies' concern
that a single complaint could establish a pattern of violations. We
believe that a single instance of unauthorized charter service cannot
establish a pattern of violations. If a public transit agency provides
unauthorized charter service for the flower show, then that is one
instance of unauthorized charter service even though the flower show
lasts for one week. In other words, multiple days of unauthorized
charter service for a single event does not establish a pattern or
practice of violating the charter service regulations. A complaint may,
however, include several distinct instances of potential charter
violations. In that case, the several distinct violations mentioned in
the single complaint could form a basis for a finding of a pattern.
That being said, with the addition of a cease and desist provision
to the final rule, registered charter providers can protect their
interests in advance of an event. In addition, we will consider the
issuance of a cease and desist order as an aggravating factor--if the
recipient ignores the order and provides the service despite the
issuance of a cease and desist order--in determining the amount of
remedy to apply.
Public transit agencies also wanted to know where the withheld
funds will go if FTA finds a violation of the charter service
regulations. If FTA finds a violation of the charter service
regulations, FTA will make every effort to ensure that the funds may be
used by other recipients for transit services. For example, in
instances where there are multiple recipients in a large urbanized
area, FTA could withhold funds from the violating transit agency, while
still allowing the funds to flow to other transit providers in the same
urbanized area to which the funds were apportioned. For funds
apportioned to the State for small urbanized areas, FTA could penalize
one recipient while still allowing the Governor to allocate the funds
to other urbanized areas in the State. Similarly, if a rural transit
system were penalized for violations of the charter rule, the State
could allocate the funds to other rural transit systems. In
[[Page 2344]]
an instance where the violator was the only eligible recipient, formula
funds would ultimately lapse and be reallocated in a subsequent
apportionment among all areas. Funds de-obligated from a grant, as a
penalty, after their lapse date, would be similarly reapportioned.
Finally, we agree with the comments requesting notice of the range
of penalties that may be applied for a violation. We have created a new
Appendix D that contains a matrix of a range of potential remedies.
While each case is fact specific and FTA will decide what remedy to
apply on a case-by-case basis, this matrix provides guidance to
recipients as to what FTA may withhold.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
This rulemaking is not a significant regulatory action within the
meaning of Executive Order 12866, and, therefore, this rulemaking was
not reviewed by the Office of Management and Budget. Further, this rule
is not significant under Department of Transportation regulatory
policies and procedures. This final rule contains revisions that are
clarifying in nature. Where possible, we have adopted provisions to
lessen the burden on public transit agencies while ensuring that those
entities do not engage in unfair competition with private charter
operators.
This rule is not anticipated to adversely affect, in a material
way, any sector of the economy. This rulemaking clarifies and sets
forth provisions to protect private charter operators from unfair
competition by public transit agencies; the changes should increase
opportunities for private charter operators when the requested service
is not subject to one of the community-based exceptions. Likewise, we
have adopted provisions to be the least burdensome on small transit
agencies--many of these agencies are now exempted from the rule's
reporting requirements when they provide charter services in accordance
with program purposes, as defined in the regulation, under 49 U.S.C.
5310, 5311, 5316, and 5317. In addition, this proposed rule would not
create a serious inconsistency with any other agency's action or
materially alter the budgetary impact of any entitlements, grants, user
fees, or loan programs. Consequently, a full regulatory evaluation is
not required.
FTA estimates the costs associated with this rule to be minimal.
This rule simply clarifies existing procedures and sets out more
efficient procedures for reporting, registration, and notification. The
only costs we have identified for this rulemaking are the training
costs to familiarize employees with the FTA Charter Registration Web
site so that they can properly find the registered charter providers in
their geographic service areas. Even so, FTA will provide training
manuals for a recipient's use, which should further minimize a
recipient's training costs.
Regulatory Flexibility Act
When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (RFA) requires the agency to ``prepare and make
available for public comment an initial regulatory flexibility
analysis,'' which will ``describe the impact of the proposed rule on
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an
agency to certify a rule, in lieu of preparing an analysis, if the
proposed rulemaking is not expected to have a significant economic
impact on a substantial number of small entities.
The nature of this rulemaking is to prevent unfair competition by
public transit agencies with private charter operators. We have added
provisions that are also supportive of small governmental entities.
Thus, any economic impact on small entities will be a positive one. FTA
hereby certifies that the final rule for the charter service regulation
will not have a significant economic impact on a substantial number of
small entities.
Unfunded Mandates Reform Act of 1995
This proposed rule would not impose unfunded mandates as defined by
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22,
1995, 109 Stat. 48). This final rule will not result in the expenditure
of non-Federal funds by State, local, and Tribal governments, in the
aggregate, or by the private sector, of $120.7 million in any one year
(2 U.S.C. 1532).
Executive Order 13132 (Federalism)
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132, and FTA has determined
that the final rule would not have sufficient federalism implications
to warrant the preparation of a Federalism assessment. FTA has also
determined that this final rule would not preempt any State law or
regulation or affect the States' ability to discharge traditional State
governmental functions.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), Federal agencies must obtain approval from the Office of
Management and Budget (OMB) for each collection of information they
conduct, sponsor, or require through regulations.
FTA has an existing approved information collection (OMB Control
Number 2132-0543) that expires on January 31, 2008. FTA has determined
that the revisions in this final rule will require an update to the
information collection request. However, FTA believes there will be a
decrease in burden hours per submission because of the use of
electronic technology.
Executive Order 13175 (Tribal Consultation)
FTA has analyzed this action under Executive Order 13175, dated
November 6, 2000, and believes that the final rule does not have
substantial direct effects on one or more Indian Tribes; does not
impose substantial direct compliance costs on Indian Tribal
governments; and does not preempt Tribal laws. Therefore, a Tribal
summary impact statement is not required.
Executive Order 13211 (Energy Effects)
We have analyzed this action under Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use,'' dated May 18, 2001. We have determined that
this final rule is not a significant energy action under that order and
is not likely to have a significant adverse effect on the supply,
distribution, or use of energy. Therefore, a Statement of Energy
Effects is not required.
Distribution Tables
For ease of reference, we provide a distribution table to indicate
changes in section numbering and titles.
Section Title and Number
----------------------------------------------------------------------------------------------------------------
New section (Subpart
Old section (Subpart A) A)
----------------------------------------------------------------------------------------------------------------
Purpose........................... Sec. 604.1.............. Purpose.............. Sec. 604.1
[[Page 2345]]
Applicability..................... Sec. 604.3.............. Applicability........ Sec. 604.2
Definitions....................... Sec. 604.5.............. Definitions.......... Sec. 604.3
Charter Agreement................. Sec. 604.7.............. Charter Agreement.... Sec. 604.4
Charter Service................... Sec. 604.9.............. Exceptions........... (Subpart B)
Sec. 604.9(a)........... ..................... Sec. 604.9
Sec. 604.9(b)(1)........ ..................... removed
Sec. 604.9(b)(2)........ ..................... Sec. 604.8
Sec. 604.9(b)(3)........ ..................... Sec. 604.11
Sec. 604.9(b)(4)........ ..................... Sec. 604.11
Sec. 604.9(b)(5)........ ..................... Sec. 604.7
Sec. 604.9(b)(6)........ ..................... removed
Sec. 604.9(b)(7)........ ..................... Sec. 604.10
Sec. 604.9(b)(8)........ ..................... removed
Procedures for determining if Sec. 604.11............. ..................... (Subpart C)
there are any willing and able
private charter operators.
Registration of Sec. 604.16
private charter
operators.
Reviewing evidence submitted by Sec. 604.13............. ..................... removed
private charter operators.
Procedures for (Subpart D)
Registration of
Qualified Human
Services
Organizations and
Duties for
Recipients Regarding
Charter Registration
Web site.
Advisory Opinions and (Subpart E)
Cease and Desist
Orders.
Filing a complaint................ (Subpart B)............... Complaints........... (Subpart F)
Sec. 604.15(a).......... ..................... Sec. 604.27(a)
Sec. 604.15(b).......... ..................... removed
Sec. 604.15(c).......... ..................... Sec. 604.27(b)
Sec. 604.15(d).......... ..................... Sec. 604.27(c)
Sec. 604.15(e).......... ..................... Sec. 604.34 or 46
Sec. 604.15(f).......... ..................... Sec. 604.32 or 33
Investigations....... (Subpart G)
FTA Initial Decisions (Subpart H)
and Referrals to a
Presiding Official
(PO).
Sec. 604.15(g).......... ..................... (Subpart I)
Sec. 604.36
Sec. 604.15(h).......... ..................... Sec. 604.37
Sec. 604.15(i).......... ..................... Sec. 604.45
Remedies.......................... Sec. 604.17............. Remedies............. Sec. 604.47
Appeal to (Subpart J)
Administrator and
final agency orders.
Appeals........................... Sec. 604.19(a).......... ..................... Sec. 604.48(a)
Sec. 604.19(b).......... ..................... Sec. 604.48(b)
Sec. 604.19(c).......... ..................... Sec. 604.48(c)
Sec. 604.19(d).......... ..................... Sec. 604.48(a)
Sec. 604.19(e).......... ..................... Sec. 604.48(b)
Judicial Review................... Sec. 604.21............. ..................... (Subpart K)
Sec. 604.50
----------------------------------------------------------------------------------------------------------------
List of Subjects in 49 CFR Part 604
Administrative practice and procedure, Charter service, Mass
transportation.
0
In consideration of the foregoing, FTA amends chapter VI of title 49 of
the Code of Federal Regulations as set forth below:
Title 49--Transportation
0
1. Revise part 604 to read as follows:
PART 604--CHARTER SERVICE
Subpart A--General Provisions
Sec.
604.1 Purpose.
604.2 Applicability.
604.3 Definitions.
604.4 Charter service agreement.
Subpart B--Exceptions
604.5 Purpose.
604.6 Government officials on official government business.
604.7 Qualified human service organizations.
604.8 Leasing FTA funded equipment and drivers.
604.9 When no registered charter provider responds to notice from a
recipient.
604.10 Agreement with registered charter providers.
604.11 Petitions to the administrator.
604.12 Reporting requirements for all exceptions.
Subpart C--Procedures for Registration and Notification
604.13 Registration of private charter operators.
604.14 Recipient's notification to registered charter providers.
Subpart D--Registration of Qualified Human Service Organizations and
Duties for Recipients With Respect to Charter Registration Web Site
604.15 Registration of qualified human services organizations.
604.16 Duties for recipients with respect to Charter Registration
Web site.
Subpart E--Advisor Opinions and Cease and Desist Orders
604.17 Purpose.
604.18 Request for an advisory opinion.
604.19 Processing of advisory opinions.
604.20 Effect of an advisory opinion.
604.21 Special considerations for advisory opinions.
604.22 Request for a cease and desist order.
604.23 Effect of a cease and desist order.
604.24 Decisions by the Chief Counsel regarding cease and desist
orders.
[[Page 2346]]
Subpart F--Complaints
604.25 Purpose.
604.26 Complaints and decisions regarding removal of private charter
operators or qualified human service organizations from registration
list.
604.27 Complaints, answers, replies, and other documents.
604.28 Dismissals.
604.29 Incomplete complaints.
604.30 Filing complaints.
604.31 Service.
Subpart G--Investigations
604.32 Investigation of complaint.
604.33 Agency initiation of investigation.
Subpart H--Decisions by FTA and Appointment of a Presiding Official
(PO)
604.34 Chief Counsel decisions and appointment of a PO.
604.35 Separation of functions.
Subpart I--Hearings
604.36 Powers of a PO.
604.37 Appearances, parties, and rights of parties.
604.38 Discovery.
604.39 Deposition.
604.40 Public disclosure of evidence.
604.41 Standard of proof.
604.42 Burden of proof.
604.43 Offer of proof.
604.44 Record.
604.45 Waiver of procedures.
604.46 Recommended decision by a PO.
604.47 Remedies.
Subpart J--Appeal to Administrator and Final Agency Orders
604.48 Appeal from Chief Counsel decision.
604.49 Administrator's discretionary review of the Chief Counsel's
decision.
Subpart K--Judicial Review
604.50 Judicial review of a final decision and order.
Appendix A to Part 604 --Listing of Human Service Federal Financial
Assistance Programs
Appendix B to Part 604--Basis for Removal From Charter Registration
Web site
Appendix C to Part 604--Charter Service Questions and Answers
Appendix D to Part 604--Matrix of Remedies for Violations
Subpart A--General provisions.
Sec. 604.1 Purpose.
(a) The purpose of this part is to implement 49 U.S.C. 5323(d),
which protects private charter operators from unauthorized competition
from recipients of Federal financial assistance under the Federal
Transit Laws.
(b) This subpart specifies which entities shall comply with the
charter service regulations; defines terms used in this part; explains
procedures for an exemption from this part; and sets out the contents
of a charter service agreement.
Sec. 604.2 Applicability.
(a) The requirements of this part shall apply to recipients of
Federal financial assistance under the Federal Transit Laws, except as
otherwise provided in paragraphs (b) through (g) of this section.
(b) The requirements of this part shall not apply to a recipient
transporting its 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 its geographic service area or proposed
geographic service area for the purpose of conducting oversight
functions such as inspection, evaluation, or review.
(c) The requirements of this part shall not apply to private
charter operators that receive, directly or indirectly, Federal
financial assistance under section 3038 of the Transportation Equity
Act for the 21st Century, as amended, or to the non-FTA funded
activities of private charter operators that receive, directly or
indirectly, FTA financial assistance under any of the following
programs: 49 U.S.C. 5307, 49 U.S.C. 5309, 49 U.S.C. 5310, 49 U.S.C.
5311, 49 U.S.C. 5316, or 49 U.S.C. 5317.
(d) The requirements of this part shall not apply to a recipient
transporting its 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.
(e) The requirements of this part shall not apply to a recipient
that uses Federal financial assistance from FTA, for program purposes
only, under 49 U.S.C. 5310, 49 U.S.C. 5311, 49 U.S.C. 5316, or 49
U.S.C. 5317.
(f) The requirements of this part shall not apply to a recipient,
for actions directly responding to an emergency declared by the
President, governor, or mayor or in an emergency requiring immediate
action prior to a formal declaration. If the emergency lasts more than
45 days, the recipient shall follow the procedures set out in subpart D
of 49 CFR 601.
(g) The requirements of this part shall not apply to a recipient in
a non-urbanized area transporting its employees, other transit system
employees, transit management officials, and transit contractors and
bidders to or from transit training outside its geographic service
area.
Sec. 604.3 Definitions.
All terms defined in 49 U.S.C. 5301 et seq. are used in their
statutory meaning in this part. Other terms used in this part are
defined as follows:
(a) ``Federal Transit Laws'' means 49 U.S.C. 5301 et seq., and
includes 23 U.S.C. 103(e)(4), 142(a), and 142(c), when used to provide
assistance to public transit agencies for purchasing buses and vans.
(b) ``Administrator'' means the Administrator of the Federal
Transit Administration or his or her designee.
(c) ``Charter service'' means, but does not include demand response
service to individuals:
(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. The following features may be characteristic of charter service:
(i) A third party pays the transit provider 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.
(d) ``Charter service hours'' means total hours operated by buses
or vans while in charter service including:
(1) Hours operated while carrying passengers for hire, plus
(2) Associated deadhead hours.
(e) ``Chief Counsel'' means the Chief Counsel of FTA and his or her
designated employees.
(f) ``Days'' means calendar days. The last day of a time period is
included in the computation of time unless the last day is a Saturday,
Sunday, or legal holiday, in which case, the time period runs until the
end of the next day that is not a Saturday, Sunday, or legal holiday.
(g) ``Demand response'' means any non-fixed route system of
transporting individuals that requires advanced scheduling by the
customer, including services provided by public entities, nonprofits,
and private providers.
(h) ``Exclusive'' means service that a reasonable person would
conclude is intended to exclude members of the public.
[[Page 2347]]
(i) ``FTA'' means the Federal Transit Administration.
(j) ``Geographic service area'' means the entire area in which a
recipient is authorized to provide public transportation service under
appropriate local, state, and Federal law.
(k) ``Government official'' means an individual elected or
appointed at the local, state, or Federal level.
(l) ``Interested party'' means an individual, partnership,
corporation, association, or other organization that has a financial
interest that is affected by the actions of a recipient providing
charter service under the Federal Transit Laws. This term includes
states, counties, cities, and their subdivisions, and tribal nations.
(m) ``Pattern of violations'' means more than one finding of
unauthorized charter service under this part by FTA beginning with the
most recent finding of unauthorized charter service and looking back
over a period not to exceed 72 months.
(n) ``Presiding Official'' means an official or agency
representative who conducts a hearing at the request of the Chief
Counsel and who has had no previous contact with the parties concerning
the issue in the proceeding.
(o) ``Program purposes'' means transportation that serves the needs
of either human service agencies or targeted populations (elderly,
individuals with disabilities, and or low income individuals); this
does not include exclusive service for other groups formed for purposes
unrelated to the special needs of the targeted populations identified
herein.
(p) ``Public transportation'' has the meaning set forth in 49
U.S.C. 5302(a)(10).
(q) ``Qualified human service organization'' means an organization
that serves persons who qualify for human service or transportation-
related programs or services due to disability, income, or advanced
age. This term is used consistent with the President's Executive Order
on Human Service Transportation Coordination (February 24, 2004).
(r) ``Recipient'' means an agency or entity that receives Federal
financial assistance, either directly or indirectly, including
subrecipients, under the Federal Transit Laws. This term does not
include third-party contractors who use non-FTA funded vehicles.
(s) ``Registered charter provider'' means a private charter
operator that wants to receive notice of charter service requests
directed to recipients and has registered on FTA's charter registration
Web site.
(t) ``Registration list'' means the current list of registered
charter providers and qualified human service organizations maintained
on FTA's charter registration Web site.
(u) ``Special transportation'' means demand response or paratransit
service that is regular and continuous and is a type of ``public
transportation.''
(v) ``Violation'' means a finding by FTA of a failure to comply
with one of the requirements of this Part.
Sec. 604.4 Charter service agreement.
(a) A recipient seeking Federal assistance under the Federal
Transit Laws to acquire or operate any public transportation equipment
or facilities shall enter into a ``Charter Service Agreement'' as set
out in paragraph (b) of this section.
(b) A recipient shall enter into a Charter Service Agreement if it
receives Federal funds for equipment or facilities under the Federal
Transit Laws. The terms of the Charter Service Agreement are as
follows: ``The recipient agrees that it, and each of its subrecipients,
and third party contractors at any level who use FTA-funded vehicles,
may provide charter service using equipment or facilities acquired with
Federal assistance authorized under the Federal Transit Laws only in
compliance with the regulations set out in 49 CFR 604, the terms and
conditions of which are incorporated herein by reference.''
(c) The Charter Service Agreement is contained in the
Certifications and Assurances published annually by FTA for applicants
for Federal financial assistance. Once a recipient receives Federal
funds, the Certifications and Assurances become part of its Grant
Agreement or Cooperative Agreement for Federal financial assistance.
Subpart B--Exceptions
Sec. 604.5 Purpose.
The purpose of this subpart is to identify the limited exceptions
under which recipients may provide community-based charter services.
Sec. 604.6 Government officials on official government business.
(a) A recipient may provide charter service to government officials
(Federal, State, and local) for official government business, which can
include non-transit related purposes, if the recipient:
(1) Provides the service in its geographic service area;
(2) Does not generate revenue from the charter service, except as
required by law; and
(3) After providing such service, records the following:
(i) The government organization's name, address, phone number, and
e-mail address;
(ii) The date and time of service;
(iii) The number of passengers (specifically noting the number of
government officials on the trip);
(iv) The origin, destination, and trip length (miles and hours);
(v) The fee collected, if any; and
(vi) The vehicle number for the vehicle used to provide the
service.
(b) A recipient that provides charter service under this section
shall be limited annually to 80 charter service hours for providing
trips to government officials for official government business.
(c) A recipient may petition the Administrator for additional
charter service hours only if the petition contains the following
information:
(1) Date and description of the official government event and the
number of charter service hours requested;
(2) Explanation of why registered charter providers in the
geographic service area cannot perform the service (e.g., equipment,
time constraints, or other extenuating circumstances); and
(3) Evidence that the recipient has sent the request for additional
hours to registered charter providers in its geographic service area.
(d) FTA shall post the request for additional charter service hours
under this exception in the Government Officials Exception docket,
docket number FTA-2007-0020 at http://www.regulations.gov. Interested
parties may review the contents of this docket and bring questions or
concerns to the attention of the Ombudsman for Charter Services. The
written decision of the Administrator regarding the request for
additional charter service hours shall be posted in the Government
Officials Exception docket and sent to the recipient.
Sec. 604.7 Qualified human service organizations.
(a) A recipient may provide charter service to a qualified human
service organization (QHSO) for the purpose of serving persons:
(1) With mobility limitations related to advanced age;
(2) With disabilities; or
(3) With low income.
(b) If an organization serving persons described in paragraph (a)
of this section receives funding, directly or indirectly, from the
programs listed in Appendix A of this part, the QHSO shall not be
required to register on the FTA charter registration Web site.
(c) If a QHSO serving persons described in paragraph (a) of this
[[Page 2348]]
section does not receive funding from any of the programs listed in
Appendix A of this part, the QHSO shall register on the FTA charter
registration Web site in accordance with Sec. 604.15.
(d) A recipient providing charter service under this exception,
whether or not the QHSO receives funding from Appendix A programs, and
after providing such charter service, shall record:
(1) The QHSO's name, address, phone number, and e-mail address;
(2) The date and time of service;
(3) The number of passengers;
(4) The origin, destination, and trip length (miles and hours);
(5) The fee collected, if any; and
(6) The vehicle number for the vehicle used to provide the service.
Sec. 604.8 Leasing FTA funded equipment and drivers.
(a) A recipient may lease its FTA-funded equipment and drivers to
registered charter providers for charter service only if the following
conditions exist:
(1) The private charter operator is registered on the FTA charter
registration Web site;
(2) The registered charter provider owns and operates buses or vans
in a charter service business;
(3) The registered charter provider received a request for charter
service that exceeds its available capacity either of the number of
vehicles operated by the registered charter provider or the number of
accessible vehicles operated by the registered charter provider; and
(4) The registered charter provider has exhausted all of the
available vehicles of all registered charter providers in the
recipient's geographic service area.
(b) A recipient leasing vehicles and drivers to a registered
charter provider under this provision shall record:
(1) The registered charter provider's name, address, telephone
number, and e-mail address;
(2) The number of vehicles leased, types of vehicles leased, and
vehicle identification numbers; and
(3) The documentation presented by the registered charter provider
in support of paragraphs (a)(1) through (4) of this section.
(c) In accordance with Sec. 604.26, if a registered charter
provider seeking to lease vehicles has filed a complaint requesting
that another registered charter provider be removed from the FTA
charter registration Web site, then the registered charter provider
seeking to lease vehicles is not required to exhaust the vehicles from
that registered charter provider while the complaint is pending before
leasing vehicles from a recipient.
Sec. 604.9 When no registered charter provider responds to notice
from a recipient.
(a) A recipient may provide charter service, on its own initiative
or at the request of a third party, if no registered charter provider
responds to the notice issued in Sec. 604.14:
(1) Within 72 hours for charter service requested to be provided in
less than 30 days; or
(2) Within 14 calendar days for charter service requested to be
provided in 30 days or more.
(b) A recipient shall not provide charter service under this
section if a registered charter provider indicates an interest in
providing the charter service set out in the notice issued pursuant to
Sec. 604.14 and the registered charter provider has informed the
recipient of its interest in providing the service.
(c) After providing the service, a recipient shall record:
(1) The group's name, address, phone number, and e-mail address;
(2) The date and time of service;
(3) The number of passengers;
(4) The origin, destination, and trip length (miles and hours);
(5) The fee collected, if any; and
(6) The vehicle number for the vehicle used to provide the service.
Sec. 604.10 Agreement with registered charter providers.
(a) A recipient may provide charter service directly to a customer
consistent with an agreement entered into with all registered charter
providers in the recipient's geographic service area.
(b) If a new charter provider registers in the geographic service
area subsequent to the initial agreement, the recipient may continue to
provide charter service under the previous agreement with the other
charter providers up to 90 days without an agreement with the newly
registered charter provider.
(c) Any of the parties to an agreement may cancel the agreement at
any time after providing the recipient a 90-day notice.
Sec. 604.11 Petitions to the Administrator.
(a) A recipient may petition the Administrator for an exception to
the charter service regulations to provide charter service directly to
a customer for:
(1) Events of regional or national significance;
(2) Hardship (only for non-urbanized areas under 50,000 in
population or small urbanized areas under 200,000 in population); or
(3) Unique and time sensitive events (e.g., funerals of local,
regional, or national significance) that are in the public's interest.
(b) The petition to the Administrator shall include the following
information:
(1) The date and description of the event;
(2) The type of service requested and the type of equipment;
(3) The anticipated number of charter service hours needed for the
event;
(4) The anticipated number of vehicles and duration of the event;
and
(i) For an event of regional or national significance, the petition
shall include a description of how registered charter providers were
consulted, how registered charter providers will be utilized in
providing the charter service, a certification that the recipient has
exhausted all of the registered charter providers in its geographic
service area, and submit the petition at least 90 days before the first
day of the event described in paragraph (b)(1) of this section;
(ii) For a hardship request, a petition is only available if the
registered charter provider has deadhead time that exceeds total trip
time from initial pick-up to final drop-off, including wait time. The
petition shall describe how the registered charter provider's minimum
duration would create a hardship on the group requesting the charter
service; or
(iii) For unique and time sensitive events, the petition shall
describe why the event is unique or time sensitive and how providing
the charter service would be in the public's interest.
(c) Upon receipt of a petition that meets the requirements set
forth in paragraph (b) of this section, the Administrator shall review
the materials and issue a written decision denying or granting the
request in whole or in part. In making this decision, the Administrator
may seek such additional information as the Administrator deems
necessary. The Administrator's decision shall be filed in the Petitions
to the Administrator docket, number FTA-2007-0022 at http://www.regulations.gov and sent to the recipient.
(d) Any exception granted by the Administrator under this section
shall be effective only for the event identified in paragraph (b)(1) of
this section.
(e) A recipient shall send its petition to the Administrator by
facsimile to (202) 366-3809 or by e-mail to
[email protected].
(f) A recipient shall retain a copy of the Administrator's approval
for a period of at least three years and shall include it in the
recipient's quarterly report posted on the charter registration Web
site.
[[Page 2349]]
Sec. 604.12 Reporting requirements for all exceptions.
(a) A recipient that provides charter service in accordance with
one or more of the exceptions contained in this subpart shall maintain
the required notice and records in an electronic format for a period of
at least three years from the date of the service or lease. A recipient
may maintain the required records in other formats in addition to the
electronic format.
(b) In addition to the requirements identified in paragraph (a) of
this section, the records required under this subpart shall include a
clear statement identifying which exception the recipient relied upon
when it provided the charter service.
(c) Beginning on July 30, 2008, a recipient providing charter
service under these exceptions shall post the records required under
this subpart on the FTA charter registration Web site 30 days after the
end of each calendar quarter (i.e., January 30th, April 30th, July
30th, and October 30th). A single document or charter log may include
all charter service trips provided during the quarter.
(d) A recipient may exclude specific origin and destination
information for safety and security reasons. If a recipient excludes
such information, the record of the service shall describe the reason
why such information was excluded and provide generalized information
instead of providing specific origin and destination information.
Subpart C--Procedures for Registration and Notification
Sec. 604.13 Registration of private charter operators.
(a) Private charter operators shall provide the following
information at http://www.fta.dot.gov/laws/leg_reg_179.html to be
considered a registered charter provider:
(1) Company name, address, phone number, e-mail address, and
facsimile number;
(2) Federal and, if available, state motor carrier identifying
number;
(3) The geographic service areas of public transit agencies, as
identified by the transit agency's zip code, in which the private
charter operator intends to provide charter service;
(4) The number of buses or vans the private charter operator owns;
(5) A certification that the private charter operator has valid
insurance; and
(6) Whether willing to provide free or reduced rate charter
services to registered qualified human service organizations.
(b) A private charter operator that provides valid information in
this subpart is a ``registered charter provider'' for purposes of this
part and shall have standing to file a complaint consistent with
subpart F.
(c) A recipient, a registered charter provider, or their duly
authorized representative, may challenge a registered charter
provider's registration and request removal of the private charter
operator from FTA's charter registration Web site by filing a complaint
consistent with subpart F.
(d) FTA may refuse to post a private charter operator's information
if the private charter operator fails to provide all of the required
information as indicated on the FTA charter registration Web site.
(e) A registered charter provider shall provide current and
accurate information on FTA's charter registration Web site, and shall
update that information no less frequently than every two years.
Sec. 604.14 Recipient's notification to registered charter providers.
(a) Upon receiving a request for charter service, a recipient may:
(1) Decline to provide the service, with or without referring the
requestor to FTA's charter registration Web site (http://www.fta.dot.gov/laws/leg_reg_179.html);
(2) Provide the service under an exception provided in subpart B of
this part; or
(3) Provide notice to registered charter providers as provided in
this section and provide the service pursuant to Sec. 604.9.
(b) If a recipient is interested in providing charter service under
the exception contained in Sec. 604.9, then upon receipt of a request
for charter service, the recipient shall provide e-mail notice to
registered charter providers in the recipient's geographic service area
in the following manner:
(1) E-mail notice of the request shall be sent by the close of
business on the day the recipient receives the request unless the
recipient received the request after 2 p.m., in which case the
recipient shall send the notice by the close of business the next
business day;
(2) E-mail notice sent to the list of registered charter providers
shall include:
(i) Customer name, address, phone number, and e-mail address (if
available);
(ii) Requested date of service;
(iii) Approximate number of passengers;
(iv) Whether the type of equipment requested is (are) bus(es) or
van(s); and
(v) Trip itinerary and approximate duration; and
(3) If the recipient intends to provide service that meets the
definition of charter service under Sec. 604.3(c)(2), the e-mail
notice must include the fare the recipient intends to charge for the
service.
(c) A recipient shall retain an electronic copy of the e-mail
notice and the list of registered charter providers that were sent e-
mail notice of the requested charter service for a period of at least
three years from the date the e-mail notice was sent.
(d) If a recipient receives an ``undeliverable'' notice in response
to its e-mail notice, the recipient shall send the notice via
facsimile. The recipient shall maintain the record of the undeliverable
e-mail notice and the facsimile sent confirmation for a period of three
years.
Subpart D--Registration of Qualified Human Service Organizations
and Duties for Recipients With Respect to Charter Registration Web
site
Sec. 604.15 Registration of qualified human service organizations.
(a) Qualified human service organizations (QHSO) that seek free or
reduced rate services from recipients, and do not receive funds from
Federal programs listed in Appendix A, but serve individuals described
in Sec. 604.7 (i.e., individuals with low income, advanced age, or
with disabilities), shall register on FTA's charter registration Web
site by submitting the following information:
(1) Name of organization, address, phone number, e-mail address,
and facsimile number;
(2) The geographic service area of the recipient in which the
qualified human service organization resides;
(3) Basic financial information regarding the qualified human
service organization and whether the qualified human service
organization is exempt from taxation under sections 501(c) (1), (3),
(4), or (19) of the Internal Revenue Code, and whether it is a unit of
Federal, State or local government;
(4) Whether the qualified human service organization receives funds
directly or indirectly from a State or local program, and if so, which
program(s); and
(5) A narrative statement describing the types of charter service
trips the qualified human service organization may request from a
recipient and how that service is consistent with the mission of the
qualified human service organization.
[[Page 2350]]
(b) A qualified human service organization is eligible to receive
charter services from a recipient if it:
(1) Registers on the FTA Web site in accordance with paragraph (a)
of this section at least 60 days before the date of the requested
charter service; and
(2) Verifies FTA's receipt of its registration by viewing its
information on the FTA charter registration Web site (http://www.fta.dot.gov/laws/leg_reg_179.html).
(c) A registered charter provider may challenge a QHSO's status to
receive charter services from a recipient by requesting removal of the
QHSO from FTA's charter registration Web site by filing a complaint
consistent with subpart F.
(d) A QHSO shall provide current and accurate information on FTA's
charter registration Web site, and shall update that information no
less frequently than every two years.
Sec. 604.16 Duties for recipients with respect to charter
registration Web site.
Each recipient shall ensure that its affected employees and
contractors have the necessary competency to effectively use the FTA
charter registration Web site.
Subpart E--Advisory Opinions and Cease and Desist Orders
Sec. 604.17 Purpose.
The purpose of this subpart is to set out the requirements for
requesting an advisory opinion from the Chief Counsel's Office. An
advisory opinion may also request that the Chief Counsel issue a cease
and desist order, which would be an order to refrain from doing an act
which, if done, would be a violation of this part.
Sec. 604.18 Request for an advisory opinion.
(a) An interested party may request an advisory opinion from the
Chief Counsel on a matter regarding specific factual events only.
(b) A request for an advisory opinion shall be submitted in the
following form:
[Date]
Chief Counsel, Federal Transit Administration, 1200 New Jersey Ave.
SE., Room E55-302, Washington, DC 20590
Re: Request for Advisory Opinion
The undersigned submits this request for an advisory opinion from
the FTA Chief Counsel with respect to [the general nature of the
matter involved].
A. A full statement of all facts and legal points relevant to the
request
B. An affirmation that the undersigned swears, to the best of his/
her knowledge and belief, this request includes all data,
information, and views relevant to the matter, whether favorable or
unfavorable to the position of the undersigned, which is the subject
of the request.
C. The following certification: ``I hereby certify that I have this
day served the foregoing [name of document] on the following
interested party(ies) at the following addresses and e-mail or
facsimile numbers (if also served by e-mail or facsimile) by
[specify method of service]:
[list persons, addresses, and e-mail or facsimile numbers]''
Dated this -------- day of ---- , 20----.
[Signature]
[Printed name]
[Title of person making request]
[Mailing address]
[Telephone number]
[e-mail address]
(c) The Chief Counsel may request additional information, as
necessary, from the party submitting the request for an advisory
opinion.
(d) A request for an advisory opinion may be denied if:
(1) The request contains incomplete information on which to base an
informed advisory opinion;
(2) The Chief Counsel concludes that an advisory opinion cannot
reasonably be given on the matter involved;
(3) The matter is adequately covered by a prior advisory opinion or
a regulation;
(4) The Chief Counsel otherwise concludes that an advisory opinion
would not be in the public interest.
Sec. 604.19 Processing of advisory opinions.
(a) A request for an advisory opinion shall be sent to the Chief
Counsel at [email protected], and filed electronically
in the Charter Service Advisory Opinion/Cease and Desist Order docket
number FTA-2007-0023 at http://www.regulations.gov or sent to the
dockets office located at 1200 New Jersey Ave., SE., West Building
Ground Floor, Room W12-140, Washington, DC 20590, for submission to
that docket.
(b) The Chief Counsel shall make every effort to respond to a
request for an advisory opinion within ten days of receipt of a request
that complies with Sec. 604.18(b). The Chief Counsel shall send his or
her decision to the interested party, the docket, and the recipient, if
appropriate.
Sec. 604.20 Effect of an advisory opinion.
(a) An advisory opinion represents the formal position of FTA on a
matter, and except as provided in Sec. 604.25 of this subpart,
obligates the agency to follow it until it is amended or revoked.
(b) An advisory opinion may be used in administrative or court
proceedings to illustrate acceptable and unacceptable procedures or
standards, but not as a legal requirement and is limited to the factual
circumstances described in the request for an advisory opinion. The
Chief Counsel's advisory opinion shall not be binding upon a Presiding
Official conducting a proceeding under subpart I of this part.
(c) A statement made or advice provided by an FTA employee
constitutes an advisory opinion only if it is issued in writing under
this section. A statement or advice given by an FTA employee orally, or
given in writing, but not under this section, is an informal
communication that represents the best judgment of that employee at the
time but does not constitute an advisory opinion, does not necessarily
represent the formal position of FTA, and does not bind or otherwise
obligate or commit the agency to the views expressed.
Sec. 604.21 Special considerations for advisory opinions.
Based on new facts involving significant financial considerations,
the Chief Counsel may take appropriate enforcement action contrary to
an advisory opinion before amending or revoking the opinion. This
action shall be taken only with the approval of the Administrator.
Sec. 604.22 Request for a cease and desist order.
(a) An interested party may also request a cease and desist order
as part of its request for an advisory opinion. A request for a cease
and desist order shall contain the following information in addition to
the information required for an advisory opinion:
(1) A description of the need for the cease and desist order, a
detailed description of the lost business opportunity the interested
party is likely to suffer if the recipient performs the charter service
in question, and how the public interest will be served by avoiding or
ameliorating the lost business opportunity. A registered charter
provider must distinguish its loss from that of other registered
charter providers in the geographic service area.
(2) A detailed description of the efforts made to notify the
recipient of the potential violation of the charter service
regulations. Include names, titles, phone numbers or e-mail addresses
of persons contacted, date and times contact was made, and the response
received, if any.
(b) A request for a cease and desist order may be denied if:
(1) The request contains incomplete information on which to base an
informed a cease and desist order;
(2) The Chief Counsel concludes that a cease and desist order
cannot
[[Page 2351]]
reasonably be given on the matter involved;
(3) The matter is adequately covered by a prior a cease and desist
order; or
(4) The Chief Counsel otherwise concludes that a cease and desist
order would not be in the public interest.
(c) A recipient who is the subject of a request for a cease and
desist order shall have three business days to respond to the request.
The response shall include a point-by-point rebuttal to the information
included in the request for a cease and desist order.
(d) The time period for a response by the recipient begins once a
registered charter provider files a request in the Advisory Opinion/
Cease and Desist Order docket (FTA-2007-0023 at http://www.regulations.gov) or with the FTA Chief Counsel's Office, whichever
date is sooner.
Sec. 604.23 Effect of a cease and desist order.
(a) Issuance of a cease and desist order against a recipient shall
be considered as an aggravating factor in determining the remedy to
impose against the recipient in future findings of noncompliance with
this part, if the recipient provides the service described in the cease
and desist order issued by the Chief Counsel.
(b) In determining whether to grant the request for a cease and
desist order, the Chief Counsel shall consider the specific facts shown
in the signed, sworn request for a cease and desist order, applicable
statutes and regulations, and any other information that is relevant to
the request.
Sec. 604.24 Decisions by the Chief Counsel regarding cease and desist
orders.
(a) The Chief Counsel may grant a request for a cease and desist
order if the interested party demonstrates, by a preponderance of the
evidence, that the planned provision of charter service by a recipient
would violate this part.
(b) In determining whether to grant the request for a cease and
desist order, the Chief Counsel shall consider the specific facts shown
in the signed, sworn request for a cease and desist order, applicable
statutes, regulations, agreements, and any other information that is
relevant to the request.
Subpart F--Complaints
Sec. 604.25 Purpose.
This subpart describes the requirements for filing a complaint
challenging the registration of a private charter operator or qualified
human service organization on the FTA charter registration Web site and
filing a complaint regarding the provision of charter service by a
recipient. Note: To save time and expense for all concerned, FTA
expects all parties to attempt to resolve matters informally before
beginning the official complaint process.
Sec. 604.26 Complaints and decisions regarding removal of private
charter operators or qualified human service organizations from
registration list.
(a) A recipient, a registered charter provider, or its duly
authorized representative, may challenge the listing of a registered
charter provider or qualified human service organization on FTA's
charter registration Web site by filing a complaint that meets the
following:
(1) States the name and address of each entity who is the subject
of the complaint;
(2) Provides a concise but complete statement of the facts relied
upon to substantiate the reason why the private charter operator or
qualified human service organization should not be listed on the FTA
charter registration Web site;
(3) Files electronically by submitting it to the Charter Service
Removal Complaint docket number FTA-2007-0024 at http://www.regulations.gov;
(4) Serves by e-mail or facsimile if no e-mail address is
available, or by overnight mail service with receipt confirmation, and
attaches documents offered in support of the complaint upon all
entities named in the complaint;
(5) Files within 90 days of discovering facts that merit removal of
the registered charter provider or qualified human service organization
from the FTA Charter Registration Web site; and
(6) Contains the following certification:
I hereby certify that I have this day served the foregoing [name of
document] on the following persons at the following addresses and e-
mail or facsimile numbers (if also served by e-mail or facsimile) by
[specify method of service]:
[list persons, addresses, and e-mail or facsimile numbers]
Dated this -------- day of --------, 20----.
[signature], for [party].
(b) The registered charter provider or qualified human service
organization shall have 15 days to answer the complaint and shall file
such answer, and all supporting documentation, in the Charter Service
Removal Complaint docket number FTA-2007-0024 at http://www.regulations.gov and e-mail such answer to
[email protected].
(c) A recipient, qualified human service organization, or a
registered charter provider, or its duly authorized representative,
shall not file a reply to the answer.
(d) FTA shall determine whether to remove the registered charter
provider or qualified human service organization from the FTA charter
registration Web site based on a preponderance of the evidence of one
or more of the following:
(1) Bad faith;
(2) Fraud;
(3) Lapse of insurance;
(4) Lapse of other documentation; or
(5) The filing of more than one complaint, which on its face, does
not state a claim that warrants an investigation or further action by
FTA.
(e) FTA's determination whether or not to remove a registered
charter provider or qualified human service organization from the
registration list shall be sent to the parties within 30 days of the
date of the response required in paragraph (b) of this section and
shall state:
(1) Reasons for allowing the continued listing or removal of the
registered charter provider or qualified human service organization
from the registration list;
(2) If removal is ordered, the length of time (not to exceed three
years) the private charter operator or qualified human service
organization shall be barred from the registration list; and
(3) The date by which the private charter operator or qualified
human service organization may re-apply for registration on the FTA
charter registration Web site.
Sec. 604.27 Complaints, answers, replies, and other documents.
(a) A registered charter provider, or its duly authorized
representative (``complainant''), affected by an alleged noncompliance
of this part may file a complaint with the Office of the Chief Counsel.
(b) Complaints filed under this subpart shall:
(1) Be titled ``Notice of Charter Service Complaint'';
(2) State the name and address of each recipient that is the
subject of the complaint and, with respect to each recipient, the
specific provisions of this part that the complainant believes were
violated;
(2) Be served in accordance with Sec. 604.31, along with all
documents then available in the exercise of reasonable diligence,
offered in support of the complaint, upon all recipients named in the
complaint as being responsible for the alleged action(s) or omission(s)
upon which the complaint is based;
(3) Provide a concise but complete statement of the facts relied
upon to
[[Page 2352]]
substantiate each allegation (complainant must show by a preponderance
of the evidence that the recipient provided charter service and that
such service did not fall within one of the exemptions or exceptions
set out in this part);
(4) Describe how the complainant was directly and substantially
affected by the things done or omitted by the recipients;
(5) Identify each registered charter provider associated with the
complaint; and
(6) Be filed within 90 days after the alleged event giving rise to
the complaint occurred.
(c) Unless the complaint is dismissed pursuant to Sec. 604.28 or
Sec. 604.29, FTA shall notify the complainant, respondent, and state
recipient, if applicable, within 30 days after the date FTA receives
the complaint that the complaint has been docketed. Respondent shall
have 30 days from the date of service of the FTA notification to file
an answer.
(d) The complainant may file a reply within 20 days of the date of
service of the respondent's answer.
(e) The respondent may file a rebuttal within 10 days of the date
of service of the reply.
(f) The answer, reply, and rebuttal shall, like the complaint, be
accompanied by the supporting documentation upon which the submitter
relies.
(g) The answer shall deny or admit the allegations made in the
complaint or state that the entity filing the document is without
sufficient knowledge or information to admit or deny an allegation, and
shall assert any affirmative defense.
(h) The answer, reply, and rebuttal shall each contain a concise
but complete statement of the facts relied upon to substantiate the
answers, admissions, denials, or averments made.
(i) The respondent's answer may include a motion to dismiss the
complaint, or any portion thereof, with a supporting memorandum of
points and authorities.
(j) The complainant may withdraw a complaint at any time after
filing by serving a ``Notification of Withdrawal'' on the Chief Counsel
and the respondent.
Sec. 604.28 Dismissals.
(a) Within 20 days after the receipt of a complaint described in
Sec. 604.27, the Office of the Chief Counsel shall provide reasons for
dismissing a complaint, or any claim in the complaint, with prejudice,
under this section if:
(1) It appears on its face to be outside the jurisdiction of FTA
under the Federal Transit Laws;
(2) On its face it does not state a claim that warrants an
investigation or further action by FTA; or
(3) The complainant lacks standing to file a complaint under
subparts B, C, or D of this part.
(b) [Reserved]
Sec. 604.29 Incomplete complaints.
If a complaint is not dismissed under Sec. 604.28, but is
deficient as to one or more of the requirements set forth in Sec.
604.27, the Office of the Chief Counsel may dismiss the complaint
within 20 days after receiving it. Dismissal shall be without prejudice
and the complainant may re-file after amendment to correct the
deficiency. The Chief Counsel's dismissal shall include the reasons for
the dismissal without prejudice.
Sec. 604.30 Filing complaints.
(a) Filing address. Unless provided otherwise, the complainant
shall file the complaint with the Office of the Chief Counsel, 1200 New
Jersey Ave., SE., Room E55-302, Washington, DC 20590 and file it
electronically in the Charter Service Complaint docket number FTA-2007-
0025 at http://www.regulations.gov or mail it to the docket by sending
the complaint to 1200 New Jersey Ave., SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590.
(b) Date and method of filing. Filing of any document shall be by
personal delivery, U.S. mail, or overnight delivery with receipt
confirmation. Unless the date is shown to be inaccurate, documents to
be filed with FTA shall be deemed filed, on the earliest of:
(1) The date of personal delivery;
(2) The mailing date shown on the certificate of service;
(3) The date shown on the postmark if there is no certificate of
service; or
(4) The mailing date shown by other evidence if there is no
certificate of service and no postmark.
(c) E-mail or fax. A document sent by facsimile or e-mail shall not
constitute service as described in Sec. 604.31.
(d) Number of copies. Unless otherwise specified, an executed
original shall be filed with FTA.
(e) Form. Documents filed with FTA shall be typewritten or legibly
printed. In the case of docketed proceedings, the document shall
include a title and the docket number, as established by the Chief
Counsel or Presiding Official, of the proceeding on the front page.
(f) Signing of documents and other papers. The original of every
document filed shall be signed by the person filing it or the person's
duly authorized representative. Subject to the enforcement provisions
contained in this subpart, the signature shall serve as a certification
that the signer has read the document and, based on reasonable inquiry,
to the best of the signer's knowledge, information, and belief, the
document is:
(1) Consistent with this part;
(2) Warranted by existing law or that a good faith argument exists
for extension, modification, or reversal of existing law; and
(3) Not interposed for any improper purpose, such as to harass or
to cause unnecessary delay or needless increase in the cost of the
administrative process.
Sec. 604.31 Service.
(a) Designation of person to receive service. The initial document
filed by the complainant shall state on the first page of the document
for all parties to be served:
(1) The title of the document;
(2) The name, post office address, telephone number; and
(3) The facsimile number, if any, and e-mail address(es), if any.
If any of the above items change during the proceeding, the person
shall promptly file notice of the change with FTA and the Presiding
Official, if appropriate, and shall serve the notice on all other
parties to the proceeding.
(b) Docket numbers. Each submission identified as a complaint under
this part by the submitting party shall be filed in the Charter Service
Complaint docket FTA-2007-0025.
(c) Who must be served. Copies of all documents filed with FTA
shall be served by the entity filing them on all parties to the
proceeding. A certificate of service shall accompany all documents when
they are tendered for filing and shall certify concurrent service on
FTA and all parties. Certificates of service shall be in substantially
the following form:
I hereby certify that I have this day served the foregoing [name of
document] on the following persons at the following addresses and e-
mail or facsimile numbers (if also served by e-mail or facsimile) by
[specify method of service]:
[list persons, addresses, and e-mail or facsimile numbers]
Dated this -------- day of --------, 20----.
[signature], for [party]
(d) Method of service. Except as otherwise provided in Sec.
604.26, or agreed by the parties and the Presiding Official, as
appropriate, the method of service is personal delivery or U.S. mail.
(e) Presumption of service. There shall be a presumption of lawful
service:
[[Page 2353]]
(1) When acknowledgment of receipt is by a person who customarily
or in the ordinary course of business receives mail at the address of
the party or of the person designated under this section; or
(2) When a properly addressed envelope, sent to the last known
address has been returned as undeliverable, unclaimed, or refused.
Subpart G--Investigations
Sec. 604.32 Investigation of complaint.
(a) If, based on the pleadings, there appears to be a reasonable
basis for investigation, FTA shall investigate the subject matter of
the complaint.
(b) The investigation may include a review of written submissions
or pleadings of the parties, as supplemented by any informal
investigation FTA considers necessary and by additional information
furnished by the parties at FTA request. Each party shall file
documents that it considers sufficient to present all relevant facts
and argument necessary for FTA to determine whether the recipient is in
compliance.
(c) The Chief Counsel shall send a notice to complainant(s) and
respondent(s) once an investigation is complete, but not later than 90
days after receipt of the last pleading specified in Sec. 604.27 was
due to FTA.
Sec. 604.33 Agency initiation of investigation.
(a) Notwithstanding any other provision under these regulations,
FTA may initiate its own investigation of any matter within the
applicability of this Part without having received a complaint. The
investigation may include, without limitation, any of the actions
described in Sec. 604.32.
(b) Following the initiation of an investigation under this
section, FTA sends a notice to the entities subject to investigation.
The notice will set forth the areas of FTA's concern and the reasons;
request a response to the notice within 30 days of the date of service;
and inform the respondent that FTA will, in its discretion, invite good
faith efforts to resolve the matter.
(c) If the matters addressed in the FTA notice are not resolved
informally, the Chief Counsel may refer the matter to a Presiding
Official.
Subpart H--Decisions by FTA and Appointment of a Presiding Official
(PO)
Sec. 604.34 Chief Counsel decisions and appointment of a PO.
(a) After receiving a complaint consistent with Sec. 604.27, and
conducting an investigation, the Chief Counsel may:
(1) Issue a decision based on the pleadings filed to date;
(2) Appoint a PO to review the matter; or
(3) Dismiss the complaint pursuant to Sec. 604.28.
(b) If the Chief Counsel appoints a PO to review the matter, the
Chief Counsel shall send out a hearing order that sets forth the
following:
(1) The allegations in the complaint, or notice of investigation,
and the chronology and results of the investigation preliminary to the
hearing;
(2) The relevant statutory, judicial, regulatory, and other
authorities;
(3) The issues to be decided;
(4) Such rules of procedure as may be necessary to supplement the
provisions of this Part;
(5) The name and address of the PO, and the assignment of authority
to the PO to conduct the hearing in accordance with the procedures set
forth in this Part; and
(6) The date by which the PO is directed to issue a recommended
decision.
Sec. 604.35 Separation of functions.
(a) Proceedings under this part shall be handled by an FTA
attorney, except that the Chief Counsel may appoint a PO, who may not
be an FTA attorney.
(b) After issuance of an initial decision by the Chief Counsel, the
FTA employee or contractor engaged in the performance of investigative
or prosecutorial functions in a proceeding under this part shall not,
in that case or a factually related case, participate or give advice in
a final decision by the Administrator or his or her designee on written
appeal, and shall not, except as counsel or as witness in the public
proceedings, engage in any substantive communication regarding that
case or a related case with the Administrator on written appeal.
Subpart I--Hearings.
Sec. 604.36 Powers of a PO.
A PO may:
(a) Give notice of, and hold, pre-hearing conferences and hearings;
(b) Administer oaths and affirmations;
(c) Issue notices of deposition requested by the parties;
(d) Limit the frequency and extent of discovery;
(e) Rule on offers of proof;
(f) Receive relevant and material evidence;
(g) Regulate the course of the hearing in accordance with the rules
of this part to avoid unnecessary and duplicative proceedings in the
interest of prompt and fair resolution of the matters at issue;
(h) Hold conferences to settle or to simplify the issues by consent
of the parties;
(i) Dispose of procedural motions and requests;
(j) Examine witnesses; and
(k) Make findings of fact and conclusions of law and issue a
recommended decision.
Sec. 604.37 Appearances, parties, and rights of parties.
(a) Any party to the hearing may appear and be heard in person and
any party to the hearing may be accompanied, represented, or advised by
an attorney licensed by a State, the District of Columbia, or a
territory of the United States to practice law or appear before the
courts of that State or territory, or by another duly authorized
representative. An attorney, or other duly authorized representative,
who represents a party shall file according to the filing and service
procedures contained in Sec. 604.30 and Sec. 604.31.
(b) The parties to the hearing are the respondent(s) named in the
hearing order, the complainant(s), and FTA, as represented by the PO.
(c) The parties to the hearing may agree to extend for a reasonable
period of time the time for filing a document under this part. If the
parties agree, the PO shall grant one extension of time to each party.
The party seeking the extension of time shall submit a draft order to
the PO to be signed by the PO and filed with the hearing docket. The PO
may grant additional oral requests for an extension of time where the
parties agree to the extension.
(d) An extension of time granted by the PO for any reason extends
the due date for the PO's recommended decision and for the final agency
decision by the length of time in the PO's extension.
Sec. 604.38 Discovery.
(a) Permissible forms of discovery shall be within the discretion
of the PO.
(b) The PO shall limit the frequency and extent of discovery
permitted by this section if a party shows that:
(1) The information requested is cumulative or repetitious;
(2) The information requested may be obtained from another less
burdensome and more convenient source;
(3) The party requesting the information has had ample opportunity
to obtain the information through other discovery methods permitted
under this section; or
(4) The method or scope of discovery requested by the party is
unduly burdensome or expensive.
[[Page 2354]]
Sec. 604.39 Depositions.
(a) For good cause shown, the PO may order that the testimony of a
witness may be taken by deposition and that the witness produce
documentary evidence in connection with such testimony. Generally, an
order to take the deposition of a witness is entered only if:
(1) The person whose deposition is to be taken would be unavailable
at the hearing;
(2) The deposition is deemed necessary to perpetuate the testimony
of the witness; or
(3) The taking of the deposition is necessary to prevent undue and
excessive expense to a party and will not result in undue burden to
other parties or in undue delay.
(b) Any party to the hearing desiring to take the deposition of a
witness according to the terms set out in this subpart, shall file a
motion with the PO, with a copy of the motion served on each party. The
motion shall include:
(1) The name and residence of the witness;
(2) The time and place for the taking of the proposed deposition;
(3) The reasons why such deposition should be taken; and
(4) A general description of the matters concerning which the
witness will be asked to testify.
(c) If good cause is shown in the motion, the PO in his or her
discretion, issues an order authorizing the deposition and specifying
the name of the witness to be deposed, the location and time of the
deposition and the general scope and subject matter of the testimony to
be taken.
(d) Witnesses whose testimony is taken by deposition shall be sworn
or shall affirm before any questions are put to them. Each question
propounded shall be recorded and the answers of the witness transcribed
verbatim. The written transcript shall be subscribed by the witness,
unless the parties by stipulation waive the signing, or the witness is
ill, cannot be found, or refuses to sign. The reporter shall note the
reason for failure to sign.
Sec. 604.40 Public disclosure of evidence.
(a) Except as provided in this section, the hearing shall be open
to the public.
(b) The PO may order that any information contained in the record
be withheld from public disclosure. Any person may object to disclosure
of information in the record by filing a written motion to withhold
specific information with the PO. The person shall state specific
grounds for nondisclosure in the motion.
(c) The PO shall grant the motion to withhold information from
public disclosure if the PO determines that disclosure would be in
violation of the Privacy Act, would reveal trade secrets or privileged
or confidential commercial or financial information, or is otherwise
prohibited by law.
Sec. 604.41 Standard of proof.
The PO shall issue a recommended decision or shall rule in a
party's favor only if the decision or ruling is supported by a
preponderance of the evidence.
Sec. 604.42 Burden of proof.
(a) The burden of proof of noncompliance with this part,
determination, or agreement issued under the authority of the Federal
Transit Laws is on the registered charter provider.
(b) Except as otherwise provided by statute or rule, the proponent
of a motion, request, or order has the burden of proof.
Sec. 604.43 Offer of proof.
A party whose evidence has been excluded by a ruling of the PO,
during a hearing in which the respondent had an opportunity to respond
to the offer of proof, may offer the evidence on the record when filing
an appeal.
Sec. 604.44 Record.
(a) The transcript of all testimony in the hearing, all exhibits
received into evidence, all motions, applications requests and rulings,
and all documents included in the hearing record shall constitute the
exclusive record for decision in the proceedings and the basis for the
issuance of any orders.
(b) Any interested person may examine the record by entering the
docket number at http://www.regulations.gov or after payment of
reasonable costs for search and reproduction of the record.
Sec. 604.45 Waiver of procedures.
(a) The PO shall waive such procedural steps as all parties to the
hearing agree to waive before issuance of an initial decision.
(b) Consent to a waiver of any procedural step bars the raising of
this issue on appeal.
(c) The parties may not by consent waive the obligation of the PO
to enter a recommended decision on the record.
Sec. 604.46 Recommended decision by a PO.
(a) The PO shall issue a recommended decision based on the record
developed during the proceeding and shall send the recommended decision
to the Chief Counsel for ratification or modification not later than
110 days after the referral from the Chief Counsel.
(b) The Chief Counsel shall ratify or modify the PO's recommended
decision within 30 days of receiving the recommended decision. The
Chief Counsel shall serve his or her decision, which is capable of
being appealed to the Administrator, on all parties to the proceeding.
Sec. 604.47 Remedies.
(a) If the Chief Counsel determines that a violation of this part
occurred, he or she may take one or more of the following actions:
(1) Bar the recipient from receiving future Federal financial
assistance from FTA;
(2) Order the withholding of a reasonable percentage of available
Federal financial assistance; or
(3) Pursue suspension and debarment of the recipient, its
employees, or its contractors.
(b) In determining the type and amount of remedy, the Chief Counsel
shall consider the following factors:
(1) The nature and circumstances of the violation;
(2) The extent and gravity of the violation (``extent of deviation
from regulatory requirements'');
(3) The revenue earned (``economic benefit'') by providing the
charter service;
(4) The operating budget of the recipient;
(5) Such other matters as justice may require; and
(6) Whether a recipient provided service described in a cease and
desist order after issuance of such order by the Chief Counsel.
(c) The Chief Counsel office may mitigate the remedy when the
recipient can document corrective action of alleged violation. The
Chief Counsel's decision to mitigate a remedy shall be determined on
the basis of how much corrective action was taken by the recipient and
when it was taken. Systemic action to prevent future violations will be
given greater consideration than action simply to remedy violations
identified during FTA's inspection or identified in a complaint.
(d) In the event the Chief Counsel finds a pattern of violations,
the remedy ordered shall bar a recipient from receiving Federal transit
assistance in an amount that the Chief Counsel considers appropriate.
(e) The Chief Counsel may make a decision to withhold Federal
financial assistance in a lump sum or over a period of time not to
exceed five years.
[[Page 2355]]
Subpart J--Appeal to Administrator and Final Agency Orders
Sec. 604.48 Appeal from Chief Counsel decision.
(a) Each party adversely affected by the Chief Counsel's office
decision may file an appeal with the Administrator within 21 days of
the date of the Chief Counsel's issued his or her decision. Each party
may file a reply to an appeal within 21 days after it is served on the
party. Filing and service of appeals and replies shall be by personal
delivery consistent with Sec. Sec. 604.30 and 604.31.
(b) If an appeal is filed, the Administrator reviews the entire
record and issues a final agency decision based on the record that
either accepts, rejects, or modifies the Chief Counsel's decision
within 30 days of the due date of the reply. If no appeal is filed, the
Administrator may take review of the case on his or her own motion. If
the Administrator finds that the respondent is not in compliance with
this part, the final agency order shall include a statement of
corrective action, if appropriate, and identify remedies.
(c) If no appeal is filed, and the Administrator does not take
review of the decision by the office on the Administrator's own motion,
the Chief Counsel's decision shall take effect as the final agency
decision and order on the twenty-first day after the actual date the
Chief Counsel's decision was issued.
(d) The failure to file an appeal is deemed a waiver of any rights
to seek judicial review of the Chief Counsel's decision that becomes a
final agency decision by operation of paragraph (c) of this section.
Sec. 604.49 Administrator's discretionary review of the Chief
Counsel's decision.
(a) If the Administrator takes review on the Administrator's own
motion, the Administrator shall issue a notice of review by the twenty-
first day after the actual date of the Chief Counsel's decision that
contains the following information:
(1) The notice sets forth the specific findings of fact and
conclusions of law in the decision subject to review by the
Administrator.
(2) Parties may file one brief on review to the Administrator or
rely on their post-hearing briefs to the Chief Counsel's office. Briefs
on review shall be filed not later than 10 days after service of the
notice of review. Filing and service of briefs on review shall be by
personal delivery consistent with Sec. 604.30 and Sec. 604.31.
(3) The Administrator issues a final agency decision and order
within 30 days of the due date of the briefs on review. If the
Administrator finds that the respondent is not in compliance with this
part, the final agency order shall include a statement of corrective
action, if appropriate, and identify remedies.
(b) If the Administrator takes review on the Administrator's own
motion, the decision of the Chief Counsel is stayed pending a final
decision by the Administrator.
Subpart K--Judicial Review
Sec. 604.50 Judicial review of a final decision and order.
(a) A person may seek judicial review in an appropriate United
States District Court of a final decision and order of the
Administrator as provided in 5 U.S.C. 701-706. A party seeking judicial
review of a final decision and order shall file a petition for review
with the Court not later than 60 days after a final decision and order
is effective.
(b) The following do not constitute final decisions and orders
subject to judicial review:
(1) FTA's decision to dismiss a complaint as set forth in Sec.
604.29;
(2) A recommended decision issued by a PO at the conclusion of a
hearing; or
(3) A Chief Counsel decision that becomes the final decision of the
Administrator because it was not appealed within the stated timeframes.
Appendix A to Part 604--Listing of Human Service Federal Financial
Assistance Programs
Federal Programs Providing Transportation Assistance
------------------------------------------------------------------------
------------------------------------------------------------------------
1........ Food Stamp, Food and Nutrition Department of
Employment and Service. Agriculture.
Training Program.
2........ Voluntary Public Office of Department of
School Choice. Innovation and Education.
Improvement.
3........ Assistance for Office of Special Department of
Education of All Education and Education.
Children with Rehabilitative
Disabilities--IDEA. Services.
4........ Centers for Office of Special Department of
Independent Living. Education and Education.
Rehabilitative
Services.
5........ Independent Living Office of Special Department of
for Older Education and Education.
Individuals Who Rehabilitative
Are Blind. Services.
6........ Independent Living Office of Special Department of
State Grants. Education and Education.
Rehabilitative
Services.
7........ Supported Office of Special Department of
Employment Education and Education.
Services for Rehabilitative
Individuals with Services.
Most Significant
Disabilities.
8........ Vocational Office of Special Department of
Rehabilitative Education and Education.
Grants. Rehabilitative
Services.
9........ Social Service Administration for Department of
Block Grant. Children and Health and Human
Families. Services.
10....... Child Care and Administration for Department of
Development Fund. Children and Health and Human
Families. Services.
11....... Head Start......... Administration for Department of
Children and Health and Human
Families. Services.
12....... Refugee and Entrant Administration for Department of
Assistance Children and Health and Human
Discretionary Families. Services.
Grants.
13....... Refugee and Entrant Administration for Department of
Assistance State Children and Health and Human
Administered Families. Services.
Programs.
14....... Refugee and Entrant Administration for Department of
Targeted Children and Health and Human
Assistance. Families. Services.
15....... Refugee and Entrant Administration for Department of
Assistance Children and Health and Human
Voluntary Agency Families. Services.
Programs.
16....... State Development Administration for Department of
Disabilities Children and Health and Human
Council and Families. Services.
Protection &
Advocacy.
17....... Temporary Administration for Department of
Assistance to Children and Health and Human
Needy Families. Families. Services.
18....... Community Services Administration for Department of
Block Grant. Children and Health and Human
Families. Services.
19....... Promoting Safe and Administration for Department of
Stable Families. Children and Health and Human
Families. Services.
20....... Developmental Administration for Department of
Disabilities Children and Health and Human
Projects of Families. Services.
National
Significance.
[[Page 2356]]
21....... Grants for Administration on Department of
Supportive Aging. Health and Human
Services and Services.
Senior Centers.
22....... Programs for Administration on Department of
American Indian, Aging. Health and Human
Alaskan Native and Services.
Native Hawaii
Elders.
23....... Medicaid........... Centers for Department of
Medicaid and Health and Human
Medicare. Services.
24....... State Health Centers for Department of
Insurance Program. Medicaid and Health and Human
Medicare. Services.
25....... Home and Community Centers for Department of
Base Waiver. Medicaid and Health and Human
Medicare. Services.
26....... Community Health Health Resources Department of
Centers. and Services Health and Human
Administration. Services.
27....... Healthy Communities Health Resources Department of
and Services Health and Human
Administration. Services.
28....... HIV Care Formula Health Resources Department of
Program. and Services Health and Human
Administration. Services.
29....... Maternal and Child Health Resources Department of
Health Block Grant. and Services Health and Human
Administration. Services.
30....... Rural Health Care Health Resources Department of
Network. and Services Health and Human
Administration. Services.
31....... Rural Health Care Health Resources Department of
Outreach Program. and Services Health and Human
Administration. Services.
32....... Health Start Health Resources Department of
Initiative. and Services Health and Human
Administration. Services.
33....... Ryan White Care Act Health Resources Department of
Programs. and Services Health and Human
Administration. Services.
34....... Substance Abuse Substance Abuse and Department of
Prevention and Mental Health Health and Human
Treatment Block Services Services.
Grant. Administration.
35....... Prevention and Substance Abuse and Department of
Texas Block Grant. Mental Health Health and Human
Services Services.
Administration.
36....... Community Community Planning Department of
Development Block and Development. Housing and Urban
Grant. Development.
37....... Housing Community Planning Department of
Opportunities for and Development. Housing and Urban
Persons with AIDS. Development.
38....... Supportive Housing Community Planning Department of
Program. and Development. Housing and Urban
Development.
39....... Revitalization of Public and Indian Department of
Severely Housing. Housing and Urban
Distressed Public Development.
Housing.
40....... Indian Employment Bureau of Indian Department of the
Assistance. Affairs. Interior.
41....... Indian Employment, Bureau of Indian Department of the
Training, and Affairs. Interior.
Related Services.
42....... Black Lung Benefits Employment Department of
Standards Labor.
Administration.
43....... Senior Community Employment Department of
Services Standards Labor.
Employment Program. Administration.
44....... Job Corps.......... Employment and Department of
Training Labor.
Administration.
45....... Migrant and Employment and Department of
Seasonal Farm Training Labor.
Worker. Administration.
46....... Native American Employment and Department of
Employment and Training Labor.
Training. Administration.
47....... Welfare to Work Employment and Department of
Grants for Tribes. Training Labor.
Administration.
48....... Welfare to Work for Employment and Department of
States and Locals. Training Labor.
Administration.
49....... Work Incentive Employment and Department of
Grants. Training Labor.
Administration.
50....... Workforce Employment and Department of
Investment Act Training Labor.
Adult Services Administration.
Program.
51....... Workforce Employment and Department of
Investment Act Training Labor.
Adult Dislocated Administration.
Worker Program.
52....... Workforce Employment and Department of
Investment Act Training Labor.
Youth Activities Administration.
Program.
53....... Homeless Veterans Veterans Employment Department of
Reintegration & Training Service. Labor.
Program.
54....... Veterans Employment Veterans Employment Department of
Program. & Training Service. Labor.
55....... Elderly and Persons Federal Transit Department of
with Disability. Administration. Transportation.
56....... New Freedom Program Federal Transit Department of
Administration. Transportation.
57....... Job Access and Federal Transit Department of
Reverse Commute Administration. Transportation.
Program.
58....... Non-Urbanized Area Federal Transit Department of
Program. Administration. Transportation.
59....... Capital Federal Transit Department of
Discretionary Administration. Transportation.
Program.
60....... Urbanized Area Federal Transit Department of
Formula Program. Administration. Transportation.
61....... Automobiles and Veterans Benefits Department of
Adaptive Equipment. Administration. Veterans Affairs.
62....... Homeless Provider Veterans Health Department of
Grants. Administration. Veterans Affairs.
63....... Veterans Medical Veterans Health Department of
Care Benefits. Administration. Veterans Affairs.
64....... Ticket to Work Social Security Department of
Program. Administration. Veterans Affairs.
------------------------------------------------------------------------
[[Page 2357]]
Appendix B to Part 604--Basis for Removal From Charter Registration Web
Site
The following is an explanation of terms contained in Section
604.27(d) concerning reasons for which FTA may remove a private
charter operator or a qualified human service from the FTA charter
registration Web site.
What is bad faith?
Bad faith is the actual or constructive fraud or a design to
mislead or deceive another or a neglect or refusal to fulfill a duty
or contractual obligation. It is not an honest mistake. Black's Law
Dictionary, Revised Fourth Edition, West Publishing Company, St.
Paul, Minn., 1968.
For example, it would be bad faith for a registered charter
provider to respond to a recipient's notification to registered
charter providers of a charter service opportunity stating that it
would provide the service with no actual intent to perform the
charter service. It would not be bad faith for a registered charter
operator to fail to provide charter service in response to a
recipient's notification when it honestly mistook the date, place or
time the service was to be provided.
What is fraud?
Fraud is the suggestion or assertion of a fact that is not true,
by one who has no reasonable ground for believing it to be true; the
suppression of a fact by one who is bound to disclose it; one who
gives information of other facts which are likely to mislead; or a
promise made without any intention of performing it. Black's Law
Dictionary, Revised Fourth Edition, West Publishing Company, St.
Paul, Minn., 1968.
Examples of fraud include but are not limited to: (1) A
registered charter operator indicates that it has a current state or
Federal safety certification when it knows that it does not in fact
have one; (2) a broker that owns no charter vehicles registers as a
registered charter provider; (3) a registered charter provider
intentionally misrepresents its legal geographic service area.
What is a lapse of insurance?
A lapse of insurance occurs when there is no policy of insurance
is in place. This may occur when there has been default in payment
of premiums on an insurance policy and the policy is no longer in
force. In addition, no other policy of insurance has taken its
place.
Black's Law Dictionary, Revised Fourth Edition, West Publishing
Company, St. Paul, Minn., 1968.
What is a lapse of other documentation?
A lapse of other documentation means for example, but is not
limited to, failure to have or loss or revocation of business
license, operating authority, failure to notify of current company
name, address, phone number, e-mail address and facsimile number,
failure to have a current state or Federal safety certification, or
failure to provide accurate Federal of state motor carrier
identifying number.
Black's Law Dictionary, Revised Fourth Edition, West Publishing
Company, St. Paul, Minn., 1968.
What is a complaint that does not state a claim that warrants an
investigation or further action by FTA?
A complaint is a document describing a specific instance that
allegedly constitutes a violation of the charter service regulations
set forth in 49 CFR 604.28. More than one complaint may be contained
in the same document. A complaint does not state a claim that
warrants investigation when the allegations made in the complaint,
without considering any extraneous material or matter, do not raise
a genuine issue as to any material question of fact, and based on
the undisputed facts stated in the complaint, there is no violation
of the charter service statute or regulation as a matter of law.
Based on Federal Rules of Civil Procedure, Rule 56(c).
Examples of complaints that would not warrant an investigation
or further action by FTA include but are no limited to: (1) A
complaint against a public transit agency that does not receive FTA
funding; (2) a complaint brought against a public transit agency by
a private charter operator that is neither a registered charter
provider nor its duly authorized representative; (3) a complaint
that gives no information as to when or where the alleged prohibited
charter service took place.
Appendix C to Part 604--Charter Service Questions and Answers
The following questions were taken from comments submitted to
the Notice of Proposed Rulemaking. Some questions have been modified
slightly from the original text.
(a) Applicability
(1) Q: How do I know if these charter regulations apply to my
transit agency?
A: If your transit agency accepts FTA financial assistance, the
charter regulations probably apply. Your next step is to look at the
exemptions contained in section 604.2 (``Applicability''). If none
of these exemptions apply, look at the definition of charter service
contained in section 604.3 (``Definitions''). Determine if the
activity your agency is about to engage in fits within that
definition. If not, then the charter regulations do not apply. If
the activity does fit within the definition of charter service, then
you need to determine whether the activity fits within one of the
exceptions contained in subpart B (``Exceptions''). Remember that
you may not provide the service if a registered charter provider
indicates an interest in providing the service. This is true even if
the registered charter provider does not ultimately reach an
agreement with the customer.
(2) Q: How are registered private charter providers identified?
Is there some kind of proof requirement that charter operators can
actually provide service to a particular area? Or, do charter
operators have to have a history of providing service to the area
they claim to serve?
A: A registered charter provider is a private operator who
wishes to receive notification of pending charter service requests
directed to public transit agencies and has registered on FTA's
charter registration Web site. When registering, charter providers
are required to provide specific information, including areas
served. They are not required to provide proof of such service.
Additionally, the entire registration process is a self-
certification process; FTA does not confirm the representations or
information that the registered charter provider provides. Finally,
a registered charter provider also does not have to demonstrate a
history of providing service in the areas it claims to serve.
(3) Q: Is there any geographical limitation on where a private
charter operator can register?
A: No. There is no geographical limitation on which areas a
private charter operator may register. This means a private charter
operator may register for several states or across the United
States. If a registered charter provider, however, indicates
interest in providing charter service to a particular customer and
fails to negotiate in good faith with the customer, and a public
transit agency was willing to provide the service, then the public
transit agency can file a complaint under 49 CFR section 604.26
against the registered charter provider.
(4) Q: Who is considered a ``private charter operator?'' What
are the criteria to establish that classification?
A: A ``private charter operator'' is any private, for-profit
entity (i.e., individual, group or company) that provides chartered
transportation on a regular basis with its own equipment (e.g., bus
and/or van).
(5) Q: Is there a definition of ``geographic service area?''
A: Yes. Geographic service area is defined under 49 CFR section
604.3(j) as, ``the entire area in which a recipient is authorized to
provide public transportation service under appropriate local, state
and Federal law.''
(6) Q: Do charter service hours include time spent waiting for
passengers where the vehicle is not available for other services?
A: Yes. Charter service hours include both time spent
transporting passengers and time spent waiting for passengers.
Charter service hours also include ``deadhead'' hours which is the
time spent getting from the garage to the origin of the trip and
then the time spent from the trip's ending destination back to the
garage, since the vehicle is unavailable during that time period as
well.
(7) Q: Qualified Human Service Organizations (QHSOs) that do not
receive funds from Federal programs listed in Appendix A are
required to certify that their federal funds include funding for
transportation. However, most Federal funds are passed through one
or more levels of state and local government, so how can we be
certain what the original purposes of the Federal funds were?
A: The regulation, 49 CFR 604.15(b), has been modified. That
provision no longer requires QHSOs to certify that their funding
included funding for transportation.
(8) Q: What is the status of sub-grantees and entities with
equipment and operations not assisted with federal funds?
A: The regulations do not apply to equipment that is fully
funded with local funds and is stored in a locally funded
[[Page 2358]]
facility and is maintained with only local funds.
(9) Q: Must a private charter provider that provides public
transportation services under contract or agreement with a public
transit agency abide by the limitations in the proposed rule?
A: Yes. Private charter providers that provide public
transportation service under contract with a public transit agency
are covered by the new regulation when they are operating FTA funded
equipment or services. These private charter operators are standing
in the shoes of the public transit agency, and therefore cannot use
federally funded equipment to provide charter services. This does
not mean, however, that a private charter operator that contracts
with a public transit agency and uses one of the private charter
operator's own vehicles is subject to the charter service
regulations (see section 604.2(c)).
(10) Q: Does the analysis change under different contractual
scenarios (e.g., turnkey operations, operation and maintenance of
vehicles provided by the public transit agency, or operation of
contractor owned buses maintained in a federally funded facility
owned by a public transit agency)?
A: Yes. The regulations, however, only apply 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.
(11) 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 private charter
services?''
A: It depends. A private charter operator that receives FTA
assistance can use FTA-funded equipment to provide service for
program purposes (see section 604.2(e)), but not for other charter
service. Under the provisions of section 604.2(c), however, the
regulations do not apply to non-FTA funded activities of private
charter operators that receive directly or indirectly FTA financial
assistance under programs such as sections 5307, 5309, 5310, 5311,
5316, and 5317. Further, an intercity bus operator that receives
assistance under section 5311(f) to provide rural intercity bus
service may provide charter service using a FTA-funded vehicle only
if one of the exceptions applies. A vehicle equipped with a lift
using FTA assistance under section 3038 of TEA-21 may be used for
charter service.
(12) Q: Is there an emergency charter exception for `actual,
imminent or anticipated possibility of injury, loss of life, or loss
of property?' For instance, there could be a poison gas plume or
threat of one from an industrial accident or railcar derailment. A
transit agency could be called to do a rapid evacuation of an
apartment, hospital, school, elder care facility or some other
facility requiring group or individual evacuation. Must the public
transit agencies wait for the Administrator to declare this incident
an event of `regional or national significance' so that transit
buses can be used?
A: Yes, there is an exception for emergencies. Section 604.2(f)
contains an exemption that allows for public transit agencies to
respond to emergencies that last fewer than 45 days. If an emergency
lasts longer than 45 days, the public transit agency must follow the
procedures set out in subpart D of 49 CFR part 601. The
Administrator does not declare an emergency. Rather, the President,
Governor, or Mayor declares the emergency.
(13) Q: If an emergency is exactly 45 days long, is the
emergency services exception still applicable?
A: Yes. If the emergency lasts exactly 45 days the emergency
services exception is still applicable. The regulation refers to
calendar days, not business days. Therefore, if the emergency lasts
more than 45 calendar days, the public transit agency must follow
the procedures set out in subpart D of 49 CFR part 601.
(14) Q: Do emergency situations include matters of security--
e.g., when the Secret Service requests vehicles with no under-
vehicle luggage compartments?
A: No. Situations involving the Secret Service would fall under
the government officials section of the regulation (49 CFR section
604.7), which allows up to 80 hours annually of charter service to
government officials on official government business, which can
include non-transit purposes.
(15) Q: Are rural transit operators (section 5311) exempt from
the rule? What about recipients of 5310 vehicles or JARC or New
Freedom grants?
A: Recipients under section 5311, 5310, 5316, and 5317 are not
subject to the charter rule when using FTA-funded vehicles to
provide public transportation or coordinated human service
transportation or to serve groups of individuals with disabilities,
the elderly, or low income individuals. The charter rule does apply,
however, if the FTA recipient wants to provide other charter service
using FTA-funded or maintained vehicles. A rural transit operator
may provide other charter service only under the exemptions/
exceptions contained in the rule.
(b) Exemptions
(16) Q: Does the exemption of demand response service from the
definition of charter service exclude rural and small urban systems
entirely?
A: No. The exemption of demand response service from the
definition of charter service is intended to exclude service
provided to individuals, as opposed to a group, who request service
such as paratransit service. In addition, the exception contained in
section 604.7 does not include service provided to QHSOs
(organizations providing service to persons with disabilities, low
income individuals, and the elderly).
(17) Q: Is there an expedited process to obtain the
Administrator's decision and signature for time sensitive events so
that there could be sufficient time to plan and implement service?
A: Petitions to the Administrator for events of regional or
national significance will be processed as quickly as practicable.
(c) Definitions
(18) Q: If a transit agency provides service that is irregular
or on a limited basis for an exclusive group of individuals, but
provides the service free of charge, is the service exempt from the
charter regulation?
A: Yes. So long as the transit agency does not charge a premium
fare for the service and there is no third party paying for the
service in whole or in part.
(19) Q: Does ``qualified human service agency'' include any non-
profit entity that provides services to the disabled, or
economically disadvantaged without reference to age?
A: Yes, so long as the QHSO either receives funding from one of
the programs listed in Appendix A or registers as a QHSO on the FTA
charter Web site. Under section 604.7, a recipient may provide
charter service to entities that meet the definition of ``qualified
human service organization.'' This includes organizations that serve
persons who qualify for human service or transportation-related
programs or services due to a disability, income or advanced age.
All three are not required, however, so an organization may qualify
as a QHSO but serve only persons with low income.
(20) Q: Is it charter service when the local transit authority
provides event or fair service, that is open to the public, with or
without charge, where the transit authority determines the routes
and times and it is scheduled for the same time every year, but the
Fair Association subsidizes all or part of the costs?
A: Yes. The fact that the Fair Association pays for the service
in whole or in part means the service is charter under section
604.3(c)(2).
(21) Q: What qualifies as indirect financial assistance?
A: The inclusion of ``indirect'' financial assistance as part of
the definition of ``recipient'' is covers ``subrecipients.'' We
modified the definition of recipient in the final rule to make this
point clear.
(22) Q: When a transit authority contracts out its smaller
accessible vehicles for use during football games to offer service
free of charge for persons with disabilities and their escorts, is
it charter service?
A: Yes. Under the facts presented, this type of service falls
under the definition of charter service in section 604.3(c)(1).
Since ``contracting out'' involves a third party, exclusive use, and
a negotiated price. Thus, the transit authority would need to
determine whether one of the exceptions under subpart B applies.
(23) Q: Is it considered charter service when the transit
authority funds shuttles to and from football games? Regularly
scheduled service is suspended on these days, but this service
partially follows the existing route and is open to the public at
the regular fare.
A: No. If the service provided by the public transit agency
costs the same as the customary fixed route fare and it is open to
the public then it is not charter.
(24) Q: Is shuttle service for a one-time event considered
charter service, if the service is open to the public, widely
advertised, and the itinerary is determined by the transit operator?
What if the service has been provided for decades?
A: No. So long as the transit authority charges its customary
fixed route fare for the shuttle service, and there is no third
party involvement, then the service is not charter. Widely
advertising the service or providing the service for decades has no
bearing on whether the service is charter.
[[Page 2359]]
(25) Q: Is demand response service included in the definition of
charter service?
A: No. Demand response service is excluded from the definition
of charter service under section 604.3(c).
(26) Q: Is it charter service when a university pays a public
transit agency a fixed charge to allow all faculty, staff, and
students to ride the transit system for free?
A: No. So long as the public transit agency provides the service
on a regular basis, along a fixed route, and the service is open to
the public, the fact that the university may be subsidizing student
and faculty rides, does not convert the service to charter.
(27) Q: Can a transit agency provide service when the customer
wants a particular type of equipment such as a (rubber tire) trolley
bus, vintage bus, or CNG bus that the private operators do not have?
A: No. Public transit agencies cannot provide charter service
solely based on a customer's vehicle preferences. FTA only
recognizes two categories of vehicles: buses and vans.
(28) Q: What is a ``qualified human service organization?''
A: A qualified human service organization is an organization
that provides service to individuals that qualify for federally
conducted or assisted transportation related programs due to
disability, income or advanced age. See section 604.3(q).
(29) Q: If a transit agency has restored or preserved historic
electric buses for limited, special use, are the buses subjected to
charter bus restrictions?
A: Yes, if the public transit agency purchased the historic
electric buses with Federal funds or maintains those vehicles in
federally funded facilities.
(30) Q: If a grantee operates assets that are locally funded are
such assets subject to the charter regulations?
A: It depends. If a recipient receives FTA funds for operating
assistance or stores its vehicles in a FTA-funded facility or
receives indirect FTA assistance, then the charter regulations
apply. The fact that the vehicle was locally funded does not make
the recipient exempt from the charter regulations. If both operating
and capital funds are locally supplied, then the vehicle is not
subject to the charter service regulations.
(31) Q: Does ``pattern of violations'' apply from the effective
date of the final rule?
A: Yes. The new definition of pattern of violations applies from
the effective date of the final rule. In other words, in order to
establish a pattern of violations, the violation had to occur after
the effective date of the final rule.
(32) Q: What is a violation? Does it require an official charter
decision or could it also include an oversight finding or other
means of identifying shortcomings?
A: The new rule defines ``violation'' as a finding by FTA of a
failure to comply with one of the requirements of this part. A
finding may be an official charter decision by the Chief Counsel or
the Administrator. An oversight finding would also qualify as an FTA
finding.
(33) Q: Are sightseeing trips still not charter?
A: Yes. ``Sightseeing'' is excluded from the definition of
``public transportation'' under 49 U.S.C. Section 5302(a)(10).
Therefore, it is not permissible for public transit agencies to
provide sightseeing service with FTA-funded assets.
(34) Q: If a transit agency provides vehicles to a special
event, but the event is open to the public, the route is controlled
by the transit agency, the route is advertised similarly to the
transit agency's regular routes, the buses are not identified as
``special service'' or any other different markings, and the
vehicles go to and from fixed stops in an express bus manner, is
this charter?
A: No. So long as the transit authority does not charge a
premium fare for the service and a third party does not pay for the
service in whole or in part. Advertising or different markings on
the bus are longer determinative of whether the service is charter.
(35) Q: Does FTA consider wait time as a factor, in and of
itself, when determining whether service is charter service?
A: No. Wait time is not, in and of itself, considered a
characteristic of charter service.
(36) Q: What if there is no ``contract'' under the ``single
contract'' factor and the transit agency merely sees a need and
provides the charter-type service on its own initiative, is that
charter?
A: No. If a transit agency sees a need and wants to provide
service for a limited duration at the customary fixed route fare,
then that service is not charter service. The existence of a
contract is no longer determinative of whether service is charter
service.
(d) Exceptions
(37) Q: If the federal government calls on a public transit
agency for transit service and it will exceed the proposed 80 hour
limitation, are public operators to refuse this service or seek a
waiver directly from the federal government?
A: A public transit agency can petition for more service hours
if it exceeds the 80 hour annual allowance. Instructions on how to
file a petition are more fully described under 49 CFR Section
604.6(c) of the new regulation. Public transit agencies should be
mindful that the Administrator will grant such requests under
extraordinary circumstances only.
(38) Q: What kind of events qualify for the ``Events of Regional
and National Significance'' exception?
A: First, this exception is now located in section 604.11 and is
called ``Petitions to the Administrator.'' Second, the exception is
designed to allow public transit agencies to participate in
providing service to large events that will attract a lot of
visitors. Some examples are: the Kentucky Derby, the Indianapolis
500, a bridge opening, or a new transit facility opening. If a
transit authority is unsure whether a particular event fits within
the exception, the transit authority may request an Advisory Opinion
from FTA according to section 604.17.
(39) Q: What should a transit agency do when it is in the
process now of planning for an event of regional significance? Will
the new rules terminate these plans?
A: The new rule will impact a transit authority's planning
process for an event of regional significance. Any service provided
by the transit authority after the effective date of the rule--April
30, 2008--is subject to the provisions of the new rule.
(40) Q: What can a public transit agency do if there is a time
sensitive event in which the agency does not have time to consult
with all the private charter operators in their area? For example,
the presidential inauguration.
A: Section 604.11 provides a process to petition the FTA
Administrator for permission to provide service for a unique and
time sensitive event. A presidential inauguration, however, is not a
good example of a unique and time sensitive event. A presidential
inauguration is an event with substantial advance planning and a
transit agency should have time to contact private operators.
(41) Q: How should a public transit agency handle the situation
of a regional or nationally significant event when there is a
requirement to plan significant events (e.g., the Super Bowl) many
years in advance long before the list of registered charter service
providers is compiled?
A: If the transit agency plans to provide service to an event of
regional or national significance after the effective date of the
rule--April 30, 2008--then that service is subject to the
requirements of the new rule.
(42) Q: Does the hardship exception apply to small urban
operators?
A: Yes. Under section 604.11, the hardship exception applies to
non-urbanized areas under 50,000 in population or a small urbanized
area under 200,000 in population.
(e) Notice
(43) Q: May a transit agency indicate in the notice that goes
out to registered charter providers that the customer requested
specific equipment?
A: No. In terms of type of vehicles, the notice can include
whether the customer needs a bus or a van. The registered charter
provider, when it contacts the customer will learn of the specific
customer needs. At that time, the registered charter provider can
determine whether to seek out the specialized equipment from other
private charter operators or a public transit agency.
(44) Q: Must a public transit agency provide notice of all
potential charter trips to registered charter providers?
A: No. A public transit agency needs to provide notice only for
charter trips that it is interested in providing. If an exemption or
one of the exceptions applies, then the public transit would, after
providing the service, record the service as required by section
604.12.
(45) Q: What does ``notifying private operators'' entail? What
actions are to be taken when a notification e-mail is undeliverable?
Is it sufficient to provide phone numbers of private operators when
people call in for charter service?
A: Only ``registered charter providers'' need to be contacted.
In order to qualify as a ``registered charter provider'' the
information provided, including contact information, must be valid.
If the e-mail is undeliverable, then the notice should be faxed to
the registered charter provider. If the public transit agency
declines to provide the service to the customer, then they should
[[Page 2360]]
refer the customer to the FTA charter registration Web site. It is
not necessary to provide the customer with the registered charter
provider's phone number if the public transit agency refers the
customer to the charter registration Web site.
(46) Q: May a recipient provide service that allows customers to
park at a distant location, like a museum, and then have a transit
vehicle take them to a sporting event for a fare that is higher than
the normal fixed route fare? May a recipient prevent a private
charter operator from providing a similar service from the same
starting point to the same destination?
A: No. In this case, since the recipient charges a premium fare
for the service, it meets the definition of charter. In order to
provide the service, the recipient must give notice to registered
charter providers in accordance with section 604.14. A recipient may
not prevent a private charter operator from providing a similar
service. This is true whether or not the private charter operator is
registered on the FTA Charter Registration Web site.
(f) Complaint & Investigation Process
(47) Q: May a trade association or other operators that are
unable to provide requested charter service have the right to file a
complaint under the new rule?
A: Yes. A registered charter operator or its duly authorized
representative, who can include a trade association, may file a
complaint under section 604.26(a). Under the new rule, a private
charter operator that is not registered with FTA's charter
registration Web site may not file a complaint.
(48) Q: Is there a time limit for making complaints?
A: Yes. Complaints must be filed within 90 days of the alleged
unauthorized charter service.
(49) Q: Are there examples of the likely remedies FTA may impose
for a violation of the charter service regulations?
A: Yes. Appendix D contains a matrix of likely remedies that FTA
may impose for a violation of the charter service regulations.
(50) Q: When a complaint is filed, who is responsible for
arbitration or litigation costs?
A: FTA will pay for the presiding official and the facility for
the hearing, if necessary. Each party involved in the litigation is
responsible for its own litigation costs.
(51) Q: What affirmative defenses might be available in the
complaint process?
A: An affirmative defense to a complaint could state the
applicability of one of the exceptions such as 49 CFR Section 604.6
which states that the service that was provided was within the
allowable 80 hours of government official service.
(52) Q: May a state waive participation in the complaint
proceedings and forward the complaint directly to FTA after initial
receipt and review?
A: A state is no longer involved in the complaint process, and,
therefore, no waiver is necessary. In order for a complaint to be
filed, it must be filed directly with the Office of the Chief
Counsel.
(53) Q: What can a transit agency do if it believes that a
private provider is not bargaining in good faith with a group and
responds to a notice with a price or terms that are not acceptable
to that group?
A: If a transit agency believes that a registered charter
provider is not bargaining in good faith, the transit agency may
file a complaint for removal from FTA's Charter Registration Web
site.
(54) Q: What actions can a private charter operator take when it
becomes aware of a transit agency's plan to engage in charter
service just before the date of the charter?
A: As soon as a registered charter provider becomes aware of an
upcoming charter event that it was not contacted about, then it
should request an advisory opinion and cease and desist order. If
the service has already occurred, then the registered charter
provider may file a complaint.
(55) Q: When a registered charter provider indicates that there
are no privately owned vehicles available for lease, must the public
transit agency investigate independently whether the representation
by the registered charter provider is accurate?
A: No. The public transit agency is not required to investigate
independently whether the registered charter provider's
representation is accurate. Rather, the public transit agency need
only confirm that the number of vehicles owned by all registered
charter providers in the geographic service area is consistent with
the registered charter provider's representation.
(56) Q: Who qualifies as a presiding official, what are the
duties, and what other limitations are imposed?
A: A presiding official will have training and/or experience in
conducting hearings. More important, the person may not have any
conflicts of interest or previous contact with the parties
concerning the issue in the proceeding. A presiding official's
duties include, but are not limited to, convening a hearing, issuing
orders, ruling on motions, and drafting recommended decisions.
(57) Q: What recourse does a transit operator have when a
registered charter provider indicates interest in providing the
charter service set out in the notice and then does not do so?
A: A transit operator can and should file a complaint for
removal against the registered charter provider. This notifies FTA
of the registered charter provider's alleged actions. FTA will then
investigate the allegations and potentially remove the registered
charter provider from the registration list.
(58) Q: Are there any measures to regulate who is considered a
registered charter provider? And, are there any penalties for those
that register and actually are not in a position to perform the
needed services--for example an individual who owns a taxicab.
A: Yes. Through the self-registration process, a registered
charter provider certifies that the information it provides on the
charter registration Web site is true and accurate. The penalty for
providing inaccurate or untrue information is removal from the
registration Web site and possibly criminal penalties under 18
U.S.C. 1001.
(59) Q: If a customer hosts a large community event and the
public transit agency cannot provide service because of the charter
regulations and private operators will not provide service because
the payment is not sufficient, is there any alternative means or
does the service not get provided at all?
A: A public transit agency may provide the service if, after
providing the notice required in section 604.14, no registered
charter providers in the transit agency's geographic service area
are interested in providing the service.
(60) Q: What will result if a registered charter operator cannot
actually provide the service, but responds to a recipient's notice
anyway?
A: If a registered charter provider responds to a notice, then
it is expected to negotiate in good faith with the customer to
provide the service. If a registered charter provider vindictively
responds to a notice in order to prevent a public transit agency
from providing the service, then that registered charter provider
may be subject to a complaint for removal from the charter
registration Web site.
(61) Q: What method will the decision maker employ in
determining the penalty for violating the charter regulations?
A: Remedies will be based upon the facts of the situation,
including but not limited to, the extent of deviation from the
regulations and the economic benefit from providing the charter
service. See section 604.47 and Appendix D for more details.
(62) Q: Can multiple violations in a single finding stemming
from a single complaint constitute a pattern of violations?
A: Yes. A pattern of violations is defined as more than one
finding of unauthorized charter service under this part by FTA
beginning with the most recent finding of unauthorized charter
service and looking back over a period not to exceed 72 months.
While a single complaint may contain several violations, the
complaint must contain more than a single event that included
unauthorized charter service in order to establish a pattern of
violations.
(g) Recordkeeping
(63) Q: What if the public transit provider does not have
sufficient time to evaluate a request and make sure that all the
information is complete before notifying the registered private
charter companies?
A: A recipient should wait to provide notice that is consistent
with 49 CFR Section 604.14.
(h) Miscellaneous
(64) Q: Are body-on-van-chassis vehicles classified as buses or
vans under this provision?
A: Body-on-van-chassis vehicles are treated as vans under the
regulation.
(65) Q: Are there adequate provisions to ensure that the
registry site will be maintained in such a way that carriers provide
evidence of insurance?
A: Registered charter providers are required to certify that
they have insurance but are not required to provide evidence of
insurance. If there is information that indicates the provider has
provided a false certification, then it can be subject to criminal
penalties under 18 U.S.C. 1001 and removed from the FTA Charter
Registration Web site.
(66) Q: Will the registration Web site be fully functional and
grantees receive training on how to use the Web site before the
rule's effective date?
A: Yes. The Web site will be fully functional before the rule's
effective date. A
[[Page 2361]]
training manual will also be distributed before the effective date.
FTA intends to also do a roll-out of the regulation prior to the
effective date of the final rule.
(67) Q: When a new operator registers, may recipients continue
under existing contractual agreements for charter service?
A: Yes. If the contract was signed before the new private
operator registered, the arrangement can continue for up to 90 days.
During that 90 day period, however, the public transit agency must
enter into an agreement with the new registrant. If not, the transit
agency must terminate the existing agreement for all registered
charter providers.
(68) Q: Do FTA's attorneys have the necessary training to serve
as administrative law judges and makes rulings on motions, a task
that heretofore has not been a part of the day-to-day activities of
regional counsel?
A: Yes. FTA attorneys who have the delegated responsibility to
serve as a Presiding Official may rule on motions and will possess
the necessary qualifications to carry out their delegated tasks and
responsibilities.
(69) Q: Must a public transit agency continue to serve as the
lead for events of regional or national significance, if after
consultation with all registered charter providers in its geographic
service area, registered charter providers have enough vehicles to
provide all of the service to the event?
A. No. If after consultation with registered charter providers
and there is no need for the public transit vehicles, then the
public transit agency may decline to serve as the lead and allow the
registered charter providers to work directly with event organizers.
Alternatively, the public transit entity may retain the lead and
continue to coordinate with event organizers and registered charter
providers.
Appendix D to Part 604--Matrix of Remedies for Violations
Remedy Assessment Matrix:
Extent of Deviation From Regulatory Requirements
----------------------------------------------------------------------------------------------------------------
Major Moderate Minor
----------------------------------------------------------------------------------------------------------------
Major Economic Benefit............... $25,000/violation to $19,999/violation to $14,999/violation to
20,000. 15,000. 11,000.
Moderate............................. $10,999/violation to $7,999/violation to $4,999/violation to
8,000. 5,000. 3,000.
Minor................................ $2,999/violation to $1,499/violation to 500 $499/violation to 100.
1,500.
----------------------------------------------------------------------------------------------------------------
FTA's Remedy Policy:
--This remedy policy applies to decisions by the Chief Counsel,
Presiding Officials, and final determinations by the Administrator.
--Remedy calculation is based on the following elements:
(1) The nature and circumstances of the violation;
(2) The extent and gravity of the violation (``extent of
deviation from regulatory requirements'');
(3) The revenue earned (``economic benefit'') by providing the
charter service;
(4) The operating budget of the recipient;
(5) Such other matters as justice may require; and
(6) Whether a recipient provided service described in a cease
and desist order after issuance of such order by the Chief Counsel.
Issued this 7th day of January, 2008.
James S. Simpson,
Administrator.
[FR Doc. 08-86 Filed 1-8-08; 4:36 pm]
BILLING CODE 4910-57-P