Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 44927 

Flooding source(s) Location of referenced elevation 

* Elevation in feet 

(NGVD) 

+ Elevation in feet 

(NAVD) 

# Depth in feet 

above ground 

Modified 

Communities affected 

ADDRESSES 

City of Ritzville 

Maps are available for inspection at 216 E. Main Avenue, Ritzville, WA 99169. 

Unincorporated Areas of Adams County 

Maps are available for inspection at 210 W. Alder, Ritzville, WA 99169. 

(Catalog of Federal Domestic Assistance No. 

97.022, ‘‘Flood Insurance.’’) 

Dated: July 23, 2008. 

David I. Maurstad, 

Federal Insurance Administrator of the 

National Flood Insurance Program, 

Department of Homeland Security, Federal 

Emergency Management Agency. 

[FR Doc. E8–17681 Filed 7–31–08; 8:45 am] 

BILLING CODE 9110–12–P 

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; response to petitions 

for reconsideration and amendments. 

SUMMARY: This document disposes of 

the petitions for reconsideration filed in 

response to the Federal Transit 

Administration’s (FTA) final rule on 

charter service published on January 14, 

2008. This notice also corrects the final 

rule by adding an authority citation, 

revises Appendix B and Appendix C, 

and corrects Appendix D, which should 

have appeared in the final rule as a 

matrix. 

DATES: Effective Date: August 1, 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 

ombudsman.charterservice@dot.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The Federal Transit Administration 

(FTA), on January 14, 2008, issued a 

final rule amending 49 CFR part 604 (73 

FR 2326), which governs the provision 

of charter service by recipients of 

Federal funds from FTA. FTA utilized 

negotiated rulemaking procedures to 

issue the new rule based on 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 of 2005 (SAFETEA–LU). The final 

rule became effective on April 30, 2008, 

and clarified existing requirements; set 

out a new definition of ‘‘charter 

service’’; allowed for electronic 

registration of private charter providers, 

which replaced the old ‘‘willing and 

able’’ process; included a new provision 

allowing private charter operators to 

request a cease and desist order; and 

established more detailed complaint, 

hearing, and appeal procedures. On 

February 14, 2008, FTA received four 

petitions for reconsideration for certain 

provisions contained in the final rule. 

Issues Presented in the Petitions for 

Reconsideration 

Each of the following organizations 

filed a petition with FTA for 

reconsideration of the final rule: Coach 

USA, Inc., American Bus Association, 

Inc. (ABA), Private Sector Participants 

of Charter Bus Negotiated Rulemaking 

Advisory Committee (‘‘the Coalition’’) 

(which includes the ABA, California 

Bus Association, Coach America, Coach 

USA, National School Transportation 

Association, Northwest Motorcoach 

Association, Taxicab, Limousine and 

Paratransit Association, Trailways, and 

United Motorcoach Association), and 

Adirondack Trailways (including Pine 

Hill Trailways and New York 

Trailways). 

Each petition for reconsideration 

focused primarily on the final rule’s 

exemption for private charter operators. 

The final rule states: 

(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. 

49 CFR 604.2(c) 

Coach USA asserts that ‘‘while 

purporting to ‘clarify’ the rule, FTA 

introduced into its final rule at section 

604.2(c) the undefined limitation that 

the rules would not apply to ‘non-FTA 

funded activities of private charter 

operators that receive, directly or 

indirectly, FTA financial assistance’

under a variety of specified Federal 

programs. By virtue of the addition of 


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44928 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 

these new regulatory terms, a private 

charter operator must now determine 

what is, and what is not, an ‘FTA 

funded activity.’ Under the proposed 

rule, by contrast, no such determination 

was required.’’ Coach USA encourages 

FTA to return to the notice of proposed 

rulemaking (NPRM) language for this 

exemption. The ABA expressed similar 

concerns in its petition and noted that 

the answers provided in Appendix C 

‘‘are themselves unclear, in conflict, and 

do not cover every possible funding 

scenario.’’ Further, ABA also urged FTA 

to return to the NPRM language except 

‘‘where a private operator has acquired 

a vehicle with 80% or more Federal 

funding * * * that federally-funded 

vehicle may not be used to provide 

charter bus service unless one of the 

exceptions applies.’’ ABA also states 

that FTA did not properly support the 

change in the exemption from the 

NPRM to the final rule. 

Adirondack Trailways expressed 

strong support for ABA’s position on 

this issue and noted that ‘‘the charter 

regulations can be interpreted in a way 

that would prevent a private operator 

who performs commuter work Monday 

through Friday from operating a charter 

on Saturday or Sunday.’’ The Coalition 

did not address this particular issue, but 

raised several other issues. 

The Coalition raised concerns about 

the final rule’s provisions regarding the 

expansion of the emergency exemption 

from three days to forty-five days; the 

expansion of the hardship exception to 

small urbanized areas; comments on 

Petitions to the Administrator; 

exclusion of university shuttle bus 

service; and the remedy matrix in 

Appendix D. 

1. Emergency Exemption 

The final rule allows a public transit 

agency to provide charter service in 

emergency situations for forty-five days 

after which the transit agency is 

required to comply with 49 CFR Part 

601 Subpart D—FTA’s Emergency Relief 

docket. The Coalition believes this 

change in the final rule (the NPRM 

proposed to allow transit agencies to 

provide emergency service for three 

days) is unnecessary because ‘‘it is 

extremely rare that emergency 

conditions requiring transit bus charter 

service will last for one and one-half 

months.’’

2. Expansion of Hardship Exception 

Regarding the expansion of the 

hardship exception to small urban areas, 

the final rule allows small urban areas 

under 200,000 in population to petition 

the Administrator for an exception if a 

private carrier’s deadhead time exceeds 

total trip time. The Coalition opposes 

this expansion because ‘‘there is still no 

evidence in the record other than 

anecdotes that this exception is 

necessary * * * and this exception 

should be withdrawn from the rule or at 

least limited to rural areas only.’’

3. Petitions to the Administrator 

The Coalition also expressed concern 

regarding the final rule’s requirements 

for Petitions to the Administrator. The 

final rule allows a transit agency to 

petition the Administrator for an 

exception to the charter regulation for 

events of regional or national 

significance, hardship, or discretion. 

The Coalition noted that ‘‘there is no 

provision for the petition itself to be 

noticed in the docket, and no 

opportunity for private operators to 

comment on the representations and 

certification made by the recipient in 

the petition.’’ The Coalition requests 

that such petitions be published in the 

docket and interested parties be given 

the opportunity to comment on the 

requested exceptions before the 

Administrator issues a decision. 

4. University Shuttle Service 

Regarding university shuttle service, 

the final rule contains an appendix with 

a number of questions and answers. 

Question 26 in the appendix asks 

whether university shuttle service is 

charter service. The answer to question 

26 states that regularly scheduled 

university service does not meet the 

definition of charter service even though 

it is service provided at the request of 

a third party, for an exclusive group, 

and for a negotiated price. The Coalition 

expressed concerns about the answer to 

question 26 because ‘‘transit agencies 

may view this guidance as a license to 

enter service contracts with universities 

to provide campus service paid for by 

the university as long as the transit 

agency publishes the schedule, calls it 

a fixed route and allows the occasional 

member of the public to ride—even 

though it is really the university 

directing the terms of the service.’’

Thus, the Coalition asks for question 26 

to be stricken from the appendices, or, 

in the alternative, for FTA to provide a 

counter-example of when university 

shuttle service would be considered 

charter service. 

Coach USA also commented on 

question 26 and asserted that ‘‘the line 

between legitimate transit service and 

charter service is crossed when the 

transit agency enters a contract with the 

university or college that provides for a 

subsidy and, as is typical, also specifies 

key terms of the service (e.g., fares, bus 

stop locations, schedules based on 

academic calendar, times of the day 

served, special or no fares for members 

of the university community, etc.) and 

specifies routes that are tailored to meet 

unique university requirements, such as 

on-campus shuttle routes or shuttles 

between a campus and nearby stores or 

other off-campus facilities frequented by 

students. 

5. Remedy Matrix in Appendix D 

Finally, the Coalition also raised 

concerns about the inclusion of 

Appendix D, which was a matrix of 

potential remedies that may be imposed 

for a violation of the new charter service 

regulation. According to the Coalition, 

the figures contained in Appendix D are 

‘‘undecipherable’’ and it requests that 

the appendix be stricken from the final 

rule. 

Response to Petitions for 

Reconsideration 

1. Private Charter Exemption 

The Coalition raised concerns about 

FTA adding language to the private 

charter operator exemption and asserted 

that FTA’s changes are not supported by 

the record. In the docket for this 

rulemaking are several comments asking 

for clarification of the private charter 

exemption. Some comments confused 

the many private not-for-profit agencies 

that provide public transit service in 

rural areas with the private charter 

operators. Other comments complained 

that FTA was treating recipients of 

Federal funds differently. In the final 

rule preamble, FTA responded by 

stating: ‘‘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.’’ Still 

other comments raised concerns about 

transit agencies’ ability to contract with 

private providers to provide public 

transportation. In response to these 

concerns, FTA noted in the final rule 

that ‘‘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 


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Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 44929 

the unintended consequence of 

preventing the operator from using 

those vehicles, or other vehicles in its 

fleet, to provide charter service.’’ FTA 

also noted in response to comments that 

‘‘if a private charter operator 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.’’ But, FTA 

made sure to note that the ‘‘private 

charter operator, however, would not be 

prevented from using other vehicles in 

its private fleet to provide charter 

service.’’

Thus, while FTA understands the 

Coalition’s concerns regarding the 

amended language in the final rule, 

FTA’s changes in the final rule are wellsupported by the record. Even so, since 

the ABA and Coach USA focus on 

questions nine and ten in Appendix C, 

FTA will revise those questions to better 

reflect FTA’s intent with respect to the 

private charter exemption contained in 

49 CFR 604.2. To be clear, the charter 

rules do not apply to private charter 

operators when providing charter 

services using private charter vehicles 

not under contract with a public transit 

agency. The charter regulations apply to 

private charter providers when 

providing public transportation services 

under contract with a transit agency 

receiving Federal funds whether using 

privately owned vehicles or federally 

funded vehicles. This means a private 

charter operator, when providing public 

transportation in accordance with the 

terms of its contract with a public 

transit agency, must abide by the charter 

regulations for those vehicles engaged in 

public transportation services. For 

example, XYZ Charter Company 

contracts with ABC transit agency to 

provide fixed route service from 7 a.m. 

to 6:30 p.m. Monday through Friday. At 

6:31 p.m. each night, XYZ Charter 

Company’s privately owned vehicles are 

available for charter and such service is 

not subject to the charter regulations. 

Moreover, if the Garden Club asks 

XYZ Charter Company to perform a 

charter on Thursday from 10 a.m. until 

12 p.m., XYC Charter Company would 

have to abide by the charter service 

regulations if it were to use the vehicles 

in its fleet assigned to the provision of 

transit service because the event occurs 

during the period the private charter 

operator has contracted with the transit 

agency to provide public transportation 

whether the service is provided by 

privately owned vehicles or federally 

funded vehicles. XYC Charter Company 

could, however, provide charter service 

to the Garden Club using other privately 

owned vehicles in its fleet that were not 

required to be used under the transit 

contract. 

Another example involves service 

provided under a turn-key contract, 

where the private operator provides and 

operates a dedicated transit fleet. For 

the transit part of its business, the 

private operator is in effect the transit 

operator, and is subject to the charter 

rule for the vehicles in that transit fleet. 

The charter rule would not apply, 

however, to other aspects of that private 

provider’s business. FTA also 

recognizes that a private operator may 

use vehicles in its fleet interchangeably. 

So long as the operator is providing the 

number, type, and quality of vehicles 

contractually required to be provided 

exclusively for transit use, and is not 

using FTA funds to cross-subsidize 

private charter service, the private 

operator may manage its fleet according 

to best business practices. Stated 

differently, the charter rule is only 

applicable to the actual transit service 

provided by the private operator. As 

stated in 49 CFR 605.2(c), the rule does 

not apply to the non-FTA funded 

activities of private charter operators. 

The intent of this provision was to 

isolate the impacts of the charter rule on 

private operators to those instances 

where they stood in the shoes of a 

transit agency. 

Related to the above issue is the issue 

of receipt of Federal funds used to offset 

the costs of preventive maintenance. 

The use of Federal funds to offset 

preventive maintenance costs does not 

trigger application of the charter rule. 

Recipients of non-urbanized area 

formula program (49 U.S.C. 5311(f)) 

funds are constrained by the charter rule 

only when providing public 

transportation. Non-FTA funded 

vehicles that are maintained in FTA 

funded facilities also do not become 

subject to the charter regulations. 

Similarly, incidental use of FTA funded 

facilities such as stops or terminals or 

joint information systems, during 

charter, tour, or intercity operations, 

does not mean the charter regulations 

apply to the equipment in the private 

operator’s fleet. 

Finally, when a private operator 

receives FTA funds through the capital 

cost of contracting, the only expenses 

attributed to FTA are those related to 

the transit service provided. The 

principle of the capital cost of 

contracting is to pay for the capital 

portion of the privately owned assets 

used in public transportation (including 

a share of preventive maintenance costs 

attributable to the use of the vehicle in 

the contracted transit service). When a 

private operator uses that same privately 

owed vehicle in non-FTA funded 

service, such as charter service, the 

preventive maintenance and capital 

depreciation are not paid by FTA, so the 

charter rule does not apply. 

Accordingly, the Coalition’s request to 

revert to the language of the NPRM is 

denied, but FTA will provide further 

clarification to the questions and 

answers on this topic in Appendix C. 

2. Expansion of the Emergency 

Exemption From 3 to 45 Days 

The expansion of the emergency 

exemption from three to 45 days is 

described by the Coalition as 

‘‘unnecessarily generous’’ and ‘‘could 

allow agencies to avoid reporting 

requirements.’’ The Coalition requests 

that FTA return to the three day time 

period proposed in the NPRM. This 

request for reconsideration fails to 

comply with the provisions of 49 CFR 

601.34 because it fails to state ‘‘why 

compliance with the final rule is not 

practicable, is unreasonable, or is not in 

the public interest.’’ Even so, to support 

its claim, the Coalition asserts that 

‘‘there is nothing in the record 

supporting a 45-day exemption from the 

normal reporting requirement.’’

The record for these proceedings 

includes not only the final rule and its 

preamble, but also all of the comments. 

In the final rule FTA specifically noted 

that ‘‘considering the concerns raised, 

we have decided to amend this section 

to allow for transit agencies to respond 

to emergencies * * * but it is necessary 

to provide a time limitation, and so, we 

are changing the three day limit to 45 

days.’’ The time change directly 

responds to the comments FTA received 

indicating concern that three days was 

not sufficient time to allow for transit 

agencies to respond to emergencies. 

Specifically, several comments noted 

that the response to Hurricanes Katrina 

and Rita took much longer than three 

days. Thus, FTA chose a 45-day limit 

because it would allow transit agencies 

to focus on providing the needed 

support during emergencies without 

having to report back to FTA in a short 

time frame. Accordingly, the coalition’s 

request to return to the three day period 

proposed in the NPRM is denied. 

3. Expansion of Hardship Exception to 

Small Urbanized Areas 

With respect to FTA’s expansion of 

the hardship exception to small 

urbanized areas, the Coalition asserts 

there is ‘‘still no evidence in the record 

other than anecdotes that this [hardship] 

exception is necessary’’ and asks that 

‘‘the exception be withdrawn from the 


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44930 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 

final rule or at least limited to rural 

areas only.’’ This request for 

reconsideration fails to comply with the 

provisions of 49 CFR 601.34 because it 

fails to state ‘‘why compliance with the 

final rule is not practicable, is 

unreasonable, or is not in the public 

interest.’’ Even so, while the Coalition 

does not see a need for this exception, 

FTA was convinced by the comments 

received that rural providers have 

limited options and there may be 

instances when a transit agency will 

need to step in to fulfill community 

needs. Based on the comments received, 

FTA also determined that the exception 

could be safely expanded to areas fewer 

than 200,000 in population because 

those areas also tend to have fewer 

private charter choices. 

Further, the Coalition incorrectly 

states the exception. In the final rule, 

FTA removed the minimum trip 

duration requirement. Now, the only 

way to qualify for a hardship exception 

is for the deadhead time to exceed total 

trip time. This change was made as an 

acknowledgement that many companies 

impose minimum trip durations as a 

sound business practice and allowing 

transit agencies to provide requested 

charter service simply because a private 

provider imposes minimum trip 

durations could work a disservice upon 

small, rural private providers. 

Accordingly, the Coalition’s request to 

remove the hardship exception is 

denied. 

4. Comments on Petitions to the 

Administrator 

The Coalition states in its petition that 

‘‘there is no provision for the petition 

itself to be noticed in the docket, and no 

opportunity for private operators to 

comment on the representations and 

certifications made by the recipient in 

the petition * * *.’’ The Coalition 

requests that FTA formally establish a 

comment period for Petitions to the 

Administrator. This request for 

reconsideration fails to comply with the 

provisions of 49 CFR Section 601.34 

because it fails to state ‘‘why 

compliance with the final rule is not 

practicable, is unreasonable, or is not in 

the public interest.’’ Even so, the 

preamble to the final rule specifically 

states ‘‘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. * * *’’ Further, 

FTA routinely posts these petitions in 

the docket (FTA–2007–0022) at http:// 

www.regulations.gov, which allows 

registered charter providers to comment 

on the petition. 

FTA also noted in the preamble to the 

final rule that if a registered charter 

operator believes that a petition 

egregiously misstates facts, he or she 

may bring that to the attention of the 

ombudsman for charter service. While 

the final rule does not formally set a 

comment period for Petitions to the 

Administrator, there is a mechanism in 

place for registered charter providers to 

review petitions submitted to FTA and 

bring concerns to the agency’s attention. 

Accordingly, the Coalition’s request for 

a formal comment period for Petitions to 

the Administrator is denied. 

5. Exclusion of Regular University 

Shuttle Bus Service 

The questions and answers provided 

in Appendix C to the final rule state that 

regular shuttle service subsidized by a 

university is not charter. The Coalition 

argues that ‘‘much shuttle service 

provided by a transit agency to a 

university, where the university 

determines the routes, the schedule is 

adjusted according to the university’s 

calendar, and the university pays the 

fares for all of the students, faculty and 

staff riding the service (and charges the 

students a transportation or activity fee) 

could be considered charter service.’’

The Coalition requests that the question 

and answer pertaining to university 

service be removed or revised. This 

request for reconsideration fails to 

comply with the provisions of 49 CFR 

601.34 because it fails to state ‘‘why 

compliance with the final rule is not 

practicable, is unreasonable, or is not in 

the public interest.’’ Even so, when 

drafting the final rule FTA was very 

cognizant of the Coalitions’ concerns 

regarding shuttle service to universities. 

FTA determined that regular shuttle 

service, even service that is designed to 

meet the needs of students during the 

week, is not charter because the service 

is provided on a regular and continuing 

basis as part of the transit system. 

That being said, FTA recognizes that 

the question and answer regarding 

university shuttle service could be read 

to mean that all shuttle service to 

universities is not charter, which is not 

true. Shuttle service to events or 

functions of a limited duration or that 

occur on an irregular basis and that is 

subsidized by the university is charter. 

Further, on-campus shuttle routes 

provided for the exclusive use of 

students and faculty and not connected 

to a transit system’s routes could also be 

charter. Thus, FTA will revise the 

question and answer regarding 

university shuttle service to make clear 

that certain service to a university could 

be charter. 

6. Remedy Matrix in Appendix D 

The Coalition noted in its petition 

that the ‘‘figures in Appendix D matrix 

are not explained and are 

undecipherable.’’ The Coalition urges 

FTA to remove Appendix D altogether. 

This request for reconsideration fails to 

comply with the provisions of 49 CFR 

601.34 because it fails to state ‘‘why 

compliance with the final rule is not 

practicable, is unreasonable, or is not in 

the public interest.’’ Even so, in printing 

the final rule, the Federal Register 

changed the original ‘‘matrix’’ to a table. 

By this notice, FTA corrects Appendix 

D to reflect a matrix of potential 

remedies for a violation of the charter 

service regulations. 

7. Revision to Appendix B 

This notice also provides additional 

guidance to affected parties regarding 

what FTA may consider when 

determining whether a party has acted 

in ‘‘bad faith.’’ Currently, Appendix B 

defines bad faith as ‘‘actual or 

constructive fraud or a design to 

mislead or deceive another or a neglect 

or refusal to fulfill a duty or contractual 

obligation.’’ In addition, to this 

definition, FTA will also consider the 

time it takes for a registered charter 

provider to contact a customer or 

provide a customer with a reasonable 

quote. It is not reasonable for a 

registered charter provider to wait to 

contact the customer until the event is 

only a few weeks away. It is also not 

reasonable for a registered charter 

provider to delay providing a customer 

with a reasonable price quote for the 

requested charter service. Thus, it is 

FTA’s intention to review situations in 

which the registered charter provider 

delays either contacting the customer or 

providing a reasonable price quote to 

the customer. 

Additionally, since the rule’s effective 

date, some registered charter providers 

have provided quotes that include 

several hours of deadhead time for a two 

or three hour around-the-town charter 

trip. Such a quote is not reasonable 

given the fact that the customer should 

not have to pay for inordinate hours of 

deadhead time in order to receive 

service. Further, such actions seem 

unreasonable if the transit agency is able 

to provide the trip because there are no 

local private charter operators interested 

in providing the trip. 

8. Revision to Appendix C 

In response to the many questions 

FTA received regarding its final rule, we 

have revised Appendix C to provide 

additional guidance regarding issues 

that seem most important to affected 


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Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 44931 

parties. Thus, FTA added several new 

questions and answers and revised some 

of the old questions and answers to add 

more clarity to certain issues. The new 

Appendix C incorporates, as 

appropriate, and replaces the old 

Appendix C. 

9. Authority Citation Correction 

In the final rule published January 14, 

2008, the authority citation for part 604 

was inadvertently omitted from the text 

of the regulation. This notice corrects 

that omission. 

List of Subjects in 49 CFR Part 604 

Charter service. 

■ Accordingly, 49 CFR part 604 is 

amended as follows: 

■ 1. Add the following authority 

citation for part 604 to read as follows: 

Authority: 49 U.S.C. 5323(d): 3023(d), Pub. 

L. 109–59; 49 CFR 1.51. 

■ 2. Revise Appendix B to part 604 to 

read as follows: 

Appendix B to Part 604—Reasons for 

Removal 

The following is guidance on the terms 

contained in section 604.26(d) concerning 

reasons for which FTA may remove a 

registered charter provider or a qualified 

human service organization 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 also be bad faith if the 

registered charter provider fails to contact the 

customer or provide a quote for charter 

service within a reasonable time. Typically, 

if a registered charter provider fails to contact 

a customer or fails to provide a price quote 

to the customer at least 14 business days 

before an event, then FTA may remove the 

registered charter provider from the 

registration Web site, which would allow a 

transit agency to step back in to provide the 

service because the registered charter 

provider’s response to the email would no 

longer be effective because it is not 

registered. 

Further, it would be bad faith for a 

registered charter provider to submit a quote 

for charter services knowing that the price is 

three to four times higher because of the 

distance the registered charter provider must 

travel (deadhead time). In those situations, 

FTA may interpret such quotes as bad faith 

because they appear to be designed to 

prevent the local transit agency from 

providing the service. 

On the other hand, FTA would not 

interpret an honest mistake of fact as bad 

faith. For example, if a registered charter 

provider fails 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. It would not be 

bad faith if the registered charter provider 

responded affirmatively to the email 

notification sent by the public transit agency, 

but then later learned it could not perform 

the service and provided the transit agency 

reasonable notice of its changed 

circumstances. 

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 provider 

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; or (3) a qualified human 

service organization represents that its serves 

the needs of the elderly, persons with 

disabilities, or lower-income individuals, 

but, in fact, only serves those populations 

tangentially. 

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, email address and facsimile number, 

failure to have a current state or Federal 

safety certification, or failure to provide 

accurate Federal or 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 not 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; or (4) a complaint filed 

solely for the purpose of harassing the public 

transit agency. 

■ 3. Revise Appendix C to part 604 to 

read as follows: 

Appendix C to Part 604—Frequently 

Asked Questions 

(a) Applicability (49 CFR Section 604.2) 

(1) Q: If the requirements of the charter 

rule are not applicable to me for a particular 

service I provide, do I have to report that 

service in my quarterly report? 

A: No. If the service you propose to 

provide meets one of the exemptions 

contained in this section, you do not have to 

report the service in your quarterly report. 

(2) Q: If I receive funds under 49 U.S.C. 

Sections 5310, 5311, 5316, or 5317, may I 

provide charter service for any purpose? 

A: No. You may only provide charter 

service for ‘‘program purposes,’’ which is 

defined in this regulation as ‘‘transportation 

that serves the needs of either human service 

agencies or targeted populations (elderly, 

individuals with disabilities, and/or low 

income individuals) * * *’’ 49 CFR Section 

604.2(e). Thus, your service only qualifies for 

the exemption contained in this section if the 

service is designed to serve the needs of 

targeted populations. Charter service 

provided to a group, however, that includes 

individuals who are only incidentally 

members of those targeted populations, is not 

‘‘for program purposes’’ and must meet the 

requirements of the rule (for example, an 

individual chartering a vehicle to take his 

relatives including elderly aunts and a cousin 

who is a disabled veteran to a family 

reunion). 

(3) Q: If I am providing service for program 

purposes under one of the FTA programs 

listed in 604.2.(e), do the human service 

organizations have to register on the FTA 

Charter Registration Web site? 

A: No. Because the service is exempt from 

the charter regulations, the organization does 

not have to register on the FTA Charter 

Registration Web site. 

(4) Q: What if there is an emergency such 

as an apartment fire or tanker truck spill that 

requires an immediate evacuation, but the 

President, Governor, or Mayor never declares 

it as an emergency? Can a transit agency still 

assist in the evacuation efforts? 

A: Yes. One part of the emergency 

exemption is designed to allow transit 


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agencies to participate in emergency 

situations without worrying about complying 

with the charter regulations. Since transit 

agencies are often uniquely positioned to 

respond to such emergencies, the charter 

regulations do not apply. This is true 

whether or not the emergency is officially 

declared. 

(5) Q: Do emergency situations involve 

requests from the Secret Service or the police 

department to transport its employees? 

A. Generally no. Transporting the Secret 

Service or police officers for non-emergency 

preparedness or planning exercises does not 

qualify for the exemption under this section. 

In addition, if the Secret Service or the police 

department requests that a transit agency 

provide service when there is no immediate 

emergency, then the transit agency must 

comply with the charter service regulations. 

(6) Q: Can a transit agency provide 

transportation to transit employees for an 

event such as the funeral of a transit 

employee or the transit agency’s annual 

picnic? 

A: Yes. These events do not fall within the 

definition of charter, because while the 

service is exclusive, it is not provided at the 

request of a third party and it is not at a 

negotiated price. Furthermore, a transit 

agency transporting its own employees to 

events sponsored by the transit agency for 

employee morale purposes or to events 

directly related to internal employee 

relations such as a funeral of an employee, 

or to the transit agency’s picnic, is paying for 

these services as part of the transit agency’s 

own administrative overhead. 

(7) Q: Is sightseeing service considered to 

be charter? 

A: ‘‘Sightseeing’’ is a different type of 

service than charter service. ‘‘Sightseeing’’

service is regularly scheduled round trip 

service to see the sights, which is often 

accompanied by a narrative guide and is 

open to the public for a set price. Public 

transit agencies may not provide sightseeing 

service with federally funded assets or 

assistance because it falls outside the 

definition of ‘‘public transportation’’ under 

49 U.S.C. Section 5302(a) (10), unless FTA 

provides written concurrence for that service 

as an approved incidental use. While, in 

general, ‘‘sightseeing’’ service does not 

constitute charter service, ‘‘sightseeing’’

service that also meets the definition of 

charter service would be prohibited, even as 

an incidental use. 

(8) Q: If a private provider receives Federal 

funds from one of the listed programs in this 

section, does that mean the private provider 

cannot use its privately owned equipment to 

provide charter service? 

A: No. A private provider may still provide 

charter services even though it receives 

Federal funds under one of the programs 

listed in this section. The charter regulations 

only apply to a private provider during the 

time period when it is providing public 

transportation services under contract with a 

public transit agency. 

(9) Q: What does FTA mean by the phrase 

‘‘non-FTA funded activities’’? 

A: Non-FTA funded activities are those 

activities that are not provided under 

contract or other arrangement with a public 

transit agency using FTA funds. 

(10) Q: How does a private provider know 

whether an activity is FTA-funded or not? 

A: The private provider should refer to the 

contract with the public transit agency to 

understand the services that are funded with 

Federal dollars. 

(11) Q: What if the service is being 

provided under a capital cost of contracting 

scenario? 

A: When a private operator receives FTA 

funds through capital cost of contracting, the 

only expenses attributed to FTA are those 

related to the transit service provided. The 

principle of capital cost of contracting is to 

pay for the capital portion of the privately 

owned assets used in public transportation 

(including a share of preventive maintenance 

costs attributable to the use of the vehicle in 

the contracted transit service). When a 

private operator uses that same privately 

owed vehicle in non-FTA funded service, 

such as charter service, the preventive 

maintenance and capital depreciation are not 

paid by FTA, so the charter rule does not 

apply. 

(12) Q: What if the service is provided 

under a turn-key scenario? 

A: To the extent the private charter 

provider is standing in the shoes of the 

public transit agency, the charter rules apply. 

Under a turn-key contract, where the private 

operator provides and operates a dedicated 

transit fleet, then the private provider must 

abide by the charter regulations for the transit 

part of its business. The charter rule would 

not apply, however, to other aspects of that 

private provider’s business. FTA also 

recognizes that a private operator may use 

vehicles in its fleet interchangeably. So long 

as the operator is providing the number, type, 

and quality of vehicles contractually required 

to be provided exclusively for transit use and 

is not using FTA funds to cross-subsidize 

private charter service, the private operator 

may manage its fleet according to best 

business practice. 

(13) Q: Does FTA’s rule prohibit a private 

provider from providing charter service when 

its privately owned vehicles are not engaged 

in providing public transportation? 

A: No. The charter rule is only applicable 

to the actual public transit service provided 

by the private operator. As stated in 49 CFR 

604.2(c), the rule does not apply to the nonFTA funded activities of private charter 

operators. The intent of this provision was to 

isolate the impacts of the charter rule on 

private operators to those instances where 

they stood in the shoes of a transit agency. 

(14) Q: May a private provider use vehicles 

whose acquisition was federally funded to 

provide private charter services? 

A: It depends. A private provider, who is 

a sub-recipient or sub-grantee, when not 

engaged in providing public transit using 

federally funded vehicles, may provide 

charter services using federally funded 

vehicles only in conformance with the 

charter regulations. Vehicles, whose only 

federal funding was for accessibility 

equipment, are not considered to be federally 

funded vehicles in this context. In other 

words, vehicles, whose lifts are only funded 

under FTA programs, may be used in charter 

service. 

(15) Q: May a public transit agency provide 

‘‘seasonal service’’ (e.g., service May through 

September for the summer beach season)? 

A: ‘‘Seasonal service’’ that is regular and 

continuing, available to the public, and 

controlled by the public transit agency meets 

the definition of public transportation and is 

not charter service. The service should have 

a regular schedule and be planned in the 

same manner as all the other routes, except 

that it is run only during the periods when 

there is sufficient demand to justify public 

transit service; for example, the winter ski 

season or summer beach season. ‘‘Seasonal 

service’’ is distinguishable from charter 

service provided for a special event or 

function that occurs on an irregular basis or 

for a limited duration, because the seasonal 

transit service is regular and continuing and 

the demand for service is not triggered by an 

event or function. In addition, ‘‘seasonal 

service’’ is generally more than a month or 

two, and the schedule is consistent from year 

to year, based on calendar or climate, rather 

than being scheduled around a specific 

event. 

(b) Definitions (49 CFR Section 604.3) 

(16) Q: The definition of charter service 

does not include demand response services, 

but what happens if a group of individuals 

request demand response service? 

A: Demand response trips provide service 

from multiple origins to a single destination, 

a single origin to multiple destinations, or 

even multiple origins to multiple 

destinations. These types of trips are 

considered demand response transit service, 

not charter service, because even though a 

human service agency pays for the 

transportation of its clients, trips are 

scheduled and routed for the individuals in 

the group. Service to individuals can be 

identified by vehicle routing that includes 

multiple origins, multiple destinations, or 

both, based on the needs of individual 

members of the group, rather than the group 

as a whole. For example, demand response 

service that takes all of the members of a 

group home on an annual excursion to a 

baseball game. Some sponsored trips carried 

out as part of a Coordinated Human Services 

Transportation Plan, such as trips for Head 

Start, assisted living centers, or sheltered 

workshops may even be provided on an 

exclusive basis where clients of a particular 

agency cannot be mixed with members of the 

general public or clients of other agencies for 

safety or other reasons specific to the needs 

of the human service clients. 

(17) Q: Is it charter if a demand response 

transit service carries a group of individuals 

with disabilities from a single origin to a 

single destination on a regular basis? 

A: No. Daily subscription trips between a 

group living facility for persons with 

developmental disabilities to a sheltered 

workshop where the individuals work, or 

weekly trips from the group home to a 

recreation center is ‘‘special transportation’’

and not considered charter service. These 

trips are regular and continuous and do not 

meet the definition of charter. 

(18) Q: If a third party requests charter 

service for the exclusive use of a bus or van, 

but the transit agency provides the service 

free of charge, is it charter? 


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A: No. The definition of charter service 

under 49 CFR Section 604.3(c) (1), requires 

a negotiated price, which implies an 

exchange of money. Thus, free service does 

not meet the negotiated price requirement. 

Transit agencies should note, however, that 

a negotiated price could be the regular fixed 

route fare or when a third party indirectly 

pays for the regular fare. 

(19) Q: If a transit agency accepts a subsidy 

for providing shuttle service for an entire 

baseball season, is that charter? 

A: Yes. Even though there are many 

baseball games over several months, the 

service is still to an event or function on an 

irregular basis or for a limited duration for 

which a third party pays in whole or in part. 

In order to provide the service, a transit 

agency must first provide notice to registered 

charter providers. 

(20) Q: If a transit agency contracts with a 

third party to provide free shuttle service 

during football games for persons with 

disabilities, is that charter? 

A: Yes. Even though the service is for 

persons with disabilities, the transit agency 

receives payment from a third party for an 

event or function that occurs on an irregular 

basis or for a limited duration. In order for 

a transit agency to provide the service, it 

must provide notice to the list of registered 

charter providers first. 

(21) Q: What if a business park pays the 

transit agency to add an additional stop on 

its fixed route to include the business park, 

is that charter? 

A: No. The service is not to an event or 

function and it does not occur on an irregular 

basis or for a limited duration. 

(22) Q: What if a university pays the transit 

agency to expand its regular fixed route to 

include stops on the campus, is that charter? 

A: No. The service is not to an event or 

function and it does not occur on an irregular 

basis or for a limited duration. 

(23) Q: What if a university pays the transit 

agency to provide shuttle service that does 

not connect to the transit agency’s regular 

routes, is that charter? 

A: Yes. The service is provided at the 

request of a third party, the university, for the 

exclusive use of a bus or van by the 

university students and faculty for a 

negotiated price. 

(24) Q: What if the university pays the 

transit agency to provide shuttle service to 

football games and graduation, is that 

charter? 

A: Yes. The service is to an event or 

function that occurs on an irregular basis or 

for a limited duration. As such, in order to 

provide the service, a transit agency must 

provide notice to the list of registered charter 

providers. 

(25) Q: What happens if a transit agency 

does not have fixed route service to 

determine whether the fare charged is a 

premium fare? 

A: A transit agency should compare the 

proposed fare to what it might charge for a 

similar trip under a demand response 

scenario. 

(26) Q: How can a transit agency tell if the 

fare is ‘‘premium’’? 

A: The transit agency should analyze its 

regular fares to determine whether the fare 

charged is higher than its regular fare for 

comparable services. For example, if the 

transit agency proposes to provide an express 

shuttle service to football games, it should 

look at the regular fares charged for express 

shuttles of similar distance elsewhere in the 

transit system. In addition, the service may 

be charter if the transit agency charges a 

lower fare or no fare because of a third party 

subsidy. 

(27) Q: What if a transit agency charges a 

customer an up front special event fare that 

includes the outbound and inbound trips, is 

that a premium fare? 

A: It depends. If the transit agency charges 

the outbound and inbound fares up front, but 

many customers don’t travel both directions, 

then the fare may be premium. This would 

not be true generally for park and ride lots, 

where the customer parks his or her car, and, 

would most likely use transit to return to the 

same lot. Under that scenario, the transit 

agency may collect the regular outbound and 

inbound fare up front. 

(28) Q: What if a transit agency wishes to 

create a special pass for an event or function 

on an irregular basis or for a limited duration 

that allows a customer to ride the transit 

system several times for the duration of the 

event, is that charter? 

A: It depends. If the special pass costs 

more than the fare for a reasonable number 

of expected individual trips during the event, 

then the special pass represents a premium 

fare. FTA will also consider whether a third 

party provides a subsidy for the service. 

(29) Q: Is it a third party subsidy if a third 

party collects the regular fixed route fare for 

the transit agency? 

A. Generally no. If the service provided is 

not at the request of a third party for the 

exclusive use of a bus or van, then a third 

party collecting the fare would not qualify 

the service as charter. But, a transit agency 

has to consider carefully whether the service 

is at the request of an event planner. For 

example, a group offers to make ‘‘passes’’ for 

its organization and then later work out the 

payment to the transit agency. The transit 

agency can only collect the regular fare for 

each passenger. 

(30) Q: If the transit agency is part of the 

local government and an agency within the 

local government pays for service to an event 

or function of limited duration or that occurs 

on an irregular basis, is that charter? 

A: Yes. Since the agency pays for the 

charter service, whether by direct payment or 

transfer of funds through internal local 

government accounts, it represents a third 

party payment for charter service. Thus, the 

service would meet the definition of charter 

service under 49 CFR Section 604.3(c) (1). 

(31) Q: What if an organization requests 

and pays for service through an in-kind 

payment such as paying for a new bus shelter 

or providing advertising, is that charter? 

A: Yes. The service is provided at the 

request of a third party for a negotiated price, 

which would be the cost of a new bus shelter 

or advertising. The key here is the direct 

payment for service to an event or function. 

For instance, advertising that appears on 

buses for regular service does not make it 

charter. 

(32) Q: Under the definition of 

‘‘Government Officials,’’ does the 

government official have to currently hold an 

office in government? 

A: Yes. In order to take advantage of the 

Government Official exception, the 

individual must hold currently a government 

position that is elected or appointed through 

a political process. 

(33) Q: Does a university qualify as a 

QHSO? 

A: No. Most universities do not have a 

mission of serving the needs of the elderly, 

persons with disabilities, or low income 

individuals. 

(34) Q: Do the Boy Scouts of America 

qualify as a QHSO? 

A: No. The Boy Scouts of America’s 

mission is not to serve the needs of the 

elderly, persons with disabilities, or low 

income individuals. 

(35) Q: What qualifies as indirect financial 

assistance? 

A: The inclusion of ‘‘indirect’’ financial 

assistance as part of the definition of 

‘‘recipient’’ covers ‘‘subrecipients.’’ In other 

words, ‘‘subrecipients’’ are subject to the 

charter regulation. FTA modified the 

definition of recipient in the final rule to 

clarify this point. 

(c) Exceptions (49 CFR Subpart B) 

(36) Q: In order to take advantage of the 

Government Officials exception, does a 

transit agency have to transport only elected 

or appointed government officials? 

A: No, but there has to be at least one 

elected or appointed government official on 

the trip. 

(37) Q: If a transit agency provides notice 

regarding a season’s worth of service and 

some of the service will occur in less than 

30 days, does a registered charter provider 

have to respond within 72 hours or 14 days? 

A: A transit agency should provide as 

much notice as possible for service that 

occurs over several months. Thus, a transit 

agency should provide notice to registered 

charter providers more than 30 days in 

advance of the service, which would give 

registered charter provider 14 days to 

respond to the notice. Under pressure to 

begin the service sooner, the transit agency 

could provide a separate notice for only that 

portion of the service occurring in less than 

30 days. 

(38) Q: Does a transit agency have to 

contact registered charter providers in order 

to petition the Administrator for an event of 

regional or national significance? 

A: Yes. A petition for an event of regional 

or national significance must demonstrate 

that not only has the public transit agency 

contacted registered charter providers, but 

also demonstrate how the transit agency will 

include registered charter providers in 

providing the service to the event of regional 

or national significance. 

(39) Q: Where does a transit agency have 

to file its petition? 

A: A transit agency must file the petition 

with the ombudsman at 

ombudsman.charterservice@dot.gov. FTA 

will file all petitions in the Petitions to the 

Administrator docket (FTA–2007–0022) at 

http://www.regulations.gov. 

(40) Q: What qualifies as a unique and time 

sensitive event? 


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A: In order to petition the Administrator 

for a discretionary exception, a public transit 

agency must demonstrate that the event is 

unique or that circumstances are such that 

there is not enough time to check with 

registered charter providers. Events that 

occur on an annual basis are generally not 

considered unique or time sensitive. 

(41) Q: Is there any particular format for 

quarterly reports for exceptions? 

A: No. The report must contain the 

information required by the regulations and 

clearly identify the exception under which 

the transit agency performed the service. 

(42) Q: May a transit agency lease its 

vehicles to one registered charter provider if 

there is another registered charter provider 

that can perform all of the requested service 

with private charter vehicles? 

A: No. A transit agency may not lease its 

vehicles to one registered charter provider 

when there is another registered charter 

provider that can perform all of the requested 

service. In that case, the transit vehicles 

would enable the first registered charter 

provider to charge less for the service than 

the second registered charter provider that 

uses all private charter vehicles. 

(43) Q: Where do I submit my reports? 

A: FTA has adapted its electronic grants 

making system, TEAM, to include charter 

rule reporting. Grantees should file the 

required reports through TEAM. These 

reports will be available to the public 

through FTA’s charter bus service Web page 

at: http://ftateamweb.fta.dot.gov/Teamweb/ 

CharterRegistration/ 

QueryCharterReport.aspx. State Departments 

of Transportation are responsible for filing 

charter reports on behalf of its subrecipients 

that do not have access to TEAM. 

(d) Registration and Notification (49 CFR 

Subpart C) 

(44) Q: May a private provider register to 

receive notice of charter service requests 

from all 50 States? 

A: Yes. A private provider may register to 

receive notice from all 50 States; however, a 

private provider should only register for 

those states for which it can realistically 

originate service. 

(45) Q: May a registered charter provider 

select which portions of the service it would 

like to provide? 

A: No. A registered charter provider may 

not ‘‘cherry pick’’ the service described in the 

notice. In other words, if the e-mail 

notification describes service for an entire 

football season, then a registered charter 

provider that responds to the notice 

indicating it can provide only a couple of 

weekends of service would be nonresponsive to the e-mail notice. Public transit 

agencies may, however, include several 

individual charter events in the e-mail 

notification. Under those circumstances, a 

registered charter provider may select from 

those individual events to provide service. 

(46) Q: May a transit agency include 

information on ‘‘special requests’’ from the 

customer in the notice to registered charter 

providers? 

A: No. A transit agency must strictly follow 

the requirements of 49 CFR Section 604.14, 

otherwise the notice is void. A transit agency 

may, however, provide a generalized 

statement such as ‘‘Please do not respond to 

this notice if you are not interested or cannot 

perform the service in its entirety.’’

(47) Q: What happens if a transit agency 

sends out a notice regarding charter service, 

but later decides to perform the service free 

of charge and without a third party subsidy? 

A: If a transit agency believes it may 

receive the authority to provide the service 

free of charge, with no third party subsidy, 

then it should send out a new e-mail notice 

stating that it intends to provide the service 

free of charge. 

(48) Q: What happens if a registered charter 

provider initially indicates interest in 

providing the service described in a notice, 

but then later is unable to perform the 

service? 

A: If the registered charter provider acts in 

good faith by providing reasonable notice to 

the transit agency of its changed 

circumstances, and that registered charter 

provider was the only one to respond to the 

notice, then the transit agency may step back 

in and provide the service. 

(49) Q: What happens if a registered charter 

provider indicates interest in providing the 

service, but then does not contact the 

customer? 

A: A transit agency may step back in and 

provide the service if the registered charter 

provider was the only one to respond 

affirmatively to the notice. 

(50) Q: What happens if a registered charter 

provider indicates interest in providing the 

service, contacts the customer, and then fails 

to provide a price quote to the customer? 

A: If the requested service is 14 days or less 

away, a transit agency may step back in and 

provide the service if the registered charter 

provider was the only one to respond 

affirmatively to the notice upon filing a 

complaint with FTA to remove the registered 

charter provider from the FTA Charter 

Registration Web site. If the complaint of 

‘‘bad faith’’ negotiations is not sustained by 

FTA, the transit agency may face a penalty, 

as determined by FTA. If the requested 

service is more than 14 days away, and the 

transit agency desires to step back in, then 

upon filing a complaint alleging ‘‘bad faith’’

negotiations that is sustained by FTA, the 

transit agency may step back in. 

(51) Q: What happens if a transit agency 

entered into a contract to perform charter 

service before the effective date of the final 

rule? 

A: If the service described in the contract 

occurs after the effective date of the final 

rule, the service must be in conformance 

with the new charter regulation. 

(52) Q: What if the service described in the 

notice requires the use of park and ride lots 

owned by the transit agency? 

A: If the transit agency received Federal 

funds for those park and ride lots, then the 

transit agency should allow a registered 

charter provider to use those lots upon a 

showing of an acceptable incidental use (the 

transit agency retains satisfactory continuing 

control over the park and ride lot and the use 

does not interfere with the provision of 

public transportation) and if the registered 

charter provider signs an appropriate use and 

indemnification agreement. 

(53) Q: What if the registered charter 

provider does not provide quality charter 

service to the customer? 

A: If a registered charter provider does not 

provide service to the satisfaction of the 

customer, the customer may pursue a civil 

action against the registered charter provider 

in a court of law. If the registered charter 

provider also demonstrated bad faith or 

fraud, it can be removed from the FTA 

Charter Registration Web site. 

(e) Complaint & Investigation Process 

(54) Q: May a trade association or other 

operators that are unable to provide 

requested charter service have the right to file 

a complaint against the transit agency? 

A: Yes. A registered charter operator or its 

duly authorized representative, which 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. 

(55) Q: Is there a time limit for making 

complaints? 

A: Yes. Complaints must be filed within 90 

days of the alleged unauthorized charter 

service. 

(56) 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. 

(57) 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. 

(58) 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. 

(59) Q: What can a transit agency do if it 

believes that a registered charter provider is 

not bargaining in good faith with a customer? 

A: If a transit agency believes that a 

registered charter provider is not bargaining 

in good faith with the customer, the transit 

agency may file a complaint to remove the 

registered charter provider from FTA’s 

Charter Registration Web site. 

(60) Q: Does a registered charter provider 

have to charge the same fare or rate as a 

public transit agency? 

A: No. A registered charter provider is not 

under an obligation to charge the same fare 

or rate as public transit agency. A registered 

charter provider, however, must charge 

commercially reasonable rates. 

(61) 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. 


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Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 44935 

(62) 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 unless there is 

reason to suspect that the registered charter 

provider is committing fraud. 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. 

(63) Q: How will FTA determine the 

remedy for a violation of 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. 

(64) 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 

allegations, the complaint must allege more 

than a single event that included 

unauthorized charter service in order to 

establish a pattern of violations. 

(f) Miscellaneous 

(65) 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. 

(66) Q: What can a public transit agency do 

if there is a time sensitive event, such as a 

presidential inauguration, for which the 

transit agency does not have time to consult 

with all the private charter operators in its 

area? 

A: 49 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. If the inauguration also includes 

ancillary events, the public transit agency 

should refer the customer to the registration 

list. 

(67) Q: Are body-on-van-chassis vehicles 

classified as buses or vans under the charter 

regulation? 

A: Body-on-van-chassis vehicles are treated 

as vans under the charter regulation. 

(68) 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. 

(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, registered charter providers have 

enough vehicles to provide all of the service 

to the event? 

A. No. If after consultation with registered 

charter providers, 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. 

(70) Q: What happens if a customer 

specifically requests a trolley from a transit 

agency and there are no registered charter 

providers that have a trolley? 

A: FTA views trolleys as buses. Thus, all 

the privately owned buses must be engaged 

in service and unavailable before a transit 

agency may lease its trolley. Alternatively, 

the transit agency could enter into an 

agreement with all registered charter 

providers in its geographic service area to 

allow it to provide trolley charter services. 

(71) Q: How does a transit agency enter 

into an agreement with all registered charter 

providers in its geographic service area? 

A: A public transit agency should send an 

email notice to all registered charter 

providers of its intent to provide charter 

service. A registered charter provider must 

respond to the email notice either 

affirmatively or negatively. The transit 

agency should also indicate in the email 

notification that failure to respond to the 

email notice results in concurrence with the 

notification. 

(72) Q: Can a registered charter provider 

rescind its affirmative response to an email 

notification? 

A: Yes. If after further consideration or a 

change in circumstances for the registered 

charter provider, a registered charter provider 

may notify the customer and the transit 

agency that it is no longer interested in 

providing the requested charter service. At 

that point, the transit agency may make the 

decision to step back in to provide the 

service. 

(73) Q: What happens after a registered 

charter provider submits a quote for charter 

services to a customer? Does the transit 

agency have to review the quote? 

A: Once a registered charter provider 

responds affirmatively to an email 

notification and provides the customer a 

commercially reasonable quote, then the 

transit agency may not step back in to 

perform the service. A transit agency is not 

responsible for reviewing the quote 

submitted by a registered charter provider. 

FTA recommends that a registered charter 

provider include in the quote an expiration 

date for the offer. 

■ 4. Revise Appendix D to part 604 to 

read as follows: 

Appendix D to Part 604—Table of 

Potential Remedies 

Remedy Assessment Matrix 

EXTENT OF DEVIATION FROM REGULATORY REQUIREMENTS

Major Moderate Minor 

Economic Benefit: 

Major ....................................... $25,000/violation to 20,000 .......... $19,999/violation to 15,000 .......... $14,999/violation to 11,000. 

Moderate ................................. $10,999/violation to 8,000 ............ $7,999/violation to 5,000 .............. $4,999/violation to 3,000. 

Minor ....................................... $2,999/violation to 1,500 .............. 1,499/violation to 500 ................... $499/violation to 100. 

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 


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44936 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Rules and Regulations 

(6) Whether a recipient provided service 

described in a cease and desist order after 

issuance of such order by the Chief Counsel. 

Issued this 24th day of July, 2008. 

James S. Simpson, 

Administrator. 

[FR Doc. E8–17487 Filed 7–31–08; 8:45 am] 

BILLING CODE 4910–57–P 


rfrederick on PROD1PC67 with RULES