FTA grantees are prohibited from using federally funded equipment and facilities to provide charter service except on an incidental basis and when one or more of applicable exceptions set forth in the charter service regulation at 49 CFR 604.9 (b) applies.
- Does the grantee or its subrecipients, contractors, or lessees operate any charter service?
- If yes, has the grantee annually determined if there are any private charter operators willing and able to provide that service?
- If yes, did the grantee publish a notice within
the proposed geographic charter area describing the charter service
that the grantee wishes to provide limited to the days, times of day,
geographic area, and categories of revenue vehicles (buses and vans),
and stating that any private operator desiring to be considered willing
and able must submit evidence of such?
- In addition, did the grantee send a copy of the
notice to all private charter operators in the area, to other operators
that requested the notice, and to the United Motorcoach Association and
the American Bus Association?
Explanation
As defined in the regulations, charter service means “transportation using buses or vans, or facilities funded under the Acts of a group of persons who pursuant to a common purpose, under a single contract, at a fixed charge for the vehicle or service, have acquired the exclusive use of the vehicle service to travel together under an itinerary either specified in advance or modified after having left the place of origin.”
Service to regularly scheduled but infrequent events such as sporting events or annual festivals that is open door, with the fare, routes and schedules set by the grantee is public transportation, not charter. In contrast, if the organizers of the annual festival control the route, the schedule, and the ridership, the service is charter. Similarly, service to another city department, for example city council members or dignitaries visiting an economic development project, fits the definition of charter. The service is to a defined group of people, there are not single contracts between the grantee and the individual riders, patrons have exclusive use of the bus, and the riders have the sole authority to set the destination.
Grantees may provide charter service using FTA equipment or facilities only to the extent that there are no willing and able private operators who can provide the service. The grantee is further prohibited from providing charter service unless one or more of the exceptions discussed in Question 5 below apply. Any charter service that a grantee provides under any of the exceptions must be incidental, as defined in Question 6.
A grantee that wishes to provide charter service must first determine if there is at least one private charter operator willing and able to provide the charter service that the grantee wishes to provide. The regulations detail the procedural requirements for this determination. The process must, at a minimum, include:
- Placing a notice in a newspaper of general circulation within the proposed geographic charter service area
- Sending a copy of the notice to all
private charter service operators in the proposed geographic charter
service area and to any private operators that request the notice
- Sending a copy of the notice to the United Motorcoach Association and the American Bus Association
- Describing the charter service that the
grantee wishes to provide limited to the days, times of day, geographic
area, and categories of revenue vehicles, but not the capacity or the
duration of the charter service.
Only two categories of vehicles can be specified: buses and vans. A bus is a bus whether it is an intercity bus, a transit bus, or a replica trolley. A private operator does not have to demonstrate that it has any particular type of bus to be considered “able.”
FTA does allow grantees to describe the services they wish to provide in terms of trip purposes or certain groups (e.g., youths to the museum). To the extent that such descriptions allow private operators to decide whether they desire to perform a certain trip, they are useful to the “willing and able” determination process. Note, however, that the private operator need only express in writing its desire to perform charter service generally in the service area specified by the transit agency. A private operator is considered “willing” even if it refuses to provide charter service to some customers in the affected area.
The notice must instruct any operator who wishes to be considered willing and able to submit a statement of its desire and capability to provide the proposed service and proof of its legal authority. Any evidence submitted must be reviewed within 30 days. Within 60 days, the grantee must notify each private charter operator who submitted evidence of the results of the review.
Reason for the Question
49 CFR Part 604.11
Sources of Information
Discuss at the site visit the grantee’s procedures for determining the availability of willing and able private charter operators. Review copies of published notices, letters to or from private charter operators, and the results of the grantee’s review of evidence.
Determination
If the grantee provides no charter service (or provides it under Exceptions 2, 5, or 6 as described in the following question, which do not require a public notice process), it is not deficient with these requirements. If the grantee operates charter service, it is not deficient with the public notice requirements if it has evidence that it properly completed the willing and able determination process. It is deficient if its notice seeking willing and able private charter operators was not published as required, not sent to the appropriate parties, or if the responses were not properly evaluated and responded to.
Suggested Corrective Action
If the grantee desires to operate charters in the future, it must notify FTA of steps it will take to correct any errors in its public notice process before continuing with charter operations. The grantee must submit documentation to FTA that the process has been implemented correctly.
Back to Questions
- Under what exception is the charter service operated?
- Exception 1 – No willing and able private charter operators.
- Exception
2 – Entering into a contract with a private charter operator to provide
equipment or service if the private operator has a request for service
that exceeds its capacity or requires accessible equipment.
If yes, does the grantee have documentation of the contract?
- Exception
3 (Applies only in non-urbanized areas) – Hardship due to a private
operator’s minimum trip length requirements or distance from trip
origin.
If yes, did the grantee petition the FTA Chief Counsel to approve this exception?
- Exception 4 – Special events for which private operators are not capable of providing the service.
If yes, did the grantee petition the FTA Administrator to approve this exception?
- Exception
5 – Contract with a government entity or private, non-profit
organization providing service to persons with disabilities or eligible
to receive public assistance.
If yes, did the grantee obtain the required certifications from the sponsoring organization?
- Exception
6 (applies only in non-urbanized areas) – Contract with non-profit
social service organizations if more than 50 percent of passengers are
elderly.
If yes, did the grantee obtain the required certifications from the sponsoring organization?
- Exception 7 – Formal agreement executed between the grantee and all private operators determined to be willing and able.
If yes,
- Does the formal agreement specifically allow the grantee to provide the particular type of charter?
- Did
the grantee provide for this type of agreement in its annual public
charter notice or publish a separate notice of the agreement?
- Are all willing and able private operators party to the agreement?
Explanation
To the extent that there is at least one willing and able private charter operator, the grantee is prohibited from providing charter service unless one or more of the following exceptions apply.
- A grantee may provide any and all charter service if there are no willing and able private operators. This exception requires that the grantee complete the annual willing and able determination process.
- A grantee may enter into a contract with a private charter operator to provide equipment or service if the private operator has a request for service that exceeds its capacity or requires accessible equipment. Under this exception, the grantee provides service under contract to the private operator, who is responsible for the direction and control of the grantee’s vehicles while the service is being provided. The grantee does not contract directly with the public for the service. The grantee must have documentation of the contract with the private operator for the use of the equipment. Under this exception, the annual willing and able determination process is not required.
- A grantee in a non-urbanized area may petition FTA for an exception to provide charter service directly if the service provided by the willing or able private operators would create a hardship for customers. The hardship would result if State regulations require the operators to impose a minimum duration for the charter trip that exceeded the desired trip length, or the operators were located too far from the desired origin of the charter service. An annual willing and able determination process is required for this exception. The grantee must notify private operators that it is seeking this exception and give them an opportunity to respond. The regulations detail the other procedural requirements for submitting the petition.
- A grantee may operate charter service for special events. This exception requires the grantee to submit its petition to the FTA Administrator at least 90 days prior to the event. The petition must describe the event, explain how it is special, and explain the amount of charter service that private operators are not capable of providing. The Administrator will issue a written decision denying or granting the request in whole or in part. The willing and able determination process is not required for this exception.
- A grantee may provide service to government entities or non-profit agencies serving persons with disabilities or persons receiving public welfare funds. The contracting entity must provide a certification as specified in the regulations, which attests to the non-profit nature of the agency, identifies the passengers, declares that the requested charter trip is consistent with the function of the organization, and is consistent with Title VI of the Civil Rights Act of 1964. The willing and able determination process is not required for this exception.
- A grantee in a non-urbanized area may contract with a government entity or a private, non-profit organization if more than 50 percent of the passengers of the charter trip will be elderly. The contracting entity must provide a certification to the grantee similar to the certification identified above for urbanized areas. The willing and able determination process is not required for this exception.
- A grantee may provide charter service directly to a customer if it executes a formal agreement with all private operators it has determined to be willing and able. The agreement must specifically allow the grantee to provide the particular type of charter service defined. The grantee’s annual public charter notice must provide for this type of agreement or must be amended to refer to the agreement before the grantee undertakes the charter trips the agreement describes. The grantee and the private operators may define the excepted charter service in any agreed-to terms and conditions.
The requirements for each exception are summarized in the table below.
| Exception |
Willing and Able Determination Required ? |
Additional Procedural Requirements |
| 1. No willing and able private operators |
Yes |
None |
| 2. Contract with private operators to satisfy a capacity need or a need for accessible equipment |
No |
Contracts must be on file |
| 3. Hardship Petition (Non-urbanized areas only) |
Yes |
Submit petition to Chief Counsel. Provide written notice of petition request to private operators |
| 4. Special Events |
No |
Submit petition to Administrator at least 90 days in advance. |
| 5. Contracts with governmental entities or private, non-profit organizations |
No |
Obtain certifications of nonprofit status, that persons with disabilities are passengers, etc. |
| 6. Contracts with governmental entities or private non-profit organizations (Non-urbanized areas only) |
No |
Obtain certifications of nonprofit status, that more than 50 percent of passengers are elderly, etc. |
| 7. Formal agreement |
Yes |
- Agreement specifically allows the particular type of charter trip
-
Notice of agreement must be published. Annual public charter notice may
provide for the agreement or be amended and re-published.
- All willing and able private operators are party to the agreement
|
Some grantees have provided a substantial amount of incidental charter service with replica trolley vehicles, often in violation of the regulatory exceptions, based on a misunderstanding of FTA’s definition of categories of vehicles. As noted, the regulations recognize only two categories of vehicles: buses and vans. Rubber-tired replica trolleys, articulated buses, double decker buses, and other types of specifically modified equipment are all buses and are subject to the same rules as transit buses. If a charter customer insists on a particular type of equipment that the willing and able private operator does not have and the grantee does, the grantee still may not provide charter service with that equipment directly to the customer. If a customer wants a replica trolley bus and the private operator does not own one, the grantee cannot claim that there is no willing and able provider of trolleys. Even if a customer wants a transit bus and the private operator has only over-the-road coaches, the grantee cannot claim there is no willing and able provider of two-door buses. The “no willing and able” exception applies only if there are no willing and able operators with buses of any kind for charter service.
Further, the grantee cannot lease the trolley to a private operator and claim that the charter service is allowed under the exceptions unless the private operator has exhausted its supply of buses. The intent of the second exception is to satisfy a genuine capacity need for buses in general or a need for accessible equipment. “Specialized” equipment in this case does not refer to replica trolley buses or other modified buses. This exception does not recognize specific categories of buses.
Reason for the Question
49 CFR 604.9
Question 25 in FR Notice 11/3/87, page 42252, and Questions 46-47, page 42255.
Sources of Information
The grantee should Identify the exception(s) under which it is providing charter service and document that the service qualifies. Review copies of published notices, letters to or from private charter operators, contracts with private operators, correspondence regarding special events, procedures for obtaining the required certifications from non-profit agencies, copies of formal agreements with private operators, and charter logs maintained by the grantee. Pull-out logs or charter logs can provide information on bus use, especially to document that charter service is incidental. Check the grantee’s brochures and web site.
Determination
If the grantee operates charter service, it is not deficient if it operates charter service under the exceptions and it has proper documentation of its procedures. If the grantee provides charter service without documentation of a qualified exception, or inconsistent with the specific provisions of one of the exceptions, it is deficient.
Suggested Corrective Action
If the grantee desires to provide charter in the future, it must notify FTA of steps it will take to come into compliance with the regulations before continuing charter operations. The grantee must identify the exception under which it will provide charter service and submit documentation to FTA to support that the exception applies.
Back to Questions
- Is all charter service incidental, i.e., service
that does not interfere with or detract from the provision of mass
transportation service (off peak), does not shorten the mass transit life of the
equipment or facilities, and recovers fully allocated costs?
- Does documentation show that mileage and/or
hours are recorded and subtracted from the useful life of the equipment
used in charter service?
Explanation
Any charter service that a recipient provides under any of the allowed exceptions must be incidental charter service. Incidental charter service does not interfere with or detract from providing mass transportation service or does not shorten the mass transportation life of the equipment being used. FTA considers that service operated during the peak period and service provided in equipment that is in excess of an approved spare ratio is not incidental. The grantee must have documentation to demonstrate that mileage and/or hours are recorded and subtracted from the useful life of the equipment. Any reasonable method of calculation is sufficient. The calculation does not necessarily have to be done for each particular bus; averages can be applied to the entire fleet. The fully allocated cost must be recovered from the charter revenue. Note that as a general rule, free charter service is not incidental. However, FTA will consider certain types of free charter service to be incidental only in a very limited number of cases (e.g., free service to an economically disadvantaged group when there is no private operator willing and able to provide the service).
Reason for the Question
49 CFR Part 604.9(e)
Question 24 in FR Notice 11/3/87, page 42251.
Sources of Information
Charter logs and procedures and financial records provided by the grantee are sources of information, as well as tariffs showing charter rates.
Determination
The grantee is not deficient if it has adequate records to demonstrate that all charter operations are incidental. Corrective action may be required if the grantee’s record keeping procedures need to be improved. The grantee is deficient if it is unable to demonstrate that charter service is incidental to mass transit service. If the grantee’s charter service impacts the service life of vehicles and the grantee does not account for such service in its calculation of vehicle life, the grantee is deficient.
Suggested Corrective Action
TThe grantee must cease charter service that is not incidental. It must certify its understanding of and intent to comply with the charter regulations. Procedures for documenting charter use and subtracting mileage or hours from vehicle service life should be submitted to FTA.
Back to Questions
- Have any complaints been filed alleging that the grantee is operating charters in violation of the regulations?
Explanation
Any interested party who believes that a grantee is in violation of the charter regulations may submit a written complaint to FTA. The regulations specify how complaints will be processed. If FTA determines that a charter violation has occurred, appropriate remedies may be ordered.
Reason for the Question
Information
Sources of Information
Review documentation available in the regional office files and provided by the grantee.
Determination
The grantee is not deficient if no complaints have been received, or if the grantee is operating in accord with any orders resulting from a complaint determination. The grantee is deficient if a violation has not been remedied as ordered by FTA.
Suggested Corrective Action
The grantee must immediately implement remedies as directed and report to FTA when pending complaints are resolved.
Back to Questions
- Does the grantee provide charter service with
locally owned vehicles? Are the vehicles stored and maintained in an
FTA facility?
Explanation
Charter may be provided with locally owned equipment if the grantee creates a separate company operated exclusively with local funds or if it keeps its charter accounts completely separate from its mass transit division.
Reason for the Question
49 CFR Part 604.9(a).
See Question 26 in FR 11/3/87, Page 42252.
Sources of Information
Information may be obtained through discussions and documentation provided by the grantee and through observation during the facility inspection.
Determination
The grantee is not deficient if it can be documented that any charter service provided with locally owned vehicles is physically and financially independent from and receives no benefits from the grantee’s provision of mass transit. If the grantee has separate systems, but improved measures are required, or if charter service uses FTA-funded equipment or facilities, the grantee is deficient.
Suggested Corrective Action
All charter operations must immediately cease until procedures are in place to keep locally funded charter distinct from mass transit. Documentation is to be submitted to FTA.
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