[Federal Register Volume 66, Number 181 (Tuesday, September 18, 2001)]
[Proposed Rules]
[Pages 48110-48112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23256]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 604

[Docket No. FTA-97-2624]
RIN 2132-AA58


Charter Services Demonstration Program

AGENCY: Federal Transit Administration, DOT.

ACTION: Withdrawal of rulemaking.

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SUMMARY: This document withdraws the rulemaking in which the Federal 
Transit Administration (FTA) proposed to amend its requirements on 
charter bus service. On June 23, 1997, FTA issued a notice of proposed 
rulemaking (NPRM) in which it sought public comment on proposed 
amendments to the charter service regulations. Based on a review of the 
comments to the NPRM, FTA has concluded that there is no consensus that 
the proposed changes will improve the ability of public operators to 
utilize the existing regulatory exceptions to the prohibition against 
providing charter service when a private charter operator is willing 
and able to do so. Accordingly, FTA hereby withdraws this rulemaking.

FOR FURTHER INFORMATION CONTACT: Elizabeth S. Martineau, Attorney 
Advisor, Department of Transportation, Federal Transit Administration, 
400 Seventh Street, SW., Washington, DC 20590, 202-366-1936.

SUPPLEMENTARY INFORMATION: All documents pertaining to this regulatory 
action, including the comments to the NPRM, may be viewed and copied at 
the Docket Management Facility, U.S. DOT Dockets, Room PL-401, 
Department of Transportation, 400 7th St., SW., Washington, DC 20590-
0001 between 10 a.m. and 5 p.m., E.T., Monday through Friday, except 
Federal holidays. An electronic version of this document, and all 
documents entered into this docket, are available on the World Wide Web 
at http://dms.dot.gov.
    Comments may also be viewed on the Internet. To read the comments 
on the Internet, take the following steps: Go to the Docket Management 
System (``DMS'') Web page of the Department of Transportation (http://dms.dot.gov). On that page, click on ``search.'' On the next page 
(http://dms.dot.gov/search), type in the four-digit docket number. The 
docket number for this rulemaking is 2624. After typing the docket 
number, click on ``search.'' On the next page, which contains docket 
snummary information for the docket you selected, click on the desired 
comments. You may download the comments.

I. Background

    Pursuant to Section 3040 of the Intermodal Surface Transportation 
Efficiency Act of 1991 (ISTEA), FTA established a demonstration program 
that would permit public transit operators to provide charter services 
for the purpose of meeting the transit needs of the government, civic, 
charitable, and other community activities that otherwise would not be 
served in a cost effective and efficient manner. Congress required the 
creation of this demonstration program in response to public transit 
operators' concerns that existing charter service regulations were 
causing certain transit needs to go unmet.
    Public transit operators were particularly concerned about the 
effect of 49 CFR 604.9. This provision prohibits an FTA recipient from 
using FTA equipment or facilities to provide any charter service where 
there is at least one private charter operator that is willing and able 
to provide the charter service, unless one of the exceptions set out in 
the regulations is met. Some FTA recipients asserted that they were 
unable to provide needed charter services to their communities when a 
private operator had indicated that it was ``willing and able`` but 
actually did not have the desire or capability to provide certain 
trips.
    According to the Conference Report accompanying ISTEA, (H. Rpt. No. 
404, 102nd Cong., 1st Sess. 424 (1991)), the demonstration program was 
intended to provide public transit operators with additional 
flexibility not afforded under the existing charter regulations, 
without creating undue competition for privately owned charter 
operators. The Conference Report also indicated that the results of the 
demonstration program were expected to provide Congress and FTA with 
data to determine the most effective method for providing charter 
services to local communities and whether the current regulations were 
in need of modification.
    FTA selected the following public transit operators in four states 
encompassing large and medium sized cities, as well as rural areas, to 
participate in the demonstration program:

Monterey-Salinas Transit, Monterey, California;
Central Oklahoma Transportation and Parking Authority, Oklahoma City, 
Oklahoma;
Bi-State Development Agency, St. Louis, Missouri;
Yolo County Transit Authority, Yolo, California;
Isabella County Transportation Commission, Isabella County, Michigan;
Capital Area Transit Authority, Lansing, Michigan;
Marquette County Area Transportation Authority, Marquette, Michigan;
Muskegon Area Transit System, Muskegon, Michigan.

FTA authorized these public transit operators to conduct their 
demonstration programs beginning on August 9, 1993, and continuing 
through October 31, 1995.

II. Results of the Charter Demonstration Program

    The data gathered as a result of the charter demonstration program 
did not support the public operators' claims of unmet needs for the 
groups for which the demonstration was primarily intended: government, 
civic, charitable, and other community activities. Although the public 
operators in each area identified groups that would not be

[[Page 48111]]

otherwise served in a cost-effective manner, the charter service 
provided during the demonstration did not serve a significant number of 
these groups or significantly increase the level of service to these 
groups. This information was submitted to Congress on June 16, 1998.

III. FTA's Recommended Action and Comments to the NPRM

    The results of the demonstration program did not indicate the need 
for FTA to significantly alter its current service regulations. The 
results, however, did show that there may be a need for minor changes 
in order to improve the ability of public operators to utilize the 
existing exceptions to the prohibition against their providing charter 
service if a private charter operator is willing and able to do so.
    In its June 23, 1997, NPRM, found at 62 FR 33793, FTA sought 
comment on the following proposals. FTA received twenty-five written 
comments on the NPRM from public transit authorities, private sector 
charter providers, trade associations, a union, and a member of 
Congress.

A. Definition of ``Willing and Able'' Private Operators and Review of 
the ``Willing and Able'' Determination Process

    Proposed change: In order to exclude a private charter operator who 
may be incapable of providing service within a public transit 
operator's service area, FTA proposed to narrow the definition of 
``willing and able'' contained in 49 CFR 604.5. The amended definition 
would have defined a ``willing and able'' operator as an operator 
having one bus or one van and possessing the legal authority to operate 
the service. That authority included having the necessary safety 
certifications, licenses and other legal prerequisites to provide 
charter service to parties located within a 125-mile radius of the 
recipient's service area.
    FTA also proposed to amend 49 CFR 604.13(e) to allow public transit 
operators to look behind evidence that a private charter operator is 
``willing and able'' to provide the requested service if it had valid 
reasons to believe that the operator was unable to effectively serve 
local charter needs. The public transit operator would have been 
required to inform FTA of the finding and FTA would then have made a 
determination regarding the private operator in question.
    Comments: The comments filed generally did not support the proposal 
to limit the definition of ``willing and able'' to private charter 
operators located within 125 miles of the service area. Only two 
commenters expressed support for FTA's proposed change. Twelve 
commenters suggested that the 125-mile radius was too large and should 
be reduced. Among the reasons relied on by these commenters were 
increased burdens on public transit agencies due to surveying 
additional private operators, increased costs to consumers resulting 
from the extra drive time to reach the charter group, and a low 
probability that private charter operators would travel the 125 miles 
to serve some charter groups.
    Eleven commenters submitted alternative suggestions for limiting 
the definition of ``willing and able.'' Seven of these comments 
proposed modifications of the geographic limit, which ranged from only 
the service area to a 75-mile radius. Two commenters favored limiting 
the definition to a radius of a one hour drive from the service area. 
In addition, two other commenters recommended that FTA change the 
existing regulations to permit public transit operators to provide 
charter service to local governments, nonprofit agencies, and community 
groups.
    Four commenters asserted that no change should be made to the 
current regulations. They reasoned that any change in the current 
regulations would create unfair competition for private operators and 
that the 125-mile radius was arbitrary and the proposal was unclear in 
how the boundary was to be calculated. It was also argued that private 
charter operators outside the geographic limit should be considered 
``willing and able'' because they may choose to serve the area by 
positioning vehicles in remote locations or by using the terminal 
facilities or vehicles of competitors.
    Three comments were filed supporting FTA's proposal to allow public 
transit operators to look behind evidence that a private charter 
operator is ``willing and able'' to provide the requested service where 
it has valid reasons to believe that the operator is unable to 
effectively serve the local charter needs. One commenter opposed the 
change stating that it would only invite disputes between private and 
public entities.

B. Extension of Non-Urbanized Area Hardship Exception to Small 
Urbanized Areas

    Proposed Change: Under 49 CFR 604.9(b)(3), an FTA recipient may 
petition FTA for an exception to provide charter service directly to 
the customer in non-urbanized areas (population under 50,000) if the 
charter service provided by the ``willing and able'' private operator 
would create a hardship on the customer due to state-imposed minimum 
duration requirements. FTA proposed to extend this exception to small 
urbanized areas (population between 50,000 and 200,000).
    Comments: Seven comments were filed supporting an extension of the 
non-urbanized area hardship exception to small urbanized areas. Four 
comments were filed objecting to the extension of the hardship 
exception. These commenters objecting stated that the extension would 
cause unfair increases in competition and asserted the results of the 
charter demonstration project failed to provide evidence of unmet 
needs. Finally, one commenter added that the hardship exception applies 
to hardship from state-imposed minimum charges and that few states may 
actually impose such charges.

C. Amendment of the Exception for Formal Agreements With All Private 
Charter Operators

    Proposed Change: Under 49 CFR 604.9(b)(7), if a public transit 
operator obtains a written agreement with all ``willing and able'' 
private operators, it can provide certain specified types of charter 
services directly to the customer. Some FTA recipients have asserted 
that it is often impossible to obtain such an agreement with all of the 
various organizations. Therefore, FTA proposed to amend 49 CFR 
604.9(b)(7) to provide that only a two-thirds majority of all local 
private operators would be required for a formal charter agreement.
    Comments: Three commenters stated that FTA should not reduce the 
level of agreement required under the formal agreement exception to 
two-thirds of local operators. These commenters based their opposition 
on the possible unfair injury that the change might have on those 
carriers not a party to the agreement. One of these commenters 
suggested that if a reduction is necessary, the two-thirds 
determination should be based on percentage of revenue, passengers 
miles, or some other criteria in order to ensure that large carriers 
are not penalized where a sufficient number of small carriers agree to 
the exception.
    Six commenters supported the proposed reduction in the exception 
for formal agreements to two-thirds. Six other commenters suggested 
that FTA go further and reduce the minimum required to create a formal 
agreement to a simple majority of ``willing and able'' charter 
operators.

[[Page 48112]]

D. Implementation of an Outreach Program To Foster a Better 
Understanding of the Charter Regulations and Exceptions

    Proposed Change: The demonstration program revealed that many 
public and private operators have an incomplete understanding of FTA's 
charter requirements and how to use them effectively to serve the 
charter needs in their communities. Therefore, FTA proposed to 
implement an outreach program for public and private operators to 
provide them with a better understanding of how to better utilize the 
charter regulations and exceptions. The outreach program would have 
included the distribution of brochures and literature to public and 
private operators describing the charter bus regulations and 
exceptions, and examples of how to best utilize the exception process. 
FTA also proposed to sponsor seminars and information sessions on the 
charter requirements at meetings and conferences sponsored by various 
industry groups.
    Comments: Eight commenters supported the outreach program as set 
out in the NPRM. One commenter expressed the view that the outreach 
program should be designed with the customer in mind. Another commenter 
stated that an outreach program was unnecessary because the regulations 
are clear, but the problem is that the exceptions are too restrictive. 
One commenter stated that an outreach program was unnecessary because 
nearly all public operators were familiar with these long-standing 
regulations.

IV. Conclusion

    FTA has decided not to make any changes to the charter bus 
regulations in 49 CFR Part 604. The current rule is not being changed 
at this time because there is no consensus that the proposed changes 
will improve the ability of public operators to utilize the existing 
exceptions to the prohibition against their providing charter service 
when a private charter operator is willing and able to provide such 
service.

    Issued on: September 13, 2001.
Jennifer L. Dorn,
Administrator.
[FR Doc. 01-23256 Filed 9-17-01; 8:45 am]
BILLING CODE 4910-57-M