[Federal Register Volume 73, Number 149 (Friday, August 1, 2008)]
[Rules and Regulations]
[Pages 44927-44936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17487]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 604

[Docket No. FTA-2005-22657]
RIN 2132-AA85


Charter Service

AGENCY: Federal Transit Administration, DOT.

ACTION: Final rule; response to petitions for reconsideration and 
amendments.

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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 
[email protected].

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

[[Page 44928]]

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

[[Page 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 
well-supported 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

[[Page 44930]]

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

[[Page 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.

0
Accordingly, 49 CFR part 604 is amended as follows:
0
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.


0
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.

0
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

[[Page 44932]]

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 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.
    (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?

[[Page 44933]]

    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 
[email protected]. 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?

[[Page 44934]]

    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 non-
responsive 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.

[[Page 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.

0
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     $19,999/violation to     $14,999/violation to
                                        20,000.                  15,000.                  11,000.
    Moderate.........................  $10,999/violation to     $7,999/violation to      $4,999/violation to
                                        8,000.                   5,000.                   3,000.
    Minor............................  $2,999/violation to      1,499/violation to 500.  $499/violation to 100.
                                        1,500.
----------------------------------------------------------------------------------------------------------------

FTA's Remedy Policy

-- This remedy policy applies to decisions by the Chief Counsel, 
Presiding Officials, and final determinations by the Administrator.

-- Remedy calculation is based on the following elements:

    (1) The nature and circumstances of the violation;
    (2) The extent and gravity of the violation (``extent of 
deviation from regulatory requirements'');
    (3) The revenue earned (``economic benefit'') by providing the 
charter service;
    (4) The operating budget of the recipient;
    (5) Such other matters as justice may require; and

[[Page 44936]]

    (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