Transit Manager's Toolkit

Introduction

This section of the Transit Manager’s Toolkit summarizes the federal requirements for Federal Transit Administration (FTA) recipients and subrecipients on providing charter services (transportation provided at the request of a third party for either exclusive use of a bus or van for a negotiated price, or to the public for special events with a premium fare or paid for in whole or in part by a third party).  The annual Certifications and Assurances signed by recipients of FTA funds include the Charter Service Agreement, under which the applicant agrees to comply with FTA’s Charter Service regulations (49 CFR Part 604). 

As explained on FTA’s Charter Bus Service Regulations webpage, the Charter Service Regulations (49 CFR Part 604) protect private charter operators from unauthorized competition from FTA recipients by ensuring that transit agencies that receive federal funding do not unfairly compete with them.  As stated in the FTA’s FY23 Comprehensive Review Contractor’s Manual, FTA recipients are prohibited from using FTA-funded equipment and facilities to provide charter service that unfairly competes with private charter operators.  A recipient may operate charter only when the service meets a specified exception or exemption as defined in the rule. 

Under the circumstances allowed for FTA recipients, charter services can be a source of income to a rural transit agency.  Rural transit agencies can also help meet needs for wheelchair-accessible charter bus service which could otherwise only be met by privately owned bus companies located very far away from the service area.  For these reasons, rural transit agencies should be aware of the circumstances (exemptions and exceptions) under which charter service is allowable, and the steps needed to comply with the FTA requirements, to comply with charter rules. 

This section of the Toolkit is organized in the following subsections: 

• What Charter Service Is and Is Not 
• Regulatory Definition 
• Demand Response Service versus Charter Service 
• Applicability of the Charter Service Regulations and Exemptions 
• Identifying Charter Service 
• Under What Circumstances (Exceptions) Can an FTA Recipient Provide Charter Service? 
• 1. Government Officials on Official Government Business 
• 2. Qualified Human Service Organizations 
• 3. Leasing FTA-funded Equipment and Drivers 
• 4. When No Registered Charter Provider Responds to Notice from a Recipient 
• 5. Agreement with Registered Charter Providers 
• 6. Petitions to the FTA Administrator 
• Examples of Rural Transit Agencies Coordinating or Providing Charter Services 
• What Records Must Be Maintained and Reported on the Charter Registration Website? 
• Non-Compliance with FTA Charter Service Rules What Charter Service Guidance Is Available from FTA? 
• Section Sources 

This section of the Toolkit is intended to provide an introduction to the FTA’s charter service regulations.  For more detailed information and guidance on various situations, transit managers are encouraged to read 49 CFR Part 604 Appendix C – Frequently Asked Questions well as the FTA Charter Bus Service Regulations web page and guidance resources listed at the end of this section. They can also contact the FTA Charter Service Ombudsman. 

The complexities of the definition of charter services and when the charter regulations apply can sometimes make it difficult to determine whether or not a requested service would constitute charter service, particularly for rural transit agencies.  FTA’s Section  5311 Charter Service Flow Chart can help guide a rural transit agency in making this determination.



The charter service regulations allow limited exceptions when an FTA recipient or subrecipient may provide charter service, including: 

1. For official government business 
2. For qualified human service organizations (serving older adults, people with disabilities, or people with low income) 
3. When no registered charter provider responds to a notice sent by a recipient 
4. When leasing vehicles (must exhaust all available vehicles first), 
5. By agreement with all registered charter providers 
6. Under an approved Petition to the FTA Administrator 

To qualify for any of these exemptions, the transit agency must follow certain procedures which are detailed in Subpart B to 49 CFR Part 604 and summarized below.

An FTA recipient/subrecipient may provide charter service to government officials (federal, state, and local) for official government business, which can include non-transit related purposes, if the recipient provides the service in its geographic service area and does not generate revenue from the charter service (except as required by law).  As defined in the regulations, ‘‘government official’’ means an individual elected or appointed at the local, state, or federal level. 

After providing such service, the recipient must keep a record of: 

• The government organization's name, address, phone number, and e-mail address, 
• The date and time of service, 
• The number of passengers (specifically noting the number of government officials on the trip), 
• The origin, destination, and trip length (miles and hours), 
• The fee collected, if any, and 
• The vehicle number for the vehicle used to provide the service. 

Provision of charter service of government officials on official government business is not allowed to exceed 80 charter service hours per year. However, the recipient may petition the FTA Administrator for additional charter service hours with a petition that meets the requirements detailed in 49 CFR 604.6(b). FTA posts requests for additional charter service hours under this exception, as well as the FTA Administrator’s decision, in the Government Officials Exception docket (docket number FTA-2007-0020) at www.regulations.gov. 

A recipient may provide charter service to a qualified human service organization (QHSO) for the purpose of serving people with mobility limitations related to advanced age, disabilities, or low income. A QHSO is required to register on the FTA Charter Registration website in accordance with 49 CFR Section 604.15 unless the QHSO receives funding, directly or indirectly, from the programs listed in Appendix A of 49 CFR Part 604. 



Whether or not the QHSO receives funding from Appendix A programs, a recipient providing charter service to a QHSO must keep a record of: 

• The QHSO's name, address, phone number, and e-mail address, 
• The date and time of service, 
• The number of passengers, 
• The origin, destination, and trip length (miles and hours), 
• The fee collected, if any, and 
• The vehicle number for the vehicle used to provide the service. 

A recipient may lease its FTA-funded equipment and drivers to registered charter providers for charter service if all of the conditions detailed in 49 CFR Section 604.8 are met.  For leasing of FTA-funded equipment and drivers to be allowable, the private charter operator must: 

• be registered on the FTA Charter Registration website, 
• own and operate buses or vans in a charter service business. 
• have inadequate capacity (including capacity of accessible vehicles) to meet a request for charter service, and 
• exhaust all of the available vehicles of all registered charter providers in the recipient's geographic service area. 



A recipient leasing vehicles and drivers to a registered charter provider under this exception must keep a record of: 

• The registered charter provider's name, address, telephone number, and e-mail address, 
• The number of vehicles leased, types of vehicles leased, and vehicle identification numbers, and 
• The documentation presented by the registered charter provider demonstrating that it meets the required conditions for the leasing to be allowable. 

A recipient is allowed to provide charter service if: 

• a notice is emailed to all charter providers in the recipient's geographic service area registered on the FTA Charter Registration website, in accordance with 49 CFR Section 604.14, and 
• no registered charter provider responds to the notice within the response time window. 

A sample email notice can be downloaded from the FTA website.   

If the requested charter service would be provided in fewer than 30 days, registered charter providers desiring to provide the service must respond within 72 hours.  If the requested charter service would be provided in 30 days or more, the window to respond to the notice is 14 days. 

If, however, a registered charter provider indicates an interest in providing the charter service set out in the notice issued and has informed the recipient of its interest, the recipient is not allowed to provide the service. 



After providing service under this exception, the recipient must keep a record of: 

• The group's name, address, phone number, and e-mail address, 
• The date and time of service, 
• The number of passengers, 
• The origin, destination, and trip length (miles and hours), 
• The fee collected, if any, and 
• The vehicle number for the vehicle used to provide the service. 

A recipient may provide charter service directly to a customer consistent with an agreement with all registered charter providers in the recipient's geographic service area.  If a new charter provider registers in the geographic service area after the initial agreement, the recipient may continue to provide charter service under the previous agreement with the other charter providers up to 90 days without an agreement with the newly registered charter provider.  Any of the parties to an agreement may cancel the agreement at any time after providing the recipient a 90-day notice.



A recipient may petition the FTA Administrator for an exception to the charter service regulations to provide charter service directly to a customer for: 

• Events of regional or national significance, 
• Hardship (only for non-urbanized areas under 50,000 in population or small urbanized areas under 200,000 in population), or 
• Unique and time sensitive events (e.g., funerals of local, regional, or national significance) that are in the public's interest. 

The requirements and procedures for petitioning the FTA Administrator are detailed in 49 CFR Section 604.11, including the specific information required to justify the request.  The Form for Petition to the Administrator can be downloaded in PDF format from the Charter Bus Service Forms web page. 

For an event of regional or national significance, the petition must be submitted at least 90 days prior to the first day of the event and include details about consultation with and utilization of registered charter providers in providing the charter service, as well as a certification that the recipient has exhausted all the registered charter providers in its geographic service area.   

For hardship petitions, the regulations only allow the FTA recipient/subrecipient to provide the service if the registered charter provider has deadhead time that exceeds total trip time from initial pick-up to final drop-off, including wait time, with the petition describing how the registered charter provider's minimum duration would create a hardship on the group requesting the charter service. 

The FTA Administrator reviews petitions that meet the requirements set forth in 49 CFR Section 604.11(b) (requesting additional information if needed), issues a written decision denying or granting the request in whole or in part, files the decision in the Petitions to the Administrator docket, number FTA-2007-0022 at http://www.regulations.gov, and notifies the recipient.  The recipient must retain a copy of the Administrator's approval for a period of at least three years and include it in the recipient's quarterly report posted on the charter registration Web site. 

National RTAP identified several examples of rural transit agencies coordinating or providing charter services, or in one case referring requests to local charter companies.  These examples of charter service coordination are provided for informational purposes only. Please contact FTA for any questions about specific charter requests. 

• In Paul Bunyan Transit’s June 2019 Five-Year Transit System Plan, it is noted that the transit agency coordinates with the local charter bus company by referring each other’s services and helping each other when needed. 
• A December 2020 Report on Transportation Coordination to the Iowa General Assembly and Governor notes that, in recent years, several of the regional public transit agencies in Iowa have been able to provide requested charter trips after notifying local registered charter providers of the requested trips and receiving no responses. 
• Fresno County Rural Transit Agency (FCRTA) refers requests for charter bus service to local private sector charter operators, according to FCRTA’s Short Range Transit Plan for the Rural Fresno County Area 2022-2026. 

Recordkeeping requirements for each of the six exceptions described above are included in the description of that exception.  A recipient that provides charter service under any of the six types of exceptions must maintain required notices and records in an electronic format for at least three years from the date of the charter service or lease. The records must include a clear statement identifying which exception the recipient relied upon when it provided the charter service. 

A single document or charter log may include all charter service trips provided during the quarter.  The recipient may exclude specific origin-to-destination information for safety and security reasons, but the record of the service must describe the reason why such information was excluded and provide generalized information. 

The recipient must also record each charter service provided under four of the exceptions on the FTA Charter Registration website 30 days following each calendar quarter.  Details about these reporting requirements can be found in 49 CFR Section 604.12.   

As indicated in FTA’s FY23 Comprehensive Review Contractor’s Manual, the four exceptions that must be reported on the quarterly reports are:   

• Government officials on official government business (49 CFR Section 604.6), 
• Qualified human service organizations (49 CFR Section 604.7), 
• Leasing FTA-funded equipment and drivers (49 CFR Section 604.8), and 
• When no registered charter provider responds to notice from a recipient (49 CFR Section 604.9). 

FTA’s FY23 Comprehensive Review Contractor’s Manual also notes that FTA expects recipients to maintain the following records: 

• A charter service log, along with a clear statement identifying which exception the recipient relied upon when it provided charter service, 
• A list of real property (including facilities) and equipment used in charter bus operations for recipients, subrecipients, contractors, and lessees, 
• A list of subrecipients, contractors, and lessees that operate charter service, and 
• A list of any complaints received related to charter bus service. 

These records are requested as part of FTA State Management Reviews, which are described in the Grant Compliance Requirements section of the Toolkit.

In the event a private charter service provider (or other interested party) believes that an FTA recipient/subrecipient has an unfair advantage in competing for charter service contracts, it can seek an advisory opinion (and potentially a “cease and desist” order) from the FTA Chief Counsel’s Office.  The process for doing so is detailed in 49 CFR Section 604, Subpart E. 

The FTA charter service regulations also provide, in 49 CFR Section 604, Subpart F, for filing and processing complaints to challenge the registration of a private charter operator or qualified human service organization on the FTA charter registration Web site, or regarding the provision of charter service by a recipient. 

Appendix D to 49 CFR Part 604 specifies ranges of potential remedies (fines) for charter service violations. 

For more information, FTA’s website provides helpful resources for complying with the charter service regulations, including: 

• Charter Bus Service Registration web page, which includes links to download registration guides.  Transit managers should refer to this web page for the most recent FTA guidance. 
• Charter Service Final Rule Fact Sheet 
• Charter Service Rule Summary (PowerPoint)               
• Demand Response Service Explained               
• Questions and Answers (Appendix C to 49 CFR Part 604) 
• Section 5311 and Charter Rule Explained Fact Sheet 
• Section 5311 Charter Service Identification Flow Chart 



FTA has a Charter Service Ombudsman who can answer questions emailed to ombudsman.charterservice@dot.gov.  

• 49 CFR Part 601, Subpart D – Emergency Procedures for Public Transportation Systems
• 49 CFR Part 604 – Charter Service 
• FTA, Charter Bus Service Regulations web page
• FTA, Charter Registration Website
• FTA, Demand Response Service Explained               
• FTA, FY2022 Annual List of Certifications and Assurances for FTA Grants and Cooperative Agreements
• FTA, FY23 Comprehensive Review Contractor’s Manual
• FTA, Section 5311 and Charter Rule Explained Fact Sheet
• FTA, Section 5311 Charter Service Identification Flow Chart
• Fresno County Rural Transit Agency, Short Range Transit Plan for the Rural Fresno County Area 2022-2026
• Iowa Department of Transportation, Transportation Coordination in Iowa, Report to the Iowa General Assembly and Governor Kim Reynolds
• Paul Bunyan Transit, Five-Year Transit System Plan