The purpose of this part is to prescribe policies and procedures to implement the prohibition in 49 U.S.C. 5323(f) regarding the provision of school bus transportation service that exclusively transports students and school personnel in competition with a private school bus operator.

These regulations apply to all recipients of Federal financial assistance under 49 U.S.C. chapter 53 for a capital project, or to operate public transportation equipment or a public transportation facility.

(a) Except as otherwise provided, terms defined in 49 U.S.C. chapter 53 are used in this part as so defined.

(b) For purposes of this part—

Administrator means the Federal Transit Administrator or his or her designee.

Adequate transportation means transportation for students and school personnel which the Administrator determines conforms to applicable safety laws; is on time; poses a minimum of discipline problems; is not subject to fluctuating rates; and is operated efficiently and in harmony with state educational goals and programs.

Assistance means Federal financial assistance for the purchase of buses and the construction or operation of facilities and equipment for use in providing public transportation services under 49 U.S.C. chapter 53, but does not include research, development and demonstration projects.

Incidental means the transportation of school students, personnel and equipment in charter bus operations during off peak hours which does not interfere with regularly scheduled service to the public.

Interested party means an individual, partnership, corporation, association, or public or private organization that has a financial interest which is adversely affected by the act or acts of a recipient with respect to school bus operations.

Reasonable Rates means rates found by the Administrator to be fair and equitable taking into consideration the conditions in the local surrounding area.

Recipient means a recipient of assistance under 49 U.S.C. chapter 53.

School bus operations means transportation by bus exclusively for school students, personnel and equipment in Type I and Type II school vehicles as defined in Highway Safety Program Guideline No. 17.

Tripper service means regularly scheduled public transportation service which is open to the public, and which is designed or modified to accommodate the needs of school students and personnel, using various fare collections or subsidy systems. Buses used in tripper service must be clearly marked as open to the public and may not carry designations such as “school bus” or “school special.” These buses may stop only at a recipient or operator's regular service stop. All routes traveled by tripper buses must be within a recipient's or operator's regular route service as indicated in their published route schedules.

A recipient may not engage in school bus operations in competition with private school bus operators unless it demonstrates to the satisfaction of the Administrator that:

(a) It operates a school system in the area to be served and also operates a separate and exclusive school bus program for that school system; and

(b) Private school bus operators are unable to provide adequate transportation that complies with applicable safety standards at reasonable rates.

No recipient or operator of project equipment shall engage in school bus operations using buses, facilities or equipment funded under 49 U.S.C. chapter 53. A recipient or operator may, however, use such buses, facilities and equipment for the transportation of school students, personnel and equipment in incidental charter bus operations. Such use of project equipment is subject to part 604 of this title.

The prohibition in § 605.12 shall not apply to tripper service.

Except as provided in § 605.11, no assistance shall be provided under 49 U.S.C. chapter 53 unless the recipient has executed the Private Sector Protections category of the current annual Certifications and Assurances confirming that the recipient will not engage in school bus operations exclusively for the transportation of students and school personnel in competition with private school bus operators.

(a) Each recipient who engages or wishes to engage in school bus operations shall include a certification that it has provided written notice to all private school bus operators operating in the area to be served of its application for assistance and its proposed or existing school bus operations.

(b) The notice required by paragraph (a) of this section shall include the following information:

(1) A description of the area to be served by the recipient.

(2) An estimation of the number of each type of bus which will be employed on the proposed school bus operations, and the number of weekdays those buses will be available for school bus operations.

(3) A statement setting forth reasons the recipient feels it should be allowed to engage in school bus operations under § 605.11.

(4) A statement that private school bus operators may file written comments on a recipient's proposed or existing school bus operations.

(c) Copies of the application for assistance and notice required by paragraph (a) shall be available for inspection during the regular business hours at the office of the recipient.

If there are no private school bus operators operating in the recipient's service area, the recipient may so certify in lieu of meeting the requirements of § 605.16.

Any interested party may file a complaint with the Administrator alleging a violation of 49 U.S.C. 5323(f) or the terms of an agreement under § 605.14 (“Complaint”). A complaint must be in writing, must specify in detail the action claimed to violate the agreement, and must be accompanied by sufficient evidence to enable the Administrator to make a preliminary determination as to whether there is probable cause that a violation has taken place.

On receipt of any complaint under § 605.30, or on the Administrator's own motion if at any time he or she shall have reason to believe that a violation may have occurred, the Administrator will provide written notification to the recipient (“Respondent”) that a violation has probably occurred. The Administrator will inform the respondent of the conduct which constitutes a probable violation of the agreement.

The Administrator will allow the respondent not more than 30 days to show cause, by submission of evidence, why no violation occurred. A like period shall be allowed to the complainant, if any, during which the complainant may submit evidence to rebut the evidence offered by the respondent. The Administrator may undertake such further investigation, as deemed necessary, including the holding of an evidentiary hearing or hearings.

(a) After reviewing the results of such investigation, including hearing transcripts, if any, and all evidence submitted by the parties, the Administrator will make a written determination as to whether the respondent has engaged in school bus operations in violation of the terms of the agreement.

(b) If the Administrator determines that there has been a violation of the agreement, the Administrator will order remedial measures as deemed appropriate.

(c) The determination by the Administrator will include an analysis and explanation of his or her findings.

If the Administrator determines, pursuant to this subpart, that there has been a violation of the terms of the agreement or 49 U.S.C. 5323(f)(2), he or she may bar a recipient or operator from the receipt of further financial assistance for public transportation.

The determination of the Administrator pursuant to this subpart shall be final and conclusive on all parties, but shall be subject to judicial review pursuant to 5 U.S.C. 701-706.

The Administrator may order any recipient or operator for the recipient, to file special or separate reports setting forth information relating to any transportation service rendered by such recipient or operator, in addition to any other reports required by this part.