1. (a) Purpose. This section describes reporting requirements for recipients of state and federal public transportation grant funds and monitoring activities to be performed by the department.

2. (b) Reporting requirements. The contractor shall submit to the department quarterly operations reports and survey reports on the form prescribed by the department. The contractor shall also assist the department in the completion of the biennial inventory of project equipment as described in §31.50 of this title (relating to Recordkeeping and Inventory Requirements).

   1. (1) Quarterly reports. The contractor must forward quarterly operations reports for each calendar quarter until the contractor ceases providing public transportation services and/or equipment is disposed of in accordance with §31.57 of this title (relating to Disposition).
   2. (2) Survey forms. Contractors under the Sections 16 and 18 federal grant programs must also provide survey forms for the months of March and September each year. The surveys provide more detailed information to the department on ridership classification, categories of expenditures, and sources of revenue.
   3. (3) Biennial inventory. Each contractor must provide information on state and federally funded equipment as described in §31.50 of this title (relating to Recordkeeping and Inventory Requirements).

   4. (4) Reports of significant events. The recipient shall promptly advise the department in writing of events that have a significant impact upon the delivery of public transportation services, including:

      1. (A) problems, delays, or adverse conditions that will materially affect the ability to attain program objectives, prevent the meeting of time schedules and goals, or preclude the attainment of project work units by established time periods (this disclosure shall be accompanied by a statement of the action taken, or contemplated, and any departmental assistance needed to resolve the situation); and
      2. (B) favorable developments or events that will enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected.
   5. (5) Miscellaneous reports. The contractor shall cooperate with the department in providing other information as requested by state and federal funding agencies, including information described in §31.11 of this title (relating to Formula Program).
3. (c) Department monitoring. The department shall rely on contractor reports as described in subsection (b) of this section as the primary means of monitoring contractor performance. In addition, department personnel will meet with the contractor at least quarterly to discuss problems encountered, the contractor's need for technical assistance, and other topics related to the provision of public transportation services.

4. (d) Noncompliance. A contractor's failure to observe and comply with federal and state program requirements will cause the department to find that contractor in noncompliance and take actions as specified in this subsection.

   1. (1) Minor deficiencies. A minor deficiency is an error which can generally be attributed to a contractor's lack of knowledge on a particular requirement, is easily corrected, and does not create legal, safety, or other hazards to employees, passengers, or other members of the public. An example of a minor deficiency would be failure to submit a required report. In such instances, the department would issue a warning letter to the contractor, describing the deficiency and establishing a deadline for compliance. Failure to respond in the prescribed manner will cause the department to consider this a major deficiency as described in paragraph (2) of this subsection.
   2. (2) Major deficiencies. A major deficiency is cited when the department finds that a contractor has knowingly violated program requirements, or has pursued actions that are illegal or that pose a safety hazard to employees, passengers, or other members of the public. Examples include, but are not limited to, failure to maintain required insurance coverage, violation of charter regulations, and nonpayment of subcontractors or vendors. In such cases, the department will issue a certified letter advising the contractor to immediately address the deficiency, such action to be verified by department personnel within 48 hours of the contractor's receipt of the certified letter. If the contractor does not respond in the prescribed manner, the department will, within ten working days, exercise its contract termination rights and/or direct the disposition of equipment purchased with grant funds. Contractors that have been cited for major deficiencies which were not corrected shall be ineligible to receive financial assistance from the department for a period of two years from the date of the certified notification letter. Such decisions may be appealed in accordance with the provisions of §1.21 et seq. of this title (relating to Contested Case Procedure).

Source Note:The provisions of this §31.48 adopted to be effective August 11, 1994, 19 TexReg 5880.