49 C.F.R. PART 605—SCHOOL BUS OPERATIONS
Title 49 - Transportation
Authority: Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1601 et seq.); 23 U.S.C. 103(e)(4); 23 U.S.C. 142 (a) and (c); and 49 CFR 1.51.
Source: 41 FR 14128, Apr. 1, 1976, unless otherwise noted.
(a) The purpose of this part is to prescribe policies and procedures to implement section 109(a) of the National Mass Transportation Assistance Act of 1974 (Pub. L. 93–503; November 26, 1974; 88 Stat. 1565). Section 109(a) adds a new section 3(g) to the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(g)) and differs from section 164(b) of the Federal-Aid Highway Act of 1973 (49 U.S.C. 1602a(b)) in that section 3(g) applies to all grants for the construction or operation of mass transportation facilities and equipment under the Federal Mass Transit Act, and is not limited to grants for the purchase of buses as is section 164(b). (b) By the terms of section 3(g) no Federal financial assistance may be provided for the construction or operation of facilities and equipment for use in providing public mass transportation service to an applicant unless the applicant and the Administrator enter into an agreement that the applicant will not engage in school bus operations exclusively for the transportation of students and school personnel, in competition with private school bus operators. These regulations apply to all recipients of financial assistance for the construction or operation of facilities and equipment for use in providing mass transportation under: (a) The Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1601 et seq.); (b) 23 U.S.C. 142 (a) and (c); and 23 U.S.C. 103 (e)(4). (a) Except as otherwise provided, terms defined in the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1604, 1608) are used in this part as so defined. (b) For purposes of this part— The Acts means the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1601 et seq.); 23 U.S.C. 142 (a) and (c); and 23 U.S.C. 103(e)(4). Administrator means the Federal Mass Transit Administrator or his 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. Agreement means a contractual agreement required under section 3(g) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(g)). Applicant means applicant for assistance under the Acts. Assistance means Federal financial assistance for the purchase of buses and the construction or operation of facilities and equipment for use in providing mass transportation services under the Acts, but does not include research, development and demonstration projects funded under the Acts. Grant contract means the contract between the Government and the grantee which states the terms and conditions for assistance under the Acts. Government means the Government of the United States of America. Grantee means a recipient of assistance under the Acts. 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 (as defined in the Opinion of the Comptroller General of the United States, B160204, December 7, 1966, which is attached as appendix A of this part). 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 grantee with respect to school bus operations. Reasonable Rates means rates found by the Administration to be fair and equitable taking into consideration the local conditions which surround the area where the rate is in question. 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 Standard No. 17. Tripper service means regularly scheduled mass 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 grantee or operator's regular service stop. All routes traveled by tripper buses must be within a grantee's or operator's regular route service as indicated in their published route schedules. Urban area means the entire area in which a local public body is authorized by appropriate local, State and Federal law to provide regularly scheduled mass transportation service. This includes all areas which are either: (a) Within an “urbanized area” as defined and fixed in accordance with 23 CFR part 470, subpart B; or (b) within an “urban area” or other built-up place as determined by the Secretary under section 12(c)(4) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1608(c)(4)). Each applicant who engages or wishes to engage in school bus operations shall afford an adequate opportunity for the public to consider such operations at the time the applicant conducts public hearings to consider the economic, social or environmental effects of its requested Federal financial assistance under section 3(d) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(d)). The purpose of this subpart is to formulate procedures for the development of an agreement concerning school bus operations. A grantee or applicant may not engage in school bus operations in competition with private school bus operators unless it demonstrates to the satisfaction of the Administrator as follows: (a) That it operates a school system in its urban area and also operates a separate and exclusive school bus program for that school system; or (b) That private school bus operators in the urban area are unable to provide adequate transportation, at a reasonable rate, and in conformance with applicable safety standards; or (c) That it is a state or local public body or agency thereof (or a direct predecessor in interest which has acquired the function of so transporting schoolchildren and personnel along with facilities to be used therefor) who was so engaged in school bus operations: (1) In the case of a grant involving the purchase of buses—anytime during the 12-month period immediately prior to August 13, 1973. (2) In the case of a grant for construction or operating of facilities and equipment made pursuant to the FT Act as amended (49 U.S.C. 1601 et seq.), anytime during the 12-month period immediately prior to November 26, 1974. No grantee or operator of project equipment shall engage in school bus operations using buses, facilities or equipment funded under the Acts. A grantee 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 Federal Mass Transit Regulations. The prohibition against the use of buses, facilities and equipment funded under the Acts shall not apply to tripper service. Except as provided in §605.11 no assistance shall be provided under the Acts unless the applicant and the Administrator shall have first entered into a written agreement that the applicant will not engage in school bus operations exclusively for the transportation of students and school personnel in competition with private school bus operators. (a) Every grantee who is not authorized by the Administrator under §605.11 of this part to engage in school bus operations shall, as a condition of assistance, enter into a written agreement required by §605.14 which shall contain the following provisions: (1) The grantee and any operator of project equipment agrees that it will not engage in school bus operations in competition with private school bus operators. (2) The grantee agrees that it will not engage in any practice which constitutes a means of avoiding the requirements of this agreement, part 605 of the Federal Mass Transit Regulations, or section 164(b) of the Federal-Aid Highway Act of 1973 (49 U.S.C. 1602a(b)). (b) Every grantee who obtains authorization from the Administrator to engage in school bus operations under §605.11 of this part shall, as a condition of assistance, enter into a written agreement required by §605.14 of this part which contains the following provisions: (1) The grantee agrees that neither it nor any operator of project equipment will engage in school bus operations in competition with private school bus operators except as provided herein. (2) The grantee, or any operator of project equipment, agrees to promptly notify the Administrator of any changes in its operations which might jeopardize the continuation of an exemption under §605.11. (3) The grantee agrees that it will not engage in any practice which constitutes a means of avoiding the requirements of this agreement, part 605 of the Federal Transit Administration regulations or section 164(b) of the Federal-Aid Highway Act of 1973 (49 U.S.C. 1602a(b)). (4) The grantee agrees that the project facilities and equipment shall be used for the provision of mass transportation services within its urban area and that any other use of project facilities and equipment will be incidental to and shall not interfere with the use of such facilities and equipment in mass transportation service to the public. (a) Each applicant who engages or wishes to engage in school bus operations shall include the following in its application: (1) A statement that it has provided written notice to all private school bus operators operating in the urban area of its application for assistance and its proposed or existing school bus operations; (2) A statement that it has published in a newspaper of general circulation in its urban area a notice of its application and its proposed or existing school bus operations; (b) The notice required by paragraphs (a) (1) and (2) of this section shall include the following information: (1) A description of the area to be served by the applicant. (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 of the time, date, and place of public hearings required under section 3(d) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(d)), to be held on the application for assistance. (4) A statement setting forth reasons the applicant feels it should be allowed to engage in school bus operations under §605.11 of this part. (c) Copies of the application for assistance and notice required by paragraph (a) of this shall be available for inspection during the regular business hours at the office of the applicant. If there are no private school bus operators operating in the applicant's urban area, the applicant may so certify in its application in lieu of meeting the requirements of §605.16. This certification shall be accompanied by a statement that the applicant has published, in a newspaper of general circulation in its urban area, a notice stating that it has applied for assistance as provided under §605.16(b) and that it has certified that there are no private school bus operators operating in its urban area. A copy of the notice as published shall be included. Private school bus operators may file written comments on an applicant's proposed or existing school bus operations at the time of the public hearing held pursuant to section 3(d) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(d)). The comments of private school bus operators must be submitted by the applicant to the Administrator together with the transcript of this public hearing. (a) The Administrator will consider the comments filed by private school bus operators prior to making any findings regarding the applicant's proposed or existing school bus operations. (b) After a showing by the applicant that it has complied with the requirements of 49 U.S.C. 1602(d) and this subpart, the Administrator may approve its school bus operations. (c) If the Administrator finds that the applicant has not complied with the notice requirement of this part or otherwise finds that the applicant's proposed or existing school bus operations are unacceptable, he will so notify the applicant in writing, stating the reasons for his findings. (d) Within 20 days after receiving notice of adverse findings from the Administrator, an applicant may file written objections to the Administrator's findings or submit a revised proposal for its school bus operations. If an applicant revises its proposed or existing school bus operations, it shall mail a copy of these revisions along with the findings of the administrator to private school bus operators required to be notified under §605.16. (e) Private school bus operators who receive notice under paragraph (d) of this section may within 20 days after receipt of notice file written comments on the proposed revisions with the Administrator. The Administrator will consider these comments prior to his approval of a proposed revision by the applicant. (f) Upon receipt of notice of approval of its school bus operations, the applicant may enter into an agreement with the Administrator under §605.14. (a) Any grantee which, prior to the adoption of this part, entered into an agreement required by section 164(b) of the Federal-Aid Highway Act of 1973 (49 U.S.C. 1602(a)(b)), or section 3(g) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(g)), who engages or wishes to engage in school bus operations in competition with private school bus operators, shall seek modification of that agreement in accordance with paragraphs (b) through (d) of this section. (b) The grantee shall develop a statement setting forth in detail the reasons it feels it should be allowed to engage in school bus operations under §605.11 of this part. A copy of the statement should be provided private school bus operators who provide service in the grantee's urban area. (c) The grantee shall allow 30 days for persons receiving notice under this section to respond with written comments concerning its proposed or existing school bus operations. (d) After receiving written comments, the grantee shall send his proposal with written comments thereon to the Administrator for his review under §605.17. Pending applications for assistance upon which public hearings have been held pursuant to section 3(d) of the Federal Mass Transit Act of 1964, as amended (49 U.S.C. 1602(d)), and applications which have been approved by the Administrator but for which no grant contract has been executed, shall be amended by the applicant to conform to this part by following the procedures of §605.20(b) through (d). Any interested party may file a complaint with the Administrator alleging a violation or violations of terms of an agreement entered into pursuant to §605.14. A complaint must be in writing, must specify in detail the action claimed to violate the agreement, and must be accompanied by evidence sufficient to enable the Administrator to make a preliminary determination as to whether probable cause exists to believe that a violation of the agreement has taken place. On receipt of any complaint under §605.30, or on his own motion if at any time he shall have reason to believe that a violation may have occurred, the Administrator will provide written notification to the grantee concerned (hereinafter called “the 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 should be deemed to have occurred. A like period shall be allowed to the complainant, if any, during which he may submit evidence to rebut the evidence offered by the respondent. The Administrator may undertake such further investigation, as he may deem necessary, including, in his discretion, 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, he will order such remedial measures as he may deem appropriate. (c) The determination by the Administrator will include an analysis and explanation of his findings. If the Administrator determines, pursuant to this subpart, that there has been a violation of the terms of the agreement, he may bar a grantee or operator from the receipt of further financial assistance for mass transportation facilities and equipment. 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 title 5 U.S.C. 701–706. The Administrator may order any grantee or operator for the grantee, to file special or separate reports setting forth information relating to any transportation service rendered by such grantee or operator, in addition to any other reports required by this part. It appears from the enclosure with your letter that the City originally included in its grant application a request for funds to purchase 8 buses designed for charter service. Subsequently the City amended its application by deleting a request for a portion of the funds attributable to the charter bus coaches. However, in addition to the 8 specially designed charter buses initially applied for, the City allegedly uses about 40 of its transit type buses to a substantial extent for charter-type services. In light of these factors surrounding the application by the City, the enclosure requests our opinion with regard to the legality of grants under the Act as it applies to certain matters (in effect questions), which are numbered and quoted below and answered in the order presented. Number one: “The grant of funds to a City to purchase buses and equipment which are intended for substantial use in the general charter bus business as well as in the Mass Transportation type business.” The Federal Mass Transit Act of 1964 does not authorize grants to assist in the purchase of buses or other equipment for any service other than urban mass transportation service. Section 3(a) of the Act limits the range of eligible facilities and equipment to “ * * * buses and other rolling stock, and other real or personal property needed for an efficient and coordinated mass transportation system.” In turn, “mass transportation” is defined, in section 9(d)(5) of the Act, specifically to exclude charter service. We are advised by the Department of Housing and Urban Development (HUD) that under these provisions, the Department has limited its grants to the purchase of buses of types suitable to meet the needs of the particular kind of urban mass transportation proposed to be furnished by the applicant.” HUD further advises that: “One of the basic facts of urban mass transportation operations is that the need for rolling stock is far greater during the morning and evening rush hours on weekdays than at any other time. For that reason, any system which has sufficient rolling stock to meet the weekday rush-hour needs of its customers must have a substantial amount of equipment standing idle at other times, as well as drivers and other personnel being paid when there is little for them to do. To relieve this inefficient and uneconomical situation, quite a number of cities have offered incidental charter service using this idle equipment and personnel during the hours when the same are not needed for regularly scheduled runs. Among the cities so doing are Cleveland, Pittsburgh, Alameda, Tacoma, Detroit and Dallas. “Such service contributes to the success of urban mass transportation operations by bringing in additional revenues and providing full employment to drivers and other employees. It may in some cases even reduce the need for Federal capital grant assistance. “We do not consider that there is any violation of either the letter or the spirit of the Act as a result of such incidental use f buses in charter service. To guard against abuses, every capital facilities grant contract made by this Department contains the following provisions: “‘Sec. 4. Use of Project Facilities and Equipment—The Public Body agrees that the Project facilities and equipment will be used for the provision of mass transportation service within its urban area for the period of the useful life of such facilities and equipment. . . . The Public Body further agrees that during the useful life of the Project facilities and equipment it will submit to HUD such financial statements and other data as may be deemed necessary to assure compliance with this Section.’” It is our view that grants may be made to a city under section 3(a) of the Act to purchase buses needed by the city for an efficient and coordinated mass transportation system, even though the city may intend to use such buses for charter use when the buses are not needed on regularly scheduled runs (i.e. for mass transportation purposes) and would otherwise be idle. Number two: “Whether a grant of such funds is proper if charter bus use is incidental to mass public transportation operations. If so, what is the definition of incidental use.” We are advised by HUD that under its legislative authority, it cannot and does not take charter service requirements into consideration in any way in evaluating the needs of a local mass transportation system for buses or other equipment. HUD further advises that: “However, as indicated above, we are of the opinion that any lawful use of project equipment which does not detract from or interfere with the urban mass transportation service for which the equipment is needed would be deemed an incidental use of such equipment, and that such use of project equipment is entirely permissible under our legislation. What uses are in fact incidental, under this test, can be determined only on a case-by-case basis.” In view of what we stated above in answer to the first question, the first part of question two is answered in the affirmative. As to the second part of the question, in Security National Insurance Co. v. Secuoyah Marina, 246F.2d 830, “incident” is defined as meaning “that which appertains to something else which is primary.” Thus, we cannot say HUD's definition of incidental use as set forth above is unreasonable. Under the Act involved grants may be made to purchase buses only if the buses are needed for an efficient and coordinated mass transportation system. It would appear that if buses are purchased in order to meet this need, and are, in fact, used to meet such need, the use of such buses for charter service when not needed for mass transportation services would, in effect, be an “incidental use,” insofar as pertinent here. In our opinion such incidental use would not violate the provisions of the 1964 Act. Number three: “The grant of funds for mass public transportation purposes to a City which has expressed an intent to engage in the general charter bus business when such funds would in effect constitute a subsidy to the City of its intended charter bus operations; i.e. freeing Municipal funds with which to purchase charter bus equipment.” Section 4(a) of the 1954 Act (49 U.S.C. 1603(a)) provides, in part, as follows: “ * * * The Administrator (now Secretary), on the basis of engineering studies, studies of economic feasibility, and data showing the nature and extent of expected utilization of the facilities and equipment, shall estimate what portion of the cost of a project to be assisted under section 1602 of this title cannot be reasonably financed from revenues—which portion shall hereinafter be called ‘net project cost’. The Federal grant for such a project shall not exceed two-thirds of the net project cost. The remainder of the net project cost shall be provided, in cash, from sources other than Federal funds * * *.” It is clear from the legislative history of the Act involved that the “revenues” to be considered are mass transportation system revenues including any revenues from incidental charter operations. There is nothing in the language of the Act which requires HUD to take into account the status of the general funds of an applicant city in determining how much capital grant assistance to extend to that city. It should be noted that in a sense nearly every capital grant to a city constitutes a partial subsidy of every activity of the city which is supported by tax revenues, since it frees tax revenues for such other uses. Number four: “With specific reference to the application of the City of San Diego for funds under its application to the Department of Housing and Urban Development dated June 2, 1966, whether the Act permits a grant to purchase equipment wherein 25 percent of such equipment will be used either exclusively or substantially in the operation of charter bus services.” As to the City of San Diego's grant application, we have been advised by HUD as follows: “As explained above, the Act authorizes assistance only for facilities to be used in mass transportation service. We could not, therefore, assist San Diego in purchasing any equipment to be used ‘exclusively’ in the operation of charter bus service. Furthermore, as also explained above, assisted mass transportation equipment can be used only incidentally for such charter services. “Whether equipment used ‘substantially’ in such service qualifies under this rule can be answered only in the light of the specifics of the San Diego situation. * * * we have already, during our preliminary review of the City's application, disallowed about $150,000 of the proposed project cost which was allocated to the purchase of eight charter-type buses. “The final application of the City of San Diego is presently under active consideration by this Department. In particular, we have requested the City to furnish additional information as to the nature and extent of the proposed use, if any, of project facilities and equipment in charter service, so that we can further evaluate the application under the criteria above set forth. We have also requested similar information from Mr. Fredrick J. Ruane, who has filed a taxpayers' suit (Superior Court for San Diego County Civil #297329) against the City, contesting its authority to engage in charter bus operations.” As indicated above, it is clear that under the Act in question grants may not legally be made to purchase buses to be used “exclusively” in the operation of charter bus service. However, in view of the purposes of the Act involved it is our opinion that a city which has purchased with grant funds buses needed for an efficient mass transportation system, is not precluded by the act from using such buses for charter service during idle or off-peak periods when the buses are not needed for regularly scheduled runs. As indicated above, such a use would appear to be an incidental use. The fourth question is answered accordingly. As requested, the correspondence enclosed with your letter is returned herewith. Enclosures: The Honorable Bob Wilson, House of Representatives. Inflationary Impact Statement final regulations on school bus operations I certify that, in accordance with Executive Order 11821, dated November 27, 1974, and Departmental implementing instructions, an Inflationary Impact Statement is not required for final regulations on School Bus Operations.
Title 49: Transportation
PART 605—SCHOOL BUS OPERATIONS
Section Contents
§ 605.1 Purpose.
§ 605.2 Scope.
§ 605.3 Definitions.
§ 605.4 Public hearing requirement.
§ 605.10 Purpose.
§ 605.11 Exemptions.
§ 605.12 Use of project equipment.
§ 605.13 Tripper service.
§ 605.14 Agreement.
§ 605.15 Content of agreement.
§ 605.16 Notice.
§ 605.17 Certification in lieu of notice.
§ 605.18 Comments by private school bus operators.
§ 605.19 Approval of school bus operations.
§ 605.20 Modification of prior agreements.
§ 605.21 Amendment of applications for assistance.
§ 605.30 Filing a complaint.
§ 605.31 Notification to the respondent.
§ 605.32 Accumulation of evidentiary material.
§ 605.33 Adjudication.
§ 605.34 Remedy where there has been a violation of the agreement.
§ 605.35 Judicial review.
§ 605.40 Reports and information.
Appendix A to Part 605
Subpart A—General
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§ 605.1 Purpose.
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§ 605.2 Scope.
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§ 605.3 Definitions.
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§ 605.4 Public hearing requirement.
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Subpart B—School Bus Agreements
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§ 605.10 Purpose.
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§ 605.11 Exemptions.
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§ 605.12 Use of project equipment.
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§ 605.13 Tripper service.
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§ 605.14 Agreement.
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§ 605.15 Content of agreement.
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§ 605.16 Notice.
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§ 605.17 Certification in lieu of notice.
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§ 605.18 Comments by private school bus operators.
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§ 605.19 Approval of school bus operations.
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Subpart C—Modification of Prior Agreements and Amendment of Application for Assistance
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§ 605.20 Modification of prior agreements.
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§ 605.21 Amendment of applications for assistance.
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Subpart D—Complaint Procedures and Remedies
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§ 605.30 Filing a complaint.
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§ 605.31 Notification to the respondent.
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§ 605.32 Accumulation of evidentiary material.
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§ 605.33 Adjudication.
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§ 605.34 Remedy where there has been a violation of the agreement.
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§ 605.35 Judicial review.
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Subpart E—Reporting and Records
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§ 605.40 Reports and information.
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Appendix A to Part 605
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