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The FTA Charter Rule: Overview & Exceptions

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The FTA Charter Rule: Overview & Exceptions

The Charter Rule, updated in 2008, by the Federal Transit Administration (FTA) prohibits public transportation agencies that are subsidized with federal transportation dollars from interfering with private operators by offering charters.

Charter Service, as defined by the FTA, is, “Transportation provided by a recipient at the request of a third party for the exclusive use of a bus or van for a negotiated price.” The following are common features of charters:

  • A third party pays the transit provider a negotiated price for the group;

  • Any fares charged to individual members of the group are collected by a third party;

  • The service is not part of the transit provider’s regularly scheduled service, or is offered for a limited period of time; or

  • A third party determines the origin and destination of the trip as well as scheduling;

FTA also states, “Transportation provided by a recipient to the public for events or functions that occur on an irregular basis or for a limited duration” and:

  • A premium fare is charged that is greater than the usual or customary fixed route fare; or

  • The service is paid for in whole or in part by a third party is considered a charter.

In order to qualify for this rule, charters must be registered with the FTA.

However, there are exceptions to the charter rule. Listed on page 411 under Subpart B- Exceptions, the FTA notes six (6) ways a public transit entity can provide charter service:

  1. Government officials on official government business

    • Limited to 80 service hours annually within its geographic service area

  2. Qualified human service organizations

    • Can provide charter service to Qualified Human Service Organizations (QHSO) for passengers with:

      1. Mobility limitations due to advanced age

      2. With disabilities

      3. With low income

  3. Leasing FTA funded equipment and drivers

    • A recipient can lease its FTA funded equipment and drivers to charter companies pending they are registered with the FTA and have exhausted all charter vehicles of all charter companies in geographic area

  4. When no registered charter provider responds to notice from a recipient

    • If no charter responds within 72 hours of a charter service to be provided in less than 30 days or 14 calendar days for charter service requested to be provided in 30 days or more

  5. Agreement with registered charter providers

    • All registered charter providers must agree in recipients geographic area

  6. Petitions to the administrator

    • A petition for charter service can be sent to the Administrator for:

      1. Events of regional or national significance;

      2. Hardship (only for non-urbanized areas under 50,000 in population or small urbanized areas under 200,000 in population); or

      3. Unique and time sensitive events (e.g., funerals of local, regional, or national significance) that are in the public’s interest.

The full code, 49 U.S.C. 5323 (d), is detailed in the Charter Bus Service Regulations page on the FTA’s website.


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