Lines Drawn in the Battle for Charter Rule Supremacy

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The United Motorcoach Association voiced its concern today with a amendment to the surface transportation reauthorization bill on exempting Seattle-area transit operator from adhering to the federal charter rule that private bus operators fear could have a rippling effect across the nation.

Last week, National School Transportation Association members heard an update from industry lobbyist Becky Weber on the status of the proposal inserted last fall by Sen. Patty Murray (D-WA) to not require King County Metro Transit to follow Federal Transit Administration regulations designed to protect private enterprise from unfair competition. Namely, the rule states that all local transit agencies that receive federal subisidies to purchase vehicles and equipment cannot provide contracted charter service when other local private operators that do not receive federal funds are willing and able to perform the work.

FTA provides up to 90 percent of the capital cost for transit buses. Not only is the charter rule designed to protect private companies from an unfair competitive edge but also to protect taxpayers from a double tax, as transit agencies also rely on local tax revenues. So, say UMA and NSTA, it’s a double dip.

“Private bus companies do not receive public assistance and cannot compete with public transits that do. It is just that simple,” said Ken Presley, UMA’s vice president of industry relations, in a statement. “While the exemption may mean subsidized shuttle rides for sports fans, what it really represents is a devastating loss of jobs, lost capital investment potential, lost tax revenue for the Seattle community, and the abuse of taxpayers’ dollars.”

Murray inserted the language at the request of King County Metro, which stood to lose lucrative business in transporting fans to Seattle Mariners baseball games and Seattle Seahawks and University of Washington football games. Originally, Murray asked for a statewide exemption but backed off a bit after receiving thousands of letters and phone calls in protest, thanks to efforts made by the Coalition of Private Passenger Transportation Coalition.

In talking to NSTA members, the real worry is that Murray’s provision, if successful in the final transportation bill, would set a precedent to allow transit agencies across the nation to sidestep the charter rule.

It’s shaping up to be a game of survival that could turn quite nasty.