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.