Sec. 975.9. Contract service requirements

Prior to making service payments to a transportation authority, county, or city for services provided under contract with a corporation, firm or individual to provide mass transportation services, pursuant to section 18-b of the Transportation Law and section 119-r of the General Municipal Law, a copy of such contract must be provided to the Department. If the contract involves intercity bus services, services that extend outside of New York State, services that extend outside of the boundaries of the contracting city, county or transportation authority, then the following procedures and provision also apply:

(a) Intercity bus services.

Prior to entering into, extending or continuing such a contract for intercity bus services with any intercity bus company such transportation authority, county, or city shall submit the proposed service contract and supporting records describing the services and its finances to the Department for review and approval. The Department review will determine if the service is already under contract, duplicates other subsidized services, is provided in an effective manner and meets other program requirements.

(b) Services that operate outside N.Y. State.

Any new, amended or renewed contract between a transportation authority, county, or city and a corporation, firm or individual, to provide mass transportation services, pursuant to section 18-b of the Transportation Law, shall reflect the following general policy of the Department of Transportation where such service, or a portion of such service, is to be interstate commerce. In order for a public transportation system that provides mass transportation services outside of New York State to be eligible for a State service payment, such system must demonstrate to the Commissioner that such assistance will be used exclusively for the benefit of New York State riders.

(1) To the degree practicable, the benefits of the receipts of State moneys pursuant to such contract for mass transportation services by such corporation, firm or individual shall be applied either:

(i) to discount, or otherwise reduce, or minimize the fares charged for interstate service with origin and destination points within the State of New York; or

(ii) to provide additional service or routes within New York State pursuant to such contract.

(2) Such general policy may be carried out in either of the following manners as prescribed by the Commissioner:

(i) a plan therefor submitted through the transportation authority, county, or city by the corporation, firm or individual, to the Commissioner of Transportation for approval, and such plan being subsequently approved; or

(ii) the contract containing a clause that the benefits from the operating assistance shall be reflected in the fares for interstate trips having an origin and destination within the State of New York by discount or credit that is equal to the percentage relationship between the total subsidy payment and the full farebox revenues generated by such interstate trips.

(3) Such corporation, firm or individual, when required by such contract to provide additional service or routes, may deduct any deficits generated by such operations from the total subsidy payment in determining the required fare discount, other reduction, or minimization of fares. Should such corporation, firm or individual be receiving payment of moneys pursuant to a valid existing contract with a transportation authority, city or county which does not contain plan submission or discount or credit provisions as outlined herein, such contract shall be amended so as to incorporate such a provision as soon as is legally possible.

(c) Services that extend outside the boundary of the contracting Municipal Corporation. In order for counties or cities contracting for mass transportation services under the provisions of section 119-r of the General Municipal Law to be eligible for a State service payment for service that extends beyond its boundaries then the following will apply:

(1) Vehicle miles both inside and outside the Municipal Corporation can be submitted as eligible for calculating service payments if the service is local bus service or commuter bus service that extends to a destination in a nearby county if such service is of primary benefit to the residents of the contracting county or city. Counties or cities intending to contract for commuter bus services under this provision must obtain Department approval to do so by no later than the seventeenth day of the first month of a quarter for which the service is to be provided. Requests for approval shall describe the commuter services to be contracted for outside of the jurisdictional boundaries and the benefits that their residents receive from such services. In approving such services, the Department shall consider the type and need for subsidy to maintain adequate service, reasonable return on equity, operating cost guidelines, and impact on other operators.

(2) Counties and cities may sponsor intercity bus services that serve more than one county, and that meet the requirements of section 975.9 (a) but only for the services that are within their municipality; i.e., they may only submit the revenue vehicle miles and revenue passengers within the jurisdictional boundaries of the sponsoring county or city.