Interpretation ID: 19401b.drn

Mr. W. Grey Perry
Assistant Rental Manager
University Ford
102 Ephesus Church Road
Chapel Hill, NC 27514

Dear Mr. Perry:

This responds to your January 7, 1999, request for information regarding sales or leases of rental vehicles by dealers to schools and day care centers for occasional use. We assume that the vehicles you ask about are new "buses," i.e., they are designed for carrying more than 10 persons, including the driver, and that they do not meet Federal school bus standards.

The short answer is that Federal law permits the lease of such a bus to transport school children on a one-time or very occasional basis. However, the sale or lease is not lawful if a significant use of the bus is to transport school children to or from school or school-related activities. Further, because States have the authority to regulate the use of vehicles under State law, you should review the law of North Carolina to see if it addresses a lease of the bus.

By way of background, the National Highway Traffic Safety Administration (NHTSA) is authorized to issue and enforce Federal motor vehicle safety standards applicable to new motor vehicles. Our statute at 49 U.S.C. 30112 requires any person selling or leasing a new vehicle to sell or lease a vehicle that meets all applicable standards. Accordingly, persons selling or leasing a new "school bus" must sell or lease a vehicle that meets the safety standards applicable to school buses. Our statute defines a "schoolbus" as any vehicle that is designed for carrying a driver and more than 10 passengers and which, NHTSA decides, is likely to be "used significantly" to transport "preprimary, primary, and secondary" students to or from school or related events. 49 U.S.C. 30125. By regulation, the capacity threshold for school buses corresponds to that of buses -- vehicles designed for carrying more than ten (10) persons. For example, a 15-person van that is likely to be used significantly to transport students is a "school bus."

If the new large (11 persons or more capacity) van were sold or leased to a school and used on a regular or long-term basis to transport students, the vehicle must meet NHTSA's school bus standards. Conventional 15-person vans are not certified as doing so, and thus new 15-person vans cannot be sold or leased under circumstances where they are likely to be used to carry students on a regular basis.

However, a one-time or very occasional rental would be permitted, on the grounds that the vehicle would not be used significantly to transport children to and from school and would thus not be a school bus.

I hope this information is helpful. If you have any further questions, please feel free to contact Dorothy Nakama of my staff at this address or by telephone at (202) 366-2992.

Sincerely,
Frank Seales, Jr.
Chief Counsel
ref:571.3
d.4/8/99