public and include participation by private sector motor carriers of passengers, private sector school bus passenger carriers, and recipients of funds under chapter 53 of title 49, United States Code. (f) Private sector participation (1) Incentives for competitively contracted service Section 5323(i) of title 49, United States Code, is amended by adding at the end the following: (3) Incentives for competitively contracted service (A) Eligibility Subject to subparagraph (C), a recipient of assistance under this chapter that meets the targets under subparagraph (B) for competitively contracted service shall be eligible, at the request of the recipient, for a Federal share of 90 percent for the capital cost of buses and bus-related facilities and equipment purchased with financial assistance made available under this chapter. (B) Target To qualify for the competitively contracted service incentive program under this paragraph, a public transit agency or governmental unit shall competitively contract for at least 20 percent of its fixed route bus service. The percentage of competitively contracted service shall be calculated by determining the ratio of competitively contracted service vehicles operated in annual maximum service to total vehicles operated in annual maximum service. (C) Maintenance of effort A public transit agency or governmental unit shall be eligible for an increased Federal share under this paragraph only if the amount of State and local funding provided to the affected public transit agency or governmental unit for the capital cost of buses and bus-related facilities and equipment will not be less than the average amount of funding for such purposes provided during the 3 fiscal years preceding the date of enactment of this paragraph. (D) Definitions In this paragraph, the following definitions apply: (i) Competitively contracted service The term competitively contracted service means fixed route bus transportation service purchased by a public transit agency or governmental unit from a private