Allocation for district and intermediate district transportation costs; eligibility requirements; reports; payment schedule.

Sec. 22l. (1) From the school transportation fund money appropriated under section 11, there is allocated for 2026-2027 only an amount not to exceed $125,000,000.00 to districts and intermediate districts for transportation costs. Funding for each district or intermediate district is as follows: (a) The department must assign each district and intermediate district to an octile based on the number of riders per square mile and calculate the median cost per rider for each octile. (b) Funds must be distributed to each district and intermediate district as follows: (i) An initial amount at the lesser of the octile's median cost per rider or the actual transportation cost per general education rider at the district or intermediate district. (ii) An additional amount for districts and intermediate districts that have outlier costs per rider that are deemed reasonable, as determined by the department. (c) If funds are insufficient to fully fund payments under this section, payments may be prorated on an equal percentage basis. (2) To remain eligible for funding under subsection (1), by not later than December 1 of the current fiscal year, a school district must submit, in a form and manner determined by the department, to their intermediate district, and a public school academy must submit, in a form and manner determined by the department, to the intermediate district in which the public school academy is located, the number of nonpublic school students the district expects to transport as required under section 1321 of the revised school code, MCL 380.1321. Intermediate districts shall submit this information to the department by not later than February 1. (3) The department shall compile the reports provided by intermediate districts under subsection (2) into 1 legislative report. The department shall provide this report not later than March 1 of each fiscal year for which funding is allocated under this section to the house and senate subcommittees responsible for school aid, the house and senate fiscal agencies, and the state budget director. (4) Notwithstanding section 17b, the department shall make payments under this section on a schedule determined by the department.