Michigan Administrative Code
Department - Education
Superintendent of Public Instruction
State Aid for Transportation of School Children
Section R. 388.380 - Amortization allowances

Universal Citation: MI Admin Code R. 388.380

Current through Vol. 24-16, September 15, 2024

Rule 10.

(1) For each eligible vehicle used to transport eligible pupils, an intermediate school district, local school district, or public school academy shall determine and include in its state aid base additional allowances for vehicle rental and amortization. The allowances must not include more vehicles than the number determined to be necessary, plus the allowable number of spare vehicles.

(2) An intermediate school district, local school district, or public school academy shall determine the annual amortization allowance as follows:

(a) For a type I school bus, divide the amortization cost base by 7. An intermediate school district, local school district, or public school academy shall include this annual allowance each year it uses the bus to transport eligible pupils for a maximum of 7 years.

(b) For a type I premium school bus, divide the amortization cost base by 10. An intermediate school district, local school district, or public school academy shall include this annual allowance each year it uses the bus to transport eligible pupils for a maximum of 10 years.

(c) For a type II school bus, a sedan, a station wagon, or a passenger van, divide the amortization cost base by 5. An intermediate school district, local school district, or public school academy shall include this annual allowance each year it uses the bus or vehicle to transport eligible pupils for a maximum of 5 years.

(d) For a rehabilitated school bus that has been rebuilt by an agency approved by the department, divide the amortization cost base by 5.

(3) Upon approval by the department, for a school bus or pupil transportation vehicle that an intermediate school district, local school district, or public school academy expects to exceed 100,000 miles within the first 4 years of operation, the intermediate school district, local school district, or public school academy may substitute an optional 4-year amortization schedule as an alternative to subrule (2)(a), (b), and (c) of this rule. An intermediate school district, local school district, or public school academy shall declare this option the first reporting period after purchase.

(4) The amortization cost base for each vehicle is as follows:

(a) For school buses and other transportation vehicles that an intermediate school district, local school district, or public school academy purchases new and uses to transport pupils, the amortization cost base is the purchase price of the vehicle and attached equipment, including interest, adjusted by any gain or loss on buses or other vehicles traded in or sold.

(b) For a school bus that has been rebuilt, the amortization cost base is 50% of the annual amortization allowances that would remain if the bus were continued in use without rebuilding, plus the rebuilding charges.

(c) For a used bus purchased by an intermediate school district, local school district, or public school academy, the amortization cost base is the original invoice cost for the bus and attached equipment, plus any interest that the purchasing intermediate school district, local school district, or public school academy is to pay, adjusted by any gain or loss on a bus or buses traded in or sold. If the purchasing intermediate school district, local school district, or public school academy cannot determine the original invoice cost, the department may provide a substitute invoice cost based on costs of comparable vehicles manufactured during the same year.

(d) If an intermediate school district, local school district, or public school academy sells a bus before fully amortizing it, the maximum gain that the intermediate school district, local school district, or public school academy shall deduct from the purchase price of another vehicle is the total annual amortization allowances granted to the intermediate school district, local school district, or public school academy.

(5) If a type I school bus or a type II school bus that was purchased new by an intermediate school district, local school district, or public school academy shows evidence of a probable need for repairs that is beyond good economic practice, the intermediate school district, local school district, or public school academy may remove the bus from service subject to the approval of the department. When an intermediate school district, local school district, or public school academy removes a school bus from service, it may maintain the bus on its inventory and receive annual allowances for amortization the same as if it continued to use the bus. An intermediate school district, local school district, or public school academy shall not include a bus removed from service in the determination of any other allowance. The intermediate school district, local school district, or public school academy may sell the bus but no Michigan intermediate school district, local school district, or public school academy shall use it for pupil transportation. The intermediate school district, local school district, or public school academy shall have used the bus to transport eligible pupils for not less than 4 years and the bus must have traveled not less than 150,000 miles. The intermediate school district, local school district, or public school academy shall make available to the department evidence documenting acceptable regular preventive maintenance procedures and repair history throughout the life of the vehicle.

Disclaimer: These regulations may not be the most recent version. Michigan may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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