(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.
History: 1987 AACS; 2018 AACS.
R 388.381 Allowance for private contractors or common carriers.
Rule 11. (1) An intermediate school district, local school district, or public school
academy providing transportation to and from school by employing private contractors or
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