"NEW SECTION. Sec. 1. A new section is added to chapter 28A.160 RCW to read as follows:

(1) The superintendent of public instruction must provide transportation safety net awards to school districts with a convincingly demonstrated need for additional transportation funding for special passengers. Transportation safety net awards shall only be provided when a school district's allowable transportation expenditures exceed the amounts provided under RCW 28A.160.150 through 28A.160.192 and any excess transportation costs reimbursed by federal, state, tribal, or local child welfare agencies. School district safety net awards shall not exceed the school district's expenditures directly attributable to serving special passengers in the pupil transportation program.

(2) For the purposes of this section, "special passengers" include:

(a) Students eligible for and receiving special education that require transportation as a related service of their individualized education program;

(b) Homeless students requiring transportation under the McKinney-Vento act, reauthorized as Title X, Part C, of the no child left behind act, P.L. 107-110, in January 2002; and

(c) Foster students receiving transportation as required under section 1112(c)(5)(B) of the every student succeeds act, P.L. 114-95.

(3) To be eligible for additional transportation safety net award funding, the school district must report, in accordance with statewide accounting guidance, the amount of the excess costs and the specific activities or services provided to special passengers that created the excess costs.

(4) The superintendent of public instruction must establish rules and processes for transportation safety net applications and awards. The omnibus appropriations act must specify the total amount available for transportation safety net awards. Total awards may not exceed the amount appropriated. The superintendent of public instruction must submit to the office of financial management, and the education and fiscal committees of the legislature, the total demonstrated need and awards by school district.

(5) Charter schools established under chapter 28A.710 RCW and state-tribal compact schools established under chapter 28A.715 RCW are also eligible for awards under this section.

(6) Transportation safety net awards allocated under this section are not part of the state's program of basic education.

Sec. 2. RCW 28A.160.193 and 2018 c 266 s 103 are each amended to read as follows:

(1) Subject to the availability of amounts appropriated for this specific purpose, a transportation alternate funding grant program is created.

(2) As part of the award process for the grants, the superintendent of public instruction must include a review of the school district's efficiency rating, key performance indicators, and local school district characteristics such as unique geographic constraints, low enrollment, geographic density of students, ((the percentage of students served under the McKinney-Vento homeless assistance act from outside the district,)) or whether the district is a nonhigh district.

Sec. 3. RCW 28A.160.140 and 1990 c 33 s 140 are each amended to read as follows:

(1) As a condition of entering into a pupil transportation services contract with a private nongovernmental entity, each school district shall engage in an open competitive process at least once every five years. This requirement shall not be construed to prohibit a district from entering into a pupil transportation services contract of less than five years in duration with a district option to renew, extend, or terminate the contract, if the district engages in an open competitive process at least once every five years after July 26, 1987.

(2)(a) A school district may only enter into a pupil transportation services contract with a nongovernmental entity if that entity provides the following to, or on behalf of, employees who choose to opt in for coverage:

(i) An employer health benefits contribution equal to the employer payment dollar amount in effect for the first year of the contract for health care benefit rates (Cockle rates), published annually by the health care authority, for the school employees' benefits board program for school employees; and

(ii) An amount equivalent to the salaries of the employees of the private nongovernmental entity multiplied by the employer normal cost contribution rate determined under the entry age cost method for the school employees' retirement system, as published in the most recent actuarial valuation report from the office of the state actuary for the first year of the contract.

(b) Subsection (2)(a) of this section applies only to pupil transportation service contracts for which the request for proposals begins after the effective date of this section and no earlier than for a contract affecting the 2024-25 school year.

(c) All pupil transportation service contracts entered into or modified after the effective date of this section must include a detailed explanation of any contract cost increase by year, expenditure type, and amount, including any increases in cost that result from providing the benefits required under this section.

(3) As used in this section:

(((1)))(a) "Employee" means a bus, van or shuttle driver, monitor, mechanic, or dispatcher who works sufficient compensated hours for the nongovernmental entity performing services on the contract with the school district to meet the eligibility requirements that apply to school employees for benefits in the school employees' retirement system and the school employees' benefits board program;

(b) "Open competitive process" means either one of the following, at the choice of the school district:

(((a)))(i) The solicitation of bids or quotations and the award of contracts under RCW 28A.335.190; or

(((b)))(ii) The competitive solicitation of proposals and their evaluation consistent with the process and criteria recommended or required, as the case may be, by the office of financial management for state agency acquisition of personal service contractors;

(((2)))(c) "Pupil transportation services contract" means a contract for the operation of privately owned or school district owned school buses, and the services of drivers or operators, management and supervisory personnel, and their support personnel such as secretaries, dispatchers, and mechanics, or any combination thereof, to provide students with transportation to and from school on a regular basis; and

(((3)))(d) "School bus" means a motor vehicle as defined in RCW 46.04.521 and under the rules of the superintendent of public instruction.

NEW SECTION. Sec. 4. A new section is added to chapter 28A.160 RCW to read as follows:

(1) A school district that experiences an increase in costs to a pupil transportation services contract as compared to prior year contract costs as a result of the provisions in RCW 28A.160.140 is eligible for supplemental transportation allocations as described in this section.

(2) Beginning September 1, 2024, school districts that provide pupil transportation through a contract with a nongovernmental entity under RCW 28A.160.140 must annually provide the office of the superintendent of public instruction with the following information:

(a) A breakdown of the total contract cost increase, including a detailed explanation of the increase by expenditure type demonstrating dollar equivalency as required in RCW 28A.160.140(2)(a)(i) and percentage equivalency as required in RCW 28A.160.140(2)(a)(ii), as defined by the office of the superintendent of public instruction, and amount;

(b) A breakdown of cost from the contractor that shows the cost to provide health care and pension benefits to employees prior to the effective date of this section and the cost to provide health care and pension benefits to employees after the implementation of benefits as described in RCW 28A.160.140;

(c) The amount of funding received through transportation allocations under RCW 28A.160.150 through 28A.160.192 prior to the implementation of school employee benefits under chapter 41.05 RCW and the amount of funding received through the same transportation allocations for the period immediately following the implementation of school employee benefits under chapter 41.05 RCW, to determine the amount of funding for health care that is already being included in allocations.

(3) The office of the superintendent of public instruction may suspend the reporting requirements under subsection (2) of this section on or after September 1, 2027, for districts that do not request supplemental transportation allocations under this section.

(4) Subject to the availability of amounts appropriated for this specific purpose, the office of the superintendent of public instruction must reimburse a school district that contracts for transportation bus services as of March 30, 2023, for the increased cost that is directly attributable to increased benefits as required under this act, using the following formula: The total contract cost increase, less any amounts not attributable to benefits required under RCW 28A.160.140, less the amount the allocation was increased based on the actual cost increase through the transportation funding formula."