COVID-19-Related Pupil Transportation Subsidy Changes for School Year 2020-2021
School Code Section 1501.8(m.1)

On November 25, 2020, Governor Wolf signed Senate Bill 1216 (Act 136 of 2020). This legislation included the new sub-section m.1 within Section 1501.8, which created a modified calculation of the Pupil Transportation Subsidy for school year 2020-2021, payable in the 2021-2022 fiscal year. Pursuant to this amendment of the School Code, the Pennsylvania Department of Education (PDE) must publish guidelines describing variable costs, in consultation with Pennsylvania Association of School Business Officials, Pennsylvania School Boards Association, and Pennsylvania School Bus Association. These guidelines include the following information:

1. Clarification of statutory requirements
2. Definition of the term 'variable costs'
3. List of variable costs eligible to be included in the process outlined in School Code Section 1501.8(m.1)

School District-Owned Transportation Services

Those school districts that do not contract for any portion of transportation services and that own all the vehicles used for the transportation of students to and from school will receive the greater of the formula calculated for transportation provided in the 2020-2021 school year, payable in the 2021-2022 fiscal year, or what was allocated for the 2020-2021 fiscal year, based on data from the 2019-2020 school year. 

Contracted Transportation Services 

Please note: School districts that split their transportation services between school district owned vehicles and contracted services should follow the process below for the portion of their operations that are contracted.

Option 1: Pursuant to this amendment to the School Code, if a school district wants to receive the same Pupil Transportation Subsidy calculated for the 2020-2021 fiscal year (based on school year 2019-2020 data), it must certify to PDE that all transportation contractors were paid as if the COVID-19 response did not impact transportation services, minus the variable costs certified to the school district by its transportation contractors. A school district's certification to PDE enables it to receive a 2021-2022 fiscal year Pupil Transportation Subsidy equal to the greater of the amount allocated for the 2020-2021 fiscal year or the amount calculated for payment in the 2021-2022 fiscal year (based on school year 2020-2021 data). School districts must still submit their 2020-2021 school year transportation data in eTran.

Option 2: Pursuant to this amendment to the School Code, if a school district wants to receive the funding based on the amount calculated for payment for the 2021-2022 fiscal year (based on school year 2020-2021 data), it should simply submit its transportation data in eTran and their Pupil Transportation Subsidy will be calculated accordingly.

If Option 1 is selected, the amendment to Section 1501.8(m.1) requires the following actions:

1. Vehicle contractors must certify to each school district the total amount of variable costs incurred for the 2020-2021 school year. PDE has provided a sample certification form that school districts can choose to use in the certification process. However, contractors can use any clear certification as PDE does not require this specific form.

2. School districts that contracted for services must certify to PDE that contractors were paid as if the pandemic did not impact services, minus the variable costs certified by its contractor(s).

To certify the amount of variable costs from their contractors, school districts should ask the contractor to compare the variable costs for a day, week, or month impacted by COVID-19 in the 2020-2021 school year to the amount paid for variable costs in the most recent similar period of normal operations.

When determining the appropriate amount to pay contractors, school districts should subtract costs for the items defined as variable costs in this guidance from the "total paid to the contractor as if the pandemic had not occurred." The contractors' certification of variable costs should include the total amount of reduced variable costs for the period invoiced and a signed statement attesting to the accuracy of that information.  School districts do not have to request any supporting documentation from their contractor to certify to PDE that the contractor was paid as though the pandemic did not occur.

School districts must submit their certification to PDE to be eligible to receive a subsidy equal to the amount received in the 2020-2021 fiscal year.  Please note that due to the variety of remote, hybrid/blended, and fully in-person instructional models being used in the 2020-2021 school year, it is very likely that the fiscal year 2021-2022 Pupil Transportation Subsidy will show a decrease (based on Centers for Disease Control guidance for social distancing on school vehicles and other variable factors). 

Sample Certification to School District by Contractor (PDF)

Certification to PDE by School District (PDF)

Variable Cost Definitions

Act 136 defines "variable costs" as the difference between costs during normal operations and those same costs during the COVID-19 response. Wages are not considered a variable cost if they continued to be paid during the 2020-2021 school year, regardless of the disruption in services caused by the COVID-19 response.

The contractors' variable cost certifications should reflect the actual cost reductions of the contractor during the COVID-19 response.  If the contractors reduced their wage costs because employees received unemployment compensation, then the contractors should reflect that reduction in their variable cost certifications. 

For the purposes of applying the requirements of School Code Section 1501.8(m.1), the following categories are determined to be variable costs.

1. Labor: Labor costs could include salary and/or wage payments for those individuals directly impacted by vehicles not running. 
• bus drivers
• traffic control (crossing guards)
• aides to assist students on the vehicle (if provided for in the contract) 
2. Other: Additional costs that could be identified as variable depending on the circumstances of the contract, include

• fuel
• maintenance
• tolls
• other costs not incurred for transportation in school year 2020-2021