Relates to contracts for the transportation of school children

Section two of this bill amends paragraph a of subdivision 14 of section 305 of the Education Law to require the New York City Department of Education (NYC DOE) to include in its solicitations for contracts for school bus transportation for children in grades kindergarten through 12 ("school bus contracts") provisions for the retention or preference in hiring and the preservation of wages, health, welfare and retirement benefits and seniority of employees who perform or performed work for employers party to such contracts, in connection with such contracts and change the index used as a negotiation cap for the extension of school transportation contracts throughout the state from the Consumer Price Index (CPI) to the Employment Cost Index (ECI).

Section three amends paragraph c of subdivision 14 of section 305 of the education law by amending the reference to the Consumer Price Index (CPI) to the Employment Cost Index (ECI).

Section four amends subdivision 14 of section 305 of the Education Law by adding a new paragraph g, which would authorize NYC DOE to seek to amend school bus contracts to include provisions for the retention or preference in hiring and the preservation of wages, health, welfare and retirement benefits and seniority of employees who perform or performed work for employers party to such contracts, in connection with such contracts.

Section five amends subdivision a of section 1115 of the tax law by adding a new paragraph 44 to exempt school buses, parts, equipment, lubricants and fuel from New York State sales tax.

Section six would include a severability clause.

Justification

This package of proposals for the school bus industry are needed to bring stability and certainty to the industry.

The EPPs create a master seniority list that school bus companies must use to fill job vacancies. The master seniority list is comprised of employees who become unemployed as a result of reassignment of busing contracts. EPPs require bus contractors to give priority, by seniority, to veteran drivers at the same pay and benefits, including pension rate, as their most recent jobs.

The EPP proposal will ensure that NYC DOE's future school bus contracts will include provisions designed to avoid service disruption and pension withdrawal liability claims, while protecting the experienced school bus contract workforce from drastic wage and benefit reductions and facilitating the retention of an experienced workforce. It will also enable NYC DOE to seek to amend existing contracts that do not include such provisions to include them. The change in the index that is used as a negotiation cap for the extension of school transportation contracts throughout the state is needed to better reflect the changes in the industry. Current contract extensions are governed by the Consumer Price Index for Urban areas (CPI-U). This index is an economic indicator of peoples buying habits associated with apparel, housing, food and recreation - items not associated with school transportation contracts. This proposal calls for using the Employment Cost Index (ECI) instead of the CPI-U. The ECI is a reflection of labor cost and is a more accurate index to govern the costs of transportation contracts given that 65-70 percent of the costs come from labor contracts. The CPI-U can vary greatly, with extreme highs and lows; whereas the ECI is a more stable number without the drastic highs and lows and works out to about the same percentage increase as a 10-year average of the CPI-U. Again, this is a negotiation cap - the school district retains sole discretion and may keep increases to zero.

Finally, this proposal would exempt school buses and associated items (parts, equipment, lubricants and fuel) from state and local sales tax. School buses are the only buses not currently exempt from sales tax. Exempting them from sales tax would allow the contractors to convey the savings realized from not paying the tax to the school district as part of the contract negotiations and/or request for proposal process.

Fiscal implications

To be determined

Effective date

This act shall take effect immediately; provided, however, that the provisions of section 5 shall take effect on the first day of a quarterly sales tax period, as set forth in subdivision (b) of section 1136 of the tax law, next succeeding April 1, 2017.