Michigan Compiled Laws, Chapter 257. Motor Vehicles § 257.1867

Sec. 67. (1) In compliance with section 65(8),  1 if a determination is made that economically feasible private transportation does not exist, a school may contract with a federal, state, or local unit of government, or a subcontractor of these units, for the use of a school bus to transport persons to or from an activity or function sponsored or operated by the unit of government. The governmental agency, or subcontractors of the governmental agency, shall pay the full costs incurred in the use of a school bus. A school bus may be contracted out only in compliance with the provisions of the school insurance policy and any joint stipulations of the school and the school bus drivers including, but not limited to, any collective bargaining agreements in force or if no collective bargaining agreement exists, agreement with the bargaining agent if it has been designated. A school shall not purchase additional school buses for the sole purpose of implementing this provision of law.

(2) The provision of school buses for the purpose provided in subsection (1) shall not be made if bus service for pupils of the school would be compromised.