(1) From the school transportation fund money appropriated under section 11, there is allocated for 2023-2024 only an amount not to exceed $125,000,000.00 to districts and intermediate districts for transportation costs. Funding for each district or intermediate district is as follows:

    (a) The department must assign each district and intermediate district to a quartile based on the number of riders per square mile and calculate the median cost per rider for each quartile.

    (b) Funds must be distributed to each district and intermediate district at the lesser of the quartile’s median cost per rider or the actual transportation cost per general education student at the district or intermediate district.

    (c) If funds are insufficient to fully fund payments under this section, payments may be prorated on an equal percentage basis.

    (2) In addition to the funds allocated under subsection (1), from the school transportation fund money appropriated under section 11, there is allocated for 2022-2023 only an amount not to exceed $200,000.00 to an intermediate district for a study on district transportation costs. The intermediate district receiving funds under this subsection must submit a report to the department, the state budget director, the house and senate appropriations subcommittees on school aid, and the house and senate fiscal agencies by February 29, 2024 on the outcomes of the study under this subsection.

    (3) Notwithstanding section 17b, the department shall make payments under this section on a schedule determined by the department.