For the small businesses supporting school transportation, the Corporate Transparency Act may be more than a speed bump in 2025.

In hopes of preventing criminals from hiding illegal acts through corporate anonymity, Congress passed the Corporate Transparency Act in 2021, sandwiched into a larger 1,482-page defense bill. The law initially took effect on Jan. 1, 2024, requiring companies to disclose stakeholder information to the Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN, by Jan. 1, 2025.

In an order that called the law outright Orwellian, however, a federal judge on Dec. 3 granted an injunction blocking the Corporate Transparency Act from being enforced — a decision that U.S. attorneys quickly appealed, putting the fate of the act in legal limbo.

If the Fifth Circuit Court of Appeals upholds the lower court’s decision, the Corporate Transparency Act will become a thing of the past. But if the appeals court overturns the injunction, businesses may have to file the required benefit ownership report very quickly.

While the federal judge in Texas granted an injunction blocking the Corporate Transparency Act from being enforced, a federal judge in Oregon denied a similar request in September, which will be reviewed by the Eleventh Circuit Court of Appeals.

Parties often ask the U.S. Supreme court to review split decisions among appeals court, but since the high court holds arguments for less than 1 percent of the cases submitted, it is impossible to know whether it will step in.

In the meantime, small businesses should keep the law on their radar. If it is revived, failure to report required information could result in $591 fines per day of violation as well as up to two years in jail and up to $10,000 in penalties.

“In a limbo like this the best practice is to be ready to file,” said Megan Henderson, an attorney at the Longmont, Colorado firm Lyons and Gaddis.

Specializing in real estate and business transactions, Henderson said she spent much of the past year advising clients on becoming compliant under the Corporate Transparency Act.

Most businesses that filed paperwork with their state to become incorporated would be required to disclose their beneficial owners with the federal government, but exemptions abound. One big carve out is for larger companies generating more than $5 million in gross receipts annually. The umbrella of “beneficial owners” might be broader than some people think and covering not just owners but indispensable managers as well.

FinCEN published a brief guide to help businesses navigate the requirements. While neither a lawyer nor an accountant is required to file the paperwork, the process can seem daunting, especially for mom and pop establishments with limited time and resources.

“It’s going to impact the contractors that service the school districts,” said Chris Wojciechowski, an accountant at the Bonadio Group in Rochester, New York.

Wojciechowski said the regulation is more burdensome to small businesses with fewer resources.

“There’s such a tight timeline regarding compliance,” he continued. “So how is our businesses going to deal with this? They’re going to have to be nimble and be on top of the transition if they turn the law back on.”

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Even if the Corporate Transparency Act is ultimately defeated in the courts, businesses should still be on the lookout for similar legislation at the state level. One of the first copycat laws comes from New York lawmakers, requiring companies to report ownership by Jan. 1, 2026.

“It’s tricky because every state has their own regulations. I’ve seen companies who operate in one state come to another state and get slapped pretty hard with fines because they did not dig deep into the state regulations for school buses in that state,” said Mark Szyperski, president of On Your Mark Transportation, a consultancy firm based in Nashville, Tennessee.

For Szyperski, who grew up on the seat of his father’s Greyhound bus between Bay City and Detroit, Michigan, transportation is a family business.

Upon entering a new state, Szyperski said he often arranges to speak with the state’s school bus administrator to go over the basics. To be ready for the court’s outcome on the Corporate Transparency Act, he set up a Google alert and included news of the injunction in his newsletter.

“People need to be aware that [the injunction] could be overturned and then you best be getting ready to put the information into the system,” he said.

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Ohio’s school districts are facing an uphill battle to meet state student transportation requirements amid a persistent school bus driver shortage, resulting in financial penalties and a high-profile lawsuit filed by the state attorney general. 

The lawsuit and related fines levied against school districts for noncompliance with state regulations detail how the struggles in providing timely and reliable bus services for both public and non-public school students.

The compliance issues are in the spotlight after Ohio Attorney General Dave Yost filed a lawsuit against Columbus City Schools in September, accusing the district of failing to fulfill its statutory transportation obligations. This lawsuit has added to the urgency for Ohio’s school districts, which are already contending with a shortage of qualified school bus drivers, to find solutions that will ensure the safety and punctuality of school transportation across the state.

Attorney General Yost’s lawsuit claims that Columbus City Schools failed to provide transportation for students attending charter and private schools, a legal requirement under Ohio law. According to the lawsuit, Columbus City Schools labeled the transportation of these students as “impractical” and did not notify parents until days before the school year began, which left families scrambling to find alternate transportation.

“As a parent and grandparent, I understand the importance of making sure every child has a safe way to get to and from school,” Yost said at the time. “These families have a right to choose what school is best for their child, and the law is clear that transportation is to be provided.”

The lawsuit seeks a writ of mandamus compelling Columbus City Schools to resume transportation services for affected students immediately and to properly notify parents of their rights. The Attorney General’s office also issued a cease-and-desist letter to the district on Sept. 3, suggesting that the district’s failure to comply is suspected of being a deliberate attempt to circumvent legal obligations.

Last month, Columbus City Schools extended transportation service to about 100 students who were previously denied service and filed a motion to dismiss the lawsuit. Yost in a statement said he is not convinced and remains undeterred.

“It remains to be seen whether the district will live up to its press release and really transport these children,” he said. “The state already has received some information suggesting that it is not. … Simply put, this case is far from over.”

Fines and Compliance Challenges Across Ohio

According to data from the Ohio Department of Education, Columbus City Schools is not the only district facing compliance challenges. The department has collected substantial fines from several districts over the past couple of years due to delays in meeting transportation standards, which the school districts claimed were the result of school bus driver shortages.

In fiscal year 2024 alone, over $7.3 million in penalties were imposed on Columbus City Schools for failing to meet timing and operational requirements under Ohio Revised Code 3327.021. Youngstown School District was fined $1.91 million, while the state will collect nearly $250,000 from Middleton City Schools. The total of $9.5 million was 472 percent more than the state collected for fiscal year 2023 ($1.66 million) and 70 percent more than for fiscal year 2022 ($5.6 million).

An Ohio Department of Education spokesperson confirmed that refunds received by Columbus City Schools, Dayton City Schools and Toledo Public Schools were were the result of litigation settlement agreements.

So far for fiscal year 2025, the data indicates a $2.2 million fine to Columbus City Schools.

Under Ohio law, school districts are considered “out of compliance” if students arrive at school more than 30 minutes late or are picked up more than 30 minutes after dismissal for five consecutive days or 10 total days within a school year. Additionally, if a school bus fails to arrive at all, the district may also face penalties. These regulations are intended to ensure the reliability of transportation for all students, including those attending charter and private schools.

Todd Silverthorn, the second vice president of the Ohio Association for Pupil Transportation and director of transportation for Kettering Local City Schools, provided additional context on the challenges facing Ohio school districts. He explained that the Ohio Department of Education and Workforce is conducting a timing study to assess district compliance with Ohio Administrative Code 3301-83-05. This study evaluates whether routes are practical and efficient based on the most direct path between public and non-public schools.

Silverthorn emphasized the complexities of the timing study, as fluctuating student enrollment and significant bus driver shortages complicate compliance efforts. He noted that while state regulations are meant to uphold standards, the severe staffing shortfall has left school districts like Columbus City scrambling to cover essential routes, often falling short of the required timing standards.

“While state lawmakers may argue that there is adequate funding for transportation, the core issue is not funding but staffing,” Silverthorn said. “Districts are facing increasing difficulty in attracting and retaining qualified bus drivers. This isn’t about budget limitations but about the challenges inherent in the role [of driving] itself.”

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The Impact of Ohio’s Decreased School Bus Driver Staffing Level

The statewide bus driver shortage has intensified the transportation crisis. Before the pandemic, Ohio employed 25,706 active bus drivers. By August, that number had dropped to 18,817. This shortfall is affecting the 612 public school districts and over 1,000 chartered non-public schools statewide, many of which depend on reliable transportation services.

The role of an Ohio school bus driver requires a Class B commercial driver’s license, criminal background checks, drug and alcohol screenings, and the responsibility of managing student safety and behavior. The part-time hours and split shifts many school bus drivers receive combined with a high level of responsibility have deterred many potential applicants, creating a pipeline problem that exacerbates the staffing crisis.

As a result, school districts face challenges in meeting the compliance standards set forth by Ohio law, especially when drivers resign or retire. Schools have reported delays, cancellations and logistical obstacles that disrupt the school day and create stress for families.

In response to these challenges, school districts have implemented various strategies to optimize transportation resources. Some districts have consolidated school bus routes, modified school start times, and offered incentives such as signing bonuses and wage increases to attract and retain bus drivers. However, these adjustments are only temporary solutions to a deep-rooted problem.

“The reality is that we need a multi-faceted approach. This means not only increasing recruitment efforts but also rethinking the job to make it more appealing,” Silverthorn said.

If or until that happens, school districts like Columbus City Schools will continue to face pressure from state to provide transportation services on time and consistently.

“It shouldn’t take a lawsuit and an emergency motion to decide to follow the law. Columbus City Schools admitted the law was to transport the children. Glad these kids are finally getting the transportation they were entitled to,” Yost added last month. “But this is not the end. There are more kids who still are not receiving transportation despite the district’s clear obligation to provide it.”

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FRISCO, Texas — Several federal laws that define the transportation of students with disabilities and special needs have been updated recently or may be amended soon demand the attention of school districts and private contractors, said a lawyer who specializes in the subject area.

Betsey Helfrich opened the TSD Conference on Sunday. She has successfully represented school districts against a variety of claims in state and federal courts as well as in administrative and special education due process hearings. She also conducts local and national training on Section 504 of the Rehabilitation Act of 1973 and all areas of the Individuals with Disabilities Education Act.

Helfrich began by pointing out changes earlier this year to Title IX, which is commonly associated only with women’s sports. However, the law has broader implications for sex discrimination in federal programs that also affect school districts and transportation departments.

The new guidelines took effect on Aug. 1 except in 21 states that filed lawsuits to block their implementation. Helfrich encouraged audience members to research the law’s current status in their states.

Noting that Title IX requires the investigation of sexual harassment or sexual assault complaints, Helfrich cautioned against rote practices that could create legal hazards for a district, such as coding into the discipline system an incident on the school bus as an “assault.”

“Be really mindful if you or a driver are writing and coding something as sexual assault or sexual harassment … that we are also passing that info along to our Title IX coordinator,” she said. “Don’t code something as sexual harassment and end it there.”

She also cautioned resting on the laurels of simply reporting it, for example to a principal. She advised ensuring an investigation is completed an that a Title IX coordinator has made a determination that the misconduct rises to a legal level. “Sexual harassment has a very specific definition. So, just because something inappropriate happened it must mean it rose to that level.” she added.

Every school that receives federal funds is required under the law to have a Title IX coordinator. An overhaul is likely coming to the Children’s Online Privacy Protection Act, or COPPA, which protects children under the age of 13 from the distribution of their personal information without parental consent. Proposed legislation would raise that age to 17.

“We should have new regs by this time next year. How does it affect your daily life? Probably not a ton, except it really impacts the vendors that we contract with that keep student information systems,” Helfrich said. “Our vendors are going to have to be very careful going forward after these new regs about the information they have. … We can only contract with someone who promises not to sell our students’ information to someone else.”

Like COPPA, the Family Educational Rights and Privacy Act (FERPA) protects the privacy of student data. Amendments are pending. Because the law was enacted in 1974 and sets guidelines for how records must be kept, its provisions largely revolve around the keeping of paper records.

“Hardly anything is paper anymore. We keep our records electronically, everything’s in the cloud, we have apps, we have student information systems, so FERPA really does need an overhaul,” she said. “There’s new proposed regs, nothing new right now, but keep in on your radar for next year. We might have some new requirements about how we keep records.”

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Helfrich said a U.S. Supreme Court ruling about an issue totally unrelated to education could also have an impact on litigation involving school districts. The landmark case, Loper Bright Enterprises v. Raimondo, involved whether the National Marine Fisheries Service (NMFS) could require commercial fishing operations to pay the cost of government monitors assigned to their boats.

The justices concluded the NMFS did not have the power to make the rule, overriding the principle of the longstanding “Chevron deference” that directed courts to defer to an agency’s reasonable interpretation of an ambiguity in a law that the agency enforces.

“You might see more schools challenging statutes and regulations directly in court. It’s a little bit more school-friendly to not have Chevron deference,” she said. “So, what does that mean in the Department of Education? They might not have as much power to issue these guidance documents that schools have to follow.”

Free Appropriate Public Education (FAPE) guidelines under the Individuals with Disabilities Education Act (IDEA) require school districts to meet the unique needs of students with disabilities, including transportation. Of the 50.8 million K-12 students in the U.S. as of the fall of 2022, about 21 million rode school buses and approximately 7.5 million students were covered by the IDEA.

“It’s highly regulated and really unwavering,” she said. “There’s not a lot of flexibility with the IDEA,” Helfrich said. “It always goes back to FAPE.”

Meanwhile, Section 504, passed in 1973 as part of the civil rights movement, protects students and adults with disabilities from discrimination in places of public accommodation.

“Schools often say we don’t have to do this in our before-school or after-school programs because they’re voluntary, [for example] summer school, we don’t have to worry about that because it’s optional. That is definitely not true,” she said. “You see more cases in that area than really anything. If we opt to have a program, it has to be nondiscriminatory.”

The danger to school districts is that Section 504 “is loose-goosey, it’s not as regulated but it’s more dangerous” because it includes monetary damages for people who have been discriminated against.

“Parents can file discrimination lawsuits under Section 504 and seek monetary damages,” she continued.

The U.S. Department of Education’s Office of Civil Rights processed the highest number of such cases last year, resolving 45 percent more cases than the past record.

“It’s free to file. It’s very easy to file an OCR complaint. You don’t have to be represented by an attorney and then the OCR comes in and investigates. Let’s say an incident happened on the bus so they’re claiming discrimination against the bus driver. That driver will be interviewed. You as the director will be interviewed. The special education director will be interviewed,” she noted.

“Usually the superintendent, too. Anybody involved in this case will be interviewed. They always say, ‘Who is your 504 coordinator? Who’s in charge of investigating discrimination cases in your district?’” she continued. “And, literally, nine out of 10 times, the principal says somebody else, the counselor says somebody else, the bus driver says somebody, and the superintendent always says, ‘It’s not me. I don’t know who it is. It ain’t me’ and the OCR investigator is writing furiously. That is one easy thing to control.”

She urged audience members to return to their districts and train drivers about the district’s coordinator in case a parent mentions a potential disability complaint. Sharing that information on a single slide and keeping that slide “will go a long way to start out on the right foot,” she said.
Helfrich outlined a handful of recent court cases, including several that went against districts. She contended that the districts’ cases could have been strengthened by transportation departments being more involved in the writing of individual education plans.

Instead, all too often, those plans are written without such expertise and districts become locked into unrealistic requirements. And, many times IEPs include services that aren’t even needed yet lock the transportation department into expensive commitments.

“And once it’s in the contract, it’s there,” she warned. “Even if a parent is saying, ‘we didn’t want it’ at first, they’re going to want it.”

She cautioned case outcomes often tilt in favor of the parents of children with disabilities and special needs, particularly when school personnel mishandle interactions and neglect to properly document actions. “Juries and courts hate when schools say, ‘We don’t do that because if we do it for you, we’ll have to do it for everyone,’” she added.

Helfrich concluded with the joking rejoinder, “Do not let this scare you into resignation. Honestly, as long as you act reasonably, really think through, individualize, each student’s situation you honestly are going to be OK in this area. Keep your good common sense. Keep being good people, and it’s all going to be OK.”

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The day opened with special education attorney Betsey Helfrich’s keynote on “Avoiding the Bumps and Legal Hazards” in the transportation of special education students, followed by a general session on preventing sexual abuse during transportation led by Christy Schiller, vice president of consulting at Praesidium, Inc.

More sessions were held on technology usage, driver training, risk management, and transporting medically fragile students. The day closed with a tailgate-themed reception and dinner held on the trade show floor, providing attendees and vendors with a casual and interactive networking event.

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Special education attorney Betsey Helfrich returns to Texas for the Transporting Students with Disabilities and Special Needs (TSD) Conference in November with an eye on providing the legal landscape to attendees so they can avoid figurative hazards in the road.

Helfrich has been bringing her legal expertise to TSD Conference attendees since 2019. With increasing diagnoses of students with disabilities, Helfrich aims to equip student transporters the knowledge necessary to determine exactly what they need in their toolboxes to safely transport these students to their destinations. She will be sharing analysis and impacts of recent case law as well as practical day-to-day procedures that can protect transportation departments, minimize liability, and provide the safest care for students.

Helfrich’s keynote “Transportation of Special Education Students: Avoiding the Bumps and Legal Hazards” will be held on Sunday, Nov. 10 at 9 a.m.

While analyzing the complex world of navigating federal regulations such as the Individuals with Disabilities Education Act for students with disabilities or special needs, bus schedules, driver shortages and substitutes, and the individual needs of the students, Helfrich will break down case law, providing real-life scenarios and rising challenges to provide attendees with the tools and knowledge they need to connect the dots between legalities and their day-to day operations.

Helfrich owns her own practice after formerly serving as the special education department lead for law firm Mickes O’Toole, LLC in St. Louis. She has experience representing school districts in state and federal courts and provides counsel and training on special needs matters, including legal precedents such as Section 504 of the Rehabilitation Act of 1973.

Save $100 on conference registration with the Early Bird Discount, valid through Oct. 4. Visit tsdconference.com to register and view the conference agenda. The TSD Conference will be held in Frisco, Texas, Nov. 9 through Nov. 12.

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