Two years ago, 5-year-old A.M., a child with autism, became the victim of bullying on the school bus he rode to elementary school in the Poudre School District of Fort Collins, Colorado. The perpetrator of A.M.’s abuse was not a fellow student, but a school bus attendant the district had hired to provide students like him with extra support.

Not only was A.M., whose full name is withheld in court documents, restrained in a school bus seat throughout the months-long abuse, his disability rendered him nonverbal, leaving him unable to ask for help or tell his parents what was happening.

The school board agreed to pay out $16.2 million on May 14 to settle a lawsuit filed by parents of A.M. and other students with disabilities who were abused by Tyler Zanella while being transported to and from school during the 2022-2023 school year.

Comparatively, the settlement is about 15 percent of the district’s $10.3 million transportation services budget for this past school year.

After voting to accept the settlement, Poudre school board president Kristen Draper said she hoped the amount would help foster healing and rebuild trust.

“This resolution represents our collective commitment to addressing the harm caused and to supporting the ongoing recovery and well-being of these students and their families,” Draper said.

A.M. was not Zanella’s only victim. In all, county prosecutors say the attendant abused 10 students that school year.

The district uncovered Zanella’s criminal history and a previous child abuse conviction during a background check before he was hired in August 2022. A.M.’s parents also voiced concern about the attendant throughout the school year, but their words did not prompt change until a teacher stepped in.

When A.M. came to class with red marks on his face, a teacher asked questions, prompting the school district to review camera footage and report the abuse to police.

Related: Colorado School Bus Aid Arrested, Charged with Abusing Student

Internal bus camera footage documented Zanella swearing at A.M., calling him names, and subjecting him to physical abuse, slapping, pinching, and pushing the restrained child dozens of times over several months. According to court documents, Zanella called A.M. a f—–,” “little sh–,” and said, “if A.M. were his kid, he would be dead by now because Mr. Zanella did not have that kind of patience.”

Zanella, 36, ultimately pleaded guilty to seven counts of assault on an at-risk person, as well as harassment, and child abuse. He was sentenced to 12 years in prison in April 2024.

He also had a previous misdemeanor child abuse conviction when he applied for the  position at Poudre School District. Title 22 of the Colorado Revised Statutes lists felony child abuse as cause for termination or withholding employment.

David Lane, A.M.’s attorney, said in an email he was shocked that Zanella had been hired after school officials learned of his criminal history and that he had lied about it.

“It is utterly incomprehensible how a school district could allow a convicted child abuser to have access to utterly helpless children in this situation,” Lane wrote. “Ultimately, this governmental failure will cost the taxpayers millions of dollars and these innocent children have been severely damaged.”

Following the incident, the district spent $2 million on internal policies, which included hiring consultants at the Center for Effective School Operations, or CESO, to review the district’s policies. Among primary recommendations, CESO suggested the district develop procedures for camera footage requests and supervisor audits.

In a school board presentation on the transportation review findings last summer, Chief Operations Officer Jeff Connell reflected on how school bus driver shortages led to mechanics and supervisors driving buses, and many employees taking shortcuts.

Connell said the district was hiring an integration services transportation manager dedicated to coordinating support for students with disabilities as well as a second operations manager. Per the CESO recommendation, Connell said both managers would oversee north and south terminals to maintain a consistent culture across both locations. Connell said he hoped to cover the budget for the positions by increasing route efficiencies.

The school district previously maintained three days of video footage from each camera. Supervisors are now required to review at least one hour of footage each week, “with an emphasis on routes that have new staff and routes that serve students with special needs – particularly students who are pre- or non-verbal.”

Related: Florida School Bus Attendant Arrested for Inappropriate Behavior with Young Girls
Related: Seminar Provides Elements of Comprehensive Training for School Bus Attendants
Related: South Carolina Case Highlights Need for Attendants on School Buses

Moving forward, the district promised to update cameras on all school buses—a $1.9 million cost paid for with bonds. The district hired transportation service provider Zum to install four internal cameras on each school bus, including a driver-facing camera with a built-in coaching system.

“There’s a lot of hours of video to go through between ride-alongs, reviewing the video, following up on incidences and also having the driver-coaching camera, we’re going to have a lot of information available to us that we’ve never had before,” Connell said.

Draper described the incident as a painful chapter in the school district’s history but added that she hoped it would prove to be a “catalyst for important and necessary improvements.”

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The Corporate Transparency Act is back in play for small businesses including those in the student transportation industry. 

The U.S. Supreme Court on Thursday granted a stay of a 5th Circuit Court of Appeals decision in December that issued a temporary injunction on enforcing the law. In the hope 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 in Texas on Dec. 3 granted an injunction blocking the Corporate Transparency Act from being enforced — a decision that U.S. attorneys quickly appealed to the 5th Circuit, putting the fate of the act in legal limbo.

On Dec. 23, the 5th Circuit granted the government’s motion to keep the law in place through the appeal, only to reverse on Dec. 26. On Jan. 24, the U.S. Supreme Court lifted the stay, through the completion of review before the 5th Circuit.

To make matters even more confusing for business owners, the high court reviewed the government’s request to lift the stay only in the Texas case, leaving in place a second Texas case, Smith v. U.S. Department of Treasury, in which a stay remains, making current reporting voluntary.

A third federal judge in Oregon denied a similar request for an injunction in September, which will be reviewed by the 11th Circuit Court of Appeals.

The U.S. Supreme Court did not provide an explanation for granting the request for a stay — Justice Ketanyi Brown Jackson was the only dissenting voice, noting she did not see a need for the nation’s highest court to intervene because the 5th Circult already expedited its consideration of the appeal by the federal government’s appeal, which already delayed enforcement of the law by nearly four years.

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.

Meanwhile, FinCEN issued an alert last week clarifying the current status of Beneficial Ownership Information (BOI) reporting. While the Supreme Court lifted the injunction in the Texas Top Cop Shop case, a separate injunction in the Smith case remains, temporarily blocking CTA enforcement, FinCEN continued. The government has yet to appeal the Smith ruling.

That means companies do not have an immediate filing requirement, but voluntary filing is available.

If CTA proceeds, small businesses would have to file the required benefit ownership report very quickly. 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,” Megan Henderson, an attorney at the Longmont, Colorado firm Lyons and Gaddis, advised last month.

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 are now 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.”

Related: (STN Podcast E238) Time Will Tell: Shakeups in the School Bus Business World (+ Thomas Built Buses CEO Interview)
Related: IRS Publishes Final Rule on Direct Pay for Tax-exempt Government Agencies
Related: Business As Usual for Collins Bus Customers, Says Forest River

Similar legislation to the Corporate Transparency Act have already been introduced 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.

Ryan Gray contributed to this report.

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