(1) The State Board of Education is hereby authorized, empowered and directed to advertise for and receive sealed bids and proposals for sale of school bus bodies and school buses sold as complete units to the school boards of school districts in this state. The State Board of Education shall approve persons, firms, corporations or associations authorized to sell school bus bodies and school buses sold as complete units, and shall establish prices relative thereto based upon the lowest and best bids, which school districts may not exceed in purchasing such equipment. In determining the lowest and best bids received for such equipment, there shall be included as part of the total cost thereof any transportation or freight charges which will be incurred. The State Board of Education may permit all such bidders to sell said equipment provided that the bidders agree to sell the equipment at prices established based upon the lowest and best bid and in compliance with rules and regulations relative thereto promulgated by the state board. Persons, firms, corporations or associations permitted to sell school bus bodies and school buses sold as complete units shall be limited to those actually submitting bids for consideration by the State Board of Education. The State Board of Education shall reserve the right to reject any and all bids submitted.

(2) School boards may purchase school bus bodies and school buses sold as complete units without additional advertisement for bids, provided that the prices for such equipment do not exceed the maximum allowable prices established under the provisions of subsection (1) of this section, and that said purchases are in compliance with the conditions specified therein. All such purchases shall be subject to the approval of the State Department of Education, which shall verify compliance with the applicable specifications, rules and regulations promulgated by the State Board of Education.

(3) In addition to the method of purchasing authorized under this section, school boards are hereby authorized to advertise for and accept the lowest and best bid received for the purchase of school bus chassis and/or pupil transportation service vehicles. Provided, however, that local school governing boards may purchase school bus chassis and/or pupil transportation service vehicles from any motor vehicle dealer domiciled within the county of such governing board, whose bid does not exceed a sum equal to three percent (3%) greater than the price or cost which the dealer pays the manufacturer, as evidenced by the factory invoice for such vehicles. In the event said county does not have an authorized motor vehicle dealer, said board may, in like manner, receive and accept bids from motor vehicle dealers in any adjoining county. No purchase of school bus chassis or service vehicles under the provisions of this subsection shall be valid unless the purchase is made according to statutory bidding and licensing requirements. All purchases under provisions of this subsection shall be subject to the approval of the State Department of Education, which shall verify compliance with the applicable specifications, rules and regulations promulgated by the State Board of Education.

(4) Upon application to and approval by the State Department of Education, school governing boards are hereby authorized to purchase used school buses and used pupil transportation service vehicles, provided that said vehicles meet applicable specifications and the purchase price does not exceed their fair market value. Said fair market value shall be determined by an appraisal by three (3) experienced and impartial citizens, the selection of whom shall be mutually agreed upon by the parties thereto. Said appraisers may be subject to approval by the State Department of Education. Maximum regard for pupil safety and adequate protection of health shall be primary requirements which shall be observed by local school governing boards in purchasing used school buses. The State Department of Education may inspect or have inspected any used school bus prior to purchase to determine whether said bus meets requirements of law and regulations of the state board.

(5) In the event the school board shall have determined that school buses or pupil transportation service vehicles are no longer needed for the transportation of pupils in such school district, such equipment may be sold to another school district without the necessity of advertising for bids. The school district proposing to sell the buses or service vehicles and the school district proposing to purchase such equipment shall agree upon a fair and reasonable price therefor. The agreement shall be spread upon the minutes of the boards of the respective school districts and shall be subject to the prior approval of the State Department of Education, which shall verify compliance with applicable specifications, rules and regulations of the State Board of Education.