Relating to the use of school buses by public schools.

SB 981 amends Texas law to update school bus replacement grant programs, requiring at least 75% of funds to support electric school buses or diesel-to-electric conversions. It expands grant eligibility to private companies leasing buses to school districts and prioritizes projects that reduce diesel exhaust, especially particulate matter. The bill sets specific replacement criteria, such as requiring diesel buses to be model year 2006 or earlier for combustion engine replacements or at least nine years old with 200,000 miles for electric conversions. Additionally, it reduces the maximum term for school bus contracts from 15 to 10 years.