(1) The department of state police shall inspect each school bus annually, and as the department of state police determines necessary where school bus defects have been found, to determine if the school bus meets the requirements of this act and the rules promulgated pursuant to this act. The department of state police may delegate the inspection of school buses to publicly employed inspectors if the inspection complies with this section.

    (2) Inspection of a school bus may be accomplished at any time, at any location, on or off a school site, and as frequently as the department of state police considers necessary to secure passenger safety. A school bus may be rejected by the inspecting state police official for further use in transportation of passengers if it does not meet the requirements of this act and the rules promulgated pursuant to this act. However, if a school bus is determined to be safe for operation even though in unsatisfactory condition, the official may determine that not more than 60 days shall be allowed to effect a specific repair.

    (3) A person, school, or school bus owner shall not operate or permit to be operated a school bus which has not been inspected under this section.

    (4) Any public or private entity that owns or uses a school bus for pupil transportation shall identify itself to the department of state police so an inspection can be scheduled. If an entity has had school buses inspected in the previous year, it is considered to have identified itself. If an entity stops pupil transportation in 1 year and restarts pupil transportation in a later year, it must identify itself to the department of state police as requiring inspection before restarting pupil transportation. An entity is considered to have identified itself by notifying a person of the department of state police responsible for conducting inspections under this act.

    (5) When an inspection is scheduled by the department of state police, an entity shall identify to the state police inspector all of the school buses that it intends to use for pupil transportation in that school year. Any school bus that is not submitted for inspection shall be rejected and have a red sticker affixed pursuant to section 41.

    (6) The department of state police may prohibit the placement and use of any device or equipment on a school bus that presents a safety hazard to the pupils, driver, or motorists during the loading, unloading, or transportation of pupils.

    (7) A school, before establishing a contract with a company for school bus services, shall require the company to verify in writing that the buses used by the contractor have been inspected by the department of state police and have passed that inspection. The school shall specify in a written contract that the contractor will not use any school buses that have not been inspected or have failed inspection, and that a violation of this provision of the contract will result in revocation of the contract. The contract shall specify that the contractor shall submit, in writing, the inspection results of its entire fleet of buses to the school within 30 days of the completion of the department of state police inspection. A school shall identify to the department of state police all of the contractors the school is using upon request.