2. It shall be unlawful to operate upon the public highways a school bus owned by or contracted to a school district with any passenger standing whenever it is employed exclusively for the transportation of students under the age of twenty-one and teachers or other persons acting in a supervisory capacity to or from school or school activities, except as provided in paragraph (a) or (b) of this subdivision:

1. (a) Standing passengers may be permitted on such a school bus, provided that the number of standing passengers on a school bus shall not exceed the limit established in the following schedule for the applicable time period: Period: Not more than: Through June 30, 2001 20% of approved seating capacity Between July 1, 2001 and 15% of approved seating capacity June 30, 2002 Between July 1, 2002 and 10% of approved seating capacity June 30, 2003 Between July 1, 2003 and 5% of approved seating capacity June 30, 2004
2. (b) Notwithstanding any other provision of this section to the contrary, standing passengers may be permitted without limitation as to number during the first ten days of session in each school year, and in circumstances where a breakdown, accident, or other unforeseen occurrence necessitates the transportation of standing passengers.
3. (c) Nothing contained in this section shall be construed to restrict the power of a city with a population of one million or more to adopt and enforce local laws that comply with at least the minimum applicable standards set forth in this section.