The original copyright holder receives a portion of the sale of the sheet music.
If you make (or have someone else) make a custom arrangement, it would seem that that is a derivative work. And if you do that with an arranger that you hired from a TMEA booth, it would seem to me that that arranger should negotiate with the original copyright holder because that arranger is acting as a publisher (de facto, for profit) for a derivative work.
At this point, the usual and established “fair use” questions come into play:
Is it a derivative of the complete work?
Is it excerpted? If so, how much? Is it an exact quote or is it a distant allusion?
Is it for mass publication (therefore, for profit)?
Is it to be broadcast on radio, TV, internet or otherwise digitally transmitted as part of a for profit platform?
These are the types of questions that copyright holders should ask, and I believe would give them standing in an infringement suit.
BUT - for all y’all educated professionals, many of you with post-grad degrees, I absolutely promise you that the actual laws and the legal opinions do not mean what you think they mean. None of it is in plain English and even if you think you understand it, a lawyer will eat you for lunch and make you seem stupid.
So for moving forward, would it be possible to get an opinion from your district’s legal office?
For example, describe in detail what you want to do, why you believe it is fair use, and have the legal office respond on their letterhead, with a wet signature. This would be kept on file at the fine arts director (or head director in smaller districts) for a period of time beyond the statute of limitations.
I don’t think that this would need to be carried to extremes, such as requiring an opinion every time you changed a note, or for every piece of music performed K-12 for every concert, assembly or PTO meeting. But, perhaps it would be a good idea to have some actual legal guidelines.
Maybe a good place to start could be with your district or school plagiarism policies?