New Law Adjusts Probable Usefulness of a Zero-Emission School Bus from Twelve to Eight Years
December 2024, Latham, NY — New York State Bus Distributors Association lauded Governor Hochul for signing one of their top pieces of legislation into law. A.9238 by Assemblywoman Woerner, which is the same as Senator Mayer’s bill S.9292 corrects a problem with the current law by reducing the 12-year probable usefulness of a zero-emission school bus to 8-years.
Prior to the passage of the electric school bus mandate, all school buses were funded by the state over a five-year period, but that changed in 2022 when the legislature and Governor erroneously changed it to twelve-years.
By enacting this legislation into law, Governor Hochul has removed one of the many obstacles school districts are facing as they try to transition to zero-emission school bus fleets and meet the state’s 2027 purchasing requirement.
The previous law allowed school districts to receive state aid for the purchase or lease of zero-emission school buses over the probable usefulness period of 12-years when the actual usefulness of a school bus is between 5-10 years in New York State depending on the region. This discrepancy was creating significant financial hardship and acted as a barrier for school districts trying to convert their fleets to all-electric.
The financial hardship which was placed upon school districts came in the form of potentially paying more than double the amount in interest expense for the purchase or lease of an electric school bus; from an estimated $50,000 to more than $130,000 over 12-years. Additionally, the discrepancy means school districts which were replacing their school buses after 7 or 8-years would not have received reimbursement on those buses until long after they had been removed from their fleets and the bonds had been satisfied.
Problems with the current old 12-year probable usefulness law summarized:
- It was not in line with the actual usefulness of a school bus which tended to be between 5-8 years Upstate and 5-10 years Downstate.
- The old law unnecessarily inflated the cost of a zero-emission school bus by increasing the interest expense by almost three times what they were prior to the law being changed in 2022.
- The old law created a financial hardship by reducing cashflow for school districts with shorter replacement cycles of 5-8 years – a district that replaced its school buses every 8-years would not have received state reimbursement for those buses until four years after the bus had been removed from service.
- School districts that issued bonds for school buses for a maximum of 5-years would not have received the full amount of their state aid until 12-years later.
The new law properly aligns the probable usefulness of a school bus with the actual usefulness of a school bus and prevents the inevitable financial hardships which school districts and taxpayers would have faced had the law not been changed. It also removes one of the barriers school districts had been facing in trying to transition to zero-emission fleets.
