Amending the Period of Probable Usefulness of a Zero-Emission School Bus
New York State Bus Distributors Association respectfully urges Governor Hochul to sign into law A.9238 by Woerner (same as) S.9292 (Mayer) which corrects a problem with the current law by reducing the 12-year probable usefulness of a zero-emission school bus to 8-years.
Enacting this legislation into law will remove 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.
Current law allows 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 creates significant financial hardship and acts as a barrier for school districts trying to convert their fleets to all-electric.
The financial hardship placed upon school districts comes 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 replace their school buses after 7 or 8-years will not receive reimbursement on those buses until long after they have been removed from their fleets and the bonds have been satisfied.
Problems with the current 12-year probable usefulness law summarized:
- Current law is not in line with the actual usefulness of a school bus which tends to be between 5-8 years Upstate and 5-10 years downstate.
- Current law unnecessarily inflates 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.
- Current law creates a financial hardship by reducing cashflow for school districts with shorter replacement cycles of 5-8 years – a district that replaces its school buses every 8-years will not receive state reimbursement for those buses until four years after the bus has been removed from service.
- School districts that issue bond for school buses for a maximum of 5-years will not receive the full amount of their state aid until 12-years later.
If enacted, the legislation will take steps toward aligning the probable usefulness of a school bus with the actual usefulness of a school bus, prevent the inevitable financial hardships which school districts and taxpayers will face under current law, and remove one of the barriers school districts face in trying to transition to zero-emission fleets.
The New York Bus Distributors Association respectfully asks Governor Hochul to sign this very important legislation. We look forward to continuing our partnership as we do our part to help meet the state’s zero-emissions goals.
