Building on a groundbreaking year for state electric school bus (ESB) policy adoption in 2022, the momentum continued to build, with nine additional states taking legislative action this year that produced eleven new measures. Here are four takeaways from state legislative policy efforts on ESBs in 2023, as of December 2023.

1. Fleet transition requirements continue to spread

Two states, California and Delaware, enacted new statewide zero emissions vehicles (ZEV) targets for school buses while an additional five states proposed bills. This brings the total number of states which have enacted legislatively binding school bus fleet transition requirements to six, alongside Connecticut, Maine, Maryland and New York. With a fleet of 20,333 school buses in California (the fifth largest in the country) and another 497 buses in Delaware, this brings the percentage of school bus fleets expected to electrify under a target or requirement, including through the Advanced Clean Truck rules (see below), to 30%. 32% of students nationwide live in states and cities with these targets and requirements.

• In California, AB 579 requires all new school bus purchases and contracts to be zero-emission by 2035. This legislation, signed by Governor Newsom on October 8th, 2023, is a significant step forward for school bus electrification. California has the fifth largest school bus fleet in the nation, and 40% of these buses pre-date the modern federal emission standards. These older buses expose children, workers and communities to unhealthy diesel fumes and should be the priority for replacement using the significant public funds available in California.
• In Delaware, HB 10 requires 30% of all school bus purchases in 2030 to be electric and sets interim goals beginning in 2025 at 5% of all school bus purchases, increasing by 5 percentage points annually. This legislation is particularly notable since Delaware is one of the few states that has a centralized procurement process, in which the state Department of Education purchases and co-signs for buses with districts, streamlining the process. Under the bill, the Department of Education shall prioritize the purchase of electric school buses for school districts that have the highest percentage of low-income students, students of color, and students with disabilities, as well as the highest levels of air pollution and greenhouse gas emissions.
• Hawaii did not pass either of the two school bus fleet-specific bills, SB 457 and SB 970, but the legislature enacted SB 1024, which establishes long-term goals for zero transportation emissions for all ground, inter-island, and air and maritime transportation in Hawaii by 2050. The bill also establishes mode-specific working groups that will, among other things, coordinate applying for funding opportunities. Moreover, the state added five zero-emission school buses with the assistance of federal DERA funding. Governor Green also emphasized the need to continue to build on the current progress made.

2. Additional states adopt the Advanced Clean Trucks regulation

Two additional states, Colorado and New Mexico, adopted the Advanced Clean Trucks (ACT) regulation. This brings the total number of ACT rule adoptee states to eight (California, the original state to promulgate the ACT rule in 2020, brings the total to nine). In addition to these nine states, ACT rule action is underway in four more states (Connecticut, Maine, Maryland and Rhode Island). This means that there is a possibility that soon there could be 13 states following the ACT rules.   

The ACT rule is a critical lever available to states to reduce harmful emissions from medium- and heavy-duty vehicles, including school buses. The ACT rule provides an important supply-side policy to complement demand-side pulls from federal, state, and local funding programs and transition requirements. It requires manufacturers who sell medium- and heavy-duty vehicles to sell zero-emissions vehicles as an increasing percentage of their annual sales from 2024 to 2035, when the total requirement reaches 75 percent of new sales for Class 4-8 vehicles, which covers most school buses.   

The long-term strength of the ACT rule received an important boost this year thanks to an agreement between the California Air Resources Board (CARB) and major manufacturers. The Clean Truck Partnership announced in July 2023, contains important provisions, including that the signatory manufacturers (which include school bus manufacturers like Daimler, Cummins and Ford/Cummins) and the Engine Manufacturers Association agree to not legally challenge California’s ability to set stronger than federal regulations under Section 177 of the Clean Air Act. This marks a commitment from the signatory companies to meet California’s vehicle standards regardless of whether any other entity challenges California’s authority –underscoring California’s ability to set stronger regulations and ensuring a continued commitment to a zero-emissions commercial vehicle future under ACT. In return, CARB agreed, among other things, to give greater lead-time when developing new regulations and may consider credit pooling mechanisms across ACT rule adoptee states which offer manufacturers greater flexibility in meeting the requirements.

3. States continue to fund school bus electrification and include support for equity

States continued to create new funding streams to support the electric school bus transition, approving $238 million in new support for clean school bus adoption that included electric school buses and designated support for underserved communities.

• The Michigan budget contained a historic $125 million for clean school buses. It requires funding to be awarded on a prioritization basis, covering 90% of the cost for prioritized qualified recipients and 70% of costs for nonprioritized qualified recipients. The selection criteria and prioritization of qualified recipients is to be carried out on the basis of Justice40 parameters. This funding will help districts across the state access cleaner transportation and is a critical component to reaching goals set out in the Michigan Healthy Climate Plan to achieve 100% electric school bus sales by 2030.  
• The positive momentum across the Midwest continued in Minnesota, which included $13 million in its transportation budget for an electric school bus grant program. This funding includes several best practices for state funding programs, including allowing program funds to be used on repowers or bus conversions; setting higher funding amounts for priority equity districts; and requiring applicants to submit the school district’s plan for prioritization of routes that support specific student populations, particularly areas which serve students eligible for free and reduced-price school meals, and those who experience disproportionately poor air quality and are located within environmental justice areas.   

4. States continue to pass other important legislation in support of ESBs

In addition to transition and funding measures, 2023 saw continued action on other important areas within state authority, including making sure that student transportation contracting terms meet electric vehicle needs. Lengthening allowable student transportation contracting terms is an important step states can take to make sure that fleets can convert to electric school buses, since these longer contracting and leasing terms allow the total cost of ownership benefits of reduced maintenance and fuel expenses to accrue over a longer period.

In Illinois, HB 2235 extended the allowable contracting term length from three years to ten years. This is extended even further to 15 years for contracts that use a significant percentage of electric school buses.  

In Michigan, SB 63 expanded the eligible use of local revenue and financing measures known as sinking funds to include a broader range of educational expenses, including school buses and safety measures. These funds give local communities and districts greater ability to fund student transportation and can be stacked with existing state and federal funding to help more districts electrify their fleets.  

Minnesota made history by enacting HF 7, which requires utilities to provide 100% carbon-free electricity by 2040. This combined with Minnesota’s electric school bus grant program would help ensure that ESBs and other electrified transportation in Minnesota gets even cleaner by decarbonizing the grid. 

The Washington State EV Coordination Council  drafted a statewide Transportation Electrification Strategy (TES) intended to ensure electric vehicle incentives and infrastructure are accessible and available to all Washingtonians. The state is prioritizing equity in adoption, emphasizing the need for targeted incentives, growing the used electric vehicle market, and ensuring charging access for all. The strategy also highlights the need for continued policy support and easy-to-access funding to accelerate and fund school bus electrification to meet needed adoption rates. A comprehensive set of policy recommendations aims to support a cleaner and more affordable transportation system while addressing emissions reduction goals. The final TES draft is due to be submitted to the Washington State Legislature by January 2024. 

Another program that aligns with Washington’s clean transportation and environmental goals is the Washington State Department of Ecology’s Zero Emission School Bus Grant Program.  The aim is to reduce toxic emissions, lower greenhouse gases and improve air quality, particularly in disadvantaged communities. The department is currently working with tribal governments to identify which of their communities are overburdened and highly impacted by criteria air pollution. Furthermore, applicants can score up to 60 points in their application scoring for a high percentage of students participating in Free and Reduced Priced Lunch (FRPL) Programs at their schools or transporting students within a rural low-income LEA. 

Our take

Overall, in 2023, there were significant advances in ESB policy at the state level.  Of note were the number of states with new transition targets and that moved forward with adopting ACT rule or continued in their regulatory processes. As of November 2023, 32% of school districts in the U.S. have state- or local-level directives to begin their transition to electric school buses, creating additional momentum toward electrification and sending a clear signal that allows manufacturers, school districts, contractors, utilities and others to plan for this future world.

The transition goals being set by states represent an important step in cleaning up the school bus fleet and reducing student exposure to harmful tailpipe emissions. For these new measures to be successful, other steps must also be taken. States must ensure that there is adequate funding and technical assistance to support districts and prioritize environmental justice communities in this transition by providing dedicated funding, technical assistance and workforce training opportunities.  

In addition, states play an important role in coordinating closely with the U.S. EPA and the Joint Office and other federal agencies to ensure that districts that received funding through the EPA Clean School Bus Program rebate and grant rounds receive sufficient support as buses from that program are delivered and begin operating. This also includes ensuring the required staff training and workforce development are provided for a smooth transition.   

The state legislative strides made in 2023 lay a solid foundation for the continued growth of electric school buses. By learning from both successes and challenges, policymakers and other stakeholders can collaboratively shape a future with clean rides for students and communities everywhere.