BILL NUMBER: S2490
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the vehicle and traffic law, in relation to a feebate
program for medium and heavy duty vehicles
 
PURPOSE OR GENERAL IDEA OF BILL:
To create a program of efficiency fees and rebates levied at the point
of registration for vehicles greater than ten thousand pounds
 
SUMMARY OF PROVISIONS:
Section one of the bill adds a new Article 17-D to the Vehicle and Traf-
fic Law (VTL) to create a "feebate" program, in which fees for low-effi-
ciency vehicles go to fund rebates for their higher-efficiency counter-
parts. This new article contains several new sections;
- Section 499-e of the VTL defines the purpose of the feebate program
and sets a goal of revenue neutrality
- Section 499-f creates definitions
- Section 499-g provides that this article shall apply to all vehicles
registered in the state of New York with a gross vehicle weight rating
exceeding ten thousand pounds
- Section 499-h creates the efficiency fees and rebates at the following
fuel efficiency and dollar amounts: Fuel economy of less than three MPG
or MPGe shall be levied a $45,000 fee Fuel economy of at least three but
less than five MPG or MPGe shall be levied a $30,000 fee
Fuel economy of at least five but less than seven MPG or MPGe shall be
levied a $20,000 fee Fuel economy of at least seven but less than ten
MPG or MPGe shall be levied a $10,000 fee Fuel economy of at least ten
but less than 20 MPG or MPGe shall be provided a $45,000 debate Fuel
economy of at least 20 but less than 30 MPG or MPGe shall be provided a
$100,000 rebate Fuel economy of at least 30 MPG or MPGe shall be
provided a $150,000 rebate
This section also provides that the Department of Motor Vehicles (DMV)
Commissioner shall annually review and recommend adjustments to the
efficiency fee and rebate levels as needed based on such factors as
actual vehicle registration data, market availability and price points
of zero emission (ZEV) or near zero emission (NZEV) vehicles, actual and
projected fuel economies of covered vehicles, and any other factor they
deem relevant.
The fees collected from the feebate program may be used to cover the
costs of administration of the program, and all fee and rebate dollar
amounts shall be prominently displayed on the DMV's website as well as
vehicle dealers' places of business.
Section 499-i provides that the Commissioner shall conduct an education
campaign to ensure that manufacturers, dealers, fleet purchasers, and
the general public are aware of the provisions of this article.
Section 499-j provides that the Commissioner shall prepare an annual
report on the feebate program examining the effectiveness and adequacy
of the fee and rebate levels, an aggregate description of the fuel econ-
omies of affected vehicles, and recommendations for legislative changes.
Section two of the bill sets the effective date of three years after the
act shall have become a law. As manufacturers typically need several
years to make substantial changes to a vehicle, a three-year effective
date will give the medium- and heavy- duty vehicle market time to adjust
to the financial incentives of a feebate program.
 
JUSTIFICATION:
New York set a statutory goal of a zero emission electricity sector by
2040, including 70 percent renewable energy generation by 2030, in the
historic Climate Leadership and Community Protection Act (CLCPA) of
2019. The state legislature later codified in Ch. 423 of 2021 the goal
that 100% of medium- and heavy-duty vehicles sold or leased in New York
be zero emission vehicles by 2045. The CLCPA's Final Scoping Plan, the
document which details the strategy by which the state is to achieve the
CLCPA's carbon emission goals, calls for an even tighter ZEV timeline of
50% of all medium-duty vehicle sales by 2030 and 80% of all heavy-duty
vehicle sales by 2035 (Scoping Plan: Full Report, December 2022, New
York State Climate Action Council, p.155.).
Many experts acknowledge, however, that without some kind of state
intervention to realign market signals, such objectives will be diffi-
cult to meet. This is because fossil fuel diesel trucks come tens of
thousands of dollars cheaper than their battery electric or hydrogen
fuel cell counterparts. This bill, modeled after similar legislation in
Vermont and California and recommended on page 156 of the CLCPA Final
Scoping Plan, would create a "feebate" program, in which fees for low-
efficiency vehicles go to fund rebates for their higher-efficiency coun-
terparts, for all trucks with a gross vehicle weight rating (GVWR)
greater than 10,000 pounds (setting the threshold at this GVWR ensures
that the program would apply to commercially owned vehicles, as lighter
duty trucks such as pickups or mini-vans purchased for personal use fall
below this weight level).
The feebate program created by this bill would set fees between $10,000
and $45,000 for trucks with a miles per gallon (MPG) or miles per gallon
equivalent (MPGe) (which represents the number of miles a vehicle can
travel using a quantity of "fuel" - actually electricity - with the same
energy content as one gallon of gasoline) of less than ten. Trucks that
get ten or higher MPG or MPGe would receive a rebate between $45,000 and
$150,000 depending on fuel economy. With a typical diesel-powered
commercial truck achieving a fuel economy of only five to eight MPG,
while their battery-electric counterparts may receive one as high as 30,
these feebate levels are designed to reflect the trucking market as it
actually exists today. DMV would be able to regularly recommend adjust-
ments to the feebate levels, however, accounting for ZEV or near ZEV
model availability, vehicle registration data, and projected fuel econo-
mies and price points, in order to ensure that the program remains
effective in achieving its goals while maintaining its revenue neutrali-
ty. Already in place in countries such as France, Austria, Denmark, and
Norway, a well-designed feebate program can properly capture the various
social and environmental externalities created by diesel-dependent
trucks. As stated in the NYS Climate Action Council's Final Scoping
Plan, "(d)iesel trucks and port equipment are one of the largest sources
of local air pollution in Disadvantaged Communities. Although they
comprise only a small portion of total vehicles in the State, diesel
trucks and buses are responsible for 30% of total particulate matter and
NOX emissions from mobile sources (Scoping Plan: Full Report, December
2022, New York State Climate Action Council, p. 159). As the American
Institute of Architects New York notes in its recent report on freight
logistics in the age of e-commerce, "(f)reight vehicle trips negatively
impact (New York City) in a number of ways, including through GHG emis-
sions and other pollutants that contribute to poor air quality, noise,
road wear and tear, traffic crashes, and congestion. Mode shifting is a
strategy that mitigates these impacts by swapping the vehicles that
deliver goods from large trucks to smaller and/or cleaner vehicles."
(Delivering the Goods: NYC Urban Freight in the Age of E-C ommerce,
November 2022, AIANY Freight and Logistics Working Group, p. 36). These
negative impacts manifest in a myriad of ways, including increased
greenhouse gas emissions (AIANY estimates a five percent increase in
emissions in New York City due to increasing truck volumes between 2005
and 2019, for a total of 1.8 million additional tons-of CO2 per year),
increased emissions of particulate matter, major safety impacts for more
vulnerable road users such as pedestrians, cyclists, the elderly, and
individuals with restricted mobility, increased congestion and traffic
chaos from delivery vehicles which block lanes of traffic, and deafening
noise pollution in the typical range of 80 to 110 decibels (Delivering
the Goods: NYC Urban Freight in the Age of E-Commerce, November 2022,
AIANY Freight and Logistics Working Group, p. 7).
While a comprehensive solution to our state and city's trucking problem
will ultimately involve a range of proposals, including investments into
alternative modes of transport and better street design, the electrifi-
cation of the trucking industry is one important piece of the puzzle.
The feebate program created by this bill will better align market
signals with true environmental and social costs while hastening our
state's progress towards its ZEV transition goals as outlined in the
CLCPA and Ch. 423 of 2021.
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS:
None; program is self-financing.
 
EFFECTIVE DATE:
This act shall take effect immediately; provided that sections 499-e,
499-f, 499-g, 499-h, and 499-j of the vehicle and traffic law shall take
effect three years after they shall have become a law.