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To supplement our prior post on the new EPA Clean School Bus Program, we summarize the information provided in EPA’s 4/27/22 public webinar.  EPA will update its website in May with the official details.

Recall the bipartisan infrastructure law’s calls for EPA’s clean school bus program to provide up to $5 billion to begin transforming the nation’s fleet of school buses, converting diesel buses to Zero Emission (i.e., battery-electric motor) or “clean” (i.e., fueled by compressed natural gas (CNG) or propane).  EPA will aim for a broad geographic distribution of funds and allow school districts more than one opportunity to receive funding.  The first tranche of funding will be a $500 million rebate program.

Rebate Program Application Period

The first $500 million will come as a rebate program (as opposed to grants).  The rebate program will be open from May to August (exact dates TBA) and all valid applications will be entered into a lottery at the close of the application period.  Each school district can seek to replace up to 25 buses plus related infrastructure.  If a school district is selected, it will be allowed to purchase the requested number of buses with its own funds and can then submit “proof” of payment/replacement for a timely (partial) rebate from EPA.  For example, selected program participants will eventually need to show proof of purchase, proof of scrap, proof of new buses, etc.  This first rebate program is expected to close by 2024 to allow for short-term financing, supply chain and delivery delays, etc.

Eligible Applicants

  • State and local governmental entities that provide bus service or are charged to purchase buses;
  • Public charter schools with NCES District IDs;
  • Indian tribes, tribal organizations, tribally controlled schools;
  • Nonprofit school transportation associations;
  • Certain contractors are also eligible, but private fleet operators are not unless they partner with an eligible applicant type.

District Prioritization

EPA will offer additional rebate funds for applicants that meet at least one prioritization criteria:

  • High need school districts and low-income areas (20%+ of students live in poverty)
  • Rural school districts
  • Tribal school districts

Outgoing Bus Requirements

Buses that are being replaced must:

  • Be model year 2010 (or older) diesel that will be scrapped if replaced/funded
    • If none of the above are available, an applicant can instead scrap model year 2010 (or older) non-diesel buses or scrap, sell or donate 2011 (and newer) buses
  • Be at least 10,001 pounds
  • Be operational
  • Be owned by fleet receiving replacement
  • Have provided service at least 3 days/week on average during the 2021/2022 year (excluding COVID-related closures)

Replacement Bus Requirements

 Buses that are being purchased under this program must:

  • Be battery-electric, CNG or propane powered
  • Be model year 2021 model year or newer
  • Be at least 10,001 pounds
  • Be ordered after receiving EPA selection notice
  • Be purchased (not leased or leased-to-own).
  • Serve the applicant’s school district for at least five years from date of delivery
  • Meet federal safety standards and be maintained, operated, insured, registered charged/fueled according to manufacturer’s recommendation and state requirements
  • Not include an unvented diesel passenger heater
  • Not be funded with other federal funds
  • Upon request, be available for inspection for five years

Rebate Funds Summary

The maximum rebate per bus is dependent on replacement fuel type, bus size and priority status.  Any overages are applicant’s responsibility.  For the first rebate program, the maximum available “per bus” rebate is $375,000 (for a Zero Emission, Class 7 or higher, serving a district with a prioritization criterion).  The lowest bus rebate amount is $15,000 (for a propane-fueled, Class 3-6, serving a district without a prioritization criterion).  There are several levels between the two extremes that EPA will eventually provide in a table, but it is clear the Zero-Emission buses earn the largest rebates.

The maximum rebate for related infrastructure projects (e.g., electric panels, charging units) is $20,000 (priority) or $13,000 (non-priority).  EPA recommends talking to your local utility early and often if you plan to ultimately install a charging station.  Certain items like the distribution network, transformers and electric meters are not eligible for rebates.

Getting ready for the application period

As eligible schools prepare for the upcoming application period, there are steps they can take right now to ready themselves for the process.

  • Sign up to receive EPA’s email/newsletters on this program: https://lp.constantcontactpages.com/su/dgrhRed/cleanschoolbus
  • Create or update the district’s System for Award Management (SAM.gov) entity profile
    • The online application system requires a valid SAM account: https://sam.gov/content/entity-registration
    • Confirm points of contact
    • Confirm presence of UEI (ID number)
    • Note individual SAM accounts are not the same as an organization’s SAM account
    • For help with SAM.gov, reach out to the Federal Service Desk at: https://www.fsd.gov/
  • Evaluate your organization’s fleet to determine how many buses are eligible for replacement/rebate
  • Begin weighing your organization’s interest/feasibility for the program

For more information about the EPA Clean School Bus Program, contact Alfredo Fernández, Matthew Ranelli or another member of Shipman’s Environmental team.