HomeGreen BusEPA Reduces Year-1 Funding for Clean School Bus Program Rebate

EPA Reduces Year-1 Funding for Clean School Bus Program Rebate

The anticipation of the Clean School Bus (CSB) Program rebate to acquire zero- and low-emissions school buses is almost over, as eligible applicants will be able to start applying next month. But funding is half the amount originally announced for fiscal years 2022 through 2026.

The application period to obtain the funds was to begin in late April but is now expected to open in May and will reportedly remain open for three months. A source familiar with the program told School Transportation News the delay is tied to U.S. Environmental Protection Agency (EPA) concerns about receiving too few applications in year one. More funding could be released later, the source indicated.

An email sent by STN to EPA seeking clarification was not answered as of this report.

Meanwhile, the EPA said it will review applications in September and begin the selection process. During a webinar on Wednesday, Christine Koester, the center director for the EPA, said the applications will not be based on a first-come, first-served basis. Any applicant that applies before the deadline will be placed into a lottery. No late applications will be accepted, she added.

Priority applications are defined as high-need school districts and low-income areas. The EPA explained that school districts listed in the Small Area Income Poverty Estimates (SAIPE) School District for 2020 as having 20 percent or more students living in property apply. However, if schools are not listed on the SAIPE, they can self-certify as having 20 percent or more students living in poverty, and they may be asked to show supporting documentation.

Other prioritized applicants include school districts identified with locale codes “43-Rural: Remote” and “42-Rural: Distant” as well as tribal school districts.

The EPA will select at least one application per state or territory provided there is at least one eligible application, to ensure a broad geographic distribution of funds.

Then, in October, the EPA will notify applicants of their selection status, and awardees can proceed with the purchasing of new buses and eligible infrastructure. From the date of selection to next April, selectees will need to submit a payment request form with purchase orders demonstrating that new buses and eligible infrastructure have been ordered.

Applicants not selected by lottery will remain in random order on a waitlist. Applicants may be selected from the waitlist if a selected applicant falls through, or the EPA may choose to roll the funds into the next round of funding.

The project period will end in October 2024, two years after applicants are notified. This, according to the EPA, is to ensure the district is comfortable with the new buses and to give adequate time for the school buses and charging infrastructure to arrive due to the supply chain shortage. At this time all old buses must be replaced, and selectees must submit their Close Out Form.

Koester noted that $500 million is being made available for the 2022 rebates. Half is available for zero-emission school buses, and the other half is available for zero emissions as well as propane and compressed natural gas (CNG) buses.

She added that school districts applying may only submit one application to replace up to 25 school buses. The EPA will not fund multiple applications for bus replacements that will serve the same school district.

To apply, applicants must submit applications using EPA’s Clean School Bus rebate forms. They must also have an active system for Award Management entity registration.

Eligible Applicants

As previously reported, eligible applicants include state and local governmental entities responsible for providing bus service to one or more public school systems, or the purchase of school buses. Nonprofit transportation associations, Indian tribes, tribal organizations, tribally controlled schools, or eligible contractors are also considered eligible applicants.

State and local governmental entities that provide bus service, include public school districts as well as Washington D.C., Puerto Rico, Guam, American Samoa, Commonwealth of the Northern Marian Islands and the U.S. Virgin Islands. Additionally, public charter schools with an NCES District ID are eligible to apply directly. Faye Swift, team leader of DERA grants and policy at the EPA stated that most state governmental entities would not be eligible to apply, except in the case of South Carolina, where the state owns its own bus fleet.

Swift added that eligible contractors include for-profit and not-for-profit or nonprofit entities that have the capacity to sell clean or zero-emission school buses or related chagrining or fueling infrastructure to school bus owners or arrange financing for such a sale. School bus dealers and OEMs that meet the above criteria are eligible contractors, he added.

Private school bus fleets, as School Transportation News has reported, are not eligible to apply directly for funding under the 2022 rebates. However, eligible applicants can partner with a private fleet that owns and operates buses to replace buses that service a school district under an active contract.

Related: Contractors Face Potential Limitations Over Access to Clean School Bus Funds
Related: EPA Webinar Shares More Details on Clean School Bus Rebate Program
Related: EPA Releases Initial Report on New $5B Clean Bus Program

For example, a bus dealer could apply to replace buses owned and operated by a private fleet. Under contract, the buses serve a school district. When applying for the funds, the bus deal would need to list the fleet that owns the school buses as well as the school district served by the buses. The dealer would then pass rebate funds on to the private fleet via a point-of-sale discount on the new buses or through other financial arrangements. The buses must also continue to serve that school district for at least five years from the date of delivery.

The same would be true if a school district applies for a private school bus contracting company. An existing contract must already exist between the district and private fleet, and the new buses must continue to serve the same public school district for at least five years.

Total Funding Awards

The maximum rebate amount per bus will be based on the bus fuel type, the bus size and whether the school district served by the buses meets one or more prioritization criteria. For instance, an electric Class 7 school bus is eligible for $375,000 if a school district meets one or more prioritization criteria, compared to $250,000 for buses serving other eligible school districts.

The EPA will not distribute funds more than the actual cost of the replacement bus, and funds above the maximum funding level are the sole responsibility of the applicant/awardee.

Source: EPA

Additionally, for those applying for electric school buses, school districts will be awarded $20,000 per charger for buses serving school districts that meet one or more prioritization criteria and $13,000 per charger for buses serving other eligible school districts.

Jason Wilcox, the coordinator of the EPA’s Diesel Emissions Reduction Act school bus rebates and state grants program, stated that school districts who are interested in electric buses should start reaching out to their local utilities right now, as they are critical to a successful installation.

Wilcox added that funding for infrastructure is limited to the fleet’s side of the meter.

Source: EPA

School Bus Replacement Guidelines

School buses eligible for replacement must be model-year 2010 or older diesel-powered school buses that will be scrapped if selected for funding. However, if a fleet has no eligible 2010 or older diesel buses and is requesting zero-emission school buses, the fleet can either scrap 2010 or older non-diesel internal combustion engine buses or scrap, sell, or donate 2011 or newer internal combustion engine buses.

School buses eligible for replacement must have a Gross Vehicle Weight Rating (GVWR) of 10,001 pounds or more, be operational at the time the application was submitted, be owned by the fleet receiving the replacement, and have provided bus service to the school district for at least three days a week on average during the 2021–2022 school year at the time of applying.

Wilcox added that pandemic school closures will not apply. For instance, if a school had a go virtual for a month due to COVID-19, that month of no school bus service will not apply to the guidelines.

Related: V2G Findings Announced From New York State Electric School Bus Project
Related: San Diego Utility Hosts First EV Fleet Day, School Buses Represented

Meanwhile, new replacement buses must have an all-electric battery or be powered by a CNG or propane drivetrain. They must be an EPA-certified vehicle with a model year of 2021 or newer, and not be ordered prior to receiving official notification of selection for EPA funding.

The buses must also be purchased and not leased or leased to own. Additionally, the new replacement buses must not include an unvented diesel passenger heater, not be funded with other federal funds, and must be made available for inspection by the EPA or its representatives, upon request, for five years from the date of delivery.

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