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In the final days before leaving for their summer recess, Congress
overwhelmingly passed a comprehensive Energy Policy Act of 2005.
The President is scheduled to sign the bill into law on August 8th.
The bill was four years in the making and the first major energy
bill in 13 years. Included within the 1700-plus page of text were
a number of provisions of interest to NSTA and its members, including
a Clean School Bus grant program authorization, a new authorization
for diesel retrofits grants for a wide range of diesel vehicles
and tax credits for a variety of low emissions or improved fuel
economy vehicles.
NSTA has been
working on Clean School Bus legislation through a coalition of clean
diesel and natural gas engine manufacturers, the makers of improved
emissions equipment, public interest organizations and all three
major school bus trade associations. While we have been successful
in obtaining a total of $17 million over the past three years through
annual funding bills, enactment of the Energy Bill has secured the
congressional authorization for the program that should make it
easier to obtain higher levels of funding in future years. The program
provides grants for the replacement or retrofit of school buses
to reduce improved emissions using the latest technology vehicles
and equipment. Over the past four years, Congress has included Clean
School Bus authorizing legislation in virtually every comprehensive
energy bill taken up in the House or Senate. However, controversies
about other, unrelated issues have doomed final passage of a comprehensive
energy bill until now. In fact, our coalition decided this year
to also try to include the Clean School Bus legislation in the big
highway bill, which was seen as more of a "must pass"
bill than the energy bill. In an abundance of riches, Congress passed
both bills on the same day with almost identical Clean School Bus
legislation in both bills.
Both the Highway
and Energy Bills authorize $55 million in each of fiscal years 2006
and 2007 for Clean School bus grants to help pay for up to 50% of
the cost of new, lower emission buses to replace older buses or
100% of the cost of retrofit technologies such as particulate traps
or emissions catalysts that can be added to more recently manufactured
school buses. EPA will administer the program and will set cost
sharing rules based on emissions reductions and how best to achieve
a balance between replacement and retrofits. The version of the
bill in the Highway bill differs slightly from the Energy Bill version
in that it also authorizes EPA to fund the cost of purchasing biodiesel
fuels. NSTA worked hard to ensure that funds available under both
provisions can be provided to contractors and trade associations,
as well as to local and state school districts or agencies.
Other provisions
of interest in the Energy Bill include:
The bill authorizes
a total of $25 million over four years for a Fuel Cell School Bus
program to develop and demonstrate a fuel cell school bus.
The Diesel Emission
Reduction Program authorizes $200 M/yr for fiscal years 2007-2012
for a national grant and loan program to reduce diesel emissions,
particularly in areas designated as poor air quality areas.
The funding
is to be used for a variety of diesel vehicles and equipment, including
buses, or to reduce long-duration idling. 70% of the funds appropriated
are to be distributed by EPA through grants and loans to regional,
State, local or tribal agencies or port authorities with jurisdiction
over transportation or air quality and nonprofit organizations and
institutions that represent or provide services to organizations
that own or operate diesel fleets or promote either transportation
or air quality. Of these funds, up to 50% of the funds could go
to fund private fleet projects. 30% of funding overall would go
in grants or loans to support State administered programs through
an allocation formula.
The Energy Bill
also contains Clean Engine Tax Incentives that are estimated to
cost $874 million over ten years for a variety of clean engine or
improved fuel economy vehicles. These include fuel cell, hybrid,
clean burn diesel, and "alternative" fueled vehicles such
as vehicles running on both liquefied and compressed natural gas,
propane, liquefied petroleum gas, hydrogen, or an 85% methanol blend.
The amount of the credit is based on a variety of factors including
vehicle size, increase in vehicle cost and the average fuel efficiency
achieved. The maximum per vehicle credit available for each type
of vehicle is $44,000 for fuel cells, $12,000 for hybrids, $3,400
for lean burn diesel, and $32,000 for alternative fueled vehicles.
These credits do not extend to clean diesel school buses since the
low burn diesel language is limited to vehicles of up to 8,500 lbs
only.
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