Transit and Shuttle Bus Grant

Alexa Voytek, Deputy Director of Programs, Innovation & Transportation, Communications, TDEC Office of Energy Programs, alexa.voytek@tn.gov, 615-613-1096.

Transit or Shuttle Buses eligible for replacement or Repower include 2009 engine model year or older Class 4-8 diesel buses (Gross Vehicle Weight Rating (GVWR) greater than 14,001 lbs.) used for transporting people. For purposes of this solicitation, “Transit Buses” shall include all vehicles that provide public transportation, which shall mean regular and continuing shared-ride surface transportation services that are open to the general public. “Shuttle Buses” shall include vehicles that provide transportation services for one or more specific entities, intra-terminal or intra-facility transportation services, or mobility-on-demand services.

Eligible Transit and Shuttle Buses may be Repowered with any new All-Electric engine, or may be replaced with any Alternate Fueled or All-Electric vehicle, with the engine model year in which the Repower or replacement occurs or one engine model year prior. “Repower” shall mean to replace an existing engine with a newer, cleaner engine or power source that is certified by EPA and, if applicable, CARB, to meet a more stringent set of engine emission standards. Repower includes, but is not limited to, diesel engine replacement with an engine certified for use with diesel or a clean alternate fuel, diesel engine replacement with an electric power source (e.g., grid, battery), diesel engine replacement with a fuel cell, diesel engine replacement with an electric generator(s) (genset), diesel engine upgrades in Ferries/Tugs with an EPA Certified Remanufacture System, and/or diesel engine upgrades in Ferries/Tugs with an EPA Verified Engine Upgrade. All-Electric and fuel cell Repowers do not require EPA or CARB certification (see Appendix D-2 of the State Trust Agreement). More information on project eligibility can be found in the Transit and Shuttle Bus Grant Application Manual.

Transit or Shuttle Buses eligible for replacement or Repower include 2009 engine model year or older Class 4-8 diesel buses (Gross Vehicle Weight Rating (GVWR) greater than 14,001 lbs.) used for transporting people. For purposes of this solicitation, “Transit Buses” shall include all vehicles that provide public transportation, which shall mean regular and continuing shared-ride surface transportation services that are open to the general public. “Shuttle Buses” shall include vehicles that provide transportation services for one or more specific entities, intra-terminal or intra-facility transportation services, or mobility-on-demand services.

Eligible Transit and Shuttle Bus replacements and/or battery-electric powertrains for All-Electric Repowers must be purchased new, from an original equipment manufacturer (OEM) or OEM-authorized dealer. New Transit or Shuttle Buses must be Alternate Fueled or All-Electric and shall be fully equipped by the manufacturer or by a third party at the direction of the manufacturer to operate on an alternative fuel or electricity prior to the initial purchase and registration of the vehicle.

TDEC will allow the replacement or Repower of eligible Transit or Shuttle Buses that are leased out, so long as the entity applying to receive funds 1) takes full ownership of the vehicles and 2) the new vehicles will be leased to Tennessee-based operators who will use the vehicles to transport people for the duration of the grant’s five-year annual reporting period, to begin following vehicle procurement, delivery, and the placement of vehicles into service. In the event that a vehicle lease contract between the vehicle owner and a transit or shuttle agency is not renewed within the grant’s five-year reporting period, the owner must place the replacement or Repowered Transit or Shuttle Buses within another transit or shuttle agency in Tennessee and continue to report on related metrics (e.g., actual fuel usage, mileage of the grant-funded vehicles, etc.) for the remainder of the five-year reporting period. In the event the owner is unable to continue to operate the Transit or Shuttle Buses within a Tennessee transit or shuttle agency, that owner shall reimburse the State for the pro rata amount of the residual value, based upon the State’s original contribution to the purchase price.

Only vehicles purchased within the period of performance of a fully executed and approved Grant Contract shall be eligible for reimbursement. No credit will be given for costs incurred prior to the grant period of performance. 

Yes. However, eligible Transit and Shuttle Buses must be registered within the State of Tennessee.

Yes; all eligible Transit and Shuttle Buses to be replaced must be Scrapped within sixty (60) days of new vehicle delivery. Engines from eligible Transit and Shuttle Buses to be Repowered must be Scrapped within sixty (60) days of vehicle Repower (if the applicant will perform the Repower) or within sixty (60) days of Repowered vehicle delivery (if an external, third-party will perform the Repower). “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any eligible Transit or Shuttle Bus will be replaced as part of an eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half. Scrappage of all replaced or Repowered Transit and Shuttle Buses is required by the State Trust Agreement.

For selected, eligible Transit and Shuttle Bus projects, the program will provide:

• Up to 25% of the cost of a Repower or replacement for Non-Government Owned projects;
• Up to 50% of the cost of a Repower or replacement for Government Owned projects;
• Up to 75% of the cost of a Repower or replacement for Government Owned projects that will operate 70% or more of the time in current or former nonattainment areas for Ozone and/or PM2.5 National Ambient Air Quality Standards (NAAQS) (please note that only portions of Roane and Cocke counties are designated as current or former nonattainment areas for Ozone and/or PM2.5 NAAQS. Within Roane County, this includes the area described by U.S. Census 2000 block group identifier 47-145-0307-2, and within Cocke County, this includes the area covering Great Smoky Mountains National Park);
• Up to 75% of the cost of a Repower or replacement for Government Owned projects that will operate 70% or more of the time in Distressed Counties.
• For All-Electric projects, up to 25% of the acquisition and installation costs for associated charging infrastructure (All-Electric infrastructure costs) for Non-Government Owned projects and up to 50% of the All-Electric infrastructure costs for Government Owned projects.

For All-Electric Transit and/or Shuttle Bus projects, TDEC will provide funding to support a maximum of 15 Transit or Shuttle Bus replacements or Repowers per applicant. “All-Electric” shall mean powered exclusively by electricity provided by a battery, fuel cell, or the grid. Additionally, requests for funding of All-Electric Transit and/or Shuttle Bus projects, including associated All-Electric infrastructure costs, may not exceed $3,000,000 per applicant.

For Alternate Fueled Transit and/or Shuttle Bus projects, TDEC will provide funding to support a maximum of 15 Transit or Shuttle Bus replacements per applicant. “Alternate Fueled” shall mean an engine, or a vehicle or piece of equipment that is powered by an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g., CNG, propane, diesel-electric Hybrid). Additionally, requests for funding of Transit and/or Shuttle Bus projects for all eligible fuel types other than All-Electric may not exceed $1,750,000 per applicant. Requests for funding comprised of both All-Electric and Alternate Fueled Transit and/or Shuttle Bus projects, including associated All-Electric infrastructure costs, may not exceed $3,000,000 per applicant. For more information, refer to the Transit and Shuttle Bus Grant Program Application Manual.

No. However, the Transit and Shuttle Bus Grant Program can fund up to 75% of the cost of an eligible Transit or Shuttle Bus replacement or Repower for Government Owned projects that will operate 70% or more of the time in current or former nonattainment areas for Ozone and/or PM2.5 National Ambient Air Quality Standards (NAAQS). The Transit and Shuttle Bus Grant Program will fund up to 50% of the cost of an eligible Transit or Shuttle Bus replacement or Repower for all other Government Owned projects. (For purposes of this Program, an area must be currently or formerly in nonattainment for Ozone and/or PM2.5 NAAQS as of the date of the solicitation release (September 10, 2019) in order to be treated as a current or former nonattainment area during the application evaluation process. A comprehensive list of nonattainment/maintenance status for Tennessee counties by year may be accessed here: https://www3.epa.gov/airquality/greenbook/anayo_tn.html.)

Please note that only portions of Roane and Cocke counties are designated as current or former nonattainment areas for Ozone and/or PM2.5 NAAQS. Within Roane County, this includes the area described by U.S. Census 2000 block group identifier 47-145-0307-2, and within Cocke County, this includes the area covering Great Smoky Mountains National Park.

The application must contain an estimate of the expected lifetime NOx emissions reduction for each proposed Transit or Shuttle Bus replacement or Repower, calculated using the Argonne National Laboratory Heavy-Duty Vehicle Emissions Calculator (accessible at https://afleet-web.es.anl.gov/hdv-emissions-calculator/).

Applicants are advised to utilize the Transit and Shuttle Bus Grant Program Vehicle Information Checklist, which helps applicants verify whether they have compiled and submitted all requested information for each Transit or Shuttle Bus they are requesting funds to replace or Repower. This includes step-by-step instructions on how to calculate emissions reduction estimates for each eligible type of Transit or Shuttle Bus project.

Awarded Grantees must submit quarterly reports to include updates on procurement, vehicle operator training, Repower status, and refueling infrastructure until the grant-funded Transit and/or Shuttle Buses are purchased, delivered, and put into service; Repowered and put into service (if applicable); and the engines and/or vehicles to be Repowered or replaced are Scrapped. Such reports shall include a complete description of the status of the project (including actual or projected termination date), development, implementation, and any modification. Quarterly reports shall be due no later than January 10, April 10, July 10, and October 10 of each year of the Grant Contract term.

Grantees will be required to submit annual reports for a period of five years following vehicle procurement, delivery, and the placement of vehicles into service. Such reporting shall include the demonstrated usage of fuel in purchased vehicles, the number of DGEs, gallons, or kWh purchased, purchase price, refueling locations, miles driven, driving or route habits, metrics regarding emissions reductions, and savings or cost avoidance.

Grantees must submit a final project report within three months of the completion of the grant period. (Please note that this report may be combined with the annual report for the final year of the grant period.) In addition to the information requested for the annual report, the final project report must also include cumulative financial information to match the final reimbursement request as well as inventory documentation for all equipment or vehicles purchased with funding through the Grant Contract. The inventory documentation must include, at a minimum, the following:

a. Description of the equipment or vehicles;

b. Manufacturer’s serial number or other identification number, when applicable;

c. Consecutive inventory equipment or vehicles tag identification;

d. Acquisition date, cost, and check number;

e. Fund source, State Grant number, or other applicable fund source identification;

f. Percentage of state funds applied to the purchase;

g. Location within the Grantee’s operations where the equipment or vehicles are used;

h. Condition of the property or disposition date if Grantee no longer has possession;

i. Depreciation method, if applicable; and

j. Monthly depreciation amount, if applicable.

Failure to submit quarterly, annual, or final reports may result in the required refund of any and all payments made to the Grantee by the State.

Grantees will use quarterly, annual, and final report templates provided by TDEC. These templates will be referenced in the Grant Contract and will be attached to the corresponding Grant Program Manual.

Grantees will be responsible for providing all the information required to complete the reports.

Applicants must select the county/counties where the replacement or Repowered vehicle(s) will operate. If vehicles are expected to operate in multiple counties, applicants must detail the expected breakout in percentage of time that the vehicle(s) will operate in each county and provide supporting documentation to justify this breakout (e.g., driving routes of vehicles to be replaced and/or Repowered). 

During application evaluation, TDEC may select portions of a proposal for funding and may offer to fund less than the eligible grant amounts and/or a smaller amount than requested in the application. 

The Grantee will have 24 months from the effective date of the Grant Contract to complete the project. The Grantee may proceed with its project after it is notified by State that its Grant Contract has been fully approved. 

Yes. The Grantee can request multiple reimbursements from the State to accommodate Transit and/or Shuttle Bus purchases or Repowers made over multiple fiscal years and/or as a result of multiple purchase orders or vendor contracts. However, the Grantee will have no more than 24 months from the effective date of the Grant Contract to complete the project (i.e., place the Transit and/or Shuttle Bus in service).

If an applicant plans to purchase or Repower Transit and/or Shuttle Buses over multiple fiscal years and/or through multiple purchase orders or vendor contracts, please detail this information within the “Project Timeline” section of the online application under the “Applicant Project Information” tab.

Payment of project expenses will take place on a reimbursement basis. The Grantee must purchase or Repower the vehicle(s) and submit required invoice documentation before payment can occur. TDEC will not reimburse expenses that are incurred prior to the start date of the Grant Contract.

TDEC will pay correct and complete invoices within 30 (thirty) days of receipt. TDEC will work with Grantees to ensure that they are submitting correct and complete invoices along with all necessary supporting documentation.

Grantees will be required to submit photo documentation of scrappage, along with an executed scrappage certification form. Additional information on supporting documentation for scrappage will be provided to Grantees within the Grant Program Manual.

All eligible Transit and Shuttle Buses to be replaced must be Scrapped within sixty (60) days of new vehicle delivery. Engines from eligible Transit and Shuttle Buses to be Repowered must be Scrapped within sixty (60) days of vehicle Repower (if the applicant will perform the Repower) or within sixty (60) days of Repowered vehicle delivery (if an external, third-party will perform the Repower). Proof of scrappage must be provided with the corresponding new vehicle reimbursement request.

Please note that, under Appendix D-2 of the State Trust Agreement, “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any eligible Transit or Shuttle Bus will be replaced as part of an eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half. 

Scrappage is required by the State Trust Agreement. Please refer to Appendix D-2 of the State Trust Agreement for more information on scrappage requirements.

Grantees may perform the required scrappage themselves if they have the facilities and means available to them to meet all scrappage requirements. Grantees may also utilize external services to comply with scrappage requirements. In either instance, required supporting documentation and proof of scrappage must still be submitted to the State before reimbursement can occur. Please note that, under Appendix D-2 of the State Trust Agreement, “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any Eligible Vehicle will be replaced as part of an Eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half.

Grant funding shall not cover costs associated with scrappage of eligible Transit and Shuttle Buses and/or engines. If a Grantee receives money in return for scrapping a vehicle or engine, they may apply said funds toward the required cost share. 

Scrappage is required by the State Trust Agreement. Please refer to Appendix D-2 of the State Trust Agreement for more information on scrappage requirements.

To consider the potential beneficial impact of selected projects on air quality in areas that bear a disproportionate share of the air pollution burden, the State has developed a “Disproportionate Burden Index” (DBI), which combines environmental, economic, and demographic datasets in a geospatial format to determine geographic units in Tennessee that have the highest air quality burden. Given that disproportionate burden is relative to the location of a project, TDEC will utilize the DBI and its geospatial display during the proposal review phase to assist with project prioritization and selection, focusing on the location and/or service area of the proposed project. For more information on the DBI, refer to Section VI. Consideration of Disproportionate Burden and Appendix 7 – Identification of Areas that Bear a Disproportionate Share of Air Pollution of the State of Tennessee’s Beneficiary Mitigation Plan. (See page 7 of the Transit and Shuttle Bus Grant Application Manual for more information.)

In addition to the above-mentioned criteria, projects will be evaluated, in part, on the following additional criteria (see page 7-8 of the Transit and Shuttle Bus Grant Application Manual for more information):

• Expected NOx emission reductions from the proposed project;
• Cost-effectiveness of the project; 
• Whether the vehicles will operate primarily in a former nonattainment area for Ozone and/or PM 2.5 NAAQS; 
• Whether the vehicles will operate primarily in a Distressed County;
• Potential impact to vulnerable populations or populations affected by a disproportionate share of the air pollution burden, evaluated using the DBI and any additional information provided by the applicant;
• Community benefits to be achieved as a result of the project, including whether the project will strengthen emergency preparedness and resiliency of the transportation sector through diversity of fuel and project types; and 
• Whether the project will result in the establishment of a new refueling station or an expanded refueling station such that the station will have expanded fueling capacity installed during the period of performance, including expanded fuel storage, increased compressor capacity, or increased fueling rate.

Grantees will be required to obtain a vendor identification number and will need to submit a Form W-9, Request for Taxpayer Identification Number and Certification. Grantees will also be required to submit bank information via an original Automated Clearing House (ACH) form, in order to receive grant reimbursements electronically. The ACH form must be signed by an authorized account representative and a representative of the associated financial institution.

Yes! TDEC urges all eligible applicants to apply.

The TDEC Online Grants System requires applicants to affiliate with an organization (on whose behalf an individual is submitting the request for funds) prior to opening a grant application. Grantees under this program will need to take legal title to all equipment or motor vehicles purchased totally or in part with funds provided under the corresponding Grant Contract. As such, the organization that the applicant affiliates with must be the organization that will oversee the implementation of the project and own the vehicles to be purchased under the Grant Contract. If an applicant is trying to affiliate with an organization that is not currently registered within the State system, please follow the instructions on this page to register, and subsequently affiliate with, the entity. Please contact TDEC.Grants@tn.gov for more information on this process.

The intent is for entities to replace vehicles with vehicles of a similar weight class, in order to ensure as much of a one-to-one NOx mitigation as possible. Vehicles of different weight classes may have different duty cycles and/or varying engine sizes, both of which impact a vehicle’s emissions profile. Consequently, it can be difficult to verify emissions reduction estimates for projects where a vehicle is replaced with a new vehicle of a different GVWR. That being said, if an entity would like to propose to replace a vehicle with a similar vehicle of a different weight class, they will need to provide a justification as to why a vehicle of a different weight class is appropriate.

Scrappage of an identical number of similar vehicles or engines is required.  (If vehicles, engines, or equipment are added to a fleet without removing a dirtier, older engine of a similar size or larger, then the project would not result in NOx reductions.)

Eligible Transit and Shuttle Buses may be Repowered with any new All-Electric engine or may be replaced with any Alternate Fueled or All-Electric vehicle (p. 3 of the Transit and Shuttle Bus Grant Application Manual). According to Appendix D-2 of the State Trust Agreement, “Alternate Fueled” shall mean an engine, or a vehicle or piece of equipment that is powered by an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g., CNG, propane, diesel-electric Hybrid). A replacement with a gasoline-electric Hybrid Transit or Shuttle Bus would be considered eligible under this grant program. A replacement with a bus that is able to operate on gasoline alone would not be considered eligible under this grant program.

Appendix D-2 of the State Trust Agreement states that Class 4-8 Shuttle or Transit Buses “shall mean vehicles with a Gross Vehicle Weight Rating (GVWR) greater than 14,001 lbs. used for transporting people.” For purposes of this solicitation, “Transit Buses” shall include all vehicles that provide public transportation, which shall mean regular and continuing shared-ride surface transportation services that are open to the general public. “Shuttle Buses” shall include vehicles that provide transportation services for one or more specific entities, intra-terminal or intra-facility transportation services, or mobility-on-demand services. Should vehicles operated by a regional vanpool meet these definitions, they can be considered eligible for replacement or Repower under this solicitation. All other eligibility requirements regarding engine model year, fuel type, etc. will still apply. 

Please state in your application that you are attempting to secure cost share from another, external funding source (e.g., the Congestion Mitigation and Air Quality Improvement Program, the Federal Transit Administration, etc.). You must identify the source of this funding and indicate when your organization expects to hear back from the program with a final funding decision. Additionally, please identify an additional source of capital to be leveraged by your organization in order to complete the proposed Transit and Shuttle Bus project in the instance that the external funding source declines to support your proposal.

If you have already received cost-share commitments from other funding programs to support potential projects under the Transit and Shuttle Bus Grant Program, please provide documentation from the external funder(s) noting the amount and scope of the project funding to be received.

Note that funding provided under the Transit and Shuttle Bus Grant Program is sourced entirely from the VW Settlement EMT and is therefore not considered to be federal or State dollars for purposes of cost share restrictions. If you seek support from an external funding source as cost share for projects under the Transit and Shuttle Bus Grant Program, you must confirm with said external funding source that their contribution can be combined with funding under the VW EMT.

Grantees under the Transit and Shuttle Bus Grant Program will have 24 months from the effective date of the Grant Contract to complete the project (i.e., purchase/Repower vehicles, put new/Repowered vehicles into service, acquire and install any associated charging infrastructure, Scrap old vehicles, complete monitoring visits, request reimbursement, submit required reporting, etc.).

Applicants must provide detailed cost estimates from potential vehicle/equipment vendors to support their applications under the Transit and Shuttle Bus Grant Program. When reaching out to vendors to secure said cost estimates, applicants should also confirm whether their proposed vendor’s vehicle production and delivery timeline fits within the 24-month grant period. Applicants should complete the “Project Timeline” section of the “Applicant Project Information” tab accordingly, to inform the State of the anticipated vehicle production and delivery timeline.

Please note that the State may evaluate requests for no-cost extensions to complete the project on a case-by-case basis; such requests must be received at least 90 days prior to the end of the Grant
Contract term.