National Clean Diesel Campaign
FY 2014 - 2016 STATE CLEAN DIESEL GRANT PROGRAM
INFORMATION GUIDE
June 28, 2016
x>EPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-B-16-046a
June 2016
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SUMMARY
EPA's Office of Transportation and Air Quality is soliciting proposals from eligible states and
territories for participation in the fiscal year (FY) 2016 Diesel Emission Reduction Program (DERA),
State Clean Diesel Grant Program. EPA has approximately $49.5 million available for the FY 2016
DERA Program. In accordance with DERA, EPA makes 30 percent (approximately $14.8 million for
FY 2016) of the annual allocation available to states and territories in the form of assistance
agreements under the State Clean Diesel Grant Program. Funding can support grant, rebate, and loan
programs administered by eligible states or territories that are designed to achieve significant
reductions in diesel emissions.
The State Clean Diesel Grant Program is not a competition; it is an allocation process in which the
eligible states and territories submit their interest to participate to EPA, and EPA awards a specific
allocation by formula, based on the number of states and territories with approved applications that
participate.
State Clean Diesel Grant Program funding for FY 2016 will be distributed to those states and
territories that participated in FY 2014/2015 as supplemental amendments to their current FY
2014/2015 awards. Those states and territories that did not participate in the FY 2014/2015 State
Clean Diesel Grant Program will receive FY 2016 funds as a new award, pending successful close-
out of any FY 2013 or older State Clean Diesel Grant Program awards.
Under the State Clean Diesel Grant Program, eligible diesel emission reduction solutions include
verified emission control technologies such as exhaust controls, cleaner fuels, and engine upgrades,
verified idle reduction technologies, verified aerodynamic technologies and low rolling resistance
tires, certified engine repowers, and/or certified vehicle or equipment replacement. Eligible diesel
vehicles, engines and equipment may include buses, Class 5 - Class 8 heavy-duty highway vehicles,
marine engines, locomotives and nonroad engines, equipment or vehicles used in construction,
handling of cargo (including at a port or airport), agriculture, mining or energy production (including
stationary generators and pumps).
This document contains the FY 2014 - 2016 State Clean Diesel Grant Program information for both
internal and external stakeholders. All public materials for the State Clean Diesel Grant Program are
available at www.epa.gov/cleandiesel/clean-diesel-state-allocations.
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Table of Contents
I. OVERVIEW 1
II. STATUATORY AUTHORITY 1
III. ELIGIBLE APPLICANTS 1
IV. FY 2016 FUNDING SCHEDULE AND PROCEDURES 2
V. NOTICE OF INTENT 2
VI. ALLOCATION OF FUNDS 4
VII. APPLICATION PACKAGE AND SUBMISSION INFORMATION 5
VIII. SCOPE OF WORK 6
IX. USE OF FUNDS RESTRICTIONS 14
X. MANDATORY COST-SHARE REQUIREMENT 20
XI. WAIVER OF PROGRAMMATIC REQUIREMENTS 21
XII. AWARD ADMINISTRATION INFORMATION 21
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I. OVERVIEW
Beginning in FY 2014, programmatic requirements from EPA's competitive Clean Diesel Funding
Assistance Program, specifically RFP# EPA-OAR-OTAQ-14-05, were incorporated into the FY
2014 State Clean Diesel Grant Program by reference. These programmatic requirements include,
but are not limited to, mandatory cost share requirements for certain types of projects, and specific
vehicle, engine and technology eligibility criteria. In FY 2015, a few minor modifications and
clarifications were included in the FY 2015 State Clean Diesel Grant Program.
This document, the FY 2014 - 2016 State Clean Diesel Grant Program Information Guide,
consolidates and streamlines the programmatic requirements applicable to all new and continuing
State Clean Diesel Grant Program awards receiving FY2016 funding. All projects funded with FY
2014, 2015 and/or 2016 State Clean Diesel Grant Program funds, must meet all eligibility and
funding requirements set forth in this program guide.
This document provides information to EPA Regions and to participating states and territories
concerning how the Agency intends to exercise its discretion in awarding and managing State Clean
Diesel Grant Program rebates, grants, and/or loans for FY 2014 - 2016. This guidance is designed to
provide national policy on these issues. Some of the statutory provisions described in this document
contain legally binding requirements. However, this document does not substitute for those
provisions or regulations, nor is it a regulation itself. Thus, it cannot impose legally binding
requirements on EPA, states, territories or the regulated community, and may not apply to a
particular situation based upon the circumstances. Any decisions regarding a particular situation will
be made, based on the statutes and regulations, and EPA decision-makers retain the discretion to
adopt approaches on a case-by-case basis, that differ from this guidance where appropriate.
II. STATUATORY AUTHORITY
Title VII, Subtitle G, Section 793 of the Diesel Emissions Reduction Program (DERA) in the
Energy Policy Act of 2005 (codified at 42 U.S.C. 16133) authorizes the U.S. Environmental
Protection Agency (EPA) to support grant, rebate, and loan programs, administered by eligible
states or territories, which are designed to achieve significant reductions in diesel emissions. This
program is referred to as the State Clean Diesel Grant Program (the Program).
III. ELIGIBLE APPLICANTS
Eligibility to apply for and receive funds under the Program is limited to the 50 states, the District of
Columbia, Puerto Rico, and the Virgin Islands, Guam, American Samoa, and the Northern Mariana
Islands. For the purposes of this document, the term "state" will be used to describe the 50 states and
the District of Columbia, Puerto Rico, Guam, the US Virgin Islands, American Samoa and the
Commonwealth of the Northern Mariana Islands.
EPA presumes that the state agency with jurisdiction over air quality will be the lead agency to
receive these funds. If a state's circumstances dictate that another state agency administer the funds,
then a letter from the state governor or designee to the Administrator of EPA is required in order to
certify one state Agency as the recipient of funds who has the legal and administrative authority to
enter into a grant or cooperative agreement with EPA. Upon receipt, EPA will consider that agency
the lead agency from that point forward. However, if there is a change, a new Governor's letter to
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the Administrator must be submitted during the renewal process and the new agency would be
considered the lead agency for future grants. For fiscal year 2016, the letter to identify an alternate
lead agency and provide specific contact information should be sent to the following contacts and be
received on or before May 1, 2016.
The Honorable Gina McCarthy
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Ave, N.W., Mail Code: 1101A
Washington, DC 20460
Cc: Jennifer Keller, Director
Legacy Fleets Incentives and Assessment Center
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W., Mail Code: 6406A
Washington, DC 20460
Phone: (202) 343-9541, Fax: (202) 343-2803, Email: keller.ienmfer(a),eva.sov
IV. FY 2016 FUNDING SCHEDULE AND PROCEDURES
The steps below outline the procedure and schedule for states to participate in the FY 2016 State
Clean Diesel Grant Program.
A. February 29, 2016: OTAQ sends all eligible states the FY 2016 Program materials.
B. March 18, 2016: All participating states must submit a Notice of Intent to Participate (NOIP) or
a Notice of Intent to Continue (NOIC), to OTAQ via email (cleandiesel@epa.gov).
C. March 21, 2016: OTAQ will perform the funding allocation calculation and email the final
funding allocation table to the EPA Regional Air Division Directors.
D. March 22, 2016: Regions will inform the states of their final allocation via email and/or hard
copy.
E. April 26, 2016: Participating states must submit their application package to www.Grants.gov.
F. October 1, 2016: Project period for FY 2016 awards begins. Regional offices will finalize the
FY 2016 Program awards prior to October 1, 2016.
V. NOTICE OF INTENT
States that want to receive FY 2016 State Clean Diesel Grant Program funding must submit a Notice
of intent to Participate (NOIP) or Notice of Intent to Continue (NOIC).
A. Notice of Intent to Continue: States with an open FY 2014/2015 Program award must submit a
Notice of Intent to Continue. Continuing states will receive FY 2016 funds as a supplemental
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amendment to the existing award. OTAQ will work with regional staff on the progress of those
continuing states that have yet to complete all their FY 2014/2015 grant activities.
B. Notice of Intent to Participate: States that do not have an open FY 2014/2015 State Clean
Diesel Grant Program award must submit a Notice of Intent to Participate.
Any state with an open Program award from FY 2008 - 2013 must ensure that the project period
of the FY 2008 - 2013 award ends by September 30, 2016, in order for the state to receive FY
2016 funding. This means that vehicles/equipment should be delivered, technologies installed,
and clean diesel project work completed by September 30, 2016. If the state has already
obligated but not drawn down funds by the grant period end date, it will have to make a final
request for a drawdown payment. If the state is unable to complete all the tasks outlined in the
work plan and obligate or expend all FY 2008 - 2013 funds by September 30, 2016, the Region
can close out the FY 2008 - 2013 award and de-obligate the remaining funds so that the state
can participate in the FY2016 Program.
Alternatively, if a state with an open Program award from FY 2008 - 2013 is unable to complete
all the tasks outlined in the work plan and obligate or expend all FY 2008 - 2013 funds by
September 30, 2016, the state can request an additional no-cost time extension under extenuating
circumstances. However, a state requesting a no-cost time extension for a currently open FY
2008 - 2013 Program award will not be able to receive FY 2016 Program funding.
C. Voluntary Match Incentive: The NOIC/NOIP must indicate whether or not the state intends to
voluntarily contribute funding to the FY 2016 Program project budget. The NOIC/NOIP must
also indicate the types and sources of cost-share funds.
If a state provides a voluntary match equal to the base allocation offered by EPA, EPA will
provide a matching incentive equal to 50 percent of the base allocation. For example: A state
legislature has provided $1M per year to the state air agency to fund clean diesel activities in the
state. If EPA offers a base allocation of $200,000 to the state, the state could contribute
$200,000 of the state funding as a voluntary match and the state would receive an additional
$100,000 in EPA funding as a matching incentive. The total project budget would then be
$500,000, not including any mandatory cost-share funds.
The voluntary cost-share may be satisfied by allowable costs incurred by the state (i.e. in-kind
contributions), or by cash donations of state funds or private funds. State matching funds are
subject to the same terms and conditions as EPA awarded funds. A recipient is legally obligated
to expend any voluntary cost-share included in the approved project budget within the project
period of that award.
Mandatory cost-share funds provided by the state and/or eligible third parties cannot count
towards the state's voluntary matching funds to qualify for the matching incentive. However, if
a state requires a third-party cost-share contribution above and beyond the mandatory cost-share
amount for the implemented technology, then the "excess' cost-share may be applied towards
the state voluntary match funds for the purpose of qualifying for the matching incentive. See
Section X for additional information on mandatory cost-share requirements. Detailed sample
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budgets representing various mandatory cost-share versus state match scenarios are available at:
www.epa.gov/cleandiesel/clean-diesel-state-allocations.
D. Submission of NOIC/NOIP: The Notice, which is available in a Tillable Word form
(www.epa.gov/cleandiesel/clean-diesel-state-allocations), can be submitted in one of two ways:
1) a state can fill out the form electronically or by hand, print and sign the document, scan the
document, and return the document via email at cleandiesel@epa.gov; or 2) a state can fill out
the form electronically, digitally sign the document, save the document and return via email at
cleandiesel@epa.gov. The Notice must be signed by the Environmental Commissioner or other
authorized official, but does not need to be emailed from this person directly; the Notice can be
emailed from the programmatic contact at the state.
E. Review of NOIC/NOIP: OTAQ will forward the Notices to the appropriate EPA Regional
Office for review. Regions will inform OTAQ if there are issues regarding the state matching
amounts (source, etc.), continuing states that have yet to make sufficient progress on their FY
2014/2015 Program activities, or states that have open Program awards from FY 2008 - 2013.
Regions will work with the states as necessary to resolve these issues.
VI. ALLOCATION OF FUNDS
A. Allocation Formula: EPA has approximately $49.5 million available for the FY 2016 DERA
Program. In accordance with 42 U.S.C. 16133, subject to the availability of appropriations, EPA
makes 30 percent (approximately $14.8 million for FY 2016) of the DERA Program's annual
allocation available to states and territories in the form of assistance agreements under the State
Clean Diesel Grant Program. This 30 percent is divided: two-thirds is provided as a base
allocation and one-third is provided as an incentive to match.
If all 50 states, the District of Columbia, and the five qualifying territories participate in the FY
2016 program, then the 50 states, the District of Columbia, and Puerto Rico will each receive
1.887 percent of the two-thirds of the funds set aside for the State Clean Diesel Grant Program as
a potential base allocation. The remaining territories each qualify for 0.472 percent of the two-
thirds of the funds set aside for the State Clean Diesel Grant Program as a potential base
allocation. If fewer than all 50 states, the District of Columbia, and the five qualifying territories
submit a Notice to Continue/Participate in FY 2016, then the population formula outlined in 42
U.S.C. 16133(c)(2)(B) will be applied to any unclaimed base funds, and these funds will be
added to the all participating states' and territories' potential base allocations. In that case,
OTAQ will perform the allocation calculation using the U.S. Census Bureau estimated
population data for 2010, found at www.census.gov/201 Ocensus/.
Participating states and territories may choose to voluntarily match the EPA award amount. If a
state or territory provides a state match equal to the base allocation awarded by EPA, EPA will
provide a matching bonus equal to 50 percent of the base allocation. See Section V.3 for
additional information on the voluntary match incentive.
B. Allocation Notification: OTAQ will prepare draft formal funding allocation letters and send
them to the Regions. Regions should send the formal funding allocation letters to their states and
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territories via email and follow-up with a hardcopy letter with original signatures. All funding
allocation letters should be emailed to the states and territories by Tuesday, March 22, 2016.
VII. APPLICATION PACKAGE AND SUBMISSION INFORMATION
A. Content of Application Package: The application package must include all of the following
materials:
1. Standard Form (SF) 424, Application for Federal Assistance
2. Standard Form (SF) 424A, Budget Information
3. Standard Form (SF) 424B, Assurances for Non Construction Programs
4. Key Contacts Form
5. EPA Form 4700-4, Preaward Compliance Review
6. Certification Regarding Lobbying (Grants.gov Lobbying Form)
7. Project Narrative Attachment Form, with final Work Plan and Budget Narrative
attached. States must use the template available at www.epa.gov/cleandiesel/clean-diesel-
state-allocations to prepare their Work Plan and Budget Narrative.
B. Grants.gov Application Instructions
1. Your organization's authorized official representative (AOR) must submit your complete
application package electronically to EPA through Grants.gov (www.grants.gov) no later
than Tuesday, April 26, 2016.
2. Follow the steps below to download, complete, and submit an application package through
Grants.gov. The application package contains the required forms listed above.
a) Go to Grants.gov and then click on the "Applicants" tab in the horizontal row of blue
tabs. A drop down list will appear.
b) Click on "Apply for Grants."
c) Click on the red button titled, "Get Application Package," on the right hand side of the
page.
d) Search by Funding Opportunity Number: EPA-CEP-01, or by CFDA#: 66.040
e) From the list of Opportunity Package(s) currently available, click on the "Select
Package" corresponding with CFDA#: 66.040.
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f) Enter your email or check the box titled, "No, I do not wish to provide my email." Then
click on the gray box titled, "Submit".
g) You can now access and download Application Instructions as well as the Application
Package from this webpage.
h) After downloading an application and saving it, you do not need to be online to complete
the application.
i) Complete the required forms listed above, including uploading and attaching your final
Work Plan and Budget Narrative. While filling out the application package, be sure to
save frequently by clicking the Save button on the cover page of the application package.
j) Click the Check Package for Errors button to ensure all of the required portions of the
application package are complete. Address any errors that are identified before
submitting.
k) Click the Save & Submit button after completing the application package. The Save &
Submit button will not be functional until the application is properly completed with no
errors and saved.
VIII. SCOPE OF WORK
Title VII, Subtitle G, Section 793 of the Diesel Emissions Reduction Program (DERA) allows states
to use funds provided under the State Clean Diesel Grant Program to develop and implement such
grant, rebate and low-cost revolving loan programs in the state as are appropriate to meet state needs
and goals relating to the reduction of diesel emissions, subject to the following eligibility limitations
and funding priorities.
A. Project and Budget Period: FY 2016 funds will be dispersed as new awards or supplemental
amendments which have project and budget periods of October 1, 2016 to September 30, 2017.
All states will need to complete work and close-out any FY 2014-2016 State Clean Diesel
Program awards by September 30, 2017 in order to be eligible to receive FY 2017 Program
funding, pending a FY 2017 DERA appropriation.
B. Eligible Diesel Vehicles, Engines and Equipment: Projects may include, but are not limited to,
diesel emission reduction solutions from the following heavy-duty diesel emission source types:
1. Buses1'2;
2. Medium-duty or heavy-duty trucks3;
1 For the purposes of the Program, buses include school buses of Type A, B, C and D. To be eligible as a school bus a
vehicle should meet the definition of a school bus as defined by the National Highway Transportation Safety
Administration. This definition includes, but is not limited to: 1) A bus that is used for purposes that included carrying
students to and from school or related events on a regular basis; 2) Be identified with the words "School Bus"; and 3) Be
painted National School Bus Glossy Yellow.
2 For the purposes of the Program, buses include and medium and heavy-duty transit buses (see footnote #5, below).
3 For the purposes of the Program, medium heavy-duty and heavy heavy-duty highway vehicles are defined as Class 5
through Class 8: Class 5 (16,001 -19,500 Ibs GVWR); Class 6 (19,501 - 26,000 Ibs GVWR); Class 7 (26,001 - 33,000
Ibs GVWR); Class 8a (33,001 - 60,000 Ibs GVWR); Class 8b (60,001 Ibs GVWR and over).
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3. Marine Engines;
4. Locomotives; and
5. Nonroad engines, equipment or vehicles used in:
a) Construction;
b) Handling of cargo (including at a port or airport);
c) Agriculture;
d) Mining; or
e) Energy production (including stationary generators and pumps).
C. Eligible Diesel Emission Reduction Solutions: Projects must include one or more of the
following diesel emission reduction solutions that utilize a certified engine configuration and/or
a verified technology.
A "retrofit" project is defined broadly to include any technology, device, fuel or system that,
when applied to an existing diesel engine, achieves emission reductions beyond what is currently
required by EPA regulations at the time of the engine's certification.
1. Exhaust Controls: Exhaust Controls include pollution control devices installed in the
exhaust system (such as oxidation catalysts and particulate matter filters), or systems that
include crankcase emission control (like a closed crankcase filtration system). The state may
fund up to 100% of the cost (labor and equipment) for an eligible verified emission control.
EPA suggests that each applicant requesting diesel particulate filters datalog the exhaust
temperature of all vehicles to be considered before the application is submitted, so that there
is evidence that the fleets can accommodate the technology.
A list of eligible, EPA verified exhaust control technologies is available at:
www.epa.gov/verified-diesel-tech/verified-technologies-list-clean-diesel and a list of
eligible, California Air Resources Board (CARB) verified exhaust control technologies is
available at: www.arb.ca.gov/diesel/verdev/vt/cvt.htm. The types (e.g. DOC, DPF, etc) of
exhaust control technologies proposed for funding under this category must exist on one of
these lists for the specific vehicle/engine application specified in the proposal at the time of
proposal submission to EPA. If selected for funding, the actual exhaust control technologies
used by the grant recipient must be specifically named on EPA or CARB's Verified Exhaust
Control Technologies lists at the time of acquisition, and used only for the vehicle/engine
applications specified on the list, in order to be eligible for funding.
2. Engine Upgrades: Generally, an engine upgrade involves the removal of parts on an engine
during a rebuild and replacement with parts that cause the engine to represent an engine
configuration which is cleaner than the original engine. Some nonroad and marine engines
are able to be upgraded to reduce their emissions by applying manufacturer upgrades that are
retrofits currently verified by EPA or CARB as a package of components demonstrated to
achieve specific levels of emission reductions. Some locomotives and marine engines are
able to be upgraded through the application of a certified remanufacture system that is used
to rebuild the engine to represent a cleaner engine configuration. Engine upgrades may not
be available for all engines, and not all upgrades may achieve an emissions benefit.
Proposals for upgrades should include a discussion of the availability of engine upgrade
kits/systems and indicate the pre- and post-project emission standard levels of the engines in
order to demonstrate that the upgrade will result in an emissions benefit.
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The state may fund up to 40% of the cost (labor and equipment) of an eligible nonroad,
locomotive or marine engine upgrade. To be eligible for funding, the upgrade must either be
a verified retrofit as described above, or a certified remanufacture system that will result in
an emissions benefit by rebuilding the engine to a cleaner engine configuration. For an
engine to be eligible for an upgrade, the engine must be currently operating and performing
its intended function. If a certified remanufacture system for a locomotive includes a full
engine replacement, the funding restrictions applicable to engine repowers in Section IX.C
will apply. In the case of an engine upgrade with a certified remanufacture system applied at
the time of rebuild (not manufacturer upgrades that are retrofits verified by EPA or CARB),
funds under this award cannot be used for the entire cost of the engine rebuild, but only for
the cost of the certified remanufacture system and associated labor costs for installation.
A list of eligible, EPA verified engine upgrade technologies is available at:
www.epa.gov/verified-diesel-tech/verified-technologies-list-clean-diesel. Lists of certified
remanufacture systems for locomotives and marine engines, and additional information on
remanufacture systems, are available at: www.epa.gov/otaq/certdata.htm. Engine upgrades
proposed for funding under this category must exist on one of these lists for the specific
vehicle/engine application specified in the proposal at the time of proposal submission to
EPA. If selected for funding, the actual engine upgrades used by the grant recipient must be
specifically named on EPA's list of certified remanufacture systems or EPA or CARB's
Verified Exhaust Control Technologies lists at the time of acquisition, and used only for the
vehicle/engine applications specified on the lists, in order to be eligible for funding.
3. Cleaner Fuels Use: Cleaner fuels include, but are not limited to, biodiesel, diesel fuel
additives verified by EPA or CARB, compressed natural gas, propane and other certified
alternative fuels. EPA will not fund stand-alone cleaner fuel use. For new or expanded use of
a cleaner fuel, the state may fund the cost differential between the cleaner fuel and
conventional diesel fuel if that cleaner fuel is used in combination, and on the same vehicle,
with a new eligible verified exhaust control or an eligible clean alternative fuel conversion or
an eligible engine upgrade or an eligible certified engine repower or an eligible certified
vehicle/equipment replacement, as described in this Section.
4. Verified Idle Reduction Technologies: An idle reduction project is generally defined as the
installation of a technology or device that reduces unnecessary idling of diesel vehicles or
equipment and/or is designed to provide services (such as heat, air conditioning, and/or
electricity) to vehicles and equipment that would otherwise require the operation of the main
drive or auxiliary engine(s) while the vehicle is temporarily parked or remains stationary.
The reduction in idling will conserve diesel fuel and must also lower emissions.
A list of eligible, EPA verified idle reduction technologies is available at:
www.epa.gov/smartwav/forpartners/technology.htmtftabs-4. The types of idle reduction
technologies proposed for funding under this category must exist on this list for the
vehicle/engine application specified in the proposal at the time of proposal submission to
EPA. The technology categories include: Auxiliary power units and generator sets, battery
air conditioning systems, thermal storage systems, electrified parking spaces (truck stop
electrification), fuel operated heaters, shore connection systems and alternative maritime
power, shore connection systems for locomotives, and automatic shutdown/start-up systems
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for locomotives. The actual idle reduction technologies used must be specifically named on
EPA's SmartWay Verified Technologies list at the time of acquisition, and used only for the
vehicle/engine applications specified on the list, in order to be eligible for funding.
Please note that technologies for the electrification of engines/vehicles/equipment other than
those specifically listed on EPA's SmartWay Verified Technologies list, cannot be
considered verified idle reduction technologies, but may be eligible as a Repower (removal
of a diesel engine and its replacement with an electric power source, see Section VIII.C.6
below) or a Replacement (replacement of a diesel powered engine/vehicle/equipment with an
eligible electric engine/vehicle/equipment, see VII.C.7, below).
a) Verified Idle Reduction Technologies on Locomotives: The state may fund up to 40%
of the cost (labor and equipment) of the installation of eligible verified idle reduction
technologies on locomotives.
b) Shore Connection Systems and Truck Stop Electrification: The state may fund up to
25% of the cost (labor and equipment) of eligible shore connection systems and truck
stop electrification/electrified parking space technologies.
c) Verified Idle Reduction Technologies on School Buses: The state may fund up to
100% of the cost (labor and equipment) of verified idle reduction technologies on school
buses with model year 2006 or older engines that have been previously retrofitted with a
verified emission control device.
d) All Other Verified Idle Reduction Technologies: The state may fund up to 100% of the
cost (labor and equipment) for all other eligible, verified idle reduction technologies,
only if the technology is combined on the same vehicle with a new eligible verified
exhaust control funded under the Program, as described in Section VIII.C. 1, above.
Auxiliary power units (APUs) and generators are not eligible for vehicles with 2007
model year or newer certified engine configurations on long haul Class 8 vehicles.
5. Verified Aerodynamic Technologies and Verified Low Rolling Resistance Tires: To
improve fuel efficiency, long haul Class 8 trucks can be retrofitted with aerodynamic trailer
fairings or the fairings can be provided as new equipment options. Certain tire models can
provide a reduction in NOx emissions and fuel savings, relative to the "standard" new tires
for long haul Class 8 trucks, when used on all axles.
A list of eligible, EPA verified aerodynamic technologies is available at:
www.epa.gov/smartway/forpartners/technology.htmtftabs-2, and includes:
• gap fairings that reduce the gap between the tractor and the trailer to reduce turbulence;
• trailer side skirts that minimize wind under the trailer; and
• trailer rear fairings that reduce turbulence and pressure drop at the rear of the trailer.
A list of EPA verified low rolling resistance tires is available at:
www.epa.gov/smartwav/forpartners/technology.htmtftabs-3, and includes both dual tires and
single wide tires (single wide tires replace the double tire on each end of a drive or trailer
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axle, in effect turning an "18" wheeler into a "10" wheeler). Low rolling resistance tires can
be used with lower-weight aluminum wheels to further improve fuel savings, however
aluminum wheels are not eligible for funding under this RFP.
The types of aerodynamic technologies and low rolling resistance tires proposed for funding
under this category must exist on EPA's SmartWay Verified Technologies list for the
vehicle/engine application specified in the proposal at the time of proposal submission to
EPA. If selected for funding, the actual technologies/tires used by the grant recipient must be
specifically named on EPA's SmartWay Verified Technologies list at the time of acquisition,
and used only for the vehicle/engine applications specified on the list, in order to be eligible
for funding.
The state cannot fund stand-alone aerodynamic technologies or low rolling resistance tires.
The state may fund up to 100% of the cost (labor and equipment) for verified aerodynamic
technologies or verified low rolling resistance tires installed on long haul Class 8 trucks, if
combined on the same vehicle with the new installation of one or more of the Verified
Exhaust Controls funded under the Program, as described in Section VIII.C.l, above.
Note: Low rolling resistance tires are not eligible for funding where these types of tires have
already been installed on the truck.
6. Certified Engine Repowers: "Repower" refers to replacing an existing engine with a newer,
cleaner engine that is certified to 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
a clean alternative fuel, diesel engine replacement with an electric power source (grid,
battery or fuel cell4), and/or the replacement of a nonroad engine with a highway engine.
The state may fund up to 40% of the cost (labor and equipment) of an eligible engine
repower. All-electric (i.e. zero emission) repowers do not require EPA or CARB
certification.
a) Electric Generator Repower:
i. For a repower that involves the replacement of an existing diesel propulsion engine
with a stationary or auxiliary diesel powered electric generator (genset), the electric
generator and the newer, cleaner engine comprising the genset are both eligible costs
of the repower.
ii. Repower of an existing genset involves replacing the existing diesel engine in the
genset with a newer, cleaner engine. Only the newer, cleaner engine (labor and
equipment) is an eligible cost of the repower.
7. Vehicle and Equipment Replacements: Nonroad and highway diesel vehicles and
equipment can be replaced under this program with newer, cleaner vehicles and equipment
that operate on diesel or alternative fuels and use engines certified by EPA or CARB to meet
a more stringent set of engine emission standards. Replacement projects can include the
replacement of diesel vehicles/equipment with newer, cleaner diesel, electric (grid, battery or
4 Hydrogen fuel cells are eligible only for repowers for eligible medium and heavy-duty urban transit buses
and eligible drayage trucks.
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fuel cell5), hybrid or alternative fuel vehicles/equipment. All-electric (i.e. zero emission)
vehicles and equipment do not require EPA or CARB certification. Marine vessels are not
eligible for full replacement.
a) Nonroad Diesel Vehicles and Equipment: The state may fund up to 25% of the cost of
a replacement vehicle or piece of equipment powered by a 2013 model year or newer
certified nonroad engine. Nonroad engine emission standards are on EPA's website at:
www.epa.gov/otaq/standards/nonroad/index.htm.
i. Electric Generator Replacement: For stationary or auxiliary diesel powered electric
generator (genset), replacement means the removal of the entire genset and its
replacement with a newer, cleaner genset. The electric generator in a genset together
with the newer, cleaner engine is an eligible cost of the replacement.
b) Highway Diesel Vehicles: The state may fund up to 25% the cost of a newer, cleaner
medium or heavy-duty vehicle, powered by a 2013 model year or newer certified
highway heavy-duty engine, (except for drayage vehicles as explained in Section
VIII.C.7.C, below).
c) Replacements for Drayage Vehicles: The state may fund up to 50% of the cost of an
eligible drayage truck powered by a 2010 model year or newer certified heavy-duty
engine equipped with a diesel particulate filter (or catalyst equipped in the case of a CNG
engine).
i. Definition of Drayage Truck: A "Drayage Truck" means any Class 8b in-use on-
road vehicle with a gross vehicle weight rating (GVWR) of greater than 33,000
pounds operating on or transgressing through port or intermodal rail yard property for
the purpose of loading, unloading or transporting cargo, such as containerized, bulk
or break-bulk goods.
ii. Drayage Operating Guidelines: The subgrant recipient will be required to establish
guidelines to ensure that all drayage trucks purchased with grant funds are operated in
a manner consistent with the definition of a drayage truck, as defined above. For an
example of sample guidelines, see www.epa.gov/sites/production/files/2015-
10/documents/fyl4-sample-dravage-operating-gui delines.pdf
iii. Required/Scheduled Maintenance: The state may fund the required/scheduled
vehicle maintenance, as specified in the owner's manual, which is necessary to meet
the warranty requirements for diesel particulate filters installed on drayage trucks.
Funding for required maintenance is available for the duration of the project period.
8. Clean Alternative Fuel Conversions: Conventional, original equipment manufacturer
(OEM) highway diesel vehicles and engines that are altered to operate on alternative fuels
such as propane, natural gas, alcohol, or electricity are classified as aftermarket clean
alternative fuel conversions. Clean alternative fuel conversions are accomplished by applying
a certified or compliant alternative fuel conversion "kit" to an existing highway diesel
engine. The state may fund up to 40% of the cost (labor and equipment) of an eligible
certified or compliant clean alternative fuel conversion. Proposals for clean alternative fuel
conversions should include a discussion of the availability of conversion systems and
5 Hydrogen fuel cell vehicles and equipment are eligible only as replacements for eligible medium and heavy-
duty urban transit buses, eligible drayage trucks, and eligible forklifts.
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indicate the pre- and post-project emission standard levels of the engines in order to
demonstrate that the conversion will result in an emissions benefit.
In the United States, all clean alternative fuel conversions (except pure battery electric) must
meet applicable EPA standards pursuant to 40 CFR Parts 85 and 86. Lists of certified and
compliant clean alternative fuel conversion systems, and additional guidance, can be found at
www.epa.gov/otaq/consumer/fuels/altfuels/altfuels.htm. Vehicles operating in California
must follow conversion rules issued by CARB.
Clean alternative fuel conversions must be "dedicated" or "mixed fuel", meaning the engine
runs only on the alternative fuel, or uses a small amount of diesel mixed with the alternative
fuel. Dedicated or mixed fuel engines do not have the ability to operate solely on diesel fuel.
"Dual fuel" or "bi-fuel" conversions, meaning the engine can switch between fuel sources
and still has the capability of running on 100% diesel, are not eligible for funding.
D. DERA Programmatic Priorities: The principal objective of the assistance to be awarded under
this program is to achieve significant reductions in diesel emissions in terms of tons of pollution
produced and reductions in diesel emissions exposure from vehicles, engines and equipment
operating in areas designated as poor air quality areas. The state's workplan must discuss how
the state will ensure that projects selected for funding support the programmatic priorities listed
below. Please note that these are funding priorities, and are not eligibility factors.
The term "project location" refers to the primary area where the affected vehicles/engines
operate, or the primary area where the emissions benefits of the project will be realized. A list of
priority counties and areas can be found at: www.epa.gov/sites/production/files/2015-
10/documents/fyl4-countv-area-list.pdf. These counties and areas were identified as priority
locations for the DERA program because they are:
• in nonattainment or maintenance of national ambient air quality standards for Ozone
and/or PM2.5;
• areas with toxic air pollutant concerns as identified from the National Air Toxics
Assessment data;
• designated as Federal Class I areas; and/or
• accepted to participate in EPA's Ozone Advance or PM Advance Programs.
In addition, priority should be given to projects located in areas that receive a disproportionate
quantity of air pollution from diesel fleets, including:
• truckstops (e.g. places especially for truckers that are usually by a highway or interstate
and that include a parking area, fueling services, and other facilities)
• ports (e.g. a cities, towns, or other places alongside navigable water with facilities for the
loading and unloading of cargo from ships; places from which aircraft operate that have
paved runways and passenger and cargo terminals which include baggage-movement and
passenger-transit operations; places where foreign goods are inspected by customs officers
and allowed to pass into and out of a country)
• rail yards (e.g. places at which trains originate or terminate, or at which they are
distributed or combined)
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• terminals (e.g. freight or passenger stations at the end of carrier lines, or that serve as
junctions at any point with other lines, that have facilities for the handling of freight and
passengers)
• construction sites (e.g. sites of ongoing large scale commercial, industrial, or heavy civil
construction)
• school bus depots/yards (e.g. parking areas and/or garages where school buses are stored
and maintained, or where school buses queue), distribution centers (e.g. facilities that
perform consolidation, warehousing, packaging, decomposition and other functions linked
with handling freight, often in proximity to major transport routes or terminals, and which
generate large amounts of truck traffic)
E. EPA Strategic Plan Linkage and Anticipated Outputs/Outcomes
Pursuant to Section 6a of EPA Order 5700.7, "Environmental Results under EPA Assistance
Agreements," EPA must link proposed assistance agreements with the Agency's Strategic Plan.
EPA also requires that grant applicants and recipients adequately describe environmental outputs
and outcomes to be achieved under assistance agreements (see EPA Order 5700.7,
Environmental Results under Assistance Agreements, www.epa.gov/sites/production/files/2015-
03/documents/epa_order_5700_7al.pdf).
1. Linkage to EPA Strategic Plan: All proposals must support progress towards EPA's 2014-
2018 Strategic Plan Goal 1, 'Addressing Climate Change and Improving Air Quality,'
Objective 1.2, 'Improve Air Quality,' which states, "achieve and maintain health-and
welfare-based air pollution standards and reduce risk from toxic air pollutants and indoor air
contaminants." Specifically, the proposed activities must reduce emissions from diesel fleets,
thereby reducing local and regional air pollution of criteria pollutants, air toxics, and
greenhouse gases.
Please read EPA's FY 2014-2018 Strategic Plan for more information.
2. Outputs: The term "output" means an environmental activity, effort and/or associated work
product related to an environmental goal and objective that will be produced or provided
over a period of time or by a specified date. Outputs may be quantitative or qualitative but
must be measurable during an assistance agreement funding period.
Expected outputs from the projects to be funded under this Program include, but are not
limited to:
• number of replaced or retrofitted engines/vehicles/equipment; and/or
• hours of idling reduced.
Other potential outputs may include, but are not limited to:
• engaging local communities with respect to the design and performance of the project;
• the project's inclusion in a broader-based environmental or air quality plan;
• the implementation of contract specifications requiring the use of cleaner vehicles and
equipment;
• a documented commitment to continue to identify and address air quality issues in the
affected community;
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adoption of an idle reduction policy;
providing support to clean diesel coalitions by sharing information, working with
interested fleets, and addressing specific geographic needs;
number of subawards; and/or
dissemination of project/technology information via list serves, websites, journals and
outreach events.
Progress reports and a final report will also be required outputs.
3. Outcomes: The term "outcome" means the result, effect or consequence that will occur from
carrying out an environmental program or activity that is related to an environmental or
programmatic goal or objective. Outcomes may be qualitative and environmental,
behavioral, health-related or programmatic in nature, but must also be quantitative. They
may not necessarily be achievable within an assistance agreement funding period.
Expected outcomes from the projects to be funded under this Program include, but are not
limited to:
• Tons of pollution reduced over the lifetime of the vehicles/engines/equipment,
specifically:
— fine particulate matter (PIVh.s),
— nitrogen oxides (NOX),
— greenhouse gases (GHG) such as carbon dioxide (CO2) and black carbon, and/or
— volatile organic compounds (VOCs).
• net reduction in gallons of diesel fuel used,.
• benefits to the communities affected by the project, including improvements to human
health and the environment, the local economy, social conditions, and the welfare of
residents in such communities.
Other potential outcomes may include, but are not limited to:
• community engagement and partnership;
• improved ambient air quality;
• health benefits achieved;
• changes in driver behavior regarding idling practices;
• an increased understanding of the environmental or economic effectiveness of the
implemented technology;
• increased public awareness of project and results;
• widespread adoption of the implemented technology;
• demonstration and deployment of zero and near-zero emission vehicles and engines; and
• emission reductions along freight transportation corridors.
IX. USE OF FUNDS RESTRICTIONS
A. Mandated Measures: Pursuant to 42 U.S.C. 16132(d)(2), no funds awarded under the Program
shall be used to fund the costs of emission reductions that are mandated under federal law. The
restriction applies when the mandate takes effect (the effective date) for any affected vehicles,
engines or equipment. This restriction does not apply to a mandate in a State Implementation
Plan approved by the Administrator under the Clean Air Act. Voluntary or elective emission
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reduction measures shall not be considered "mandated," regardless of whether the reductions are
included in the State Implementation Plan.
Specifically, projects involving locomotives and marine engines are not eligible for funding if
the emission reductions are required by EPA's locomotive and marine rule, "Control of
Emissions of Air Pollution from Locomotives and Marine Compression-Ignition Engines Less
than 30 liters per Cylinder." Also, projects involving stationary engines will not be considered
for funding if the emission reductions proposed for funding are required by EPA's RICE rule,
"National Emission Standards for Hazardous Air Pollutants (NESHAP) for Stationary
Reciprocating Internal Combustion Engines (40 CFR Part 63 Subpart ZZZZ). Projects which
include locomotives and/or marine engines and/or stationary engines must provide the state and
EPA a clear and concise justification for why/how the proposed emission reduction are not
subject to the Restriction for Mandated Measures. The justification must clearly demonstrate
that:
• the target engines are exempt from any federal requirements; or
• emission reductions funded under the Program will be implemented prior to the effective
date of any applicable federal requirements; and/or
• emission reductions funded under the Program will not be used to satisfy any applicable
federal requirements, but instead are in excess of (above and beyond) those required by
the applicable mandate.
Sufficient information must be provided to support the justification, including maintenance
records, if applicable. The mandated measures justification must be approved by EPA before any
grant funds are expended on applicable projects.
B. Normal Attrition: Repowers and replacements that would have occurred through normal
attrition are considered to be the result of normal fleet turnover and are not eligible for funding
under this program. Normal attrition is generally defined as a replacement that is scheduled to
take place within 3 years of the project start date. Normal attrition is typically defined by the
vehicle or fleet owner's budget plan, operating plan, standard procedures, or retirement schedule.
For example, if a school bus fleet typically retires vehicles after 20 years, a bus that is currently
in its 18th or 19th year of service is not eligible for replacement. A bus that is currently in its
17th year of service and has three years of useful life remaining (as defined by the fleet's
retirement schedule) is eligible for replacement. Therefore, FY 2016 award funds, including
recipient cost-share, shall not be used for replacements/repowers that would have occurred
through normal fleet turnover prior to September 30, 2019). Normal attrition does not include
replacements that must occur due to a state or Local mandate. Any question as to eligibility of a
vehicle/equipment replacement or repower should be directed to the EPA Project Officer.
C. Fleet Expansion: Funding under this Program cannot be used for the purchase of vehicles,
engines, or equipment to expand a fleet. Repower and replacement projects are eligible for
funding on the condition that the following criteria are satisfied:
1. The replacement vehicle, engine, or equipment will perform the same function and operation
as the vehicle, engine, or equipment that is being replaced (e.g., an excavator used to dig
pipelines would be replaced by an excavator that continues to dig pipelines).
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2. The replacement vehicle, engine, or equipment will be of the same type and similar gross
vehicle weight rating or horsepower as the vehicle, engine, or equipment being replaced
(e.g., a 300 horsepower bulldozer is replaced by a bulldozer of similar horsepower).
Horsepower increases of more than 25 percent require specific written approval from the
EPA Project Officer prior to purchase, and the grantee/subgrantee may be required to pay the
additional costs associated with the higher horsepower equipment.
3. The engine being replaced will be scrapped or rendered permanently disabled within ninety
(90) days of the replacement, or remanufactured to a certified cleaner emission standard.
Permanently disabling the engine while retaining possession of the engine is an acceptable
scrapping method. Cutting a three inch by three inch hole in the engine block (the part of the
engine containing the cylinders) is the preferred scrapping method. Remanufacturing shall be
performed by the original engine manufacturer, or by a dealership/distributor that has a
service program that is sponsored/backed by original engine manufacturer warranties (i.e. the
new, remanufactured and upgraded engine is warranted by the OEM). Non-road engines
shall be remanufactured to the cleanest certified emission standard possible. Highway
engines shall be remanufactured to Model Year (MY) 2007 or newer certified emission
standards. Remanufacturing must be completed during the project period. Other acceptable
scrappage methods may be considered and will require prior written approval from the EPA
Project Officer. If scrapped or remanufactured engines are to be sold, program income
requirements apply.
4. The vehicle/equipment being replaced will be scrapped or rendered permanently disabled
within ninety (90) days of the replacement, or remanufactured to a certified cleaner emission
standard. Permanently disabling the chassis and disabling or remanufacturing the engine (see
above) while retaining possession of the vehicle/equipment is an acceptable scrapping
method. The engine will be scrapped or disabled as described above in E.3. Disabling the
chassis may be completed by cutting through the frame/frame rails on each side at a point
located between the front and rear axles. Other acceptable scrappage methods may be
considered and will require prior written approval from the EPA Project Officer.
Vehicle/equipment components that are not part of the engine or chassis may be salvaged
from the unit being replaced (e.g. plow blades, shovels, seats, etc.). If scrapped or
remanufactured vehicles/equipment or salvaged vehicle/equipment chassis or components
are to be sold, program income requirements apply.
5. Evidence of appropriate disposal (such as digital photos of the engine tag showing serial
number, engine family number, and engine model year, and of the destroyed engine block
and cut frame rails or other structural components) is required in a final assistance agreement
report submitted to EPA.
6. For tire replacement projects, the original tires should be scrapped according to local or state
requirements, or the tires can be salvaged for reuse or retreading. If salvaged tires are sold,
program income requirements apply.
D. Federal Matching Funds: No funds awarded under the Program shall be used for matching
funds for other federal grants unless expressly authorized by statute. Likewise, recipient may not
use federal funds as cost-share funds for the State Clean Diesel Grant Program, including funds
received under EPA's National Clean Diesel Emissions Reduction Programs and federal
Supplemental Environmental Project (SEP) funds.
E. Expenses Incurred Prior to the Project Period: Except for eligible pre-award costs as defined
in 2 CFR §200.458 and as authorized by 2 CFR §200.309 and 2 CFR §1500.8, no funds awarded
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under the Program shall be used to cover expenses incurred prior to the project period set forth in
any assistance agreement funded under the Program. Additionally, except for eligible pre-award
costs as defined above, expenses incurred prior to the project period set forth in any assistance
agreement funded under the Program are not eligible as a cost-share.
F. Administrative Costs Expense Cap: No more than 15 percent of the state's total project costs
may be used to cover administrative type costs (e.g. personnel, benefits, travel, and office
supplies). Total project costs include the federal share as well as any cost-share provided by the
state. However, Regions have the discretion to allow state matching funds to exceed the 15% cap
if the state provides justification for unique circumstances. The state's indirect costs are not
considered as administrative type costs and do not count towards the 15 percent maximum.
G. Formerly Verified Technologies: No funds awarded under the Program shall be used for retrofit
technologies on EPA's or CARB's, "Formerly Verified Technologies" lists. EPA's formerly
verified list can be found at: www.epa.gov/verified-diesel-tech/list-formerly-verified-
technologies-clean-diesel, and CARB's formerly verified lists can be found at:
www.arb.ca.gov/diesel/verdev/vt/fv 1.htm, www.arb.ca.gov/diesel/verdev/vt/fv2.htm, and
www. arb. ca. gov/diesel/verdev/vt/fv3. htm.
H. Emissions Testing: No funds awarded under the Program shall be used for emissions testing
and/or air monitoring activities (including the acquisition cost of emissions testing equipment),
or research and development.
I. Fueling Infrastructure: No funds awarded under the Program shall be used for fueling
infrastructure, such as that used for the production and/or distribution of biodiesel, compressed
natural gas, liquefied natural gas, and or other fuels.
J. Single-Wide Wheels: No funds awarded under the Program shall be used for the purchase of
single-wide wheels except where a fleet is retrofitting from standard dual tires to SmartWay-
verified single-wide low rolling resistance tires. In this case, the cost of single-wide wheels
would be acceptable as additional equipment necessary to use the SmartWay verified
technology.
K. Tires and Aerodynamics: No funds awarded under the Program shall be used for the purchase
of low rolling resistance tires or advanced aerodynamic technologies if similar technologies have
previously been installed on the truck or trailer.
L. Auxiliary Power Units: No funds awarded under the Program shall be used for the purchase of
APUs or generators for vehicles with 2007 or newer certified engine configurations on long haul
Class 8 vehicles.
M. On-highway Model Year: No funds awarded under the Program shall be used to retrofit,
repower, convert or replace a transit bus, medium-duty, or heavy-duty highway vehicle with
engine model year 1990 older, or to retrofit engine model year 2007 or newer with DOCs or
DPFs, or retrofit engine model year 2010 or newer with SCR, or replace engine model year
2004-2006 with other than with an all-electric vehicle, or replace, repower or convert engine
model year 2007 or newer. Refer to Table 1 for further explanation.
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Table 1: Medium and Heavy-Duty Trucks and Transit Buses Funding Restrictions
Current Engine
Model Year
1991-2003
2004 to 2006
2007 to 2009
20 10 to current
DOC
Yes
Yes
No
No
DPF
Yes
Yes
No
No
SCR
Yes
Yes
Yes
No
Replace
with 2010 or
Newer
(Dray Only)
Yes
No
No
No
Replace
with 2013
or Newer
Yes
No
No
No
Repower or
Conversion of
Engine to
Higher
Certification
Level
Yes
Yes
No
No
Repower,
Replacement
or Conversion
to
All-Electric
(Includes
Dray)
Yes
Yes
No
No
N. School Bus Model Year: No funds awarded under the Program shall be used to retrofit,
repower, convert or replace a school bus with engine model year 1990 or older, or replace school
buses with engine model year 2004-2006 other than with an all-electric vehicle, or retrofit,
replace, repower or convert school buses with engine model year 2007 or newer. Refer to Table
2 for further explanation.
Table 2: School Bus Funding Restrictions
Current Engine
Model Year
1991 to 2003
2004 to 2006
2007 to current
DOC
Yes
Yes
No
DOC +
CCV
Yes
Yes
No
DPF
Yes
Yes
No
Replace with
2013 or
Newer
Yes
No
No
Repower or Conversion
of Engine to Higher
Certification Level
Yes
Yes
No
Repower,
Replacement
or Conversion
to All-Electric
Yes
Yes
No
O. Nonroad Useful Life and Operating Hours: No funds awarded under the Program shall be
used to retrofit, repower, upgrade or replace a nonroad engine or equipment that has less than
seven years of useful life remaining. A table distinguishing which nonroad engine model years
EPA has determined to have at least seven years of useful life remaining, based on the type and
age of vehicle, can be found at www.epa. gov/sites/production/files/2015-10/documents/fy 14-
nonroad-remaining-useful-life.pdf No funds awarded under the Program shall be used to
retrofit, repower, replace or upgrade nonroad engines and equipment that operate less than 500
hours per year.
P. Nonroad Repower/Replacement: No funds awarded under the Program shall be used to
repower or replace nonroad Tier 0 (unregulated) engines to a nonroad Tier 1 or lower nonroad
engine standard or from a Tier 2 nonroad engine standard to a Tier 3 or lower nonroad engine
standard. Refer to Table 3 for further explanation.
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Table 3: Nonroad Engine Funding Restrictions
Current Engine Tier
Tier 0 / 1
Tier 2 / 3
Repowered or Replaced 2013 or Newer Certified Engine
TierO
No
No
Tierl
No
No
Tier 2/3
Yes
No
Tier 4
Yes
Yes
All-Electric
Yes
Yes
Q. Locomotive and Marine Operating Hours: No funds awarded under the Program shall be used
to retrofit, repower, replace, upgrade or install idle reduction technologies on eligible
locomotives or marine engines that operate less than 1000 hours per year.
R. Marine Repower/Replacement/Upgrade: No funds awarded under the Program shall be used
to repower, replace or upgrade Tier 3 or Tier 4 marine engines, or to repower or replace marine
engines from Tier 1 marine engine standard to Tier 1 marine engine standard, or from a Tier 2
marine engine standard to a Tier 2 or lower marine engine standard. Refer to Table 4 for further
explanation.
Table 4: Marine Engines Funding Restrictions
Current Engine
Tier
Unregulated
Tierl
Tier 2
Tier 3 and Tier 4
Repowered or Replaced
New Certified Engine
Tierl
Yes
No
No
No
Tier 2
Yes
Yes
No
No
Tier3
Yes
Yes
Yes
No
Tier 4
Yes
Yes
Yes
No
Certified Engine
Upgrade
(Remanufacture
System)
Yes
Yes
Yes
No
Verified
Engine
Upgrade
Yes
Yes
Yes
No
S. Marine Shore Connection: No funds awarded under the Program shall be used for marine shore
connection system projects that are expected to be utilized less than 2,000 MW-hr/year.
T. Locomotive Retrofit/Repower/Replacement/Upgrade: No funds awarded under the Program
shall be used to retrofit unregulated or Tier 0 locomotives with SCR, or to upgrade, repower or
replace locomotives from: Tier 0+/1 to Tier 0+ or lower; Tier 1+/2 to Tier 1+ or lower; Tier 2 to
Tier 1+ or lower; or, from Tier 2+ to Tier 2+ or lower. Additionally, no funds awarded under this
RFP shall be used upgrade, repower or replace line-haul locomotives from Tier 2 to Tier 4, or to
upgrade, repower or replace line-haul locomotives from Tier 2+ to Tiers 3 and 4. No funds
awarded under the Program shall be used to install Automatic Engine Start-Stop technologies on
locomotives currently certified to Tier 0+ or higher. Refer to Table 5 for further explanation.
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Table 5: Locomotive Engines Funding Restrictions
Current Locomotive Tier
Unregulated and Tier 0
Tier 0+ and Tier 1
Tier 1+
Tier 2
Tier 2+
New Locomotive Tier
Tier 0+
Yes
No
No
No
No
Tier 1+
Yes
Yes
No
No
No
Tier 2+
Yes
Yes
Yes
Yes
No
Tier3
Yes
Yes
Yes
Yes
Yes*
Tier 4
Yes
Yes
Yes
Yes*
Yes*
Verified
Exhaust
Controls
SCR
No
Yes
Yes
Yes
Yes
* Applies to switcher locomotives only
Note: Tier 0+, Tier 1+, and Tier 2+. Tier 3, and Tier 4 represent locomotives manufactured or
remanufactured under the more stringent Tier standards promulgated under the 2008 (current)
locomotive and marine rule. Tier 0, Tier 1, and Tier 2 represent locomotives originally manufactured
or remanufactured under the less stringent Tier standards promulgated in 1997.
U. Locomotive Shore Connection: No funds awarded under the Program shall be used for
locomotive shore connection system projects that are expected to be utilized less than 1,000
hours/year.
X. MANDATORY COST-SHARE REQUIREMENT
Projects involving engine upgrades, certain idle reduction technologies, shore connection systems,
truck stop electrification technologies, certified engine repowers, clean alternative fuel conversions,
or certified vehicle/equipment replacements, as defined in Section VIII.C, are subject to the
following funding limitations and mandatory cost-share requirements.
Any voluntary matching funds provided by the state to qualify for the matching incentive, count
towards the "EPA funds and state voluntary matching funds" described below. Further, mandatory
cost share funds provided by the state and/or eligible third parties cannot count towards the state's
voluntary matching funds to qualify for the matching incentive. However, if a state requires a third-
party cost-share contribution above and beyond the mandatory cost-share amount for the elected
technology, then the "excess" cost-share may be applied towards the state voluntary match funds for
the purpose of qualifying for the matching incentive. See Section V.C for additional information on
the matching incentive.
A. Engine Upgrades: EPA funds and state voluntary matching funds can cover up to 40% of the
cost (labor and equipment) of an eligible engine upgrade (i.e. states and/or eligible third parties
are responsible for cost-sharing at least 60% of the cost of an eligible engine upgrade).
B. Idle Reduction Technologies on Locomotives: EPA funds and state voluntary matching funds
can cover up to 40% of the cost (labor and equipment) of an eligible idle reduction technology
on a locomotive (i.e. states and/or eligible third parties are responsible for cost-sharing at least
60% of the cost of an eligible idle reduction technology on a locomotive).
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C. Shore Connection Systems and Truck Stop Electrification Technologies: EPA funds and
state voluntary matching funds can cover up to 25% of the cost (labor and equipment) of an
eligible shore connection system or truck stop electrification technology (i.e. states and/or
eligible third parties are responsible for cost-sharing at least 75% of the cost of an eligible shore
connection system or truck stop electrification technology).
D. Certified Engine Repower: EPA funds and state voluntary matching funds can cover up to 40%
of the cost (labor and equipment) of an eligible engine repower (i.e. states and/or eligible third
parties are responsible for cost-sharing at least 60% of the cost of an eligible engine repower).
E. Certified Vehicle/Equipment Replacement:
1. Nonroad Diesel Vehicles and Equipment: EPA funds and state voluntary matching funds
can cover up to 25% of the cost of an eligible replacement vehicle or piece of equipment
powered by a 2013 model year or newer certified engine (i.e. states and/or eligible third
parties are responsible for cost-sharing at least 75% of the cost of an eligible replacement
vehicle or piece of equipment).
2. Highway Diesel Vehicles: EPA funds and state voluntary matching funds can cover up to
25% of the cost of an eligible replacement vehicle powered by a 2013 model year or newer
certified engine (i.e. states and/or eligible third parties are responsible for cost-sharing at
least 75% of the cost of an eligible replacement vehicle or piece of equipment).
3. Drayage Vehicle Replacement: EPA funds and state voluntary matching funds can cover up
to 50% of the cost of an eligible replacement drayage truck powered by a 2010 model year or
newer engine equipped with a diesel particulate filter (or diesel oxidation catalyst in the case
of a CNG engine) (i.e. states and/or eligible third parties are responsible for cost-sharing at
least 50% of the cost of an eligible replacement drayage vehicle).
F. Clean Alternative Fuel Conversions: EPA funds and state voluntary matching funds can cover
up to 40% of the cost (labor and equipment) of an eligible clean alternative fuel conversion (i.e.
states and/or eligible third parties are responsible for cost-sharing at least 60% of the cost of an
eligible clean alternative fuel conversion).
XI. WAIVER OF PROGRAMMATIC REQUIREMENTS
EPA will consider, on a case-by-case basis, waiver requests from programmatic requirements.
Waivers will only be approved for non-statutory and/or non-regulatory requirements. Sufficient
justification for the waiver must be provided by the state. States must obtain EPA approval for any
waiver request before conducting any work or expending any funds on a project involving a waiver
request. Any questions regarding waivers should be directed to the EPA Project Officer.
XII. AWARD ADMINISTRATION INFORMATION
A. Terms and Conditions: General administrative and programmatic terms and conditions
applicable to EPA assistance agreements under this Program may be viewed at:
www.epa.gov/grants/grant-terms-and-conditions.
B. Pass-through Entity: As defined at 2 CFR §200.74, refers to a non-Federal entity (i.e. the state)
that provides a subaward to a subrecipient to carry out part of a Federal program.
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C. Subaward: As defined at 2 CFR §200.92, means an award provided by a pass-through entity to
a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-
through entity. It does not include payments to a contractor or payments to an individual that is a
beneficiary of a Federal program. A subaward may be provided through any form of legal
agreement, including an agreement that the pass-through entity considers a contract. If the
recipient chooses to pass funds from this assistance agreement to other entities, the recipient
must comply with applicable provisions of 2 CFR Part 200, the National Term and Condition for
Subawards, and the EPA Subaward Policy (Grants Policy Issuance 16-01), both of which may be
found at https://wcms.epa.gov/grants/epa-subaward-policy.
Subrecipients only receive reimbursement for their actual direct or approved indirect costs such
that they do not "profit" from the transaction and subrecipients are subject to the same Federal
requirements as the pass-through entity. There is no requirement in the applicable regulations or
these guidelines for pass-through entities to compete subawards, but pass-through entities may
choose to conduct competition for subawards based on their own policies. Please note that
sometimes a pass-through entity or subrecipient may use the term 'contract' to characterize a
subaward. Therefore, it is important to examine the substance of the agreement to determine if
the transaction is a subaward or a procurement contract per the terms and conditions of the EPA
assistance agreement.
Recipients must obtain the written approval of EPA's Award official for any subawards that are
not described in the approved work plan in accordance with 2 CFR §200.38 or prior to awarding
a subaward to an individual if the EPA-approved work plan does not include a description of
subawards to individuals.
D. Subawards to For-Profit Entities: A for-profit company may be awarded a subgrant when
doing so is consistent with applicable regulations and policies. The EPA Subaward Policy
Section 7(c) states, "For-profit organizations and individual consultants, with very few
exceptions, are contractors rather than subrecipients under the standards in 2 CFR §200.330 and
EPA's guidance; they are typically ineligible for subawards from pass-through entities. As
provided in the National Term and Condition for Subawards, EPA's Award Official must
approve subawards to these entities on the basis of either precise descriptions of the subawards
in the EPA approved budget and work plan or on a transaction by transaction basis. See
Appendix A: Distinctions Between Subrecipients and Contractors for additional guidance." For
example, it would be appropriate to provide a subaward to a private school bus company so that
the company may implement a diesel emission reduction school bus replacement program (i.e.
the for-profit firm is not providing goods and services to the pass-through entity); it would NOT
be appropriate to provide a subaward to a private school bus company so that the company may
provide transportation services to the recipient (i.e. the for-profit firm is providing goods and
services to the pass-through entity).
E. Funding to Other State Agencies: EPA's general policy, based on the definitions of the terms
"Non-federal entity" (2 CFR §200.69), "Pass-through entity (2 CFR §200.74) "Recipient" (2
CFR §200.86) and "State" (2 CFR §200.90), is that the state itself is the legal entity that receives
EPA funds even if one particular component of the state is named in the assistance agreement as
the recipient. Transfers of EPA funds between state agencies to perform a particular financial
assistance agreement would, therefore, be governed by state law. Additionally, 2 CFR §200.417
"Interagency Services" contemplates situations in which one agency provides services to another
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agency within the same unit of government as a direct cost of performing the EPA assistance
agreement.
If utilizing interagency service agreements between state agencies under 2 CFR §200.417, the
expenditures the state agency makes to carry out the Interagency Service Agreement should be
shown in the corresponding direct cost categories (Personnel, Travel, Contractual etc.). If state
law characterizes agreements under which one state agency provides services to another state
agency as a procurement contract then the costs would be placed in the contractual category. In
interagency service situations, 2 CFR §200.417 provides the state may charge a pro-rated share
of indirect costs for the service, or 10% of the ". . .direct salary and wage cost of providing the
service (excluding overtime, shift premiums, and fringe benefits) may be used in lieu of
determining the actual indirect costs of the service." Centralized services included in central
service cost allocation plans subject to Appendix V of 2 CFR Part 200 are accounted for
separately.
There may be situations in which state law provides that state agencies or instrumentalities are
legally separate for the purposes of financial transactions between them or when state financial
management policies for Federal assistance agreements require separate instruments for
accounting purposes (e.g. due to differences in indirect cost rates). In those situations, a state
may characterize funding transfers as subawards. Note, however, that if one state agency
provides a subaward to another state agency the state agency acting as the pass-through entity
must comply with applicable provisions of 2 CFR Part 200 (including 2 CFR §200.331), the
National Term and Condition for Subawards, and the EPA Subaward Policy unless EPA
provides an exception. The aggregate cost estimates for subawards to other state agencies or
instrumentalities should be included as line items in the "Other" budget category.
F. In-Kind Assistance: The state may purchase equipment through blanket purchase agreements or
some other mechanism that ensures a low price for the item. The state may then provide the
equipment in lieu of money as in-kind assistance through a subaward.
G. Rebates: Recipients and subrecipients may implement rebate programs and issue rebates to
program beneficiaries (who are not employees, contractors, or subrecipients of the pass-through
entity) that purchase eligible equipment and/or vehicles as described in Section VIII of this
program guide, and not exceeding the "EPA funds and state voluntary matching funds" share of
costs as defined in Section X of this document. Rebates should be classified as participant
support costs rather than subawards as required by 2 CFR§ 200.75 and 2 CFR §200.92 and
included as line items in the "Other" budget category.
H. Contract: As defined at 2 CFR §200.22, means a legal instrument by which a non-Federal
entity purchases property or services needed to carry out the project or program under a Federal
award. The term as used in this part does not include a legal instrument, even if the non-Federal
entity considers it a contract, when the substance of the transaction meets the definition of a
Federal award or subaward (see §200.92 Subaward).
I. Procurements: When procuring property and services under a Federal award, a state must
follow the same policies and procedures it uses for procurements from its non-Federal funds.
The state will comply with §200.322 Procurement of Recovered Materials, and ensure that every
purchase order or other contract includes any clauses required by section §200.326 Contract
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provisions. All other non-Federal entities, including subrecipients of a state (other than another
state agency), will follow §§200.318 General Procurement Standards through 200.326 Contract
Provisions.
J. Performance Partnership Grants: Funds awarded under this program are not eligible for
inclusion with the state's Performance Partnership Grants.
K. State Notification: Executive Order 12372, Intergovernmental Review of Federal Programs,
may be applicable to awards resulting from this announcement. Recipients may be required to
provide a copy of their application to their State Point of Contact (SPOC) for review, pursuant to
EO 12372. This review is not required with the initial application, and not all states require such
a review. A listing of State Point of Contacts (SPOC) may be viewed at:
www.whitehouse.gov/omb/grants spoc. For application purposes, applicants may choose to not
respond to question #19 on the SF 424 form; EPA will provide additional guidance to Recipients
during the award process.
L. Public Notification: Not later than 60 days after the date of the award of a subaward, rebate, or
loan by a state, the state shall publish the following on the Web site of the state:
1. For subawards, rebates, and loans provided to the owner of a diesel vehicle or fleet, the total
number and dollar amount of subawards, rebates, or loans provided, as well as a breakdown
of the technologies funded through the sub grants, rebates, or loans; and
2. For other subawards, rebates, and loans, a description of each application for which the
subaward, rebate, or loan is provided.
M. Reporting Requirements: Quarterly programmatic progress reports and a detailed final
programmatic report will be required. Additional administrative and financial reporting may be
required per the terms and conditions of the award.
1. Quarterly Reports: Quarterly reports summarizing technical progress, planned activities for
the next quarter and a summary of expenditures are required. The schedule for submission of
quarterly reports will be established by EPA, after the grants are awarded. A template for
quarterly reports is available at www.epa.gov/cleandiesel/clean-diesel-state-allocations.
2. Final Reports: The final report must include: summary of the project or activity, emissions
benefits and other outputs and outcomes achieved, and costs of the project or activity
addition, the final report shall discuss the problems, successes, and lessons learned from the
project or activity that could help overcome structural, organizational or technical obstacles
to implementing a similar project elsewhere. Award recipients may be provided with
additional information and guidance on reporting performance measures and project progress
after award. A template for the final report is available at www.epa.gov/cleandiesel/clean-
diesel-state-allocations. The final report shall be submitted to EPA within 90 calendar days
of the completion of the period of performance. However, in order to facilitate awarding
funds the following fiscal year, it is recommended that the report be completed well before
90 days.
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