California Air Resources Board

Financial incentives are a major part of the California Air Resources Board's (CARB) efforts to ensure clean school buses are operating at our schools and in our neighborhoods. These incentives can also help to drive the development of newer and cleaner technologies by speeding up their adoption by school bus fleet owners. Funding programs are either provided to local air districts to administer or through direct, state-run programs.

Most state grant funding programs require fleets to be in compliance with state regulations to be eligible for funding. As part of the grant application process, the local jurisdiction or the state agency may ask the school bus owners to report their fleet in CARB’s Truck Regulation Upload, Compliance and Reporting System (TRUCRS) in order to verify compliance. For more information, read the Fact Sheet: Truck and Bus Regulation School Bus Provisions.

Funds Available for Public School Districts

Hybrid & Zero-Emission Truck & Bus Voucher Incentive Project (HVIP)

• New in 2022: the Public School Bus Set-Aside for Small and Medium Air Districts (Public School Set-Aside) opened on March 30^th as a part of HVIP. $122 million set-aside is intended to cover nearly, if not all, of the full cost of new electric school buses for eligible applicants. Public School Bus Set-Aside information is located at www.californiahvip.org/purchasers. FY2023-24 set-aside funds will be available in early 2023.
• Standard HVIP vouchers help offset the cost of eligible hybrid, low NOx engine, hydrogen fuel cell or battery electric trucks and buses. For school bus purchases, fleets can request a voucher for up to $220,000 per bus, plus an additional $15,000 per bus if operated in a disadvantaged community. Up to $30,000 per battery electric bus or truck is available towards the purchase of charging equipment. Check the website for program and funding status. Learn More

Volkswagen Environmental Mitigation Trust

Closed - The Volkswagen (VW) Environmental Mitigation Trust provides funds for California to fully mitigate excess NOx emissions caused by VW’s use of illegal defeat devices. The San Joaquin Valley Air Pollution Control District (SJVAPCD) will administer $130 million in Mitigation Trust funding statewide for zero-emission transit, school, and shuttle buses. Funding will be available in two installments of $65 million each starting in the fall of 2019, first come first served. The application period is currently closed for school buses. Check the website for program and funding updates. Learn More

State and Federal Funding Programs Administered by Local Air Districts

California has a long history of allocating funds for the replacement of older, diesel school buses. These funds are provided to State Agencies by the California Legislature. Often, the local air district will administer their funding for school districts that reside within their territory. Local air districts follow the LESBP guidelines, described below, when using local funds for school bus projects. For information on local funding programs, contact your local air pollution control district.

New California Grants Portal for all California-issued funding opportunities.

AB 617 - Community Air Protection Incentives

Community Air Protection incentives are available to support early action emissions reductions in communities most affected by air pollution, as well as to support communities selected for air monitoring or emissions reduction programs and those under consideration for future selection.  First-year funds have provided immediate reductions through the Carl Moyer and Proposition 1B Programs, and both second- and third-year funds expand available funding opportunities to stationary and community-identified sources.  School bus replacements are an eligible project type under the Carl Moyer Program, and additional flexibility has been added to school bus projects funded with Community Air Protection incentives.  Learn More

Carl Moyer Program

The Carl Moyer Program provides funding for cleaner-than-required engines and equipment. School buses are one of the many categories of equipment funded through the program. Grant amounts vary depending on the project type. Learn More

Lower-Emission School Bus Program (LESBP)

Beginning in 2001, the LESBP has funded new, cleaner technology bus replacements and retrofit devices that significantly reduce toxic particulate matter emissions from diesel school buses. Funding may still be available through your local air district. Learn More

Federal Diesel Emission Reduction Act (DERA) and School Bus Program Rebates

Closed - 2021 U.S. EPA  ARP School Bus Funding Programs. The American Rescue Plan Act of 2021 (ARP) new grant program last year will fund up to $300,000 for an electric school bus. 

The Diesel Emissions Reduction Act (DERA) of 2010 allows the U.S. Environmental Protection Agency (EPA) to offer grants and rebates to reduce harmful emissions from older, dirtier diesel vehicles. EPA offers DERA funds via National Grants, Tribal Grants, Rebates, and State Allocations. Learn More

CARB has used DERA's State Allocations to fund retrofits and replacement of diesel school buses since 2011. For more information on CARB's allocation and spending of DERA funds, visit CARB and DERA School Bus Funding webpage.