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U.S. Department of Transportation U.S. Department of Transportation Icon United States Department of Transportation United States Department of Transportation

Clean Fuels Grant Program (5308)

Program Overview

Section 3010 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L. No. 109-59, 119 Stat. 1144, 1572 (2005), amended section 5308 of title 49 United States Code, commonly referred to as the Clean Fuels Grant Program, from a formula-based to a discretionary grant program.

The program has a two-fold purpose. First, the program was developed to assist nonattainment and maintenance areas in achieving or maintaining the National Ambient Air Quality Standards for ozone and carbon monoxide (CO). Second, the program supports emerging clean fuel and advanced propulsion technologies for transit buses and markets for those technologies.

Eligible Recipients

Eligible applicants under this program are designated recipients, which are entities designated to receive Federal urbanized formula funds under 49 U.S.C. 5307. Applicants must be in areas that are maintenance or non-attainment for ozone or CO.

Eligible Activities

SAFETEA–LU grants authority to the Secretary to make grants under this section to assist recipients to finance eligible projects such as the following; (1) Purchasing or leasing clean fuel buses, including buses that employ a lightweight composite primary structure and vans for use in revenue service. The purchase or lease of non-revenue vehicles is not an eligible project. (2) Constructing or leasing clean fuel bus facilities or electrical recharging facilities and related equipment. Facilities and related equipment for clean diesel buses are not eligible. (3) Projects relating to clean fuel, biodiesel, hybrid electric, or zero emissions technology buses that exhibit equivalent or superior emissions reductions to existing clean fuel or hybrid electric technologies.

Funds made available under this program cannot be used to fund operating expenses or preventive maintenance. Funds made available under this program cannot be used to reimburse projects that have incurred prior eligible expenses without a Letter of No Prejudice (LONP) issued by FTA for the project before the costs are incurred.

Statutory References

49 U.S.C. 5308 and 49 CFR 624

Funding Availability

Funds are available the year appropriated plus two years (total of three years)

Allocation of Funding

Funds are allocated on a discretionary basis.


The Federal Share is not to exceed 90% of the net cost to comply with or maintain compliance with the Clean Air Act. FTA has administratively determined the composite Federal Share for vehicles and vehicle related equipment to be 83%. For facilities, the 90% share applies to the actual incremental costs of improvements for compliance with the Clean Air Act.

Other Program Highlights

On October 16, 2006 the FTA proposed to amend Part 624 of title 49 of the Code of Federal Regulations to reflect the provisions of SAFETEA-LU and published a [Notice of Proposed Rule Making (NPRM)[PDF]. Public comments were received through December 15, 2006. The final rule Federal Register: Vol. 72, No. 61 [PDF] was issued March 30, 2007 and is effective April 30, 2007.

Since the program is now a discretionary grant program, the pre-application included in Appendix A of 49 CFR 624 no longer applies. Applications will be requested in a Federal Register notice each fiscal year that discretionary funds are allocated for the program. The general criteria for selecting eligible projects will be included in the notice.