Michigan is set to receive $64.8 million of a $2.8 billion settlement reached with Volkswagen after the auto company was caught installing devices on some of its vehicles intended to fool emissions tests – allowing up to 40 times the allowable amount of emissions into the air.

Michigan has been working on a plan to spend those funds over the last 12 months. One of the key goals of the Michigan Beneficiary Mitigation Plan is to “reduce diesel emissions from school buses statewide.” Of the nearly $65 million designated for Michigan, 20 percent ($12.9 million) will go toward class 4-8 school buses. School buses will be part of Phase 1 of the action plan and will be replaced from 2018 through 2021.

Under the spending plan, districts will be allowed to submit applications for replacementof school buses that are model year 2009 or older. It’s important to note that replacement is the emphasis in these applications; the goal is not to expand the fleets, but to replace outdated vehicles with newer, more efficient ones. Districts may submit applications to replace older vehicles with new diesel, alternate fueled, or all-electric school buses and reimbursement is on a sliding scale based on the new vehicle purchased. Private companies that contract with school districts are also eligible for the grants (at diminished reimbursement rates) and districts are allowed to partner with other districts, ISDs, etc., to develop a coalition for applications for funding.

Funding amounts for non-government owned school buses will be up to 25 percent of the cost of a new diesel or alternate fueled school bus and up to 50 percent of the cost of a new all-electric school bus and charging station. Funding amounts for government owned and privately owned school buses under contract with a public school district will be up to 25 percent of the cost of a new diesel school bus, up to 40 percent of the cost of an alternate fueled school bus, and up to 70 percent of the cost of a new all-electric school bus and charging station. Of the $12.9 million, a total of $3 million will be set aside for all-electric school buses.

The grant application period is expected to open in December and remain open for quite a few months. The timeline is not firm yet, but school bus grants will be the first RFP to come from the Department of Environmental Quality. All grants will be issued as reimbursements, so complete proposals are encouraged. It’s worth noting, the funds don’t have to be expended to apply, but only to receive the funds if approved. The DEQ will also place special priority on areas with the highest levels of air quality priority areas in Michigan: Wayne, Oakland, Monroe, Macomb, St. Clair, Livingston, Washtenaw, Muskegon, Berrien, and Allegan counties.

As we learn more, we will be able to share information with MASA members. For now, visit michigan.gov/deqvwsettlement for more information and the full details.