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(1) to a local or State governmental entity re-
sponsible for providing school bus service to 1 or 
more public school systems; 
(2) to 1 or more contracting entities that pro-
vide school bus service to 1 or more public school 
systems, if the grant application is submitted jointly 
with the 1 or more school systems that the buses 
will serve, except that the application may provide 
that buses purchased using funds awarded shall be 
owned, operated, and maintained exclusively by the 
1 or more contracting entities; or 
(3) to a nonprofit school transportation associa-
tion representing private contracting entities, if the 
association has notified and received approval from 
the 1 or more school systems to be served by the 
buses. 
(c) AWARDS.— 
(1) IN
GENERAL.—The Administrator shall 
seek, to the maximum extent practicable, to ensure 
a broad geographic distribution of grants under this 
section. 
(2) PREFERENCES.—In making awards of 
grants under this section, the Administrator shall 
give preference to proposals that—
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(A) will achieve the greatest reductions in 
emissions of nonmethane hydrocarbons, oxides 
of nitrogen, or particulate matter per proposal 
or per bus; or 
(B) involve the use of emissions control 
retrofit technology on diesel school buses that 
operate solely on ultra-low sulfur diesel fuel. 
(d) CONDITIONS OF GRANT.—A grant shall be pro-
vided under this section on the conditions that— 
(1) buses on which retrofit emissions-control 
technology are to be demonstrated— 
(A) will operate on ultra-low sulfur diesel 
fuel where such fuel is reasonably available or 
required for sale by State or local law or regula-
tion; 
(B) were manufactured in model year 1991 
or later; and 
(C) will be used for the transportation of 
school children to and from school for a min-
imum of 5 years; 
(2) grant funds will be used for the purchase of 
emission control retrofit technology, including State 
taxes and contract fees; and 
(3) grant recipients will provide at least 15 per-
cent of the total cost of the retrofit, including the
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purchase of emission control retrofit technology and 
all necessary labor for installation of the retrofit. 
(e) VERIFICATION.—Not later than 90 days after the 
date of enactment of this Act, the Administrator shall 
publish in the Federal Register procedures to verify— 
(1) the retrofit emissions-control technology to 
be demonstrated; 
(2) that buses powered by ultra-low sulfur die-
sel fuel on which retrofit emissions-control tech-
nology are to be demonstrated will operate on diesel 
fuel containing not more than 15 parts per million 
of sulfur; and 
(3) that grants are administered in accordance 
with this section. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Administrator to 
carry out this section, to remain available until ex-
pended— 
(1) $20,000,000 for fiscal year 2005; 
(2) $35,000,000 for fiscal year 2006; 
(3) $45,000,000 for fiscal year 2007; and 
(4) such sums as are necessary for each of fis-
cal years 2008 and 2009.
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SEC. 743A. DIESEL TRUCK RETROFIT AND FLEET MOD-
ERNIZATION PROGRAM. 
(a) ESTABLISHMENT.—The Administrator of the En-
vironmental Protection Agency, in consultation with the 
Secretary of Energy, shall establish a program for award-
ing grants on a competitive basis to public agencies and 
entities for fleet modernization programs including instal-
lation of retrofit technologies for diesel trucks. 
(b) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only to a State or local government 
or an agency or instrumentality of a State or local govern-
ment or of two or more State or local governments who 
will allocate funds, with preference to ports and other 
major hauling operations. 
(c) AWARDS.— 
(1) IN
GENERAL.—The Administrator shall 
seek, to the maximum extent practicable, to ensure 
a broad geographic distribution of grants under this 
section. 
(2) PREFERENCES.—In making awards of 
grants under this section, the Administrator shall 
give preference to proposals that— 
(A) will achieve the greatest reductions in 
emissions of nonmethane hydrocarbons, oxides 
of nitrogen, and/or particulate matter per pro-
posal or per truck; or
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(B) involve the use of Environmental Pro-
tection Agency or California Air Resources 
Board verified emissions control retrofit tech-
nology on diesel trucks that operate solely on 
ultra-low sulfur diesel fuel after September 
2006. 
(d) CONDITIONS OF GRANT.—A grant shall be pro-
vided under this section on the conditions that— 
(1) trucks which are replacing scrapped trucks 
and on which retrofit emissions-control technology 
are to be demonstrated— 
(A) will operate on ultra-low sulfur diesel 
fuel where such fuel is reasonably available or 
required for sale by State or local law or regula-
tion; 
(B) were manufactured in model year 1998 
and before; and 
(C) will be used for the transportation of 
cargo goods especially in port areas or used in 
goods movement and major hauling operations; 
(2) grant funds will be used for the purchase of 
emission control retrofit technology, including State 
taxes and contract fees; and 
(3) grant recipients will provide at least 5 per-
cent of the total cost of the retrofit, including the
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purchase of emission control retrofit technology and 
all necessary labor for installation of the retrofit, 
from any source other than this section. 
(e) VERIFICATION.—Not later than 90 days after the 
date of enactment of this Act, the Administrator shall 
publish in the Federal Register procedures to— 
(1) make grants pursuant to this section; 
(2) verify that trucks powered by ultra-low sul-
fur diesel fuel on which retrofit emissions-control 
technology are to be demonstrated will operate on 
diesel fuel containing not more than 15 parts per 
million of sulfur after September 2006; and 
(3) verify that grants are administered in ac-
cordance with this section. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Administrator to 
carry out this section, to remain available until expended 
the following sums: 
(1) $20,000,000 for fiscal year 2005. 
(2) $35,000,000 for fiscal year 2006. 
(3) $45,000,000 for fiscal year 2007. 
(4) Such sums as are necessary for each of fis-
cal years 2008 and 2009.
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SEC. 744. FUEL CELL SCHOOL BUSES. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a program for entering into cooperative agreements— 
(1) with private sector fuel cell bus developers 
for the development of fuel cell-powered school 
buses; and 
(2) subsequently, with not less than 2 units of 
local government using natural gas-powered school 
buses and such private sector fuel cell bus developers 
to demonstrate the use of fuel cell-powered school 
buses. 
(b) COST SHARING.—The non-Federal contribution 
for activities funded under this section shall be not less 
than— 
(1) 20 percent for fuel infrastructure develop-
ment activities; and 
(2) 50 percent for demonstration activities and 
for development activities not described in paragraph 
(1). 
(c) REPORTS TO CONGRESS.—Not later than 3 years 
after the date of enactment of this Act, the Secretary shall 
transmit to Congress a report that— 
(1) evaluates the process of converting natural 
gas infrastructure to accommodate fuel cell-powered 
school buses; and