To provide for the establishment by the Secretary of Energy of a pilot program and a development and demonstration program for clean fuel school buses, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean School Buses Act''.

SEC. 2. ESTABLISHMENT OF PILOT PROGRAM.

    (a) Establishment.--The Secretary of Energy, in consultation with 
the Administrator of the Environmental Protection Agency, shall 
establish a pilot program for awarding grants on a competitive basis to 
eligible entities for the demonstration and commercial application of 
alternative fuel school buses and ultra-low sulfur diesel school buses.
    (b) Requirements.--Not later than 3 months after the date of the 
enactment of this Act, the Secretary of Energy shall establish and 
publish in the Federal register grant requirements on eligibility for 
assistance, and on implementation of the program established under 
subsection (a), including certification requirements to ensure 
compliance with this Act.
    (c) Solicitation.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall solicit proposals for grants 
under this section.
    (d) Eligible Recipients.--A grant shall be awarded under this 
section only--
            (1) to a local or State governmental entity responsible for 
        providing school bus service to one or more public school 
        systems or responsible for the purchase of school buses; or
            (2) to a contracting entity that provides school bus 
        service to one or more public school systems, if the grant 
        application is submitted jointly with the school system or 
        systems which the buses will serve.
    (e) Types of Grants.--
            (1) In general.--Grants under this section shall be for the 
        demonstration and commercial application of technologies to 
        facilitate the use of alternative fuel school buses and ultra-
        low sulfur diesel school buses in lieu of buses manufactured 
        before model year 1977 and diesel-powered buses manufactured 
        before model year 1991.
            (2) No economic benefit.--Other than the receipt of the 
        grant, a recipient of a grant under this section may not 
        receive any economic benefit in connection with the receipt of 
        the grant.
            (3) Priority of grant applications.--The Secretary shall 
        give priority to awarding grants to applicants who can 
        demonstrate the use of alternative fuel buses and ultra-low 
        sulfur diesel school buses in lieu of buses manufactured before 
        model year 1977.
    (f) Conditions of Grant.--A grant provided under this section shall 
include the following conditions:
            (1) All buses acquired with funds provided under the grant 
        shall be operated as part of the school bus fleet for which the 
        grant was made for a minimum of 5 years.
            (2) Funds provided under the grant may only be used--
                    (A) to pay the cost, except as provided in 
                paragraph (3), of new alternative fuel school buses or 
                ultra-low sulfur diesel school buses, including State 
                taxes and contract fees; and
                    (B) to provide--
                            (i) up to 10 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will only be available to the 
                        grant recipient; and
                            (ii) up to 15 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will be available to the grant 
                        recipient and to other bus fleets.
            (3) The grant recipient shall be required to provide at 
        least the lesser of 15 percent of the total cost of each bus 
        received or $15,000 per bus.
            (4) In the case of a grant recipient receiving a grant to 
        demonstrate ultra-low sulfur diesel school buses, the grant 
        recipient shall be required to provide documentation to the 
        satisfaction of the Secretary that diesel fuel containing 
        sulfur at not more than 15 parts per million is available for 
        carrying out the purposes of the grant, and a commitment by the 
        applicant to use such fuel in carrying out the purposes of the 
        grant.
    (g) Buses.--Funding under a grant made under this section may be 
used to demonstrate the use only of new alternative fuel school buses 
or ultra-low sulfur diesel school buses--
            (1) with a gross vehicle weight of greater than 14,000 
        pounds;
            (2) that are powered by a heavy duty engine;
            (3) that, in the case of alternative fuel school buses 
        manufactured in model years 2003 through 2006, emit not more 
        than 1.8 grams per brake horsepower-hour of nonmethane 
        hydrocarbons and oxides of nitrogen and .01 grams per brake 
        horsepower-hour of particulate matter; and
            (4) that, in the case of ultra-low sulfur diesel school 
        buses, emit not more than--
                    (A) for buses manufactured in model year 2003, 3.0 
                grams per brake horsepower-hour of oxides of nitrogen 
                and .01 grams per brake horsepower-hour of particulate 
                matter; and
                    (B) for buses manufactured in model years 2004 
                through 2006, 2.5 grams per brake horsepower-hour of 
                nonmethane hydrocarbons and oxides of nitrogen and .01 
                grams per brake horsepower-hour of particulate matter,
        except that under no circumstances shall buses be acquired 
        under this section that emit nonmethane hydrocarbons, oxides of 
        nitrogen, or particulate matter at a rate greater than the best 
        performing technology of the same class of ultra-low sulfur 
        diesel school buses commercially available at the time the 
        grant is made.
    (h) Deployment and Distribution.--The Secretary of Energy shall 
seek to the maximum extent practicable to achieve nationwide deployment 
of alternative fuel school buses and ultra-low sulfur diesel school 
buses through the program under this section, and shall ensure a broad 
geographic distribution of grant awards, with a goal of no State 
receiving more than 10 percent of the grant funding made available 
under this section for a fiscal year.
    (i) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for any fiscal year for the acquisition of 
ultra-low sulfur diesel school buses.
    (j) Annual Report.--Not later than January 31 of each year, the 
Secretary of Energy shall provide a report evaluating implementation of 
the program under this Act to the Congress. Such report shall include 
the total number of grant applications received, the number and types 
of alternative fuel buses and ultra-low sulfur diesel school buses 
requested in grant applications, a list of grants awarded and the 
criteria used to select the grant recipients, certified engine emission 
levels of all buses purchased under the program, and any other 
information the Secretary considers appropriate.
    (k) Definitions.--For purposes of this section--
            (1) the term ``alternative fuel school bus'' means a bus 
        powered substantially by electricity (including electricity 
        supplied by a fuel cell), or by liquefied natural gas, 
        compressed natural gas, liquefied petroleum gas, hydrogen, 
        propane, or methanol or ethanol at no less than 85 percent by 
        volume; and
            (2) the term ``ultra-low sulfur diesel school bus'' means a 
        school bus powered by diesel fuel which contains sulfur at not 
        more than 15 parts per million.

SEC. 3. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION PROGRAM.

    (a) Establishment of Program.--The Secretary of Energy shall 
establish a program for entering into cooperative agreements with 
private sector fuel cell bus developers for the development of fuel 
cell-powered school buses, and 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 development 
        activities; and
            (2) 50 percent for demonstration activities and for 
        development activities not described in paragraph (1).
    (c) Funding.--No more than $25,000,000 of the amounts authorized 
under section 4 may be used for carrying out this section for the 
period encompassing fiscal years 2004 through 2006.
    (d) Reports to Congress.--Not later than 3 years after the date of 
the enactment of this Act, and not later than October 1, 2006, the 
Secretary of Energy shall transmit to the Congress a report that--
            (1) evaluates the process of converting natural gas 
        infrastructure to accommodate fuel cell-powered school buses; 
        and
            (2) assesses the results of the development and 
        demonstration program under this section.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of Energy 
for carrying out this Act, to remain available until expended--
            (1) $60,000,000 for fiscal year 2003;
            (2) $70,000,000 for fiscal year 2004;
            (3) $80,000,000 for fiscal year 2005; and
            (4) $90,000,000 for fiscal year 2006.

Summary: Clean School Buses Act - Directs the Secretary of Energy to establish a pilot program for awarding grants on a competitive basis to eligible entities for the demonstration and commercial application of alternative fuel school buses and ultra-low sulfur diesel school buses.

Directs the Secretary to establish a program for entering into cooperative agreements with private sector fuel cell bus developers to develop fuel cell-powered school buses, and subsequently with at least two 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.