2024 School Bus Rebate Application and Instructions

Application form and full requirements and instructions can be downloaded from the file list at the bottom of this page.

NDEE’s Clean Diesel Rebate Program is offering rebates to replace older diesel school buses with cleaner buses powered by a diesel, gasoline, or Low-NOx propane engine with engine model year 2021 or newer. To ensure emissions reductions are achieved through this program, each bus being replaced must be permanently disabled and scrapped. Funding for this year’s program is made possible by the U.S. Environmental Protection Agency’s State Clean Diesel Grant program. A school district or system may apply to replace one school bus.

NDEE will reimburse: 

• 35% of the base purchase cost of a new or used school bus powered by a propane engine certified to meet 2021 or later California Air Resources Board (CARB) Optional Low-NOx Standards (see below). The maximum rebate amount is $49,000.
• 25% of the base purchase cost of a new or used school bus powered by a diesel or gasoline engine certified to meet 2021 or later EPA or CARB emissions standards. The maximum rebate amount is $31,000.

The school bus owner is responsible for the remainder of the purchase price (mandatory cost-share). No other federal grant funds may be used to cover any portion of the mandatory cost-share. Applicants should secure approval for this expense from their school board during the application process and submit a Letter of Commitment with the application so that, if selected, the district is able to proceed with the project as soon as a project agreement is completed.

NDEE anticipates awarding rebates for eleven (11) diesel or gasoline replacement buses and one (1) Low-NOx propane replacement bus. NDEE will determine the number and type of school bus rebates to award after evaluating applications for all Nebraska Clean Diesel programs.

WHO IS ELIGIBLE?

• Any Nebraska public or private school district or school system that offers primary or secondary education.
• Companies that own buses and have a current agreement with school districts/systems are also eligible to apply if they are either headquartered or have an operational base office in Nebraska.
• Previous recipients of school bus rebates through NDEE are eligible to apply, but preference will be given to schools that are not previous recipients.

BUSES ELIGIBLE TO BE REPLACED

• An operational diesel-powered school bus (Type A, B, C, or D) currently used to transport students that has been driven at least 7,000 miles each year during the past two years by the current owner. Documentation of mileage is required with the application.
• A bus with engine model year 2009 or older may be replaced by a diesel, gasoline, or Low-NOx propane bus.
• A bus with engine model year 2010 or newer may only be replaced by a Low-NOx propane bus.
• The bus being replaced must be scrapped (permanently disabled) within 90 days of replacement and prior to submission of the reimbursement request to NDEE.

ELIGIBLE REPLACEMENT BUSES

• The replacement bus cannot be purchased until a signed agreement is on file with NDEE.
• New or used bus with propane-fueled engine (engine model year 2021 or newer) certified to meet CARB’s Optional Low-NOx Standards of 0.1 g/bhp-hr, 0.05 g/bhp-hr, or 0.02 g/bhp-hr NOx.
• New or used bus with diesel or gasoline engine (engine model year 2021 or newer) certified to meet EPA emissions standards.
• The replacement bus must resemble the replaced bus in form and function.
• The replacement bus must be in the same or lower Gross Vehicle Weight Rating (GVWR) class as the replaced bus. 

PROJECT AND REIMBURSEMENT TIMELINE

By August 31, 2026, a selectee should:

1. Accept delivery of the replacement bus
2. Scrap the old bus in accordance with the program requirements
3. Submit the Reimbursement Request with all supporting documentation.
4. Project extensions may be available if the replacement bus cannot be delivered by August 31, 2026.

APPLICATION PROCESS AND TIMELINE

To apply for a school bus rebate:

• Download the application form, instructions, and commitment letter template from the file list at the bottom of this web page.
• Be sure to consult the Application Materials Checklist on Page 2 of the instructions.
• Submit the completed application form, signed commitment letter, and all required documentation by 5:00 pm Friday, July 25, 2025.

Mail or email the application to:
Nebraska Clean Diesel Rebate Program
Nebraska Department of Environment and Energy
245 Fallbrook Blvd., Suite 100
Lincoln NE 68509-8922
NDEE.AirGrants@nebraska.gov

SELECTION OF RECIPIENTS

If the number of complete, eligible applications is greater than the number of available rebates, rebate recipients will be drawn by lottery. Each applicant that has not received a previous school bus rebate will have two entries in the drawing, while each previous rebate recipient will have one entry in the drawing. Applicant names will be drawn and placed in corresponding order (omitting duplications) until the number of available rebates is reached. The remaining applicant names will be drawn and placed in order on an alternate list. If an applicant on the rebate list withdraws, funds will be offered to the next applicant on the alternate list.