Sections 792 of the Energy Policy Act of 2005 authorize EPA to award grants and low-cost revolving loans to eligible entities to fund the costs of a retrofit technology that significantly reduces emissions through development and implementation of a certified engine configuration, verified technology,

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or emerging technology for buses (including school buses), medium-duty or heavy-duty trucks, marine engines, locomotives, or nonroad engines or vehicles used in construction, handling of cargo (including at port or airport), agriculture, mining, or energy production.

In addition, eligible entities may also use funds awarded for programs or projects to reduce long-duration idling using verified technology involving a vehicle or equipment described above, or the creation of low-cost revolving loan programs to finance diesel emissions reduction projects.

The objective of the assistance under this program is to achieve significant reductions in diesel emissions in terms of tons of pollution produced and reductions in diesel emissions exposure, particularly from fleets operating in areas designated by the Administrator as poor air quality areas.

Funding Priority-Fiscal Year 2008: This program aims to work aggressively to reduce the pollution emitted from diesel engines across the country through the implementation of varied control strategies and aggressive involvement of national, state, and local partners.

Priority shall be given to projects which: Maximize public health benefits; Are the most cost-effective; Serve areas with the highest population density, that are poor air quality areas (including nonattainment or maintenance of national ambient air quality standards for a criteria pollutant; Federal Class I areas; or areas with toxic air pollutant concerns); Serve areas that receive a disproportionate quantity of air pollution from diesel fleets, including truck stops, ports, rail yards, terminals, and distribution centers or that use a community-based multi-stakeholder collaborative process to reduce toxic emissions; Include a certified engine configuration, verified technology, or emerging technology that has a long expected useful life; Will maximize the useful life of any certified engine configuration, verified technology, or emerging technology used or funded by the eligible entity; Conserve diesel fuel; and Utilize ultra low sulfur diesel fuel (15 parts per million of sulfur content) ahead of EPA's mandate (for nonroad projects).

None.

Uses and Use Restrictions

Grants and Cooperative agreements are available to support recipient's allowable costs incident to supporting projects to reduce emissions from diesel engines, plus allowable indirect costs, in accordance with established EPA policies and regulations.No grant or loan provided under this program shall be used to fund the costs of emissions reductions that are mandated under Federal, State or local law.

Voluntary or elective emission reduction measures shall not be considered "mandated", regardless of whether the reductions are included in the State implementation plan of a State.

Distribution of Funds: 1) not less than 50 percent of funds available for a fiscal year under the DERA National Program shall be provided to eligible entities for the benefit of public fleets; 2) not less than 90 percent of funds available for a fiscal year under the DERA National Program shall be provided to eligible entities for projects using-a certified engine configuration; or a verified technology.3) not more than 10 percent of funds available for a fiscal year under the DERA National Program shall be provided to eligible entities for the development and commercialization of emerging technologies.

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Eligibility Requirements

Applicant Eligibility

A regional, State, local or tribal agency or port authority with jurisdiction over transportation or air quality; and a nonprofit organization or institution that represents or provides pollution reduction or educational services to persons or oganizations that own or operate diesel fleets; or has, as its principal purpose, the promotion of transportation or air quality are eligible for assistance under this program.

City, county, or municipal agencies, school districts, and metropolitan planning organizations (MPOs) that have jurisdiction over transportation or air quality are all eligible entities under this program.

For certain competitive funding opportunities under this CFDA description, the Agency may limit eligibility to compete to a number or subset of eligible applicants consistent with the Agency's Assistance Agreement Competition Policy.

Beneficiary Eligibility

State, Local, Public Nonprofit Institution/Organization, Anyone/General Public.

Credentials/Documentation

Costs will be determined in accordance with Office of Management and Budget (OMB) Circular A-87, found at 2 CFR 225, for State and local governments and Indian Tribes, OMB Circular No. A-21, found at 2 CFR 220, for educational institutions, and OMB Circular No. A-122, found at 2 CFR 230, for nonprofit institutions. Applicants may be requested to demonstrate they have appropriate background, academic training, experience in the field, and necessary equipment to carry out projects.

Aplication and Award Process

Preapplication Coordination

Regarding pre-application/pre-proposal assistance with respect to competitive funding opportunities under this program description, EPA will generally specify the nature of the pre-application/pre-proposal assistance, if any, that will be available to applicants in the competitive announcement.

For additional information, contact the individual(s) listed as "Information Contacts" or see Appendix IV of the Catalog.

This program is eligible for coverage under E.O.

12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Application Procedures

By law Section 792 includes application requirements. In addition, EPA requires final applications to be made on Standard Form 424, Application for Federal Assistance. Requests for application kits must be submitted to the Environmental Protection Agency, Grants and Interagency Agreements Management Division, 3903R, Washington, DC 20460. Standard Form 424 is also available for download at EPA's Office of Grants and Debarment (OGD) web site, http://www.epa.gov/ogd/AppKit/application.htm, from www.grants.gov, or from EPA Regional Collaborative assistance agreement websites. Applicants may be able to use http://www.grants.gov to electronically apply for certain grant opportunities under this CFDA.

Award Procedures

For competitive awards, EPA's Office of Air and Radiation and/or the 10 EPA Regions will review and evaluate applications, proposals, and/or submissions in accordance with the terms, conditions, and criteria stated in the competitive announcement. Competitions will be conducted in accordance with EPA policies/regulations for competing assistance agreements.

Deadlines

For competitive awards, deadlines will be specified in the Request for Applications or Request for Proposals.

Authorization

FY 2008 Interior, Environment and Related Agencies Appropriations Act, H.R. 2764; The Energy Policy Act of 2005, Public Law 109-58.

Range of Approval/Disapproval Time

Approximately 180 days after the request for applications.

Appeals

Assistance agreement competition-related disputes will be resolved in accordance with the dispute resolution procedures published in 70 FR (Federal Register) 3629, 3630 (January 26, 2005). Copies of these procedures may also be requested by contacting the individual(s) listed as "Information Contacts." Disputes relating to matters other than the competitive selection of recipients will be resolved under 40 CFR 30.63 or 40 CFR 31.70, as applicable.

Renewals

Permitted. Generally, EPA incrementally funds cooperative agreements. Approval of subsequent funding increments is dependent on satisfactory project progress, continued relevance of the projects to EPA's priorities, availability of funds, and Agency policy on the cooperative agreement process.

Assistance Considerations

Formula and Matching Requirements

Not applicable.

Length and Time Phasing of Assistance

The grants and cooperative agreements funded under the National Clean Diesel Funding Assistance Program will have up to a five-year project period. FY 2008 is the first year of funding for this Program.

Post Assistance Requirements

Reports

EPA includes reporting requirements for grants and cooperative agreements in the terms and conditions of the agreements.

Agreements may require quarterly, interim and final progress reports, and financial, equipment, and invention reports.

Specific reporting requirements are also identified in the Grant Regulations 40 CFR Part 30 and 40 CFR Part 31.

Audits

Grants and cooperative agreements are subject to inspections and audits by the Comptroller General of the United States, the EPA Office of Inspector General, other EPA staff, or any authorized representative of the Federal government. Reviews by the EPA Project Officer and the Grants Specialist may occur each year. In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," non-federal entities that expend $500,000 or more in a year in Federal awards shall have a single or a program-specific audit conducted for that year. Non-federal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in OMB Circular No. A-133.

Records

Recipients must keep financial records, including all documents supporting entries in accounting records and to substantiate changes in grants available to personnel authorized to examine EPA recipient grants and cooperative agreement records. Recipients must maintain all records until 3 years from the date of submission of the final expenditure reports. If questions, such as those raised as a result of an audit remain following the 3-year period, recipients must retain records until the matter is completely resolved.

Financial Information

Account Identification

68-0103-0-1-304.

Obigations

FY 07 $0; FY 08 $34,400,000; and FY 09 est $35,000,000.

Range and Average of Financial Assistance

There is no minimum amount of assistance. Smaller grants typically range from $100,000 - $300,000 with an average award of $125,000. Larger grants typically range from $500,000 - $2 million with an average award of $650,000.

Regulations, Guidelines, and Literature

Diesel Emissions Reduction program grants and cooperative agreements are subject to EPA's general grant regulations (40 CFR Part 30 and Part 31).

Information Contacts

Regional or Local Office

EPA encourages potential applicants to communicate with the appropriate EPA Regional Office listed in Appendix IV of the Catalog or Jennifer Keller.

Headquarters Office

For program information, contact: Jennifer Keller, Environmental Protection Agency, 1200 Pennsylvania Avenue, N.W., Mail Code: 6405J, Washington, DC 20460; Telephone: (202) 343-9541; Fax: (202) 343-2803; E-mail: keller.jennifer@epa.gov.

Criteria for Selecting Proposals

The evaluation and selection criteria for competitive awards under this CFDA description will be described in the competitive announcement.