SB 981

relating to the use of school buses by public schools.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 34.009(j), Education Code, is amended to
(j)  A contract under this section may have any lawful term
of not less than 2 [two] or more than 15 [10] years.
SECTION 2.  Section 390.002(b), Health and Safety Code, is
(b)  Projects that may be considered for a grant under the
(1)  diesel oxidation catalysts for school buses built
(2)  diesel particulate filters for school buses built
(3)  the purchase and use of emission-reducing add-on
equipment for school buses, including devices that reduce crankcase
(4)  the use of qualifying fuel;
(5)  other technologies that the commission finds will
bring about significant emissions reductions; [and]
(6)  the replacement or conversion of a [pre-2007 model
year] school bus eligible for replacement or conversion under
(7)  the installation of charging infrastructure for
SECTION 3.  Section 390.003, Health and Safety Code, is
amended by adding Subsection (a-1) to read as follows:
(a-1)  A private entity that leases school buses to a school
district or provides school bus services or supporting
infrastructure to a school district by contract may apply for and
receive a grant under the program.
SECTION 4.  Section 390.004, Health and Safety Code, is
amended by amending Subsections (a), (c), and (d) and adding
Subsections (a-1) and (a-2) to read as follows:
(a)  The commission by rule shall establish criteria for
setting priorities for projects eligible to receive grants under
this chapter. Except as provided by Subsection (a-1), the [The]
commission shall review and may modify the criteria and priorities
(a-1)  The criteria must prioritize projects that achieve
the greatest reductions in diesel exhaust, especially particulate
(a-2)  The commission shall ensure that at least 75 percent
of the money issued for grants under this chapter is issued for
projects to purchase electric buses or to convert diesel buses into
(c)  A school bus proposed for replacement must:
(1)  be of model year 2006 or earlier if the bus will be
replaced with a combustion engine bus;
(1-a) be of a model year that is at least nine years
older than the year in which the grant application is submitted or
have an odometer reading at least 200,000 miles if the bus will be
(2)  have been owned and operated by the applicant for
at least the two years before submission of the grant application;
(3)  be in good operational condition; and
(4)  be currently used on a regular, daily route to and
(d)  A school bus proposed for purchase to replace a
[pre-2007 model year] school bus described by Subsection (c) must
be of the current model year or the year before the current model
year at the time of submission of the grant application.
SECTION 5.  Section 390.005(a), Health and Safety Code, is
(a)  A recipient of a grant under this chapter shall use the
grant to pay the incremental costs of the project for which the
grant is made, which may include the reasonable and necessary
expenses incurred for the labor needed to install
emissions-reducing equipment or vehicle charging infrastructure.
The recipient may not use the grant to pay the recipient's
SECTION 6.  The changes in law made by this Act in Chapter
390, Health and Safety Code, apply only to a Texas emissions
reduction plan grant awarded on or after the effective date of this
Act.  A grant awarded before the effective date of this Act is
governed by the law in effect on the date the award was made, and the
former law is continued in effect for that purpose.
SECTION 7.  This Act takes effect September 1, 2025.