News and Insights

Texas Releases First Round of Grant Funding Under the Volkswagen Environmental Mitigation Trust Program

Tax Development May 23, 2019

Texas released its first opportunity for funding under the Volkswagen Environmental Mitigation Trust Program (“VW Program”) on May 8, 2019. Texas was allocated $209,000,000 under the VW Program and will use more than $58,000,000 in this initial round to fund the replacement of diesel Class 4-8 school, transit, and shuttle buses within defined priority areas. The applications will be reviewed, and grants will be awarded on a first-come, first-served basis until funds are exhausted. Grants could cover up to 80% of the cost of a new diesel, alternative fuel, or zero emission bus, and all existing buses must be scrapped. Texas is expected to open additional application rounds for other eligible diesel trucks and equipment over the next year.

About the VW Program

The VW Program is part of a settlement agreement in the litigation between the United States Environmental Protection Agency (EPA), the State of California, and Volkswagen (“VW”) and its related entities. As part of the settlement agreements, VW must pay approximately $2.9 billion into an environmental mitigation trust (“Trust”). All 50 states, the District of Columbia, and Puerto Rico were deemed beneficiaries and allocated funds based on the number of affected vehicles registered within the boundaries of each jurisdiction. Beneficiary states have between three and 10 years to spend their allocated funds on specific types of projects as outlined in the Trust documents. These projects are intended to fully mitigate the total lifetime excess NOx emissions from the affected vehicles. Similar to Texas, other states have started opening their application process to replace older diesel trucks and equipment. 


Allea Newbold 

Michael Falleroni 

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