For the purposes of this program, eligible alternative fuel vehicles are limited to those powered by the following: electricity, compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen, propane (LPG), or a mixture of fuels containing at least 85 percent methanol by volume (M85). A hybrid vehicle is defined as a motor vehicle with at least two different energy converters and two different energy storage systems on board the vehicle for the purpose of propelling the vehicle.

TCEQ Texas Clean Fleet Program grants, which are part of the Texas Emission Reductions Plan (TERP), are offered to eligible entities that own or lease a fleet of 75 or more on-road vehicles that are currently registered in Texas and intend to replace at least 20 on-road diesel vehicles. Projects must result in at least a 25% reduction of emissions of nitrogen oxides (NO_x).

The eligible reimbursement amounts range between 50% and 80% of the purchase costs depending on the model year of the vehicle and engine being replaced. Grants are awarded on a competitive basis with projects ranked according to the cost per ton of NO_x reduced by the project.

Recipients must agree to operate the grant-funded vehicles for a defined percentage of the annual mileage in the Houston-Galveston-Brazoria area, Dallas-Fort Worth area, Beaumont-Port Arthur area, Tyler-Longview area, Austin area, San Antonio area, Corpus Christi area, or Victoria area for five years or 400,000 miles, whichever occurs earlier.

Application deadline is 29 August 2012.