Volkswagen Settlement - Transit Bus Replacement Program

Vehicles eligible for replacement

Conventional-fueled (gas, diesel) Model year 2009 and older Class 4-8 transit vehicles may be replaced with new original equipment manufacturer (OEM) alternative-fuel (all-electric, hydrogen fuel cell or renewable natural gas (RNG)). Eligible buses must of age and/or accumulated mileage to warrant replacement and must be destroyed following delivery of the replacement vehicle to ensure they are no longer used. If you are applying for funds to replace an existing bus with an electric bus, charging equipment associated with that vehicle may also receive funds. See Colorado's 2019 Beneficiary Mitigation Plan on CDPHE's website for further details. 

On January 17th, 2019, Governor Jared Polis’ signed executive order B 2019 002, "Supporting a Transition to Zero Emission Vehicles." This executive order directs CDPHE to, “focus all remaining eligible investments on supporting electrification of transportation, including transit buses, school buses, and trucks.” The result is an updated 2019 BMP, which limits future awards only to zero-emission vehicles (ZEV).

Evaluation Criteria

CDOT will evaluate your request for Settlement funding of alt-fueled replacements based on the merits and viability of your agency’s alternative fuel vehicle plan, your methodology for implementing that plan, and your technical capability and preparedness for implementation.

Available Funds

Approximately $16 million remains to be awarded of the $30 million total Settlement Transit Bus Replacement budget.  These funds are anticipated to be available for awards over the next two to three subsequent annual award cycles. Exact funding amounts to be awarded through the 2019 and future years' award cycles will be determined by the scoring committee based on applications received. 

About the Process

The CDOT Division of Transit and Rail (DTR) will implement this program through its existing awards processes. DTR currently conducts an annual competitive process known as the Consolidated Call for Capital Projects (CCCP) as a means to identify, evaluate, and select transit capital projects for grant assistance. Instead of conducting a separate application process for each source of funds it administers, CDOT consolidates the capital funds into a single competitive application process that occurs annually in the fall. DTR staff evaluate projects and, if the project is selected for funding, determine the most appropriate funding program.


The application period is expected to open on September 30, 2019. The deadline for applications is Nov. 15, 2019.  All applications must be submitted through DTR's awards management system (COTRAMS).

Applicants that are new to COTRAMS or are first-time DTR applicants must contact Ken Mooney at [email protected] to request a COTRAMS agency and user profile be set up.  Additional materials are required of first-time applicants, so they are encouraged to reach out as early as possible.


DTR may use a combination of existing state or federal funds and Settlement funds to incentivize the purchase of zero-emission transit vehicles. Applicants may request awards of DTR's existing program funds for an amount equivalent to 80% of the cost of a new diesel replacement bus. The Settlement funds may also be awarded in an amount equivalent to 110% of the incremental cost (over the cost to purchase a diesel bus) of a new zero emission bus.  Funding for associated charging infrastructure may also be awarded, subject to the funding caps established in the trust. Applicants may apply for both existing funds and Settlement funds, or one or the other. By combining both types of funds, the local transit fleet’s cost for a new zero emission transit bus may be less than the fleet would pay for a new diesel transit bus under existing funding programs. The review committee will determine award amounts for related charging equipment, but generally this is capped at $100,000 per charger.  

Program criteria include:

  • An identified vehicle must be scrapped (cut the vehicle’s frame rails completely in half and cut a minimum 3-inch hole in the engine block) for each new vehicle that is funded.
  • Vehicles identified for replacement must be drivable and must have been registered, operated and insured in Colorado for the previous two years. This ensures the program achieves real emission reductions and prevent abuse.
  • Public, private, for-profit and non-profit fleets used only for the delivery of public transit services that meet all other applicable eligibility requirements.
  • The Transit Bus Replacement Program is limited to vehicle replacements and will not fund engine repowers or non-QVM conversion kits. Repowers and non-OEM conversions can lead to warranty and maintenance concerns. Requiring new vehicle purchases will enhance vehicle safety and invest trust funds in projects with longer service lives.
  • If Settlement funds are awarded for a new all-electric vehicle, charging equipment associated with that vehicle may also receive trust funds.

Program Goals

Colorado's overall goal for the use of funds is to achieve the maximum long-term air quality benefit for the state of Colorado by stimulating demand for new classes and types of ZEVs. As such, some of the following principles for administering the funds are as follows:

  • Incentivize transformational projects that promote a broader shift in fleet technology and operations, thereby yielding longer-term emissions benefits beyond the projects directly funded by the expenditure of the $68.7 million state allocation;
  • Maximize the trust’s air quality benefits in Colorado, including reductions of NOx, greenhouse gases, and other pollutants;
  • Use trust funds to catalyze the adoption of zero emission vehicles
  • Improve air quality in areas that have historically borne a disproportionate share of the air pollution burden within Colorado and areas that were disproportionately impacted by the violating VW diesel emissions, including the Denver, North Front Range, and Pikes Peak regions.
  • Provide statewide incentives to scrap and replace conventional-fuel transit buses with ZEV (e.g., All-Electric, RNG or hydrogen fuel cell) buses.
  • Accelerate the future adoption of ZEVs by demonstrating to transit fleet operators and the public that these vehicles are viable and by allowing transit fleet operators to gain familiarity and expertise with them.
  • Remove barriers to the adoption of zero emission transit vehicles.
  • Promote the development of ZEV technologies by expanding the market for large electric buses.
  • Allow local transit agencies and members of the general public who use mass transit to benefit directly from VW Settlement trust funds.
  • Promote greater access to the benefits of transportation electrification in communities and populations that do not have the ability to purchase a personal electric vehicle while encouraging a statewide overall reduction in vehicle miles traveled per capita.

More information

Visit CDPHE for more information on the Volkswagen Settlement and additional funding programs.

Access the 2019 Colorado Beneficiary Mitigation Plan and further details about administration of the Transit Bus Replacement Program. (see pages 13 and 14 specifically).

If you have more questions, contact Ken Mooney at [email protected].