The proposed bill establishes a new "Propane School Bus Deployment Program" under Minnesota Statutes, chapter 216C, aimed at promoting the use of propane-fueled school buses. It defines key terms such as "propane school bus," "eligible applicant," and "prioritized school district," and outlines the eligibility criteria for grant applications. The bill allows grants to cover up to 50% of the costs for purchasing propane school buses and related equipment, with a focus on prioritized school districts that serve a significant number of students living in poverty. The commissioner of commerce is tasked with developing the application process and providing technical assistance to school districts.

Additionally, the bill appropriates $4,000,000 from the general fund for the program in fiscal year 2026, which will be available until June 30, 2028. To fund this initiative, the bill cancels a previous appropriation of $4,000,000 designated for electric school bus grants. The commissioner is also required to report annually to legislative committees on the grants awarded under this program. The effective date of the bill is set for the day following its final enactment.