The Clean Fuels Formula program was created to finance the purchase or lease of clean fuel buses and associated facilities and the improvement of existing facilities to accommodate clean fuel buses. Two-thirds of the funds appropriated for this program would be allocated to areas with populations greater than 1 million; one-third to areas less than 1 million. The formula to distribute these funds was based on number of buses in an operator's fleet, the number of passenger miles per year, and the air quality rating for ozone and carbon monoxide for the locality the operator serves, relative to the same statistics for the entire pool of applicants (within its population size category).
In FY 2002, the funding for the Clean Fuels Formula program was merged with the Bus category of the Capital program. The funds have become indistinguishable and therefore the obligations for the Clean Fuels Formula program cannot be tracked independently.