(a) Establishment.--The department is authorized to establish a competitive grant program to implement capital improvements deemed necessary to support conversion of a local transportation organization's fleet for use of an alternative energy source, including compressed natural gas.

(b) Criteria.--The department shall establish criteria for awarding grants under this section. Criteria shall, at a minimum, include feasibility, cost/benefit analysis and project readiness.

(c) Additional authorization.--Notwithstanding any other provisions of this section or other law, the department may use funds designated for the program established under subsection (a) to supplement a local transportation organization's base operating allocation under section 1513 (relating to operating program) if necessary to stabilize an operating budget and ensure that efficient services may be sustained to support economic development and job creation and retention.