At the end of 2007, the Energy Independence and Security Act (H.R. 6), was approved by Congress and signed into law by President Bush. Title V of this law establishes an Energy and Environment Block Grant program. These grants are intended to reduce fossil-fuel emission and total energy use, as well as improve energy efficiency and conservation in the transportation and building sectors.

Of the $2 billion in funding provided for such grants, 68 percent is distributed directly to counties and cities, with priority based on their population and other factors such as daytime population and square footage of office, commercial, and industrial space. The majority of the remaining funds — 28 percent of the total — are allocated to the states. The remaining 4 percent of grant funding is equally divided between Indian tribes and competitive grants to local government entities that are not eligible for other funding.

The grants can be used for a variety of purposes, from planning and building to providing incentives for efficient energy use. Among the program-eligible uses are: developing and implementing efficient energy and conservation strategies; developing programs to conserve energy used in transportation, such as flex time for workers, satellite work centers, bike paths, and pedestrian walkways; updating building codes and inspection procedures; installing renewable energy technology on or in government buildings; replacing traffic signals and street lighting with energy-efficient technology; energy audits; conservation programs; retrofitting to increase energy efficiency; smart-growth planning and zoning; and installing technology designed to capture greenhouse gases.

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