BOARD MEETING DATE: June 5, 2009
AGENDA NO. 5
PROPOSAL:
Approve Implementation Procedures for Carl Moyer On-Road Heavy-Duty Vehicle Voucher Incentive Program
SYNOPSIS:
This action is to approve the implementation procedures for the new Carl Moyer On-Road Heavy-Duty Vehicle Voucher Incentive Program (VIP). On May 1, 2009, the Board adopted a resolution to receive up to $3,400,000 in grant funds from CARB and approved the use of match funds to satisfy CARB’s buy-in provision to implement the VIP. Board approval is now required to run the program in a manner that is consistent with the program guidelines developed by CARB. This action is to approve the implementation procedures for the VIP.
COMMITTEE:
Technology, May 22, 2009, Recommended for Approval
RECOMMENDED ACTION:
Approve the Implementation Procedures for the Carl Moyer On-Road Heavy-Duty Vehicle Voucher Incentive Program.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
The Carl Moyer Memorial Air Quality Standards Attainment Program (CMP) provides incentive funds to help pay for the incremental cost of purchasing cleaner than required engines, vehicles, and/or equipment. Section 44286 of the California Health & Safety Code gives CARB the authority to reserve up to ten percent of the CMP funding in any given year for multidistrict projects. This year, CARB allocated all of the multidistrict funds towards a new On-Road Heavy-Duty Vehicle Voucher Incentive Program (VIP). CARB has developed the VIP to assist truck owners/operators of small fleets with purchasing newer low-emission vehicles at a reduced cost. The VIP allows truck dealers to provide a discount to owners/operators to offset the purchase cost of a newer, low-emitting truck. The VIP is intended to result in the accelerated turnover of older high-polluting heavy-duty vehicles with newer low-emission vehicles providing real emission reductions above those that would otherwise occur through normal attrition.
On May 1, 2009, the Board adopted a resolution to receive grant funds from CARB to implement the VIP. The Board also approved the use of match funds to satisfy CARB’s buy-in provision. CARB requires participating air districts to comply with all the requirements set forth in the VIP Guidelines without imposing stricter requirements or making any modifications. AQMD will work directly with CARB staff to ensure all VIP requirements are met. Total funding for the VIP is up to $6,800,000, including administrative funds, which is split 50/50 by CARB and AQMD.
Proposal
AQMD will implement the VIP in accordance with the guidelines developed by CARB (Attachment 2). The VIP Guidelines do not allow local air districts to place additional limitations on project criteria or make changes to the VIP Guidelines. AQMD may not restrict truck operation within the geographical boundaries of the South Coast Air Basin since the VIP requires the trucks to operate at least 75% of the time within California. AQMD will ensure the Firebaugh Bill’s Environmental Justice objectives (50% of projects located in disproportionately impacted areas) are achieved under the VIP. AQMD will continuously monitor the VIP-approved projects to determine the percentage of awards meeting the Environmental Justice criteria. In case the proportion of these awards falls below 50%, the AQMD will work closely with CARB staff in prioritizing projects in disproportionately impacted areas to ensure the 50% goal is met. CARB’s VIP Guidelines and attachments provide all the requirements for the program, including specific requirements for applicants, local air districts, dealerships, and dismantlers. Below are the main requirements for the VIP.
VIP Overview
The VIP will be implemented by AQMD through contractual agreements with dealers and dismantlers. The dealers will apply to the AQMD for the vouchers on behalf of the applicant. The VIP is limited to owner/operators of fleets with three or fewer vehicles that have been operating at least 75% in California during the previous two years. Table 1 summarizes the VIP funding amounts based on the vehicle weight and model year. The voucher amounts in Table 1 are specified in the VIP Guidelines; however, CARB maintains authority to revise voucher amounts based on program performance.
Air District Requirements
AQMD will be required to contract directly with at least one vehicle dealership and at least one vehicle dismantler to run the VIP. The AQMD will work in coordination with CARB staff in outreach efforts to help solicit program participation. AQMD will hold at least one workshop for local dealerships and dismantlers within the South Coast Air Basin to solicit participation in the VIP. AQMD must ensure participating dealerships and dismantlers meet all of the eligibility requirements outlined in the VIP Guidelines. Upon confirming the dealership/dismantler eligibility requirements, AQMD will enter into a contractual agreement with the qualified dealership and/or dismantler. Following contract execution, AQMD will work in coordination with CARB to provide training to each participating dealership to ensure that the dealership is trained on the terms, conditions, and requirements of the VIP. AQMD will provide all applicants and dealerships with the required VIP forms and documents. AQMD must evaluate applications on a first-come, first-served basis and approve or reject applications within 5 business days of receipt.
Once a VIP application is approved, there are four inspections that are required to be completed. These include three inspections related to the old vehicle to ensure the vehicle meets the program eligibility criteria and is delivered to the dismantler and scrapped within the required timeframes, and one post-inspection to verify the newer, low-emission vehicle meets the specifications for the voucher. As allowed by CARB, AQMD will delegate the pre-inspection, pre-dismantle, and post-inspection requirements to the dealers through contractual agreements, but will maintain the responsibility to conduct the dismantle inspections to ensure the old engines are destroyed according to the VIP guidelines. AQMD will also be responsible for auditing at least five percent of dealer-inspected projects, as required by CARB, to verify application information by visually inspecting the old and replacement vehicle.
AQMD will issue the voucher to the dealership once a reimbursement package has been received from the dealership and deemed complete. After the replacement vehicle has been funded, AQMD must mail out annual usage surveys for three years to the voucher recipient. AQMD must also retain all records of approved voucher projects for a minimum of five years from the date of issuing the voucher. Finally, AQMD will update its Carl Moyer Program Policies and Procedures Manual with an addendum to incorporate the VIP requirements within 2 months after the start of VIP implementation as required by CARB.
Applicant Requirements
CARB has specific requirements for potential applicants in the VIP. Applicants must first demonstrate VIP eligibility by providing documentation which shows: 1) ownership of existing vehicle, 2) two years historical mileage/fuel usage with certification that 75% of this usage occurred within California, and 3) vehicle delivery date agreement between applicant and participating dealership. VIP allows potential applicants to pursue a “Two-for-One” option where they replace two old-vehicles with one replacement vehicle. This option is geared towards potential applicants that may have difficulty with satisfying the historical vehicle mileage/fuel usage requirements for the previous two years.
Once the applicant has been approved for a voucher, the owner must agree to: 1) operate the vehicle at least 75% of the time in California for three years, 2) register the replacement vehicle in California with the Department of Motor Vehicles with a declared Gross/Combined Gross Vehicle Weight rating greater than 60,000 pounds, 4) allow CARB to verify registration and inspect the vehicle for three years, 5) not modify the emission control system, and 6) return annual usage surveys as requested by the air district.
Benefits to AQMD
The successful implementation of the Carl Moyer On-Road Heavy-Duty Voucher Incentive Program (VIP) will provide emission reductions of both NOx and PM as required by the program. Since the vehicles to be funded under this program will operate for many years, the emission reductions will provide long-term benefits.
Resource Impacts
Program funding in the amount up to $6,800,000, including administrative costs, was approved by the Board on May 1, 2009.
Attachments (EXE, 1.4m)
1. Table 1: Voucher Program Funding Amounts
2. CARB’s Voucher Incentive Program Guidelines