BOARD MEETING DATE: October 2, 2009 AGENDA NO. 28

BOARD MEETING DATE: October 2, 2009
AGENDA NO. 28

REPORT:

Annual Report on AB 2766 Funds from Motor Vehicle Registration Fees for FY 2007-08

SYNOPSIS:

This report contains data on the AB 2766 Subvention Fund Program for FY 2007-08 as requested by CARB.

COMMITTEE:

Mobile Source, September 25, 2009, Reviewed

RECOMMENDED ACTION:

Approve the AB 2766 Subvention Fund Program report for FY 2007-08 for submittal to CARB.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In September 1990, Assembly Bill 2766 was signed into law authorizing a $2 motor vehicle registration fee surcharge, with a subsequent increase to $4 in 1992. Section 44223 of the Health & Safety Code (H&SC), enacted by AB 2766, specifies that this motor vehicle registration fee be used “…for the reduction of air pollution from motor vehicles pursuant to, and for related planning, monitoring, enforcement, and technical studies necessary for the implementation of the California Clean Air Act of 1988.”

Local jurisdictions receive 40% of the first $4 of each vehicle registration fee to implement projects that reduce mobile source emissions. The AQMD distributes these dollars quarterly to South Coast cities and counties based upon their prorated share of population. In 2004, a $2 surcharge was added pursuant to H&SC Section 44229 to provide a source of funding for expansion of the Carl Moyer Memorial Air Quality Standards Attainment program. This additional funding will continue to drive early introduction of clean air technology such as cleaner vehicle engines, a Lower-Emission School Bus Program, and accelerated vehicle retirement and repair programs.

Local agencies that are subvened motor vehicle registration fees for air pollution programs report annually to AQMD on their use of the fees, and the results of programs funded by the fees. The reporting by local governments follows the guidelines and methodology specified by CARB. The attached report to CARB details local government expenditures during FY 2007-08.

Summary of Subvention Fund Program Report

This report accounts for the projects, financial expenditures, quantifiable emission reductions and associated cost-effectiveness implemented by local governments through the AB 2766 Subvention Fund Program for FY 2007-08.

The AQMD staff provided technical assistance which consisted of meetings with local government staff to address program challenges unique to specific cities/counties, assisted with emissions calculations and provided hands-on instructions in the use of the automated reporting system. Further, enhanced AB 2766 outreach to city mayors, city managers and other decision making local government staff will continue to be provided by AQMD AB 2766 technical staff, specifically to further educate and encourage implementation of SIP creditable, more cost-effective, quantifiable projects that yield direct mobile source emission reductions.

During FY 2007-08, local governments received $19.9 million from motor vehicle fees and spent $17.9 million on mobile source emission reduction projects. Approximately $27.4 million or 76% of their ending balances (that includes unspent monies from prior years) was earmarked for future projects. This represents a noticeable increase in funds earmarked from FY 2006-07, where only 70% of the ending balance was earmarked for future projects. Expenditures in the Transportation Demand Management and Alternative Fuels/Electric Vehicles categories, as in prior years, were the two highest spending categories as many local governments continue to direct their spending priorities to comply with employee rideshare programs and to transition to cleaner fleets.

Quantifiable emission reductions from projects implemented during FY 2007-08 reduced 4,699 tons (VOC, NOx, PM10 and CO/7) of emissions. The 4,699 tons of emissions reduced from projects funded during FY 2007-08 had an overall average cost-effectiveness of $0.98 per pound of emissions reduced. Excluding one outlying Traffic Management project which had a significant effect on the overall cost-effectiveness, the average cost-effectiveness would be $7.24 per pound, which is under the $10 per pound cost-effectiveness threshold established in CARB’s Criteria and Guidelines document.

In accordance with H&S Code 44244.1, any agency receiving AB 2766 fee revenues is subject to a program or funding audit conducted by an independent auditor selected by the AQMD. Further, in response to Governing Board concerns raised regarding the pooling of AB2766 funds between local governments and Councils of Governments, a new financial reporting element was added for the Council of Governments who received AB2766 subvention funds from member cities and counties to provide project descriptions and fund expenditure details.