THE VW SETTLEMENT A $25.5 MILLION OPPORTUNITY FOR SCHOOL SYSTEMS IN ALABAMA! Mark Bentley, Executive Director June 7, 2018
P resentation T opics • VW Settlement Overview • Status of Mitigation Trust • School Buses – An Opportunity • Next Steps
Background The German automaker , V olkswagen AG, admitted fault and settled a civil complaint which alleged that VW violated the Clean Air Act by installing software in approximately 590,000 model year 2009-2016 vehicles with 2.0 and 3.0 liter diesel engines with deliberate intent to disable emission controls under normal use and turn on emission controls only when the vehicles were undergoing emission testing. These “ defeat devices” allowed the vehicles to easily pass emissions testing yet emit highly unacceptable levels of NOx during normal operation. In October 2016 and May 2017, the U.S . District Court, Northern District of California approved two partial settlements related to the affected 2.0 and 3.0 liter vehicles, totaling $14.9 billion. In April 2017, a t hird partial settlement, addressing civil penalties and inj unctive relief was approved by the Court. VW paid a $1.45 billion civil penalty to the U.S . T reasury under this third partial settlement.
Settlement Overview The $14.9 billion VW agreed to pay under the first and second partial settlements will be used to buyback and/ or modify vehicles, and to support national and state-level proj ects to reduce NOx emissions. Settlement Breakdown Vehicle Buyback and Modification (consumers) $2.9 Billion Zero Emission Vehicle Investment $2 Billion (national and CA) $10 Billion Environmental Mitigation Trust (states)
VW Settlement – Summary ZEV Investment Commitment Environmental Mitigation Trust (Appendix C) (Appendix D) Amount $2 billion $2.9 billion Allocation 40% ($800 million) for CA Allocated to states according to 60% ($1.2 billion) for rest of U.S. subject vehicle population Timing 10 years (four 30-month cycles) Min. 3 years, max 15 years Entity Spent by VW, subject to Administered by a Trustee and approval of EPA and CARB lead agencies within each state 2 Qualified Investments Actions Infrastructure to support on- On- and off-road Activities road vehicles (ZEVs) transportation applications Education and outreach (retrofit or replace) Other activities that increase ZEV infrastructure for ZEV access passenger cars (up to 15%) Diesel Emissions Reduction Act (DERA) projects
Environmental Mitigation Trust $2.7 billion (2.0 liter settlement) and an additional $225M (3.0 liter settlement) is being placed in an independently administered Environmental Mitigation T rust to be allocated to beneficiaries (states, tribes, and certain territories) based on the number of impacted VW vehicles in their j urisdictions. The T rust will support proj ects that reduce NOx emissions where the VW vehicles were, are, or will be operated. Alabama’s Allocation: $25,480,968 ADECA has been designated by Governor Ivey to be the “ Lead Agency” in Alabama to administer the state’s T rust allocation.
Environmental Initial Subaccounts Initial Allocations Initial Subaccounts Initial Allocations (million $) (million $) Mitigation Trust Indiana $40.9 Puerto Rico $8.1 Missouri $41.2 North Dakota $8.1 Tennessee $45.8 Hawaii $8.1 1. Large Freight Trucks Minnesota $47.0 South Dakota $8.1 Alaska $8.1 Connecticut $55.7 2. School, Shuttle, and Arizona $56.7 Wyoming $8.1 Transit Buses Georgia $63.6 District of Columbia $8.1 Michigan $64.8 Delaware $9.7 3. Freight Switchers Colorado $68.7 Mississippi $9.9 4. Ferries/Tugs Wisconsin $67.1 West Virginia $12.1 New Jersey $72.2 Nebraska $12.2 5. Shorepower Oregon $73.0 Montana $12.6 Massachusetts $75.1 Rhode Island $14.4 6. Medium Freight Trucks Maryland $75.7 Arkansas $14.6 7. Airport Ground Support Ohio $75.3 Kansas $15.7 Equipment North Carolina $92.0 Idaho $17.3 Virginia $93.6 New Mexico $18.0 8. Forklifts and Port Cargo Illinois $108.7 Vermont $18.7 Handling Equipment Washington $112.7 Louisiana $19.8 Pennsylvania $118.6 Kentucky $20.4 9. Light Duty Charging New York $127.7 Oklahoma $20.9 Infrastructure Florida $166.3 Iowa $21.2 Texas $209.3 Maine $21.1 10. Diesel Emission California $422.6 Nevada $24.9 Reduction Act (DERA) Tribal Allocation $54.4 Alabama $25.5 option Trust Administration $29.3 New Hampshire $30.9 Tribal Administration $1.1 South Carolina $33.9 Total $2,925.0 Utah $35.2
Careful Evaluation Public Input of Public Input and (Listening S essions, Draft Plan Public Hearing Other Written Comments, Considerations S urvey) R equests for Final Plan Plan S ubmission Governor’sApproval Applications Application Application P roj ects AwardsAnnounced Workshop Evaluations Implemented
Spending Trust Allocations Beneficiaries have up to 10 years to spend 80%of their allocation, and up to 15 years to spend 100%of their allocation. If at least 80%of the state’s allocation is expended within the ten years, we may be eligible to receive a supplemental weighted share of the remaining balance in any unused funds. S tates eligible to receive such supplemental funding will be granted 5 years of additional time to select and implement appropriate Eligible Mitigation Actions. Up to 1/ 3 of the state’s allocation may be requested during the first year and up to 2/ 3 of the allocation during the first two years. The state must develop and submit a “ Beneficiary Mitigation Plan ” . A high– level summary of how the state intends to spend the T rust fund Must be submitted at least 30 days before the first funding request S tates may adj ust their goals and spending plans at their discretion but must provide the T rustee with updates to their Beneficiary Mitigation Plan.
Environmental Mitigation Trust Timeline Beneficiary Mitigation Plan Beneficiary Submitted Status Approved (Anticipate submittal in AL files Feb 28, 2018 4 th quarter Beneficiary of 2018 ) Certification Form Nov 28, 2017 T rust Effective Date Oct 2, 2017
Beneficiary Mitigation Plan The Plan is intended to provide the public with insight into the state’s vision for use of the mitigation funds and will address the following: Overall Goal for use of the Funds Categories of Eligible Mitigation Actions (including %of funds allocated) P otential Beneficial Impact on Air Quality in areas that bear a disproportionate share of air pollution burden Expected Ranges of Emission Benefits P rocess by which the state shall seek and consider public input on its Beneficiary Mitigation Plan
Eligible Mitigation Actions Class 8 Local Freight T rucks and P ort Drayage T rucks (Eligible Large T rucks) Class 4-8 S chool Bus, S huttle Bus, or T ransit Bus (Eligible Buses) Freight S witchers Ferries/ T ugs Ocean Going V essels (OGV) S horepower Class 4-7 Local Freight T rucks (Medium T rucks) Airport Ground S upport Equipment Forklifts and P ort Cargo Handling Equipment Light Duty Zero Emission V ehicle S upply Equipment Diesel Emission R eduction Act (DERA) Option
Class 4-8 School Bus, Shuttle Bus, or Transit Bus (Eligible Buses) Eligible class 4-8 school buses, shuttle buses or transit buses must have a 2009 engine model year or older and a GVWR greater than 14,001 pounds. Eligible Buses must be scrapped . Eligible Buses may be repowered with any new diesel or alternate fueled engine or all-electric engine, or may be replaced with any new diesel, alternate fueled or all-electric vehicle with an engine model year in which the Eligible Large T rucks Mitigation Action occurs or one engine model year prior.
Eligible Busses - % of Project that can be funded through the T rust Non-Government owned Government owned Busses Busses Repower with a new Up to 40% Up to 100% diesel or alt fuel engine (includes installation cost) Propane New diesel or alt fuel Up to 25% Up t o 100% vehicle Electric Repower with new all- Up to 75% Up to 100% electric engine (including installation Compressed and charging Natural Gas infrastructure) New all-electric Up to 75% Up to 100% vehicle (including installation and charging infrastructure)
Light Duty Zero Emission Vehicle Supply Equipment Light duty electric vehicle supply equipment includes Level 1, Level 2 or fast charging equipment (or analogous successor technologies) that is located in a public place, workplace, or multi-unit dwelling and is not consumer light duty electric vehicle supply equipment (i.e., not located at a private residential dwelling that is not a multi-unit dwelling). Light duty hydrogen fuel cell vehicle supply equipment includes hydrogen dispensing equipment capable of dispensing hydrogen at a pressure of 70 megapascals (MPa) (or analogous successor technologies) that is located in a public place. Limited to 15% allocation of Trust Funds
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