BOARD MEETING DATE: December 3, 2004
AGENDA NO. 39B

Approve Resolution Requesting Additional Two Dollar Increase in Vehicle Registration Fees Strictly for Incentive Programs Until 2015

SYNOPSIS:

On September 23, 2004, the Governor signed AB 923 (Firebaugh) which allows air districts to adopt an additional two dollar surcharge on motor vehicle registration fees to be used toward incentive funding programs. Funds may only be used for the Carl Moyer program, the school bus program, agricultural sources or light-duty vehicle projects.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

Approve the attached resolution and authorize the Executive Officer to forward a funding request to the California Department of Motor Vehicles prior to January 1, 2005.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On September 23, 2004 the Governor Schwarzenegger signed AB 923 (Firebaugh) which made possible a significant increase in potential funding available for the Carl Moyer program. AB 923 was spearheaded by CalEPA and supported by a wide range of public and private entities. The Bill received bipartisan support from the Legislature and the full support of Schwarzenegger Administration. Table 1 shows the organizations that supported and opposed the bill. As indicated, the Measure received significant support from Business and Environmental groups.

AB 923 allows air districts in state non-attainment areas for any motor vehicle pollutant to adopt an additional two dollar surcharge on motor vehicle registration fees, from four dollars to six dollars, to be used strictly incentive-based emission reduction funding programs. This action has the potential to generate approximately $22 million per year in additional incentive funding for AQMD programs. Staff is proposing that a portion of these funds be used to supplement the local government match requirement of the Carl Moyer program. Both the Bay Area Air Quality Management District and the Sacramento Metropolitan Air Quality Management District Boards have already approved similar requests.

Proposal

Approved the attached resolution that will allow the AQMD to take advantage of the opportunity provided through AB 923 to increase the motor vehicle registration fee by two dollars in the South Coast Air Quality Management District. This action will result in approximate revenues of $22 million dollars a year until January 1, 2015 for the AQMD to use as Moyer match funds and also to expand other funding programs.

The fee can be implemented on either April 1 or October 1, depending on when the requested is submitted to the California Department of Motor Vehicles (DMV). Staff is bringing this request forward to meet the January submittal deadline which DMV has established to be able to begin collecting the fees by April 1. This fee will remain in effect until January 1, 2015.

The use of the additional fees is limited by state law to:

1. The Carl Moyer Program: Fees may be used as the required local government match portion or used in its entirety subject to the CARB approved Carl Moyer Guidelines.
    
2. School buses: Fees may be used pursuant to the clean school bus program adopted by the Governing Board and subject to the approved CARB guidelines.
    
3. Light-duty programs: Fees may be used for scrap or repair programs adopted by CARB.
    
4. Agricultural sources: Fees may be used for the new purchase, retrofit, repower or add-on equipment for previously unregulated agricultural sources for a period of three years from the date of adoption of an applicable CARB rule, or until the compliance date of that rule, whichever is later.

The Governing Board may elect to fund one or all of these options at its discretion. Staff will return to the Board early next year to seek direction on how the funds should be distributed among these four areas.

AB923 contains specific provisions for board approval. Approval is subject to the majority vote of both the local air district’s elected board members and the entire Governing Board.

Table 1

AB 923 Support & Opposition

Benefits to AQMD

The successful implementation of the current incentive programs (Carl Moyer, School Bus and MSRC) has resulted in significant reductions in PM10 and NOx emissions in the AQMD. The influx of additional funding will continue the successful progress toward cleaning the air begun with the implementation of the incentive programs. In addition, the expansion of the incentive programs and funding will also produce concurrent toxic air contaminant emission reductions, which is an additional benefit. Use of the a portion of the funds as the required match may free up to $6 million dollars from the Clean Fuel Funds that may be used for other types of projects that are not included in the Moyer Program.

Resource Impacts

There are not additional monetary impacts as a result of this action; however additional staff time will be necessary to implement new or expand existing programs. Additionally, if a portion of the funds is used as the required local match, approximately $5 million dollars annually from the Clean Fuels Fund can be used for other programs.

Attachment

Resolution

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