BOARD MEETING DATE: February 4, 2005
AGENDA NO. 4

Approve Establishment of Revenue/Expenditure Accounts with Carl Moyer Fund and Program Allocations under AB 923 for Calendar Years 2005 and 2006, and Adopt Resolution Accepting Terms and Conditions of the 2005 Carl Moyer Program Award

SYNOPSIS:

This action is to establish accounts, recognize funds, and approve program allocations for Calendar Years 2005 and 2006 funds under AB 923. This action is also to adopt a resolution recognizing up to $12,181,983 in Carl Moyer grant award under SB 1107 with its terms and conditions for Calendar Year 2005.

COMMITTEE:

Mobile Source, January 28, 2005, Recommended for Approval

RECOMMENDED ACTION:

1. Approve establishment of the AB 923 and SB 1107 accounts within the Carl Moyer Fund to receive and disburse funds authorized under provisions of AB 923 and SB 1107.
    
2. Recognize increased revenue under AB 923 in the Carl Moyer Fund and approve the allocation of funds among the following programs for calendar years 2005 and 2006:

1. Up to $4 million for the light-duty vehicle remote sensing, repair, and scrapping program;
2. Up to $4 million for the agricultural sources;
3. Up to $11 million for the Carl Moyer Program (heavy-duty vehicle/equipment); and
4. $14 million or the remaining balance of funds for the Lower-Emission School Bus Program.

3. Approve the attached resolution to recognize up to $12,181,983 from CARB under SB 1107 for the Carl Moyer Program and place it in the Carl Moyer Fund, and accept the terms and conditions of the 2005 Carl Moyer Grant award.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On September 23, 2004, the Governor signed AB 923 (Firebaugh) which resulted in a significant increase in funding for programs that achieve emission reductions from vehicular sources and off-road engines. AB 923 was spearheaded by CalEPA and supported by a wide range of public and private entities. The Bill received bipartisan backing and the full support of Governor Schwarzenegger.

AB 923 allows air districts in designated non-attainment areas to collect up to six dollars, by adopting a resolution for the fee increase to be expended on programs to reduce emissions from vehicular sources and off-road engines. A resolution approving such fees was adopted by the Board on December 3, 2004.

In addition, CARB has allocated $12,181,983 to the AQMD under SB 1107 for the implementation of the CY 2005 Carl Moyer Program. An AQMD Board resolution accepting the terms and conditions of this grant award is required by CARB.

Proposal

This proposal is to further define funding allocations for eligible programs for Calendar Years 2005 and 2006 with funds generated from two-dollars of the vehicle registration fees under AB 923. The Board may choose to fund any combination of the Carl Moyer, the Lower-Emission School Bus, agricultural sources, or light-duty vehicle remote sensing, repair and scrapping programs. It is anticipated that for Calendar Years 2005 and 2006, the available funding amount will be approximately $11 million and $22 million respectively, totaling $33 million. This reflects six months of fee collection for 2005 and a full year of fee collection for 2006 by the DMV starting June 2005. Based on an approximate revenue amount of $33 million staff is proposing the following allocations for Calendar Years 2005 and 2006:

1. Up to $4 million for the light-duty vehicle remote sensing, repair, and scrapping program;
2. Up to $4 million for the agricultural sources;
3. Up to $11 million for the Carl Moyer Program (heavy-duty vehicle/equipment);
4. $14 million or the remaining balance of funds for the Lower-Emission School Bus Program:

The above allocation amounts for each program include any applicable administrative fees allowed under AB 923.

The proposed funding amounts for the light-duty and the agricultural sources programs will assist in the implementation of a Remote Sensing Pilot Program to cover about one million light duty vehicles, and in implementing SB 700 covered agricultural sources. In addition, the proposed funding amount for the Carl Moyer Program will augment funding from SB 1107 to reduce emissions from heavy-duty vehicles. Funding for the Lower-Emission School Bus Program will help continue the replacement of older school buses with new buses.

AB 923 funds allocated above for the Carl Moyer Program will serve as AQMD’s required local match for its portion of the SB 1107 funds allocated by CARB. If AQMD’s required local match is less than $11 million, the remaining balance designated for the Carl Moyer Program will be allocated to the Lower-Emission School Bus Program. The above allocation amounts include any program administration fees that may occur in concurrence with the requirements of AB 923.

Starting in Calendar Year 2007, staff intends to conduct public workshops to solicit input on future allocation of the vehicle registration fee program on an annual basis. Based on public inputs, funding allocation proposals for the eligible programs will be brought annually for Board consideration. The Board may adjust the amount of funding for each of the components of the program.

Staff also recommends to recognize and accept the terms and conditions for receiving $12,181,983 from CARB as AQMD’s 2005 Carl Moyer Program allocation under SB 1107. Staff intends to release an RFP for the 2005 funds in early summer of this year.

AQMD staff recommends establishing separate AB 923 and SB 1107 accounts within the Carl Moyer fund account to place and administer funds received under the respective programs.

Benefits to AQMD

The successful implementation of the current emissions reductions incentive programs has resulted in significant reductions of PM10 and NOx within the South Coast Air Basin. The influx of additional funding will help continue the successful progress toward cleaning the air with the implementation of the emissions reduction incentive programs. In addition, the expansion of the incentive programs with increased funding will also produce concurrent toxic air contaminant emission reductions, which is an additional benefit.

Resource Impacts

There are no additional monetary impacts as a result of this action.

Attachment

1. Resolution of the South Coast Air Quality Management District Board Recognizing and Accepting the Terms and Conditions of the 2005 Carl Moyer Grant Award
    

RESOLUTION NO. 05-

A Resolution of the South Coast Air Quality Management District Board Recognizing and Accepting the Terms and Conditions of the
2005 Carl Moyer Grant Award

                    WHEREAS, under Health & Safety Code §40400 et seq. the South Coast Air Quality Management District (AQMD) is the local agency with the primary responsibility for the development, implementation, monitoring and enforcement of air pollution control strategies, clean fuels programs and motor vehicle use reduction measures; and

                    WHEREAS, the AQMD is authorized by Health & Safety Code §§40402, 40440, and 40448.5 to implement programs to reduce transportation emissions, including programs to encourage the use of alternative fuels and low-emission vehicles; to develop and implement other strategies and measures to reduce air contaminants and achieve the state and federal air quality standards; and

                    WHEREAS, the Board has adopted several programs to reduce emissions from on-road and off-road vehicles, as well as emissions from other equipment, including the School Bus Incentive Program and the Carl Moyer Program; and

                    WHEREAS, the South Coast Air Quality Management District is designated as an extreme nonattainment area for ozone and as such is required to utilize all feasible means to meet national ambient air quality standards.

                    THEREFORE, BE IT RESOLVED that the Board of the South Coast Air Quality Management District, State of California, in regular session assembled on February 4, 2005, does hereby accept the terms and conditions of the 2004-05 (Year 7) Carl Moyer Program grant award and recognizes up to $12,181,983 in SB 1107 funds.

                    BE IT FURTHER RESOLVED that the Executive Officer is authorized and directed to take all steps necessary to carry out this Resolution.

________________________                         __________________________
Date                                                                  Clerk of the Board

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