BOARD MEETING DATE: October 7, 2005
AGENDA NO. 16
(Continued from September 9, 2005 Board Meeting)

Annual Report on AB 2766 Funds from Motor Vehicle Registration Fees for FY 2003-04

SYNOPSIS:

This report contains data on the AB 2766 Subvention Fund Program for FY 2003-04 as requested by CARB.

COMMITTEE:

Mobile Source, July 22, 2005, Reviewed

RECOMMENDED ACTION:

Approve the AB 2766 Subvention Fund Program report for FY 2003-04 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. AB 2766 language specifies that the 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 each vehicle registration fee dollar 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.

Local jurisdictions that receive these funds report 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 will be forwarded to CARB for Fiscal Year 2003-04 reporting.

Summary of Subvention Fund Program Report

This report accounts for the projects, financial expenditures, quantifiable emission reductions and associated cost-effectiveness implemented through the AB 2766 Subvention Fund Program for FY 2003-04. It also gives an update on the AQMD’s efforts in assisting local governments with managing their Subvention Fund programs.

AQMD staff provided technical assistance to local governments including one-on-one meetings, telephone calls and training sessions to guide them in determining project eligibility, emission reduction quantification and project reporting. All 158 (100%) cities and counties receiving Subvention Funds submitted annual project reports for FY 2003-04.

During FY 2003-04, local governments received $18.6 million from motor vehicle fees and spent slightly less than that on mobile source emission reduction projects ($18.3 million). Over $19 million or 70% of their ending balances that include unspent monies from prior years was earmarked for future projects. This is a slight decrease from FY 2002-03 where $20.3 million was earmarked for future projects. Expenditures in the Transportation Demand Management and Alternative Fuels/Electric Vehicles categories were the two highest spending categories as local governments have expanded their spending priorities to comply with employee rideshare programs and AQMD Clean Fleet Rules. Quantifiable emission reductions from projects implemented during FY 2003-04 reduced 4,366 tons (VOC, NOx, PM10 and CO/7) of emissions, as estimated using EMFAC 2002, Version 2.2; which has been steady over the last three years.

The 4,366 tons of emissions reduced from projects funded during FY 2003-04 had an overall average cost-effectiveness of $0.90 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 $4.24 per pound, which is relatively consistent with CARB’s reported statewide average cost-effectiveness for AB 2766 Subvention Fund projects of approximately $4 per pound. The cost-effectiveness of all project categories among South Coast cities and counties ranged from $0.04 - $161.77 per pound of emissions reduced.

Last year, the AQMD Board directed the staff to request that CARB establish a guideline requiring local government staff to highlight proposed AB 2766 expenditures to the City Council/Board of Supervisors level during their annual budget approval process. CARB’s response was that their existing "Criteria and Guidelines for the Use of Motor Vehicle Registration Fees" document addresses the concerns raised by AQMD’s Board.

Proposal

Approve the attached staff report for submittal to CARB.

Attachment (DOC* 861kb)

AB 2766 Funds Report from Motor Vehicle Registration Fees for FY 2003-04

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