BOARD MEETING DATE: February 1, 2008
AGENDA NO. 5

PROPOSAL:

Recognize Revenue from Daimler AG to Scrap High-Emitting Vehicles Under AQMD’s High-Emitter Repair or Scrap (HEROS) Program and Augment HEROS Program Funding Agreements

SYNOPSIS:

The Board originally approved a pilot feasibility study to identify high-emitting vehicles (HEVs) on February 3, 2006. As part of this program, remote sensing devices are used to identify potential HEVs and financial incentives are offered to voluntarily repair or scrap these vehicles. Daimler AG is requesting that the AQMD program be augmented with $1,000,000 to identify additional high-emitting vehicles. This action is to recognize revenue from Daimler AG in an amount not to exceed $1,000,000 for the purpose of repairing or scrapping high-emitting vehicles through the implementation of AQMD’s HEROS Program and augment HEROS Program funding agreements accordingly.

COMMITTEE:

Technology, January 18, 2008, Recommended for Approval

RECOMMENDED ACTION:

1. Recognize $1,000,000 from Daimler AG and place the funds into the Carl Moyer Fund AB 923 account to be used to repair or scrap additional high-emitting vehicles as part of the HEROS Program.
2. Authorize the Chairman, upon receipt of Daimler AG funding, to augment HEROS Program contracts in an amount not exceed $1,000,000 accordingly for the voluntary testing and subsequent vehicle repair, retirement or replacement of high-emitting vehicles from the Carl Moyer Fund AB 923 account.

 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

At its February 3, 2006 meeting, the Board approved the implementation of the HEROS Program for the purpose of generating emission reductions by repairing or scrapping high-emitting on-road light-duty vehicles. Basic program design elements consist of the following components: (1) implementing remote sensing technology to tentatively identify potential high-emitting vehicles (HEV); (2) contacting HEV owners to request voluntary submission of their vehicles for follow-up Smog-Check testing to verify HEV status; and (3) facilitate the voluntary repair or scrap of confirmed HEVs using monetary incentives of up to $500 per vehicle for repairs and up to $2,000 per vehicle for scrapping. The current budget for the scrapping component of the HEROS Program is $1 million.

Recently, Mercedes-Benz USA (Mercedes), a wholly-owned subsidiary of Daimler AG, submitted an unsolicited proposal to AQMD to provide a financial contribution of up to $1,000,000 towards the implementation of the HEROS Program. Mercedes is proposing to provide this funding so additional high-emitting vehicles may be retired as part of the HEROS Program. Disbursement of this funding would be in accordance with the current HEROS Program design, where an owner of a qualified HEV would be offered a $1,000 financial incentive for scrappage, and an additional $1,000 would be offered to HEV owners that qualify as low-income participants. Mercedes has indicated that this financial contribution is being made to demonstrate its commitment to the enhancement of California air quality.

Proposal

This action is to recognize $1,000,000 from Daimler AG and place the funds into the Carl Moyer Fund AB 923 account to be used to identify additional high-emitting vehicles as part of the HEROS Program. In addition, this action is to augment existing funding agreements for the HEROS Program.

Benefits to AQMD

The focus of the HEROS Program is to reduce the emissions impact of light-duty vehicles, which is a major category in the on-road emission inventory. The additional $1,000,000 is targeted to reduce at least 140,000 pounds of criteria pollutant emissions from the light-duty vehicle sector.

Resource Impacts

The total allocation approved for the HEROS Program is currently $4 million from the AB 923 Special Revenue Account under the Carl Moyer Fund. These funds have been allocated for HEV identification, HEV repair, and HEV scrappage. The Mercedes financial contribution towards vehicle scrappage would augment the currently allocated amount for this portion of the HEROS Program.