BOARD MEETING DATE: July 11, 2008
AGENDA NO. 17

RECOMMENDED ACTIONS:

Authorize the transfer of funds identified below to support directly-related activities for each Program:

1. $600,000 from the Clean Fuels Program Fund to the FY 2008-09 Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account and
2. $300,000 from the administrative portion of the Carl Moyer Program AB 923 Fund to the FY 2008-09 Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account.
    

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Achieving federal and state clean air standards in Southern California will require emission reductions from mobile and stationary sources beyond those available from current technologies. To meet the needs of the AQMP for cleaner fuels and engine control technologies, the AQMD adopted a Clean Fuels Program in 1988 and established the Technology Advancement Office to administer the program. Concurrently, the State Legislature authorized funds for the AQMD’s Clean Fuels Program and subsequently renewed this funding authorization in 1993. On June 8, 1999, SB 98 (Alarcón) extended the Clean Fuels Program funding mechanism for an additional five years, added administrative requirements, and specified the creation of and goals for the Clean Fuels Advisory Group. The Clean Fuels Program was reauthorized in 2003 via SB 288 (Sher) extending the program to January 1, 2010.

The AQMD Clean Fuels Program is implemented as a public-private partnership in conjunction with private industry, technology developers, academic institutions, research institutions, and government agencies. This public-private partnership has enabled the AQMD to leverage its public funds with outside investment in a ratio, on average, of more than $4 of outside funding to every dollar of AQMD funding. The Clean Fuels Program sponsors the development and demonstration of clean-fuel vehicles and technologies through a contract process. At any given time, Technology Advancement has about 85 active Clean Fuels Program contracts. Over a period of 20 years, Technology Advancement has administered over 900 technology contracts.

Likewise, achieving federal and state clean air standards in Southern California will require emission reductions from mobile sources beyond those required by rules and regulations. To achieve this goal the State Legislature authorized availability of continuous funding for the Carl Moyer Program with the passage of SB 1107 and AB 923. The Carl Moyer Program provides incentive funding for the purchase of lower-emitting technologies to reduce emissions from heavy-duty mobile sources. AQMD’s annual share of funds is approximately $34 million from SB 1107 allocated by CARB, and approximately $24 million from AB 923, transferred to AQMD from the DMV on a monthly basis. The AQMD has provided funding for more than 3,000 lower-emitting diesel and alternative fuel heavy-duty engines and equipment and 535 CNG school buses replacing pre-1987 diesel buses from SB 1107 and AB 923 funds.

The AQMD has been directing revenues from the state-mandated Carl Moyer Program to its established Carl Moyer Program Fund rather than to an account within the AQMD’s General Fund budget. This is done to clearly delineate the Carl Moyer Program revenues, which have statutory constraints imposed on their use from the AQMD’s other revenues and its general budget. Both SB1107 and AB923 allow up to five percent of the revenues to be used for administrative and outreach activities for the proper and timely implementation of the program. In order to support these administrative and outreach activities directly related to the Carl Moyer Program, it is necessary to transfer a portion of the administrative funds from the Carl Moyer Program AB 923 Fund to the General Fund. This will allow management flexibility and expediency in addressing program implementation issues related to the Carl Moyer Program.
 

Proposal

Clean Fuels Program

Beginning in FY 1999-00, revenues from the state-mandated Clean Fuels Program have been directed to the Clean Fuels Fund rather than to an account within the AQMD’s General Fund budget. This was done to clearly delineate the Clean Fuels Program revenues, which have statutory constraints imposed on their use, from the AQMD’s other revenues and its general budget. Periodically, funds are transferred from the Clean Fuels Fund to the General Fund to support AQMD activities directly related to the Clean Fuels Program. The proposed use of those funds is to facilitate support for various activities related to achieving the objectives of the Clean Fuels Program. These activities are expected to include:
 

Technical Assistance

Technical assistance is needed to provide source testing services and testing and analyses of emissions with and without add-on controls to include, but not limited to, particulate matter, air toxics, and other pollutants from new and existing liquid fuels, natural gas, and fuel blends used in alternative fuel motor vehicles.
 

Expert Consultation

Consultants provide expertise on new and emerging technologies, development of emission control technologies, and analyses of demonstration projects for alternative fuels, fuel cells, hydrogen infrastructure, microturbine technology, hybrid electric vehicles, renewable energy, and particulate control technology. Assignments for these consultants are expected to be short-term and time sensitive.
 

Public Outreach & Conference Sponsorship

AQMD is often asked to provide support for technical conferences and other outreach activities related to the Clean Fuels Program and the Technology Advancement Office. These conferences provide opportunities for the AQMD to inform the public, communicate its programs to broad audiences, and receive input from public and private organizations. Public outreach is important for commercialization of new technologies.
 

Advanced Technology Vehicle Leases

In order to showcase and demonstrate advanced, low-emission technologies, the AQMD often leases such clean vehicles to educate public and private organizations on the benefits of advanced technologies, as well as provide valuable in-use test data to the manufacturers.
 

Administrative Costs

Funding is also required to support the operation of the Clean Fuels Program; these costs include postage and public notice advertisements for RFPs, Program Announcements, and other project-related mailings.

Carl Moyer Program

In order to maintain the level of support to the Carl Moyer Program, especially with respect to expert consultations and technical assistance, it is necessary to transfer the Carl Moyer Program AB 923 funds to the General Fund Budget as early as possible in the new fiscal year. The proposed use of those funds is to facilitate support for various activities related to the implementation of the Carl Moyer Program. These activities are expected to include:
 

Public Outreach & Conference Sponsorship

During each funding cycle, the AQMD conducts several equipment-specific as well as general workshops. AQMD staff participates in conferences and performs extensive outreach activities to enhance public awareness of the Carl Moyer Program. Staff assists potential applicants to access funding opportunities in all eligible equipment categories. AQMD also participates in conferences to communicate incentive funding opportunities to broad audiences and to inform the public about application processes. Public outreach also plays an important role in commercialization of new technologies.
 

Technical Assistance

Technical assistance is needed for evaluation of different types of vehicles and equipment to determine their eligibility and the amount of incentive funding that can be provided, in compliance with the requirements of the Carl Moyer Program guidelines and applicable rules and regulations.
 

Expert Consultation

Consultants provide expertise on availability of new and emerging technologies, and commercialization potential of lower-emitting vehicles and related infrastructure. Assignments for these consultants are expected to be short-term and time sensitive.
 

Administrative Costs

Funding is also required to support the operation of the Carl Moyer Program. These costs include postage and public notice advertisements for RFPs, Program Announcements, and other project-related mailings.
 

Resource Impacts

The proposed action is to transfer $600,000 from the Clean Fuels Fund to the FY 2008-09 Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account to support Clean Fuels Program activities. Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.

The proposed action is to transfer $300,000 from the Carl Moyer Program AB 923 Fund to the FY 2008-09 Budget of Science & Technology Advancement, Services and Supplies Major Object, Professional and Special Services Account to support Clean Fuels Program activities. Sufficient funds are available from the Carl Moyer Program AB 923 Fund.