California VW Mitigation Trust

AKA: How to Get a Brand-New, All-Electric, Zero-Emission Bus for Free

Program Overview & Key Requirements

Eligible Applicants

1. Eligible Applicants are owners of transit buses, school buses and shuttle buses.

2. Indian Tribes.

3. Agencies that are the lessors that lease or rent applicable transit, school and shuttle buses to third parties may apply, however, additional requirements must be met. These requirements are specified in Vehicle Leasing or Rental Agencies

Value of Grant

Up to $400,000 grant at time of purchase of new zero-emission bus

Not a Loan: Does not have to be repaid
Up to 75% of purchase price
- including taxes and accessories
Cannot combine/"stack" with CA HPIV program
Can "stack" with other sources of funding

Eligible Old Vehicle

Fuel-burning bus
Engine model year 2006 or older for school bus; 2009 or older for shuttle/transit bus
GVWR 14,001 pounds or greater
Compliance w/ CA Truck and Bus Regulation (NOT REQUIRED for School Bus
Current CHP 292 Inspection if School Bus
Compliance certificate from CARB TRUCRS database.

New Bus Requirements

New Vehicle
- As defined in California Vehicle Code Section 430.
Zero-Emission Transit, Shuttle or School Bus
- Hydrogen fuel cell and battery electric-powered vehicle technologies are eligible projects.
- Eligible buses must be listed as an Eligible Vehicle for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) and listed on the HVIP website at www.californiahvip.org/.
- SJVAPCD may consider other zero emission technologies for eligibility on a case by case basis, subject to approval by the California Air Resources Board (CARB)
- Used vehicles (including vehicles used by dealers, manufacturers, or other entities or for demonstration purposes) are not eligible.
GVWR 14,001 pounds or greater
CARB certified
- The manufacturer must have obtained CARB approval/certification of the vehicle model.
HVIP eligible vehicle (See List)
- Stacking VW Mitigation Trust Funds with HVIP funds is prohibited.
CHP Certification
- Current CHP 292 certification is required for the new school bus.
Must operate bus in California for 3 years
New bus may be sold no more than once in first 3 years of purchase
Must "Scrap" old bus
- Within 60 days of purchase of new bus

About the VW Trust (Funding Available Now)

On October 25, 2016 and May 17, 2017, the United States District Court for the Northern District of California approved Partial Consent Decrees (Consent Decrees) as part of the settlement agreements with Volkswagen (VW) for their use of illegal defeat devices in certain 2.0-liter and 3.0-liter diesel vehicles. Appendix D (the Environmental Mitigation Trust) enumerated in the first Consent Decree requires VW pay $2.7 billion, $423 million of which for the State of California, into an Environmental Mitigation Trust to fund projects to reduce emissions of NOx caused by the subject vehicles. In March 2017, the Court appointed Wilmington Trust, N.A. as Trustee. Past and future excess NOx emissions emitted from Volkswagen vehicles are intended to be mitigated by the actions prescribed in the Environmental Mitigation Trust.

The California Air Resources Board (CARB) has been designated as lead agency to act on the State’s behalf in implementing California’s allocation of the VW Environmental Mitigation Trust. As required by the Consent Decree, CARB developed a Beneficiary Mitigation Plan (Plan) through an extensive public process. The Plan was approved in May 2018, and CARB reported it to the Trustee, Wilmington Trust, N.A., on June 28, 2018. The Plan describes the eligible mitigation actions from the list specified in the Consent Decree that will be funded from the State’s allocation of the Trust.

The Plan allocates $360 million of California’s Trust to statewide funding opportunities in five project categories that are focused mostly on “scrap and replace” projects for the heavy-duty sector. The categories and allocation amounts were determined with public input and are based on technology availability, the market demand as demonstrated by other funding programs, and the ability of the project funding categories to fully mitigate the excess NOx caused by the subject VW diesel vehicles.

Implementation of the Plan is now underway; solicitations for the five project categories are being developed and expected to be available beginning fall 2019. The three largest air districts in the State: the Bay Area Air Quality Management District, the San Joaquin Valley Air Pollution Control District, and the South Coast Air Quality Management District will serve as Statewide administrators for the program.