REPORT:
Annual Report on AB 2766 Funds from Motor Vehicle Registration Fees for FY 2004-05
SYNOPSIS:
This report contains data on the AB 2766 Subvention Fund Program for FY 2004-05 as requested by CARB.
COMMITTEE:
Mobile Source, July 28, 2006, Reviewed
RECOMMENDED ACTION:
Approve the AB 2766 Subvention Fund Program Report for FY 2004-05 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. Section 44223 of the Health & Safety Code, enacted by AB 2766, specifies that this motor vehicle registration fee be used “solely to reduce air pollution from motor vehicles 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 the first $4 of each vehicle registration fee 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. In 2004, a $2 surcharge was added pursuant to H& SC Section 44227 to provide a long-term source of funding for expansion of the Carl Moyer Memorial Air Quality Standards Attainment program. This additional funding will continue to drive early introduction of clean air technology such as cleaner vehicle engines, a Lower-Emission School Bus Program, and accelerated vehicle retirement and repair programs.
Former Health & Safety Code Section 44247 (repealed 2004) required local agencies imposing vehicle registration fees for air pollution programs to report to CARB on their use of the fees, and the results of programs funded by the fees. CARB continues to request this information. The reporting by local governments follows the guidelines and methodology specified by CARB.
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 2004-05. 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 cities and counties receiving Subvention Funds submitted annual project reports for FY 2004-05.
During FY 2004-05, local governments received almost $19 million from motor vehicle fees and spent approximately $1.4 million more than that on mobile source emission reduction projects ($20.3 million) spending down an accumulated balance of $28,105,843 from prior years. Over $19 million or 72% of their ending balances that includes unspent monies from prior years were earmarked for future projects. There was no change from FY 2003-04 where $19 million was also 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. However, Alternative Fuels/Electric Vehicles expenditures were considerably higher than FY 2003-04, an additional $1.1 million, reflecting an increase in purchases of CNG and Hybrid Electric vehicles. Quantifiable emission reductions from projects implemented during FY 2004-05 reduced 4,421 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 4,421 tons of emissions reduced from projects funded during FY 2004-05 had an overall average cost-effectiveness of $1 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 $4.30 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 $0.05 - $43.33 per pound of emissions reduced.
In past years, the AQMD Board directed staff to request that CARB establish a guideline requiring local government staff to highlight proposed AB 2766 expenditures to their City Council/Board of Supervisors 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.
Subsequently, in May 2006, AQMD Board decided to forward copies of each jurisdiction’s FY 2004-05 report to their county’s and city’s respective city manager and mayor or county supervisor to increase awareness of the decision-making process for subvention funds and enlist their support on identifying and implementing more quantifiable and cost effective projects in future years.
In accordance with H& S Code 44244.1, any agency receiving AB 2766 fee revenues is subject to a program or funding audit conducted by an independent auditor selected by the AQMD. Further, in response to Governing Board concerns raised regarding the pooling of AB 2766 funds between local governments and Councils of Governments, a new financial reporting element was added for the Council of Governments who received AB 2766 subvention funds from member cities and counties to provide project descriptions and fund expenditure details.
Proposal
Approve the attached staff report for submittal to CARB.
Attachment (DOC 724kb)
AB 2766 Funds Report from Motor Vehicle Registration Fees for FY 2004-05
|
