Thursday, August 8, 2013

It's That Time of Year Again...Money is in The Air!!!

Proposition 1B Grant applications for truck replacement to be released August 26, 2013

In 2006, California voters approved several bond propositions which included 1 Billion Dollars that was earmarked for emissions reductions projects related to goods movement. In its fourth and final funding cycle, the Proposition 1B program has so far awarded $587 Million for truck replacement and other emission reductions projects dedicated to the goods movement transportation sector.
Over the past solicitations, the bulk of the funds have gone to replace Heavy Duty Diesel (HDD) trucks and this final allocation is no exception. Collectively, the six Air Districts participating in the program requested over $550 Million, mostly for truck replacement projects. However, there is only $154 million available for the entire state, indicating that the issuing Air Districts are seeing much more demand than the available funds can cover.

Fleets all over the state are already feeling the pinch of the regulatory regime and time is running out to utilize these public incentive monies for replacement. Tens of thousands of nclass 7 and 8  truck operators need to upgrade by the end of this year and thousands more are on the brink of non-compliance. Regardless of the unmet need, many operators will not qualify for the funds because of haul type, location or compliance status. Only fleets that are CARB compliant and utilize vehicles for Goods Movement are eligible.

Complicating an already complicated problem is the fact that in order to receive grant money, the fleet must demonstrate CARB compliance. If a fleet is out of compliance for 2013 or cannot demonstrate compliance for 2014 they will not be eligible for the funds. This is because all incentive fund projects in California must be surplus emission reductions above and beyond what is currently required by law. That means that public money does not pay for compliance. So fleets must achieve compliance, demonstrate compliance and maintain compliance to access grant funds.

Sadly, many fleets will not be able to achieve the 90% compliance rate required by the phase in option under the On-Road truck rule in 2014.  Adding to the conundrum is that single truck operators are mostly ineligible because their trucks are out of compliance in 2014 or they are too old. Although some single truck operators may qualify if they are operating trucks equipped with 1994-1995 engines, there is a limited number of  these vehicles that will be eligible; leaving many of those who would have applied for funding out in the cold, possibly leaving the districts with money to spare. 
With 100% compliance right around the corner in 2016, fleets who act now may have the remainder of their fleet compliance needs partially subsidized by public money. Although not the intention of the goods movement funds, the mere timing will help fund compliance for many fleets through 2022.

The program opens August 26, 2013 across the state. It will be a 45 day application period.   Visit for more information.