VW Settlement - Nevada Mitigation Fund

Background

Partial Settlement and Consent Decrees have been finalized between the U.S. Justice Department, the Volkswagen Corporation and its subsidiaries (collectively, VW) regarding the installation and use of emission testing defeat devices in more than 590,000 turbocharged direct injection (“TDI”) 2.0 and 3.0 liter diesel engine vehicles sold and operated in the U.S. beginning in 2009.  In addition to other requirements, the Consent Decree requires VW to invest $2.925 billion into an Environmental Mitigation Trust to fund projects intended to offset the excess emissions of nitrous oxides (NOx) caused by the subject vehicles and in general reduce NOx emissions in areas more affected by this pollutant.  

Nevada expects to receive $24.8 million from the Environmental Mitigation Trust between 2017 and 2027 ($22.25 million from the 2.0 liter consent decree and $2.6 million from the 3.0 liter consent decree).  The Nevada Division of Environmental Protection (NDEP) was selected to be the lead agency on behalf of the state and is responsible for applying to become a Beneficiary of the Mitigation Trust fund.  The NDEP must then develop and submit a Beneficiary Mitigation Plan that specifies how these funds will be distributed to eligible projects in order to achieve the maximum air quality benefits for the people of Nevada.  The NDEP must also develop the administrative structure and fiscal elements of the statewide grant program.

The Nevada Advisory Committee on the Control of Emissions from Motor Vehicles (Inspection and Maintenance Committee or, I/M Committee) has served in an advisory capacity in developing a draft Beneficiary Mitigation Plan with the NDEP.  The I/M Committee formed a Subcommittee that met throughout 2017 to help develop a draft Beneficiary Mitigation Plan for Nevada.  This draft Plan establishes program goals and objectives that meet air quality needs and considers public input.

With this draft Plan, the NDEP is reaching out to the public, fleet owners, government officials, transportation organizations, and other potential beneficiaries for information and ideas about how the settlement money should be spent from among the 10 categories of Eligible Mitigation Actions.  The NDEP is also planning outreach efforts in Clark and Washoe counties, the two Nevada counties that bear a disproportionate share of the air pollution burden in the state.

Mitigation Actions Eligible for Funding

Trust funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel, alternative fueled or all-electric engines or vehicles.  Both private- and government-owned fleets will be eligible to receive funding which requires that the old vehicles and their engines be scrapped.  Appendix D-2 of the Environmental Mitigation Trust Agreement for State Beneficiaries provides detail on eligible equipment categories and model years, as well as the different percentages of the matching cost that recipients of the funding must provide.  The ten categories of Eligible Mitigation Actions are:

  • Class 8 local freight trucks and port drayage trucks;
  • Class 4-8 school buses, shuttle buses or transit buses;
  • Class 4-7 local freight trucks;
  • Pre-Tier 4 diesel switcher locomotives;
  • Repower or upgrade of eligible diesel-powered ferries and tugs;
  • Shorepower equipment for oceangoing vessels;
  • Repower or replacement of eligible diesel-powered airport ground support equipment;
  • Repower or replacement of eligible forklifts and port cargo handling equipment;
  • Light duty zero emission vehicle supply equipment (electric charging or hydrogen dispensing);
  • The Diesel Emission Reduction Act (DERA) option.

Timeline and Next Steps

On October 2, 2017, the United States Department of Justice filed the executed trust documents, thereby initiating the Trust Effective Date and all future deadlines.  In November 2017, the NDEP filed for Beneficiary status with the court and Wilmington Trust (the Trustee).  The Trustee now has 120 days from the Trust Effective Date to declare Nevada an eligible Beneficiary of the Trust Funds.  Following this, and at least thirty days before submitting our first funding request, the NDEP will submit Nevada’s Beneficiary Mitigation Plan to the Trustee.

The draft Beneficiary Mitigation Plan that was prepared with help from the I/M Committee is available to the public for review and comment (see below for a link to the draft Plan).  Public comments relating to the draft Beneficiary Mitigation Plan should be submitted to Joe Perreira (jperreira [at] ndep.nv.gov).

The NDEP has established a listserv email list for parties interested in following developments in the Nevada VW Fund program.  If you would like to join the list, please select “VW Settlement - Nevada Mitigation Fund” from the “Select a Newsletter” button at the bottom of this page.

Nevada’s Beneficiary Mitigation Plan

Here is the I/M Committee's prepared and adopted draft Beneficiary Mitigation Plan.

Previous Versions of the Plan and Public Comments

The I/M Subcommittee, in finalizing their draft Beneficiary Mitigation Plan, made a version of the plan available to the public for review and comment.  That draft, the I/M Subcommittee’s response to the comments that were received, and the comments that the I/M Subcommittee received are available below.

July 3, 2017 I/M Subcommittee draft Beneficiary Mitigation Plan

I/M Subcommittee Response to Comments

Public Comments received:

Below are the comments that the I/M Subcommittee received prior to releasing their July 3 draft Beneficiary Mitigation Plan.

Additional Information

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