## Report on Re ductions Achieved from I nc entive-Based Emission Re duction Meas ures in the San Joaquin Valley

AP PE NDIX D: Prop 1B G oo ds Movement – 2008 Pr og ram Guidelines for I mp lementati on

Release D ate: Se pt em ber 22, 20 14 He ari ng Dat e: Octo ber 2 3

, 2 014



# Calif or ni a E nvironme nt a l Protection Agen cy 

# Air Resources Board

# P ROPOSITION 

# 1B:

G OODS 

# M OVEMENT 

# E MISSION 

# R EDUCTION 

# P ROGRAM



# FINAL GUIDELINES FOR IMPLEMENTATION Adopted February 28, 2008[this page intentionally blank]DOCUMENT AVAILABILITY

Electronic copies of this document and related mate rials can be found at: http://www.arb.ca.gov/gmbond . Alternatively, paper copies may be obtained from the Board’s Public Information Office, 1001 I Street, 1 st Floor, Visitors and Environmental Services Center, Sacramento, California, 95814, (91 6) 322-2990.

For individuals with sensory disabilities, this doc ument is available in Braille, large print, audiocassette or computer disk. Please contact ARB 's Disability Coordinator at (916) 323-4916 by voice or through the California R elay Services at 711, to place your request for disability services. If you are a pers on with limited English and would like to request interpreter services, please contact ARB's Bilingual Manager at (916) 323-7053.

DISCLAIMER

This report has been reviewed by the staff of the A ir Resources Board and approved for publication. Approval does not signify that the co ntents necessarily reflect the views and policies of the Air Resources Board, nor does m ention of trade names or commercial products constitute endorsement or recom mendation for use.ARB CONTACT Mr. Douglas Ito, Manager Goods Movement Strategies Section Planning and Technical Support Division

Air Resources Board P.O. Box 2815 Sacramento, California 95812

Information Line : (916) 44-GOODS (444-6637)

Email: gmbond@arb.ca.gov Website : http://www.arb.ca.gov/gmbond

ARB CONTRIBUTORS Primary Author: Douglas Ito Co-authors: Matthew Botill, Bridget Brown, Nicole Dolney, Jim Fischer, P.E., Chris Halm, Ph.D., Ajay Manga t, Hurshbir Shahi, Luis Woodhouse, Ph.D.

Andy Alexis Michael Benjamin, D.Env. Tony Brasil Joe Calavita Grant Chin Dan Donohoue Judith Friedman John Gruszecki, P.E. Harold Holmes Mike Jaczola Kathy Jaw, Ph. D Deborah Kerns, Esq. Rachel Kirlis Leslie Krinsk, Esq. Mike Miguel Cherie Rainforth Todd Sax, D. Env. Todd Sterling Judy Tanimoto Mike Tollstrup Floyd Vergara, Esq., P.E. Mike Waugh Bill Welty Erik White Lisa Williams Todd Wong Seungju Yoon, Ph.D.

Reviewed and Approved by: Cynthia Marvin, Assistan t Division Chief, Plan ning and Technical Support Division

ACKNOWLEDGMENTS This proposal would not have been possible without the support of Jack Kitowski, Lucina Negrete, Heather Arias, and John Kato of ARB ’s Carl Moyer team who so generously shared their time to help us launch this new program.

We would like to recognize the staff of the Bay Are a Air Quality Management District, the Imperial Air Pollution Control District, the Sa cramento Metropolitan Air Quality Management District, the San Diego Air Pollution Co ntrol District, the San Joaquin Valley Air Pollution Control District, and the Sout h Coast Air Quality Management District for offering their “on the ground” experie nces in running air quality incentive programs.Table of Contents, page 1



### Table of Contents

I. Overview

................................................... ................................................... ........... 1 A. Introduction

................................................... ................................................... ... 1 B. Authority

................................................... ................................................... ........ 2 1. Proposition 1B

................................................... ............................................ 2 2. Senate Bill 88 and Assembly Bill 201

................................................... ....... 2 3. Governor Schwarzenegger’s directives

................................................... ... 9 C. Definitions

................................................... ................................................... ..... 9

II. ARB Program Administration

................................................... .......................... 14 A. Program Guidelines

................................................... ...................................... 14 B. Program Funding Targets and Priorities

................................................... ..... 15 1. Trade corridor funding targets

................................................... ................ 15 2. Source category funding targets

................................................... ............ 16 3. Priorities for FY2007-08 funds

................................................... ................ 16 C. Project Specifications and Emissions

................................................... ......... 17 1. Project specifications for each funding cycle .......................................... 17 2. Quantifying project benefits

................................................... .................... 19 a) Pollutants

................................................... .................................................. 1 9 b) Project benefits calculators

................................................... ....................... 20 D. Application Process for Local Agency Projects ............................................ 20 1. Notice of funding availability

................................................... .................. 20 2. Registration of local public entities

................................................... ........ 20 3. ARB review of applicant and project eligibility ........................................ 21 a) Completeness

................................................... .......................................... 21 b) Qualification as an applicant

................................................... ..................... 22 c) Consistency with legal and equipment project specif ications ...................... 22 d) Consistency with air quality plans for goods moveme nt .............................. 22 e) Availability of full funding

................................................... .......................... 22 f) Project schedule and milestones

................................................... .............. 22 g) Data to determine air quality benefits and cost-eff ectiveness ...................... 23 h) Local agency project implementation demonstration ................................... 23 4. Evaluation of local agency capability to implement the project scope .. 24 5. Match funding

................................................... ........................................... 24 a) Carl Moyer program

................................................... ................................. 24 6. Competitive ranking of local agency projects .......................................... 25 a) Emission reduction score

................................................... ......................... 25 b) Cost-effectiveness and match score

................................................... ........ 26 c) Competitive ranking

................................................... .................................. 27 7. Public workshops on eligible local agency projects ............................... 28 8. Recommendations for funding local agency projects ............................. 28 a) Consideration of available funds and funding priori ties ............................... 28 b) Funding level for local agency project proposals ......................................... 28 9. Public hearing and Board action

................................................... ............ 29 10. Local agency project grant agreement

................................................... .. 29 a) Standard grant agreement provisions

................................................... ...... 30Table of Contents, page 2

b) General Program provisions

................................................... ..................... 30 c) Source category-specific elements

................................................... ........... 31 11. $25 million in early grants for FY2007-08 funds ....................................... 32 E. ARB Program Oversight

................................................... ............................... 32 1. ARB obligations to local agencies

................................................... ......... 32 2. ARB expenditures

................................................... .................................... 33 a) Administration funds

................................................... ................................. 33 b) Equipment project costs

................................................... ........................... 34 3. Earned interest

................................................... ......................................... 35 4. Ongoing evaluations

................................................... ................................ 35 a) Ongoing evaluations of local agency projects ............................................. 35 b) Ongoing evaluations of equipment projects ................................................. 36 5. Auditing

................................................... ................................................... .. 38 a) ARB audits of local agency projects

................................................... ......... 38 6. ARB reporting

................................................... ........................................... 41 a) Public website

................................................... .......................................... 41 b) Annual community meetings

................................................... .................... 41 c) Updates to Department of Finance

................................................... ........... 41 d) ARB annual report

................................................... .................................... 42 7. Local agency non-performance

................................................... .............. 42 a) Non-performance finding

................................................... .......................... 42 b) Local agency appeal process

................................................... ................... 43 c) Remedies for non-performance

................................................... ................ 43

III. Local Agency Project

................................................... .................................... 46 A. Local Public Entity Registration

................................................... ................... 46 B. Local Agency Project Application Packet

................................................... ... 47 1. Legal restrictions

................................................... ..................................... 47 a) Environmental mitigation

................................................... .......................... 47 b) Railroad agreements

................................................... ................................ 48 c) Existing ARB regulations

................................................... .......................... 48 d) Upcoming ARB Regulations

................................................... ..................... 49 2. Project alternatives for local agencies

................................................... ... 49 a) Technology alternatives

................................................... ............................ 50 b) Project implementation approaches and contractors ................................... 51 c) Procedure/process alternatives

................................................... ................ 52 d) Geographic operations

................................................... ............................. 52 e) Ineligible project alternatives

................................................... .................... 54 3. Completed application

................................................... ............................. 55 a) General local agency information

................................................... ............. 55 b) Local agency project proposal

................................................... .................. 56 c) Air quality benefits

................................................... .................................... 56 d) Project schedule

................................................... ....................................... 57 e) Funding demonstration

................................................... ............................. 57 f) Staff resources

................................................... ......................................... 58 g) Local agency project implementation demonstration ................................... 59 4. Local agency board/commission resolutions .......................................... 60 C. Local Agency Project Grant Agreement

................................................... ...... 60Table of Contents, page 3

D. Local Agency Project Implementation Requirements ................................... 61 1. Community and public participation

................................................... ...... 61 a) Community meetings

................................................... ................................ 61 b) Public and interested stakeholder participation ........................................... 61 c) Public website

................................................... .......................................... 61 2. Equipment project marketing tools

................................................... ........ 62 a) Marketing tools

................................................... ......................................... 62 b) Outreach to independent truck owner/operators ......................................... 62 c) Information on truck efficiency upgrades

................................................... .. 62 d) Outreach to small businesses for infrastructure con struction ...................... 63 3. Local agency solicitation of equipment projects ..................................... 64 4. Review of equipment project applications ................................................ 64 5. Match funding for equipment projects

................................................... ... 65 6. Competitive ranking and selection of equipment proj ects ...................... 65 a) Emission reduction score

................................................... ......................... 66 b) Cost-effectiveness and match score

................................................... ........ 66 c) Competitive ranking

................................................... .................................. 67 d) Application of available funding

................................................... ................ 67 e) Equipment project backup list

................................................... ................... 67 7. Compliance check

................................................... .................................... 67 8. Equipment project pre-inspections

................................................... ........ 68 9. Notifications to equipment owners

................................................... ........ 69 10. Equipment project contracts

................................................... ................... 69 a) Standard contract provisions

................................................... .................... 70 b) General Program provisions

................................................... ..................... 70 c) Source category-specific elements

................................................... ........... 71 11. Tax reporting

................................................... ............................................ 72 12. Provisions for lease-to-own programs

................................................... ... 72 13. Equipment project scrap requirements

................................................... .. 73 14. Equipment project post-inspections

................................................... ...... 77 15. Local agency requests to ARB for grant funds ........................................ 81 16. Local agency non-performance provisions .............................................. 82 E. Obligations, Expenditures, and Earned Interest ............................................ 82 1. Local agency obligation of funds to equipment owner s ......................... 82 2. Local agency expenditures on equipment projects ................................. 82 a) Expenditure deadlines for equipment projects ............................................. 82 b) Equipment project purchase restrictions

................................................... ... 83 c) Invoice payments (reimbursements)

................................................... ........ 83 d) Direct payment to vendor

................................................... ......................... 84 3. Earned interest

................................................... ......................................... 84 a) Calculation of earned interest

................................................... ................... 84 b) Reporting requirement for earned interest

................................................... 85 c) Earned interest expenditure provisions

................................................... .... 85 F. Ongoing Local Agency Evaluations of Equipment Proje cts ......................... 86 G. Local Agency Reporting Requirements

................................................... ...... 86 1. Quarterly data updates

................................................... ............................ 86 2. Semi-annual report

................................................... .................................. 87 3. Local agency project completion report

................................................... 88Table of Contents, page 4

IV. General Equipment Project Requirements

................................................... .. 90 A. Ownership Requirements

................................................... ............................. 90 B. Third Party Applications

................................................... ............................... 90 C. Equipment Project Specifications

................................................... ................ 90 D. Equipment Project Application Requirements ............................................... 90 1. Equipment project information

................................................... ............... 90 2. Equipment project schedule

................................................... ................... 91 3. Case-by-case equipment projects

................................................... .......... 91 4. Disclosures

................................................... ............................................... 91 5. Equipment project funding demonstration ............................................... 92 6. Equipment owner signature

................................................... .................... 92 E. Equipment Project Contract Requirements

................................................... 92 F. Equipment Sales Requirements

................................................... ................... 93 G. Equipment Project Non-Performance

................................................... .......... 93

APPENDIX A Trucks Serving Ports and Intermodal Rai l Yards ............................A-1 A. Equipment Project Specifications

................................................... ...............A-1 B. Major Milestones for Equipment Project Completion ..................................A-4 C. Recordkeeping Requirements

................................................... .....................A-4 D. Annual Reporting Requirements

................................................... .................A-4 E. Ongoing Evaluations and Audits

................................................... ................A-4 F. Application Information

................................................... ...............................A-5 1. General contact information

................................................... ..................A-5 2. Option (1): retrofit

................................................... ..................................A-5 a) Current equipment and activity information ................................................A-5 b) Proposed equipment project information

................................................... .A-6 3. Option (2): repower

................................................... ................................A-6 a) Current equipment and activity information ................................................A-6 b) Proposed equipment project information

................................................... .A-7 4. Option (3): replacement

................................................... .........................A-7 a) Current equipment and activity information ................................................A-7 b) Proposed equipment project information

................................................... .A-8

APPENDIX B Other Heavy Duty Diesel Trucks

................................................... ....B-1 A. Equipment Project Specifications

................................................... ...............B-1 B. Major Milestones for Project Completion

................................................... ...B-5 C. Recordkeeping Requirements

................................................... .....................B-5 D. Annual Reporting Requirements

................................................... .................B-5 E. Ongoing Evaluations and Audits

................................................... ................B-6 F. Application Information

................................................... ...............................B-6 1. General contact information

................................................... ..................B-6 2. Option (1): retrofit

................................................... ..................................B-6 a) Current equipment and activity information ................................................B-6 b) Proposed equipment project information

................................................... .B-7 3. Option (2): repower

................................................... ................................B-7 a) Current equipment and activity information ................................................B-7 b) Proposed equipment project information

................................................... .B-8Table of Contents, page 5

4. Option (3): replacement

................................................... .........................B-8 a) Current equipment and activity information ................................................B-8 b) Proposed equipment project information

................................................... .B-9 5. Option (4): three-way truck transaction ..................................................B -9 a) TRUCK A: Current equipment and activity information ..............................B-9 b) TRUCK B: Current equipment and activity information ............................B-10 c) Proposed equipment project information ..................................................B -10

APPENDIX C Locomotives

................................................... ................................... C-1 A. Equipment Project Specifications

................................................... .............. C-1 B. Major Milestones for Project Completion

................................................... .. C-2 C. Recordkeeping Requirements

................................................... .................... C-2 D. Annual Reporting Requirements

................................................... ................ C-3 E. Ongoing Evaluations and Audits

................................................... ............... C-3 F. Application Information

................................................... .............................. C-3 1. General contact information

................................................... ................. C-3 2. Option (1): switcher locomotive

................................................... ........... C-4 a) Current equipment and activity information ............................................... C-4 b) Proposed equipment project information

................................................... C-4 3. Option (2): line-haul locomotive

................................................... .......... C-5 a) Current equipment and activity information ............................................... C-5 b) Proposed equipment project information

................................................... C-6

APPENDIX D Shore Power

................................................... ................................... D-1 A. Equipment Project Specifications

................................................... .............. D-1 B. Major Milestones for Project Completion

................................................... .. D-3 C. Recordkeeping Requirements

................................................... .................... D-3 D. Reporting Requirements

................................................... ............................. D-3 1. Annual reporting for grid based power

................................................... D-3 2. Annual reporting for non-grid based power (every 1, 000 hours) .......... D-4 E. Ongoing Evaluations and Audits

................................................... ............... D-4 F. Application Information

................................................... .............................. D-4 1. General contact information

................................................... ................. D-4 2. Option (1): grid-based shore power

................................................... .... D-5 a) Proposed equipment project information

................................................... D-5 3. Option (2): non-grid shore power

................................................... ........ D-5 a) Proposed equipment project information

................................................... D-5

APPENDIX E Commercial Harbor Craft

................................................... ................E-1 A. Equipment Project Specifications

................................................... ...............E-1 B. Major Milestones for Project Completion

................................................... ...E-2 C. Recordkeeping Requirements

................................................... .....................E-2 D. Reporting Requirements

................................................... ..............................E-3 E. Ongoing Evaluations and Audits

................................................... ................E-3 F. Application Information

................................................... ...............................E-3 1. General contact information

................................................... ..................E-3 2. Options (1) and (2): repowers

................................................... ...............E-4 a) Current equipment and activity information ................................................E-4Table of Contents, page 6

b) Proposed equipment project information

................................................... .E-4 3. Options (1) and (2): replacements

................................................... ........E-5 a) Current equipment and activity information ................................................E-5 b) Proposed equipment project information

................................................... .E-6

APPENDIX F Cargo Handling Equipment

................................................... .............F-1 A. Equipment Project Specifications

................................................... ...............F-1 B. Major Milestones for Project Completion

................................................... ...F-2 C. Recordkeeping Requirements

................................................... .....................F-2 D. Reporting Requirements

................................................... ..............................F-2 E. Ongoing Evaluations and Audits

................................................... ................F-2 F. Application Information

................................................... ...............................F-2 1. General contact information

................................................... ..................F-3 2. Option (1): energy storage systems

................................................... .....F-3 a) Current equipment and activity information ................................................F-3 b) Proposed equipment project information

................................................... .F-3

APPENDIX G Truck Stop/Distribution Center Electrif ication ............................... G-1 A. Background

................................................... .................................................. G -1 B. Analysis

................................................... ................................................... ..... G-1 C. Equipment Project Specifications

................................................... .............. G-2 D. Major Milestones for Project Completion

................................................... .. G-3 E. Recordkeeping Requirements

................................................... .................... G-3 F. Reporting Requirements

................................................... ............................. G-3 G. Ongoing Evaluations and Audits

................................................... ............... G-4 H. Application Information

................................................... .............................. G-4 1. General contact information

................................................... ................. G-4 2. Option (1): electrification infrastructure ................................................. G- 4 a) Current equipment and activity information ............................................... G-4 b) Proposed equipment project information

................................................... G-5

APPENDIX H: Early Grants

................................................... ................................... H-1Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chapter I: Overview 1 February 2008 

## I. Overview

A. Introduction

Emissions from the diesel engines in trucks, locomo tives, ships, harbor craft, and cargohandling equipment contribute to local, regional, a nd global air pollution. The diesel pollution from current goods movement operations gr eatly impacts the health of community residents near ports, rail yards, distrib ution centers, and roads with high truck traffic. Diesel emissions are also a major c ause of the high regional ozone and fine particle levels that harm millions of Californ ians today.

Goods movement sources contribute to each trade cor ridor’s air pollution challenges. The Los Angeles/Inland Empire region has the larges t concentration of goods movement facilities (like ports and rail yards), wi th high near source health risks and high levels of regional ozone and fine particulate (PM2.5) pollution. In the Central Valley, the facilities are less concentrated, but t here is relatively more through truck and rail traffic that contribute to the region’s harmfu l ozone and PM2.5 levels. In the Bay Area, regional ozone and PM2.5 levels are much lowe r, but truck, port, and rail yard activity adjacent to neighborhoods contributes to h igh localized health risks. In the San Diego/Border region, trucks and operations at the p ort contribute to regional ozone and PM2.5 pollution above the State standards.

Proposition 1B authorizes the Legislature to approp riate $1 billion in bond funding to the Air Resources Board (ARB or Board) to quickly reduc e air pollution emissions and health risk from freight movement along California’ s priority trade corridors. The State Fiscal Year (FY) 2007-08 budget includes the first installment of $250 million, plus implementing legislation via Senate Bill 88 (Chapte r 181, Statutes of 2007) that created the Goods Movement Emission Reduction Program (Prog ram). Assembly Bill 201 (Chapter 187, Statutes of 2007) includes a minor cl arification. SB 88 requires ARB to adopt Program Guidelines to ensure the Program achi eves the statutory objectives.

The implementing statutes direct ARB to maximize th e emission reduction benefits and achieve the earliest possible health risk reduction in communities heavily impacted by goods movement. This Program will supplement regul atory actions and other incentives to cut diesel emissions. By statute, th e Program can only fund emission reductions “not otherwise required by law or regula tion.” Key pollutants targeted by the Program include diesel particulate matter (diesel P M), an air toxic, and nitrogen oxides (NOx) that contribute to formation of both PM2.5 an d ozone. The projects funded under the Program will also provide co-benefits by reduci ng greenhouse gas and black carbon emissions that contribute to climate change.

ARB will award grants to fund projects proposed by local agencies that are involved in freight movement or air quality improvements associ ated with goods movement activities. Examples of local agencies include air pollution control and air quality management districts (air districts), ports, and re gional transportation agencies in the trade corridors. The local agencies will then be r esponsible for providing financial incentives to owners of equipment used in freight m ovement to upgrade to cleanerProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chapter I: Overview 2 February 2008 technologies, consistent with Program Guidelines ad opted by ARB. Bond funds will flow via grants from ARB to local agencies, then to equipment owners via contracts or other binding agreements with those local agencies. At both steps, there is competition based on the projected emission reductions and redu ctions per State dollar invested to ensure the most beneficial projects are funded.

ARB staff developed these Proposition 1B: Goods Movement Emission Reduction Program Guidelines for Implementation (Guidelines) in consultation with stakeholders, including: air districts, metropolitan planning or ganizations, port authorities, shipping lines, railroad companies, trucking companies, harb or craft owners, freight distributors, terminal operators, local port community advisory g roups, community interest groups, and airports. The Guidelines are designed to fund qualifying projects that reduce emissions and health risk, incorporate simplicity a nd efficiency, ensure costeffectiveness, leverage other funding sources, and provide transparency and accountability.



## B. Authority

The legal authority for the Program is found in Pro position 1B and the implementing statutes discussed below. Governor Schwarzenegger provided additional direction to ARB in his Executive Order S-02-07 on bond accounta bility and his signing statement on the budget bill -- Senate Bill 77 (Chapter 171, Statutes of 2007).

1. Proposition 1B

In November 2006, California voters approved the Hi ghway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, al so known as Proposition 1B. Proposition 1B, among other things, authorizes $1 b illion dollars to reduce emissions from goods movement in California’s trade corridors

. “One billion dollars ($1,000,000,000) shall be made available, upon appropriation by the Legislature and subject to such conditions a nd criteria contained in a statute enacted by the Legislature, to the State Ai r Resources Board for emission reductions, not otherwise required by law or regula tion, from activities related to the movement of freight along California's trade co rridors. Funds made available by this paragraph are intended to supplement existi ng funds used to finance strategies and public benefit projects that reduce emissions and improve air quality in trade corridors commencing at the state' s airports, seaports, and land ports of entry.” (Government Code, Title 2, Divisio n 1, Section 1, Chapter 12.49, Article 2, Section 8879.23(c)(2))

2. Senate Bill 88 and Assembly Bill 201

In August 2007, the California Legislature passed a nd Governor Schwarzenegger signed SB 88 and AB 201, which set forth the implem enting legislation for the Program in Health and Safety (H&S) Code, section 39625 et s eq. SB 88 broadly requires ARB toProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chapter I: Overview 3 February 2008 adopt Program Guidelines, establish funding criteri a and procedures, and provide periodic reports.

Under SB 88, ARB must adopt Program Guidelines that include, at a minimum, all of the following:

• An application process for the funds, and any limi ts on administrative costs.

• Requirements that local agencies identify the usef ul life of the project and project delivery milestones as part of the application proc ess.

• Criteria for selection of local agency projects an d equipment projects.

• Requirements for match funding.

• The method by which ARB will consider the air basi n’s status in achieving state and federal air quality standards.

• Requirements that grant agreements between ARB and local agencies identify project milestones and remedies for failure to meet project milestones.

• Accountability and auditing requirements, includin g provisions for audit of project expenditures and outcomes.

SB 88 and AB 201 detail more than 15 factors that A RB is directed to consider when allocating funds and selecting local agency project s. Some of these criteria are most effectively applied by targeting levels of funding to trade corridors and emission source categories, while others lend themselves to selecti ng among competing local agency projects or equipment projects. The steps ARB will take to allocate funding include:

• Identifying funding targets for the overall Progra m, plus setting funding priorities and defining the equipment project options for each app ropriation.

• Competitively ranking and selecting local agency p rojects for funding in each appropriation cycle.

• Establishing the procedures that local agencies wi ll use to competitively rank and select equipment projects for funding.

Tables 1.1 – 1.3 detail these steps and link each r elated provision of these Guidelines to the statutory requirements in the Health and Safety Code related to funding projects.

SB 88 also establishes basic reporting requirements for ARB and local agencies (all references are to the Health and Safety Code):

• ARB shall submit an annual report to Legislature s ummarizing its activities related to the administration of this program on January 10 [§ 39627.5].

• The local agency shall complete semiannual reports on progress made toward implementation of the project [§39625.02(f)(1)].

• The local agency shall submit a final report on pr oject completion within 6 months of the project becoming operable [§39625.02(f)(2)].Proposition 1B: Goods Movement Emission Reduction Program–Guidelines for ImplementationChapter I: Overview4February 2008Table 1.1 ARB Funding Priorities/Project Options and Statutory Funding RequirementsARB ActionGuidelines referenceProvisionsStatutory Requirements[references to Health and Safety Code]Population relative toother corridorsPercent of emissionsfrom goodsmovement relative toother corridorsThe combination of population and goods movement emissions: considers the public healthrisk associated with good movement-related emissions and air toxics [§39626(a)(1)(D)] and thepublic health benefits of the emission reduction from funded projects [§39625.5(b)(2)(B)];allocates funds in a manner that gives priority tofunding for emission reduction projects thatachieve the earliest possible reduction of health risk in communities with the highest healthrisks from good movement facilities [§39625.5(b)(1)]; and reflects whether reductions fromfunded projects are likely to occur in locations with elevated emissions and exposure[§39625.5(b)(2)(K)].1. Recommendtrade corridorfunding targets(corridors in§39625.1(e))Chap II.B.1.State ImplementationPlan (SIP) needsrelative to othercorridorsConsiders an air basin’s status in maintaining andachieving State and federal ambient airquality standards [§39626(a)(1)(D)], and SIP requirements[§39625.5(b)(2)(E)]in evaluatingwhat level of funding should be administered by local agencies in each corridor.Emissions from eachcategoryConsiders the severity and magnitude of the emission source category’s contribution to goodsmovement emissions [§39625.5(b)(2)(D)], including greenhouse gas emissions[§39625.5(b)(2)(F)].Health impact ofcategoryAllocates funds in a manner that gives priority toemission reduction projects that achieve theearliest possible reduction of health risk in communities with the highest health risks fromgood movement facilities [§39625.5(b)(1)]2. Recommendsource categoryfunding targets(categories in§39625.1(c))Chap II.B.2.Funding category Requires competition for fundingbetween local agency projects in six funding categories thatrepresent a single source category or combination of categories (i.e., other trucks arecombined with electrification of truck stops/etc. and shore power is combined with cargoequipment). Expends funds in a manner that reducesthe health risk associated with freightmovement along California’s trade corridors [§39625(d)], maximizes the emission reductionbenefits [§39625(e)], and provides incentives to control emission sources that contribute toincreased health risk in the future [§39625(e)].Projects that can bequickly implementedTruck retrofits withdiesel PM filters3. Recommendfunding prioritiesfor eachappropriationChap II.B.3.Los Angeles/InlandEmpire port truckreplacementsAllocates funds in a manner that gives priority toprojects that achieve the earliest possiblereduction of health risk in communities with the highest health risks from goods movementfacilities [§39625.5(b)(1)]. Retrofitting trucks with diesel PM filters is the fastest way to reducehealth risk because those retrofits can be accomplished quickly. Communities around thePorts of Los Angeles and Long Beach, and along thedrayage truck routes to intermodal railyards or distribution centers, have elevated emissions and exposure from these truckoperations [§39625.5(b)(2)(K)].Proposition 1B: Goods Movement Emission Reduction Program–Guidelines for ImplementationChapter I: Overview5February 2008Table 1.1 ARB Funding Priorities/Project Options and Statutory Funding Requirements(cont.)ARB ActionGuidelines referenceBased OnStatutory Requirements[references to Health and Safety Code]Equipment and/oremission levelBegins with list of projects eligible for funding [§39625.5(a)(2)]. List of project optionsconsiders: the ability to reduce criteria and toxic emissions [§39625.5(b)(2)(I)],the magnitudeof the emission reduction [§39625.5(b)(2)(A)],public health benefits of the emission reduction[§39625.5(b)(2)(B)],existing (and pending) regulatory requirements [§39625.5(b)(2)(E)],use ofadvanced emission reduction technologies[§39625.5(b)(2)(G)]where demonstrated andavailable, and reduction in greenhouse gas emissions [§39625.5(b)(2)(F)]via detailedspecifications for equipment upgrades.For locomotives, establishes additional provisionsforClass I railroads that have signed agreements withpublic agencies to allow ARB to ensurethat the emission reductions from any locomotive projects for these railroads are notnecessary to satisfy any mandated reduction requirement under any such agreement[§39625.5(a)(2)(B)].Specifically prohibits funding for idle reductiondevices required by the2005 MOU and requires railroads to submit a compliance plan for the 1998 MOU beforeseeking funding for locomotives that operate in theSouth Coast Air Basin.Funding caps/matchfundingRequires a specified contribution of funds leveraged from other sources or in-kindcontributions to the project [§396269(a)(1)(B)], considers the cost-effectiveness of the reduction[§39625.5(b)(2)(C)]and helps leverage other funds[§39625.5(b)(2)(H)]via caps on State bondfunds that can be requested for each equipment project option. State bond funding capsamount to roughly 1/3 to 1/2 of total project cost,with the remainder covered by private orpublic matching funds.Project life Considers sustainability of the reduction via minimum project life expressed as years ofoperation or activity levels for upgraded equipment[§39625.5(b)(2)(C)]and project life elementof reductions over project lifetime per State dollar invested[§39625.5(b)(2)(J)].Project completionprior to regulatoryrequirement(s)Considers the degree of surplus reductions[§39625.5(b)(2)(E)]and ensures funded projectsachieve reductions not otherwise required by law orregulation [§39625.5(a)(1)] viarequirements that equipment upgrades be operationala specified time period in advance ofany regulatory requirement for such upgrade.4. List eligibleequipmentproject optionsand projectspecifications foreachappropriation(project typesidentified in§39625.5(a)(2))Chap II.C.1. andAppendices A-GConditions on futureoperationsConsiders whether reductions are likely to occur inarea with elevated emissions andexposure [§39625.5(b)(2)(K)]via requirements for 100% California operation or home port, plusvisitation frequency for trucks serving ports and intermodal rail yards.Proposition 1B: Goods Movement Emission Reduction Program–Guidelines for ImplementationChapter I: Overview6February 2008Table 1.2 Selection Process for Local Agency Projects and Statutory Funding RequirementsARB ActionGuidelines referenceBased OnStatutory Requirements[references to Health and Safety Code]1. Issue notice offundingavailabilityChap II.D.1.Registration,application submittaland schedule, andrequirement forcommunity meetingStarts local agency application process [§39626(b)].Requires local agencies to shareconcepts for local agency projects, and solicit andconsider community input prior to applyingfor Program funding – this helps ensure that localagency project proposals provide theearliest possible reduction of health risk in communities with the highest risk from goodsmovement [§39625.5(b)(1)].2. Review localagency eligibilityChap II.D.2. andII.D.3.b.Basic qualification Meets statutory definition ofan applicant as a local public entity involved in freight movementor air quality improvements associated with goods movement [§39625.1(a)] and furtherrequirements of these Guidelines.Completeness Ensures presence of complete application and signed board/commission resolution needed toevaluate statutory requirements described below.Consistent with legaland projectspecificationsEnsures local agency project achieves emission reductions not otherwise required by law orregulation [§39625.5(a)(1)] and complies with all eligible equipment projectoptions andequipment project specifications that encompass multiple statutory requirements (see above).Sponsored by anapplicant andconsistent with airquality plansLocal agency project is sponsored by an applicant as evidenced by project submittal[§39626.5(a)(1)]and project is consistent with any comprehensive local or regional plans orstrategies to reduce emissions from goods movement[§39626.5(a)(2)].Availability of fullfundingRequires project funding element to demonstrate that the funds are expected to bereasonably available and sufficient to complete theproject [§39625.02(d)].Projectschedule/milestonesRequires project nominations (applications) to haveproject delivery milestones[§39625.02(e)(3)].3. Review localagency projecteligibilityChap II.D.3.Data for competitiveranking processRequires project nominations (applications) to identify the useful life of the project[§39625.02(e)(2)], as well as provide data on the emission reductions, total project cost,Program and match funds (other State, local, federal, and private) to support competitiveranking in Action 7 below.4. Post eligibleprojects onwebsiteChap II.D.3.Public access Makes available preliminary list of projects being considered for funding for public input andcomment [§39626(c)(1)].Proposition 1B: Goods Movement Emission Reduction Program–Guidelines for ImplementationChapter I: Overview7February 2008Table 1.2 Selection Process for Local Agency Projects and Statutory Funding Requirements(cont.)ARB ActionGuidelines referenceBased OnStatutory Requirements[references to Health and Safety Code]5. Evaluate localagency capabilityto implementproject scopeChap II.D.4.Resources toimplement projectscope within allowedtimeConsiders local agency’s ability to deliver equipment projects and emission reductions toachieve the earliest possible health risk reduction[§39625(e)] and [§39625.5(b)(1)].6. Require matchfundingChap II.D.5. andAppendices A-GIdentify sources ofmatch fundingEnsures that State bond funds are supplemented andmatched with funds from federal, local,and private sources to the maximum extent feasible[§39625.5(c) and §39625.5(b)(2)(H)].Emission reductionscoreRequires projects to compete within a source category based on greatest emission reductions[§39625.5(a)(1)]and magnitude of the emission reduction[§39625.5(b)(2)(A)].Considers publichealth benefits of the reductions by weighting combustion PM (i.e,. diesel PM) by a factor of20 relative to criteria pollutant NOx to reflect the greater health impact of each ton of PMemissions [§39625.5(b)(2)(B)], sustainability of the reductions via project life [§39625.5(b)(2)(C)],and ability to reduce criteria and toxic pollutantsby considering NOx and diesel PM[§39625.5(b)(2)(I)].Cost-effectivenessand match scoreConsiders cost-effectiveness of the reductions [§39625.5(b)(2)(C)] and ability to leverage fundsfrom other sources [§39625.5(b)(2)(H)] by assessing total reductions over project lifetime perState dollar invested [§39625.5(b)(2)(J)].7. Competitivelyrank localagency projectsChap II.D.6.Competitive ranking Equally weights the above scores.8. Hold workshopsChap II.D.7.Public input Requires ARB staff to hold public workshops in northern, central, and southern Californiatodiscuss the preliminary list of local agency projects being considered for funding [§39626(c)(2)].Competitive ranking Allocates funds on a competitive basis for projects that achieve greatest emissionreductionsfrom each source category [§39625.5(a)(1)].9. Recommendproject fundingChap II.D.8.Available funds andfunding prioritiesLimits selection or “programming” of local agency projects to funds appropriated by theLegislature [§39626(d)].10. Hold hearing toadopt project listChap II.D.9.Public hearing andBoard adoption oflocal agency projectsRequires consideration of projects at a regularly scheduled public hearing [§39626(c)(3)].Requires adoption of a final list of projects for funding [§39626(c)(3)].11. Execute localagency grantagreementsChap II.D.10.ARB and localagency to signImplement grant funding via legal agreements between ARB and recipient local agencies[§39625.3]. Ensures statutory and Guideline requirements for local agency projects are met.Proposition 1B: Goods Movement Emission Reduction Program–Guidelines for ImplementationChapter I: Overview8February 2008Table 1.3 Selection Process for Equipment Projectsand Statutory Funding RequirementsLocal AgencyActionGuidelines referenceBased OnStatutory Requirements[references to Health and Safety Code]1. Solicit equipmentprojectapplicationsChap III.D.2. andIII.D.3.Marketing/outreach andapplication elementsincluding data forcompetitive rankingprocessRequires project nominations (applications) to identify the useful life of the project[§39625.02(e)(2)], as well as provide data on the emission reductions, total project cost,Program and match funds (other State, local, federal, and private) to supportcompetitive ranking in Action 3 below. Also requires local agencies to promote truckefficiency upgrades to reduce greenhouse gases [§39625.5(b)(2)(F)]. For electrificationinfrastructure projects, requires local agencies toencourage the participation of smallbusinesses in the construction of the State’s infrastructure [Government Code Section14838.1].2. Require matchfundingChap III.D.5. andAppendices A-GIdentify sources of matchfundingEnsures that State bond funds are supplemented andmatched with funds fromfederal, local, and private sources to the maximumextent feasible [§39625.5(c) and§39625.5(b)(2)(H)].Emission reduction scoreRequires equipment projects to compete within a source category and trade corridorbased on greatest emission reductions[§39625.5(a)(1)]and magnitude of the emissionreduction[§39625.5(b)(2)(A)].Also considers: public health benefits of the reductionsby weighting combustion PM (i.e,. diesel PM) by a factor of 20 relative to criteriapollutant NOx to reflect the greater health impactof each ton of PM emissions[§39625.5(b)(2)(B)], sustainability of the reductions via project life [§39625.5(b)(2)(C)],and ability to reduce criteria and toxic pollutantsby considering NOx and diesel PM[§39625.5(b)(2)(I)].Cost-effectiveness andmatch scoreConsiders cost-effectiveness of the reductions [§39625.5(b)(2)(C)] and ability toleverage funds from other sources [§39625.5(b)(2)(H)] by assessing total reductionsover project lifetime per State dollar invested [§39625.5(b)(2)(J)].3. Competitivelyrank equipmentprojects (eachvehicle or pieceof equipmentcompetesseparately)Chap III.D.6.Competitive ranking Equal weighting of the above scores.4. Post rankedprojectsChap III.D.6.Public access Provides public access to competitively ranked projects proposed for funding prior tosignature of contracts with equipment owners [consistent with statutory provision forARB to do the same in§39626(c)(1)].5. Executeequipmentproject contractsChap III.D.10.Local agency andequipment owner (andany lessee) to signEnsures statutory and Guideline requirements for equipment projects are met.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap I: Overview 9 February 2008

3. Governor Schwarzenegger’s directives

In January 2007, Governor Schwarzenegger issued Exe cutive Order S-02-07 highlighting the importance of transparency and acc ountability in administering the over $40 billion in bond funding approved by voters in 2 006. The Executive Order directs all State government entities responsible for expending bond proceeds to establish and document a three part accountability structure that includes:

• Front-end accountability, which defines the criter ia for expending bond funds as well as the outcomes that the funds are intended to achi eve.

• In-progress accountability, which documents action s to ensure projects are staying within scope and cost, and requires semi-annual rep orts to Department of Finance.

• Follow-up accountability, which requires audits to ensure expenditures achieved the intended outcomes and were consistent with legal re quirements.

The Governor’s signing message on the FY2007-08 bud get via SB 77 also:

• Calls on ARB to move quickly -- without sacrificin g accountability -- to provide relief for the individuals who reside along California’s b usy trade corridors.

• Directs ARB to ensure funding is allocated consist ent with the accountability safeguards in the Executive Order.

• Charges ARB to develop Program Guidelines that mak e sense, reduce bureaucratic red tape, simplify and expedite project application and award procedures, and ensure projects are completed in record time.

• Calls on local agencies to work closely with ARB t o be prepared to submit applications for funding as soon as possible.



## C. Definitions

The following definitions apply for the purposes of these Guidelines.

Table 1.4 Definitions Term Definition Administrative Agency “Administrative agency” (henceforth ARB) is defined by SB 88 to be the Air

Resources Board as the state agency responsible for programming Program funds. Administration Funds “Administration funds” are defined as the monies av ailable up to the limits

defined these Guidelines to cover expenses incurred for implementation of the Program by ARB or a local agency that is party to a n executed grant agreement. Allocation “Allocation” is defined as the Board act ion to award grant funds to local agencies

as documented in a Board resolution. Applicant “Applicant” is defined by SB 88 to mean a “local public entity involved in the

movement of freight through trade corridors of the state or involved in air quality improvements associated with goods movement.” Thes e Guidelines clarify how ARB will assess a local public entity’s eligibility as a Program applicant. Also referred to as an applicant local agency.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap I: Overview 10 February 2008 Term Definition Appropriation “Appropriation” means an authorization by the Legi slature in the annual Budget

Act to make funds available from the California Por ts Infrastructure, Security, and Air Quality Improvement Account Highway Safety, Traffic Reduction, Air Quality and Port Security Fund of 2006 to ARB for t he purpose of implementing SB 88 and AB 201. ARB or Board “ARB” or “Board” means the California Air Resources Board. The term “Board”

is specifically used to refer to the governing boar d of the agency and is typically associated with formal actions to adopt guidelines or projects for funding. Authorized Local Agency Representative “Authorized local agency representative” means the individual(s) from the local

agency who are authorized to sign or act on behalf of the local agency.

Baseline Emissions “Baseline emissions” are defined as the emissions l evel of a diesel engine,

except interstate line

- haul locomotives, using CARB diesel fuel prior to a ny equipment upgrades funded by this Program. Contract “Contract” means the legally binding agree ment between a local agency and

equipment owner.

(Also referred to as an Equipment Project Contract) Contract Term “Contract Term” means the combined ti me period for:

1) equipment project completion; and 2) the equipment project life. (Also referred to as an Equipment Project Contract Term) Cost Effectiveness “Cost Effectiveness” means the total pollutant-weig hted emission reductions over

the project life, per dollar of State funding inves ted. Diesel Particulate Matter (diesel PM) “Diesel Particulate Matter (Diesel PM)" means the p articles found in the exhaust

of diesel engines, which may agglomerate and adsorb other species to form structures of complex physical and chemical propert ies.

Diesel PM is a subset of fine particulate matter 2. 5 microns or less in diameter (PM2.5). Earned Interest “Earned interest” means accrued interest from Progr am funds being held by the

local agency in interest-bearing accounts. Equipment Owner “Equipment owner” means the legal owner of Program- eligible equipment,

except that for grid-based shore power, the term “e quipment owner” shall encompass any party with the authority to co-fund, implement, and operate improvements resulting in provision of grid-based s hore power, which may include, but not be limited to the port, a marine t erminal operator, and shipping companies. Equipment Project “Equipment project” means an upgrade of existing eq uipment via retrofit,

repower, or replacement, or installation of electri cal infrastructure according to Program requirements. Each individual truck, locom otive, piece of cargo equipment, harbor craft, or ship berth proposed for upgrade is considered a separate equipment project. Equipment Project Alternative “Equipment project alternative” means one or more c hoices that the local agency

may propose to customize the local agency project p roposal in its application.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap I: Overview 11 February 2008 Term Definition Equipment Project Completion “Equipment project completion” means the date the l ocal agency determines that

all equipment project requirements are completed wi th the exception of ongoing maintenance, operation, and annual reporting requir ements for the new equipment. For each equipment project, this includ es the liquidation of Program funds and successful post-inspection (including scr appage, if required). Equipment Project Cost “Equipment project cost” means the total cost of th e equipment project, including

State and non-State funding, but excluding administ ration funds. Equipment Project Life “Equipment project life” for each project option in these Guidelines means the

length of time an equipment owner is obligated (und er an equipment project contract) to maintain and operate the bond-funded e quipment according to the requirements of the Program. Equipment Project Option “Equipment project option” means the specific mecha nism to retrofit, repower, or

replace a diesel engine or provide an alternative p ower source to reduce emissions of diesel PM and/or NOx. A source catego ry may include multiple equipment project options (e.g., truck retrofit, re power, and replacement are each distinct project options as defined in these G uidelines). Expenditure “ARB expenditure” means ARB’s payment o f Program funds to a local agency.

“Local agency expenditure” means a local agency’s p ayment of Program funds to an equipment owner. Funding Category “Funding category” means the source category or com bination of source

categories for purposes of establishing funding tar gets.

For example, the shore power and cargo equipment so urce categories are combined into a single funding category with a reco mmended funding target. Goods “Goods” are defined as having the same meanin g in Commercial Code section

2105. Guidelines “Guidelines” means the Proposition 1B: Goods Movement Emission Reduction

Program - Guidelines for Implementation. Grant “Grant” (also referred to as “grant funds” an d “grant award”) means the Program

funding allocated by ARB to a local agency under a Local Agency Project Grant Agreement. Grant Agreement “Grant agreement” means the legally binding agreeme nt between ARB and a

local agency.

(Also referred to as a Local Agency Project Grant A greement) Grant Agreement Term “Grant Agreement Term” means the time period identi fied in a local agency

project grant agreement within which a local agency is legally bound to fully implement the local agency project. Independent Owner Operator “Independent Owner Operator” means a person who bot h owns a single heavyduty diesel truck and personally operates that truc k to haul goods. Liquidation “ARB liquidation” means the full expend iture of all Program funds identified in an

executed local agency project grant agreement.

“Local agency liquidation” means the full expenditu re of all Program funds identified in an executed equipment project contrac t. Local Agency “Local agency” means an eligible appli cant or recipient of Program funds from

ARB. A local agency that is administering Program funds under an executed grant agreement is also referred to as a recipient agency in SB 88.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap I: Overview 12 February 2008 Term Definition Local Agency Board/ Commission “Local agency board/commission” means the popularly elected or appointed

governing body of a local public entity.

Local Agency Project “Local agency project” means the source category-sp ecific incentive program

that the local agency proposes to implement with Pr ogram funding. The local agency project may include one or more equipment pr oject options within the same source category. Local Agency Project Implementation Approach “Local agency project implementation approach” mean s the mechanism(s) a

local agency may propose to implement one or more e quipment project options.

For example, as part of a single local agency proje ct, a port may propose to employ three contractors to run truck replacement p rograms – one focused on a lease-to-own program for diesel trucks, one on leas ing natural gas trucks, and one on offering grants to truck owners for purchase of new trucks. Each of these are implementation approaches. Local Public Entity A “local public entity” means a county, city, distr ict, public authority created by

statute, public agency, and any other political sub division in the State. Local public entities do not include states or the federa l government. Match funding “Match funding” means the non-Program funds used in conjunction with Program

funds to fully fund proposed local agency and equip ment projects. These may include monies from private, local, other State, an d federal sources, except as otherwise provided under these Guidelines or local, State, and federal law. Model Year 2007 Truck Emission Levels “Model year 2007 truck emissions levels” are define d as emissions of 1.2 grams

per brake horsepower-hour (g/bhp-hr) or less of NOx , and 0.01 g/bhp-hr or less of PM, as certified by the U.S. Environmental Prote ction Agency (U.S. EPA) or ARB.NonPerformance “Non-Performance” means the act of not completing o ne or more components of

an executed local agency project grant agreement or equipment project contract. Not Otherwise Required by Law or Regulation "Not otherwise required by law or regulation" means the emission reductions are

not required pursuant to any local, State, or feder al law, rule, or regulation; any requirements imposed by the California Environmenta l Quality Act (CEQA); or any requirements imposed by a legal instrument such as a legal settlement or consent decree (collectively referred to as "law or regulation").

For purposes of this Program only, "not otherwise r equired by law or regulation" does not apply to any tariff, ordinance, or other r equirement imposed by a local agency based on that agency's authority as a market participant or municipal proprietor or the agency's authority to enter into contracts with equipment owners and operators. Notice of Funding Availability “Notice of Funding Availability” is defined by stat ute as ARB’s public

announcement to begin solicitation of local agency project applications.

Obligation “ARB obligation” means the execution of a local agency project grant agreement

between ARB and a local agency.

“Local agency obligation” means the execution of an equipment project contract between a local agency and equipment owner.

(Obligation is also commonly referred to as “encumb rance”)Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap I: Overview 13 February 2008 Term Definition Program “Program” means the Goods Movement Emission Reduction Program, except as

otherwise noted. Recipient Agency “Recipient agency” means the local agency that rece ives Program funds under

an executed grant agreement. Replacement “Replacement” means the act of replacin g a higher-emitting diesel vehicle, piece

of diesel equipment, or diesel harbor craft with a lower-emitting vehicle, piece of equipment, or craft (i.e., replacement of an old tr uck with a new one). Repower “Repower” means the act of replacing a high er-emitting diesel engine with a new

or remanufactured, lower-emitting engine in the sam e vehicle, piece of equipment, or harbor craft. Retrofit “Retrofit” means the act of adding emissio n control technology or modifying an

engine on an existing diesel vehicle, piece of dies el equipment, or diesel harbor craft. The project specifications may require that this technology be an ARB Verified Diesel Emission Control Strategy. State Implementation Plan “State Implementation Plan” or SIP means the air qu ality plan adopted by ARB

and local air districts (as applicable) that demons trates how each region will attain or maintain national ambient air quality sta ndards, as required by the federal Clean Air Act section 110. Source Category “Source Category” means a discrete category of emis sion sources specific to

this Program. A source category may contain multip le equipment project options. Under this Program, source categories inc lude: trucks serving ports and intermodal rail yards, other trucks, truck stop/dis tribution center electrification, locomotives, shore power for ships, cargo handling equipment at ports and intermodal rail yards, and commercial harbor craft. To establish funding targets and promote appropriate competition between project s, ARB may combine multiple source categories within a “funding catego ry.” Trade Corridor “Trade corridor” means any one of th e four following regions in California:

Bay Area, consisting of: San Francisco Bay Area Air Basin (CCR Title 17 §60 101) Central Valley, consisting of: San Joaquin Valley Air Basin (CCR Title 17 §6010 7) Sacramento Metropolitan Federal Ozone Nonattain ment Area (40 CFR Part 81 §81.305, p.23886-23887, Apr 30, 2004) Los Angeles/Inland Empire, consisting of: South Coast Air Basin (CCR Title 17 §60104) Port Hueneme in Ventura County San Diego/Border Region, consisting of: San Diego County (Government Code §23137) Imperial County (Government Code §23113) Verified Diesel Emission Control Strategy “Verified Diesel Emission Control Strategy (VDECS)” means an emission control

strategy, designed primarily for the reduction of d iesel PM emissions, which has been verified pursuant to the “Verification Procedu re for In-Use Strategies to Control Emissions from Diesel Engines” in title 13, California Code of Regulations, commencing with section 2700.

(Note: ARB has separate procedures to verify contr ol devices for stationary sources.)Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 14 Februa ry 2008 

## II. ARB Program Administration

This chapter identifies the proposed requirements f or ARB to administer the Program. SB 88 requires that the Board hold public hearings, adopt Program Guidelines, and adopt a final list of local agency projects that wi ll receive funding from each appropriation. ARB staff shall implement the Board ’s direction as defined in Board resolutions, the Program Guidelines, and the list o f local agency projects to be funded.

ARB staff’s duties to administer the Program shall include, but are not limited to: developing the proposed Guidelines and project spec ifications; issuing the Notice of Funding Availability; soliciting, reviewing and rec ommending local agency projects for funding; executing and implementing grant agreement s with local agencies; auditing local agency projects; tracking and reporting on pr ogress in expending funds and achieving performance milestones; developing and ma intaining a public website on the Program; and conducting workshops and other forms o f outreach to seek public input on Program design and implementation.


### A. Program Guidelines

As required by SB 88, ARB shall develop and adopt i nitial Program Guidelines in a public process. The Guidelines shall include, at a minimum, all of the following:

• An application process for the funds, and any limi ts on administrative costs.

• Requirements that local agencies identify the usef ul life of the project and project delivery milestones as part of the application proc ess.

• Criteria for selection of local agency projects an d equipment projects.

• Requirements for match funding.

• The method by which ARB will consider the air basi n’s status in achieving state and federal air quality standards.

• Requirements that grant agreements between ARB and local agencies identify project milestones and remedies for failure to meet project milestones.

• Accountability and auditing requirements, includin g provisions for audit of project expenditures and outcomes.

Following each appropriation of Program funds to AR B, staff shall develop and the Board will consider adoption of any appropriate upd ates to these Program Guidelines prior to issuing the Notice of Funding Availability for that funding cycle. Staff shall evaluate the progress of the Program and any change s needed to improve its effectiveness, plus advances in technology and upda ted equipment costs that create a need to revise the list of equipment project option s. ARB staff shall provide adequate opportunity for public input, including release of any proposed updates to the Guidelines for public review prior to Board consideration at a noticed public hearing.

The Guidelines are designed and intended to effectu ate the provisions of SB 88 and AB 201. However, in the event a provision of the Guid elines conflicts with either SB 88 orProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 15 Februa ry 2008 AB 201, or any other statute enacted to implement P roposition 1B, the relevant statutory provisions shall control.


### B. Program Funding Targets and Priorities

ARB staff shall propose and the Board may approve f unding targets for each trade corridor and each source category or groups of cate gories (referred to as a funding category) to provide overall direction on the Progr am and guide each trade corridor in the development of viable project proposals. Such targets can ensure that all of the statutory criteria are effectively implemented in a straightforward and transparent manner. Any such targets shall not commit the Boar d to specific allocations in future years and shall not be considered a programming of funds to specific local agency projects. Funding for local agency projects in eac h individual funding cycle shall be responsive to priorities established by the Board a nd may not be directly proportional to the targets. ARB staff shall recommend funding lev els for local agency projects that are designed to reach the targets over the course of th e entire $1 billion Program.

1. Trade corridor funding targets

While SB 88 does not explicitly require an allocati on by corridor, it does direct ARB to identify a means to consider an air basin’s attainm ent status for state and federal air quality standards and its health risk from goods mo vement. ARB staff believes this is most efficiently and effectively done by targeting funding to each corridor based on population, goods movement emissions, and federal a ttainment needs. These targets also ensure that California residents in each defin ed trade corridor see benefits from the Program. Finally, such targets facilitate a transp arent and open discussion of the optimum funding splits to reduce the contribution o f goods movement sources to each region’s toughest air pollution challenges. The St aff Report describes the basis for the proposed targets.

The proposed funding targets for each trade corrido r, including all state and local Program administration funds, are:

Dollars Trade Corridor

• $550 million: Los Angeles/Inland Empire trade cor ridor

• $250 million: Central Valley trade corridor

• $140 million: Bay Area trade corridor

• $ 60 million: San Diego/Border trade corridor

Since this Program looks at the trade corridors as part of a single goods movement system for California, local agencies administering bond monies shall be required to fund projects based on the total emission reduction s expected in the State (not just their local area). The majority of the travel or operati on must be in one or more of the trade corridors. Regions like the San Joaquin Valley wit h high through-truck and rail traffic will benefit from projects administered by agencies in other corridors.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 16 Februa ry 2008 The funding for trucks serving ports and intermodal rail yards (allocated to the corridors where those facilities are located) will be availab le for all California trucks focused on that service, regardless of their home base. Thus, cleanup funds allocated to the Bay Area for the Port of Oakland may go to trucks carry ing agricultural products to and from the Valley. Likewise, funds for the ports in the L os Angeles area may go to trucks based in the San Diego/Border region.

2. Source category funding targets

SB 88 recognizes the need for projects to compete a gainst others in the same source category, not against projects in other categories. To implement this approach, set portions of the funding shall be targeted to each f unding category, which may include one or more source categories. Source category fun ding targets support the reduction in local and regional health risk from goods moveme nt as a primary consideration. The Staff Report describes the basis for the proposed t argets.

The proposed targets for each funding category, inc luding all state and local Program administration funds, are:

Dollars Funding Category

• $400 million: Heavy duty diesel trucks serving se aports and intermodal rail yards.

• $360 million: Other heavy duty diesel trucks that haul goods, plus any truck stop or distribution center electrification.

• $100 million: Diesel freight locomotives.

• $100 million: Shore power for cargo ships at bert h, plus cargo handling equipment used at a port or intermodal rail yard.

• $ 40 million: Commercial harbor craft.

3. Priorities for FY2007-08 funds

ARB staff proposes that the Board adopt these prior ities for FY2007-08:

• Eligible projects that can quickly begin implement ation and deliver air quality results. This is consistent with statutory direction to give priority to projects that achieve the earliest possible reduction of health risk in heavi ly impacted communities. These could be communities with high risks due to nearby goods movement facilities or communities impacted by high regional pollution lev els from goods movement emissions.

• Truck retrofit projects to add diesel particulate filters for immediate, broad scale, cost-effective risk reduction in many communities. Based on the implementation schedules in related truck regulations, we expect t hat these projects would only be eligible for FY2007-08 funding.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 17 Februa ry 2008 • Port truck replacement projects in the Los Angeles /Inland Empire corridor to support the Port of Los Angeles and the Port of Long Beach clean truck tariff programs. These ports are requiring that all drayage trucks s erving the ports be replaced (with models meeting 2007 emission standards) between lat e 2008 and the end of 2011. This schedule means any financial assistance from t he Program needs to come in the early years.


### C. Project Specifications and Emissions

1. Project specifications for each funding cycle

Following each appropriation of Program funds to AR B, ARB staff shall evaluate and recommend for Board adoption specifications for equ ipment project options eligible to compete for funding in that cycle. These options m ust be able to cost-effectively reduce emissions and health risk with a high degree of cer tainty. ARB staff shall assess the list of emission reduction projects identified in SB 88 for technical feasibility, emission reduction potential, and cost. ARB staff shall als o consider other effective technology that is verified, available, and can be widely depl oyed to reduce emissions quickly.

Appendices A-G of these Guidelines detail the propo sed equipment project options for FY2007-08 funds, including upgrade specifications, funding caps, minimum project life, and key operating conditions. Local agencies can choose to propose projects from all of the options in a category, or just a subset of t hose options, to best address the air pollution problem in that corridor. For future app ropriations and updates to these Guidelines, ARB staff shall also consider the fundi ng demand for eligible project options, technology advances and costs, regulatory actions, the need for equipment eligibility and project requirements, and other new information.

SB 88 identifies projects eligible for funding to i nclude:

• The replacement, repower, or retrofit of heavy-dut y diesel trucks.

- The equipment project options for FY2007-08 funds i nclude all of these approaches.

• The replacement, repower, or retrofit of diesel lo comotive engines, with priority given to switching locomotive engines.

- The equipment project options for FY2007-08 funds i nclude replacement and repower approaches. Retrofit devices and a station ary system to capture and control locomotive emissions in the rail yard are i n development – once these technologies are demonstrated, verified by ARB for effectiveness and durability (if applicable), and commercially available, ARB st aff will evaluate them for addition to the list of project options for the sub sequent funding cycles.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 18 Februa ry 2008 • The replacement, repower, or retrofit of harbor cr aft that operates at the state’s seaports.

- The equipment project options for FY2007-08 funds i nclude replacement and repower approaches. Once retrofit devices are demo nstrated, verified by ARB for effectiveness and durability (if applicable), a nd commercially available, ARB staff will evaluate them for addition to the list o f project options for the subsequent funding cycles.

• The provision of on-shore electrical power for oce an freight carriers calling at the state’s seaports to reduce the use of auxiliary and main engine ship power.

- The equipment project options for FY2007-08 funds i nclude this technology.

• Mobile or portable shoreside distributed power gen eration projects that eliminate the need to use the electricity grid.

- The equipment project options for FY2007-08 funds i nclude this type of technology.

• The replacement, repower, or retrofit of cargo han dling equipment that operates at the state’s seaports and rail yards.

- ARB’s adopted regulation for diesel cargo handling equipment operating at ports and intermodal rail yards requires this equipment t o be upgraded to emission levels achievable through replacement or (possibly) repower. To ensure that the eligible projects in this category meet the statuto ry requirement to reduce emissions not otherwise required by law or regulati on, and are cost-effective, the equipment project options for FY2007-08 funds inclu de only retrofit of energy storage systems for rubber-tired gantry cranes that already comply with the ARB rule. ARB will consider expanding the project opti ons for the next funding cycle to include removal of the existing diesel engine an d installation of electric power for these same cranes.

• Electrification infrastructure to reduce engine id ling and use of internal combustion auxiliary power systems at truck stops, intermodal facilities, distribution centers, and other places where trucks congregate.

- The equipment project options for FY2007-08 funds i nclude this technology.

ARB staff proposes that certain types of projects o r activities not be eligible for funding under the Program. Such projects or activities inc lude, but are not limited to:

• Projects to design, acquire rights-of-way, perform environmental review, build, improve, or operate transportation infrastructure ( like roads, bridges, or interchanges; rail yards, tracks or sidings; rail o r highway tunnel widening; railroad crossing grade separations; ship channel dredging; etc.).

• Projects to design, acquire rights-of-way, perform environmental review, build, improve, or operate intermodal transfer or distribu tion centers (also called inland ports), except for electrification infrastructure t o reduce engine idling and use of internal combustion auxiliary power systems at truc k stops, intermodal facilities, distribution centers, and other places where trucks congregate.

• Scientific or technical research and development a ctivities, including programs to perform emissions testing on new technology.

• Business plan development or implementation.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 19 Februa ry 2008 • Equipment, vehicles, or ship berths owned or lease d by the federal government, including the military.

• Fuel or electricity purchases.

• Operation and maintenance costs.

• Legal costs.

• Any other projects that cannot meet all of the req uirements of these Guidelines.

The timing and resource demands to get FY2007-08 fu nds obligated effectively preclude case-by-case consideration of projects for this funding cycle. If a local agency supports demonstration of a cost-effective technolo gy or approach that is consistent with the statute, ARB staff will evaluate that tech nology for possible inclusion in the defined equipment project options in the next updat e to the Guidelines.

2. Quantifying project benefits

a) Pollutants

SB 88 identifies specific pollutants that are targe ted for emission reductions under the Program:

• Diesel particulate matter (diesel PM), which ARB i dentified as a toxic air contaminant.

• Nitrogen oxides (NOx) and sulfur oxides (SOx) that contribute to fine particles (PM2.5) formed in the atmosphere.

• NOx and reactive organic gases (ROG) that form ozo ne in the atmosphere.

SB 88 also adds reductions in greenhouse gases as a criterion to consider in evaluating which projects to fund.

As part of simplifying the Program, ARB staff recom mends quantifying diesel PM and NOx emissions and the resulting reductions from bon d-funded projects. These are the two most consistently important pollutants to reduc e the health impacts from goods movement in all four corridors, and the most likely to differ between competing proposals within the same source category.

Of the targeted source categories, only ships are s till significant sources of SOx emissions. Shore power projects to reduce ship emi ssions at dock will effectively cut this pollutant. It is not necessary to quantify th e SOx emission reductions from each competing shore power project. Comparing the reduc tions in diesel PM and NOx emissions is an adequate basis to assess shore powe r project proposals relative to others in the same source category. Diesel engines emit ROG, but emission levels are typically less than 1/10 of the NOx emissions and a lso should not be a determining factor in project selection.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 20 Februa ry 2008 Staff considered greenhouse gas emissions in recomm ending the source category funding targets, specifically the amount allotted f or shore power and cargo equipment projects that reduce fuel consumption. Since proje cts are competing within source categories, there is not a need to quantify greenho use gas reductions from individual projects to support the competitive process.

b) Project benefits calculators

ARB staff shall develop and make available on the P rogram website at: http://www.arb.ca.gov/gmbond a Project Benefits Calculator (Calculator) for eac h source category eligible for funding under these Gu idelines, with one exception. Projects to install electrification infrastructure to reduce engine idling and use of internal combustion auxiliary power systems at truck stops, intermodal facilities, distribution centers, and other places where trucks congregate m ust be individually evaluated to determine the appropriate quantification method in consultation with the local air district and ARB.

These Calculators shall provide the basis for local agencies to quantify the emission reductions and cost-effectiveness of proposed local agency projects. If a local agency identifies an eligible local agency project that ca nnot be quantified with the Calculator for that source category, the local agency should c ontact ARB staff for guidance. The Calculators shall also provide the basis for equipm ent owners to quantify the emission reductions and cost-effectiveness of proposed equip ment projects.



## D. Application Process for Local Agency Projects

1. Notice of funding availability

ARB staff shall issue a notice of funding availabil ity (NOFA) no later than November 30 th of each fiscal year in which funds are appropriated by the Legislature. For FY2007-08 funding, ARB shall issue the NOFA within two weeks of Board adoption of the Program Guidelines.

The NOFA shall include:

• Registration instructions for local public entitie s seeking Program funds, including concurrent submittal of a demonstration that the lo cal public entity qualifies as an applicant for Program funds.

• Submittal instructions and schedule for local agen cy project applications.

• The requirement that each applicant hold at least one community meeting prior to submittal of the local agency project application to ARB (se e Chapter III.D.1).

2. Registration of local public entities

A “local public entity” is defined to include a cou nty, city, district, public authority created by statute, public agency, and any other political subdivision in the State. Local public entities do not include states or the federal gover nment. The statute requires an applicant for Program funds to be both a local publ ic entity and one that is involved inProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 21 Februa ry 2008 the movement of freight through trade corridors or involved in air quality improvements associated with goods movement.

The first step in the application process is simply registration as a local public entity with ARB through the process described in the NOFA to ob tain access to the electronic application form. ARB shall staff verify the statu s of the local public entity and provide access to the electronic application form for each verified local public entity.

Concurrent with the registration, the local public entity will also provide its qualifications for eligibility as a Program applicant so that ARB staff can begin the initial review of this demonstration.

Note: Since the applications will require an exten sive investment of time and resources by the local public entity, ARB staff encourages ea ch entity to consult early with staff regarding its ability to meet the requirements of t he statute and the Guidelines to qualify as an applicant.

3. ARB review of applicant and project eligibility

ARB staff shall complete an initial review of each local agency project application to verify that the local public entity qualifies as an applicant and that the proposed project is eligible to compete for funding consistent with these Guidelines.

ARB staff shall notify any local public entity that does not meet all of the requirements of paragraphs (a)-(h) of this section within 20 days o f ARB receipt of the complete application package. Notification may occur via le tter or email to the designated local public entity contact, at staff’s discretion.

ARB staff shall evaluate any deficiencies and deter mine, at staff discretion, whether to disqualify the application or pursue updates with t he local public entity.

ARB staff shall post a list of eligible local agenc y project applications on ARB’s Program website ( http://www.arb.ca.gov/gmbond ) for public review no later than 30 days after local agency project applications are due to ARB.

a) Completeness

ARB staff shall review a local agency project appli cation to determine whether all required information is included in the application packet. At a minimum, ARB will verify that the application packet includes a complete app lication and a copy of the local agency board/commission resolution.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 22 Februa ry 2008

b) Qualification as an applicant

ARB staff shall assess each local public entity’s q ualifications to determine if that entity meets the requirements of the statute and the Guide lines for applicants. ARB staff may request that the local public entity provide additi onal documentation to support this assessment.

A local public entity that qualifies as a Program a pplicant may also be referred to as an applicant local agency or a local agency.

c) Consistency with legal and equipment project spe cifications

ARB staff shall review the local agency project app lication and assess the local agency’s certification that the proposed project ac hieves emission reductions “not otherwise required by law or regulation.” ARB staf f shall also evaluate whether the proposed project conforms to the specifications of one or more equipment project options for that source category. Proposals that c ombine multiple source categories or that would allow emissions, equipment, technology, or Program funding levels that are inconsistent with one or more equipment project opt ions defined in these Guidelines are subject to disqualification.

In addition, for any local agency project to retrof it, repower, or replace locomotives operated by the Class I railroads, ARB shall evalua te whether the emission reductions that would be achieved by the locomotive equipment project are or are not necessary to satisfy any mandated emission reduction requirement under an agreement between a railroad company and a state or federal agency, or a local air district. ARB must find that the emission reductions are not necessary to d etermine that the local agency project is eligible to compete for funding. H&S § 39625.5(a)(2)(B).

d) Consistency with air quality plans for goods mov ement

ARB staff shall assess the local agency project app lication to determine if it meets the requirement for consistency with local and regional plans (or regional elements of statewide plans) to reduce emissions from goods mov ement.

e) Availability of full funding

ARB staff shall assess the local agency project app lication to determine if it clearly identifies the source(s) of any State and non-State matching funds and demonstrates that these funds are reasonably available within th e timeframes of the local agency project schedule.

f) Project schedule and milestones

ARB staff shall assess the local agency project app lication to determine if it identifies the required project milestones and includes a demo nstration of the agency’s ability to meet the timelines of the Guidelines for fund oblig ation and expenditure.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 23 Februa ry 2008

g) Data to determine air quality benefits and cost-eff ectiveness

ARB staff shall evaluate the local agency project a pplication to verify that it includes sufficient data on equipment, project life, and pro ject option(s) to support and document the local agency’s calculation of the emission redu ction factor and cost-effectiveness and match factor for the proposed project.

h) Local agency project implementation demonstratio n

ARB staff shall evaluate the local agency project a pplication to determine if it effectively demonstrates that the local agency is prepared to a dminister the proposed project consistent with the detailed provisions of Chapter III.D Local Agency Project Implementation Requirements. This demonstration sh all include a description of how the local agency will structure its program to meet each requirement summarized below, including substantive detail (wherever possible) re garding the procedures the agency will use to implement each provision.

• Support public participation.

• Conduct marketing and solicit equipment project ap plications (including targeted outreach and assistance to independent truck owner- operators).

• Review and competitively rank project applications (including web posting).

• Select equipment projects for funding (including a ny local board/commission process).

• Conduct equipment pre-inspections and compliance c hecks.

• Notify equipment owners of the status of their app lication.

• Execute equipment project contracts.

• Ensure equipment scrappage where required.

• Conduct post-inspections of new or upgraded equipm ent.

• Request expenditures from ARB.

• Process invoices and requests from equipment owner s for payment (including direct payments to vendors and reimbursements).

• Calculate and report earned interest.

• Evaluate equipment projects and assess on-going co mpliance with contract conditions.

• Provide required reports to ARB (including the abi lity to submit equipment project data electronically when requested).

• Participate in Program and fiscal audits.

ARB staff shall also rely on this demonstration in its evaluation of the local agency’s ability to deliver the proposed project scope (see Chapter II.D.4 below) and its overall determination of a local agency’s readiness to quic kly begin implementation and deliver air quality results (see Chapter II.B.3, Priorities for FY2007-08 Funds).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 24 Februa ry 2008

4. Evaluation of local agency capability to impleme nt the project scope

ARB staff shall also assess the local agency projec t application to determine if it affirmatively demonstrates that the agency has or w ill have the necessary expertise and resources in place to meet the demands of the propo sed project scope, within the timelines established by the Guidelines.

ARB staff will examine the local agency’s documente d statistics or other basis for establishing the relationship between the number of pieces of equipment that can upgraded in a given timeframe and the number of pro gram staff needed to accomplish those upgrade projects. ARB staff will rely on the documentation provided by the local agency and ARB’s experience with the Carl Moyer Pro gram and other incentive programs to assess the adequacy of the proposed sta ff resources. If ARB staff determines that the local agency has demonstrated t he ability to handle the project type, but only at a lesser scope or scale than proposed, staff may identify an alternative scope.

For example, a local agency may propose to replace 5,000 trucks, but only demonstrate the resources and ability to process 2, 000 trucks within the timelines established in the Guidelines. ARB staff may disqualify the application or recommend that the project go forward to the com petitive process with a scope of 2,000 truck replacements (at a pro-rated f unding level).

If ARB staff determines that only a lesser scope is feasible based on the local agency’s demonstration, staff will notify the designated loc al agency representative in writing and move the project forward to the competitive process based on the benefits of the prorated proposal for the source category. In the FY2 007-08 funding cycle, ARB staff shall assume local agency support for a pro-rated proposa l based on the acknowledgement required on the application.

5. Match funding

SB 88 distinguishes between State funds and monies from all other sources. It also directs ARB to maximize the amount of match funds u sed to supplement Program funds. The match required to cover the difference between the Program funding cap and the total project cost can come from the privat e sector, local agencies, or the federal government. Private match funding can be p rovided by the equipment owner, an industry sponsored program, or other sources.

a) Carl Moyer program

Local air districts cannot combine funding from thi s Program and direct funding from the Carl Moyer program on the same equipment project (i .e., funds directly authorized under H&S §44091.1(a) and Public Resources Code §42 889).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 25 Februa ry 2008 In response to air district requests, ARB staff has evaluated whether some “passthrough” vehicle registration fees that can be used in the Carl Moyer program may also be used for match funding under this Program. Unde r AB 923 (Chapter 707, Statutes of 2004), the $2 surcharge on the vehicle registration fee can be used for match funding of Proposition 1B projects involving the accelerated r etirement, repowering, or retrofitting of trucks. Conversely, the $2 surcharge cannot be used under this Program for match funding on non-motor vehicle sources, such as locom otives, harbor craft, cargo ships, and off-road cargo equipment.

Program funds and the $2 surcharge may be combined on the same equipment project if all of the following conditions are met: (a) th e equipment project option(s) to be funded includes only trucks, (b) the equipment proj ect meets both bond Program eligibility requirements and Carl Moyer funding cri teria, (c) the equipment project does not exceed the Carl Moyer Program cost-effectivenes s limit, with the project cost including both Program and AB923 funds, and (d) the $2 surcharge funds are not counted as part of an air district’s Carl Moyer mat ch requirement.

For the purpose of competitively ranking local agen cy and equipment projects under this Program, the calculation of reductions per State do llar invested must treat both bond Program monies and the $2 surcharge monies as State funds since the surcharge monies would otherwise be used in the Moyer Program

.

6. Competitive ranking of local agency projects

ARB staff shall use a quantitative approach to deve lop a prioritized list of eligible local agency projects. This process will be applied to c ompeting local agency projects within each trade corridor and funding category.

ARB staff shall publish the list of competitively r anked projects on the ARB website.

The competitive ranking shall be quantitative based on multiple factors – emission reductions and a measure of cost-effectiveness that considers match funding. The calculation of emission reductions uses the Carl Mo yer program protocol of weighting combustion PM emissions (essentially diesel PM) by a factor of 20 relative to other pollutants to account for the greater health impact s of PM per ton of emissions. This protocol helps target Program funding to the projec ts that will achieve the greatest reduction in health risk.

a) Emission reduction score

For each equipment project option that a local agen cy proposes to implement within a source category, ARB staff shall review the local a gency’s estimate of the total pollutant-weighted emission reductions in Californi a, over the average project life, based on the Project Benefits Calculator for that source category.

Emission reductions

= Reduction in NOx + (combustion PM x 20) emission s in California over the average project life in tonsProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 26 Februa ry 2008 If a local agency proposal combines multiple equipm ent project options within a source category, ARB staff shall confirm that the calculat ion repeats this process for each option, and adds the reductions together for the so urce category.

ARB staff shall list projects in descending order o f emission reductions, with the greatest emission reductions on top and the lowest emission reductions on the bottom. Staff shall number or score each project starting a t the bottom with a score of 1 and continuing consecutively to the top project. For e xample, if there are 8 project proposals, the one with the greatest emission reduc tions would receive a score of 8. See Figure 1 for an example.

Emission Reduction Score = number from above evaluation

b) Cost-effectiveness and match score

For each proposed equipment project option in a sou rce category, ARB staff shall review the local agency’s estimate of the total pol lutant-weighted emission reductions (as determined above and converted from tons to pou nds), divided by the total State funding proposed for the project, based on the Proj ect Benefits Calculator for that source category. Total State funding includes requ ested Program funds (project and administration funds), plus any other State dollars – see discussion under Chapter II.D.5, Match Funding, on treatment of the $2 vehic le registration fee surcharge under AB 923 as State dollars.

Cost-effectiveness and match = weighted emission reductions (lbs)/total State $

If the proposal includes multiple equipment project options, ARB staff shall confirm that the calculation repeats this process for each optio n, and adds the costs together and the benefits together to determine the average cost -effectiveness and match number for the source category.

ARB staff shall list projects in descending order o f emission reductions per State dollar, with the highest number on top and the lowest numbe r on the bottom. Staff shall number or score each project starting at the bottom with a score of 1 and continuing consecutively to the top project. For example, wit h 8 project proposals, the one with the greatest emission reductions per State dollar would receive a score of 8. See Figure 1 for an example.

Cost-Effectiveness and Match Score = number from above evaluation

This calculation of cost-effectiveness indirectly a ccounts for the level of match funding. A project will always have a combination of Program funding and match funding (from State or non-State sources) to cover the total cost of the project. The cost-effectiveness equation uses the full emission reductions achieved by the total project funding, not just a subset of the reductions in proportion to the Sta te funding component. By countingProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 27 Februa ry 2008 the total emission reductions, the Program recogniz es the benefits of non-State match funds and offers a competitive advantage to project s with greater match.

For example, assume the Program offers funding for up to 50 percent of the cost of new equipment, with the other 50 percent covered by non -State match funds (resulting in a 1:1 match). Most project proponents seek the maxim um Program funds, but proponent X only requests Program funding for 25 percent of t he total cost, with the other 75 percent covered by non-State match funds (effective ly providing a 3:1 match). The emission reductions for all the projects would like ly be similar, but the total reductions per State dollar are much greater for proponent X b ecause this project relies on less State funds and more match funds.

c) Competitive ranking

ARB staff shall add the Emission Reduction Score to the Cost-Effectiveness and Match Score to determine the final points for each local agency project. ARB staff shall rank local agency projects within each corridor and fund ing category from highest points to lowest points. See Figure 1 for an example.

Note: projects to repower or replace switcher loco motives shall be considered a higher priority than other types of locomotive equipment p roject options, consistent with the statutory direction to give funding priority to swi tchers.

Figure 1. Local agencies A,B,C submit competing truck projects (hypothetical)

Score: 1 C-5,299 tons Score: 2 B-6,056 tons Score: 3 A-7,570 tons Emission Reduction Score

Score: 2 C-0.4 lbs/$ Score: 3 B-0.5 lbs/$

Score: 1 A-0.3 lbs/$ Cost-Effectiveness and Match Score

3 points Project C: 1+2 4 points Project A: 3+1 5 points Project B: 2+3 Competitive Ranking C/ Replace 700 trucks B/ Replace 800 trucks A/ Replace 1,000 trucks Agency/ Project State Dollars W eighted Em ission Reductions (tons) Reductions over 8-Year Project Life

5,299 6,056 7,570 PM tons NOx tons

2,219 2,536 3,170

154

176 220

$28M at

$40k/truck $24M at $30k/truck $50M at $50k/truck Results from Project Benefits Calculator:Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 28 Februa ry 2008

7. Public workshops on eligible local agency projec ts

ARB staff shall hold no less than three public work shops statewide to discuss the competitively ranked list of eligible local agency projects and any preliminary staff recommendations for funding local agency projects. At least one workshop each will be held in northern California, the Central Valley, an d southern California. At staff’s discretion, these workshops may be conducted betwee n release of the competitive ranking and development of funding recommendations or after development of staff’s funding recommendations. For FY2007-08 funds, thes e workshops are not required by statute. H&S §39626(c)(2).

8. Recommendations for funding local agency project s

Based on the competitively ranked list of eligible local agency projects and public input, ARB staff shall use a qualitative approach to devel op recommendations on the level of funding for the top project(s) in each corridor and funding category. This approach shall consider the availability of Program funds, the cor ridor and source category funding targets, and priorities established by the Board fo r each funding cycle.

ARB staff shall make these funding recommendations for local agency projects available to the public via ARB’s Program website ( http://www.arb.ca.gov/gmbond ) prior to the public hearing conducted by the Board.

Within each corridor and funding category , ARB staff shall follow this process:

a) Consideration of available funds and funding pri orities

Starting with the project with the highest competit ive ranking above, ARB staff shall compare the requested Program dollars with the avai lable funds, the Program funding targets for the corridor and funding category, and any priorities identified by the Board for that year. b) Funding level for local agency project proposals

ARB staff shall recommend whether the most competit ive local agency project in each corridor and funding category should be funded in w hole, in part, or not at all in that funding cycle. ARB staff may recommend pro-rating the requested Program funding and the estimated performance measures (pieces of e quipment, emission reductions, etc.) based on the available dollars and funding pr iorities.

Board priorities may result in preferential funding for one of the equipment project options proposed in the local agency application fo r a source category (i.e., if the Board makes funding for PM filter retrofits a priority fo r FY2007-08 funds, ARB could provide more funding for that equipment project option rela tive to the other options within the source category). If Board priorities do not favor a specific equipment project option within a source category, ARB will assume that any pro-rated funding will be applied proportionally to all of the equipment project opti ons the local agency proposes to implement.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 29 Februa ry 2008 Once the recommended funding is determined for the top project, ARB staff shall evaluate the project with the second highest compet itive ranking in consideration of available funds and funding priorities. Staff shal l continue until the appropriate level of funding for that corridor and category – in that fu nding cycle -- is reached.

Based on the process described above for evaluating and ranking eligible local agency projects, as well as assessing the funding level, A RB staff shall issue its written recommendations to the Board for local agency proje ct funding with the available grant funds.

9. Public hearing and Board action

The Board will hold a noticed public hearing to con sider public testimony, written comments, and staff recommendations for funding loc al agency projects with the available Program monies. At that hearing, the Boa rd may adopt a resolution approving a final list of primary local agency projects and c orresponding funding amounts for each project. This Board resolution provides ARB staff with the authority to enter into local agency project grant agreements with the selected l ocal agencies. H&S §39626(c)(3). The ARB Executive Officer may delegate in writing t he ability to sign these local agency project grant agreements to another individual or i ndividuals on ARB’s executive management team.

The project list approved by the Board may also ide ntify “backup” proposals (additional local agency projects or increases in funding level s for the approved projects). These backup proposals may be awarded funding if local ag ency project grant agreements cannot be executed for one or more of the primary p rojects within the timeframe specified by the Board in the resolution.

10. Local agency project grant agreement

The Board’s funding decisions shall become legally enforceable through executed local agency project grant agreements between ARB staff a nd the selected local agencies. Each local agency project requires a separate local agency project grant agreement.

ARB staff shall prepare and submit for review and s ignature two signed copies of the local agency grant agreement to each local agency a pproved for bond funding. After an authorized representative from the local agency sig ns both copies of the grant agreement, the local agency shall retain one fully executed copy for its files, and return one fully executed copy to ARB.

Each local agency project grant agreement shall inc lude, but is not limited to, the following elements.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 30 Februa ry 2008

a) Standard grant agreement provisions

• Grant agreement number—unique tracking number prov ided by ARB

• Effective date

• Term of grant agreement

• Local agency contact information

• Indemnification—local agency agrees to indemnify a nd hold harmless the State for any liability arising out of the performance by the local agency

• Severability—remaining provisions of an agreement continue in effect even if a court holds a specific provision invalid

• Force majeure—ARB and local agency are not liable for any delay or failure in performance resulting from war, natural disasters, and other acts beyond their control

• Agreement amendments—amendments shall only occur b y mutual agreement in writing and signed by all parties

• Environmental justice—local agency agrees to condu ct its programs in a manner that ensures the fair treatment of all people in th e State

b) General Program provisions

• Application--incorporate by reference the original local agency application and board/commission resolution

• Guidelines—local agency agrees to implement projec t in conformance with all applicable requirements of the Program Guidelines

• Reporting requirements—local agency is responsible for submitting to ARB quarterly data updates, semi-annual reports, and local agency project completion reports

• Ongoing evaluations and audits—local agency agrees to allow ongoing evaluations and audits by ARB, other State agencies, or their d esignated representative(s)

• Records access requirements—local agency agrees to allow ARB or its designated representative(s) access to evaluate or audit Progr am records

• Recordkeeping requirements—local agency agrees to retain Program records, i.e. invoices, contracts, and correspondence, for at lea st two years after the project ends or three years after final payment, whichever is la ter

• Enforcement—provisions authorizing ARB or its desi gnee to inspect equipment projects

• Non-performance includes, but is not limited to:

- Failure to comply with the Program Guidelines or s tatutes

- Failure to obligate or expend Program funds within established timelines

- Insufficient performance or widespread deficiencie s with program oversight, enforcement, record keeping, contracting provisions , inspections, audit procedures or any other Program element as determin ed by ARB

- Misuse of Program funds

- Funding of ineligible equipment projects or other items

- Exceeding administrative fund allotment

- Insufficient, incomplete, or faulty project docume ntationProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 31 Februa ry 2008 - Failure to provide required documentation or repor ts requested from ARB, DOF, or other agencies in a timely manner

- Poor performance as determined by an audit conduct ed by ARB, DOF or other designee

• Remedies for non-performance include:

o Probation

o Recovery of funds

o Constraints on opportunity to compete for future P rogram funds

• Direct payments to vendor—allowance for local agen cy payments directly to vehicle or equipment dealers or manufacturers if requested by equipment owner

• Tax implications—local agency agrees to notify equ ipment owners of possible tax implications from receipt of Program funds and enco urage participants to consult a tax professional

• Program acknowledgment—local agency agrees to ackn owledge the Program as a funding source in any related media events or other publicity material.

• Earned Interest—local agency agrees to maintain re cords and report on interest earned on Program funds in local agency accounts, a nd to expend earned interest according to the provisions in the Program Guidelin es.

c) Source category-specific elements

• Local agency project description (including each e quipment project option within the source category).

• Estimated total cost for project and subtotals for each equipment project option.

• Project cost breakdown (including technology/equip ment purchase, labor for retrofit/installation, etc.) and subtotals for each equipment project option.

• Eligible costs—costs directly tied to the purchase and installation of upgraded equipment or other expenses as defined in the equip ment project specifications.

• Funding caps for each equipment project.

• Ineligible costs.

• Total grant amount and subtotals for each equipmen t project option.

• Non-State match funds and source of funds.

• Project performance benchmarks—expected number of vehicles, pieces of equipment, berths, etc. to be upgraded and expected emission reductions.

• Project schedule—timeframe for completing the loca l agency project including major milestones and any milestones specific to each equi pment project option.

• Expenditure schedule—estimated schedule for ARB to expend funds to the local agency.

• Request for payment—steps for a local agency to re quest expenditure of Program funds.

• Equipment project inspections--local agency agrees to complete equipment project pre-inspections prior to execution of an equipment project contract and postinspections prior to reimbursement, except in the c ase of direct payment to vendor.

• Equipment project contracts—local agency agrees to include all equipment project requirements and conditions (i.e., restrictions on operating location, provisions for electronic monitoring devices, etc.) in contracts w ith equipment owners.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 32 Februa ry 2008 • Proper disposal of old equipment—local agency agre es to establish agreements with qualified salvage yards and verify scrappage/dispos al of old vehicle, vessel, equipment, or engine.

• Small businesses—outreach to small businesses for infrastructure construction.

11. $25 million in early grants for FY2007-08 funds

SB 88, as set forth in H&S §39626.5(c), makes avail able up to $25 million in FY2007-08 funds for the purpose of executing grant agreements directly with ports, railroads, or local air districts for eligible projects to achiev e the earliest possible heath risk reduction. SB 88 requires that ARB allocate funds under this “ early grant” provision consistent with these Guidelines, and that ARB provide sufficient o pportunity for the public to review and comment on any projects proposed for funding. Appendix H outlines the process and applicable requirements of the Guidelines for t he early grants.

The public review process started with release of t he Staff Report on January 3, 2008. This Report lists the $177 million in early grant p roposals from air districts and staff’s recommendations for funding early grant projects to taling $25 million. Staff is soliciting public input on these recommendations via workshops , meetings, written comments, and testimony at the Board hearing.


### E. ARB Program Oversight

ARB is the administering agency for this Program, a nd is responsible for ensuring that Program funds are spent on equipment projects that meet the provisions of statute (SB 88 and AB 201) and these Guidelines.

Through the budget bills for upcoming FY2008-09 (SB 1067 and AB 1770), the Administration proposes a technical modification to align the standard timeframes for ARB to obligate and liquidate Program funds with th e extended timeframes provided for local agencies under SB 88. Under the current requ irements applicable to ARB and other State agencies, ARB must liquidate funds (i.e ., make final payment to local agencies) up to four years before those local agenc ies would be required to liquidate the funds for completed projects. The budget bill will align the timelines so that the State retains control of Program funds until they a re necessary to complete an equipment project, consistent with sound fiscal and accountability practices. These Guidelines are structured to rely on the alignment, but also include references to the existing law to allow Board adoption of the Guideli nes and execution of local agency project grant agreements prior to passage of the FY 2008-09 State budget.

1. ARB obligations to local agencies

ARB shall obligate Program funds for each fiscal ye ar’s appropriation according to the obligation deadlines set forth in State law. This is a two-step process, beginning with the Board’s allocation of funds via resolution to s pecific local agency projects and ending with fully executed local agency project gra nt agreements.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 33 Februa ry 2008

2. ARB expenditures

ARB shall liquidate Program funds for each fiscal y ear’s appropriation according to the liquidation deadlines set forth in State law.

• Once Program funds are obligated, with the excepti on of earned interest, any funds returned or unspent by a local agency revert back t o the California Ports Infrastructure, Security, and Air Quality Improveme nt Account, and must be reappropriated by the Legislature. It is therefore t he policy of ARB to retain grant funds until necessary for the purchase of equipment, for the purpose of advancing the completion of an equipment project, or for the purp ose of meeting liquidation deadlines set forth in State law.

• ARB shall only expend Program funds upon receipt o f a valid Grant Expenditure Request submitted to ARB by an authorized local age ncy representative acting under a fully executed Local Agency Project Grant A greement.

a) Administration funds

Administration funds expended by ARB for this Progr am may be used by a local agency for the administration of any local agency project covered by a fully executed local agency grant agreement. If a local agency has more than one fully executed local agency grant agreement with ARB, administration fun ds identified under one grant agreement may be used to assist in the implementati on of another grant agreement. The local agency shall not use administration funds in excess of the total administration funds allowed under all grant agreements (i.e., the sum of all administration funds for one local agency shall not exceed 5 percent of the total grant awarded to that agency).

(1) Initial expenditure

Of the maximum grant award allowed for administrati on funds, ARB may initially expend up to 50 percent of a local agency’s administration funds for all source categories except shore power.

For the shore power source category, ARB may initia lly expend up to 25 percent of the local agency’s administration funds.

(2) Additional expenditures

For truck and commercial harbor craft source catego ries, ARB shall expend the remaining Program funds for administration only aft er 50 percent of the Program funds for equipment projects are expended by the local ag ency or ARB comes within six months of a liquidation deadline, whichever is soon er. ARB staff shall verify the local agency’s documentation that 50 percent of the equip ment project funds were expended prior to the additional expenditure.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 34 Februa ry 2008 For the remaining source categories (locomotives, s hore power, truck stop/distribution center electrification, and cargo handling equipmen t), ARB shall expend the remaining Program funds for administration only after 100 per cent of the Program funds for equipment projects are liquidated by the local agen cy or ARB comes within six months of ARB’s liquidation deadline, whichever is sooner. ARB staff shall verify the local agency’s documentation that the equipment project f unds were liquidated prior to expenditure.

b) Equipment project costs

(1) Initial expenditure

ARB may initially expend Program funds for equipmen t projects according to the provisions for each source category listed in Table 2.1 below.

Table 2.1 Initial Expenditures for Equipment Proje ct Funding Source Category % of Funds Requirements Trucks serving ports and intermodal rail yards up to 100%

Other heavy duty diesel trucks up to 100% Cargo handling equipment up to 100% Shore power up to 10% Locomotive up to 10% Harbor craft up to 10% Truck stop/distribution center electrification up to 10% Initial expenditure may be requested once the competitively ranked equipment project list is posted on the local agency website as a demonstration of the local agency’s readiness to execute equipment project contracts; or within six months of ARB’s liquidation deadline as specified in State law, whichever comes first.

(2) Additional expenditures

ARB may expend the remaining Program funds for equi pment projects according to the provisions for each source category listed Table 2. 2 below.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 35 Februa ry 2008 Table 2.2 Additional Expenditures for Equipment Pr oject Funding Source Category % of

Funds Requirements

Trucks serving ports and intermodal rail yards remaining

Other heavy duty diesel trucks remaining

Cargo handling equipment remaining Additional expenditures may be requested at any tim e after the initial expenditure from ARB, but shall be requested no lat er than six months before ARB’s liquidation deadline under Stat e law.

Shore power remaining

Locomotives remaining
Harbor craft remaining Additional expenditures may be requested no sooner than six months prior to the anticipated post-inspection date, but shall be requested no later than six months before ARB’s liquidation dead line under State law.

Truck stop/distribution center electrification projects remaining Additional expenditures may be requested no sooner than six months after the post-inspection date, but shall be requested n o later than six months before ARB’s liquidation deadline under Stat e law.

3. Earned interest

ARB shall receive local agency reports on the inter est earned and expended from Program funds held in local agency accounts. Earne d interest provisions for local agencies are detailed in Chapter III.E.3.

If a local agency is unable to expend earned intere st according to the provisions of these Guidelines, ARB shall reallocate the interest payments collected from these local agencies in the manner specified in these Guideline s.

4. Ongoing evaluations

ARB staff shall evaluate local agency and equipment projects on an ongoing basis. Evaluations are designed to meet the accountability requirements of SB 88 and the Executive Order S-02-07. Any Program funds expende d on equipment projects that ARB finds are not eligible for funding shall be doc umented as an adverse finding in the local agency’s audit. The ARB Executive Officer ma y require that the local agency reimburse ARB the Program funds identified in an ad verse finding, or may seek other remedies from the local agency as the Executive Off icer deems appropriate.

a) Ongoing evaluations of local agency projects

Ongoing evaluation of local agency projects include s reviewing local agency project records to ensure consistency with Program Guidelin es and emission reduction goals.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 36 Februa ry 2008 Evaluations may occur as ARB Program staff deems ne cessary and feasible with available resources.

Local agencies shall permit the ARB, the Department of Finance, the Bureau of State Audits, or any authorized designee, access, during normal business hours, to conduct Program and fiscal audits.

b) Ongoing evaluations of equipment projects

Ongoing evaluation of equipment projects includes r eviewing equipment project records to ensure consistency with Program Guidelines and e mission reduction goals, and site visits to inspect engines, vehicles, or other equip ment funded under the Program. Evaluations of equipment projects may occur unannou nced as ARB Program staff deems necessary and feasible with available resourc es.

Equipment owners shall permit the local agency, ARB , the Department of Finance, the Bureau of State Audits, or any authorized designee, access, during normal business hours, to conduct ongoing evaluations for the purpo se of monitoring the Program.

In addition to local agency review to ensure the ap propriate registration and operation of bond funded equipment, ARB may periodically monitor , through federal, State, and local equipment registration databases, as applicable, on going equipment project compliance with California registration and operational requir ements. Equipment registration databases may include, but are not limited to:

o California Air Resources Board databases.

o California Department of Motor Vehicle databases.

 California International Registration Plan (CA IRP ).

o California Department of Fish and Wildlife databas es.

o California Department of Transportation databases.

o Local agency databases, as available, such as air district permit records or port access databases.

When ARB field inspectors check trucks, locomotives , harbor craft, cargo handling equipment, and ship berths for compliance with ARB regulations or enforceable agreements, they shall also assess compliance with Program requirements for any bond-funded equipment. The inspectors shall determ ine if the equipment received bond funding via an equipment database and evaluate bond -funded equipment to ensure that all pollution controls are functioning and the equi pment is meeting the Program operating conditions.

Nothing in these Guidelines is to be construed as l imiting or otherwise affecting in any way ARB’s enforcement authority for ensuring that e quipment subject to the Program complies with all Program requirements, as well as all applicable regulations or enforceable agreements.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 37 Februa ry 2008 (1) Electronic monitoring devices

With the exception of contracts for locomotive proj ects and grid-based shore power projects, all equipment project contracts shall req uire that the equipment owner agree to the installation and use of an electronic monitorin g device at any time during the equipment project contract term. Equipment project contracts for locomotives shall require equipment owners to install and use global positioning systems (GPS), and report data.

ARB staff is considering the widespread use of elec tronic monitoring devices on bondfunded equipment for the primary purpose of trackin g equipment operational requirements (100 percent California operation) and equipment activity within the four trade corridors. In a subset of equipment projects , ARB is considering more sophisticated devices to collect additional activit y or engine operational data for ARB inventory needs.

Staff recognizes the privacy concerns that equipmen t owners may have about any type of electronic monitoring device. Staff intends to develop a proposal for public review and seek comment prior to including requirements fo r specific electronic monitoring devices and data reporting protocols in future upda tes to these Guidelines.

In developing the electronic tracking component of this Program, ARB staff recognizes the detailed reporting and database requirements as sociated with other ARB truck programs as well as the recently adopted truck repl acement plans at the Ports of Los Angeles and Long Beach. ARB staff is working to co ordinate the Program requirements and specifications with these other efforts, where possible.

Examples of electronic monitoring devices include, but are not limited to, the following:

• Passive GPS (Global Positioning System) tracking d evices

- Passive GPS systems are less expensive (potentiall y lower than $300/unit) than real-time GPS systems, and do not have associated s ubscription costs. The trade-off, however, is that each unit would require local agency or ARB inspectors to physically download data from each un it.

• Real-time GPS tracking devices

- Real-time GPS systems are more expensive (upward o f $5,000/unit for the equipment and 5 years of monitoring), but have the capability of capturing realtime location information and remotely downloadable data.

• RFID (Radio-Frequency Identification)

- RFID systems are best used in a controlled gate en vironment to identify equipment entering or exiting a facility (like a po rt or rail yard). These systems may be used to track the number of visits to a port , but cannot be used to verify California operation.

For each equipment project, all data collected from any electronic monitoring device required under this Program shall be provided to th e local agency administering that equipment project and to ARB staff or its contracto rs for their use and analyses. SuchProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 38 Februa ry 2008 data may include, but not be limited to, vehicle id entification number (VIN); date, time, and distance traveled for each trip; GPS locational information; emissions or fuel usage rates; and other information collected from gauges, sensors, and other sources. Further, notwithstanding the nature of data collect ed, each equipment project contract shall expressly specify that no data collected from these monitoring devices shall be construed in any way as constituting non-disclosabl e personal or locational identifiers.

Data collected from these monitoring devices shall be disclosed only to the local agency and ARB staff or its contractors, except as otherwi se provided by law. Such data shall be provided upon request in the form and format agr eed to by the parties or as otherwise specified in this Guideline. Each equipm ent project contract shall require all signatories to acknowledge their understanding and agreement to allowing the local agency and ARB staff and its contractors such acces s to the collected data. Nothing in this provision or these Guidelines shall be constru ed in any way as limiting ARB's ability to publish or release the collected data or the res ults of analyses using these collected data in summary form without individual personal id entifiers; for purposes of this Program, "personal identifiers" include only the na me of the vehicle driver or equipment operator and the driver's or operator's home addres s in alpha-numeric format (e.g., 1000 Apple Way), if collected.

5. Auditing

Audits are designed to ensure that all local agency and equipment projects funded under the Program meet the requirements of these Gu idelines. ARB or its designees shall audit a sufficient number of local agency pro jects and equipment projects each year to ensure effective Program implementation and accountability, subject to available

resources.

a) ARB audits of local agency projects

Pursuant to H&S §39625.02(e)(1), ARB staff or its d esignees shall conduct program and fiscal audits of the local agencies.

To ensure objectivity and the efficient use of reso urces, ARB shall use a risk-based approach to select specific local agency projects f or audit during a given year. Consistent with this approach, local agencies demon strating good performance when audited will likely be audited less frequently in t he future than similarly-funded local agencies with poorer audit results.

Any Program funds that local agencies expend on pro jects not eligible for Program funds shall be documented as an adverse finding in the local agency’s audit. The ARB Executive Officer may require that the local agency reimburse ARB the Program funds identified in an adverse finding, or may seek other remedies from the local agency as the Executive Officer deems appropriate.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 39 Februa ry 2008 The responsibilities of ARB or its designees during an audit include, but are not limited to, the following:

• Audits shall be conducted in a manner that reflect s the public responsibility and accountability entrusted to ARB.

• ARB shall maintain open channels of communication with the local agency under audit, for example, fully explaining the audit’s sc ope and procedure at the beginning of the process, informing the affected parties of p otential issues as they unfold, affording numerous opportunities for input througho ut the audit, thoroughly discussing any findings and recommendations during the exit interview, and allowing the local agency an opportunity to formally respond to the audit report.

• To ensure objectivity and predictability, ARB shal l base its findings and recommendations on materials such as State law, the se Goods Movement Emission Reduction Program Guidelines for Implementation , Generally Accepted Accounting Principles (GAAP), e-mail communications between AR B and the local agency or equipment owner, the local agency project applicati on, and any local agency’s own requirements.

• All final audit reports, local agency or equipment owner responses and related documents shall be readily available to the public.

• ARB shall conduct sufficient follow-up activities, including conducting follow-up reviews to ensure that any identified deficiencies are promptly and effectively addressed.

The responsibilities of a local agency during an au dit shall include, but are not limited to, the following:

• Ensure that program files and other requested info rmation are readily available to audit staff.

• At a minimum, participate in the entrance and exit interviews and ensure that local agency or equipment owner staff is cooperative with audit staff.

• Communicate fully with audit staff throughout the course of an audit.

• Make every effort, including requesting assistance from ARB if necessary, to ensure that identified deficiencies are promptly and effec tively rectified.

To assist ARB with the audit process, local agencie s shall provide to ARB staff, upon request, access to documentation pertaining to the Program which includes, but is not limited to, the following:

• General:

- Organization charts.

- Contact information for the Program and accounting designated liaisons.

- Copies of grant agreements (with amendments) betwe en ARB and the local agency, and contracts between the local agency and the equipment owner.

- Reports filed with ARB, if applicable.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 40 Februa ry 2008 • Accounting records:

- General ledger chart of accounts.

- Copies of the policies and procedures for:

o Receipt and deposit of project funds.

o Review, approval, and payment of project invoices.

o Calculation and allocation of program administrati on costs.

o Tracking and allocating interest earned on the Pro gram.

- Reports from the general ledger showing receipts, expenditures, interest earnings, and annual balances for projects during t he audit period.

- Copies of audit reports covering financial stateme nts, operations, and internal controls during the audit period.

- Access during fieldwork to the following accountin g records:

o Invoices/claims from the local agency to ARB for P rogram payments, and invoices from equipment owners to the local agency.

o Receipts/deposit slips showing payments received f rom ARB.

o Invoices from subcontractors/consultants to the lo cal agency or equipment

owner.

o Canceled checks or other expenditure documents sup porting payment to the subcontractors/consultants.

o Bank statements and reconciliations throughout the audit period.

• Program Records:

- Reports that list all projects associated with the programs showing:

o Equipment project number.

o Subcontractor and consultant contact information.

o Dates, check numbers, amounts, and funding sources for each equipment project expenditure.

o Fiscal year of the funding appropriation for the a pplicable grant agreement

- Copies of any and all records prepared by the loca l agency, the equipment owner, and any third parties involved in the applic ation, review, inspection, scrappage, or payment steps.

- Copies of the local agency procedures for review, approval, and submittal of subcontractor invoices for payment.

- Access during fieldwork to the following Program p roject records:

o Contracts between the local agency or equipment ow ner and the subcontractors/consultants.

o Invoices from subcontractors/consultants to the lo cal agency or equipment

owner.

o Requests to local agency’s accounting for payment of project invoices.

Local agency shall retain all records subject to th e recordkeeping requirements for local agency projects. Retained records shall include, b ut are not limited to: local agency file reviews of annual equipment project reports, annual reports provided by equipment owners, any relevant project updates provided by eq uipment owners, documentation of equipment inspections, and other relevant informati on.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 41 Februa ry 2008 Local agencies shall provide access to all required records and personnel with knowledge of such records to the ARB, the Departmen t of Finance, the Bureau of State Audits, or any authorized designee during normal bu siness hours, to conduct Program and fiscal audits.

In conjunction with local agency audits, ARB staff or an authorized designee, shall also use a risk-based approach to select specific equipm ent projects. If ARB staff discover non-performance issues with specific equipment proj ects, the local agency shall be notified to take appropriate action. If ARB staff discover that the equipment project is not in compliance with ARB regulations, the ARB Enf orcement Division shall be notified to take appropriate enforcement action.

6. ARB reporting

ARB staff shall provide regular updates and reports on the implementation status of the Program.

a) Public website

ARB is committed to providing the public with infor mation regarding the status of bondfunded programs. In accordance with ARB policy and Executive Order S-02-07, ARB shall provide periodic data updates on ARB’s progra m website: http://www.arb.ca.gov/gmbond . At a minimum, ARB shall post:

• Local agency semiannual reports.

• Local agency project completion reports.

• ARB annual reports.

ARB shall also develop and maintain an on-line data base showing information and progress on local agency projects, as well as indiv idual equipment projects. This searchable data will allow the public to find out a bout projects funded in a specific area and the implementation status of each project. ARB staff will develop the local agency project tracking element first. The equipment proj ect element will follow. Once this element is operational, local agencies shall be req uired to update the equipment project information quarterly.

b) Annual community meetings

In each trade corridor, ARB staff shall co-host alo ng with the local agencies administering local agency projects in that corrido r, at least one annual community meeting to provide an update on and opportunity to discuss implementation of the Program.

c) Updates to Department of Finance

ARB shall forward semi-annual and project completio n reports submitted by local agencies along to the Department of Finance. H&S § 39625.02(f)(1)-(2).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 42 Februa ry 2008

d) ARB annual report

ARB staff shall prepare an annual report on progres s implementing the Goods Movement Emission Reduction Program once the Board has adopted the Program Guidelines and local agency projects have been sele cted for funding. Pursuant to H&S §39627.5, this report shall be submitted to the Leg islature with the Governor’s proposed State budget for the ensuing fiscal year, by Januar y 10, and shall include the following minimum elements:

• Description of local agency projects funded by the Program, including the following information for each project:

- Amount of Program funds allocated.

- Location.

- Implementation status.

- The number of vehicles, pieces of equipment, ship berths, etc. expected to be updated.

- Estimate of the emission reductions achieved or ex pected.

• Total funds allocated, obligated, and expended und er the Program to date by trade corridor and funding category.

• Actions undertaken to ensure local agency funded p rojects are being implemented in a timely fashion and within the budget for Program funds.

• Accomplishments and challenges in implementing the Program.

7. Local agency non-performance

Prior to implementing any of the non-performance pr ovisions in this section, ARB staff shall make a reasonable effort to work with local a gency staff to address and resolve any issues relating to Program implementation.

a) Non-performance finding

If ARB staff identifies instances of local agency n on-performance, ARB staff shall issue a written non-performance finding to that local age ncy.

Local agency non-performance includes, but is not l imited to, issues with any one or more of the following areas:

• Misuse of Program funds.

• Funding of ineligible equipment projects or other items.

• Failure to comply with the Program Guidelines or s tatutes.

• Failure to meet schedule milestones identified in the grant agreement.

• Failure to obligate or expend Program funds within established timelines.

• Insufficient performance or widespread deficiencie s with program oversight, enforcement, record keeping, contracting provisions , inspections, audit procedures or any other Program element as determined by ARB.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 43 Februa ry 2008 • Exceeding administrative fund allotment.

• Insufficient, incomplete, or faulty project docume ntation.

• Failure to provide required documentation or repor ts requested by ARB, DOF, or other agencies in a timely manner.

• Poor performance as determined by an audit conduct ed by ARB, DOF or other designated agency or contractor.

b) Local agency appeal process

Upon notification of a non-performance finding, loc al agency staff or management may request a meeting with ARB management to dispute ordiscuss the validity of the nonperformance finding.

If the disagreement over the validity of the non-pe rformance finding cannot be resolved at the management level, local agency management ma y appeal to the ARB Executive Officer or his designated representative, whose dec ision shall be final and binding.

c) Remedies for non-performance

(1) Local agency probation

ARB staff shall consider a local agency on probatio n at the time a non-performance finding is sent to the local agency.

The local agency on probation shall develop a corre ctive action plan that must be submitted to ARB within 30 days of receipt of the w ritten non-performance finding from ARB.

ARB shall approve or disapprove with recommendation s the corrective action plan within 30 working days of receipt from the local ag ency. To be considered for approval, the corrective action plan must include adequate, e xpeditious, and enforceable commitments to address the specific non-performance problems, including timeframes to complete each commitment.

If the corrective action plan is approved, ARB staf f shall evaluate the local agency’s performance under the approved corrective action pl an, including timelines, to determine whether the local agency met its commitme nts and fully addressed the issues for which it was placed on probation. ARB may also impose additional requirements, depending upon the scope or severity of the local a gency’s non-compliance with Program requirements.

No later than one year from the date the local agen cy is originally placed on probation, ARB shall do one of the following, whichever ARB in its sole discretion deems appropriate:Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 44 Februa ry 2008 • Remove the local agency from probation designation

.

• Re-designate the local agency on probation for a p eriod of up to one additional year.

• Re-designate the local agency on probation for a p eriod of up to one additional year, and require that all, or a portion of, the remainin g unspent Program funds available for expenditure by ARB and/or the local agency plus any earned interest, revert back to the California Ports Infrastructure, Security, a nd Air Quality Improvement Account.

ARB may also require local agencies on probation to comply with additional requirements or stipulations prior to future ARB ex penditures under existing grant agreement(s) or prior to ARB consideration of futur e local agency applications from the local agency for Program funds.

If the corrective action plan is disapproved by ARB with recommendations, the local agency shall have 30 days to revise the plan accord ing to the recommendations and resubmit it to ARB. ARB shall approve the correcti ve action plan as re-submitted within 30 days, or develop a recommendation to require tha t all, or a portion of, the remaining Program funds available for expenditure by ARB and/ or the local agency plus any earned interest, revert back to the California Port s Infrastructure, Security, and Air Quality Improvement Account.

ARB shall make information pertaining to a local ag ency’s probationary status available to the public.

(2) Fund reversion

Program funds automatically revert back to the Cali fornia Ports Infrastructure, Security, and Air Quality Improvement Account under the follo wing conditions:

• Funds held by the ARB revert if ARB does not oblig ate funds or liquidate funds within the deadlines set forth in State law.

• Funds held by a local agency revert if the local a gency does not obligate funds within two years of executing a local agency project grant agreement with ARB, or expend funds within four years of obligation. A local age ncy may return unused funds ahead of the reversion deadline if the local agency concl udes it cannot spend the funds for any reason.

• Funds held by a local agency revert once the local agency withdraws from the Program or its grant agreement is terminated, irres pective of whether the funds have been obligated but not yet expended.

All Program funds that revert back to the Californi a Ports Infrastructure, Security, and Air Quality Improvement Account are subject to re-a ppropriation by the Legislature.

ARB and local agencies are released from funding co mmitments in grant agreements or contracts, as applicable, for any and all funds tha t are reverted back to the California Ports Infrastructure, Security, and Air Quality Imp rovement Account. This release does not apply to any contractual obligations the local agency may have with the equipment owner or operators.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap II: ARB Program Administration 45 Februa ry 2008 (3) Future grant opportunities

A local agency’s track record in administering Prog ram funds shall be a factor in ARB’s consideration of subsequent applications from that local agency for future funds.

ARB may require local agencies with a current or pr ior probation designation to comply with additional requirements or stipulations, prior to ARB consideration of future fiscal year Program funds. This may include:

• Exclusion of a local agency from participation in the Program due to past nonperformance issues.

• Based on the specific types and seriousness of a l ocal agency’s past nonperformance issues, limitation(s) on future grant f unding opportunities, levels, equipment project option(s), volume(s) or other lim itation(s), as determined by ARB on a case-by-case basis.

• The track record of the local agency may also be c onsidered by ARB in conducting its audits of the local agency.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 46 Fe bruary 2008 

## III. Local Agency Project

A. Local Public Entity Registration

Interested local public entities shall submit regis tration information as required by the Notice of Funding Availability (NOFA) sufficient fo r ARB to assess the entity’s qualification as a local public entity, by the dead line identified in the NOFA. Registration information shall include, at minimum, the followin g:

• Type of agency (air district, seaport, transportat ion agency, etc.).

• Jurisdiction, including geographic boundary and tr ade corridor.

• Mission statement or purpose.

• General information on the entity (total budget, o verall work plan or program, etc.).

• Certification that the local public entity has the legal authority to implement a regional scale incentive program for freight moveme nt sources that includes: project solicitation, competition for funding, funding awar ds, execution of contracts, and equipment inspections across the entire trade corri dor where the local public entity is based.

• Local public entity contact information.

To facilitate ARB review of a local public entity’s qualification as an applicant according to the requirements of the statute and the Guidelin es, the entity shall submit concurrently with the registration:

• A description of how the local public entity is in volved in freight movement or air quality improvements associated with goods movement , as required by the statute. This description shall include entity’s specific ro les, authorities, responsibilities, and annual budget for goods movement air quality projec ts.

• A statement as to whether the local public entity fulfills the additional requirements of these Guidelines and further qualifies as an applic ant because it:

- Is directly responsible for operating a freight mo vement facility (e.g. seaport or airport); or

- Has statutory authority for designing and implemen ting strategies and/or plans to reduce emissions or health risk from air pollution sources (e.g. local air pollution control district and air quality management distric t); or

- Has statutory authority for planning and funding r egional goods movement infrastructure projects (e.g. regional transportati on planning agency).

Local public entities shall provide any additional documentation not described above upon request by ARB.

Local public entities shall successfully register w ith ARB staff prior to submittal of a project application packet.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 47 Fe bruary 2008 

### B. Local Agency Project Application Packet

Local public entities that have registered shall su bmit one completed local agency project application packet for each source category . Application packets shall be submitted to ARB by the NOFA deadline. The complet ed application packet shall include the following:

• Completed application, including a written acknowl edgement that ARB staff may prorate the proposed local agency project at a lower l evel of funding and proportionally lower performance measures (vehicles, equipment, ha rbor craft or berths to be updated; and the resulting emission reductions).

• Local agency board/commission resolution (see Chap ter III.B.4).

On-line local agency project applications are sched uled to be available in time for the FY2007-08 funding cycle. If available, local agenc ies shall utilize the on-line application to submit local agency project application packets.

Local agency project applications are also subject to the statutory legal restrictions described below.

1. Legal restrictions

Local agencies shall certify that the local agency project would achieve emission reductions not otherwise required by law or regulat ion. H&S §39625.5(a)(1). "Not otherwise required by law or regulation" means the emission reductions are not required pursuant to any local, State, or federal law, rule, or regulation; any requirements imposed by the California Environmental Quality Act (CEQA); or any requirements imposed by a legal instrument such as a legal settl ement or consent decree (collectively referred to as "law or regulation"). For purposes of this Program only, "not otherwise required by law or regulation" does not apply to an y tariff, ordinance, or other requirement imposed by a local agency based on that agency's authority as a market participant or municipal proprietor or the agency's authority to enter into contracts with equipment owners and operators.

The following are examples of laws or regulations t hat may prohibit equipment projects that would otherwise be eligible for funding under this Program. Sub-section (d) below discusses Program funding for equipment projects th at may be subject to future ARB regulations.

a) Environmental mitigation

Local agencies shall not request or expend Program funds for equipment projects that are required as a specific California Environmental Quality Act (CEQA) or National Environmental Policy Act (NEPA) mitigation measure in a certified CEQA or NEPA document.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 48 Fe bruary 2008

b) Railroad agreements

For locomotives, the statute specifically requires ARB to determine that the emissions reductions that would be achieved by the locomotive equipment project are not necessary to satisfy any mandated emission reductio n requirement under an agreement between a railroad company and a state or federal a gency, or a local air district. H&S §39625.5(a)(2)(B).

The Staff Report discusses two Memoranda of Underst anding (MOU) that ARB has signed with the Class I railroads – Union Pacific a nd Burlington Northern-Santa Fe – to reduce the emissions and health risks from locomoti ve operations. Program funding shall not be used for idle reduction technology on locomotives (required by the 2005 MOU) or for cleaner locomotives credited towards th e railroads’ compliance with the 2010 fleet average emission standard for the South Coast Air Basin (required by the 1998 MOU). Locomotive repowers or replacements tha t go beyond the itemized requirements of these agreements shall be eligible for bond funding.

c) Existing ARB regulations

Local agencies shall not request or expend Program funds for equipment projects that are used to directly comply with existing regulatio ns. The Program can co-fund eligible equipment subject to existing or future regulations , but only if the equipment upgrades are early (completed a set time prior to the compli ance date) or extra (the upgrade must go beyond the regulatory requirements, as provided in these Guidelines).

Existing ARB regulations that are currently in plac e for the following source categories applicable to this Program include, but are not lim ited to:

• New heavy-duty diesel vehicles – Exhaust Emissions Standards and Test Procedures -1985 and Subsequent Model Heavy-Duty En gines and Vehicles (Code of Regulations, title 13, division 3, chapter 1 §19 56.8).

• Heavy-duty truck idling – Requirements to Reduce Idling Emissions From New an d In-Use Trucks

(Code of Regulations, title 13, division 3, §1956. 8, §2404, §2424, §2425, §2485).

• Cargo handling equipment – Regulation for Mobile Cargo Handling Equipment at Ports and Intermodal Rail Yards (Code of Regulations, title 13, division 3, chapte r 1 §2479).

• Ships at berth (shore power) – Operational Hour Limits and Other Requirements for Auxiliary Diesel Engines Operated on Ocean-Going Ve ssels At-Berth in a California Port. ( Code of Regulations, title 13, division 3, chapter 5.1, §2299.3).

• Commercial harbor craft engines – Emission Limits and Requirements for Diesel Engines on Commercial Harbor Craft Operated Within California Waters and 24 Nautical Miles of the California Baseline. ( Code of Regulations, title 13, division 3, chapter 1, article 4.5 §2299.5).

• Trucks serving ports and intermodal rail yards – Regulation to Control Emissions from In-Use On-Road Diesel-Fueled Heavy-Duty Drayag e Trucks. ( Code of Regulations, title 13, division 3, chapter 1, artic le 3 §2027).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 49 Fe bruary 2008 • Truck smoke and emission control inspections – Heavy-Duty Diesel Smoke Emission Testing, and Heavy-Duty Vehicle Emission C ontrol System Inspections

. (Code of Regulations, title 13, division 3, chapter 3.5, §2180-2194).

Information regarding existing ARB regulations for specific source categories can be found on the following ARB website: http://www.arb.ca.gov/diesel/mobile.htm , or in the California Code of Regulations through the Office o f Administrative Law (OAL): http://www.oal.ca.gov/ccr.htm

.

d) Upcoming ARB Regulations

Local agencies may request and expend Program funds for equipment upgrades that may be required by a future ARB regulation up until the date of Board action to adopt the regulation.

As of the date of Board action, only equipment proj ects with executed contracts between the equipment owner and local agency shall be exempt from project completion timing requirements (e.g., three years p rior to the adopted regulatory compliance date for that equipment upgrade).

Once the Board has taken action to approve a regula tion, subsequent equipment projects shall be subject to the project completion timing requirements identified in the equipment project specifications or include emissio n reductions that go beyond the regulatory requirements. For example, port truck r eplacements with model year 2007 or newer trucks must be completed three years prior to the regulatory requirement for this replacement.

Information regarding upcoming ARB regulations for specific source categories can be found on the following ARB website: http://www.arb.ca.gov/diesel/mobile.htm

. Local agencies are encouraged to pay specific atten tion to the ongoing development of the Proposed Regulation to Reduce Emissions of Diesel P articulate Matter, and Other Pollutants From In-Use Heavy Duty Diesel-Fueled Veh icles , which may impact a significant number of Program-eligible truck projec ts.

2. Project alternatives for local agencies

Under this Program, a “local agency project” is def ined as the source category-specific incentive program that the local agency proposes to implement with Program funding.

This section lists the alternatives that a local ag ency may and may not propose to make to the specifications for each equipment project op tion described in these Guidelines. If a local agency wants to implement one or more accep table alternatives, the local agency shall clearly describe the alternative(s) fo r each equipment project option in the local agency application, along with the basis for the alternative(s) proposed.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 50 Fe bruary 2008 ARB staff may, at its discretion, expand the follow ing list of alternatives to include additional items that do not fundamentally alter th e equipment project eligibility criteria, the equipment project requirements and operating co nditions, or the effectiveness of those provisions in reducing emissions.

a) Technology alternatives

The local agency may propose to customize its sourc e-category specific proposal by incorporating any of the following alternatives:

• Within a source category, a local agency may propo se to implement one or more of the equipment project options defined in these Guid elines. The local agency shall identify each desired equipment project option on t he local agency project application. If the local agency is requesting fun ding for multiple equipment project options within a source category, the local agency shall describe each option and itemize the associated emissions, reductions, costs , Program funding requested, and cost-effectiveness for each option within the a pplication. If that local agency project is funded, ARB will expect the local agency to solicit applications for the proposed equipment project options, and then evalua te and competitively rank all of the applications within the source category against each other. Because of the need for competition across equipment project options, t he final mix of equipment projects funded by the local agency may differ from the loca l agency project application.

• Within an equipment project option, a local agency may propose to offer nonProgram funding for equipment that meets an emissio ns performance standard that requires lower emissions than the specifications in these Guidelines, provided the technology to meet that standard is demonstrated, v erified by ARB (if applicable) and commercially available. The local agency shall not propose to offer Program funding at a level for each equipment project that exceeds the funding caps in these Guidelines. The local agency shall not require equ ipment meeting lower emission standards than the emissions levels for the equipme nt project options in these Guidelines. The local agency shall not propose to r estrict eligibility for Program funding to equipment projects that utilize the addi tional funding to meet the lower emission standards (i.e., any equipment project tha t meets the minimum specifications established in these Guidelines must be eligible to compete for Program funding administered by the local agency fo r that equipment project option).

For example, a local agency may propose a truck ret rofit program that does not require but offers additional funds for both diesel PM and NOx controls; with the Program paying $5,000 per truck towards the PM cont rol element and the local agency providing supplemental funding from another, non-State source for the additional NOx control. Following ARB approval of the local agency project, the local agency shall solicit equipment applications f or both the lower emission PM/NOx retrofit approach as well as the truck retrofit app roach listed in the program Guidelines.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 51 Fe bruary 2008 Similarly, a local agency could propose a truck pro gram that does not require but offers additional funds for replacement with natura l gas; with the Program paying up to the maximum $50,000 per truck and the local agen cy providing funding from another, non-State source for the incremental cost of natural gas. Following ARB approval of the local agency project, the local age ncy shall solicit equipment applications for both the lower emission natural ga s replacement approach as well as the truck replacement approach listed in the pro gram Guidelines.

• Within an equipment project option, a local agency may propose to offer nonProgram funding for equipment monitoring or trackin g devices (like global positioning systems or radio-frequency identification devices). In this case, the local agency shall commit to monitor the equipment for the proje ct life. The local agency shall also make provisions acceptable to ARB for access t o the data collected on individual vehicles, vessels or equipment and perio dic data reports.

• Within an equipment project option, a local agency may propose to offer nonProgram funding for efficiency upgrades, like aerod ynamic devices on trucks.

b) Project implementation approaches and contractor s

A local agency project implementation approach is d efined as the mechanism(s) a local agency may propose to implement a local agency proj ect. For example, as part of a single local agency project, an air district may pr opose to directly administer grants to truck owners for replacement projects and to hire a contractor or other third party to run a truck retrofit program. Each of these is an impl ementation approach.

The local agency may propose to customize its sourc e-category specific proposal by incorporating any of the following alternatives:

• Within a source category or an equipment project o ption, a local agency may propose a combination of implementation approaches to target recruitment of eligible projects and administration of funds for s elected projects. The local agency may also apply for Program funds to be administered in full or in part by a third party contractor or contractors, but shall retain full re sponsibility for the Program requirements and deadlines specified in these Guide lines and executed grant agreements with ARB. Any third party overhead and administration costs shall count against the cap established in the Guidelines for local agency administration funds.

Regardless of the local agency’s use of multiple im plementation approaches or third party contractors, the competitive ranking process must take place across the entire source category to ensure fair and equitable compet ition between eligible equipment projects. The local agency shall not commit or obl igate Program funds to specific project implementation approaches or third party co ntractors prior to the completion of the competitive ranking process.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 52 Fe bruary 2008 For example, as part of a single local agency proje ct, a port may propose to employ three contractors to run truck replacement programs – one focused on a lease-toown program for diesel trucks, one on leasing natur al gas trucks, and one on offering grants to truck owners for purchase of new trucks. These contractors can each market their project implementation approach a nd solicit applications for eligible truck projects, consistent with the Guidel ines and local agency project grant agreement. The port must then competitively rank t he applications from all three contractors together to determine which specific eq uipment projects will be funded. The contractors can then administer the funding for the equipment projects selected from the competitive process.

c) Procedure/process alternatives

The local agency may propose to customize its sourc e-category specific proposal by incorporating any of the following alternatives:

• Within an equipment project option, a local agency can shorten the time allowed from execution of the equipment project contract to project completion. Staff recommends that local agencies carefully consider t he potential of this alternative to increase fund reversion due to non-performance. Th e local agency shall not propose or allow equipment projects to be completed less time in advance of a regulatory requirement than provided for in the pro ject specifications.

• Within a source category or equipment project opti on, a local agency can expand the list of information required on an equipment projec t application or the reporting requirements for equipment owners.

• Within a source category or equipment project opti on, a local agency can expand the equipment inspection or scrappage requirements.

d) Geographic operations

For clarity, this section describes both the geogra phic requirements that a local agency must implement and the specific situations where th e local agency may propose to customize its source-category specific proposal by incorporating geographic alternatives. ARB staff expects that local agencie s will propose to administer local agency projects for equipment that operates in the trade corridors, including the corridor where the local agency has jurisdiction.

These Guidelines limit eligibility for Program fund s to equipment with recent operation in one or more trade corridors. Except as provided be low, a local agency may not propose or implement a local agency project that re stricts access to Program funding to equipment operating at a single facility or within a single city, county, air district, air basin, trade corridor, or similar geographic area t hat is smaller than the four trade corridors or the State of California.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 53 Fe bruary 2008 • Trucks serving ports . A local agency that applies for funds to adminis ter a retrofit, repower, or replacement program for port trucks may propose to restrict eligibility to trucks serving one or more major seaports in the tr ade corridor where the local agency has jurisdiction. The local agency shall sp ecify which seaport(s) the proposed project would cover and the estimated numb er of eligible trucks serving that seaport. The local agency shall recruit all e ligible trucks serving the specified seaport(s), regardless of where in California the t rucks are based. The local agency shall similarly fund eligible trucks serving the sp ecified seaport(s), subject to review of equipment project applications and the competiti ve ranking process.

• Trucks serving intermodal rail yards . A local agency that applies for funds to retrofi t, repower, or replace trucks serving intermodal rail yards must recruit all eligible trucks serving intermodal rail yards that are located in the trade corridor where the local agency has jurisdiction and covered by ARB’s Decemb er 2007 rule. The local agency shall similarly fund all eligible trucks ser ving intermodal rail yards in the corridor, subject to review of equipment project ap plications and the competitive ranking process.

• Other trucks . A local agency that applies for funds to retrofi t, repower, or replace other trucks, or to implement a three-way transacti on shall recruit eligible trucks that travel within the trade corridor where the local ag ency has jurisdiction. The local agency shall accept applications and fund all eligi ble trucks that travel within the four trade corridors, regardless of where those trucks a re based, subject to review of equipment project applications and the competitive ranking process. A local agency may propose to add an eligibility requirement that the old truck must have traveled at least 10% of its annual miles within the trade corr idor where the local agency has jurisdiction. This requirement would be added to t he base Program requirements that both the old and new trucks travel at least 50 % of their annual miles within the four trade corridors, and that the new trucks trave l 100% of their miles in California.

• Switcher locomotives . A local agency that applies for funds to repower or replace switcher locomotives may require that both the old and new switcher locomotive operate full-time within the trade corridor where t he local agency has jurisdiction, except for periodic maintenance in another region o r neighboring state.

• Line-haul locomotives . A local agency applies for funds to repower or r eplace linehaul locomotives may require that both the old and new line-haul locomotive operate at least 10% of the time in the corridor where the local agency has jurisdiction, and full-time within California, except for periodic ma intenance in a neighboring state. The local agency shall recruit all eligible locomot ives operating in the trade corridor, regardless of where in California the locomotives a re based. The local agency shall similarly fund all eligible line-haul locomotives s erving that trade corridor and others, subject review of equipment project applications an d the competitive ranking process.

• Harbor craft . A local agency that applies for funds to adminis ter a harbor craft repower or replacement program may propose to restr ict eligibility to vessels that areProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 54 Fe bruary 2008 home-ported in the trade corridor where the local a gency has jurisdiction. The local agency shall specify which seaport(s) the proposed project would cover and the estimated number of eligible harbor craft serving t hat seaport, including the number of craft that are subject to ARB’s November 2007 co mmercial harbor craft regulation.

• Shore power . A local agency that applies for funds to adminis ter a shore power program may restrict eligibility to one or more sea ports within the trade corridor where the local agency has jurisdiction. The local agency shall specify which seaport(s) the proposed project would cover and the estimated number of berths at each seaport that are subject to ARB’s December 200 7 regulation for ocean-going vessels at dock.

• Cargo handling equipment . A local agency that applies for funds to adminis ter a cargo handling equipment program to install energy storage systems on rubber-tired gantry cranes may restrict eligibility to equipment operating at one or more seaports, or all intermodal rail yards, within the trade corr idor where the local agency has jurisdiction.

• Truck stop or distribution center electrification . A local agency that applies for funds to administer a program for electrification infrast ructure to reduce engine idling and use of internal combustion auxiliary power systems at truck stops, intermodal facilities, distribution centers, and other places where trucks congregate may restrict eligibility to facilities within the trade corridor where the local agency has jurisdiction. The local agency shall recruit all eligible truck s tops and distribution centers operating in the trade corridor and shall similarly fund all eligible projects within that trade corridor, subject to review of equipment proj ect applications and the competitive ranking process.

e) Ineligible project alternatives

A local agency shall not propose or implement other requirements that are inconsistent with these Guidelines including, but not limited to :

• A local agency shall not restrict funding eligibil ity to a preferred individual, company, business entity, or other defined group of equipmen t owners. Other than the exceptions specifically described above, a local ag ency shall not restrict funding eligibility to equipment that operates solely or pr imarily within its jurisdictional boundaries. The local agency shall solicit, accept applications, and fund equipment projects from all equipment owners who meet the eli gibility requirements defined in these Guidelines, subject to the local agency proje ct described in the grant agreement as well as the project evaluation and com petitive ranking process. Notwithstanding the above, a local agency may exclu de from funding eligibility any equipment owner who has a demonstrated inability to meet contractual obligations with the local agency.

• A local agency shall not restrict equipment projec ts to replacement or retrofit equipment manufactured or sold by a single company. The local agency shall allowProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 55 Fe bruary 2008 all eligible equipment projects that meet the emiss ions performance level detailed in the project specifications of these Guidelines to c ompete for Program funding.

• A local agency shall not impose travel restriction s on Program-funded equipment beyond the operating limitations defined in these G uidelines and any approved alternatives described in the preceding section. F or example, a local agency cannot restrict the travel (or a portion of the travel) of trucks or line-haul locomotives to within a single city, county, air district, air bas in, trade corridor, or similar geographic area that is smaller than the four trade corridors or the State of California.

• The local agency shall not fund equipment projects failing to meet the minimum equipment project requirements listed in Appendices A-G of these Guidelines. In conjunction with the minimum equipment project requ irements, a local agency shall not fund higher emitting equipment, pay more per pi ece of equipment, modify the project life options, remove the project eligibilit y and other requirements, or relax the operating conditions as compared to the specificati ons in these Guidelines for each equipment project option.

3. Completed application

Local agencies shall complete a local agency projec t application, and submit it with an original signature by an authorized local agency re presentative.

All application information shall be provided or th e application shall be considered incomplete. Updates to any application information after the submittal deadline shall only be allowed on a case-by-case basis, at the dis cretion of ARB staff.

The local agency project application shall include, at minimum, the following information.

a) General local agency information

The local agency shall include general information about the local agency consisting of, at minimum, the following:

• A general description of the local agency, its geo graphic boundaries, regional demographics and statistics, agency roles and funct ions, and its relationship to goods movement and air quality.

• A description of the local agency’s experience adm inistering other incentive programs. If the local agency has implemented more than one type of incentive program, describe the program that is most similar to the source category that is being applied for first; then any other incentive p rograms. At minimum, the description of prior experience shall include:Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 56 Fe bruary 2008 o Purpose of the incentive program (equipment upgrad es, new technologies, etc.)

o How long the local agency has administered the pro gram.

o Annual funding amounts.

o Description and quantification of the equipment pu rchased through the program.

o Successful outreach strategies used to solicit par ticipation.

o Overview of the monitoring and reporting under the program.

• Staff contact information.

• Other general information as requested on the onli ne application.

b) Local agency project proposal

The local agency shall include information about th e local agency’s proposed local agency project. The local agency shall, at a mini mum:

• Identify the trade corridor(s) targeted.

• Describe the air quality problems and key contribu ting pollutants in the trade corridor.

• Identify the source category.

• Identify the specific equipment project options ta rgeted, along with all equipment project assumptions necessary to calculate project benefits as described below.

• Identify any proposed local agency project impleme ntation approaches.

• Identify and detail any proposals to allow lease-t o-own programs.

• Identify any proposed project alternatives consist ent with Chapter III.B.2.

• Describe how the local agency project is consisten t with local and regional plans to reduce emissions from goods movement activities, or consistent with the regional strategies in ARB’s 2006 Emission Reduction Plan for Ports and Goods Movemen t in California . At minimum, this description shall include the s trategies or measures identified in these goods movement plans that are a ddressed by the local agency project proposal.

c) Air quality benefits

The local agency shall use the Project Benefits Cal culator provided by ARB to quantify the emission reductions and cost-effectiveness of a proposed local agency project (see the Program website at: http://www.arb.ca.gov/gmbond ). If a local agency identifies an eligible local agency project that cannot be quanti fied with the Project Benefits Calculator for that source category, the local agen cy should contact ARB staff for guidance.

If the proposal includes multiple equipment project options, the local agency shall quantify and report the emission reductions, costs, and reductions per State dollar separately for each, as well as the total for the s ource category.

If a local agency is seeking funding for implementa tion approaches for a single equipment project option (for example, three distin ct truck replacement programs run by different contractors with different levels of Stat e funding and/or different emissionProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 57 Fe bruary 2008 performance levels), the local agency shall quantif y and report the emission reductions, costs, and reductions per State dollar separately f or each approach, as well as the total for the equipment project option.

d) Project schedule

The local agency shall include a detailed local age ncy project schedule. At minimum, the local agency project schedule shall provide eit her the anticipated date or the approximate number of weeks necessary to accomplish each of the milestones identified below.

The local agency project schedule shall incorporate local agency obligation and liquidation deadlines identified in Chapter III.E.1 & 2.

The local agency project schedule shall include, bu t is not limited to:

• Date of community participation event (see Chapter III.D.1).

• Anticipated (ARB) Board approval of local agency p rojects (see NOFA, when published).

• Anticipated execution date of local agency project grant agreement.

• Anticipated date of initial grant expenditure requ est to ARB and amount.

• Equipment project solicitation period, including m arketing/outreach.

• Equipment project application review period.

• Competitive ranking of equipment projects and webp osting.

• Selection of equipment projects from the competiti vely ranked list.

• Anticipated date of next grant expenditure request to ARB and amount.

• Equipment owner notification period.

• Equipment pre-inspection period (as applicable).

• Local agency obligation deadline (all contracts mu st be signed).

• Equipment post-inspection period.

• Local agency liquidation deadline (all equipment f unds must be liquidated).

• Anticipated submittal of local agency project comp letion report.

e) Funding demonstration

The local agency shall include a funding demonstrat ion for each local agency project.

Elements of funding demonstration . This funding demonstration shall include, but is not limited to:

• The total cost of the local agency project. For g rid-based shore power projects and harbor craft projects, the local agency may estimat e the total cost of the project in the anticipated completion year.

• The amount of Program funds requested from ARB, in cluding the breakdown of equipment project funds and administration funds, s ubject to the limits in these Guidelines.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 58 Fe bruary 2008 • The specific sources of the matching funds (privat e, local, other State, federal). If a local air district proposes to co-fund truck projec ts with the monies derived from the $2 surcharge on vehicle registration fees authorize d by AB 923 (Chapter 707, Statutes of 2004), these monies must be identified as other State funds in this demonstration.

• For each source of match funding, the amount, any conditions or restrictions associated with its use, as well as any timeframe r equirements associated with its expenditure.

• A demonstration that all non-Program match funds a re reasonably available within the timeframes of the local agency project schedule

.

• Documentation of the local agency’s fiscal ability to implement the proposed local agency project.

• A copy of the local agency’s most recent final fis cal audit.

Administration funds . Local agencies with the ability to generate new funding from goods movement sources to cover administration fund s (e.g. seaports) shall be prohibited from requesting administrative Program f unds.

In all other cases, requests for administration fun ds are capped as follows:

• 2% of the grant amount for grid-based shore power.

• 3% of the grant amount for locomotives, cargo cran es, truck stop/distribution center electrification, and non-grid shore power.

• 4% of the grant amount for harbor craft.

• 5% of the grant amount for trucks.

Administration funds shall be used for tasks associ ated with Program outreach/marketing, implementation, and audit and o versight, including: staff time; consultant fees; printing, mailing, and travel cost s; project monitoring and compliance expenses; and indirect costs, such as general admin istrative services, office space, and telephone services.

f) Staff resources

The local agency shall identify and describe the st aff resources necessary to effectively implement the local agency project proposal. This includes documentation of existing and planned staffing, with an indication of when pl anned staff will be hired.

The local agency shall affirmatively demonstrate th at the agency has or will have the necessary resources in place to meet the demands of the project type and scope. Agencies with prior experience implementing diesel engine or other incentive programs should provide documentation on their own statistic s regarding the relationship between the number of pieces of equipment that can upgraded in a given timeframe and the number of program staff needed to accomplish those upgrade projects. Agencies without prior experience should contact the local a ir district in the region to obtain relevant statistics.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 59 Fe bruary 2008 The staff resources demonstration shall include the following minimum documentation:

• Description of the local agency’s staffing levels and experience in administering other incentive program funds (if applicable).

• Description of the basis for the proposed staffing levels if the local agency does not have prior incentive program experience.

• Description/list of the staff classifications that are available or will be available to implement the project, including:

- At least one supervisor/manager to oversee the loc al agency project.

- Program staff to solicit, evaluate, competitively rank, inspect, fund, and audit equipment projects; as well as prepare database upd ates and reports.

- Other staff in the following categories:

o Field inspectors for equipment inspections.

o Fiscal/accounting staff.

o Computer assistance/database management staff.

o Legal staff.

o Clerical support staff.

o Temporary staff (students, limited term, etc.).

g) Local agency project implementation demonstratio n

The local agency shall describe in detail how it wi ll implement the local agency project to demonstrate its ability to fully and effectively satisfy each of the proposed local agency project implementation requirements detailed in Chapter III of these Guidelines.

Local agencies currently administering incentive pr ograms similar to this Program may use existing policies and procedures that are modif ied to reflect the unique requirements of this Program.

This demonstration shall include a description of h ow the local agency will structure its program to meet each requirement summarized below; including substantive detail (wherever possible) regarding the procedures the ag ency will use to implement each provision.

• Support public participation.

• Conduct marketing and solicit equipment project ap plications (including targeted outreach and assistance to independent truck owner- operators).

• Review and competitively rank project applications (including web posting).

• Select equipment projects for funding (including a ny local board/commission process).

• Conduct equipment pre-inspections and compliance c hecks.

• Notify equipment owners of the status of their app lication.

• Execute equipment project contracts.

• Ensure equipment scrappage where required.

• Conduct post-inspections of new or upgraded equipm ent.

• Request expenditures from ARB.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 60 Fe bruary 2008 • Process invoices and requests from equipment owner s for payment (including direct payments to vendors and reimbursements).

• Calculate and report earned interest.

• Evaluate equipment projects and assess on-going co mpliance with contract conditions.

• Provide required reports to ARB (including the abi lity to submit equipment project data electronically when requested).

• Participate in Program and fiscal audits.

This demonstration shall also be evidence of the lo cal agency’s ability to deliver the proposed project scope (see Chapter II.D.4) and its readiness to quickly begin implementation and deliver air quality results (see Chapter II.B.3).

4. Local agency board/commission resolutions

The local agency shall include a resolution of the local agency governing board or commission that authorizes the local agency to ente r into a local agency grant agreement with ARB, accept funds, and provide any m atching funds under the fiduciary control of the local agency that are identified in the local agency project funding demonstration.

The local agency resolution shall also clearly iden tify the local agency’s board/commission role or board/commission delegatio ns to local agency staff for the following:

• The local agency representative authorized to sign and submit the local agency project application.

• The local agency representative authorized to sign /execute a local agency project grant agreement between ARB and the local agency.

• The approval of a competitively ranked equipment p roject list indicated the equipment projects selected for funding and a backu p list of eligible equipment projects.

• The local agency representative authorized to sign /execute an equipment project contract between the local agency and equipment own er.


### C. Local Agency Project Grant Agreement

Local agency project grant agreements and requireme nts are described in Chapter II.D.10 above.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 61 Fe bruary 2008 

### D. Local Agency Project Implementation Requirements

1. Community and public participation

a) Community meetings

For FY2007-08 funds, the local agency shall hold at least one community meeting prior to the submittal of the local agency project applic ation to solicit public input on the source categories and equipment project options to be addressed in the local agency project proposal. The local agency shall consider public input as it develops the local agency project application. In subsequent funding cycles, the local agency shall expand the opportunities for community participation in th e development of the application.

At minimum, the local agency project application sh all identify when and where the community meeting(s) was held, and include document ation of the attendance and a brief summary of the comments received.

The local agency shall also commit to co-hosting wi th ARB staff at least one community meeting in the trade corridor each year to provide updates on the implementation of the local agency project.

b) Public and interested stakeholder participation

The local agency application shall include a descri ption of the local agency’s strategy for involving the public and interested stakeholders du ring the implementation of the proposed local agency project.

The local agency shall identify mechanisms for the public to provide input to the local agency on the equipment project solicitations, the competitively ranked list of equipment projects, the periodic progress reports, and the eq uipment project status updates on the ARB website (and the local agency website, if appli cable).

c) Public website

The local agency shall maintain a public website co ntaining, at minimum, the following information:

• A link to ARB’s Program website ( http://www.arb.ca.gov/gmbond ).

• Information pertaining to equipment project solici tations.

• The competitively ranked equipment project list(s) when available.

To enhance outreach efforts and program transparenc y, the local agency shall submit a website link to ARB containing specific local agenc y program information, including information on community meetings or public worksho p announcements which will then be posted on ARB’s Goods Movement Emission Reductio n Program website.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 62 Fe bruary 2008

2. Equipment project marketing tools

The local agency shall use marketing strategies tha t specifically target the owners of Program eligible equipment covered by the local age ncy project, and operating in the trade corridor (regardless of where that equipment is based.)

Local agencies shall provide technical and administ rative assistance to equipment project applicants to help them understand and appl y for equipment projects.

a) Marketing tools

Local agencies shall identify and use at least thre e marketing tools (more are encouraged, but not required). Examples include:

• Develop and maintain list of interested parties.

• Use web-based marketing.

• Advertise and post announcements in local newspape r(s), including non-English publications.

• Use radio advertisements.

• Issue public notices.

• Distribute brochures/fact sheets/community newslet ters.

b) Outreach to independent truck owner/operators

For truck programs, the local agency shall design a nd implement a targeted outreach program for independent owner/operators to inform t hem about Program funding opportunities and to assist them in completing equi pment project applications. This information shall include, at a minimum, the Progra m funding available, equipment and operating requirements, and application deadlines. Marketing tools to reach this audience may include, but are not limited to:

• Education and application assistance via a kiosk s et up near a location where independent truck drivers congregate.

• Outreach during typical off-times for truck driver s.

• A toll free number for equipment project applicant s to check the status of applications or get phone assistance in completing an applicatio n.

• A notice in local papers or other written material of funding availability (including papers published in languages other than English).

c) Information on truck efficiency upgrades

For truck programs, the local agency shall make inf ormation available to equipment owners regarding upgrades to improve fuel efficienc y, especially for long-haul trucks. Technologies that improve fuel efficiency for truck s may include devices that reduce aerodynamic drag and rolling resistance. Aerodynam ic drag may be reduced using devices such as cab roof fairings, cab side gap fai rings, cab side skirts, and on the trailer side, trailer side skirts, gap fairings, an d trailer tail. Rolling resistance may beProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 63 Fe bruary 2008 reduced using single wide tires or low-rolling resi stance tires and automatic tire inflation systems on both the tractor and the trailer. These upgrades offer the potential to cut emissions of greenhouse gases and criteria pollutan ts, with a two to three year payback period through lower fuel costs. The benefits are variable based on the type of truck operations.

Truck owners may be interested in including efficie ncy upgrades that fit their operating profile when purchasing a new truck or retrofitting a PM filter with bond funding under this Program. While this Program does not provide funding for the efficiency upgrades, other incentive programs may help offset the purcha se cost or help finance the purchase of the upgrades. For example, U.S. EPA in collaboration with the freight industry has developed the SmartWay Transport Partn ership to increase energy efficiency while significantly reducing greenhouse gases and criteria pollutants. This program also designates technology packages as Smar tWay Upgrade Kits, which can be purchased at various SmartWay partner centers, d ealerships, and service centers. ( http://www.epa.gov/otaq/smartway/documents/420f0702 7.htm ) Some California air districts are working to expand this program in Cal ifornia.

ARB is developing a regulation for truck efficiency upgrades to cut greenhouse gases, for consideration by the Board in 2008.

d) Outreach to small businesses for infrastructure construction

AB 761 (Chapter 611, Statutes of 2007) imposes requ irements on State agencies awarding bond-funded contracts to encourage the par ticipation of small businesses in the construction of the State’s infrastructure. Go vernment Code Section 14838.1. Under SB 88, ARB cannot directly award contracts to build infrastructure under the Goods Movement Emission Reduction Program and is th erefore not subject to the requirements of AB 761. However, ARB can impose re quirements to meet the spirit of the law when it provides funds via grant agreements to local agencies to build the electric infrastructure to support both grid-based shore power for ships at berth and electric truck pedestals at truck stops or distribu tion centers.

For grid-based shore power and truck stop/distribut ion center electrification projects, the local agency shall design and implement a targeted outreach program to encourage small businesses to participate in the construction , alteration, demolition, repair, or improvement of the project infrastructure funded by the bond Program. Outreach shall include advertising opportunities to bid for projec ts (as applicable), providing the bidding procedures, and providing California small business es with information on available training and technical assistance for understanding and bidding on contracts.

A local agency that receives funding for these equi pment project types shall keep statistics on small business and microbusiness part icipation in any contracts for this equipment installation. The local agency shall inc lude these statistics in project data updates and reports to ARB.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 64 Fe bruary 2008

3. Local agency solicitation of equipment projects

A local agency may include provisions for more than one solicitation for each Program grant. If multiple solicitations are conducted, th ey shall not occur until equipment project applicants in the prior solicitation are notified o f the results of their applications.

The documentation on the solicitation process shall include, but is not limited to, the following:

• Start and end dates for the equipment project appl ication period.

• A list of materials in the information packet (see below).

• A solicitation schedule with milestones.

The local agency shall make an information packet a vailable to equipment owners who may be interested in applying for funding. This pa cket shall include the equipment project application, plus materials that describe a ll of the following:

• Application submittal information (how, where, by when, to whom).

• The Program and purpose for the solicitation.

• The equipment eligible for Program funding, includ ing equipment project requirements and conditions (e.g. equipment inspect ions and any associated requirement for the equipment owner to bring equipm ent to a designated location, 100% California operation, scrap old equipment, leg ally binding contract and contract terms, etc.).

• Limits on available funding per piece of equipment

.

• Equipment application disclosure language, and cle ar statement that new equipment funded by this program can only be purchased or ord ered once the contract is signed between the equipment owner and local agency

.

• The equipment project review and competitive ranki ng process for equipment projects.

• The payment process, including invoice payments an d direct payments to vendors (as applicable).

• Remedies for contract non-performance.

• The reporting requirements.

• The ongoing equipment evaluation and auditing proc ess.

4. Review of equipment project applications

The local agency shall review equipment project app lications for eligibility and content, including whether an application is submitted in go od faith, credible, or in compliance with the Program Guidelines.

At minimum, the local agency review of equipment pr oject applications shall include:

• Assignment of a unique equipment project number fo r tracking purposes as specified by ARB staff.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 65 Fe bruary 2008 • Verification of the equipment owner’s eligibility to participate in the Program.

• Verification that the proposed equipment project i s consistent with the Guidelines.

• Determination that all data and information necess ary to calculate benefits and costs consistent with approved ARB methods are included.

5. Match funding for equipment projects

Local air districts cannot combine funding from thi s Program and direct funding from the Carl Moyer program on the same equipment project (i .e., funds directly authorized under H&S §44091.1(a) and Public Resources Code §42 889).

In response to air district requests, ARB staff has evaluated whether some “passthrough” vehicle registration fees that can be used in the Carl Moyer program may also be used for match funding under this Program. Unde r AB 923 (Chapter 707, Statutes of 2004), the $2 surcharge on the vehicle registration fee can be used for match funding of Proposition 1B projects involving the accelerated r etirement, repowering, or retrofitting of trucks. Conversely, the $2 surcharge cannot be used under this Program for match funding on non-motor vehicle sources, such as locom otives, harbor craft, cargo ships, and off-road cargo equipment.

Program funds and the $2 surcharge may be combined on the same equipment project if all of the following conditions are met: (a) th e equipment project option(s) to be funded includes only trucks, (b) the equipment proj ect meets both bond Program eligibility requirements and Carl Moyer funding cri teria, (c) the equipment project does not exceed the Carl Moyer Program cost-effectivenes s limit, with the project cost including both Program and AB923 funds, and (d) the $2 surcharge funds are not counted as part of an air district’s Carl Moyer mat ch requirement.

For the purpose of competitively ranking local agen cy and equipment projects under this Program, the calculation of reductions per State do llar invested must treat both bond Program monies and the $2 surcharge monies as State funds since the surcharge monies would otherwise be used in the Moyer Program

.

6. Competitive ranking and selection of equipment p rojects

Local agencies shall use a quantitative approach to develop a competitively ranked list of eligible equipment projects. This process will be applied to competing equipment projects within each trade corridor, source categor y, and funding category. The following procedures for local agencies to rank and select equipment projects are based on the quantitative process ARB will use to competi tively rank and select local agency projects. Chapter II.D.6 provides additional expla nation of the elements of this process and Figure 1 in that section illustrates how the co mpetitive process works.

The competitive ranking shall be quantitative based on multiple factors – emission reductions and a measure of cost-effectiveness that considers match funding. The calculation of emission reductions uses the Carl Mo yer program protocol of weighting combustion PM emissions (essentially diesel PM) by a factor of 20 relative to otherProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 66 Fe bruary 2008 pollutants to account for the greater health impact s of PM per ton of emissions. This protocol helps target Program funding to the projec ts that will achieve the greatest reduction in health risk.

The local agency shall publish the list of competit ively ranked projects on the agency website and provide a link to ARB’s Program website

.

a) Emission reduction score

For each equipment project within a source category , the local agency shall review the equipment owner’s estimate of the total pollutant-w eighted emission reductions in California, over the project life, based on the Pro ject Benefits Calculator.

Emission reductions

= Reduction in NOx + (combustion PM x 20) emission s in California over the project life in pounds

The local agency shall list all equipment projects within the same source category and eligible under the same local agency project grant agreement, in descending order of emission reductions, with the greatest emission red uctions on top and the lowest emission reductions on the bottom. The agency shal l number or score each project starting at the bottom with a score of 1 and contin uing consecutively to the top project. For example, if there are 8 project proposals, the one with the greatest emission reductions would receive a score of 8.

Emission Reduction Score = number from above evaluation

b) Cost-effectiveness and match score

For each equipment project within a source category , the local agency staff shall review the equipment owner’s estimate of the total polluta nt-weighted emission reductions in pounds (as determined above), divided by the total State funding proposed for the project. Total State funding includes requested Pr ogram funds, plus any other State dollars – see discussion under Chapter II.D.5 Matc h Funding, on treatment of the $2 vehicle registration fee surcharge under AB 923 as State dollars.

Cost-effectiveness and match = weighted emission reductions (lbs)/total State $

The local agency shall list all equipment projects within the same source category and eligible under the same local agency project grant agreement, in descending order of emission reductions per State dollar, with the high est number on top and the lowest number on the bottom. The local agency shall numbe r or score each project starting at the bottom with a score of 1 and continuing consecu tively to the top project. For example, with 8 equipment project proposals, the on e with the greatest emission reductions per State dollar would receive a score o f 8.

Cost-Effectiveness and Match Score = number in above evaluationProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 67 Fe bruary 2008

c) Competitive ranking

The local agency shall add the Emission Reduction S core to the Cost-Effectiveness and Match Score to determine the final points for each equipment project. The agency shall rank equipment projects within the source category covered by the grant agreement from highest points to lowest points to create the competitive ranking list.

Note: eligible projects to upgrade switcher locomo tives shall automatically be ranked above other types of competing locomotive equipment project options, consistent with the statutory direction to give funding priority to switchers.

d) Application of available funding

The local agency shall apply the available grant do llars (minus allowed administration funding) to the list of competitively ranked equipm ent projects within the source category. The local agency shall award grant funds to the top project and continue down the competitive ranking list until the grant f unds are exhausted.

e) Equipment project backup list

The local agency shall maintain an equipment projec t backup list comprised of the projects on the competitive ranking list that did n ot receive funding. Equipment projects on this backup list are available for Program fundi ng, in the order established on the competitive ranking list, if additional funds becom e available. Funds may become available when an equipment project selected for fu nding doesn’t pass the preinspection, when an equipment owner voluntarily wit hdraws from the Program prior to execution of an equipment project contract, or for other reasons.

As funding becomes available, local agency staff sh all make a reasonable effort to contact the equipment owner with the top unfunded e quipment project on the competitive ranking list to (a) determine if the ow ner is still interested in participating in the Program, and (b) obtain an updated signed equip ment project application disclosure statement to verify that the equipment owner has no t applied for Program funds elsewhere. If the local agency is unable to procee d with the top equipment project after a reasonable effort, the agency may proceed with th e next equipment project on the backup list.

7. Compliance check

The local agency shall conduct a compliance check o n the old vehicle for all truck replacement, repower or retrofit projects proposed for funding prior to executing an equipment project contract to ensure the equipment owner does not have any outstanding air pollution-related equipment violati ons. To complete the compliance check, the local agency shall email the following i nformation for each truck to designated ARB Program staff:Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 68 Fe bruary 2008 • Name of registered owner of the equipment.

• Name of the equipment operator (if different).

• Vehicle identification number.

• Vehicle license plate number.

• California Highway Patrol number (CA Number).

• U.S. Department of Transportation number or Inters tate Commerce Commission number.

Due to the large number of vehicles that could requ ire compliance checks, local agencies are encouraged to submit these data as soo n as possible after receipt of the application.

ARB Program staff shall work with Enforcement Divis ion staff to obtain the information and email the results of the compliance check to th e local agency within ten working days.

If the compliance check indicates there is an outst anding violation, the equipment project application shall be disqualified. The loc al agency shall inform the engine owner in writing that the equipment project application h as been disqualified for funding, and that the owner must correct the violation and pay a ny applicable fines.

8. Equipment project pre-inspections

The local agency shall conduct and document equipme nt project pre-inspections after the local agency has identified equipment projects for funding under this Program. Preinspections shall occur prior to the execution of a n equipment project contract and must be conducted by local agency equipment inspectors o r their designated contractors.

The pre-inspection for each source category shall, at a minimum, include :

• Collection of the owner’s name, address and teleph one number.

• Identification of the location of the engine (busi ness, ship berth or truck facility).

• Collection of the serial number of the baseline en gine and any additional information necessary to assist in the verification of the base line engine application information. For engines without a visible and legible serial nu mber, the local agency inspector must stamp the engine block with the Program equipm ent project number. The inspector must be present to personally verify engi ne removal or must be provided documentation and photographic evidence of the equi pment before and after the engine destruction for these engines.

• Collection of baseline information on ship activit y at the berth or truck activity at the truck stop or distribution center.

• Photographic, digital documentation for the projec t file of each piece of equipment being pre-inspected. The photographic documentatio n shall include:

o The serial number of the engine (if legible) or Pr ogram equipment project number.

o License plates or other distinguishing identificat ion that is visible on the equipment.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 69 Fe bruary 2008 o A photograph that captures a full view of the equi pment being inspected (e.g. the entire truck, vessel, locomotive, etc.).

• Description of the local agency’s method for catal oging, referencing, storing, and easily retrieving project-specific photos.

• Verification by meter reading of the equipment usa ge (hours or miles), and that the usage reported in the equipment project application is reasonable given the usage meter reading.

• Verification that the engine is operational (with a start-up) and is working as described in the equipment project application (doc ument function and use).

• Verification that engines subject to the software upgrades for diesel truck retrofit projects (i.e. chip reflash) have completed the upg rade.

9. Notifications to equipment owners

The local agency shall notify equipment project app licants of the status of their applications. Notifications shall be in writing, a nd occur within a reasonable time after the end of the solicitation period.

At minimum, written notifications shall include the following:

• A clear statement whether or not the equipment pro ject is eligible for Program funds.

• If equipment project is eligible, the notification shall include a clear statement indicating whether the equipment project was select ed for funding or placed on the backup list.

• If the equipment project is funded, the notificati on shall include:

- Total Program funding amount for equipment project

.

- Information and deadlines for scheduling a pre-ins pection.

- Language indicating Program funding is contingent on passing the equipment pre-inspection.

- Information and deadlines for executing equipment project contracts, applying for direct payments to vendors (if applicable), post-in spection requirements, deadlines to complete the project, and the process for obtaining Program funds through invoice payments.

• If the equipment project is placed on the backup l ist, the notification shall include information pertaining to the potential for future funding of the equipment project.

• If the equipment project is not being considered f or Program funding, the notification shall include information about the equipment owner ’s ability to apply for other incentive funding opportunities or the ability to p articipate for Program funding in future years.

10. Equipment project contracts

The local agency shall obligate funds for each equi pment project as described in these Guidelines. These funding commitments shall become legally enforceable only through executed contracts between the local agency and equ ipment owner.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 70 Fe bruary 2008 Equipment project contracts shall be executed withi n one year following execution of the local agency project grant agreement between ARB an d the local agency. For FY2007-08, all equipment project contracts shall be executed within 18 months of the execution of the local agency project grant agreeme nt.

Local agency staff shall prepare and submit for rev iew and signature two signed copies of the contract for Program funding to be signed by the equipment owner. After an equipment owner signs two copies of the contract ag reement, the local agency shall retain one fully executed copy for its files, and r eturn one fully executed copy to the equipment owner.

At a minimum, an equipment project contract shall c ontain the following provisions:

a) Standard contract provisions

• Contract number—unique tracking number provided by local agency for each contract.

• Effective date.

• Term of contract.

• Equipment owner contact information.

• Indemnification—equipment owner agrees to indemnif y and hold harmless ARB and the local agency for any liability arising out of t he performance by the equipment

owner.

• Severability—remaining provisions of a contract co ntinue in effect even if a court holds a specific provision invalid.

• Force majeure—ARB, local agency, and equipment own er are not liable for delay or failure in performance resulting from acts beyond t heir control.

• Contract amendments—amendments shall only occur by mutual agreement in writing and signed by all parties.

b) General Program provisions

• Application-incorporate by reference the original equipment owner application.

• Reporting requirements— equipment owner is respons ible for submitting annual reports to the local agency.

• Ongoing evaluations and audits— equipment owner ag rees to allow ongoing evaluations and audits of equipment and documentati on by the local agency, ARB, or their designated representative(s).

• Records access requirements—equipment owner agrees to allow the local agency, ARB, or their designated representative(s) access t o evaluate or audit Program records.

• Recordkeeping requirements—equipment owner agrees to retain all records pertaining to the Program, i.e. invoices, contracts , and correspondence for at least two years after equipment project ends or three yea rs after final payment, whichever is later.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 71 Fe bruary 2008 • Enforcement—provisions authorizing the local agenc y to inspect equipment projects to enforce contract terms.

• Equipment project contract non-performance include s, but is not limited to:

o Failure to meet the terms and conditions of an exe cuted equipment project contract.

o Equipment/engine is non-operational or malfunction ing.

o Failure to meet established deadlines for equipmen t project completion.

o Failure to allow for an electronic monitoring devi ce, or tampering with an installed device or data.

o Misuse of direct payments to vendors provisions.

o Insufficient, incomplete, or faulty equipment proj ect documentation.

o Failure to provide required documentation or repor ts in a timely manner.

• Remedies for non-performance include, but are not limited to:

o Recovery of funds.

o Other fiscal penalties on equipment owners based o n the severity of the non-performance.

o Cancellation of the contract.

o A ban on the equipment owner’s ability to particip ate in future State incentive programs.

o Prohibiting a specific piece of equipment from par ticipating in another State incentive program.

• Contract transfer provisions—provisions allowing f or the transfer of the remaining contract terms to a new equipment owner.

• Direct payments to dealers or manufacturers—allowa nce for local agency payments to go directly to vehicle or equipment dealers or m anufacturers in the case of approved direct payments to vendors.

• Independent contractor—equipment owner is an indep endent contractor and none of equipment owner’s agents shall be construed as agen ts or employees of ARB or the local agency.

• Equipment maintenance—equipment owner is responsib le for maintaining Programfunded engines or equipment in good operating condi tion and according to manufacturer’s recommendations.

• Time is of the essence—time is of the essence in t he performance of all contracts.

• Program acknowledgment—equipment owner agrees to a cknowledge the Program as a funding source in any related media events or other publicity material.

c) Source category-specific elements

• Equipment project description.

• Total cost for the equipment project.

• Project cost breakdown (including technology/equip ment purchase, labor for retrofit/installation, etc.).

• Eligible costs--costs directly tied to the purchas e of ARB-approved equipment projects.

• Total Program funds for the project.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 72 Fe bruary 2008 • Non-State match funds and source(s) of those funds —includes cash, in-kind, or other sources.

• Ineligible costs—costs not directly tied to the pu rchase of ARB-approved equipment projects.

• Project performance benchmarks—the expected activi ty and emission reductions from the new equipment.

• Project inspections—equipment owner agrees to pre- inspection by the local agency of old equipment prior to the execution of a contra ct and post-inspection of the new/upgraded equipment prior to final payment.

• Project schedule—timeframe required to complete eq uipment project including major milestones.

• Schedule to expend funds—estimated schedule for lo cal agency to expend Program funds to the equipment owner.

• Request for payment—steps required for equipment o wners to request expenditure of Program funds, including direct payments to vend ors (if applicable).

• Equipment warranty/insurance—equipment owner is re sponsible for securing warranty and maintaining insurance on the new equip ment sufficient to repay the State’s investment in case of major damage.

• Electronic monitoring devices—provisions requiring equipment owners to agree to the installation and use of an electronic monitorin g device at any time during the contract term.

11. Tax reporting

The local agency shall comply with all State and fe deral tax reporting requirements associated with the payment of Program funds to equ ipment owners. This may include requiring the submittal of tax information using fe deral tax Form W-9, and issuing a federal Form 1099 to the equipment owner receiving grant funds. The local agency shall also report the applicable tax information to the California Franchise Tax Board and federal Internal Revenue Service.

12. Provisions for lease-to-own programs

The local agency may propose to use lease-to-own pr ogram(s) as part of the truck replacement option for both truck source categories . A description of the lease-to-own program shall be included in the local agency proje ct application. Lease-to-own programs shall comply with the following minimum re quirements:

• The equipment project application must be signed a nd submitted by the owner of the new truck, and must include information on the truc k to be replaced and the proposed lessee.

• Equipment project contracts shall hold both the eq uipment owner and lessee legally liable (i.e. jointly and severally) for complying w ith the contract and Program requirements.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 73 Fe bruary 2008 - The equipment project contract may allow certain p rovisions to apply solely to the equipment owner (e.g. financial requirements) or le ssee (e.g. operational requirements), so long as the local agency maintain s the ability to enforce all remedies for non-performance under the contract, in cluding the recovery of funds or repossession of the truck, if necessary.

- A local agency may also establish separate legally binding agreements with the equipment owner and the truck operator (lessee). I n this case, both agreements must specify the ability of the local agency and eq uipment owner to enforce all remedies for any lessee’s non-performance under an equipment project contract.

• Grant funds shall only be used to offset the capit al cost of the truck and shall reduce the principal owed by the lessee to purchase the tr uck. The owner shall not impose a charge on the lessee for any portion of the Progr am funds as a component of the lease payments. The owner may set a lease payment schedule that recoups his or her out-of-pocket investment to purchase the new tr uck and a reasonable rate of interest over the term of the lease. Equipment pro ject funds shall not be applied toward administration costs.

• As a remedy for the non-performance of a lessee un der the equipment project contract, the truck owner, with local agency approv al, may transfer the truck to a new lessee, so long as the new lessee agrees to sig n an equipment project contract under the same provisions, for the remaining contra ct term.

• A truck project participating in a lease-to-own pr ogram shall be subject to the same Program requirements as any other truck competing f or funding under that local agency project. If the funded local agency project includes multiple equipment project options, or multiple implementation approac hes, a local agency shall not preferentially fund trucks in the lease-to-own prog ram – they must compete against all other truck projects within that source categor y and trade corridor.

• Local agencies interested in proposing Program fun ding for lease-to-own programs shall contact ARB staff for a list of financial dat a that must be collected as part of the equipment project application.

13. Equipment project scrap requirements

The local agency shall ensure that old equipment is scrapped (permanently removed from service) and associated materials disposed of in an environmentally acceptable manner, in accordance with these Guidelines and any applicable federal, state or local laws, regulations or requirements.

Scrapping operations and material disposal applies to the following:

• Truck engine repowers and truck replacement projec ts

• Harbor craft engine repowers and vessel replacemen t projects, and

• Locomotive engine repowers and new replacement pro jectsProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 74 Fe bruary 2008 Local agencies shall be responsible for implementin g procedures for collecting all necessary information prior to scrap/disposal activ ities (e.g. during the pre-inspection). All information collected and recorded must be read ily accessible to verify that scrap and disposal procedures were conducted for the appr opriate engine, vehicle, vessel or locomotive. Documentation shall be available to AR B, or its designee to support ongoing program evaluations or audits as necessary.

The following procedures must be implemented for al l repower and replacement projects:

• Prior to destruction, old equipment must be in ope rable working condition as documented in the equipment pre-inspection.

• The old equipment engine block (for repower projec ts) or vehicle/vessel/locomotive, including the frame and engine (for replacement pro jects) shall be physically destroyed in such a manner to eliminate the possibi lity of future operation. Engine blocks shall be punctured, and the vehicle, vessel or locomotive frame structure shall be dismantled, cut and/or demolished to rende r the equipment useless to prevent repeated use.

• Licensed dismantlers are required to enter into an agreement with the local agency to qualify for participation. Dismantlers are requ ired to be licensed by the Department of Motor Vehicles (DMV) (for auto-disman tlers), and have also have a valid California Environmental Protection Agency (C al/EPA) Hazardous Materials Generators Permit. In addition, the dismantler mus t ensure compliance with any federal, state and local material disposal requirem ents, regulations, permits or requirements.

• Funding is not available for any salvage or materi al disposal costs, including hazardous waste abatement fees, labor costs, fines, permits, or other charges resulting from destruction or disposal.

• All equipment to be scrapped must have a complete, visible, and legible serial number or a stamp of the Program equipment project number applied at the time of pre-inspection by the local agency inspector.

• The local agency or its designee must obtain digit al documentation, see below, to ensure the engine identified in the equipment contr act and the pre-inspection is the one that is to be scrapped. This documentation incl udes specific pictures to be taken before the engine is destroyed as well as photos af ter the engine is destroyed.

The destruction of any engine without a verifiable serial number or Program equipment project number stamped on the equipment at the time of the equipment pre-inspection does not fulfill the scrappage requirement under th is Program.

The local agency must ensure the following addition al requirements for each piece of equipment is undertaken:Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 75 Fe bruary 2008 Table 3.1 Equipment Project Scrap Requirements Source Category Equipment

Project Option Additional Scrappage Requirements

Option (1) Retrofit Not applicable.

Option (2) Repower • The licensed dismantler must dismantle and destroy the old

vehicle’s engine and destroy within 60 days of rece ipt. The engine destruction must be done in accordance with program guidelines.

• The local agency or its designee must provide digi tal photographs, described below, showing the destructi on of the old engine. The local agency must receive these ph otos within 10 business days of the engine being scrapped.

• The following digital photos must be taken and lab eled for the project file: 1. Front of vehicle with hood down. 2. Right side of vehicle with hood down. 3. Left side of vehicle with hood down. 4. Serial number that is printed either on the tag inside in the cab or on the frame rail. 5. Engine side view (within and outside of engine compartment). 6. Engine serial number either stamped on the block or on the tag. 7. Destroyed engine block either inside or outside truck body. Trucks Serving Ports and Intermodal Rail Yards

and

Other Heavy Duty Diesel Trucks

Option (3)

Replacement In addition to the requirements listed above for en gine repower

projects, replacement projects must also:

• Cut the old vehicle frame rails to ensure that the vehicle shall not be used again.

• Have digital photo documentation to show the old v ehicle was dismantled/ destroyed.

• The equipment owner must file a VIN hold with DMV, and a “Non-Repairable Vehicle Certificate” with the DMV a nd submit a copy to the local agency at the time of the post- inspection.

Other Heavy Duty Diesel Trucks Option (4)

Three-way Truck Transactions For this equipment project option, Truck B, which i s a MY1990 or

older heavy duty diesel truck, must:

• Dismantle and destroy the vehicle’s engine in acco rdance to the scrappage requirements list for this source cat egory, equipment project option (2) repower; and

• Follow the scrappage requirements listed above for this source category, equipment project option (3) replacement.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 76 Fe bruary 2008 Table 3.1 Equipment Project Scrap Requirements (co ntinued) Source Category Equipment

Project Option Additional Scrappage Requirements

Locomotives Options

(1) & (2) Locomotives (for locomotive engine scrappage)

The licensed dismantler must dismantle and destroy the old locomotive engine.

• The local agency or its designee must provide digi tal photographs, described below, showing the destructi on of the old locomotive engine. The local agency must receive these photos within 10 business days of the engine being scrapped.

• The following digital picture views must be taken and stored appropriately for later identification in record fi les: 1. Locomotive DOT certification or equivalent tag(s ). 2. Engine side view (within or outside of engine compartment). 3. Engine serial number either stamped on the block or on the tag. 4. Destroyed engine block.

(For locomotive replacements subject to scrappage)

• The licensed dismantler must dismantle and destroy the locomotive engine within 60 days of receipt of the old locomotive engine.

• The local agency or its designee must provide digi tal photographs, described below, showing the destructi on of the old locomotive engine. The local agency must receiv e these photos within 10 business days of the engine being scrapped.

• The following digital picture views must be taken and labeled or catalogued appropriately for later identification i n record files: 1. Locomotive DOT certification or equivalent tag(s ). 2. Locomotive views (front, side, rear). 3. Serial number printed on the locomotive chassis. 4. Engine side view (within or outside of engine compartment). 5. Engine serial number either stamped on the block or on the tag. 6. Destroyed engine block either (installed or remo ved from engine housing area).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 77 Fe bruary 2008 Table 3.1 Equipment Project Scrap Requirements (co ntinued) Source Category Equipment

Project Option Additional Scrappage Requirements

Options (1) & (2) (specific to repower) • The licensed dismantler must dismantle and destroy the old

vessel engine within 60 days of receipt. The engin e destruction must be done in accordance with program guidelines.

• The local agency or its designee must provide digi tal photographs, described below, showing the destructi on of the old vessel engine. The local agency must receive t hese photos within 10 business days of the engine being scrappe d.

• The following photos must be taken and labeled for the project file: 1. Serial number printed either on the tag inside t he marine vessel showing the ID and US Coast Guard registrati on (if applicable). 2. Engine side view (within or outside of engine co mpartment). 3. Engine serial number either stamped on the blockor on the tag. 4. Destroyed engine block either (installed or remo ved from engine housing area). 5. Marine vessel identification tags and photos tak en of the hull and stern of the marine vessel. Harbor Craft

Options

(1) & (2) (additional requirements for replacements) • In addition to the requirements listed above for h arbor craft

engine repower projects, replacement vessel project s must also:

• The licensed salvage yard must dismantle and destr oy the old vessel within 60 days of receipt of the old vessel. The destruction must be done in accordance with these P rogram Guidelines.

• Have photo documentation to show evidence of the o ld vessel being destroyed.

14. Equipment project post-inspections

The local agency shall conduct and document equipme nt project post-inspections on all Program-funded equipment projects.

The post-inspection shall occur before final grant funding payments are made by the local agency to the equipment owner, and after the local agency has a valid invoice from the equipment owner.

If the equipment project was approved for a direct payment to a vendor, the postinspection shall occur within 30 days of the equipm ent owner receiving the fully operational equipment (unless otherwise stated in t he specific post-inspection requirement table).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 78 Fe bruary 2008 Post-inspections for all equipment projects shall i nclude, but are not limited to, the following requirements:

• Collection of the equipment owner’s name, mailing address and telephone number.

• Verification of equipment application information with new equipment to ensure the new equipment is consistent with the equipment desc ribed in the equipment application.

• Documentation of new equipment identifiers and spe cifications (e.g. VIN number for new trucks, serial numbers for new engines, etc.)

• Digital photographic documentation of the equipmen t that is being post-inspected for the project file. This documentation shall include:

o A photograph of the serial number of the engine;

o A photograph of the license plates or other distin guishing identification that are visible on the equipment; and

o A photograph of the captures the full piece of equ ipment (i.e. the entire truck, vessel, locomotive, etc.) that is being inspected.

• Methods for cataloging, referencing, storing, and easily retrieving specific equipment project documentation and photographs.

• Visual witness and verification that the vehicle/e ngine/equipment is operational as stated in the contract. The inspector must visuall y witness and verify all engine start up and mobile equipment projects operating properly

.

• Verification of the destruction of the old/replace d equipment (engine, vehicle, vessel, or locomotive), where applicable.

In addition to the general post-inspection requirem ents above, Table 3.2 provides additional post-inspection requirements for each so urce category and equipment project option.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 79 Fe bruary 2008 Table 3.2 Post-Inspection Requirements Source Category Equipment

Project Option Additional Requirements

Option (1) Retrofit • Name of retrofit manufacturer.

• Product serial number.

• Month and year the device was manufactured (if not listed on retrofit label, information can be obtained from the retrofit manufacturer by reference to serial number ).

• DECS family name.

• Engine family name and number.

• Dates of when retrofit device was installed (start and end).

• Name and address of company that installed the dev ice. Option (2) Repower • Month and year that the engine was manufactured.

• Address and name of company that installed the repowered engine.

• Start and end dates to install this repower proje ct.

• Copy of ARB Executive Order documenting that the n ew engine is certified to 2007 emission levels for thi s Program.

• Engine family name and number.

• Engine make, model, model year.

• Engine serial number. Trucks Serving Ports and Intermodal Rail Yards

Option (3)

Replacement • Vehicle type.

• Vehicle identification number (VIN).

• Vehicle make, model, model year.

• Gross vehicle weight rating (GVWR).

• Fuel type.

• Vehicle license plate.

• CA highway patrol number.

• Engine family name and number.

• Engine make, model year, engine year.

• Copy of ARB Executive Order documenting that the n ew engine is certified to 2007 emission levels for thi s Program. Other Heavy Duty Diesel Trucks Option (1)

Retrofit • Name of retrofit manufacturer.

• Product serial number.

• Month and year the device was manufactured (if not listed on retrofit label, information may be obtained from the retrofit manufacturer by reference to serial number ).

• DECS family name.

• Engine family name and number.

• Date of when retrofit device was installed.

• Name and address of company that installed the dev ice.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 80 Fe bruary 2008 Table 3.2 Post-Inspection Requirements (continued) Source Category Equipment

Project Option Additional Requirements

Option (2) Repower • Month and year that the engine was manufactured.

• Address and name of company that installed the repowered engine.

• The start date and end date of the installation t his repower project.

• Copy of ARB Executive Order documenting that the n ew engine is certified to 2007 emission levels for thi s Program.

• Engine family name and number.

• Engine make, model, model year.

• Engine serial number.

Option (3) Replacement • Vehicle type.

• Vehicle identification number (VIN).

• Vehicle make, model, model year.

• Gross vehicle weight rating (GVWR).

• Fuel type.

• Vehicle license plate.

• CA highway patrol number.

• Engine family name and number.

• Engine make, model year, engine year.

• Copy of ARB Executive Order documenting that the n ew engine is certified to 2007 emission levels for thi s Program. Other Heavy Duty Diesel Trucks (continued)

Option (4)

Three-way Truck Transaction *

See individual post inspection requirements for ret rofit (applicable to the newer truck—truck A) and replace ment (applicable to the new MY 2007 truck –truck C).

Truck stop/ distribution center See

Appendix G See Appendix G.

Option (1) Switchers Locomotives

Option (2)

Line-hauls • Locomotive engine must be operated under its own p ower

under loaded conditions.

• Engine make, model, engine year and serial number for repower and replacement projects.

• Start and end dates of when locomotive was repower ed.

• Address and name of company that repowered the locomotive engine.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 81 Fe bruary 2008 Table 3.2 Post-Inspection Requirements (continued) Source Category Equipment

Project Option Additional Requirements

Option (1) Grid based shore power • A ship must be plugged into berth to demonstrate t o the

inspector that it is in proper working order.

• Inspection shall occur within 60 days of equipment owner receiving the fully operational equipment.

• Verification that this project serves the intended berth. Shore Power

Option (2)

Non-grid based shore power • Ship must be plugged into berth to demonstrate to the

inspector that it is in proper working order.

• Inspection shall occur within 60 days of equipment owner receiving the fully operational equipment.

• Verification that this project serves the intended berth(s).

Options (1) & (2) Repower • Inspection shall occur within 60 days of equipment owner

receiving the fully operational equipment.

• For all repowered main engines, document the engin e family name, engine make, model year, and serial number listed, and the engine fuel type.

• Documentation of ARB engine certification.

• Start and end dates of dry dock time.

• Address and name of company that did the engine repower. Commercial Harbor Craft

Options

(1) & (2) Replacement • For all repowered main engines, document the engin e

family name, engine make, model year, and serial number listed, and the engine fuel type.

• Start and end dates of dry dock time.

• Address and name of company that replaced the engine(s).

• Inspection shall occur within 90 days of equipment owner receiving the fully operational equipment.

Cargo Handing Equipment Option (1)

Energy Storage System • Name of retrofit manufacturer.

• Retrofit serial number, and month/year of manufact ure.

• If engine or equipment was installed to meet Progr am eligibility requirements concurrent with the energy storage system: engine family name, make, model year, seria l number, fuel type, and horsepower; retrofit name, s erial number, date of manufacture.

15. Local agency requests to ARB for grant funds

The local agency may request grant funds from ARB b y submitting a valid Grant Expenditure Request by an authorized local agency r epresentative acting under a fully executed Local Agency Project Grant Agreement. ARB’s expenditure requirements and provisions are detailed in Chapter II.E.2.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 82 Fe bruary 2008

16. Local agency non-performance provisions

The local agency shall be held responsible for the implementation of the local agency project. Local agency non-performance provisions a nd requirements are included in Chapter II.E.7 of these guidelines.


### E. Obligations, Expenditures, and Earned Interest

1. Local agency obligation of funds to equipment ow ners

In FY2007-08 only, local agencies shall obligate Pr ogram funds via executed equipment project contracts no later than 18 months from the date of the executed Local Agency Project Grant Agreement between ARB and the local a gency.

After FY2007-08, local agencies shall obligate Prog ram funds no later than 1 year from the date of the executed Local Agency Project Grant Agreement between ARB and the local agency.

Note: Once a local agency has an executed equipment project contract, Program funds must be spent according to the terms of the contrac t, or they revert back to the California Ports Infrastructure, Security, and Air Quality Improvement Account. Local agencies are prohibited by statute from re-directin g Program funds from failed contracts to another eligible equipment project.

2. Local agency expenditures on equipment projects

a) Expenditure deadlines for equipment projects

Local agencies shall comply with the following dead lines to liquidate Program funds. These expenditure deadlines represent the maximum t ime allowed from the equipment project contract execution date to the expenditure of Program funds to complete and close out an equipment project:

• 1 year to verify project completion/close out paym ent for cargo equipment projects.

• 18 months to verify project completion/close out p ayment for truck retrofit, repower, and replacement projects.

• 2 years to verify project completion/close out pay ment for locomotive projects and non-grid shore power projects.

• 3 years to verify project completion, obtain at le ast one year of data on actual use, and close out payment for truck stop or distributio n center electrification projects.

• 4 years to verify project completion/close out pay ment for harbor craft projects and grid-based shore power projects.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 83 Fe bruary 2008

b) Equipment project purchase restrictions

Local agencies shall not reimburse equipment projec t applicants for orders or any payments on a new engine, piece of equipment, or ve hicle that take place prior to local agency approval of the project through contract exe cution.

Dealers ordering engines, equipment, or vehicles pr ior to contract execution assume all financial risk, and are in no way assured grant fun ds.

An equipment owner may not receive engines, equipme nt, or vehicles, nor may work begin on a repower or retrofit project or a project to install electrical infrastructure, until the project contract is fully executed.

c) Invoice payments (reimbursements)

With the exception of approved direct payments to v endors as described in Chapter III.E.2.d, local agencies shall only expend Program funds through invoice payments. Invoice payments provide Program funding to equipment owners on a reimbursement basis.

After receiving a satisfactory post-inspection from the local agencies on completed equipment projects, equipment owners shall complete and submit itemized invoices for currently operational new engines, vehicles, or pie ces of equipment to the local agency for reimbursement.

An invoice shall be itemized to include enough deta il to ensure that the local agency provides reimbursement only for eligible project co sts, yet be clear and concise enough to be understandable. The local agency shall revie w the itemized invoice and only pay for eligible expenses up to the funding caps establ ished by these Guidelines and the local agency project grant agreement.

Equipment owners shall not request or receive payme nts for engines, vehicles, equipment, or electric infrastructure that are non- operational; taxes; consulting services; license; registration; insurance, or any other cost s not eligible for Program funds.

Charges for equipment and parts on engine repower p rojects are only eligible for funding if they are required to ensure the effectiv e installation and functioning of the new engine and achieve the expected emissions performan ce, but are not part of typical vehicle or equipment maintenance or repair. Exampl es of ineligible repower costs include, but are not limited to: tires, axles, pain t, brakes, and mufflers.

Most labor expenses are not eligible for payment wi th Program funds; the exceptions are labor to install a diesel PM filter on a truck, labor to make necessary vessel modifications and install the new engine in a harbo r craft, and labor to install the electrical infrastructure to supply a ship berth or truck pedestal. Whether reimbursable with Program funds or not, labor expenses shall be included in the itemized invoice with the detailed number of hours charged and the hourly wage.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 84 Fe bruary 2008 Equipment owners may submit a single, itemized invo ice for multiple, completed equipment projects under this Program.

Invoice payments may be made directly to the equipm ent or engine dealer or distributor only if such payment arrangements are specified in the equipment project contract.

The local agency shall maintain copies of all invoi ces and documentation of payment in the equipment project file.

d) Direct payment to vendor

Local agencies shall expend Program funds through i nvoice payments (described above) or according to the direct payment to vendor option described in this section.

• The direct payment to vendor option is only availa ble to truck retrofit and replacement equipment projects, and harbor craft re power and replacement equipment projects.

• Local agencies shall approve all direct payment to vendor requests as part of their equipment project competitive ranking and selection process. Equipment owners are required to request direct payment funding in t he equipment project application.

• Direct payment terms shall be incorporated in the legally binding equipment project contract between the local agency and equipment own er.

• The equipment project contract shall include terms specifying arrangements for the local agency payments to go directly to the engine, truck, or retrofit dealer or manufacturer.

3. Earned interest

The local agency shall track the amount of interest earned on Program funds held in local agency accounts beginning immediately after r eceipt of Program funds from ARB.

a) Calculation of earned interest

The local agency shall maintain accounting records (e.g. general ledger) that track interest earned and expenditures on Program funds.

• If the local agency keeps its Program funds in a n on-segregated account, the local agency shall maintain accounting records that first separates program funds from other funds administered by the local agency and th en further separates earned interest and the related expenditures.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 85 Fe bruary 2008 • The calculation of interest shall be based on an a verage daily balance or some other reasonable and demonstrable method of reallocating the proceeds from the fund back into the program.

• Earned interest shall be tracked such that it is s eparately identifiable from other program funds.

• Each agency’s methodology for calculating Program interest shall be consistent with how it calculates earned interest for its other fis cal programs.

b) Reporting requirement for earned interest

The local agency shall indicate the amount of inter est earned and expended on all Program funds in the semi-annual report.

• Documentation of earned interest generation and ex penditure shall be retained for a minimum of the local agency project grant agreement term plus two years or date of the final equipment project invoice payment plus th ree years, whichever is longer.

c) Earned interest expenditure provisions

The local agency shall expend interest earned from Program funds on eligible equipment projects in the following priority:

• The first priority for expenditure shall be to fun d equipment project options within the same source category identified in the grant agreem ent.

• If the local agency is unable to find or fund equi pment project options within the source category, the earned interest may be applied to equipment project options within the funding category identified in the grant agreement. For example, a local agency with a grant agreement for the shore power s ource category may expend earned interest on rubber tired gantry cranes if an other shore power project is not available or the amount of earned interest is not s ufficient to complete a another shore power project.

If the local agency is authorized to use a portion of the grant for administration funds, the local agency may use up the maximum allowed by these Guidelines for that source category to implement additional projects with the earned interest.

If a local agency is unable to expend all or a port ion of the earned interest, the remaining earned interest shall be returned to ARB for re-allocation.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 86 Fe bruary 2008 

### F. Ongoing Local Agency Evaluations of Equipment Pr ojects

Local agencies shall evaluate equipment projects on an ongoing basis. The ongoing evaluation process is designed to meet the accounta bility requirements of SB 88 and the Governor’s Executive Order S-02-07.

Local agency evaluation efforts shall include, but are not limited to: ongoing desk reviews of reports and equipment project updates pr ovided by equipment owners, review of electronic monitoring unit data (as appli cable), site inspections, equipment inspections, review of equipment maintenance and ac tivity logs, and other measures deemed appropriate by ARB or the local agency.

Equipment owners shall permit the local agency, ARB , the Department of Finance, the Bureau of State Audits, or any authorized designee, access, during normal business hours, to conduct ongoing evaluations for the purpo se of monitoring the Program.


### G. Local Agency Reporting Requirements

Local agencies shall obtain, verify, and submit to ARB all local agency and equipment project reporting information as outlined in these Guidelines.

1. Quarterly data updates

Local agencies shall submit to ARB quarterly data u pdates on all local agency projects and the equipment projects associated with each.

Local agency quarterly data updates shall begin at minimum one quarter after the execution of the grant agreement, and continue unti l the local agency provides ARB with the local agency project completion report (se e below). These quarterly data updates shall be cumulative, reflecting the most cu rrent local agency project information.

Quarterly data updates to ARB shall include the fol lowing information:

• Start and end dates of most recent equipment proje ct solicitation.

• A ranked equipment project list identifying each e quipment project application received by the local agency through the solicitati on process, and containing the following information for each equipment project:

- Weighted emission reductions.

- Total project cost.

- Funding status (funded, funded from backup list, n ot funded).

- Funding amount (amount of Program funds, amount of non-Program funds).

- Equipment project contract status (executed/not ex ecuted).

- Equipment pre-inspection status (scheduled/not-com pleted/completed).

- Equipment post-inspection status (scheduled/not-co mpleted/completed).

- Equipment project status (active/withdrawn/ineligi ble/backup list).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 87 Fe bruary 2008 • Total emission benefits for the local agency proje ct.

• Total Program funds obligated.

• Total Program funds expended/remaining (breakdown by project funds and administration funds).

• Total non-Program funds expended per fiscal year o f funding.

2. Semi-annual report

Local agencies shall submit to ARB semi-annual repo rts.

Local agency semi-annual reports shall begin the ye ar following initial ARB obligation of Program funds to the local agency, and continue for the term of the Local Agency Project Grant Agreement. ARB staff may standardiz e the submittal dates for these reports and notify local agencies. Local agencies shall submit semi-annual reports on the schedule established by ARB. H&S §39625.02(f)( 1) and Executive Order S-02-07.

At minimum, the semi-annual report shall include th e following data:

• Start and end dates of most recent equipment proje ct solicitation.

• The competitively ranked equipment project list id entifying each equipment project application received by the local agency through th e solicitation process, and containing the following information for each equip ment project:

- Description of the equipment project.

- The weighted emission reductions and reductions pe r State dollar invested.

- Funding status (funded, funded from backup list, n ot funded).

- Funding amount (amount of Program funds, amount of non-Program funds).

- Equipment project contract status (executed/not ex ecuted).

- Equipment pre-inspection status (scheduled/not-com pleted/completed).

- Equipment post-inspection status (scheduled/not-co mpleted/completed).

- Equipment project status (active/withdrawn/ineligi ble/backup list).

• The following information for the local agency pro ject:

- Total emission reductions (combustion PM and NOx).

- Total Program funds obligated.

- Total Program funds expended/remaining (break down by project funds and administration funds).

- Total non-Program funds expended by source of fund s.

- Amount of interest earned from Program funds.

- Total interest earned from Program funds.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 88 Fe bruary 2008 At minimum, the semi-annual report shall include th e following qualitative information:

• Costs of funded local agency project compared to t he approved budget for funded local agency project.

• Actions undertaken to ensure funded local agency p roject is being implemented according to budget allocations or a plan for achie ving the benefits of the project by either down-scoping the project or by identifying a lternative funding sources to meet any identified cost increases and remain within bud get.

• Actual timeline and milestones of funded local age ncy project compared to the planned timeline for funded local agency project.

• Actions undertaken to ensure funded local agency p roject is being implemented in a timely fashion.

• Status of equipment project tracking efforts to en sure compliance with operating conditions.

• Status of equipment owner reporting compliance.

• A document signed by the local agency’s Chief Admi nistrative Officer, Chief Financial Officer, and Program Grant Administrator verifying that the equipment project and financial data submitted in the report is complete, accurate, and that there are no known instances of fraud.

• Any other information requested by ARB.

Local agencies shall also submit to ARB copies of e xecuted equipment project contracts. Local agencies may make and submit one complete copy of their standard contract format and then submit only the pertinent pages (initial page, signature page and page(s) describing the equipment project) of th e contract to ARB. Local agencies shall submit only one copy of each contract or the pertinent pages of each contract.

3. Local agency project completion report

Local agencies shall submit to ARB a local agency p roject completion report on the full local agency liquidation of Program funds identifie d in an executed local agency project grant agreement.

The project completion report shall be submitted no later than six months following the full local agency liquidation of Program funds unde r the local agency project grant agreement. H&S §39625.02(f)(2).

This report shall provide information regarding the specific local agency expenditure of Program funds on administration and equipment proje ct costs.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap III: Local Agency Project 89 Fe bruary 2008 At minimum, the local agency project completion rep ort shall include the following:

• A list of the completed equipment projects that in cludes:

- Description of each completed equipment project.

- Copies of invoices that document the amount of Pro gram funds expended for each equipment project.

- Total cost of funded local agency project compared to the approved budget for funded local agency project.

- Actions undertaken to ensure funded local agency p roject was implemented according to budget allocations.

- Actual timeline and milestones of funded local age ncy project compared to the planned timeline for funded local agency project.

- Action undertaken to ensure funded local agency pr oject was implemented in a timely fashion.

- Total emission reductions achieved for each equipm ent project.

• Amount of interest accrued on Program funds.

• List and description of equipment projects funded with earned interest.

• Copies of executed equipment project contracts tha t that were not previously submitted.

• A brief narrative specifying: ongoing evaluation a nd auditing efforts and results; enforcement actions, recaptured funds, and any reve rted funds.

• A document signed by the local agency’s Chief Admi nistrative Officer, Chief Financial Officer, and Program Grant Administrator verifying that the equipment project and financial data submitted in the report is complete, accurate, and that there are no known instances of fraud.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap IV: Gen’l Equipment Project Req’ts 90 Feb ruary 2008 

## IV. General Equipment Project Requirements

A. Ownership Requirements

Equipment project applications shall be signed and submitted only by equipment

owners.

Individuals or companies that operate the existing equipment or will operate the replacement equipment under a lease agreement with the equipment owner are prohibited from applying for bond funding, but may participate if a lease-to-own program is offered by the local agency according to the pro visions outlined in Chapter III.D.12.


### B. Third Party Applications

Third party applications are not allowed. The owne r of the existing equipment must sign and agree to the submittal of the equipment project application.

A third party may, however, complete an application (or part) on the owner’s behalf. Equipment project applications shall include a sign ature section for third parties. The third party signature section shall include signatu re and date lines, and blanks for the third party to list how much they are being paid, i f anything, to complete the application and what source of funds are being used to pay them

. 

### C. Equipment Project Specifications

Equipment owners may refer to Appendices A-G for de scriptions and specifications for the equipment projects eligible for FY2007-08 funds under this Program. However, as described in Chapter III.B.2., local agencies may s ubmit local agency project applications that include allowable project alterna tives.

Equipment owners are advised to carefully review th e information packets provided by local agencies during the equipment project solicit ation period.


### D. Equipment Project Application Requirements

1. Equipment project information

Equipment project applications shall contain the eq uipment project application information identified in Appendices A-G of these G uidelines. This typically includes information on: the equipment owner, the existing equipment, the proposed equipment project (with funding level and project life), cost s, schedules, and operational/activity data to quantify the benefits of the equipment proj ect.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap IV: Gen’l Equipment Project Req’ts 91 Feb ruary 2008

2. Equipment project schedule

Equipment project applications shall include a sche dule for the major milestones listed by source category in Appendices A-G and a commitme nt by the equipment owner to meet the schedule identified in the application. T he equipment project schedule shall also be included as part of the equipment project c ontract signed between the local agency and equipment owner. Adjustments to the sch edule prior to contract execution may only occur with local agency consent.

3. Case-by-case equipment projects

Only equipment project options specifically identif ied in these Guidelines shall be eligible for FY2007-08 funds under this Program. E quipment project options beyond those identified in these Guidelines may be recomme nded to ARB staff for inclusion in future Guideline updates.

4. Disclosures

Equipment project applications shall include disclo sures that the owner shall sign, that include, at minimum:

• Certification that once the equipment owner signs the equipment project application, the owner shall not submit other applications for f unding for the same truck, locomotive, equipment, vessel, berth or facility un der this Program or the Carl Moyer Program.

• Disclosure of any other source(s) of funding that the equipment owner has applied for that would be used for the same equipment proje ct. The disclosure shall identify the source of funds, how much is being applied for, and what the funding would be used for.

• Disclosure of the value of any existing financial incentive that directly reduces the project cost, including tax credits or deductions, grants, or other public financial assistance, for the same equipment project.

• Certification that the equipment owner has reviewe d the application and that the application information is correct.

• Certification that neither the owner nor equipment identified in the equipment project application has any outstanding violations of ARB r egulations.

• Certification that equipment project match funding is reasonably available to complete the equipment project according to the pro posed timeframe.

• Certification that Program funds were not used to previously upgrade the equipment identified in the equipment project application. F or example, an owner of a truck that received funding for a retrofit device under this P rogram may not subsequently submit an application for Program funds to replace that truck.

The equipment owner may be allowed to re-apply for equipment project funding if a previous application for the same project has been rejected and is no longer being considered by a local agency for funding.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap IV: Gen’l Equipment Project Req’ts 92 Feb ruary 2008 An equipment owner who is found to have submitted m ultiple applications for the same equipment project and not disclosed any other reque sted or received financial incentive shall, at a minimum, be disqualified from funding f or that engine from this Program. The equipment owner may also be prohibited from submitt ing future applications to any and all ARB incentive programs or local agency incentiv e programs.

5. Equipment project funding demonstration

Equipment project applications shall require a demo nstration of the availability of the necessary funds to complete the proposed equipment project, including the proposed Program funds, and matching funds from other State, local, federal, or private sources.

Equipment project applications shall identify any l oan programs the equipment owner intends to utilize to fully fund the equipment proj ect.

The total project cost shall include the purchase p rice of the equipment, including shipping charges, and the cost of installation or c onstruction (as applicable). Installation costs shall only include installation of the compon ents necessary to operate the equipment.

• Optional items (such as cigar lighters or custom m ud flaps on trucks) shall be paid at the owner’s expense.

• Taxes, fees, insurance, and other charges may not be included as part of the total project cost.

• Electricity costs may not be included in the proje ct cost.

• Costs for equipment and parts on engine repower pr ojects are only eligible for funding if they are required to ensure the effectiv e installation and functioning of the new engine and achieve the expected emissions perfo rmance, but are not part of typical vehicle or equipment maintenance or repair. Examples of ineligible repower costs include, but are not limited to: tires, axles , paint, brakes, and mufflers.

The equipment owner may estimate the total project cost in the first year of operation.

6. Equipment owner signature

Equipment project applications shall be signed by t he equipment owner and submitted to the local agency with an original signature.


### E. Equipment Project Contract Requirements

Local agencies shall obligate all Program funds for equipment projects through funding commitments that shall become legally enforceable t hrough executed equipment project contracts between the local agency and equipment ow ners. Equipment project contract requirements and terms are contained in Chapter III .D.10.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap IV: Gen’l Equipment Project Req’ts 93 Feb ruary 2008 

### F. Equipment Sales Requirements

Equipment owners with executed equipment project co ntracts with a local agency shall be fully and legally responsible for the operation of equipment funded under this Program in compliance with the conditions of the co ntract. Equipment owners may not assign, sell, transfer, license, or subcontract any rights or obligations to a third party without the express prior written consent of the lo cal agency.

If the original owner of Program-funded equipment c hooses to sell the equipment for any reason, or is required to replace the equipment with cleaner equipment prior to the end of the contract term, the original owner shall notify the local agency and receive prior written consent for the transaction from the local agency.

Prior to completing the transaction, the original o wner shall inform the party purchasing the equipment of the equipment project contract pro visions, and disclose the remaining contract term. The original owner shall be respons ible for establishing contact between the new owner and local agency in order to facilita te the transfer of the contract provisions and terms.

The original owner shall provide the prospective ne w owner with valid contact information for the local agency so the new owner c an assume legal responsibility under the original contract or enter into a new equipment project contract with the local agency, for the remainder of the contract term. Th e original equipment owner who received Program funding shall not be relieved of h is or her legal obligation to fulfill the conditions of the contract unless the new owner has assumed responsibility through an executed contract with the local agency.

If the equipment is sold, and the original equipmen t owner failed to fulfill the responsibilities described in this section, remedie s for equipment project nonperformance shall be imposed.


### G. Equipment Project Non-Performance

All equipment project contracts shall include non-p erformance provisions enforceable by the local agency. Non-performance includes, but is not limited to:

• Failure to meet the terms and conditions of an exe cuted equipment project contract, including but not limited to equipment operating co nditions and geographic restrictions.

• Equipment/engine is non-operational or malfunction ing.

• Failure to meet established deadlines for equipmen t project completion.

• Failure to allow for an electronic monitoring devi ce, or tampering with an installed device or data.

• Misuse of direct payments to vendors provisions.

• Insufficient, incomplete, or faulty equipment proj ect documentation.

• Failure to provide required documentation or repor ts in a timely manner.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Chap IV: Gen’l Equipment Project Req’ts 94 Feb ruary 2008 Remedies for equipment project non-performance may include, but are not limited to:

• Recovery of all or a portion of Program funds.

• Other fiscal penalties on equipment owners based o n the severity of the nonperformance.

• Cancellation of the contract.

• A ban on the equipment owner’s ability to particip ate in future State incentive programs.

• Prohibiting a specific piece of equipment from par ticipating in another State incentive program.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

February 2008 

# APPENDICESProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

February 2008 [this page intentionally blank]Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-1 February 2008 

## APPENDIX A Trucks Serving Ports and Intermodal Rai l Yards

A. Equipment Project Specifications

Trucks Serving Ports and Intermodal Rail Yards
Eligible Equipment Class 8 (>33,000 lbs gross vehicle weight rating) h eavy-duty diesel trucks used to move

goods.

Equipment owner must demonstrate:

• Continuous registration (California base-plated or International Registration Plan) in California for the past 2 years.

• At least 50 percent operation within trade corrido r(s) for the past 2 years.

Ineligible Equipment • Trucks subject to ARB’s public and utility fleet r ule.

• Trucks subject to ARB’s solid waste collection veh icle rule.

• Trucks subject to ARB’s diesel cargo handling equi pment rule.

Option (1) Retrofit

Requirements Partial funding of up to $5,000/truck to retrofit a n eligible MY2006 or older heavy duty

diesel truck with an ARB verified Level 3 diesel pa rticulate filter that reduces diesel PM by 85 percent or more.

• Program-funded diesel particulate filter shall be installed and operational at least 6 months prior to a regulatory requirement for that t echnology or level of emissions control.

Equipment owner shall:

• Commit to at least 4 years of 100% California-onlyoperation and California baseplated registration. Dual plates, IRP, and any oth er out-of-state registrations are prohibited.

• Commit to at least 4 years of frequent port or int er-modal rail yard service (150+ visits/year).

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain filter in good operating conditi on and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty on filter.

• Demonstrate that any mid-1990s engine subject to t he software upgrades for diesel trucks (i.e. chip reflash) has completed the upgrad e

.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-2 February 2008 Trucks Serving Ports and Intermodal Rail Yards (con tinued) Option (2) Repower

Requirements

Pro-rated Alternative The lower of 50% or $20,000 to repower an eligible MY2003 or older heavy duty diesel

truck with a new engine that meets MY2007 emission levels or lower and ARB’s requirements for engine manufacturer diagnostics.

• Program-funded truck repower project shall be comp leted and operational at least 3 years prior to a regulatory requirement for that te chnology or level of emissions control. For independent owner operators, the equ ipment project shall be completed and operational at least 2 years prior to a regulatory requirement for that technology or level of emissions control.

Equipment owner shall:

• Commit to at least 8 years or 350,000 miles of 100 % California-only operation and California base-plated registration. Dual plates, IRP, and any other out-of-state registrations are prohibited.

• Commit to at least 4 years of frequent port or int er-modal rail yard service (150+ visits/year).

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Scrap the old engine.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain new engine, emission controls, a nd diagnostics in good operating condition and according to manufacturer’s recommend ations.

• Demonstrate proof of equipment warranty and compre hensive insurance on upgraded equipment.

• Provide a copy of ARB Executive Order documenting that the new truck engine meets 2007 emission levels.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay the lower of 25% or $10,000 for a 4 year commitment of 100% California-only operation and Ca lifornia base-plated registration.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-3 February 2008 Trucks Serving Ports and Intermodal Rail Yards (con tinued) Option (3) Replacement

Requirements

Pro-rated Alternative Partial funding of up to $50,000/truck to replace a n eligible MY2003 or older heavy duty

diesel truck with a diesel or alternative fuel truc k meeting MY2007 emission levels or lower.

• Program-funded truck replacement project shall be completed and operational at least 3 years prior to a regulatory requirement a truck mee ting MY2007 emission standards. For independent owner operators, the new truck must be operational at least 2 years prior to a regulatory requirement for a truck meeti ng MY2007 emission standards.

Equipment owner shall:

• Commit to at least 8 years or 350,000 miles of 100 % California-only operation and California base-plated registration. Dual plates, IRP, and any other out-of-state registrations are prohibited.

• Commit to at least 4 years of frequent port or int ermodal rail yard service (150+ visits/year).

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Scrap the old truck.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines. Under a lease program, the o wner and lessee must sign the contract.

• Properly maintain new truck in good operating cond ition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on new truck.

• Provide copy of ARB Executive Order documenting th at the new truck engine meets 2007 emission levels.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay up to $25,000 for a 4 year commitment of 100% Californiaonly operation and California base-plated registrat ion.

Project Cost Assumptions Option (1): Total cost of a diesel particulate filt er is ~$10,000

Option (2): Total average cost of a repower is ~$40 ,000 Options (3) & (4): Total cost of a new MY2007 truck is ~$100,000 (diesel) to ~$180,000 (natural gas)Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-4 February 2008 

### B. Major Milestones for Equipment Project Completio n

• Equipment order.

• Equipment acquisition/installation.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### D. Annual Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, address, phone, e tc.).

• Proof of California registration.

• Annual vehicle miles of travel (including mileage/ activity logs for documentation).

• Certification of California-only operation (includ ing certification that permits were not utilized to make out-of-state trips).

• Certification and documentation of at least 50% of travel in trade corridors.

• Documentation of the number of port/rail yard visi ts within 12 month period.

• Summary of maintenance performed and inspections c onducted.

• Certification that the bond-funded project was ope rated in accordance with signed contract and that all information submitted is true and accurate.

• Other information as requested by the local agency

. 

### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-5 February 2008 

### F. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.

1. General contact information

This section applies to all equipment project optio ns listed below.

• Name/organization/agency/company

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)

• Proof of identity of equipment owner

• Small business information

o Fleet size

o Number of employees

o Annual gross income

2. Option (1): retrofit

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

o Current odometer reading (estimate total engine mi leage if odometer is missing or broken)

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

o Average number of port or rail yard visits per yea r

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operatedProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-6 February 2008

b) Proposed equipment project information

• Retrofit device data

o ARB-verified retrofit device company and name of d evice

o ARB-verified NOx reduction & PM reduction (%)

• Retrofit device documentation

o ARB Executive Order for retrofit device listing th e engine families for which the retrofit is verified, along with a picture of t he engine label showing the engine family

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

o Estimated number of port or rail yard visits per y ear (must be 150+)

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availability

3. Option (2): repower

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

o Current odometer reading (estimate total engine mi leage if odometer is missing or broken

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

o Average number of port or rail yard visits per yea r

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operatedProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-7 February 2008

b) Proposed equipment project information

• Engine repower data

o Engine make, engine year

o Engine horsepower and fuel type

• Repower documentation

o Documentation of all engine/truck modifications pl anned as part of the repower project. Include description of upgrades t o such things as exhaust systems, electronics, etc.

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

o Estimated number of port or rail yard visits per y ear (must be 150+)

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Documentation of match funding availability

4. Option (3): replacement

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

o Current odometer reading (estimate total engine mi leage if odometer is missing or broken

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

o Average number of port or rail yard visits per yea r

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operatedProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix A: Port/Rail Yard Trucks A-8 February 2008

b) Proposed equipment project information

• New truck data

o Truck make, model, model year

o Gross vehicle weight rating

o Engine make, engine year

o Engine horsepower and fuel type

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

o Estimated number of port or rail yard visits per y ear (must be 150+)

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-1 Febr uary 2008 

## APPENDIX B Other Heavy Duty Diesel Trucks

A. Equipment Project Specifications

Other Heavy Duty Diesel Trucks
Eligible Equipment Class 8 (>33,000 lbs gross vehicle weight rating) h eavy-duty diesel trucks used to move

goods.

Equipment owner must demonstrate:

• Continuous registration (California base-plated or International Registration Plan) in California for the past 2 years.

• At least 50 percent operation within trade corrido r(s) for the past 2 years.

Ineligible Equipment • Trucks subject to ARB’s public and utility fleet r ule.

• Trucks subject to ARB’s solid waste collection veh icle rule.

• Trucks subject to ARB’s diesel cargo handling equi pment rule.

• A truck funded via a contract executed after adopt ion of the Regulation to Reduce Emissions of Diesel Particulate Matter, Oxides of N itrogen and Other Criteria Pollutants, and Greenhouse Gases from In-Use Heavy- Duty Diesel-Fueled Vehicles must comply with the additional restrictions on fle et averaging included in these Guidelines.

Option (1) Retrofit

Requirements Partial funding of up to $5,000/truck to retrofit a n eligible MY2006 or older heavy duty

diesel truck with an ARB verified Level 3 diesel pa rticulate filter that reduces diesel PM by 85 percent or more.

• Program-funded diesel particulate filter shall be installed and operational at least 6 months prior to a regulatory requirement for that l evel of emissions control under the best available control technology provisions of any adopted rule for in-use trucks. In this 6 month time period, a truck funded under this Program is not eligible to be included in any fleet averaging.

Equipment owner shall:

• Commit to at least 4 years of 100% California-onlyoperation and California baseplated registration. Dual plates, IRP, and any oth er out-of-state registrations are prohibited.

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain filter in good operating conditi on and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty on filter.

• Demonstrate that any mid-1990s engine subject to t he software upgrades for diesel trucks (i.e. chip reflash) has completed the upgrad e

.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-2 Febr uary 2008 Other Heavy Duty Diesel Trucks (continued) Option (2) Repower

Requirements

Pro-rated Alternative The lower of 50% or $20,000 to repower an eligible MY2003 or older heavy duty diesel

truck with a new engine that meets MY2007 emission levels or lower and ARB’s requirements for engine manufacturer diagnostics.

• Program-funded truck repower projects shall be com pleted and operational at least 3 years prior to a regulatory requirement for that le vel of emissions control under the best available control technology provisions of any adop ted rule for in-use trucks. In this 3 year period, a truck funded under this Program is n ot eligible to be included in any fleet averaging. For independent owner operators and own ers of all eligible MY1997 or older trucks, the equipment project shall be comple ted and operational at least 2 years prior to a regulatory requirement for that level of emissions control under the best available control technology provisions of any adop ted rule for in-use trucks.

Equipment owner shall:

• Commit to at least 8 years or 500,000 miles of 100 % California-only operation and California base-plated registration. Dual plates, IRP, and any other out-of-state registrations are prohibited.

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Scrap the old engine.

• Comply with record-keeping, reporting, and audit r equirements

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain new engine, emission controls, a nd diagnostics in good operating condition and according to manufacturer’s recommend ations.

• Demonstrate proof of equipment warranty and compre hensive insurance on upgraded equipment.

• Provide copy of ARB Executive Order documenting th at the new truck engine meets 2007 emission levels.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay the lower of 25% o r $10,000 for a 4 year commitment of 100% California-only operation and California base- plated registration.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-3 Febr uary 2008 Other Heavy Duty Diesel Trucks (continued) Option (3) Replacement

Requirements

Pro-rated Alternative Partial funding of up to $50,000/truck to replace a n eligible MY2003 or older heavy duty

diesel truck with a diesel or alternative fuel truc k meeting MY2007 emission levels or lower.

• Program-funded truck replacement projects shall be completed and operational at least 3 years prior to a regulatory requirement for that level of emissions control under the best available control technology provisi ons of any adopted rule for in-use trucks. In this 3 year period, a truck funded unde r this Program is not eligible to be included in any fleet averaging. For independent o wner operators and owners of all eligible MY1997 or older trucks, the equipment proj ect shall be completed and operational at least 2 years prior to a regulatory requirement for that level of emissions control under the best available control technology provisions of any adopted rule for in-use trucks.

Equipment owner shall:

• Commit to at least 8 years or 500,000 miles of 100 % California-only operation and California base-plated registration. Dual plates, IRP, and any other out-of-state registrations are prohibited.

• Commit to at least 50% of travel in trade corridor s for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Scrap the old truck.

• Comply with record-keeping, reporting, and audit r equirements

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines. Under a lease program, the o wner and lessee must sign the contract.

• Properly maintain new truck in good operating cond ition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on new truck.

• Provide copy of ARB Executive Order documenting th at the new truck engine meets 2007 emission levels.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay up t o $25,000 for a 4 year commitment of 100% California-only operation and California base- plated registration.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-4 Febr uary 2008 Other Heavy Duty Diesel Trucks (continued)

Option (4) Three-Way Truck Transactions

Additional Requirements for Eligible Equipment Truck A: MY2003-2006 heavy duty diesel truck

Truck B: MY1990 or older heavy duty diesel truck

Option (4) Three-Way Truck Transactions

Requirements Partial funding of up to $50,000/transaction to:

1. Replace an eligible MY2003-2006 truck (Truck A ) with a diesel or alternative fuel truck (Truck C) meeting MY2007 emissions level s or lower; and 2. Equip Truck A with an ARB-verified Level 3 die sel particulate filter that reduces diesel PM by 85 percent or more; and 3. Scrap a MY1990 or older diesel truck (Truck B) and replace with Truck A.

• Program-funded three-way truck transaction shall b e completed and the new truck operational at least 2 years prior to a regul atory requirement for a truck meeting MY2007 emission standards under the best av ailable control technology provisions of any adopted rule for in-us e trucks. In this 2 year period, a truck funded under this Program is not el igible to be included in any fleet averaging. If the original owner of Truck A and new owner of Truck C is an independent owner operator, Truck C must be oper ational at least 2 years prior to a regulatory requirement for a truck meeting MY2007 emission standards.

• Truck A shall be equipped with a diesel particulat e filter at least six months prior to a regulatory requirement for a Level 3 PM device under the best available control technology provisions of any adop ted rule for in-use trucks.

Original owner of Truck A and new owner of new Truc k C shall:

• Equip Truck A with a Level 3 diesel particulate fi lter and transfer ownership (if applicable) to the owner of old Truck B.

• On Truck C, commit to at least 8 years or 500,000 miles of 100% Californiaonly operation and California base-plated registrat ion. Dual plates, IRP, and any other out-of-state registrations are prohibited

.

• On Truck C, commit to at least 50% of travel in tr ade corridors for duration of contract term.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain new truck in good operating cond ition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on new truck.

• Provide copy of ARB Executive Order documenting th at Truck C engine meets 2007 emission levels, and the Truck A is cert ified for sale in California.

• Certify that there are no outstanding ARB equipmen t violations associated with any of the trucks involved in the equipment pr oject.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-5 Febr uary 2008 Other Heavy Duty Diesel Trucks (continued) Option (4) Three-Way Truck Transactions

Requirements (continued) Original owner of old Truck B and new owner of retr ofit Truck A shall:

• Scrap Truck B.

• On Truck A, commit to at least 4 years of 100% Cal ifornia-only operation and California base-plated registration. Dual plates, IRP, and any other out-ofstate registrations are prohibited.

• On Truck A, commit to at least 50% of travel in tr ade corridors for duration of contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain filter in good operating conditi on and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty on filter.

• Certify that there are no outstanding ARB equipmen t violations associated with any of the trucks involved in the equipment pr oject.

Project Cost Assumptions Option (1): Total cost of a diesel particulate filt er is ~$10,000.

Option (2): Total average cost of a repower project is ~$40,000. Option (3) & (4): Total cost of a new MY2007 truck is ~$100,000 (diesel) to ~$180,000 (natural gas).



### B. Major Milestones for Project Completion

• Equipment order.

• Equipment acquisition/installation.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### D. Annual Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, address, phone, e tc.).

• Proof of California registration.

• Annual vehicle miles of travel (including mileage/ activity logs for documentation).Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-6 Febr uary 2008 • Certification of California-only operation (includ ing certification that permits were not utilized to make out-of-state trips).

• Certification and documentation of at least 50% of travel in trade corridors.

• Summary of maintenance performed and inspections c onducted.

• Certification that the bond-funded project was ope rated in accordance with signed contract and that all information submitted is true and accurate.

• Other information as requested by the local agency

. 

### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### F. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.

1. General contact information

This section applies to all equipment project optio ns listed below.

• Name/organization/agency/company

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)

• Proof of identity of equipment owner

• Small business information

o Fleet size

o Number of employees

o Annual gross income

2. Option (1): retrofit

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel typeProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-7 Febr uary 2008 o Current odometer reading (estimate total engine mi leage if odometer is missing or broken

• Truck documentation:

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operated

b) Proposed equipment project information

• Retrofit device data

o ARB-verified retrofit device company and name of d evice

o ARB Executive Order number for retrofit device

o ARB-verified NOx reduction & PM reduction (%)

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availability

3. Option (2): repower

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 yearsProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-8 Febr uary 2008 o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operated

b) Proposed equipment project information

• Engine repower data

o Engine make, engine year

o Engine horsepower and fuel type

• Repower documentation

o Documentation of all engine/truck modifications pl anned as part of the repower project. Include description of upgrades t o such things as exhaust systems, electronics, etc.

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Documentation of match funding availability

4. Option (3): replacement

a) Current equipment and activity information

• Truck data

o Truck make, model, model year

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid orsProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-9 Febr uary 2008 • Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operated

b) Proposed equipment project information

• New truck data

o Truck make, model, model year

o Gross vehicle weight rating

o Engine make, engine year

o Engine horsepower and fuel type

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availability

5. Option (4): three-way truck transaction

a) TRUCK A: Current equipment and activity informat ion

• Truck data

o Truck make, model, model year (must be MY2003-2006 )

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

o Current odometer reading (estimate total engine mi leage if odometer is missing or broken

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past 2 years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operatedProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-10 Feb ruary 2008

b) TRUCK B: Current equipment and activity informat ion

• Truck data

o Truck make, model, model year (must be MY1990 or o lder)

o Vehicle Identification Number

o Gross vehicle weight rating

o License plate number

o Engine make, model, engine year, serial number

o Engine horsepower and fuel type

o Current odometer reading (estimate total engine mi leage if odometer is missing or broken

• Truck documentation

o Proof of DMV registration for current and prior tw o years

o Documentation of current ownership (copy of title of truck)

• Vocation and activity data for the past two years

o Vocation(s)

o Annual vehicle miles of travel (VMT)

o Annual VMT in California

o Estimated percentage of annual VMT in trade corrid ors

• Vocation and activity documentation for the past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operated

c) Proposed equipment project information

TRUCK A

• Retrofit device data

o ARB-verified retrofit device company and name of d evice

o ARB Executive Order number for retrofit device, NO x & PM reduction (%)

• Predicted vocation and activity data

o Vocation(s)

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors TRUCK C

• New truck data

o Truck make, model, model year (must be MY2007 or n ewer)

o Gross vehicle weight rating

o Engine make, engine year, engine horsepower and fu el type

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted vocation and activity data

o Vocation(s)

o Estimated annual VMT

o Estimated percentage of annual VMT in trade corrid ors

• Equipment project funding demonstration

o Total project costProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix B: Other Heavy Duty Trucks B-11 Feb ruary 2008 o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-1 February 2008 

## APPENDIX C Locomotives

A. Equipment Project Specifications

Locomotives
Eligible Equipment Diesel-powered freight locomotives with no or minim al emissions control technology

(i.e., uncontrolled, or meeting Tier 0 or Tier 1 st andards).

Equipment owner must demonstrate:

• Operation in California for the past 2 years.

• At least 50 percent operation within trade corrido r(s) for the past 2 years.

• Estimated diesel fuel usage greater than 20,000 ga llons per year.

Option (1): Switcher Locomotive

Requirements Partial funding for the lower of 50% or $750,000 pe r locomotive to replace, rebuild, or

repower an uncontrolled, Tier 0 or Tier 1 switcher locomotive with a new generator-set that achieves emissions of 3.5g/bhp-hr or less for NOx, and 0.1 g/bhp-hr or less for PM, or an alterative technology with equivalent emission leve ls using U.S. EPA engine certification test results with ARB verification. Eligible locom otive costs include a new chassis, a new or rebuilt engine, and mechanical/electrical system s components necessary for safe operation.

Equipment owner shall:

• Commit to 15 years of 100% operation within the tr ade corridors; periodic out-of-state maintenance may be permitted if outlined in the con tract between the local agency and equipment owner.

• Scrap or ban old engine/locomotive from California operation.

• Install an active GPS unit on both old (if not scr apped) and new equipment, fund data collection, and report location data.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on upgraded equipment.

• (For UP and BNSF) Demonstrate how the railroad in tends to comply with 1998 agreement for the South Coast Air Basin by submitti ng a compliance plan to ARB prior to application for bond funding in the Los Angeles/ Inland Empire corridor.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-2 February 2008 Locomotives (continued) Option (2): Line-Haul Locomotive

Requirements Partial funding for the lower of 50% or $1 million per locomotive to replace or rebuild an

uncontrolled, Tier 0 or Tier 1 line

- haul locomotive with a new Tier 2 or lower-emission engine. Eligible locomotive costs include a new ch assis, a new or rebuilt engine, and mechanical/electrical systems components necessary for safe operation.

Equipment owner shall:

• Commit to 15 years of 100% California-only operati on. This new intrastate line-haul locomotive shall use California ARB diesel fuel. P eriodic out-of-state maintenance may be permitted if outlined in the contract between th e local agency and equipment owner.

• Commit to at least 50% of operation in trade corri dors for duration of contract term.

• Scrap or ban old engine/locomotive from California operation.

• Install an active GPS unit on both old (if not scr apped) and new equipment, fund data collection, and report location data.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on upgraded equipment.

• (For UP and BNSF) Demonstrate how the railroad in tends to comply with the 1998 agreement for the South Coast Air Basin by submitti ng a compliance plan to ARB prior to application for bond funding in the Los Angeles/ Inland Empire corridor.

Project Cost Assumptions • Estimated total cost of new switcher generator-set is ~$1.5 million.

• Estimated total cost of an eligible Tier 2 locomot ive is ~$2.0-2.5 million.

Excluded Funding Components • Auto start/stop devices required by regulation or agreements.

• GPS units and monitoring and reporting costs.

•



### B. Major Milestones for Project Completion

• Equipment order.

• Equipment acquisition/installation.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-3 February 2008 

### D. Annual Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, company, address, phone).

• Build number, date, builder, builder model.

• Date of equipment installation.

• Locomotive type and name of home rail yard.

• Report of Megawatt-hours of operation.

• Representative profile data to determine engine du ty cycle.

• Certification of California-only operation.

• Summary of maintenance performed (including locati on) and inspections conducted.

• GPS data in a usable format.

• Certification and documentation of 100% of travel in trade corridors for switcher locomotives, and 50% operation in trade corridors f or line-haul locomotives.

• Certification that the bond-funded project was use d in accordance with signed contract and that all information submitted is true and accurate.

• Other information as requested by ARB or the local agency.


### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### F. Application Information

• Equipment owners shall provide the following infor mation and documentation in addition to the requirements described in Chapter I V and other information ARB or local agencies may request on the equipment project applications.

• UP and BNSF must demonstrate how the railroad inte nds to comply with the 1998 agreement for the South Coast Air Basin by submitti ng a compliance plan to ARB prior to application for bond funding in the Los An geles/Inland Empire corridor.

1. General contact information

This section applies to all equipment project optio ns listed below.

• Organization/agency/company name

• Railroad Class (1, 2, or 3)

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-4 February 2008 • Proof of identity of equipment owner

• Small business information

o Number of locomotives

o Number of employees

o Annual gross income

2. Option (1): switcher locomotive

a) Current equipment and activity information

• Switcher data

o Locomotive type (traditional switcher, alternative technology switcher)

o Build number, date

o Builder, builder model

o Locomotive make, model, model year, serial number, roster number

o Engine data (per engine)

 Modifications (roots blown, turbo-charged, other)

 Control level (uncontrolled, Tier 0, 1)

 Engine family, make and type, model, engine year

 Serial number

 Horsepower, number of cylinders

 Fuel type

o Electronic monitoring unit device type and model ( if equipped)

• Switcher documentation

o Documentation of current ownership

• Activity data for the past 2 years

o Annual fuel consumption (gallons of fuel)

o Annual megawatt hours of operation

o Profile of locomotive duty cycle (i.e., idle time, throttle notch settings per increment of time for each engine)

• Activity documentation for past 2 years

o Documentation of at least 50% of operation in corr idors may be required

o Identify the trade corridors in which the equipmen t is routinely operated

o Documentation of fuel consumption may be requested

o Documentation of megawatt hours of operation may b e requested

b) Proposed equipment project information

• New switcher data

o Locomotive type (traditional switcher, alternative technology switcher)

o Builder

o Locomotive make and model year

o Engine data (per engine)

 Modifications (roots blown, turbo-charged, other)

 Emission rate certified by U.S. EPA & verified by ARB (PM, NOx in g/bhp-hr)

 Engine family, make and engine yearProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-5 February 2008

 Horsepower, number of cylinders

 Fuel type

o Electronic monitoring device unit type and a descr iption or sample of the type/format of reportable data

• Itemized cost information for eligible expenses (v erifiable quote)

o Locomotive, engine, or generator set (as applicabl e)

o Other equipment/materials

• Predicted activity data with new equipment

o Estimated annual fuel consumption (gallons of fuel )

o Estimated annual megawatt hours of operation

o Estimated profile of locomotive duty cycle (i.e., idle time, throttle notch settings per increment of time for each engine)

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availability

3. Option (2): line-haul locomotive

a) Current equipment and activity information

• Line-haul data

o Locomotive type

o Build number, date

o Builder, builder model

o Locomotive make, model, model year, serial number, roster number

o Engine data (per engine)

 Modifications (roots blown, turbo-charged, other)

 Control level (uncontrolled, Tier 0, 1)

 Engine family, make and type, model, engine year

 Serial number

 Horsepower, number of cylinders

 Fuel type

o Electronic monitoring unit device type and model ( if equipped)

• Line-haul documentation

o Documentation of current ownership

• Activity data for the past 2 years

o Annual fuel consumption (gallons of fuel)

o Annual megawatt hours of operation

o Profile of locomotive duty cycle (i.e., idle time, throttle notch settings per increment of time for each engine)

• Activity documentation for past 2 years

o Documentation of at least 50% of travel in corrido rs may be required

o Identify the trade corridors in which the equipmen t is routinely operated

o Documentation of fuel consumption may be requestedProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix C: Locomotives C-6 February 2008 o Documentation of megawatt hours of operation may b e requested

b) Proposed equipment project information

• New line-haul data

o Locomotive type

o Builder

o Locomotive make and model year

o Engine data (per engine)

 Modifications (roots blown, turbo-charged, other)

 Control level (must be certified to Tier 2 emissio n levels or lower)

 Engine family, make and engine year

 Horsepower, number of cylinders

 Fuel type

o Electronic monitoring device unit type and a descr iption or sample of the type/format of reportable data

• Itemized cost information for eligible expenses (v erifiable quote)

o Locomotive or engine (as applicable)

o Other equipment/materials

• Predicted activity data with new equipment

o Estimated annual fuel consumption (gallons of fuel )

o Estimated annual megawatt hours of operation

o Estimated profile of locomotive duty cycle (i.e., idle time, throttle notch settings per increment of time for each engine)

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 1 February 2008 

## APPENDIX D Shore Power

A. Equipment Project Specifications

Shore Power
Eligible Equipment Existing cargo ship berth or existing cargo ship te rminal at a seaport located in a trade

corridor.

Option (1) Grid-Based Power

Requirements The lower of $2.5 million/berth or 50% of the cover ed shore-side costs of installing

permanent, grid-based electrical power at a cargo s hip berth.

• Program-funded grid-based shore power shall be ins talled and in operation at least 2 years prior to a regulatory requirement for that te chnology or level of emissions control.

Equipment owner shall:

• Commit to at least 20 years of the use of grid-bas ed shore power at the berth at the following levels or greater:

o 25 percent of ship visits in 2011-2013.

o 60 percent of the ship visits in 2014-2016.

o 70 percent of the ship visits in 2017-2019.

o 90 percent of the ship visits in 2020 and beyond.

• Agree to equipment inspections that include demons trated operability with a cargo ship fully powered by shore-based electrical power.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Comply with all permitting requirements.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 2 February 2008 Shore Power (continued) Option (2) Non-grid based power

Requirements

Pro-rated Alternative Partial funding of up to $200,000 per megawatt of t he covered costs of an electricity

generating unit that provides power at a cargo ship berth or multiple berths. This unit can be portable or fixed on the terminal. Only zero em ission units (e.g. fuel cell, solar), or natural gas engines equipped with selective catalyt ic reduction to control NOx emissions are eligible.

• Program-funded non grid-based shore power shall be installed and in operation by January 1, 2010.

Equipment owner shall:

• Commit to 7 years of 100% California operation at the following levels or greater:

o

o 1,000 hours per year in 2010-2011.

o 2,000 hours per year in 2012-2013.

o 3,000 hours per year in 2014 and beyond.

• Agree to equipment inspections that include demons trated operability with a cargo ship fully powered by shore-based electrical power suppl ied by the electricity generating unit.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain equipment in good operating cond ition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty.

• Comply with all local permitting requirements.

• Perform source testing to measure emissions from t he unit every 1,000 hours of operation, according to the source test requirement s contained in ARB’s shore power regulation.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay up to $140,000 per megawatt for a 5 year commitment to use non-grid based shore power in 100% California o peration. Project Cost Assumptions • Total shoreside cost of equipping a berth with per manent grid-based electrical power is

~$5.0 million/berth; some ports may incur additiona l costs to bring new/additional power capacity to the port.

• Total cost of distributed generation power is anti cipated to be $4.0 million/ 2 MW unit.

• Shipside modifications will cost ~$1 million/ship.

Excluded Funding Components • Providing additional electrical power to the port.

• Construction and protection of infrastructure (e.g ., natural gas lines) used to supply fuel for non-grid based electrical generation.

• Shipside modifications to accept shore-based elect rical power.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 3 February 2008 

### B. Major Milestones for Project Completion

• Preliminary design.

• Environmental clearance (if applicable).

• Final design.

• Equipment acquisition (if applicable).

• Construction bid award.

• Construction completion/equipment installation.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### D. Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

1. Annual reporting for grid based power

• Contact information (owner name, company, address, phone).

• Equipment description and type providing electrica l power.

• Berth name/identifier.

• Date of installation of equipment.

• Vessel type, name, and Lloyd’s number of vessels u tilizing berth.

• Date(s) and time each vessel was initially connect ed to shore power and subsequently disconnected.

• Monthly utility statements that separately identif y electricity for shore power (if avail).

• Documentation of electricity usage at berth (if bi lling statements are unavailable).

• Episodes of electrical service interruption by loc al utility company, as confirmed and documented by local utility company.

• Summary of maintenance and inspections conducted.

• Signed Certification statement that the bond-funde d project was operated in accordance with signed contract and that all inform ation submitted is true and accurate.

• Project records must be retained for at least two years after contract expiration or three years after final project payment, whichever is later.

• Other information as requested by the local agency

.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 4 February 2008

2. Annual reporting for non-grid based power (every 1,000 hours)

• Contact information (owner name, company, address, phone).

• Equipment description and type providing electrica l power.

• Berth name/identifier.

• Date and location of installation of equipment.

• Vessel type, name, and Lloyd’s number of vessels u tilizing shore power.

• Location of vessels serviced, by berth.

• Date(s) and time the vessel utilized non-grid base d power.

• Power, in megawatts, supplied to the vessels.

• Date(s) and time each vessel was initially connect ed to shore power and subsequently disconnected.

• Date, time, and description of any equipment failu re that affected the ability of vessel to turn off its auxiliary engines or use alternativ e control technologies to reduce emissions.

• Summary of maintenance and inspections conducted.

• Signed Certification statement that the bond-funde d project was operated in accordance with signed contract and that all inform ation submitted is true and accurate.

• Other information as requested by the local agency

. 

### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### F. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.

1. General contact information

This section applies to all equipment project optio ns listed below.

• Organization/agency/company name

• Mailing address

• Primary contact name and phone number

• Person(s) with equipment contract signing authorit y (Owner)

• Proof of identity of equipment ownerProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 5 February 2008

2. Option (1): grid-based shore power

a) Proposed equipment project information

• Project Information

o Port where the berth is located

o Berth name/identifier and location within port

o Owner and operator of berth

o Project description, design, maximum power demand (megawatts)

o Itemized cost information by phase (e.g. design, e nvironmental, construction)

• Documentation of current ownership may be required

• Berth activity data for the past 2 years

o Number of ship visits to the berth

• Ship information (per ship and berth)

o Number of visits per year

o Average hotelling time per visit (hours/visit)

o Ship type, size (e.g. TEU capacity), description ( e.g. number of engines, fuel type), power demand (total auxiliary power (kW), ne t hotelling load (kW))

• Predicted berth activity data with new equipment

o Estimated monthly hours of operation

o Estimated monthly MW usage

o Estimated annual ship visits using electrical powe r

o Estimated ship types, description, power demands

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availability

3. Option (2): non-grid shore power

a) Proposed equipment project information

• Project Information

o Port where the berths are located

o Berth(s) name/identifier and location within port

o Owner and operator of berth

o Project description, design, maximum power demand (megawatts)

o Itemized cost information for eligible expenses (v erifiable quote)

• Documentation of current ownership may be required

• Berth activity data for the past 2 years (per bert h)

o Number of ship visits to the berth

• Ship information (per ship and berth)

o Number of visits per yearProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix D: Shore Power D- 6 February 2008 o Average hotelling time per visit (hours/visit)

o Ship type, size (e.g. TEU capacity), description ( e.g. number of engines, fuel type), power demand (total auxiliary power (kW), ne t hotelling load (kW))

• Predicted activity data with new equipment

o Estimated monthly hours of operation

o Estimated monthly MW usage

o Estimated annual ship visits using electrical powe r

o Estimated ship types, description, power demands

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-1 February 2008 

## APPENDIX E Commercial Harbor Craft

A. Equipment Project Specifications

Commercial Harbor Craft
Eligible Equipment Existing commercial diesel harbor craft vessels inv olved in freight movement operations

with: a home port located in a trade corridor, 2 y ears of operation in California waters, and uncontrolled (Tier 0) diesel propulsion engine(s). Eligible vessel types include:

• Tugboats and towboats.

• Work, pilot, crew and supply boats.

• Commercial fishing boats with at least 700 operati onal hours per year.

Option (1) Replacement/ repower of tugs/tows

Requirements

Pro-rated Alternative For repowers on tugs and tows, the lower of 50% of total cost or $135/horsepower of the

old engine to replace a Tier 0 propulsion engine wi th a new model engine meeting latest emission standards (Tier 2 or lower emissions) and make necessary vessel modifications to accommodate the new engine. For replacements of tugs and tows, the lower of 50% of total cost or $135/horsepower of the engine in the old vessel to replace a vessel with a Tier 0 propulsion engine with a new vessel powered by an engine meeting latest emission standards (Tier 2 or lower emissions).

• Program-funded engine repowers and replacements fo r tugboats and towboats shall be in operation at least 2 years prior to a regulatory requirement for that technology or level of emissions control.

Equipment owner shall:

• Commit to 15 years of California home port operati on in the trade corridors.

• Scrap old engine or vessel (as applicable).

• Agree to accept an electronic monitoring unit at a ny time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Demonstrate proof of comprehensive insurance on up graded equipment.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owner may opt for a pro-rated alternative consisting of duplicate requirements, except that the Program will pay up to half of the Program funding level described above for a 7 year commitment of California home port ope ration in the trade corridors.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-2 February 2008 Harbor Craft (continued) Option (2) Replacement/ repower of other vessels

Requirements

Pro-rated Alternative Other vessel types may include: work, pilot, crew, or supply boats involved in freight

movement operations; and high use commercial fishin g vessels. For repowers of other vessels, the lower of 80% or $215/horsepower of the old engine to replace a Tier 0 propulsion engine with a new model meeting latest e mission standards (Tier 2 or better) and make necessary vessel modifications to accommodate the new engine. For replacements of other vessels, the lower of 80% or $215/horsepower of the engine in the old vessel to replace a vessel with a Tier 0 propulsion engine wi th a new vessel powered by an engine meeting latest emission standards (Tier 2 or lower emissions)

Equipment owner shall:

• Commit to 10 years of 100% California home port op eration in trade corridors.

• Scrap old engine or vessel (as applicable).

• Agree to accept an electronic monitoring unit at a ny time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Demonstrate proof of comprehensive insurance on up graded equipment.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

Equipment owner may opt for a pro-rated alternative consisting of duplicate requirements, except that the Program will pay up to half of the Program funding level described above for a 5 year commitment of California home port operati on in the trade corridors.

Project Cost Assumptions • Total cost of a Tier 2 engine is estimated at $270 /horsepower.

Excluded Funding Components • Out of service time (dry dock) costs.



### B. Major Milestones for Project Completion

• Equipment order.

• Dry dock scheduled.

• Equipment acquisition.

• Dry dock start/complete.

• Equipment installation complete.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring,Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-3 February 2008 enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### D. Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, company, address, phone).

• Home port.

• Vessel type.

• Vessel identifier, such as US Coast Guard, CA Fish & Game, Call Sign, Maritime Mobile Service Identity, or other relevant vessel i dentifier.

• Date and location of installation/acquisition of e quipment.

• Engine make, model, year, serial number and engine horsepower.

• Annual engine hours of operation.

• Percent of operation and distance from shore (0-3, >3-24, >24 nautical miles).

• Summary of maintenance and inspections conducted.

• Signed Certification statement that the bond-funde d equipment was installed on or replaced the vessel for which it was approved and t hat all information submitted to the local agency is true and accurate.

• Other information as requested by the local agency

. 

### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### F. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.

1. General contact information

This section applies to all equipment project optio ns listed below.

• Organization/agency/company name

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)

• Proof of identity of equipment ownerProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-4 February 2008 • Small business information

o Number of harbor craft

o Number of employees

o Annual gross income

2. Options (1) and (2): repowers

a) Current equipment and activity information

• Harbor craft data

o Harbor craft name, home port

o Harbor craft type (tug, tow, commercial fishing, e tc.)

o Vessel model year

o Engine data

 Number of propulsion engines

 Make, model, engine year, number of cylinders, and serial numbers for each

 Engine family

 Rated brake horsepower/total engine displacement

 Fuel type

• Harbor craft documentation

o USCG documentation number, if applicable

o CA Fish & Game license number, if applicable

o IMO number, if applicable

• Vocation and activity data for the past 2 years

o Vocation(s)

o Percent operation within 24 nautical miles of the California coast

o Identify the trade corridors in which the equipmen t is routinely operated

o Estimated average number of propulsion engine oper ating hours within 24 nautical miles of the California coast

o Annual hours of operation

• Vocation and activity documentation for the past 2 years

o Documentation of percent operation within 24 nauti cal miles of the California coast may be required

b) Proposed equipment project information

• New harbor craft engine repower information

o Number of propulsion engines

o Make, model year, number of cylinders by engine

o Engine horsepower and fuel type by engine

• Documentation of all engine modifications planned as part of the repower project, including description of upgrades to such things as exhaust systems, electronics, etc.

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted vocation and activity data with new equi pmentProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-5 February 2008 o Vocation

o Estimated percent operation within 24 nautical mil es of the California coast

o Estimated average number of propulsion engine oper ating hours within 24 nautical miles of the California coast

o Annual hours of operation

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availability

3. Options (1) and (2): replacements

a) Current equipment and activity information

• Harbor craft data

o Harbor craft name, home port

o Harbor craft type (tug, tow, commercial fishing, e tc.)

o Vessel model year

o Engine data

 Number of propulsion engines

 Make, model, engine year, number of cylinders, and serial numbers for each

 Engine family

 Rated brake horsepower/total engine displacement

 Fuel type

• Harbor craft documentation

o USCG documentation number, if applicable

o CA Fish & Game license number, if applicable

o IMO number, if applicable

• Vocation and activity data for the past 2 years

o Vocation(s)

o Percent operation within 24 nautical miles of the California coast

o Identify the trade corridors in which the equipmen t is routinely operated

o Estimated average number of propulsion engine oper ating hours within 24 nautical miles of the California coast

o Annual hours of operation

• Vocation and activity documentation for the past 2 years

o Documentation of percent operation within 24 nauti cal miles of the California coast may be requiredProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix E: Harbor Craft E-6 February 2008

b) Proposed equipment project information

• New harbor craft information

o Vessel type

o Propulsion engine data

 Number of engines

 Make, model year, number of cylinders by engine

 Engine horsepower and fuel type by engine

• Documentation of all engine modifications planned as part of the repower project, including description of upgrades to such things as exhaust systems, electronics, etc.

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted vocation and activity data with new equi pment

o Vocation

o Estimated percent operation within 24 nautical mil es of the California coast

o Estimated average number of propulsion engine oper ating hours within 24 nautical miles of the California coast

o Annual hours of operation

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Source and amounts of other funding (private, loca l, other State, federal)

o Request for a direct payment to vendor (if applica ble)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix F: Cargo Equipment F-1 February 2008 

## APPENDIX F Cargo Handling Equipment

A. Equipment Project Specifications

Cargo-Handling Equipment
Eligible Equipment Existing diesel-powered rubber-tired gantry crane w ith a Tier 4 engine or Level 3 verified

diesel emission control device operating at a seapo rt or intermodal rail yard in a trade corridor. To meet this eligibility requirement, eq uipment owners may propose to upgrade existing cranes concurrent with the installation of a Program-funded energy storage system. No Program funds shall be used to upgrade existing cranes to meet the eligibility requirements under this Program.

Option (1) Energy Storage System

Requirements

Pro-rated Alternative The lower of 50% of the total project cost or $160, 000 per crane for purchase and retrofit

of an energy storage system that ARB has verified t o Level 1 (25 percent PM control) or higher.

Equipment owner shall:

• Commit to 15 years of 100% California operation in port or intermodal rail yard service in trade corridors.

• Agree to accept an on-board electronic monitoring unit at any time during the contract term.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty and compre hensive insurance on upgraded equipment.

• Comply with all local permitting requirements.

• Not use the energy storage system to comply with A RB’s rule for diesel cargo handling equipment.

• Certify that there are no outstanding ARB equipmen t violations associated with the equipment project application.

• Demonstrate proof that the existing crane was upgr aded to meet Program eligibility requirements if the improvements were done concurre nt with the installation of a Program-funded energy storage system.

Equipment owners may opt for a pro-rated alternativ e consisting of duplicate requirements, except that the Program will pay the lower of 25% or $80,000 for a 10 year commitment of 100% California-only operation in por t or intermodal rail yard service in trade corridors.

Project Cost Assumptions • Total cost of energy storage unit is ~$160,000-$32 0,000 per crane.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix F: Cargo Equipment F-2 February 2008 

### B. Major Milestones for Project Completion

• Equipment order.

• Equipment acquisition/installation.

• Submittal of invoice to local agency for reimburse ment.

• 1 st reporting milestone 6 months after equipment proje ct completion.


### C. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### D. Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, company, address, phone).

• Date and location of installation of equipment.

• Equipment type and name of home port or rail yard.

• Engine make, model, year, serial number and engine horsepower.

• Annual engine hours of operation.

• Annual fuel usage.

• Summary of maintenance and inspections conducted.

• Signed Certification statement that the bond-funde d technology was installed on the equipment for which it was approved and that all in formation submitted to the local agency is true and accurate.

• Other information as requested by the local agency

. 

### E. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### F. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix F: Cargo Equipment F-3 February 2008

1. General contact information

This section applies to all equipment project optio ns listed below.

• Organization/agency/company name

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)

• Proof of identity of equipment owner

• Small business information

o Fleet size

o Number of employees

o Annual gross income

2. Option (1): energy storage systems

a) Current equipment and activity information

• Rubber tired gantry crane data

o Name and address of location where RTG crane opera tes

o Equipment make, model, model year

o RTG crane identification number or VIN

o Engine data (per engine)

 Engine make, model, engine year

 Serial number

 Horsepower and fuel type

o Existing energy storage system specifications (if applicable)

o Proposed RTG crane upgrades to meet Program eligib ility (if applicable)

• Activity data for the past 2 years

o Annual hours of operation

o Identify the trade corridors in which the equipmen t is routinely operated

b) Proposed equipment project information

• Energy storage system data

o Equipment make, model, model year

o Equipment power rating and specifications for powe r assist system

• Itemized cost information for eligible expenses (v erifiable quote)

• Predicted activity data with new equipment

o Estimated annual hours of operation

• Equipment project funding demonstration

o Total project cost

o Program dollars requested, including option for pr o-rated alternative

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availabilityProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix F: Cargo Equipment F-4 February 2008 [this page intentionally blank]Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-1 Febru ary 2008 

## APPENDIX G Truck Stop/Distribution Center Electrif ication

A. Background

Emissions from the trucks themselves, together with their auxiliary power units for cabin comfort and transport refrigeration units that chil l perishable loads, impact nearby communities. ARB already has several regulations i n place that are substantially reducing emissions from heavy-duty trucks, truck id ling, transport refrigeration units, and auxiliary power units over the next few years.

• On July 22, 2004, ARB adopted a rule limiting unne cessary diesel truck idling to 5 minutes, beginning in February 2005. On October 20, 2005, ARB amended the rule so sleeper berth equipped trucks must comply w ith the 5-minute idling rule, beginning in January 2008. In addition, auxiliary power systems and fuel fired heaters on 2007 and newer trucks are subject to mor e stringent emission performance standards.

• On February 26, 2004, ARB adopted a rule for diese l-fueled Transport Refrigeration Units (TRU) and TRU generator sets, and facilities where TRUs operate. This rule requires these sources to reduce diesel PM emission s to meet idling emission performance standards, beginning in January 2009.

ARB is also developing a comprehensive rule to acce lerate the cleanup and replacement of commercial diesel trucks operating i n California – this rule is scheduled for Board consideration in Fall 2008. Current prop osals call for diesel PM filters by the end of 2009, upgrades to a model year 2007 or newer truck by the end of 2013, and subsequent upgrades to a model year 2010 or newer t ruck.


### B. Analysis

To assess the potential benefits, ARB staff looked at internal analyses being done to support a health risk assessment for typical distri bution centers of various sizes. To evaluate the optimum scenario, we considered a larg e distribution center where trucks and TRUs are operating. TRUs could account for ove r 80 percent of the diesel PM emissions at the facility, since trucks are subject to the 5-minute idling rule, and the TRUs may operate an average of 3 hours while loadin g/unloading at the dock. The emission reductions per dollar invested in electric infrastructure to replace some of these operations would diminish rapidly over time.

Large Distribution Center Emissions with Adopted AR B Rules Large distribution center with trucks and transport refrigeration units (TRUs) Diesel PM

Emissions Expected diesel PM reductions from adopted ARB rule s (cumulative from 2006 levels) Source/Year 2006 2010 2015 2020 Trucks <1 lb/day 45% 73% 84% TRUs 9 lbs/day 30% 75% >90%Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-2 Febru ary 2008 Despite the diminishing returns, ARB staff acknowle dges that electrification of a truck stop, intermodal facility, distribution center, or other place where trucks congregate may be useful to reduce emissions in the near term at h igh use facilities with neighborhoods nearby. This Appendix provides a general methodolo gy and standard that an equipment owner shall meet to apply for bond fundin g.

The equipment owner shall work with the local air d istrict to estimate the baseline emissions from existing operations, after accountin g for the benefits of all adopted regulations. The equipment owner shall provide the proposed operating statistics for the project and calculate the resulting change in e missions over a ten year period. Based on the bond funding requested, if the weighte d reductions per State dollar invested is better than the average for truck repla cement projects, the electrification project shall be eligible to compete against other truck proposals for funding.


### C. Equipment Project Specifications

Truck Stop/Distribution Center Electrification
Eligible Equipment Truck stops, intermodal facilities, distribution ce nters, and other places where Class 8 heavy diesel trucks (over 33,000 lbs) congr egate in a trade corridor.

Option (1) Electrification Infrastructure

Requirements Landside electrification infrastructure to reduce d iesel engine idling and use of

diesel-fueled internal combustion auxiliary power s ystems may be funded at the lower of 50% of eligible costs or a level commensur ate with the weighted reductions per State dollar invested for truck repl acement projects. Eligible costs include purchase and installation of electrical inf rastructure to: enable heating, cooling, and the use of cab power for parked trucks at truck stops; and enable the use of power for transport refrigeration units and auxiliary power systems at distribution centers, intermodal facilities, and ot her places where trucks congregate. Reimbursement for the eligible costs s hall be based on demonstrated use over the first year of operation.

Equipment owner shall:

• Commit to 10 years of operation.

• Agree to equipment inspections.

• Comply with record-keeping, reporting, and audit r equirements.

• Sign a legally binding contract with the local age ncy including project milestone and completion deadlines.

• Properly maintain upgraded equipment in good opera ting condition and according to manufacturer’s recommendations.

• Demonstrate proof of equipment warranty.

• Comply with all local permitting requirements.

Project Cost Assumptions • Total cost for distribution centers is $1,500-$7,0 00/plug at dock; $2,500- $9,000/plug in parking areas; $500-$2,000/adapter f or trailers and TRUs.

• Total cost for truck stops is $6,000-$18,000/parki ng space; $3,000/truck modification. Excluded Funding Components On-board auxiliary power units and other equipment installed on trucks are not

eligible for funding. Transport refrigeration unit s are not eligible for funding. Electricity costs are not reimbursable.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-3 Febru ary 2008 

### D. Major Milestones for Project Completion

The equipment project schedule shall include, but i s not limited to, the following milestones:

• Contract execution between local agency and equipm ent owner

• Facility pre-inspection

• Completion and certification of any required CEQA documents

• Bid solicitation, evaluation and award, and constr uction contract

• Acquisition of any local permits, or other require ments

• Electrification system design, unit acquisition an d delivery

• 50% project completion

• 80% project completion

• 100% project completion

• Post-inspection by the local agency

• 1 st year of operation and collection of use data

• Reporting to local agency of electrical use by tru cks during 1 st year of operation

• Reimbursement and project close out

• Next reporting milestone


### E. Recordkeeping Requirements

Equipment owners shall retain, at minimum, all docu ments, invoices, and correspondence associated with the application, awa rd, contract, monitoring, enforcement, and reporting requirements at least tw o years after equipment project contact term or three years after final payment, wh ichever is later. Records shall be readily available and accessible to the local agenc y, ARB, or designee upon request for the purposes of ongoing evaluations or auditing.


### F. Reporting Requirements

Equipment owners shall be responsible for annual re porting to the local agency that includes, but is not limited to:

• Contact information (owner name, company, address, phone).

• Facility location.

• Project completion date.

• Monthly truck and TRU connections to electrical po wer and electricity usage for each month in the reporting year.

• Summary of maintenance and inspections conducted.

• Signed Certification statement that the bond-funde d project was installed and is operating as it was approved in the post-inspection and that all information submitted to the local agency is true and accurate.

• Other information as requested by the local agency

.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-4 Febru ary 2008 

### G. Ongoing Evaluations and Audits

Equipment owners shall agree to ongoing equipment p roject evaluations and equipment project audits by the local agency, ARB, or authori zed designees. ARB and local agency audit requirements and provisions are found in Chapter II.E.5.


### H. Application Information

Equipment owners shall provide the following inform ation and documentation in addition to the requirements described in Chapter IV and oth er information ARB or local agencies may request on the equipment project appli cations.

1. General contact information

Equipment project applicant shall identify all part ies with the legal authority to sign contracts concerning equipment acquisition, land im provements, equipment operation and maintenance. The following information shall b e provided for each party:

• Organization/agency/company name

• Mailing address

• Primary contact name and phone number

• Person with equipment contract signing authority ( Owner)

• Proof of identity of equipment owner

• Small business information

o Number of employees

o Annual gross income

2. Option (1): electrification infrastructure

a) Current equipment and activity information

• Location and description of facility where electri fication infrastructure is proposed for installation

• Quantification of current annual truck operations and TRU operations at the facility

• Baseline emissions (without the project) for first 10 years of operation of proposed electrical infrastructure (developed with the concu rrence of the local air district) – this emission estimate shall fully reflect the benefits of all adopted regulations including ARB rules for trucks, idling, auxiliary power syste ms, TRUs, and TRUs with generators setsProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-5 Febru ary 2008

b) Proposed equipment project information

• Electrification infrastructure information

o Project description and design, including number a nd location of electrification units to be installed, with individual and total po wer requirements

o Equipment vendor(s)

o Itemized cost information by phase (e.g. design, e nvironmental, construction)

• Predicted activity data with new equipment

o Estimated annual truck connections to electric pow er and average connection time

o Estimated annual TRU connections to electrical pow er and average connection time

o Expected power usage for trucks and TRUs (separate ly), each year for the first ten years of operation

• Projected emissions and benefits of the project

o Emissions with the project over a ten-year period

o Emission reductions attributable to the project (b eyond those required by law or regulation) for a ten-year period beginning in t he 1 st year of operation

o Demonstration that the weighted emission reduction s per State dollar invested is equal or better than the average for tr uck replacement projects

• Equipment project funding demonstration

o Total project cost

o Program dollars requested

o Funding sources and amounts of other funding (priv ate, local, other State, federal)

o Documentation of match funding availability

.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix G: Truck Stop Electrification G-6 Febru ary 2008 [this page intentionally blank]Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix H: Early Grants H-1 February 2008 

## APPENDIX H: Early Grants

SB 88 makes available no more than $25 million of t he FY2007-08 appropriation available for the purpose of executing grant agreem ents directly with ports, railroads, or local air districts for eligible projects to achiev e the earliest possible heath risk reduction. SB 88 requires that ARB allocate funds under this “ early grant” provision consistent with these Guidelines, and that ARB provide sufficient o pportunity for the public to review and comment on any projects proposed for funding.

In order to bring early grant proposals to the Boar d as quickly as possible, ARB staff directly contacted local air districts within the t rade corridors to request proposals for local agency projects that could be under contract with equipment owners and mostly complete by July 31, 2008. ARB staff focused on lo cal air districts due to their demonstrated experience and expertise implementing incentive programs through the Carl Moyer incentive program.

To ensure that the early grant project proposals wo uld be consistent with the eligibility and equipment project requirements included in the Program Guidelines, ARB staff advised the local air districts to use the Staff Draft Concepts for Implementation document, released September 19, 2007, as the prima ry basis for equipment project requirements under the early grant provision. In e arly November 2007, ARB staff also provided the local air districts with ARB Staff Expectations for Early Grant Proposals (attached) to further specify the content of the ea rly grant proposals as well as other critical information (e.g. per equipment funding le vels) pertinent to the air district’s development of an early grant proposal.

On November 20, 2007, ARB staff held a conference c all with air districts interested in submitting an early grant proposal to clarify quest ions. In response to comments from the air districts regarding the potential for harbo r craft projects that could be quickly implemented, ARB staff expanded the early grant eli gibility requirements to allow harbor craft projects at $135/horsepower.

ARB requested that the proposals include only the i nformation necessary for ARB staff to subsequently calculate the proposal benefits usi ng methods, calculations, and emission factors consistent with those included in the Guidelines.

ARB staff received five early grant proposals, post ed on the Program website at: http://www.arb.ca.gov/gmbond

. ARB staff’s recommendations for early grant funding include truck projects and one grid-based shore power proposal. Most of the truck proposals submitted by the air districts are based on actual equipment project app lications that the air districts received through other incentive programs (like the Carl Moy er program) or direct solicitations based on air district staff assumptions about what this Program would require, as described in the air district early grant applicati ons. Due to the expedited nature andProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix H: Early Grants H-2 February 2008 intent of the early grant proposals, these applicat ions may be considered for funding under this Program.

In order to maintain consistency between the early grants and the other provisions of these Guidelines, the following sections of these G uidelines are applicable to the early grant equipment projects:

• Chapter III

o Sections B.1 & 4

o Section C

o Sections D.1, 3-8, 10, 11-16

o Sections E-G

• Chapter IV

• Appendices A-G

These sections apply to the early grant projects to ensure that the equipment projects considered for funding by each air district are con sistent with these Guidelines. In particular, although the projects may have been ini tially identified through a solicitation process or identified from an existing incentive pr ogram, the air district must still verify the equipment projects’ eligibility for Program fun ds and competitively rank them against each other to ensure that the projects with the gre atest benefits are funded first.

In addition, since the air districts did not have t he benefit of the detailed provisions in the draft Guidelines while identifying equipment projec ts for their early grant applications, the equipment project provisions in Appendices A-G apply except where ARB staff provided equipment specifications that differ in th e ARB Staff Expectations for Early Grant Proposals. In these cases, the air district may choose which equipment specifications work best for their early grant proj ects.

For example, for grid-based shore power projects un der the early grants, ARB staff set the Program funding limit at the lower of $2.5 mill ion or 70 percent. In response, the Bay Area Air Quality Management District (BAAQMD) p roposed a grid-based shore power project in Oakland that is requesting $1.4 mi llion per berth for two berths ($2.8 million total Program funds) for a project with a t otal cost of $4 million. Although these Guidelines currently propose a per berth funding ca p in these Guidelines of $2.5 million, or 50 percent, whichever is lower, ARB’s early gran t recommendation for BAAQMD’s grid-based shore power project maintains the fundin g caps originally offered.

In another example, for trucks, ARB Staff Expectations for Early Grant Proposals set the operational commitment at 5 years for truck retrofi ts and 10 years for truck replacements. These Guidelines specify 4 years and 8 years, respectively. Since the current Guidelines are less restrictive, air distri cts may allow equipment projects to sign equipment contracts with commitments set according to these Guidelines instead of the original concepts.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix H: Early Grants H-3 February 2008



### Goods Movement Emission Reduction Program

FY2007/2008

ARB Staff Expectations for Early Grant Proposals

This document includes ARB staff’s expectations for FY2007/2008 Early Grant Proposals submitted by local air district applicant s. We have also included specific information that supplements and/or modifies the el igibility and operational requirements described in the September 19, 2007 concept paper f or the early grant proposals.

In general, ARB staff expects the early grant propo sals to follow the staff draft concept paper. We have listed several key expectations for emphasis and clarification.

• The early grant proposals represent a commitment b y the applicant to sign a grant agreement with ARB if the ARB Board approves the full or partial proposal, as submitted. We understand that the applicant may reserve the right to withdrawal the proposal should the ARB Board change the conditions or eligibility requirements of the early grants. To provide the A RB Board maximum flexibility in allocating the full $25 million in early grant d ollars, we request that you design the proposals to allow pro-rated funding and acknow ledge your willingness to accept a lower funding amount

.

• Local agency and equipment eligibility requirement s remain as stated in the September 19, 2007 staff draft concept paper, with the exception of the modifications included in this document.

• Equipment operational requirements remain as state d in the September 19, 2007 staff draft concept paper, with the exception of th e modifications included in this document.

• Pre/post equipment inspections will be conducted t o ensure both the old (as applicable) and new equipment are eligible and oper ational.

• Legally binding contracts will be signed between t he implementing local agency and equipment owners to ensure program accountabili ty.

• Implementing local agencies and equipment owners a gree to the reporting and record keeping requirements of the bond program.

• Implementing local agencies will monitor bond-fund ed equipment for compliance with contract provisions.Proposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix H: Early Grants H-4 February 2008 The following outline provides the content requirem ents for the early grant proposals. As indicated, we request that the submittals be no more than 10 pages in length, and preferably shorter. We intend to append these prop osals to our proposed Guidelines for public review and comment prior to Board considerat ion.

1. Summary of proposal (1-2 pages)

o Briefly state the air quality and health concerns addressed

o Summarize project types, corridor(s), and costs

o Identify the implementation schedule (with major m ilestones)

 What/how much can you accomplish by June 30, 2008?

 Why these accomplishments are achievable

2. Detailed proposal (5-10 pages)

o Geographic coverage

 Identify the targeted trade corridor(s)

 Does the proposal target equipment upgrades in spe cific highly impacted communities? If so, which ones?

 Describe marketing/outreach (must include entire c orridor)

o Old Equipment

 Certify that old equipment eligibility is based on the equipment project information tables in the staff draft concept paper , as modified by this document

 Identify the number of pieces of equipment targete d, by sector

• Describe the basis for proposing this number of eq uipment for expedited implementation under the early grants

• For trucks, identify the number of retrofits and t he number of replacements being proposed

 Operating assumptions for old equipment

• Trucks (list retrofits and replacements separately )

 Average age (model year)

 Average annual VMT

• Locomotives (only switchers)

 Average age (years)

 Control level (uncontrolled, Tier 0, 1)

 Average annual fuel use

 Average annual operating hours

• Shorepower

 Identify type(s) of cargo vessel (container, bulk, reefer)

o New Equipment

 Certify that old equipment eligibility is based on the equipment project information tables in the staff draft concept paper , as modified by this document

 Operating assumptions for new equipment

• Trucks

 Must be model year 2007 or 2008 truck

 Average annual VMT (if different from old equip.)

 Identify fuel typeProposition 1B: Goods Movement Emission Reduction P rogram–Guidelines for Implementation

Appendix H: Early Grants H-5 February 2008

• Locomotives (switchers only)

 Identify fuel type

 ARB staff will use annual operating hours reported for old equipment to calculate emission benefits

• Shore power

 Ship visits per year using shore power (per berth)

(ARB staff will use operating assumptions to do the calculations consistent with factors/ formulas/ methodologies that will be included in the draft pr ogram guidelines)

o Staff resources

 Describe staff resources available to implement pr oposal

o Funding proposals (Note: Please separate by sector . ARB will consider each sector as a separate proposal)

 Total cost

• Identify truck costs for retrofits and replacement s

 Bond funds requested

 Matching funds

• Detail funding source

 Demonstrate that these funds are available

 DMV $4 and $2 fees may be used as non-state match (since clarified to be $4 fees only)

 Administration funds requested

• Must comply with staff concept limits

o Early grant milestone requirements

 100% of contracts signed with equipment owners by June 30, 2008

 Trucks

• Majority of proposed truck upgrades completed and operational by June 30, 2008

• All of proposed truck upgrades completed and opera tional by December 31, 2008

 Locomotives

• All of new locomotives ordered by June 30, 2008

• All of new locomotives operational by December 31, 2009

 Shore power

• All completed and operational by December 31, 2010

o Provide a project schedule that includes interim m ilestones

 Outline specific accomplishments by June 30, 2008

o Implementation

 Describe how you will secure equipment projects

 Describe how you will select projects for fundingProposition 1B: Goods Movement Emission Reduction Program – Draft Guidelines for ImplementationAppendix H: Early Grants H-6 February2008Goods Movement Emission Reduction ProgramEarly Grant Proposals – Updated Requirements(Updates to project options identified in staff concept paper)Category Eligibility Amounts ContractLengthSurplusTruck retrofits- at least 50% of operation of oldequipment must take place within thefour trade corridors$5,000 per dpf 5 years 6 monthsTruck replacement- at least 50% of operation of oldequipment must take place within thefour trade corridors- old truck must have annual VMT of10,000 miles or greater$50,000 per truck 10 years 3 yearsShore power- grid-based power only $2.5M per berth (grid-based), or70% of the shoreside cost to bringpower to berth, whichever is less20 years 3 yearsLocomotives- switchers only- at least 50% of operation of oldequipment must take place within thefour trade corridors- uncontrolled locomotives eligiblewith 35,000 gal/yr minimum-$500,000/ switcher (no DPFrequired)20 years N/AHarbor Craft Not eligible for early grantsNote: Early grants must maintain requirement for 100% California operation for new equipment (exceptfor periodiclocomotive maintenance)