Report on Reductions Achieved from Incentive-Based

Emission Reduction Measures in the San Joaquin Valley 

APPENDIX A.1: 2005 Carl Moyer Memorial Air Quality

Standards Attainment Program Guidelines Part I

Release Date: September 22, 2014

Hearing Date: October 23, 2014

California Environmental Protection Agency 

Air Resources Board
THE CARL MOYER PROGRAM 

GUIDELINES 

Approved Revision 2005

 

 

 Release Date: January 6, 2006

 

 

 

California Environmental Protection Agency

Air Resources Board
In memory of Dr. Carl Moyer 

(1937 - 1997) 

This program is named in honor of the late 

Dr. Carl Moyer, whose extraordinary 

dedication, hard work, vision and leadership 

made this program possible. He created 

and masterminded this program, in a noble 

effort to unite business and government in 

the name of public interest to improve 

California’s air quality. 

This update was a collaborative effort and has benefited from the valuable contributions 

of the participating air districts. The ARB appreciates the considerable efforts of district 

staff both in the development of these guidelines as well as the day-to-day 

implementation of the Carl Moyer Program. 

Disclaimer 

Publication does not signify that the content reflects the views and policies of the 

California Air Resources Board, nor does the mention of trade names or commercial 

products constitute endorsement or recommendation for their use.
EXECUTIVE SUMMARY 

Air pollution is a serious problem for California. Over 90 percent of Californians live in 

areas that have unhealthful air at times. Air pollution has been tied to serious health 

impacts. Studies have linked particulate pollution to premature death in the elderly and 

other vulnerable populations. Research also shows that children exposed to unhealthful 

levels of ozone, or smog, suffer decreased lung function growth and increased asthma. 

The California Air Resources Board (ARB), together with the 35 local air districts, is 

responsible for developing and implementing strategies to reduce air pollution and 

achieve health-based ambient air quality standards. Emission standards on new 

vehicles and engines help to reduce air pollution as older sources are retired and 

replaced by newer, cleaner vehicles and engines. However, new emission standards 

alone will not solve California’s air pollution problem. Although older sources of 

pollution contribute a disproportionate share of emissions, there are technologies 

available to reduce these emissions. Devices are available that can reduce emissions 

from in-use vehicles and equipment by up to 85 percent, and new, low-emission 

engines equipment and vehicles are available that can reduce emissions by 25 to 

85 percent. However, reducing emissions from these in-use sources can be difficult. 

The Carl Moyer Memorial Air Quality Standards Attainment Program 

(Carl Moyer Program) has proven to be an effective, cost-effective, and popular means 

of reducing emissions from existing pollution sources. 

The Carl Moyer Program is a grant program, implemented by a partnership of ARB and 

local air districts, that funds the incremental cost of cleaner-than-required engines, 

equipment, and other sources of pollution. Carl Moyer Program grants provide early or 

extra emission reductions. It can also accelerate the development and 

commercialization of advanced emission control technology, accelerate the turnover 

rate of old equipment to newer and cleaner equipment, and help reduce costs to the 

regulated community. Projects to reduce emissions from on-road heavy-duty vehicles, 

idle reduction technologies, off-road diesel equipment, transportation refrigeration units, 

off-road spark-ignition equipment, marine vessels, locomotives, and agricultural engines 

have been eligible for grants. Legislative changes enacted in 2004 made projects to 

reduce emissions from other agricultural sources, light-duty vehicles, and on-road fleet 

modernization eligible for Carl Moyer Program funding as well. These legislative 

changes also created a new incentive program aimed at previously unregulated 

agricultural sources, which ARB staff is proposing to call the 

Agricultural Assistance Program. 

In its first six years, the Carl Moyer Program has provided $154 million in funding to 

clean up almost 7,000 engines statewide. The Carl Moyer Program has reduced about 

18 tons per day of nitrogen oxides (NOx, a smog-forming pollutant), and 1 ton per day 

of diesel particulate matter. The emission reductions funded through 

Carl Moyer Program grants are very cost-effective, about $3,000 per ton of NOx, 

comparing favorably to the cost-effectiveness of other air pollution regulations. The 
recent legislative changes expand the focus of the Carl Moyer Program to additional 

pollutants – reactive organic gases (which combine with NOx in the atmosphere to form 

smog) and particulate matter (which includes toxic diesel particulate matter). This 

change will allow the Carl Moyer Program to more comprehensively address all of 

California’s air pollution challenges, including the air toxic risk associated with emissions 

from diesel engines. 

The legislative changes enacted in 2004 also provided increased and continued funding 

for the Carl Moyer Program and other incentive programs – up to $141 million a year 

statewide through 2015. Emission reductions achieved through the 

Carl Moyer Program are an important component of the California State Implementation 

Plan (SIP) – the State’s federally-required road map to reducing emissions to meet the 

health-based ambient air quality standards. All emission reductions funded with 

Carl Moyer Program funds must be real, surplus, quantifiable, and enforceable in order 

to be credited toward California’s obligations in the SIP. These Guidelines describe 

project criteria to ensure that projects funded by the Carl Moyer Program achieve 

SIP-creditable emission reductions. The Guidelines also formalize the administrative 

requirements for both ARB and the local districts that administer the 

Carl Moyer Program. Funding criteria for the Agricultural Assistance Program are 

based on the Carl Moyer Program Guidelines, but the emission reductions under the 

Agricultural Assistance Program are not required to be surplus to regulatory 

requirements. 

It is important to note that regulations will continue to be the primary means to reduce 

emissions to improve air quality. The incentives provided by the Carl Moyer Program, 

and other incentive programs, are intended to complement, not replace, these 

regulatory requirements. Although incentive programs can help reduce costs to the 

regulated community, there are simply not enough funds to purchase all the emission 

reductions needed to achieve healthful air. 

The Carl Moyer Program has proven to be immensely popular in its first seven years, 

with the demand for grants routinely outstripping available funds. The inclusion of 

additional project categories combined with increased funding will allow the 

Carl Moyer Program to more fully realize the potential of incentive programs to improve 

air quality in California. In order to assure that the Carl Moyer Program remains 

responsive to the challenges facing air pollution control today, ARB staff is committed to 

improve all aspects of the Program from the technical data to the administrative 

requirements to customer service. Toward that end, ARB staff will update the technical 

information, as needed; encourage transparency in Program administration; and 

continue to explore ways to increase Program accessibility, especially to small 

businesses. 
TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

PART I – PROGRAM OVERVIEW AND ADMINISTRATIVE REQUIREMENTS 

Chapter One – Program Overview ................................................................................ I-1 

Chapter Two – Administration of the Carl Moyer Program........................................... II-1 

PART II – PROJECT CRITERIA 

Chapter One – Heavy-Duty On-Road Vehicles ............................................................. I-1 

Chapter Two – Heavy-Duty On-Road Fleet Modernization .......................................... II-1 

Chapter Three – Reducing Idling Emissions from Heavy-Duty Vehicles..................... III-1 

Chapter Four – Transport Refrigeration Units ............................................................IV-1 

Chapter Five – Compression-Ignition Off-Road Equipment .........................................V-1 

Chapter Six – Large Spark-Ignition Off-Road Equipment............................................VI-1 

Chapter Seven – Airport Ground Support Equipment ................................................VII-1 

Chapter Eight – Locomotives ....................................................................................VIII-1 

Chapter Nine – Marine Vessels...................................................................................IX-1 

Chapter Ten – Agricultural Sources .............................................................................X-1 

Chapter Eleven – Light-Duty Vehicles.........................................................................XI-1 

Chapter Twelve – Zero-Emission Technologies.........................................................XII-1 

PART III – AGRICULTURAL ASSISTANCE PROGRAM 

PART IV – APPENDICES 

Appendix A – Acronyms

Appendix B – Tables for Emission Reduction and Cost-Effectiveness Calculations 

Appendix C – Cost-Effectiveness Calculation Methodology 

Appendix D – Example Calculations 

Appendix E – Description of Certification and Verification Executive Orders 

Appendix F – Retrofit Emission Control Strategies 
THE CARL MOYER PROGRAM GUIDELINES 

PART I of IV 

PROGRAM OVERVIEW AND ADMINISTRATIVE 

REQUIREMENTS 

Approved Revision 2005 

November 17, 2005
TABLE OF CONTENTS 

Chapter One – Program Overview ................................................................................ I-1 

Chapter Two – Administration of the Carl Moyer Program........................................... II-1 
I-1 PROGRAM OVERVIEW 

Chapter One 

PROGRAM OVERVIEW 

The Carl Moyer Program Air Quality Standards Attainment Program 

(“Carl Moyer Program”) enacted in Health and Safety Code (HSC) section 44275, et 

seq. is a grant program that funds the incremental cost of cleaner-than-required 

engines, equipment, and other sources of air pollution. Although air pollution 

regulations have significantly reduced emissions and improved air quality across the 

State, many areas of California continue to experience unhealthful air. The 

Carl Moyer Program complements California’s regulatory program by providing 

incentives to obtain early or extra emission reductions, especially from emission 

sources in environmental justice communities and areas disproportionately impacted by 

air pollution. 

This document describes approved revisions to the Carl Moyer Program Guidelines to 

respond to legislation enacted in 2005, and to update the program to reflect current 

technical information and regulatory requirements for vehicles, equipment, engines and 

other pollution sources in California. 

I. Background 

Since 1998, the Carl Moyer Program has provided grants to encourage the owners of 

heavy-duty diesel engines to go beyond regulatory requirements by retrofitting, 

repowering, or replacing their engines with newer and cleaner ones. With the clean-up 

of about 7,000 old, high-emission engines, resulting in about 18 tons per day of oxides 

of nitrogen (NOx) emission reductions throughout the State, the Carl Moyer Program is 

a successful and popular air pollution program. The Carl Moyer Program offers critical 

emission reductions that are needed to achieve health-based air quality standards and 

prevent the loss of federal transportation funds throughout California. Although the 

Program has evolved, it retains its primary objective of obtaining cost-effective and 

surplus emission reductions to be credited toward California’s legally-enforceable 

obligations in the State Implementation Plan (SIP) – California’s roadmap for attaining 

the health-based national ambient air quality standards. In addition, 

Carl Moyer Program grants accelerate the turnover rate of old engines to newer and 

cleaner engines; accelerate the development and commercialization of advanced, 

reduced-emission technology; and help reduce costs to the regulated community. 

On January 1, 2005, new legislation (AB 923, Firebaugh/Pavley) took effect, which 

expands the Carl Moyer Program to include additional pollutants, as well as additional 

sources of air pollution (HSC section 44275). The legislation requires the ARB to 

establish or update grant criteria (HSC section 44283) and guidelines for covered 

projects, as revised by the bill, by January 1, 2006. 
I-2 PROGRAM OVERVIEW 

The Carl Moyer Program has been successfully implemented through the cooperative 

efforts of the Air Resources Board (ARB or “Board”) and the local air pollution control 

and air quality management districts (“air districts” or “districts”). Each year, the ARB 

makes grant awards to air districts that apply for Carl Moyer Program funds to 

implement local programs. The air districts, following the Guidelines criteria approved 

by the Board, provide grants to public and private entities for the incremental cost of 

cleaner-than-required engines and/or equipment. In implementing the 

Carl Moyer Program, local districts enjoy considerable flexibility. For instance, districts 

may impose additional or more stringent eligibility requirements for projects in their 

districts. This flexibility allows air districts to tailor the use of Carl Moyer Program funds 

to meet local air quality objectives. 

Although the Carl Moyer Program is an important component of California’s clean air 

plan, it is important to note that there are simply not sufficient public funds to purchase 

the emission reductions needed to provide healthful air. The Carl Moyer Program is not 

an easy path to compliance with regulatory requirements, but the Program can provide 

financial incentives to those who are able to secure early or extra emission reductions. 

II. Legislative Changes 

Three key pieces of legislation enacted in 2004 and 2005 provided increased and 

continued funding, and expanded the Carl Moyer Program. These include 

Senate Bill 1107, Assembly Bill 923 (Firebaugh/Pavley), and Assembly Bill 1394 

(Levine). In addition, on September 6, 2005, Governor Schwarzenegger signed 

Senate Bill 467 (Lowenthal) which requires the ARB to revise the Carl Moyer Program 

Guidelines to include projects in which an applicant turns in off-road equipment powered 

by an internal combustion engines and replaces that equipment with new zero-emission 

technologies. This legislation will take effect on January 1, 2006. ARB staff will 

evaluate how to incorporate the requirements of this legislation into the 

Carl Moyer Program in 2006. 

A. Senate Bill 1107 (SB 1107) 

As part of the fiscal year 2004-2005 budget, SB 1107 adjusted the Smog Check fee 

while extending the newer-vehicle Smog Check exemption, securing about $7 million for 

consumer assistance in the Smog Check program and about $61 million in annual 

funding to be deposited in the Air Pollution Control Fund to fund the 

Carl Moyer Program “...to mitigate or remediate the harm caused by the type of motor 

vehicle on which the fee is imposed” (HSC section 44091.1). 

B. Assembly Bill 923 (AB 923) 

AB 923 provided two additional sources of funding for the Carl Moyer Program, and 

expanded the program to include new emission sources and new pollutants. 
I-3 PROGRAM OVERVIEW 

This legislation adjusted the tire fee that is assessed on purchasers of new tires from 

$1.00 per tire to $1.75 per tire starting on January 1, 2005. The tire fee is reduced to 

$1.50 per tire staring on January 1, 2007 (Public Resources Code section 42885). The 

adjustments to the tire fee will provide about $25 million for clean air programs like the 

Carl Moyer Program in fiscal year 2005-2006, decreasing to $16 million a year from 

2007 through 2015. 

AB 923 also provided air district governing boards with the authority to approve a 

$2 increase in motor vehicle registration fees (“MV Fees”). The adjustment to the motor 

vehicle registration fee provides up to $55 million directly to the local air districts for four 

specific incentive programs, including projects eligible for funding under the 

Carl Moyer Program, “...that the district determines remediate air pollution harms 

created by motor vehicles on which the surcharge is imposed.” The other three 

programs that may be funded with the $2 MV Fee are the purchase of new school 

buses under the Lower Emission School Bus Guidelines [ARB, 2004], light-duty 

accelerated vehicle retirement or repair programs [ARB, 2001], and a program targeted 

at previously unregulated agricultural sources – the “Agricultural Assistance Program.” 

As directed by AB 923, the funding criteria for the Agricultural Assistance Program are 

based on the Carl Moyer Program Guidelines and appear in Part III of this document. 

AB 923 expanded the Carl Moyer Program to include light-duty vehicle projects and 

agricultural sources of air pollution as defined in HSC section 39011.5(a). AB 923 also 

directed ARB to consider emission reductions of reactive organic gases (ROG) and 

particulate matter (PM10) emissions, as well as NOx, when evaluating eligible projects. 

The legislation specifically directs ARB to develop a weighted cost-effectiveness to 

evaluate projects that obtain NOx, ROG and PM10 emission reductions. 

 C. Assembly Bill 1394 (AB 1394) 

AB 1394 (Levine) directed the ARB to broaden the Carl Moyer Program to include 

heavy-duty fleet modernization projects that reduce NOx and/or PM10 emissions 

through the replacement of old trucks. New criteria are in these Guidelines so districts 

may select appropriate projects that would qualify for funding under the heavy-duty fleet 

modernization source category. 

III. Summary of Guideline Revisions 

A. Addition of ROG and PM10 

With the enactment of AB 923, the Carl Moyer Program has expanded from a 

NOx-focused incentive program to include projects that also reduce ROG and PM10. 

This change allows the Carl Moyer Program to more comprehensively address all of 

California’s air pollution challenges, including the air toxic risk associated with emissions 

from diesel engines. 
I-4 PROGRAM OVERVIEW 

Reactive organic gases combine in the atmosphere with NOx to form smog. Because 

different regions of the State require a different combination of ROG and NOx emission 

reductions to meet ambient air quality standards, the inclusion of ROG in the 

Carl Moyer Program will allow local regions to tailor the Carl Moyer Program to more 

closely meet the requirements of their local SIP. 

The addition of PM10 allows the Carl Moyer Program to respond to the major air quality 

challenge of diesel particulate matter. The ARB has identified particulate emissions 

from diesel-fueled engines as toxic air contaminants (TACs), and reducing diesel 

particulate emissions is a priority for the ARB. In October 2000, the ARB approved a 

comprehensive Diesel Risk Reduction Plan [ARB, 2000] to reduce diesel emissions 

from both new and existing diesel-fueled engines and vehicles. The Plan is a roadmap 

that identifies the steps that ARB will be taking to develop specific regulations to reduce 

diesel PM10 emissions. The ability to fund projects that reduce PM10 emissions will 

help ARB and districts reduce the risk associated with exposure to toxic diesel PM10. 

Retrofit technologies to reduce PM10 emissions from diesel engines are becoming 

more widely available. These retrofit technologies include diesel oxidation catalysts, 

passive and active diesel particulate filters, flow-through filters, and fuel additives. 

A number of these retrofits have been verified by the ARB and could be funded using 

Carl Moyer Program grants. Airborne toxic control measures (ATCMs) already require 

some diesel-fueled sources to install retrofit devices. Fleets that are subject to these 

ATCMs may still qualify for Carl Moyer Program funds if they install retrofits earlier than 

required so that the emission reductions achieved are surplus to regulatory 

requirements. 

B. New Cost-Effectiveness Formula to Include NOx, ROG and PM10 

Emission Reductions 

As discussed earlier, AB 923 requires the ARB to establish a weighted 

cost-effectiveness cap for Carl Moyer Program projects that reduce emissions of NOx, 

ROG and PM10. Cost-effectiveness for the Carl Moyer Program was previously based 

only on NOx emission reductions. 

Cost-effectiveness is a measure of the dollars provided to a project for each ton of 

covered emission reductions. To calculate Carl Moyer Program cost-effectiveness, the 

project grant amount is annualized based on the project’s life and an appropriate 

discount rate. This annual cost is then divided by the project’s estimated annual 

emission reductions. In order to consider NOx, ROG and PM10 emission reductions in 

one calculation, ARB staff weighted the emission reductions to develop a “weighted 

cost-effectiveness.” 

For NOx and ROG emission reductions, a weighting factor of one is used. Oxides of 

nitrogen and ROG are precursor emissions – that is they combine in the atmosphere 

with other emissions to form air pollutants such as ozone (smog) or secondary 

particulate matter. The relative importance of NOx, ROG and other precursor emissions 
I-5 PROGRAM OVERVIEW 

in the formation of smog and PM depends on many factors including location, 

temperature, geographic features, and the concentration of other pollutants. In order to 

accurately reflect the actual role of NOx and ROG, the weighting factors would have to 

be adjusted for each individual air basin. Historically, the ARB has treated NOx and 

ROG emissions equally. For example, the cost-effectiveness of ARB’s regulations is 

generally provided in dollars per ton of NOx + ROG, with no weighting factors. The Carl 

Moyer Program follows the same approach and, thus, NOx and ROG emission 

reductions carry a weighting factor of one in the weighted cost-effectiveness formula. 

ARB staff believes it is appropriate for emission reductions of combustion PM10 to carry 

additional weight in the calculation because, for an equivalent weight, these emissions 

are more harmful to human health. Non-combustion PM10 is not included in the 

weighted cost-effectiveness formula at this time because specific project criteria for 

non-engine projects have not yet been developed. 

ARB staff considered a range of weighting factors for combustion PM10, ranging from 

10 to 30. In Carl Moyer Program Advisory: # 05-001 (December 20, 2004), the staff 

weighted combustion PM10 emission reductions by 10 on an interim basis based on the 

cost to control combustion PM10 in the Solid Waste Collection Vehicle ATCM 

[ARB, 2003a]; that is, a weighting factor of 10 would offset the increased cost of 

reducing an equal amount of combustion PM10 emissions compared to the emissions 

of ozone precursors such as NOx. Based on an evaluation of a broader range of diesel 

ATCMs, staff found that the current cost to control PM10 is about 15 times the cost to 

control the ozone precursors NOx and ROG. 

ARB staff also evaluated the relative health benefits of reducing NOx emissions and 

reducing PM10 emissions. ARB staff estimated the monetary benefits by considering 

health endpoints that could be expected from reducing a given amount of combustion 

PM10 emissions, including premature deaths, asthma related emergency room visits, 

work loss days, and minor restricted activity days. Staff estimated monetary values for 

these benefits based on various economic values established for these health endpoints 

by both the U.S. EPA and the ARB [U.S. EPA, 2000a; U.S. EPA, 2000b; U.S. EPA, 

2003; U.S. EPA, 2004; ARB, 2003b]. Based on this evaluation, the health benefits of 

reducing one ton of PM10 outweighed the health benefits of reducing one ton of NOx by 

about 30 times. 

Based on the staff’s evaluation, as well as discussions with stakeholder groups, 

combustion PM10 is weighted by 20 times. Staff believes that this weighting factor 

balances the objective of the Carl Moyer Program to obtain SIP-creditable emission 

reductions while also reducing the risk associated with toxic diesel particulate matter. 

Thus, the formula for weighted cost-effectiveness is: 

Annualized Cost ($/year) 

(NOx reductions + ROG reductions + 20 x combustion PM10 reductions) (tons/year) 
I-6 PROGRAM OVERVIEW 

Some stakeholders also suggested incorporating exposure, particularly to sensitive 

receptors such as school children, into the cost-effectiveness calculation. After 

considering the nature of mobile source projects which travel throughout local air 

districts, and sometimes the entire state, and the potential difficulties associated with 

assessing the location, timing, and duration of emissions of each individual 

Carl Moyer Program project, it was decided not to incorporate exposure into the 

cost-effectiveness calculation at this time. 

Although the weighted cost-effectiveness formula does not incorporate exposure, it 

should be noted that local districts have the discretion to use project selection criteria 

that account for exposure. In addition, local districts with a population of over 

one million must have a method in place to provide for the expenditure of 50 percent of 

Carl Moyer Program (HSC section 43023.5) funds for projects that operate or are based 

in environmental justice areas. 

C. Administrative Requirements 

To ensure the best use of public funds and continued public confidence, the 

Carl Moyer Program must have clearly defined administrative responsibilities and 

oversight. The administrative criteria formalize existing practices and policies, and 

contain minimum requirements that ARB and local air districts must follow to continue 

implementing a successful statewide Carl Moyer Program based on the requirements of 

the Health and Safety Code. The requirements identify ARB’s responsibilities pertaining 

to program oversight, audits, and recapture of districts’ funds. They also identify the 

minimum requirements that districts must include in their local programs so ARB can 

document the districts’ success and determine if funds need to be recaptured. 

D. Agricultural Sources 

The Carl Moyer Program has funded the clean-up of over 2,000 agricultural engines. 

AB 923 expanded the source categories that are eligible for Carl Moyer Program 

funding to include agricultural sources of air pollution as defined in HSC section 

39011.5(a). This definition includes stationary and area-wide sources of pollution 

including engines, livestock operations, and other agricultural activities. 

The Guidelines respond to the legislative direction by including projects to reduce 

emissions from internal combustion engines that are agricultural sources. However, 

project criteria for non-engine agricultural projects have not been proposed at this time. 

The Board has directed the Executive Officer develop and approve project criteria for 

non-engine agricultural sources when technology is available to ensure that the 

emission reductions are real, surplus, quantifiable, and enforceable. If these projects 

include reductions of non-combustion PM10, the criteria will include a weighting factor 

for non-combustion PM10 for use in the cost-effectiveness formula. 
I-7 PROGRAM OVERVIEW 

E. Agricultural Assistance Program 

AB 923, in HSC section 44229, also creates an opportunity to provide incentives to fund 

new purchases, retrofit, repower, or add-on equipment for previously unregulated 

sources of air pollution. ARB staff is referring to this new program as the “Agricultural 

Assistance Program”. AB 923 allows a portion of the $2 MV Fees to be used to fund 

this program. One major difference from the Carl Moyer Program is that Agricultural 

Assistance Program projects are not required to achieve surplus emission reductions. 

The HSC requires that Agricultural Assistance Program projects comply with the 

Carl Moyer Program Guidelines. Based on this statutory guidance, the Agricultural 

Assistance Program is modeled on the Carl Moyer Program Guidelines. Agricultural 

Assistance Program projects are limited to those for which the Board has approved 

Carl Moyer Program Guidelines. Guidelines for stationary and portable agricultural 

engines are included. Guidelines for non-engine projects, such as dairies, are not 

included at this time, but will be developed by ARB staff, in consultation with interested 

stakeholders, when technologies for such projects become available. 

F. Light-Duty Vehicle Program 

AB 923 authorizes the districts and the ARB to fund projects to reduce emissions from 

light-duty vehicles under the Carl Moyer Program (HSC section 44275). Light-duty 

vehicle projects are initially limited to voluntary accelerated vehicle retirement (VAVR) 

programs that meet the ARB’s VAVR regulations. The option of using remote sensing 

devices (RSDs) to identify high emitting vehicles that can be targeted for voluntary early 

retirement and is taking a two-step approach to integrate RSD into the Carl Moyer 

Program and the VAVR regulation is also an option. As a first step, the ARB has 

authorized a RSD-based “High-Emitting Vehicle Identification, Repair, and Scrapping 

Program” to be run by the South Coast Air Quality Management District during 2005 

and 2006. The ARB will use the data from this project to revise the VAVR regulation 

and these guidelines in 2006. After the ARB revises the regulation and the Carl Moyer 

Program Guidelines to fully incorporate RSD, any district that chooses to would be able 

to develop and implement RSD-based VAVR programs. 

G. On-Road Fleet Modernization Program

AB 1394 expanded the Carl Moyer Program to include on-road fleet modernization 

(HSC section 44297), which is the replacement of an old, high-polluting, heavy-duty 

vehicle, which was not likely to be replaced on its own, with a cleaner vehicle. Fleet 

modernization provides incentive funds to truck owners that typically do not have the 

financial resources to buy a newer, cleaner vehicle. Incentives offset part of the cost of 

the newer, lower polluting vehicle. ARB staff has incorporated a heavy-duty vehicle 

fleet modernization component into the Carl Moyer Program. 
I-8 PROGRAM OVERVIEW 

 H. Zero-Emission Projects

Zero-emission technology, such as electric equipment, is a key element of California's 

long-term plan for attaining health-based air quality standards. Zero-emission 

technology is able to provide major reductions of NOx, ROG, and PM10 emissions, as 

well as reductions in emissions of TACs and greenhouse gases. In addition, electric 

equipment will remain emission-free throughout its life. Yet, despite these attributes, 

and the fact that electric technologies are ideally suited for a number of 

Carl Moyer Program projects, there have been relatively few zero-emission projects 

funded through Carl Moyer Program grants. Districts are now required to encourage 

zero-emission projects. Each district may choose how to encourage zero-emission 

projects. Options include, but are not limited to, a funding set-aside, priority processing, 

or additional outreach. ARB staff has also developed a Zero-Emission Project chapter 

in these Guidelines to highlight potential projects. 

I. Streamlining Program Administration for Small Businesses 

ARB staff is committed to work with local air districts to evaluate ways to improve the 

efficiency of the Carl Moyer Program. Improved program efficiency would benefit all 

applicants seeking Carl Moyer Program grants, but may be especially beneficial for 

small businesses. 

As part of this effort, ARB staff will work with the South Coast Air Quality Management 

District staff to develop a program next year to examine the feasibility of a rebate or 

voucher program to streamline and expedite fund disbursement. Based on the results 

of this program, ARB staff will evaluate whether a rebate or voucher program can be 

implemented statewide. If feasible, ARB staff will develop specific criteria for rebate or 

voucher programs to be incorporated in the next Carl Moyer Program Guideline 

revision. Prior to the next Guideline revision, ARB staff may also provide interim 

guidance to districts on how to implement a rebate or voucher program. 

J. Other Revisions 

In addition to the revisions specifically discussed above, the Carl Moyer Program 

guideline revision also contains other criteria that are specific to each project category. 

These revisions reflect input from the public and air districts, as well as new statutory 

requirements. 

The Guidelines adjust the cost-effectiveness cap from $13,600 per ton of NOx to 

$14,300 per ton of weighted NOx, ROG, and combustion PM10 emissions to account 

for an approximately 5 percent inflation rate from 2003 to present. This number is 

based on the California average Consumer Price Index [U.S. BLS, 2005]. A discount 

rate of 4 percent is used to calculate the capital recovery factors in determining the 

annualized cost of Carl Moyer Program grants provided for a project. This number is 

based on the average annual yields for U.S. Treasury securities, averaged from 
I-9 PROGRAM OVERVIEW 

January 2005 through August 2005, with a 3-year, 5-year, 7-year, and 10-year 

maturation [U.S. FRB, 2005]. 

Additionally, the revisions also reflect the current regulatory environment, new 

technology, and potential projects. These project criteria, along with program 

administration criteria and updated emission rates are discussed in more detail in each 

chapter of the Guidelines. 

IV. References 

ARB, 2000. Risk Reduction Plan to Reduce Particulate Matter Emissions from 

Diesel-Fueled Engines and Vehicles. 

http://www.arb.ca.gov/diesel/documents/rrpFinal.pdf

ARB, 2001. Staff Report: Initial Statement of Reasons. Proposed Amendments to Air 

Resources Board Voluntary Accelerated Vehicle Retirement Regulations – Minimize 

Differences Between ARB and BAR VAVR Regulations and Allow Parts Recycling and 

Resale of Non-Emission Related and Non-Drive Train Parts. 

http://www.arb.ca.gov/regact/vavr/isor.pdf 

ARB, 2003a. Staff Report: Initial Statement of Reasons. Proposed Diesel Particulate 

Matter Control Measure for On-Road Heavy-Duty Residential and Commercial Solid 

Waste Collection Vehicles. http://www.arb.ca.gov/regact/dieselswcv/isor.pdf 

ARB, 2003b. Final Research Report: The Economic Value of Respiratory and 

Cardiovascular Hospitalizations, May 31, 2003. 

ftp://ftp.arb.ca.gov/carbis/research/apr/past/99-329.pdf 

ARB, 2004. Lower-Emission School Bus Program – Final Revised Guideline 

Addendum. http://www.arb.ca.gov/msprog/schoolbus/2004final.pdf 

U.S. BLS, 2005. Consumer Price Index – All Urban Consumers, http://data.bls.gov/cgibin/surveymost, U.S. Department of Labor, Bureau of Labor Statistics, August 2005. 

U.S. EPA, 2000a. Regulatory Impact Analysis: Heavy-Duty Engines and Vehicle 

Standards and Highway Diesel Fuel Sulfur Control Requirements, December 2000. 

EPA-420-R-00-026. Office of Air Radiation, Research Triangle Park, NC 

U.S. EPA, 2000b. Cost of Illness Handbook. http://www.epa.gov/oppt/coi/view.html 

U.S. EPA 2003. Draft Regulatory Impact Analysis: Control of Emissions from Nonroad 

Diesel Engines, April 2003, EPA-420-R-03-008, Office of Transportation and Air Quality. 

U.S. EPA, 2004. Final Regulatory Impact Analysis: Control of Emissions from Nonroad 

Diesel Engines, May 2004, EPA-420-R-04-007, Office of Transportation and Air Quality. 
I-10 PROGRAM OVERVIEW 

U.S. FRB, 2005. Federal Reserve Statistical Release, H.15, Selected Interest Rates, 

http://federalreserve.gov/Releases/H15/data.htm, U.S. Federal Reserve Board, Release 

date: September 19, 2005. 
II-1 PROGRAM ADMINISTRATION 

Chapter Two 

ADMINISTRATION OF THE CARL MOYER PROGRAM 

The Carl Moyer Program has been successfully implemented through the cooperative 

efforts of the Air Resources Board (ARB) and the local air pollution control and air 

quality management districts (districts). Health and Safety Code (HSC) section 44286 

authorizes ARB to make grant awards to local air districts that apply for funds to 

implement a local Carl Moyer Program. The ARB has ultimate oversight responsibility 

for the statewide Carl Moyer Program. The districts implement their local programs in 

accordance with the guideline criteria approved by ARB. These Guidelines are binding 

and enforceable. The ARB provides the districts with flexibility in implementing the 

program, including the authority to implement stricter criteria based on their local air 

pollution challenges and air quality goals. 

The ARB’s goal is to administer the Carl Moyer Program stringently enough to ensure 

emissions benefits are realized, while maintaining enough flexibility to allow for ease in 

district and applicant participation and maintaining enough transparency for public 

scrutiny. The ARB has followed the requirements of HSC sections 44287 through 

44297 in determining and reporting the success of local districts’ programs. For each 

funding cycle, the districts are currently required to report to ARB three times during the 

two-year period, in order for ARB staff to track local progress in spending the 

Carl Moyer Program funds. With continued funding increasing up to $140 million per 

year from all funding sources through 2015, it is critical to track funds from the point the 

district applies for funds from ARB, through the point the local district pays for a project, 

and during project implementation. This chapter formalizes the minimum requirements 

that ARB and local air districts must follow to continue implementing a successful 

statewide Carl Moyer Program. The chapter is designed to outline ARB’s responsibility 

pertaining to program oversight, audits, and recapture of districts’ funds. It also 

provides the minimum requirements that districts must include in their local programs so 

ARB can document and publicly report the districts’ success and failures, and determine 

if there is a need to recapture Carl Moyer Program funds. 

I. Administrative Terminology 

Carl Moyer Program Funds. Carl Moyer Program funds include both the state funds 

awarded by the ARB (as provided by statute) and district matching funds. 

Contract. A contract, grant, or other legally binding agreement used by a district to 

obligate and expend funds for a project funded through the Carl Moyer Program. 
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II. Funding Sources and Types of Carl Moyer Projects 

A. New Carl Moyer Program Funding Sources 

Two key pieces of legislation enacted in 2004 have expanded the Carl Moyer Program 

and brought an increased, continued source of annual funding through 2015. These are 

Senate Bill 1107and Assembly Bill 923 (Firebaugh/Pavley). 

1. Senate Bill 1107 (SB 1107) 

As part of the fiscal year 2004-2005 budget, this legislation adjusted the Smog Check 

fee while extending the newer-vehicle Smog Check exemption, securing about 

$7 million for consumer assistance in the Smog Check program and about $61 million in 

annual funding to be deposited in the Air Pollution Control Fund to fund the 

Carl Moyer Program “... to the extent that the state board or a participating district 

determines that the moneys are expended to mitigate or remediate the harm caused by 

the type of motor vehicle on which the fee is imposed” (HSC, section 44091.1). 

The adjustment to the Smog Check fee is imposed on vehicles that are subject to 

biennial smog checks. Vehicles subject to the Smog Check Program include 

gasoline-powered passenger cars, light-duty trucks, medium-duty trucks, and 

heavy-duty trucks. These vehicles emit about 620 tons per day (tpd) of NOx, 400 tpd of 

ROG, and 13 tpd of PM10 emissions. It is the harms caused by these automotive 

pollutants that the fees will be used to mitigate. Under the Smog Check Program, 

vehicles are required to be tested every two years to measure the levels of NOx, 

hydrocarbon (HC), and carbon monoxide (CO) emissions. Vehicles exceeding the 

allowed emission thresholds are required to be repaired prior to being able to renew 

their registrations with the Department of Motor Vehicles. Vehicles powered with diesel 

engines are not subject to the Smog Check Program. 

Gasoline engines generally do not produce as many NOx and PM10 emissions as 

diesel engines. On a per mile driven basis, the ARB’s emission inventory shows that 

heavy-duty diesel trucks emit about 22 times the NOx, 21 times the PM10, and 

1.5 times the ROG emissions compared to gasoline-powered vehicles subject to the 

Smog Check Program (see Table 2-1). In addition to heavy-duty diesel trucks, other 

heavy-duty diesel engines and pollution sources also contribute significantly to NOx, 

ROG, and PM10 emissions. 

Particulate matter emissions from both gasoline-powered vehicles and heavy-duty 

diesel vehicles are formed in the combustion process and are dominated by fine PM. 

Strong links have been demonstrated between elevated fine particulate levels and 

premature deaths, hospital admissions, emergency room visits, and asthma attacks 

[ARB, 2002]. In addition, regardless of their origin, whether from light-duty 

gasoline-powered vehicles or other sources, NOx and ROG emissions react in the 

atmosphere to form ozone. Ozone is a powerful oxidant that can damage the 

respiratory tract, causing inflammation and irritation, and induces symptoms such as 
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coughing, chest tightness, shortness of breath, and worsening of asthma symptoms 

[ARB, 2005]. Recent evidence has, for the first time, linked the onset of asthma to 

exposure to elevated ozone levels in exercising children [McConnell, 2002]. Light-duty 

vehicles are one of a multitude of sources that emit both NOx and ROG; a strategy that 

effectively reduces these emissions, no matter from what source, would reduce the 

harm caused by motor vehicles and have positive health benefits for the people of 

California, and particularly for sensitive groups, including young children.

Table 2-1 

NOx, ROG, and PM10 Emissions from Vehicles Subject to the Smog Check 

Program and Heavy-Duty Diesel Trucks for 2005 

(grams per mile)

Pollutants “Smog-Check” Vehicles Heavy-Duty Diesel Trucks

NOx 0.7 15.2 

ROG 0.4 0.7 

PM10 0.015 0.32 

 Source: EMFAC2002_v2.2, April 23, 2003 

Gasoline-powered vehicles, particularly light-duty vehicles, in California are already 

subject to the most stringent emission standards in the nation. It is challenging to obtain 

additional emission reductions from individual new vehicles over these already 

extremely low emission levels. In-use emissions from existing gasoline-powered 

vehicles are significant, especially from older vehicles, due to deterioration and as a 

result of mal-maintenance. However, in-use emissions already are being addressed 

through the Smog Check Program as well as the vehicle repair and scrap program 

being operated by the Bureau of Automotive Repairs (BAR) (HSC, sections 

44100-44122, in part). 

As discussed earlier, AB 923 expanded the Carl Moyer Program to allow funding for 

projects to reduce emissions from light-duty vehicles (HSC, section 44275). Thus, 

project criteria have been developed for funding light-duty vehicle projects through the 

voluntary accelerated vehicle retirement program. ARB staff will also participate in a 

program that is being planned for 2006 in the South Coast Air Basin to evaluate a 

remote sensing program to detect gross-polluting vehicles. Staff believes that the 

programs described above, both for the BAR program and the ARB Carl Moyer 

Program, for light-duty vehicles represent adequate and reasonable efforts to reduce 

emissions from this class of vehicles. As staff gains more information on the 

accelerated vehicle retirement and the remote sensing programs, staff plans to revisit 

this category and will revise the funding criteria for these projects to more fully 

incorporate them in the Carl Moyer Program. 

Based on the discussion presented above, maximum and cost-effective emission 

benefits to mitigate the harms caused by light-duty vehicles would be obtained if funds 

from the adjustment to the Smog Check fee, as provided for by SB 1107, are used to 
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reduce emissions from other sources of the same pollutants as automobiles produce. 

This approach would most expediently and effectively reduce NOx, ROG, and PM10 

emissions and would serve the best interests of the people of California. Local air 

districts have the authority to select projects that would most effectively reduce NOx, 

ROG, and PM10 emissions in their local area. 

2. Assembly Bill 923 (AB 923) 

This legislation introduced significant revisions to the Carl Moyer Program, including two 

new funding sources for the Carl Moyer Program – the adjustment to the tire fee and an 

allowance for an increase to the motor vehicle registration fee. 

Increase in Tire Fee. Assembly Bill 923 adjusted the tire fee that is assessed on 

purchasers of new tires from the current $1.00 per tire to $1.75 per tire starting 

January 1, 2005. The tire fee is reduced to $1.50 per tire staring on and after 

January 1, 2007 (Public Resources Code, section 42885). The adjustments to the tire 

fee translate to about $25 million available for the Carl Moyer Program in 2005-2006, 

and $16 million from 2007 on. 

The legislation requires a portion of the revenues generated by the tire fee to be 

deposited in the Air Pollution Control Fund for use by the ARB and the air districts. 

AB 923 also requires the ARB to expend or allocate the portion of the tire fee 

adjustment that is directed to the Air Pollution Control Fund to fund programs and 

projects that mitigate or remediate air pollution caused by tires in the state, to the extent 

that the state board or the applicable district determines that the program or project 

remediates air pollution harms created by tires upon which the fee described in 

Section 42885 is imposed” (Public Resources Code, section 42889). 

Air pollutants generated through tire wear are particulate matter whose composition is 

directly related to the constituents and processes used to manufacture the new tire. 

Tires are manufactured using a mixture of natural rubber; styrene-butadiene synthetic 

rubber; carbon black; molecular sulfur and sulfur compounds; silicone elastomers; 

phenolic resin; aromatic, naphthenic, and paraffinic oils; petroleum waxes; zinc oxide, 

titanium dioxide and other metals; fatty acids and inert materials. Carbon blacks 

typically contain varying quantities of adsorbed by-products from the production 

processes, particularly aromatic compounds. Typical classes of chemicals adsorbed 

onto the carbon black surface are carcinogenic polycyclic aromatic hydrocarbons 

(PAHs), nitro-derivatives of PAHs and sulfur-containing PAHs. The presence of these 

compounds can significantly increase the hazards of carbon black exposure. Some of 

these compounds have been identified by the ARB as TACs. 

The legislative intent of the portion of the tire fee as expressed in AB 923 is to reduce 

PM and TAC emissions to improve air quality for Californians. Elevated PM emissions 

have been linked to premature deaths and other health ailments, such as asthma 

attacks. Fine PM, regardless of source, can bypass the body’s defense mechanism and 

can embed deep in the lungs. Ongoing studies have indicated that particulate matter 
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pollution may significantly reduce lung function growth in children [Peters et al. 2001, 

Avol et. al. 2001, Gauderman et al. 2002] and that exposure to diesel PM could also 

cause lung cancer [ARB, 2002]. 

Technologies used to reduce PM emissions from tires generally involve strategies to 

reduce tire wear. This could be accomplished either through the use of high-mileage 

tires or by maintaining proper tire pressures. Although high-mileage tires have been 

available for a number of years, they have been marketed principally for their 

high-mileage attribute rather than for their potential to reduce PM emissions. Similarly, 

although tire manufacturers have informed consumers on the benefits of maintaining 

proper tire pressures in terms of prolonging tire life and improving fuel economy, they 

have not engaged in presenting the impacts of improper tire inflation on PM emissions. 

Existing criteria for funding Carl Moyer Program projects are based on the net emission 

benefits of using a low-emission engine or advanced technology compared to a 

conventional engine or technology. In the case of tires, it is very difficult to accurately 

quantify the emission benefits of using high-mileage tires versus conventional tires. 

Although basic information on tire wear is known, factors affecting tire wear PM 

emissions specific to the types of tires currently available, such as high mileage tires, 

conventional tires, high performance tires, as well as other specialty tires, have not 

been developed. Tire wear is also dependent on material and manufacturing process, 

as well as operational conditions, such as vehicle speed, load, tire pressures, and road 

conditions. 

Because of these factors, the potential emission benefits of high-mileage tires 

compared to conventional tires, or due to maintaining proper tire inflation, are very 

difficult to quantify accurately and to enforce. Since the primary objective of the 

Carl Moyer Program is to obtain surplus emission reductions, and because of the 

uncertainty in the actual emission benefits of these strategies, criteria for projects that 

reduce tire wear cannot be developed for this Guidelines revision. ARB staff will 

continue to evaluate the potential for these projects to receive Carl Moyer Program 

funding as technologies to reduce tire wear emissions continue to be developed so that 

we can accurately quantify the emission benefits. 

Since projects to reduce tire wear cannot be evaluated using traditional 

Carl Moyer Program criteria, the funds associated with the tire fee will be used on 

projects that remediate the harms caused by PM and TAC emissions generally, since 

these emissions are caused by tires. 

Potential $2 Motor Vehicle Registration Fee Increase ($2 MV Fee). AB 923 

amended the HSC to authorize districts in non-attainment areas to increase the motor 

vehicle registration fee surcharge, currently authorized up to $4 to fund specified air 

district activities to implement the California Clean Air Act, by up to $2, provided air 

district governing boards formally approve the increase. Health and Safety Code 

section 44229 (b) directs the districts to use the $2 MV Fee increase to implement any 
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or all of the following four programs “...that the district determines remediate air 

pollution harms created by motor vehicles on which the surcharge is imposed”: 

• Projects eligible for grants under the Carl Moyer Program. 

• The new purchase, retrofit, repower, or add-on equipment for previously unregulated 

agricultural sources of air pollution, for a minimum of three years from the date of 

adoption of an applicable rule or standard, or until the compliance date of that rule or 

standard, whichever is later. The ARB is calling this program the “Agricultural 

Assistance Program.” 

• The new purchase of school buses pursuant to the Lower-Emission School Bus 

Program. 

• An accelerated vehicle retirement or repair program. 

If each eligible district chose to use the entire $2 increase to fund the 

Carl Moyer Program, the adjustment to the motor vehicle registration fee could provide 

up to $55 million directly to the local air districts for the Carl Moyer Program. Motor 

vehicles subject to the registration fee surcharge include all on-road vehicles, e.g. 

light-duty, medium-duty, and heavy-duty vehicles. On-road vehicles are major 

contributors of NOx, ROG, and PM10 emissions. As shown in Table 2-2, these vehicles 

emit about 1,518 tons per day of NOx, 772 tons per day of ROG, and 50 tons per day of 

PM10 in 2005. As discussed in previous sections, strong links have been demonstrated 

between elevated fine particulate levels and premature deaths, hospital admissions, 

emergency room visits, and asthma attacks [ARB, 2002]. In addition, NOx and ROG 

emissions react in the atmosphere to form ozone, a powerful oxidant that can damage 

the respiratory tract, causing inflammation and irritation, and induces symptoms such as 

coughing, chest tightness, shortness of breath, and worsening of asthma symptoms 

[ARB, 2005]. On-road vehicles are one of a multitude of sources that emit the NOx, 

ROG, and PM10 emissions that cause these harms. In addition to heavy-duty diesel 

trucks, other heavy-duty diesel engines and pollution sources also contribute 

significantly to NOx, ROG, and PM10 emissions. As shown in Table 2-2, these other 

mobile sources emit about 908 tons per day of NOx, 436 tons per day of ROG, and 

69 tons per day of PM10 in 2005. A strategy that effectively reduces these emissions, 

no matter from what sources, would reduce the harms caused by motor vehicles and 

have positive health benefits for the people of California, particularly for sensitive 

groups, including young children. 
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Table 2-2 

NOx, ROG, and PM10 Emissions from 

On-Road Mobile and Off-Road Mobile Sources for 2005

(tons per day)

Pollutants On-Road Mobile Off-Road Mobile 

NOx 1518 908 

ROG 772 436 

PM10 50 69 

 Source: The California Almanac of Emissions and Air Quality, 2005 Edition 

B. Outreach Funds 

The ARB sets aside up to two percent of the total Carl Moyer Program annual funding 

for local air district outreach to implement their local program. These funds are 

distributed to each district based on the annual allocation of project funds that a district 

receives. Administrative funds shall be used for direct costs associated with the tasks 

outlined in this chapter and must be documented by the district. Examples of such 

costs and the documentation required are: 

• Staff time to complete the tasks outlined in this chapter. The staff time shall be 

documented with time sheets. 

• If consultants are used to assist districts in administering their local programs, 

consultant fees may also qualify. They shall be documented with a contract and 

invoices. 

• Printing, mailing and travel costs directly associated with the implementation of the 

Carl Moyer Program may also qualify. These costs shall be documented with 

receipts and/or invoices. 

 C. Matching Funds 

The district matching fund requirement is important because it provides a literal “buy-in” 

from the districts responsible for the selection, monitoring, and enforcement of the 

projects. This requirement helps ensure that the most worthwhile projects are selected 

and that more funds are available for clean air projects. 
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1. Match Fund Formula 

Currently districts participating in the Carl Moyer Program are required to provide $1 in 

match funding for every $2 of state Carl Moyer Program funding awarded by ARB, with 

a cap on statewide match funds at a total of $12 million. The formula provided below is 

used to determine each district’s required matching funds. 

District’s annual allocation * $12,000,000

[Current annual funding level - (ARB & district admin./outreach funds + 10% holdback)] 

The ARB recognizes the fiscal realities, especially for rural districts, which make it a 

challenge to meet matching fund requirements of the Carl Moyer Program. Currently, a 

district receiving the minimum grant award of $200,000 may request a waiver of the 

match fund requirement provided the district can demonstrate appropriate staff 

commitment for program implementation and administration. The ARB staff works 

closely with local district staff to determine the proper level of commitment necessary 

based on previous history of projects funded and performance. 

2. Sources of Matching Funds and Allowable Expenditures 

Districts have a variety of local funds under their fiduciary control that can be used to 

meet their match fund requirement. Districts are allowed to meet their matching fund 

requirement on an overall program basis, rather than a project-by-project basis. This 

allows the districts the flexibility to fund worthwhile clean air projects from a variety of 

targeted funding sources. 

AB 2766 - $4 Surcharge on Motor Vehicle Registration Fees ($4 MV Fee). Many 

districts receive funds from a $4 surcharge on motor vehicle registration fees. Funds 

generated by the $4 MV Fee must be used for projects that reduce emissions from 

motor vehicles and infrastructure when it serves Carl Moyer Program motor vehicle 

projects [ARB, 1998]. Table 2-3 below gives a partial list of motor vehicles that are 

eligible to be funded by the $4 MV Fee. The non-motor vehicles listed below are not 

eligible project categories for motor vehicle registration fee funds. 
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Table 2-3 

Motor Vehicles vs. Non-Motor Vehicles 

Motor Vehicles Non-Motor Vehicles 

Automobiles Locomotives 

Trucks Aircraft 

Buses Lawn mowers (non-riding) 

Vans Leaf blowers 

Road graders Refrigeration units 

Earth movers Chain saws 

Tractors Auxiliary generators 

Golf carts Welding machines 

Motorcycles Pleasure craft 

Self-propelled harvesters Cranes 

Forklifts Marine vessels 

Sweepers Stationary agricultural engines 

Motorized Bicycles Bicycles 

AB 923 – $2 MV Fee. As previously discussed, statewide the $2 MV Fee could 

generate up to $55 million annually if local governing boards approve the adjustment. 

As indicated in HSC sections 41081(d), 44225 and 44229(b), districts approving the 

adjustment must use those funds in one of the four areas previously discussed. 

If districts use the $2 MV Fee to pay for projects that meet the Carl Moyer Program 

criteria (including infrastructure in support of a Carl Moyer Program-funded motor 

vehicle project) or light-duty accelerated vehicle retirement and repair programs that 

meet the Carl Moyer Program Guidelines, those funds count toward a district’s match 

fund requirement. Emission reductions generated from projects in both categories are 

considered to be surplus. Note that projects paid for under the Agricultural Assistance 

Program do not need to meet the criteria that all funded emission reductions must be 

“surplus” to those reductions required by law, although other Carl Moyer Program 

criteria, however, must be met. In addition, projects paid for under the Lower Emission 

School Bus Program also do not have to be surplus nor do they have to meet the 

cost-effectiveness criteria under the Carl Moyer Program. Hence, only funds from the 

$2 MV Fee that are used on projects that meet the Carl Moyer Program Criteria may 

count toward the district’s match funding requirement. 

Since the Health and Safety Code requires districts to use the $2 MV Fee on projects in 

four specified areas, it is necessary for ARB to monitor and document that public funds 

are being spent as intended by law. Hence, all projects funded by the $2 MV Fee will 

be subject to the same reporting, auditing, and oversight requirements as other 

Carl Moyer Program projects. After deciding whether to adopt the additional $2 MV Fee 

and which category(ies) of projects to use the funds for, districts must report projects 

funded by the extra $2 MV Fee in the Carl Moyer Program database (including 

non-Carl Moyer Program projects funded with the $2 MV Fee). 
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Other District Funds. Other funds under the districts’ budget authority may be used as 

match. The eligible expenditures for match with other district funds include: 

• Carl Moyer Program Projects. Match funds may be used to pay for any project 

which meets the Carl Moyer Program requirements of providing cost-effective 

emission reductions that are real, surplus, enforceable, and quantifiable and that 

meet the other project criteria in these Guidelines.

• Incremental Fuel Cost. Match funds may be used to pay for the incremental cost of 

liquid or gaseous fuel and electricity, other than standard gasoline or diesel, which is 

integral to a Carl Moyer Program qualifying project. 

• Infrastructure Projects. Match funds may be used for electric and alternative fuel 

infrastructure projects that serve Carl Moyer Program qualifying projects. 

• In-Kind Contributions. Up to 15 percent of a district’s match requirement may be 

fulfilled through in-kind contributions. In-kind contributions are local funds under the 

district’s fiduciary control that are used to pay for administering the local Carl Moyer 

Program, including but not limited to, staff resources assigned to the Carl Moyer 

Program, and printing, mailing, transportation and travel cost used by that staff to 

implement the Carl Moyer Program. Examples of acceptable indirect costs are 

administrative staff services to the Carl Moyer Program, office space, and telephone 

service. These in-kind contributions must be made in the same time frame as the 

agreement term for the funds, must be proportional to the time and amount 

dedicated to Carl Moyer Program activities, and shall not be carried over to other 

years. The in-kind contributions must be documented and records available for 

review during ARB or other State monitoring visits and audits. Acceptable 

documentation includes time sheets, contracts, and invoices. 

Districts are entitled to use any funds under their budget authority to cover the in-kind 

costs to administer the Carl Moyer Program. When using these other district funds for 

in-kind match, districts must follow any guidelines and other legal requirements for 

expending those other funds. While the two percent outreach funds that districts 

receive with each allocation comes under the districts’ budget authority, those outreach 

funds shall not be counted as part of a district’s in-kind match contribution 

Matching Funds from Outside Sources. HSC section 44287(e) allows port authorities to 

provide match funding for port projects. Port authorities may participate through 

projects involving their own equipment, or by soliciting port tenants to apply for project 

funding. To encourage port authority participation, port authorities are authorized to put 

up match funding for port projects, to satisfy districts' match funding obligations. Thus, 

funding provided by a port authority for a qualifying project, or for associated 

infrastructure, would count toward the district’s matching fund requirement. No more 

than 30 percent of a district’s match obligation shall come from a port authority. 
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Private companies are not allowed to provide match funding to satisfy the districts' 

match funding obligation. The requirement that districts provide the matching funds 

facilitates an equitable distribution of funds, by preventing companies with “deep 

pockets” from tying up the majority of the funds. This requirement also helps ensure 

that districts independently evaluate the projects they approve for funding. 

 D. Cost-Effectiveness 

Carl Moyer Program funding shall only be used to pay for the incremental cost of a 

project, minus any other public financial assistance, up to the program 

cost-effectiveness limit. Public financial assistance includes, but is not limited to, 

Environmental Quality Incentives Program (EQIP) and Federal Transportation Authority 

(FTA) funds. Only Carl Moyer Program funding, funding under the district’s fiduciary 

budget authority or funding provided by a port authority (to meet the match fund 

requirement), is included in the cost-effectiveness calculation. Private funding is not 

included in the cost-effectiveness calculation. Thus, a project that costs more than the 

cost-effectiveness limit may be funded, but only if outside funding is used to “buy down” 

the incremental cost. Funding for infrastructure is not included in the cost-effectiveness 

calculation. For more details on how to determine the cost-effectiveness of a particular 

project, see Part II of the Guidelines, Chapters 1-12. A general discussion of the 

cost-effectiveness calculation methodology is presented in Part IV of the Guidelines, 

Appendix C. 

 E. Obligation 

Since the inception of the Carl Moyer Program, ARB has required districts to obligate 

state funds one year from June 30 of the year the district receives its initial Grant Award 

and Authorization Form. This requirement ensures ARB that state funds will be spent in 

a timely manner as required by law. 

When obligating funds, districts shall do so by contracting with owners to complete 

selected projects. Funds are considered to be obligated when the district takes one of 

the following actions: 

• The district’s governing board approves a project for funding through a resolution, 

minute order, letter or other written instrument. 

• The Air Pollution Control Officer (APCO) or designated district staff, if given the 

authority by the governing board, approves a contract. 

• The contract between the district and the owner is fully executed. 

Carl Moyer Program funds shall be obligated by a district one year from 

June 30 of the year a district received its Grant Award and Authorization Form. 
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In the event previous years’ funds were awarded or obligated to projects that withdraw 

or are terminated, those funds shall be awarded and/or obligated to other projects along 

with the current year’s funds, following the current year’s requirements. However, for 

tracking purposes, they must be reported with the correct previous year’s reports. 

 F. Expenditures 

HSC section 44287(k) requires that Carl Moyer Program funds be expended by a 

district two years from June 30 of the year a district received its initial Grant Award and 

Authorization Form. Districts expend funds by paying owners for completing milestones 

of projects under contract. Prior to paying for a delivered engine/vehicle or making final 

payment for completed project, the district must receive an invoice from the owner and 

complete a satisfactory post-inspection. 

Some districts withhold a percentage of the grant amount until all annual reporting 

requirements are met. These withhold payments ensure the owners submit their annual 

reports and do so in a timely fashion. Districts that have withhold payments as part of 

the contract with the owner shall count the withhold payments as expended, for the 

purposes of this section, once the district pays the invoice(s) for all but the withhold 

amount. 

In the event previous years’ funds (that were obligated and invoiced) are returned to a 

district, those returned funds are to be re-obligated to projects along with the current 

year’s funds, and following the current year’s requirements. However, for tracking 

purposes, they must be reported with the correct previous year’s reports. 

G. “At-Risk” Districts 

In accordance with HSC section 44291(d), ARB shall monitor the districts’ 

implementation of the Carl Moyer Program. The ARB will use the minimum 

requirements outlined in this chapter as the benchmark for satisfactory implementation 

of the Carl Moyer Program. The ARB will also evaluate districts’ implementation of their 

local Carl Moyer Program through monitoring and auditing as required. A district will be 

determined to be “at-risk” if the district fails to demonstrate that it is implementing the 

local program consistent with this chapter, which includes but is not limited to any of the 

following: 

• Funds not being obligated and/or expended within the required time frames. 

• Funds being spent in any way that is not consistent with the requirements of the 

Carl Moyer Program. For example, not maintaining adequate fiscal and 

programmatic records. 

• Funds being spent in a way that is not consistent with the district’s own policies and 

procedures manual. 
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• Implementing the local Carl Moyer Program in a way that cannot guarantee the 

funds are being used for projects that provide real, quantifiable, and surplus 

emissions reductions within the cost-effectiveness limits. 

The ARB shall provide technical assistance to districts that are determined to be 

“at-risk.” The repercussions for “at-risk” districts that fail to correct deficiencies are 

outlined, in Section XI - ARB’s Oversight. 

H. Training and Technical Assistance

The ARB provides training and technical assistance to districts through several means. 

On a day-to-day basis ARB maintains regular communication with the local districts 

through ARB’s district liaison and the district’s Carl Moyer Program contact person. The 

ARB also provides training and technical assistance when monitoring districts’ 

performance, including review of projects and reports, and making on-site monitoring 

visits. 

After each Guideline revision, ARB provides training and technical assistance on the 

changes to the Guidelines. This training is mandatory for all participating districts. The 

ARB, in conjunction with the districts, also provides training and technical assistance at 

the quarterly Incentive Program Implementation Team (IPI Team) meetings. All districts 

must attend at least two IPI Team meetings per year. At-risk districts must attend all 

IPI Team meetings. 

III. ARB’s Carl Moyer Program Award Process 

The ARB determines the tentative awards for each year in accordance with the formula 

identified in HSC section 44299.2(a). The formula provides a minimum allocation of 

$200,000 to all districts. Districts that accept only the minimum allocation may request 

a waiver from the match requirement. With the exception of the South Coast Air Quality 

Management District (SCAQMD), awards that exceed the minimum allocation of 

$200,000 are calculated based on district population, severity of the air quality problems 

and the historical funding awards under the Carl Moyer Program. The SCAQMD award 

is based solely on population. Each year, tentative funding awards are provided in the 

Carl Moyer Program solicitation package. 

Districts may request more than the tentative award. In fact, districts are encouraged to 

request the maximum funding for which they can commit the required match funds. 

Even though some districts will opt to accept the minimum award and have the match 

requirement waived, ARB expects that the total funding requested will exceed the 

funding available. Each year, all funds will be awarded and ARB will determine the final 

funding award among the districts. If any district requests less than their tentative 

award, the remaining funds will be allocated among the districts that requested more 

than their tentative award following the required formula. 
II-14 PROGRAM ADMINISTRATION 

Health and Safety Code section 44286 grants ARB the authority to set aside 10 percent 

of Carl Moyer Program funds for projects to pay for projects that are multi-district in 

nature. As such, ARB will include an annual 10 percent hold-back from project funds to 

pay for projects that operate a portion of the time or miles outside their primary district of 

operation (within California). This includes projects that have significant air quality 

impacts in neighboring districts as a result of air pollution transport. The ARB’s 

10 percent hold-back funds will also focus on areas of statewide importance. In Year 7 

(fiscal year 2004-2005), ARB prioritized goods movement projects. Examples of 

multi-district projects funded in Year 7 include construction equipment, marine vessels, 

line haul trucks and a locomotive. 

IV. ARB’s Carl Moyer Program Solicitation 

A. Solicitation

The ARB solicits district applications to conduct a local Carl Moyer Program, by sending 

solicitation packets to the Air Pollution Control Officer (APCO) at each district. The 

solicitation packet is also made available electronically on the Carl Moyer Program 

website. The application packet includes all of the following: 

• A cover letter with instructions for completing and submitting the application. 

• An application with match requirement information and documentation requirements. 

• A match waiver request form. 

• A list of the tentative awards. 

B. Districts’ Carl Moyer Program Applications 

Districts interested in participating in the Carl Moyer Program must submit a completed 

application packet with all documentation by the posted deadline, which is 60 days from 

the date of the solicitation. The completed application packet must include the 

documents described below. 

1. Completed Application 

The ARB application must be completed and originally signed. All information 

requested must be provided or the application will be considered incomplete. 

2. Documentation for Match Commitment 

Any district may elect to request the minimum allocation of $200,000 per year and 

request a match waiver. Districts that request a match commitment waiver shall 

document the request by submitting the match commitment waiver request form which 

commits the district to provide sufficient resources to implement the local 
II-15 PROGRAM ADMINISTRATION 

Carl Moyer Program. The match waiver must be originally signed by the APCO. 

Districts requesting the monetary match waiver are not eligible to receive reallocated 

Carl Moyer Program funds. 

Districts receiving an award that exceeds the $200,000 minimum allocation must 

provide documentation of monetary match of district funds that has or will be spent on 

eligible projects. Projects that have been completed shall be documented by entering 

or uploading the project data into the Carl Moyer Program database. Future projects 

shall be proposed by listing the type of monetary match on the application and 

identifying the source of funds that the district will be using. The ARB staff will verify 

that the listed amount and source of funds are available for the district to use under the 

Carl Moyer Program. Districts may also meet up to 15 percent of their match 

requirement with in-kind contributions. 

3. Local District Board Resolution 

The application must include a resolution of the district governing board that authorizes 

the district to participate in the Carl Moyer Program and accept funds from ARB. 

Districts may want to include language and funding amounts in the resolution that 

provide the districts with the opportunity to accept additional funds, should additional 

funds become available. For districts with a match requirement, the board resolution 

shall authorize the APCO to apply sufficient funding to meet the match requirement. 

Since Carl Moyer Program funding is now authorized until 2015, districts may include a 

board resolution, which authorizes the district to implement the Carl Moyer Program for 

multiple years. Each year the district would document the resolution as still being in 

effect by simply including a copy of the resolution with the signed application. 

4. Local Carl Moyer Program Implementation Plan 

The district shall include a Carl Moyer Program implementation plan for obligating the 

grant award, including, but not limited to, how the district will complete the tasks of 

outreach, solicitation, application processing, obligation and invoicing of funds, reporting 

and monitoring. The plan must include a timeline for completing milestones for the 

identified tasks. Districts that have already submitted their implementation plan in 

previous years may submit just their timetable for implementation of the milestones and, 

if appropriate, changes the district is making to the local implementation of the 

Carl Moyer Program. 

5. Documentation of Obligation and Expenditure of Previous 

Grant Awards 

Districts that have previously been awarded Carl Moyer Program funds must have 

submitted, or submit with the application, documentation of the status 

(obligation/expenditure) of all previous years’ Carl Moyer Program funds for which no 

final report has been submitted. The details of this status report are described under 

section IV.F.1., below. ARB reviews the documentation to evaluate each district’s 
II-16 PROGRAM ADMINISTRATION 

status of obligating and expending previous years’ funds before approving additional 

allocations. This evaluation ensures funds are expended within the time frames 

required by the HSC section 44287(k). 

C. Review and Approval of Carl Moyer Program Applications 

The ARB receives the applications and determines if each application is complete. If 

the application is incomplete, ARB shall provide the district with a written explanation of 

what is missing from the application within ten working days of receipt of the application. 

Once the district application is complete, ARB shall verify all commitments of monetary 

match and, complete a review of all previous years’ Carl Moyer Program funding. 

While districts may apply for funding each year, beginning with Year 9 (fiscal year 

2006-2007) for the Year 10 funding application, ARB specifies minimum requirements 

regarding the amount of funds that each district must obligate from previous awards in 

order to receive a grant award in the new funding cycle. The requirements are as 

follows: 

• Any district receiving the minimum award of $200,000 that has not obligated at least 

50 percent of their funds from the previous year shall not be eligible to receive funds 

for the current fiscal year. 

• Any district receiving more than the minimum award of $200,000 that has not 

obligated 70 percent of their funds from the previous year shall only be eligible to 

apply for a reduced award amount and shall not be eligible to accept additional 

funds, should they become available. 

Any district that has not met the obligation requirements by the application deadline 

may still reserve funds for the current year. However, the district will be given a 

grant award that contains conditions requiring that the district must obligate and 

provide documentation of that obligation for an increased percentage (70 percent for 

districts that requested the minimum allocation and 90 percent for districts that 

requested more than the minimum allocation) of their allocation by April 30 of the 

current year. Any district that fails to meet this obligation requirement shall have 

their current year’s allocation cancelled or reduced. ARB will consider the amount of 

funds that can be reasonably obligated in consultation with the district. 

ARB shall redistribute any cancelled funds following the formula identified in 

HSC section 44299.2(a). However, only those districts that have applied for 

additional funds during the application period, and have met the match fund 

requirements and the obligation requirements will be considered in the formula. 

• Districts may elect to return unobligated funds from previous years to obtain their full 

current year award. 
II-17 PROGRAM ADMINISTRATION 

• “At-risk” districts are only eligible to apply for funds once corrective action has been 

taken and the “at-risk” determination has been removed. 

Complete applications, which fulfill all criteria, shall be approved no later than 60 days 

after receipt. On a case-by-case basis, ARB may elect to approve an application that is 

missing a particular item and make the submittal of that item a stipulation of the Grant 

Agreement. For example, sometimes district staff is unable to obtain a board resolution 

before the application deadline. In such a case, ARB may allow a board resolution to 

be submitted with the signed Grant Agreement or prior to the district’s initial 

disbursement. 

D. Final Grant Awards 

Once all of the districts’ applications have been approved, ARB will determine the final 

awards. Final awards are incorporated into the Grant Award and Authorization with the 

districts. The Grant Award and Authorization Form shall specify the amount of each 

districts’ award that are from the smog check fee, the tire fee and for outreach. The 

ARB prepares and submits two original copies of the Grant Award and Authorization 

Forms to qualifying districts. The districts review and have the authorized person 

(usually the APCO) originally sign both copies of the agreement. The districts retain 

one fully executed copy of the agreement for their files and return one original copy of 

the fully executed agreement to the ARB. April 30 of each year is the deadline for 

acceptance of a grant award. From June 30 following the full execution of the 

agreement, the districts have 12 months (one year) to obligate and 24 months 

(two years) to expend the grant award. 

E. Disbursement Requests to Districts 

1. Initial Disbursements 

In order to receive a disbursement, each district must submit a Grant Disbursement 

Request to ARB. The Grant Disbursement Request form must be signed by a district 

board-authorized party. If there are stipulations on the Grant Award and Authorization 

form, all stipulations must be met prior to submitting the initial disbursement request. 

For the initial disbursement, districts may request up to ten percent of their allocation or 

$100,000, whichever is greater. If a district submits a request that documents the need 

for more than ten percent or $100,000, to the satisfaction of ARB, a larger disbursement 

may be made. In addition, districts may request half of their administrative funds. 

Districts will receive one check for both administration and project funds. However, 

districts must account for the administration and project funds separately. 

Prior to receiving the initial disbursement, districts must submit documentation of the 

obligation and expenditure of previous years’ Carl Moyer Program and required 

matching funds as follows: 
II-18 PROGRAM ADMINISTRATION 

• Obligation and expenditure of 100 percent of all Carl Moyer Program funds and 

required district match from allocations awarded 2 or more years previous. 

• Obligation of at least 90 percent of the previous year’s Carl Moyer Program and 

required match funds. 

Districts that maintain withhold payments to ensure owners submit annual reports, shall 

count those withhold payments as expended when calculating the percentage of funds 

expended for the purposes of this section. 

2. Additional Disbursements 

For additional disbursements of Carl Moyer Program funds, districts must submit a 

Grant Disbursement Request and provide documentation of obligation of previous and 

current years’ funds as follows: 

• Obligation of 100 percent of all previous years’ funds, documented by entering or 

uploading the projects’ information into the database and the submission of a copy 

of pertinent pages (initial page, signature page and page describing the project) of 

the executed contracts for the same projects. 

• Obligation of 50 percent of the initial disbursement, documented by entering or 

uploading the projects’ information into the database and submitting a copy of 

approval by board resolution, minute order, or board letter; APCO approved 

contracts; or, fully executed contracts. On a case-by-case basis, ARB may accept 

other documentation of the commitment to obligate current year’s funds. 

Districts may request the other half of their administrative funds when 50 percent of their 

Carl Moyer Program funds have been obligated. Districts will again receive one check 

for both administration and project funds and must account for the administration and 

project funds separately. 

3. Earned Interest

Any Carl Moyer Program funds provided by the State that are deposited in interest 

bearing accounts must be reported to ARB. The interest income must be used to fund 

projects that meet the current Carl Moyer Program Guidelines. Projects funded by 

interest earned shall be entered or uploaded into the database and included in the final 

report of the year from which the interest accrued.

F. District Reporting Requirements 

Districts are required to report on the status of each year of Carl Moyer Program funding 

three times. The required reports - the status, annual and final reports - are described 

below. Districts that fail to submit a satisfactory annual report on a timely basis shall be 
II-19 PROGRAM ADMINISTRATION 

deemed “at-risk.” Districts that fail to submit satisfactory initial and final reports may 

also be deemed “at-risk.” 

1. Status Report 

Each district shall submit their status report to ARB in mid-November at the time 

Carl Moyer Program district applications are due. If a district is not applying for the next 

year’s Carl Moyer Program, the district shall submit the status report, by itself, by 

November 15. The report shall use the ARB prescribed format to indicate the district’s 

progress in meeting its projected milestones from its current year’s Carl Moyer Program 

funds. This report shall be made publicly available. Funds that have been obligated to 

projects shall be documented by updating the project data in the Carl Moyer Program 

database. While not being termed “at-risk,” any district that has not met the minimum 

obligation requirement of their funds (50 percent of funds obligated for districts receiving 

the minimum allocation or less and 70 percent of funds obligated for districts receiving 

more than the minimum allocation), at this time, shall be monitored more closely by 

ARB and may be provided extra training and technical assistance. In addition, any 

district not meeting the minimum obligation requirement shall either not be eligible for 

funding or only be eligible for the minimum award as specified in Section IV.C. of this 

chapter. 

If a district has not already done so, the district shall submit their written policies and 

procedures manual for the implementation of the Carl Moyer Program as part of the 

status report. If all funds have been obligated, the database updated, and the policies 

and procedures manual submitted to ARB by the November 15 deadline, the status 

report will (with ARB approval) satisfy the requirement for the annual report. 

2. Annual Report 

Districts shall submit an annual report by or before June 30 of the year following their 

allocation. This report shall be made publicly available. At a minimum, districts shall 

submit a brief narrative report on their implementation of the Carl Moyer Program and 

update all of their project information in the database to assure data is current and 

accurate. The brief narrative shall specifically include information on: 

• Total applications received. 

• Efforts to meet environmental justice mandates, if required. 

• Efforts to outreach to potential zero-emission and small business projects. 

• Monitoring and auditing efforts and results. 

• Enforcement actions and recaptured funds, if any. 

• Outstanding features and accomplishments. 
II-20 PROGRAM ADMINISTRATION 

• Challenges in implementation. 

• For Year 8 only, information on the average and median time to obligate funds (from 

receipt of application to execution of contract). 

The update of the project information shall include the following: 

• Carl Moyer Program projects, including those funded by state funds (specified by 

smog check or tire fee), interest accrued on state funds, and local matching funds. 

• Other projects funded by AB 923 (Light Duty Vehicle, Lower Emission School Bus, 

and Agricultural Assistance Programs). 

• Any significant deviations relative to the original project shall be provided as an 

update. The status of emissions reductions by projects in the implementation phase 

is assumed to be as originally submitted, unless updated by the district. 

• Copies of executed contracts for all Carl Moyer Program projects and AB 923 

funded projects. Districts 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 describing the project) of the agreements to ARB. Districts are 

required to submit only one copy of each agreement or the pertinent pages of each 

agreement. 

If a district has previously submitted a satisfactory annual report, all funds have been 

expended and the database updated, the district may complete a combined annual and 

final report brief narrative, which will (with ARB approval) satisfy the requirement for the 

final report. 

3. Final Report 

Districts shall submit a final report no later than June 30 of the second year following 

their award or after all Carl Moyer Program funds and local match commitment have 

been expended. This report shall be made publicly available. At a minimum, districts 

shall submit a brief narrative report on their implementation of the Carl Moyer Program 

and update all of their required project information already entered into the database 

and any new project information. The brief narrative shall specifically include 

information on: 

• Results of environmental justice efforts, if required. 

• Results of outreach efforts to zero-emission and small business projects. 

• Monitoring and auditing efforts and results. 
II-21 PROGRAM ADMINISTRATION 

• Enforcement actions and recaptured funds, if any. 

• Outstanding features and accomplishments. 

• Challenges in implementation. 

• For Year 8 only, information on the average and median time to expend funds (from 

contract execution to invoice payment) 

The update will ensure that the data in the database is current and accurate. The 

update shall include all of the following: 

• Modifications to Carl Moyer Program projects, including both state funds, interest 

accrued on state funds, and local matching funds. 

• Modifications to AB 923 funds obligated for projects not meeting 

Carl Moyer Program requirements. 

• Any significant deviations relative to the original project shall be provided as an 

update. The status of emissions reductions by projects in the implementation phase 

is assumed to be as originally submitted, unless updated by the district. 

• Copies of executed contracts, as listed in item two above, that obligate 

Carl Moyer Program and local match funds to projects, which were not previously 

submitted. 

• Copies of invoices that document the amount Carl Moyer Program funds and local 

district match expended for each project. 

G. Policies and Procedures Manual 

Each District shall maintain a current policies and procedures manual, which is in 

conformance with or more stringent than these guidelines. The policies and procedures 

manual must, at a minimum, include the overall plan and day-to-day process for the 

districts’ implementation of the following tasks as outlined in this chapter: 

• District solicitation (including outreach efforts to environmental justice communities, 

to small businesses, and for zero-emission projects) and project acceptance. 

• Project selection. 

• Obligation of funds to projects. 

• Contract development and boilerplate language. 

• Monitoring of projects. 
II-22 PROGRAM ADMINISTRATION 

• Expending the funds. 

• Auditing of projects, and when necessary recapturing funds. 

• Reporting to ARB. 

• Requesting disbursements from ARB. 

The policies and procedures manual shall be submitted to ARB for approval with the 

Year 8 status report by November 15, 2006, or with the next year’s Carl Moyer Program 

application in November 2006, and with any substantive revision thereafter. 

 H. Timeline for Each Year of Funds 

Mid-September ARB solicits applications from the districts 

based on tentative awards 

Mid-November ARB receives applications from the districts 

including districts’ status report from the 

previous year 

Early January ARB notifies districts of final awards 

April 30 District deadline to accept or decline funds 

June 30 following year Districts’ annual report to ARB – funds must be 

obligated 

June 30 of second year Districts’ final report to ARB – projects invoiced

and paid for, funds expended 

V. District Solicitation and Project Acceptance 

Each district must maintain and follow written policies and procedures for soliciting and 

accepting projects. ARB encourages districts to provide clear and detailed information 

to the owner regarding the reporting requirements and consequences for failure to 

demonstrate achievement of emissions reductions. 

A. Outreach 

Outreach prior to and during the time frame of the solicitation is critical for the success 

of a local program. The districts shall focus their outreach in a way that encourages 

applications from all sectors, including environmental justice communities, small 

businesses, and zero-emission projects. Below are brief descriptions of the types of 

practices that should be included as part of a district’s outreach activities. 
II-23 PROGRAM ADMINISTRATION 

1. List of Interested Parties 

Districts should maintain a list of interested parties throughout the year and mail a 

notification to the parties on the list when funds are available. This list should also 

include prior applicants, public agencies (e.g. public works departments, sanitation 

departments, school districts), engine dealers/distributors, and where appropriate, port 

authorities, and farm bureaus. 

2. Local Newspaper Announcement

Districts are encouraged to put an announcement in local newspapers, in locally based 

trade newsletters including the local farm bureau and in the trade journals of 

organizations representing zero-emission technologies such as the Clean Cities 

Coalition and WestStart-CALSTART. 

3. Web Site Notification

If the district has a website, the Carl Moyer Program solicitation should be advertised on 

the district’s website. Similarly, if the district has a newsletter, the Carl Moyer Program 

solicitation should be advertised in the district’s newsletter. 

4. Prior Participants 

Districts should solicit additional projects from prior participants with successfully 

implemented projects, especially during monitoring visits. 

5. Small Business 

Districts are encouraged to expand the participation of small business by advertising to 

targeted industries, offering workshops to the engine dealer network, and offering to 

assist small business owners with the completion of the application. For example, many 

urban districts have found the construction industry to be a viable source of projects, 

when the districts provide outreach, training and technical assistance to the many small 

businesses that own qualifying equipment. 

6. Agricultural Community 

Districts with agricultural communities are encouraged to contact the local agricultural 

department and request that a flyer is posted that will be visible to farmers when they 

come in to get their pesticide use permits. 
II-24 PROGRAM ADMINISTRATION 

7. Advertising 

Districts may consider requiring their grantees to place a logo or decal on the new 

engine(s) advertising that the engine was funded by the district and ARB with 

Carl Moyer Program funds. 

B. Environmental Justice 

It is important that projects funded under the Carl Moyer Program benefit all Californians 

especially those in communities disproportionately impacted by air pollution. As such, 

ARB encourages all districts to incorporate an environmental justice component in their 

local Carl Moyer Programs. Districts with a population greater than 1 million inhabitants 

are required to provide funding to projects that benefit environmental justice areas 

(HSC section 43023.5). This will continue to be a requirement and an important 

component of the Carl Moyer Program for these districts. These districts are 

encouraged to continue updating current written policies and procedures, where 

necessary, to define the environmental justice areas within district boundaries. They 

must market the Carl Moyer Program to owners that operate or are based in 

environmental justice areas. These districts must select from their applicant pool in a 

way that ensures that 50 percent or more of their Carl Moyer Program funds (including 

the smog check fee, and adjustment to the tire fee) are expended on projects that are 

located and/or operate in environmental justice areas. The ARB also recommends 

these districts expend 50 percent or more of their $2 MV Fee funds on projects that are 

located and/or operate in environmental justice areas. 

C. Project Solicitation 

Below are brief descriptions of the options districts typically use for accepting 

applications. Districts may solicit two years of funds with one solicitation in order to stay 

current with the obligation requirements. When combining two years of funds in one 

solicitation, however, the previous year’s funds must be obligated first. 

1. Over the Counter

The over the counter method is also referred to as a first-come first-served application 

process, where the district announces the first day project applications will be accepted. 

Applications are accepted until all of the funds are obligated. This method provides 

districts with smaller populations a greater opportunity to garner Carl Moyer Program 

eligible projects. This method may also maximize flexibility for applicants by allowing 

them to apply at any time, up until the funds run out. 

2. Notice of Funds Available (NOFA) 

The NOFA method is also referred to as Request for Proposals (RFP), or Call for 

Projects. Districts following this method announce an application deadline for all 

proposals to be submitted. This method allows proposals to be accepted from the date 
II-25 PROGRAM ADMINISTRATION 

of the solicitation to a specified date and time. This method provides districts with a 

high demand for Carl Moyer Program funds with the opportunity to select the most 

cost-effective projects that meet local criteria through a competitive rating and ranking 

process. 

D. Project Applications 

For consistency throughout the Carl Moyer Program, to assist applicants statewide and 

to limit confusion, ARB encourages all districts to use the same application form for the 

Carl Moyer Program. The application is available on the Carl Moyer Program web site 

at http://www.arb.ca.gov/msprog/moyer/moyer.htm. Districts that use their own 

application form shall ensure it includes all the information the ARB application includes, 

as listed in each source category chapter. A few districts run their local 

Carl Moyer Program concurrently with other local heavy-duty incentive programs, which 

use one combined and unique application form. In these cases districts will have 

unique application forms. 

No matter which forms are used, districts’ applications must include a disclosure 

statement that the owner (or the owner’s designee) must initial/sign. The disclosure 

statement certifies that the owner has not submitted and shall not submit an application 

for Carl Moyer Program funds to any other district and/or the ARB for the same project. 

Owners are allowed to re-apply for project funding only if a previous application for the 

same project has been rejected and is no longer being considered for funding. In 

addition, owners are required to disclose the value of any current financial incentive that 

directly reduces the project price, including tax credits or deductions, grants, or other 

public financial assistance, for the same engine. The incremental cost of the project 

shall be reduced by the amount of the current financial incentive. Any owner or owner’s 

designee who is found to have submitted multiple applications for the same engine 

and/or not disclosed any current financial incentive shall, at a minimum, be disqualified 

from funding for that engine from all sources and may also be banned from submitting 

future applications to any and all Carl Moyer Program solicitations. In addition, as a 

violation of law, including but not limited to the Business and Professional Code, ARB 

and the districts may levee fines and/or seek criminal charges. 

Third party applications are not allowed. The owner of the engine must sign and agree 

to the application. However, a third party (e.g. engine dealer or distributor) may 

complete an application or part of an application on an owner’s behalf. Applications 

must include a signature section for third parties. The third party signature section must 

include signature and date lines, and blanks for the third party to list how much they are 

being paid, if anything, to complete the application and what source of funds are being 

used to pay them. To make the Carl Moyer Program accessible to all potential 

applicants, including applicants who cannot afford to hire third party assistance, districts 

are encouraged to provide technical assistance to applicants in completing the 

application. 
II-26 PROGRAM ADMINISTRATION 

1. Completeness of Application 

In accordance with HSC section 44288(a), districts must review all applications for 

completeness upon receipt and notify the applicants in writing if their application is not 

complete within five working days of receipt of the application. The notification must 

clearly state what is required to make the application complete. A copy of the 

notification must be maintained with the application. This written notification must be 

accomplished using one of the options below: 

• A letter, sent through the U.S. mail. 

• An email message. 

• A boiler plate form with check-offs. 

No matter what method is selected, the notification must be copied, with the original 

handed or sent to the owner and the copy must be placed in the applicant file along with 

a copy of the incomplete application. Districts are encouraged to assist applicants, 

especially small business applicants, in completing their applications. Districts may 

determine that an application is not in good faith, credible or in compliance with the 

Carl Moyer Program and its objectives. 

2. Eligibility of Projects 

All complete applications that are in good faith, credible, and in compliance with the 

Carl Moyer Program and its objectives, must be reviewed by the district for eligibility. 

This process must include all of the following: 

• Entering or uploading the data from the application into the database or the 

database calculator to ensure it meets the emission reductions and 

cost-effectiveness criteria of the Carl Moyer Program. 

• Checking to ensure the project meets all of the minimum requirements outlined in 

the chapter for the appropriate category. 

• Maintaining a record of the eligibility verification in the applicant file. 

E. Application Tracking 

Districts must have a system for tracking applications. Districts may use the database 

to track applications. At a minimum, the tracking system shall include the name and 

address of the owner, the category, and type of baseline engine. The district shall also 

maintain a copy of each application and a file for each selected project. A district may 

use a solely electronic file system only after the district satisfactorily demonstrates to 

ARB that all documentation is maintained and can be easily accessed on demand. 
II-27 PROGRAM ADMINISTRATION 

VI. Project Selection 

The districts have the authority and responsibility for selecting Carl Moyer Program 

eligible projects in their areas. Once a district has checked the eligibility of projects, the 

district must follow its policies and procedures manual in selecting projects to fund. The 

record of each project’s rating and ranking, receipt date, or other project selection 

criteria must be maintained with the application. Districts may choose to disqualify an 

application if the applicant defaulted or otherwise violated the terms of a previous 

Carl Moyer Program contract or other incentive program contract. Districts must ensure 

that selected projects are surplus to compliance deadlines of adopted regulations. 

The requirements in the following paragraph apply to those districts that do not currently 

operate and maintain their own database. 

At this time, the project information shall be entered into the database to ensure the 

project meets the emission reduction requirements and cost-effectiveness criteria of the 

Carl Moyer Program. No project shall be funded unless the database indicates the 

emission reduction requirements and cost-effectiveness criteria of the 

Carl Moyer Program have been met. If the database indicates the project does not 

meet either the emission reduction requirements or the cost-effectiveness criteria of the 

Carl Moyer Program, and the district representative thinks the project should actually 

qualify, the district representative may contact his or her ARB liaison to determine if the 

project is, in fact, eligible. 

Districts that currently operate and maintain their own database will upload their project 

information when the district requests disbursement of funds from the ARB. 

Once a project is selected, a flag shall be set in the database indicating that the project 

has been selected for funding. The project shall be assigned a Carl Moyer Program 

project number by the ARB database. Districts may continue to use their own 

numbering system within their district. All exchanges between ARB and the districts 

shall utilize the standardized project grant numbering system, and may also use the 

district’s number system upon request. 

Districts shall make every effort to process an application and grant an award rapidly. 

The district shall provide ARB with information on the average and median time frames 

to award grants as part of the districts’ Year 8 annual report. A file shall be created for 

all projects selected for funding. Grant award notification shall be in writing, and a copy 

of the grant award notification letter must be maintained in the applicant file. 

VII. Obligation of Funds to Projects 

Districts shall obligate their allocation of Carl Moyer Program funds consistent with other 

sections of this chapter. In addition, districts that have a match requirement must 

obligate their match funds in a way that meets all of the Carl Moyer Program criteria. 

Districts must document their in-kind support with fiscal records of resource allocations 
II-28 PROGRAM ADMINISTRATION 

to the Carl Moyer Program. Districts may meet up to 15 percent of their match funding 

requirement with in-kind contributions. 

For ease of financial tracking of funds, and to the maximum extent practical, projects 

should be paid entirely through either ARB funds or district match funds. If ARB funds 

and district match funds must be mixed, it shall be for only one project and, if the project 

is for more than one engine, for only one engine. If funds from two years or phases of 

the programs are used for a project, the funds must be either ARB funds or district 

match funds but not both. 

VIII. Minimum Contract Requirements 

When paying for projects using Carl Moyer Program funds, districts must enter into a 

contract with the applicant. The contract must be signed and the project milestones 

(e.g. engine delivery, engine installation, final inspection, and acceptance) shown in the 

contract must be met before Carl Moyer Program funds are given to an applicant. The 

equipment must be operating before the final payment is issued. In order to provide 

consistency in contract requirements throughout the Carl Moyer Program, staff has 

conducted an extensive review of contracts used by many local districts participating in 

the Carl Moyer Program. Staff also conducted several working group meetings to 

determine the minimum content for contracts used by districts under the 

Carl Moyer Program. Based on this research and input from districts, all districts 

participating in the Carl Moyer Program are required to incorporate the following 

minimum requirements in contracts entered into with applicants who have been 

selected to receive funds under the Carl Moyer Program. Samples of contract terms 

from existing districts’ contracts are provided to districts upon request. Actual language 

in each district’s contracts shall be established by the district in consultation with the 

district’s legal staff. 

A. Party Names and Date 

All contracts shall state the name of the district and the owner as parties to the contract. 

All contracts shall also state that, in addition to enforcement by the district, the ARB, as 

an intended third party beneficiary, reserves the right to audit and enforce the terms of 

the contract at any time during the contract term. 

B. Contract Term 

All contracts shall provide the term of the contract. The term of the contract must 

extend to the end of the project life and shall include both the project completion and 

project implementation time frames. The contract term shall include two main time 

frames − project completion and project implementation/life periods − to ensure that the 

district and ARB can fully enforce the contract terms during the life of the 

Carl Moyer Program-funded project. 

Contract Term = Project Completion + Project Implementation/Life 
II-29 PROGRAM ADMINISTRATION 

1. Project Completion 

The project completion time frame is the first part of the contract term. Project 

completion is the time frame starting with the date of execution of the contract to when 

the project is complete i.e., becomes operational. This includes the time period when 

an engine or vehicle is ordered, delivered and installed. Districts may require periodic 

reporting during this time frame. The contract shall include a specified time frame in 

which project completion shall occur, so that the funds are expended within the two-year 

required timeframe. The contract shall also require that no work may begin on the 

project until the contract is fully executed. 

2. Project Implementation/Life 

The project implementation/life time frame is the second part of the contract term. The 

project implementation time frame equals the project life. Project life is the number of 

years that a Carl Moyer Program project obtains or is claimed to obtain surplus 

emission reductions while operating in California. Surplus emission reductions are 

reductions that are early or extra. That is, the reductions occur prior to a rule 

compliance date or the reductions exceed the requirements of a rule or regulation. 

The contract shall specify that the project implementation equals the period of time 

during which the owner is required to operate and maintain their 

Carl Moyer Program-funded engine/vehicle according to the terms of the contract. The 

contract shall specify that by executing the contract, the owner understands and agrees 

to operate the engine/vehicle according to the terms of the contract and to cooperate 

with the district and ARB in implementation, monitoring, enforcement, and other efforts 

to assure the emissions benefits are real, quantifiable, surplus, and enforceable. The 

minimum project implementation time frame shall be three years, unless otherwise 

approved in advance by the ARB. The maximum project implementation/life is defined 

in the following chapters under each specific source category. A local air district must 

inform ARB if the district imposes additional restrictions on the project life for any source 

category. The project implementation time frame includes the district monitoring and 

ARB auditing phases which may run concurrently or sequentially: 

• During all or a part of the project implementation term, the district is responsible for 

monitoring the project to assure the project is operational and emissions reductions 

are realized. The contract shall require the owner to report at least annually to the 

district on the operation of the vehicles or equipment during this district monitoring 

phase. The contract shall inform the owner that noncompliance with the reporting 

requirements shall require on-site monitoring. The district monitoring phase shall 

match the project life when the project life is less than five years. When the project 

life is more than five years, the district monitoring phase shall be for a minimum of 

five years. 
II-30 PROGRAM ADMINISTRATION 

• While the district remains responsible for the enforcement of the contract, the district 

shall also include language in the contract that clearly states the owner understands 

and agrees that the ARB has the authority and reserves the right to monitor and 

enforce the terms of the contract at any time during the project life to ensure 

emission reductions are obtained for a minimum of 75 percent operation within 

California or as specified in the contract for marine projects, including the period 

between 5 years and the end of the project life for those projects with project lives 

that are more than 5 years. The contract shall also inform the owner that ARB will 

seek whatever legal, equitable, and other remedies are available under State law for 

the owner’s failure to comply with the Carl Moyer Program requirements and failure 

to fully perform under the contract. 

The contract term may also outline other timing requirements. For example, districts 

may include a requirement that the owner sign and return the contract by a certain date 

or the Board’s obligation of funds to the project is nullified. 

C. Payment 

In order to ensure that the district and ARB are paying only for the incremental cost of 

eligible items, paying only once for each engine, and the equipment being paid for is 

operating, all contracts must include the following payment terms. 

1. Maximum Contract Amount 

The maximum contract amount (which is the incremental cost, partial incremental cost, 

or funding cap), must meet the required minimum cost-effectiveness limit. The 

maximum contract amount may never exceed the incremental cost. If a district desires 

to have their maximum contract amounts in round numbers, the district is only allowed 

to round down. 

2. Itemized Invoices 

Payment terms must require itemized invoices from the engine supplier for repowers or 

paid invoices from the vehicle owner for new vehicles and satisfactory post-inspection 

by the district prior to payment of the owner’s invoice. Partial payments may be made 

only if the payment process and requirements have been reviewed and approved by the 

district. Payments shall be made directly to the project applicant only if the invoice has 

been paid and the payment is a reimbursement. Payments may be made to the engine 

dealer or distributor only if such payment arrangements are specified in the contract. 

3. Disclosure of Funds 

The owner (or owner’s designee) must initial/sign a disclosure statement. The 

disclosure statement certifies that once the owner (or the owner's designee) signs this 

contract for this project, the owner (or designee) shall not submit another application or 

sign another contract for the same specific engine(s) with any other source of funds, 
II-31 PROGRAM ADMINISTRATION 

including but not limited to, other districts or to ARB for a multi-district solicitation. Any 

owner or owner’s designee who is found to have submitted multiple applications or 

signed multiple contracts for the same engine(s) shall, at a minimum, be disqualified 

from funding for that engine(s) from all sources and may also be banned from 

submitting future applications to any and all Carl Moyer Program solicitations. In 

addition, as a violation of law, including but not limited to the Business and Professional 

Code, ARB and the districts may levee fines and/or seek criminal charges. 

4. Non-Compliance Terms 

Districts shall include terms to cancel contracts or withhold payment for non-compliance 

with or not meeting the obligations of the contract, and may include a term that cancels 

the contract if it is not executed by the owner in a timely manner. 

D. Carl Moyer Program Criteria 

All contracts shall include basic Carl Moyer Program Guidelines. Contracts must 

contain either a general statement of compliance with all Carl Moyer Program 

Guidelines and/or outline those requirements, as follows: 

• The project shall not be required by any local, state and/or federal rule, regulation or 

MOU currently in effect. 

• The low emissions technology must be certified or verified (as outlined in the 

following source category chapters) and meet the current NOx, PM and/or ROG 

requirements. If the low emissions technology is not certified or verified it may be 

approved based on an ARB case-by-case evaluation. When approved by an ARB 

case-by-case evaluation, the method for emissions verification must be included as 

part of the contract. 

• Rights to the emission reductions must not be claimed by any participant as 

emission reduction credits or in an averaging, banking, and trading program. 

• The new engine/equipment/vehicle must not have been purchased prior to the 

effective date of the contract or the date of the governing board’s approval, if 

applicable, whichever occurs first. The purpose of this requirement is to avoid 

funding of engines purchased prior to implementation of the contract, which would 

violate the Carl Moyer Program statutory provisions. 

• The existing (old) engine must be destroyed and rendered useless. Destruction 

methods for the vehicle in the fleet modernization category and for the vehicle and 

engine in the light duty category are further described in those chapters. Engines 

must have a complete and fully visible and legible engine serial number in order to 

be eligible for an engine repower. The destruction of the engine must be 

documented by the district seeing the destroyed engine or the receipt from the 

qualified vehicle salvage yard (see Part II, Chapter 2: Fleet Modernization, Salvage 
II-32 PROGRAM ADMINISTRATION 

Requirements for definition). Engines without a visible and legible serial number 

may be repowered if district staff stamp the engine block with the 

Carl Moyer Program project number and district staff is present to personally verify 

engine removal from the project vehicle or equipment and the subsequent engine 

destruction. ARB will consider alternatives to stamping the engine block on a 

district-by-district basis. 

• The new engine/vehicle/equipment must remain in service for the project life; 

operate in California as per the source category requirements specified in the 

following chapters; and, operate a specified amount. The district may specify 

minimum operating requirements within air district or air basin boundaries. 

E. Maintenance of the Engine/Vehicle 

All contracts shall require the owner to maintain the engine/vehicle according to the 

manufacturer’s specifications for the life of the project. This includes a requirement for 

no tampering. The owner is also responsible for maintaining a working hour meter, or 

other approved usage measuring device, for projects that document hours of operation 

as a means of calculating emissions reductions and cost-effectiveness. If the hour 

meter/usage device fails, the owner remains responsible for validating any hours not 

recorded by the hour meter/usage device. The owner must either repair or replace the 

non-operating meter/device or provide other documentation of equipment operating 

hours acceptable to the district. 

F. Project Specifications and Performance Expectations 

All contracts shall include detailed information on the baseline engine. This detailed 

information shall include at a minimum, the make, model, model year, horsepower and 

serial number of the baseline engine. All contracts shall also include the same detailed 

information on the new engine. This requirement may be met by including the project 

application as an attachment to the contract. An engine, which meets or exceeds the 

certification of the proposed engine, may be substituted with prior approval of the 

district. All contracts shall specify the amount the engine is to operate based on hours, 

miles or fuel usage within California (or the district) each year. Due to fluctuations in 

weather and other unforeseen circumstances, districts may average multiple years’ 

usage to determine annual usage. 

G. Repercussions for Nonperformance 

The contract must outline the repercussions to the owner for nonperformance and for 

not meeting any of the obligations of the contract. The contract must also inform the 

owner that ARB and the district have the authority to fine the owner or seek other 

remedies available under the law for noncompliance with Carl Moyer Program 

requirements and nonperformance with the contract. Districts may consider unforeseen 

circumstances beyond the owners’ control in determining repercussions for 

nonperformance. 
II-33 PROGRAM ADMINISTRATION 

H. On-Site Inspections 

All contracts shall include language that allows the district, ARB or their designee(s) to 

inspect the engine(s) and/or records relating to the engine during the term of the 

contract. 

I. Auditing 

All contracts shall include language that allows for fiscal auditing by the district, ARB or 

a third party designee during the life of the project. 

J. Records and Records Retention 

All contracts shall include language requiring the owner to maintain records and retain 

the records for at least three years after the term of the contract. 

K. Reporting 

All contracts must include a provision for owners to submit, at a minimum, annual 

reports commencing one year after project completion and annually thereafter for the 

district monitoring and auditing phase of the contract. The district shall include the 

dates the annual report is due. The owner shall also submit a copy of evidence of the 

appropriate insurance. If the district monitoring phase of the contract term exceeds five 

years, the owner’s reporting responsibility may be reduced to once every other year 

after the initial five years of reporting. If the project is a zero-emission technology, 

reporting may be reduced to biennially for the first six years, and no annual reports are 

required thereafter. 

L. Insurance 

All contracts shall require owners to carry and (as required by annual reports or 

requested during monitoring and auditing) provide proof of insurance covering the new 

engines throughout the term of the agreement. A district may require more or additional 

insurance. 

M. Notices 

All contracts shall include contact information for both parties to the contract, and how to 

send and receive notices. 

N. Signature Blocks 

All contracts must include signature blocks with an area for the dates that the contract is 

signed. 
II-34 PROGRAM ADMINISTRATION 

O. Optional Contract Terms

All districts have the option to include other terms and conditions in their agreements. 

Below, are contract terms that are used by some districts. Even though they are not 

required, all districts have the option of including the following additional contract terms: 

1. Severability 

If any part of agreement is found invalid by a court of law, the severability contract term 

maintains the enforceability of the remainder of the contract. 

2. Tax Implications and Information 

Each district should consult with its tax attorney regarding potential tax implications for 

the owners and what, if any, actions the district will take as a result of the attorney’s 

assessment. 

3. Non-Allocation of Funds 

If funds are not available from ARB, this contract term provides the district the ability to 

cancel the contract 

4. Decals 

Districts may want to add a contract term to require a decal to be affixed on the new 

engine. This is one method for outreach. 

5. Electronic Monitoring Unit 

Some categories (marine, locomotive and fleet modernization) require the installation of 

an Electronic Monitoring Unit (EMU). Contracts for those categories must include a 

contract term for EMUs. Districts may require the installation of an EMU with each new 

engine for other categories as well. The EMU is a Carl Moyer Program eligible expense 

and may be added to the incentive amount as long as the project still meets the 

cost-effectiveness cap. Districts may allow projects with EMUs to complete all reporting 

through the electronic data system. 

6. Incorporate the Application 

In order to assure the baseline engine in the application is the one being replaced, 

districts may want to incorporate the application by reference. 
II-35 PROGRAM ADMINISTRATION 

IX. Districts’ Monitoring Requirements 

A. Pre-Inspection 

Once an application is deemed eligible and before contract execution, a pre-inspection 

shall be completed by the district. The one exception is for public agencies (e.g. public 

works departments, transit organizations, and school districts). Districts may choose to 

allow public agencies to provide documentation of the engine and its use. 

The pre-inspection shall, at a minimum, include collecting the serial number of the 

baseline engine and verifying the information in the application about the baseline 

engine (make, model, model year, horsepower). The pre-inspection shall also verify the 

engine is operational (with a start up) and that the engine is working as described in the 

application (document function and use). A photo shall be taken for the file. The photo 

must include the applicant’s name, the date and the serial number of the engine. 

A pre-monitoring form shall be used to document the pre-inspection. The required 

elements for a pre-inspection form include all of the following: 

• Owner’s name, address and telephone number. 

• Location of the engine. 

• Verification of the baseline engine information (make, model, model year, 

horsepower, and serial number) as described in the application. 

• Space for the inspector to record whether the engine is in running condition, make 

comments, and attach pictures. 

A hard copy of the completed pre-inspection form shall be maintained in the project file. 

Districts may utilize paraprofessional staff, with training, to complete pre-inspections. 

Districts may also complete the Carl Moyer Program pre-inspections in combination with 

permit inspections. 

B. Post-Inspection 

Post-inspections shall be completed on all projects funded under the 

Carl Moyer Program. The post-inspection shall occur after the district receives an 

invoice from the owner for an engine, but prior to the district paying for that engine (or 

making final payment for the engine). For public fleets, such as transit organizations, 

where more than 20 of the vehicles in the fleet are included in the project, the district 

may choose to inspect a random sample of the vehicles included in the project. The 

sample size must be statistically significant. 

The district’s post-inspection must verify that the engine listed in the contract was 

installed. The inspector shall record the information from the plate (serial number, 
II-36 PROGRAM ADMINISTRATION 

make, model, model year, and horsepower) on the inspection form and verify it with the 

information listed in the contract. The engine must be operational in the equipment or 

vehicle as stated in the contract. The inspector must visually witness all engines start 

up and mobile projects run. The vehicle or engine information must be documented 

with pictures. 

Where applicable, the post-inspection shall also verify that the baseline engine or 

vehicle is destroyed and rendered useless. Depending on the method of destruction 

selected, the inspector must see the destroyed engine, witness the engine destruction, 

and take photos of the destroyed engine. The photos shall include the name of the 

owner and date of the inspection. For engines with a complete, fully visible and legible 

engine serial number, the district must see the destroyed engine or the receipt from the 

qualified vehicle salvage yard. For engines without a complete, visible, and legible 

serial numbers, the district staff must stamp the engine block with the Carl Moyer 

Program project number and be present to personally verify engine removal from the 

project vehicle or equipment and the subsequent engine destruction. ARB will consider 

alternatives to stamping the engine block on a district-by-district basis. The district must 

follow all additional requirements for the methods of destruction for fleet modernization 

and light-duty categories as further described in those chapters. 

A post-inspection form shall be used to document the post-inspection. The required 

elements for a post inspection form include all of the following: 

• Owner’s name, address and telephone. 

• Location of the engine. 

• Baseline engine information (make, model, model year, horsepower, and serial 

number) as written in the application and/or contract. 

• Space for the inspector to record whether the engine was scrapped or destroyed. 

• New engine information (make, model, model year, horsepower, and serial number). 

• Space for the inspector to record whether the engine is in running condition and 

make comments. 

Photos shall be maintained with the hard copy file or electronically and made available 

upon ARB request. The completed form shall be maintained in the project file. Final 

payment shall only be made to an owner once a satisfactory post-inspection has been 

completed. 

C. Annual Reports

Districts shall require all owners to submit annual reports commencing one year after 

project completion and annually thereafter for the term of the contract. The annual 
II-37 PROGRAM ADMINISTRATION 

report shall be in a format prescribed by the district and shall contain all of the following 

information: 

• Owner’s name, address, and telephone number. 

• Location of the engine. 

• Engine information (make, model, model year, horsepower, and serial number). 

• Condition of the engine, including current working condition and any major 

maintenance of the engine that significantly affected the annual usage of the engine. 

• Any conditions (e.g. weather, permits) that significantly affected the annual usage of 

the engine. 

• Readings of the usage meter (hour meter, odometer, EMU, etc.). 

• A copy of evidence of the appropriate insurance. 

The districts shall review the annual report for completeness, accuracy, and usage. 

A hard copy of the annual report and a written record of the district’s analysis of the 

annual report shall be maintained in the project file. If the project performed 30 percent 

above or below the usage specified in the contract, the district shall flag the project. 

Any project that has been flagged for performance shall be evaluated over a multiyear 

basis. If the project’s usage does not average out to within 30 percent of the usage 

specified in the contract over at least a 3 year period, the district shall take appropriate 

action to ensure the contracted emissions reductions are realized. Appropriate actions 

include, but are not limited to, recapturing funds from the project in proportion to the loss 

in emissions reductions. 

There are a few situations whereby the district may reduce annual reporting 

requirements. If the district’s monitoring phase of the contract term exceeds five years, 

the owner’s reporting responsibility may be reduced to once every other year after an 

initial five years of satisfactory reporting. If the project involves a zero-emission 

technology, reporting may be reduced to biennially for the first six years and no annual 

reports are required thereafter. If the project has an EMU, the annual report may be 

collected through the electronic data system. 

If an annual report is incomplete, inaccurate or not received from an owner on schedule 

the district shall make a reasonable attempt to obtain the complete and accurate report 

from the owner. If the district is unable to obtain the report, all of the engines in that 

project shall be audited by the district. Owners with outstanding reports shall not be 

granted any additional Carl Moyer Program funds until all reports are satisfactorily 

submitted. Districts may bar an owner from applying for any additional 

Carl Moyer Program funds, if that owner has a history of not submitting satisfactory 

annual reports. 
II-38 PROGRAM ADMINISTRATION 

D. Audits 

Districts shall audit at least ten percent (or a statistically significant number) of the 

projects that have more than a three-year project life and are within two years of 

contract expiration. In addition, district audits shall include all of the projects whose 

owners fail to report annually. The audit shall be completed by district staff and shall 

include verification that the engines paid for are still operational in the same equipment 

and meet the mileage, fuel usage, or hours of operation indicated on the executed 

contract. This shall be completed by checking the serial number of the engine; 

witnessing the engine operate; and checking the odometer, hour meter/usage device, 

fuel receipts, or EMU. 

Districts shall also randomly audit at least five percent (or a statistically significant 

number) of the projects at the end of the contract term. Districts shall also include those 

projects whose owners failed to report annually and those projects that were found to be 

below the level of use during the audit two years prior to the end of the contract. The 

audit shall be completed by district staff and shall, at a minimum, include verifying that 

the engines paid for are still operational in the same equipment and meet the mileage, 

fuel usage, or hours of operation indicated on the executed contract. This shall be 

completed by checking the serial number of the engine; witnessing the engine operate; 

and checking the odometer, hour meter/usage device, fuel receipts, or EMU. 

If the project is more than 30 percent below or above an annual average of the level of 

use outlined in the contract, the district shall take appropriate action to ensure the 

emissions benefits are realized and captured during the term of the contract. In 

addition, the district shall audit all of the other engines owned by the same participant 

and included in the same Carl Moyer Program funded project. 

X. Expenditure Requirements 

The final payment for a project shall only be made after a post-inspection is 

satisfactorily completed (see post-inspection section above) and all invoices have been 

received and approved. The district shall review the itemized receipts and only pay for 

eligible expenses. Eligible expenses are limited to those mechanical items that are 

necessary to complete the installation of the new engine or retrofit. At the discretion of 

the district the labor and sales tax directly associated with that installation may be 

included. The district shall maintain copies of all invoices and documentation of 

payment in the project file. For all on-road projects, if a compliance check was not 

previously completed, the district shall verify with its ARB district liaison that there are 

no outstanding violations prior to payment. 

Districts may make progress payments to owners provided the progress payments are 

based on a predetermined schedule that is set forth in the contract between the district 

and the owner. Those progress payments shall only be made after the owner provides 

the district with sufficient evidence of completing predetermined milestones (e.g. 
II-39 PROGRAM ADMINISTRATION 

delivery of an engine). The district must maintain a clear record of progress payments 

in the file and in the administration/fiscal unit of the district. Progress payments include 

final payments that are withheld until all reporting requirements are met, also known as 

withhold payments. For purposes of ascertaining the percentage of funds expended to 

qualify for disbursement requests, districts that demonstrate the maintenance of 

withhold payments as a part of contracts with owners, may count the value of the 

withheld payment as expended once all other invoices for the project are paid. 

XI. ARB's Oversight 

The ARB’s oversight responsibilities for the Carl Moyer Program are multifaceted. The 

ARB must ensure that the emission reductions claimed by the Carl Moyer Program are 

real, surplus, enforceable, and quantifiable. The ARB is responsible for ensuring the 

funds are expended on projects that meet and follow the Health and Safety Code and 

Carl Moyer Program Guidelines. The ARB is also responsible for reviewing districts’ 

progress obligating and expending statewide funds, ultimately determining, when 

necessary, the need to reallocate funds within a funding cycle. The ARB may contract 

with an independent third party to ensure the structure of the Carl Moyer Program 

ensures the integrity of the program. The ARB staff shall report to the Board annually 

on the progress of the Carl Moyer Program. In carrying out these responsibilities, ARB 

maintains a close working relationship with the districts. 

A. Monitoring and Auditing of District Programs 

Monitoring is an ongoing process that is designed to provide training and technical 

assistance, as well as oversight, to the districts. Throughout the implementation of the 

Carl Moyer Program, ARB completes desk reviews of district programs, on-site 

monitoring, and audits. Desk reviews include reviewing project data to ensure 

emissions reductions and cost-effectiveness meet Carl Moyer Program Guidelines, and 

are real, surplus, enforceable, and quantifiable. At a minimum, the project data review 

shall occur when a district obligates funds on June 30 one year after the award of funds, 

and on June 30 two years after the award of funds. During the project data review, any 

Carl Moyer Program funds expended on a project or portion of a project that ARB finds, 

through its monitoring and auditing of districts, to not be eligible shall be documented as 

a finding in the district’s audit. The ARB will work closely with the district to determine 

the appropriate action necessary to rectify the incorrect project selection. If the 

correction is not made by the district, the district will be deemed “at risk.” 

The ARB also reviews all districts’ Carl Moyer Program policy and procedures manuals 

to ensure they are consistent with Carl Moyer Program rules, guidelines, and advisories. 

This review shall be completed at the time of the initial report, and when determined 

necessary by ARB. 

The ARB shall complete on-site monitoring on at least 5 percent of district projects, that 

were funded in the last completed funding cycle, for at least 4 districts per year. Due to 

statistical significance in random sampling, ARB may monitor up to 100 percent of the 
II-40 PROGRAM ADMINISTRATION 

projects of a district if the district funds 20 or less projects per year. During the on-site 

monitoring, ARB shall review and verify that project data, emission reductions and 

cost-effectiveness meet Carl Moyer Program Guidelines and advisories, and all 

emission reductions are real, quantifiable, and surplus. The ARB’s on-site monitoring 

includes randomly selecting a sample of at least 5 percent of the projects funded in one 

funding cycle, completing an on-site file review, and project field review for each 

sampled project. The on-site monitoring also includes reviewing the implementation of 

the district’s local program for consistency with Carl Moyer Program Guidelines, 

advisories, and the district’s policies and procedures manual. This includes reviewing 

administrative (i.e. fiscal) controls. 

Auditing is a periodic formal process designed to assess each district’s implementation 

of the Carl Moyer Program and that its implementation is consistent with all applicable 

rules, regulations, and guidelines, including the district’s own policies and procedures 

manual. Audits may be fiscal, programmatic, or both. A district may be audited with or 

without a previous monitoring or auditing. For example, the State Bureau of Audits may 

audit a district whether or not ARB has previously monitored or audited the same 

district. An audit may include all components of both desk and on-site reviews. The 

ARB may include an audit of the Carl Moyer Program with any other scheduled ARB 

audit of a district. The ARB may also designate a third party auditor to perform the 

audit. 

At the conclusion of monitoring and/or auditing, ARB shall provide the district with a 

written report. This written review shall include, if applicable, any deficiencies in the 

district’s program that require correction. The district will have 30 calendar days, from 

the date of the written report, to correct the deficiencies and respond in writing to the 

report. The ARB staff will provide the district with the opportunity for training and 

technical assistance to develop and implement a corrective action plan. If ARB 

determines the district has not taken adequate corrective action within the allotted 

30 days, the district will be deemed “at-risk”; the district shall not be eligible to apply for 

future funding; and ARB shall hold at least one public meeting to consider public 

comments prior to recapturing all Carl Moyer Program funds that have not been 

obligated by the district. When recapturing project funds, ARB may also recapture 

administrative funds associated with the project funds. The ARB shall reallocate those 

funds to districts that are eligible to receive additional funds based on applications for 

the same fiscal year. 

B. ARB Administrative Action 

The administrative actions described in this section are the procedures ARB shall follow 

to recapture funds. The HSC section 44287(k), requires any funds not expended by a 

district by June 30 of the second calendar year following the date of the reservation, to 

revert back to the ARB as of that June 30. Those funds shall be recaptured and 

reallocated to another district or districts based on applications for the same fiscal year. 

The HSC section 44287(k) also requires that any district whose allocation has been 
II-41 PROGRAM ADMINISTRATION 

recaptured remain eligible to reserve funds for local administration of the 

Carl Moyer Program. 

1. “At-Risk” Districts

Any and all districts that have not provided an annual report documenting the obligation 

of all of their funding by June 30 of the year following their award are defined as an 

“at-risk” district. Any district that has been identified as “at-risk” by ARB will receive a 

letter from ARB by July 30 of the year following the district’s award (or as soon 

thereafter as practically possible) stating the reason the district has been identified as 

“at-risk.” The ARB notification letter will also require the district to develop and submit 

an acceptable remedial plan within 30 calendar days from the date the district receives 

notification (sent certified mail) from ARB. 

2. Submittal of a Remedial Plan 

The remedial plan shall include all of the following: 

• An outline of milestones the district will follow to fully obligate the remainder of their 

allocation by December 30. 

• An outline of milestones to completely expend the funds by the second June 30 

following their award. 

• An annual report documenting the amount of match and Carl Moyer Program funds 

the district has obligated to date. 

Upon receipt of the remedial plan, ARB will review and approve or disapprove the plan 

as acceptable. If a district does not submit an acceptable plan within 30 calendar days, 

the ARB shall begin administrative action to recapture the funds from that district. 

When recapturing project funds, ARB may also recapture administrative funds 

associated with the project funds. The ARB will reallocate those funds to districts that 

are eligible to receive additional funds based on applications for the same fiscal year. 

3. ARB Assistance to Meet Acceptable Remedial Plan 

Once an acceptable remedial action plan is submitted by an “at-risk” district, ARB will 

provide the district with technical assistance to and monitor the district’s progress in 

meeting the milestones in the remedial plan. This will require the “at-risk” district to 

update and submit reports on progress in meeting their milestones as required by ARB. 

If the “at-risk” district falls 30 or more days behind its remedial plan, ARB will take 

administrative action to recapture the remaining unobligated Carl Moyer Program funds 

from that district. Those funds will be reallocated to districts that are eligible to receive 

additional funds based on applications for the same fiscal year. 
II-42 PROGRAM ADMINISTRATION 

4. Obligation and Expenditure of Match Funds 

If a district has obligated funds from an allocation, and any of the allocation has been 

recaptured by the ARB, the district remains responsible for obligating and expending all 

of the required match for the obligated amount of the allocation. No further 

disbursements from any allocation will be made to a district that has an outstanding 

match requirement from any previous allocation. 

C. ARB Allocation of Recaptured District Funds 

When ARB recaptures funds in any fiscal year, ARB will only consider the districts that 

have applied for and have sufficient match to accept additional funding for the same 

year and type of (district or multi-district) allocation. The ARB will not consider any 

districts that are “at-risk” at the time of this allocation. The ARB is not able to reallocate 

funds to any district receiving the minimum award of $200,000 unless that district is able 

to provide match funds for the minimum award of $200,000 plus any additional funds 

applied for. 

Once ARB has a list of districts with sufficient match and that are not “at-risk,” ARB will 

use the following steps to allocate the recaptured funds to the district(s) that are eligible 

to receive an additional award. 

• The ARB will first try to allocate funds to districts that are located in the same air 

basin as the district from which the funds have been recaptured. 

• If there are no districts in the air basin that have sufficient match and are in good 

standing, then ARB will allocate the funds to districts that have projects that travel 

through the same air basin as the district from which the funds were recaptured. 

• If there are no districts that have projects that travel through the same air basin, ARB 

will allocate the recaptured funds to the districts that have already obligated all of 

their allocation of that same FY funds; and, are the first, or among the first, to 

propose a Carl Moyer Program eligible and viable project, which will be completed 

(funds obligated and expended) within two years of the original allocation of the 

reallocated funds. 

The new allocated funds must be spent in the same category (district or multi-district) 

from which they came. These funds may or may not include the administration funds 

originally associated with them. 

D. Report to the Board 

The Carl Moyer Program staff shall report to the Board annually on the progress in 

implementing the Carl Moyer Program. This report will provide the general public with 
II-43 PROGRAM ADMINISTRATION 

another opportunity to be advised of the results of the program. This report shall 

include the following topic areas: 

• Total applications received for current year’s funds. 

• Efforts and results of outreach to potential environmental justice, zero-emission 

projects, and small business project owners. 

• The status of the obligation and expenditure of the current year’s funds statewide 

and by district. 

• The status of the obligation and expenditure of previous years’ funds statewide and 

by district. 

• District and ARB monitoring and auditing efforts and results, including any audits 

completed by independent third parties. 

• The status of emissions reductions by projects in the implementation phase of their 

contracts, including reasons for and solutions to shortfalls for projects that do not 

perform as projected. 

• Outstanding features and accomplishments of the districts and ARB. 

• Challenges for the districts and ARB in implementing the Carl Moyer Program. 

The ARB encourages the districts to report to their governing boards in a similar 

fashion. 

XII. References

ARB, 1998. Air Resources Board. ARB 1998 Criteria and Guidelines for the Use of 

Motor Vehicle Registration Fees. 

http://www.arb.ca.gov/planning/tsaq/mvrfp/criteria/criteria.htm 

ARB, 2002. Air Resources Board and Office of Environmental Health Hazard 

Assessment. Staff Report: Public Hearing to Consider Amendments to the Ambient Air 

Quality Standards for Particulate Matter and Sulfates. 

ftp://ftp.arb.ca.gov/carbis/regact/aaqspm/isor.pdf 

ARB, 2005. Air Resources Board. Staff Report: Review of California Ambient Air 

Quality Standards for Ozone. ftp://ftp.arb.ca.gov/carbis/regact/ozone05/isorv3.pdf 

Avol, E.L., et al. 2001. Respiratory effects of relocating to areas of differing air pollution 

levels. Am J Respir Crit Care Med, 164: 2067-2072. 
II-44 PROGRAM ADMINISTRATION 

Gauderman, W.J., et al. 2002. Association between air pollution and lung function 

growth in Southern California children: Results from a second cohort. Am J Resp Crit 

Care Med, 166(1): 74-84. 

McConnell, R., et al. 2002. Asthma in exercising children exposed to ozone: A cohort 

study. Lancet, 359: 386–391. 

Peters, A., D.W. Dockery, J.E. Muller, and M.A. Mittleman. 2001. Increased particulate 

air pollution and the triggering of myocardial infarction. Circulation; 103: 2810-2815.