1. Overview of Volkswagen settlement
Introductory Regional Meeting
Lori Clark
June 16, 2017

2. Background
Lawsuits Against Volkswagen Group 2.0 and 3.0 Liter Diesel Engine Vehicles
Found to Exceed the Environmental Protection Agency’s (EPA) Standard for Nitrogen Oxides (NOX) Emissions
Approximately 590,000 Vehicles Sold in the U.S.
Approximately 40,000 in Texas (National Renewable Energy Lab data) 2

3. Settlement Breakdown ($ in Billions)
Total Settlement: $14.7 Billion
Zero Emission Vehicle (ZEV) Investment - Managed by Electrify America
Environmental Mitigation Trust (EMT) - Distributed to States
Settlement Breakdown ($ in Billions)
Texas’ Share: $209 Million 3

4. ZEV Investment $1.2 Billion Commitment
Four 30-Month Cycles from Q to Q2 2019
Cycle 1 Areas of Focus:
Charging Infrastructure Installation – Approx. $250 Million
Long Distance Highway Network
Community Charging (Multifamily Homes, Workplaces, Commercial/Retail, Community, Municipal Lots/Garages)
Public Education Initiatives – Approx. $25 Million
ZEV Access Initiatives – Under Development
$25 Million Reserved for Electrify America Administrative Costs 4

5. Charging Infrastructure Installation – Cycle 1
ZEV Investment
Charging Infrastructure Installation – Cycle 1
Long Distance Highway Network
240 Highway Sites by Cycle End Focus on States with Higher Anticipated ZEV Average Annual Daily Traffic by 2020 High Correlation with FHWA EV Charging Corridors I-30 (5-9 Stations) I-20 (2-4 Stations) I-35 (5-9 Stations) Approx. 66 Miles Between Sites
Community Charging
Houston Included in Cycle 1 Funding 5

6. For Each Percentage Point Shortfall, Volkswagen Must Pay…
Mitigation trust
$2.7 Billion
Distributed to States Proportional to Violating Vehicles Sold
June 2019: Deadline to Remove 85% of Violating Vehicles Through Approved Emissions Modification or Recall
Consequence: Pay Additional Funds to the Mitigation Trust
For Each Percentage Point Shortfall, Volkswagen Must Pay…
2.0 Liter Vehicles
$85 Million
3.0 Liter Vehicles, Generation 1
$5.5 Million
3.0 Liter Vehicles, Generation 2
$900,000 6

7. Mitigation trust process
Trustee Selected
(Wilmington Trust, N.A. Appointed March 15, 2017)
Trust Agreement Finalized
(Trust Considered Effective)
Potential Government Beneficiaries Must File Certification Form to Become Beneficiary and Identify Lead Agency
(Up to 60 days from Trust Effective Date)
Trustee Files List of Designated Beneficiaries
(Up to 120 days from Trust Effective Date)
Beneficiaries Must Create Mitigation Plan
(Summary of How the Beneficiary Intends to Use Allotted Funds)
Mitigation Trust Administered by Trustee
(Trustee Required to Transmit Determination of Beneficiary’s Funding Request within 60 Days Upon Receipt) 7

8. Rtc action to date
March 10, 2016: Request to the Department of Justice (DOJ) and Texas Attorney General (AG), if a Financial Settlement is Reached, Funds be Dispersed to Texas Nonattainment Regions
March 9, 2017: Request to Governor Abbott and Texas AG to:
Pursue $209 Million Allocated to Texas as Part of the Mitigation Trust
Designate TCEQ as the Lead Agency
Allow Input from Regions and Other Interested Parties to Develop the Mitigation Plan
Determine Project Priorities and Distribute Funds through Regional Councils of Governments (or by TCEQ Directly if Region not Interested)
Allocate to Regions Based on Total Number Registered Vehicles 8

9. NCTCOG funding recommendation
Fair Share Funding Recommendation Based on Number of Affected Vehicles Per Region After Set-Aside of 10% for Other Interested Regions
Region
Funding (In Millions)
Alamo Area Council of Governments (AACOG)
$27.4
90%
Capital Area Council of Governments (CAPCOG)
$32.9
Houston-Galveston Area Council (H-GAC)
$58.9
Rio Grande Council of Governments (RGCOG)
$5.9
North Central Texas Council of Governments (NCTCOG)
$63.0
Other Regions
$20.9
10%
Total
$209
100%
Recommended COGs are within Transportation Management Areas, and Meet at Least One of the Following Criteria:
Are Within Recommended Nonattainment Regions (2015 NAAQS for Ozone)
Have Existing Vehicle Inspection/Maintenance Programs
Are Included In Texas Clear Lanes Initiative 9

10. Mitigation trust – proposed structure
Trustee for Environmental Mitigation Trust
(Wilmington Trust, N.A., Appointed March 15, 2017)
DRAFT
Beneficiary and Lead Agency Structure Defined by Trust; Governor Abbott’s plans still unknown
Beneficiary
(State of Texas Eligible)
Lead Agency
(TCEQ?)
TCAWG, AACOG, CAPCOG, and NCTCOG Proposal; whether will be accepted is unknown…
AACOG
CAPCOG
H-GAC
NCTCOG
RGCOG
Other
COGs
…under TCAWG et. al proposal, each regional council would administer funding.
Regardless, each council could be a point of contact within their regions to provide technical support, identify priority areas of focus, opportunities suitable for statewide coordination, etc.
TCAWG = Texas Clean Air Working Group 10

11. Eligible NOX mitigation actions
Eligible Mitigation Actions 1-9
1. Freight and Port Drayage Trucks (Class 8)
2. School, Shuttle, & Transit Buses (Class 4-8)
3. Freight Switchers
4. Ferries/Tugs
5. Ocean Going Vessels (OGV) Shorepower
6. Freight Trucks (Class 4-7)
7. Airport Ground Support Equipment
8. Forklifts and Port Cargo Handling Equipment
9. Light-Duty Zero Emission Vehicle Supply Equipment
Eligible Mitigation Action 10
10. Diesel Emission Reduction Act (DERA) Option 11

12. VW Opportunity Interest Survey
North Central Texas Council of Governments (NCTCOG), in collaboration with Clean Cities and Councils of Government across the state developed a survey:
Purpose: Gather Information On Fleet Interest In Anticipation In The Event Texas Does File As A Beneficiary
Reasoning: Information Will Guide Feedback During Development Of The State Mitigation Plan
What Do You Want to Do? 12

13. Questions and discussion13

14. Learn more Volkswagen Workshop:
Monday, June 26, 10 am – 4 Austin Convention Center
Register:
Select “Expo Floor Only”, Enter Discount Code 17AUSTX
Donna Tiemann at to Confirm 14

15. Senior Program Manager
FOR MORE INFORMATION
Chris Klaus
Senior Program Manager
Lori Clark
Program Manager 15