Department of
Environmental Quality

Eligible mitigation actions are those that replace diesel emission sources with cleaner technology to reduce excess emissions of oxides of nitrogen (NO_X) caused by the violating vehicles. Money from the settlement may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel or alternative fueled or all-electric engines or vehicles within the following 10 categories:

• Class 8 local freight trucks and port drayage trucks
• Class 4-8 school buses, shuttle buses or transit buses
• Freight switcher locomotives
• Ferries and tugs
• Ocean going vessels shore power
• Class 4-7 local freight trucks
• Airport ground support equipment
• Forklifts and port cargo handling equipment
• Light duty zero emission vehicle supply equipment
• Matching funds for projects eligible under the Diesel Emission Reduction Act (DERA)

Appendix D-2 to Partial Consent Decree - Appendix D-2 Outlines how trust funds may be used for each of the 10 categories of eligible mitigation actions

Comparison of VW Eligible Mitigation Actions 1–9 and Eligible Mitigation Action 10 (DERA Option) - This EPA document compares the different eligibility requirements and funding levels for eligible mitigation actions 1–9 and the DERA option, number 10.

On January 24, 2016, the United States and the State of California filed a lawsuit against Volkswagen alleging it had manufactured diesel cars sold and operated in the US beginning in 2009 with systems intended to defeat emission tests. These systems allowed vehicles to emit nitrogen oxide (NOx) pollution at levels 40 times the amounts allowed under the Clean Air Act.

After a significant amount of investigation and negotiation, Volkswagen has agreed to settle these allegations. A settlement was reached on October 25, 2016, for the 2.0-liter diesel vehicles. On December 20, 2016, another settlement was reached regarding the 3.0-liter diesel vehicles.

The overall settlement consists of three major parts:

• Buyback, Lease Termination, Vehicle Modification, and Emissions Compliant Recall Program
• National Zero-Emission Vehicle (ZEV) Investment Plan
• Environmental Mitigation Trust

Under the Environmental Mitigation Trust, Volkswagen is required to fund an Environmental Mitigation Trust in the amount of $2.925 billion ($2.7 billion from the first 2.0-liter consent decree and $225 million from the second 3.0-liter consent decree) to be used to offset the air pollution emitted by the vehicles that violated the Clean Air Act. The fund is distributed among states, territories, and federally recognized tribes based on the proportion of affected Volkswagen diesel vehicles registered in each jurisdiction. The State of Idaho has the opportunity to receive $17.3 million from this mitigation trust.

On March 15, 2017, the court appointed Wilmington Trust Bank as the trustee to administer the environmental mitigation trust funds. On September 19, 2017, the U.S. District Court, Northern District of California issued a court order approving the Environmental Mitigation Trust (EMT) Agreement and ordered a final trust agreement be filed with the court. The final paperwork for the VW Settlement’s EMT was filed October 2, 2017, establishing the Trust Effective Date. On November 22, 2017, the State of Idaho submitted the Governor’s Beneficiary Request Certification form to the court and to the trust.

Legal Information

2.0 Liter Partial Consent Decree - On October 18, 2016, the US District Court for the Northern District of California held a hearing on the partial consent decree including amendments made in response to public comment. On October 25, 2016, the court granted the motion to enter into the amended partial consent decree. The approved partial consent decree consists of three major parts:

• Volkswagen will buy back, terminate leases, or provide approved emissions modifications for subject 2.0-liter TDI diesel vehicles.
• Volkswagen will invest $2 billion over 10 years in projects that increase the use of zero emission vehicles (ZEV).

• Appendix C: The ZEV Investment Commitment

• Volkswagen will pay $2.7 billion to an Environmental Mitigation Trust to fund projects to reduce emissions of NOx.

• Appendix D: Form of Environmental Mitigation Trust

3.0 Liter Partial Consent Decree - On December 20, 2016, a second partial consent decree addressing 3.0-liter subject vehicles was proposed. Notice of the second consent decree was published in the Federal Register on December 29, 2016, opening a 30-day comment period. On February 2, 2017, the comment period was extended to February 14, 2017; a Preliminary Approval of the 3.0-Liter Class Action Settlement was granted by the court on February 16, 2017. While the proposed partial consent decree is waiting to be finalized by the court, it consists of two major parts:

• Volkswagen will buy back, terminate leases, or provide approved emission modifications for subject 3.0-liter vehicles.
• Volkswagen will be required to pay an additional $225 million to the Environmental Mitigation Trust.

Third Partial Consent Decree - On January 11, 2017, a third partial consent decree was proposed to address Volkswagen’s liability under the Clean Air Act for civil penalties and injunctive relief to prevent similar future violations. Under the third partial settlement, Volkswagen will pay $1.45 billion civil penalty for alleged civil violations of the Clean Air Act. Notice of the third consent decree was published in the Federal Register on January 24, 2017, beginning a 30-day public comment period that closed on February 23, 2017. On April 13, 2017, the court granted the motion for entry of this third partial consent decree.

The Beneficiary Mitigation Plan summarizes how the state allocation of mitigation funds will be distributed among the various eligible mitigation actions to reduce NOx emissions. The plan will be developed through a public process, with multiple opportunities for public input.

On December 14, 2017, a public meeting was held to discuss the Preliminary Draft Beneficiary Mitigation Plan (BMP), a requirement of the Volkswagen Settlement Environmental Mitigation Trust Agreement, and to solicit public input. Revisions were made to the Preliminary Draft BMP based on the December 14, 2017, meeting discussion and review of written comments received. DEQ posted the Draft BMP on March 1, 2018, and accepted written comments through April 2, 2018. Revisions were made to the Draft BMP based on review of written comments received.

• DEQ’s Response to Comments Received on the Draft BMP

Written Public Comments

Preliminary Draft Beneficiary Mitigation Plan (BMP)

• DEQ’s Response to Comments Received on the Preliminary Draft BMP

Meeting Documents

• December 14, 2017 Meeting Sign-in Sheets
• VW Settlement Fund Public Meeting - DEQ PowerPoint Presentation (12/14/17)
• Detailed Comparison of VW Eligible Mitigation Action 1-9 and Eligible Mitigation Action #10 (DERA Option), EPA Office of Transportation and Air Quality (June 2017)
• Memorandum of Understanding Between Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming: Regional Electric Vehicle Plan for the West (10/4/17)

Written Public Comments on the Preliminary Draft BMP