1. four areas of qualified investments: ZEV infrastructure, public awareness, increasing ZEV access, and green city projects;

2. ARB’s draft guiding principles and recommended priorities for the first ZEV Investment Plan; and

3. the process and timeline associated with development, review, and approval of the first investment plan.

After that discussion, members of the public will be invited to provide comments related to the ZEV Investment. These comments will inform ARB’s development of a guidance document communicating California’s priorities and guiding principles for ZEV investments to VW to aid them in drafting their ZEV Investment Plan.

Background. On 25 October 2016, the United States District Court for the Northern district of California approved a proposed Partial Consent Decree (Consent Decree) between ARB, VW and the United States Department of Justice. The Consent Decree partially resolves Clean Air Act and California State claims against VW for equipping its 2.0L diesel vehicles with defeat devices. This consent Decree fully mitigates the 2.0L diesel cars on the road and the environmental harm from the violations.

There are four elements of the Consent Decree. Each element is described in a separate appendix.

Appendix A (the Buyback, Lease Termination, and Vehicle Modification Recall Program) and Appendix B (the Vehicle Recall and Emissions Modification Program) describe the procedures that VW will use to offer its affected consumers the option of either: (1) a buyback or lease termination, or (2) the option of an emissions modification in accordance with the technical specifications prescribed in Appendix B. The Consent Decree also allows consumers to choose to do nothing.

Appendix D (the Environmental Mitigation Trust) is intended to mitigate fully all past and future excess NO_x emissions from the subject vehicles. Under the terms of the Consent Decree, VW must pay about $381 million into a mitigation trust over a three-year period for projects to replace older and dirtier heavy-duty diesel vehicles and equipment in California with cleaner vehicles and equipment, including advanced zero- or near-zero-emission technologies.

Governor Brown will designate a lead agency to develop, administer, and implement a Beneficiary Mitigation Plan. The Beneficiary Mitigation Plan, which will be developed with public input, will describe the eligible mitigation actions from the list specified in the Consent Decree that will be funded from the trust.

Appendix C requires VW to invest $800 million in California over a 10-year period to support the increased use and availability of ZEVs—the topic of the workshop. VW will implement these investments in four $200 million 30-month cycles. Appendix C outlines four areas of qualified investments:

• ZEV infrastructure (including the development and maintenance of ZEV charging stations). Guiding principles for infrastructure could include investments that result in charging infrastructure that is complementary and additional to existing infrastructure investments, are inclusive of locations serving disadvantaged and under-served communities, are transformative (either through concentration in a small number of communities, or because of its use of innovative technology) and that are inclusive of all ZEV types.

• Public Awareness. Guiding principles for public awareness could include investments that are sustained, clear and effective with mixed media implementation and experiential elements like ride and drives. It is strongly recommended that VW work with existing multi-stakeholder efforts to implement public awareness campaigns to consolidate and leverage efforts.

• Increasing ZEV Access. Guiding principles for ZEV Access could include Appendix C investments that accomplish the goal of broadening access to ZEVs, including making them available to disadvantaged and disproportionally impacted communities, lower income groups, and those with limited access to personal transportation. Increased access can be accomplished through the use of community based car- and ride-share programs, vehicle scrap and ZEV replacement programs, and zero emission transit.

• Green City. Guiding principles for Green City projects could include investments that achieve a broad transformation of the transportation elements within a given city using car share, zero emission transit, zero emission freight, and other innovative strategies within a concentrated area.

Efforts in these four areas combined are intended to address the adverse environmental impacts arising from the use of vehicles that consumers believed were lower-emitting vehicles. While ARB is developing initial guiding principles, some of which are outlined in the four areas of qualified expenditures above, the Consent Decree stipulates that VW has final say over its proposal for spending Appendix C funding, as long as it complies with the terms of the Consent Decree.