VW Settlement - Nevada Mitigation Fund

Volkswagen Consent Decree and Partial Settlement

A Partial Settlement and Consent Decree has been finalized between the U.S. Justice Department, the Volkswagen (VW) Corporation and its subsidiaries regarding the installation and use of emission testing defeat devices in over 500,000 turbocharged direct injection (“TDI”) 2.0 liter diesel engine vehicles sold and operated in the U.S. beginning in 2009. In addition to other requirements, the Consent Decree requires VW to invest $2.7 billion into an Environmental Mitigation Trust to fund projects intended to offset the excess emissions of nitrous oxides (NOx) caused by the subject vehicles and in general reduce NOx emissions in areas more affected by this pollutant.

Additionally, on December 20, 2016 an agreement was reached in regards to a second partial settlement and consent decree between the U.S. Justice Department, the Volkswagen (VW) Corporation and its subsidiaries regarding the installation and use of emission testing defeat devices in 3.0 liter vehicles sold and operated in the U.S. beginning in 2009. Under the 3.0 liter partial settlement, Volkswagen must contribute an additional $225 million in funding to the Mitigation Trust Fund.

Nevada expects to receive $24.8 million from the Environmental Mitigation Trust between 2017 and 2027 ($22.25 million from the 2.0 liter consent decree and $2.6 million from the 3.0 liter consent decree). The Nevada Division of Environmental Protection (NDEP) was selected to be the lead agency on behalf of the State responsible for applying to become a beneficiary of the Mitigation Fund. NDEP must develop a Beneficiary Mitigation Plan that specifies how these funds will be distributed to eligible projects in order to achieve the maximum air quality benefits for the people of Nevada. NDEP must also develop the administrative structure and fiscal elements of the state-wide grant program we are calling the Nevada VW Fund.

The Nevada Advisory Committee on the Control of Emissions from Motor Vehicles (also known as the I/M Committee) will serve as an advisory committee in establishing program goals & objectives that meet air quality needs, consider public input, and are acceptable to the court-appointed trustee for the fund. The I/M Committee will reach out to the public, fleet owners and other potential beneficiaries, government officials and transportation organizations for information and ideas about how the settlement money should be spent from among the 10 categories of allowable mitigation projects.

Timeline and Next Steps

The State may file for beneficiary status not later than 60 days after the presiding court determines the Trust Effective Date, expected to be sometime in the second half of 2017. After Nevada and is declared an eligible beneficiary of the Trust funds, the State must then submit an acceptable Beneficiary Mitigation Plan to the trustee; expected in the winter of 2017. The I/M Committee formed a Subcommittee that has been meeting since early 2017 to help develop Nevada’s Beneficiary Mitigation Plan. The I/M Subcommittee has prepared a draft Beneficiary Mitigation Plan that is open to the public for review and comment.

After the close of the comment period, the I/M Subcommittee will consider changes to the draft plan that further the State’s program goals and objectives. A further opportunity for review and comment on the plan will be available before the Beneficiary Mitigation Plan is submitted to the trustee. NDEP will likely begin accepting project proposals that conform to the Beneficiary Mitigation Plan in mid-2018.

NDEP has established a listserv email list for parties interested in following developments in the Nevada VW Fund program. If you would like to join the list, please select “VW Settlement - Nevada Mitigation Fund” from the “Select a Newsletter” button at the bottom of this page.

Here is the I/M Subcommittee’s draft Beneficiary Mitigation Plan. Public comment relating to this draft should be submitted to Joe Perreira (jperreira [at] ndep.nv.gov) no later than August 18, 2017.

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