HomeMy WebLinkAboutAppendix D Form of Environmental Mitigation Trust Agreement 10-25-2016-VW
APPENDIX D TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
APPENDIX D
FORM OF ENVIRONMENTAL
MITIGATION TRUST AGREEMENT
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MDL No. 2672 CRB (JSC)
APPENDIX D
FORM OF ENVIRONMENTAL MITIGATION TRUST AGREEMENT
The Settling Defendants and the Trustee hereby enter into this Environmental Mitigation
Trust Agreement (“Trust Agreement”) and establish the environmental mitigation trust herein
described (“Mitigation Trust” or “Trust”). The Settling Defendants and the Trustee acknowledge
that the purpose of the Mitigation Trust is to fulfill the Settling Defendants’ environmental
mitigation obligations under the Consent Decree. All payments to and expenditures from the
Mitigation Trust shall be for the sole purpose of fulfilling the Settling Defendants’ environmental
mitigation obligations under the Consent Decree. The Mitigation Trust shall be funded with
Mitigation Trust Payments according to the terms of the Consent Decree.
PURPOSE AND RECITALS
Whereas, the Settling Defendants are required to establish this Mitigation Trust and to
fund it with funds to be used for environmental mitigation projects that reduce emissions of
nitrogen oxides (“NOx”) where the 2.0 Liter Subject Vehicles were, are or will be operated
(“Eligible Mitigation Actions”), and to pay for Trust Administration Costs as set forth in this
Agreement;
Whereas, the funding for the Eligible Mitigation Actions provided for herein is intended
to fully mitigate the total, lifetime excess NOx emissions from the 2.0 Liter Subject Vehicles
where the 2.0 Liter Subject Vehicles were, are or will be operated;
Whereas, the Settling Defendants hereby establish this Mitigation Trust to provide funds
for Eligible Mitigation Actions and Trust Administration Costs;
Whereas, the Trustee has been selected to be the trustee under this Trust Agreement in
accordance with the requirements set forth in the Consent Decree; and
Whereas, the Trustee is willing to act as trustee;
Now, therefore, the Settling Defendants and the Trustee agree as follows:
I. DEFINITIONS
1.0 Unless otherwise defined in this Agreement, all capitalized terms used herein
shall have the meaning set forth in the Consent Decree.
1.1 “Beneficiary” shall mean each governmental entity determined to be a
Beneficiary pursuant to Section IV (Mitigation Trust Beneficiaries).
1.2 “Court” shall mean the United States District Court for the Northern District of
California.
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1.3 “DERA” shall mean the Diesel Emission Reduction Act, Title VII, Subtitle G, of
the Energy Policy Act of 2005 (codified at 42 U.S.C. § 16131-39).
1.4 “Eligible Mitigation Action” shall mean any of the actions listed in Appendix D-2
to this Trust Agreement.
1.5 “Eligible Mitigation Action Administrative Expenditure” shall mean those
expenditures specified in Appendix D-2 to this Trust Agreement, and shall not include Trust
Administration Costs.
1.6 “Federal agency” shall mean any agency of the United States government.
1.7 “Indian land” shall mean the lands of any Indian tribe or within Indian country.
1.8 “Trust Administration Costs” shall mean all expenditures of Trust Assets by the
Trustee, other than for Eligible Mitigation Action Administrative Expenditures.
II. MITIGATION TRUST
2.0 Establishment of the Trust
2.0.1 Irrevocable Establishment. The Settling Defendants hereby and
irrevocably establish this Mitigation Trust on behalf of the Beneficiaries. The Trustee
hereby accepts and agrees to hold the assets owned by the Mitigation Trust (“Trust
Assets”) for the benefit of the Beneficiaries and for the purposes described herein and in
the Consent Decree.
2.0.2 Trustee. In accordance with Paragraph 3.0 below, on the Trust Effective
Date, the Trustee, not individually but solely in the representative capacity of trustee,
shall be appointed as the Trustee in accordance with the Consent Decree to administer the
Mitigation Trust in accordance with this Trust Agreement and the Consent Decree.
2.0.3 Trust Purpose. It shall be the purpose of the Mitigation Trust to fund
Eligible Mitigation Actions to be proposed and administered by the Beneficiaries subject
to the requirements of the Consent Decree and this Trust Agreement. The goal of each
Eligible Mitigation Action shall be to achieve reductions of NOx emissions in the United
States.
2.0.4 Creation and Use of Trust Account. Within 15 Days following the Trust
Effective Date, the Trustee shall establish a trust account (“Trust Account”), and file with
the Court a designation and identification of Trust Account. The purpose of the Trust
Account shall be to receive deposits from the Settling Defendants, to receive income
gains from any investment of Trust Assets (collectively, “Trust Funds”), and to make
disbursements to fund Eligible Mitigation Actions and pay Trust Administration Costs,
all in accordance with the Consent Decree and this Trust Agreement. Unless otherwise
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agreed by the parties to the Consent Decree (“Consent Decree Parties”), the Trust
Account shall be the only account that may be used for these purposes.
2.0.4.1 Trust Account Divisions. The Trust Account may be divided into
such number of discrete trust subaccounts dedicated for specific purposes
as may be deemed necessary in the discretion of the Trustee to comply
with the terms of, and to implement, the Consent Decree and this Trust
Agreement.
2.1 Funding of the Trust: The Settling Defendants shall fund the Mitigation Trust
as required by the Consent Decree.
2.1.1 Funding and Use of Tribal Allocation Subaccount. As soon as practicable
after the Trust Effective Date, the Trustee shall fund the Tribal Allocation Subaccount by
transferring into it from the Trust Account the funds allocated to it as set forth in
Appendix D-1. These funds may only be used to fund Eligible Mitigation Actions and
Eligible Mitigation Action Administrative Expenditures in the United States, and for
technical assistance as discussed below. After lodging the Consent Decree, the United
States shall consult with interested federally-recognized Indian tribes for a 60-Day
period, in order to establish a mechanism for allocating the funds in the Tribal Allocation
Subaccount among those tribes that are deemed Beneficiaries hereunder, including
allowing up to 5% of those funds to be directed towards technical assistance to enable
tribes to prepare funding requests for Eligible Mitigation Actions. The United States may
file a motion with the Court seeking approval of the allocation mechanism resulting from
the consultation process (“Consultation Motion”) by the later of: (i) 6 months after the
date the Consent Decree is lodged; or (ii) 30 Days after the Trust Effective Date.
2.1.1.1 If no Consultation Motion is timely filed, the Trustee shall post on
its public-facing website, within 30 Days of the final deadline for filing a
Consultation Motion pursuant to the preceding subparagraph, a “Notice of
Termination of Tribal Consultation Period,” and implement the Tribal
Allocation Instructions set forth at subparagraph 5.0.5.
2.1.1.2 If no Consultation Motion is timely filed that provides otherwise,
any funding request submitted by an Indian tribe may include a request for
an amount equaling up to 5% of the total funding request to be disbursed
by the Trustee towards the reimbursement of documented costs incurred
by the tribe for technical assistance in developing the funding request.
2.1.1.3 If a Consultation Motion is timely filed, the Trustee shall comply
with the Court’s order when issued.
2.1.1.4 In any case, prior to receiving any funds, each Indian tribe must
establish Beneficiary status hereunder by filing with the Court, at the time
it submits its first funding request, certifications consistent with
subparagraph 4.2. Any funding request submitted by any Indian tribe
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must comply with the requirements of subparagraphs 5.2.2 through 5.2.13
and 5.3, and each allocation given to any Indian tribe that is determined to
be a Beneficiary shall be subject to subparagraph 5.4.
2.1.2 Funding of the Trust Administration Cost Subaccount. As soon as
practicable after the Trust Effective Date, the Trustee shall fund a subaccount to pay for
Trust Administration Costs (“Trust Administration Cost Subaccount”) by transferring
into it from the Trust Account the funds allocated to that subaccount in accordance with
Appendix D-1. The Trustee may further subdivide the Trust Administration Cost
Subaccount into such number of additional subaccounts as may be deemed necessary in
the discretion of the Trustee to comply with the terms of, and implement, the Consent
Decree and this Trust Agreement. No additional Trust Assets may be directed to the
Trust Administration Cost Subaccount, or to the payment of Trust Administration Costs,
absent further order of the Court.
2.1.2.1 Allocation of Trust Administration Costs. The funds in the Trust
Administration Cost Subaccount shall be internally allocated in
accordance with each Beneficiary’s allocation rate. The Trustee shall
debit those Trust Administration Costs associated with a particular
Eligible Mitigation Action request against the Trust Administration Cost
Subaccount allocation of the Beneficiary that requested the funds
associated with that Eligible Mitigation Action. The Trustee shall debit all
other Trust Administration Costs (“Shared Administration Costs”) among
all Beneficiaries, weighted in accordance with each Beneficiary’s Trust
Administration Cost Subaccount allocation.
2.1.2.2 Tribal Administration Cost Subaccount. As soon as practicable
after the Trust Effective Date, the Trustee shall establish a Tribal
Administration Cost Subaccount which shall be funded in accordance with
the specific allocation in accordance with Appendix D-1. The funds in
this subaccount shall be used exclusively to pay for the Trust’s expenses
relating to administering the Tribal Allocation Subaccount; provided,
however, that the Trustee may also draw upon this account for a weighted
portion of Shared Administration Costs in accordance with the preceding
subparagraph. The funds in this subaccount shall be internally allocated
and debited in the same fashion as described in subparagraph 2.1.2.1.
Additionally, the consultation process required by Paragraph 2.1.1 may
direct that a portion of the funds in this subaccount be used to fund a
separate entity established in order to determine which Eligible Mitigation
Actions to submit to the Trustee. Although the Tribal Administration Cost
Subaccount shall be administered hereunder as a subaccount of the Trust
Administration Cost Subaccount, it shall be funded separately in
accordance with Appendix D-1. No additional Trust Assets may be
directed to the Tribal Administration Cost Subaccount, or to the payment
of Tribal Administration Costs, absent further order of the Court.
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2.2 Trust Limitations
2.2.1 Beginning on the Trust Effective Date and for each twelve-month period
thereafter, total Trust Administration Costs shall not exceed [##]% of the average value
of Trust Assets during that period, absent further order of the Court.
2.2.2 No Consent Decree Party or Beneficiary, nor any of their components,
agencies, officers, directors, agents, employees, affiliates, successors, or assigns, shall be
deemed to be an owner, operator, trustee, partner, agent, shareholder, officer, or director
of the Mitigation Trust.
2.2.3 All Trust Assets shall be used solely for the purposes provided in the
Consent Decree and this Trust Agreement.
2.2.4 This Mitigation Trust is irrevocable. The Settling Defendants (i) shall not
retain any ownership or residual interest whatsoever with respect to any Trust Assets,
including but not limited to the funds transferred by the Settling Defendants to fund the
Trust pursuant to the terms of the Consent Decree, and (ii) shall not have any liabilities or
funding obligations with respect to the Trust (to the Trustee, the Beneficiaries or
otherwise) other than the funding obligations expressly set forth in the Consent Decree.
Nor shall the Settling Defendants have any rights or role with respect to the management
or operation of the Trust, or the Trustee’s approval of requests for Eligible Mitigation
Action funding.
2.2.5 Exculpation. The Mitigation Trust shall have no liability whatsoever to
any person or party for any liability of the Settling Defendants; provided, however, that
the Mitigation Trust shall be liable to the Beneficiaries for funding of Eligible Mitigation
Actions in accordance with the terms of this Trust Agreement and the Consent Decree.
III. TRUSTEE RESPONSIBILITIES
3.0 Appointment: The Trustee, not individually but in his/her representative
capacity as Trustee, is hereby appointed to serve as the Trustee to administer the Mitigation Trust
in accordance with this Trust Agreement and the Consent Decree. The Trustee hereby accepts
such appointment and agrees to serve, commencing on the Trust Effective Date, in such fiduciary
capacity to the Mitigation Trust and the Beneficiaries.
3.1 Powers of the Trustee
3.1.1 Except as set forth in this Trust Agreement, the Trustee shall have the
power to perform those acts necessary and desirable to accomplish the purposes of the
Mitigation Trust, which shall be exercised in a fiduciary capacity and in furtherance of
and in a manner consistent with the purposes of this Trust Agreement and the Consent
Decree.
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3.1.2 Upon the Trust Effective Date, the powers of the Trustee shall include the
following:
3.1.2.1 To receive, manage, invest, supervise, and protect the Trust Assets
as provided in this Trust Agreement;
3.1.2.2 To establish a public-facing website onto which it will post all
materials as required hereunder;
3.1.2.3 To establish bylaws or other customary and necessary governance
documents to provide for transparent and orderly trust administration,
provided that any such bylaws or documents must be filed with the Court
when adopted and posted to the Trust’s public-facing website;
3.1.2.4 To incur, and pay from the Trust Administration Cost Subaccount,
any and all customary and commercially reasonable charges, taxes, and
expenses upon or connected with the administration of this Mitigation
Trust in the discharge of its fiduciary obligations;
3.1.2.5 To engage and compensate professionals to assist the Trustee in
accordance with this Trust Agreement, including but not limited to
environmental, investment, accounting, tax and third-party auditing
professionals. Such third-party auditing professionals may be used by the
Trustee to audit and/or review expenditures to verify that they comport
with the requirements and limitations on use of Trust Funds, as set forth
herein. The Trustee may initiate such an audit and/or review on its own
initiative or in response to credible reports or suggestions that such review
or audit is appropriate;
3.1.2.6 To purchase any insurance policies as the Trustee may determine
to be prudent to protect the Mitigation Trust, the Trust Assets, and the
Trustee from any claims that might be asserted against each;
3.1.2.7 To distribute Trust Assets for the purposes contemplated in this
Trust Agreement and the Consent Decree, including distributions of funds
to Beneficiaries for approved Eligible Mitigation Actions; and
3.1.2.8 Subject to applicable requirements of this Trust Agreement, the
Consent Decree, and other applicable law, to effect all actions and execute
and deliver all contracts, instruments, agreements, or other documents that
may be necessary to administer the Mitigation Trust in accordance with
this Trust Agreement and the Consent Decree, each in accordance with its
fiduciary duties to the governmental entities identified in Appendix D-1,
the Indian tribes, and the Beneficiaries.
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3.2 Investment of Trust Assets: The Trustee shall invest and reinvest the principal
and income of the Trust Assets in those investments that are reasonably calculated to preserve
the principal value, taking into account the need for the safety and liquidity of principal as may
be required to fund Eligible Mitigation Actions and Trust Administration Costs.
3.2.1 Any investment income that is not reinvested shall be deposited into the
Trust Account for distribution among the Beneficiaries or Supplemental Funding Eligible
Beneficiaries, weighted in accordance with the allocation in place at the time of such
deposit.
3.2.2 In investing, reinvesting, exchanging, selling, and managing Trust Assets,
the Trustee must perform its duties solely in the interest of the Beneficiaries and with the
care, skill, prudence, and diligence under the circumstances then prevailing which a
prudent investor, acting in a like capacity and familiar with such matters, would exercise
in the conduct of an enterprise of like character and with like aims; except that the right
and power of the Trustee to invest and reinvest the Trust Assets shall be limited to: (i)
demand and time deposits, such as certificates of deposit, in banks or other savings
institutions whose deposits are federally insured; (ii) U.S. Treasury bills, bonds and notes,
including, but not limited to, long-term U.S. Treasury bills, bonds and notes; (iii)
repurchase agreements for U.S. Treasury bills, bonds and notes; (iv) AA or AAA
corporate bonds (with the rating awarded by at least two of the three major rating
agencies (Standard & Poor’s, Moody’s, or Fitch)); or (v) open-ended mutual funds
owning only assets described in subparts (i) through (iv) of this subsection; provided,
however, that the value of bonds of any single company and its affiliates owned by the
Trust directly rather than through a mutual fund shall not exceed $10 million when
purchased, but may be held, despite increase in value, so long as such amount does not
exceed $16 million. Any such investments shall be made consistently with the Uniform
Prudent Investor Act.
3.2.3 Nothing in this Section shall be construed as authorizing the Trustee to
cause the Mitigation Trust to carry on any business or to divide the gains therefrom. The
sole purpose of this Section is to authorize the investment of the Trust Assets or any
portion thereof as may be reasonably prudent pending use of the proceeds for the
purposes of the Mitigation Trust.
3.3 Accounting: The Trustee shall maintain the books and records relating to the
Trust Assets and income and the payment of expenses of and liabilities against the Mitigation
Trust. The detail of these books and records and the duration the Trustee shall keep such books
and records shall be such as to allow the Trustee to make a full and accurate accounting of all
Trust Assets, as well as to comply with applicable provisions of law and standard accounting
practices, including Generally Accepted Accounting Principles (“GAAP”). The United States,
by and through the EPA, and each Beneficiar y, shall have the right upon 14 Days’ prior written
notice to inspect such books and records, as well as all supporting documentation. Except as
otherwise provided herein, the Trustee shall not be required to file any accounting or seek
approval of the Court with respect to the administration of the Mitigation Trust, or as a condition
for making any payment or distribution out of the Trust Assets.
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3.3.1 Semi-Annual Reporting. Within 180 Days of the Trust Effective Date in
the first year, and thereafter by January 1 and July 1 of each year, and then at least 30
Days prior to the filing of a motion to terminate pursuant to subparagraph 6.7 hereof
(each a “Financial Reporting Date”), the Trustee shall file with the Court and provide
each Beneficiary and the Settling Defendants with:
3.3.1.1 A statement: (i) confirming the value of the Trust Assets; (ii)
itemizing the investments then held by the Trust (including applicable
ratings on such investments); and (iii) including a cumulative and calendar
year accounting of the amount the Trustee has paid out from the Trust
Account and all subaccounts to any recipient;
3.3.1.2 For each Beneficiary, cumulative and calendar year accounting, as
of the Financial Reporting Date, of: (i) such Beneficiary’s initial allocation
of Trust Assets; (ii) any allocation adjustments pursuant to this
Agreement; (iii) line item descriptions of completed disbursements on
account of approved Eligible Mitigation Action; and (iv) such
Beneficiary’s remaining and projected allocation. Such accounting shall
also include, for each Beneficiary, a balance statement and projected
annual budget of disbursements taking into account those Eligible
Mitigation Actions that have been approved as of the Financial Reporting
Date;
3.3.1.3 For the Trust Administration Cost Subaccount, cumulative and
calendar year accounting, as of the Financial Reporting Date, of: (i) line
item disbursements of Total Administration Costs; (ii) balance statements;
(iii) 3-year projected annual budgets of disbursements on account of Trust
Administration Costs; and (iv) line by line accounting of Trust
Administration Costs recorded against each Beneficiary’s allocation
pursuant to subparagraph 2.1.2.1;
3.3.1.4 For the Trust Account and all subaccounts, including but not
limited to the Trust Administration Cost Subaccount, balance statements
and 3-year projected annual budgets that itemize all assets, income,
earnings, expenditures, allocations, and disbursements of Trust Assets by
Trust Account and by each subaccount;
3.3.1.5 Third-party audited financial reports disclosing and certifying the
disposition of all Trust Assets from the Trust Effective Date through the
calendar quarter immediately preceding the Financial Reporting Date,
specifically including reconciliations of prior budget projections to actual
performance;
3.3.1.6 A description of any previously unreported action taken by the
Trust in performance of its duties which, as determined by the Trustee,
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counsel, accountants, or other professionals retained by the Trustee,
affects the Trust in a materially adverse way;
3.3.1.7 A brief description of all actions taken in accordance with this
Agreement and the Consent Decree during the previous year; and
3.3.1.8 On each Financial Reporting Date, the Trustee shall
simultaneously publish on the Trust’s public-facing website all
information required to be provided under subparagraph 3.3.
3.4 Limitation of the Trustee’s Authority: The Trustee is not authorized to engage
in any trade or business with respect to the Trust Assets or proceeds therefrom.
3.5 Conditions of Trustee’s Obligations: The Trustee accepts appointment as the
Trustee subject to the following express terms and conditions:
3.5.1 No Bond. Notwithstanding any state law to the contrary, the Trustee,
including any successor Trustee, shall be exempt from giving any bond or other security
in any jurisdiction.
3.5.2 Limitation of Liability. In no event shall the Trustee be held personally
liable for any claims asserted against the Mitigation Trust except for actions or omissions
that are determined by a court order to be fraudulent, negligent, or willful misconduct by
the Trustee. Except as provided herein, the Trustee may consult with legal counsel,
accounting and financial professionals, environmental professionals, and other
professionals, and shall not be personally liable for any action taken or omission made by
it in accordance with advice given by such professionals, except in the case of a court
order determining fraud, negligence, or willful misconduct by the Trustee. In the absence
of willful misconduct, negligence, or fraud by the Trustee, as determined by a court, the
Trustee shall not be personally liable to persons seeking payment from or asserting
actions against the Mitigation Trust. For the avoidance of doubt, this subparagraph does
not create for the Trustee or Mitigation Trust any express or implied right to
indemnification from any Consent Decree Party for any claims asserted against the
Trustee or Mitigation Trust, and no Consent Decree Party shall be liable for any claims
asserted against the Trustee or Mitigation Trust.
3.5.3 Reliance on Documentation. The Trustee may rely on, and shall be
protected in acting upon, any notice, requisition, request, consent, certificate, order,
affidavit, letter, or other paper or document reasonably believed by it to be genuine and to
have been signed or sent by the proper person or persons.
3.5.4 Right to Demand Documentation. Notwithstanding anything else in this
Agreement, in the administration of the Trust Assets, the Trustee shall have the right, but
shall not be required, to demand from the relevant Beneficiary before the disbursement of
any cash or in respect of any action whatsoever within the purview of this Mitigation
Trust, any showings, certificates, opinions, appraisals, or other information, or action or
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evidence thereof, in addition to that required by the terms hereof that the Trustee
reasonably believes to be necessary or desirable.
3.6 Payment of Trust Administration Costs: Subject to the limits set forth in
subparagraph 2.2.1, the Mitigation Trust shall pay from the Trust Administration Cost
Subaccount its own reasonable and necessary costs and expenses, and shall reimburse the
Trustee for the actual reasonable out-of-pocket fees, costs, and expenses to the extent incurred by
the Trustee in connection with the administration of the Trust. The Trustee also shall be entitled
to receive reasonable compensation for services rendered on behalf of the Mitigation Trust, in
accordance with the projected annual budgets for administration of the Mitigation Trust required
under subparagraph 3.3.1.3 hereof, not to exceed ($[___]) per hour. Notwithstanding the
foregoing, the total amount of allowable Trust Administration Costs shall not exceed the cost cap
established under subparagraph 1.8. The Trustee shall include in its semi-annual reporting, and
post on its public website, detailed invoices of all Trust Administration Costs (including but not
limited to detailed invoices for the Trustee’s services rendered on behalf of the Trust) at least 15
Days prior to the payment of any such expense. Such invoices shall remain available on the
website until the Termination Date.
3.7 Termination, Resignation, and Removal of the Trustee
3.7.1 Termination of Trustee. The rights, powers, duties, and obligations of the
Trustee to the Mitigation Trust and the Beneficiaries will terminate on the Termination
Date.
3.7.2 Resignation of Trustee and Successor Trustee. Resignation of the Trustee
shall only be effective upon: (i) selection of a successor pursuant to the procedures set
forth in the Consent Decree; and (ii) order of the Court. The successor trustee shall have
the same powers and duties as those conferred upon the Trustee hereunder. Upon the
appointment of a successor trustee or as otherwise ordered by the Court, the Trustee shall
transfer all Trust records to the successor trustee, and shall take all actions necessary to
assign, transfer, and pay over to the successor trustee control of all Trust Assets
(including the public website maintained by the Trustee). In the event that the Trustee
dies or becomes incapacitated, the Court may, upon motion by the United States or any
Beneficiary, appoint an interim Trustee until such time as a successor trustee is appointed
in accordance with the procedures set forth in the Consent Decree.
IV. MITIGATION TRUST BENEFICIARIES
4.0 Determination of Beneficiary Status: Each governmental entity identified in
Appendix D-1 hereto may elect to become a Beneficiary hereunder by filing with the Court a
single Certification Form (Appendix D-3), containing each of the certifications required by
subparagraphs 4.2.1 through 4.2.9, not later than 60 Days after the Trust Effective Date. Each
entity that timely files such certifications shall be a “Certifying Entity.” Each entity that fails to
timely file such certifications shall be an “Excluded Entity,” and shall be permanently enjoined
from asserting any rights with respect to Trust Assets or any other matter relating to the
implementation of this Trust. The Trustee shall be responsible for ensuring that the form of each
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certification complies with the requirements hereof prior to deeming any Certifying Entity to be
a Beneficiary hereunder. For the avoidance of doubt, the determination of Beneficiary status for
each Indian tribe shall be governed by subparagraphs 2.1.1 and 5.0.5.
4.0.1 Notice of Objection. If the United States or the Trustee determines that a
certification filed by any Certifying Entity fails to comply with the requirements of this
Section, either may file with the Court a notice of objection within 30 Days after a
Certifying Entity files its certifications with the Court. Such notice shall explain the basis
of objection with specificity. Any such objections shall be resolved according to the
procedures set forth in subparagraph 6.2.
4.0.2 Notice of Beneficiary Designation. Not later than 120 Days after the Trust
Effective Date, the Trustee shall file with the Court, publish on its public-facing website,
and serve on each Consent Decree Party and Certifying Entity lists indicating:
4.0.2.1 Which Certifying Entities filed certifications as to which no notice
of objection has been filed. Upon the filing of this Notice of Beneficiary
Designation, each such Certifying Entity shall be deemed a “Beneficiary”
hereunder;
4.0.2.2 Which governmental entity identified in Appendix D-1 did not
timely file the certifications pursuant to Paragraph 4.0. Each such
Certifying Entity shall be deemed an “Excluded Entity” hereunder; and
4.0.2.3 Which Certifying Entities timely filed certifications as to which a
notice of objection has been filed pursuant to subparagraph 4.0.1, together
with an explanation of the status of any such objection. Each such
Certifying Entity shall be a “Pending Beneficiary.” Upon final resolution
of each objection, the Pending Beneficiary shall either be deemed a
Beneficiary or an Excluded Entity hereunder.
4.1 Beneficiary Mitigation Plan: Not later than 90 Days after being deemed a
Beneficiary pursuant to subparagraph 4.0.2.1 hereof, each Beneficiary shall submit and make
publicly available a “Beneficiary Mitigation Plan” that summarizes how the Beneficiary plans to
use the mitigation funds allocated to it under this Trust, addressing: (i) the Beneficiary’s overall
goal for the use of the funds; (ii) the categories of Eligible Mitigation Actions the Beneficiary
anticipates will be appropriate to achieve the stated goals and the preliminary assessment of the
percentages of funds anticipated to be used for each type of Eligible Mitigation Action; (iii) a
description of how the Beneficiary will consider the potential beneficial impact of the selected
Eligible Mitigation Actions on air quality in areas that bear a disproportionate share of the air
pollution burden within its jurisdiction; and (iv) a general description of the expected ranges of
emission benefits the Beneficiary estimates would be realized by implementation of the Eligible
Mitigation Actions identified in the Beneficiary Mitigation Plan. The Beneficiary Mitigation
Plan need only provide the level of detail reasonably ascertainable at the time of submission.
This Plan is intended to provide the public with insight into a Beneficiary’s high-level vision for
use of the mitigation funds and information about the specific uses for which funding is expected
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to be requested. Nothing in this provision is intended to make the Beneficiary Mitigation Plan
binding on any Beneficiary, nor does it create any rights in any person to claim an entitlement of
any kind. Beneficiaries may adjust their goals and specific spending plans at their discretion
and, if they do so, shall provide the Trustee with updates to their Beneficiary Mitigation Plan.
To the extent a Beneficiary intends to avail itself of the DERA Option described in Appendix D-
2, that Beneficiary may use its Final Approved DERA Workplan as its Beneficiary Mitigation
Plan as to those Eligible Mitigation Actions funded through the DERA Option. The Beneficiary
Mitigation Plan shall explain the process by which the Beneficiary shall seek and consider public
input on its Beneficiary Mitigation Plan.
4.2 Required Certifications
4.2.1 Identification of Lead Agency and Submission to Jurisdiction. Each
Certification Form must include a designation of lead agency, certified by the Office of
the Governor or (if not a state, the analogous chief executive) of the Appendix D-1 entity
on whose behalf the Certification Form is submitted, indicating which agency,
department, office, or division will have the delegated authority to act on behalf of and
legally bind such Appendix D-1 entity. The Certification Form shall also include
confirmation by the Certifying Entity that: (i) it has the authority to sign the Certification
Form; and (ii) it agrees, without limitation, to be bound by the terms of this Agreement,
including the allocations of Trust Assets provided hereunder, and to be subject to the
jurisdiction of the Court for all matters concerning the interpretation or performance of,
or any disputes arising under, this Trust Agreement. The Certifying Entity’s agreement
to federal jurisdiction for this purpose shall not be construed as consent to federal court
jurisdiction for any other purpose.
4.2.2 Consent to Trustee Authority. Each Certification Form must include an
agreement by the Certifying Entity that the Trustee has the authorities specified in this
Agreement, including but not limited to the authority: (i) to approve, deny, request
modifications, or request further information related to any request for funds hereunder;
and (ii) to implement this Agreement in accordance with its terms.
4.2.3 Certification of Legal Authority. Each Certification Form must certify
that: (i) the laws of the Certifying Entity do not prohibit it from being a Beneficiary
hereunder; (ii) prior to requesting any funds hereunder, the Certifying Entity shall obtain
full legal authority to receive and/or direct payments of such funds; and (iii) if the
Certifying Entity fails to demonstrate that it has obtained such legal authority within two
years of submitting its Certification Form, it shall become an Excluded Entity hereunder
and its initial allocation shall be redistributed among the Beneficiaries pursuant to
subparagraph 5.0.1.
4.2.4 Certification of Legal Compliance. Each Certification Form must include
a certification and agreement that, in connection with all actions related to this Trust, the
Certifying Entity has followed and will follow all applicable law and that such Certifying
Entity will assume full responsibility for its decisions in that regard.
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4.2.5 Certification of Eligible Mitigation Action Accounts. Each Certification
Form shall include a certification by the Certifying Entity that all funds received on
account of any Eligible Mitigation Action request that are not used for the Eligible
Mitigation Action shall be returned to the Trustee for credit to the allocation of such
Certifying Entity.
4.2.6 Waiver of Claims for Injunctive Relief under Environmental or Common
Laws. Each Certification Form shall include an express waiver by the Certifying Entity,
on behalf of itself and all of its agencies, departments, offices, and divisions, in favor of
the parties to the Consent Decree (including the Settling Defendants) of all claims for
injunctive relief to redress environmental injury caused by the 2.0 Liter Subject Vehicles,
whether based on the environmental or common law within its jurisdiction. Such waiver
shall be binding on all agencies, departments, offices, and divisions of such Beneficiary
asserting, purporting to assert, or capable of asserting such claims. The waiver need not
waive, and the Certifying Entities may expressly reserve, their rights, if any, to seek fines
or penalties. California’s entry in the Consent Decree shall satisfy its certification
obligations under this subparagraph. No waiver submitted by any Indian tribe shall be
effective unless and until such Indian tribe actually receives Trust Funds.
4.2.7 Publicly Available Information. Each Certification Form must include a
certification by the Certifying Entity that it will maintain and make publicly available all
documentation and records: (i) submitted by it in support of each funding request; and (ii)
supporting all expenditures of Trust Funds by the Certifying Entity, each until the
Termination Date, unless the laws of the Certifying Entity require a longer record
retention period. This certification shall include an explanation of the procedures by
which the records may be accessed, which procedures shall be designed to support access
and limit burden for the general public, and for the Beneficiary Mitigation Plan required
under Paragraph 4.1, the procedures by which public input will be solicited and
considered. This certification can be made subject to applicable laws governing the
publication of confidential business information and personally identifiable information.
4.2.8 Notice of Availability of Mitigation Action Funds. Each Certification
Form must certify that, not later than 30 Days after being deemed a Beneficiary pursuant
to subparagraph 4.0.2.1 hereof, the Certifying Entity will provide a copy of this
Agreement with Attachments to the U.S. Department of the Interior, the U.S. Department
of Agriculture, and any other Federal agency that has custody, control or management of
land within or contiguous to the territorial boundaries of the Certifying Entity and has by
then notified the Certifying Entity of its interest hereunder, explaining that the Certifying
Entity may request Eligible Mitigation Action funds for use on lands within that Federal
agency’s custody, control or management (including but not limited to Clean Air Act
Class I and II areas), and setting forth the procedures by which the Certifying Entity will
review, consider, and make a written determination upon each such request.
4.2.9 Registration of 2.0 Liter Subject Vehicles. Each Certification Form must
state, for the benefit of the parties to the Consent Decree (including the Settling
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Defendants) and the owners from time-to-time of 2.0 Liter Subject Vehicles, that the
Certifying Entity:
(a) Shall not deny registration to any Subject Vehicle based solely on:
i. The presence of a defeat device or AECD covered by the resolution of claims
in the Consent Decree; or
ii. Emissions resulting from such a defeat device or AECD; or
iii. The availability of an Approved Emissions Modification or the Buyback,
Lease Termination, and Owner/Lessee Payment Program.
(b) Shall not deny registration to any Subject Vehicle that has received an Approved
Emissions Modification based solely on:
i. The fact that the vehicle received the Approved Emissions Modification; or
ii. Emissions resulting from the modification (including but not limited to the
anticipated emissions described in Appendix B to the Consent Decree); or
iii. Other emissions-related vehicle characteristics that result from the
modification; or
iv. The availability of an Approved Emissions Modification or the Buyback,
Lease Termination, and Owner/Lessee Payment Program.
(c) May identify 2.0 Liter Subject Vehicles as having received, or not received, the
Approved Emissions Modification on the basis of VIN-specific information provided to
the Certifying Entity by the Settling Defendants.
(d) Notwithstanding the foregoing, a Certifying Entity may deny registration to any
Subject Vehicle on the basis that the Subject Vehicle fails to meet EPA’s or the
Certifying Entity’s failure criteria for the onboard diagnostic (OBD) inspection; or on
other grounds authorized or required under applicable federal regulations (including an
approved State Implementation Plan) or under Section 209 or 177 of the Clean Air Act
and not explicitly excluded in subparagraphs 4.2.9(a)-(b).
V. DISTRIBUTION OF MITIGATION TRUST ASSETS
5.0 Initial Allocation: Each governmental entity identified in Appendix D-1 hereto
shall have the right under this Trust Agreement, upon becoming a Beneficiary pursuant to
Section IV (Mitigation Trust Beneficiaries), to request its share of Eligible Mitigation Action
funds in accordance with the allocation rates set forth in Appendix D-1 (“Initial Allocation
Rates”).
5.0.1 Together with the Notice of Beneficiary Designation required to be filed
pursuant to subparagraph 4.0.2, the Trustee shall also file with the Court and serve upon
each Consent Decree party, Beneficiary, and Pending Beneficiary, a corresponding
recalculation of the Initial Allocation Rates to reallocate each Excluded Entity’s share
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among the Beneficiaries and Pending Beneficiaries, weighted in accordance with the
Initial Allocation Rates (“Final Allocation Rates”). If any Pending Beneficiary is deemed
an Excluded Entity hereunder, its share shall be reallocated among the Beneficiaries and
remaining Pending Beneficiaries, weighted in accordance with the Final Allocation
Rates. The Trustee shall file with the Court and serve upon each Consent Decree party,
Beneficiary, and Pending Beneficiary a notice of reallocation in the event that the Final
Allocation Rates are adjusted in accordance with this Trust Agreement.
5.0.2 Upon being deemed a Beneficiary pursuant to subparagraph 4.0.2.1
hereof, each Beneficiary shall have the right under this Trust Agreement to request
Eligible Mitigation Action funds up to the total dollar amount allocated to it. Provided,
however, that no Beneficiary may request payout of more than (i) one-third of its
allocation during the first year after the Settling Defendants make the Initial Deposit, or
(ii) two-thirds of its allocation during the first two years after the Settling Defendants
make the Initial Deposit.
5.0.3 Allocation of Appendix A Mitigation Trust Payments. Any “National
Mitigation Trust Payment” made pursuant to Section VI (Recall Rate) of Appendix A
(Buyback, Lease Termination, and Vehicle Modification Recall Program) shall be
allocated among all Beneficiaries other than California, weighted in accordance with the
Final Allocation Rates. Any “California Mitigation Trust Payment” made pursuant to
that Section shall be allocated exclusively to California.
5.0.4 Allocation of Appendix B Payments. Any Mitigation Trust Payments
made pursuant to Appendix B (Vehicle Recall and Emissions Modification Program) or
any Consent Decree provisions related thereto shall be allocated among all Beneficiaries,
weighted in accordance with the Final Allocation Rates.
5.0.5 Distribution of Tribal Allocation Subaccount. If no Consultation Motion
is timely filed pursuant to subparagraph 2.1.1 hereof, the Trustee shall, within 30 Days
after the final deadline for filing a Consultation Motion pursuant to that subparagraph,
promptly post on the Trust’s public-facing website:
5.0.5.1 Notice: (i) that each Indian tribe may seek to become a Beneficiary
hereunder by filing with the Court, at the time it submits its first funding
request, certifications consistent with subparagraph 4.2; and (ii) of the date
by which the Trustee will determine and post notice of the Beneficiary
status of each certifying tribe, which determination shall be made in a
manner consistent with the procedures set forth in Paragraph 4.0.2.
5.0.5.2 Notice that, commencing on the first September 1 after the Trust
Effective Date and for five years thereafter (for a total of six September 1
funding request deadlines), each Indian tribe may submit to the Trustee
funding requests that meet the requirements of subparagraphs 5.2.2
through 5.2.13. For funding requests that seek DERA funds, the DERA
notice of intent to participate may be submitted for purposes of the
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September 1 deadline, with the full DERA proposal to be submitted to the
Trustee when it is submitted to EPA.
5.0.5.2.1 Regardless of the total amount of funding requests received
on each of these six annual submission deadlines: (i) no more than one
sixth of total remaining assets in the Tribal Allocation Subaccount may
be committed during the first funding cycle; (ii) no more than one fifth
of total remaining assets in the Tribal Allocation Subaccount may be
committed during the second funding cycle; (iii) no more than one
quarter of total remaining assets in the Tribal Allocation Subaccount
may be committed during the third funding cycle; (iv) no more than
one third of total remaining assets in the Tribal Allocation Subaccount
may be committed during the fourth funding cycle; (v) no more than
one half of total remaining assets in the Tribal Allocation Subaccount
may be committed during the fifth funding cycle; and (vi) the
remaining funds in the Tribal Allocation Subaccount may be
committed during the sixth funding cycle. In the event uncommitted
funds remain in the Tribal Allocation Subaccount or the Tribal
Administration Subaccount after all funding requests have been
approved or rejected during the sixth funding cycle, such funds shall
be returned to the Trust Account and allocated among the non-tribal
Beneficiaries, weighted in accordance with their allocation.
5.0.5.2.2 In the event that the total amount of the funding requests
received on any submission deadline is less than the total amount of
funds available to be committed during the corresponding funding
cycle, the Trustee shall make no adjustments to the funding requests
before approving approvable funding requests pursuant to
subparagraph 5.2.15.
5.0.5.2.3 In the event that the total amount of the funding requests
received on any submission deadline is more than the amount of funds
available to be committed during the corresponding funding cycle, the
Trustee shall not approve any funding requests pursuant to
subparagraph 5.2.15, but rather shall: (i) allocate to each tribe that has
been deemed a Beneficiary hereunder and has submitted a funding
request during the funding cycle a share of the funds available during
that funding cycle, weighted in accordance with the total population
living within each tribe’s tribal area according to the American Indian
and Alaska Native areas of the 2010 Census (including reservations,
off-reservation trust lands, and statistical areas); and (ii) publish on its
public-facing website the tribal allocation and a notice that the
deadline for that funding cycle shall be pushed forward by one year.
In this event: (i) the one year delay of any particular funding cycle
shall not impact the deadline for subsequent funding cycles; and (ii)
such tribal allocation shall only apply to the over-subscribed funding
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cycle. To the extent a tribe has submitted a DERA notice of intent to
participate, such notice shall be used to calculate the total amount of
funds requested under this subparagraph.
5.0.5.3 Nothing herein precludes any Beneficiary from using any share of
its allocation for Eligible Mitigation Projects on Indian land.
5.1 Eligible Mitigation Actions and Expenditures: The Trustee may only disburse
funds for Eligible Mitigation Actions, and for the Eligible Mitigation Action Administrative
Expenditures specified therein.
5.2 Funding Requests: Beneficiaries may submit requests for Eligible Mitigation
Action funding at any time. Each request for Eligible Mitigation Action funding must be
submitted to the Trustee in electronic and hard-copy format, and include:
5.2.1 An explanation of how the funding request fits into the Beneficiary’s
Mitigation Plan;
5.2.2 A detailed description of the proposed Eligible Mitigation Action,
including its community and air quality benefits;
5.2.3 An estimate of the NOx reductions anticipated as a result of the proposed
Eligible Mitigation Action;
5.2.4 A project management plan for the proposed Eligible Mitigation Action,
including a detailed budget and an implementation and expenditure timeline;
5.2.5 A certification that all vendors were or will be selected in accordance with
applicable state public contracting laws;
5.2.6 For each proposed expenditure exceeding $25,000, detailed cost estimates
from selected or potential vendors;
5.2.7 A detailed description of how the Beneficiary will oversee the proposed
Eligible Mitigation Action, including but not limited to:
5.2.7.1 Identification of the specific governmental entity responsible for
reviewing and auditing expenditures of Eligible Mitigation Action funds
to ensure compliance with applicable law; and
5.2.7.2 A commitment by the Beneficiary to maintain and make publicly
available all documentation submitted in support of the funding request
and all records supporting all expenditures of Eligible Mitigation Action
funds, subject to applicable laws governing the publication of confidential
business information and personally identifiable information, together
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with an explanation of the procedures by which the Beneficiary shall make
such documentation publicly available;
5.2.8 A description of any cost share requirement to be placed upon the owner
of each NOx source proposed to be mitigated;
5.2.9 A description of how the Beneficiary complied with subparagraph 4.2.8;
5.2.10 A description of how the Eligible Mitigation Action mitigates the impacts
of NOx emissions on communities that have historically borne a disproportionate share of
the adverse impacts of such emissions; and
5.2.11 A detailed plan for reporting on Eligible Mitigation Action
implementation.
5.2.12 DERA Option. To the extent a Beneficiary intends to avail itself of the
DERA Option described in Appendix D-2, that Beneficiary may use its DERA proposal
as its funding request for those Eligible Mitigation Actions funded through the DERA
Option.
5.2.13 Joint Application. Two or more Beneficiaries may submit a joint request
for Eligible Mitigation Action funds. Joint applicants shall specify the amount of
requested funding that shall be debited against each requesting Beneficiary’s allocation.
5.2.14 Publication of Funding Requests. The Trustee shall post each funding
request on the Trust’s public-facing website upon receipt.
5.2.15 Approval of Funding Requests. The Trustee shall approve any funding
request that meets the requirements of this Agreement and its Attachments, and furthers
the purposes of this Trust. Within 60 Days after receipt of each Eligible Mitigation
Action funding request, the Trustee shall transmit to the requesting Beneficiary and post
on the Trust’s public-facing website a written determination either: (i) approving the
request; (ii) denying the request; (iii) requesting modifications to the request; or (iv)
requesting further information. A Beneficiary may use such written determination as
proof of funding for any DERA project application that includes Trust Funds as a non-
federal voluntary match, as described in Appendix D-2. The Trustee shall respond to any
modified or supplemental submission within 30 Days of receipt. Each written
determination approving or denying an Eligible Mitigation Action funding request shall
include an explanation of the reasons underlying the determination, including whether the
proposed Eligible Mitigation Action meets the requirements set forth in Appendix D-2
and furthers the purposes of this Trust. The Trustee’s decision to approve, deny, request
modifications, or request further information related to a request shall be reviewable,
upon petition of the United States or the submitting Beneficiary, by the Court.
5.2.15.1 Disbursement of Funds. The Trustee shall begin disbursing funds
within 15 Days of approval of an Eligible Mitigation Action funding
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request according to the written instructions and schedule provided by the
Beneficiary.
5.2.16 Unused Eligible Mitigation Action Funds. Upon the termination or
completion of any Eligible Mitigation Action, any unused Eligible Mitigation Action
funds shall be returned to the Trust and added back to the Beneficiary’s allocation.
5.3 Beneficiary Reporting Obligations: For each Eligible Mitigation Action, no
later than six months after receiving its first disbursement of Trust Assets, and thereafter no later
than January 1 and July 1 of each year, each Beneficiary shall serve upon the Trustee, a
semiannual report describing the progress implementing each Eligible Mitigation Action during
the six-month period leading up to the reporting date (including a summary of all costs expended
on the Eligible Mitigation Action through the reporting date). Such reports shall include a
complete description of the status (including actual or projected termination date), development,
implementation, and any modification of each approved Eligible Mitigation Action.
Beneficiaries may group multiple Eligible Mitigation Actions and multiple sub-beneficiaries into
a single report. These reports shall be signed by an official with the authority to submit the
report for the Beneficiary and must contain an attestation that the information is true and correct
and that the submission is made under penalty of perjury. To the extent a Beneficiary avails
itself of the DERA Option described in Appendix D-2, that Beneficiary may submit its DERA
Quarterly Programmatic Reports in satisfaction of its obligations under this subparagraph as to
those Eligible Mitigation Actions funded through the DERA Option. The Trustee shall post each
semiannual report on the Trust’s public-facing website upon receipt.
5.4 Supplemental Funding for Eligible Beneficiaries and Final Disposition of
Trust Assets
5.4.1 Estimate of Remainder Balance. On the tenth anniversary of the Trust
Effective Date, the Trustee shall file with the Court, deliver to the United States, by and
through the EPA, and to each Beneficiary, and publish on its public website, an
accounting of all Trust Assets that have not by that date been expended on or obligated to
approved Eligible Mitigation Actions or prior Trust Administration Costs, together with
an estimate of funding reasonably needed to cover the remaining Trust Administration
Costs. The difference between these two amounts shall be referred to as the “Remainder
Balance.”
5.4.2 Application for Supplemental Funding Eligible Beneficiary Status. On the
tenth anniversary of the Trust Effective Date, each Beneficiary may seek to supplement
its remaining allocation by filing with the Court and delivering to the Trustee a written
report demonstrating that it has by that date obligated at least eighty percent (80%) of the
funds allocated to it pursuant to the Final Allocation Rates calculated pursuant to
subparagraph 5.0.1 (as determined with specific reference to the reports submitted
pursuant to subparagraph 5.3).
5.4.3 Publication of Remainder Balance and Supplemental Funding Eligible
Beneficiary Status. Within 90 Days after the tenth anniversary of the Trust Effective
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Date, the Trustee shall file with the Court, notify the United States, by and through the
EPA, and each Beneficiary, and publish on its website, a report indicating: (i) the
Remainder Balance; and (ii) which of the Beneficiaries has demonstrated that it had in
fact expended at least 80% of the funds allocated to it pursuant to the Final Allocation
Rates calculated pursuant to subparagraph 5.0.1, each of which shall be deemed a
“Supplemental Funding Eligible Beneficiary”.
5.4.4 Distribution of Remainder Balance to Supplemental Funding Eligible
Beneficiaries. On the later of (i) 180 Days after the tenth anniversary of the Trust
Effective Date, or (ii) the resolution of any disputes arising from the Trustee’s
accountings or determinations pursuant to subparagraphs 5.4.1 or 5.4.3, the Remainder
Balance shall be divided among the Supplemental Funding Eligible Beneficiaries in
accordance with their weighted share of the Final Allocation Rates.
5.4.5 Final Disposition of Trust Assets. Not later than the fifteenth anniversary
of the Trust Effective Date, any unused funds held by any Beneficiary shall be returned to
the Trust. After the fifteenth anniversary of the Trust Effective Date, any Trust Assets
held in the Trust Account or any subaccount (including but not limited to the Trust
Administration Cost Subaccount, Tribal Allocation Subaccount, and the Tribal
Administration Cost Subaccount) that are not needed for final Trust Administration Costs
shall be deemed to have been donated by the Trust to fund Eligible Mitigation Actions
administered by Federal agencies that have custody, control or management of land in the
United States that is impacted by excess NOx emissions (including but not limited to
Clean Air Act Class I and II areas) and that have the legal authority to accept such funds,
in accordance with instructions to be provided by the United States. If no such agencies
exist, then such funds shall be applied as otherwise directed by the Court on motion by
one or more of the remaining Beneficiaries, with notice to the United States, the Settling
Defendants, and the other remaining Beneficiaries.
VI. MISCELLANEOUS PROVISIONS
6.0 Correspondence with Trust: [Insert instructions for transmitting
certifications, funding requests, and other correspondence to Trustee]
6.1 Jurisdiction: The U.S. District Court for the Northern District of California shall
be the sole and exclusive forum for the purposes of enforcing this Mitigation Trust and resolving
disputes hereunder, including the obligations of the Trustee to perform its obligations hereunder,
and each of the Consent Decree Parties, the Mitigation Trust, the Trustee, and each Beneficiary,
expressly consents to such jurisdiction.
6.2 Dispute Resolution: Unless otherwise expressly provided for herein, the dispute
resolution procedures of this Paragraph shall be the exclusive mechanism to resolve any dispute
between or among the entities listed in Appendix D-1 hereto, the Consent Decree Parties, and the
Trustee arising under or with respect to this Agreement.
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6.2.1 Informal Dispute Resolution. Any dispute subject to Dispute Resolution
under this Agreement shall first be the subject of informal negotiations. The dispute shall
be considered to have arisen when the disputing party sends to the counterparty a written
Notice of Dispute. Such Notice of Dispute shall state clearly the matter in dispute. The
period of informal negotiations shall not exceed 30 Days from the date the dispute arises,
unless that period is modified by written agreement. If the disputing parties cannot
resolve the dispute by informal negotiations, then the disputing party may invoke formal
dispute resolution procedures as set forth below.
6.2.2 Formal Dispute Resolution. The disputing party shall invoke formal
dispute resolution procedures, within the time period provided in the preceding
subparagraph, by serving on the counterparty a written Statement of Position regarding
the matter in dispute. The Statement of Position shall include, but need not be limited to,
any factual data, analysis, or opinion supporting the disputing party’s position and any
supporting documentation and legal authorities relied upon by the disputing party. The
counterparty shall serve its Statement of Position within 30 Days of receipt of the
disputing party’s Statement of Position, which shall also include, but need not be limited
to, any factual data, analysis, or opinion supporting the counterparty’s position and any
supporting documentation and legal authorities relied upon by the counterparty. If the
disputing parties are unable to consensually resolve the dispute within 30 Days after the
counterparty serves its Statement of Position on the disputing party, the disputing party
may file with the Court a motion for judicial review of the dispute in accordance with the
following subparagraph.
6.2.3 Judicial Review. The disputing party may seek judicial review of the
dispute by filing with the Court and serving on the counterparty and the United States, a
motion requesting judicial resolution of the dispute. The motion must be filed within 45
Days of receipt of the counterparty’s Statement of Position pursuant to the preceding
subparagraph. The motion shall contain a written statement of disputing party’s position
on the matter in dispute, including any supporting factual data, analysis, opinion,
documentation, and legal authorities, and shall set forth the relief requested and any
schedule within which the dispute must be resolved for orderly administration of the
Trust. The counterparty shall respond to the motion within the time period allowed by
the Local Rules of the Court, and the disputing party may file a reply memorandum, to
the extent permitted by the Local Rules.
6.3 Choice of Law: The validity, interpretation, and performance of this Mitigation
Trust shall be governed by the laws of the State of [California] [Delaware] and the United
States, without giving effect to the rules governing the conflicts of law that would require the
application of the law of another jurisdiction. This Trust Agreement shall not be subject to any
provisions of the Uniform Trust Code as adopted by any State, now or in the future. This Trust
Agreement shall be interpreted in a manner that is consistent with the Consent Decree, provided,
however, that in the event of a conflict between the Consent Decree and this Trust Agreement,
this Trust Agreement shall control.
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6.4 Modification: Material modifications to the Mitigation Trust or Appendix D-2
(Eligible Mitigation Actions) may be made only with the written consent of the United States
and upon order of the Court, and only to the extent that such modification does not change or
inhibit the purpose of this Mitigation Trust. Minor modifications or clarifying amendments to
the Mitigation Trust or Appendix D-2 (Eligible Mitigation Actions) may be made upon written
agreement between the United States and the Trustee, as necessary to enable the Trustee to
effectuate the provisions of this Mitigation Trust, and shall be filed with the Court. To the extent
the consent of the Settling Defendants is required to effectuate the modification or amendment,
such consent shall not be unreasonably withheld. Notwithstanding the foregoing sentence,
without the express written consent of the Settling Defendants, no modification shall: (i) require
the Settling Defendants to make any payments to the Trust other than the Mitigation Trust
Payments required by the Consent Decree; or (ii) impose any greater obligation on Settling
Defendants than those set forth in the Trust Agreement that is being modified. The Trustee shall
provide to the Beneficiaries not less than 30 Days’ notice of any proposed modification to the
Mitigation Trust, whether material or minor, before such modification shall become effective.
6.5 Severability: If any provision of this Agreement or application thereof to any
person or circumstance shall be finally determined by the Court to be invalid or unenforceable to
any extent, the remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and such provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
6.6 Taxes: If the Trustee determines, upon the advice of qualified tax professionals,
that this Trust is a qualified settlement fund (“QSF”) pursuant to 26 C.F.R. § 1.468B-1, then the
Trustee shall be the “administrator,” within the meaning of Treasury Regulation Section 1.468B-
2(k)(3), of this Trust. Subject to definitive guidance from the U.S. Internal Revenue Service or a
judicial decision to the contrary, the Trustee shall file tax returns and pay applicable taxes with
respect to the Trust in a manner consistent with the provisions of the QSF regulations. All such
taxes shall be paid from the Trust Administration Cost Account.
6.7 Termination: After all funds have been expended pursuant to subparagraph
5.4.5, and final reports have been delivered pursuant to subparagraph 3.3 and 3.3.1, the Trustee
may file a motion with the Court requesting an order terminating this Trust. The United States
and the Beneficiaries shall be given not less than 60 Days to oppose such motion. This Trust
shall terminate upon approval by the Court of the Trustee’s motion to terminate (the
“Termination Date”).
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[Add Signatures for Settling Defendants and the Trustee]
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APPENDIX D-1
Initial Allocation
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Rhode Island
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APPENDIX D-2
Eligible Mitigation Actions and Mitigation Action Expenditures
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APPENDIX D-2
ELIGIBLE MITIGATION ACTIONS AND MITIGATION ACTION EXPENDITURES
1. Class 8 Local Freight Trucks and Port Drayage Trucks (Eligible Large Trucks)
a. Eligible Large Trucks include 1992-2009 engine model year Class 8 Local
Freight or Drayage. For Beneficiaries that have State regulations that already
require upgrades to 1992-2009 engine model year trucks at the time of the
proposed Eligible Mitigation Action, Eligible Large Trucks shall also include
2010-2012 engine model year Class 8 Local Freight or Drayage.
b. Eligible Large Trucks must be Scrapped.
c. Eligible Large Trucks may be Repowered with any new diesel or Alternate
Fueled engine or All-Electric engine, or may be replaced with any new diesel or
Alternate Fueled or All-Electric vehicle, with the engine model year in which
the Eligible Large Trucks Mitigation Action occurs or one engine model year
prior.
d. For Non-Government Owned Eligible Class 8 Local Freight Trucks,
Beneficiaries may only draw funds from the Trust in the amount of:
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 25% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
3. Up to 75% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 75% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
e. For Non-Government Owned Eligible Drayage Trucks, Beneficiaries may only
draw funds from the Trust in the amount of:
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 50% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
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3. Up to 75% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 75% of the cost of a new all-electric vehicle, including charging
infrastructure associated with the new All-Electric vehicle.
f. For Government Owned Eligible Class 8 Large Trucks, Beneficiaries may draw
funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 100% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
3. Up to 100% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 100% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
2. Class 4-8 School Bus, Shuttle Bus, or Transit Bus (Eligible Buses)
a. Eligible Buses include 2009 engine model year or older class 4-8 school buses,
shuttle buses, or transit buses. For Beneficiaries that have State regulations that
already require upgrades to 1992-2009 engine model year buses at the time of
the proposed Eligible Mitigation Action, Eligible Buses shall also include 2010-
2012 engine model year class 4-8 school buses, shuttle buses, or transit buses.
b. Eligible Buses must be Scrapped.
c. Eligible Buses may be Repowered with any new diesel or Alternate Fueled or
All-Electric engine, or may be replaced with any new diesel or Alternate Fueled
or All-Electric vehicle, with the engine model year in which the Eligible Bus
Mitigation Action occurs or one engine model year prior.
d. For Non-Government Owned Buses, Beneficiaries may draw funds from the
Trust in the amount of:
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 25% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
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3. Up to 75% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 75% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
e. For Government Owned Eligible Buses, and Privately Owned School Buses
Under Contract with a Public School District, Beneficiaries may draw funds
from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 100% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
3. Up to 100% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 100% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
3. Freight Switchers
a. Eligible Freight Switchers include pre-Tier 4 switcher locomotives that operate
1000 or more hours per year.
b. Eligible Freight Switchers must be Scrapped.
c. Eligible Freight Switchers may be Repowered with any new diesel or Alternate
Fueled or All-Electric engine(s) (including Generator Sets), or may be replaced
with any new diesel or Alternate Fueled or All-Electric (including Generator
Sets) Freight Switcher, that is certified to meet the applicable EPA emissions
standards (or other more stringent equivalent State standard) as published in the
CFR for the engine model year in which the Eligible Freight Switcher
Mitigation Action occurs.
d. For Non-Government Owned Freight Switchers, Beneficiaries may draw funds
from the Trust in the amount of :
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine(s) or Generator Sets,
including the costs of installation of such engine(s).
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2. Up to 25% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) Freight Switcher.
3. Up to 75% of the cost of a Repower with a new All-Electric engine(s),
including the costs of installation of such engine(s), and charging
infrastructure associated with the new All-Electric engine(s).
4. Up to 75% of the cost of a new All-Electric Freight Switcher,
including charging infrastructure associated with the new All-Electric
Freight Switcher.
e. For Government Owned Eligible Freight Switchers, Beneficiaries may draw
funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine(s) or Generator Sets,
including the costs of installation of such engine(s).
2. Up to 100% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) Freight Switcher.
3. Up to 100% of the cost of a Repower with a new All-Electric
engine(s), including the costs of installation of such engine(s), and
charging infrastructure associated with the new All-Electric engine(s).
4. Up to 100% of the cost of a new All-Electric Freight Switcher,
including charging infrastructure associated with the new All-Electric
Freight Switcher.
4. Ferries/Tugs
a. Eligible Ferries and/or Tugs include unregulated, Tier 1, or Tier 2 marine
engines.
b. Eligible Ferry and/or Tug engines that are replaced must be Scrapped.
c. Eligible Ferries and/or Tugs may be Repowered with any new Tier 3 or Tier 4
diesel or Alternate Fueled engines, or with All-Electric engines, or may be
upgraded with an EPA Certified Remanufacture System or an EPA Verified
Engine Upgrade.
d. For Non-Government Owned Eligible Ferries and/or Tugs, Beneficiaries may
only draw funds from the Trust in the amount of:
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine(s), including the costs of
installation of such engine(s).
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2. Up to 75% of the cost of a Repower with a new All-Electric engine(s),
including the costs of installation of such engine(s), and charging
infrastructure associated with the new All-Electric engine(s).
e. For Government Owned Eligible Ferries and/or Tugs, Beneficiaries may draw
funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine(s), including the costs of
installation of such engine(s).
2. Up to 100% of the cost of a Repower with a new All-Electric
engine(s), including the costs of installation of such engine(s), and
charging infrastructure associated with the new All-Electric engine(s).
5. Ocean Going Vessels (OGV) Shorepower
a. Eligible Marine Shorepower includes systems that enable a compatible vessel’s
main and auxiliary engines to remain off while the vessel is at berth.
Components of such systems eligible for reimbursement are limited to cables,
cable management systems, shore power coupler systems, distribution control
systems, and power distribution. Marine shore power systems must comply
with international shore power design standards (ISO/IEC/IEEE 80005-1-2012
High Voltage Shore Connection Systems or the IEC/PAS 80005-3:2014 Low
Voltage Shore Connection Systems) and should be supplied with power sourced
from the local utility grid. Eligible Marine Shorepower includes equipment for
vessels that operate within the Great Lakes.
b. For Non-Government Owned Marine Shorepower, Beneficiaries may only draw
funds from the Trust in the amount of up to 25% for the costs associated with
the shore-side system, including cables, cable management systems, shore
power coupler systems, distribution control systems, installation, and power
distribution components.
c. For Government Owned Marine Shorepower, Beneficiaries may draw funds
from the Trust in the amount of up to 100% for the costs associated with the
shore-side system, including cables, cable management systems, shore power
coupler systems, distribution control systems, installation, and power
distribution components.
6. Class 4-7 Local Freight Trucks (Medium Trucks)
a. Eligible Medium Trucks include 1992-2009 engine model year class 4-7 Local
Freight trucks, and for Beneficiaries that have State regulations that already
require upgrades to 1992-2009 engine model year trucks at the time of the
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proposed Eligible Mitigation Action, Eligible Trucks shall also include 2010-
2012 engine model year class 4-7 Local Freight trucks.
b. Eligible Medium Trucks must be Scrapped.
c. Eligible Medium Trucks may be Repowered with any new diesel or Alternate
Fueled or All-Electric engine, or may be replaced with any new diesel or
Alternate Fueled or All-Electric vehicle, with the engine model year in which
the Eligible Medium Trucks Mitigation Action occurs or one engine model year
prior.
d. For Non-Government Owned Eligible Medium Trucks, Beneficiaries may draw
funds from the Trust in the amount of:
1. Up to 40% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 25% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
3. Up to 75% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 75% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
e. For Government Owned Eligible Medium Trucks, Beneficiaries may draw
funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new diesel or Alternate
Fueled (e.g. CNG, propane, Hybrid) engine, including the costs of
installation of such engine.
2. Up to 100% of the cost of a new diesel or Alternate Fueled (e.g. CNG,
propane, Hybrid) vehicle.
3. Up to 100% of the cost of a Repower with a new All-Electric engine,
including the costs of installation of such engine, and charging
infrastructure associated with the new All-Electric engine.
4. Up to 100% of the cost of a new All-Electric vehicle, including
charging infrastructure associated with the new All-Electric vehicle.
7. Airport Ground Support Equipment
a. Eligible Airport Ground Support Equipment includes:
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1. Tier 0, Tier 1, or Tier 2 diesel powered airport ground support
equipment; and
2. Uncertified, or certified to 3 g/bhp-hr or higher emissions, spark
ignition engine powered airport ground support equipment.
b. Eligible Airport Ground Support Equipment must be Scrapped.
c. Eligible Airport Ground Support Equipment may be Repowered with an All-
Electric engine, or may be replaced with the same Airport Ground Support
Equipment in an All-Electric form.
d. For Non-Government Owned Eligible Airport Ground Support Equipment,
Beneficiaries may only draw funds from the Trust in the amount of:
1. Up to 75% of the cost of a Repower with a new All-Electric engine,
including costs of installation of such engine, and charging
infrastructure associated with such new All-Electric engine.
2. Up to 75% of the cost of a new All-Electric Airport Ground Support
Equipment, including charging infrastructure associated with such new
All-Electric Airport Ground Support Equipment.
e. For Government Owned Eligible Airport Ground Support Equipment,
Beneficiaries may draw funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new All-Electric engine,
including costs of installation of such engine, and charging
infrastructure associated with such new All-Electric engine.
2. Up to 100% of the cost of a new All-Electric Airport Ground Support
Equipment, including charging infrastructure associated with such new
All-Electric Airport Ground Support Equipment.
8. Forklifts and Port Cargo Handling Equipment
a. Eligible Forklifts includes forklifts with greater than 8000 pounds lift
capacity.
b. Eligible Forklifts and Port Cargo Handling Equipment must be Scrapped.
c. Eligible Forklifts and Port Cargo Handling Equipment may be Repowered
with an All-Electric engine, or may be replaced with the same equipment in an
All-Electric form.
d. For Non-Government Owned Eligible Forklifts and Port Cargo Handling
Equipment, Beneficiaries may draw funds from the Trust in the amount of:
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1. Up to 75% of the cost of a Repower with a new All-Electric engine,
including costs of installation of such engine, and charging
infrastructure associated with such new All-Electric engine.
2. Up to 75% of the cost of a new All-Electric Forklift or Port Cargo
Handling Equipment, including charging infrastructure associated with
such new All-Electric Forklift or Port Cargo Handling Equipment.
e. For Government Owned Eligible Forklifts and Port Cargo Handling
Equipment, Beneficiaries may draw funds from the Trust in the amount of:
1. Up to 100% of the cost of a Repower with a new All-Electric engine,
including costs of installation of such engine, and charging
infrastructure associated with such new All-Electric engine.
2. Up to 100% of the cost of a new All-Electric Forklift or Port Cargo
Handling Equipment, including charging infrastructure associated with
such new All-Electric Forklift or Port Cargo Handling Equipment.
9. Light Duty Zero Emission Vehicle Supply Equipment. Each Beneficiary may use up to
fifteen percent (15%) of its allocation of Trust Funds on the costs necessary for, and
directly connected to, the acquisition, installation, operation and maintenance of new light
duty zero emission vehicle supply equipment for projects as specified below. Provided,
however, that Trust Funds shall not be made available or used to purchase or rent real-
estate, other capital costs (e.g., construction of buildings, parking facilities, etc.) or general
maintenance (i.e., maintenance other than of the Supply Equipment).
a. Light duty electric vehicle supply equipment includes Level 1, Level 2 or fast
charging equipment (or analogous successor technologies) that is located in a
public place, workplace, or multi-unit dwelling and is not consumer light duty
electric vehicle supply equipment (i.e., not located at a private residential
dwelling that is not a multi-unit dwelling).
b. Light duty hydrogen fuel cell vehicle supply equipment includes hydrogen
dispensing equipment capable of dispensing hydrogen at a pressure of 70
megapascals (MPa) (or analogous successor technologies) that is located in a
public place.
c. Subject to the 15% limitation above, each Beneficiary may draw funds from
the Trust in the amount of:
1. Up to 100% of the cost to purchase, install and maintain eligible light
duty electric vehicle supply equipment that will be available to the
public at a Government Owned Property.
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2. Up to 80% of the cost to purchase, install and maintain eligible light
duty electric vehicle supply equipment that will be available to the
public at a Non-Government Owned Property.
3. Up to 60% of the cost to purchase, install and maintain eligible light
duty electric vehicle supply equipment that is available at a workplace
but not to the general public.
4. Up to 60% of the cost to purchase, install and maintain eligible light
duty electric vehicle supply equipment that is available at a multi-unit
dwelling but not to the general public.
5. Up to 33% of the cost to purchase, install and maintain eligible light
duty hydrogen fuel cell vehicle supply equipment capable of
dispensing at least 250 kg/day that will be available to the public.
6. Up to 25% of the cost to purchase, install and maintain eligible light
duty hydrogen fuel cell vehicle supply equipment capable of
dispensing at least 100 kg/day that will be available to the public.
10. Diesel Emission Reduction Act (DERA) Option. Beneficiaries may use Trust Funds for
their non-federal voluntary match, pursuant to Title VII, Subtitle G, Section 793 of the
DERA Program in the Energy Policy Act of 2005 (codified at 42 U.S.C. § 16133), or
Section 792 (codified at 42 U.S.C. § 16132) in the case of Tribes, thereby allowing
Beneficiaries to use such Trust Funds for actions not specifically enumerated in this
Appendix D-2, but otherwise eligible under DERA pursuant to all DERA guidance
documents available through the EPA. Trust Funds shall not be used to meet the non-
federal mandatory cost share requirements, as defined in applicable DERA program
guidance, of any DERA grant.
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Eligible Mitigation Action Administrative Expenditures
For any Eligible Mitigation Action, Beneficiaries may use Trust Funds for actual administrative
expenditures (described below) associated with implementing such Eligible Mitigation Action,
but not to exceed 15% of the total cost of such Eligible Mitigation Action. The 15% cap
includes the aggregated amount of eligible administrative expenditures incurred by the
Beneficiary and any third-party contractor(s).
1. Personnel including costs of employee salaries and wages, but not consultants.
2. Fringe Benefits including costs of employee fringe benefits such as health insurance, FICA,
retirement, life insurance, and payroll taxes.
3. Travel including costs of Mitigation Action-related travel by program staff, but does not
include consultant travel.
4. Supplies including tangible property purchased in support of the Mitigation Action that will
be expensed on the Statement of Activities, such as educational publications, office
supplies, etc. Identify general categories of supplies and their Mitigation Action costs.
5. Contractual including all contracted services and goods except for those charged under
other categories such as supplies, construction, etc. Contracts for evaluation and consulting
services and contracts with sub-recipient organizations are included.
6. Construction including costs associated with ordinary or normal rearrangement and
alteration of facilities.
7. Other costs including insurance, professional services, occupancy and equipment leases,
printing and publication, training, indirect costs, and accounting.
Definitions/Glossary of Terms
“Airport Ground Support Equipment” shall mean vehicles and equipment used at an airport to
service aircraft between flights.
“All-Electric” shall mean powered exclusively by electricity provided by a battery, fuel cell, or
the grid.
“Alternate Fueled” shall mean an engine, or a vehicle or piece of equipment which is powered by
an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g.,
CNG, propane, diesel-electric Hybrid).
“Certified Remanufacture System or Verified Engine Upgrade” shall mean engine upgrades
certified or verified by EPA or CARB to achieve a reduction in emissions.
“Class 4-7 Local Freight Trucks (Medium Trucks)” shall mean trucks, including commercial
trucks, used to deliver cargo and freight (e.g., courier services, delivery trucks, box trucks
moving freight, waste haulers, dump trucks, concrete mixers) with a Gross Vehicle Weight
Rating (GVWR) between 14,001 and 33,000 lbs.
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“Class 4-8 School Bus, Shuttle Bus, or Transit Bus (Buses)” shall mean vehicles with a Gross
Vehicle Weight Rating (GVWR) greater than 14,001 lbs used for transporting people. See
definition for School Bus below.
“Class 8 Local Freight, and Port Drayage Trucks (Eligible Large Trucks)” shall mean trucks with
a Gross Vehicle Weight Rating (GVWR) greater than 33,000 lbs used for port drayage and/or
freight/cargo delivery (including waste haulers, dump trucks, concrete mixers).
“CNG” shall mean Compressed Natural Gas.
“Drayage Trucks” shall mean trucks hauling cargo to and from ports and intermodal rail yards.
“Forklift” shall mean nonroad equipment used to lift and move materials short
distances; generally includes tines to lift objects. Eligible types of forklifts include reach
stackers, side loaders, and top loaders.
“Freight Switcher” shall mean a locomotive that moves rail cars around a rail yard as compared
to a line-haul engine that move freight long distances.
“Generator Set” shall mean a switcher locomotive equipped with multiple engines that can turn
off one or more engines to reduce emissions and save fuel depending on the load it is moving.
“Government” shall mean a State or local government agency (including a school district,
municipality, city, county, special district, transit district, joint powers authority, or port
authority, owning fleets purchased with government funds), and a tribal government or native
village. The term ‘State’ means the several States, the District of Columbia, and the
Commonwealth of Puerto Rico.
“Gross Vehicle Weight Rating (GVWR)” shall mean the maximum weight of the vehicle, as
specified by the manufacturer. GVWR includes total vehicle weight plus fluids, passengers, and
cargo.
Class 1: < 6000 lb
Class 2: 6001-10,000 lb
Class 3: 10,001-14,000 lb
Class 4: 14,001-16,000 lb
Class 5: 16,001-19,500 lb
Class 6: 19,501-26,000 lb
Class 7: 26,001-33,000 lb
Class 8: > 33,001 lb
“Hybrid” shall mean a vehicle that combines an internal combustion engine with a battery and
electric motor.
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“Infrastructure” shall mean the equipment used to enable the use of electric powered vehicles
(e.g., electric vehicle charging station).
“Intermodal Rail Yard” shall mean a rail facility in which cargo is transferred from drayage truck
to train or vice-versa.
“Port Cargo Handling Equipment” shall mean rubber-tired gantry cranes, straddle carriers,
shuttle carriers, and terminal tractors, including yard hostlers and yard tractors that operate
within ports.
“Plug-in Hybrid Electric Vehicle (PHEV)” shall mean a vehicle that is similar to a Hybrid but is
equipped with a larger, more advanced battery that allows the vehicle to be plugged in and
recharged in addition to refueling with gasoline. This larger battery allows the car to be driven on
a combination of electric and gasoline fuels.
“Repower” shall mean to replace an existing engine with a newer, cleaner engine or power
source that is certified by EPA and, if applicable, CARB, to meet a more stringent set of engine
emission standards. Repower includes, but is not limited to, diesel engine replacement with an
engine certified for use with diesel or a clean alternate fuel, diesel engine replacement with an
electric power source (grid, battery), diesel engine replacement with a fuel cell, diesel engine
replacement with an electric generator(s) (genset), diesel engine upgrades in Ferries/Tugs with
an EPA Certified Remanufacture System, and/or diesel engine upgrades in Ferries/Tugs with an
EPA Verified Engine Upgrade. All-Electric and fuel cell Repowers do not require EPA or CARB
certification.
“School Bus” shall mean a Class 4-8 bus sold or introduced into interstate commerce for
purposes that include carrying students to and from school or related events. May be Type A-D.
“Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to
specifically cut a 3-inch hole in the engine block for all engines. If any Eligible Vehicle will be
replaced as part of an Eligible project, scrapped shall also include the disabling of the chassis by
cutting the vehicle’s frame rails completely in half.
“Tier 0, 1, 2, 3, 4” shall refer to corresponding EPA engine emission classifications for nonroad,
locomotive and marine engines.
“Tugs” shall mean dedicated vessels that push or pull other vessels in ports, harbors, and inland
waterways (e.g., tugboats and towboats).
“Zero Emission Vehicle (ZEV)” shall mean a vehicle that produces no emissions from the on-
board source of power (e.g., All-Electric or hydrogen fuel cell vehicles).
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APPENDIX D-3 TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
APPENDIX D-3
Certification for Beneficiary Status
Under Environmental Mitigation Trust Agreement
Case 3:15-md-02672-CRB Document 2103-1 Filed 10/25/16 Page 221 of 225
In re Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation,
No. 15-md-2672 (CRB)(JSC) (N.D.Ca.)
1 APPENDIX D-3 TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
APPENDIX D-3
CERTIFICATION FOR BENEFICIARY STATUS
UNDER ENVIRONMENTAL MITIGATION TRUST AGREEMENT
1. Identity of Lead Agency
_______________________________(“Beneficiary”), by and through the Office of the
Governor (or, if not a State, the analogous Chief Executive) of the Appendix D-1 entity on
whose behalf the Certification Form is submitted: (i) hereby identifies
___________________________________ (“Lead Agency”) as the lead agency for purposes of
the Beneficiary’s participation in the Environmental Mitigation Trust (“Trust”) as a Beneficiary;
and (ii) hereby certifies that the Lead Agency has the delegated authority to act on behalf of and
legally bind the Beneficiary for purposes of the Trust.
2. Submission to Jurisdiction
The Beneficiary expressly consents to the jurisdiction of the U.S. District Court for the Northern
District of California for all matters concerning the interpretation or performance of, or any
disputes arising under, the Trust and the Environmental Mitigation Trust Agreement (“Trust
Agreement”). The Beneficiary’s agreement to federal jurisdiction for this purpose shall not be
construed as consent to federal court jurisdiction for any other purpose.
3. Agreement to be Bound by the Trust Agreement and Consent to Trustee Authority
The Beneficiary agrees, without limitation, to be bound by the terms of the Trust Agreement,
including the allocations of the Trust Assets set forth in Appendix D-1 to Appendix D of the
Consent Decree, as such allocation may be adjusted in accordance with the Trust Agreement.
The Beneficiary further agrees that the Trustee has the authorities set forth in the Trust
Agreement, including but not limited to the authority: (i) to approve, deny, request
modifications, or request further information related to any request for funds pursuant to the
Trust Agreement; and (ii) to implement the Trust Agreement in accordance with its terms.
4. Certification of Legal Authority
The Beneficiary certifies that: (i) it has the authority to sign and be bound by this Certification
Form; (ii) the Beneficiary’s laws do not prohibit it from being a Trust Beneficiary; (iii) either (a)
the Beneficiary’s laws do not prohibit it from receiving or directing payment of funds from the
Trust, or (b) if the Beneficiary does not have the authority to receive or direct payment of funds
from the Trust, then prior to requesting any funds from the Trust, the Beneficiary shall obtain full
legal authority to receive and/or direct payments of such funds within two years of submitting
this Certification Form; and (iv) if the Beneficiary does not have the authority to receive or direct
payment of funds from the Trust and fails to demonstrate that it has obtained such legal authority
within two years of submitting this Certification Form, it shall become an Excluded Entity under
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In re Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation,
No. 15-md-2672 (CRB)(JSC) (N.D.Ca.)
2 APPENDIX D-3 TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
the Trust Agreement and its initial allocation shall be redistributed among the Beneficiaries
pursuant to subparagraph 5.0.1 of the Trust Agreement.
5. Certification of Legal Compliance and Disposition of Unused Funds
The Beneficiary certifies and agrees that, in connection with all actions related to the Trust and
the Trust Agreement, the Beneficiary has followed and will follow all applicable law and will
assume full responsibility for its decisions in that regard. The Beneficiary further certifies that
all funds received on account of any Eligible Mitigation Action request that are not used for the
Eligible Mitigation Action shall be returned to the Trust for credit to the Beneficiary’s allocation.
6. Waiver of Claims for Injunctive Relief under Environmental or Common Laws
Upon becoming a Beneficiary, the Beneficiary, on behalf of itself and all of its agencies,
departments, offices, and divisions, hereby expressly waives, in favor of the parties to the
Consent Decree (including the Settling Defendants), all claims for injunctive relief to redress
environmental injury caused by the 2.0 Liter Subject Vehicles, whether based on the
environmental or common law within its jurisdiction. This waiver is binding on all agencies,
departments, offices, and divisions of the Beneficiary asserting, purporting to assert, or capable
of asserting such claims. This waiver does not waive, and the Beneficiary expressly reserves, its
rights, if any, to seek fines or penalties. No waiver submitted by any Indian tribe shall be
effective unless and until such Indian tribe actually receives Trust Funds.
7. Publicly Available Information
The Beneficiary certifies that it will maintain and make publicly available all documentation and
records: (i) submitted by it in support of each funding request; and (ii) supporting all
expenditures of Trust Funds by the Beneficiary, each until the Consent Decree Termination Date,
unless the laws of the Beneficiary require a longer record retention period. Together herewith,
the Beneficiary attaches an explanation of: (i) the procedures by which the records may be
accessed, which shall be designed to support access and limit burden for the general public; (ii)
for the Beneficiary Mitigation Plan required under Paragraph 4.1 of the Trust Agreement, the
procedures by which public input will be solicited and considered; and (iii) a description of
whether and the extent to which the certification in this Paragraph 7 is subject to the
Beneficiary’s applicable laws governing the publication of confidential business information and
personally identifiable information.
8. Notice of Availability of Mitigation Action Funds
The Beneficiary certifies that, not later than 30 Days after being deemed a Beneficiary pursuant
to the Trust Agreement, the Beneficiary will provide a copy of the Trust Agreement with
Attachments to the U.S. Department of the Interior, the U.S. Department of Agriculture, and any
other Federal agenc y that has custody, control or management of land within or contiguous to the
territorial boundaries of the Beneficiary and has by then notified the Beneficiary of its interest
hereunder, explaining that the Beneficiary may request Eligible Mitigation Action funds for use
Case 3:15-md-02672-CRB Document 2103-1 Filed 10/25/16 Page 223 of 225
In re Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation,
No. 15-md-2672 (CRB)(JSC) (N.D.Ca.)
3 APPENDIX D-3 TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
on lands within that Federal agency’s custody, control or management (including but not limited
to Clean Air Act Class I and II areas), and setting forth the procedures by which the Beneficiary
will review, consider, and make a written determination upon each such request.
9. Registration of 2.0 Liter Subject Vehicles
The Beneficiary certifies, for the benefit of the parties to the Consent Decree (including the
Settling Defendants) and the owners from time-to-time of 2.0 Liter Subject Vehicles, that upon
becoming a Beneficiary, the Beneficiary:
(a) Shall not deny registration to any Subject Vehicle based solely on:
i. The presence of a defeat device or AECD covered by the resolution of
claims in the Consent Decree; or
ii. Emissions resulting from such a defeat device or AECD; or
iii. The availability of an Approved Emissions Modification or the Buyback,
Lease Termination, and Owner/Lessee Payment Program.
(b) Shall not deny registration to any Subject Vehicle that has received an Approved
Emissions Modification based solely on:
i. The fact that the vehicle received the Approved Emissions Modification;
or
ii. Emissions resulting from the modification (including but not limited to the
anticipated emissions described in Appendix B to the Consent Decree); or
iii. Other emissions-related vehicle characteristics that result from the
modification; or
iv. The availability of an Approved Emissions Modification or the Buyback,
Lease Termination, and Owner/Lessee Payment Program.
(c) May identify 2.0 Liter Subject Vehicles as having received, or not received, the
Approved Emissions Modification on the basis of VIN-specific information
provided to the Beneficiary by the Settling Defendants.
(d) Notwithstanding the foregoing, the Beneficiary may deny registration to any
Subject Vehicle on the basis that the Subject Vehicle fails to meet EPA’s or the
Beneficiary’s failure criteria for the onboard diagnostic (OBD) inspection; or on
other grounds authorized or required under applicable federal regulations
(including an approved State Implementation Plan) or under Section 209 or 177 of
the Clean Air Act and not explicitly excluded in subparagraphs 9(a)-(b).
Case 3:15-md-02672-CRB Document 2103-1 Filed 10/25/16 Page 224 of 225
In re Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation,
No. 15-md-2672 (CRB)(JSC) (N.D.Ca.)
4 APPENDIX D-3 TO
PARTIAL CONSENT DECREE
MDL No. 2672 CRB (JSC)
FOR THE GOVERNOR (or, if not a State, the analogous Chief Executive):
Signature: ___________________________
Name: ___________________________
Title: ___________________________
Date: ___________________________
Location: ___________________________
[FOR OTHER REQUIRED SIGNATORIES]:
Signature: ___________________________
Name: ___________________________
Title: ___________________________
Date: ___________________________
Location: ___________________________
[FOR OTHER REQUIRED SIGNATORIES]:
Signature: ___________________________
Name: ___________________________
Title: ___________________________
Date: ___________________________
Location: ___________________________
Case 3:15-md-02672-CRB Document 2103-1 Filed 10/25/16 Page 225 of 225