California Air Resources Board

Project Goals

The goal of the Truck Loan Assistance Program was to help small-business fleet owners affected by CARB’s In-Use Truck and Bus Regulation by providing financing opportunities for upgrading their fleets with newer, compliant heavy-duty trucks and equipment. The program created financing opportunities for truck owners who fell below conventional lending criteria and were unable to qualify for traditional financing at reasonable rates. The interest rate in the program was capped at 20 percent. However, the average interest rate for issued loans was about 13 percent.

The program primarily reduced criteria and toxic air contaminant emissions by helping small-business truckers secure financing to purchase newer trucks to comply with the In-Use Truck and Bus Regulation. For many small fleets the Truck Loan Assistance Program offered the only viable option to achieve compliance with the regulation.

Guiding Legislation/Policy Drivers

Funding for the Truck Loan Assistance Program was from the Air Quality Improvement Program (AQIP). AQIP is a voluntary incentive program administered by CARB to reduce smog and diesel particulate pollution, with concurrent reductions in greenhouse gas (GHG) emissions. AQIP was createdunder the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (AB 118, Núñez, Chapter 750, Statutes of 2007). Originally scheduled to sunset in 2015, the passage of AB 8 (Perea, Chapter 401, Statutes of 2013) extended the funding for AB 118 programs until January 1, 2024.

CARB adopted regulations that establish the administrative procedures for implementing AQIP. As required in Health and Safety Code (HSC) Section 44274(a), the Board adopted regulatory guidelines in 2009. Central to the guidelines is the requirement for a Board‑approved annual Funding Plan developed with public input.

Funding for AQIP comes primarily from the smog abatement fee assessed annually by the Department of Motor Vehicles (DMV) during a vehicle’s first 6 registration years in lieu of a biennial smog inspection. Of the $20 collected for each vehicle at the time of annual registration, $4 is allocated to CARB for AQIP through the end of 2023 (HSC 44060.5). A small portion of AQIP funding comes from 2 additional sources: an initial registration fee for new watercraft and a special equipment identification plate fee for certain types of equipment. The fees identified above generate approximately $25‑$30 million on an annual basis.

Project Funding/Allocations/History

The table below provides a summary of the AQIP funding provided to the Truck Loan Assistance Program starting from inception in FY 2008-09 through FY 2022-23.

¹There were no funds in FY 09-10, FY 10-11, FY 11-12, and FY 20-21 so these years are omitted

²Funding allocated to the loan program from other sources besides AQIP: $15 million in CARB funds in FY 17-18. $10 million in FY 13-14 from the Vehicle Inspection and Repair Fund