Countdown Begins on Volkswagen Settlement Funds for Cities

In October 2016, the U.S. government approved a $14.7 billion settlement against Volkswagen for violations of the Clean Air Act. As part of the settlement, $2.7 billion was set aside into an Environmental Mitigation Trust and will be given directly to states to fund projects to reduce nitrogen oxide at the local level.

Cities can access these funds to upgrade aging diesel-powered vehicles, install electric vehicle charging stations, or implement other green strategies. The full list of eligible activities and more details about the settlement can be found in a previous blog.

On October 2, the Environmental Mitigation Trust became effective under Wilmington Trust. States now have until December 1 to apply for beneficiary status and get their share of the $2.7 billion. The trustee will then have 60 days, starting from December 1, to inform states about their status as a beneficiary.

For city leaders, these deadlines are crucial. Cities must reach out to their state lead authorities to notify what projects the funds will be used for.

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Once a state has been granted beneficiary status, they have 90 days to submit their Mitigation Action Management Plan. The plans will provide the beneficiary’s goals, categories of eligible actions, a description on how the air quality will improve, and an estimate of reduced emissions. States will work together with local environmental stakeholders from local governments to establish plans for the next 15 years.

While many components of the Mitigation Action Management plans are universal, each state will create their own process and timeline for accepting public input.  For example, the Colorado Department of Public Health and Environment will be the lead agency to gather public input about how the money should be spent and is working with other state agencies to gather public input.

Other states, such as Indiana, have created documents for cities to submit to receive some of the funds. In general cities will be asked to include the following information:

  • A ten-year implementation plan
  • Potential project partners
  • Specific details about what the money will be used for (i.e. types of vehicles to rehab, or buy new, etc.)
  • A proposed budget detailing each planned expense including administrative costs
  • How the funds will be used to mitigate NOx emissions

After the approval of the Mitigation Action Management Plan has been made public and available, states can begin submitting funding requests.  The trustee must act upon funding requests within 60 days of receipt, and either approve, deny or request changes. Therefore, beneficiaries should expect to have access to trust funds by April 2018.

Cities, don’t let this unique opportunity pass by. Contact your lead state agency soon about the projects you would like to see in your community. For more information and details on the settlement and its associated timelines, visit

lasorsa_domenick_8-17-16__4__720.jpgAbout the Author: Domenick Lasorsa is a graduate student intern for the Federal Advocacy and Center for City Solutions team at National League of Cities. He is finishing his master’s degree in Public Service at the University of Arkansas Clinton School of Public Service.