3M and Volkswagen legal settlement updates

On Monday the Environment and Natural Resources Finance Committee heard presentations by the Minnesota Pollution Control Agency (MPCA) on two large legal settlements that will brings funds into Minnesota to help alleviate environmental damage.

Volkswagen Settlement Mitigation Plan

In 2016, the Volkswagen Corporation was caught violating emissions limits for its diesel engines in cars and SUVs. The federal government took VW to court and won a $15 billion settlement, of which $2.7 billion is to be shared among the states, territories and tribes. Minnesota’s share of that settlement is $47 million. Governor Dayton designated the MPCA to manage the settlement funds, which will be spent over 20 years on projects to offset excess pollution from diesel vehicles.

The federal court limits spending of the funds to specific types of diesel vehicles and equipment, such as heavy-duty trucks, buses, locomotives, boats, airport equipment, and forklifts, and requires that these vehicles be replaced with new vehicles or engines that produce far less pollution. Up to 15% of the funds may be used for electric-vehicle charging infrastructure. States must submit spending plans that meet court-ordered requirements, to be approved by the court-appointed trustee, Wilmington Trust in Delaware, before a state can begin making grants.

Minnesota is working on a 3-phase draft plan. Under the draft proposal, Phase I distributes 25% of total funds, or $11 million, among five categories in 2018-2019: school bus replacement (20%), clean heavy-duty on-road vehicles ($35%), clean heavy-duty off-road equipment (15%), heavy duty electric vehicles (15%), and electric vehicle charging stations. Once the trustee approves the plan, the MPCA will post requests for proposals with details on each grant type. Barring unforeseen issues, the agency anticipates making the first grants within calendar year 2018. More information can be found at: https://www.pca.state.mn.us/air/volkswagen-settlement.

3M Settlement

The State of Minnesota and the 3M Company announced an agreement last month to settle the state’s Natural Resource Damage lawsuit alleging damages to groundwater and natural resources in the Twin Cities east metropolitan area.

Under the settlement agreement, 3M will make an $850 million grant to the state to be used for clean drinking water and natural resource projects, and for the state’s lawsuit expenses. After legal and other expenses are paid, about $720 million will be invested in drinking water and natural resource projects in the Twin Cities east metropolitan region. The grant trustees are the Minnesota Pollution Control Agency (MPCA) and the Minnesota Department of Natural Resources (DNR).

The top priority for investing the grant money is to improve the quality and quantity of drinking water in the east metro area. This includes, but is not limited to, the cities of Afton, Cottage Grove, Lake Elmo, Newport, Oakdale, St. Paul Park, Woodbury, and the townships of Grey Cloud Island and West Lakeland. Funded projects will help provide the region’s 157,000 residents and businesses with clean drinking water to meet current and future needs. The second priority for grant spending is to enhance water resources, wildlife habitat, and outdoor recreation in the east metro area. Also, for the next five years, 3M will pay up to $40 million for short-term drinking water needs out of its own funds, on a reimbursable basis, under the terms of a 2007 consent order. After grant funds are depleted, 3M continues under the consent order to pay for remediation costs and to cover drinking water expenses.

According to the MPCA and DNR trustees, next steps include: continuing to ensure all interim safe drinking water needs are met, identifying potential water quality and natural resource projects through a series of public open houses and working groups, and determining a schedule for reporting progress on investing funds in clean water and natural resource projects. More information can be found at: https://www.pca.state.mn.us/waste/3m-and-pfcs-2018-settlement.