California Air Resources Board

General Grant FAQs

What is Assembly Bill (AB) 998?

Assembly Bill 998 established the Non-Toxic Dry Cleaning Incentive Program to provide the dry cleaning industry with grant funds to switch from systems using perchloroethylene (Perc), an identified toxic air contaminant and potential human carcinogen, to non-toxic and non-smog forming alternatives. The legislation also establishes a demonstration program to showcase these non-toxic and non-smog forming technologies in the state.

What does AB 998 require?

AB 998 requires the Air Resources Board (ARB) to develop and administer a fee funded grant and demonstration program. The ARB assessed a three-dollar ($3) per gallon fee on the manufacturers and importers of perchloroethylene (Perc) for dry cleaning operations beginning January 1, 2004. This fee increased one dollar ($1) per gallon per year from 2005 through 2013 to twelve dollars ($12) per gallon per year. As required by the legislation, the majority of these funds are used to provide $10,000 grants to assist dry cleaners in switching to non-toxic and non-smog forming cleaning technologies. The balance of funds has been used to establish a demonstration program to showcase these technologies statewide.

What is the Non-Toxic Dry Cleaning Incentive Program?

The California State Legislature enacted Assembly Bill (AB) 998, which establishes the Non Toxic Dry Cleaning Incentive Program. The objective of this program is to provide financial assistance to California dry cleaners who replace their existing perchloroethylene (perc) dry cleaning systems with non-toxic and non-smog forming systems such as water-based and carbon dioxide (CO 2) cleaning systems

What cleaning technologies qualify as non-toxic and non-smog forming?

The following technologies satisfy the non-toxic and non-smog forming dry cleaning system requirement:

• Water-based cleaning systems
• Carbon dioxide (CO₂) cleaning systems

What is water-based cleaning?

Currently, there are four types of water-based cleaning technologies available to California dry cleaners. Those technologies are:

• Professional wet cleaning systems
• Green Jet™ cleaning system
• Cold water cleaning systems
• Green Dry to Dry (D2D)

Professional Wet Cleaning Systems: The professional wet cleaning system is an alternative to dry cleaning for fabrics labeled “dry clean only” and employ the use of specialized computer controlled washers and dryers. The immersion-based washers use a frequency controlled motor to control the rotation of the wash drum which produces a gentle wash action and smoother acceleration and deceleration. The wash program software can determine the appropriate combination of time, water level, water temperature, extraction, and drum rotation. Washers are also designed to mix water with cleaning agents prior to entering the cleaning drum. The dryers used in professional wet cleaning are based on humidity and are able to end the cycle when the desired humidity level in the garments has been achieved. Temperature, drying time, and direction of drum rotation can also be programmed. Finishing equipment includes pressing and tensioning machines. When selecting a professional wet cleaning system under this grant program, the tensioning pants topper and form finisher are required.

Green Jet™ Cleaning System: The Green Jet™ cleaning system cleans and dries garments in a single computerized unit. The cleaning process involves using a mist of water and detergent to clean the garments. The machine is designed to receive a full 45 pound load of garments. It then dehydrates the fabric to remove humidity to reduce surface tension, in order to allow the mechanical action and air jets pulsating to dislodge and remove the non-soluble soil from the garments. The soil is then collected in a lint chamber. The next step in the cycle is to inject a pre-determined amount of water-based cleaning solution through specially designed and placed air jet nozzles to re-hydrate the fabric. After about a pint of solution has been introduced to the load to remove soluble soil, heavy felt pads attached to the ribs and the cylinder absorb the soluble soil. This process is appropriate for cleaning garments that are lightly soiled. After the cleaning process, the unit goes into a conventional dry cycle and then a cool-down cycle.

Cold Water Cleaning Systems: Cold water cleaning systems are similar to traditional wet cleaning systems but incorporate other features. Cold water cleaning systems use chilled water and are designed to minimize shrinkage. The system consists of a washer and a dryer. The washer uses a computer to control the rotation of the cleaning drum in order to minimize agitation while cleaning the garments. The garments that are commonly dry cleaned are processed in icy water and are dried in cold air. The washer is fitted with a refrigerated condenser so it can operate with the water at lower temperature. In the dryer, the garments are partially dried in heated air and cold air, which is generated with a compressor. The garments can be fully dried in the dryer using longer drying cycle.

Green D2D System: The Green D2D System is both a washer and dryer. It cleans and dries garments in a single unit. It uses an advanced high heat moisture control system and steam to remove dirt, stains, allergens, and odors. The machine is designed to wash and dry a 40 pound garment load in 40 minutes. This cleaning technology consumes about 30 percent less water than the standard wet cleaning machines and uses only 23 amps of energy. It requires no cooling tower, chiller, or tensioning equipment.

What is carbon dioxide (CO₂) cleaning?

The CO₂ process is a carbon dioxide-based garment cleaning process that has been developed for use by commercial and retail dry cleaners. It is a high pressure cleaning system utilizing liquid CO₂ and a cleaning solvent. CO₂ is a non-flammable, non-toxic, colorless, tasteless, odorless naturally-occurring gas that, when subjected to pressure, becomes a liquid solvent. The CO₂ used in the garment cleaning process is an industrial by-product from existing operations, such as production of ethanol by fermentation and anhydrous ammonia (fertilizer) production. The CO₂ cleaning process does not produce any new CO₂ and, thus, does not contribute to global warming. The system is closed-loop, with a cleaning chamber, storage unit, distillation and lint trap.

Summary of all qualified technology¹

¹ ARB has not verified or certified the cleaning performance of these systems.
² Tensioning equipment must be purchased with professional wet cleaning systems in
order to be eligible for a grant.

Where can I purchase non-toxic, non-smog forming technologies?

You can go to a dry cleaning equipment distributor to purchase dry cleaning machines. Dry cleaning manufacturers are not based in California. All commercial dry cleaning machines are manufactured out of the country with the exception of a very few water-based cleaning machines. Most of the machines come from Italy, but some come from Germany, China, and Korea. In California there are an estimated 25 dry cleaning equipment distributors. Many of these are very small distributors. About half of these distributors market Southern California and the other half market Northern California. When purchasing a machine, a distributor will assist a dry cleaner in acquiring financing through lending companies they work with that offer loans or leasing programs. ARB has provided a complimentary list of vendors and suppliers of water-based and CO₂ cleaning systems.

What type of financing is available?

In most cases, the dry cleaning machine distributors will direct you to a number of financial institutions who provide loans and leases to dry cleaners. In general, financing can come in the form of a loan, a lease, a cash advance, or even a grant. Below is a brief description for each of the forms of financing.

Loans are available to all facility owners at different interest rates depending on their credit scores, their income, and their debt history. The better the credit score and background check the lower the interest rate. Interest rates can be as low as 8 percent and as high as 18 percent. Currently facility owners will receive a low interest rate if they show a credit score above 700. Those with less than a 700 will be more likely to get a higher interest rate. There have been instances where a facility owner with a credit score between 640 and 700 can qualify for the better interest rate if they show a good steady income and no debt defaults.

Leasingis also available when purchasing a machine. Lending companies will offer a lease-to-own option. Under this program, the leaseholder has the option of purchasing the equipment at the end of the contract for one dollar or in some cases 10 percent of the current value of the equipment. The main difference between a loan and leasing is the tax implication. If leasing the equipment, the equipment write-off is tied to the lease term, which can be shorter than IRS depreciation schedules, resulting in a larger tax deduction each year. With a loan the facility owner may claim a tax deduction for a portion of the loan payment that represents interest and for depreciation which is tied to IRS depreciation schedules. For more details and to verify the tax implication facility owners should consult a tax attorney or specialist. The approval qualifications for a lease are the same as a loan.

Cash Advances will provide a business owner an advance based on future credit card sales. The money is advanced to the business owner by purchasing an agreed amount of future credit card receivables. It is repaid with a small, fixed percentage of owners daily credit card transactions until the advance is satisfied.

Grants are different then loans or leases in that if a dry cleaner qualifies to receive a grant the money is a form of financial aid that does not need to be repaid. Currently there are grants available through the State of California, local government agencies, and local utility companies. A list of available grants and financial assistance can be found at the following website: non-toxic dry cleaning grant program.

Can I be awarded both the non-toxic, non-smog forming grant AND demonstration site grant?

Yes. Depending on when you apply for each grant will determine how much money you will receive. Below are a few options in which you can combine the grants. Regardless of how you combine the grants you must meet the eligibility requirements for each grant.

• If you apply for both grants at the same time and are replacing a perc machine you will receive the most amount of money. For example: $10,000 for replacing a Perc machine and $7,500 for becoming a NEW demonstration site.
• If you apply to a be a demonstration site after you have already received the non-toxic, non-smog forming grant you may apply to the demonstration site grant as an EXISTING installation and receive $1-2,000 on top of the $10,000 you were already awarded.
   

Where can I get more information?

Please visit our website at non-toxic dry cleaning grant program. where you will find additional information on financial assistance to the dry cleaning industry. For information on the Dry Cleaning ATCM requirements please visit our dry cleaning website at Regulatory Information

Non-Toxic, Non-Smog Forming Grant FAQs

What makes me eligible for the non-toxic, non-smog forming grant program?

To be eligible for the non-toxic,non-smog forming grant, an applicant must have a dry cleaning facility located in the State of California. In the event an applicant owns more than one facility, a separate application must be submitted for each facility. The applicant must be currently using a perc dry cleaning system or have switched to a qualifying non-perc technology on or after January 1, 2004 (documentation required). Additionally, the applicant must have no outstanding local air district permit fees or be currently involved in any local air district or ARB enforcement action.

What is the grant award process?

The grant award process is comprised of two components:

1. The grant application
2. The supplemental information form

You will submit the grant application to ARB for preliminary review. Once you are pre-qualified, you will receive a conditional grant award letter with a supplemental information form. At this point, you will need to procure a qualified system, have it installed, and have your existing perc machine removed. The supplemental form would then need to be completed and returned to ARB within 90 days of the receipt of the supplemental form and procurement of new equipment, along with documentation indicating the purchase of a new system and the removal of the perc system.

Applicants who do not provide all of the required documentation or a signed and dated grant application/supplemental information form may be disqualified from receiving the grant. Grant award checks will not be issued until all documentation and a signed supplemental information form have been received.

All applications will be pre-screened for eligibility. Grants will be awarded on a first come, first served basis with priority given to facilities that are located in environmental justice communities of minority or low income populations. In the event a grant application is not approved, ARB will send a letter to the applicant indicating the reason for disapproval. All grant award decisions are final.

What are the conditions in order to receive the grant money?

Please be aware that, in order to receive a grant, all applicants must agree to the following conditions:

1. If the qualifying cleaning system is leased, the applicant is required to exercise the option to purchase the cleaning system under the lease;
2. The applicant agrees not to sell the cleaning system purchased with grant funds unless it is being sold as a physical part of the facility;
3. If facility ownership changes after receiving the grant, the new owner must carry the grant award obligations and maintain all the provisions the prior owner agreed to in accordance to ARB’s grant guidelines;
4. After installation of the cleaning system, if the applicant wants to purchase an additional cleaning system, the applicant must only purchase a qualifying non toxic and non-smog forming system; and
5. For a four year period after receiving the grant, the applicant agrees to respond to any ARB surveys regarding experiences with using the new cleaning system.

Demonstration Site Facility FAQs

What makes me eligible for a demonstration site grant?

To be eligible for a demonstration site grant, an applicant must have a dry cleaning facility located in the State of California. In the event an applicant owns more than one facility, a separate application must be submitted for each facility. Only one application per facility is permitted. The applicant must operate a qualifying non toxic, non-smog forming technology to be eligible for a demonstration site grant. Additionally, the applicant must have no outstanding local air district permit fees or be currently involved in any local air district or ARB enforcement action. Applications will be accepted and processed on a continuous basis. Facilities will be awarded a demonstration site grant based on criteria of participating local air districts and ARB, with priority given to facilities that are switching from Perc and converting to a 100% non-toxic, non-smog forming facility.

Demonstration grant award for NEW installations.

Two types of demonstration grant awards are given. The first type involves dry cleaning facilities who newly replaced their Perc and non-Perc technologies with non-toxic and non-smog forming technologies. Priorities will be given to those facilities who recently replaced their Perc machines with non-toxic and non-smog forming technologies. Such facilities may also be eligible or have received the $10,000 grant award for replacing their Perc machines. The new replacement of other non-Perc technologies is also eligible to become a demonstration site facility.

¹Funds will be awarded only to facilities with newly installed non-toxic, non-smog forming technology for the purposes of becoming an AB 998 grant and demonstration site.
²Award covers a two year demonstration agreement.

Demonstration grant award for EXISTING installations.

Dry cleaning facilities that already have installed non-toxic and non-smog forming technologies are eligible to become existing demonstration site facilities. Many of these existing facilities have been demonstration sites in the past and have been shown to effectively showcase these technologies to other dry cleaners in the state.

¹Funds will be awarded only to facilities operating a non-toxic, non-smog forming technology.
²Award covers a two year demonstration agreement.

What is the demonstration site grant award process?

The demonstration site grant award process is comprised of two components:

1. the demonstration site grant application
2. the demonstration site grant agreement form

The demonstration site grant application needs to be completed and returned to ARB when an applicant is ready to become a demonstration site. After the application is received, a verification process will occur. When an applicant is pre-qualified, the applicant will receive a conditional demonstration site grant award letter with a demonstration site grant agreement. The demonstration site grant agreement would then need to be completed and returned to ARB within 90 days of the receipt. Applicants who do not provide a signed and dated demonstration site grant application may be disqualified from receiving a demonstration site grant. Demonstration grant award checks will not be issued until verification has been complete.

All applications will be prescreened for eligibility. Demonstration site grants will be awarded with priority given to facilities that are switching from Perc and converting to a 100% non-toxic, non-smog forming technologies, as well as, facilities that are located in environmental justice communities of minority or low income populations. The number of demonstration site grant awards may be limited by funding availability. In the event a demonstration site grant application is not approved, ARB will send a letter to the applicant indicating the reason for disapproval. All demonstration site grant award decisions are final.

What are the conditions in order to receive the demonstration site grant money?

In order to receive a demonstration site grant, the facility must operate a non-toxic and non-smog forming dry cleaning technology (mixed shops would qualify), and all applicants must agree to the following conditions:

1. Commit to a two year agreement;
2. Agree to demonstrate their non-toxic and non-smog forming technology to perspective dry cleaning facility owners;
3. Agree to be available to respond to questions from perspective dry cleaning facility owners, via email, phone calls or site visits;
4. If ARB or a local district would like to organize a workshop, the facility owner would need to agree to work with the ARB/district staff to conduct a workshop at their facility;
5. Agree to be available, as a consultant, to perspective dry cleaning facility owners;
6. Allow ARB and the local districts to make public their facility contact information for perspective dry cleaning facility owners;
7. If facility ownership changes after receiving the grant, the new owner must carry the grant award obligations and maintain all the provisions the prior owner agreed to in accordance to ARB’s grant guidelines;
8. Agree to respond to any ARB surveys regarding experiences with using the new cleaning system.