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SACRAMENTO — Richard and Millie Hoagland had a “very sick truck,” a smoke-belching big rig they knew would not pass a smog inspection. 

They faced some unpleasant options: Come up with $27,000 to replace the engine or go out of business. 

Then the government came to the rescue. 

The Hoaglands, who run a one-truck hauling company in the Sacramento suburb of Elk Grove, were able to get $20,500 from a state program to put a rebuilt, cleaner-running 1989 engine in their rig. 

“Twenty-seven thousand would have been completely out of our range,” Millie Hoagland said. 

The Hoaglands and their truck were on hand Tuesday for a ceremony to kick off an expanded version of the program that helped them — a $95 million effort to reduce diesel pollution in the San Joaquin Valley and the Sacramento metropolitan area. 

Both regions are facing federal sanctions in the form of lost highway construction money if they don’t meet clean air requirements. 

The expanded program stems from a bill by Assemblyman Darrell Steinberg, D-Sacramento, that allocated $50 million for the Sacramento region program and $25 million for the San Joaquin Valley. 

Sacramento officials are chipping in another $20 million for their effort. 

The programs will offer grants to owners of trucks and buses to help replace older engines, install pollution-reducing catalysts, make mechanical changes needed to use cleaner-burning fuel or buy a new vehicle with engines that are cleaner than currently required. 

The San Joaquin Valley program will also offer grants to clean up off-road diesel-powered vehicles, such as farm equipment, said Josette Merced Bello, a spokeswoman for the San Joaquin Valley Pollution Control District. 

Tom Swenson, a program coordinator for the Sacramento Metropolitan Air Quality Management District, says the program is targeting trucks and buses because of the relatively high amounts of pollution they emit. 

The Sacramento program hopes to eliminate three tons of oxides of nitrogen, a key ingredient in smog, by 2005 by reducing emissions from up to 6,000 vehicles, he said. 

Alan Lloyd, chairman of the state Air Resources Board, said the Sacramento-San Joaquin program would complement a new ARB program requiring soot-catching filters on diesel engines. 

“We need both the carrot and the stick approach,” Lloyd said. “This is a wonderful example of the carrot.” 

Martin Tuttle, executive director of the Sacramento Area Council of Governments, said the Sacramento-San Joaquin program could become a national or international model. 

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On the Net: Read the bill, AB2511, at http://www.sen.ca.gov 

Read about the Sacramento program at http://www.sacog.org/secat