82R10629 JAM-F
By: Williams S.B. No. 20
A BILL TO BE ENTITLED
AN ACT
relating to a grant program for certain natural gas motor vehicles.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 386.252(a), Health and Safety Code, as
amended by Chapters 1125 (H.B. 1796) and 1232 (S.B. 1759), Acts of
the 81st Legislature, Regular Session, 2009, is reenacted and
amended to read as follows:
(a) Money in the fund may be used only to implement and
administer programs established under the plan and shall be
allocated as follows:
(1) for the diesel emissions reduction incentive
program, 87.5 percent of the money in the fund, of which:
(A) not more than four percent may be used for the
clean school bus program;
(B) not more than 10 percent may be used for
on-road diesel purchase or lease incentives; [and]
(C) a specified amount may be used for the new
technology implementation grant program, from which a defined
amount may be set aside for electricity storage projects related to
renewable energy;
(D) five percent shall be used for the clean
fleet program;
(E) not less than 16 percent shall be used for the
natural gas vehicle rebate program; and
(F) not more than four percent may be used to
provide grants for natural gas fueling stations under Section
393.009;
(2) for the new technology research and development
program, nine percent of the money in the fund, of which:
(A) up to $200,000 is allocated for a health
effects study;
(B) $500,000 is to be deposited in the state
treasury to the credit of the clean air account created under
Section 382.0622 to supplement funding for air quality planning
activities in affected counties;
(C) not less than 20 percent is to be allocated
each year to support research related to air quality as provided by
Section 387.010; and
(D) the balance is allocated each year to the
commission to be used to:
(i) implement and administer the new
technology research and development program for the purpose of
identifying, testing, and evaluating new emissions-reducing
technologies with potential for commercialization in this state and
to facilitate their certification or verification; and
(ii) contract with the Energy Systems
Laboratory at the Texas Engineering Experiment Station for $216,000
annually for the development and annual computation of creditable
statewide emissions reductions obtained through wind and other
renewable energy resources for the state implementation plan; and
(3) two percent is allocated to the commission and 1.5
percent is allocated to the laboratory for administrative costs
incurred by the commission and the laboratory.
SECTION 2. Subtitle C, Title 5, Health and Safety Code, is
amended by adding Chapter 393 to read as follows:
CHAPTER 393. TEXAS NATURAL GAS VEHICLE GRANT PROGRAM
Sec. 393.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Commission on
Environmental Quality.
(2) "Executive director" means the executive director
of the Texas Commission on Environmental Quality.
(3) "Heavy-duty motor vehicle" means a motor vehicle
with:
(A) a gross vehicle weight rating of more than
10,000 pounds; and
(B) an engine certified to the United States
Environmental Protection Agency's standards for heavy-duty
engines.
(4) "Incremental cost" has the meaning assigned by
Section 386.001.
(5) "Motor vehicle" has the meaning assigned by
Section 386.151.
(6) "Natural gas vehicle" means a motor vehicle that
receives not less than 75 percent of its power from compressed or
liquefied natural gas.
(7) "Program" means the Texas natural gas vehicle
grant program established under this chapter.
Sec. 393.002. PROGRAM. The commission shall establish and
administer the Texas natural gas vehicle grant program to encourage
an entity that has a heavy-duty motor vehicle to repower the vehicle
with a natural gas engine or replace the vehicle with a natural gas
vehicle. Under the program, the commission shall provide grants
for eligible heavy-duty motor vehicles to offset the incremental
cost for the entity of repowering or replacing the heavy-duty motor
vehicle.
Sec. 393.003. QUALIFYING VEHICLES. (a) A vehicle is a
qualifying vehicle that may be considered for a grant under the
program if during the calendar year the entity:
(1) purchased or leased the vehicle as a new on-road
heavy-duty motor vehicle that:
(A) is a natural gas vehicle;
(B) is certified to current federal emissions
standards;
(C) replaces an on-road heavy-duty motor vehicle
of the same weight classification and use; and
(D) is powered by an engine certified to emit not
more than 0.2 grams of nitrogen oxides per brake horsepower hour; or
(2) repowered the on-road heavy-duty motor vehicle to
a natural gas vehicle powered by a natural gas engine that:
(A) is certified to current federal emissions
standards; and
(B) is certified to emit not more than 0.2 grams
of nitrogen oxides per brake horsepower hour.
(b) A heavy-duty motor vehicle is not a qualifying vehicle
if the vehicle or the natural gas engine powering the vehicle:
(1) has been used as a qualifying vehicle to receive a
grant under this chapter for a previous reporting period or by
another entity; or
(2) has received a similar grant or tax credit in
another jurisdiction if that grant or tax credit program is relied
on for credit in the state implementation plan.
Sec. 393.004. APPLICATION FOR GRANT. (a) Only an entity
operating in this state that operates a heavy-duty motor vehicle
may apply for and receive a grant under this chapter.
(b) An application for a grant under this chapter must be
made on a form provided by the commission and must contain the
information required by the commission.
(c) The commission, after consulting stakeholders, shall:
(1) simplify the application form; and
(2) minimize, to the extent feasible, documentation
required for an application.
Sec. 393.005. ELIGIBILITY FOR GRANTS. (a) The commission
by rule shall establish criteria for prioritizing qualifying
vehicles eligible to receive grants under this chapter. The
commission shall review and revise the criteria as appropriate.
(b) To be eligible for a grant under the program:
(1) the use of the qualifying vehicle must be
projected to result in a reduction in emissions of nitrogen oxides
of at least 25 percent as compared to the heavy-duty motor vehicle
or engine being replaced, based on:
(A) the baseline emission level set by the
commission under Subsection (g); and
(B) the certified emission rate of the new
vehicle; and
(2) the qualifying vehicle must:
(A) replace a heavy-duty motor vehicle that:
(i) is an on-road vehicle that has been
owned or leased and registered and operated by the applicant in
Texas for at least the two years immediately preceding the
submission of a grant application;
(ii) satisfies any minimum average annual
mileage or fuel usage requirements established by the commission;
(iii) satisfies any minimum percentage of
annual usage requirements established by the commission; and
(iv) is in operating condition and has at
least two years of remaining useful life, as determined in
accordance with criteria established by the commission; or
(B) be a heavy-duty motor vehicle repowered with
a natural gas engine that:
(i) is installed in an on-road vehicle that
has been owned or leased and registered and operated by the
applicant in Texas for at least the two years immediately preceding
the submission of a grant application;
(ii) satisfies any minimum average annual
mileage or fuel usage requirements established by the commission;
(iii) satisfies any minimum percentage of
annual usage requirements established by the commission; and
(iv) at the time of the vehicle's repowering
with a natural gas engine, the vehicle was in operating condition
and had at least two years of remaining useful life, as determined
in accordance with criteria established by the commission.
(c) As a condition of receiving a grant, the qualifying
vehicle must be continuously owned or leased and registered and
operated in the state by the grant recipient until the earlier of
the fourth anniversary of the date of reimbursement of the
grant-funded expenses or until the date the vehicle has been in
operation for 400,000 miles. Not less than 75 percent of the annual
use of the qualifying vehicle, either mileage or fuel use as
determined by the commission, must occur in the counties any part of
which are included in the area described by Section 393.010(a).
(d) The commission shall include and enforce the usage
provisions in the grant contracts. The commission shall monitor
compliance with the ownership, leasing, and usage requirements,
including submission of reports on at least an annual basis, or more
frequently as determined by the commission.
(e) The commission by contract may require the return of all
or a portion of grant funds for a grant recipient's noncompliance
with the usage and percentage of use requirements under this
section.
(f) A heavy-duty motor vehicle or engine replaced under this
program must be rendered permanently inoperable by crushing the
vehicle, by making a hole in the engine block and permanently
destroying the frame of the vehicle, or by another method approved
by the commission that permanently removes the vehicle from
operation in this state. The commission shall establish criteria
for ensuring the permanent destruction of the engine and vehicle.
The commission shall enforce the destruction requirements.
(g) The commission shall establish baseline emission levels
for emissions of nitrogen oxides for on-road heavy-duty motor
vehicles being replaced by using the emission certification for the
engine or vehicle being replaced. The commission may consider
deterioration of the emission performance of the engine of the
vehicle being replaced in establishing the baseline emission level.
The commission may consider and establish baseline emission rates
for additional pollutants of concern, as determined by the
commission.
(h) Mileage or fuel use requirements established by the
commission under Subsection (b)(2)(A)(ii) may differ by vehicle
weight categories and type of use.
(i) The executive director may waive the requirements of
Subsection (b)(2)(A)(i) on a finding of good cause, including short
lapses in registration or operation due to economic conditions,
seasonal work, or other circumstances.
Sec. 393.006. RESTRICTION ON USE OF GRANT. A recipient of a
grant under this chapter shall use the grant to pay the incremental
costs of the replacement for which the grant is made, which may
include the initial cost of the natural gas vehicle or natural gas
engine and the reasonable and necessary expenses incurred for the
labor needed to install emissions-reducing equipment. The
recipient may not use the grant to pay the recipient's
administrative expenses.
Sec. 393.007. AMOUNT OF GRANT. (a) The commission shall
develop a grant schedule that:
(1) assigns a standardized grant in an amount between
60 and 90 percent of the incremental cost of a natural gas vehicle
purchase, lease, or repowering; and
(2) is based on:
(A) the certified emission level of nitrogen
oxides, or other pollutants as determined by the commission, of the
engine powering the natural gas vehicle;
(B) the overall emissions reduction achieved by
the natural gas vehicle; and
(C) the usage of the natural gas vehicle.
(b) Not less than 50 percent of the total amount of grants
awarded under this chapter for the purchase and repowering of motor
vehicles must be awarded to motor vehicles with a gross vehicle
weight rating of at least 33,001 pounds. The minimum grant
requirement under this subsection does not apply if the commission
does not receive enough grant applications to satisfy the
requirement for motor vehicles described by this subsection that
are eligible to receive a grant under this chapter.
Sec. 393.008. GRANT PROCEDURES. (a) The commission shall
adopt procedures for:
(1) awarding grants under this chapter in the form of
rebates; and
(2) streamlining the grant application, contracting,
reimbursement, and reporting process for qualifying natural gas
vehicle purchases or repowers.
(b) Procedures adopted under this section must:
(1) provide for a listing compiled by the commission
of pre-approved natural gas vehicles powered by natural gas engines
certified to emit not more than 0.2 grams of nitrogen oxides per
brake horsepower hour;
(2) provide a method to calculate the reduction in
emissions of nitrogen oxides, volatile organic compounds, carbon
monoxide, particulate matter, and sulfur compounds for each
replacement or repowering;
(3) assign a standardized rebate amount for each
qualifying vehicle under Section 393.007;
(4) allow for processing rebates on an ongoing
first-come, first-served basis;
(5) provide for contracts between the commission and
participating dealers under Section 393.009;
(6) allow grant recipients to assign their grant funds
to participating dealers to offset the purchase or lease price;
(7) require grant applicants to identify natural gas
fueling stations that are available to fuel the qualifying vehicle
in the area of its use;
(8) provide for payment not later than the 30th day
after the date a grant is approved;
(9) provide for application submission and
application status checks to be made over the Internet; and
(10) consolidate, simplify, and reduce the
administrative work for applicants and the commission associated
with grant application, contracting, reimbursement, and reporting
requirements.
(c) The commission, or its designee, shall oversee the grant
process and is responsible for final approval of any grant.
(d) Grant recipients are responsible for meeting all grant
conditions, including reporting and monitoring as required by the
commission through the grant contract.
Sec. 393.009. PARTICIPATING DEALERS. (a) In this section,
"participating dealer" means a person who:
(1) sells or leases on-road heavy-duty natural gas
vehicles or heavy-duty natural gas engines; and
(2) has satisfied all requirements established by the
commission for participation in the program as a dealer.
(b) A participating dealer must agree to the terms and
conditions of a standardized contract developed by the commission.
(c) A participating dealer shall:
(1) provide information regarding natural gas vehicle
grants to fleet operators;
(2) assist an applicant who purchases or leases a
natural gas vehicle or engine from the dealer with the completion of
the application; and
(3) submit completed applications and documentation
to the commission on behalf of an applicant who purchases or leases
a natural gas vehicle or engine from the dealer.
(d) A participating dealer may not approve a grant.
(e) The commission shall:
(1) maintain and make available to the public online a
list of all qualified dealers; and
(2) establish requirements for participation in the
program by sellers of on-road heavy-duty natural gas vehicles and
natural gas engines.
Sec. 393.010. CLEAN TRANSPORTATION TRIANGLE. (a) To
ensure that natural gas vehicles purchased or leased or repowered
under the program have access to fuel, and to build the foundation
for a self-sustaining market for natural gas vehicles in Texas, the
commission shall award grants to support the development of a
network of natural gas vehicle fueling stations along the
interstate highways between Houston, San Antonio, and the
Dallas-Fort Worth area. In awarding the grants, the commission
shall provide for:
(1) strategically placed natural gas vehicle fueling
stations in and between the Houston, San Antonio, and Dallas-Fort
Worth areas to enable a natural gas vehicle to travel along that
triangular area relying solely on natural gas fuel;
(2) grants to be dispersed through a competitive
bidding process to offset a portion of the cost of installation of
the natural gas dispensing equipment;
(3) contracts that require the recipient stations to
meet operational, maintenance, and reporting requirements as
specified by the commission; and
(4) a listing, to be maintained by the commission and
made available to the public online, of all natural gas vehicle
fueling stations that have received grant funding, including
location and hours of operation.
(b) The commission may not award more than three station
grants to any entity.
(c) Stations funded by grants under this section must be
publicly accessible and located not more than three miles from an
interstate highway system. The commission shall give preference
to:
(1) stations providing both liquefied natural gas and
compressed natural gas at a single location; and
(2) stations located not more than one mile from an
interstate highway system.
(d) To meet the goals of this section, the commission may
solicit grant applications under this section for a new fueling
station in a specific area or location.
(e) Grants made under this section are not subject to the
requirements of Sections 393.002 through 393.008. The commission
shall develop an application package and review applications in
accordance with Sections 386.110 and 386.111.
(f) The commission, in consultation with the natural gas
industry, shall determine the most efficient use of funding for the
station grants under this section to maximize the availability of
natural gas fueling stations.
Sec. 393.011. ADDITIONAL INCENTIVES FOR NATURAL GAS
VEHICLES. The commission shall work with the Texas Department of
Transportation and local transportation authorities to provide
additional incentives for natural gas vehicles such as access to
high occupancy vehicle lanes and preferred parking in urban areas.
Sec. 393.012. ADMINISTRATION OF PROGRAM. The commission
may contract with one or more entities for administration of the
program.
Sec. 393.013. EXPIRATION. This chapter expires August 31,
2017.
SECTION 3. The Texas Commission on Environmental Quality
shall adopt rules and establish procedures under Chapter 393,
Health and Safety Code, as added by this Act, as soon as practicable
after the effective date of this Act.
SECTION 4. To the extent of any conflict, this Act prevails
over another Act of the 82nd Legislature, Regular Session, 2011,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 5. This Act takes effect September 1, 2011.