Texas 2017 - 85th Regular

Texas House Bill HB1979 Compare Versions

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1	1	By: Landgraf H.B. No. 1979
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the Texas emissions reduction plan and other related
7	7	programs and measures to reduce emissions.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Sections 2158.004(a), (b), (c), and (d),
10	10	Government Code, are amended to read as follows:
11	11	(a) A state agency operating a fleet of more than 15
12	12	vehicles, excluding law enforcement and emergency vehicles, may not
13	13	purchase or lease a motor vehicle unless that vehicle uses
14	14	compressed natural gas, liquefied natural gas, liquefied petroleum
15	15	gas, methanol or methanol/gasoline blends of 85 percent or greater,
16	16	ethanol or ethanol/gasoline blends of 85 percent or greater,
17	17	biodiesel or biodiesel/diesel blends of 20 percent or greater,
18	18	hydrogen fuel cells, or electricity, including electricity to power
19	19	a plug-in hybrid electric motor vehicle.
20	20	(b) A state agency may obtain equipment or refueling
21	21	facilities necessary to operate vehicles using compressed natural
22	22	gas, liquefied natural gas, liquefied petroleum gas, methanol or
23	23	methanol/gasoline blends of 85 percent or greater, ethanol or
24	24	ethanol/gasoline blends of 85 percent or greater, biodiesel or
25	25	biodiesel/diesel blends of 20 percent or greater, hydrogen fuel
26	26	cells, or electricity, including electricity to power a plug-in
27	27	hybrid electric motor vehicle:
28	28	(1) by purchase or lease as authorized by law;
29	29	(2) by gift or loan of the equipment or facilities; or
30	30	(3) by gift or loan of the equipment or facilities or
31	31	by another arrangement under a service contract for the supply of
32	32	compressed natural gas, liquefied natural gas, liquefied petroleum
33	33	gas, methanol or methanol/gasoline blends of 85 percent or greater,
34	34	ethanol or ethanol/gasoline blends of 85 percent or greater,
35	35	biodiesel or biodiesel/diesel blends of 20 percent or greater,
36	36	hydrogen fuel cells, or electricity, including electricity to power
37	37	a plug-in hybrid electric motor vehicle.
38	38	(c) If the equipment or facilities are donated, loaned, or
39	39	provided through another arrangement with the supplier of
40	40	compressed natural gas, liquefied natural gas, liquefied petroleum
41	41	gas, methanol or methanol/gasoline blends of 85 percent or greater,
42	42	ethanol or ethanol/gasoline blends of 85 percent or greater,
43	43	biodiesel or biodiesel/diesel blends of 20 percent or greater,
44	44	hydrogen fuel cells, or electricity, including electricity to power
45	45	a plug-in hybrid electric motor vehicle, the supplier is entitled
46	46	to recoup its actual cost of donating, loaning, or providing the
47	47	equipment or facilities through its fuel charges under the supply
48	48	contract.
49	49	(d) The commission may waive the requirements of this
50	50	section for a state agency on receipt of certification supported by
51	51	evidence acceptable to the commission that:
52	52	(1) the agency's vehicles will be operating primarily
53	53	in an area in which neither the agency nor a supplier has or can
54	54	reasonably be expected to establish adequate refueling for
55	55	compressed natural gas, liquefied natural gas, liquefied petroleum
56	56	gas, methanol or methanol/gasoline blends of 85 percent or greater,
57	57	ethanol or ethanol/gasoline blends of 85 percent or greater,
58	58	biodiesel or biodiesel/diesel blends of 20 percent or greater,
59	59	hydrogen fuel cells, or electricity, including electricity to power
60	60	a plug-in hybrid electric motor vehicle; or
61	61	(2) the agency is unable to obtain equipment or
62	62	refueling facilities necessary to operate vehicles using
63	63	compressed natural gas, liquefied natural gas, liquefied petroleum
64	64	gas, methanol or methanol/gasoline blends of 85 percent or greater,
65	65	ethanol or ethanol/gasoline blends of 85 percent or greater,
66	66	biodiesel or biodiesel/diesel blends of 20 percent or greater,
67	67	hydrogen fuel cells, or electricity, including electricity to power
68	68	a plug-in hybrid electric motor vehicle, at a projected cost that is
69	69	reasonably expected to be no greater than the net costs of continued
70	70	use of conventional gasoline or diesel fuels, measured over the
71	71	expected useful life of the equipment or facilities supplied.
72	72	SECTION 2. Subchapter A, Chapter 2158, Government Code, is
73	73	amended by adding Section 2158.0051 to read as follows:
74	74	Sec. 2158.0051. ALTERNATIVE FUEL FLEETS. (a)
75	75	Notwithstanding the purchase requirements of Section 2158.004, it
76	76	is the intent of this state that:
77	77	(1) the vehicle fleet of a state agency that operates a
78	78	fleet of more than 15 motor vehicles, subject to the availability of
79	79	funds, shall be replaced with motor vehicles that use compressed
80	80	natural gas, liquefied natural gas, liquefied petroleum gas,
81	81	hydrogen fuel cells, or electricity, including both fully electric
82	82	motor vehicles and plug-in hybrid electric motor vehicles;
83	83	(2) a county or municipality that operates a vehicle
84	84	fleet of more than 15 motor vehicles is authorized, but is not
85	85	required, to replace the fleet with motor vehicles that use
86	86	compressed natural gas, liquefied natural gas, liquefied petroleum
87	87	gas, hydrogen fuel cells, or electricity, including both fully
88	88	electric motor vehicles and plug-in hybrid electric motor vehicles;
89	89	and
90	90	(3) motor vehicles of a state agency, county, or
91	91	municipality described by Subdivisions (1) and (2) that are capable
92	92	of using fuels described by those subdivisions be primarily
93	93	operated with those fuels rather than conventional gasoline or
94	94	diesel fuels.
95	95	(b) In complying with Subsection (a), a state agency to
96	96	which this section applies shall prioritize:
97	97	(1) the purchase or lease of new motor vehicles,
98	98	including new motor vehicles that are converted to operate on an
99	99	alternative fuel described by Subsection (a)(1), when replacing
100	100	vehicles or adding vehicles to the fleet;
101	101	(2) the purchase of new motor vehicles, including new
102	102	motor vehicles that are converted to operate on an alternative fuel
103	103	described by Subsection (a)(1), to replace vehicles that have the
104	104	highest total mileage and do not use a fuel described by Subsection
105	105	(a)(1); and
106	106	(3) to the extent feasible, obtaining, whether by
107	107	purchase, purchase and conversion, or lease, motor vehicles that
108	108	use compressed natural gas, liquefied natural gas, or liquefied
109	109	petroleum gas.
110	110	(c) Subsection (a)(1) does not apply to law enforcement or
111	111	emergency vehicles.
112	112	SECTION 3. Section 386.001(3), Health and Safety Code, is
113	113	amended to read as follows:
114	114	(3) "Commission" means the Texas [Natural Resource
115	115	Conservation] Commission on Environmental Quality.
116	116	SECTION 4. Section 386.002, Health and Safety Code, is
117	117	amended to read as follows:
118	118	Sec. 386.002. EXPIRATION. This chapter expires on the last
119	119	day of the state fiscal biennium during which the commission
120	120	publishes in the Texas Register certification that, with respect to
121	121	each national ambient air quality standard for ozone under 40
122	122	C.F.R. Section 81.344, the United States Environmental Protection
123	123	Agency has, for each designated area under that section:
124	124	(1) designated the area as attainment or
125	125	unclassifiable; or
126	126	(2) approved a redesignation substitute making a
127	127	finding of attainment for the area [August 31, 2019].
128	128	SECTION 5. Section 386.051(b), Health and Safety Code, is
129	129	amended to read as follows:
130	130	(b) Under the plan, the commission and the comptroller shall
131	131	provide grants or other funding for:
132	132	(1) the diesel emissions reduction incentive program
133	133	established under Subchapter C, including for infrastructure
134	134	projects established under that subchapter;
135	135	(2) the motor vehicle purchase or lease incentive
136	136	program established under Subchapter D;
137	137	(3) the air quality research support program
138	138	established under Chapter 387;
139	139	(4) the clean school bus program established under
140	140	Chapter 390;
141	141	(5) the new technology implementation grant program
142	142	established under Chapter 391;
143	143	(6) the regional air monitoring program established
144	144	under Section 386.252(a);
145	145	(7) a health effects study as provided by Section
146	146	386.252(a);
147	147	(8) air quality planning activities as provided by
148	148	Section 386.252(d) [386.252(a)];
149	149	(9) a contract with the Energy Systems Laboratory at
150	150	the Texas A&M Engineering Experiment Station for computation of
151	151	creditable statewide emissions reductions as provided by Section
152	152	386.252(a) [386.252(a)(14)];
153	153	(10) the clean fleet program established under Chapter
154	154	392;
155	155	(11) the alternative fueling facilities program
156	156	established under Chapter 393;
157	157	(12) the natural gas vehicle grant program [and clean
158	158	transportation triangle program] established under Chapter 394;
159	159	(13) other programs the commission may develop that
160	160	lead to reduced emissions of nitrogen oxides, particulate matter,
161	161	or volatile organic compounds in a nonattainment area or affected
162	162	county;
163	163	(14) other programs the commission may develop that
164	164	support congestion mitigation to reduce mobile source ozone
165	165	precursor emissions; [and]
166	166	(15) the drayage truck incentive program established
167	167	under Subchapter D-1; and
168	168	(16) the governmental alternative fuel fleet grant
169	169	program established under Chapter 395.
170	170	SECTION 6. Sections 386.0515(a) and (c), Health and Safety
171	171	Code, are amended to read as follows:
172	172	(a) In this section:
173	173	(1) "Agricultural [, "agricultural] product
174	174	transportation" means the transportation of a raw agricultural
175	175	product from the place of production using a heavy-duty truck to:
176	176	(A) [(1)] a nonattainment area;
177	177	(B) [(2)] an affected county;
178	178	(C) [(3)] a destination inside the clean
179	179	transportation zone [triangle]; or
180	180	(D) [(4)] a county adjacent to a county described
181	181	by Paragraph (B) [Subdivision (2)] or that contains an area
182	182	described by Paragraph (A) or (C) [Subdivision (1) or (3)].
183	183	(2) "Clean transportation zone" has the meaning
184	184	assigned by Section 393.001.
185	185	(c) The determining factor for eligibility for
186	186	participation in a program established under Chapter 392 or
187	187	[Chapter] 394[, as added by Chapter 892 (Senate Bill No. 385), Acts
188	188	of the 82nd Legislature, Regular Session, 2011,] for a project
189	189	relating to agricultural product transportation is the overall
190	190	accumulative net reduction in emissions of oxides of nitrogen in a
191	191	nonattainment area, an affected county, or the clean transportation
192	192	zone [triangle].
193	193	SECTION 7. Section 386.103, Health and Safety Code, is
194	194	amended by adding Subsection (c) to read as follows:
195	195	(c) To reduce the administrative burden for the commission
196	196	and applicants, the commission may streamline the application
197	197	process by:
198	198	(1) reducing data entry and the copying and recopying
199	199	of applications; and
200	200	(2) developing, maintaining, and periodically
201	201	updating a system to accept applications electronically through the
202	202	commission's Internet website.
203	203	SECTION 8. Section 386.104(j), Health and Safety Code, is
204	204	amended to read as follows:
205	205	(j) The executive director may [shall] waive any
206	206	eligibility requirements established under this section on a
207	207	finding of good cause, which may include a waiver for short lapses
208	208	in registration or operation attributable to economic conditions,
209	209	seasonal work, or other circumstances.
210	210	SECTION 9. Chapter 386, Health and Safety Code, is amended
211	211	by adding Subchapter D to read as follows:
212	212	SUBCHAPTER D. MOTOR VEHICLE PURCHASE OR LEASE INCENTIVE PROGRAM
213	213	Sec. 386.151. DEFINITIONS. In this subchapter:
214	214	(1) "Light-duty motor vehicle" means a motor vehicle
215	215	with a gross vehicle weight rating of less than 10,000 pounds.
216	216	(2) "Motor vehicle" means a self-propelled device
217	217	designed for transporting persons or property on a public highway
218	218	that is required to be registered under Chapter 502, Transportation
219	219	Code.
220	220	Sec. 386.152. APPLICABILITY. The provisions of this
221	221	subchapter relating to a lessee do not apply to a person who rents
222	222	or leases a light-duty motor vehicle for a term of 30 days or less.
223	223	Sec. 386.153. COMMISSION DUTIES REGARDING LIGHT-DUTY MOTOR
224	224	VEHICLE PURCHASE OR LEASE INCENTIVE PROGRAM. (a) The commission
225	225	shall develop a purchase or lease incentive program for new
226	226	light-duty motor vehicles and shall adopt rules necessary to
227	227	implement the program.
228	228	(b) The program shall authorize statewide incentives for
229	229	the purchase or lease of new light-duty motor vehicles powered by
230	230	compressed natural gas, liquefied petroleum gas, or hydrogen fuel
231	231	cell or other electric drives for a purchaser or lessee who agrees
232	232	to register and operate the vehicle in this state for a minimum
233	233	period of time to be established by the commission.
234	234	(c) Only one incentive will be provided for each new
235	235	light-duty motor vehicle. The incentive shall be provided to the
236	236	lessee and not to the purchaser if the motor vehicle is purchased
237	237	for the purpose of leasing the vehicle to another person.
238	238	(d) The commission by rule may revise the standards for the
239	239	maximum unloaded vehicle weight rating and gross vehicle weight
240	240	rating of an eligible vehicle to ensure that all of the vehicle
241	241	weight configurations available under one general vehicle model may
242	242	be eligible for an incentive.
243	243	Sec. 386.154. LIGHT-DUTY MOTOR VEHICLE PURCHASE OR LEASE
244	244	INCENTIVE REQUIREMENTS. (a) A new light-duty motor vehicle powered
245	245	by compressed natural gas or liquefied petroleum gas is eligible
246	246	for a $5,000 incentive if the vehicle:
247	247	(1) has four wheels;
248	248	(2) was originally manufactured to comply with and has
249	249	been certified by an original equipment manufacturer or
250	250	intermediate or final state vehicle manufacturer as complying with,
251	251	or has been altered to comply with, federal motor vehicle safety
252	252	standards, state emissions regulations, and any additional federal
253	253	or state regulations applicable to vehicles powered by compressed
254	254	natural gas or liquefied petroleum gas;
255	255	(3) was manufactured for use primarily on public
256	256	streets, roads, and highways;
257	257	(4) has a dedicated or bi-fuel compressed natural gas
258	258	or liquefied petroleum gas fuel system:
259	259	(A) installed prior to first sale or within 500
260	260	miles of operation of the vehicle following first sale; and
261	261	(B) with a range of at least 125 miles as
262	262	estimated, published, and updated by the United States
263	263	Environmental Protection Agency;
264	264	(5) has, as applicable, a:
265	265	(A) compressed natural gas fuel system that
266	266	complies with the:
267	267	(i) 2013 NFPA 52 Vehicular Gaseous Fuel
268	268	Systems Code; and
269	269	(ii) American National Standard for Basic
270	270	Requirements for Compressed Natural Gas Vehicle (NGV) Fuel
271	271	Containers, commonly cited as "ANSI/CSA NGV2"; or
272	272	(B) liquefied petroleum gas fuel system that
273	273	complies with:
274	274	(i) the 2011 NFPA 58 Liquefied Petroleum
275	275	Gas Code; and
276	276	(ii) Section VII of the 2013 ASME Boiler and
277	277	Pressure Vessel Code; and
278	278	(6) was acquired on or after September 1, 2013, or a
279	279	later date established by the commission, by the person applying
280	280	for the incentive under this subsection and for use or lease by that
281	281	person and not for resale.
282	282	(b) If the commission determines that an updated version of
283	283	a code or standard described by Subdivision (a)(5) is more
284	284	stringent than the version of the code or standard described by
285	285	Subdivision (a)(5), the commission by rule may provide that a
286	286	vehicle for which a person applies for an incentive under
287	287	Subsection (a) is eligible for the incentive only if the vehicle
288	288	complies with the updated version of the code or standard.
289	289	(c) The incentive under Subsection (a) is limited to 1,000
290	290	vehicles for each state fiscal biennium.
291	291	(d) A new light-duty motor vehicle powered by an electric
292	292	drive is eligible for a $2,500 incentive if the vehicle:
293	293	(1) has four wheels;
294	294	(2) was manufactured for use primarily on public
295	295	streets, roads, and highways;
296	296	(3) has not been modified from the original
297	297	manufacturer's specifications;
298	298	(4) has a maximum speed capability of at least 55 miles
299	299	per hour;
300	300	(5) is propelled to a significant extent by an
301	301	electric motor that draws electricity from a hydrogen fuel cell or
302	302	from a battery that:
303	303	(A) has a capacity of not less than four kilowatt
304	304	hours; and
305	305	(B) is capable of being recharged from an
306	306	external source of electricity; and
307	307	(6) was acquired on or after September 1, 2013, or a
308	308	later date as established by the commission, by the person applying
309	309	for the incentive under this subsection and for use or lease by that
310	310	person and not for resale.
311	311	(e) The incentive under Subsection (d) is limited to 2,000
312	312	vehicles for each state fiscal biennium.
313	313	Sec. 386.155. MANUFACTURER'S REPORT. (a) At the beginning
314	314	of but not later than July 1 of each year preceding the vehicle
315	315	model year, a manufacturer of motor vehicles, an intermediate or
316	316	final state vehicle manufacturer, or a manufacturer of compressed
317	317	natural gas or liquefied petroleum gas systems shall provide to the
318	318	commission a list of the new vehicle or natural gas or liquefied
319	319	petroleum gas systems models that the manufacturer intends to sell
320	320	in this state during that model year that meet the incentive
321	321	requirements established under Section 386.154. The manufacturer
322	322	or installer may supplement the list provided to the commission
323	323	under this section as necessary to include additional new vehicle
324	324	models the manufacturer intends to sell in this state during the
325	325	model year.
326	326	(b) The commission may supplement the information provided
327	327	under Subsection (a) with additional information on available
328	328	vehicle models, including information provided by manufacturers or
329	329	installers of systems to convert new motor vehicles to operate on
330	330	natural gas or liquefied petroleum gas before sale as a new vehicle
331	331	or within 500 miles of operation of the vehicle following first
332	332	sale.
333	333	Sec. 386.156. LIST OF ELIGIBLE MOTOR VEHICLES. (a) On
334	334	August 1 of each year the commission shall publish a list of new
335	335	motor vehicle models eligible for inclusion in an incentive under
336	336	this subchapter. The commission shall publish supplements to that
337	337	list as necessary to include additional new vehicle models.
338	338	(b) The commission shall publish the list of eligible motor
339	339	vehicle models on the commission's Internet website.
340	340	Sec. 386.157. LIGHT-DUTY MOTOR VEHICLE PURCHASE OR LEASE
341	341	INCENTIVE. (a) A person who purchases or leases a new light-duty
342	342	motor vehicle described by Section 386.154 and listed under Section
343	343	386.156(a) is eligible to apply for an incentive under this
344	344	subchapter.
345	345	(b) A lease incentive for a new light-duty motor vehicle
346	346	shall be prorated based on a three-year lease term.
347	347	(c) To receive money under an incentive program provided by
348	348	this subchapter, the purchaser or lessee of a new light-duty motor
349	349	vehicle who is eligible to apply for an incentive under this
350	350	subchapter shall apply for the incentive in the manner provided by
351	351	law or by rule of the commission.
352	352	Sec. 386.158. COMMISSION TO ACCOUNT FOR MOTOR VEHICLE
353	353	PURCHASE OR LEASE INCENTIVES. (a) The commission by rule shall
354	354	develop a method to administer and account for the motor vehicle
355	355	purchase or lease incentives authorized by this subchapter and to
356	356	pay incentive money to the purchaser or lessee of a new motor
357	357	vehicle, on application of the purchaser or lessee as provided by
358	358	this subchapter.
359	359	(b) The commission shall develop and publish forms and
360	360	instructions for the purchaser or lessee of a new motor vehicle to
361	361	use in applying to the commission for an incentive payment under
362	362	this subchapter. The commission shall make the forms available to
363	363	new motor vehicle dealers and leasing agents. Dealers and leasing
364	364	agents shall make the forms available to their prospective
365	365	purchasers or lessees.
366	366	(c) The commission may require the submission of forms and
367	367	documentation as needed to verify eligibility for an incentive
368	368	under this subchapter.
369	369	Sec. 386.159. PURCHASE OR LEASE INCENTIVES INFORMATION. (a)
370	370	The commission shall establish a toll-free telephone number
371	371	available to motor vehicle dealers and leasing agents for the
372	372	dealers and agents to call to verify that incentives are available.
373	373	The commission may provide for issuing verification numbers over
374	374	the telephone line.
375	375	(b) Reliance by a dealer or leasing agent on information
376	376	provided by the commission is a complete defense to an action
377	377	involving or based on eligibility of a vehicle for an incentive or
378	378	availability of vehicles eligible for an incentive.
379	379	Sec. 386.160. RESERVATION OF INCENTIVES. The commission may
380	380	provide for dealers and leasing agents to reserve for a limited time
381	381	period incentives for vehicles that are not readily available and
382	382	must be ordered, if the dealer or leasing agent has a purchase or
383	383	lease order signed by an identified customer.
384	384	SECTION 10. Section 386.181(a), Health and Safety Code, is
385	385	amended to read as follows:
386	386	(a) In this subchapter, "drayage truck" means a truck or
387	387	land-based equipment that transports a load to, [or] from, or in a
388	388	seaport or rail yard.
389	389	SECTION 11. Section 386.182(a), Health and Safety Code, is
390	390	amended to read as follows:
391	391	(a) The commission shall:
392	392	(1) develop a purchase incentive program to encourage
393	393	owners to replace drayage trucks with pre-2007 model year engines
394	394	or engines certified to an emission rate equivalent to a pre-2007
395	395	model year engine; and
396	396	(2) [with newer drayage trucks and shall] adopt
397	397	guidelines necessary to implement the program described by
398	398	Subdivision (1).
399	399	SECTION 12. Section 386.252, Health and Safety Code, is
400	400	amended to read as follows:
401	401	Sec. 386.252. USE OF FUND. (a) Money in the fund may be used
402	402	only to implement and administer programs established under the
403	403	plan. Subject to the reallocation of funds by the commission under
404	404	Subsection (g), money [Money] appropriated to the commission to be
405	405	used for the programs under Section 386.051(b) shall initially be
406	406	allocated as follows:
407	407	(1) [not more than] four percent may be used for the
408	408	clean school bus program under Chapter 390;
409	409	(2) [not more than] three percent may be used for the
410	410	new technology implementation grant program under Chapter 391, from
411	411	which at least $1 million will be set aside for electricity storage
412	412	projects related to renewable energy;
413	413	(3) five percent may [shall] be used for the clean
414	414	fleet program under Chapter 392;
415	415	(4) not more than $3 million may be used by the
416	416	commission to fund a regional air monitoring program in commission
417	417	Regions 3 and 4 to be implemented under the commission's oversight,
418	418	including direction regarding the type, number, location, and
419	419	operation of, and data validation practices for, monitors funded by
420	420	the program through a regional nonprofit entity located in North
421	421	Texas having representation from counties, municipalities, higher
422	422	education institutions, and private sector interests across the
423	423	area;
424	424	(5) [not less than] 16 percent may [shall] be used for
425	425	the Texas natural gas vehicle grant program under Chapter 394;
426	426	(6) 10 [not more than five] percent may be used [to
427	427	provide grants for natural gas fueling stations under the clean
428	428	transportation triangle program under Section 394.010;
429	429	[(7) not more than five percent may be used] for the
430	430	Texas alternative fueling facilities program under Chapter 393, of
431	431	which a specified amount may be used for fueling stations to provide
432	432	natural gas fuel;
433	433	(7) [(8)] a specified amount may be used each year to
434	434	support research related to air quality as provided by Chapter 387;
435	435	(8) [(9)] not more than $200,000 may be used for a
436	436	health effects study[;
437	437	[(10) $500,000 is to be deposited in the state
438	438	treasury to the credit of the clean air account created under
439	439	Section 382.0622 to supplement funding for air quality planning
440	440	activities in affected counties];
441	441	(9) [(11)] at least $4 million and up to four percent
442	442	to a maximum of $7 million, whichever is greater, is allocated to
443	443	the commission for administrative costs and costs for conducting
444	444	outreach and education activities to promote participation in the
445	445	programs funded under this section;
446	446	(10) [(12) at least] two percent [and up to five
447	447	percent of the fund] is to be used by the commission for the drayage
448	448	truck incentive program established under Subchapter D-1;
449	449	(11) [(13) not more than] five percent may be used for
450	450	the light-duty motor vehicle purchase or lease incentive program
451	451	established under Subchapter D;
452	452	(12) [(14)] not more than $216,000 is allocated to the
453	453	commission to contract with the Energy Systems Laboratory at the
454	454	Texas A&M Engineering Experiment Station annually for the
455	455	development and annual computation of creditable statewide
456	456	emissions reductions obtained through wind and other renewable
457	457	energy resources for the state implementation plan;
458	458	[(15) 1.5 percent of the money in the fund is allocated
459	459	for administrative costs incurred by the laboratory;] and
460	460	(13) [(16)] the balance is to be used by the
461	461	commission for the diesel emissions reduction incentive program
462	462	under Subchapter C as determined by the commission.
463	463	(b) [The commission may allocate unexpended money
464	464	designated for the clean fleet program under Chapter 392 to other
465	465	programs described under Subsection (a) after the commission
466	466	allocates money to recipients under the clean fleet program.
467	467	[(c) The commission may allocate unexpended money
468	468	designated for the Texas alternative fueling facilities program
469	469	under Chapter 393 to other programs described under Subsection (a)
470	470	after the commission allocates money to recipients under the
471	471	alternative fueling facilities program.
472	472	[(d) The commission may reallocate money designated for the
473	473	Texas natural gas vehicle grant program under Chapter 394 to other
474	474	programs described under Subsection (a) if:
475	475	[(1) the commission, in consultation with the governor
476	476	and the advisory board, determines that the use of the money in the
477	477	fund for that program will cause the state to be in noncompliance
478	478	with the state implementation plan to the extent that federal
479	479	action is likely; and
480	480	[(2) the commission finds that the reallocation of
481	481	some or all of the funding for the program would resolve the
482	482	noncompliance.
483	483	[(e) Under Subsection (d), the commission may not
484	484	reallocate more than the minimum amount of money necessary to
485	485	resolve the noncompliance.
486	486	[(e-1) Money allocated under Subsection (a) to a particular
487	487	program may be used for another program under the plan as determined
488	488	by the commission.
489	489	[(f)] Money in the fund may be used by the commission for
490	490	programs under Sections 386.051(b)(13), (b)(14), and (b-1) as may
491	491	be appropriated for those programs.
492	492	(c) [(g)] If the legislature does not specify amounts or
493	493	percentages from the total appropriation to the commission to be
494	494	allocated under Subsection (a) or (b) [(f)], the commission shall
495	495	determine the amounts of the total appropriation to be allocated
496	496	under each of those subsections, such that the total appropriation
497	497	is expended while maximizing emissions reductions.
498	498	(d) To supplement funding for air quality planning
499	499	activities in affected counties, $500,000 from the fund is to be
500	500	deposited annually in the state treasury to the credit of the clean
501	501	air account created under Section 382.0622.
502	502	(e) Money in the fund may be allocated for administrative
503	503	costs incurred by the Energy Systems Laboratory at the Texas A&M
504	504	Engineering Experiment Station as may be appropriated by the
505	505	legislature.
506	506	(f) To the extent that money is appropriated from the fund
507	507	for that purpose, the commission may use that money to award grants
508	508	under the governmental alternative fuel fleet grant program
509	509	established under Chapter 395, except that the commission may not
510	510	use for that purpose more than three percent of the balance of the
511	511	fund as of September 1 of each state fiscal year of the biennium for
512	512	the governmental alternative fuel fleet grant program in that
513	513	fiscal year.
514	514	(g) [(h)] Subject to the limitations outlined in this
515	515	section and any additional limitations placed on the use of the
516	516	appropriated funds, money allocated under this section to a
517	517	particular program may be used for another program under the plan as
518	518	determined by the commission, based on demand for grants for
519	519	eligible projects under particular programs after the commission
520	520	solicits projects to which to award grants according to the initial
521	521	allocation provisions of this section.
522	522	SECTION 13. Section 390.002(b), Health and Safety Code, is
523	523	amended to read as follows:
524	524	(b) Projects that may be considered for a grant under the
525	525	program include:
526	526	(1) diesel oxidation catalysts for school buses built
527	527	before 1994;
528	528	(2) diesel particulate filters for school buses built
529	529	from 1994 to 1998;
530	530	(3) the purchase and use of emission-reducing add-on
531	531	equipment for school buses, including devices that reduce crankcase
532	532	emissions;
533	533	(4) the use of qualifying fuel; [and]
534	534	(5) other technologies that the commission finds will
535	535	bring about significant emissions reductions; and
536	536	(6) replacement of a pre-2007 model year school bus.
537	537	SECTION 14. Section 390.004, Health and Safety Code, is
538	538	amended by adding Subsections (c) and (d) to read as follows:
539	539	(c) A school bus proposed for replacement must:
540	540	(1) be of model year 2006 or earlier;
541	541	(2) have been owned and operated by the applicant for
542	542	at least the two years before submission of the grant application;
543	543	(3) be in good operational condition; and
544	544	(4) be currently used on a regular, daily route to and
545	545	from a school.
546	546	(d) A school bus proposed for purchase to replace a pre-2007
547	547	model year school bus must be of the current model year or the year
548	548	before the current model year at the time of submission of the grant
549	549	application.
550	550	SECTION 15. Section 390.005, Health and Safety Code, is
551	551	amended to read as follows:
552	552	Sec. 390.005. RESTRICTION ON USE OF GRANT. (a) A recipient
553	553	of a grant under this chapter shall use the grant to pay the
554	554	incremental costs of the project for which the grant is made, which
555	555	may include the reasonable and necessary expenses incurred for the
556	556	labor needed to install emissions-reducing equipment. The
557	557	recipient may not use the grant to pay the recipient's
558	558	administrative expenses.
559	559	(b) A school bus acquired to replace an existing school bus
560	560	must be purchased and the grant recipient must agree to own and
561	561	operate the school bus on a regular, daily route to and from a
562	562	school for at least five years after a start date established by the
563	563	commission, based on the date the commission accepts documentation
564	564	of the destruction of the school bus being replaced.
565	565	(c) A school bus replaced under this program must be
566	566	rendered permanently inoperable by crushing the bus, by making a
567	567	hole in the engine block and permanently destroying the frame of the
568	568	bus, or by another method approved by the commission, or be
569	569	permanently removed from operation in this state. The commission
570	570	shall establish criteria for ensuring the permanent destruction or
571	571	permanent removal of the engine or bus. The commission shall
572	572	enforce the destruction and removal requirements. For purposes of
573	573	this subsection, "permanent removal" means the permanent export of
574	574	the bus or engine to a destination outside of the United States,
575	575	Canada, or the United Mexican States.
576	576	SECTION 16. Section 390.006, Health and Safety Code, is
577	577	amended to read as follows:
578	578	Sec. 390.006. EXPIRATION. This chapter expires on the last
579	579	day of the state fiscal biennium during which the commission
580	580	publishes in the Texas Register certification that, with respect to
581	581	each national ambient air quality standard for ozone under 40
582	582	C.F.R. Section 81.344, the United States Environmental Protection
583	583	Agency has, for each designated area under that section:
584	584	(1) designated the area as attainment or
585	585	unclassifiable; or
586	586	(2) approved a redesignation substitute making a
587	587	finding of attainment for the area [August 31, 2019].
588	588	SECTION 17. Section 391.002(b), Health and Safety Code, is
589	589	amended to read as follows:
590	590	(b) Projects that may be considered for a grant under the
591	591	program include:
592	592	(1) advanced clean energy projects, as defined by
593	593	Section 382.003;
594	594	(2) new technology projects that reduce emissions of
595	595	regulated pollutants from stationary [point] sources;
596	596	(3) new technology projects that reduce emissions from
597	597	upstream and midstream oil and gas production, completions,
598	598	gathering, storage, processing, and transmission activities
599	599	through:
600	600	(A) the replacement, repower, or retrofit of
601	601	stationary compressor engines; or
602	602	(B) the installation of systems to reduce or
603	603	eliminate the loss of gas, flaring of gas, or burning of gas using
604	604	other combustion control devices; and
605	605	(4) [(3)] electricity storage projects related to
606	606	renewable energy, including projects to store electricity produced
607	607	from wind and solar generation that provide efficient means of
608	608	making the stored energy available during periods of peak energy
609	609	use.
610	610	SECTION 18. Section 391.205(a), Health and Safety Code, is
611	611	amended to read as follows:
612	612	(a) Except as provided by Subsection (c), in awarding grants
613	613	under this chapter the commission shall give preference to projects
614	614	that:
615	615	(1) involve the transport, use, recovery for use, or
616	616	prevention of the loss of natural resources originating or produced
617	617	in this state;
618	618	(2) contain an energy efficiency component; or
619	619	(3) include the use of solar, wind, or other renewable
620	620	energy sources.
621	621	SECTION 19. Section 391.304, Health and Safety Code, is
622	622	amended to read as follows:
623	623	Sec. 391.304. EXPIRATION. This chapter expires on the last
624	624	day of the state fiscal biennium during which the commission
625	625	publishes in the Texas Register certification that, with respect to
626	626	each national ambient air quality standard for ozone under 40
627	627	C.F.R. Section 81.344, the United States Environmental Protection
628	628	Agency has, for each designated area under that section:
629	629	(1) designated the area as attainment or
630	630	unclassifiable; or
631	631	(2) approved a redesignation substitute making a
632	632	finding of attainment for the area [August 31, 2019].
633	633	SECTION 20. Section 392.001(1), Health and Safety Code, is
634	634	amended to read as follows:
635	635	(1) "Alternative fuel" means a fuel other than
636	636	gasoline or diesel fuel, including electricity, compressed natural
637	637	gas, liquefied [liquified] natural gas, hydrogen, propane, or a
638	638	mixture of fuels containing at least 85 percent methanol by volume.
639	639	SECTION 21. Section 392.003(a), Health and Safety Code, is
640	640	amended to read as follows:
641	641	(a) A vehicle is a qualifying vehicle that may be considered
642	642	for a grant under the program if during the eligibility period
643	643	established by the commission [calendar year] the entity purchases
644	644	a new on-road vehicle that:
645	645	(1) is certified to the appropriate current federal
646	646	emissions standards as determined by the commission;
647	647	(2) replaces a diesel-powered on-road vehicle of the
648	648	same weight classification and use; and
649	649	(3) is a hybrid vehicle or fueled by an alternative
650	650	fuel.
651	651	SECTION 22. Section 392.004(d), Health and Safety Code, is
652	652	amended to read as follows:
653	653	(d) The commission shall minimize, to the maximum extent
654	654	possible, the amount of paperwork required for an application. [An
655	655	applicant may be required to submit a photograph or other
656	656	documentation of a vehicle identification number, registration
657	657	information, inspection information, tire condition, or engine
658	658	block identification only if the photograph or documentation is
659	659	requested by the commission after the commission has decided to
660	660	award a grant to the applicant under this chapter.]
661	661	SECTION 23. Section 392.005, Health and Safety Code, is
662	662	amended by amending Subsections (c) and (i) and adding Subsection
663	663	(c-1) to read as follows:
664	664	(c) As a condition of receiving a grant, the qualifying
665	665	vehicle must be continuously owned, registered, and operated in the
666	666	state by the grant recipient until the earlier of the fifth
667	667	anniversary of the activity start date established by the
668	668	commission [the date of reimbursement of the grant-funded expenses]
669	669	or [until] the date the vehicle has been in operation for 400,000
670	670	miles after the activity start date established by the commission
671	671	[of reimbursement]. Not less than 75 percent of the annual use of
672	672	the qualifying vehicle, either mileage or fuel use as determined by
673	673	the commission, must occur in the state.
674	674	(c-1) For purposes of Subsection (c), the commission shall
675	675	establish the activity start date based on the date the commission
676	676	accepts verification of the disposition of the vehicle being
677	677	replaced.
678	678	(i) The executive director may [shall] waive the
679	679	requirements of Subsection (b)(2)(A) on a finding of good cause,
680	680	which may include a waiver for short lapses in registration or
681	681	operation attributable to economic conditions, seasonal work, or
682	682	other circumstances.
683	683	SECTION 24. Section 392.008, Health and Safety Code, is
684	684	amended to read as follows:
685	685	Sec. 392.008. EXPIRATION. This chapter expires on the last
686	686	day of the state fiscal biennium during which the commission
687	687	publishes in the Texas Register certification that, with respect to
688	688	each national ambient air quality standard for ozone under 40
689	689	C.F.R. Section 81.344, the United States Environmental Protection
690	690	Agency has, for each designated area under that section:
691	691	(1) designated the area as attainment or
692	692	unclassifiable; or
693	693	(2) approved a redesignation substitute making a
694	694	finding of attainment for the area [August 31, 2017].
695	695	SECTION 25. Section 393.001, Health and Safety Code, is
696	696	amended by amending Subdivision (1) and adding Subdivisions (1-a)
697	697	and (4) to read as follows:
698	698	(1) "Alternative fuel" means a fuel other than
699	699	gasoline or diesel fuel, other than biodiesel fuel, including
700	700	electricity, compressed natural gas, liquefied [liquified] natural
701	701	gas, hydrogen, propane, or a mixture of fuels containing at least 85
702	702	percent methanol by volume.
703	703	(1-a) "Clean transportation zone" means:
704	704	(A) counties containing or intersected by a
705	705	portion of an interstate highway connecting the cities of Houston,
706	706	San Antonio, Dallas, and Fort Worth;
707	707	(B) counties located within the area bounded by
708	708	the interstate highways described by Paragraph (A);
709	709	(C) counties containing or intersected by a
710	710	portion of:
711	711	(i) an interstate highway connecting San
712	712	Antonio to Corpus Christi or Laredo; or
713	713	(ii) a state highway connecting Corpus
714	714	Christi and Laredo;
715	715	(D) counties located within the area bounded by
716	716	the highways described by Paragraph (C);
717	717	(E) counties in this state all or part of which
718	718	are included in a nonattainment area designated under Section
719	719	107(d) of the federal Clean Air Act (42 U.S.C. Section 7407); and
720	720	(F) counties designated as affected counties
721	721	under Section 386.001.
722	722	(4) "State highway" means a highway in this state
723	723	included in the plan providing for a system of state highways
724	724	prepared by the executive director of the Texas Department of
725	725	Transportation under Section 201.103, Transportation Code.
726	726	SECTION 26. Section 393.002, Health and Safety Code, is
727	727	amended to read as follows:
728	728	Sec. 393.002. PROGRAM. (a) The commission shall establish
729	729	and administer the Texas alternative fueling facilities program to
730	730	provide fueling facilities for alternative fuel in the clean
731	731	transportation zone [nonattainment areas]. Under the program, the
732	732	commission shall provide a grant for each eligible facility to
733	733	offset the cost of those facilities.
734	734	(b) An entity that constructs or [,] reconstructs[, or
735	735	acquires] an alternative fueling facility is eligible to
736	736	participate in the program.
737	737	(c) To ensure that alternative fuel vehicles have access to
738	738	fuel and to build the foundation for a self-sustaining market for
739	739	alternative fuels in Texas, the commission shall provide for
740	740	strategically placed fueling facilities in the clean
741	741	transportation zone to enable an alternative fuel vehicle to travel
742	742	in those areas relying solely on the alternative fuel.
743	743	(d) The commission shall maintain a listing to be made
744	744	available to the public online of all vehicle fueling facilities
745	745	that have received grant funding, including location and hours of
746	746	operation.
747	747	SECTION 27. Section 393.003, Health and Safety Code, is
748	748	amended by amending Subsections (a) and (b) and adding Subsections
749	749	(d) and (e) to read as follows:
750	750	(a) An entity operating in this state that constructs or [,]
751	751	reconstructs[, or acquires] a facility to [store, compress, or]
752	752	dispense alternative fuels may apply for and receive a grant under
753	753	the program.
754	754	(b) The commission may [adopt guidelines to] allow a
755	755	regional planning commission, council of governments, or similar
756	756	regional planning agency created under Chapter 391, Local
757	757	Government Code, or a private nonprofit organization to apply for
758	758	and receive a grant to improve the ability of the program to achieve
759	759	its goals.
760	760	(d) An application for a grant under the program must
761	761	include a certification that the applicant complies with laws,
762	762	rules, guidelines, and requirements applicable to taxation of fuel
763	763	provided by the applicant at each fueling facility owned or
764	764	operated by the applicant. The commission may terminate a grant
765	765	awarded under this section without further obligation to the grant
766	766	recipient if the commission determines that the recipient did not
767	767	comply with a law, rule, guideline, or requirement described by
768	768	this subsection. This subsection does not create a cause of action
769	769	to contest an application or award of a grant.
770	770	(e) The commission shall disperse grants under the program
771	771	through a competitive application selection process to offset a
772	772	portion of the eligible costs.
773	773	SECTION 28. Section 393.004, Health and Safety Code, is
774	774	amended to read as follows:
775	775	Sec. 393.004. ELIGIBILITY OF FACILITIES FOR GRANTS. (a) In
776	776	addition to the requirements of this chapter, the commission shall
777	777	establish additional eligibility and prioritization criteria as
778	778	needed to implement the program [The commission by rule shall
779	779	establish criteria for prioritizing facilities eligible to receive
780	780	grants under this chapter. The commission shall review and revise
781	781	the criteria as appropriate].
782	782	(b) The prioritization criteria established under
783	783	Subsection (a) must provide that, for each grant round, the
784	784	commission may not award a grant to an entity that does not [To be
785	785	eligible for a grant under the program, the entity receiving the
786	786	grant must] agree to make the alternative fueling facility
787	787	accessible and available to the public [persons not associated with
788	788	the entity] at times designated by the grant contract until each
789	789	eligible entity that does agree to those terms has been awarded a
790	790	grant [agreement].
791	791	(c) The commission may not award more than one grant for
792	792	each facility.
793	793	(d) The commission may give preference to or otherwise limit
794	794	grant selections to:
795	795	(1) fueling facilities providing specific types of
796	796	alternative fuels;
797	797	(2) fueling facilities in a specified area or
798	798	location; and
799	799	(3) fueling facilities meeting other specified
800	800	prioritization criteria established by the commission.
801	801	(e) For fueling facilities to provide natural gas, the
802	802	commission shall give preference to:
803	803	(1) facilities providing both liquefied natural gas
804	804	and compressed natural gas at a single location;
805	805	(2) facilities located not more than one mile from an
806	806	interstate highway system;
807	807	(3) facilities located in the area in and between the
808	808	Houston, San Antonio, and Dallas-Fort Worth areas; and
809	809	(4) facilities located in the area in and between the
810	810	Corpus Christi, Laredo, and San Antonio areas [A recipient of a
811	811	grant under this chapter is not eligible to receive a second grant
812	812	under this chapter for the same facility].
813	813	SECTION 29. Section 393.005, Health and Safety Code, is
814	814	amended to read as follows:
815	815	Sec. 393.005. RESTRICTION ON USE OF GRANT. (a) A recipient
816	816	of a grant under this chapter shall use the grant only to pay the
817	817	costs of the facility for which the grant is made. The recipient may
818	818	not use the grant to pay the recipient's:
819	819	(1) administrative expenses;
820	820	(2) expenses for the purchase of land or an interest in
821	821	land; or
822	822	(3) expenses for equipment or facility improvements
823	823	that are not directly related to the delivery, storage,
824	824	compression, or dispensing of the alternative fuel at the facility.
825	825	(b) Each grant must be awarded using a contract that
826	826	requires the recipient to meet operational, maintenance, and
827	827	reporting requirements as specified by the commission.
828	828	SECTION 30. Section 393.006, Health and Safety Code, is
829	829	amended to read as follows:
830	830	Sec. 393.006. AMOUNT OF GRANT. (a) Grants awarded under
831	831	this chapter for a facility to provide alternative fuels other than
832	832	natural gas may not exceed [For each eligible facility for which a
833	833	recipient is awarded a grant under the program, the commission
834	834	shall award the grant in an amount equal to] the lesser of:
835	835	(1) 50 percent of the sum of the actual eligible costs
836	836	incurred by the grant recipient within deadlines established by the
837	837	commission [to construct, reconstruct, or acquire the facility]; or
838	838	(2) $600,000.
839	839	(b) Grants awarded under this chapter for a facility to
840	840	provide natural gas may not exceed:
841	841	(1) $400,000 for a compressed natural gas facility;
842	842	(2) $400,000 for a liquefied natural gas facility; or
843	843	(3) $600,000 for a facility providing both liquefied
844	844	and compressed natural gas.
845	845	SECTION 31. Section 393.007, Health and Safety Code, is
846	846	amended to read as follows:
847	847	Sec. 393.007. EXPIRATION. This chapter expires on the last
848	848	day of the state fiscal biennium during which the commission
849	849	publishes in the Texas Register certification that, with respect to
850	850	each national ambient air quality standard for ozone under 40
851	851	C.F.R. Section 81.344, the United States Environmental Protection
852	852	Agency has, for each designated area under that section:
853	853	(1) designated the area as attainment or
854	854	unclassifiable; or
855	855	(2) approved a redesignation substitute making a
856	856	finding of attainment for the area [August 31, 2018].
857	857	SECTION 32. Section 394.001, Health and Safety Code, is
858	858	amended by amending Subdivisions (1), (4), (5), and (8) and adding
859	859	Subdivisions (1-a) and (7-a) to read as follows:
860	860	(1) "Clean transportation zone" has the meaning
861	861	assigned by Section 393.001 ["Advisory board" means the Texas
862	862	Emissions Reduction Plan Advisory Board].
863	863	(1-a) "Certified" includes:
864	864	(A) new vehicle or new engine certification by
865	865	the United States Environmental Protection Agency; or
866	866	(B) certification or approval by the United
867	867	States Environmental Protection Agency of a system to convert a
868	868	vehicle or engine to operate on an alternative fuel and a
869	869	demonstration by the emissions data used to certify or approve the
870	870	vehicle or engine, if the commission determines the testing used to
871	871	obtain the emissions data is consistent with the testing required
872	872	for approval of an alternative fuel conversion system for new and
873	873	relatively new vehicles or engines under 40 C.F.R. Part 85.
874	874	(4) "Heavy-duty motor vehicle" means a motor vehicle
875	875	that [with]:
876	876	(A) has a gross vehicle weight rating of more
877	877	than 8,500 pounds; and
878	878	(B) is certified to or has an engine certified to
879	879	the United States Environmental Protection Agency's emissions
880	880	standards for heavy-duty vehicles or engines.
881	881	(5) "Incremental cost" has the meaning assigned by
882	882	Section 386.001 [means the difference between the manufacturer's
883	883	suggested retail price of a baseline vehicle, the documented dealer
884	884	price of a baseline vehicle, cost to lease or otherwise
885	885	commercially finance a baseline vehicle, cost to repower with a
886	886	baseline engine, or other appropriate baseline cost established by
887	887	the commission, and the actual cost of the natural gas vehicle
888	888	purchase, lease, or other commercial financing, or repower].
889	889	(7-a) "Natural gas engine" means an engine that
890	890	operates:
891	891	(A) solely on compressed or liquefied natural
892	892	gas; or
893	893	(B) on a combination of diesel fuel and
894	894	compressed or liquefied natural gas and is capable of achieving at
895	895	least 60 percent displacement of diesel fuel with natural gas.
896	896	(8) "Natural gas vehicle" means a motor vehicle that
897	897	is powered by a natural gas engine [receives not less than 75
898	898	percent of its power from compressed or liquefied natural gas].
899	899	SECTION 33. Section 394.003(a), Health and Safety Code, is
900	900	amended to read as follows:
901	901	(a) A vehicle is a qualifying vehicle that may be considered
902	902	for a grant under the program if during the eligibility period
903	903	established by the commission [calendar year] the entity:
904	904	(1) purchased, leased, or otherwise commercially
905	905	financed the vehicle as a new on-road heavy-duty or medium-duty
906	906	motor vehicle that:
907	907	(A) is a natural gas vehicle;
908	908	(B) is certified to the appropriate current
909	909	federal emissions standards as determined by the commission; and
910	910	(C) replaces an on-road heavy-duty or
911	911	medium-duty motor vehicle of the same weight classification and
912	912	use; [and
913	913	[(D) is powered by an engine certified to:
914	914	[(i) emit not more than 0.2 grams of
915	915	nitrogen oxides per brake horsepower hour; or
916	916	[(ii) meet or exceed the United States
917	917	Environmental Protection Agency's Bin 5 standard for light duty
918	918	engines when powering the vehicle;] or
919	919	(2) repowered the on-road motor vehicle to a natural
920	920	gas vehicle powered by a natural gas engine that[:
921	921	[(A)] is certified to the appropriate current
922	922	federal emissions standards as determined by the commission [; and
923	923	[(B) is:
924	924	[(i) a heavy duty engine that is certified
925	925	to emit not more than 0.2 grams of nitrogen oxides per brake
926	926	horsepower hour; or
927	927	[(ii) certified to meet or exceed the
928	928	United States Environmental Protection Agency's Bin 5 standard for
929	929	light duty engines when powering the vehicle].
930	930	SECTION 34. Section 394.005, Health and Safety Code, is
931	931	amended by amending Subsections (a), (b), (c), (f), (g), and (i) and
932	932	adding Subsection (c-1) to read as follows:
933	933	(a) The commission [by rule] shall establish criteria for
934	934	prioritizing qualifying vehicles eligible to receive grants under
935	935	this chapter. The commission shall review and revise the criteria
936	936	as appropriate [after consultation with the advisory board].
937	937	(b) To be eligible for a grant under the program:
938	938	(1) the use of the qualifying vehicle must be
939	939	projected to result in a reduction in emissions of nitrogen oxides
940	940	of at least 25 percent as compared to the motor vehicle or engine
941	941	being replaced, based on:
942	942	(A) the baseline emission level set by the
943	943	commission under Subsection (g); and
944	944	(B) the certified emission rate of the new
945	945	vehicle; and
946	946	(2) the qualifying vehicle must:
947	947	(A) replace a heavy-duty or medium-duty motor
948	948	vehicle that:
949	949	(i) is an on-road vehicle that has been
950	950	owned, leased, or otherwise commercially financed and registered
951	951	and operated by the applicant in Texas for at least the two years
952	952	immediately preceding the submission of a grant application;
953	953	(ii) satisfies any minimum average annual
954	954	mileage or fuel usage requirements established by the commission;
955	955	(iii) satisfies any minimum percentage of
956	956	annual usage requirements established by the commission; and
957	957	(iv) is in operating condition and has at
958	958	least two years of remaining useful life, as determined in
959	959	accordance with criteria established by the commission; [or]
960	960	(B) replace a heavy-duty or medium-duty motor
961	961	vehicle that:
962	962	(i) is owned by the applicant;
963	963	(ii) is an on-road vehicle that has been:
964	964	(a) owned, leased, or otherwise
965	965	commercially financed and operated in Texas as a fleet vehicle for
966	966	at least the two years immediately preceding the submission of a
967	967	grant application; and
968	968	(b) registered in a county located in
969	969	a nonattainment or near-nonattainment area for at least the two
970	970	years immediately preceding the submission of a grant application;
971	971	and
972	972	(iii) otherwise satisfies the mileage,
973	973	usage, and useful life requirements established under Paragraph (A)
974	974	as determined by documentation associated with the vehicle; or
975	975	(C) be a heavy-duty or medium-duty motor vehicle
976	976	repowered with a natural gas engine that:
977	977	(i) is installed in an on-road vehicle that
978	978	has been owned, leased, or otherwise commercially financed and
979	979	registered and operated by the applicant in Texas for at least the
980	980	two years immediately preceding the submission of a grant
981	981	application;
982	982	(ii) satisfies any minimum average annual
983	983	mileage or fuel usage requirements established by the commission;
984	984	(iii) satisfies any minimum percentage of
985	985	annual usage requirements established by the commission; and
986	986	(iv) is installed in an on-road vehicle
987	987	that, at the time of the vehicle's repowering, was in operating
988	988	condition and had at least two years of remaining useful life, as
989	989	determined in accordance with criteria established by the
990	990	commission.
991	991	(c) As a condition of receiving a grant, the qualifying
992	992	vehicle must be continuously owned, leased, or otherwise
993	993	commercially financed and registered and operated in the state by
994	994	the grant recipient until the earlier of the fourth anniversary of
995	995	the activity start date established by the commission [the date of
996	996	reimbursement of the grant funded expenses] or [until] the date the
997	997	vehicle has been in operation for 400,000 miles after the activity
998	998	start date established by the commission [of reimbursement]. Not
999	999	less than 75 percent of the annual use of the qualifying vehicle,
1000	1000	either mileage or fuel use as determined by the commission, must
1001	1001	occur in the clean transportation zone [:
1002	1002	[(1) the counties any part of which are included in the
1003	1003	area described by Section 394.010(a); or
1004	1004	[(2) counties designated as nonattainment areas
1005	1005	within the meaning of Section 107(d) of the federal Clean Air Act
1006	1006	(42 U.S.C. Section 7407)].
1007	1007	(c-1) For purposes of Subsection (c), the commission shall
1008	1008	establish the activity start date based on the date the commission
1009	1009	accepts verification of the disposition of the vehicle or engine.
1010	1010	(f) A heavy-duty or medium-duty motor vehicle replaced
1011	1011	under this program must be rendered permanently inoperable by
1012	1012	crushing the vehicle, by making a hole in the engine block and
1013	1013	permanently destroying the frame of the vehicle, or by another
1014	1014	method approved by the commission, or be [that] permanently removed
1015	1015	[removes the vehicle] from operation in this state. The commission
1016	1016	shall establish criteria for ensuring the permanent destruction or
1017	1017	permanent removal of the engine or vehicle. The commission shall
1018	1018	enforce the destruction and removal requirements. For purposes of
1019	1019	this subsection, "permanent removal" means the permanent export of
1020	1020	the vehicle or engine to a destination outside of the United States,
1021	1021	Canada, or the United Mexican States.
1022	1022	(g) The commission shall establish baseline emission levels
1023	1023	for emissions of nitrogen oxides for on-road heavy-duty or
1024	1024	medium-duty motor vehicles being replaced or repowered by using the
1025	1025	emission certification for the engine or vehicle being replaced.
1026	1026	The commission may consider deterioration of the emission
1027	1027	performance of the engine of the vehicle being replaced in
1028	1028	establishing the baseline emission level. The commission may
1029	1029	consider and establish baseline emission rates for additional
1030	1030	pollutants of concern[, as determined by the commission after
1031	1031	consultation with the advisory board].
1032	1032	(i) The executive director may [shall] waive the
1033	1033	requirements of Subsection (b)(2)(A)(i) or (B)(ii) on a finding of
1034	1034	good cause, which may include short lapses in registration or
1035	1035	operation due to economic conditions, seasonal work, or other
1036	1036	circumstances.
1037	1037	SECTION 35. Section 394.006, Health and Safety Code, is
1038	1038	amended to read as follows:
1039	1039	Sec. 394.006. RESTRICTION ON USE OF GRANT. A recipient of a
1040	1040	grant under this chapter shall use the grant to pay the incremental
1041	1041	costs of the replacement or vehicle repower for which the grant is
1042	1042	made, which may include a portion of the initial cost of the natural
1043	1043	gas vehicle or natural gas engine, including the cost of the natural
1044	1044	gas fuel system and installation [and the reasonable and necessary
1045	1045	expenses incurred for the labor needed to install
1046	1046	emissions-reducing equipment]. The recipient may not use the grant
1047	1047	to pay the recipient's administrative expenses.
1048	1048	SECTION 36. Section 394.007(c), Health and Safety Code, is
1049	1049	amended to read as follows:
1050	1050	(c) A person may not receive a grant under this chapter
1051	1051	that, when combined with any other grant, tax credit, or other
1052	1052	governmental incentive, exceeds the incremental cost of the vehicle
1053	1053	or vehicle repower for which the grant is awarded. A person shall
1054	1054	return to the commission the amount of a grant awarded under this
1055	1055	chapter that, when combined with any other grant, tax credit, or
1056	1056	other governmental incentive, exceeds the incremental cost of the
1057	1057	vehicle or vehicle repower for which the grant is awarded.
1058	1058	SECTION 37. Sections 394.008(a) and (b), Health and Safety
1059	1059	Code, are amended to read as follows:
1060	1060	(a) The commission shall establish [adopt] procedures for:
1061	1061	(1) awarding grants under this chapter to reimburse
1062	1062	eligible costs; [in the form of rebates; and]
1063	1063	(2) streamlining the grant application, contracting,
1064	1064	reimbursement, and reporting process for qualifying natural gas
1065	1065	vehicle purchases or repowers; and
1066	1066	(3) preapproving the award of grants to applicants who
1067	1067	propose to purchase and replace motor vehicles described by Section
1068	1068	394.005(b)(2)(B).
1069	1069	(b) Procedures established [adopted] under this section
1070	1070	must:
1071	1071	(1) provide for the commission to compile and
1072	1072	regularly update a listing of potentially eligible [preapproved]
1073	1073	natural gas vehicles and engines powered by natural gas that are
1074	1074	certified to the appropriate current federal emissions standards as
1075	1075	determined by the commission[:
1076	1076	[(A) powered by natural gas engines certified to
1077	1077	emit not more than 0.2 grams of nitrogen oxides per brake horsepower
1078	1078	hour; or
1079	1079	[(B) certified to the United States
1080	1080	Environmental Protection Agency's light duty Bin 5 standard or
1081	1081	better];
1082	1082	(2) [if a federal standard for the calculation of
1083	1083	emissions reductions exists,] provide a method to calculate the
1084	1084	reduction in emissions of nitrogen oxides, volatile organic
1085	1085	compounds, carbon monoxide, particulate matter, and sulfur
1086	1086	compounds for each replacement or repowering;
1087	1087	(3) assign a standardized grant [rebate] amount for
1088	1088	each qualifying vehicle or engine repower under Section 394.007;
1089	1089	(4) allow for processing applications [rebates] on an
1090	1090	ongoing first-come, first-served basis;
1091	1091	(5) [provide for contracts between the commission and
1092	1092	participating dealers under Section 394.009;
1093	1093	[(6) allow grant recipients to assign their grant
1094	1094	funds to participating dealers to offset the purchase or lease
1095	1095	price;
1096	1096	[(7)] require grant applicants to identify natural gas
1097	1097	fueling stations that are available to fuel the qualifying vehicle
1098	1098	in the area of its use;
1099	1099	(6) [(8)] provide for payment not later than the 30th
1100	1100	day after the date the request for reimbursement for an approved
1101	1101	grant is received;
1102	1102	(7) [(9)] provide for application submission and
1103	1103	application status checks using procedures established by the
1104	1104	commission, which may include application submission and status
1105	1105	checks to be made over the Internet; and
1106	1106	(8) [(10)] consolidate, simplify, and reduce the
1107	1107	administrative work for applicants and the commission associated
1108	1108	with grant application, contracting, reimbursement, and reporting
1109	1109	requirements.
1110	1110	SECTION 38. Section 394.012, Health and Safety Code, is
1111	1111	amended to read as follows:
1112	1112	Sec. 394.012. EXPIRATION. This chapter expires on the last
1113	1113	day of the state fiscal biennium during which the commission
1114	1114	publishes in the Texas Register certification that, with respect to
1115	1115	each national ambient air quality standard for ozone under 40
1116	1116	C.F.R. Section 81.344, the United States Environmental Protection
1117	1117	Agency has, for each designated area under that section:
1118	1118	(1) designated the area as attainment or
1119	1119	unclassifiable; or
1120	1120	(2) approved a redesignation substitute making a
1121	1121	finding of attainment for the area [August 31, 2017].
1122	1122	SECTION 39. Subtitle C, Title 5, Health and Safety Code, is
1123	1123	amended by adding Chapter 395 to read as follows:
1124	1124	CHAPTER 395. GOVERNMENTAL ALTERNATIVE FUEL FLEET GRANT PROGRAM
1125	1125	Sec. 395.001. DEFINITIONS. In this chapter:
1126	1126	(1) "Alternative fuel" means compressed natural gas,
1127	1127	liquefied natural gas, liquefied petroleum gas, hydrogen fuel
1128	1128	cells, or electricity, including electricity to power fully
1129	1129	electric motor vehicles and plug-in hybrid electric motor vehicles.
1130	1130	(2) "Commission" means the Texas Commission on
1131	1131	Environmental Quality.
1132	1132	(3) "Incremental cost" has the meaning assigned by
1133	1133	Section 386.001.
1134	1134	(4) "Motor vehicle" means a self-propelled device
1135	1135	designed for transporting persons or property on a public highway
1136	1136	that is required to be registered under Chapter 502, Transportation
1137	1137	Code.
1138	1138	(5) "Political subdivision" means a school district,
1139	1139	junior college district, river authority, water district or other
1140	1140	special district, or other political subdivision created under the
1141	1141	constitution or a statute of this state, other than a county or
1142	1142	municipality.
1143	1143	(6) "Program" means the governmental alternative fuel
1144	1144	fleet grant program established under this chapter.
1145	1145	(7) "State agency" has the meaning assigned by Section
1146	1146	2151.002, Government Code.
1147	1147	Sec. 395.002. PROGRAM. (a) The commission shall establish
1148	1148	and administer a governmental alternative fuel fleet grant program
1149	1149	to assist an eligible state agency, county, municipality, or
1150	1150	political subdivision in purchasing or leasing new motor vehicles
1151	1151	that operate primarily on an alternative fuel.
1152	1152	(b) The program may provide a grant to a state agency,
1153	1153	county, municipality, or political subdivision to:
1154	1154	(1) purchase or lease a new motor vehicle described by
1155	1155	Section 395.004; or
1156	1156	(2) purchase, lease, or install refueling
1157	1157	infrastructure or equipment or procure refueling services as
1158	1158	described by Section 395.005 to store and dispense alternative fuel
1159	1159	needed for a motor vehicle described by Subdivision (1) of this
1160	1160	subsection.
1161	1161	Sec. 395.003. ELIGIBLE APPLICANTS. (a) A state agency,
1162	1162	county, or municipality is eligible to apply for a grant under the
1163	1163	program if the entity operates a fleet of more than 15 motor
1164	1164	vehicles, excluding motor vehicles that are owned and operated by a
1165	1165	private company or other third party under a contract with the
1166	1166	entity.
1167	1167	(b) A mass transit or school transportation provider or
1168	1168	other public entity established to provide public or school
1169	1169	transportation services is eligible for a grant under the program.
1170	1170	Sec. 395.004. MOTOR VEHICLE REQUIREMENTS. (a) A grant
1171	1171	recipient may purchase or lease with money from a grant under the
1172	1172	program a new motor vehicle that is originally manufactured to
1173	1173	operate using one or more alternative fuels or is converted to
1174	1174	operate using one or more alternative fuels before the first retail
1175	1175	sale of the vehicle, and that:
1176	1176	(1) has a dedicated system, dual-fuel system, or
1177	1177	bi-fuel system; and
1178	1178	(2) if the motor vehicle is a fully electric motor
1179	1179	vehicle or plug-in hybrid electric motor vehicle, has a United
1180	1180	States Environmental Protection Agency rating of at least 75 miles
1181	1181	per gallon equivalent or a 75-mile combined city and highway range.
1182	1182	(b) A grant recipient may not use money from a grant under
1183	1183	the program to replace a motor vehicle, transit bus, or school bus
1184	1184	that operates on an alternative fuel unless the replacement vehicle
1185	1185	produces fewer emissions and has greater fuel efficiency than the
1186	1186	vehicle being replaced.
1187	1187	Sec. 395.005. REFUELING INFRASTRUCTURE, EQUIPMENT, AND
1188	1188	SERVICES. A grant recipient may purchase, lease, or install
1189	1189	refueling infrastructure or equipment or procure refueling
1190	1190	services with money from a grant under the program if:
1191	1191	(1) the purchase, lease, installation, or procurement
1192	1192	is made in conjunction with the purchase or lease of a motor vehicle
1193	1193	as described by Section 395.004 or the conversion of a motor vehicle
1194	1194	to operate primarily on an alternative fuel;
1195	1195	(2) the grant recipient demonstrates that a refueling
1196	1196	station that meets the needs of the recipient is not available
1197	1197	within five miles of the location at which the recipient's vehicles
1198	1198	are stored or primarily used; and
1199	1199	(3) for the purchase or installation of refueling
1200	1200	infrastructure or equipment, the infrastructure or equipment will
1201	1201	be owned and operated by the grant recipient, and for the lease of
1202	1202	refueling infrastructure or equipment or the procurement of
1203	1203	refueling services, a third-party service provider engaged by the
1204	1204	grant recipient will provide the infrastructure, equipment, or
1205	1205	services.
1206	1206	Sec. 395.006. ELIGIBLE COSTS. (a) A motor vehicle lease
1207	1207	agreement paid for with money from a grant under the program must
1208	1208	have a term of at least three years.
1209	1209	(b) Refueling infrastructure or equipment purchased or
1210	1210	installed with money from a grant under the program must be used
1211	1211	specifically to store or dispense alternative fuel, as determined
1212	1212	by the commission.
1213	1213	(c) A lease of or service agreement for refueling
1214	1214	infrastructure, equipment, or services paid for with money from a
1215	1215	grant under the program must have a term of at least three years.
1216	1216	Sec. 395.007. GRANT AMOUNTS. (a) The commission may
1217	1217	establish standardized grant amounts based on the incremental costs
1218	1218	associated with the purchase or lease of different categories of
1219	1219	motor vehicles, including the type of fuel used, vehicle class, and
1220	1220	other categories the commission considers appropriate.
1221	1221	(b) In determining the incremental costs and setting the
1222	1222	standardized grant amounts, the commission may consider the
1223	1223	difference in cost between a new motor vehicle operated using
1224	1224	conventional gasoline or diesel fuel and a new motor vehicle
1225	1225	operated using alternative fuel.
1226	1226	(c) The amount of a grant for the purchase or lease of a
1227	1227	motor vehicle may not exceed the amount of the incremental cost of
1228	1228	the purchase or lease.
1229	1229	(d) The commission may establish grant amounts to reimburse
1230	1230	the full cost of the purchase, lease, installation, or procurement
1231	1231	of refueling infrastructure, equipment, or services or may
1232	1232	establish criteria for reimbursing a percentage of the cost.
1233	1233	(e) A grant under the program may be combined with funding
1234	1234	from other sources, including other grant programs, except that a
1235	1235	grant may not be combined with other funding or grants from the
1236	1236	Texas emissions reduction plan. When combined with other funding
1237	1237	sources, a grant may not exceed the total cost to the grant
1238	1238	recipient.
1239	1239	(f) In providing a grant for the lease of a motor vehicle
1240	1240	under this chapter, the commission shall establish criteria:
1241	1241	(1) to offset incremental costs through an up-front
1242	1242	payment to lower the cost basis of the lease; or
1243	1243	(2) if determined appropriate by the commission, to
1244	1244	provide for reimbursement of lease payments over no more than the
1245	1245	period of availability of the contracted funds under applicable
1246	1246	state law and regulation, which may be less than the required
1247	1247	three-year lease term.
1248	1248	(g) In providing a grant for the lease of refueling
1249	1249	infrastructure, equipment, or services, the commission shall
1250	1250	establish criteria:
1251	1251	(1) to offset incremental costs through an up-front
1252	1252	payment to lower the cost basis of the lease; or
1253	1253	(2) if determined appropriate by the commission, to
1254	1254	provide for reimbursement of lease payments over no more than the
1255	1255	period of availability of the contracted funds under applicable
1256	1256	state law and regulation, which may be less than the required
1257	1257	three-year lease term.
1258	1258	(h) Notwithstanding Subsection (d), the commission is not
1259	1259	obligated to fund the full cost of the purchase, lease,
1260	1260	installation, or procurement of refueling infrastructure,
1261	1261	equipment, or services if those costs cannot be incurred and
1262	1262	reimbursed over the period of availability of the funds under
1263	1263	applicable state law and regulation.
1264	1264	Sec. 395.008. AVAILABILITY OF EMISSIONS REDUCTION CREDITS.
1265	1265	(a) A project that is funded from a grant under the program and that
1266	1266	would generate marketable emissions reduction credits under a state
1267	1267	or federal emissions reduction credit averaging, banking, or
1268	1268	trading program is not eligible for funding under the program
1269	1269	unless:
1270	1270	(1) the project includes the transfer of the credits,
1271	1271	or the reductions that would otherwise be marketable credits, to
1272	1272	the commission and, if applicable, the state implementation plan;
1273	1273	and
1274	1274	(2) the credits or reductions, as applicable, are
1275	1275	permanently retired.
1276	1276	(b) An emissions reduction generated by a purchase or lease
1277	1277	under this chapter may be used to demonstrate conformity with the
1278	1278	state implementation plan.
1279	1279	Sec. 395.009. USE OF GRANT MONEY BY COUNTY OR MUNICIPALITY.
1280	1280	A county or municipality shall prioritize the actions listed in
1281	1281	Section 2158.0051(b), Government Code, when using money from a
1282	1282	grant under the program.
1283	1283	Sec. 395.010. GRANT PROCEDURES AND CRITERIA. (a) The
1284	1284	commission shall establish specific criteria and procedures in
1285	1285	order to implement and administer the program, including the
1286	1286	creation and provision of application forms and guidance on the
1287	1287	application process.
1288	1288	(b) The commission shall award a grant through a contract
1289	1289	between the commission and the grant recipient.
1290	1290	(c) The commission shall provide an online application
1291	1291	process for the submission of all required application documents.
1292	1292	(d) The commission may limit funding for a particular period
1293	1293	according to priorities established by the commission, including
1294	1294	limiting the availability of grants to specific entities, for
1295	1295	certain types of vehicles and infrastructure, or to certain
1296	1296	geographic areas to ensure equitable distribution of grant funds
1297	1297	across the state.
1298	1298	(e) In awarding grants under the program, the commission
1299	1299	shall prioritize projects that:
1300	1300	(1) are proposed by a state agency;
1301	1301	(2) are in or near a nonattainment area;
1302	1302	(3) are in an affected county, as that term is defined
1303	1303	by Section 386.001; and
1304	1304	(4) will produce the greatest emissions reductions.
1305	1305	(f) In addition to the requirements under Subsection (e), in
1306	1306	awarding grants under the program, the commission shall consider:
1307	1307	(1) the effectiveness of a proposed project in
1308	1308	assisting an applicant in complying with Section 2158.0051,
1309	1309	Government Code;
1310	1310	(2) the total amount of the emissions reduction that
1311	1311	would be achieved from the project;
1312	1312	(3) the type and number of vehicles purchased or
1313	1313	leased;
1314	1314	(4) the location of the fleet and the refueling
1315	1315	infrastructure or equipment;
1316	1316	(5) the number of vehicles served and the rate at which
1317	1317	vehicles are served by the refueling infrastructure or equipment;
1318	1318	(6) the amount of any matching funds committed by the
1319	1319	applicant; and
1320	1320	(7) the schedule for project completion.
1321	1321	(g) The commission may not award more than 10 percent of the
1322	1322	total amount awarded under the program in any fiscal year for
1323	1323	purchasing, leasing, installing, or procuring refueling
1324	1324	infrastructure, equipment, or services.
1325	1325	Sec. 395.011. FUNDING. The legislature may appropriate
1326	1326	money to the commission from the Texas emissions reduction plan
1327	1327	fund established under Section 386.251 to administer the program.
1328	1328	Sec. 395.012. ADMINISTRATIVE COSTS. In each fiscal year,
1329	1329	the commission may use up to three-fourths of one percent of the
1330	1330	total amount of money awarded under the program in that fiscal year,
1331	1331	but not more than $1 million, for the administrative costs of the
1332	1332	program.
1333	1333	Sec. 395.013. RULES. The commission may adopt rules as
1334	1334	necessary to implement this chapter.
1335	1335	Sec. 395.014. REPORT REQUIRED. On or before November 1 of
1336	1336	each even-numbered year, the commission shall submit to the
1337	1337	governor, lieutenant governor, and members of the legislature a
1338	1338	report that includes the following information regarding awards
1339	1339	made under the program during the preceding state fiscal biennium:
1340	1340	(1) the number of grants awarded under the program;
1341	1341	(2) the recipient of each grant awarded;
1342	1342	(3) the number of vehicles replaced;
1343	1343	(4) the number, type, and location of any refueling
1344	1344	infrastructure, equipment, or services funded under the program;
1345	1345	(5) the total emissions reductions achieved under the
1346	1346	program; and
1347	1347	(6) any other information the commission considers
1348	1348	relevant.
1349	1349	Sec. 395.015. EXPIRATION. This chapter expires on the last
1350	1350	day of the state fiscal biennium during which the commission
1351	1351	publishes in the Texas Register certification that, with respect to
1352	1352	each national ambient air quality standard for ozone under 40
1353	1353	C.F.R. Section 81.344, the United States Environmental Protection
1354	1354	Agency has, for each designated area under that section:
1355	1355	(1) designated the area as attainment or
1356	1356	unclassifiable; or
1357	1357	(2) approved a redesignation substitute making a
1358	1358	finding of attainment for the area.
1359	1359	SECTION 40. Sections 394.009, 394.010, and 394.011, Health
1360	1360	and Safety Code, are repealed.
1361	1361	SECTION 41. The changes in law made by this Act apply only
1362	1362	to a Texas emissions reduction plan grant awarded on or after the
1363	1363	effective date of this Act. A grant awarded before the effective
1364	1364	date of this Act is governed by the law in effect on the date the
1365	1365	award was made, and the former law is continued in effect for that
1366	1366	purpose.
1367	1367	SECTION 42. This Act takes effect September 1, 2017.