85R27839 JRR-F
By: Estes, et al. S.B. No. 26
(Landgraf, Pickett, Dale, Reynolds)
Substitute the following for S.B. No. 26: No.
A BILL TO BE ENTITLED
AN ACT
relating to the Texas emissions reduction plan and other related
programs and measures to reduce emissions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2158.004(a), (b), (c), and (d),
Government Code, are amended to read as follows:
(a) A state agency operating a fleet of more than 15
vehicles, excluding law enforcement and emergency vehicles, may not
purchase or lease a motor vehicle unless that vehicle uses
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, methanol or methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater,
biodiesel or biodiesel/diesel blends of 20 percent or greater,
hydrogen fuel cells, or electricity, including electricity to power
a plug-in hybrid electric motor vehicle.
(b) A state agency may obtain equipment or refueling
facilities necessary to operate vehicles using compressed natural
gas, liquefied natural gas, liquefied petroleum gas, methanol or
methanol/gasoline blends of 85 percent or greater, ethanol or
ethanol/gasoline blends of 85 percent or greater, biodiesel or
biodiesel/diesel blends of 20 percent or greater, hydrogen fuel
cells, or electricity, including electricity to power a plug-in
hybrid electric motor vehicle:
(1) by purchase or lease as authorized by law;
(2) by gift or loan of the equipment or facilities; or
(3) by gift or loan of the equipment or facilities or
by another arrangement under a service contract for the supply of
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, methanol or methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater,
biodiesel or biodiesel/diesel blends of 20 percent or greater,
hydrogen fuel cells, or electricity, including electricity to power
a plug-in hybrid electric motor vehicle.
(c) If the equipment or facilities are donated, loaned, or
provided through another arrangement with the supplier of
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, methanol or methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater,
biodiesel or biodiesel/diesel blends of 20 percent or greater,
hydrogen fuel cells, or electricity, including electricity to power
a plug-in hybrid electric motor vehicle, the supplier is entitled
to recoup its actual cost of donating, loaning, or providing the
equipment or facilities through its fuel charges under the supply
contract.
(d) The commission may waive the requirements of this
section for a state agency on receipt of certification supported by
evidence acceptable to the commission that:
(1) the agency's vehicles will be operating primarily
in an area in which neither the agency nor a supplier has or can
reasonably be expected to establish adequate refueling for
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, methanol or methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater,
biodiesel or biodiesel/diesel blends of 20 percent or greater,
hydrogen fuel cells, or electricity, including electricity to power
a plug-in hybrid electric motor vehicle; or
(2) the agency is unable to obtain equipment or
refueling facilities necessary to operate vehicles using
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, methanol or methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater,
biodiesel or biodiesel/diesel blends of 20 percent or greater,
hydrogen fuel cells, or electricity, including electricity to power
a plug-in hybrid electric motor vehicle, at a projected cost that is
reasonably expected to be no greater than the net costs of continued
use of conventional gasoline or diesel fuels, measured over the
expected useful life of the equipment or facilities supplied.
SECTION 2. Subchapter A, Chapter 2158, Government Code, is
amended by adding Section 2158.0051 to read as follows:
Sec. 2158.0051. ALTERNATIVE FUEL FLEETS.
(a) Notwithstanding the purchase requirements of Section
2158.004:
(1) the vehicle fleet of a state agency that operates a
fleet of more than 15 motor vehicles, subject to the availability of
funds, may be replaced with motor vehicles that use compressed
natural gas, liquefied natural gas, liquefied petroleum gas,
hydrogen fuel cells, or electricity, including both fully electric
motor vehicles and plug-in hybrid electric motor vehicles;
(2) a county or municipality that operates a vehicle
fleet of more than 15 motor vehicles is authorized, but is not
required, to replace the fleet with motor vehicles that use
compressed natural gas, liquefied natural gas, liquefied petroleum
gas, hydrogen fuel cells, or electricity, including both fully
electric motor vehicles and plug-in hybrid electric motor vehicles;
and
(3) motor vehicles of a state agency, county, or
municipality described by Subdivisions (1) and (2) that are capable
of using fuels described by those subdivisions shall be primarily
operated with those fuels.
(b) In complying with Subsection (a), a state agency to
which this section applies shall prioritize:
(1) the purchase or lease of new motor vehicles,
including new motor vehicles that are converted to operate on an
alternative fuel described by Subsection (a)(1), when replacing
vehicles or adding vehicles to the fleet;
(2) the purchase of new motor vehicles, including new
motor vehicles that are converted to operate on an alternative fuel
described by Subsection (a)(1), to replace vehicles that have the
highest total mileage and do not use a fuel described by Subsection
(a)(1); and
(3) to the extent feasible, obtaining, whether by
purchase, purchase and conversion, or lease, motor vehicles that
use compressed natural gas, liquefied natural gas, or liquefied
petroleum gas.
(c) Subsection (a)(1) does not apply to law enforcement or
emergency vehicles.
SECTION 3. Section 386.001(3), Health and Safety Code, is
amended to read as follows:
(3) "Commission" means the Texas [Natural Resource
Conservation] Commission on Environmental Quality.
SECTION 4. Section 386.002, Health and Safety Code, is
amended to read as follows:
Sec. 386.002. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 5. Section 386.051(b), Health and Safety Code, is
amended to read as follows:
(b) Under the plan, the commission and the comptroller shall
provide grants or other funding for:
(1) the diesel emissions reduction incentive program
established under Subchapter C, including for infrastructure
projects established under that subchapter;
(2) the motor vehicle purchase or lease incentive
program established under Subchapter D;
(3) the air quality research support program
established under Chapter 387;
(4) the clean school bus program established under
Chapter 390;
(5) the new technology implementation grant program
established under Chapter 391;
(6) the regional air monitoring program established
under Section 386.252(a);
(7) a health effects study as provided by Section
386.252(a);
(8) air quality planning activities as provided by
Section 386.252(d) [386.252(a)];
(9) a contract with the Energy Systems Laboratory at
the Texas A&M Engineering Experiment Station for computation of
creditable statewide emissions reductions and other reductions of
air contaminants subject to the permitting requirements of Chapter
382 as provided by Section 386.252(a) [386.252(a)(14)];
(10) the clean fleet program established under Chapter
392;
(11) the alternative fueling facilities program
established under Chapter 393;
(12) the natural gas vehicle grant program [and clean
transportation triangle program] established under Chapter 394;
(13) other programs the commission may develop that
lead to reduced emissions of nitrogen oxides, particulate matter,
or volatile organic compounds in a nonattainment area or affected
county;
(14) other programs the commission may develop that
support congestion mitigation to reduce mobile source ozone
precursor emissions; [and]
(15) the seaport and rail yard areas emissions
reduction [drayage truck incentive] program established under
Subchapter D-1;
(16) conducting research and other activities
associated with making any necessary demonstrations in the state's
air quality state implementation plan submitted to the United
States Environmental Protection Agency that the excess emissions
reported for an area are the result of a foreign emissions source or
an exceptional event; and
(17) the governmental alternative fuel fleet grant
program established under Chapter 395.
SECTION 6. Sections 386.0515(a) and (c), Health and Safety
Code, are amended to read as follows:
(a) In this section:
(1) "Agricultural[, "agricultural] product
transportation" means the transportation of a raw agricultural
product from the place of production using a heavy-duty truck to:
(A) [(1)] a nonattainment area;
(B) [(2)] an affected county;
(C) [(3)] a destination inside the clean
transportation zone [triangle]; or
(D) [(4)] a county adjacent to a county described
by Paragraph (B) [Subdivision (2)] or that contains an area
described by Paragraph (A) or (C) [Subdivision (1) or (3)].
(2) "Clean transportation zone" has the meaning
assigned by Section 393.001.
(c) The determining factor for eligibility for
participation in a program established under Chapter 392 or
[Chapter] 394[, as added by Chapter 892 (Senate Bill No. 385), Acts
of the 82nd Legislature, Regular Session, 2011,] for a project
relating to agricultural product transportation is the overall
accumulative net reduction in emissions of oxides of nitrogen in a
nonattainment area, an affected county, or the clean transportation
zone [triangle].
SECTION 7. Section 386.103, Health and Safety Code, is
amended by adding Subsection (c) to read as follows:
(c) To reduce the administrative burden for the commission
and applicants, the commission may streamline the application
process by:
(1) reducing data entry and the copying and recopying
of applications; and
(2) developing, maintaining, and periodically
updating a system to accept applications electronically through the
commission's Internet website.
SECTION 8. Section 386.104(j), Health and Safety Code, is
amended to read as follows:
(j) The executive director may [shall] waive any
eligibility requirements established under this section on a
finding of good cause, which may include a waiver for short lapses
in registration or operation attributable to economic conditions,
seasonal work, or other circumstances.
SECTION 9. Sections 386.116(a), (b), and (c), Health and
Safety Code, are amended to read as follows:
(a) In this section, "small business" means a business owned
by a person who:
(1) owns and operates not more than five [two]
vehicles, one of which is:
(A) an on-road diesel [with a pre-1994 engine
model]; or
(B) a non-road diesel [with an engine with
uncontrolled emissions]; and
(2) has owned the vehicle described by Subdivision
(1)(A) or (B) for more than two years [one year].
(b) The commission [by rule] shall develop a method of
providing fast and simple access to grants under this subchapter
for a small business. The method must:
(1) create a separate small business grant program; or
(2) require the commission to give special
consideration to small businesses when implementing another
program established under this subchapter.
(c) The commission shall publicize and promote the
availability of grants under this subchapter for small businesses
[section] to encourage the use of vehicles that produce fewer
emissions.
SECTION 10. Chapter 386, Health and Safety Code, is amended
by adding Subchapter D to read as follows:
SUBCHAPTER D. MOTOR VEHICLE PURCHASE OR LEASE INCENTIVE PROGRAM
Sec. 386.151. DEFINITIONS. In this subchapter:
(1) "Light-duty motor vehicle" means a motor vehicle
with a gross vehicle weight rating of less than 10,000 pounds.
(2) "Motor vehicle" means a self-propelled device
designed for transporting persons or property on a public highway
that is required to be registered under Chapter 502, Transportation
Code.
Sec. 386.152. APPLICABILITY. The provisions of this
subchapter relating to a lessee do not apply to a person who rents
or leases a light-duty motor vehicle for a term of 30 days or less.
Sec. 386.153. COMMISSION DUTIES REGARDING LIGHT-DUTY MOTOR
VEHICLE PURCHASE OR LEASE INCENTIVE PROGRAM. (a) The commission
shall develop a purchase or lease incentive program for new
light-duty motor vehicles and shall adopt rules necessary to
implement the program.
(b) The program shall authorize statewide incentives for
the purchase or lease of new light-duty motor vehicles powered by
compressed natural gas, liquefied petroleum gas, or hydrogen fuel
cell or other electric drives for a purchaser or lessee who agrees
to register and operate the vehicle in this state for a minimum
period of time to be established by the commission.
(c) Only one incentive will be provided for each new
light-duty motor vehicle. The incentive shall be provided to the
lessee and not to the purchaser if the motor vehicle is purchased
for the purpose of leasing the vehicle to another person.
(d) The commission by rule may revise the standards for the
maximum unloaded vehicle weight rating and gross vehicle weight
rating of an eligible vehicle to ensure that all of the vehicle
weight configurations available under one general vehicle model may
be eligible for an incentive.
Sec. 386.154. LIGHT-DUTY MOTOR VEHICLE PURCHASE OR LEASE
INCENTIVE REQUIREMENTS. (a) A new light-duty motor vehicle
powered by compressed natural gas or liquefied petroleum gas is
eligible for a $5,000 incentive if the vehicle:
(1) has four wheels;
(2) was originally manufactured to comply with and has
been certified by an original equipment manufacturer or
intermediate or final state vehicle manufacturer as complying with,
or has been altered to comply with, federal motor vehicle safety
standards, state emissions regulations, and any additional federal
or state regulations applicable to vehicles powered by compressed
natural gas or liquefied petroleum gas;
(3) was manufactured for use primarily on public
streets, roads, and highways;
(4) has a dedicated or bi-fuel compressed natural gas
or liquefied petroleum gas fuel system:
(A) installed prior to first sale or within 500
miles of operation of the vehicle following first sale; and
(B) with a range of at least 125 miles as
estimated, published, and updated by the United States
Environmental Protection Agency;
(5) has, as applicable, a:
(A) compressed natural gas fuel system that
complies with the:
(i) 2013 NFPA 52 Vehicular Gaseous Fuel
Systems Code; and
(ii) American National Standard for Basic
Requirements for Compressed Natural Gas Vehicle (NGV) Fuel
Containers, commonly cited as "ANSI/CSA NGV2"; or
(B) liquefied petroleum gas fuel system that
complies with:
(i) the 2011 NFPA 58 Liquefied Petroleum
Gas Code; and
(ii) Section VII of the 2013 ASME Boiler and
Pressure Vessel Code; and
(6) was acquired on or after September 1, 2013, or a
later date established by the commission, by the person applying
for the incentive under this subsection and for use or lease by that
person and not for resale.
(b) If the commission determines that an updated version of
a code or standard described by Subdivision (a)(5) is more
stringent than the version of the code or standard described by
Subdivision (a)(5), the commission by rule may provide that a
vehicle for which a person applies for an incentive under
Subsection (a) is eligible for the incentive only if the vehicle
complies with the updated version of the code or standard.
(c) The incentive under Subsection (a) is limited to 1,000
vehicles for each state fiscal biennium.
(d) A new light-duty motor vehicle powered by an electric
drive is eligible for a $2,500 incentive if the vehicle:
(1) has four wheels;
(2) was manufactured for use primarily on public
streets, roads, and highways;
(3) has not been modified from the original
manufacturer's specifications;
(4) has a maximum speed capability of at least 55 miles
per hour;
(5) is propelled to a significant extent by an
electric motor that draws electricity from a hydrogen fuel cell or
from a battery that:
(A) has a capacity of not less than four kilowatt
hours; and
(B) is capable of being recharged from an
external source of electricity; and
(6) was acquired on or after September 1, 2013, or a
later date as established by the commission, by the person applying
for the incentive under this subsection and for use or lease by that
person and not for resale.
(e) The incentive under Subsection (d) is limited to 2,000
vehicles for each state fiscal biennium.
Sec. 386.155. MANUFACTURER'S REPORT. (a) At the beginning
of but not later than July 1 of each year preceding the vehicle
model year, a manufacturer of motor vehicles, an intermediate or
final state vehicle manufacturer, or a manufacturer of compressed
natural gas or liquefied petroleum gas systems shall provide to the
commission a list of the new vehicle or natural gas or liquefied
petroleum gas systems models that the manufacturer intends to sell
in this state during that model year that meet the incentive
requirements established under Section 386.154. The manufacturer
or installer may supplement the list provided to the commission
under this section as necessary to include additional new vehicle
models the manufacturer intends to sell in this state during the
model year.
(b) The commission may supplement the information provided
under Subsection (a) with additional information on available
vehicle models, including information provided by manufacturers or
installers of systems to convert new motor vehicles to operate on
natural gas or liquefied petroleum gas before sale as a new vehicle
or within 500 miles of operation of the vehicle following first
sale.
Sec. 386.156. LIST OF ELIGIBLE MOTOR VEHICLES. (a) On
August 1 of each year the commission shall publish a list of new
motor vehicle models eligible for inclusion in an incentive under
this subchapter. The commission shall publish supplements to that
list as necessary to include additional new vehicle models.
(b) The commission shall publish the list of eligible motor
vehicle models on the commission's Internet website.
Sec. 386.157. LIGHT-DUTY MOTOR VEHICLE PURCHASE OR LEASE
INCENTIVE. (a) A person who purchases or leases a new light-duty
motor vehicle described by Section 386.154 and listed under Section
386.156(a) is eligible to apply for an incentive under this
subchapter.
(b) A lease incentive for a new light-duty motor vehicle
shall be prorated based on a three-year lease term.
(c) To receive money under an incentive program provided by
this subchapter, the purchaser or lessee of a new light-duty motor
vehicle who is eligible to apply for an incentive under this
subchapter shall apply for the incentive in the manner provided by
law or by rule of the commission.
Sec. 386.158. COMMISSION TO ACCOUNT FOR MOTOR VEHICLE
PURCHASE OR LEASE INCENTIVES. (a) The commission by rule shall
develop a method to administer and account for the motor vehicle
purchase or lease incentives authorized by this subchapter and to
pay incentive money to the purchaser or lessee of a new motor
vehicle, on application of the purchaser or lessee as provided by
this subchapter.
(b) The commission shall develop and publish forms and
instructions for the purchaser or lessee of a new motor vehicle to
use in applying to the commission for an incentive payment under
this subchapter. The commission shall make the forms available to
new motor vehicle dealers and leasing agents. Dealers and leasing
agents shall make the forms available to their prospective
purchasers or lessees.
(c) The commission may require the submission of forms and
documentation as needed to verify eligibility for an incentive
under this subchapter.
Sec. 386.159. PURCHASE OR LEASE INCENTIVES INFORMATION.
(a) The commission shall establish a toll-free telephone number
available to motor vehicle dealers and leasing agents for the
dealers and agents to call to verify that incentives are available.
The commission may provide for issuing verification numbers over
the telephone line.
(b) Reliance by a dealer or leasing agent on information
provided by the commission is a complete defense to an action
involving or based on eligibility of a vehicle for an incentive or
availability of vehicles eligible for an incentive.
Sec. 386.160. RESERVATION OF INCENTIVES. The commission
may provide for dealers and leasing agents to reserve for a limited
time period incentives for vehicles that are not readily available
and must be ordered, if the dealer or leasing agent has a purchase
or lease order signed by an identified customer.
SECTION 11. The heading to Subchapter D-1, Chapter 386,
Health and Safety Code, is amended to read as follows:
SUBCHAPTER D-1. SEAPORT AND RAIL YARD AREAS EMISSIONS REDUCTION
[DRAYAGE TRUCK INCENTIVE] PROGRAM
SECTION 12. The heading to Section 386.181, Health and
Safety Code, is amended to read as follows:
Sec. 386.181. DEFINITIONS [DEFINITION]; RULES.
SECTION 13. Section 386.181(a), Health and Safety Code, is
amended to read as follows:
(a) In this subchapter:
(1) "Cargo handling equipment" means any heavy-duty
non-road, self-propelled vehicle or land-based equipment used at a
seaport or rail yard to lift or move cargo, such as containerized,
bulk, or break-bulk goods.
(2) "Drayage [, "drayage] truck" means a heavy-duty
on-road or non-road vehicle that is used for drayage activities and
that operates in or transgresses through [truck that transports a
load to or from] a seaport or rail yard for the purpose of loading,
unloading, or transporting cargo, including transporting empty
containers and chassis.
SECTION 14. Section 386.182, Health and Safety Code, is
amended to read as follows:
Sec. 386.182. COMMISSION DUTIES. (a) The commission
shall:
(1) develop a purchase incentive program to encourage
owners to replace older drayage trucks and cargo handling equipment
[with pre-2007 model year engines] with newer drayage trucks and
cargo handling equipment; and
(2) [shall] adopt guidelines necessary to implement
the program described by Subdivision (1).
(b) The commission by rule and guideline shall establish
criteria for the models of drayage trucks and cargo handling
equipment that are eligible for inclusion in an incentive program
under this subchapter. [The guidelines must provide that a drayage
truck owner is not eligible for an incentive payment under this
subchapter unless the truck being replaced contains a pre-2007
model year engine and the replacement truck's engine is from model
year 2010 or later as determined by the commission and that the
truck operates at a seaport or rail yard.]
SECTION 15. The heading to Section 386.183, Health and
Safety Code, is amended to read as follows:
Sec. 386.183. DRAYAGE TRUCK AND CARGO HANDLING EQUIPMENT
PURCHASE INCENTIVE.
SECTION 16. Section 386.183, Health and Safety Code, is
amended by amending Subsections (a), (b), (c), (d), and (e) and
adding Subsection (a-1) to read as follows:
(a) To be eligible for an incentive under this subchapter, a
person must:
(1) purchase a replacement drayage truck or cargo
handling equipment that under Subsection (a-1)(1) and the
guidelines adopted by the commission under Section 386.182 is
eligible for inclusion in the program for an incentive under this
subchapter; and
(2) agree to:
(A) register the drayage truck in this state, if
the replacement vehicle is an on-road drayage truck;
(B) operate the drayage truck or cargo handling
equipment in and within a maximum distance established by the
commission of a seaport or rail yard in a nonattainment area of this
state for not less than 50 percent of the truck's or equipment's
[vehicle's] annual mileage or hours of operation, as determined by
the commission; and
(C) permanently remove the [a pre-2007] drayage
truck or cargo handling equipment replaced under the program
[containing a pre-2007 engine owned by the person] from operation
in a nonattainment area of this state by destroying the engine and
scrapping the truck or equipment after the purchase of the
replacement [new] truck or equipment in accordance with guidelines
established by the commission.
(a-1) To be eligible for purchase under this program a
drayage truck or cargo handling equipment must:
(1) be powered by an electric motor or contain an
engine certified to the current federal emissions standards
applicable to that type of engine, as determined by the commission;
and
(2) emit oxides of nitrogen at a rate that is at least
25 percent less than the rate at which the truck or equipment being
replaced under the program emits such pollutants.
(b) To receive money under an incentive program provided by
this subchapter, the purchaser of a drayage truck or cargo handling
equipment eligible for inclusion in the program must apply for the
incentive in the manner provided by law, rule, or guideline of the
commission.
(c) Not more than one incentive may be provided for each
drayage truck or piece of cargo handling equipment purchased.
(d) An incentive provided under this subchapter may be used
to fund not more than 80 percent of the purchase price of the
drayage truck or cargo handling equipment.
(e) The commission shall establish procedures to verify
that a person who receives an incentive:
(1) has operated in a seaport or rail yard and owned or
leased the drayage truck or cargo handling equipment to be replaced
for at least two years prior to receiving the grant; and
(2) permanently destroys the engine and scraps the
drayage truck or cargo handling equipment replaced under the
program [that contained the pre-2007 engine owned or leased by the
person], in accordance with guidelines established by the
commission, after the purchase of the replacement [new] truck or
equipment.
SECTION 17. Section 386.205, Health and Safety Code, is
amended to read as follows:
Sec. 386.205. EVALUATION OF UTILITY COMMISSION AND
COMPTROLLER ENERGY EFFICIENCY PROGRAMS. (a) In cooperation with
the laboratory, the utility commission shall provide an annual
report to the commission that, by county, quantifies the reductions
of energy demand, peak loads, and associated emissions of air
contaminants achieved from programs implemented by the state energy
conservation office and from programs implemented under Section
39.905, Utilities Code.
(b) The report must also quantify the reductions in the
emissions of each air contaminant subject to the permitting
requirements of Chapter 382.
SECTION 18. Section 386.252, Health and Safety Code, is
amended to read as follows:
Sec. 386.252. USE OF FUND. (a) Money in the fund may be
used only to implement and administer programs established under
the plan. Subject to the reallocation of funds by the commission
under Subsection (g), money [Money] appropriated to the commission
to be used for the programs under Section 386.051(b) shall
initially be allocated as follows:
(1) [not more than] four percent may be used for the
clean school bus program under Chapter 390;
(2) [not more than] three percent may be used for the
new technology implementation grant program under Chapter 391, from
which at least $1 million will be set aside for electricity storage
projects related to renewable energy;
(3) five percent may [shall] be used for the clean
fleet program under Chapter 392;
(4) not more than $1.5 [$3] million may be used by the
commission to fund a regional air monitoring program in commission
Regions 3 and 4 to be implemented under the commission's oversight,
including direction regarding the type, number, location, and
operation of, and data validation practices for, monitors funded by
the program through a regional nonprofit entity located in North
Texas having representation from counties, municipalities, higher
education institutions, and private sector interests across the
area;
(5) 10 [not less than 16] percent may [shall] be used
for the Texas natural gas vehicle grant program under Chapter 394;
(6) not more than $6 million [five percent] may be used
[to provide grants for natural gas fueling stations under the clean
transportation triangle program under Section 394.010;
[(7) not more than five percent may be used] for the
Texas alternative fueling facilities program under Chapter 393, of
which a specified amount may be used for fueling stations to provide
natural gas fuel, except that money may not be allocated for the
Texas alternative fueling facilities program for the state fiscal
year ending August 31, 2019;
(7) [(8)] not more than $750,000 [a specified amount]
may be used each year to support research related to air quality as
provided by Chapter 387;
(8) [(9)] not more than $200,000 may be used for a
health effects study[;
[(10) $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];
(9) [(11)] at least $4 million and up to four percent
to a maximum of $8 [$7] million, whichever is greater, is allocated
to the commission for administrative costs, including all direct
and indirect costs for administering the plan and costs for
conducting outreach and education activities;
(10) six [(12) at least two] percent [and up to five
percent of the fund] is to be used by the commission for the seaport
and rail yard areas emissions reduction [drayage truck incentive]
program established under Subchapter D-1;
(11) [(13) not more than] five percent may be used for
the light-duty motor vehicle purchase or lease incentive program
established under Subchapter D;
(12) [(14)] not more than $216,000 is allocated to the
commission to contract with the Energy Systems Laboratory at the
Texas A&M Engineering Experiment Station annually for the
development and annual computation of creditable statewide
emissions reductions and other reductions of air contaminants
subject to the permitting requirements of Chapter 382 that are
obtained through wind and other renewable energy resources for the
state implementation plan;
(13) not more than $500,000 may be used by the
commission to conduct research and other activities associated with
making any necessary demonstrations in the state's air quality
state implementation plan submitted to the United States
Environmental Protection Agency that the excess emissions reported
for an area are the result of a foreign emissions source or an
exceptional event [(15) 1.5 percent of the money in the fund is
allocated for administrative costs incurred by the laboratory]; and
(14) [(16)] the balance is to be used by the
commission for the diesel emissions reduction incentive program
under Subchapter C as determined by the commission.
(b) [The commission may allocate unexpended money
designated for the clean fleet program under Chapter 392 to other
programs described under Subsection (a) after the commission
allocates money to recipients under the clean fleet program.
[(c) The commission may allocate unexpended money
designated for the Texas alternative fueling facilities program
under Chapter 393 to other programs described under Subsection (a)
after the commission allocates money to recipients under the
alternative fueling facilities program.
[(d) The commission may reallocate money designated for the
Texas natural gas vehicle grant program under Chapter 394 to other
programs described under Subsection (a) if:
[(1) the commission, in consultation with the governor
and the advisory board, determines that the use of the money in the
fund for that program will cause the state to be in noncompliance
with the state implementation plan to the extent that federal
action is likely; and
[(2) the commission finds that the reallocation of
some or all of the funding for the program would resolve the
noncompliance.
[(e) Under Subsection (d), the commission may not
reallocate more than the minimum amount of money necessary to
resolve the noncompliance.
[(e-1) Money allocated under Subsection (a) to a particular
program may be used for another program under the plan as determined
by the commission.
[(f)] Money in the fund may be used by the commission for
programs under Sections 386.051(b)(13), (b)(14), and (b-1) as may
be appropriated for those programs.
(c) [(g)] If the legislature does not specify amounts or
percentages from the total appropriation to the commission to be
allocated under Subsection (a) or (b) [(f)], the commission shall
determine the amounts of the total appropriation to be allocated
under each of those subsections, such that the total appropriation
is expended while maximizing emissions reductions.
(d) To supplement funding for air quality planning
activities in affected counties, $500,000 from the fund is to be
deposited annually in the state treasury to the credit of the clean
air account created under Section 382.0622.
(e) Money in the fund may be allocated for administrative
costs incurred by the Energy Systems Laboratory at the Texas A&M
Engineering Experiment Station as may be appropriated by the
legislature.
(f) To the extent that money is appropriated from the fund
for that purpose, the commission may use that money to award grants
under the governmental alternative fuel fleet grant program
established under Chapter 395, except that the commission may not
use for that purpose more than three percent of the balance of the
fund as of September 1 of each state fiscal year of the biennium for
the governmental alternative fuel fleet grant program in that
fiscal year.
(g) [(h)] Subject to the limitations outlined in this
section and any additional limitations placed on the use of the
appropriated funds, money allocated under this section to a
particular program may be used for another program under the plan as
determined by the commission, based on demand for grants for
eligible projects under particular programs after the commission
solicits projects to which to award grants according to the initial
allocation provisions of this section.
SECTION 19. Section 390.002(b), Health and Safety Code, is
amended to read as follows:
(b) Projects that may be considered for a grant under the
program include:
(1) diesel oxidation catalysts for school buses built
before 1994;
(2) diesel particulate filters for school buses built
from 1994 to 1998;
(3) the purchase and use of emission-reducing add-on
equipment for school buses, including devices that reduce crankcase
emissions;
(4) the use of qualifying fuel; [and]
(5) other technologies that the commission finds will
bring about significant emissions reductions; and
(6) replacement of a pre-2007 model year school bus.
SECTION 20. Section 390.004, Health and Safety Code, is
amended by adding Subsections (c) and (d) to read as follows:
(c) A school bus proposed for replacement must:
(1) be of model year 2006 or earlier;
(2) have been owned and operated by the applicant for
at least the two years before submission of the grant application;
(3) be in good operational condition; and
(4) be currently used on a regular, daily route to and
from a school.
(d) A school bus proposed for purchase to replace a pre-2007
model year school bus must be of the current model year or the year
before the current model year at the time of submission of the grant
application.
SECTION 21. Section 390.005, Health and Safety Code, is
amended to read as follows:
Sec. 390.005. RESTRICTION ON USE OF GRANT. (a) A
recipient of a grant under this chapter shall use the grant to pay
the incremental costs of the project for which the grant is made,
which may include 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.
(b) A school bus acquired to replace an existing school bus
must be purchased and the grant recipient must agree to own and
operate the school bus on a regular, daily route to and from a
school for at least five years after a start date established by the
commission, based on the date the commission accepts documentation
of the destruction of the school bus being replaced.
(c) A school bus replaced under this program must be
rendered permanently inoperable by crushing the bus, by making a
hole in the engine block and permanently destroying the frame of the
bus, or by another method approved by the commission, or be
permanently removed from operation in this state. The commission
shall establish criteria for ensuring the permanent destruction or
permanent removal of the engine or bus. The commission shall
enforce the destruction and removal requirements. For purposes of
this subsection, "permanent removal" means the permanent export of
the bus or engine to a destination outside of the United States,
Canada, or the United Mexican States.
SECTION 22. Section 390.006, Health and Safety Code, is
amended to read as follows:
Sec. 390.006. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 23. Section 391.002(b), Health and Safety Code, is
amended to read as follows:
(b) Projects that may be considered for a grant under the
program include:
(1) advanced clean energy projects, as defined by
Section 382.003;
(2) new technology projects that reduce emissions of
regulated pollutants from stationary [point] sources;
(3) new technology projects that reduce emissions from
upstream and midstream oil and gas production, completions,
gathering, storage, processing, and transmission activities
through:
(A) the replacement, repower, or retrofit of
stationary compressor engines;
(B) the installation of systems to reduce or
eliminate the loss of gas, flaring of gas, or burning of gas using
other combustion control devices; or
(C) the installation of systems that reduce
flaring emissions and other site emissions by capturing waste heat
to generate electricity solely for on-site service; and
(4) [(3)] electricity storage projects related to
renewable energy, including projects to store electricity produced
from wind and solar generation that provide efficient means of
making the stored energy available during periods of peak energy
use.
SECTION 24. Section 391.102(f), Health and Safety Code, is
amended to read as follows:
(f) In reviewing a grant application under this chapter
[coordinating interagency application review procedures], the
commission may [shall]:
(1) solicit review and comments from:
(A) the comptroller to assess:
(i) the financial stability of the
applicant;
(ii) the economic benefits and job creation
potential associated with the project; and
(iii) any other information related to the
duties of that office;
(B) the Public Utility Commission of Texas to
assess:
(i) the reliability of the proposed
technology;
(ii) the feasibility and
cost-effectiveness of electric transmission associated with the
project; and
(iii) any other information related to the
duties of that agency; and
(C) the Railroad Commission of Texas to assess:
(i) the availability and cost of the fuel
involved with the project; and
(ii) any other information related to the
duties of that agency; and
(2) consider the comments received under Subdivision
(1) in the commission's grant award decision process[; and
[(3) as part of the report required by Section 391.104,
justify awards made to projects that have been negatively reviewed
by agencies under Subdivision (1)].
SECTION 25. Section 391.104, Health and Safety Code, is
amended to read as follows:
Sec. 391.104. REPORTING REQUIREMENTS. The commission
[annually] shall include in the biennial plan report required by
Section 386.057(b) information [prepare a report] that summarizes
the applications received and grants awarded in the preceding
biennium [year]. Preparation of the information for the report may
[must] include the participation of any [the] state agency
[agencies] involved in the review of applications under Section
391.102, if the commission determines participation of the agency
is needed.
SECTION 26. Section 391.205(a), Health and Safety Code, is
amended to read as follows:
(a) Except as provided by Subsection (c), in awarding grants
under this chapter the commission shall give preference to projects
that:
(1) involve the transport, use, recovery for use, or
prevention of the loss of natural resources originating or produced
in this state;
(2) contain an energy efficiency component; [or]
(3) include the use of solar, wind, or other renewable
energy sources; or
(4) recover waste heat from the combustion of natural
resources and use the heat to generate electricity.
SECTION 27. Section 391.304, Health and Safety Code, is
amended to read as follows:
Sec. 391.304. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 28. Section 392.001(1), Health and Safety Code, is
amended to read as follows:
(1) "Alternative fuel" means a fuel other than
gasoline or diesel fuel, including electricity, compressed natural
gas, liquefied [liquified] natural gas, hydrogen, propane, or a
mixture of fuels containing at least 85 percent methanol by volume.
SECTION 29. Sections 392.002(b) and (c), Health and Safety
Code, are amended to read as follows:
(b) An entity that places 10 [20] or more qualifying
vehicles in service for use entirely in this state during a calendar
year is eligible to participate in the program.
(c) Notwithstanding Subsection (b), an entity that submits
a grant application for 10 [20] or more qualifying vehicles is
eligible to participate in the program even if the commission
denies approval for one or more of the vehicles during the
application process.
SECTION 30. Section 392.003(a), Health and Safety Code, is
amended to read as follows:
(a) A vehicle is a qualifying vehicle that may be considered
for a grant under the program if during the eligibility period
established by the commission [calendar year] the entity purchases
a new on-road vehicle that:
(1) is certified to the appropriate current federal
emissions standards as determined by the commission;
(2) replaces a diesel-powered on-road vehicle of the
same weight classification and use; and
(3) is a hybrid vehicle or fueled by an alternative
fuel.
SECTION 31. Section 392.004(d), Health and Safety Code, is
amended to read as follows:
(d) The commission shall minimize, to the maximum extent
possible, the amount of paperwork required for an application. [An
applicant may be required to submit a photograph or other
documentation of a vehicle identification number, registration
information, inspection information, tire condition, or engine
block identification only if the photograph or documentation is
requested by the commission after the commission has decided to
award a grant to the applicant under this chapter.]
SECTION 32. Section 392.005, Health and Safety Code, is
amended by amending Subsections (c) and (i) and adding Subsection
(c-1) to read as follows:
(c) As a condition of receiving a grant, the qualifying
vehicle must be continuously owned, registered, and operated in the
state by the grant recipient until the earlier of the fifth
anniversary of the activity start date established by the
commission [the date of reimbursement of the grant-funded expenses]
or [until] the date the vehicle has been in operation for 400,000
miles after the activity start date established by the commission
[of reimbursement]. 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 state.
(c-1) For purposes of Subsection (c), the commission shall
establish the activity start date based on the date the commission
accepts verification of the disposition of the vehicle being
replaced.
(i) The executive director may [shall] waive the
requirements of Subsection (b)(2)(A) on a finding of good cause,
which may include a waiver for short lapses in registration or
operation attributable to economic conditions, seasonal work, or
other circumstances.
SECTION 33. Section 392.008, Health and Safety Code, is
amended to read as follows:
Sec. 392.008. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2017].
SECTION 34. Section 393.001, Health and Safety Code, is
amended by amending Subdivision (1) and adding Subdivision (1-a) to
read as follows:
(1) "Alternative fuel" means a fuel other than
gasoline or diesel fuel, other than biodiesel fuel, including
electricity, compressed natural gas, liquefied [liquified] natural
gas, hydrogen, propane, or a mixture of fuels containing at least 85
percent methanol by volume.
(1-a) "Clean transportation zone" means:
(A) counties containing or intersected by a
portion of an interstate highway connecting the cities of Houston,
San Antonio, Dallas, and Fort Worth;
(B) counties located within the area bounded by
the interstate highways described by Paragraph (A);
(C) counties containing or intersected by a
portion of:
(i) an interstate highway connecting San
Antonio to Corpus Christi or Laredo; or
(ii) the most direct route using highways
in the state highway system connecting Corpus Christi and Laredo;
(D) counties located within the area bounded by
the highways described by Paragraph (C);
(E) counties in this state all or part of which
are included in a nonattainment area designated under Section
107(d) of the federal Clean Air Act (42 U.S.C. Section 7407); and
(F) counties designated as affected counties
under Section 386.001.
SECTION 35. Section 393.002, Health and Safety Code, is
amended to read as follows:
Sec. 393.002. PROGRAM. (a) The commission shall establish
and administer the Texas alternative fueling facilities program to
provide fueling facilities for alternative fuel in the clean
transportation zone [nonattainment areas]. Under the program, the
commission shall provide a grant for each eligible facility to
offset the cost of those facilities.
(b) An entity that constructs or[,] reconstructs[, or
acquires] an alternative fueling facility is eligible to
participate in the program.
(c) To ensure that alternative fuel vehicles have access to
fuel and to build the foundation for a self-sustaining market for
alternative fuels in Texas, the commission shall provide for
strategically placed fueling facilities in the clean
transportation zone to enable an alternative fuel vehicle to travel
in those areas relying solely on the alternative fuel.
(d) The commission shall maintain a listing to be made
available to the public online of all vehicle fueling facilities
that have received grant funding, including location and hours of
operation.
SECTION 36. Section 393.003, Health and Safety Code, is
amended by amending Subsections (a) and (b) and adding Subsections
(d) and (e) to read as follows:
(a) An entity operating in this state that constructs or[,]
reconstructs[, or acquires] a facility to [store, compress, or]
dispense alternative fuels may apply for and receive a grant under
the program.
(b) The commission may [adopt guidelines to] allow a
regional planning commission, council of governments, or similar
regional planning agency created under Chapter 391, Local
Government Code, or a private nonprofit organization to apply for
and receive a grant to improve the ability of the program to achieve
its goals.
(d) An application for a grant under the program must
include a certification that the applicant complies with laws,
rules, guidelines, and requirements applicable to taxation of fuel
provided by the applicant at each fueling facility owned or
operated by the applicant. The commission may terminate a grant
awarded under this section without further obligation to the grant
recipient if the commission determines that the recipient did not
comply with a law, rule, guideline, or requirement described by
this subsection. This subsection does not create a cause of action
to contest an application or award of a grant.
(e) The commission shall disburse grants under the program
through a competitive application selection process to offset a
portion of the eligible costs.
SECTION 37. Section 393.004, Health and Safety Code, is
amended to read as follows:
Sec. 393.004. ELIGIBILITY OF FACILITIES FOR GRANTS.
(a) In addition to the requirements of this chapter, the
commission shall establish additional eligibility and
prioritization criteria as needed to implement the program [The
commission by rule shall establish criteria for prioritizing
facilities eligible to receive grants under this chapter. The
commission shall review and revise the criteria as appropriate].
(b) The prioritization criteria established under
Subsection (a) must provide that, for each grant round, the
commission may not award a grant to an entity that does not [To be
eligible for a grant under the program, the entity receiving the
grant must] agree to make the alternative fueling facility
accessible and available to the public [persons not associated with
the entity] at times designated by the grant contract until each
eligible entity that does agree to those terms has been awarded a
grant [agreement].
(c) The commission may not award more than one grant for
each facility.
(d) The commission may give preference to or otherwise limit
grant selections to:
(1) fueling facilities providing specific types of
alternative fuels;
(2) fueling facilities in a specified area or
location; and
(3) fueling facilities meeting other specified
prioritization criteria established by the commission.
(e) For fueling facilities to provide natural gas, the
commission shall give preference to:
(1) facilities providing both liquefied natural gas
and compressed natural gas at a single location;
(2) facilities located not more than one mile from an
interstate highway system;
(3) facilities located in the area in and between the
Houston, San Antonio, and Dallas-Fort Worth areas; and
(4) facilities located in the area in and between the
Corpus Christi, Laredo, and San Antonio areas [A recipient of a
grant under this chapter is not eligible to receive a second grant
under this chapter for the same facility].
SECTION 38. Section 393.005, Health and Safety Code, is
amended to read as follows:
Sec. 393.005. RESTRICTION ON USE OF GRANT. (a) A
recipient of a grant under this chapter shall use the grant only to
pay the costs of the facility for which the grant is made. The
recipient may not use the grant to pay the recipient's:
(1) administrative expenses;
(2) expenses for the purchase of land or an interest in
land; or
(3) expenses for equipment or facility improvements
that are not directly related to the delivery, storage,
compression, or dispensing of the alternative fuel at the facility.
(b) Each grant must be awarded using a contract that
requires the recipient to meet operational, maintenance, and
reporting requirements as specified by the commission.
SECTION 39. Section 393.006, Health and Safety Code, is
amended to read as follows:
Sec. 393.006. AMOUNT OF GRANT. (a) Grants awarded under
this chapter for a facility to provide alternative fuels other than
natural gas may not exceed [For each eligible facility for which a
recipient is awarded a grant under the program, the commission
shall award the grant in an amount equal to] the lesser of:
(1) 50 percent of the sum of the actual eligible costs
incurred by the grant recipient within deadlines established by the
commission [to construct, reconstruct, or acquire the facility]; or
(2) $600,000.
(b) Grants awarded under this chapter for a facility to
provide natural gas may not exceed:
(1) $400,000 for a compressed natural gas facility;
(2) $400,000 for a liquefied natural gas facility; or
(3) $600,000 for a facility providing both liquefied
and compressed natural gas.
SECTION 40. Section 393.007, Health and Safety Code, is
amended to read as follows:
Sec. 393.007. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2018].
SECTION 41. Section 394.001, Health and Safety Code, is
amended by amending Subdivisions (1), (4), (5), and (8) and adding
Subdivisions (1-a) and (7-a) to read as follows:
(1) "Clean transportation zone" has the meaning
assigned by Section 393.001 ["Advisory board" means the Texas
Emissions Reduction Plan Advisory Board].
(1-a) "Certified" includes:
(A) new vehicle or new engine certification by
the United States Environmental Protection Agency; or
(B) certification or approval by the United
States Environmental Protection Agency of a system to convert a
vehicle or engine to operate on an alternative fuel and a
demonstration by the emissions data used to certify or approve the
vehicle or engine, if the commission determines the testing used to
obtain the emissions data is consistent with the testing required
for approval of an alternative fuel conversion system for new and
relatively new vehicles or engines under 40 C.F.R. Part 85.
(4) "Heavy-duty motor vehicle" means a motor vehicle
that [with]:
(A) has a gross vehicle weight rating of more
than 8,500 pounds; and
(B) is certified to or has an engine certified to
the United States Environmental Protection Agency's emissions
standards for heavy-duty vehicles or engines.
(5) "Incremental cost" has the meaning assigned by
Section 386.001 [means the difference between the manufacturer's
suggested retail price of a baseline vehicle, the documented dealer
price of a baseline vehicle, cost to lease or otherwise
commercially finance a baseline vehicle, cost to repower with a
baseline engine, or other appropriate baseline cost established by
the commission, and the actual cost of the natural gas vehicle
purchase, lease, or other commercial financing, or repower].
(7-a) "Natural gas engine" means an engine that
operates:
(A) solely on natural gas, including compressed
natural gas, liquefied natural gas, or liquefied petroleum gas; or
(B) on a combination of diesel fuel and natural
gas, including compressed natural gas, liquefied natural gas, or
liquefied petroleum gas, and is capable of achieving at least 60
percent displacement of diesel fuel with natural gas.
(8) "Natural gas vehicle" means a motor vehicle that
is powered by a natural gas engine [receives not less than 75
percent of its power from compressed or liquefied natural gas].
SECTION 42. Section 394.003(a), Health and Safety Code, is
amended to read as follows:
(a) A vehicle is a qualifying vehicle that may be considered
for a grant under the program if during the eligibility period
established by the commission [calendar year] the entity:
(1) purchased, leased, or otherwise commercially
financed the vehicle as a new on-road heavy-duty or medium-duty
motor vehicle that:
(A) is a natural gas vehicle;
(B) is certified to the appropriate current
federal emissions standards as determined by the commission; and
(C) replaces an on-road heavy-duty or
medium-duty motor vehicle of the same weight classification and
use; [and
[(D) is powered by an engine certified to:
[(i) emit not more than 0.2 grams of
nitrogen oxides per brake horsepower hour; or
[(ii) meet or exceed the United States
Environmental Protection Agency's Bin 5 standard for light-duty
engines when powering the vehicle;] or
(2) repowered the on-road motor vehicle to a natural
gas vehicle powered by a natural gas engine that[:
[(A)] is certified to the appropriate current
federal emissions standards as determined by the commission[; and
[(B) is:
[(i) a heavy-duty engine that is certified
to emit not more than 0.2 grams of nitrogen oxides per brake
horsepower hour; or
[(ii) certified to meet or exceed the
United States Environmental Protection Agency's Bin 5 standard for
light-duty engines when powering the vehicle].
SECTION 43. Section 394.005, Health and Safety Code, is
amended by amending Subsections (a), (b), (c), (f), (g), and (i) and
adding Subsection (c-1) to read as follows:
(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 [after consultation with the advisory board].
(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 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 or medium-duty motor
vehicle that:
(i) is an on-road vehicle that has been
owned, leased, or otherwise commercially financed 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 four [two] years of remaining useful life, as determined in
accordance with criteria established by the commission; [or]
(B) replace a heavy-duty or medium-duty motor
vehicle that:
(i) is owned by the applicant;
(ii) is an on-road vehicle that has been:
(a) owned, leased, or otherwise
commercially financed and operated in Texas as a fleet vehicle for
at least the two years immediately preceding the submission of a
grant application; and
(b) registered in a county located in
the clean transportation zone for at least the two years
immediately preceding the submission of a grant application; and
(iii) otherwise satisfies the mileage,
usage, and useful life requirements established under Paragraph (A)
as determined by documentation associated with the vehicle; or
(C) be a heavy-duty or medium-duty motor vehicle
repowered with a natural gas engine that:
(i) is installed in an on-road vehicle that
has been owned, leased, or otherwise commercially financed 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 installed in an on-road vehicle
that, at the time of the vehicle's repowering, was in operating
condition and had at least four [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, leased, or otherwise
commercially financed and registered and operated in the state by
the grant recipient until the earlier of the fourth anniversary of
the activity start date established by the commission [the date of
reimbursement of the grant-funded expenses] or [until] the date the
vehicle has been in operation for 400,000 miles after the activity
start date established by the commission [of reimbursement]. 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 clean transportation zone[:
[(1) the counties any part of which are included in the
area described by Section 394.010(a); or
[(2) counties designated as nonattainment areas
within the meaning of Section 107(d) of the federal Clean Air Act
(42 U.S.C. Section 7407)].
(c-1) For purposes of Subsection (c), the commission shall
establish the activity start date based on the date the commission
accepts verification of the disposition of the vehicle or engine.
(f) A heavy-duty or medium-duty motor vehicle 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, or be [that] permanently removed
[removes the vehicle] from operation in this state. The commission
shall establish criteria for ensuring the permanent destruction or
permanent removal of the engine or vehicle. The commission shall
enforce the destruction and removal requirements. For purposes of
this subsection, "permanent removal" means the permanent export of
the vehicle or engine to a destination outside of the United States,
Canada, or the United Mexican States.
(g) The commission shall establish baseline emission levels
for emissions of nitrogen oxides for on-road heavy-duty or
medium-duty motor vehicles being replaced or repowered 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 after
consultation with the advisory board].
(i) The executive director may [shall] waive the
requirements of Subsection (b)(2)(A)(i) or (B)(ii) on a finding of
good cause, which may include short lapses in registration or
operation due to economic conditions, seasonal work, or other
circumstances.
SECTION 44. Section 394.006, Health and Safety Code, is
amended to read as follows:
Sec. 394.006. 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 or vehicle repower for which the grant is
made, which may include a portion of the initial cost of the natural
gas vehicle or natural gas engine, including the cost of the natural
gas fuel system and installation [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.
SECTION 45. Section 394.007(c), Health and Safety Code, is
amended to read as follows:
(c) A person may not receive a grant under this chapter
that, when combined with any other grant, tax credit, or other
governmental incentive, exceeds the incremental cost of the vehicle
or vehicle repower for which the grant is awarded. A person shall
return to the commission the amount of a grant awarded under this
chapter that, when combined with any other grant, tax credit, or
other governmental incentive, exceeds the incremental cost of the
vehicle or vehicle repower for which the grant is awarded.
SECTION 46. Sections 394.008(a) and (b), Health and Safety
Code, are amended to read as follows:
(a) The commission shall establish [adopt] procedures for:
(1) awarding grants under this chapter to reimburse
eligible costs; [in the form of rebates; and]
(2) streamlining the grant application, contracting,
reimbursement, and reporting process for qualifying natural gas
vehicle purchases or repowers; and
(3) preapproving the award of grants to applicants who
propose to purchase and replace motor vehicles described by Section
394.005(b)(2)(B).
(b) Procedures established [adopted] under this section
must:
(1) provide for the commission to compile and
regularly update a listing of potentially eligible [preapproved]
natural gas vehicles and natural gas engines that are certified to
the appropriate current federal emissions standards as determined
by the commission[:
[(A) powered by natural gas engines certified to
emit not more than 0.2 grams of nitrogen oxides per brake horsepower
hour; or
[(B) certified to the United States
Environmental Protection Agency's light-duty Bin 5 standard or
better];
(2) [if a federal standard for the calculation of
emissions reductions exists,] 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 grant [rebate] amount for
each qualifying vehicle or engine repower under Section 394.007;
(4) allow for processing applications [rebates] on an
ongoing first-come, first-served basis;
(5) [provide for contracts between the commission and
participating dealers under Section 394.009;
[(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;
(6) [(8)] provide for payment not later than the 30th
day after the date the request for reimbursement for an approved
grant is received;
(7) [(9)] provide for application submission and
application status checks using procedures established by the
commission, which may include application submission and status
checks to be made over the Internet; and
(8) [(10)] consolidate, simplify, and reduce the
administrative work for applicants and the commission associated
with grant application, contracting, reimbursement, and reporting
requirements.
SECTION 47. Section 394.012, Health and Safety Code, is
amended to read as follows:
Sec. 394.012. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2017].
SECTION 48. Subtitle C, Title 5, Health and Safety Code, is
amended by adding Chapter 395 to read as follows:
CHAPTER 395. GOVERNMENTAL ALTERNATIVE FUEL FLEET GRANT PROGRAM
Sec. 395.001. DEFINITIONS. In this chapter:
(1) "Alternative fuel" means compressed natural gas,
liquefied natural gas, liquefied petroleum gas, hydrogen fuel
cells, or electricity, including electricity to power fully
electric motor vehicles and plug-in hybrid electric motor vehicles.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Incremental cost" has the meaning assigned by
Section 386.001.
(4) "Motor vehicle" means a self-propelled device
designed for transporting persons or property on a public highway
that is required to be registered under Chapter 502, Transportation
Code.
(5) "Political subdivision" means a school district,
junior college district, river authority, water district or other
special district, or other political subdivision created under the
constitution or a statute of this state, other than a county or
municipality.
(6) "Program" means the governmental alternative fuel
fleet grant program established under this chapter.
(7) "State agency" has the meaning assigned by Section
2151.002, Government Code.
Sec. 395.002. PROGRAM. (a) The commission shall establish
and administer a governmental alternative fuel fleet grant program
to assist an eligible state agency, county, municipality, or
political subdivision in purchasing or leasing new motor vehicles
that operate primarily on an alternative fuel.
(b) The program may provide a grant to a state agency,
county, municipality, or political subdivision to:
(1) purchase or lease a new motor vehicle described by
Section 395.004; or
(2) purchase, lease, or install refueling
infrastructure or equipment or procure refueling services as
described by Section 395.005 to store and dispense alternative fuel
needed for a motor vehicle described by Subdivision (1) of this
subsection.
Sec. 395.003. ELIGIBLE APPLICANTS. (a) A state agency,
county, or municipality is eligible to apply for a grant under the
program if the entity operates a fleet of more than 15 motor
vehicles, excluding motor vehicles that are owned and operated by a
private company or other third party under a contract with the
entity.
(b) A mass transit or school transportation provider or
other public entity established to provide public or school
transportation services is eligible for a grant under the program.
Sec. 395.004. MOTOR VEHICLE REQUIREMENTS. (a) A grant
recipient may purchase or lease with money from a grant under the
program a new motor vehicle that is originally manufactured to
operate using one or more alternative fuels or is converted to
operate using one or more alternative fuels before the first retail
sale of the vehicle, and that:
(1) has a dedicated system, dual-fuel system, or
bi-fuel system; and
(2) if the motor vehicle is a fully electric motor
vehicle or plug-in hybrid electric motor vehicle, has a United
States Environmental Protection Agency rating of at least 75 miles
per gallon equivalent or a 75-mile combined city and highway range.
(b) A grant recipient may not use money from a grant under
the program to replace a motor vehicle, transit bus, or school bus
that operates on an alternative fuel unless the replacement vehicle
produces fewer emissions and has greater fuel efficiency than the
vehicle being replaced.
Sec. 395.005. REFUELING INFRASTRUCTURE, EQUIPMENT, AND
SERVICES. A grant recipient may purchase, lease, or install
refueling infrastructure or equipment or procure refueling
services with money from a grant under the program if:
(1) the purchase, lease, installation, or procurement
is made in conjunction with the purchase or lease of a motor vehicle
as described by Section 395.004 or the conversion of a motor vehicle
to operate primarily on an alternative fuel;
(2) the grant recipient demonstrates that a refueling
station that meets the needs of the recipient is not available
within five miles of the location at which the recipient's vehicles
are stored or primarily used; and
(3) for the purchase or installation of refueling
infrastructure or equipment, the infrastructure or equipment will
be owned and operated by the grant recipient, and for the lease of
refueling infrastructure or equipment or the procurement of
refueling services, a third-party service provider engaged by the
grant recipient will provide the infrastructure, equipment, or
services.
Sec. 395.006. ELIGIBLE COSTS. (a) A motor vehicle lease
agreement paid for with money from a grant under the program must
have a term of at least three years.
(b) Refueling infrastructure or equipment purchased or
installed with money from a grant under the program must be used
specifically to store or dispense alternative fuel, as determined
by the commission.
(c) A lease of or service agreement for refueling
infrastructure, equipment, or services paid for with money from a
grant under the program must have a term of at least three years.
Sec. 395.007. GRANT AMOUNTS. (a) The commission may
establish standardized grant amounts based on the incremental costs
associated with the purchase or lease of different categories of
motor vehicles, including the type of fuel used, vehicle class, and
other categories the commission considers appropriate.
(b) In determining the incremental costs and setting the
standardized grant amounts, the commission may consider the
difference in cost between a new motor vehicle operated using
conventional gasoline or diesel fuel and a new motor vehicle
operated using alternative fuel.
(c) The amount of a grant for the purchase or lease of a
motor vehicle may not exceed the amount of the incremental cost of
the purchase or lease.
(d) The commission may establish grant amounts to reimburse
the full cost of the purchase, lease, installation, or procurement
of refueling infrastructure, equipment, or services or may
establish criteria for reimbursing a percentage of the cost.
(e) A grant under the program may be combined with funding
from other sources, including other grant programs, except that a
grant may not be combined with other funding or grants from the
Texas emissions reduction plan. When combined with other funding
sources, a grant may not exceed the total cost to the grant
recipient.
(f) In providing a grant for the lease of a motor vehicle
under this chapter, the commission shall establish criteria:
(1) to offset incremental costs through an up-front
payment to lower the cost basis of the lease; or
(2) if determined appropriate by the commission, to
provide for reimbursement of lease payments over no more than the
period of availability of the contracted funds under applicable
state law and regulation, which may be less than the required
three-year lease term.
(g) In providing a grant for the lease of refueling
infrastructure, equipment, or services, the commission shall
establish criteria:
(1) to offset incremental costs through an up-front
payment to lower the cost basis of the lease; or
(2) if determined appropriate by the commission, to
provide for reimbursement of lease payments over no more than the
period of availability of the contracted funds under applicable
state law and regulation, which may be less than the required
three-year lease term.
(h) Notwithstanding Subsection (d), the commission is not
obligated to fund the full cost of the purchase, lease,
installation, or procurement of refueling infrastructure,
equipment, or services if those costs cannot be incurred and
reimbursed over the period of availability of the funds under
applicable state law and regulation.
Sec. 395.008. AVAILABILITY OF EMISSIONS REDUCTION CREDITS.
(a) A project that is funded from a grant under the program and
that would generate marketable emissions reduction credits under a
state or federal emissions reduction credit averaging, banking, or
trading program is not eligible for funding under the program
unless:
(1) the project includes the transfer of the credits,
or the reductions that would otherwise be marketable credits, to
the commission and, if applicable, the state implementation plan;
and
(2) the credits or reductions, as applicable, are
permanently retired.
(b) An emissions reduction generated by a purchase or lease
under this chapter may be used to demonstrate conformity with the
state implementation plan.
Sec. 395.009. USE OF GRANT MONEY BY COUNTY OR MUNICIPALITY.
A county or municipality shall prioritize the actions listed in
Section 2158.0051(b), Government Code, when using money from a
grant under the program.
Sec. 395.010. GRANT PROCEDURES AND CRITERIA. (a) The
commission shall establish specific criteria and procedures in
order to implement and administer the program, including the
creation and provision of application forms and guidance on the
application process.
(b) The commission shall award a grant through a contract
between the commission and the grant recipient.
(c) The commission shall provide an online application
process for the submission of all required application documents.
(d) The commission may limit funding for a particular period
according to priorities established by the commission, including
limiting the availability of grants to specific entities, for
certain types of vehicles and infrastructure, or to certain
geographic areas to ensure equitable distribution of grant funds
across the state.
(e) In awarding grants under the program, the commission
shall prioritize projects that:
(1) are proposed by a state agency;
(2) are in or near a nonattainment area;
(3) are in an affected county, as that term is defined
by Section 386.001; and
(4) will produce the greatest emissions reductions.
(f) In addition to the requirements under Subsection (e), in
awarding grants under the program, the commission shall consider:
(1) the effectiveness of a proposed project in
assisting an applicant in complying with Section 2158.0051,
Government Code;
(2) the total amount of the emissions reduction that
would be achieved from the project;
(3) the type and number of vehicles purchased or
leased;
(4) the location of the fleet and the refueling
infrastructure or equipment;
(5) the number of vehicles served and the rate at which
vehicles are served by the refueling infrastructure or equipment;
(6) the amount of any matching funds committed by the
applicant; and
(7) the schedule for project completion.
(g) The commission may not award more than 10 percent of the
total amount awarded under the program in any fiscal year for
purchasing, leasing, installing, or procuring refueling
infrastructure, equipment, or services.
Sec. 395.011. FUNDING. The legislature may appropriate
money to the commission from the Texas emissions reduction plan
fund established under Section 386.251 to administer the program.
Sec. 395.012. ADMINISTRATIVE COSTS. In each fiscal year,
the commission may use up to 1.5 percent of the total amount of
money allocated to the program in that fiscal year, but not more
than $1 million, for the administrative costs of the program.
Sec. 395.013. RULES. The commission may adopt rules as
necessary to implement this chapter.
Sec. 395.014. REPORT REQUIRED. On or before November 1 of
each even-numbered year, the commission shall submit to the
governor, lieutenant governor, and members of the legislature a
report that includes the following information regarding awards
made under the program during the preceding state fiscal biennium:
(1) the number of grants awarded under the program;
(2) the recipient of each grant awarded;
(3) the number of vehicles replaced;
(4) the number, type, and location of any refueling
infrastructure, equipment, or services funded under the program;
(5) the total emissions reductions achieved under the
program; and
(6) any other information the commission considers
relevant.
Sec. 395.015. EXPIRATION. This chapter expires on the last
day of the state fiscal biennium during which the United States
Environmental Protection Agency publishes in the Federal Register
certification that, with respect to each national ambient air
quality standard for ozone under 40 C.F.R. Section 81.344, the
agency has, for each designated area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area.
SECTION 49. Section 151.0515(d), Tax Code, is amended to
read as follows:
(d) This section expires on the last day of the state fiscal
biennium during which the United States Environmental Protection
Agency publishes in the Federal Register certification that, with
respect to each national ambient air quality standard for ozone
under 40 C.F.R. Section 81.344, the agency has, for each designated
area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 50. Section 152.0215(c), Tax Code, is amended to
read as follows:
(c) This section expires on the last day of the state fiscal
biennium during which the United States Environmental Protection
Agency publishes in the Federal Register certification that, with
respect to each national ambient air quality standard for ozone
under 40 C.F.R. Section 81.344, the agency has, for each designated
area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 51. Sections 501.138(b-1), (b-2), and (b-3),
Transportation Code, are amended to read as follows:
(b-1) Fees collected under Subsection (b) to be sent to the
comptroller shall be deposited to the credit of the Texas Mobility
Fund[, except that $5 of each fee imposed under Subsection (a)(1)
and deposited on or after September 1, 2008, and before September 1,
2015, shall be deposited to the credit of the Texas emissions
reduction plan fund].
(b-2) The comptroller shall establish a record of the amount
of the fees deposited to the credit of the Texas Mobility Fund under
Subsection (b-1) that are attributable to applicants described by
Subsection (b)(3)(A). On or before the fifth workday of each month,
the Texas Department of Transportation shall remit to the
comptroller for deposit to the credit of the Texas emissions
reduction plan fund an amount of money equal to the amount of the
fees deposited by the comptroller to the credit of the Texas
Mobility Fund under Subsection (b-1) that are attributable to
applicants described by Subsection (b)(3)(A) in the preceding
month. The Texas Department of Transportation shall use for
remittance to the comptroller as required by this subsection money
in the state highway fund that is not required to be used for a
purpose specified by Section 7-a, Article VIII, Texas Constitution,
and may not use for that remittance money received by this state
under the congestion mitigation and air quality improvement program
established under 23 U.S.C. Section 149.
(b-3) This subsection and Subsection (b-2) expire August
31, 2021 [2019].
SECTION 52. Section 502.358(c), Transportation Code, is
amended to read as follows:
(c) This section expires on the last day of the state fiscal
biennium during which the United States Environmental Protection
Agency publishes in the Federal Register certification that, with
respect to each national ambient air quality standard for ozone
under 40 C.F.R. Section 81.344, the agency has, for each designated
area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 53. The heading to Section 548.5055, Transportation
Code, is amended to read as follows:
Sec. 548.5055. TEXAS EMISSIONS [EMISSION] REDUCTION PLAN
FEE.
SECTION 54. Sections 548.5055(b) and (c), Transportation
Code, are amended to read as follows:
(b) The department shall remit fees collected under this
section to the comptroller at the time and in the manner prescribed
by the comptroller for deposit in the Texas emissions [emission]
reduction plan fund.
(c) This section expires on the last day of the state fiscal
biennium during which the United States Environmental Protection
Agency publishes in the Federal Register certification that, with
respect to each national ambient air quality standard for ozone
under 40 C.F.R. Section 81.344, the agency has, for each designated
area under that section:
(1) designated the area as attainment or
unclassifiable; or
(2) approved a redesignation substitute making a
finding of attainment for the area [August 31, 2019].
SECTION 55. Sections 394.009, 394.010, and 394.011, Health
and Safety Code, are repealed.
SECTION 56. (a) The changes in law made by this Act apply
only to a Texas emissions reduction plan grant awarded on or after
the effective date of this Act. A grant awarded before the
effective date of this Act is governed by the law in effect on the
date the award was made, and the former law is continued in effect
for that purpose.
(b) The changes in law made by this Act to Section 501.138,
Transportation Code, apply only to a fee collected on or after the
effective date of this Act. A fee collected before the effective
date of this Act is governed by the law in effect when the fee was
collected, and the former law is continued in effect for that
purpose.
SECTION 57. This Act takes effect August 30, 2017.