86R7468 JRR-D
By: Zaffirini S.B. No. 2154
A BILL TO BE ENTITLED
AN ACT
relating to the administration of certain programs under the Texas
emissions reduction plan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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);
(9) a contract with the Energy Systems Laboratory at
the Texas A&M Engineering Experiment Station for computation of
creditable statewide emissions reductions as provided by Section
386.252(a);
(10) the Texas clean fleet program established under
Chapter 392;
(11) the Texas alternative fueling facilities program
established under Chapter 393;
(12) the Texas natural gas vehicle grant 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;
(15) the seaport and rail yard areas emissions
reduction program established under Subchapter D-1;
(16) conducting research and other activities
associated with making any necessary demonstrations to the United
States Environmental Protection Agency to account for the impact of
foreign emissions or an exceptional event;
(17) studies of or pilot programs for incentives for
port authorities located in nonattainment areas or affected
counties as provided by Section 386.252(a); [and]
(18) the governmental alternative fuel fleet grant
program established under Chapter 395; and
(19) the Texas non-road natural gas grant program
established under Chapter 394A.
SECTION 2. Section 386.252(a), Health and Safety Code, is
amended to read as follows:
(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 (h), money
appropriated to the commission to be used for the programs under
Section 386.051(b) shall initially be allocated as follows:
(1) four percent may be used for the clean school bus
program under Chapter 390;
(2) 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 be used for the Texas clean fleet
program under Chapter 392;
(4) not more than $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 percent may be used for the Texas natural gas
vehicle grant program under Chapter 394 and the Texas non-road
natural gas grant program established under Chapter 394A;
(6) not more than $6 million 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) not more than $750,000 may be used each year to
support research related to air quality as provided by Chapter 387;
(8) not more than $200,000 may be used for a health
effects study;
(9) at least $6 million but not more than $8 million is
allocated to the commission for administrative costs, including all
direct and indirect costs for administering the plan, costs for
conducting outreach and education activities, and costs
attributable to the review or approval of applications for
marketable emissions reduction credits;
(10) six percent may be used by the commission for the
seaport and rail yard areas emissions reduction program established
under Subchapter D-1;
(11) five percent may be used for the light-duty motor
vehicle purchase or lease incentive program established under
Subchapter D;
(12) 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 obtained through wind and other renewable
energy resources for the state implementation plan;
(13) not more than $500,000 may be used for studies of
or pilot programs for incentives for port authorities located in
nonattainment areas or affected counties to encourage cargo
movement that reduces emissions of nitrogen oxides and particulate
matter; and
(14) the balance is to be used by the commission for
the diesel emissions reduction incentive program under Subchapter C
as determined by the commission.
SECTION 3. Section 393.001(1-a), Health and Safety Code, is
amended to read as follows:
(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;
(ii) the most direct route using highways
in the state highway system connecting Corpus Christi and Laredo;
or
(iii) a highway corridor connecting Corpus
Christi and Houston;
(D) counties located within the area bounded by
the highways described by Paragraph (C);
(E) counties containing or intersected by a
portion of:
(i) a United States highway connecting
Houston and Texarkana; or
(ii) a highway corridor connecting Houston
and Texarkana;
(F) counties containing or intersected by a
portion of an interstate highway connecting the cities of Dallas
and Texarkana;
(G) 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
(H) [(F)] counties designated as affected
counties under Section 386.001.
SECTION 4. 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 the entity:
(1) purchased, leased, or otherwise commercially
financed the vehicle as an [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; or
(2) repowered the on-road motor vehicle to a natural
gas vehicle powered by a natural gas engine that is certified to the
appropriate current federal emissions standards as determined by
the commission.
SECTION 5. Section 394.005(b), Health and Safety Code, is
amended to read as follows:
(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 qualifying
[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 two years of remaining useful life, as determined in
accordance with criteria established by the commission;
(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 two years of remaining useful life, as
determined in accordance with criteria established by the
commission; and
(3) if the qualifying vehicle is a used natural gas
vehicle, the vehicle must be of model year 2014 or later.
SECTION 6. Subtitle C, Title 5, Health and Safety Code, is
amended by adding Chapter 394A to read as follows:
CHAPTER 394A. TEXAS NON-ROAD NATURAL GAS GRANT PROGRAM
Sec. 394A.001. DEFINITIONS. In this chapter:
(1) "Clean transportation zone" has the meaning
assigned by Section 393.001.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Executive director" means the executive director
of the commission.
(4) "Incremental cost" has the meaning assigned by
Section 386.001.
(5) "Natural gas engine" has the meaning assigned by
Section 394.001.
(6) "Non-road engine" has the meaning assigned by
Section 386.101.
(7) "Non-road natural gas vehicle or equipment" means
a vehicle or piece of equipment that is powered by a natural gas
engine.
(8) "Non-road vehicle or equipment" means a vehicle or
piece of equipment, excluding a motor vehicle as defined by Section
386.151 or a non-road natural gas vehicle or equipment, that is
powered by a non-road engine, including:
(A) non-road nonrecreational equipment and
vehicles;
(B) construction equipment;
(C) locomotives; and
(D) marine vessels.
(9) "Program" means the Texas non-road natural gas
grant program established under this chapter.
Sec. 394A.002. PROGRAM. The commission shall establish and
administer the Texas non-road natural gas grant program to
encourage an entity that has a non-road vehicle or equipment to
repower the vehicle or equipment with a natural gas engine or
replace the vehicle or equipment with a non-road natural gas
vehicle or equipment. Under the program, the commission shall
provide grants for eligible non-road vehicles or equipment to
offset the incremental cost for the entity of repowering or
replacing the non-road vehicle or equipment.
Sec. 394A.003. QUALIFYING VEHICLES AND EQUIPMENT. (a) A
vehicle or piece of equipment is a qualifying vehicle or equipment
that may be considered for a grant under the program if during the
eligibility period established by the commission the entity:
(1) purchased, leased, or otherwise commercially
financed the vehicle as a new non-road vehicle or equipment that:
(A) is a non-road natural gas vehicle or
equipment;
(B) is certified to the appropriate current
federal emissions standards as determined by the commission; and
(C) replaces a non-road vehicle or equipment of
the same weight classification and use; or
(2) repowered the non-road vehicle or equipment to a
non-road natural gas vehicle or equipment powered by a natural gas
engine that is certified to the appropriate current federal
emissions standards as determined by the commission.
(b) A non-road vehicle or equipment is not a qualifying
vehicle or equipment if the vehicle or equipment or the natural gas
engine powering the vehicle or equipment:
(1) has been awarded a grant under this chapter for a
previous reporting period; or
(2) has received a similar grant or tax credit in
another jurisdiction if that grant or tax credit program is relied
on for credit in the state implementation plan.
Sec. 394A.004. APPLICATION FOR GRANT. (a) Only an entity
operating in this state that operates a non-road vehicle or
equipment may apply for and receive a grant under this chapter.
(b) An application for a grant under this chapter must be
made on a form provided by the commission and must contain the
information required by the commission.
(c) The commission, after consulting stakeholders, shall:
(1) simplify the application form; and
(2) minimize, to the maximum extent possible,
documentation required for an application.
Sec. 394A.005. ELIGIBILITY FOR GRANTS. (a) The commission
shall establish criteria for prioritizing qualifying vehicles and
equipment eligible to receive grants under this chapter. The
commission shall review and revise the criteria as appropriate.
(b) To be eligible for a grant under the program:
(1) the use of the qualifying vehicle or equipment
must be projected to result in a reduction in emissions of nitrogen
oxides of at least 25 percent as compared to the vehicle, equipment,
or engine being replaced, based on:
(A) the baseline emission level set by the
commission under Subsection (h); and
(B) the certified emission rate of the new
vehicle or equipment; and
(2) the qualifying vehicle or equipment must:
(A) replace a non-road vehicle or equipment that:
(i) has been owned, leased, or otherwise
commercially financed and operated by the applicant in Texas for at
least the two years immediately preceding the submission of a grant
application;
(ii) satisfies any minimum average annual
mileage or fuel usage requirements established by the commission;
(iii) satisfies any minimum percentage of
annual usage requirements established by the commission; and
(iv) is in operating condition and has at
least two years of remaining useful life, as determined in
accordance with criteria established by the commission; or
(B) be a non-road vehicle or equipment repowered
with a natural gas engine that:
(i) is installed in a non-road vehicle or
equipment that has been owned, leased, or otherwise commercially
financed 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 a non-road vehicle or
equipment that, at the time of the vehicle's or equipment's
repowering, was in operating condition and had at least two years of
remaining useful life, as determined in accordance with criteria
established by the commission.
(c) As a condition of receiving a grant, the qualifying
vehicle or equipment must be continuously owned, leased, or
otherwise commercially financed 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 or a date
specified by the commission that takes into account the vehicle's
or equipment's usage after the activity start date established by
the commission. Not less than 75 percent of the annual use of the
qualifying vehicle or equipment, either mileage or fuel use as
determined by the commission, must occur in the clean
transportation zone.
(d) 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, equipment,
or engine, as applicable.
(e) The commission shall include and enforce the usage
provisions in the grant contracts. The commission shall monitor
compliance with the ownership, leasing, and usage requirements,
including submission of reports on at least an annual basis, or more
frequently as determined by the commission.
(f) The commission by contract may require the return of all
or a portion of grant funds for a grant recipient's noncompliance
with the usage and percentage of use requirements under this
section.
(g) A non-road vehicle or equipment replaced under this
program must be rendered permanently inoperable by crushing the
vehicle or equipment, by making a hole in the engine block and
permanently destroying the frame of the vehicle or equipment, 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 vehicle, equipment, or engine, as
applicable. The commission shall enforce the destruction and
removal requirements. For purposes of this subsection, "permanent
removal" means the permanent export of the vehicle, equipment, or
engine to a destination outside of the United States, Canada, or the
United Mexican States.
(h) The commission shall establish baseline emission levels
for emissions of nitrogen oxides for non-road vehicles or equipment
being replaced or repowered by using the emission certification for
the vehicle, equipment, or engine being replaced. The commission
may consider deterioration of the emission performance of the
engine of the vehicle or equipment being replaced in establishing
the baseline emission level. The commission may consider and
establish baseline emission rates for additional pollutants of
concern.
(i) Mileage or fuel use requirements established by the
commission under Subsection (b)(2)(A)(ii) may differ by vehicle or
equipment weight categories and type of use.
(j) The executive director may waive the requirements of
Subsection (b)(2)(A)(i) on a finding of good cause, which may
include short lapses in operation due to economic conditions,
seasonal work, or other circumstances.
Sec. 394A.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 engine repower for which
the grant is made, which may include a portion of the initial cost
of the non-road natural gas vehicle or equipment or natural gas
engine, including the cost of the natural gas fuel system and
installation. The recipient may not use the grant to pay the
recipient's administrative expenses.
Sec. 394A.007. AMOUNT OF GRANT. (a) The commission shall
develop a grant schedule that:
(1) assigns a standardized grant in an amount up to 90
percent of the incremental cost of a non-road natural gas vehicle or
equipment purchase, lease, other commercial finance, or
repowering;
(2) is based on:
(A) the certified emission level of nitrogen
oxides, or other pollutants as determined by the commission, of the
engine powering the non-road natural gas vehicle or equipment; and
(B) the usage of the non-road natural gas vehicle
or equipment; and
(3) may take into account the overall emissions
reduction achieved by the non-road natural gas vehicle or
equipment.
(b) 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 equipment or engine 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 equipment or engine repower for which the
grant is awarded.
(c) The commission shall reduce the amount of a grant
awarded under this chapter as necessary to keep the combined
incentive total at or below the incremental cost of the vehicle or
equipment for which the grant is awarded if the grant recipient is
eligible to receive an automatic incentive at or before the time a
grant is awarded under this chapter.
Sec. 394A.008. GRANT PROCEDURES. (a) The commission shall
establish procedures for:
(1) awarding grants under this chapter to reimburse
eligible costs; and
(2) streamlining the grant application, contracting,
reimbursement, and reporting process for qualifying non-road
natural gas vehicle or equipment purchases or repowers.
(b) Procedures established under this section must:
(1) provide for the commission to compile and
regularly update a listing of potentially eligible non-road natural
gas vehicles and equipment and natural gas engines that are
certified to the appropriate current federal emissions standards as
determined by the commission;
(2) provide a method to calculate the reduction in
emissions of nitrogen oxides, volatile organic compounds, carbon
monoxide, particulate matter, and sulfur compounds for each
replacement or repowering;
(3) assign a standardized grant amount for each
qualifying vehicle or equipment or engine repower under Section
394A.007;
(4) allow for processing applications on an ongoing
first-come, first-served basis;
(5) require grant applicants to identify natural gas
fueling stations that are available to fuel the qualifying vehicle
or equipment in the area of its use;
(6) provide for payment not later than the 30th day
after the date the request for reimbursement for an approved grant
is received;
(7) 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) consolidate, simplify, and reduce the
administrative work for applicants and the commission associated
with grant application, contracting, reimbursement, and reporting
requirements.
(c) The commission, or its designee, shall oversee the grant
process and is responsible for final approval of any grant.
(d) Grant recipients are responsible for meeting all grant
conditions, including reporting and monitoring as required by the
commission through the grant contract.
Sec. 394A.009. EXPIRATION. This chapter expires on the
last day of the state fiscal biennium during which the commission
publishes in the Texas Register the notice required by Section
382.037.
SECTION 7. 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.
SECTION 8. This Act takes effect September 1, 2019.