By: Ordaz H.B. No. 4519
A BILL TO BE ENTITLED
AN ACT
relating to programs established and funded 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;
(11)(10) 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;
(12)(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;
(13)(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;
(14)(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);
(15)(18) the governmental alternative fuel fleet
grant program established under Chapter 395; and
(16)(19) remittance of funds to the state highway fund
for use by the Texas Department of Transportation for congestion
mitigation and air quality improvement projects in nonattainment
areas and affected counties.; and
(20) the Texas hydrogen infrastructure, vehicle, and
equipment grant program established under Subchapter G.
SECTION 2. Section 386.0515, Health and Safety Code, is
amended to read as follows:
Sec. 386.0515. AGRICULTURAL PRODUCT TRANSPORTATION
PROJECTS. (a) In this section:
(1) "Agricultural product transportation" means the
transportation of a raw agricultural product from the place of
production using a heavy-duty truck to:
(A) a nonattainment area;
(B) an affected county;
(C) a destination inside the clean
transportation zone; or
(D) a county adjacent to a county described by
Paragraph (B) or that contains an area described by Paragraph (A) or
(C).
(2) "Clean transportation zone" has the meaning
assigned by Section 392.001393.001.
(b) Notwithstanding other eligibility requirements, the
commission shall by rule or policy provide specific eligibility
requirements under the Texas Clean Fleet Program established under
Chapter 392 and under the Texas natural gas vehicle grant program
established under Chapter 394, as added by Chapter 892 (Senate Bill
No. 385), Acts of the 82nd Legislature, Regular Session, 2011, for
projects relating to agricultural product transportation.
(c) The determining factor for eligibility for
participation in a program established under Chapter 392 or 394 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.
SECTION 3. Chapter 386, Health and Safety Code, is amended
by striking Subchapter (D-1).
SECTION 4. Section 386.252(a), Health and Safety Code, is
amended to read as follows:
(a) Money in the fund and account 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) and after remittance to the state highway fund under
Subsection (a-1), money from the fund and account 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) eightthree percent total may be used between the
Texas hydrogen infrastructure, vehicle, and equipment grant
program established under Chapter 392 Subchapter G andfor 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 and not more than $8 million
may be used for the Texas hydrogen infrastructure, vehicle, and
equipment grant program;
(3) fivetwenty-seven 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) 7.5 percent may be used for the Texas natural gas
vehicle grant program under Chapter 394;
(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;
(5)(7) not more than $750,000 may be used each year to
support research related to air quality as provided by Chapter 387;
(6)(8) not more than $200,000 may be used for a health
effects study;
(7)(9) at least $6 million but not more than 15 percent
may be used by 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;
(8)(11) 2.5 percent may be used for the light-duty
motor vehicle purchase or lease incentive program established under
Subchapter D;
(9)(12) not more than $500,000 may be used by 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 for the state implementation plan that are
obtained through:
(A) wind and other renewable energy resources;
(B) energy efficiency programs administered by
the Public Utility Commission of Texas or the State Energy
Conservation Office; or
(C) the implementation of advanced building
energy codes;
(10)(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
(11)(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 5. Chapter 386, Health and Safety Code, is amended
by striking Subchapter G.
SECTION 6. Chapter 390, Health and Safety Code, is amended
by adding Section 390.0045 to read as follows:
Sec. 390.0045. 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 390.004 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.
SECTION 7. Strike Chapter 392, Health and Safety Code and
replace with the following:
CHAPTER 392: TEXAS CLEAN FLEET PROGRAM
SUBCHAPTER A: GENERAL PROVISIONS
Sec. 392.001. DEFINITIONS. In this chapter:
(1) "Alternative fuel" means a fuel other than
gasoline or diesel fuel, including electricity, compressed natural
gas, liquefied natural gas, hydrogen, propane, or a mixture of
fuels containing at least 85 percent methanol by volume.
(2) "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.
(3) "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) "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 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.
(5) "Commission" means the Texas Commission on
Environmental Quality.
(6) "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 a seaport or rail yard for the
purpose of loading, unloading, or transporting cargo, including
transporting empty containers and chassis.
(7) "Executive director" means the executive director
of the Texas Commission on Environmental Quality.
(8) "Golf cart" has the meaning assigned by Section
551.401, Transportation Code.
(9) "Heavy-duty motor vehicle" means a motor vehicle
that:
(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.
(10) "Hybrid vehicle" means a vehicle with at least
two different energy converters and two different energy storage
systems on board the vehicle for the purpose of propelling the
vehicle.
(11) "Hydrogen vehicle or equipment" means a
heavy-duty motor vehicle or piece of heavy-duty equipment that uses
hydrogen to operate the vehicle or equipment, including through the
use of hydrogen fuel cells or an internal combustion engine that
runs on hydrogen.
(12) "Incremental cost" has the meaning assigned by
Section 386.001.
(13) "Light-duty motor vehicle" has the meaning
assigned by Section 386.151.
(14) "Motor vehicle" has the meaning assigned by
Section 386.151.
(15) "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.
(16) "Natural gas vehicle" means a motor vehicle that
is powered by a natural gas engine.
(17) "Neighborhood electric vehicle" means a motor
vehicle that:
(A) is originally manufactured to meet, and does
meet, the equipment requirements and safety standards established
for "low-speed vehicles" in Federal Motor Vehicle Safety Standard
No. 500 (49 C.F.R. Section 571.500);
(B) is a slow-moving vehicle, as defined by
Section 547.001, Transportation Code, that is able to attain a
speed of more than 20 miles per hour but not more than 25 miles per
hour in one mile on a paved, level surface;
(C) is a four-wheeled motor vehicle;
(D) is powered by electricity or alternative
power sources;
(E) has a gross vehicle weight rating of less
than 3,000 pounds; and
(F) is not a golf cart.
(18) "Program" means the Texas clean fleet program
established under this chapter.
(19) "Repower" means to replace an old engine powering
a vehicle with a new engine, a used engine, a remanufactured engine,
or electric motors, drives, or fuel cells.
Sec. 392.002. PROGRAM. (a) The commission shall establish
and administer the Texas clean fleet program to encourage a person
that has diesel-powered vehicles to replace them with alternative
fuel or hybrid vehicles. Under the program, the commission shall
provide grants for eligible projects to offset the incremental cost
of projects for fleet owners that reduce emissions of oxides of
nitrogen from high-emitting sources in nonattainment areas and
affected counties of this state.
(b) Projects that may be considered for a grant under the
program include:
(1) purchase or lease of on-road or non-road
alternative fuel or hybrid vehicles;
(2) replacement or repowering of on-road or non-road
diesels with alternative fuel or hybrid vehicles;
(3) replacement or repowering of older drayage trucks
and cargo handling equipment with newer drayage trucks and cargo
handling equipment designed for operation at a seaport or rail yard
in a nonattainment area of this state;
(4) use of qualifying fuel; and
(5) implementation of infrastructure projects.
(c) A project listed in Subsection (b) is not eligible if it
is required by any state or federal law, rule or regulation,
memorandum of agreement, or other legally binding document. This
subsection does not apply to:
(1) an otherwise qualified project, regardless of the
fact that the state implementation plan assumes that the change in
vehicles, equipment, or operations will occur, if on the date the
grant is awarded the change is not required by any state or federal
law, rule or regulation, memorandum of agreement, or other legally
binding document; or
(2) the purchase of an alternate fuel or hybrid
vehicle or infrastructure required only by local law or regulation
or by corporate or controlling board policy of a public or private
entity.
Sec. 392.003. QUALIFYING VEHICLES. (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 purchases, leases, or otherwise commercially
finances a new on-road or non-road vehicle or, subject to
Subsection (c), a used alternative fuel vehicle that:
(1) is certified to the appropriate current federal
emissions standards as determined by the commission;
(2) replaces a diesel-powered on-road or non-road
vehicle of the same weight classification and use;
(3) is a hybrid vehicle or fueled by an alternative
fuel; and
(4) emits oxides of nitrogen at a rate that is at least
25 percent less than the rate at which the former engine in the
vehicle or equipment being repowered under the program emits such
pollutants.
(b) A vehicle is not a qualifying vehicle if the vehicle:
(1) is a neighborhood electric vehicle or other light
duty motor vehicle;
(2) has been used as a qualifying vehicle to qualify
for a grant under this chapter for a previous reporting period or by
another entity; or
(3) has qualified for a similar grant in another
jurisdiction if that grant is relied on for credit in the state
implementation plan.
(c) A used alternative fuel vehicle that is proposed to
replace an on-road heavy-duty or medium-duty motor vehicle must be
of model year 2017 or later, provided that the model year may not be
more than six years older than the current model year at the time of
the submission of the grant application.
Sec. 392.0035. DRAYAGE TRUCKS AND CARGO HANDLING EQUIPMENT.
To be eligible for purchase under this program:
(1) a drayage truck or cargo handling equipment must:
(A) 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
(B) 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; and
(2) an engine repowering a drayage truck or cargo
handling equipment must:
(A) be an electric motor or an engine certified
to the current federal emissions standards applicable to that type
of engine, as determined by the commission; and
(B) emit oxides of nitrogen at a rate that is at
least 25 percent less than the rate at which the former engine in
the truck or equipment being repowered under the program emits such
pollutants.
Sec. 392.004. REFUELING INFRASTRUCTURE, EQUIPMENT, AND
SERVICES. (a) 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 392.003 or Section 392.0035;
(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.
(b) An applicant only seeking funds through the Texas
Alternative Fueling Facilities Program described in Section
392.019 is not subject to the requirements of Subsection (a).
Sec. 392.005. APPLICATION FOR GRANT. (a) The commission
shall develop a simple, standardized application package for grants
under this subchapter. The package must include:
(1) an application form;
(2) a brief description of:
(A) the program;
(B) the projects that are eligible for available
funding;
(C) the selection criteria and evaluation
process; and
(D) the required documentation;
(3) the name of a person or office to contact for more
information;
(4) an example of the contract that an applicant will
be required to execute before receiving a grant; and
(5) any other information the commission considers
useful to inform the applicant and expedite the application
process.
(b) The application form shall require as much information
as the commission determines is necessary to properly evaluate each
project but shall otherwise minimize the information required.
(c) The commission may allow an entity to seek funds for
multiple projects established by this chapter through a single
application, provided that an applicant follows all requirements
specified by this chapter and all criteria established by the
commission for any specific project.
(d) The application form shall be made publicly available no
later than 30 days prior to the opening of the program.
(e) All applications submitted under this chapter shall be
considered on a competitive basis.
(f) 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.
Sec. 392.006. APPLICATION REVIEW PROCEDURES. (a) The
commission shall review an application for a grant for a project
authorized under this subchapter. If the commission determines
that an application is incomplete, the commission shall notify the
applicant with an explanation of what is missing from the
application. The commission shall evaluate the completed
application according to the appropriate project criteria. Subject
to available funding, the commission shall make a final
determination on an application as soon as possible.
(b) The commission shall make every effort to expedite the
application review process and to award grants to qualified
projects in a timely manner. To the extent possible, the commission
shall coordinate project review and approval with any timing
constraints related to project purchases or installations to be
made by an applicant.
(c) The commission may deny an application for a project
that does not meet the applicable project criteria or that the
commission determines is not made in good faith, is not credible, or
is not in compliance with this chapter and the goals of this
chapter.
(d) Subject to availability of funds, the commission shall
award a grant under this subchapter in conjunction with the
execution of a contract that obligates the commission to make the
grant and the recipient to perform the actions described in the
recipient's grant application. The contract must incorporate
provisions for recapturing grant money in proportion to any loss of
emissions reductions compared with the volume of emissions
reductions that was projected in awarding the grant. Grant money
recaptured under the contract provision shall be deposited in the
fund and reallocated for other projects under this chapter.
(e) The commission shall 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.
SUBCHAPTER B: ALLOCATION OF FUNDS, GRANT ELIGIBILITY, AND GRANT
RESTRICTIONS.
Sec. 392.010. ALLOCATION OF FUNDS. (a) Money initially
awarded to the Texas clean fleet program from Section 386.252(a),
Health and Safety Code, shall be allocated to the following
projects as follows:
(1) 28 percent for the Texas Natural Gas Vehicle Grant
program;
(2) 22.5 percent for the Texas Seaport and Rail Yard
Grant program;
(3) 18.5 percent for the Texas Large Fleet Program;
(4) 17.5 percent for the Texas Hydrogen
Infrastructure, Vehicle, and Equipment Grant program; and
(5) 13.5 percent for the Texas Alternative Fueling
Facilities Program.
(b) Subject to the limitations outlined in this Subsection,
money allocated under this section to a particular project may be
used for another project in this section as determined by the
commission, based on demand for grants for eligible projects after
the commission solicits projects to which to award grants according
to the initial allocation provisions of this section. If the
commission determines there is not sufficient demand under the
projects of this section, the commission may redirect funds to
other programs under the Texas Emissions Reduction Plan, as
provided by Section 386.252(h) of the Health and Safety Code.
(c) The commission will ensure payment for awards is made
not later than the 30th day after the date the request for
reimbursement for an approved grant is received.
Section 392.011. ELIGIBILITY OF PROJECTS FOR GRANTS. (a)
The commission by rule shall establish criteria for prioritizing
projects eligible to receive grants under this chapter. The
commission shall review and revise the criteria as appropriate.
(b) To be eligible for a grant for the replacement or
repowering of a motor vehicle under the program, a project must:
(1) result in a reduction in emissions of nitrogen
oxides or other pollutants, as established by the commission, of at
least 25 percent, 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) replace or repower a vehicle that:
(A) 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;
(B) satisfies any minimum average annual mileage
or fuel usage requirements established by the commission;
(C) satisfies any minimum percentage of annual
usage requirements established by the commission; and
(D) is in operating condition and has at least
two years of remaining useful life, as determined in accordance
with criteria established by the commission.
(c) As a condition of receiving a grant, the qualifying
vehicle must be continuously owned, 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 or the date the vehicle has been in operation for 400,000
miles after the activity start date established by the commission.
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.
(d) The commission shall include and enforce the usage
provisions in the grant contracts. The commission shall monitor
compliance with the contract requirements, including submission of
reports on at least an annual basis, or more frequently as
determined by the commission.
(e) The commission by contract may require the return of all
or a portion of grant funds for a grant recipient's noncompliance
with the usage and percentage of use requirements under this
section.
(f) A vehicle or engine replaced under this program must be
rendered permanently inoperable by crushing the vehicle, by making
a hole in the engine block and permanently destroying the frame of
the vehicle, or by another method approved by the commission that
permanently removes the vehicle from operation in this state. The
commission shall provide a means for an applicant to propose an
alternative method of complying with the requirements of this
subsection. The commission shall enforce the requirements of this
subsection.
(g) The commission shall establish baseline emission levels
for emissions of nitrogen oxides for on-road vehicles being
replaced. The commission may consider and establish baseline
emission rates for additional pollutants of concern, as determined
by the commission.
(h) Mileage requirements established by the commission
under Subsection (b)(2)(B) may differ by vehicle weight categories
and type of use.
(i) The executive director may waive the requirements of
Subsection (b)(2)(A) or of Subsection (f) 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.
(j) An applicant only seeking funds through the Texas
Alternative Fueling Facilities Program described in Section
392.019 is not subject to the requirements of this Subsection.
Sec. 392.012. RESTRICTION ON USE OF GRANT. (a) A recipient
of a grant under this chapter shall use the grant to pay the
incremental costs of any purchase, replacement, or repowering
project for which the grant is made, which may include the initial
cost of the alternative fuel or hybrid vehicle, 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.
(b) The commission, or its designee, shall oversee the grant
process and is responsible for final approval of any grant.
(c) Grant recipients are responsible for meeting all grant
conditions, including reporting and monitoring as required by the
commission through the grant contract.
SUBCHAPTER C: TEXAS CLEAN FLEET PROGRAM PROJECTS.
Sec. 392.015. TEXAS NATURAL GAS VEHICLE GRANT PROGRAM. (a)
In addition to the provisions of Section 392.011(c), not less than
75 percent of the annual use of the qualifying natural gas vehicle,
either mileage or fuel use as determined by the commission, must
occur in the clean transportation zone.
(b) 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.
The recipient may not use the grant to pay the recipient's
administrative expenses.
(c) 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 natural gas vehicle 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 natural gas vehicle; and
(B) the usage of the natural gas vehicle; and
(3) may take into account the overall emissions
reduction achieved by the natural gas vehicle.
(d) Not less than 60 percent of the total amount of grants
awarded under this subsection for the purchase and repowering of
motor vehicles must be awarded to motor vehicles with a gross
vehicle weight rating of at least 33,001 pounds. The minimum grant
requirement under this subsection does not apply if the commission
does not receive enough grant applications to satisfy the
requirement for motor vehicles described by this subsection that
are eligible to receive a grant under this chapter.
(e) A person may not receive a grant under this subsection
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.
(f) 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 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.
(g) The commission shall establish criteria for:
(1) awarding grants under this chapter to reimburse
eligible costs;
(2) the commission to compile and regularly update a
listing of potentially eligible natural gas vehicles and natural
gas engines that are certified to the appropriate current federal
emissions standards as determined by the commission;
(3) 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) assigning a standardized grant amount for each
qualifying vehicle or engine repower under this subsection; and
(4) requiring grant applicants to identify natural gas
fueling stations that are available to fuel the qualifying vehicle
in the area of its use.
Section 392.016. TEXAS SEAPORT AND RAIL YARD GRANT PROGRAM.
(a) The commission shall establish criteria for the engines and the
models of drayage trucks and cargo handling equipment that are
eligible for inclusion in an incentive program under this
subchapter.
(b) In addition to provisions under this chapter, to be
eligible for an incentive under this subchapter, a person must
agree to:
(1) register the drayage truck in this state, if the
replacement or repowered vehicle is an on-road drayage truck; and
(2) operate the replacement or repowered 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 annual mileage or hours of operation, as
determined by the commission.
(c) To receive money under an incentive program provided by
this subchapter, the purchaser of a drayage truck, piece of cargo
handling equipment, or engine eligible for inclusion in the program
must apply for the incentive in the manner provided by law, rule, or
guideline of the commission.
(d) Not more than one incentive may be provided for each
drayage truck or piece of cargo handling equipment purchased or
repowered.
(e) An incentive provided under this subchapter may be used
to fund not more than 80 percent of, as applicable, the purchase
price of:
(1) the drayage truck or cargo handling equipment; or
(2) the engine and any other eligible costs associated
with repowering the drayage truck or cargo handling equipment, as
determined by the commission.
Section 392.017. TEXAS HYDROGEN INFRASTRUCTURE, VEHICLE,
AND EQUIPMENT GRANT PROGRAM. (a) The commission shall prioritize
the awarding of grants under this subchapter in the following
order:
(1) projects to replace on-road heavy-duty vehicles
with newer on-road hydrogen vehicles;
(2) projects to purchase, lease, repower, or convert
on-road heavy-duty vehicles with a powertrain that runs on or is
powered by hydrogen;
(3) projects to implement hydrogen refueling
infrastructure that will be accessible and available to the public
at times designated by the grant contract;
(4) projects to replace non-road heavy-duty vehicles
with newer non-road hydrogen vehicles; and
(5) projects to purchase, lease, repower, or convert
non-road heavy-duty vehicles with a powertrain that runs on or is
powered by hydrogen.
(b) Subject to Subsection (a), in awarding grants under this
subsection, the commission shall give preference to the most
cost-effective projects that will result in the greatest reduction
in emissions of oxides of nitrogen.
(c) The commission shall establish additional eligibility
and prioritization criteria as needed to implement the project.
Section 392.018. TEXAS LARGE FLEET PROGRAM. (a) An entity
operating in this state that operates a fleet of at least 75
vehicles may apply for and receive a grant under the program.
(b) An entity that places 10 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 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.
(d) The amount the commission shall award for each vehicle
being replaced is up to 80 percent, as determined by the commission,
of the total cost for replacement of a heavy-duty or light-duty
diesel engine. The commission may revise the standards for
determining grant amounts, as needed to reflect changes to federal
emission standards and decisions on pollutants of concern.
Section 392.019. TEXAS ALTERNATIVE FUELING FACILITIES
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.
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 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.
(e) An entity operating in this state that constructs or
reconstructs a facility to dispense alternative fuels may apply for
and receive a grant under the program.
(f) In addition to the requirements of this chapter, the
commission shall establish additional eligibility and
prioritization criteria as needed to implement the program.
(g) The prioritization criteria established under
Subsection (f) must provide that, for each grant round, the
commission may not award a grant to an entity that does not agree to
make the alternative fueling facility accessible and available to
the public at times designated by the grant contract until each
eligible entity that does agree to those terms has been awarded a
grant.
(h) The commission may not award more than one grant for
each facility.
(i) 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.
(j) 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.
(k) 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. In addition to requirements under this chapter, the recipient
may not use the grant to pay the recipient's:
(1) expenses for the purchase of land or an interest in
land; or
(2) 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.
(l) Each grant must be awarded using a contract that
requires the recipient to meet operational, maintenance, and
reporting requirements as specified by the commission.
(m) Grants awarded under this chapter for a facility to
provide alternative fuels other than natural gas may not exceed 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; or
(2) $600,000.
(n) 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.
Sec. 392.020. 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 8. Strike Chapter 393, Health and Safety Code.
SECTION 9. Strike Chapter 394, Health and Safety Code.
SECTION 10. This Act takes effect September 1, 2025.