Texas 2025 - 89th Regular

Texas House Bill HB4519 Compare Versions

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1	1		By: Ordaz H.B. No. 4519
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to programs established and funded under the Texas
7	9		emissions reduction plan.
8	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	11		SECTION 1. Section 386.051(b), Health and Safety Code, is
10	12		amended to read as follows:
11	13		(b) Under the plan, the commission and the comptroller shall
12	14		provide grants or other funding for:
13	15		(1) the diesel emissions reduction incentive program
14	16		established under Subchapter C, including for infrastructure
15	17		projects established under that subchapter;
16	18		(2) the motor vehicle purchase or lease incentive
17	19		program established under Subchapter D;
18	20		(3) the air quality research support program
19	21		established under Chapter 387;
20	22		(4) the clean school bus program established under
21	23		Chapter 390;
22	24		(5) the new technology implementation grant program
23	25		established under Chapter 391;
24	26		(6) the regional air monitoring program established
25	27		under Section 386.252(a);
26	28		(7) a health effects study as provided by Section
27	29		386.252(a);
28	30		(8) air quality planning activities as provided by
29	31		Section 386.252(d);
30	32		(9) a contract with the Energy Systems Laboratory at
31	33		the Texas A&M Engineering Experiment Station for computation of
32	34		creditable statewide emissions reductions as provided by Section
33	35		386.252(a);
34	36		(10) the Texas clean fleet program established under
35	37		Chapter 392;
36	38		(11) the Texas alternative fueling facilities program
37	39		established under Chapter 393;
38	40		(12) the Texas natural gas vehicle grant program
39	41		established under Chapter 394;
40	42		(11)(10) other programs the commission may develop
41	43		that lead to reduced emissions of nitrogen oxides, particulate
42	44		matter, or volatile organic compounds in a nonattainment area or
43	45		affected county;
44	46		(12)(14) other programs the commission may develop
45	47		that support congestion mitigation to reduce mobile source ozone
46	48		precursor emissions;
47	49		(15) the seaport and rail yard areas emissions
48	50		reduction program established under Subchapter D-1;
49	51		(13)(16) conducting research and other activities
50	52		associated with making any necessary demonstrations to the United
51	53		States Environmental Protection Agency to account for the impact of
52	54		foreign emissions or an exceptional event;
53	55		(14)(17) studies of or pilot programs for incentives
54	56		for port authorities located in nonattainment areas or affected
55	57		counties as provided by Section 386.252(a);
56	58		(15)(18) the governmental alternative fuel fleet
57	59		grant program established under Chapter 395; and
58	60		(16)(19) remittance of funds to the state highway fund
59	61		for use by the Texas Department of Transportation for congestion
60	62		mitigation and air quality improvement projects in nonattainment
61	63		areas and affected counties.; and
62	64		(20) the Texas hydrogen infrastructure, vehicle, and
63	65		equipment grant program established under Subchapter G.
64	66		SECTION 2. Section 386.0515, Health and Safety Code, is
65	67		amended to read as follows:
66	68		Sec. 386.0515. AGRICULTURAL PRODUCT TRANSPORTATION
67	69		PROJECTS. (a) In this section:
68	70		(1) "Agricultural product transportation" means the
69	71		transportation of a raw agricultural product from the place of
70	72		production using a heavy-duty truck to:
71	73		(A) a nonattainment area;
72	74		(B) an affected county;
73	75		(C) a destination inside the clean
74	76		transportation zone; or
75	77		(D) a county adjacent to a county described by
76	78		Paragraph (B) or that contains an area described by Paragraph (A) or
77	79		(C).
78	80		(2) "Clean transportation zone" has the meaning
79	81		assigned by Section 392.001393.001.
80	82		(b) Notwithstanding other eligibility requirements, the
81	83		commission shall by rule or policy provide specific eligibility
82	84		requirements under the Texas Clean Fleet Program established under
83	85		Chapter 392 and under the Texas natural gas vehicle grant program
84	86		established under Chapter 394, as added by Chapter 892 (Senate Bill
85	87		No. 385), Acts of the 82nd Legislature, Regular Session, 2011, for
86	88		projects relating to agricultural product transportation.
87	89		(c) The determining factor for eligibility for
88	90		participation in a program established under Chapter 392 or 394 for
89	91		a project relating to agricultural product transportation is the
90	92		overall accumulative net reduction in emissions of oxides of
91	93		nitrogen in a nonattainment area, an affected county, or the clean
92	94		transportation zone.
93	95		SECTION 3. Chapter 386, Health and Safety Code, is amended
94	96		by striking Subchapter (D-1).
95	97		SECTION 4. Section 386.252(a), Health and Safety Code, is
96	98		amended to read as follows:
97	99		(a) Money in the fund and account may be used only to
98	100		implement and administer programs established under the plan.
99	101		Subject to the reallocation of funds by the commission under
100	102		Subsection (h) and after remittance to the state highway fund under
101	103		Subsection (a-1), money from the fund and account to be used for the
102	104		programs under Section 386.051(b) shall initially be allocated as
103	105		follows:
104	106		(1) four percent may be used for the clean school bus
105	107		program under Chapter 390;
106	108		(2) eightthree percent total may be used between the
107	109		Texas hydrogen infrastructure, vehicle, and equipment grant
108	110		program established under Chapter 392 Subchapter G andfor the new
109	111		technology implementation grant program under Chapter 391, from
110	112		which at least $1 million will be set aside for electricity storage
111	113		projects related to renewable energy and not more than $8 million
112	114		may be used for the Texas hydrogen infrastructure, vehicle, and
113	115		equipment grant program;
114	116		(3) fivetwenty-seven percent may be used for the
115	117		Texas clean fleet program under Chapter 392;
116	118		(4) not more than $3 million may be used by the
117	119		commission to fund a regional air monitoring program in commission
118	120		Regions 3 and 4 to be implemented under the commission's oversight,
119	121		including direction regarding the type, number, location, and
120	122		operation of, and data validation practices for, monitors funded by
121	123		the program through a regional nonprofit entity located in North
122	124		Texas having representation from counties, municipalities, higher
123	125		education institutions, and private sector interests across the
124	126		area;
125	127		(5) 7.5 percent may be used for the Texas natural gas
126	128		vehicle grant program under Chapter 394;
127	129		(6) not more than $6 million may be used for the Texas
128	130		alternative fueling facilities program under Chapter 393, of which
129	131		a specified amount may be used for fueling stations to provide
130	132		natural gas fuel, except that money may not be allocated for the
131	133		Texas alternative fueling facilities program for the state fiscal
132	134		year ending August 31, 2019;
133	135		(5)(7) not more than $750,000 may be used each year to
134	136		support research related to air quality as provided by Chapter 387;
135	137		(6)(8) not more than $200,000 may be used for a health
136	138		effects study;
137	139		(7)(9) at least $6 million but not more than 15 percent
138	140		may be used by the commission for administrative costs, including
139	141		all direct and indirect costs for administering the plan, costs for
140	142		conducting outreach and education activities, and costs
141	143		attributable to the review or approval of applications for
142	144		marketable emissions reduction credits;
143	145		(10) six percent may be used by the commission for the
144	146		seaport and rail yard areas emissions reduction program established
145	147		under Subchapter D-1;
146	148		(8)(11) 2.5 percent may be used for the light-duty
147	149		motor vehicle purchase or lease incentive program established under
148	150		Subchapter D;
149	151		(9)(12) not more than $500,000 may be used by the
150	152		commission to contract with the Energy Systems Laboratory at the
151	153		Texas A&M Engineering Experiment Station annually for the
152	154		development and annual computation of creditable statewide
153	155		emissions reductions for the state implementation plan that are
154	156		obtained through:
155	157		(A) wind and other renewable energy resources;
156	158		(B) energy efficiency programs administered by
157	159		the Public Utility Commission of Texas or the State Energy
158	160		Conservation Office; or
159	161		(C) the implementation of advanced building
160	162		energy codes;
161	163		(10)(13) not more than $500,000 may be used for
162	164		studies of or pilot programs for incentives for port authorities
163	165		located in nonattainment areas or affected counties to encourage
164	166		cargo movement that reduces emissions of nitrogen oxides and
165	167		particulate matter; and
166	168		(11)(14) the balance is to be used by the commission
167	169		for the diesel emissions reduction incentive program under
168	170		Subchapter C as determined by the commission.
169	171		SECTION 5. Chapter 386, Health and Safety Code, is amended
170	172		by striking Subchapter G.
171	173		SECTION 6. Chapter 390, Health and Safety Code, is amended
172	174		by adding Section 390.0045 to read as follows:
173	175		Sec. 390.0045. REFUELING INFRASTRUCTURE, EQUIPMENT, AND
174	176		SERVICES. A grant recipient may purchase, lease, or install
175	177		refueling infrastructure or equipment or procure refueling
176	178		services with money from a grant under the program if:
177	179		(1) the purchase, lease, installation, or procurement
178	180		is made in conjunction with the purchase or lease of a motor vehicle
179	181		as described by Section 390.004 or the conversion of a motor vehicle
180	182		to operate primarily on an alternative fuel;
181	183		(2) the grant recipient demonstrates that a refueling
182	184		station that meets the needs of the recipient is not available
183	185		within five miles of the location at which the recipient's vehicles
184	186		are stored or primarily used; and
185	187		(3) for the purchase or installation of refueling
186	188		infrastructure or equipment, the infrastructure or equipment will
187	189		be owned and operated by the grant recipient, and for the lease of
188	190		refueling infrastructure or equipment or the procurement of
189	191		refueling services, a third-party service provider engaged by the
190	192		grant recipient will provide the infrastructure, equipment, or
191	193		services.
192	194		SECTION 7. Strike Chapter 392, Health and Safety Code and
193	195		replace with the following:
194	196		CHAPTER 392: TEXAS CLEAN FLEET PROGRAM
195	197		SUBCHAPTER A: GENERAL PROVISIONS
196	198		Sec. 392.001. DEFINITIONS. In this chapter:
197	199		(1) "Alternative fuel" means a fuel other than
198	200		gasoline or diesel fuel, including electricity, compressed natural
199	201		gas, liquefied natural gas, hydrogen, propane, or a mixture of
200	202		fuels containing at least 85 percent methanol by volume.
201	203		(2) "Cargo handling equipment" means any heavy-duty
202	204		non-road, self-propelled vehicle or land-based equipment used at a
203	205		seaport or rail yard to lift or move cargo, such as containerized,
204	206		bulk, or break-bulk goods.
205	207		(3) "Certified" includes:
206	208		(A) new vehicle or new engine certification by
207	209		the United States Environmental Protection Agency; or
208	210		(B) certification or approval by the United
209	211		States Environmental Protection Agency of a system to convert a
210	212		vehicle or engine to operate on an alternative fuel and a
211	213		demonstration by the emissions data used to certify or approve the
212	214		vehicle or engine, if the commission determines the testing used to
213	215		obtain the emissions data is consistent with the testing required
214	216		for approval of an alternative fuel conversion system for new and
215	217		relatively new vehicles or engines under 40 C.F.R. Part 85.
216	218		(4) "Clean transportation zone" means:
217	219		(A) counties containing or intersected by a
218	220		portion of an interstate highway connecting the cities of Houston,
219	221		San Antonio, Dallas, and Fort Worth;
220	222		(B) counties located within the area bounded by
221	223		the interstate highways described by Paragraph (A);
222	224		(C) counties containing or intersected by a
223	225		portion of:
224	226		(i) an interstate highway connecting San
225	227		Antonio to Corpus Christi or Laredo;
226	228		(ii) the most direct route using highways
227	229		in the state highway system connecting Corpus Christi and Laredo;
228	230		or
229	231		(iii) a highway corridor connecting Corpus
230	232		Christi and Houston;
231	233		(D) counties located within the area bounded by
232	234		the highways described by Paragraph (C);
233	235		(E) counties in this state all or part of which
234	236		are included in a nonattainment area designated under Section
235	237		107(d) of the federal Clean Air Act (42 U.S.C. Section 7407); and
236	238		(F) counties designated as affected counties
237	239		under Section 386.001.
238	240		(5) "Commission" means the Texas Commission on
239	241		Environmental Quality.
240	242		(6) "Drayage truck" means a heavy-duty on-road or
241	243		non-road vehicle that is used for drayage activities and that
242	244		operates in or transgresses through a seaport or rail yard for the
243	245		purpose of loading, unloading, or transporting cargo, including
244	246		transporting empty containers and chassis.
245	247		(7) "Executive director" means the executive director
246	248		of the Texas Commission on Environmental Quality.
247	249		(8) "Golf cart" has the meaning assigned by Section
248	250		551.401, Transportation Code.
249	251		(9) "Heavy-duty motor vehicle" means a motor vehicle
250	252		that:
251	253		(A) has a gross vehicle weight rating of more
252	254		than 8,500 pounds; and
253	255		(B) is certified to or has an engine certified to
254	256		the United States Environmental Protection Agency's emissions
255	257		standards for heavy-duty vehicles or engines.
256	258		(10) "Hybrid vehicle" means a vehicle with at least
257	259		two different energy converters and two different energy storage
258	260		systems on board the vehicle for the purpose of propelling the
259	261		vehicle.
260	262		(11) "Hydrogen vehicle or equipment" means a
261	263		heavy-duty motor vehicle or piece of heavy-duty equipment that uses
262	264		hydrogen to operate the vehicle or equipment, including through the
263	265		use of hydrogen fuel cells or an internal combustion engine that
264	266		runs on hydrogen.
265	267		(12) "Incremental cost" has the meaning assigned by
266	268		Section 386.001.
267	269		(13) "Light-duty motor vehicle" has the meaning
268	270		assigned by Section 386.151.
269	271		(14) "Motor vehicle" has the meaning assigned by
270	272		Section 386.151.
271	273		(15) "Natural gas engine" means an engine that
272	274		operates:
273	275		(A) solely on natural gas, including compressed
274	276		natural gas, liquefied natural gas, or liquefied petroleum gas; or
275	277		(B) on a combination of diesel fuel and natural
276	278		gas, including compressed natural gas, liquefied natural gas, or
277	279		liquefied petroleum gas, and is capable of achieving at least 60
278	280		percent displacement of diesel fuel with natural gas.
279	281		(16) "Natural gas vehicle" means a motor vehicle that
280	282		is powered by a natural gas engine.
281	283		(17) "Neighborhood electric vehicle" means a motor
282	284		vehicle that:
283	285		(A) is originally manufactured to meet, and does
284	286		meet, the equipment requirements and safety standards established
285	287		for "low-speed vehicles" in Federal Motor Vehicle Safety Standard
286	288		No. 500 (49 C.F.R. Section 571.500);
287	289		(B) is a slow-moving vehicle, as defined by
288	290		Section 547.001, Transportation Code, that is able to attain a
289	291		speed of more than 20 miles per hour but not more than 25 miles per
290	292		hour in one mile on a paved, level surface;
291	293		(C) is a four-wheeled motor vehicle;
292	294		(D) is powered by electricity or alternative
293	295		power sources;
294	296		(E) has a gross vehicle weight rating of less
295	297		than 3,000 pounds; and
296	298		(F) is not a golf cart.
297	299		(18) "Program" means the Texas clean fleet program
298	300		established under this chapter.
299	301		(19) "Repower" means to replace an old engine powering
300	302		a vehicle with a new engine, a used engine, a remanufactured engine,
301	303		or electric motors, drives, or fuel cells.
302	304		Sec. 392.002. PROGRAM. (a) The commission shall establish
303	305		and administer the Texas clean fleet program to encourage a person
304	306		that has diesel-powered vehicles to replace them with alternative
305	307		fuel or hybrid vehicles. Under the program, the commission shall
306	308		provide grants for eligible projects to offset the incremental cost
307	309		of projects for fleet owners that reduce emissions of oxides of
308	310		nitrogen from high-emitting sources in nonattainment areas and
309	311		affected counties of this state.
310	312		(b) Projects that may be considered for a grant under the
311	313		program include:
312	314		(1) purchase or lease of on-road or non-road
313	315		alternative fuel or hybrid vehicles;
314	316		(2) replacement or repowering of on-road or non-road
315	317		diesels with alternative fuel or hybrid vehicles;
316	318		(3) replacement or repowering of older drayage trucks
317	319		and cargo handling equipment with newer drayage trucks and cargo
318	320		handling equipment designed for operation at a seaport or rail yard
319	321		in a nonattainment area of this state;
320	322		(4) use of qualifying fuel; and
321	323		(5) implementation of infrastructure projects.
322	324		(c) A project listed in Subsection (b) is not eligible if it
323	325		is required by any state or federal law, rule or regulation,
324	326		memorandum of agreement, or other legally binding document. This
325	327		subsection does not apply to:
326	328		(1) an otherwise qualified project, regardless of the
327	329		fact that the state implementation plan assumes that the change in
328	330		vehicles, equipment, or operations will occur, if on the date the
329	331		grant is awarded the change is not required by any state or federal
330	332		law, rule or regulation, memorandum of agreement, or other legally
331	333		binding document; or
332	334		(2) the purchase of an alternate fuel or hybrid
333	335		vehicle or infrastructure required only by local law or regulation
334	336		or by corporate or controlling board policy of a public or private
335	337		entity.
336	338		Sec. 392.003. QUALIFYING VEHICLES. (a) A vehicle is a
337	339		qualifying vehicle that may be considered for a grant under the
338	340		program if during the eligibility period established by the
339	341		commission the entity purchases, leases, or otherwise commercially
340	342		finances a new on-road or non-road vehicle or, subject to
341	343		Subsection (c), a used alternative fuel vehicle that:
342	344		(1) is certified to the appropriate current federal
343	345		emissions standards as determined by the commission;
344	346		(2) replaces a diesel-powered on-road or non-road
345	347		vehicle of the same weight classification and use;
346	348		(3) is a hybrid vehicle or fueled by an alternative
347	349		fuel; and
348	350		(4) emits oxides of nitrogen at a rate that is at least
349	351		25 percent less than the rate at which the former engine in the
350	352		vehicle or equipment being repowered under the program emits such
351	353		pollutants.
352	354		(b) A vehicle is not a qualifying vehicle if the vehicle:
353	355		(1) is a neighborhood electric vehicle or other light
354	356		duty motor vehicle;
355	357		(2) has been used as a qualifying vehicle to qualify
356	358		for a grant under this chapter for a previous reporting period or by
357	359		another entity; or
358	360		(3) has qualified for a similar grant in another
359	361		jurisdiction if that grant is relied on for credit in the state
360	362		implementation plan.
361	363		(c) A used alternative fuel vehicle that is proposed to
362	364		replace an on-road heavy-duty or medium-duty motor vehicle must be
363	365		of model year 2017 or later, provided that the model year may not be
364	366		more than six years older than the current model year at the time of
365	367		the submission of the grant application.
366	368		Sec. 392.0035. DRAYAGE TRUCKS AND CARGO HANDLING EQUIPMENT.
367	369		To be eligible for purchase under this program:
368	370		(1) a drayage truck or cargo handling equipment must:
369	371		(A) be powered by an electric motor or contain an
370	372		engine certified to the current federal emissions standards
371	373		applicable to that type of engine, as determined by the commission;
372	374		and
373	375		(B) emit oxides of nitrogen at a rate that is at
374	376		least 25 percent less than the rate at which the truck or equipment
375	377		being replaced under the program emits such pollutants; and
376	378		(2) an engine repowering a drayage truck or cargo
377	379		handling equipment must:
378	380		(A) be an electric motor or an engine certified
379	381		to the current federal emissions standards applicable to that type
380	382		of engine, as determined by the commission; and
381	383		(B) emit oxides of nitrogen at a rate that is at
382	384		least 25 percent less than the rate at which the former engine in
383	385		the truck or equipment being repowered under the program emits such
384	386		pollutants.
385	387		Sec. 392.004. REFUELING INFRASTRUCTURE, EQUIPMENT, AND
386	388		SERVICES. (a) A grant recipient may purchase, lease, or install
387	389		refueling infrastructure or equipment or procure refueling
388	390		services with money from a grant under the program if:
389	391		(1) the purchase, lease, installation, or procurement
390	392		is made in conjunction with the purchase or lease of a motor vehicle
391	393		as described by Section 392.003 or Section 392.0035;
392	394		(2) the grant recipient demonstrates that a refueling
393	395		station that meets the needs of the recipient is not available
394	396		within five miles of the location at which the recipient's vehicles
395	397		are stored or primarily used; and
396	398		(3) for the purchase or installation of refueling
397	399		infrastructure or equipment, the infrastructure or equipment will
398	400		be owned and operated by the grant recipient, and for the lease of
399	401		refueling infrastructure or equipment or the procurement of
400	402		refueling services, a third-party service provider engaged by the
401	403		grant recipient will provide the infrastructure, equipment, or
402	404		services.
403	405		(b) An applicant only seeking funds through the Texas
404	406		Alternative Fueling Facilities Program described in Section
405	407		392.019 is not subject to the requirements of Subsection (a).
406	408		Sec. 392.005. APPLICATION FOR GRANT. (a) The commission
407	409		shall develop a simple, standardized application package for grants
408	410		under this subchapter. The package must include:
409	411		(1) an application form;
410	412		(2) a brief description of:
411	413		(A) the program;
412	414		(B) the projects that are eligible for available
413	415		funding;
414	416		(C) the selection criteria and evaluation
415	417		process; and
416	418		(D) the required documentation;
417	419		(3) the name of a person or office to contact for more
418	420		information;
419	421		(4) an example of the contract that an applicant will
420	422		be required to execute before receiving a grant; and
421	423		(5) any other information the commission considers
422	424		useful to inform the applicant and expedite the application
423	425		process.
424	426		(b) The application form shall require as much information
425	427		as the commission determines is necessary to properly evaluate each
426	428		project but shall otherwise minimize the information required.
427	429		(c) The commission may allow an entity to seek funds for
428	430		multiple projects established by this chapter through a single
429	431		application, provided that an applicant follows all requirements
430	432		specified by this chapter and all criteria established by the
431	433		commission for any specific project.
432	434		(d) The application form shall be made publicly available no
433	435		later than 30 days prior to the opening of the program.
434	436		(e) All applications submitted under this chapter shall be
435	437		considered on a competitive basis.
436	438		(f) The commission may adopt guidelines to allow a regional
437	439		planning commission, council of governments, or similar regional
438	440		planning agency created under Chapter 391, Local Government Code,
439	441		or a private nonprofit organization to apply for and receive a grant
440	442		to improve the ability of the program to achieve its goals.
441	443		Sec. 392.006. APPLICATION REVIEW PROCEDURES. (a) The
442	444		commission shall review an application for a grant for a project
443	445		authorized under this subchapter. If the commission determines
444	446		that an application is incomplete, the commission shall notify the
445	447		applicant with an explanation of what is missing from the
446	448		application. The commission shall evaluate the completed
447	449		application according to the appropriate project criteria. Subject
448	450		to available funding, the commission shall make a final
449	451		determination on an application as soon as possible.
450	452		(b) The commission shall make every effort to expedite the
451	453		application review process and to award grants to qualified
452	454		projects in a timely manner. To the extent possible, the commission
453	455		shall coordinate project review and approval with any timing
454	456		constraints related to project purchases or installations to be
455	457		made by an applicant.
456	458		(c) The commission may deny an application for a project
457	459		that does not meet the applicable project criteria or that the
458	460		commission determines is not made in good faith, is not credible, or
459	461		is not in compliance with this chapter and the goals of this
460	462		chapter.
461	463		(d) Subject to availability of funds, the commission shall
462	464		award a grant under this subchapter in conjunction with the
463	465		execution of a contract that obligates the commission to make the
464	466		grant and the recipient to perform the actions described in the
465	467		recipient's grant application. The contract must incorporate
466	468		provisions for recapturing grant money in proportion to any loss of
467	469		emissions reductions compared with the volume of emissions
468	470		reductions that was projected in awarding the grant. Grant money
469	471		recaptured under the contract provision shall be deposited in the
470	472		fund and reallocated for other projects under this chapter.
471	473		(e) The commission shall provide for application submission
472	474		and application status checks using procedures established by the
473	475		commission, which may include application submission and status
474	476		checks to be made over the Internet.
475	477		SUBCHAPTER B: ALLOCATION OF FUNDS, GRANT ELIGIBILITY, AND GRANT
476	478		RESTRICTIONS.
477	479		Sec. 392.010. ALLOCATION OF FUNDS. (a) Money initially
478	480		awarded to the Texas clean fleet program from Section 386.252(a),
479	481		Health and Safety Code, shall be allocated to the following
480	482		projects as follows:
481	483		(1) 28 percent for the Texas Natural Gas Vehicle Grant
482	484		program;
483	485		(2) 22.5 percent for the Texas Seaport and Rail Yard
484	486		Grant program;
485	487		(3) 18.5 percent for the Texas Large Fleet Program;
486	488		(4) 17.5 percent for the Texas Hydrogen
487	489		Infrastructure, Vehicle, and Equipment Grant program; and
488	490		(5) 13.5 percent for the Texas Alternative Fueling
489	491		Facilities Program.
490	492		(b) Subject to the limitations outlined in this Subsection,
491	493		money allocated under this section to a particular project may be
492	494		used for another project in this section as determined by the
493	495		commission, based on demand for grants for eligible projects after
494	496		the commission solicits projects to which to award grants according
495	497		to the initial allocation provisions of this section. If the
496	498		commission determines there is not sufficient demand under the
497	499		projects of this section, the commission may redirect funds to
498	500		other programs under the Texas Emissions Reduction Plan, as
499	501		provided by Section 386.252(h) of the Health and Safety Code.
500	502		(c) The commission will ensure payment for awards is made
501	503		not later than the 30th day after the date the request for
502	504		reimbursement for an approved grant is received.
503	505		Section 392.011. ELIGIBILITY OF PROJECTS FOR GRANTS. (a)
504	506		The commission by rule shall establish criteria for prioritizing
505	507		projects eligible to receive grants under this chapter. The
506	508		commission shall review and revise the criteria as appropriate.
507	509		(b) To be eligible for a grant for the replacement or
508	510		repowering of a motor vehicle under the program, a project must:
509	511		(1) result in a reduction in emissions of nitrogen
510	512		oxides or other pollutants, as established by the commission, of at
511	513		least 25 percent, based on:
512	514		(A) the baseline emission level set by the
513	515		commission under Subsection (g); and
514	516		(B) the certified emission rate of the new
515	517		vehicle; and
516	518		(2) replace or repower a vehicle that:
517	519		(A) is an on-road vehicle that has been owned,
518	520		leased, or otherwise commercially financed and registered and
519	521		operated by the applicant in Texas for at least the two years
520	522		immediately preceding the submission of a grant application;
521	523		(B) satisfies any minimum average annual mileage
522	524		or fuel usage requirements established by the commission;
523	525		(C) satisfies any minimum percentage of annual
524	526		usage requirements established by the commission; and
525	527		(D) is in operating condition and has at least
526	528		two years of remaining useful life, as determined in accordance
527	529		with criteria established by the commission.
528	530		(c) As a condition of receiving a grant, the qualifying
529	531		vehicle must be continuously owned, registered, and operated in the
530	532		state by the grant recipient until the earlier of the fifth
531	533		anniversary of the activity start date established by the
532	534		commission or the date the vehicle has been in operation for 400,000
533	535		miles after the activity start date established by the commission.
534	536		Not less than 75 percent of the annual use of the qualifying
535	537		vehicle, either mileage or fuel use as determined by the
536	538		commission, must occur in the state.
537	539		(c-1) For purposes of Subsection (c), the commission shall
538	540		establish the activity start date based on the date the commission
539	541		accepts verification of the disposition of the vehicle being
540	542		replaced.
541	543		(d) The commission shall include and enforce the usage
542	544		provisions in the grant contracts. The commission shall monitor
543	545		compliance with the contract requirements, including submission of
544	546		reports on at least an annual basis, or more frequently as
545	547		determined by the commission.
546	548		(e) The commission by contract may require the return of all
547	549		or a portion of grant funds for a grant recipient's noncompliance
548	550		with the usage and percentage of use requirements under this
549	551		section.
550	552		(f) A vehicle or engine replaced under this program must be
551	553		rendered permanently inoperable by crushing the vehicle, by making
552	554		a hole in the engine block and permanently destroying the frame of
553	555		the vehicle, or by another method approved by the commission that
554	556		permanently removes the vehicle from operation in this state. The
555	557		commission shall provide a means for an applicant to propose an
556	558		alternative method of complying with the requirements of this
557	559		subsection. The commission shall enforce the requirements of this
558	560		subsection.
559	561		(g) The commission shall establish baseline emission levels
560	562		for emissions of nitrogen oxides for on-road vehicles being
561	563		replaced. The commission may consider and establish baseline
562	564		emission rates for additional pollutants of concern, as determined
563	565		by the commission.
564	566		(h) Mileage requirements established by the commission
565	567		under Subsection (b)(2)(B) may differ by vehicle weight categories
566	568		and type of use.
567	569		(i) The executive director may waive the requirements of
568	570		Subsection (b)(2)(A) or of Subsection (f) on a finding of good
569	571		cause, which may include a waiver for short lapses in registration
570	572		or operation attributable to economic conditions, seasonal work, or
571	573		other circumstances.
572	574		(j) An applicant only seeking funds through the Texas
573	575		Alternative Fueling Facilities Program described in Section
574	576		392.019 is not subject to the requirements of this Subsection.
575	577		Sec. 392.012. RESTRICTION ON USE OF GRANT. (a) A recipient
576	578		of a grant under this chapter shall use the grant to pay the
577	579		incremental costs of any purchase, replacement, or repowering
578	580		project for which the grant is made, which may include the initial
579	581		cost of the alternative fuel or hybrid vehicle, and the reasonable
580	582		and necessary expenses incurred for the labor needed to install
581	583		emissions-reducing equipment. The recipient may not use the grant
582	584		to pay the recipient's administrative expenses.
583	585		(b) The commission, or its designee, shall oversee the grant
584	586		process and is responsible for final approval of any grant.
585	587		(c) Grant recipients are responsible for meeting all grant
586	588		conditions, including reporting and monitoring as required by the
587	589		commission through the grant contract.
588	590		SUBCHAPTER C: TEXAS CLEAN FLEET PROGRAM PROJECTS.
589	591		Sec. 392.015. TEXAS NATURAL GAS VEHICLE GRANT PROGRAM. (a)
590	592		In addition to the provisions of Section 392.011(c), not less than
591	593		75 percent of the annual use of the qualifying natural gas vehicle,
592	594		either mileage or fuel use as determined by the commission, must
593	595		occur in the clean transportation zone.
594	596		(b) A recipient of a grant under this chapter shall use the
595	597		grant to pay the incremental costs of the replacement or vehicle
596	598		repower for which the grant is made, which may include a portion of
597	599		the initial cost of the natural gas vehicle or natural gas engine,
598	600		including the cost of the natural gas fuel system and installation.
599	601		The recipient may not use the grant to pay the recipient's
600	602		administrative expenses.
601	603		(c) The commission shall develop a grant schedule that:
602	604		(1) assigns a standardized grant in an amount up to 90
603	605		percent of the incremental cost of a natural gas vehicle purchase,
604	606		lease, other commercial finance, or repowering;
605	607		(2) is based on:
606	608		(A) the certified emission level of nitrogen
607	609		oxides, or other pollutants as determined by the commission, of the
608	610		engine powering the natural gas vehicle; and
609	611		(B) the usage of the natural gas vehicle; and
610	612		(3) may take into account the overall emissions
611	613		reduction achieved by the natural gas vehicle.
612	614		(d) Not less than 60 percent of the total amount of grants
613	615		awarded under this subsection for the purchase and repowering of
614	616		motor vehicles must be awarded to motor vehicles with a gross
615	617		vehicle weight rating of at least 33,001 pounds. The minimum grant
616	618		requirement under this subsection does not apply if the commission
617	619		does not receive enough grant applications to satisfy the
618	620		requirement for motor vehicles described by this subsection that
619	621		are eligible to receive a grant under this chapter.
620	622		(e) A person may not receive a grant under this subsection
621	623		that, when combined with any other grant, tax credit, or other
622	624		governmental incentive, exceeds the incremental cost of the vehicle
623	625		or vehicle repower for which the grant is awarded. A person shall
624	626		return to the commission the amount of a grant awarded under this
625	627		chapter that, when combined with any other grant, tax credit, or
626	628		other governmental incentive, exceeds the incremental cost of the
627	629		vehicle or vehicle repower for which the grant is awarded.
628	630		(f) The commission shall reduce the amount of a grant
629	631		awarded under this chapter as necessary to keep the combined
630	632		incentive total at or below the incremental cost of the vehicle for
631	633		which the grant is awarded if the grant recipient is eligible to
632	634		receive an automatic incentive at or before the time a grant is
633	635		awarded under this chapter.
634	636		(g) The commission shall establish criteria for:
635	637		(1) awarding grants under this chapter to reimburse
636	638		eligible costs;
637	639		(2) the commission to compile and regularly update a
638	640		listing of potentially eligible natural gas vehicles and natural
639	641		gas engines that are certified to the appropriate current federal
640	642		emissions standards as determined by the commission;
641	643		(3) a method to calculate the reduction in emissions
642	644		of nitrogen oxides, volatile organic compounds, carbon monoxide,
643	645		particulate matter, and sulfur compounds for each replacement or
644	646		repowering;
645	647		(3) assigning a standardized grant amount for each
646	648		qualifying vehicle or engine repower under this subsection; and
647	649		(4) requiring grant applicants to identify natural gas
648	650		fueling stations that are available to fuel the qualifying vehicle
649	651		in the area of its use.
650	652		Section 392.016. TEXAS SEAPORT AND RAIL YARD GRANT PROGRAM.
651	653		(a) The commission shall establish criteria for the engines and the
652	654		models of drayage trucks and cargo handling equipment that are
653	655		eligible for inclusion in an incentive program under this
654	656		subchapter.
655	657		(b) In addition to provisions under this chapter, to be
656	658		eligible for an incentive under this subchapter, a person must
657	659		agree to:
658	660		(1) register the drayage truck in this state, if the
659	661		replacement or repowered vehicle is an on-road drayage truck; and
660	662		(2) operate the replacement or repowered drayage truck
661	663		or cargo handling equipment in and within a maximum distance
662	664		established by the commission of a seaport or rail yard in a
663	665		nonattainment area of this state for not less than 50 percent of the
664	666		truck's or equipment's annual mileage or hours of operation, as
665	667		determined by the commission.
666	668		(c) To receive money under an incentive program provided by
667	669		this subchapter, the purchaser of a drayage truck, piece of cargo
668	670		handling equipment, or engine eligible for inclusion in the program
669	671		must apply for the incentive in the manner provided by law, rule, or
670	672		guideline of the commission.
671	673		(d) Not more than one incentive may be provided for each
672	674		drayage truck or piece of cargo handling equipment purchased or
673	675		repowered.
674	676		(e) An incentive provided under this subchapter may be used
675	677		to fund not more than 80 percent of, as applicable, the purchase
676	678		price of:
677	679		(1) the drayage truck or cargo handling equipment; or
678	680		(2) the engine and any other eligible costs associated
679	681		with repowering the drayage truck or cargo handling equipment, as
680	682		determined by the commission.
681	683		Section 392.017. TEXAS HYDROGEN INFRASTRUCTURE, VEHICLE,
682	684		AND EQUIPMENT GRANT PROGRAM. (a) The commission shall prioritize
683	685		the awarding of grants under this subchapter in the following
684	686		order:
685	687		(1) projects to replace on-road heavy-duty vehicles
686	688		with newer on-road hydrogen vehicles;
687	689		(2) projects to purchase, lease, repower, or convert
688	690		on-road heavy-duty vehicles with a powertrain that runs on or is
689	691		powered by hydrogen;
690	692		(3) projects to implement hydrogen refueling
691	693		infrastructure that will be accessible and available to the public
692	694		at times designated by the grant contract;
693	695		(4) projects to replace non-road heavy-duty vehicles
694	696		with newer non-road hydrogen vehicles; and
695	697		(5) projects to purchase, lease, repower, or convert
696	698		non-road heavy-duty vehicles with a powertrain that runs on or is
697	699		powered by hydrogen.
698	700		(b) Subject to Subsection (a), in awarding grants under this
699	701		subsection, the commission shall give preference to the most
700	702		cost-effective projects that will result in the greatest reduction
701	703		in emissions of oxides of nitrogen.
702	704		(c) The commission shall establish additional eligibility
703	705		and prioritization criteria as needed to implement the project.
704	706		Section 392.018. TEXAS LARGE FLEET PROGRAM. (a) An entity
705	707		operating in this state that operates a fleet of at least 75
706	708		vehicles may apply for and receive a grant under the program.
707	709		(b) An entity that places 10 or more qualifying vehicles in
708	710		service for use entirely in this state during a calendar year is
709	711		eligible to participate in the program.
710	712		(c) Notwithstanding Subsection (b), an entity that submits
711	713		a grant application for 10 or more qualifying vehicles is eligible
712	714		to participate in the program even if the commission denies
713	715		approval for one or more of the vehicles during the application
714	716		process.
715	717		(d) The amount the commission shall award for each vehicle
716	718		being replaced is up to 80 percent, as determined by the commission,
717	719		of the total cost for replacement of a heavy-duty or light-duty
718	720		diesel engine. The commission may revise the standards for
719	721		determining grant amounts, as needed to reflect changes to federal
720	722		emission standards and decisions on pollutants of concern.
721	723		Section 392.019. TEXAS ALTERNATIVE FUELING FACILITIES
722	724		PROGRAM. (a) The commission shall establish and administer the
723	725		Texas alternative fueling facilities program to provide fueling
724	726		facilities for alternative fuel in the clean transportation zone.
725	727		Under the program, the commission shall provide a grant for each
726	728		eligible facility to offset the cost of those facilities.
727	729		(b) An entity that constructs or reconstructs an
728	730		alternative fueling facility is eligible to participate in the
729	731		program.
730	732		(c) To ensure that alternative fuel vehicles have access to
731	733		fuel and to build the foundation for a self-sustaining market for
732	734		alternative fuels in Texas, the commission shall provide for
733	735		strategically placed fueling facilities in the clean
734	736		transportation zone to enable an alternative fuel vehicle to travel
735	737		in those areas relying solely on the alternative fuel.
736	738		(d) The commission shall maintain a listing to be made
737	739		available to the public online of all vehicle fueling facilities
738	740		that have received grant funding, including location and hours of
739	741		operation.
740	742		(e) An entity operating in this state that constructs or
741	743		reconstructs a facility to dispense alternative fuels may apply for
742	744		and receive a grant under the program.
743	745		(f) In addition to the requirements of this chapter, the
744	746		commission shall establish additional eligibility and
745	747		prioritization criteria as needed to implement the program.
746	748		(g) The prioritization criteria established under
747	749		Subsection (f) must provide that, for each grant round, the
748	750		commission may not award a grant to an entity that does not agree to
749	751		make the alternative fueling facility accessible and available to
750	752		the public at times designated by the grant contract until each
751	753		eligible entity that does agree to those terms has been awarded a
752	754		grant.
753	755		(h) The commission may not award more than one grant for
754	756		each facility.
755	757		(i) The commission may give preference to or otherwise limit
756	758		grant selections to:
757	759		(1) fueling facilities providing specific types of
758	760		alternative fuels;
759	761		(2) fueling facilities in a specified area or
760	762		location; and
761	763		(3) fueling facilities meeting other specified
762	764		prioritization criteria established by the commission.
763	765		(j) For fueling facilities to provide natural gas, the
764	766		commission shall give preference to:
765	767		(1) facilities providing both liquefied natural gas
766	768		and compressed natural gas at a single location;
767	769		(2) facilities located not more than one mile from an
768	770		interstate highway system;
769	771		(3) facilities located in the area in and between the
770	772		Houston, San Antonio, and Dallas-Fort Worth areas; and
771	773		(4) facilities located in the area in and between the
772	774		Corpus Christi, Laredo, and San Antonio areas.
773	775		(k) A recipient of a grant under this chapter shall use the
774	776		grant only to pay the costs of the facility for which the grant is
775	777		made. In addition to requirements under this chapter, the recipient
776	778		may not use the grant to pay the recipient's:
777	779		(1) expenses for the purchase of land or an interest in
778	780		land; or
779	781		(2) expenses for equipment or facility improvements
780	782		that are not directly related to the delivery, storage,
781	783		compression, or dispensing of the alternative fuel at the facility.
782	784		(l) Each grant must be awarded using a contract that
783	785		requires the recipient to meet operational, maintenance, and
784	786		reporting requirements as specified by the commission.
785	787		(m) Grants awarded under this chapter for a facility to
786	788		provide alternative fuels other than natural gas may not exceed the
787	789		lesser of:
788	790		(1) 50 percent of the sum of the actual eligible costs
789	791		incurred by the grant recipient within deadlines established by the
790	792		commission; or
791	793		(2) $600,000.
792	794		(n) Grants awarded under this chapter for a facility to
793	795		provide natural gas may not exceed:
794	796		(1) $400,000 for a compressed natural gas facility;
795	797		(2) $400,000 for a liquefied natural gas facility; or
796	798		(3) $600,000 for a facility providing both liquefied
797	799		and compressed natural gas.
798	800		Sec. 392.020. EXPIRATION. This chapter expires on the last
799	801		day of the state fiscal biennium during which the commission
800	802		publishes in the Texas Register the notice required by Section
801	803		382.037.
802	804		SECTION 8. Strike Chapter 393, Health and Safety Code.
803	805		SECTION 9. Strike Chapter 394, Health and Safety Code.
804	806		SECTION 10. This Act takes effect September 1, 2025.