87R16682 JRR-F
	By: Thompson of Brazoria	H.B. No. 2468
	Substitute the following for H.B. No. 2468:
	By:  Kuempel	C.S.H.B. No. 2468

	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;
	(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;
	(19)  the purchase, maintenance, upgrade, and
	operation of air monitoring equipment as provided by Section
	386.252(a); and
	(20)  fee-based contracts entered into under the
	program established under Section 386.058.
	SECTION 2.  Subchapter B, Chapter 386, Health and Safety
	Code, is amended by adding Section 386.058 to read as follows:
	Sec. 386.058.  FEE-BASED CONTRACTS FOR PURCHASE OF
	REDUCTIONS IN EMISSIONS OF NITROGEN OXIDES. (a) The commission by
	rule shall establish a program authorizing the commission to enter
	into fee-based contracts for the purchase of reductions in
	emissions of nitrogen oxides.
	(b)  The program established under this section must:
	(1)  specify the types of projects that are eligible
	for fee-based contracts under the program, such as marine emission
	capture systems;
	(2)  measure nitrogen oxides emissions input and output
	on a continuous basis;
	(3)  require nitrogen oxides emissions reduced under
	the contract to be verified and certified by the commission;
	(4)  assign a dollar per ton fee based solely on the
	dollar per ton cost of the reduction in emissions of nitrogen
	oxides;
	(5)  require payments under the contract to be made
	only for actual reductions in nitrogen oxides emissions that are
	verified by the commission; and
	(6)  authorize the commission to enter into multiyear
	contracts under the program.
	(c)  Notwithstanding Section 386.055:
	(1)  the commission may enter into a fee-based contract
	under the program established under this section for a project
	involving a new emissions reduction measure that would otherwise
	generate marketable credits under a state or federal emissions
	reduction credit averaging, banking, or trading program if, during
	the term of the contract, the project is not used for credit under
	any state or federal emissions reduction credit averaging, banking,
	or trading program; and
	(2)  a project that was subject to a fee-based contract
	under the program established under this section may be used for
	credit under a state or federal emissions reduction credit
	averaging, banking, or trading program if:
	(A)  the contract has expired or otherwise
	terminated and the project is not subject to any other fee-based
	contract entered into under the program established under this
	section; and
	(B)  the project otherwise meets the requirements
	of the applicable state or federal emissions reduction credit
	averaging, banking, or trading program.
	SECTION 3.  Sections 386.252(a) and (f), Health and Safety
	Code, as effective September 1, 2021, are 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), 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)  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;
	(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 $1 million [$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 $16 million
	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;
	(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 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 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)  not more than $10 million may be used by the
	commission for the purchase, maintenance, upgrade, and operation of
	air monitoring equipment to be used in nonattainment areas and
	affected counties; and
	(15)  the balance is to be used by the commission for:
	(A)  the diesel emissions reduction incentive
	program under Subchapter C as determined by the commission; and
	(B)  fee-based contracts entered into under the
	program established under Section 386.058.
	(f)  Not more than $5 [$2.5] million from the fund and
	account may be used by the commission to conduct 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.
	SECTION 4.  This Act takes effect September 1, 2021.