Bill Text: TX HB4378 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the administration of certain programs under the Texas emissions reduction plan.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-03-25 - Referred to Environmental Regulation [HB4378 Detail]
Download: Texas-2019-HB4378-Introduced.html
86R7468 JRR-D | ||
By: Thompson of Brazoria | H.B. No. 4378 |
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relating to the administration of certain programs under the Texas | ||
emissions reduction plan. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 386.051(b), Health and Safety Code, is | ||
amended to read as follows: | ||
(b) Under the plan, the commission and the comptroller shall | ||
provide grants or other funding for: | ||
(1) the diesel emissions reduction incentive program | ||
established under Subchapter C, including for infrastructure | ||
projects established under that subchapter; | ||
(2) the motor vehicle purchase or lease incentive | ||
program established under Subchapter D; | ||
(3) the air quality research support program | ||
established under Chapter 387; | ||
(4) the clean school bus program established under | ||
Chapter 390; | ||
(5) the new technology implementation grant program | ||
established under Chapter 391; | ||
(6) the regional air monitoring program established | ||
under Section 386.252(a); | ||
(7) a health effects study as provided by Section | ||
386.252(a); | ||
(8) air quality planning activities as provided by | ||
Section 386.252(d); | ||
(9) a contract with the Energy Systems Laboratory at | ||
the Texas A&M Engineering Experiment Station for computation of | ||
creditable statewide emissions reductions as provided by Section | ||
386.252(a); | ||
(10) the Texas clean fleet program established under | ||
Chapter 392; | ||
(11) the Texas alternative fueling facilities program | ||
established under Chapter 393; | ||
(12) the Texas natural gas vehicle grant program | ||
established under Chapter 394; | ||
(13) other programs the commission may develop that | ||
lead to reduced emissions of nitrogen oxides, particulate matter, | ||
or volatile organic compounds in a nonattainment area or affected | ||
county; | ||
(14) other programs the commission may develop that | ||
support congestion mitigation to reduce mobile source ozone | ||
precursor emissions; | ||
(15) the seaport and rail yard areas emissions | ||
reduction program established under Subchapter D-1; | ||
(16) conducting research and other activities | ||
associated with making any necessary demonstrations to the United | ||
States Environmental Protection Agency to account for the impact of | ||
foreign emissions or an exceptional event; | ||
(17) studies of or pilot programs for incentives for | ||
port authorities located in nonattainment areas or affected | ||
counties as provided by Section 386.252(a); [ |
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(18) the governmental alternative fuel fleet grant | ||
program established under Chapter 395; and | ||
(19) the Texas non-road natural gas grant program | ||
established under Chapter 394A. | ||
SECTION 2. Section 386.252(a), Health and Safety Code, is | ||
amended to read as follows: | ||
(a) Money in the fund may be used only to implement and | ||
administer programs established under the plan. Subject to the | ||
reallocation of funds by the commission under Subsection (h), money | ||
appropriated to the commission to be used for the programs under | ||
Section 386.051(b) shall initially be allocated as follows: | ||
(1) four percent may be used for the clean school bus | ||
program under Chapter 390; | ||
(2) three percent may be used for the new technology | ||
implementation grant program under Chapter 391, from which at least | ||
$1 million will be set aside for electricity storage projects | ||
related to renewable energy; | ||
(3) five percent may be used for the Texas clean fleet | ||
program under Chapter 392; | ||
(4) not more than $3 million may be used by the | ||
commission to fund a regional air monitoring program in commission | ||
Regions 3 and 4 to be implemented under the commission's oversight, | ||
including direction regarding the type, number, location, and | ||
operation of, and data validation practices for, monitors funded by | ||
the program through a regional nonprofit entity located in North | ||
Texas having representation from counties, municipalities, higher | ||
education institutions, and private sector interests across the | ||
area; | ||
(5) 10 percent may be used for the Texas natural gas | ||
vehicle grant program under Chapter 394 and the Texas non-road | ||
natural gas grant program established under Chapter 394A; | ||
(6) not more than $6 million may be used for the Texas | ||
alternative fueling facilities program under Chapter 393, of which | ||
a specified amount may be used for fueling stations to provide | ||
natural gas fuel, except that money may not be allocated for the | ||
Texas alternative fueling facilities program for the state fiscal | ||
year ending August 31, 2019; | ||
(7) not more than $750,000 may be used each year to | ||
support research related to air quality as provided by Chapter 387; | ||
(8) not more than $200,000 may be used for a health | ||
effects study; | ||
(9) at least $6 million but not more than $8 million is | ||
allocated to the commission for administrative costs, including all | ||
direct and indirect costs for administering the plan, costs for | ||
conducting outreach and education activities, and costs | ||
attributable to the review or approval of applications for | ||
marketable emissions reduction credits; | ||
(10) six percent may be used by the commission for the | ||
seaport and rail yard areas emissions reduction program established | ||
under Subchapter D-1; | ||
(11) five percent may be used for the light-duty motor | ||
vehicle purchase or lease incentive program established under | ||
Subchapter D; | ||
(12) not more than $216,000 is allocated to the | ||
commission to contract with the Energy Systems Laboratory at the | ||
Texas A&M Engineering Experiment Station annually for the | ||
development and annual computation of creditable statewide | ||
emissions reductions obtained through wind and other renewable | ||
energy resources for the state implementation plan; | ||
(13) not more than $500,000 may be used for studies of | ||
or pilot programs for incentives for port authorities located in | ||
nonattainment areas or affected counties to encourage cargo | ||
movement that reduces emissions of nitrogen oxides and particulate | ||
matter; and | ||
(14) the balance is to be used by the commission for | ||
the diesel emissions reduction incentive program under Subchapter C | ||
as determined by the commission. | ||
SECTION 3. Section 393.001(1-a), Health and Safety Code, is | ||
amended to read as follows: | ||
(1-a) "Clean transportation zone" means: | ||
(A) counties containing or intersected by a | ||
portion of an interstate highway connecting the cities of Houston, | ||
San Antonio, Dallas, and Fort Worth; | ||
(B) counties located within the area bounded by | ||
the interstate highways described by Paragraph (A); | ||
(C) counties containing or intersected by a | ||
portion of: | ||
(i) an interstate highway connecting San | ||
Antonio to Corpus Christi or Laredo; | ||
(ii) the most direct route using highways | ||
in the state highway system connecting Corpus Christi and Laredo; | ||
or | ||
(iii) a highway corridor connecting Corpus | ||
Christi and Houston; | ||
(D) counties located within the area bounded by | ||
the highways described by Paragraph (C); | ||
(E) counties containing or intersected by a | ||
portion of: | ||
(i) a United States highway connecting | ||
Houston and Texarkana; or | ||
(ii) a highway corridor connecting Houston | ||
and Texarkana; | ||
(F) counties containing or intersected by a | ||
portion of an interstate highway connecting the cities of Dallas | ||
and Texarkana; | ||
(G) counties in this state all or part of which | ||
are included in a nonattainment area designated under Section | ||
107(d) of the federal Clean Air Act (42 U.S.C. Section 7407); and | ||
(H) [ |
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counties under Section 386.001. | ||
SECTION 4. Section 394.003(a), Health and Safety Code, is | ||
amended to read as follows: | ||
(a) A vehicle is a qualifying vehicle that may be considered | ||
for a grant under the program if during the eligibility period | ||
established by the commission the entity: | ||
(1) purchased, leased, or otherwise commercially | ||
financed the vehicle as an [ |
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medium-duty motor vehicle that: | ||
(A) is a natural gas vehicle; | ||
(B) is certified to the appropriate current | ||
federal emissions standards as determined by the commission; and | ||
(C) replaces an on-road heavy-duty or | ||
medium-duty motor vehicle of the same weight classification and | ||
use; or | ||
(2) repowered the on-road motor vehicle to a natural | ||
gas vehicle powered by a natural gas engine that is certified to the | ||
appropriate current federal emissions standards as determined by | ||
the commission. | ||
SECTION 5. Section 394.005(b), Health and Safety Code, is | ||
amended to read as follows: | ||
(b) To be eligible for a grant under the program: | ||
(1) the use of the qualifying vehicle must be | ||
projected to result in a reduction in emissions of nitrogen oxides | ||
of at least 25 percent as compared to the motor vehicle or engine | ||
being replaced, based on: | ||
(A) the baseline emission level set by the | ||
commission under Subsection (g); and | ||
(B) the certified emission rate of the qualifying | ||
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(2) the qualifying vehicle must: | ||
(A) replace a heavy-duty or medium-duty motor | ||
vehicle that: | ||
(i) is an on-road vehicle that has been | ||
owned, leased, or otherwise commercially financed and registered | ||
and operated by the applicant in Texas for at least the two years | ||
immediately preceding the submission of a grant application; | ||
(ii) satisfies any minimum average annual | ||
mileage or fuel usage requirements established by the commission; | ||
(iii) satisfies any minimum percentage of | ||
annual usage requirements established by the commission; and | ||
(iv) is in operating condition and has at | ||
least two years of remaining useful life, as determined in | ||
accordance with criteria established by the commission; | ||
(B) replace a heavy-duty or medium-duty motor | ||
vehicle that: | ||
(i) is owned by the applicant; | ||
(ii) is an on-road vehicle that has been: | ||
(a) owned, leased, or otherwise | ||
commercially financed and operated in Texas as a fleet vehicle for | ||
at least the two years immediately preceding the submission of a | ||
grant application; and | ||
(b) registered in a county located in | ||
the clean transportation zone for at least the two years | ||
immediately preceding the submission of a grant application; and | ||
(iii) otherwise satisfies the mileage, | ||
usage, and useful life requirements established under Paragraph (A) | ||
as determined by documentation associated with the vehicle; or | ||
(C) be a heavy-duty or medium-duty motor vehicle | ||
repowered with a natural gas engine that: | ||
(i) is installed in an on-road vehicle that | ||
has been owned, leased, or otherwise commercially financed and | ||
registered and operated by the applicant in Texas for at least the | ||
two years immediately preceding the submission of a grant | ||
application; | ||
(ii) satisfies any minimum average annual | ||
mileage or fuel usage requirements established by the commission; | ||
(iii) satisfies any minimum percentage of | ||
annual usage requirements established by the commission; and | ||
(iv) is installed in an on-road vehicle | ||
that, at the time of the vehicle's repowering, was in operating | ||
condition and had at least two years of remaining useful life, as | ||
determined in accordance with criteria established by the | ||
commission; and | ||
(3) if the qualifying vehicle is a used natural gas | ||
vehicle, the vehicle must be of model year 2014 or later. | ||
SECTION 6. Subtitle C, Title 5, Health and Safety Code, is | ||
amended by adding Chapter 394A to read as follows: | ||
CHAPTER 394A. TEXAS NON-ROAD NATURAL GAS GRANT PROGRAM | ||
Sec. 394A.001. DEFINITIONS. In this chapter: | ||
(1) "Clean transportation zone" has the meaning | ||
assigned by Section 393.001. | ||
(2) "Commission" means the Texas Commission on | ||
Environmental Quality. | ||
(3) "Executive director" means the executive director | ||
of the commission. | ||
(4) "Incremental cost" has the meaning assigned by | ||
Section 386.001. | ||
(5) "Natural gas engine" has the meaning assigned by | ||
Section 394.001. | ||
(6) "Non-road engine" has the meaning assigned by | ||
Section 386.101. | ||
(7) "Non-road natural gas vehicle or equipment" means | ||
a vehicle or piece of equipment that is powered by a natural gas | ||
engine. | ||
(8) "Non-road vehicle or equipment" means a vehicle or | ||
piece of equipment, excluding a motor vehicle as defined by Section | ||
386.151 or a non-road natural gas vehicle or equipment, that is | ||
powered by a non-road engine, including: | ||
(A) non-road nonrecreational equipment and | ||
vehicles; | ||
(B) construction equipment; | ||
(C) locomotives; and | ||
(D) marine vessels. | ||
(9) "Program" means the Texas non-road natural gas | ||
grant program established under this chapter. | ||
Sec. 394A.002. PROGRAM. The commission shall establish and | ||
administer the Texas non-road natural gas grant program to | ||
encourage an entity that has a non-road vehicle or equipment to | ||
repower the vehicle or equipment with a natural gas engine or | ||
replace the vehicle or equipment with a non-road natural gas | ||
vehicle or equipment. Under the program, the commission shall | ||
provide grants for eligible non-road vehicles or equipment to | ||
offset the incremental cost for the entity of repowering or | ||
replacing the non-road vehicle or equipment. | ||
Sec. 394A.003. QUALIFYING VEHICLES AND EQUIPMENT. (a) A | ||
vehicle or piece of equipment is a qualifying vehicle or equipment | ||
that may be considered for a grant under the program if during the | ||
eligibility period established by the commission the entity: | ||
(1) purchased, leased, or otherwise commercially | ||
financed the vehicle as a new non-road vehicle or equipment that: | ||
(A) is a non-road natural gas vehicle or | ||
equipment; | ||
(B) is certified to the appropriate current | ||
federal emissions standards as determined by the commission; and | ||
(C) replaces a non-road vehicle or equipment of | ||
the same weight classification and use; or | ||
(2) repowered the non-road vehicle or equipment to a | ||
non-road natural gas vehicle or equipment powered by a natural gas | ||
engine that is certified to the appropriate current federal | ||
emissions standards as determined by the commission. | ||
(b) A non-road vehicle or equipment is not a qualifying | ||
vehicle or equipment if the vehicle or equipment or the natural gas | ||
engine powering the vehicle or equipment: | ||
(1) has been awarded a grant under this chapter for a | ||
previous reporting period; or | ||
(2) has received a similar grant or tax credit in | ||
another jurisdiction if that grant or tax credit program is relied | ||
on for credit in the state implementation plan. | ||
Sec. 394A.004. APPLICATION FOR GRANT. (a) Only an entity | ||
operating in this state that operates a non-road vehicle or | ||
equipment may apply for and receive a grant under this chapter. | ||
(b) An application for a grant under this chapter must be | ||
made on a form provided by the commission and must contain the | ||
information required by the commission. | ||
(c) The commission, after consulting stakeholders, shall: | ||
(1) simplify the application form; and | ||
(2) minimize, to the maximum extent possible, | ||
documentation required for an application. | ||
Sec. 394A.005. ELIGIBILITY FOR GRANTS. (a) The commission | ||
shall establish criteria for prioritizing qualifying vehicles and | ||
equipment eligible to receive grants under this chapter. The | ||
commission shall review and revise the criteria as appropriate. | ||
(b) To be eligible for a grant under the program: | ||
(1) the use of the qualifying vehicle or equipment | ||
must be projected to result in a reduction in emissions of nitrogen | ||
oxides of at least 25 percent as compared to the vehicle, equipment, | ||
or engine being replaced, based on: | ||
(A) the baseline emission level set by the | ||
commission under Subsection (h); and | ||
(B) the certified emission rate of the new | ||
vehicle or equipment; and | ||
(2) the qualifying vehicle or equipment must: | ||
(A) replace a non-road vehicle or equipment that: | ||
(i) has been owned, leased, or otherwise | ||
commercially financed and operated by the applicant in Texas for at | ||
least the two years immediately preceding the submission of a grant | ||
application; | ||
(ii) satisfies any minimum average annual | ||
mileage or fuel usage requirements established by the commission; | ||
(iii) satisfies any minimum percentage of | ||
annual usage requirements established by the commission; and | ||
(iv) is in operating condition and has at | ||
least two years of remaining useful life, as determined in | ||
accordance with criteria established by the commission; or | ||
(B) be a non-road vehicle or equipment repowered | ||
with a natural gas engine that: | ||
(i) is installed in a non-road vehicle or | ||
equipment that has been owned, leased, or otherwise commercially | ||
financed and operated by the applicant in Texas for at least the two | ||
years immediately preceding the submission of a grant application; | ||
(ii) satisfies any minimum average annual | ||
mileage or fuel usage requirements established by the commission; | ||
(iii) satisfies any minimum percentage of | ||
annual usage requirements established by the commission; and | ||
(iv) is installed in a non-road vehicle or | ||
equipment that, at the time of the vehicle's or equipment's | ||
repowering, was in operating condition and had at least two years of | ||
remaining useful life, as determined in accordance with criteria | ||
established by the commission. | ||
(c) As a condition of receiving a grant, the qualifying | ||
vehicle or equipment must be continuously owned, leased, or | ||
otherwise commercially financed and operated in the state by the | ||
grant recipient until the earlier of the fourth anniversary of the | ||
activity start date established by the commission or a date | ||
specified by the commission that takes into account the vehicle's | ||
or equipment's usage after the activity start date established by | ||
the commission. Not less than 75 percent of the annual use of the | ||
qualifying vehicle or equipment, either mileage or fuel use as | ||
determined by the commission, must occur in the clean | ||
transportation zone. | ||
(d) For purposes of Subsection (c), the commission shall | ||
establish the activity start date based on the date the commission | ||
accepts verification of the disposition of the vehicle, equipment, | ||
or engine, as applicable. | ||
(e) The commission shall include and enforce the usage | ||
provisions in the grant contracts. The commission shall monitor | ||
compliance with the ownership, leasing, and usage requirements, | ||
including submission of reports on at least an annual basis, or more | ||
frequently as determined by the commission. | ||
(f) The commission by contract may require the return of all | ||
or a portion of grant funds for a grant recipient's noncompliance | ||
with the usage and percentage of use requirements under this | ||
section. | ||
(g) A non-road vehicle or equipment replaced under this | ||
program must be rendered permanently inoperable by crushing the | ||
vehicle or equipment, by making a hole in the engine block and | ||
permanently destroying the frame of the vehicle or equipment, or by | ||
another method approved by the commission, or be permanently | ||
removed from operation in this state. The commission shall | ||
establish criteria for ensuring the permanent destruction or | ||
permanent removal of the vehicle, equipment, or engine, as | ||
applicable. The commission shall enforce the destruction and | ||
removal requirements. For purposes of this subsection, "permanent | ||
removal" means the permanent export of the vehicle, equipment, or | ||
engine to a destination outside of the United States, Canada, or the | ||
United Mexican States. | ||
(h) The commission shall establish baseline emission levels | ||
for emissions of nitrogen oxides for non-road vehicles or equipment | ||
being replaced or repowered by using the emission certification for | ||
the vehicle, equipment, or engine being replaced. The commission | ||
may consider deterioration of the emission performance of the | ||
engine of the vehicle or equipment being replaced in establishing | ||
the baseline emission level. The commission may consider and | ||
establish baseline emission rates for additional pollutants of | ||
concern. | ||
(i) Mileage or fuel use requirements established by the | ||
commission under Subsection (b)(2)(A)(ii) may differ by vehicle or | ||
equipment weight categories and type of use. | ||
(j) The executive director may waive the requirements of | ||
Subsection (b)(2)(A)(i) on a finding of good cause, which may | ||
include short lapses in operation due to economic conditions, | ||
seasonal work, or other circumstances. | ||
Sec. 394A.006. RESTRICTION ON USE OF GRANT. A recipient of | ||
a grant under this chapter shall use the grant to pay the | ||
incremental costs of the replacement or engine repower for which | ||
the grant is made, which may include a portion of the initial cost | ||
of the non-road natural gas vehicle or equipment or natural gas | ||
engine, including the cost of the natural gas fuel system and | ||
installation. The recipient may not use the grant to pay the | ||
recipient's administrative expenses. | ||
Sec. 394A.007. AMOUNT OF GRANT. (a) The commission shall | ||
develop a grant schedule that: | ||
(1) assigns a standardized grant in an amount up to 90 | ||
percent of the incremental cost of a non-road natural gas vehicle or | ||
equipment purchase, lease, other commercial finance, or | ||
repowering; | ||
(2) is based on: | ||
(A) the certified emission level of nitrogen | ||
oxides, or other pollutants as determined by the commission, of the | ||
engine powering the non-road natural gas vehicle or equipment; and | ||
(B) the usage of the non-road natural gas vehicle | ||
or equipment; and | ||
(3) may take into account the overall emissions | ||
reduction achieved by the non-road natural gas vehicle or | ||
equipment. | ||
(b) A person may not receive a grant under this chapter | ||
that, when combined with any other grant, tax credit, or other | ||
governmental incentive, exceeds the incremental cost of the vehicle | ||
or equipment or engine repower for which the grant is awarded. A | ||
person shall return to the commission the amount of a grant awarded | ||
under this chapter that, when combined with any other grant, tax | ||
credit, or other governmental incentive, exceeds the incremental | ||
cost of the vehicle or equipment or engine repower for which the | ||
grant is awarded. | ||
(c) The commission shall reduce the amount of a grant | ||
awarded under this chapter as necessary to keep the combined | ||
incentive total at or below the incremental cost of the vehicle or | ||
equipment for which the grant is awarded if the grant recipient is | ||
eligible to receive an automatic incentive at or before the time a | ||
grant is awarded under this chapter. | ||
Sec. 394A.008. GRANT PROCEDURES. (a) The commission shall | ||
establish procedures for: | ||
(1) awarding grants under this chapter to reimburse | ||
eligible costs; and | ||
(2) streamlining the grant application, contracting, | ||
reimbursement, and reporting process for qualifying non-road | ||
natural gas vehicle or equipment purchases or repowers. | ||
(b) Procedures established under this section must: | ||
(1) provide for the commission to compile and | ||
regularly update a listing of potentially eligible non-road natural | ||
gas vehicles and equipment and natural gas engines that are | ||
certified to the appropriate current federal emissions standards as | ||
determined by the commission; | ||
(2) provide a method to calculate the reduction in | ||
emissions of nitrogen oxides, volatile organic compounds, carbon | ||
monoxide, particulate matter, and sulfur compounds for each | ||
replacement or repowering; | ||
(3) assign a standardized grant amount for each | ||
qualifying vehicle or equipment or engine repower under Section | ||
394A.007; | ||
(4) allow for processing applications on an ongoing | ||
first-come, first-served basis; | ||
(5) require grant applicants to identify natural gas | ||
fueling stations that are available to fuel the qualifying vehicle | ||
or equipment in the area of its use; | ||
(6) provide for payment not later than the 30th day | ||
after the date the request for reimbursement for an approved grant | ||
is received; | ||
(7) provide for application submission and | ||
application status checks using procedures established by the | ||
commission, which may include application submission and status | ||
checks to be made over the Internet; and | ||
(8) consolidate, simplify, and reduce the | ||
administrative work for applicants and the commission associated | ||
with grant application, contracting, reimbursement, and reporting | ||
requirements. | ||
(c) The commission, or its designee, shall oversee the grant | ||
process and is responsible for final approval of any grant. | ||
(d) Grant recipients are responsible for meeting all grant | ||
conditions, including reporting and monitoring as required by the | ||
commission through the grant contract. | ||
Sec. 394A.009. EXPIRATION. This chapter expires on the | ||
last day of the state fiscal biennium during which the commission | ||
publishes in the Texas Register the notice required by Section | ||
382.037. | ||
SECTION 7. The changes in law made by this Act apply only to | ||
a Texas emissions reduction plan grant awarded on or after the | ||
effective date of this Act. A grant awarded before the effective | ||
date of this Act is governed by the law in effect on the date the | ||
award was made, and the former law is continued in effect for that | ||
purpose. | ||
SECTION 8. This Act takes effect September 1, 2019. |