Bill Text: TX HB4472 | 2021-2022 | 87th Legislature | Engrossed


Bill Title: Relating to the Texas emissions reduction plan.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed) 2021-05-14 - Reported engrossed [HB4472 Detail]

Download: Texas-2021-HB4472-Engrossed.html
 
 
  By: Landgraf, Bell of Montgomery H.B. No. 4472
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to 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);
               (20)  fee-based contracts entered into under the
  program established under Section 386.058;
               (21)  the energy efficiency loan guarantee program
  established under Section 388.013; and
               (22)  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.
         SECTION 2.  Section 386.057, Health and Safety Code, is
  amended by adding Subsection (e) to read as follows:
         (e)  Not later than October 1 of each year, the Texas
  Department of Transportation shall report to the commission the
  following information for all congestion mitigation and air quality
  improvement projects in nonattainment areas that are planned to be
  funded, or received initial funding during the preceding 10 years,
  from money received by the department under Section 386.250:
               (1)  projects to mitigate congestion and improve air
  quality that are currently planned;
               (2)  projects to mitigate congestion and improve air
  quality that have been completed;
               (3)  estimated emissions reductions for all planned and
  completed congestion mitigation projects; and
               (4)  estimated cost per ton analysis of reduced
  emissions of nitrogen oxides, particulate matter, or volatile
  organic compounds for each congestion mitigation project planned or
  completed.
         SECTION 3.  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 4.  Sections 386.104(c) and (c-1), Health and Safety
  Code, are amended to read as follows:
         (c)  Except as otherwise provided by this subsection, for a
  proposed project as described by Section 386.102(b), [other than a
  project involving a marine vessel or engine,] not less than 75
  percent of vehicle miles traveled or hours of operation projected
  for the five years immediately following the award of a grant must
  be projected to take place in a nonattainment area or affected
  county of this state. The commission may set the minimum percentage
  of vehicle miles traveled or hours of operation required to take
  place in a nonattainment area or affected county at a percentage and
  for a period that is different from the percentage and period
  specified by this subsection, provided that the commission may not
  set the minimum percentage at a level that is less than 55 percent.
  The commission may allow vehicle travel on highways and roadways,
  or portions of a highway or roadway, designated by the commission
  and located outside a nonattainment area or affected county to
  count towards the percentage of use requirement in this subsection.
         (c-1)  For a proposed project involving a marine vessel or
  engine, the vessel or engine must be operated in the intercoastal
  waterways or bays adjacent to a nonattainment area or affected
  county of this state for a sufficient percentage [amount] of time
  over the lifetime of the project, as determined by the commission,
  to meet the cost-effectiveness requirements of Section 386.105.
  The percentage determined by the commission under this subsection
  may not be less than 55 percent.
         SECTION 5.  Section 386.154, Health and Safety Code, is
  amended by adding Subsections (f), (g), and (h) to read as follows:
         (f)  A new light-duty motor vehicle powered by an electric
  drive is eligible for a $750 incentive if the vehicle:
               (1)  is a motorcycle as defined by Section 541.201,
  Transportation Code;
               (2)  satisfies the requirements of Subsections
  (d)(2)-(5);
               (3)  was acquired on or after September 1, 2013, or a
  later date as established by the commission, by the person applying
  for the incentive under this subsection and for use or lease by that
  person and not for resale; and
               (4)  is not a motor-assisted scooter or pocket bike or
  minimotorbike as those terms are defined by Section 551.351,
  Transportation Code.
         (g)  The incentive under Subsection (f) is limited to 500
  vehicles for each state fiscal biennium.
         (h)  Notwithstanding Subsections (c) and (e) and subject to
  Section 386.252(a)(11), at the beginning of the second state fiscal
  year of the biennium, the commission may adjust the initial vehicle
  limitations provided under Subsections (c) and (e) based on demand
  for incentives under this section during the preceding state fiscal
  year.
         SECTION 6.  Section 386.250, Health and Safety Code, as
  effective September 1, 2021, is amended by amending Subsection (c)
  and adding Subsection (d) to read as follows:
         (c)  The commission may not remit more than 40 percent of the
  amount deposited to the credit of the fund to the state highway fund
  for use by the Texas Department of Transportation for projects
  described by Section 386.051(b)(22).
         (d)  Not later than the 30th day after the last day of each
  state fiscal biennium, the commission shall transfer the
  unencumbered balance of the fund remaining on the last day of the
  state fiscal biennium to the credit of a separate account
  established in the fund for use by the commission for funding
  research at the Texas A&M Transportation Institute to determine:
               (1)  the cost-effectiveness of existing emissions
  reduction programs under the plan; and
               (2)  cost-effective programs that are not currently
  authorized to receive funding under the plan that would improve the
  emissions reduction capabilities of the plan [the Texas emissions
  reduction plan account].
         SECTION 7.  Sections 386.252(a), (f), and (h), 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 per
  state fiscal year as follows:
               (1)  four percent may be used for the clean school bus
  program under Chapter 390;
               (2)  six [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 less [more] than $216,000 and not more than $1
  million may be used by the commission to contract with the Energy
  Systems Laboratory at the Texas A&M Engineering Experiment Station
  annually for:
                     (A)  the development and annual computation of
  creditable statewide emissions reductions obtained through wind
  and other renewable energy resources for the state implementation
  plan; and
                     (B)  the annual computation of creditable
  statewide emissions reductions attributable to energy efficiency
  programs;
               (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, including data analysis, to be used in
  nonattainment areas and affected counties;
               (15)  not more than $10 million may be used by the
  commission for fee-based contracts entered into under the program
  established under Section 386.058;
               (16)  not more than $5 million may be allocated for the
  energy efficiency loan guarantee program established under Section
  388.013; and
               (17)  the balance is to be used by the commission for
  the diesel emissions reduction incentive program under Subchapter C
  as determined by the commission.
         (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.
         (h)  Subject to the limitations outlined in this section,
  money allocated under this section to a particular program may be
  used for another program under the plan as determined by the
  commission, based on demand for grants for eligible projects under
  particular programs [after the commission solicits projects to
  which to award grants according to the initial allocation
  provisions of this section].
         SECTION 8.  Chapter 388, Health and Safety Code, is amended
  by adding Section 388.013 to read as follows:
         Sec. 388.013.  ENERGY EFFICIENCY LOAN GUARANTEE PROGRAM.
  (a) The comptroller and the State Energy Conservation Office by
  rule shall establish and administer a program that issues or
  guarantees loans to be used for improvements that increase the
  energy efficiency of residences that are not newly constructed.
         (b)  Rules adopted under this section must establish
  eligibility requirements for receipt of a loan issued or guaranteed
  under this section, including emissions reduction
  cost-effectiveness criteria with preference given to nonattainment
  areas or affected counties.
         (c)  The State Energy Conservation Office annually shall
  submit to the commission and the laboratory a report that:
               (1)  evaluates the effectiveness of the program
  established under this section; and
               (2)  quantifies energy savings and emissions
  reductions as a result of this program for consideration in the
  state implementation plan for emissions reduction credit.
         SECTION 9.  Section 389.002, Health and Safety Code, is
  amended to read as follows:
         Sec. 389.002.  USE OF CERTAIN INFORMATION FOR FEDERAL
  RECOGNITION OF EMISSIONS REDUCTIONS. The commission, using
  information derived from the reports to the commission under
  Sections 386.205, 388.003(e), [and] 388.006, and 388.013, shall
  take all appropriate and necessary actions so that emissions
  reductions achieved by means of activities under Chapters 386 and
  388 are credited by the United States Environmental Protection
  Agency to the appropriate emissions reduction objectives in the
  state implementation plan.
         SECTION 10.  Section 391.002(b), Health and Safety Code, is
  amended to read as follows:
         (b)  Projects that may be considered for a grant under the
  program include:
               (1)  advanced clean energy projects, as defined by
  Section 382.003;
               (2)  new technology projects that reduce emissions of
  regulated pollutants from stationary sources;
               (3)  new technology projects that reduce emissions from
  upstream and midstream oil and gas production, completions,
  gathering, storage, processing, and transmission activities
  through:
                     (A)  the replacement, repower, or retrofit of
  stationary compressor engines;
                     (B)  the installation of systems to reduce or
  eliminate the loss of gas, flaring of gas, or burning of gas using
  other combustion control devices; or
                     (C)  the installation of systems that reduce
  flaring emissions and other site emissions [by capturing waste heat
  to generate electricity solely for on-site service]; and
               (4)  electricity storage projects related to renewable
  energy, including projects to store electricity produced from wind
  and solar generation that provide efficient means of making the
  stored energy available during periods of peak energy use.
         SECTION 11.  Section 391.205(a), Health and Safety Code, is
  amended to read as follows:
         (a)  Except as provided by Subsection (c), in awarding grants
  under this chapter the commission shall give preference to projects
  that:
               (1)  involve the transport, use, recovery for use, or
  prevention of the loss of natural resources originating or produced
  in this state;
               (2)  contain an energy efficiency component;
               (3)  include the use of solar, wind, or other renewable
  energy sources; [or]
               (4)  recover waste heat from the combustion of natural
  resources and use the heat to generate electricity; or
               (5)  reduce flaring emissions and other site emissions.
         SECTION 12.  Section 391.301, Health and Safety Code, is
  amended to read as follows:
         Sec. 391.301.  RESTRICTION ON USE OF GRANT. A recipient of a
  grant under this chapter must use the grant to pay the incremental
  costs of the purchase, lease, or [and] installation of the project
  for which the grant is made, which may include reasonable and
  necessary expenses for the labor needed to install
  emissions-reducing equipment. The recipient may [not] use the
  grant for the costs of operating and maintaining the
  emissions-reducing equipment.
         SECTION 13.  Section 394.003, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsection (c) to
  read as follows:
         (a)  A vehicle is a qualifying vehicle that may be considered
  for a grant under the program if during the eligibility period
  established by the commission the entity:
               (1)  purchased, leased, or otherwise commercially
  financed the vehicle as an [a new] on-road heavy-duty or
  medium-duty motor vehicle that:
                     (A)  is a new natural gas vehicle or, subject to
  Subsection (c), a used 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.
         (c)  A used natural gas 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.
         SECTION 14.  Section 394.005(b), Health and Safety Code, is
  amended to read as follows:
         (b)  To be eligible for a grant under the program:
               (1)  the use of the qualifying vehicle must be
  projected to result in a reduction in emissions of nitrogen oxides
  of at least 25 percent as compared to the motor vehicle or engine
  being replaced, based on:
                     (A)  the baseline emission level set by the
  commission under Subsection (g); and
                     (B)  the certified emission rate of the qualifying
  [new] vehicle; and
               (2)  the qualifying vehicle must:
                     (A)  replace a heavy-duty or medium-duty motor
  vehicle that:
                           (i)  is an on-road vehicle that has been
  owned, leased, or otherwise commercially financed and registered
  and operated by the applicant in Texas for at least the two years
  immediately preceding the submission of a grant application;
                           (ii)  satisfies any minimum average annual
  mileage or fuel usage requirements established by the commission;
                           (iii)  satisfies any minimum percentage of
  annual usage requirements established by the commission; and
                           (iv)  is in operating condition and has at
  least two years of remaining useful life, as determined in
  accordance with criteria established by the commission;
                     (B)  replace a heavy-duty or medium-duty motor
  vehicle that:
                           (i)  is owned by the applicant;
                           (ii)  is an on-road vehicle that has been:
                                 (a)  owned, leased, or otherwise
  commercially financed and operated in Texas as a fleet vehicle for
  at least the two years immediately preceding the submission of a
  grant application; and
                                 (b)  registered in a county located in
  the clean transportation zone for at least the two years
  immediately preceding the submission of a grant application; and
                           (iii)  otherwise satisfies the mileage,
  usage, and useful life requirements established under Paragraph (A)
  as determined by documentation associated with the vehicle; or
                     (C)  be a heavy-duty or medium-duty motor vehicle
  repowered with a natural gas engine that:
                           (i)  is installed in an on-road vehicle that
  has been owned, leased, or otherwise commercially financed and
  registered and operated by the applicant in Texas for at least the
  two years immediately preceding the submission of a grant
  application;
                           (ii)  satisfies any minimum average annual
  mileage or fuel usage requirements established by the commission;
                           (iii)  satisfies any minimum percentage of
  annual usage requirements established by the commission; and
                           (iv)  is installed in an on-road vehicle
  that, at the time of the vehicle's repowering, was in operating
  condition and had at least two years of remaining useful life, as
  determined in accordance with criteria established by the
  commission.
         SECTION 15.  Section 501.138, Transportation Code, is
  amended by amending Subsections (b-1), (b-2), and (b-3) and adding
  Subsection (b-4) to read as follows:
         (b-1)  Except as provided by Subsection (b-4), fees [Fees]
  collected under Subsection (b) to be sent to the comptroller shall
  be deposited to the credit of the Texas [Mobility Fund, except that
  $5 of each fee imposed under Subsection (a)(1) and deposited on or
  after September 1, 2008, and before September 1, 2015, shall be
  deposited to the credit of the Texas] emissions reduction plan
  fund.
         (b-2)  The comptroller shall establish a record of the amount
  of the fees deposited to the credit of the Texas emissions reduction
  plan fund [Mobility Fund] under Subsection (b-1). On or before the
  fifth workday of each month, the Texas Department of Transportation
  shall remit to the comptroller for deposit to the credit of the
  Texas Mobility Fund [emissions reduction plan fund] an amount of
  money equal to the amount of the fees deposited by the comptroller
  to the credit of the Texas emissions reduction plan fund [Mobility
  Fund] under Subsection (b-1) in the preceding month.  The Texas
  Department of Transportation shall use for remittance to the
  comptroller as required by this subsection money in the state
  highway fund that is not required to be used for a purpose specified
  by Section 7-a, Article VIII, Texas Constitution, and may not use
  for that remittance money received by this state under the
  congestion mitigation and air quality improvement program
  established under 23 U.S.C. Section 149.
         (b-3)  This subsection and Subsections (b-1) and
  [Subsection] (b-2) expire on the last day of the state fiscal
  biennium during which the Texas Commission on Environmental Quality
  publishes in the Texas Register the notice required by Section
  382.037, Health and Safety Code.
         (b-4)  Fees collected under Subsection (b) to be sent to the
  comptroller shall be deposited to the credit of the Texas Mobility
  Fund if the fees are collected on or after the last day of the state
  fiscal biennium during which the Texas Commission on Environmental
  Quality publishes in the Texas Register the notice required by
  Section 382.037, Health and Safety Code.
         SECTION 16.  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 17.  The change in law made by this Act to Section
  501.138, Transportation Code, applies only to a fee collected on or
  after the effective date of this Act. A fee collected before the
  effective date of this Act is governed by the law in effect when the
  fee was collected, and the former law is continued in effect for
  that purpose.
         SECTION 18.  This Act takes effect September 1, 2021.
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