Bill Text: TX SB385 | 2011-2012 | 82nd Legislature | Enrolled

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Bill Title: Relating to the creation of programs to support the use of alternative fuels, including an alternative fuel program to be funded by the Texas emissions reduction plan fund and a grant program for certain natural gas vehicles.

Sponsorship: Moderate Partisan Bill (Republican 6-1)

Status: (Passed) 2011-06-17 - Effective on 9/1/11 [SB385 Detail]

Download: Texas-2011-SB385-Enrolled.html

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S.B. No. 385

AN ACT
relating to the creation of programs to support the use of
alternative fuels, including an alternative fuel program to be
funded by the Texas emissions reduction plan fund and a grant
program for certain natural gas vehicles.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 386.252, Health and
Safety Code, as amended by Chapters 1125 (H.B. 1796) and 1232 (S.B.
1759), Acts of the 81st Legislature, Regular Session, 2009, is
reenacted and amended to read as follows:
(a) Money in the fund may be used only to implement and
administer programs established under the plan and shall be
allocated as follows:
(1) for the diesel emissions reduction incentive
program, 87.5 percent of the money in the fund, of which:
(A) not more than four percent may be used for the
clean school bus program;
(B) not more than 10 percent may be used for
on-road diesel purchase or lease incentives; [and]
(C) a specified amount may be used for the new
technology implementation grant program, from which a defined
amount may be set aside for electricity storage projects related to
renewable energy;
(D) five percent shall be used for the clean
fleet program;
(E) two percent may be used for the Texas
alternative fueling facilities program;
(F) not less than 16 percent shall be used for the
natural gas vehicle grant program; and
(G) not more than four percent may be used to
provide grants for natural gas fueling stations under Section
394.010;
(2) for the new technology research and development
program, nine percent of the money in the fund, of which:
(A) up to $200,000 is allocated for a health
effects study;
(B) $500,000 is to be deposited in the state
treasury to the credit of the clean air account created under
Section 382.0622 to supplement funding for air quality planning
activities in affected counties;
(C) not less than 20 percent is to be allocated
each year to support research related to air quality as provided by
Section 387.010; and
(D) the balance is allocated each year to the
commission to be used to:
(i) implement and administer the new
technology research and development program for the purpose of
identifying, testing, and evaluating new emissions-reducing
technologies with potential for commercialization in this state and
to facilitate their certification or verification; and
(ii) contract with the Energy Systems
Laboratory at the Texas Engineering Experiment Station for $216,000
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; and
(3) two percent is allocated to the commission and 1.5
percent is allocated to the laboratory for administrative costs
incurred by the commission and the laboratory.
SECTION 2. Section 386.252, Health and Safety Code, is
amended by adding Subsections (e), (f), and (g) to read as follows:
(e) The commission may allocate unexpended money designated
for the Texas alternative fueling facilities program to other
programs described under Subsection (a) after the commission
allocates money to recipients under the alternative fueling
facilities program.
(f) Notwithstanding Subsection (a), the commission may
reallocate money in the fund if:
(1) the commission, in consultation with the governor
and the advisory board, determines that the use of the money in the
fund for the program established under Chapter 394 will cause the
state to be in noncompliance with the state implementation plan to
the extent that federal action is likely; and
(2) the commission finds that the reallocation of some
or all of the funding for the program established under Chapter 394
would resolve the noncompliance.
(g) Under Subsection (f), the commission may not reallocate
more than the minimum amount of money necessary to resolve the
noncompliance.
SECTION 3. Subtitle C, Title 5, Health and Safety Code, is
amended by adding Chapters 393 and 394 to read as follows:
CHAPTER 393. ALTERNATIVE FUELING FACILITIES PROGRAM
Sec. 393.001. DEFINITIONS. In this chapter:
(1) "Alternative fuel" means a fuel other than
gasoline or diesel fuel, other than biodiesel fuel, including
electricity, compressed natural gas, liquified natural gas,
hydrogen, propane, or a mixture of fuels containing at least 85
percent methanol by volume.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Program" means the Texas alternative fueling
facilities program established under this chapter.
Sec. 393.002. PROGRAM. (a) The commission shall establish
and administer the Texas alternative fueling facilities program to
provide fueling facilities for alternative fuel in nonattainment
areas. Under the program, the commission shall provide a grant for
each eligible facility to offset the cost of those facilities.
(b) An entity that constructs, reconstructs, or acquires an
alternative fueling facility is eligible to participate in the
program.
Sec. 393.003. APPLICATION FOR GRANT. (a) An entity
operating in this state that constructs, reconstructs, or acquires
a facility to store, compress, or dispense alternative fuels may
apply for and receive a grant under the program.
(b) The commission may adopt guidelines to allow a regional
planning commission, council of governments, or similar regional
planning agency created under Chapter 391, Local Government Code,
or a private nonprofit organization to apply for and receive a grant
to improve the ability of the program to achieve its goals.
(c) 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.
Sec. 393.004. ELIGIBILITY OF FACILITIES FOR GRANTS.
(a) The commission by rule shall establish criteria for
prioritizing facilities 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, the entity
receiving the grant must agree to make the alternative fueling
facility available to persons not associated with the entity at
times designated by the grant agreement.
(c) A recipient of a grant under this chapter is not
eligible to receive a second grant under this chapter for the same
facility.
Sec. 393.005. RESTRICTION ON USE OF GRANT. A recipient of a
grant under this chapter shall use the grant only to pay the costs
of the facility for which the grant is made. The recipient may not
use the grant to pay the recipient's administrative expenses.
Sec. 393.006. AMOUNT OF GRANT. For each eligible facility
for which a recipient is awarded a grant under the program, the
commission shall award the grant in an amount equal to the lesser
of:
(1) 50 percent of the sum of the actual eligible costs
incurred by the grant recipient within deadlines established by the
commission to construct, reconstruct, or acquire the facility; or
(2) $500,000.
Sec. 393.007. EXPIRATION. This chapter expires August 31,
2018.
CHAPTER 394. TEXAS NATURAL GAS VEHICLE GRANT PROGRAM
Sec. 394.001. DEFINITIONS. In this chapter:
(1) "Advisory board" means the Texas Emissions
Reduction Plan Advisory Board.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Executive director" means the executive director
of the Texas Commission on Environmental Quality.
(4) "Heavy-duty motor vehicle" means a motor vehicle
with:
(A) a gross vehicle weight rating of more than
8,500 pounds; and
(B) an engine certified to the United States
Environmental Protection Agency's standards for heavy-duty
engines.
(5) "Incremental cost" means the difference between
the manufacturer's suggested retail price of a baseline vehicle,
the documented dealer price of a baseline vehicle, cost to lease or
otherwise commercially finance a baseline vehicle, cost to repower
with a baseline engine, or other appropriate baseline cost
established by the commission, and the actual cost of the natural
gas vehicle purchase, lease, or other commercial financing, or
repower.
(6) "Medium-duty motor vehicle" means a motor vehicle
with a gross vehicle weight rating of more than 8,500 pounds that:
(A) is certified to the United States
Environmental Protection Agency's light-duty emissions standard;
or
(B) has an engine certified to the United States
Environmental Protection Agency's light-duty emissions standard.
(7) "Motor vehicle" has the meaning assigned by
Section 386.151.
(8) "Natural gas vehicle" means a motor vehicle that
receives not less than 75 percent of its power from compressed or
liquefied natural gas.
(9) "Program" means the Texas natural gas vehicle
grant program established under this chapter.
Sec. 394.002. PROGRAM. The commission shall establish and
administer the Texas natural gas vehicle grant program to encourage
an entity that has a heavy-duty or medium-duty motor vehicle to
repower the vehicle with a natural gas engine or replace the vehicle
with a natural gas vehicle. Under the program, the commission shall
provide grants for eligible heavy-duty motor vehicles and
medium-duty motor vehicles to offset the incremental cost for the
entity of repowering or replacing the heavy-duty or medium-duty
motor vehicle.
Sec. 394.003. QUALIFYING VEHICLES. (a) A vehicle is a
qualifying vehicle that may be considered for a grant under the
program if during the calendar year the entity:
(1) purchased, leased, or otherwise commercially
financed the vehicle as a new on-road heavy-duty or medium-duty
motor vehicle that:
(A) is a natural gas vehicle;
(B) is certified to current federal emissions
standards;
(C) replaces an on-road heavy-duty or
medium-duty motor vehicle of the same weight classification and
use; and
(D) is powered by an engine certified to:
(i) emit not more than 0.2 grams of nitrogen
oxides per brake horsepower hour; or
(ii) meet or exceed the United States
Environmental Protection Agency's Bin 5 standard for light-duty
engines when powering the vehicle; or
(2) repowered the on-road motor vehicle to a natural
gas vehicle powered by a natural gas engine that:
(A) is certified to current federal emissions
standards; and
(B) is:
(i) a heavy-duty engine that is certified
to emit not more than 0.2 grams of nitrogen oxides per brake
horsepower hour; or
(ii) certified to meet or exceed the United
States Environmental Protection Agency's Bin 5 standard for
light-duty engines when powering the vehicle.
(b) A heavy-duty or medium-duty motor vehicle is not a
qualifying vehicle if the vehicle or the natural gas engine
powering the vehicle:
(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. 394.004. APPLICATION FOR GRANT. (a) Only an entity
operating in this state that operates a heavy-duty or medium-duty
motor vehicle 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. 394.005. ELIGIBILITY FOR GRANTS. (a) The commission
by rule shall establish criteria for prioritizing qualifying
vehicles eligible to receive grants under this chapter. The
commission shall review and revise the criteria as appropriate
after consultation with the advisory board.
(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 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; or
(B) 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.
(c) As a condition of receiving a grant, the qualifying
vehicle must be continuously owned, leased, or otherwise
commercially financed and registered and operated in the state by
the grant recipient until the earlier of the fourth anniversary of
the date of reimbursement of the grant-funded expenses or until the
date the vehicle has been in operation for 400,000 miles after the
date of reimbursement. Not less than 75 percent of the annual use
of the qualifying vehicle, either mileage or fuel use as determined
by the commission, must occur in:
(1) the counties any part of which are included in the
area described by Section 394.010(a); or
(2) counties designated as nonattainment areas within
the meaning of Section 107(d) of the federal Clean Air Act (42
U.S.C. Section 7407).
(d) 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.
(e) The commission by contract may require the return of all
or a portion of grant funds for a grant recipient's noncompliance
with the usage and percentage of use requirements under this
section.
(f) A heavy-duty or medium-duty motor vehicle replaced
under this program must be rendered permanently inoperable by
crushing the vehicle, by making a hole in the engine block and
permanently destroying the frame of the vehicle, or by another
method approved by the commission that permanently removes the
vehicle from operation in this state. The commission shall
establish criteria for ensuring the permanent destruction of the
engine or vehicle. The commission shall enforce the destruction
requirements.
(g) The commission shall establish baseline emission levels
for emissions of nitrogen oxides for on-road heavy-duty or
medium-duty motor vehicles being replaced by using the emission
certification for the engine or vehicle being replaced. The
commission may consider deterioration of the emission performance
of the engine of the vehicle being replaced in establishing the
baseline emission level. The commission may consider and establish
baseline emission rates for additional pollutants of concern, as
determined by the commission after consultation with the advisory
board.
(h) Mileage or fuel use requirements established by the
commission under Subsection (b)(2)(A)(ii) may differ by vehicle
weight categories and type of use.
(i) The executive director shall waive the requirements of
Subsection (b)(2)(A)(i) on a finding of good cause, which may
include short lapses in registration or operation due to economic
conditions, seasonal work, or other circumstances.
Sec. 394.006. 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 for which the grant is made, which may
include the initial cost of the natural gas vehicle or natural gas
engine and the reasonable and necessary expenses incurred for the
labor needed to install emissions-reducing equipment. The
recipient may not use the grant to pay the recipient's
administrative expenses.
Sec. 394.007. AMOUNT OF GRANT. (a) The commission shall
develop a grant schedule that:
(1) assigns a standardized grant in an amount between
60 and 90 percent of the incremental cost of a natural gas vehicle
purchase, lease, other commercial finance, or repowering;
(2) is based on:
(A) the certified emission level of nitrogen
oxides, or other pollutants as determined by the commission, of the
engine powering the natural gas vehicle; and
(B) the usage of the natural gas vehicle; and
(3) may take into account the overall emissions
reduction achieved by the natural gas vehicle.
(b) Not less than 60 percent of the total amount of grants
awarded under this chapter for the purchase and repowering of motor
vehicles must be awarded to motor vehicles with a gross vehicle
weight rating of at least 33,001 pounds. The minimum grant
requirement under this subsection does not apply if the commission
does not receive enough grant applications to satisfy the
requirement for motor vehicles described by this subsection that
are eligible to receive a grant under this chapter.
(c) 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
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
for which the grant is awarded.
(d) The commission shall reduce the amount of a grant
awarded under this chapter as necessary to keep the combined
incentive total at or below the incremental cost of the vehicle for
which the grant is awarded if the grant recipient is eligible to
receive an automatic incentive at or before the time a grant is
awarded under this chapter.
Sec. 394.008. GRANT PROCEDURES. (a) The commission shall
adopt procedures for:
(1) awarding grants under this chapter in the form of
rebates; and
(2) streamlining the grant application, contracting,
reimbursement, and reporting process for qualifying natural gas
vehicle purchases or repowers.
(b) Procedures adopted under this section must:
(1) provide for the commission to compile and
regularly update a listing of preapproved natural gas vehicles:
(A) powered by natural gas engines certified to
emit not more than 0.2 grams of nitrogen oxides per brake horsepower
hour; or
(B) certified to the United States Environmental
Protection Agency's light-duty Bin 5 standard or better;
(2) if a federal standard for the calculation of
emissions reductions exists, 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 rebate amount for each
qualifying vehicle under Section 394.007;
(4) allow for processing rebates on an ongoing
first-come, first-served basis;
(5) provide for contracts between the commission and
participating dealers under Section 394.009;
(6) allow grant recipients to assign their grant funds
to participating dealers to offset the purchase or lease price;
(7) require grant applicants to identify natural gas
fueling stations that are available to fuel the qualifying vehicle
in the area of its use;
(8) provide for payment not later than the 30th day
after the date the request for reimbursement for an approved grant
is received;
(9) provide for application submission and
application status checks to be made over the Internet; and
(10) 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. 394.009. PARTICIPATING DEALERS. (a) In this section,
"participating dealer" means a person who:
(1) sells, leases, or otherwise commercially finances
on-road heavy-duty or medium-duty natural gas vehicles or
heavy-duty or medium-duty natural gas engines; and
(2) has satisfied all requirements established by the
commission for participation in the program as a dealer.
(b) A participating dealer must agree to the terms and
conditions of a standardized contract developed by the commission.
(c) A participating dealer shall:
(1) provide information regarding natural gas vehicle
grants to fleet operators;
(2) assist an applicant who purchases, leases, or
otherwise commercially finances a natural gas vehicle or engine
from the dealer with the completion of the application; and
(3) submit completed applications and documentation
to the commission on behalf of an applicant who purchases, leases,
or otherwise commercially finances a natural gas vehicle or engine
from the dealer.
(d) A participating dealer may not approve a grant.
(e) The commission shall:
(1) maintain and make available to the public online a
list of all qualified dealers; and
(2) establish requirements for participation in the
program by sellers of on-road heavy-duty or medium-duty natural gas
vehicles and heavy-duty or medium-duty natural gas engines.
Sec. 394.010. CLEAN TRANSPORTATION TRIANGLE. (a) To
ensure that natural gas vehicles purchased, leased, or otherwise
commercially financed or repowered under the program have access to
fuel, and to build the foundation for a self-sustaining market for
natural gas vehicles in Texas, the commission shall award grants to
support the development of a network of natural gas vehicle fueling
stations along the interstate highways connecting Houston, San
Antonio, Dallas, and Fort Worth. In awarding the grants, the
commission shall provide for:
(1) strategically placed natural gas vehicle fueling
stations in and between the Houston, San Antonio, and Dallas-Fort
Worth areas to enable a natural gas vehicle to travel along that
triangular area relying solely on natural gas fuel;
(2) grants to be dispersed through a competitive
bidding process to offset a portion of the cost of installation of
the natural gas dispensing equipment;
(3) contracts that require the recipient stations to
meet operational, maintenance, and reporting requirements as
specified by the commission; and
(4) a listing, to be maintained by the commission and
made available to the public online, of all natural gas vehicle
fueling stations that have received grant funding, including
location and hours of operation.
(b) The commission may not award more than:
(1) three station grants to any entity; or
(2) one grant for each station.
(c) Grants awarded under this section may not exceed:
(1) $100,000 for a compressed natural gas station;
(2) $250,000 for a liquefied natural gas station; or
(3) $400,000 for a station providing both liquefied
and compressed natural gas.
(d) Stations funded by grants under this section must be
publicly accessible and located not more than three miles from an
interstate highway system. The commission shall give preference
to:
(1) stations providing both liquefied natural gas and
compressed natural gas at a single location; and
(2) stations located not more than one mile from an
interstate highway system.
(e) To meet the goals of this section, the commission may
solicit grant applications under this section for a new fueling
station in a specific area or location.
(f) Grants made under this section are not subject to the
requirements of Sections 394.002 through 394.008. The commission
shall develop an application package and review applications in
accordance with Sections 386.110 and 386.111.
(g) The commission, in consultation with the natural gas
industry, shall determine the most efficient use of funding for the
station grants under this section to maximize the availability of
natural gas fueling stations.
Sec. 394.011. ADMINISTRATION OF PROGRAM. The commission
may contract with one or more entities for administration of the
program.
Sec. 394.012. EXPIRATION. This chapter expires August 31,
2017.
SECTION 4. The Texas Commission on Environmental Quality
shall adopt rules under Section 393.004, Health and Safety Code, as
added by this Act, as soon as practicable after the effective date
of this Act.
SECTION 5. The Texas Commission on Environmental Quality
shall adopt rules and establish procedures under Chapter 394,
Health and Safety Code, as added by this Act, as soon as practicable
after the effective date of this Act.
SECTION 6. To the extent of any conflict, this Act prevails
over another Act of the 82nd Legislature, Regular Session, 2011,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 7. This Act takes effect September 1, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 385 passed the Senate on
April 4, 2011, by the following vote: Yeas 29, Nays 2; and that
the Senate concurred in House amendment on May 27, 2011, by the
following vote: Yeas 29, Nays 2.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 385 passed the House, with
amendment, on May 23, 2011, by the following vote: Yeas 112,
Nays 27, four present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor