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H.B. No. 2481
AN ACT
relating to air contaminant emissions reductions, including the
continuation and provisions of the Texas emissions reduction plan
and the use of money currently dedicated to the Texas emissions
reduction plan fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 382.0172(c), Health and Safety Code, is
amended to read as follows:
(c) The commission may authorize or allow substitution of
emissions reductions under Subsection (b) only if:
(1) reductions in emissions of one air contaminant for
which the area has been designated as nonattainment are substituted
for reductions in emissions of another air contaminant for which
the area has been designated as nonattainment; or [and]
(2) the commission finds that the substitution will
clearly result in greater health benefits for the community as a
whole than would reductions in emissions at the original facility.
SECTION 2. Subchapter B, Chapter 382, Health and Safety
Code, is amended by adding Section 382.0173 to read as follows:
Sec. 382.0173. ADOPTION OF RULES REGARDING CERTAIN STATE
IMPLEMENTATION PLAN REQUIREMENTS AND STANDARDS OF PERFORMANCE FOR
CERTAIN SOURCES. (a) The commission shall adopt rules to comply
with Sections 110(a)(2)(D) and 111(d) of the federal Clean Air Act
(42 U.S.C. Sections 7410 and 7411). In adopting the rules, at a
minimum the commission shall adopt and incorporate by reference 40
C.F.R. Subparts AA through II and Subparts AAA through III of Part
96 and 40 C.F.R. Subpart HHHH of Part 60. The commission shall
adopt a state implementation plan in accordance with the rules and
submit the plan to the United States Environmental Protection
Agency for approval according to the schedules adopted by that
agency.
(b) The commission may require emissions reductions in
conjunction with implementation of the rules adopted under
Subsection (a) only for electric generating units. The commission
shall make permanent allocations that are reflective of the
allocation requirements of 40 C.F.R. Subparts AA through HH and
Subparts AAA through HHH of Part 96 and 40 C.F.R. Subpart HHHH of
Part 60, as applicable, at no cost to units as defined in 40 C.F.R.
Section 51.123 and 60.4102 using the United States Environmental
Protection Agency's allocation method as specified by Section
60.4142(a)(1)(i), as issued by that agency on May 12, 2005, or 40
C.F.R. Section 96.142(a)(1)(i), as issued by that agency on May 18,
2005, as applicable with the exception of nitrogen oxides which
shall be allocated according to the additional requirements of
Subsection (c). The commission shall maintain a special reserve of
allocations for new units commencing operation on or after January
1, 2001, as defined by 40 C.F.R. Subparts AA through HH and Subparts
AAA through HHH of Part 96 and 40 C.F.R. Subpart HHHH of Part 60, as
applicable with the exception of nitrogen oxides which shall be
allocated according to the additional requirements of Subsection
(c).
(c) Additional requirements regarding NOx allocations:
(1) The commission shall maintain a special reserve of
allocations for nitrogen oxide of 9.5 percent for new units.
Beginning with the 2015 control period, units shall be considered
new for each control period in which they do not have five years of
operating data reported to the commission prior to the date of
allocation for a given control period. Prior to the 2015 control
period, units that commenced operation on or after January 1, 2001,
will receive NOx allocations from the special reserve only.
(2) Nitrogen oxide allowances shall be established for
the 2009-2014 control periods for units commencing operation before
January 1, 2001, using the average of the three highest amounts of
the unit's adjusted control period heat input for 2000 through
2004, with the adjusted control period heat input for each year
calculated as follows:
(A) if the unit is coal-fired during the year,
the unit's control period heat input for such year is multiplied by
90 percent;
(B) if the unit is natural gas-fired during the
year, the unit's control period heat input for such year is
multiplied by 50 percent; and
(C) if the fossil fuel fired unit is not subject
to Subparagraph (A) or (B) of this paragraph, the unit's control
period heat input for such year is multiplied by 30 percent.
(3) Before the allocation date specified by EPA for
the control period beginning January 1, 2016, and every five years
thereafter, the commission shall adjust the baseline for all
affected units using the average of the three highest amounts of the
unit's adjusted control period heat input for periods one through
five of the preceding seven control periods, with the adjusted
control period heat input for each year calculated as follows:
(A) for units commencing operation before
January 1, 2001:
(i) if the unit is coal-fired during the
year, the unit's control period heat input for such year is
multiplied by 90 percent;
(ii) if the unit is natural gas-fired
during the year, the unit's control period heat input for such year
is multiplied by 50 percent; and
(iii) if the fossil fuel fired unit is not
subject to Subdivision (3)(A)(i) or (3)(A)(ii) of this
subparagraph, the unit's control period heat input for such year is
multiplied by 30 percent.
(B) for units commencing operation on or after
January 1, 2001, in accordance with the formulas set forth by USEPA
in 40 C.F.R. 96.142 with any corrections to this section that may be
issued by USEPA prior to the allocation date.
(d) This section applies only while the federal rules cited
in this section are enforceable and does not limit the authority of
the commission to implement more stringent emissions control
requirements.
(e) In adopting rules under Subsection (a), the commission
shall incorporate any modifications to the federal rules cited in
this section that result from a request for rehearing regarding
those rules that is filed with the United States Environmental
Protection Agency or from a petition for review of those rules that
is filed with a court.
(f) The commission shall take all reasonable and
appropriate steps to exclude the West Texas Region and El Paso
Region, as defined by Section 39.264(g), Utilities Code, from any
requirement under, derived from, or associated with 40 C.F.R.
Sections 51.123, 51.124, and 51.125, including filing a petition
for reconsideration with the United States Environmental
Protection Agency requesting that it amend 40 C.F.R. Sections
51.123, 51.124, and 51.125 to exclude such regions. The commission
shall promptly amend the rules it adopts under Subsection (a) of
this section to incorporate any exclusions for such regions that
result from the petition required under this subsection.
(g) The commission shall study the availability of mercury
control technology. The commission shall also examine the timeline
for implementing the reductions required under the federal rules,
the cost of additional controls both to the plant owners and
consumers, and the fiscal impact on the state of higher levels of
mercury emissions between 2005 and 2018, and consider the impact of
trading on local communities. The commission shall report its
findings by September 1, 2006.
SECTION 3. Section 386.002, Health and Safety Code, is
amended to read as follows:
Sec. 386.002. EXPIRATION. This chapter expires August 31,
2010 [2008].
SECTION 4. Section 386.053(c), Health and Safety Code, is
amended to read as follows:
(c) The commission shall make draft guidelines and criteria
available to the public and the United States Environmental
Protection Agency before the 30th [45th] day preceding the date of
final adoption and shall hold at least one public meeting to
consider public comments on the draft guidelines and criteria
before final adoption. The public meeting shall be held in the
affected state implementation plan area, and if the guidelines
affect more than one state implementation plan area, a public
meeting shall be held in each affected state implementation plan
area affected by the guidelines.
SECTION 5. Sections 386.058(b) and (e), Health and Safety
Code, are amended to read as follows:
(b) The governor shall appoint to the advisory board:
(1) a representative of the trucking industry;
(2) a representative of the air conditioning
manufacturing industry;
(3) a representative of the electric utility industry;
(4) a representative of regional transportation; and
(5) a representative of the nonprofit organization
described by Section 386.252(a)(2) [the Texas Council on
Environmental Technology].
(e) Appointed members of the advisory board serve staggered
four-year [two-year] terms, with the [. The] terms of seven or
eight appointed members expiring [expire] February 1 of each
[even-numbered year. The terms of eight appointed members expire
February 1 of each] odd-numbered year. An appointed member may be
reappointed to a subsequent term.
SECTION 6. Section 386.102, Health and Safety Code, is
amended by adding Subsection (e) to read as follows:
(e) To improve the success of the program the commission:
(1) shall establish cost-effective limits for grants
awarded under the program to an owner or operator of a locomotive or
marine vessel that are lower than the cost-effectiveness limits
applied to other emissions reductions grants;
(2) shall determine the maximum amount of reductions
available from the locomotive and marine sectors and develop
strategies to facilitate the maximum amount of reductions in these
sectors; and
(3) shall include in the report required by Section
386.057(b) that is due not later than December 1, 2006, an analysis
of the cost-effectiveness of the grants in these sectors.
SECTION 7. Section 386.111(a), Health and Safety Code, is
amended to read as follows:
(a) The commission shall review an application for a grant
for a project authorized under this subchapter, including an
application for a grant for an infrastructure project, immediately
on receipt of the application. If the commission determines that an
application is incomplete, the commission shall notify the
applicant[, not later than the 15th working day after the date on
which the commission received the application,] with an explanation
of what is missing from the application. The commission shall
[record the date and time of receipt of each application the
commission determines to be complete and shall] evaluate the
completed application according to the appropriate project
criteria. Subject to available funding, the commission shall make
a final determination on an application as soon as possible [and not
later than the 60th working day after the date the application is
determined to be complete].
SECTION 8. Section 386.116(d), Health and Safety Code, is
amended to read as follows:
(d) The [On or before December 1 of each even-numbered year,
the] commission shall include in the biennial plan report required
by Section 386.057(b) a report of commission actions and results
under this section [to the governor, lieutenant governor, and
speaker of the house of representatives].
SECTION 9. Subchapter C, Chapter 386, Health and Safety
Code, is amended by adding Section 386.117 to read as follows:
Sec. 386.117. REBATE GRANTS. (a) The commission shall
adopt a process for awarding grants under this subchapter in the
form of rebates to streamline the grant application, contracting,
reimbursement, and reporting processes for certain projects. The
process adopted under this section must:
(1) designate certain types of projects, such as
repowers, replacements, and retrofits, as eligible for rebates;
(2) project standardized oxides of nitrogen emissions
reductions for each designated project type;
(3) assign a standardized rebate amount for each
designated project type;
(4) allow for processing rebates on an ongoing
first-come, first-served basis; and
(5) consolidate, simplify, and reduce the
administrative work for applicants and the commission associated
with grant application, contracting, reimbursement, and reporting
processes for designated project types.
(b) The commission may limit or expand the designated
project types as necessary to further the goals of the program.
(c) The commission may award rebate grants as a pilot
project for a specific region or may award the grants statewide.
(d) The commission may administer the rebate grants or may
designate another entity to administer the grants.
SECTION 10. Section 386.251(c), Health and Safety Code, is
amended to read as follows:
(c) The fund consists of:
(1) the amount of money deposited to the credit of the
fund [contributions, fees, and surcharges] under:
(A) Section 386.056;
(B) Sections 151.0515 and 152.0215, Tax Code; and
(C) Sections 501.138, 502.1675, and 548.5055
[and 548.256(c)], Transportation Code; and
(2) grant money recaptured under Section 386.111(d).
SECTION 11. 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 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 not more
than 10 percent may be used for on-road diesel purchase or lease
incentives;
(2) for the new technology research and development
program, 9.5 percent of the money in the fund, of which up to
$250,000 is allocated for administration, up to $200,000 is
allocated for a health effects study, $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, [and] not less than 20
percent is to be allocated each year to support research related to
air quality for the Houston-Galveston-Brazoria and Dallas-Fort
Worth nonattainment areas by a nonprofit organization based in
Houston, and the balance is to be allocated each year to that
nonprofit organization based in Houston to be used to implement and
administer the new technology research and development program
under a contract with the commission 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
(3) for administrative costs incurred by the
commission and the laboratory, three percent of the money in the
fund.
SECTION 12. Effective September 1, 2008, 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 and shall be
allocated as follows:
(1) for the diesel emissions reduction incentive
program, 64 [87.5] percent of the money in the fund, of which not
more than 10 percent may be used for on-road diesel purchase or
lease incentives;
(2) for the new technology research and development
program, 33 [9.5] percent of the money in the fund, of which up to
$250,000 is allocated for administration, up to $200,000 is
allocated for a health effects study, $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, [and] not less than 10
[20] percent is to be allocated each year to support research
related to air quality for the Houston-Galveston-Brazoria and
Dallas-Fort Worth nonattainment areas by a nonprofit organization
based in Houston, not less than 25.5 percent is to be allocated each
year to that nonprofit organization based in Houston to be used to
implement and administer the new technology research and
development program under a contract with the commission 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, not more than $12,500,000 is to be
allocated each year from any excess funds to be administered by the
commission to fund a study of regional ozone formation in this
state, meteorological and chemical modeling, and issues related to
ozone formation by ozone precursors and fine particulate matter
formation in this state, and the balance is to be allocated each
year to the commission to fund promising new technologies as
identified through the new technology research and development
program and recommended by that nonprofit organization based in
Houston in order to permit obtaining the maximum credits for
emissions reductions under the state's air quality state
implementation plans; and
(3) for administrative costs incurred by the
commission and the laboratory, three percent of the money in the
fund.
SECTION 13. Section 387.003(a), Health and Safety Code, is
amended to read as follows:
(a) The nonprofit organization described by Section
386.252(a)(2), under a contract with the commission as described by
that section[, in consultation with the Texas Council on
Environmental Technology], shall establish and administer a new
technology research and development program as provided by this
chapter.
SECTION 14. Section 387.005(a), Health and Safety Code, is
amended to read as follows:
(a) Grants awarded under this chapter shall be directed
toward a balanced mix of:
(1) retrofit and add-on technologies to reduce
emissions from the existing stock of vehicles targeted by the Texas
emissions reduction plan;
(2) advanced technologies for new engines and vehicles
that produce very-low or zero emissions of oxides of nitrogen,
including stationary and mobile fuel cells;
(3) studies to improve air quality assessment and
modeling; and
(4) [advanced technologies that promote increased
building and appliance energy performance; and
[(5)] advanced technologies that reduce emissions
from other significant sources.
SECTION 15. Section 388.003(e), Health and Safety Code, is
amended to read as follows:
(e) Local amendments may not result in less stringent energy
efficiency requirements in nonattainment areas and in affected
counties than the energy efficiency chapter of the International
Residential Code or International Energy Conservation Code. Local
amendments must comply with the National Appliance Energy
Conservation Act of 1987 (42 U.S.C. Sections 6291-6309), as
amended. The laboratory, at the request of a municipality or
county, shall determine the relative impact of proposed local
amendments to an energy code, including whether proposed amendments
are substantially equal to or less stringent than the unamended
code. For the purpose of establishing uniform requirements
throughout a region, and on request of a council of governments, a
county, or a municipality, the laboratory may recommend a
climatically appropriate modification or a climate zone
designation for a county or group of counties that is different from
the climate zone designation in the unamended code. The laboratory
shall:
(1) report its findings to the council, county, or
municipality, including an estimate of any energy savings potential
above the base code from local amendments; and
(2) annually submit a report to the commission:
(A) identifying the municipalities and counties
whose codes are more stringent than the unamended code, and whose
codes are equally stringent or less stringent than the unamended
code; and
(B) quantifying energy savings and emissions
reductions from this program.
SECTION 16. Section 389.003, Health and Safety Code, is
amended to read as follows:
Sec. 389.003. COMPUTING ENERGY EFFICIENCY EMISSIONS
REDUCTIONS AND ASSOCIATED CREDITS. (a) The commission shall
develop a method to use in computing emissions reductions obtained
through energy efficiency initiatives, including renewable energy
initiatives, and the credits associated with those reductions.
(b) The laboratory shall assist the commission and affected
political subdivisions in quantifying, as part of the state
implementation plan, credits for emissions reductions attributable
to energy efficiency programs, including renewable energy
programs.
SECTION 17. Section 151.0515(d), Tax Code, is amended to
read as follows:
(d) This section expires September 30, 2010 [2008].
SECTION 18. Section 152.0215(c), Tax Code, is amended to
read as follows:
(c) This section expires September 30, 2010 [2008].
SECTION 19. Section 501.138, Transportation Code, is
amended by amending Subsections (a) and (b) and adding Subsections
(b-1), (b-2), and (b-3) to read as follows:
(a) An applicant for a certificate of title, other than the
state or a political subdivision of the state, must pay the county
assessor-collector a fee of:
(1) $33 if the applicant's residence is a county
located within a nonattainment area as defined under Section 107(d)
of the federal Clean Air Act (42 U.S.C. Section 7407), as amended,
or is an affected county, as defined by Section 386.001, Health and
Safety Code;
(2) $28 if the applicant's residence is any other
county; or
(3) on or after September 1, 2010 [2008], $28
regardless of the county in which the applicant resides.
(b) The county assessor-collector shall send:
(1) $5 of the fee to the county treasurer for deposit
in the officers' salary fund;
(2) $8 of the fee to the department:
(A) together with the application within the time
prescribed by Section 501.023; or
(B) if the fee is deposited in an
interest-bearing account or certificate in the county depository or
invested in an investment authorized by Subchapter A, Chapter 2256,
Government Code, not later than the 35th day after the date on which
the fee is received; and
(3) the following amount to the comptroller at the
time and in the manner prescribed by the comptroller:
(A) $20 of the fee if the applicant's residence
is a county located within a nonattainment area as defined under
Section 107(d) of the federal Clean Air Act (42 U.S.C. Section
7407), as amended, or is an affected county, as defined by Section
386.001, Health and Safety Code;
(B) $15 of the fee if the applicant's residence
is any other county; or
(C) on or after September 1, 2010, $15 regardless
of the county in which the applicant resides.
(b-1) Fees collected under Subsection (b) [this subsection]
to be sent to the comptroller shall be deposited as follows:
(1) [(i)] before September 1, 2008, to the credit of
the Texas emissions reduction plan fund; and
(2) on or [(ii)] after September 1, 2008, 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, 2010, 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 Mobility Fund under
Subsection (b-1). On or before the fifth workday of each month, the
department shall remit to the comptroller for deposit to the credit
of the Texas 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 Mobility Fund under Subsection (b-1) in the preceding
month. The department 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 Subsection (b-2) expire September
1, 2010.
SECTION 20. Section 502.1675(c), Transportation Code, is
amended to read as follows:
(c) This section expires August 31, 2010 [2008].
SECTION 21. Section 548.5055(c), Transportation Code, is
amended to read as follows:
(c) This section expires August 31, 2010 [2008].
SECTION 22. Sections 386.001(4), 386.057(e), 387.002, and
387.010, Health and Safety Code, and Sections 548.256(c) and (d),
Transportation Code, are repealed.
SECTION 23. The Texas Commission on Environmental Quality
shall prepare guidance documents for the rebate grants required by
Section 386.117, Health and Safety Code, as added by this Act, not
later than January 1, 2006.
SECTION 24. (a) As soon as practicable on or after the
effective date of this Act, the governor shall appoint to the Texas
Emissions Reduction Plan Advisory Board a representative of the
nonprofit organization described by Section 386.252(a)(2), Health
and Safety Code, as required by Section 386.058(b), Health and
Safety Code, as amended by this Act, to replace the representative
of the Texas Council on Environmental Technology serving on that
board on the effective date of this Act.
(b) As soon as practicable on or after the effective date of
this Act, the governor, lieutenant governor, and speaker of the
house of representatives, by mutual agreement, shall designate the
terms of the appointed members of the Texas Emissions Reduction
Plan Advisory Board so that the terms of seven appointed members
expire on February 1, 2007, and the terms of eight appointed members
expire on February 1, 2009, as provided by Section 386.058(e),
Health and Safety Code, as amended by this Act.
SECTION 25. Except as otherwise provided by this Act, this
Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2481 was passed by the House on April
28, 2005, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 2481 on May 29, 2005, by a non-record
vote; and that the House adopted H.C.R. No. 248 authorizing certain
corrections in H.B. No. 2481 on May 30, 2005, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2481 was passed by the Senate, with
amendments, on May 20, 2005, by the following vote: Yeas 31, Nays
0; and that the Senate adopted H.C.R. No. 248 authorizing certain
corrections in H.B. No. 2481 on May 30, 2005, by a viva-voce vote.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor