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AN ACT
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relating to grant programs for certain natural gas motor vehicles |
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and alternative fuel facilities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subsection (a), Section 386.252, Health and |
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Safety Code, as amended by Chapters 1125 (H.B. 1796) and 1232 (S.B. |
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1759), Acts of the 81st Legislature, Regular Session, 2009, is |
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reenacted and amended to read as follows: |
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(a) Money in the fund may be used only to implement and |
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administer programs established under the plan and shall be |
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allocated as follows: |
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(1) for the diesel emissions reduction incentive |
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program, 87.5 percent of the money in the fund, of which: |
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(A) not more than four percent may be used for the |
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clean school bus program; |
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(B) not more than 10 percent may be used for |
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on-road diesel purchase or lease incentives; [and] |
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(C) a specified amount may be used for the new |
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technology implementation grant program, from which a defined |
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amount may be set aside for electricity storage projects related to |
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renewable energy; |
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(D) five percent shall be used for the clean |
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fleet program; |
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(E) not less than 16 percent shall be used for the |
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natural gas vehicle rebate program; |
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(F) not more than four percent may be used to |
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provide grants for natural gas fueling stations under Section |
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393.010; and |
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(G) two percent may be used for the Texas |
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alternative fueling facilities program; |
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(2) for the new technology research and development |
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program, nine percent of the money in the fund, of which: |
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(A) up to $200,000 is allocated for a health |
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effects study; |
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(B) $500,000 is to be deposited in the state |
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treasury to the credit of the clean air account created under |
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Section 382.0622 to supplement funding for air quality planning |
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activities in affected counties; |
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(C) not less than 20 percent is to be allocated |
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each year to support research related to air quality as provided by |
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Section 387.010; and |
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(D) the balance is allocated each year to the |
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commission to be used to: |
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(i) implement and administer the new |
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technology research and development program for the purpose of |
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identifying, testing, and evaluating new emissions-reducing |
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technologies with potential for commercialization in this state and |
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to facilitate their certification or verification; and |
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(ii) contract with the Energy Systems |
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Laboratory at the Texas Engineering Experiment Station for $216,000 |
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annually for the development and annual computation of creditable |
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statewide emissions reductions obtained through wind and other |
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renewable energy resources for the state implementation plan; and |
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(3) two percent is allocated to the commission and 1.5 |
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percent is allocated to the laboratory for administrative costs |
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incurred by the commission and the laboratory. |
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SECTION 2. Section 386.252, Health and Safety Code, is |
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amended by adding Subsections (e), (f), and (g) to read as follows: |
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(e) The commission may allocate unexpended money designated |
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for the Texas alternative fueling facilities program to other |
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programs described under Subsection (a) after the commission |
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allocates money to recipients under the alternative fueling |
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facilities program. |
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(f) Notwithstanding Subsection (a), the commission may |
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reallocate money in the fund if: |
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(1) the commission, in consultation with the governor |
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and the advisory board, determines that the use of the money in the |
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fund for the program established under Chapter 393 will cause the |
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state to be in noncompliance with the state implementation plan to |
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the extent that federal action is likely; and |
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(2) the commission finds that the reallocation of some |
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or all of the funding for the program established under Chapter 393 |
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would resolve the noncompliance. |
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(g) Under Subsection (f), the commission may not reallocate |
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more than the minimum amount of money necessary to resolve the |
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noncompliance. |
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SECTION 3. Subtitle C, Title 5, Health and Safety Code, is |
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amended by adding Chapter 393 to read as follows: |
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CHAPTER 393. TEXAS NATURAL GAS VEHICLE GRANT PROGRAM |
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Sec. 393.001. DEFINITIONS. In this chapter: |
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(1) "Advisory board" means the Texas Emissions |
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Reduction Plan Advisory Board. |
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(2) "Commission" means the Texas Commission on |
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Environmental Quality. |
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(3) "Executive director" means the executive director |
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of the Texas Commission on Environmental Quality. |
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(4) "Heavy-duty motor vehicle" means a motor vehicle |
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with: |
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(A) a gross vehicle weight rating of more than |
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8,500 pounds; and |
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(B) an engine certified to the United States |
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Environmental Protection Agency's standards for heavy-duty |
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engines. |
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(5) "Incremental cost" means the difference between |
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the manufacturer's suggested retail price of a baseline vehicle, |
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the documented dealer price of a baseline vehicle, cost to lease or |
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otherwise commercially finance a baseline vehicle, cost to repower |
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with a baseline engine, or other appropriate baseline cost |
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established by the commission, and the actual cost of the natural |
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gas vehicle purchase, lease, or other commercial financing, or |
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repower. |
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(6) "Medium-duty motor vehicle" means a motor vehicle |
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with a gross vehicle weight rating of more than 8,500 pounds that: |
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(A) is certified to the United States |
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Environmental Protection Agency's light-duty emissions standard; |
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or |
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(B) has an engine certified to the United States |
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Environmental Protection Agency's light-duty emissions standard. |
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(7) "Motor vehicle" has the meaning assigned by |
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Section 386.151. |
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(8) "Natural gas vehicle" means a motor vehicle that |
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receives not less than 75 percent of its power from compressed or |
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liquefied natural gas. |
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(9) "Program" means the Texas natural gas vehicle |
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grant program established under this chapter. |
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Sec. 393.002. PROGRAM. The commission shall establish and |
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administer the Texas natural gas vehicle grant program to encourage |
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an entity that has a heavy-duty or medium-duty motor vehicle to |
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repower the vehicle with a natural gas engine or replace the vehicle |
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with a natural gas vehicle. Under the program, the commission shall |
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provide grants for eligible heavy-duty motor vehicles and |
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medium-duty motor vehicles to offset the incremental cost for the |
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entity of repowering or replacing the heavy-duty or medium-duty |
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motor vehicle. |
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Sec. 393.003. QUALIFYING VEHICLES. (a) A vehicle is a |
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qualifying vehicle that may be considered for a grant under the |
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program if during the calendar year the entity: |
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(1) purchased, leased, or otherwise commercially |
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financed the vehicle as a new on-road heavy-duty or medium-duty |
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motor vehicle that: |
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(A) is a natural gas vehicle; |
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(B) is certified to current federal emissions |
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standards; |
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(C) replaces an on-road heavy-duty or |
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medium-duty motor vehicle of the same weight classification and |
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use; and |
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(D) is powered by an engine certified to: |
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(i) emit not more than 0.2 grams of nitrogen |
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oxides per brake horsepower hour; or |
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(ii) meet or exceed the United States |
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Environmental Protection Agency's Bin 5 standard for light-duty |
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engines when powering the vehicle; or |
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(2) repowered the on-road motor vehicle to a natural |
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gas vehicle powered by a natural gas engine that: |
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(A) is certified to current federal emissions |
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standards; and |
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(B) is: |
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(i) a heavy-duty engine that is certified |
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to emit not more than 0.2 grams of nitrogen oxides per brake |
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horsepower hour; or |
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(ii) certified to meet or exceed the United |
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States Environmental Protection Agency's Bin 5 standard for |
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light-duty engines when powering the vehicle. |
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(b) A heavy-duty or medium-duty motor vehicle is not a |
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qualifying vehicle if the vehicle or the natural gas engine |
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powering the vehicle: |
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(1) has been awarded a grant under this chapter for a |
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previous reporting period; or |
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(2) has received a similar grant or tax credit in |
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another jurisdiction if that grant or tax credit program is relied |
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on for credit in the state implementation plan. |
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Sec. 393.004. APPLICATION FOR GRANT. (a) Only an entity |
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operating in this state that operates a heavy-duty or medium-duty |
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motor vehicle may apply for and receive a grant under this chapter. |
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(b) An application for a grant under this chapter must be |
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made on a form provided by the commission and must contain the |
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information required by the commission. |
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(c) The commission, after consulting stakeholders, shall: |
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(1) simplify the application form; and |
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(2) minimize, to the maximum extent possible, |
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documentation required for an application. |
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Sec. 393.005. ELIGIBILITY FOR GRANTS. (a) The commission |
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by rule shall establish criteria for prioritizing qualifying |
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vehicles eligible to receive grants under this chapter. The |
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commission shall review and revise the criteria as appropriate |
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after consultation with the advisory board. |
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(b) To be eligible for a grant under the program: |
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(1) the use of the qualifying vehicle must be |
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projected to result in a reduction in emissions of nitrogen oxides |
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of at least 25 percent as compared to the motor vehicle or engine |
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being replaced, based on: |
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(A) the baseline emission level set by the |
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commission under Subsection (g); and |
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(B) the certified emission rate of the new |
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vehicle; and |
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(2) the qualifying vehicle must: |
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(A) replace a heavy-duty or medium-duty motor |
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vehicle that: |
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(i) is an on-road vehicle that has been |
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owned, leased, or otherwise commercially financed and registered |
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and operated by the applicant in Texas for at least the two years |
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immediately preceding the submission of a grant application; |
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(ii) satisfies any minimum average annual |
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mileage or fuel usage requirements established by the commission; |
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(iii) satisfies any minimum percentage of |
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annual usage requirements established by the commission; and |
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(iv) is in operating condition and has at |
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least two years of remaining useful life, as determined in |
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accordance with criteria established by the commission; or |
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(B) be a heavy-duty or medium-duty motor vehicle |
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repowered with a natural gas engine that: |
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(i) is installed in an on-road vehicle that |
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has been owned, leased, or otherwise commercially financed and |
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registered and operated by the applicant in Texas for at least the two |
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years immediately preceding the submission of a grant application; |
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(ii) satisfies any minimum average annual |
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mileage or fuel usage requirements established by the commission; |
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(iii) satisfies any minimum percentage of |
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annual usage requirements established by the commission; and |
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(iv) is installed in an on-road vehicle |
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that, at the time of the vehicle's repowering, was in operating |
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condition and had at least two years of remaining useful life, as |
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determined in accordance with criteria established by the |
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commission. |
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(c) As a condition of receiving a grant, the qualifying |
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vehicle must be continuously owned, leased, or otherwise |
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commercially financed and registered and operated in the state by |
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the grant recipient until the earlier of the fourth anniversary of |
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the date of reimbursement of the grant-funded expenses or until the |
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date the vehicle has been in operation for 400,000 miles after the |
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date of reimbursement. Not less than 75 percent of the annual use |
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of the qualifying vehicle, either mileage or fuel use as determined |
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by the commission, must occur in: |
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(1) the counties any part of which are included in the |
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area described by Section 393.010(a); or |
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(2) counties designated as nonattainment areas within |
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the meaning of Section 107(d) of the federal Clean Air Act (42 |
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U.S.C. Section 7407). |
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(d) The commission shall include and enforce the usage |
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provisions in the grant contracts. The commission shall monitor |
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compliance with the ownership, leasing, and usage requirements, |
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including submission of reports on at least an annual basis, or more |
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frequently as determined by the commission. |
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(e) The commission by contract may require the return of all |
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or a portion of grant funds for a grant recipient's noncompliance |
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with the usage and percentage of use requirements under this |
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section. |
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(f) A heavy-duty or medium-duty motor vehicle replaced |
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under this program must be rendered permanently inoperable by |
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crushing the vehicle, by making a hole in the engine block and |
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permanently destroying the frame of the vehicle, or by another |
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method approved by the commission that permanently removes the |
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vehicle from operation in this state. The commission shall |
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establish criteria for ensuring the permanent destruction of the |
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engine or vehicle. The commission shall enforce the destruction |
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requirements. |
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(g) The commission shall establish baseline emission levels |
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for emissions of nitrogen oxides for on-road heavy-duty motor |
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vehicles and medium-duty motor vehicles being replaced by using the |
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emission certification for the engine or vehicle being replaced. |
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The commission may consider deterioration of the emission |
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performance of the engine of the vehicle being replaced in |
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establishing the baseline emission level. The commission may |
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consider and establish baseline emission rates for additional |
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pollutants of concern, as determined by the commission after |
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consultation with the advisory board. |
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(h) Mileage or fuel use requirements established by the |
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commission under Subsection (b)(2)(A)(ii) may differ by vehicle |
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weight categories and type of use. |
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(i) The executive director shall waive the requirements of |
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Subsection (b)(2)(A)(i) on a finding of good cause, which may |
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include short lapses in registration or operation due to economic |
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conditions, seasonal work, or other circumstances. |
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Sec. 393.006. RESTRICTION ON USE OF GRANT. A recipient of a |
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grant under this chapter shall use the grant to pay the incremental |
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costs of the replacement for which the grant is made, which may |
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include the initial cost of the natural gas vehicle or natural gas |
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engine and the reasonable and necessary expenses incurred for the |
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labor needed to install emissions-reducing equipment. The |
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recipient may not use the grant to pay the recipient's |
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administrative expenses. |
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Sec. 393.007. AMOUNT OF GRANT. (a) The commission shall |
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develop a grant schedule that: |
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(1) assigns a standardized grant in an amount between |
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60 and 90 percent of the incremental cost of a natural gas vehicle |
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purchase, lease, other commercial finance, or repowering; and |
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(2) is based on: |
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(A) the certified emission level of nitrogen |
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oxides, or other pollutants as determined by the commission, of the |
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engine powering the natural gas vehicle; and |
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(B) the usage of the natural gas vehicle; and |
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(3) may take into account the overall emissions |
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reduction achieved by the natural gas vehicle. |
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(b) Not less than 60 percent of the total amount of grants |
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awarded under this chapter for the purchase and repowering of motor |
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vehicles must be awarded to motor vehicles with a gross vehicle |
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weight rating of at least 33,001 pounds. The minimum grant |
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requirement under this subsection does not apply if the commission |
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does not receive enough grant applications to satisfy the |
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requirement for motor vehicles described by this subsection that |
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are eligible to receive a grant under this chapter. |
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(c) A person may not receive a grant under this chapter |
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that, when combined with any other grant, tax credit, or other |
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governmental incentive, exceeds the incremental cost of the vehicle |
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for which the grant is awarded. A person shall return to the |
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commission the amount of a grant awarded under this chapter that, |
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when combined with any other grant, tax credit, or other |
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governmental incentive, exceeds the incremental cost of the vehicle |
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for which the grant is awarded. |
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(d) The commission shall reduce the amount of a grant |
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awarded under this chapter as necessary to keep the combined |
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incentive total at or below the incremental cost of the vehicle for |
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which the grant is awarded if the grant recipient is eligible to |
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receive an automatic incentive at or before the time a grant is |
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awarded under this chapter. |
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Sec. 393.008. GRANT PROCEDURES. (a) The commission shall |
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adopt procedures for: |
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(1) awarding grants under this chapter in the form of |
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rebates; and |
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(2) streamlining the grant application, contracting, |
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reimbursement, and reporting process for qualifying natural gas |
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vehicle purchases or repowers. |
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(b) Procedures adopted under this section must: |
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(1) provide for the commission to compile and |
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regularly update a listing of preapproved natural gas vehicles: |
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(A) powered by natural gas engines certified to |
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emit not more than 0.2 grams of nitrogen oxides per brake horsepower |
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hour; or |
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(B) certified to the United States Environmental |
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Protection Agency's light-duty Bin 5 standard or better; |
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(2) if a federal standard for the calculation of |
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emissions reductions exists, provide a method to calculate the |
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reduction in emissions of nitrogen oxides, volatile organic |
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compounds, carbon monoxide, particulate matter, and sulfur |
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compounds for each replacement or repowering; |
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(3) assign a standardized rebate amount for each |
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qualifying vehicle under Section 393.007; |
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(4) allow for processing rebates on an ongoing |
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first-come, first-served basis; |
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(5) provide for contracts between the commission and |
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participating dealers under Section 393.009; |
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(6) allow grant recipients to assign their grant funds |
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to participating dealers to offset the purchase or lease price; |
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(7) require grant applicants to identify natural gas |
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fueling stations that are available to fuel the qualifying vehicle |
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in the area of its use; |
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(8) provide for payment not later than the 30th day |
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after the date the request for reimbursement for an approved grant |
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is received; |
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(9) provide for application submission and |
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application status checks to be made over the Internet; and |
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(10) consolidate, simplify, and reduce the |
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administrative work for applicants and the commission associated |
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with grant application, contracting, reimbursement, and reporting |
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requirements. |
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(c) The commission, or its designee, shall oversee the grant |
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process and is responsible for final approval of any grant. |
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(d) Grant recipients are responsible for meeting all grant |
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conditions, including reporting and monitoring as required by the |
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commission through the grant contract. |
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Sec. 393.009. PARTICIPATING DEALERS. (a) In this section, |
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"participating dealer" means a person who: |
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(1) sells, leases, or otherwise commercially finances |
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on-road heavy-duty or medium-duty natural gas vehicles or |
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heavy-duty or medium-duty natural gas engines; and |
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(2) has satisfied all requirements established by the |
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commission for participation in the program as a dealer. |
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(b) A participating dealer must agree to the terms and |
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conditions of a standardized contract developed by the commission. |
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(c) A participating dealer shall: |
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(1) provide information regarding natural gas vehicle |
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grants to fleet operators; |
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(2) assist an applicant who purchases, leases, or |
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otherwise commercially finances a natural gas vehicle or engine |
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from the dealer with the completion of the application; and |
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(3) submit completed applications and documentation |
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to the commission on behalf of an applicant who purchases, leases, |
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or otherwise commercially finances a natural gas vehicle or engine |
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from the dealer. |
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(d) A participating dealer may not approve a grant. |
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(e) The commission shall: |
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(1) maintain and make available to the public online a |
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list of all qualified dealers; and |
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(2) establish requirements for participation in the |
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program by sellers of on-road heavy-duty or medium-duty natural gas |
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vehicles and heavy-duty or medium-duty natural gas engines. |
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Sec. 393.010. CLEAN TRANSPORTATION TRIANGLE. (a) To |
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ensure that natural gas vehicles purchased, leased, or otherwise |
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commercially financed or repowered under the program have access to |
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fuel, and to build the foundation for a self-sustaining market for |
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natural gas vehicles in Texas, the commission shall award grants to |
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support the development of a network of natural gas vehicle fueling |
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stations along the interstate highways connecting Houston, San |
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Antonio, Dallas, and Fort Worth. In awarding the grants, the |
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commission shall provide for: |
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(1) strategically placed natural gas vehicle fueling |
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stations in and between the Houston, San Antonio, and Dallas-Fort |
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Worth areas to enable a natural gas vehicle to travel along that |
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triangular area relying solely on natural gas fuel; |
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(2) grants to be dispersed through a competitive |
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bidding process to offset a portion of the cost of installation of |
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the natural gas dispensing equipment; |
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(3) contracts that require the recipient stations to |
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meet operational, maintenance, and reporting requirements as |
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specified by the commission; and |
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(4) a listing, to be maintained by the commission and |
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made available to the public online, of all natural gas vehicle |
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fueling stations that have received grant funding, including |
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location and hours of operation. |
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(b) The commission may not award more than: |
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(1) three station grants to any entity; or |
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(2) one grant for each station. |
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(c) Grants awarded under this section may not exceed: |
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(1) $100,000 for a compressed natural gas station; |
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(2) $250,000 for a liquefied natural gas station; or |
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(3) $400,000 for a station providing both liquefied |
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and compressed natural gas. |
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(d) Stations funded by grants under this section must be |
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publicly accessible and located not more than three miles from an |
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interstate highway system. The commission shall give preference |
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to: |
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(1) stations providing both liquefied natural gas and |
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compressed natural gas at a single location; and |
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(2) stations located not more than one mile from an |
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interstate highway system. |
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(e) To meet the goals of this section, the commission may |
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solicit grant applications under this section for a new fueling |
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station in a specific area or location. |
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(f) Grants made under this section are not subject to the |
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requirements of Sections 393.002 through 393.008. The commission |
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shall develop an application package and review applications in |
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accordance with Sections 386.110 and 386.111. |
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(g) The commission, in consultation with the natural gas |
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industry, shall determine the most efficient use of funding for the |
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station grants under this section to maximize the availability of |
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natural gas fueling stations. |
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Sec. 393.011. ADMINISTRATION OF PROGRAM. The commission |
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may contract with one or more entities for administration of the |
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program. |
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Sec. 393.012. EXPIRATION. This chapter expires August 31, |
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2017. |
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SECTION 4. Subtitle C, Title 5, Health and Safety Code, is |
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amended by adding Chapter 394 to read as follows: |
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CHAPTER 394. ALTERNATIVE FUELING FACILITIES PROGRAM |
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Sec. 394.001. DEFINITIONS. In this chapter: |
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(1) "Alternative fuel" means a fuel other than |
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gasoline or diesel fuel, other than biodiesel fuel, including |
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electricity, compressed natural gas, liquefied natural gas, |
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hydrogen, propane, or a mixture of fuels containing at least 85 |
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percent methanol by volume. |
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(2) "Commission" means the Texas Commission on |
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Environmental Quality. |
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(3) "Program" means the Texas alternative fueling |
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facilities program established under this chapter. |
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Sec. 394.002. PROGRAM. (a) The commission shall establish |
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and administer the Texas alternative fueling facilities program to |
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provide fueling facilities for alternative fuel in nonattainment |
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areas. Under the program, the commission shall provide a grant for |
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each eligible facility to offset the cost of those facilities. |
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(b) An entity that constructs, reconstructs, or acquires an |
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alternative fueling facility is eligible to participate in the |
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program. |
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Sec. 394.003. APPLICATION FOR GRANT. (a) An entity |
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operating in this state that constructs, reconstructs, or acquires |
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a facility to store, compress, or dispense alternative fuels may |
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apply for and receive a grant under the program. |
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(b) The commission may adopt guidelines to allow a regional |
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planning commission, council of governments, or similar regional |
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planning agency created under Chapter 391, Local Government Code, |
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or a private nonprofit organization to apply for and receive a grant |
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to improve the ability of the program to achieve its goals. |
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(c) An application for a grant under this chapter must be |
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made on a form provided by the commission and must contain the |
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information required by the commission. |
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Sec. 394.004. ELIGIBILITY OF FACILITIES FOR GRANTS. |
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(a) The commission by rule shall establish criteria for |
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prioritizing facilities eligible to receive grants under this |
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chapter. The commission shall review and revise the criteria as |
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appropriate. |
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(b) To be eligible for a grant under the program, the entity |
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receiving the grant must agree to make the alternative fueling |
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facility available to persons not associated with the entity at |
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times designated by the grant agreement. |
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(c) A recipient of a grant under this chapter is not |
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eligible to receive a second grant under this chapter for the same |
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facility. |
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Sec. 394.005. RESTRICTION ON USE OF GRANT. A recipient of a |
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grant under this chapter shall use the grant only to pay the costs |
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of the facility for which the grant is made. The recipient may not |
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use the grant to pay the recipient's administrative expenses. |
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Sec. 394.006. AMOUNT OF GRANT. For each eligible facility |
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for which a recipient is awarded a grant under the program, the |
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commission shall award the grant in an amount equal to the lesser |
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of: |
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(1) 50 percent of the sum of the actual eligible costs |
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incurred by the grant recipient within deadlines established by the |
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commission to construct, reconstruct, or acquire the facility; or |
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(2) $500,000. |
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Sec. 394.007. EXPIRATION. This chapter expires August 31, |
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2018. |
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SECTION 5. The Texas Commission on Environmental Quality |
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shall adopt rules and establish procedures under Chapter 393, |
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Health and Safety Code, as added by this Act, as soon as practicable |
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after the effective date of this Act. |
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SECTION 6. The Texas Commission on Environmental Quality |
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shall adopt rules under Section 394.004, Health and Safety Code, as |
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added by this Act, as soon as practicable after the effective date |
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of this Act. |
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SECTION 7. To the extent of any conflict, this Act prevails |
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over another Act of the 82nd Legislature, Regular Session, 2011, |
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relating to nonsubstantive additions to and corrections in enacted |
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codes. |
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SECTION 8. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 20 passed the Senate on |
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April 7, 2011, by the following vote: Yeas 29, Nays 2; and that |
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the Senate concurred in House amendments on May 26, 2011, by the |
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following vote: Yeas 29, Nays 2. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 20 passed the House, with |
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amendments, on May 23, 2011, by the following vote: Yeas 133, |
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Nays 6, five present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |