84R13385 JRR-F
 
  By: Morrison H.B. No. 14
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the Texas emissions reduction plan.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 386.001(2) and (3), Health and Safety
  Code, are amended to read as follows:
               (2)  "Affected county" includes:
                     (A)  Bastrop County;
                     (A-1)  Bell County;
                     (B)  Bexar County;
                     (C)  Caldwell County;
                     (D)  Comal County;
                     (E)  Ellis County;
                     (F)  Gregg County;
                     (G)  Guadalupe County;
                     (H)  Harrison County;
                     (I)  Hays County;
                     (J)  Henderson County;
                     (K)  Hood County;
                     (L)  Hunt County;
                     (M)  Johnson County;
                     (N)  Kaufman County;
                     (N-1)  McLennan County;
                     (O)  Nueces County;
                     (P)  Parker County;
                     (Q)  Rockwall County;
                     (R)  Rusk County;
                     (S)  San Patricio County;
                     (T)  Smith County;
                     (U)  Travis County;
                     (V)  Upshur County;
                     (W)  Victoria County;
                     (W-1)  Webb County;
                     (X)  Williamson County;
                     (Y)  Wilson County; and
                     (Z)  any other county designated as an affected
  county by commission rule because of deteriorating air quality.
               (3)  "Commission" means the Texas [Natural Resource
  Conservation] Commission on Environmental Quality.
         SECTION 2.  Section 386.002, Health and Safety Code, is
  amended to read as follows:
         Sec. 386.002.  EXPIRATION. This chapter expires August 31,
  2023 [2019].
         SECTION 3.  Section 386.051(b), Health and Safety Code, is
  amended to read as follows:
         (b)  Under the plan, the commission and the comptroller shall
  provide grants or other funding for:
               (1)  the diesel emissions reduction incentive program
  established under Subchapter C, including for infrastructure
  projects established under that subchapter;
               (2)  the motor vehicle purchase or lease incentive
  program established under Subchapter D;
               (3)  the air quality research support program
  established under Chapter 387;
               (4)  the clean school bus program established under
  Chapter 390;
               (5)  the new technology implementation grant program
  established under Chapter 391;
               (6)  the regional air monitoring program established
  under Section 386.252(a);
               (7)  a health effects study as provided by Section
  386.252(a);
               (8)  air quality planning activities as provided by
  Section 386.252(a);
               (9)  a contract with the Energy Systems Laboratory at
  the Texas A&M Engineering Experiment Station for computation of
  creditable statewide emissions reductions as provided by Section
  386.252(a) [386.252(a)(14)];
               (10)  the clean fleet program established under Chapter
  392;
               (11)  the alternative fueling facilities program
  established under Chapter 393;
               (12)  the natural gas vehicle grant program [and clean
  transportation triangle program] established under Chapter 394;
               (13)  other programs the commission may develop that
  lead to reduced emissions of nitrogen oxides, particulate matter,
  or volatile organic compounds in a nonattainment area or affected
  county;
               (14)  other programs the commission may develop that
  support congestion mitigation to reduce mobile source ozone
  precursor emissions; and
               (15)  the drayage truck incentive program established
  under Subchapter D-1.
         SECTION 4.  Section 386.104(j), Health and Safety Code, is
  amended to read as follows:
         (j)  The executive director may [shall] waive any
  eligibility requirements established under this section on a
  finding of good cause, which may include a waiver for short lapses
  in registration or operation attributable to economic conditions,
  seasonal work, or other circumstances.
         SECTION 5.  Section 386.152, Health and Safety Code, is
  amended by amending Subsection (b) and adding Subsection (d) to
  read as follows:
         (b)  The program shall authorize statewide incentives for
  the purchase or lease of new light-duty motor vehicles powered by
  compressed natural gas, liquefied petroleum gas, or hydrogen fuel
  cell or other electric drives for a purchaser or lessee who agrees
  to register and operate the vehicle in this state for a minimum
  period of time to be established by the commission.
         (d)  The commission by rule may revise the standards for the
  maximum unloaded vehicle weight rating and gross vehicle weight
  rating of an eligible vehicle to ensure that all of the vehicle
  weight configurations available under one general vehicle model may
  be eligible for an incentive.
         SECTION 6.  Sections 386.153(a), (b-1), (c), and (d), Health
  and Safety Code, are amended to read as follows:
         (a)  A new light-duty motor vehicle powered by compressed
  natural gas or liquefied petroleum gas is eligible for a $5,000
  [$2,500] incentive if the vehicle:
               (1)  has four wheels;
               (2)  was originally manufactured to comply with and has
  been certified by an original equipment manufacturer or
  intermediate or final state vehicle manufacturer as complying with,
  or has been altered to comply with, federal motor vehicle safety
  standards, state emissions regulations, and any additional state
  regulations applicable to vehicles powered by compressed natural
  gas or liquefied petroleum gas;
               (3)  was manufactured for use primarily on public
  streets, roads, and highways;
               (4)  is rated at not more than 9,600 pounds unloaded
  vehicle weight;
               (5)  has a dedicated or bi-fuel compressed natural gas
  or liquefied petroleum gas fuel system with a range of at least 125
  miles as estimated, published, and updated by the United States
  Environmental Protection Agency;
               (6)  has, as applicable, a:
                     (A)  compressed natural gas fuel system that
  complies with the:
                           (i)  2013 NFPA 52 Vehicular Gaseous Fuel
  Systems Code; and
                           (ii)  American National Standard for Basic
  Requirements for Compressed Natural Gas Vehicle (NGV) Fuel
  Containers, commonly cited as "ANSI/CSA NGV2"; or
                     (B)  liquefied petroleum gas fuel system that
  complies with:
                           (i)  the 2011 NFPA 58 Liquefied Petroleum
  Gas Code; and
                           (ii)  Section VII of the 2013 ASME Boiler and
  Pressure Vessel Code; and
               (7)  was acquired on or after September 1, 2013, or a
  later date established by the commission, by the person applying
  for the incentive under this subsection and for use or lease by that
  person and not for resale.
         (b-1)  The incentive under Subsection (a) is limited to 1,000
  [2,000] vehicles for each [the] state fiscal biennium [beginning
  September 1, 2013].
         (c)  A new light-duty motor vehicle powered by an electric
  drive is eligible for a $2,500 incentive if the vehicle:
               (1)  has four wheels;
               (2)  was manufactured for use primarily on public
  streets, roads, and highways;
               (3)  has not been modified from the original
  manufacturer's specifications;
               (4)  is rated at not more than 8,500 pounds unloaded
  vehicle weight;
               (5)  has a maximum speed capability of at least 55 miles
  per hour;
               (6)  is propelled to a significant extent by an
  electric motor that draws electricity from a hydrogen fuel cell or
  from a battery that:
                     (A)  has a capacity of not less than four kilowatt
  hours; and
                     (B)  is capable of being recharged from an
  external source of electricity; and
               (7)  was acquired on or after September 1, 2013, or a
  later date as established by the commission, by the person applying
  for the incentive under this subsection and for use or lease by that
  person and not for resale.
         (d)  The incentive under Subsection (c) is limited to 2,000
  vehicles for each [the] state fiscal biennium [beginning September
  1, 2013].
         SECTION 7.  Section 386.155, Health and Safety Code, is
  amended to read as follows:
         Sec. 386.155.  MANUFACTURER'S REPORT. (a) At the beginning
  of but not later than July 1 of each year preceding the vehicle
  model year, a manufacturer of motor vehicles shall provide to the
  commission a list of the new vehicle models that the manufacturer
  intends to sell in this state during that model year that meet the
  incentive requirements [emissions standards] established [by the
  schedules set out] under Section 386.153. The manufacturer may
  supplement the list provided to the commission under this section
  as necessary to include additional new vehicle models the
  manufacturer intends to sell in this state during the model year.
         (b)  The commission may supplement the information provided
  under Subsection (a) with additional information on available
  vehicle models, including information provided by manufacturers of
  systems to convert new motor vehicles to operate on natural gas or
  liquefied petroleum gas before sale as a new vehicle.
         SECTION 8.  Section 386.156, Health and Safety Code, is
  amended to read as follows:
         Sec. 386.156.  LIST OF ELIGIBLE MOTOR VEHICLES. (a)  On
  August 1 each year the commission shall publish a list of new
  [model] motor vehicle models [vehicles] eligible for inclusion in
  an incentive under this subchapter [as listed for the commission
  under Section 386.155].  The commission shall publish supplements
  to that list as necessary to include additional new vehicle models.
         (b)  The commission shall publish the list of eligible motor
  vehicle models [vehicles] on the commission's Internet website.
         SECTION 9.  Section 386.158(b), Health and Safety Code, is
  amended to read as follows:
         (b)  A lease incentive for a new light-duty motor vehicle
  shall be prorated based on a three-year [four-year] lease term.
         SECTION 10.  Section 386.160(c), Health and Safety Code, is
  amended to read as follows:
         (c)  The commission may require the submission of forms and
  documentation as needed to verify eligibility for an incentive
  under this subchapter [In addition to other forms developed and
  published under this section, the commission shall develop and
  publish a verification form by which, with information provided by
  the dealer or leasing agent, the commission can verify the sale of a
  vehicle covered by this subchapter.   The verification form shall
  include at least the name of the purchaser, the vehicle
  identification number of the vehicle involved, the date of the
  purchase, and the name of the new motor dealer or leasing agent
  involved in the transaction.   At the time of sale or lease of a
  vehicle eligible for an incentive under this subchapter, the dealer
  or leasing agent shall complete the verification form supplied to
  the dealer by the commission.   The purchaser or lessee shall include
  the completed verification form as part of the purchaser's
  application for an incentive.   The dealer shall maintain a copy of
  the completed verification form for at least two years from the date
  of the transaction].
         SECTION 11.  The heading to Section 386.161, Health and
  Safety Code, is amended to read as follows:
         Sec. 386.161.  [SUSPENSION OF] PURCHASE OR LEASE INCENTIVES
  INFORMATION.
         SECTION 12.  Subchapter D, Chapter 386, Health and Safety
  Code, is amended by adding Section 386.1611 to read as follows:
         Sec. 386.1611.  RESERVATION OF INCENTIVES.  The commission
  may provide for dealers and leasing agents to reserve for a limited
  time period incentives for vehicles that are not readily available
  and must be ordered, if the dealer or leasing agent has a purchase
  or lease order signed by an identified customer.
         SECTION 13.  Section 386.162, Health and Safety Code, is
  amended to read as follows:
         Sec. 386.162.  EXPIRATION.  This subchapter expires August
  31, 2023 [2015].
         SECTION 14.  Section 386.252, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsections (g-1) and
  (g-2) to read as follows:
         (a)  Money in the fund may be used only to implement and
  administer programs established under the plan.  Money
  appropriated to the commission to be used for the programs under
  Section 386.051(b) shall be allocated as follows:
               (1)  not more than four percent may be used for the
  clean school bus program under Chapter 390;
               (2)  not more than three percent may be used for the new
  technology implementation grant program under Chapter 391, from
  which at least $1 million will be set aside for electricity storage
  projects related to renewable energy;
               (3)  five percent shall be used for the clean fleet
  program under Chapter 392;
               (4)  not more than $3 million may be used by the
  commission to fund a regional air monitoring program in commission
  Regions 3 and 4 to be implemented under the commission's oversight,
  including direction regarding the type, number, location, and
  operation of, and data validation practices for, monitors funded by
  the program through a regional nonprofit entity located in North
  Texas having representation from counties, municipalities, higher
  education institutions, and private sector interests across the
  area;
               (5)  not less than 16 percent shall be used for the
  Texas natural gas vehicle grant program under Chapter 394;
               (6)  not more than 10 [five] percent may be used [to
  provide grants for natural gas fueling stations under the clean
  transportation triangle program under Section 394.010;
               [(7)  not more than five percent may be used] for the
  Texas alternative fueling facilities program under Chapter 393, of
  which a specified amount may be used for fueling stations to provide
  natural gas fuel;
               (7) [(8)]  a specified amount may be used each year to
  support research related to air quality as provided by Chapter 387;
               (8) [(9)]  not more than $200,000 may be used for a
  health effects study[;
               [(10) $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];
               (9) [(11)]  at least $4 million and up to four percent
  to a maximum of $7 million, whichever is greater, is allocated to
  the commission for administrative costs;
               (10) [(12)]  at least two percent and up to five
  percent [of the fund] is to be used by the commission for the
  drayage truck incentive program established under Subchapter D-1;
               (11) [(13)]  not more than five percent may be used for
  the light-duty motor vehicle purchase or lease incentive program
  established under Subchapter D;
               (12) [(14)]  not more than $216,000 is allocated to the
  commission to contract with the Energy Systems Laboratory at the
  Texas A&M Engineering Experiment Station annually for the
  development and annual computation of creditable statewide
  emissions reductions obtained through wind and other renewable
  energy resources for the state implementation plan;
               [(15)     1.5 percent of the money in the fund is allocated
  for administrative costs incurred by the laboratory;] and
               (13) [(16)]  the balance is to be used by the
  commission for the diesel emissions reduction incentive program
  under Subchapter C as determined by the commission.
         (g-1)  To supplement funding for air quality planning
  activities in affected counties, $500,000 from the fund is to be
  deposited annually in the state treasury to the credit of the clean
  air account created under Section 382.0622.
         (g-2)  Money in the fund may be allocated for administrative
  costs incurred by the laboratory.
         SECTION 15.  Section 390.006, Health and Safety Code, is
  amended to read as follows:
         Sec. 390.006.  EXPIRATION. This chapter expires August 31,
  2023 [2019].
         SECTION 16.  Section 391.002(b), Health and Safety Code, is
  amended to read as follows:
         (b)  Projects that may be considered for a grant under the
  program include:
               (1)  advanced clean energy projects, as defined by
  Section 382.003;
               (2)  new technology projects that reduce emissions of
  regulated pollutants from stationary [point] sources, including
  projects that reduce emissions from oil and gas production,
  storage, and transmission activities through:
                     (A)  the replacement, repower, or retrofit of
  stationary compressor engines; or
                     (B)  the installation of systems to reduce or
  eliminate the flaring of gas or the burning of gas using other
  combustion control devices; and
               (3)  electricity storage projects related to renewable
  energy, including projects to store electricity produced from wind
  and solar generation that provide efficient means of making the
  stored energy available during periods of peak energy use.
         SECTION 17.  Section 391.205(a), Health and Safety Code, is
  amended to read as follows:
         (a)  Except as provided by Subsection (c), in awarding grants
  under this chapter the commission shall give preference to projects
  that:
               (1)  involve the transport, use, recovery for use, or
  prevention of the loss of natural resources originating or produced
  in this state;
               (2)  contain an energy efficiency component; or
               (3)  include the use of solar, wind, or other renewable
  energy sources.
         SECTION 18.  Section 391.304, Health and Safety Code, is
  amended to read as follows:
         Sec. 391.304.  EXPIRATION. This chapter expires August 31,
  2023 [2019].
         SECTION 19.  Section 392.001(1), Health and Safety Code, is
  amended to read as follows:
               (1)  "Alternative fuel" means a fuel other than
  gasoline or diesel fuel, including electricity, compressed natural
  gas, liquefied [liquified] natural gas, hydrogen, propane, or a
  mixture of fuels containing at least 85 percent methanol by volume.
         SECTION 20.  Section 392.003(a), Health and Safety Code, is
  amended to read as follows:
         (a)  A vehicle is a qualifying vehicle that may be considered
  for a grant under the program if during the eligibility period
  established by the commission [calendar year] the entity purchases
  a new on-road vehicle that:
               (1)  is certified to current federal emissions
  standards;
               (2)  replaces a diesel-powered on-road vehicle of the
  same weight classification and use; and
               (3)  is a hybrid vehicle or fueled by an alternative
  fuel.
         SECTION 21.  Section 392.004(d), Health and Safety Code, is
  amended to read as follows:
         (d)  The commission shall minimize, to the maximum extent
  possible, the amount of paperwork required for an application.  [An
  applicant may be required to submit a photograph or other
  documentation of a vehicle identification number, registration
  information, inspection information, tire condition, or engine
  block identification only if the photograph or documentation is
  requested by the commission after the commission has decided to
  award a grant to the applicant under this chapter.]
         SECTION 22.  Section 392.005, Health and Safety Code, is
  amended by amending Subsections (b), (c), and (i) and adding
  Subsection (c-1) to read as follows:
         (b)  To be eligible for a grant under the program, a project
  must:
               (1)  result in a reduction in emissions of nitrogen
  oxides or other pollutants, as established by the commission, of at
  least 25 percent, 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)  replace a vehicle that:
                     (A)  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;
                     (B)  satisfies any minimum average annual mileage
  or fuel usage requirements established by the commission;
                     (C)  satisfies any minimum percentage of annual
  usage requirements established by the commission; and
                     (D)  is in operating condition and has at least
  five [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, registered, and operated in the
  state by the grant recipient until the earlier of the fifth
  anniversary of the activity start date established by the
  commission [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 activity start date established by the commission
  [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 the state.
         (c-1)  For purposes of Subsection (c), the commission shall
  establish the activity start date based on the date the commission
  accepts verification of the disposition of the vehicle being
  replaced.
         (i)  The executive director may [shall] waive the
  requirements of Subsection (b)(2)(A) on a finding of good cause,
  which may include a waiver for short lapses in registration or
  operation attributable to economic conditions, seasonal work, or
  other circumstances.
         SECTION 23.  Section 392.008, Health and Safety Code, is
  amended to read as follows:
         Sec. 392.008.  EXPIRATION. This chapter expires August 31,
  2023 [2017].
         SECTION 24.  Section 393.001, Health and Safety Code, is
  amended by amending Subdivision (1) and adding Subdivision (1-a) to
  read as follows:
               (1)  "Alternative fuel" means a fuel other than
  gasoline or diesel fuel, other than biodiesel fuel, including
  electricity, compressed natural gas, liquefied [liquified] natural
  gas, hydrogen, propane, or a mixture of fuels containing at least 85
  percent methanol by volume.
               (1-a)  "Clean transportation triangle" means:
                     (A)  counties containing or intersected by a
  portion of an interstate highway connecting the cities of Houston,
  San Antonio, Dallas, and Fort Worth;
                     (B)  counties located within the triangular area
  formed by the interstate highways described by Paragraph (A);
                     (C)  counties in this state all or part of which
  are included in a nonattainment area designated under Section
  107(d) of the federal Clean Air Act (42 U.S.C. Section 7407), as
  amended; and
                     (D)  counties designated as affected counties
  under Section 386.001.
         SECTION 25.  Section 393.002, Health and Safety Code, is
  amended to read as follows:
         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 the clean
  transportation triangle [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 or [,] reconstructs[, or
  acquires] an alternative fueling facility is eligible to
  participate in the program.
         (c)  To ensure that alternative fuel vehicles have access to
  fuel and to build the foundation for a self-sustaining market for
  alternative fuels in Texas, the commission shall provide for
  strategically placed fueling facilities in the clean
  transportation triangle to enable an alternative fuel vehicle to
  travel in those areas relying solely on the alternative fuel.
         (d)  The commission shall maintain a listing to be made
  available to the public online of all vehicle fueling facilities
  that have received grant funding, including location and hours of
  operation.
         SECTION 26.  Section 393.003, Health and Safety Code, is
  amended by amending Subsections (a) and (b) and adding Subsections
  (d) and (e) to read as follows:
         (a)  An entity operating in this state that constructs or [,]
  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.
         (d)  An application for a grant under the program must
  include a certification that the applicant complies with laws,
  rules, guidelines, and requirements applicable to taxation of fuel
  provided by the applicant at each fueling facility owned or
  operated by the applicant. The commission may terminate a grant
  awarded under this section without further obligation to the grant
  recipient if the commission determines that the recipient did not
  comply with a law, rule, guideline, or requirement described by
  this subsection. This subsection does not create a cause of action
  to contest an application or award of a grant.
         (e)  The commission shall disperse grants under the program
  through a competitive application selection process to offset a
  portion of the eligible costs.
         SECTION 27.  Section 393.004, Health and Safety Code, is
  amended to read as follows:
         Sec. 393.004.  ELIGIBILITY OF FACILITIES FOR GRANTS. (a)  In
  addition to the requirements of this chapter, the commission shall
  establish additional eligibility and prioritization criteria as
  needed to implement the program [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 accessible and available to the public [persons not
  associated with the entity] at times designated by the commission
  in the grant contract [agreement].
         (c)  The commission may not award more than one grant for
  each facility.
         (d)  The commission may give preference to or otherwise limit
  grant selections to:
               (1)  fueling facilities providing specific types of
  alternative fuels;
               (2)  fueling facilities in a specified area or
  location; and
               (3)  fueling facilities meeting other specified
  prioritization criteria established by the commission.
         (e)  For fueling facilities to provide natural gas, the
  commission shall give preference to:
               (1)  facilities providing both liquefied natural gas
  and compressed natural gas at a single location;
               (2)  facilities located not more than one mile from an
  interstate highway system; and
               (3)  facilities located in the triangular area in and
  between the Houston, San Antonio, and Dallas-Fort Worth areas [A
  recipient of a grant under this chapter is not eligible to receive a
  second grant under this chapter for the same facility].
         SECTION 28.  Section 393.005, Health and Safety Code, is
  amended to read as follows:
         Sec. 393.005.  RESTRICTION ON USE OF GRANT.  (a) 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:
               (1)  administrative expenses;
               (2)  expenses for the purchase of land or an interest in
  land; or
               (3)  expenses for equipment or facility improvements
  that are not directly related to the delivery, storage,
  compression, or dispensing of the alternative fuel at the facility.
         (b)  Each grant must be awarded using a contract that
  requires the recipient to meet operational, maintenance, and
  reporting requirements as specified by the commission.
         SECTION 29.  Section 393.006, Health and Safety Code, is
  amended to read as follows:
         Sec. 393.006.  AMOUNT OF GRANT.  (a) Grants awarded under
  this chapter for a facility to provide alternative fuels other than
  natural gas may not exceed [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)  $600,000.
         (b)  Grants awarded under this chapter for a facility to
  provide natural gas may not exceed:
               (1)  $400,000 for a compressed natural gas facility;
               (2)  $400,000 for a liquefied natural gas facility; or
               (3)  $600,000 for a facility providing both liquefied
  and compressed natural gas.
         SECTION 30.  Section 393.007, Health and Safety Code, is
  amended to read as follows:
         Sec. 393.007.  EXPIRATION.  This chapter expires August 31,
  2023 [2018].
         SECTION 31.  Sections 394.001(1), (4), and (5), Health and
  Safety Code, are amended to read as follows:
               (1)  "Clean transportation triangle" has the meaning
  assigned by Section 393.001 ["Advisory board" means the Texas
  Emissions Reduction Plan Advisory Board].
               (4)  "Heavy-duty motor vehicle" means a motor vehicle
  that [with]:
                     (A)  has a gross vehicle weight rating of more
  than 8,500 pounds; and
                     (B)  is certified to or has an engine certified to
  the United States Environmental Protection Agency's emissions
  standards for heavy-duty vehicles or engines.
               (5)  "Incremental cost" has the meaning assigned by
  Section 386.001 [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].
         SECTION 32.  Section 394.003(a), Health and Safety Code, is
  amended to read as follows:
         (a)  A vehicle is a qualifying vehicle that may be considered
  for a grant under the program if during the eligibility period
  established by the commission [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 certified to or 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
                           (iii)  meet or exceed the United States
  Environmental Protection Agency's chassis-certified heavy-duty
  vehicle emission standard of:
                                 (a)  0.2 grams of nitrogen oxides per
  mile for vehicles with a gross vehicle weight rating of 8,501 to
  10,000 pounds; or
                                 (b)  0.4 grams of nitrogen oxides per
  mile for vehicles with a gross vehicle weight rating of 10,001 to
  14,000 pounds; 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; or
                           (iii)  certified to meet or exceed the
  United States Environmental Protection Agency's chassis-certified
  heavy-duty vehicle emission standard of:
                                 (a)  0.2 grams of nitrogen oxides per
  mile for vehicles with a gross vehicle weight rating of 8,501 to
  10,000 pounds when powering the vehicle; or
                                 (b)  0.4 grams of nitrogen oxides per
  mile for vehicles with a gross vehicle weight rating of 10,001 to
  14,000 pounds when powering the vehicle.
         SECTION 33.  Section 394.005, Health and Safety Code, is
  amended by amending Subsections (a), (b), (c), (g), and (i) and
  adding Subsection (c-1) to read as follows:
         (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 four [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 four [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 activity start date established by the commission [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 activity
  start date established by the commission [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 the clean transportation triangle [:
               [(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)].
         (c-1)  For purposes of Subsection (c), the commission shall
  establish the activity start date based on the date the commission
  accepts verification of the disposition of the vehicle or engine.
         (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 or repowered 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].
         (i)  The executive director may [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.
         SECTION 34.  Section 394.006, Health and Safety Code, is
  amended to read as follows:
         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 or vehicle repower for which
  the grant is made, which may include a portion of the initial cost
  of the natural gas vehicle or natural gas engine, including the cost
  of the natural gas fuel system and installation [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.
         SECTION 35.  Section 394.007(c), Health and Safety Code, is
  amended to read as follows:
         (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
  or vehicle repower for which the grant is awarded.  A person shall
  return to the commission the amount of a grant awarded under this
  chapter that, when combined with any other grant, tax credit, or
  other governmental incentive, exceeds the incremental cost of the
  vehicle or vehicle repower for which the grant is awarded.
         SECTION 36.  Sections 394.008(a) and (b), Health and Safety
  Code, are amended to read as follows:
         (a)  The commission shall establish [adopt] procedures for:
               (1)  awarding grants under this chapter to reimburse
  eligible costs [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 established [adopted] under this section
  must:
               (1)  provide for the commission to compile and
  regularly update a listing of potentially eligible [preapproved]
  natural gas vehicles and engines powered by natural gas that are
  certified to:
                     (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; or
                     (C)  meet or exceed the United States
  Environmental Protection Agency's chassis-certified heavy-duty
  vehicle emission standard of:
                           (i)  0.2 grams of nitrogen oxides per mile
  for vehicles with a gross vehicle weight rating of 8,501 to 10,000
  pounds; or
                           (ii)  0.4 grams of nitrogen oxides per mile
  for vehicles with a gross vehicle weight rating of 10,001 to 14,000
  pounds;
               (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 grant [rebate] amount for
  each qualifying vehicle or engine repower under Section 394.007;
               (4)  allow for processing applications [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;
               (6) [(8)]  provide for payment not later than the 30th
  day after the date the request for reimbursement for an approved
  grant is received;
               (7) [(9)]  provide for application submission and
  application status checks using procedures established by the
  commission, which may include application submission and status
  checks to be made over the Internet; and
               (8) [(10)]  consolidate, simplify, and reduce the
  administrative work for applicants and the commission associated
  with grant application, contracting, reimbursement, and reporting
  requirements.
         SECTION 37.  Section 394.012, Health and Safety Code, is
  amended to read as follows:
         Sec. 394.012.  EXPIRATION.  This chapter expires August 31,
  2023 [2017].
         SECTION 38.  Sections 386.161(b), 386.252(e-1), 394.009,
  394.010, and 394.011, Health and Safety Code, are repealed.
         SECTION 39.  The changes in law made by this Act apply only
  to a Texas emissions reduction plan grant awarded on or after the
  effective date of this Act. A grant awarded before the effective
  date of this Act is governed by the law in effect on the date the
  award was made, and the former law is continued in effect for that
  purpose.
         SECTION 40.  This Act takes effect August 31, 2015.