Enrolled Bill Summary

            House Bill 1365 amends the Health and Safety Code to fund the Texas Emissions Reduction Plan (TERP), a set of incentive-based programs created in 2001 to reduce by 2007 ozone precursor chemicals created by diesel engines in areas that currently do not meet, or soon may not meet, mandatory federal clean air standards for ozone. The bill finances TERP by increasing the fee for obtaining a certificate of vehicle title from $13 to $33 if the applicant's residence is in a county located within an area designated as nonattainment under the federal Clean Air Act and to $28 if the applicant's residence is in any other county. The fee is set at $28 statewide on or after September 1, 2008, at which time revenues will be credited to the Texas Mobility Fund instead of TERP. The bill increases the surcharge on heavy-duty diesel construction equipment, including mining equipment, from one to two percent of the sale, lease, or rental cost of the equipment and imposes the surcharge on storage and use of the equipment as well. Additionally, the bill extends the 2.5 percent surcharge on the sale or lease of on-road diesel motor vehicles to include use of the vehicles and lowers the surcharge to two percent for vehicles that are 1997 model year or newer. The bill requires 87.5 percent, rather than 72 percent, of money in the TERP fund to be allocated to the diesel emissions reduction incentive program, which provides grants to offset the cost of purchasing or leasing lower emission diesel equipment. Remaining funds are allocated to the new technology research and development program and to administrative costs. The bill adds three counties to the list of affected counties where residents are eligible for TERP grants and includes any other county designated as an affected county by the Texas Commission on Environmental Quality. It also expands the number of eligible projects, including infrastructure projects, that are eligible for a grant, and requires the commission by rule to develop a method of providing fast and simple access to grants for a small business. The bill makes on-road diesel motor vehicles certified by the California Air Resources Board eligible for purchase or lease with a TERP grant and authorizes the commission to make other on-road vehicles that meet emissions standards eligible, regardless of fuel type. It specifies that a building certified by a national, state, or local accredited energy-efficiency program complies with the state's building energy performance standards and authorizes the General Land Office to develop an energy-efficient building accreditation program for buildings that exceed building energy performance standards by 15 percent and more. The commission, other state agencies, and other governmental agencies such as municipalities and counties are authorized to give preference to vendors that meet or exceed air quality standards for contracts to be performed in an affected county for air quality. Finally, the bill prohibits the commission from declaring a speed limit for environmental purposes on part of the state highway system.

            House Bill 1365 takes effect June 22, 2003, except for provisions relating to the surcharge on diesel construction equipment and on diesel motor vehicles, which take effect July 1, 2003.