BILL ANALYSIS
S.B. 200
By: Armbrister (Stiles)
3-14-95
Committee Report (Unamended)
BACKGROUND
The 1990 Clean Air Act Amendments (CAAA) mandated the federal Clean
Fuel Fleet Program to reduce motor vehicle air pollution in all
ozone nonattainment areas classified as serious and above. States
were given the option of adopting the federal program or designing
their own program if they could demonstrate equivalent or greater
air quality benefits. Texas has proposed its own program that
affects government and private fleets with 15 or more vehicles.
In 1989, the Texas Legislature passed statutes mandating the use of
compressed natural gas or other alternative fuels to reduce total
emissions in these areas. The CAAA Clean Fuel Fleet Program
classifies reformulated gasoline (RFG) as an "EPA approved" clean
alternative fuel, but the Texas Natural Resource Conservation
Commission has not included RFG as an alternative fuel under the
Texas Alternative Fuels Program, while favoring other alternative
fuels.
PURPOSE
S.B. 200 authorizes the adoption of rules by the Texas Natural
Resource Conservation Commission (TNRCC) to require the use of an
alternative fuels program for motor vehicles of the public and
private sector. Creates a schedule and requirements for the
acquisition of motor vehicles that operate on alternative fuels.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is
expressly granted to the Texas Natural Resource Conservation
Commission in the following sections of the bill: SECTION 10 [Sec.
382.142 and Sec. 382.143, Health and Safety Code] and SECTION 19.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 382.131, Health and Safety Code, to
define the following:
(1) "Alternative fuel" to mean any fuel or power source that
allows a clean-fuel vehicle to comply with the federal Clean Air
Act;
(2) "capable of being centrally fueled" to mean a fleet or
part of a fleet of vehicles which can be fueled 100 percent of the
time at a location owned, operated or controlled by the fleet
operator, or under contract with the fleet operator;
(3) "centrally fueled" to mean a fleet or part of a fleet of
vehicles that are refueled 100 percent of the time at a location
owned, operated or controlled by the fleet operator, or under
contract with the fleet operator; the term does not include retail
credit card purchases or commercial fleet service card purchases;
(4) "clean-fuel vehicle" to mean a vehicle that has been
certified to meet the federal clean-fuel vehicle standards and
emission limits at least as stringent as applicable federal low-emissions standards;
(5) "conventional gasoline" to mean any gasoline not meeting
certified federal specifications;
(6) "emissions" is the current statutory definition;
subsection (6) is renumbered accordingly from the present statute;
(7) the current definition of "fleet vehicle" is amended to
include vehicles that are centrally fueled, capable of being
centrally fueled, or fueled at facilities serving businesses and
the general public, but does not include fleet vehicles parked at
a residence and available for personal use by an individual, fleet
vehicles parked at an individuals home when not in use, or a fleet
vehicle with a gross vehicle weight over 26,000 pounds unless the
vehicle is owned by the state or a mass transit authority;
subsection (7) is renumbered accordingly from the present statute;
(8) "mass transit authority" is the current statutory
definition; subsection (8) is renumbered accordingly from the
present statute;
(9) "reformulated gasoline" to mean gasoline meeting federal
certification requirements.
SECTION 2. Amends Section 382.133, Health and Safety Code, to
delete the references to compressed natural gas or an alternative
fuel with lower emissions with regards to the Texas Natural
Resource Conservation Commission requirements that a mass transit
authority ensure that its vehicles can operate on compressed
natural gas that result in comparably lower emissions; the change
allows mass transit operate on an alternative fuel. Makes
conforming changes.
SECTION 3. Amends Section 382.134, Health and Safety Code, as
follows:
Sec. 382.134. LOCAL GOVERNMENT AND PRIVATE FLEET VEHICLES. (a)
Clarifies that this section applies to fleet vehicles;
(b) Deletes the discretionary role of the TNRCC in adopting
rules under Sec. 382.133 (rulemaking authority already present) and
makes the rules mandatory; clarifies that this section applies to
fleet vehicles, and replaces references to compressed natural gas
or other fuels that will reduce emissions; makes alternative fuel
acceptable.
(c) Requires rules adopted by the board (deleting a provision
applying to rules only under this section) to require a local
government or private person with fleet vehicles to have a
proportion of new fleet vehicles and a proportion of all fleet
vehicles able to operate on an alternative fuel, deleting a
reference to compressed natural gas, as follows:
(1) 30 percent of fleet vehicles purchased after
September 1, 1998, and 10 percent of the total fleet as of
September 1, 1998; deletes requirement that 30 percent of a total
fleet must comply on September 1, 1998;
(2) 50 percent of fleet vehicles purchased after
September 1, 2000, and 20 percent of the total fleet as of
September 1, 2000; deletes requirement that 50 percent of a total
fleet must comply on September 1, 2000;
(3) 90 percent of fleet vehicles purchased after
September 1, 2002, and 45 percent of the total fleet as of
September 1, 2002; deletes requirement that 90 percent of a total
fleet must comply on September 1, 2002.
(d) Prohibits rules adopted by the board from requiring a
local government or private person to purchase a fleet vehicle able
to operate on an alternative fuel if the person maintains a
proportion of 90 percent or more alternative fuel vehicles in the
person's fleet.
(e) Provides that the choice of clean-fuel vehicles and
alternative fuels is in the fleet operator's discretion.
SECTION 4. Amends Section 382.135, Health and Safety Code, by
deleting references to compressed natural gas and specifies that a
fleet vehicle with dual fleet conversion capable of operating on an
alternative fuel and gasoline or diesel power is acceptable in
complying with required proportions of fleet vehicles capable of
operating on an alternative fuel.
SECTION 5. Amends Section 382.136 (a), Health and Safety Code, to
change the authority of the TNRCC (board) to make an exception to
complying with this program if the board determines that affected
vehicles will be operating in an area that cannot establish
adequate (rather than central) refueling, and deletes references to
compressed natural gas. Adds subsection (4) allowing the board to
make an exception if the projected net costs for conversion are
expected not to exceed comparable costs for vehicles operating on
reformulated gasoline and diesel.
SECTION 6. Amends Sections 382.138 (a) and (b), Health and Safety
Code, by deleting references to compressed natural gas, and deletes
the inclusion Section 382.133 in the TNRCC's evaluation and
determination of whether alternative fuels are effective in
complying with the federal Clean Air Act.
SECTION 7. Amends Section 382.139, Health and Safety Code, to
delete references to compressed natural gas with regard to the
current requirement that the TNRCC mandate the use of alternative
fuels if the mandate is necessary to comply with the federal Clean
Air Act; changes the requirement that the TNRCC must mandate the
use of alternative fuels if it is effective in maintaining and
achieving compliance with federal law, to mandating the TNRCC to
mandate alternative fuels use if it is effective in maintaining or
achieving compliance.
SECTION 8. Amends Section 382.140 (a), Health and Safety Code, to
delete references to compressed natural gas in the authority of the
TNRCC to conduct studies and pilot programs in determining the
effectiveness of the use of alternative fuels in complying with
federal law.
SECTION 9. Amends Section 382.141, Health and Safety Code, to
delete references to compressed natural gas in the required TNRCC
report to the governor and the legislature on use of alternative
fuels.
SECTION 10. Amends Chapter 382, Subchapter F, Health and Safety
Code, by adding Section 382.142 and 382.143 as follows:
Sec. 382.142. PROGRAM COMPLIANCE CREDITS. (a) Allows the
requirements of what percentages of fleets must be alternatively
fueled to be met through the purchase, lease or other acquisition
of clean-fuel vehicles or through program compliance credits.
(b) (1) Requires rules adopted under this section to provide
for the issuance of program compliance credits for the acquisition
of clean-fuel vehicles that meet more stringent emissions control
standards required, if a fleet is comprised of a higher percentage
of clean-fuel vehicles than required, a purchase of a clean-fuel
vehicle in a category not required, or the possession of a clean-fuel vehicle prior to the requirements;
(2) provides for program compliance credits to be
awarded based upon the emissions certification level of the vehicle
as follows: LEVs - one credit, ULEVs - two credits, ILEVs and ZEVs
- three credits;
(3) compliance credits may be banked, traded, sold or
purchased by anyone else in the same nonattainment area;
(4) vehicles converted prior to September 1, 1998, may
be counted toward compliance if they are capable of operating on an
alternative fuel, meet minimum federal emissions standards, and do
not exceed 30 percent of the fleet on September 1, 1998.
(5) compliance credits applies to the following
vehicles:
(A) vehicles purchased by certain school districts
capable of using alternative fuels;
(B) vehicles purchased by metropolitan mass transit
authorities in capable of using alternative fuels;
(C) vehicles purchased by regional mass transit
authorities capable of using alternative fuels;
(D) vehicles purchased by city transit departments
capable of using alternative fuels;
(E) vehicles purchased by a state agency which are
in compliance with the alternative fuels program.
Sec. 382.143. TEXAS MOBILE EMISSIONS REDUCTION CREDIT PROGRAM. (a)
Requires the TNRCC (board), by rule, to establish a Texas Mobile
Emissions Reduction Credit (MERC) Program.
(b) Requires rules adopted to comply with EPA's minimum
requirements for an acceptable Mobile Emissions Reduction Credit
program, and must provide for the following elements:
(1) participation shall be voluntary for all vehicle
owners, whether subject to fleet requirements or not, and
participants may generate mobile emissions reduction credits,
though certain minimum numbers of vehicles may be required for
participation;
(2) mobile emissions reductions credits shall be
calculated on a per-pollutant basis and granted to an eligible
vehicle owner for purchasing more or cleaner vehicles than required
by law, or a contract to do so;
(3) mobile emissions reduction credit values shall be
determined in accordance with federal rules and guidelines;
(4) mobile emissions reductions credits may be used to
demonstrate compliance with any mobil source emissions reductions
requirements, and to satisfy Reasonably Available Control
Technology and federal Clean Air Act requirements;
(5) trading, buying, selling, or banking of mobil
emissions reduction credits.
(c) Creates the Texas Mobile Emissions Reduction Credit Fund
and administered by the TNRCC, in a way that allows qualified
vehicle owner to receive mobile emissions reductions credits if:
the vehicle owner enters into a contract with the board to purchase
and place in service clean-fuel vehicles as specified by the board,
and the vehicle owner agrees to name the Environmental Protection
Agency as a third-party beneficiary to the contract; the contract
may be enforced by a Texas court, and specific performance may be
granted.
(d) The acquisition of a clean-fuel vehicle may qualify for
mobile emissions reduction credits and for program compliance
credits.
(e) The following are violations: claiming a mobile
emissions reduction credit without meeting appropriate acquisition
requirements and submitting data, or counterfeiting or dealing
commercially in mobile emissions reduction credits.
(f) Provides for civil penalty of not more than $25,000 per
violation.
(g) Administration of credit trading programs shall be
established by TNRCC board rule as follows: (1) Mobile
emissions reductions credits must be banked;
(2) mobile emissions reductions credits may be
generated by the following ways:
(A) the use, acquisition, or purchase of more
clean-fueled vehicles than required, calculated by the provided
formula, based on additional emissions benefit using the most
recent EPA model, vehicle miles traveled, consideration of the use
of heavy duty vehicles, and the life of the vehicle;
(B) the purchase or acquisition of vehicles which
meet more stringent low emission vehicle requirements, calculated
by the provided formula;
(C) the purchase or acquisition of a vehicle with
certified levels of evaporative emissions less than five grams per
test, calculated by the provided formula.
(3) A vehicle owner applying for mobile emission
reduction credits shall submit a registration application using an
approved form, and the applicant must clearly state the emission
standard of the vehicle, the number of vehicle miles to be
travelled, the number of years the vehicle is to be used, and the
results of the mobil emission reductions credit calculation used to
estimate the credit value in grams per year.
(4) The mobil emissions reduction credit must include
sufficient information to calculate the value under this section.
(5) Gives the board the authority to evaluate claimed
credits and adjust the credits based on the evaluation.
(6) Mobil emission reduction credit applications must
be received at least 90 days prior to using the credit.
(7) The board 30 days to determine if the application
is complete.
(8) The board 90 days to approve or deny the
application.
(9) The board may revoke approval of a registration if
requirements are not met.
(h) Stipulates that the mobil emission reduction credits also
apply to the following:
(A) vehicles purchased by certain school districts
capable of using alternative fuels, if purchased after September 1,
1991;
(B) vehicles purchased by metropolitan mass transit
authorities in capable of using alternative fuels;
(C) vehicles purchased by regional mass transit
authorities capable of using alternative fuels;
(D) vehicles purchased by city transit departments
capable of using alternative fuels;
(E) vehicles purchased by a state agency which are
in compliance with the alternative fuels program.
SECTION 11. Amends Subsection (c), Section 14, Chapter 141, Acts
of 63rd Legislature, Regular Session, 1973 (Article 1118x, Vernon's
Texas Civil Statutes), by deleting references to compressed natural
gas or fuels with lower emissions than compressed natural gas as
acceptable for use in certain vehicles used by a metropolitan mass
transit authority; changes references to the Air Control Board to
the Texas Natural Resource Conservation Commission to conform with
current law; changes references to "traditional" gasoline or diesel
fuels to "conventional" gasoline or diesel fuels.
SECTION 12. Amends Section 14, Chapter 141, Article 1118x,
V.T.C.S. as follows:
Changes (d) by deleting references to compressed natural gas or
fuels with lower emissions than compressed natural gas with regard
to the vehicles that must be in compliance with the alternative gas
fuels program by certain statutory dates which are in use by a
metropolitan mass transit authority; changes Air Control Board to
Texas Natural Resource Conservation Commission to conform with
current law
(e) Deletes references to compressed natural gas or other
fuels.
(g) Changes references to the Texas Air Control Board to the
Texas Natural Resource Conservation Commission to conform with
current law.
(h) Deletes references to compressed natural gas or other
fuels; changes references to the Texas Air Control Board to the
Texas Natural Resource Conservation Commission; deletes
"traditional" and inserts "conventional" in reference to gasoline
or diesel fuel.
Adds (i) by giving "alternative fuel" and "conventional gasoline"
the meaning assigned by this Act.
SECTION 13. Amends Section 20, Article 1118y, V.T.C.S., by
amending Subsections (e), (f), (g), and (h), and by adding
Subsection (k) as follows:
(e) is changed by deleting references to compressed natural
gas or fuels with lower emissions than compressed natural gas as
acceptable for use in certain vehicles used by regional transit
authority; deletes references to compressed natural gas; deletes
"traditional" and inserts "conventional" in reference to gasoline
or diesel fuels.
(f) Changes references to the Texas Air Control Board to the
Texas Natural Resource Conservation Commission to conform with
current law; deletes references to compressed natural gas or other
fuels.
(g) and (h) delete references to compressed natural gas or
other fuels.
(k) is added to give "alternative fuel" and "conventional
gasoline" the meaning assigned by this Act.
SECTION 14. Amends Section 6, Article 1118z, V.T.C.S., by amending
Subsections (k), (l), and (m), and by adding Subsection (p) as
follows:
(k) deletes reference to compressed natural gas or fuels with
lower emissions than compressed natural gas with regard to certain
vehicles acceptable for use that are in use by a city transit
departments in acceptable for use after certain dates; deletes
references to compressed natural gas or other fuels; deletes
"traditional" and inserts "conventional" in reference to gasoline
or diesel fuels.
(l) deletes references to compressed natural gas or other
fuels; changes references to the Air Control Board to Texas Natural
Resource Conservation Commission to conform with current law.
(m) deletes references to compressed natural gas or other
fuels.
(p) gives "alternative fuel" and "conventional gasoline" the
meaning assigned by this Act.
SECTION 15. Amends Section 3.29, Article 601b, V.T.C.S., (State
Purchasing and General Services Act) as follows;
(a) and (b) (1), (2), and (3) Deletes language allowing
another alternative fuel other than compressed natural gas with
comparably lower emissions to be acceptable for certain vehicles or
equipment acquired by a state agency, and adds language allowing
the same to acquire or operate vehicles or equipment or have access
to facilities capable of using liquefied natural gas, liquefied
petroleum gas, methanol of methanol/gasoline blends of 85 percent
or greater, ethanol or ethanol/gasoline blends of 85 percent or
greater, or electricity.
(b) (4) (A) Changes language exempting the agency from
the acceptable fuel requirements if a central station is available
for compressed natural gas, to exempting the agency if an adequate
fueling station is not reasonably available and providing liquefied
natural gas, liquefied petroleum gas, methanol of methanol/gasoline
blends of 85 percent or greater, ethanol or ethanol/gasoline blends
of 85 percent or greater, or electricity, and deletes "alternative
fuels" language.
(b) (4) (B) Adds liquefied natural gas, liquefied
petroleum gas, methanol of methanol/gasoline blends of 85 percent
or greater, ethanol or ethanol/gasoline blends of 85 percent or
greater, or electricity, and deletes "alternative fuels" language,
to use as factors in determining whether a state agency qualifies
for exemptions from fuel use requirements as follows: if the net
cost of providing equipment and facilities necessary is reasonably
expected to result in no greater net cost than the use of
"conventional" (deletes "traditional") fuels.
(c) (1), (2), (3) Adds language to allow state agencies to
include the use of liquefied natural gas, liquefied petroleum gas,
methanol of methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater, or
electricity as acceptable fuels, and deletes "alternative fuels"
language, in the calculation of required percentages of vehicles in
compliance with the law, and determining the benefits of the listed
acceptable fuels; also changes references to the Air Control Board
to Texas Natural Resource Conservation Commission to conform with
current law.
(c) (4) Adds the use of liquefied natural gas,
liquefied petroleum gas, methanol of methanol/gasoline blends of 85
percent or greater, ethanol or ethanol/gasoline blends of 85
percent or greater, or electricity to the acceptable percentages of
acceptably fueled vehicles, and in financial reporting
requirements, and deletes "alternative fuels" language.
(d) Deletes language requiring the commission to work with
other entities in meeting certain percentage requirements of "other
alternative fuels," and requires the commission to work with other
entities in maintaining a percentage of vehicles using liquefied
natural gas, liquefied petroleum gas, methanol of methanol/gasoline
blends of 85 percent or greater, ethanol or ethanol/gasoline blends
of 85 percent or greater, or electricity.
(e) Adds liquefied natural gas, liquefied petroleum gas,
methanol of methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater, or
electricity, and deletes "alternative fuels" language, to factor
for state agencies exemptions from acceptable fuel requirements if
the net cost of providing equipment and facilities necessary is
reasonably expected to result in no greater net cost than the use
of "conventional" (deletes "traditional") fuel; changes language
that exempts an agency from acceptable fuel requirements if a
central refueling compressed natural gas station is not convenient
to language exempting an agency from acceptable fuel requirements
if a listed acceptable fuel is not represented by an adequate
fueling station.
(f) Deletes language requiring the commission to comply with
all federal and state safety standards relating to "other
alternative fuels," and requires the commission to comply with all
federal and state safety standards relating to liquefied natural
gas, liquefied petroleum gas, methanol of methanol/gasoline blends
of 85 percent or greater, ethanol or ethanol/gasoline blends of 85
percent or greater, or electricity.
(g) Deletes language regarding an "alternative fuel" in
reference to a vehicle which is capable of using acceptable fuel,
and replaces it with liquefied natural gas, liquefied petroleum
gas, methanol of methanol/gasoline blends of 85 percent or greater,
ethanol or ethanol/gasoline blends of 85 percent or greater, or
electricity.
(h) Changes references to "traditional" fuels and replaces it
with "an engine powered by conventional" fuel; deletes language
referring to "alternative fuel" in allowing the commission to
extend the dates when acceptable fueled vehicles under this
section, and replaces the language with liquefied natural gas,
liquefied petroleum gas, methanol of methanol/gasoline blends of 85
percent or greater, ethanol or ethanol/gasoline blends of 85
percent or greater, or electricity.
(i) is added so that vehicles purchased by the Texas
Transportation Institute for the purpose of performing crash tests
are not subject to alternative fuels requirements.
(j) is added to include the definition of "conventional
gasoline" as provided by this act.
SECTION 16. Amends Subsection (b), Section 113.286, Natural
Resources Code, by allowing the Alternative Fuels Conversion Fund
to finance activities supporting or encouraging the use of
liquefied natural gas, liquefied petroleum gas, methanol of
methanol/gasoline blends of 85 percent or greater, ethanol or
ethanol/gasoline blends of 85 percent or greater, or electricity
rather than alternative fuels.
SECTION 17. Amends Section 113.287, Natural Resources Code, by
deleting references to "alternative," so that only beneficial fuels
are included in the Fuels Conversion Loan Program.
SECTION 18. States legislative intent that the Alternative Fuels
Council is authorized to certify projects associated with the
following fuels: compressed natural gas, liquefied natural gas,
liquefied petroleum gas, electricity, methanol, ethanol, other
alcohols including any mixture thereof containing 85 percent or
more by volume of such alcohol with gasoline or other fuels.
SECTION 19. Requires TNRCC to adopt rules no later than September
1, 1997.
SECTION 20. Effective date: September 1, 1995.
SECTION 21. Emergency clause.
SUMMARY OF COMMITTEE ACTION
SB 200 was considered by the House Committee on Environmental
Regulation in a public hearing on March 14, 1995. SB 200 was
reported favorably without amendment with the recommendation that
it do pass and be printed, by a record vote of eight yeas (8), no
nays (0), one present not voting (1), and no absent (0).