BILL ANALYSIS C.S.S.B. 200 By: Armbrister State Affairs 2-14-95 Committee Report (Substituted) 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 As proposed, C.S.S.B. 200 authorizes the adoption of rules by the Texas Natural Resource Conservation Commission 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 granted to the Texas Natural Resource Conservation Commission under SECTION 10 (Sections 382.142(a), (b) and (e), Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 382.131, Health and Safety Code, to define "alternative fuel," "capable of being centrally fueled," "centrally fueled," "clean-fuel vehicle," "conventional gasoline," "emissions," "fleet vehicle," "mass transit authority," and "reformulated gasoline." SECTION 2. Amends Section 382.133, Health and Safety Code, to delete the requirement that the Texas Natural Resource Conservation Commission (board) require a mass transit authority to ensure that its vehicles can operate on compressed natural gas that result in comparably lower emissions. 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) Makes a nonsubstantive change. (b) Makes conforming changes. (c) Requires rules adopted by the board, rather than in this section, to require a local government or private person to have 30 percent of fleet vehicles purchased after September 1, 1998, 50 percent of fleet vehicles purchased after September 1, 2000, and 90 percent of fleet vehicles purchased after September 1, 2002, able to operate on an alternative fuel. (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) Requires the conversion of a gasoline- or diesel-fueled fleet vehicle, whether previously acquired or newly purchased, to a clean-fuel vehicle to be treated as a purchase. Provides that the choice of clean-fuel vehicles and alternative fuels is in the fleet operator's discretion. (f) Provides that this section does not require a person to purchase a converted vehicle or to convert a gasoline- or diesel-fueled vehicle to a clean-fuel vehicle if clean-fuel vehicles are not available from original equipment manufacturers. SECTION 4. Amends Section 382.135, Health and Safety Code, to make nonsubstantive and conforming changes. SECTION 5. Amends Section 382.136(a), Health and Safety Code, to make a conforming change. SECTION 6. Amends Sections 382.138(a) and (b), Health and Safety Code, to make conforming changes. SECTION 7. Amends Section 382.139, Health and Safety Code, to make conforming changes. SECTION 8. Amends Section 382.140(a), Health and Safety Code, to make a conforming change. SECTION 9. Amends Section 382.141, Health and Safety Code, to make conforming changes. SECTION 10. Amends Chapter 382F, Health and Safety Code, by adding Section 382.142, as follows: Sec. 382.142. EMISSION REDUCTION CREDITS. (a) Requires the commission, by rule, to provide for a person subject to a rule adopted under Section 382.133 or 382.134 to meet those requirements by trading or banking emission reduction credits. (b) Requires the commission, by rule, to provide for emission reduction credits to be issued to a fleet operator for certain purchases. (c) Requires emission reduction credits issued for the purchase of a clean-fuel vehicle to reflect the level of emission reduction the vehicle achieves. (d) Authorizes emission reduction credits to be traded, sold, purchased, or banked for use by any person to demonstrate compliance with the percentage requirements of Section 382.133 or 382.134 or with any other air pollutant emission reduction required by law within the same quality nonattainment area as designated within the meaning of Section 107(d) of the federal Clean Air Act. Authorizes an emission reduction credit to be used as provided by law for an area emission reduction credit organization under Chapter 384. (e) Requires the commission to adopt rules to implement this section. SECTION 11. Amends Section 21.174, Education Code, by amending Subsections (c), (d), (e), (g), and (h), and by adding Subsection (i), to make conforming changes. SECTION 12. Amends Section 14(c), Chapter 141, Article 1118x, V.T.C.S., to authorize the board or, in an authority covered by Subsection (h) of this section, the Texas Natural Resource Conservation Commission, rather than the Texas Air Control Board, to make exceptions to the requirements of this subsection if the board makes specific certifications. Makes conforming changes. SECTION 13. Amends Section 14, Article 1118x, V.T.C.S., by amending Subsections (d), (e), (g), and (h), and by adding Subsection (i), to make conforming changes. SECTION 14. Amends Section 20, Article 1118y, V.T.C.S., by amending Subsections (e), (f), (g), and (h), and by adding Subsection (k), to make conforming changes. SECTION 15. Amends Section 6, Article 1118z, V.T.C.S., by amending Subsections (k), (l), and (m), and by adding Subsection (p), to make conforming changes. SECTION 16. Amends Section 3.29, Article 601b, V.T.C.S., (State Purchasing and General Services Act), to make conforming changes. SECTION 17. Requires the Texas Natural Resource Conservation Commission to adopt rules to implement Section 382.142, Health and Safety Code, as added by this Act, no later than September 1, 1997. SECTION 18. Effective date: September 1, 1995. SECTION 19. Emergency clause.