S.B. No. 200
                                        AN ACT
    1-1  relating to the alternative fuels program.
    1-2        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-3        SECTION 1.  Section 382.131, Health and Safety Code, is
    1-4  amended to read as follows:
    1-5        Sec. 382.131.  DEFINITIONS.  In this subchapter:
    1-6              (1)  "Alternative fuel" means any fuel or power source
    1-7  that, when used in a clean-fuel vehicle, allows the vehicle to
    1-8  comply with the standards and requirements of Part C, Subchapter
    1-9  II, of the federal Clean Air Act, as amended (42 U.S.C. Section
   1-10  7581 et seq.) and emission limits at least as stringent as the
   1-11  applicable low-emission vehicle standards for the clean-fuel fleet
   1-12  program under 40 C.F.R. Sections 88.104-94 and 88.105-94 as
   1-13  published in the September 30, 1994, Federal Register.
   1-14              (2)  "Capable of being centrally fueled" means a fleet
   1-15  or that part of a fleet consisting of vehicles that could be
   1-16  refueled 100 percent of the time at a location that is owned,
   1-17  operated, or controlled by the fleet operator or that is under
   1-18  contract with the fleet operator.  The fact that one or more
   1-19  vehicles in a fleet are not centrally fueled does not exempt an
   1-20  entire fleet from the program.
   1-21              (3)  "Centrally fueled" means a fleet or that part of a
   1-22  fleet consisting of vehicles that are refueled 100 percent of the
   1-23  time at a location that is owned, operated, or controlled by the
    2-1  fleet operator or that is under contract with the fleet operator.
    2-2  The fact that one or more vehicles in a fleet are not centrally
    2-3  fueled does not exempt an entire fleet from the program.  The term
    2-4  does not include retail credit card purchases or commercial fleet
    2-5  service card purchases.
    2-6              (4)  "Clean-fuel vehicle" means a vehicle in a class or
    2-7  category of vehicles that has been certified to meet for any model
    2-8  year:
    2-9                    (A)  the clean-fuel vehicle standards applicable
   2-10  under Part C, Subchapter II, of the federal Clean Air Act, as
   2-11  amended (42 U.S.C. Section 7581 et seq.); and
   2-12                    (B)  emission limits at least as stringent as the
   2-13  applicable low-emission vehicle standards for the clean-fuel fleet
   2-14  program under 40 C.F.R. Sections 88.104-94 and 88.105-94 as
   2-15  published in the September 30, 1994, Federal Register.
   2-16              (5)  "Conventional gasoline" means any gasoline that
   2-17  does not meet specifications set by a certification under Section
   2-18  211(k) of the federal Clean Air Act, as amended (42 U.S.C. Section
   2-19  7545(k)).
   2-20              (6)  "Emissions" means emissions of oxides of nitrogen,
   2-21  volatile organic compounds, carbon monoxide, particulates, or any
   2-22  combination of those substances.
   2-23              (7) <(2)>  "Fleet vehicle" means a vehicle required to
   2-24  be registered under Chapter 88, General Laws, Acts of the 41st
   2-25  Legislature, 2nd Called Session, 1929 (Article 6675a-2, Vernon's
    3-1  Texas Civil Statutes), and that is centrally fueled, capable of
    3-2  being centrally fueled, or fueled at facilities serving both
    3-3  business customers and the general public.  The term does not
    3-4  include:
    3-5                    (A)  a fleet vehicle that, when not in use, is
    3-6  normally parked at the residence of the individual who usually
    3-7  operates it and that is available to such individual for personal
    3-8  use;
    3-9                    (B)  a fleet vehicle that, when not in use, is
   3-10  normally parked at the residence of the individual who usually
   3-11  operates it and who does not report to a central location; or
   3-12                    (C)  a fleet vehicle that has a gross vehicle
   3-13  weight rating of greater than 26,000 pounds except vehicles owned
   3-14  or operated by the state or mass transit authorities.
   3-15              (8) <(3)>  "Mass transit authority" means a
   3-16  transportation or transit authority or department established under
   3-17  Chapter 141, Acts of the 63rd Legislature, Regular Session, 1973
   3-18  (Article 1118x, Vernon's Texas Civil Statutes), Chapter 683, Acts
   3-19  of the 66th Legislature, Regular Session, 1979 (Article 1118y,
   3-20  Vernon's Texas Civil Statutes), or Article 1118z, Revised Statutes,
   3-21  that operates a mass transit system under any of those laws.
   3-22              (9)  "Reformulated gasoline" means gasoline that has
   3-23  been certified as a reformulated gasoline under the federal
   3-24  certification regulations adopted in accordance with Section 211(k)
   3-25  of the federal Clean Air Act, as amended (42 U.S.C. Section
    4-1  7545(k)).
    4-2        SECTION 2.  Section 382.133, Health and Safety Code, is
    4-3  amended to read as follows:
    4-4        Sec. 382.133.  Mass Transit Fleet Vehicles.  (a)  The board
    4-5  by rule shall require a mass transit authority to ensure that its
    4-6  vehicles can operate on <compressed natural gas or other>
    4-7  alternative fuels <that result in comparably lower emissions>.
    4-8        (b)  Rules adopted under this section must require a mass
    4-9  transit authority to have its fleet vehicles able to operate on an
   4-10  <compressed natural gas or other> alternative fuel according to the
   4-11  following schedule:
   4-12              (1)  not later than September 1, 1994, at least 30
   4-13  percent of the vehicles; and
   4-14              (2)  not later than September 1, 1996, at least 50
   4-15  percent of the vehicles.
   4-16        (c)  Contingent on the board's review, not later than
   4-17  December 31, 1996, of the alternative fuels program established by
   4-18  this section and the board's determination that the program is
   4-19  reducing emissions, is projected to be effective in improving
   4-20  overall air quality, and is necessary to the attainment of federal
   4-21  ambient air quality standards in the affected areas, the rules must
   4-22  require a mass transit authority, not later than September 1, 1998,
   4-23  to have at least 90 percent of its fleet vehicles able to operate
   4-24  on an <compressed natural gas or other> alternative fuel.
   4-25        SECTION 3.  Section 382.134, Health and Safety Code, is
    5-1  amended to read as follows:
    5-2        Sec. 382.134.  Local Government and Private Fleet Vehicles.
    5-3  (a)  This section applies only to:
    5-4              (1)  a local government that operates primarily in an
    5-5  affected area a fleet of more than 15 vehicles, excluding law
    5-6  enforcement and emergency vehicles; and
    5-7              (2)  a private person that operates primarily in an
    5-8  affected area a fleet of more than 25 fleet vehicles, excluding
    5-9  emergency vehicles.
   5-10        (b)  The <If the board determines under Section 382.133 that
   5-11  the alternative fuels program is reducing emissions, is projected
   5-12  to be effective in improving overall air quality, and is necessary
   5-13  to comply with federal ambient air quality standards for ozone,
   5-14  carbon monoxide, oxides of nitrogen, or particulates in the
   5-15  affected areas, the> board by rule shall require a local government
   5-16  or a private person to ensure that its fleet vehicles can operate
   5-17  on an <compressed natural gas or other> alternative fuel <fuels
   5-18  that reduce total annual emissions from motor vehicles in the
   5-19  area>.
   5-20        (c)  Rules adopted by the board <under this section> must
   5-21  require a local government or private person to have a proportion
   5-22  of the person's newly purchased <its> fleet vehicles and a
   5-23  proportion of the fleet vehicles in the person's total fleet able
   5-24  to operate on an <compressed natural gas or other> alternative fuel
   5-25  according to the following schedule:
    6-1              (1)  30 percent of fleet vehicles purchased after <not
    6-2  later than> September 1, 1998, or at least 10 percent of the fleet
    6-3  vehicles in the total fleet as of September 1, 1998 <30 percent of
    6-4  the vehicles>;
    6-5              (2)  50 percent of fleet vehicles purchased after <not
    6-6  later than> September 1, 2000, and at least 20 percent of the fleet
    6-7  vehicles in the total fleet as of September 1, 2000 <50 percent of
    6-8  the vehicles>; and
    6-9              (3)  90 percent of fleet vehicles purchased after <not
   6-10  later than> September 1, 2002, and at least 45 percent of the fleet
   6-11  vehicles in the total fleet as of September 1, 2002 <90 percent of
   6-12  the vehicles>.
   6-13        (d)  Rules adopted by the board may not require a local
   6-14  government or private person to purchase a fleet vehicle able to
   6-15  operate on an alternative fuel if the person maintains a proportion
   6-16  of 90 percent or more alternative fuel vehicles in the person's
   6-17  fleet.
   6-18        (e)  The choice of clean-fuel vehicles and alternative fuels
   6-19  is in the fleet operator's discretion.
   6-20        SECTION 4.  Section 382.135, Health and Safety Code, is
   6-21  amended to read as follows:
   6-22        Sec. 382.135.  DUAL FUEL CONVERSION.  (a)  The percentage
   6-23  requirements of Section <Sections> 382.133 <and 382.134> may be met
   6-24  by the dual fuel conversion or capability of conventional
   6-25  gasoline-powered or diesel-powered vehicles to operate also on an
    7-1  <compressed natural gas or other> alternative fuel <fuels that
    7-2  result in comparably lower emissions>.
    7-3        (b)  The percentage requirements of Section 382.134 may be
    7-4  met by the dual fuel conversion or capability of conventional
    7-5  gasoline-powered or diesel-powered vehicles to operate also on an
    7-6  alternative fuel.
    7-7        SECTION 5.  Subsection (a), Section 382.136, Health and
    7-8  Safety Code, is amended to read as follows:
    7-9        (a)  The board may make exceptions to rules adopted under
   7-10  Sections 382.133 and 382.134 if:
   7-11              (1)  a firm engaged in fixed price contracts with
   7-12  public works agencies can demonstrate that compliance with the
   7-13  requirements of those sections would result in substantial economic
   7-14  harm to the firm under a contract entered into before September 1,
   7-15  1997;
   7-16              (2)  the board determines that the affected vehicles
   7-17  will be operating primarily in an area that does not have or cannot
   7-18  reasonably be expected to establish adequate <a central> refueling
   7-19  <station> for the <alternative> fuels required under Sections
   7-20  382.133 and 382.134; <or>
   7-21              (3)  the affected entity is unable to secure financing
   7-22  provided by or arranged through the proposed supplier or suppliers
   7-23  of the <compressed natural gas or other alternative> fuels required
   7-24  under Sections 382.133 and 382.134 sufficient to cover the
   7-25  additional costs of such <alternative> fueling; or
    8-1              (4)  the projected net costs attributable to fueling
    8-2  for conversion or replacement and operation of conventionally
    8-3  fueled vehicles or engines with those capable of operating on the
    8-4  fuels required under Sections 382.133 and 382.134 reasonably is
    8-5  expected not to exceed comparable costs for vehicles operating on
    8-6  reformulated gasoline and diesel measured over the expected useful
    8-7  life of such vehicles or engines and after including in such cost
    8-8  calculations any available state or federal funding or incentives
    8-9  for the use of the fuels required under Sections 382.133 and
   8-10  382.134.
   8-11        SECTION 6.  Subsections (a) and (b), Section 382.138, Health
   8-12  and Safety Code, are amended to read as follows:
   8-13        (a)  In conjunction with the development of state
   8-14  implementation plans for achieving and maintaining compliance with
   8-15  federal ambient air quality standards under the federal Clean Air
   8-16  Act (42 U.S.C. Section 7401 et seq.), the board shall evaluate and
   8-17  determine, for areas required by federal law to have state
   8-18  implementation plans, the effectiveness of and need for the use of
   8-19  <compressed natural gas and other> alternative fuels in vehicles.
   8-20        (b)  The evaluation and determination must include:
   8-21              (1)  the uses of <compressed natural gas or other>
   8-22  alternative fuels required by Section <Sections 382.133 and>
   8-23  382.134; and
   8-24              (2)  additional or different uses of <compressed
   8-25  natural gas or other> alternative fuels.
    9-1        SECTION 7.  Section 382.139, Health and Safety Code, is
    9-2  amended to read as follows:
    9-3        Sec. 382.139.  Additional Alternative Fuels Use.  (a)  If,
    9-4  after considering the factors listed in Section 382.138, the board
    9-5  determines that the use of <compressed natural gas or other>
    9-6  alternative fuels for certain categories of motor vehicles is
    9-7  effective and necessary for achieving or <and> maintaining
    9-8  compliance with federal ambient air quality standards, the board by
    9-9  rule shall require those uses in addition to uses required
   9-10  elsewhere in this subchapter.
   9-11        (b)  If, after considering the factors listed in Section
   9-12  382.138, the board determines that the additional uses are
   9-13  appropriate, the board may establish and implement programs
   9-14  encouraging the use of <compressed natural gas or other>
   9-15  alternative fuels for certain categories of vehicles.
   9-16        SECTION 8.  Subsection (a), Section 382.140, Health and
   9-17  Safety Code, is amended to read as follows:
   9-18        (a)  In connection with the evaluations and determinations
   9-19  required under Section 382.138 and encouraging the use of <natural
   9-20  gas or other> alternative fuels, the board may conduct or have
   9-21  conducted appropriate studies or pilot programs.
   9-22        SECTION 9.  Section 382.141, Health and Safety Code, is
   9-23  amended to read as follows:
   9-24        Sec. 382.141.  Report Required.  The board shall report
   9-25  biennially its evaluations and determinations on the use of
   10-1  <compressed natural gas or other> alternative fuels and recommend
   10-2  legislative changes necessary to implement an effective and
   10-3  feasible program for the use of <compressed natural gas and other>
   10-4  alternative fuels.  The report shall be submitted to the governor
   10-5  and the legislature not later than the 30th day before the
   10-6  commencement of each regular legislative session.
   10-7        SECTION 10.  Subchapter F, Chapter 382, Health and Safety
   10-8  Code, is amended by adding Sections 382.142 and 382.143 to read as
   10-9  follows:
  10-10        Sec. 382.142.  PROGRAM COMPLIANCE CREDITS.  (a)  The
  10-11  percentage requirements of Sections 382.133 and 382.134 may be met,
  10-12  in whole or in part, through the purchase, lease, or other
  10-13  acquisition of the required percentages of clean-fuel vehicles or
  10-14  through the acquisition or use of program compliance credits.
  10-15        (b)(1)  Rules adopted under this section shall provide for
  10-16  the issuance of appropriate program compliance credits to a vehicle
  10-17  owner or operator for any of the following or any combination
  10-18  thereof:
  10-19                    (A)  the acquisition of a clean-fuel vehicle
  10-20  which meets more stringent emissions control standards than those
  10-21  otherwise required under this Act;
  10-22                    (B)  the acquisition of clean-fuel vehicles in
  10-23  greater numbers than otherwise required under Sections 382.133 and
  10-24  382.134;
  10-25                    (C)  the purchase of a clean-fuel vehicle in a
   11-1  category not otherwise required by this subchapter; and
   11-2                    (D)  the purchase, lease, or acquisition of a
   11-3  clean-fuel vehicle prior to the dates otherwise required under
   11-4  Sections 382.133 and 382.134.
   11-5              (2)  Program compliance credits shall be awarded based
   11-6  upon the emissions certification level of the vehicle generating
   11-7  the credit.  Vehicles which provide greater emissions reductions
   11-8  levels will be entitled to a greater number of credits as follows:
   11-9                    (A)  LEVs - one credit;
  11-10                    (B)  ULEVs - two credits; and
  11-11                    (C)  ILEVs and ZEVs - three credits.
  11-12              (3)  Program compliance credits issued for the
  11-13  purchase, lease, or other acquisition of a vehicle pursuant to this
  11-14  section may be used to demonstrate compliance with the percentage
  11-15  requirements of Sections 382.133 and 382.134, they may be banked
  11-16  for later use, or they may be traded, sold, or purchased, for use
  11-17  by any other person in the same nonattainment area, to demonstrate
  11-18  compliance with the percentage requirements of Sections 382.133 and
  11-19  382.134.
  11-20              (4)  Vehicles converted, purchased, leased, or
  11-21  otherwise acquired prior to September 1, 1998, may be counted
  11-22  toward compliance with the applicable fleet percentage requirements
  11-23  of Section 382.134 if the vehicles:
  11-24                    (A)  are capable of operating on an alternative
  11-25  fuel;
   12-1                    (B)  meet at a minimum the Tier I emissions
   12-2  standards pursuant to Section 202 of the federal Clean Air Act, as
   12-3  amended (42 U.S.C. Section 7521); and
   12-4                    (C)  do not exceed 30 percent of the
   12-5  owner/operator's fleet on September 1, 1998.
   12-6              (5)  This section shall also apply to all vehicles
   12-7  purchased, leased, or otherwise acquired pursuant to:
   12-8                    (A)  Section 21.174(c)(1), Education Code;
   12-9                    (B)  Section 14(c)(1), Chapter 141, Acts of the
  12-10  63rd Legislature, Regular Session, 1973 (Article 1118x, Vernon's
  12-11  Texas Civil Statutes), as added by Section 8, Chapter 1189, Acts of
  12-12  the 71st Legislature, Regular Session, 1989, and amended by Section
  12-13  13, Chapter 503, Acts of the 72nd Legislature, Regular Session,
  12-14  1991;
  12-15                    (C)  Section 20(e)(1), Chapter 683, Acts of the
  12-16  66th Legislature, 1979 (Article 1118y, Vernon's Texas Civil
  12-17  Statutes);
  12-18                    (D)  Section 6(k)(1), Article 1118z, Revised
  12-19  Statutes; and
  12-20                    (E)  Section 3.29(a), State Purchasing and
  12-21  General Services Act (Article 601b, Vernon's Texas Civil Statutes).
  12-22        Sec. 382.143.  TEXAS MOBILE EMISSIONS REDUCTION CREDIT
  12-23  PROGRAM.  (a)  The board by rule shall establish a Texas Mobile
  12-24  Emissions Reduction Credit (MERC) Program.
  12-25        (b)  Rules adopted under this section shall comply with the
   13-1  United States Environmental Protection Agency's minimum
   13-2  requirements for an approvable Mobile Emissions Reduction Credit
   13-3  program and shall also provide for the following program elements:
   13-4              (1)  program participation shall be as follows:
   13-5                    (A)  entry into the program is voluntary; and
   13-6                    (B)  both fleet owners or operators subject to
   13-7  the percentage requirements of Sections 382.133 and 382.134 and
   13-8  vehicle owners or operators who are not subject to those percentage
   13-9  requirements may generate mobile emissions reduction credits under
  13-10  this program, although the board may require a certain minimum
  13-11  number of vehicles to participate;
  13-12              (2)  mobile emissions reduction credits shall be
  13-13  calculated on a per-pollutant basis and shall be granted to a
  13-14  participating vehicle owner or operator for any of the following:
  13-15                    (A)  acquisition of more or cleaner vehicles than
  13-16  otherwise required by law; or
  13-17                    (B)  entering into a binding contract with the
  13-18  board to purchase or acquire at some future date more or cleaner
  13-19  vehicles than otherwise required by law;
  13-20              (3)  mobile emissions reduction credit values shall be
  13-21  determined in accordance with United States Environmental
  13-22  Protection Agency rules and guidance;
  13-23              (4)  mobile emissions reduction credits may be used as
  13-24  follows:
  13-25                    (A)  to demonstrate compliance with any
   14-1  applicable mobile source emissions reductions requirements; and
   14-2                    (B)  to satisfy Reasonably Available Control
   14-3  Technology and Clean Air Act offset requirements, subject to the
   14-4  appropriate trading ratios; and
   14-5              (5)  all mobile emissions reduction credits generated
   14-6  in accordance with this section may, within the same nonattainment
   14-7  area, be sold, traded, or banked for later use without discount or
   14-8  depreciation of such credits.
   14-9        (c)(1)  Texas Mobile Emissions Reduction Credit Fund is
  14-10  created and is to be administered by the board.
  14-11              (2)  Mobile emissions reduction credits shall be
  14-12  assigned from the Texas Mobile Emissions Reduction Credit Fund to
  14-13  vehicle owners or operators qualified under this section to
  14-14  generate and receive mobile emissions reduction credits if the
  14-15  following conditions are met:
  14-16                    (A)  the vehicle owner or operator enters into a
  14-17  binding contract with the board, agreeing to purchase and place in
  14-18  service in designated program areas clean-fuel vehicles in
  14-19  accordance with the number of credits issued and the time frame
  14-20  specified by the board; and
  14-21                    (B)  the vehicle owner or operator agrees to name
  14-22  the United States Environmental Protection Agency as a third-party
  14-23  beneficiary of its contract with the board.
  14-24              (3)  Contracts entered into under this section may be
  14-25  enforced in the courts of the State of Texas by an order of
   15-1  specific performance.
   15-2        (d)  The acquisition of qualifying clean-fuel vehicles may
   15-3  qualify both for mobile emissions reduction credits under this
   15-4  section and for program compliance credits under Section 382.142.
   15-5        (e)  The following shall be considered violations of the
   15-6  Texas Mobile Emissions Reduction Credit Program:
   15-7              (1)  claiming a mobile emissions reduction credit
   15-8  without meeting the appropriate acquisition requirements and
   15-9  submitting any other data required by board rules; or
  15-10              (2)  counterfeiting or dealing commercially in
  15-11  counterfeit mobile emissions reduction credit certificates.
  15-12        (f)  Any person found by the board to be in violation under
  15-13  Subsection (e) shall be subject to a civil penalty of not more than
  15-14  $25,000 per violation.
  15-15        (g)  The credit trading program established by this section
  15-16  shall be administered as follows:
  15-17              (1)  Mobile emissions reduction credits must be banked
  15-18  in accordance with the then existing board rules.
  15-19              (2)  MERCs may be generated on a per-pollutant basis in
  15-20  the following ways:
  15-21                    (A)  after September 1, 1994, the use,
  15-22  conversion, purchase, or acquisition of more clean-fuel vehicles
  15-23  than required by the fleet percentage requirements of Sections
  15-24  382.133 and 382.134, according to the following formula:
  15-25                          (additional emissions benefit x VMT x CF)
   16-1  where:
   16-2                          (i)  additional emissions benefit is the
   16-3  in-use emissions difference between the emission certification
   16-4  standard of the conventionally fueled baseline vehicle and the LEV
   16-5  emission standards.  For evaporative emissions, benefit will be
   16-6  derived from the most recently EPA approved mobile emissions
   16-7  estimation model;
   16-8                          (ii)  VMT is the total remaining vehicle
   16-9  miles to be traveled;
  16-10                          (iii)  CF is the conversion factor for
  16-11  heavy-duty vehicles which is:  brake specific fuel consumption x
  16-12  fuel economy x fuel density;
  16-13                          (iv)  n is the estimated fleet life of the
  16-14  vehicle measured in years;
  16-15                    (B)  the purchase or acquisition of vehicles
  16-16  which meet emission standards more stringent than the LEV emission
  16-17  standards, according to the following formula:
  16-18                             (cleaner vehicle benefit x VMT x CF)
  16-19  where cleaner vehicle benefit is the in-use emissions rate
  16-20  difference between the LEV emission standards and the standard to
  16-21  which the vehicle is actually certified;
  16-22                    (C)  the purchase or acquisition of a vehicle
  16-23  with certified levels of evaporative emissions less than five grams
  16-24  per test, according to the following formula:
  16-25                                  (vapor improvement x VMT)
   17-1  where vapor improvement is the in-use emissions rate difference
   17-2  between conventional and low vapor emission vehicles calculated
   17-3  using the most recently approved EPA mobile emissions model.
   17-4              (3)  The vehicle owners or operators applying for a
   17-5  MERC shall submit a registration application to the board using an
   17-6  approved MERC registration form.  The application must clearly
   17-7  state the following information for each vehicle generating credit:
   17-8                    (A)  the emissions standard of the vehicle as
   17-9  certified pursuant to this Act;
  17-10                    (B)  the number of remaining vehicle miles to be
  17-11  traveled;
  17-12                    (C)  the number of years the vehicle will be used
  17-13  as a fleet vehicle; and
  17-14                    (D)  the results from the MERC calculation used
  17-15  to estimate the credit value in grams per year.
  17-16              (4)  The MERC registration must include information
  17-17  sufficient to calculate the MERC's value under Subdivision (g)(2)
  17-18  of this section.
  17-19              (5)  The board will evaluate the claimed credits and
  17-20  may adjust the value of the MERCs based on the evaluation.
  17-21              (6)  MERC registration applications must be received at
  17-22  least 90 days prior to using the MERC.
  17-23              (7)  The board will have 30 days from the date of
  17-24  receipt to determine if the MERC registration application is
  17-25  complete.
   18-1              (8)  The board will have 90 days from date of receipt
   18-2  of the completed application to approve or deny the MERC
   18-3  registration.
   18-4              (9)  The board may revoke approval of a MERC
   18-5  registration under this section at any time on determining that the
   18-6  requirements of this section are not being met.
   18-7        (h)  This section also applies to all vehicles purchased,
   18-8  leased, or otherwise acquired pursuant to:
   18-9                    (A)  Section 21.174(c)(1), Education Code;
  18-10                    (B)  Section 14(c)(1), Chapter 141, Acts of the
  18-11  63rd Legislature, Regular Session, 1973 (Article 1118x, Vernon's
  18-12  Texas Civil Statutes), as added by Section 8, Chapter 1189, Acts of
  18-13  the 71st Legislature, Regular Session, 1989, and amended by Section
  18-14  13, Chapter 503, Acts of the 72nd Legislature, Regular Session,
  18-15  1991;
  18-16                    (C)  Section 20(e)(1), Chapter 683, Acts of the
  18-17  66th Legislature, 1979 (Article 1118y, Vernon's Texas Civil
  18-18  Statutes);
  18-19                    (D)  Section 6(k)(1), Article 1118z, Revised
  18-20  Statutes; and
  18-21                    (E)  Section 3.29(a), State Purchasing and
  18-22  General Services Act (Article 601b, Vernon's Texas Civil Statutes).
  18-23        SECTION 11.  Subsection (c), Section 14, Chapter 141, Acts of
  18-24  the 63rd Legislature, Regular Session, 1973 (Article 1118x,
  18-25  Vernon's Texas Civil Statutes), as added by Section 8, Chapter
   19-1  1189, Acts of the 71st Legislature, Regular Session, 1989, and
   19-2  amended by Section 13, Chapter 503, Acts of the 72nd Legislature,
   19-3  Regular Session, 1991, is amended to read as follows:
   19-4        (c)(1)  The board may not purchase or lease after
   19-5  September 1, 1991, any motor vehicle unless that vehicle is capable
   19-6  of using an <compressed natural gas or other> alternative fuel
   19-7  <fuels which result in comparably lower emissions of oxides of
   19-8  nitrogen, volatile organic compounds, carbon monoxide, or
   19-9  particulates or any combination thereof>.
  19-10              (2)  The authority may acquire or be provided equipment
  19-11  or refueling facilities necessary to operate such vehicles using
  19-12  <compressed natural gas or other> alternative fuel <fuels>:
  19-13                    (A)  by purchase or lease as authorized by law;
  19-14                    (B)  by gift or loan of the equipment or
  19-15  facilities; or
  19-16                    (C)  by gift or loan of the equipment or
  19-17  facilities or other arrangement pursuant to a service contract for
  19-18  the supply of <compressed natural gas or other> alternative fuel
  19-19  <fuels>.
  19-20              (3)  If such equipment or facilities are donated,
  19-21  loaned, or provided through other arrangement with the supplier of
  19-22  <compressed natural gas or other> alternative fuel <fuels>, the
  19-23  supplier shall be entitled to recoup its actual cost of donating,
  19-24  loaning, or providing the equipment or facilities through its fuel
  19-25  charges under the supply contract.
   20-1              (4)  The board or, in an authority covered by
   20-2  Subsection (h) of this section, the Texas Natural Resource
   20-3  Conservation Commission <Air Control Board>, may make exceptions to
   20-4  the requirements of this subsection if the board certifies that:
   20-5                    (A)  the authority's vehicles will be operating
   20-6  primarily in an area in which neither the authority nor a supplier
   20-7  has or can reasonably be expected to establish a central refueling
   20-8  station for <compressed natural gas or other> alternative fuels; or
   20-9                    (B)  the authority is unable to acquire or be
  20-10  provided equipment or refueling facilities necessary to operate
  20-11  vehicles using <compressed natural gas or other> alternative fuels
  20-12  at a projected cost that is reasonably expected to result in no
  20-13  greater net costs than the continued use of conventional
  20-14  <traditional> gasoline or diesel fuels, measured over the expected
  20-15  useful life of the equipment or facilities supplied.
  20-16        SECTION 12.  Section 14, Chapter 141, Acts of the 63rd
  20-17  Legislature, Regular Session, 1973 (Article 1118x, Vernon's Texas
  20-18  Civil Statutes), is amended by amending Subsections (d), (e), (g),
  20-19  and (h) and by adding Subsection (i) to read as follows:
  20-20        (d)(1)  The board shall achieve the following percentages of
  20-21  vehicles capable of using <compressed natural gas or other>
  20-22  alternative fuels by the times specified:
  20-23                    (A)  the percentage shall be equal to or greater
  20-24  than 30 percent of the number of fleet vehicles operated in 1994;
  20-25  and
   21-1                    (B)  equal to or greater than 50 percent of the
   21-2  number of fleet vehicles operated by September 1, 1996.
   21-3              (2)  The Texas Natural Resource Conservation Commission
   21-4  <Air Control Board> must review this alternative fuel use program
   21-5  by December 31, 1996, and, if the Texas Natural Resource
   21-6  Conservation Commission <Air Control Board> determines that the
   21-7  program has been effective in reducing total annual emissions from
   21-8  motor vehicles in the area, the board shall achieve a percentage of
   21-9  fleet vehicles capable of using <compressed natural gas or other>
  21-10  alternative fuels equal to or greater than 90 percent of the number
  21-11  of fleet vehicles operated by September 1, 1998, and thereafter.
  21-12              (3)  The board must submit to the Texas Natural
  21-13  Resource Conservation Commission <Air Control Board> an annual
  21-14  report by December 31 of each year showing purchases, leases, and
  21-15  conversions of motor vehicles and usage of <compressed natural gas
  21-16  or other> alternative fuels and any other relevant information the
  21-17  Texas Natural Resource Conservation Commission <Air Control Board>
  21-18  may require.
  21-19        (e)  The board in the development of the <compressed natural
  21-20  gas or other> alternative fuel use program should work with vehicle
  21-21  manufacturers and converters, fuel distributors, and others to
  21-22  delineate the vehicles to be covered, taking into consideration
  21-23  range, specialty uses, fuel availability, vehicle manufacturing and
  21-24  conversion capability, safety, resale values, and other relevant
  21-25  factors.  The board may meet the percentage requirements of this
   22-1  section through purchase of new vehicles or the conversion of
   22-2  existing vehicles, in accordance with federal and state
   22-3  requirements and applicable safety laws, to use <such> alternative
   22-4  fuels.
   22-5        (g)  The Texas Natural Resource Conservation Commission <Air
   22-6  Control Board> may require reasonable reporting from any board to
   22-7  document the air quality benefits from alternative fuel use
   22-8  programs.
   22-9        (h)(1)  This subsection applies only to an authority
  22-10  confirmed at a tax election before July 1, 1985, and in which the
  22-11  principal city has a population of less than 750,000, according to
  22-12  the most recent federal census.
  22-13              (2)  The Texas Natural Resource Conservation Commission
  22-14  <Air Control Board> may reduce any percentage specified by, or
  22-15  waive the requirements of, Subsection (d) of this section for an
  22-16  authority on receipt of certification supported by evidence
  22-17  acceptable to the Texas Natural Resource Conservation Commission
  22-18  <Air Control Board> that:
  22-19                    (A)  the authority's vehicles will be operating
  22-20  primarily in an area in which neither the authority nor a supplier
  22-21  has or can reasonably be expected to  establish a central refueling
  22-22  station for <compressed natural gas or other> alternative fuels; or
  22-23                    (B)  the authority is unable to acquire or be
  22-24  provided equipment or refueling facilities necessary to operate
  22-25  vehicles using <compressed natural gas or other> alternative fuels
   23-1  at a projected cost that is reasonably expected to result in no
   23-2  greater net costs than the continued use of conventional
   23-3  <traditional> gasoline or diesel fuels, measured over the expected
   23-4  useful life of the equipment or facilities supplied.
   23-5              (3)  The Texas Natural Resource Conservation Commission
   23-6  <Air Control Board> shall develop rules for the certification
   23-7  process, including provisions requiring the authority to hold a
   23-8  public meeting and develop an alternative implementation schedule
   23-9  for meeting the percentages provided by Subsection (d) of this
  23-10  section before applying to the Texas Natural Resource Conservation
  23-11  Commission <Air Control Board> for a reduction or waiver of those
  23-12  requirements.
  23-13        (i)  In this section, "alternative fuel" and "conventional
  23-14  gasoline" have the meanings assigned by Section 382.131, Health and
  23-15  Safety Code.
  23-16        SECTION 13.  Section 20, Chapter 683, Acts of the 66th
  23-17  Legislature, 1979 (Article 1118y, Vernon's Texas Civil Statutes),
  23-18  is amended by amending Subsections (e), (f), (g), and (h) and by
  23-19  adding Subsection (k) to read as follows:
  23-20        (e)(1)  An authority may not purchase or lease after
  23-21  September 1, 1991, any motor vehicle unless that vehicle is capable
  23-22  of using an <compressed natural gas or other> alternative fuel
  23-23  <fuels which result in comparably lower emissions of oxides of
  23-24  nitrogen, volatile organic compounds, carbon monoxide, or
  23-25  particulates or any combination thereof>.
   24-1              (2)  An authority may acquire or be provided equipment
   24-2  or refueling facilities necessary to operate <such> vehicles using
   24-3  an <compressed natural gas or other> alternative fuel <fuels>:
   24-4                    (A)  by purchase or lease as authorized by law;
   24-5                    (B)  by gift or loan of the equipment or
   24-6  facilities; or
   24-7                    (C)  by gift or loan of the equipment or
   24-8  facilities or other arrangement pursuant to a service contract for
   24-9  the supply of <compressed natural gas or other> alternative fuels.
  24-10              (3)  If such equipment or facilities are donated,
  24-11  loaned, or provided through other arrangement with the supplier of
  24-12  <compressed natural gas or other> alternative fuels, the supplier
  24-13  shall be entitled to recoup its actual cost of donating, loaning,
  24-14  or providing the equipment or facilities through its fuel charges
  24-15  under the supply contract.
  24-16              (4)  An authority may make exceptions to the
  24-17  requirements of this subsection if the authority certifies that:
  24-18                    (A)  the authority's vehicles will be operating
  24-19  primarily in an area in which neither the authority nor a supplier
  24-20  has or can reasonably be expected to establish a central refueling
  24-21  station for <compressed natural gas or other> alternative fuels; or
  24-22                    (B)  the authority is unable to acquire or be
  24-23  provided equipment or refueling facilities necessary to operate
  24-24  vehicles using <compressed natural gas or other> alternative fuels
  24-25  at a projected cost that is reasonably expected to result in no
   25-1  greater net costs than the continued use of conventional
   25-2  <traditional> gasoline or diesel fuels, measured over the expected
   25-3  useful life of the equipment or facilities supplied.
   25-4        (f)(1)  An authority shall achieve the following percentages
   25-5  of vehicles capable of using <compressed natural gas or other>
   25-6  alternative fuels by the times specified:
   25-7                    (A)  the percentage shall be equal to or greater
   25-8  than 30 percent of the number of fleet vehicles operated by
   25-9  September 1, 1994; and
  25-10                    (B)  equal to or greater than 50 percent of the
  25-11  number of fleet vehicles operated by September 1, 1996.
  25-12              (2)  The Texas Natural Resource Conservation Commission
  25-13  <Air Control Board> must review this alternative fuel use program
  25-14  by December 31, 1996, and, if the Texas Natural Resource
  25-15  Conservation Commission <Air Control Board> determines that the
  25-16  program has been effective in reducing total annual emissions from
  25-17  motor vehicles in the area, the authority shall achieve a
  25-18  percentage of fleet vehicles capable of using <compressed natural
  25-19  gas or other> alternative fuels equal to or greater than 90 percent
  25-20  of the number of fleet vehicles operated by September 1, 1998, and
  25-21  thereafter.
  25-22              (3)  The authority must submit to the Texas Natural
  25-23  Resource Conservation Commission <Air Control Board> an annual
  25-24  report by December 31 of each year showing purchases, leases, and
  25-25  conversions of motor vehicles and usage of <compressed natural gas
   26-1  or other> alternative fuels and any other relevant information the
   26-2  Texas Natural Resource Conservation Commission <Air Control Board>
   26-3  may require.
   26-4        (g)  An authority in the development of the <compressed
   26-5  natural gas or other> alternative fuel use program should work with
   26-6  vehicle manufacturers and converters, fuel distributors, and others
   26-7  to delineate the vehicles to be covered, taking into consideration
   26-8  range, specialty uses, fuel availability, vehicle manufacturing and
   26-9  conversion capability, safety, resale values, and other relevant
  26-10  factors.  The authority may meet the percentage requirements of
  26-11  this section through the purchase of new vehicles or the conversion
  26-12  of existing vehicles, in accordance with federal and state
  26-13  requirements and applicable safety laws, to use the alternative
  26-14  fuels.
  26-15        (h)  The authority in purchasing, leasing, maintaining, or
  26-16  converting vehicles for <compressed natural gas or other>
  26-17  alternative fuel <fuels> use shall comply with all applicable
  26-18  safety standards promulgated by the United States Department of
  26-19  Transportation and the Railroad Commission of Texas or their
  26-20  successor agencies.
  26-21        (k)  In this section, "alternative fuel" and "conventional
  26-22  gasoline" have the meanings assigned by Section 382.131, Health and
  26-23  Safety Code.
  26-24        SECTION 14.  Section 6, Article 1118z, Revised Statutes, is
  26-25  amended by amending Subsections (k), (l), and (m) and by adding
   27-1  Subsection (p) to read as follows:
   27-2        (k)(1)  The department may not purchase or lease after
   27-3  September 1, 1991, any motor vehicle unless that vehicle is capable
   27-4  of using an <compressed natural gas or other> alternative fuel
   27-5  <which results in comparably lower emissions of oxides of nitrogen,
   27-6  volatile organic compounds, carbon monoxide, or particulates or any
   27-7  combination thereof>.
   27-8              (2)  The department may acquire or be provided
   27-9  equipment or refueling facilities necessary to operate <such>
  27-10  vehicles using an <compressed natural gas or other> alternative
  27-11  fuel <fuels>:
  27-12                    (A)  by purchase or lease as authorized by law;
  27-13                    (B)  by gift or loan of the equipment or
  27-14  facilities; or
  27-15                    (C)  by gift or loan of the equipment or
  27-16  facilities or other arrangement pursuant to a service contract for
  27-17  the supply of <compressed natural gas or other> alternative fuels.
  27-18              (3)  If such equipment or facilities are donated,
  27-19  loaned, or provided through other arrangement with the supplier of
  27-20  <compressed natural gas or other> alternative fuels, the supplier
  27-21  shall be entitled to recoup its actual cost of donating, loaning,
  27-22  or providing the equipment or facilities through its fuel charges
  27-23  under the supply contract.
  27-24              (4)  A department may make exceptions to the
  27-25  requirements of this subsection if the department certifies that:
   28-1                    (A)  the department's vehicles will be operating
   28-2  primarily in an area in which neither the department nor a supplier
   28-3  has or can reasonably be expected to establish a central refueling
   28-4  station for <compressed natural gas or other> alternative fuels; or
   28-5                    (B)  the department is unable to acquire or be
   28-6  provided equipment or refueling facilities necessary to operate
   28-7  vehicles using <compressed natural gas or other> alternative fuels
   28-8  at a projected cost that is reasonably expected to result in no
   28-9  greater net costs than the continued use of conventional
  28-10  <traditional> gasoline or diesel fuels, measured over the expected
  28-11  useful life of the equipment or facilities supplied.
  28-12        (l)(1)  A department shall achieve the following percentages
  28-13  of vehicles capable of using an <compressed natural gas or other>
  28-14  alternative fuel <fuels> by the times specified:
  28-15                    (A)  the percentage shall be equal to or greater
  28-16  than 30 percent of the number of fleet vehicles operated by
  28-17  September 1, 1994; and
  28-18                    (B)  equal to or greater than 50 percent of the
  28-19  number of fleet vehicles operated by September 1, 1996.
  28-20              (2)  The Texas Natural Resource Conservation Commission
  28-21  <Air Control Board> must review this alternative fuel use program
  28-22  by December 31, 1996, and, if the Texas Natural Resource
  28-23  Conservation Commission <Air Control Board> determines that the
  28-24  program has been effective in reducing total annual emissions from
  28-25  motor vehicles in the area, departments shall achieve a percentage
   29-1  of fleet vehicles capable of using an <compressed natural gas or
   29-2  other> alternative fuel <fuels> equal to or greater than 90 percent
   29-3  of the number of fleet vehicles operated by September 1, 1998, and
   29-4  thereafter.
   29-5              (3)  The department must submit to the Texas Natural
   29-6  Resource Conservation Commission <Air Control Board> an annual
   29-7  report by December 31 of each year showing purchases, leases, and
   29-8  conversions of motor vehicles and usage of <compressed natural gas
   29-9  or other> alternative fuels and any other relevant information the
  29-10  Texas Natural Resource Conservation Commission <Air Control Board>
  29-11  may require.
  29-12        (m)  A department in the development of the <compressed
  29-13  natural gas or other> alternative fuel use program should work with
  29-14  vehicle manufacturers and converters, fuel distributors, and others
  29-15  to delineate the vehicles to be covered, taking into consideration
  29-16  range, specialty uses, fuel availability, vehicle manufacturing and
  29-17  conversion capability, safety, resale values, and other relevant
  29-18  factors.  Such department may meet the percentage requirements of
  29-19  this section through the purchase of new vehicles or the conversion
  29-20  of existing vehicles, in accordance with federal and state
  29-21  requirements and applicable safety laws, to use the alternative
  29-22  fuels.
  29-23        (p)  In this section, "alternative fuel" and "conventional
  29-24  gasoline" have the meanings assigned by Section 382.131, Health and
  29-25  Safety Code.
   30-1        SECTION 15.  Section 3.29, State Purchasing and General
   30-2  Services Act (Article 601b, Vernon's Texas Civil Statutes), as
   30-3  amended by Chapters 20 and 684, Acts of the 73rd Legislature, 1993,
   30-4  is amended to read as follows:
   30-5        Sec. 3.29.  Purchase of Passenger Vehicles.  (a)  A state
   30-6  agency may not purchase or lease a vehicle designed or used
   30-7  primarily for the transportation of persons, including a station
   30-8  wagon, that has a wheel base longer than 113 inches or that has
   30-9  more than 160 SAE net horsepower, except that the vehicle may have
  30-10  a wheel base of up to 116 inches or SAE net horsepower of up to 280
  30-11  if the vehicle will be converted so that it is capable of using
  30-12  compressed natural gas, liquefied natural gas, liquefied petroleum
  30-13  gas, methanol or methanol/gasoline blends of 85 percent or greater,
  30-14  ethanol or ethanol/gasoline blends of 85 percent or greater, or
  30-15  electricity <or another alternative fuel that results in comparably
  30-16  lower emissions of oxides of nitrogen, volatile organic compounds,
  30-17  carbon monoxide, or particulates>.  This exception to the wheel
  30-18  base and horsepower limitations applies to a state agency
  30-19  regardless of the size of the agency's vehicle fleet.  The wheel
  30-20  base and horsepower limitations prescribed by this subsection do
  30-21  not apply to the purchase or lease of a vehicle to be used
  30-22  primarily for criminal law enforcement or a bus, motorcycle,
  30-23  pickup, van, truck, three-wheel vehicle, tractor, or ambulance.
  30-24        (b)(1)  A state agency operating a fleet of more than 15
  30-25  vehicles, excluding law enforcement and emergency vehicles, may not
   31-1  purchase or lease after September 1, 1991, any motor vehicle unless
   31-2  that vehicle is capable of using compressed natural gas, liquefied
   31-3  natural gas, liquefied petroleum gas, methanol or methanol/gasoline
   31-4  blends of 85 percent or greater, ethanol or ethanol/gasoline blends
   31-5  of 85 percent or greater, or electricity <or other alternative
   31-6  fuels which result in comparably lower emissions of oxides of
   31-7  nitrogen, volatile organic compounds, carbon monoxide, or
   31-8  particulates or any combination thereof>.
   31-9              (2)  A state agency may acquire or be provided
  31-10  equipment or refueling facilities necessary to operate <such>
  31-11  vehicles using compressed natural gas, liquefied natural gas,
  31-12  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  31-13  percent or greater, ethanol or ethanol/gasoline blends of 85
  31-14  percent or greater, or electricity <or other alternative fuels>:
  31-15                    (A)  by purchase or lease as authorized by law;
  31-16                    (B)  by gift or loan of the equipment or
  31-17  facilities; or
  31-18                    (C)  by gift or loan of the equipment or
  31-19  facilities or other arrangement pursuant to a service contract for
  31-20  the supply of compressed natural gas, liquefied natural gas,
  31-21  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  31-22  percent or greater, ethanol or ethanol/gasoline blends of 85
  31-23  percent or greater, or electricity <or other alternative fuels>.
  31-24              (3)  If such equipment or facilities are donated,
  31-25  loaned, or provided through other arrangement with the supplier of
   32-1  compressed natural gas, liquefied natural gas, liquefied petroleum
   32-2  gas, methanol or methanol/gasoline blends of 85 percent or greater,
   32-3  ethanol or ethanol/gasoline blends of 85 percent or greater, or
   32-4  electricity <or other alternative fuels>, the supplier shall be
   32-5  entitled to recoup its actual cost of donating, loaning, or
   32-6  providing the equipment or facilities through its fuel charges
   32-7  under the supply contract.
   32-8              (4)  The commission may waive the requirements of this
   32-9  subsection for any state agency upon receipt of certification
  32-10  supported by evidence acceptable to the commission that:
  32-11                    (A)  the agency's vehicles will be operating
  32-12  primarily in an area in which neither the agency nor a supplier has
  32-13  or can reasonably be expected to establish adequate <a central>
  32-14  refueling <station> for compressed natural gas, liquefied natural
  32-15  gas, liquefied petroleum gas, methanol or methanol/gasoline blends
  32-16  of 85 percent or greater, ethanol or ethanol/gasoline blends of 85
  32-17  percent or greater, or electricity <or other alternative fuels>; or
  32-18                    (B)  the agency is unable to acquire or be
  32-19  provided equipment or refueling facilities necessary to operate
  32-20  vehicles using compressed natural gas, liquefied natural gas,
  32-21  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  32-22  percent or greater, ethanol or ethanol/gasoline blends of 85
  32-23  percent or greater, or electricity <or other alternative fuels> at
  32-24  a projected cost that is reasonably expected to result in no
  32-25  greater net costs than the continued use of conventional
   33-1  <traditional> gasoline or diesel fuels, measured over the expected
   33-2  useful life of the equipment or facilities supplied.
   33-3        (c)(1)  Any state agency which operates a fleet of more than
   33-4  15 motor vehicles, excluding law enforcement and emergency
   33-5  vehicles, shall achieve the following percentages of vehicles
   33-6  capable of using compressed natural gas, liquefied natural gas,
   33-7  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
   33-8  percent or greater, ethanol or ethanol/gasoline blends of 85
   33-9  percent or greater, or electricity <or other alternative fuels> by
  33-10  the times specified:
  33-11                    (A)  the percentage shall be equal to or greater
  33-12  than 30 percent of the number of fleet vehicles operated by
  33-13  September 1, 1994; and
  33-14                    (B)  equal to or greater than 50 percent of the
  33-15  number of fleet vehicles operated by September 1, 1996.
  33-16              (2)  The Texas Natural Resource Conservation Commission
  33-17  <Air Control Board> must review this <alternative fuel use> program
  33-18  by December 31, 1996, and, if the Texas Natural Resource
  33-19  Conservation Commission <Air Control Board> determines that the
  33-20  program has been effective in reducing total annual emissions from
  33-21  motor vehicles in the area, state agencies operating fleets of more
  33-22  than 15 motor vehicles shall achieve a percentage of fleet vehicles
  33-23  capable of using compressed natural gas, liquefied natural gas,
  33-24  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  33-25  percent or greater, ethanol or ethanol/gasoline blends of 85
   34-1  percent or greater, or electricity <or other alternative fuels>
   34-2  equal to or greater than 90 percent of the number of fleet vehicles
   34-3  operated by September 1, 1998, and thereafter.
   34-4              (3)  The commission shall support the Texas Natural
   34-5  Resource Conservation Commission <Air Control Board> in collecting
   34-6  reasonable information needed to determine the air quality benefits
   34-7  from use of compressed natural gas, liquefied natural gas,
   34-8  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
   34-9  percent or greater, ethanol or ethanol/gasoline blends of 85
  34-10  percent or greater, or electricity <alternative fuels> at affected
  34-11  agencies.
  34-12              (4)  Each state agency in its annual financial report
  34-13  to the legislature must show its progress in achieving these
  34-14  percentage requirements by itemizing purchases, leases, and
  34-15  conversions of motor vehicles and usage of compressed natural gas,
  34-16  liquefied natural gas, liquefied petroleum gas, methanol or
  34-17  methanol/gasoline blends of 85 percent or greater, ethanol or
  34-18  ethanol/gasoline blends of 85 percent or greater, or electricity
  34-19  <or other alternative fuels>.
  34-20        (d)  The commission, in the development of the use of
  34-21  compressed natural gas, liquefied natural gas, liquefied petroleum
  34-22  gas, methanol or methanol/gasoline blends of 85 percent or greater,
  34-23  ethanol or ethanol/gasoline blends of 85 percent or greater, or
  34-24  electricity <or other alternative fuel use program>, should work
  34-25  with state agency fleet operators, vehicle manufacturers and
   35-1  converters, fuel distributors, and others to delineate the vehicles
   35-2  to be covered, taking into consideration range, specialty uses,
   35-3  fuel availability, vehicle manufacturing and conversion capability,
   35-4  safety, resale values, and other relevant factors.  State agencies
   35-5  may meet the percentage requirements of this section through
   35-6  purchase of new vehicles or the conversion of existing vehicles, in
   35-7  accordance with federal and state requirements and applicable
   35-8  safety laws<, to use the alternative fuels>.
   35-9        (e)  The commission may reduce any percentage specified or
  35-10  waive the requirements of Subsection (c) of this section for any
  35-11  state agency upon receipt of certification supported by evidence
  35-12  acceptable to the commission that:
  35-13              (1)  the agency's vehicles will be operating primarily
  35-14  in an area in which neither the agency nor a supplier has or can
  35-15  reasonably be expected to establish adequate <a central> refueling
  35-16  <station> for compressed natural gas, liquefied natural gas,
  35-17  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  35-18  percent or greater, ethanol or ethanol/gasoline blends of 85
  35-19  percent or greater, or electricity <or other alternative fuels>; or
  35-20              (2)  the agency is unable to acquire or be provided
  35-21  equipment or refueling facilities necessary to operate vehicles
  35-22  using compressed natural gas, liquefied natural gas, liquefied
  35-23  petroleum gas, methanol or methanol/gasoline blends of 85 percent
  35-24  or greater, ethanol or ethanol/gasoline blends of 85 percent or
  35-25  greater, or electricity <or other alternative fuels> at a projected
   36-1  cost that is reasonably expected to result in no greater net costs
   36-2  than the continued use of conventional <traditional> gasoline or
   36-3  diesel fuels, measured over the expected useful life of the
   36-4  equipment or facilities supplied.
   36-5        (f)  The commission in purchasing, leasing, maintaining, or
   36-6  converting vehicles for compressed natural gas, liquefied natural
   36-7  gas, liquefied petroleum gas, methanol or methanol/gasoline blends
   36-8  of 85 percent or greater, ethanol or ethanol/gasoline blends of 85
   36-9  percent or greater, or electricity <or other alternative fuels> use
  36-10  shall comply with all applicable safety standards promulgated by
  36-11  the United States Department of Transportation and the Railroad
  36-12  Commission of Texas or their successor agencies.
  36-13        (g)  In this section, a vehicle is considered to be capable
  36-14  of using compressed natural gas, liquefied natural gas, liquefied
  36-15  petroleum gas, methanol or methanol/gasoline blends of 85 percent
  36-16  or greater, ethanol or ethanol/gasoline blends of 85 percent or
  36-17  greater, or electricity <or other alternative fuels> if the vehicle
  36-18  is capable of using compressed natural gas, liquefied natural gas,
  36-19  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  36-20  percent or greater, ethanol or ethanol/gasoline blends of 85
  36-21  percent or greater, or electricity <or other alternative fuels>
  36-22  either in its original equipment engine or in an engine that has
  36-23  been converted to use compressed natural gas, liquefied natural
  36-24  gas, liquefied petroleum gas, methanol or methanol/gasoline blends
  36-25  of 85 percent or greater, ethanol or ethanol/gasoline blends of 85
   37-1  percent or greater, or electricity <or other alternative fuels>
   37-2  after September 1, 1991, unless the time for compliance is extended
   37-3  pursuant to Subsection (h) of this section.
   37-4        (h)  The commission may extend the date by which a vehicle
   37-5  powered by an engine fueled by conventional <a traditional>
   37-6  gasoline or diesel fuel <engine> shall be capable of using
   37-7  compressed natural gas, liquefied natural gas, liquefied petroleum
   37-8  gas, methanol or methanol/gasoline blends of 85 percent or greater,
   37-9  ethanol or ethanol/gasoline blends of 85 percent or greater, or
  37-10  electricity <or other alternative fuels> as required under this
  37-11  section for one or more periods of 90 days, but not beyond
  37-12  September 1, 1992, if it finds a lack of ability to acquire such
  37-13  vehicles with original <alternative fuels> equipment, to acquire
  37-14  such vehicles which are able to be converted, or to convert such
  37-15  vehicles to use compressed natural gas, liquefied natural gas,
  37-16  liquefied petroleum gas, methanol or methanol/gasoline blends of 85
  37-17  percent or greater, ethanol or ethanol/gasoline blends of 85
  37-18  percent or greater, or electricity <or other alternative fuels>.
  37-19        (i)  The provisions of this section do not apply to vehicles
  37-20  which are acquired by the Texas Transportation Institute for the
  37-21  purpose of performing crash tests and related research.
  37-22        (j)  In this section, "conventional gasoline" has the meaning
  37-23  assigned by Section 382.131, Health and Safety Code.
  37-24        SECTION 16.  Subsection (b), Section 113.286, Natural
  37-25  Resources Code, is amended to read as follows:
   38-1        (b)  To the extent permitted by federal law or regulations,
   38-2  the council may use the money in the fund only to:
   38-3              (1)  make loans or grants under this subchapter;
   38-4              (2)  finance activities supporting or encouraging the
   38-5  use of compressed natural gas, liquefied natural gas, liquefied
   38-6  petroleum gas, methanol or methanol/gasoline blends of 85 percent
   38-7  or greater, ethanol or ethanol/gasoline blends of 85 percent or
   38-8  greater, or electricity <alternative fuels>; or
   38-9              (3)  pay the costs of administering this subchapter.
  38-10        SECTION 17.  Section 113.287, Natural Resources Code, is
  38-11  amended to read as follows:
  38-12        Sec. 113.287.  FUELS CONVERSION LOAN PROGRAM.  (a)  The
  38-13  council may make loans, grants, or other distributions to eligible
  38-14  borrowers to fund conversion or infrastructure projects to promote
  38-15  the use of environmentally beneficial <alternative> fuels or for
  38-16  other purposes, subject to applicable regulations or approval of
  38-17  the United States Department of Energy.
  38-18        (b)  The council shall adopt rules necessary to administer
  38-19  the fuels conversion loan program.
  38-20        (c)  The council shall adopt rules under this section in
  38-21  accordance with applicable rules and regulations of the United
  38-22  States Department of Energy.
  38-23        (d)  The council by rule shall determine which individuals
  38-24  and businesses are eligible for a loan, grant, or other
  38-25  disbursement under this section.  The rules shall provide for
   39-1  historically underutilized businesses, individuals with low
   39-2  incomes, institutions of higher education, and health care
   39-3  facilities to be eligible for loans, grants, or other disbursements
   39-4  to undertake conversion and infrastructure projects for
   39-5  <alternative> fuels.
   39-6        (e)  A state agency, county, municipality, school district,
   39-7  or mass transit authority or department is eligible to receive a
   39-8  loan, grant, or other disbursement under this subchapter to carry
   39-9  out an eligible conversion or infrastructure project regarding LPG
  39-10  or another environmentally beneficial <alternative> fuel to comply
  39-11  with <alternative> fuel requirements provided by or by rules
  39-12  adopted under:
  39-13              (1)  Subchapter F, Chapter 382, Health and Safety Code;
  39-14              (2)  Subchapter F, Chapter 21, Education Code;
  39-15              (3)  Sections 3.03, 3.29, and 14.03, State Purchasing
  39-16  and General Services Act (Article 601b, Vernon's Texas Civil
  39-17  Statutes);
  39-18              (4)  Sections 14(c)-(g), Chapter 141, Acts of the 63rd
  39-19  Legislature, Regular Session, 1973 (Article 1118x, Vernon's Texas
  39-20  Civil Statutes);
  39-21              (5)  Sections 20(e)-(i), Chapter 683, Acts of the 66th
  39-22  Legislature, 1979 (Article 1118y, Vernon's Texas Civil Statutes);
  39-23  and
  39-24              (6)  Sections 6(k)-(o), Article 1118z, Revised
  39-25  Statutes.
   40-1        (f)  The council may make a loan to finance the construction
   40-2  of an infrastructure refueling facility only if the facility is to
   40-3  serve and be accessible to the general public to the extent
   40-4  practicable.
   40-5        SECTION 18.  It is the intent of the legislature that the
   40-6  program authorized by Section 9C, Texas Public Finance Authority
   40-7  Act (Article 601d, Vernon's Texas Civil Statutes), or any
   40-8  succeeding legislation, authorizes the Alternative Fuels Council to
   40-9  certify only those projects that are associated with the following
  40-10  fuels:  compressed natural gas; liquefied natural gas; liquefied
  40-11  petroleum gas; electricity; or methanol, ethanol, or other alcohols
  40-12  including any mixture thereof containing 85 percent or more by
  40-13  volume of such alcohol with gasoline or other fuels.
  40-14        SECTION 19.  The Texas Natural Resource Conservation
  40-15  Commission shall adopt rules to implement Section 382.142, Health
  40-16  and Safety Code, as added by this Act, not later than September 1,
  40-17  1997.
  40-18        SECTION 20.  This Act takes effect September 1, 1995.
  40-19        SECTION 21.  The importance of this legislation and the
  40-20  crowded condition of the calendars in both houses create an
  40-21  emergency and an imperative public necessity that the
  40-22  constitutional rule requiring bills to be read on three several
  40-23  days in each house be suspended, and this rule is hereby suspended.