ACG S.B. 681 75(R)BILL ANALYSIS ENVIRONMENTAL REGULATION S.B. 681 By: Armbrister (Stiles) 4-29-97 Committee Report (Unamended) BACKGROUND The Texas Alternative Fuels Program (TAFP) was enacted in 1989, and amended in 1993 and 1995. TAFP requires certain state agencies, local mass transit authorities and private fleets to convert specified percentages of their fleet vehicles to run on natural gas and other approved alternative fuels by set compliance deadlines. TAFP was originally based on the use of certain fuels rather than emission reduction. In 1990, Congress passed the Clean Air Act Amendments, creating a Federal Fleet Program for areas judged by the Environmental Protection Agency as serious, severe and extreme non-attainment areas. Under the Federal Program, private and local government fleets in these areas may also fall under fleet conversion requirements. The Federal Program is emissions based and fuel neutral. The Federal Program also provides the right for states to opt-out and create their own programs, as long as the state program achieves emission equivalency with the Federal Program. Texas made this election and has had its own program since 1989. In the 1995 session, Senate Bill 200 amended our program to make it emissions based and fuel neutral. PURPOSE This bill modifies requirements for private and public fleets and makes other changes to the Texas Alternative Fuel Program. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 382.131, Health and Safety Code, by amending Subdivision (7) and adding Subdivision (10). (7) Changes language to statutory code citations rather than legislative session citations; clarifies exemption for vehicles garaged at home; deletes existing provision regarding vehicles garaged at home; provides that urban buses are subject to fleet requirements; exempts vehicles used for maintenance or repair of underground mass transit facilities required by federal law or regulation to operate on diesel fuel. (10) Provides definition of "urban bus." SECTION 2. Amends Section 382.132, Health and Safety Code. Section 382.132.Clarifies that metropolitan areas affected by the Act are those deemed serious, severe, or extreme nonattainment areas; allows the TNRCC to establish clean fuel programs for covered fleets in counties or municipalities not required to have one, if the county or municipality makes a formal request for such a program. SECTION 3. Amends Subsection (b) of Section 382.133, Health and Safety Code. (b) Rules must require mass transit authorities to have 50 percent of their fleet capable of using alternative fuels; authorizes certain vehicles acquired prior to September 1, 1999, to be counted toward compliance with fleet percentage requirements if the vehicles are capable of operating on a fuel or power source recognized by the State of Texas fleet or mass transit fuel program prior to September 1, 1995, and fall within the specified categories of emission standards; authorizes the percentage requirement of this section to be met, in whole or in part, through the purchase, lease, or other acquisition of program compliance credits pursuant to Section 382.142, Health and Safety Code, or through the purchase, lease, or other acquisition of credits through the Texas Mobile Emissions Reduction Credit (MERC) Program; deletes text outlining an alternative fuel schedule for certain vehicles under this section. SECTION 4. Amends Section 382.134, Health and Safety Code, by amending subsections (c) and (d) and adding subsection (f). (c) Deletes language requiring TNRCC rules to require at least 20 percent of the fleet vehicles in local government or private fleets to operate on alternative fuels by September 1, 2000; provides percentage requirements for light duty and heavy duty vehicles. (d) Prohibits the TNRCC from requiring a local government or private fleet to purchase an alternative fuel fleet vehicle if the person or government maintains 70 percent or more alternative fuel vehicles in their fleet. (f) Authorizes the requirements imposed under this section to be met by the conversion of currently owned or newly purchased gasoline-fueled or diesel-fueled vehicles to operate on an alternative fuel; provides that nothing in this section shall be construed to require conversion. SECTION 5. Amends Section 382.136 (a), Health and Safety Code. (a) Authorizes the TNRCC to make an exception to rules adopted under Section 382.133 and 382.134 if an alternative fuel that meets normal requirements of the business of the affected entity is not available in the area in which the vehicles are operated; deletes language comparing cost to vehicles operating on reformulated gasoline and diesel; provides that percentage requirements may be met by the conversion of vehicles or purchase of original equipment vehicles certified by the EPA as clean fuel vehicles. SECTION 6. Amends Section 382.142 (b) and ok Subsections (c) through (f), Health and Safety Code. (b) Provides that the purchase, lease or acquisition of vehicles can meet program compliance credits. (c) Redesignates existing section as (c). (d) Redesignates existing section as (d). (e) Provides a new standard for the grandfather provision to allow persons who acquired alternative fuel fleet vehicles prior to September 1, 1995 to be counted toward the percentage requirements of Section 382.134. (f) Prohibits this section from applying to all vehicles purchased, leased, or otherwise acquired pursuant to Section 2158.001(a), Government Code, and deletes other nonapplicable sections. SECTION 7. Amends Section 382.143(b), Health and Safety Code. (b) Deletes text requiring this section to comply with the EPA's minimum requirements for an approvable Mobil Emissions Reduction Program; includes "purchased" or "leased" vehicles to be counted toward mobile emissions credits; authorizes all mobile emissions reduction credits generated in accordance with this section to be sold, traded, or banked for later use among fleet vehicle owners or other mobile or stationary sources of emissions within the same nonattainment area without discount of depreciation of such credits. SECTION 8. Amends Section 451.301(a) and (b) and adds Subsections (d) and (e), Transportation Code. (a) Excludes law enforcement and any emergency vehicles from the purchase requirements of governing boards. (b) Provides an exception, contained in Subsection (d), to percentage requirement deadline; provides a definition of "fleet vehicle" by reference to Section 382.131(7), Health and Safety Code. (d) Authorizes vehicles converted, purchased, leased, or otherwise acquired prior to September 1, 1999, to be counted toward compliance with fleet percentage requirements if the vehicles are capable of operating on a fuel or power source recognized by any State of Texas fleet or mass transit fuel program prior to September 1, 1995, and meet specified emission standards for vehicle weight classes. (e) Authorizes the percentage requirements to be met through the purchase, lease, or other acquisition of program compliance credits pursuant to Section 382.143, Health and Safety Code, or the Texas Mobile Emissions Reduction Credit Program. SECTION 9. Amends Subsection (c) of Section 451.302, Transportation Code. (c) Provides that if the authority is unable to acquire or be provided vehicles certified as lowemission vehicles that meet the normal requirements of the authority due to unavailability for purchase from an original equipment manufacturer or as a conversion, this must be stated on the certification. SECTION 10. Amends Section 452.251, Transportation Code, by amending subsections (a) and (b) and adding subsections (d) and (e). (a) Excludes law enforcement and any emergency vehicles from requirements imposed on an authority to purchase or lease a motor vehicle not capable of using an alternative fuel resulting in comparably lower emissions. (b) Provides an exception to percentage requirement deadline; includes definition of "fleet vehicle" by reference to Section 382.131(7), Health and Safety Code. (d) Authorizes vehicles converted, purchased, leased, or otherwise acquired prior to September 1, 1999, to be counted toward compliance with the fleet percentage requirement of Subsection (b) if the vehicles are capable of operating on a fuel or power source recognized by any State of Texas fleet or mass transit fuel program prior to September 1, 1995, and meeting the emission standards for the specified weight classes. (e) Authorizes the percentage requirements of Subsection (b) to be met through the purchase, lease, or other acquisition of program compliance credits pursuant to Section 382.143, Health and Safety Code, or the Texas Mobile Emissions Reduction Credit Program. SECTION 11. Amends Subsection (b) of Section 452.252, Transportation Code. (b) Provides that if the authority is unable to acquire or be provided low-emission vehicles that meet the normal requirements of the authority due to unavailability for purchase from an original equipment manufacturer or as a conversion, it must be stated on the certificate. SECTION 12. Amends Section 453.251(a) and (b) and adds Subsections (d) and (e), Transportation Code. (a) Excludes law enforcement and any emergency vehicles from prohibition on transit authority to purchase or lease a motor vehicle not capable of using an alternative fuel resulting in comparably lower emissions. (b) Provides an exception, contained in Subsection (d), to percentage requirement deadline. Includes definition of "fleet vehicle" by reference to Section 382.131(7), Health and Safety Code. (d) Authorizes vehicles converted, purchased, leased, or otherwise acquired prior to September 1, 1999, to be counted toward compliance with the fleet percentage requirement of Subsection (b) if the vehicles are capable of operating on a fuel or power source recognized by any State of Texas fleet or mass transit fuel program prior to September 1, 1995, and meet the emission standards for the specified vehicle weight classes. (e) Authorizes the percentage requirements of Subsection (b) to be met through the purchase, lease, or other acquisition of program compliance credits pursuant to Section 382.143, Health and Safety Code, or the Texas Mobile Emissions Reduction Credit Program, Section 382.143, Health and Safety Code. SECTION 13. Amends Subsection (b) of Section 453.252, Transportation Code. (b) Provides that if the transit department is unable to acquire or be provided vehicles certified as low-emission vehicles that meet the normal requirements of the authority due to unavailability for purchase from an original equipment manufacturer or as a conversion, it must be stated on the certification. SECTION 14. Effective Date: September 1, 1997. SECTION 15. Emergency Clause.