HBA-LJP, JLV H.B. 802 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 802 By: Hope Ways & Means 3/16/2001 Introduced BACKGROUND AND PURPOSE The Federal Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to establish the maximum allowable concentrations of pollutants that endanger human health, harm the environment, and cause property damage. Areas where pollution exceeds the EPA standards may be designated as nonattainment and maintenance areas. According to the 2000 report "Clean Air: Texas' Response to Federal Mandates" of the House Research Organization, Texas has four specific nonattainment areas: Houston-Galveston, Dallas-Forth Worth, Beaumont-Port Arthur, and El Paso. Because mobile sources such as motor vehicles contribute to air pollution, the report recommends financial incentives to encourage better use of alternative fuel vehicles to help eliminate Texas' nonattainment and maintenance areas. Clean air motor vehicles are fueled by a combination of gasoline or diesel and electricity and have achieved an overall lower emission level than traditional vehicles. House Bill 802 provides tax credits to people who use clean-air motor vehicles and provides other incentives for the use of the clean-air vehicle. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Transportation in SECTION 7 (Section 548.5035, Transportation Code) of this bill. ANALYSIS House Bill 802 amends the Tax Code to entitle purchasers to receive a tax credit on the sale or use of a new clean-air motor vehicle. The bill provides that the amount of credit the purchaser receives is equal to the lesser of $2,000 or the total amount of the tax imposed on the sale or use of the motor vehicle. The bill provides that this provision expires September 30, 2005 (Sec. 152.094). The bill sets forth provisions with regard to the eligibility of a corporation to receive a tax credit for the retail sale of a new clean-air motor vehicle, the limitations of credit the corporation is authorized to receive, and the fiscal tax period under which the corporation is required to claim the tax credit (Secs. 171.852171.855). The bill prohibits a corporation from conveying, assigning, or transferring the credit to another entity unless all the assets of the corporation are conveyed, assigned, or transferred in the same transaction (Sec. 171.856). The bill provides that this provision expires December 31, 2005 (Sec. 171.857). House Bill 802 amends the Transportation Code to set forth the registration fee requirements for clean-air motor vehicles (Sec. 502.1615). The bill requires the Texas Department of Transportation (department) to issue specially designed license plates for clean-air motor vehicles, or a registration insignia and registration receipts to eligible persons. The bill requires that the owner of the vehicle return the special license plates to the department if the owner disposes of the vehicle before the license plates expire (Sec. 502.2985). The bill provides that a person operating a clean-air motor vehicle with specialized license plates may drive in a high occupancy vehicle lane without the minimum occupancy requirement (Sec. 545.424). The bill provides for an initial four year inspection for clean-air motor vehicles sold in Texas and provides that current federal law regulating motor vehicle emission inspection is not affected by the above (Sec. 548.1025). The bill requires the department by rule to set the fee for the inspection of a clean-air motor vehicle on or before September 1 of each year which is based on the cost of producing certificates, providing inspections, and administering the program. The bill requires the department by rule to require an inspection station to make an advance payment of a portion of the fee for a certificate, but prohibits additional payment to be required of the station for the certificate. The bill authorizes the inspection station to waive the fee due from the owner of the vehicle inspected. A refund for an unissued certificate is required to be made in accordance with the provisions of inspection and certification fees (Sec. 548.5035). The above provisions expire September 1, 2005 EFFECTIVE DATE September 1, 2001. The tax credit for the sale of clean-air motor vehicles takes effect January 1, 2002.