By Wolens H.B. No. 2841 77R9252 MI-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the Texas emissions reduction plan; providing a 1-3 penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subtitle C, Title 5, Health and Safety Code, is 1-6 amended by adding Chapter 386 to read as follows: 1-7 CHAPTER 386. TEXAS EMISSIONS REDUCTION PLAN 1-8 SUBCHAPTER A. GENERAL PROVISIONS 1-9 Sec. 386.001. DEFINITIONS. In this chapter: 1-10 (1) "Advisory board" means the Texas Emissions 1-11 Reduction Plan Advisory Board. 1-12 (2) "Alternative fuel" includes: 1-13 (A) electricity; 1-14 (B) compressed natural gas; 1-15 (C) liquefied hydrogen; 1-16 (D) methanol; 1-17 (E) biodiesel fuel; 1-18 (F) solar power; and 1-19 (G) ethanol. 1-20 (3) "Alternative fuel vehicle" means a motor vehicle 1-21 powered: 1-22 (A) solely by an alternative fuel; or 1-23 (B) by both gasoline, diesel, or other 1-24 conventional fuel and an alternative fuel, if the owner of the 2-1 vehicle certifies to the commission that the vehicle is powered by 2-2 the alternative fuel for 75 percent of the vehicle miles traveled 2-3 each year. 2-4 (4) "Commission" means the Texas Natural Resource 2-5 Conservation Commission. 2-6 (5) "Fund" means the Texas emissions reduction plan 2-7 fund. 2-8 (6) "Incremental cost" means the cost of an 2-9 applicant's project less a baseline cost that would otherwise be 2-10 incurred by an applicant in the normal course of business. 2-11 Incremental costs may include added lease or fuel costs as well as 2-12 additional capital costs. 2-13 (7) "Near nonattainment area" means an area of the 2-14 state designated by the commission as having reasonable potential 2-15 to become a nonattainment area within a stated time. 2-16 (8) "Nonattainment area" means an area so designated 2-17 under Section 107(d) of the federal Clean Air Act (42 U.S.C. 2-18 Section 7407). 2-19 (9) "Plan" means the Texas emissions reduction plan. 2-20 (Sections 386.002-386.050 reserved for expansion 2-21 SUBCHAPTER B. TEXAS EMISSIONS REDUCTION PLAN 2-22 Sec. 386.051. TEXAS EMISSIONS REDUCTION PLAN. (a) The 2-23 commission shall establish and administer the Texas emissions 2-24 reduction plan in accordance with this chapter. 2-25 (b) Under the plan, the commission shall provide grants or 2-26 other funding for: 2-27 (1) the diesel emissions reduction incentive program 3-1 established under Subchapter C; 3-2 (2) the low-emissions vehicle purchase or lease 3-3 incentive program established under Subchapter D; 3-4 (3) the alternative fuel incentive program; 3-5 (4) the energy efficient appliance program and sales 3-6 tax exemption established under Sections 151.355-151.357, Tax Code; 3-7 and 3-8 (5) the new technology development and research 3-9 program established under Subchapter E. 3-10 (c) A project begun before September 1, 2001, is not 3-11 eligible for a grant or other funding under the plan. 3-12 Sec. 386.052. COMMISSION DUTIES. (a) In administering the 3-13 plan established under this chapter and in accordance with the 3-14 requirements of this chapter, the commission shall: 3-15 (1) manage plan funds and oversee the plan; 3-16 (2) produce guidelines, protocols, and criteria for 3-17 eligible projects; 3-18 (3) develop methodologies for evaluating project 3-19 cost-effectiveness; 3-20 (4) prepare reports regarding the progress and 3-21 effectiveness of the plan; and 3-22 (5) take all appropriate and necessary action to 3-23 ensure that emissions reductions achieved through the plan are 3-24 credited by the United States Environmental Protection Agency to 3-25 the appropriate emissions reduction objectives in the state 3-26 implementation plan. 3-27 (b) Appropriate commission objectives for the 4-1 Houston-Galveston and Dallas-Fort Worth state implementation plans 4-2 shall first ensure that affected entities are able to achieve the 4-3 required emissions reductions to comply with the alternative plan 4-4 requirements to meet the construction shift and the accelerated 4-5 purchase rules of the respective implementation plans. 4-6 Sec. 386.053. GUIDELINES AND CRITERIA. (a) The commission 4-7 shall adopt grant guidelines and criteria consistent with the 4-8 requirements of this chapter. The commission shall consider 4-9 examples of similar programs in other states during the development 4-10 of guidelines and criteria. 4-11 (b) Guidelines must include protocols to calculate project 4-12 cost-effectiveness and safeguards to ensure that funded projects 4-13 generate surplus emissions reductions. 4-14 (c) The commission shall make draft guidelines and criteria 4-15 available to the public before the 45th day preceding the date of 4-16 final adoption and shall hold at least one public meeting to 4-17 consider public comments on the draft guidelines and criteria 4-18 before final adoption. 4-19 (d) The commission may propose revisions to the guidelines 4-20 and criteria adopted under this section as necessary to improve the 4-21 ability of the plan to achieve its goals. Revisions may include 4-22 adding new eligible categories, as appropriate, for the diesel 4-23 emissions reduction incentive program established under Subchapter 4-24 C. The commission shall make a proposed revision available to the 4-25 public before the 45th day preceding the date of final adoption of 4-26 the revision and shall hold at least one public meeting to consider 4-27 public comments on the proposed revision before final adoption. 5-1 (e) The rulemaking requirements of Chapter 2001, Government 5-2 Code, do not apply to the adoption or revision of guidelines and 5-3 criteria under this section. 5-4 Sec. 386.054. MONITORING PROCEDURES. (a) The commission 5-5 shall develop procedures for monitoring whether the emissions 5-6 reductions projected for projects awarded grants under this chapter 5-7 are actually achieved. Monitoring procedures may include project 5-8 audits and contract requirements that the grant recipient provide 5-9 information annually about the project. If the commission requires 5-10 annual reports, it shall keep to a minimum the amount of 5-11 information required from a recipient and shall keep the report 5-12 format simple and convenient. 5-13 (b) Monitoring and auditing procedures must be sufficient to 5-14 enable emissions reductions generated by funded projects to be 5-15 fully credited to air quality plans. 5-16 (c) The commission may revise monitoring and audit 5-17 procedures from time to time as necessary or appropriate to enhance 5-18 the effectiveness of the plan. 5-19 Sec. 386.055. STAFF AND TECHNICAL SUPPORT. The commission 5-20 shall provide staff or technical support as needed within available 5-21 budgetary resources to assist projects awarded grants or other 5-22 funding under this chapter. 5-23 Sec. 386.056. REPORTING REQUIREMENTS. (a) The commission, 5-24 in consultation with the advisory board, annually shall review 5-25 programs established under the plan and shall publish a report that 5-26 describes each project funded under the plan, the amount granted 5-27 for the project, the emissions reductions attributable to the 6-1 project, and the cost-effectiveness of the project. 6-2 (b) Not later than December 1, 2002, and not later than 6-3 December 1 of each subsequent second year through December 1, 2008, 6-4 the commission shall publish and submit to the legislature a 6-5 biennial plan report. The report must include the information 6-6 included in the annual reports prepared under Subsection (a) and 6-7 specific information for individual programs as required by 6-8 Subsections (c) and (d). 6-9 (c) For projects funded as part of the fueling 6-10 infrastructure demonstration program under Subchapter C, the report 6-11 must: 6-12 (1) discuss and evaluate: 6-13 (A) the fueling infrastructure facilities funded 6-14 under that subchapter; 6-15 (B) the degree to which the funded facilities 6-16 are supporting covered vehicle projects; 6-17 (C) the amount of fuel or electricity dispensed 6-18 for each facility; and 6-19 (D) associated emissions reductions and 6-20 cost-effectiveness; and 6-21 (2) make a finding regarding the need for additional 6-22 appropriations from the fund to improve the ability of the program 6-23 to achieve its goals. 6-24 (d) For projects funded under the new technology development 6-25 and research program under Subchapter E, the report must describe 6-26 the technical objectives and accomplishments of the project and the 6-27 progress of the project technology toward commercialization. 7-1 (e) The report must: 7-2 (1) account for money received, money disbursed as 7-3 grants, money reserved for grants based on project approvals, and 7-4 any recommended transfer of money between allocations and must 7-5 estimate future demand for grant funds under the program; 7-6 (2) describe the overall effectiveness of the plan in 7-7 delivering the emissions reductions required by air quality plans, 7-8 including rate-of-progress plans and milestone and conformity 7-9 tests; 7-10 (3) evaluate the effectiveness of the plan in 7-11 soliciting and evaluating project applications, providing awards in 7-12 a timely manner, and monitoring project implementation; and 7-13 (4) describe adjustments made to project selection 7-14 criteria and recommend any further needed changes or adjustments to 7-15 the grant program, including changes in grant award criteria, 7-16 administrative procedures, or statutory provisions that would 7-17 enhance the plan's effectiveness and efficiency. 7-18 (f) The commission shall request public comment and hold 7-19 public meetings on each draft biennial report and, in producing a 7-20 final biennial report, shall consider and respond to all 7-21 significant comments received. 7-22 Sec. 386.057. TEXAS EMISSIONS REDUCTION PLAN ADVISORY BOARD. 7-23 (a) The Texas Emissions Reduction Plan Advisory Board consists of 7-24 13 members, 5 of whom shall be appointed by the governor, 4 by the 7-25 lieutenant governor, and 4 by the speaker of the house of 7-26 representatives. 7-27 (b) Appointments to the advisory board must include 8-1 representatives from: 8-2 (1) the commission; 8-3 (2) the General Land Office; 8-4 (3) the agriculture industry; 8-5 (4) the trucking industry; 8-6 (5) the automobile industry; 8-7 (6) the construction industry; 8-8 (7) the environmental community; 8-9 (8) the marine or port industry; 8-10 (9) regional transportation; 8-11 (10) the senate; 8-12 (11) the house of representatives; 8-13 (12) the Texas Council on Environmental Technology; 8-14 and 8-15 (13) local government. 8-16 (c) Members of the advisory board serve staggered two-year 8-17 terms. The terms of six members expire February 1 of each 8-18 even-numbered year. The terms of seven members expire February 1 8-19 of each odd-numbered year. A member may be reappointed to a 8-20 subsequent term. 8-21 (d) The advisory board annually shall elect a presiding 8-22 officer. 8-23 (e) The advisory board shall review the first biennial 8-24 report prepared by the commission under Section 386.056 on the 8-25 implementation of the plan, hold a public hearing on the need for a 8-26 continuing plan, and prepare and submit a report to the governor 8-27 and the legislature, on or before September 1, 2002, on the 9-1 desirability of a continuing plan, similar to the plan established 9-2 under this chapter, that will significantly contribute toward 9-3 attaining air quality standards in Texas. In the report, the 9-4 advisory board shall recommend changes to revenue sources for 9-5 funding financial incentives and any legislative or budget action 9-6 needed to implement a continuing plan. 9-7 Sec. 386.058. EXPIRATION OF CONSTRUCTION SHIFT. On the date 9-8 the commission certifies the achievement of sufficient emissions 9-9 reductions in nonattainment areas and near nonattainment areas of 9-10 this state, that part of the state implementation plan that 9-11 restricts the hours during which construction equipment may be 9-12 operated in nonattainment or near nonattainment areas expires. 9-13 (Sections 386.059-386.100 reserved for expansion 9-14 SUBCHAPTER C. DIESEL EMISSIONS REDUCTION INCENTIVE PROGRAM 9-15 Sec. 386.101. DEFINITIONS. In this subchapter: 9-16 (1) "Cost-effectiveness" means the ratio of the total 9-17 dollar amount expended to the total number of tons of oxides of 9-18 nitrogen emissions reduction attributable to that expenditure. 9-19 Cost-effectiveness for the program as a whole and for particular 9-20 projects under the program is calculated as provided in Sections 9-21 386.105 and 386.106. 9-22 (2) "Covered engine" includes any internal combustion 9-23 engine or any electric motor and drive powering a covered source. 9-24 (3) "Covered source" includes the following 9-25 diesel-powered vehicles or engines: 9-26 (A) onroad vehicles of 14,000 pounds gross 9-27 vehicle weight rating or greater; 10-1 (B) offroad nonrecreational equipment and 10-2 vehicles; 10-3 (C) locomotives; 10-4 (D) diesel marine vessels; 10-5 (E) stationary agricultural engines; and 10-6 (F) other high-emitting diesel engine categories 10-7 established by the commission. 10-8 (4) "Covered vehicle" includes any vehicle or piece of 10-9 equipment powered by a covered engine. 10-10 (5) "Offroad engine" means an internal combustion 10-11 engine that is: 10-12 (A) in or on a piece of equipment that is 10-13 self-propelled or that propels itself and performs another 10-14 function, excluding a vehicle that is used solely for competition; 10-15 (B) in or on a piece of equipment that is 10-16 intended to be propelled while performing its function; or 10-17 (C) designed to be and capable of being carried 10-18 or moved from one location to another. 10-19 (6) "Offroad equipment" means equipment that is 10-20 powered by an offroad engine. 10-21 (7) "Offroad vehicle" means a vehicle that is powered 10-22 by an offroad engine. The term does not include a motor vehicle or 10-23 a vehicle used solely for competition. 10-24 (8) "Program" means the diesel emissions reduction 10-25 incentive program established under this subchapter. 10-26 (9) "New vehicle" means a motor vehicle that has not 10-27 been the subject of a first sale. 11-1 (10) "Qualifying fuel" includes any liquid or gaseous 11-2 fuel or additives verified by the United States Environmental 11-3 Protection Agency, other than standard gasoline or diesel, that is 11-4 ultimately dispensed into a covered vehicle that provides 11-5 reductions of emissions of oxides of nitrogen. 11-6 (11) "Repower" means to replace an old engine powering 11-7 a covered source with: 11-8 (A) a newer engine certified to more stringent 11-9 emissions standards; or 11-10 (B) electric motors or drives. 11-11 (12) "Retrofit" means to equip an engine and fuel 11-12 system with new emissions-reducing parts or equipment after 11-13 manufacture of the original engine and fuel system. 11-14 (13) "Very-low-emissions vehicle" means a vehicle 11-15 that: 11-16 (A) qualifies as an ultra-low-emissions vehicle 11-17 or a super-ultra-low-emissions vehicle when it is a new vehicle; or 11-18 (B) is modified with the approval and warranty 11-19 of the original equipment manufacturer to qualify as a 11-20 very-low-emissions vehicle within 12 months of delivery to an owner 11-21 for private or commercial use. 11-22 (14) "Super-ultra-low-emissions vehicle" means a 11-23 vehicle certified to super-ultra-low-emissions standards. 11-24 (15) "Ultra-low-emissions vehicle" means a vehicle 11-25 certified to ultra-low-emissions standards. 11-26 (16) "Zero-emissions vehicle" means a vehicle 11-27 certified to zero-emissions standards. 12-1 Sec. 386.102. PROGRAM. (a) The commission shall establish 12-2 and administer a diesel emissions reduction incentive program. 12-3 Under the program, the commission shall provide grants for eligible 12-4 projects to offset the incremental cost of projects that reduce 12-5 emissions of oxides of nitrogen from high-emitting diesel sources 12-6 in nonattainment and near nonattainment areas of the state. The 12-7 commission shall determine the eligibility of projects. 12-8 (b) Projects that may be considered for a grant under the 12-9 program include: 12-10 (1) purchase or lease of new very-low-emissions or 12-11 zero-emissions covered offroad vehicles or covered engines for 12-12 offroad equipment; 12-13 (2) emissions-reducing retrofit of covered engines; 12-14 (3) repower projects; 12-15 (4) purchase and use of emissions-reducing add-on 12-16 equipment for covered vehicles; 12-17 (5) development and demonstration of practical, 12-18 low-emissions retrofit technologies, repower options, and advanced 12-19 technologies for covered engines and vehicles with very low 12-20 emissions of oxides of nitrogen; 12-21 (6) use of alternative fuel; and 12-22 (7) installation of fueling or electrification 12-23 infrastructure. 12-24 (c) A new purchase, lease, retrofit, repower, or add-on 12-25 equipment project is not eligible for a grant under this subchapter 12-26 if the new purchase, lease, retrofit, repower, or add-on equipment 12-27 is required by any local, state, or federal law, rule or 13-1 regulation, memorandum of agreement, or other legally binding 13-2 document. This subsection does not apply to: 13-3 (1) an otherwise qualified project, regardless of the 13-4 fact that the state implementation plan assumes that the change in 13-5 equipment, vehicles, or operations will occur, if on the date the 13-6 grant is awarded the change is not required by any local, state, or 13-7 federal law, rule or regulation, memorandum of agreement, or other 13-8 legally binding document; or 13-9 (2) the purchase of a low-emissions vehicle or 13-10 equipment required only by corporate or controlling board policy. 13-11 Sec. 386.103. APPLICATION FOR GRANT. (a) Any individual, 13-12 corporate entity, or public agency that owns one or more covered 13-13 vehicles that operate primarily within a nonattainment area or near 13-14 nonattainment area of this state or that otherwise contribute 13-15 substantially to the state inventory of emissions of oxides of 13-16 nitrogen may apply for a grant under the program. 13-17 (b) An application for a grant under this subchapter must be 13-18 made on an application provided by the commission and must contain 13-19 information required by the commission, including: 13-20 (1) a detailed description of the proposed project; 13-21 (2) information necessary for the commission to 13-22 determine whether the project meets eligibility requirements for 13-23 the type of project proposed, including a statement of the amounts 13-24 of any other public financial assistance the project will receive; 13-25 and 13-26 (3) other information the commission may require. 13-27 Sec. 386.104. ELIGIBILITY REQUIREMENTS. (a) A proposed 14-1 project must meet the requirements of this section to be eligible 14-2 for a grant under the program. 14-3 (b) For a proposed project, other than a project involving a 14-4 marine vessel or engine, not less than 75 percent of vehicle miles 14-5 traveled or hours of operation projected for the five years 14-6 immediately following the award of a grant must be projected to 14-7 take place in a nonattainment area or near nonattainment area of 14-8 this state. For a proposed project involving a marine vessel or 14-9 engine, the vessel or engine must be operated in the intercoastal 14-10 waterways or bays of a nonattainment area or near nonattainment 14-11 area of this state for a sufficient amount of time over the 14-12 lifetime of the project to meet the cost-effectiveness requirements 14-13 of Section 386.105. 14-14 (c) Each proposed project must meet the cost-effectiveness 14-15 requirements of Sections 386.105 and 386.106. 14-16 (d) A proposed repower project must meet commission 14-17 requirements relating to baseline emissions levels of the engines 14-18 being replaced under the project. 14-19 (e) A proposed retrofit, repower, or add-on equipment 14-20 project must document, in a manner acceptable to the commission, a 14-21 reduction in emissions of oxides of nitrogen of at least 30 percent 14-22 compared with the baseline emissions adopted by the commission for 14-23 the relevant engine year and application. After study of available 14-24 emissions reduction technologies, after public notice and comment, 14-25 and after consultation with the advisory board, the commission may 14-26 revise the minimum percentage reduction in emissions of oxides of 14-27 nitrogen required by this subsection to improve the ability of the 15-1 program to achieve its goals. 15-2 (f) For a proposed project involving the purchase of new 15-3 very-low-emissions or zero-emissions offroad equipment, the engines 15-4 must be certified to an optional low oxides of nitrogen emissions 15-5 standard established by the commission, except as otherwise 15-6 provided by this subsection. For a proposed project involving the 15-7 purchase of new very-low-emissions or zero-emissions offroad 15-8 equipment for which the described standard is not available, the 15-9 project proponent must document, to the commission's satisfaction, 15-10 that the very-low-emissions or zero-emissions engine emits not more 15-11 than 70 percent of the oxides of nitrogen emitted by a new engine 15-12 certified to the baseline oxides of nitrogen emissions standard for 15-13 that engine. If a baseline emissions standard does not exist for 15-14 new offroad equipment in a particular category, the commission by 15-15 rule shall establish an appropriate baseline emissions level for 15-16 comparison purposes. 15-17 (g) The commission may approve payments to offset the 15-18 incremental cost, over the expected lifetime of the vehicle, of 15-19 alternative fuel used in a vehicle if the proposed project as a 15-20 whole, including the incremental fuel cost, meets the requirements 15-21 of this subchapter. The commission shall develop an appropriate 15-22 method for converting incremental fuel costs over the vehicle 15-23 lifetime into an initial cost for purposes of determining 15-24 cost-effectiveness as required by Section 386.105. 15-25 Sec. 386.105. CALCULATION OF COST-EFFECTIVENESS. (a) In 15-26 calculating cost-effectiveness, one-time grants of money at the 15-27 beginning of a project shall be annualized using a time value of 16-1 public funds or discount rate determined for each project by the 16-2 commission, taking into account the interest rate on bonds, 16-3 interest earned by state funds, and other factors the commission 16-4 considers appropriate. Cost-effectiveness shall be calculated by 16-5 dividing annualized costs by average annual emissions reductions of 16-6 oxides of nitrogen in the affected area. 16-7 (b) The commission shall establish reasonable methodologies 16-8 for evaluating project cost-effectiveness consistent with 16-9 Subsection (a) and with accepted methods. 16-10 (c) The commission shall develop protocols for calculating 16-11 surplus oxides of nitrogen emissions reductions in nonattainment 16-12 and near nonattainment areas of this state from representative 16-13 project types over the life of the projects. 16-14 (d) The commission may include in cost-effectiveness 16-15 determinations only reductions in oxides of nitrogen emissions that 16-16 are achieved in nonattainment and near nonattainment areas of this 16-17 state. 16-18 Sec. 386.106. COST-EFFECTIVENESS CRITERIA; DETERMINATION OF 16-19 GRANT AMOUNT. (a) The commission may not award a grant for a 16-20 proposed project the cost-effectiveness of which, calculated in 16-21 accordance with Section 386.105 and rules adopted under that 16-22 section, exceeds $13,000 per ton of oxides of nitrogen emissions 16-23 reduced in the nonattainment or near nonattainment area for which 16-24 the project is proposed. 16-25 (b) The commission may not award a grant that, net of taxes, 16-26 provides an amount that exceeds the incremental cost of the 16-27 proposed project. 17-1 (c) The commission shall adopt guidelines for capitalizing 17-2 incremental lease costs so those costs may be offset by a grant 17-3 under this subchapter. 17-4 (d) In determining the amount of a grant under this 17-5 subchapter, the commission shall reduce the incremental cost of a 17-6 proposed new purchase, lease, retrofit, repower, or add-on 17-7 equipment project by the value of any existing financial incentive 17-8 that directly reduces the cost of the proposed project, including 17-9 tax credits or deductions, other grants, or any other public 17-10 financial assistance. 17-11 (e) The commission may establish maximum grant awards per 17-12 vehicle or engine replaced for projects that propose to repower 17-13 offroad equipment. 17-14 Sec. 386.107. ADJUSTMENT TO MAXIMUM COST-EFFECTIVENESS 17-15 AMOUNT AND AWARD AMOUNT. (a) After study of available emissions 17-16 reduction technologies and costs and after public notice and 17-17 comment, the commission, in consultation with the advisory board, 17-18 may reduce the values of the maximum grant award criteria 17-19 established in Section 386.106 to improve the ability of the 17-20 program to achieve its goals. 17-21 (b) To account for inflation, the commission, in 17-22 consultation with the advisory board, annually may adjust the 17-23 maximum cost-effectiveness amount established in Section 386.106(a) 17-24 and any per-project maximum set by the commission under Section 17-25 386.106(e). 17-26 Sec. 386.108. AVAILABILITY OF EMISSIONS REDUCTION CREDITS. 17-27 (a) A project funded under this program may not be used for credit 18-1 under any state or federal emissions reduction credit averaging, 18-2 banking, or trading program. 18-3 (b) Except as provided by Section 386.058, an emissions 18-4 reduction generated by the program may not be used as a marketable 18-5 emissions reduction credit or to offset any emissions reduction 18-6 obligation. 18-7 (c) A project involving a new emissions reduction measure 18-8 that would otherwise generate marketable credits under state or 18-9 federal emissions reduction credit averaging, banking, or trading 18-10 programs is not eligible for funding under the program unless the 18-11 project includes the transfer of the marketable credits to the end 18-12 user and the retirement of the credits. 18-13 (d) An industrial point source located in the 18-14 Houston-Galveston nonattainment area may use emissions reductions 18-15 generated by the program to offset the requirements of commission 18-16 rules relating to control of air pollution from nitrogen compounds 18-17 if: 18-18 (1) the industrial point source contributes to the 18-19 fund $75,000 annually for each ton of emissions credit it acquires, 18-20 not to exceed one ton per day; 18-21 (2) the facility demonstrates to the commission's 18-22 satisfaction that the facility will be in full compliance with the 18-23 commission's emissions reduction rules not later than the fifth 18-24 anniversary of the date on which the first credits are purchased; 18-25 and 18-26 (3) the commission approves a petition by the 18-27 applicant that demonstrates that it is technically infeasible for 19-1 the applicant to comply with the commission's emissions reduction 19-2 requirements above 80 percent. 19-3 Sec. 386.109. FUELING INFRASTRUCTURE DEMONSTRATION PROJECTS. 19-4 (a) The commission shall provide limited funding from money 19-5 available for the diesel emissions reduction incentive program for 19-6 fueling infrastructure demonstration projects to: 19-7 (1) provide initial support for low-emissions vehicle 19-8 projects at the start of the program; and 19-9 (2) assess whether funding for infrastructure is an 19-10 appropriate and cost-effective use of public funds. 19-11 (b) To implement the requirement of Subsection (a), the 19-12 commission shall: 19-13 (1) solicit applications for a balanced mix of 19-14 demonstration projects involving fueling and electrification 19-15 infrastructure that is linked to covered vehicle projects and 19-16 consistent with program goals; 19-17 (2) coordinate infrastructure projects with covered 19-18 vehicle projects representing a broad range of fuels, technologies, 19-19 and applications as appropriate and consistent with the goals of 19-20 this chapter; 19-21 (3) adopt guidelines and criteria for fueling 19-22 infrastructure projects to be funded under the program; and 19-23 (4) oversee, monitor, and evaluate the use of grants 19-24 awarded under this program and report on the effectiveness of this 19-25 grant program in relation to the purposes and goals of this 19-26 chapter. 19-27 Sec. 386.110. ELIGIBLE FUELING INFRASTRUCTURE DEMONSTRATION 20-1 PROJECTS. The commission may consider for funding under Section 20-2 386.109: 20-3 (1) the purchase and installation of equipment at a 20-4 site that is designed primarily to dispense qualifying fuel; and 20-5 (2) infrastructure projects designed to dispense 20-6 electricity to covered vehicles. 20-7 Sec. 386.111. APPLICATION PACKAGE FOR FUELING INFRASTRUCTURE 20-8 DEMONSTRATION PROJECTS. (a) The commission shall develop a simple, 20-9 standardized application package for fueling infrastructure 20-10 demonstration project grants under this subchapter. The package 20-11 must include: 20-12 (1) an application form; 20-13 (2) a brief description of: 20-14 (A) the program; 20-15 (B) the projects that are eligible for available 20-16 funding; 20-17 (C) the selection criteria and evaluation 20-18 process; and 20-19 (D) the required documentation; 20-20 (3) the name of a person or office to contact for more 20-21 information; 20-22 (4) an example of the contract that an applicant will 20-23 be required to execute before receiving a grant; and 20-24 (5) any other information the commission considers 20-25 useful to inform the applicant and expedite the application 20-26 process. 20-27 (b) The application form shall require as much information 21-1 as the commission determines is necessary to properly evaluate each 21-2 project but shall otherwise minimize the information required. 21-3 (c) The commission may not require an applicant, as part of 21-4 the application process, to calculate tons of emissions reduced or 21-5 cost-effectiveness. 21-6 Sec. 386.112. APPLICATION REVIEW PROCEDURES. (a) The 21-7 commission shall review an application for a grant for a project 21-8 authorized under this subchapter, including an application for a 21-9 grant for a fueling infrastructure demonstration project, 21-10 immediately on receipt of the application. If the commission 21-11 determines that an application is incomplete, the commission shall 21-12 notify the applicant, not later than the 15th working day after the 21-13 date of the determination, with an explanation of what is missing 21-14 from the application. The commission shall record the date and 21-15 time of receipt of each application the commission determines to be 21-16 complete and shall evaluate the completed application according to 21-17 the appropriate project criteria. The commission shall approve, as 21-18 soon as possible and not later than the 60th working day after the 21-19 date the complete application is received, an application that 21-20 meets the appropriate project criteria. 21-21 (b) The commission shall make every effort to expedite the 21-22 application review process and to award grants to qualified 21-23 projects in a timely manner. To the extent possible, the 21-24 commission shall coordinate project review and approval with any 21-25 timing constraints related to project purchases or installations to 21-26 be made by an applicant. 21-27 (c) The commission may deny an application for a project 22-1 that does not meet the applicable project criteria or that the 22-2 commission determines is not made in good faith, is not credible, 22-3 or is not in compliance with this chapter and the goals of this 22-4 chapter. 22-5 (d) The commission shall award a grant under this subchapter 22-6 in conjunction with the execution of a contract that obligates the 22-7 commission to make the grant and the recipient to perform the 22-8 actions described in the recipient's grant application. The 22-9 contract must incorporate provisions for recapturing grant money in 22-10 proportion to any loss of emissions reductions or underachievement 22-11 in dispensing qualifying fuel compared with the volume of emissions 22-12 reductions or amount of fuel dispensed that was projected in the 22-13 grant application. Grant money recaptured under the contract 22-14 provision shall be deposited in the fund and reallocated for other 22-15 projects under this subchapter. 22-16 Sec. 386.113. STAFF AND TECHNICAL SUPPORT. The commission 22-17 shall provide staff or technical support as needed within available 22-18 budgetary resources to assist infrastructure project proponents in 22-19 addressing issues common to eligible infrastructure projects, 22-20 including permitting and safety requirements. 22-21 Sec. 386.114. TOTAL COST-EFFECTIVENESS CALCULATION. The 22-22 commission shall calculate the total cost-effectiveness of oxides 22-23 of nitrogen emissions reductions resulting from use of vehicles 22-24 that fuel at facilities funded under the fueling infrastructure 22-25 demonstration program. The total cost-effectiveness calculation 22-26 shall include program funding provided to vehicles and funding 22-27 provided under the fueling infrastructure demonstration program. 23-1 (Sections 386.115-386.150 reserved for expansion 23-2 SUBCHAPTER D. LOW-EMISSIONS VEHICLE PURCHASE 23-3 OR LEASE INCENTIVE PROGRAM 23-4 Sec. 386.151. DEFINITIONS. In this subchapter: 23-5 (1) "Heavy light-duty truck" means a light-duty truck 23-6 with a gross vehicle weight rating of more than 6,000 pounds. 23-7 (2) "Heavy-duty engine" means an engine that the 23-8 engine manufacturer could reasonably expect to be used for motive 23-9 power in a heavy-duty vehicle. 23-10 (3) "Heavy-duty vehicle" means a motor vehicle that 23-11 has: 23-12 (A) a gross vehicle weight rating of more than 23-13 8,500 pounds; 23-14 (B) a vehicle curb weight of more than 6,000 23-15 pounds; or 23-16 (C) a basic vehicle frontal area of more than 45 23-17 square feet. 23-18 (4) "Light light-duty truck" means a light-duty truck 23-19 that has a gross vehicle weight rating of 6,000 pounds or less. 23-20 (5) "Light-duty truck" means a motor vehicle: 23-21 (A) that has: 23-22 (i) a gross vehicle weight rating of 8,500 23-23 pounds or less; 23-24 (ii) a vehicle curb weight of 6,000 pounds 23-25 or less; or 23-26 (iii) a basic vehicle frontal area of 45 23-27 square feet or less; and 24-1 (B) that is: 24-2 (i) designed primarily to transport 24-3 property or is derived from a vehicle designed primarily to 24-4 transport property; 24-5 (ii) designed primarily to transport 24-6 persons and has a seating capacity of more than 12 persons; and 24-7 (iii) available with special features 24-8 enabling off-street or off-highway operation and use. 24-9 (6) "Light-duty vehicle" means a passenger car or a 24-10 vehicle derived from a passenger car with a seating capacity of not 24-11 more than 12 persons. 24-12 (7) "Medium-duty passenger vehicle" means a heavy-duty 24-13 vehicle with a gross vehicle weight rating of 10,000 pounds or less 24-14 designed primarily to transport persons. The term does not include 24-15 a vehicle that: 24-16 (A) is an incomplete truck; 24-17 (B) has a seating capacity of more than 12 24-18 persons; 24-19 (C) is designed for more than nine persons in 24-20 seating behind the driver's seat; or 24-21 (D) is equipped with an open cargo area of 72 24-22 inches or more in interior length. 24-23 (8) "Open-cargo area" includes a: 24-24 (A) truck box; 24-25 (B) truck bed; or 24-26 (C) covered box not readily accessible from the 24-27 passenger compartment. 25-1 Sec. 386.152. LOW-EMISSIONS VEHICLE PURCHASE OR LEASE 25-2 INCENTIVE PROGRAM. (a) The commission shall develop a 25-3 low-emissions vehicle purchase or lease incentive program in 25-4 accordance with this subchapter and shall adopt rules necessary to 25-5 implement the program. 25-6 (b) The program shall authorize incentives for the purchase 25-7 or lease of new low-emissions vehicles according to the schedules 25-8 provided by Sections 386.153-386.155 and to Section 386.156, to be 25-9 implemented at the point of sale or lease. 25-10 Sec. 386.153. LOW-EMISSIONS VEHICLE PURCHASE OR LEASE 25-11 INCENTIVE SCHEDULE: LIGHT-DUTY VEHICLES. (a) A light-duty vehicle 25-12 or a light light-duty truck is eligible for a low-emissions vehicle 25-13 purchase or lease incentive according to the following schedule: 25-14 Incentive emissions standard Incentive amount 25-15 (g/mi) 25-16 0.04 $1,000 25-17 0.03 $2,000 25-18 0.02 $3,000 25-19 0.00 $4,000 25-20 (b) A heavy light-duty truck is eligible for a low-emissions 25-21 vehicle purchase or lease incentive according to the following 25-22 schedule: 25-23 Incentive emissions standard Incentive amount 25-24 (g/mi) 25-25 0.04 $2,000 25-26 0.03 $4,000 25-27 0.02 $6,000 26-1 0.00 $8,000 26-2 Sec. 386.154. LOW-EMISSIONS VEHICLE PURCHASE OR LEASE 26-3 INCENTIVE SCHEDULE: MEDIUM-DUTY PASSENGER VEHICLES. A medium-duty 26-4 passenger vehicle is eligible for a low-emissions vehicle purchase 26-5 or lease incentive according to the following schedule: 26-6 Incentive emissions standard Incentive amount 26-7 (g/mi) 26-8 0.04 $2,000 26-9 0.03 $4,000 26-10 0.02 $6,000 26-11 0.00 $8,000 26-12 Sec. 386.155. LOW-EMISSIONS VEHICLE PURCHASE OR LEASE 26-13 INCENTIVE SCHEDULE: HEAVY-DUTY VEHICLES. A heavy-duty vehicle is 26-14 eligible for a low-emissions vehicle purchase or lease incentive 26-15 according to the following schedule: 26-16 Incentive emissions standard Incentive amount 26-17 (g/bhp-hr) 26-18 2002-2003 2004-2005 26-19 2.0 0.15 $8,000 26-20 1.5 0.10 $9,000 26-21 0.2 0.05 $10,000 26-22 0.00 0.00 $12,000 26-23 Sec. 386.156. ALTERNATIVE FUEL VEHICLES. (a) An alternative 26-24 fuel vehicle purchased or leased for use as a fleet vehicle is 26-25 eligible under this subchapter for a low-emissions vehicle purchase 26-26 or lease incentive. An alternative fuel vehicle purchased or 26-27 leased wholly or in part with grant money or another incentive 27-1 awarded under this chapter is not eligible for an incentive under 27-2 this subchapter. 27-3 (b) The owner of a dual fuel vehicle that receives a 27-4 low-emissions vehicle purchase or lease incentive under this 27-5 section must certify to the commission each year for the first five 27-6 years following the purchase or lease of the vehicle that the 27-7 vehicle used an alternative fuel for at least 75 percent of the 27-8 vehicle miles traveled during the preceding year. The owner is 27-9 liable to the commission, for any year in which the certification 27-10 cannot be made, for an amount equal to the amount of the incentive 27-11 prorated for the period of time the vehicle could not be certified. 27-12 Sec. 386.157. MANUFACTURER'S CERTIFICATION OF LOW-EMISSIONS 27-13 VEHICLES. At the beginning of but not later than July 1 of each 27-14 vehicle model year, a manufacturer of motor vehicles that intends 27-15 to sell motor vehicles in this state during that model year shall 27-16 certify to the commission the new vehicle models that the 27-17 manufacturer intends to sell in this state during that model year 27-18 that meet the incentive emissions standards established by the 27-19 schedules set out under Sections 386.153-386.155. 27-20 Sec. 386.158. LIST OF ELIGIBLE VEHICLES. (a) On August 1 27-21 each year the commission shall publish a list of the new model 27-22 low-emissions vehicles that are certified by the manufacturer to 27-23 meet the incentive emissions standards and are qualified for a 27-24 low-emissions vehicle purchase or lease incentive under this 27-25 subchapter on purchases or leases during that model year. 27-26 (b) The comptroller shall distribute the list of certified 27-27 vehicles to new vehicle dealerships. 28-1 Sec. 386.159. VEHICLE EMISSIONS INFORMATION LABEL. (a) To 28-2 enable consumers to make informed purchase decisions based on the 28-3 relative amounts of emissions produced by vehicles within each 28-4 vehicle class, the commission by rule shall require that each new 28-5 passenger car, light-duty truck, and medium-duty passenger vehicle 28-6 for sale or lease in this state display a clearly legible label 28-7 that shows the vehicle's 5-Star Green Vehicle Class Rating under 28-8 the United States Environmental Protection Agency's 5-star green 28-9 vehicle class rating system. 28-10 (b) The label must also contain information regarding: 28-11 (1) the availability of low-emissions vehicle purchase 28-12 or lease incentives on new vehicles sold or leased in this state; 28-13 and 28-14 (2) the eligibility of the particular vehicle for the 28-15 low-emissions vehicle purchase or lease incentive. 28-16 Sec. 386.160. POINT-OF-SALE OR POINT-OF-LEASE INCENTIVE; 28-17 REPORT TO COMPTROLLER. (a) A person who purchases or leases during 28-18 the model year in which it is first offered for sale or lease a new 28-19 low-emissions vehicle that has been certified under Section 386.157 28-20 as eligible for an incentive under this subchapter or an 28-21 alternative fuel vehicle for use as a fleet vehicle is eligible to 28-22 receive the incentive at the time and point of sale or lease 28-23 according to the applicable incentive schedule. 28-24 (b) A new motor vehicle dealer or leasing agent shall credit 28-25 a purchaser or lessee described under Subsection (a) with the 28-26 appropriate incentive as part of the sales or lease transaction. 28-27 The dealer or agent shall report to the comptroller, at the 29-1 beginning of each calendar month and in the manner prescribed by 29-2 the comptroller, the amount of incentives credited by the dealer or 29-3 agent during the preceding calendar month. 29-4 Sec. 386.161. PUBLIC INFORMATION. (a) The commission in 29-5 cooperation with the comptroller shall develop and implement a 29-6 program to inform the public about the low-emissions vehicle 29-7 purchase or lease incentive program. 29-8 (b) County tax assessor-collectors shall insert a notice 29-9 describing the low-emissions vehicle purchase or lease incentive 29-10 program with each annual vehicle registration renewal notice. 29-11 (c) A new motor vehicle dealer or leasing agent may retain 29-12 from the amounts reimbursed by the commission an amount equal to 29-13 two percent of the amount the dealer or agent invoices to the 29-14 commission each month. 29-15 Sec. 386.162. COMPTROLLER TO ACCOUNT FOR LOW-EMISSIONS 29-16 VEHICLE PURCHASE OR LEASE INCENTIVES. (a) The comptroller by rule 29-17 shall develop a method to administer and account for the 29-18 low-emissions vehicle purchase or lease incentives authorized by 29-19 this subchapter, and to administer the fund to timely reimburse new 29-20 motor vehicle dealers or leasing agents for incentive amounts 29-21 credited by the dealer. 29-22 (b) The comptroller may develop forms and instructions for 29-23 new motor vehicle dealers and leasing agents to use in accounting 29-24 for and reporting low-emissions vehicle purchase and lease 29-25 incentives and shall provide new motor vehicle dealers and leasing 29-26 agents with information to assist them in accounting for and 29-27 reporting the incentives. 30-1 Sec. 386.163. REPORT TO COMMISSION; SUSPENSION OF LEASE 30-2 INCENTIVES. (a) The comptroller shall report to the commission 30-3 periodically regarding low-emissions vehicle purchase or lease 30-4 incentives. 30-5 (b) The comptroller shall inform the commission if at any 30-6 time during a fiscal year the balance available in the money 30-7 allocated in the fund for low-emissions vehicle purchase or lease 30-8 incentives falls below 15 percent of the total amount allocated for 30-9 the incentives during that fiscal year. 30-10 (c) If the balance available for low-emissions vehicle 30-11 purchase or lease incentives falls below the amount described in 30-12 Subsection (b), the comptroller by order shall suspend the 30-13 incentives until the comptroller can certify that the balance 30-14 available in the fund for incentives is an amount adequate to 30-15 resume the incentives, but not later than the beginning of the next 30-16 fiscal year. If the comptroller suspends the incentives, the 30-17 comptroller shall immediately notify the commission and all new 30-18 motor vehicle dealers and leasing agents that the incentives have 30-19 been suspended. 30-20 (Sections 386.164-386.200 reserved for expansion 30-21 SUBCHAPTER E. NEW TECHNOLOGY DEVELOPMENT 30-22 AND RESEARCH PROGRAM 30-23 Sec. 386.201. DEFINITIONS. In this subchapter: 30-24 (1) "Council" means the Texas Council on Environmental 30-25 Technology. 30-26 (2) "Program" means the new technology research 30-27 program. 31-1 Sec. 386.202. TEXAS COUNCIL ON ENVIRONMENTAL TECHNOLOGY. (a) 31-2 The Texas Council on Environmental Technology consists of 11 31-3 members appointed by the governor to represent the academic and 31-4 nonprofit communities. The governor shall designate from the 31-5 council members a presiding officer of the council. Members of the 31-6 council serve six-year staggered terms, with the terms of three or 31-7 four members expiring February 1 of each odd-numbered year. 31-8 (b) The council shall work to enhance the entrepreneurial 31-9 and inventive spirit of Texans to assist in developing solutions to 31-10 problems by: 31-11 (1) identifying and evaluating new technologies and 31-12 seeking the approval of the United States Environmental Protection 31-13 Agency for and facilitating the deployment of those technologies; 31-14 and 31-15 (2) streamlining the process by which the commission 31-16 and the United States Environmental Protection Agency recognize and 31-17 give credit for new, innovative, and creative technological 31-18 advancements. 31-19 (c) Council offices and projects shall be housed at The 31-20 University of Texas at Austin. 31-21 Sec. 386.203. NEW TECHNOLOGY RESEARCH PROGRAM. (a) The 31-22 council shall establish and administer a new technology research 31-23 program as provided by this subchapter. 31-24 (b) Under the program, the council shall provide grants to 31-25 be used to support development of emissions-reducing technologies 31-26 that may be used for projects eligible for awards under other 31-27 provisions of this chapter. The primary objective of this 32-1 subchapter is to promote the development of commercialization 32-2 technologies that will support projects that may be funded under 32-3 this chapter. 32-4 Sec. 386.204. SOLICITATION OF NEW TECHNOLOGY PROPOSALS. The 32-5 council from time to time shall issue specific requests for 32-6 proposals (RFPs) or program opportunity notices (PONs) for 32-7 technology projects to be funded under the new technology research 32-8 program. 32-9 Sec. 386.205. ELIGIBLE PROJECTS; PRIORITIES. (a) Grants 32-10 awarded under this subchapter shall be directed toward a balanced 32-11 mix of: 32-12 (1) retrofit and add-on technologies to reduce 32-13 emissions from the existing stock of vehicles targeted by the Texas 32-14 emissions reduction plan; 32-15 (2) advanced technologies for new engines and vehicles 32-16 that produce very low or zero emissions of oxides of nitrogen; and 32-17 (3) air emissions modeling. 32-18 (b) The council shall identify and evaluate and the 32-19 commission may consider making grants for technology projects that 32-20 would allow qualifying fuels to be produced from energy resources 32-21 in this state. In considering projects under this subsection, the 32-22 council shall give preference to projects involving otherwise 32-23 unusable energy resources in this state and producing qualifying 32-24 fuels at prices lower than otherwise available and low enough to 32-25 make the projects to be funded under the program economically 32-26 attractive to local businesses in the area for which the project is 32-27 proposed. 33-1 (c) In soliciting proposals under Section 386.204 and 33-2 determining how to allocate grant money available for projects 33-3 under this subchapter, the council shall give special consideration 33-4 to advanced technologies and retrofit or add-on projects that 33-5 provide multiple benefits by reducing emissions or particulates and 33-6 other air pollutants. 33-7 (d) A project that involves a technology that allows an 33-8 onroad covered vehicle to replace with electric power, while the 33-9 vehicle is parked, the power normally supplied to the vehicle's 33-10 internal combustion engine is eligible for funding under this 33-11 subchapter if the project meets all applicable criteria. 33-12 (e) A project that involves publicly or privately owned 33-13 vehicles or vessels is eligible for funding under this subchapter 33-14 if the project meets all applicable criteria. 33-15 Sec. 386.206. EVIDENCE OF COMMERCIALIZATION POTENTIAL 33-16 REQUIRED. (a) An application for a technology grant under this 33-17 subchapter must show clear and compelling evidence that: 33-18 (1) the proposed technology project has a strong 33-19 commercialization plan and organization; and 33-20 (2) the technology proposed for funding: 33-21 (A) is likely to be offered for commercial sale 33-22 in this state within five years after the date of the application 33-23 for funding; and 33-24 (B) once commercialized, will offer 33-25 opportunities for projects eligible for funding under other 33-26 provisions of this chapter. 33-27 (b) The council shall consider specifically, for each 34-1 proposed technology project application: 34-2 (1) the projected potential for reduced emissions of 34-3 oxides of nitrogen and the cost-effectiveness of the technology 34-4 once it has been commercialized; 34-5 (2) the potential for the technology to contribute 34-6 significantly to air quality goals; and 34-7 (3) the strength of the commercialization plan. 34-8 Sec. 386.207. COST-SHARING. The council may require 34-9 cost-sharing for technology projects funded under this subchapter 34-10 but may not require repayment of grant money. 34-11 Sec. 386.208. ENVIRONMENTAL RESEARCH FUND. (a) The 34-12 environmental research fund is an account in the general revenue 34-13 fund. The fund consists of money from gifts, grants, or donations 34-14 to the fund for designated or general use and from any other source 34-15 designated by the legislature. 34-16 (b) Money in the fund may be used only for the operation and 34-17 projects of the council. 34-18 Sec. 386.209. ADVISORY COMMITTEES. The council may appoint 34-19 advisory committees as necessary or desirable to assist the council 34-20 in performing its duties. An advisory committee may include 34-21 representatives of industry, environmental groups, local 34-22 governments, and agriculture and shall include a representative of 34-23 the commission and a representative of the General Land Office. 34-24 Any senator or representative desiring to do so may participate on 34-25 any advisory committee appointed under this section. 34-26 (Sections 386.210-386.250 reserved for expansion) 34-27 SUBCHAPTER F. TEXAS EMISSIONS REDUCTION PLAN FUND 35-1 Sec. 386.251. FUND. (a) The Texas emissions reduction plan 35-2 fund is an account in the state treasury. 35-3 (b) The fund is administered by the comptroller for the 35-4 benefit of the Texas emissions reduction plan established under 35-5 this chapter. 35-6 (c) The fund consists of money from: 35-7 (1) fees and other amounts charged and collected under 35-8 Sections 502.1675, 502.1715, 521.421(h), 548.5055, and 643.053(b), 35-9 Transportation Code; 35-10 (2) the surcharge on the sale, lease, or rental of new 35-11 or used construction equipment under Section 151.0515, Tax Code; 35-12 (3) surcharges collected under Sections 152.0215 and 35-13 156.054, Tax Code; 35-14 (4) the surcharge collected under Section 31.0265, 35-15 Parks and Wildlife Code; 35-16 (5) the surcharge collected under Article 9035, 35-17 Revised Statutes; and 35-18 (6) payments made by industrial point sources under 35-19 Section 386.108. 35-20 Sec. 386.252. USE OF FUND. (a) Money in the fund may be 35-21 used only to implement and administer programs established under 35-22 the Texas emissions reduction plan and shall be allocated as 35-23 follows: 35-24 (1) for the diesel emissions reduction incentive 35-25 program, 50 percent of the money in the fund, of which: 35-26 (A) 75 percent is targeted for projects in 35-27 nonattainment areas of this state; 36-1 (B) 25 percent is targeted for projects in near 36-2 nonattainment areas of the state; and 36-3 (C) not more than three percent may be used for 36-4 fueling infrastructure demonstration projects; 36-5 (2) for the low-emissions vehicle purchase or lease 36-6 incentive program, 20 percent of the money in the fund, of which: 36-7 (A) 66 percent is targeted toward incentives for 36-8 the purchase or lease of new vehicles larger than 6,000 pounds 36-9 gross vehicle weight rating; and 36-10 (B) 33 percent is targeted toward incentives for 36-11 the purchase or lease of new vehicles of 6,000 pounds gross vehicle 36-12 weight rating or less; 36-13 (3) for the alternative fuel incentive program, 15 36-14 percent of money in the fund; 36-15 (4) for the energy-efficient appliance program, 5 36-16 percent of the money in the fund; 36-17 (5) for the new technology development and research 36-18 program, 7.5 percent of the money in the fund, of which $250,000 is 36-19 allocated for administration; and 36-20 (6) for administrative costs incurred by the 36-21 commission and the comptroller, 2.5 percent. 36-22 (b) Up to 15 percent of the money allocated under Subsection 36-23 (a) to a particular program and not expended under that program by 36-24 March 1 of the second fiscal year of a fiscal biennium may be used 36-25 for another program under the Texas emissions reduction plan as 36-26 determined by the commission in consultation with the advisory 36-27 board. 37-1 SECTION 2. Subchapter C, Chapter 151, Tax Code, is amended by 37-2 adding Section 151.0515 to read as follows: 37-3 Sec. 151.0515. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) 37-4 In this section, "construction equipment" means (to be supplied). 37-5 (b) In each county in this state, a surcharge is imposed on 37-6 the sale, lease, or rental of new or used construction equipment in 37-7 an amount equal to 0.25 percent of the sale price or the lease or 37-8 rental amount, not to exceed a total amount of $750 for each 37-9 surcharge. 37-10 (c) The surcharge shall be collected at the same time and in 37-11 the same manner and shall be administered and enforced in the same 37-12 manner as the tax imposed under this subchapter. The comptroller 37-13 shall adopt any additional procedures needed for the collection, 37-14 administration, and enforcement of the surcharge authorized by this 37-15 section and shall deposit all remitted surcharges to the credit of 37-16 the Texas emissions reduction plan fund. 37-17 SECTION 3. Subchapter H, Chapter 151, Tax Code, is amended by 37-18 adding Sections 151.355-151.357 to read as follows: 37-19 Sec. 151.355. ENERGY-EFFICIENT APPLIANCES. The sale of a 37-20 refrigerator, clothes washer, clothes dryer, dishwasher, or room 37-21 air conditioner is exempt from the tax imposed by this chapter if 37-22 the refrigerator, clothes washer, clothes dryer, dishwasher, or 37-23 room air conditioner qualifies under federal law for the "Energy 37-24 Star" label. 37-25 Sec. 151.356. CERTAIN HIGH-EFFICIENT HEATING, COOLING, AND 37-26 WATER HEATING EQUIPMENT. The sale of the following heating, 37-27 cooling, and water heating equipment is exempt from the tax imposed 38-1 by this chapter: 38-2 (1) a gas or electric central air conditioning unit, 38-3 if the unit has an efficiency rating of at least 13.5 SEER; 38-4 (2) an electric heat pump, if the heat pump has a: 38-5 (A) heating efficiency rating of at least 7.5 38-6 HSPF; and 38-7 (B) cooling efficiency rating of at least 13.5 38-8 SEER; 38-9 (3) an advanced natural gas hot water heater, if the 38-10 hot water heater has an energy factor of at least 0.65; 38-11 (4) an electric heat pump hot water heater, if the hot 38-12 water heater has an energy factor of at least 1.7; and 38-13 (5) a natural gas heat pump, if the heat pump has a 38-14 coefficient of performance for heating of at least 1.25 and for 38-15 cooling of at least 0.70. 38-16 Sec. 151.357. FUEL-CELL ELECTRIC GENERATING EQUIPMENT. (a) 38-17 In this section "fuel cell" means equipment using an 38-18 electrochemical process to generate electricity and heat. 38-19 (b) The sale of a new fuel cell is exempt from the tax 38-20 imposed by this chapter if the fuel cell has: 38-21 (1) a generating capacity of at least 2 kilowatts; and 38-22 (2) an electricity-only generation efficiency of at 38-23 least 35 percent. 38-24 SECTION 4. Subchapter B, Chapter 152, Tax Code, is amended by 38-25 adding Section 152.0215 to read as follows: 38-26 Sec. 152.0215. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) 38-27 A surcharge is imposed on every retail sale or lease of every 39-1 onroad diesel motor vehicle sold or leased in this state. The 39-2 amount of the surcharge is one percent of the total consideration. 39-3 (b) The surcharge shall be collected at the same time and in 39-4 the same manner and shall be administered and enforced in the same 39-5 manner as the tax imposed under this subchapter. The comptroller 39-6 shall adopt any additional procedures needed for the collection, 39-7 administration, and enforcement of the surcharge authorized by this 39-8 section and shall deposit all remitted surcharges to the credit of 39-9 the Texas emissions reduction plan fund. 39-10 SECTION 5. Section 153.001(5), Tax Code, is amended to read 39-11 as follows: 39-12 (5) "Diesel fuel" means kerosene or another liquid, or 39-13 a combination of liquids blended together, excluding water, that is 39-14 suitable for or used for the propulsion of diesel-powered motor 39-15 vehicles. The term includes products commonly referred to as 39-16 kerosene, light cycle oil, number two fuel oil, distillate fuel, 39-17 cutter stock, or heating oil, but does not include gasoline or 39-18 liquefied gas. 39-19 SECTION 6. Subchapter B, Chapter 156, Tax Code, is amended by 39-20 adding Section 156.054 to read as follows: 39-21 Sec. 156.054. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) 39-22 In this section, "nonattainment area" and "near nonattainment area" 39-23 have the meanings assigned by Section 386.001, Health and Safety 39-24 Code. 39-25 (b) In a nonattainment area or a near nonattainment area in 39-26 this state, a $1 surcharge is added to the tax imposed on a person 39-27 under this chapter. 40-1 (c) The comptroller shall adopt procedures for the 40-2 collection, administration, and enforcement of the surcharge 40-3 authorized by this section and shall deposit all surcharges 40-4 remitted under this section to the Texas emissions reduction plan 40-5 fund. 40-6 SECTION 7. Chapter 171, Tax Code, is amended by adding 40-7 Subchapter S to read as follows: 40-8 SUBCHAPTER S. TAX CREDIT FOR USE OF LIQUEFIED 40-9 GAS TO FUEL MOTOR VEHICLES 40-10 Sec. 171.851. DEFINITIONS. In this subchapter: 40-11 (1) "Incremental cost" has the meaning assigned by 40-12 Section 386.001, Health and Safety Code. 40-13 (2) "Liquefied gas" includes propane, compressed 40-14 natural gas (CNG), and liquefied natural gas (LNG). 40-15 Sec. 171.852. ELIGIBILITY. A corporation is eligible for a 40-16 credit against the tax imposed under this chapter in the amount and 40-17 under the conditions and limitation as provided by this subchapter. 40-18 Sec. 171.853. CREDIT FOR INCREMENTAL COST OF USING LIQUEFIED 40-19 GAS TO FUEL MOTOR VEHICLES. A corporation may claim a credit under 40-20 this subchapter only for the incremental cost of using liquefied 40-21 gas to fuel motor vehicles. 40-22 Sec. 171.854. AMOUNTS; LIMITATIONS. (a) The amount of the 40-23 credit is equal to the total incremental cost of using liquefied 40-24 gas to fuel motor vehicles. 40-25 (b) The total credit under this section may not exceed 40-26 (amount to be supplied). 40-27 (c) The total credit claimed under this subchapter for a 41-1 period may not exceed the amount of franchise tax due for the 41-2 report after any other applicable tax credits. 41-3 (d) A corporation may claim a credit under this subchapter 41-4 for an expenditure made during an accounting period only against 41-5 the tax owed for the corresponding reporting period. 41-6 Sec. 171.855. APPLICATION FOR CREDIT. (a) A corporation 41-7 must apply for a credit under this subchapter on or with the tax 41-8 report for the period for which the credit is claimed. 41-9 (b) The comptroller shall adopt a form for the application 41-10 for the credit. A corporation must use this form in applying for 41-11 the credit. 41-12 Sec. 171.856. ASSIGNMENT PROHIBITED. A corporation may not 41-13 convey, assign, or transfer the credit allowed under this 41-14 subchapter to another entity unless all of the assets of the 41-15 corporation are conveyed, assigned, or transferred in the same 41-16 transaction. 41-17 Sec. 171.857. REIMBURSEMENT TO STATE FROM TEXAS EMISSIONS 41-18 REDUCTION PLAN FUND. The comptroller shall reimburse the state for 41-19 revenue lost through tax credits authorized under this subchapter 41-20 in the manner provided by Chapter 386, Health and Safety Code. 41-21 SECTION 8. Section 224.153, Transportation Code, is amended 41-22 by adding Subsection (c) to read as follows: 41-23 (c) A vehicle displaying the license plate authorized by 41-24 Section 502.2665 for low-emissions or alternative fuel vehicles is 41-25 entitled to travel in a preferential car pool or high occupancy 41-26 vehicle lane designated under this section regardless of the 41-27 number of occupants in the vehicle. 42-1 SECTION 9. Section 224.155, Transportation Code, is amended 42-2 to read as follows: 42-3 Sec. 224.155. FAILURE OR REFUSAL TO PAY TOLL CHARGES; 42-4 EXEMPTION FOR LOW-EMISSIONS AND ALTERNATIVE FUEL VEHICLES. (a) Any 42-5 motor vehicle other than a police or emergency vehicle that is 42-6 driven or towed through a toll collection facility shall pay the 42-7 proper toll. 42-8 (b) A vehicle displaying the license plate authorized by 42-9 Section 502.2665 for low-emissions or alternative fuel vehicles is 42-10 not required to pay a toll under this section. 42-11 SECTION 10. Section 361.179, Transportation Code, is amended 42-12 by adding Subsection (h) to read as follows: 42-13 (h) A vehicle displaying the license plate authorized by 42-14 Section 502.2665 for low-emissions or alternative fuel vehicles is 42-15 not required to pay a toll imposed by an authority under this 42-16 section. 42-17 SECTION 11. Section 366.173, Transportation Code, is amended 42-18 by adding Subsection (h) to read as follows: 42-19 (h) A vehicle displaying the license plate authorized by 42-20 Section 502.2665 for low-emissions or alternative fuel vehicles is 42-21 not required to pay a toll imposed by an authority under this 42-22 section. 42-23 SECTION 12. Section 431.073, Transportation Code, is amended 42-24 by adding Subsection (d) to read as follows: 42-25 (d) A vehicle displaying the license plate authorized by 42-26 Section 502.2665 for low-emissions or alternative fuel vehicles is 42-27 entitled to travel in a preferential car pool or high occupancy 43-1 vehicle lane designated under this section regardless of the number 43-2 of occupants in the vehicle and without paying a toll. 43-3 SECTION 13. Subchapter D, Chapter 502, Transportation Code, 43-4 is amended by adding Section 502.1675 to read as follows: 43-5 Sec. 502.1675. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) 43-6 In addition to the registration fees charged under Section 502.167, 43-7 a surcharge is imposed on the registration of a truck-tractor or 43-8 commercial motor vehicle under that section in an amount equal to 43-9 10 percent of the total fees due for the registration of the 43-10 truck-tractor or commercial motor vehicle under that section. 43-11 (b) The county tax assessor-collector shall remit the 43-12 surcharge collected under this section to the comptroller at the 43-13 time and in the manner prescribed by the comptroller for deposit in 43-14 the Texas emissions reduction plan fund. 43-15 SECTION 14. Subchapter D, Chapter 502, Transportation Code, 43-16 is amended by adding Section 502.1715 to read as follows: 43-17 Sec. 502.1715. ADDITIONAL FEE FOR TEXAS EMISSIONS REDUCTION 43-18 PLAN. In addition to other registration fees for a license plate, 43-19 set of license plates, or other device used as the registration 43-20 insignia, the department shall collect a $1 fee for each motor 43-21 vehicle registered in a nonattainment area or near nonattainment 43-22 area in this state. The county tax assessor-collector shall remit 43-23 fees collected under this section to the comptroller at the time 43-24 and in the manner prescribed by the comptroller for deposit in the 43-25 Texas emissions reduction plan fund. In this subsection, 43-26 "nonattainment area" and "near nonattainment area" have the 43-27 meanings assigned by Section 386.001, Health and Safety Code. 44-1 SECTION 15. Subchapter F, Chapter 502, Transportation Code, 44-2 is amended by adding Section 502.2665 to read as follows: 44-3 Sec. 502.2665. LOW-EMISSIONS AND ALTERNATIVE FUEL VEHICLES. 44-4 (a) The department shall issue a specially designed license plate 44-5 for a motor vehicle that is: 44-6 (1) eligible for a low-emissions vehicle purchase and 44-7 lease incentive under Subchapter D, Chapter 386, Health and Safety 44-8 Code; or 44-9 (2) powered by alternative fuel as defined by Section 44-10 386.101, Health and Safety Code. 44-11 (b) License plates issued under this section must include 44-12 the words: "_____________________________" and must be 44-13 consecutively numbered. 44-14 (c) The department shall issue a license plate under this 44-15 section without the payment of any additional fee to a person who: 44-16 (1) applies to the department on a form provided by 44-17 the department; and 44-18 (2) submits proof that the vehicle being registered is 44-19 a vehicle described by Subsection (a)(1) or (2). 44-20 (d) The comptroller shall reimburse the county treasurer of 44-21 the county in which the applicant resides a reasonable amount from 44-22 the Texas emissions reduction plan fund to pay for the costs to the 44-23 county of administering this section. 44-24 SECTION 16. Section 521.421, Transportation Code, is amended 44-25 by adding Subsection (h) to read as follows: 44-26 (h) The department shall collect an additional fee of $1 in 44-27 an area of the state that is not a nonattainment area or near 45-1 nonattainment area and an additional fee of $3 in a nonattainment 45-2 area or near nonattainment area in this state to fund the Texas 45-3 emissions reduction plan established under Chapter 386, Health and 45-4 Safety Code. The department shall remit fees collected under this 45-5 section to the comptroller at the time and in the manner prescribed 45-6 by the comptroller for deposit in the Texas emissions reduction 45-7 plan fund. In this subsection, "nonattainment area" and "near 45-8 nonattainment area" have the meanings assigned by Section 386.001, 45-9 Health and Safety Code. 45-10 SECTION 17. Subchapter H, Chapter 548, Transportation Code, 45-11 is amended by adding Section 548.5055 to read as follows: 45-12 Sec. 548.5055. TEXAS EMISSIONS REDUCTION PLAN FEE. (a) In 45-13 this section, "nonattainment area" and "near nonattainment area" 45-14 have the meanings assigned by Section 386.001, Health and Safety 45-15 Code. 45-16 (b) In addition to other fees required by this subchapter, 45-17 to fund the Texas emissions reduction plan established under 45-18 Chapter 386, Health and Safety Code, the department shall collect, 45-19 for every motor vehicle required to be inspected under this 45-20 chapter, a fee of: 45-21 (1) $1, if the vehicle being inspected is not 45-22 registered in a nonattainment area or near nonattainment area in 45-23 this state; or 45-24 (2) $3, if the vehicle being inspected is registered 45-25 in a nonattainment area or near nonattainment area in this state. 45-26 (c) The department shall remit fees collected under this 45-27 section to the comptroller at the time and in the manner prescribed 46-1 by the comptroller for deposit in the Texas emissions reduction 46-2 plan fund. 46-3 SECTION 18. Section 643.053, Transportation Code, is amended 46-4 to read as follows: 46-5 Sec. 643.053. FILING OF APPLICATION. (a) An application 46-6 under Section 643.052 must be filed with the department and 46-7 accompanied by: 46-8 (1) an application fee of $100 plus a $10 fee for each 46-9 vehicle requiring registration the motor carrier proposes to 46-10 operate; 46-11 (2) evidence of insurance or financial responsibility 46-12 as required by Section 643.103(a); and 46-13 (3) any insurance filing fee required under Section 46-14 643.103(c). 46-15 (b) In addition to the fees required by Subsection (a), the 46-16 application must be accompanied by a Texas emissions reduction plan 46-17 surcharge in the amount of $2 per vehicle for an annual 46-18 registration and $4 per vehicle for a two-year registration. The 46-19 department shall collect and remit the surcharge to the comptroller 46-20 at the time and in the manner required by the comptroller for 46-21 deposit in the Texas emissions reduction plan fund. 46-22 SECTION 19. Section 681.009, Transportation Code, is amended 46-23 by adding Subsection (f) to read as follows: 46-24 (f) In a nonattainment area or near nonattainment area of 46-25 this state, a political subdivision or a person who designates five 46-26 or more parking spaces or a parking area for the exclusive use of 46-27 vehicles transporting persons with disabilities shall designate the 47-1 same number of parking spaces or a parking area for the exclusive 47-2 use of vehicles displaying the license plate authorized by Section 47-3 502.2665 for low-emissions and alternative fuel vehicles. In this 47-4 subsection, "nonattainment area" and "near nonattainment area" have 47-5 the meanings assigned by Section 386.001, Health and Safety Code. 47-6 SECTION 20. Subchapter B, Chapter 31, Parks and Wildlife 47-7 Code, is amended by adding Section 31.0265 to read as follows: 47-8 Sec. 31.0265. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) 47-9 In this section, "nonattainment area" and "near nonattainment area" 47-10 have the meanings assigned by Section 386.001, Health and Safety 47-11 Code. 47-12 (b) Each application for an original or renewal certificate 47-13 of number for a motorboat that will be operated primarily in a 47-14 nonattainment or near nonattainment area of this state shall be 47-15 accompanied by a $3 Texas emissions reduction plan surcharge in 47-16 addition to any other fee required to be paid to the department. 47-17 (c) The department shall collect and remit the surcharge to 47-18 the comptroller at the time and in the manner prescribed by the 47-19 comptroller for deposit in the Texas emissions reduction plan fund. 47-20 SECTION 21. Title 132, Revised Statutes, is amended by adding 47-21 Article 9035 to read as follows: 47-22 Art. 9035. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE ON TAXI 47-23 FARES 47-24 Sec. 1. DEFINITIONS. In this article: 47-25 (1) "Alternative fuel" has the meaning assigned by 47-26 Section 386.001, Health and Safety Code. 47-27 (2) "Alternative fuel vehicle" has the meaning 48-1 assigned by Section 386.001, Health and Safety Code. 48-2 (3) "Fare" means the compensation paid by a passenger 48-3 in a taxi for transportation by the taxi. 48-4 (4) "Nonattainment area" and "near nonattainment area" 48-5 have the meanings assigned by Section 386.001, Health and Safety 48-6 Code. 48-7 (5) "Taxi" means a fuel-powered passenger vehicle that 48-8 transports passengers for compensation. 48-9 (6) "Very-low-emissions vehicle" has the meaning 48-10 assigned by Section 386.101, Health and Safety Code. 48-11 Sec. 2. APPLICATION. This article applies only in a county 48-12 that is in a nonattainment area or a near nonattainment area of 48-13 this state. 48-14 Sec. 3. IMPOSITION AND COLLECTION OF SURCHARGE. (a) A 48-15 surcharge of 50 cents is imposed on each fare collected by the taxi 48-16 driver for transportation by a taxi. 48-17 (b) The person who owns the taxi or rents or leases the taxi 48-18 for the purpose of using the taxi to provide transportation 48-19 services to others shall pay the surcharge imposed by this article. 48-20 (c) The person required to pay the surcharge shall maintain 48-21 records of the surcharge in the manner prescribed by the 48-22 comptroller and shall remit the surcharge to the comptroller at the 48-23 time and in the manner prescribed by the comptroller for deposit to 48-24 the credit of the Texas emissions reduction plan fund. 48-25 Sec. 4. EXEMPTION FROM SURCHARGE. The surcharge imposed by 48-26 this article does not apply if the taxi providing the 48-27 transportation for which the fare is charged is a 49-1 very-low-emissions vehicle or an alternative fuel vehicle. 49-2 Sec. 5. INTEREST AND PENALTIES. A person is liable for 49-3 penalties and interest on surcharges that are not remitted when due 49-4 in the same manner and at the same rate as provided for delinquent 49-5 taxes by Sections 111.060 and 111.061, Tax Code. 49-6 Sec. 6. CRIMINAL PENALTY. (a) A person who violates this 49-7 article or a rule adopted by the comptroller under this article 49-8 commits an offense. 49-9 (b) An offense under this section is a Class C misdemeanor. 49-10 SECTION 22. All new residential and commercial construction 49-11 begun on or after the effective date of this Act must comply with 49-12 energy-efficient standards. 49-13 SECTION 23. A Texas emissions reduction plan surcharge is 49-14 imposed on the sale of fuel to marine vessels moored for an 49-15 extended period or permanently in harbor. 49-16 SECTION 24. (a) Not later than the 45th day after the 49-17 effective date of this Act, the Texas Natural Resource Conservation 49-18 Commission shall adopt rules establishing the guidelines and 49-19 criteria required to implement programs established under this Act. 49-20 (b) Not later than the 45th day after the effective date of 49-21 this Act, the comptroller shall adopt all rules necessary to enable 49-22 the comptroller to carry out the comptroller's duties under this 49-23 Act. 49-24 (c) Pending final adoption of rules by the Texas Natural 49-25 Resource Conservation Commission and the comptroller to implement 49-26 programs established by this Act, the commission shall begin 49-27 implementation of the programs using guidelines developed by a 50-1 similar program currently operating in another state, modified as 50-2 necessary for application in this state. 50-3 SECTION 25. (a) Not later than the 45th day after the 50-4 effective date of this Act, the Texas Natural Resource Conservation 50-5 Commission and the comptroller shall adopt rules necessary to 50-6 implement the low-emissions vehicle purchase or lease incentive 50-7 program established under Subchapter D, Chapter 386, Health and 50-8 Safety Code, as added by this Act. 50-9 (b) Not later than the 45th day after the effective date of 50-10 this Act, the Texas Natural Resource Conservation Commission shall 50-11 publish the first annual list of vehicles eligible for 50-12 low-emissions vehicle purchase or lease incentives, as required by 50-13 Section 386.158, Health and Safety Code, as added by this Act. 50-14 SECTION 26. Not later than the 45th day after the effective 50-15 date of this Act, the Texas Department of Public Safety shall make 50-16 available to the county tax assessor-collector of each county in 50-17 the state the special license plates authorized by Section 50-18 502.2665, Transportation Code, as added by this Act. The county 50-19 tax assessor-collector of each county in the state shall begin 50-20 issuing the special license plates to persons who qualify for the 50-21 plates not later than the 10th working day after the date the 50-22 plates are available. 50-23 SECTION 27. Not later than the 30th day after the adoption of 50-24 rules governing the new technology development and research program 50-25 established under Subchapter E, Chapter 386, Health and Safety 50-26 Code, as added by this Act, the Texas Natural Resource Conservation 50-27 Commission shall issue requests for proposals for projects to be 51-1 funded under the new technology development and research program. 51-2 SECTION 28. The change in law made by Subchapter S, Chapter 51-3 171, Tax Code, as added by this Act, takes effect January 1, 2002. 51-4 SECTION 29. The change in law made by Sections 51-5 151.355-151.357, Tax Code, as added by this Act, does not affect 51-6 tax liability accruing before the effective date of this Act. That 51-7 liability continues in effect as if this Act had not been enacted, 51-8 and the former law is continued in effect for the collection of 51-9 taxes due and for civil and criminal enforcement of the liability 51-10 for those taxes. 51-11 SECTION 30. In making the initial appointments to the Texas 51-12 Emissions Reduction Plan Advisory Board, as created by Section 51-13 386.057, Health and Safety Code, as added by this Act, the 51-14 appointing authorities shall designate their appointees so that six 51-15 members' terms expire February 1, 2002, and seven members' terms 51-16 expire February 1, 2003. 51-17 SECTION 31. In making the initial appointments to the Texas 51-18 Council on Environmental Technology, as created by Section 386.202, 51-19 Health and Safety Code, as added by this Act, the governor shall 51-20 designate the appointees so that three members' terms expire 51-21 February 1, 2003, four members' terms expire February 1, 2005, and 51-22 four members' terms expire February 1, 2007. 51-23 SECTION 32. This Act takes effect immediately if it receives 51-24 a vote of two-thirds of all the members elected to each house, as 51-25 provided by Section 39, Article III, Texas Constitution. If this 51-26 Act does not receive the vote necessary for immediate effect, this 51-27 Act takes effect September 1, 2001.