By Brown                                                 S.B. No. 5
         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.