SRC-TJG, EPT C.S.H.B. 1365 78(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 1365
78R12356 MI-FBy: Bonnen (Harris)
Natural Resources
4/17/2003
Committee Report (Substituted)


DIGEST AND PURPOSE 

The federal Clean Air Act authorizes the United States Environmental
Protection Agency (EPA) to establish the maximum allowable concentrations
of pollutants that have been shown to endanger human health, harm the
environment, and cause property damage. The Texas Emissions Reduction Plan
(TERP), as established by S.B. 5 of the 77th Texas Legislature, created
incentive programs to assist  in reaching attainment by 2007.  C.S.H.B.
1365 makes statutory adjustment to allow for a more efficient TERP and
makes changes to help ensure attainment is reached. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Commission on
Environmental Quality in SECTION 1 (Section 366.001(2), Health and Safety
Code) and to the comptroller of public accounts in SECTION 18 of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 386.001(2), Health and Safety Code, to include
in the list of affected counties Henderson County, Hood County, Hunt
County, and any other county designated as an affected county by TCEQ rule
because of deteriorating air quality. 

SECTION 2.  Amends Section 386.053(d), Health and Safety Code, as follows:

(d)  Authorizes TCEQ to propose revisions to the guidelines and criteria
adopted under this section as necessary to improve the ability of the plan
to achieve its goals. Authorizes revisions to include, among other
changes, adding additional pollutants, adding stationary engines or
engines used in stationary applications, adding vehicles and equipment
that use fuels other than diesel, or adjusting eligible program
categories, as appropriate, to ensure that incentives established under
this chapter achieve the maximum possible emissions reductions.   

SECTION 3.  Amends Section 386.058(d), Health and Safety Code, to require
the governor, after consultation with the speaker of the house of
representatives, to appoint certain representatives to the advisory board. 

SECTION 4.  Amends Section 386.101, Health and Safety Code, to redefine
"on-road diesel" and "repower." 

SECTION 5.  Amends Section 386.102(b), Health and Safety Code, as follows:

 (b)  Provides that projects that may be considered for a grant include:
  
  (1)  purchase or lease of on-road or non-road diesels; and
(8)  replacement of on-road or non-road diesels with newer on-road or
non-road diesels. 
 
SECTION 6.  Amends Section 386.103(a), Health and Safety Code, to
authorize TCEQ to adopt guidelines to allow a person other than the owner
to apply for and receive a grant in order to  improve the ability of the
program to achieve its goals. 
 
SECTION 7.  Amends Sections 386.104(f), Health and Safety Code, to require
a proposed retrofit, repower, replacement, or add-on equipment project to
document, in a manner acceptable to TCEQ, a reduction in emissions of
oxides of nitrogen of at least 30 percent compared with the baseline
emissions adopted by TCEQ for the relevant engine year and application.  
 
SECTION 8.  Amends Section 386.105, Health and Safety Code, by adding
Subsection (e) to authorize TCEQ to allow for the apportionment of credits
associated with a project between the plan and another program or entity
if the part of the credit assigned to the program that is part of the plan
still meets any applicable cost-effectiveness criteria. 
 
SECTION 9.  Amends Section 386.106(a), Health and Safety Code, to prohibit
TCEQ, except as provided by Section 386.107 and except for infrastructure
projects and infrastructure purchases that are part of a broader retrofit,
repower, replacement, or add-on equipment project, from awarding a grant
for a proposed project the cost-effectiveness of which, calculated in
accordance with Section 386.105 and criteria developed under that section,
exceeds $13,000 per ton of oxides of nitrogen emissions reduced in the
nonattainment area or affected county for which the project is proposed.  

SECTION 10.  Amends Section 386.112(b), Health and Safety Code, to add
diesels certified by the California Air Resources Board to the provisions
of this subsection requiring the program to authorize statewide incentives
for the reimbursement of incremental costs for the purchase or lease,
according to the schedule provided by Section 386.113, of new on-road
diesels that are certified by the United States Environmental Protection
Agency or the California Air Resources Board to an emissions standard
provided by Section 386.113 if the purchaser or lessee of the onroad
diesel agrees to register the vehicle in this state and to operate the
on-road diesel in this state for not less than 75 percent of the on-road
diesel's annual mileage. 
 
SECTION 11.  Amends Subchapter C, Chapter 386, Health and Safety Code, by
adding Section 386.115, as follows: 
 
Sec. 386.115.  MODIFICATION OF VEHICLE ELIGIBILITY.  Authorizes TCEQ,
after evaluating the availability of vehicles meeting the emissions
standards and after public notice and comment, in consultation with the
advisory board, to expand the program to include other on-road vehicles,
regardless of fuel type used, that meet the emissions standards, have a
gross vehicle weight rating of greater than 8,500 pounds, and are
purchased or leased in lieu of a new on-road diesel. 
  
SECTION 12.  Amends Section 386.252, Health and Safety Code, as follows:
 
(a) Authorizes money in the fund to be used only to implement and
administer programs established under the plan and requires it to be
allocated in certain percentages to certain programs.  Deletes text
relating to the motor vehicle purchase or lease incentive program, 15
percent of the money in the fund; and  for the energy efficiency grant
program, 7.5 percent of the money in the fund. 

(b) Authorizes up to 25, rather than 15, percent of the money allocated
under Subsection (a) to a particular program and not expended under that
program by January, rather than March, 1 of the second fiscal year of a
fiscal biennium to be used for another program under the plan as
determined by TCEQ in consultation with the advisory board.   
 
SECTION 13.  Amends Section 151.0515, Tax Code, by amending Subsections
(a), (b), and (c) and adding Subsection (b-1), as follows: 

(a) Redefines  "equipment" to include all off-road, heavy-duty diesel
equipment other than implements of husbandry used solely for agricultural
purposes, including:  mining equipment; and drilling equipment used in
drilling an oil, gas, or water well.  Deletes existing text relating to
equipment classified as construction equipment. 
  
(b) Provides that in each county in this state, a surcharge is imposed on
the retail sale, lease, or rental of new or used equipment in an amount
equal to two, rather than one, percent of the sale price or the lease or
rental amount. 
 
(b-1) Provides that in each county in this state, a surcharge is imposed
on the storage, use, or other consumption in this state of new or used
equipment.  Provides that the surcharge is at the same percentage rate as
is provided by Subsection (b) on the sales price or the lease or rental
amount of the equipment. 
 
(c) Requires the surcharge to be collected at the same time and in the
same manner and shall be administered and enforced in the same manner as
the tax imposed under this chapter, rather than subchapter.  

SECTION 14.  Amends Section 152.0215(a), Tax Code, to provide that a
surcharge is imposed on every retail sale, lease, or use of every on-road
diesel motor vehicle that is over 14,000 pounds and that is sold, leased,
or used in this state.  Provides that the amount of the surcharge is two,
rather than 2.5, percent of the total consideration.  Deletes existing
text relating to imposing a surcharge if the vehicle is of a model year
1996 or earlier.  Makes nonsubstantive changes. 
 
SECTION 15.  Amends Section 224.153, Transportation Code, by adding
Subsection (d) to prohibit the Texas Department of Transportation from
authorizing vehicles addressed in Subsection (c) to use a high occupancy
vehicle lane if such use would violate federal transit or highway funding
restrictions. 

SECTION 16.  Amends Sections 501.138(a) and (b), Transportation Code, as
follows: 

(a)  Increases the fee an applicant for a certificate of title, other than
the state or a political subdivision of the state, is required to pay the
county assessor-collector from $13 to $28. 

(b) Requires the county assessor-collector to send $15 of the fee to the
comptroller of public accounts (comptroller) to be deposited to the credit
of certain entities on certain dates. 

SECTION 17.  Amends Section 387.006(a), Health and Safety Code, to require
an application for a technology grant under this chapter to show clear and
compelling evidence that the technology proposed for funding is likely to
be offered for commercial sale in this state as soon as practicable but
not later than, rather than within, five years after the date of the
application for funding. 
  
SECTION 18.  (a) Effective date: upon passage or September 1, 2003, except
as provided by Subsection (b). 

(b) Provides that Sections 13 and 14 of this Act take effect on the first
day of the first month beginning on or after the earliest date on which
this Act may take effect if it receives a vote of two-thirds of all the
members elected to each house, as provided by Section 39, Article III,
Texas Constitution.  Provides that if this Act does not receive the vote
necessary for effect before September 1, 2003, Sections 13 and 14 of this
Act take effect September 1, 2003.  Authorizes the comptroller of public
accounts to adopt emergency rules for the implementation of Sections 13
and 14 of this Act.