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H.B. No. 1365
AN ACT
relating to the Texas emissions reduction plan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 386.001(2), Health and Safety Code, is
amended to read as follows:
(2) "Affected county" includes:
(A) Bastrop County;
(B) Bexar County;
(C) Caldwell County;
(D) Comal County;
(E) Ellis County;
(F) Gregg County;
(G) Guadalupe County;
(H) Harrison County;
(I) Hays County;
(J) Henderson County;
(K) Hood County;
(L) Hunt County;
(M) Johnson County;
(N) [(K)] Kaufman County;
(O) [(L)] Nueces County;
(P) [(M)] Parker County;
(Q) [(N)] Rockwall County;
(R) [(O)] Rusk County;
(S) [(P)] San Patricio County;
(T) [(Q)] Smith County;
(U) [(R)] Travis County;
(V) [(S)] Upshur County;
(W) [(T)] Victoria County;
(X) [(U)] Williamson County; [and]
(Y) [(V)] Wilson County; and
(Z) any other county designated as an affected
county by commission rule because of deteriorating air quality.
SECTION 2. Section 386.053(d), Health and Safety Code, is
amended to read as follows:
(d) The commission may propose revisions to the guidelines
and criteria adopted under this section as necessary to improve the
ability of the plan to achieve its goals. Revisions may 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. The commission shall make a
proposed revision available to the public before the 45th day
preceding the date of final adoption of the revision and shall hold
at least one public meeting to consider public comments on the
proposed revision before final adoption.
SECTION 3. Sections 386.101(6) and (9), Health and Safety
Code, are amended to read as follows:
(6) "On-road diesel" means an on-road diesel-powered
motor vehicle that has a gross vehicle weight rating of 8,500
[10,000] pounds or more.
(9) "Repower" means to replace an old engine powering
an on-road or non-road diesel with a new engine, a used engine, a
remanufactured engine, or electric motors, drives, or fuel cells[:
[(A) a new engine that emits at least 30 percent
less than the oxides of nitrogen emissions standard required by
federal regulation for the current model year for that engine;
[(B) an engine manufactured later than 1987 that
emits at least 30 percent less than the oxides of nitrogen emissions
standard emitted by a new engine certified to the baseline oxides of
nitrogen emissions standard for that engine;
[(C) an engine manufactured before 1988 that
emits not more than 50 percent of the oxides of nitrogen emissions
standard emitted by a new engine certified to the baseline oxides of
nitrogen emissions standard for that engine; or
[(D) electric motors, drives, or fuel cells].
SECTION 4. Section 386.102(b), Health and Safety Code, is
amended to read as follows:
(b) Projects that may be considered for a grant under the
program include:
(1) purchase or lease of on-road or non-road diesels;
(2) emissions-reducing retrofit projects for on-road
or non-road diesels;
(3) emissions-reducing repower projects for on-road
or non-road diesels;
(4) purchase and use of emissions-reducing add-on
equipment for on-road or non-road diesels;
(5) development and demonstration of practical,
low-emissions retrofit technologies, repower options, and advanced
technologies for on-road or non-road diesels with lower emissions
of oxides of nitrogen;
(6) use of qualifying fuel; [and]
(7) implementation of infrastructure projects; and
(8) replacement of on-road or non-road diesels with
newer on-road or non-road diesels.
SECTION 5. Section 386.103(a), Health and Safety Code, is
amended to read as follows:
(a) Any person as defined by Section 382.003 that owns one
or more on-road or non-road diesels that operate primarily within a
nonattainment area or affected county of this state or that
otherwise contributes to the state inventory of emissions of oxides
of nitrogen may apply for a grant under the program. The commission
may 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 6. Section 386.104(f), Health and Safety Code, is
amended to read as follows:
(f) A proposed retrofit, repower, replacement, or add-on
equipment project must document, in a manner acceptable to the
commission, a reduction in emissions of oxides of nitrogen of at
least 30 percent compared with the baseline emissions adopted by
the commission for the relevant engine year and application. After
study of available emissions reduction technologies, after public
notice and comment, and after consultation with the advisory board,
the commission may revise the minimum percentage reduction in
emissions of oxides of nitrogen required by this subsection to
improve the ability of the program to achieve its goals.
SECTION 7. Section 386.105, Health and Safety Code, is
amended by adding Subsection (e) to read as follows:
(e) The commission may 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 8. Section 386.106(a), Health and Safety Code, is
amended to read as follows:
(a) 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, the commission may not award 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. This subsection does not restrict commission authority
under other law to require emissions reductions with a
cost-effectiveness that exceeds $13,000 per ton.
SECTION 9. Section 386.112(b), Health and Safety Code, is
amended to read as follows:
(b) The program shall 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 on-road 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 10. Subchapter C, Chapter 386, Health and Safety
Code, is amended by adding Sections 386.115 and 386.116 to read as
follows:
Sec. 386.115. MODIFICATION OF VEHICLE ELIGIBILITY. After
evaluating the availability of vehicles meeting the emissions
standards and after public notice and comment, the commission, in
consultation with the advisory board, may 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.
Sec. 386.116. SMALL BUSINESS INCENTIVES. (a) In this
section, "small business" means a business owned by a person who:
(1) owns and operates not more than two vehicles, one
of which is:
(A) an on-road diesel with a pre-1994 engine
model; or
(B) a non-road diesel with an engine with
uncontrolled emissions; and
(2) has owned the vehicle described by Subdivision
(1)(A) or (B) for more than one year.
(b) The commission by rule shall develop a method of
providing fast and simple access to grants under this subchapter
for a small business.
(c) The commission shall publicize and promote the
availability of grants under this section to encourage the use of
vehicles that produce fewer emissions.
(d) On or before December 1 of each even-numbered year, the
commission shall report commission actions and results under this
section to the governor, lieutenant governor, and speaker of the
house of representatives.
SECTION 11. Section 386.202(b), Health and Safety Code, is
amended to read as follows:
(b) Programs approved under this subchapter and other
energy efficiency programs administered by the utility commission
must include energy conservation programs for the retirement of
materials and appliances that contribute to energy consumption or
peak energy demand to ensure the reduction of energy consumption,
energy demand, or peak loads, and associated emissions of air
contaminants.
SECTION 12. Section 386.252, Health and Safety Code, is
amended to read as follows:
Sec. 386.252. USE OF FUND. (a) Money in the fund may be
used only to implement and administer programs established under
the plan and shall be allocated as follows:
(1) for the diesel emissions reduction incentive
program, 87.5 [72] percent of the money in the fund, of which not
more than [three percent may be used for infrastructure projects
and not more than] 10 percent may be used for on-road diesel
purchase or lease incentives;
(2) [for the motor vehicle purchase or lease incentive
program, 15 percent of the money in the fund;
[(3) for the energy efficiency grant program, 7.5
percent of the money in the fund;
[(4)] for the new technology research and development
program, 9.5 [7.5] percent of the money in the fund, of which up to
$250,000 is allocated for administration, up to $200,000 is
allocated for a health effects study, [and] $500,000 is to be
deposited in the state treasury to the credit of the clean air
account created under Section 382.0622 to supplement funding for
air quality planning activities in affected counties, and not less
than 20 percent is to be allocated each year to support research
related to air quality for the Houston-Galveston-Brazoria and
Dallas-Fort Worth nonattainment areas by a nonprofit organization
based in Houston; [and]
(3) [(5)] for administrative costs incurred by [the
utility commission,] the commission[, the comptroller,] and the
laboratory, three percent.
(b) Up to 25 [15] percent of the money allocated under
Subsection (a) to a particular program and not expended under that
program by January [March] 1 of the second fiscal year of a fiscal
biennium may be used for another program under the plan as
determined by the commission in consultation with the advisory
board.
SECTION 13. Section 387.003(b), Health and Safety Code, is
amended to read as follows:
(b) Under the program, the Texas Council on Environmental
Technology shall provide grants to be used to support development
of emissions-reducing technologies that may be used for projects
eligible for awards under Chapter 386 and other new technologies
that show promise for commercialization. The primary objective of
this chapter is to promote the development of commercialization
technologies that will support projects that may be funded under
Chapter 386 and this chapter, including advanced technologies such
as fuel cells, catalysts, and fuel additives.
SECTION 14. Section 387.006(a), Health and Safety Code, is
amended to read as follows:
(a) An application for a technology grant under this chapter
must show clear and compelling evidence that:
(1) the proposed technology project has a strong
commercialization plan and organization; and
(2) the technology proposed for funding:
(A) is likely to be offered for commercial sale
in this state as soon as practicable but no later than [within] five
years after the date of the application for funding; and
(B) once commercialized, will offer
opportunities for projects eligible for funding under Chapter 386.
SECTION 15. Section 388.003, Health and Safety Code, is
amended by adding Subsection (i) to read as follows:
(i) A building certified by a national, state, or local
accredited energy efficiency program and determined by the
laboratory to be in compliance with the energy efficiency
requirements of this section may, at the option of the
municipality, be considered in compliance. The United States
Environmental Protection Agency's Energy Star Program
certification of energy code equivalency shall be considered in
compliance.
SECTION 16. Section 388.004, Health and Safety Code, is
amended to read as follows:
Sec. 388.004. ENFORCEMENT OF ENERGY STANDARDS OUTSIDE OF
MUNICIPALITY. (a) For construction outside of the local
jurisdiction of a municipality:
(1) a building certified by a national, state, or
local accredited energy efficiency program shall be considered in
compliance;
(2) a building with inspections from private
code-certified inspectors using the energy efficiency chapter of
the International Residential Code or International Energy
Conservation Code shall be considered in compliance; and
(3) a builder who does not have access to either of the
above methods for a building shall certify compliance using a form
provided by the laboratory, enumerating the code-compliance
features of the building.
(b) A builder shall retain until the third anniversary of
the date on which compliance is achieved the original copy of any
documentation that establishes compliance under this section. The
builder on receipt of any compliance documentation shall provide a
copy to the owner of the building.
(c) A single-family residence built in the unincorporated
area of a county the construction of which was completed on or after
September 1, 2001, but not later than August 31, 2002, shall be
considered in compliance.
SECTION 17. Chapter 388, Health and Safety Code, is amended
by adding Sections 388.009 and 388.010 to read as follows:
Sec. 388.009. ENERGY-EFFICIENT BUILDING PROGRAM. (a) In
this section, "National Housing Act" means Section 203(b), (i), or
(k) of the National Housing Act (12 U.S.C. Sections 1709(b), (i),
and (k)), as amended.
(b) The General Land Office, in consultation with the
laboratory, the commission, and an advisory committee appointed by
the General Land Office, may develop an energy-efficient building
accreditation program for buildings that exceed the building energy
performance standards under Section 388.003 by 15 percent or more.
(c) If the General Land Office adopts a program under this
section, the General Land Office, in consultation with the
laboratory, shall update the program on or before December 1 of each
even-numbered year using the best available energy-efficient
building practices.
(d) If the General Land Office adopts a program under this
section, the program shall use a checklist system to produce an
energy-efficient building scorecard to help:
(1) home buyers compare potential homes and, by
providing a copy of the completed scorecard to a mortgage lender,
qualify for energy-efficient mortgages under the National Housing
Act; and
(2) communities qualify for emissions reduction
credits by adopting codes that meet or exceed the energy-efficient
building or energy performance standards established under this
chapter.
(e) The General Land Office may establish a public
information program to inform homeowners, sellers, buyers, and
others regarding energy-efficient building ratings.
(f) If the General Land Office adopts a program under this
section, the laboratory shall establish a system to measure the
reduction in energy and emissions produced under the
energy-efficient building program and report those savings to the
commission.
Sec. 388.010. OUTREACH TO NEAR-NONATTAINMENT AREAS. The
commission shall conduct outreach to near-nonattainment areas and
affected counties on the benefits of implementing energy efficiency
initiatives, including the promotion of energy-efficient building
programs and urban heat island mitigation techniques, as a way to
meet air quality attainment goals under the federal Clean Air Act
(42 U.S.C. Section 7401 et seq.), as amended.
SECTION 18. Chapter 389, Health and Safety Code, is amended
by adding Section 389.003 to read as follows:
Sec. 389.003. COMPUTING ENERGY EFFICIENCY EMISSIONS
REDUCTIONS. The commission shall develop a method to use in
computing emissions reductions obtained through energy efficiency
initiatives.
SECTION 19. Subchapter H, Chapter 2155, Government Code, is
amended by adding Section 2155.451 to read as follows:
Sec. 2155.451. VENDORS THAT MEET OR EXCEED AIR QUALITY
STANDARDS. (a) This section applies only to a contract to be
performed, wholly or partly, in an affected county, as that term is
defined by Section 386.001, Health and Safety Code.
(b) The commission and state agencies procuring goods or
services may:
(1) give preference to goods or services of a vendor
that demonstrates that the vendor meets or exceeds any state or
federal environmental standards, including voluntary standards,
relating to air quality; or
(2) require that a vendor demonstrate that the vendor
meets or exceeds any state or federal environmental standards,
including voluntary standards, relating to air quality.
(c) The preference may be given only if the cost to the state
for the goods or services would not exceed 105 percent of the cost
of the goods or services provided by a vendor who does not meet the
standards.
SECTION 20. Subchapter Z, Chapter 271, Local Government
Code, is amended by adding Section 271.907 to read as follows:
Sec. 271.907. VENDORS THAT MEET OR EXCEED AIR QUALITY
STANDARDS. (a) In this section, "governmental agency" has the
meaning assigned by Section 271.003.
(b) This section applies only to a contract to be performed,
wholly or partly, in an affected county, as that term is defined by
Section 386.001, Health and Safety Code.
(c) A governmental agency procuring goods or services may:
(1) give preference to goods or services of a vendor
that demonstrates that the vendor meets or exceeds any state or
federal environmental standards, including voluntary standards,
relating to air quality; or
(2) require that a vendor demonstrate that the vendor
meets or exceeds any state or federal environmental standards,
including voluntary standards, relating to air quality.
(d) The preference may be given only if the cost to the
governmental agency for the goods or services would not exceed 105
percent of the cost of the goods or services provided by a vendor
who does not meet the standards.
SECTION 21. Section 151.0515, Tax Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsection (b-1)
to read as follows:
(a) In this section, "equipment" includes all off-road,
heavy-duty diesel equipment [classified as construction
equipment], other than implements of husbandry used solely for
agricultural purposes, including:
(1) pavers;
(2) tampers/rammers;
(3) plate compactors;
(4) concrete pavers;
(5) rollers;
(6) scrapers;
(7) paving equipment;
(8) surface equipment;
(9) signal boards/light plants;
(10) trenchers;
(11) bore/drill rigs;
(12) excavators;
(13) concrete/industrial saws;
(14) cement and mortar mixers;
(15) cranes;
(16) graders;
(17) off-highway trucks;
(18) crushing/processing equipment;
(19) rough terrain forklifts;
(20) rubber tire loaders;
(21) rubber tire tractors/dozers;
(22) tractors/loaders/backhoes;
(23) crawler tractors/dozers;
(24) skid steer loaders;
(25) off-highway tractors; [and]
(26) Dumpsters/tenders; and
(27) mining equipment.
(b) 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 [one] percent of the sale price or the lease or
rental amount.
(b-1) 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. 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) The surcharge shall 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 [subchapter]. The
comptroller shall adopt any additional procedures needed for the
collection, administration, and enforcement of the surcharge
authorized by this section and shall deposit all remitted
surcharges to the credit of the Texas emissions reduction plan
fund.
SECTION 22. Section 152.0215(a), Tax Code, is amended to
read as follows:
(a) A surcharge is imposed on every retail sale, [or] lease,
or use of every on-road diesel motor vehicle that is over 14,000
pounds [and is of a model year 1996 or earlier] and that is sold,
[or] leased, or used in this state. The amount of the surcharge for
a vehicle of a model year 1996 or earlier is 2.5 percent of the total
consideration and for a vehicle of a model year 1997 or later, one
percent of the total consideration.
SECTION 23. Section 224.153, Transportation Code, is
amended by adding Subsection (d) to read as follows:
(d) The department may not authorize vehicles addressed in
Subsection (c) to use a high occupancy vehicle lane if such use
would violate federal transit or highway funding restrictions.
SECTION 24. Sections 501.138(a) and (b), Transportation
Code, are amended to read as follows:
(a) An applicant for a certificate of title, other than the
state or a political subdivision of the state, must pay the county
assessor-collector a fee of:
(1) $33 if the applicant's residence is a county
located within a nonattainment area as defined under Section 107(d)
of the federal Clean Air Act (42 U.S.C. Section 7407), as amended,
or is an affected county, as defined by Section 386.001, Health and
Safety Code;
(2) $28 if the applicant's residence is any other
county; or
(3) on or after September 1, 2008, $28 regardless of
the county in which the applicant resides [$13].
(b) The county assessor-collector shall send:
(1) $5 of the fee to the county treasurer for deposit
in the officers' salary fund; [and]
(2) $8 of the fee to the department:
(A) together with the application within the time
prescribed by Section 501.023; or
(B) if the fee is deposited in an
interest-bearing account or certificate in the county depository or
invested in an investment authorized by Subchapter A, Chapter 2256,
Government Code, not later than the 35th day after the date on which
the fee is received; and
(3) the following amount to the comptroller at the
time and in the manner prescribed by the comptroller:
(A) $20 of the fee if the applicant's residence
is a county located within a nonattainment area as defined under
Section 107(d) of the federal Clean Air Act (42 U.S.C. Section
7407), as amended, or is an affected county, as defined by Section
386.001, Health and Safety Code;
(B) $15 of the fee if the applicant's residence
is any other county; or
(C) Fees collected under this subsection to be
sent to the comptroller shall be deposited as follows:
(i) before September 1, 2008, to the credit
of the Texas emissions reduction fund; and
(ii) after September 1, 2008, to the credit
of the Texas Mobility Fund.
SECTION 25. Section 545.353, Transportation Code, is
amended by adding Subsection (j) to read as follows:
(j) The commission may not determine or declare, or agree to
determine or declare, a prima facie speed limit for environmental
purposes on a part of the highway system.
SECTION 26. Sections 386.157 and 386.159, Health and Safety
Code, are repealed.
SECTION 27. (a) Except as provided by Subsection (b) of
this section, this Act takes effect immediately 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. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.
(b) Sections 21 and 22 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. If this Act does not receive the
vote necessary for effect before September 1, 2003, Sections 21 and
22 of this Act take effect September 1, 2003. The comptroller of
public accounts may adopt emergency rules for the implementation of
Sections 21 and 22 of this Act.
(c) The change in law made by Section 25 of this Act does not
affect speed limits that have been approved by the Texas
Transportation Commission before the effective date of this Act.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1365 was passed by the House on April
8, 2003, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 1365 on May 7, 2003, and requested the
appointment of a conference committee to consider the differences
between the two houses; and that the House adopted the conference
committee report on H.B. No. 1365 on June 1, 2003, by the following
vote: Yeas 132, Nays 11, 4 present, not voting; and that the House
adopted H.C.R. No. 300 authorizing certain corrections in H.B. No.
1365 on June 2, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1365 was passed by the Senate, with
amendments, on May 5, 2003, by the following vote: Yeas 31, Nays 0;
at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
1365 on June 1, 2003, by the following vote: Yeas 31, Nays 0; and
that the Senate adopted H.C.R. No. 300 authorizing certain
corrections in H.B. No. 1365 on June 2, 2003, by a viva-voce vote.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor