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AN ACT
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relating to the establishment of a program by the Department of |
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Agriculture to make grants to encourage the construction of |
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facilities that generate electric energy with certain types of |
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agricultural residues, waste, debris, or crops and to the state's |
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goal for generating renewable energy. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 2, Agriculture Code, is amended by adding |
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Chapter 22 to read as follows: |
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CHAPTER 22. AGRICULTURAL BIOMASS AND LANDFILL DIVERSION |
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INCENTIVE PROGRAM |
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Sec. 22.001. POLICY AND PURPOSE. It is the policy of this |
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state and the purpose of this chapter to reduce air pollution, |
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improve air quality, protect public health, help this state |
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diversify its energy supply, and divert waste from landfills |
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through new price-support incentives to encourage the construction |
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of facilities to generate electric energy with certain types of |
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agricultural residues, forest wood waste, urban wood waste, |
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storm-generated biomass debris, and energy-dedicated crops. |
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Sec. 22.002. DEFINITIONS. In this chapter: |
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(1) "Diverter": |
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(A) means: |
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(i) a person or facility that qualifies for |
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an exemption under Section 361.111 or 363.006, Health and Safety |
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Code; |
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(ii) a handler of nonhazardous industrial |
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waste that is registered or permitted under Chapter 361, Health and |
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Safety Code; or |
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(iii) a facility that separates recyclable |
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materials from a municipal solid waste stream and that is |
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registered or permitted under Chapter 363, Health and Safety Code, |
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as a municipal solid waste management facility; and |
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(B) does not include a facility that uses biomass |
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to generate electric energy. |
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(2) "Farmer" means the owner or operator of an |
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agricultural facility that produces qualified agricultural |
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biomass. |
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(3) "Forest wood waste" includes residual tops and |
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limbs of trees, unused cull trees, pre-commercial thinnings, and |
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wood or debris from noncommercial tree species, slash, or brush. |
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(4) "Logger" means a harvester of forest wood waste, |
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regardless of whether the harvesting occurs as a part of the |
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harvesting of merchantable timber. |
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(5) "Qualified agricultural biomass" means: |
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(A) agricultural residues that are of a type that |
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historically have been disposed of in a landfill, relocated from |
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their point of origin and stored in a manner not intended to enhance |
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or restore the soil, burned in open fields in the area from which |
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they are derived, or burned in fields and orchards that continue to |
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be used for the production of agricultural goods, and includes: |
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(i) field or seed crop residues, including |
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straw from rice or wheat; |
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(ii) fruit or nut crop residues, including |
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orchard or vineyard prunings and removals; |
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(iii) forest wood waste or urban wood |
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waste; and |
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(iv) agricultural livestock waste |
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nutrients; and |
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(B) a crop grown and used specifically for its |
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energy generation value, including a crop consisting of a |
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fast-growing tree species. |
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(6) "Storm-generated biomass debris" means |
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biomass-based residues that result from a natural weather event, |
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including a hurricane, tornado, or flood, that would otherwise be |
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disposed of in a landfill or burned in the open. The term includes: |
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(A) trees, brush, and other vegetative matter |
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that have been damaged or felled by severe weather but that would |
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not otherwise qualify as forest wood waste; and |
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(B) clean solid wood waste that has been damaged |
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by severe weather but that would not otherwise qualify as urban wood |
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waste. |
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(7) "Urban wood waste" means: |
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(A) solid wood waste material, other than |
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pressure-treated, chemically treated, or painted wood waste, that |
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is free of rubber, plastic, glass, nails, or other inorganic |
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material; and |
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(B) landscape or right-of-way trimmings. |
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Sec. 22.003. GRANT PROGRAM. (a) The department shall |
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develop and administer an agricultural biomass and landfill |
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diversion incentive program to make grants to farmers, loggers, and |
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diverters who provide qualified agricultural biomass, forest wood |
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waste, urban wood waste, or storm-generated biomass debris to |
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facilities that use biomass to generate electric energy in order to |
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provide an incentive for the construction of facilities for that |
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purpose and to: |
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(1) promote economic development; |
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(2) encourage the use of renewable sources in the |
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generation of electric energy; |
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(3) reduce air pollution caused by burning |
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agricultural biomass, forest wood waste, urban wood waste, or |
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storm-generated biomass debris in open fields; and |
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(4) divert waste from landfills. |
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(b) Subject to Section 22.005, a farmer, logger, or diverter |
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is entitled to receive a grant in the amount of $20 for each |
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bone-dry ton of qualified agricultural biomass, forest wood waste, |
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urban wood waste, or storm-generated biomass debris provided by the |
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farmer, logger, or diverter in a form suitable for generating |
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electric energy to a facility that: |
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(1) is located in this state; |
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(2) was placed in service after August 31, 2009; |
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(3) generates electric energy sold to a third party by |
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using qualified agricultural biomass, forest wood waste, urban wood |
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waste, or storm-generated biomass debris; |
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(4) uses the best available emissions control |
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technology, considering the technical practicability and economic |
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reasonableness of reducing or eliminating the air contaminant |
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emissions resulting from the facility; |
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(5) maintains its emissions control equipment in good |
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working order; and |
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(6) is in compliance with its operating permit issued |
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by the Texas Commission on Environmental Quality under Chapter 382, |
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Health and Safety Code. |
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(c) The commissioner by rule may authorize a grant to be |
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made for providing each bone-dry ton of a type or source of |
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qualified agricultural biomass, forest wood waste, urban wood |
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waste, or storm-generated biomass debris in an amount that is |
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greater than the amount provided by Subsection (b) if the |
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commissioner determines that a grant in a greater amount is |
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necessary to provide an adequate incentive to use that type or |
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source of qualified agricultural biomass, forest wood waste, urban |
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wood waste, or storm-generated biomass debris to generate electric |
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energy. |
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(d) The Public Utility Commission of Texas and the Texas |
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Commission on Environmental Quality shall assist the department as |
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necessary to enable the department to determine whether a facility |
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meets the requirements of Subsection (b) for purposes of the |
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eligibility of farmers, loggers, and diverters for grants under |
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this chapter. |
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(e) To receive a grant under this chapter, a farmer, logger, |
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or diverter must deliver qualified agricultural biomass, forest |
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wood waste, urban wood waste, or storm-generated biomass debris to |
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a facility described by Subsection (b). The operator of each |
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facility described by that subsection shall: |
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(1) verify and document the amount of qualified |
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agricultural biomass, forest wood waste, urban wood waste, or |
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storm-generated biomass debris delivered to the facility for the |
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generation of electric energy; and |
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(2) make a grant on behalf of the department in the |
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appropriate amount to each farmer, logger, or diverter who delivers |
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qualified agricultural biomass, forest wood waste, urban wood |
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waste, or storm-generated biomass debris to the facility. |
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(f) The department quarterly shall reimburse each operator |
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of a facility described by Subsection (b) for grants under this |
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chapter made by the operator during the preceding quarter to |
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eligible farmers, loggers, and diverters. To receive reimbursement |
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for one or more grants, an operator of a facility described by that |
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subsection must file an application with the department that |
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verifies the amount of the grants made by the operator during the |
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preceding quarter for which the operator seeks reimbursement. |
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(g) The department may contract with and provide for the |
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compensation of private consultants, contractors, and other |
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persons to assist the department in administering the agricultural |
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biomass and landfill diversion incentive program. |
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Sec. 22.004. AGRICULTURAL BIOMASS AND LANDFILL DIVERSION |
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INCENTIVE PROGRAM ACCOUNT. (a) The agricultural biomass and |
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landfill diversion incentive program account is an account in the |
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general revenue fund. The account is composed of: |
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(1) legislative appropriations; |
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(2) gifts, grants, donations, and matching funds |
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received under Subsection (b); and |
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(3) other money required by law to be deposited in the |
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account. |
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(b) The department may solicit and accept gifts in kind, |
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donations, and grants of money from the federal government, local |
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governments, private corporations, or other persons to be used for |
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the purposes of this chapter. |
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(c) Money in the account may be appropriated only to the |
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department for the purpose of implementing and maintaining the |
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agricultural biomass and landfill diversion incentive program. |
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(d) Income from money in the account shall be credited to |
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the account. |
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(e) The account is exempt from the application of Section |
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403.095, Government Code. |
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Sec. 22.005. LIMITATION ON GRANT AMOUNT. (a) The total |
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amount of grants awarded by operators of facilities under Section |
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22.003 and by the department under Section 22.006 during each state |
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fiscal year may not exceed $30 million. |
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(b) During each state fiscal year, the department may not |
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pay to an operator of a facility as reimbursements under Section |
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22.003 or grants under Section 22.006 an amount that exceeds $6 |
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million. |
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Sec. 22.006. ELIGIBILITY OF OPERATORS OF ELECTRIC ENERGY |
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GENERATION FACILITIES FOR GRANTS. (a) Except as provided by |
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Subsection (b), an operator of a facility that uses biomass to |
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generate electric energy is not eligible to receive a grant under |
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this chapter or under any other state law for the generation of |
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electric energy with qualified agricultural biomass, forest wood |
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waste, urban wood waste, or storm-generated biomass debris for |
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which a farmer, logger, or diverter has received a grant under this |
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chapter. |
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(b) An operator of a facility that uses biomass to generate |
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electric energy may receive a grant from the department under this |
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chapter for generating electric energy with qualified agricultural |
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biomass, forest wood waste, urban wood waste, or storm-generated |
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biomass debris that arrives at the facility in a form unsuitable for |
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generating electric energy and that the facility processes into a |
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form suitable for generating electric energy. |
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(c) To receive a grant from the department under Subsection |
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(b), an operator of a facility must file an application with the |
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department that verifies the amount of qualified agricultural |
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biomass, forest wood waste, urban wood waste, or storm-generated |
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biomass debris that the facility processed into a form suitable for |
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generating electric energy. The department shall make grants to |
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eligible operators of facilities quarterly, subject to |
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appropriations. The provisions of this chapter governing grants to |
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farmers, loggers, and diverters, including the provisions |
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governing the amount of a grant, apply to a grant from the |
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department under Subsection (b) to the extent they can be made |
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applicable. |
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Sec. 22.007. RULES. The commissioner, in consultation with |
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the Public Utility Commission of Texas and the Texas Commission on |
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Environmental Quality, shall adopt rules to implement this chapter. |
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Sec. 22.008. AVAILABILITY OF FUNDS. Notwithstanding any |
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other provision of this chapter, the department is not required to |
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administer this chapter or adopt rules under this chapter, and the |
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operator of a facility described by Section 22.003(b) is not |
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required to make a grant on behalf of the department, until funds |
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are appropriated for those purposes. |
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Sec. 22.009. EXPIRATION OF PROGRAM AND CHAPTER. The |
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agricultural biomass and landfill diversion incentive program |
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terminates on August 31, 2019. On September 1, 2019: |
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(1) any unobligated funds remaining in the |
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agricultural biomass and landfill diversion incentive program |
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account shall be transferred to the undedicated portion of the |
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general revenue fund; and |
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(2) this chapter expires. |
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SECTION 2. Section 39.904, Utilities Code, is amended by |
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amending Subsection (m) and adding Subsections (m-1), (m-2), (m-3), |
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and (o) to read as follows: |
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(m) A renewable energy credit retired for purposes other |
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than to meet the requirements of Subsection (c)(1) may not affect |
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the minimum annual renewable energy requirement under Subsection |
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(c)(1) for a retail electric provider, municipally owned utility, |
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or electric cooperative. |
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(m-1) As provided by this subsection, the commission shall |
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reduce the requirement under Subsection (c)(1) for a retail |
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electric provider, municipally owned utility, or electric |
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cooperative that is subject to a renewable energy requirement under |
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this section and that serves a customer receiving electric service |
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at transmission-level voltage if, before any year for which the |
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commission calculates renewable energy requirements under |
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Subsection (c)(1), the customer notifies the commission in writing |
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that the customer chooses not to support the goal for renewable |
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energy generation under this section for that year. The commission |
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shall exclude from the calculation of a retail electric provider's, |
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municipally owned utility's, or electric cooperative's requirement |
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under Subsection (c)(1) energy sold by the retail electric |
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provider, municipally owned utility, or electric cooperative at |
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transmission-level voltage to customers who have submitted the |
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notice to the commission under this subsection for the applicable |
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year. |
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(m-2) The commission shall determine the reporting |
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requirements and schedule necessary to implement Subsections (m) |
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and (m-1). |
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(m-3) Subsections (m), (m-1), and (m-2) do not alter the |
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renewable energy goals or targets established in Subsection (a) or |
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reduce the minimum statewide renewable energy requirements of |
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Subsection (c)(1) [Notwithstanding any other provision of law, the
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commission shall ensure that all renewable capacity installed in
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this state and all renewable energy credits awarded, produced,
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procured, or sold from renewable capacity in this state are counted
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toward the goal in Subsection (a)]. |
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(o) The commission may establish an alternative compliance |
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payment. An entity that has a renewable energy purchase |
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requirement under this section may elect to pay the alternative |
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compliance payment instead of applying renewable energy credits |
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toward the satisfaction of the entity's obligation under this |
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section. The commission may establish a separate alternative |
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compliance payment for the goal of 500 megawatts of capacity from |
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renewable energy technologies other than wind energy. The |
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alternative compliance payment for a renewable energy purchase |
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requirement that could be satisfied with a renewable energy credit |
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from wind energy may not be less than $2.50 per credit or greater |
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than $20 per credit. Prior to September 1, 2009, an alternative |
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compliance payment under this subsection may not be set above $5 per |
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credit. In implementing this subsection, the commission shall |
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consider: |
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(1) the effect of renewable energy credit prices on |
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retail competition; |
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(2) the effect of renewable energy credit prices on |
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electric rates; |
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(3) the effect of the alternative compliance payment |
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level on the renewable energy credit market; and |
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(4) any other factors necessary to ensure the |
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continued development of the renewable energy industry in this |
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state while protecting ratepayers from unnecessary rate increases. |
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SECTION 3. (a) The commissioner of agriculture, in |
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consultation with the Texas Forest Service, shall conduct a study |
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to determine the volume of wood waste in the East Texas and Central |
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Texas forest regions of this state. |
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(b) Not later than January 1, 2009, the commissioner of |
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agriculture shall prepare and present to the governor, the |
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lieutenant governor, the speaker of the house of representatives, |
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and each member of the legislature a report describing the results |
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of the study. |
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SECTION 4. (a) The Public Utility Commission of Texas shall |
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conduct a study of the effect that Section 39.904, Utilities Code, |
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has had on: |
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(1) market power in this state; and |
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(2) the rates paid for electricity by residential |
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customers in this state. |
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(b) Not later than January 1, 2009, the Public Utility |
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Commission of Texas shall prepare and present to the governor, |
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lieutenant governor, and speaker of the house of representatives a |
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report describing the results of the study that specifies any |
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changes in market power and any costs to or savings for residential |
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customers because of the implementation of Section 39.904, |
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Utilities Code. |
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SECTION 5. This Act takes effect September 1, 2007. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1090 was passed by the House on May 1, |
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2007, by the following vote: Yeas 144, Nays 1, 1 present, not |
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voting; that the House refused to concur in Senate amendments to |
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H.B. No. 1090 on May 21, 2007, and requested the appointment of a |
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conference committee to consider the differences between the two |
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houses; and that the House adopted the conference committee report |
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on H.B. No. 1090 on May 26, 2007, by the following vote: Yeas 139, |
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Nays 4, 2 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1090 was passed by the Senate, with |
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amendments, on May 17, 2007, by the following vote: Yeas 28, Nays |
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3; at the request of the House, the Senate appointed a conference |
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committee to consider the differences between the two houses; and |
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that the Senate adopted the conference committee report on H.B. No. |
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1090 on May 27, 2007, by the following vote: Yeas 27, Nays 3. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |