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A BILL TO BE ENTITLED
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AN ACT
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relating to incentives for and the regulation of biofuel production |
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and distribution in this state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Chapter 16, Agriculture Code, is |
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amended to read as follows: |
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CHAPTER 16. FUEL ETHANOL, RENEWABLE METHANE, AND BIODIESEL |
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PRODUCTION INCENTIVE PROGRAM |
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SECTION 2. Section 16.001, Agriculture Code, is amended by |
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amending Subdivisions (1) and (6) and adding Subdivision (4-a) to |
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read as follows: |
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(1) "Account" means the fuel ethanol, renewable |
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methane, and biodiesel production account. |
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(4-a) "Renewable methane" means methane gas derived |
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from animal waste or an agricultural byproduct, including creamery |
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or fruit waste or corn silage. |
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(6) "Producer" means a person who operates a fuel |
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ethanol, renewable methane, or biodiesel plant in this state. |
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SECTION 3. Sections 16.002(a) and (b), Agriculture Code, |
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are amended to read as follows: |
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(a) To be eligible for a grant for fuel ethanol, renewable |
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methane, or biodiesel produced in a plant, a producer must apply to |
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the office for the registration of the plant. A producer may apply |
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for the registration of more than one plant. |
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(b) An application for the registration of a plant must show |
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to the satisfaction of the office that: |
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(1) the plant is capable of producing fuel ethanol, |
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renewable methane, or biodiesel; |
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(2) the producer has made a substantial investment of |
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resources in this state in connection with the plant; and |
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(3) the plant constitutes a permanent fixture in this |
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state. |
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SECTION 4. Section 16.003(a), Agriculture Code, is amended |
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to read as follows: |
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(a) On or before the fifth day of each month, a producer |
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shall report to the office on: |
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(1) the number of gallons of fuel ethanol or biodiesel |
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or MMBtu of renewable methane produced at each registered plant |
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operated by the producer during the preceding month; |
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(2) the number of gallons of fuel ethanol or biodiesel |
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imported into this state by the producer during the preceding |
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month; |
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(3) the number of gallons of fuel ethanol or biodiesel |
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sold or blended with motor fuels by the producer during the |
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preceding month; and |
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(4) the total value of agricultural products consumed |
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in each registered plant operated by the producer during the |
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preceding month. |
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SECTION 5. The heading to Section 16.004, Agriculture Code, |
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is amended to read as follows: |
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Sec. 16.004. FUEL ETHANOL, RENEWABLE METHANE, AND BIODIESEL |
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PRODUCTION ACCOUNT. |
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SECTION 6. Section 16.004(a), Agriculture Code, is amended |
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to read as follows: |
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(a) The fuel ethanol, renewable methane, and biodiesel |
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production account is an account in the general revenue fund that |
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may be appropriated only to the office for the purposes of this |
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chapter, including the making of grants under this chapter. |
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SECTION 7. The heading to Section 16.005, Agriculture Code, |
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is amended to read as follows: |
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Sec. 16.005. FEE ON FUEL ETHANOL, RENEWABLE METHANE, AND |
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BIODIESEL PRODUCTION. |
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SECTION 8. Sections 16.005(a), (b), and (d), Agriculture |
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Code, are amended to read as follows: |
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(a) The office shall impose a fee on each producer in an |
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amount equal to 3.2 cents for each gallon of fuel ethanol or MMBtu |
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of renewable methane and 1.6 cents for each gallon of biodiesel |
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produced in each registered plant operated by the producer. |
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(b) For each fiscal year, the office may not impose fees on a |
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producer for more than 18 million gallons of fuel ethanol or |
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biodiesel or MMBtu of renewable methane produced at any one |
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registered plant. |
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(d) The office may not impose fees on a producer for fuel |
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ethanol, renewable methane, or biodiesel produced at a registered |
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plant after the 10th anniversary of the date production from the |
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plant begins. |
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SECTION 9. The heading to Section 16.006, Agriculture Code, |
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is amended to read as follows: |
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Sec. 16.006. FUEL ETHANOL, RENEWABLE METHANE, AND BIODIESEL |
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GRANTS. |
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SECTION 10. Sections 16.006(a), (b), (c), and (e), |
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Agriculture Code, are amended to read as follows: |
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(a) The office, after consultation with the department, |
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shall make grants to producers as an incentive for the development |
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of the fuel ethanol, renewable methane, and biodiesel industry and |
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agricultural production in this state. |
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(b) A producer is entitled to receive from the account 20 |
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cents for each gallon of fuel ethanol or MMBtu of renewable methane |
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and 10 cents for each gallon of biodiesel produced in each |
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registered plant operated by the producer until the 10th |
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anniversary of the date production from the plant begins. |
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(c) For each fiscal year a producer may not receive grants |
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for more than 18 million gallons of fuel ethanol or biodiesel or |
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MMBtu of renewable methane produced at any one registered plant. |
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(e) If the office determines that the amount of money |
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credited to the account is not sufficient to distribute the full |
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amount of grant funds to eligible producers as provided by this |
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chapter for a fiscal year, the office shall proportionately reduce |
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the amount of each grant for each gallon of fuel ethanol or |
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biodiesel or each MMBtu of renewable methane produced as necessary |
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to continue the incentive program during the remainder of the |
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fiscal year. |
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SECTION 11. Chapter 16, Agriculture Code, is amended by |
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adding Section 16.007 to read as follows: |
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Sec. 16.007. REGULATION OF FUEL ETHANOL OR BIODIESEL IN A |
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MANNER MORE STRINGENT THAN FEDERAL LAW. (a) In this section, |
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"state agency" has the meaning assigned by Section 315.002, |
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Government Code. |
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(b) Except as provided by this section and the Reid vapor |
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pressure requirements for gasoline used as control measures in the |
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state implementation plan, a state agency may not adopt or |
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implement rules in a manner that restricts the production or |
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distribution of fuel ethanol or biodiesel if the rules impose a |
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restriction more stringent than federal law provides. |
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(c) After January 1, 2009, Subsection (b) does not apply to |
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a rule adopted by the Texas Commission on Environmental Quality if |
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that commission determines that, without imposing the restriction |
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provided by the rule, emissions generated by using fuel ethanol or |
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biodiesel will materially jeopardize compliance with the state |
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implementation plan for attaining national ambient air quality |
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standards. |
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SECTION 12. (a) The State Energy Conservation Office shall |
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prepare a report that provides a coherent strategy for and |
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recommends mechanisms for increasing the availability of |
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low-emission automotive fuels. The report must include: |
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(1) a list of recommended fuels; |
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(2) proposed mechanisms for increasing the |
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availability of the fuels recommended under Subdivision (1) of this |
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subsection to the majority of Texas drivers by 2010, including: |
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(A) rebates for retrofitting vehicles to make |
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them compatible with the recommended fuels, if necessary; |
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(B) procurement agreements by municipalities and |
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state agencies to purchase vehicles that are compatible with the |
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recommended fuels; and |
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(C) market incentives to producers and |
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distributors of the recommended fuels; |
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(3) an assessment of: |
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(A) the anticipated effects on ground-level |
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ozone levels in urban areas as a result of using the recommended |
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fuels; |
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(B) the cost to the state to implement the |
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mechanisms proposed under Subdivision (2) of this subsection; |
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(C) the possible benefits to the state in reduced |
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health care costs that may result from using the recommended fuels; |
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(D) the number of new jobs expected to be created |
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in this state that may result from using the recommended fuels; |
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(E) projected costs to Texas consumers of using |
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the recommended fuels; |
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(F) the anticipated effect on state revenue as a |
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result of new economic activity related to the production, |
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distribution, and use of the recommended fuels; and |
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(G) the net reduction of emissions projected to |
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result from using the recommended fuels; and |
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(4) any statutory changes needed to implement the |
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strategy or a recommended mechanism. |
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(b) For each fuel in the list of fuels recommended under |
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this section, the State Energy Conservation Office shall include an |
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analysis of the life cycle emissions for the fuel and a |
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determination of how well the fuel achieves the goal of producing at |
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least 20 percent less emissions over its life cycle than |
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conventional gasoline. The life cycle of a fuel includes emissions |
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that occur in the production of the fuel. If part of the fuel's |
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production process includes carbon capture and storage, also known |
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as carbon sequestration, the resulting reduction in carbon dioxide |
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emissions is included in computing the life cycle emissions for the |
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fuel. |
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(c) The State Energy Conservation Office may establish a |
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task force to assist in developing the strategy and recommendations |
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required by Subsections (a) and (b) of this section. |
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(d) Not later than October 1, 2008, the State Energy |
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Conservation Office shall deliver the report required by this |
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section to the governor, the lieutenant governor, the speaker of |
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the house of representatives, and the standing committees of the |
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legislature with primary jurisdiction over environmental, |
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economic, and transportation matters. |
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SECTION 13. The changes in a fee charged or a payment made |
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for the production of biodiesel under Sections 16.005 and 16.006, |
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Agriculture Code, as amended by this Act, apply only to biodiesel |
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produced on or after the effective date of this Act. |
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SECTION 14. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2007. |
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* * * * * |