By: Averitt, et al. S.B. No. 12

Substitute the following for S.B. No. 12:

By: Hancock C.S.S.B. No. 12

A BILL TO BE ENTITLED

AN ACT

relating to programs for the enhancement of air quality, including energy efficiency standards in state purchasing and energy consumption; providing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. LOW-INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND

ACCELERATED VEHICLE RETIREMENT PROGRAM

SECTION 1.01. Section 382.003, Health and Safety Code, is amended by adding Subdivisions (7-a), (9-a), and (10-a) to read as follows:

(7-a) "Hybrid motor vehicle" means a motor vehicle that draws propulsion energy from both gasoline or conventional diesel fuel and a rechargeable energy storage system.

(9-a) "Motor vehicle" means a fully self-propelled vehicle having four wheels that has as its primary purpose the transport of a person or persons, or property, on a public highway.

(10-a) "Qualifying motor vehicle" means a motor vehicle that has a current emissions inspection sticker and meets the requirements of Section 382.210(b).

SECTION 1.02. Subsection (b), Section 382.0622, Health and Safety Code, is amended to read as follows:

(b) Except as provided by Subsection [Subsections] (b-1) [and (e)], Clean Air Act fees shall be deposited in the state treasury to the credit of the clean air account and shall be used to safeguard the air resources of the state.

SECTION 1.03. Subsection (a), Section 382.203, Health and Safety Code, is amended to read as follows:

(a) The inspection and maintenance program applies to any [gasoline-powered] vehicle that is:

(1) required to be registered in and is primarily operated in an affected county; and

(2) at least two years old and newer [less] than model year 1980 [25 years old]; or

(3) subject to test-on-resale requirements under Section 548.3011, Transportation Code.

SECTION 1.04. Section 382.209, Health and Safety Code, is amended by amending Subsections (b), (e), and (g) and adding Subsections (i) and (j) to read as follows:

(b) The commission shall provide funding for local low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement programs with available funds collected under Section 382.202, 382.302, or other designated and available funds. The programs shall be administered in accordance with Chapter 783, Government Code. Program [Programmatic] costs may include call center management, application oversight, invoice analysis, education, outreach, and advertising. In a county with a vehicle emissions inspection and maintenance program under Section 382.202, not more than 10 percent of the money provided to a local low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program under this section may be used for the administration of the programs. In a county with a vehicle emissions inspection and maintenance program under Section 382.302, the commission shall provide 10 percent of all the fees collected in that county for a low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program under this section for the administration of the program.

(e) A vehicle is not eligible to participate in a low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program established under this section unless:

(1) the vehicle is capable of being operated;

(2) the registration of the vehicle:

(A) is current; and

(B) reflects that the vehicle has been registered in the county implementing the program for the 12 months preceding the application for participation in the program;

(3) the commissioners court of the county administering the program determines that the vehicle meets the eligibility criteria adopted by the commission, the Texas Department of Transportation, and the Public Safety Commission; [and]

(4) if the vehicle is to be repaired, the repair is done by a repair facility recognized by the Department of Public Safety, which may be an independent or private entity licensed by the state; and

(5) if the vehicle is to be retired under this subsection and Section 382.213, the replacement vehicle is a qualifying motor vehicle.

(g) A participating county may contract with any appropriate entity, including the regional council of governments or the metropolitan planning organization in the appropriate region, or with another county for services necessary to implement the participating county's low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program. The participating counties in a nonattainment region or counties participating in an early action compact under Subchapter H may agree to have the money collected in any one county be used in any other participating county in the same region. [The participating counties may also agree to contract with any appropriate entity, including the regional metropolitan planning organization or council of governments, to implement a program under Section 382.217.]

(i) Notwithstanding the vehicle replacement requirements provided by Subsection (d)(2), the commission by rule may provide monetary or other compensatory assistance under the low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program, subject to the availability of funds, for the replacement of a vehicle that meets the following criteria:

(1) the vehicle is at least 10 years old;

(2) the vehicle owner meets applicable financial eligibility criteria;

(3) the vehicle meets the requirements provided by Subsections (e)(1) and (2); and

(4) the vehicle has passed a Department of Public Safety motor vehicle safety inspection or safety and emissions inspection within the 15-month period before the application is submitted.

(j) The commission may provide monetary or other compensatory assistance under the low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program for a replacement vehicle or replacement assistance for a pre-1996 model year replacement vehicle that passes the required United States Environmental Protection Agency Start-Up Acceleration Simulation Mode Standards emissions test but that would have failed the United States Environmental Protection Agency Final Acceleration Simulation Mode Standards emissions test or failed to meet some other criterion determined by the commission; provided, however, that a replacement vehicle under this subsection must be a qualifying motor vehicle.

SECTION 1.05. Section 382.210, Health and Safety Code, is amended to read as follows:

Sec. 382.210. IMPLEMENTATION GUIDELINES AND REQUIREMENTS. (a) The commission by rule shall adopt guidelines to assist a participating county in implementing a low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program authorized under Section 382.209. The guidelines at a minimum shall recommend:

(1) a minimum and maximum amount for repair assistance;

(2) a minimum and maximum amount toward the purchase price of a replacement vehicle qualified for the accelerated retirement program, based on vehicle type and model year, with the maximum amount not to exceed:

(A) $3,000 for a replacement vehicle of the latest model year, except as provided by Paragraph E;

(B) $2,500 for a replacement vehicle of the previous two model years, except as provided by Paragraph F;

(C) $2,000 for a replacement vehicle the model year of which is more than two years but is five years or less before the year in which the vehicle is purchased as a replacement vehicle, except as provided by Paragraph F;

(D) $1,500 for a replacement vehicle the model year of which is more than five years but is 10 years or less before the year in which the vehicle is purchased as a replacement vehicle;

(E) $5,000 for a replacement hybrid motor vehicle of the latest model year; and

(F) $3,500 for a replacement hybrid motor vehicle of the preceding five model years;

(3) criteria for determining eligibility, taking into account:

(A) the vehicle owner's income, provided that an eligible vehicle owner's income may not exceed 300 percent of the federal poverty level;

(B) the fair market value of the vehicle; and

(C) any other relevant considerations;

(4) safeguards for preventing fraud in the repair, purchase, or sale of a vehicle in the program; and

(5) procedures for determining the degree and amount of repair assistance a vehicle is allowed, based on:

(A) the amount of money the vehicle owner has spent on repairs;

(B) the vehicle owner's income; and

(C) any other relevant factors.

(b) A replacement vehicle described by Subsection (a)(2) must have a gross vehicle weight rating of less than 10,000 pounds.

(c) A participating county shall provide an electronic means for distributing vehicle repair or replacement funds once all program criteria have been met with regard to the repair or replacement. The county shall ensure that funds are transferred to a participating dealer under this section not later than five business days after the date the county receives proof of the sale and any required administrative documents from the participating dealer.

(d) In rules adopted under this section, the commission shall require a procedure that:

(1) produces a document confirming that a person is eligible to purchase a replacement vehicle in the manner provided by this chapter, and the amount of money available to the participating purchaser;

(2) provides that a person who seeks to purchase a replacement vehicle in the manner provided by this chapter is required to have the document required by Subdivision (1) before the person enters into negotiation for a replacement vehicle in the manner provided by this chapter; and

(3) provides that a participating dealer who relies on a document issued as required by Subdivision (1) has no duty to otherwise confirm the eligibility of a person to purchase a replacement vehicle in the manner provided by this chapter.

SECTION 1.06. Section 382.213, Health and Safety Code, is amended by adding Subsections (d) through (i) to read as follows:

(d) Notwithstanding Subsection (a)(3), the dismantler of a vehicle shall scrap the emissions control equipment, power train, and engine. The dismantler shall certify that those parts have been scrapped and not resold into the marketplace. A person who causes, suffers, allows, or permits a violation of this subsection or of a rule adopted under this section is subject to a civil penalty under Subchapter D, Chapter 7, Water Code, for each violation. For purposes of this subsection, a separate violation occurs with each fraudulent certification or prohibited resale.

(e) Except as provided by Subsection (d), vehicle parts may be resold in any state.

(f) Any dismantling of vehicles or salvaging of steel under this section must be performed at a facility located in this state.

(g) In dismantling a vehicle under this section, the dismantler shall remove any mercury switches in accordance with state and federal law.

(h) For purposes of this section, the commission shall adopt rules defining "emissions control equipment," "power train," and "engine."

(i) Notwithstanding any other provision of this section, and except as provided by this subsection, a dealer is in compliance with this section and incurs no civil or criminal liability as a result of the disposal of a replaced vehicle if the dealer produces proof of transfer of the replaced vehicle by the dealer to a dismantler. The defense provided by this subsection is not available to a dealer who knowingly and intentionally conspires with another person to violate this section.

SECTION 1.07. Subchapter G, Chapter 382, Health and Safety Code, is amended by adding Section 382.219 to read as follows:

Sec. 382.219. PURCHASE OF REPLACEMENT VEHICLE; AUTOMOBILE DEALERSHIPS. (a) An amount described by Section 382.210(a)(2) may be used as a down payment toward the purchase of a replacement vehicle.

(b) An automobile dealer that participates in the procedures and programs offered by this chapter must be located in this state. A dealer is not required to participate in the procedures and programs provided by this chapter.

SECTION 1.08. Subchapter G, Chapter 382, Health and Safety Code, is amended by adding Section 382.220 to read as follows:

Sec. 382.220. USE OF FUNDING FOR LOCAL INITIATIVE PROJECTS. (a) Money that is made available to participating counties under Section 382.202(g) or 382.302 may be appropriated only for programs administered in accordance with Chapter 783, Government Code, to improve air quality. A participating county may agree to contract with any appropriate entity, including a metropolitan planning organization or a council of governments to implement a program under Section 382.202, 382.209, or this section.

(b) A program under this section must be implemented in consultation with the commission and may include a program to:

(1) expand and enhance the AirCheck Texas Repair and Replacement Assistance Program;

(2) develop and implement a program or system that remotely determines vehicle emissions and notifies the vehicle's operator;

(3) develop and implement projects to implement the commission's smoking vehicle program;

(4) develop and implement projects for coordinating with local law enforcement officials to reduce the use of counterfeit state inspection stickers by providing local law enforcement officials with funds to identify vehicles with counterfeit state inspection stickers and to carry out appropriate actions;

(5) develop and implement programs to enhance transportation system improvements; or

(6) develop and implement new air control strategies designed to assist local areas in complying with state and federal air quality rules and regulations.

(c) Money that is made available for the implementation of a program under Subsection (b) may be expended for call center management, application oversight, invoice analysis, education, outreach, or advertising purposes.

(d) Fees collected under Sections 382.202 and 382.302 may be used, in an amount not to exceed $10 million per fiscal year, for projects described by Subsection (b). The fees may be made available only to counties participating in the low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement programs created under Section 382.209.

SECTION 1.09. Subsection (b), Section 152.002, Tax Code, is amended to read as follows:

(b) "Total consideration" does not include:

(1) a cash discount;

(2) a full cash or credit refund to a customer of the sales price of a motor vehicle returned to the seller;

(3) the amount charged for labor or service rendered in installing, applying, remodeling, or repairing the motor vehicle sold;

(4) a financing, carrying, or service charge or interest on credit extended on a motor vehicle sold under a conditional sale or other deferred payment contract;

(5) the value of a motor vehicle taken by a seller as all or a part of the consideration for sale of another motor vehicle, including any cash payment to the buyer under Section 348.404, Finance Code;

(6) a charge for transportation of the motor vehicle after a sale; [or]

(7) motor vehicle inventory tax; or

(8) an amount made available to the customer under Subchapter G, Chapter 382, Health and Safety Code.

SECTION 1.10. Section 7.102, Water Code, is amended to read as follows:

Sec. 7.102. MAXIMUM PENALTY. A person who causes, suffers, allows, or permits a violation of a statute, rule, order, or permit relating to Chapter 37 of this code, Chapter 366, 371, or 372, Health and Safety Code, Subchapter G, Chapter 382, Health and Safety Code, or Chapter 1903, Occupations Code, shall be assessed for each violation a civil penalty not less than $50 nor greater than $5,000 for each day of each violation as the court or jury considers proper. A person who causes, suffers, allows, or permits a violation of a statute, rule, order, or permit relating to any other matter within the commission's jurisdiction to enforce, other than violations of Chapter 11, 12, 13, 16, or 36 of this code, or Chapter 341, Health and Safety Code, shall be assessed for each violation a civil penalty not less than $50 nor greater than $25,000 for each day of each violation as the court or jury considers proper. Each day of a continuing violation is a separate violation.

SECTION 1.11. The following provisions of the Health and Safety Code are repealed:

(1) Subsection (e), Section 382.0622;

(2) Subsections (q) and (r), Section 382.202; and

(3) Section 382.217.

SECTION 1.12. The Texas Commission on Environmental Quality shall review its current cutpoint levels for nitrogen oxide emissions and determine whether a lower cutpoint standard would best serve the interest of the public health and welfare. The determination shall be made by rule not later than January 1, 2008. If the commission adopts a lower cutpoint standard, the commission shall make the low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program under Section 382.209, Health and Safety Code, as amended by this article, available to owners of vehicles that did not meet the prior, more stringent standard.

SECTION 1.13. (a) The Texas Commission on Environmental Quality shall seek to work in partnership with automobile manufacturers and dealers in the state to increase public awareness of and participation in the low-income vehicle repair assistance, retrofit, and accelerated vehicle retirement program under Section 382.209, Health and Safety Code, as amended by this article.

(b) Funding for the partnership described by Subsection (a) of this section shall be used exclusively for the purpose of publicizing the program.

SECTION 1.14. (a) The Texas Commission on Environmental Quality shall seek to work in partnership with the steel industry and automobile dismantlers to ensure that vehicles being replaced are scrapped and that proof of scrapping is provided to the commission.

(b) Not later than January 1, 2008, the Texas Commission on Environmental Quality shall adopt procedures for certifying that emissions control equipment and vehicle engines have been scrapped and not resold into the marketplace and shall by rule define "emissions control equipment," "power train," and "engine," as required by Section 382.213, Health and Safety Code, as amended by this article.

ARTICLE 2. TEXAS EMISSIONS REDUCTION PLAN

SECTION 2.01. Section 386.002, Health and Safety Code, is amended to read as follows:

Sec. 386.002. EXPIRATION. This chapter expires August 31, 2013 [2010].

SECTION 2.02. Subsection (a), Section 386.052, Health and Safety Code, is amended to read as follows:

(a) In administering the plan established under this chapter and in accordance with the requirements of this chapter, the commission shall:

(1) manage plan funds and oversee the plan;

(2) produce guidelines, protocols, and criteria for eligible projects;

(3) develop methodologies for evaluating project cost-effectiveness;

(4) prepare reports regarding the progress and effectiveness of the plan; [and]

(5) take all appropriate and necessary actions so that emissions reductions achieved through the plan are credited by the United States Environmental Protection Agency to the appropriate emissions reduction objectives in the state implementation plan; and

(6) hire staff and consultants needed to complete the commission's duties under this section and ensure timely review of applications and reimbursement of grant applicants' eligible project costs.

SECTION 2.03. Subsection (d), Section 386.053, 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 30th [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 2.04. Subsection (c), Section 386.104, Health and Safety Code, is amended to read as follows:

(c) For a proposed project as described by Section 386.102(b), other than a project involving a marine vessel or engine, not less than 50 [75] percent of vehicle miles traveled or hours of operation projected for the five years immediately following the award of a grant must be projected to take place in a nonattainment area or affected county of this state. The commission may also allow vehicle travel on highways and roadways, or portions of a highway or roadway, designated by the commission and located outside a nonattainment area or affected county to count towards the percentage of use requirement in this subsection. For a proposed project involving a marine vessel or engine, the vessel or engine must be operated in the intercoastal waterways or bays adjacent to or in an area within nine miles of a nonattainment area or affected county of this state for a sufficient amount of time over the lifetime of the project, as determined by the commission, to meet the cost-effectiveness requirements of Section 386.105.

SECTION 2.05. Subsection (a), Section 386.106, 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 $15,000 [$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 $15,000 [$13,000] per ton.

SECTION 2.06. Section 386.109, Health and Safety Code, is amended to read as follows:

Sec. 386.109. ELIGIBLE INFRASTRUCTURE PROJECTS. (a) The commission may consider for funding under Section 386.108:

(1) the purchase and installation at a site of equipment that is designed primarily to dispense qualifying fuel, other than standard gasoline or diesel, or the purchase of on-site mobile fueling equipment;

(2) infrastructure projects, including auxiliary power units, designed to dispense electricity to:

(A) motor vehicles;

(B) [and] on-road and non-road diesels; and

(C) marine vessels; and

(3) a project that involves a technology that allows a vehicle to replace with electric power, while the vehicle is parked, the power normally supplied by the vehicle's internal combustion engine.

(b) The commission may provide funding to other state agencies to implement projects under Subsection (a)(3), including funding for the lease, purchase, or installation of idle reduction technologies and facilities at rest areas and other public facilities on major highway transportation routes located in areas eligible for funding or for marine vessels operating on water routes eligible for funding. Funding under this subsection may include reasonable operational costs determined by the commission to be needed for the initial start-up and proper operation of the idle reduction technologies. The state agency leasing, owning, or operating the idle reduction facility constructed with funds provided under this subsection may, but is not required to, charge reasonable fees for the provision of idle reduction services provided that those fees are used to directly offset the cost of providing the services.

(c) In evaluating a request for funding of an eligible infrastructure project, the commission shall encourage the use of a technology that allows a vehicle to replace with electric power, while the vehicle is parked, the power normally supplied by the vehicle's internal combustion engine at the state's ports and border crossings in affected areas.

SECTION 2.07. Section 386.117, Health and Safety Code, is amended by amending Subsections (a) and (c) and adding Subsections (e) and (f) to read as follows:

(a) The commission shall adopt a process for awarding grants under this subchapter in the form of rebates to streamline the grant application, contracting, reimbursement, and reporting processes for certain projects. The process adopted under this section must:

(1) designate certain types of projects, such as repowers, replacements, and retrofits, as eligible for rebates;

(2) project standardized oxides of nitrogen emissions reductions for each designated project type;

(3) assign a standardized rebate amount for each designated project type;

(4) process and fund [allow for processing] rebates on an ongoing first-come, first-served basis; [and]

(5) set aside funds for projects with non-road engines used in construction or related activities;

(6) encourage projects with non-road engines used in construction or related activities by ensuring that the percentage of rebate grant funding for those projects is commensurate with the percentage of emissions sources in the mobile inventory in the state implementation plan or early action compact, as applicable, that are non-road engines used in construction or related activities; and

(7) consolidate, simplify, and reduce the administrative work for applicants and the commission associated with grant application, contracting, reimbursement, and reporting processes for designated project types.

(c) The commission may award rebate grants [as a pilot project] for a specific region or may award the grants statewide.

(e) The commission shall:

(1) investigate the requirements for establishing an Internet-based application process for rebate grants and report those requirements to the legislature not later than December 31, 2007; or

(2) implement an Internet-based application process for rebate grants not later than June 1, 2008.

(f) The commission or its designee shall notify potential applicants of any changes to the rebate grant process by its e-mail list service and posting those changes on its Internet website at least 30 days before the changes become effective.

SECTION 2.08. Subsection (b), Section 386.251, Health and Safety Code, is amended to read as follows:

(b) The fund is administered by the commission [comptroller] for the benefit of the plan established under this chapter. The fund is exempt from the application of Section 403.095, Government Code. Interest earned on the fund shall be credited to the fund.

SECTION 2.09. Subsection (a), Section 386.252, Health and Safety Code, as amended by Section 3, Chapter 766, Section 3, Chapter 1095, and Section 11, Chapter 1125, Acts of the 79th Legislature, Regular Session, 2005, is reenacted and amended to read as follows:

(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 percent of the money in the fund, of which not more than four percent may be used for the clean school bus program and not more than 10 percent may be used for on-road diesel purchase or lease incentives;

(2) for the new technology research and development program, 9.5 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, $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, 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 of which $216,000 each year shall be contracted to the Energy Systems Laboratory at the Texas Engineering Experiment Station for the development and annual calculation of creditable statewide emissions reductions obtained through wind and other renewable energy resources for the State Implementation Plan, and the balance is to be allocated each year to a [that] nonprofit organization or an institution of higher education based in Houston to be used to implement and administer the new technology research and development program under a contract with the commission for the purpose of identifying, testing, and evaluating new emissions-reducing technologies with potential for commercialization in this state and to facilitate their certification or verification; and

(3) for administrative costs incurred by the commission and the laboratory, three percent of the money in the fund.

SECTION 2.10. Section 387.003, Health and Safety Code, is amended by amending Subsection (a) and adding Subsections (c) through (h) to read as follows:

(a) A [The] nonprofit organization or institution of higher education described by Section 386.252(a)(2), under a contract with the commission as described by that section, shall establish and administer a new technology research and development program as provided by this chapter. The commission may contract with more than one entity and may limit the amount of each grant contract accordingly.

(c) The board of directors of a nonprofit organization under contract with the commission to establish and administer a new technology research and development program as provided by this chapter must include not more than three county judges selected from counties in the Houston-Galveston-Brazoria nonattainment area and two persons of relevant scientific expertise to be nominated by the commission. The two persons of relevant scientific expertise to be nominated by the commission may be employees or officers of the commission, provided that they do not participate in funding decisions affecting the granting of funds by the commission to a nonprofit organization on whose board they serve.

(d) The commission may enter into a grant contract with an institution of higher education described by Section 386.252(a)(2) for the institution to operate a testing facility which would be available for demonstration of eligible projects receiving grants under this chapter.

(e) The commission shall provide oversight as appropriate for grants provided to a nonprofit organization under this program.

(f) A nonprofit organization shall submit to the commission for approval a budget for the disposition of funds granted under this program.

(g) The commission shall limit the use of grants for administrative costs incurred by a nonprofit organization to an amount not to exceed 10 percent of the funding provided to the nonprofit organization under this program.

(h) A nonprofit organization that receives grants from the commission under this program is subject to Chapters 551 and 552, Government Code.

SECTION 2.11. Section 387.004, Health and Safety Code, is amended to read as follows:

Sec. 387.004. SOLICITATION OF NEW TECHNOLOGY PROPOSALS. The commission from time to time shall issue or contract with a nonprofit organization described by Section 386.252(a)(2) to issue specific requests for proposals (RFPs) or program opportunity notices (PONs) for technology projects to be funded under the program.

SECTION 2.12. Section 387.005, Health and Safety Code, is amended to read as follows:

Sec. 387.005. ELIGIBLE PROJECTS; PRIORITIES. (a) Grants awarded under this chapter shall be directed toward a balanced mix of:

(1) retrofit and add-on technologies and other advanced technologies that [to] reduce emissions from the existing stock of engines and vehicles targeted by the Texas emissions reduction plan;

(2) the establishment of a testing facility to evaluate retrofits, add-ons, advanced technologies, and fuels, or combinations of retrofits, add-ons, advanced technologies, and fuels, to determine their effectiveness in producing emissions reductions, with emphasis on the reduction of oxides of nitrogen; and

(3) advanced technologies for new engines and vehicles that produce very-low or zero emissions of oxides of nitrogen, including stationary and mobile fuel cells[;

[(3) studies to improve air quality assessment and modeling; and

[(4) advanced technologies that reduce emissions from other significant sources].

(b) The commission, directly or through a nonprofit organization described by Section 386.252(a)(2), shall identify and evaluate and may consider making grants for technology projects that would allow qualifying fuels to be produced from energy resources in this state. In considering projects under this subsection, the commission shall give preference to projects involving otherwise unusable energy resources in this state and producing qualifying fuels at prices lower than otherwise available and low enough to make the projects to be funded under the program economically attractive to local businesses in the area for which the project is proposed.

(c) In soliciting proposals under Section 387.004 and determining how to allocate grant money available for projects under this chapter, the commission shall give special consideration to advanced technologies and retrofit or add-on projects that provide multiple benefits by reducing emissions of particulates and other air pollutants.

(d) A project that involves publicly or privately owned vehicles or vessels is eligible for funding under this chapter if the project meets all applicable criteria.

(e) [Studies authorized under Subsection (a)(3) shall be consistent with air quality research priorities identified by the commission and conducted in an independent and objective manner.

[(f)] If a commissioner is an employee or owner of an entity that applies for a grant under this chapter, the commissioner, before a vote on the grant, shall disclose the fact of the commissioner's employment or ownership. The disclosure must be entered into the minutes of the meeting. The commissioner may not vote on or otherwise participate in the awarding of the grant. If the commissioner does not comply with this subsection, the entity is not eligible for the grant.

(f) Selection of grant recipients by a nonprofit organization described by Section 386.252(a)(2) under contract with the commission for the purpose of establishing and administering a new technology research and development program as provided by this chapter is subject to the commission's review and to the other requirements of this chapter. A grant contract under this chapter using funds described by Section 386.252 may not be made by a nonprofit organization if the commission or executive director of the commission does not consent to the grant or contract.

SECTION 2.13. Subsection (d), Section 151.0515, Tax Code, is amended to read as follows:

(d) This section expires August 31, 2013 [September 30, 2010].

SECTION 2.14. Subsection (c), Section 152.0215, Tax Code, is amended to read as follows:

(c) This section expires August 31, 2013 [September 30, 2010].

SECTION 2.15. Subsections (a), (b), and (b-1), Section 501.138, 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; or

(2) $28 if the applicant's residence is any other county[; or

[(3) on or after September 1, 2010, $28 regardless of the county in which the applicant resides].

(b) The county assessor-collector shall send:

(1) $5 of the fee to the county treasurer for deposit in the officers' salary fund;

(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; or

(B) $15 of the fee if the applicant's residence is any other county[; or

[(C) on or after September 1, 2010, $15 regardless of the county in which the applicant resides].

(b-1) Fees collected under Subsection (b) to be sent to the comptroller shall be deposited as follows:

(1) before September 1, 2008, to the credit of the Texas emissions reduction plan fund; [and]

(2) on or after September 1, 2008, and before September 1, 2010, to the credit of the Texas Mobility Fund, except that $5 of each fee imposed under Subsection (a)(1) and deposited on or after September 1, 2008, and before September 1, 2010, shall be deposited to the credit of the Texas emissions reduction plan fund; and

(3) on or after September 1, 2010, to the credit of the Texas emissions reduction plan fund.

SECTION 2.16. Subsection (c), Section 502.1675, Transportation Code, is amended to read as follows:

(c) This section expires August 31, 2013 [2010].

SECTION 2.17. Subsection (c), Section 548.5055, Transportation Code, is amended to read as follows:

(c) This section expires August 31, 2013 [2010].

SECTION 2.18. Section 12, Chapter 1125, Acts of the 79th Legislature, Regular Session, 2005, amending Subsection (a), Section 386.252, Health and Safety Code, is repealed.

ARTICLE 3. ENERGY EFFICIENCY

SECTION 3.01. Section 388.003, Health and Safety Code, is amended by adding Subsections (b-1) and (b-2) to read as follows:

(b-1) If the State Energy Conservation Office determines, based on written recommendations from the laboratory, that the latest published edition of the International Residential Code energy efficiency provisions or the latest published edition of the International Energy Conservation Code will result in residential or commercial energy efficiency and air quality that is equivalent to or better than the commercial energy efficiency and air quality achievable under the editions adopted under Subsection (a) or (b), the office may by rule adopt the equivalent or more stringent editions and substitute them for the initial editions described by Subsection (a) or (b). The rule, if adopted, shall establish an effective date for the new editions but not earlier than nine months after the date of adoption. The laboratory shall make its recommendations not later than six months after publication of new editions at the end of each three-year code development cycle of the International Residential Code and the International Energy Conservation Code.

(b-2) The State Energy Conservation Office shall by rule establish a procedure for persons who have an interest in the adoption of energy efficiency codes under Subsection (b-1), including commercial and residential builders, architects and engineers, county and other local government authorities, and environmental groups, to have an opportunity to comment on the codes under consideration and to have the commentary considered by the laboratory in developing its recommendations.

SECTION 3.02. Section 388.005, Health and Safety Code, is amended to read as follows:

Sec. 388.005. ENERGY EFFICIENCY PROGRAMS IN INSTITUTIONS OF HIGHER EDUCATION, STATE AGENCIES, AND CERTAIN POLITICAL SUBDIVISIONS. (a) In this section:

(1) "Institution of higher education" includes an institution of higher education as defined by Section 61.003, Education Code, and a private institution of higher education that receives funding from the state.

(2) "Political[, "political] subdivision" means:

(A) [(1)] an affected county; or

(B) [(2)] any political subdivision in a nonattainment area or in an affected county other than:

(i) [(A)] a school district; or

(ii) [(B)] a district as defined by Section 36.001 or 49.001, Water Code, that had a total annual electricity expense of less than $200,000 in the previous fiscal year of the district.

(3) "State agency" means a department, commission, board, office, council, or other agency in the executive branch of government that is created by the constitution or a statute of this state and has authority not limited to a geographical portion of the state.

(b) Each political subdivision, institution of higher education, or state agency shall implement all energy efficiency measures that meet the standards established for a contract for energy conservation measures under Section 302.004(b), Local Government Code, in order to reduce electricity consumption by the existing facilities of the entity [the political subdivision].

(c) Each political subdivision, institution of higher education, or state agency shall establish a goal to reduce the electric consumption by the entity [political subdivision] by five percent each year for six [five] years, beginning September 1, 2007 [January 1, 2002].

(d) A political subdivision, institution of higher education, or state agency that does not attain the goals under Subsection (c) must include in the report required by Subsection (e) justification that the entity [political subdivision] has already implemented all available measures. An entity that submits a report under this subsection indicating it has already implemented all available measures is exempt from the annual reporting requirement of Subsection (e) if a subsequent report would indicate no change in status. An entity may be required to provide notice that it is exempt to the State Energy Conservation Office.

(e) A political subdivision, institution of higher education, or state agency annually shall report to the State Energy Conservation Office, on forms provided by that office, regarding the entity's [political subdivision's] efforts and progress under this section. The State Energy Conservation Office shall provide assistance and information to the entity [political subdivisions] to help it [the political subdivisions] meet the goals set under this section.

SECTION 3.03. Subsection (b), Section 44.901, Education Code, is amended to read as follows:

(b) The board of trustees of a school district shall establish a goal to reduce the annual electric consumption by five percent each year for six years, beginning September 1, 2007. The board of trustees of a school district may enter into an energy savings performance contract in accordance with this section.

SECTION 3.04. Subsection (d), Section 2155.068, Government Code, is amended to read as follows:

(d) As part of the standards and specifications program, the commission shall review contracts for opportunities to recycle waste produced at state buildings, shall develop and update a list of equipment and appliances that meet the energy efficiency standards of Section 2158.301, and shall assist state agencies in selecting products under that section as appropriate.

SECTION 3.05. Chapter 2158, Government Code, is amended by adding Subchapter F to read as follows:

SUBCHAPTER F. ENERGY AND EFFICIENCY STANDARDS

FOR EQUIPMENT AND APPLIANCES

Sec. 2158.301. ENERGY CONSERVATION. If available and cost effective, the commission or another state agency shall purchase equipment and appliances for state use that meet or exceed the federal Energy Star standards designated by the United States Environmental Protection Agency and the United States Department of Energy.

SECTION 3.06. (a) The State Energy Conservation Office shall adopt rules implementing a procedure for stakeholder participation as required under Subsection (b-2), Section 388.003, Health and Safety Code, as added by this article, as soon as practicable after the effective date of this Act.

(b) The State Energy Conservation Office shall adopt rules as necessary to implement Subsection (b), Section 44.901, Education Code, as amended by this article, as soon as practicable after the effective date of this Act.

SECTION 3.07. (a) The energy conservation standards for equipment and appliances under Section 2158.301, Government Code, as added by this article, apply to a purchase by a state agency on or after the effective date of this Act.

(b) The Texas Building and Procurement Commission shall develop a list of equipment and appliances under Section 2155.068, Government Code, as amended by this article, as soon as practicable after the effective date of this Act.

ARTICLE 4. EFFECTIVE DATE

SECTION 4.01. 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, 2007.