80R8599 SGA-F

By: Estes S.B. No. 1337

A BILL TO BE ENTITLED

AN ACT

relating to incentives for biofuel production, distribution, and use in this state.

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

SECTION 1. Section 16.002, Agriculture Code, is amended to read as follows:

Sec. 16.002. PLANT REGISTRATION. (a) To be eligible for a grant for fuel ethanol or biodiesel produced in a plant, a producer must apply to the department [office] for the registration of the plant. A producer may apply for the registration of more than one plant.

(b) An application for the registration of a plant must show to the satisfaction of the department [office] that:

(1) the plant is capable of producing fuel ethanol or biodiesel;

(2) the producer has made a substantial investment of resources in this state in connection with the plant; and

(3) the plant constitutes a permanent fixture in this state.

(c) The department [office, after consultation with the department,] shall register each plant that qualifies under this section. [The office shall notify the department of plants registered under this section.]

SECTION 2. Section 16.003(a), Agriculture Code, is amended to read as follows:

(a) On or before the fifth day of each month, a producer shall report to the department [office] on:

(1) the number of gallons of fuel ethanol or biodiesel produced at each registered plant operated by the producer during the preceding month;

(2) the number of gallons of fuel ethanol or biodiesel imported into this state by the producer during the preceding month;

(3) the number of gallons of fuel ethanol or biodiesel sold or blended with motor fuels by the producer during the preceding month; and

(4) the total value of agricultural products consumed in each registered plant operated by the producer during the preceding month.

SECTION 3. Section 16.004, Agriculture Code, is amended to read as follows:

Sec. 16.004. FUEL ETHANOL AND BIODIESEL PRODUCTION ACCOUNT. (a) The fuel ethanol and biodiesel production account is an account in the general revenue fund that may be appropriated only to the department [office] for the purposes of this chapter, including the making of grants under this chapter.

(b) The account is composed of:

(1) fees collected under Section 16.005; and

(2) money transferred to the account by an act of the legislature [under Subsection (c)].

[(c) The comptroller shall transfer from the undedicated portion of the general revenue fund to the account an amount of money equal to 5.25 times the amount of the fees collected under Section 16.005.]

SECTION 4. Sections 16.005(a), (b), (c), and (d), Agriculture Code, are amended to read as follows:

(a) The department [office] shall impose a fee on each producer in an amount equal to 3.2 cents for each gallon of fuel ethanol or biodiesel produced in each registered plant operated by the producer.

(b) For each fiscal year, the department [office] may not impose fees on a producer for more than 18 million gallons of fuel ethanol or biodiesel produced at any one registered plant.

(c) The department [office] shall transfer the fees collected under this section to the comptroller for deposit to the credit of the account.

(d) The department [office] may not impose fees on a producer for fuel ethanol or biodiesel produced at a registered plant after the 10th anniversary of the date production from the plant begins.

SECTION 5. Sections 16.006(a), (d), and (e), Agriculture Code, are amended to read as follows:

(a) The department [office, after consultation with the department,] shall make grants to producers as an incentive for the development of the fuel ethanol and biodiesel industry and agricultural production in this state.

(d) The department [office] by rule shall provide for the distribution of grant funds under this chapter to producers. The department [office] shall make grants not less often than quarterly.

(e) If the department [office] determines that the amount of money credited to the account is not sufficient to distribute the full amount of grant funds to eligible producers as provided by this chapter for a fiscal year, the department [office] shall proportionately reduce the amount of each grant for each gallon of fuel ethanol or biodiesel produced as necessary to continue the incentive program during the remainder of the fiscal year.

SECTION 6. Chapter 16, Agriculture Code, is amended by adding Section 16.007 to read as follows:

Sec. 16.007. REGULATION OF FUEL ETHANOL OR BIODIESEL IN A MANNER MORE STRINGENT THAN FEDERAL LAW. (a) In this section, "state agency" has the meaning assigned by Section 315.002, Government Code.

(b) Except as provided by this section, a state agency may not adopt or implement rules in a manner that restricts the production or distribution of fuel ethanol or biodiesel if the rules impose a restriction more stringent than federal law provides, unless the agency determines that the restriction is necessary to maintain delegated authority under a federal program.

(c) After May 1, 2009, Subsection (b) does not apply to a rule adopted by the Texas Commission on Environmental Quality if that commission determines that, without imposing the restriction provided by the rule, emissions generated by using fuel ethanol or biodiesel will materially jeopardize compliance with the state implementation plan for attaining national ambient air quality standards.

SECTION 7. Section 390.001, Health and Safety Code, is amended by amending Subdivisions (1) and (4) and adding Subdivision (1-a) to read as follows:

(1) "Biodiesel" has the meaning assigned by Section 16.001, Agriculture Code.

(1-a) "Diesel exhaust" means one or more of the air pollutants emitted from an engine by the combustion of diesel fuel, including particulate matter, nitrogen oxides, volatile organic compounds, air toxics, and carbon monoxide.

(4) "Qualifying fuel" includes:

(A) any liquid or gaseous fuel or additive registered or verified by the United States Environmental Protection Agency, other than standard gasoline or diesel, that is ultimately dispensed into a school bus that provides reductions of emissions of particulate matter; and

(B) biodiesel in blends containing at least five percent biodiesel.

SECTION 8. The following provisions of the Agriculture Code are repealed:

(1) Section 16.001(5);

(2) Section 16.003(c); and

(3) Section 16.005(e).

SECTION 9. Sections 1 through 6 and Section 8 of this Act take effect only if House Bill No. 1, Acts of the 80th Legislature, Regular Session, 2007, or similar legislation providing for funding the fuel ethanol and biodiesel production account, becomes law. If that bill or similar legislation does not become law, those sections have no effect.

SECTION 10. 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.