Amend CSSB 1759 (house committee report) by adding the 
following appropriately numbered SECTIONS to the bill and 
renumbering subsequent SECTIONS of the bill accordingly:
	SECTION ____.  Section 386.252, Health and Safety Code, is 
amended by amending Subsection (a) and adding Subsection (d) 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, five 
percent shall be used for the clean fleet 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 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.
	(d)  The commission may allocate unexpended money designated 
for the clean fleet program to other programs described under 
Subsection (a) after the commission allocates money to recipients 
under the clean fleet program.
	SECTION ____.  Subtitle C, Title 5, Health and Safety Code, 
is amended by adding Chapter 391 to read as follows:

CHAPTER 391.  TEXAS CLEAN FLEET PROGRAM
	Sec. 391.001.  DEFINITIONS.  In this chapter:                           
		(1)  "Alternative fuel" means a fuel other than 
gasoline or diesel fuel, other than biodiesel fuel, including 
electricity, compressed natural gas, liquified natural gas, 
hydrogen, propane, methanol, or a mixture of fuels containing at 
least 85 percent methanol by volume.
		(2)  "Commission" means the Texas Commission on 
Environmental Quality.
		(3)  "Hybrid vehicle" means a vehicle with at least two 
different energy converters and two different energy storage 
systems on board the vehicle for the purpose of propelling the 
vehicle.
		(4)  "Incremental cost" has the meaning assigned by 
Section 386.001. 
		(5)  "Program" means the Texas clean fleet program 
established under this chapter.
	Sec. 391.002.  PROGRAM.  (a)  The commission shall establish 
and administer the Texas clean fleet program to encourage a person 
that has a fleet of vehicles to convert diesel-powered vehicles to 
alternative fuel or hybrid vehicles or replace them with 
alternative fuel or hybrid vehicles.  Under the program, the 
commission shall provide grants for eligible projects to offset the 
incremental cost of projects for fleet owners.
	(b)  An entity that places 25 or more qualifying vehicles in 
service for use entirely in this state during a calendar year is 
eligible to participate in the program.
	Sec. 391.003.  QUALIFYING VEHICLES.  (a)  A vehicle is a 
qualifying vehicle that may be considered for a grant under the 
program if during a calendar year the entity:
		(1)  purchases the vehicle and the vehicle is a hybrid 
vehicle or is fueled by an alternative fuel;
		(2)  converts the vehicle to be a hybrid vehicle or to 
be fueled by an alternative fuel in a manner other than the manner 
described by Subdivision (3); or
		(3)  replaces the vehicle's power source with a power 
source that is fueled by an alternative fuel or that causes the 
vehicle to be a hybrid vehicle.
	(b)  A vehicle is not a qualifying vehicle if the vehicle:              
		(1)  is a neighborhood electric vehicle, as defined by 
Section 551.301, Transportation Code;
		(2)  has been used as a qualifying vehicle to qualify 
for a grant under this chapter for a previous reporting period or by 
another entity; or
		(3)  has qualified for a similar grant or tax credit in 
another jurisdiction.
	Sec. 391.004.  APPLICATION FOR GRANT.  (a)  An entity 
operating in this state that operates a fleet of at least 100 
vehicles may apply for and receive a grant under the program.
	(b)  The commission may adopt guidelines to allow a regional 
planning commission, council of governments, or similar regional 
planning agency created under Chapter 391, Local Government Code, 
or a private nonprofit organization to apply for and receive a grant 
to improve the ability of the program to achieve its goals.
	(c)  An application for a grant under this chapter must be 
made on a form provided by the commission and must contain the 
information required by the commission.
	Sec. 391.005.  ELIGIBILITY OF PROJECTS FOR GRANTS.  (a)  The 
commission by rule shall establish criteria for setting priorities 
for projects eligible to receive grants under this chapter.  The 
commission shall review and may modify the criteria and priorities 
as appropriate.
	(b)  A qualifying vehicle must be used on a regular, daily 
route and must have at least two years of useful life remaining.
	(c)  A qualifying vehicle must remain in the state for at 
least five years.  The commission by rule shall create a monitoring 
program to ensure compliance under this subsection as well as 
penalties against the recipient of the grant if the vehicle is 
removed from the state before the fifth anniversary of the date the 
grant is awarded.
	Sec. 391.006.  RESTRICTION ON USE OF GRANT.  A recipient of a 
grant under this chapter shall use the grant to pay the incremental 
costs of the project for which the grant is made, which may include 
the initial cost of the alternative fuel vehicle and the reasonable 
and necessary expenses incurred for the labor needed to install 
emissions-reducing equipment.  The recipient may not use the grant 
to pay the recipient's administrative expenses.
	Sec. 391.007.  AMOUNT OF GRANT.  The amount the commission 
shall award for each vehicle is:
		(1)  for a federally certified low-emission vehicle 
fueled by an alternative fuel, 50 percent of the incremental cost;
		(2)  for a federally certified ultra-low-emission 
vehicle or federally certified inherently low-emission vehicle 
fueled by an alternative fuel, 75 percent of the incremental cost;
		(3)  for a federally certified 
super-ultra-low-emission vehicle or federally certified 
zero-emission vehicle fueled by an alternative fuel, 85 percent of 
the incremental cost; or
		(4)  for a hybrid vehicle, 80 percent of the 
incremental cost.       
	Sec. 391.008.  EXPIRATION.  This chapter expires August 31, 
2017.     
	SECTION ____.  (a)  In this section:                                           
		(1)  "Alternative fuel" means a fuel other than 
gasoline or diesel fuel, other than biodiesel fuel, including 
electricity, compressed natural gas, liquified natural gas, 
hydrogen, propane, methanol, or a mixture of fuels containing at 
least 85 percent methanol by volume.
		(2)  "Commission" means the Texas Commission on 
Environmental Quality.      
	(b)  The commission shall conduct an alternative fueling 
facilities study to:
		(1)  assess the correlation between the installation of 
fueling facilities in nonattainment areas and the deployment of 
fleet vehicles that use alternative fuels; and
		(2)  determine the emissions reductions achieved from 
replacing a diesel-powered engine with an engine utilizing 
alternative fuels.
	(c)  From the emissions reductions determined under 
Subsection (b) of this section, the commission shall determine the 
amount of emissions reductions which are fairly attributable to the 
installation of an alternative fuel fueling facility and the 
combustion of the alternative fuel in the vehicles fueled by the 
alternative fuel fueling facility.
	(d)  In connection with the study conducted under this 
section, the commission shall seek approval for credit in the state 
implementation plan from the United States Environmental 
Protection Agency for emissions reductions that can be:
		(1)  directly attributed to an alternative fuel fueling 
facility; and       
		(2)  achieved as a consequence of an alternative fuel 
fueling facility encouraging the use of alternatively fueled 
vehicles.
	(e)  The commission shall include in the commission's 
biennial report to the legislature the findings of the study 
conducted under this section and the status of the discussions with 
the United States Environmental Protection Agency regarding credit 
for emissions reductions in the state implementation plan which can 
be achieved as a result of the installation of alternative fuel 
fueling facilities.
	(f)  This section expires August 31, 2011.                                     
	SECTION ____.  The Texas Commission on Environmental Quality 
shall adopt rules under Section 391.005, Health and Safety Code, as 
added by this Act, as soon as practicable after the effective date 
of this Act.