By: Averitt, West S.B. No. 16

A BILL TO BE ENTITLED

AN ACT

relating to the enhancement of air quality, including the capture and storage of carbon dioxide and development of a greenhouse gas registry, the development of emissions reduction technologies, and the improvement of energy efficiency in buildings, vehicles, and appliances; providing civil penalties.

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

ARTICLE 1. ADVANCED CLEAN ENERGY PROJECTS

SECTION 1.01. Subdivision (1-a), Section 382.003, Health and Safety Code, is amended to read as follows:

(1-a) "Advanced clean energy project" means a project for which an application for a permit under this chapter is received by the commission on or after January 1, 2008, and before January 1, 2020, and that:

(A) involves the use of coal, biomass, petroleum coke, solid waste, or fuel cells using hydrogen derived from such fuels, in the generation of electricity, or the creation of liquid fuels outside of the existing fuel production infrastructure while co-generating electricity;

(B) is capable of achieving on an annual basis a 99 percent or greater reduction of sulfur dioxide emissions, a 95 percent or greater reduction of mercury emissions, and an emission rate for nitrogen oxides of 0.05 pounds or less per million British thermal units; and

(C) captures at least 50 percent of the carbon dioxide in the fuel being combusted and sequesters that carbon dioxide through methods that include geologic storage [renders carbon dioxide capable of capture, sequestration, or abatement if any carbon dioxide is produced by the project].

SECTION 1.02. Section 382.003, Health and Safety Code, is amended by adding Subdivision (7-bb) to read as follows:

(7-bb) "Geologic storage" means the underground storage of carbon dioxide in a suitable geologic formation, including storage that is accomplished in conjunction with an enhanced oil recovery project.

SECTION 1.03. Subsection (b), Section 382.0567, Health and Safety Code, is amended to read as follows:

(b) The commission may not consider any technology or level of emission reduction to be achievable for purposes of a best available control technology analysis or lowest achievable emission rate analysis conducted by the commission under another provision of this chapter solely because the technology is used or the emission reduction is achieved by a facility receiving an incentive as an advanced clean energy project or new technology project, as described by Section 391.002.

ARTICLE 2. NEW TECHNOLOGY IMPLEMENTATION GRANT PROGRAM

SECTION 2.01. Subsection (b), Section 386.051, Health and Safety Code, is amended to read as follows:

(b) Under the plan, the commission and the comptroller shall provide grants or other funding for:

(1) the diesel emissions reduction incentive program established under Subchapter C, including for infrastructure projects established under that subchapter;

(2) the motor vehicle purchase or lease incentive program established under Subchapter D;

(3) the new technology research and development program established under Chapter 387; [and]

(4) the clean school bus program established under Chapter 390;

(5) the new technology implementation grant program established under Chapter 391;

(6) the plug-in hybrid purchase credit program established under Subchapter G; and

(7) the energy-efficient appliance purchase incentive program established under Subchapter H.

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

(b) Appropriate commission objectives include:

(1) achieving maximum reductions in oxides of nitrogen to demonstrate compliance with the state implementation plan;

(2) preventing areas of the state from being in violation of national ambient air quality standards;

(3) achieving cost-saving and multiple benefits by reducing emissions of other pollutants; [and]

(4) achieving reductions of emissions of diesel exhaust from school buses; and

(5) advancing new technologies that reduce oxides of nitrogen and other emissions from facilities and other stationary sources.

SECTION 2.03. Subsection (b), Section 386.057, Health and Safety Code, is amended to read as follows:

(b) Not later than December 1, 2002, and not later than December 1 of each subsequent second year, the commission, in consultation with the advisory board, shall publish and submit to the legislature a biennial plan report. The report must include:

(1) the information included in the annual reviews conducted under Subsection (a);

(2) specific information for individual projects as required by Subsection (c);

(3) information contained in reports received under Sections 386.205, 388.003(e), [and] 388.006, and 391.104; and

(4) a summary of the commission's activities under Section 386.052.

SECTION 2.04. Subsection (c), Section 386.251, Health and Safety Code, is amended to read as follows:

(c) The fund consists of:

(1) the amount of money deposited to the credit of the fund under:

(A) Section 386.056;

(B) Sections 151.0515 and 152.0215, Tax Code; and

(C) Sections 501.138, 502.1675, and 548.5055, Transportation Code; and

(2) grant money recaptured under Section 386.111(d) and Chapters 387 and 391.

SECTION 2.05. Subtitle C, Title 5, Health and Safety Code, is amended by adding Chapter 391 to read as follows:

CHAPTER 391. NEW TECHNOLOGY IMPLEMENTATION FOR FACILITIES AND

STATIONARY SOURCES PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 391.001. DEFINITIONS. In this chapter:

(1) "Best available control technologies" or "BACT" has the meaning assigned by 42 U.S.C. Section 7479(3).

(2) "Commission" means the Texas Commission on Environmental Quality.

(3) "Facility" has the meaning assigned by Section 382.003.

(4) "Incremental cost" has the meaning assigned by Section 386.001.

(5) "New technology" means emissions control technology that results in emissions reductions that exceed state or federal requirements existing at the time of submission of a new technology implementation grant application.

(6) "Stationary source" has the meaning assigned by 42 U.S.C. Section 7602(z).

Sec. 391.002. PROGRAM. (a) The commission shall establish and administer a new technology implementation program to implement new technologies to reduce emissions from facilities and other stationary sources located within the state. Under the program, the commission shall provide grants or other financial incentives for eligible projects to offset the incremental cost of emissions reductions.

(b) Projects that may be considered for a grant under the program include:

(1) advanced clean energy projects, as defined by Section 382.003;

(2) new technology projects that reduce emissions of regulated pollutants from point sources that involve capital expenditures that exceed $500 million; and

(3) electricity storage projects related to renewable energy.

Sec. 391.003. GUIDELINES AND CRITERIA. (a) The commission shall adopt grant guidelines and criteria consistent with the requirements of this chapter.

(b) Guidelines must include protocols to calculate projected emissions reductions, project cost-effectiveness, and safeguards to ensure that funded projects generate emissions reductions not otherwise required by state or federal law.

(c) 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.

(d) Because the legislature finds that the current state of air quality in the state jeopardizes the state's ability to meet federal air quality requirements, the commission may adopt emergency rules under Section 2001.034, Government Code, with abbreviated notice, to carry out any rulemaking necessary to implement this chapter.

(e) Except as provided by Subsection (d), the rulemaking requirements of Chapter 2001, Government Code, do not apply to the adoption or revision of guidelines and criteria under this section.

Sec. 391.004. AVAILABILITY OF EMISSIONS REDUCTION CREDITS IN CERTAIN NONATTAINMENT AREAS. A project funded under this chapter must comply with Sections 386.055 and 386.056, as applicable.

[Sections 391.005-391.100 reserved for expansion]

SUBCHAPTER B. GRANT APPLICATIONS

Sec. 391.101. APPLICATION FOR GRANT. (a) Any person, as defined by Section 382.003, that owns a facility located within the state may apply for a grant under the program established under Section 391.002. The commission may adopt guidelines to allow a person other than the owner to apply for and receive a grant in order to improve the ability of the program to achieve its goals.

(b) An application for a grant under this chapter must be made on a form provided by the commission and must contain information required by the commission, including:

(1) a detailed description of the proposed project;

(2) information necessary for the commission to determine whether the project meets eligibility requirements for the type of project proposed, including a statement of the amounts of any other public financial assistance the project will receive; and

(3) other information the commission may require.

(c) An application for a grant under this chapter must contain a plan for implementation of a program that will provide project information and education to the public in the areas subject to public notice under federal and state permitting requirements for the proposed project until completion of the permitting process. This plan shall include provision of a publicly accessible informational website.

Sec. 391.102. GRANT APPLICATION REVIEW PROCEDURES. (a) The commission shall review an application for a grant for a project authorized under this chapter according to dates specified in a request for grant applications. If the commission determines that an application is incomplete, the commission shall notify the applicant and provide an explanation of what is missing from the application. The commission shall evaluate the completed application according to the appropriate project criteria.

(b) To the extent possible, the commission shall coordinate project review and approval with any timing constraints related to project purchases or installations to be made by an applicant.

(c) The commission may deny an application for a project that does not meet the applicable project criteria or that the commission determines is not made in good faith, is not credible, or is not in compliance with this chapter and the goals of this chapter.

(d) Subject to the availability of funds, the commission shall award a grant under this chapter in conjunction with the execution of a contract that obligates the commission to make the grant and the recipient to perform the actions described in the recipient's grant application. Subject to Section 391.204, the contract must incorporate provisions for recapturing grant money for noncompliance with grant requirements. Grant money recaptured under the contract provisions shall be deposited in the Texas emissions reduction plan fund and reallocated for other projects under this subchapter.

(e) An applicant may seek reimbursement for qualifying equipment installed after the effective date of this program.

(f) In coordinating interagency application review procedures, the commission:

(1) shall solicit review and comment from:

(A) the comptroller to assess the financial stability of the applicant, the economic benefit and job creation associated with the project, and any other information related to the duties of that office;

(B) the Public Utility Commission of Texas to assess the reliability of the proposed technology and the feasibility and cost-effectiveness of electric transmission associated with the project and any other information related to the duties of that agency; and

(C) the Railroad Commission of Texas to assess the availability and cost of the fuel involved with the project and any other information related to the duties of that agency;

(2) shall incorporate the review results into the grant award decision process; and

(3) as part of the report required under Section 391.104, shall justify awards made to projects that have been negatively reviewed by agencies under Subdivision (1).

(g) The commission may solicit review and comment from other state agencies or other entities with subject matter expertise, as applicable, in reviewing grant applications.

Sec. 391.103. EVIDENCE OF EMISSIONS REDUCTION POTENTIAL REQUIRED. (a) An application for a new technology implementation grant under this chapter must show reasonable evidence that the proposed technology is capable of providing a significant reduction in emissions.

(b) The commission shall consider specifically, for each proposed technology implementation grant application:

(1) the projected potential for reduced emissions and the cost-effectiveness of the technology;

(2) the potential for the technology to contribute significantly to air quality goals; and

(3) the strength of the implementation plan.

Sec. 391.104. REPORTING REQUIREMENTS. The commission shall prepare an annual report that summarizes the applications received and grant awards made in the preceding year. Preparation of the report must include the participation of the state agencies involved in the review of applications under Section 391.102.

[Sections 391.105-391.200 reserved for expansion]

SUBCHAPTER C. PROJECT REQUIREMENTS

Sec. 391.201. ELIGIBILITY OF PROJECTS FOR GRANTS. (a) The commission 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 proposed project must meet the requirements of this section to be eligible for a grant under the program established under Section 391.002.

(c) Each proposed project must meet the cost-effectiveness requirements established by the commission.

(d) A new technology implementation project must document, in a manner acceptable to the commission, a reduction of the baseline emissions adopted by the commission for the relevant facility or stationary source. After studying available emissions reduction technologies, the commission may adopt a minimum percentage reduction of emissions to be required by this subsection to improve the ability of the program to achieve its goals.

(e) If a baseline emissions standard does not exist for a facility, the commission, for purposes of this subchapter, shall establish an appropriate baseline emissions level for comparison purposes.

(f) Water usage for proposed projects must be consistent with the state water plan.

Sec. 391.202. CALCULATION OF COST-EFFECTIVENESS. The commission shall establish reasonable methodologies for evaluating project cost-effectiveness consistent with accepted methods.

Sec. 391.203. COST-EFFECTIVENESS CRITERIA; DETERMINATION OF GRANT AMOUNT. (a) The commission may not award a grant that, net of taxes, provides an amount that exceeds the incremental cost of the proposed project.

(b) In determining the amount of a grant under this subchapter, the commission shall reduce the incremental cost of a proposed project by the value of any existing financial incentive that directly reduces the cost of the proposed project, including tax credits or deductions, other grants, or any other public financial assistance.

Sec. 391.204. COST SHARING. (a) The commission shall require an applicant to bear at least 50 percent of the costs of implementing a project funded under this chapter.

(b) The commission may not require repayment of grant money, except that the commission must require provisions for recapturing grant money for noncompliance with grant requirements.

Sec. 391.205. PREFERENCES. (a) In awarding grants under this chapter and except as provided by Subsection (c), the commission shall assign preference to:

(1) projects that use natural resources originating or produced in the state;

(2) projects that contain an energy efficiency component; or

(3) projects that include the use of solar, wind, or other renewable energy sources.

(b) Higher preference shall be given to projects that include more than one of the criteria described by Subsection (a).

(c) Preferences described by Subsection (a) may be assigned only if the cost-effectiveness and emission performance of the project is comparable to a project not claiming a preference described by Subsection (a).

[Sections 391.206-391.300 reserved for expansion]

SUBCHAPTER D. FUNDING; EXPIRATION

Sec. 391.301. RESTRICTION ON USE OF GRANT. A recipient of a grant under this chapter must use the grant to pay the incremental costs of the purchase and installation of the project for which the grant is made, which may include reasonable and necessary expenses for the labor needed to install emissions-reducing equipment. The recipient may not use the grant for the costs of operation and maintenance of the emissions-reducing equipment.

Sec. 391.302. COMPTROLLER REVIEW OF USE OF GRANT FUNDS. (a) The comptroller shall conduct an annual review of each recipient of new technology implementation grant funds under this chapter to ensure that the recipient's use of the funds complies with state law and the terms of the award.

(b) To assist with a review under this section, the commission shall provide the comptroller with all monitoring reports received from grant recipients and any other documentation requested by the comptroller.

(c) On a finding of any misuse of funds or other noncompliance with grant requirements, the comptroller shall report recommendations for subsequent action, including the recapture of funds misused, to the commission.

(d) A finding of any misuse of grant funds by a recipient of a grant under this chapter results in a debt owed to the state, and the comptroller may place the recipient on warrant hold in accordance with Section 403.055, Government Code.

(e) The comptroller may contract with another state agency, an institution of higher education, or a private entity to conduct a review under this section or to assist the comptroller in conducting any part of the review.

(f) The comptroller may adopt rules to implement this section.

Sec. 391.303. TIME OF USE OF GRANT FUNDING. Funds appropriated for grants to be made by the commission under this chapter for a fiscal year may be distributed in subsequent fiscal years if the grant has been awarded and treated as a binding encumbrance by the commission before the end of the appropriation year of the funds appropriated for grant purposes. Distribution of the grant funds is subject to Section 403.071, Government Code.

Sec. 391.304. EXPIRATION. This chapter expires August 31, 2019.

SECTION 2.06. Subsection (b), Section 403.071, Government Code, is amended to read as follows:

(b) A claim may not be paid from an appropriation unless the claim is presented to the comptroller for payment not later than two years after the end of the fiscal year for which the appropriation was made. However, a claim may be presented not later than four years after the end of the fiscal year for which the appropriation from which the claim is to be paid was made if the appropriation relates to new construction contracts, to grants awarded under Chapter 391, Health and Safety Code, or to repair and remodeling projects that exceed the amount of $20,000, including furniture and other equipment, architects' and engineering fees, and other costs related to the contracts or projects.

ARTICLE 3. LOW-INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND

ACCELERATED VEHICLE RETIREMENT PROGRAM

SECTION 3.01. Subsection (d), Section 382.210, Health and Safety Code, is amended to read as follows:

(d) 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 the 10th [five] business day [days] after the date the county receives proof of the sale and any required administrative documents from the participating dealer.

SECTION 3.02. Subsection (c), Section 382.220, Health and Safety Code, is amended to read as follows:

(c) Money that is made available for the implementation of a program under Subsection (b) may not be expended for local government fleet or vehicle acquisition or replacement, call center management, application oversight, invoice analysis, education, outreach, or advertising purposes.

ARTICLE 4. TEXAS EMISSIONS REDUCTION PLAN

SECTION 4.01. Subsection (b-3), Section 501.138, Transportation Code, is amended to read as follows:

(b-3) This subsection and Subsection (b-2) expire August 31, 2019 [September 1, 2015].

SECTION 4.02. Subsection (d), Section 151.0515, Tax Code, is amended to read as follows:

(d) This section expires August 31, 2019 [2013].

SECTION 4.03. Subsection (c), Section 152.0215, Tax Code, is amended to read as follows:

(c) This section expires August 31, 2019 [2013].

SECTION 4.04. Section 390.006, Health and Safety Code, is amended to read as follows:

Sec. 390.006. EXPIRATION. This chapter expires August 31, 2019 [2013].

SECTION 4.05. Section 386.001, Health and Safety Code, is amended by adding Subdivision (10-a) to read as follows:

(10-a) "Stationary engine" means a machine that converts fuel into mechanical motion, including turbines and other internal combustion devices used in nonmobile applications.

SECTION 4.06. Section 386.002, Health and Safety Code, is amended to read as follows:

Sec. 386.002. EXPIRATION. This chapter expires August 31, 2019 [2013].

SECTION 4.07. 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 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 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. For a proposed project involving a mobile generator used for natural gas recovery purposes that is operated in a nonattainment area or affected county, the 75 percent of hours of operation in a nonattainment area or affected county projected for the project need not occur in the five years immediately following the award of a grant.

SECTION 4.08. Chapter 386, Health and Safety Code, is amended by adding Subchapters G and H to read as follows:

SUBCHAPTER G. PLUG-IN HYBRID MOTOR VEHICLE PURCHASE CREDIT PROGRAM

Sec. 386.301. DEFINITIONS. In this subchapter:

(1) "Golf cart" has the meaning assigned by Section 502.001, Transportation Code.

(2) "Light-duty motor vehicle" has the meaning assigned by Section 386.151.

(3) "Motor vehicle" has the meaning assigned by Section 386.151.

(4) "Neighborhood electric vehicle" means a motor vehicle that:

(A) is originally manufactured to meet, and does meet, the equipment requirements and safety standards established for "low speed vehicles" in Federal Motor Vehicle Safety Standard 500 (49 C.F.R. Section 571.500);

(B) is a slow-moving vehicle, as defined by Section 547.001, Transportation Code, that is able to attain a speed of more than 20 miles per hour but not more than 25 miles per hour in one mile on a paved, level surface;

(C) is a four-wheeled motor vehicle;

(D) is powered by electricity or alternative power sources;

(E) has a gross vehicle weight rating of less than 3,000 pounds; and

(F) is not a golf cart.

(5) "Plug-in hybrid motor vehicle" means a vehicle that:

(A) draws motive power from a battery with a capacity of at least four kilowatt-hours;

(B) can be recharged from an external source of electricity for motive power; and

(C) is a light-duty motor vehicle capable of operating at highway speeds, excluding golf carts and neighborhood electric vehicles.

Sec. 386.302. COMMISSION DUTIES REGARDING PLUG-IN HYBRID MOTOR VEHICLE PURCHASE CREDIT PROGRAM. (a) The commission shall develop a credit-towards-purchase program for new plug-in hybrid motor vehicles and shall adopt rules necessary to implement the program.

(b) The program shall authorize statewide credits toward the purchase of new plug-in hybrid motor vehicles for a purchaser who is a state resident and who agrees to register the vehicle in this state and operate the vehicle in this state for not less than 75 percent of the vehicle's annual mileage.

(c) Only one purchase credit may be provided for each new plug-in hybrid motor vehicle.

Sec. 386.303. PLUG-IN HYBRID MOTOR VEHICLE PURCHASE CREDIT. A new plug-in hybrid motor vehicle is eligible for a $4,000 purchase credit.

Sec. 386.304. MODIFICATION OF INCENTIVE. After evaluating new technologies, the commission may change the purchase credit established by Section 386.303 to improve the ability of the program to achieve its goals.

Sec. 386.305. MANUFACTURER'S REPORT. Not later than July 1 of each year and preceding the beginning of the vehicle model year, a manufacturer of motor vehicles shall provide to the commission a list of the new vehicle models that the manufacturer intends to sell in this state during that model year that meet the definition of plug-in hybrid motor vehicles under Section 386.301. The manufacturer may supplement the list provided to the commission under this section as necessary to include additional new vehicle models the manufacturer intends to sell in this state during the model year.

Sec. 386.306. LIST OF ELIGIBLE MOTOR VEHICLES. (a) On August 1 of each year the commission shall publish a list of the new model motor vehicles as listed for the commission under Section 386.305. The commission shall publish and supplement that list as necessary to include additional new vehicle models listed in a supplement to the original list provided by a manufacturer under Section 386.305.

(b) The commission shall distribute the list of eligible motor vehicles to all new motor vehicle dealers in this state.

Sec. 386.307. COMMISSION TO ACCOUNT FOR MOTOR VEHICLE PURCHASE CREDITS. (a) The commission by rule shall develop a method to administer and account for the motor vehicle purchase credits authorized by this subchapter and to pay a refund for the amount of the credit to a dealer of a new motor vehicle on application of the dealer as provided by this subchapter.

(b) The commission shall develop and publish forms and instructions for a new motor vehicle dealer to use in applying to the commission for a refund for purchase credits authorized under this subchapter.

(c) In addition to other forms developed and published under this section, the commission shall develop and publish a verification form by which, with information provided by the dealer, the commission can verify the sale of a vehicle covered by this subchapter. The verification form must include at least the name of the purchaser, the vehicle identification number of the vehicle, the date of the purchase, and the name of the new motor vehicle dealer making the transaction. At the time of sale of a vehicle eligible for a purchase credit under this subchapter, the dealer shall complete the verification form supplied to the dealer by the commission. The new motor vehicle dealer must include the completed verification form as part of the dealer's application for a refund. The dealer shall maintain a copy of the completed verification form for at least two years after the date of the transaction.

Sec. 386.308. SUSPENSION OF PURCHASE CREDITS. (a) The commission shall track new motor vehicle dealer refund applications and payments.

(b) If the balance of funds available for motor vehicle purchase credits falls below 15 percent of the total allocated for the credits during a fiscal year, the commission may suspend the credits until the date the commission can certify that the balance available in the fund for credits is an amount adequate to resume the credits or the beginning of the next fiscal year, whichever is earlier. If the commission suspends the purchase credits, the commission shall immediately notify all new motor vehicle dealers that the credits have been suspended.

(c) The commission shall establish a toll-free telephone number and a website available to motor vehicle dealers to call or access to easily verify that funds for purchase credits are available. The commission may provide for issuing verification numbers over the telephone or the website.

(d) Reliance by a dealer on information provided by the commission is a complete defense to an action involving or based on eligibility of a vehicle for a purchase credit or availability of vehicles eligible for a purchase credit.

Sec. 386.309. EXPIRATION. This subchapter and the purchase credit program authorized under this subchapter expire January 1, 2019.

[Sections 386.310-386.350 reserved for expansion]

SUBCHAPTER H. ENERGY-EFFICIENT APPLIANCE PURCHASE INCENTIVE

PROGRAM

Sec. 386.351. DEFINITION. In this subchapter, "governmental entity" means the commissioners court of a participating county or other appropriate governmental entity, including a regional council of government or a metropolitan planning organization.

Sec. 386.352. PURCHASE INCENTIVE PROGRAM. (a) The commission is the supervising state agency for the energy-efficient appliance purchase incentive program.

(b) The commission by rule shall establish, and authorize a governmental entity to implement, an energy-efficient appliance purchase incentive program subject to agency oversight that may include reasonable periodic commission audits.

(c) The participating governmental entities shall use funds provided for the program to provide financial incentives designed to assist persons in the purchase of equipment and appliances that meet or exceed the federal Energy Star standards designated by the United States Environmental Protection Agency and the United States Department of Energy.

(d) Programs approved under this section must include the retirement of materials and appliances that contribute to energy consumption or peak energy demand to ensure the reduction of energy consumption, energy demand, or peak loads and of associated emissions of air contaminants.

(e) Appliances funded under this section may include:

(1) air conditioning units; and

(2) refrigeration units.

Sec.386.353.ADMINISTRATION OF INCENTIVE PROGRAM. (a) Money allocated by the commission under the incentive program developed under this subchapter shall be administered by the governmental entity implementing the program. A participating governmental entity shall be reimbursed from the fund for costs incurred in administering the incentive program established under this subchapter. Reimbursable administrative costs of a participating governmental entity may not exceed 10 percent of the entity's total program budget.

(b) The commission and implementing governmental entities may accept gifts, grants, or other assistance for the purpose of implementing this section.

Sec. 386.354. IMPLEMENTATION GUIDELINES AND REQUIREMENTS. (a) The commission by rule shall adopt guidelines to assist a participating governmental entity in implementing an energy-efficient appliance purchase incentive program. The guidelines at a minimum shall recommend:

(1) a minimum and maximum amount towards purchase of eligible appliances; and

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

(A) the extent to which the incentive will reduce energy consumption, energy demand, or peak loads and reduce associated emissions of air contaminants;

(B) the condition of materials and appliances to be retired; and

(C) any other relevant considerations.

(b) A participating governmental entity shall provide an electronic means for distributing energy-efficient appliance purchase incentive funds once all program criteria have been met with regard to the purchase. The governmental entity shall ensure that funds are transferred to the purchaser not later than 14 business days after the date the governmental entity receives proof of the purchase and any required administrative documents from the purchaser.

SECTION 4.09. 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;

(7) motor vehicle inventory tax; or

(8) an amount made available to the customer under Subchapter G, Chapter 382, or Subchapter G, Chapter 386, Health and Safety Code.

ARTICLE 5. NEW TECHNOLOGY RESEARCH

AND DEVELOPMENT PROGRAM

SECTION 5.01. Subsections (a) and (b), Section 386.252, Health and Safety Code, are 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; not more than 10 percent may be used for the new technology implementation program, of which a defined amount may be set aside for electricity storage projects related to renewable energy; and a specified percentage may be used for light-duty plug-in hybrid motor vehicle purchase credits;

(2) for the new technology research and development program, nine [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 the energy-efficient appliance purchase incentive program created under Subchapter H [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 the commission [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 of which, a portion shall be allocated for research related to air quality administered by a nonprofit organization or an institution of higher education; and

(3) for administrative costs incurred by the commission and the laboratory, 3.5 [three] percent of the money in the fund, of which two percent is allocated to the commission and 1.5 percent is allocated to the laboratory.

(b) The [Up to 25 percent of the] money allocated under Subsection (a) to a particular program [and not expended under that program by January 1 of the second fiscal year of a fiscal biennium] may be used for another program under the plan as determined by the commission [in consultation with the advisory board].

SECTION 5.02. Section 387.003, Health and Safety Code, is amended to read as follows:

Sec. 387.003. NEW TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM. (a) The commission [A 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 one or more well-qualified nonprofit organizations or institutions of higher education for administration of this program [more than one entity and may limit the amount of each grant contract accordingly].

(b) Under the program, the commission shall provide grants to be used to support development of emissions-reducing technologies that may be used for projects eligible for awards under Chapters [Chapter] 386 and 391 and other new technologies that show promise for commercialization. The primary objective of this chapter is to promote the development of commercialization technologies to reduce emissions of oxides of nitrogen in Texas nonattainment areas [that will support projects that may be funded under Chapter 386 and this chapter, including advanced technologies such as fuel cells, catalysts, and fuel additives].

(c) If the commission contracts with one or more nonprofit organizations or institutions of higher education to [The board of directors of a nonprofit organization under contract with the commission to establish and] administer a new technology research and development program under [as provided by] this chapter, the board of directors of each organization may not have more than 11 members, must include two persons of relevant scientific expertise to be nominated by the commission, and may not include more than four county judges [selected from counties in the Houston-Galveston-Brazoria and Dallas-Fort Worth nonattainment areas]. 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 or an institution of higher education under this program.

(e) [(f)] A nonprofit organization or an institution of higher education shall submit to the commission for approval a budget for the disposition of funds granted under this program.

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

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

SECTION 5.03. 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 or an institution of higher education described by Section 387.003(a) [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 5.04. Subsections (a), (b), and (f), Section 387.005, Health and Safety Code, are amended to read as follows:

(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 reduce emissions from the existing stock of engines and vehicles targeted by the Texas emissions reduction plan, provided that the technologies do not significantly reduce the fuel economy of those engines and vehicles;

(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) advanced technologies for reducing oxides of nitrogen and other emissions from stationary sources; and

(4) field validation of innovative technologies for reducing emissions of oxides that require demonstration of viability for full commercial acceptance.

(b) The commission, directly or through a nonprofit organization or an institution of higher education described by Section 387.003(a) [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.

(f) Selection of grant recipients by a nonprofit organization or an institution of higher education described by Section 387.003(a) [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 or an institution of higher education if the commission or executive director of the commission does not consent to the grant or contract.

SECTION 5.05. Section 387.006, Health and Safety Code, is amended to read as follows:

Sec. 387.006. EVIDENCE OF COMMERCIALIZATION POTENTIAL REQUIRED. (a) An application for a technology grant under this chapter must show reasonable [clear and compelling] evidence that:

(1) the proposed technology project has a substantial [strong] commercialization plan and organization; and

(2) the technology proposed for funding[:

[(A)] is likely to be offered for commercial sale in this state as soon as practicable [but no later than five years] after the date of the application for funding[; and

[(B) once commercialized, will offer opportunities for projects eligible for funding under Chapter 386].

(b) The commission shall consider specifically, for each proposed technology project application:

(1) the projected potential for reduced emissions of oxides of nitrogen and the cost-effectiveness of the technology once it has been commercialized, including the impact on fuel consumption and maintenance costs for retrofits and rebuilds;

(2) the potential for the technology to contribute significantly to air quality goals; and

(3) the strength of the commercialization plan.

SECTION 5.06. Chapter 387, Health and Safety Code, is amended by adding Section 387.010 to read as follows:

Sec. 387.010. AIR QUALITY RESEARCH. (a) A nonprofit organization or institution of higher education described by Section 386.252(a)(2), under a contract with the commission, shall establish and administer a program under this section supporting research related to air quality.

(b) The board of directors of a nonprofit organization under contract with the commission to establish and administer the research program related to air quality under this section may not have more than 11 members, must include two persons with relevant scientific expertise to be nominated by the commission, and may not include more than four county judges selected from counties in the Houston-Galveston-Brazoria and Dallas-Fort Worth nonattainment areas. The two persons with 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.

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

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

(e) A nonprofit organization shall be reimbursed for costs incurred in establishing and administering the research program related to air quality under this section. Reimbursable administrative costs of a nonprofit organization may not exceed 10 percent of the organization's total program budget.

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

ARTICLE 6. BUILDING ENERGY CODES

SECTION 6.01. Section 388.003, Health and Safety Code, is amended by amending Subsections (a) and (b) and adding Subsection (a-1) to read as follows:

(a) To achieve energy conservation in single-family and duplex residential construction, the energy efficiency provisions [chapter] of the International Residential Code, as it existed on May 1, 2001, is adopted as the energy code in this state for single-family and duplex residential construction. Beginning January 1, 2012, the energy efficiency provisions of the International Residential Code, as it existed on May 1, 2009, is adopted as the energy code in this state for single-family and duplex residential construction.

(a-1) For the purposes of energy code compliance under the limited statutory warranties and building and performance standards under Section 430.001, Property Code, and inspections of new residential construction required under Subtitle F, Title 16, Property Code, Subsection (a) of this section controls for single-family and duplex residential construction located in unincorporated areas not in the extraterritorial jurisdiction of a municipality. To the extent of any conflict between this subsection and any other law, including Section 430.001, Property Code, this subsection prevails.

(b) To achieve energy conservation in all other residential, commercial, and industrial construction, the International Energy Conservation Code as it existed on May 1, 2001, is adopted as the energy code for use in this state for all other residential, commercial, and industrial construction. Beginning January 1, 2012, the International Energy Conservation Code, as it existed on May 1, 2009, is adopted as the energy code in this state for all other residential, commercial, and industrial construction.

SECTION 6.02. Subsection (b-1), Section 388.003, Health and Safety Code, as added by Section 3.01, Chapter 262 (S.B. 12), Acts of the 80th Legislature, Regular Session, 2007, is amended 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 sector energy efficiency and air quality impact, on average, that is equivalent to or better than the 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 energy codes described by Subsection (a) or (b). The rule, if adopted, shall establish an effective date for the new energy codes 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.

SECTION 6.03. Subsections (c), (d), (e), and (f), Section 388.003, Health and Safety Code, are amended to read as follows:

(c) A municipality shall establish procedures:

(1) for the administration and enforcement of the codes; and

(2) to ensure that code-certified inspectors or approved energy efficiency program verifiers shall perform inspections and enforce the code in the inspectors' jurisdictions.

(d) A municipality [or county] may establish procedures to adopt local amendments to the International Energy Conservation Code and the energy efficiency provisions [chapter] of the International Residential Code.

(e) Local amendments may not result in less stringent overall energy efficiency requirements [in nonattainment areas and in affected counties] than the energy efficiency chapter of the International Residential Code or International Energy Conservation Code. Local amendments must comply with the National Appliance Energy Conservation Act of 1987 (42 U.S.C. Sections 6291-6309), as amended. The laboratory, at the request of a municipality or county, shall determine the relative impact of proposed local amendments to an energy code, including whether proposed amendments are substantially equal to or less stringent than the unamended code. [For the purpose of establishing uniform requirements throughout a region, and on request of a council of governments, a county, or a municipality, the laboratory may recommend a climatically appropriate modification or a climate zone designation for a county or group of counties that is different from the climate zone designation in the unamended code.] The laboratory shall:

(1) report its findings to the council, county, or municipality, including an estimate of any energy savings potential above the base code from local amendments; and

(2) annually submit a report to the commission:

(A) identifying the municipalities and counties whose codes are more stringent than the unamended code, and whose codes are equally stringent or less stringent than the unamended code; and

(B) quantifying energy savings and emissions reductions from this program.

(f) Each municipality, and each county that has established procedures under Subsection (d), shall periodically review and consider revisions made by the International Code Council to the International Energy Conservation Code and the energy efficiency chapter of the International Residential Code adopted after May 1, 2009 [2001].

SECTION 6.04. Chapter 388, Health and Safety Code, is amended by adding Section 388.0035 to read as follows:

Sec. 388.0035. REQUIREMENT OF COMPATIBILITY WITH PLUG-IN MOTOR VEHICLES. The State Energy Conservation Office by rule shall amend the energy code as adopted under Section 388.003 to require that buildings newly constructed after January 1, 2012, have an electrical system, including outlets, that is capable of recharging plug-in electric or plug-in hybrid electric motor vehicles.

SECTION 6.05. The following provisions of the Health and Safety Code are repealed:

(1) Subsection (b-1), Section 388.003, as added by Section 11, Chapter 939 (H.B. 3693), Acts of the 80th Legislature, Regular Session, 2007; and

(2) Subsection (b-2), Section 388.003, as added by Section 3.01, Chapter 262 (S.B. 12), Acts of the 80th Legislature, Regular Session, 2007.

ARTICLE 7. IDLING OF MOTOR VEHICLES

SECTION 7.01. Section 382.0191, Health and Safety Code, is amended to read as follows:

Sec. 382.0191. IDLING OF MOTOR VEHICLE WHILE USING SLEEPER BERTH. (a) In this section, "idling" means allowing an engine to run while the motor vehicle is not engaged in forward or reverse motion.

(b) Except as provided by Subsection (c), the [The] commission may not prohibit or limit the idling of any [a] motor vehicle with a gross vehicle weight rating greater than 8,500 pounds that is equipped with a 2008 or subsequent model year heavy-duty diesel engine that has been certified by the United States Environmental Protection Agency or another state environmental agency to emit no more than 30 grams of nitrogen oxides emissions per hour when idling [is necessary to power a heater or air conditioner while a driver is using the vehicle's sleeper berth for a government-mandated rest period. Idling is not necessary to power a heater or air conditioner if the vehicle is within two miles of a facility offering external heating and air conditioning connections at a time when those connections are available].

(c) No driver using the vehicle's sleeper berth may idle the vehicle in a residential area as defined by Section 244.001, Local Government Code, or in a school zone or within 1,000 feet of a hospital or a public school during its hours of operation. An offense under this subsection shall be punishable by a fine not to exceed $500.

(d) This section expires November [September] 1, 2010 [2009].

ARTICLE 8. EXEMPTION OF THE WEIGHT OF CERTAIN IDLE REDUCTION

SYSTEMS FOR COMMERCIAL VEHICLES FROM MAXIMUM WEIGHT RESTRICTIONS

SECTION 8.01. Section 621.001, Transportation Code, is amended to read as follows:

Sec. 621.001. DEFINITIONS. In this chapter:

(1) "Commercial motor vehicle" means a motor vehicle, other than a motorcycle, designed or used for:

(A) the transportation of property; or

(B) delivery purposes.

(2) "Commission" means the Texas Transportation Commission.

(3) "Department" means the Texas Department of Transportation.

(4) "Director" means the executive director of the Texas Department of Transportation.

(5) "Idle reduction system" means any system that provides heating, cooling, or electrical service to a commercial vehicle cab for the purpose of reducing vehicle idling.

(6) "Motor vehicle" means a vehicle that is self-propelled.

(7) [(6)] "Semitrailer" means a vehicle without motive power that is designed, or used with a motor vehicle, so that some of its weight and the weight of its load rests on or is carried by the motor vehicle.

(8) [(7)] "Trailer" means a vehicle without motive power that is:

(A) designed or used to carry property or passengers on its own structure exclusively; and

(B) drawn by a motor vehicle.

(9) [(8)] "Truck-tractor" means a motor vehicle designed or used primarily for drawing another vehicle:

(A) that is not constructed to carry a load other than a part of the weight of the vehicle and load being drawn; or

(B) that is engaged with a semitrailer in the transportation of automobiles or boats and that transports the automobiles or boats on part of the truck-tractor.

(10) [(9)] "Vehicle" means a mechanical device, other than a device moved by human power or used exclusively upon stationary rails or tracks, in, on, or by which a person or property can be transported on a public highway. The term includes a motor vehicle, commercial motor vehicle, truck-tractor, trailer, or semitrailer but does not include manufactured housing as defined by Chapter 1201, Occupations Code.

(11) [(10)] "Single axle weight" means the total weight transmitted to the road by all wheels whose centers may be included between two parallel transverse vertical planes 40 inches apart, extending across the full width of the vehicle.

(12) [(11)] "Tandem axle weight" means the total weight transmitted to the road by two or more consecutive axles whose centers may be included between parallel transverse vertical planes spaced more than 40 inches and not more than 96 inches apart, extending across the full width of the vehicle.

(13) [(12)] "Port of entry" means a place designated by executive order of the president of the United States, by order of the United States secretary of the treasury, or by act of the United States Congress at which a customs officer is authorized to accept entries of merchandise, collect duties, and enforce customs and navigation laws. The term includes a publicly owned or privately owned international port of entry between this state and the United Mexican States.

SECTION 8.02. Section 621.101, Transportation Code, is amended by adding Subsection (d) to read as follows:

(d) Notwithstanding any provision of this section or any other section to the contrary, the maximum gross vehicle weight limit, bridge formula limit, and axle weight limit for any vehicle or combination of vehicles equipped with an idle reduction system may be increased by a quantity necessary to compensate for the additional weight of the idle reduction system as provided for in 23 U.S.C. Section 127. In no case shall the additional weight increase allowed by this subsection be greater than 400 pounds. On request by an appropriate law enforcement officer, the vehicle operator shall provide proof that the idle reduction technology is fully functional at all times and that the gross weight increase is not used for any purpose other than for use as an idle reduction system.

ARTICLE 9. APPLIANCE EFFICIENCY STANDARDS

SECTION 9.01. Subtitle C, Title 5, Health and Safety Code, is amended by adding Chapter 392 to read as follows:

CHAPTER 392. APPLIANCE EFFICIENCY STANDARDS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 392.001. DEFINITIONS. In this chapter:

(1) "Bottle-type water dispenser" means a water dispenser that uses a bottle or reservoir as the source of potable water.

(2) "Commercial hot food holding cabinet" means a heated, fully enclosed compartment with one or more solid or glass doors that is designed to maintain the temperature of hot food that has been cooked in a separate appliance.

(3) "Compact audio product," also known as a mini, mid, micro, or shelf audio system, means an integrated audio system encased in a single housing that includes an amplifier and radio tuner with attached or separable speakers that can reproduce audio from magnetic tape, compact disc, DVD, or flash memory.

(4) "Digital versatile disc" or "DVD" means a laser-encoded plastic medium capable of storing a large amount of digital audio, video, or computer data.

(5) "DVD player" means a digital versatile disc player that:

(A) is a commercially available electronic product encased in a single housing that includes an integral power supply; and

(B) is designed to decode digitized video signals on a DVD.

(6) "DVD recorder" means a digital versatile disc recorder that:

(A) is a commercially available electronic product encased in a single housing that includes an integral power supply; and

(B) is designed for the production or recording of digitized video signals on a DVD.

(7) "Energy Star Program" means the United States Environmental Protection Agency's Energy Star Program.

(8) "Portable electric spa" means a factory-built electric spa or hot tub, supplied with equipment for heating and circulating water.

(9) "Residential pool pump" means a pump used to circulate and filter residential swimming pool water to maintain the water's clarity and sanitation.

(10) "Water dispenser" means a factory-made assembly that mechanically cools and heats potable water and that dispenses the cooled or heated water by integral or remote means.

Sec. 392.002. APPLICABILITY; EXEMPTIONS. (a) This chapter applies to the following new products sold, offered for sale, or installed in this state:

(1) bottle-type water dispensers;

(2) commercial hot food holding cabinets;

(3) compact audio products;

(4) DVD players and recorders;

(5) portable electric spas; and

(6) residential pool pumps.

(b) This chapter does not apply to:

(1) a new product manufactured in this state and sold outside the state;

(2) a new product manufactured outside this state and sold at wholesale inside the state for final retail sale and installation outside the state;

(3) a product installed in a mobile manufactured home at the time of the home's construction;

(4) a product designed expressly for installation and use in a recreational vehicle;

(5) a commercial heated glass merchandising cabinet, dresser warmer, or cook-and-hold appliance for hot food;

(6) a compact audio product that:

(A) can be independently powered by internal batteries;

(B) has a powered external satellite antenna; or

(C) can provide a video output signal; or

(7) a DVD recorder that has an electronic programming guide function that provides an interactive, onscreen menu of television listings and that downloads program information from the vertical blanking interval of a regular television signal.

[Sections 392.003-392.050 reserved for expansion]

SUBCHAPTER B. EFFICIENCY STANDARDS

Sec. 392.051. MINIMUM EFFICIENCY STANDARDS FOR CERTAIN APPLIANCES. (a) Not later than September 1, 2010, the comptroller, in consultation with the state energy conservation office, shall adopt rules establishing minimum efficiency standards for each type of new product described by Section 392.002(a).

(b) If the United States Environmental Protection Agency or the United States Department of Energy adopt an Energy Star rating for any appliance covered by this chapter, the standard contained in this chapter is preempted by the federal requirements.

Sec. 392.052. NEW OR INCREASED EFFICIENCY STANDARDS. (a) The comptroller may adopt rules to establish increased efficiency standards for a product listed in Section 392.002(a) or to establish standards for a product not listed in that subsection.

(b) In considering new or increased standards, the comptroller, in consultation with the state energy conservation office, shall prescribe new or increased efficiency standards if the comptroller determines that the standards would:

(1) serve to promote energy conservation in this state; and

(2) be cost-effective for consumers who purchase and use the new product.

Sec. 392.053. EFFECTIVE DATE OF STANDARDS. A standard established under this subchapter takes effect on the first anniversary of the date the rule establishing the standard is adopted.

Sec. 392.054. BOTTLE-TYPE WATER DISPENSERS. A bottle-type water dispenser designed for dispensing both hot and cold water may not have standby energy consumption greater than 1.2 kilowatt-hours per day, as measured in accordance with the test criteria contained in version 1 of the "Energy Star Program Requirements for Bottled Water Coolers," except that Section D, "Timer Usage," of those test criteria may not be used to test units with an integral automatic timer.

Sec. 392.055. COMMERCIAL HOT FOOD HOLDING CABINETS. (a) A commercial hot food holding cabinet must have a maximum idle energy rate of not greater than 40 watts per cubic foot of interior volume, as determined by the "idle energy rate-dry test" in ASTM F2140-01, "Standard Test Method for Performance of Hot Food Holding Cabinets," copyright 2007 ASTM International.

(b) Interior volume of a commercial hot food holding cabinet must be measured in accordance with the method shown in the "Energy Star Program Requirements for Commercial Hot Food Holding Cabinets" as in effect on August 15, 2003.

Sec. 392.056. COMPACT AUDIO PRODUCTS. A compact audio product may not use more than two watts in standby-passive mode for a product without a permanently illuminated clock display and four watts in standby-passive mode for a product with a permanently illuminated clock display, as measured in accordance with International Electrotechnical Commission (IEC) test method 62087:2002-2003(E), "Methods of Measurement for the Power Consumption of Audio, Video, and Related Equipment."

Sec. 392.057. DVD PLAYERS OR RECORDERS. A DVD player or recorder may not use more than three watts in standby-passive mode, as measured in accordance with International Electrotechnical Commission (IEC) test method 62087:2002-2003(E), "Methods of Measurement for the Power Consumption of Audio, Video, and Related Equipment."

Sec. 392.058. PORTABLE ELECTRIC SPAS. A portable electric spa may not have a standby power greater than 5(v) watts where v equals the total volume in gallons. Standby power must be measured in accordance with the test method for portable electric spas contained in Section 1604, Title 20, California Code of Regulations, as of December 2006.

Sec. 392.059. RESIDENTIAL POOL PUMP MOTORS. (a) A residential pool pump motor manufactured on or after January 1, 2006, may not be a split-phase or capacitor start-induction run type motor.

(b)(1) A residential pool pump motor with a pool pump motor capacity of one horsepower or more that is manufactured on or after January 1, 2008, must be capable of operating at two or more speeds with a low speed having a rotation rate that is not more than one-half of the motor's maximum rotation rate. The pump motor must be operated with a pump control that has the capability of operating the pump at a minimum of two speeds.

(2) A residential pool pump motor with a pool pump motor capacity of one horsepower or more that is manufactured on or after January 1, 2010, and installed in existing residential pool pumps as a replacement residential pool pump motor must be capable of operating at two or more speeds with a low speed having a rotation rate that is not more than one-half of the motor's maximum rotation rate. The pump motor must be operated with a pump control that is capable of operating the pump at a minimum of two speeds.

(c) A pool pump motor control manufactured on or after January 1, 2008, that is sold for use with a pool pump capable of operating at two or more speeds must be able to operate the pool pump at a minimum of two speeds. The control's default circulation speed setting may be no more than one-half of the motor's maximum rotation rate. Any high-speed override capability must be for a temporary period not to exceed one 24-hour cycle without resetting to default settings.

Sec. 392.060. TRACKING, REPORTING, AND CLAIMING EMISSION REDUCTION CREDITS ASSOCIATED WITH ENERGY EFFICIENCY. The Texas Commission on Environmental Quality shall work with the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System to ensure that the state receives full credit in the state implementation plan for air emission reductions achieved through energy efficiency.

[Sections 392.061-392.100 reserved for expansion]

SUBCHAPTER C. IMPLEMENTATION AND MODIFICATION OF EFFICIENCY

STANDARDS

Sec. 392.101. PRODUCT COMPLIANCE. (a) A new product described by Section 392.002(a) may not be sold or offered for sale in this state unless the efficiency of the new product meets or exceeds the applicable efficiency standards prescribed by the rules adopted under Subchapter B.

(b) On or after the first anniversary of the date for the sale or offering for sale of a new product subject to an efficiency standard adopted under this chapter, that product may not be installed for compensation in this state unless the efficiency of the product meets or exceeds the applicable efficiency standards prescribed by the rules adopted under Subchapter B.

[Sections 392.102-392.150 reserved for expansion]

SUBCHAPTER D. TESTING, CERTIFICATION, LABELING, AND ENFORCEMENT

Sec. 392.151. PRODUCT TESTING. (a) The manufacturer of a new product subject to an efficiency standard adopted under this chapter shall test samples of the product in accordance with the test procedures adopted under this chapter.

(b) The comptroller, in consultation with the state energy conservation office, by rule shall adopt test procedures for determining a product's energy efficiency if Subchapter B does not provide for the procedures. The comptroller shall adopt test methods approved by the United States Department of Energy or, in the absence of those test methods, other appropriate nationally recognized test methods.

(c) The comptroller may adopt revised test procedures when new versions of test procedures become available.

Sec. 392.152. PRODUCT CERTIFICATION. (a) Except as provided by Subsection (c), the manufacturer of a new product subject to an efficiency standard adopted under this chapter shall certify to the comptroller that the product is in compliance with that standard according to test results.

(b) The comptroller shall adopt rules governing the certification of products under this section and shall coordinate certification by this state with the certification programs of other states and federal agencies with similar standards.

(c) Subsection (a) does not apply to a manufacturer of single-voltage external AC to DC power supplies, walk-in refrigerators, or walk-in freezers.

Sec. 392.153. PRODUCT LABELING. (a) The manufacturer of a new product subject to an efficiency standard adopted under this chapter shall identify each product offered for sale or installation in this state as being in compliance with this chapter by means of a mark, label, or tag on the product and packaging at the time of sale or installation.

(b) The comptroller shall adopt rules governing the identification of products and packaging under this section. The rules must to the greatest practical extent be coordinated with the labeling programs of other states and federal agencies with equivalent efficiency standards. The comptroller shall allow the use of existing marks, labels, or tags that connote compliance with the efficiency requirements of this chapter.

Sec. 392.154. COMPTROLLER TESTING FOR EFFICIENCY STANDARDS COMPLIANCE. (a) The comptroller may test products subject to an efficiency standard adopted under this chapter for compliance with the applicable efficiency standards. If a product tested is found not to be in compliance with the standards, the comptroller shall impose against the manufacturer of the product an assessment in an amount sufficient to recover the costs of purchasing and testing the product.

(b) The comptroller shall make information available to the public on any product found under this section not to be in compliance with the standards.

Sec. 392.155. INSPECTIONS. The comptroller may have periodic inspections conducted of a distributor or retailer of new products covered by Section 392.002 subject to an efficiency standard adopted under this chapter to determine compliance with this chapter. The inspections must be conducted at reasonable and convenient hours. Notice must be given before an inspection may be conducted.

Sec. 392.156. COMPLAINTS. The comptroller shall investigate a complaint received concerning a violation of this chapter and shall report the results of the investigation to the attorney general.

Sec. 392.157. ATTORNEY GENERAL ENFORCEMENT. The attorney general may institute proceedings to enforce this chapter.

Sec. 392.158. VIOLATIONS AND PENALTIES. (a) The comptroller shall issue a warning to a person for the person's first violation of this chapter.

(b) A person's second and subsequent violations are subject to a civil penalty of not more than $250.

(c) Each violation constitutes a separate violation, and each day that a violation continues constitutes a separate violation.

(d) A penalty assessed under this section is in addition to costs assessed under Section 392.154.

Sec. 392.159. RULES FOR IMPLEMENTATION AND ENFORCEMENT. The comptroller may adopt additional rules as necessary to ensure the proper implementation and enforcement of this chapter.

SECTION 9.02. (a) The efficiency standards prescribed by rules adopted under Subchapter B, Chapter 392, Health and Safety Code, as added by this article, apply only to the sale or offer of sale of a new product to which that chapter applies that occurs on or after January 1, 2011.

(b) Notwithstanding Subsection (a) of this section, a new residential pool pump that does not meet the efficiency standards contained in Section 392.059, Health and Safety Code, as added by this article, may be sold in this state through December 31, 2011.

ARTICLE 10. GREENHOUSE GAS REGISTRY

SECTION 10.01. Chapter 382, Health and Safety Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. GREENHOUSE GAS REGISTRY

Sec. 382.501. GREENHOUSE GAS REGISTRY. (a) The commission along with the Railroad Commission of Texas and the Public Utility Commission of Texas shall jointly participate in the federal government process for developing federal greenhouse gas reporting requirements and the federal greenhouse gas registry requirements.

(b) The commission shall adopt rules to comply with any federal greenhouse gas reporting requirements adopted by the federal government for private and public facilities eligible to participate in the federal greenhouse gas registry. In adopting the rules, the commission shall adopt and incorporate by reference rules implementing the federal reporting requirements and the federal registry.

ARTICLE 11. PERMITTING

SECTION 11.01. Section 382.0518, Health and Safety Code, is amended by adding Subsections (c-1), (c-2), (c-3), (c-4), and (c-5) to read as follows:

(c-1) In considering the issuance of a permit for a new electric generating facility expected to emit 100 tons per year or more of volatile organic compounds or nitrogen oxides, the commission shall consider:

(1) the formation of ozone due to the cumulative effects of the facility's expected emissions, authorized emissions from issued permits for a new major source or a major modification to an existing major source, and actual authorized emissions from all facilities permitted under this section, as applicable; and

(2) whether the emissions from the facility in regard to the formation of ozone will negatively affect compliance with the state's air quality state implementation plan.

(c-2) The commission shall conduct an analysis when a facility described by Subsection (c-1) is located:

(1) in an unclassifiable or designated attainment area for ozone; and

(2) within a distance of a designated ozone nonattainment county as specified by commission rule.

(c-3) The commission shall specify by rule an ozone de minimis impact level. The de minimis impact level shall be used to determine the effect of a facility described by Subsection (c-1).

(c-4) A facility's emissions that contribute at or below the de minimis impact level will be presumed to have no significant impact and will not be considered to cause or contribute to a violation of the ozone national ambient air quality standard.

(c-5) A facility's emissions that contribute above the de minimis impact level may be required to reduce the impact of its emissions to at or below the de minimis impact level by obtaining sufficient emissions reductions. The commission may consider federally enforceable reductions of projected emissions from the facility or actual emissions from other sources within the area described by Subsection (c-2) to meet this requirement.

SECTION 11.02. Subsections (a) and (d), Section 382.055, Health and Safety Code, are amended to read as follows:

(a) A preconstruction permit issued or renewed by the commission is subject to review to determine whether the authority to operate should be renewed according to the following schedule:

(1) a preconstruction permit issued before December 1, 1991, is subject to review not later than 10 [15] years after the date of the last renewal before January 1, 2010 [issuance];

(2) a preconstruction permit issued on or after December 1, 1991, is subject to review:

(A) every 10 years after the date of issuance; or

(B) on the filing of an application for an amendment to the permit, if:

(i) the applicant is subject to Section 382.056;

(ii) the application is filed with the commission not more than three years before the date the permit is scheduled to expire; and

(iii) the applicant does not object to having the permit subjected to review at that time; and

(3) for cause, a preconstruction permit issued on or after December 1, 1991, for a facility at a nonfederal source may contain a provision requiring the permit to be renewed at a period of between five and 10 years.

(d) In determining whether and under which conditions a preconstruction permit should be renewed, the commission shall consider, at a minimum:

(1) the performance of the owner or operator of the facility according to the method developed by the commission under Section 5.754, Water Code; [and]

(2) the condition and effectiveness of existing emission control equipment and practices;

(3) whether construction of the facility has been completed;

(4) whether the facility has been commercially operated; and

(5) whether the facility has ceased operation for the preceding five years or more.

SECTION 11.03. (a) Not later than September 1, 2011, the Texas Commission on Environmental Quality shall adopt rules governing the analysis to be conducted under Subsection (c-2), Section 382.0518, Health and Safety Code, as added by this Act.

(b) Not later than December 1, 2010, the Texas Commission on Environmental Quality shall submit an interim progress report to the legislature regarding the analysis to be conducted under Subsection (c-2), Section 382.0518, Health and Safety Code, as added by this Act.

ARTICLE 12. NO APPROPRIATION; EFFECTIVE DATE

SECTION 12.01. This Act does not make an appropriation. A provision in this Act that creates a new governmental program, creates a new entitlement, or imposes a new duty on a governmental entity is not mandatory during a fiscal period for which the legislature has not made a specific appropriation to implement the provision.

SECTION 12.02. This Act takes effect September 1, 2009.