88R2533 JRR-F
 
  By: Johnson S.B. No. 104
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of a small non-road engine purchase
  incentive program under the Texas emissions reduction plan.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 386.051(b), 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 air quality research support program
  established under Chapter 387;
               (4)  the clean school bus program established under
  Chapter 390;
               (5)  the new technology implementation grant program
  established under Chapter 391;
               (6)  the regional air monitoring program established
  under Section 386.252(a);
               (7)  a health effects study as provided by Section
  386.252(a);
               (8)  air quality planning activities as provided by
  Section 386.252(d);
               (9)  a contract with the Energy Systems Laboratory at
  the Texas A&M Engineering Experiment Station for computation of
  creditable statewide emissions reductions as provided by Section
  386.252(a);
               (10)  the Texas clean fleet program established under
  Chapter 392;
               (11)  the Texas alternative fueling facilities program
  established under Chapter 393;
               (12)  the Texas natural gas vehicle grant program
  established under Chapter 394;
               (13)  other programs the commission may develop that
  lead to reduced emissions of nitrogen oxides, particulate matter,
  or volatile organic compounds in a nonattainment area or affected
  county;
               (14)  other programs the commission may develop that
  support congestion mitigation to reduce mobile source ozone
  precursor emissions;
               (15)  the seaport and rail yard areas emissions
  reduction program established under Subchapter D-1;
               (16)  conducting research and other activities
  associated with making any necessary demonstrations to the United
  States Environmental Protection Agency to account for the impact of
  foreign emissions or an exceptional event;
               (17)  studies of or pilot programs for incentives for
  port authorities located in nonattainment areas or affected
  counties as provided by Section 386.252(a);
               (18)  the governmental alternative fuel fleet grant
  program established under Chapter 395; [and]
               (19)  remittance of funds to the state highway fund for
  use by the Texas Department of Transportation for congestion
  mitigation and air quality improvement projects in nonattainment
  areas and affected counties; and
               (20)  the small non-road engine purchase incentive
  program established under Subchapter G.
         SECTION 2.  Section 386.252(a), Health and Safety Code, is
  amended to read as follows:
         (a)  Money in the fund and account may be used only to
  implement and administer programs established under the
  plan.  Subject to the reallocation of funds by the commission under
  Subsection (h) and after remittance to the state highway fund under
  Subsection (a-1), money from the fund and account to be used for the
  programs under Section 386.051(b) shall initially be allocated as
  follows:
               (1)  four percent may be used for the clean school bus
  program under Chapter 390;
               (2)  three percent may be used for the new technology
  implementation grant program under Chapter 391, from which at least
  $1 million will be set aside for electricity storage projects
  related to renewable energy;
               (3)  five percent may be used for the Texas clean fleet
  program under Chapter 392;
               (4)  not more than $3 million may be used by the
  commission to fund a regional air monitoring program in commission
  Regions 3 and 4 to be implemented under the commission's oversight,
  including direction regarding the type, number, location, and
  operation of, and data validation practices for, monitors funded by
  the program through a regional nonprofit entity located in North
  Texas having representation from counties, municipalities, higher
  education institutions, and private sector interests across the
  area;
               (5)  10 percent may be used for the Texas natural gas
  vehicle grant program under Chapter 394;
               (6)  not more than $6 million may be used for the Texas
  alternative fueling facilities program under Chapter 393, of which
  a specified amount may be used for fueling stations to provide
  natural gas fuel, except that money may not be allocated for the
  Texas alternative fueling facilities program for the state fiscal
  year ending August 31, 2019;
               (7)  not more than $750,000 may be used each year to
  support research related to air quality as provided by Chapter 387;
               (8)  not more than $200,000 may be used for a health
  effects study;
               (9)  at least $6 million but not more than $16 million
  may be used by the commission for administrative costs, including
  all direct and indirect costs for administering the plan, costs for
  conducting outreach and education activities, and costs
  attributable to the review or approval of applications for
  marketable emissions reduction credits;
               (10)  six percent may be used by the commission for the
  seaport and rail yard areas emissions reduction program established
  under Subchapter D-1;
               (11)  five percent may be used for the light-duty motor
  vehicle purchase or lease incentive program established under
  Subchapter D;
               (12)  not more than $216,000 may be used by the
  commission to contract with the Energy Systems Laboratory at the
  Texas A&M Engineering Experiment Station annually for the
  development and annual computation of creditable statewide
  emissions reductions obtained through wind and other renewable
  energy resources for the state implementation plan;
               (13)  not more than $500,000 may be used for studies of
  or pilot programs for incentives for port authorities located in
  nonattainment areas or affected counties to encourage cargo
  movement that reduces emissions of nitrogen oxides and particulate
  matter; [and]
               (14)  two percent may be used for the small non-road
  engine purchase incentive program established under Subchapter G;
  and  
               (15)  the balance is to be used by the commission for
  the diesel emissions reduction incentive program under Subchapter C
  as determined by the commission.
         SECTION 3.  Chapter 386, Health and Safety Code, is amended
  by adding Subchapter G to read as follows:
  SUBCHAPTER G. SMALL NON-ROAD ENGINE PURCHASE INCENTIVE PROGRAM
         Sec. 386.301.  DEFINITIONS. In this subchapter:
               (1)  "Four-stroke engine" means an engine that goes
  through the steps of compression, power, exhaust, and intake in
  four piston strokes.
               (2)  "Non-road engine" means an engine powering
  equipment that has less than 25 horsepower.
               (3)  "Ozone precursors" means pollutants, including
  nitrogen oxides and volatile organic compounds, that create ground
  level ozone through chemical reactions.
               (4)  "Program" means the small non-road engine purchase
  incentive program established under this subchapter.
               (5)  "Two-stroke engine" means an engine that goes
  through the steps of compression, power, exhaust, and intake in two
  piston strokes and mixes fuel with oil in the process.
         Sec. 386.302.  PROGRAM.  (a) The commission shall develop a
  small non-road engine purchase incentive program designed to reduce
  emissions, including the emissions of ozone precursors,
  particulate matter, and carbon monoxide, produced by two-stroke and
  four-stroke non-road engines.
         (b)  The program shall authorize statewide financial
  incentives for the purchase by persons in this state of:
               (1)  new non-road engines that are electrically powered
  or powered by another alternative technology designated by the
  commission; and
               (2)  batteries designated by the commission.
         (c)  The commission shall adopt rules necessary to implement
  the program, including designating alternative technologies and
  products eligible for incentives.
         Sec. 386.303.  ELIGIBILITY. (a) The purchase by a person in
  this state of non-road engines  or batteries is eligible for an
  incentive under the program if:
               (1)  as applicable:
                     (A)  the non-road engine purchased is
  electrically powered or powered by another alternative technology
  designated by the commission; or
                     (B)  the battery purchased is necessary to improve
  the efficiency of an electrically powered non-road engine owned or
  operated by the person, as established by commission rule;
               (2)  the purchase meaningfully reduces emissions in
  this state, as determined by the criteria established under
  Subsection (b); and
               (3)  the purchase satisfies any minimum purchase
  quantity requirements established by the commission to ensure
  efficient administration of the program.
         (b)  The commission shall establish criteria for determining
  whether a purchase of non-road engines or batteries meaningfully
  reduces emissions in this state. The commission shall review and
  revise the criteria as appropriate. The criteria must include:
               (1)  the proposed frequency of use of the newly
  purchased non-road engine;
               (2)  the degree to which the purchase reduces the use of
  existing two-stroke and four-stroke non-road engines; and
               (3)  the cost-effectiveness of the purchase as it
  relates to advancing the purpose of the program under Section
  386.302(a).
         (c)  When establishing criteria under this section, the
  commission may allow for greater incentives for purchases that
  reduce:
               (1)  health risks to equipment operators when using
  non-road engines; and
               (2)  emissions of ozone precursors from non-road
  engines that operate primarily within a nonattainment area or an
  affected county.
         (d)  The commission may require the disposal of a two-stroke
  engine or four-stroke engines replaced by a non-road engine that is
  the subject of an incentive under this subchapter.
         Sec. 386.304.  APPLICATION FOR INCENTIVE. (a) A person who
  makes a purchase that meets the eligibility requirements under
  Section 386.303 may apply for an incentive under the program.
         (b)  An application for an incentive under this chapter must
  be made on a form provided by the commission and must contain any
  information necessary to:
               (1)  determine whether the project meets eligibility
  requirements; and
               (2)  ensure the efficient administration of the
  program.
         (c)  To reduce the administrative burden for the commission
  and applicants, the commission may streamline the application
  process by:
               (1)  reducing data entry and the copying of
  applications; and
               (2)  implementing a system to accept applications
  electronically through the commission's Internet website.
         Sec. 386.305.  AMOUNT OF INCENTIVE; ADMINISTRATION. (a) An
  incentive provided under this subchapter may not exceed 80 percent
  of the cost of eligible purchases of non-road engines and
  batteries.
         (b)  The commission shall set standards for determining
  incentive amounts, and may revise these standards as needed to:
               (1)  reflect changes to federal emission standards and
  developments in technological capabilities and scientific
  knowledge; and
               (2)  maximize the cost-effectiveness of the program in
  reducing emissions.
         (c)  The commission shall publicize and promote the
  availability of incentives under this subchapter to encourage
  eligible purchases of non-road engines and batteries.
         (d)  The commission shall include in the biennial plan report
  required by Section 386.057(b) a report of commission actions and
  results under this subchapter.
         SECTION 4.  The Texas Commission on Environmental Quality
  shall adopt rules and establish procedures under Subchapter G,
  Chapter 386, Health and Safety Code, as added by this Act, as soon
  as practicable after the effective date of this Act.
         SECTION 5.  This Act takes effect September 1, 2023.