HBA-LJP H.B. 2841 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2841
By: Wolens
Environmental Regulation
3/29/2001
Introduced



BACKGROUND AND PURPOSE 

The federal Clean Air Act authorizes the United States Environmental
Protection Agency (EPA) to establish the maximum allowable concentrations
of pollutants that can endanger human health, harm the environment, and
cause property damage.  Areas where pollution exceeds the EPA standards may
be designated as nonattainment areas and if these areas do not meet the EPA
standards by 2007, all noncomplying states face severe sanctions.  Texas
has four current and three near nonattainment areas, comprising 37
counties.  These areas represent 70 percent of the state's population, 76
percent of aggregate employment, 82 percent of personal income, and 83
percent of gross state product.  Because of Texas' integrated economy, all
parts of the state have a stake in bringing these areas into compliance. 

The Texas Natural Resource Conservation Commission (TNRCC) has submitted a
state implementation plan to regulate emissions in nonattainment areas.
However, there are significant areas of potential emissions reductions the
TNRCC cannot regulate but which may be realized through an incentive
program. House Bill 2841 establishes the Texas emissions reduction plan to
reduce emissions in the state. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Natural Resource Conservation
Commission in SECTION 1 (Section 386.152 and 386.159, Health and Safety
Code), SECTION 24, and SECTION 25, and the Comptroller of Public Accounts
in SECTION 1 (Sec. 386.162, Health and Safety Code), SECTION 24 and SECTION
25 of this bill. 

ANALYSIS

Texas Emissions Reduction Plan

House Bill 2841 amends the Health and Safety Code to require the Texas
Natural Resource Conservation Commission (TNRCC) to establish and
administer the Texas emissions reduction plan (plan).  The bill requires
TNRCC to provide grants or funding under the plan for the diesel emissions
reduction incentive program, the low-emissions vehicle purchase or lease
incentive program, the alternative fuel incentive program, the energy
efficient appliance program and sales tax exemption, and the new technology
development and research program.  The bill provides that a project begun
before September 1, 2001 is not eligible for a grant or other funding under
the plan (Sec. 386.051, Health and Safety Code).  The bill establishes the
Texas emissions reduction plan fund as an account in the state treasury
that is administered by the comptroller and sets forth provisions relating
to the fees, surcharges, and payments that compose the fund, and the use
and allocation of the fund for programs implemented and administered under
the plan (Secs. 386.251 and 386.252, Health and Safety Code). 

The bill sets forth provisions regarding the administration of the plan by
TNRCC, including the duties, objectives, guidelines and criteria for
awarding grants under the plan, monitoring procedures of the achievements
of projects awarded grants, staff and technical support, and reporting
requirements of TNRCC (Secs. 386.052 - 386.056, Health and Safety Code). 

 The bill establishes the Texas Emissions Reduction Plan Advisory Board
(advisory board) consisting of 13 members and sets forth provisions
relating to the appointment, composition, terms, and the presiding officer
of the members of the advisory board.  The bill requires the advisory board
to review the first biennial report by TNRCC, hold a public meeting on the
need to continue the plan, and prepare and submit a report with specified
contents to the governor and legislature, on or before September 1, 2002,
on the continuation of the plan (Sec. 386.057, Health and Safety Code and
SECTION 30).  The bill also authorizes the expiration of any part of a
state implementation plan (SIP) that restricts the hours of operation for
construction equipment in nonattainment or near nonattainment areas on the
date TNRCC certifies that those areas achieved sufficient emissions
reductions (Sec. 386.058, Health and Safety Code). 

Diesel Emissions Reduction Incentive Program

The bill requires TNRCC to establish and administer a diesel emissions
reduction incentive program, under which TNRCC is required to provide
grants to eligible projects to offset the incremental cost of projects that
reduce emissions of oxides of nitrogen from high-emitting diesel sources in
nonattainment or near nonattainment areas of the state.  The bill sets
forth provisions relating to the eligibility, considerations, and
applications of projects to receive grants under the diesel emissions
reduction incentive program (Secs. 386.102 - 386.104, Health and Safety
Code). 

The bill sets forth provisions relating to TNRCC's calculations of
cost-effectiveness, the criteria of costeffectiveness regarding the
determination of grant money, adjustments to maximum cost-effectiveness
amount and award amount, and the availability of emissions reduction
credits for the eligibility of projects for the diesel emissions reduction
incentive program (Secs. 386.105 - 386.108, Health and Safety Code). 

The bill requires TNRCC to provide limited funding from available money of
the diesel emissions reduction incentive program for fueling infrastructure
demonstration projects and sets forth provisions relating to the
implementation of these projects.  The bill provides that fueling
infrastructure demonstration projects are to provide initial support for
low-emissions vehicle projects at the start of the program and to assess
whether the funding for infrastructures is an appropriate and
cost-effective use of public funds.  The bill also sets forth provisions
relating to eligibility, the application package of grants, procedures for
reviewing an application, staff and technical support, and the total
cost-effectiveness for fueling infrastructure demonstration projects (Secs.
386.109 - 386.114, Health and Safety Code). 

Low-Emissions Vehicle Purchase or Lease Incentive Program

The bill requires TNRCC to develop a low-emissions vehicle purchase or
lease incentive program to authorize incentives for the purchase or lease
of new low-emissions vehicles and to adopt rules necessary to implement the
program.  The bill sets forth provisions relating to the eligibility
schedule of a light-duty vehicle, a light light-duty truck, a heavy
light-duty truck, a medium-duty passenger vehicle, and a heavyduty vehicle
for the low-emissions vehicle purchase or lease incentive program (Secs.
386.152 - 386.155, Health and Safety Code). 

The bill sets forth provisions relating to the eligibility of an
alternative fuel vehicle purchased or leased for use as a fleet vehicle and
a list of eligible vehicles for an incentive under the low-emissions
vehicle purchase or lease incentive program.  The bill sets forth
provisions relating to the certification to TNRCC by the owner of an
alternative fuel vehicle that is a duel fuel vehicle and the certification
of low-emissions vehicles by the manufacturer (Secs. 386.156 - 386.158,
Health and Safety Code). 

To enable consumers to make informed decisions, TNRCC shall require, by
rule, that each specified vehicle for sale or lease in this state display a
clearly legible label that shows the vehicle's 5-Star Green Vehicle Class
Rating under the United States Environmental Protection Agency's (EPA)
system and sets forth provisions relating to the label.  The bill sets
forth provisions relating to the incentive at the time and point-of-sale or
point-of-lease of a certified low- emissions vehicle or certain alternative
fuel vehicles, the public information program for the low-emissions vehicle
purchase or lease incentive program, and the lowemissions vehicle or
certain alternative fuel vehicle report of the comptroller to TNRCC (Secs.
386.159  386.161, and 386.163, Health and Safety Code). 

The bill requires the comptroller, by rule, to develop a method to
administer and account for the lowemissions vehicle purchase or lease
incentives fund, and sets forth provisions relating to the comptroller
prescribing the accounting and reporting procedures for low-emissions
vehicle purchase or lease incentives to new motor vehicle dealers and
leasing agents (Sec. 386.162, Health and Safety Code).  The bill requires
TNRCC no later than the 45th day after the effective date of this Act to
publish the first annual list of vehicles eligible for low-emissions
vehicle purchase or lease incentives (SECTION 25). 

New Technology Development and Research Program

The bill establishes the Texas Council on Environmental Technology
(council) to identify, evaluate, and deploy new technologies and streamline
the credit process for technological advancements from TNRCC and the EPA.
The bill provides that the council is composed of 11 members and sets forth
provisions relating to the appointment and terms of the members, and the
council offices and projects location (Sec. 386.202, Health and Safety Code
and SECTION 31).  The bill requires the council to establish and administer
a new technology research program to provide grants to be used to support
development of emissions-reducing and commercialization technologies
through projects under the new technology research program with the
designated monies from the environmental research fund contained within the
general revenue fund (Secs. 386.203 and 386.208, Health and Safety Code).
The bill also authorizes the council to appoint advisory committees to
assist the council in performing its duties and sets forth provisions
relating to the composition of the advisory committees (Sec. 386.209,
Health and Safety Code). 

The bill requires TNRCC to issue a request no later than the 30th day after
the adoption of rules governing the new technology development and research
program, for proposals for projects to be funded under the program and sets
forth provisions relating to the specific request of the council for
proposals or program opportunity notices for technology projects (Sec.
386.204, Health and Safety Code and SECTION 27). The bill also sets forth
provisions regarding the priorities and considerations of eligibility, the
application process, and cost-sharing of projects for a grant under the new
technology research program (Secs. 386.204 - 386.207, Health and Safety
Code). 

The bill amends the Tax Code to provide for a surcharge on the sale, lease,
or rental, of new or used construction equipment in a stipulated amount and
sets forth provisions relating to the collection, administration,
enforcement, and deposit of the surcharge (Sec. 151.0515, Tax Code).  The
bill sets forth provisions relating to the exemption from certain sales,
excise, and use taxes of: an item that qualifies under the federal law for
the "Energy Star" label as an energy-efficient appliance; the sale of
specified heating, cooling, and water heating equipment; and certain new
fuel cells with a specified generating capacity and electricity-only
generation efficiency (Secs. 151.355 - 151.357, Tax Code).  The bill
provides for the imposition of a surcharge that is one percent of the total
consideration on every retail sale or lease of every onroad diesel motor
vehicle sold or leased in this state and sets forth provisions for the
collection, administration, and enforcement of the onroad diesel motor
vehicle surcharge and the deposit of these remitted surcharges (Sec.
152.0215, Tax Code).  The bill also provides for the imposition of a $1
surcharge on each person in a nonattainment  or near nonattainment area and
sets forth provisions relating to the collection, administration, and
enforcement of such a surcharge, and the deposit of all the remitted
surcharges (Sec. 156.054, Tax Code). 

Tax Credit for Use of Liquified Gas to Fuel Motor Vehicles

The bill provides for a credit against a franchise tax and authorizes a
corporation to claim a credit only for the incremental cost of using
liquefied gas to fuel motor vehicles.  The bill sets forth provisions
relating to the limitations on the amount, the eligibility, the
application, and the reimbursement to the state from the plan's fund of
such credit, and the conveyance, assignment, or transfer of the credit to
other entities (Secs. 171.852 - 171.857, Tax Code).  The bill establishes
that provisions relating to the franchise tax credit are effective January
1, 2002 (SECTION 28). 

 License Plates for Low-Emissions and Alternative Fuel Vehicles

The bill amends the Transportation Code to require the Department of Public
Safety (DPS) to issue a specially designed license plate for a motor
vehicle that is eligible for a low-emissions vehicle purchase and lease
incentive or powered by alternative fuel.  The bill also sets forth
provisions relating to the contents and the fee for the license plate and
the distribution of the funds under the plan to pay for the cost to the
county for administrating the license plates (Sec. 502.2665, Transportation
Code).  The bill also requires DPS no later than the 45th day after the
effective date of this Act to make available to the county tax
assessorcollector of each county in the state the special license plate and
sets forth provisions relating the issuance of those plates (SECTION 26). 

Exemptions for Low-Emissions and Alternative Fuel Vehicles

The bill provides for the application of the entitlement or exemption from
fees to motor vehicles with the special license plates under provisions
relating to high occupancy vehicle lanes of DPS or a corporation under the
Texas Transportation Corporation Act, the toll for towing or driving a
vehicle through a toll collection, fees collected by the Texas Turnpike
Authority division of the Texas Department of Transportation (TxDOT) to
finance turnpike projects, fees collected by a regional authority to
finance certain operations of turnpike projects, and privileged parking
spaces of a political subdivision or private property owner (Secs. 224.153,
224.155, 361.179, 366.173, 431.073, and 681.009, Transportation Code). 

Fees

The bill provides for the imposition of a surcharge on the registration of
a truck-tractor or commercial motor vehicle in an amount equal to 10
percent of the total fees due for the registration of the truck-tractor or
commercial motor vehicle and sets forth provisions relating to the
remittance and deposit of such surcharges (Sec. 502.1675, Transportation
Code).  The bill requires TxDOT to collect a $1 fee for each motor vehicle
registered in a nonattainment or near nonattainment area in this state and
sets forth provisions relating to the remittance and deposit of such fees
(Sec. 502.1715, Transportation Code).  The bill also requires DPS to
collect a $1 fee for the renewal or issuance of a driver's license or
certificate or the inspection of a motor vehicle in an area of the state
that is not a nonattainment or near nonattainment area and a $3 fee if the
issuance, renewal, or inspection is in a nonattainment or near
nonattainment area.  The bill also sets forth provisions relating to the
remittance and deposit of these fees on the issuance or renewal of a
driver's license or certificate or inspection of a motor vehicle (Secs.
521.421 and 548.5055, Transportation Code). The bill provides for a
surcharge to accompany an application for registration of a motor carrier
in the amount of $2 per vehicle for annual registration and $4 per vehicle
for two-year registration and sets forth provisions relating to the
collection, remittance, and deposit of such fees (Sec. 643.053,
Transportation Code).  The bill also imposes a surcharge on the sale of
fuel to marine vessels moored for an extended period or permanently in a
harbor (SECTION 23). 

The bill amends the Parks and Wildlife Code to provide for a surcharge for
each application for an original or renewal certificate of number for a
motorboat that will be operated primarily in a nonattainment or near
nonattainment area of this state and sets forth provisions relating to the
collection and remittance of the surcharge (Sec. 31.0265, Parks and
Wildlife Code). 

The bill amends the V.T.C.S. to provide for a surcharge of 50 cents imposed
on each fare collected by a taxi driver for transportation by taxi in a
county that is in a nonattainment or near nonattainment area of this state.
The bill sets forth provisions relating to the payment, records, exemption,
and the liability of unremitted taxi surcharges.  The bill provides that a
person who violates a rule adopted by the comptroller or provisions
regarding a taxi surcharge under the plan commits a Class C misdemeanor
(Article 9035, V.T.C.S.). 

The bill amends law to require TNRCC to adopt rules establishing the
guidelines and criteria required to implement the programs established
under this Act and to require the comptroller to adopt all rules  necessary
to carry out the duties delegated to the comptroller under this Act.
Pending the adoption of these rules, the bill requires TNRCC to begin the
implementation of these programs using guidelines developed by a similar
operating program in another state that is modified for application in this
state (SECTION 24). 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.