HBA-AMW C.S.H.B. 3284 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3284 By: Hope Environmental Regulation 4/17/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, the responsibility for implementing requirements for the purchasing and leasing of low emission vehicles (LEVs) is not consolidated into one state program. The Texas Natural Resource Conservation Commission is responsible for implementing the Texas Clean Fleet Program, which requires private fleets with more than 25 vehicles, local government fleets with more than 15 vehicles, and transit authorities operating in nonattainment areas to purchase certain percentages of LEVs. The General Services Commission is responsible for implementing LEV requirements for state vehicle fleets with more than 15 vehicles and certain transit authority fleets are responsible for implementing LEV requirements for fleets owned by those transit authorities. In a recent report to the legislature, TNRCC recommended the state adopt a single fleet program based upon more stringent federal emission standards known as Tier II standards. C.S.H.B. 3284 repeals law regarding programs regulating the purchasing and leasing of LEVs and establishes a single clean fleet program for purchasing and leasing these vehicles based on Tier II standards. 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 3 (Sections 382.154 and 382.155, Health and Safety Code) of this bill. ANALYSIS C.S.H.B. 3284 amends the Health and Safety, Government, Natural Resources, and Water codes to modify provisions relating to the purchasing or leasing requirements for mass transit, local government, private, and state fleet vehicles (vehicles). The bill specifies that these provisions apply only to: _a state agency that owns, operates, or leases a fleet of 15 or more motor vehicles; _a local government that owns, operates, or leases a fleet of 25 or more motor vehicles in an affected area; _a mass transit authority that owns, operates, or leases a fleet of 25 or more vehicles in an affected area; or _any other person who owns, operates, or leases a fleet of 25 or more motor vehicles (Sec. 382.152, Health and Safety Code). The bill sets forth requirements regarding the percentages of motor vehicles to be purchased or leased annually by a state agency, mass transit authority, local government, or other person. The bill authorizes a state agency, mass transit authority, local government, or other person to purchase or lease a motor vehicle that is converted to a fuel or power source other than gasoline or diesel to satisfy the percentage requirements. The bill also provides that all motor vehicles purchased or leased under the requirements must be certified to meet the federal Tier II exhaust emission bin standards. The bill authorizes the Texas Natural Resource Conservation Commission (TNRCC) to waive the requirements or reduce the percentage requirements if a state agency, local government, mass transit authority, or any other person demonstrates by evidence acceptable to TNRCC that the required motor vehicles are not available for purchase or lease in this state or if a mass transit authority demonstrates by evidence acceptable to TNRCC that complying with the requirements would unduly compromise a public transportation alternative that reduces motor vehicle miles traveled (Sec. 382.153, Health and Safety Code). The bill exempts the following vehicles from these requirements: _a motor vehicle used exclusively for law enforcement or emergency purposes; _a motor vehicle used in the maintenance or repair of underground mass transit facilities that is required by federal law to operate on diesel fuel; _a motor vehicle used for manufacturer product evaluations or tests, including a motor vehicle owned or held by a university research department, independent testing laboratory, another evaluation facility, or a state agency whose primary purpose is to evaluate performance of motor vehicles for engineering, research, and development or quality control reasons; or _a motor vehicle held for sale by a motor vehicle dealer, including a demonstration vehicle (Sec. 382.151, Health and Safety Code). C.S.H.B. 3284 requires TNRCC to adopt rules to implement the Texas Clean Fleet Program (program) (Sec. 382.154, Health and Safety Code). The bill requires TNRCC by rule to require each state agency, mass transit authority, local government, or other person to maintain records and submit reports to demonstrate compliance with the program (Sec. 382.155, Health and Safety Code). The bill does not require the purchase or lease of a motor vehicle in violation of the alternative fuel transportation program or any other applicable federal or state law (Sec. 382.156, Health and Safety Code). The bill also adds to the projects the Texas Public Finance Authority is authorized to issue and sell obligations for the conversion of motor vehicles and other sources of substantial energy output of a county, a municipality, or a public health district to an alternative fuel (Sec. 1232.104, Government Code). The bill repeals law, effective September 1, 2003, relating to alternative fuels programs, purchasing of passenger vehicles, and alternative fuel use programs for metropolitan rapid transit authorities, regional transport authorities, municipal transit departments, and county mass transit authorities (SECTIONS 6 and 8). The bill requires TNRCC to examine the feasibility and effectiveness of similar fleet program requirements for motor vehicles that have a gross vehicle weight rating of more than 10,000 pounds and to report its findings and recommendations to the legislature by December 1, 2002 (SECTION 7). EFFECTIVE DATE Provisions regarding the Texas Clean Fleet Program and the study of certain motor vehicles take effect September 1, 2001. All other provisions take effect September 1, 2003. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3284 modifies the original bill to conform to Texas Legislative Council style and format. The substitute differs from the original bill by modifying the definitions of "lease" and "motor vehicle" (Sec. 382.152, Health and Safety Code). The substitute modifies the original bill by establishing that the provisions regarding the Texas Clean Fleet Program (program) apply to any other person who owns, operates, or leases a fleet of 25 or more motor vehicles, rather than to any other person not specifically covered that owns, operates, or leases a fleet of 25 or more vehicles in an affected area (Sec. 382.152, Health and Safety Code). The substitute adds provisions regarding the purchase or lease of a motor vehicle that is converted to a fuel or power source other than gasoline or diesel, the certification of purchased or leased vehicles to meet federal Tier II emission standards, and the waiver of requirements if the public transportation alternative reduces vehicle miles traveled (Sec. 382.153, Health and Safety Code). The substitute modifies the original bill by deleting the report regarding the waste tire recycling program from the reports required to be included in the Texas Natural Resource Conservation Commission's (TNRCC) biennial report. The substitute removes the provision in the original bill which required TNRCC to report on compression ignition and spark ignition vehicles. The substitute differs from the original bill by requiring TNRCC to examine fleet program requirements for motor vehicles that have a gross vehicle weight rating of more than 10,000 pounds (SECTION 7). C.S.H.B. 3284 modifies the original bill by restoring current law regarding the financing of the conversion of state agency vehicles, local mass transit authority or department motor vehicles, and motor vehicles and other sources of substantial energy output to an alternative fuel and by adding the conversion of motor vehicles and other sources of substantial energy output of a county, municipality, or a public health district (Sec. 1232.104, Government Code). The substitute adds the provision that beginning September 1, 2003, entities eligible to receive a loan, grant, or other disbursement to carry out an eligible conversion or infrastructure project regarding LPG or another environmentally beneficial fuel do not have to comply with fuel requirements provided by or rules adopted under provisions regarding vehicle fleet services (Sec. 113.287, Natural Resources Code, and SECTION 8).