81(R) HB 1796 - Enrolled version

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�	H.B.�No.�1796

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�	AN ACT
�	relating to the development of carbon dioxide capture and
�	sequestration in this state.
�	��BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	��SECTION�1.��Chapter 382, Health and Safety Code, is amended
�	by adding Subchapter K to read as follows:
�	SUBCHAPTER K. OFFSHORE GEOLOGIC STORAGE OF CARBON DIOXIDE
�	��Sec.�382.501.��DEFINITIONS. In this subchapter:
�	��(1)��"Board" means the School Land Board.
�	��(2)��"Bureau" means the Bureau of Economic Geology at
�	The University of Texas at Austin.
�	��(3)��"Carbon dioxide repository" means an offshore deep
�	subsurface geologic repository for the storage of anthropogenic
�	carbon dioxide.
�	��(4)��"Land commissioner" means the commissioner of the
�	General Land Office.
�	��Sec.�382.502.��RULES. (a) The commission by rule may adopt
�	standards for the location, construction, maintenance, monitoring,
�	and operation of a carbon dioxide repository.
�	��(b)��If the United States Environmental Protection Agency
�	issues requirements regarding carbon dioxide sequestration, the
�	commission shall ensure that the construction, maintenance,
�	monitoring, and operation of the carbon dioxide repository under
�	this subchapter comply with those requirements.
�	��Sec.�382.503.��STUDY; SELECTION OF LOCATION. (a) The land
�	commissioner shall contract with the bureau to conduct a study of
�	state-owned offshore submerged land to identify potential
�	locations for a carbon dioxide repository.
�	��(b)��The land commissioner shall recommend suitable sites
�	for carbon dioxide storage to the board based on the findings of the
�	study.
�	��(c)��The board shall make the final determination of suitable
�	locations for carbon dioxide storage.
�	��Sec.�382.504.��CONTRACT FOR NECESSARY INFRASTRUCTURE AND
�	OPERATION. (a) Once the location has been established for the
�	carbon dioxide repository, the board may issue requests for
�	proposals for the lease of permanent school fund land for the
�	construction of any necessary infrastructure for the
�	transportation and storage of carbon dioxide to be stored in the
�	carbon dioxide repository.
�	��(b)��The board may contract for construction or operational
�	services for the repository.
�	��Sec.�382.505.��ACCEPTANCE OF CARBON DIOXIDE FOR STORAGE;
�	FEES AND CARBON CREDITS. (a) Once the carbon dioxide repository is
�	established, the board may accept carbon dioxide for storage.
�	��(b)��The board by rule may establish a fee for the storage of
�	carbon dioxide in the carbon dioxide repository. If this state
�	participates in a program that facilitates the trading of carbon
�	credits, a fee under this subsection may be established as a
�	percentage of the carbon credits associated with the storage.
�	��Sec.�382.506.��MEASURING, MONITORING, AND VERIFICATION;
�	ROLE OF BUREAU. (a) The commission by rule may establish standards
�	for the measurement, monitoring, and verification of the permanent
�	storage status of the carbon dioxide in the carbon dioxide
�	repository.
�	��(b)��The bureau shall perform the measurement, monitoring,
�	and verification of the permanent storage status of carbon dioxide
�	in the carbon dioxide repository.
�	��(c)��The bureau shall serve as a scientific advisor for the
�	measuring, monitoring, and permanent storage status verification
�	of the carbon dioxide repository.
�	��(d)��The bureau shall provide to the board data relating to
�	the measurement, monitoring, and verification of the permanent
�	storage status of the carbon dioxide in the carbon dioxide
�	repository, as determined by the board.
�	��Sec.�382.507.��OWNERSHIP OF CARBON DIOXIDE. (a)��The board
�	shall acquire title to carbon dioxide stored in the carbon dioxide
�	repository on a determination by the board that permanent storage
�	has been verified and that the storage location has met all
�	applicable state and federal requirements for closure of carbon
�	dioxide storage sites.
�	��(b)��The right, title, and interest in carbon dioxide
�	acquired under this section are the property of the permanent
�	school fund and shall be administered and controlled by the board.
�	��Sec.�382.508.��LIABILITY. (a)��The transfer of title to the
�	state under Section 382.507 does not relieve a producer of carbon
�	dioxide of liability for any act or omission regarding the
�	generation of stored carbon dioxide performed before the carbon
�	dioxide was stored.
�	��(b)��On the date the permanent school fund, under Section
�	382.507, acquires the right, title, and interest in carbon dioxide,
�	the producer of the carbon dioxide is relieved of liability for any
�	act or omission regarding the carbon dioxide in the carbon dioxide
�	repository.
�	��(c)��This section does not relieve a person who contracts
�	with the board under Section 382.504(b) of liability for any act or
�	omission regarding the construction or operation, as applicable, of
�	the carbon dioxide repository.
�	��Sec.�382.509.��RATES FOR TRANSPORTATION. Neither the
�	commission nor the board may establish or regulate the rates
�	charged for the transportation of carbon dioxide to the carbon
�	dioxide repository.
�	��Sec.�382.510.��ANNUAL REPORT. The land commissioner shall
�	issue annually a report regarding the carbon dioxide repository.
�	The report may be submitted electronically by posting on the
�	General Land Office's Internet website. The report must include
�	information regarding:
�	��(1)��the total volume of carbon dioxide stored;
�	��(2)��the total volume of carbon dioxide received for
�	storage during the year; and
�	��(3)��the volume of carbon dioxide received from each
�	producer of carbon dioxide.
�	��SECTION�2.��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 unless a specific appropriation has been
�	made to implement the provision or it is determined by the agency
�	that the provisions imposed by this Act may be absorbed within
�	agency resources during the fiscal period without additional state
�	funding.
�	��SECTION�3.��Section 382.003(1-a), 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 or for an authorization to use
�	a standard 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, whether the project is implemented in
�	connection with the construction of a new facility or in connection
�	with the modification of an existing facility and whether the
�	project involves the entire emissions stream from the facility or
�	only a portion of the emissions stream from the facility;
�	��(B)��with regard to the portion of the emissions
�	stream from the facility that is associated with the project, is
�	capable of achieving:
�	��(i)��on an annual basis a 99 percent or
�	greater reduction of sulfur dioxide emissions or, if the project is
�	designed for the use of feedstock substantially all of which is
�	subbituminous coal, an emission rate of 0.04 pounds or less of
�	sulfur dioxide per million British thermal units as determined by a
�	30-day average;
�	��(ii)��on an annual basis[,] a 95 percent or
�	greater reduction of mercury emissions;
�	��(iii)��[~~, and~~] an annual average emission
�	rate for nitrogen oxides of:
�	��(a)��0.05 pounds or less per million
�	British thermal units; or
�	��(b)��if the project uses gasification
�	technology, 0.034 pounds or less per million British thermal units;
�	and
�	��(iv)��an annual average emission rate for
�	filterable particulate matter of 0.015 pounds or less per million
�	British thermal units; and
�	��(C)��captures not less than 50 percent of the
�	[~~renders~~] carbon dioxide in the portion of the emissions stream
�	from the facility that is associated with the project and
�	sequesters that captured carbon dioxide by geologic storage or
�	other means [~~capable of capture, sequestration, or abatement if any~~
�	~~carbon dioxide is produced by the project~~].
�	��SECTION�4.��Section 382.0567(b), 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.
�	��SECTION�5.��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 new technology research and development
�	program established under Chapter 387; [~~and~~]
�	��(4)��the clean school bus program established under
�	Chapter 390; and
�	��(5)��the new technology implementation grant program
�	established under Chapter 391.
�	��SECTION�6.��Section 386.052(b), 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�7.��Section 386.057(b), 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�8.��Section 386.251(c), 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 Chapter 391.
�	��SECTION�9.��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
�	SUBCHAPTER A. GENERAL PROVISIONS
�	��Sec.�391.001.��DEFINITIONS. In this chapter:
�	��(1)��"Best available control technology" has the
�	meaning assigned by Section 169 of the federal Clean Air Act (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 in effect at the time of submission of a new
�	technology implementation grant application.
�	��(6)��"Stationary source" has the meaning assigned by
�	Section 302 of the federal Clean Air Act (42 U.S.C. Section
�	7602(z)).
�	��Sec.�391.002.��GRANT PROGRAM. (a)��The commission shall
�	establish and administer a new technology implementation grant
�	program to assist the implementation of new technologies to reduce
�	emissions from facilities and other stationary sources in this
�	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 and 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)��The guidelines must include:
�	��(1)��protocols to compute projected emissions
�	reductions and project cost-effectiveness; and
�	��(2)��safeguards to ensure that the projects funded
�	result in 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 program to achieve the program goals.
�	��(d)��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 AND REVIEW
�	��Sec.�391.101.��APPLICATION FOR GRANT. (a)��The owner of a
�	facility located in this state may apply for a grant under the
�	program established under Section 391.002. To improve the ability
�	of the program to achieve the program goals, the commission may
�	adopt guidelines to allow a person other than the owner to apply for
�	and receive a grant.
�	��(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 the commission's eligibility
�	requirements, 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. The plan must provide for a publicly
�	accessible informational Internet 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 the information missing
�	from the application. The commission shall evaluate the completed
�	application according to the guidelines and criteria adopted under
�	Section 391.003.
�	��(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 a grant application for a
�	project that does not meet the applicable criteria or that the
�	commission determines is not made in good faith, is not credible, or
�	is not in compliance with this chapter or the goals of this chapter.
�	��(d)��Subject to the availability of funding, 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 by 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 shall:
�	��(1)��solicit review and comments from:
�	��(A)��the comptroller to assess:
�	��(i)��the financial stability of the
�	applicant;
�	��(ii)��the economic benefits and job creation
�	potential associated with the project; and
�	��(iii)��any other information related to the
�	duties of that office;
�	��(B)��the Public Utility Commission of Texas to
�	assess:
�	��(i)��the reliability of the proposed
�	technology;
�	��(ii)��the feasibility and
�	cost-effectiveness of electric transmission associated with the
�	project; and
�	��(iii)��any other information related to the
�	duties of that agency; and
�	��(C)��the Railroad Commission of Texas to assess:
�	��(i)��the availability and cost of the fuel
�	involved with the project; and
�	��(ii)��any other information related to the
�	duties of that agency;
�	��(2)��consider the comments received under Subdivision
�	(1) in the commission's grant award decision process; and
�	��(3)��as part of the report required by Section 391.104,
�	justify awards made to projects that have been negatively reviewed
�	by agencies under Subdivision (1).
�	��(g)��The commission may solicit review and comments from
�	other state agencies or other entities with subject matter
�	expertise applicable to the review of a grant application.
�	��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 new technology implementation grant application:
�	��(1)��the projected potential for reduced emissions and
�	the cost-effectiveness of the new technology;
�	��(2)��the potential for the new technology to contribute
�	significantly to air quality goals; and
�	��(3)��the strength of the implementation plan.
�	��Sec.�391.104.��REPORTING REQUIREMENTS. The commission
�	annually shall prepare a report that summarizes the applications
�	received and grants awarded 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 prioritizing 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, an achieved reduction
�	from the baseline emissions adopted by the commission for the
�	relevant facility or stationary source. After studying available
�	emissions reduction technologies, the commission may impose a
�	required minimum percentage reduction of emissions to improve the
�	ability of the program to achieve the program goals.
�	��(e)��If a baseline emissions standard does not exist for a
�	facility, the commission, for purposes of this subchapter, shall
�	adopt an appropriate baseline emissions level for comparison
�	purposes.
�	��(f)��Planned water usage for proposed projects must be
�	consistent with the state water plan.
�	��Sec.�391.202.��EVALUATING COST-EFFECTIVENESS. The
�	commission shall establish reasonable methodologies for evaluating
�	project cost-effectiveness, consistent with accepted methods.
�	��Sec.�391.203.��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; RECAPTURING GRANT. (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)��Except as provided by
�	Subsection (c), in awarding grants under this chapter the
�	commission shall give preference to projects that:
�	��(1)��use natural resources originating or produced in
�	this state;
�	��(2)��contain an energy efficiency component; or
�	��(3)��include the use of solar, wind, or other renewable
�	energy sources.
�	��(b)��Projects that include more than one of the criteria
�	described by Subsection (a) shall be given a greater preference in
�	the award of grants under this chapter.
�	��(c)��The commission may give preference under Subsection (a)
�	only if the cost-effectiveness and emission performance of the
�	project are comparable to those of a project not claiming a
�	preference described by that subsection.
�	[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 operating and
�	maintaining the emissions-reducing equipment.
�	��Sec.�391.302.��COMPTROLLER REVIEW OF USE OF GRANT FUNDS. (a)
�	The comptroller annually shall conduct a review of each recipient
�	of a new technology implementation grant under this chapter to
�	ensure that the recipient's use of the grant 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 grant money or other
�	noncompliance with grant requirements, the comptroller shall
�	provide a report to the commission with recommendations for
�	subsequent action, including the recapture of money misused.
�	��(d)��A finding of any misuse of grant money by a recipient of
�	a grant under this chapter results in a debt owed to the state, and
�	the comptroller may withhold warrants and electronic funds
�	transfers to the recipient 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. Money
�	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 money appropriated for grant purposes. Distribution of
�	the grant money is subject to Section 403.071, Government Code.
�	��Sec.�391.304.��EXPIRATION. This chapter expires August 31,
�	2019.
�	��SECTION�10.��Section 403.071(b), 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.
�	��SECTION�11.��Section 382.0622(a), Health and Safety Code, is
�	amended to read as follows:
�	��(a)��Clean Air Act fees consist of:
�	��(1)��fees collected by the commission under Sections
�	382.062, 382.0621, 382.202, and 382.302 and as otherwise provided
�	by law; [~~and~~]
�	��(2)��$2 of each advance payment collected by the
�	Department of Public Safety for inspection certificates for
�	vehicles other than mopeds under Section 548.501, Transportation
�	Code; and
�	��(3)��fees collected that are required under Section 185
�	of the federal Clean Air Act (42 U.S.C. Section 7511d).
�	��SECTION�12.��Section 382.210(d), 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�13.��Sections 382.220(c) and (d), Health and Safety
�	Code, are 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.
�	��(d)��Fees collected under Sections 382.202 and 382.302 may be
�	used, in an amount not to exceed $5 million per fiscal year, for
�	projects described by Subsection (b).��The fees shall be made
�	available only to counties participating in the low-income vehicle
�	repair assistance, retrofit, and accelerated vehicle retirement
�	programs created under Section 382.209 and only on a matching
�	basis, whereby the commission provides money to a county in the same
�	amount that the county dedicates to a project authorized by
�	Subsection (b). The commission may reduce the match requirement
�	for a county that proposes to develop and implement independent
�	test facility fraud detection programs, including the use of remote
�	sensing technology for coordinating with law enforcement officials
�	to detect, prevent, and prosecute the use of counterfeit state
�	inspection stickers.
�	��SECTION�14.��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 used in a
�	nonmobile application that converts fuel into mechanical motion,
�	including turbines and other internal combustion devices.
�	��SECTION�15.��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�16.��Section 386.104(c), 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
�	non-road equipment used for natural gas recovery purposes, the
�	equipment must be operated in a nonattainment area or affected
�	county for a sufficient amount of use over the lifetime of the
�	project, as determined by the commission, to meet the
�	cost-effectiveness requirements of Section 386.105.
�	��SECTION�17.��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�18.��Section 151.0515(d), Tax Code, is amended to
�	read as follows:
�	��(d)��This section expires August 31, 2019 [~~2013~~].
�	��SECTION�19.��Section 152.0215(c), Tax Code, is amended to
�	read as follows:
�	��(c)��This section expires August 31, 2019 [~~2013~~].
�	��SECTION�20.��Section 501.138(b-3), Transportation Code, is
�	amended to read as follows:
�	��(b-3)��This subsection and Subsection (b-2) expire August
�	31, 2019 [~~September 1, 2015~~].
�	��SECTION�21.��Section 502.1675(c), Transportation Code, is
�	amended to read as follows:
�	��(c)��This section expires August 31, 2019 [~~2013~~].
�	��SECTION�22.��Section 548.5055(c), Transportation Code, is
�	amended to read as follows:
�	��(c)��This section expires August 31, 2019 [~~2013~~].
�	��SECTION�23.��Sections 386.252(a) and (b), 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:
�	��(A)��not more than four percent may be used for the
�	clean school bus program;
�	��(B)��[~~and~~] not more than 10 percent may be used for
�	on-road diesel purchase or lease incentives; and
�	��(C)��a specified amount may be used for the new
�	technology implementation grant program, from which a defined
�	amount may be set aside for electricity storage projects related to
�	renewable energy;
�	��(2)��for the new technology research and development
�	program, nine [~~9.5~~] percent of the money in the fund, of which:
�	��(A)��up to [~~$250,000 is allocated for~~
�	~~administration, up to~~] $200,000 is allocated for a health effects
�	study;
�	��(B)��[,] $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;
�	��(C)��[,] not less than 20 percent is to be
�	allocated each year to support research related to air quality as
�	provided by Section 387.010; [~~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
�	��(D)��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:
�	��(i)��implement and administer the new
�	technology research and development program [~~under a contract with~~
�	~~the commission~~] for the purpose of identifying, testing, and
�	evaluating new emissions-reducing technologies with potential for
�	commercialization in this state and to facilitate their
�	certification or verification; and
�	��(ii)��contract with the Energy Systems
�	Laboratory at the Texas Engineering Experiment Station for $216,000
�	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; and
�	��(3)��two percent is allocated to the commission and 1.5
�	percent is allocated to the laboratory for administrative costs
�	incurred by the commission and the laboratory[~~, three percent of~~
�	~~the money in the fund~~].
�	��(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�24.��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 [~~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
�	nonattainment areas designated in this state [~~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 [~~The board~~
�	~~of directors of a~~] nonprofit organizations to [~~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�25.��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�26.��Sections 387.005(a), (b), and (f), 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 that:
�	��(A)��reduce emissions of oxides of nitrogen and
�	other emissions; and
�	��(B)��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�27.��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�28.��Chapter 387, Health and Safety Code, is amended
�	by adding Section 387.010 to read as follows:
�	��Sec.�387.010.��AIR QUALITY RESEARCH. (a) �The commission
�	shall contract with a nonprofit organization or institution of
�	higher education to establish and administer a program to support
�	research related to air quality.
�	��(b)��The board of directors of a nonprofit organization
�	establishing and administering 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 under the program established under this
�	section.
�	��(d)��A nonprofit organization or institution of higher
�	education 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 or institution of higher
�	education 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 or institution of higher education may not exceed 10
�	percent of the program budget.
�	��(f)��A nonprofit organization that receives grants from the
�	commission under this section is subject to Chapters 551 and 552,
�	Government Code.
�	��SECTION�29.��Chapter 382, Health and Safety Code, is amended
�	by adding Subchapter J to read as follows:
�	SUBCHAPTER J. FEDERAL GREENHOUSE GAS REPORTING RULE
�	��Sec.�382.501.��DEVELOPMENT OF FEDERAL GREENHOUSE GAS
�	REPORTING RULE. (a) The commission and the Railroad Commission of
�	Texas, the Department of Agriculture, 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 as necessary 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.
�	��Sec.�382.502.��VOLUNTARY ACTIONS INVENTORY. The commission
�	shall:
�	��(1)��establish an inventory of voluntary actions taken
�	by businesses in this state or by state agencies since September 1,
�	2001, to reduce carbon dioxide emissions; and
�	��(2)��work with the United States Environmental
�	Protection Agency to give credit for early action under any federal
�	rules that may be adopted for federal greenhouse gas regulation.
�	��SECTION�30.��The purpose of the changes in law made by this
�	Act is to encourage the development of onshore and offshore
�	geologic storage of carbon dioxide including by encouraging the
�	development of advanced clean energy projects that capture carbon
�	dioxide and sequester not less than 50 percent of the captured
�	carbon dioxide in onshore or offshore geologic repositories.
�	Securing the necessary capacity for geologic sequestration is
�	essential to the success of carbon capture strategies, such as the
�	advanced clean energy projects facilitated by the changes in law
�	made by this Act. The success of the offshore repositories
�	facilitated by this Act depends on an adequate supply of
�	anthropogenic carbon dioxide, which is not currently being captured
�	at industrial facilities in this state. The advanced clean energy
�	grants established in this Act are intended to create the supply of
�	anthropogenic carbon dioxide necessary to the success of the
�	offshore repositories facilitated by this Act.
�	��SECTION�31.��This Act takes effect September 1, 2009.
�
�
�	______________________________	______________________________
�	��President of the Senate	Speaker of the House��
�
�
�	��I certify that H.B. No. 1796 was passed by the House on May 7,
�	2009, by the following vote:��Yeas 144, Nays 0, 1 present, not
�	voting; that the House refused to concur in Senate amendments to
�	H.B. No. 1796 on May 29, 2009, and requested the appointment of a
�	conference committee to consider the differences between the two
�	houses; and that the House adopted the conference committee report
�	on H.B. No. 1796 on May 31, 2009, by the following vote:��Yeas 143,
�	Nays 0, 1 present, not voting.
�
�	______________________________
�	Chief Clerk of the House��
�
�	��I certify that H.B. No. 1796 was passed by the Senate, with
�	amendments, on May 27, 2009, by the following vote:��Yeas 31, Nays
�	0; at the request of the House, the Senate appointed a conference
�	committee to consider the differences between the two houses; and
�	that the Senate adopted the conference committee report on H.B. No.
�	1796 on June 1, 2009, by the following vote:��Yeas 31, Nays 0.
�
�	______________________________
�	Secretary of the Senate��
�	APPROVED: __________________
�	��Date��
�	�
�	�� __________________
�	��Governor��

	
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