Kathleen Hartnett White, Chairman Larry R. Soward. Commissiorzer MartinA. Hubert, Commissioner Glenn Shankle, Executi~~e Director 

# TEXAS COMMISSION ON 

# ENVIRONMENTAL QUALITY Protecting Texas by Reducing and Preventir7g Pollution October 10, 2006


### Docket No. 2005-2006-RUL

Richard E. Greene, Regional Administrator U.S. Environmental Protection Agency - Region 6 1445 Ross Avenue Dallas, Texas 75202-2733
Dear Mayor Greene: On September 20, 2006, the Texas Commission on Environmental Quality (Commission) adopted revisions to the State Implementation Plan (SIP). I- 3 3 il 

## - - i. I



### . c-. The Commission adopted amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor 

### L , 

### 73

(-1 

### ;-?I Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622, ne&y -4 c-3 Section 114.624; and Subchapter K, new Division 4, new Sections 114.640, 114.642, 114.644, 1

### 14.8T55ndz 114.648; and corresponding revisions to the SIP. The adoption implements House Bill 3469 and Houkall 

# - 248 1, 79th Legislature, 2005, Regular Session. The adopted rulemaking establishes rules for the ~ex&flea<? 

### CC TrT School Bus Program as directed by House Bill 3469. The adopted rulemaking also clarifies cost effectiqesS3



### .. requirements for the Texas Emissions Reduction Plan, establishes a rebate grant program as part of the BasLq Emissions Reduction Plan, and clarifies scrappage requirements for repower and replacement projects u&r 

### cn the Texas Emissions Reduction Plan grant program as provided in House Bill 248 1.

Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record of the public hearing, and the accompanying order. I look forward to your expeditious approval of these SIP revisions. Sincerely,

Fathleen Hartnett White Chairman



### Logged 

### ir-3 P.O. Box 13087 Austin, Texas 78711-3087 512,239-1000 Internet address: www.tcel dac 

# i~aalx

pr,:,te~I <,r, I;L\.I+J p,,:~~,r ~!,\::2 >,I, htt>?dRichard E. Greene, Regional Administrator Page 2 October 10, 2006

Enclosures

cc: The Honorable Rick Perry, Governor of Texas Mr. Zak Covar, Office of Budget, Planning and Policy, Office of the Governor Mr. Glenn Shankle, Executive Director, Texas Commission on Environmental Quality

### THE STATE OF TEXAS $


### COUNTY OF TRAVIS $



### This is to certify that the attached are true and correct copies of documents for revisions to the Texas State Implementation Plan, adopted on September 20, 2006, pursuant to 40 Code of Federal Regulations (CFR) $51.104. I am the records administrator for the General Law Division of the Texas Commission on Environmental Quality.

Director, General Law Division Texas Commission on Environmental Quality

## 06 

# OCT I 

## 3 F?l 2: :f,

Texas Commissionon EnvironmentalQuality Public Hearing

May 9,2006 Concerning Revisions to Chapter 114, Control of Air Pollutionfrom Motor Vehicles House Bill3469 and House Bill 2481:

Texas Clean School Bus Program Rule Project No.2006-01 6-1 14-ENINTRODUCTION

The Texas Commissionon EnvironmentalQuality (commission) held a public hearing inAustin on May 9, 2006, to receive testimony concerning revisions to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles.

The adopted rulemaking implements House Bill 3469 and House Bill2481,79th Legislature, 2005. The adopted rulemaking establishes rulesfor the Texas Clean School Bus Program as directed by House Bill 3469, clarifies cost effectiveness requirements for the Texas Emissions Reduction Plan, establishes a rebate grant program as part oftheTexas Emissions Reduction Plan, and provides for clarification of scrappage requirements for repower and replacement projects under the Texas Emissions Reduction Plan grant program as provided in House Bill 2481.

The comment period closed on May 16, 2006. All testimony and comments have been reviewed and seriously considered. This hearing record contains a complete record ofthe public hearing and is divided into the following four sections:

0 Public Notification and Proposal

0 Written and OralTestimony

0 Evaluation of Testimony

o Staff Recommendations/Order

Additional copies of this hearing recordare maintained inthe TCEQ central office at 12100 Park 35 Circle, Austin, Texas 78753. Forfurther information, please contact Erik Gribbin at (512)239-2590.

# PUBLIC NOTIFICATION AND PROPOSALPUBLIC NOTIFICATION

Notification to the public of the proposed revisions was conducted by the following procedures:

1. Publication of notice of public hearings inthe following newspapers on the date listed: Austin American Statesman; April 3, 2006 Fort Worth Star-Telegram; April 3, 2006 Houston Chronicle;April 3, 2006

2. Publication of the proposed rules in the April 14, 2006, issue of the Texas Register (31TexReg 3187).

3. Publication of the Notice of Public Hearing in the April 14, 2006, issue of the Texas Register (31 TexReg 3287).

4. Correspondence forwarding the notice of public hearingsto the following officials and agencies: Speaker of the House Lieutenant Governor City of Victoria Planning Department Dallas Department of Environmental and Health Services Dallas Department of Aviation El Paso City-County Health and Environmental District El Paso Metropolitan Planning Organization Federal Highway Administration Fort Worth Environmental Management Department Galveston County Health District Houston Department of Health and Human ServicesHarris County Pollution Control Department North Central Texas Council of Governments Houston-GalvestonArea Council South EastTexas Regional Planning Commission Texas Departmentof Transportation Texas Transportation Institute Arkansas Department of Pollution Control and Ecology Louisiana Department of Environmental Quality New Mexico Environmental Department Oklahoma Departmentof Environmental Quality 

### U. S. Environmental Protection AgencyExample of Newspaper Classified Ad
Fort Worth Sfar-Telegram, April 3,2006specific general permit.

Further information may alsobe Quality Division, Storm Water 4671. Si desea informacion en Espanol, uede llamar 1-800-687-4040, 

# P TRD-200601994 LaDonna Castariuela Chief Clerk Texas Commission on Environmen al Quality Filed: April 4. 2006 

# 1

Notice ofPublic Hearing on ProposedRevisions to 30 TAC Chapter 114 TheTexas Commission on Environmental Quality will conduct a public hearing to receivetestimony concerningrevisions to 30TAC Chapter 114, Control of Air Pollution eomMotor Vehicles, under the requirements ofTexas Health and SafetyCode, $382.017; Texas Government Code, Chapter2001, SubchapterB; and40CodeofFederal Regulations $51.102, oftheUnited StatesEnvironmental Protection Agency (EPA) regulations concerning state implementation plans (SIPS). The proposed rulemaking would implement House Bill 3469 and House Bill 2481, 79th Legislature, 2005. The proposed rulemaking would establish rules for the Texas Clean School Bus Program as directed by House Bill 3469. The proposed rulemaking would also clarify cost effectiveness requirements for the Texas Emissions Reduction Plan, establish a rebate grant program as part of the Texas Emissions Reduction Plan, and provide for clarification of scrappage requirements for repower and replacement projects under the Texas Emissions Reduction Plan grant program as provided in House Bill 2481. A public hearing on this proposal will be held in Austin, Texas on May 9,2006, at2:00 p.m. at the Texas Commission on Environmental Quality in Building F, Room 2210, located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during thehearing; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearing. Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Holly Vierk, Office of Legal Services, at (512) 239-0177. Requests should be made as far in advance as possible. Comments may be submitted to Holly Vierk, MC 205, Texas Register Team, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Project Number 2006- 016-1 14-EN. Comments mustbereceived by 5:00p.m., May 16,2006. Copies of the proposed rules can be obtained from the commission's Web site at http://w. tceq.state. tx.us/nav/nrles/propose_adopt.html. For further information, please contactErik Gribbin, Air Quality Planning and Implementation Division, at (5 12) 239-2590. TRD-200601935 Stephanie Bergeron Perdue Acting Deputy Director, Office of Legal Services Texas Commission on Environmental Quality Filed: March 31, 2006

Revisions to 30 TAC
The Texas Commission on sion) will conduct apublic visions to 30TAC Chapter ments of Texas Health and ment Code, Chapter 2001,

islature, 2001, tha

Persons planning to attend the aring who have special communication or other accommodation ne dsshould contact Lola Brown, Office ofLegal Services, at (512) 239- 348. Requests shouldbe made as far in advance as possible. 

# I

INADDITION April 14,2006 31 

### TexReg3287pkmbie eeltfleil];
fficers of all [Medid] providers 

### of

der arrangement. This agency hereby that the proposalhas been reviewed by legal counsel bewithinthe agency's legalauthority to adopt. Filed withthe Office oft e Secretary of State on April 3, 2006. TRD-200601986 Cathy Campbell General Counsel Departmentof State Healt Services Earliest possible date of a option: May 14,2006 Forfurther information, pi se call: (512)458-7111 x6972 

# +

# I

+ +

25 TAC 5419.460

Ithand Safety Code, 5534.052, rules necessary and appropriate to ensure the a ion of community based mental health services mental health authority; Health

, which requires the department rehabilitation programs are availThe repeal affects 

### over' ment Code, Chapter 531; and Health and Safety Code. Chaptb 534 and 1001. $419.460. Rehabilitative $ozmnseling and Psychotherapy. Thisagency herebycertifi s that the proposalhas been reviewed by legal counsel andfoun to be within the agency's legal authority to adopt. 

# d I t Filedwith the Office of the Secretary of State on April 3, 2006. TRD-200601987 

# I Cathy Campbell General Counsel


# + + + TITLE 30. 

### ENVIRONMENTALQUALITY 

### PART 1. TEXAS COMMISSION ON ENVIRONMENTAL 

### QUALITY CHAPTER 114. 

### CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES 

### SUBCHAPTER 

### K. 

### MOBILE SOURCE INCENTNE PROGRAMS The Texas Commission on Environmental Quality (commission) proposes amendmentsto §I14.620 and s114.622. The commission also proposes new ss114.624, 114.640, 114.642, 114.644, 114.646, and 114.648. The new and amended sections are proposed to be submitted to the United States Environmental ProtectionAgency (EPA) as revisions to the state implementation plan (SIP). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES House Bill (HB) 3469, 79th Legislature, 2005, added Chapter 390 to the Texas Healthand Safety Code. This new chapter directs the commissionto establish and administera clean school bus program within the financial limits set by amendeds386.051 and s386.052 (HB 3469, 79th Legislature). This clean school bus program will fund efforts by school districts to improve the health of children by reducing emissions of diesel exhaust from school buses. Reduction of emissions from diesel-powered school buseswill also benefit the public in ozone nonattainment areas by reducing emissions of nitrogen oxides (NO,). The commission is proposing new 55114.640, 114.642,114.644, 114.646, and 114.648 to establish this program. Under these proposed sections, school districts, charter schools, and regional planning organizations would be eligible for reimbursement grants for the use of emissions reducing catalysts, particulate filters, qualifying fuels, and other emissions reducing add-on equipment or technology that the commissionfinds will reduce emissions. House Bill 2481, 79th Legislature, 2005, added s386.117 to the Health and Safety Codeto add a rebate grant programunder the Texas Emissions Reduction Plan (TERP). New $114.624 is proposed to implement this program. The rebate grant will streamline the grant application process for some applicants and will ease the administrative burden on program staff. Proposed amendments to s114.622 will clarify that for replacement and repower projects, the baseline vehicle, equipment, or engine must be scrapped or permanently removed from the State of Texas. Proposed amendments to $114.620 and $114.622 createan option for the commission to use an equivalent measure to the current $13,000 per ton cost effectiveness standard or an alternative approved by the commission. These amendments will improve TERP program effectiveness by ensuring that high-emitting engines cannot be reintroduced into

PRC?POSEDRULES 

### April 14,2006 31 TexReg3187an affected county and allowing the commissionto increase the emissions reductions created by grants. SECTION BY SECTION DISCUSSION The commission proposes administrative changes throughout this rulemaking to be consistent with guidance provided in the Texas Legislative Council DraftingManual, November2004, and to conform with Texas Register requirements and agency guidelines. The proposed amendment to $114.620 modifies the definition of "Cost-effectiveness" to clarify how the cost-effectiveness of TERP grant applications will be determined. The proposed amendment to $114.622 clarifies that, for grants entailing replacement or repower of an engine or other equipment, the original equipment must be permanently removed from the State of Texas. The proposed amendment to $114.622 also clarifies that the commission may establish cost-effectiveness standards lower than the statutory$13,000 per ton and that the commission may also make project selection decisions on a variety of factors in addition to cost-effectiveness. Proposed new $114.624, Rebate Grant Process, establishes a processthat awards TERP funds as a rebate. This new process would provide for ongoing, first-come, first-served awarding of standardized rebates for designated projecttypes. It would create a simple, streamlined process to award TERP funds. Proposed new $1 14.640, Definitions, provides definitions for the Texas Clean School Bus Program. This section provides definitions for important terms in the proposed new division. Proposed new$114.642, Applicability, establishes program eligibility for schooldistricts and charter schools. This proposedsection also allows regional planning organizations, such as Councils of Government, and private nonprofit organizations to apply for and receive grants to improvethe program. Proposed new $114.644, Clean School Bus Program Requirements, establishes basic program requirements, including: the types of projects eligible for a clean school bus grant; the ability of the commission to limit or prioritize funding for the Texas Clean School Bus Program; the minimum useful life of a project under the grant program;a requirementthat replaced equipment be permanently removed from the State of Texas; restricting the use of grant funds to pay incremental costs associated with the project and prohibition against using the grant for administrative expenses; prohibition against recipients using grant funding to meet federal or state legal requirements and using emissions reductions as part of an emissions banking or trading program; grant application requirements; and obligation of the grant recipient to return grant funds if they fail to meet the terms of a project grant or conditions of the proposed division. Proposed new $114.646, Monitoring, Recordkeeping, and Reporting Requirements, establishesthat grant recipients must adhereto the reporting requirementsof their grant,which will occur no less frequently than annually. Proposed new$114.648, lmplementation Schedule, establishes that the Texas Clean School Bus program will expire on August 31, 2013. FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT Nina Chamness, Analyst, Strategic Planning and Assessment Section, hasdeterminedthat, forthefirst five-year periodthe proposed rules are in effect, no fiscal implicationsareanticipated for the agency or other units of state government as a result of administration or enforcementof the proposed rules. The proposed rules provide a mechanism to implement the "clean school bus program"and amend some provisions of the existingTERP program to provide more program flexibility and clarification of requirements. Fiscal implications are anticipated for regional planningorganizations and local independent school districts if,when funding becomes available, they elect to participate in a "clean school bus program" or apply for a TERP grant. House Bills2481 and 3469, 79th Legislature, amended parts of theTexas Health and Safety Code to directthe commission to: 1) add a rebate grant program under the Texas Emissions Reduction Plan (TERP); and 2) establish and administer a cleanschool bus program if TERP funds are available after achieving the emission reductionobjectives of the State Implementation Plan (SIP). One part of the proposed rulemaking provides the mechanism to administerand manage a grant and rebate program to promote the use of cleaner diesel buses in schools. Under this program, independent school districts, charter schools, and regional planningorganizations could become recipients of TERP funds (Account 5071) inorderto reduce emissions of diesel exhaustfromschool buses. Another part ofthe proposed rulemaking clarifies requirements for TERP replacement and repower projects and amendsthe manner inwhichthe cost effectiveness of projects applying for TERP grant funds will bejudged. Althoughthe proposed rules establishthe needed framework for a clean school bus program, two criteria established for making TERP revenue available to fund clean school bus program grants are not expected to be met in the current biennium. The commissiondoes not anticipate that TERP funds will exceed the comptrollers' revenue estimate, nor does the commission anticipate that excess TERP funds will be available after funding projects to meet the SIP objectives for air quality. In addition, the commission was not granted the needed appropriation authorityto fund grants underthe clean school bus program during the 2006

# - 2007 biennium. Oncethe commission is given the needed appropriationauthority, andTERP revenues reachthe levels requiredto fund a clean school bus program, the estimated 1,255 independent school districtsand charterschools inTexas could become eligible to re- ' ceive funds inthe form of reimbursement grants to reduce emissions from the estimated 35,142 diesel-powered school buses in the state. The proposed rules would also allow regional planning organizationsto become grant recipientsfor the purpose of achieving the goals of the clean school bus program intheir region. Under the clean school bus program, participation is voluntary, and grant funds are intended to offset the costs of using school busesthat emit lower levels of air contaminants. Whether grant funding would be sufficient to offset the total cost of complying with grant requirementsfor these school buses depends on the amount of funding available, the number and age of qualifying buses, and the cost of the methods chosen by grant recipients to meet grant requirements. Options to utilize buses with lower diesel emissions run from a cost of $0.13 more per gallon of emulsified diesel fuel to $10,000 for diesel particulatefilters. Currently, local governments can apply for funds under the existing TERP grant program to reduce vehicle emissions in the 41 counties covered by the TERP program. The proposed rulemaking, by making the criteria forjudging cost effectiveness more flexible, may allow projects, not currently funded byTERP grants,to receive funding. Given the wide universe of applicants

31 TexReg3188 April 14, 2006 TexasRegisterand types of projects that could be funded by TERP grants, the fiscal implications to local governments are not known at this time. PUBLIC BENEFITS AND COSTS Ms. Chamness also determined that for each year of the first five years the proposed rules are in effect, the public benefd anticipatedfrom the changes seen in the proposed rules will be the establishment of a program, which when funded, will promote lower emissions of air contaminants. If funding to implement the "clean school bus program" becomes available, school districts or charter schools transporting school children could become recipients of monies which could lower their costs of using buses that have lower diesel emissions. The proposed rulemaking provides a variety of acceptable optionsto lower diesel emissionsfrom school buses. These options range from a cost of $0.1 3 more per gallon of emulsified diesel fuel to $10,000 for diesel particulate filters. Due to increased flexibility injudging cost effectiveness, busi-. nesses applying for TERP grants may see projects not previously funded receiveTERP funding. SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT No adverse fiscal implications are anticipated for small or micro-businesses that serve as third party contractors to transport school children. If funding to implement the program becomes available, small or micro-businessesmayqualify to receive grant funding to offset the costs associated with complying with the program's requirements. Increased flexibility injudging the cost effectiveness of a TERP grant project may increase the amount of TERP funding received by small or micro-businesses. LOCAL EMPLOYMENT IMPACT STATEMENT The commission has reviewedthis proposed rulemaking anddetermined that a local employment impact statement is not required because the proposed rules do not adverselyaffect a local economy in a material way for the first five years that the proposed rules are in effect. DRAFT REGULATORY IMPACT ANALYSIS DETERMINAl-ION The commission reviewed the proposed rulemakingin lightof the regulatory analysis requirements of Texas Government Code, 52001.0225, and determined that this proposal is not subject to §2001.0025 because it does not meet the definition of a "major environmental rule" as defined inthat statute. A "major environmental rule" meansa rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The proposed amendments to Chapter 114 modify the existing rules in accordance with House Bill 3469, 79th Legislature, which amendedTexas Healthand Safety Code, 5386.051(b) and added Texas Health and Safety Code, Chapter 390 to require the commission to establish a clean School-BUS Program. The Clean School Bus Program is intended to reducediesel exhaust emissions from school buses by funding eligible projects. These rule amendments are part of a voluntary incentive program with the goal of reducing diesel emissions and as such, the proposed rules will not adversely affect in a materialway the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Further, the proposed amendments to Chapter 114 modify the existing rules in accordance with House Bill 2481, 79th Legislature, which amended Chapter 386, Subchapter C of the Texas Health and Safety Code by adding 5386.117, directing the commission to adopt a process to award grants inthe form of rebatestostreamline the grant application, contracting, reimbursement, and reporting processes for certain projects under the TERP. These rules amendments will implement procedural changes and will have no effect on the environment or human health. These rule amendments are part of a voluntary incentive program with the goal of reducing diesel emissions and as such, the proposed ruleswill not adversely affect ina materialway the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. In addition, a draft regulatory impact analysis is not required because the rules do not meet anv of the four a~~licabilitv criteria for requiringa regulatoryanalysisofa "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not exceed a standard set byfederal law, and the proposed technical requirements are consistent with applicable federal standards. In addition, this proposal does not exceed an express requirementof state law and is not proposed solely under the general powers of the agency, but is specifically authorized by the provisions cited in the STATUTORY AUTHORITY section of this preamble. Finally, this rulemaking does not exceed a requirement of a delegation agreement or contract to implement a state and federal program. The commission invites public comment on the draft regulatory impact analysis determination. TAKINGS IMPACTASSESSMENT The commission evaluated this rulemaking action and performed an analysis of whether the proposed rules are subject to Texas Government Code, Chapter 2007. The primary purpose of the rulemaking is to amend Chapter 114 in accordance with House Bill 3469 and House Bill2481. These amendments im~lement a voluntary program and only affect motor vehicles and equipment which are not consideredto be private real propertv. Therefore.

..

### - promulgation and enforcement of these proposed rules are neither a statutory nor a constitutional taking because they do not affect private real property. Therefore, these rules do not constitute a taking under Texas Government Code, Chapter 2007. CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM The commission reviewed the proposed rulemaking and found that the proposal is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, §§33.201 et seq., and therefore must be consistent with all applicable CMP goals and policies. The commission conducted a consistency determination for the proposed rules in accordance with Coastal Coordination Act Implementation Rules, 31 TAC 5505.22, and



### PROPOSED RULES April 

### 14,2006 31 TexReg3189found the proposed rulemaking is consistent with the applicable CMP goals and policies. The applicable goalof the CMP is to protect, preserve, restorei and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas. The specific CMP policy applicable to these rules isthat commission rules comply with 40 Code of Federal Regulations(CFR), to protect and enhance air quality in coastal natural resourceareas (31 TAC 5501.32). The commission reviewed this proposed rulemaking for consistency with the Texas CMP goals and policies in accordance with the regulations of the Coastal Coordination Council and determined that the amendments are consistent with CMP goals and policies because this proposed rulemaking action would reduce air pollution from diesel-powered school buses. No new sources of air contaminants are authorized and nitrogen oxides and particulate air emissions would be reduced as a result of these rules. This proposed rulemaking complies with 40 CFR Part 51. This proposed action is part of the control strategy for ozone nonattainment areas in accordance with SIP requirements in40 CFR Part 51 and reduces emissions of particulate matter consistent with National Ambient Air Quality Standards set for particulate matter in 40 CFR Part 50. Promulgation and enforcement of these rules will not violate or exceed any standards identified in the applicableCMP goals and policies because the proposed rules are consistent with these CMP goals and policies, because these rules do not create or have a direct or significant adverse effect on any coastal natural resource areas, and because the proposed rules will reduce emissions of air pollutants. Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the SUBMITTAL OF COMMENTS section of this preamble. ANNOUNCEMENT OF HEARING A public hearing onthis proposal will be held in Austin on May 9, 2006, at 2:00 p.m. at the Texas Commission on Environmental Quality Complex located at 12100 Park 35 Circle in Building F, Room 2210. The hearing will be structured for the receipt of oral or written comments by interestedpersons. Individualsmay presentoralstatements when called upon inorder of registration. There will be no open discussion during the hearing; however, anagency staff memberwill beavailableto discuss the proposal 30 minutes prior tothe hearingand will answer questions before and after the hearing. Persons who have specialcommunication or other accommodation needs who are planningtoattendthe hearing should contact HollyVierk at (512) 239-0177. Requests should be made as far in advance as possible. SUBMITTAL OF COMMENTS Comments may be submitted to Holly Vierk, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Project Number 2006-016-114-EN. The proposed rules may be viewed on the commission's Web site at hffp://www.tceq.state.tx.us/nav/ruledpropose~adopt.html. Comments must be received by 5:00 p.m., May 16, 2006. For further information please contact Erik Gribbin, Air Quality Planning and ImplementationDivision, (512) 239-2590. 

### DIVISION 3. 

### DIESEL EMISSIONS REDUCTION INCENTIVE PROGRAM FOR ON-ROAD AND NON-ROAD VEHICLES 30 TAC 55114.620, 114.622, 114.624 STATUTORY AUTHORITY The amendments and new section are proposed under Texas Water Code, 55.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; 55.103, which authorizes the commission to adopt anyrules necessaryto carry out the powers and duties under the provisions of theTexas Water Code and other laws of this state; and 55.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The amendments and new section are also proposed under Texas Health and Safety Code, Texas Clean Air Act, 5382.017, which authorizes the commissionto adopt rules consistent with the policy and purposesof the Texas Clean Air Act; 5382.01 1, which authorizes the commission to establish the level of quality to be maintained inthe state'sair and to controlthequality of the state's air; 5382.012, which authorizes the commissionto prepare and develop a general, comprehensive plan for the control ofthe state's air; and Chapter 386, which establishes the TERP. Finally, the amendments and new section are proposed as part of the implementation of House Bill 2481, 79th Legislature,2005. The proposed amendments and new section implement Texas Clean Air Act, 55382.002, 382.011, 382.012, 382.017, 386.051, and House Bill 2481, 79th Legislature,2005. .f114.620. Definitions. Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules of the commission, the terms used in this subchapter have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms which are defined by the TCAA; and 583.2, 101.1, and 114.1ofthistitle(re1ating to Definitions),the followingwords and terms, when used in this division shallhave the following meanings, unless the context clearly indicates otherwise. (I) Cost-effectiveness--The total dollar amount expended divided by thetotal number oftonsofnitrogen oxides emissionsreduction attributable to that expenditure. In calculating cost-effectiveness, onetimegrants ofmoney atthe beginning ofa proiect shallbe annualized using a time value ofpublic findsor discount rate determined for each projectby the commission,!aking into account the interest rate on bonds, interest earned by state funds, and other factors the commissa considers appropriate. (2)

## - (7) (No change.) (8) Qualifying fuel--Any liquid or gaseous fie1 or additives registered orverified by the United StatesEnvironmental Protec- tion Agency [EM] that is ultimately dispensed into a motor vehicle or 

### - on-road ornon-mad diesel that provides reductions ofnitrogen oxides emissions beyond reductions required by state or federal law. (9) (No change.) (10) Retroiit--Toequipan engine and fuel systemwith new emissions-reducing parts or technology verified by the United States Environmental ProtectionAgenc~ [EM]after manufacture ofthe original engine and fuel system. (1 1) .(No change.) f114.622. Incentive Ptvgrcim Reyuiremenh. (a)

## - (b) (No cha~~ge.)



### 31 TexReg3190 April 14, 2006 Texas Register(c) For a proposed project that includes a replacement of equipment or a repower, the old equipment or engine must be recycled, scrapped, or otherwise permanently removed from the State of Texas. [terneveti #kern aH eetfriks Wd in +l-l4629of this We frebtmgb 

# ~~ Gemt4es andkRpleme~&enS&etiule+] (d) To be eligible for a grant, the cost-effectiveness of a proposed project aslisted in subsection (a) of this section, exceptfor infrastructure projects and infrastructurepurchasesthat are part ofa broader retrofit, repower, replacement, or add-on equipment project, must not exceed a cost-effectiveness of $13,000 per ton of NO, emissions reduced. The commission may set lower cost-effectivhess limits as needed to ensure the best use ofavailable funds. Thecommission may alsobase project selection decisions on additional measures to evaluate the effectiveness of projects in reducing NO, emissions in relation to the funds to beawarded. [$-eQ00 pef ten eM, entissiens] ' (e) 

### - (i) (No change.) AY114. 624. Rebate Grant Process. @J This section establishes a process to provide fast and simple access to rebate grants, in accordance with Texas Health and Safety Code, $386.1 17. @J The rebate grant process shall: II) designate certain types ofprojects eligible for rebates; Q project standardized oxides of nitrogen emissions re- ductions for each designated project type; 

# rn assign a standardized rebate amount for each designated proiect type; (4J allow for processing rebates on an ongoing first-come, first-served basis; and @ consolidate, simplify, and reduce the administrative work for applicants and the commission associated with grant application, contracting, reimbursement, and reporting processes for designated project types. @J The commission may: II) award rebate grants as a pilot project for a specific re- gion or may award the grants statewide; 

# a limit or expand the designated project types as neces- sary to further the goals of the program; and 

### 122 administer the rebate grants or may designate another entity to administer the grants. This agency herebycertifies that the proposalhas been reviewed by legalcounsel and found to bewithin the agency's legal authority to adopt. Filedwith the Office ofthe Secretaryof State on March31,2006. TRD-200601933 Stephanie Bergeron Perdue Acting Deputy Director,Office of Legal Services

, Texas Commission on Environmental Quality Earliest possible date of adoption: May 14. 2006 For further information. please call: (512)239-0177


### DIVISION 4. TEXAS CLEAN SCHOOL BUS 

### PROGRAM 30 TAC @114.640, 114.642,114.644, 114.646,114.648 STATUTORYAUTHORITY The new sections are proposed under Texas Water Code, 55.1 02, which provides the commissionwith the general powers to carry out its duties under the Texas Water Code; 55.103, which authorizesthe commission to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and 55.105, which authorizes the commission by rule to establish and ap prove all general policy of the commission. The new sections are also proposed under Texas Health and Safety Code, Texas Clean Air Act, 5382.017, which authorizes the commission to adopt rules consistent with the policyand purposesof the Texas Clean Air Act; 5382.011, which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; 5382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; Chapter 386, which establishes the TERP; and Chapter 390, which establishes the Clean School Bus Program. Finally, the new sections are proposed as part of the implementation of House Bill 3469, 79th Legislature, 2005. The new sections implement Texas Clean Air Act, 55382.002, 382.011, 382.012, 382.017, 386.051, and House Bill 3469, 79th Legislature, 2005. $114.640. Definitions. Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules of the commission, the terms used in this subchapter have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms which are defined by the TCAA and 3§3.2,101.1, and 114.1 of thistitle (relatingtoDefinitions), the following wordsandterms, when used in thisdivision shall have thefollowing meanings, unless the context clearly indicates otherwise. II) Diesel exhaust--One ormore ofthe airpollutants emitted from an engineby the combustion of diesel fuel, including particulate matter, nitrogen oxides, volatile organic compounds, air toxics, and carbon monoxide. Incremental cost--The cost ofan applicant's project less a baseline cost that would otherwisebe incurred by an applicant in the normal course ofbusiness. Incremental costs may include added lease or fuel costs as well as additional capital costs. 

### fi Qualifying fuel--Includes any liquid or gaseous fuel or additive registered orverified by the United StatesEnvironmental Protection Agency,otherthan standardgasoline ordiesel, that isultimately dispensed into a school bus that provides reductions of emissions of particulate matter. (4J Repower--To replace an oldine powering an on-road or non-road diesel with a new engine; a used engine; a remanufactured engine; or electric motors, drives, or fuel cells. @ Retrolit--To equip an engine and fuel system with new emissions-reducing parts or technology verified by the United States Environmental Protection Agency after manufacture of the original engine and fuel system. $114.642. Agplicabilig (aJ Any school district orcharter school in this statethat oper- ates one or more diesel-fueled school buses or atransportation systeln - provided by a countywide school district maydy for and receive a g;rantunder the program.

PROPOSED RULES April 14,2006 31 TexReg3191(bJ The commission may allow a regional planning commission, council of governments, or similar regional planning agency createdunder Local Government Code, Chapter39 1,ora private nonprofit organization to apply for and receive a grant to improve the ability of the program to achieve its goals. ,f114.644. Clean School Bus Progranr Requirements. {aJ Eligible proiects include: (IJ diesel oxidation catalysts for school buses builtbefore 1994; (2J 

### diesel particulate filters for school buses buill

### from 1994 to 1998; (3J Ihe purchase and use of emission-reducing add-on equipment for school buses, including devices that reduce crankcase emissions; the use of qualifying fuel; and other technologies thatthe commission finds will bring about significant emissions reductions. (bJ 

### commission may limit fiinding under a particular funding round to certain areas of the state, types of applicants, and/or ofprojects. Thecommission may place a priority on fundingfor proiects conducted in areas that do not attain certain national ambient air quality standards, 

### - @ Priorto each fundinaod, the commission may establish priorities and omiteriafor reductioan diesel exhaust emissions tobe achieved by proiects funded during that period, including designation of additional pollutants to be addressed. A proposed project must achieve areduction in emissions ofdiesel exhaust compared with thebaseline emissions according to thepercentage reduction level and other priorities established by the commission. The commission may also establish maximum levels for the funding awarded in relation to &emission reductionsproiected to be achievedby a project, in order to maximize the use ofavailable funds. @J A school bus proposed for retrofit must be used on a regular, daily routeto andfrom a school and have at least five years ofuseful life remaining unless the applicant agrees to remove theretrofit device attheend of the life ofthe bus and reinstall the device on another bus. [eJ For a proposed project thatincludes a replacement of equipment ora repower, the old equipment orengine mustberecycled, scrapped, removed from the StateofTexas. @ An application for a grant under this program is only eligible if it is made on the form provided by the comlnission and contains - - the informationrequired bytl,ecommission. - Apiei>t ofa grant underthis division shall use thegrant to pay incremental costs of the project for which the grant is made, which may includethereasonable and necessary expensesjncurred for the labor needed to install emissions-reducing equipment. The recipientmay notusethe grant topay therecipient's administrative expenses. (hJ Pmiects finded with a grant from this psram maynot be used for credit under any state or

### federal emissions reduction credit averaging, banking, ortradina program except-asprovidedunder Texas Health and Safety Code, 1386.056. 

## (9

.&proposed project as listed in subsection(a) ofthis section is not eltgtble if it is required by any state or federal law, rule orregulation, memorandum ofagreement, or other legally binding document. This subsection does not apply to an otherwise qualified project, re- gardless ofthe fact thatthe state implementation plan assumes thatthe change in equipment, vehicles, xoperations-will-occur, if on the date the grant is awarded the change knotrequired by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document or the purchase of an on-road diesel or equipment required onlyby local law or regulation or by corporate orcontrolling board policy of a public or private entity. 

### 0 Ifa grantrecipient failsto meet the terms ofa project grant or theconditions ofthis division, theexecutive directorcan requirethat the grant recipient return some orall of the grant funding to theextent that emission reductions are not achieved or cannot be demonstrated. ~7114.646. monitor in^.Recordkeeping,and Reporting Requirrments. Grant recipients must meet the reporting requirements of their grant, which must occur no less frequently than annually. ,6114.648. Implementation Schedule. This division expires August 31, 2013. Thisagencyhereby certifiesthattheproposal hasbeen reviewed by legal counselandfoundtobewithin the agency'slegal authority to adopt. Filed with the Office ofthe Secretaryof Stateon March 31,2006. TRD-200601934 Stephanie Bergeron Perdue Acting Deputy Director, Office of Legal Sewices Texas Commission on Environmental Quality Earliest possible date of adoption: May 14,2006 For further information,please call: (512) 239-0177


### CHAPTER 29

### 1. 

### UTILITY REGULATIONS TheTexas Commission o Environmental Quality (commission) proposes amendments t $9291.8, 291.15, 291.21, 291.22, 291.24, 291.26, 291.28, 91.29, 291.31, 291.34, and 291.81. The commission also pro oses to add new 5291.35. BACKGROUND AND S MMARY OF THE FACTUAL BASIS FOR THE PROPOSED

# 1

ULES

oceeding in which the agency has September 1,2001. Additionally, .145, Multiple Systems Consolinew subsection (b)which states, a public utilitythat provided utility

31 

### TexReg3192 April 14, 2006 Texas RegisterKathleen HartnettWhite, Chairman R. B. "Ralph" Marquez, Commissio?7er Larry R. Soward, Commissioner Glenn Shanltle, ExecutiveDirector

Protecting Texas byReducing and Preventing Pollution



### NOTICE OF PUBLICHEARING BY THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ON PROPOSED REVISIONS TO 30 

### TAC CHAPTER 114AND TO THE STATE IMPLEMENTATION PLAN
The Texas Commission on Environmental Quality will conduct a public hearing to receive testimony concerning revisions to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, under the requirements of Texas Health and Safety Code, 8382.017; Texas Government Code, Chapter 2001, SubchapterB; and40Code ofFederalRegulations 551.102, ofthe United States Environmental Protection Agency (EPA) regulations concerning state implementation plans (SIPS). The proposed rulemaking would implement House Bill 3469 and House Bill 248 1, 79th Legislature, 2005. The proposed rulemaking would establish rules for the Texas .CleanSchool Bus Program as directed by House Bill 3469. The proposed rulemaking would also clarify cost effectiveness requirements for the Texas Emissions Reduction Plan, establish a rebate grant program as part of the Texas EmissionsReduction Plan, and provide for clarificationof scrappage requirements for repower and replacement projects under the Texas Emissions Reduction Plan grant program asprovided in House Bill 248 1.
A public hearing on this proposal will be held in Austin on May 9, 2006, at 2:00 p.m. at the Texas Commission on Environmental Quality in Building F, Room 2210, located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral or written coinments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearing.
Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Holly Vierk, Office of Legal Services, at (512) 239-0177. Requests should be inade as far in advance as possible. Comments may be submitted to Holly Vierk, MC 205, Texas Register Team, Officeof Legal Services, Texas Coininission on Environinental Quality, P. 0.

### Box 13087, Austin, Texas 78711-3087or faxed to (512) 239-4808. All comments should reference Rule Project Nuinber 2006-016-114-EN. Comments inust be received by 5.00p.m., May 16, 2006. Copies of the proposed rules can be obtained from the coininission's Web site at htp://www. tceg.state.

### tx. us/lzav/rules/propose adopt.html. 

### For further information, please contact Erik Gribbin, Air Quality Planning and ~in~lement~ion Division, at (512) 239-2590.
Issued 

### inAustin, Texas, on Marclz 29, 2006.

P.0. Box 13087 Austin, Texas 78711-3087 512/23(-I-1.000 Internet acldress: www.tceq.state.tx.~~s

lli.lll. I,', I,, I ..i!ll,l,'r, illill. ,ii. !,.,.I<! ,ill

# WRITTEN 

# AND 

# ORAL TESTIMONYReference Number 

### W-I INDEX OFWRITENTESTIMONY

Submitted by Ramon Alvarez, Ph.D.and Betin Santos, Enironmental Defense BruceA. May, on behalfof himself Brandt Mannchen, Sierra Club, Houston Regional Group Cyrus Reed,Texas Centerfor Policy Studies Thomas H. Diggs, United States Enironmental Protection Agency

## MAY-1 6-2006 

## TUE 02: 

### 12 

## PM FAX NO,



### I'<E:1:nle l'rojcct 

### Number 

### 2006-01G-114-EN

,

# .., '* 

### I',r~virc~~~t.r~~r~tal 1)cfense apprcciatcs the oppor~~~nity to 

### provide commcnts 

### on 1CkQs 

### propc~s~:~I 

### ndcs to irn~.~lcrr,ont 

### I-3B3169, 79" 

### l'cxas Lcgislaturc. Whilc wc a.re 

### disnprointcd that 

### thc Lcgislahnre 

### did not appropriatc 

### funds 

### foxthis i1nport:lnt

### program, wc arc 

### optimistic that ii~~lding 

### will be 

### niadc 

### available during 

### the next s~ssiori.

### Coriscrlua~ltly, it is 

### crucial to 

### 21avothc

### b:~sic rulcs 

### in 1)lac.c so dlat thc

### 'IiCEC~c:tn 

### proceed cxpcditiously to 

### 11l~1ic p;r'i~lis whcrx rhc 

### filnding 

### bcc.orr~cs avfiilab2c.
.In 

### gcncral, wrr:support

### thc 

### 'TCEqs proposed n~lcs to 

### establish thc Tcxas 

### Clean School 

### 1311s13rogr.01n. 

### T-Jowzvcr, 

### the 

### Co~nrnissiotl slrould rcfir~c diel>ro]>oscd rvlcs 

### to bctlcr rcllcct 

### 1.11~Icgislativcly-statcd 

### goal of

### impl-ovingthc "rnicro-cnvironmti~t" in and around 

### school luscs. 

### 1



### I 113409 

### clearly st~tes tl~st thc

### purpose 

### ofthe clean 

### school bus 

### program is 

### "to reducc 

### the cxposllrc 

### of 

### school childrcn to 

### dicsel wliaust 

### ill and aj;oy~d 

### dicscl-fueled sclloolhuscs" (Scctiur~ 33i).002,

### emphasis adtlcct). 

### Nunlcrol~s 

### studics 

### sllow that 

### in-cabill 

### lcvcls of

### I'M 2.5 ar~tl olllcr 

### dic;scl ~.clateil ~>ollu iants 

### cnrl 

### L)c cl~~va~ccl re1;liivcro 

### n.irll:>icnt: 

### lcvcls (scc 

### al

### r:~chcd sl.lmn-lnly of srudics).

Wc !;lipport prol~nsed Scctions 

### 114.640and 114.G42. 

### Wc ~rould notc that ccrtnin 

### school cli:;tric'~s 

### in tli(: s~;\tc c.orltr;lc:t 

### out

### sornc or 

### i111ofthcir transportatio~~ scrviccs, and 

### thc ;);;cl.~h:y 

### sl.tot~l~.l 11111s

### considcr 

### w;rys to 

### cnsurcbuscs 

### olser-arcd 

### by third patties 

### can 

### parricipfl~c in 

### t:11 is 1i~:o?,l-:t ITL.

## MAY-1 6-2006 TUE 

## 02: 

### 13 

### PM 

## FAX NO,

I'ro~~x<::~l 

### scc~ion 114.644(a)(2) 

### outlines 

### ~1,igiLility csfdicsel partic~datc 

### filters 

### (DPl's) i1t-111 

### Ii~r~itr; rl~c 

### usc 

### of

### filttrs to 

### sdlc:,ol buses madebctwccn 

### 1091 2ind 1.998. 

### 'l'he enginc s~:tntliirrI!i 

### Tor:

### I'M emissions arc 

### thc siline 

### for 

### rnodcl ycnrs 

### 1994-2006 and 

### DI'Fs havc k~ccrl vi:ri 

### ficd for tbcsc 

### modcl ycars. Sce 

### t': 

### t3,A a.nd

### CJARl3 wcbsitcs 

### ror currcnr 

### list (\V.BX!.C~L!.+J)V/~ 

### t+q[r~~~~fit[r~~r~.y~-r~.fi~:ciljst.l~ t~n 

### ) 

### and ~!~~~:~t~-~~.c:n.{;~~/(~~.c~~_r!vcr(~ 

### ~v/~~!~c.~~~~;r!~crifiedt:ec11.~itri~ 

## . AS t

### hc progriim ~volvcs into 1,I;li: fiit.i~rc, 

### thc cornrnissiun shoilld look to 

### cxpand thc ra~~gc 

### of

### madcl

### yea.rscovered 

### by ~JIC p,l:cJl:r;i t 71 to I

### n:l~c.l,r thosc for

### wl.~ich thcrc &rc 

### vcri'ficd tcrJit~ologics. 

### L"rnpo:;cd 

### scctior) 

### I 1.4.644 (h) is 

### inconsistent with thc 

### statutory 

### language 

### aild should bc rcrnovcrl, Ir.1particular, thc 

### ComrlJssio~l shor~ld 11a 

### limit funding to

### ccrtairl 

### arc:is of 

### ~hc S~R~C. 

### A.s ~iiltcii ;ltovc, 

### tllc 

### ~)ropiln,'~ purpose is to 

### rcducc 

### rxposurcs 

### i~find arnrlnd school 

### buscs ;~rltl tllt~~c 

### is 110 rc8son ro treat a 

### bus 

### in

### Midland 

### any differcudytlnn a 

### bus 

### in 

### 1 Ious~on,

r \ 

### 1I.r~ Cornmission 

### should 

### d;~rifyin. yrol~oscd section 

### 114.644(c)what il:

### ~ncar~s 

### by r* 

### "ndcli 

### ~ior~:.~l ~~t.~Ilutanls LO I;lt: 

### ntldscsscrl" clurinm nfinding

### pcdod. 

### 1 llis 

### language appcnrs P SI~~~:~J~/I('JIIS 

### in lip,llt 

### of the 

### spccific

### tcchnolog~cs cnurncmted in Section 

### 114.644 (a). Wc 11 rgc 

### ihc Col~lrnission to

### lcccp 111c

### prngram 

### simplc for 

### school clisr~.icrs 

### by ~sprcssly 

### ~.\rgsCns 

### rlrc ventsto nslrldl 

### nurnbm of

### proven tccl~nclogics like thosc 

### in 

### Scction 

### I 14.811(~), whicll 

### hwc al~arly 

### llccu vcrificd

### by 

### EPA. Admini~t~~tivc case

### will bc important to nttrilct pi11tjtril~;~ [ion,from

### tlzc sn~dcr 

### school 

### districts 

### in the stxte. 

### In clo:,irq<, IVC 1001~ 

### fo~ward cn 

### woi-kingwith thc 

### TCEQslaffitljmplcnlenbng tl~c Tcxirs CllL:;ir~ 

### SctlooI 11~:; l.'r.i~g~am. 

### We would cspccially 

### urge 111c Commission to 

### build inlo ils 

### I,r:gisI:i~ivc Appropriation 

### Rcclacst arl~~llc 

### ruudingforthis program. 

### l'lcas~: contncr 

### Ilctin Santus at

### 713/94.2-5821 

### ifyou 11nve

### ally questions.



## -. 'i.,

### ,Y 

# - (.

## . 

# /3 yL 

# >~~~~TJ~~~ .S,,
- .... f...



### l'\t;rii~ Sa.t~(.os 

### lMnl~:~gcr, I-1,ouston

### C11:;ln

### Air fht'l',jfc 

### Campaign

## MAY-1 6-2006 

## TUE 02: 

## 13 

## PM FAX NO,

€?NVIRONMeNf'AL DeFeNSe finding tlro ways lhht work '!Zit)] 

### ISSTONS 

### ~~xOM 

## SC:F~OO~, 

## R~JSES INcPE.A.SE 

## POLI~UTZON 

## LEVELS INSI'DIZ ?lIEBUS 

### T'lre 'Ilu! 

### tc~l'Sri~ntiGc 

### Siisdics 

### Sug~est that 

### SL-If-:-ll'ollution is 

### Real 

### I.'\~.;cc:r.lt :;tu&e:; 

### shwthat. 

### air pollrl~nt 

### lcvcls

### inside school brrscs can bc 

### greater tljan 

### the ambio~t levels ciulsiciz

### .llrc: l)\lv. 

### 'l'hc cl~vxtcd levels arc 

### ;\t~rik~utcJ to crnissions 

### frotr.1

### rhc bus itsclftl~at inmldc

### into thc 

### bus 

### c:rbin,a 

### process 

### soll~ctirncs cnllcd usclf-pollui~on.* Factors 

### that affect the 

### mount

### ofthese 

### cmissiotls 

### entwitrg rllc tus 

### kiclurlc

### wind spccd dnd dircction, wlletlxr 

### windows are opened or 

### closed, 

### agc and 

### cor~djtion of tlic 

### bus. 

### A smdzr

### numhcr ofstr~dics question 

### wl~edler school bus 

### self-pollutjon ;rciually occurs to 

### atly significi~nt cxtcnt, 

### typically 

### a~~tihi~tirlg pollution 

### inside 

### a schoolbus to 

### other 

### vcl~iclcs onthe roac.1. 

### Tllecxistii.rg

### cvidrncc 

### is surnmasijr~d in the 

### attached rcview. 

### On l:,,llnrrcc, 

### rlit:.rc 

### is strong

### evirlctlcc

### th;st 

### schoolbus self-pollution is 

### a rcal phcnomenol~. 

### IGvc inclcpc.ndcnt t

### cscarcl~ t~t:lrns 

### using different.

### n~ct.l.iods havc 

### documented 

### tljc 

### drcctIvr nlaily 

### buscs 

### in Ilrir.rtr.troor; 

### locaticns. 

### I3y comp~-ir;on, 

### thc studics 

### with negaiive resl~lts 

### cxanlined 

### fewer comyoncnts of

### tile er1;;inc's 

### cmis~;ions at13

### cunscquently failed to 

### fully characterize 

### theproblcrn.

# ', 

### I l~isc ;ITC~IVO PourceEi of 

### crnissiorks that crrntrituteto 

### the self-pollution effect: 

### the cnbrjnc c;r~nkcase and
r 1 

### 1 

### til 1.11~ cr:i~zkcascon I-IIOS~. 

### djcscl 

### cngncs isvented 

### to 

### the 

### air, which results in 

### emissions of volntilisscd 

### crlginc 

### oil,as wtJl3~ 

### unburncd 

### fuel and cxhaust gases 

### that lealr

### through or 

### "blow-by" 

### the yis~on

P, 

### rings. 

### I Ilc rclx~ivc 

### strengths ofthc' crankcase 

### and 

### tllc 

### tailpip nrc not

### well estd~lishccl; howcver, I>onnld::osi cstir~t;trcs 

### hat the 

### crankcase accout~ts 

### for 10-25%

### of 

### an engine's totalpartim1;lte 

### crrzissions.' 

### '.l'h~:C1c:ln 

### Air Task l:orcc's rrltasatemcnts 

### ofin-cabin 

### pollution 

### lcvcls 

### show that,

### obscm:d ultrafine 

### p:~t iic:lc:: 

### (<IJIFII), black ra~~l>on 

### and 

### PAH 

### originarc from dic

### tailpipe while 

### thc majority

### ofthe 

### ~bser~~d 

### I!iL3'%.T ~rznss corncs 

### fion.~ 

### the crnnkcasc.



### C:ornrric.rcially avnilalilc tccll~iolo~rzs can 

### cffccrively

### rcnlovc 

### ncarly all of 

### the cnjissions 

### that 

### contribute to c:l~~:~t~:i~I 17r,ll\1t 

### ion 

### lcvcls 

### iasit-lescl\onll~uscs. Crankcase 

### fil~ration 

### systems,whid~ 

### itap oil mists 

### and ri.:~c,)~~to crnnl~:c:ir;e 

### ernissinr~s 

### back to the 

### engine 

### air intake, can reduce pa.rticulatccmissio~ls by 

### rnorc than 

### 9046. I2.icst.:l1~:i rt-iculatc

### filters 

### (1,IbF) l~nvc bccn verified 

### by 

### )(:PAto reduce 

### tailpipcpadculatc cmissioi~s 

### by 9.594 or.rncm

### tvhilc dicscl 

### oxids.tjon 

### catalysts 

### (DOC) cm,

### aclrjevc 

### reductions in 

### tllc 

### 25% rnrelgc. 'l'l~vst: tlcvir.:r:s

### c:~n also dr~rn:\cic;~l.iy 

### improve air 

### qualityinside 

### school buscs 

### a.ndoutsidc 

### of 

### schools. 

### The C.l.cnnA.il.'.l';~slc :I:urc:t: 

### fo~ind tlmt P 

### cra~lkcasc 

### liltcr and 

### a 

### 13P'I{ usecl 

### irl tandcm, can rcducc 

### a11 

### 111ckCy dic.s:.l 

### plli.[tai~t I~::vi:,ls'

### i KIS~L~C 

### ~~11001 buses down ro arlzbicnt levels.

## FAX NO,

a 

### I.lill, 

### L1.13., %Ii~ulmc.rman, 

### N.J., and 

### Cooch,

### J., 

### "AMulti-City Invcstigntio~~ of rhc 

### Fflcc~ivcncss 

### oF I<utrtsfit

### I:l:snissioas

### Corlirols 

### in 

### licducjng 1.3xl>osurcs to 

### I'arficulatc 

### Matter in 

### School Bu.ses," 2005; 

### :iv,~ i 

### lal>lc:ity~y~~.~;irf,~~s/~~~jJ~]j.~fi t

### ioi3s/vicw/82. 

### J~~vcsti:;ates tllc cn~lscs of

### scl~ool 

### hrrs sclf-pollurion 

### and doculncnts tllc reductions in

### palticulate mattcr ~~ollution i~isidc! sckiool bus 

### cabins wtrofit

### with various 

### emission control 

### dcviccs. Idcntifics thc 

### txilpipc as t1~ source 

### oft11 1.filfi11~ 

### l>i\r.[jclc~, 

### bl~cl; 

### carbon, and 

### particle-bound 

### I'AH in L~C 

### bus cabin, and 

### crarrkc;lsc snaissions 38 

### the 

### ddos11i~13rit source 

### of

### in-cal3in levcls of

### PM2.5, A diesel 

### particulate filtcr effcctivcly 1'crIlavizs ilr:: 

### ullrt~firlc 

### particles,black c.arlon ant1

### PAH,wllilc ;L 

### doscd-~cranlccase 

### filtra.tior~ 

### device effi.:ctivr:ly 

### rc;.r.onvec-l 

### 'h42.5, WJ- en cornbiiled, the iw contl.01

### devices

### newly 

### elillinate

### all measured 

### par-ciclc

### specie:;.

(E h/(a.r:ij.~ll, J.1:). 

### and 

### I~C~~CIII-Z, 

### l?., uVcl~iclr, 

### Self-Pollution Intakc Fraction: 

### Childrcn's Expoourc to 

### Sclzool 13us IS~nissinns,'' 

### E~lvironrnontal Scicncc and 

### Tcchnolagy, 

### 2005, p. 

### 2559 17si11grl3t::i 

### fii-orc~ 

### Pitx ctnL, 

### tIGs papcr 

### finds 

### thatthe fi-actionof

### pollution insidc a 

### sd~ool bus attributable to 

### tl~c brls 

### itxclf'is 

### "subatantid." 

### Concludes that 

### seducing c~nissions from schoolbuscs, cvcn

### ifdoi11g SO 

### r\e.w111111.11 1110~~ CX~CI~S~VC pet 

### giarn orritid

### rhnn 

### for eon ivcngcvchide, "it

### would 

### still 

### be less 

### evpensivc

### per EYIAIIIit:frir:t?w',(r~,l~13i.~ll 

### is a

### bct~.cr 

### pro:xy 

### [or hc:llcll 

### crccrs. Calls 

### hr rcseatch to 

### identify the n-rcdlanisn

### of .I 

### scll-rmllution.

uf 

### Ontnrio Pulalic 

### 1lc.althAssociation, 'Scliool 

### nuses, Air 

### Pollution E;c 

### Children's Hcalth: 

### 1111l)rovi 

### nj; Clildrtn's 

### IJcdth and 

### Local fir 

### by Rcclucing School

## Bus Emissions," 

### 2005; au;ii 1

### ~1?1,:: 2.t. 

### J~J.?!W&:~)~~~,_O_~_~~~~[E:CS~LI~ 

### ccs/schooIb11s.pdf.

tioll 

### '11 

### pl'0vi:ks n

### g-f.~wd survey 

### and syrltilcsis a

### fp~.cvious work

### on theissue, Ainol~g 

### other things, c:onriudcs4hat 

### '"'LVhilc clrildren 

### may only 

### spend a 

### fewhours per 

### day on 

### school buses, the

### high levcls of cslil~o::\~rc cricounlcred 

### on-hoard 

### schoolbuscs can 

### add 

### considerablyto th& daily and 

### annual uyosurcs to air 

### r)c~lli~~:ln~s su

### uhas 

### [clicscl 

### pa~~iculatc matter] 

### and 

### PM2.5."

41 

### Ncw 

### BIT ~nswick I,unj; Assorintion, 

### "Ex~,osurc 

### of School Children toDicscl Miaustfrom 

### School 

### I~II!:~.!;, 2005 

### (As rcportcd in 

### O!?l.U, 2005) Avc:r;~r;c c:q>r>srrrc:i to 

### Ph42.5 on 

### school

### buscs wcrc 5-6 

### tiri~cs 

### grcatcr than ambicnt

### Icvcls, avcrnb+g 

### 32.1 ]I~/YII~. 

### 'i~x~m~,tt~cs to 

### l'M;!,.S, 1'Ml.O arltl 

### black carbon wcrc 

### folbund to

### bc a.pproxirnnt,ely thrcc timcs 

### I-ligl blsr 

### c11~l-i 

### ng lri~!: ~irlcs 

### thsn du.ri

### ng rlrc average

### walking commute.

a 

### P:'~PI':, 

### D.R..,VViucr, 

### A.M., rtof.,

### "Chal-actciixingthe: 

### Rarig-c

### of C1JJ.dren'sPollutatlr Exposurc .I.)uri~,;; 

### Scl~ool :[$usC:ort~~nt~tcs," 

### ]!'in31 I{epost to 

### the 

### California Air Resources 

### noard, 2003; a~ 

### il

### abfc

### fro j.11 

## ~~~~~~~,c;l.r~;~,~Lrc~~~c~2/.s.choo1k~~$:!s.~:ho~c!~~u~~h~~~,~ On a.vc:ra.gc:: 0.0396 

### (range 0.02 

## -0,29%1) 

### ofR 

### bus's 

### exhaust can penetrate thc cabin, as 

### detcrnlincd tllrough t.hc 

### 11.s~ uf 311 

### Sl:;'6 LrAc.cr 

### rnctcred into 

### thccrlgi110

### exhaust. 

### ?Pic 

### rc1ati.v~ arnourlr 

### oPexh;~usc exh;luscnsit:lc 

### tbc bus

### MAY-16-2006 

## TUE 02:14 

## PM 

## FAX NO,

h.igh(:r with 

### thc

### windows doscd. 

### The tracu 

### conccn~rations messwed inside thc cabin correlatctl rcarooilldy wid

### wit11black carl>on. Convrntionalbuses 

### cwMbitcd 

### higher conccntrations ofblaclc 

### cn~.lmn :tnd 

### PAT]: tllatl 

### onc o~~tfit~cd 

### with a 

### pa~~iculatc trap.

& 

### C:~lif~rnia 

### Air Reso~~~~cts 

### Board, ''Charactmi~i~lg d~e 

### Rarlgc of 

### Childrerl's 

### Pollutant l?.q>osurc 

### T)i~t-ing Schcwl 

### BLIS Commutes," 

### ARB StzftInterpret.ivc 

### Surnrnary of 

### StudyJ<esults,2003; awilatJc 2

### r y~yw,~rh.~a.ap'~v~rescar_~h/~c~~o_o~b~s~~~~~~ 

### tnq.pd Comp2rcs thc 

### P-vcragc 1b:iclc carban 

### conmntrations nleasured 

### by fir^ d

### al. 

### in school 

### buses 

### (92 ~rg/m3) to cutrr.mrstions xncasui-cd

### in a d

### iCfc~cnt sturly

### in cars in Lor 

### Angeles 

### (5.9 pgh3). 

### From t

### hcse VR~LI~~, 

### (::A1113 s~niCrsti~nstcs a 

### 3430 

### .incrcnsci11 

### the daily 

### expnsurc to

### black cubon. 

### l'rcdicts iilcreascs it1 tl~crisli.

### of c;lnc.ar, astllm~ 

### hospi~lization, and 

### lower.rcsyiwtory

### symptoms.

13 

### );iiz, 

### I)., "Evaluation 

### of 

### I.:rrlissionControl

### Equipmcm 

### ina School

### Bus 

### Application, Final lieport," 

### I!rcparcd fix 

### T3onaldson 

### Company, 2003
Mr:?s?-lrcd conrlcnsatiorr 

### p;r~*tidc counts 

### and lcvcls

### of

### PAH, VOC and 

### COjzlsidc the 

### cabin 

### of a 

### schoolbus trvi.cl,it~:,. 

### orl 

### a ~acal. 

### route sncl 

### under stationary 

### idling condjlions,

### in both cases

### with 

### and without 

### a second Lms 

### in fro21 t, 

### 'l'h~' 

## szz~ionary 

### idling tests 

### showed that

### interior conccntrations of

### pnr~iclcs 

### in tllc trailing

### bus wert: 

### rcc111crdvfllcn 

### the

### lcat3i11g bus used control 

### dcviccs, aftcr 

### adjusting

### forhackgroulld 

### levels. Spccific;~lly, 1.h~ 

### reduction in

### puticle 

### counts clue to a 

### pdculatc trap wcrc 96%

### and

### roughly 60% 

### clue to 

### a 

### tliccic.1oxidstion 

### catalysr

# - cr~rdwasc 

### filtcr corn1:~ination.The use 

### of a 

### mnkcasc filter 

### in conjunctionwith thc 

### I~;~~~~id~ trap furthcr ~C~UCC~ 

### pfi~tidc counts, 

### Thetests 

### on moving 

### buses appcarcd inconcliisivc h~c~~tisi: 

### t:~c.I~~ro~~nd 1cds WCIC1101' 

### rr1~8surcd. 

### 'rhc effect:

### of

### crankrdsc filters 

### inay have

### been ur~clcri~xtir 

### 11,11cd duc to thc 

### lack ol 

### PM2.5 rncasuremen ts. 

### Wargo,J,, "C11il.drcn's Exposurc ro

### DicsclExl~a.ust 

### on 

### SchoolBuses," 1Snvironmcntand 

### 1 J'uinan 

### IIr.;,\ttli, 

### Inc., 

### 2002; xuailablc

### atwv~r.ch~~i,~.o~~~~~~ports/diesd. 

### 13ascrl on rcsrl1i.s

### ofpcrson:~I 

### PM monitors won1 by 

### studcnts 

### during a 

### scl~oal day, csrimatcs 

### that lcvcls 

### of 1m.rtj(:111~1i! r~tilt~cr 

### in and aratind 

### school buses can 

### bc up to 

### 5-10times 

### Jlighcrthan 

### backgrol~nd 

### lcvcls. Also rrladr. 

### 1'1M2.5 

### andbleck 

### cuboll rncasurcments

### inside crnpiy school

### buses during a 

### simulated 

### 1x1s roul s: a

### rttl whiI.ctidlitl~;. Tfle

### higllcst

### PM2.S Ic~rels 

### dc~cc.tcd 

### within buscs excccdc

### J lOOp.g/m3 

### d

### ring 7 

### of 27

### bl:,$¶-!Ins. 

### S~lon>nn, 

### G.M. c%.nj., 

### "NO Xlrcathingin 

### the

### Aisles: Dicscl Exhaust 

### Xtlsidc School

### Buses," 

### Natural l:cso\~ic r:~ 

### 1)~f.n~~: Council, 2001; 

### nvslilal-~le at; wjwy!

### nrijccq~,q!ai t-/I GIr~~~?c?,<a$~~dschool lx~s(sb~~sin~.~s~ -..- 

### - 

### M'c,:~sr~rcd 

### I'hf2.S 

### and hlarlc.carbon inside 

### 4 

### school buses 

### in 

### I,os Angclcs. 

### Reports that 

### dics~l d~al~st ~nr~icrll:~ti: 

### Icv,lr; 

### insidr-

### rhc b~iscs (clcrivcd 

### fro111

### rllc

### black carbon 

### n~cn.s\lrcmc~lts) ranged 

### fror11 8-13 pp;/1t\.'3,

### ~vllich was 

### 10 #.+.00?/o 

### I ~ighcr 

### ihmthc Ic~~cls rncasurcd 

### inside a passcngcr car 

### driving 

### dircctly ahcnd of tl.11: 

### 1,trs.

### MAY-16-2006 

## TUE 02: 

## 14 

## PM FAX NO,

(J. 

### Ira;cm, 

## K.(.:.. (:I 

## oZ., "Estirr~a(ion ofl'artia.~latc 

### Maticr Canccritrarionsin a Sd~ool. 

### 1311sISsirlg a 

### Thcl-D;~:;ccl 'l'raccr 

# -A S

### crisitivt: 

### and 

### Specific

### Mcttlod 

### for 

### Q~antiljir~g Vehiclc Coritril~ui 

### ions," 'Jqr.:nt.r:;l>nl-t.ation 

### llesenrd-\ 

### Rccord, 

### No. 1880, 

### pp. 21-28,2004(sr Ionger

### version is

### also 

### available,: CaliforrJa 

### EnSICI.IT,"Esdmatcd 

### Concentrations 

### of Dicscl 

### Particulates Insidc a School

### Bus B:ist.d OII 

### Traccr

### Arldccl to

### its

### F~id," prcparc.d 

### forIntcnlatior~al 

### Tmck 

### arid Enginc Corfioratio~~, 2003; av;i..i 

### 1a

### blc at 

### :y~~~rg~~QgscL~ch~~ojg?~.co 

### m/~lef~~Jt~~~p~,ar,c.h;~y~~fact). 

### Estirn:ttcil that 1c-; llnn 

### 1% of thc 

### PM2.5 pollution inside a school

### bur 

### (022 p,g/:/m3 outof nn

### avclagl: 

### d
+. 

## /Ljq:5/11:'3) 

### carnc 

### frorn ~LY ow11editi~ist: 

### by mczsuring 

### the amount 

### of an iridium traccr 

### addcdto 

### the bus's 

### dicrel file1 hat 

### was 

### collrcted on

### n filtcr 

### insidelethe ci1,i.n. 

### Coupled wi~h rncasurcd 

### bn£ c.onot?ni.~:atic~ns 

### of

### PM2.4 in a 

### lead vehicle 

### thaturwe

### 30-40% greatcr than those 

### measured in 

### tllc study bus, 

### ~l~c; :lt>ihor:s rr)~rr.:luclc tll:~t 

### ls~e 

### dicszl y:~r~icularc 

### Jcvc;ls inside the 

### bus :crc 

### not 

### fro111 t11c 

### bus's cnginc 

### but from 

### o111er BOIZ~~:CR. 

### Sincc 

### the

### lead velticlcwns

### roughly5 rninutcs 

### ahcad ofuhc 

### bus, it 

### is 

### unclear how

### wc1l il~c :lt~nhicnt air 

### in I flc 

### ir-rlrrtrdiatevicinity 

### ofthe bus IVS 

### characterized. 

### Thereis 

### no 

### discussion 

### ofthe possiible inflt~cn.cc 

### of C~IL~~CXSC 

### emissions, a 

### notable omission since 

### other studies 

### note that 

### the crarlkcascis 

### ri:spo~isillt: 

### :lortllc;: 

### brillc,of

### PM2.5 rnxss detcctcd

### inside bus 

### c;~bins, which was 

### rclatiwly 

### high in this study 

### (7% ly:/11\3on 

### s\l~;r;::;c). 

### Tbc sclcctionof anurl~an 

### bus 

### route 

### with 

### high background 

### I'M2.5 levels may J~:lvc 

### cosifbur~rlrd 

### thc

### itrLI~~GI'ICC 

## OF~clr-~>ol111tiun.

PY 

### 1301.rrk,

## 1.ck

### al., "Con~p;~rison 

### ofN1OSI-I

### 504.0 Mcthod vcrsus Acthalometer to Monitor 

### Diescl Partic;ul~l.c 

### in 

### School Ruscs and at

### Work Sites," 

### AIIU JOUL-nal, 64,

### p, 260, 2003; 

### availn.ble thronj;lz ~~~,~~1i~~~~~2.~~p:/co~~t~~~t/~~~essjoeht. 

### (Peiformedunder contract 

### to Ir'~tc-~-~~l'la 

### iic>n:~l ''I'r~r 

### dc and Enfiine 

### Coiporation.) 

### 201r~:1~\1r;.tl I.,Incl; citrI>ori (1.0-1.2 ~l.g/ln3) 

### with an 

### acthalometer and, sirnultai~cously~ 

### timc-weigbtcd :iv~;ri:/;;~; 

### elernur\~al 

### c;~rliun (< 1.0 \.r.g/m3 

### to 1.9 

### pg/rn3) with thc 

### WIOSII 5040

### Method inside 

### 3 

### school, l:,u:+c.s a1.l a 17 a~sl-olnotivt tcst 

### [:I-ack, 

### Chtcstior~s t

### llc 

### cf~cctivencss of 

### acthalornctcrr: on 

### moving vahiclcs 

### 1:uccntlsctllcy \vt:ri: 

### fo~incl to

### b~scnsitivc to movcrntnt 

### and

### vibration, potentixltycauisir~g 

### negative

### blacic c3rl)on

### rc:.r:nding.;, and suggcsts 

### tI\cix~stru~nent's 

### ~rsclirlncss woztld bc limitcJ 

### in nlovingvchicles (such a 

## problem wa.s 

### not c~bsc.rv(:rl

### l~y the 

### CA'l.'P). 1kcl.usc

### no mcaswcrnents of

### l'M.2.5 Inass

### wrrc msdc, 

### study c1oc.s.nr>t nclc!rer;s tf~c 

### co~ltrihution fro171 111~ 

### crankcase.

a 

### O'PJcill, 

### D,, 'A Rcpl-eacnrativc 

### S:implc of 

### IFnirFt~x Corrrliy

### PubIic SchoolsBuscs 

### Found to 

### bt. Frcc 

### of

### Si&$.licau~: 

### Dic.sc.1Exhaust," 

### Fairfax County

### I'txtslic 

### Sd~ools l.)cparrmcnt of 

### G'cncral Scrvi~cs, 2001,; 

### :?vnih'(.)1~: at~~,~,~~c~~t;,~.(?~/f~s/s~f~~f~-sc~~~i~/p~bLi~ati~ns/husexl~~ust~e~~ort,~~df
A4c~1s11rr:r-I 

### l?M10,r.le~~~cr.~~:ll 

### c:~rLorl 

### (KC) and 

### organic carbon 

### (OC) on 

### 12buses over roughly 

### 90 ininutc 

### routct:;. 

### All 

### of rhc 

### EC mcas~uscmcrrts ai~d 

### 8 of 17, 

### 1'MIO rnc9,surcmctlts

### wcrc bc1ow 

### tllc 

### rclativdyhigh

P ? t3

### utc.c~.ir)n Iirnits 

### of 4-5 j.~z/sn3 

### and 

## 51-65l~,g/~n.'3, 

### respccrivcly. 

### I.hc 

### four positivc 

### PA410 rcadingsranged liolr~ 

### 120-200 11,1;/m3, 

### QC': 

### lcvclsranged from 

### 50,-130

### 1.r.gl1113. The 

### authors rcly onrl~c 

### ladr of detcctablr? 

### '1'CCl 10 COI\C~I.IC~L: 

## ha^ tll~rt' w:~c; no 

### evidence that

### the bus's cxlr~ust 

### contaa~inat.ed 

### zlle cabin, 

### insrc:~d :kr 

### tr;l.j\\~.;rig IIXC C,\>SC~VCL~ 

### OC to gasolinc 

### vehicle rra.flic. "l'llere 

### is no

### discussior~ of tl~e 

### high 

### ]?.MI0a~ld 

### C)C lcvcl:;, ~ld.lir11 

### could

## I>c~ t.11~ 

### resalt ~l?crankciist crnissions.

### May 

### 2,2006 

### Texas Commission on Environmental Quality Dear Sir: Subject: 

### Require Clean Air 

### and Air Conditioning in all School Buses 

# n

Texas 

### School Buses are being 

### used

### year round to ferry students to to special events, sporting events, after school programs, and summer events. 

### Rememberwhen our 

### school 

### classes were 

### not air conditioned and 

### only 

### a 

## fewteachers hadfans 

### in the room which were ineffective. For all the reasons that school rooms were air conditioned 

### to improve learning, 

### and for 

### the health 

### of the students, teachers, administrators, and employees, please 

### see that all school 

### buses are modified to filter out toxins, pollution, and also condition the air for comfort 

### and health. 'The first step would be to require 

### all 

### new school bus purchases be

### air conditioned and air filtered. The next step would 

### be 

### to establish 

### an ongoing modificationprogram 

### of existing school buses to the 

### new standards as

### time 

### and budget allow.

Bruce 

### A. 

### May 21

### 06 Glenbrook 

### Meadows Dr. Garland, 

### Texas 75040-41 40 

### Phone: 972-495-7835 Fax: 972496-3355 

### E-Mail: bruce.mav@verizon.net Enclosureslvlay 02 06; 09:l/p BRUCE MAY



### OFFICE OF THE 

### GOVERNOR

RICK PERRY GOVERNOR 

### April 27,2006



### Mr. Bruce 

### A. May 2 106

### Glenbrook Meadows Drive Garland, 

### Texas 75040-4140 

### Dear 

### Mr. May: 

### Thank you 

### for taking the time to contactthe Office 

### of the Governor regarding your concerns. 

### The

### U.S. Enviro~mental ProtectionAgency, a 

### federal entity, 

### has developed clean air standards with which 

### states must 

### comply. .Amongother 

### effortsto address this issue, Governor 

### Perry has worked with 

### school disbicts 

### in Dallas/Fort Worth and Houston to reduce pollution caused by school buses. Further information is enclosed. Ultimately, decisionsregarding school buses fall within the 

### purview of

### local school district off~cials. School districts that 

### wish to retrofit 

### buses toreduce diesel emissions or purchase new buses may contact the 

### Texas Commission on Environmental Quality to inquire about available grants for 

### those purposes. School districts also 

### have discretion to purchase 

### air conditioned buses. Should 

### you 

### wish topursue this 

### issue 

### at the local level, you may 

### consider contacting

### your local school board 

### members; contact information is enclosed. As 

### you are aware, any 

### change in state law would require legislative action. Should you wish 

### to 

### offer recommendations to 

### Legislators,

### giventheir authority to introduce and vote 

### on legislation; their contact information is enclosed. In

### the meantime, 

### I have 

### shared your 

### comments with our budget and policy staff.

, 

### Please let 

### us know if we may 

### assist you 

### in the

### future.

~ede 

### Keith 

### Administration and 

### Constituent Services Offlice 

### of the 

### Governor



### Enclosureslvlay U'L ~b UY:~ /p BKULt IVlHY Y/Z-4Y6-YYSS p.3 

### Texas Governor 

### Rick Perry 

## - Press 

### Release 

# - October 

### 7,2002 Page 1o:


### Oct. 07, 2002 

# Gov. 

# Perry

# Applauds 

# New 

# Adopt-A-School Bus Program

DaZlas/Fort 

### Worth

### Program 

### toHelp Schools 

### BuyNew Buses, 

### Retrofit OlderBuses to 

### CleanAir 

### DALLAS 

## - Gov. 

### Rick Perry oined Environmental Protection Agency Administrator Christie Whitman 

# B today 

### at the kickoff 

### of an A 

### opt-A-School Bus program that aims tohelp Texas schoolchildrenbreathe a lideeasier and provide a national model for innovative clean air pro, =rams. The program, which uses corporate 

### s onsors to help school districts purchase clean buses or retrofit 

# E older buses, 

### is a 

### cooperative partners ip 

### between the American Lung 

### Associatjon, the Environmental '--'.'-'-Prot'ection Agency, state agencies, local elected officials and 

### corporate sponsors. The Dallas/Fort Worth program has set 

### of goal 

### of replacing 500 

### pre-lgg3 model diesel school buses 

### in the area over the 

### next threeyears. "TheAdo t-A-School Bus program is more evidencethatTexas is committedto improving air quality," Perry said: "The 

### EPA 

### and Administrator Whitman are to

### be commended for bringing together public andprivate 

### partners 

### inthis 

### unique effort. " 

### Whitman saidtheTexasprogram will se& as a 

### model that canbe 

### duplicated in othercommunities. 

### "Working together, 

### usin all the tools available

### tous, can really 

### make a difference for the environment and? 

### more important, for our children," Whitman said. "Cleaner buses 

### mean fewer respiratory ailments, fewer school days lost to illness and a brighter, healthier future. 

### I want to ap laud 

### all those ~.ho are supporting this important effort, including Governor Perry, state and 

### local o cials and the Dallas business 

### community. 

# Ri

More 

### than one-third of the school buses 

### in Texas predate current air ollution standards. Buses built before 1993 

### are allowed to emit 

### up to six times more toxic soot 

### an

# 8 up to 

### three 

### times more smo 

### .formingnitrogen oxides than newer models. These older schoolbuses 

### expose children to 

### greaterleve of 

### air pollution. 

# %lvlay W Ub UY:l6p BKUCt lVlAY 

### Texas 

### Governor Rick Perry - 

### Press Release 

# - October 7,2002 

### Page 1 

### of



# Gov. 

# Perry 

# Announces Houston ISDto 

# Convert Buses 

# to Green Diesel Move Builds 

### on State 

### Actions to

### Help 

### Clean Air 

### in Southeast Texas, Goveranor Says 

### HOUSTON 

# - Gov. Rick Perry announced today that 

### the Houston Independent School District has committed to convertin- more than 600 

### school buses to cleaner-burning green diesel 

### fuel, a moveethat mill reduce nitrogen 

### oxiae emissions

### by 46 tons a year. "In 

### Texas, 

### our commitment to clean air is 

### unwavering," Perry said. "This is

### just the 

### latest bit 

### of good

. .. . 

### news, and it.buildson a 

### number ofvisionary 

### efforts and 

### newlaws that are 

### working to

### clean our air. ' In 

### June, 

### Perry 

### directed 

### theTexas 

### Department of Transportation tobegin using cleaner diesel fuel in 75 

### percent of its Houston district fleet 

### and establish 

### rules requiring its contractors worlcing 

### in Southeast 

### Texas to use cleaner-burning emulsified diesel 

### fuel in off-road equi ment. Those actions are expected to remove 5.8 tons 

### of nitrogen oxide, 

### a major componeEt of 

### air pol ution, 

### from the air each day. 

### That would amountto 

### a reduction in emissions ofatleast 19 

### percent. 

# P
"By 

### taking 

### new measures to 

### use cleaner, greener forms of fuel, we have 

### every expectation that we will be 

### ableto

### raise 

### thespeedlimit in Houston again in the 

### very near future," Perry sald. 

### To reinforce 

### his point, the governor resented Entironmental Protection Agency (EPA) 

### Administrator number 65. 

# 2 ChristieWhiiman, who also attende today's announcement, 

### with a Houston 

### Texansjersey bearingthe


### In late September, 

### the Texas Commission on 

### Environmental Quality 

### asked

### the EPAto consider 

### raising Houston-area 

### s eedlimitsto 

### a maximum 

### of 65 miles per hour. 

## The EPA 

### stillmust approve the

### change. The 

### area's spee 

# 5 limits were lowered earlier thisyear as part 

### of a plan to 

### comply 

### with federal clean air

,

### standards by 2

### 007.. 

### Howeyer,later EPA 

### studies concluded that

### lower speed limits would not achieve a significant reduction inpollutants. Houston ISD, 

### the state's largest school district 

### and thefirst to commit to using green diesel, will apply for a variety of grantstopay 

### forthe

### bus conversions.

# SIERRA CLUB

FOUNDED 1892 

### April 6, 2006 Ms. Holly Vierk Office of Legal Services MC 205 Texas Commission on Environmental Quality 

### P.O. Box 13087 Austin, Texas 7871 1-3087 

## Houston Regional Group P. 0.

### Box 3021 Houston,Texas 77253-3021 713-895-9309 http://texas.sierraclub.org/houston/ 

### RECEIVED

Dear Ms. Vierk, Enclosed are the comments of the Houston Regional Group of the Sierra Club (HSC) regarding the proposed new or amended 114.620, 114.622, 144.624, 144.640, 114.642, 114.646, and 114.648. 1) Under 114.622(c) and 114.644(e), the HSC supports permanently removing from the State of Texas "the old equipment or engine" via recycling, scrapping, or other permanent methods of removal or disabling so emissions are no longer generated. 2) Under 114.644(a)(I) & (2), the HSC supports not limiting the use of diesel oxidation catalysts and particulate filters to certain school bus years. The HSC wants the installation of air pollution control devices to be as widespread as possible as quickly as possibleto reduce the health risk to students. 

### 3) Under 114.644(d),the HSC supports paying for air pollution control devices on school buses that have 3 years of useful life left and not five years of useful life. The HSC wants the installation of air pollution control devices to be as widespread as possible as quickly as possible to reduce the health risk to students. The HSC supports the promulgation and approval of this series of rules. It is immensely important to reduce school bus diesel emissions to protect children and others from 'the health and welfare effects of toxic air emissions and precursors of ozone air pollution like nitrogen oxides and volatile organic compounds.

"When we tlyto

### pick out anything 

### by itself,we find it hitched to everydung else in the universe."Joh 

### MIfir

Printed on 100%Kenaf tree free paper

### The HSC appreciatesthis opportunityto comment. Thank you. Sincerely, Brandt Mannchen Chair, Air Quality Committee Houston Regional Group of the Sierra Club hone Star Chapter 5431 

### Carew Houston, Texas 77096 

### 713-664-5962 brandtshnfbt@iuno.com

## TEXAS 

## CENTER 1:011 .llO1.lCI'Ii 1' 111)1 11 5



### May 16,2006


### Holly 

### Vierk MC205 Office 

### ofLegal 

### Services TewCommission on

### EnvironmentalQuality 

### P.O.Box 13087 

### us tin, 

## TX 78711 

### VIA FAX (512) 239-3187 

### Dear 

### Ms.Vjerk: 

### W; Rule 

### Project Number 2006-01

### 6-1 

### 14-EN

The Texas 

### Center for Policy Studiesappreciates the opportunity 

### to provide 

### comments on 

### TCEQ's proposed 

### rules to 

### implement

## HB 3469, 

### 79' Legslature. 

### While nor actively 

### involved in 

### the legislationitself, we were 

### disappointed 

### that .the Legislaturewas 

### unable 10

### find 

### funds for this important 

### project

# -wluch will help to both reduce 

### emissions

# -particularly particulate matter -and help 

### improve rbe health 

### of our school 

### childxen (including

### my own 

### children).

### We will be 

### working wit11 

### bothTCEQ and the Legislaturethrough the 

### appropriationsprecess to make 

### sure &at 

### there 

### is hding

### made 

### available to support this 

### worthwhileeffort
Wit11

### two exceptions,

### we suppori 

### TCEQ's proposed rules

### to establish the Texas 

### Ciean 

## Bus Program. First, the rules should 

### make it 

### clear that the 

### program 

### is both intended to reduce 

### emissions to 

### the 

### ambient air but also 

### to improve 

### the 

### "micro-environment" of 

### the school bus 

### men

### itself -

### particularly where 

### kids get 

### in md

### off the 

### bus. Whilethe 

### overall 

### reductions in 

### NOx and 

### VOCs 

### by retrofitting, repowering and 

### replacingour older diesel 

### buses is 

### relatively small compared to 

### other

### efforts, we see

### one of the rnain benefits

### as simply protec~ing our 

### most precious 

### resource

## -kids. 

### The rules 

### shodd 

### reflect tltat 

### honorable 

### god nnd 

### TCEQ sl~ould consider

### addinglanguagein thc 

### definition or 

### preamble.

### Secondly, we believe that 

### section 114,644(b) 

### is inconsiaent 

### wirb both the 

### intent and 

### ,even the 

### statutory 

### language oi 

## HB 3469 and 

### should be 

### removed.

## HB 3469 was 

### intended 

### to not only serve the nomtlainment and 

### early compact 

### areas 

### which

## has been smed

### by TERP funding,but also 

### to be 

### availableto other areas 

### where 

### PM 2,5 standards

### and 

### school children's Mth 

### are threatenedby 

### older diesel 

### buses. Indeed, a case 

### can

### be made 

### that 

### rhe near 

### nonattainmentand 

### attoinmen1 areasmay 

### have 

### agreater need for potentialgrant 

### fundingsincethe nonattainment areas

### may be 

### able

### to 

### use other funding sources 

### toreplace 

### older school 

### buses orretrofit older models 

### (such 

### as "normal" 

### TERP funding). 

### During 

### the 2005 

### LegislativeSession,

### I worked as a

### registered lobbyistfor 

### the Lone 

### Star Chaprcr

### of the Sierra 

### Club, and 

### I can

### assure you ht 

### much ofthe 

### bipartisan support 

### enjoyed by the legislation was predicated on 

### the 

### fwt that 

### futurefundscould be 

### used 

### by all 

### school districts 

### around the 

### state 

### and notjust 

### those 

### inHouston and 

### Dallas. While we 

### believe it 

### is appropriare for 

### TCEQro prioritize hdingas 

### it becomes available

### to "get

### the most bang for 

### the buck," we do 

### not believe we should 

### put any limits 

### in rhe rules 

### themselves. 

### The Texas Center for Policy 

### Studieslooks 

### forwardto working with 

### the 

## TCEQ staff

### in implementing rhe 

### Texas Clean School

## BusProgram. We would 

### urge the Cornrnission to 

### build 

### into 

### its Legislative 

### Appropriation Request 

### mple

### fundingfor

### this important

Cy

### rus 

### Reed 

### Texas Center 

### for Policy 

### Studies cr(a?rem.scenter.org 

## - 5

### 12-740-4086

cc, 

### ReprcsenrativeSylvester

### Tumer Representarive Scott 

### Hochberg Representative

### Warren Chisum 

### Senaror 

### Chris Harris 

### SenatorKip AverittUNITED STATES ENVIRONMENTAL PROTEC'TION AGENCY REGION 6 1445 ROSS AVENUE, SUITE 1200 DALLAS, TX 75202-2733


### May 16,2006

Ms. Holly Vierk Office of Legal Services, MC 205 Texas Commissionon Environmental Quality P.O. Box 13087 Austin,TX 7871 1-3087 

### DeaMs. Vierk: Thank you for the opportunity to comment on proposed revisions to the Texas Emission Reduction Plan (TERP) rules. The Texas Legislature enacted House Bill 3469 in the 2005 Legislative Session to establish a clean school bus program for the State. We support the Texas Commission on Environmental Quality's efforts to make school bus retrofits pa. of the TERP funding program. Many studies have confirmed the detrimental effect of diesel exhaust on children'shealth. We support the proposed revisions, but we offer the followingcomments for your consideration. Modificationsmay be required to make the school bus retrofit program viable. Few retrofits are available that provide the substantial NOx reductions for which the TERPprogram was established. Therefore,it is improbable that these retrofits will meet the $13,00O/NOx ton reductions cost effectiveness standard that is proposed in Section 114.622(d). We anticipate that using the referenced additional measures to evaluate the effectiveness of projects in reducing NOx will be necessary to accomplish the program's goals. Accordingly, we recommend that section 144.622(d)be revised to identify what the "additional measures" are in addition to, and that the commission provide guidance describing such additional measures and how they will be considered.
In Section 114.640,Definitions, there should be a comma after the word "bus" to indicate that the final "that" clause does not apply to school buses but instead to the fuel. Additional documentation may be necessary if the clean school bus program is submitted as a State Implementation Plan (SIP)revision. Among other things, for any provisions submitted to EPA as a SIP revision, the state should provide a demonstration of the rules' consistency with section 1lO(1)of the Clean Air Act. Please confirm your understanding of whether this action is consistent with section 1 lO(1). Also, for the clean

RecycledlRecyclable .Printed with Vegetable Oil Based Inks on 100% Recycled Paper (40% Postconsumer)

### school bus program to be approvable into the SIPunder the Economic Incentiveprogram, reductions created by the plan must be surplus, quantifiable, enforceable, and permanent, and shouldbe made consistent with the principles of equity and environmental benefit. See

### EPA 's 

### Improvi~zg Air Quality withEconomic Iizceiztive Programs guidance, chapters 4 and 8 (January 2001). EPA considered this guidance in our approval of the previous TERP regulations in 2005 (70 FR 48647). Werequest you confirm that this revision continues to be consistent with this policy. Region 6 continues to offer Texas our support in implementing the TERP program. Please let us ltnow how we may be of further assistance by contacting me at (214) 665-3102 orMs. Sandra Rennie of my staff at (214) 665-7367. Sincerely yours,

Thomas 

### H. Diggs Chief Air Planning Section

cc: Ms. Candice Garrett Texas Commission on Environmental QualityINDEX OF ORAL TESTIMONY May 9, 2006, 2:00 p.m., Texas Commission on Environmental Quality

No oraltestimony

### was received pertainingto this proposal.

# Texas Commission on Environmental Quality Public Hearing Registration May 9,2006

2:00 p.m. Rule Project No.: 2006-016-1 14-EN Short Title: HB 3469 and HB 2481: Texas Clean School Bus Program. Location: 12100 Park 35 Circle, Building 

### F, Room 2210 Concerning: Revisions to 30 TAC Chapter 

### 114

Presenting Oral Testimony? (Circle One)

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No Name (Please Print) Representing

# EVALUATION 

# OF TESTIMONY

# Texas Commission on Environmental Quality INTEROFFlCEMEMORANDUM



### To: Commissioners 

### Date: September 1, 2006 

### Thru: LaDonna Castaiiuela, Chief Clerk Glenn Shankle, Executive Director 

### From: David C. Schanbacher, P.E., Chief Engineer Chief Engineer's Office



### Docket No.: 2005-2006-RUL 

### Subject: Commission Approval for Rulemaking Adoption Chapter 114, Control of Air Pollution from Motor Vehicles House Bill (HB) 3469 and HB 248 1: Texas Clean School Bus Program Rule Project No. 2006-016-1 14-EN 

### Reasons for the rule package: This rule package is necessary to comply with the provisions of HB 2481 (Representative Bonnen) and HB 3469 (Representative Hochberg) from the 79th Legislature. 

### HE3 3469 requires the agency to establish a grant program to provide funding to school districts, charter schools, and possibly regional planning commissions to use technologies that significantly reduce emissions of particulate matter (PM) from diesel school buses in Texas. The commission is directed to establish, by rule, "criteria for setting priorities for projects eligible to receive grants under this chapter." The grant program will provide grant funding to school districts, charter schools, and regional planning organizations.
HB 2481 contains several provisions allowing the commission greater flexibility in determining costeffectiveness for grant applications that it considers for the Texas Emissions Reduction Plan (TERP) program. It also directs the commission to offer a rebate mechanism for certain project types under the TERP program. 

### Under what authority are 

### we adopting these changes? For the TERP program, the Subchapter 

### K, Division 3 amendmentsand new sections are proposed under Texas Water Code, $5.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; $5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and $5.105, which authorizesthe commissionby rule to establish and approve all general policy of the commission. The amendments and new sections are also proposed under Texas Health and Safety Code, Texas Clean Air Act, $382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; $382.011,which authorizesthe commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; $382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and Chapter 386, which establishes the TERP. Finally, the amendments and new sections are proposed as part of the implementationof HB 2481. For the Texas Clean School Bus Program, the amendments and new sections are proposed under Texas Water Code, $5.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; $5.103, which authorizes the commission to adopt any rules necessary to carry out

### Commissioners Page 2 September 1,2006
Re: Docltet No. 2005-2006-RUL
the powers and duties under the provisions of the Texas Water Code and other laws of this state; and $5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The amendments and new sections are also proposed under Texas Health and Safety Code, Texas Clean Air Act; $382.017, which authorizes the commissionto adopt rules consistent with the policy and purposes of the Texas Clean Air Act; $382.011,which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; 8382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; Chapter 386, which establishes the TERP; and Chapter 390, which establishes the Texas Clean School Bus Program. Finally, the amendments and new sections are proposed as part of the implementation of HB 3469.



### Is this rulemaking required by federal rule or state statute?Which ones? New Subchapter 

### K, Division 4 applies to the Texas Clean School Bus Program, Texas Health and Safety Code, Chapter 390, §386.051(b)and 052(b). 

### Are there any legal deadlines by which these rules must be adopted or effective? Agency policy is to have the rules adopted prior to the next regular legislative session. 

### What issue(s) or problem(s) are we trying to solve? Division 3 changes address the following needs: 1) to clarify replacementlscrappagerequirements for replacement and repower projects under the TERP program; 2) to include an option for the commission to use an equivalent measurement to the current $13,000 per ton cost effectiveness requirement; and 3) to establish a process for awarding rebates under the TERP program. These rule changes will improve the TERP program's efficiency to achieve nitrogen oxides (NOx) reductions in affected counties. NOx reductions will ultimately lower ozone levels. Proposed rules for Division 4 address the establishment of the Texas Clean School Bus Program. The new rules provide definitions necessary for the program, eligibility requirements for applicants, eligibility requirements for projects, the ability of the commission to establish funding priorities for the program, application requirements, and grant reporting requirements. This program will reduce exposure by the public and school children 

### in particular to diesel exhaust from school buses. 

### Why is 

### it important that we do this rule package? 1)to comply with state law; 2) to make the TERP program more efficient; 3) to maximize reductions of NOxemissions achievedby the TERP program; and 4) provide a rule based foundation for the Texas Clean School Bus Program, which creates opportunitiesto reduce the exposure of children to air pollutants. 

### Other important background or historical information. The TERP program was adopted during the 2001 legislative session. This state implementation plan (SIP) control strategy is aimed at reducing NOxemissions from diesel powered on-road and non-road equipment. Although there was not a specific appropriation for the Clean School Bus Program when it was enacted, HB 3469 allows NOx reduction projects to be fundedfor diesel powered school buses. School bus projects

### Commissioners Page 

### 3 September 1,2006
Re: Docket No. 2005-2006-RUL
to reduce NOx emissions have been funded to date and the agency will continue to fund school bus projects in the future. Scope of the rulemaking: The new clean school bus program rule establishes the basic authority and criteria for the commission to issue grants under the program. More specificguidelines regarding the types of projects that will be funded,how projects will be selected, and how the long-term monitoring and reporting requirements are to be 

### met will be established through the program solicitation and contracting documents. The rule will: define the terms to be used in the Texas Clean School Bus Program; explain that the program applies to all school districts and charter schools 

### in Texas with one or more diesel-fueledbus; identify the program requirements such as: the type of eligible projects (example - replacements, repowers, retrofits, qualifying fuel); provisions for the commission to apply restrictions for particular periods; use requirements and restrictions, such as five-year project life and use on a regular, daily route; provisions for the commission to limit the use of funds to incremental costs of new equipment and prohibition on reimbursement for administrative costs; allowances for grants to reduce pollutants other than 

### PM and NOx; provide for the commission to award grants to regional planning commissions, councils of government, etc. to improve the ability of the program to meets its goals; and provide a program expirationdate of August 31, 2013. The rule revisions for the TERP program include: a clarification that, for replacement and repower projects, the baseline vehicle, equipment, or engine must be scrapped or otherwise permanently removed from the State of Texas; an option for the commission to use an equivalent measure to the current $13,000per ton NOx reductions cost effectiveness requirement or an alternative approved by the commission; and a process for awarding rebate grants under the TERP program. The rulemaking is expected to be completed in September 2006, with the applicationforms for the Texas Clean School Bus Program completed thereafter. Changes required by federal rule: None. Changes required by state statute: o 

### HB 2481 does not expressly require the commission to adopt new or revised rules for the TERP program. HB 3469 requires that the "commissionby rule shall establish criteria for setting priorities for projects eligible to receive grants under this chapter." Staff recommendationsthat are not expressly required by federal rule or state statute: For the 

### TERP program, proposed amendments and the new section in Division 3 

### are not expressly required by HB 

### 2481. Those recommendations will: 1)provide clarification that for replacement and repower projects, the baseline vehicle, equipment, or engine must be scrapped or permanently removed from the State of Texas;

### Commissioners Page 4 September 

### 1, 2006 Re: Docket No. 2005-2006-RUL
2) provide a new definition of cost-effectivenessthat clarifies how the commission will determine a project's cost effectiveness; and 3) provide the basic requirements for a rebate grant program under TERP.
For the Texas Clean School Bus Program, HB 3469 expressly requires the commission to "establish criteria for setting priorities for projects eligible to receive grants under this chapter7' by rule. Staff recommends the commission also establish by rule a set of basic program requirements, similarto basic TERP program requirements including: 

### 1)program definitions; 

### 2) applicability for school districts, charter schools, and regional planning organizations; 3) basic program requirements and rules; 4) monitoring and reporting requirements; and 5) program expiration date. 

### Impact on the regulated community: Who will be affected? Changes to the TERP rules (Division 3) will affect only those parties voluntarily applying for TERP grants. New rules for the Texas Clean School Bus Program (Division4) will affect only those school districts, charter schools, and regional planning organizationsvoluntarily applying for grants under the established program. 

### Does it create a 

### group of affectedpersons who were not affectedpreviously? How? Changes to the TERP rules (Division 3) will not create a group of persons who were not previously affected. New rules for the Texas Clean School Bus Program (Division4) may create a group of school districts, charter schools, and regional planning organizationswho were not previously affected. Those entities would only become affected if they voluntarily chose to apply for and receive grants under the Texas Clean School Bus Program. 

### Will there be a 

### fiscal impact? If so, estimate. The Texas Clean School Bus Program (Division 4) 

### proposed rules provide a mechanism to implement the clean school bus program. The proposed amendments to Division 3 provide clarification to TERP program requirements. Fiscal implications (i.e., increased revenue) are anticipated for regional planning organizations, local school districts, and charter schools if they elect to participate in a clean school bus program. The Legislative Budget Board's fiscal note for HB 3469 estimated that school districts, charter schools, and regional planning organizationscould realize approximately $1.7 

### million (based on 2006 TERP revenues) per year. Parties voluntarily applying for and receiving a TERP grant may experience fiscal impacts (i.e., increased revenue). 

### Impact on the public: Who 

### will be affected?

### Commissioners Page 

### 5 September 1,2006
Re: Docket No. 2005-2006-RUL
The public, particularly school children and school staff, will benefit from proposed new rules in Division 4 

### through the reductions in diesel exhaust from school buses. The public will benefit from proposed revisions to the TERP program rules (Division 3) through reduced emissions of NOx. 

### Does it create a group of affected persons who were not affected previously? How? Adopted changes to Division 3 for the TERPprogram and new Division 4 

### for the Texas Clean School Bus Program will not create a new affected group. 

### Will there be a ffical impact? If so, estimate. There is no projected cost to the public for this program.


### Impact on agency programs: For TERP program rules (Division 3), staff will need to put new administrative procedures in place. The commission will need to develop and implement a new Texas Clean School Bus grant program. 

### Stakeholder meetings: Have any 

### stakeholder meetings been held? The commission held a public hearing at TCEQ headquarters on May 

### 9, 2006, but no one attended. There have been no stakeholder meetings held at this time. Staff will discuss these proposed changes to TERP program rules (Division 3) with potential TERP applicants at upcoming 

### TERP workshops.



### With whom? N/A.


### What were the general sentiments?N/A. 

### Were any changes made in response to stakeholder concerns? N/A. 

### Policy issues: What policy issues are affected? The proposed rule changes to the TERP program (Division 3) impact air quality planning issues (SIP) for 41 affected counties. The proposed rules for the Texas Clean School Bus Programprimarily address PM pollution but allow for NOx emissionsreduction projects as 

### well. Texas currently has one area, the City of El Paso, which is nonattainment for PMIo. In light of the fact that the United States Environmental Protection Agency is proposing to revise the national ambient air quality standards for PM, the proposed new rules for the Texas Clean School Bus Program (Division4) impact air quality planning issues for PMz.5 and PMcoarse. The state does not currently have nonattainment areas for PM2.5 or PMcoarse, but monitored PM levels in several counties are approaching the the proposed standards. Having a PM control strategy in place in these at-risk areas may be helpful.

### Commissioners Page 6 September 1,2006
Re: Docket No. 2005-2006-RUL Are any policies that are not currently based on rule being made into 

### a rule? 

### Staff recommends that the requirement for TERP grant recipients to remove baseline equipment in 

### replacement or repower projects from affected counties be 

### changed to require those grant recipients to permanently remove baseline equipment from the State of Texas. Staff makes the same recommendation for recipients of grants under the Texas Clean School Bus Program. Staff also recommends changes to how cost effectiveness for a project is calculated: "In calculating costeffectiveness, one-time grants of money at the beginning of a project shall be amualized using a time value of public funds or discount rate determined for each project by the commission, taking into account the interest rate on bonds, interest earned by state funds, and other factors the commission considers appropriate. " 

### What are the consequences

### if this rulemaking is not approvedto go forward? 

### HB 3469 requires the commission to adopt criteria for program priorities by rule. Failure to adopt this provision would mean the commissionhas not complied with statutory requirements. Without these rule changes, the TERP program may have difficulty in maximizing the reductions achieved through the TERP program. Are there alternatives? 

### HB 2481 requires the commission to establish, by rule, "criteria for setting priorities for projects eligible to receive grants under this chapter." Since much of the implementation of the TERP program is developed in the program guidelines, it might be possible to amend the current TERP emissions reduction incentive grants program guidelines to incorporate the clean school bus program criteria, without rulernaking. However, given the direction in HB 2481, it appears that rulemaking is required to implement the clean school bus program. Potentially controversial matters: 

### Proposed amendments to the TERP program rules (Division 3), particularly the item referring to equivalent cost effectiveness criteria, may change the competitivenessof some types of projects. Some stakeholdersmay not support the resulting changes.
Key points 

### in adoption rulemakingschedule: TexasRegister 

### proposal publication date: 

### April 14, 

### 2006 Anticipated effective date: 

### October 12, 2006 Six-month TexasRegister filing 

### deadline: 

### October 14,2006

### Commissioners Page 7 September 1,2006
Re: Docket No. 2005-2006-RUL 

### Public comment: A public hearing was held on May 9, 2006 at which no oral comments were received. Written comments were received from the U.S. EPA (EPA), Houston Regional Group of the Sierra Club (HSC), the Environmental Defense Fund (EDF), the Texas Center for Policy Studies (TCPS), and one individual. All commenters expressed general support for the Texas Clean School Bus Program. The EPA and EDF also commented that many studieshave shown that school bus exhaust can be harmful to children and school staff. Individual highlights:
HSC commented that they favored the widest possible use of pollution control devices including broader model year eligibility and shorter project life requirementsthan are specified in HB3469. The EPA asked that the commission confirm that the rule changes were consistentwith section 1 lO(1) (antibacksliding requirements) and federal guidance on economic guidance programs. The EDF, similarly to HSC, commented that particulate filters and catalysts are verified technologies on model year buses outside of the ranges specified in HB 3469. The EDF commented that the commission should find a way to fund pollution control devices on privately owned school buses that are contractedto school districts or charter schools. The EDF and TCPS commented that proposed $114.644(b), which allows the commission to prioritize clean school bus grants to certain parts of the state and certain projects, was inconsistent with HB3469. The EDF commented that when implementing a clean school bus program, the commission should emphasize administrative ease for school districts and charter schools by focusing grants on a small group of already verified technologies. 

### Si-cant changes from proposal:
No rule language was changed in response to public comments. Staff inserted language in the response to comments confirming the Division 3 and Division 4 rule changes were consistent with section 1 lO(1) of the Federal Clean Air Act and federal guidance on economic incentive programs 

### - 

### as requested by EPA.


### Agency contacts: Erik Gribbin, Rule Project Manager, 239-2590, Air Quality Planning and Implementation Division Brad Patterson, Staff Attorney, 239- 1201 Holly Vierk, Texas Register Coordinator, 239-0177 Attachments

### Commissioners Page 

### 8 September 1,2006 

### Re: Docket No. 2005-2006-RUL

cc: Chief Clerk, 

### 5 copies ExecutiveDirector's Office David C. Schanbacher, P.E. Jason Skaggs Ashley 

### K. Wadick Brent Wade Office of General Counsel Erik Gribbin Holly Vierk cc (without attachments): Brad Patterson, Staff Attorney Kerry Howard, Program Office Liaison Erik Gribbin, Division Liaison Booker Harrison, OLS Liaison. Russ Kimble, OLS

### EVALUATIONOF TESTIMONY

The Texas Commissionon Environmental Quality (commission) adopts amendments to §I14.620 and 5114.622. The commission also adopts new 55114.624, 114.640, 114.642, 114.644, 114.646,and 114.648. The amendments and new sections are adopted 

### without changesto the proposedtext as published in the April 14,2006, issue of the 

### Texas Register (31 TexReg 3187) and will not be republished.

'The amended §I14.620and §I14.622 and new §§I14.624, 114.640, 114.642, 114.644, 114.646,and 114.648are adoptedto be submittedto the United States Environmental Protection Agency (EPA) as revisionsto the state implementation plan (SIP).

BACKGROUNDAND SUMMARY OF THE FACTUAL BASIS FOR THEADOPTED RULES House Bill (HB) 3469, 79th Legislature,2005, added Chapter 390 to the Texas Health and Safety Code. This new chapter directs the commissionto establish and administer a clean school bus program within the financial limits set by amended s386.051 and s386.052 (HB 3469, 79th Legislature). This clean school bus program will fund efforts by school districts to improvethe health of children by reducing emissions of diesel exhaust from school buses. Reduction of emissions from diesel-powered school buses will also benefit the public in ozone nonattainment areas by reducing emissions of nitrogen oxides (IVO,).

The commission is adopting new 55114.640, 1 14.642, 1 14.644, 114.646, and 1 14.648to establish this program. Underthese sections, school districts, charter schools, and regional planning organizationswould be eligiblefor reimbursementgrants for the use of emissions reducing catalysts, particulate filters, qualifying fuels, and other emissions reducing add-on equipment or technology that the commission finds will reduce emissions.

### House Bill 2481, 79th Legislature, 2005, added 5386.1

### 17to the Health and Safety Code to add

a rebate grant program under the Texas Emissions Reduction Plan (TERP). New §I14.624 is adopted to implement this program. 'The rebate grant will streamline the grant application process for some applicants and will ease the administrative burden on the agency.

Amendments to 5114.622 will clarify that for replacement and repower projects, the baseline vehicle, equipment, or engine must be scrapped or permanently removed from the State of Texas. Amendments to §I 14.620 and 5114.622 create an option for the commission to use an equivalent measureto the current $1 3,000 per ton cost effectiveness standard or an alternative approved 

### by the commission. These amendments will improve TERP program effectiveness by ensuring that high-emitting engines cannot be reintroduced into an affected county and allowing the commission to increasethe emissions reductions created by grants.

SECTION 

### BY SEC'l7ON DISCUSSION The commission adopts administrative changes throughout this rulemaking to be consistent with guidance provided inthe 

### Texas Legislative Council Drafting Manual, November 2004, and to conform with Texas Register requirements and agency guidelines.

The adopted amendment to 5114.620 modifies the definition of "Cost-effectiveness" to clarify how the cost-effectiveness of TERP grant applications will be determined. The adopted amendment to 5114.622clarifies that, for grants entailing replacement or repower of an engine

or other equipment, the original equipment must be permanently removed from the State of Texas. The adopted amendment to 5114.622 also clarifies that the commission may establish cost-effectiveness standards lower than the statutory $13,000 per ton and that the commission may also make project selection decisions on a variety of factors in addition to costeffectiveness.Adopted new §I14.624, Rebate Grant Process, establishes a process that awards TERP funds as a rebate. This new process would provide for ongoing, first-come, first-served awarding of standardized rebatesfor designated project types. It would create a simple, streamlined process to award 'TERP funds.

Amended §I14.620and 51 14.622 and new §I14.624 are also adoptedto be submitted to the EPA as revisionsto the SIP.

Adopted new §I14.640, Definitions, provides definitions for the Texas Clean School Bus Program. This section provides definitions for important terms in the proposed new division.

Adopted new §I14.642, Applicability, establishes program eligibilityfor school districts and charter schools. This section also allows regional planning organizations, such as councils of government, and private nonprofit organizations to apply for and receive grants to improve the program.

Adopted new §I14.644, Clean School Bus Program Requirements, establishes basic program requirements, including: the types of projects eligible for a clean school bus grant; the ability of the commission to limit or prioritize funding for the Texas Clean School Bus Program;the minimum useful life of a project underthe grant program; a requirement that replaced equipment be permanently removedfrom the State of Texas; restrictingthe use of grant funds
to pay incremental costs associated with the project and prohibition against using the grant for administrative expenses; prohibition against recipients using grant funding to meet federal or state legal requirements and using emissions reductions as part of an emissions banking or trading program; grant application requirements; and obligation of the grant recipient to return grant funds if they fail to meet the terms of a project grant or conditions of the proposed division.

### Adopted new §I14.646, Monitoring, Recordkeeping, and Reporting Requirements, establishes that grant recipients must adhere to the reporting requirements of their grant, which will occur no less frequently than annually.

Adopted new §I14.648, Implementation Schedule, establishes that the Texas Clean School Bus program will expire on August 31, 2013.

New §§I 14.640, 114.642, 114.644, 114.646,and 114.648 are also adopted to be submitted to the EPA as revisions to the SIP.

FINAL REGULATORY IMPACTANALYSIS DETERMINATION The commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas GovernmentCode, §2001.0225, and determined that this rule action is not subject to S2001.0025 because it does not meet the definition of a "major environmental rule" as defined 

### in that statute. A "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human healthfrom environmental exposure and that may adversely affect in a materialway the economy, productivity, competition,jobs, the environment, or the public health and safety of the state or a sector of the state.

'The adopted amendments to Chapter 114 modify the existing rules in accordance with House Bill 3469, 79th Legislature, which amended Texas Health and Safety Code, §386.051(b) and added Texas Health and Safety Code, Chapter 390 to requirethe commission to establish a Clean School Bus Program. The Clean School Bus Program is intended to reduce diesel exhaust emissions from school buses by funding eligible projects. The adopted rule amendments are part of a voluntary incentive program with the goal of reducing diesel emissions and as such, the adopted rules will not adversely affect in a materialway the

### economy, a sector of the economy, productivity, competition, jobs, the environment,or the public health and safety of the state or a sector of the state.

Further, the adopted amendments to Chapter 114 modify the existing rules in accordance with House Bill 2481, 79th Legislature, which amended Chapter 386, Subchapter C 

### of the Texas Healthand Safety Code by adding 5386.1 17, directing the commissionto adopt a processto award grants in the form of rebates to streamlinethe grant application, contracting, reimbursement,and reporting processes for certain projects underthe TERP. These rule amendments will implement procedural changes and will have no effect on the environment or human health. 'These rule amendments are part of a voluntary incentive program with the goal of reducing diesel emissions and as such, the adopted rules will not adversely affect in a materialway the economy, a sector of the economy, productivity, competition, jobs, the environment,or the public health and safety of the state or a sector of the state.

In addition, a regulatory impact analysis is not required because the adopted rules do not meet any of the four applicability criteria for requiring a regulatory analysis of a "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract betweenthe state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not exceed a standard set by federal law, and the adopted technical requirements are consistent with applicable federal standards. In addition, this rulemakingdoes not exceed an express requirement of state law and is not adopted solely under the general powers of the agency, but

### is specifically authorized by the provisions cited in the STA-I-LITORYAUTHORITY section of this preamble. Finally, this rulemakingdoes not exceed a requirement of a delegation agreement or contract to implement a state and federal program.

The commission invited public comment on the draft regulatory impact analysis determination during the public comment period that ended May 16, 2006. No comments were received on the draft regulatory impact analysis.

TAKINGS IMPACT ASSESSMENT The commission evaluated this rulemaking action and performed an analysis of whether the adopted rules are subject to Texas GovernmentCode, Chapter 2007. The primary purpose of the rulemaking is to amend Chapter 114 in accordance with House Bill 3469 and House Bill 2481. These amendments implementa voluntary programand only affect motor vehicles and equipment which are not consideredto be private real property. Therefore, promulgation and enforcement of these adopted rules are neither a statutory nor a constitutional taking because they do not affect private real property. Therefore, these rules do not constitute a taking under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM The commission reviewed the adopted rulemaking and found that the rulemaking is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, $533.201 et seq., and therefore must be consistentwith all applicable CMP goals and policies. The commission conducted a consistency determination for the adopted rules in accordance with Coastal Coordination Act ImplementationRules, 31 TAC $505.22, and found the adopted rulemaking is consistent with the applicable CMP goals and policies.The applicable goal of the CMP is to protect, preserve, restore, and enhance the diversity, quality, quantity, functions, and values of coastal natural resourceareas. The specific CMP policy applicableto these rules is that commission rules comply with 40 Code of Federal Regulations (CFR), to protect and enhance air quality in coastal natural resource areas (31 TAC 5501.32). The commission reviewedthis adopted rulemakingfor consistency with the Texas CMP goals and policies in accordancewith the regulations of the Coastal Coordination Council and determinedthat the amendments are consistent with CMP goals and policies because this rulemaking action would reduce air pollution from diesel-powered school buses. No new
sources of air contaminants are authorized and nitrogen oxides and particulateair emissions would be reduced as a result of these rules. This adopted rulemaking complies with 40 CFR Part 51. This adopted action is part of the control strategyfor ozone nonattainment areas in accordance with SIP requirements in 40 CFR Part 51 and reduces emissions of particulate matter consistent with National Ambient Air Quality Standards set for particulatematter in 40 CFR Part 50.

Promulgationand enforcement of these rules will not violate or exceed any standards identified in the applicable CMP goals and policies becausethe adopted rules are consistent with these CMP goals and policies, because these rules do not create or have a direct or significant adverse effect on any coastal natural resource areas, and becausethe adopted rules will reduce emissions of air pollutants.

Written comments on the consistency of this rulemakingwere invited during the public comment periodwhich closed May 16, 2006. No comments were received on the consistency of this rulemakingwith the CMP.

### PUBLIC COMMENT A public hearing on the adopted rules was held inAustin on May 9, 

### 2006, at 2:00 p.m. at the Texas Commission on Environmental Quality Complex. The public comment period closed May 16, 2006. No comments were received at the public hearing, but the commission did receive written comments from the Houston Regional Group of the Sierra Club (HSC), Environmental Defense (ED), the United States Environmental Protection Agency (EPA), the Texas Center for Policy Studies (TCPS), and one individual generally supporting the proposed rules.

RESPONSE TO COMMENTS The HSC supports provisions in §I14.622(c)and 5114.644(e) which require grant recipients for replacement or repower projects to permanently remove old engines or vehicles from Texas.

The commission appreciatesthe support. Removing these "old" vehicles or engines from use inTexas ensures that they cannot continueto pollute the air inTexas.



### The HSC does not support limiting the use of diesel oxidation catalysts and particulate filters to certain model years of school buses under §I14.644(a)(I) and (2), but rather supports the widespread use of these pollution control devices. ED comments that these pollution control devices are verified by the U.S. EPA or certified by the California Air Resources Board for model years beyondthose included in the proposed rules. ED asks that the commission expand the range of model years covered by the clean school bus program to match those for which there are verified technologies.

The commission appreciatesthese comments. The model year designations in 5114.644(a)(I) and 

### (2), 1994 for oxidation catalysts and 1994 to 1998 for particulatefilters, reflect requirements set inthe statute (Texas Health and Safety Code, §390.002). 'Thecommission notes that 

## 5114.644(a)(5) allows the commission to approve "other technologies that the commissionfinds will bring about significant emissions reductions." This ability would allow the commission to fund a wide variety of emissionreducing projects. The commission did not revise the proposed rules as a result of this
comment.



### The HSC supports reducing the requirement for a project life of five years proposed under §I14.644(d)to three years of useful life. The HSC wants installation of pollution control devices
to be as widespread as possible as quickly as possible.

The commission appreciates this comment. The requirement for five years of useful life proposed under 

### 5114.644(d) reflects statutory requirements (Texas Health and Safety Code, §390.004(b)). State law and the proposed rule (§I14.644(d)) also allow for a pollution control device to be used on a particular school bus for a period less than five years ifthat pollution control device is reinstalled on another school bus for the remainder of the required five years.



### One individual comments school buses are used year-round for a variety of activities such as class, special eventslfieldtrips, sporting events or other competitions, summer events, and after school programs.

The commission acknowledges this comment.



### One individual comments school buses should be air-conditioned and filtered, similarto classrooms, in order to increase learning and protect the health of students, teachers, and other staff. The first step in protecting students and teachers from exposureto air pollution on school

### buses would be to require that all new school buses be air-conditioned and fitted with filters. The second step would be to establish a modification program for existing school buses so that standards for existing buses could be met as time and budget allow.

Air-conditioning school buses is outside the scope of this rulemaking. 'The commission agrees that reducing air pollution from school buseswould help protectthe health of students, teachers, and other staffwho work in our school systems.

The EPA and ED comment that many studies have confirmed the detrimental effect of diesel exhaust on children's health and that they support the commission's efforts to establish a clean school bus program for the State of Texas.

The commission appreciates the support.

The EPA comments that there are very few retrofits available that provide the substantial NO, reductions for which the TERP program was established. It is improbable those retrofits would
meet the 

### $13,000 per ton cost effectiveness requirements used in the TERP program. They comment makingthe clean school bus program a viable part of the TERP program could require

some modifications to the program. The EPA recommends proposed §I14.622(d) be revised to identify what the "additional measures" are in addition to, and that the commission provide guidance describing such additional measures and how they will be considered.

The commission notes while the TERP program and the Clean School Bus program share a similar method of finance, they are two separate programs. The programs are authorized by separate chapters of the Texas Health and Safety Code. Furthermore, Texas statute and the commission's rules do not establish a specific cost effectivenessrequirement for emissions reduction projects under the Clean School Bus program. Section 114.622(d) does not apply to projects under the newly adopted Division 4. The commission did not revise the proposed rules as requested.



### The EPA recommends the proposed definition of "Qualifyingfuel" under $114.640 be modified by placing a comma after the word "bus" to indicate that the final "that"clause does not apply to school buses but insteadto the fuel.

The commission appreciates the EPA's comment. The definition included inthe rule is the literal definitionthat was adopted into the Texas Health and Safety Code by the 79th Legislature. The commission did not revise the proposed rules as suggested.



### The EPA comments additional documentation may be necessary if the clean school bus program is submitted as a SIP revision. More specifically, the EPA comments the commission should provide a demonstration of the adopted rules' consistencywith Federal CleanAir Act, $11 O(1). -The EPA also corr~ments if the clean school bus program is to be approvable into the SIP under the Economic lncentive Program, reductions must be surplus, quantifiable, enforceable, and permanent. The EPA requests the commission confirm that the adopted rule changes are consistent with Federal Clean Air Act, $1lO(1) and with its guidance entitled "EPA's ImprovingAir Quality with Economic lncentive Programs" (Chapters 4 and 8, 

### January 2001). The EPA notes it has previously approvedthe TERP program under these conditions.

Adopted rules for the Texas Clean School Bus Program are consistentwith requirements of the Federal Clean Air Act, §110(1). Under the EPA's guidance for economic incentive programs, the Texas Clean School Bus Program meetsthe requirements of a financial mechanism economic incentive program. Although the Clean School Bus Programderives its funding from the same source, the program is separate from the TERP Emissions Reduction Inventive Grant Program. The primary requirements of the EPA guidance are:

Surplus: Underthe Clean School Bus Program an activity will not be eligible if it is required by any state or federal law, regulation, memorandum of agreement, or other legally binding document. The program solicitation documents and grant instructions will outline additional restrictions and describe other eligible activities.

Enforceable: The Clean School Bus programwill require a review of each project funded. Contracts will require achievement of the emission reductions over the designated project life. Emission reductionswill be verified through reports on use ofthe grantfunded buses and on-site monitoring and audit visits. Contractswill contain provisions that allow the state to recapture grant money for the failure to comply with grant obligations. The reports and monitoring activities will be used by TCEQ to track compliance and effectiveness of the grant recipients infulfilling their obligations under the contract. The TCEQ may, at any time, beforeor after reimbursement, request additional evidence concerning costs.

Quantifiable: Emissions reductions achieved through the Texas Clean School Bus Program will be quantified using a comparison of baseline 

### NOxand particulate matter emissions with reduced 

### NOxand particulate matter emissions. Engine emissions certifications and retrofit system verifications by the EPA will be usedto verify the emissions of the reduced-emissions engines and retrofit systems. Baseline emission
ratesfor uncontrolled engines will be basedon factors developedand used for SIP modeling purposes by the TCEQ.The Clean School Bus Program solicitation documents and grant instructions will outline the approach for determining incremental costs, emission reductions and costeffectiveness. The application forms will requirethe applicantto provide data on the incremental costs of each activity, vehicle or equipment usage patterns, and information about the vehicle or equipment needed to determine emission rates. Emission factors, loadfactor, and usage pattern informationwill be used by the TCEQ to calculate emission reductions attributedto an activity. The solicitation documents and grant instructionswill contain information on how to determinethe level of 

### NOxand particulate
matter emissions for the baselineand the newvehicle and equipment. Usingthis information, the TCEQ will determinethe emissions reductionsand cost effectiveness of the project.

For a project to be eligible for Clean School Bus Program funding, the emission rate of engines or the emission reduction factor for retrofit systems must be certified or verified under an applicable EPA certification or verification program. In accordance with agreements between the EPA and California Air Resources Board (CARB), CARB certification or verification will also be accepted. Insome cases, the TCEQ may also accept testing results under EPA, CARB, andlor TCEQ approvedtest protocolsto determinethe emission rate or emission reductionfactor. This approach will providethe most flexibility for the programwhile also restrictingthe evaluation process to those technologies or products that can provide documentation thatwill be acceptableto the EPA.

Permanent: The TCEQ will establish minimum requirementsfor the life of a project, whichwill be at leastfive years. The project lifewill be the period in which the grant recipient is contractually obligated to monitor and report on the use of the grant-funded

### vehicle, equipment, andlor fuel. Environmental benefits from projects under the Clean School Bus Programwill occur for at leastthis period. Emissions reductions achieved through this program are contractually and statutorily permanentfor the project life established inthe grant contract and will be permanently retired. Emissions reductions from the Clean School Bus Programwill not be usable inan averaging, banking, or trading program.

General 

### EquityPrincipleandEnvironmental Justice Principle: The Texas Clean School Bus Program is not a banking and trading program so program disbenefits are not expected. By design, this program reduces NOx and particulate matter emissionswith a concentration on cleaner diesel engines through economic incentives inthe form of grants. Eligible projects include (but are not necessarily limited to) diesel oxidation catalysts, diesel particulate filters, purchase and use of emission reducing add-on equipment, the use of qualifying fuel, and other technologies that the commission finds will bring about significant emissions reductions.

Penalty ~rovisions: Upon the performing party's failure to comply with the requirements of a Clean School Busgrant, the TCEQ may, at its own discretion, require that the performing party return or repay all or a portion of the reimbursement funds.

Procedures for Public Disclosure of InformationandProvisions forAddressing Uncertainty: Performing parties will maintain project financial information and data used inthe preparation or support of any request for reimbursement (direct and indirect) and copies of any cost information or analysis submitted to the TCEQ. The TCEQ, the Texas State Auditor's Office, or any of their authorized representativeswill have access to all such books, records, documents, and other evidence for the purpose of review,

### inspection, audit, excerpts, transcriptions, andlor copying during normal business hours. Furthermorethe performing party must agree to the disclosureof all information and reports resultingfrom access to records under the grant.

Additionally, property records of grant equipmentwill be maintainedthat describethe usage, ownership, and any other details as outlined inthe grant contract. All data and other informationdeveloped under the grant agreement will be furnished to the TCEQ and will be public informationexcept to the extent that it is exemptedfrom public access by the Texas Public InformationAct, Texas Government Code, Chapter 552.

Safeguardswill be establishedto monitor programfunding and emission reductions. Applicants of Clean School Bus Programfunding will be requiredto monitor the use of grant-fundedvehicles, equipment, and fuel and to reportto the TCEQ for the life of each grant-funded activity. Grant recipientswill be requiredto complete the project according to the time frames explained inthe grant agreement.

Adopted revisionsto the TERP program rules in Division3 

### are also consistent with Federal Clean Air Act, §llO(I) and are being submittedto the EPA as a SIP revision. The adopted ruleswill serve to make the program more accessible and more cost-effective; thereby makingthe program more effective overall. As the EPA notes in its comment, the TERP program is already approved under federal guidelines for economic incentive programs and the revised rules will continueto meet federal guidance.

ED generally supports the rule and comments that it is crucial to have basic rules in placefor the Texas Clean School Bus Program so that the commission can proceed quickly to award grants when funding becomes available.

### The commission agrees and appreciates ED's support.

ED and TCPS comment while they generally support the rules as proposed, they would like to see the rules refined to "better reflect the legislatively-stated goal of improving the 'rnicroenvironment' in and around school buses."

'The commission contendsthe adopted rules for the Texas Clean School Bus Program

are consistent with HB 3469. The adopted rules develop the basic framework of a clean school bus program. The program will be implementedwith a more comprehensive set of guidelines and requirements.

ED supports new §I14.640 and $114.642. ED notes certain school districts contract out some

or all of their transportation services to private companies and suggests that the commission explore ways to ensure buses operated by third parties can participate in the Texas Clean School Bus program.

'The commission appreciates ED's support. HB 3469, as enacted, empowers the commission to issue grants only to school districts (including countywide school districts), charter schools, a regional planning commission (or a similar regional agency created under Texas Government Code, Chapter 391), councils of government, and private nonprofit organizations. The commission is not aware of away to include buses owned by private companies inthe Texas Clean School Bus Program, but it 

### does welcome further ideasfrom stakeholders as the program is implemented.

ED and TCPS comment that proposed $114.644(b) is inconsistent with the statutory language of 

### HB 3469 and should be removed.'The commission contends proposed §114.644(b) is consistent with language in HB 3469 which gives the commission the authority to "establish criteria for setting priorities for projects eligible to receive grants under this chapter" (Texas Health and Safety Code, §390.004(a)). Setting program prioritieswill allow the commission to ensure that available funds are spent as effectively as possible.



### ED commentsthe commission should clarify what it means by "additional pollutants to be addressed" during a funding period (§I14.644(c)). ED contendsthat such language is superfluous in light of the specific technologies enumerated in §I14.644(a).

In order to spend available funds as effectively as possible, the commission wishes to have the ability to prioritize one or more pollutants over others ifscientific evidence
warrants such a priority.



### ED commentsthe clean school bus program should be made as simple as possible for school districts by expressly targeting grants to a small number of already verified technologies like those in §I14.644(a). It believes administrativeease will attract participation from smaller school districts.

'The commission appreciates ED'S suggestion.

# STAFF RECOMMENDATIONSSUBCHAPTER K: MOBILE SOURCE INCENTIVE PROGRAMS DIVISION 3: DIESEL EMISSIONS REDUCTION INCENTIVE PROGRAM FOR ON-ROAD AND NON-ROAD VEHICLES 5114.620, 5114.622, 5114.624



### STATUTORY AUTHORITY The amendments and new section are adopted under Texas Water Code, s5.102, which provides the commission with the general powersto carry out its duties under the Texas Water Code; s5.103, which authorizesthe commission to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and 55.105,which authorizesthe commission by rule to establish and approve all general policy of the commission. The amendments and new section are also adopted under Texas Health

, 

### and Safety Code, Texas Clean Air Act, s382.017,which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas CleanAir Act; s382.011,which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; s382.012,which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and Chapter 386, which establishes the TERP. Finally, the amendments and new section are adopted as part of the implementationof House Bill 2481, 79th Legislature,2005.

The adopted amendments and new section implement Texas Clean Air Act, ss382.002, 382.011, 382.012, 382.01

### 7, 386.051, and House Bill 2481, 79th Legislature, 2005.§I 14.620. 

### Definitions.

Unless specifically defined inthe Texas CleanAir Act (TCAA) or inthe rules of the commission,the terms used in this subchapter have the meanings commonly ascribedto them in the field of air pollution control. In addition to the terms which are defined by the TCAA; and 553.2, 101.1, and 1 14.1of this title (relatingto Definitions),the following words and terms, when used in this division shall have the following meanings, unless the context clearly indicates otherwise.

(1) Cost-effectiveness--The total dollar amount expended divided by the total nurr~ber of tons of nitrogen oxides emissions reduction attributableto that expenditure. In calculating cost-effectiveness, one-time grants of money at the beginnirlg of a project shall be annualized using a time value of public funds or discount rate determinedfor each project by the commission, taking into account the interest rate on bonds, interest earned by state funds, and other factors the commission considers appropriate.

(2) Guidelines--

### Texas Emissions Reduction Plan: Guidelines for Emissions Reduction lncentive Grants Program (RG-388) adopted by the commission under Texas Health and Safety Code, 5386.053, as amended.

(3) Incremental cost--The cost of an applicant's project less a baseline cost that would otherwise be incurred by an applicant in the normal course of business and may include added lease or fuel costs as well as additional capital costs.(4) Motorvehicle--A self-propelled device designed for transporting persons or property on a public highwaythat is required to be registered underTexas Transportation Code, Chapter 502.

(5) Non-roaddiesel--A vehicle or piece of equipment, excluding a motor vehicle

or on-road diesel, that is powered by a non-road engine, including: non-road non-recreational equipment and vehicles; construction equipment; locomotives; marine vessels; and other highemitting diesel engine categories.

(6) Non-road engine--An internal combustion engine that is in or on a piece of equipment that is self-propelled or that propels itself and performs another function, excluding a vehicle that is used solely for competition, or a piece of equipment that is intendedto be propelledwhile performing its function, or a piece of equipment designedto be and capable of being carried or moved from one location to another.



### (7) On-road diesel--An on-road diesel-powered motor vehicle that has a gross vehicle weight rating of 8,500 pounds or more.

(8) Qualifying fuel--Any liquid or gaseous fuel or additives registeredor verified by the United States Environmental ProtectionAgency that is ultimately dispensed into a motor vehicle or on-road or non-road dieselthat provides reductions of nitrogen oxides emissions beyond reductions required by state or federal law.

(9) Repower--To replace an old engine powering an on-road or non-road diesel with a new engine; a used engine; a remanufactured engine; or electric motors,drives, or fuel cells.(10) 

### Retrofit--To equip an engine andfuel system with new emissions-reducing parts or technology verified by the United States Environmental Protection Agency after manufacture of the original engine andfuel system.

(11) Small business--A business owned by a personwho:

(A) owns and operates not more than two vehicles, one of which is:

(i) an on-road diesel with a pre-1994 engine model; or

(ii) a non-road diesel with an engine with uncontrolled emissions; and



### (B) has owned the on-road or non-road dieselfor morethan one year.



### 5114.622. Incentive Program Requirements.

(a) Eligible projects include:

(1) purchase or lease of on-road and non-road diesels;

(2) emissions-reducing retrofit projectsfor on-road or non-road diesels;

(3) 

### emissions-reducing repower projects for on-road or non-road diesels;(4) purchase and use of emissions-reducingadd-on equipment for on-road or non-road diesels;

(5) development and demonstrationof practical, low-emissions retrofit technologies, repower options, and advanced technologies for on-road or non-road dieselswith lower nitrogen oxides (NO,) emissions;

(6) use of qualifying fuel;

(7) implementation of infrastructure projects;



### (8) replacement of on-road and non-road diesels with newer on-road and nonroad diesels; and

(9) other projects that havethe potentialto reduce anticipated NO, emissions from diesel engines.

(b) For a proposed project as listed in subsection (a) of this section, other than a project involving a marine vessel or engine, not less than 75% of vehicle miles traveled or hours of operation projectedfor the five years immediately following the award of a grant must be projectedto take place in a nonattainment area or affected county of this state.

(c) For a proposed project that includes a replacement of equipment or a repower, the old equipment or engine must be recycled, scrapped, or otherwise permanently removed from the State of Texas.

### (d) To be eligible for a grant, the cost-effectiveness of a proposed project as listed in subsection (a) of this section, except for infrastructure projects and infrastructure purchases that are part of a broader retrofit, repower, replacement, or add-on equipment project, must not exceed a cost-effectiveness of $1 3,000 per ton of NOxemissions reduced. The commission may set lower cost-effectiveness limits as needed to ensure the best use of available funds. The commission may also base project selection decisions on additional measuresto evaluate the effectiveness of projects in reducing NOxemissions in relation to the funds to be awarded.

(e) Projects funded with a grant from this program may not be used for credit under any state or federal emissions reduction credit averaging, banking, or trading program except as provided under Texas Health and Safety Code, s386.056.

(f) 

### A proposed project as listed in subsection (a) of this section is not eligible if it is required by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document. This subsection does not apply to:

(1) an otherwise qualified project, regardless of the fact that the state implementation plan assumes that the change in equipment, vehicles, or operations will occur, if on the date the grant is awarded the change is not required by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document; or



### (2) the purchase of an on-road diesel or equipment required only by local law or regulation or by corporate or controlling board policy of a public or private entity.

(g) A 

### proposed retrofit, repower, replacement, or add-on equipment project must achieve a reductior~ in NO, emissions to the level established in the commission's Texas

### Emissions Reduction Plan: Guidelinesfor Emissions Reduction lncentive Grants Program (RG388) for that type of project comparedwith the baseline emissions adopted by the commission for the relevant engine year and application.

(h) If a grant recipientfails to meet the terms of a project grant or the conditions of this division,the executive director can require that the grant recipient return some or all of the grant funding to the extent that emission reductions are not achieved or cannot be demonstrated.

(i) 

### Criteria established in the guidelines, including revisionsto the commission's Texas Emissions Reduction Plan: Guidelines for Emissions Reduction lncentive Grants Program (RG388), apply to the Texas Emissions Reduction Plan program. Notwithstanding the provisions of this chapter, as authorized underTexas Health and Safety Code, §386.053(d), revisionsto the guidelines may include, among other changes, adding additional pollutants; adding stationary engines or engines used in stationary applications;adding vehicles and equipment that use fuels other than diesel; or adjusting eligible program categories; as appropriate,to ensure that incentives established under this program achieve the maximum possible emission reductions.

5114.624. Rebate Grant 

### Process.

(a) This section establishes a process to provide fast and sirr~ple access to rebate grants, in accordance with Texas Health and Safety Code, S386.117.

(b) The rebate grant process shall:

(1) designate certain types of projects eligiblefor rebates;

### (2) project standardized oxides of nitrogen emissions reductions for each designated project type;

(3) assign a standardized rebate amount for each designated project type;

(4) 

### allow for processing rebates on an ongoing first-come, first-served basis; and

(5) consolidate, simplify, and reduce the administrativework for applicants and the commission associated with grant application, contracting, reimbursement,and reporting processes for designated project types.

(c) The commission may:

(1) award rebate grants as a pilot project for a specific region or may award the grants statewide;

(2) limit or expand the designated project types as necessary to further the goals of the program; and

(3) administerthe rebate grants or may designate another entity to administer the grants.SUBCHAPTER K: MOBILE SOURCE INCENTIVE PROGRAMS DIVISION4: TEXAS CLEAN SCHOOL BUS PROGRAM §§114.640, 114.642, 114.644, 114.646, 114.648



### STATUTORY AUTHORITY The new sections are adopted under Texas Water Code, 55.102, which provides the commissionwith the general powers to carry out its duties underthe Texas Water Code; 55.103, which authorizes the commission to adopt any rules necessaryto carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and 55.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The new sections are also adopted under Texas Health and Safety Code, Texas Clean Air Act, 5382.017,which authorizes the commissionto adopt rules consistent with the policy and purposes of the Texas Clean Air Act; 5382.011, which authorizes the commission to establishthe level of quality to be maintained inthe state's air and to controlthe quality of the state's air; 5382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; Chapter 386, which establishes the TERP; and Chapter 390, which establishes the Clean School Bus Program. Finally,the new sections are adopted as part of the implementation of House Bill 3469, 79th Legislature, 2005.

The new sections implement Texas Clean Air Act, 55382.002, 382.011, 382.012, 382.017, 386.051, and House Bill 3469, 79th Legislature, 2005.

5114.640. Definitions.



### Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules of the commission,the terms used in this subchapter have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms that are defined by the TCAA and

### $53.2, 101 .I, 

### and 114.1 of this title (relating to Definitions),the following words and terms, when used in this division shall have the following meanings, unlessthe context clearly indicates otherwise.

(1) Diesel exhaust--One or more of the air pollutants emitted from an engine by the combustion of diesel fuel, including particulate matter, nitrogen oxides, volatile organic compounds, air toxics, and carbon monoxide.

(2) Incremental cost--The cost of an applicant's project less a baseline cost that would otherwise be incurred by an applicant in the normal course of business. Incremental costs may include added lease or fuel costs as well as additional capital costs.

(3) Qualifying fuel--Includes any liquid or gaseous fuel or additive registered or verified by the United States Environmental Protection Agency, other than standard gasoline or diesel, that is ultimately dispensed into a school bus that provides reductions of emissions of particulate matter.

(4) Repower--To replace an old engine powering an on-road or non-road diesel with a new engine; a used engine; a remanufactured engine; or electric motors, drives, or fuel cells.



### (5) Retrofit--To equip an engine and fuel system with new emissions-reducing parts or technology verified by the United States Environmental ProtectionAgency after manufacture of the original engine and fuel system.5114.642. Applicability.

(a) Any school district or charter school in this state that operates one or more dieselfueled school buses or a transportation system provided by a countywide school district may apply for and receive a grant under the program.

(b) The commission may allow a regional planning commission, council of governments,

or similar regional planning agency created under Local Government Code, Chapter 391, or a private nonprofit organizationto apply for and receive a grant to improvethe ability of the program to achieve its goals.

5114.644. Clean School Bus Program Requirements.

(a) Eligible projects include:

(1) diesel oxidation catalystsfor school buses built before 1994;



### (2) diesel particulate filters'for school buses built from 1994to 1998;

(3) the purchase and use of emission-reducing add-on equipment for school buses, including devices that reduce crankcase emissions;

(4) the use of qualifyingfuel; and



### (5) other technologies that the commission finds will bring about significant emissions reductions.

### (b) The commission may limit funding under a particular funding round to certain areas of the state, types of applicants, andlor types of projects. The commission may place a priority

on funding for projects conducted in areas that do not attain certain national ambient air quality standards.

(c) Prior to each funding period, the commission may establish priorities and other criteriafor reductions in diesel exhaust emissionsto be achieved by projects funded during that period, including designation of additional pollutantsto be addressed. A proposed project must achieve a reduction in emissions of diesel exhaust compared with the baseline emissions according to the percentage reduction level and other priorities established by the commission. The commission may also establish maximum levels for the funding awarded in relation to the emission reductions projectedto be achieved by a project, in order to maximizethe use of


## . available funds.

(d) A school bus proposed for retrofit must be used on a regular, daily route to and from a school and have at leastfive years of useful life remaining unlessthe applicant agrees to remove the retrofit device at the end of the life of the bus and reinstall the device on another bus.

(e) For a proposed project that includes a replacement of equipment or a repower,the old equipment or engine must be recycled, scrapped, or otherwise permanently removedfrom the State of Texas.

(f) An application for a grant under this program is only eligible if it is made on the form provided by the commission and contains the information required by the commission.(g) A recipient of a grant under this division shall use the grant to pay incremental costs of the project for which the grant is made, which may include the reasonableand necessary expenses incurredfor the labor needed to install emissions-reducing equipment. The recipient may not use the grant to pay the recipient's administrative expenses.

(h) Projects funded with a grant from this program may not be used for credit under any state or federal emissions reduction credit averaging, banking, or trading program except as provided under Texas Health and Safety Code, 

### 9386.056.

(i) 

### A proposed project as listed in subsection (a) of this section is not eligible if it is required by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document. This subsection does not apply to an otherwise qualified project, regardless of the fact that the state implementation plan assumes that the change in equipment, vehicles, or operations will occur, 

### if on the datethe grant is awarded the change is not required by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document or the purchase of an on-road diesel or equipment required only by local law

or regulation or by corporate or controlling board policy of a public or private entity.

(j) If a grant recipient fails to meet the terms of a project grant or the conditions of this division, the executive director can require that the grant recipient return some or all of the grant funding to the extent that emission reductions are not achieved or cannot be demonstrated.

5114.646. Monitoring, Recordkeeping, and Reporting Requirements.

Grant recipients must meet the reporting requirements of their grant, which must occur
no less frequently than annually.$114.648. Implementation Schedule.



### This division expires August 31, 2013.

# TEXAS COMMISSION N 

# ENVIRONMENTAL QALITY CO"~&RR~S

Tm m~ion 

### onEnvironmentalQ&y 

### ORDER ADOPTING NEW AND AMENDED RULES AND REVISIONS TO THE STATEIRIPLEMENTATION PLAN

Docket No. 2005-2006-RUL
On September 20, 2006, the Texas Commission on Environmental Quality (Commission), during a public meeting, considered adoption of amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 1 14.622, new Section 114.624; and Subchapter K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the State Implementation Plan (SIP). The Commission adopts these amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter 

### K, Mobile Source Incentive Programs, Division 3, Sections 1 14.620, 114.622, new Section 1 14.624; and Subchapter K, new Division 4, new Sections 1 14.640, 

## 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the SIP. The adopted rulemaking establishes rules for the Texas Clean School Bus Program as directed by House Bill 3469, 79' Legislature. The adopted ruleinaking also clarifies cost effectiveness requirements for the Texas Emissions Reduction Plan, establishes a rebate grant program as part of the Texas Emissions Reduction Plan, and clarifies scrappage requirements for repower and replacement projects under the Texas Emissions Reduction Plan grant prograin as provided in House Bill 2481, 7gLh Legislature. Under Texas Health & 

### Safety Code 

### 56 382.011, 382.012, and 382.023, the Cormnission has the authority to control the quality of the state's air and to issue orders consistent with the policies and purposes of the Texas Clean Air Act, Chapter 382 of the Tex. Health & 

### Safety Code. The proposed rules were published for comment in the April 14, 2006 issue of the 

### Taas Register (3 1TexReg 3 187).
Pursuant to Tex. Health & 

### Safety Code 

## 5 382.017, Tex. Gov't Code Chapter 2001, and 40 Code of Federal Regulations 

## 5 5

### 1.102and after proper notice, the Coininission conducted public hearing to consider the amendments to 30 TAC Chapter 114, Control of Air Pollution froin Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622,'new Section 114.624; and Subchapter 

### K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the State Impleinentation Plan (SIP). Proper notice included prominent advertisement in the areas affected at least 30 days prior to the date of the hearing. A public hearing was held at the Texas Cominission on Environmental Quality coinplex in Austin, Texas on May 9, 2006. The Cominission circulated hearing notices of its intended action to the public, including interested persons, the Regional Administrator of the EPA, and all applicable local air pollution control agencies. The public was invited to subinit data, views, and recoinmendations on the proposed amendments to 30 TAC Chapter 114, Control of Air Pollution froin Motor Vehicles, Subchapter 

### K, Mobile Source Incentive Programs, Division 3, 

### Sections 114.620, 114.622, new Section 1 14.624; and Subchapter 

### K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the 4

### SIP, either orally or in writing, at the hearing or during the comment period. Prior to the scheduled hearing, copies of the proposed amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622, new Section 114.624; and Subchapter K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the SIP were available for public inspection at the Cormnission's central office and on the Coimnission's Web site. Data, views, and recommendations of interested persons regarding the proposed amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter 

### K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622, new Section 114.624; and Subchapter K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the SIP were submitted to the Commission during the comment period, and were considered by the Coinmission as reflected in the analysis of testimony incorporated by reference to this Order. The Commission finds that the analysis of testimony includes the naines of all interested groups or associations offering cormnent on the proposed amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622, new Section 114.624; and Subchapter K, new Division 4, new Sections. 114.640, 114.642, 114.644, 114.646, and 114.648;and corresponding revisions to the SIP, and their position concerning the same.
IT IS THEREFORE ORDERED BY THE COMMISSION that the amendments to 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 3, Sections 114.620, 114.622, new Section 114.624; and Subchapter K, new Division 4, new Sections 114.640, 114.642, 114.644, 114.646, and 114.648; and corresponding revisions to the SIP incorporated by reference to this Order are hereby adopted. .The Commission further authorizes staff to make any non-substantive revisions to the rules necessary to comply with 

### Texas Register requirements. The adopted rules and the preamble to the adopted rules and the 

### revisions to the SIP are incorporated by reference in this Order as if set forth at length verbatim in this order.
IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the Commission, the Chairman should transmit a copy of this Order, together with the adopted rules and revisions to the SIP, to the Regional Administrator of EPA as a proposed revision to the Texas SIP pursuant to the Federal Clean Air Act, 

### 5 110, codified at 42 U.S. Code Ann. $$7410

### - 7671q, as amended. This Order constitutes the Order of the Cominission required by the Administrative Procedure Act, Tex. Gov't Code, $ 

### 2001.033. If any portion of this Order is for any reason held to be invalid by a court of competentjurisdiction, the invalidity of any portion shall not affect the validity of the remaining portions.

Date issued: 

# SEP 

# 2 (1 

# 2006 TEXAS COMMISSION ON ENVIRONMEmAL QUALITYber printed in bold face type. The insurer may provide an e-mail address or web address printed in bold face type. The notice must be attached to, or printed on the reverse side of, a copy ofthe Insurance Code §§1952.301

## - 1952.307. The written noticemustreadas follows: Figure: 28 TAC §5.501(h) (i) The verbal notice at a minimum must consist of the following: BY LAW, YOU HAVE THE RIGHT TO SELECT WHERE YOUR MOTOR VEHICLE IS REPAIRED AND THE PARTS USED FOR REPAIRS. HOWEVER,AN INSURANCECOMPANY IS NOT REQUlRED TO PAY MORE THAN A REASONABLE AMOUNT FOR SUCH REPAIRS AND PARTS. YOUR RIGHTS CONCERNING MOTOR VEHICLE REPAIRS ARE EXPLAINED IN THE INSURANCE CODE §§1952.301 

### - 1952.307, A COPY OF WHICH WILL BE MAILED TO YOU WITHIN 15 BUSINESS DAYS. IF YOU HAVE ANY QUESTIONS ABOUT YOUR MOTOR VEHICLE REPAIR RIGHTS, CONTACT THE TEXAS DEPARTMENT OF INSURANCE AT 1-800-252-3439. (i) These amendmentsare effective April 1, 2007. Thisagency hereby certifiesthatthe adoption has been reviewed by legal counselandfound to be a valid exercise ofthe agency's legal authority. Filed with the Office of the Secretary of State on September22, 2006. TRD-200605250 Gene C. Jarmon General Counsel and Chief Clerk Texas Departmentof Insurance Effective date: October 12, 2006 Proposal publication date: June 23,2006 For further information, please call: (512)463-6327 

### TITLE 30. 

### ENVIRONMENTAL QUALITY 

### PART 1.

' 

### TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 

### 114. CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES SUBCHAPTER 

### K. MOBILE SOURCE II'JCEI'JTIVE

### PROGRAMS The Texas Commissionon EnvironmentalQuality (commission) adopts anlendments to 5114.620 and 5114.622. The commission also adopts new 5S114.624, 114.640, 114.642, 114.644, 114.646, and 114.648. The amendmentsand new sections are adopted without changes to the proposed text as published in the April 14,2006,issueofthe Texas Register(31TexReg 3187) and will not be republished. The amended 5114.620 and 5114.622 and new 55114.624, 114.640, 114.642, 114.644, 114.646, and 114.648 are adopted to be submitted to the United States Environmental Protection Agency (EPA) as revisions to the state implementation plan (SIP). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES House Bill (HB) 3469, 79th Legislature, 2005, added Chapter 390 to the Texas Health and Safety Code. This new chapter directs the commissionto establishand administer a clean school bus program within the financial limitsset by amended5386.051 and 5386.052 (HB 3469, 79th Legislature). 'This clean school bus program will fund efforts by school districts to improvethe health of children by reducing emissions of diesel exhaust from school buses. Reduction of emissions from diesel-powered school buseswill also benefit the public inozone nonattainment areas by reducing emissions of nitrogen oxides (NOx). The commission is adopting new 55114.640, 114.642, 114.644, 114.646, and 114.648 to establish this program. Under these sections, school districts,charter schools, and regional planning organizations would beeligible for reimbursement grants for the use of emissions reducing catalysts, particulatefilters, qualifying fuels, and other emissions reducing add-on equipment or technology that the commission finds will reduce emissions. House Bill 2481, 79th Legislature, 2005, added 5386.117 to the Health and Safety Code to add a rebate grant program under the Texas Emissions Reduction Plan (TERP). New 5114.624 is adopted to implement this program. The rebate grant will streamline the grant application process for some applicants and will ease the administrative burden on the agency. Amendmentsto 5114.622will clarifythat for replacementand repower projects, the baseline vehicle,equipment, or engine must be scrapped or permanently removed from the State of Texas. Amendments to 5114,620 and 5114.622 create an option for the commissionto use an equivalent measuretothe current$13,000 per ton cost effectiveness standard or an alternative approved bythe commission. These amendments will improve TERP program effectiveness by ensuring that high-emitting engines cannotbereintroduced intoan affectedcounty and allowingthecommissionto increasethe emissions reductions created by grants. SECTION BY SECTION DISCUSSION The commission adopts administrative changes throughoutthis rulemakingto be consistent with guidance provided inthe Texas Legislative Council Drafting Manual, November 2004, and to conform with Texas Register requirements and agency guidelines. The adopted amendment to 5114.620 modifies the definition of "Cost-effectiveness" to clarify how the cost-effectiveness of TERP grant applications will be determined. The adopted amendment to 5114.622 clarifies that, for grants entailing replacement or repower of an engine or other equipment, the original equipment must be permanently removed from the State of Texas. The adopted amendment to 5114.622 also clarifies that the commission may establish cost-effectiveness standards lowerthan the statutory$13,000 per ton and that the commission may also make project selection decisions on a variety of factors in addition to costeffectiveness. Adopted new 5114.624, Rebate Grant Process, establishes a processthat awardsTERP funds as a rebate. This new process would provide for ongoing, first-come, first-served awarding of standardized rebates for designated project types. Itwould create a simple, streamlined process to award TERP funds. Amended 5114.620 and 5114.622 and new 5114.624 are also adopted to be submittedto the EPA as revisionsto the SIP. Adopted new 5114.640, Definitions, provides definitions for the Texas Clean School Bus Program. This section provides definitions for important terms in the proposed new division.



### ADOPTED RULES October 6,2006 31 

### ~ex~e~ 8375Adopted new 9114.642, Applicability, establishes program eligibility for school districts and charter schools. This section also allows regional planningorganizations, such as councilsof government, and private nonprofit organizations to apply for and receive grantsto improve the program. Adopted new 5114.644, Clean School Bus Program Requirements, establishes basic program requirements, including: the types of projects eligible for a clean school bus grant; the ability of the commission to limit or prioritize funding for the Texas Clean School Bus Program; the minimum useful lifeof a project under the grant program;a requirementthat replaced equipment be permanently removedfrom the State of Texas; restrictingthe use of grant funds to pay incremental costs associated with the project and prohibitionagainst usingthe grantfor administrative expenses; prohibition against recipients using grant funding to meet federal or state legal requirements and using emissions reductions as part of an emissions banking or trading program; grant application requirements;and obligation of the grant recipientto returngrant funds ifthey fail to meet theterms of a project grant or conditions of the proposed division. Adopted new 5114.646, Monitoring, Recordkeeping, and Reporting Requirements,establishes that grant recipientsmustadhereto the reporting requirements of their grant, whichwill occur no less frequently than annually. Adopted new 5114.648, Implementation Schedule, establishes that the Texas Clean School Bus program will expire on August 31, 2013. New 55114.640, 114.642, 114.644, 114.646, and 114.648 are also adoptedto be submitted to the EPA as revisionsto the SIP. FINAL REGLILATORY IMPACTANALYSIS DETERMINATION The commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, 52001.0225, and determined that this rule action is not subject to 52001.0025 because it does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposureand that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The adopted amendments to Chapter 114 modify the existing rules in accordance with House Bill 3469, 79th Legislature, which amended Texas Health and Safety Code, 5386.051(b) and added Texas Health and Safety Code, Chapter 390 to requirethe commissionto establish a Clean School Bus Program. The Clean School Bus Program is intended to reduce diesel exhaust emissions from school buses by funding eligible projects. The adopted rule amendments are part of a voluntary incentive programwith the goal of reducing dieselemissions and as such, the adopted rules will not adversely affect in a materialway the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Further,the adopted amendmentsto Chapter 114 modify the existing rules in accordance with House Bill 2481, 79th Legislature, which amended Chapter 386, Subchapter C of the Texas Health and Safety Code by adding 5386.117, directing the commissionto adopt a processto award grants in theform of rebates to streamlinethe grant application, contracting, reimbursement, and reporting processes for certain projects under the TERP. These ruleamendmentswill implement procedural changesand will have no effect on the environmentor human health. These rule amendments are part of a voluntary incentive program with the goal of reducing diesel emissionsand as such, the adopted rules will not adversely affect in a materialway the economy, a sector of the economy, productivity, competition,jobs, the environment, or the public health and safety of the state or a sector of the state. In addition, a regulatory impact analysis is not required because the adopted rulesdo not meetany of the four applicability criteria for requiring a regulatory analysis of a "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rulesolely underthe general powers of the agency instead of under a specific state law. This rulemaking does not exceed a standard set by federal law, and the adopted technical requirements are consistent with applicable federal standards. In addition, this rulemaking does not exceed an express requirement of state law and is not adopted solely under the general powers of the agency, but is specifically authorized by the provisions cited in the STATUTORY AUTHORITY section of this preamble. Finally, this rulemaking does not exceed a requirement of a delegation agreement or contractto implementa state and federal program. The commission invited public comment on the draft regulatory impact analysis determinationduring the public comment period that ended May 16, 2006. No comments were received on the draft regulatory impact analysis. TAKINGS IMPACTASSESSMENT The commission evaluatedthis rulemakingactionand performed an analysis of whether the adopted rules are subject to Texas Government Code, Chapter 2007. The primary purpose of the rulemaking is to amend Chapter 114 in accordance with House Bill3469 and House Bill2481. These amendments implement a voluntary programand only affect motorvehicles and equipment which are not considered to be private real property. Therefore, promulgation and enforcement of these adopted rules are neither a statutory nor a constitutional taking because they do not affect private real property. Therefore, these rules do not constitute a taking under Texas Government Code, Chapter 2007. CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM The commission reviewed the adopted rulemaking and found that the rulemaking is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, 5533.201 et seq.,and therefore must be consistentwith all applicable CMP goals and policies. The commission conducted a consistency determination for the adopted rules in accordancewith Coastal Coordination Act lmplementation Rules, 31 TAC 5505.22, and found the adopted rulemaking is consistent with the applicableCMP goals and policies. The applicable goal of the CMP is to protect, preserve, restore, and enhance the diversity, quality, quantity, functions, and val

### 31 TexReg

### 8376 October 6,2006 TexasRegisterues of coastal natural resource areas. The specific CMP policy applicable to these rules is that commission rules comply with 40 Code of Federal Regulations (CFR), to protect and enhance air quality in coastal natural resource areas (31 TAC S501.32). The commission reviewed this adopted rulemaking for consistency with the Texas CMP goals and policiesinaccordance with the regulations of the Coastal Coordination Council and determined that the amendmentsare consistent with CMP goals and policies because this rulemaking action would reduce air pollution from diesel-powered school buses. No new sources of air contaminants are authorized and nitrogen oxides and particulate air emissions would be reduced as a result of these rules. This adopted rulemaking complies with 40 CFR Part 51. This adopted action is part of the control strategy for ozone nonattainment areas in accordancewith SIP requirements in 40 CFR Part 51 and reduces emissions of particulate matter consistent with National Ambient Air Quality Standards set for particulate matter in 40 CFR Part 50. Promulgation and enforcement of these rules will not violate or exceedany standards identified in theapplicable CMP goals and policies because the adopted rules are consistent with these CMP goals and policies, because these rules do not create or have a direct or significant adverse effect on any coastal natural resource areas, and because the adopted rules will reduce emissions of air pollutants. Written comments on the consistency of this rulemaking were invited during the public comment periodwhich closed May 16, 2006. No comments were received on the consistency of this rulemakingwith the CMP. PUBLIC COMMENT A public hearing on the adopted ruleswas held in Austin on May 9, 2006, at 2:00 p.m. atthe Texas Commissionon Environmental Quality Complex. The publiccomment periodclosed May 16, 2006. Nocommentswere receivedat the public hearing,butthe commissiondid receivewritten comments fromthe Houston Regional Group of the Sierra Club (HSC), Environmental Defense (ED),the United States EnvironmentalProtection Agency (EPA), the Texas Center for Policy Studies (TCPS),and one individual generally supporting the proposed rules. RESPONSE TO COMMENTS The HSC supports provisions in §114.622(c) and §114.644(e) which require grant recipients for replacement or repower projects to permanently remove old engines or vehicles from Texas. The commission appreciatesthe support. Removingthese "old" vehicles or engines from use in Texas ensures that they cannot continue to pollute the air inTexas. The HSC does not support limiting the use of diesel oxidation catalysts and particulate filters to certain modelyears of school buses under §114.644(a)(I) and (2), but rather supports the widespread use of these pollution control devices. ED comments that these pollution control devices are verified by the U.S. EPA or certified by the California Air Resources Board for model years beyond those included in the Dr0~0sed rules. ED requirements set in the statute (Texas Health and Safety Code, 5390.002). The commission notes that §114.644(a)(5)allows the commission to approve "other technologies that the commissionfinds will bring about significant emissions reductions." This ability would allow the commission to fund a wide variety of emission-reducing projects. The commission did not revise the proposed rules as a result of this comment. The HSC supports reducing the requirementfor a project life of five years proposed under §114.644(d)to three years of useful life. The HSC wants installation of pollutioncontrol devicesto be as widespread as possible as quickly as possible. The commission appreciates this comment. The requirement for five years of useful life proposed under §114.644(d) reflects statutory requirements (Texas Health and Safety Code, §390.004(b)). State law and the proposed rule (§114.644(d)) also allowfor a pollutioncontrol device to be used on a particular school bus for a period less than five years if that pollutioncontroldevice is reinstalledon another school busfor the remainder of the requiredfive years. One individualcomments school buses are used year-round for a variety of activities such as class, special eventslfield trips, sporting events or othercompetitions, summer events, and after school programs. The commission acknowledges this comment. One individual comments school buses should be air-conditioned and filtered, similar to classrooms, in order to increase learning and protect the health of students,teachers, and other staff. The first step in protecting students and teachers from exposure to air pollution on school buses would be to require that all new school buses be air-conditioned and fitted with filters. The second step would be to establish a modification program for existing school buses so that standards for existing buses could be met as time and budget allow. Air-conditioning school buses is outside the scope of this rulemaking. The commissionagrees that reducingair pollutionfrom school buses would help protect the health of students, teachers, and other staff who work in our school systems. The EPA and ED comment that many studies have confirmed the detrimental effect of diesel exhaust on children's health and that they support the commission's efforts to establish a clean school bus program for the State of Texas. The commissionappreciates the support. The EPA comments that there are very few retrofits available that provide the substantial NOxreductionsfor which the TERP programwas established. It is improbable those retrofits would meet the $13,000 per ton cost effectiveness requirements used inthe TERP program. They comment making the clean school bus program a viable part of the TERP program could require some modificationsto the program. The EPA recommendsproposed §114.622(d) be revised to identify what the "additional measures" are in addition to, and that the commission provide guidance describing such additional measures and how theywill be considered. asks that the commission expand the range'of model years The commission notes while the TERP program and the Clean covered by the clean school bus program to match those for School Bus program share a similar method of finance,they are which there are verified technologies. two separate programs. The programs are authorized by sepThe commission appreciates these comments. The model arate chapters of the Texas Health and Safety Code. Furtheryear designations in s114,644(a)(1) and (2), 1994 for oxida- more, Texas statute and the commission's rules do not estabtion catalysts and 1994 to 1998 for particulate filters, reflect lish a specific cost effectiveness requirement for emissions re

### ADOPTED RULES October 6,2006 31 

### TexReg 8377duction projects under the Clean School Bus program. Section 114.622(d)does not apply to projects under the newly adopted Division4. The commission did not revise the proposed rules as requested. The EPA recommends the proposed definition of "Qualifying fuel" under S114.640 be modified by placing a comma after the word "bus" to indicate that the final "that" clause does not apply to school buses but insteadto the fuel. The commissionappreciatesthe EPA's comment. The definition included in the rule is the literal definition that was adopted into the Texas Healthand Safety Code by the 79th Legislature. The commission did not revise the proposed rules as suggested. The EPA comments additional documentation may be necessary if the clean school bus program is submitted as a SIP revision. More specifically, the EPA comments the commission should provide a demonstration of the adopted rules' consistency with Federal Clean Air Act, §110(1). The EPA also comments if the clean school bus program isto be approvable intothe SIP under the Economic lncentive Program, reductions must be surplus, quantifiable,enforceable, and permanent. The EPA requeststhe commission confirm that the adopted rule changes are consistent with Federal CleanAir Act, §I1 O(1) and with itsguidanceentitled "EPA's ImprovingAir Quality with Economic Incentive Programs" (Chapters4 and 8, January 2001). The EPA notes it has previously approvedthe TERP program under these conditions. Adopted rules for the Texas Clean School Bus Programare consistent with requirements of the Federal Clean Air Act, §110(1). Underthe EPA's guidance for economic incentive programs,the Texas Clean School Bus Program meets the requirements of a financial mechanismeconomic incentiveprogram. Although the Clean School Bus Program derives its funding from the same source, the program is separatefrom the TERP Emissions Reduction Inventive Grant Program. The primary requirements of the EPA guidance are: Surplus: UndertheClean School Bus Program an activitywill not be eligible if it is requiredby any state or federal law, regulation, memorandum of agreement, or other legally binding document. The program solicitation documents and grant instructions will outline additional restrictions and describe other eligible activities. Enforceable: The Clean School Bus program will require a review of each project funded. contracts will require achievement of the emission reductions over the designated project life. Emission reductions will be verified through reports on use of the grant-funded buses and on-site monitoring and audit visits. Contractswill contain provisionsthat allow the state to recapture grant money for the failure to comply with grant obligations. The reports.and monitoring activities will be used by TCEQ to track compliance and effectiveness of the grant recipients in fulfilling their obligations underthe contract. The TCEQ may, at any time, before or after reimbursement, request additionalevidence concerning costs. Quantifiable: Emissions reductions achieved through the Texas Clean School Bus Program will be quantified using a comparison of baseline NOxand particulate matter emissions with reduced NOx and particulatematter emissions. Engine emissions certifications and retrofitsystem verifications by the EPAwill be used to verify the emissions of the reduced-emissions engines and retrofit systems. Baseline emission rates for uncontrolled engines will be based on factors developed and used for SIP modeling purposes by the TCEQ. The Clean School Bus Program solicitation documents and grant instructionswill outline the approach for determining incremental costs, emission reductions,andcost-effectiveness. The application forms will require the applicant to provide data on the incremental costs of each activity, vehicle or equipment usage patterns, and informationaboutthe vehicleor equipment needed to determine emission rates. Emission factors, load factor, and usage pattern information will be used by the TCEQ to calculate emission reductionsattributedto an activity. The solicitation documents and grant instructions will contain informationon how to determine the level of NO, and particulate matter emissions for the baseline and the new vehicle and equipment. Using this information, the TCEQ will determine the emissions reductions and cost effectivenessof the project. For a project to be eligible for Clean School Bus Program funding,the emission rate of engines orthe emission reductionfactor for retrofit systems must be certified or verified under an applicable EPA certification or verification program. In accordance with agreements betweenthe EPA and CaliforniaAir Resources Board (CARB), CARB certificationor verification will also be accepted. In some cases, the TCEQ may also accept testing results under EPA,CARB, and/orTCEQ approvedtest protocolsto determine the emission rate or emission reduction factor. This approach will provide the most flexibility for the program while also restricting the evaluation process to those technologies or productsthat can provide documentation that will be acceptable to the EPA. Permanent: The TCEQ will establish minimum requirementsfor the life of a project,which will be at leastfive years. The project life will be the period in which the grant recipient is contractually obligated to monitor and report on the use of the grantfunded vehicle, equipment, andlor fuel. Environmental benefits from projects under the Clean School Bus Program will occur for at least this period. Emissions reductions achieved through this program are contractually and statutorily permanentfor the project life established in the grant contract and will be permanently retired. Emissions reductions from the Clean School Bus Programwill not be usable in an averaging, banking, or trading program. General Equity Principle and Environmental Justice Principle: TheTexas Clean School Bus Program is not a banking and trading programso programdisbenefik are not expected. BY design, this program reduces NO, and particulate matter emissions with a concentrationon cleaner diesel engines through economic incentives in the form of grants. Eligible projects include (but are not necessarily limited to) diesel oxidationcatalysts, diesel particulate filters, purchase and use of emission reducing add-on equipment,the use of qualifyingfuel, and other technologies that the commission finds will bring about significant emissions reductions. Penalty Provisions: Upon the performing party'sfailure to complywiththe requirementsof a Clean School Busgrant,the TCEQ may, at its own discretion, require that the performing party return or repay all or a portion of the reimbursement funds. Procedures for Public Disclosure of Information and Provisions for Addressing Uncertainty. Performing parties will maintain projectfinancial information and data used in the preparationor support of any request for reimbursement (direct and indirect) and copies of any cost information or analysis submitted to the TCEQ. The TCEQ, the Texas State Auditor's Office, or any of their authorized representatives will have access to all such books, records, documents, and other evidence for the



### 31 TexReg83

### 78 

### October 6, 2006 TexasRegisterpurpose of review, inspection, audit, excerpts, transcriptions, andlor copying during normal business hours. Furthermorethe performing party must agree to the disclosure of all information and reports resultingfrom access to records under the grant. Additionally, property records of grant equipment will be maintainedthat describe the usage, ownership, and any other details as outlined in the grant contract. All data and other information developed under the grant agreement will be furnished to the TCEQ and will be public information except to the extentthat it is exempted from public access by the Texas Public Information Act, Texas Government Code, Chapter 552. Safeguards will be establishedto monitor program funding and emission reductions. Applicants of Clean School Bus Program funding will be requiredto monitor the use of grant-funded vehicles, equipment, and fuel and to reportto the TCEQ for the life of each grant-fundedactivity. Grant recipients will be requiredto complete the project accordingto the time frames explained in the grant agreement. Adopted revisions to the TERP program rules in Division 3 are also consistentwith FederalCleanAir Act, §I1 O(1) and are being submitted to the EPA as a SIP revision. 'The adopted rules will serve to make the program more accessible and more cost-effective; thereby making the program more effective overall. As the EPA notes in its comment, the TERP program is already approved under federal guidelines for economic incentive programs and the revised rules will continue to meet federal guidance. ED generally supports the rule and comments that it is crucial to have basic rules in place for the Texas Clean School Bus Program so that the commission can proceed quickly to award grants when funding becomes available. The commission agrees and appreciates ED'ssupport. ED and TCPS comment while they generally support the rules as proposed, they would like to see the rules refined to "better reflectthe legislatively-stated goal of improvingthe 'micro-environment' in and around school buses." The commission contendsthe adoptedrulesfor the Texas Clean School Bus Program are consistentwith HB 3469. The adopted rules develop the basic framework of a clean school bus program. The program will be implementedwith a more comprehensive set of guidelines and requirements. ED supports new §114.640 and S114.642. ED notes certain school districts contract out some or all of their transportation services to private companies and suggests that the commission exploreways to ensure buses operated by third parties can participate in the Texas Clean School Bus program. The commission appreciates ED's support. HB 3469, as enacted, empowers the commission to issue grants only to school districts (including countywide school districts),charter schools, a regionalplanningcommission (orasimilar regionalagency created under Texas Government Code, Chapter 391), councils of government, and private nonprofit organizations. The commission is not aware of a way to include buses owned by private companies in the Texas Clean School Bus Program, but it does welcome further ideas from stakeholders as the program is implemented. ED and TCPS comment that proposed §114.644(b) is inconsistent with the statutory language of HB 3469 and should be removed. The commission contends proposed §114.644(b) is consistent with language in HB 3469 which gives the commission the authority to "establish criteria for setting priorities for projects eligible to receive grants under this chapter" (Texas Health and Safety Code, §390.004(a)). Setting program priorities will allow the commission to ensure that available funds are spent as effectively as possible. ED comments the commission should clarify what it means by "additional pollutants to be addressed" during a funding period (§114.644(c)). ED contends that such language is superfluous in light of the specific technologies enumerated in §I14.644(a). In order to spend available funds as effectively as possible, the commission wishes to have the ability to prioritize one or more pollutants over others if scientific evidence warrants such a priority. ED comments the clean school bus program should be made as simple as possiblefor school districts by expressly targeting grants to a small number of already verified technologies like those in §114.644(a). It believes administrative ease will attract participationfrom smaller school districts. The commission appreciates ED's suggestion. 

### DIVISION 3. 

### DIESEL EMISSIONS REDUCTION INCENTIVE PROGRAM FOR ON-ROAD AND NON-ROAD VEHICLES 30 TAC §§114.620, 114.622, 114.624 STATUTORY AUTHORITY The amendments and new sectionareadopted underTexas Water Code, S5.102,which provides the commission with the general powersto carry out its duties under the Texas Water Code; §5.103,which authorizesthe commissionto adoptany rules necessaryto carry out the powers and duties underthe provisions of the Texas Water Code and other laws of this state; and 55.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The amendments and newsection are also adopted underTexas Health and Safety Code,Texas Clean Air Act, S382.017,whichauthorizes the commissionto adopt rules consistent with the policy and purposes of the Texas CleanAir Act; §382.011, whichauthorizesthe commissionto establish the level of quality to be maintained in the state's air and to control the quality of the state's air; 5382.012, which authorizes the commissionto prepareand develop a general, comprehensive plan for the control of the state's air; and Chapter 386, which establishes the TERP. Finally, the amendments and new section are adopted as part of the implementation of House Bill 2481, 79th Legislature, 2005. The adopted amendments and new section implement Texas Clean Air Act, SS382.002, 382.011, 382.012, 382.017, 386.051, and House Bill2481, 79th Legislature, 2005. This agency hereby certifiesthatthe adoption has been reviewed by legal counseland foundto be a valid exercise ofthe agency's legal authority. Filed with the Office of the Secretary of State on September22, 2006. TRD-200605251



### ADCIPTED RULES October 6,2006 31 

### TexReg 8379Robert Martinez Director, Environmental Law Division Texas Commission on EnvironmentalQuality Effectivedate: October 12,2006 Proposal publication date: April 14,2006 For further information, please call: (512) 239-0177 

# + + + DIVISJON 4. 

### TEXAS CLEAN SCHOOL BUS PROGRAM 30 TAC #114.640, 114.642, 114.644, 114.646, 114.648 STATUTORY AUTHORITY The new sections are adopted underTexas Water Code, 55.102, which providesthe commission with the general powers to carry out its duties underthe Texas Water Code; 55.1 03, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and S5.105,which authorizes the commission by rule to establish and approve all general policy ofthe commission. The new sections are also adopted under Texas Health and Safety Code, Texas Clean Air Act, 5382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; 5382.011, which authorizes the commission to establish the level of quality to be maintained inthe state's air and to controlthe quality of the state's air; $382.012, which authorizes the commission to prepare and develop a general, comprehensiveplan for the control of the state's air; Chapter 386, which establishesthe TERP; and Chapter 390,which establishes the Clean School Bus Program. Finally, the new sections are adopted as part of the implementation of House Bill 3469, 79th Legislature,2005. The new sections implement Texas Clean Air Act, 55382.002, 382.011, 382.012, 382.017,386.051, and House Bill 3469, 79th Legislature, 2005. This agency herebycertifies that theadoptionhas been reviewed by legalcounsel and found to be a valid exerciseof the agency's legal authority. Filed with the Office ofthe Secretary of State on September 22, 2006. TRD-200605252 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: October 12, 2006 Proposal publication date: April 14, 2006 For further information, please call: (522) 239-0177


### CHAPTER 116. 

### CONTROL OF AIR POLLUTION BY PERMITS FOR NEW CONSTRUCTION OR MODIFJCATJON SUBCHAPTER

### F. STANDARD PERMITS 30 TAC 5116.603 The Texas Commission on Environmental Quality (agency or commission) adopts an amendment to 5116.603 without changes to the proposedtext as published in the May 12,2006, issue of the Texas Register (31 TexReg 3839), and will not be republished. The amended section will be submittedto the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULE The commission is adopting a revisionto §I16.603, Public Participationin Issuanceof Standard Permits,thatwill require newspaper notice of proposed standard permitswith statewide applicability in Austin, Dallas, Houston,and any other regional newspapers designated by the executive director on a case-by-case basis. Also, the executive director will use press releases and appropriate electronic means to inform state and local officials. Electronicmeans include, butare not limited to,the use of e-mail addresses,Web sites, or electronic bulletin boards and publications. This change will increase notification with state and local officials and providean opportunityfor more statewide newspaper coverage through commission press releases. Texas Health and Safety Code, 5382.05195(b), requires the commission to publish notice of a standard permit in one or more statewide or regional newspapers designated by rule that will, in the commission's judgement, provide reasonable notice throughout the state. The regulationin S116.603 required publication in 11 newspapers. Six standard permits have been issued under the requirements of 5116.603 and over 80% of the comments originated from the Austin, Dallas, and Houston areas. The amendmentwill also save up to $4,500 per standard permit notice at a time that an increase in the number of new standard permits may be expected. Publishing notice in Austin, Dallas, Houston, and any other regional newspapers designated by the executive director on a case-by-case basis, along with the required Texas Register publication and posting on the agency Web site will provide reasonable notice of proposed standard permits and will give the commission discretion to target the specific areas affected. The amendment makes the standard permit public notice more consistent with the agency's existing non-individual permit requirements. This includes the Water Quality General Permits, which require publication in at least one newspaperof statewide or regional circulation. Also, air standard permit amendments and revocations, permits by rule, and Title V general operating permits with statewide applicability are requiredto be published in newspapers in Austin, Dallas, and Houston. SECTION DISCUSSION The commission adopts an amendment to §116.603(a). The amendment requires newspaper notice of proposed standard permits with statewide applicability in Austin, Dallas, Houston, and any other regional newspapers designated by the executive director on a case-by-case basis. This allowsthe commissionto focus its efforts in areas most affected by standard permits. The commission will continue to post each draft standard permit on itsWeb site and conduct stakeholder meetings,as appropriate. The executive director will issue a press release and will publish notice in the Texas Register. The executive director may also use appropriate electronic means to notify selected state and local officials in the affected area. The rule no longer requires newspaper notice for each standard permit proposal in Amarillo,



### 31 TexReg 8380 October 6,2006 TexasRegister