Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., Executive Director 

## 10APR-2 PHI2:58
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Thxas byReducing andPreventing Pollution 

### March 25, 2010



### Dr. Alfredo Armendariz, Regional Administrator U.S. Environmental Protection Agency- Region 6 1445 Ross Avenue Dallas, Texas 75202'-2733 Dear Dr. Armendriz: Docket 

### No. 2009-1185-RUL Rule Project 

### No. 2009-047-114-EN



### On February 24, 2010, the Texas Commission on Environmental Quality (Commission) adopted revisions to the state implementation plan (SIP). · The Commission adopted new §§114.650-114.658 of 30 TAC Chapter 114, Control of 

### Air Pollution from Motor Vehicles, and corresponding revisions to the SIP. The adoption implements Senate Bill 1759, 8lst Legislature, 2009, Regular Session by adding**th~** 

### Texas Clean Fleet Program. This voluntary grant program is designed to 

### encourage eligible entities to replace diesel-powered vehicles with alternative fuel or hybrid vehicles. Enclosed are the proposed revision to the SIP, a public hearing certification, a complete record ofthe public hearing, and the accompanying order. I look forward to your expeditious approval ofthis SIP revision. Sincerely, '

# ~~ Chairman 

### BS/br Enclosures

cc: The Honorable Rick Perry, Governor ofTexas Mr. TobyBaker, Office ofBudget, Planning and Policy, Office ofthe Governor Mr. Mark R. 

### Vickery, P.G., Executive Director, Texas Commission on Environmental Quality

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.us

### TEXAS CoMMISSION oN ENVIRONMENTAL QuALITY

Docket 

### No. 2009-1185-RUL



### TilE STATE OF TEXAS 

### COUN1Y 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 February 24, 2009, pursuant to 40 Code ofFederal Regulations (C.F.R.) 

### § 51.104. I am the records administrator for the 

### Air Quality Division of the Texas Commission on Environmental Quality (Commission).

# +~~Quali~ Texas Commission on Environmental QualityTexas Commission on Environmental Quality Public Hearing November 16, 2009 Concerning Revisions to 30 TAC Chapter 114

Control of Air Pollution from Motor Vehicles Texas Clean Fleet Program Rule Project No. 2009-047-114-ENINTRODUCTION

The Texas Commission on Environmental Quality (commission) held a public hearing in Austin on November 16, 2009, to receive testimony regarding new sections to 30 TAC Chapter 114, Subchapter K, Division 5, Texas Clean Fleet Program. The new sections implement Senate Bil11759, 81st Legislature, 2009, Regular Session by adding the Texas Clean Fleet Program. This voluntary grant program is designed to encourage eligible entities to replace diesel-powered vehicles with alternative fuel or hybrid vehicles.

The comment period closed on November 23, 2009. All testimony and comments have been reviewed and seriously considered. This hearingrecord contains a complete record ofthe public hearing and is divided into the following four sections:

o Public Notification and Proposal

o Written and Oral Testimony

o Evaluation ofTestimony

o StaffRecommendations/Order

Additional copies ofthis hearing record are maintained in the TCEQ central office at 12100 Park 3 5 Circle, Austin, Texas 78753. For further information, please contact Steve Dayton at (512) 239-6824.

# 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 in the following newspapers on the date listed: Austin American-Statesman: October 9, 2009 Fort Worth Star- Telegram: October 9, 2009 Houston Chronicle: October 9, 2009 San Antonio Express-News: October 9, 2009

2. Publication of the proposed rules in the October 23, 2009, issue of the Texas Register (34 TexReg 7295).

3. Publication of the Notice of Public Hearing in the December 29, 2006, issue of the Texas Register(34 TexReg 7384).

4. Correspondence forwarding the notice of public hearings to the following officials and agencies: Speaker of the House Lieutenant Governor Alamo Area Council of Governments Capital Area Planning Council City ofAustin, Mayor's Office City of Dallas, Department of Environmental and Health Services City of Dallas, Department of Aviation City of El Paso, Environmental Services City of Fort Worth, Environmental Management Department City of Houston, Department of Health and Human ServicesEast Texas Council of Governments El Paso Metropolitan Planning Organization Federal Highway Administration Galveston County Health District Harris County Public Health and Environmental Services North Central Texas Council of Governments Houston-Galveston Area Council South East Texas Regional Planning Commission Texas Department of Transportation Travis County Judge Victoria Metropolitan Planning Organization Arkansas Department of Pollution Control and Ecology Louisiana Department of Environmental Quality New Mexico Environmental Department Oklahoma Department of Environmental Quality United States Environmental Protection Agency

### Example of Newspaper Classified Ad San Antonio 

### Express-News, 

### October 9, 2009

. NOTICE OF A 

### --l PUBUC HEARING ON PROPOSED NEW SECTIONS TO ·· 30 TAC CHAPTER

114ANI>TO THE STATE IMPLEMENTATION PLAN**-.The_T~Commission_Dil ~**  • Environmental Quality ·. · (commission) will. con- ;; duct a public hunng 11:1 ·;; receive tlstimony regard- ::. ins prOJ)QSed new sec- :; ·: .lions 11:1 3Q Texas Admin- ; .· istratlve Code (TA;j ' ·· 

# :**~=~·~Mo1Dr** 

# ·. ' Vehicles, and 11:1 the state • ·'**~** im_plementation**~I**an \, (Sll'). TileR new sections ,, are proposed undt!r the ;..:

### =~~~=-~, : 1382.017;**Texas~** ;::.

ment**Coile~** SubchaDter A 8, Chapter**~001;** and 40 ,;• ·.·Code or Fedl!lll 

### RT ;::**·~~~~..,:~;**

. mental Promction Agen- if .' r:y (!;PAl**~ulations** con- );
·. cemmg SIPs. · :-:

· .: Tile DnlDOSed l'lllemaking 

### b

would i[!)plement Senate .:. · BHI**l7~L** 8lst Le;lsla- ·:. ture, 2uw, Regular Ses· '

.



### .**~~~if/."g ~~**  

### :. vol!lll1af'Y**gns~** program '·'' Is designed to encourage ;, · eligible entities 11:1 re- [.'**j~=d~~~t:** ' fuel or hybrid vehides. ':': ' A public huring on this 

### :l

· I will be held in 7'!**'.~on** Nolll!mber 16,**~.:,** · 2009 It 2:00**~.m.** ln :>; • Building E, Room 201S It ,-;: 

# ;.**~:r=on~ ~'llj** **~~··**

Pm 35 Circle. The hul"'

.' ing wm be structured for '· the receipt of**ot~l** or : written comments.**~~ ~**  : lstmion begins 30 miit-. ' '

utes {1\io!: to the hearing. % i**=lvid~p= -~**  •**cal~** upan in order .ofJ,

.. registration. A**~me** limit ; • • lTliiY be es1;1blishlld til : ·: assure enough time is t

allow8d for ovary in·**~** · terested**~n** til speak. t ; There wftl be no open • ' discussion during the •• : hearing; '-ever, com- 1. ' mission staff members · will be availlible for di$- ·

. cussion 30 minutes prior ·;**~** 11:1 the

.hearing and**~II** •: • answer questions before**·~** ·. and attar tile hearing. ;

·· Persons plannil)9 1D at- -3

, tl!nd the hearing, who :·
, hM special communi- ,.

## t~~=.·=~**:~:~~=~~~.** 1 (512) 239-on9. Re-

. quests should be madeas :·•

,;far in advance es !lOt" ·:'. ;·1 Sible.

_ .'·Comments lTliiY be**~** :,, mlttld 11:1 Jessica Raw- :lings, MC 205, omce at ; Legal**S~rvices, "~:exas**  · CommisSion on Emironmental**Qual~.** RO. Box ' 13087, Austm, Texas

787ll·3087, or bxed 11:1**~(c~~-ma~** submitted at http:// wwwS.tceq.state.tx.us/ rules/ecomments. File size restrictions may applr 11:1 comments su1r m1tted through the 1 . eComments system. AI comments should raltr- ence Rule Proiect Nurn- :- ber 2009-047·114-J;N. ; The comment panod closes November 23,

. 2009. To viaw**rul~** please visit http://

.www.tceQ.state.tx.us/:nav/rules/propase_adopt.h_tml. For lui"' ther iilformatiOn or ques-
. ·tions concerning this · proposal,

## =ease Cllntact Stephen ,**Im~l~** · mentation rants Section at Sl2·23HII24

.Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., Executive Director 

### TEXAS CoMMISSION oN ENVIRONMENTAL QuALITY Protecting Texas byReducing andPreventing Pollution


### NOTICE OF A PUBUC HEARING ON PROPOSED NEW SECTIONS TO 30 TAC CHAPTER 114 AND TO THE STATE IMPLEMENTATION PLAN

The Texas Commission on Environmental Quality (commission) will conduct a public hearing to receive testimony regarding proposed new sections to 30 Texas Administrative Code (TAC) Chapter 114, Control ofAir Pollution from Motor Vehicles, and to the state implementation plan (SIP). These new sections are proposed under the requirements ofTexas Health and Safety Code, §382.017; Texas Government Code, Subchapter B, Chapter 2001; and 40 Code of Federal Regulations, §51.102, of the United States Environmental Protection Agency (EPA) regulations concerning SIPs. The proposed rulemaking would implement Senate Bill1759, 81st Legislature, 2009, Regular Session by adding the Texas Clean Fleet Program. This voluntary grant program is designed 

### to encourage eligible entities to replace diesel-powered vehicles with alternative fuel or hybrid vehicles. A public hearing on this proposal will be held 

### in Austin on November 16, 2009 at 2:00p.m. in Building E, Room 201S at the commission's central office located at 12100 Park 35 Circle. The hearing will 

### be structured for the receipt oforal or written comments. Registration 

### begins 30 minutes prior 

### to the hearing. Individuals may present oral statements when called upon in order of registration. A time limit may be established to assure enough time is allowed for every interested person 

### to speak. There will be no open discussion during the hearing; however, commission 

### staff members will 

### be available for discussion 30 minutes prior to the hearing and will answer questions before and after the hearing. Persons planning to attend the hearing, who have special communication or other accommodation needs, should contact Charlotte Horn, Office ofLegal Services at (512) 239-0779. Requests should be made as far in advance as possible. Comments may be submitted to Jessica Rawlings, MC 205, Office ofLegal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments may 

### be submitted at 

### http:llwww5.tceq.state.tx.uslru/eslecomments. File size restrictions may apply to comments submitted through the eComments system. All comments should reference Rule Project Number 2009-047-114-EN. The comment period closes November 23, 2009. To view rules, please visit 

### http://www.tceq.state.tx.uslnavlrules/propose

_adopt.html. For further information or questions concerning 

### this proposal, please contact Stephen Dayton, Implementation Grants Section at 

### 512-239-6824.

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.us
)11 J!!lvd 1111**rL'L\'t·l~** J 11;qwr**11.\JTJ~ ;,ll_\·-h,L~l'd**  111h

### ƇƇƇ Amanda Henry, (713) 767-3500; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas 77703-1830, (409) 898-3838. (28) COMPANY: Trinity Bay Conservation District; DOCKET NUMBER: 2009-0878-MWD-E; IDENTIFIER: RN102077393; LOCATION: Winnie, Chambers County; TYPE OF FACILITY: wastewater treatment; RULE VIOLATED: 30 TAC §305.125(1), TPDES Permit Number WQ0010851001, Ef fluent Limitations and Monitoring Requirements Number 1, and the Code, §26.121(a), by failing to comply with the permitted ef fluent limitations for ammonia nitrogen; PENALTY: $11,750; ENFORCEMENT COORDINATOR: Samuel Short, (512) 239-5363; REGIONAL OFFICE: 5425 Polk Avenue, Suite H, Houston, Texas 77023-1452, (713) 767-3500. (29) COMPANY: United States Department of the Army; DOCKET NUMBER: 2009-0553-EAQ-E; IDENTIFIER: RN101060101; LOCATION: San Antonio, Bexar County; TYPE OF FACILITY: trainingsites; RULE VIOLATED: 30 TAC §213.23(a)(1), by failing to obtain approval of a modification to an Edwards Aquifer Contributing Zone Plan; PENALTY: $1,507; ENFORCEMENT COORDINATOR: Lauren Smitherman, (512) 239-5223; REGIONAL OFFICE: 14250 Judson Road, San Antonio, Texas 78233-4480, (210) 490-3096. (30) COMPANY: Woden Independent School District; DOCKET NUMBER: 2009-0898-MWD-E; IDENTIFIER: RN102887213; LOCATION: Woden, Nacogdoches County; TYPE OF FACILITY: wastewater treatment; RULE VIOLATED: 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Special Provisions Number 8, by failing to prevent ponding or surfacing of the ef fluent; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Special Provisions Number 15, by failing to collect and submit for analysis annual soil samples for 2008; 30 TAC §305.125(1), TCEQ Permit Number WQ0014345001, Final Ef fluent Limitations and Monitoring Requirements A, and the Code, §26.121(a), by failing to comply with final ef

fluent limitations for biochemical oxygen demand concentration; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Monitoring Requirements Number 3.b and Special Provisions Number 17, by failing to maintain records of the inspection dates for the sludge in each of the septic tanks; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Monitoring Requirements Number 3.b, by failing to retain at the facility all records of monitoring; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Monitoring Requirements Number 3.b and Special Provisions Number 16, by failing to retain records of the analysis of the irrigation ef fluent; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001,Monitoring Requirements Number 3.b and Special Provisions Number 18, by failing to maintain records of sludge removal; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Special Provisions Number 20, by failing to maintain records of all grease removed from the grease trap; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Special Provisions Number 8, by failing to record grass harvesting dates and weights in a log book kept on site; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Permit Conditions Number 4.a and Special Provisions Number 5, by failing to submit a summary submittal letter within 90 days from the date of permit issuance; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Final Ef fluent Limitations and Monitoring Requirements Number B, by failing to monitor pH once per month; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Special Provisions Number 7, by failing to comply with the ef fluent application rate of 0.07 gallons per square foot per day; 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Monitoring Requirements Number 5, by failing to calibrate the ef fluent flow meter at least annually; and 30 TAC §305.125(1) and TCEQ Permit Number WQ0014345001, Monitoring Requirements Number 7.c, by failing to report in writing within five working days any ef fluent violation that exceeded the permitted limit by more than 40%; PENALTY: $14,225; ENFORCEMENT COORDINATOR: Merrilee Hupp, (512) 239-4490; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas 77703-1830, (409) 898-3838. TRD-200904608 Kathleen C. Decker Director, Litigation Division Texas Commission on Environmental Quality Filed: October 13, 2009 Notice of a Public Hearing on Proposed New Sections to 30 TAC Chapter 114 and to the State Implementation Plan The Texas Commission on Environmental Quality (commission) will conduct a public hearing to receive testimony regarding proposed newsections to 30 Texas Administrative Code (TAC) Chapter 114, Control of Air Pollution from Motor Vehicles, and to the state implementation plan (SIP). These new sections are proposed under the requirements of Texas Health and Safety Code, §382.017; Texas Government Code, Subchapter B, Chapter 2001; and 40 Code of Federal Regulations, §51.102, of the United States Environmental Protection Agency (EPA) regulations concerning SIPs. The proposed rulemaking would implement Senate Bill 1759, 81st Legislature, 2009, Regular Session by adding the Texas Clean Fleet Program. This voluntary grant program is designed to encourage eligible entities to replace diesel-powered vehicles with alternative fuel or hybrid vehicles. A public hearing on this proposal will be held in Austin on November 16, 2009 at 2:00 p.m. in Building E, Room 201S at the commission’s central of fice located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral or written comments. Registration begins 30 minutes prior to the hearing. Individuals may present oral statements when called upon in order of registration. A time limit may be established to assure enough time is allowed for every interested person to speak. There will be no open discussion during the hearing; however, commission staff members will be available for discussion 30 minutes prior to the hearing and will answer questions before and after the hearing.Persons planning to attend the hearing, who have special communication or other accommodation needs, should contact Charlotte Horn, Of

fice of Legal Services at (512) 239-0779. Requests should be made as far in advance as possible.Comments may be submitted to Jessica Rawlings, 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. Electronic comments may be submitted at http://www5.tceq.state.tx.us/rules/ecomments. File size restrictions may apply to comments submitted through the eComments system. All comments should reference Rule Project Number 2009-047-114-EN. The comment period closes November 23, 2009. To view rules, please visit http://www.tceq.state.tx.us/nav/rules/propose_adopt.html

. For further information or questions concerning this proposal, please contact Stephen Dayton, Implementation Grants Section at (512) 239-6824. TRD-200904553 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Filed: October 9, 2009


### 34 TexReg 7384 October 23, 2009 Texas Register

### ƇƇƇ (i) Criteria established in the guidelines, including revisions to the commission’s Texas Emissions Reduction Plan: Guidelines for Emissions Reduction Incentive Grants Pr ogram (RG-388), apply to theTexas Emissions Reduction Plan program. Notwithstanding the provisions of this chapter, as authorized under Texas Health and Safety Code, §386.053(d), revisions to the guidelines may include, among other changes, adding additional pollutants; adding stationary enginesor 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. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency’s legal authority to adopt. Filed with the Office of the Secretary of State on October 9, 2009. TRD-200904573 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Earliest possible date of adoption: November 22, 2009 For further information, please call: (512) 239-6090


### DIVISION 5. TEXAS CLEAN FLEET PROGRAM 30 TAC §§114.650 - 114.658 The Texas Commission on Environmental Quality (commission or agency) proposes new §§114.650 - 114.658. The new sections are proposed to be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan. BACKGROUND AND SUMMARY OF THE F ACTUAL BASIS FOR THE PROPOSED RULES Senate Bill 1759, 81st Legislature, 2009 amended the Texas Health and Safety Code by adding Chapter 391, Texas Clean Fleet Program. This program is designed to encourage eligible fleets to replace diesel vehicles with alternative fuel or hybrid vehicles. Eligible entities that replace 25 or more on-road diesel vehicles with alternative fuel or hybrid vehicles may apply for agrant under the program to offset the cost of replacing those vehicles. SECTION BY SECTION DISCUSSION §114.650, Defi nitions Section 114.650 establishes the definitions specific to the Texas Clean Fleet Program, as required by Texas Health and Safety Code, §391.001. §114.651, ApplicabilitySection 114.651 establishes the applicability requirements as required by Texas Health and Safety Code, §391.002. These requirements outline entities that are eligible to apply for a grant under the program. §114.652, Qualifying Vehicles As required by Texas Health and Safety Code, §391.003, this section clarifies the types of vehicles that are and are not eligible for participation in the program. §114.653, Grant EligibilitySection 114.653 establishes grant eligibility requirements, as required by Texas Health and Safety Code, §391.005. These requirements establish use and ownership criteria of any vehicles being replaced, as well as the level of emissions that must beachieved in order to receive a grant under the program. Subsection (d) provides that the executive director may establish additional criteria for purposes of prioritizing projects for selection, which may include, but are not limited to: nonattainment status of the primary location in which the eligible vehicles are used; or cost per ton benefits of the overall emissions being reduced. Thecommission is considering the establishment of prioritizing criteria that would limit the commission to initially considering only grant projects that include vehicles with a primary location in a county that is located within an eight-hour ozone nonattaiment area or a near nonattainment area that has submitted an early action compact plan. The commission seeks public comment on proposed rules regarding the grant eligibility requirements and whether to prioritize grant projects to the initial consideration of only grant projects in counties within nonattainment or near nonattainment areas. §114.654, Usage and Disposition As required by Texas Health and Safety Code, §391.005, this section outlines requirements regarding the use of new vehiclespurchased through the program, as well as the disposal of vehicles being replaced. §114.655, Grant Restrictions As required by Texas Health and Safety Code, §391.006, this section outlines the allowable use of grant funds awarded under the program. §114.656, Eligible Grant Amounts As required by Texas Health and Safety Code, §391.007, this section outlines the various eligible grant amounts allowed under the program based on the age and type of each vehicle being replaced. §114.657, Reporting Requirements Section 114.657 identifies the reporting requirements, as required by Texas Health and Safety Code, §391.005. §114.658, Implementation Schedule Section 114.658 identifies the expiration date of the program, as stated in Texas Health and Safety Code, §391.008. FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT Nina Chamness, Analyst, Strategic Planning and Assessment, has determined that, for the first five-year period the proposed rules are in effect, fiscal implications are anticipated for the agency as a result of administration or enforcement of theproposed rules. The agency will utilize available funding appropriated out of the Texas Emissions Reduction Plan (TERP) Account 5071 to implement the proposed rules. Other state agencies and local governments may experience cost savings as a result of the proposed rules if they are eligible to use the Texas Clean Fleet Program grant funds to replace diesel powered vehicles in their fleets with alternative fuel vehicles. Senate Bill 1759 requires the agency to create the Texas Clean Fleet Program using a portion of the funds appropriated in TERP Account 5071. The proposed rules would add a new division to


### PROPOSED RULES October 23, 2009 34 TexReg 729530 TAC Chapter 114 to outline the definitions and requirementsfor participation in the Texas Clean Fleet Program, which is voluntary. The Texas Clean Fleet Program would be a new type of incentive grant in the overall TERP incentive grant program, and five percent of funding for the diesel emissions reduction incentive program would be allocated to the Texas Clean FleetProgram. To be eligible for grant funding, an entity would be required to have a fleet of at least 100 vehicles, 25 of which are diesel powered and meet other grant criteria for replacement. Grant amounts range from 80% of the cost for replacement of a heavy-duty vehicle to 60% of the cost for replacement of a light-duty diesel vehicle. The agency has been appropriated approximately $6.8 million in fiscal year 2010 and $5.2 million in fiscal year 2011 for the Texas Clean Fleet Program. The cost for alternative fuel vehicles is estimated to range from $20,000 to $150,000. State agencies or local governments with fleets and vehicles that meet the criteria for the Texas Clean Fleet Program grant may experience cost benefits if they qualify to receive grant funds to purchase alternative fuel vehicles to replace diesel vehicles. Applying for a grant from the Texas Clean Fleet Program would be voluntary, and it is not known at this time how many state agencies or local governments would do so. PUBLIC BENEFITS AND COSTS Nina Chamness also determined that for each year of the first five years the proposed new rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be improved air quality statewide since there will be additional opportunities to apply for grant funds to replace diesel vehicles with alternative fuel options that have fewer emissions. Businesses with fleets and vehicles that meet the criteria for theTexas Clean Fleet Program grant may experience cost benefits if they qualify to receive grant funds to purchase alternative fuel vehicles to replace diesel vehicles. Applying for a grant from the Texas Clean Fleet Program would be voluntary and it is not known at this time how many businesses would do so. Grant amounts range from 80% of the cost for replacement of a heavy-duty diesel vehicle to 60% of the cost for replacement of a light-duty diesel vehicle. The agency has been appropriated approximately $6.8 million in fiscal year 2010 and $5.2 million in fiscal year 2011 for the Texas Clean Fleet Program. The cost for alternative fuel vehicles is estimated to range from $20,000 to $150,000. SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rules. It is not expected that most small businesses will meet the criteria to qualify for the Texas Clean Fleet Program. However, if a small businessdoes qualify for a Texas Clean Fleet Program grant, it would experience the same cost benefits as a large business under the proposed rules. SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not required, because the proposed rules are required to comply with state law and do not adversely affect a small or micro-business in a material way for the first five years that the proposed rules are in effect. LOCAL EMPLOYMENT IMPACT STATEMENT The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required, because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect. DRAFT REGULATORY IMPACT ANALYSIS DETERMINATIONThe commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined that this rule action is not subject to §2001.0225, 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 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 new Chapter 114 rules are proposed in accordance with Senate Bill 1759, which added Texas Health and Safety Code,Chapter 391. The proposed rules add a new voluntary incentive program with the goal of reducing diesel emissions. The program offers financial incentives for the voluntary replacementof diesel engines. Because the proposed rules place no involuntary requirements on the regulated community, the proposed rules will not adversely affect in a material way the economy, asector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Also, none of the proposed rules place additional financial burdens on the regulated community. In addition, a regulatory impact analysis is not required because the proposed 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. Texas Government Code, §2001.0225 applies only to a major environmentalrule 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 by federal law. In addition, this rulemaking does not exceed an express requirement of 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 ofthis 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. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the SUBMITTAL OF COMMENTS section of this preamble. TAKINGS IMPACT ASSESSMENT 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 Senate Bill 1759. The new rules implement a voluntary program and 

### 34 TexReg 7296 October 23, 2009 Texas Registeronly affect motor vehicles, which are not considered to be private real property. Therefore, promulgation and enforcement of the proposed rules is neither a statutory nor a constitutional taking because it does not affect private real property. Therefore, the 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 the proposal is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2), concerning Actions and Rules Subject to the Coastal Management Program (CMP), and will, therefore, require that the goals and policies of the CMP be considered during the rulemaking process.The commission reviewed this action for consistency and determined that the rulemaking for Chapter 114 does not impact any CMP goals or policies, because it adds a voluntary incentive grant program and does not govern air pollution emissions. 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 The commission will hold a public hearing on this proposal in Austin on November 16, 2009 at 2:00 p.m. in Building E, Room 201S at the commission’s central office located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present oralstatements when called upon in order of registration. Open discussion will not be permitted during the hearing; however, commission staff members 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 Charlotte Horn, Office of Legal Services at (512) 239-0779. Requests should be made as far in advance as possible. SUBMITTAL OF COMMENTS Written comments may be submitted to Jessica Rawlings, 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. Electronic comments may be submitted at: http: //www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2009-047-114-EN. The comment periodcloses on November 23, 2009. Copies of the proposed rulemaking can be obtained from the commission’s Web site at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html. Forfurther information, please contact Stephen Dayton, Implementation Grants Section, (512) 239-6824. STATUTORY AUTHORITY These new rules 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; 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 Texas Water Code, §5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. These new rules are also proposed under Texas Health and Safety Code, Texas Clean Air Act, §382.017, which authorizesthe commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; Texas Health and Safety Code, 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; and Texas Health and Safety Code, Texas Clean Air Act, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state’s air. Finally, the proposed new rules are specifically authorized by Senate Bill 1759. The proposed new rules implement Texas Health and Safety Code, Chapter 391. §114.650. De finitions. 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 §§3.2, 101.1, and 114.1 of this title (relating to Definitions), the following words and terms, when used in this division will have the following meanings, unless the context clearly indicates otherwise. (1) Alternative fuel--A fuel, other than gasoline or diesel fuel, including electricity, compressed natural gas, liquefied natural gas, hydrogen, propane, or a mixture of fuels containing at least 85% methanol by volume. (2) Eligible entity--Any person or entity with a fleet of 100 or more vehicles that: (A) are registered in Texas; and(B) include at least 25 vehicles that are eligible for replacement.(3) Golf cart--A motor vehicle designed by the manufacturer primarily for transporting persons on a golf course. (4) Heavy-duty vehicle--A motor vehicle with a gross vehicle weight rating greater than 8,500 pounds and containing an engine certified to the United States Environmental Protection Agency’s heavy-duty engine standards. (5) Hybrid vehicle--A motor vehicle with at least two different energy converters and two different energy storage systems on board the vehicle for the purpose of propelling the vehicle. (6) Light-duty motor vehicle--A motor vehicle with a gross vehicle weight rating of less than 10,000 pounds and certified to the United States Environmental Protection Agency’s light-duty vehicle emission standards. (7) Motor vehicle--A self-propelled device designed for transporting persons or property on a public highway that is required to be registered under Texas Transportation Code, Chapter 502. (8) Neighborhood electric vehicle--A motor vehicle that: (A) is originally manufactured to meet, and does meet,the equipment requirements and safety standards established for "lowspeed vehicles" in Federal Motor Vehicle Safety Standard No. 500 (49 Code of Federal Regulations §571.500); (B) is a slow-moving vehicle, as defined by Texas Transportation Code, §547.001 that is able to attain a speed of more than 20 miles per hour but not more than 25 miles per hour in one mile on a paved, level surface; (C) is a four-wheeled motor vehicle;



### PROPOSED RULES October 23, 2009 34 TexReg 7297(D) is powered by electricity or alternative power sources; (E) has a gross vehicle weight rating of less than 3,000 pounds; and (F) is not a golf cart. (9) Program--The Texas Clean Fleet Program established under this division. §114.651. Applicability. (a) Any eligible entity that will replace 25 or more on-road diesel vehicles within a twelve-month period with qualifying vehicles may apply for a grant under the Texas Clean Fleet Program to offset the cost of replacing those vehicles with alternative fuel or hybrid vehicles. (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 organization to apply for and receive a grant to improve the ability of the program to achieve its goals. §114.652. Qualifying Vehicles. (a) A qualifying vehicle is one that: (1) is certified to current federal emissions standards; (2) replaces a diesel-powered on-road vehicle of the same weight classification and use; and (3) is a hybrid vehicle or fueled by an alternative fuel. (b) As a condition of receiving a grant the qualifying vehicle must be continuously owned, registered, and operated in Texas by the grant recipient for at least five years from the date of reimbursement of the grant-funded expenses. (c) A vehicle is not a qualifying vehicle if it: (1) is a neighborhood electric vehicle; (2) has been used as a qualifying vehicle to qualify for a grant under this division for a previous reporting period or by another entity; or (3) has qualified for a similar grant or tax credit in another jurisdiction. §114.653. Grant Eligibility. (a) To be eligible for a grant under the program a project must result in a reduction in emissions of nitrogen oxides of at least 25%, based on: (1) the baseline emission level set by the executive director; and (2) the certified emission rate of the new vehicle or engine. (b) The vehicle being replaced must: (1) be an on-road vehicle that has been owned, registered, and operated by the applicant in Texas for at least the two years immediately preceding the submission of a grant application; (2) satisfy any minimum average annual mileage or fuel usage requirements established by the executive director; (3) satisfy any minimum percentage of annual usage requirements established by the executive director; and(4) be in operating condition with at least two years of remaining useful life, as determined in accordance with criteria established by the executive director. (c) At the discretion of the executive director, projects that result in a 25% reduction in other pollutants may be considered eligible for funding under this program. (d) The executive director may establish additional criteria forpurposes of prioritizing projects for selection. Such criteria may include, but are not limited to: (1) nonattainment status of the primary location in which the eligible vehicles are used; or (2) cost per ton benefits of the overall emissions being reduced. §114.654. Usage and Disposition.(a) Not less than 75% of the annual use of the qualifying vehicle, either mileage or fuel use as determined by the executive director, must occur in Texas. (b) A vehicle or engine replaced under this program must berendered permanently inoperable in accordance with criteria established by the executive director. §114.655. Grant Restrictions. A recipient of a grant under this division shall use the grant to pay the costs of the project for which the grant is made, which may include the initial cost of the alternative f uel or hybrid vehicle. The recipient shall not use the grant to pay the recipient’s administrative expenses. §114.656. Eligible Grant Amounts.(a) The eligible grant amount for each heavy-duty on-road vehicle being replaced is determined as follows: (1) 80% of the cost for replacement of a vehicle that: (A) was manufactured prior to implementation of federal or California emission standards; and (B) is not certified to meet a specific emission level byeither the United States Environmental Protection Agency or the California Air Resources Board; (2) 70% of the cost for replacement of a vehicle with an engine certified to meet 1990 through 1997 federal emission standards; (3) 60% of the cost for replacement of a vehicle with an engine certified to meet 1998 through 2003 federal emission standards; and (4) 50% of the cost for replacement of a vehicle with an engine certified to meet 2004 and later federal emission standards.(b) The eligible grant amount for each light-duty on-road vehicle being replaced is determined as follows: (1) 80% of the cost for replacement of a light-duty diesel vehicle that: (A) was manufactured prior to the implementation of certification requirements; and (B) is not certified to meet either mandatory or voluntary emission certification standards; (2) 70% of the cost for replacement of a light-duty diesel vehicle certified to meet federal Tier 1 emission standards phased in between 1994 and 1997; and (3) 60% of the cost for replacement of a light-duty diesel vehicle certified to meet federal Tier 2 emission standards phased in between 2004 and 2009.


### 34 TexReg 7298 October 23, 2009 Texas Register

### ƇƇƇ(c) The executive director may revise the standards for determining grant amounts as needed to reflect changes to federal emission standards and decisions on pollutants of concern. §114.657. Reporting Requirements. Grant recipients must meet the reporting requirements of their grant, which must occur no less frequently than annually. §114.658. Implementation Schedule. This division expires on August 31, 2017. This agency hereby certifies that the proposal has been reviewedby legal counsel and found to be within the agency’s legal authority to adopt. Filed with the Office of the Secretary of State on October 9, 2009. TRD-200904552 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Earliest possible date of adoption: November 22, 2009 For further information, please call: (512) 239-0177


### CHAPTER 290. PUBLIC DRINKING WATER SUBCHAPTER G. WATER SAVING PERFORMANCE STANDARDS The Texas Commission on Environmental Quality (TCEQ, agency, or commission) proposes new §290.267, amendments to §§290.251 - 290.254, 290.256, and 290.260, and the repeal of §290.255. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES In 2009, the 81st Legislature passed House Bill (HB) 2667, relating to performance standards for plumbing fixtures sold in this state. HB 2667 amends Texas Health and Safety Code (THSC), §372.001 and §372.002 to increase efficiency standards, add performance, labeling, and testing requirements, add exemptions, add a five-year phase-in of new standards, and repeal TCEQ labeling and fee requirements for plumbing fixtures sold in this state. HB 2667 adds THSC, §§372.0025, 372.0045, and 372.006 to add exceptions for municipalities or counties, a phase-in of water saving performance standards, and performance standards for nonwater-supplied urinals, respectively. HB 2667 amends Texas Water Code, §5.701(q) to remove the commission’s authority to collect fees for testing a product to ensure that the certification is accurate. In a corresponding rulemaking published in this issue of the Texas Register, the commission proposes to also amend 30 TAC Chapter 291, Utility Regulations. SECTION BY SECTION DISCUSSION §290.251. Purpose, Authority, and Defi nitions. The commission proposes to amend §290.251 to revise defi
nitions for various plumbing fixtures relating to the subchapter. Terms to be revised are plumbing fixture and toilet. Terms to be added are plumbing fixture fitting, pressurized flushing device, and water closet. The term "ASME" is proposed to be deleted, as this acronym is no longer used throughout the subchapter, and the term "ASTM" is proposed to be deleted, as this organization is currently known only as ASTM International. As a result of the additions and deletions, some existing definitions are proposed to be renumbered accordingly. This amendment is required by THSC, §372.001, as amended by HB 2667. §290.252. Design Standards. The commission proposes to amend §290.252 to include new performance standards and revise testing requirements for plumbing fixtures. A reference to testing standards established by the American National Standards Institute is removed. All references to testing procedures adopted by the commission for plumbing fixtures are removed. Performance, testing, and labeling requirements for plumbing fixtures prescribed by American Society of Mechanical Engineers Standard A112.19.2-2008 and Canadian Standards Association Standard B45.1-2008 are added. Performance standards for nonwater-supplied urinals are also added. This amendment is required by THSC, §372.002, as amended by HB 2667. §290.253. Plumbing Fixture List. The commission proposes to amend §290.253 to change the process of providing test results for plumbing fixtures to the commission. All references to testing by the commission and fees were removed by the statute and therefore are removed from this section. This amendment is required by THSC, §372.002, as amended by HB 2667. §290.254. Removal from List.The commission proposes to amend §290.254 to remove the references to the commission charging fees, which was removed by the statute. The commission proposes to replace a reference to "the department" with "the agency." As a result of the removals, paragraphs are renumbered accordingly. This amendment is required by THSC, §372.002, as amended by HB 2667. §290.255. Fees. The commission proposes to repeal §290.255, concerning fees charged by the commission. This repeal is required because THSC, §372.002(d) is repealed by HB 2667. §290.256. Exemptions. The commission proposes to amend §290.256 to add additional exemptions for municipalities and counties that have situations that would require a greater quantity of water, nonwater-supplied urinals, and plumbing fixtures certified by the United States Environmental Protection Agency (EPA) under the WaterSense program. This amendment is required by THSC, §372.0025, as amended by HB 2667. The commission proposes to amend §290.256 to add additional exemptions for heavy-duty commercial urinals, and toilets that are mounted on the wall and discharge to the drainage system on the floor, are located in a correctional facility, are used in a bariatric application, are used by children at a daycare, or consist of a non-tank type commercial bowl connected to the plumbing system through a pressurized device. As a result of these additions, existing subsection (b) is relettered accordingly. This amendment is required by THSC, §372.002, as amended by HB 2667. §290.260. Labeling. The commission proposes to amend §290.260 to remove the TCEQ’s labeling requirements for plumbing fixtures. This repeal is required because THSC, §372.003(a) and (b), concerning labeling requirements, are repealed by HB 2667. As a result of these deletions, the remaining subsections are relettered accordingly.


### PROPOSED RULES October 23, 2009 34 TexReg 7299

# WRITTEN AND ORAL TESTIMONYINDEX OF WRITTEN TESTIMONY

Reference Number Submitted 

### By

No written testimony was received pertaining to this proposal.

### INDEX OF ORAL TESTIMONY

Reference Number Submitted 

### By 0-1 

### Ken Nicholson, Clean Energy

### PUBLIC HEARING BY THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ON PROPOSED REVISIONS TO 30 TAC CHAPTER 114, AND TO THE STATE IMPLEMENTATION PLAN

******************************************************* TEXAS COMMISSION ON ENVIRONMENTAL QUALITY PUBLIC HEARING NOVEMBER 16, 2009************•*******************************~~ ~** ***** 

### BE IT REMEMBERED that the**above~enti~led** 

### hearing came on the 16th day of November 2009, from 2:00p.m. to 2:11p.m. at the Texas**Com~is~i6~** 

### on Environmental Quality, Public Meeting Room 201, 12100 Park 35 Circle, BUilding E, Austin, Texas, and the. following proceedings were reported by me, Rebecca J. Callow, Certified Shorthand Reporter in and for the State of Texas.



# a record of excellence

1801 Lavaca • Suite 115 • Austin, Texas 78701 • 512-474-22331 

### P R 0 C E E D I N G S 2 

### MONDAY, NOVEMBER 16, 2009 3 

### (2:00p.m.) 4 

### MS. RAWLINGS: Good afternoon. I would 5 like to welcome everyone to this public hearihg being 6 conducted by the Texas Commission on**En~ironmental** 

### 7 Quality. My name is Jessica Rawlings, and I am**~ith** 

### 8 the General Law Division. ·I would also like to 9 introduce Steve Dayton from our Impl.ement·atioh Grarit · 10 Section. 11 We are here this aftern6bn to receive 12 oral and/or written comments on**th~** 

### propdsed new 13 sections to 30 fAC, Chapter 114, Control 6f**~ir** 

### 14 Pollution from Motor Vehicles, TCEQ Rule· Project 15 Number 2009-047-114-EN. If you intend· to present**or~l**

. . . . . . 

### 16 testimony, and you have not already signed**i~ ~t**  

### · 6ur. 17 registration table, please do that now.**~f** 

### you are 18 not familiar with the proposed changesj**copi~~** 

### of the 19 proposal from the Texas Register are**a~ailable** 

### at the 2 0 registration table. We also have copies of the 21 hearing notice, so that if anyone is planning to 22 submit written comments, you can quickly find the 23 information on where to fax or mail those. You can 24 also submit comments via eComments. We will continue 25 to accept written comments until Monday, November

KENNEDY REPORTING SERVICE, INC. 512.474.2233 21 

### 23rd. 2 

### This hearing is structured strictly for receipt 3 of oral or written comments, open discussion during 4 

### the hearing is not allowed; however, if anyone had any 5 

### additional questions or comments regarding this 6 

### proposal, there will be another**opportuni~y** 

### after**th~** 7 

### hearing to have your questions answered. 8 

### We will n6w begiti**~eceiving** 

### testimorty in the
9 

### order in which you registered. Once I call your name, 10 

### please come up to the podium, state your name arid who. 11 

### you represent, then present**you~** 

### testimony. 12 

### Ken Nicholson. 13

## ***~***************************************~********~* 14 

### PUBLIC COMMENTS 15 

## ******************************************************·. 16 

### MR. NICHOLSON: Good afternoon.**~-~** . y 17 

### name is Ken Nicholson with Clean Energy. I'm 

# a: 18 

### general manager of Central United States for Clean 19 

### Energy based iii Seal Beach, California. .Clean Energy 20 

### is the largest natural gas fuel provider for 21 

### transportation in the country 

# -- 22 

### MR. DAYTON: We are recording, and your 23 mic is not on. 24 

### MR. NICHOLSON: Do you want me to start 25 

### over?

KENNEDY REPORTING SERVICE, INC. 512.474.2233 31 

### MR. DAYTON: At least your·name for the 2 record. 3 

### MR. NICHOLSON: Okay. 

### My**~arne** 

### is Ken 4 Nicholson, general manager, Central United States for 5 Clean Energy. Clean Energy is the largest natural gas 6 fuel provider in the country. We fuel over 17,000

. . 7 

### vehicles on a daily basis from one of,.· our 200 CNG and 8 LNG stations. We dispensed over 75 milli6n**gallon~** 

### in 9 2008 of clean burning domestic fuel. Our cus'.torner 10 base consists of refuse, transit, airport· shuttles,· 11 taxis, port trucking, and**muni~ipal** 

### fleets. We 12 appreciate the chance to comment at TCEQ ru_lemaking to.· 13 implement the Texas Clean Fleet Program, created by 14 the Senate Bill 1795. My comments today will be 15 general in nature; we will provide more written detaii 16 by the November 23rd deadline. 17 Here in Texas, Clean Energy owns and 18 operates nine CNG stations throughout the Dallas-Fort 19 Worth Metroplex and two in the Houston area. We 20 recently opened a CNG facility to fuel dozens of the 21 City of San Antonio refuse trucks. Some of our other 22 customers include DART, City of Dallas, AT&T, UPS, DFW 23 Airport, Love Field, HEB, Texas A&M University, just 24 to name a new. We also own and operate the McCornmas 25 Bluff Landfill in Dallas where we produce nearly 10

KENNEDY REPORTING SERVICE, INC. 512.474.2233 4

### 1 million cubic feet of renewable natural gas on a daily 2 basis. 3 For qualifying fleet customers, we 4 often cover a hundred percent of the**capi~al** 

### cost to 5 design, build, and construct a fuel**statio~** 

### in 6 exchange for affordable long-term fuel contract which 7 is· less than what the customers are usually paying for 8 diesel or gasoline. Our long-term fuel c9ntracts 9 

### eliminate the unpredictability of rising fuel costs 10 

### allow'ing our customers to focus on their fleets and·.· 11 

### regardless of the fluctuating market. 12 

### Clean**Ener~y** 

### is currehtli working**~i~h** 13 

### fleet operators across the State of**Te~as** 

### on various 14 

### and promising projects. 

## we are**demonst~ating** 

### to our

. . . 15 

### prospective customers that natural gas. is· an 16 economical alternative to gasoline and**dies~l,** 17 

### especially given the**ri~ing** 

### price of**fuel.a~d:** 

### 18 availability of the vast quantities of natural gas 19 

### here in the state. 20 

### We believe CNG not only provides an 21 

### economic alternative, but also moves us one step 22 closer to energy independence here in Texas and as a 23 

### country. Clean Energy, through its acquisition of BAF 24 

### Technologies in September of 2009, 

### provides natural 25 

### gas vehicle conversions for light duty and medium duty

KENNEDY REPORTING SERVICE, INC. 512.474.2233 5

### 1 vehicles. BAF Technology is a leading provider of 2 natural gas vehicle systems and conversions in the 3 United States and supports a global client with 4 alternative fuel systems. The Texas Emissiort 5 Reduction Plan program has been a tremendous success; 6 although not many TERP program grants have been issued 7 for CNG projects or other alternative fuel**proje~ts.** 

### 8 The legislation which creates the Clean Fieet Program 9 was**intend~d** 

### to carve out part of TERP program 10 specifically for alternative fuel projects. 11 As you**know~** 

### Senate Bill**1425~** 

### H6Use 12 Bill 2978, and House Bill 1425, all were filed in the 13 most recent 81st legislation session**~o 6~eate**  

### ihe 14 Clean Fleet Program, but did not

## pa~s; however:

## t~~· 15 Clean Fleet Program was**~dded** 

### on Senate Bill**17~~** 

### tb · 16 become law. Clean fleet legislation received broad 17 support from a broad base of entities**~uppor~ing** 

### 18 natural gas and alternative fuels. Some of those 19 entities are Texas Gas Association, Texas Propane Gas 20 Association, Texas Motor**Transportation~** 

### UPS, ·HEB, 21 AT&T, to name a few. Clean Energy believes**th~t** 

### the 22 Clean Fleet Program will provide opportunities for 23 natural gas projects that may have not existed prior 24 to the establishment of this program. We also hope 25 that the Clean Fleet Program will establish a track

KENNEDY REPORTING SERVICE, INC. 512.474.2233 6

### 1 record of successful natural gas projects that could 2 be analyzed and copied in the TERP program. 3 Ultimately we hope the Clean Fleet Program will open 4 the TERP program to more natural gas projects. 5 Regarding the proposed clean fleet 6 

### rules, the rules proposed by the**T~EQ** 

### appear to be 7 cleanly implemented in the statutes, which Clean 8 Energy supports. The proposed rules generally

. . 

### 9 delegate a great deal of**authdrity~to** 

### the**EXecuti~~** 

### 10 Director, such as setting the**b~seline** 

### emission levels 11 from which emission reductions can be. 12 calculated, setting minimum annual mileage or £uel 13 usage requirements, and consideration of reduction of: 14 other pollutants besides nitrogen**o~ides.** 

### ·**~e sup~6rt**  

### 15 the flexibility of the proposed**rule~** 

### which**alio~.the** 16 

### Executive Director to adapt· and modify implementation 17 of the Clean Fleet Program quickly·and**~espond ~6**  

### 18 changing conditions. We will endeavor to work with 19 staff as the specific grant eligibility**r~quirements** 

### 20 are developed. 21 Clean Energy believes that prioritized 22 consideration should be given to projects in 23 nonattainment area or non -- or near nonattainment 24 areas. However, there are projects involved involving 25 fleets that operate for a substantial portion of the

KENNEDY REPORTING SERVICE, INC. 512.474.2233 7

### 1 time traveling between nonattainment areas and near 2 nonattainment areas. These projects should be given 3 the same consideration as a project operating only in 4 nonattainment areas; the air quality and benefits 5 would be the same. We also support the development of 6 new grant program _procedures and new application forms 7 which are different from TERP programs. ·The. procedure 8 and application requirements for the Clean Fleet 9 Program should be tailored to large fleets. Many of 10 the details currently required in the ap:t:>iicatfon for 11 a TERP program may not be necessary for the 12 application of a Clean Fleet Program grant. 13 The Cleart Fleet Program is**g~ared** 

### 14 towards large fleets with over a.hundred**v~hicles;**

. . . . . 

### 15 while the TERP program is a broad-based program that 16 almost exclusively results in a grant to projects with

. . . .. 

### 17 only a few vehicles

..The needs of**the.diff~rent** 

### 18 classes of application for the TERP program and the 19 Clean Fleet Program are very different, and**th~** 

### 20 application process should also be different. ·Under 21 the TERP program, an applicant is required to expend 22 the time and resources to submit a substantial grant 23 of information on each vehicle identified in the 24 application. This may be appropriate for an applicant 25 with one or two vehicles; however, Clean Energy

KENNEDY REPORTING SERVICE, INC. 

### 512.474.2233 8

### 1 encourages the TCEQ to consider allowing an applicant 2 for a Clean Fleet Grant to provide the basic 3 information and let the applicant know if it appears 4 that the applicant will qualify for the grant. An 5 applicant in the Clean Fleet Program will be providing 6 information on 25 or more vehicles which can be a 7 substantial investment without any indication whether

. . . . 

### 8 the investment in compiling the application may. be. 9 worthwhile. Thus a preview of a Clean Fleet Program 10 application would be useful in attracting good 11 projects from the fleet operator who might riot 

### 12 otherwise do so. The September 18th, 2000,**~e~o** 

### to 13 the commissioners state that a limited number of 14 applicants may**qualif~** 

### for the grant funds**~ince** 

### each 15 grant must be for 25 vehicles. 16 Clean Energy encourages the TCEQ to 17 consider whether TERP funding might be· used to. 18 supplement a Clean Fleet Program grant application 19 which meets the requirements of both programs, but for 20 which the funding is not available. There may also be 21 other sources of funding from other states and local 22 sources which might also be in conjunction_ with the 23 Clean Fleet Program. The General Land Office Natural 24 Gas Vehicle Initiative Program, the Federal American 25 Recovery Reinvestment Act of 2009, and the Congestion

KENNEDY REPORTING SERVICE, INC. 512.474.2233 9

### 1 Mitigation Air Quality Improvement Program 2 Implementation by the Federal Highway. 3 Administration. 4 Senate Bill 1759 also requires the TCEQ 5 to study the amount of emission reductions achieved 6 

### for alternative fueling infrastructure, and requires 7 the EPA consideration whether emission reduction 8 credit can be attributed to refueling infrastructure. 9 Although this is not expressly part of the**propo~ed** 

### 10 rulemaking, Clean Energy is prepared to assist ariy**~ay** 

### 11 we can. 12 In**closin~,** 

### Clean Energy**a~preciates** 

### 13 the opportunity to participate irt the**rulem~king** 

### for 14 Senate Bill 1759 and the Clean Fleet Program.· .We will

. . . . . .

. . . 

### 15 submit formal written comments to the agency by the 16 

### November 23rd deadline. We also**~r~** 

### certainly 17 available to work with staff in

### develo~irig.**a~y** of the 18 suggestions that we have made here t6day or will**b~** 

### 19 making in the formal comment. I appreciate your time 20 and consideration. 21 MS. RAWLINGS: Thank you. ·Is there 22 anyone else who would like to present testimony at 23 this time? 24 

### Okay. Once again the Commission will 25 continue to accept written comments on the proposed

KENNEDY REPORTING SERVICE, INC. 512.474.2233 10

### 1 new sections to 30 TAC 114, Control of Air Pollution 2 from Motor Vehicles, until Monday, November 3rd. 3 If there are no further comments, this 4 hearing is now closed. We appreciate your comments 5 

### and thank you for coming. 6 

### (Hearing concluded at 2:11p.m.) 7 8 9 10 

### 11 12 13 14 15 16 

### 17 18 19 20 

### 21 22 

### 23 24 25

KENNEDY REPORTING SERVICE, INC. 512.474.2233 111 

### REPORTER'S CERTIFICATION 2 

### 3 STATE OF TEXAS 4 COUNTY OF TRAVIS 5 I, Rebecca J. 

### Callow, Certified 6 Shorthand Reporter in and for the State of Texas, 7 Registered Professional Reporter, Certified Realtime 8 Reporter, do hereby certify that the**above-mention~d** 

### 9 matter occurred as hereihbefore set out;· 10 I FURTHER CERTIFY·THAT the proceedings 11 of such were reported by me or under my**supe~vision~** 

### 12 later reduced to typewritten form under my supervision 13 and control and that the foregoing pages are a fuli, · 14 true, and correct transcription of.the original riotes.

. . . . ' 

### . 

### 15 IN WITNESS WHEREOF, I have hereuhto set--< 16 my hand and seal this 

# B._ da

. of·

# f\JQ~, 17 18 19 

### 20 21 22 

### 23 24 25 CSR, RPR,. CRR d Reporter pires 12/31/11

. Firm Certification No.· 276 · Kennedy Reporting Service, Inc. 1801 Lavaca Street Suite 115 Austin, Texas 78701

KENNEDY REPORTING SERVICE, INC. 512.474.2233 12

## - 1 - 

# Texas Commission oh Environmental Quality



# - Public Hearing Registration · Date: November 16, ).009 Time: 2:00PM Rule Project No.: 2009-047-114-EN Short Title: SB 1759: Texas Clean Fleet Program Location: TCEQ Complex, 12100 Park 35 Circle, Building E, Room 2018, Austin, Texas Concerning: Proposed new sections to 30 Texas Administrative Code (TAC) Chapter 114

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### -2- 

# Texas Commission on Environmental Quality Public Hearing Registration Date: November 16, 2009 Time: 2:00 PM Rule Project No.: 2009-047-114-EN Short Title: SB 1759: Texas Clean Fleet Program Location: TCEQ Complex, 12100 Park 35 Circle, Building E, Room 2015, Austin, Texas Concerning: Proposed new sections to 30 Texas Administrative Code (TAC) Chapter 114

### NiiJII~t\d.J.ff.l9.ne~Q~~m:~.m51i~~1 

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# EVALUATION OF TESTIMONY

# -,

Texas Commission on Environmental Quality

· INTEROFFICE MEMORANDUM

To: Commissioners Date: February 5, 2010 Thru: LaDonna Castaiiuela, ChiefClerk Mark R. Vickery, P .G., Executive Director From: 

### Susana M. Fh1deb.-and. P.E.,

# ChiefEngin~ Docket No.: 2009-1185-RUL Subject: Commission Approval for Rulemaking Adoption Chapter 114, Control ofAir Pollution From MotorVehicles SB 1759: Texas Clean Fleet

### Program Rule ProjectNo. 2009-047-114-EN Background and reason(s) for the rulemaking: The rules implement revisions to Texas Health and Safety Code, Chapter 391, as a result ofSenate Bill (SB) 1759, 81st Legislature, 2009. The changes were originally proposed by Senator Williams in SB 1425. However, because ofprocedural delays, that bill did not go forward. The changes were then added to SB 1759, authored by Senator Watson. Sco(,e ofthe proposed**~lemaking:** A) Summary of what the rulemaking will do: The rulemaking implements the new Texas Clean Fleet Program. This voluntary grant program provides incentives to owners of eligible fleets to replace dieselpowered vehicles with alternative fuel or hybrid vehicles. B) Scope required by federal regulations or state statutes: The rulemaking incorporates language from new Texas Health and Safety Code, Chapter 391, as established under SB 1759. C) Additional staff recommendations that are not required by federal rule or state statute: No additional provisions are included beyond those needed to implement the program established under SB 1759. Statutory authority: • Texas Water Code, §5.102, which provides the commission with the general powers to carry out its duties; • Texas Water Code, §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions ofthe Texas Water Code and other laws ofthis state; • Texas Water Code, §5.105, which authorizes the commission by rule to establish and approve all general policy ofthe commission; • Texas Health and Safety Code, §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes ofthe Texas Clean AirAct; , • Texas Health and Safety Code, §382.ol 1, which authorizes the commission to establish the level of quality to be maintained 

### in the state's air and to control the quality ofthe state's air; • TexasHealth and Safety Code, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control ofthe state's air; • Texas Health and Safety Code, Chapter 386, which establishes the Texas Emissions Reduction Plan (TERP) program.

# . -- ;
Commissioners Page2 February 5, 2010 Re: Docket No. 2009-1185-RUL Effect on the: A) Regulated community: Owners offleets of 100 or more vehicles operated in Texas, at least 25 ofwhich are diesel-powered vehicles, will potentially be eligible to apply for a grant under this new program. ·Many ofthese same entities may have already been eligible to apply under the other TERP grant programs, but this program targets the larger fleets for replacement of diesel vehicles with alternative fuel or hybrid vehicles. The new program may be implemented statewide, although the commission may prioritize funding based on the areas of use and other factors. The commission requested public comment regarding limiting the applications under the initial fun4ing period to projects where the primary area ofvehicle operation is in the nonattainment and early-action compact areas. Comments were received in support ofthis approach, with an additional recommendation that travel between the areas be included in the area-<>f-use restrictions. Also, this program includes both light-duty and heavy-duty vehicles, while the other TERP grant programs include only heavy-duty vehicles. The appropriated funding for the current biennium is approximately $12 million. This will be enough funding for replacement ofbetween 100 and 200 vehicles, depending upoil the type of vehicles. This number of vehicles represents between one and eight grants that may be issued over the biennium. B)**Public~** Same as above. C) Agency programs: New program materials will need to be developed to implement this program. Application and contract processing and approval procedures, as well as long-term monitoring procedures, will need to be developed and implemented. Stakeholder meetings: No stakeholdermeetings**~ere** held for this rulemaking. Public comment:
. The commission held a public hearing on November 16, 2009, in Austin. The comment period closed on November 23, 2009. Written comments were received from the United States Environmental Protection Agency Region 6 (EPA). Oral and written comments were received from Clean Energy. ·Significant comments and concerns are discussed below. The EPA asked whether the reference to "methanol" in §114.650(1) should instead refer to "ethanol." EPA also asked whether the list ofalternative fuels included in this section is all-inclusive. · The EPA commented that the categories for determining the percentage of costs that may be eligible for funding in §114.656 should be clarified to refer to vehicle model years and engine manufacture years. The EPA also expressed concern that the language regarding eligibility ofvehicles 'and engines not certified for federal or California emission standards could open the possibility offunding illegally-imported vehicles that did not meet emission certification requirements. Clean Energy recommended thatthe commission consider using other TERP grants and allowing grants from other state and local programs to supplement a grant under this program. Clean Energy also commented that §114.655 did not include language from SB 1759 authorizing funding for reasonable and necessary labor expenses needed to install emissions-reducing equipment. Clean Energy responded to the proposal to limit the initial grant funding to projects operating in the eighthour nonattainment and near-:nonattainment areas with an early-action plan in place. Clean Energy expressed support for the proposal, but recommended that the criteria also include travel between the areas.

# .--

!

. Commissioners Page 3 February 5, 2010 Re: DocketNo. 2009-1185-RUL Clean Energy also recommended that the commission simplify the application process from the process used for the other TERP grants. In addition, Clean Energy recommended that the commission provide a pre..: review process to review basic information from the applicant and inform the applicant whether the project would be eligible before the applicant is required to compile detailed information about the vehicles to be :r;eplaced. · Significant changes from proposal: 

### In response to the EPA's question regarding whether the list of alternative fuels in §114.650(1) is all inclusive, this section was revised to make it clear that only the fuels listed are considered alternative fuels for purposes of this program. In response to the EPA's comments regarding the need to clarify the funding categories in §114.656, this section was revised to refer to the manufacture year of a heavy-duty vehicle engine and the model year ofa light-duty vehicle. In response to the EPA's concerns that 

### an illegally-imported vehicle might qualify for a

_grant, language was added to this section to specifically exclude imported vehicles that did not meet the

_

emissions certification requirements from eligibility underthis program. Potential controversial concerns and legislative interest remaining after proposal and public comment: Due to the limited funding that has been allocated to the Texas Clean Fleet Program, there is a potential for controversy regarding the number of entities that will ultimately get selected for grant funding.

_ SB 1759 established that only five percent ofthe overall 

### TERP funds be allocated to the program. This results in approximately $6.8 million 

### in Fiscal Year 2010 and $5.2 million for Fiscal Year 2011. This program is designed such that each project would involve the replacement ofa minimum of25 vehicles at a time. Additionally, the broad language ofthe bill results in a potentially large pool ofeligible entities that may seek grant funds. Given these factors, it is likely that all ofthe program funds will be allocated to -only a limited number ofapplicants. · Does tlus rulemaking affect any

### cu~nt policies or require development

### ~f new policies? This rulemaking**implem~ts** a new grant program. New program materials and procedures will need to be developed and implemented. What are the consequences if this rulemaking does not go forward? Are there**altern~tives** to rulemaking? If this rulemaking does not go forward, the new Texas Clean Fleet Program will not be implemented.. Possible alternatives are not adopting the rules and being inconsistent with the statute or adopting the rules at a later date. Key points in adoption rulemaking schedule: Texas Register proposal publication date: Anticipated Texas Register publication date: Anticipated effective date: Six-month Texas Register filing deadline: October 23,2009 March 12,2010 March 18,2010 April23, 201 0 i"Commissioners Page4 February 5, 2010 Re: Docket No. 2009-1185-RUL Agency contacts: Steve Dayton, Rule Project Manager, 239-6824, ChiefEngineer's Office Ben Rhem, StaffAttorney, 239-6501 Jessica Rawlings, 

### Texas Register Coordinator, 239-0177 '-· Attachments

cc: ChiefClerk, 

### 5 copies Executive Director's Office Susana M. Hildebrand, P.E. Kevin Patteson Curtis Seaton Daniel Womack Office ofGeneral Counsel Steve Dayton Jessica Rawlings

### EVALUATION OF TESTIMONY

The Texas Commission on Environmental Quality (commission) adopts new §§114.650- 114.658.

Sections 114.650 and 114.656 are adopted with changes to the proposed text as published in the October 23, 2009, issue ofthe Texas Register (34 TexReg 7295). Sections 114.651- 114.655, 114.657, and 114.658 are adopted without changes to the proposed text and the text will not be republished.

The new sections will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan (SIP).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES Senate Bill (SB) 1759, 81st Legislature, 2009, amended the Texas Health and Safety Code by adding Chapter 391, Texas Clean Fleet Program. This program is designed to encourage eligible fleets to replace diesel vehicles with alternative fuel or hybrid vehicles. Eligible entities that replace 25 or more on-road diesel vehicles with alternative fuel or hybrid vehicles may apply for a grant under the program to offset the cost ofreplacing those vehicles.

SECTION BY SECTION DISCUSSION §J14.650, Definitions Section 114.650 establishes the defmitions specific to the Texas Clean Fleet Program, as required by Texas Health and Safety Code, §391.001. Since proposal, the commission revised the language in§ 114.650(1) to make it clear that only the fuels listed in this section are

1considered alternative fuels for purposes ofthis program.



### §114.651, Applicability Section 114.651 establishes the applicability requirements as required by Texas Health and Safety Code, §391.002. These requirements outline entities that are eligible to apply for a grant under the program.



### §114.652, Qualifying Vehicles This section clarifies the types ofvehicles that are and are not eligible for participation in the program, as required by Texas Health and Safety Code, §391.003.



### §114.653, Grant Eligibility Section 114.653 establishes grant eligibility requirements, as required by Texas Health and Safety Code, §391.005. These requirements establish use and ownership criteria ofany vehicles being replaced, as well as the level ofemissions that must be achieved in order to receive a grant under the program. Subsection (d) provides that the executive director may establish additional criteria for purposes ofprioritizing projects for selection, which may include, but are
not limited to, nonattainment status ofthe primary location in which the eligible vehicles are used or cost perton benefits ofthe overall emissions being reduced.

§J

### 14.654, Usage andDisposition This section outlines requirements regarding the use ofnew vehicles purchased through the program, as well as the disposal ofvehicles being replaced, as required by Texas Health and Safety Code, §391.005.



### 2

### §114.655, GrantRestrictions As required by Texas Health and Safety Code, §391.006, this section outlines the allowable use ofgrant funds awarded under the program.



### §114.656, Eligible GrantAmounts As required by Texas Health and Safety Code, §391.007, this section outlines the various eligible grant amounts allowed under the program based on the age and type ofeach vehicle being replaced. Since proposal, the commission revised the language for the funding categories
to refer to the year ofmanufacture for heavy-duty vehicle engines and the model year for lightduty vehicles. The change was made to clarify the funding categories and make it easier for potential grant applicants to determine which category applies to their vehicle. The commission also added language to make it clear that vehicles manufactured in other countries that did not
meet the emissions certification requirements for that vehicle and, therefore were imported illegally, are not eligible for replacement under this program.



### §114.657, Reporting Requirements Section 114.657 identifies the reporting requirements, as required by Texas Health and Safety Code, §391.005.



### §114.658, Implementation Schedule Section 114.658 identifies the expiration date ofthe program, as stated in Texas Health and Safety Code, §391.008.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION The commission reviewed the rulemaking in light ofthe regulatory analysis requirements of Texas Government Code, §200 1.0225 and determined that this rule action is not subject to


### 3§200 1.0225 because it does not meet the defmition ofa "major environmental rule" as defmed in that statute. A "major environmental rule" means a rule the specific intent ofwhich 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, orthe public health and safety ofthe state or a sector ofthe state.

The new Chapter 114 rules are adopted in accordance with SB 1759, which added Texas Health and Safety Code, Chapter 391. The adopted rules add a new voluntary incentive program with the goal ofreducing diesel emissions. The program offers fmancial incentives for the voluntary replacement ofdiesel engines. Because the adopted rules place no involuntary requirements on the regulated community, the adopted rules will not adversely affect in a material way the
economy, a sector ofthe economy, productivity, competition,jobs, the environment, or the public health and safety ofthe state or a sector ofthe state. Also, none ofthe adopted new sections place additional fmancial burdens on the regulated community.

In addition, a regulatory impact analysis is not required because the adopted rules do not meet any ofthe four applicability criteria for requiring a regulatory analysis ofa "major environmental rule" as defmed in the Texas Government Code. Texas Government Code, §200 1.0225 applies only to a major environmental rule the result ofwhich is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement ofstate law, unless the rule is specifically required by federal law; 3) exceed a requirement ofa delegation agreement or contract between the state and an agency or representative ofthe federal government to implement a state and federal program; or 4) adopt a rule solely underthe general powers ofthe agency instead ofunder a specific state law. This rulemaking does not exceed a standard set by federal law. In addition, this rulemaking does not I exceed an express requirement ofstate law and is not adopted solely underthe general powers


### 4ofthe agency, but is specifically authorized by the provisions cited in the STATUTORY AUTHORITY section ofthis preamble. Finally, this rulemaking does not exceed a requirement ofa delegation agreement or contract to implement a state and federal program.

The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment period. No comments were received regarding the commission's determination ofregulatory impact.

TAKINGS IMPACT ASSESSMENT The commission evaluated this rulemaking action and performed an analysis ofwhether the adopted rules are subject to Texas Government Code, Chapter 2007. The primary purpose ofthe rulemaking is to amend Chapter 114 in accordance with SB 1759. The new rules implement a voluntary program and only affect motor vehicles, which are not considered to be private real property. Therefore, promulgation and enforcement ofthe adopted rules is neither a statutory

nor a constitutional taking because it does not affect private real property. Therefore, the 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 the adoption is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2), concerning Actions and Rules Subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies ofthe CMP be considered during the rulemaking process. The commission reviewed this action for consistency and determined the rulemaking for Chapter 114 does not impact any CMP goals or policies, because it adds a voluntary incentive grant program and does not govern air pollution emissions.



### 5

### The commission invited public comment regarding the consistency ofthe rules with the CMP. No comments were received regarding the consistency ofthe rules with the CMP.

PUBLIC COMMENT The public hearing for this rulemaking was held on November 16, 2009, at 2:00p.m. in Austin
at the commission's central office at 12100 Park 35 Circle. The comment period closed on November 23,2009. The commission received comments from Clean Energy (Clean Energy) and EPA Region 6 (EPA).

Clean Energy submitted oral and written comments in support ofthe rulemaking and provided recommendations for implementation ofthe new program. EPA submitted written comments in support ofthe rulemaking and recommended changes to clarify the provisions.

RESPONSE TO COMMENTS EPA and Clean Energy both expressed support for the rules and the implementation ofthe new Texas Clean Fleet Program.

The commission appreciates the support expressed for the rules and the new program.

EPA commented that the new rules will contribute to the enhancement ofair quality in the nonattainment areas where they are implemented. EPA also commented that emissions reductions claimed in the SIP from these new rules must be 

### quantifiable, surplus, permanent, and enforceable.

The commission will ensure that any emissions reductions from this new program used to show progress towards meeting the SIP emissions reductions goals meet the creditability

6requirements. The commission did not make any changes to the rules in response to this
comment.

Clean Energy commented on the commission's request for public comment under the discussion in the SECTION BY SECTION DISCUSSION ofthe proposed preamble. The commission solicited comments on a proposal to establish prioritizing criteria that would limit the commission to initially consider only grant projects that include vehicles with a primary location in a county that is located within an eight-hour ozone nonattainment area or nearnonattainment area that has submitted an early action compact plan. Clean Energy expressed support for giving prioritized consideration to projects in nonattainment and near-nonattainment

areas. Clean Energy further commented that there are eligible fleets that operate for a substantial portion ofthe time traveling between nonattainment and near-nonattainment areas. Clean Energy recommended that these fleets be given the same consideration as a fleet operating only in a nonattainment or near-nonattainment area.

The commission appreciates the support expressed for the program and the input provided regarding how the commission could best prioritize the selection ofgrant projects. The commission will consider these comments when developing the implementation plans and criteria for the initial grant round.

Clean Energy commented that the estimates ofthe cost for alternative fuel vehicles in the FISCAL NOTE section ofthe proposed preamble were high. The preamble provided a cost estimate ofbetween $20,000 and $150,000 for alternative fuel vehicles. Clean energy stated that the cost ofan alternatively fueled vehicle ranges from $6,000 for light-duty vehicles such as the Honda Civic, $24,000 for medium-duty shuttles, and up to $100,000 for heavy-duty, Class 8,
tractor trucks with 14.9L engines.

7

### Clean Energy appears to be referring to the difference in cost between an alternative-fuel vehicle and a similar gasoline-fuel or diesel-fuel vehicle. The cost estimates in the preamble were general estimates ofthe total costs for the purchase ofan alternative-fuel vehicle. The commission did not change the cost estimates.

Clean Energy agreed with the statement in the FISCAL NOTE section ofthe proposed preamble that the public benefit will be improved air quality statewide since there will be additional opportunities to apply for grant funds to replace diesel vehicles with alternative-fuel options that have fewer emissions.



### The commission appreciates the support expressed for the program and agreement with the assessment ofpotential benefits ofthe program.

EPA commented that it is an unfortunate coincidence that this program has the same name as a previous 

### Texas Clean Fleet Program adopted in Texas, and subsequently repealed, under 

### § 182(c)(4) ofthe Texas Clean Air Act as amended in 1990. EPA expressed hope that the use of the same name for this new program does not confuse the public.



### The name ofthe program was specified by SB 1759. Where appropriate, the commission will include statements in the grant materials to make it clear that this program is different from the earlier Texas Clean Fleet Program.

Clean Energy expressed support for the proposed defmitions in §114.650 tracking the statutory defmitions.

8

### The commission appreciates the support expressed for the program.



### EPA questioned whether there is a typographical error 

### in the defmition ofalternative fuel in §114.650( 1 ), where it refers to "a mixture offuels containing at least 85% methanol." The EPA asked whether this should read "ethanol" instead of "methanol."

The definition in the rule is the same as stated in Texas Health and Safety Code, §391.001(1), as added by SB 1759. Ethanol is not included in the list.



### EPA asked whether the specified list ofalternative fuels in §114.650( 1) is all-inclusive or does the program allow for the use ofother unspecified alternative fuels.

The specified list ofalternative fuels is all-inclusive. The commission has revised the language in §114.650(1) to make it clear that only the fuels listed are considered alternative fuels for purposes ofthis program.



### Clean Energy expressed support for the proposed language in §114.651 and also suggested including clarifying language that local governments, such as regional transit agencies or school districts, may also apply for a grant.

The commission appreciates the support expressed for the program. The definition ofan eligible entity is included in §114.650(2) and is based on the statutory language. The commission will provide information in the grant materials to explain that all types of entities, including local governments, may be eligible to apply for a grant. The commission did not make any changes to the rules as a result ofthis comment.

9Clean Energy expressed support for the language in 

### §114.652 regarding qualifying vehicles. Clean Energy also commented regarding the limited amount offunding available for this
program. Clean Energy recommended that the commission consider whether other Texas Emission Reduction Program (TERP) grant funding might be used to supplement a grant application that meets the requirements ofboth the TERP grant program and this program. In discussing the other TERP grant funding, Clean Energy is referring to the Diesel Emissions Reduction Incentive Program established under Texas Health and Safety Code, Chapter 386. Clean Energy also commented that there may also be other sources offunding from other state

or local sources that might be used in conjunction with this program, including programs ofthe Texas General Land Office Natural Gas Vehicle Incentive Program, the Federal American Recovery Reinvestment Act of2009, and the Congestion Mitigation Air Quality Improvement Program implemented by the Federal Highway Administration.



### The commission appreciates the support expressed for the program. Regarding the recommendation about using other grants or financial incentives in conjunction with a grant from this program,joint funding with other TERP grants may not be feasible due to the unique requirements ofeach program, including funding allocation requirements, timing ofthe grants and purchases, location and use requirements, and the calculation and use ofthe emissions reductions under the different programs. The feasibility of joint funding with other financial incentive programs will depend upon the requirements of those programs. Also, anyjoint funding would need to be consistent with §114.652(c)(3), which states that a qualifying vehicle does not include a vehicle that has qualified for a similar grant or 

### tax credit in anotherjurisdiction. The commission will consider Clean Energy's recommendations when implementing the program and will include guidance in the grant implementation materials on the possible use ofother financial incentives in conjunction with a grant from this program.

10Clean Energy expressed support for the language in 

### §114.653 regarding grant eligibility, including language allowing the executive director to adapt and modify implementation ofthe
program quickly and respond to changing conditions. Clean Energy specifically expressed support for the flexibility granted the executive director to set baseline emission levels and to establish criteria which the vehicle being replaced must meet, including minimum annual mileage or fuel usage requirements, minimum percentage ofannual usage requirements, and criteria for determining that the vehicle was in operating condition with at least two years of remaining useful life.



### The commission appreciates the support expressed for the program.

Clean Energy expressed support for the language 

### in §114.653( c), authorizing the executive director to also consider, at the executive director's discretion, projects that result in a 25% reduction in pollutants other than nitrogen oxides (NUx), and the language in 

### § 114.653( d)(2), authorizing the executive director to prioritize projects based on the cost perton benefits ofthe overall emissions being reduced.



### The commission appreciates the support expressed for the program.

EPA also commented regarding authority granted the executive director in 

### § 114.653(c) to consider other pollutants in addition to NOx. The EPA questioned how the state would keep the emissions reductions in other pollutants separate from the NOx emissions reductions.



### The commission appreciates the support expressed for the program. Regarding the question raised by the EPA, the commission maintains a detailed database ofall TERP

11

### project information and the emissions reductions associated with each project. If, 

### in the future, the commission bases the grant eligibility on reductions in other pollutants in addition to or in place ofNOx, the commission will be able to distinguish between and track the projects and the types ofemissions that will be reduced by each project.

EPA also asked about situations where the reduction in the other pollutant resulted in an increase in NOx.



### Regardless ofthe pollutant addressed under this program, the NOx emissions standards for vehicles purchased under this program will be more stringent or, at a minimum, the

same as the standards for the vehicles being replaced. Therefore, the commission does not anticipate a circumstance where the replacement ofa vehicle under this program would result in an increase in NOx emissions when compared to the emissions ofthe vehicle being replaced. The commission did not make any changes to the rule in response to this
comment.

Clean Energy expressed support for the language in 

### §114.654 regarding usage and disposition.



### The commission appreciates the support expressed for the program.

Clean Energy expressed support for the language in 

### §114.655 regarding grant restrictions and also recommended that the commission clarify that a grant may also be used for labor to install emissions-reducing equipment, which is consistent with the statute.



### The commission agrees that SB 1759 authorizes the commission to include the reasonable and necessary expenses incurred for the labor needed to install emissions-reducing

12

### equipment. However, the purchase ofemissions-reducing equipment is not an eligible grant activity under this program. Therefore, this language does not apply and would be confusing ifincluded in the rules. The commission did not make a change to the rules as a result ofthis comment.

EPA commented that clarification is needed in §114.656(a)(l) listing the eligible grant amounts based on the emissions certification ofthe vehicle or engine being replaced. EPA suggested that it would be helpful ifthe year ofmanufacture is specified for both federal and California emission standards.



### The commission agrees that the references to the categories ofemissions standards for determining the eligible percentage ofcosts should be clarified. The commission bas ·amended the language in §114.656(a) to refer to the year ofmanufacture ofthe heavy-duty

on-road engines and in §114.656(b) to the model year ofthe light-duty on-road vehicles. Under the federal and California emissions certification requirements, heavy-duty onroad engines must have met the emissions standards applicable to the manufacture year of the engine and light-duty vehicles must have met the emissions standards applicable to the model year ofthe vehicle. The change in the rule language will help clarify the appropriate funding category ofthe vehicle being replaced.

EPA also commented that §114.656(a)(l)(B) and §114.656(b)(l)(A) and (B) could be interpreted to allow vehicles illegally imported into the United States to be eligible for replacement under the program. EPA explained that vehicles imported after the implementation ofemission standards were required to meet the certification requirements in order to legally be imported into the United States. EPA expressed concern that the language authorizing funding for vehicles and engines not certified to a federal or California emissions standard could result

13

### in funding for imported vehicles that were required to, but did not meet, the emissions standards applicable to that vehicle. EPA recommended specifying the year ofmanufacture ofheavy-duty on-road engines and the model year oflight-duty on-road vehicles for federal and California emission standards and clarifying the requirements.

The commission agrees that the language should be clarified. The commission has amended the language in §114.656(a) to refer to the year ofmanufacture ofthe heavy-duty on-road engines and in §114.656(b) to the model year ofthe light-duty on-road vehicles. Heavy-duty on-road engines must have met the emissions standards applicable to the manufacture year ofthe engine and light-duty vehicles must have met the emissions standards applicable to the model year ofthe vehicle. The commission bas removed the language referring to vehicles and engines not certified to meet a specific emissions standard. The commission bas also added §114.656(d) to make it clear that non-compliant vehicles and engines imported into the country illegally would not be eligible for replacement under the program.



### EPA also asked what is meant by "voluntary emission certification standards" under §114.656(bXl)(B).

The references to voluntary emission certification standards pertain to the voluntary National Low Emission Vehicle (NLEV) standards. The NLEV came into effect through

an agreement by northeastern states and the auto manufacturers to provide more stringent emission standards for the transitional period before the Tier 2 standards were introduced. The commission has amended the language in §114.656(b) to refer to the model year ofthe light-duty on-road vehicles and removed the references to voluntary emission certification standards.

14

### Clean Energy expressed support for the language in §114.656 regarding eligible grant amounts. Clean Energy also expressed support for §114.656(c) authorizing the executive director to revise the standardsfor determining grant amounts in order to reflect changes to federal emissions standards and decisions on pollutants ofconcern.

The commission appreciates the support expressed for this program.

Clean Energy expressed support for the language in § 114.657 regarding reporting requirements.

The commission appreciates the support expressed for this program.

Clean Energy expressed support for the language in§ 114.658 regarding the expiration date of these rules.

The commission appreciates the support expressed for this program.

Clean Energy expressed support for development ofnew grant program procedures and new grant application forms that are different from the other TERP grant forms. Clean Energy recommended that the procedures and application requirements be tailored to large fleets and that many ofthe details currently required in an application for a TERP grant may not be necessary for an application under this program. Clean Energy expressed its opinion that the needs ofthe applicants under the TERP grants and the applicants under this program are very different and that the application process should also be different.

This comment pertains to implementation procedures and requirements and not a rule

15

### provision. The commission is cognizant ofthe need to not make the application process any more complicated than is necessary to effectively implement the program. The commission will consider these comments when developing the application materials, requirements, and procedures.

Clean Energy commented that for a TERP grant, the applicant is required to expend the time and resources needed to compile and submit a substantial amount ofinformation on each vehicle identified in the application. Clean Energy expressed its opinion that this amount of information may be appropriate for an applicant with one ortwo vehicles. Clean Energy explained that because an applicant under this program will be providing information on 25 or

more vehicles, the applicant may have a substantial investment in compiling that information without any indication whether the investment in compiling the application may be worthwhile. Clean Energy recommended that the commission consider allowing an applicant under this
program to initiallyjust provide basic information and that the commission pre-review the application to let the applicant know ifit appears that the applicant will qualify for a grant. Clean Energy expressed its opinion that a pre-review ofan application would 

### be useful in attracting good projects from fleet operators who may not otherwise be willing to submit a grant application, given the time and resources it takes to submit an application.



### This comment pertains to implementation procedures and requirements and not a rule provision. The commission is cognizant ofthe need to not make the application process any more complicated than is necessary to effectively implement the program. The commission will consider these comments when developing the application materials, requirements, and procedures. However, because vehicle eligibility and the eligible grant amount is dependent on the specific characteristics ofthe vehicle being replaced, a prereview ofthe applicant's information will be oflimited value unless detailed information

16about each vehicle to be included in the application is provided.

Clean Energy also expressed support for the provisions ofSB 1759 directing the commission to study the amount ofemissions reductions achieved from alternative-fueling infrastructure and to request that the EPA consider whether emissions reduction credit can be attributed to the installation and use ofthe infrastructure. Clean Energy stated that it is prepared to assist in any way it can.

This comment is beyond the scope ofthis rulemaking. The commission appreciates the support expressed for the infrastructure study and the offer ofassistance.



### STATUTORY AUTHORITY These new rules are adopted under Texas Water Code, §5.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; Texas Water Code, §5.103, which authorizes the commission to adopt any rules necessary to carry outthe powers and duties under the provisions ofthe Texas Water Code and other laws ofthis state; and Texas Water Code, §5.105, which authorizes the commission by rule to establish and approve all general policy ofthe commission. These new rules are also adopted 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 ofthe Texas Clean Air Act; Texas Health and Safety Code, Texas Clean AirAct, §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 ofthe state's air; and Texas Health and Safety Code, Texas Clean Air Act, §382.012, which authorizes the commission to prepare and develop a**gener~l,** comprehensive plan for the control ofthe state's air. Finally, the adopted new rules are specifically authorized by SB 1759, 81st Legislature, 2009.

17

### The adopted new rules implement Texas Health and Safety Code, Chapter 391, as added by SB 1759 ofthe 81st Legislature, 2009.

18

# STAFF RECOMMENDATIONS

### SUBCHAPTER K: MOBD...E SOURCE INCENTIVE PROGRAMS DMSION 5: TEXAS CLEAN FLEET PROGRAM §§114.650- 114.658

§114.650. Definitions.

Unless specifically defmed in the Texas Clean Air Act {TCAA) or in the rules ofthe commission, the terms used in this subchapter have the meanings commonly ascribed to them in the field ofair pollution control. In addition to the terms that are defined by the TCAA and §§3 .2, 101.1, and 114.1 of this title (relating to Defmitions), the following words and terms, when used in this division will have the following meanings, unless the context clearly indicates otherwise.

( 1) Alternative fuel--A fuel, other than gasoline or diesel fuel. When used in this division, this defmition is limited to the following: electricity, compressed natural gas, liquefied natural gas, hydrogen, propane, or a mixture offuels containing at least 85% methanol by volume.

(2) Eligible entity--Any person or entity with a fleet of 100 or more vehicles that:

(A) are registered in Texas; and

(B) include at least 25 vehicles that are eligible for replacement.

(3) Golfcart--A motor vehicle designed by the manufacturer primarily for transporting persons on a golfcourse.



### 1(4) Heavy-duty vehicle--A motor vehicle with a gross vehicle weight rating greater than 8,500 pounds and containing an engine certified to the United States Environmental Protection Agency's heavy-duty engine standards.

(5) Hybrid vehicle--A motor vehicle with at least two different energy converters and two different energy storage systems on board the vehicle for the purpose ofpropelling the vehicle.

(6) Light-duty motor vehicle--A motor vehicle with a gross vehicle weight rating ofless than 10,000 pounds and certified to the United States Environmental Protection Agency's light-duty vehicle emission standards.

(7) Motor vehicle--A self-propelled device designed for transporting persons or property

on a public highway that is required to be registered under Texas Transportation Code, Chapter 502.

(8) Neighborhood electric vehicle--A motor vehicle that:

(A) is originally manufactured to meet, and does meet, the equipment requirements and safety standards established for "low-speed vehicles" in Federal Motor Vehicle Safety Standard No. 500 (49 Code ofFederal Regulations §571.500);

(B) is a slow-moving vehicle, as defined by Texas Transportation Code, §547.001 that is able to attain a speed ofmore than 20 miles per hour but not more than 25 miles per hour in one mile on a paved, level surface;

(C) is a four-wheeled motor vehicle;



### 2(D) is powered by electricity or alternative power sources;

(E) has a gross vehicle weight rating ofless than 3,000 pounds; and

(F) is not a golfcart.

(9) Program--The Texas Clean Fleet Program established under this division.

§114.651. Applicability.

(a) Any eligible entity that will replace 25 or more on-road diesel vehicles within a twelve-month period with qualifying vehicles may apply for a grant under the Texas Clean FleetProgram to offset the
cost ofreplacing those vehicles with alternative fuel or hybrid vehicles.

(b) The commission may allow a regional planning commission, council ofgovernments, or similar regional planning agency created under Local Government Code, Chapter 391, or a private nonprofit organization to apply for and receive a grant to improve the ability ofthe program to achieve its goals.

§114.652. Qualifying Vehicles.

(a) A qualifying vehicle is one that:

(1) is certified to current federal emissions standards;

(2) replaces a diesel-powered on-road vehicle ofthe same weight classification and use;


### 3

### and

(3) is a hybrid vehicle or fueled by an alternative fuel.

(b) As a condition ofreceiving a grant the qualifying vehicle must be continuously owned, registered, and operated in Texas by the grant recipient for at least five years from the date of reimbursement ofthe grant-funded expenses.

(c) A vehicle is not a qualifying vehicle ifit:

(1) is a neighborhood electric vehicle;

(2) has been used as a qualifying vehicle to qualify for a grant under this division for a previous reporting period or by another entity; or

(3) has qualified for a similar grant or tax 

### credit in anotherjurisdiction.

§114.653. Grant Eligibility.



### (a) To be eligible for a grant under the program a project must result in a reduction in emissions ofnitrogen oxides ofat least 25%, based on:

(1) the baseline emission level set by the executive director; and

(2) the certified emission rate ofthe new vehicle or engine.



### 4(b) The vehicle being replaced must:

( 1) be an on-road vehicle that has been owned, registered, and operated by the applicant in Texas for at least the two years immediately preceding the submission ofa grant application;

(2) satisfy any minimum average annual mileage or fuel usage requirements established by the executive director;

(3) satisfy any minimum percentage ofannual usage requirements established by the executive director; and

(4) be in operating condition with at least two years ofremaining useful life, as determined in accordance with criteria established by the executive director.

(c) At the discretion ofthe executive director, projects that result in a 25% reduction in other pollutants may be considered eligible for funding under this program.

(d) The executive director may establish additional criteria for purposes ofprioritizing projects for selection. Such criteria may include, but are not limited to:

(I) nonattainment status ofthe primary location in which the eligible vehicles are used; or

(2) cost per ton benefits ofthe overall emissions being reduced.



### §114.654. Usage and Disposition.



### 5(a) Not less than 75% ofthe annual use ofthe qualifying vehicle, either mileage or fuel use as determined by the executive director, must occur in Texas.

(b) A vehicle or engine replaced under this program must be rendered permanently inoperable in accordance with criteria established by the executive director.

§114.655. Grant Restrictions.

A recipient ofa grant under this division shall use the grant to pay the costs ofthe project for which the grant is made, which may include the initial cost ofthe alternative fuel or hybrid vehicle. The recipient shall not use the grant to pay the recipient's administrative expenses.

§114.656. Eligible Grant Amounts.

(a) The eligible grant amount for each heavy-duty on-road vehicle being replaced is determined

as follows:

( 1) 80% ofthe cost for replacement ofa vehicle with an engine manufactured prior to 1988 and certified to meet the federal emissions standards, ifany, applicable to the year ofmanufacture;

(2) 70% ofthe cost for replacement ofa vehicle with an engine manufactured after 1987 and before 1998 and certified to meet the federal emission standards applicable to the year of manufacture;

(3) 60% ofthe cost for replacement ofa vehicle with an engine manufactured after 1997 and before 2004 and certified to meet the federal emission standards applicable to year ofmanufacture;

6and

(4) 50% ofthe cost for replacement ofa vehicle with an engine manufactured after 2003 and certified to meet the federal emission standards applicable to the year ofmanufacture.



### (b) The eligible grant amount for each light-duty on-road vehicle being replaced is determined as follows:



### (1) 80% ofthe cost for replacement ofa light-duty diesel vehicle ofa model year prior to 1994 and certified to meet the federal emissions standards, ifany, applicable to the model year ofthe vehicle;

(2) 70% ofthe cost for replacement ofa light-duty diesel vehicle ofa model year after 1993 and before 2004 and certified to meet the federal emission standards applicable to the model year of the vehicle; and

(3) 60% ofthe cost for replacement ofa light-duty diesel vehicle ofa model year after 2003 and certified to meet the federal emission standards applicable to the model year ofthe vehicle.

(c) The executive director may revise the standards for determining grant amounts as needed to reflect changes to federal emission standards and decisions on pollutants ofconcern.

(d) To be eligible for replacement, vehicles and engines imported into the United States from another country must have met all applicable emissions certification requirements for importation.

§114.657. Reporting Requirements.



### 7

### Grant recipients must meet the reporting requirements oftheir grant, 

### which must occur no less 

### frequently than annually.

§114.658. Implementation Schedule.



### This division expires on August 31, 20 1 7.

8

### TExAs CoMMISSION oN ENVIRONMENTAL QuALITY

ORDER ADOPTING NEW RULES AND REVISIONS TO THE STATE IMPLEMENTATION PLAN

Docket No. 2009-1185-RUL On February 24, 2010, the Texas Commission on Enviromnental Quality (Commission), during a public meeting, considered adoption of new §§ 114.650

- 114.658 of 30 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, and corresponding revisions to the state implementation plan. The adoption will implement Senate Bill1759, 81st Legislature, 2009, Regular Session by adding the Texas Clean Fleet Program. This voluntary grant program is designed to encourage eligible entities to replace diesel-powered vehicles with alternative fuel or hybrid vehicles. Under Tex. Health & Safety Code Ann. §§ 382.011, 382.012, and 382.023 (Vernon 2008), the Commission has the authority to control the quality of the state's air and to issue orders consistent with the policies and purposes ofthe Texas Clean 

### Air Act, Chapter 382 ofthe Tex. Health & Safety Code. Notice of the proposed rules was published for comment in the October 23, 2009, issue of the Texas Register (34 TexReg 7295). Pursuant to Tex. Health & Safety Code Ann.§ 382.017 (Vernon 2001), Tex. Gov't Code Chapter 2001 (Vernon 2008), and 40 Code of Federal Regulations § 51.102, and after proper notice, the Commission conducted a public hearing to consider the new rules and revisions to the SIP. Proper notice included prominent advertisement in the areas affected at least 30 days prior to the date ofthe hearing. A public hearing was held in Austin on November 16,2009. The Commission 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 submit data, views, and recommendations on the proposed rule changes and corresponding revisions to the SIP, either orally or in writing, at the hearing or during the comment period. Prior to the scheduled hearing, copies of the proposed rule changes were available for public inspection at the Commission's central office and on the Commission's Web site. Data, views, and recommendations of interested persons regarding the proposed rule changes and the SIP revision were submitted to the Commission during the comment period, and were considered by the Commission as reflected in the analysis oftestimony incorporated by reference to this Order. The Commission finds that the analysis oftestimony includes the names ofall interested groups or associations offering comment on the proposed rule changes and the SIP revision and their position concerning the same. IT IS THEREFORE ORDERED BY THE COMMISSION that the new rules and revisions to the SIP incorporated by reference to this Order are hereby adopted. The Commission further authorizes staffto 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 ofthis Order, together with the adopted rules and revisions to the SIP, to the Regional Administrator ofEPA as a proposed revision to the Texas SIP pursuant to the Federal Clean 

### Air Act, codified at 42 U.S. Code Ann.§§ 7401 - 7671q, as amended. This Order constitutes the Order ofthe Commission required by the Administrative Procedure Act, Tex. Gov't Code, § 2001.033 (Vernon 2008). If any portion ofthis Order is for any reason held to be invalid by a court ofcompetentjurisdiction, the invalidity ofany portion shall not affect the validity of**~e** 

### remaining portions.

Date issued: 

# MAR O 1 2010 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

### ƇƇƇ property. Therefore, the 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 the adoption is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2), concerning rules subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies of the CMP beconsidered during the rulemaking process. The commission reviewed this action for consistency and determined the rulemaking for Chapter 114 does not impact any CMP goals or policies, because it revises a voluntary incentive grant program and does not govern air pollution emissions. The commission invited public comment regarding the consistency with the CMP during the public comment period. No comments were received regarding the consistency of the rules with the CMP. PUBLIC COMMENT A public hearing was scheduled for November 16, 2009, in Austin. The comment period closed on November 23, 2009. No oral or written comments were received at the hearing or during the comment period. STATUTORY AUTHORITY These amendments are adopted under Texas Water Code, §5.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; 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 Texas Water Code, §5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. These amendments are also adopted under Texas Health and Safety Code, §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Health and Safety Code; Texas Health and Safety Code, §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; Texas Health and Safety Code, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state’s air; and Texas Health and Safety Code, Chapter 386, which establishes the Texas Emissions Reduction Plan. Finally, these amendments are adopted as part of the implementation of House Bill 1796. The adopted amendments implement Texas Health and Safety Code, Chapter 386. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency’s legal authority. Filed with the Office of the Secretary of State on February 26, 2010. TRD-201000991 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: March 18, 2010 Proposal publication date: October 23, 2009 For further information, please call: (512) 239-6090


### DIVISION 5. TEXAS CLEAN FLEET PROGRAM 30 TAC §§114.650 - 114.658 The Texas Commission on Environmental Quality (commission) adopts new §§114.650 - 114.658. Sections 114.650 and 114.656 are adopted with changes to the proposed text as published in the October 23, 2009, issue of the Texas Register (34 TexReg 7295). Sections 114.651 - 114.655, 114.657, and 114.658 are adopted without changes to the proposed text and the text will not be republished.The new sections will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan (SIP). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES Senate Bill (SB) 1759, 81st Legislature, 2009, amended the Texas Health and Safety Code by adding Chapter 391, Texas Clean Fleet Program. This program is designed to encourage eligible fleets to replace diesel vehicles with alternative fuel or hybrid vehicles. Eligible entities that replace 25 or more on-road diesel vehicles with alternative fuel or hybrid vehicles may apply for a grant under the program to offset the cost of replacing those vehicles. SECTION BY SECTION DISCUSSION §114.650, Defi nitions Section 114.650 establishes the definitions specific to the Texas Clean Fleet Program, as required by Texas Health and Safety Code, §391.001. Since proposal, the commission revised the language in §114.650(1) to make it clear that only the fuels listed in this section are considered alternative fuels for purposes of this program. §114.651, ApplicabilitySection 114.651 establishes the applicability requirements as required by Texas Health and Safety Code, §391.002. These requirements outline entities that are eligible to apply for a grant under the program. §114.652, Qualifying Vehicles This section clarifies the types of vehicles that are and are not eligible for participation in the program, as required by Texas Health and Safety Code, §391.003. §114.653, Grant Eligibil ity Section 114.653 establishes grant eligibility requirements, as required by Texas Health and Safety Code, §391.005. These requirements establish use and ownership criteria of any vehicles being replaced, as well as the level of emissions that must beachieved in order to receive a grant under the program. Subsection (d) provides that the executive director may establish ad
### ADOPTED RULES March 12, 2010 35 TexReg 2195ditional criteria for purposes of prioritizing projects for selection, which may include, but are not limited to, nonattainment status of the primary location in which the eligible vehicles are used or cost per ton benefits of the overall emissions being reduced. §114.654, Usage and DispositionThis section outlines requirements regarding the use of new vehicles purchased through the program, as well as the disposal of vehicles being replaced, as required by T exas Health and Safety Code, §391.005. §114.655, Grant Restrictions As required by Texas Health and Safety Code, §391.006, this section outlines the allowable use of grant funds awarded under the program. §114.656, Eligible Grant Amounts As required by Texas Health and Safety Code, §391.007, thissection outlines the various eligible grant amounts allowed under the program based on the age and type of each vehicle being replaced. Since proposal, the commission revised the language for the funding categories to refer to the year of manufacture forheavy-duty vehicle engines and the model year for light-duty vehicles. The change was made to clarify the funding categories and make it easier for potential grant applicants to determine which category applies to their vehicle. The commission also added language to make it clear that vehicles manufactured in other countries that did not meet the emissions certification requirements for that vehicle and, therefore were imported illegally, are not eligible for replacement under this program. §114.657, Reporting Requir ements Section 114.657 identifies the reporting requirements, as required by Texas Health and Safety Code, §391.005. §114.658, Implementation Schedule Section 114.658 identifies the expiration date of the program, as stated in Texas Health and Safety Code, §391.008. FINAL REGULATORY IMPACT ANALYSIS DETERMINATIONThe commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined that this rule action is not subject to §2001.0225 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 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 new Chapter 114 rules are adopted in accordance with SB 1759, which added Texas Health and Safety Code, Chapter 391. The adopted rules add a new voluntary incentive program with the goal of reducing diesel emissions. The program offers financial incentives for the voluntary replacement of diesel engines. Because the adopted rules place no involuntary requirements on the regulated community, the adopted rules will not adversely affect in a material way 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. Also, none of the adopted new sections place additional financial burdens on the regulated community. 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. Texas Government Code, §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. Thisrulemaking does not exceed a standard set by federal law. In addition, this rulemaking does not exceed an express requirementof 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 contract to implement a state and federal program. The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment period. No comments were received regarding the commission’s determination of regulatory impact. TAKINGS IMPACT ASSESSMENT The commission evaluated this rulemaking action and 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 SB 1759. The new rules implement a voluntary program and only affect motor vehicles, which are not considered to be private real property. Therefore, promulgation and enforcement of the adopted rules is neither a statutory nor a constitutional taking because it does not affect private real property. Therefore, the 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 the adoption is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2), concerning Actions and Rules Subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies of the CMP be considered during the rulemaking process.The commission reviewed this action for consistency and determined the rulemaking for Chapter 114 does not impact any CMP goals or policies, because it adds a voluntary incentive grant program and does not govern air pollution emissions.The commission invited public comment regarding the consistency of the rules with the CMP. No comments were received regarding the consistency of the rules with the CMP. PUBLIC COMMENT The public hearing for this rulemaking was held on November 16, 2009, at 2:00 p.m. in Austin at the commission’s central office at 12100 Park 35 Circle. The comment period closed on November 23, 2009. The commission received comments from Clean Energy (Clean Energy) and EPA Region 6 (EPA). Clean Energy submitted oral and written comments in support of the rulemaking and provided recommendations for implemen

### 35 TexReg 2196 March 12, 2010 Texas Registertation of the new program. EPA submitted written comments in support of the rulemaking and recommended changes to clarify the provisions. RESPONSE TO COMMENTS EPA and Clean Energy both expressed support for the rules and the implementation of the new Texas Clean Fleet Program. The commission appreciates the support expressed for the rules and the new program.EPA commented that the new rules will contribute to the enhancement of air quality in the nonattainment areas where they are implemented. EPA also commented that emissions reductions claimed in the SIP from these new rules must be quantifi
able, surplus, permanent, and enforceable. The commission will ensure that any emissions reductions from this new program used to show progress towards meeting theSIP emissions reductions goals meet the creditability requirements. The commission did not make any changes to the rules in response to this comment.Clean Energy commented on the commission’s request for public comment under the discussion in the SECTION BY SECTION DISCUSSION of the proposed preamble. The commission solicited comments on a proposal to establish prioritizing criteria that would limit the commission to initially consider only grant projects that include vehicles with a primary location in a county that is located within an eight-hour ozone nonattainment area or near-nonattainment area that has submitted an early action compact plan. Clean Energy expressed support for giving prioritized consideration to projects in nonattainment and near-nonattainment areas. Clean Energy further commented that there are eligible fleets that operate for a substantial portion of the time traveling between nonattainment and near-nonattainment areas. Clean Energy recommended that these fleets be given the same consideration as a fleet operating only in a nonattainment or near-nonattainment area. The commission appreciates the support expressed for theprogram and the input provided regarding how the commission could best prioritize the selection of grant projects. The commission will consider these comments when developing the implementation plans and criteria for the initial grant round.Clean Energy commented that the estimates of the cost for alternative fuel vehicles in the FISCAL NOTE section of the proposed preamble were high. The preamble provided a cost estimate of between $20,000 and $150,000 for alternative fuel vehicles. Clean energy stated that the cost of an alternatively fueled vehicle ranges from $6,000 for light-duty vehicles such as the Honda Civic, $24,000 for medium-duty shuttles, and up to $100,000 for heavy-duty, Class 8, tractor trucks with 14.9L engines. Clean Energy appears to be referring to the difference in cost between an alternative-fuel vehicle and a similar gasoline-fuel or diesel-fuel vehicle. The cost estimates in the preamble were general estimates of the total costs for the purchase of an alternative-fuel vehicle. The commission did not change the cost estimates. Clean Energy agreed with the statement in the FISCAL NOTE section of the proposed preamble that the public benefit will beimproved air quality statewide since there will be additional opportunities to apply for grant funds to replace diesel vehicles with alternative-fuel options that have fewer emissions. The commission appreciates the support expressed for the program and agreement with the assessment of potential benefits of the program. EPA commented that it is an unfortunate coincidence that this program has the same name as a previous Texas Clean Fleet Program adopted in Texas, and subsequently repealed, under §182(c)(4) of the Texas Clean Air Act as amended in 1990. EPAexpressed hope that the use of the same name for this new program does not confuse the public. The name of the program was specified by SB 1759. Where appropriate, the commission will include statements in the grant materials to make it clear that this program is different from the earlier Texas Clean Fleet Program. Clean Energy expressed support for the proposed definitions in §114.650 tracking the statutory definitions. The commission appreciates the support expressed for the program.EPA questioned whether there is a typographical error in the definition of alternative fuel in §114.650(1), where it refers to "a mixture of fuels containing at least 85% methanol." The EPA asked whether this should read "ethanol" instead of "methanol." The definition in the rule is the same as stated in Texas Health and Safety Code, §391.001(1), as added by SB 1759. Ethanol is not included in the list. EPA asked whether the specified list of alternative fuels in §114.650(1) is all-inclusive or does the program allow for the use of other unspecified alternative fuels. The specified list of alternative fuels is all-inclusive. The commission has revised the language in §114.650(1) to make it clearthat only the fuels listed are considered alternative fuels for purposes of this program. Clean Energy expressed support for the proposed language in §114.651 and also suggested including clarifying language that local governments, such as regional transit agencies or school districts, may also apply for a grant. The commission appreciates the support expressed for the program. The definition of an eligible entity is included in§114.650(2) and is based on the statutory language. The commission will provide information in the grant materials to explain that all types of entities, including local governments, may be eligible to apply for a grant. The commission did not make any changes to the rules as a result of this comment. Clean Energy expressed support for the language in §114.652 regarding qualifying vehicles. Clean Energy also commentedregarding the limited amount of funding available for this program. Clean Energy recommended that the commission consider whether other Texas Emission Reduction Program (TERP) grant funding might be used to supplement a grant application that meets the requirements of both the TERP grant program and this program. In discussing the other TERP grant funding, CleanEnergy is referring to the Diesel Emissions Reduction Incentive Program established under Texas Health and Safety Code, Chapter 386. Clean Energy also commented that there may also be other sources of funding from other state or local sources thatmight be used in conjunction with this program, including programs of the Texas General Land Office Natural Gas Vehicle Incentive Program, the Federal American Recovery ReinvestmentAct of 2009, and the Congestion Mitigation Air Quality Improve
### ADOPTED RULES March 12, 2010 35 TexReg 2197ment Program implemented by the Federal Highway Administration.The commission appreciates the support expressed for the program. Regarding the recommendation about using other grants or financial incentives in conjunction with a grant from this program, joint funding with other TERP grants may not be feasible due to the unique requirements of each program, including funding allocation requirements, timing of the grants and purchases, location and use requirements, and the calculation and use of the emissions reductions under the different programs. The feasibility of joint funding with other financial incentive programs will depend upon the requirements of those programs. Also, any joint funding would need to be consistent with §114.652(c)(3),which states that a qualifying vehicle does not include a vehicle that has qualified for a similar grant or tax credit in another jurisdiction. The commission will consider Clean Energy’s recommendations when implementing the program and will include guidance in the grant implementation materials on the possible use of other financial incentives in conjunction with a grant from this program. Clean Energy expressed support for the language in §114.653regarding grant eligibility, including language allowing the executive director to adapt and modify implementation of the program quickly and respond to changing conditions. Clean Energy specifically expressed support for the flexibility granted the executive director to set baseline emission levels and to establish criteria which the vehicle being replaced must meet, including minimum annual mileage or fuel usage requirements, minimum percentage of annual usage requirements, and criteria for determining that the vehicle was in operating condition with at least two years of remaining useful life.The commission appreciates the support expressed for the program. Clean Energy expressed support for the language in §114.653(c), authorizing the executive director to also consider, at the executive director’s discretion, projects that result in a 25% reduction in pollutants other than nitrogen oxides (NOX), and the language in §114.653(d)(2), authorizing the executive director to prioritize projects based on the cost per ton benefits of the overall emissions being reduced. The commission appreciates the support expressed for the program. EPA also commented regarding authority granted the executive director in §114.653(c) to consider other pollutants in addition to NOX. The EPA questioned how the state would keep the emissions reductions in other pollutants separate from the NOX emissions reductions.The commission appreciates the support expressed for the program. Regarding the question raised by the EPA, the commission maintains a detailed database of all TERP project information and the emissions reductions associated with each project. If, in the future, the commission bases the grant eligibility on reductions in other pollutants in addition to or in place of NOX, the commission will be able to distinguish between and track the projects and the types of emissions that will be reduced by each project. EPA also asked about situations where the reduction in the other pollutant resulted in an increase in NOX. Regardless of the pollutant addressed under this program, the NOX emissions standards for vehicles purchased under this program will be more stringent or, at a minimum, the same as thestandards for the vehicles being replaced. Therefore, the commission does not anticipate a circumstance where the replacement of a vehicle under this program would result in an increase in NOX emissions when compared to the emissions of the vehicle being replaced. The commission did not make any changes to the rule in response to this comment. Clean Energy expressed support for the language in §114.654 regarding usage and disposition.The commission appreciates the support expressed for the program. Clean Energy expressed support for the language in §114.655regarding grant restrictions and also recommended that the commission clarify that a grant may also be used for labor to install emissions-reducing equipment, which is consistent with the statute.The commission agrees that SB 1759 authorizes the commission to include the reasonable and necessary expenses incurred for the labor needed to install emissions-reducing equipment. However, the purchase of emissions-reducing equipment is notan eligible grant activity under this program. Therefore, this language does not apply and would be confusing if included in the rules. The commission did not make a change to the rules as a result of this comment. EPA commented that clarification is needed in §114.656(a)(1) listing the eligible grant amounts based on the emissions certifi
cation of the vehicle or engine being replaced. EPA suggested that it would be helpful if the year of manufacture is specified for both federal and California emission standards. The commission agrees that the references to the categories of emissions standards for determining the eligible percentage of costs should be clarified. The commission has amended the language in §114.656(a) to refer to the year of manufacture of the heavy-duty on-road engines and in §114.656(b) to the model year of the light-duty on-road vehicles. Under the federal and California emissions certification requirements, heavy-duty onroad engines must have met the emissions standards applicable to the manufacture year of the engine and light-duty vehicles must have met the emissions standards applicable to the model year of the vehicle. The change in the rule language will helpclarify the appropriate funding category of the vehicle being replaced. EPA also commented that §114.656(a)(1)(B) and §114.656(b)(1)(A) and (B) could be interpreted to allow vehicles illegally imported into the United States to be eligible for replacement under the program. EPA explained that vehicles imported after the implementation of emission standards were required to meet the certification requirements in order to legally be imported into the United States. EPA expressed concern that the language authorizing funding for vehicles and engines not certified to a federal or California emissions standard could result in funding for imported vehicles that were required to, but did not meet, the emissions standards applicable to that vehicle. EPA recommended specifying the year of manufacture of heavy-duty on-road engines and the model year of light-duty on-road vehicles for federal and California emission standards and clarifying the requirements. The commission agrees that the language should be clarified. The commission has amended the language in §114.656(a) to refer to the year of manufacture of the heavy-duty on-road


### 35 TexReg 2198 March 12, 2010 Texas Registerengines and in §114.656(b) to the model year of the light-duty on-road vehicles. Heavy-duty on-road engines must have met the emissions standards applicable to the manufacture year of the engine and light-duty vehicles must have met the emissions standards applicable to the model year of the vehicle. The commission has removed the language referring to vehicles and engines not certified to meet a specific emissions standard. The commission has also added §114.656(d) to make it clear that non-compliant vehicles and engines imported into the country illegally would not be eligible for replacement under the program. EPA also asked what is meant by "voluntary emission certification standards" under §114.656(b)(1)(B). The references to voluntary emission certification standards pertain to the voluntary National Low Emission Vehicle (NLEV) standards. The NLEV came into effect through an agreement by northeastern states and the auto manufacturers to provide more stringent emission standards for the transitional period before the Tier 2 standards were introduced. The commission has amended the language in §114.656(b) to refer to the model year of the light-duty on-road vehicles and removed the references to voluntary emission certification standards. Clean Energy expressed support for the language in §114.656 regarding eligible grant amounts. Clean Energy also expressedsupport for §114.656(c) authorizing the executive director to revise the standards for determining grant amounts in order to reflect changes to federal emissions standards and decisions on pollutants of concern.The commission appreciates the support expressed for this program. Clean Energy expressed support for the language in §114.657 regarding reporting requirements. The commission appreciates the support expressed for this program. Clean Energy expressed support for the language in §114.658 regarding the expiration date of these rules.The commission appreciates the support expressed for this program. Clean Energy expressed support for development of new grant program procedures and new grant application forms that aredifferent from the other TERP grant forms. Clean Energy recommended that the procedures and application requirements be tailored to large fleets and that many of the details currently required in an application for a TERP grant may not be necessary for an application under this program. Clean Energy expressed its opinion that the needs of the applicants under theTERP grants and the applicants under this program are very different and that the application process should also be different. This comment pertains to implementation procedures and requirements and not a rule provision. The commission is cognizant of the need to not make the application process any more complicated than is necessary to effectively implement the program. The commission will consider these comments when developing the application materials, requirements, and procedures. Clean Energy commented that for a TERP grant, the applicant is required to expend the time and resources needed to compile and submit a substantial amount of information on each vehicle identified in the application. Clean Energy expressed its opinion that this amount of information may be appropriate for an applicant with one or two vehicles. Clean Energy explained that because an applicant under this program will be providing information on 25 or more vehicles, the applicant may have a substantial investment in compiling that information without any indication whether the investment in compiling the application may be worthwhile. Clean Energy recommended that the commission consider allowing an applicant under this program to initially just provide basic information and that the commission pre-review the application to let the applicant know if it appears that the applicant will qualify for a grant. Clean Energy expressed its opinion that a pre-review of an application would be useful in attracting good projects from fleet operators who may not otherwise be willing to submit a grant application, given the time and resources it takes to submit an application. This comment pertains to implementation procedures and requirements and not a rule provision. The commission is cognizant of the need to not make the application process any more complicated than is necessary to effectively implement the program. The commission will consider these comments when developing the application materials, requirements, and procedures. However, because vehicle eligibility and the eligible grant amount is dependent on the specific characteristics of the vehicle being replaced, a pre-review of the applicant’s information will be of limited value unless detailed information about each vehicle to be included in the application is provided. Clean Energy also expressed support for the provisions of SB 1759 directing the commission to study the amount of emissions reductions achieved from alternative-fueling infrastructure and to request that the EPA consider whether emissions reductioncredit can be attributed to the installation and use of the infrastructure. Clean Energy stated that it is prepared to assist in any way it can.This comment is beyond the scope of this rulemaking. The commission appreciates the support expressed for the infrastructure study and the offer of assistance. STATUTORY AUTHORITY These new rules are adopted under Texas Water Code, §5.102, which provides the commission with the general powers to carry out its duties under the Texas Water Code; Texas Water Code, §5.103, which authorizes the commission to adopt any rulesnecessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and Texas Water Code, §5.105, which authorizes the commission byrule to establish and approve all general policy of the commission. These new rules are also adopted under Texas Health and Safety Code, T exas Clean Air Act, §382.017, which authorizesthe commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; Texas Health and Safety Code, 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; and Texas Health and Safety Code, Texas Clean Air Act, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state’s air. Finally, the adopted new rules are specifically authorized by SB 1759, 81st Legislature, 2009. The adopted new rules implement Texas Health and SafetyCode, Chapter 391, as added by SB 1759 of the 81st Legislature, 2009. §114.650. De finitions. 

### ADOPTED RULES March 12, 2010 35 TexReg 2199

### ƇƇƇ 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 §§3.2, 101.1, and 114.1 of this title (relating to Definitions), the following words and terms, when used in this division will have the following meanings, unless the context clearly indicates otherwise. (1) Alternative fuel--A fuel, other than gasoline or diesel fuel. When used in this division, this definition is limited to the following: electricity, compressed natural gas, liquefied natural gas, hydrogen, propane, or a mixture of fuels containing at least 85% methanol by volume. (2) Eligible entity--Any person or entity with a fleet of 100 or more vehicles that: (A) are registered in Texas; and (B) include at least 25 vehicles that are eligible for replacement.(3) Golf cart--A motor vehicle designed by the manufacturer primarily for transporting persons on a golf course.(4) Heavy-duty vehicle--A motor vehicle with a gross vehicle weight rating greater than 8,500 pounds and containing an engine certified to the United States Environmental Protection Agency’s heavy-duty engine standards.(5) Hybrid vehicle--A motor vehicle with at least two different energy converters and two different energy storage systems on board the vehicle for the purpose of propelling the vehicle. (6) Light-duty motor vehicle--A motor vehicle with a gross vehicle weight rating of less than 10,000 pounds and certified to the United States Environmental Protection Agency’s light-duty vehicle emission standards. (7) Motor vehicle--A self-propelled device designed for transporting persons or property on a public highway that is required to be registered under Texas Transportation Code, Chapter 502. (8) Neighborhood electric vehicle--A motor vehicle that: (A) is originally manufactured to meet, and does meet,the equipment requirements and safety standards established for "lowspeed vehicles" in Federal Motor Vehicle Safety Standard No. 500 (49 Code of Federal Regulations §571.500); (B) is a slow-moving vehicle, as defined by Texas Transportation Code, §547.001 that is able to attain a speed of more than 20 miles per hour but not more than 25 miles per hour in one mile on a paved, level surface; (C) is a four-wheeled motor vehicle; (D) is powered by elect ricity or alternative power sources; (E) has a gross vehicle weight rating of less than 3,000 pounds; and (F) is not a golf cart. (9) Program--The Texas Clean Fleet Program established under this division. §114.656. Eligible Gr ant Amounts.(a) The eligible grant amount for each heavy-duty on-road vehicle being replaced is determined as follows: (1) 80% of the cost for replacement of a vehicle with an engine manufactured prior to 1988 and certified to meet the federal emissions standards, if any, applicable to the year of manufacture; (2) 70% of the cost for replacement of a vehicle with an engine manufactured after 1987 and before 1998 and certified to meet the federal emission standards applicable to the year of manufacture; (3) 60% of the cost for replacement of a vehicle with an engine manufactured after 1997 and before 2004 and certified to meet the federal emission standards applicable to year of manufacture; and(4) 50% of the cost for replacement of a vehicle with an engine manufactured after 2003 and certified to meet the federal emission standards applicable to the year of manufacture. (b) The eligible grant amount for each light-duty on-road vehicle being replaced is determined as follows: (1) 80% of the cost for replacement of a light-duty diesel vehicle of a model year prior to 1994 and certified to meet the federal emissions standards, if any, applicable to the model year of the vehicle; (2) 70% of the cost for replacement of a light-duty diesel vehicle of a model year after 1993 and before 2004 and certified to meet the federal emission standards applicable to the model year of the vehicle; and (3) 60% of the cost for replacement of a light-duty diesel vehicle of a model year after 2003 and certified to meet the federal emission standards applicable to the model year of the vehicle.(c) The executive director may revise the standards for determining grant amounts as needed to reflect changes to federal emission standards and decisions on pollutants of concern.(d) To be eligible for replacement, vehicles and engines imported into the United States from another country must have met all applicable emissions certification requirements for importation. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency’s legal authority. Filed with the Office of the Secretary of State on February 26, 2010. TRD-201000990 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: March 18, 2010 Proposal publication date: October 23, 2009 For further information, please call: (512) 239-6090 

### TITLE 34. PUBLIC FINANCE 

## PART 4. EMPLOYEES RETIREMENT SYSTEM OF TEXAS CHAPTER 71. CREDITABLE SERVICE 34 TAC §71.14 The Employees Retirement System of Texas (ERS) adopts amendments to 34 TAC §71.1 4, concerning Payments to Establish or Reestablish Service Credit, without changes to the proposed text as published in the December 25, 2009, issue 

### 35 TexReg 2200 March 12, 2010 Texas Register