Bryan W. Shaw, Ph.D., Chairman 

Buddy Garcia, Commissioner 

Carlos Rubinstein, Commissioner 

Mark R. Vickery, P.G., Executive Director 10 APR -2 PM 12: 5~ 

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

Protecting Texas by Reducing and Preventfng Pollution 

March 25,2010 

Dr. Alfredo Armendariz, Regional Administrator 

U.S. Environmental Protection Agency - Region 6 

1445 Ross A venue 

Dallas, Texas 75202-2733 

Dear Dr. Arm.endriz: 

Docket No. 2009-1186-RUL 

Rule Project No. 2009-048-114-EN 

On February 24, 2010, the Texas Commission on Environmental Quality (Commission) adopted revisions to the 

state implementation plan (SIP). 

The Commission adopted new §114.620 and §114.622 of 30 TAC Chapter 114 and corresponding revisions to 

the SIP. The adoption implements House Bill 1796, 81st Legislature, 2009, Regular Session by adding a 

definition for stationary engines and clarifying requirements for projects involving non-road equipment used for 

natural gas recovery purposes. 

Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record of the public 

hearing, and the accompanying order. I look forward to your expeditious approval of this SIP revision. 

Sincerely, 

~~~ Chairman 

BS/br 

Enclosures 

cc: The Honorable Rick Perry, Governor of Texas 

Mr. Toby Baker, Office of Budget, Planning and Policy, Office of the 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. 2009-1186-RUL 

1RE STATE OF TEXAS 

COUNTY OF TRAVIS 

This is to certify that the attached are true and correct copies of documents for revisions to the Texas 

State Implementation Plan, adopted on February 24, 2010, pursuant to 40 Code of Federal Regulations (C.F.R.) 

§ 51.104. I am the records administrator for the Air Quality Division of the Texas Commission on 

Environmental Quality (Commission). 

+D~~ Air Quality Division 

Texas Commission on Environmental Quality 
Texas Commission on Environmental Quality 

Public Hearing 

November 16, 2009 

Conceming Revisions to 30 TAC Chapter 114 

Control of Air Pollution from Motor Vehicles 

Emission Reduction Incentive Grants 

Rule Project No. 2009-048-114-EN 
INTRODUCTION 

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 amendments implt:ment Senate Bill1759, 81st Legislature, 2009, Regular 

Session, by adding a definition for stationacy engines and clarifying the requirements for projects involving 

non-road equipment used for natural gas recovery purposes. 

The comment period closed on November 23,2009. All testimony and comments have been reviewed and 

seriously considered. This hearing record contains a ~~omplete record of the 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 of this hearing record are maintained in the TCEQ central office at 121 00 Park 3 5 Circle, 

Austin, Texas 78753. For further information, ple~;e contact Steve Dayton at (512) 239-6824. 
PUBLIC 

NOTIFICATION AND 

PROPOSAL 
PUBLIC 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 7291). 

3. Publication of the Notice of Public Hearing in the December 29, 2006, issue of the Texas 

Register (34 TexReg 7385). 

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 of Austin, 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 Services 
East 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 

' Perlons - . ID it- IBid tile h:lu who ~ Sllldll · cammuniCIIIIlll or atiW ICalftlmodatlan llllds lhoUkl 

·.=~~ ~512 ~0779. R. '". . should be made-as . r In advance as pat' 

; slb&e. . , ' .·':.-t.· , Comments rillY be suit-

' mined .ID DeVon RYIRI ·. MC 205, Ofllcl c1 l.iall . !l_ervices, Ttl~~$ Comnit- . SIDil on ErMronrnantal -. oQullllly, RO. 8ox 131187, ' I Austin, Tau . 7W· r , 3087, ar fulld ID (512) l' 

· 239·4808. Electron!~ · . . · commenll lillY be sutt- 1 • 

mitted at http: /I, -ws.tt:eq.state.bt.us/ · · ruies/ICOIIIrnents. RJe :· size restrictions lillY 1

' 

. ply ID commiiiiS .:: m1tted through the .. eComments systlrn. All ; comi!IIIIIS IIIOuld rtflr- 1

: 

~ Rule PI'Qilc:t Num- ! . • bar 2009-048·114-EN •. The =mllllllt Plriod 

CIDHS November 23, ' 

2009. To view ruiiL ; please visit http:/ I www. tceq .state. tx.us/ 

nav/rulu/pro· 

PDA.Jidopt.h,tml. FarM- I l!ler mformelion or que- . tiOI1S concemins this ; : prapGSIII, P!- i:attlc:t, 

'

, SleJ!hln Dayton._ Air 

Q .. JitY Division .unllle- . cmenlalion Granll Sec- . 'lion, It 512·23~4. 
• • • 

Notice of a Public Hearing on Proposed Revisions to 30 TAC 

Chapter 114 

The Texas Commission on Environmental Quality (commission) will 

conduct a public hearing to receive testimony regarding proposed revisions to 30 Texas Administrative Code (TAC) Chapter 114, Control 

of Air Pollution From Motor Vehicles, and to the state implementation plan (SIP). These revisions 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, 

§51.1 02, of the United States Environmental Protection Agency (EPA) 

regulations concerning SIPs. 

The proposed rulemaking would implement House Billl796, 81 st Legislature, 2009, by adding a definition for stationary engines and clarifying requirements for projects involving non-road equipment used for 

natural gas recovery purposes. 

A public hearing on this proposal will be held in Austin on November 

16, 2009 at 10:00 a.m. in Building E, Room 201 at the commission's 

central office 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, Office of Legal Services at (512) 239-0779. Requests should be made as 

far in advance as possible. · 

Comments may be submitted to Devon Ryan, 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://wwwS.tceq.state.tx.uslrules/ecomments. File size restrictions 

may apply to comments submitted through the eComments system. All 

comments should reference Rule Project Number 2009-048-114-EN. 

The comment period closes November 23, 2009. To view rules, 

please visit http:l!www.tceq.state.tx.us!navlru/eslpropose _ adopt.html. 

For further information or questions concerning this proposal, please 

contact Steve Dayton, Air Quality Division, at (512) 239-6824. 

TRD-200904574 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Filed: October 9, 2009 

• • 

Notice of a Public Hearing on roposed Revisions to 30 TAC 

Chapters 290 and 291 

The Texas Commission on Enviro ental Quality (TCEQ or commission) will conduct a public hearing o receive testimony regarding proposed revisions to 30 Texas A · 'strative Code (TAC) Chapter 290, 

Public Drinking Water, and Chapte 291, Utility Regulations. These revisions are proposed under the req ments ofTexas Health and Safety 

Code, Chapter 372, Texas WaterC , §13.506(b), and Texas Government Code, Chapter 2001, Subcha r B. 

The proposed rulemaking would · plement House Bill (HB) 2667, 

81 st Legislature, 2009, Regular Ses on, concerning plumbing fixtures. 

The proposed rulemaking clarifies and establishes the performance, 

testing, and labeling requirements o the American Society ofMechanical Engineers, the Canadian Stan ds Association, and the American 

National Standards Institute. HB 26 7 establishes a phase-in of plumbing fixtures that meet the new perf1 ance requirements and are sold 

for use in the State of Texas. The base-in will allow manufacturers 

time to change their production, w 'le also allowing retailers the opportunity to tum over their invento . HB 2667 creates an exemption 

for those manufacturers that have certified by the United States 

·Environmental Protection Agency' WaterSense Program. HB 2667 

repeals the TCEQ's certification p ss for plumbing fixtures and the 

fees associated with the listing sin the plumbing fixtures must meet 

national certification and testing p dures. 

The commission will hold a public earing on this proposal in Austin 

on November 17, 2009 at 10:00 a. . in Building E, Room 201S, at 

the commission's central office lo d at 12100 Park 35 Circle. The 

hearing is structured for the receipt f oral or written comments by interested persons. Individuals may ~ sent oral statements when called 

upon in order of registration. Ope discussion will not be permitted 

during the hearing; however, co ion staff members will be available to discuss the proposal30 min tes prior to the hearing. 

Persons who have special comm 'cation or other accommodation 

needs who are planning to attend th hearing should contact Charlotte 

Horn, Office of Legal Services at (5 2) 239-0779. Requests should be 

made as far in advance as possible. 

Written comments may be sub tied to Jessica Rawlings, MC 

205, Office of Legal Services, Te as Commission on Environmental Quality, P.O. Box 13087, Au in, Texas 78711-3087, or faxed 

to (512) 239-4808. Electronic mments may be submitted at: 

http://wwwS.tceq.state.tx.us/ru/esle mmentsl. File size restrictions may apply to comments be· g submitted via the eComments 

system. All comments should ference Rule Project Number 

2009-038-290-PR. The comment period closes November 23, 

2009. Copies of the proposed rule · can be obtained from the 

commission's Web site at http:/, .tceq.state.tx.uslnav!rules!propose_adopt.html. For further · ormation, please contact Scott 

Swanson, Water Rights Section, (51 ) 239-0703. 

TRD-200904551 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environments Quality 

Filed: October 9, 2009 

• • • 

Notice of Open Meeting Conce ing Boat Sewage Disposal 

Senate Bill (SB) 2445, 81 st Legisla , 2009, requires the Texas Commission on Environmental Quality CEQ) to change rules contained 

in 30 Texas Administrative Code ( C) Chapter 321 to address new 

definitions of"boat, boat pump-out 'on, shore side, mobile, or floating installation, and surface water in e state" and a change in the frequency of certifications for pump-o t stations. TCEQ is proposing an 

open meeting to obtain input from e public on the changes required 

by SB 2445. TCEQ requests info ation on ways to implement the 

new rules. Staff is considering the peal and proposal of a new 30 

TAC Chapter 321, Control ofCe Activities by Rule, Subchapter 

A, Boat Sewage Disposal, by amen ing the fee structure. In addition, 

the rules would prohibit the disc e of treated water from marine 

sanitation devices into all enclosed shwater lakes or bodies of water 

(including rivers that do not support interstate vessel traffic) in Texas, 

IN ADDITION October 23, 2009 34 Tex.Reg 7385 
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 by Reducing and Preventing Pollution 

NOTICEOFAPUBUCHE~GON 

PROPOSED REVISIONS 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 revisions to 30 Texas Administrative Code (TAC) Chapter 114, Control of 

Air Pollution From Motor Vehicles, and to the state implementation plan (SIP). These revisions 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 House Bill 1796, 8lst Legislature, 2009, by adding a 

definition for stationary engines and clarifying requirements for projects involving non-road equipment 

used for natural gas recovery purposes. 

A public hearing on this proposal will be held in Austin on November 16, 2009 at 10:00 a.m. in Building 

E, Room 201 at the commission's central office 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, Office of Legal Services at (512) 239-0779. Requests should be made as 

far in advance as possible. 

Comments may be submitted to Devon Ryan, MC 205, Office of Legal Services, Texas CoiiliDiision 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.uslrules/ecomments. File size 

restrictions may apply to comments submitted through the eComments system. All comments should 

reference Rule Project Number 2009-048-114-EN. The comment period closes November 23, 2009. To 

view rules, please visit http:/lwww.tceq.state.tx.uslnav/ruleslpropose_adopt.html. For further information 

or questions concerning this proposal, please contact Stephen Dayton, Air Quality Division 

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 
As required by Texas Government Code §2006.002(c), OIEC 

has determined that the proposal will not have an adverse economic effect on small or micro-business. This section is being 

proposed as required by Texas Government Code §§661.002 -

661.082. This rule will be for internal use of OIEC staff only. 

OIEC has determined that this proposal is not a "major environmental rule" as defined by Texas Government Code §2001.0225 

and therefore a regulatory flexibility analysis is not required. 

OIEC has determined that no private real property interests are 

affected by this proposal and that this proposal does not restrict 

or limit an owner's right to property that would otherwise exist 

in the absence of government action. Therefore, this proposal 

does not constitute a taking or require a takings impact assessment under Texas Government Code §2007.043. 

To be considered, written comments on the proposal must be 

submitted no later than 5:00 p.m. on November 22, 2009, to 

Brian White, Deputy Public Counsel, Office of Injured Employee 

Counsel, Mail Code 50, 7551 Metro Center Drive, Austin, Texas 

78744. A request for a public hearing should be submitted separately to the Deputy Public Counsel. 

Section 276.4 is proposed pursuant to Texas Government 

Code §§661.001 - 661.008 and Texas Labor Code §404.106. 

Texas Government Code §661.001 provides for definitions for 

Subchapter A. Section 661.002 provides for the establishment 

and administration of the sick leave pool. Section 661.003 

provides guidelines for contribution to the sick leave pool. 

Section 661.004 provides guidance on the use of time in the 

pool. Section 661.005 provides guidelines for withdrawal of time 

from the pool. Section 661.006 provides for the limitation of 

withdrawal from the sick leave pool. Section 661.007 provides 

for equal treatment of leave used from the sick leave pool. 

Section 661.008 provides the estate of the deceased is not 

entitled to payment of unused time withdrawn by the deceased 

employee. Texas Labor Code §404.106 provides the Public 

Counsel rulemaking authority to adopt rules. 

The following sections are affected by this proposal: 28 TAC 

§276.4 - Texas Government Code §§661.002 - 661.082 and 

Texas Labor Code §404.006. 

§276.4. Sick Leave Pool. 

A sick leave pool is established to alleviate hardship caused to an employee and employee's immediate family if a catastrophic illness or 

injury forces the employee to exhaust all sick leave earned by the employee and to lose compensation from the state. 

ill The Deputy Public Counsel is designated as the pool 

administrator. 

ill The pool administrator shall develop and administer a 

procedure for the administration of this section. 

ill Operation of the pool shall be consistent with Chapter 

661 of the Te11:as Government Code. 

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 7, 2009. 

TRD-200904511 

Brian M. White 

Deputy Public Counsel 

Oflice of Injured Employee Counsel 

Earliest possible date of adoption: November 22, 2009 

For further information, please call: (512) 804-4182 

• • •• 

TITLE 30. ENVIRONMENTAL QUALITY 

PART 1. TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 

CHAPTER 114. CONTROL OF AIR 

POLLUTION FROM MOTOR VEHICLES 

SUBCHAPTER K. MOBILE SOURCE 

INCENTIVE PROGRAMS 

DIVISION 3. DIESEL EMISSIONS 

REDUCTION INCENTIVE PROGRAM 

FOR ON-ROAD AND NON-ROAD VEHICLES 

30 TAC §114.620, §114.622 

The Texas Commission on Environmental Quality (TCEQ, 

agency, or commission) proposes amendments to §114.620 

and §114.622. · 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE RULES 

The 77th Texas Legislature, 2001, enacted Senate Bill 5 establishing the Texas Emissions Reduction Plan (TERP), which provides financial incentives for reducing emissions of on-road and 

non-road motor vehicles and equipment. House Bill (HB) 1796, 

81st Texas Legislature, 2009, amended the Texas Health and 

Safety Code, Chapter 386, TERP Program to add a definition for 

stationary engine and to clarify requirements for projects involving non-road equipment used for natural gas recovery purposes. 

SECTION BY SECTION DISCUSSION 

§114.620, Definitions 

Section 114.620 is amended to add a definition for stationary 

engine as required by Texas Health and Safety Code, §386.001. 

Texas Health and Safety Code, §386.001 was amended by 

adding Texas Health and Safety Code, §386.001 (10-a), which 

states: stationary engine means a machine used in non-mobile 

applications that converts fuel into mechanical motion, including 

turbines and other internal combustion devices. 

§114.622, Incentive Program Requif9ments 

Section 114.622 is amended to clarify requirements for projects 

related to non-road equipment used for natural gas recovery 

purposes, as required by Texas Health and Safety Code, 

§386.104(c). 

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, but not for other units of state or local government as 

a result of administration or enforcement of the proposed rules. 

PROPOSED RULES October 23,2009 34 TexReg 7291 
The agency will utilize available funding appropriated out of the 

TERP Account 5071 to implement the proposed rules. 

The proposed rules amend Chapter 1·14 to implement certain 

provisions of HB 1796. The proposed rules add the definition 

of stationary engine as provided by HB 1796. This change will 

authorize the agency to fund projects involving stationary gas 

turbine engines under the TERP progmm. The proposed rules 

also provide that for projects involving n<m-road equipment used 

for natural gas recovery purposes, the Etquipment must be operated in a nonattainment area or affectEd county for a sufficient 

amount of use in order to meet the sta;:utory cost effectiveness 

requirements. This provision would exempt this equipment from 

the requirement that the equipment oPE•rate at least 75% of the 

annual use in the nonattainment areas nnd affected counties for 

at least five years. 

The TERP incentive grant program is .applicable to 41 eligible 

counties in the state. The addition of eligible projects involving 

stationary gas turbine engines will require the agency to consider 

and fund a wider variety of projects u:;ing appropriated funds 

from the TERP Account 5071. The addition of eligible projects 

will affect the overall allocation of grant funding in the TERP program and may reduce the amount of grant money available for 

some governmental entities. However, the new projects are expected to reduce nitrogen oxide (NO.), tt,us forwarding the TERP 

goal of reducing NO, emissions. 

It is anticipated that the addition of eUgib le projects involving stationary engines will mostly affect gas 'turbine engines on gas 

pipeline compressors. At this time it is not known if any units 

of state or local government own or OPEtrate these types of stationary engines. Owners or operators of affected gas turbine engines may be eligible to apply for grant ·funding if those engines 

meet grant requirements. The amount of grant funds will vary 

widely depending on the operating conditions of each grant applicant. TERP reimbursement for enginn replacement or retrofit 

cost is estimated to range from $30,000 to more than $150,000 

depending upon the amount of emission reductions achieved. 

PUBLIC BENEFITS AND COSTS 

Nina Chamness also determined that fur each year of the first 

five years the proposed rules are in effe,ct, the anticipated public benefit from the changes seen in the' proposed rules will be 

improvement in air quality in the 41 counties eligible to receive 

TERP incentive grant funding. 

The proposed rules are anticipated to affuct stationary engines in 

the 41 TERP eligible counties. Owners 1)r operators of affected 

gas turbine engines may be eligible to apply for grant funding if 

those engines meet grant requirements. It is anticipated that this 

change will mostly affect stationary gas turbine engines on gas 

pipeline compressors. At this time, staff IS not able to determine 

how many businesses or individuals own stationary engines and 

therefore may be eligible for TERP grant funding. Those that are 

eligible for funding may apply for funds lo replace or retrofit the 

equipment if that equipment is determined to be eligible for a 

diesel emission incentive grant. The amount of the grant funds 

will vary widely depending on the operating conditions of each 

grant applicant. TERP reimbursement for engine replacement 

or retrofit cost is estimated to range from $30,000 to more than 

$150,000 depending upon the amount ,:>f emission reductions 

achieved. 

No significant fiscal implications are anticipated for businesses 

with natural gas recovery interests due to the proposed change, 

which will allow the commission to set tte minimum project life 

34 TexReg 7292 October 23, 2()'09 Texas Register 

requirements for non-road equipment used for natural gas recovery purposes. 

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT 

No adverse fiscal implications are anticipated for small or microbusinesses as a result of the proposed rules. The proposed rules 

are expected to affect owners or operators of stationary engines 

in the 41 TERP eligible counties. It is further anticipated that this 

change will mostly affect stationary gas turbine engines on gas 

pipeline compressors. Any small or micro-businesses that own 

or operate stationary engines on gas pipeline compressors may 

be eligible to apply for grant funding if those engines meet grant 

requirements. 

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 by 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 

The 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 amended Chapter 114 rules are proposed in accordance 

with HB 1796, which amended Texas Health and Safety Code, 

Chapter 386. The proposed rules add a new definition for 

stationary engine and clarify requirements for projects involving 

non-road equipment used for natural gas recovery purposes. 

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, a sector of the 

economy, productivity, competition, jobs, the environment, or 

the public health and safety of the state or a sector of the state. 

In addition, none of these amendments 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 environmental 

rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) 

exceed an express requirement of state law, unless the rule is 

specifically required by federal law; 3) exceed a requirement of 

a delegation agreement or contract between the state and an 
agency or representative of the federal government to implement 

a state and federal program; or 4) adopt a rule solely under the 

general powers of the agency instead of under a specific state 

law. This rulemaking does not exceed a standard set 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 of 

this preamble. Finally, this rulemaking does not exceed a requirement of a delegation agreement or contract to implement a 

state or 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 SUBMITIAL 

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 

HB 1796. The rules make revisions to a voluntary program 

and only affect motor vehicles and equipment that 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 propo~ rulemaking and found 

the proposal 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 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 revises 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 SUBMITIAL 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 10:00 a.m. in Building E, Room 

201 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 oral 

statements 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 Hom, Office of Legal Services at (512) 239-0779. Requests should be made as far in advance as possible. 

SUBMITIAL OF COMMENTS 

Written comments may be submitted to Devon Ryan, 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:llwww5.tceq.state.tx.uslrules/9comments/. 

File size restrictions may apply to comments being submitted 

via the eComments system. All comments should reference 

Rule Project Number 2009-048-114-EN. The comment period 

closes on November 23, 2009. Copies of the proposed rulemaking can be obtained from the commission's Web site at 

http://www.tceq.state.tx. uslnavlru/eslpropose_adopt:html. For 

further information, please contact Steve Dayton, Air Quality 

Division, (512) 239-6824 or sdayton@tceq.state.tx.us. 

STATUTORY AUTHORITY 

These amendments are proposed under Texas Water Code, 

§5.1 02, which provides the commission with the general powers 

to carry out its duties under the Texas Water Code; Texas Water 

Code, §5.1 03, which authorizes the commission to adopt any 

rules necessary to carry out the powers and duties under the 

provisions of the Texas Water Code and other laws of this 

state; and 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 proposed 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; §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; §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 proposed as part of the 

implementation of House Bill 1796. 

The proposed amendments implement Texas Health and Safety 

Code, Chapter 386. 

§ 114.620. Definitions. 

Unless specifically defined in the Texas Clean Air Act (TCAA) or in 

the rules of the commission, the terms used in this subchapter have 

the meanings commonly ascribed to them in the field of air pollution 

control. In addition to the terms which are defined by the TCAA and 

§§3.2, 101.1, and 114.1 of this title (relating to Definitions), the following words and terms, when used in this division shall have the following 

meanings, unless the context clearly indicates otherwise. 

(1) Cost-effectiveness--The total dollar amount expended 

divided by the total number of tons of nitrogen oxides emissions reduction attributable to that expenditure. In calculating cost-effectiveness, 

one-time grants of money at the beginning of a project shall be annualized using a time value of public funds or discount rate determined for 

each project by the commission, taking into account the interest rate on 

bonds, interest earned by state funds, and other factors the commission 

considers appropriate. 

(2) Guidelines--Texas Emissions Reduction Plan: Guidelines for Emissions Reduction Incentive Grants Program (RG-388) 

adopted by the commission under Texas Health and Safety Code, 

§386.053, as amended. 

(3) Incremental cost-The cost of an applicant's project less 

a baseline cost that would otherwise be incurred by an applicant in the 

normal course of business and may include added lease or fuel costs as 

well as additional capital costs. 

PROPOSED RULES October 23, 2009 34 Tex.Reg 7293 
(4) 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. 

( 5) Non-road diesel--A vehicle or piece of equipment, excluding a motor vehicle or on-road diesel, that is powered by a nonroad engine, including: non-road non-recreational equipment and vehicles; construction equipment; locomotives; marine vessels; and other 

high-emitting diesel engine categories. 

(6) Non-road engine--An internal combustion engine that 

is in or on a piece of equipment that is self-propelled or that propels 

itself and performs another function, excluding a vehicle that is used 

solely for competition, or a piece of equipment that is intended to be 

propelled while performing its function, or a piece of equipment designed to be and capable of being carried or moved from one location 

to another. 

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

(8) QualifYing fuel--Any liquid or gaseous fuel or additives 

registered or verified by the United States Environmental Protection 

Agency that is ultimately dispensed into a motor vehicle or on-road or 

non-road diesel that provides reductions of nitrogen oxides emissions 

beyond reductions required by state or federal law. 

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

(10) Retrofit--To equip an engine and fuel system with new 

emissions-reducing parts or technology verified by the United States 

Environmental Protection Agency after manufacture of the original engine and fuel system. 

(11) Small business--A business owned by a person who: 

(A) owns and operates not more than two vehicles, one 

of which is: 

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

or 

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

(B) has owned the on-road or non-road diesel for more 

than one year. 

ill)_ Stationary engine-A machine used in non-mobile applications that converts fuel into mechanical motion, including turbines 

and other internal combustion devices. 

§114.622. Incentive Program Requirements. 

{a) Eligible projects include: 

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

(2) emissions-reducing retrofit projects for on-road or nonroad diesels; 

(3) emissions-reducing repower projects for on-road or 

non-road diesels; 

{4) purchase and use of emissions-reducing add-on equipment for on-road or non-road diesels; 

(5) development and demonstration of practical, low-emissions retrofit technologies, repower options, and advanced technologies for on-road or non-road diesels with lower nitrogen oxides (NO.) 

emissions; 

(6) use of qualifYing fuel; 

34 TexReg 7294 October 23, 2009 Texas Register 

(7) implementation of infrastructure projects; 

(8) replacement of on-road and non-road diesels with 

newer on-road and non-road diesels; and 

(9) other projects that have the potential to reduce anticipated NO. emissions from diesel engines. 

(b) For a proposed project as listed in subsection (a) of this 

section, other than a project involving a marine vessel or engine .Q!: 

a project involving non-road equipment used for natural gas recovery 

purposes, not less than 75% of vehicle miles traveled or hours of operation projected for the five years immediately following the award of a 

grant must be projected to take place in a nonattainment area or affected 

county of this state. The commission may also allow vehicle travel on 

highways and roadways, or portions of a highway or roadway, designated by the commission and located outside a nonattainment area or 

affected county to count towards the percentage of use requirement. 

(c) For a proposed project that includes a replacement of 

equipment or a repower, the old equipment or engine must be recycled 

or scrapped provided, however, that the executive director may allow 

permanent removal from the State of Texas in specific grants where the 

applicant has provided sufficient assurances that the old locomotive 

will not be returned to the State of Texas. 

(d) To be eligible for a grant, the cost-effectiveness of a proposed project as listed in subsection (a) of this section, except for infrastructure projects and infrastructure purchases that are part of a broader 

retrofit, repower, replacement, or add-on equipment project, must not 

exceed a cost-effectiveness of $15,000 per ton of NO. emissions reduced. The commission may set lower cost-effectiveness limits as 

needed to ensure the best use of available funds. The commission may 

also base project selection decisions on additional measures to evaluate 

the effectiveness of projects in reducing NO. emissions in relation to 

the funds to be awarded. 

(e) Projects funded with a grant from this program may not 

be used for credit under any state or federal emissions reduction credit 

averaging, banking, or trading program except as provided under Texas 

Health and Safety Code, §386.056. 

(t) A proposed project as listed in subsection (a) of this section 

is not eligible if it is required by any state or federal law, rule or regulation, memorandum of agreement, or other legally binding document. 

This subsection does not apply to: 

(1) an otherwise qualified project, regardless of the fact that 

the state implementation plan assumes that the change in equipment, 

vehicles, or operations will occur, if on the date the grant is awarded 

the change is not required by any state or federal law, rule or regulation, 

memorandum of agreement, or other legally binding document; or 

(2) the purchase of an on-road diesel or equipment required 

only by local law or regulation or by corporate or controlling board 

policy of a public or private entity. 

(g) A proposed retrofit, repower, replacement, or add-on 

equipment project must achieve a reduction in NO. emissions to the 

level established in the commission's Texas Emissions Reduction 

Plan: Guidelines for Emissions Reduction Incentive Grants Program 

(RG-388) for that type of project compared with the baseline emissions adopted by the commission for the relevant engine year and 

application. 

(h) If a grant recipient fails to meet the terms of a project grant 

or the conditions of this division, the executive director can require that 

the grant recipient return some or all of the grant funding to the extent 

that emission reductions are not achieved or cannot be demonstrated. 
(i) Criteria established in the guidelines, including revisions 

to the commission's Tuas Emissions &rblction Plan: Guitklinesfo,. 

Emissions &duction Incentive G1'tlnts Pmgram (RG-388), apply to the 

Texas Emissions Reduction Plan program. Notwithstanding the provisions of this chapter, as authorized under Texas Health and Safety 

Code §386.0S3(d), revisions to the guidelines may include, among 

other' changes, adding additional pollutants; adding stationary engines 

or engines used in stationary applications; adding vehicles and equipment that usc fuels other than diesel; or atljusting eligible program cat· 

egories; as appropl'ia1e, 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 Commlaalon on Environmental Quality 

Earliest poaalble date of adoption: November 22, 2009 

For further Information, please call: (512) 23~090 

• • • 

DMSION 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 submitlad to the United 

States Environmental Protection Agency (EPA) as a revision to 

the state implementation plan. 

BACKGROUND AND SUMMARY OF .THE FACTUAL 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 a 

grant under the program to offset the cost of replacing those vehicles. 

SECTION BY SECTION DISCUSSION 

§114.650, Definitions 

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, 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 

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 Eligibility 

r:iection 114.653 establishes grant eligibility requirements, as reCIUired by Texas Health and Safety Code, §391.005. These re- . quirements establish use and ownership crltaria of any vehicles 

being replaced, es well as the level of emissions that must be 

nchieved in order to receive a grant under the program. Sub-

!18ction (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 

ufthe primary location In which the eligible vehicles are used; or 

c:ost per ton benefits of the overall emissions being reduced. The 

c:ommission Is considering the establishment of prioritizing criteria that would limit the commission to initially considering only 

Glrant projects that Include vehicles with a primary location in a 

county that is located within an eight-hour ozone nonattaiment 

&1188 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 

saction outlines requirements regarding the use of new vehicles 

purchased 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 

&9Ction outlines the allowable use of grant funds awarded under 

tt1e program. 

§114.656, EHglble Grant Amounts 

As required by Texas Health and Safety Code, §391.007, this 

&9Ction outlines the various eligible grant amounts allowed under 

the program based on the age and type of each vehicle being 

mplaced. 

§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 

l'llina Chamness, Analyst, Strategic Planning and Assessment, 

has determined that, for the first five-year period the proposed 

nJies are in effect, fiscal implications are anticipated for the 

agency as a result of administration or enforcement of the 

proposed 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 Bill1759 requires the agency to create the Texas Clean 

Fleet Program using a portion of the funds appropriated in TERP 

Jl.ccount 5071. The proposed rules would add a new division to 

PROPOSED RULES October 23, 2009 34 TexReg 7295 
WRITTEN AND 

ORAL TESTIMONY 
Reference Number 

W-1 

W-2 

INDEX OF WRIITEN TESTIMONY 

Submitted by 

James N. Harger, Clean Energy 

Guy Donaldson, United States Environmental Protection Agency 
W-1 

ll/23/2BB9 12:23 5624934532 PAGE Bl/86 

C) , 

~ November 23, 2009 

Clean Eqefgy VIA E-FtUNG: ~&.tcaq.state.tx.ua/ruleslecomments FAX TO: (512) 239-4808 

Jessica Rawlings 

MC205 

Office of Legal Services . 

Texas Commission on Environmental Quality 

P .0. Box 13087 

Austin, Texas 78711-3087 

· Re: Rule ProJect Number 20Q9..047-114-EN . Proposed New Sections to 30 TAC Chapter 114, Implementing Senate 

Bill 1759, s1• Legislature, 2009. Regular Session to implement ~ 

Texas CI$B.n Fleet Program 

Dear Ms. Rawlings: 

. Olean Energy Is pleased to ·offer comments to the Texas Commission on 

Envfroomemal Quality ("TOEa') on TCEQ's proposed rulemaklng to Implement 

Senate Bill 1759, 81• Legislature, 2009, Regular Session, relating to 

Implementation of the Texas Clean Fleet Program. 

J. About Clean Energy 

Clean Energy. Is the leading provider of nab.Jral gas, both Compressed Natural 

Gas {•CNG) and Uquefiad Natural Gas ('I,.NG"), . for transportation In North 

America. Clean Energy has a broad customer base In the refuse, transit. ports, 

shuttle, taxi, trucking, airPort and municipal fleet .marketS, fueling more than 

17,200 vehicles dally at over 190 strategic locations across the United States 

and Canada. 

The Olean Energy model Is to design, bulld, own, operate and maintain public 

as well as private fueling sites. The goal Is to llllow our customers to remain 

focused on operating thetr fleet. For qualifying fleet clients, Clean Energy may · cover 1 00% of the cost to desrgn, build and construct the fuelrng station, In 

exchange for an affordable, long-1enn fueling contract. Clean Energy's longterm fuel contracts eliminate unpredictable fueling costs, allowing the 

customers to pay agreed upon rates regardless of fluctuating market prices. 

Clean Energy Is currently working with fleet operators across the State of Texason various, promJsfng projects. We are demonstrating to our prospeotJve 

customers that CNG Is an economical altemaHve to gasoline and diesel; 

especially given the rising pJ1ce of fuel, and the availability of vast quantities of 

North Atrnmaa'alndlt In cla8n lral\cpCIItllkl 

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natural gas produced right fl6re in Texas. We believe CNG not only provides 

an economic attematlve, but also moves Texas and the nation one step closer 

to being energy lndepende nt. 

Texas Operatfona 

In Texas, Clean Energy's DallaS and Houston based offices support a fueling 

network of na11Jra.l gas stations throughout the state. Clean Energy owns and 

operates nlne CNG fueling stations in the Dallas-Ft. Worth Metroplex, and three . 

in Houston. These stations provide compet.ftlvely priced, public access fuel 2.4- . 

hours"a..clay, 7 ·days-a-week, In addition, Clean Energy recently collaborated 

wfth the City of San Antonio to build and Install a CNG refueling facnfty 

dedicated to refuel dOzens of the City of San Antonio's refuse truck fleet. 

Cfean Energy also provides fuel and support services to the City of Dallas, 

OFW airport, J.ove Field airport, AT&T and UPS vehicles which are currently In 

use In the State of Texas. Clean Energy's sales force was racentty expanded to 

Include a seasoned sales professional to service the· growing trucking 

opportunities In the State. 

Clean Energy also owns and operates The Pickens Plant located In Willis, 

Texas. approximately 60 miles north of Houston, which can produ~ up to 

1 oo,ooo gallons of vehicle-grade LNG per day, and tncludas truck loading 

faclnties and a 800,00()-gaUon ·storage tank. The LNG plant receives natural 

gas from the pipeline, ohllls it to liquefied fonn and stores It at low pressure for 

delivery· to a growing public and private-sector customer base. Among Clean 

Energy's customers are Dallas Area Rapid Transit (DART) and Sun Metro (EI 

Paso), and the Houston operations for Sysco Food, and HEB. 

Clean· Energy, through Its recent acquisition of BAF Technologies, Inc., In 

October 2009 also provtd~s natural gas vehicle conversions for the light to 

heavy-duty fleet sectors.· BAF Technologies Is the leading provider· of natural 

gas vehicle systems and conversions In the United States and supports global 

clients with alternative fuel systems. 

11. Legislative History In Developing the Cl~n Fleet Program 

Clean Energy believes that the Texas Emissions Reduction Plan program 

(•TERP") has been a tremendous success, atthough not many TERP grants 

have been Issued for CNG projects, or oth~r alternatively fueled projects. The 

legislation which creates the Clean Fleet Program, however, was intended to 

carve out ;art of the TERP program ~peolflcafly for altema.tlvely fueled projects. 

In the 81 Regular ~gislative Session, Senate Bilf 1425 by Senator Williams, 

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House Bill 2978 by Representative Anchia, and House Bill 2978 by 

Representative Otto (oollecttvely the •ctean Fleet Legtsiatlon') were all were 

· flied to create the Clean Fleet Program, but none passed. Ultimately, the Clean 

Fleet Program was added onto Senate 8011759 to become law. The Clean 

Fleet Legislation received broad support from a broad base of entities 

supporting natural gas and alternative fuels. Support was stated on the record 

by the Texas Gas Association, the Texas Propane Gas AssocJatlon, the Texas 

Motor Transportation Association, UPS, HEB, AT&T, the Association of Electric 

Companies of Texas, Energy Transfer Company, Crosstax Energy, Martin Midstream, EOG Resources, Texas Pipeline Association, Texas Gas Service, 

~ache Corporation, Clean Energy, and the Sierra Club .. 

. Clean Energy believes that the Clean Fleet Program will provide opportunities 

for natural gas projects that have not existed prior to the establishment at the 

program, and hopes that the Clean Fleet Program will establish a track record 

of successful natural gas projects that can be analyz9d and copied In TERP. 

Ultimately, Clean Energy hopes that the Clean Fleet Program wtll open TERP 

to more natural gas proJects. · 

IlL Commente on the Propoaed RulM 

A.. Preamble Commente. The preamble estimates 'the . cost for 

alternative fuel vehicles at a range between $20,000 and $150,000. ln Clean 

Energy's experience. the cost of an alternatively fueled vehicle ranges from . 

. $6,000 for IIQht-duty vehicles such as the Honda Clvlc, $.24,000 for medium" 

duty .shuttles and up to $100,000 for heavy-duty. Class 8, tractor trucks with 

14.9L engines. 

Clean Energy strongly agrees with TCEQ's statement that the public benefit 

from the propose~ rules will be .Improved aJr 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. 

a Sec. 114.650~ DefinHfons. Clean ~ergy supports the proposed 

rule lanQuag& tracking the statutory definitions In Sec. 391.001, Health and 

Safety Code. · 

c. Sec. 114.651. .Applicability. Clean Energy supports the proposed 

rule language tracking the language In Sec. ~91.002 and 391.004, Health and 

Safety Code regarding applicability of the Clean Fleet Program. Olean Energy 

suggests also clartfylng local governments, suCh as regional transit agencies or 

school districts may also apply for a grant · 

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D. Sao. 114.652. Qualifying Vehicles. Clean Energy supports the 

proposed rule language tracking the statutory language Sec. 391.003 and 

391.005(c), Health and Safety Code. · 

E. Sec. 114.653. Gra.,t Eligibility. Clean Energy supports the 

proposed rule language tracking the statutory language Sec. 391.005, Health 

and Safety Code. More specifically, Clean Energy supports the flexibility 

granted· to the Executive Director to: (t) set the baseline level from which the 

reduction of nitrogen oxide emissions will be measured, and {II) 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 . I 

conditJon with at least two years Of remaining useful life. Ctean Energy also 

supports the proposed rule language which allows the Executive Director to 

award a grant based on a 25% reduction In pollutants other than nttrogen 

oxides. aenarally, Clean Energy supports the flexibility In the proposed rules, 

which will allow 1he ExecuUve Director to adapt and modify Implementation of 

the Clean Fleet Program quickly and respond to changing conditions. . 

TCEQ Is specifically requesting comments on whether TCEQ should prlorttlza 

or limit grants to projects whlch are located In counties within nonattalnment or 

near nonattalnment areas·under the elght·hour ozone standard. Clean Energy 

generally believes that prioritized consideration should be given to projects .In 

nonattainment areas or near nonattalnment areas. However, there are prdjects 

involving fleets that operate for a substantial portion of the time travelling 

betWeen nonattainment areas and near nonattalnment areas •. These ~ of 

projects should be given the same consideration as a proJect operating only In 

a nonattalnment area. As TCEQ states In the preamble, the air quality benefits 

from the Clean Fleet Program will be statewide. 

Lastly, Claan Energy supports th~ prioritizatiOn of projects based on cost per 

ton benefits of the overan emissions being reduced, which allows · for 

considaratlcn of the reductlpns of pollutants other than nitrogen oxides. . . 

F. Sec. 114.684. ·usage •nd Disposition. Clean Energy supports the 

· proposed rule language tracking the statutory language In Sec. 391.005(c) and 

(f), Health ancl Safety Code. · 

G. Sec. 114.665. · Grant Raatrlctiona. Clean Energy supports the 

proposed rule language tracking the statutory language In Sec. 391.006, Health 

and Safety Code. We rec:ommand that TCEQ clarify that a grant may also be 

used for labor to Install emissions-reducing equipment, which Is consistent with 

thestaMe. · 

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H. Sec. 114.656. Eligible Grant Amounts. Clean Energy supports the 

proposed rule language tracking the statutory language In Seo. 391.007, Health 

and Safety Code. Clean Energy also supports delegating to the Executive 

Director the authority to revise the standa~s for determining grant amounts In 

order to reflect changes to federal emissions standards and decisions on 

pollutants of concern. 

1. Sec.114.667. Reporting Requirements. Clean Energy supports the 

proposed rule language tracking the statutory language In Sec. 391.005(d), 

Hea~h and Safety Code. 

J. .Sec.. 114.658. lmpUwenta.tlon Schedule. Clean Energy supports 

the proposed rule language tracking ttle statutory la!1guage In Sec. 391.008. 

Health and Safety Code. 

K. Application Forme.. Seotl:on 391.004(c), Health and Safety Code, 

provides that an application must lae made on a form provided by the 

Commission and must contain lnfoJmEttlon required by the CommJssfon. Clean 

Energy supports the development of new grant program procedures and new 

application tonns for the Clean Fleet Program, whloh are different from TERP 

application forms. The pi"'cedures Emd the application requirements for the 

Clean Fleet Program should be tailored to large fleets. Many of the detans 

currently required In an application for a TERP grant may r.aot be necessary for 

an application for a Clean Fleet Program grant; The Clean Fleet Program Is 

geared toward .large fleets wtth over ~$vehicles, while TERP Is a broad-based 

and almost exclusively results In grants to projects with only a few vehicles. 

The needs of the different classes of applicants for TERP and the Clean Fleet 

Program are very dtfferent. and the application process should also be 

different. 

1... Pre-Review Process. Under TERP, an applicant Js required to 

expend the time and resources submIt a substantial amount of Information on 

eaoh vehicle Identified In the application. This may be appropriate for an . 

applicant wtth one or two vehicles. However, Clean Energy encourages TCEQ 

to consider aJlowlng an applicant for a Clean fleet grant to provide the basic 

Information, and let the applicant know If It appears that the applicant will qualify 

for the grant. An applicant In the Clean Fleet Program will be providing 

Information on 25 or more vehicles,· which can be. a substantial investment 

without any Indication whether the Investment In compiling the application may 

. be vvorthwhlle. Thus, a pre-review of a Clean Fleet Program application would 

be useful In attracting good projects from fleet operators who may not otherwise 

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be willing to submit a grant appiJcatlon given the time and resources It takes to 

submit an application. 

M. Supplemental Funding. The September 18, 2009 memo to the 

Commissioners states that a limited number of applicants may qualify the grant 

funds ($6.8 million In FY 2010 and $5.2 million In FY 2011) since each grant 

must be tor at least 2S vehicles. · Clean Energy encourages the TCEQ to 

consider whether TERP funding might· be used to suppJement a Clean Fleet 

Program grant application which meets the requirements of both programs, but 

for which the funding Is not available. There may also be other sources of 

funding from other state or local sources might also be used in conJunction with 

the Clean Fleet Program. 

IV. ·Alternative Fuelling Infrastructure 

In addition to establtshing the Clean Fleet Program, Senate Bill ·1759 also 

requires TCEQ to study the amount of emissions reductions achieved from 

alternative fuelling Infrastructure, and request ·that U.S. Environmental 

Protection Agency consider whether emissions reduction credit can be 

attributed to refueling Infrastructure. Although this is not expressly part of the 

proposed rulemaklng, Clean Energy supports TCEQ In Its efforts. · 

V. Closing 

Clean Energy appreciates the opportunity to provide. oommems tD TCEQ t;tn 

· TCEQ's proposed rules to Implement the Texas Clean Fleet Program, Please 

let contact me If you have any questions or if you need any cJa~catlon on the 

comments we nave offered. 

Sincerely, 

es N. Harger 

nlor VIce President & 

Chief Marketing Officer 

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UNITED STATES ENVIRONMENTAL PROTEcnON AGENCY 

REGION8 

Ms. Jessica Rawlings 

1445 ROSS AVENUE, SUITE 1200 

DALLAS, TX 75202-2733 

NOV 1 7 2001 

Office of Legal Services, MC 205 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, TX 78711-3087 

Re: Rule Project Number 2009-047-114-EN 

Dear Ms. Rawlings: 

Thank you for the opportunity to comment on proposed changes to 30 TAC 114 

regarding Control of Air Pollution from Motor Vehicles, specifically adding a new Division to . 

Subchapter K as Division 5: Texas Clean Fleet Program. 

Generally, we support the proposed revisions to these rules because they strengthen the 

Texas Emission Reduction Plan (TERP) program by offering another incentive to fleets wishing 

to voluntarily reduce emissions. We believe these new rules will contribute to the enhancement 

of air quality in the norurttainment areas where they are implemented. Emission reductions 

claimed in the State Implementation Plan from this new Division must be quantifiable, surplus, 

pennanent, and enforceable. 

. We understand that the Texas Legislature named this program the Texas Clean Fleet 

program in Senate Bill1759, 81 st Legislature, 2009. It is an unfortunate coincidence that this 

program has the same name as the program adopted (and subsequently repealed) by Texas as 

required under section 182(c)(4) of the Clean Air Act (CAA) as amended in 1990. We 

recognize that the program being proposed is in no way related to this CAA clean fuel fleet 

requirement and hope this coincidence does not confuse the public. 

Specifica.lly, in §114.650, definitions, we question if there is a typographical error in the 

definition of Alternative Fuel, where it refers to "a mixture of fuels containing at least 85% . 

methanol." Should this read "ethanol?" Is the specified list of alternative fuels all inclusive or 

does this program allow for the use of other unspecified alternative fuels? 

Section §114.653(c) would allow the executive director to consider projects that result in 

a 25% reduction in other pollutants. Since the TERP program provides reductions in NOx and 

has been used to substitute for other NOx reduction measures, how will the State keep separate 

the reductions achieved from a project that is funded under TERP, but gets, for example, only 

PM reductions? What if an "other pollutant" reduction project also resulted in an increase in 

NOx? 

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Section § 114.656, Eligible Gfant AmountS, describes how muc~ of a replacement cost 

would be covered by the progmm; Clarification in §14.656(a)(l) is needed. Under 

§14.656(a){1) (A), it would be helpful if the year ofrilanufacture is specified for both federal and 

California emission standards. Subpamgraph § 14.656(a)(l )(B) may intend to cover vehicles tbB.t 

were manufactured in the U.S. before the EPA set emission standards for them. However, the 

·language also suggests vehicles that were not manUfactured in the U.S. at all but after U.S. 

· standards were set and may be in the country illegally. The State is not likely intending (nor 

would EPA support) to spend state funds under this parti~utar program to reward owners for . 

turning in illegal engines or vehicles. See EPA's import regulations to. confirril which highway. 

vehicle engines worild not Pe subject to U.S .. emission standards. From the schedule attached to 

EPA Form 3520-21 (Rev.03-09), it appears that engines manufactured before January 1, 1970, or . those same engines mcoi"porated intQ vehicles would be allowed to be legally imported. . 

Beginning January 1, 1970, on-high\vay heavy-duty engine/vehicle standards were required. 

J'herefore, beginning January 1, 1970, any on-highway heavy-duty engine/vehicle imported into 

· the U.S, would have to meet U.S. engine/vehicle emission standards. · 

We·have similar oo~cems with regard to §114.656(bXl)(A) and (B). Providing ~ific 

. mOdel years in (A)would be helpful, and clarifying (B) is necessary. What is meantby • 

''voluntary emission certification standards?" 

. . . . . . 

Region 6 continues to offer Texas our support 9uring the rulemaking process .. · Please let 

us know how· we may be of further assistance. · 

Sincerely yours, 

·.1-J .. ~· 

GUy Donaldson · · 

Chief · 

Air Planning Section · 

• -·--·----·-----w-oo••-••••••••• • • '•>'•••-•••••••••-•--•-·••-•••••••••-••••••••••••·-•••••••••••••••••••• ••••••••··-•••••••••-••••-••••-••••••••• ••••••-••••••••'••••••~•-'"''••"'':,"''"'•••~•••-.•• __ ......:, _________ ,,_,,,,, •• 
INDEX OF ORAL TESTIMONY 

NO ORAL TESTIMONY WAS RECEIVED PERTAINING TO THIS RULEMAKING. 
HEARING OFF1CER REPORT 

I am the hearing officer assigned to conduct the public hearing regarding rule project 

number: 2009-048-114-EN, HB 1796: Emission Reduction Incentive Grants. 

A public hearing was scheduled for November 16, 2009 in Austin at 10:00 a.m. in 

Building E, Room 201 at the commission's central office located at 12100 Park 35 Circle. 

At 9:3 0 a.m., the room was open, .TCEQ staff and a court reporter were present and ready 

to open the hearing for public comment. After waiting for 15 minutes no one had arrived 

to make comments on the record. Therefore, the public hearing was not formally opened 

for comment and a transcript was not prepared. 

Hearing Officer 

November 16, 2009 
EVALUATION OF 

TESTIMONY 
/ 

Texas Commission on Environmental Quality INTEROmcE MEMORANDUM 

To: 

Thrn: 

From: 

Docket No.: 

Subject: 

Commissioners Date: February 5, 2010 

LaDonna Castafiuela, Chief Clerk 

Mark R. Vickery, P.G., Executive Director 

Susona M. Hildebrand. P .E., Chief BngUreer ff 

2009-1186-RUL 

Commission Approval for Rulemaking Adoption 

· Chapter 114, Control of Air Pollution From Motor Vehicles 

HB 1796: Emission Reduction Incentive Grants Ru1es 

Rule Project No. 2009-048-114-EN 

Background and reason(s) for the rulemaking: . . 

The rules implement revisions to Texas Health and Safety, Chapter 38~, as a result of House Bill (HB) 1796, 

81 st Legislature,. 2009. The changes were originally proposed by Senator Averitt in a senate bill. However, 

because of procedural delays, that bill did not go forward. The changes were then added to HB 1796, 

authored by Representative.Chisum. 

Scope of the proposed rulemaking: 

A) Summary of what the ru}emaking will do: The revisions add a definition for stationary engine and 

exclude non-road equipment used for natural gas recovery purposes :fron:i the requirement that at least 75% of 

the use of grant-funded equipment occur in the eligible counties. 

B) Scope required by federal regulations or state statutes: The revisions incorporate into the rules the 

changes made to Texas Health and Safety Code, Chapter 3 86, by HB 1796. · 

C) Additional statT recommendations that are not required- by federal rule or state statute: No 

additional revisions were proposed beyond those that were made as a result ofHB 1796. 

Statutory authority: 

• Texas Water Code, §5.102, which provides the commission with the general powers to cany 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 of the Texas Water Code and other laws of this state; 

• Texas Water Code, §5.105, which authorizes the commission by rule to establish and approve all 

general policy of the commission; 

• Texas Health and Safety Code, §382.017, which authorizes the commission to adopt rules consistent 

with the policy and purposes of the Texas Clean Air ACt; 

• 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; 

• Texas Health and Safety Code, Chapter 386, which establishes the Texas Emissions Reduction Plan 

(TERP) program. 
I. ' 

I 

Commissioners 

Page 2 

February 5, 2010 

Re: Docket No. 2009-1186-RUL 

Effect on the: 

A) Regulated community: The changes expand the types of stationary projects that may be eligible for a 

grant to include gas turbine engines. Entities that own stationary gas turbine engines will now potentially be 

eligible to apply. Any additional stationary engine projects funded as a resuh of these changes may reduce 

the amount of funding available for mobile source projects, although this would not change the overall 

emissions reductions. In addition, the changes exclude non-road equipment used for natural gas recovery 

purposes from the requirement that equipment be operated at least 75% of its use in the eligible counties. 

The projects will still be required to meet the cost-effectiveness requirements based on the emissions 

reductions in the eligible counties over the life of the project. Entities that own non-r;oad equipment used for 

natural gas recovery purposes will benefit from having more of that equipment eligible for grant funds. 

B) Public: Same as for the regulatedcommunity. · . 

C) Agency programs: The revisions. will expand the t:YPes of equipment that may be eligible for a grant. 

The changes will need to be included in the TERP grant program materials and application forms. The 

changes will not have a major impact on administration of the program. 

Stakeholder meetings: 

No stakeholder meetings were held for this rulemaking. 

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 co~ents were received a~ the hearing or during the comment 

period. · 

Significant changes from proposal: 

No changes were made :from the proposal. 

Potential controvenial concerns and legislative interest remaining after proposal and public comment: 

None. 

Does this rulemaking affect any current policies or require development of new policies? 

The TERP Guidelines for Emissions Redui:tion Incentive Grants (RG-388)·must be revised to incorporate the 

changes made by this rulemaking. Grant program materials and forms must also be revised to iriclude the 

changes to the grant eligibility criteria. 

What are the consequences if this rulemaking does not go forward? Are there alternatives to 

rulemaking? 

This rulemaking is required to implement the statutory changes to the grant criteria under HB 1796. If the 

rulemaking does not go forward, the new grant eligibility criteria could not be implemented. Possible 

alternatives are riot adopting the rules and being inconsistent with the statute or adopting the rules at a later 

date. 

Key points in adoption rulemaking schedule: 

Tf!XIlS Register proposal publication date: 

Anticipated Tf!XIlS Register publication date: 

Anticipated effective date: 

Six-month Texas Register filing deadline: 

October 23, 2009 

March 12, 2010 

March 18, 2010 

April23, 2010 
' 

Commissioners 

Page3 

February 5, 2010 

Re: Docket No. 2009-1186-RUL 

Agency contacts: 

Steve Dayton, Rule Project Manager, 239-6824, Chief Engineer's Office 

Ben Rbem, Staff Attorney, 239-6501 

Devon Ryan, Texas Register Coordinator, 239-6090 

Attachments 

cc: Chief Clerk, 5 copies . 

Executive Director's Office 

Susana M. Hildebrand, P .E. 

Kevin Patteson 

Curtis Seaton 

Daniel Womack 

Office of General Counsel 

Steve Dayton 

DevonRyan · 

.•. 
EVALUATION OF TESTIMONY 

The Texas Commission on Environmental Quality (commission) adopts the amendments to 

§ 114.620 and§ 114.622, without changes to the proposed text as published in the October 23, 

2009, issue of the Texas Register (34 TexReg 7291). 

Sections 114.620 and 114.622 will be submitted to the United States Environmental Protection 

Agency as revisions to the state implementation plan. 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED 

RULES 

The 77th Texas Legislature, 2001, enacted Senate BillS establishing the Texas Emissions 

Reduction Plan (TERP), which provides financial incentives for reducing emissions of on-road 

and non-road motor vehicles and equipment. House Bill (HB) 1796, 8lst Texas Legislature, 

2009, amended Texas Health and Safety Code, Chapter 386, TERP Program to add a definition 

for stationary engine and to clarify requirements for projects involving non-road equipment 

used for natural gas recovery purposes. 

SECTION BY SECTION DISCUSSION 

§ 114. 620, Definitions 

Section 114.620 is amended to add a definition for stationary engine as required by Texas 

Health and Safety Code, §386.001. Texas Health and Safety Code, §386.001 was amended by 

adding Texas Health and Safety Code, §386.001(10-a), which states: stationary engine means a 

machine used in non-mobile applications that converts fuel into mechanical motion, including 

turbines and other internal combustion devices. 

1 
§ 114.622, Incentive Program Requirements 

Section 114.622 is amcmded to clarify requirements for projects related to non-road equipment 

used for natural gas re:overy purposes, as required by Texas Health and Safety Code, 

§386.104(c). 

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION 

The commission reviewed the rulemaking in light of the regulatory analysis requirements of 

Texas Government Code, §200 1.0225, and determined that this rule action is not subject to 

§200 1.0225 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 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 amended Chapter 114 rules are adopted in accordance with HB 1796, which amended 

Texas Health and Safe1y Code, Chapter 386. The adopted rules add a new definition for 

stationary engine and clarify requirements for projects involving non-road equipment used for 

natural gas recovery purposes. Because the adopted rules place no involuntary requirements on 

the regulated communi-ty, 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 of the state or a sector of the state. In addition, none of these 

amendments place additional fmancial burdens on the regulated community. 

2 
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 defmed in the Texas Government Code. Texas Government Code, 

§200 1.0225, applies only to a major environmental rule the result of which is to: 1) exceed a 

standard set by federal law, unless the rule is specifically required by state law; 2) exceed an 

express requirement of state law, unless the rule is specifically required by federal law; 3) 

exceed a requirement of a delegation agreement or contract between the state and an agency or 

representative of the federal government to implement a state and federal program; or 4) adopt a 

rule solely under the general powers of the agency instead of under a specific state law. This 

rulemaking does not exceed a standard set 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 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 on the draft 

regulatory impact analysis determination. 

TAKINGS IMP ACT 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 HB 1796. The rules make revisions to a 

voluntary program and only affect motor vehicles and equipment that are not considered to be 

private real property. Therefore, promulgation and enforcement of the adopted rules is neither a 

3 
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 §505.1l(bX2}, 

concerning 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 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 

theCMP. 

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; 

4 
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 

Cod,;:, §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 Bi111796. 

The adopted amendments implement Texas Health and Safety Code, Chapter 386. 

5 
STAFF 

RECOMMENDATIONS
SUBCHAPTER K: MOBILE SOURCE INCENTIVE PROGRAMS 

DIVISION 3: DIESEL EMISSIONS REDUCTION INCENTIVE PROGRAM FOR ON-ROAD 

AND NON-ROAD VEIDCLES 

§114.620, §114.622 

§ 114.620. Definitions. 

Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules of the commission, 

the tenns used in this subchapter have the meanings commonly ascribed to them in the field of air 

pollution control. In addition to the tenns which are defined by the TCAA and §§3.2, 101.1, and 114.1 of 

this title (relating to Defmitions), the following words and tenns, when used in this division shall have the 

following meanings, unless the context clearly indicates otherwise. 

( 1) Cost-effectiveness--The total dollar amount expended divided by the total number of 

tons of nitrogen oxides emissions reduction attributable to that expenditure. In calculating costeffectiveness, one-time grants of money at the beginning of a project shall be annualized using a time 

value of public funds or discount rate determined for each project by the commission, taking into account 

the interest rate on bonds, interest earned by state funds, and other factors the commission considers 

appropriate. 

(2) Guidelines--Texas Emissions Reduction Plan: Guidelines for Emissions Reduction 

Incentive Grants Program (RG-388) adopted by the commission under Texas Health and Safety Code, 

§386.053, as amended. 

1 
(3) Incremental cost--The cost of an applicant's project less a baseline cost that would 

otherwise be incurred by an applicant in the nonnal course of business and may include added lease or 

fuel <:osts as well as additional capital costs. 

( 4) 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. 

(5) Non-road diesel--A vehicle or piece of equipment, excluding a motor vehicle or onroad diesel, that is powered by a non-road engine, including: non-road non-recreational equipment and 

vehicles; construction equipment; locomotives; marine vessels; and other high-emitting diesel engine 

categories. 

(6) Non-road engine--An internal combustion engine that is in or on a piece of equipment 

that i:; self-propelled or that propels itself and perfonns another function, excluding a vehicle that is used 

solely for competition, or a piece of equipment that is intended to be propelled while perfonning its 

funct:lon, or a piece of equipment designed to be and capable of being carried or moved from one location 

to another. 

(7) On-road diesel--An on-road diesel-powered motor vehicle that has a gross vehicle 

weight rating of 8,500 pounds or more, 

(8) Qualifying fuel--Any liquid or gaseous fuel or additives registered or verified by the 

United States Environmental Protection Agency that is ultimately dispensed into a motor vehicle or onroad or non-road diesel that provides reductions of nitrogen oxides emissions beyond reductions required 

by state or federal law. 

2 
(9) Repower--To replace an old engine powering an on-road or non-road diesel with a 

new engine; a used engine; a remanufactured engine; or electric motors, drives, or fuel cells. 

( 1 0) Retrofit--To equip an engine and fuel system with new emissions-reducing parts or 

technology verified by the United States Environmental Protection Agency after manufacture of the 

original engine and fuel system. 

(11) Small business--A business owned by a person who: 

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

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

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

(B) has owned the on-road or non-road diesel for more than one year. 

(12) Stationary engine--A machine used in non-mobile applications that converts fuel 

into mechanical motion, including turbines and other internal combustion devices. 

§114.622. Incentive Program Requirements. 

(a) Eligible projects include: 

3 
( 1) purchase or lease of on-road and non-road diesels; 

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

(3) emissions-reducing repower projects for on-road or non-road diesels; 

( 4) purchase and use of emissions-reducing add-on equipment for on-road or non-road 

diesels; 

( 5) development and demonstration of practical, low-emissions retrofit technologies, 

repower options, and advanced technologies for on-road or non-road diesels with lower nitrogen oxides 

(NOx) emissions; 

(6) use of qualifying fuel; 

(7) implementation of infrastructure projects; 

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

diesels; and 

(9) other projects that have the potential to reduce anticipated NOx emissions from diesel 

engines. 

(b) For a proposed project as listed in subsection (a) of this section, other than a project involving 

a marine vessel or engine or a project involving non-road equipment used for natural gas recovery 

4 
purposes, not less than 75% of vehicle miles traveled or hours of operation projected for the five years 

immediately following the award of a grant must be projected to take place in a nonattainment area or 

affected county of this state. The commission may also allow vehicle travel on highways and roadways, 

or portions of a highway or roadway, designated by the commission and located outside a nonattainment 

area or afrected county to count towards the percentage of use requirement. 

(c) For a proposed project that includes a replacement of equipment or a repower, the old 

equipment or engine must be recycled or scrapped provided, however, that the executive director may 

allow pennanent removal from the State of Texas in specific grants where the applicant has provided 

sufficient assurances that the old locomotive will not be returned to the State of Texas. 

(d) To be eligible for a grant, the cost-effectiveness of a proposed project as listed in subsection 

(a} of this section, except for infrastructure projects and infrastructure purchases that are part of a broader 

retrofit, repower, replacement, or add-on equipment project, must not exceed a cost-effectiveness of 

$15,000 per ton ofNOx emissions reduced. The commission may set lower cost-effectiveness limits as 

needed to ensure the best use of available funds. The commission may also base project selection 

decisions on additional measures to evaluate the effectiveness of projects in reducing NOx emissions in 

relation to the funds to be awarded. 

(e) Projects funded with a grant from this program may not be used for credit under any state or 

federal emissions reduction credit averaging, banking, or trading program except as provided under Texas 

Health and Safety Code, §386.056. 

5 
(f) A proposed project as listed in subsection (a) of this section is not eligible if it is required by 

any state or federal law, rule or regulation, memorandum of agreement, or other legally binding 

document. This subsection does not apply to: 

(1) an otherwise qualified project, regardless of the fact that the state implementation plan 

assumes that the change in equipment, vehicles, or operations will occur, if on the date the grant is 

awarded the change is not required by any state or federal law, rule or regulation, memorandum of 

agreement, or other legally binding document; or 

(2) the purchase of an on-road diesel or equipment required only by local law or 

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

(g) A proposed retrofit, repower, replacement, or add-on equipment project must achieve a 

reduction in NOx emissions to the level established in the commission's Texas Emissions Reduction Plan: 

Guidelines for Emissions Reduction Incentive Grants Program (RG-3 88) for that type of project 

compared with the baseline emissions adopted by the commission for the relevant engine year and 

application. 

(h) If a grant recipient fails to meet the terms of a project grant or the conditions of this division, 

the executive director can require that the grant recipient return some or all of the grant funding to the 

extent that emission reductions are not achieved or cannot be demonstrated. 

(i) Criteria established in the guidelines, including revisions to the commission's Texas Emissions 

Reduction Plan: Guidelines for Emissions Reduction Incentive Grants Program (RG-388), apply to the 

Texas Emissions Reduction Plan program. Notwithstanding the provisions of this chapter, as authorized 

6 
under Texas Health and Safety Code, §386.053(d), revisions to the guidelines may include, among other 

changes, adding additional pollutants; adding stationary engines or engines used in stationary 

applications; adding vehicles and equipment that use fuels other than diesel; or adjusting eligible program 

categories; as appropriate, to ensure that incentives established under this program achieve the maximum 

possible emission reductions. 

7 
Filed with the Office of the S etary of State on February 24, 

2010. 

TRD-201 000949 

Brian White 

Deputy Public Counsel 

Office of Injured Employee Counse 

Effective date: March 22, 2010 

Proposal publication date: January , 2010 

For further information, please call: (512) 804-4182 

• • 

TITLE 30. ENVIRON NTAL QUALITY 

PART 1. TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 

CHAPTER 114. CONTROL OF AIR 

POLLUTION FROM MOTOR VEHICLES 

SUBCHAPTER K. MOBILE SOURCE 

INCENTIVE PROGRAMS 

DIVISION 3. DIESEL EMISSIONS 

REDUCTION INCENTIVE PROGRAM 

FOR ON-ROAD AND NON-ROAD VEHICLES 

30 TAC §114.620, §114.622 

The Texas Commission on Environmental Quality (commission) 

adopts the amendments to §114.620 and §114.622, without 

changes to the proposed text as published in the October 23, 

2009, issue of the Texas Register (34 TexReg 7291 ). 

Section 114.620 and §114.622 will be submitted to the United 

States Environmental Protection Agency as revisions to the state 

implementation plan. 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE ADOPTED RULES 

The 77th Texas Legislature, 2001, enacted Senate Bill 5 establishing the Texas Emissions Reduction Plan (TERP), which provides financial incentives for reducing emissions of on-road and 

non-road motor vehicles and equipment. House Bill (HB) 1796, 

81stTexas Legislature, 2009, amended Texas Health and Safety 

Code, Chapter 386, TERP Program to add a definition for stationary engine and to clarify requirements for projects involving 

non-road equipment used for natural gas recovery purposes. 

SECTION BY SECTION DISCUSSION 

§114.620, Deffnitions 

Section 114.620 is amended to add a definition for stationary 

engine as required by Texas Health and Safety Code, §386.001. 

Texas Health and Safety Code, §386.001 was amended by 

adding Texas Health and Safety Code, §386.001(10-a), which 

states: stationary engine means a machine used in non-mobile 

applications that converts fuel into mechanical motion, including 

turbines and other internal combustion devices. 

§114.622, Incentive Program Requirements 

Section 114.622 is amended to clarify requirements for projects 

related to non-road equipment used for natural gas recovery 

35 TexReg 2194 March 12, 2010 Texas Register 

purposes, as required by Texas Health and Safety Code, 

§386.104(c). 

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION 

The 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 1:1 

"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 healtl1 

from environmental exposure that may adversely affect in ;a 

material way the economy, productivity, competition, jobs, th•:t 

environment, or the public health and safety of the state or a 

sector of the state. 

The amended Chapter 114 rules are adopted in accordance with 

HB 1796, which amended Texas Health and Safety Code, Chapter 386. The adopted rules add a new definition for stationary 

engine and clarify requirements for projects involving non-road 

equipment used for natural gas recovery purposes. Because 

the adopted rules place no involuntary requirements on the renulated 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. In addition, none 

of these amendments place additional financial burdens on tt1e 

regulated community. 

In addition, a regulatory impact analysis is not required becauf;e 

the adopted rules do not meet any of the four applicability criteria 

for requiring a regulatory analysis of a "major environmental ru~:~" 

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 un 

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 gene1al 

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 adopted solely under the general poNers of the agency, but is specifically authorized by the provisio 'IS 

cited in the STATUTORY AUTHORITY section of this preamble. 

Finally, this rulemaking does not exceed a requirement of a d:tlegation agreement or centrad to implement a state and federal 

program. 

The commission invited public comment regarding the draft regulatory impad analysis determination during the public commEtnt 

period. No comments were received on the draft regulatory impact analysis determination. 

TAKINGS IMPACT ASSESSMENT 

The commission evaluated this rulemaking adion and purformed an analysis of whether the adopted rules are subject to 

Texas Government Code, Chapter 2007. The primary purpo:~e 

of the rulemaking is to amend Chapter 114 in accordance with 

HB 1796. The rules make revisions to a voluntary program 

and only affect motor vehicles and equipment that 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 affed private re,al 
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 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 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, 

§5.1 02, which provides the commission with the general powers 

to carry out its duties under the Texas water Code; Texas water 

Code, §5.1 03, which authorizes the commission to adopt any 

rules necessary to carry out the powers and duties under the 

provisions of the Texas water Code and other laws of this 

state; and 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-201 000991 

Robert Martinez 

Diredor, 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) 239-6C90 

. ~· 

DIVISION 5. TEXAS LEAN FLEET 

PROGRAM 

30 TAC §§ll4.650 - 114.658 

The Texas Commission on Envi onmental Cluality (commission) 

adopts new §§114.650- 114.65 . 

Sections 114.650 and 114.656 readopted with changes to the 

proposed text as published in th October 23, 2009, issue of the 

Texas Register(34 TexReg 729 ). Sectiom1 114.651 - 114.655, 

114.657, and 114.658 are adop ed without changes to the proposed text and the text will not republished. 

The new sections will be subm ed to the United States Environmental Protection Agency ( PA) as a revision to the state 

implementation plan (SIP). 

BACKGROUND AND SUMMA Y OF THI: FACTUAL BASIS 

FOR THE ADOPTED RULES 

Senate Bill (SB) 1759, 81st L islature, :!009, amended the 

Texas Health and Safety Code y adding Ghapter 391, Texas 

Clean Fleet Program. This pf ram is designed to encourage 

eligible fleets to replace diesel ehicles with alternative fuel or 

hybrid vehicles. Eligible entities at replace 25 or more on-road 

diesel vehicles with alternative el or hybricl vehicles may apply 

for a grant under the program o offset tt1e cost of replacing 

those vehicles. 

SECTION BY SECTION DISC 

§114.650, Definitions 

Section 114.650 establishes the efinitions specific to the Texas 

Clean Fleet Program, as requi by Texa:~ Health and Safety 

Code, §391.001. Since propo I, the commission revised the 

language in §114.650(1) to mak it clear that only the fuels listed 

in this section are considered a temative ~Jels for purposes of 

this program. 

§114.651, Applicability 

Section 114.651 establishes the pplicabiliflr requirements as required by Texas Health and Sa ty Code, §391.002. These requirements outline entities that re eligible to apply for a grant 

under the program. 

§114.652, Qualifying Vehicles 

This section clarifies the types f vehicles that are and are not 

eligible for participation in the rogram, a:s required by Texas 

Health and Safety Code, §391. 3. 

§114.653, Grant Eligibility 

Section 114.653 establishes gra t eligibility requirements, as required by Texas Health and Sa ty Code, §391.005. These requirements establish use and o nership criteria of any vehicles 

being replaced, as well as the I vel of emissions that must be 

achieved in order to receive a ant under the program. Subsection (d) provides that the exe tive director may establish adADOPTED RULES March 12, 2010 35 TexReg 2195 
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

ORDER ADOPTING AMENDED RULES AND 

REVISIONS TO THE STATE IMPLEMENTATION PLAN 

Docket No. 2009-1186-RUL 

On February 24, 2010, the Texas Commission on Environmental Quality (Commission), during a public 

meeting, considered the adoption of §114.620 and §114.622 of 30 Texas Administrative Code Chapter 114, 

Control of Air Pollution from Motor Vehicles and corresponding revisions to the state implementation plan 

(SIP). The adoption will implement House Bill 1796, 81st Legislature, 2009, Regular Session by adding a 

definition for stationary engines and clarifying requirements for projects involving non-road equipment used for 

natural gas recovery purposes. Under Tex. Health & Safety Code Ann. §§ 382.011, 382.o12, and 382.023 

(Vernon 2001), the Commission has the authority to control the quality of the state's air and to issue orders 

consistent with the policies and purposes of the Texas Clean Air Act, Chapter 382 of the Tex. Health & Safety 

Code. The proposed rules were published in the October 23, 2009, issue of the Texas Register (34 TexReg 

7291). 

Pursuant to Tex. Health & Safety Code Ann.§ 382.017 (Vernon 2001), Tex. Gov't Code Chapter 2001 

(Vernon 2008), and 40 Code of Fe4eral 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 of the 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 new rules and SIP revisions, 

either orally or in writing, at the hearings or during the comment period. Prior to the scheduled hearing, copies 

·of the proposed new rules and SIP revisions were available for public inspection at the Commission's central 

office and on the Commission's Web site. 

No comments were received regarding the proposed rules and SIP revisions. 

IT IS THEREFORE ORDERED BY THE COMMISSION that the amended rules and revision to the 

SIP incorporated by reference to this Order are hereby adopted. The Commission further authorizes staff to 

make any non-substantive revisions to the rules necessary to comply with Texas Register requirements. The 

adopted rules and the preamble to the adopted rules and the revisions to the SIP are incorporated by reference in 

this Order as if set forth at length verbatim in this Order. 

IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the Commission, the 

Chairman should transmit a copy of this Order, together with the adopted rules and revision to the SIP, to the 

Regional Administrator of EPA 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. 
Tills Order constitutes the Order of the Commission required by the Administrative Procedure Act, Tex. 

Gov't Code, § 2001.033 (Vernon 2008). 

If any portion of this Order is for any reason held to be invalid by a court of competent jurisdiction, the 

invalidity of any portion shall not affect the validity of the remaining portions. 

Date issued: HAR. Q 1 2 Q 1.0 TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY