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

## RECEIVED- 6PDL AIR PLANNING S£C. 12 APR 30 PH 5: 23 TEXAS COMMISSION ON ENVIRONMENTAL QUALI1Y Protecting Tex<LS by Reducing andPreventing Pollution

Alfredo Armendariz, Ph.D. Regional Administrator April 13, 2012

U.S. Environmental Protection Agency

- Region 6 1445 Ross Avenue Dallas, Texas 75202-2733 Dear Dr. Armendariz: DocketNo. 2011-1220-RUL Rule Project No. 2011-051-114-EN

On March 28, 2012, theTexas Commissionon Environmental Quality (Commission) adopted revisions to the State Implementation Plan (SIP). The Commission adopted amendments to§§ 114.650- 114.65!in 30 TAC Chapter 114, Control ofAir Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 5, Texas Clean Fleet Program; and corresponding revisions to the SIP. The amendments implement part ofHouse Bil13399, 82nd Legislature, 2011, Regular Session, relating to requirements for receiving an incentive grant under theTexas Clean Fleet Program. The revisions to Chapter 114 incorporate changes and additions to the program eligibility criteria and add provisions thatthe executive director shall waive the ownership and use requirements for the vehicle being replaced upon a finding ofgood cause. Enclosed are the proposed revisions to the SIP, a publichearing certification, a completerecord ofthe public hearing, andthe accompanying order. I lookforward to your expeditious approval ofthese SIP revisions. Sincerely,

# ~-;~:,~ Chairman
BWS/sd

Enclosures

cc: The Honorable Rick Perry, Governor ofTexas Mr. Toby Baker, Office ofBudget, Planning and Policy, Office ofthe Governor Mr. Mark R. Vickery, P.G., Executive Director, Texas Commission on Environmental Quality
P.O. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • www.tceq.texas.gov How is our customer service? www.tceq.texas.govjgotojcustomersurvey

### TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Docket No. 2011-1220-RUL



### THE STATE OF TEXAS COUNTY OF TRAVIS

This is to certify that the attached electronic file is included and that the electronic file is a
true and correct copy ofdocuments for a revision to theTexas State Implementation Plan, adopted on March 28, 2012, 

### pursuantto 40 Code ofFederal Regulations§ 51.104. I am the records administrator for the Air Quality Division ofthe Texas Commission on Environmental Quality (Commission).

# +~&~ Air Quality Division Texas Commission on Environmental QualityTexas Commission on Environmental Quality Public Hearing November 29, 2011 Concerning Revisions to 30 TAC Chapter 114 Texas Clean Fleet Program Rules Project No. 2011-051-114-ENINTRODUCTION

The Texas Commission on Environmental Quality (commission) held a public hearing in Austin on November 29, 2011, to receive testimony regarding revisions to 30 TAC Chapter 114 and corresponding revisions to the state implementation plan.

The adoption implements part of House Bill (HB) 3399, 82nd Legislature, 2011, Regular Session, relating to requirements for receiving an incentive grant under the Texas Clean Fleet Program. The revisions to Chapter 114, as required by HB 3399, incorporate changes and additions to the
program eligibility criteria, including: changes to the number ofvehicles that must be included in a grant and that may be awarded funding by the commission; changes to allow a vehicle that has been leased or commercially financed to be replaced underthe program; changes to the time period

overwhich a grant-funded vehicle must be operated; and establishing criteria for decommissioning a vehicle orvehicle engine replaced under the program. In addition, the revisions include provisions,

as required under HB 3399, that the executive director shall waive the ownership and use requirements for the vehicle being replaced, upon a finding of good cause.

The comment period closed on December 5, 2011. All testimony and comments have been reviewed and seriously considered. This hearing record contains a complete record of the public hearings and is divided into the following four sections:

o Public Notification and Proposal

o Written and Oral Testimony

o Evaluation of Testimony

o Staff Recommendations/Order

Additional copies ofthis hearing record are maintained in the TCEQ central office at 12100 Park 35Circle, Austin, Texas 78753. Forfurther information, please contact Stephen Dayton at (512) 239- 6824.

# NOTICE 

# & PROPOSALPUBLIC NOTIFICATION

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

1. Publication of notice of public hearings in the following newspapers on the date listed: Austin American-Statesman: October 20, 2011 Beaumont Enterprise: October 20, 2011 El Paso Times: October 20, 2011 Fort Worth Star- Telegram: October 20, 2011 Houston Chronicle: October 20, 2011 Longview News-Journal: October 20, 2011 San Antonio Express-News: October 20, 2011

2. Publication of the proposed rules in the November 4, 2011, issue of the Texas Register(36 TexReg 7472).

3. Publication of the Notice of Public Hearing in the November 4, 2011, issue of the Texas Register (36 TexReg 7597).

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 Quality City of Dallas, Department ofAviation City of El Paso, Environmental ServicesCity 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 AgencyExample of Newspaper Classified Ad
Austin American-Statesman, October 20, 2011

NOTICE OF PUBLIC HEARING BY THETEXAS COMMISSION ON ENVIRONMENTAL QUALITYON 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 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, and corresponding revisions to the state implementation plan (SIP) under the requirements of Texas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, Subchapter B; and 40 Code of Federal Regulations §51.102, and the United States Environmental Protection Agency (EPA) conceming SIPs. The commission proposes to amend Chapter 114, Subchapter K, Division 3, Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles, to implement changes made to Texas Heatth and Safety Code, Chapter 386, Subchapter C, Diesel Emissions Reduction Incentive Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve criteria for the use of grant-funded vehicles and engines, destruction of vehicles and engines replaced under the program, ownership or lease of vehicles to be replaced under the program, and waiver of certain eligibility requirements by the executive director. (Rule Project Number 2011-050- 114-EN)

The commission proposes to amend Chapter 114, Subchapter K, Division 5, Texas Clean Fleet Program, to implement changes made to Texas Health and Safety Code, Chapter 391, Texas Clean Fleet Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve the number of vehicles that must be registered and operated in Texas by an eligible grant applicant, the number of vehicles that must be replaced under a grant. the period of commitment by a grant recipient for use of the grant-funded vehicles, requirements on the ownership or lease of the .vehicles being replaced, and the destruction requirements for the vehicles and engines being replaced. (Rule Project Number 2011-051-114-EN) The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 6, Alternative Fueling Facilities Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82nd Legislature, 2011, by adding the criteria that may be used by the executive director for prioritizing facilities eligible to receive grants under the Alternative Fueling Facilities Program, established underTexas Health and Safety Code, Chapter 393. (Rule Project Number 2011-052 -114-EN)

The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 7, Texas Natural Gas Vehicle Grant Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82nd Legislature, 2011, by adding the criteria that may be used by the executive director for prioritizing qualifying vehicles eligible to receive grants under the Texas Natural Gas Vehicle Grant Program, established underTexas Health and Safety Code, Chapter394. (Rule Project

· Number 2011-053-114-EN)A public hearing on these proposals will be held in Austin on November 29,2011, at 10:00 a.m. in Building E. Room 201S, at the commission's centra! office located at 12100 Parik 35 Circle. The hearing will be structured for the receipt of oral and written comments by interested persons. Registration will begin 30 minutes prior to the hearing. Interested persons 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 planning to attend the hearing who have special communication or other accommodation needs should contact Sandy Wong, Texas Register Team, at (512) 239-1802. Requests should be made as far in advance as possible.

Written comments on Rule Project Numbers 2011-050-114-EN and 2011-051-114-EN may be submitted to Charlotte Hom, and written comments on Rule Project Numbers 2011-052-114-EN and 2011-053-114-EN may be submitted to Bruce McAnally, at Texas Register Team, Office of Legal Services, Texas Commission on Environmental Quality, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, orfaxed to (512) 239-4808. Electronic comments may be submitted at http://www5.tceq. state.tx.us/rules/ ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference the rule project number that the comment pertains to: Rule Project Number 2011-050-114-EN for the proposed Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles rule amendments; Rule Project Number 2011-051-114-EN for the proposed Texas Clean Fleet**P~ogram** nule amendments; Rule Project Number 2011-052-114-EN forthe proposed Alternative Fueling Facilities Program rule; and Rule Project Number 2011-053-114-EN for the proposed Texas Natural Gas Vehicle Grant Program rule. The comment period closes December 5, 2011. Copies of the proposed rules can be obtained from the commission's Web site at http:l/www.tceq. texas.gov/navlrules/ propose_adopt.html. For additional information regarding the proposed rulemaking, please contact Stephen Dayton, Implementation Grants Section, at (512) 239-6824.

### ƇƇƇ

ƇƇƇ derground storage tank (UST) system found to be noncompliant with release detection, spill and overfill prevention, and/or, after December 22, 1998, cathodic protection regulations of the commission, until such time as the owner/operator brings the UST system into compliance with those regulations. The commission proposes a Shutdown Order after the owner or operator of a UST facility fails to perform required corrective actions within 30 days after receiving notice of the release detection, spill and overfill prevention, and/or, after December 22, 1998, cathodic protection violations documented at the facility. The commission proposes a Default Order when the staff has sent an executive director’s preliminary report and petition (EDPRP) to an entity outlining the alleged violations; the proposed penalty; and the proposed technical requirements necessary to bring the entity back into compliance; and the entity fails to request a hearing on the matter within 20 days of its receipt of the EDPRP or requests a hearing and fails to participate at the hearing. In accordance with TWC, §7.075, this notice of the proposed order and the opportunity to comment is published in the Texas Register no later than the 30th day before the date on which the public comment period closes, which in this case is December 5, 2011. The commission will consider any written comments received and the commission may withdraw or withhold approval of a S/DO if a comment discloses facts or considerations that indicate that consent to the proposed S/DO is inappropriate, improper, inadequate, or inconsistent with the requirements of the statutes and rules within the commission’s jurisdiction, or the commission’s orders and permits issued in accordance with the commission’s regulatory authority. Additional notice of changes to a proposed S/DO is not required to be published if those changes are made in response to written comments. Copies of each of the proposed S/DO are available for public inspection at both the commission’s central of fice, located at 12100 Park 35 Circle, Building A, 3rd Floor, Austin, Texas 78753, (512) 239-3400 and at the applicable regional of fice listed as follows. Written comments about the S/DO shall be sent to the attorney designated for the S/DO at the commission’s central of fice at P.O. Box 13087, MC 175, Austin, Texas 78711-3087 and must be received by 5:00 p.m. on December 5, 2011. Written comments may also be sent by facsimile machine tothe attorney at (512) 239-3434. The commission attorneys are available to discuss the S/DOs and/or the comment procedure at the listed phone numbers; however, comments on the S/DOs shall be submitted to the commission in writing. (1) COMPANY: Ali Attayi dba Attayi Service Station; DOCKET NUMBER: 2011-0296-PST-E; TCEQ ID NUMBER: RN102648508; LOCATION: 6730 Telephone Road, Houston, Harris County; TYPE OF FACILITY: underground storage tank (UST) system and a used car lot and mechanic shop; RULES VIOLATED: 30 TAC §334.7(d)(3), by failing to provide an amended registration for any change or additional information regarding the USTs; 30 TAC §37.815(a) and (b), by failing to demonstrate acceptable financial assurance for taking correction action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of the petroleum USTs; TWC, §26.3475(c)(1) and 30 TAC §334.50(b)(1)(A), by failing to ensure that the USTs are monitored in a manner which will detect a release at a frequency of at least once every month (not to exceed 35 days between each monitoring); PENALTY: $10,273; STAFF ATTORNEY: Gary Shiu, Litigation Division, MC R-12, (713) 422-8916; REGIONAL OFFICE: Houston Regional Of

fice, 5425 Polk Avenue, Suite H, Houston, Texas 77023-1452, (713) 767-3500. TRD-201104609 Kathleen C. Decker Director, Litigation Division Texas Commission on Environmental Quality Filed: October 25, 2011
Notice of Public Hearing on Proposed New 30 TAC Chapter 36 The Texas Commission on Environmental Quality (commission) will conduct a public hearing to receive testimony regarding proposed new30 Texas Administrative Code (TAC) Chapter 36, Suspension or Adjustment of Water Rights During Drought or Emergency Water Shortage, under the requirements of Texas Government Code, Chapter 2001, Subchapter B. The proposed rulemaking would implement House Bill 2694, §5.03, 82nd Legislature, 2011, relating to the executive director’s suspensionor adjustment of water rights during drought or emergency water shortage. The proposed rulemaking would define "drought" and "emergency shortage of water," set out procedures for the executive director’s order under this chapter, provide the terms of the order and conditions that must be met before an order can be issued, and establish an appeal of the executive director’s order to the commission. The commission will hold a public hearing on this proposal in Austin onDecember 1, 2011 at 2:00 p.m. in Building E, Room 201S, at the commission’s central of fice located at 12100 Park 35 Circle. The hearing 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 Sandy Wong, Of fice of Legal Services, at (512) 239-1802. Requests should be made as far in advance as possible. Written comments may be submitted to Michael Parrish, MC 205, Of

fice of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at: http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2011-033-036-LS. The comment period closes December 5, 2011. Copies of the proposed rulemaking can be obtained from the commission’s website at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html. For further information, please contact Robin Smith, Environmental Law Division, (512) 239-0463. TRD-201104484 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Filed: October 21, 2011

Notice of a Public Hearing on 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 TAC Chapter 114, Control of Air Pollution from Motor Vehicles, and corresponding revisions to the state implementation plan (SIP) under the requirements of Texas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, Subchapter B; and


### IN ADDITION November 4, 2011 36 TexReg 7597

### ƇƇƇ40 Code of Federal Regulations §51.102, and the United States Environmental Protection Agency (EPA) concerning SIPs.The commission proposes to amend Chapter 114, Subchapter K, Division 3, Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles, to implement changes made to Texas Healthand Safety Code, Chapter 386, Subchapter C, Diesel Emissions Reduction Incentive Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve criteria for the use of grant-funded vehicles and engines, destruction of vehicles and engines replaced under the program, ownership or lease of vehicles to be replaced under the program, and waiver of certain eligibility requirements by the executive director. (Rule Project Number 2011-050- 114-EN) The commission proposes to amend Chapter 114, Subchapter K, Division 5, Texas Clean Fleet Program, to implement changes made toTexas Health and Safety Code, Chapter 391, Texas Clean Fleet Program, by House Bill 3399, 82nd Legislature, 2011. The proposedchanges and additions involve the number of vehicles that must be registered and operated in Texas by an eligible grant applicant, the number of vehicles that must be replaced under a grant, the period of commitment by a grant recipient for use of the grant-funded vehicles, requirements on the ownership or lease of the vehicles being replaced, and the destruction requirements for the vehicles and engines being replaced. (Rule Project Number 2011-051-114-EN) The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 6, Alternative Fueling Facilities Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82nd Legislature, 2011, by adding the criteria that may be used by the executive director for prioritizing facilities eligible to receive grants under the Alternative Fueling Facilities Program, established under Texas Health and Safety Code, Chapter 393. (Rule Project Number 2011-052-114-EN) The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 7, Texas Natural Gas Vehicle Grant Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82ndLegislature, 2011, by adding the criteria that may be used by the executive director for prioritizing qualifying vehicles eligible to receive grants under the Texas Natural Gas Vehicle Grant Program, established under Texas Health and Safety Code, Chapter 394. (Rule Project Number 2011-053-114-EN) A public hearing on these proposals will be held in Austin on November 29, 2011, at 10:00 a.m. in Building E, Room 201S, at the commission’s central of fice located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral and written comments by interestedpersons. Registration will begin 30 minutes prior to the hearing. Interested persons 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 planning to attend the hearing who have special communication or other accommodation needs should contact Sandy Wong, Texas Register Team, at (512) 239-1802. Requests should be made as far in advance as possible. Written comments on Rule Project Numbers 2011-050-114-EN and 2011-051-114-EN may be submitted to Charlotte Horn, and written comments on Rule Project Numbers 2011-052-114-EN and 2011-053-114-EN may be submitted to Bruce McAnally, at Texas Register T eam, Of fice of Legal Services, Texas Commission on Environmental Quality, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference the rule project number that the comment pertains to: Rule Project Number 2011-050-114-EN for the proposed Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles rule amendments; Rule Project Number 2011-051-114-EN for the proposed Texas Clean Fleet Program rule amendments; Rule Project Number 2011-052-114-EN for the proposed Alternative Fueling Facilities Program rule; and Rule Project Number 2011-053-114-EN for the proposed Texas Natural Gas Vehicle Grant Program rule. The comment period closes December 5, 2011. Copies of the proposed rules can be obtained from the commission’s website at http://www.tceq.texas.gov/nav/rules/propose_adopt.html. For additional information regarding the proposed rulemaking, please contact Stephen Dayton, Implementation Grants Section, at (512) 239-6824. TRD-201104480 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Filed: October 21, 2011
Notice of Receipt of Application and Intent to Obtain a Municipal Solid Waste Permit Amendment APPLICATION. Liquid Environmental Solutions of Texas, LLC, 7651 Esters Boulevard, Suite 200, Irving, Dallas County, Texas 75063, a Type V, liquid waste processing facility that de-waters, recycles, and pre-treats non-hazardous liquid waste from municipal and industrial generators, has applied to the Texas Commission on Environmental Quality (TCEQ) for a permit amendment to authorize an increase in the permitted liquid waste treatment capacity from 6 million gallons per month (200,000 gallons per day) to 354,500 gallons per day; the extension of waste acceptance hours from 7:30 a.m. - 5:30 p.m. to 6:30 a.m. - 6:30 p.m.; a variance from buffer zone requirements; and a name change for the owner/operator from Liquid Environmental Solutions of Texas, L.P., to Liquid Environmental Solutions of Texas, LLC. The facility is located at 250 Gellhorn Drive, Houston, Harris County, Texas 77013. The TCEQ receivedthe application on August 16, 2011. The permit application is available for viewing and copying at the Harris County Public Library, 1026 Mercury Drive, Houston, Harris County, Texas 77029. The following link to an electronic map of the site or facility’s generallocation is provided as a public courtesy and is not part of the application or notice: http://www.tceq.texas.gov/assets/public/hb610/index.html?lat=29.785555&ing=-95.260833&zoom=13&type=r. For exact location, refer to application. ADDITIONAL NOTICE. TCEQ’s Executive Director has determined the application is administratively complete and will conduct a technical review of the application. After technical review of the application is complete, the Executive Director may prepare a draft permit and will issue a preliminary decision on the application. Notice of the Application and Preliminary Decision will be published and mailed to those who are on the county-wide mailing list and to those who are on the mailing list f or this application. That notice will contain the deadline for submitting public comments. PUBLIC COMMENT/PUBLIC MEETING. You may submit public comments or request a public meeting on this application. The purpose of a public meeting is to provide the opportunity to submit comments or to ask questions about the application. TCEQ will hold a public meeting if the Executive Director determines that there is a significant degree of public interest in the application or if requested by a local legislator. A public meeting is not a contested case hearing.


### 36 TexReg 7598 November 4, 2011 Texas RegisterBryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., Executive Director 

### TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventing Pollution


### NOTICE OF PUBLIC HEARING BYTHE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ON 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 TAC Chapter 114, Control ofAir Pollution from Motor Vehicles, and corresponding revisions to the state implementation plan (SIP) under the requirements ofTexas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, Subchapter B; and 40 Code of Federal Regulations §51.102, andthe United States Environmental Protection Agency (EPA) concerning SIPs.

The commission proposes to amend Chapter 114, Subchapter K, Division 3, Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles, to implement changes made to Texas Health and Safety Code, Chapter 386, Subchapter C, Diesel Emissions Reduction Incentive Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve criteria for the use ofgrant-funded vehicles and engines, destruction ofvehicles and engines replaced under the program, ownership or lease ofvehicles to be replaced under the program, and waiver ofcertain eligibility requirements by the executive director. 

### (Rule Project Number 2011-050- 114-EN)



### The commission proposes to amend Chapter 114, Subchapter K, Division 5, Texas Clean Fleet Program, to implement changes made to Texas Health and Safety Code, Chapter 391, Texas Clean Fleet Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve the number ofvehicles that mustbe registered and operated in Texas by an eligible grant applicant, the number ofvehicles that must be replaced under a grant, the period ofcommitmentby a grant recipient for use ofthe

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

### grant-funded vehicles, requirements on the ownership or lease ofthe vehicles being replaced, and the destruction requirements for the vehicles and engines being replaced. (Rule Project Number 2011-051-114-EN)

The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 6, Alternative Fueling Facilities Program. The proposedrulemaking would implement a portion ofSenate Bill 385, 82nd Legislature, 2011, by adding the criteria that maybe usedbythe executive director for prioritizing facilities eligible to receive grants under the Alternative Fueling Facilities Program, established under Texas Health and Safety Code, Chapter 393· (Rule Project Number 2011-052-114-EN)

The commission proposes to amend Chapter 114, Subchapter K, to add a new Division 7, Texas Natural Gas Vehicle Grant Program. The proposed rulemaking would implement
a portion ofSenate Bill385, 82nd Legislature, 2011, by adding the criteria that maybe usedbythe executive director for prioritizing qualifying vehicles eligible to receive grants under the Texas Natural Gas Vehicle Grant Program, established under Texas Health and Safety Code, Chapter 394. (Rule Project Number 2011-053-114-EN)

Apublichearing onthese proposals will be held in Austin on November 29, 2011, at 10:00 a.m. in Building E, Room 201S, at the commission's central office located at 12100 Park 35 Circle. The hearing will be structuredfor the receipt oforal and written commentsbyinterestedpersons. Registration will begin 30 minutes prior to the hearing. Interestedpersons maypresent oral statements when called upon in order of registration. Open discussion will notbe permitted during the hearing; however, commission staffmembers will be available to discuss the proposal 30 minutes prior to the hearing.

Persons planning to attend the hearing who have special communication or other accommodation needs should contact SandyWong, Texas Register Team, at (512) 239- 1802. Requests shouldbe made as far in advance as possible.

### Written comments on Rule Project Numbers 2011-050-114-EN and 2011-051-114-EN maybe submitted to Charlotte Horn, and written comments on Rule Project Numbers 2011-052-114-EN and 2011-053-114-EN maybe submitted to Bruce McAnally, at Texas Register Team, Office ofLegal Services, Texas Commission on Environmental Quality, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, orfaxed to (512) 239-4808. Electronic comments maybe submitted at 

### http:jjwwws.tceq.state.tx.usjrulesjecommentsj. File size restrictions may apply to comments being submitted via the eComments system. 

### All comments should reference the rule project number that the comment pertains to: Ruie Project Number 2011-050-114-ENfor the proposed Diesel Emissions Reduction Incentive Programfor On-Road andNon-RoadVehicles ruie amendments; Rule Project Number 2011-051-114-ENfor the proposedTexas Clean Fleet Program ruie amendments; Ruie ProjectNumber 2011-052-114- ENfor the proposedAlternative Fueling Facilities Program ruie; and Ruie Project Number 2011-053-114-ENfor the proposed Texas Natural Gas Vehicle Grant Program rule. The comment period closes December 5, 2011. Copies ofthe proposed rules canbe obtained from the commission's Web site at 

### http://www.tceq.texas.govjnavjrulesjpropose_adopt.html. For additional information regarding the proposed rulemaking, please contact Stephen Dayton, Implementation Grants Section, at (512) 239-6824.



### Issued inAustin, Texas, on October 18, 2011.

### ƇƇƇ(f) For a project to replace a motor vehicle, the vehicle being replaced may have been owned, leased, or otherwise commercially financed by the applicant. The applicant must have a legal right to replace and recycle or scrap the vehicle and engine before a grant is awarded for that project. (g) [(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 NOX 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. (h) The executive director shall waive eligibility requirements established under subsections (b) - (f) of this section on a finding of good cause, which may include a waiver of any ownership and use requirements established for replacement of a motor vehicle for short lapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances. (i) [(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. (j) [(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. (k) [(g)] A proposed retrofit, repower, replacement, or addon 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-388) for that type of project compared with the baseline emissions adopted by the commission for the relevant engine year and application. (l) [(h)] If a grant recipient fails to meet the terms of a projectgrant 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.(m) [(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 under Texas Health and Safety Code, §386.053(d), revisions to the guidelines may include, among other changes, adding additional pollutants; adding stationary enginesor engines used in stationary applications; adding vehicles and equipment that use fuels other than diesel; or adjusting eligible program categories; as appropriate, to ensure that incentives established under this program achieve the maximum possible emission reductions. This agency hereby certifies that the proposal has been reviewedby legal counsel and found to be within the agency’s legal authority to adopt. Filed with the Office of the Secretary of State on October 21, 2011. TRD-201104481 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Earliest possible date of adoption: December 4, 2011 For further information, please call: (512) 239-0779


### DIVISION 5. TEXAS CLEAN FLEET PROGRAM 30 TAC §§114.650 - 114.654 The Texas Commission on Environmental Quality (TCEQ, commission, or agency) proposes amendments to §§114.650 - 114.654. If adopted, the amended sections will be submitted to the United States Environmental Protection Agency (EPA) as revisions 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 (THSC), by adding Chapter 391, Texas Clean Fleet Program (program). This program is designed to encourage eligible fleets to replace diesel vehicles with alternative fuel or hybrid vehicles. House Bill (HB) 3399, 82nd Legislature, 2011, amended THSC, Chapter 391, to revise current eligibility criteria and add additional criteria. The changes made under HB 3399 are as summarized in the following paragraphs.THSC, §391.002(b), was revised to reduce the number of qualifying vehicles that an entity must place in service in the state inorder to be eligible to participate in the program from 25 to 20 vehicles. This provision is then qualified under THSC, §391.002(c), to allow for commission funding of fewer than 20 vehicles under agrant, as long as an entity’s application originally included 20 vehicles for replacement under the program. This provision allows an application to be approvable in the event that the commission does not approve one or more vehicles for funding during the application process. THSC, §391.004(a), was revised to reduce from 100 to 75 the number of vehicles that any entity must operate in its fleet in the state in order to be eligible to apply for and receive a grant under the program. Under a new THSC, §391.004(d), the commission is directed to minimize, to the maximum extent possible, the amount of paperwork required for an application. In addition, an applicant may be required to submit a photograph or other documentation of a vehicle identification number, registration information, inspection information, tire condition, or engine block identification only if it is requested after the commission has decided to award a grant to the applicant. THSC, §391.005(b)(2)(A), was revised to allow a vehicle that has been leased or otherwise commercially financed and registered



### 36 TexReg 7472 November 4, 2011 Texas Registerand operated by the applicant in Texas for at least the two years immediately preceding the submission of a grant application to be replaced under the program. The previous language only allowed vehicles that had been owned, registered, and operatedin Texas by the applicant for the preceding two years to be replaced under the program. A change was made to THSC, §391.005(c), to revise the requirement that a vehicle funded under the program be operated in the state by grant recipient for at least five years from the date of reimbursement, to require that the vehicle be operated in the state under the earlier of the fifth anniversary of the reimbursement date or until the date the vehicle has been in operation for 400,000 miles after the date of reimbursement. THSC, §391.005(f), was revised to require the commission to provide a means for an applicant to propose an alternative method of complying with the vehicle or engine destruction requirements of this subsection. The existing requirements include rendering the vehicle permanently inoperable by crushingthe vehicle or making a hole in the engine block and permanently destroying the frame of the vehicle. Finally, a new THSC, §391.005(i), was added to require the executive director of the TCEQ to waive the requirements of THSC, §301.004(b)(2)(A), upon a finding of good cause, which may include a waiver for short lapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances. This subsection includes requirements that an applicant have owned, leased, or otherwise commercially financed, registered, and operated the vehicle to be replaced in Texas for at least two years immediately preceding the submission of a grant application. These proposed rules incorporate the changes to THSC, Chapter 391, under HB 3399. Section by Section Discussion §114.650, Defi nitions Proposed revisions to §114.650(2) would amend the definition of an "Eligible Entity" to reduce the number of vehicles in an entity’s fleet that must be registered in Texas from 100 to 75 vehicles and the number of vehicles in an entity’s fleet that must be eligible for replacement from 25 to 20 vehicles as required under THSC, §391.004. §114.651, Applicability Section 114.651(a) would be amended to reduce the number of vehicles that must be included in an application from 25 to 20 vehicles, as required by THSC, §391.002(a).In addition, proposed subsection (b) would allow an entity to participate in the program if that entity submits a grant application for 20 or more qualifying vehicles, even if the commission denies approval for one or more of the vehicles during the application process, as required by THSC, §391.002(b). §114.652, Qualif ying Vehicles Section 114.652(b) would be amended to incorporate changes to the requirement for how long a grant-funded qualifying vehiclemust be owned, registered, and operated in Texas by a grant recipient. The ownership and use requirement would be changed from a period at least five years from the date of reimbursement of the grant-funded expenses, to until the earlier of the fifth anniversary of the date of reimbursement of the grant-funded expenses or until the date the vehicle has been in operation for 400,000 miles after the date of reimbursement. The amendment is required by THSC, §391.005. §114.653, Grant Eligibility The proposed rule would amend §114.653(b) to incorporate changes to the grant eligibility requirements to allow a vehicle that has been leased or commercially financed by the applicant to be replaced under the program, as required by THSC, §391.005. The proposed rule would also amend §114.653 to add subsection (e) directing the executive director to waive the requirement that a vehicle have been owned, leased, or commercially fi

nanced and registered and operated in Texas by the applicant on a finding of good cause, as required by THSC, §391.005. §114.654, Usage and Disposition Section 114.654(b) would be amended to include specific criteria for how a vehicle replaced under the program must be rendered permanently inoperable and to direct the executive director to provide a means for an applicant to propose an alternative method for rendering a vehicle inoperable, as required by THSC, §391.005. Under the specific criteria that would be added to subsection (b), a vehicle or engine replaced under the program would need to be rendered permanently inoperable by crushing the vehicle, by making a hole in the engine block and permanently destroying the frame of the vehicle, or by another method approved by theexecutive director that permanently removes the vehicle from operation in this state. The executive director would be required to provide a means for an applicant to propose an alternate method for complying with these destruction requirements. 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, no significant fiscal implications are anticipated for the agency as a result of administration or enforcement of the proposed rules. The agency will implement the proposed rules using currently available resources. Other units of state or local government may experience cost benefits from the proposed rules if they qualify for grant funds to replace a diesel vehicle with a vehicle that qualifies for grant funding under the program in Account 5071 - Texas Emission Reduction Plan (TERP). Appropriations for the program are an estimated $2.8 million in each year of the 2012 - 2013 biennium.The proposed rules would amend Chapter 114 per the requirements of HB 3399, to amend the criteria for the program. The proposed rules will change the definition of an eligible entity. The change in the definition will allow more entities statewide to apply for TERP funding by reducing the size of the fleet the entity must have from 100 vehicles or more to 75 vehicles or more and by reducing the number of vehicles eligible for replacement fromat least 25 to at least 20. The proposed rules also revise the required period of use for a qualifying vehicle to be the earliest of the fifth anniversary of reimbursement or 400,000 miles instead of at least five years. The proposed rules will also allow leased or otherwise commercially financed vehicles to be eligible for replacement. The proposed rules also allow the executive directorto waive the two-year ownership or lease and registration requirements for the vehicle being replaced upon a finding of good cause. The proposed rules also specify the method by which a motor vehicle or engine must be destroyed while providing a



### PROPOSED RULES November 4, 2011 36 TexReg 7473means by which an applicant can propose an alternate method of destruction. State agencies or units of local government may experience cost benefits from the proposed rules if they qualify for grant fundsto replace a light-duty or heavy-duty diesel vehicle with a vehicle that qualifies for grant funding under the program. The proposed rules are expected to increase the number of eligible grantees and replacement vehicles and motors. The program is a statewide voluntary incentive program, and staff is not able to determine how many state agencies or units of local governmentwould become eligible to apply for a grant at this time. Under current rules, an award from the program ranges from $15,000 to $140,000 depending on the type of vehicle or motor replaced. Public Benefits and Costs Nina Chamness also determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be improved air quality in the state. The proposed rules are expectedto expand the universe of potential grantees and vehicles eligible for replacement. The program is a voluntary statewide grant incentive program. The proposed rules may not have a direct fiscal benefit for individuals, since it is unlikely that an individual would meet therequirement that an applicant own and operate at least 75 vehicles in Texas. However, any eligible individual or entity should experience the same cost savings as those experienced by a local government or large business. Most eligible grantees are expected to be governmental agencies or businesses that own vehicle fleets. The proposed rules are expected to increase the number of businesses and the number of vehicles and motors that qualify for a grant under the program. Costs for vehicles could range from $30,000 for a light-duty vehicle to $180,000 or more for a large heavy-duty truck. Currently, eligible grant awards offsetting the replacement costs of these vehicles range from $15,000 to $140,000. Under the proposed rules, grantees are expected to experience similar cost savings. The grant program is a voluntary program, and staff is not able to determine how many state agencies or units of local government would become eligible to apply for a grant at this time. The proposed rules could increase revenue for sellers and lessors of qualifying replacement vehicles and motors since there should be more entities that qualify for grants and allow them to purchase eligible vehicles and motors at a lower cost. Small Business and Micro-Business Assessment No adverse fiscal implications are anticipated for small or microbusinesses as a result of the proposed rules. If a small business meets the eligibility requirements, it should experience the same type of cost savings or increased revenue as a large business. Currently, eligible grant awards offsetting the replacement costs of eligible vehicles range from $15,000 to $140,000. Small Business Regulatory Flexibility AnalysisThe commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not required because the proposed rules do not adversely affect a small or micro-business in a material way for the first five years that the proposed rules are in effect. Local Employment Impact Statement The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect. Draft Regulatory Impact Analysis DeterminationThe commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that this rule action is not subject to Texas Government Code, §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 thatmay 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 accordancewith HB 3399, which amended THSC, Chapter 391. The program offers financial incentives for the voluntary replacement of diesel engines. Because the proposed rules place no involuntary requirements on the regulated community, the proposed rules will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Also, none of the proposed 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 environmentalrule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not exceed a standard set by federal law. In addition, this rulemaking does not exceed an express requirement of state law and is not proposed solely under the general powers of the agency, but is specifically authorized bythe provisions cited in the Statutory Authority section of this preamble. Finally, this rulemaking does not exceed a requirement of a delegation agreement or contract to implement a state and federal program. The commission invites public comment on the draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble. Takings Impact Assessment The commission evaluated this rulemaking action and performed an analysis of whether the proposed rules are subject to Texas Government Code, Chapter 2007. The primary purpose of the rulemaking is to amend Chapter 114 in accordance with HB 3399. The rules amend the criteria for implementing a voluntary program and only affect motor vehicles which are not considered to be private real property. The promulgation and


### 36 TexReg 7474 November 4, 2011 Texas Registerenforcement of the proposed rules is neither a statutory nor a constitutional taking because it does not affect private real property. Therefore, the rules do not constitute a taking under Texas Government Code, Chapter 2007. Consistency with the Coastal Management Program The commission reviewed the proposed rulemaking and found the proposal is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2), concerning 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 amends a voluntary incentive grant program and does not govern air pollution emissions. Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble. Announcement of Hearing The commission will hold a public hearing on this proposal in Austin on November 29, 2011, at 10:00 a.m. in Building E, Room 201S, at the commission’s central office located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present 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 Sandy Wong, Office of Legal Services, at (512) 239-1802. Requests should be made as far in advance as possible. Submittal of Comments Written comments may be submitted to Charlotte Horn, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at: http:/ /www5.tceq.texas.gov/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2011-051-114-EN. The comment periodcloses December 5, 2011. Copies of the proposed rulemaking can be obtained from the commission’s Web site at http://www.tceq.texas.gov/nav/rules/propose_adopt.html. Forfurther information, please contact Stephen Dayton, Implementation Grants Section, (512) 239-6824. Statutory Authority The amendments are proposed under Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC and other laws of this state; and TWC, §5.105, which authorizes thecommission by rule to establish and approve all general policy of the commission. These amendments are also proposed under Texas Health and Safety Code (THSC), Texas Clean Air Act, §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the THSC; THSC, §382.011, which authorizes the commission to establish the level of quality to be maintained in the state’s air and to control the quality of the state’s air; and THSC, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state’s air. Finally, these amendments are proposed under THSC, Chapter 391, and are part of the implementation of House Bill 3399. The proposed amendments implement THSC, §§391.002, 391.004, and 391.005. §114.650. De finitions. Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules of the commission, the terms used in this subchapter have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms that are defined by the TCAA and §§3.2, 101.1, and 114.1 of this title (relating to Definitions), the following words and terms, when used in this division will have the following meanings, (1) Alternative fuel--A fuel, other than gasoline or diesel fuel. When used in this division, this definition is limited to the following: electricity, compressed natural gas, liquefied natural gas, hydrogen, propane, or a mixture of fuels containing at least 85% methanol by volume. (2) Eligible entity--Any person or entity with a fleet of 75 [100] or more vehicles that: (A) are registered in Texas; and (B) include at least 20 [25] vehicles that are eligible for replacement.(3) Golf cart--A motor vehicle designed by the manufacunless the context clearly indicates otherwise.

turer primarily for transporting persons on a golf course.(4) Heavy-duty vehicle--A motor vehicle with a gross vehicle weight rating greater than 8,500 pounds and containing an engine certified to the United States Environmental Protection Agency’s heavy-duty engine standards.(5) Hybrid vehicle--A motor vehicle with at least two different energy converters and two different energy storage systems on board the vehicle for the purpose of propelling the vehicle. (6) Light-duty motor vehicle--A motor vehicle with a gross vehicle weight rating of less than 10,000 pounds and certified to the United States Environmental Protection Agency’s light-duty vehicle emission standards. (7) Motor vehicle--A self-propelled device designed for transporting persons or property on a public highway that is required to be registered under Texas Transportation Code, Chapter 502. (8) Neighborhood electric vehicle--A motor vehicle that: (A) is originally manufactured to meet, and does meet,the equipment requirements and safety standards established for "lowspeed vehicles" in Federal Motor Vehicle Safety Standard No. 500 (49 Code of Federal Regulations §571.500); (B) is a slow-moving vehicle, as defined by Texas Transportation Code, §547.001 that is able to attain a speed of more than 20 miles per hour but not more than 25 miles per hour in one mile on a paved, level surface; (C) is a four-wheeled motor vehicle; (D) is powered by electricity or alternative power sources; (E) has a gross vehicle weight rating of less than 3,000 pounds; and


### PROPOSED RULES November 4, 2011 36 TexReg 7475

### ƇƇƇ (F) is not a golf cart. (9) Program--The Texas Clean Fleet Program established under this division. §114.651. Applicability.(a) Any eligible entity that will replace 20 [25] or more onroad diesel vehicles within a twelve-month period with qualifying vehicles may apply for a grant under the Texas Clean Fleet Program tooffset the cost of replacing those vehicles with alternative fuel or hybrid vehicles. (b) Notwithstanding subsection (a) of this section, an entity that submits a grant application for 20 or more qualifying vehicles is eligible to participate in the program even if the commission denies approval for one or more of the vehicles during the application process.(c) [(b)] The commission may allow a regional planning commission, council of governments, or similar regional planning agencycreated under Local Government Code, Chapter 391, or a private nonprofit organization to apply for and receive a grant to improve the ability of the program to achieve its goals. §114.652. Qualifying Vehicles. (a) A qualifying vehicle is one that: (1) is certified to current federal emissions standards; (2) replaces a diesel-powered on-road vehicle of the same weight classification and use; and (3) is a hybrid vehicle or fueled by an alternative fuel.(b) As a condition of receiving a grant the qualifying vehicle must be continuously owned, registered, and operated in Texas by the grant recipient until the earlier of the fifth anniversary of [for at least five years from] the date of reimbursement of the grant-funded expenses or until the date the vehicle has been in operation for 400,000 miles after the date of reimbursement. (c) A vehicle is not a qualifying vehicle if it: (1) is a neighborhood electric vehicle; (2) has been used as a qualifying vehicle to qualify for a grant under this division for a previous reporting period or by another entity; or (3) has qualified for a similar grant or tax credit in another jurisdiction. §114.653. Grant Eligibility. (a) To be eligible for a grant under the program a project must result in a reduction in emissions of nitrogen oxides of at least 25%, based on: (1) the baseline emission level set by the executive director; and (2) the certified emission rate of the new vehicle or engine. (b) The vehicle being replaced must: (1) be an on-road vehicle that has been owned, leased, or otherwise commercially financed, and registered[,] and operated by the applicant in Texas for at least the two years immediately preceding the submission of a grant application; (2) satisfy any minimum average annual mileage or fuel usage requirements established by the executive director; (3) satisfy any minimum percentage of annual usage requirements established by the executive director; and (4) be in operating condition with at least two years of remaining useful life, as determined in accordance with criteria established by the executive director. (c) At the discretion of the executive director, projects that result in a 25% reduction in other pollutants may be considered eligible for funding under this program. (d) The executive director may establish additional criteria for purposes of prioritizing projects for selection. Such criteria may include, but are not limited to: (1) nonattainment status of the primary location in which the eligible vehicles are used; or (2) cost per ton benefits of the overall emissions being reduced.(e) The executive director shall waive the requirements of sub section (b)(1) of this section on a finding of good cause, which may in clude a waiver for short lapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances. §114.654. Usage and Disposition.(a) Not less than 75% of the annual use of the qualifying vehicle, either mileage or fuel use as determined by the executive director, must occur in Texas. (b) A vehicle or engine replaced under this program must be rendered permanently inoperable by crushing the vehicle, by making a hole in the engine block and permanently destroying the frame of the vehicle, or by another method approved by the executive director that permanently removes the vehicle from operation in this state [in accordance with criteria established by the executive director]. The executive director shall provide a means for an applicant to propose an alternative method for complying with the requirements of this subsec tion. 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 21, 2011. TRD-201104482 Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Earliest possible date of adoption: December 4, 2011 For further information, please call: (512) 239-0779 -

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### DIVISION 6. ALTERNATIVE FUELING FACILITIES PROGRAM 30 TAC §§114.660 - 114.662 The Texas Commission on Environmental Quality (commission or agency) proposes new §§114.660 - 114.662. If adopted, the new sections will be submitted to the United States Environmental Protection Agency (EPA) as revisions to the state implementation plan. Background and Summary of the Factual Basis for the Proposed Rules



### 36 TexReg 7476 November 4, 2011 Texas Register

# TESTIMONYReference Number
W-1
W-2
W-3
W-4
W-5 INDEX OF WRITTEN TESTIMONY

Submitted by
Todd R. Campbell, on behalfofClean Energy
Matt Schrap, Crossroads Equipment Lease & Finance, LLC Lynn Lyon, on behalfofPioneer Natural Resources USA, Inc. Danny Smith, UPS GuyDonaldson, United States Environmental Protection Agency

# ~ Clean Energy· 3020 Old Ranch Parkway. Suite 400 Seal Beach, California 90740 USA 562.493.2804 fax: 562.493.4956

www.cleanenergyfuels.com

Charlotte Hom MC 205, Office ofLegal ServicesNovember 30, 2011

Texas Commission on Environmental Quality P.O. Box 13087 Austin, Texas 78711-3087 

# W-1

Todd R. Campbell, MEM, MPP Vice President. Public Policy and Regulatory Affairs

Re: Diesel Emissions Reduction Incentive Program Rulemaking Rule Project Number 2011-050-114-EN Rule Project Number 2011-051-114-EN

Dear Ms. Hom: On behalf of Clean Energy, we appreciate this opportunity to file comments on the Texas Commission on Environmental Quality's (''TCEQ") proposed rule changes to 30 Texas Administrative Code Chapter 114 to implement Section 386.104 and Chapter 391 of the Texas Health & Safety Code, which was amended by the 82nd Legislature through House Bill 3399. Clean Energy is the leading provider ofnatural gas {compressed natural gas (CNG) and liquefied natural gas (LNG)) for transportation in North America. The company has a broad customer base in the refuse, transit, ports, shuttle, taxi, trucking, airport, and municipal fleet markets, fueling more than 17,200 vehicles daily at over 190 strategic locations across the United States and Canada. Clean Energy was supportive ofthe Texas Legislature's initiative to pass HB 3399 to incorporate changes and additions to the Diesel Emission Reduction Incentive Program and Clean Fleet Program. TCEQ staff is to be commended for the hard work and effort they have put into developing the these programs and these rules. We look forward to the successful implementation ofthese rules.
The proposed rulemakings in response to HB 3399 make several administrative changes to TERP and Clean Fleet to make these programs work more effectively and efficiently for Texas-based fleets. The current application procedures are onerous and create a barrier for many fleets to apply. By simplifying the permitting process, fleet operators will be able to compete for grant funding, resulting in cost-effective emissions reductions. Furthermore, the rulemakings would simplify the paperwork required for Clean Fleet applications. Finally, the rulemakings provide that the Executive Director 1

NorthAmerica'sleaderIn clean transportation

# ~~ Clean Energy shall waive the eligibility requirements when good cause is shown. In other words, these rulemakings allow the TCEQ to grant a waiver ofthe eligibility requirements in cases where the purposes ofthe program would be met- where the TCEQ can certify that emissions reductions will be achieved and where the purposes of the program would be furthered.
Clean Energy fully supports TCEQ's rulemaking.

2

NorthAmerica'sleaderin dean transportation Respectfully,

# ~~~a>t::__
Todd R. Campbell Vice President Public Policy and Regulatory Affairs Clean Energy FuelsNovember 29, 2011 To: Mark R. Vickery, P.O., Executive Director, TCEQ From: Matt Schrap, Crossroads Equipment Lease and Finance & Crossroads Fleet Service (CFS) Re: Rule Project No. 2011-051-114-EN Dear Mr. Vickery, This letter is in regard to the proposed subsection changes under Texas Health and Safety Code (THSC) §391.000: Texas Clean Fleet, Rule Project Number 2011-051-114-EN. Crossroads Equipment Lease and Finance is a direct lending company specializing in transportation finance. Although based in California, Crossroads is national in scope with clients throughout the USA. The main focus ofour company is in assisting heavy duty truck operators secure zero cost grant assistance and fmancing towards the purchase or lease ofnew and used commercial vehicles. These vehicles meet the cleanest federal Environmental Protection Agency (EPA) engine standards across all commercial fuel platforms for large and small fleets. To help fleet owners access funding, Crossroads created California Fleet Solutions (CFS) in 2010 to help California fleets apply for equipment funding thfough various grant programs available in California. CFS has been successful in securing millions ofdollars in grant funding for California fleets with zero up-front costs or commitments from the applicant. In 2011, Crossroads created another division towards this end. Crossroads Fleet Service (CFS) is using expertise gained through our no cost grant securement process in order to help trucking fleets large and small, across the United States secure funding towards the purchase ofnew clean equipment. We actively pursue grant opportunities and have been very successful in promoting outreach and providing residual financing for remaining costs in the truck purchase after the grant. One reason for our continued success is our experience in administration ofgovernment finance programs directed at truck users who have received a grant for the purchase ofclean equipment. Crossroads was instrumental in assisting the Ports ofLos Angeles and Long Beach (Ports) in achieving their funding goals under their Clean Air Action Plan (CAAP). One hundred percent ofthe trucks that received funding through the Ports grant program were financed by Crossroads. The Port Finance Acceptance Company (PFAC) was created specifically through

# a partnership between Crossroads and Daimler Trucks North American (DTNA) and is still in existence today. Crossroads is also the administrator for the CaliforniaAir Resources Board (CARB) Direct Loan (DL} Program and is the number one lending entity in the California Capital Access Program (CalCAP) administered through the California State Treasurer's Office.Both the Ports and the CARB DL programs were put out to competitive bid in a Request for Proposals (RFP) process. Crossroads was awarded these contracts due to our specific knowledge ofthe trucking industry and our commitment to providing no cost funding assistance to fleets Through ourprogram administration we have gained a firsthand look into the challenges that large motor carriers and small fleets alike face in this market. We are an active member ofthe indru;try and maintain membership as a SmartWay Transport Affiliate Partner, as well as in the American Trucking Association (ATA) the California Trucking Association (CTA) and the Texas Motor Transport Association (TMTA). Crossroads and CFS are no strangers when it comes to the trucking industry and grant program administration and distribution. Along those lines, this letter is to commendthe TCEQ for taking an active leadership role throughout this guideline modification process. The suggested changes demonstrate TCEQ's acknowledgement ofpotential challenges entities face when soliciting applicants for funding

. .Fleets throughoutthe covered areas in Texas will greatly benefit from the subsection changes you have proposed in the Texas Clean .Fleets Program Rules. Crossroads is looking forward to assisting fleet operators secure TERP grants through the TCEQ, and readily offer ourselves as a unique resource throughout the process. Please feel free to contact our offices at the infonnation below. Thankyou for taking time to read our comments. Sincerely,

Matt Schrap, President, CFS Crossroads Equipment Lease & Finance 9121 Haven Ave. Ste. 270 Rancho Cucamonga, CA 91730

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# PIONEER W-3 NATURAL RESOURCES

Pioneer Natural Resources USA, Inc. 5205 N. O'Connor Blvd., Suite 200 Irving, TX 75039-3746

Charlotte Horn MC 205, Office ofLegal Services Texas Commission on Envirorunental Quality P.O. Box 13087 Austin, Texas 78711-3087 Tel: (972) 444-9001

November 30, 2011

Re: Diesel Emissions Reduction Incentive Program Ru1emaking Rule Project Number 2011-050-114-EN Rule Project Number 2011-051-114-EN
Dear Ms. Horn:
On behalfofPioneer Natural Resources ("Pioneer") we appreciate this opportunity to file comments on the Texas Commission on Envirorunental Quality's ("TCEQ") proposed rule changes to 30 Texas Administrative Code Chapter 114 to implement Section 386.104 and Chapter 391 ofthe Texas Health & Safety Code, which was amended by the 82nd Legislature through House Bill 3399.
Pioneer is one ofthe most active oil and gas drillers in Texas, with operations in the Permian Basin, Barnet Shale, and Eagle Ford Shale. In particular, Pioneer is the largest acreage holder, driller and producer in the Spraberry Field, which covers nine counties in West Texas. Overall, Pioneer produces roughly 115,000 barrels ofoil equivalent per day, operates over 9,200 producing wells, and employs over 2,200 workers. Pioneer was supportive ofthe Texas Legislature's initiative to pass HB 3399 to incorporate changes and additions to the Diesel Emission Reduction Incentive Program and Clean Fleet Program. TCEQ staffis to be commended for the hard work and effort they have put into developing the these programs and these rules. We look forward to the successful implementation ofthese rules.
The proposed rulemakings in response to HB 3399 make several administrative changes to TERP and Clean Fleet to make these programs work more effectively and efficiently for Texas-based fleets. The current application procedures are onerous and create a barrier for many fleets to apply. By simplifying the permitting process, fleet operators will be able to compete for grant funding, resulting in cost-effective emissions reductions.[Recipient Name] November 30, 2011 Page2
Furthennore, the ru1emakings would simplify the paperwork required for Clean Fleet applications. Finally, the ru1emakings provide that the Executive Director shall waive the eligibility requirements when good cause is shown. 

### In other words, these rulemakings allow the TCEQ to grant a waiver of the eligibility requirements in cases where the purposes of the program would be met

- where the TCEQ can certify that emissions reductions will be achieved and where the purposes ofthe program would be furthered.
Pioneer fully supports TCEQ's rulemaking.

Respectfully,

Lynn Lyon Manager ofStrategic Projects Domestic Operations Pioneer Natural Resources660 Fritz Drive Coppell, TX 75019



### November 15, 2011
Steve Dayton Rule Project Manager Texas Commission on Environmental Quality 12100 Park 35 Circle Austin, Texas 78711-3087

Dear Mr. Dayton: 

# W-4

UPS appreciates the opportunity to comment on the proposed rules for the Diesel Emissions Reduction Incentive Program, the Texas Clean Fleet Program, the Alternative Fueling Facilities Program and the Texas Natural Gas Vehicle Grant Program. The Texas Legislature has recognized and acted on the need for alternative

. fueled vehicles to reduce harmful emissions in our major cities,

decrease our dependency on foreign oil, and to take advantage of Texas' resources, particularly natural gas. UPS is a leader in the use of alternative fuel vehicles, with over 1,347 alternative fuel/technology vehicles nationwide and 1,914 worldwide. We are committed to increasing the number of such vehicles in Texas, and have made that commitment known to the leadership of the state in public testimony. UPS has enjoyed our partnership with TCEQ through our participation in the Clean Fleet Program, passed in the 2009 session. As you know, UPS received funding through the program to purchase 55 hybrid electric vehicles and has deployed them in the Houston and Austin areas. UPS has reviewed the proposed rules for Docket Numbers 2011- 1219-RUL, 2011-1220-RUL, 2011-1221-RUL and 2011-1222-RUL.

### We have no suggested changes to the proposed rules and believe these proposed rules will assist in making the existing Clean Fleet Program function as smoothly and efficiently as possible as well as get the new programs for natural gas facilities and vehicles up and running quickly. We will continue to provide input to TCEQ as the ·agency moves to adopt rules for these programs and will be ready to apply for funding once the rules have been approved and the application process has begun. It is UPS' intention to apply for funding for both facilities and vehicles under the existing Clean Fleet program and the new natural gas program. We look forward to continuing to work together to make Texas's air the cleanest it can be. Should you need any further information regarding UPS's ability to commit to these programs, please don't hesitate to contact me.

Sincerely,

DannySmi h Vice President State Government Affairs 660 Fritz Drive Coppell, Texas 75019 972-304-6500Ms. Charlotte Horn UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGIONS 1445 ROSS AVENUE, SUITE 1200 DALLAS TX 75202-2733 

### DEC 5 2011

Texas Commission on Environmental Quality P.O. Box 13087 Austin, TX 78711-3087
Re: Rule Project Number 20 11-051-114-EN
Dear Ms. Horn: 

# W-5

Thank you for the opportunity to review and comment on proposed revisions to 30 TAC Chapter 114, Control ofAir Pollution from Motor Vehicles, and corresponding revisions to the state implementation plan (SIP). The proposed revisions will amend Chapter 114, Subchapter K, Mobile Source Incentive Programs, Division 5, Texas Clean Fleet Program, to implement changes made to the Texas Health and Safety Code (THSC), Chapter 391, by Texas House Bi113399, 

### sznd Legislature,2011. The proposed changes and additions involve the number ofvehicles that must be registeredand operated in Texas by an eligible grant applicant, the number ofvehicles that must be replaced under a grant, the period of commitment by a grant recipient for use ofthe grant-funded vehicles, requirements on the ownership or lease ofthe vehicles being replaced, and the destruction requirements for the vehicles and engines being replaced.
The Environmental Protection Agency (EPA) appreciates the efforts ofthe Texas Commission on Environmental Quality (TCEQ) to continually improve and expand mobile source incentive programs. However, the EPA is concerned with the proposed revision that amends § 114.653, Grant Eligibility, by adding subsection (e) \Vhich states "the executive director shall waive the requirements ofsubsections (b)(l) ofthis section on a finding ofgood cause, which may include a waiver for short lapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances." The EPA recommends that you remove the phrase "or other circumstances" from subsection (e) of§ 114.653 since it is not well defined.
The EPA Region 6 continues to applaud the TCEQ's efforts to continually improve mobile source incentive programs, and we offer our support during the rule revision process. Ifyou have any questions or need additional clarification, please contact Mr. John Walser ofmy staffat 214-665·7128. Please let us know how we may be offurther assistance. · Sincerely yours,

Guy Donaldson Chief Air Planning Section

Internet Address {URL) • http://www.epa.gov/region6 Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100% Recycled Paper, Process Chlorine FreeINDEX OF ORAL TESTIMONY

NO ORALTESTIMONYW AS RECEIVED PERTAININGTO THIS RULE REVISION.

# Texas Commission on Environmental Quality Public 

## Hearing Registration
November 29, 2011 1o:ooa.m. Rule Project Nos.: 2011-050-114-EN, 2011-051-114-EN, 2011-052-114-EN, 2011-053-114-EN 

### - 1 -

ShortTitle: HB 3399: Emissions Reduction Incentive Program Rules; HB 3399: Texas Clean Fleet Program Rules; SB 385: Alternative Fueling Facilities Program Rule; SB 385: Texas Natural Gas Vehicle Grant Program Location: TCEQ main complex, 12100 Park 35 Circle, Building E, Room 201S, Austin, Texas Concerning: Amendments to 30 TAC Chapter 114

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# Texas Commission on Environmental Quality Public Hearing Registration
November 29, 2011

. . 1o:ooa.m

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# . Rule Project Nos.: 2011-050-114-EN, 2011-051-114-EN, 2011-052-114-EN, 2011-053-114,.EN ShortTitle: HB 3399: Emissions Reduction Incentive Program Rules; HB 3399: Texas Clean Fleet Program Rules; SB 385: Alternative Fueling Facilities Program Rule; SB 385: Texas Natural Gas Vehicle Grant Program Location: TCEQ main complex, 12100 Park 35 Circle, Building E, Room 201S, Austin, Texas Concerning: Amendments to 30 TAC Chapter 114

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### HEARING OFFICER REPORT
I am the hearing officer assigned to conduct the public hearingregarding: The TCEQ proposal to amend Chapter 114, Subchapter 

### K, Division 3, Diesel Emissions Reduction Incentive Program for On-Road and Non-Road Vehicles, to implement changes made to Texas Health and Safety Code, Chapter 386, Subchapter C, Diesel Emissions Reduction Incentive Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve criteria for the use ofgrant-funded vehicles a:J;J.d engines, destruction ofvehicles and engines replaced under the program, ownership or lease of vehicles to be replaced under the program, and waiver of certain eligibility requirements bythe executive director. (Rule ProjectNumber 2011-050-114-EN); The TCEQ proposal to amend Chapter 114, Subchapter K, Division 5, Texas Clean Fleet Program, to implement changes made to Texas Health and Safety Code, Chapter 391, Texas Clean F1eet Program, by House Bill 3399, 82nd Legislature, 2011. The proposed changes and additions involve the number of vehicles that must be registered and operated in Texas by an eligible grant applicant, the number of vehicles that must be replaced under a grant, the period of commitment by a grant recipient for use of the grant-funded vehicles, requirements on the ownership or lease of the vehicles being replaced, and the destruction requirements for the vehicles and engines being replaced. (Rule ProjectNumber 2011.-051-114-EN); The TCEQ proposal to amend Chapter 114, Subchapter K, to add a new Division 6, Alternative Fueling Facilities Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82nd Legislature, 2011, by adding the criteria that may be used by the executive director for prioritizing facilities eligible to receive grants under the Alternative Fueling Facilities Program, established under Texas Health and Safety Code, Chapter 393. (Rule ProjectNumber 2011-052-114-EN); The TCEQ proposal to amend Chapter 114, Subchapter K, to add a new Division 7, Texas Natural Gas Vehicle Grant Program. The proposed rulemaking would implement a portion of Senate Bill 385, 82nd Legislature, 2011, by adding the criteria that may be usedbythe executive director for prioritizing qualifying vehicles eligible to receive grants under the Texas Natural Gas Vehicle Grant Program, established under Texas Health and Safety Code, Chapter 394· (Rule Project Number 2011-053-114-EN). A public hearing was scheduled for November 29, 2011, at 10:00 a.m., in Austin in Building E, Room 201S, at the commission's central office located at 12100 Park 35 Circle.

Hearing Officer 1

Date signedBEFORE THE TEXAS COMMISSION
ON ENVIRONMENTAL QUALITY

Public Meeting for Title 30, ) Texas Administrative Code Chapter 114, ) Control of Air Pollution for Motor Vehicles

Room 201S, Building E TCEQ Complex 12100 Park 35 Circle Austin, Texas Tuesday, November 29, 2011

The above-entitled matter came on for hearing, pursuant to notice, at 10:00 a.m.

BEFORE: Bruce McAnally

- General Law Division Charlotte Horn

- General Law Division Steve Dayton

- Air Quality Division

### TCEQ

- Public Hearing

- 11/29/2011

1 

### PROCEEDINGS
2 

### (10:01 a.m.)
3 

### BRUCE McANALLY: Good morning, and thank you 4 for coming to this Texas Commission on Environmental 5 Quality combined public hearing for four separate 6 proposed rules. My name's Bruce McAnally. I'm with the 7 TCEQ General Law Division. With me also is Charlotte 8 Horn, also with the TCEQ Law Division, Steve Dayton with 9 the TCEQ Air Quality Division. Steve is a project 10 manager for all four of the rule projects TCEQ will 11 receive comments on today. And Betsy Peticolas is the 12 TCEQ staff attorney assigned to all four of today's rule 13 projects: 14 Rule Project Number 2011-050-114-EN 15 regarding the Emissions Reduction Incentive Program 16 Rules outlined in House Bill 3399 from the 82nd 17 Legislature. Rule Project Number 2011-051-114-EN 18 pertaining to Texas Clean Fleet Program Rules specified 19 in House Bill 3399 of the 82nd Legislature. Rule 20 Project Number 2011-052-114-EN for Senate Bill 385 for 21 the 82nd legislature regarding the Alternative Fuels 22 Facility Program Rule. And Rule Project Number 23 2011-053-114-EN for Senate Bill 385 of the 82nd 24 Legislature dealing with the Texas Natural Gas Vehicle 25 Grant Program.
Integrity Legal Support Solutions www.integrity-texas.com 2

### TCEQ

- Public Hearing

- 11/29/2011

1 TCEQ staff are present this morning to 2 receive oral or written comments on the proposed 3 revisions to 30 Texas Administrative Code, Chapter 114 

### 4 concerning Control of Air Pollution for Motor Vehicles. 5 If you'd like to present oral testimony today and have
6 

### not signed in at the registration table, please do so
7 

### now. 8 

### If you're not familiar with the proposed
9 

### changes, copies of the proposals as published in the 10 Texas Register are available at the registration table. 11 There are also copies of the hearing notice. So if 12 anyone would like to submit written comments, you can 13 find the information on where to fax or mail your 14 written comments or submit on the internet via the TCEQ 15 eComments system. 16 The TCEQ will continue to accept written 17 comments on these proposals until December 5, 2011. 18 This hearing is structured strictly for the receipt of 19 oral or written comments. Open discussion during the 20 hearing is not allowed. However, if you should you have 21 any additional questions or comments regarding these 22 proposals, there will be an opportunity after the 23 hearing to have your questions answered by TCEQ staff 24 one on one. 25 Now, at this time·no one has specified on Integrity Legal Support Solutions www.integrity-texas.com 3TCEQ

- Public Hearing

- 11/29/2011

1 registration they would like to speak. So anybody have
2 anything

-- any chance? Okay. Seeing that no one has 3 requested to make a comment, once again, the TCEQ will
4 continue to accept written comments on the proposed 5 revisions to Texas Administrative Code, Chapter 114
6 concerning the Control of Air Pollution from Motor
7 Vehicles regarding TCEQ Project Numbers 2011-050, 8 2011-051, 2011-052 and 2011-053 until December 5, 2011. 9 And if we have no request to make comments, 10 our hearing is closed. Thank y'all for coming.
11
12 13
14 15
16 17 18 19 20

.21
22
23
24 25 (Hearing concluded, 10:05 a.m.)

Integrity Legal Support Solutions www.integrity-texas.com 4TCEQ

- Public Hearing

- 11/29/2011

1 C E R T I F I C A T E
2 3 IN RE: Public Meeting for Title 30, Texas 4 Administrative Code Chapter 114, Control of Air 5 Pollution for Motor Vehicles.
6 LOCATION: Austin, Texas
7 Date: November 29, 2011
8 9 I, Joy N. Quiroz-Hernandez, Certified 10 Shorthand Reporter Number 8391 for The State of Texas, 11 do hereby certify that I did, in computerized stenotype 12 shorthand, transcribe proceedings in the above-entitled 13 matter to the best of my ability and hearing,
14 proceedings before the Texas Commission on Environmental 15 Quality and that the above and foregoing pages contain a 16 17 18 19 20
21
22 23
24 25 full and correct computer-assisted transcription of my computerized stenotype shorthand notes.

Joy N. Quiroz-Hernandez, CSR CSR No. 8391

- Expires 12/31/11 Integrity Legal Support Solutions Firm Registration No. 528 3100 W. Slaughter Lane, Suite A-101 Austin, Texas 78748 (512) 320-8690 (512) 320-8692 (Fax)

Integrity Legal Support Solutions www.integrity-texas.com 5

# EVALUATION

# Texas Commission on Environmental Quality Interoffice Memorandum To: Commissioners 

### Date: March 9, 2012 

### Thru: Bridget Bohac, ChiefClerk Mark R. 

### Vicke:ry, P.G., Executive Director
From: 

### Susana M. Hildebrand, P.E., 

### ChiefEngineer

# (j!j

DocketNo.: 2011-1220-RUL 

### Subject: Commission Approval for Rulemaldng Adoption Chapter 114, Control ofAir Pollution from MotorVehicles HB 3399: Texas Clean Fleet Program Rules Ru1e Project No. 2011-051-114-EN 

### Backgroundandreason(s) for the rulemaking: House Bill (HB) 3399, 82nd Legislature, 2011, Regular Session, by Representatives Legler, Strama, Reynolds, and Chisum, amends sections ofTexas Health and Safety Code (THSC), Chapter 391. This chapter establishes-the Texas Clean Fleet Program (program) to be funded from theTexas Emissions Reduction Plan (TERP) Fund and administeredby the Texas Commission on Environmental Quality (commission). The changes under HB 3399 require amendment ofexisting rules to revise currentprovisions and add new provisions. 

### Scope ofthe rulemaking: A.) 

### Summaryofwhat the rulemakingwill do: HB 3399 added new subsections and revised existing sections ofTHSC, Chapter 391, Texas Clean Fleet Program. The revisions to 30 TAC Chapter 114, as requiredby HB 3399, incorporate changes and additions to the program eligibility criteria, including: changes to the number ofvehicles that mustbe includedin a grant andthat maybe awarded funding bythe commission; changes to allow a vehicle that hasbeen leased or commercially financed tobe replaced underthe program; changes to the time periodover which a grant-fundedvehicle mustbe operated, to either five years or 400,000 miles, whichever occurs earlier; and establishing criteria for decommissioning a vehicle orvehicle engine replaced underthe program. The revisions also include provisions, as required under HB 3399, thatthe executive director shall waive the ownership anduse requirements for the vehicle being replaced, upon a finding ofgood cause. 

### B.) Scoperequired

### byfederal regulations orstate statutes: The adopted rules are requiredby changes to THSC, Chapter 391, under HB 3399· 

### C.) Additional staffrecommendations that are notrequiredbyfederal rule or ·state statute: Staffis notrecommending additional provisions beyond what is required under THSC, Chapter 391, as amendedby HB 3399·[. i 

### Commissioners Page 2· March 9, 2012 Re: Docket No.**2011~1220-RUL** 

### Statutoryauthority: • Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties; • TWC, §5.103, which authorizes the commission to adopt anyrules necessaryto carry outthe powers and duties underthe provisions ofthe TWC and other laws ofthe state; • TWC, §5.105, which authorizes the commissionby rule to establish and approve all general policy ofthe commission; • THSC, §382.107, which authorizes the commission to adoptrules consistentwith thepolicy and purposes ofthe Texas Clean Air Act; • THSC, §382.011, which authorizes the commission to establish thelevel ofquality to bemaintainedinthe state's air andto control the quality ofthe state's air; • THSC, §382.012, which authorizes the commission to prepare and develop a -general, comprehensive plan for the control ofthe state's air; • THSC, Chapter 386, which establishes the TERP program; and • THSC, Chapter 391, which establishes theTexas Clean Fleet Program. 

### Effect

### on the: A.) 

### Regulated community: These rules will not affect regulated entities. 

### B.) Public: The changes tothe eligibility criteriafor the grants will potentially expand the number ofentities andvehicles eligible to participate inthe grants. The changes may also make it easier for some entities to participate inthe program. 

### C.) Agencyprograms: Program processes, criteria, andforms will need tobeupdated. Also, a process will needto be developed for considering waivers to the eligibility requirements. 

### Stakeholdermeetings: Stakeholder meetings were not held for this rulemaking. 

### Publiccomment: The proposal was published inthe November 4, 2011, issue ofthe 

### Texas Register (36 TexReg 7472). A public hearing was scheduledfor November 29, 2011; however, since no one registeredto provide comments, thehearingwas not officially opened. The comment period closed on December 5, 2011. The commission received written comments from Clean Energy Fuels (Clean Energy), Crossroads Equipment Lease & 

### Finance (Crossroads), Pioneer Natural Resources USA, Inc. (Pioneer), and United Parcel Service (UPS) in support ofall or part ofthe rulemaking. The United States Environmental Protection Agency Region 6 (EPA) submitted written comments in support ofthe rulemaking, but expressed concern andrecommended changes to part ofthe proposal. Significant comments and concerns are discussed further.

### Commissioners Page3 March 9, 2012 Re: Docket No.**2011~122o~RUL**


### Clean Energy and Pioneer commentedthatthe proposedrule changes will make the program more effective and efficient for Texas-basedfleets bysimplifying the application process. Crossroads also statedthatthe proposedrule changes demonstrated an acknowledgement ofthe potential challenges entities face when soliciting applicants for funding andthatfleets inthe designated areas will greatly benefitfrom the rule changes. No changes were made to the proposedtext in response to these comments. Clean Energy, Pioneer, and UPS expressed supportfor the addition of §114.653(e) to provide the executive directorthe authorityto waive the requirements of §114.653Cb)(1), pertaining to the ownership, registration, anduse ofthevehicle being replaced, on a finding ofgood cause. No changes were made to the proposedtext in response to these comments. The EPA expressed concern with the addition §114.653(e). EPA recommendedthe commission remove the phrase 11

### 0r other circumstances" from subsection (e), since it is not well defined. Changes were madeto the proposedtext in response to these comments, as outlinedinthe following section regarding significant changes from the proposal. 

### Significant changesfrom proposal: The provision in §114.653(e) implements requirements addedby HB 3399· The intent of this provision is to authorize the executive director to consider unique situations that, while not meeting the strictletter ofthe eligibility requirements, will still meet the intent of the requirements. Therefore, theterm "other circumstances" was notremovedfrom §114.653(e) in response tothe EPA's comment. However, additional language was added to subsection (e) from the proposedtextto state that in granting a waiver, the executive directorshall ensure thatthe projected emissions reductions will be valid and, where applicable, meet the conditions for assignmentfor creditto the state implementation plan. This addition is intendedto clarify thelimits on the waiver provisions andto provide assurance that any waiver decision will be made only after considering the impact ofthe waiver onthe emissions reductions. 

### Potential controversialconcerns andlegislative interest: The rules incorporate provisions required under THSC, Chapter 391, as amendedby HB 3399. The niles do not go further than whatis required to complywiththe statutory changes. Therefore, staffdoes not anticipate any concerns being raised about the mles, beyond the comments received onthe proposedtext. Staffexpects thatthelegislators involved in HE 3399 and stakeholders will be interested inhowthe commission implements the newprovisions. 

### Does this rulemakingaffect anycurrentpolicies or require development of newpolicies? Program application materials and contract shells will need to be updated. Also, a process will need tobe developed for considering waivers to the eligibility requirements.

### Commissioners Page4 March 9, 2012 Re: Docl<:et No. 2011-1220-RUL



### 'What arethe consequences ifthis rulemaldng does notgoforward? Arethere alternativesto rulemaking? This rulemaking is requiredto amendthe criteria for implementingthe Texas Clean Fleet Program under THSC, Chapter 391. 

### Ifthe rulemaldng is not completed, implementation of the program under existing mles would be inconsistent with the statutoryprovisions. Possible alternatives are not adopting the rules or adopting the rules at a later date and delaying implementation ofthe program. 

### Keypoints inthe adoption rulemaking schedule: 

### TexasRegisterproposalpublication date: November 4, 2011 

### Anticipated 

### TexasRegisterpublicationdate: Apri113, 2012 

### Anticipatedeffective date: April19, 2012 

### Six-month 

### TexasRegisterfiling deadline: May 4, 2012 

### Agencycontacts: Steve Dayton, Rule Project Manager, 239-6824, Air QualityDivision Betsy Peticolas, StaffAttorney, 239-1439 Charlotte Horn, Texas Register Coordinator, 239-0779 

### Attachments

cc: ChiefClerk, 2 copies Executive Director's Office SusanaM. Hildebrand, P.E. Anne Idsal Curtis Seaton Ashley Morgan Office ofGeneral Counsel Steve Dayton Charlotte HornEVALUATION OF TESTIMONY

The Texas Commission on Environmental Quality (TCEQ or commission) adopts the amendments to §§114.650

- 114.654.

Section 114.653 is adopted with change to the proposed text as published in the November 4, 2011, issue ofthe Texas Register (36 TexReg 7472). Sections 114.650- 114.652, and 114.654 are adopted without changes to the proposed text and will notbe republished.

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



### Background and Summary ofthe Factual Basis for theAdopted Rules
Senate Bill1759, 81st Legislature, 2009, amended the Texas Health and Safety Code (THSC), by adding Chapter 391, Texas Clean Fleet Program (program). This program is designed to
encourage eligible fleets to replace diesel vehicles with alternative fuel or hybrid vehicles. House Bill (HB) 3399, 82nd Legislature, 2011, amended THSC, Chapter 391, to revise current eligibility criteria and add additional criteria. The changes made under HB 3399 are as summarized in the following paragraphs.

THSC, §391.002(b), was revised to reduce the number from 25 to 20 ofqualifying vehicles that

an entity must place in service in the state in order to be eligible to participate in the program. This provision further allows under THSC, §391.002(c), for commission funding offewer than

120 vehicles under a grant, as long as an entity's application originally included 20 vehicles for replacement under the program. This provision allows an application to be approvable in the
event that the commission does not approve one or more vehicles for funding during the application process.

THSC, §391.004(a), was revised to reduce from 100 to 75 the number ofvehicles that any entity
must operate in its fleet in the state in orderto be eligible to apply for and receive a grant under the program.

Under a new THSC, §391.004(d), the commission is directed to minimize, to the maximum
extent possible, the amount ofpaperwork required for an application. In addition, an applicant
may be required to submit a photograph or other documentation ofa vehicle identification number, registration information, inspection information, tire condition, or engine block identification only ifitis requested after the commission has decided to award a grant to the applicant.

THSC, §391.005(b)(2)(A), was revised to allow a vehicle that has been leased or otherwise commercially financed and registered and operatedby the applicant .in Texas for at least the two
years immediately preceding the submission ofa grant application to be replaced under the
program. The previous language only allowed vehicles that hadbeen owned, registered, and operated in Texas bythe applicant for the preceding two years to be replaced under the
program.

2Requirements regarding the operational period ofvehicles under this grant program were expanded under THSC, §391.005(c). Previously, vehicles funded through a grant were required
to be operated for at least five years from the date ofreimbursement ofexpenses. Under the THSC, §391.005(c) the vehicle mustbe operated until the earlier ofthe fifth anniversary ofthe reimbursement date or until the date the vehicle has been in operation for 400,000 miles.

THSC, §391.005(±), was revised to require the commission to provide a means for an applicant
to propose an alternative method ofcomplying with the vehicle or engine destruction requirements ofthis subsection. The existing requirements include rendering the vehicle permanently inoperable by crushing the vehicle or making a hole in the engine block and permanently destroying the frame ofthe vehicle.

Finally, THSC, §391.005(i), was added to require the executive director ofthe TCEQ to waive the requirements ofTHSC, §301.004(b)(2)(A), upon a finding ofgood cause, which may include a waiver for shortlapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances. This subsection includes requirements that an applicant have owned, leased, or otherwise commercially financed, registered, and operated the vehicle to be replaced in Texas for at least two years immediately preceding the submission ofa grant application. The new subsection also requires that, in granting a waiver, the executive director
must ensure that the emissions reductions will still be valid and, where applicable, meet the conditions for assignment for credit to the state implementation plan.

These rules incorporate the changes to THSC, Chapter 391, under HB 3399.



### 3

### Section

### bySection Discussion §114.650, 

### Definitions
Revisions to §114.650(2) amend the definition ofan "Eligible entity" to reduce the number of vehicles in an entity's fleet that mustbe registered in Texas from 100 to 75 vehicles and the number ofvehicles in an entity's fleet that mustbe eligible for replacement from 25 to 20 vehicles as required under THSC, §391.004.

§114.651, 

### Applicability
Section 114.651(a) is amended to reduce the number ofvehicles that mustbe included in an application from 25 to 20 vehicles, as requiredbyTHSC, §391.002(a).

In addition, amended subsection (b) allows an entityto participate in the program ifthat entity submits a grant application for 20 or more qualifying vehicles, even ifthe commission denies approval for one or more ofthe vehicles during the application process, as requiredbyTHSC, §391.002(b).

§114.652, 

### Qualifying Vehicles
Section 114.652(b) is amended to incorporate changes to the requirement for how long a grantfunded qualifying vehicle mustbe owned, registered, and operated in Texas by a grant recipient. The ownership and use requirement is changed from a period at least five years from the date of reimbursement ofthe grant-funded expenses, to until the earlier ofthe fifth anniversary ofthe date ofreimbursement ofthe grant-funded expenses oruntil the date the vehicle has been in operation for 400,000 miles after the date ofreimbursement. The amendment is requiredby THSC, §391.005. 

### 4§114.653, GrantEligibility
Section 114.653(b) is amended to incorporate changes to the grant eligibility requirements to allow a vehicle thathas been leased or commercially financed bythe applicant tobe replaced under the program, as requiredbyTHSC, §391.005.

Section 114.653 is also amended to add subsection (e) directing the executive director to waive the requirement that a vehicle have been owned, leased, or commerciallyfinanced and registered and operated in Texas by the applicant on a finding ofgood cause, as required by THSC, §391.005. Additional language is added since proposal to make it clear that, in granting a waiver, the executive director is to determine thatthe emissions reductions attributed to the project will be still be valid and, where applicable, will meet the conditions for assignment for credit to the state implementation plan.

§114.654, Usage andDisposition
Section 114.654(b) is amended to include specific criteria for how a vehicle replaced under the
program mustbe rendered permanentlyinoperable and to direct the executive director to provide a means for an applicant to propose an alternative method for rendering a vehicle inoperable, as required byTHSC, §391.005.

Under the specific criteria added to subsection (b), a vehicle or engine replaced under the
program will need to be rendered permanentlyinoperable by crushing the vehicle, bymaking a hole in the engine block and permanently destroying the frame ofthe vehicle, orby another method approvedby the executive director thatpermanentlyremoves the vehicle from
5operation in this state. The executive director is required to provide a means for an applicant to
propose an alternate method for complying with these destruction requirements.

Final Regulatory ImpactAnalysis
The commission reviewed the rulemaking inlight ofthe regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that this rule action is not subject to Texas Government Code, §2001.0225, because it does not meet the definition ofa "major environmental rule" as defined in that statute. A "major environmental rule" means a rule the specific intent ofwhich is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition,jobs, the environment, orthe public health and safety ofthe state or a
sector ofthe state.

The amended Chapter 114 rules are adopted in accordance with HB 3399, which amended THSC, Chapter 391. The program offers financial incentives for the voluntary replacement of diesel engines. Because the rules place no involuntary requirements onthe regulated community, the rules will not adversely affect in a material way the economy, a sector ofthe
economy, productivity, competition,jobs, the environment, orthe public health and safety ofthe
state or a sector ofthe state. Also, none ofthe amendments place additional financial burdens

on the regulated community.

In addition, a regulatory impact analysis is not required because the rules do not meet any ofthe four applicability criteria for requiring a regulatory analysis ofa "major environmental rule" as defined in the Texas Government Code. Texas Government Code, §2001.0225, applies only to a



### 6major environmental rule the result ofwhich is to: 1) exceed a standard setby federal law, unless the rule is specifically requiredby state law; 2) exceed an express requirement ofstate law, unless the rule is specifically requiredbyfederal law; 3) exceed a requirement ofa delegation agreement or contractbetween the state and an agency or representative ofthe federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers ofthe agency instead ofunder a specific statelaw. This rulemaking does not exceed a standard set byfederal law. In addition, this rulemaking does not exceed an express requirement ofstate law and is not adopted solely under the general powers ofthe agency, but is specifically authorized bythe provisions cited in the StatutoryAuthority section ofthis preamble. Finally, this rulemaking does not exceed a requirement ofa delegation agreement or
contract to implement a state and federal program.

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



### TakingslnnpactAssessnnent
The commission evaluated this rulemaking action and performed an analysis ofwhether the adopted rules are subject to Texas Government Code, Chapter 2007. The primary purpose ofthe rulemaking is to amend Chapter 114 in accordance with HB 3399. The rules amend the criteria for implementing a voluntary program and only affect motor vehicles which are not considered
to be private real property. The promulgation and enforcement ofthe 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.



### 7

### Consistencywith 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 §sos.11(b)(2), concerning rules subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies ofthe CMP be considered during the rulemaking process. The commission reviewed this action for consistency and determined the rulemaking for Chapter 114 does not impact any CMP goals or policies, because it revises a voluntary incentive grant
program and does not govern air pollution emissions.

The commission invited public comment regarding the consistency with the coastal management program during the public comment period. No comments were received regarding consistency with the CMP.



### Public Comment

A public hearing was scheduled for November 29, 2011; however, since no one registered to provide comments, the hearing was not officially opened. The comment period closed on December 5, 2011. The commission received written commentsfrom Clean Energy Fuels (Clean Energy), Crossroads Equipment Lease & Finance (Crossroads), Pioneer Natural Resources USA,
Inc. (Pioneer), and United Parcel Service (UPS) in support ofall or part ofthe rulemaking. EPA submitted written comments in support ofthe rulemaking, but expressed concern and recommended changes to part ofthe proposal.



### 8

### Response to Comments
Clean Energy, Crossroads, Pioneer, and UPS commented in support ofthe rule changes. Clean Energy and Pioneer also commentedthat the proposed rule changes will make the program

more effective and efficient for Texas-based fleets by simplifying the application process. Crossroads providedbackground information onits providing financing and assisting entities in California and nationally to obtain funding for grant funding. Crossroads also statedthat the proposed rule changes demonstrated an acknowledgement ofthe potential challenges entities face when soliciting applicants for funding and that fleets in the designated areas will greatly benefit from the rule changes. EPA expressed appreciation for TCEQ's efforts to continually improve and expand mobile source incentive programs.



### The commission appreciates the continued support expressed for the TERP
programs. No changes were made to the proposedtext in response to this
comment.

Clean Energy, Pioneer, and UPS expressed supportfor the addition of §114.653(e) to provide the executive director the authority to waive the requirements of §114.653(b)(1), pertaining to the ownership, registration, and use ofthe vehicle being replaced, on a finding ofgood cause.



### The commission appreciates the support expressedfor the proposed rule changes andfor the TERP in general. No changes were made to the proposedtext in
response to these comments.



### 9EPA expressed concern with the addition of §114.653(e) to provide the executive director the authorityto waive the requirements of§114.653(b)(1), pertaining to the ownership, registration, and use ofthe vehicle being replaced, on a finding ofgood cause. EPA recommended the commission remove the phrase "or other circumstances" from subsection (e), since it is not well defined.



### The intent ofthe provision is to authorize the executive directorto consider unique situations, including situations notyet contemplated, that maynot meet the letter ofthe standard criteriabutwill still meetthe intent ofthe requirements. Therefore, the commission did not remove the term "othercircumstances" from the rule language. However, to clarifythe limits onthe waiverprovisions andto provide assurance that anywaiver decisionwillbe made onlyafter consideringthe impact ofthe waiver onthe emissions reductions, additional language was added
to §114.653(e) sinceproposalto statethat in granting a waiver, the executive director shall ensurethatthe projected emissions reductions willbe valid and, where applicable, meetthe conditionsfor assignmentfor creditto the state implementationplan.

10

# RECOMMENDATIONSUBCHAPTERK: MOBILE SOURCE INCENTIVE PROGRAMS DIVISION 5: TEXAS CLEAN FLEET PROGRAM §§114.650
- 114.654
StatutoryAuthority The amendments are adopted under Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions ofthe TWC and otherlaws ofthis state; and TWC, §5.105, which authorizes the commission byrule to establish and approve all general policy ofthe commission. These amendments are also adopted underTexas Health and Safety Code (THSC), Texas Clean Air Act, §382.017, which authorizes the commission to adopt rules consistent with the policy and
purposes ofthe THSC; THSC, §382.011, which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality ofthe state's air; and THSC, §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control ofthe state's air. Finally, these amendments are adopted under THSC, Chapter 391, and are part ofthe implementation ofHouse Bil13399.

The amendments implement THSC, §§391.002, 391.004, and 391.005.

§114.650. Definitions.

Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules ofthe commission, the terms used in this subchapter have the meanings commonly ascribed to them in the field ofair pollution control. In addition to the terms that are defined bythe TCAA and §§3.2,

1101.1, and 114.1 ofthis title (relating to Definitions), the following words and terms, when used in this division will have the following meanings, unless the context clearly indicates otherwise.

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

(2) Eligible entity--Any person or entitywith a fleet of75 or more vehicles that:

(A) are registered inTexas; and

(B) include at least 20 vehicles that are eligible for replacement.

(3) Golfcart--A motorvehicle designed bythe manufacturer primarily for transporting persons on a golfcourse.

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

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

2(6) Light-duty motor vehicle--A motorvehicle with a gross vehicle weight rating of less than 10,000 pounds and certified to the United States Environmental Protection Agency's light-dutyvehicle emission standards.

(7) Motor vehicle--A self-propelled device designed for transporting persons or property on a public highway that is required to be registered under Texas Transportation Code, Chapter 502.

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

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

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

(C) is a four-wheeled motor vehicle;

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

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

(F) is not a golfcart. 

### 3(9) Program--The Texas Clean Fleet Program established under this division.

§114.651. Applicability.

(a) Any eligible entitythat will replace 20 or more on-road diesel vehicles within a twelvemonth period with qualifying vehicles may apply for a grant under the Texas Clean Fleet Program to offset the cost ofreplacing those vehicles with alternative fuel or hybrid vehicles.

(b) Notwithstanding subsection (a) ofthis section, an entitythat submits a grant application for 20 or more qualifying vehicles is eligible to participate in the program even ifthe commission denies approval for one ormore ofthe vehicles during the application process.

(c) The commission may allow a regional planning commission, council ofgovernments,

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

§114.652. QualifyingVehicles.

(a) A qualifying vehicle is one that:

(1) is certified to currentfederal emissions standards;



### 4(2) replaces a diesel-powered on-roadvehicle ofthe same weight classification and use; and

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

(b) As a condition ofreceiving a grant the qualifying vehicle mustbe continuously owned, registered, and operatedin Texas bythe grant recipient until the earlier ofthe fifth anniversary ofthe date ofreimbursement ofthe grant-funded expenses or until the date the vehicle has been in operation for 400,000 miles after the date ofreimbursement.

(c) Avehicle is not a qualifying vehicle ifit:

(1) is a neighborhood electric vehicle;

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

(3) has qualified for a similar grant or tax credit in anotherjurisdiction.



### §114.653. Grant Eligibility.

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

(1) the baseline emission level setby the executive director; and 

### 5(2) the certified emission rate ofthe new vehicle or engine.

(b) The vehicle being replaced must:

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

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

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

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

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

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



### 6(1) nonattainment status ofthe primarylocation in which the eligible vehicles are used; or

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

(e) The executive director shall waive the requirements ofsubsection (b)(l) ofthis section

on a finding ofgood cause, which mayinclude a waiver for shortlapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances. In determining good cause and deciding whether to grant a waiver, the executive director shall

ensure that the emissions reductions that will be attributed to the project will still be valid and, where applicable, meet the conditions for assignment for credit to the state implementation plan.

§114.654. Usage and Disposition.

(a) Not less than 75% ofthe annual use ofthe qualifying vehicle, either mileage or fuel use

as determined bythe executive director, must occur in Texas.

(b) Avehicle or engine replaced under this program must be rendered permanently inoperable by crushing the vehicle, by making a hole in the engine block andpermanently destroying the frame ofthe vehicle, orby another method approvedbythe executive director that permanently removes the vehicle from operation in this state. The executive director shall provide a means for an applicant to propose an alternative method for complying with the requirements ofthis subsection.

7THE STATE**OF~** AS 

### TEXAS COMMISSION ON

### ENVIRg~1PAJJ.**~ITY** E I hereby certify tha. this,is a true and correct copy of a

### f\~; TexasCommission on Environmental Quality document,

### r~**~ w~ich**  is filed in the permanent records of the Co.mmission. 

# I( 'J; Grven u.n?er my hand and**th~** seal of office on

## ·~**8/(A~/~.&kv** 

# APR 0 3 2012 Bridget C. ohac, Chief Clerk Texas Commission on Environmental Quality 

### ORDERADOPTINGAMENDED RULES AND REVISIONS TO THE STATE IMPLEMENTATION PIAN



### Docket No. 2011-1220-

### RUL 

### On March 28, 2012, 

### the Texas Commission on Environmental Quality (Commission), during a public meeting, considered adoption ofamended§§ 114.650- 114.654. 

### The Commission adopts this amendment, in Chapter 114, 

### Control ofAir Pollution from Motor Vehicles, Subchapter K, Mobile Source Incentive Programs, Division 5, Texas Clean Fleet Program; and corresponding revisions to the state implementationplan (SIP). The revisions to Chapter 114 

### incorporate changes and additions to the program eligibility criteria and add provisions that the executive director shall waive the ovvnership anduse requirements for the vehicle being replaced, upon a finding ofgood cause. Under Tex. Health & 

### Safety Code Ann. §§ 382.011, 382.012, 

### and 382.023 

### (Vernon 2001), 

### the Commission has the authority to control the quality· ofthe state's air and to issue orders consistent vvith the policies andpurposes ofthe Texas Clean Air Act, Chapter 382 

### ofthe Tex. Health &

### Safety Code. The proposed rule was/rules were publishedfor comment in the November 4, 2012, 

### issue ofthe Texas Register (36 

### TexReg 7472). 

### Pursuant to Tex. Health & 

### Safety Code Ann.§ 382.017 

### (Vernon 2001), 

### Tex. Gov't Code Chapter 2001 

### (Vernon 2008), 

### and 40 

### Code ofFederal Regulations § 51.102, 

### and after proper notice, the Commission conducted a public hearing to consider the revised rules and revisions to the SIP. Propernotice included prominent advertisement in the areas affected at least 30 

### days prior to the date ofthe hearing. A public hearing was held inAustin, Texas, on November 29 1 

### 2011. 

### The Commission circulated hearing notices ofits intended action to the public, including interested persons, the Regional Administrator ofthe EPA, and all applicable local air pollution control agencies. The public was invitedto submit data, views, and recommendations onthe proposed amended rules and SIP revisions, either orally or in vvriting, at the hearing or during the comment period. Prior to the scheduled hearing, copies ofthe proposed amended rules and SIP revisions were available for public inspection at the Commission's central office and on the Commission's Web site. Data, views, and recommendations ofinterested persons regarding the proposed amendedrules and SIP revisions were submittedto the Commission during the comment period, and were consideredby the Commission as reflected inthe analysis oftestimony incorporated by reference to this Order. The Commission finds that the analysis oftestimony includes the names ofall interested groups or associations offering comment onthe proposed amendedrules and the SIP revisions and their position concerning the same.• • I**1** l**-~** - , , 1 . GAX:-jl ·:.h)**·~~** ;-,:;. r

## e 3r·1: 

# ·'. ··.rt·**IS'TfiE~FOREtiRDEREti;BY** 

### THE COMMISSION that the amended rules and

## .~••

## ~**.~:) ~Vf.~~~~;~t~;~l}~.** **gg 4~~9fP·P¥,~f~4{~£~ference**  to this Order

## are.hereb~**~dopted.** The**no'<"'''''·Commiss~qr.:l.** 

### furthertauthonze&staf£-t0 make any non-substantive reVIsiOns to the rules



## .**:n~~¢ssazy" tfil''~f?¥1PIY'~Wit11'**  

### Texds Refji'Ster requirements. The adopted rules andthe preamble

__ .. ___

### ·~t~:~h~-~~ont\!d~~~e~~a~'d**Ql:~:~~vi~ic>.l;l~to** the SIP are incorporatedbyreference in this Order as if**se~.**

## 'for1:h,**.atjl~~gth;y~rbaJimjJ:1~this** 

### Order.**~.e,1f ~(·;~~:',~** **}:r::·~~~;.:·f5~~\./(;:.1** f!·.J fV") 1**.::/·~·1!~1(':** J r"!.',; ··· .. 

### ITIS FURTHER ORDERED BY THE COMMISSION that onbehalfofthe Commission, the Chairman shouldtransmit a copy ofthis Order, together with the adopted rules and revisions to the SIP, to the Regional Administrator ofEPA as a proposed revision to the Texas SIP pursuantto the Federal Clean Air Act, codified at 42 U.S. Code Ann. §§ 7401- 7671q, as amended. This Order constitutes the Order ofthe Commission requiredbytheAdministrative Procedure Act, Tex. Gov't Code,§ 2001.033 (Vernon 2008). Ifanyportion ofthis Order is for any reason held to be invalidbya court ofcompetent jurisdiction, the invalidity ofany portion shall not affect thevalidity ofthe remaining portions.

Date issued: 

# APR 03 2012

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