## 1 Technical Support Document (TSD)

for

Repeal of Texas’ Low-Emission Vehicle Rules;

Repeal of the Clean Fuel Fleet Motor Vehicle Emission Redu ction Credit Rules;

Repeal of the Transportation Control Measure Substitution Rules;

New Texas Clean Fleet Rules and Revisions

EPA Region 6, December 2013

This technical support document (TSD) covers four separate submittals by the State of Texas.

These include 1) Repeal of Low-Emission Vehicl e Rules; 2) Repeal of Motor Vehicle Emission

Reduction Credit (MERC) Rules; repeal of the Transportation Control Measure (TCM)

substitution rule; 3) New Texas Cl ean Fleet (TCF) Rules; and 4) Re visions to the new TCF rules.

The revisions occur in Title 30 of the Texas Ad ministrative Code, Chapter 114 (denoted 30 TAC

114), which provides for Control of Air Pollution from Motor Vehicles. More detail on these

submittals and our evaluations are provided belo w. Throughout this document, “we,” “us,” and

“our” means the EPA.

Legal Authority

The Texas Health and Safety Code (THSC) a nd the Texas Water Code (TWC) provide various

authorities to the TCEQ. Under the TWC, Ch apter 5, section 102 (denoted §5.102) provides the

commission with the general powers to carry out its duties; §5.103 authorizes the commission to

adopt any rules necessary to car ry out the powers and duties unde r the provisions of the TWC

and other laws of the state; and §5.105 author izes the commission by rule to establish and

approve all general policy of the commission. Under the THSC, Chapter 382 (Clean Air Act),

§382.002 establishes the commission's purpose to safeguard the stat e's air resources, consistent

with the protection of public health, general welfare, and phy sical property; §382.011 authorizes

the commission to establish the level of quality to be maintained in the state's air and to control

the quality of the state's air; §382.012 authori zes the commission to prepare and develop a

general, comprehensive plan for the contro l of the state's air; §382.017 authorizes the

commission to adopt rules consis tent with the policy and purpo ses of the Texas Clean Air Act;

§382.019 authorizes the commission to adopt rules to control and reduce emissions from engines

used to propel land vehicles; §382.023 authorizes the commission to issue orders and make

determinations as necessary to carry out the purpose of this chapter; Chapter 386 establishes the

Texas Emission Reduction Plan (TERP) program; and Chapter 391 establis hes the Texas Clean

Fleet Program (as added by Texas Senate Bi ll (SB) 1759 of the 81st Legislature, 2009.

What are the Clean Air Act Requirem ents for Clean Vehicle Programs?

On November 15, 1990, Congress enacted amendmen ts to the 1977 Clean Air Act; Public Law

101-549, 104 Stat. 2399, codified at 42 U.S.C. 7401-7671q. The Clean Fuel Fleet Program

(CFFP) is contained in Subchapter II, part C, entitled, "Clean Fuel Vehicles," of Title II of the

Clean Air Act, as amended November 15, 1990 (CAA), sections 241 - 250 (42 U.S.C. 7581-

7590). Part C was added to the CAA to establ ish two programs: a clean-fuel vehicle pilot

program in the State of Califor nia (the California Pilot Test Program) and a Federal CFFP in

certain ozone and carbon monoxide (CO) nonattainment areas. Regulations for the Federal CFFP

were promulgated on March 1, 1993 (58 FR 11901), a nd have been codified at 40 CFR sections

88.301-93 - 88.313-93. The CAA required certain Stat es to adopt and submit to EPA SIP

## 2 revisions containing a CFFP for nonattainment areas with 1980 populatio ns greater than 250,000

that are classified as serious or worse for oz one, or which have a design value of at least 16.0

ppm for carbon monoxide (CO).

In Texas, the following Consolidated Metropol itan Statistical Areas (CMSA) or Metropolitan

Statistical Areas (MSA) designated ozone nonattai nment areas are classified serious and above

and were required to implement a CFFP. The H ouston/Galveston/Brazoria CMSA was classified

as Severe and has as its nonattainment area th e counties of Harris, Montgomery, Brazoria, Fort

Bend, Waller, Liberty, Chambers, and Galveston. The Dallas/Fort Worth CMSA was classified

as Serious and has as its nonattainment area the counties of Dallas, Tarrant, Collins, and Denton.

The El Paso MSA was classified as serious and has as its nonatta inment area the county of El

Paso.

The CAA provides that the States’ CFFP SIP revisi ons must require fleet operators with 10 or

more centrally fueled vehicles or capable of being centrally fueled to include a specified

percentage of clean-fuel vehicles in thei r purchases each year. There are additional

specifications in section 246 of th e CAA with which the States’ SIP revisions must also comply,

including the requirements that covered fleet op erators must operate th e Clean Fuel Vehicles

(CFVs) in covered nonattainment ar eas on a clean alternative fuel, defined as a fuel on which the

vehicle meets EPA’s CFV standards. EPA pr omulgated emission standards for CFVs in

September 1994. (See 40 CFR 88)

The purpose of the CFFP is to in troduce lower pollution emitting ve hicles, "clean fuel vehicles"

(CFV's), into centrally fueled fleets by requiring covered fleet operators to include a percentage

of CFV's in their new fleet pur chases. The goal of the CFFP is to reduce emissions of nonmethane organic gasses (NMOG), oxides of nitr ogen (NOx), and CO through the introduction of

CFV's into the covered areas. Both NMOG and NOx are precursors of ozone and, in most areas,

their reduction will reduce the concentration of ozone in covered ozone nonattainment areas.

Reductions of vehicular CO emissions will redu ce the concentration of CO in covered CO

nonattainment areas.

Congress chose centrally fueled fleets because oper ators of these fleets have more control over

obtaining fuel than the general public. Additiona lly, the control which operators maintain over

their fleets simplifies maintenance and refueli ng of these vehicles. Finally, because fleet

vehicles typically travel more miles on an annua l basis than do non-fleet vehicles, they provide

greater opportunity to im prove air quality on a per vehicle basis.

Section 182(c)(4) of the CAA, 42 U.S.C. 7511a(c)(4), allows States to opt-out of the Federal

CFFP by submitting, for EPA approval, a SIP revision consisting of a substitute program

resulting in as much or greater long term emissions reductions in ozone producing and toxic air

emissions as the Federal CFFP. The EPA may approve such a revision "only if it consists

exclusively of provisions other th an those required under this Ac t for the area." Unless a State

chooses to opt-out of the CFFP per section 182(c )(4)(A) of the CAA, section 246 of the CAA, 42

U.S.C. 7586, directs a State contai ning covered areas to revise its SIP, within 42 months after

enactment of the CAA, to establish a CFFP, where by at least a specified percentage of all newly

acquired vehicles of covered fl eets, beginning with model year (MY) 1998 and thereafter, shall

## 3 be CFV's and such vehicles shall use the fuel on which the vehicle was certified to be a CFV (or

shall use a fuel which will result in even less emissions than the fuel which was used for

certification), when operating in the covere d area. On May 22, 1997, and April 23, 1998, EPA

issued guidance and a direct final rule respec tively, allowing a one year delay of the CFFP in

those areas that are unable to meet the purchas e requirements cited in the CAA. (See 63 FR

20103, April 23, 1998)

History of the Texas Clean Fleet Program: How did Texas Comply?

In 1992, Texas opted out of the Federal Clean Fleet Vehicle Program. They submitted a series of

substitute program SIPs.

The 7/1994 Texas Clean Fleet Program – Submitted in July 1996. EPA proposed disapproval on

Oct. 17, 1997 (62 FR 53997) because this program did not meet the requirements for a substitute

program. This SIP was withdrawn in the Augus t 27, 1998 SIP submittal before EPA could take

final action.

The state's substitute program covered local government and private fleets operated primarily

within the serious, severe, or extreme NAAs of Texas. At that time, these NAAs included the

HGA (HGB), and El Paso (ELP) areas. The B eaumont/Port Arthur (BPA) nonattainment area

was redesignated by EPA to a moderate nonat tainment area in 1996. The state's substitute

program requires local government and private fleets after September 1, 1998, to ensure that

certain percentages of their vehicle purchases be certified by EPA as cl ean-fuel vehicles. In

addition, the affected fleets must ma intain certain percentages of th ese clean-fuel vehicles within

their total aggregated fleets. Local government a nd private fleets affected by the requirements of

the state's substitute program may use any vehicle/fuel combination which has been certified by

EPA to meet or exceed the federal LEV standards.

The 7/29/1998 Texas Clean Fleet SIP – Submitted 8/27/98. EPA approved this substitute SIP on

2/07/2001, 66 FR 9203.

This SIP submittal also withdraws the July 1994 Texas Clean Fleet Program SIP described

above.

On December 16, 1997, EPA finalized federal regulations for the National Low Emission

Vehicle (NLEV) program. The NLEV program wa s designed to allow manufacturers to commit

to meet tailpipe standards for car s and light-duty trucks that ar e more stringent than EPA can

mandate prior to 2004. EPA made a final determ ination on implementation of NLEV on March

2, 1998, subject to appeal. Because NLEV was successfully implemented, the Texas Natural

Resource Conservation Commission 1 

## attempted to use emission reductions achieved through the

NLEV program to offset any shortfall in emission reductions resulting from the state’s substitute

for the FCFF program. The NLEV program was mo tivated primarily by the Ozone Transport

Commission’s efforts to reduce motor vehicle em issions either by adoption of the California

LEV program throughout the Ozone Transport Re gion (OTR) or by the adoption of the NLEV

1 

### The agency name was changed to Texas Commission on Environmental Quality in 2003.

## 4 program. The NLEV program was created as a voluntary program for auto manufacturers to

provide LEV technology to the OTR and other st ates. NLEV would spur the introduction of

LEVs into the marketplace and provide air quality benefits on a national level by introducing

cleaner running LEVs prior to MY04. However, th e NLEV program is a federal program that is

not legally enforceable by states outside of the OTR. OTR states had to submit SIP revisions that

represented a state commitment. This does not apply to other states. Because non-OTR states

would not submit enforceable SIP revisions rela ted to the NLEV program, NLEV was not an

acceptable substitute for the CFFP. Also, there is no heavy-duty component in the NLEV

program.

The commission provided that in the event that the NLEV program could not be used, the

commission would use the emission reductions achi eved through the state requirements codified

in 30 TAC §§115.352 - 115.359, concerning Fugitive Em ission Control in Petroleum Refining,

Natural Gas/Gasoline Processing, and Petrochemical Processes in Ozone Nonattainment Areas.

The state requirements codified in 30 TAC §115.211(a)(1), concerning Volatile Organic

Compound Transfer Operations at Ga soline Terminals, would also be used to offset any shortfall

in emission reductions resulting from the stat e’s substitute Texas Cl ean Fleet program as

compared to the FCFF. Both of these programs ar e identified in the state’ s 15% Rate of Progress

Plan and go above and beyond the requirements of Reasonably Available Control Technology

(RACT). If needed, only those emi ssion reductions necessary to cove r any shortfall in the state’s

substitute program would be used.

The shortfall in NOx reductions were covered by state mandated NOx reduction requirements

placed on electric generating facilities by the 76th Texas Legislature in Senate Bill 7 for the

HGA and DFW nonattainment areas. These requirements are found in 30 TAC, Chapter 101,

Subchapter H, Emissions Banking and Trading, Division 1, Utility Electric Generation and

Division 2, Emissions Banking a nd Trading of Allowances. The state's substitute program

focused on the reduction of mobile source em issions through the acqui sition of clean-fuel

vehicles, which are defined as vehicles certifie d by EPA to meet or exceed the LEV standards.

The state's substitute program reduced harmful tailpipe emissions from on-road mobile sources

through the use of LEVs in the affected areas.

The state's substitute program covers transit, local government and private fleets operated

primarily within the serious, se vere, or extreme nonattainment areas of Texas. The state's

substitute program requires transit fleets to ensure that at least 50% of their fleet vehicles are

certified to meet or exceed the LEV standards. In addition, local government and private fleets

after September 1, 1998, must ensure that certai n percentages of their vehicle purchases be

certified by EPA as LEVs. Fleets affected by the requirements of the state's substitute program

may use any vehicle/fuel combination which has been certified by EPA to meet or exceed the

federal LEV standards. Table I-1 provides a brie f comparison of the requirements and issues

between the state's substitute program and the FCFF program. This strate gy did not play out as

the state had planned. See a discussion of these facts in excerpts from the TSD for this action

below.

First, a comparison of the state’s substitute progr am with the federal Clean Fuel Fleet (FCFF)

program is shown here.

## 5 Table I-1. Comparison of Fleet Programs

HDVs:

50% in MY 1998+

Exceptions

No. Yes - Contractual harm, lack of refueling facilities,

insufficient financing, or not cost-effective over

the life of the vehicle.

Credit

trading Yes - Mobile Source Emission

Reduction Credits

(MERCs) Yes - Mobile Source Emission Reduction Credits

(MERCs) and

Program Compliance Credits (PCCs)

Program

incentives TCM exemptions and MERCs MERCs & PCCs Items Federal Clean Fuel Fleet Program

(FCAAA 1990) 

### The state's substitute program

Fuel type Any fuel or power source which allows the vehicle to

meet LEV standards Any fuel or power source which allows the vehicle to meet LEV

standards.



### Emission

standards LEV required. ULEV, ILEV & ZEV earn credit. LEV required. ULEV, ILEV & ZEV earn credit.



### Covered

fleets Federal, state, local government, and private fleets of

10 or more fleet vehicles which are centrally fueled or

capable of being centrally fueled. Local government fleets: > 15 vehicles;

Private persons: > 25 fleet vehicles;



### Vehicle

class LDV, LDT 8,500 lbs GVWR., HDT 8,500 26,000

lbs GVWR LDV, LDT 8,500 lbs GVWR., HDT 8,500 26,000 lbs GVWR



### Exempted

vehicles Emergency, law enforcement, non-road, rental, dealer,

test, national security, garaged at residence, and

vehicles > 26,000 lbs. GVWR. Emergency, law enforcement, nonroa d, garaged at residence, and

vehicles > 26,000 lbs. GVWR.



### Covered

Areas Serious, severe, and extreme ozone and/or carbon

monoxide nonattainment areas of 250,000 or more

(Houston/Galveston, and El Paso). The Houston/Galveston,and El Paso non-attainment areas

.



### Phase-in

Schedule LDVs, LDTs:

30% of purchases in MY 1998

50% of purchases in MY 1999

70% of purchases in MY 2000+ Local government & private:

10% of total fleet by 9/1/98 or 30% of purchases after 9/1/98

20% of total fleet by 9/1/00 and 50% of purchases after 9/1/00

45% of total fleet by 9/1/02 and 90% of purchases after 9/1/02

## 6 The following is an excerpt from the TSD for the 2001 approval action: (S ee the docket for the

current rulemaking for the entire TSD document. Occasional paraphrasing was done for easier

reading. No substance was changed in the process. )

Texas provided the following input base vehicle population and VOC and

NOX emission reductions (output) for Hou/Gal, El Paso, and D/FW nonattainment areas:

**1998 - 2007 total**

**Table 2. Base vehicle Population Tonnage Reductions**

LDV HDV VOC NOx

TCF Program 67,292 5,399 928 822

Federal CFF

Program 96,781 8,416 1,876 1,671

The above table shows the Texas Clean Fleet program has a shortfall in

VOC and NOx emissions as compared to the federal CFF program. The

shortfalls between the TCF and Federal CFF programs for VOC and NOx

are 948 and 849 tons, respectively, over the 1998 to 2007 ten year

period. A comparison made using requirements for the FCFF program

showed that the federal program contained more vehicles in both the

light-duty and heavy-duty categories, which results in a shortfall in

emission reductions from the state’s program. Therefore, the

stationary source emission reductions were critical to meet the

statutory requirement.

An evaluation of the stationary source emission reductions shows that

the reductions far exceed those needed to fill the shortfall from the

state’s vehicle program.

Unfortunately, the state could not substitute the anticipated emission

reductions of the NLEV program for their TCF program shortfalls. The

NLEV program was not an appropriate substitute program for the state

because the NLEV program does not require a SIP revision by Texas to

achieve the intended reductions in air pollution. Under the NLEV

regulations the Northeast states, in effect, accept NLEV through a SIP

commitment. States outside the Northeast do not need to make such a

SIP revision. Since Section 182(c)(4)(B) of the CAA requires the CFF

program substitute to be contained in a SIP revision, Texas cannot

rely on NLEV, a national program which was implemented in Texas

without any SIP action by the state, to make up the shortfalls in

their State CFF Substitute Plan between the TCF program and the

Federal CFF program. The following paragraphs detail how the

shortfall is made up, as discussed in the State’s supplemental

technical clarification information submitted November 17, 2000.

For the shortfall of VOC emissions the State used the emission

reductions achieved through the state requirements codified in 30 TAC

Sections 115.352-115.359, regarding Fugitive Emission Control in

Petroleum Refining, Natural Gas/Gasoline Processing, and Petrochemical

Processes in Ozone Nonattainment Areas. The state requirements

codified in 30 TAC Section 115.211(a)(1), regarding Volatile Organic

## 7 Compound Transfer Operations at Gasoline Terminals, were also used to

offset shortfalls in emission reductions from the state program. The

emission reductions from these rules are identified in the state’s 15

percent Rate of Progress Plan and go above the requirements of VOC

RACT. These rules are for VOC emission reductions. The following

table shows the estimated VOC emission reductions from controls on

fugitive emission and VOC transfer operations in the Houston/

Galveston, Dallas/Ft Worth and El Paso nonattainment areas.

**Table 3. VOC Reductions from Fugitive Emissions and VOC Transfer**

**Operations (Estimated for Houston-Galveston, El Paso and Dallas-Fort**

**Worth)**

**Year Houston-Galveston El Paso Dallas-Fort Worth** 

**Fugitive**

**VOC**

**Tons/Day Bulk Gas** 

**VOC**

**Tons/Day Fugitive** 

**VOC**

**Tons/Day Bulk Gas** 

**VOC**

**Tons/Day Fugitive** 

**VOC**

**Tons/Day Bulk Gas** 

**VOC**

**Tons/Day**

1998 46.03 3.36 1.13 0.77 0.07 2.17

1999 46.03 3.36 1.13 0.77 0.07 2.17

2000 46.03 3.36 1.13 0.77 0.07 2.17

2001 46.03 3.36 1.13 0.77 0.07 2.17

2002 46.03 3.36 1.13 0.77 0.07 2.17

2003 46.03 3.36 1.13 0.77 0.07 2.17

2004 46.03 3.36 1.13 0.77 0.07 2.17

2005 46.03 3.36 1.13 0.77 0.07 2.17

2006 46.03 3.36 1.13 0.77 0.07 2.17

2007 46.03 3.36 1.13 0.77 0.07 2.17

Totals = 460.3 33.6 11.3 7.7 0.7 21.7

Total Combined

Reduction(TCR)in

Tons per Day = **493.9 19**  **22.4**

Total Tons of VOCs

Reduced from 1998

to 2007 =

(TCR x 250 day

Ozone Year) **123,475.00 4,750.00**  **5,600.00**

The State identified excess NOx emission reductions resulting from

state mandated NOx reduction requirements placed on electric

generating facilities (EGFs) by the 76th Texas Legislature in Senate

Bill 7 for the HGA and DFW nonattainment areas. These requirements

are found in 30 TAC, Chapter 101, Subchapter H, Emissions Banking and

Trading, Division 1, Utility Electric Generation and Division 2,

Emissions Banking and Trading of Allowances. The State estimated, and

the EPA concurred, that these reductions combined with other state

mandated reductions will result in a 184 tpd reduction from EGFs in

the eight-county HGA area. For the DFW area, electric utilities

reductions of NOx emissions are estimated at 129 tpd. Table 4

summarizes the NOx emissions reductions.

## 8 **Table 4. Estimated NOx Emissions Reductions**

Nonattainment Area Tons/Day 1998-2007

Total Tons

Houston-Galveston 184 460,000

Dallas/Fort Worth 129 322,500

The following table shows EPA’s estimated VOC and NOx emission

reductions using the TNRCC spreadsheet model for the HGA, DFW and El

Paso nonattainment areas.

**Table 5. Estimated Tons Reductions for 1998-2007**

VOC NOx

Federal LDV HDV **Total** LDV HDV **Total**

Hou/Gal 683 329 **1 012**  5 85 3 19 **904**

El Paso 64 20 **84** 55 19 **74**

D/FW 571 209 **780** 490 203 **693**

**Total** 1318 558 **1876** 1130 541 **1671**

VOC NOx

State LDV HDV **Total** LDV HDV **Total**

Hou/Gal 365 138 **503** 313 134 **447**

El Paso 25 5 **30** 22 4 **26**

D/FW 298 97 **395** 255 94 **349**

**Total** 688 240 **928** 590 232 **822**

Comparing the estimated emission reductions in Tables 3 and 4 with

Table 5 shows state controls on fugitive emission and VOC transfer

operations make up the shortfall of VOC emissions reduction from the

state’s Clean Fleet program. State controls for NOx emissions in the

Houston/Galveston and Dallas/Ft Worth nonattainment areas make up the

shortfall for NOx in those areas. The El Paso nonattainment area has

a NOx waiver in place, so the state program can make up the combined

VOC and NOx shortfall from the VOC controls on fugitive emissions and

VOC transfer operations in the El Paso area.

...in combination with the above RACT VOC fugitive controls rules and

VOC transfer operations rules, and with the specified NOx reductions

beyond federal requirements to cover the federal CFF program NOx

reductions shortfall, the state substitute program does demonstrate

equivalency or better long term reductions in ozone producing and

toxic air pollutants than the Federal CFF program.



## The 2001 approval incorporated by reference (I BR) the following Low-Emission Vehicle Fleet

Requirement rules in Subchapters A and E: Sections 114.1; 114.3; 114.150; 114.151; 114.153;

114.154; 114.155; 114.156; and 114.157. In addition, the acti on also IBR’d rules in Subchapter F

– Vehicle Retirement and Mobile Emission Re duction Credits; Divisi on 1: Mobile Emission

Reduction Credits; and took no action on the trans portation conformity rules in Subchapter G –

Transportation Planning that were submitted at the same time. The additional rules in Subchapter

F are not part of this repeal submittal, but were submitted separately, and are discussed below.

## 9 The SIP Revisions Now Under Consideration

Repeal of the Low-Emission Vehicle Rules – Adopted 4/26/2006 – Submitted 5/15/2006

In June 2005, the state statutes requiring th e Texas Commission on Environmental Quality

(TCEQ) to establish and implement LEV requireme nts for mass transit fleets and for private and

local government fleets (i.e., the TCF Program) as codified in Texas Health and Safety Code

(THSC), Chapter 382, Subchapter F, were repe aled in SB 1032 by the 79th Legislature, 2005.

The commission's rules in §§114.3 and 114.150, 114.151, and 114.153

- 114.157 implementing

these statutes required mass transit authorities, private companies, and local government fleets in

the Houston-Galveston-Brazoria (HGB), Dalla s-Fort Worth (DFW), and El Paso ozone

nonattainment areas to ensure that a specified pe rcentage of their new fleet vehicle purchases

were vehicles that had been certified by the EPA to the federal LEV standards. The TCEQ

recommended that the Texas Legislature repe al these enabling statutes because the LEV

standards have been superseded by the cleaner federal Tier II vehicle emission standards that

were promulgated in February 2000 for phased implementation starting in 2004, the federal 2004

heavy-duty engine emission standards that were promulgated in October 2000, and the 2007

heavy-duty engine emission standa rds that were promulgated in January 2001. The state claims

the repeal of their LEV rules has no impact on the emissions from fleets because new fleet

vehicles are being certified by the EPA to either the federal Tier II emission standards or the

federal 2004 and 2007 heavy-duty engine emission st andards, both of which are cleaner than the

federal LEV standards currently required under th ese rules. In addition, the repeal removes an

administrative burden because the affected fleets will no longer be required to submit biennial

fleet compliance reports to the commission.

In conjunction with the repeal of these rules, the commission revises the SIP to remove the Texas

Clean Fleet Program (TCF) as an ozone control strategy because the federal emission standards

for model year 2004 and later light -duty and heavy-duty motor vehicles are more stringent than

those required by the FCFF Program as outlined in the FCAA. By removing this as a control

strategy, it ensures that no credit for emission re ductions from this program would be included in

future SIPs. The federal emission st andards for HDDE in model years 2004

- 2006 are equivalent

to the heavy-duty ULEV standards under the FC FF Program and the federal standards for HDDE

in model years 2007 and later are approximate ly 90% cleaner than ULEV. The emission

reductions achieved by the Tier II and HDDE standards far surpass the emission reductions that

would be expected from implementation of th e TCF Program in any of the state's ozone

nonattainment areas.

Removing this as a control strategy does not remove the statutory requirement that the

state have a CFF program as part of its SIP. The subject of this ru le repeal addresses only the low

emission vehicle rules in Chapter 1 14: Sections 114.1; 114.3; 114.150; 114.151; 114.153;

114.154; 114.155; 114.156; and 114.157. This repeal does not address rules for the VOC

emission reductions obtained from the Chapte r 115 rules cited above or rules for the NOx

emission reductions obtained from Chapter 117 ru les on electric generating facilities, each of

which provided excess emission reduc tions that are used to make up the shortfall in reductions

## 10 from the vehicle portion of the program. These rules (and associated emission reductions)

remain intact.

When this SIP revision was developed and submitted in 2006, the state said this in

response to EPA’s comments on backsliding:

Staff has determined that the Houston-Galveston-Brazoria

(HGB), Dallas-Fort Worth (DFW), and El Paso SIPS will not be

affected by the repeal because no reduction credits attributable

to the TCF program have been claimed or credited in attainment

demonstrations for these SIPS. Additionally, due to the

timing of the development of the Beaumont-Port Arthur (BPA)

Eight-Hour Ozone Attainment Demonstration SIP adopted by

the commission on September 28, 2005, the region did not

benefit from the TCF program and is also not affected by this

repeal. As stated in the BPA SIP, LEV emissions standards

outlined in the FCAA and referenced in the TCF program were

surpassed by federal Tier 2 standards beginning with model

year 2004 vehicles making the TCF requirements redundant.

This occurred well before the development of the BPA SIP.

Reduction credits claimed in the BPA attainment demonstration

SIP were limited to those achieved through the NLEV program

to avoid the possibility of "double counting" credits.



## In the case of BPA, when the state submitted the attainment demonstration, they were

able to show that this area met the CAA requi rement to have a CFF program by demonstrating

with EPA documentation that the requirement wa s met through means other than a state vehicle

program. In the federal register notice proposi ng to approve the BPA a ttainment demonstration

(May 17, 2010, 75 FR 27514), we said th is about the BPA CFF requirement.

(ii) What are the CFV program requirements for the BPA area?

The March 30, 2004, reclassification of the area to serious nonattainment was effective April 29, 2004, and

required that a CFV program or substitute that would ach ieve equivalent reductions be submitted to EPA by April

29, 2005.

(iii) How did the State Meet the CFV Requirements for BPA?

The State addresses this CFV program requirement by making an equivalency demonstration showing that

the Federal Tier II and heavy-duty vehicle and engine standards are more stringent than or equivalent to the CFV

program LEV standards, beginning with the 2006 model year. Texas used the 2006 model year in the equivalency

demonstration because it is the earliest full vehicle model year that would have been affected by a CFV program

upon adoption of a program by April 29, 2005 (i.e., the 2006 model year would begin on September 1, 2005). The

demonstration showed that the resulting emissions reductions from Tier II and the heavy-duty vehicle and engine

standards meet or exceed the emissions reductions that a CFV program woul d provide in the BPA nonattainment

area and, therefore, the impl ementation of the Tier II and heavy-duty standards serve as an adequate substitute for a

CFV program.

Specifically, relying upon EPA’s data, beginning with the 2006 model year, Texas shows Tier 2 Light-Duty

Vehicles (LDVs), Light-Duty Trucks (LDTs 1–4), and Medium Duty Passenger Vehicles (MDPVs) certified to

certain Tier 2 bin standards, to be equivalent to or more stringent than the CFV program LEV emission standards. In

## 11 addition, Texas demonstrates that Tier 2 LDVs, LDTs 1– 4, and MDPVs certified to other Tier 2 bin standards, are

equivalent to or more stringent than the CFV program LEV emission standards. Texas performs a similar analysis,

showing that standards for 2006 and later model years for Otto cycle and diesel heavy-duty vehicles ranging from

8501–14,000 Gross Vehicle Weight Rating are more stri ngent than the CFV program LEV emissions standards for

these vehicles.

(iv) What is EPA proposing?

EPA is proposing to approve, under section 182(c)(4 )(B) of the CAA, Texas’ equivalency demonstration

that emissions reductions under Tier II and the heavy-duty engine and vehicle standards achieve equivalent or

greater emissions reductions than would be expected from implementation of the CFV Program in the BPA

nonattainment area. This approval is supported by the determination made by EPA that the use of the 2006 model

year as the first model year vehicles that would be covered by a CFV program in the equivalency demonstration

is appropriate. Thus, new vehicles purchased by fleet operators for Model Years 2006 and beyond

would necessarily achieve, as required by the Tier II and heavy-duty engine standards, as much or more

reductions than if the State adopted a CFV program as required by the Act.

The reclassification required the program to be submitted by April 29, 2005. EPA has determined that

starting the program on April 29, 2005 is infeasible under CAA section 246(a)(3) which allows EPA to adjust the

implementation date of a CFV program where implementation would otherwise be infeasible. EPA has decided that

implementation of a CFV program in the BPA nonattainment ar ea would be infeasible for the following reasons. As

earlier explained, as of July 2005, EPA had determined that beginning with the 2006 model year the Tier II and

heavy-duty engine and vehicle standards were either equivalent or more stringent than the CFV program LEV

standards. Thus, Texas would have been required to implement the CFV program for approximately 4 months (i.e.,

from April 29, 2005, when the program was due under the reclassification, to August 31, 2005 when the 2006 model

year began). For model years 2006 and beyond, the program would have been unnecessary. EPA believes that it

would have been infeasible for Texas to initiate and oversee the elaborate record-keeping and reporting requirements

associated with this program for this 4-month period only. Additionally, we note that owners and operators of

covered fleet would likely not have been inclined to comply with the requirements of a program with such limited

duration. Please see the TSD: Part II.A. for further discussion of this requirement.

As noted above, with the exception of the CFV prog ram, the BPA area currently has an approved SIP for

all the 1-hour ozone anti-backsliding requirements applicable for purposes of redesignation. EPA is proposing to

find that, if it finalizes approval of the CFV program Equi valency Demonstration, the BP A area will meet all 1-hour

ozone anti-backsliding requirements applicable to the area for purposes of redesignation under section 110 and part

D.



## Receiving no comments on this portion of the BP A proposal, EPA took final action to approve

this demonstration for BPA on October 20, 2019 (75 FR 64675).

Why can we approve this repeal?

We can approve the repeal of these ru les for several reasons. The EPA guidance 2 

## for states to

implement the FCFF program, states

Clean-Fuel Fleet light duty standards are the same as for Low Emission Vehicles (LEVs);

however, vehicles meeting the more stringent Inherently-Low Emission Vehicle (ILEV), Ultra-

Low Emission Vehicle (ULEV) or Zero Emission Vehicle (ZEV) stan dards also qualify as CFVs. The

numerical standards for each of these categories may be found in 40 CFR Part 88.104-94;

heavy-duty standards for LEV, ILEV, ULEV and ZEV categories may be found in 40 CFR Part

88.105-94.

2 

### Clean Fuel Fleet Program Implem entation Guidance, August, 1998

## 12 At the time this guidance was written, the Tier 2 standards for light-duty and the 2007 heavyduty diesel standards had not been promulgated, although Tier 2 is hinted at by re ferencing an

2004 target date in the guidance. If Tier 2 had been promulgated at that time, it would have

appeared on this list of more stringent than LEV standards. EPA determined 3 

## that, beginning

with the 2006 model years, both th e Tier 2 conventional vehicle a nd engine standards and heavyduty vehicle and engine sta ndards are either equivale nt to or more stringent than the applicable

CFV program Low Emission Vehicle standards. Ne w alternatively fueled vehicles must meet

the current Tier 2 light-duty ve hicle standards or the current heavy-duty diesel standards,

whichever they are replacing. B ecause the goal of the FCFF progr am was to get more, cleaner

vehicles into the fleet prior to 2004, that goal has been achieved, even though the statutory

requirement remains. Fleets are now allowed to use new Tier 2 and 2007 heavy-duty diesel

vehicles and engines to meet the LEV requirement.

This TCF substitute program contained over 100-fold the amount of emission reductions of VOC

and NOx needed to meet the low-emission ve hicle portion of the state’s program. See the

analysis in the history of the 7/29/98 submittal as shown above. In this regard these reductions

still stand to meet the statutory requirement for th e state to maintain a CFF program as part of its

SIP. Other portions of the appr oved TCF program are not the subjec t of this repeal, i.e., the VOC

and NOx rules that provide the stationary source emission reductions a ssigned to this program;

and Subchapter F – Vehicle Retirement and Mobile Emission Reducti on Credits; Division 1:

Mobile Emission Reduction Credits, includi ng Sections 114.201, Mobile Emission Reduction

Credit Program; and 114.202, Texas Mobile Emission Reduction Credit Fund.

In addition, we agree with the state that becau se no credits from the state’s CFF substitute

program were counted in any of the past atta inment demonstrations, no backsliding occurs by

repeal of these vehicle rules. By removing the TCF program as a control strategy from the SIP,

no future credit or “double counting” can take place from this program.

The state also points to the Clean Cities, CM AQ, and TERP voluntary programs as additional

incentive mechanisms to replace older, dirtier light-duty and heavy-duty vehicles in the fleets

subject to the state’s repealed LEV rules because they will continue to encourage fleet turnover

at a faster rate.

The Repeal of the MERC Rules – Adopted June 27, 2007 – Submitted July 25, 2007 as the

Transportation Air Quality Cleanup SIP

Notice of the proposed revisions to the SIP wa s published in area newspapers on February 26

and 27, 2007 and in the March 9, 2007 issue of th e Texas Register (32 TexReg 1197). On June

27, 2007, the TCEQ adopted this revision. Our evaluation for this submittal is provided below.

The July 25, 2007 submittal contains revisions to 30 TAC 114: Control of Air Pollution from

Motor Vehicles in th ree specific areas:

3 

### See EPA Dear Manufacturer Letter CCD-05 (LDV/LDT/MDPV/HDV/HDE/LD-FC) (July 21, 2005).

## 13 (1) repeal of the Transpor tation Control Measure (TCM) 4 

## substitution program and

certain provisions of the state’s transportation conf ormity rule;

(2) repeal of the Mobile Emission Reduc tion Credit (MERC) program and associated

fund and definitions; and

(3) repeal of the Light-duty Motor Vehicle Purchase or Lease Incentive Program Vehicle

Emissions Information Brochure requirement.

A description of these revisions follows.

Repeal of the Transportation Control Measure (TCM) 5 

## substitution program

.

The EPA revised the transportati on conformity rule (40 CFR parts 51 and 93) to address the

transportation conformity-related CAA amendm ents made by SAFETEA-LU (73 FR 4420). In

addition to amendments to the transportation co nformity provisions, the SAFETEA-LU added a

provision to allow states to subs titute or add TCMs into approved SIPs without the standard SIP

revision process; see section 176(c)(8) of th e Act and 40 CFR 93.101. EPA determined that it

was not necessary to promulga te regulations in order to successfully implement the TCM

substitution and addition st atutory provision (73 FR 4420, 4432). Thus, under this CAA

provision, states are no longer required to incl ude a TCM substitution mechanism in their SIPs.

The CAA also provides a streamlined process fo r adding TCMs to an approved SIP. See EPA’s

Guidance for Implementing the Clean Air Act Section 176(c)(8) Transport ation Control Measure

Substitution and Addition Provision

. 6 

## The submitted revisions repeal 30 TAC §114.270(f): the

TCM substitution program.

Repeal of the Mobile Emission Reduction Credit (MERC) program and associated fund and

definitions.

The SIP states,

“MERCs are part of the commission's TCF [Texas Clean Fleet] economic incentive program to help reduce vehicle

emissions of volatile organic compounds (VOC) and nitrogen oxides (NO,). The program is intended to provide

additional flexibility for business, develop innovative strategies to control mobile source emissions, and reduce the

cost of compliance with the FCAA [Fed eral Clean Air Act]. MERCs are enfor ceable, permanent, and quantifiable

emission reductions generated by a mobile source through the TCF program. Emission reductions that remain after

an entity satisfies their requirements may be banked as credits.

“In 2001 the 77th Texas Legislature (2001) passed Senate Bill 5 (SB 5) establishing the Texas Emission Reduction

Plan (TERP), which provided financial incentives for reducing emissions of on-road and non-road motor vehicles

and equipment, grants for the development of new emission control technology, new building energy efficiency

standards, and research and development programs. SB 5 programs were estimated to achieve reductions in excess

of the reductions expected from the rules that were being repealed. In accorda nce with SB 5, the state

implementation plan (SIP) was revised to replace certain rules with TERP. The adopted TERP rules established a

4 

### TCMs include a wide variety of measures used to redu ce motor vehicle emissions, primarily by reducing the total

amount of vehicle miles of travel in an area. Exampl es of traditional TCMs include: transit, ridesharing

arrangements, telecommuting and parking management.

5 

### TCMs include a wide variety of measures used to redu ce motor vehicle emissions, primarily by reducing the total

amount of vehicle miles of travel in an area. Exampl es of traditional TCMs include: transit, ridesharing

arrangements, telecommuting and parking management.

6 

### The guidance is posted at http://www.epa.gov/oms/stateresour ces/transconf/policy/420b09002.pdf . The document

ID number is EPA-420-B-09-002, January 2009.

## 14 state-wide incentive program for the pur chase of new on-road diesel vehicles and light-duty motor vehicles that met

emission standards more stringent than th ose required by federal requirements.”



## This is not to be confused with the Mobile Emission Reduction Credit Generation and

Certification program found in 30 TAC 101.304 which re gulates MERCs that are generated

under the state’s banking and trad ing program. Those rules remain part of the approved SIP.

The TCF MERC program was approved into the SIP as an element of the TCFF program on

February 7, 2001 (66 FR 9203). In 2005, the Texas Legislature enacted SB 1032, which repealed

the Texas CFF program in its entirety. The MERC program however, remained within the Texas

rules. The submitted revisions repeal th e CFF MERC program components at 30 TAC

§114.1(13), the definition of the Mobile Emissi on Reduction Credit; 30 TAC §114.4: associated

MERC definitions; 30 TAC §114.201, the CFF MERC program; and 30 TAC §114.202, the CFF

MERC fund. With the repeal of the TCFF pr ogram, the TCFF MERC program, the TCFF MERC

fund and associated definitions ar e no longer relevant to the SIP. 7 

## Finally, definitions that

followed the term “MERC” (deleted at 30 TAC §114.1(13)) were renumbered to adjust for that

deletion.

Repeal of the Light-duty Motor Vehicle Purchase or Lease Ince ntive (LDPLI) Program Vehicle

Emissions Information Brochure requirement

The repeal of section § 114.618 was unnecessarily submitted because the base rule was not

submitted by TCEQ to be approved into the SIP. We have no objections to the state repealing

this section because it is not a requirement of the CAA. We will not act on this repeal.

According to the July 12, 2001, proposal to approve the Houston/Galveston attainment

demonstration, any rulemaking that could be submitted by September 2001 could be considered

in the final action to approve the demonstrati on. While Senate Bill 5, which establishes the

TERP program, was included in the final approva l, the New Purchase and Lease Incentive

Program rules were not included in the submittal to EPA. Therefore, they were not approved

into the SIP at that time (November 12, 2001).

In 2003, the Texas Legislature passed House Bill (HB) 1365, which repealed the requirement for

vehicle manufacturers to publish an nually a brochure listing vehicl es that met emission standards

more stringent than those require d by federal requirements. Such vehicles would be considered

eligible for purchase under the state’s CFF or TERP programs. HB 1365 also did not fund the

light-duty motor vehicle portion of th e TERP program. Finally, in 2013, the 83 rd 

## Legislature

allotted funding for the Light-Duty Purchase or Lease Incentive program to no more than 5% of the

total allocations for the TERP program. Based upon the total amount of TERP program funding

appropriated to the agency by the 83rd Legislature, approximately $3.8 million of TERP program

funding will be available for grants for the LDPLI in each fiscal year of the 2014 - 2015 biennium.



## Further revisions by TCEQ to the LDPLI are pending. These include the proposed repeal of

114.619, for future reference.

7 

### We are not taking action on the repeal of 30 TAC 114.4 because it is not in the EPA-approved SIP.

## 15 Our Analysis of the July 25, 2007 Submittal

The SIP submittal states,

“Senate Bill 1032, 70th Legislature, 1987[ 8 

### ], repealed the TCF program. The TCF program was repealed because

there was no longer an air quality benefit that could be achieved from the program, as federal emission standards

exceeded the emission standards for low emission vehicles established under the TCF program. Mobile emission

reduction credits (MERCS) were enforceable, permanent, and quantifiable emission reductions generated by a

mobile source through the TCF program and could be banked as credits. However, due to the fact that the federal

[emission] standards exceeded the TCF [emission] standards, there were no MERCS assigned through the Texas

Mobile Emission Credit Fund. No fiscal imp lications are expected for affected entities.”



## In February 2007, the TCEQ proposed these SIP revisions. We submitted a comment letter to the

TCEQ dated April 5, 2007, stating that we did not oppose the proposed revisions. 9 

## The July 25,

2007 revisions would make the SIP current with th e associated state and Federal statutes. The

comment letter should have aske d the state to provide a demonstr ation showing that, with this

repeal, the CAA requirement to have a clean vehicle program, was still being fulfilled. The July

25, 2007 revisions are consistent with 40 CFR parts 51 and 93 and EPA’s Guidance for

Implementing the Clean Air Act Section 176(c )(8) Transportation Control Measure Substitution

and Addition Provision, but it is not consistent with 182(b) and 246 of the Act.

The TCFF MERC rules created an incentive progra m to encourage the purchase of cleaner

vehicles. The state substitutes the TERP program and rules, another incentive program, for the

TCFF MERC rules. This is not entirely an ev en swap because in 2003, the Legislature did not

fund the light-duty motor vehicle portion of the TERP program, but focused 87.5% on the diesel

emission reduction portion of the program, with the remaining funds going toward administrative

costs. While this creates a vacuum of sorts on the light-duty incentive side, there is no fix for it

in this SIP submittal, so we must overlook this defi ciency in light of the progress that has been

made in the other areas of vehicle emission reductions since then. The new Tier 2 vehicle

emission standards all but eliminate the need for an incentive program for light-duty motor

vehicles. The TERP program still serves as an incentive program to speed the scrappage of older,

dirtier diesel vehicles and engines, and the purch ase of cleaner diesel engines and vehicles. And

as we pointed out under the repeal of the LEV rules, the VOC and NOx stationary source rules

and corresponding emission reductions associated with the Texas CFF program remain in place.

Keeping all these things in mind, we can recommend approval of the July 25, 2007 revisions to

the SIP concerning TCFF MERC rules, but exclud ing action on the repeal of § 114.618, which is

not part of the approved SIP.

8 

### This information in this SIP submittal is incorrect. It is the 79 th 

### Legislature in 2005 that repealed the TCF program.

The SB number is correct.

9 

### The TCEQ submittal includes the pr oposed and final revisions, and comments received during their public

comment period. This submittal is included in the docket for this rulemaking.

## 16 July 20, 2009 – TCM Substitution Letter

This document was incorrectly recorded by EPA as a SIP revision, but is actually a

Transportation Control Measure (TCM) subst itution, which no longer requires a SIP revision.

Notice of the proposed TCM substitution in the July 20, 2009 submittal was published in a local

area newspaper on March 16, 2009 and in the Marc h 27, 2009 issue of the Texas Register (34

TexReg 2170). On July 8, 2009, the TCEQ approved the TCM substitution.

In the July 20, 2009 letter, the TCEQ submitted revisions to 30 TAC Chapter 114:

Control of Air Pollution from Motor Vehicles. The revisions address a TCM substitution, with

which EPA concurred in a letter to TCEQ dated May 14, 2009. 10 

## Pursuant to section 176(c)(8) of

the Act, states are no longer required to include a TCM substitution mechanism in their SIPs in

order to expedite the process for making TCM s ubstitutions. As detailed in our letter to the

TCEQ, the substitute TCMs provide the following: achieve greater emissions reductions than the

measures they replace; will be implemented in accordance with a schedule consistent with the

schedule for the control measures they replace in the SIP; are accompanied with evidence of

adequate personnel and funding authority to im plement, monitor, a nd enforce the control

measures; and were developed through a collaborat ive process that included participation by all

affected jurisdictions, consultation with EPA, and reasonable public notice and comment. No

further action on the July 20, 2009 submittal is required.

The reference for EPA to evaluate th is substitution for concurrence is “Guidance for

Implementing the Clean Air Act Section 176(c) (8) Transportation Control Measure Substitution

and Addition Provision (EPA-420-B-09-002), January 2009.”

The New TCF Rules and Revisions – Adopted February 24, 2010 – Submitted March 25, 2010

Adopted April 3, 2012 – Submitted April 13, 2012

Notice of the proposed revisions to the SIP for the March 25, 2010 submittal was published in

area newspapers on October 9, 2009 and in the Oct ober 23, 2009 issue of the Texas Register (34

TexReg 7295); and on February 24, 2010, the TCEQ adopted these revisions. Notice of the

proposed revisions to the SIP for the April 13, 2012 submittal was published in area newspapers

on October 20, 2011 and in the November 4, 2011 issue of the Texas Register (36 TexReg

7472); and on March 28, 2012, the TCEQ adopted these revisions.

The creation and adoption of the TCF program was not intended to replace the repealed TCF

program discussed above. The Texas Legislature coincidentally named this new program the

same as the previously repealed program.

10 

### EPA’s letter is part of the state’s submittal and is in the docket for this rulemaking.

## 17 The March 25, 2010 and April 13, 2012 Submittals

On March 25, 2010, the TCEQ submitted revisi ons to 30 TAC 114: Control of Air Pollution

from Motor Vehicles. These revisions address a new, voluntary state grant program called the

Texas Clean Fleet (TCF) Program. The revi sions implement SB 1759, adopted by the 81 st



## Legislature (2009, Regular Session ) by adding the TCF Program. This program is designed to

encourage eligible entities to replace on-road di esel-powered vehicles with vehicles powered by

fuels other than gasoline or diesel. The submitta l labeled as April 13, 2012 makes revisions to the

TCF program, including, but not lim ited to the eligibility criteria and disposition of the replaced

vehicles. Since these two submittals address the TCF program, it makes sense to group them

together here. A tabular list of these two revisions, with our ev aluation of each, is provided in

Table 2 below.

The TCF Program provides incentives to owners of large fleets in Texas to replace on-road

diesel-powered vehicles with alternative fuel vehicles including hybrids. The TCF is a program

under the umbrella of the TERP, which provides financial incentives to eligible individuals,

businesses or local governments to reduce emi ssions from polluting vehicles and equipment. 11



## The TERP was approved into the SIP on November 14, 2001 (66 FR 57160).

To evaluate the TCF Program, we are using the EPA Guidance: Improving Air Quality with

Economic Incentive Programs (EIPs). 12 

## An EIP achieves an air qua lity objective by providing

market-based incentives or information to emi ssion sources. Three fundame ntal principles apply

to all economic incentive programs: integr ity, equity, and envi ronmental benefit.

Integrity

To realize integrity, the emission reductions must be surplus, quantifiable, enforceable , and

permanent . Emissions are considered surplus if th ey are not otherwise required by any other

local, state, or federal regulat ions. The TCF Program reductions cannot be used for compliance

with any state, local or Federal requirement.

The reductions must be quantifiable: To be elig ible for a grant under the TCF Program a project

must result in a reduction in emissions of NOx (a precursor to ozone formation) of at least 25%.

At the discretion of the executive director of the TCEQ, projects th at result in a 25% reduction in

other pollutants may be considered eligible. E ach grant applicant under the TCF Program must

provide information regarding the vehicles bei ng replaced and the replacement vehicles; this

allows the state to estimate emission reductions and determine whether the project meets this

eligibility requirement.

The reductions from the program must be enforc eable. Should this program be approved into a

SIP for emissions reduction credit, the State w ould be required to ensu re that the credits

projected were achieved and to provide for substitute measures that would achieve equivalent or

greater emission reductions in the ev ent of a shortfall. If the state decides to take TERP credit for

11 

### See http://www.tceq.texas.gov/airquality/terp/tcf

.

12 

### We refer to this document as “EPA’s EIP Guidance.”

## 18 this program, there will have to be an accounting of credits to show that these TERP credits were

not taken for other purpose s, i.e., double-counted.

Finally, reductions must be permanent. They mu st last for the duration of the SIP, which is

understood to mean through the attainment date for which the SIP applies.

Equity

The TCF Program provides grant funds that will re sult in air quality improvement in areas with

the worst air quality in Texas, the ozone non-at tainment and near nonattainment areas. Projects

eligible for TCF Program funding are restricted to nonattainment and near non-attainment areas.

Nonattainment areas have failed to meet the ozone NAAQS and are designated as nonattainment.

Near nonattainment areas are so named because , although they are designated as attainment,

their air quality is close to viol ating the standard and in some ar eas, they are violating the ozone

standard. Thus the state is targ eting areas with the worst air quality for these projects. The

reductions would improve air quality and public heal th and assist these specific areas to achieve

and/or maintain the ozone standard. The improv ement to regional air quality and the eligibility

for owners and operators in nonattainment and n ear nonattainment areas to apply for these funds

provides for equity.

Environmental Benefit

The TCF Program provides an environmental bene fit by encouraging the use of alternatively

fueled vehicles in place of older diesel tec hnologies in the state’s nonattainment and near

nonattainment areas. Because diesel equipment ha s a long operational life, the introduction of

newer, cleaner engines into such a fleet is a l ong-term process. With the aid of the TCF Program,

many of the older, dirtier on-road engines may be replaced with cleaner running vehicles sooner

than would have otherwise occurred. In addition and pursuant to section 114.654 of the rule, a

vehicle or engine replaced under this program must be rendered permanently inoperable, such

that it cannot be used in the re gion or elsewhere in Texas after replacement. Finally, the emission

reductions generated through projects funded by th e TCF Program are beneficial because they

would not have otherwise occurred.

Lastly, we address the recordkeeping or trac king for the TCF Program. Grant recipients are

required to meet the reporting requirements of their specific grant, which must occur no less

frequently than annually and until the fifth anniversary of the date of reimbursement of the grantfunded expenses or until the date the vehicle has been in operation fo r 400,000 miles, whichever

happens first. Furthermore, the TCEQ must subm it a biennial report to the Texas Legislature on

the status of the implementation of the TERP, which would include the TCF Program. This

biennial report is submitted no later than D ecember 1 of each even numbered year. The TCEQ,

under the consultation of the TER P Advisory Board, must review annually and document in the

report the programs established by the plan. The bi ennial report includes a review and discussion

of each project funded under the plan, the amount funded and emission reductions attributed to

each project, and the cost effectiveness of each pr oject. If any changes occur in project selection

criteria, award criteria or administrative procedur e, these would also be included in the report.

The Commission conducts a public hearing and comment period on ea ch draft of the biennial

## 19 report while constructing the final report. The Texas Emissions Reduction Plan Biennial Report

(2011-2012), to the 83rd Texas Legislatur e is posted on the TCEQ website at

http://www.tceq.texas.gov/assets/public/comm_exec/pubs/sfr/079_12.pdf . Previous legislative

reports are posted at http://www.tceq.texas .gov/publications/leg islativereports/

.

Table 2 below shows the revisions to 30 TA C 114 provided in the March 2010 and April 2012

submittals. Our comments include an explanatio n for how each revision complies with EPA’s

EIP Guidance.

Table 2: March 25, 2010 and April 13, 2012 revisions to 30 TAC 114.650

– 114.658

March 25, 2010 Revisions April 13, 2012 Revisions EPA

Comments

§114.650. Definitions. Unless specifically defined in the Texas Clean Air

Act (TCAA) or in the rules of the commission, the terms used in this

subchapter have the meanings commonly ascribed to them in the field

of air pollution control. In addition to the terms that are defined by the

TCAA and §§3.2, 101.1, and 114.1 of this title (relating to Definitions),

the following words and terms, when used in this division will have the

following meanings, unless the context clearly indicates otherwise.

(1) Alternative fuel

‐ A fuel, other than gasoline or diesel fuel. When

used in this division, this definition is limited to the following: electricity,

compressed natural gas, liquefied natural gas, hydrogen, propane, or a

mixture of fuels containing at least 85% methanol by volume.

(2) Eligible entity

‐ Any person or entity with a fleet of 100 or more

vehicles that:

(A) are registered in Texas; and

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

(3) Golf cart

‐‐ A motor vehicle designed by the manufacturer primarily

for transporting persons on a golf course.

(4) Heavy

‐ duty vehicle

‐‐ A motor vehicle with a gross vehicle weight

rating greater than 8,500 pounds and containing an engine certified to

the United States Environmental Protection Agency's heavy

‐ duty engine

standards.

(5) Hybrid vehicle

‐ A motor vehicle with at least two different energy

converters and two different energy storage systems on board the

vehicle for the purpose of propelling the vehicle.

(6) Light

‐ duty motor vehicle

‐‐ A motor vehicle with a gross vehicle

weight rating of less than 10,000 pounds and certified to the United

States Environmental Protection Agency's light

‐ duty vehicle emission

standards.

(7) Motor vehicle

‐‐ A self

‐ propelled device designed for transporting

persons or property on a public highway that is required to be

registered under Texas Transportation Code, Chapter 502.

(8) Neighborhood electric vehicle

‐‐ A motor vehicle that:

(A) is originally manufactured to meet, and does meet, the

equipment requirements and safety standards established for "low

‐ speed 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; (B) include at least 20 [25 ] vehicles

that are eligible for replacement. Source and

program

requirements are

consistent with

EPA’s EIP

Guidance.

Because this

provision was not

previously

approved, it can

be revised with

‐

out 110(l) issues.

## 20 March 25, 2010 Revisions April 13, 2012 Revisions EPA

Comments

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

(F) is not a golf cart.

(9) Program

‐‐ The Texas Clean Fleet Program established under this

division.

§114.651. Applicability.

(a) Any eligible entity that will replace 25 or more on

‐ road diesel

vehicles within a twelve

‐ month period with qualifying vehicles may

apply for a grant under the Texas Clean Fleet Program to offset the cost

of replacing those vehicles with alternative fuel or hybrid vehicles.

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

of governments, or similar regional planning agency created under Local

Government Code, Chapter 391, or a private nonprofit organization to

apply for and receive a grant to improve the ability of the program to

achieve its goals. (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 agency created under Local

Government Code, Chapter 391, or a

private nonprofit organization to apply

for and receive a grant to improve the

ability of the program to achieve its

goals. Revision adds a

new subs ection

(b).

Source and

program

requirements are

consistent with

EPA’s EIP

Guidance.

§114.652. Qualifying Vehicles.

(a) A qualifying vehicle is one that:

(1) is certified to current federal emissions standards;

(2) replaces a diesel

‐ powered on

‐ road vehicle of the same weight

classification and use; and

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

(b) As a condition of receiving a grant the qualifying vehicle must be

continuously owned, registered, and operated in Texas by the grant

recipient for at least five years from the date of reimbursement of the

grant

‐ funded expenses.

(c) A vehicle is not a qualifying vehicle if it:

(1) is a neighborhood electric vehicle;

(2) has been used as a qualifying vehicle to qualify for a grant under

this division for a previous reporting period or by another entity; or

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

jurisdiction. (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

. Defines source

requirements;

meets the

source

‐ specific

integrity element

for “permanent.”

Consistent with

EPA’s EIP

Guidance.

Revision provides

clarifying

language in (b).

§114.653. Grant Eligibility.

(a) To be eligible for a grant under the program a project must result in

a reduction in emissions of nitrogen oxides of at least 25%, based on:

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

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

(b) The vehicle being replaced must:

(1) be an on

‐ road vehicle that has been owned, registered, and

operated by the applicant in Texas for at least the two years

immediately preceding the submission of a grant application;

(2) satisfy any minimum average annual mileage or fuel usage

requirements established by the executive director;

(3) satisfy any minimum percentage of annual usage requirements

established by the executive director; and

(4) be in operating condition with at least two years of remaining

useful life, as determined in accordance with criteria established by the

executive director.

(c) At the discretion of the executive director, projects that result in a

25% reduction in other pollutants may be considered eligible for (b)(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;

(e) The executive director shall waive Meets the

integrity element

for

“quantifiable.”

Consistent with

the EPA’s EIP

Guidance.

Expands grant

eligibility.

Revision adds

## 21 March 25, 2010 Revisions April 13, 2012 Revisions EPA

Comments

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. the requirements of subsection (b)(1)

of this section on 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. paragraph (e).

§1l4.654. 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 in accordance with criteria established by the

executive director. (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

es tablished 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 subsection. Consistent with

EPA’s EIP

Guidance;

provides

environmental

benefit.

Adds clarifying

language to (b).

§114.655. Grant Restrictions. A recipient of a grant under this division

shall use the grant to pay the costs of the project for which the grant is

made, which may include the initial cost of the alternative fuel or hybrid

vehicle. The recipient shall not use the grant to pay the recipient's

administrative expenses. No changes submitted. Program

requirements are

consistent with

EPA’s EIP

Guidance.

§114.656. Eligible Grant Amounts.

(a) The eligible grant amount for each heavy

‐ duty on

‐ road vehicle being

replaced is determined as follows:

(1) 80% of the cost for replacement of a vehicle with an engine

manufactured prior to 1988 and certified to meet the federal emissions

standards, if any, applicable to the year of manufacture;

(2) 70% of the cost for replacement of a vehicle with an engine

manufactured after 1987 and before 1998 and certified to meet the

federal emission standards applicable to the year of manufacture;

(3) 60% of the cost for replacement of a vehicle with an engine

manufactured after 1997 and before 2004 and certified to meet the

federal emission standards applicable to year of manufacture; and

(4) 50% of the cost for replacement of a vehicle with an engine

manufactured after 2003 and certified to meet the federal emission

standards applicable to the year of manufacture.

(b) The eligible grant amount for each light

‐ duty on

‐ road vehicle being

replaced is determined as follows:

(l) 80% of the cost for replacement of a light

‐ duty diesel vehicle of a

model year prior to 1994 and certified to meet the federal emissions

standards, if any, applicable to the model year of the vehicle;

(2) 70% of the cost for replacement of a light

‐ duty diesel vehicle of a

model year after 1993 and before 2004 and certified to meet the

federal emission standards applicable to the model year of the vehicle;

and

(3) 60% of the cost for replacement of a light

‐ duty diesel vehicle of a

model year after 2003 and certified to meet the federal emission

standards applicable to the model year of the vehicle.

(c) The executive director may revise the standards for determining No changes submitted. Program

requirements are

consistent with

EPA’s EIP

Guidance.

## 22 March 25, 2010 Revisions April 13, 2012 Revisions EPA

Comments

grant amounts as needed to reflect changes to federal emission

standards and decisions on pollutants of concern.

(d) To be eligible for replacement, vehicles and engines imported into

the United States from another country must have met all applicable

emissions certification requirements for importation.

§114.657. Reporting Requirements. Grant recipients must meet the

reporting requirements of their grant, which must occur no less

frequently than annually. No changes submitted. Program

requirements are

consistent with

EPA’s EIP

Guidance.

§114.658. Implementation Schedule. This division expires on August 31,

2017

. No changes submitted.



## In October 2009, the TCEQ proposed the Marc h 25, 2010 SIP revisions and in October 2011, the

TCEQ proposed the April 13, 2012 SIP revisions . After reviewing these documents, we

submitted a comment letter to the TCEQ regardin g each proposed revision. In our letter of

November 17, 2009, addressing the March 25, 2010 subm ittal, we raised concerns regarding the

proposed revisions to sections 114.650, 114.653, and 114.656. To address our concerns, the

TCEQ made additional revisions to sections 1l4.650(1) and 114.656. 13



## In our letter of December 5, 2011, addressing the April 13, 2012 submittal, we raised concerns

with the language in 114.653(e). The state explained the intent and the meaning of the language

in a satisfactory way. Because this is not a ma ndatory program, director discretion is not a

limiting issue.

The March 25, 2010 and April 13, 2012 revisions are consistent with EPA’s EIP Guidance. We

believe these new rules will contribute to the enhancement of air qual ity in the nonattainment

areas where they are implemen ted. We therefore recommend a pproval of the March 25, 2010 and

April 13, 2012 revisions.

Recommendation:

Based on our evaluation using the CAA and EP A guidance, we recommend approval of the

above evaluated SIP revi sions into the SIP.

13 

### The TCEQ submittal includes the pr oposed and final revisions, and comments received during their public

comment period. This submittal is included in the docket for this rulemaking.