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Technical Support Document (TSD) 

for 

Repeal of Texas’ Low-Emission Vehicle Rules; 

Repeal of the Clean Fuel Fleet Motor Vehicle Emission Reduction 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 Vehicle Rules; 2) Repeal of Motor Vehicle Emission 

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

substitution rule; 3) New Texas Clean Fleet (TCF) Rules; and 4) Revisions to the new TCF rules. 

The revisions occur in Title 30 of the Texas Administrative 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 below. Throughout this document, “we,” “us,” and 

“our” means the EPA. 

Legal Authority

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

authorities to the TCEQ. Under the TWC, Chapter 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 carry out the powers and duties under the provisions of the TWC 

and other laws of the state; and §5.105 authorizes 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 state's air resources, consistent 

with the protection of public health, general welfare, and physical 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 authorizes the commission to prepare and develop a 

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

commission to adopt rules consistent with the policy and purposes 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 establishes the Texas Clean 

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

What are the Clean Air Act Requirements for Clean Vehicle Programs? 

On November 15, 1990, Congress enacted amendments 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 establish two programs: a clean-fuel vehicle pilot 

program in the State of California (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), and have been codified at 40 CFR sections 

88.301-93 - 88.313-93. The CAA required certain States to adopt and submit to EPA SIP 
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revisions containing a CFFP for nonattainment areas with 1980 populations greater than 250,000 

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

ppm for carbon monoxide (CO). 

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

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

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

as Severe and has as its nonattainment area the 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 nonattainment area the county of El 

Paso. 

The CAA provides that the States’ CFFP SIP revisions 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 their purchases each year. There are additional 

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

including the requirements that covered fleet operators must operate the Clean Fuel Vehicles 

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

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

September 1994. (See 40 CFR 88) 

The purpose of the CFFP is to introduce lower pollution emitting vehicles, "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 purchases. The goal of the CFFP is to reduce emissions of nonmethane organic gasses (NMOG), oxides of nitrogen (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 reduce the concentration of CO in covered CO 

nonattainment areas. 

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

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

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

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

greater opportunity to improve 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 than those required under this Act 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 containing covered areas to revise its SIP, within 42 months after 

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

acquired vehicles of covered fleets, beginning with model year (MY) 1998 and thereafter, shall 
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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 covered area. On May 22, 1997, and April 23, 1998, EPA 

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

those areas that are unable to meet the purchase 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 August 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 Beaumont/Port Arthur (BPA) nonattainment area 

was redesignated by EPA to a moderate nonattainment 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 clean-fuel vehicles. In 

addition, the affected fleets must maintain certain percentages of these clean-fuel vehicles within 

their total aggregated fleets. Local government and 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 was designed to allow manufacturers to commit 

to meet tailpipe standards for cars and light-duty trucks that are more stringent than EPA can 

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

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

Resource Conservation Commission1

 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 motivated primarily by the Ozone Transport 

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

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

 

1

 The agency name was changed to Texas Commission on Environmental Quality in 2003. 
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program. The NLEV program was created as a voluntary program for auto manufacturers to 

provide LEV technology to the OTR and other states. 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, the 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 related 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 achieved through the state requirements codified 

in 30 TAC §§115.352 - 115.359, concerning Fugitive Emission 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 Gasoline Terminals, would also be used to offset any shortfall 

in emission reductions resulting from the state’s substitute Texas Clean Fleet program as 

compared to the FCFF. Both of these programs are 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 emission reductions necessary to cover 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 and Trading of Allowances. The state's substitute program 

focused on the reduction of mobile source emissions through the acquisition of clean-fuel 

vehicles, which are defined as vehicles certified 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, severe, 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 certain 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 brief comparison of the requirements and issues 

between the state's substitute program and the FCFF program. This strategy 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 program with the federal Clean Fuel Fleet (FCFF) 

program is shown here. 
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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, nonroad, 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
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The following is an excerpt from the TSD for the 2001 approval action: (See 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 
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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. 

 
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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 1012 585 319 904 

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 (IBR) 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 action also IBR’d rules in Subchapter F 

– Vehicle Retirement and Mobile Emission Reduction Credits; Division 1: Mobile Emission 

Reduction Credits; and took no action on the transportation 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. 
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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 the Texas Commission on Environmental Quality 

(TCEQ) to establish and implement LEV requirements 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 repealed 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), Dallas-Fort Worth (DFW), and El Paso ozone 

nonattainment areas to ensure that a specified percentage 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 repeal 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 standards 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 standards, both of which are cleaner than the 

federal LEV standards currently required under these 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 reductions from this program would be included in 

future SIPs. The federal emission standards for HDDE in model years 2004 - 2006 are equivalent 

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

in model years 2007 and later are approximately 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 the 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 rule repeal addresses only the low 

emission vehicle rules in Chapter 114: 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 Chapter 115 rules cited above or rules for the NOx 

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

which provided excess emission reductions that are used to make up the shortfall in reductions 
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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 requirement to have a CFF program by demonstrating 

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

program. In the federal register notice proposing to approve the BPA attainment demonstration 

(May 17, 2010, 75 FR 27514), we said this 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 achieve 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 would provide in the BPA nonattainment 

area and, therefore, the implementation 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 
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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 stringent 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 area 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 program, 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 Equivalency Demonstration, the BPA 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 BPA 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 rules for several reasons. The EPA guidance2

 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) standards 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 Implementation 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 referencing 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 determined3 that, beginning 

with the 2006 model years, both the Tier 2 conventional vehicle and engine standards and heavyduty vehicle and engine standards are either equivalent to or more stringent than the applicable 

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

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

whichever they are replacing. Because the goal of the FCFF program 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 vehicle 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 the state to maintain a CFF program as part of its 

SIP. Other portions of the approved TCF program are not the subject of this repeal, i.e., the VOC 

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

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

Mobile Emission Reduction Credits, including 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 because no credits from the state’s CFF substitute 

program were counted in any of the past attainment 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, CMAQ, 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 was published in area newspapers on February 26 

and 27, 2007 and in the March 9, 2007 issue of the 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 three 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 Transportation Control Measure (TCM)4

 substitution program and 

certain provisions of the state’s transportation conformity rule; 

 (2) repeal of the Mobile Emission Reduction 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 transportation conformity rule (40 CFR parts 51 and 93) to address the 

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

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

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

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

was not necessary to promulgate regulations in order to successfully implement the TCM 

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

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

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

Guidance for Implementing the Clean Air Act Section 176(c)(8) Transportation 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 [Federal Clean Air Act]. MERCs are enforceable, 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 accordance 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 reduce motor vehicle emissions, primarily by reducing the total 

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

arrangements, telecommuting and parking management. 

5

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

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

arrangements, telecommuting and parking management. 

6

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

ID number is EPA-420-B-09-002, January 2009.
14 

state-wide incentive program for the purchase of new on-road diesel vehicles and light-duty motor vehicles that met 

emission standards more stringent than those 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 regulates MERCs that are generated 

under the state’s banking and trading 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 the CFF MERC program components at 30 TAC 

§114.1(13), the definition of the Mobile Emission 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 program, the TCFF MERC program, the TCFF MERC 

fund and associated definitions are 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 Incentive (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 demonstration. While Senate Bill 5, which establishes the 

TERP program, was included in the final approval, 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 annually a brochure listing vehicles that met emission standards 

more stringent than those required 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 the TERP program. Finally, in 2013, the 83rd 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 implications 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 the associated state and Federal statutes. The 

comment letter should have asked the state to provide a demonstration 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 program 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 even 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 deficiency 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 purchase 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 excluding 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 79th Legislature in 2005 that repealed the TCF program. 

The SB number is correct. 

9

 The TCEQ submittal includes the proposed 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) substitution, 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 March 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 substitutions. 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 implement, monitor, and enforce the control 

measures; and were developed through a collaborative 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 this 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 October 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 revisions 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 revisions implement SB 1759, adopted by the 81st

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

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

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

TCF program, including, but not limited 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 evaluation 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 emissions 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 quality objective by providing 

market-based incentives or information to emission sources. Three fundamental principles apply 

to all economic incentive programs: integrity, equity, and environmental benefit. 

Integrity

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

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

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

with any state, local or Federal requirement. 

The reductions must be quantifiable: To be eligible 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 that result in a 25% reduction in 

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

provide information regarding the vehicles being 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 enforceable. Should this program be approved into a 

SIP for emissions reduction credit, the State would be required to ensure that the credits 

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

greater emission reductions in the event 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 purposes, i.e., double-counted. 

Finally, reductions must be permanent. They must 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 result in air quality improvement in areas with 

the worst air quality in Texas, the ozone non-attainment 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 violating the standard and in some areas, they are violating the ozone 

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

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

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

for owners and operators in nonattainment and near nonattainment areas to apply for these funds 

provides for equity. 

Environmental Benefit

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

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

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

newer, cleaner engines into such a fleet is a long-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 region or elsewhere in Texas after replacement. Finally, the emission 

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

would not have otherwise occurred. 

Lastly, we address the recordkeeping or tracking 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 for 400,000 miles, whichever 

happens first. Furthermore, the TCEQ must submit 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 December 1 of each even numbered year. The TCEQ, 

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

report the programs established by the plan. The biennial 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 project. If any changes occur in project selection 

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

The Commission conducts a public hearing and comment period on each draft of the biennial 
19 

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

(2011-2012), to the 83rd Texas Legislature 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/legislativereports/. 

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

submittals. Our comments include an explanation 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 subsection

(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

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 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 March 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 regarding each proposed revision. In our letter of 

November 17, 2009, addressing the March 25, 2010 submittal, 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 mandatory 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 quality in the nonattainment 

areas where they are implemented. We therefore recommend approval of the March 25, 2010 and 

April 13, 2012 revisions. 

Recommendation: 

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

above evaluated SIP revisions into the SIP. 

 

13 The TCEQ submittal includes the proposed and final revisions, and comments received during their public 

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