H.B. No. 4472         AN ACT   relating to the Texas emissions reduction plan.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 386.051(b), Health and Safety Code, is   amended to read as follows:          (b)  Under the plan, the commission and the comptroller shall   provide grants or other funding for:                (1)  the diesel emissions reduction incentive program   established under Subchapter C, including for infrastructure   projects established under that subchapter;                (2)  the motor vehicle purchase or lease incentive   program established under Subchapter D;                (3)  the air quality research support program   established under Chapter 387;                (4)  the clean school bus program established under   Chapter 390;                (5)  the new technology implementation grant program   established under Chapter 391;                (6)  the regional air monitoring program established   under Section 386.252(a);                (7)  a health effects study as provided by Section   386.252(a);                (8)  air quality planning activities as provided by   Section 386.252(d);                (9)  a contract with the Energy Systems Laboratory at   the Texas A&M Engineering Experiment Station for computation of   creditable statewide emissions reductions as provided by Section   386.252(a);                (10)  the Texas clean fleet program established under   Chapter 392;                (11)  the Texas alternative fueling facilities program   established under Chapter 393;                (12)  the Texas natural gas vehicle grant program   established under Chapter 394;                (13)  other programs the commission may develop that   lead to reduced emissions of nitrogen oxides, particulate matter,   or volatile organic compounds in a nonattainment area or affected   county;                (14)  other programs the commission may develop that   support congestion mitigation to reduce mobile source ozone   precursor emissions;                (15)  the seaport and rail yard areas emissions   reduction program established under Subchapter D-1;                (16)  conducting research and other activities   associated with making any necessary demonstrations to the United   States Environmental Protection Agency to account for the impact of   foreign emissions or an exceptional event;                (17)  studies of or pilot programs for incentives for   port authorities located in nonattainment areas or affected   counties as provided by Section 386.252(a); [and]                (18)  the governmental alternative fuel fleet grant   program established under Chapter 395; and                (19)  remittance of funds to the state highway fund for   use by the Texas Department of Transportation for congestion   mitigation and air quality improvement projects in nonattainment   areas and affected counties.          SECTION 2.  Section 386.057, Health and Safety Code, is   amended by adding Subsection (e) to read as follows:          (e)  Not later than October 1 of each year, the Texas   Department of Transportation shall report to the commission the   following information for all congestion mitigation and air quality   improvement projects in nonattainment areas and affected counties   that are planned to be funded, or received initial funding during   the preceding 10 years, from money received by the department under   this chapter:                (1)  projects to mitigate congestion and improve air   quality that are currently planned;                (2)  projects to mitigate congestion and improve air   quality that have been completed;                (3)  estimated emissions reductions for all planned and   completed congestion mitigation projects; and                (4)  estimated cost per ton analysis of reduced   emissions of nitrogen oxides, particulate matter, or volatile   organic compounds for each congestion mitigation project planned or   completed.          SECTION 3.  Sections 386.104(c) and (c-1), Health and Safety   Code, are amended to read as follows:          (c)  Except as otherwise provided by this subsection, for a   proposed project as described by Section 386.102(b), [other than a   project involving a marine vessel or engine,] not less than 75   percent of vehicle miles traveled or hours of operation projected   for the five years immediately following the award of a grant must   be projected to take place in a nonattainment area or affected   county of this state. The commission may set the minimum percentage   of vehicle miles traveled or hours of operation required to take   place in a nonattainment area or affected county at a percentage and   for a period that is different from the percentage and period   specified by this subsection, provided that the commission may not   set the minimum percentage at a level that is less than 55 percent.   The commission may allow vehicle travel on highways and roadways,   or portions of a highway or roadway, designated by the commission   and located outside a nonattainment area or affected county to   count towards the percentage of use requirement in this subsection.          (c-1)  For a proposed project involving a marine vessel or   engine, the vessel or engine must be operated in the intercoastal   waterways or bays adjacent to a nonattainment area or affected   county of this state for a sufficient percentage [amount] of time   over the lifetime of the project, as determined by the commission,   to meet the cost-effectiveness requirements of Section 386.105.     The percentage determined by the commission under this subsection   may not be less than 55 percent.          SECTION 4.  Section 386.250(c), Health and Safety Code, as   effective September 1, 2021, is amended to read as follows:          (c)  Not later than the 30th day after the last day of each   state fiscal biennium, the commission shall transfer the   unencumbered balance of the fund remaining on the last day of the   state fiscal biennium to the credit of the state highway fund for   use by the Texas Department of Transportation for projects   described by Section 386.051(b)(19) [Texas emissions reduction   plan account].          SECTION 5.  Section 386.251(c), Health and Safety Code, as   effective September 1, 2021, is amended to read as follows:          (c)  The account consists of its accumulated balance [and the   amount of money transferred to the account under Section   386.250(c)].          SECTION 6.  Section 386.252, Health and Safety Code, as   effective September 1, 2021, is amended by amending Subsection (a)   and adding Subsection (a-1) to read as follows:          (a)  Money in the fund and account may be used only to   implement and administer programs established under the   plan.  Subject to the reallocation of funds by the commission under   Subsection (h) and after remittance to the state highway fund under   Subsection (a-1), money from the fund and account to be used for the   programs under Section 386.051(b) shall initially be allocated as   follows:                (1)  four percent may be used for the clean school bus   program under Chapter 390;                (2)  three percent may be used for the new technology   implementation grant program under Chapter 391, from which at least   $1 million will be set aside for electricity storage projects   related to renewable energy;                (3)  five percent may be used for the Texas clean fleet   program under Chapter 392;                (4)  not more than $3 million may be used by the   commission to fund a regional air monitoring program in commission   Regions 3 and 4 to be implemented under the commission's oversight,   including direction regarding the type, number, location, and   operation of, and data validation practices for, monitors funded by   the program through a regional nonprofit entity located in North   Texas having representation from counties, municipalities, higher   education institutions, and private sector interests across the   area;                (5)  10 percent may be used for the Texas natural gas   vehicle grant program under Chapter 394;                (6)  not more than $6 million may be used for the Texas   alternative fueling facilities program under Chapter 393, of which   a specified amount may be used for fueling stations to provide   natural gas fuel, except that money may not be allocated for the   Texas alternative fueling facilities program for the state fiscal   year ending August 31, 2019;                (7)  not more than $750,000 may be used each year to   support research related to air quality as provided by Chapter 387;                (8)  not more than $200,000 may be used for a health   effects study;                (9)  at least $6 million but not more than $16 million   may be used by the commission for administrative costs, including   all direct and indirect costs for administering the plan, costs for   conducting outreach and education activities, and costs   attributable to the review or approval of applications for   marketable emissions reduction credits;                (10)  six percent may be used by the commission for the   seaport and rail yard areas emissions reduction program established   under Subchapter D-1;                (11)  five percent may be used for the light-duty motor   vehicle purchase or lease incentive program established under   Subchapter D;                (12)  not more than $216,000 may be used by the   commission to contract with the Energy Systems Laboratory at the   Texas A&M Engineering Experiment Station annually for the   development and annual computation of creditable statewide   emissions reductions obtained through wind and other renewable   energy resources for the state implementation plan;                (13)  not more than $500,000 may be used for studies of   or pilot programs for incentives for port authorities located in   nonattainment areas or affected counties to encourage cargo   movement that reduces emissions of nitrogen oxides and particulate   matter; and                (14)  the balance is to be used by the commission for   the diesel emissions reduction incentive program under Subchapter C   as determined by the commission.          (a-1)  The commission shall remit not less than 35 percent of   the amount deposited to the credit of the fund to the state highway   fund for use by the Texas Department of Transportation for projects   described by Section 386.051(b)(19).          SECTION 7.  Section 391.002(b), Health and Safety Code, is   amended to read as follows:          (b)  Projects that may be considered for a grant under the   program include:                (1)  advanced clean energy projects, as defined by   Section 382.003;                (2)  new technology projects that reduce emissions of   regulated pollutants from stationary sources;                (3)  new technology projects that reduce emissions from   upstream and midstream oil and gas production, completions,   gathering, storage, processing, and transmission activities   through:                      (A)  the replacement, repower, or retrofit of   stationary compressor engines;                      (B)  the installation of systems to reduce or   eliminate the loss of gas, flaring of gas, or burning of gas using   other combustion control devices; or                      (C)  the installation of systems that reduce   flaring emissions and other site emissions [by capturing waste heat   to generate electricity solely for on-site service]; and                (4)  electricity storage projects related to renewable   energy, including projects to store electricity produced from wind   and solar generation that provide efficient means of making the   stored energy available during periods of peak energy use.          SECTION 8.  Section 391.205(a), Health and Safety Code, is   amended to read as follows:          (a)  Except as provided by Subsection (c), in awarding grants   under this chapter the commission shall give preference to projects   that:                (1)  involve the transport, use, recovery for use, or   prevention of the loss of natural resources originating or produced   in this state;                (2)  contain an energy efficiency component;                (3)  include the use of solar, wind, or other renewable   energy sources; [or]                (4)  recover waste heat from the combustion of natural   resources and use the heat to generate electricity; or                (5)  reduce flaring emissions and other site emissions.          SECTION 9.  Section 391.301, Health and Safety Code, is   amended to read as follows:          Sec. 391.301.  RESTRICTION ON USE OF GRANT. A recipient of a   grant under this chapter must use the grant to pay the incremental   costs of the purchase, lease, or [and] installation of the project   for which the grant is made, which may include reasonable and   necessary expenses for the labor needed to install   emissions-reducing equipment.  The recipient may [not] use the   grant for the costs of operating and maintaining the   emissions-reducing equipment.          SECTION 10.  Section 501.138, Transportation Code, is   amended by amending Subsections (b-1), (b-2), and (b-3) and adding   Subsection (b-4) to read as follows:          (b-1)  Except as provided by Subsection (b-4), fees [Fees]   collected under Subsection (b) to be sent to the comptroller shall   be deposited to the credit of the Texas [Mobility Fund, except that   $5 of each fee imposed under Subsection (a)(1) and deposited on or   after September 1, 2008, and before September 1, 2015, shall be   deposited to the credit of the Texas] emissions reduction plan   fund.          (b-2)  The comptroller shall establish a record of the amount   of the fees deposited to the credit of the Texas emissions reduction   plan fund [Mobility Fund] under Subsection (b-1). On or before the   fifth workday of each month, the Texas Department of Transportation   shall remit to the comptroller for deposit to the credit of the   Texas Mobility Fund [emissions reduction plan fund] an amount of   money equal to the amount of the fees deposited by the comptroller   to the credit of the Texas emissions reduction plan fund [Mobility   Fund] under Subsection (b-1) in the preceding month.  The Texas   Department of Transportation shall use for remittance to the   comptroller as required by this subsection money in the state   highway fund that is not required to be used for a purpose specified   by Section 7-a, Article VIII, Texas Constitution, and may not use   for that remittance money received by this state under the   congestion mitigation and air quality improvement program   established under 23 U.S.C. Section 149.          (b-3)  This subsection and Subsections (b-1) and   [Subsection] (b-2) expire on the last day of the state fiscal   biennium during which the Texas Commission on Environmental Quality   publishes in the Texas Register the notice required by Section   382.037, Health and Safety Code.          (b-4)  Fees collected under Subsection (b) to be sent to the   comptroller shall be deposited to the credit of the Texas Mobility   Fund if the fees are collected on or after the last day of the state   fiscal biennium during which the Texas Commission on Environmental   Quality publishes in the Texas Register the notice required by   Section 382.037, Health and Safety Code.          SECTION 11.  The changes in law made by this Act apply only   to a Texas emissions reduction plan grant awarded on or after the   effective date of this Act.  A grant awarded before the effective   date of this Act is governed by the law in effect on the date the   award was made, and the former law is continued in effect for that   purpose.          SECTION 12.  The change in law made by this Act to Section   501.138, Transportation Code, applies only to a fee collected on or   after the effective date of this Act. A fee collected before the   effective date of this Act is governed by the law in effect when the   fee was collected, and the former law is continued in effect for   that purpose.          SECTION 13.  This Act takes effect September 1, 2021.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 4472 was passed by the House on May   14, 2021, by the following vote:  Yeas 117, Nays 27, 3 present, not   voting; and that the House concurred in Senate amendments to H.B.   No. 4472 on May 28, 2021, by the following vote:  Yeas 103, Nays 32,   1 present, not voting.     ______________________________   Chief Clerk of the House               I certify that H.B. No. 4472 was passed by the Senate, with   amendments, on May 25, 2021, by the following vote:  Yeas 31, Nays   0.     ______________________________   Secretary of the Senate      APPROVED: __________________                   Date                       __________________                 Governor