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2003 Annual Meeting Panel Remarks
Texas Emissions Reduction Plan
Brian Christian
I. TERP
A. TERP was created by Senate Bill 5 in 2001 to provide grants and other incentives for improving air quality.
B. The construction shift and Tier 2/3 accelerated purchase requirements from SIP for DFW and HGA were repealed.
C. The program provides incentives, rebates, and grants for various types of clean air projects.
D. TERP is administered by TCEQ and a number of other state agencies and boards.
II. TERP
A. TERP was originally funded through various surcharges on equipment and motor vehicle purchases, as well as an increase in fees on out-of-state vehicles.
B. It was a lawsuit concerning the out-of-state vehicle fee that resulted in approximately 80% of the original funding from being collected.
III. TERP
A. EPA issued notices that it would disapprove the DFW SIP and find that we had failed to implement the HGA SIP if full funding was not restored or equivalent reductions made.
B. Failure to address meant sanctions, including impacts on highway funding.
IV. TERP
A. The State’s leadership committed to fully funding the program.
B. Local governments, regional planning groups, and business interests worked to restore the program to its full potential.
V. TERP–House Bill 1365
A. Authored by State Representative Dennis Bonnen, Chairman of the House Environmental Regulation Committee.
B. Sponsored in the Senate by Senator Chris Harris.
C. Signed by Governor Perry on June 22, 2003.
V. ITERP--House Bill 1365--Funding Mechanisms
A. 2% surcharge on all off-road, heavy-duty diesel equipment sold, leased, or rented statewide
- is an increase from 1%
- applies not only to sales tax, but use tax as well
- clarified the definition of “equipment”
VII. TERP--Funding Mechanisms
A. Statewide surcharge on sale, lease, or use of on-road diesel motor vehicles over 14,000 pounds
- 2.5% on Model Year 1996 and older vehicles
- 1% on Model Year 1997 and newer vehicles
VIII. TERP--Funding Mechanisms
A. Title Fees
- Increase of $20 in nonattainment and affected counties
- Increase of $15 everywhere else
IX. TERP–Funding
A. These changes, when added to the pre-existing revenue, result in an average of approximately $150 million per year
X. TERP---Program Changes
A. Henderson, Hood, and Hunt Counties added to the list of affected counties eligible for grants.
B. TCEQ given authority to add counties if warranted.
XI. TERP---Program Changes
A. TCEQ authorized to allow stationary sources to receive grants
B. TCEQ also authorized to allow vehicles and equipment that use fuels other than diesel to receive grants
XII. TERP--Program Changes
A. Definition of Repower
- Specific percentage reduction requirements removed to provide greater flexibility
- Means to replace an old engine with a new engine, a used engine, a remanufactured engine, or electric motors, drives, or fuel cells
- Still must achieve a 30% NOx reduction
XIII. TERP--Program Changes
A. TCEQ authorized to provide grant incentives for the replacement of older model year heavy-duty vehicles and non-road equipment with “newer” (i.e. not factory new) vehicles and equipment
B. TCEQ authorized to allow a person other than the owner to apply for and receive a grant, thereby allowing partnerships with regional groups to obtain grants
C. Provides that cost-effectiveness requirements do not apply to infrastructure projects and infrastructure purchases that are part of a broader retrofit, repower, replacement, or add-on equipment project
XIV. TERP--Program Changes
A. TCEQ authorized to provide incentives for on-road diesels that are certified by the California Air Resources Board
B. TCEQ authorized to expand the program to on-road vehicles, regardless of fuel-type used, that meet meet emission standards, weigh more than 8,500 pounds, and are purchased or leased in lieu of a new on-road diesel
XV. TERP--Program Changes
A. TCEQ required to conduct outreach to small businesses with on-road and non-road diesel engines
- Owner of not more than two vehicles, one of which is an on-road diesel with a pre-1994 engine; or a non-road diesel with an engine with uncontrolled emissions
XVI. TERP--Program Changes
A. Energy efficiency and light-duty vehicle incentive programs not allocated funding--indicates focus on reductions from diesel engines
XVII. TERP--Program Changes
A. Authorizes the State and Local Governments in contracting with vendors to give preference to those who meet or exceed any state or federal environmental standards, including air quality
B. Preference may only be given if the cost would not exceed 105% of the cost of the goods or services provided by a vendor who does not meet the standards
XVIII. TERP--Program Changes
A. Took effect immediately
B. According to the Comptroller, the modifed surcharges will be collected starting July 1
C. TCEQ will be modifying its rules this summer to incorporate program changes
XIX. TERP–Program Reminders
A. Grant programs pay for the incremental costs of cleaner equipment
B. Non-road equipment must be operated 75% of the time in a nonattainment area or affected county
C. Must be 30% cleaner for NOx than current year’s standard
D. Must not exceed $13,000/ton of NOx reduced
XX. TERP–Program Reminders
A. Will pay for the incremental cost difference between a conventional fuel and a qualifying fuel
B. There is a heavy-duty vehicle incentive program for purchases of new on-road vehicles over 8,500 pounds
- Rebates on incremental costs based on emissions from vehicle
- Rebate could be as much as $25,000
XXI. TERP--Texas Council on Environmental Technology
A. Eliminated as a stand-alone State agency
B. TCEQ will absorb administrative functions
C. Council itself NOT abolished--will continue to work to encourage technology development that will feed the TERP program
XXII. TERP--Wrap-Up
A. TERP is fully funded
B. Challenge now is to get applications in and start awarding money
C. House Bill 1365 made the program much more flexible in many aspects, making it more effective
XXIII. TERP--Contact Information
A. Web Site
- www.tnrcc.state.tx.us/oprd/sips/terp.html
B. Staff Contact
- Steve Dayton (512) 239-6824 or sdayton@tceq.state.tx.us