TITLE 30. ENVIRONMENTAL QUALITY

PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

CHAPTER 114. CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) adopts amendments to §§114.2, 114.7, 114.53, 114.60, 114.62, 114.64, 114.70, and 114.87.

Section 114.64 is adopted with change to the proposed text as published in the December 5, 2014, issue of the Texas Register (39 TexReg 9468). Sections 114.2, 114.7, 114.53, 114.60, 114.62, 114.70, and 114.87 are adopted without changes to the proposed text and, therefore, will not be republished.

Sections 114.2, 114.53, and 114.87 will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan (SIP).

Background and Summary of the Factual Basis for the Adopted Rules

The commission adopts revisions to incorporate a procedure for counties to opt out of the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP) and to be released from program obligations, including remittance of the fee to fund the LIRAP. The commission also adopts language that differentiates between a LIRAP participating county and a non-participating county.

The LIRAP was established to enhance the objectives of the Vehicle Inspection and Maintenance (I/M) Program. The 77th Texas Legislature, 2001, enacted House Bill (HB) 2134 to assist low income individuals with repairs, retrofits, or retirement of vehicles that fail emissions inspections. HB 2134 required the commission and the Texas Department of Public Safety (DPS), by rule, to provide the minimum guidelines by which eligible counties may implement the LIRAP. The commission, in coordination with DPS, adopted rules implementing HB 2134.

The LIRAP is a voluntary program, and only those counties that have implemented vehicle emissions I/M programs are eligible to participate in the LIRAP. I/M program counties include Brazoria, Fort Bend, Galveston, Harris, and Montgomery Counties in the Houston-Galveston-Brazoria (HGB) area; Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties in the Dallas-Fort Worth (DFW) area; Travis and Williamson Counties in the Austin-Round Rock (ARR) area; and El Paso County. To participate, an eligible county must submit a written request to the TCEQ from the county's commissioners court to implement the LIRAP. The TCEQ executive director and the participating county then enter into a grant contract for implementation of the program. The LIRAP is separated into two grant programs - Drive a Clean Machine (DACM) and local initiative projects (LIP). DACM funds provide monetary assistance to qualifying vehicle owners in participating counties for emission-related vehicle repair, retrofit, and replacement. LIP funds are granted to participating counties for use in approved projects focused on improving air quality in the program area.

The LIRAP is funded through a fee (LIRAP fee) that is charged to vehicle owners in participating counties. The LIRAP fee is $6.00 in participating DFW and HGB-area counties, and it is charged to vehicle owners who receive on-board diagnostics (OBD) emissions inspection tests. The LIRAP fee is $2.00 in participating ARR-area counties, and it is charged to vehicle owners for any emissions inspection test performed. The LIRAP fee was remitted at authorized inspection stations during annual vehicle safety and emissions inspections until March 1, 2015. As of that date, the LIRAP fee is paid to the Texas Department of Motor Vehicles (DMV) or county tax assessor-collector during vehicle registration. This change is a result of a 2014 revision to Chapter 114, Subchapters A, B, and C (Rule Project Number 2013-035-114-AI), transitioning the state to a single sticker system for vehicle inspection and registration and implementing HB 2305, 83rd Texas Legislature, 2013.

On April 28, 2014, the commission received Court Order No. 2014-221-04-21 from the Collin County Commissioners Court withdrawing the county from participation in the LIRAP. The court order was sent with a letter requesting that the commission release Collin County from program requirements, including collection of the LIRAP fee. At the time the LIRAP was established, the rules did not specify a procedure to allow participating counties to opt out of the program or to be released from the LIRAP fee requirement. This rulemaking provides Collin County or any participating county with a procedure for opting out of the LIRAP, which includes being released from collection of the LIRAP fee and ending of the contract between the county and the TCEQ executive director. This rulemaking amends Subchapter A to revise the definitions for the LIRAP to account for counties opting out of the program and adds four new definitions to further clarify program elements and differentiate between counties participating in the LIRAP and non-participating counties. This rulemaking also amends Subchapter C, Divisions 1, 2, and 3. Division 1 is amended to specify the I/M fees that apply in a participating nonattainment county, a county that is in the process of opting out of the LIRAP, and a non-participating nonattainment county. Division 2 is amended to provide a mechanism for participating nonattainment counties to opt out of the LIRAP, and Division 3 is amended to provide a mechanism for early action compact (EAC) counties to opt out of the LIRAP and accordingly, revise the I/M fee requirements in §114.87.

Section by Section Discussion

In addition to the adopted amendments associated with providing a mechanism for counties to opt out of the LIRAP, various stylistic, non-substantive changes are included to update rule language to current Texas Register style and format requirements. Such changes include appropriate and consistent use of acronyms, section references, rule structure, and certain terminology. These changes are non-substantive and generally are not specifically discussed in this preamble.

§114.2, Inspection and Maintenance Definitions

The acronym for the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program is replaced with the full program title to be consistent with the title of the referenced subchapter and Texas Register requirements.

§114.7, Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program Definitions

The title of §114.7 is corrected by amending the term "retrofit" to be singular. In addition, four definitions are added to §114.7 to clarify program requirements and differentiate between participating counties and non-participating counties. "LIRAP fee" is added as paragraph (13) to define the fee that vehicle owners in participating LIRAP counties pay when their vehicles receive certain emissions tests, OBD tests in DFW and HGB-area counties, and any emissions test in El Paso, Travis, and Williamson Counties. El Paso is currently a non-participating county. Assessment of the LIRAP fee is authorized by Texas Health and Safety Code (THSC), §382.202.

"LIRAP fee termination date" is added as paragraph (14) to define the effective date upon which a county opting out of the LIRAP would no longer pay the LIRAP fee. "LIRAP opt-out effective date" is added as paragraph (15) to define the date upon which a county that was participating in the LIRAP becomes a non-participating county. Withdrawal from the program is effective on the date that both of the following requirements have been met: 1) the county is no longer subject to the LIRAP fee; and 2) the grant contract between the county and the TCEQ executive director that established participation in the program is ended. The grant contract cannot be ended before the LIRAP fee termination effective date.

"Non-participating county" is added as paragraph (18) to differentiate between counties that are eligible to participate in the LIRAP but choose not to and eligible counties that participate in the LIRAP. The definition for "Participating county" is amended to clarify that a county that is in the process of opting out of the LIRAP will be considered a participating county until the LIRAP opt-out effective date. The definition for "Recognized emissions repair facility" is amended to replace the reference to 37 Texas Administrative Code (TAC) §23.93 with 37 TAC §23.51 as it replaced the former as of March 13, 2013. The remaining definitions in §114.7 are renumbered to accommodate the added definitions.

§114.53, Inspection and Maintenance Fees

Section 114.53(d)(1), (2), and (3) is amended to more fully describe the LIRAP fee as it relates to the vehicle I/M programs in El Paso County and the DFW and HGB-area counties. Subparagraphs are added to §114.53(d)(1), (2), and (3) to explain remittance of I/M fees, including the LIRAP fee, in a county participating in the LIRAP, a participating county that is in the process of opting out of the LIRAP, and a county that is not participating in the LIRAP and not subject to the LIRAP fee. Section 114.53(d)(1) is reorganized to allow the adopted subparagraphs to be consistent among the paragraphs of §114.53(d). The state fees vehicle owners pay during vehicle registration in participating counties, subparagraph (A) for each paragraph in §114.53(d), includes the LIRAP fee. The state fees vehicle owners pay during vehicle registration in participating counties that are in the process of opting out of the LIRAP, subparagraph (B) for each paragraph in §114.53(d), includes the LIRAP fee until the effective LIRAP fee termination date, after which state fees will not include the LIRAP fee. The state fees vehicle owners pay during vehicle registration in non-participating counties, subparagraph (C) for each paragraph in §114.53(d), does not include the LIRAP fee.

§114.60, Applicability for LIRAP

Section 114.60(c)(7) is added to specify that LIRAP requirements are not applicable to vehicles registered in counties that do not participate in the program. This addition clarifies that vehicles in non-participating counties are not subject to LIRAP requirements.

§114.62, LIRAP Funding

Section 114.62(a) is amended to clarify that the LIRAP is funded through money collected only in participating counties, and the term "participating" replaces "affected" in §114.62(c) for consistency in describing counties that participate in the program.

§114.64, LIRAP Requirements

The counties that are eligible to participate in the LIRAP are limited to those that are included in I/M program areas, but no county is required to participate in the LIRAP. The original rule to implement the program included a procedure to allow counties to opt into the LIRAP, but it did not include a procedure to allow counties to opt out. The adopted amendments to §114.64 establish a procedure for opting out of the LIRAP.

The commission amends §114.64(a), concerning implementation of the LIRAP, to indicate that participation in the program is voluntary. The commission amends §114.64(b)(3) to clarify that vehicle repair and retrofit assistance through the DACM Program is only available for vehicles registered in participating LIRAP counties.

The commission adds §114.64(g) to establish the procedure for opting out of the LIRAP. Section 114.64(g)(1) requires a county wishing to opt out of the program to submit a written request from the county commissioners court to the TCEQ executive director, which is consistent with the process for opting into the LIRAP. The written request should include one of two possible LIRAP opt-out effective dates, either the LIRAP fee termination effective date or the last day of the legislative biennium in which the LIRAP fee termination effective date occurs. The first option completely withdraws the opt-out county from the program on the same date that the county is no longer subject to the LIRAP fee. The second option extends the opt-out county's program participation past the LIRAP fee termination effective date to allow the county time to spend any remaining funds that have been allocated by the commission.

Participation in the LIRAP makes grant funds available to counties for program-related projects and to qualified vehicle owners, and the LIRAP is funded through appropriations made by the legislature from Clean Air Account 151, into which LIRAP fees collected from county vehicle owners are deposited. Due to the program's reliance on public support, the commission requested public comment on the method and process by which counties wishing to opt into or out of the LIRAP would do so, including any associated public notice requirements.

Adopted §114.64(g)(2) describes the procedure the commission will follow to release a county from LIRAP requirements upon receiving a written request from the county to opt out. Release from LIRAP requirements includes removing the LIRAP fee from the state fees charged to vehicle owners during vehicle registration, which requires the commission to coordinate with the DMV and DPS and to contact the Legislative Budget Board of Texas (LBB). The process to remove the LIRAP fee will be initiated upon receipt by the TCEQ executive director of a request from a county to opt out of the program. The DMV vehicle registration notices list charges for state inspection fees, which include the LIRAP fee in counties participating in the program. These fees are paid by vehicle owners when they register their vehicles. The DMV prints and distributes vehicle registration notices at least 90 days prior to registration expiration dates, so registration notices that include the LIRAP fee will be in circulation in an opt-out county for at least 90 days after the TCEQ initiates the fee removal process. The LIRAP fee will be effectively removed for an opt-out county once it is no longer included in the state fee charges that appear on vehicle registration notices in the affected county. For example, if the TCEQ executive director received a written request to withdraw from the program on August 1st, then the effective LIRAP fee termination date would be on or after December 1st because December would be the first month for which registration notices that did not include the LIRAP fee would be printed. The DMV prints registration notices mid-month, so a written request to withdraw that was received by the TCEQ executive director in mid-August would likely not result in the LIRAP fee being effectively terminated for the submitting county until, at the earliest, January 1st.

The effective LIRAP fee termination date for a county opting out of the LIRAP is the first day of the month for the month that the DMV issues registration notices that do not include the LIRAP fee. Until the LIRAP fee termination effective date, a county in the process of opting out of the LIRAP is still considered a participating county because the LIRAP fee cannot be assessed in a non-participating county. Depending upon the LIRAP opt-out effective date included in a county's written request to opt out of the program, the county could be completely withdrawn from the LIRAP on the LIRAP fee termination effective date, ending the contract between the county and the TCEQ executive director simultaneous with removal of the LIRAP fee. The county may instead choose to continue to participate in LIRAP activities without being subject to the LIRAP fee until the end of the legislative biennium in which the fee termination date occurs. Choosing the first option could end the county's participation in the LIRAP before all grant funds allocated to the county have been spent. The second option would allow a county the opportunity to continue LIRAP activities and spend previously allocated LIRAP grant funds until the end of the biennium in which the LIRAP fee termination date occurred for that county.

Adopted §114.64(g)(3) describes the LIRAP opt-out effective date, which is the date upon which a participating county is no longer subject to the LIRAP fee and the grant contract between the county and the TCEQ executive director is ended. On this date, the county becomes a non-participating county. The commission will allow a county wishing to opt out of the LIRAP a choice of two options in determining when the program is ended for that county, so there are two possible effective dates upon which a participating county becomes a non-participating county. The first occurs simultaneous with the LIRAP fee termination effective date, and the second occurs on the last day of the legislative biennium in which the LIRAP fee termination effective date occurs. The commission revises proposed §114.64(g)(3) in response to a comment received, which is discussed in the Response to Comments section of this preamble. Revised §114.64(g)(3) indicates that not more than 90 days after a county's LIRAP opt-out effective date, the unspent balance of allocated LIRAP funds for the opt-out county will be returned to the commission unless the county has entered into an official inter-county elective agreement with other participating counties in the same region to share allocated LIRAP funds. If an inter-county elective agreement exists, then the portion of LIRAP allocations that is shared and unspent as of the LIRAP opt-out effective date will be redistributed among the remaining participating counties that are part of that agreement. The redistribution of a county's allocated and unspent LIRAP funds will occur not more than 90 days after the county's LIRAP opt-out effective date.

§114.70, Records, Audits, and Enforcement

The commission amends §114.70(c) and (d) to incorporate recordkeeping and inspection requirements for counties that opt out of the LIRAP. Adopted §114.70(c) requires program participants in counties opting out of the LIRAP to maintain program records concerning the opt-out county for three years after the effective LIRAP opt-out date for the county. Program participants include the county, its designated entity, participating recognized emissions repair facilities, and participating vehicle retirement facilities. Adopted §114.70(d) requires that in the three-year period during which records must be kept after a county's LIRAP opt-out effective date, the TCEQ executive director must be allowed to conduct audits and inspections of the records kept concerning the opted out county by program participants.

§114.87, Inspection and Maintenance Fees

The commission amends §114.87 to apply the changes adopted in §114.53 to counties with early action compact programs that participate in the vehicle emissions I/M program. Adopted §114.87(d)(1) - (3) explains remittance of I/M fees, including the LIRAP fee, in a county participating in the LIRAP, a participating county that is in the process of opting out of the LIRAP, and a county that is not participating in the LIRAP and not subject to the LIRAP fee. The description of the state fees vehicle owners pay during vehicle registration in participating EAC counties, paragraph (1), includes the LIRAP fee. The description of the state fees vehicle owners pay during vehicle registration in participating EAC counties that are in the process of opting out of the LIRAP, paragraph (2), includes the LIRAP fee until the effective LIRAP fee termination date, after which state fees do not include the LIRAP fee. The description of the state fees vehicle owners pay during vehicle registration in non-participating EAC counties, paragraph (3), does not include the LIRAP fee.

Final Regulatory Impact Determination

The commission reviewed this rulemaking in light of the regulatory impact analysis requirements of Texas Government Code, §2001.0225 and determined that it does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" means "a rule, the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state." Additionally, this rulemaking does not meet any of the four applicability criteria for requiring a regulatory impact analysis for a major environmental rule, which are listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 applies only to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

The amendments to Chapter 114 are adopted in accordance with HB 2134, which authorized the LIRAP found in THSC, Chapter 382. HB 2134 was enacted to enhance the objective of the vehicle emissions I/M program. The LIRAP provides financial assistance to low-income individuals for repair, retrofit, or retirement of vehicles that fail an emissions inspection. The rulemaking is not expected to adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The rulemaking implements requirements of 42 United States Code (USC), §7410, which requires states to adopt a SIP that provides for the implementation, maintenance, and enforcement of the National Ambient Air Quality Standards (NAAQS) in each air quality control region of the state. The LIRAP was designed to enhance the objectives of the I/M program, and the commission previously submitted the I/M rules to the EPA as a revision to the Texas SIP, which the EPA approved effective July 25, 2014. While 42 USC, §7410 generally does not require specific programs, methods, or reductions in order to meet the standard, the SIP must include enforceable emission limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter (42 USC, Chapter 85). The provisions of the Federal Clean Air Act (FCAA) recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though the FCAA allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of 42 USC, §7410. States are not free to ignore the requirements of 42 USC, §7410 and must develop programs to assure that their contributions to nonattainment areas are reduced so that these areas can be brought into attainment on schedule.

The requirement to provide a fiscal analysis of adopted regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Texas Legislature, 1997. The intent of SB 633 was to require agencies to conduct a regulatory impact analysis of extraordinary rules. These rules are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 concluding that "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill will have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted the adopted rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law.

As discussed earlier in this preamble, the FCAA does not always require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each area contributing to nonattainment to help ensure that those areas will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues and to meet the requirements of 42 USC, §7410, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule adopted for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the LBB in its fiscal notes. Since the legislature is presumed to understand the fiscal impacts of the bills it passes and that presumption is based on information provided by state agencies and the LBB, the commission believes that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules will have a broad impact, the impact is no greater than is necessary or appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a) because they are required by federal law.

The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature has revised the Texas Government Code but left this provision substantially un-amended. It is presumed that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ); Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978).

The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the Texas Administrative Procedure Act (APA) by the legislature in 1999. In an attempt to limit the number of rule challenges based upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the standard of "substantial compliance." The legislature specifically identified Texas Government Code, §2001.0225, as falling under this standard. The commission has substantially complied with the requirements of Texas Government Code, §2001.0225.

The specific intent of these adopted rules is to amend sections of the TAC, which would allow any participating county to opt out of the LIRAP, including the collection of the LIRAP fee collected at the time of vehicle registration, without a future rulemaking. By providing a mechanism for participating counties to opt out of the LIRAP, this rulemaking creates a more comprehensive program in accordance with the TCEQ's statutory obligation to create and implement the LIRAP. Additionally, even if the adopted rulemaking was a major environmental rule, it does not exceed a standard set by federal law or exceed an express requirement of state law. No contract or delegation agreement covers the topic that is the subject of this rulemaking. Therefore, this rulemaking is not subject to the regulatory analysis provisions of Texas Government Code, §2001.0225(b) because it does not meet the definition of a "major environmental rule," nor does it meet any of the four applicability criteria for a major environmental rule.

The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment period, and none were received.

Takings Impact Assessment

The commission evaluated the adopted rulemaking and performed an assessment of whether Texas Government Code, Chapter 2007 is applicable. The specific intent of these rules is to amend sections of the TAC, which will allow any participating county to opt out of the LIRAP, including the collection of program-related LIRAP fee, without a future rulemaking. The rules will substantially advance this stated purpose by amending sections in Chapter 114, Subchapters A and C to include revisions of the definitions and fees and to provide a mechanism for participating counties to opt out of the LIRAP. By providing a mechanism for participating counties to opt out of the LIRAP, this rulemaking creates a more comprehensive program in accord with the TCEQ's statutory obligation to create and implement the LIRAP.

Texas Government Code, §2007.003(b)(4) provides that Texas Government Code, Chapter 2007 does not apply to this rulemaking because it is an action reasonably taken to fulfill an obligation mandated by state law. THSC, Chapter 382 requires the commission to establish and authorize the commissioners court of a participating county to implement a LIRAP subject to agency oversight that may include reasonable, periodic commission audits. Consequently, this rulemaking meets the exemption criteria in Texas Government Code, §2007.003(b)(4).

Nevertheless, the commission further evaluated these adopted rules and performed an assessment of whether these rules constitute a "taking" under Texas Government Code, Chapter 2007. Promulgation and enforcement of these rules would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject regulations do not affect a landowner's rights in private real property because this rulemaking does not burden (constitutionally), nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulations. These adopted rules create a voluntary program for counties in the state to participate in and opt out of the LIRAP.

In addition, because the subject regulations do not provide more stringent requirements they do not burden, restrict, or limit an owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulations. Therefore, these adopted rules do not constitute a taking under the Texas Government Code, Chapter 2007. For these reasons, Texas Government Code, Chapter 2007 does not apply to this rulemaking.

Consistency with the Coastal Management Program

The commission reviewed this rulemaking and found that it is identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(4) relating to rules subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies of the CMP be considered during the rulemaking process.

The commission reviewed this rulemaking for consistency with the CMP goals and policies in accordance with the regulations of the Coastal Coordination Advisory Committee and determined that the rulemaking is editorial and procedural in nature and will have no substantive effect on commission actions subject to the CMP and therefore, is consistent with CMP goals and policies.

The commission invited public comment regarding the consistency with the CMP during the public comment period, and none were received.

Public Comment

The comment period was from December 5, 2014 through January 9, 2015. The commission offered a public hearing on January 6, 2015, but it was not opened because no one signed up to provide oral testimony. The commission received written comments from the North Central Texas Council of Governments (NCTCOG) and the Transportation and Natural Resources Department of Travis County (Travis County). In general, both commenters supported this rulemaking; however, NCTCOG recommended changes related to the distribution of funds and recordkeeping and auditing requirements.

Response to Comments

Comment

Travis County supported the proposed rulemaking and added that it will benefit participating counties to have a formal procedure for opting out of the LIRAP that includes removing the LIRAP fee.

Response

The commission appreciates Travis County's support of this rulemaking and agrees that having a formal procedure to opt out of the LIRAP will benefit the counties that participate in the program.

Comment

NCTCOG agreed that counties opting out of the LIRAP should have options and commented that those provided in this rulemaking provide flexibility when it comes to spending allocated funds.

Response

The commission appreciates NCTCOG's comment and agrees that a county opting out of the program should have options with regard to the use of allocated LIRAP funds. The commission's staff will work closely with each opt-out county to help the county spend allocated LIRAP funds by the chosen LIRAP opt-out effective date.

Comment

NCTCOG commented that due to an agreement among the participating DFW counties to share LIRAP funds, which is facilitated by NCTCOG, it would be complicated to require an opt-out county to return unspent allocations to the TCEQ upon a county's LIRAP opt-out effective date. NCTCOG recommended that the TCEQ amend its proposal to allow the redistribution of an opt-out county's unspent allocations to other participating counties within the region.

Response

The commission has amended proposed §114.64(g)(3) to specify that unspent allocations will be returned to the commission not more than 90 days after a county's LIRAP opt-out effective date unless there is an official inter-county elective agreement that the opt-out county shares allocated LIRAP funds with other participating counties in the same region. If there is an inter-county elective agreement, then not more than 90 days after a county's LIRAP opt-out effective date, the portion of LIRAP allocations that is shared and unspent as of the LIRAP opt-out effective date will be redistributed among the remaining participating counties that are part of the agreement.

Comment

NCTCOG recommended that the TCEQ develop a process to allow opt-out counties to spend all collected funds, appropriated and otherwise. NCTCOG commented that LIRAP fees are currently being collected in participating counties at a higher rate than what is appropriated by the legislature and that there is a large surplus of unappropriated funds. NCTCOG added that opt-out counties should be able to exhaust all collected funds, even after the LIRAP opt-out effective date.

Response

The commission has not made the suggested change to the rule. The LIRAP is a voluntary program, and a participating county may choose to opt out at its discretion. The opt-out process established in this rulemaking offers an opt-out county the choice of extending participation in the program beyond the date upon which the LIRAP fee is no longer collected, the LIRAP fee termination date. This allows the county to spend LIRAP grant funds that have been appropriated by the legislature and allocated by the commission. The commission only has the authority to allocate funds appropriated by the legislature to participating counties or an area specified by the legislature. Any future appropriations are unknown and are dependent upon the legislature, which appropriates funding for the LIRAP to the commission during each biennial session from Clean Air Account 151. Clean Air Account 151 is used to safeguard the air resources of the state, and LIRAP fees from vehicle owners in each participating county are deposited into the account as part of a county's participation in the program. LIRAP appropriations from Clean Air Account 151 are not identified by revenue source and county, and as such, it would not be possible to identify future LIRAP appropriations as corresponding to a county that has opted out of the program without additional statutory or appropriations direction.

Comment

NCTCOG recommended that the TCEQ alert all counties of any modifications to the LIRAP resulting from legislative action.

Response

The LIRAP has been modified by legislative action four times since the 77th Texas Legislature enacted HB 2134 in 2001. The commission has and will continue to notify counties of changes to the LIRAP that result from legislative action.

Comment

NCTCOG supported the amendment to §114.70(c) and (d) that will maintain program-related recordkeeping and auditing requirements related to an opt-out county after that county's opt-out effective date. NCTCOG recommended that the TCEQ add automobile dealerships to the list of entities that must comply with these requirements.

Response

The commission appreciates NCTCOG's support of the amendment to §114.70(c) and (d). However, the commission has not made the suggested change. The commission did not propose to revise §114.70 to require automobile dealerships to comply with program-related recordkeeping and auditing requirements. Adding automobile dealerships would impose new requirements that were not made available for public review and comment.

Furthermore, the commission does not consider it necessary at this time to make automobile dealerships subject to LIRAP-related recordkeeping and auditing requirements. One of the LIRAP's main objectives is to repair or remove older, polluting vehicles from roadways in counties where vehicle emissions inspections are conducted. Participating automobile dealerships facilitate the purchase of replacement vehicles by eligible applicants in exchange for those applicants' retired vehicles. Under the program, replacement vehicles are partially paid for with vouchers representing DACM grant funds. Dealerships transfer retired vehicles to participating dismantlers and return the vouchers and retired vehicle information to the program administrator for reimbursement. Participating dismantlers and program administrators are subject to §114.70 requirements. Dismantlers provide proof that retired vehicles have been destroyed, and program administrators maintain records for the entire DACM process.

Comment

NCTCOG agreed that the opt-out time frame was reasonable based on the various processes that must be undertaken by the TCEQ, DMV, and DPS.

Response

The commission appreciates NCTCOG's assessment that the LIRAP fee termination process, including the time frame, is reasonable.

Comment

NCTCOG was disappointed that the TCEQ did not hold a public hearing in the DFW region since the rulemaking was initiated by Collin County's request to opt out of LIRAP.

Response

While the commission appreciates that Collin County made the original request for opt-out that prompted this rulemaking, the commission must also balance both resource availability and the necessity for holding public hearings in various areas of the state. For rules that apply statewide, the commission has regularly held public hearings in Austin or in Austin and other parts of the state.

SUBCHAPTER A. DEFINITIONS

30 TAC §114.2, §114.7

Statutory Authority

The amendments are adopted under Texas Water Code (TWC), §5.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; TWC, §5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The amendments are also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; THSC, §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; and THSC, §382.012, concerning the State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. Additionally, the amendments are adopted under THSC, §382.209, concerning the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), that authorizes the commission and the Public Safety Commission to adopt rules implementing the LIRAP; and THSC, §382.210, concerning Implementation Guidelines and Requirements for the LIRAP, that authorizes the commission to adopt rules creating guidelines to assist participating counties in implementing the LIRAP.

The adopted amendments implement THSC, §§382.002, 382.011, 382.012, 382.017, 382.209, and 382.210.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 1, 2015.

TRD-201501527

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: May 21, 2015

Proposal publication date: December 5, 2014

For further information, please call: (512) 239-6812

SUBCHAPTER C. VEHICLE INSPECTION AND MAINTENANCE; LOW INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND ACCELERATED VEHICLE RETIREMENT PROGRAM; AND EARLY ACTION COMPACT COUNTIES

DIVISION 1. VEHICLE INSPECTION AND MAINTENANCE

30 TAC §114.53

Statutory Authority

The amendment is adopted under Texas Water Code (TWC), §5.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; TWC, §5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The amendment is also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; THSC, §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; and THSC, §382.012, concerning the State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. Additionally, the amendment is adopted under THSC, §382.209, concerning the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), that authorizes the commission and the Public Safety Commission to adopt rules implementing the LIRAP; and THSC, §382.210, concerning Implementation Guidelines and Requirements for the LIRAP, that authorizes the commission to adopt rules creating guidelines to assist participating counties in implementing the LIRAP.

The adopted amendment implements THSC, §§382.002, 382.011, 382.012, 382.017, 382.209, and 382.210.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 1, 2015.

TRD-201501528

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: May 21, 2015

Proposal publication date: December 5, 2014

For further information, please call: (512) 239-6812

DIVISION 2. LOW INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND ACCELERATED VEHICLE RETIREMENT PROGRAM

30 TAC §§114.60, 114.62, 114.64, 114.70

Statutory Authority

The amendments are adopted under Texas Water Code (TWC), §5.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; TWC, §5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act (TCAA). The amendments are also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; THSC, §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; and THSC, §382.012, concerning the State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. Additionally, the amendments are adopted under THSC, §382.209, concerning the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), that authorizes the commission and the Public Safety Commission to adopt rules implementing the LIRAP; and THSC, §382.210, concerning Implementation Guidelines and Requirements for the LIRAP, that authorizes the commission to adopt rules creating guidelines to assist participating counties in implementing the LIRAP.

The adopted amendments implement THSC, §§382.002, 382.011, 382.012, 382.017, 382.209, and 382.210.

§114.64.LIRAP Requirements.

(a) Implementation. Participation in the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP) is voluntary. An affected county may choose to participate in the program at its discretion. Upon receiving a written request to participate in the LIRAP by a county commissioners court, the executive director shall authorize the implementation of a LIRAP in the requesting county. The executive director and county shall enter into a grant contract for the implementation of the LIRAP.

(1) The grant contract must provide conditions, requirements, and projected funding allowances for the implementation of the LIRAP.

(2) A participating county may contract with an entity approved by the executive director for services necessary to implement the LIRAP. A participating county or its designated entity shall demonstrate to the executive director that, at a minimum, the county or its designated entity has provided for appropriate measures for determining applicant eligibility and repair effectiveness and ensuring against fraud.

(3) The participating county shall remain the contracted entity even if the county contracts with another county or another entity approved by the executive director to administer the LIRAP.

(b) Repair and retrofit assistance. A LIRAP must provide for monetary or other compensatory assistance to eligible vehicle owners for repairs directly related to bringing certain vehicles that have failed a required emissions test into compliance with emissions requirements or for installing retrofit equipment on vehicles that have failed a required emissions test, if practically and economically feasible, in lieu of or in combination with repairs performed to bring a vehicle into compliance with emissions requirements. Vehicles under the LIRAP must be repaired or retrofitted at a recognized emissions repair facility. To determine eligibility, the participating county or its designated entity shall make applications available for LIRAP participants. The application, at a minimum, must require the vehicle owner to demonstrate that:

(1) the vehicle has failed a vehicle emissions test within 30 days of application submittal;

(2) the vehicle can be driven under its own power to the emissions inspection station or vehicle retirement facility;

(3) the vehicle is currently registered in and has been registered in the participating program county for at least 12 of the 15 months immediately preceding the application for assistance;

(4) the vehicle has passed the safety portion of the Texas Department of Public Safety (DPS) motor vehicle safety and emissions inspection as recorded in the Vehicle Inspection Report (VIR), or provide assurance that actions will be taken to bring the vehicle into compliance with safety requirements;

(5) the vehicle owner's net family income is at or below 300% of the federal poverty level; and

(6) any other requirements of the participating county or the executive director are met.

(c) Accelerated vehicle retirement. A LIRAP must provide monetary or other compensatory assistance to eligible vehicle owners to be used toward the purchase of a replacement vehicle.

(1) To determine eligibility, the participating county or its designated entity shall make applications available for LIRAP participants. The application, at a minimum, must require the vehicle owner to demonstrate that:

(A) the vehicle meets the requirements under subsection (b)(1) - (3) and (5) of this section;

(B) the vehicle has passed a DPS motor vehicle safety or safety and emissions inspection within 15 months prior to application submittal; and

(C) any other requirements of the participating county or the executive director are met.

(2) Eligible vehicle owners of pre-1996 model year vehicles that pass the required United States Environmental Protection Agency (EPA) Start-Up Acceleration Simulation Mode (ASM) standards emissions test, but would have failed the EPA Final ASM standards emissions test, or some other criteria determined by the commission, may be eligible for accelerated vehicle retirement and replacement compensation under this section.

(3) Notwithstanding the vehicle requirement provided under subsection (b)(1) of this section, an eligible vehicle owner of a vehicle that is gasoline powered and is at least 10 years old as determined from the current calendar year (i.e., 2010 minus 10 years equals 2000) and meets the requirements under subsection (b)(2), (3), and (5) of this section, may be eligible for accelerated vehicle retirement and compensation.

(4) Replacement vehicles must:

(A) be in a class or category of vehicles that has been certified to meet federal Tier 2, Bin 5 or cleaner Bin certification under 40 Code of Federal Regulations §86.1811-04, as published in the February 10, 2000, issue of the Federal Register (65 FR 6698);

(B) have a gross vehicle weight rating of less than 10,000 pounds;

(C) have an odometer reading of not more than 70,000 miles;

(D) be a vehicle, the total cost of which does not exceed $35,000 and up to $45,000 for hybrid, electric, or natural gas vehicles, or vehicles certified as Tier 2 Bin 3 or cleaner Bin certification under 40 Code of Federal Regulations §86.1811-04, as published in the February 10, 2000, issue of the Federal Register (65 FR 6698); and

(E) have passed a DPS motor vehicle safety inspection or safety and emissions inspection within the 15-month period before the application is submitted.

(d) Compensation. The participating county shall determine eligibility and approve or deny the application promptly. If the requirements of subsection (b) or (c) of this section are met and based on available funding, the county shall authorize monetary or other compensations to the eligible vehicle owner.

(1) Compensations must be:

(A) no more than $600 and no less than $30 per vehicle to be used for emission-related repairs or retrofits performed at recognized emissions repair facilities, including diagnostics tests performed on the vehicle; or

(B) based on vehicle type and model year of a replacement vehicle for the accelerated retirement of a vehicle meeting the requirements under this subsection. Only one retirement compensation can be used toward one replacement vehicle annually per applicant. The maximum amount toward a replacement vehicle must not exceed:

(i) $3,000 for a replacement car of the current model year or previous three model years, except as provided by clause (iii) of this subparagraph;

(ii) $3,000 for a replacement truck of the current model year or the previous two model years, except as provided by clause (iii) of this subparagraph;

(iii) $3,500 for a replacement hybrid, electric, natural gas, and federal Tier 2 Bin 3 or cleaner Bin certification under 40 Code of Federal Regulations §86.1811-04, as published in the February 10, 2000, issue of the Federal Register (65 FR 6698) vehicle of the current model year or the three previous model years.

(2) Vehicle owners shall be responsible for paying the first $30 of emission-related repairs or retrofit costs that may include diagnostics tests performed on the vehicle.

(3) For accelerated vehicle retirement, provided that the compensation levels in paragraph (1)(B) of this subsection are met and minimum eligibility requirements under subsection (c) of this section are met, a participating county may set a specific level of compensation or implement a level of compensation schedule that allows flexibility. The following criteria may be used for determining the amount of financial assistance:

(A) model year of the vehicle;

(B) miles registered on the vehicle's odometer;

(C) fair market value of the vehicle;

(D) estimated cost of emission-related repairs necessary to bring the vehicle into compliance with emission standards;

(E) amount of money the vehicle owner has already spent to bring the vehicle into compliance, excluding the cost of the vehicle emissions inspection; and

(F) vehicle owner's income.

(e) Reimbursement for repairs and retrofits. A participating county shall reimburse the appropriate recognized emissions repair facility for approved repairs and retrofits within 30 calendar days of receiving an invoice that meets the requirements of the county or designated entity. Repaired or retrofitted vehicles must pass a DPS safety and emissions inspection before the recognized emissions repair facility is reimbursed. In the event that the vehicle does not pass the emissions retest after diagnosed repairs are performed, the participating county has the discretion, on a case-by-case basis, to make payment for diagnosed emissions repair work performed.

(f) Reimbursements for replacements. A participating county shall ensure that funds are transferred to a participating automobile dealership no later than 10 business days after the county receives proof of the sale, proof of transfer to a dismantler, and any administrative documents that meet the requirements of the county or designated entity. A list of all administrative documents must be included in the agreements that are entered into by the county or designated entity and the participating automobile dealerships.

(1) A participating county shall provide an electronic means for distributing replacement funds to a participating automobile dealership once all program criteria have been met. The replacement funds may be used as a down payment toward the purchase of a replacement vehicle. Participating automobile dealers shall be located in the State of Texas. Participation in the LIRAP by an automobile dealer is voluntary.

(2) Participating counties shall develop a document for confirming a person's eligibility for purchasing a replacement vehicle and for tracking such purchase.

(A) The document must include at a minimum, the full name of applicant, the vehicle identification number of the retired vehicle, expiration date of the document, the program administrator's contact information, and the amount of money available to the participating vehicle owner.

(B) The document must be presented to a participating dealer by the person seeking to purchase a replacement vehicle before entering into negotiations for a replacement vehicle.

(C) A participating dealer who relies on the document issued by the participating county has no duty to confirm the eligibility of the person purchasing a replacement vehicle in the manner provided by this section.

(g) Opting out of the LIRAP. Participation in the LIRAP is voluntary. A participating county may opt out of the program. Procedures to release a participating county from the LIRAP shall be initiated upon the receipt of a written request to the executive director by the county commissioners court in a participating county.

(1) A written request to opt out of the LIRAP shall request release from the LIRAP fee as defined in §114.7 of this title (relating to Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program Definitions) and the grant contract established in subsection (a) of this section. The written request shall include one of the following possible LIRAP opt-out effective dates as defined in §114.7 of this title:

(A) the LIRAP fee termination effective date as defined in §114.7 of this title; or

(B) the last day of the legislative biennium in which the LIRAP fee termination effective date as defined in §114.7 of this title occurred.

(2) Upon receipt of a written request to be released from participation in the LIRAP, the executive director shall notify, in writing, with a copy sent to the requesting county, the Texas Department of Motor Vehicles (DMV), DPS, and the Legislative Budget Board of Texas that the LIRAP fee should no longer be collected for vehicles undergoing inspection and registration in the affected county.

(3) A county opting out of the LIRAP remains a participating county until the LIRAP opt-out effective date as defined in §114.7 of this title, on which date the county is no longer subject to the LIRAP fee, and the grant contract established in subsection (a) of this section is ended. Not more than 90 days after a county's LIRAP opt-out effective date, the unspent balance of allocated LIRAP funds for that county will be returned to the commission unless the county opting out has entered into an official inter-county elective agreement with other participating counties in the same region to share allocated LIRAP funds. If the county opting out has entered into an official inter-county elective agreement with other participating counties in the same region to share allocated LIRAP funds, then the portion of LIRAP allocations that is shared and unspent as of the LIRAP opt-out effective date will be redistributed among the remaining participating counties that are part of that agreement. This redistribution of funds will occur not more than 90 days after a county's LIRAP opt-out effective date.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 1, 2015.

TRD-201501529

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: May 21, 2015

Proposal publication date: December 5, 2014

For further information, please call: (512) 239-6812

DIVISION 3. EARLY ACTION COMPACT COUNTIES

30 TAC §114.87

Statutory Authority

The amendment is adopted under Texas Water Code (TWC), §5.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under the TWC; TWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; TWC, §5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The amendment is also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; THSC, §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; and THSC, §382.012, concerning the State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. Additionally, the amendment is adopted under THSC, §382.209, concerning the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), that authorizes the commission and the Public Safety Commission to adopt rules implementing the LIRAP; and THSC, §382.210, concerning Implementation Guidelines and Requirements for the LIRAP, that authorizes the commission to adopt rules creating guidelines to assist participating counties in implementing the LIRAP.

The adopted amendment implements THSC, §§382.002, 382.011, 382.012, 382.017, 382.209, and 382.210.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 1, 2015.

TRD-201501530

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: May 21, 2015

Proposal publication date: December 5, 2014

For further information, please call: (512) 239-6812