87R19563 JRR-F     By: Canales H.B. No. 2221     Substitute the following for H.B. No. 2221:     By:  Paddie C.S.H.B. No. 2221       A BILL TO BE ENTITLED   AN ACT   relating to mobile source emissions reductions and transportation   electrification; authorizing a surcharge.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle F, Title 4, Government Code, is amended   by adding Chapter 490I to read as follows:   CHAPTER 490I. TEXAS TRANSPORTATION ELECTRIFICATION COUNCIL          Sec. 490I.001.  DEFINITION. In this chapter, "council"   means the Texas Transportation Electrification Council established   by this chapter.          Sec. 490I.002.  ESTABLISHMENT; COMPOSITION. (a) The Texas   Transportation Electrification Council is established.          (b)  The council is composed of the chair of, or if not   applicable, the administrative head of or a senior-level designee   from, each of the following entities:                (1)  the Public Utility Commission of Texas;                (2)  the Electric Reliability Council of Texas;                (3)  the Texas Commission on Environmental Quality;                (4)  the State Energy Conservation Office;                (5)  the Texas Department of Licensing and Regulation;                (6)  the Texas Department of Transportation;                (7)  the Texas Department of Motor Vehicles;                (8)  the Texas Department of Housing and Community   Affairs;                (9)  the Texas State Affordable Housing Corporation;                (10)  the Texas Division of Emergency Management; and                (11)  the Texas Economic Development and Tourism   Office.          Sec. 490I.003.  PRESIDING OFFICER; MEETINGS. (a) The   council annually shall elect one member to serve as the presiding   officer of the council.          (a-1)  The executive director of the Texas Department of   Transportation shall serve as the initial presiding officer of the   council. This subsection expires September 1, 2023.          (b)  The council shall hold at least four public meetings   each year.          Sec. 490I.004.  ADMINISTRATIVE ATTACHMENT; FUNDING. (a)   The council is administratively attached to the Texas Department of   Transportation.          (b)  The council shall be funded using existing funds of the   Texas Department of Transportation.          Sec. 490I.0045.  ELECTRIC VEHICLE CHARGING INFRASTRUCTURE   ASSESSMENT. (a) Not later than March 1, 2022, the council shall   prepare an assessment of existing and planned public electric   vehicle charging infrastructure and associated technologies in   this state using existing databases. The assessment must include   the number and types of electric vehicle chargers at each location.          (b)  The council shall use the assessment in developing the   plan required by Section 490I.005.          (c)  This section expires September 1, 2023.          Sec. 490I.005.  ELECTRIC VEHICLE CHARGING INFRASTRUCTURE   PLAN. (a) The council shall:                (1)  develop a comprehensive plan for the development   of public electric vehicle charging infrastructure and associated   technologies in this state through the year 2040; and                (2)  update the plan biennially.          (b)  The plan must:                (1)  include a phased implementation of the plan, in   biennial increments, through the year 2030;                (2)  identify areas in this state for which additional   public electric vehicle charging infrastructure is needed to ensure   that the vehicle choice of residents of this state is not   constrained by a lack of access to adequate public electric vehicle   charging infrastructure;                (3)  provide for sufficient public electric vehicle   charging infrastructure to meet and enable future demand for   electric vehicles in this state that:                      (A)  ensures that adequate public electric   vehicle charging infrastructure is available:                            (i)  with sufficient frequency and capacity   to enable users of electric vehicles of various classes to travel   border to border and community to community on interstate highways   and other major roadways in this state;                            (ii)  along evacuation routes and at highway   rest stops in this state; and                            (iii)  in rural communities, multifamily and   underserved communities, town centers, commercial and retail   areas, parks and other publicly owned lands, and other areas that   are in close proximity to where local electric vehicle users live or   work;                      (B)  is safe, dependable, serviceable, and   operational;                      (C)  maximizes the benefits associated with   transportation electrification;                      (D)  enhances commerce by ensuring an adequate   distribution of public electric vehicle charging infrastructure is   available throughout the state to stimulate lower cost and lower   emissions from heavy duty trucking and delivery services;                      (E)  ensures adequate public electric vehicle   charging capacity to facilitate commerce:                            (i)  at or near the borders of this state;                            (ii)  in or near airports, rail yards, and   seaports; and                            (iii)  at warehouse complexes and truck   stops;                      (F)  enhances accessibility of tourist areas to   electric vehicle users; and                      (G)  covers any other areas identified by the   council;                (4)  stimulate competition, innovation, consumer   choices in public electric vehicle charging and related   infrastructure and services, and encourage private capital   investment;                (5)  specify the number and types of electric vehicle   chargers per general location that are needed to meet the   requirements prescribed by Subdivisions (2), (3), and (4);                (6)  examine vehicle and charging infrastructure   changes necessary to provide demand response functions and two-way   electricity flow capability in order to allow vehicle to grid   integration for cost savings, grid reliability, and resiliency; and                (7)  provide for electric transportation corridors in   and along Texas Department of Transportation rights-of-way that   include the infrastructure needed for vehicle electrification,   such as:                      (A)  a greatly expanded global positioning system   network for vehicle location accuracy;                      (B)  advanced sensor networks for traffic;                      (C)  intelligent transportation services;                      (D)  connected vehicle applications; and                      (E)  improvements to energy infrastructure needed   to provide adequate vehicle charging.          (c)  In developing and updating the plan, the council:                (1)  shall use, to the extent practicable, publicly   available electric vehicle projections and models based on industry   standards to determine, for each year, the percentage and number of   electric vehicles by vehicle class that are expected on roadways in   this state and the number of electric vehicle chargers that are   needed to ensure that there is comprehensive and adequate access to   public electric vehicle charging infrastructure in this state; and                (2)  may rely on scenarios provided by the Electric   Reliability Council of Texas or other information from appropriate   sources for the percentage and number of electric vehicles by   vehicle class on roadways in this state by year.          Sec. 490I.006.  STATE AGENCY POLICY RECOMMENDATIONS. The   council shall develop policy recommendations that state agencies   may adopt to encourage the development of an adequate network of   public electric vehicle charging infrastructure and associated   technologies to meet the future electrified transportation needs in   this state through the year 2030.          Sec. 490I.007.  STAKEHOLDER INPUT. In performing the   council's duties under this chapter, the council shall seek advice   and input from:                (1)  privately owned electric utilities;                (2)  municipally owned electric utilities;                (3)  electric cooperatives;                (4)  state and local transportation and transit   agencies;                (5)  port authorities;                (6)  warehousing and logistics centers;                (7)  electric vehicle charging infrastructure   companies;                (8)  environmental groups;                (9)  consumer advocates;                (10)  motor vehicle manufacturers;                (11)  nonprofit organizations developing electric   vehicle policy;                (12)  nonprofit organizations representing food or   motor fuel providers;                (13)  apartment associations;                (14)  low-income community development corporations;                (15)  nonprofit organizations that represent   utilities, electric vehicle manufacturers, and charging companies;   and                (16)  interested members of the public.          Sec. 490I.008.  AUTHORITY TO CONTRACT AND CONSULT WITH   CERTAIN PERSONS. In performing the council's duties under this   chapter, the council may:                (1)  contract with experts, academic scholars, and   other appropriate professionals; and                (2)  consult with the Texas A&M Transportation   Institute and institutions of higher education.          Sec. 490I.0085.  INITIAL REPORT. (a) Not later than   December 1, 2022, the council shall prepare and submit to the   governor, the lieutenant governor, each member of the legislature,   and relevant state and federal agencies a written report of the   council's findings that includes:                (1)  the assessment prepared under Section 490I.0045;                (2)  the plan developed under Section 490I.005,   including the phased implementation of the plan required by   Subsection (b)(1) of that section; and                (3)  the policy recommendations developed under   Section 490I.006.          (b)  This section expires September 1, 2025.          Sec. 490I.009.  BIENNIAL REPORT. Not later than December 1   of each even-numbered year, the council shall prepare and submit to   the governor, the lieutenant governor, each member of the   legislature, and relevant state and federal agencies a written   report that includes:                (1)  a summary of the progress made on the   implementation of the plan developed under Section 490I.005;                (2)  the biennial update to the plan required under   Section 490I.005(a)(2); and                (3)  any updates to the policy recommendations   developed under Section 490I.006.          SECTION 2.  Section 386.001, Health and Safety Code, is   amended by adding Subdivision (4) to read as follows:                (4)  "Federal funds" means all assistance provided to   the commission from the federal government in the form of grants,   contracts, loans, loan guarantees, property, cooperative   agreements, interest subsidies, insurance, direct appropriations,   or any other method of disbursement.          SECTION 3.  Section 386.154, Health and Safety Code, is   amended by amending Subsection (d) and adding Subsections (f), (g),   and (h) to read as follows:          (d)  A new light-duty motor vehicle powered by an electric   drive is eligible for a $2,500 incentive if the vehicle:                (1)  has four wheels;                (2)  was manufactured for use primarily on public   streets, roads, and highways;                (3)  has not been modified from the original   manufacturer's specifications;                (4)  has a maximum speed capability of at least 55 miles   per hour;                (5)  is propelled to a significant extent by an   electric motor that draws electricity from a hydrogen fuel cell or   from a battery that:                      (A)  has a capacity of not less than four kilowatt   hours; and                      (B)  is capable of being recharged from an   external source of electricity; [and]                (6)  is not designed, used, or maintained primarily to   transport property; and                (7)  was acquired on or after September 1, 2013, or a   later date as established by the commission, by the person applying   for the incentive under this subsection and for use or lease by that   person and not for resale.          (f)  A new light-duty motor vehicle powered by an electric   drive is eligible for a $4,000 incentive if the vehicle:                (1)  satisfies the requirements of Subsections   (d)(1)-(5);                (2)  is designed, used, or maintained primarily to   transport property; and                (3)  was acquired on or after September 1, 2021, or a   later date as established by the commission, by the person applying   for the incentive under this subsection and for use by that person   and not for resale.          (g)  The incentive under Subsection (f) is limited to 2,000   vehicles for each state fiscal biennium.          (h)  Notwithstanding Subsections (c), (e), and (g) and   subject to Section 386.252(a)(11), at the beginning of the second   state fiscal year of the biennium, the commission shall adjust the   initial vehicle limitations provided under Subsections (c), (e),   and (g) based on demand for incentives under this section during the   preceding state fiscal year.          SECTION 4.  Section 386.181(b), Health and Safety Code, is   amended to read as follows:          (b)  The commission may include more specific definitions in   the rules or guidelines developed to implement the programs   [program] established by this subchapter in order to reduce   emissions in and around seaports in a nonattainment area.          SECTION 5.  Subchapter D-1, Chapter 386, Health and Safety   Code, is amended by adding Section 386.184 to read as follows:          Sec. 386.184.  GRANT PROGRAM FOR ALTERNATIVELY FUELED   DRAYAGE TRUCK OR CARGO HANDLING EQUIPMENT INFRASTRUCTURE PROJECTS.   (a)  The commission shall establish and administer a grant program   to encourage the purchase, construction, and installation of   infrastructure needed to support the use of drayage trucks or cargo   handling equipment that are powered by an alternative fuel, as   defined by Section 393.001.          (b)  A grant awarded under the program established by this   section may not exceed more than 80 percent of the purchase,   construction, and installation costs of the infrastructure   project, provided that the commission may establish a reasonable   maximum amount of a grant awarded per infrastructure project as   needed.          SECTION 6.  Sections 386.250(b) and (c), Health and Safety   Code, as effective September 1, 2021, are amended to read as   follows:          (b)  The fund consists of:                (1)  the amount of money deposited to the credit of the   fund under:                      (A)  Section 386.056;                      (B)  Sections 151.0515 and 152.0215, Tax Code; and                      (C)  Sections 501.138, 502.358, and 548.5055,   Transportation Code; [and]                (2)  grant money recaptured under Section 386.111(d)   and Chapter 391; and                (3)  federal funds deposited to the credit of the fund.          (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 Texas emissions   reduction plan account. This subsection does not apply to federal   funds deposited to the credit of the fund.          SECTION 7.  Section 386.252, Health and Safety Code, as   effective September 1, 2021, is amended by amending Subsection (a)   and adding Subsection (i) 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), 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 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)  eight percent [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.          (i)  Notwithstanding any other law, federal funds deposited   to the credit of the fund may be used only as provided by the terms   of the applicable federal funds agreement.          SECTION 8.  Section 393.006(a), Health and Safety Code, is   amended to read as follows:          (a)  Grants awarded under this chapter for a facility to   provide alternative fuels other than natural gas may not exceed   [the lesser of:                [(1)]  50 percent of the sum of the actual eligible   costs incurred by the grant recipient within deadlines established   by the commission[; or                [(2)  $600,000].          SECTION 9.  Subtitle A, Title 14, Occupations Code, is   amended by adding Chapter 2311 to read as follows:   CHAPTER 2311. ELECTRIC VEHICLE METERING          Sec. 2311.001.  DEFINITIONS. In this chapter:                (1)  "Commission" means the Texas Commission of   Licensing and Regulation.                (2)  "Metering device" means a commercial device used   to measure electric energy transferred by electric vehicle charging   stations and compute the charge for the energy.          Sec. 2311.002.  RULES. (a) The commission by rule shall   establish:                (1)  specifications, tolerances, and other technical   requirements for metering devices used in electric vehicle charging   stations used in commercial transactions; and                (2)  standards for electric vehicle charging services   that ensure the accuracy of measurements, enhance consumer   protections, and promote fair competition.          (b)  In adopting rules under Subsection (a), the commission   shall consider recommendations from relevant state and federal   agencies and stakeholders.          SECTION 10.  Subchapter G, Chapter 502, Transportation Code,   is amended by adding Section 502.360 to read as follows:          Sec. 502.360.  ELECTRIC VEHICLE SURCHARGE. (a) In this   section, "electric vehicle" means a motor vehicle that uses   electricity as its only source of motor power.          (b)  In addition to the applicable registration fee charged   under Subchapter F, at the time of application for registration or   renewal of registration of an electric vehicle, the applicant shall   pay a surcharge in an amount of $100.          (c)  Surcharges collected under this section shall be   deposited to the credit of the state highway fund.          (c-1)  Notwithstanding Subsection (c), $40 of each surcharge   collected under this section shall be deposited to the credit of the   general revenue fund and may be used only for the operations of the   Texas Transportation Electrification Council under Chapter 490I,   Government Code. This subsection expires September 1, 2025.          (d)  The board shall adopt rules necessary to administer   registration for an electric vehicle under this section.          SECTION 11.  Section 31.002, Utilities Code, is amended by   adding Subdivision (3-a) and amending Subdivisions (6) and (17) to   read as follows:                (3-a)  "Alternatively fueled vehicle" has the meaning   assigned by Section 502.004, Transportation Code.                (6)  "Electric utility" means a person or river   authority that owns or operates for compensation in this state   equipment or facilities to produce, generate, transmit,   distribute, sell, or furnish electricity in this state. The term   includes a lessee, trustee, or receiver of an electric utility and a   recreational vehicle park owner who does not comply with Subchapter   C, Chapter 184, with regard to the metered sale of electricity at   the recreational vehicle park. The term does not include:                      (A)  a municipal corporation;                      (B)  a qualifying facility;                      (C)  a power generation company;                      (D)  an exempt wholesale generator;                      (E)  a power marketer;                      (F)  a corporation described by Section 32.053 to   the extent the corporation sells electricity exclusively at   wholesale and not to the ultimate consumer;                      (G)  an electric cooperative;                      (H)  a retail electric provider;                      (I)  this state or an agency of this state; or                      (J)  a person not otherwise an electric utility   who:                            (i)  furnishes an electric service or   commodity only to itself, its employees, or its tenants as an   incident of employment or tenancy, if that service or commodity is   not resold to or used by others;                            (ii)  owns or operates in this state   equipment or facilities to produce, generate, transmit,   distribute, sell, or furnish electric energy to an electric   utility, if the equipment or facilities are used primarily to   produce and generate electric energy for consumption by that   person; [or]                            (iii)  owns or operates in this state a   recreational vehicle park that provides metered electric service in   accordance with Subchapter C, Chapter 184; or                            (iv)  owns or operates equipment used solely   to provide electricity charging service for consumption by   alternatively fueled vehicles.                (17)  "Retail electric provider" means a person that   sells electric energy to retail customers in this state. A retail   electric provider may not own or operate generation assets. The   term does not include a person not otherwise a retail electric   provider who owns or operates equipment used solely to provide   electricity charging service for consumption by alternatively   fueled vehicles.          SECTION 12.  Subchapter A, Chapter 31, Utilities Code, is   amended by adding Section 31.0021 to read as follows:          Sec. 31.0021.  CHARGING SERVICE. The commission by rule may   exempt from the definition of "electric utility" or "retail   electric provider" under Section 31.002 a provider who owns or   operates equipment used solely to provide electricity charging   service for a mode of transportation.          SECTION 13.  Section 37.001(3), Utilities Code, is amended   to read as follows:                (3)  "Retail electric utility" means a person,   political subdivision, electric cooperative, or agency that   operates, maintains, or controls in this state a facility to   provide retail electric utility service. The term does not include   a corporation described by Section 32.053 to the extent that the   corporation sells electricity exclusively at wholesale and not to   the ultimate consumer. A qualifying cogenerator that sells   electric energy at retail to the sole purchaser of the   cogenerator's thermal output under Sections 35.061 and 36.007 is   not for that reason considered to be a retail electric utility. The   owner or operator of a qualifying cogeneration facility who was   issued the necessary environmental permits from the Texas Natural   Resource Conservation Commission after January 1, 1998, and who   commenced construction of such qualifying facility before July 1,   1998, may provide electricity to the purchasers of the thermal   output of that qualifying facility and shall not for that reason be   considered an electric utility or a retail electric utility,   provided that the purchasers of the thermal output are owners of   manufacturing or process operation facilities that are located on a   site entirely owned before September, 1987, by one owner who   retained ownership after September, 1987, of some portion of the   facilities and that those facilities now share some integrated   operations, such as the provision of services and raw materials. A   person who owns or operates equipment used solely to provide   electricity charging service for consumption by alternatively   fueled vehicles is not for that reason considered to be a retail   electric utility.          SECTION 14.  Subchapter A, Chapter 37, Utilities Code, is   amended by adding Section 37.002 to read as follows:          Sec. 37.002.  CHARGING SERVICE. The commission may by rule   exempt from the definition of "retail electric utility" under   Section 37.001 a provider who owns or operates equipment used   solely to provide electricity charging service for a mode of   transportation.          SECTION 15.  (a) In this section:                (1)  "Commission" means the Texas Commission on   Environmental Quality.                (2)  "Vehicle" has the meaning assigned by Section   541.201, Transportation Code.                (3)  "Vehicle recycler" means a person engaged in the   business of acquiring, dismantling, or preparing for recycling six   or more end-of-life vehicles in a calendar year for the primary   purpose of reselling the vehicles' parts. The term includes a   salvage vehicle dealer licensed under Chapter 2302, Occupations   Code.          (b)  Using existing funds, the commission shall conduct a   study on policies pertaining to the recovery and recycling of   lithium-ion and other propulsion batteries sold with electric   vehicles in this state. The study must examine:                (1)  methods to ensure that as close to 100 percent as   possible of electric vehicle batteries in this state are reused or   recycled at end-of-life in a safe and cost-effective manner;                (2)  policy recommendations that reflect entire life   cycle considerations for electric vehicle batteries, including   opportunities and barriers to the reuse of electric vehicle   batteries as energy storage systems after a battery is removed from   a vehicle;                (3)  best management considerations for electric   vehicle batteries at end-of-life and the overall effect of   different management practices on the environment;                (4)  in-state and out-of-state options for the   recycling of electric vehicle batteries; and                (5)  future electric vehicle battery technologies.          (c)  Not later than January 1, 2022, the commission shall   establish and convene an advisory group to provide guidance and   direction to the commission for purposes of conducting the study   required by this section and making legislative recommendations   based on the study. The advisory group shall meet at least   quarterly.          (d)  The commission shall appoint to the advisory group at   least one member from each of the following:                (1)  a representative from the Texas Economic   Development and Tourism Office;                (2)  a representative from the Public Utility   Commission of Texas;                (3)  a manufacturer of electric vehicles;                (4)  an organization that represents one or more   vehicle manufacturers;                (5)  a nonprofit organization that represents   utilities, electric vehicle manufacturers, and charging companies;                (6)  an electronic waste recycler or an organization   that represents one or more electronic waste recyclers;                (7)  a vehicle repair dealer or an organization that   represents one or more vehicle repair dealers;                (8)  a vehicle recycler or an organization that   represents one or more vehicle recyclers;                (9)  a nationwide environmental organization that   researches waste reduction and recycling strategies;                (10)  a representative of the large-scale lithium-ion   and other energy storage technology industries;                (11)  an electric vehicle battery manufacturer; and                (12)  a standards-developing organization that has a   focus on automotive engineering.          (e)  In advising the commission under this section, the   advisory group shall consult with:                (1)  universities and research institutions that have   conducted research in the area of battery recycling;                (2)  manufacturers of electric and hybrid vehicles; and                (3)  the recycling industry.          (f)  Not later than December 1, 2022, the commission shall   prepare and submit to the governor, the lieutenant governor, and   each member of the legislature a written report that includes a   summary of the results of the study conducted under this section and   any legislative recommendations based on the study.          (g)  The advisory group is abolished and this section expires   January 1, 2023.          SECTION 16.  The Texas Transportation Electrification   Council shall submit its first report under Section 490I.009,   Government Code, as added by this Act, not later than December 1,   2024.          SECTION 17.  The changes in law made by this Act to Chapter   386, Health and Safety Code, 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 18.  Not later than December 1, 2024, the Texas   Commission of Licensing and Regulation shall adopt the rules   required by Section 2311.002, Occupations Code, as added by this   Act.          SECTION 19.  This Act takes effect September 1, 2021.