TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 20. STATEWIDE PROCUREMENT AND SUPPORT SERVICES

SUBCHAPTER D. SOCIO-ECONOMIC PROGRAM

DIVISION 2. ENVIRONMENT, ENERGY AND WATER EFFICIENCY, AND RENEWABLE ENERGY TECHNOLOGIES

The Comptroller of Public Accounts proposes the repeal of §20.306, concerning preferences. In a separate proposal, the comptroller proposes a new §20.306, concerning preferences. The new rule will be more comprehensive, separating statutory preferences into several categories, and providing specific guidance on when and how they apply. The repeal is necessary to enable a more comprehensive rule to be adopted that provides better guidance on application.

No legislation was enacted within the last four years that provides the statutory authority for the repeal.

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed repeal is in effect, the repeal: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed rule repeal would have no fiscal impact on the state government, units of local government, or individuals. The proposed repeal would benefit the public by facilitating the adoption of a new, comprehensive rule the comptroller intends to propose that would more clearly organize and clarify when and how statutory preferences apply in the procurement process. There would be no anticipated significant economic cost to the public. The proposed repeal would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal or information related to the cost, benefit, or effect of the proposal, including any applicable data, research or analysis, to Gerard MacCrossan P.O. Box 13528 Austin, Texas 78711 or to the email address: Gerard.MacCrossan@cpa.texas.gov. The comptroller must receive your comments or other information no later than 30 days from the date of publication of the repeal in the Texas Register.

A public hearing will be held to receive comments on the proposed amendments. There is no physical location for this meeting. The meeting will be held at 10:00 a.m., Central Time, on Tuesday, June 23, 2026. To access the online public meeting by web browser, please enter the following URL into your browser: https://txcpa.webex.com/txcpa/j.php?MTID=m40f87cd9e32600c619b8457e9a1f4fd5. To join the meeting by computer or cell phone using the Webex app, use the access code 2493 365 0910 and password SPDRULES. Persons interested in providing comments at the public hearing may contact Mr. Gerard MacCrossan, Comptroller of Public Accounts, at Gerard.MacCrossan@cpa.texas.gov or by calling (512) 463-4468 by June 22, 2026.

The repeal is proposed under Government Code, §2155.0012, and §2158.0012 which authorize the comptroller to adopt rules to efficiently and effectively administer Government Code, Chapter 2155, and Chapter 2158; and under Health and Safety Code, §361.991(e), and §361.965 (e) which authorize the comptroller to adopt rules to implement Health and Safety Code, §361.991, and §361.965.

This repeal implements Government Code, §§2155.0012, and 2158.0012.

§20.306. Preferences.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2026.

TRD-202602231

Don Neal

General Counsel, Operations and Support Legal Services

Comptroller of Public Accounts

Earliest possible date of adoption: July 12, 2026

For further information, please call: (512) 475-2220

DIVISION 2. ECONOMIC AND ENVIRONMENTAL PROCUREMENT PREFERENCES [~~ENVIRONMENT, ENERGY AND WATER EFFICIENCY, AND RENEWABLE ENERGY TECHNOLOGIES~~]

34 TAC §20.306, §20.307

The Comptroller of Public Accounts proposes a new §20.306, concerning preferences; and amendments to §20.307, concerning state agency procurements of recycled, remanufactured or environmentally sensitive commodities or services. The new §20.306, concerning preferences, will replace the current §20.306, concerning preferences, which the comptroller will propose for repeal in a separate proposal. In addition, the comptroller proposes to amend the title of 34 TAC Chapter 20, Subchapter D, Division 2, to "Economic and Environmental Procurement Preferences."

No legislation was enacted within the last four years that provides the statutory authority for the new section or for the amendments.

The comptroller amends the title of Division 2 to better represent its content. Division 2 includes geographical preferences, service-disabled veteran preferences, and others that are better described by the revised title.

New §20.306 replaces the current §20.306, concerning procurement preferences. The comptroller will simultaneously repeal the current version of §20.306, in a separate rulemaking. Both versions list preferences that are enacted in statute. Therefore, the substance of the proposed version is largely consistent with the current version.

New §20.306 clarifies the procurement preference rules. The section is structured to improve its style with the purpose of clarifying when and how statutory purchasing preferences should apply in the procurement process. The reorganization clarifies in which step of the procurement process agencies should account for a preference and how it will impact the procurement. The new section divides the preferences into categories which agencies shall take into consideration at different phases of the procurement lifecycle. It also provides a clear hierarchy among the preferences and provides that when planning to procure or purchase goods or services, state agencies shall consider the statutory preferences listed in the rule.

Paragraph (1) identifies specification preferences which shall be considered during needs assessment and specifications development. The specification preferences apply to: televisions; food for consumption in a public cafeteria; recycled, remanufactured, or environmentally sensitive products; paper; and American vehicles.

Paragraph (2) identifies pricing preferences which shall be considered during evaluation and best value determination. The pricing preferences apply to: rubberized asphalt paving material; services to be performed, in whole or in part, in a designated nonattainment area or an affected county; and items subject to reciprocal preferences among states, unless the contract will involve federal funds.

Paragraph (3) establishes the tie-bid preferences which shall be used to resolve ties between responses of equal cost and quality. The tie-bid preferences apply to: agricultural products; vegetation for landscaping purposes; motor oil and other automotive lubricants; computer equipment; creation or production of a commercial for an advertising campaign; products, workshops, organizations, or corporations whose primary purpose is training and employing persons with disabilities; goods and services produced in economically depressed or blighted areas; goods produced at a facility located on property for which the owner has received a certificate of completion under Health and Safety Code, §361.609; goods produced or offered by a Texas bidder, with first preference given to a service-disabled veteran; and goods produced and grown in other states of United States.

The comptroller amends the title of §20.307 to "Recycled, Remanufactured and Environmentally Sensitive Commodities and Services."

The amendments to §20.307 update the designated environmentally sensitive items listed in the rule which agencies should prefer in a procurement. In compliance with Government Code, §2155.448, the comptroller revises the list of identified items, the purchasing goal, and the requirement for an agency to justify procurement of an identified item with specifications that do not meet the definition of recycled, remanufactured, or environmentally sensitive commodity or service.

The amendments update the list of designated recycled, remanufactured, and environmentally sensitive commodities to eliminate outdated goods that are no longer an item with market significance and to include items that are relatively significant in state purchasing. It also establishes environmentally sensitive standards that are commonly used in the marketplace, such as FSC-certified, in order to make it easier for agencies and vendors to comply. The amendments further provide clarity on the purchasing goals and on how a state agency should document its file. The amendments also allow a person designated by the state agency head executive to sign for the justification, contributing to the implementation and efficacy of Government Code, §2155.448.

Subsection (a) provides the items that the comptroller has identified as recycled, remanufactured, and environmentally sensitive commodities or services and for which statewide purchasing goals apply: re-refined motor oils and lubricants, paper products including copy paper, paper towels, toilet paper, paper packaging, coffee filters, air conditioning filters, recycled steel, and Energy Star labeled products for selected categories, to the extent the label is available.

The comptroller identified products for statewide purchasing goals by reviewing statutory preferences and seeking out market-recognized certifications. The categories were selected from among the goods Statewide Procurement Division has authority to procure.

Subsection (b) identifies the statewide purchasing goals state agencies should comply with.

A state agency shall purchase the commodities and services designated in subsection (a) to the greatest extent possible. The purpose of the goal is to convey the comptroller's guidance to maximize the purchasing of recycled, remanufactured and environmentally sensitive commodities while enabling agencies to consider their needs.

Subsection (c) establishes the requirements for a state agency to document its procurement file when purchasing a commodity or service designated in subsection (a) that does not meet the definition of a recycled, remanufactured or environmentally sensitive item.

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amendments and new rule are in effect, the rules: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed amendments and new rule would have no fiscal impact on the state government, units of local government, or individuals. The proposed amendments and new rule would benefit the public by modernizing and clarifying the state's purchasing preference requirements, making it easier for agencies and vendors to comply with statutory preferences for recycled, remanufactured, and environmentally sensitive commodities in the procurement process. There would be no anticipated significant economic cost to the public. The proposed amendments and new rule would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal or information related to the cost, benefit, or effect of the proposal, including any applicable data, research or analysis, to Gerard MacCrossan, P.O. Box 13528, Austin, Texas 78711 or to the email address: Gerard.MacCrossan@cpa.texas.gov. The comptroller must receive your comments or other information no later than 30 days from the date of publication of the proposal in the Texas Register.

The amendments and new section are proposed pursuant to Government Code, §§2155.0012, 2156.0012, and 2158.0012 which authorize the comptroller to adopt rules to efficiently and effectively administer Government Code, Chapter 2155, Chapter 2156, and Chapter 2158; and pursuant to §2155.132(d), which authorizes the comptroller to prescribe procedures for delegated purchases by rule; and pursuant to Health and Safety Code, §361.991(e), and §361.965(e) which authorize the comptroller to adopt rules to implement Health and Safety Code, §§361.991 and 361.965. The comptroller's authority to provide procedures for delegated purchases in Government Code, §2155.132(d) allows it to specify how and when agencies apply reciprocal purchasing preferences under Government Code, Chapter 2252, Subchapter A. Furthermore, the comptroller has implied authority to implement Government Code, Chapter 2252, Subchapter A in Government Code, §2252.003, which designates the comptroller as the agency responsible for publication of other states' laws on contracts, action necessary to implement Government Code, Chapter 2252, Subchapter A.

The new section and amendments implement Government Code, §§2151.004, 2155.0011, 2156.0011, and 2158.0011 which outline the general purchasing responsibility of the comptroller.

§20.306. Preferences.

When developing its procurement plan, conducting its needs assessment, or purchasing goods or services, a state agency shall consider the following statutory procurement preferences.

(1) Specification Preferences. During needs assessment and specifications development, a state agency shall use the following specifications, or document why the specification does not meet the agency's needs.

(A) When procuring televisions, a state agency shall specify a television manufacturer that complies with the recovery plan collection and recycling standards as determined by Health & Safety Code, §361.991, and 30 TAC Chapter 328, Subchapter J.

(B) When procuring food for consumption in a public cafeteria, a state agency shall specify foods of higher nutritional value without trans fatty acids, as provided in Government Code, §2155.452.

(C) When recycled, remanufactured, or environmentally sensitive products, as designated in §20.307 of this title (relating to Recycled, Remanufactured and Environmentally Sensitive Commodities and Services), may meet an agency's need, the agency shall specify such products, unless it determines that the average price of such products exceeds the average price of comparable non-recycled products by more than 10%, as provided in Government Code, §2155.445.

(D) When procuring paper, a state agency shall specify paper containing the highest proportion of recycled fibers that it determines is available through normal commercial sources; and does not exceed the average price of comparable nonrecycled paper by more than 10%, as provided in Government Code, §2155.446.

(E) When procuring passenger vehicles or other ground transportation vehicles for general use, a state agency shall specify fuel-efficient vehicles assembled in the United States unless such requirement would have a significant detrimental effect on the vehicle use, as provided in Government Code, §2158.0031.

(2) Pricing preferences. During procurement evaluation, state agencies shall apply the following statutory preferences when determining best value.

(A) When procuring rubberized asphalt paving material, a state agency shall select material made from scrap tires by a facility in this state if it does not exceed the bid cost of alternative paving materials by more than 15%, in compliance with Government Code, §2155.443.

(B) When procuring services to be performed, in whole or in part, in a designated nonattainment area or an affected county, as those terms are defined by Health and Safety Code, §386.001, a state agency shall select a vendor that meets air quality standards if it does not exceed by 105% the cost of a vendor that does not meet or exceed air quality standards, in accordance with Government Code, §2155.451.

(C) When a state agency is evaluating bids by one or more resident bidders, defined as a bidder with its principal place of business in this state, against one or more nonresident bidders, state agencies shall apply a reciprocal preference as stated in Government Code, §2252.002, unless the contract will involve federal funds.

(3) Tie-bid preferences. During procurement evaluation, after applying pricing preferences in paragraph (2) of this subsection, state agencies shall resolve ties between responses of equal cost and quality by applying the following statutory preferences.

(A) When procuring agricultural products, as determined under Government Code, §2155.444, a state agency shall:

(i) give first preference to products grown in this state;

(ii) give second preference to products offered by Texas bidders, as defined in Government Code, §2155.444(c)(2); and

(iii) give preference to products produced or grown in other states of the United States over foreign products.

(B) When procuring vegetation for landscaping purposes, a state agency shall give preference to vegetation native to the region, in compliance with Government Code, §2155.444.

(C) When procuring motor oil and other automotive lubricants, a state agency shall give preference to products that contain at least 25% recycled oil, in accordance with Government Code, §2155.447.

(D) When procuring computer equipment, a state agency shall give preference to equipment made by a manufacturer that has a program to recycle the computer equipment of other manufacturers in accordance with Health and Safety Code, §361.965(d), in accordance with 1 TAC Chapter 217.

(E) When procuring the creation or production of a commercial for an advertising campaign, a state agency shall give preference to a Texas bidder, as determined in Government Code, §2155.444.

(F) A state agency shall give preference to products of workshops, organizations, or corporations whose primary purpose is training and employing persons with mental or physical disabilities, as specified in Government Code, §2155.441.

(G) A state agency shall give preference to goods and services produced in economically depressed or blighted areas as defined in Government Code, §2155.449.

(H) A state agency shall give preference to goods produced at a facility located on property for which the owner has received a certificate of completion under Health and Safety Code, §361.609 as determined by Government Code, §2155.450.

(I) In accordance with Government Code, §2155.444, a state agency shall:

(i) when a Texas bidder, as defined in Government Code, 2155.444(c)(2), is a responsive bidder:

(I) give first preference to goods produced or offered by, or services offered by, a Texas bidder that is owned by a service-disabled veteran who is a Texas resident;

(II) give second preference to goods produced or offered by, or services offered by, a Texas bidder; and

(ii) give preference to goods produced or grown in other states of the United States over foreign products.

§20.307. [~~State Agency Procurements of~~] Recycled, Remanufactured and [or] Environmentally Sensitive Commodities and [or] Services.

(a) Designated items. Pursuant to Government Code, §2155.448, the comptroller hereby designates the [~~The comptroller may designate as "First Choice" certain~~] recycled, remanufactured, and [or] environmentally sensitive commodities and [or] services to which the statewide purchasing goals in subsection (b) of this section apply: [.]

[~~(b)~~] [First Choice items are designated recycled, remanufactured, and environmentally sensitive commodities or services that state agencies shall give a preference for when purchasing. These items include, but are not limited to:]

(1) re-refined motor oils and lubricants;

(2) paper products including copy paper, paper towels, toilet paper, paper packaging, coffee filters, air conditioning filters using a listed manufacturing process which shall be prioritized in the following order:

(A) post-consumer recycled paper;

(B) recovered recycled paper;

(D) Sustainable Forestry Initiative (SFI).

(3) [~~(2)~~] recycled steel; and [~~content toilet paper;~~]

~~[(3) recycled content toilet seat covers and paper towels;]~~

~~[(4) recycled content printing, computer and copier paper, and business envelopes;]~~

~~[(5) recycled content plastic trash bags;]~~

~~[(6) recycled content plastic covered binders;]~~

~~[(7) recycled content recycling containers; and]~~

(4) [~~(8)~~] Energy Star labeled: [~~photocopiers.~~]

(A) appliances;

(B) commercial food service equipment;

(D) electronics and office equipment including monitors, printers and other peripherals purchased to operate systems such as HVAC controls, garage lifts and equipment, mail systems, and lightning controls.

(b) Statewide purchasing goals. A state agency shall purchase the commodities and services designated in subsection (a) of this section to the greatest extent possible.

[(c) Commodities or services that are designated as First Choice items will be reflected in the State Procurement Manual. The State Procurement Manual will be revised as new commodities or services are designated as First Choice items.]

(c) [~~(d)~~] A state agency that intends to purchase a commodity or service that accomplishes the same purpose as a commodity or service designated in subsection (a) of this section [~~identified in Government Code, §2155.448(a)~~] that does not meet the definition of a recycled, remanufactured, or environmentally sensitive commodity or service [~~product or that is not remanufactured or environmentally sensitive~~] shall include with the procurement file a written justification signed by the executive head of the state agency or designee stating that the designated commodity or service does not meet its needs [~~the reasons for the determination that the commodity or service identified by the comptroller will not meet the requirements of the state agency~~].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2026.

TRD-202602232

Don Neal

General Counsel, Operations and Support Legal Services

Comptroller of Public Accounts

Earliest possible date of adoption: July 12, 2026

For further information, please call: (512) 475-2220

SUBCHAPTER E. SPECIAL CATEGORIES OF CONTRACTING

DIVISION 3. STATE SUPPORT SERVICES - VEHICLE FLEET MANAGEMENT

34 TAC §§20.431 - 20.437

The Comptroller of Public Accounts proposes amendments to §20.431, concerning definitions; §20.432, concerning office of vehicle fleet management; §20.434, concerning assignment and use of pooled vehicles; §20.435, concerning vehicle fleet management system; §20.436, concerning assistance to state agencies and school districts; and §20.437, concerning waiver of vehicles to meet required fleet percentages. The Comptroller of Public Accounts proposes a new §20.433, concerning state vehicle fleet management plan. The comptroller separately proposes to repeal the current §20.433, concerning state vehicle fleet management plan.

No legislation was enacted within the last four years that provides the statutory authority for the amendments. The amendments implement Senate Bill 1364, 89th Legislature, 2025, effective September 1, 2025.

The comptroller renames Title 34, Chapter 20, Subchapter E, Division 3. The new name, Vehicle Fleet Management, briefly and clearly identifies the subject matter of Division 3.

Throughout these amendments, the comptroller removes references to the Council on Competitive Government. The Council on Competitive Government has been abolished.

The comptroller amends §20.431 to remove definitions that are no longer needed. The terms "assigned vehicle," "capitalized value," "direct labor," "disposal date," "downtime," "field employee," "fleet officer," "gross vehicle weight," "indirect labor," "OVFM," "pooled vehicle," "state agency," "state employee," "transfer date," "vehicle fleet management system," and "vehicle inventory" either are not used in the revised rules, are defined elsewhere in the comptroller's rules, or do not require a definition.

The definitions in amended §20.431 apply to Chapter 20, Division 3 only. Definitions that apply to all of Chapter 20 are in §20.25 of this title.

The amended definition of "alternative fuel" in §20.431 includes biodiesel. Biodiesel is considered an alternative fuel under Government Code, §2158.004.

The comptroller amends §20.432 to simplify and update the description of the Office of Vehicle Fleet Management. The comptroller deletes subsection (b), which described the State Vehicle Fleet Management Plan, because the plan is thoroughly described in Government Code, §2171.104. The comptroller deletes subsection (c), which described vehicle maintenance services offered by the comptroller. Deleting subsection (c) will not prevent the comptroller from offering such services, because the authority for such services already exists in Government Code, §2171.102. However, the comptroller does not currently perform vehicle maintenance services for other state agencies. The comptroller deletes subsection (d), which described the Vehicle Fleet Management System. The Vehicle Fleet Management System is fully described in §20.435. The comptroller deletes subsection (e), which describes a fleet maintenance conference sponsored by the comptroller. This elaboration of the comptroller's authority to educate and assist state agencies with fleet management no longer serves a purpose.

The comptroller proposes new §20.433 to simplify and update the description of the State Vehicle Fleet Management Plan. Because the State Fleet Vehicle Management Plan is a standalone document that is regularly updated and made available to the public, there is no need to describe the plan in comptroller rules. The comptroller separately proposes to repeal the current version of §20.433, because the extensive details it includes do not serve a purpose.

The comptroller amends §20.434, including its title, to remove references to the state agency motor pool. The comptroller does not operate a vehicle pool for use by other agencies and does not intend to do so in the future. The amended rule describes how the comptroller assigns vehicles to its own employees. Because comptroller policies regarding vehicle checkout and rotation procedures do not serve a purpose within the rule, they are deleted. Going forward, the comptroller will maintain such policies internally.

The comptroller amends §20.435 to remove unnecessary details regarding the Vehicle Fleet Management System. The amended rule provides that the comptroller will instruct agencies what information to submit to the system, when, and how. It requires each agency to designate an employee to be responsible for submitting the information. In order to allow the comptroller to adjust its instructions to agencies without additional rulemaking, the comptroller removes such details from the rule.

The comptroller amends §20.436 to more accurately reflect the scope and intent of the comptroller's assistance to state agencies and school districts regarding use of alternative fuels. The amended rule provides that the comptroller may provide assistance and informational materials regarding alternative fuels and conversion of vehicles to run on such fuels. Because the comptroller does not regularly sponsor fleet management conferences, identify vehicles for alternative fuel conversion, locate facilities to convert vehicles, or provide information to the Texas Commission on Environmental Quality, the rule no longer mentions those activities. Instead, the amended rule provides more generally that the comptroller may work with state agency fleet operators, vehicle manufacturers, vehicle converters, fuel distributors, and other entities.

The comptroller amends §20.437 to better align with Government Code, §2158.004. Subsection (a) states the current goal under §2158.004 for use of alternative fuels in most state agency fleets. Subsection (b) provides a simplified method to request a waiver of the goal from the comptroller, and gives the comptroller flexibility to request any information and consider any facts in deciding whether to grant the waiver. The comptroller deletes unnecessary details regarding the waiver process in subsection (b) and subsections (c)-(f). The comptroller deletes subsection (g) due to changes in law enacted in Senate Bill 1364, 89th Legislature, 2025, effective September 1, 2025. Because Senate Bill 1364 repealed Government Code §2158.003, subsection (g) no longer serves a continuing purpose.

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amendments, new rule, and rule repeal are in effect, the proposed amendments, new rule, and rule repeal will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed amendments, new rule, and rule repeal would have no significant fiscal impact on the state government, units of local government, or individuals.

The proposed amendments, new rule, and rule repeal would benefit the public by improving the clarity and implementation of the sections by removing provisions that are no longer accurate, necessary, or relevant to the current agency operations and better align the sections with the governing statute. There would be no anticipated economic cost to the public. The proposed amendments, new rule, and rule repeal would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal or information related to the cost, benefit, or effect of the proposal, including any applicable data, research or analysis, to Gerard MacCrossan, P.O. Box 13528, Austin, Texas 78711 or to the email address: Gerard.MacCrossan@cpa.texas.gov. The comptroller must receive your comments or other information no later than 30 days from the date of publication of the proposal in the Texas Register.

A public hearing will be held to receive comments on the proposed amendments. There is no physical location for this meeting. The meeting will be held at 10:00 a.m., Central Time, on June 23rd, 2026. To access the online public meeting by web browser, please enter the following URL into your browser: https://txcpa.webex.com/txcpa/j.php?MTID=m40f87cd9e32600c619b8457e9a1f4fd5. To join the meeting by computer or cell phone using the Webex app, use the access code 2493 365 0910 and password SPDRules. Persons interested in providing comments at the public hearing may contact Mr. Gerard MacCrossan, Comptroller of Public Accounts, at Gerard.MacCrossan@cpa.texas.gov or by calling (512) 463-4468 by June 22, 2026.

These amendments are proposed under Government Code, §2158.0012, which authorizes the comptroller to adopt rules to efficiently and effectively administer Chapter 2158, and Government Code, § 2171.002, which authorizes the comptroller to adopt rules to implement Chapter 2171.

These amendments implement Government Code, Chapter 2158 and Chapter 2171.

§20.431. Definitions.

The following words and terms, when used in this division [~~chapter~~], shall have the following meanings, unless the context clearly indicates otherwise.

(1) Alternative fuel--Compressed natural gas, liquefied natural gas, liquefied petroleum gas, electricity, methanol (or M85), [or] ethanol (or E85), or biodiesel.

(2) Alternative fuel vehicle--A motor vehicle capable of using alternative fuel in the original equipment manufactured engine, or in a converted traditional gasoline or diesel engine.

~~[(3) Assigned vehicle--A state vehicle normally driven by the same employee or small specific group of employees.]~~

~~[(4) Capitalized value--The original cost of a vehicle, plus later adjustments for major additions or improvements.]~~

~~[(5) Direct labor--The cost of labor associated with repairing or servicing vehicles, whether performed by a contractor or state employee.]~~

~~[(6) Disposal date--The date on which a state vehicle is no longer included in a state agency's property inventory.]~~

~~[(7) Downtime--The total number of working hours a state vehicle, otherwise eligible for assignment, is out of service for repair or maintenance.]~~

[(8) Field employee--A state employee whose regular duties require work in locations other than agency headquarters or regional offices and who regularly require a vehicle for ongoing daily duties.]

[(9) Fleet officer--The individual designated by each state agency who is responsible for the timely and accurate submission of all required information utilized by the vehicle fleet management system.]

[(10) Gross vehicle weight (GVW)--The greatest weight of vehicle and load which the manufacturer recommends that a vehicle accommodate. The GVW includes the total weight of chassis, cab, body, special equipment, oil, water, gasoline, driver, and the maximum payload.]

~~[(11) Indirect labor--The labor cost of vehicle fleet related employees whose time cannot be identified with repairing or servicing individual vehicles.]~~

~~[(12) OVFM--The comptroller's office of vehicle fleet management.]~~

~~[(13) Pooled vehicle--A vehicle normally garaged in a central location for use by any authorized employee of the state agency.]~~

(3) [~~(14)~~] Special purpose vehicle (SPV)--A motor vehicle commercially designed to be used primarily for purposes other than to provide transportation service for personnel, supplies, or equipment.

[(15) State agency--]

[(A) any department, commission, board, office, council, or other agency in the executive branch of state government created by the constitution or by a statute of this state;]

[(B) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of civil appeals, or the Texas Judicial Council; and]

[(C) an institution of higher education as defined in Education Code, §61.003.]

~~[(16) State employee--A person employed by a state agency, or an elected or appointed state official.]~~

(4) [~~(17)~~] State vehicle--Any state-owned vehicle which is propelled by a self-contained engine and is licensed to operate on public highways.

~~[(18) Transfer date--The date a vehicle is transferred from one state agency to another.]~~

~~[(19) Vehicle Fleet Management System--A computerized data retrieval system to assist each state agency in the management of its vehicle fleet.]~~

~~[(20) Vehicle inventory--A list of state agency vehicles by type and class which is utilized to determine their average cost of operation.]~~

§20.432. Office of Vehicle Fleet Management.

[~~(a)~~] Through the Office of Vehicle Fleet Management, the comptroller administers [~~the state vehicle fleet management program which consists of~~] the State Vehicle Fleet Management Plan and [~~a computerized~~] Vehicle Fleet Management System.

[(b) The comptroller will implement and monitor, at the direction of the Council on Competitive Government (CCG), the State Vehicle Fleet Management Plan, approved and adopted by CCG. A current Plan is available for viewing at the comptroller's Website. The Plan delineates the responsibilities of each state agency, institution of higher education and OVFM to develop, implement, maintain, and monitor current vehicle fleet data as required by the Plan.]

[(c) The comptroller may, for a fee, offer vehicle fleet maintenance services to all state agencies in Travis County on a full cost recovery basis. The services include preventive maintenance and routine mechanical repair work. The comptroller may negotiate contracts or service arrangements for major overhauls and extensive mechanical work.]

[(d) The computerized Vehicle Fleet Management System is a database that contains information on vehicle inventories, maintenance and repair history, mileage, fuel usage, and expenses incurred for all state agencies.]

[(e) The comptroller may sponsor an annual fleet management conference to consider:]

[(1) adjustments to the Vehicle Fleet Management System;]

[(2) current fleet management issues; and]

[(3) the improvement of fleet management expertise among state agencies.]

§20.433. State Vehicle Fleet Management Plan.

The State Vehicle Fleet Management Plan describes the responsibilities of a state agency at each phase of the fleet vehicle life cycle. It also describes the requirements to submit information to the Vehicle Fleet Management System.

§20.434. Assignment [~~and Use~~] of State [~~Pooled~~] Vehicles.

(a) Comptroller [~~Each vehicle in the comptroller's vehicle fleet pool, with the exception of~~] vehicles may be assigned to field employees and comptroller[, is assigned to the state agency motor pool and is available for checkout as needed. Some vehicles, because of mission critical status, may be permanently assigned to sub-pools within divisions and available only to employees within those ] divisions. The comptroller may operate a motor pool of vehicles available for checkout to employees driving on agency business.

~~[(b) Comptroller employees must present a valid Texas driver's license each time a pooled vehicle is checked out.]~~

[(c) Pooled vehicle assignments will be made by designated comptroller personnel to ensure that all comptroller vehicles are used and rotated to balance mileage and time usage among all pooled vehicles.]

(b) [~~(d)~~] Pooled vehicles may only be assigned on a regular or daily basis to individual administrative or executive employees if there is[~~, require~~] written documentation that the assignment is critical to comptroller's needs and mission of the agency. [~~Documentation for all assigned comptroller vehicles will be kept on file with designated comptroller personnel.~~]

§20.435. Vehicle Fleet Management System.

(a) The Vehicle Fleet Management System is the [~~responsibility of the Office of Vehicle Fleet Management. The comptroller maintains the main repository and~~] database for state agency fleets [~~all vehicle information submitted by each state agency in accordance with this subsection~~]. The comptroller shall instruct agencies what fleet vehicle information they must submit, how, and when. [~~is responsible for developing the form, format, and composition of all data submitted electronically or otherwise to the vehicle fleet management system to assure system continuity.~~]

(b) Each state agency shall designate a fleet officer who is responsible for [~~establishing, maintaining, and~~] submitting fleet vehicle information to the comptroller [~~on a monthly basis accurate vehicle information in the form and format established by the comptroller~~].

[(1) Information to be recorded in each agency's fleet management system for submission to the comptroller's repository and database includes, but is not limited to:]

[(A) acquisition date, vehicle make, model, type, class, year, gross vehicle weight rating, exempt license plate number, manufacturer, vehicle identification number, whether a special purpose vehicle, and whether a pool or assigned vehicle;]

[(B) acquisition cost, capitalized value, repair and maintenance expenses, direct and indirect labor expense, replacement policy, current mileage, vehicle disposal date, and disposal price or salvage value;]

[(C) type, and quantity of all fuels and lubricants used, including their cost and type, vehicle lifetime odometer reading, and miles traveled per month;]

[(D) insurance and accident related expense;]

[(E) downtime, transfer date, disposal date, and any other information necessary to compute the average cost of operation, per month, of the various classes and types of vehicles; and]

[(F) vehicle location by city and county.]

[(2) The Vehicle Fleet Management System maintained by the comptroller constitutes the primary instrument used to provide fleet management assistance. Fleet management reports detailing operating trends, cost analysis, and special exception reports listing agencies with unusually high operating expenses will be generated and made available to agency fleet officers.]

§20.436. Assistance to State Agencies and School Districts.

(a) The Office of Vehicle Fleet Management may assist with use of [~~of the comptroller facilitates, encourages, and expedites~~] alternative fuels [~~use~~] by state agencies and school districts.

(b) The Office of Vehicle Fleet Management may provide [~~of the comptroller provides~~] informational materials regarding alternative fuels[, presents state of the art data at fleet management conferences, provides state vehicle operational data, locates facilities to convert state vehicles to alternative fuels, helps identify vehicles that are appropriate for conversion,] and [~~provides~~] technical assistance related to vehicle conversion.

(c) To assist with vehicle conversion, the Office of Vehicle Fleet Management may work [~~of the comptroller works~~] with state agency fleet operators, vehicle manufacturers and converters, fuel distributors, and [~~any~~] other [~~necessary~~] entities.

[(d) The Office of Vehicle Fleet Management provides information to the Texas Commission on Environmental Quality for its determination of air quality benefits associated with the use of alternative fuels.]

§20.437. Alternative Fuels Requirement [~~Waiver of Vehicles to Meet Required Fleet Percentages~~].

(a) Under Government Code, §2158.004(a), any [~~Any~~] state agency operating a fleet of more than 15 motor vehicles, excluding law enforcement and emergency vehicles, shall have [~~a fleet percentage of~~] alternative fuel vehicles make up at least 50% [~~equal to or greater than 30%~~] of its [~~the~~] total fleet [~~number of such vehicles operated by September 1, 1994, and a percent equal to or greater than 50% by September 1, 1996~~].

(b) Under Government Code, §2158.004(b), a [A] state agency may request [~~desiring~~] a waiver of Government Code, §2158.004(a) from the comptroller. Agencies may submit such requests using the contact information for the Office of Vehicle Fleet Management on the comptroller's website. Agencies shall provide any information requested by the comptroller to substantiate the basis for a waiver. [~~from subsection (a) of this section shall submit a certification to the Office of Vehicle Fleet Management of the comptroller that meets one or more of the following conditions:~~]

[(1) the vehicles will be operating primarily in an area in which neither the agency nor a supplier has or can reasonably be expected to establish a central refueling station for alternative fuels;]

[(2) the agency is unable to acquire or be provided equipment or refueling facilities necessary to operate vehicles using an alternative fuel at a projected cost that is reasonably expected to result in no greater net costs than the continued use of traditional gasoline or diesel fuels measured over the expected useful life of the equipment or facilities supplied; or]

~~[(3) the agency is unable to acquire or be provided any alternative fuel vehicles or equipment necessary for such vehicles.]~~

[(c) The subsection (b) of this section certification must be sent to the Office of Vehicle Fleet Management of the comptroller and must be accompanied by the information described in either subsection (d) or (e) of this section.]

[(d) A subsection (b)(1) of this section certification shall also contain the:]

[(1) total number of vehicles in the fleet subject to these rules;]

[(2) total number of vehicles currently operating on an approved alternative fuel;]

[(3) percentage of the fleet subject to these rules that is impacted by the requested waiver;]

[(4) vehicle license plate number of each vehicle to be waived;]

[(5) city or town nearest to where each vehicle identified in paragraph (4) of this subsection is normally garaged;]

[(6) name of any alternative fuels vendor or supplier with a stationary supply of fuel within a 10-mile radius, or mobile fuel suppliers within a 30-mile radius of where each vehicle identified in paragraph (4) of this subsection is normally garaged; and]

[(7) correspondence or other documentation relevant to the request for waiver or reduction.]

[(e) A subsection (b)(2) of this section certification must be accompanied and supported by a state agency prepared cost benefit analysis for each alternative fuel which includes the following:]

[(1) total initial cost of providing the entire alternative fuel facility, or a portion thereof, including, but not limited to, the following (if the equipment is provided at no initial cost to the agency and the fuel vendor plans to recoup the initial cost through increased fuel costs, then only those items furnished by the agency such as land shall be included in the total initial cost):]

[(A) cost of land at current market value, on which to install any compressor station, tanks, and refueling facilities;]

[(B) cost of compressor and related facilities, including cost of providing operating power, if not already available at the site, any engineering work for site preparation;]

[(C) cost of refueling and related facilities, including fast and slow refueling stations, refueling tanks;]

[(D) cost of providing alternative fuel to the site such as gas pipeline;]

[(E) cost of engine conversion kits and fuel cylinders and/or tanks, including installation costs;]

[(F) cost of initial training and certification of mechanics, and training of drivers to operate alternative fuel vehicles, if required;]

[(G) cost of future major overhauls of the compressor system according to the compressor manufacturer's recommended major overhaul schedule (see paragraph (7) of this subsection);]

[(H) cost of future major overhauls or replacement of the refueling stations if the expected life is less than 30 years;]

[(I) costs of future replacement of fuel conversion kits (see paragraph (7) of this subsection); and]

[(J) any other costs or expenditures necessary to provide a complete, turnkey facility;]

[(2) total annual mileage expected for the vehicle fleet or for those vehicles covered by the cost study;]

[(3) total annual fuel savings calculated from the difference between the fuel costs using gasoline/diesel and using alternative fuel for the total annual mileage in paragraph (2) of this subsection;]

[(4) an estimate of any additional savings such as reduced maintenance costs (e.g., extended oil change intervals, longer spark plug life, and other savings in maintenance);]

[(5) an estimate of the total annual operating costs, including, but not limited to, the following:]

[(A) compressor and refueling station maintenance, not replacement cost or cost of major overhaul (see paragraph (1) of this subsection);]

[(B) cost of labor for removing, testing, and reinstalling alternative fuel cylinders/tanks for inspection and testing;]

[(C) cost of maintenance and repair of engine conversion kits;]

[(D) cost of testing fuel cylinders/tanks;]

[(E) cost of training additional mechanics and labor cost differential, if any, for mechanics and other personnel servicing alternative fuel equipment;]

[(F) cost of electrical power to operate the compressors and refueling stations; and]

[(G) other annual costs uniquely associated with the operation of the alternative fuel program;]

[(6) [determine the total annual savings from the difference between the total savings (sum of paragraphs (3) and (4) of this subsection), and the total annual operating costs, paragraph (5) of this subsection;]

[(7) estimate the expected life of the various components of the system. If accurate lifetimes are not available, the following shall be used:]

[(A) conversion kits = 15 years (if removed from old and reinstalled on new vehicles; if not reinstalled, use six years for conversion kits for automobiles and small buses, and 10 years for light and medium-duty trucks and large buses);]

[(B) fuel cylinders/tanks = 30 years (or less if lifetimes are not 30 years); and]

[(C) compressors = 30 years (or replacement at the time recommended by the compressor manufacturer for the third major overhaul. If not known or not listed by the manufacturer, use 10 years):]

[(8) determine the capitalized costs of the various components in subsection (e) of this section and then calculate the payback period by using the total capitalized costs; total annual savings, paragraph (6) of this subsection; and 10% cost of money (or the actual interest rate applicable at the time the calculation is made) in standard life cycle cost benefit analysis formulae; and]

[(9) the comptroller may assist state agencies and school districts in making these calculations.]

[(f) The director will review the request for waiver or reduction of the requirements of subsection (a) of this section and issue a written waiver or reduction to the state agency or school district. A waiver or reduction may be issued under this section for a period of up to two years, at the discretion of the director. A waiver will be granted on a certification under subsection (b)(2) of this section if the total capitalized cost, P, max. is more than 9.43 times the total annual savings, A, for an expected compressor or system lifetime of 30 years. If the compressor lifetime is less than 30 years, or if a compressor is not used, and the component in subsection (e)(1) of this section with the longest expected lifetime is less than 30 years, a waiver will be granted if the total capitalized costs are more than the following values (if other than 10% interest is used, adjust accordingly).]

[Figure: 34 TAC § 20.437(f)]

[(g) The comptroller keeps these waivers for up to two years for use in waiving the purchasing restrictions for state agencies in §20.235 of this title (relating to Purchase of Motor Vehicles).]

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 27, 2026.

TRD-202602216

Don Neal

General Counsel, Operations and Support Legal Services

Comptroller of Public Accounts

Earliest possible date of adoption: July 12, 2026

For further information, please call: (512) 475-2220

34 TAC §§20.433, 20.438, 20.439

The Comptroller of Public Accounts proposes the repeal of §20.433, concerning state vehicle fleet management plan, §20.438, concerning effect of waiver, and §20.439, concerning alternative fuel usage. No legislation was enacted within the last four years that provides the statutory authority for the repeals.

The comptroller repeals §20.433 because it contains unnecessary and obsolete details about the State Vehicle Management Plan. The comptroller no longer prepares the plan under the direction of the Council on Competitive Government, which has been abolished. Instead, the plan is produced under the comptroller's statutory authority, Government Code, §2171.104. Because the plan is publicly available, a rule describing it in detail serves no purpose. In a separate rulemaking, the comptroller proposes to adopt a more succinct and accurate rule about the State Vehicle Management Plan.

The comptroller repeals §20.438 because of changes in law enacted in Senate Bill 1364, 89th Legislature, 2025, effective September 1, 2025. Under §20.438, a waiver issued under §20.437 of this title was a sufficient basis to waive vehicle purchasing restrictions under Government Code, §2158.003. Because Senate Bill 1364 repealed Government Code, §2158.003, §20.438 does not serve a continuing purpose. (The comptroller also intends to repeal §20.235 of this title, which implemented Government Code, §2158.003.)

The comptroller repeals §20.439 so that it can address the use of alternative fuels through less prescriptive means. Eliminating the reporting requirements under this rule will free up state resources for other productive uses.

Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed rules repeal is in effect, the repeal: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not positively or adversely affect this state's economy.

Mr. Reynolds also has determined that the proposed rules repeal would have no fiscal impact on the state government, units of local government, or individuals. The proposed rules repeal would benefit the public by removing provisions that are no longer accurate, necessary, or relevant to current agency operations. There would be no anticipated economic cost to the public. The proposed rules repeal would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal or information related to the cost, benefit, or effect of the proposal, including any applicable data, research or analysis, to Gerard MacCrossan, P.O. Box 13528, Austin, Texas 78711 or to the email address: Gerard.MacCrossan@cpa.texas.gov. The comptroller must receive your comments or other information no later than 30 days from the date of publication of the proposal in the Texas Register.

A public hearing will be held to receive comments on the proposed amendments. There is no physical location for this meeting. The meeting will be held at 10:00 a.m., Central Time, on June 23rd, 2026. To access the online public meeting by web browser, please enter the following URL into your browser: https://txcpa.webex.com/txcpa/j.php?MTID=m40f87cd9e32600c619b8457e9a1f4fd5. To join the meeting by computer or cell phone using the Webex app, use the access code 2493 365 0910 and password SPDRules. Persons interested in providing comments at the public hearing may contact Mr. Gerard MacCrossan, Comptroller of Public Accounts, at Gerard.MacCrossan@cpa.texas.gov or by calling (512) 463-4468 by June 22, 2026.

These repeals are proposed under Government Code, §2158.0012, which authorizes the comptroller to adopt rules to efficiently and effectively administer Chapter 2158, and Government Code, §2171.002, which authorizes the comptroller to adopt rules to implement Chapter 2171.

These repeals implement Government Code, Chapter 2158 and Chapter 2171.

§20.433. State Vehicle Fleet Management Plan.

§20.438. Effect of Waiver.

§20.439. Alternative Fuel Usage.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 27, 2026.

TRD-202602215

Don Neal

General Counsel, Operations and Support Legal Services

Comptroller of Public Accounts

Earliest possible date of adoption: July 12, 2026

For further information, please call: (512) 475-2220