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 amended §114.7 and §114.64.

Sections 114.7 and 114.64 are adopted without changes to the proposed text as published in the September 23, 2016, issue of the Texas Register (41 TexReg 7430) and, therefore, will not be republished.

Background and Summary of the Factual Basis for the Adopted Rules

The Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP) was established to enhance the objectives of the Vehicle Inspection and Maintenance Program (I/M). The 77th Texas Legislature, 2001, enacted House Bill (HB) 2134 to create the LIRAP to assist low income individuals with repairs, retrofits, or retirement of vehicles that fail emissions inspections. The 80th Texas Legislature, 2007, enacted HB 12 to make LIRAP assistance available for retirement of vehicles that are 10 years old or older. Beginning in March 2002, the TCEQ adopted rules in Chapter 114 as necessary to implement the LIRAP as codified under Texas Health and Safety Code (THSC), §§382.209 - 382.216, 382.218, and 382.219.

The LIRAP requirements specified in §114.64 and in THSC, §382.210 currently require replacement vehicles to be certified to meet federal Tier 2, Bin 5 or a cleaner Bin certification under 40 Code of Federal Regulations (CFR) §86.1811-04 in order to qualify for vehicle replacement assistance through the LIRAP. This tiered system refers to federal vehicle emission standards established by the United States Environmental Protection Agency (EPA). The EPA promulgated new rules to establish the Tier 3 Motor Vehicle Emission and Fuel Standards on April 28, 2014, under 40 CFR §86.1811-17. The Tier 3 emission standards are equivalent to or cleaner than the current Tier 2, Bin 5 emission standards. However, the Tier 3 rules are found in a different section in the CFR than the Tier 2 rules. Therefore, the TCEQ rules need to be updated to reflect the most current federal Motor Vehicle Emission and Fuel Standards.

The Tier 3 emission standards will be phased in and replace the existing Tier 2 emission standards beginning with Model Year 2017 vehicles. This phase-in schedule requires 60% compliance of all covered vehicle classes by Model Year 2019, 80% compliance by Model Year 2021, and complete transition to the Tier 3 emission standards by Model Year 2022. Some automobile manufacturers have already certified certain Model Year 2016 vehicles to the new Tier 3 emissions standards earlier than required, which has proven problematic for the LIRAP. Because current rule language exclusively refers to Tier 2 emission standards, any vehicles certified to the Tier 3 emission standards are not eligible for purchase with LIRAP replacement assistance even though the engines are certified equivalent to or cleaner than the Tier 2, Bin 5 emission standards. This adopted rulemaking amends the LIRAP rules in §114.7 and §114.64 to incorporate the Tier 3 emission standards into the program requirements as allowed under THSC, §382.210(c).

This adopted rulemaking also amends the LIRAP rules in §114.64 to limit applicants to receive no more than $600 in assistance annually per vehicle to make emissions-related repairs needed to pass the required annual emissions inspection. The required annual emissions inspection is the emissions inspection test that must be performed and passed within 90 days of the vehicle's registration expiration date as a prerequisite for vehicle registration renewal. Repair assistance is intended to bring failing vehicles into compliance with emissions requirements.

Current rule language in §114.64(e) requires a repaired vehicle to pass a safety and emissions inspection retest before the recognized emissions repair facility is reimbursed by the local program administrator. This language also limits local program administrator discretion for payment to cases where the recognized emissions repair facility made repairs and the vehicle still did not pass a subsequent emissions inspection retest. However, local program administrators interpreted this discretion as allowing multiple repair assistance vouchers of up to $600 per voucher for the same vehicle within one year as long as the applicant presented a failing inspection. The TCEQ issued guidance to the program administrators on August 3, 2015, stating that no more than $600 in LIRAP funds may be used for emissions-related repairs per vehicle per year. Under this guidance, the local program administrators may only decide whether to reimburse the cost of the diagnosed emissions-related repairs up to $600, not whether to issue an additional $600 repair voucher to the applicant for subsequent repairs. This guidance was then issued to the participating recognized emissions repair facilities by the program administrators. The adopted amendment to §114.64 reflects this guidance and clarifies the annual limit on repair assistance is no more than $600 in LIRAP funds per vehicle per year.

Another clarifying change that is adopted relates to the definition of "Engine." The LIRAP rules allow participating dismantlers to salvage some parts for resale from the retired vehicles they receive through the LIRAP, but dismantlers are explicitly prohibited from selling the emissions control equipment and engines from retired vehicles. While the rule specifically defines the components of emissions control equipment, the definition of "Engine" does not have the same amount of detail. This adopted rulemaking amends the LIRAP rules in §114.7 to revise the definition of "Engine" as needed to clarify which components of a vehicle retired through the LIRAP may not be sold by a dismantler after the vehicle's retirement.

Section by Section Discussion

Subchapter A: Definitions

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

The commission adopts amended §114.7 to revise definitions as needed for clarity and for consistency with the adopted revisions to Subchapter C. Specifically, the adopted amendment to §114.7(9) more clearly defines the term "Engine" to clarify the components that comprise the engine. The structure of the adopted definition is consistent with the definition of "Emissions control equipment" specified in paragraph (8), which lists the components that must be destroyed through the LIRAP.

In addition, the commission adopts amended §114.7(25) to revise the definition of "Replacement vehicle" to identify the Tier 3 emission standards, as codified in 40 CFR §86.1811-17, as an eligible engine certification for replacement vehicles purchased through the LIRAP. The adopted revision also removes the reference to the publication date of the Tier 2 emission standards in the Federal Register to allow the LIRAP rule to automatically incorporate future changes made to these emission standards by the EPA. The adopted revision does not include a reference to the Federal Register publication date of the Tier 3 emission standards for the same reason. The EPA has published changes to the Tier 3 rules in the Federal Register as recently as April 22, 2016, and may need to make additional technical revisions to the Tier 3 emission standards in the future to address issues occurring during the phase in period, i.e. Model Year 2017 through Model Year 2022. Allowing the LIRAP rules to incorporate future revisions to these federal rules ensures that the LIRAP requirements remain current with the federal certification standards they rely upon.

The commission also adopts amended §114.7 to make non-substantive clarifying changes as needed for accuracy and consistency with the adopted changes to this subchapter.

Subchapter C: Vehicle Inspection and Maintenance; Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program; and Early Action Compact Counties

Division 2: Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program

§114.64, LIRAP Requirements

The commission adopts amended §114.64 to incorporate the Tier 3 emission standards established under 40 CFR §86.1811-17 as an eligibility component for replacement vehicles. The Tier 3 emission standards are set to replace the current Tier 2 emission standards beginning in Model Year 2017. Therefore, integrating the new federal Tier 3 emission standards into the LIRAP rule is necessary to maintain the overall functionality of the program. The tiered certification also serves as a determinant for the vehicle replacement compensation amount. Existing rule language allows up to $3,000 in assistance for vehicles certified Tier 2, Bin 5 and Tier 2, Bin 4 and $3,500 in assistance for vehicles certified at Tier 2, Bin 3 and cleaner Bins. The adopted rule language references the Tier 3 bin equivalents to determine the compensation amount for Tier 3 replacement vehicles. The adopted amendment to §114.64 also removes the publication date of the Tier 2 emission standards in the Federal Register as needed for consistency with the adopted amendment to §114.7(25).

In addition, the commission adopts amended §114.64 to specify that no more than $600 in assistance may be granted annually per vehicle per applicant for emissions-related repairs to pass the required annual emissions inspection as needed to clarify the annual limit on repair assistance.

The commission also adopts amended §114.64 to make non-substantive clarifying changes as needed for accuracy and consistency with the adopted changes to this subchapter and to conform to Texas Register style and formatting requirements.

Final Regulatory Impact Determination

The commission reviewed the adopted rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined that the adopted rulemaking does not meet the definition of a major environmental rule. Texas Government Code, §2001.0225 states that a major environmental rule is 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. Furthermore, while the rulemaking does not constitute a major environmental rule, even if it did, a regulatory impact analysis would not be required because the adopted rulemaking does not meet any of the four applicability criteria for requiring a regulatory impact analysis for a major environmental rule. Texas Government Code, §2001.0225 applies only to a major environmental rule which: 1) exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement of state law, unless the rule is specifically required by federal law; 3) exceeds 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) adopts a rule solely under the general powers of the agency instead of under a specific state law. Specifically, the adopted rulemaking does not meet any of the four applicability criteria listed in Texas Government Code, §2001.0225 because: 1) the rulemaking is not designed to exceed any relevant standard set by federal law; 2) parts of the rulemaking are directly required by state law; 3) no contract or delegation agreement covers the topic that is the subject of this rulemaking; and 4) the rulemaking is authorized by specific sections of THSC, Chapter 382 (also known as the Texas Clean Air Act), and the Texas Water Code, which are cited in the Statutory Authority section of this preamble.

Because the adopted rules place no involuntary requirements on the regulated community, the adopted rules would not 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. In addition, none of these adopted amendments place additional financial burdens on the regulated community.

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 as required in Texas Government Code, §2001.035. 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 commission invited public comment regarding the draft Regulatory Impact Analysis Determination during the public comment period, and no comments 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 purpose of these adopted rules is to amend sections of the Texas Administrative Code, which incorporates the federal Tier 3 emission standards into the program requirements as allowed under THSC, §382.210(c) and limit LIRAP applicants to receive no more than $600 in assistance annually per vehicle to make the emissions-related repairs needed to pass the required annual emissions inspection. The adopted rules substantially advance this stated purpose by amending sections in Chapter 114, Subchapters A and C to include revisions of the definitions, to include the federal Tier 3 emissions standards, and to specify the amount of LIRAP funds to be granted per vehicle per year.

Texas Government Code, §2007.003(b)(4) provides that Texas Government Code, Chapter 2007 does not apply to this adopted rulemaking because it is an action reasonably taken to fulfill an obligation mandated by state law. THSC, Chapter 382 requires the commission with the Texas Department of Public Safety to establish and authorize a commissioner's court of a participating county to implement a LIRAP subject to agency oversight. Additionally, Chapter 382 specifies that the commission shall adopt guidelines that recommend a minimum and maximum amount for repair assistance. Consequently, the adopted 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 adopted rules constitute a "taking" under Texas Government Code, Chapter 2007. Promulgation and enforcement of these adopted rules would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject adopted regulations do not affect a landowner's rights in private real property because this rulemaking would 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. In addition, because the subject adopted 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 would not constitute a taking under Texas Government Code, Chapter 2007. For these reasons, Texas Government Code, Chapter 2007 does not apply to this adopted rulemaking.

Consistency with the Coastal Management Program

The commission reviewed the adopted rulemaking and found the adoption is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(4) relating to rules subject to the Coastal Management Program, and will, therefore, require that goals and policies of the Texas Coastal Management Program (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 amendments are editorial and procedural in nature and will not have a substantive effect on commission actions subject to the CMP and is, therefore, consistent with the CMP goals and policies.

The commission invited public comment regarding the consistency with the CMP during the public comment period and no comments were received.

Effect on Sites Subject to the Federal Operating Permits Program

This rulemaking will not impact facilities with air emissions that have applicable (federal or state) requirements with the Federal Operating Permit (30 TAC Chapter 122).

Public Comment

The commission held a public hearing on October 20, 2016. The comment period closed on October 24, 2016. The commission received a written comment from the League of Women Voters of Texas (LWV-TX) and both written and oral comments from the North Central Texas Council of Governments (NCTCOG).

Response to Comments

Comment

The LWV-TX supported the proposed changes to both §114.7 and §114.64 and appreciated the clarity in definitions and for the distinction between the Tier 2 and Tier 3 rules and the phasing in of the Tier 3 emission standards. The NCTCOG supported the proposed changes to the rule that allow vehicles certified to the Tier 3 emission standards to qualify as eligible replacement vehicles through the LIRAP.

Response

The commission appreciates the LWV-TX and NCTCOG's support of this rulemaking and the incorporation of the Tier 3 emission standards into the LIRAP.

Comment

NCTCOG commented that removing references to the Federal Register publication date of the Tier 2 and Tier 3 emissions standards in §114.64 to allow for the incorporation of future published changes to these standards is a positive approach and recommended changing the rule language to be more flexible with respect to the automatic incorporation of future emission standards, provided they meet or exceed the Tier 2 Bin 5 emissions standards, in order to eliminate the need for future rulemaking on this issue. Similarly, NCTCOG supported the changes specifying replacement vehicle Tier 3 Bins that qualify for $3,500 assistance and recommended generalizing the rule language such that future emission standards are automatically granted eligibility for $3,500 in LIRAP assistance without the need for additional rulemaking if the new standard meets or exceeds the Tier 2 Bin 3 emissions standards.

Response

The commission has not made the suggested change to generalize the rule language such that unknown future new emission standards are automatically incorporated into the LIRAP rule. TCEQ staff reviewed the Tier 3 emission standards and determined that they are equivalent to or cleaner than the Tier 2 Bin 5 emission standards set as the replacement vehicle eligibility requirement in THSC, §382.210. Similarly, TCEQ staff would need to review any new vehicle emission standards that are adopted by the EPA after the full implementation of the current Tier 3 emission standards to determine the applicability of any new standard for use in the LIRAP. The commenter is correct that removing references to the Tier 2 and Tier 3 Federal Register publication dates would allow for the incorporation of published changes and updates to the existing Tier 2 and Tier 3 emission standards. The commission adopted changes to the rule language to remove the references to the publication dates as proposed.

Comment

NCTCOG recommended allowing leases for replacement vehicles with a minimum three-year term. NCTCOG commented that the THSC and the Texas Administrative Code applicable to LIRAP does not explicitly address leases and that the Texas Transportation Code, §503.005 referenced in the definition of proof of sale is applicable to both leases and traditional purchases. NCTCOG further commented that leasing now accounts for nearly one third of new vehicle transactions and as it grows in popularity, it could negatively affect program participation.

Response

The commission has not made the suggested change to the rule as it is outside the scope of this rulemaking. The commission did not propose to revise §114.64 regarding leased vehicles and other interested parties would not have the opportunity to review and comment on the suggested change.

Comment

NCTCOG recommended increasing the repair assistance amount above the current $600 limit to help assure the continued relevance of the program as inflation results in higher repair costs over time. NCTCOG commented that the repair assistance amount has not increased since the program began 14 years ago while the total average repair costs over the same time frame increased by 26%.

Response

The commission has not made the suggested change to the rule. The commission adopted the amendments to §114.64 to specify that no more than $600 in emissions-related repair assistance may be granted annually per vehicle per applicant to clarify the annual limit on repair assistance. The commission does not consider it necessary to increase the amount of repair assistance above the current limit of $600 since the yearly average cost of LIRAP vehicle emissions repairs/retrofits reported to the TCEQ by the participating counties' local program administrators in Fiscal Year 2016 was $542. In addition, further evidence that the $600 limit for repair assistance remains appropriate can be derived from the results of TCEQ's most recent biennial emission inspection test fee analysis, completed as required by THSC, §382.202(f), using data collected in 2016 from emissions inspection and repair stations in the Houston-Galveston-Brazoria and Dallas-Fort Worth vehicle emissions I/M program areas. The analysis of the 2016 data indicated that the average cost of a repair following a failed emissions inspection at On-Board Diagnostics (OBD) only inspection stations was $224 with a median of $200; for stations conducting both Acceleration Simulation Mode and OBD inspections, the average was $270, also with a median of $200.

Comment

NCTCOG recommended changing the LIRAP eligibility requirement that vehicles must have a failing emissions inspection within the preceding 30 days of the application date to the preceding 90 days before the application date to be consistent with the new single-sticker timeframe, which now requires vehicle owners to obtain a passing vehicle inspection within 90 days prior to the expiration of vehicle registration in order to renew.

Response

The commission has not made the suggested change as it is outside the scope of this rulemaking. The commission did not propose to revise §114.64 to extend the time period that a vehicle owner must demonstrate the vehicle has failed an emissions inspection before submitting an application for LIRAP assistance. Other interested parties would not have the opportunity to review and comment on the suggested change.

SUBCHAPTER A. DEFINITIONS

30 TAC §114.7

Statutory Authority

The amendment is adopted under Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties under the TWC, §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC, and other laws of this state; and TWC, §5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The amendment is also adopted under Texas Health and Safety Code (THSC), §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; and THSC, §382.011, which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air. Finally, the amendment is adopted under THSC, §382.209, which establishes and authorizes the LIRAP; THSC, §382.210, which provides the implementation guidelines for the LIRAP; and THSC, §382.213, which outlines the requirements for disposition of retired vehicles.

The adopted amendment implements THSC, §§382.011, 382.017, 382.209, 382.210, and 382.213.

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 February 17, 2017.

TRD-201700676

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: March 9, 2017

Proposal publication date: September 23, 2016

For further information, please call: (512) 239-2613


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

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

30 TAC §114.64

Statutory Authority

The amendment is adopted under Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties under the TWC, §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC, and other laws of this state; and TWC, §5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. The amendment is also adopted under Texas Health and Safety Code (THSC), §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act; and THSC, §382.011, which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air. Finally, this rulemaking is adopted under THSC, §382.209, which establishes and authorizes the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program; THSC, §382.210, which provides the implementation guidelines for the LIRAP; and THSC, §382.213, which outlines the requirements for disposition of retired vehicles.

The adopted amendment implements THSC, §§382.011, 382.017, 382.209, 382.210, and 382.213.

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 February 17, 2017.

TRD-201700678

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: March 9, 2017

Proposal publication date: September 23, 2016

For further information, please call: (512) 239-2613