Sec. 392.005.  ELIGIBILITY OF PROJECTS FOR GRANTS.  (a)  The commission by rule shall establish criteria for prioritizing projects eligible to receive grants under this chapter.  The commission shall review and revise the criteria as appropriate.
(b)  To be eligible for a grant under the program, a project must:
(1)  result in a reduction in emissions of nitrogen oxides or other pollutants, as established by the commission, of at least 25 percent, based on:
(A)  the baseline emission level set by the commission under Subsection (g); and
(B)  the certified emission rate of the new vehicle; and
(2)  replace a vehicle that:
(A)  is an on-road vehicle that has been owned, leased, or otherwise commercially financed and registered and operated by the applicant in Texas for at least the two years immediately preceding the submission of a grant application;
(B)  satisfies any minimum average annual mileage or fuel usage requirements established by the commission;
(C)  satisfies any minimum percentage of annual usage requirements established by the commission; and
(D)  is in operating condition and has at least two years of remaining useful life, as determined in accordance with criteria established by the commission.
(c)  As a condition of receiving a grant, the qualifying vehicle must be continuously owned, registered, and operated in the state by the grant recipient until the earlier of the fifth anniversary of the activity start date established by the commission or the date the vehicle has been in operation for 400,000 miles after the activity start date established by the commission.  Not less than 75 percent of the annual use of the qualifying vehicle, either mileage or fuel use as determined by the commission, must occur in the state.
(c-1)  For purposes of Subsection (c), the commission shall establish the activity start date based on the date the commission accepts verification of the disposition of the vehicle being replaced.
(d)  The commission shall include and enforce the usage provisions in the grant contracts.  The commission shall monitor compliance with the contract requirements, including submission of reports on at least an annual basis, or more frequently as determined by the commission.
(e)  The commission by contract may require the return of all or a portion of grant funds for a grant recipient's noncompliance with the usage and percentage of use requirements under this section.
(f)  A vehicle or engine replaced under this program must be rendered permanently inoperable by crushing the vehicle, by making a hole in the engine block and permanently destroying the frame of the vehicle, or by another method approved by the commission that permanently removes the vehicle from operation in this state. The commission shall provide a means for an applicant to propose an alternative method of complying with the requirements of this subsection.  The commission shall enforce the requirements of this subsection.
(g)  The commission shall establish baseline emission levels for emissions of nitrogen oxides for on-road vehicles being replaced.  The commission may consider and establish baseline emission rates for additional pollutants of concern, as determined by the commission.
(h)  Mileage requirements established by the commission under Subsection (b)(2)(B) may differ by vehicle weight categories and type of use.
(i)  The executive director may waive the requirements of Subsection (b)(2)(A) on a finding of good cause, which may include a waiver for short lapses in registration or operation attributable to economic conditions, seasonal work, or other circumstances.
Redesignated from Health and Safety Code, Chapter 391 by Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 27.001(30), eff. September 1, 2011.
Amended by: 
Acts 2017, 85th Leg., R.S., Ch. 755 (S.B. 1731), Sec. 8(m), eff. August 30, 2017.