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art.016/3

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     ARTICLE 16

RELATING TO CLEAN DIESEL PROGRAM

     SECTION 1. Chapter 31-47.3 of the General Laws entitled "The Diesel Emissions

Reduction Act" is hereby amended by adding thereto the following section:

     31-47.3-5.1. Establishment of the Rhode Island clean diesel fund. -- (a) There is

hereby authorized and created within DEM a Rhode Island clean diesel fund for the purpose of

reducing emissions from heavy-duty diesel engines operating on state roads and helping

companies improve supply chain efficiency as described in the United States Environmental

Protection Agency's SmartWay Program. The clean diesel fund will solicit projects that undertake

eligible clean diesel measures and award grants from the fund to reimburse applicants for

undertaking these measures.

     (b) DEM shall promulgate rules and regulations pursuant to chapter 35 of title 42

containing a list of eligible clean diesel measures which shall include, but not be limited to, the

following:

     (1) Aerodynamic technologies;

     (2) Clean alternative fuel conversions;

     (3) Diesel emission reduction solutions;

     (4) Engine repowers;

     (5) Idle reduction technologies;

     (6) Low rolling resistance tires;

     (7) Vehicle replacements;

     (8) Replacement or upgrades of transport refrigeration units or transport refrigeration unit

generator sets; and

     (9) Routine maintenance shown to improve fuel efficiency or decrease emissions

including, but not limited to, oil changes and cleaning of diesel particulate filters.

     (c) Equipment eligible for grant funding must:

     (1) Be intended for on-road use;

     (2) Be registered with the Rhode Island division of motor vehicles;

     (3) Be kept or garaged in Rhode Island as indicated on the vehicle registration issued by

the division of motor vehicles;

     (4) Have been certified to DEM that fifty percent (50%) or more of vehicle miles

traveled, or hours of operation, shall be projected to be in Rhode Island for at least five (5) years

following the grant award; and

     (5) Meet any other criteria established in DEM rules and regulations promulgated by

DEM pursuant to Chapter 35 of title 42.

     (d) Administrative costs. - The cost of administration and outreach by DEM shall not in

any year exceed two hundred thousand dollars ($200,000) or ten percent (10%) of the fund

appropriation, whichever is greater.

     (e) Project priority list. - DEM shall promulgate rules and regulations pursuant to chapter

35 of title 42 that contain a project priority list for the Rhode Island clean diesel fund and the

process through which an eligible applicant may submit an application for inclusion of a project

on the project priority list. Upon issuance of the project priority list by DEM, the project priority

list shall be used by DEM to determine the order in which grants shall be awarded.

     (f) Awarding of grants. - DEM shall only award grant funds after verifying that the

eligible measures outlined in the application have been implemented successfully by the

applicant. If the final invoice price of an eligible measure is less than the initial quoted price, the

grant award shall be reduced accordingly. Grants shall not be awarded to aid in compliance with

existing mandates in state or federal law.

     (g) Grant amounts. - For each eligible measure implemented by the applicant, DEM shall

only issue grants for up to fifty percent (50%) of the total project cost. DEM shall promulgate

rules and regulations pursuant to chapter 35 of title 42 that set the exact reimbursement amount

for each eligible measure. The total project cost shall include both the material and labor needed

to implement each eligible measure. No one applicant shall be awarded more than twenty-five

percent (25%) of the grant funds appropriated during a given fiscal year, provided that the total

grants requested exceed the amount appropriated. If the total amount of grants requested is less

than the amount appropriated in a given fiscal year, DEM may allocate more than twenty-five

percent (25%) of the fund to one applicant.

     (h) Vehicle replacements. - For projects that propose to replace vehicles, the following

conditions shall be met:

     (1) The applicant shall replace an older vehicle with a newer vehicle certified to more

stringent emissions standards than the engine or vehicle being replaced;

     (2) The vehicle being replaced is a model year at least ten (10) years old;

     (3) The vehicle being replaced has a gross vehicle weight rating of thirty-three thousand

one pounds (33,001 lbs.) or greater;

     (4) The replacement vehicle purchased by the applicant is a model year no more than

three (3) years old;

     (5) The replacement vehicle has a gross vehicle weight rating of thirty-three thousand one

pounds (33,001 lbs.) or greater;

     (6) The replacement vehicle must be operable with remaining useful life as defined in

rules and regulations promulgated by DEM pursuant to chapter 35 of title 42.

     (7) The engine of the vehicle being replaced must be scrapped or otherwise rendered

inoperable in a manner consistent with rules and regulations promulgated by DEM pursuant to

chapter 35 of title 42;

     (8) The amount of funding requested must contain the sale price of the vehicle, not

including any interest or other finance charges; and

     (9) A vehicle purchased on a lease must be operated for the life of the project, with the

life of the project being included in the application approved by DEM.

     (i) Transport refrigeration unit replacement. - For projects that propose to replace or

upgrade transport refrigeration units or transport refrigeration unit generator sets, the following

conditions shall be met:

     (1) The transport refrigeration unit or transport refrigeration unit generator set being

replaced or upgraded is powered by a diesel engine;

     (2) The transport refrigeration unit or transport refrigeration unit generator set being

replaced or upgraded is being used on a vehicle with a gross vehicle weight rating of thirty-three

thousand one pounds (33,001 lbs.) or greater;

     (3) The replacement or upgraded transport refrigeration unit or transport refrigeration unit

generator set produces fewer emissions than the equipment being replaced or upgraded; and

     (4) The replacement or upgraded transport refrigeration unit or transport refrigeration unit

generator set meets emission criteria established by DEM in rules and regulations promulgated by

DEM pursuant to chapter 35 of title 42.

     (i) Reporting. - Projects receiving grant funding from DEM shall be subject to any

reporting and data collection requirement specified in DEM rules and regulations promulgated by

DEM pursuant to chapter 35 of title 42.

     (j) Penalties. - Applicants awarded funds under this program may be penalized for

breaching the terms of their grant award or for other project non-performance through the:

     (1) Cancellation of the grant award;

     (2) Recovery of all or a portion of the grant award;

     (3) Other fiscal penalties on an applicant based on the severity of non-performance and as

specified in rules and regulations promulgated by DEM pursuant to chapter 35 of title 42; or

     (4) Prohibiting an applicant or a specific vehicle from participating in the program in the

future.

     (k) Appropriation. - The general assembly shall annually appropriate such funds as it

deems appropriate for this program.

     SECTION 2. This article shall take effect upon passage.