State Budget Issues – State Fails to Return LIRAP Fees to Counties

February 24, 2020

Legislative News

  • Share this:

Fee collections from the Low-Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), also known as the AirCheckTexas program, totaling an estimated $151.2 million as of January 2020, are being held by the state instead of being returned to counties.

The LIRAP/AirCheckTexas program was first authorized in 2001 by House Bill 2134 by Rep. Warren Chisum (R-Pampa), 77th Legislature, to improve air quality in areas of the state in non-attainment or near non-attainment of the federal ozone standard. The program provided incentive payments to eligible persons in participating counties to replace or repair higher emission vehicles. Affected counties were authorized to participate in the program, but not required to do so. An auto emissions inspection fee assessed by participating counties funded the program. The Auto Emissions Inspection, On-Board Diagnostic fee was $2 or $6 depending on the county and was collected during vehicle registrations. The fees had to be returned to the participating counties through an appropriation to the Texas Commission on Environmental Quality (TCEQ). Counties that participated in the program were Brazoria, Collin, Dallas, Denton, Ellis, Fort Bend, Galveston, Harris, Johnson, Kaufman, Montgomery, Parker, Rockwall, Tarrant, Travis and Williamson.

Senate Bill 12 by Sen. Kip Averitt (R-Waco), 80th Legislature, significantly altered the program, raising income eligibility for vehicle owners to 300% of the federal poverty level, increasing the incentive amounts for replacement vehicles, and establishing partnerships with automobile dealers. SB 12 also authorized participating counties to use up to $5 million per year of LIRAP receipts for local initiative projects (LIPs) that improve air quality. Eligible projects include emissions enforcement task forces, transportation improvements such as signal retiming and public transit, and funding local law enforcement efforts to reduce inspection sticker fraud.

Prior to the state's 2012-13 biennial budget, appropriations for the LIRAP/AirCheckTexas program and LIPs exceeded the level of fees collected for the program, approximately $40 million in annual revenue compared to $50 million in annual appropriations. The program was cut by 87.5% in the 2012-13 budget, and it was funded at this reduced level until the 2016-17 biennial budget, when funding was restored to nearly $50 million per year. Unfortunately, Governor Abbott vetoed the funding for LIRAP/ AirCheckTexas in the 2018-19 biennial budget. As a result, all participating counties have terminated collection of the fee since July 1, 2018.

Given the uncertainty of state funding for the program, a significant portion of unspent fees assessed on vehicle owners in the participating counties remains in the state treasury, specifically $151.2 million according to TCEQ. Returning these funds to the affected counties would require action by the 87th Legislature, most likely through both legislation and a corresponding appropriation.

For more information contact Zelma Smith at (800) 456-5974.