S. B. 513, enacted during the 1993 state legislative session, provided the legal framework for air quality nonattainment areas in the state of Texas to establish independent Area Emission Reduction Credit Organizations (AERCOs). Under this provision, the Texas Commission on Environmental Quality (TCEQ) granted the Houston-Galveston Area Council's (H-GAC) petition to establish an AERCO on March 23, 1994. H-GAC created an AERCO to promote the improvement of air quality while helping to mitigate the adverse impacts of control strategies on economic development in the Houston-Galveston region. AERCO will accomplish these goals by administering the Clean School Bus Houston program, accepting Supplemental Environmental Project funds (SEPs) for various projects, and acquiring and distributing emission reduction credits (ERCs). These projects and programs will be used to help meet reasonable further progress State Implementation Plan (SIP) requirements and for economic development purposes.
The federal Clean Air Act mandates that new or expanding industry must "offset", or reduce, permissible emissions by a ratio of 1.3 to 1 in the eight county Houston-Galveston non-attainment area. This means an industry considering expanding or locating in the region which may be legally permitted to emit 100 tons per year of pollutants, would have to locate 130 tons per year of emission reductions prior to approval to build or expand. AERCO could help such industries locate and obtain these necessary emission reduction credits.