(a) For purposes of this section, the following definitions apply:

1. (1) “Continued use” means the continued operation of the diesel engine from the diesel-powered on-track equipment as an internal combustion engine to provide power for on-track equipment or any other purpose.
2. (2) “Decommission” means to permanently cease the service of on-track equipment when the public entity owning that on-track equipment replaces it with lower emission on-track equipment.
3. (3) “Diesel-powered on-track equipment” means any locomotive or any other car, rolling stock, equipment, or other device that is operated on stationary rails and has a diesel engine.

(c) A public entity may engage in a transaction otherwise prohibited by subdivision (b) if both of the following criteria are satisfied:

1. (1) The diesel-powered on-track equipment meets any of the following conditions:

   1. (A) The equipment is deemed to be in Tier 2, Tier 3, or Tier 4, as designated by the United States Environmental Protection Agency.
   2. (B) The equipment produces emissions equivalent to any equipment within any of the tiers described in subparagraph (A).
   3. (C) The diesel engine is removed from the equipment.
2. (2) The public entity authorizes the transaction in a public hearing.