Oklahoma Natural Gas Laws and Incentives
State Incentives
Alternative Fuel Vehicle (AFV) Tax Credit
For tax years beginning before January 1, 2015, Oklahoma provides a one-time income tax credit for 50% of the cost of converting a vehicle to operate on an alternative fuel, or for 50% of the incremental cost of purchasing a new Original Equipment Manufacturer AFV. The state also provides a tax credit for 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new and must not have been previously used to modify or retrofit any vehicle. The alternative fuels eligible for the credit are compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen fuel cell, and electricity. For qualified electric vehicles propelled by electricity only, the credit is based on the full purchase price of the vehicle. For vehicles equipped with an internal combustion engine, such as a hybrid electric vehicle, the credit is based on the portion of the motor vehicle which is attributable to the propulsion of the vehicle by electricity. For more information, see Oklahoma Income Tax Form 511CR (PDF 219 KB). (Reference House Bill 1949, 2009, and Oklahoma Statutes 68-2357.22) Download Adobe Reader
Alternative Fueling Infrastructure Tax Credit
For tax years beginning before January 1, 2015, the state provides a tax credit for up to 75% of the cost of installing alternative fueling infrastructure. Alternative fuels eligible for the credit include compressed natural gas (CNG), liquefied natural gas, liquefied petroleum gas, hydrogen, and electricity. The infrastructure must be new and must not have been previously installed or used to fuel alternative fuel vehicles. The tax credit may be carried forward for up to five years. Beginning January 1, 2010, a tax credit is also available for up to 50% of the cost of installing a residential CNG fueling system, up to $2,500. (Reference House Bill 1949, 2009, and Oklahoma Statutes 68-2357.22)
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans
The Oklahoma Department of Central Services has an Alternative Fuels Conversion Loan program to help convert government-owned fleets to operate on alternative fuels. This program provides 0% interest loans for vehicle conversions, for the construction of AFV fueling infrastructure, and for the incremental cost associated with the purchase of an Original Equipment Manufacturer AFV. The program provides up to $10,000 per converted or newly purchased vehicle and up to $150,000 for the development or installation of fueling infrastructure. Repayment of the loan has a maximum seven-year period and repayment is collected through a surcharge in the amount equivalent to the per gallon fuel cost savings from using an alternative fuel. If the price of the alternative fuel does not remain below the price of the conventional fuel that was replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities. (Reference Oklahoma Statutes 74-130.4 and 74-130.5)
Alternative Fuel Vehicle (AFV) Loans
Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an Original Equipment Manufacturer AFV, and for the installation of AFV fueling infrastructure. The repayment of the loan has a maximum six-year period.
State Laws and Regulations
Access to State Alternative Fueling Stations
The Fleet Management Division within the Oklahoma Department of Central Services is authorized to construct, install, acquire, operate, and provide alternative fueling infrastructure for use by state agencies and local governments as well as the public in areas of the state where public access to alternative fuel infrastructure is not readily available. The Department of Central Services must discontinue public access to their fueling infrastructure if a privately owned alternative fueling station opens within a five mile radius. Alternative fuels include natural gas, liquefied petroleum gas, ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference House Bill 1952, 2009)
State Energy Efficiency and Conservation Plans
Each state agency is required to develop and implement an energy efficiency and conservation plan. These agencies should make every effort to include in their plans purchasing preferences for vehicles that utilize alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Senate Bill 833, 2009)
Natural Gas Vehicle (NGV) Promotion
The Oklahoma state legislature urges the U.S. Environmental Protection Agency to take regulatory steps that will encourage the use of NGVs. Recommended steps include revising and streamlining aftermarket conversion certification requirements for small volume manufacturers; waiving requirements for re-certifying natural gas engine conversion kits if the kit has been previously certified for a vehicle model and neither the kit nor the specific vehicle model have substantially changed; providing additional guidance to small volume manufacturers regarding conversion of older vehicle models; and continuing NGV research, development, and demonstration. (Reference House Concurrent Resolution 1019, 2009)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
Under the Alternative Fuels Conversion Act (Act), all school and government vehicles may be converted to operate on an alternative fuel, and all school districts should consider only purchasing school vehicles which have the capability to operate on an alternative fuel. The Act also requires all school and government vehicles capable of operating on an alternative fuel to use the fuel whenever a fueling station is in operation within a five-mile radius of the respective department or district and the price of the alternative fuel is cost competitive. If school and government vehicles must be fueled outside the five-mile radius and no fueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes 74-130.3)
Alternative Fuel Labeling Requirement
In lieu of the motor fuel excise tax, Oklahoma imposes an annual flat fee on motor vehicles including passenger automobiles, pickup trucks, vans and heavy-duty vehicles using liquefied petroleum gas (LPG), compressed natural gas (CNG), liquefied natural gas (LNG), methanol, or blends of 85% methanol and 15% gasoline (M85). LPG vehicles weighing less than 2,000 pounds (lbs.) gross vehicle weight rating (GVWR) are taxed at a rate of $50 per vehicle per year. CNG, LNG, methanol, and M85 vehicles weighing less than 2,000 lbs. GVWR are taxed at a rate of $100 per vehicle per year. LPG, CNG, LNG, methanol, and M85 vehicles weighing more than 2,000 lbs GVWR are taxed at a rate of $150 per vehicle per year. If the vehicle is acquired or converted to run on the alternative fuel after July 1 of the tax year, the flat fee is half of the above-mentioned amount. Vehicles must display a decal issued on a yearly basis by the Oklahoma Tax Commission. (Reference Oklahoma Statutes 68-723)
Alternative Fuel Vehicle (AFV) Technician Training
The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in fueling AFVs and in the conversion of any engine to operate on an alternative fuel. This includes Original Equipment Manufacturer engines dedicated to operate on an alternative fuel. Electric vehicles (EVs), electric charging stations, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)
