Oklahoma Incentives and Laws

Last Updated July 2009

Oklahoma is the home of the Central Oklahoma (www.okcleancities.org) and Tulsa Area (www.tulsacleancities.com) Clean Cities Coalitions. Coordinator contact information is listed in the Points of Contact section.

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)

Biodiesel Production Tax Credit

For tax years beginning before January 1, 2013, a biodiesel (B100) production facility is allowed a tax credit of $0.20 per gallon of biodiesel produced. An eligible biodiesel facility must have produced at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2008. Producers are also eligible for an expansion credit of $0.20 per gallon of biodiesel produced in excess of the original nameplate capacity that results from expansion of the facility before December 31, 2008. This tax credit can be used for up to 60 months beginning with the first month for which production from the expanded facility is eligible and ending before January 1, 2013. Beginning January 1, 2013, a biodiesel facility may receive a credit of $0.075 per gallon of biodiesel for new production for a period not to exceed 36 consecutive months. To be eligible for this credit, the facility must not have received credits prior to January 1, 2013, or must have expanded the capacity by at least 2 million gallons, first placed into service after January 1, 2013. If the credit allowed exceeds the amount of income taxes due, the excess amount may be carried forward as a credit against subsequent income tax liability for a period not to exceed five years. Additional restrictions apply. (Reference House Bill 1956, 2008, and Oklahoma Statutes 68-2357.67)

Ethanol Production Tax Credit

For tax years beginning before January 1, 2013, an ethanol production facility is allowed a tax credit in the amount of $0.20 per gallon of ethanol produced, for 60 months beginning with the first month in which the facility is eligible to receive such credit. The credit may only be claimed if the ethanol facility maintains an average production rate of at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2010. Producers are also eligible for an expansion credit of $0.20 per gallon of ethanol produced in excess of the original nameplate capacity that results from expansion of the facility before December 31, 2008. This tax credit can be used for up to 60 months beginning with the first month for which production from the expanded facility is eligible and ending before January 1, 2013. Beginning January 1, 2013, an ethanol facility is eligible for a credit of $0.075 per gallon of ethanol, before denaturing, for new production for a period not to exceed 36 consecutive months. To be eligible for this credit, the facility must not have received credits prior to January 1, 2013, or must have expanded the capacity by at least 2 million gallons, first placed into service after January 1, 2013. Additional restrictions apply. (Reference Oklahoma Statutes 68-2357.66)

Ethanol Fuel Retailer Tax Credit

A retailer of ethanol-blended fuel (blended gasoline consisting of not more than 15% ethyl alcohol by volume) may claim a motor fuel tax credit of $0.016 for each gallon of ethanol-blended fuel sold in Oklahoma, if the retailer provides a price reduction to the purchaser of the ethanol fuel in the same amount. This incentive is effective unless the federal government mandates the use of reformulated fuel in an area within Oklahoma that is in non-attainment with the National Ambient Air Quality Standards. (Reference Oklahoma Statutes 68-500.10-1)

Biofuels Tax Exemption

An individual that produces biofuels or biodiesel from feedstock grown on property and used in a vehicle owned by the same individual are exempt from the state motor fuel excise tax. (Reference Oklahoma Statutes 68-500.4 and 68-500.10)

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.

Point of Contact

Carolyn Sullivan
Energy Program Manager
Oklahoma Department of Commerce, State Energy Office
Phone (405) 815-5347
carolyn_sullivan@odoc.state.ok.us

Biofuels Research and Development Promotion

The Oklahoma Bioenergy Center (Center) was established within the Department of Commerce to serve as a strategic partnership in the field of bioenergy research in order to assist Oklahoma in being a recognized leader in the fields of research and production of biofuels, bioenergy and related biobased products; advance research capacity of biofuels; enable the competitive and sustainable production of liquid biofuels, including ethanol; and contribute to the national research effort to enable the U.S. to achieve prescribed levels of petroleum independence. The Center represents a research and economic development collaboration between the University of Oklahoma, Oklahoma State University, and the Samuel Roberts Noble Foundation.

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)

Idle Reduction Weight Exemption

Any vehicle equipped with idle reduction technology may exceed the state's gross vehicle weight limits by up to 400 pounds to compensate for the additional weight of the added idle reduction technology. The additional weight may not exceed the actual certified weight of the idle reduction unit. (Reference House Bill 1813, 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)

Medium-Speed Vehicles Access to Roadways

A medium-speed electric vehicle is defined as any self-propelled, electronically powered four-wheeled motor vehicle, whose top speed is greater than 30 miles per hour (mph) but not greater than 35 mph. Medium-speed electric vehicles must be registered according to the Oklahoma Vehicle License and Registration Act and must meet National Highway Traffic Safety Administration safety standards for low-speed electric vehicles as set forth in Title 49, Code of Federal Regulations, Section 571.500. Medium-speed vehicles may be operated on roadways with a posted speed limit of up to 45 miles per hour but are not permitted to travel on any highway in the state which is a part of the National System of Interstate and Defense Highways. (Reference Oklahoma Statutes 47-1102, 47-1105, and 47-1151.4)

Ethanol Labeling Requirement

Motor fuel containing more than 1% ethanol or methanol may not be sold or offered for sale from a motor fuel dispenser unless the individual selling or offering the fuel for sale prominently displays a label on the pump stating the fuel "Contains Ethanol" or "Contains Methanol" as applicable. The label must be displayed on the face of each motor fuel pump on which the price of the motor fuel mixture sold from the pump is displayed, as required by Oklahoma Statute; and must be displayed in a clear, conspicuous, and prominent manner. If a motor fuel pump dispenses fuel that contains at least 10% ethanol or 5% methanol, the label must also state the percentage of ethanol or methanol by volume. In addition, the person selling motor fuel or offering it for sale is required to provide the following information to the fuel user if requested: 1) the percentage of ethanol contained in the motor fuel being sold; 2) the percentage of methanol contained in the motor fuel being sold; and 3) if the motor fuel contains methanol, the types and percentages of associated cosolvents contained in the motor fuel being sold. (Reference Oklahoma Statutes 52-347)

Biofuels Development and Promotion

The Oklahoma Biofuels Development Act was created to encourage the processing, market development, promotion, distribution, and research of fuels derived from grain, ethanol or ethanol components, biodiesel, bio-based lubricants, co-products, or by-products. The Oklahoma Biofuels Development Advisory Committee will serve until June 1, 2010, to conduct a systematic review and study of the ethanol and biodiesel industry in Oklahoma and other states, study the feasibility of developing and enhancing the ethanol and biodiesel industry in Oklahoma, and otherwise encourage market development, promotion, distribution, and research on products derived from grain, ethanol or ethanol components, bio-based products, co-products, or by-products. (Reference Oklahoma Statutes 2-1950.10 and 2-1950.11)

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)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs manufactured in compliance with the National Highway Traffic Safety Administration standards for low-speed vehicles in Title 49 of the Code of Federal Regulations, section 571.500, are allowed to operate on Oklahoma streets and highways with posted speed limits of up to 35 miles per hour. (Reference Oklahoma Statutes 47-11-805.1)

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)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Oklahoma.

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Yvonne Anderson Clean Cities Coordinator	Central Oklahoma Clean Cities Coalition	Phone:(405) 234-2264 x175 Fax:(405) 234-2200
Nancy Graham Clean Cities Co-Coordinator	Tulsa Area Clean Cities Coalition	Phone:(918) 584-7526 Fax:(918) 579-9518
Neil Kirschner Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-5793 Fax:
Carolyn Sullivan Energy Program Manager	Oklahoma Department of Commerce, State Energy Office	Phone:(405) 815-5347 Fax:
Vaughn Clark Director, Office of Community Development	Oklahoma Department of Commerce	Phone:(405) 815-5370 Fax:(405) 815-5344
James Orsulak Market Manager for Alternative Fuels	Clean Energy Fuels	Phone:(303) 322-4600 Fax:(303) 322-4644
Anna Friend Transportation Operations Specialist	U.S. General Services Administration	Phone:(303) 236-7221 Fax:(303) 236-7590
Sandra Rennie Mobile Source Team Leader, Region 6	U.S. Environmental Protection Agency	Phone:(214) 665-7367 Fax:(214) 665-7263