Texas Incentives and Laws

Last Updated August 2009

Texas is the home of the Alamo Area (www.aacog.com/cleancities), Central Texas (www.cityofaustin.org/cleancities), Dallas/Fort Worth (www.nctcog.org/cleancities), East Texas (www.netac.org/283/clean-cities.htm), Greater Houston (www.houston-cleancities.org), and South East Texas Clean Cities Coalitions. Coordinator contact information is listed in the Points of Contact section.

State Incentives

Heavy-Duty Natural Gas Vehicle (NGV) Grants

To encourage fleets to increase their use of heavy-duty NGVs, the Texas General Land Office (GLO) has an NGV Initiative Grant Program available for public-sector partners in certain Texas counties. Private fleets also may be eligible particularly those that operate directly under contract for government work or do other government business. The program is funded with a Texas Emissions Reduction Plan grant through the Texas Commission on Environmental Quality. A variety of vehicles, including street sweepers, forklifts, buses, and garbage trucks, are eligible for grants to help cover the cost of replacing diesel vehicles with NGVs. For more information about the program and eligible counties, see the NGV Initiative Grant Program Web site.

Point of Contact

Soll Sussman
Alternative Fuels Program Coordinator
Texas General Land Office, Renewable Energy Division
Phone (512) 463-5039
Fax (512) 463-9211
soll.sussman@glo.state.tx.us
http://www.glo.state.tx.us/energy/altfuels/index.html

Clean Vehicle and Equipment Grants

The Texas Emissions Reduction Plan (TERP) provides grants for various types of clean air projects in 41 counties to improve air quality in the state's non-attainment areas. Grants are available to purchase, convert, or repower on- and off-road vehicles and equipment. For complete information on the types of projects and expenses that may be eligible for a grant, refer to the TERP Web site. (Reference Texas Statutes, Health and Safety Code 386)

Point of Contact

Steve Dayton
Team Leader, Grant Contract Development
Texas Commission on Environmental Quality
Phone (512) 239-6824
Fax (512) 239-0077
sdayton@tceq.state.tx.us
http://www.terpgrants.org

Texas Clean Fleet Program

Beginning in 2010, the Texas Commission on Environmental Quality (TCEQ) will administer the Texas Clean Fleet Program (Program), which encourages owners of fleets containing diesel vehicles to permanently remove the vehicles from the road and replace them with alternative fuel or hybrid electric vehicles. Grants will be available to fleets to offset the incremental cost of such replacement projects. An entity that operates a fleet of at least 100 vehicles and places 25 or more qualifying vehicles in service for use entirely in Texas during a given calendar year is eligible to participate in the Program. Qualifying alternative fuel or hybrid electric vehicle replacements must: result in a reduction of emissions of nitrogen oxides or other pollutants, as established by the TCEQ, by at least 25% as compared to baseline levels; meet established minimum fuel economy guidelines; and meet other requirements as established by TCEQ. Neighborhood electric vehicles do not qualify under this Program. This Program expires August 31, 2017. (Reference Senate Bill 1759, 2009, and Texas Statutes, Health and Safety Code 391)

Alternative Fuel Grants

The Texas Emissions Reduction Plan (TERP) provides grants for alternative fuel and advanced technology demonstration and infrastructure projects under the New Technology Research and Development (NTRD) Program, which provides incentives to encourage and support research, development, and commercialization of technologies that reduce pollution. For more information, see the NTRD Program Web site.The NTRD Program is administered by the Texas Environmental Research Consortium, with support from the Houston Advanced Research Center from 2006 to 2009. The Texas Commission on Environmental Quality will assume administration in 2010. (Reference Texas Statutes, Health and Safety Code 386)

Point of Contact

Yiqun Huang, PhD
Program Director, New Technology Research and Development
Houston Advanced Research Center
Phone (281) 364-4036
Fax (281) 363-7935
yhuang@harc.edu
http://www.harc.edu

Ethanol, Biodiesel, and Renewable Diesel Production Grants

Grants are available to qualified producers in the amount of $0.20 for the portion of ethanol, biodiesel, or renewable diesel produced from renewable resources in each gallon of fuel for each registered plant for up to ten years for and up to 18 million gallons per fiscal year. (Reference House Bill 2582, 2009, and Texas Statutes, Agriculture Code 16.001 and 16.005)

Natural Gas Fuel Rates and Alternative Fuel Promotion

Through its natural gas program, the Texas General Land Office (GLO) makes competitively-priced natural gas available to school districts and other state and local public entities for use in natural gas vehicles. The GLO has also established an alternative fuels program to aggressively promote the use of alternative energy sources, especially for those fuels abundant in Texas. The GLO alternative fuels program serves as a liaison between government and industry.

Point of Contact

Soll Sussman
Alternative Fuels Program Coordinator
Texas General Land Office, Renewable Energy Division
Phone (512) 463-5039
Fax (512) 463-9211
soll.sussman@glo.state.tx.us
http://www.glo.state.tx.us/energy/altfuels/index.html

Liquefied Petroleum Gas (LPG) Vehicle Incentives

The Railroad Commission of Texas Alternative Fuels Research and Education Division (AFRED) Low Emissions Propane Equipment Initiative Program offers incentives to buyers who wish to replace aging medium-duty diesel school bus or delivery vehicles with qualified LPG vehicles that meet or exceed current U.S. Environmental Protection Agency (EPA) emissions standards. The incentive amount is dependent upon the calculated emissions reductions. AFRED also offers incentives to buyers who wish to replace aging internal combustion forklifts with new propane forklifts that meet or exceed 2008 EPA emission standards.

Point of Contact

Heather Ball
Marketing and Public Education Director, Alternative Fuels Research & Education Division
Railroad Commission of Texas
Phone (512) 463-7359 or (800) 64-CLEAR
Fax (512) 463-7292
heather.ball@rrc.state.tx.us
http://www.propane.tx.gov/rebate_program

Liquefied Petroleum Gas (LPG) Vehicle Training

The Railroad Commission of Texas offers free safety and maintenance training on LPG vehicles, buses, and forklifts.

Point of Contact

Franz Hofmann
Lead Automotive Instructor, Alternative Fuels Research & Education Division
Railroad Commission of Texas
Phone (512) 463-8501
Fax (512) 475-2532
franz.hofmann@rrc.state.tx.us

Clean School Bus Program - North Central Texas

The North Central Texas Clean School Bus Program (Program) is a fuel and technology neutral program, administered by the North Central Texas Council of Governments, serving a 16-county service area. The Program serves as a clearinghouse for information on technology, legislation, best-practices for school bus operators, and clean school bus funding opportunities. The Program aims to reduce emissions from school bus fleets by encouraging and assisting in the expedited purchase of clean school buses as well as adoption and enforcement of idle reduction policies. In addition, the Program seeks to gather community resources to assist schools, school districts, and school bus operators in improving air quality and protecting the health of school-aged children.

Point of Contact

Amanda Brimmer
Senior Transportation Planner
North Central Texas Council of Governments
Phone (817) 608-2353
Fax (817) 640-3028
abrimmer@nctcog.org
http://www.nctcog.org/CleanSchoolBus

Clean Heavy-Duty Vehicle and Idle Reduction Grants - Dallas-Fort Worth

The Heavy-Duty Vehicle and Equipment Grant Program (Program) is administered by the North Central Texas Council of Governments, in partnership with the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency. The Program seeks to reduce emissions from heavy-duty engines in the Dallas-Fort Worth region, as well as educate public and private entities on the availability of clean fuels and vehicle technologies. Grant funding is available in three emphasis areas: local government, construction equipment, and idle reduction projects. Both public and private sector entities may apply for grants for the replacement or repower/retrofit of construction equipment, or for the purchase and installation of on-side and on-board idle reduction technologies. Local governments may apply for additional project types. All projects must have a nitrogen oxide emissions reduction component. Projects will be selected on a modified first come first served basis.

Point of Contact

Amanda Brimmer
Senior Transportation Planner
North Central Texas Council of Governments
Phone (817) 608-2353
Fax (817) 640-3028
abrimmer@nctcog.org
http://www.nctcog.org/CleanSchoolBus

Clean Vehicle Incentives - Dallas-Fort Worth

The AirCheckTexas Drive a Clean Machine Program helps vehicle owners comply with vehicle emissions standards and targets the highest polluting vehicles by offering financial incentives to remove them from the roadways or to make repairs to reduce emissions. The North Central Texas Council of Governments administers the program for residents in nine North Central Texas ozone non-attainment counties.

Point of Contact

Jason Brown
Air Quality Operations Manager
North Central Texas Council of Governments
Phone (817) 704-2514
Fax (817) 608-2315
jbrown@nctcog.org
http://www.nctcog.org/airchecktexas

Clean Taxi Replacement Grants - Dallas-Fort Worth

The North Central Texas Council of Governments partnered with the U.S. Environmental Protection Agency and the City of Dallas to develop the North Texas Green & Go Clean Taxi Partnership as part of the Dallas Sustainable Skylines Initiative. This program facilitates the replacement of existing taxis with low emission vehicles. Through this initiative, a grant program to offset incremental costs has been developed and other non-financial incentives implemented for the purchase of cleaner vehicles.

Point of Contact

Jenny Danieau
Transportation Planner
North Central Texas Council of Governments
Phone (817) 608-2342
Fax (817) 640-3028
jdanieau@nctcog.org
http://www.northtexasgreenandgo.org

Alternative Fuel Vehicle (AFV) Grants - Houston-Galveston

Congestion Mitigation and Air Quality (CMAQ) Program Grants are available through the Houston-Galveston Area Council, via the Greater Houston Clean Cities Coalition, for up to 75% of the incremental cost of purchasing new original equipment manufactured clean fuel vehicles, clean fuel vehicle conversions/repowers, or establishing publicly accessible alternative fueling infrastructure. This grant is for government and private entities in the eight-county Houston-Galveston non-attainment area.

Point of Contact

Christine Smith
Clean Cities Coordinator
Greater Houston Clean Cities Coalition
Phone (832) 681-2556
cleancities@h-gac.com
http://www.houston-cleancities.org

State Laws and Regulations

Alternative Fuel Use Required in State Fleets

State fleets with more than 15 vehicles, excluding emergency and law enforcement vehicles, may not purchase or lease a motor vehicle unless the vehicle uses compressed natural gas, liquefied natural gas, liquefied petroleum gas, methanol or methanol-gasoline blends of 85% or greater (M85), ethanol or E85, biodiesel or B20 and higher blends, or electricity including plug-in hybrid electric vehicles. Waivers may be granted for fleets under the following circumstances: 1) the fleet will operate primarily in areas where neither the state agency or a supplier can reasonably be expected to establish adequate fueling for these fuels, or 2) the agency is unable to obtain equipment or fueling facilities necessary to operate alternative fuel vehicles at a cost that is no greater than the net costs of using conventional fuels.

By September 30, 2010, covered state agency fleets must consist of at least 50% vehicles that use alternative fuels as listed above and use these fuels not less than 80% of the time the vehicle is driven.

Furthermore, state agencies authorized to purchase passenger vehicles or other ground transportation vehicles for general use must ensure that at least 25% of the vehicles purchased during any state fiscal biennium, other than exempted vehicles, meet or exceed federal Tier II, Bin 3 emissions standards. Covered state agencies may meet these requirements through the purchase of new vehicles or the conversion of existing vehicles.

(Reference House Bill 432, 2009, and Texas Statutes, Government Code 2158.001, 2158.0013, and 2158.003 to 2158.009)

Biofuels Promotion

The Texas Bioenergy Policy Council and the Texas Bioenergy Research Committee were established to promote the goal of making biofuels a significant part of the energy industry in Texas by January 1, 2019. The Policy Council is tasked with the following: 1) provide a vision for unifying the state's agricultural, energy, and research strengths in a successful launch of a cellulosic biofuel and bioenergy industry; 2) foster development of cellulosic and bio-based fuels; 3) pursue the creation of a next-generation biofuels energy research program at a university in the state; 4) pursue federal and other funding to position the state as a bioenergy leader; 5) study the feasibility and economic development effect of a blending requirement for biodiesel or cellulosic fuels; 6) pursue the development and use of thermochemical process technologies to produce alternative chemical feedstocks; and 7) study the feasibility of the requirements for renewable natural gas. (Reference Senate Bill 1016, 2009, and Texas Statutes, Agriculture Code 50D)

Fuel Dispenser Labeling Requirement

All equipment used to dispense motor fuel containing at least 1% ethanol or methanol must be clearly labeled to inform customers that the fuel contains ethanol or methanol. Equipment used to dispense motor fuel containing at least 10% ethanol or 5% methanol must also state the percentage of ethanol or methanol by volume. Motor fuel dealers must inform customers of ethanol and methanol fuel content upon request.

Ethanol, Biodiesel, and Renewable Diesel Production Fee

Ethanol and biodiesel producers are subject to a fee of $0.032 per gallon of ethanol or biodiesel produced in each registered production facility, imposed by the Texas Department of Agriculture. (Reference House Bill 2582, 2009, and Texas Statutes, Agriculture Code 16.001 and 16.005)

Ethanol and Biodiesel Blend Tax Exemption

The biodiesel or ethanol portion of blended fuel containing taxable diesel is exempt from the diesel fuel tax. The biodiesel or ethanol fuel blend must be clearly identified on the retail pump, storage tank, and sales invoice in order to be eligible for the exemption. (Reference Texas Statutes, Tax Code 162.204)

Provision for Establishment of Hydrogen Program

The Texas Department of Transportation (TxDOT) is authorized to seek funding to acquire and operate hydrogen vehicles and establish and operate publicly-accessible hydrogen fueling stations. TxDOT is required to ensure that data on emissions from the vehicles, fueling stations, and related hydrogen production are monitored compared with data on emissions from control vehicles with internal combustion engines that operate on fuels other than hydrogen. TxDOT must report the results of this monitoring, analysis and comparison to the Texas Commission on Environmental Quality. (Reference Texas Statutes, Transportation Code 201.618)

Idle Reduction Weight Exemption

Any vehicle equipped with idle reduction technology may exceed the state's gross vehicle and axle weight limits by up to 400 pounds to compensate for the additional weight of the added idle reduction technology. (Reference House Bill 432, 2009, and Texas Statutes, Transportation Code 622.955)

Idle Reduction Requirement

Idling of any vehicle for more than five minutes from April through October is prohibited in the cities of Arlington, Austin, Bastrop, Benbrook, Celina, Colleyville, Dallas, Elgin, Euless, Georgetown, Hurst, Hutto, Keene, Lake Worth, Lancaster, Little Elm, Lockhart, Luling, Mabank, McKinney, Mesquite, North Richland Hills, Pecan Hill, Round Rock, San Marcos, University Park, and Westlake, and the counties of Bastrop, Caldwell, Collin, Hays, Kaufman, Tarrant, Travis, and Williamson. Exemptions apply for the following: vehicles with a Gross Vehicle Weight Rating of 14,000 pounds or less (after September 1, 2009); traffic conditions; emergency or law enforcement; to perform needed work; maintenance or diagnostics; defrost windshield; airport ground support; rented/leased vehicles; and hours of service compliance. Vehicles may idle for up to 30 minutes for bus passenger comfort or transit operations. Fines vary by jurisdiction. (Reference Texas Administrative Code 30.114.510-30.114.517)

Heavy-Duty Idle Reduction Requirement

A driver using a vehicle's sleeper berth may not idle the vehicle in a school zone or within 1,000 feet of a public school during the school's hours of operation. Violators may be subject to a fine of up to $500. Idle reduction systems that provide heating, cooling, or electrical service to a commercial vehicle's sleeper berth may be utilized. (Reference House Bill 432, 2009, and Texas Statutes, Health and Safety Code 382.0191)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs are defined as vehicles that can attain a maximum speed of 35 miles per hour (mph) and must comply with the safety standards in Title 49 of the Code of Federal Regulations, section 571.500. NEVs may only be used on roads that have a posted speed limit of 45 mph or less but may cross a road or street at an intersection where the road or street has a posted speed limit of more than 45 mph. A county, municipality, or the Texas Department of Transportation may prohibit the operation of a NEV on a street or highway if the governing body determines that the prohibition is necessary in the interest of safety. (Reference Senate Bill 129, 2009, and Texas Statutes, Transportation Code 551.301-551.303)

Liquid Petroleum Gas (LPG) Tax

Motor fuel taxes for LPG vehicles are collected through an annual sticker permit fee based on the registered Gross Vehicle Weight Rating and mileage driven the previous year. (Reference Texas Statutes, Tax Code 162.305)

Liquefied Petroleum Gas (LPG) and Natural Gas Safety

The Railroad Commission of Texas (RRC) regulates the safety of the liquefied natural gas (LNG), compressed natural gas (CNG), and LPG industries. (Reference Texas Statutes, Natural Resources Code 113.011 and 116.011)

Utilities/Private Incentives

Natural Gas Vehicle (NGV) and Fueling Infrastructure Rebates

The Texas Gas Service Conservation Program offers a $2,000 rebate for the purchase of an NGV or $3,000 for the conversion of a gasoline powered vehicle to operate on natural gas. The rebate is available for up to five vehicles per customer, and conversions must be performed by a center that is certified by the Railroad Commission of Texas. A $1,000 rebate is also available for the purchase of a natural gas forklift. Additionally, qualified residential and commercial NGV fueling infrastructure may be eligible for a $2,000 rebate. These incentives are available to commercial and residential customers within the city limits of Austin, Sunset Valley, Rollingwood, West Lake Hills, Cedar Park, and Kyle with specific gas rate codes.

Point of Contact

Teri Green
Conservation Program Manager
Texas Gas Service
Phone (512) 465-1109
Fax (512) 465-1133
tgreen@oneok.com
http://www.txgas.com

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling stations and may assist with vendor selection on a case-by-case basis.

Point of Contact

Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone (817) 303-2903
Fax ((817) 303-2929
walter.c.miller@atmosenergy.com

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Chris Ashcraft Clean Cities Coordinator	Alamo Area Clean Cities Coalition	Phone:(210) 362-5228 Fax:(210) 225-5937
Stacy Neef Clean Cities Coordinator	Central Texas Clean Cities Coalition	Phone:(512) 482-5343 Fax:(512) 482-5454
Mindy Mize Clean Cities Co-Coordinator	Dallas/Fort Worth Clean Cities Coalition	Phone:(817) 608-2346 Fax:(817) 640-3028
Pamela Burns Clean Cities Co-Coordinator	Dallas/Fort Worth Clean Cities Coalition	Phone:(817) 704-2510 Fax:(817) 640-3028
Christine Smith Clean Cities Coordinator	Greater Houston Clean Cities Coalition	Phone:(832) 681-2556 Fax:
Rick McKnight Clean Cities Coordinator	East Texas Clean Cities Coalition	Phone:(903) 984-8641 Fax:(903) 983-1440
Bob Dickinson Clean Cities Coordinator	South East Texas Clean Cities Coalition	Phone:(409) 899-8444 x251 Fax:(409) 729-6511
Neil Kirschner Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-5793 Fax:
Heather Ball Marketing and Public Education Director, Alternative Fuels Research & Education Division	Railroad Commission of Texas	Phone:(512) 463-7359 or (800) 64-CLEAR Fax:(512) 463-7292
Dan Kelly Director, Alternative Fuels Research & Education Division	Railroad Commission of Texas	Phone:(512) 463-7291 Fax:(512) 463-7292
Franz Hofmann Lead Automotive Instructor, Alternative Fuels Research & Education Division	Railroad Commission of Texas	Phone:(512) 463-8501 Fax:(512) 475-2532
Soll Sussman Alternative Fuels Program Coordinator	Texas General Land Office, Renewable Energy Division	Phone:(512) 463-5039 Fax:(512) 463-9211
Venita Porter Program Manager	Texas State Energy Conservation Office, Texas Comptroller of Public Accounts	Phone:(512) 463-1779 Fax:(512) 475-2569
Steve Dayton Team Leader, Grant Contract Development	Texas Commission on Environmental Quality	Phone:(512) 239-6824 Fax:(512) 239-0077
Yiqun Huang, PhD Program Director, New Technology Research and Development	Houston Advanced Research Center	Phone:(281) 364-4036 Fax:(281) 363-7935
Amanda Brimmer Senior Transportation Planner	North Central Texas Council of Governments	Phone:(817) 608-2353 Fax:(817) 640-3028
Jason Brown Air Quality Operations Manager	North Central Texas Council of Governments	Phone:(817) 704-2514 Fax:(817) 608-2315
Jenny Danieau Transportation Planner	North Central Texas Council of Governments	Phone:(817) 608-2342 Fax:(817) 640-3028
Teri Green Conservation Program Manager	Texas Gas Service	Phone:(512) 465-1109 Fax:(512) 465-1133
Don Lewis Fleet Manager	Texas State Department of Transportation, General Services Division	Phone:(512) 374-5471 or (512) 658-1364 Fax:(512) 374-5481
Walter C. Miller Energy Services Consultant	Atmos Energy	Phone:(817) 303-2903 Fax:((817) 303-2929
Sandra Rennie Mobile Source Team Leader, Region 6	U.S. Environmental Protection Agency	Phone:(214) 665-7367 Fax:(214) 665-7263
Anna Friend Transportation Operations Specialist	U.S. General Services Administration	Phone:(303) 236-7221 Fax:(303) 236-7590