Oklahoma Laws and Incentives

Listed below are the summaries of all current Oklahoma laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before January 1, 2020, a one-time income tax credit is available for 45% of the incremental cost of purchasing a new original equipment manufacturer AFV, excluding electric vehicles, or converting a vehicle to operate on an alternative fuel. The state also provides a tax credit in the amount of 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; must not have been previously used to modify or retrofit any vehicle; must meet applicable federal and state safety standards; and must be installed by a state certified alternative fuels equipment technician. The alternative fuels eligible for the credit are natural gas and propane. Tax credits may be carried forward for up to five years. (Reference Oklahoma Statutes 68-2357.22)

Alternative Fueling Infrastructure Tax Credit

For tax years beginning before January 1, 2020, a tax credit is available for up to 75% of the cost of installing commercial alternative fueling infrastructure. Eligible alternative fuels include natural gas, propane, and electricity. The infrastructure must be new and must not have been previously installed or used to fuel alternative fuel vehicles. A tax credit is also available for up to 50% of the cost of installing a residential compressed natural gas fueling system, up to $2,500. The tax credit may be carried forward for up to five years. (Reference Oklahoma Statutes 68-2357.22)

Ethanol Fuel Retailer Tax Credit

Retailers that sell fuel blends of gasoline containing up to 15% ethanol by volume (E15) are eligible for a motor fuel tax credit of $0.016 per gallon of ethanol blended into gasoline and sold in Oklahoma, as long as 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 nonattainment with the National Ambient Air Quality Standards. (Reference Oklahoma Statutes 68-500.10-1)

Clean Diesel Fleet Vehicle Grants

The Oklahoma Department of Environmental Quality (DEQ) Air Quality Division provides grants to help public and private fleets retrofit or replace diesel vehicles to reduce diesel emissions and improve fuel efficiency. Eligible projects include installation of idle reduction or aerodynamic technology and diesel vehicle replacement. Funding is currently not available for this incentive (verified July 2015). For more information, see the DEQ Clean Diesel Grant Program website.

Ethanol Sales Tax Exemption

The portion of ethanol (ethyl alcohol) sold and blended with motor fuel is exempt from sales tax. (Reference Oklahoma Statutes 68-500.10-1 and 68-1359)

Biofuels Tax Exemption

Biodiesel or other biofuels produced by an individual from feedstocks grown on the individual's property and used in the individual's own vehicle are exempt from the state motor fuel excise tax. (Reference Oklahoma Statutes 68-500.4 and 68-500.10)

Alternative Fuel Vehicle (AFV) Low-Interest Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels and for the incremental cost of purchasing an original equipment manufacturer AFV. The loan repayment has a maximum six-year period. For more information, see the Oklahoma Department of Commerce loan application guidelines.

Point of Contact
Marshall Vogts
Director of Programs
Oklahoma Department of Commerce
Phone: (405) 815-5339
marshall_vogts@okcommerce.gov
http://okcommerce.gov/state-energy-office/

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 idle reduction technology. The additional weight may not exceed the actual certified weight of the idle reduction unit. Upon request, vehicle operators must provide proof that the idle reduction technology is fully functional. (Reference Oklahoma Statutes 47-14-109)

Biofuels Construction and Permitting Assistance

The Oklahoma Department of Environmental Quality (DEQ) provides technical and regulatory assistance to small businesses that need permits to construct and operate biodiesel and ethanol production facilities. For more information, see the DEQ Small Business Assistance Program website.

Utility/Private Incentives

Compressed Natural Gas (CNG) Vehicle Conversion Loans - Allegiance Credit Union

The Allegiance Credit Union offers low-cost loans to customers for CNG vehicle conversions. For more information, see the Allegiance Credit Union CNG Conversion Loans website.

Natural Gas Vehicle Loans - Communication Federal Credit Union (CFCU)

CFCU offers loans to individuals and businesses that purchase new or converted compressed natural gas (CNG) vehicles. Conversion systems must be certified by the U.S. Environmental Protection Agency and installed by an insured and state-licensed facility. New vehicle loans are available at amounts up to the manufacturer's suggested retail price plus the cost of the conversion. Pre-owned or CFCU member-owned vehicles with a CNG fuel system or conversion installation are eligible for loans at up to 115% of the National Automobile Dealers Association suggested retail value. All financing is at CFCU standard auto loan rates. CFCU also offers loans for the cost of home fueling appliances. For more information, see the CFCU CNG Vehicle and Conversion Loans website.

Natural Gas Vehicle (NGV) and Infrastructure Rebate - Oklahoma Natural Gas

Oklahoma Natural Gas (ONG) offers rebates for NGVs purchased or converted after June 20, 2016, in the amount of $2,000 for a dedicated NGV and $2,000 for a bi-fuel vehicle. ONG also offers $3,000 toward the cost of a compressed natural gas home fueling station or appliance. Rebates are available on a first come, first served basis and are limited to three rebates per applicant, per calendar year. For more information, including rebate fund availability, see the ONG CNG Rebate Program website.

Point of Contact
Emily Reh
Manager, CNG Business Development
ONE Gas
emily.reh@onegas.com
http://www.oklahomanaturalgas.com/SaveEnergyAndMoney/NaturalGasVehicles/CNGRebateProgram.aspx

Laws and Regulations

Natural Gas Vehicle (NGV) Loan Program Development

The Oklahoma Cooperative Circuit Engineering Districts Board must develop and adopt rules and processes for a no-interest loan program to allow qualified county governments to purchase or convert NGVs. Counties that borrow funds must sell to a nongovernmental entity or properly dispose of a comparable number of conventional vehicles. Loan terms will be up to five years. (Reference Senate Bill 656, 2015, and Oklahoma Statutes 69-687.3C)

Natural Gas Measurement

Effective November 1, 2015, the Oklahoma Department of Labor (DOL) must standardize compressed natural gas (CNG) and liquefied natural gas (LNG) measurements for retail motor vehicle fuel, unless the National Conference on Weights and Measures has established equivalent measures. Until the DOL standardizes measurements, a gasoline gallon equivalent is equal to 5.66 pounds (lbs.) of CNG and a diesel gallon equivalent is equal to 6.06 lbs. of LNG. (Reference House Bill 1283, 2015, and Oklahoma Statutes 83-119)

Compressed Natural Gas (CNG) Fueling Infrastructure Inspection

The Oklahoma Department of Labor may access and inspect any equipment, practices, or methods used in association with public CNG fueling infrastructure. (Reference House Bill 3297, 2014, and Oklahoma Statutes 52-348)

Alternative Fuel School Bus Conversion Research

The School Transportation Task Force (Task Force) must investigate the costs and benefits of converting school buses and bus fleets to compressed natural gas or another alternative fuel system. The Task Force must make recommendations to the governor and legislature regarding the research findings by December 31, 2013. (Reference Executive Order 2013-13, 2013)

Access to State Alternative Fueling Stations

The Oklahoma Office of Management and Enterprise Services (OMES) Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure for use by state agencies and local government and for use by the public in areas of the state where public access to alternative fuel infrastructure is not readily available. OMES must discontinue public access to their fueling stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, propane, ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference Oklahoma Statutes 74-130.2 and 74-78)

Compressed Natural Gas (CNG) Fueling Infrastructure Development

The Oklahoma Legislature intends to increase the amount of CNG fueling infrastructure in the state, with the overall goal of having one public fueling station located every 100 miles along the interstate highway system by 2015 and one public fueling station every 50 miles by 2025. The Oklahoma Office of Management and Enterprise Services Fleet Management Division may partner with private entities to build CNG fueling infrastructure. (Reference Oklahoma Statutes 74-78f)

Low- and Medium-Speed Vehicle Access to Roadways

A low-speed electric vehicle (EV) is any four-wheeled EV powered by an electric motor that draws current from rechargeable storage batteries or other sources of electric current and whose top speed is greater than 20 miles per hour (mph) but not greater than 25 mph. Low-speed EVs may not operate on streets or highways with posted speed limits greater than 35 mph but may cross a street or highway with a posted speed limit greater than 35 mph.

A medium-speed EV is defined as any self-propelled, electrically powered four-wheeled motor vehicle, whose top speed is greater than 30 miles per hour (mph) but not greater than 35 mph. Medium-speed EVs must be registered according to the Oklahoma Vehicle License and Registration Act. Medium-speed EVs may operate on roadways with a posted speed limit of up to 45 mph but are not permitted to travel on any highway in the state that is a part of the National System of Interstate and Defense Highways. Low- and medium-speed EVs must meet the safety standards specified in Title 49 of the Code of Federal Regulations, section 571.500.

(Reference Oklahoma Statutes 47-11-805.1, 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 retailer must display the label in a clear, conspicuous, and prominent way on the same side of the motor fuel pump where the price is shown. If a motor fuel pump dispenses fuel that contains at least 10% ethanol (E10) or 5% methanol, the label must also state the percentage of ethanol or methanol, respectively, by volume. In addition, the person selling motor fuel or offering it for sale must 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 co-solvents in the motor fuel being sold. (Reference Oklahoma Statutes 52-347)

Biodiesel Definition and Specifications

Biodiesel is defined as a fuel that is comprised only of mono-alkyl esters of long chain fatty acids, is produced from vegetable oils or animal fats, and meets ASTM specification D6751. A biodiesel blend is a blend of biodiesel meeting ASTM specification D6751 and petroleum-based diesel fuel. (Reference Oklahoma Statutes 52-325)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

All school and government fleets may convert their vehicles to operate on alternative fuels, and all school districts should consider purchasing only vehicles able to operate on alternative fuels. School and government vehicles capable of operating on an alternative fuel must use the fuel whenever a fueling station is located within a five-mile radius of the respective school district or government department and the price of the alternative fuel is cost competitive with the displaced conventional fuel. 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 Vehicle (AFV) Tax and Fee

Compressed natural gas (CNG) used in motor vehicles is subject to a state motor fuel tax of $0.05 per gasoline gallon equivalent (GGE) until January 1, 2020. Beginning January 1, 2020, the tax rate increases to match the rate imposed on diesel fuel. Liquefied natural gas (LNG) is also subject to a state motor fuel tax rate of $0.05 per diesel gallon equivalent (DGE) until January 1, 2020, after which the tax rate increases to match the rate imposed on diesel fuel.

In lieu of the motor fuel tax, some AFV owners are subject to a motor vehicle fee. An annual flat fee applies to passenger automobiles, pickup trucks, vans and heavy-duty vehicles using propane, natural gas, methanol, or blends of 85% methanol and 15% gasoline (M85). Propane and natural gas vehicles with a payload capacity of less than 2,000 pounds (lbs.) are taxed at a rate of $50 per vehicle per year. Methanol and M85 vehicles with a payload capacity of less than 2,000 lbs are taxed at a rate of $100 per vehicle per year. Propane, methanol, and M85 vehicles with a payload capacity greater than 2,000 lbs are taxed at a rate of $150 per vehicle per year. If the owner acquires the vehicle or converts it to run on the alternative fuel after July 1 of the tax year, the flat fee is half of the above mentioned amount. AFVs must display a decal that the Oklahoma Tax Commission issues on an annual basis.

(Reference Oklahoma Statutes 68-500.4 and 68-723)

Alternative Fuel Technician Training

The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians and trainees who install, modify, repair, or renovate equipment used in alternative fueling infrastructure 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. Plug-in electric vehicles (PEVs), PEV charging infrastructure, and PEV technicians must also comply with the rules and regulations of this Act. (Reference House Bill 1728, 2015, and Oklahoma Statutes 40-142.16)