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 (10)
• Utility/Private Incentives (5)
• Laws and Regulations (9)

State Incentives

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before January 1, 2015, a one-time income tax credit is available for 50% of the incremental cost of purchasing a new original equipment manufacturer AFV or converting a vehicle to operate on an alternative fuel. 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, hydrogen, and liquefied petroleum gas (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, 2015, a tax credit is available for up to 75% of the cost of alternative fueling infrastructure. Eligible alternative fuels include compressed natural gas (CNG), liquefied natural gas, liquefied petroleum gas (propane), hydrogen, 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 CNG fueling system, for up to $2,500. The tax credit may be carried forward for up to five years. (Reference Oklahoma Statutes 68-2357.22)

All-Electric Vehicle (EV) Manufacturing Tax Credit

Vehicle manufacturers are eligible for a tax credit for EVs, including low- and medium-speed EVs, manufactured on or after July 1, 2010. EVs that can legally be operated on interstate highways and turnpikes in the state are eligible for a $2,000 credit per vehicle. Four-wheeled medium-speed EVs are eligible for a $1,000 credit per vehicle. Four-wheeled low-speed EVs are eligible for a $500 credit per vehicle. Tax credits may be carried forward for up to five years. (Reference Oklahoma Statutes 68-2357.402)

Biodiesel Production Tax Credit

For tax years beginning before January 1, 2013, a biodiesel production facility may qualify for a tax credit of $0.20 per gallon of biodiesel produced for up to 60 months, beginning with the first month for which the facility is eligible for the credit. An eligible biodiesel facility must have produced at least 25% of its original design capacity on or before December 31, 2008, and must maintain a production rate of at least 25% of its original design capacity for at least six months after the first month for which it is eligible to receive the credit. Producers are also eligible for an expansion credit of $0.20 per gallon of biodiesel produced in excess of the original design capacity that results from expansion of the facility before December 31, 2008. The credit is capped at 25 million gallons of biodiesel per year per biodiesel facility. Producers may use the expansion tax credit for up to 60 months beginning the first month for which production from the expanded facility is eligible and ending before January 1, 2013.

Beginning January 1, 2013, a new or expanded biodiesel facility may receive a credit of $0.075 per gallon of biodiesel for up to 36 consecutive months for new fuel production. To be eligible for this credit, the facility must not have received credits before January 1, 2013, or must have expanded its capacity by at least two million gallons and began operation after January 1, 2013. The credit will be capped at ten million gallons of biodiesel per year per biodiesel facility. 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 up to five years. Additional restrictions may apply.

(Reference Oklahoma Statutes 68-2357.67)

Ethanol Production Tax Credit

For tax years beginning before January 1, 2013, an ethanol production facility may qualify for a tax credit of $0.20 per gallon of ethanol produced for up to 60 months, beginning with the first month in which the facility is eligible for the credit. An eligible ethanol facility must have produced at least 25% of its original design capacity on or before December 31, 2010, and must maintain an average production rate of at least 25% of its original design capacity for at least six months after the first month for which it is eligible to receive the credit. Producers are also eligible for an expansion credit of $0.20 per gallon of ethanol produced in excess of the original design capacity that results from expansion of the facility before December 31, 2008. The credit is capped at 25 million gallons of ethanol per year per ethanol facility and 75 million gallons of ethanol per year at all ethanol facilities in the state. Producers may use the expansion tax credit for up to 60 months beginning the first month for which production from the expanded facility is eligible and ending before January 1, 2013.

Beginning January 1, 2013, a new or expanded ethanol facility is eligible for a credit of $0.075 per gallon of ethanol, before denaturing, for new production for up to 36 consecutive months. To be eligible for this credit, the facility must not have received credits before January 1, 2013, or must have expanded its capacity by at least two million gallons and began operation after January 1, 2013. The credit will be capped at ten million gallons of ethanol per year per ethanol facility and 30 million gallons of ethanol per year at all ethanol facilities in the state. Additional restrictions may apply.

(Reference Oklahoma Statutes 68-2357.66)

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)

Biofuels Tax Exemption

An individual that produces biodiesel or other biofuels from feedstocks grown on their property and uses that fuel in a vehicle they own is 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' Alternative Fuels Conversion Loan program provides 0% interest loans to government fleets for converting vehicles to operate on alternative fuels, the construction of AFV fueling infrastructure, and 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 AFV and up to $300,000 for the development or installation of fueling infrastructure. The borrower must repay the loan within a seven-year period. Repayment is collected through a surcharge on alternative fuel the borrower purchased 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 it 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 through 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.

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. (Reference Oklahoma Statutes 47-14-109)

Utility/Private Incentives

Natural Gas Fleet Services - Clean Energy

Clean Energy Fuels offers services to the natural gas vehicle industry that include competitive compressed natural gas pricing for larger fleet customers, as well as alternative fuel vehicle financing.

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 U.S. Environmental Protection Agency certified 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 on or after June 18, 2012, in the amount of $1,000 for a dedicated NGV and $500 for a dual-fuel vehicle. ONG also offers $1,000 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.

Natural Gas Infrastructure Technical Assistance - CenterPoint Energy

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

Laws and Regulations

Access to State Alternative Fueling Stations

The Oklahoma Department of Central Services Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure for state agencies and local government use 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 stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, liquefied petroleum gas (propane), ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference Oklahoma Statutes 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 Department of Central Services Fleet Management Division may take steps to reach this goal by collaborating with private entities to build CNG fueling infrastructure. (Reference Oklahoma Statutes 74-78f)

State Energy Efficiency and Conservation Plans

Each state agency must develop and implement an energy efficiency and conservation plan. As part of its plan, each agency should make every effort to include purchasing preferences for vehicles that use alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Oklahoma Statutes 27A-3-4-106)

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, attainable within one mile. 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), the label must also state the percentage of ethanol 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 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 Vehicle (AFV) Fee and Tax

In lieu of the motor fuel excise tax, 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 liquefied petroleum gas (propane), liquefied natural gas (LNG), methanol, or blends of 85% methanol and 15% gasoline (M85). Propane vehicles with a payload capacity of less than 2,000 pounds (lbs) are taxed at a rate of $50 per vehicle per year. LNG, 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, LNG, 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.

For compressed natural gas (CNG) vehicles, instead of an annual flat fee, the state motor fuel tax is imposed as a direct tax paid at the pump per gasoline gallon equivalent (GGE) of CNG purchased. The tax rate is $0.05 per GGE until January 1, 2015, and $0.13 per GGE thereafter.

(Reference Oklahoma Statutes 68-723 and 68-500.3 through 68-500.6)

Alternative Fuel 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 alternative fuel vehicles 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), EV charging infrastructure, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)