Texas Laws and Incentives for Propane (LPG)

The list below contains summaries of all Texas laws and incentives related to Propane (LPG).

State Incentives

Alternative Fuel Vehicle (AFV) Rebates

Qualified AFVs purchased on or after September 1, 2013, may be eligible for a rebate of $2,500 to assist with the incremental vehicle cost. For the purpose of this incentive, AFVs include compressed natural gas or liquefied petroleum gas vehicles with a gross vehicle weight rating (GVWR) of 9,600 pounds (lbs.) or less, as well as electric vehicles with a GVWR of 8,500 lbs. or less. Additional terms and conditions may apply. (Reference Senate Bill 1727, 2013, and Texas Statutes, Health and Safety Code 386)

Alternative Fueling Infrastructure Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Alternative Fueling Facilities Program (Program) as part of the Texas Emissions Reduction Plan. The Program provides grants for 50% of eligible costs, up to $500,000, to construct, reconstruct, or acquire a facility to store, compress, or dispense alternative fuels in Texas air quality nonattainment areas. Qualified alternative fuels include biodiesel, electricity, natural gas, hydrogen, propane, and fuel mixtures containing at least 85% methanol (M85). The entity receiving the grant must agree to make the fueling station available to people and organizations not associated with the grantee during certain times. Additional terms and conditions apply. This program ends August 31, 2018. For more information, see the TCEQ Alternative Fueling Facilities Program website. (Reference Texas Statutes, Health and Safety Code 386, 393, and 394)

Clean Vehicle and Infrastructure Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Emissions Reduction Incentive Grants (ERIG) Program as part of the Texas Emissions Reduction Plan. The ERIG Program provides grants for various types of clean air projects to improve air quality in the state's nonattainment areas. Eligible projects include those that involve replacement, retrofit, repower, or lease or purchase of new heavy-duty vehicles; alternative fuel dispensing infrastructure; idle reduction and electrification infrastructure; and alternative fuel use. For more information, see the TCEQ Emissions Reduction Incentive Grants (ERIG) Program website. (Reference Texas Statutes, Health and Safety Code 386)

Clean Fleet Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean Fleet Program (Program) as part of the Texas Emissions Reduction Plan. The Program encourages owners of fleets containing diesel vehicles to permanently remove the vehicles from the road and replace them with alternative fuel vehicles (AFVs) or hybrid electric vehicles (HEVs). Grants are available to fleets to offset the incremental cost of such replacement projects. An entity that operates a fleet of at least 75 vehicles, including at least 20 diesel-powered vehicles, and that commits to placing 20 or more qualifying vehicles in service for use entirely in Texas during a given calendar year may be eligible. Qualifying AFV or HEV replacements must reduce emissions of nitrogen oxides or other pollutants by at least 25% as compared to baseline levels and must replace vehicles that meet operational and fuel usage requirements. Neighborhood electric vehicles do not qualify. This program ends August 31, 2017. The latest grant application period is closed (verified June 2013). For more information, see the TCEQ Texas Clean Fleet Program website. (Reference Texas Statutes, Health and Safety Code 386 and 392)

Alternative Fuel Vehicle Replacement Grants

The Railroad Commission of Texas Alternative Energy Division's (Division) Low Emissions Alternative Fuels Equipment Initiative Program offers grants to buyers who wish to replace aging medium- or heavy-duty diesel school bus or delivery vehicles with qualified propane or natural gas vehicles that meet or exceed current U.S. Environmental Protection Agency (EPA) emissions standards. The grant amount is dependent upon the calculated emissions reductions. The Division also offers incentives to buyers who wish to replace aging internal combustion forklifts with new propane or natural gas forklifts that meet or exceed 2008 EPA emissions standards. For more information, see the Low Emissions Alternative Fuels Equipment Initiative Program website.

Point of Contact
Heather Ball
Marketing and Public Education Director
Railroad Commission of Texas, Alternative Energy Division
Phone: (512) 463-7359 or (800) 64-CLEAR
Fax: (512) 463-7292
heather.ball@rrc.state.tx.us

Propane Vehicle Training

The Railroad Commission of Texas Alternative Energy Division offers free safety and maintenance training on propane vehicles, buses, and forklifts. For more information, see the Railroad Commission's Texas Alternative Fuel Fleet Pilot Program website.

Point of Contact
Heather Ball
Marketing and Public Education Director
Railroad Commission of Texas, Alternative Energy Division
Phone: (512) 463-7359 or (800) 64-CLEAR
Fax: (512) 463-7292
heather.ball@rrc.state.tx.us

Fueling Station Air Quality Permit Exemption

Owners and operators of equipment used exclusively to store and dispense motor fuels, including alternative fuels, into motor vehicles are automatically permitted by rule so long as their stations meet emissions limits set by the Texas Commission on Environmental Quality (TCEQ), and are therefore exempt from registering or paying for an air pollution permit. While TCEQ does not require station owners and operators to keep any records, it may request supporting information at any time. (Reference Texas Administrative Code 30.106.4 and 30.106.412)

Laws and Regulations

Alternative Fuel Use and Vehicle Acquisition Requirements

State agency 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 or liquefied natural gas, propane, ethanol or fuel blends of at least 85% ethanol (E85), methanol or fuel blends of at least 85% methanol (M85), biodiesel or fuel blends of at least 20% biodiesel (B20), or electricity (including plug-in hybrid electric vehicles). Waivers may be granted for fleets under the following circumstances: the fleet will operate primarily in areas where neither the state agency or a supplier can reasonably be expected to establish adequate fueling infrastructure for these fuels; or 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.

Covered state agency fleets must consist of at least 50% of vehicles that are able to operate on alternative fuels and use these fuels at least 80% of the time the vehicles are driven. Covered state agencies may meet these requirements through the purchase of new vehicles or the conversion of existing vehicles. State agencies that 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.

(Reference Texas Statutes, Government Code 2158.004-2158.009)

Propane Tax

Motor fuel taxes for propane used in vehicles are collected through an annual sticker permit fee based on the vehicles' registered gross vehicle weight rating and the number of miles driven the previous year. (Reference Texas Statutes, Tax Code 162.305)

Propane and Natural Gas Safety

The Railroad Commission of Texas regulates the safety of the natural gas and propane industries. (Reference Texas Statutes, Natural Resources Code 113.011 and 116.011)