Oklahoma Laws and Incentives for Propane

The list below contains summaries of all Oklahoma laws and incentives related to Propane.

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)

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 website.

Point of Contact
Kylah McNabb
Energy Policy Advisor
Oklahoma Department of Commerce
Phone: (405) 522-7226
kylah.mcnabb@ee.ok.gov

Laws and Regulations

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 40-142.3)

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 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)

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)

Alternative Fuels Technician Certificates

The Department of Labor (DOL) will issue a certificate to any person who has successfully passed the appropriate alternative fuels equipment, alternative fuels compression, or electric vehicle technician examination as provided in the Alternative Fuels Technician Certification Act. A certification fee applies. For companies, partnerships, or corporations involved in the business of installing, servicing, repairing, modifying, or renovating equipment used in converting or modifying engines or fueling equipment to be used with alternative fuels, DOL will issue a separate certificate.

DOL can issue an alternative fuels trainee certificate to any person who submits a trainee application within 15 business days of being hired by a licensed alternative fuels conversion or fueling station installation company.

(Reference House Bill 2622, 2016, and Oklahoma Statutes 40-142.8)

Committee of Alternative Fuels Technician Examiners

The Committee of Alternative Fuels Technician Examiners (Committee) was established to assist the Commissioner of Labor on matters relating to the formulation of rules and standards to comply with the Alternative Fuels Technician Certification Act. The Committee consists of eight members, including experts in the natural gas and electric vehicle industries. (Reference House Bill 2622, 2016, and Oklahoma Statutes 40-142.6)

  

More Laws and Incentives

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