Texas Laws and Incentives for Propane
The list below contains summaries of all Texas laws and incentives related to Propane.
Liquefied Petroleum Gas (Propane) Vehicle and Equipment Incentive - Propane Council of Texas
Propane vehicle incentives are available to private, non-profit, local government, state, and school white fleets. New dedicated propane vehicles and aftermarket conversions are eligible for an incentive equal to the incremental cost, up to $7,500. Each fleet is limited to $20,000 in total incentive awards.
Additionally, a $1,000 incentive is available for each new or converted propane commercial mower operated by public and private entities (excluding state agencies). Mower applicants are limited to seven incentive awards.
All conversion systems for vehicles and mowers must be certified through the U.S. Environmental Protection Agency or the California Air Resources Board. All vehicles and mowers must be registered and operated in Texas. Additional terms and conditions apply. For more information, see the Propane Council of Texas website.
Alternative Fueling Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Alternative Fueling Facilities Program (AFFP) as part of the Texas Emissions Reduction Plan. AFFP provides grants for 50% of eligible costs, up to $600,000, 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, 2017. For more information, see the TCEQ Alternative Fueling Facilities Program website. (Reference Texas Statutes, Health and Safety Code 386 and 393 and Texas Administrative Code 114.660-114.662)
Clean School Bus Program
Any school district or charter school may receive a grant through the Texas Commission on Environmental Quality (TCEQ) to pay for the incremental costs to install diesel oxidation catalysts, diesel particulate filters, emission-reducing add-on equipment, and other emissions reduction technologies in qualified school buses. Furthermore, funds may also be used to purchase qualifying fuels, including any liquid or gaseous fuel or additive registered or verified by the U.S. Environmental Protection Agency (other than standard gasoline or diesel) that provides particulate matter emission reductions. The program expires on August 31, 2019. Additional rules and conditions apply. For more information, see the TCEQ Clean School Bus Program website. (Reference Texas Administrative Code 114.640-114.648)
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, including funding availability, 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 (TCFP) as part of the Texas Emissions Reduction Plan. TCFP 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, and is restricted to certain counties. For more information, including current application periods, see the TCEQ Texas Clean Fleet Program website. (Reference Texas Statutes, Health and Safety Code 386 and 392 and Texas Administrative Code 114.650-114.658)
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 through 2158.009)
Authorization of Governmental Alternative Fuel Fleet Grant Program
The Texas Commission on Environmental Quality (TCEQ) will establish and administer a grant program for governmental alternative fuel fleets to provide grants for the purchase or lease of a new vehicle and the purchase, lease, or installation of alternative fueling equipment. Eligible alternative fuels include natural gas, propane, hydrogen, and electricity. State agencies and political subdivisions are eligible to apply for a grant under the program if the entity operates a fleet of more than 15 vehicles. Mass transit and school transportation providers will also be eligible for grants.
TCEQ will establish standardized vehicle grant amounts based on the incremental costs associated with the purchase or lease of different categories of motor vehicle, including the fuel type, vehicle class, and other categories TCEQ considers appropriate. TCEQ will also establish standardized fueling equipment grant amounts.
(Reference Senate Bill 1731, 2017)
Authorization of Alternative Fuel Vehicle Rebates
The Texas Commission on Environmental Quality (TCEQ) will develop a state rebate incentive for the purchase or lease of new light-duty vehicles powered by natural gas, propane, hydrogen, or electricity. Natural gas and propane vehicles are eligible for a rebate of $5,000 if their dedicated or bi-fuel system that was installed prior to final sale or installed within the first 500 miles of operation. The rebate will be available for the first 1,000 applicants for each state fiscal biennium.
Electric drive vehicles powered by a battery or hydrogen fuel cell will be eligible for a rebate of $2,500. The rebate will be available for the first 2,000 applications for each state fiscal biennium.
One rebate will be available per eligible vehicle. Manufacturers of vehicles or fueling systems must provide TCEQ with a list of new eligible vehicles that the manufacturer intends to sell in the state that meet rebate requirements. TCEQ will publish an updated list of vehicle models eligible for the incentives by August 1, annually.
(Reference Senate Bill 1731, 2017)
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)
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