Texas Laws and Incentives
Listed below are the summaries of all current Texas 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
Texas' National Electric Vehicle Infrastructure (NEVI) Planning
The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Texas Department of Transportation (TxDOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office), describing how the state intends to distribute NEVI funds. The submitted plans must be established according to NEVI guidance.
For more information about Texas’ NEVI planning process, see the TxDOT Electric Vehicle Infrastructure Plan website. To review Texas’ NEVI plan, see the Joint Office State Plans for EV Charging website.
Seaport and Rail Yard Emissions Reduction Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Seaport and Rail Yard Areas Emissions Reduction (SPRY) Program as part of the Texas Emissions Reduction Plan (TERP). The SPRY program provides grants to eligible entities to replace, repower, or purchase drayage and cargo handling equipment. Eligible projects include heavy-duty on-road vehicles with a gross vehicle weight rating over 26,000 pounds, off-road yard trucks, and other cargo handling equipment. Eligible engines or motors must be powered by electricity or meet federal emissions standards and reduce nitrogen oxide emissions by at least 25% compared to the engine being replaced. For more information, including current application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.181-386.183)
Heavy-Duty Vehicle and Equipment Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Rebate Grants Program (Program) as part of the Texas Emissions Reduction Plan (TERP). The Program provides grants to eligible entities to replace or repower existing heavy-duty, diesel-powered vehicles. Replacement vehicles and engines may not be more than three years older than the calendar year purchased and must reduce nitrogen oxide emissions by at least 25% compared to the vehicle or engine being replaced. Eligible replacement on- and off-road vehicles must be powered by diesel, natural gas, propane, methanol, hydrogen, or electricity. For more information, including current application periods, see the TCEQ Texas Emissions Reduction Plan TERP website.
(Reference Texas Health and Safety Code 386.104)
Light-Duty Alternative Fuel Vehicle Rebates
The Texas Commission on Environmental Quality (TCEQ) administers the Light-Duty Motor Vehicle Purchase or Lease Incentive Program (LDPLIP) as part of the Texas Emissions Reduction Plan (TERP). LDPLIP provides grants for the purchase or lease of a new light-duty vehicle powered by compressed natural gas (CNG), propane, hydrogen, or electricity. CNG and propane vehicles, including bi-fuel vehicles, are eligible for a rebate of up to $5,000. Electric drive vehicles powered by a battery or hydrogen fuel cell, including plug-in hybrid electric vehicles with a battery capacity of at least 4 kilowatt hours, are eligible for a rebate of up to $2,500. One rebate is available per eligible vehicle. Rebates are awarded on a first-come, first-served basis. For more information, including application periods, see the TERP website.
(Reference Texas Statutes, Health and Safety Code 386.154 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 2 Rule 114.610-114.613)
Natural Gas Vehicle (NGV) Grant
The Texas Commission on Environmental Quality (TCEQ) administers the Texas NGV Grant Program (TNGVGP) as part of the Texas Emissions Reduction Plan (TERP). The TNGVGP provides grants to replace existing medium- and heavy-duty vehicles with new, converted, or repowered natural gas or propane vehicles that operate in one or more of the eligible counties for at least 75% of the activity life. Qualifying vehicles must be on-road vehicles with a gross vehicle weight rating of more than 8,500 pounds, operate on at least 60% natural gas or propane, and be certified to current federal emissions standards. Additional terms and conditions apply. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 394 and Texas Administrative Code 114.670-114.672)
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 (TERP). The ERIG program provides grants for various types of clean air projects to improve air quality in the state’s nonattainment areas and other affected counties. 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 application periods, , see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.101-386.117 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 3 Rule 114.620-114.629)
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 (TERP). The TCFP provides grants to fleets to replace existing fleet vehicles with alternative fuel vehicles (AFVs) or hybrid electric vehicles (HEVs). An entity that operates a fleet of at least 75 vehicles and commits to placing 20 or more qualifying vehicles in service for use in the Clean Transportation Zone 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. For more information, including current application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386 and 392 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 5 Rule 114.650-114.658)
Alternative Fuel Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Alternative Fueling Facilities Program (AFFP) as part of the Texas Emissions Reduction Plan (TERP). The AFFP offers grants for the construction or reconstruction of an alternative fueling facility for natural gas, hydrogen, biodiesel, propane, electricity, and methanol. Priority will be given to public entities. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.153 and 393.001-393.007)
Clean School Bus Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean School Bus (TCSB) Program as part of the Texas Emissions Reduction Plan (TERP). The TCSB program provides grants to public school districts and charter schools for the incremental costs to replace school buses or install diesel oxidation catalysts, diesel particulate filters, emission-reducing add-on equipment, and other emissions reduction technologies in qualified school buses. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 4 Rule 114.640-114.648 and Texas Statutes, Health and Safety Code 390)
Governmental Fleet Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Governmental Alternative Fuel Fleet Grant Program (GAFF) as part of the Texas Emissions Reduction Plan (TERP) for the purchase or lease of new vehicles powered by natural gas, propane, hydrogen, or electricity. Special districts and government entities that operate a fleet greater than 15 vehicles are eligible. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.153 and 395.001-395.015)
Biofuel Blend Tax Exemption
The biodiesel, renewable diesel, or ethanol portion of blended fuel containing taxable diesel is exempt from the diesel fuel tax. The biodiesel, renewable diesel, or ethanol fuel blend must be clearly identified on the retail pump, storage tank, and sales invoice in order to be eligible for the exemption.
(Reference Texas Statutes, Tax Code 162.204 and House Bill 3599, 2023)
Idle Reduction Weight Exemption
Any motor vehicle equipped with qualifying idle reduction technology may exceed the state’s gross vehicle weight limits by up to 550 pounds to compensate for the additional weight of the idle reduction technology. To be eligible for the weight exemption, the vehicle operator must be able to provide proof that the idle reduction technology is fully functional.
(Reference Texas Statutes, Transportation Code 622.955)
Electric Vehicle (EV) and Natural Gas Vehicle (NGV) Weight Exemption
EVs and NGVs may exceed the state’s gross vehicle weight limits by up to 2,000 pounds (lbs.). The EV or NGV maximum gross vehicle weight may not exceed 82,000 lbs.
(Reference Texas Statutes, Transportation Code 621.101 and Senate Bill 1364, 2023)
Electric Vehicle Emissions Inspection Exemption
Beginning September 1, 2023, vehicles powered exclusively by electricity are exempt from state motor vehicle emissions inspections.
(Reference Senate Bill 1364, 2023)
Utility / Private Incentives
Fleet Electrification Assessment – American Electric Power (AEP) Texas
AEP Texas offers advisory services to fleets to analyze vehicle electrification opportunities. Eligible applicants must be AEP Texas fleet customers that own and operate trucks, forklifts, buses, or passenger vehicles. For more information, see the AEP Texas Electric Vehicles for Your Business website.
Electric Vehicle (EV) Charging Network Pilot Program – CPS Energy
CPS offers residential customers that own an EV access to the FlexEV Public Charging program network for an annual fee of $96 per EV. For more information, see the CPS Energy EVs website.
Electric Vehicle (EV) Charging Station Rate Incentives – CPS Energy
The CPS Energy FlexEV Smart Rewards program offers a $250 bill credit to residential customers who own a smart Level 2 EV charging station.
The CPS Energy FlexEV Off-Peak Rewards program offers residential customers a $125 bill credit for charging during off-peak hours. Customers may earn an additional $10 bill credit per month if they limit charging during peak hours to twice a month. For more information, see the CPS EV Charing Solutions website.
Electric Vehicle (EV) Charging Station Rebate – Southwestern Electric Power Company (SWEPCO)
SWEPCO offers residential customers a $250 rebate for the installation of an ENERGY STAR-certified Level 2 EV charging station. Rebates are available on a first-come, first-served basis. Additional terms and conditions apply. For more information, including how to apply, see the SWEPCO Level 2 Home EV Charging Station Rebate Program website.
Electric Equipment and Electric Vehicle (EV) Charging Station Incentive – Entergy
Entergy offers commercial customers rebates for the purchase of select EVs and Level 2 EV charging stations. Rebates are available in the following amounts:
| Technology | Rebate Amounts |
|---|---|
| Electric Forklifts | Up to $500 |
| Electric Drayage Trucks | $1,500 |
| Electric Truck Refrigeration | $1,000 |
| Electric Cranes | Up to $25,000 |
| Electric Scissor and Boom Lift | $100 |
| Light-Duty Electric Burden Carrier | $100 |
| Electric Walk-Behind Floor Scrubber | $100 |
| Electric Riding Floor Scrubber | $150 |
| Electric Golf Cart | $150 |
| Level 2 EV Charging Station | $250 |
| Direct Current Fast Charging (DCFC) Station | Up to $1,500 |
Other technologies may be eligible for this incentive on a case-by-case basis. For more information, including eligible technologies, see the Entergy eTech website.
Residential Electric Vehicle (EV) Charging Station Rebate – Austin Energy
Austin Energy offers residential customers who own an EV a rebate of 50% of the cost to purchase and install a qualified Level 2 EV charging station, up to $1,200. For more information, including eligibility requirements, see the Austin Energy Home Charging website.
Commercial Electric Vehicle (EV) Charging Station Rebate – Austin Energy
Austin Energy offers rebates to commercial customers for the purchase and installation of Level 2 or direct current fast EV charging stations at commercial properties. For more information, including funding amounts and eligibility requirements, see the Austin Energy Commercial Charging website.
Natural Gas Vehicle (NGV) Rebates - Texas Gas Service
The Texas Gas Service Conservation Program offers commercial customers a rebate of up to $2,000 for the purchase of a qualified NGV or $3,000 for the conversion of a gasoline powered vehicle to operate on natural gas. The rebate is available for up to five vehicles per customer, and only centers certified by the Railroad Commission of Texas may perform conversions. These incentives are available to commercial customers within Central Texas or Rio Grande Valley. For more information, including eligibility requirements, see the Texas Gas Service Rebate Application website.
Point of Contact
Dave Miller
Texas Gas Service
dave.miller@onegas.com
Electric Vehicle (EV) Charging Station Rebate – United Cooperative Services (UCS)
UCS offers residential customers a rebate of 50% of the cost to install a Level 2 EV charging station, up to $500. Eligible customers must agree to charge EVs during off-peak hours. For more information, including eligibility and how to apply, see the UCS Energy Rebate Programs website.
Electric Vehicle (EV) Infrastructure Support
Texas utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.
Laws and Regulations
Electric Vehicle (EV) Registration Fee
Beginning September 1, 2023, in addition to standard vehicle registration fees, new EV owners must pay a first-time registration fee of $400. After the first-time registration fee, the fee for EV registration renewal is $200. Fees contribute to the State Highway Fund.
(Reference Texas Senate Bill 505, 2023 and Texas Statutes, Transportation Code 502.198(a))
Automated Vehicle (AV) Testing and Operation Support
Texas state agencies must support the testing and operation of AVs. AV usage is authorized if the driving system complies with traffic or motor vehicle laws and is licensed to operate. Additionally, Avs may operate on highways if the AV complies with state and federal laws, is equipped with a recording device, is registered with the Texas Department of Motor Vehicles, and is covered by insurance. AVs are defined as motor vehicles equipped with technology that allows vehicle automation to perform one or more driving functions without the direct control of the driver. In the event of an accident, the vehicle operator must notify local authorities or the Texas Department of Public Safety.
(Reference Texas Statutes, Transportation Code 545.451-545.456)
Connected and Automated Vehicle (CAV) Task Force
The Texas Department of Transportation (TxDOT) formed the CAV task force to support CAV advancement in Texas. The task force will serve as a resource for information and will coordinate all ongoing CAV projects, investments, and initiatives in Texas. The task force will host industry forums and report lessons learned to facilitate progress and encourage collaboration. For more information, see the TxDOT CAV Task Force website.
Authorization of Governmental Alternative Fuel Fleet Grant Program
The Texas Commission on Environmental Quality (TCEQ) must 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 must 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 Texas Statutes, Health and Safety Code 386.153)
Alternative Fuel Vehicle (AFV) Registration Tracking Program
The Texas Department of Motor Vehicles (Department) collects data on the number of AFVs registered in the state. The Department must submit an annual report to the Texas Legislature detailing the results of each data collection year. For the purpose of this program, AFVs include electric, natural gas, propane, hydrogen fuel cell, ethanol, methanol, and hybrid vehicles.
(Reference Texas Statutes, Transportation Code 502.001 and 502.004)
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 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 if 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)
Public Utility Definition
Electric vehicle charging service providers are not regulated as a public utility in areas of customer choice, where utility customers have the option to choose an alternate electricity supplier. The Texas Public Utilities Commission is authorized to exempt electric vehicle supply equipment from being regulated as a public utility.
(Reference Texas Utilities Code 37.001)
Public Utility Electric Vehicle (EV) Charging Station Policy Design Requirements
Public electric utilities must develop and implement competitively neutral electricity policies and tariffs to encourage competitive private sector investment in the deployment of public EV charging stations. Entities that are not electric utilities may enter into an agreement with a utility to own or operate EV charging stations.
The Public Utility Commission of Texas may not authorize electric utilities to recover costs for the installation, equipment, operation, and maintenance of EV charging stations.
(Reference Senate Bill 1002, 2023)
Fuel Dispenser Labeling Requirement
All equipment used to dispense motor fuel containing at least 1% ethanol or methanol must be clearly labeled to inform customers that the fuel contains ethanol or methanol.
(Reference Texas Statutes, Occupations Code 2310.201)
Natural Gas Vehicle (NGV) Inspection Requirements
To pass the state vehicle inspection, an NGV owner must be able to provide proof that the fuel tank on the vehicle has met inspection requirements and falls within the manufacturer’s recommended service life, as required by Title 49 of the U.S. Code of Federal Regulations, section 571.304. Fleet operators must also prove that a certified technician inspected the vehicle’s fuel tank.
(Reference Texas Administrative Code Title 32, Part 1, Chapter 23, Subchapter D, Rule 23.41)
Provision for Establishment of Hydrogen Program
The Texas Department of Transportation (TxDOT) may seek funding from public and private sources to acquire and operate hydrogen vehicles and establish and operate publicly accessible hydrogen fueling stations. TxDOT must ensure that data on emissions from the vehicles, fueling stations, and related hydrogen production are monitored and compared with data on emissions from control vehicles with internal combustion engines that operate on fuels other than hydrogen. TxDOT must report the results of this monitoring, analysis, and comparison to the Texas Commission on Environmental Quality.
(Reference Texas Statutes, Transportation Code 201.618)
Idle Reduction Requirement
A vehicle may not idle for more than five minutes from April through October in cities and counties where the local government has signed a Memorandum of Agreement with the Texas Commission on Environmental Quality (TCEQ). Exemptions apply for the following: vehicles with a gross vehicle weight rating (GVWR) of 14,000 pounds (lbs.) or less; emergency or law enforcement vehicles; airport ground support vehicles; rented/leased vehicles; to perform needed work, including roadway construction, maintenance and diagnostics; to defrost a windshield; traffic conditions; and hours of service compliance activities. Vehicles may idle for up to 30 minutes for bus passenger comfort or transit operations. Fines vary by jurisdiction.
TCEQ may not prohibit or limit the idling of any vehicle with a GVWR greater than 8,500 lbs. provided that the vehicle is equipped with a 2008 or subsequent model year heavy-duty diesel or natural gas engine that is certified by the U.S. Environmental Protection Agency or another state agency to emit no more than 30 grams of nitrogen oxides per hour when idling.
(Reference Texas Statutes, Health and Safety Code 382.0191 and Texas Administrative Code Title 13 Part 1 Chapter 114 Division 2 Rule 30.114.510-30.114.517)
Neighborhood Electric Vehicle (NEV) Access to Roadways
NEVs are defined as vehicles that can attain a maximum speed of 35 miles per hour (mph) and that must comply with the safety standards in Title 49 of the U.S. Code of Federal Regulations, section 571.500. NEVs may only be used on roadways that have a posted speed limit of 45 mph or less except to cross at an intersection. A county, municipality, or the Texas Department of Transportation may prohibit the operation of NEVs on a street or highway if the governing body determines that the prohibition is necessary in the interest of safety.
(Reference Texas Statutes, Transportation Code 551.301-551.303)
Natural Gas Tax
Compressed natural gas (CNG) and liquefied natural gas (LNG) dispensed into a motor vehicle is taxed at a rate of $0.15 per gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE), depending on how the dispenser lists the price. A GGE is defined as 5.66 pounds (lbs.) of CNG or 5.37 lbs. of LNG. A DGE is defined as 6.38 lbs. of CNG or 6.06 lbs. of LNG. Exemptions may apply.
(Reference Texas Statutes, Tax Code 162.001, and 162.351-162.356)
Propane and Natural Gas Licensing and Safety
The Railroad Commission of Texas regulates the safety of the natural gas and propane industries. Any business that engages in propane or natural gas activities in Texas must be licensed. These activities include selling, transporting, dispensing or storing propane and natural gas and manufacturing, installing, servicing or repairing propane and natural gas containers, systems and appliances. Some exceptions apply. For more information, see the Texas Safety, Licensing, Training, and Certification website.
(Reference Texas Statutes, Natural Resources Code 113.011, 113.081, 116.011, and 116.031)
Publicly Funded Electric Vehicle (EV) Charging Station Connector Standards
By December 1, 2024, the Texas Department of Licensing and Regulation (TDLR), in consultation with the Texas Department of Transportation, must adopt standards for EV charging stations to ensure that the connectors or plugs are widely compatible with as many EVs as practicable.
After December 1, 2024, publicly available EV charging stations funded through public grants or state rebate programs must meet the standards adopted by TDLR.
(Reference Senate Bill 1732, 2023)
Vehicle Purchase and Lease Requirements
Political subdivisions are prohibited from limiting or banning the use, sale, or lease of vehicles or fueling infrastructure based on their fuel source. A political subdivision is defined as a city, county, municipality, special district, school district, junior college, or housing authority.
(Reference Senate Bill 1017, 2023)
Electric Vehicle (EV) Charging Station Inspection Regulations
By December 1, 2024, the Texas Commission of Licensing and Regulation (Commission) must adopt rules for EV charging station inspections. The Commission is authorized to set fees to cover the cost of administering an inspection program and establish exemptions.
The Texas Department of Licensing and Regulation (TDLR) is authorized to periodically conduct an inspection of EV charging station, including for complaints, to verify compliance with requirements and standards. TDLR must establish methods by which consumers can provide complaints regarding EV charging station.
(Reference Senate Bill 1001, 2023)
Hydrogen Fuel Cell Electric Vehicle (FCEV) and Infrastructure Grant Program Authorization
The Texas Commission on Environmental Quality (TCEQ) must establish a grant program to replace on-road and non-road vehicles with newer on-road or non-road FCEVs, including the associated infrastructure. The program must encourage the adoption of FCEVs and associated infrastructure in nonattainment areas.
(Reference House Bill 4885, 2023)