Propane Laws and Incentives in Texas
The list below contains summaries of all Texas laws and incentives related to propane.
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 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)
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)
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 and 116.011)
State Incentives
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 114.650-114.658)
Clean School Bus Grants
Any public school district or charter school may receive a grant through the Texas Commission on Environmental Quality (TCEQ) to pay 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, see the TCEQ Texas Emissions Reduction Plan website.
(Reference Texas Administrative Code 114.640-114.648 and Texas Statutes, Health and Safety Code 390)
Clean Vehicle and Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Emissions Reduction Incentive Grants (ERIG) Program and Rebate Grants 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. The Rebate Grants Program provides grants to upgrade or replace diesel heavy-duty vehicles and non-road equipment. Qualifying projects must reduce emissions of nitrogen oxides or other pollutants by at least 25% as compared to baseline levels and must meet operational and fuel usage requirements. For more information, including eligibility and the application form, see the TCEQ TERP website. (Reference Texas Statutes Health and Safety Code 386 and Texas Administrative Code 114.620-114.629)
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. Grants are available in the following amounts:
| Vehicle Class | Grant Amount |
|---|---|
| Class 1 | $15,000 |
| Class 2-3 | $20,000 |
| Class 4-6 | $35,000 |
| Class 7-8 | $70,000 |
Up to 10% of awarded funds may be granted for the purchase, lease, or installation of refueling infrastructure or equipment, or refueling services in conjunction with an eligible vehicle purchase or lease. Special districts and government entities that operate a fleet greater than 15 vehicles are eligible. For more information, see the TCEQ GAFF website. (Reference Texas Statutes, Water Code 5.124 and 5.229, and Texas Statutes 386.153)
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, or electricity. For more information, 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 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 eligibility requirements and the application form, see the TCEQ Texas Emissions Reduction Plan website.
(Reference Texas Statutes, Health and Safety Code 386 and Texas Administrative Code 114.610-114.613)
Seaport and Rail Yard Emissions Reduction Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Seaport and Rail Yard Areas Emissions Reduction Program (Program) as part of the Texas Emissions Reduction Plan (TERP). The 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 Subchapter D-1)
More Laws and Incentives
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