Propane Laws and Incentives in Oklahoma
The list below contains summaries of all Oklahoma laws and incentives related to propane.
Laws and Regulations
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 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 74-78 and 74-130.2)
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 operating on an alternative fuel. Alternative fuels include propane, natural gas, methanol, ethanol, electricity, hydrogen, biodiesel, and more. This includes original equipment manufacturer engines dedicated to operating on an alternative fuel. Electric vehicles (EVs), EV charging infrastructure, and EV technicians must also comply with the rules and regulations of this Act.
(Reference Oklahoma Statutes 40-142.1 through 40-142.16)
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. Alternative fuels include natural gas, propane, ethanol, methanol, electricity, biodiesel, hydrogen, and more. 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 74-130.2 and 74-130.3)
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). Liquefied natural gas (LNG) is also subject to a state motor fuel tax rate of $0.05 per diesel gallon equivalent (DGE).
In lieu of the motor fuel tax, some alternative fuel vehicle (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 listed 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 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. Alternative fuels include propane, natural gas, methanol, ethanol, electricity, hydrogen, biodiesel, and more.
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.
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 includes experts in the natural gas, propane, and electric vehicle industries.
(Reference Oklahoma Statutes 40-142.6)
Oklahoma Commercial Property Assessed Clean Energy (C-PACE) Program Authorization
Counties are authorized to establish C-PACE programs to facilitate loans between qualifying property owners and private lenders. Loans may be offered to commercial properties for projects related to alternative fuel vehicles and associated infrastructure. For more information, including eligibility requirements, see the Oklahoma C-PACE website.
(Reference Oklahoma Statutes 19-460.5)
State Incentives
Alternative Fuel School Bus and Electric Vehicle (EV) Charger Rebate Program
The Oklahoma Department of Environmental Quality (DEQ) offers rebates for projects that repower or replace an actively used, engine model year 2009 or older, diesel school bus with a model that operates on alternative fuel. Eligible alternative fuels and technologies include all-electric, propane, and natural gas. Applicants may receive rebates of up to 45% of project costs. Charging infrastructure for electric buses is eligible for funding, but is subject to a per-charger maximum and project cap. The program is funded by Oklahoma’s portion of the Volkswagen Environmental Mitigation Trust. Applications must be submitted through Oklahoma’s Clean Diesel Program. For more information, see the DEQ Alternative Fuel School Bus Program website.
Alternative Fuel Vehicle (AFV) Tax Credit
For tax years beginning before December 31, 2028, a one-time income tax credit is available for up to $50,000 towards the cost of purchasing a new original equipment manufactured AFV or converting a vehicle to operate on an alternative fuel. Tax credit amounts vary depending in the gross vehicle weight rating (GVWR) of the vehicle:
| GVWR | Maximum Amount |
|---|---|
| 6,000 pounds (lbs.) or below | $5,500 |
| 6,001 lbs. to 10,000 lbs. | $9,000 |
| 10,001 lbs. to 26,500 lbs. | $26,000 |
| Greater than 26,501 lbs. | $100,000 |
The state also provides a tax credit 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, not previously used to modify or retrofit any vehicle, meet applicable federal and state safety standards, and must be installed by a state certified alternative fuels equipment technician. Eligible alternative fuels include natural gas, propane, and hydrogen. 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 December 31, 2028, a tax credit is available for up to 45% of the cost of installing commercial alternative fueling infrastructure. Eligible alternative fuels include natural gas, propane, hydrogen, and electricity. The infrastructure must be new and not 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 propane, compressed natural gas, or liquefied natural gas fueling system for noncommercial purposes, up to $2,500. The tax credit may be carried forward for up to five years.
(Reference Oklahoma Statutes 68-2357.22)
More Laws and Incentives
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