Incentives

Tax Credits, Rebates and Grants for NGVs

In an effort to reduce America’s dependence on foreign oil, reduce urban emissions and reduce greenhouse gases, the federal government and some state governments and natural gas utilities provide a number of incentive programs to encourage the purchase and use of Natural Gas Vehicles (NGVs).   Of particular interest to Austin residents are the federal income tax credit and the Texas Gas Service rebate. Also listed below, you will find a summary of the most relevant Oklahoma state NGV incentive programs.

There are currently a couple of Federal Tax Credit Programs in Congress pending legislation, a rough summary of which can be found at the bottom of this page. 

TEXAS:

Rebate from Texas Gas Service

 The Texas Gas Service Conservation Program offers a $2,000 to 3,000 rebate for conversion of a gasoline-powered vehicle to operate on natural gas. These incentives are available to commercial and residential customers in Austin and Sunset Valley with specific gas rate codes.  The program also offers a $2,000 incentive for the installation of a vehicle refueling unit.

 

Texas Natural Gas Vehicle Grant Program

The TNGVGP provides grants to encourage an entity that owns and operates a heavy-duty or medium-duty motor vehicle to repower the vehicle with a natural gas engine or replace the vehicle with a natural gas vehicle. Grant applicants must go through a Participating Dealer under contract with the TCEQ to apply. The TNGVGP is currently accepting grant applications. Applications will be accepted up to May 31, 2013.

Natural Gas Vehicle (NGV) and Fueling Infrastructure Grants

Effective September 1, 2011, the Texas Commission on Environmental Quality (CEQ) will establish and administer the NGV Grant Program, part of the Texas Emissions Reduction Plan, which provides grants to replace existing medium- and heavy-duty vehicles with new, converted, or repowered NGVs. Qualifying vehicles must be on-road vehicles with a gross vehicle weight rating of more than 8,500 pounds and certified to current federal emissions standards. Grant funds may cover only the incremental costs. Additional terms and conditions apply.

To ensure that NGVs have access to natural gas fueling infrastructure, CEQ may also award grants to support the development of a network of natural gas fueling stations along the interstate highways connecting Houston, San Antonio, Dallas, and Forth Worth. Through a competitive process, CEQ may not award more than three station grants to any one entity, or more than one grant for each station. Grant amounts may not exceed $100,000 for a compressed natural gas station, $250,000 for a liquefied natural gas station, or $400,000 for a station providing both forms of natural gas. Funded stations must be accessible to the public and located within three miles of an interstate highway system. Additional terms and conditions apply.

This program ends August 31, 2017. (Reference Senate Bill 20, 2011, and Texas Statutes, Health and Safety Code 393)

Clean Vehicle and Infrastructure Grants

The Texas Commission on Environmental Quality administers the Emissions Reduction Incentive Grants (ERIG) Program, part of the Texas Emissions Reduction Plan, which 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 heavy-duty vehicle replacement, retrofit, or repower; alternative fuel dispensing infrastructure; idle reduction and electrification infrastructure; and alternative fuel use. As of July 2011, the latest ERIG application period has closed. (Reference Texas Statutes, Health and Safety Code 386)

Alternative Fuel and Advanced Vehicle Research and Development Grants

The Texas Council on Environmental Quality administers the New Technology Research and Development (NTRD) Program, part of the Texas Emissions Reduction Plan, which provides grants for alternative fuel and advanced technology demonstration and infrastructure projects to encourage and support research, development, and commercialization of technologies that reduce pollution. As of July 2011, the latest NTRD grant application period has closed. (Reference Texas Statutes, Health and Safety Code 387)

Clean Fleet Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean Fleet Program, part of the Texas Emissions Reduction Plan, which 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 100 vehicles and places 25 or more qualifying vehicles in service for use entirely in Texas during a given calendar year may be eligible for grant. 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. As of July 2011, the latest grant application period has closed. (Reference Texas Statutes, Health and Safety Code 391)

Heavy-Duty Natural Gas Vehicle (NGV) Grants

The Texas General Land Office administers the NGV Initiative Grant Program to encourage public-sector fleets in certain counties to increase their use of heavy-duty NGVs. Private fleets also may be eligible particularly those that operate directly under contract for government work or do other government business. The program is funded with a Texas Emissions Reduction Plan grant through the Texas Commission on Environmental Quality. A variety of vehicles, including street sweepers, forklifts, buses, and garbage trucks, are eligible for grants to help cover the cost of replacing diesel vehicles with NGVs. The program ends August 31, 2012. As of July 2011, funding is not available.

Alternative Fueling Infrastructure Grants

Effective September 1, 2011, the Texas Commission on Environmental Quality will establish and administer the Alternative Fueling Facilities Program, part of the Texas Emissions Reduction Plan, which provides grants for 50% of eligible costs, up to $500,000, to construct, reconstruct, or acquire a facility to store, compress, or dispense alternative fuels in Texas air quality nonattainment areas. Qualified alternative fuels include 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, 2018. (Reference Senate Bill 20, 2011, and Texas Statutes, Health and Safety Code 394)

Oklahoma:

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before January 1, 2015, a one-time income tax credit is available for 50% of the incremental cost of purchasing a new original equipment manufacturer AFV or converting a vehicle to operate on an alternative fuel. The state also provides a tax credit for 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 and must not have been previously used to modify or retrofit any vehicle. The alternative fuels eligible for the credit are compressed natural gas, liquefied natural gas, and liquefied petroleum gas (propane), and electricity. 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, 2015, a tax credit is available for up to 75% of the cost of alternative fueling infrastructure. Eligible alternative fuels include compressed natural gas (CNG), liquefied natural gas, liquefied petroleum 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 CNG fueling system, for 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) and Fueling Infrastructure Loans

The Oklahoma Department of Central Services’ Alternative Fuels Conversion Loan program provides 0% interest loans to government fleets for converting vehicles to operate on alternative fuels, the construction of AFV fueling infrastructure, and the incremental cost associated with the purchase of an original equipment manufacturer AFV. The program provides up to $10,000 per converted or newly purchased AFV and up to $150,000 for the development or installation of fueling infrastructure. The borrower must repay the loan within a seven-year period. Repayment is collected through a surcharge on alternative fuel the borrower purchased in the amount equivalent to the per gallon fuel cost savings from using an alternative fuel. If the price of the alternative fuel does not remain below the price of the conventional fuel that it replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities. (Reference Oklahoma Statutes 74-130.4 and 74-130.5)

Alternative Fuel Vehicle (AFV) Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an original equipment manufacturer AFV, and for the installation of AFV fueling infrastructure. The repayment of the loan has a maximum six-year period.

 

Pending Federal Legislation

Income Tax Credit for Alternative Fuel Vehicles

NGVAmerica’s top legislative priority, The New Alternative Transportation to Give Americans (NAT GAS) Act of 2011 has now been introduced in both the U.S. House of Representatives and the U.S. Senate. The House legislation (HR 1380) was introduced by Reps. John Sullivan, R-OK, Dan Boren, D-OK, John Larson, D-CT, and Kevin Brady, R-Texas and now has over 180 cosponsors. The Senate legislation S. 1863 was introduced by Senators Robert Menendez (D-NJ), Richard Burr (R-NC), Saxby Chambliss (R-GA), and Senate Majority Leader Harry Read (D-NV). There are some differences between the two legislative proposals. The House proposal provides incentives for the use of natural gas as a vehicle fuel; the purchase of natural gas fueled vehicles; and the installation of natural gas vehicle refueling property. Each of the these incentives would be in place for five years. The Senate proposal extends tax credits for natural gas vehicles and building refueling infrastructure for five years. Importantly, in the Senate version, the incentives would be fully paid for and would not add one dime to the nation’s deficit since the bill includes a unique surcharge on natural gas used in vehicles that would reimburse the Treasury for the cost.

Click here to read press releases and side-by-side comparisons of the House and Senate NAT GAS Bills.

 

Most of the above information is provided courtesy of U.S Department of Energy Alternative Fuels and Advanced Vehicles Data Center as well as Natural Gas Vehicle 

Comments are closed.