Texas Policy Data

Summary

Texas offers a number of grants and incentive programs for AFV and NGV vehicles, infrastructure, and technology development. Additionally, the Texas General Land Office (GLO) offers school districts lower priced natural gas for fueling school buses.

Texas has an AFV requirement for all state agencies with more than 15 vehicles to purchase AFVs and natural gas (both compressed and liquified) is specifically listed in the statute.

Vehicles

Current Estimated Fleet-based NGVs in Texas

~2,321

Vehicles by Fuel Type

Stations

Current Public NGV Fueling Stations - 82 CNG / 14 LNG

Private NGV Fueling Stations - 43 CNG / 6 LNG

Fuel Taxes

Texas Motor Fuel Taxation Website

CNG - 15.0 ¢ / Gallon - Reference

LNG - 15.0 ¢ / Gallon - Reference

Gasoline - 20.0 ¢ / Gallon - Reference

Diesel - 20.0 ¢ / Gallon - Reference

IFTA - IFTA taxes are applied to vehicles of 3+ axles, or weighing more than 26,000 pounds. IFTA tax tables can be found here.

Incentives

Clean Vehicle Replacement Vouchers

The Texas Commission on Environmental Quality administers the AirCheckTexas Drive a Clean Machine program, which provides vehicle replacement assistance for qualified individuals owning vehicles registered in participating counties. Vouchers in the amount of $3,500 are available toward the purchase of a hybrid electric, battery electric, or natural gas vehicle that is up to three model years old. For more information about participating counties, qualified vehicles, and program requirements, see the AirCheckTexas Drive a Clean Machine website. (Reference Texas Statutes, Health and Safety Code 382.209)

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 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. (Reference Texas Statutes, Health and Safety Code 386)

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 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. As of September 2012, the latest grant application period has closed.(Reference Texas Statutes, Health and Safety Code 386) (Reference Texas Statutes, Health and Safety Code 391)

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)

Natural Gas Vehicle (NGV) and Fueling Infrastructure Grants

The Texas Commission on Environmental Quality (TCEQ) administers 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. Applicants must apply through a participating dealer under contract with TCEQ. Additional terms and conditions apply.
To ensure that NGVs have access to natural gas fueling infrastructure, TCEQ may also award grants through the Clean Transportation Triangle Program 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, TCEQ 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.
These programs end August 31, 2017. (Reference Texas Statutes, Health and Safety Code 386) (Reference Texas Statutes, Health and Safety Code 393)

Alternative Fueling Infrastructure Grants

The Texas Commission on Environmental Quality administers 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 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, 2018. (Reference Texas Statutes, Health and Safety Code 386)(Reference Texas Statutes, Health and Safety Code 394)

Utility/Private Incentives

Natural Gas Vehicle (NGV) and Fueling Infrastructure Rebates - Texas Gas Service

The Texas Gas Service Conservation Program offers a $2,000 rebate 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. A $1,000 rebate is also available for the purchase of a natural gas forklift. Additionally, qualified residential and commercial NGV fueling infrastructure may be eligible for a $2,000 rebate. These incentives are available to commercial and residential customers within the city limits of Austin, Sunset Valley, Rollingwood, West Lake Hills, Cedar Park, and Kyle with specific gas rate codes.

Point of Contact
Wayne Snead
Customer Development Specialist
Texas Gas Service
Phone: (512) 407-2014
Fax: (512) 465-1133
mwsnead@txgas.com

Laws & Regs

Legislative Session Dates:	Bi-Annual Legislature
Legislature Website:	http://www.capitol.state.tx.us/

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. The GGE is equal to 5.66 pounds (lbs.) of CNG or 5.37 lbs. of LNG. The DGE is 6.380 lbs. of CNG or 6.06 lbs. of LNG. Exemptions may apply. (Reference Texas Statutes, Tax Code 162.351-162.356)

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)

Renewable Fuel Promotion

The Texas Bioenergy Policy Council and the Texas Bioenergy Research Committee were established to promote the goal of making biofuels a significant part of the energy industry in Texas by January 1, 2019. The Policy Council is tasked with the following: 1) provide a vision for unifying the state's agricultural, energy, and research strengths in a successful launch of a cellulosic biofuel and bioenergy industry; 2) foster development of cellulosic and bio-based fuels; 3) pursue the creation of a next-generation biofuels energy research program at a university in the state; 4) pursue federal and other funding to position the state as a bioenergy leader; 5) study the feasibility and economic development effect of a blending requirement for biodiesel or cellulosic fuels; 6) pursue the development and use of thermochemical process technologies to produce alternative chemical feedstocks; and 7) study the feasibility of the requirements for renewable natural gas. (Reference Texas Statutes, Agriculture Code 50D)

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: 1) 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 2) 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)

Alternative Fuel Vehicle (AFV) Registration Tracking Program

The Texas Department of Transportation (TxDOT) must develop a program to collect data on the number of AFVs registered in the state. TxDOT 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 plug-in electric vehicles, hybrid electric vehicles, and natural gas vehicles. (Reference Texas Statutes, Transportation Code, 502-004)

Natural Gas Vehicle (NGV) Inspection Requirements

Effective September 1, 2014, in order 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 be able to prove that a certified technician inspected the vehicle's fuel cylinder. (Reference Texas Statutes, Transportation Code 548.104)

Proposed Bills

2015 Session - Proposed Legislation

HR-3494

Resolution to provide authority for the conference committee considering HB 1905 to include certain issues such as expanding exemption from motor fuel taxes to include non-profit entities that provide emergency transportation services. SR 1065 also was approved by Senate but is not covered separately here. Reference - HR3494 Bill History, Reference - HR3494 Bill Text Status: House Adopted, 5/31/15

HB-1

Appropriations bill provides funding for FY 2016 and 2017. Includes additional amounts for the TERP Program. Funding for light duty AFVs that were included in other bills but not passed was vetoed in this bill. Funding allocations for TERP available upon request. Reference - HB1 Bill History, Reference - HB1 Bill Text Status: Signed by Governor on 6/20/15

HB-14

Amends light duty grant program for NGVs to increase amount from $2,500 to $5,000 but lowers the number of qualifying vehicles from 2,000 to 1,000. Also amends the TERP and Texas Triangle Program to extend the duration of various programs until Aug. 1, 2023. Calls for strategic placement of alternative fuel stations. Provides specific limits on funding of CNG and LNG stations, no more than $400K if only one fuel is available but up to $600K if both are available. House Floor Amendments 5/7/15: expand program to upstream oil and gas industry projects, increased % for fueling infrastructure projects, and add reporting requirements for intermediate and final stage manufacturers and conversion installers. Reference - HB14 Bill History, Reference - HB14 Bill Text Status: substitute version reported by Natural Resources and Economic Development Committee on 5/21/15.

HB-395

Increases the motor fuel taxes from 20 cents per gallon to 30 cents. For CNG and LNG it would increase the current 15 cent tax to 25 cents. Reference - HB395 Bill History, Reference - HB395 Bill Text

HB-501

Amends the current motor fuel exemption provision to extend it to rural transit districts that use any motor fuel including CNG or LNG. Reference - HB501 Bill History, Reference - HB501 Bill Text

HB-735

Requires collection of registration information on alternative fuel vehicles. Effective Sept. 1, 2016. Reference - HB735 Bill History, Reference - HB735 Bill Text Left pending in committee - 3/26/15; Placed on intent calendar in Senate 5/20/15; signed by Governor 6/16/15

HB-1184

Amends the energy savings performance contracts in order to make alternative fuel programs that saver energy and reduce emissions eligible. Reference - HB1184 Bill History, Reference - HB1184 Bill Text Status: Passed House 4/13/15; passed Senate 5/26/15; House concurs 5/29/15

HB-1905

Amends motor fuel tax to include exemption for CNG and LNG used by municipalities and also those who use it in emergency transportation service vehicles. Transit company exemption amended to require separate fueling in order to qualify for exemption. These changes added in conference committee. Reference - HB1905 Bill History, Reference - HB1905 Bill Text

HB-2392

Amends the funding allocations in the Health and Safety Code sections that also cover the NGV fueling funding. The change is to add $3 million for energy efficiency loans for existing residential homes. Reference - HB2392 Bill History, Reference - HB2392 Bill Text

HB-2731

Expands exemption from motor fuel taxes to include non-profit entities that provide emergency transportation services. Reference - HB2731 Bill History, Reference - HB2731 Bill Text

HB-3518

Companion to SB 12. Creates alternative fuel grant program for state and local government entities. The funds are to be used to offset the incremental cost of OEM or conversions of AFVs. Includes preference for CNG and LNG vehicles. Expresses the intent that state and local government fleets replace existing vehicles with alternative fuel vehicles and use alternative fuels. AFVs must have range of 125 miles or more and may included dedicated, bi-fuel or dual-fuel vehicles. Gants for refueling infrastructure also are allowed if fueling is not located within 30 miles of a fleet. Funding provided by TERP but cannot be combined with other TERP monies. Effective Sept. 1, 2015 and expires August 31, 2025. Reference - HB3518 Bill History, Reference - HB3518 Bill Text

HB-3634

Authorizes local jurisdictions to impose use tax on motor fuels including CNG and LNG. Must be approved by referendum. Funds must be used for roads and infrastructure. Reference - HB3634 Bill History, Reference - HB3634 Bill Text

HB-3835

Amends state fleet requirements to exclude E85 vehicles. Changes the target implementation date for moving to alternative fuels from 2010 to 2025. Reference - HB3835 Bill History, Reference - HB3835 Bill Text Status: reported favorably out of Committee on Energy Resources 4/27/15; to Committee on Energy Resources 5/14/15.

HB-4083

Amends the incentive for light duty AFVs to include vehicles purchased or leased from out of state vendors. Also extends the incentive to include the upcoming fiscal year starting Sept. 1, 2015. Reference - HB4083 Bill History, Reference - HB4083 Bill Text

SB-12

Creates alternative fuel grant program for state and local government entities. The funds are to be used to offset the incremental cost of OEM or conversions of AFVs. Includes preference for CNG and LNG vehicles. Expresses the intent that state and local government fleets replace existing vehicles with alternative fuel vehicles and use alternative fuels. AFVs must have range of 125 miles (changed to 75 miles or 75 miles per gallon) or more and may included dedicated, bi-fuel or dual-fuel vehicles. Gants for refueling infrastructure also are allowed if fueling is not located within 30 miles (changed to 5 miles) of a fleet. Funding provided by TERP but cannot be combined with other TERP monies. Effective Sept. 1, 2015 and expires August 31, 2025. Reference - SB12 Bill History, Reference - SB12 Bill Text Status: reported favorably by House Committee on Energy Resources 5/19/15.

SB-759

Makes modifications to propane and natural gas taxes related to use in motor vehicles. Not sure what impact these changes have. Fuel providers in Texas should review carefully to consider impact. Reference - SB759 Bill History, Reference - SB759 Bill Text

SB-911

Amends the Texas Natural Gas Vehicle Grant Program. Expands the areas that potentially qualify for fueling infrastructure incentives. Reference - SB911 Bill History, Reference - SB911 Bill Text

SB-1380

Expands the current exemptions that apply to CNG or LNG to include transit authorities and municipal governments. Effective Sept. 1, 2015. Reference - SB1380 Bill History, Reference - SB1380 Bill Text

SB-1619

Companion to HB 14. Amends light duty grant program for NGVs to increase amount from $2,500 to $5,000 but lowers the number of qualifying vehicles from 2,000 to 1,000. Also amends the TERP and Texas Triangle Program to extend the duration of various programs until Aug. 1, 2023. Calls for strategic placement of alternative fuel stations. Provides specific limits on funding of CNG and LNG stations, no more than $400K if only one fuel is available but up to $600K if both are available. Reference - SB1619 Bill History, Reference - SB1619 Bill Text

2014 Session - Proposed Legislation

Texas has no 2014 proposed NGV legislation as of this update.

2013 Session - Proposed Legislation

HB-828

Requires converted CNG vehicles to be emission tested before and after to verify emissions are not higher, also requires CSA inspector to certify the vehicle is safe in accordance with relevant standards.
1/30/2013 Reference - HB-828 Bill History, Reference - HB-828 Bill Text

HB-787

Amends current tax incentives for cleaner vehicles that had provided tax credits for 2003 - 2007 vehicles that achieved more demanding emission levels. As amended, electric vehicles and vehicles powered in part by electric motor would now qualify for a tax credit that runs until 2015. The credit is worth $2,500 and only 2,000 vehicles would receive the credit - runs from Sept. 1, 2013 - Sept. 1, 2015. Reference - HB787 Bill History, Reference - HB787 Bill Text

HB-1115

Amends the Texas Natural Gas Vehicle Program to clarify requirements relating to the placement of fueling stations. Adds that stations may be along the state highways in additional to along the interstate highways connecting the affecting cities in the triangle (i.e., Houston, San Antonio, Dallas-Ft. Worth). Reference - HB1115 Bill History, Reference - HB1115 Bill Text

HB-1736

Exempts renewable natural gas producing property from taxation. Includes natural gas that is of pipeline quality or suitable for motor vehicles. Reference - HB1736 Bill History, Reference - HB1736 Bill Text

HB-2148

Relates to the motor fuel tax on CNG and LNG. Establishes new procedures for administering the motor fuel excise taxes on CNG and LNG. For CNG, it establishes a GGE as 5.66 pounds of natural gas, a DGE of CNG is 6.310 pounds of natural gas. For LNG, a DGE is 6.06 pounds, and a GGE of LNG is 5.370 pounds of LNG. The tax rate for CNG is set at 15 cents per GGE, and the rate for LNG is 15 cents per DGE of LNG.. Very detailed bill providing for exemptions for certain users, refunds, procedures for interstate truckers, and fuel retailer reporting requirements. Reference - HB2148 Bill History, Reference - HB2148 Bill Text 4/21/2013 committee report and substitute printed; amended on floor 5/8/2013

HB-2305

Amends list of items subject to safety inspection to include CNG cylinders. Also prohibits issuance of safety inspection certificate if the cylinder is in unsafe condition or the service life of the cylinder has expired. Reference - HB2305 Bill History, Reference - HB2305 Bill TextPassed House 5/8/2013

HB-3110

Amends the TERP Program for light duty vehicles to provide a $2,500 incentive for CNG and LPG vehicles. The incentive applies to dedicated and bi-fuel vehicles up to 9,600 pounds unloaded gross vehicle weight. Vehicles must have at least 125 mile range on alternative fuel. This incentive is good for vehicles acquired after Jan. 1, 2013 and extends through Aug. 31, 2014. Limited to 2,000 vehicles. Separate incentive also available for electric vehicles with separate limit of 2,000 vehicles. Reference - HB3110 Bill History, Reference - HB3110 Bill Text

HB-3215

Modifies the Texas Natural Gas Vehicle Grant program to allow, in addition to heavy duty vehicles, school buses and taxicabs. Amends the clean corridor triangle to add another route connecting Corpus Christi, Laredo, and San Antonio. Reference - HB3215 Bill History, Reference - HB3215 Bill Text

HB-3658

Amends the Texas AFV grant programs including programs that provide grant funding for NGVs (CFF, Texas Triangle, NGV Grants). Not sure exactly how these changes impact the program. For the funding it does say that not less than 16% shall be used for the Texas NGV Grant Program and not more than 4% used for the NG fueling stations under the Triangle Program. Reference - HB3658 Bill History, Reference - HB3658 Bill Text

HB-3836

Creates a mileage fee for electric vehicles and LNG vehicles and also propane. The system is to be in place and go into effect no later than Jan. 1, 2014. Reference - HB3836 Bill History, Reference - HB3836 Bill Text

SB-1648

Companion to HB 2148. Reference - SB1648 Bill History, Reference - SB1648 Bill Text Considered in hearing 5/7/2013; Committee report printed 5/8/2013

SB-1727

Companion to HB 3658. Reference - SB1727 Bill History, Reference - SB1727 Bill Text

This state was last examined and updated in December, 2016.