05/10/2019
Governor Stitt approves measure to extend CNG tax credit
Jack Money
by JACK MONEY
Published: Tue, May 7, 2019 5:00 AM
A measure that redefines and extends tax credits related to compressed natural gas vehicles and to the infrastructure used to keep them rolling cleared Gov. Kevin Stitt’s desk on Monday.
House Bill 2095, authored by state Reps. Terry O’Donnell, Mark McBride, Scott Fetgatter and state Sen. Stephanie Bice extends the availability of a tax credit that can be used by people who either convert diesel or gasoline-powered vehicles to run on compressed natural gas, liquefied natural gas or liquefied petroleum gas, or buy vehicles already equipped to operate on those alternative fuels.
The measure extends the availability of state tax credits from Jan. 1, 2020, to Dec. 31, 2027, but caps its maximum annual affect on the state’s budget at $20 million.
It also extends the availability of a tax credit owners of equipment used to deliver those alternative fuels to vehicles, either through a commercial industrial application or a retail pay-for-fuel scenario, though it reduces the amount of the credit those people can qualify to receive.
Previously, state law allowed people who either converted a vehicle or bought a new alternative fuel vehicle that runs on CNG, LNG or LPG to seek a state tax credit that was worth up to 45% of the vehicle’s cost or conversion’s cost in the year the purchase was made.
Going forward, the extension caps the amount of tax credits owners can receive for those costs from $5,500 for smaller vehicles to $50,000 for vehicles that weigh more than 26,501 pounds.
As for people who buy equipment to commercially provide supply to CNG, LNG or LPG vehicle operators, the extended tax credit reduces that amount from 75% of its purchase cost to 45%.
The measure also offers the same credit to people who buy equipment to supply power to electric vehicles in a retail pay-for-fuel scenario. Oklahoma doesn’t currently offer state tax credits to buyers of electric vehicles, although the federal government offers a tax credit for up to $7,500, depending on the vehicle’s battery capacity, manufacturer quotas and other issues.
House Bill 2095 was supported by both commercial and private users of the technology.
They shared their enthusiastic backing of the measure with Stitt’s office.
“I believe this tax credit has done exactly what the state created it to do: create a new market for Oklahoma natural gas both in Oklahoma as well as nationally, create jobs by the investment of private money in Oklahoma and help clean up our environment,” Larry Williamson, of Broken Arrow, the owner of a CNG-powered Honda Civic, told Stitt in a letter.
“This bill does not provide a subsidy to anyone, it merely allows taxpayers to keep more of their own money if they will invest in an activity beneficial to the state.”
Various companies belonging to a CNG coalition also urged the governor to sign the measure.
Waste Management, for example, wrote Stitt to let him know that 81% of the trucks it operates in Oklahoma City and Tulsa run on CNG.
Each of those vehicles, wrote Vice President Donald J. Smith, saved the company from having to buy 8,000 gallons of diesel a year, ran more quietly than diesel vehicles and reduced greenhouse gas emissions by 14 metric tons.
“House Bill 2095 is essential to the continuance of our mission in Oklahoma,” Smith wrote.
CNG coalition supporters that backed the bill include UPS, OnCue Marketing, the Love’s Family of Companies, Sparq Natural Gas and others.
The State Chamber applauded Stitt’s approval of the measure.
“The purpose of most tax incentives is to boost job creation, capital investment, and economic activity,” said Fred Morgan, the organization’s president and CEO. “By signing House Bill 2095 into law, Gov. Stitt clearly recognizes the success that compressed natural gas (CNG) … have in creating economic activity.”
