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1 STATE OF OKLAHOMA
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2 2nd Session of the 60th Legislature (2026)
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3 SENATE BILL 1579 By: Paxton
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7 AS INTRODUCED
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8 An Act relating to tax credit; amending 68 O.S. 2021,
8 Section 2357.22, as last amended by Section 153,
9 Chapter 452, O.S.L. 2024 (68 O.S. Supp. 2025, Section
9 2357.22), which relates to credit for investments in
10 qualified clean-burning motor vehicle fuel property
10 or in hydrogen fuel cells; expanding forms of
11 taxation for which a credit is allowed against;
11 updating statutory references; updating statutory
12 language; and providing an effective date.
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15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.22, as
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17 last amended by Section 153, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
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18 2025, Section 2357.22), is amended to read as follows:
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19 Section 2357.22. A. For tax years 2028 and before, there shall
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20 be allowed a one-time credit against the income tax imposed by
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21 Section Sections 2355 and 2370 of this title or the tax imposed by
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22 Section 624 or 628 of Title 36 of the Oklahoma Statutes for
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23 investments in qualified clean-burning motor vehicle fuel property
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24 placed in service on or after January 1, 1991, or with respect to a
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1 hydrogen fuel cell, on or after the effective date of this act July
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2 1, 2023.
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3 B. As used in this section, "qualified clean-burning motor
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4 vehicle fuel property" means:
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5 1. Equipment installed to modify a motor vehicle which is
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6 propelled by gasoline or diesel fuel so that the vehicle may be
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7 propelled by compressed natural gas, a hydrogen fuel cell, liquefied
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8 natural gas, or liquefied petroleum gas. The equipment covered by
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9 this paragraph must:
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10 a. be new, not previously used to modify or retrofit any
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11 vehicle propelled by gasoline or diesel fuel and be
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12 installed by an alternative fuels equipment technician
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13 who is certified in accordance with the Alternative
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14 Fuels Technician Certification Act,
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15 b. meet all Federal Motor Vehicle Safety Standards set
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16 forth in 49 CFR C.F.R., Part 571, or
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17 c. for any commercial motor vehicle (CMV), follow the
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18 Federal Motor Carrier Safety Regulations or Oklahoma
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19 Intrastate Motor Carrier Regulations;
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20 2. A motor vehicle originally equipped so that the vehicle may
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21 be propelled by compressed natural gas, a hydrogen fuel cell, or
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22 liquefied natural gas or liquefied petroleum gas but only to the
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23 extent of the portion of the basis of such motor vehicle which is
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24 attributable to the storage of such fuel, the delivery to the engine
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1 of such motor vehicle of such fuel, and the exhaust of gases from
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2 combustion of such fuel;
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3 3. Property, not including a building and its structural
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4 components, which is:
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5 a. directly related to the delivery of compressed natural
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6 gas, liquefied natural gas or liquefied petroleum gas,
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7 or hydrogen for commercial purposes or for a fee or
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8 charge, into the fuel tank of a motor vehicle
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9 propelled by such fuel including compression equipment
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10 and storage tanks for such fuel at the point where
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11 such fuel is so delivered but only if such property is
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12 not used to deliver such fuel into any other type of
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13 storage tank or receptacle and such fuel is not used
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14 for any purpose other than to propel a motor vehicle,
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15 or
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16 b. a metered-for-fee, public access recharging system for
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17 motor vehicles propelled in whole or in part by
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18 electricity. The property covered by this paragraph
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19 must shall be new, and must shall not have been
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20 previously installed or used to refuel vehicles
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21 powered by compressed natural gas, liquefied natural
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22 gas or liquefied petroleum gas, hydrogen, or
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23 electricity;
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1 4. Property which is directly related to the compression and
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2 delivery of natural gas from a private home or residence, for
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3 noncommercial purposes, into the fuel tank of a motor vehicle
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4 propelled by compressed natural gas. The property covered by this
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5 paragraph must shall be new and must shall not have been previously
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6 installed or used to refuel vehicles powered by natural gas; or
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7 5. For tax years 2010 and 2023 through 2028, a motor vehicle
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8 originally equipped so that the vehicle may be propelled by a
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9 hydrogen fuel cell electric fueling system.
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10 C. As used in this section, "motor vehicle" means a motor
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11 vehicle originally designed by the manufacturer to operate lawfully
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12 and principally on streets and highways.
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13 D. The credit provided for in subsection A of this section
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14 shall be as follows:
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15 1. For the qualified clean-burning motor vehicle fuel property
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16 defined in paragraphs 1, 2, or 5 of subsection B of this section,
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17 the amount of the credit shall be as follows based upon gross
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18 vehicle weight of the qualified vehicle:
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19 a. for vehicles up to or below six thousand (6,000)
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20 pounds, the credit shall be a maximum of Five Thousand
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21 Five Hundred Dollars ($5,500.00),
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22 b. for vehicles between six thousand one (6,001) pounds
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23 to ten thousand (10,000) pounds, the credit shall be a
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24 maximum amount of Nine Thousand Dollars ($9,000.00),
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1 c. for vehicles of ten thousand one (10,001) pounds, but
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2 not in excess of twenty-six thousand five hundred
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3 (26,500) pounds, the credit shall be a maximum amount
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4 of Twenty-six Thousand Dollars ($26,000.00), and
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5 d. for vehicles in excess of twenty-six thousand five
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6 hundred one (26,501) pounds, the credit shall be a
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7 maximum amount of One Hundred Thousand Dollars
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8 ($100,000.00);
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9 2. For qualified clean-burning motor vehicle fuel property
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10 defined in paragraph 3 of subsection B of this section, a per-
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11 location credit of forty-five percent (45%) of the cost of the
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12 qualified clean-burning motor vehicle fuel property; and
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13 3. For qualified clean-burning motor vehicle fuel property
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14 defined in paragraph 4 of subsection B of this section, a per-
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15 location credit of the lesser of fifty percent (50%) of the cost of
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16 the qualified clean-burning motor vehicle fuel property or Two
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17 Thousand Five Hundred Dollars ($2,500.00).
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18 E. In cases where no credit has been claimed pursuant to
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19 paragraph 1 of subsection D of this section by any prior owner and
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20 in which a motor vehicle is purchased by a taxpayer with qualified
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21 clean-burning motor vehicle fuel property installed by the
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22 manufacturer of such motor vehicle and the taxpayer is unable or
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23 elects not to determine the exact basis which is attributable to
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24 such property, the taxpayer may claim a credit in an amount not
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1 exceeding the lesser of ten percent (10%) of the cost of the motor
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2 vehicle or One Thousand Five Hundred Dollars ($1,500.00).
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3 F. If the tax credit allowed pursuant to subsection A of this
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4 section exceeds the amount of income taxes due or if there are no
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5 state income taxes due on the income of the taxpayer, the amount of
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6 the credit not used as an offset against the income taxes of a
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7 taxable year may be carried forward, in order, as a credit against
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8 subsequent income tax liability for a period not to exceed five (5)
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9 years. The tax credit authorized pursuant to the provisions of this
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10 section shall not be used to reduce the tax liability of the
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11 taxpayer to less than zero (0).
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12 G. A husband and wife who file separate returns for a taxable
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13 year in which they could have filed a joint return may each claim
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14 only one-half (1/2) of the tax credit that would have been allowed
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15 for a joint return.
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16 H. The Oklahoma Tax Commission is herein empowered to
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17 promulgate rules by which the purpose of this section shall be
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18 administered including the power to establish and enforce penalties
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19 for violations thereof.
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20 I. Notwithstanding the provisions of Section 2352 of this
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21 title, for the fiscal year beginning on July 1, 2014, through fiscal
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22 year 2023, the Tax Commission shall calculate an amount that equals
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23 five percent (5%) of the cost of qualified clean-burning motor
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24 vehicle fuel property as provided for in paragraph 1 of subsection D
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1 of this section for tax year 2012. For each subsequent fiscal year
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2 thereafter, the Tax Commission shall perform the same computation
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3 with respect to the second tax year preceding the beginning of each
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4 subsequent fiscal year. For fiscal year 2024, the Tax Commission
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5 shall calculate an amount that equals twelve percent (12%) of the
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6 credit for qualified clean-burning motor vehicle fuel property as
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7 provided in paragraph 1 of subsection D of this section for tax year
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8 2021. For each subsequent fiscal year, the Tax Commission shall
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9 perform the same calculation for credits claimed in the second
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10 preceding tax year. The Tax Commission shall then transfer an
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11 amount equal to the amount calculated in this subsection from the
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12 revenue derived pursuant to the provisions of subsections A, B, and
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13 E of Section 2355 of this title to the Compressed Natural Gas
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14 Conversion Safety and Regulation Fund created in Section 130.25 of
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15 Title 74 of the Oklahoma Statutes.
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16 J. For the tax years 2020 through 2022, the total amount of
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17 credits authorized by this section used to offset tax shall be
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18 adjusted annually to limit the annual amount of credits to Twenty
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19 Million Dollars ($20,000,000.00). The Tax Commission shall annually
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20 calculate and publish by the first day of the affected taxable year
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21 a percentage by which the credits authorized by this section shall
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22 be reduced so the total amount of credits used to offset tax does
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23 not exceed Twenty Million Dollars ($20,000,000.00) per year. The
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24 formula to be used for the percentage adjustment shall be Twenty
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1 Million Dollars ($20,000,000.00) divided by the credits claimed in
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2 the second preceding year, with respect to any changes to the future
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3 of the credit.
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4 K. Pursuant to subsection J of this section, in the event the
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5 total tax credits authorized by this section exceed Twenty Million
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6 Dollars ($20,000,000.00) in any calendar year, the Tax Commission
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7 shall permit any excess over Twenty Million Dollars ($20,000,000.00)
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8 but shall factor such excess into the percentage adjustment formula
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9 for subsequent years with respect to any changes to the future of
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10 the credit.
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11 L. For the tax years 2023 through 2028, the total amount of
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12 credits authorized by this section used to offset tax shall be
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13 adjusted annually to limit the annual amount of credits to:
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14 1. Ten Million Dollars ($10,000,000.00) for qualified clean
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15 burning clean-burning fuel property propelled by compressed natural
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16 gas, liquefied natural gas, or liquefied petroleum gas,; property
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17 related to the delivery of compressed natural gas, liquefied natural
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18 gas, or liquefied petroleum gas,; and property directly related to
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19 the compression and delivery of natural gas;
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20 2. Ten Million Dollars ($10,000,000.00) for property originally
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21 equipped so that the vehicle may be propelled by a hydrogen fuel
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22 cell electric fueling system and property directly related to the
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23 delivery of hydrogen; and
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1 3. Ten Million Dollars ($10,000,000.00) for property which is a
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2 metered-for-fee, public access recharging system for motor vehicles
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3 propelled in whole or in part by electricity.
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4 The Tax Commission shall annually calculate and publish by the
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5 first day of the affected taxable year a percentage by which the
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6 credits authorized by this section shall be reduced so the total
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7 amount of credits used to offset tax does not exceed each of the
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8 limits provided in paragraphs 1 through 3 of this subsection. The
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9 formula to be used for the percentage adjustment shall be Ten
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10 Million Dollars ($10,000,000.00) divided by the credits claimed in
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11 the second preceding year, with respect to any changes to the future
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12 of the credit.
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13 M. Pursuant to subsection L of this section, in the event the
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14 tax credits authorized by this section exceed any of the limits
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15 provided in paragraphs 1 through 3 of subsection L of this section
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16 in any year, the Tax Commission shall permit any excess over Ten
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17 Million Dollars ($10,000,000.00) but shall factor such excess into
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18 the percentage adjustment formula for subsequent years with respect
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19 to any changes to the future of the credit.
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20 N. The Tax Commission shall notify the Office of the State
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21 Secretary of Energy and Environment at any time when the amount of
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22 claims for credits allowed pursuant to this section reaches eighty
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23 percent (80%) of the total annual limit provided in subsection J of
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24 this section. Upon such notification, the Secretary shall provide
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1 notice to the Governor, President Pro Tempore of the Senate, and
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2 Speaker of the House of Representatives.
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3 SECTION 2. This act shall become effective November 1, 2026.
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5 60-2-2620 QD 1/12/2026 11:19:18 PM
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Req. No. 2620 Page 10Every fact on this page links to its source, starting with the official bill record.