Senate approves tax incentives for state’s budding hydrogen industry

On the heels of the governor’s announcement that Oklahoma is forming a partnership with Arkansas and Louisiana to create a regional hydrogen hub, the state Senate has passed two measures that would give tax credits to businesses and individuals utilizing and producing the clean and affordable energy source.

Authored by Sen. John Michael Montgomery, R-Lawton, Senate Bills 1857 and 1858 would support the tri-state initiative by incentivizing the use of hydrogen-powered vehicles and encouraging hydrogen engineering.

“This is a very exciting endeavor, and hydrogen has the real possibility to be a viable commercial fuel, especially when you consider how clean and cost-effective this type of energy is in relation to other sources,” Montgomery said. “We have an excellent opportunity to be a nationwide leader in hydrogen fuel production, but we must give businesses the tools they need to succeed when developing this new energy type.”

SB 1857 would add hydrogen vehicles to the list of eligible recipients for the state’s 10/10/10 vehicle tax credit plan, which has a cap of $10 million for qualified, clean burning vehicles using compressed natural gas; a $10 million cap for property that has charging stations for electric motor vehicles; and would add a $10 million credit for property originally equipped so the vehicle may be propelled by a hydrogen fuel cell electric fueling system. The credit may be claimed for five years, from 2023-2028, and the maximum amount any individual may claim would be $100,000 for vehicles weighing more than 26,501 pounds.

SB 1858 would provide companies a tax credit for 50% of the tuition paid for employees attaining a degree related to hydrogen engineering within one year of working for a qualifying employer. The cap for the credit is $2,500 for the first and second years of employment, $1,500 for the third year; $1,000 for the fourth year of employment; and $500 for the fifth year.

“A task force looking into Oklahoma’s hydrogen industry predicted that investing in this alternative energy source could result in more than 4,400 direct jobs, with the potential to creative a total impact of about 19,500 jobs, and have an annual impact of $1.5 to $2.5 billion on our state’s economy,” Montgomery said. “We are well positioned as a state to advance in this area and help our country in the pursuit of energy independence, and these credits are two pieces of the puzzle to attract these businesses to Oklahoma.”

The measures now move across the rotunda where Rep. Kevin Wallace, R-Wellston, will carry SB 1857 and Rep. Ryan Martinez, R-Edmond, will carry SB 1858.