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Arkansas Incentives and Laws

Listed below are the summaries of all current Arkansas incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (3)
• Utility/Private Incentives (2)
• Laws and Regulations (7)

State Incentives

Alternative Fuel Grants and Rebates

The Arkansas Alternative Fuels Development Program (Program) provides grants to alternative fuel producers, feedstock processors, and alternative fuel distributors. Producers may be eligible to receive $0.20 per gallon of alternative fuels produced, not to exceed $2 million. Feedstock processors may be eligible to receive up to $3 million or 50% of the project cost, whichever is less, for the construction, modification, alteration, or retrofitting of a feedstock processing facility that is located and operated in Arkansas. Alternative fuel distributors may be eligible to receive up to $300,000 or 50% of the project cost, whichever is less, for assisting with the distribution and storage of alternative fuels or alternative fuel mixtures at distribution facilities that are located and operated in Arkansas.Alternative fuels include biofuel, ethanol, compressed natural gas, or a synthetic transportation fuel.

The Program also provides rebates for the cost of converting diesel or gasoline school buses to dedicated or bi-fuel compressed natural gas school buses. The rebate amount is 75% of the conversion system and incremental conversion costs. School districts may receive up to $50,000 per fiscal year for school bus conversion costs. Other restrictions and requirements may apply.As of March 2012, funding for the Program is not available.

(Reference Arkansas Code 15-13-101, 15-13-102, 15-13-301 to 15-13-306, and 19-6-809)

Idle Reduction Technology Loans

The Arkansas Department of Environmental Quality provides Environmental Loans for Small Businesses at 80% of the current prime interest rate to institute pollution control and prevention measures. Idle reduction technologies for heavy-duty trucking applications are eligible. The maximum loan amount is $45,000, with a $65,000 lifetime maximum for one business. An eligible business must employ 100 individuals or less and demonstrate proof of profitability and the ability to repay the loan.

Idle Reduction Weight Exemption

Any vehicle equipped with idle reduction technology may exceed the state's axle and gross vehicle weight limits by up to 400 pounds to compensate for the additional weight of the idle reduction technology. (Reference Arkansas Highway Police Enforcement Policy 07-03-030)

Utility/Private Incentives

Natural Gas Infrastructure Technical Assistance

CenterPoint Energy offers preliminary feasibility studies for compressed natural gas fueling stations, and may assist with vendor selection on a case-by-case basis within the CenterPoint Energy service area.

Natural Gas Fuel Fleet Services

Clean Energy Fuels offers services to the natural gas vehicle industry that include competitive compressed natural gas pricing for larger fleet customers, as well as alternative fuel vehicle financing.

Laws and Regulations

Alternative Fuel Definition and Specifications

Alternative fuels include biofuel, ethanol, compressed natural gas, propane gas, or a synthetic transportation fuel. Biofuel is defined as a renewable, biodegradable, combustible liquid or gaseous fuel derived from biomass or other renewable resources that can be used as transportation fuel, combustion fuel, or refinery feedstock and that meets ASTM specifications and federal quality requirements for each category or grade of fuel. Biofuel includes biodiesel or renewable diesel, renewable gasoline, renewable naphtha, biocrude, biogas, and other renewable, biodegradable, mono alkyl ester combustible fuel derived from biomass. Ethanol is ethyl alcohol derived from biomass that meets ASTM D4806-04a and federal quality requirements. Synthetic transportation fuel is a liquid fuel produced from biomass by a gasification process or other refining process that meets any applicable state or federal environmental requirement. (Reference Arkansas Code 15-13-102)

State Agency Strategic Energy Plans

Each Arkansas state agency must develop an individual strategic energy plan to reduce its energy consumption and environmental impact. The plans may include criteria for vehicle purchases that, to the extent appropriate for the vehicles' intended use, will result in a more fuel-efficient fleet. (Reference Executive Order 09-07, 2009)

Alternative Fuel Vehicle (AFV) Conversion

Any individual or company who converts a vehicle to operate on an alternative fuel must report the conversion to the Arkansas Department of Finance and Administration within 10 days of the conversion. An owner or operator who fails to report such a conversion may be subject to a penalty. (Reference Arkansas Code 26-62-214)

Biodiesel Use Requirement

All diesel-powered motor vehicles, light trucks, and equipment owned or leased by a state agency must operate using diesel fuel that contains a minimum of 2% biodiesel (B2). For the purpose of this requirement, biodiesel includes renewable diesel and other renewable, biodegradable mono alkyl ester combustible fuel derived from biomass. Waivers to the B2 requirement for state agency vehicles may be granted if the fuel is not available in certain geographic areas, the fuel price is at least $0.15 cents more per gallon then the petroleum equivalent, or compliance with the standard is not otherwise economically feasible. (Reference Arkansas Code 15-13-101, 15-13-102, and 15-13-202 to 15-13-205)

Alternative Fuels Tax

Excise taxes on alternative fuels are imposed on a gasoline gallon equivalent basis. The tax rate for each alternative fuel type is based on the number of motor vehicles licensed in the state that use the specific fuel, not including vehicles the federal government owns or leases. (Reference Arkansas Code 26-62-201)

Natural Gas Metering

Individuals who use natural gas for residential or other tax-free purposes may not use natural gas in motor vehicles unless the natural gas is obtained through a separate meter installed by the alternative fuels supplier for such purposes. (Reference Arkansas Code 26-62-203)

Liquefied Natural Gas (LNG) and Propane Tax and User Permit

LNG and liquefied petroleum gas (propane) used as motor fuel are taxed on a per vehicle basis through an annual flat fee special fuel user's permit. The fee is based on the vehicle's gross vehicle weight rating. For each vehicle fueled by LNG or propane, the vehicle owner must apply for and obtain a liquefied gas special fuel user's permit from the Arkansas Department of Finance and Administration. (Reference Arkansas Code 26-56-301 and 26-56-304)