The list below contains summaries of all Arizona incentives and laws related to Propane (LPG).
Dedicated AFVs are permitted to use HOV lanes, regardless of the number of passengers. Qualified vehicles must display AFV special plates or stickers, which are available from the Arizona Department of Transportation Motor Vehicle Division. Recognized alternative fuels are propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. HOV lane use may become restricted if certain speed criteria are met. (Reference Arizona Revised Statutes 28-337 and 28-2416)
An individual driving an AFV may park without penalty in parking areas that are designated for carpool operators provided the vehicle is using alternative fuel. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-877)
The initial annual vehicle license tax on an AFV is lower than the license tax on a conventional vehicle. The vehicle license tax on an AFV is $4 for every $100 in assessed value. The assessed value of the AFV is determined as follows: during the first year after initial registration, the value of the AFV is 1% of the manufacturer's base retail price (as compared to 60% for conventional vehicles); during each succeeding year, the value of the AFV is reduced by 15%. The minimum amount of the license tax is $5 per year for each motor vehicle subject to the tax. Recognized alternative fuels include propane) natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-5805 and 28-5801)
The Arizona use tax does not apply to the following: natural gas or liquefied petroleum gas (propane) used to propel a motor vehicle; AFVs, if the AFV was manufactured as a diesel fuel vehicle and converted to operate on an alternative fuel; and equipment that is installed on a conventional diesel fuel motor vehicle to convert the vehicle to operate on an alternative fuel. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 42-5159)
A registered AFV must display an AFV license plate. State or agency directors who conduct activities of a confidential nature and use AFVs are exempt from the requirement to display an AFV special license plate. The Arizona Department of Transportation has the authority to issue regular plates to AFVs law enforcement agencies and the federal government uses. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-2511 and 38-538.03B)
All AFVs, except electric and hydrogen powered vehicles, registered in, or used to commute into, the metro areas of Phoenix or Tucson must complete emissions testing before the vehicle can be registered. Alternatively, a fee may be paid for Model Year 2009 and newer original equipment manufacturer AFVs instead of the tests. The testing requirement does not apply to new AFVs being registered for the first time, but emissions testing will be required before an updated registration is granted in subsequent years. Recognized alternative fuels include propane and natural gas. For more information, visit the Arizona Department of Environmental Quality website. (Reference Arizona Revised Statutes 49-542 and 49-542.05)
To the extent practical, a state agency or political subdivision that operates an alternative fueling station must allow vehicles other state agencies or political subdivisions own or operate to fuel at the station. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 49-572)
State agencies, boards, and commissions must purchase hybrid electric vehicles (HEVs), alternative fuel vehicles (AFVs), or vehicles that meet greenhouse gas emissions standards; or use alternative fuels; with the goal that all state vehicles be HEVs, meet low emissions standards, or be AFVs by January 2012. At least 75% of light-duty state fleet vehicles operating in counties with a population of more than 250,000 people must be capable of operating on alternative fuels. If the AFVs operate in counties with populations of more than 1.2 million people, those vehicles must meet U.S. Environmental Protection Agency emissions standards for Low Emission Vehicles. Alternatively, the state fleet may meet AFV acquisition requirements through biodiesel or alternative fuel use or apply for waivers. For the purpose of these requirements, alternative fuels include propane, natural gas, electricity, hydrogen, qualified diesel fuel substitutes, E85, and a blend of hydrogen with propane or natural gas. (Reference Executive Order 2010-14, 2010, and Arizona Revised Statutes 41-803)
Local governments in defined areas of Maricopa, Pinal, and Yavapai counties that have a population of more than 1.2 million people must develop and implement vehicle fleet plans for the purpose of encouraging and increasing the use of alternative fuels in vehicles the city or town owns. At least 75% of the total local government fleet must operate on alternative fuels. Alternatively, local government fleets may meet AFV acquisition requirements through biodiesel or alternative fuel use or apply for waivers. Any local governments that purchase buses for use in counties with populations of more than 500,000 people must purchase or convert buses to operate on alternative fuels. For the purpose of these requirements, alternative fuels include propane, natural gas, electricity, hydrogen, qualified diesel fuel substitutes, E85, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 9-500.04, 49-474.01, 49-541, and 49-571)
A taxing jurisdiction may not levy a tax or fee, however denominated, on natural gas or propane used to propel a motor vehicle. (Reference Arizona Revised Statutes 42-6004)
Within defined areas of Maricopa, Pinal, and Yavapai counties, school districts with an average student population of more than 3,000 students must ensure that 50% of the portion of the fleet with a gross vehicle weight rating of at least 17,500 pounds per vehicle operates on alternative fuels, ultra low sulfur diesel, or meets specified emissions standards. Alternatively, school districts may meet acquisition requirements through alternative fuel use. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, qualified diesel fuel substitutes, E85, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 15-349 and 49-541)
Federal fleets based in Arizona that operate primarily in counties with a population of more than 1.2 million people must be comprised of at least 90% alternative fuel vehicles. Alternatively, federal fleets may meet acquisition requirements through alternative fuel use or apply for waivers. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, qualified diesel fuel substitutes, E85, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 49-573)
New motor vehicle dealers must make information about AFVs and Arizona-based incentives for purchasing or leasing AFVs available to the public. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-4414)
The Arizona Department of Weights and Measures collects license fees for certain propane and CNG fueling devices used for commercial purposes. A penalty equal to 20% of the fee may be imposed for late license fee payments. (Reference Arizona Revised Statutes 41-2092)