Arizona Incentives and Laws

Last Updated July 2009

Arizona is the home of the Valley of the Sun (www.cleanairaz.org) and the Tucson Clean Cities Coalitions (www.pagnet.org/cleancities). Coordinator contact information is listed in the Points of Contact section.

State Incentives

High Occupancy Vehicle (HOV) Lane Exemption

Contingent upon approval from the federal government, qualified low-emission and energy-efficient vehicles are permitted to use HOV lanes, regardless of the number of passengers. Qualified vehicles must meet specified fuel economy requirements and are required to display the low-emission and energy-efficient vehicle license plate. However, use of HOV lanes may be restricted if certain traffic volume and speed criteria are not met. A low-emission and energy-efficient vehicle is defined as a vehicle that has been certified by the U.S. Environmental Protection Agency in accordance with U.S. Code Section 166, or that is part of a federally approved pilot program. (Reference Senate Bill 1320, 2009, and Arizona Revised Statutes 28-337 and 28-2416)

Electric Vehicle (EV) Equipment Tax Credit

A tax credit of up to $75 is available to individuals for the installation of EV charging outlets in a house constructed by a taxpayer. (Reference Arizona Revised Statutes 43-1090 and 43-1176)

Alternative Fuel Vehicle (AFV) Parking Incentive

An individual driving a vehicle powered by an alternative fuel may park without penalty in parking areas that are designated for carpool operators. (Reference Arizona Revised Statutes 28-877)

State Laws and Regulations

Biodiesel Blend Labeling Requirement

Motor fuel dispensers used to dispense biodiesel blends of up to 5% must be labeled to indicate that the fuel dispensed may contain up to 5% biodiesel. (Reference House Bill 2330, 2009, and Arizona Revised Statutes 41-2083)

Idle Reduction Weight Exemption

A heavy-duty vehicle that is equipped with qualified idle reduction technology may exceed the Arizona weight limitations specified in Arizona Revised Statutes 28-110A by up to 400 pounds or the weight of the idle reduction technology, whichever is less. (Reference Senate Bill 1320, 2009, and Arizona Revised Statutes 28-1100)

Low Emission Vehicle (LEV) Standards

The Arizona Department of Environmental Quality (ADEQ) has adopted the LEV standards as set forth in Title 13 of the California Code of Regulations including the Zero Emission Vehicle sales and greenhouse gas emissions requirements. These regulations will apply to passenger cars and light-duty trucks beginning with Model Year 2012. (Reference Arizona Administrative Code Title 18, Article 18)

Biofuels Infrastructure Grants and Specifications

The Arizona Biofuels Conversion Program distributes grants to encourage the use of biofuels in the state and to promote development of fueling infrastructure. Once the program has been funded, grants will not exceed $30,000 or 40% of conversion costs, whichever is less. Biodiesel is defined as a fuel that is produced from nonpetroleum renewable resources as defined by the U.S. Environmental Protection Agency (EPA), and meets EPA registration requirements for fuels and fuel additives established in Section 211 of the Clean Air Act. E85 is defined as a fuel ethanol gasoline blend that meets ASTM specification D5798. The Arizona Department of Weights and Measures must adopt rules to establish and enforce federal standards and ASTM test methods for biofuels and biofuel blends, and blenders of biodiesel must follow the established reporting requirements. (Reference Arizona Revised Statutes 41-1515.01, 41-2051 and 41-2083)

Clean Fuel Contracts for Heavy-Duty Equipment

Any state agency that contracts for the use of on- or off-road heavy-duty diesel equipment in Maricopa, Pima, and Pinal Counties must construct its Requests for Proposals in a manner that gives incentives to bidders that use: equipment retrofitted with diesel retrofit kits; newer clean diesel technologies and fuels; or biodiesel or other cleaner petroleum diesel alternatives. (Reference Executive Order No. 2007-03, 2007)

Joint Use of Government Fueling Infrastructure

To the extent practical, a state agency or political subdivision that operates an alternative fueling station must allow vehicles owned or operated by other state agencies or political subdivisions to fuel at the station. (Reference Arizona Revised Statutes 1-215 and 49-572)

Alternative Fuel Use and Acquisition Requirements

Local governments in defined areas of Maricopa, Pinal, and Yavapai counties with a population of more than 1.2 million people are required to develop and implement a vehicle fleet plan for the purpose of encouraging and increasing the use of alternative and clean burning fuels in vehicles owned by a city or town. At least 75% of the local government fleet must operate on alternative and clean burning fuels. The fleet plans must include the use of alternative and clean burning fuels in the bus fleet or regional public transportation authorities operated by covered locales, and all newly purchased buses must use alternative or clean burning fuel. School districts in defined areas of these counties, with an average student population of more than 3,000 students are required to ensure that 50% of the portion of the fleet with a gross vehicle weight rating of at least 17,500 pounds operate on alternative or clean burning fuels, ultra low sulfur diesel, or meet specified emissions standards. Applications for waivers are available.

At least 75% of new light-duty vehicles purchased by the state fleet must be capable of operating on alternative or clean burning fuels. For state and federal vehicles that operate primarily in counties with a population of more than 1.2 million people, at least 90% of the total state and federal fleets must operate on alternative or clean burning fuels. Pertaining to the use of an alcohol-fueled vehicle, state agencies must demonstrate that the fuel for the vehicle is available within a 10-mile radius of the primary home base of that vehicle.

Vehicle acquisition credits may be earned as follows: 1) every 450 gallons of neat biodiesel (B100) or 2,250 gallons of a diesel fuel substitute is equivalent to one vehicle acquisition; 2) every 530 gallons of E85 is equivalent to one vehicle acquisition.

(Reference Arizona Revised Statutes 1-215, 9-500.04, 15-349, 41-803, 49-412, 49-541, 49-474.01, 49-571, and 49-573)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Tax Exemption

The Arizona use tax does not apply to the following: natural gas or liquefied petroleum gas 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 in a conventional diesel fuel motor vehicle to convert the vehicle to operate on an alternative fuel. (Reference Arizona Revised Statutes 42-5159)

Alternative Fuel Vehicle (AFV) Emissions Test Requirement

All AFVs, except electric, solar, and hydrogen powered vehicles, registered in, or used to commute into, the metro areas of Phoenix or Tucson are required to complete emissions testing before the vehicle can be registered. An alternate fee may be paid for Model Year 2007 and newer original equipment manufactured AFVs instead of having the emissions test performed. New AFVs being registered for the first time are not required to be tested, but emissions testing will be required before an updated registration is granted in subsequent years. For more information, visit the Arizona Department of Environmental Quality Web site. (Reference Arizona Revised Statutes 49-542)

Alternative Fuel Vehicle (AFV) Special License Plate

AFVs must display an AFV license plate. State or agency directors who conduct activities of a confidential nature and have a vehicle powered by an alternative fuel are exempt from the requirement of displaying an AFV special license plate. The Arizona Department of Transportation has the authority to issue regular plates to AFVs that are used by law enforcement and the federal government. (Reference Arizona Revised Statutes 28-2511 and 38-538.03B)

Alternative Fuel Vehicle (AFV) License Tax

The initial annual vehicle license tax on an AFV is lower than the license tax on conventional vehicles. 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. (Reference Arizona Revised Statutes 28-5805 and 28-5801)

Electric Vehicle (EV) Parking

An individual is not allowed to stop, stand, or park a motor vehicle within any parking space specially designated for parking and recharging EVs unless the motor vehicle is an EV and has been issued an alternative fuel vehicle special plate or sticker. A person who is found responsible for a violation may be subject to a civil penalty of at least $350. (Reference Arizona Revised Statutes 28-876)

Alternative Fuel Vehicle (AFV) Dealers Information Dissemination Requirement

New motor vehicle dealers are required to make information on AFVs and Arizona-based incentives for purchasing or leasing AFVs available to the public. (Reference Arizona Revised Statutes 28-4414)

Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) Device Fee

The Arizona Department of Weights and Measures collects license fees for LPG motor fuel measuring 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)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs may not operate at speeds greater than 25 miles per hour (mph) but are allowed access to roadways with speed limits of up to 35 mph. NEVs must display a notice of the operational restrictions (either painted or otherwise permanently attached) on the vehicle in a location that is in clear view of the driver. (Reference Arizona Revised Statutes 28-966 and 28-2157)

School Bus Idle Reduction Pilot Program

As part of the Children's Environmental Health Project, the Arizona Department of Environmental Quality (ADEQ) runs the School Bus Idling Pilot Program to reduce bus idling near schools. ADEQ has worked with school districts to develop a draft bus idling policy. Key elements in the draft policy include: having drivers turn off buses upon reaching a school or other location and not turn on the engine until the vehicle is ready to depart; parking buses at least 100 feet from a school air intake system; and posting appropriate signage advising drivers to limit idling near the school.

Idle Reduction Requirement - Maricopa County

Heavy-duty diesel vehicles operating in Maricopa County with a gross vehicle weight rating of more than 14,000 pounds must limit idling time to no more than five minutes. Exemptions apply for emergency vehicles, certain traffic or weather conditions, driver accommodations, and idling necessary for refrigeration equipment. (Reference Arizona Revised Statutes 11-876 and Maricopa County Vehicle Idling Restriction Ordinance)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Arizona.

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Bill Sheaffer Executive Director	Valley of the Sun Clean Cities Coalition	Phone:(480) 314-0360 Fax:(480) 314-2457
Colleen Crowninshield Clean Cities Manager	Tucson Clean Cities Coalition	Phone:(520) 792-1093 x426 Fax:(520) 620-6981
Neil Kirschner Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-5793 Fax:
Collette Craig AFV Contact, Region 9	U.S. General Services Administration	Phone:(928) 524-3975 Fax:(928) 524-2324