Arizona Laws and Incentives

Listed below are the summaries of all current Arizona laws, incentives, 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

Alternative Fuel Vehicle (AFV) High Occupancy Vehicle (HOV) Lane Exemption

Dedicated AFVs are permitted to use HOV lanes, regardless of the number of passengers. Qualified vehicles must display an AFV special plate or the Clean Air - Blue Skies Energy Efficient license plate, which are available from the Arizona Department of Transportation (ADOT). Recognized alternative fuels are propane, natural gas, electricity, and hydrogen. Only certain plug-in hybrid electric vehicles are eligible for the Energy Efficient license plate. Vehicles registered with Energy Efficient plates prior to May 20, 2014, may continue to use HOV lanes until the owner sells or transfers the vehicle. At any time, only 1,800 eligible vehicles may be registered for the Energy Efficient license plate. ADOT has reached its maximum limit of 10,000 vehicles and the program has been suspended until further notice (verified April 2016). For more information, see the ADOT Energy Efficient Plate Program website. (Reference Arizona Revised Statutes 28-337 and 28-2416)

Residential Electric Vehicle Supply Equipment (EVSE) Tax Credit

A tax credit of up to $75 is available to individuals for the installation of EVSE in a house or housing unit that they have built. To qualify, the outlet must meet certain codes and standards. To apply, see form 319 on the Arizona Department of Revenue's Credit Forms page. (Reference Arizona Revised Statutes 43-1090 and 43-1176)

Alternative Fuel Vehicle (AFV) Parking Incentive

An individual driving a dedicated 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)

Reduced Alternative Fuel Vehicle (AFV) License Tax

The AFV license tax is $4 for every $100 in assessed value. During the first year after initial registration, the AFV's assessed value is 1% of the manufacturer's base retail price (compared to 60% for conventional vehicles). For each succeeding year, the original value of the AFV is reduced by 15%. The minimum amount of the annual AFV license tax is $5. For the purpose of this tax, AFVs include those powered exclusively by propane, natural gas, electricity, hydrogen, or a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-5805 and 28-5801)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Use Tax Exemption

The following are exempt from the Arizona use tax: 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)

Idle Reduction Weight Exemption

A heavy-duty vehicle that is equipped with qualified idle reduction technology may exceed the state's gross, total axle, or bridge formula vehicle weight limits by up to 400 pounds to accommodate the weight of the idle reduction technology. (Reference Arizona Revised Statutes 28-1100)

Alternative Fuel Vehicle Emissions Test Exemption

All-electric vehicles, hydrogen powered vehicles, and current model year propane and natural gas vehicles (NGVs) registered for the first time in Arizona are not required to complete emissions testing. This exemption does not apply after the first registration year. All AFVs, with the exception of electric, solar, and hydrogen powered vehicles, used to commute into Phoenix or Tucson are required to be emissions tested before they are registered. For more information, visit the Arizona Department of Environmental Quality website. (Reference Arizona Revised Statutes 49-542 and 49-542.05)

Utility/Private Incentives

Plug-in Electric Vehicle (PEV) Charging Rate Incentive - The Salt River Project (SRP)

SRP offers an experimental time-of-use (TOU) electricity rate for the first 10,000 customers with a qualified PEV. The TOU rate is for the super off-peak hours between 11pm and 5am daily. Participation is subject to certain equipment availability and other restrictions. For more information, see the SRP Electric Vehicle Price Plan website.

Point of Contact
Kathy Knoop
Principal Environmental Scientist
The Salt River Project
Phone: (602) 236-5653
kathy.knoop@srpnet.com
https://www.srpnet.com/default.aspx

Laws and Regulations

Alternative Fuel Vehicle (AFV) Special License Plate

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 used by law enforcement agencies and the federal government. 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)

Electric Vehicle (EV) Parking Space Regulation

An individual is not allowed to stop, stand, or park a motor vehicle within any parking space specifically designated for parking and charging 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)

Biofuels Definitions and Specifications

Biodiesel is a fuel that is produced from nonpetroleum renewable resources and meets the U.S. Environmental Protection Agency registration requirements for fuels and fuel additives established in Section 211 of the Clean Air Act. E85 is defined as a blend of fuel ethanol and gasoline 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 41-2051 and 41-2083; and Arizona Administrative Code R20-2-718)

Clean Fuel Contracts for Heavy-Duty Equipment

As part of the proposal process, any state agency that contracts for the use of on- or off-road heavy-duty diesel equipment in Maricopa, Pima, and Pinal Counties must provide 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 2007-03, 2007)

Joint Use of Government Fueling Infrastructure

To the extent practical, an Arizona 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. For the purpose of this requirement, 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 Vehicle Acquisition and Fuel Use Requirements

Arizona state agencies, boards, and commissions must purchase hybrid electric vehicles (HEVs), alternative fuel vehicles (AFVs), or vehicles that meet set 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)

Municipal Alternative Fuel Vehicle (AFV) Acquisition Requirements

Local governments in Maricopa, Pinal, and Yavapai counties with a population of more than 1.2 million people must develop and implement vehicle fleet plans to encourage and increase the use of alternative fuels in municipal fleets. At least 75% of the total municipal fleet must operate on alternative fuels. Alternatively, municipal fleets may meet AFV acquisition requirements through biodiesel or other alternative fuel use or apply for waivers. Local governments in counties with populations of more than 500,000 people with bus fleets 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)

Municipal Alternative Fuel Tax Regulation

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)

School District Alternative Fuel Vehicle Acquisition Requirements

Within 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 or meets specified emissions standards. Alternatively, school districts may meet acquisition requirements through alternative fuel use. 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 15-349 and 49-541)

Federal Fleet Operation Regulations

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. 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 49-573)

Alternative Fuel Vehicle (AFV) Dealer Information Dissemination Requirement

New motor vehicle dealers must make information about AFVs and Arizona-based incentives for purchasing or leasing AFVs available to the public. For the purpose of these requirements, alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 28-4414)

Propane and Compressed Natural Gas (CNG) Device Fee

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)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs may not operate at speeds greater than 25 miles per hour (mph) and are only allowed access to roadways with speed limits 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) administers 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, which many of the school districts involved in the pilot program have implemented. 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. For more information, refer to the School Bus Idling Pilot Program website.