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
Biofuel Infrastructure Grants
The Arizona Biofuel Conversion Program distributes grants to encourage the use of biofuels in the state and to promote the development of fueling infrastructure. Up to $75,000 is available to public and private entities for the incremental cost of projects that result in new or converted biofuel storage and dispensing equipment. Applicants must complete projects within six months of the grant award date. Biofuel is a biomass-derived fuel used directly as a motor fuel. The program ends July 1, 2015. (Reference Arizona Revised Statutes 41-1515.01)
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 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)
Plug-In Electric Vehicle (PEV) Charging Equipment Tax Credit
A tax credit of up to $75 is available to individuals for the installation of a PEV charging outlet in a house or housing unit that they have built. To qualify, the outlet must meet certain codes and standards. (Reference Arizona Revised Statutes 43-1090 and 43-1176)
Alternative Fuel Vehicle (AFV) Parking Incentive
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)
Reduced Alternative Fuel Vehicle (AFV) License Tax
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)
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 (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 Arizona weight limitations specified in Arizona Revised Statutes 28-1100A by up to 400 pounds to accommodate the weight of the idle reduction technology. (Reference Arizona Revised Statutes 28-1100)
Utility/Private Incentives
Plug-In Electric Vehicle (PEV) Charging Discount - GWP
Glendale Water and Power (GWP) offers an electricity bill discount of $0.33 per day to residential and commercial customers who own qualified PEVs. To be eligible, customers must submit a copy of their PEV registration and install a second sub-meter. GWP provides the second meter and socket at no charge. For more information, see GWP's Electric Vehicle Charging Information
Plug-In Electric Vehicle (PEV) Charging Rate - APS
The Arizona Public Service Company (APS) offers an electricity rate option to residential customers who own a qualified PEV. To be eligible, customers must have an Advanced Metering Infrastructure meter in place. Additional restrictions apply. The rate will be available through December 31, 2014. For more information, see the APS Electric Vehicle Rate Impact website.
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)
Alternative Fuel Vehicle (AFV) Emissions Test Requirement
All AFVs, except electric and hydrogen powered vehicles, registered in, or used to commute into, the metropolitan 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)
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)
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 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. 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 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 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 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)
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 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 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. 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)
Alternative Fuel Vehicle (AFV) Dealers 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. 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)
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 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) 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.