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) and Energy Efficient Plate Programs

Dedicated AFVs qualify for an AFV special license plate, which are available from the Arizona Department of Transportation (ADOT). Recognized alternative fuels are propane, natural gas, electricity, and hydrogen. There is no limit to the number of AFV license plates ADOT can issue. For more information, see the ADOT AFV website.

In addition, certain plug-in hybrid electric vehicles are eligible for the Energy Efficient license plate from ADOT. At any time, only 10,000 eligible vehicles may be registered for the Energy Efficient license plate. ADOT has reached its maximum limit of 10,000 vehicles and the issuance of Energy Efficient license plates to new program participants has been suspended until further notice (verified June 2018). For more information, including how to apply, see the ADOT Energy Efficient Plate Program website.

(Reference Arizona Revised Statutes 28-2416 and 28-2416.01)

High Occupancy Vehicle (HOV) Lane Exemption

Vehicles with an Alternative Fuel Vehicle (AFV) or Energy Efficient license plate are permitted to use HOV lanes, regardless of the number of passengers. Qualified vehicles must display the required license plate, which are available from the Arizona Department of Transportation (ADOT). 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. For more information, see the ADOT AFV and the Energy Efficient Plate Program websites. (Reference Arizona Revised Statutes 28-2416, and 23-2416.01)

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 vehicle license tax for an AFV 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 suggested retail price (MSRP) 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.

Beginning January 1, 2020, the vehicle license tax for a previously registered AFV will be a percentage of the MSRP set by Arizona Department of Transportation (ADOT). For each succeeding year, the original value of the AFV is reduced by 15%. The vehicle license tax for an AFV that is less than 10,000 pounds gross weight this is purchased on or after January 1, 2020, will be 30% of the MSRP. For each succeeding year, the original value of the AFV is reduced by 15%.

For more information, see the ADOT AFV website.

(Reference House Bill2166, 2018, and Arizona Revised Statutes 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 and Natural Gas Vehicle (NGV) 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 (lbs.) to accommodate the weight of the idle reduction technology. To qualify for the exemption, the vehicle operator must also be able to prove the weight of the idle reduction technology and demonstrate that the technology is fully functional. Any NGV may exceed the limits by up to 2,000 lbs. (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 - 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

Workplace Electric Vehicle Supply Equipment (EVSE) Rebate - Salt River Project (SRP)

SRP offers a rebate to business customers who purchase and install Level 2 EVSE for use by their employees. The rebate is $500 per Level 2 EVSE charging port installed, limited to 12 per business. Rebates are available on a first-come, first-served basis. For more information, including eligibility requirements and how to receive the rebate, see the SRP Rebates website.

Plug-In Electric Vehicle (PEV) Charging Rate Incentive - Tucson Electric Power (TEP)

TEP offers a discounted residential service time-of-use (TOU) rate during off-peak periods to customers who own and operate a PEV. The discount is a 5% reduction to applicable charges during the off-peak period. Eligible customers must provide documentation for a highway-approved PEV and submit a copy of the PEV's registration annually. For more information, including the application, see the TEP TOU website.

Laws and Regulations

Regional Electric Vehicle (REV) West Plan

Arizona joined Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming (Signatory States) in signing the REV West memorandum of understanding (MOU) to create an Intermountain West Electric Vehicle (EV) Corridor that will make it possible to seamlessly drive an EV across the Signatory States' major transportation corridors. Signatory States are committed to:

  • Create best practices and procedures that will enhance EV adoption by: promoting EV consumer acceptance and awareness by addressing range anxiety, coordinating on EV charging station locations, and leveraging economies of scale;
  • Create minimum standards for EV charging stations, including standards for administration, interoperability, operations, and management;
  • Identify and develop opportunities to incorporate EV charging stations into planning and development processes such as building codes, metering policies, and renewable energy generation projects;
  • Encourage EV manufacturers to stock and market a wide variety of EVs within the Signatory States; and
  • Identify, respond to, and collaborate on funding opportunities to support the development of the Plan.
The Signatory States have formed a Coordination Group composed of senior leadership from each state which will meet on a quarterly basis and report on the above actions.

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 28-2416 and 28-2511)

Autonomous Vehicle (AV) Council

The governor established the Institute of Automated Mobility (IAM) to bring together public and private partners to advance AV technology. The IAM provides facilities to test AV technology and develop safety and security policies and guidelines. The IAM will research and develop consistent AV guidelines , as well as recommend infrastructure requirements. State agencies will coordinate with IAM to develop a report of public policy recommendations to update and modernize Arizona laws for connected and AV technologies. (Reference Executive Order 2018-09, 2018)

Autonomous Vehicle (AV) Safe Testing Regulations

Arizona state agencies must support the testing and operation of AVs on public roads. Testing and operation of AVs must follow all applicable federal and state traffic and motor vehicle safety, insurance, accident reporting, titling, and registration laws and regulations. The Arizona Department of Transportation (ADOT) may implement additional rules necessary to support AVs. Arizona formed the Self-Driving Vehicle Oversight Committee to advise ADOT and facilitate the advancement of AV technology.

Permission to test or operate AVs on public roads will be suspended or revoked if any applicable laws and regulations are violated. To test or operate AVs without a person present in the vehicle, an applicant must submit a written statement to ADOT stating that the vehicle meets all applicable requirements. If the vehicle's automated driving system fails, the vehicle must be brought to a complete stop or safe state. The Arizona Department of Public Safety and law enforcement agencies will develop protocols on how first responders should interact with a fully autonomous vehicle in emergency and traffic enforcement situations.

(Reference Executive Order 2018-04, 2018, and Executive Order 2015-09, 2015)

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 ASTM specification D6751 and 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 3-3401 and 3-3433 and Arizona Administrative Code R3-7-718)

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. 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 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)

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 3-3452)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs may not operate at speeds greater than 25 miles per hour (mph). An NEV may not operate on a roadway with a speed limit greater than 35 mph, except to cross that roadway. 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.