A portal website bringing together vital information about natural gas and natural gas vehicles.
Arizona Policy Data
Summary
Arizona has a fairly generous offering to owners of AFVs with HOV lane exemptions and carpool parking allowances. Owners of AFVs also enjoy a reduced license tax, an exemption of the Arizona Use Tax for fuel, but are required to pass emissions testing requirements for the state. Arizona requires AFV owners to purchase and display a special license plate. Station operators providing CNG are required to pay a yearly "device fee" to the state. Arizona also has incorporated AFV requirements into its State fleet purchase and conversion programs for many of its agencies.
IFTA - IFTA taxes are applied to vehicles of 3+ axles, or weighing more than 26,000 pounds. IFTA tax tables can be found here.
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 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)
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)
Alternative Fuel Vehicle (AFV) 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, and Arizona Revised Statutes 49-542 and 49-542.05
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 Alternative Fuel Vehicle 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 October 2016). For more information, including how to apply, see the ADOT Energy Efficient Plate Program website, and Arizona Revised Statutes 28-337, 28-2416
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 RevisedStatutes 42-5159)
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 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)
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 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
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)
Authorizes counties to impose tax of no more than 3 percent on motor fuels. Under AZ law motor fuel tax is imposed through a use tax and alternative fuels are currently expressly exempted from this tax. The change specifically would allow counties to impose the 3 percent tax on natural gas and propane and presumably on other alternative fuels because there is no express exemption. Reference - SB1012 Bill History, Reference - SB1012 Bill Text Status: Referred to Senate FIN Committee
2015 Session - Proposed Legislation
SB-1012
Authorizes counties to impose tax of no more than 3 percent on motor fuels. Under AZ law motor fuel tax is imposed through a use tax and alternative fuels are currently expressly exempted from this tax. The change specifically would allow counties to impose the 3 percent tax on natural gas and propane and presumably on other alternative fuels because there is no express exemption. Reference - SB1012 Bill History, Reference - SB1012 Bill Text Status: Passed on April 1 2015 - 100% progression
SB-1160
Authorizes local jurisdictions to impose use tax on motor fuels. However, exemption for AF would continue to apply. Reference - SB1160 Bill History, Reference - SB1160 Bill Text Status: Introduced on January 26 2015 - 25% progression, died in committee
2014 Session - Proposed Legislation
HB-2580
Amends the emission inspection requirements for OEM alternative fuel vehicles and converted vehicles by retaining the initial test prior to registration but moves the test currently due in the fourth year to the sixth year. Reference - HB2580 Bill History, Reference - HB2580 Bill Text Enacted 4/17/2014
2013 Session - Proposed Legislation
HB-2590
Would repeal current exemption from sales and use tax provided to alternative fuel conversion equipment installed on diesel fueled vehicles. Effective date appears to be 12/31/2016. Reference - HB2590 Bill History, Reference - HB2590 Bill Text Introduced on February 12 2013 - 25% progress, died in committee
This state was last examined and updated in December, 2016.