Arizona State Flag

Arizona Natural Gas Laws and Incentives


State Incentives

High Occupancy Vehicle (HOV) Lane Exemption

Dedicated alternative fuel vehicles (AFVs) displaying the required AFV license plate are allowed to use HOV lanes, regardless of the number of passengers, through the Energy Efficient Pilot Program. An $8 special plate administration fee applies, and a limited number of Honda Insights, Honda Civic HEVs, and Toyota Prius HEVs are eligible for HOV lane access. Qualified HEVs must display the required energy efficient license plate affixed with an HEV decal. (Reference Arizona Revised Statutes 28-2416 and 28-737B, and Executive Order No. 2007-03, 2007)

State Laws and Regulations

Joint Use of Government Refueling Infrastructure

To the extent practicable, a state agency or political subdivision that operates an alternative fueling station must permit the fueling of vehicles owned or operated by other state agencies or political subdivisions 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, Yavapai, and Pima counties with a population of more than 1,200,000 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 Phoenix or metro Tucson areas are required to have emissions testing before the vehicle can be registered. An alternate fee may be paid for Model Year 2005 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)

Alternative Fuel Vehicle (AFV) Parking

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)

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)