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:
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 1-215 and 28-877)
High Occupancy Vehicle (HOV) Lane Exemption
The Arizona Department of Transportation (ADOT) allows qualified alternative fuel vehicles (AFV) with an AFV license plate to use HOV lanes, regardless of the number of occupants. Qualified AFVs are defined as vehicles powered exclusively by electricity, propane, natural gas, hydrogen, or a blend of hydrogen with propane or natural gas. Qualified AFVs must not be capable of operating on any other fuel type. This exemption expires September 20, 2025. For more information about vehicle eligibility and HOV access, visit the ADOT AFV website. (Reference Arizona Revised Statutes 1-215 and 28-2416)
Reduced Alternative Fuel Vehicle (AFV) License Tax
The vehicle license tax for an AFV registered in Arizona is $4 for every $100 in assessed value. The minimum amount of the annual AFV license tax is $5. AFV assessed values are determined as follows:
- AFVs registered prior to January 1, 2022: 1% of the manufacturer’s suggested retail price (MSRP)
- AFVs initially registered between January 1, 2022 and December 31, 2022: 20% of the MSRP.
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. For more information, see the ADOT AFV website. The reduced alternative fuel vehicle license tax does not apply to any vehicle purchased on or after December 31, 2022.
(Reference Arizona Revised Statutes 1-215, 28-5801, 28-5805)
Alternative Fuel and Alternative Fuel Vehicle (AFV) Use Tax Exemption
Arizona use taxes do not apply to natural gas or propane used in an AFV, AFVs converted to operate on alternative fuels, or the equipment used to convert a diesel vehicle to an AFV. 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 Alternative Fuel Vehicle 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 550 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 vehicles fueled by natural gas, electricity, or hydrogen may exceed the limits by up to 2,000 lbs. (Reference Senate Bill1291, 2021 and Arizona Revised Statutes 28-1100)
Alternative Fuel Vehicle (AFV) Emissions Test Exemption
Qualified AFVs 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, excluding electric, solar, and hydrogen 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)
Electric Vehicle Supply Equipment (EVSE) Pilot Program - Arizona Public Service Company (APS)
APS offers free EVSE, installation, maintenance, and educational services to its workplace, fleet, and multi-unit dwelling customers through the Take Charge AZ pilot program. For more information, including eligibility, see the Reference Take Charge AZ website.
Plug-In Electric Vehicle (PEV) Rebate - Salt River Project (SRP)
SRP offers residential customers a $1,000 rebate for the purchase or lease of a PEV. For more information, including how to apply, see the SRP Drive Electric website.
Plug-in Electric Vehicle (PEV) Time-Of-Use (TOU) Rate - Salt River Project (SRP)
SRP offers a TOU rate for residential customers that own or lease a PEV. The TOU rate applies to daily super off-peak hours and additional off-peak hours on weekends, holidays, and some weekday hours. Eligible customers must be able to separately meter EV charger usage. For more information, including how to enroll, see the SRP Electric Vehicle Price Plan website.
Electric Vehicle Supply Equipment (EVSE) Rebate - Salt River Project (SRP)
SRP offers a rebate of $1,500 per port for commercial, workplace, and multifamily customers who install networked Level 2 EVSE. EVSE must be installed between May 1, 2021, and April 30, 2022. To receive a rebate, customers must apply on or before July 31, 2022. Applicants may receive a maximum of 50 rebates per program year. Funds will be awarded on a first-come, first-served basis. For more information, including how to apply, see the SRP Business EV Charger Rebate website.
Commercial Electrification Rebates - Salt River Project (SRP)
SRP offers commercial customers rebates for the purchase or lease of electric forklifts, electric truck refrigeration units (TRUs) charging infrastructure, truck charging bays, electric vehicle supply equipment (EVSE), and custom electrification projects. Equipment must be installed between May 1, 2021 and April 30, 2022. Rebate amounts for each technology type are as follows:
|Class 1 or 2 Electric Forklift||Up to $2,000 per forklift|
|Electric Forklift Charger||$150 per charger|
|Electric TRU Charger||$1,000 per plug|
|Truck Stop and Truck Fleet Charging Bay||$1,000 per bay|
|Level 2 EVSE||$1,500 per port; up to 50 ports|
|Custom Electrification Project||$0.10 per annual kilowatt-hour load added by each piece of medium- or heavy-duty equipment|
Applicants may receive up $50,000 in rebates through the Business Solutions Electric Technology Program. For more information, including eligibility requirements, visit the Electrification Rebates website.
Commercial Electrification Assessment Incentives - Salt River Project (SRP)
SRP offers funding to trained vendors who study electrification opportunities for commercial non-road equipment through the Electric Qualified Service Provider Assessment (eQSP) Program and on-road electrification opportunities for fleets under the Fleet Advisory Services (FAS) Program. Maximum funding amounts for each study through the eQSP and FAS Program are $10,000 and $20,000, respectively. For more information, including eligibility requirements, visit the Electrification Rebates website.
Electric Vehicle Supply Equipment (EVSE) Rebate - Tucson Electric Power (TEP)
TEP provides a rebate to residential customers that covers up to 75% of the cost of EVSE installation. The maximum rebate awards are $500 for a two-way charger and $250 for a one-way charger. For more information, including how to apply, see the TEP Electric Vehicle Rebates website.
Plug-In Electric Vehicle (PEV) Charging Rates - Tuscon Electric Power (TEP)
TEP offers three time-of-use (TOU) rates for residential customers with PEVs. For more information, see the TEP Rates for EV Owners website.
Commercial Electric Vehicle Supply Equipment (EVSE) Rebate – Tucson Electric Power (TEP)
TEP offers rebates and technical support to businesses, multi-family dwellings, and non-profit customers that purchase and install between two to five EVSE ports. TEP will evaluate the electrical capacity and supporting EVSE infrastructure at locations that install six or more ports on a case-by-case basis. Higher rebates are available for commercial customers located in lower-income areas. Low-income areas are defined as U.S. Census tracts where the average household income does not exceed 80% of the median Arizona household income. Rebates are available in the following amounts:
|EVSE Type||Location||Rebate||Low-Income Area Rebate|
|Level 2||Workplace||$4,500 per port; up to 75% of project cost||$6,000 per port; up to 75% of project cost|
|Level 2||Multi-Family Dwelling or Non-profit Organization||$6,000 per port; up to 85% of project cost||$9,000 per port; up to 85% of project cost|
|Direct Current (DC) Fast Charger||All||$24,000 per port; up to 75% of project cost||$40,000 per port; up to 75% of project cost|
For more information, including project eligibility and how to apply, see the TEP Smart Electric Vehicle Charging Program 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.In 2019, the Signatory States signed a revised REV West MOU to update their EV corridor goals based on progress to date. Signatory States are committed to:
- Educate consumers and fleet owners to raise EV awareness, reduce range anxiety, and increase EV adoption;
- Coordinate on EV charging station locations to achieve a consistent user experience across Signatory States;
- Use and promote the REV West Voluntary Minimum Standards for EV charging stations and explore opportunities for implementing the standards in Signatory States;
- 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;
- Identify, respond to, and collaborate on funding opportunities to support the development of the plan; and
- Support the build-out of direct current (DC) fast charging stations along EV corridors through investments, partnerships, and other mechanisms.
Alternative Fuel Vehicle (AFV) Special License Plate
The Arizona Department of Transportation (ADOT) must issue a special license plate to dedicated AFVs. Dedicated AFVs are defined as vehicles powered exclusively by propane, compressed natural gas, electricity, or hydrogen. AFVs must not be capable of operating on any other fuel type. There is no limit to the number of AFV license plates ADOT can issue. The Arizona Department of Environmental Quality (ADEQ) must inspect vehicles converted to operate solely on alternative fuel and issue an Alternative Fuel Certificate before converted vehicles may receive the AFV special 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. For more information, see the ADOT Specialty Plates and ADEQ Vehicle Emissions Testing website.(Reference Arizona Revised Statutes 1-215 and 28-2416)
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 and 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. For more information, see the IAM website. (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)
Autonomous Vehicle (AV) Operation Requirements
An AV may be operated without a driver physically present in the vehicle if a law enforcement interaction plan is submitted to the Arizona Department of Transportation (ADOT) and the Department of Public Safety. Additionally, a written statement must be submitted to ADOT acknowledging the AV meets the following requirements:
- It is in compliance with applicable federal laws and federal motor vehicle safety standards;
- It can achieve a minimal risk condition if the vehicle is unable to perform an intended task or exists its operational design domain;
- It is in compliance with applicable state traffic and motor safety laws;
- It meets all applicable certificate of title, registration, licensing, and insurance requirements.
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. Violators may be subject to a civil penalty of at least $350. (Reference Arizona Revised Statutes 28-876)
Electric Vehicle (EV) Definition and Implementation Plan
The Arizona Corporation Commission (Commission) defines EVs as transportation vehicles that use electricity for propulsion. The Commission issued an EV policy statement that provides guidelines on EVs, charging infrastructure, and transportation electrification to utilities the Commission regulates. The policy addresses the state of EVs in Arizona, EV benefits, and barriers to adoption. This policy purposefully does not define the Commission’s role with respect to electric vehicle charging infrastructure operated by non-utilities at this time, but will explore it in the future. For more information, see the Commission’s EV policy statement and the Corporation Commission website. (Reference Docket RU-00000A-18-0284 decision number 77044)
Biofuels Definitions and Specifications
Biodiesel is defined as 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 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, alternative fuel vehicles (AFVs), or vehicles that meet set greenhouse gas emissions standards. 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 (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. The Program's best practices 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.