HB2400 • 2026

motor fuel tax holiday

HB2400 - motor fuel tax holiday

Energy Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Julie Willoughby, Leo Biasiucci
Last action: 2026-03-09
Official status: Senate second read
Effective date: Not listed

Plain English Breakdown

The official status indicates the bill passed both chambers and reached final enrollment, but no specific effective date or year for implementation is listed in the provided metadata.

HB2400: Motor Fuel Tax Holiday

This bill removes state motor fuel taxes for purchases made between May 1 and September 30 in specific Arizona areas.

What This Bill Does

Removes the eighteen-cent-per-gallon tax on motor vehicle fuel from May 1 through September 30 each year.
Applies this tax removal only to Area A and Area C as defined by state law.
Requires vendors not to add any amount for the removed tax to the price of fuel during these months.
Mandates that suppliers return any amounts collected in error as motor vehicle fuel tax to the department.
Keeps all reporting requirements active for fuel suppliers throughout the year.

Who It Names or Affects

Consumers who buy, possess, use, or consume motor vehicle fuel in Area A and Area C during summer months.
Vendors selling motor vehicle fuel in designated areas between May 1 and September 30.
Suppliers of motor vehicle fuel who must continue to file reports with the state.

Terms To Know

Area A: A specific geographic region defined in section 49-541 of Arizona law.
Area C: The portion of Pinal County west of range 11 east, excluding the part that is inside Area A, as defined in section 3-3401.
Motor vehicle fuel tax: A charge of eighteen cents per gallon imposed on motor vehicle fuel possessed, used, or consumed in Arizona.

Limits and Unknowns

The bill text does not specify an effective date for when this holiday begins.
This law only removes taxes in Area A and Area C; other parts of Arizona remain subject to the tax during these months.
Vendors must still report fuel sales even though they cannot collect the tax during the specified period.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HOUSE - Natural Resources, Energy & Water (Adopted)

Adopted

Plain English: Adopted 1

The official amendment file could not be read automatically during the last sync, so only the official amendment metadata is shown right now.

HOUSE - Natural Resources, Energy & Water (Proposed)

Proposed

Plain English: This amendment creates a temporary tax break on motor fuel for specific areas in Arizona from May through September each year.

It stops the state from charging an 18-cent-per-gallon tax on gas bought or used between May 1 and September 30 every year.
This tax holiday only applies to vehicles located in Area A (defined by section 49-541) or Area C (defined by section 3-3401).
Gas stations are not allowed to add the fuel tax cost back into the price of gas during this time period.
If a seller accidentally collects the tax, they must send that money to the state department instead of keeping it.

The text does not explain exactly which cities or counties are included in 'Area A' and 'Area C', only citing other law sections.
The amendment cuts off before finishing Section 3, so any changes to how transportation projects get chosen cannot be fully explained.

SENATE - Regulatory Affairs and Government Efficiency (Proposed)

Proposed

Plain English: This amendment requires Arizona officials to ask the federal government for a temporary break from strict fuel rules, blaming California's policies and refinery closures for causing fuel shortages.

State leaders must submit a request within 30 days of this law taking effect asking the U.S. Environmental Protection Agency (EPA) for a 20-day waiver on specific fuel formulas in Area A and Area C.
The request to the EPA must state that extreme fuel supply problems are caused only by California's energy policies and refinery closures, not any other reasons.
If the federal government approves this break from rules, Arizona will also pause its own matching fuel requirements for all regulated companies equally.
Officials can ask the EPA to extend this 20-day waiver if the supply problems continue before the first period ends.

The amendment only asks for a federal waiver; it does not guarantee that the U.S. Environmental Protection Agency will approve the request.
The text defines 'Area A' and 'Area C' by referring to other state laws, so this summary cannot list exactly which cities or counties are included without checking those separate statutes.

SENATE - Regulatory Affairs and Government Efficiency - Strike Everything (Proposed)

Proposed

Plain English: This amendment requires Arizona officials to ask the federal government for a temporary break from strict fuel rules because of supply problems caused by California's policies and refinery closures.

State leaders must submit a request within 30 days asking the U.S. Environmental Protection Agency (EPA) to waive specific fuel standards for Area A and Area C in Arizona.
The waiver request asks for a 20-day break from rules, citing extreme supply issues caused specifically by California's energy policies and refinery closures.
If the EPA approves this federal waiver, state officials must also pause matching Arizona laws regarding fuel requirements during that same period.
Officials can ask to extend the waiver for another 20 days if the fuel shortage problems continue before the first break ends.

The amendment only takes effect if the U.S. EPA actually grants the requested federal waiver; it does not automatically change state laws on its own.
The text refers to specific legal definitions for 'Area A' and 'Area C' found in other Arizona statutes, which are not explained in this document.

Bill History

2026-03-09 Senate
Senate second read
2026-03-05 Senate
Senate Rules: None
2026-03-05 Senate
Senate Regulatory Affairs and Government Efficiency: HELD
2026-03-05 Senate
Senate Natural Resources: W/D
2026-03-05 Senate
Senate first read
2026-02-24 Senate
Transmitted to Senate
2026-02-24 House
House third read passed
2026-02-23 House
House committee of the whole
2026-02-10 House
House minority caucus
2026-02-10 House
House majority caucus
2026-01-26 House
House second read
2026-01-22 House
House Rules: C&P
2026-01-22 House
House Natural Resources, Energy & Water: DPA
2026-01-22 House
House first read

Official Summary Text

HB2400 - 572R - Senate Fact Sheet

A
RIZONA
S
TATE
S
ENATE

SAWYER BESSLER

LEGISLATIVE RESEARCH ANALYST

NATURAL RESOURCES
COMMITTEE

Telephone: (602) 926-3171

RESEARCH
STAFF

TO:����������������� MEMBERS
OF THE SENATE

�����������������������
NATURAL RESOURCES COMMITTEE

DATE:����������� March
23, 2026

SUBJECT:�����
Strike
everything amendment to
H.B. 2400
, relating to emergency fuel
waiver; petition; requirement

Purpose

����������� An
emergency measure that requires the Director of the Arizona Department of
Environmental Quality (ADEQ) to collaborate with the Associate Director of the
Weights and Measures Services Division of the Arizona Department of Agriculture
(Associate Director) to submit a fuel formulation waiver request for Area A and
Area C for a 20-day waiver period to the U.S. Environmental Protection Agency
(EPA).

Background

Fuel sold in Arizona must meet minimum standards prescribed by statute
and by Arizona Department of Agriculture Weights and Measures Division
(Division) rule. All gasoline produced and shipped to or within Arizona and all
gasoline sold or offered for sale for use in motor vehicles in a county with a
population of 1,200,000 or more persons and any portion of a county contained
in Area A (Area A) or the portion of Pinal County that is west of range 11
east, excluding the portion within Area A (Area C), must comply with one of two
outlined fuel reformulation options, subject to a waiver by the U.S.
Environmental Protection Agency (U.S. EPA) to comply with the federal Clean Air
Act. All gasoline in Area A or Area C must also meet the statutory maximum
vapor pressure requirements, which vary based on the time of year (A.R.S. ��
3-3401
;

3-3433
;
and
3-3493
).

Any registered supplier or oxygenate blender may petition the Associate
Director of the Division for a waiver for all registered suppliers or oxygenate
blenders from compliance with statutorily prescribed standards for the sale of
gasoline during from November 1 through March 31 of each year in Area A if the
petitioner can demonstrate that ethanol supply shortages are imminent or the statutorily
prescribed standards for fuel reformulation in Area C from May 31 through
September 30 of each year if the petitioner demonstrates that a shortage in the
supply of gasoline meeting the prescribed standards for fuel reformulation in
Area C is imminent.

The petition for Area A must: 1) identify specific supply conditions that
will result in the shortage of ethanol; 2) identify which oxygenate or
oxygenates and the concentration that will be blended into gasoline for sale or
use in Area A; 3) demonstrate that the alternative oxygenate blend comes
closest to meeting a three and one-half percent by weight oxygen content at
reasonable cost, unless the registered supplier or oxygenate blender is
petitioning to use a gasoline-ethanol blend containing less than 10 percent by
volume of ethanol; and 4) specify a time period for compliance with the
statutorily prescribed standards for the sale of gasoline not to exceed 60
days. The petition for Area C must: 1) identify specific supply conditions that
will result in a shortage of gasoline meeting the statutorily prescribed fuel
reformulation standards; 2) identify the formulation of gasoline that will be
sold in Area C in lieu of gasoline meeting the statutorily prescribed fuel
reformulation standards; and 3) specify a time period for compliance with the
statutorily prescribed fuel reformulation standards not to exceed 60 days
(A.R.S. ��
3-3493

and
3-3494
).

����������� There is no
anticipated fiscal impact to the state General Fund associated with this
legislation.

Provisions

1.

Requires the Director of ADEQ, within 30 days of the effective date, to
collaborate in good faith with the Associate Director to submit a fuel
formulation waiver request for Area A and Area C to the EPA consistent with the
waiver process for regulation of fuels provided in the federal Clean Air Act.

2.

Requires the prescribed fuel formulation waiver request to include:

a)

the
available information required by the criteria in the federal Clean Air Act and
a request a for a 20-day waiver period; and

b)

all
available information in an effort to demonstrate to the EPA that extreme and
unusual fuel supply circumstances exist that prevent the distribution of an
adequate supply of fuel consumers, that extreme and unusual fuel supply
circumstances are the result of an event that could not reasonably have been
foreseen or prevented and that it is in the public interest to grant the fuel
formulation waiver.

3.

Requires the Director of ADEQ to submit a copy of the outlined 20-day
waiver request to the President of the Senate, the Speaker of the House of
Representatives, the Governor and the Secretary of State.

4.

Requires the circumstances and events that justify the requested fuel
formulation waiver to be limited to the adoption and implementation of energy
and environmental policies in the State of California and the closure of
refineries in California and from including any other circumstance or
condition.

5.

Stipulates that, if the EPA grants the fuel formulation waiver request
or otherwise issues a decision in 2026 to waive the applicable federal
standards established under the federal Clean Air Act, the following apply:

a)

the
Associate Director must waive the applicable statutorily prescribed state
requirements relating to standards for oxygenated fuel, sale of gasoline in
Area A and Area B and fuel reformulation in Area A and Area C that result from
the fuel formulation waiver;

b)

the
fuel formulation waiver must be equally applicable to all regulated persons
that the standards apply to and may not be selectively applied to any single
regulation person; and

c)

before
the expiration of the federal waiver or any fuel formulation waiver extension,
if the conditions identified in the fuel formulation waiver or otherwise
justifying the fuel formulation waiver continue, the Director of ADEQ must
collaborate with the Associate Director to submit an additional fuel
formulation waiver request to the EPA to extend the waiver for an additional 20
days.

6.

Defines
Area A, Area C
and
Clean Air Act
.

7.

Becomes effective on signature of the Governor, if the emergency clause
is enacted.

Current Bill Text

Read the full stored bill text

HB2400 - 572R - H Ver

House Engrossed

motor fuel tax
holiday

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2400

AN
ACT

Amending sectionS 28-5606 AND 28-6951,
Arizona Revised Statutes; AMENDING title 28, chapter 20, article 4, Arizona
Revised Statutes, by adding section 28-7012; relating to motor fuel tax.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 28-5606, Arizona Revised
Statutes, is amended to read:

START_STATUTE
28-5606.

Imposition of motor fuel taxes; tax holiday

A. In addition to all other taxes provided by law, a
tax of
eighteen cents

$.18
per
gallon is imposed on motor vehicle fuel possessed, used or consumed in this
state.

B. To partially compensate this state for the use of
its highways:

1. A use fuel tax is imposed on use fuel used in the
propulsion of a light class motor vehicle on a highway in this state at the
same rate per gallon as the motor vehicle fuel tax prescribed in subsection A
of this section, except that there is no use fuel tax on alternative fuels.

2. A use fuel tax is imposed on use fuel used in the
propulsion of a use class motor vehicle on a highway in this state at the rate
of
twenty-six cents

$.26
for
each gallon, except that there is no use fuel tax on alternative fuels and use
class vehicles that are exempt pursuant to section 28-5432 from the
weight fee prescribed in section 28-5433 are subject to the use fuel tax
imposed by paragraph 1 of this subsection.

3. Through December 31, 2024, a use fuel tax is
imposed on use fuel used in the propulsion of a motor vehicle transporting
forest products in compliance with the requirements of section 41-1516 on a
highway in this state at the rate of
nine cents

$.09
for each gallon, except that there is no use fuel tax on
alternative fuels.

C. The motor vehicle fuel and use fuel taxes imposed
pursuant to this section and the aviation fuel taxes imposed pursuant to
section 28-8344 are conclusively presumed to be direct taxes on the
consumer or user but shall be collected and remitted to the department by
suppliers for the purpose of convenience and facility only. Motor
vehicle fuel, use fuel and aviation fuel taxes that are collected and paid to
the department by a supplier are considered to be advance payments, shall be
added to the price of motor vehicle fuel, use fuel or aviation fuel and shall
be recovered from the consumer or user.

D. Motor vehicle fuel and use fuel taxes imposed
pursuant to this section on the use of motor vehicle fuel and use fuel and the
aviation fuel taxes imposed pursuant to section 28-8344 on the use of
aviation fuel, other than by bulk transfer, arise at the time the motor
vehicle, use or aviation fuel either:

1. Is imported into this state and is measured by
invoiced gallons received outside this state at a refinery, terminal or bulk
plant for delivery to a destination in this state.

2. Is removed, as measured by invoiced gallons, from
the bulk transfer terminal system or from a qualified terminal in this state.

3. Is removed, as
measured by invoiced gallons, from the bulk transfer terminal system or from a
qualified terminal or refinery outside this state for delivery to a destination
in this state as represented on the shipping papers if a supplier imports the
motor vehicle, use or aviation fuel for the account of the supplier or the
supplier has made a tax precollection election pursuant to section 28-5636.

E. If motor fuel is removed from the bulk transfer
terminal system or from a qualified terminal or is imported into this state,
the original removal, transfer or importation of the motor fuel is subject to
the collection of the tax. If this motor fuel is transported to
another qualified terminal or reenters the bulk transfer terminal system, the
subsequent sale of the motor fuel on which tax has been collected is not
subject to collection of an additional tax if proper documentation is retained
to support the transaction.

F. Notwithstanding subsection A of
this section, a motor vehicle fuel tax is not imposed beginning at 12:00 a.m.
on May 1 and ending at 11:59 p.m. on September 30 of each year for motor
vehicle fuel that is purchased, sold, possessed, used or consumed in area A as
defined in section 49-541 or area C as defined in section 3-3401. A
vendor shall not add to the price of motor vehicle fuel and shall not recover
from the consumer or user an amount to cover, or designated as, motor vehicle
fuel tax during the time period and in the areas prescribed by this
subsection. Any amounts erroneously or improperly collected as motor
vehicle fuel tax must be remitted to the department. The reporting
requirements for suppliers of motor vehicle fuel, including the requirements in
chapter 16, article 1 of this title, remain in effect for all vendors in all
locations in this state at all times.
END_STATUTE

Sec. 2. Section 28-6951, Arizona Revised
Statutes, is amended to read:

START_STATUTE
28-6951.

Five year
transportation facilities construction program; departmental committee

A. The director shall develop a five year
transportation facilities construction program according to the policies
established by the board.

B. To aid in the development of the five year
transportation facilities construction program, the director shall appoint a
departmental committee that is responsible to the director. The
departmental committee is subject to title 38, chapter 3, article
3.1.
The department or the departmental committee may
not recommend a priority for a TRANSPORTATION construction project based on the
amount of motor vehicle fuel tax or use fuel tax that a county contributes
toward deposit in the state highway fund.

C. The departmental committee shall:

1. Recommend priorities on transportation facilities
construction projects to be constructed by this state that may include any
relevant criteria for the development of priority recommendations for the
construction and development of transportation facilities to be constructed by
this state.

2. Update and prepare annually a long-range
statewide transportation facilities construction program covering the following
five fiscal years for submission to the board as follows:

(a) The first year of the five year program shall
consist of the highest priority transportation facilities construction projects
that with reasonable certainty can be advertised for public bidding.

(b) The committee shall group proposed projects for
the four remaining years of the five year program by the year it is estimated
construction will begin and in order of their priorities.

(c) The committee shall provide the estimated cost
of the program for each year that is approximately equal to the revenues
estimated to be available for transportation facilities construction purposes
during that year.

3. Review priority changes in or introduction of new
projects to a proposed or an adopted five year program that the board has
requested and make recommendations in a written report to the board on the
requested priority changes or introduction of new projects based on a study of
the criteria and policy that establish the priorities of projects.

4. Review the adopted five year transportation
facilities construction program from time to time during the fiscal year and
make recommendations in a written report to the board for priority changes in
or introduction of new projects to the program based on a study of the criteria
and policy that establish the priorities of projects.

5. Review and make recommendations to the board for
applications submitted pursuant to section 28-339.

6. Fully document its recommendations in the written
reports required by this section.
END_STATUTE

Sec. 3. Title 28, chapter 20, article 4,
Arizona Revised Statutes, is amended by adding section 28-7012, to read:

START_STATUTE
28-7012.

State highway user revenue fund distribution; local government

For each FISCAL year, the department shall
allocate and transfer $72,600,000 in the
state highway
fund as follows:

1. $27,588,000 to the counties.

2. $39,930,000 to the cities and
towns.

3. $5,082,000 to cities and towns
with a POPULATION of three hundred THOUSAND or more persons.
END_STATUTE

Sec. 4.
Exemption from rulemaking

The department of transportation is
exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised
Statutes, for one year after the effective date of this act to adopt
administrative rules regarding the implementation of this act.

(ENACTED
WITHOUT THE EMERGENCY)

Sec. 5.
Emergency

This act is an emergency measure that
is necessary to preserve the public peace, health or safety and is operative
immediately as provided by law.