RedDyed Diesel Fuel in Arizona NOT Red Diesel

Red-Dyed Diesel Fuel in Arizona NOT Red Diesel is Street Diesel ^ Kathy Boyle, Public Affairs Manager Bruce Bartholomew, Public Affairs Manager Mark Zimmerman, Senior Division Administrator, Revenue and Fuel Tax Administration Karl Goldsmith– Enforcement Services Arizona Department of Transportation March 17, 2015 1

Red-Dyed Diesel Fuel Program Overview What Non-taxable diesel fuel restricted to specific applications Where Off-road use in agriculture and road construction activities Why To provide tax relief to individuals/businesses that do not contribute to wear and tear of Arizona’s highways 2

Red-Dyed Diesel Fuel What is the Issue? Red-dyed diesel fuel is used illegally to avoid fuel taxes Reduced fuel tax revenue shrinks Arizona’s highway fund Less funding for highways means: • delayed maintenance • fewer new roads • more congestion • less efficient, less reliable roadways for your industry 3

Red-Dyed Diesel Fuel Enforcement of Program Rules Red Diesel is not Street Diesel Use of red-dyed diesel fuel in a vehicle on Arizona’s public roads is a violation of state law Per state law, the Arizona Department of Transportation is empowered to enforce fuel tax laws • Enforcement and Compliance Division • Sworn officers conduct inspections • Criminal and civil investigations 4

Red-Dyed Diesel Fuel Penalties for Improper Use Per state law: First offense: • Minimum penalty of $1, 000 or $10 per gallon of dyed diesel fuel involved, whichever is more. Multiple offenses: • The first offense penalties are multiplied by the number of occurrences. Can be criminal charges and civil penalties 5

Red-Dyed Diesel Fuel Educational Outreach ADOT public outreach program • Educate industry leaders • Educate fuel users Call to Action • Help ADOT convince people to “Pay Their Fair Share” 6