Arizona’s alternative fuel incentive program has run into difficulties after costs have soared out of control, and the program will be put on hold for at least one year while legislators close the program’s many loopholes. According to figures released last week, the program will cost at least $420 million, about 7 percent of the annual state budget. When the program was approved, it was expected to cost $3 million to $10 million. But the incentive program was much more popular than legislators had predicted, and to date has draw 20,000 applicants seeking tax credits or grants for converting to cleaner fuels. Some experts suspected all along that the offerings were too generous, especially when they did not even require anyone to stop using gasoline. In response, lawmakers recently passed a one-year moratorium on the rebate program. Gov. Jane Hull plans to call a special session on Nov. 13 to tighten loopholes for those who ordered alternative-fuel vehicles before the moratorium took effect but have not yet taken delivery of their vehicles. Under Arizona’s current plan, the state pays 130 percent of the alternative-fuel system cost, plus 30 percent of the vehicle price, regardless of what equipment is on the vehicle. The state also offers a near-total exemption from annual vehicle license fees. The Arizona plan allows a sales tax exemption on the vehicle purchase, and provides sales tax exemptions on alternative fuels. On a local level, Phoenix Mayor Skip Rimsza is pushing a plan to banish alternative-fuel vehicles from the city’s gas pumps. The move would target owners of “bi-fuel” vehicles who have no intention of running their vehicles on propane or natural gas. There is no requirement in the state law that owners of such vehicles ever have to use alternative fuel. Enforcement of such a law would come at the gas pump, Rimsza said. Owners of vehicles with blue alternative-fuel tags would not be allowed to fill up with gasoline at service stations. But the proposal will fail if the mayor expects station clerks to police the pumps, said Debra Margaf, executive director of the Arizona Automotive Trade Association, an organization of service station owners and operators. The federal Energy Department reports that 37 states offer no incentives at all for private consumers to quit using gasoline.