SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Open Fuel Standard Act of 2008'' or 
the ``OFS Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) The status of oil as a strategic commodity, which 
        derives from its domination of the transportation sector, 
        presents a clear and present danger to the United States;
            (2) in a prior era, when salt was a strategic commodity, 
        salt mines conferred national power and wars were fought over 
        the control of such mines;
            (3) technology, in the form of electricity and 
        refrigeration, decisively ended salt's monopoly of meat 
        preservation and greatly reduced its strategic importance;
            (4) fuel competition and consumer choice would similarly 
        serve to end oil's monopoly in the transportation sector and 
        strip oil of its strategic status;
            (5) the current closed fuel market has allowed a cartel of 
        petroleum exporting countries to inflate fuel prices, 
        effectively imposing a harmful tax on the economy of the United 
        States of nearly $500,000,000,000 per year;
            (6) much of the inflated petroleum revenues the oil cartel 
        earns at the expense of the people of the United States are 
        used for purposes antithetical to the interests of the United 
        States and its allies;
            (7) alcohol fuels, including ethanol and methanol, could 
        potentially provide significant supplies of additional fuels 
        that could be produced in the United States and in many other 
        countries in the Western Hemisphere that are friendly to the 
        United States;
            (8) alcohol fuels can only play a major role in securing 
        the energy independence of the United States if a substantial 
        portion of vehicles in the United States are capable of 
        operating on such fuels;
            (9) it is not in the best interest of United States 
        consumers or the United States Government to be constrained to 
        depend solely upon petroleum resources for vehicle fuels if 
        alcohol fuels are potentially available;
            (10) existing technology, in the form of flexible fuel 
        vehicles, allows internal combustion engine cars and trucks to 
        be produced at little or no additional cost, which are capable 
        of operating on conventional gasoline, alcohol fuels, or any 
        combination of such fuels, as availability or cost advantage 
        dictates, providing a platform on which fuels can compete;
            (11) the necessary distribution system for such alcohol 
        fuels will not be developed in the United States until a 
        substantial fraction of the vehicles in the United States are 
        capable of operating on such fuels;
            (12) the establishment of such a vehicle fleet and 
        distribution system would provide a large market that would 
        mobilize private resources to substantially advance the 
        technology and expand the production of alcohol fuels in the 
        United States and abroad;
            (13) the United States has an urgent national security 
        interest to develop alcohol fuels technology, production, and 
        distribution systems as rapidly as possible;
            (14) new cars sold in the United States that are equipped 
        with an internal combustion engine should allow for fuel 
        competition by being flexible fuel vehicles, and new diesel 
        cars should be capable of operating on biodiesel; and
            (15) such an open fuel standard would help to protect the 
        United States economy from high and volatile oil prices and 
        from the threats caused by global instability, terrorism, and 
        natural disaster.

SEC. 3. OPEN FUEL STANDARD FOR TRANSPORTATION.

    Chapter 329 of title 49, United States Code, is amended by adding 
at the end the following:

``SEC. 32920. OPEN FUEL STANDARD FOR TRANSPORTATION.

    ``(a) Definitions.--In this section:
            ``(1) E85.--The term `E85' means a fuel mixture containing 
        85 percent ethanol and 15 percent gasoline by volume.
            ``(2) Flexible fuel automobile.--The term `flexible fuel 
        automobile' means an automobile that has been warranted by its 
        manufacturer to operate on gasoline, E85, and M85.
            ``(3) Fuel choice-enabling automobile.--The term `fuel 
        choice-enabling automobile' means--
                    ``(A) a flexible fuel automobile; or
                    ``(B) an automobile that has been warranted by its 
                manufacturer to operate on biodiesel.
            ``(4) Light-duty automobile.--The term `light-duty 
        automobile' means--
                    ``(A) a passenger automobile; or
                    ``(B) a non-passenger automobile.
            ``(5) Light-duty automobile manufacturer's annual 
        inventory.--The term `light-duty automobile manufacturer's 
        annual inventory' means the number of light-duty automobiles 
        that a manufacturer, during a given calendar year, manufactures 
        in the United States or imports from outside of the United 
        States for sale in the United States.
            ``(6) M85.--The term `M85' means a fuel mixture containing 
        85 percent methanol and 15 percent gasoline by volume.
    ``(b) Open Fuel Standard for Transportation.--
            ``(1) In general.--Except as provided in paragraph (2), 
        each light-duty automobile manufacturer's annual inventory 
        shall be comprised of--
                    ``(A) not less than 50 percent fuel choice-enabling 
                automobiles in 2012, 2013, and 2014; and
                    ``(B) not less than 80 percent fuel choice-enabling 
                automobiles in 2015, and in each subsequent year.
            ``(2) Temporary exemption from requirements.--
                    ``(A) Application.--A manufacturer may request an 
                exemption from the requirement described in paragraph 
                (1) by submitting an application to the Secretary, at 
                such time, in such manner, and containing such 
                information as the Secretary may require by regulation. 
                Each such application shall specify the models, lines, 
                and types of automobiles affected.
                    ``(B) Evaluation.--After evaluating an application 
                received from a manufacturer, the Secretary may at any 
                time, under such terms and conditions, and to such 
                extent as the Secretary considers appropriate, 
                temporarily exempt, or renew the exemption of, a light-
                duty automobile from the requirement described in 
                paragraph (1) if the Secretary determines that 
                unavoidable events not under the control of the 
                manufacturer prevent the manufacturer of such 
                automobile from meeting its required production volume 
                of fuel choice-enabling automobiles due to a disruption 
                in--
                            ``(i) the supply of any component required 
                        for compliance with the regulations; or
                            ``(ii) the use and installation by the 
                        manufacturer of such component.
                    ``(C) Consolidation.--The Secretary may consolidate 
                applications received from multiple manufactures under 
                subparagraph (A) if they are of a similar nature.
                    ``(D) Conditions.--Any exemption granted under 
                subparagraph (B) shall be conditioned upon the 
                manufacturer's commitment to recall the exempted 
                automobiles for installation of the omitted components 
                within a reasonable time proposed by the manufacturer 
                and approved by the Secretary after such components 
                become available in sufficient quantities to satisfy 
                both anticipated production and recall volume 
                requirements.
                    ``(E) Notice.--The Secretary shall publish in the 
                Federal Register--
                            ``(i) notice of each application received 
                        from a manufacturer;
                            ``(ii) notice of each decision to grant or 
                        deny a temporary exemption; and
                            ``(iii) the reasons for granting or denying 
                        such exemptions.
                    ``(F) Labeling.--Each manufacturer that receives an 
                exemption under this paragraph shall place a label on 
                each exempted automobile. Such label--
                            ``(i) shall comply with the regulations 
                        prescribed by the Secretary under paragraph 
                        (3); and
                            ``(ii) may only be removed after recall and 
                        installation of the required components.
                    ``(G) Notice of exemption.--Each light-duty 
                automobile delivered to dealers and first purchasers 
                that is not a fuel choice-enabling automobile and for 
                which the manufacturer received an exemption under this 
                paragraph, shall be accompanied with a written 
                notification of such exemption, which complies with the 
                regulations prescribed by the Secretary under paragraph 
                (3).
            ``(3) Rulemaking.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Transportation shall 
        promulgate regulations to carry out this section.''.
Open Fuel Standard Act of 2008 or the OFS Act - Amends federal transportation law to require each light-duty automobile manufacturer's annual inventory to comprise at least: (1) 50% fuel choice-enabling automobiles in years 2012-2014; and (2) 80% fuel choice-enabling automobiles in 2015, and in each subsequent year.

Defines "fuel choice-enabling automobile" as: (1) a flexible fuel automobile capable of operating on gasoline, E85, and M85; or (2) an automobile capable of operating on biodiesel fuel.

Authorizes a manufacturer to request an exemption from such requirement from the Secretary of Transportation.

Requires: (1) each manufacturer that receives an exemption to place a label on each exempted automobile; and (2) each exempted light-duty automobile delivered to a dealer and first purchaser to be accompanied with a written notification of such exemption.
To require automobile manufacturers to ensure that not less that 80 percent of the automobiles manufactured or sold in the United States by each such manufacturer to operate on fuel mixtures containing 85 percent ethanol, 85 percent methanol, or biodiesel.