I

104TH CONGRESS

2D SESSION H. R. 4288

To encourage the increased use of domestic natural gas as a transportation

fuel, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 1996

Mr. BARTON of Texas (for himself, Mr. BILBRAY, Mr. BONO, Mr. COMBEST,

Mr. GINGRICH, Mr. MCCRERY, Mr. REGULA, Mr. TAUZIN, Mr.

THORNBERRY, and Mr. WISE) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees

on Transportation and Infrastructure, Ways and Means, National Security, and Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

To encourage the increased use of domestic natural gas

as a transportation fuel, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 TITLE I—GENERAL PROVISIONS

4 SECTION 1. SHORT TITLE.

5 This Act may be cited as the ‘‘Natural Gas Vehicle

6 Incentives Act of 1996’’.
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1 SEC. 2. FINDINGS.

2 (a) PRINCIPAL FINDING.—The Congress finds that

3 it is in the interest of the United States to encourage the

4 increased use of domestic natural gas as a transportation

5 fuel and thereby realize the broad societal benefits associ6 ated with such use, including improved environmental

7 quality, enhanced energy security, and increased domestic

8 economic activity.

9 (b) GENERAL FINDINGS.—The Congress finds that—

10 (1) the United States currently imports ap11 proximately 50 percent of the petroleum consumed

12 within the country, and this figure is expected to in13 crease to 73 percent by the year 2000;

14 (2) the transfer of wealth from the United

15 States to oil exporting countries in 1994 was ap16 proximately $45,000,000,000;

17 (3) the transportation sector in the United

18 States is 97 percent dependent upon petroleum and

19 accounts for approximately 67 percent of the Na20 tion’s demand for petroleum;

21 (4) emissions from transportation sources con22 tribute approximately 57 percent of the total criteria

23 pollutants within the United States and one-third of

24 the total greenhouse gas emissions within the United

25 States;
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1 (5) approximately 62,000,000 Americans live in

2 areas that are in violation of the air quality stand3 ards established by the Clean Air Act, and many of

4 these Americans, especially those in urban areas, in5 creasingly are suffering adverse health consequences

6 resulting from poor air quality;

7 (6) natural gas is a plentiful, domestically avail8 able alternative to petroleum;

9 (7) in comparison to a gasoline-powered vehicle,

10 a typical natural gas vehicle substantially reduces

11 emissions of carbon monoxide, nonmethane organic

12 gases, oxides of nitrogen, and particulate matter;

13 (8) the environmental risks inherent in the pro14 duction, refining, transportation, and storage of pe15 troleum-based fuels are far greater than the cor16 responding environmental risks associated with the

17 production, transportation, and storage of natural

18 gas used as a transportation fuel;

19 (9) the technology to maximize the potential so20 cietal benefits resulting from the increased use of

21 natural gas as a transportation fuel is available in

22 the commercial marketplace today;

23 (10) the financial assistance of the Federal

24 Government is needed to provide incentives to stimu25 late the mass production of natural gas vehicles; and
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1 (11) incentives to the private sector are the

2 most efficient and effective means of producing long3 term reductions in motor vehicle emissions and oil

4 imports.

5 TITLE II—EMISSION REDUCTION

6 CREDITS

7 SEC. 201. EMISSION REDUCTION CREDITS.

8 Part A of title I of the Clean Air Act (42 U.S.C. 7401

9 et seq.) is amended by adding the following new section

10 at the end thereof:

11 ‘‘SEC. 132. CREDIT PROGRAM FOR NATURAL GAS VEHICLES

12 AND FUELING INFRASTRUCTURE.

13 ‘‘(a) ESTABLISHMENT OF CREDIT PROGRAM.—With14 in 1 year after the date of enactment of this section, the

15 Administrator shall promulgate regulations establishing

16 an emission reduction credit program for natural gas vehi17 cles, ULEV-certified alternative fuel vehicles that operate

18 on alternative fuel, and fueling infrastructure. The regula19 tions shall provide that credits shall be usable beginning

20 no later than 18 months after the date of enactment of

21 this section.

22 ‘‘(b) STANDARDS FOR VEHICLES.—The rules promul23 gated under subsection (a) shall base emission reduction

24 credits for natural gas vehicles and ULEV-certified alter25 native fuel vehicles on the difference in emission levels be-
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1 tween in-use gasoline and diesel vehicles and the levels of

2 emissions from natural gas vehicles and ULEV-certified

3 alternative fuel vehicles of similar type and weight, based

4 on data developed by the Administrator for purposes of

5 emissions certification of natural gas vehicles and ULEV6 certified alternative fuel vehicles. The rules shall be based

7 on the following:

8 ‘‘(1) Credits shall be available to owners or op9 erators of natural gas vehicles or ULEV-certified al10 ternative fuel vehicles that certify annual use of at

11 least 1,500 gallons or gallon equivalents of natural

12 gas, or alternative fuel in the case of ULEV-certified

13 alternative fuel vehicles, per year, per natural gas

14 vehicle or ULEV-certified alternative fuel vehicle.

15 ‘‘(2) The right to obtain credits or hold credits

16 shall be freely transferable.

17 ‘‘(3) Credits may be used to offset any require18 ments in effect pursuant to this title (A) to reduce

19 emissions of nitrogen oxides, volatile organic com20 pounds, nonmethane organic gas, carbon monoxide,

21 and particulates, including those applicable to motor

22 vehicles or stationary sources; and (B) to implement

23 transportation control measures, including high oc24 cupancy vehicles restrictions and employee trip re25 duction programs.
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1 ‘‘(4) Credits shall be based on assumed vehicle

2 mileage of 20,000 miles per year.

3 ‘‘(5) Owners or operators of natural gas vehi4 cles and ULEV-certified alternative fuel vehicles or

5 their assignees shall be provided an opportunity to

6 demonstrate eligibility to receive excess credits based

7 on vehicle mileage in excess of the assumed mileage.

8 Procedures established by the Administrator related

9 to such excess credits shall be simple and not re10 quire burdensome recordkeeping.

11 ‘‘(6) The Administrator shall establish different

12 levels of credit to reflect the difference in emissions

13 among various weight classifications of natural gas

14 vehicles or ULEV-certified alternative fuel vehicles.

15 The Administrator shall consult with affected parties

16 to determine the appropriate weight classifications

17 for purposes of this program.

18 ‘‘(c) STANDARDS FOR FUELING INFRASTRUCTURE.—

19 The rules promulgated under subsection (a) shall base

20 emission reduction credits for the installation and rehabili21 tation of natural gas fueling stations on the initial capac22 ity of a station and emission reduction credits for the oper23 ation of natural gas fueling stations on the annual volume

24 of natural gas actually dispensed at a station. The rules

25 shall be based on the following:
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1 ‘‘(1) Credits shall be available to any individual

2 or entity that installs a new natural gas fueling sta3 tion, increases the capacity or efficiency of an exist4 ing natural gas fueling station, or operates a natural

5 gas fueling station.

6 ‘‘(2) For installation and rehabilitation credits,

7 different levels of credit shall be established to re8 flect the varied fueling capacity of the different

9 types of natural gas fueling stations. For operational

10 credits, the level of credit shall reflect the actual an11 nual volume of natural gas dispensed at a station.

12 The Administrator shall consult with the affected

13 parties to determine the appropriate classifications

14 for purposes of this program.

15 ‘‘(3) The right to obtain credits or hold credits

16 shall be freely transferable.

17 ‘‘(4) Credits may be used to offset any require18 ments in effect pursuant to this title to reduce emis19 sions of nitrogen oxides, nonmethane organic gas,

20 carbon monoxide, and particulates, including those

21 applicable to motor vehicles or stationary sources.

22 ‘‘(5) Credits shall be higher for natural gas

23 fueling stations that provide public access.
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1 ‘‘(6) Procedures established by the Adminis2 trator related to such credits shall be simple and not

3 require burdensome recordkeeping.

4 ‘‘(d) DEFINITIONS.—For purposes of this sub5 section—

6 ‘‘(1) NATURAL GAS VEHICLE.—The term ‘natu7 ral gas vehicle’ means a vehicle that will operate on

8 natural gas alone or natural gas in combination with

9 another fuel in a dual-fuel configuration.

10 ‘‘(2) NATURAL GAS.—The term ‘natural gas’

11 includes compressed natural gas and liquefied natu12 ral gas.

13 ‘‘(3) NATURAL GAS FUELING STATION.—The

14 term ‘natural gas fueling station’ means any prop15 erty or equipment necessary to dispense natural gas

16 as a vehicular fuel.

17 ‘‘(4) ALTERNATIVE FUEL AND ALTERNATIVE

18 FUEL VEHICLE.—The terms ‘alternative fuel’ and

19 ‘alternative fuel vehicle’ have the same meanings as

20 in section 301 of the Energy Policy Act of 1992.

21 ‘‘(5) ULEV-CERTIFIED ALTERNATIVE FUEL VE22 HICLE.—The term ‘ULEV-certified alternative fuel

23 vehicle’ means any vehicle that operates on alter24 native fuel and has been certified by the California

25 Air Resources Board or by the Administrator to
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1 meet the current ultra-low emission vehicle standard

2 as established by the California Air Resources Board

3 or as established under title II of this Act.

4 ‘‘(e) BIFUEL NATURAL GAS VEHICLES.—The rules

5 issued under this section shall permit bifuel vehicles that

6 are capable of operating both on natural gas and gasoline

7 to receive credits.’’.

8 TITLE III—TAX INCENTIVES

9 SEC. 301. CREDITS FOR NATURAL GAS VEHICLES, FUELING

10 STATIONS, AND FUEL.

11 (a) IN GENERAL.—Subpart D of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of

13 1986 (relating to business related credits) is amended by

14 adding at the end the following new section:

15 ‘‘SEC. 45D. CREDITS RELATED TO NATURAL GAS VEHICLES.

16 ‘‘(a) CREDIT FOR VEHICLES.—

17 ‘‘(1) IN GENERAL.—For purposes of section 38,

18 the natural gas vehicle property credit for any tax19 able year is an amount equal to 50 percent of the

20 cost of any qualified natural gas vehicle property

21 placed in service by the taxpayer during such taxable

22 year.

23 ‘‘(2) QUALIFIED NATURAL GAS VEHICLE PROP24 ERTY.—
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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1), the term ‘qualified natural gas vehi3 cle property’ means any property which would

4 be qualified clean-fuel vehicle property as de5 fined in section 179A(c) if—

6 ‘‘(i) paragraph (2) thereof did not

7 apply, and

8 ‘‘(ii) the only clean-burning fuels

9 under such section were natural gas and

10 liquefied natural gas.

11 ‘‘(B) VEHICLE MUST BE PART OF

12 FLEET.—Property shall not be treated as quali13 fied natural gas vehicle property unless the

14 motor vehicle of which it is a part is part of a

15 fleet which includes at least 5 motor vehicles

16 which are used by the taxpayer in a trade or

17 business.

18 ‘‘(3) TERMINATION.—

19 ‘‘(A) IN GENERAL.—This subsection shall

20 not apply to property placed in service after the

21 first calendar year after the termination year.

22 ‘‘(B) TERMINATION YEAR.—For purposes

23 of subparagraph (A), the termination year is

24 the first calendar year in which the number of

25 qualified natural gas vehicles placed in service
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1 is at least 10 percent of the total number of all

2 motor vehicles placed in service during such

3 year.

4 ‘‘(C) DEFINITIONS.—For purposes of sub5 paragraph (B)—

6 ‘‘(i) QUALIFIED NATURAL GAS VEHI7 CLE.—The term ‘qualified natural gas ve8 hicle’ means any motor vehicle capable of

9 operating on compressed natural gas or

10 liquefied natural gas.

11 ‘‘(ii) MOTOR VEHICLE.—The term

12 ‘motor vehicle’ has the meaning given such

13 term by section 179A(e)(2).

14 ‘‘(b) CREDIT FOR FUELING STATIONS.—

15 ‘‘(1) IN GENERAL.—For purposes of section 38,

16 the natural gas fueling property credit for any tax17 able year is an amount equal to the lesser of—

18 ‘‘(A) $25,000, or

19 ‘‘(B) 10 percent of the cost of any quali20 fied natural gas vehicle fueling property placed

21 in service by the taxpayer during such taxable

22 year.

23 ‘‘(2) QUALIFIED NATURAL GAS VEHICLE FUEL24 ING PROPERTY.—For purposes of this section, the
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1 term ‘qualified natural gas vehicle fueling property’

2 means any property—

3 ‘‘(A) which is placed in service to fuel

4 qualified natural gas vehicles;

5 ‘‘(B) the original use of which commences

6 with the taxpayer; and

7 ‘‘(C) which is of a character subject to the

8 allowance for depreciation.

9 ‘‘(3) TERMINATION.—This subsection shall not

10 apply to property placed in service after the first cal11 endar year after the termination year (as defined in

12 subsection (a)(3)).

13 ‘‘(c) CREDIT FOR NATURAL GAS USED AS A TRANS14 PORTATION FUEL.—

15 ‘‘(1) IN GENERAL.—For purposes of section 38,

16 the natural gas motor fuel credit for any taxable

17 year is an amount equal to—

18 ‘‘(A) 25 cents per gallon of liquefied natu19 ral gas, and

20 ‘‘(B) 25 cents per gasoline gallon equiva21 lent (as determined by the National Conference

22 on Weights and Measures) of compressed natu23 ral gas,

24 used during such taxable year by the taxpayer as a

25 fuel to propel a natural gas vehicle.
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1 ‘‘(2) NATURAL GAS VEHICLE.—For purposes of

2 this section, the term ‘natural gas vehicle’ means

3 any motor vehicle (as defined in section

4 179A(e)(2))—

5 ‘‘(A) used in a trade or business by the

6 taxpayer as part of a fleet consisting of at least

7 5 motor vehicles which are so used;

8 ‘‘(B) that consumes at least 1,500 gasoline

9 gallon equivalents of natural gas per year; and

10 ‘‘(C) the original use of which commences

11 with the taxpayer.

12 ‘‘(3) NATURAL GAS.—For purposes of this sec13 tion, the term ‘natural gas’ means compressed natu14 ral gas or liquefied natural gas.

15 ‘‘(4) TERMINATION.—This subsection shall not

16 apply to fuel used after the first calendar year after

17 the termination year (as defined in subsection

18 (a)(3)).

19 ‘‘(d) SPECIAL RULES.—

20 ‘‘(1) COORDINATION WITH SECTION 179A.—The

21 cost otherwise taken into account under section

22 179A with respect to any property shall be reduced

23 by the amount of the credit allowed under this sec24 tion with respect to such cost.
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1 ‘‘(2) CERTAIN RULES TO APPLY.—Rules similar

2 to the rules of subsection (a)(2), and paragraphs

3 (3), (4), (5), and (6) of subsection (e), of section

4 179A shall apply for purposes of subsections (a) and

5 (b).’’

6 (b) CONFORMING AMENDMENTS.—

7 (1) Subsection (a) of section 38 of such Code

8 is amended by striking ‘‘plus’’ at the end of para9 graph (11), by striking the period at the end of

10 paragraph (12) and inserting a comma, and by add11 ing at the end the following new paragraphs:

12 ‘‘(13) the natural gas vehicle property credit de13 termined under section 45D(a),

14 ‘‘(14) the natural gas fueling property credit

15 determined under section 45D(b), plus

16 ‘‘(15) the natural gas motor fuel credit deter17 mined under section 45D(c).’’

18 (2) The table of sections for subpart D of part

19 IV of subchapter A of chapter 1 of such Code is

20 amended by adding at the end the following new

21 item:

‘‘Sec. 45D. Credits related to natural gas vehicles.’’

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall take effect on the date of the enactment

24 of this Act.
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1 SEC. 302. EXCISE TAXATION OF LIQUEFIED NATURAL GAS.

2 (a) IN GENERAL.—Paragraph (3) of section 4041(a)

3 of the Internal Revenue Code of 1986 is amended to read

4 as follows:

5 ‘‘(3) COMPRESSED OR LIQUEFIED NATURAL

6 GAS.—

7 ‘‘(A) IN GENERAL.—There is hereby im8 posed a tax on compressed or liquefied natural

9 gas—

10 ‘‘(i) sold by any person to an owner,

11 lessee, or other operator of a motor vehicle

12 or motorboat for use as a fuel in such

13 motor vehicle or motorboat, or

14 ‘‘(ii) used by any person as a fuel in

15 a motor vehicle or motorboat unless there

16 was a taxable sale of such gas under clause

17 (i).

18 The rate of the tax imposed by this paragraph

19 shall be 48.54 cents per MCF (determined at

20 standard temperature and pressure) in the case

21 of compressed natural gas and 3.54 cents per

22 gallon in the case of liquefied natural gas.’’

23 (b) CONFORMING AMENDMENT.—Paragraph (2) of

24 section 4041(a) of such Code is amended by striking

25 ‘‘(other’’ and all that follows through ‘‘4081)’’ and insert-
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1 ing ‘‘(other than liquefied natural gas, kerosene, gas oil,

2 or fuel oil, or any product taxable under section 4081)’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall take effect on the date of the enactment

5 of this Act.

6 SEC. 303. SHORTER DEPRECIATION RECOVERY PERIODS

7 FOR NATURAL GAS VEHICLES AND REFUEL8 ING PROPERTY.

9 (a) VEHICLES TREATED AS 3-YEAR PROPERTY.—

10 (1) Subparagraph (A) of section 168(e)(3) of

11 the Internal Revenue Code of 1986 is amended by

12 striking ‘‘and’’ at the end of clause (i), by striking

13 the period at the end of clause (ii) and inserting ‘‘,

14 and’’, and by adding at the end the following new

15 clause:

16 ‘‘(iii) any automobile, general purpose

17 truck, or bus which is fueled in whole or

18 in part by compressed natural gas or lique19 fied natural gas.’’

20 (2) Subparagraph (A) of section 280F(a)(1) of

21 such Code is amended by adding at the end the fol22 lowing flush sentence:

23 ‘‘The preceding sentence shall not apply to any pas24 senger automobile described in section

25 168(e)(3)(A)(iii).’’
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1 (b) REFUELING PROPERTY TREATED AS 7-YEAR

2 PROPERTY.—Subparagraph (C) of section 168(e)(3) of

3 such Code is amended by redesignating clause (ii) as

4 clause (iii) and by inserting after clause (i) the following

5 new clause:

6 ‘‘(ii) any qualified clean-fuel vehicle

7 refueling property (as defined in section

8 179(d)), and’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to property placed in service after

11 the date of the enactment of this Act.

12 TITLE IV—REVISION OF

13 PURCHASE MANDATES

14 SEC. 401. STATEMENT OF POLICY.

15 It is the policy of the United States that—

16 (1) a viable, sustainable market for natural gas

17 and other low emission vehicles requires cooperative

18 efforts by and among fleet operators and other

19 users, fuel providers, and vehicle manufacturers;

20 (2) government mandates requiring private sec21 tor fleet purchases do not support such cooperative

22 efforts;

23 (3) the low emission vehicle market should be

24 based on voluntary, economically sound decisions;

25 and
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1 (4) market-oriented incentives can provide an

2 appropriate and effective means for developing a

3 self-sustaining market for such vehicles and fuels.

4 SEC. 402. REVISION OF MANDATE AUTHORITIES.

5 (a) REPEAL OF PRIVATE FLEET MANDATES.—Ex6 cept as provided in subsection (c), section 507 of the En7 ergy Policy Act of 1992 (42 U.S.C. 13257) is repealed.

8 (b) SUNSET OF FUEL PROVIDER MANDATE.—Sec9 tion 501(a)(1)(D) of the Energy Policy Act of 1992 (42

10 U.S.C. 13251(a)(1)(D)), relating to acquisitions for model

11 year 1999 and thereafter, is amended by striking ‘‘and

12 thereafter’’.

13 (c) SUNSET OF STATE FLEET MANDATE.—Sub14 section (a) of this section shall apply, in the case of State

15 fleets, beginning with respect to model year 2000.

16 SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

17 (a) SECTION 501.—(1) Section 501(b) of the Energy

18 Policy Act of 1992 (42 U.S.C. 13251(b)) is amended by

19 striking ‘‘and thereafter’’ and inserting in lieu thereof

20 ‘‘through 1999’’.

21 (2) Section 501 of the Energy Policy Act of 1992

22 (42 U.S.C. 13251) is amended by adding at the end the

23 following new subsection:
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1 ‘‘(e) CONVERSIONS.—Nothing in this title or the

2 amendments made by this title shall require a fleet owner

3 to acquire conversion vehicles.’’.

4 (b) SECTION 504.—Section 504(c) of the Energy Pol5 icy Act of 1992 (42 U.S.C. 13254(c)) is amended to read

6 as follows:

7 ‘‘(c) LIMITATIONS ON AUTHORITY.—The Secretary

8 shall have no authority under this Act—

9 ‘‘(1) to mandate the production of alternative

10 fueled vehicles;

11 ‘‘(2) to specify, as applicable, the models, lines,

12 or types of, or marketing or pricing practices, poli13 cies, or strategies for, vehicles subject to this Act; or

14 ‘‘(3) to mandate, except as expressly provided

15 in this title, the purchase of alternative fueled vehi16 cles. Nothing in this Act shall be construed to give

17 the Secretary authority to mandate marketing or

18 pricing practices, policies, or strategies for alter19 native fuels, or to mandate the production, delivery,

20 or purchase of such fuels.’’.

21 (c) SECTION 506.—Section 506 of the Energy Policy

22 Act of 1992 (42 U.S.C. 13256) is amended by adding at

23 the end the following new subsection:

24 ‘‘(d) CONSULTATION WITH OTHER FEDERAL AGEN25 CIES.—In carrying out this section, the Secretary shall
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1 consult with the Secretary of Transportation, the Adminis2 trator, and other appropriate Federal agencies.’’.

3 (d) SECTION 509.—Section 509 of the Energy Policy

4 Act of 1992 (42 U.S.C. 13259) is amended to read as

5 follows:

6 ‘‘SEC. 509. SECRETARY’S RECOMMENDATIONS TO CON7 GRESS.

8 ‘‘By no later than June 30, 1997, the Secretary shall

9 recommend to Congress such measures as are necessary

10 to provide incentives for—

11 ‘‘(1) fuel suppliers to make available to the

12 public replacement fuels, including providing for the

13 construction or availability of related fuel delivery

14 systems;

15 ‘‘(2) suppliers of alternative fueled vehicles to

16 make available to the public alternative fueled vehi17 cles and to ensure the availability of necessary relat18 ed services; and

19 ‘‘(3) motor vehicle owners to use replacement

20 fuels,

21 to the extent necessary to achieve the goals of replacement

22 fuel use established in this title and to ensure that the

23 availability of alternative fuels and of alternative fueled

24 vehicles are consistent with each other.’’.
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1 (e) SECTION 510.—Section 510 of the Energy Policy

2 Act of 1992 (42 U.S.C. 13260) is amended—

3 (1) by striking ‘‘(a) IN GENERAL.—’’; and

4 (2) by striking subsection (b).

5 TITLE V—FEDERAL TRANSIT IN6 CENTIVES FOR NATURAL GAS

7 VEHICLES

8 SEC. 501. FINDING.

9 Section 5301(b) of title 49, United States Code, is

10 amended—

11 (1) by striking ‘‘and’’ at the end of paragraph

12 (8);

13 (2) by redesignating paragraph (9) as para14 graph (10); and

15 (3) by inserting after paragraph (8) the follow16 ing:

17 ‘‘(9) the financial assistance provided under

18 this chapter reflects the Government’s commitment

19 to increase the use of natural gas and alternative

20 fuels as transportation fuels, particularly in trans21 portation management areas seeking to increase air

22 quality; and’’.

23 SEC. 502. DEFINITIONS.

24 Section 5302(a) of title 49, United States Code, is

25 amended—
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1 (1) by redesignating paragraphs (1) through

2 (13) as paragraphs (2) through (14), respectively;

3 (2) by inserting before paragraph (2), as redes4 ignated by paragraph (1) of this section, the follow5 ing:

6 ‘‘(1) ‘alternative fuel’ and ‘alternative fueled ve7 hicle’ have the meanings given such terms in section

8 301 of the Energy Policy Act of 1992.’’;

9 (3) by redesignating paragraphs (9) through

10 (14), as redesignated by paragraph (1) of this sec11 tion, as paragraphs (12) through (17), respectively;

12 (4) by inserting after paragraph (8), as redesig13 nated by paragraph (1) of this section, the following:

14 ‘‘(9) ‘natural gas’ includes compressed natural

15 gas and liquified natural gas.

16 ‘‘(10) ‘natural gas fueling station’ means any

17 property or equipment necessary to dispense natural

18 gas as a vehicular fuel.

19 ‘‘(11) ‘natural gas vehicle’ means a vehicle that

20 will operate on natural gas alone or natural gas in

21 combination with another fuel in a dual-fuel configu22 ration.’’;

23 (5) by redesignating paragraph (17), as redesig24 nated by paragraph (3) of this section, as paragraph

25 (18); and
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1 (6) by inserting after paragraph (16), as redes2 ignated by paragraph (3) of this section, the follow3 ing:

4 ‘‘(17) ‘ULEV-certified alternative fueled vehi5 cle’ and ‘ULEV-certified alternative fueled bus’

6 mean a vehicle or bus that operates on alternative

7 fuel and has been certified by the California Air Re8 sources Board or the Environmental Protection

9 Agency as meeting the current Ultra-Low Emission

10 Vehicle standard, as established by the California

11 Air Resources Board.’’.

12 SEC. 503. FACTORS IN METROPOLITAN PLANNING.

13 Section 5303(b) of title 49, United States Code, is

14 amended by adding at the end the following:

15 ‘‘(16) the opportunities that the metropolitan

16 planning organization has to stimulate the use of

17 natural gas vehicles and ULEV-certified alternative

18 fueled vehicles and the installation of a fueling infra19 structure to support such vehicles.’’.

20 SEC. 504. RESEARCH, DEVELOPMENT, AND DEMONSTRA21 TION PROJECTS.

22 Section 5312(b)(1) of title 49, United States Code,

23 is amended—

24 (1) by striking ‘‘and’’ at the end of subpara25 graph (E);
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1 (2) by redesignating subparagraph (F) as sub2 paragraph (G); and

3 (3) by inserting after subparagraph (E) the fol4 lowing:

5 ‘‘(F) the relationship between environ6 mental policy and transportation policy, par7 ticularly the potential applications for natural

8 gas vehicles and ULEV-certified alternative

9 fueled vehicles in urban settings; and’’.

10 SEC. 505. ENVIRONMENTAL FACTORS RELATED TO FUND11 ING FOR BUSES.

12 Section 5323 of title 49, United States Code, is

13 amended by adding at the end the following:

14 ‘‘(m) FUNDING FOR NEW NATURAL GAS BUSES AND

15 RELATED PROPERTY AND EQUIPMENT.—A Government

16 grant for a project to be assisted under this chapter that

17 involves acquiring buses powered by natural gas, or any

18 ULEV-certified alternative fueled bus, and all real prop19 erty or equipment related to the fueling thereof, shall not

20 be less than 90 percent of the cost of the project.’’.
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1 TITLE VI—GOVERNMENT CON2 TRACT INCENTIVES FOR NAT3 URAL GAS VEHICLES

4 SEC. 601. PREFERENCE FOR CONTRACTORS USING NATU5 RAL GAS VEHICLES.

6 (a) ARMED SERVICES ACQUISITIONS.—(1) Chapter

7 141 of title 10, United States Code, is amended by insert8 ing after section 2398 the following new section:

9 ‘‘§ 2398a. Preference for contractors using natural

10 gas vehicles

11 ‘‘(a) PREFERENCE FOR CONTRACTORS.—In entering

12 into contracts with private entities for the procurement of

13 goods or services, the Secretary of Defense shall give a

14 preference to entities that use, to the maximum extent

15 practicable, either of the following:

16 ‘‘(1) Motor vehicles that operate on natural gas.

17 ‘‘(2) Motor vehicles that—

18 ‘‘(A) operate on alternative fuel (as defined

19 in section 301 of the Energy Policy Act of 1992

20 (42 U.S.C. 13211); and

21 ‘‘(B) are certified by the California Air Re22 sources Board or by the Administrator of the

23 Environmental Protection Agency as meeting

24 the ultra-low emission vehicle standard estab25 lished by the California Air Resources Board.
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1 ‘‘(b) REQUIREMENT TO APPLY PREFERENCE TO

2 SUBCONTRACTORS.—The Secretary of Defense shall re3 quire an entity with which the Department of Defense has

4 entered into a contract for the procurement of goods or

5 services to give a preference, in entering into subcontracts

6 to carry out such contract, to entities that use, to the max7 imum extent practicable, motor vehicles described in sub8 section (a).’’.

9 (2) The table of sections at the beginning of such

10 chapter is amended by inserting after the item relating

11 to section 2398 the following new item:

‘‘2398a. Preference for contractors using natural gas vehicles.’’.

12 (b) CIVILIAN AGENCY ACQUISITIONS.—Title III of

13 the Federal Property and Administrative Services Act of

14 1949 (41 U.S.C. 251 et seq.) is amended by adding at

15 the end the following new section:

16 ‘‘SEC. 317. PREFERENCE FOR CONTRACTORS USING NATU17 RAL GAS VEHICLES.

18 ‘‘(a) PREFERENCE FOR CONTRACTORS.—In entering

19 into contracts with private entities for the procurement of

20 goods or services, an executive agency shall give a pref21 erence to entities that use, to the maximum extent prac22 ticable, either of the following:

23 ‘‘(1) Motor vehicles that operate on natural gas.

24 ‘‘(2) Motor vehicles that—
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1 ‘‘(A) operate on alternative fuel (as defined

2 in section 301 of the Energy Policy Act of 1992

3 (42 U.S.C. 13211); and

4 ‘‘(B) are certified by the California Air Re5 sources Board or by the Administrator of the

6 Environmental Protection Agency as meeting

7 the ultra-low emission vehicle standard estab8 lished by the California Air Resources Board.

9 ‘‘(b) REQUIREMENT OF APPLY PREFERENCE TO

10 SUBCONTRACTORS.—The head of an executive agency

11 shall require an entity with which the executive agency has

12 entered into a contract for the procurement of goods or

13 services to give a preference, in entering into subcontracts

14 to carry out such contract, to entities that use, to the max15 imum extent practicable, motor vehicles described in sub16 section (a).’’.

17 (2) The table of sections in section 1 of such Act is

18 amended by inserting after the item relating to section

19 316 the following new item:

‘‘317. Preference for contractors using natural gas vehicles.’’.

20 (c) EFFECTIVE DATE.—Section 2398a of title 10,

21 United States Code, as added by subsection (a), and sec22 tion 317 of the Federal Property and Administrative Serv23 ices Act of 1949, as added by subsection (b), shall apply

24 with respect to contracts entered into after the expiration
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1 of the 60-day period beginning on the date of the enact2 ment of this Act.

3 TITLE VII—RESEARCH, DEVEL4 OPMENT, AND DEMONSTRA5 TION INCENTIVES FOR NATU6 RAL GAS VEHICLES

7 SEC. 701. NATURAL GAS VEHICLE RESEARCH, DEVELOP8 MENT, AND DEMONSTRATION PROJECTS AT

9 THE DEPARTMENT OF ENERGY.

10 (a) NATURAL GAS VEHICLE RESEARCH, DEVELOP11 MENT, AND DEMONSTRATION PROGRAM.—(1) The Sec12 retary of Energy shall conduct a 5-year program, in ac13 cordance with sections 3001 and 3002 of the Energy Pol14 icy Act of 1992, of natural gas vehicle research, develop15 ment, and demonstration.

16 (2) The natural gas vehicle program conducted pur17 suant to this section shall include activities relating to—

18 (A) onboard storage of both compressed natural

19 gas and liquified natural gas for vehicular use, in20 cluding high-strength materials, low-cost carbon

21 fiber, low-cost manufacturing processes, and ad22 vanced concepts;

23 (B) engine design for cycle optimization for me24 dium-duty and heavy-duty vehicles in—
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1 (i) compression ignition and dual-fuel cy2 cles; and

3 (ii) exhaust after treatment; and

4 (C) fuel dispensing for low-cost metering, tech5 nical and cryogenic fueling devices, and fuel condi6 tioning.

7 (b) COOPERATION WITH INDUSTRY.—In developing

8 the program pursuant to this section, the Secretary of En9 ergy shall consult with the natural gas vehicle industry

10 to ensure cooperation between the public sector and the

11 private sector.

Æ