I

105TH CONGRESS

1ST SESSION H. R. 970

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

fuel, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 6, 1997

Mr. BARTON of Texas (for himself, Mr. BILBRAY, Mr. WISE, Mr. REGULA,

Mr. THORNBERRY, Mr. COMBEST, Mr. BONO, Mr. GINGRICH, Mr. SHERMAN, Mr. TAUZIN, and Mr. SESSIONS) introduced the following bill;

which was referred to the Committee on Commerce, and in addition to

the Committees on Transportation and Infrastructure, National Security,

Ways and Means, 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 1997’’.
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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 2010;

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 natural gas fueling infrastructure.

19 The regulations shall provide that credits shall be usable

20 beginning no later than 18 months after the date of enact21 ment of this section.

22 ‘‘(b) STANDARDS FOR VEHICLES.—The rules promul23 gated under subsection (a) shall base emission reduction
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1 credits for natural gas vehicles and ULEV-certified alter2 native fuel vehicles on the difference in emission levels be3 tween in-use gasoline and diesel vehicles and the levels of

4 emissions from natural gas vehicles and ULEV-certified

5 alternative fuel vehicles of similar type and weight, based

6 on data developed by the Administrator for purposes of

7 emissions certification of natural gas vehicles and ULEV8 certified alternative fuel vehicles. Emission reduction cred9 its shall be provided for differences in tailpipe, running

10 loss and evaporative emissions. The rules shall be based

11 on the following:

12 ‘‘(1) Credits shall be available to owners or op13 erators of natural gas vehicles or ULEV-certified al14 ternative fuel vehicles that certify annual use of at

15 least 1,500 gallons or gallon equivalents of natural

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

17 alternative fuel vehicles, per year, per natural gas

18 vehicle or ULEV-certified alternative fuel vehicle.

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

20 shall be freely transferable.

21 ‘‘(3) Credits may be used to offset any require22 ments in effect pursuant to this title (A) to reduce

23 emissions of nitrogen oxides, volatile organic com24 pounds, nonmethane organic gas, carbon monoxide,

25 and particulates, including those applicable to motor
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1 vehicles or stationary sources; and (B) to implement

2 transportation control measures, including high oc3 cupancy vehicles restrictions and employee trip re4 duction programs.

5 ‘‘(4) Credits shall be based on assumed vehicle

6 mileage of 20,000 miles per year.

7 ‘‘(5) Owners or operators of natural gas vehi8 cles and ULEV-certified alternative fuel vehicles or

9 their assignees shall be provided an opportunity to

10 demonstrate eligibility to receive excess credits based

11 on vehicle mileage in excess of the assumed mileage.

12 Procedures established by the Administrator related

13 to such excess credits shall be simple and not re14 quire burdensome recordkeeping.

15 ‘‘(6) The Administrator shall establish different

16 levels of credit to reflect the difference in emissions

17 among various weight classifications of natural gas

18 vehicles or ULEV-certified alternative fuel vehicles.

19 The Administrator shall consult with affected parties

20 to determine the appropriate weight classifications

21 for purposes of this program.

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

23 The rules promulgated under subsection (a) shall base
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1 emission reduction credits for the installation and rehabili2 tation of natural gas fueling stations on the initial capac3 ity of a station and emission reduction credits for the oper4 ation of natural gas fueling stations on the annual volume

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

6 shall be based on the following:

7 ‘‘(1) Credits shall be available to any individual

8 or entity that installs a new natural gas fueling sta9 tion, increases the capacity or efficiency of an exist10 ing natural gas fueling station, or operates a natural

11 gas fueling station. Credits shall reflect the dif12 ference in emissions between a gasoline or diesel

13 fueling station and a natural gas fueling station of

14 similar capacity.

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

16 different levels of credit shall be established to re17 flect the varied fueling capacity of the different

18 types of natural gas fueling stations. For operational

19 credits, the level of credit shall reflect the actual an20 nual volume of natural gas dispensed at a station.

21 The Administrator shall consult with the affected

22 parties to determine the appropriate classifications

23 for purposes of this program.

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

25 shall be freely transferable.
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1 ‘‘(4) Credits may be used to offset any require2 ments in effect pursuant to this title to reduce emis3 sions of nitrogen oxides, nonmethane organic gas,

4 carbon monoxide, and particulates, including those

5 applicable to motor vehicles or stationary sources.

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

7 fueling stations that provide public access.

8 ‘‘(6) Procedures established by the Adminis9 trator related to such credits shall be simple and not

10 require burdensome recordkeeping.

11 ‘‘(d) DEFINITIONS.—For purposes of this sub12 section—

13 ‘‘(1) NATURAL GAS VEHICLE.—The term ‘natu14 ral gas vehicle’ means—

15 ‘‘(A) a dedicated vehicle that operates on

16 natural gas exclusively;

17 ‘‘(B) a bi-fuel that operates on natural gas

18 or another fuel, but not in combination with

19 each other; and

20 ‘‘(C) a dual-fuel vehicle that operates on a

21 mixture of natural gas and another fuel.

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

23 includes compressed natural gas and liquefied natu24 ral gas.
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1 ‘‘(3) NATURAL GAS FUELING STATION.—The

2 term ‘natural gas fueling station’ means any prop3 erty or equipment necessary to dispense natural gas

4 as a vehicular fuel.

5 ‘‘(4) ALTERNATIVE FUEL AND ALTERNATIVE

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

7 ‘alternative fuel vehicle’ have the same meanings as

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

9 ‘‘(5) ULEV-CERTIFIED ALTERNATIVE FUEL VE10 HICLE.—The term ‘ULEV-certified alternative fuel

11 vehicle’ means any vehicle that operates on alter12 native fuel and has been certified by the California

13 Air Resources Board or by the Administrator to

14 meet the current ultra-low emission vehicle standard

15 as established by the California Air Resources Board

16 or as established under title II of this Act.’’.

17 TITLE III—TAX INCENTIVES

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

19 STATIONS, AND FUEL.

20 (a) IN GENERAL.—Subpart D of part IV of sub21 chapter A of chapter 1 of the Internal Revenue Code of

22 1986 (relating to business related credits) is amended by

23 adding at the end the following new section:

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

25 ‘‘(a) CREDIT FOR VEHICLES.—
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1 ‘‘(1) IN GENERAL.—For purposes of section 38,

2 the natural gas vehicle property credit for any tax3 able year is an amount equal to 50 percent of the

4 cost of any qualified natural gas vehicle property

5 placed in service by the taxpayer during such taxable

6 year.

7 ‘‘(2) QUALIFIED NATURAL GAS VEHICLE PROP8 ERTY.—

9 ‘‘(A) IN GENERAL.—For purposes of para10 graph (1), the term ‘qualified natural gas vehi11 cle property’ means any property which would

12 be qualified clean-fuel vehicle property as de13 fined in section 179A(c) if—

14 ‘‘(i) paragraph (2) thereof did not

15 apply, and

16 ‘‘(ii) the only clean-burning fuel under

17 such section were natural gas.

18 ‘‘(B) VEHICLE MUST BE QUALIFIED NATU19 RAL GAS VEHICLE.—

20 ‘‘(i) IN GENERAL.—Property shall not

21 be treated as qualified natural gas vehicle

22 property unless the motor vehicle of which

23 it is a part is a qualified natural gas vehi24 cle.
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1 ‘‘(ii) REASONABLE EXPECTATION AS

2 TO CERTAIN REQUIREMENTS.—For pur3 poses of this subsection, a vehicle shall be

4 treated as meeting the requirements of

5 subparagraphs (A) and (B) of subsection

6 (d)(1) if it is reasonably expected that such

7 vehicle will meet such requirements for a

8 reasonable period.

9 ‘‘(3) INCREMENTAL COST.—For purposes of

10 paragraph (1), in the case of a motor vehicle de11 scribed in section 179A(c)(1)(B), the cost taken into

12 account under subsection (a) shall not exceed the ex13 cess (if any) of—

14 ‘‘(A) the cost of the qualified natural gas

15 vehicle property, over

16 ‘‘(B) the cost of similar property in a gaso17 line or diesel vehicle of the same make and

18 model as the vehicle for which the taxpayer

19 claims the credit.

20 ‘‘(4) TERMINATION.—

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

22 not apply to property placed in service after the

23 first calendar year after the termination year.

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

25 of subparagraph (A), the termination year is
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1 the first calendar year in which the number of

2 motor vehicles capable of using natural gas as

3 a fuel which are placed in service during such

4 year is at least 10 percent of the total number

5 of all motor vehicles placed in service during

6 such year. For purposes of the preceding sen7 tence, the term ‘motor vehicle’ has the meaning

8 given such term by section 179A(e)(2).

9 ‘‘(b) CREDIT FOR FUELING STATIONS.—

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

11 the natural gas fueling property credit for any tax12 able year is an amount equal to the lesser of—

13 ‘‘(A) $25,000, or

14 ‘‘(B) 10 percent of the cost of any quali15 fied natural gas vehicle fueling property placed

16 in service by the taxpayer during such taxable

17 year.

18 ‘‘(2) QUALIFIED NATURAL GAS VEHICLE FUEL19 ING PROPERTY.—For purposes of this section, the

20 term ‘qualified natural gas vehicle fueling property’

21 means any property—

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

23 motor vehicles propelled by natural gas;

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

25 with the taxpayer; and
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1 ‘‘(C) which is of a character subject to the

2 allowance for depreciation.

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

4 apply to property placed in service after the first cal5 endar year after the termination year (as defined in

6 subsection (a)(4)).

7 ‘‘(c) CREDIT FOR NATURAL GAS USED AS A TRANS8 PORTATION FUEL.—

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

10 the natural gas motor fuel credit for any taxable

11 year is an amount equal to—

12 ‘‘(A) 25 cents per gallon of liquefied natu13 ral gas, and

14 ‘‘(B) 25 cents per gasoline gallon equiva15 lent (as determined by the National Conference

16 on Weights and Measures) of compressed natu17 ral gas,

18 used during such taxable year by the taxpayer as a

19 fuel to propel a qualified natural gas vehicle.

20 ‘‘(2) TERMINATION.—This subsection shall not

21 apply to fuel used after the first calendar year after

22 the termination year (as defined in subsection

23 (a)(4)).

24 ‘‘(d) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) QUALIFIED NATURAL GAS VEHICLE.—The

2 term ‘qualified natural gas vehicle’ means any motor

3 vehicle (as defined in section 179A(e)(2)) fueled by

4 natural gas if—

5 ‘‘(A) such vehicle—

6 ‘‘(i) is used in a trade or business by

7 the taxpayer as part of a fleet consisting of

8 at least 5 motor vehicles which are so

9 used, or

10 ‘‘(ii) consumes at least 1,500 gasoline

11 gallon equivalents of natural gas per year;

12 and

13 ‘‘(B) the original use of such vehicle com14 mences with the taxpayer.

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

16 means compressed natural gas and liquefied natural

17 gas.

18 ‘‘(e) SPECIAL RULES.—

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

20 cost otherwise taken into account under section

21 179A with respect to any property shall be reduced

22 by the amount of the credit allowed under this sec23 tion with respect to such cost.

24 ‘‘(2) CERTAIN RULES TO APPLY.—Rules similar

25 to the rules of subsection (a)(2), and paragraphs
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1 (3), (4), (5), and (6) of subsection (e), of section

2 179A shall apply for purposes of subsections (a) and

3 (b).

4 ‘‘(f) BENEFITS FOR TAX-EXEMPT ENTITIES.—In the

5 case of a tax-exempt entity—

6 ‘‘(1) section 38(c) shall not apply to any credit

7 determined under this section, and

8 ‘‘(2) the credits determined under this section

9 shall be treated for purposes of this title (other than

10 section 38, this subpart, and chapter 63) as allowed

11 under section 34 and not by section 38.

12 For purposes of this subsection, the term ‘tax-exempt en13 tity’ means an entity described in clause (i) or (ii) of sec14 tion 168(h)(2)(A).’’

15 (b) CONFORMING AMENDMENTS.—

16 (1) Subsection (b) of section 38 of such Code

17 is amended by striking ‘‘plus’’ at the end of para18 graph (11), by striking the period at the end of

19 paragraph (12) and inserting a comma, and by add20 ing at the end the following new paragraphs:

21 ‘‘(13) the natural gas vehicle property credit de22 termined under section 45D(a),

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

24 determined under section 45D(b), plus
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1 ‘‘(15) the natural gas motor fuel credit deter2 mined under section 45D(c).’’

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

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

5 amended by adding at the end the following new

6 item:

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

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

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

9 of this Act.

10 SEC. 302. EXCISE TAXATION OF LIQUEFIED NATURAL GAS.

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

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

13 as follows:

14 ‘‘(3) COMPRESSED OR LIQUEFIED NATURAL

15 GAS.—

16 ‘‘(A) IN GENERAL.—There is hereby im17 posed a tax on compressed or liquefied natural

18 gas—

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

20 lessee, or other operator of a motor vehicle

21 or motorboat for use as a fuel in such

22 motor vehicle or motorboat, or

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

24 a motor vehicle or motorboat unless there
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1 was a taxable sale of such gas under clause

2 (i).

3 The rate of the tax imposed by this paragraph

4 shall be 48.54 cents per MCF (determined at

5 standard temperature and pressure) in the case

6 of compressed natural gas and 3.54 cents per

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

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

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

10 ‘‘(other’’ and all that follows through ‘‘4081)’’ and insert11 ing ‘‘(other than liquefied natural gas, kerosene, gas oil,

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

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

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

15 of this Act.

16 SEC. 303. SHORTER DEPRECIATION RECOVERY PERIODS

17 FOR NATURAL GAS VEHICLES AND REFUEL18 ING PROPERTY.

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

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

21 the Internal Revenue Code of 1986 is amended by

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

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

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

25 clause:
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1 ‘‘(iii) any automobile, general purpose

2 truck, or bus which is fueled in whole or

3 in part by compressed natural gas or lique4 fied natural gas.’’

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

6 such Code is amended by adding at the end the fol7 lowing flush sentence:

8 ‘‘The preceding sentence shall not apply to any pas9 senger automobile described in section

10 168(e)(3)(A)(iii).’’

11 (b) REFUELING PROPERTY TREATED AS 7-YEAR

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

13 such Code is amended—

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

15 (2) by redesignating clause (ii) as clause (iii),

16 and

17 (3) by inserting after clause (i) the following

18 new clause:

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

20 refueling property (as defined in section

21 179(d)), and’’.

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

23 this section shall apply to property placed in service after

24 the date of the enactment of this Act.
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1 TITLE IV—REVISION OF

2 PURCHASE MANDATES

3 SEC. 401. STATEMENT OF POLICY.

4 It is the policy of the United States that—

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

6 and other low emission vehicles requires cooperative

7 efforts by and among fleet operators and other

8 users, fuel providers, and vehicle manufacturers;

9 (2) government mandates requiring private sec10 tor fleet purchases do not support such cooperative

11 efforts;

12 (3) the low-emission vehicle market should be

13 based on voluntary, economically sound decisions;

14 and

15 (4) market-oriented incentives can provide an

16 appropriate and effective means for developing a

17 self-sustaining market for such vehicles and fuels.

18 SEC. 402. REVISION OF MANDATE AUTHORITIES.

19 (a) REPEAL OF PRIVATE FLEET MANDATES.—Ex20 cept as provided in subsection (c), section 507 of the En21 ergy Policy Act of 1992 (42 U.S.C. 13257) is repealed.

22 (b) SUNSET OF FUEL PROVIDER MANDATE.—Sec23 tion 501(a)(1)(D) of the Energy Policy Act of 1992 (42

24 U.S.C. 13251(a)(1)(D)), relating to acquisitions for model
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1 year 1999 and thereafter, is amended by striking ‘‘and

2 thereafter’’.

3 (c) SUNSET OF STATE FLEET MANDATE.—Sub4 section (a) of this section shall apply, in the case of State

5 fleets, beginning with respect to model year 2000.

6 SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

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

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

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

10 ‘‘through 1999’’.

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

12 (42 U.S.C. 13251) is amended by adding at the end the

13 following new subsection:

14 ‘‘(e) CONVERSIONS.—Nothing in this title or the

15 amendments made by this title shall require a fleet owner

16 to acquire conversion vehicles.’’.

17 (b) SECTION 504.—Section 504(c) of the Energy Pol18 icy Act of 1992 (42 U.S.C. 13254(c)) is amended to read

19 as follows:

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

21 shall have no authority under this Act—

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

23 fueled vehicles;
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1 ‘‘(2) to specify, as applicable, the models, lines,

2 or types of, or marketing or pricing practices, poli3 cies, or strategies for, vehicles subject to this Act; or

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

5 in this title, the purchase of alternative fueled vehi6 cles. Nothing in this Act shall be construed to give

7 the Secretary authority to mandate marketing or

8 pricing practices, policies, or strategies for alter9 native fuels, or to mandate the production, delivery,

10 or purchase of such fuels.’’.

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

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

13 the end the following new subsection:

14 ‘‘(d) CONSULTATION WITH OTHER FEDERAL AGEN15 CIES.—In carrying out this section, the Secretary shall

16 consult with the Secretary of Transportation, the Adminis17 trator, and other appropriate Federal agencies.’’.

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

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

20 follows:

21 ‘‘SEC. 509. SECRETARY’S RECOMMENDATIONS TO CON22 GRESS.

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

24 recommend to Congress such measures as are necessary

25 to provide incentives for—
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1 ‘‘(1) fuel suppliers to make available to the

2 public replacement fuels, including providing for the

3 construction or availability of related fuel delivery

4 systems;

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

6 make available to the public alternative fueled vehi7 cles and to ensure the availability of necessary relat8 ed services; and

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

10 fuels,

11 to the extent necessary to achieve the goals of replacement

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

13 availability of alternative fuels and of alternative fueled

14 vehicles are consistent with each other.’’.

15 (e) SECTION 510.—Section 510 of the Energy Policy

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

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

18 (2) by striking subsection (b).

19 TITLE V—FEDERAL TRANSIT IN20 CENTIVES FOR NATURAL GAS

21 VEHICLES

22 SEC. 501. FINDING.

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

24 amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (8);

3 (2) by redesignating paragraph (9) as para4 graph (10); and

5 (3) by inserting after paragraph (8) the follow6 ing:

7 ‘‘(9) the financial assistance provided under

8 this chapter reflects the Government’s commitment

9 to increase the use of natural gas and alternative

10 fuels as transportation fuels, particularly in trans11 portation management areas seeking to increase air

12 quality; and’’.

13 SEC. 502. DEFINITIONS.

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

15 amended—

16 (1) by redesignating paragraphs (1) through

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

18 (2) by inserting before paragraph (2), as redes19 ignated by paragraph (1) of this section, the follow20 ing:

21 ‘‘(1) ‘alternative fuel’ and ‘alternative fueled ve22 hicle’ have the meanings given such terms in section

23 301 of the Energy Policy Act of 1992.’’;
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1 (3) by redesignating paragraphs (9) through

2 (14), as redesignated by paragraph (1) of this sec3 tion, as paragraphs (12) through (17), respectively;

4 (4) by inserting after paragraph (8), as redesig5 nated by paragraph (1) of this section, the following:

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

7 gas and liquified natural gas.

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

9 property or equipment necessary to dispense natural

10 gas as a vehicular fuel.

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

12 will operate on—

13 ‘‘(A) natural gas alone;

14 ‘‘(B) natural gas mixed in combination

15 with another fuel in a dual-fuel configuration;

16 or

17 ‘‘(C) natural gas or another fuel (but not

18 in combination) in a bifuel configuration.’’;

19 (5) by redesignating paragraph (17), as redesig20 nated by paragraph (3) of this section, as paragraph

21 (18); and

22 (6) by inserting after paragraph (16), as redes23 ignated by paragraph (3) of this section, the follow24 ing:
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1 ‘‘(17) ‘ULEV-certified alternative fueled vehi2 cle’ and ‘ULEV-certified alternative fueled bus’

3 mean a vehicle or bus that operates on alternative

4 fuel and has been certified by the California Air Re5 sources Board or the Environmental Protection

6 Agency as meeting the current Ultra-Low Emission

7 Vehicle standard, as established by the California

8 Air Resources Board or the Environmental Protec9 tion Agency.’’.

10 SEC. 503. FACTORS IN METROPOLITAN PLANNING.

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

12 amended by adding at the end the following:

13 ‘‘(16) the opportunities that the metropolitan

14 planning organization has to stimulate the use of

15 natural gas vehicles and ULEV-certified alternative

16 fueled vehicles and the installation of a fueling infra17 structure to support such vehicles.’’.

18 SEC. 504. RESEARCH, DEVELOPMENT, AND DEMONSTRA19 TION PROJECTS.

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

21 is amended—

22 (1) by striking ‘‘and’’ at the end of subpara23 graph (E);

24 (2) by redesignating subparagraph (F) as sub25 paragraph (G); and
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1 (3) by inserting after subparagraph (E) the fol2 lowing:

3 ‘‘(F) the relationship between environ4 mental policy and transportation policy, par5 ticularly the potential applications for natural

6 gas vehicles and ULEV-certified alternative

7 fueled vehicles in urban settings; and’’.

8 SEC. 505. ENVIRONMENTAL FACTORS RELATED TO FUND9 ING FOR BUSES.

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

11 amended by adding at the end the following:

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

13 RELATED PROPERTY AND EQUIPMENT.—A Government

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

15 involves acquiring buses powered by natural gas, or any

16 ULEV-certified alternative fueled bus, and all real prop17 erty or equipment related to the fueling thereof, shall not

18 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
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1 the ultra-low emission vehicle standard estab2 lished by the California Air Resources Board or

3 the Environmental Protection Agency.

4 ‘‘(b) REQUIREMENT TO APPLY PREFERENCE TO

5 SUBCONTRACTORS.—The Secretary of Defense shall re6 quire an entity with which the Department of Defense has

7 entered into a contract for the procurement of goods or

8 services to give a preference, in entering into subcontracts

9 to carry out such contract, to entities that use, to the max10 imum extent practicable, motor vehicles described in sub11 section (a).’’.

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

13 chapter is amended by inserting after the item relating

14 to section 2398 the following new item:

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

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

16 the Federal Property and Administrative Services Act of

17 1949 (41 U.S.C. 251 et seq.) is amended by adding at

18 the end the following new section:

19 ‘‘SEC. 317. PREFERENCE FOR CONTRACTORS USING NATU20 RAL GAS VEHICLES.

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

22 into contracts with private entities for the procurement of

23 goods or services, an executive agency shall give a pref24 erence to entities that use, to the maximum extent prac25 ticable, either of the following:
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1 ‘‘(1) Motor vehicles that operate on natural gas.

2 ‘‘(2) Motor vehicles that—

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

4 in section 301 of the Energy Policy Act of 1992

5 (42 U.S.C. 13211); and

6 ‘‘(B) are certified by the California Air Re7 sources Board or by the Administrator of the

8 Environmental Protection Agency as meeting

9 the ultra-low emission vehicle standard estab10 lished by the California Air Resources Board or

11 the Environmental Protection Agency.

12 ‘‘(b) REQUIREMENT OF APPLY PREFERENCE TO

13 SUBCONTRACTORS.—The head of an executive agency

14 shall require an entity with which the executive agency has

15 entered into a contract for the procurement of goods or

16 services to give a preference, in entering into subcontracts

17 to carry out such contract, to entities that use, to the max18 imum extent practicable, motor vehicles described in sub19 section (a).’’.

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

21 amended by inserting after the item relating to section

22 316 the following new item:

‘‘317. Preference for contractors using natural gas vehicles.’’.
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1 (c) EFFECTIVE DATE.—Section 2398a of title 10,

2 United States Code, as added by subsection (a), and sec3 tion 317 of the Federal Property and Administrative Serv4 ices Act of 1949, as added by subsection (b), shall apply

5 with respect to contracts entered into after the expiration

6 of the 60-day period beginning on the date of the enact7 ment of this Act.

8 TITLE VII—RESEARCH, DEVEL9 OPMENT, AND DEMONSTRA10 TION INCENTIVES FOR NATU11 RAL GAS VEHICLES

12 SEC. 701. NATURAL GAS VEHICLE RESEARCH, DEVELOP13 MENT, AND DEMONSTRATION PROJECTS AT

14 THE DEPARTMENT OF ENERGY.

15 (a) NATURAL GAS VEHICLE RESEARCH, DEVELOP16 MENT, AND DEMONSTRATION PROGRAM.—(1) The Sec17 retary of Energy shall conduct a 5-year program, in ac18 cordance with sections 3001 and 3002 of the Energy Pol19 icy Act of 1992, of natural gas vehicle research, develop20 ment, and demonstration.

21 (2) The natural gas vehicle program conducted pur22 suant to this section shall include activities relating to—

23 (A) onboard storage of both compressed natural

24 gas and liquified natural gas for vehicular use, in25 cluding high-strength materials, low-cost carbon
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1 fiber, low-cost manufacturing processes, and ad2 vanced concepts;

3 (B) engine design for cycle optimization for me4 dium-duty and heavy-duty vehicles in—

5 (i) compression ignition and dual-fuel cy6 cles; and

7 (ii) exhaust after treatment; and

8 (C) fuel dispensing for low-cost metering, tech9 nical and cryogenic fueling devices, and fuel condi10 tioning.

11 (b) COOPERATION WITH INDUSTRY.—In developing

12 the program pursuant to this section, the Secretary of En13 ergy shall consult with the natural gas vehicle industry

14 to ensure cooperation between the public sector and the

15 private sector.

16 TITLE VIII—MINIMUM DISTANCE

17 SEC. 801. MINIMUM DISTANCE.

18 Section 32901(c)(2) of title 49, United States Code,

19 is amended by adding at the end the following new sub20 paragraph;

21 ‘‘(D) Notwithstanding subparagraphs (A) and (B), in

22 the case of dual fueled automobiles capable of operating

23 on natural gas, the minimum driving range shall be 100

24 miles.’’.

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