A bill to improve air quality by expanding the use of low-emission natural gas as a transportation fuel.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Drive America on Natural Gas Act of 
2008''.

SEC. 2. RENEWABLE FUEL PROGRAM.

    (a) Definition of Renewable Fuel.--Effective January 1, 2009, 
section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)) is 
amended by striking subparagraph (J) and inserting the following:
                    ``(J) Renewable fuel.--
                            ``(i) In general.--The term `renewable 
                        fuel' means fuel that--
                                    ``(I) is produced from renewable 
                                biomass; and
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in 
                                a transportation fuel.
                            ``(ii) Renewable fuel standard.--For 
                        purposes of the renewable fuel standard under 
                        paragraph (2), the term `renewable fuel' 
                        includes renewable and nonrenewable natural 
                        gas, including compressed natural and liquefied 
                        natural gas when used as transportation 
                        fuel.''.
    (b) Credit Program.--Effective January 1, 2009, section 
211(o)(5)(A) of the Clean Air Act (42 U.S.C. 7545(o)(5)(A)) is 
amended--
            (1) in clause (ii), by striking ``and'' at the end;
            (2) in clause (iii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(iv) for the generation of an appropriate 
                        quantity of credits for renewable and 
                        nonrenewable natural gas, including compressed 
                        natural and liquefied natural gas when used as 
                        a transportation fuel.''.

SEC. 3. NEW QUALIFIED ALTERNATIVE FUEL MOTOR VEHICLE CREDIT ALLOWED FOR 
              DUAL FUELED AUTOMOBILES.

    (a) In General.--Clause (i) of section 30B(e)(4)(A) of the Internal 
Revenue Code of 1986 (relating to definition of new qualified 
alternative fuel motor vehicle) is amended to read as follows:
                            ``(i) which--
                                    ``(I) is only capable of operating 
                                on an alternative fuel, or
                                    ``(II) is capable of operating on 
                                an alternative fuel and gasoline or 
                                diesel fuel,''.
    (b) Conforming Amendment.--Section 30B(e) of the Internal Revenue 
Code of 1986 is amended by striking paragraph (5).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 4. NATURAL GAS VEHICLE RESEARCH, DEVELOPMENT, AND DEMONSTRATION 
              PROJECTS.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Natural gas.--The term ``natural gas'' means compressed 
        natural gas, liquefied natural gas, biomethane, and mixtures of 
        hydrogen and methane or natural gas.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Program.--The Secretary, in coordination with the 
Administrator, shall conduct a program of natural gas vehicle research, 
development, and demonstration.
    (c) Purpose.--The program under this section shall focus on--
            (1) the continued improvement and development of new, 
        cleaner, more efficient light-duty, medium-duty, and heavy-duty 
        natural gas vehicle engines;
            (2) the integration of those engines into light-duty, 
        medium-duty, and heavy-duty natural gas vehicles for onroad and 
        offroad applications;
            (3) expanding product availability by assisting 
        manufacturers with the certification of the engines or vehicles 
        described in paragraph (1) or (2) to Federal or California 
        certification requirements and in-use emission standards;
            (4) the demonstration and proper operation and use of the 
        vehicles described in paragraph (2) under all operating 
        conditions;
            (5) the development and improvement of nationally 
        recognized codes and standards for the continued safe operation 
        of natural gas vehicles and components;
            (6) improvement in the reliability and efficiency of 
        natural gas fueling station infrastructure;
            (7) the certification of natural gas fueling station 
        infrastructure to nationally recognized and industry safety 
        standards;
            (8) the improvement in the reliability and efficiency of 
        onboard natural gas fuel storage systems;
            (9) the development of new natural gas fuel storage 
        materials;
            (10) the certification of onboard natural gas fuel storage 
        systems to nationally recognized and industry safety standards; 
        and
            (11) the use of natural gas engines in hybrid vehicles.
    (d) Certification of Conversion Systems.--The Secretary shall 
coordinate with the Administrator on issues related to streamlining the 
certification of natural gas conversion systems to the appropriate 
Federal certification requirements and in-use emission standards.
    (e) Cooperation and Coordination With Industry.--In developing and 
carrying out the program under this section, the Secretary shall 
coordinate with the natural gas vehicle industry to ensure cooperation 
between the public and the private sector.
    (f) Conduct of Program.--The program under this section shall be 
conducted in accordance with sections 3001 and 3002 of the Energy 
Policy Act of 1992 (42 U.S.C. 13541, 13542).
    (g) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the 
implementation of this section.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section.

SEC. 5. DEVELOPMENT OF LOW-EMISSION NATURAL GAS TRANSPORTATION-FUELED 
              VEHICLES.

    Part C of title II of the Clean Air Act (42 U.S.C. 7581 et seq.) is 
amended by adding at the end the following:

``SEC. 251. DEVELOPMENT OF LOW-EMISSION NATURAL GAS TRANSPORTATION-
              FUELED VEHICLES.

    ``(a) Definitions.--In this section:
            ``(1) Alternative fuel.--The term `alternative fuel' means 
        compressed or liquid natural gas.
            ``(2) Alternative-fueled vehicle.--The term `alternative-
        fueled vehicle' means a vehicle that is manufactured or 
        converted to operate using alternative fuel.
            ``(3) Bi-fueled vehicle.--The term `bi-fueled vehicle' 
        means a vehicle that is capable of operating on gasoline or an 
        alternative fuel, but not both at the same time.
            ``(4) Convert.--The term `convert', with respect to a 
        vehicle, means to modify the engine and other applicable 
        components of the vehicle to enable the vehicle to operate 
        using an alternative fuel (including compressed natural gas).
            ``(5) OBD system.--The term `OBD system' means an on-board, 
        computer-based diagnostic system built into certain vehicles to 
        monitor the performance of certain primary engine components of 
        the vehicle (including components responsible for controlling 
        emissions).
            ``(6) Program.--The term `program' means the alternative-
        fueled vehicle development demonstration program established 
        under subsection (b).
            ``(7) Small volume manufacturer.--
                    ``(A) In general.--The term `small volume 
                manufacturer' means a manufacturer of vehicles 
                described in section 86.001-1(e) of title 40, Code of 
                Federal Regulations (or a successor regulation) that is 
                approved and certified in accordance with part 86 of 
                subchapter C of chapter I of title 40, Code of Federal 
                Regulations (or successor regulations).
                    ``(B) Inclusion.--The term `small volume 
                manufacturer' includes a manufacturer of kits or 
                equipment used to convert vehicles.
    ``(b) Program.--
            ``(1) Establishment.--For the period of fiscal years 2009 
        through 2013, the Administrator shall establish and carry out a 
        demonstration program to assist States in facilitating the 
        development of alternative-fueled vehicles.
            ``(2) Application.--A State may participate in the program 
        by submitting to the Administrator an application at such time, 
        in such form, and containing such information as the 
        Administrator shall specify.
            ``(3) Benefits available to participating small volume 
        manufacturers.--Under the program, with respect to small volume 
        manufacturers located in States participating in the program, 
        the Administrator shall, by regulation--
                    ``(A) waive all fees applicable to small volume 
                manufacturers for the certification and conversion of 
                alternative-fueled vehicles;
                    ``(B) waive requirements for recertification of 
                kits for the conversion of vehicles in any case in 
                which, as determined by the Administrator--
                            ``(i) the kit has been previously certified 
                        for the model of vehicle to be converted; and
                            ``(ii) neither the kit nor the design and 
                        specifications of the model of vehicle to be 
                        converted have substantially changed;
                    ``(C) modify such regulatory requirements relating 
                to OBD systems as the Administrator determines to be 
                appropriate to provide flexibility to small volume 
                manufacturers in reprogramming OBD systems to be 
                compatible with the use of alternative fuel;
                    ``(D) permit small volume manufacturers to include 
                more vehicles and engines in a single engine category 
                to improve the cost-efficiency of emission testing of 
                converted vehicles;
                    ``(E) waive the liability of small volume 
                manufacturers, in the case of a bi-fueled vehicle 
                capable of operating on gasoline or compressed natural 
                gas, for the compliance of the gasoline system of the 
                bi-fueled vehicle with applicable emission 
                requirements;
                    ``(F) provide additional guidance to small volume 
                manufacturers with respect to the conversion of older 
                models of vehicles; and
                    ``(G) revise and streamline certification 
                requirements applicable to small volume manufacturers.
            ``(4) State responsibility.--As a condition of 
        participating in the program, during the period of fiscal years 
        2009 through 2013, a State shall--
                    ``(A) develop regulations for (as compared to 
                Federal requirements in effect as of the date of 
                enactment of this section) an equally effective but 
                less burdensome system of certifying and verifying 
                emissions of alternative-fueled vehicles and equipment 
                used for conversions; and
                    ``(B) not later than December 31, 2012, submit the 
                proposed regulations of the State to the Administrator 
                for review.
    ``(c) State Programs.--Upon receipt of proposed regulations of a 
State under subsection (b)(4), the Administrator shall--
            ``(1) review the regulations; and
            ``(2) if the Administrator determines that the 
        implementation of the regulations would result in (as compared 
        to Federal requirements in effect as of the date of enactment 
        of this section) an equally effective but less burdensome 
        system of certifying and verifying emissions of alternative-
        fueled vehicles and equipment used for conversions, authorize 
        the State to implement the regulations with respect to small 
        volume manufacturers in the State for the period of fiscal 
        years 2014 through 2018, subject to--
                    ``(A) the submission of annual reports to the 
                Administrator; and
                    ``(B) such periodic inspection and other oversight 
                requirements as the Administrator determines to be 
                appropriate.
    ``(d) Duration of Program.--The program and all authority under the 
program (other than the authority of the Administrator described in 
subsection (c)) shall terminate on December 31, 2013, unless the 
Administrator--
            ``(1) in consultation with the States, elects to continue 
        the program; and
            ``(2) promulgates such regulations as are necessary to 
        continue the program.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.''.

SEC. 6. NATURAL GAS CONVERSION EMISSION CERTIFICATIONS.

    Part C of title II of the Clean Air Act (42 U.S.C. 7581 et seq.) 
(as amended by section 5) is amended by adding at the end the 
following:

``SEC. 252. NATURAL GAS CONVERSION EMISSION CERTIFICATIONS.

    ``(a) In General.--The Administrator shall waive requirements for 
recertification of kits for the conversion of vehicles into vehicles 
that are powered by natural gas in any case in which, as determined by 
the Administrator--
            ``(1) the kit has been previously certified for the model 
        of vehicle to be converted; and
            ``(2) neither the kit nor the design and specifications of 
        the model of vehicle to be converted have substantially 
        changed.
    ``(b) Older Vehicles.--The Administrator shall waive emission 
certification system requirements for a vehicle that is over 10 years 
old or has over 120,000 miles that is powered by natural gas.''.

Summary: Drive America on Natural Gas Act of 2008 - Amends the Clean Air Act to: (1) redefine renewable fuel to include renewable and nonrenewable natural gas (NG), including compressed natural (CNG) and liquefied natural gas (LNG); and (2) require fuel credit program regulations to provide for generation of credits for renewable and nonrenewable natural gas.

Amends the Internal Revenue Code to allow a new qualified alternative fuel motor vehicle credit for dual fueled automobiles.

Directs the Secretary of Energy, in coordination with the Administrator of the Environmental Protection Agency (EPA), to conduct a program of natural gas vehicle research, development, and demonstration, with a particular emphasis on streamlining the certification of NG conversion systems.

Directs the EPA Administrator to: (1) establish a demonstration program to assist states in facilitating the development of alternative-fueled vehicles; and (2) waive requirements for recertification of certain kits for the conversion of vehicles to NG.