SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Biodiesel Energy 
Development Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                  TITLE I--ALTERNATIVE FUELS--GENERAL

Sec. 101. Definitions.
Sec. 102. Amendments to the Energy Policy and Conservation Act.
Sec. 103. Minimum Federal fleet requirement.
           TITLE II--ALTERNATIVE FUELS--NON-FEDERAL PROGRAMS

Sec. 201. State and local incentives programs.
Sec. 202. Alternative fuel bus program.
Sec. 203. Alternative fuel use in nonroad vehicles, engines, and marine 
                            vessels.
   TITLE III--AVAILABILITY AND USE OF REPLACEMENT FUELS, ALTERNATIVE 
                 FUELS, AND ALTERNATIVE FUELED VEHICLES

Sec. 301. Mandate for alternative fuel providers.
Sec. 302. Replacement fuel supply and demand program.
Sec. 303. Modification of goals; additional rulemaking authority.
Sec. 304. Fleet requirement program.
Sec. 305. Credits.
Sec. 306. Secretary's recommendation to Congress.

                  TITLE I--ALTERNATIVE FUELS--GENERAL

SEC. 101. DEFINITIONS.

    Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is 
amended--
            (1) in paragraph (2), by striking ``derived from biological 
        materials'' and inserting ``derived from domestically produced 
        renewable biological materials (including biodiesel) at 
        mixtures not less than 20 percent by volume'';
            (2) in paragraph (8), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) a motor vehicle (other than an automobile) or 
                marine vessel that is capable of operating on 
                alternative fuel, gasoline, or diesel fuel, or an 
                approved blend of alternative fuel and petroleum-based 
                fuel.'';
            (3) by redesignating paragraphs (11) through (14) as 
        paragraphs (12), (14), (15), and (16), respectively;
            (4) by inserting after paragraph (10) the following:
            ``(11) the term `heavy duty motor vehicle' means a motor 
        vehicle or marine vessel that is greater than 8,500 pounds 
        gross vehicle weight rating;'';
            (5) by inserting after paragraph (12) (as redesignated by 
        paragraph (3)) the following:
            ``(13) the term `marine vessel' means a motorized 
        watercraft or other artificial contrivance used as a means of 
        transportation primarily on the navigable waters of the United 
        States;'';
            (6) in paragraph (15) (as redesignated by paragraph (3)), 
        by striking ``biological materials'' and inserting 
        ``domestically produced renewable biological materials 
        (including biodiesel)''.

SEC. 102. AMENDMENTS TO THE ENERGY POLICY AND CONSERVATION ACT.

    Section 400AA of the Energy Policy and Conservation Act (42 U.S.C. 
6374) is amended--
            (1) in the second sentence of subsection (a)(3)(B), by 
        striking ``vehicles converted to use alternative fuels may be 
        acquired if, after conversion,'' and inserting ``existing fleet 
        vehicles may be converted to use alternative fuels at the time 
        of a major vehicle overhaul or rebuild, or vehicles that have 
        been converted to use alternative fuels may be acquired, if''; 
        and
            (2) in subsection (g)--
                    (A) in paragraph (2), by striking ``derived from 
                biological materials'' and inserting ``derived from 
                domestically produced renewable biological materials 
                (including biodiesel) at mixtures not less than 20 
                percent by volume'';
                    (B) in paragraph (5), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) a motor vehicle (other than an automobile) or 
                marine vessel that is capable of operating on 
                alternative fuel, gasoline, or diesel fuel, or an 
                approved blend of alternative fuel and petroleum-based 
                fuel; and''; and
                    (C) in paragraph (6), by inserting ``or marine 
                vessel'' [Same questions as above.] after ``a 
                vehicle''.

SEC. 103. MINIMUM FEDERAL FLEET REQUIREMENT.

    Section 303 of the Energy Policy Act of 1992 (42 U.S.C. 13212) is 
amended--
            (1) by redesignating subsections (c) through (f) as 
        subsections (d) through (g), respectively; and
            (2) by inserting after subsection (b) the following:
    ``(c) Heavy Duty and Dual-Fueled Vehicle Compliance Credits.--
            ``(1) In general.--For purposes of meeting the requirements 
        of this section, the Secretary, in consultation with the 
        Administrator of General Services, if appropriate, shall permit 
        a Federal fleet to acquire 1 heavy duty alternative fueled 
        vehicle in place of 2 light duty alternative fueled vehicles.
            ``(2) Additional credits.--For purposes of this section, 
        the Secretary, in consultation with the Administrator of 
        General Services, if appropriate, shall permit a Federal fleet 
        to take an additional credit for the purchase and documented 
        use of alternative fuel used in a dual-fueled vehicle, 
        comparable conventionally-fueled motor vehicle, or marine 
        vessel.
            ``(3) Accounting.--
                    ``(A) In general.--In allowing a credit for the 
                purchase of a dual-fueled vehicle or alternative fuel, 
                the Secretary may request a Federal agency to provide 
                an accounting of the purchase.
                    ``(B) Guidelines.--The Secretary shall include any 
                request made under subparagraph (A) in the guidelines 
                required under section 308.
            ``(4) Fuel and vehicle neutrality.--The Secretary shall 
        carry out this subsection in a manner that is, to the maximum 
        extent practicable, neutral with respect to the type of fuel 
        and vehicle used.''.

                         TITLE II--ALTERNATIVE

                      FUELS--NON-FEDERAL PROGRAMS

SEC. 201. STATE AND LOCAL INCENTIVES PROGRAMS.

    (a) Establishment of Program.--Section 409(a) of the Energy Policy 
Act of 1992 (42 U.S.C. 13235(a)) is amended--
            (1) in paragraph (2)(A), by striking ``alternative fueled 
        vehicles'' and inserting ``light and heavy duty alternative 
        fueled vehicles and increasing the use of alternative fuels''; 
        and
            (2) in paragraph (3)--
                    (A) in subparagraph (B), by inserting after 
                ``introduction of'' the following: ``converted or 
                acquired light and heavy duty'';
                    (B) in subparagraph (E), by inserting after ``of 
                sales of'' the following: ``, incentives toward use of, 
                and reporting requirements relating to''; and
                    (C) in subparagraph (G)--
                            (i) by redesignating clauses (i) through 
                        (iii) as clauses (ii) through (iv), 
                        respectively; and
                            (ii) by inserting after ``cost of--'' the 
                        following:
                    ``(i) alternative fuels;''.
    (b) Federal Assistance to States.--Section 409(b) of the Energy 
Policy Act of 1992 (42 U.S.C. 13235(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(D) grants of Federal financial assistance for the 
        incremental purchase cost of alternative fuels.'';
            (2) in paragraph (2)(B), by inserting after ``be 
        introduced'' the following: ``and the volume of alternative 
        fuel likely to be consumed''; and
            (3) in paragraph (3)--
                    (A) by inserting ``alternative fuels and'' after 
                ``in procuring''; and
                    (B) by inserting ``fuels and'' after ``of such''.
    (c) General Provisions.--Section 409(c)(2)(A) of the Energy Policy 
Act of 1992 (42 U.S.C. 13235(c)(2)(A)) is amended by inserting after 
``alternative fueled vehicles in use'' the following: ``and volume of 
alternative fuel consumed''.

SEC. 202. ALTERNATIVE FUEL BUS PROGRAM.

    Section 410(c) of the Energy Policy Act of 1992 (42 U.S.C. 
13236(c)) is amended in the second sentence by striking ``and the 
conversion of school buses to dedicated vehicles'' and inserting ``the 
incremental cost of alternative fuels used in flexible fueled school 
buses, and the conversion of school buses to alternative fueled 
vehicles''.

SEC. 203. ALTERNATIVE FUEL USE IN NONROAD VEHICLES, ENGINES, AND MARINE 
              VESSELS.

    Section 412 of the Energy Policy Act of 1992 (42 U.S.C. 13238) is 
amended--
            (1) in the section heading, by striking ``and engines'' and 
        inserting ``, engines, and marine vessels'';
            (2) by striking ``vehicles and engines'' each place it 
        appears in subsections (a) and (b) and inserting ``vehicles, 
        engines, and marine vessels'';
            (3) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Nonroad Vehicles and Engines'' and inserting ``In 
                General'';
                    (B) in paragraph (1)--
                            (i) in the first sentence, by striking ``a 
                        study'' and inserting ``studies''; and
                            (ii) in the second sentence--
                                    (I) by striking ``study'' and 
                                inserting ``studies''; and
                                    (II) by striking ``2 years'' and 
                                inserting ``2, 6, and 10 years'';
                    (C) in paragraph (2)--
                            (i) by striking ``study'' each place it 
                        appears and inserting ``studies''; and
                            (ii) in the second sentence, by inserting 
                        ``or marine vessels'' after ``such vehicles''; 
                        and
                    (D) in paragraph (3)--
                            (i) by striking ``report'' and inserting 
                        ``reports''; and
                            (ii) by striking ``may'' and inserting 
                        ``shall''; and
            (4) in subsection (b)--
                    (A) in the subsection heading, by striking ``and 
                Engines'' and inserting ``, Engines, and Marine 
                Vessels''; and
                    (B) by striking ``rail transportation, vehicles 
                used at airports, vehicles or engines used for marine 
                purposes, and other vehicles or engines'' and inserting 
                ``rail and waterway transportation, vehicles used at 
                airports and seaports, vehicles or engines used for 
                marine purposes, marine vessels, and other vehicles, 
                engines, or marine vessels''.

   TITLE III--AVAILABILITY AND USE OF REPLACEMENT FUELS, ALTERNATIVE 
                 FUELS, AND ALTERNATIVE FUELED VEHICLES

SEC. 301. MANDATE FOR ALTERNATIVE FUEL PROVIDERS.

    Section 501 of the Energy Policy Act of 1992 (42 U.S.C. 13251) is 
amended--
            (1) in subsection (a)(1), by inserting ``or heavy'' after 
        ``new light''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) allow the conversion of an existing fleet vehicle 
        into a dual-fueled alternative fueled vehicle at the time of a 
        major overhaul or rebuild of the vehicle, if the original 
        equipment manufacturer's warranty continues to apply to the 
        vehicle, pursuant to an agreement between the original 
        equipment manufacturer and the person performing the 
        conversion.''.

SEC. 302. REPLACEMENT FUEL SUPPLY AND DEMAND PROGRAM.

    Section 502 of the Energy Policy Act of 1992 (42 U.S.C. 13252) is 
amended--
            (1) in the first sentence of subsection (a), by inserting 
        ``and heavy'' after ``in light''; and
            (2) in the first sentence of subsection (b), by inserting 
        after ``October 1, 1993,'' the following: ``and every 5 years 
        thereafter through October 1, 2008,''.

SEC. 303. MODIFICATION OF GOALS; ADDITIONAL RULEMAKING AUTHORITY.

    Section 504 of the Energy Policy Act of 1992 (42 U.S.C. 13254) is 
amended--
            (1) in the first sentence of subsection (a), by striking 
        ``and periodically thereafter'' and inserting ``consistent with 
        the reporting requirements of section 502(b)''; and
            (2) in subsection (c), by inserting after the first 
        sentence the following: ``Any additional regulation issued by 
        the Secretary shall be, to the maximum extent practicable, 
        neutral with respect to the type of fuel and vehicle used.''.

SEC. 304. FLEET REQUIREMENT PROGRAM.

    (a) Fleet Program Purchase Goals.--Section 507(a)(1) of the Energy 
Policy Act of 1992 (42 U.S.C. 13257(a)(1)) is amended by inserting 
``acquired as, or converted into,'' after ``shall be''.
    (b) Fleet Requirement Program.--Section 507(g) of the Energy Policy 
Act of 1992 (42 U.S.C. 13257(g)) is amended--
            (1) in paragraph (1), by inserting ``acquired as, or 
        converted into,'' after ``shall be'';
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3) the following:
            ``(4) Substitutions.--The Secretary shall, by rule, permit 
        fleets covered under this section to substitute the acquisition 
        or conversion of 1 heavy duty alternative fueled vehicle for 2 
        light duty vehicle acquisitions to meet the requirements of 
        this subsection.''.
    (c) Conversions.--Section 507(j) of the Energy Policy Act of 1992 
(42 U.S.C. 13257(j)) is amended--
            (1) by striking ``Nothing in'' and inserting the following:
            ``(1) In general.--Subject to paragraph (2), nothing in''; 
        and
            (2) by adding at the end the following:
            ``(2) Conversion into alternative fueled vehicles.--
                    ``(A) In general.--A fleet owner shall be permitted 
                to convert an existing fleet vehicle into an 
                alternative fueled vehicle, and purchase the 
                alternative fuel for the converted vehicle, for the 
                purpose of compliance with this title or an amendment 
                made by this title, if the original equipment 
                manufacturer's warranty continues to apply to the 
                vehicle, pursuant to an agreement between the original 
                equipment manufacturer and the person performing the 
                conversion.
                    ``(B) Credits.--A fleet owner shall be allowed a 
                credit for the conversion of an existing fleet vehicle 
                and the purchase of alternative fuel for the 
                vehicle.''.
    (d) Mandatory State Fleet Programs.--Section 507(o) of the Energy 
Policy Act of 1992 (42 U.S.C. 13257(o)) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``or heavy'' after ``new light''; 
                and
                    (B) by inserting ``or converted'' after 
                ``acquired''; and
            (2) in the first sentence of paragraph (2)(A)--
                    (A) by striking ``this Act'' and inserting ``the 
                Biodiesel Energy Development Act of 1997''; and
                    (B) by inserting after ``of light'' the following: 
                ``or heavy duty alternative fueled''.

SEC. 305. CREDITS.

    (a) In General.--Section 508(a) of the Energy Policy Act of 1992 
(42 U.S.C. 13258(a)) is amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
            ``(1) Additional alternative fueled vehicles.--The 
        Secretary''; and
            (2) by adding at the end the following:
            ``(2) Alternative fuel.--The Secretary shall allocate a 
        credit to a fleet or covered person that acquires a volume of 
        alternative fuel equal to the estimated need for 1 year for any 
        dual-fueled vehicle acquired or converted by the fleet or 
        covered person as required under this title.''.
    (b) Allocation.--Section 508(b) of the Energy Policy Act of 1992 
(42 U.S.C. 13258(b)) is amended--
            (1) by striking ``In allocating credits under subsection 
        (a),'' and inserting the following:
            ``(1) Additional alternative fueled vehicles.--In 
        allocating credits under subsection (a)(1),''; and
            (2) by adding at the end the following:
            ``(2) Dual-fueled vehicles; alternative fuel.--In 
        allocating credits under subsection (a)(2), the Secretary shall 
        allocate 2 credits to a fleet or covered person for acquiring 
        or converting a dual-fueled vehicle and acquiring a volume of 
        alternative fuel equal to the estimated need for 1 year for any 
        dual-fueled vehicle if the dual-fueled vehicle acquired is in 
        excess of the number that the fleet or covered person is 
        required to acquire or is acquired before the date that the 
        fleet or covered person is required to acquire the number under 
        this title.''.

SEC. 306. SECRETARY'S RECOMMENDATION TO CONGRESS.

    Section 509(a) of the Energy Policy Act of 1992 (42 U.S.C. 
13259(a)) is amended--
            (1) in paragraph (1), by inserting before the semicolon at 
        the end the following: ``and exempting replacement fuels from 
        taxes levied on non-replacement fuels''; and
            (2) in paragraph (2)--
                    (A) by inserting ``and converters'' after 
                ``suppliers''; and
                    (B) by inserting before the semicolon the 
                following: ``, including the conversion and warranty of 
                motor vehicles into alternative fueled vehicles''.
TABLE OF CONTENTS: 
     Title I:  Alternative Fuels - General 
     Title II:  Alternative Fuels - Non-Federal Programs 
     Title III:  Availability and Use of Replacement Fuels, 
          Alternative Fuels, and Alternative Fueled Vehicles 
Biodiesel Energy Development Act of 1997 - 
Title I:  Alternative Fuels - General
 - Amends the Energy Policy Act of 1992 to modify definitions relating to alternative fuels, dual-fueled vehicles, heavy duty motor vehicles, and marine vessels. 
Amends the Energy Policy and Conservation Act with respect to alternative fuel use by light duty Federal vehicles to provide that if such vehicles are not acquired from original equipment manufacturers, existing fleet vehicles may be converted to use alternative fuels at the time of a major vehicle overhaul or rebuild. 
Amends the Energy Policy Act of 1992 to require the Secretary of Energy (Secretary), if appropriate, to permit a Federal fleet to:  (1) acquire one heavy duty alternative fueled vehicle in place of two light duty alternative fueled vehicles; and (2) take an additional credit for the purchase and documented use of alternative fuel used in a dual-fueled vehicle, comparable conventionally-fueled motor vehicle, or marine vessel. 
Title II:  Alternative Fuels - Non-Federal Programs
 - Requires State and local alternative fuel incentives programs to include the goal of introducing substantial numbers of light and heavy duty alternative fuels vehicles and increasing the use of alternative fuels. Conditions State eligibility for Federal assistance upon inclusion in each State plan of an examination of the introduction of converted or acquired light and heavy duty alternative fueled vehicles in State-owned or operated motor vehicle fleets. 
(Sec. 201) Authorizes the Secretary to provide, upon State request, Federal financial assistance grants for the incremental purchase cost of alternative fuels.  Directs the Secretary to report annually to the President and the Congress on the volume of alternative fuel consumed. 
(Sec. 202) Authorizes the Secretary of Transportation to provide financial assistance to States and political subdivisions for the incremental cost of alternative fuels used in flexible fueled school buses and school bus conversions to alternative fueled vehicles. 
(Sec. 203) Requires the Secretary to study and report to Congress on alternative fuel use in marine vessels. 
Title III:  Availability and Use of Replacement Fuels, Alternative Fuels, and Alternative Fueled Vehicles
 - Modifies the mandate for alternative fuel providers to include regulation of heavy duty trucks. 
(Sec. 301) Cites circumstances under which the Secretary may allow the conversion of an existing fleet vehicle into a dual-fueled alternative fueled vehicle at the time of a major vehicle overhaul or rebuild. 
(Sec. 302) Directs the Secretary to:  (1) include heavy duty motor vehicles in the program to promote the development and use in light duty motor vehicles of domestic replacement fuels; and (2) review every five years a development plan and production goals for replacement fuel supply and demand. 
(Sec. 304) Modifies the fleet program purchase goals to require that specified percentages of new light duty motor vehicles acquired in each model year be acquired as, or converted into, alternative fueled vehicles. 
Modifies the fleet requirement program to direct the Secretary to permit fleets to substitute the acquisition or conversion of one heavy duty alternative fueled vehicle for two light duty vehicle acquisitions to meet program requirements. 
Permits a fleet owner to convert an existing fleet vehicle into an alternative fueled vehicle, and purchase the fuel for such vehicle for compliance purposes, if the original equipment manufacturer's warranty continues to apply to the vehicle.  Allows a fleet owner a credit for such conversion. 
(Sec. 305) Instructs the Secretary to allocate a credit to a fleet or covered person that acquires a volume of alternative fuel equal to the estimated need for one year for any dual-fueled vehicle acquired or converted under this Act.  Sets forth a credit allocation scheme for dual-fueled vehicles and alternative fuel. 
(Sec. 306) Requires the Secretary to submit to the Congress recommended requirements for exempting replacement fuels from taxes levied on non-replacement fuels if the Secretary notifies the Congress that a fleet requirement program is not necessary.
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