Alternative Fuel Vehicle Development Act - Creates incentives for the manufacture of dual-fueled automobiles that use alternative fuels other than methanol, denatured ethanol, and other alcohols (non-alcohol, dual-fueled automobiles).
Removes the cap on credits under the Corporate Average Fuel Economy (CAFE) program for non-alcohol, dual-fueled automobiles. (The cap on CAFE credits limits the total increase of a manufacturer's average fuel economy attributable to dual-fueled automobiles.)
Reduces the minimum driving range for non-alcohol, dual-fueled automobiles. Disallows any petition to lower the driving range below 150 miles for those automobiles.
Revises the formula the Administrator of the Environmental Protection Agency (EPA) uses to calculate fuel economy for dual-fueled automobiles operating with gaseous fuel, such as natural gas or hydrogen. Requires the EPA to apply utility factors based on the driving range for such automobiles. Allows the EPA to use a different methodology to calculate the fuel economy for dual-fueled, electric automobiles.
Makes permanent the state's authority to exempt alternative fuel vehicles from high occupancy vehicle (HOV) lane restrictions. Makes eligible only those alternative fuel vehicles operating solely on alternative fuel, including electric vehicles.
Requires the Secretary of Energy (DOE) to report on incentives and financing tools to develop public compressed natural gas fueling stations.