(a) There is hereby established the alternative fuels loan program for the purpose of making loans to government agencies which own and operate motor vehicles to encourage and assist them to:

(1) Purchase new alternative-motor fueled vehicles;

(2) convert existing motor vehicles which operate on gasoline and diesel fuel to operate on alternative fuels; and

(3) construct motor vehicle fueling facilities to serve alternative-fueled vehicles.

(b) The alternative-fuels loan program shall be administered by the secretary. The secretary shall adopt rules and regulations establishing procedures, criteria and conditions for making loans from the alternative-fuels government fleet loan fund and such other rules and regulations as necessary to operate the alternative-fuels loan program.