Requirements for Determining Assigned Deterioration Factors for Alternative Fuel Vehicles, Amendments to Labelling Requirements for Inherently Low-Emission Vehicles, and Related Provisions

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86 and 88

[AMS-FRL-5347-3]

RIN 2060-AF87

Requirements for Determining Assigned Deterioration Factors for

Alternative Fuel Vehicles, Amendments to Labelling Requirements for

Inherently Low-Emission Vehicles, and Related Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule (DFRM).

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SUMMARY: This rulemaking promulgates actions to clarify and streamline

existing regulations for certifiers and purchasers of clean-fuel and/or

alternative fuel vehicles. This rule reduces the regulatory burden for

industry, and it is highly accommodating to their concerns. To

temporarily reduce the certification burden of the emerging industry of

aftermarket conversions of alternative fuel vehicles, EPA will take

action in this rule that will provide flexibility in the regulations

for the determination of assigned deterioration factors for alternative

fuel vehicles.

To encourage the production of Inherently Low-Emission Vehicles

(ILEVs), this rule also promulgates an amendment to allow additional

options for external ILEV label dimensions. Also in this rule, EPA will

amend two California Pilot Program (CPP) requirements: the method for

determining a manufacturer's clean-fuel vehicle (CFV) sales quota and

the method for administering CPP credits. This amendment to the method

of administering credits will reduce a manufacturer's reporting

requirements by a factor of four. Finally, this rule includes several

additional technical amendments to the regulations issued under Clean

Fuel Fleet Program and California Pilot Program final rules.

DATES: This rule is effective March 4, 1996 unless notice is received

by February 2, 1996 that adverse or critical comments will be submitted

on a specific element of this rule. EPA will publish a timely document

in the Federal Register withdrawing that portion of the rule for which

adverse comments were received.

ADDRESSES: Interested parties may submit written comments in response

to this rule (in duplicate if possible) to Public Docket Nos. A-92-30

and A-92-14 for alternative fuel vehicle provisions, Public Docket No.

A-92-30 for ILEV and Clean Fuel Fleet Program provisions, and Public

Docket No. A-92-69 for California Pilot Program provisions, at: Air

Docket Section, U.S. Environmental Protection Agency, Attention: Docket

Nos. A-92-30, A-92-14, or A-92-69, First Floor, Waterside Mall, Room M-

1500, 401 M Street SW., Washington, DC 20460. A copy of the comments

should also be sent to Mr. Bryan Manning (SRPB-12), U.S. EPA,

Regulation Development and Support Division, 2565 Plymouth Road, Ann

Arbor, MI 48105.

Materials relevant to this rule have been placed in Docket Nos. A-

92-30 and A-92-14 or A-92-69 by EPA. The docket is located at the above

address and may be inspected from 8 a.m. to 5:30 p.m. on weekdays. EPA

may charge a reasonable fee for copying docket materials.

A copy of this action is available through the Technology Transfer

Network Bulletin Board System (TTNBBS) under OMS, Rulemaking and

Reporting, Alternative Fuels, Clean Fuel Fleets. TTNBBS is available 24

hours a day, 7 days a week except Monday morning from 8-12 EST, when

the system is down for maintenance and backup. For help in accessing

the system, call the systems operator at 919-541-5384 in Research

Triangle Park, North Carolina, during normal business hours EST.

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FOR FURTHER INFORMATION CONTACT: Mr. Bryan Manning (SRPB-12), U.S. EPA,

Regulation Development and Support Division, 2565 Plymouth Road, Ann

Arbor, MI 48105, Telephone: (313) 741-7832; FAX: 313-741-7816.

SUPPLEMENTARY INFORMATION: Because EPA considers this action to be

noncontroversial, we are finalizing it without prior proposal. The

action will become effective March 4, 1996 unless adverse comments are

received by February 2, 1996. If EPA receives adverse comments, only

the affected portions of the direct final rule will be withdrawn and

all public comments received will be addressed in a subsequent final

rule based on the proposed rule (please see proposed rule entitled,

``Sales Volume Limit Provisions for Small-Volume Manufacturers

Certification of Clean-Fuel and Conventional Vehicle Conversions and

Related Provisions,'' published simultaneously in the ``Proposed

Rules'' section of this Federal Register).

I. Description of Action

The alternative fuel vehicle industry is likely to expand

considerably over the next several years in response to Clean Air Act

(CAA), the Energy Policy Act, and other alternative fuel fleet and

vehicle programs at the state and local levels. Nevertheless, EPA

believes alternative fuel vehicles will still have limited sales in

comparison to conventional vehicles. Thus, due to this potential

inequity in sales, EPA believes it may be difficult for aftermarket

converters of alternative fuel vehicles to recover their certification

cost over the next several years. Since EPA encourages the production

of certified alternative fuel vehicles for air quality purposes, EPA

believes it will be wise to temporarily reduce the certification burden

for aftermarket converters of alternate fuel vehicles as described

below.

A. Flexibility in Certification Procedure for Determining Deterioration

Factors

As is shown in 40 CFR 86.094-14, the Small-Volume Manufacturers

(SVM) Certification Program exempts entities seeking a Certificate of

Conformity with total annual vehicle/engine sales less than 10,000 from

EPA's full certification program. Specifically, the SVM provisions

relieve such entities from some elements otherwise required to

demonstrate the durability of emissions over the life of the vehicle.

Instead of accumulating mileage on actual prototype vehicles, the SVM

program in some cases permits the use of EPA-assigned values for

emission deterioration. This can be of significant economic benefit to

entities manufacturing or converting relatively few vehicles. The

standard protocol EPA uses to assign deterioration factors is described

in EPA Advisory Circular No. 51-C.

Currently, small volume manufacturers with aggregated sales of less

than 301 vehicles per year or without durability data may use assigned

deterioration factors of the 70th percentile deterioration factors from

industry-wide data based on previously completed durability data

vehicles. In addition, manufacturers with aggregated sales from 301 to

9,999 may calculate and use assigned deterioration factors, but these

assigned deterioration factors must be no less than either the 70th

percentile or the average of all the manufacturer's deterioration

factor data (whichever is less). (See 40 CFR 86.094-14(c)(7)(i)(C)).

However, since alternative fuel vehicles are an emerging industry,

manufacturers of these vehicles and EPA currently have an extremely

limited database from which to calculate assigned deterioration

factors. According to current EPA regulations, many small-volume

manufacturers of alternative fuel vehicles would be required to

determine deterioration factors by conducting full useful-life tests

since there is an insufficient database of previously-certified

vehicles on which to base deterioration factors.

To enable certifiers of alternative fuel vehicles to avoid the

burden of full certification testing for the economic reasons discussed

above and to support the development of alternative fuel vehicle

technology, EPA believes it is wise to provide flexibility in the

regulations for the determination of assigned deterioration factors for

alternative fuel vehicles. Thus, EPA will permit manufacturers to use

assigned deterioration factors that the Administrator determines by

alternative methods if no deterioration factor data (either the

manufacturer's or industry-wide deterioration factor data) are

available, as detailed in section 86.094-14(a)(2) of the regulations

associated with today's rule. Following promulgation of this provision,

EPA expects to issue guidance describing the specific alternative

methods used in determining assigned deterioration factors for gaseous-

fueled vehicles through model year 2000.1

\1\ The assigned deterioration factors for gaseous-fueled

vehicles and the specific methods used to determine these factors

are expected to be specified in a ``Dear Manufacturer'' letter

(advisory letter) that would be available in docket A-92-14 and A-

92-30 and on TTNBBS.

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B. Amendments to the Required Dimensions of Inherently Low-Emission

Vehicle (ILEV) Exterior Labels

In the regulations for the Clean Fuel Fleet (CFF) Credit Program

final rule, EPA specified size and shape requirements for ILEV exterior

identification labels. The manufacturer or dealer of an ILEV is

required to attach one label on the rear of the vehicle and one on each

of two sides of the vehicle if requested by a qualifying fleet

purchaser. In February 1995, Ford commented 2 that the required

dimensions for the rear ILEV labels are inappropriate for certain

vehicle models since their vehicle body design makes the placement of

such labels on these vehicles difficult or impossible. Ford also stated

that safety requirements for lighting and bumpers affect the vehicle

body design; in addition, for natural gas vehicles, a separate label is

required on the lower right rear of the vehicle by the National Fire

Protection Association Safety Standard 52. In April 1995 Ford suggested

a much smaller alternative ILEV label design for such vehicle models,

which American Automobile Manufacturer's Association (AAMA) agreed to

in May 1995.3 Ford also suggested that the problem of reduced

space on the rear of passenger cars also exists for the side of

vehicles since fleet advertisements often take up much of the space

available on the side of the vehicle.

\2\ Ford Motor Company, Comments on Reconsideration of ILEV

Labelling Requirements, letter from Kelly M. Brown to Margo T. Oge

of the U.S. Environmental Protection Agency, February 2, 1995.

\3\ Ford Motor Company, ``ILEV Labels'', Facsimile from Sarah

Rudy to Bryan Manning of the U.S. Environmental Protection Agency,

April 21, 1995.

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As indicated in the preamble for the Clean Fuel Fleet Credit

Program final rule, EPA intends for ILEVs to be specially and clearly

identified since properly labeled ILEVs may be exempt from

transportation control measure (TCM) requirements, including high-

occupancy vehicle (HOV) lane restrictions. EPA expected ILEVs to look

much like conventional vehicles, and thus, the Agency intended for

ILEVs to have special labels to clearly indicate to law enforcement

officers, as well as the general public, that these vehicles are not

violating TCM ordinances.

EPA believes that the distinctive design and shape of AAMA's

suggested ILEV label would be consistent with EPA's intent to have

ILEVs clearly identified by law enforcement officials, as well as the

general public. At the time the CFF Credits/ILEV rule was finalized,

EPA was unaware of any vehicle models that would have a conflict with

the ILEV

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labeling requirements. Since EPA encourages the production of ILEVs for

air quality purposes, EPA will amend the ILEV label regulations in a

manner similar to that suggested by AAMA in order to provide additional

flexibility for ILEV manufacturers, thus reducing some of the

certification burden. To meet industry's vehicle body space concerns

while maintaining a label that is clearly identifiable, EPA will

provide new optional ILEV labels of smaller dimensions. Specifically,

for the sides and rear of an ILEV, EPA will provide an optional ILEV

label of smaller dimensions than the existing primary ILEV label and in

the distinctive shape of a truncated circle, as specified in

88.312(a)(1) of the regulations in today's rule.

For the rear of an ILEV, existing regulations provide an option to

choose a smaller rectangular label, if the larger primary (side)

rectangular label cannot be attached to the rear of an ILEV. Today's

rule will provide two optional rear labels which could be chosen if

neither of the primary labels described above and in section

88.312(a)(1) of the regulations cannot be attached to the rear of an

ILEV. One of these rear label options is the existing smaller

rectangular label (see section 88.312(c)(2)(ii)(A) of the regulations

in today's rule), and the other option is a smaller version of the

truncated circular label described above, as detailed in section

88.312(c)(2)(ii)(B) of the regulations associated with today's rule.

C. Method for Determining Each Manufacturer's CFV Sales Requirement

Under the Federal California Pilot Program

The California Pilot Program requires that California sales figures

from two model years earlier be used to calculate required CFV sales

shares (see California Pilot Test Program (CPP) final rule, 59 FR

50066, September 30, 1994). In the proposal for the rulemaking (58 FR

34727, June 29, 1993), EPA requested comment as to whether a

manufacturer's share of required CFV sales should be calculated based

on sales in the previous model year or sales two model years prior. No

comments were received from manufacturers. EPA decided to use model

year (MY) sales data from two years prior rather than from the previous

model year to provide manufacturers with more time to plan their CFV

production.

However, after the CPP rule was finalized, the AAMA notified EPA of

their view that basing the calculation on data from two years prior is

not practical.4 According to AAMA, this is because the production

volumes would not be established early enough to allow auto

manufacturers sufficient planning time to comply with the CFV sales

requirements in the California Pilot Program. AAMA suggested that at

least a three-year lead time is needed for the completion of the annual

production reports, EPA calculation of the manufacturer total sales,

and subsequent certification strategy or sales planning by the

manufacturers. More specifically, AAMA suggested that a manufacturer's

share of CFV sales be the average of two consecutive years based on

data from model years three and four years earlier than the model year

in question. AAMA believes a two-year average would help level out any

fluctuations in the market.

\4\ American Automobile Manufacturers Association (AAMA),

Recommendation on Determination of Manufacturer Quotas for the

California Pilot Test Program, Letter from Marcel L. Halberstadt to

Tad Wysor of the U.S. Environmental Protection Agency, February 17,

1995.

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EPA has considered these comments and agrees that using data from

the model year two years prior to the year in question does not provide

manufacturers enough time to adequately plan their production, since

production for the model year in question could be well underway before

sales data is available for production planning. (Production under a

certificate may begin on January 2 of the calendar year prior to the

model year of the certificate and may continue through December 31 of

the certification model year.)

Thus, EPA will require that the average California sales figures

from three and four model years earlier than the current model year be

used by each manufacturer to calculate their required CFV sales share.

For example, for the 1997 model year, the average of sales figures from

1993 and 1994 model years would be used to calculate the CFV sales

share. This change will have no impact on the overall number of CFVs

sold in California; the allocation of those vehicles among

manufacturers may change slightly. This change will also reduce the

regulatory burden for manufacturers, and EPA believes it is highly

accommodating to manufacturers considering that manufacturers did not

comment on the method proposed.

D. Reporting Requirements for the Credit Program of the California

Pilot Test Program

In the information collection request 5 for the Credit Program

for California Pilot Test Program Final Rule (57 FR 60038, December 17,

1992), EPA had requested quarterly reporting of credit use and balance

statements to administer the credit program. However, EPA has

reevaluated this request and does not believe quarterly reporting is a

necessary requirement for administering the CPP credit program. The

Agency does not expect the volume or frequency of credit transactions

to be substantial enough so as to require such frequent monitoring. EPA

now believes that annual reports from the manufacturers of credit use

and balances will be sufficient for EPA to adequately administer and

enforce the CPP credit program and verify the proper use of traded CPP

credits. Thus, EPA will require annual reporting of credit use and

balances for the CPP credit program. (See section 88.205-94 (d)(1) and

(d)(3)(iii) of the regulations associated with today's rule for further

detail.) This change will reduce the manufacturer reporting burden by a

factor of four, and thus, EPA believes it is highly accommodating to

manufacturers.

\5\ U.S. Environmental Protection Agency, Office of Mobile

Sources, Supporting Statement for Information Collection Request--

California Pilot Test Program: Vehicle Credit Program, May 1991.

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E. Technical Amendments to CFV Emission Standards Rulemaking and CFF

and CPP Credit Program Rulemakings

1. Redesignation of Paragraph Specifying Methane Analyzer Method Within

Description of Exhaust Analytical System

In the regulations for the Clean-Fuel Vehicle Emission Standards

final rulemaking (59 FR 50042, September 30, 1994), the specifications

for the measurement of methane from heavy-duty exhaust samples,

paragraph (b)(2)(iii) of section 86.1311-94 (``Exhaust gas analytical

system; CVS bag sample''), were incorrectly designated as a sub-

paragraph of paragraph (b)(2), which contains the specifications for

the measurement of carbon monoxide from heavy-duty exhaust samples.

Thus, in today's action, EPA will redesignate paragraph (b)(2)(iii) as

paragraph (b)(3) in section 86.1311-94.

2. Clarification of Applicable Test Procedures for CFV Exhaust

Standards for Light-duty Vehicles and Light-duty Trucks

In paragraph (k) of section 88.104-94 of the regulations for the

Clean-Fuel Vehicle Standards final rulemaking, EPA specifies that CFV

tailpipe emission standards for light-duty vehicles and light-duty

trucks shall

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comply with the following requirement: ``* * * standards in this

paragraph shall be administered and enforced in accordance with the

California Regulatory Requirements * * *.'' However, in paragraph (l)

of section 88.104-94 EPA incorrectly specified that CFV standards for

light-duty vehicles and light-duty trucks shall be ``* * * tested in

accordance with test procedures set forth in 40 CFR part 86 * * *.''

(In this same paragraph, EPA correctly specified that NMOG emissions

are to be measured in accordance with the California Regulatory

Requirements which were incorporated by reference in paragraph (k) of

the same section.) Thus, EPA wishes to clarify that all CFV standards

set forth in section 88.104-94 for light-duty vehicles and light-duty

trucks shall be administered and enforced in accordance with California

requirements by deleting paragraph (l) of section 88.104-94.

3. Corrections to Specifications for Emission Standards for Inherently

Low-Emission Vehicle (ILEV)

In the regulations for the Clean-Fuel Vehicle final rulemaking, EPA

specified in paragraph (c) of section 88.311-93 that exhaust emissions

for ILEVs in light-duty vehicle and light-duty truck classes ``* * *

shall be measured in accordance with the test procedures specified in

Sec. 88.104(l).'' As mentioned above in section I.E.2., EPA is deleting

paragraph (l) in section 88.104-94. Thus, EPA today wishes to clarify

that exhaust emissions for ILEVs in light-duty vehicle and light-duty

truck classes shall be measured in accordance with test procedures

specified in section 88.104-94(k) (California Regulatory Requirements).

Thus, section 88.311-93(c) will be amended accordingly.

For heavy-duty ILEVs, EPA incorrectly specified in section 88.311-

93(d) that exhaust emissions ``* * * shall be measured in accordance

with the test procedures specified in Sec. 88.105(d).'' However,

paragraph (d) specifies only the exhaust standards but not the exhaust

test procedures for heavy-duty ILEVs. The exhaust emission test

procedures for ILEVs are specified in Sec. 88.105(e). Thus, EPA today

revises this section to require that the exhaust emissions for heavy-

duty ILEVs be measured in accordance with the test procedures specified

in Sec. 88.105(e).

Further, in paragraph (d) of section 88.311-93, the requirements

that heavy-duty (HD) ILEVs ``* * * have exhaust emissions with combined

non-methane hydrocarbon and oxides of nitrogen * * * which do not

exceed the exhaust emission standards * * * in Sec. 88.105'' may be

misleading. Not only are HD ILEVs required to meet exhaust emission

standards in section 88.105(d) for combined non-methane hydrocarbon and

oxides of nitrogen emissions, but HD ILEVs are also required to meet

exhaust emission standards in section 88.105(d) for carbon monoxide,

particulate matter, and formaldehyde emissions. Thus, EPA wishes to

clarify that HD ILEVs shall have exhaust emissions which do not exceed

any of the exhaust emission standards specified in section 88.105(d).

4. Correction to Clean Fuel Fleet Credit Table Applying When a Fleet

Purchases More Clean-Fuel Vehicles Than Required

Due to an editorial error, in Table C94-1.1 of the regulations for

the Clean Fuel Fleet Credit Program final rule (58 FR 11888, March 1,

1993) and the CFV Emission Standards final rule, the two vehicle-

equivalent credits for ULEVs in the two heavy light-duty truck (HLDT)

classes greater than 3,750 pounds ALVW were incorrectly specified as

1.29 and 1.47 respectively. For Table C94-1.1, EPA today corrects these

values to 1.26 and 1.56, respectively.

Within this same table, EPA incorrectly specified in the last

column heading for HLDTs greater than 5750 ALVW pounds that the ALVW

parameter was ``K5750'' pounds. The ``K'' prefix added to 5750 pounds

is an editorial error and may be misleading. EPA today changes the

column heading to ``LDT >6000 GVWR, >5750 ALVW''.

5. Correction to Early Credits Requirements for Heavy Light-Duty Trucks

in the CPP

In the regulations for the Credit Program for the CPP final rule,

EPA incorrectly excluded heavy LDTs that meet CFV standards from being

eligible for early credits during model years 1996 and 1997. (For the

CPP, a manufacturer's share of required CFV annual sales for model

years 1996 and 1997 is based on LDVs and light LDTs sales only;

however, a manufacturer's share of required CFV annual sales beginning

in 1998 is also based on heavy LDTs sales.) In the final rule, EPA

allowed early credits for LDVs and all LDTs up to the beginning of CPP

sales requirements in 1996. To provide heavy LDT manufacturers with a

similar opportunity to earn early credits, EPA had intended to allow

manufacturers to earn early credits for heavy LDTs up to the beginning

of their sales requirements in 1998. Thus, to rectify this

inconsistency for heavy LDTs in the CPP, EPA wishes to clarify that

heavy LDTs certified to CFV standards shall be eligible for early

credits up to model year 1998. Today's action changes section 88.205(g)

of the regulations accordingly.

II. Environmental and Economic Impacts

The nature of today's provisions for the determination of assigned

deterioration factors for alternative fuel vehicles are such that no

impact on air quality should result. If and when an entity (converter

or original equipment manufacturer) certifies an alternative fuel

vehicle, these actions will not seriously compromise EPA's confidence

that certified emission levels are being met in use. While some loss of

control could theoretically occur if the reduced durability

demonstration were in serious error, the Agency does not believe that

this is likely to be common and in any event the numbers of vehicles

involved is not large in comparison to conventional vehicle production.

In addition, these provisions should significantly reduce the cost of

certifying an alternative fuel engine family, thus encouraging the

development of such vehicles.

For the relaxed ILEV labelling requirements, EPA believes that if

the smaller but distinctive ILEV labels are used on an ILEV, they will

still be able to be clearly identified by law enforcement officials.

EPA expects that these changes will help encourage manufacturers to

develop and produce ILEVs, which will in turn have a positive

environmental impact relative to conventional vehicles.

With these changes to the CPP, EPA will ease the certification

burden for manufacturers with no effect on air quality. This result

will occur because the same number of vehicles will be sold under the

CPP industry-wide; only the relative allocations among manufacturers

might change.

In today's rule, EPA will reduce the regulatory burden on industry

without effecting air quality. EPA believes this rule is highly

accommodating to industry's concerns.

III. Public Participation

EPA believes the provisions of today's action are non-controversial

and will make the affected provisions less burdensome and more

effective. Nonetheless, if public comments are to be submitted, the

Agency requests wherever applicable, full supporting data and detailed

analysis should be submitted to allow EPA to make maximum use of the

comments. Commenters should provide specific suggestions for any

changes to any

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aspect of the regulations that they believe need to be modified or

improved. All comments should be directed to EPA Air Docket, Docket No.

A-92-30 and A-92-14 for the certification flexibility provisions and

Docket No. A-92-69 for the CPP provisions (See ADDRESSES). The official

comment period will last for 30 days following publication of this

direct final rule.

Commenters desiring to submit proprietary information for

consideration should clearly distinguish such information from other

comments to the greatest possible extent, and clearly label it

``Confidential Business Information.'' Submissions containing such

proprietary information should be sent directly to the contact person

listed above, and not to the public docket, to ensure that proprietary

information is not inadvertently placed in the docket.

Information covered by such a claim of confidentiality will be

disclosed by EPA only to the extent allowed and by the procedures set

forth in 40 CFR part 2. If no claim of confidentiality accompanies the

submission when it is received by EPA, it may be made available to the

public without further notice to the commenter.

IV. Statutory Authority

The statutory authority for this action is granted by Sections 202,

203, 206, 207, 241, 242, 243, 244, 245, 246, 247, 249, and 301(a) of

the Clean Air Act.

V. Administrative Designation and Regulatory Analysis

Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the

Agency must determine whether this regulatory action is ``significant''

and therefore subject to Office of Management and Budget (OMB) review

and the requirements of the Executive Order. The order defines

``significant regulatory action'' as one that is likely to result in a

rule that may:

(1) have an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities;

(2) create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

Pursuant to the terms of Executive Order 12866, EPA believes that

this action is not a ``significant regulatory action'' within the

meaning of the Executive Order. Today's action provides greater

flexibility in the certification process for manufacturers of alternate

fuel vehicles, thus eliminating some of the certification burden. ILEV

labelling requirements have been relaxed, reducing some of the

certification burden. Today's action also reduces the certification

burden for manufactures required to produce CFVs under the CPP, by

providing more flexibility in CFV production planning and credit

reporting.

VI. Compliance with Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) of 1980 requires federal

agencies to examine the effects of federal regulations and to identify

significant adverse impacts on a substantial number of small entities.

Because the RFA does not provide concrete definitions of ``small

entity'', ``significant impact'', or ``substantial number'', EPA has

established guidelines setting the standards to be used in evaluating

impacts on small businesses.6 Section 604 of the Regulatory

Flexibility Act requires EPA to prepare a Regulatory Flexibility

Analysis when the Agency determines that there is a significant adverse

impact on a substantial number of small entities.

\6\ U.S. Environmental Protection Agency Memorandum to

Assistant Administrators, ``Compliance With the Regulatory

Flexibility Act'', EPA Office of Policy, Planning, and Evaluation,

1984. In addition, U.S. Environmental Protection Agency, Memorandum

to Assistant Administrators, ``Agency's Revised Guidelines for

Implementing the Regulatory Flexibility Act'', EPA Office of Policy,

Planning, and Evaluation, 1992.

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Today's action will provide regulatory flexibility to converters of

alternative fuel vehicles in the determination of assigned

deterioration factors. EPA has evaluated the effects of today's

regulations and the Administrator of EPA certifies that there will not

be an adverse impact on a substantial number of small entities; in

fact, most small converters of alternative fuel vehicles will

experience an economic benefit. Therefore, a Regulatory Flexibility

Analysis has not been performed for this rule.

VII. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a written statement to accompany any rule where the

estimated costs to State, local, or tribal governments, or to the

private sector will be $100 million or more in any one year. Under

section 205, EPA must select the most cost-effective and least

burdensome alternative that achieves the objective of the rule and that

is consistent with statutory requirements. Section 203 requires EPA to

establish a plan for informing and advising any small governments that

may be significantly and uniquely impacted by the rule.

EPA estimates that the costs to State, local, or tribal

governments, or the private sector, from this rule will be less than

$100 million. EPA has determined that this rule will reduce the

regulatory burden imposed on certifiers of clean-fuel and/or

alternative fuel vehicles (especially converters of such vehicles). EPA

has determined that an unfunded mandates statement therefore is

unnecessary.

VIII. Paperwork Reduction Act

Today's rule does not add any mandatory information collection

requirements for certifiers of alternative fuel vehicles or any other

entity, and EPA has not prepared an Information Collection Request

document for this rule.

The information collection requirements of the Credit Program for

California Pilot Test Program have been amended to reflect today's

relaxation of the credit reporting requirements. These amended

requirements have been approved by the Office of Management and Budget

(OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C.

3501 et seq., and have been assigned OMB control number 2060-0229. A

copy of the Information Collection Request document (ICR No. 1590) may

be obtained from Sandy Farmer, OPPE Regulatory Information Division,

U.S. Environmental Protection Agency (2136); 401 M St. S.W.;

Washington, DC 20460 or by calling (202) 260-2740.

Send comments regarding this collection of information to the

Director, OPPE Regulatory Information Division; U.S. Environmental

Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and

to the Office of Information and Regulatory Affairs, Office of

Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked

``Attention: Desk Officer for EPA.'' Include the ICR number in any

correspondence.

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List of Subjects

40 CFR Part 86

Environmental protection, Administrative practice and procedure,

Confidential business information, Labeling, Motor vehicle pollution,

Reporting and recordkeeping requirements.

40 CFR Part 88

Environmental protection, Motor vehicle pollution, Reporting and

recordkeeping requirements.

Dated: November 27, 1995.

Carol M. Browner,

Administrator.

For the reasons set forth in the preamble, part 86 and 88 of title

40 of the Code of Federal Regulations are amended as follows:

PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR

VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION

AND TEST PROCEDURES

1. The authority citation for part 86 continues to read as follows:

Authority: Secs. 202, 203, 205, 206, 207, 208, 215, 216, 217,

and 301(a), Clean Air Act as amended (42 U.S.C. 7521, 7522, 7524,

7525, 7541, 7542, 7549, 7550, 7552, and 7601(a)).

2. Section 86.094-14 of subpart A is amended by redesignating

paragraph (a) as paragraph (a)(1) and adding paragraph (a)(2) to read

as follows:

Sec. 86.094-14 Small-volume manufacturers certification procedures.

(a)(1) * * *

(2) To satisfy the durability data requirements of the small-volume

manufacturers certification procedures, manufacturers of vehicles (or

engines) as described in paragraph (b) of this section may use assigned

deterioration factors that the Administrator determines by methods

described in paragraph (c)(7)(i)(C) of this section. However, if no

deterioration factor data (either the manufacturer's or industry-wide

deterioration factor data) are available from previously completed

durability data vehicles or engines used for certification,

manufacturers of vehicles (or engines) as described in paragraph (b) of

this section or with new technology not previously certified may use

assigned deterioration factors that the Administrator determines by

alternative methods, based on good engineering judgement. The factors

that the Administrator determines by alternative methods will be

published in an advisory letter or advisory circular.

* * * * *

Sec. 86.1311-94 [Amended]

3. Section 86.1311-94 of subpart N is amended by redesignating

paragraph (b)(2)(iii) as paragraph (b)(3) preceding figure N94-1.

PART 88--CLEAN-FUEL VEHICLES

4. The authority citation for Part 88 continues to read as follows:

Authority: 42 U.S.C. 7410, 7418, 7581, 7582, 7583, 7584, 7586,

7588, 7589, and 7601(a).

5. In Sec. 88.104-94, paragraph (l), which precedes the tables to

the section, is removed.

5a. A center heading is added immediately preceding the tables to

the section to read as follows:

Tables to Sec. 88.104-94

6. Section 88.204-94 of subpart B is amended by revising the

introductory text of paragraph (c)(2) and paragraph (c)(2)(ii) to read

as follows:

Sec. 88.204-94 Sales requirements for the California Pilot Test

Program.

* * * * *

(c) * * *

(2) The required annual clean fuel vehicle sales volume for a given

manufacturer is expressed in the following equation rounded to the

nearest whole number:

[GRAPHIC] [TIFF OMITTED] TR03JA96.003

Where:

RMS=a manufacturer's required sales in a given model year.

MS=the average of a manufacturer's total LDV and light LDT sales in

California three and four model years earlier than year in question

(for MY 1996 and 1997 RMS calculations).

=the average of a manufacturer's total LDV and LDT sales in

California three and four model years earlier than year in question

(for MY 1998 and later RMS calculations).

TS=the average of total LDV and light LDT sales in California of all

manufacturers three and four model years earlier than the year in

question (for MY 1996 and 1997 RMS calculations). Sales of

manufacturers which meet the criteria of (d) of this paragraph will

not be included.

=the average of total LDV and LDT sales in California of all

manufacturers three and four model years earlier than the year in

question (for MY 1998 and later RMS calculations). Sales of

manufacturers which meet the criteria of (d) of this paragraph will

not be included.

TCPPS=Pilot program annual CFV sales requirement (either 150,000 or

300,000) for the model year in question.

(i) * * *

(ii) A manufacturer certifying for the first time in California

shall calculate annual required sales share based on projected

California sales for the model year in question. In the second year,

the manufacturer shall use actual sales from the previous year. In the

third year, the manufacturer will use sales from two model years prior

to the year in question. In the fourth year, the manufacturer will use

sales from three years prior to the year in question. In the fifth year

and subsequent years, the manufacturer will use average sales from

three and four years prior to the year in question.

* * * * *

7. Section 88.205-94 of subpart B is amended by revising paragraphs

(d)(1), (d)(3)(iii), and (g) to read as follows:

Sec. 88.205-94 California Pilot Test Program Credits Program.

* * * * *

(d) * * *

(1) During certification, the manufacturer shall calculate the

projected credits, if any, based on required sales projections.

* * * * *

(3) * * *

(iii) Maintain the records required under this subpart.

* * * * *

(g) Early credits. Beginning in model year 1992 appropriate

credits, as determined from the given credit table, will be given for

the sale of vehicles certified to the clean-fuel vehicle standards for

TLEVs, LEVs, ULEVs, and ZEVs, where appropriate. For LDVs and light

LDTs (6000 lbs GVWR), early credits can be earned from model

years 1992 through 1997. The actual calculation of early credits shall

not begin until model year 1996.

8. Section 88.311-93 of subpart C is amended by revising paragraphs

(c) and (d) to read as follows:

Sec. 88.311-93 Emissions standards for Inherently Low-Emission

Vehicles.

* * * * *

(c) Light-duty vehicles and light-duty trucks. ILEVs in LDV and LDT

classes shall have exhaust emissions which do not exceed the LEV

exhaust emission standards for NMOG, CO, HCHO, and PM and the ULEV

exhaust emission standards for NOx listed in Tables A104-1 through

A104-6 for light-duty CFVs. Exhaust emissions shall be measured in

accordance with the test procedures specified in Sec. 88.104-94(k).

[[Page 128]]

An ILEV must be able to operate on only one fuel, or must be certified

as an ILEV on all fuels on which it can operate. These vehicles shall

also comply with all requirements of 40 CFR part 86 which are

applicable to conventional gasoline-fueled, methanol-fueled, diesel-

fueled, natural gas-fueled or liquified petroleum gas-fueled LDVs/LDTs

of the same vehicle class and model year.

(d) Heavy-duty vehicles. ILEVs in the HDV class shall have exhaust

emissions which do not exceed the exhaust emission standards in grams

per brake horsepower-hour listed in Sec. 88.105-94(d). Exhaust

emissions shall be measured in accordance with the test procedures

specified in Sec. 88.105-94(e). An ILEV must be able to operate on only

one fuel, or must be certified as an ILEV on all fuels on which it can

operate. These vehicles shall also comply with all requirements of 40

CFR part 86 which are applicable in the case of conventional gasoline-

fueled, methanol-fueled, diesel-fueled, natural gas-fueled or liquified

petroleum gas-fueled HDVs of the same weight class and model year.

* * * * *

9. Section 88.312-93 of subpart C is amended by revising paragraphs

(a)(1) and (c)(2)(ii) to read as follows:

Sec. 88.312-93 Inherently Low-Emission Vehicle Labeling.

* * * * *

(a) Label design. (1) Label design shall consist of either of the

following specifications:

(i) The label shall consist of a white rectangular background,

approximately 12 inches (30 centimeters) high by 18 inches (45

centimeters) wide, with ``CLEAN AIR VEHICLE'' printed in contrasting

block capital letters at least 4.3 inches (10.6 centimeters) tall and

1.8 inches (4.4 centimeters) wide with a stroke width not less than 0.5

inches (1.3 centimeters). In addition, the words ``INHERENTLY LOW-

EMISSION VEHICLE'' must be present in lettering no smaller than 1 inch

(2.5 centimeters) high. Nothing shall be added to the label which

impairs readability. Labels shall include a serialized identification

number; or

(ii) The label shall consist of a white truncated-circular

background, approximately 10 inches (25 centimeters) in diameter by 7

inches (17.5 centimeters) in height. The bottom edge of the truncated-

circular background shall be approximately 2 inches (5 centimeters)

from the center. The acronym ``ILEV'' shall be printed on the label in

contrasting block capital letters at least 2 inches (5 centimeters)

tall and 1.5 inches (3.8 centimeters) wide with a stroke width not less

than 0.4 inches (1.0 centimeter). In addition, the words ``CLEAN AIR

VEHICLE'' must be present in lettering no smaller than 0.8 inches (2.0

centimeters) high. Nothing shall be added to the label which impairs

readability. Labels shall include a serialized identification number.

* * * * *

(c) * * *

(2) * * *

(ii) In the case that an ILEV label of the proportions specified in

paragraph (a)(1) of this section cannot be attached to the rear of the

ILEV, the manufacturer or the manufacturer's agent shall attach to the

rear of the vehicle an ILEV label of either of the following

proportions:

(A) The label shall consist of a white rectangular background,

approximately 4 inches (10 centimeters) high by 24 inches (60

centimeters) wide, with ``CLEAN AIR VEHICLE'' printed in contrasting

block capital letters at least 2.8 inches (7 centimeters) tall and 1.3

inches (3.3 centimeters) wide with a stroke width not less than 0.3

inches (0.8 centimeter). In addition, the words ``INHERENTLY LOW-

EMISSION VEHICLE'' must be present in lettering no smaller than 0.6

inches (1.5 centimeters) high. Nothing shall be added to the label

which impairs readability. Labels shall include a serialized

identification number; or

(B) The label shall consist of a white truncated-circular

background, approximately 5 inches (12.5 centimeters) in diameter by

3.5 inches (8.8 centimeters) in height. The bottom edge of the

truncated-circular background shall be approximately 1 inch (2.5

centimeters) from the center. The acronym ``ILEV'' shall be printed on

the label in contrasting block capital letters at least 1 inch (2.5

centimeters) tall and 0.8 inches (2.0 centimeters) wide with a stroke

width not less than 0.3 inches (0.8 centimeters). In addition, the

words ``CLEAN AIR VEHICLE'' must be present in lettering no smaller

than 0.4 inches (1.0 centimeter) high. Nothing shall be added to the

label which impairs readability. Labels shall include a serialized

identification number.

* * * * *

10. Table C94-1.1 to subpart C of part 88 is revised to read as

follows:

Tables to Subpart C of Part 88

Table C94-1.--Fleet Credit Table Based on Reduction in NMOG. Vehicle

Equivalents for Light-Duty Vehicles and Light-Duty Trucks

Table C94-1.1.--Credit Generation: Purchasing More Clean-Fuel Vehicles Than Required by the Mandate

----------------------------------------------------------------------------------------------------------------

LDV, LDT 6000 eq>6000 GVWR, LDT >6000 GVWR, LDT >6000 GVWR, LDT >6000

NMOG GVWR, 3750 LVW 3750 >3750 ALVW 5750

eq>3750 LVW thn-eq>5750 LVW ALVW thn-eq>5750 ALVW

ALVW

----------------------------------------------------------------------------------------------------------------

LEV............................ 1.00 1.26 0.71 0.91 1.11

ULEV........................... 1.20 1.54 1.00 1.26 1.56

ZEV............................ 1.43 1.83 1.43 1.83 2.23

----------------------------------------------------------------------------------------------------------------

* * * * *

[FR Doc. 96-103 Filed 1-2-96; 8:45 am]

BILLING CODE 6560-50-P