Control of Air Pollution From New Motor Vehicles and New Motor Vehicle Engines: Voluntary Standards for Light-Duty Vehicles
Federal RegisterJun 6, 1997
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85 and 86
[AMS-FRL-5823-7]
RIN 2060-AF75
Control of Air Pollution From New Motor Vehicles and New Motor
Vehicle Engines: Voluntary Standards for Light-Duty Vehicles
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Today EPA is finalizing the main regulatory framework for the
National Low Emission Vehicle (National LEV) program. After EPA takes
comment on and finalizes supplemental regulations, today's regulations
would allow auto manufacturers to volunteer to comply with tailpipe
standards for cars and light, light-duty trucks that are more stringent
than EPA can mandate. Once a manufacturer opts into the program, the
standards would be enforced in the same manner as any other federal
motor vehicle pollution control requirement. Manufacturers would be
willing to opt into this program if there is a binding commitment to it
by the northeastern part of the country (the Ozone Transport Region
(OTR) or the States of the Ozone Transport Commission (OTC States)).
If the program were to come into effect after EPA finalizes the
supplemental regulations, it would achieve significant reductions in
smog and other air pollution nationwide. It also would achieve the same
emission reductions in the OTR as if each OTC State adopted a state
motor vehicle program. Today's regulations, together with other Agency
actions, also substantially harmonize federal and California motor
vehicle standards and test procedures to enable manufacturers to design
and test vehicles to one set of standards nationwide if they opt into
National LEV.
With this final rule, EPA is providing the regulatory structure
that is a necessary step towards completion of an on-going process
initiated by the OTC States and the auto manufacturers to improve
public health through the introduction of cleaner vehicles nationwide
and in the Northeast. The process cannot be completed until the auto
manufacturers and the OTC States both agree to be bound by the program.
As a result of the hard work of these parties, agreement has been
reached on the main regulatory framework of the National LEV program.
This agreement is reflected in today's rule. However, some additional
issues must be resolved regarding the commitments the OTC States must
make for the program to come into effect. EPA will resolve these issues
when it adopts a supplemental final rule after further notice and
comment. If National LEV is implemented, it will demonstrate how
cooperative, partnership efforts can produce a smarter, cheaper program
that reduces regulatory burden while increasing protection of the
environment and public health.
DATES: This regulation is effective August 5, 1997. The incorporation
by reference of certain publications listed in the regulations is
approved by the Director of the Federal Register as of August 5, 1997.
Sections 86.085-37(b)(1) introductory text, 86.1710-97(a), 86.1712-97,
and 86.1776-97 contain information collection requirements that have
not yet been approved by the Office of Management and Budget (OMB) and
are not effective until OMB has approved them. EPA will publish a
document announcing the effective date of these sections.
ADDRESSES: Materials relevant to this final rule have been placed in
Public Docket No. A-95-26. The docket is located at the Air Docket
Section, U.S. Environmental Protection Agency, 401 M Street SW,
Washington, DC 20460 (Telephone 202-260-7548; Fax 202-260-4400) in Room
M-1500, Waterside Mall, and may be inspected weekdays between 8:00 a.m.
and 5:30 p.m. A reasonable fee may be charged by EPA for copying docket
materials.
FOR FURTHER INFORMATION CONTACT: Karl Simon, Office of Mobile Sources,
U.S. Environmental Protection Agency, 401 M Street SW, Washington, DC
20460. Telephone (202) 260-3623; Fax (202) 260-6011; e-mail
[email protected].
SUPPLEMENTARY INFORMATION:
Regulated entities. Entities potentially regulated by this action
are those that manufacture and sell new motor vehicles in the United
States. Regulated categories and entities include:
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Category Examples of regulated entities
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Industry............................ New motor vehicle manufacturers.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your activities are regulated by this action, you should carefully
examine the applicability criteria in Sec. 86.1701-97 of the rule. If
you have questions regarding the applicability of this action to a
particular entity, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
I. Obtaining Electronic Copies of the Regulatory Documents
The Preamble, Regulations, and Response to Comments documents are
also available electronically from the EPA internet site and via dial-
up modem on the Technology Transfer Network (TTN), which is an
electronic bulletin board system (BBS) operated by EPA's Office of Air
Quality Planning and Standards. Both services are free of charge,
except for your existing cost of internet connectivity or the cost of
the phone call to TTN. Users are able to access and download files on
their first call using a personal computer per the following
information. The official Federal Register version is made available on
the day of publication on the primary internet sites listed below. The
EPA Office of Mobile Sources also publishes these notices on the
secondary internet sites listed below and on TTN.
Internet
World Wide Web: http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either
select desired date or use Search feature) or http://www.epa.gov/
OMSWWW/ (look in What's New or under the specific rulemaking topic)
Gopher: gopher.epa.gov Follow menus: Rules: EnviroSubset:Air or
gopher.epa.gov Follow menus: Offices:Air:OMS
FTP: ftp.epa.gov Directory: pub/gopher/fedrgstr/EPA-AIR/ or ftp.epa.gov
Directory: pub/gopher/OMS/
TTN BBS: 919-541-5742 (1,200-14,400 bps, no parity, eight data bits,
one stop bit) Off-line: Mondays from 8:00-12:00 Noon ET Voice helpline:
919-541-5384
A user who has not called TTN previously will first be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following menu choices from the Top Menu to access information on this
rulemaking.
GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
OMS--Mobile Sources Information
Rulemaking & Reporting
Light Duty
[[Page 31193]]
File area #10 OTC Low-Emissions Vehicle & National LEV
At this point, the system will list all available files in the
chosen category in reverse chronological order with brief descriptions.
To download a file, type the letter ``D'' and hit your Enter key. Then
select a transfer protocol that is supported by the terminal software
on your own computer, and pick the appropriate command in your own
software to receive the file using that same protocol. After getting
the files you want with your computer, you can quit the TTN BBS with
the oodbye command. If you are unfamiliar with handling compressed
(i.e. ZIP'ed) files, go to the TTN top menu, System Utilities (Command:
1) for information and the necessary program to download in order to
unZIP the files of interest after downloading to your computer.
Please note that due to differences between the software used to
develop the document and the software into which the document may be
downloaded, changes in format, page length, etc. may occur.
II. Outline and List of Acronyms and Abbreviations
A. Outline
This final rule preamble is organized into the following
sections:
I. Obtaining Electronic Copies of the Regulatory Documents
II. Outline and List of Acronyms and Abbreviations
A. Outline
B. List of Acronyms and Abbreviations
III. Introduction and Background
A. Introduction
B. Benefits of the National LEV Program
C. Background
1. Current Federal Motor Vehicle Emissions Control Program
2. California Low Emission Vehicle Program
3. OTC Efforts to Reduce Motor Vehicle Emissions in the OTR
4. Public Process
D. National LEV Program
1. Agreement--A Necessary Predicate for the National LEV Program
2. Description of National LEV Program
IV. Provisions of the National LEV Program
A. Program Structure
1. Opt-In to National LEV and In-Effect Finding
2. Opt-Out from National LEV
a. Conditions Allowing Opt-Out
(1) OTC States' Failure to Meet or Keep Their Commitments
(2) EPA Changes to Stable Standards
(i) Designation of Stable Standards
(ii) Changes to Stable Standards
b. Opt-Out Procedures
c. Effective Date of Opt-Out
d. Programs in Effect as a Result of Opt-Out
e. Opt-Out by States
3. Duration of Program
B. National LEV Voluntary Tailpipe and Related Standards and
Phase-In
1. Exhaust Emission Standards for Categories of NLEVs
a. Certification Standards
b. In-Use Standards
2. Non-methane Organic Gases Fleet Average Standards
a. Compliance With the NMOG Standards
b. Tracking Vehicles for Fleet Average NMOG Compliance
c. OTC State Government ATV Purchases
d. Reporting Requirements
3. Fleet Average NMOG Credit Program
a. Fleet Average NMOG Credit Program Requirements
b. Early Reduction Credits
c. Enforcement of Fleet Average NMOG Credit Program
d. Reporting for Fleet Average NMOG Credit Program
4. Limits on Sale of Tier 1 Vehicles and TLEVs
5. Tailpipe Emissions Testing
a. Federal Test Procedure
b. Compliance Test Fuel
c. NMOG vs. NMHC
d. Reactivity Adjustment Factors
6. On-Board Diagnostics Systems Requirements
7. In-Use Fuel
8. Hybrid Electric Vehicles
C. Low Volume and Small Volume Manufacturers
D. Legal Authority
E. Enforceability and Prohibited Acts
V. National LEV Will Produce Creditable Emissions Reductions
A. Emissions Reductions From National LEV
B. Enforceability of National LEV
C. Finding National LEV in Effect
D. SIP Credits
VI. Other Applicable Federal Requirements and Harmonization With
California Requirements
A. Introduction
B. Harmonization of Federal and California Standards
1. Onboard Refueling Vapor Recovery and Evaporative Emissions
2. Cold CO
3. Certification Short Test
4. High Altitude Requirements
C. Federal Compliance Requirements
1. Selective Enforcement Auditing and Quality Audit Programs
2. Imports
3. In-Use and Warranty Requirements
VII. Structure of National LEV Regulations
VIII. Technical Correction to Maintenance Instructions
IX. Administrative Requirements
A. Administrative Designation
B. Regulatory Flexibility Act
C. Unfunded Mandates Reform Act
D. Congressional Review of Agency Rulemaking
E. Reporting and Recordkeeping Requirements
X. Statutory Authority
XI. Judicial Review
B. List of Acronyms and Abbreviations
AAMA American Automobile Manufacturers Association
AIAM Association of International Automobile Manufacturers
APA Administrative Procedure Act
AQL Acceptable Quality Level
ATV(s) Advanced Technology Vehicle(s)
BBS Bulletin Board System
CAA Clean Air Act
CAAA Clean Air Act Amendments of 1990
CAL LEV California Low Emission Vehicle Program
CARB California Air Resources Board
CFR Code of Federal Regulations
CO Carbon Monoxide
CQA California Quality Audit
CST Certification Short Test
EPA U.S. Environmental Protection Agency
EPAct Energy Policy Act
FACA Federal Advisory Committee Act
FR Federal Register
FRM Final Rulemaking, Final Rule
FTP Federal Test Procedure
GSA General Services Administration
GVWR Gross Vehicle Weight Rating
HC(s) Hydrocarbon(s)
HCHO Formaldehyde
HEV(s) Hybrid Electric Vehicle(s)
HLDT(s) Heavy Light-Duty Truck(s)
IBR Incorporation by Reference
ICI(s) Independent Commercial Importer(s)
ICR Information Collection Request
I/M Inspection and Maintenance
ILEV(s) Inherently Low Emission Vehicle(s)
LDT(s) Light-Duty Truck(s)
LDV(s) Light-Duty Vehicle(s)
LEV(s) Low Emission Vehicle(s)
LLDT(s) Light Light-Duty Truck(s)
LVW Loaded Vehicle Weight
MIL Malfunction Indicator Light
MOU Memorandum of Understanding
MY Model Year
NAAQS National Ambient Air Quality Standards
National LEV National Low Emission Vehicle
NLEV National Low Emission Vehicle
NMHC Non-methane Hydrocarbons
NMOG Non-methane Organic Gases
NOX Oxides of Nitrogen
NPRM Notice of Proposed Rulemaking
NTR Northeast Trading Region
OBD On-Board Diagnostics
OBD II Second Phase On-Board Diagnostics
OMB Office of Management and Budget
ORVR On-Board Refueling Vapor Recovery
OTC Ozone Transport Commission
OTC LEV Ozone Transport Commission Low Emission Vehicle
OTR Ozone Transport Region
PM Particulate Matter
RAF(s) Reactivity Adjustment Factor(s)
RFA Regulatory Flexibility Analysis
RFG Reformulated Gasoline
RIA Regulatory Impact Analysis
SEA Selective Enforcement Audit
SFTP Supplemental Federal Test Procedure
SIA Service Information Availability
SIP State Implementation Plan
SNPRM Supplemental Notice of Proposed Rulemaking
The Act Clean Air Act
The Agency U.S. Environmental Protection Agency
THC Total Hydrocarbon
TLEV(s) Transitional Low Emission Vehicle(s)
TTN Technology Transfer Network
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UDDS Urban Dynamometer Driving Cycle
ULEV(s) Ultra Low Emission Vehicle(s)
UMRA Unfunded Mandate Reform Act
VOC(s) Volatile Organic Compound(s)
ZEV(s) Zero Emission Vehicle(s)
III. Introduction and Background
The U.S. Environmental Protection Agency (EPA) is adopting
regulations for the National Low Emission Vehicle (National LEV)
program in this final rule. EPA believes this is a cleaner, smarter,
cheaper pollution control program for new motor vehicles. Under the
National LEV program, auto manufacturers have the option of agreeing to
comply with more stringent tailpipe emissions standards--standards that
EPA could not impose without manufacturer agreement. Once manufacturers
commit to the program, the standards will be enforceable in the same
manner that other federal motor vehicle emissions control requirements
are enforceable. Manufacturers have indicated their willingness to
volunteer to meet these tighter emissions standards if EPA and the
northeastern states (i.e., those in the Ozone Transport Commission
(OTC) or the ``OTC States'') agree to certain conditions, including
providing manufacturers with regulatory stability, recognizing that
establishing advanced technology vehicles (ATVs) in the Northeast is a
shared responsibility (rather than the sole responsibility of auto
manufacturers), and reducing regulatory burdens by harmonizing federal
and California motor vehicle emissions standards.
The National LEV program is another step in an unprecedented,
cooperative effort by the OTC States, auto manufacturers,
environmentalists, fuel providers, EPA, and other interested parties to
improve air quality. The OTC States and environmentalists provided the
opportunity for this cooperative effort by pushing for adoption of the
California Low Emission Vehicle (CAL LEV) program throughout the
northeast Ozone Transport Region (OTR). Under EPA's leadership, the
states, auto manufacturers, environmentalists, and other interested
parties then embarked on a process marked by extensive public
participation and a demonstrated willingness to work with each other
and to solve problems jointly. This working relationship is
particularly remarkable given the adversarial and litigious nature of
previous interactions between the parties.
In today's final rule, EPA is establishing the regulatory framework
for National LEV. Given statutory constraints, however, the National
LEV program will only be implemented if it is agreed to by the OTC
States and the auto manufacturers. EPA does not have authority to force
either the OTC States or the manufacturers to sign up to the program.
The OTC States and auto manufacturers have reached agreement on
most issues raised by the National LEV program. Each side has sent EPA
a Memorandum of Understanding (MOU) that it has initialed, indicating
its agreement with the National LEV program as contained in that MOU.
(These initialed documents are in the public docket for this
rulemaking.) Although there are differences in the two Memoranda, they
show that agreement has been reached between the OTC States and the
auto manufacturers on the substantive issues addressed in this rule.
With a few limited exceptions, those agreements are consistent with
today's rule. EPA applauds the efforts of these parties, particularly
the leadership shown by the OTC States and the auto manufacturers.
The OTC States and auto manufacturers have not reached agreement on
a few remaining issues, in particular, those related to OTC State opt-
in and commitment to the program. EPA did not take comment on and
therefore cannot finalize these portions of the National LEV program in
today's rule. These issues will need to be resolved and reflected in
EPA regulations before the National LEV program can come into effect.
Because the auto manufacturers and the OTC States have not resolved
these issues, EPA will publish a Supplemental Notice of Proposed
Rulemaking (SNPRM) to take comment on these issues before EPA resolves
them in a supplemental final rule.
National LEV will provide environmental benefits by reducing air
pollution nationwide. The program is designed to address air pollution
problems, and will produce public health and environmental benefits
both inside and outside the OTR. This will assist all states that were
considering adopting the California LEV program to meet their
obligations under the Clean Air Act (CAA or the Act).
EPA has determined that the National LEV program will result in
emissions reductions in the OTR that are equivalent to or greater than
the emissions reductions that would be achieved through OTC state-by-
state adoption of the CAL LEV program. For a number of years, the OTC
has been working to reduce motor vehicle emissions either by adoption
of the CAL LEV program throughout the OTR or by adoption of the
National LEV program. As a means to achieve such reductions, National
LEV continues to provide a preferable alternative to adoption of CAL
LEV throughout the OTR. Not only will National LEV provide emissions
reductions benefits to the OTC States, it will reduce states' costs of
providing their citizens with healthy air by avoiding the costs of
state programs that duplicate each others' and EPA's efforts. Although
a recent court decision struck down one of the OTC States' regulatory
options for regionwide adoption of CAL LEV programs, Virginia v. EPA,
No. 95-1163 (D.C. Cir. March 11, 1997)(discussed in section III.C.3.),
the auto manufacturers and OTC States have recently sent letters to EPA
expressing their continued support for National LEV. (Letter from AAMA
and AIAM to EPA, April 15, 1997; Letter from OTC to EPA, April 18,
1997; both letters are in docket no. A-95-26).
EPA is also providing important relief from certain regulatory
requirements to the auto manufacturers. Rather than having a fleet of
California vehicles that are designed and tested to California
standards, and a separate fleet of federal vehicles that are designed
and tested to federal standards, in most instances under National LEV
manufacturers will certify vehicles to harmonized California and
federal standards that will allow them to sell most vehicles
nationwide. Not only will this reduce testing and design costs, it will
allow more efficient distribution and marketing of vehicles nationwide.
The cooperative nature of the program by itself should provide
environmental benefits sooner, and in a way that greatly reduces
regulatory transaction costs, than would otherwise be the case.
Focusing energy on implementing the program the parties helped jointly
design is a better use of resources than continued disagreement over
whether any program should be implemented at all.
A. Introduction
EPA is today adopting the regulatory structure for a voluntary,
National LEV program. The National LEV program includes a set of
exhaust emissions standards that will significantly reduce emissions of
ozone-producing pollutants nationwide from new light-duty vehicles
(LDVs) and light-duty trucks (LDTs) at or below 6000 lbs gross vehicle
weight rating (GVWR) (light, light-duty trucks, or LLDTs). The program
includes a manufacturer fleet average standard for non-methane organic
gas (NMOG) applicable in the OTC States beginning in Model Year
[[Page 31195]]
(MY) 1997,1 and applicable nationwide (except California)
beginning in MY2001. Manufacturers are not required to meet the
standards in this program unless they choose to opt into the program.
However, if a manufacturer opts into the program and EPA finds that the
program is in effect, then the manufacturer will be bound by the
program's requirements. A manufacturer that opts into the program can
opt out only in certain limited circumstances.
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\1\ As discussed in note 17 below, EPA is using MY 1997 as a
placeholder for the actual start date of National LEV.
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In addition to the national public health benefits that would
result from National LEV, the program has been motivated largely by the
OTC's efforts to reduce motor vehicle emissions either by adoption of
the CAL LEV program throughout the OTR or by adoption of the National
LEV program. One of the OTC States' efforts was a petition the OTC
filed with EPA. On December 19, 1994, EPA approved this petition, which
requested that EPA require all OTC States to adopt the CAL LEV program
(called the Ozone Transport Commission Low Emission Vehicle (OTC LEV)
program. 60 FR 4712 (January 24, 1995) (OTC LEV Decision)). In that
rule, EPA found that the reduction of emissions from new motor vehicles
throughout the OTR is necessary to mitigate the effects of air
pollution transport in the region and to bring ozone nonattainment
areas in the OTR into attainment (including maintenance) by the dates
specified in the CAA, as amended in 1990. On the basis of this finding,
EPA issued a finding that the State Implementation Plans (SIPs) of the
OTC States are substantially inadequate. Under the OTC's recommended
program, all new motor vehicles sold in the OTR beginning in MY1999
would be required to be certified by the California Air Resources Board
(CARB) to any one of the California motor vehicle emissions standards
(i.e., California Tier 1, Transitional Low Emission Vehicle (TLEV), Low
Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), or Zero
Emission Vehicle (ZEV)). Manufacturers could choose to sell any mix of
California-certified vehicles to comply with annual fleet average NMOG
standards, which become increasingly stringent over time. Pursuant to
the OTC recommendation, individual states in the OTR could (but were
not required to) adopt a ZEV mandate to the extent permitted by the
CAA.
The OTC LEV decision was challenged by the Commonwealth of Virginia
and several motor vehicle manufacturers. The Court of Appeals held that
EPA did not have authority to require the OTC States to adopt the CAL
LEV program and vacated EPA's OTC LEV decision. Virginia v. EPA, No.
95-1163 (D.C. Cir. March 11, 1997).
The court decision striking EPA's OTC LEV decision changes some of
the legal requirements for National LEV. When EPA proposed the National
LEV program, it proposed criteria that the National LEV program would
have to meet to be an acceptable LEV-equivalent program that would
relieve OTC States of their obligation under the OTC LEV decision. EPA
proposed that National LEV (1) would need to achieve emissions
reductions equivalent to those that would be achieved by OTC LEV, and
(2) would be an enforceable, stable program that was in effect. Because
EPA no longer need find that National LEV is an acceptable LEV-
equivalent program, EPA has reevaluated whether National LEV is legally
required to meet the two criteria. EPA has determined that there is no
longer a legal requirement for National LEV and OTC LEV to achieve
equivalent emissions reductions. Nonetheless, for all parties to
support National LEV, it must produce an acceptable quantity of
emission reductions. Furthermore, for EPA to grant SIP credits,
National LEV must be an enforceable, stable program.
In today's rule, EPA finds that National LEV will achieve
reductions in new motor vehicle emissions in the OTR that are at least
equivalent to the reductions that would be achieved through OTC state-
by-state adoption of the CAL LEV program. EPA also finds that once
manufacturers opt into the National LEV program, it is enforceable
against the manufacturers. After EPA provides further notice to take
comment on the type of OTC State commitments that would make the
program lasting, the Agency intends to promulgate final provisions for
OTC State commitments sufficient to adequately assure that National LEV
will produce the intended emissions reductions for the intended
duration of the program. Then, EPA will be able to find that National
LEV is in effect when all auto manufacturers have opted into the
program.
EPA provided numerous opportunities for public participation in the
decision-making process leading to OTC LEV and National LEV, as
described more fully in section III.C.4. EPA established a subcommittee
of the Clean Air Act Advisory Committee pursuant to the Federal
Advisory Committee Act (FACA) to evaluate issues relating to obtaining
reductions in emissions from new motor vehicles. The Subcommittee has
also served as a public forum to discuss voluntary, 49-state motor
vehicle emissions standards and provided comments to EPA on the
National LEV program.
B. Benefits of the National LEV Program
The National LEV program will result in significant environmental
and public health benefits nationwide if the OTC States and auto
manufacturers agree to implement it. The program promulgated today
represents a significant step towards the goal of reducing smog
throughout the United States. The National LEV program will also
achieve reductions in emissions of other pollutants, including
particulate matter (PM), benzene, and formaldehyde.
Ground-level ozone, the principal harmful component in smog, is
produced by a complex set of chemical reactions involving volatile
organic compounds (VOCs) and oxides of nitrogen (NOX) in the
presence of sunlight. Ground-level ozone causes health problems,
including damaged lung tissue, reduced lung function, and lungs that
are sensitized to other irritants. Scientific evidence indicates that
the ambient levels of ozone affect healthy adults and children, as well
as people with impaired respiratory systems, such as asthmatics. A
reduction in lung function during periods of moderate exercise has been
found following exposure to ozone for six to seven hours at
concentrations at or near the current standard. This decrease in lung
function may be accompanied by symptoms such as chest pain, coughing,
nausea, and pulmonary congestion. Studies, to date, indicate that the
acute health effects of exposure to ozone at the level of the current
ozone NAAQS (such as coughing, chest pain, and shortness of breath) are
reversible in most people when the exposure stops. However, the extent
of such reversibility depends on factors such as the length of exposure
and individual activity level. With repeated exposure to ozone over
time, many of these symptoms attenuate but some indicators of cell
damage suggest continued lung inflammation. Ground-level ozone is also
responsible for significant agricultural crop yield losses each year.
Studies also indicate that the current ambient levels of ozone are
responsible for damage to both terrestrial and aquatic ecosystems,
including acidification of surface waters, reduction in fish
populations, damage to forests and wildlife, soil degradation, and
reduced visibility.
The primary NAAQS for various pollutants, including ozone, are set
by EPA on the basis of air quality criteria
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and allowing an adequate margin of safety, at a level that the Agency
determines is necessary to protect public health. EPA then classifies
areas across the country based on whether they attain these standards.
Areas that do not meet these standards are deemed ``nonattainment''
areas and rated based on the severity of their air quality problem.
There are 66 ozone nonattainment areas throughout the United States,
including several areas classified as ``serious'' or ``severe'' for
ozone. Houston and the upper Midwest, in particular, experience high
levels of ground-level ozone pollution. The implementation of the
National LEV program nationwide in MY2001 will advance the goal of
emissions reductions in those areas. Motor vehicles are a significant
contributor to smog because of their emissions of VOCs and
NOX. A vehicle certified to the National LEV standards will,
over its lifetime, emit 400 pounds less pollution than a Tier 1
vehicle. Implementation of National LEV is expected to achieve
nationwide reductions of NOX emissions of 400 tons/day in
2005 and 1250 tons/day in 2015, and nationwide reductions in NMOG
emissions of 279 tons/day in 2005 and 778 tons/day in 2015.
In evaluating the OTC petition, EPA analyzed the level of emissions
reductions throughout the OTR necessary to attain (or maintain) the
NAAQS for ozone, given the serious transport issue. EPA concluded,
based on its analysis in the context of the OTC LEV decision, that
NOX reductions of 50 percent to 75 percent from 1990 levels
from every portion of the OTR lying to the south, southwest, west, and
northwest of each serious or severe OTR nonattainment area, and VOC
reductions of 5 percent to 75 percent from the portion of the OTR in or
near (and upwind of) each serious and severe OTR nonattainment area,
are necessary to bring each such area into attainment by the applicable
date.
EPA has projected that, without a program that achieves reductions
in the Northeastern United States equivalent to those achieved by OTC
state-by-state adoption of CAL LEV, on-highway vehicles will account
for approximately 38 percent of NOX emissions and 22 percent
of anthropogenic VOC emissions in 2005. As described in the OTC LEV
decision, EPA's modeling analyses support the conclusion that no
combination of potentially broadly practicable control measures in the
OTR would be sufficient to achieve the necessary level of emissions
reductions without more stringent new motor vehicle emission standards.
Thus, EPA determined that all of the emissions reductions in the OTR
associated with implementing the OTC LEV program, or a LEV-equivalent
program, are necessary. While the court decision overturned the OTC LEV
decision requiring adoption of OTC LEV, the court did not overturn
EPA's underlying assessment of the need for significant additional
emissions reductions in the region.
More stringent motor vehicle standards outside the OTR, such as
those contained in today's rule, will help the OTR achieve necessary
reductions, in addition to producing benefits in States outside the
OTR. EPA has determined that the National LEV program promulgated today
would provide at least equivalent emissions reductions of VOCs and
NOX in the OTR as would OTC state-by-state adoption of CAL
LEV programs, and would do so in a more efficient and cost-effective
manner, for several reasons.2 First, the National LEV
program provides for the introduction of TLEVs in the OTR in MY1997,
two years earlier than EPA had required under the OTC LEV
program.3 Second, since the National LEV program will apply
nationwide (except for California) in MY2001, vehicles purchased
outside the OTR that move into the region will be up to 70 percent
cleaner than incoming vehicles (i.e., Tier 1 vehicles) would have been
under the OTC LEV program. EPA estimated that if migration into the OTR
of non-LEV vehicles were taken into account in estimating benefits of
OTC LEV, this would result in a 16 ton/day increase in VOC emissions
and a 28 ton/day increase in NOX emissions in 2005 compared
to EPA's estimates of highway vehicle emissions in the OTR without
factoring in migration. The National LEV program, when implemented
nationwide in MY2001, will greatly reduce this migration effect. Even
more significant, without the OTC LEV SIP call, a substantial number of
the OTC States are now unlikely to adopt state CAL LEV programs
effective for the relevant timeframe, which dramatically increases the
relative benefits of National LEV over an approach that relies on OTC
state-by-state adoption of CAL LEV.
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\2\ Since EPA's modeling was completed, circumstances have
changed that have set back the potential realistic start dates both
for National LEV and for OTC state-by-state implementation of CAL
LEV. EPA's modeling shows that the programs as designed (i.e.,
National LEV starting in MY1997 and CAL LEV throughout the OTR
implemented by MY1999) would produce equivalent emission reductions.
See section V.A. In the SNPRM, EPA will discuss the relative
emission reduction effects of delayed start dates.
\3\ Although it is unrealistic to start National LEV with MY1997
(see discussion in n. 17), EPA believes it is possible for National
LEV to start sooner than most OTC States could start state LEV
programs.
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The National LEV program is also expected to achieve pollution
reduction benefits from motor vehicles beyond those associated with
ozone pollution, including benefits from control of PM, benzene, and
formaldehyde. All states, not just those in the OTR, will realize these
air quality benefits.
PM is the generic term for a broad class of chemically and
physically diverse substances that exist as discrete particles over a
wide range of sizes. PM emissions have been associated with numerous
serious health effects, including upper and lower respiratory illnesses
such as pneumonia, chronic obstructive pulmonary disease, chronic
bronchitis, aggravation of the respiratory system in children with pre-
existing illnesses, and premature mortality in sensitive individuals
(such as those with cardiovascular diseases). In addition, studies have
shown that PM emissions episodes can result in a short-term decrease in
lung function in small children. PM emissions also contribute to
impairment of visibility, acidic deposition, and potential modification
of the climate.
The National LEV program will require diesel LDVs and LLDTs to meet
PM standards that are more stringent than the comparable Tier 1
standards. As discussed more fully in the Regulatory Impact Analysis
(RIA) 4 for this rulemaking, EPA's modeling shows that
implementation of the National LEV program will result in a 28.6 ton/
day reduction in particulates less than 10 microns in diameter (PM-10)
in 2005, compared to expected PM emissions when current Tier 1
standards apply outside the OTC and OTC state-by-state adoption of CAL
LEV is fully implemented within the OTC. Furthermore, in western areas
(such as Denver) with a PM pollution problem caused by nitrates, the
NOX reductions achieved by the National LEV program will
provide additional PM emissions benefits.
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\4\ Available in the public docket for review; see ADDRESSES.
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National LEV also will decrease emissions of two carcinogens:
benzene and formaldehyde. As discussed more fully in the RIA for this
rulemaking, EPA's modeling demonstrates that implementation of the
National LEV program will reduce emissions of benzene by seven tons/day
and formaldehyde by four tons/day nationwide in 2005. EPA has
classified benzene as a Group A known human carcinogen, based on
studies on workers
[[Page 31197]]
showing that long-term exposure to high levels of benzene causes
cancer. Exposure to benzene emissions has also been associated with
non-cancer health effects, including blood disorders, adverse effects
on the immune system, and damage to reproductive organs. EPA has
classified formaldehyde as a probable human carcinogen, based on animal
studies showing that long-term exposure to, and inhalation of,
formaldehyde is associated with certain types of tumors. In addition,
exposure to formaldehyde is associated with non-cancer health effects,
including irritation of the eyes, nose, throat, and lower airway, at
low levels of exposure, and adverse effects on the liver and kidneys.
Unlike the current federal Tier 1 program, the National LEV program
includes standards for formaldehyde emissions from motor vehicles.
EPA believes that the National LEV program is particularly
promising because it would provide these nationwide health and
environmental benefits while reducing some aspects of the auto
manufacturers' regulatory burden and compliance costs. Currently,
manufacturers typically design, test, and produce two different types
of vehicles (California and federal), each of which must meet different
standards according to different test procedures. One of the goals of
the National LEV program is to use a single test procedure and standard
for each particular type of emission control requirement. Because of
this harmonization with California's program,5
implementation of the National LEV program will streamline the process
for certifying a vehicle for sale, reduce auto manufacturers' design
and testing costs, and provide other efficiencies in the marketing of
automobiles.6
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\5\ In addition to using the same tailpipe standards as
California, EPA is working with CARB to make changes to other EPA
standards and test procedures that will further harmonize the
federal and California motor vehicle emission control programs. EPA
expects that CARB will reassess its regulations shortly to further
this harmonization. Even if National LEV becomes effective,
California will continue to have its own program. Manufacturers
could decide to sell some vehicles (such as ULEVs or ZEVs) in
California (or California and the OTR), but not nationwide.
\6\ EPA received a letter from the Government of Canada
(available in the public docket for review), indicating that
government's interest in adopting national motor vehicle emissions
standards that are the same as those contained in any national low
emission vehicle program adopted in the United States. Such
harmonization of motor vehicle emission control standards in the
United States and Canada would provide even greater efficiencies to
the auto manufacturers and would broaden the geographical range of
the emissions benefits of such a program, including the specific
benefit of reduced downwind pollution transport.
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EPA also believes the National LEV program is a preferable
alternative to OTC state-by-state adoption of CAL LEV because it will
use fewer regulatory and legislative resources than would OTC state-by-
state adoption of CAL LEV, since the implementation of the National LEV
program is premised on agreement reached by the OTC States, the auto
manufacturers, and EPA. The OTC States, the auto manufacturers, and
EPA, with input from environmental and public health groups, and other
interested parties, have made significant efforts that resulted in a
broad outline for a viable, cost-effective national low emission
vehicle program. EPA believes that cooperation among the various
interested parties is the best way to achieve significant emissions
reductions and to design a practical, enforceable, and efficient
program. It allows the OTC States, EPA, auto manufacturers, other
affected industry groups, environmental groups and other interested
parties to spend resources making the program work instead of fighting
each other on a state-by-state basis over adoption of CAL LEV programs.
It also eliminates the need for any state, besides California, to spend
any resources on enforcement of its own motor vehicle emissions control
program since enforcement responsibilities will remain with EPA and
California. The National LEV program is a promising example of how
cooperative efforts can advance the goal of cleaner air.
EPA has also analyzed the costs of the National LEV program. EPA
used the detailed assessment of the cost of LEVs produced by CARB in
1994 and updated in April, 1996. CARB estimated the incremental cost of
$96 per car for LEVs only in California.7 EPA believes that
the incremental cost for National LEV will be considerably lower than
the CARB estimate for a variety of reasons. First, automotive pollution
control technology will continue to advance, leading to better controls
at lower costs over time. For example, in the two years between CARB's
technology assessments, Honda announced the introduction of new LEV
technology that will add little or no cost to vehicles. Second, the
National LEV program includes numerous provisions to harmonize federal
and California motor vehicle requirements. The resulting cost-savings
for auto manufacturers and dealers (in areas such as vehicle design,
certification testing, mechanic training and inventory control) will be
significant and offset at least a portion of the costs for LEVs. Third,
the nationwide production of LEVs will result in economies of scale for
the manufacturers. Fourth, CARB's own cost estimates have generally
been shown to be higher than actual price differences. For example,
CARB estimates price increases for TLEVs at $61, but informal surveys
of TLEV prices in California and New York have generally shown no price
differentials between comparable TLEV and Tier 1 vehicles. Finally,
auto industry experience has consistently demonstrated rapid price
decreases in successive model years for newly-introduced technology.
Analysis discussed in the RIA yields an annual incremental cost
estimate of $950 million for National LEV when compared to current
federal regulatory obligations, or of $600 million for National LEV
when compared to CAL LEV throughout the OTR and current regulations in
the rest of the country. EPA believes that these costs would actually
be lower, as discussed above. The total expenditure for new cars in the
United States in 1993 was approximately $225 billion.
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\7\ A November, 1996 CARB Staff Report on Low Emission Vehicle
and Zero-Emission Vehicle Program Review modified CARB's vehicle
cost estimates. CARB now estimates the incremental costs of LEVs at
approximately $120. EPA's cost analysis for the National LEV
program, which has included the data in CARB's staff reports on the
CAL LEV program, looks at costs of vehicles in California and then
estimates National LEV program costs based on nationwide sales
volumes. Two principal reasons for vehicle price differentials
between California and National LEV vehicles are economy of scale in
production volumes and allocation of costs among the number of
vehicles being produced, with such costs distributed over an
appropriate number of years. EPA's cost estimates rely in part on
the start date of the National LEV program, which will be addressed
in the upcoming SNPRM. See n. 17 below. Once the actual start date
is determined, EPA will recalculate its estimates for vehicle costs
using up-to-date cost information.
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C. Background
To provide a context for, and background to, the National LEV
Program, it is necessary to discuss briefly the federal and California
motor vehicle programs and the OTC's efforts to have the CAL LEV
program adopted throughout the OTR. Additional background information
is provided in the Notice of Proposed Rulemaking (NPRM) detailing the
National LEV program on October 10, 1995 (60 FR 52734, 52738-52740).
EPA provided extensive and numerous opportunities for public
involvement in that decision and in developing the framework for a
national voluntary low emission vehicle program.
1. Current Federal Motor Vehicle Emissions Control Program
The CAA prohibits the introduction into commerce of a new motor
vehicle that is not covered by a certificate of conformity issued by
EPA. To obtain such a certificate for a vehicle or engine
[[Page 31198]]
family, manufacturers must demonstrate compliance with all federal
emissions control standards and requirements that apply to new motor
vehicles for that class or category of vehicles for the relevant model
year. The exhaust emission standards and procedures that currently
apply to new LDVs and LDTs, known as the Tier 1 standards, were
promulgated on June 5, 1991 (See 56 FR 25724; the standards themselves
are codified at 40 CFR 86.094-8 and 86.094-9). The Tier 1 program
includes standards for non-methane hydrocarbon (NMHC), oxides of
nitrogen (NOX), carbon monoxide (CO) and particulate matter
(PM), all measured over the Federal Test Procedure (FTP) and applicable
for the full statutory useful life of the vehicle. For MY1996 and
thereafter, all LDVs and the LLDTs must comply with the Tier 1
standards. The federal motor vehicle program also includes other
standards and requirements that apply to new motor vehicles, such as
evaporative emissions, cold temperature CO, on-board refueling vapor
recovery, and on-board diagnostic equipment.
Under section 207 of the Act, manufacturers must warrant the
emissions performance of their new, certified motor vehicles for a
portion of the vehicle's full useful life. EPA enforces the federal
standards through its Selective Enforcement Audit (SEA) program
(assembly line testing) and through in-use compliance testing and
recall programs.
2. California Low Emission Vehicle Program
Section 209 of the CAA generally preempts states from adopting and
enforcing standards relating to emissions from new motor vehicles and
new motor vehicle engines. 8 However, the Act provides two
exceptions. One allows EPA to waive preemption for the State of
California, permitting that state to adopt and enforce its own motor
vehicle emissions control program. 9 The second exception
allows states other than California to adopt and enforce California's
standards, if certain specified conditions are met. 10
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\8\ Clean Air Act section 209(a), 42 U.S.C. 7543(a).
\9\ Clean Air Act section 209(b), 42 U.S.C. 7543(b).
\10\ Clean Air Act section 177, 42 U.S.C. 7507.
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In 1990, California adopted the LEV program, containing three basic
components. First, manufacturers must certify new motor vehicles to one
of the following five emissions categories: California Tier 1, TLEVs,
LEVs, ULEVs, and ZEVs. Second, manufacturers must comply with an
overall fleet average NMOG standard. This requirement began in MY1994
and becomes more stringent over time. The third element is a ZEV
production mandate, which requires manufacturers to include a certain
percentage of ZEVs in their LDV fleet for sale in California.
Initially, the ZEV mandate would have begun in MY1998, when two percent
of a manufacturer's LDV fleet was required to be ZEVs. This would have
increased to five percent in MY2001 through MY2002, then ten percent in
MY2003. However, at a March 28, 1996, hearing CARB approved changes
that eliminate all of the ZEV mandates except for the ten percent
requirement beginning in MY2003. EPA granted California a waiver of
preemption for its LEV program in January 1993. See 58 FR 4166 (January
13, 1993).
The States of New York, Massachusetts, New Jersey, Connecticut,
Rhode Island, and Vermont, all of which are members of the OTR, have
adopted all or portions of the California LEV program pursuant to
section 177 of the Act. Massachusetts and New York are currently
implementing their LEV programs. Connecticut, New Jersey and Rhode
Island have also adopted the California LEV program, excluding the ZEV
production mandate, effective in MY1998 for Connecticut and MY1999 for
the other two states. In addition, Vermont has adopted the California
LEV program effective in MY1999, which includes a ZEV sales target,
that would apply only if certain criteria are met. As a result of
automobile manufacturers' challenges to the New York and Massachusetts
LEV programs, federal district and appellate court decisions have
upheld these programs.11
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\11\ Motor Vehicle Manufacturers Association v. New York State
Department of Environmental Conservation, 79 F.3d 1298 (2d Cir.
1996); American Automobile Manufacturers Association (AAMA) v.
Commissioner, Massachusetts Department of Environmental Protection,
31 F.3d 18 (1st Cir. 1994); Motor Vehicle Manufacturers Association
v. New York State Department of Environmental Conservation, 17 F.3d
521 (2nd Cir. 1994); MVMA v. NYSDEC, 869 F. Supp. 1012 (N.D.N.Y.
Oct. 24, 1994); and AAMA v. Greenbaum, No. 93-10799-MA (D. Mass.
Oct. 27, 1993).
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3. OTC Efforts To Reduce Motor Vehicle Emissions in the OTR
Since it was convened in 1991, the OTC has worked on addressing the
contribution of motor vehicles to the northeast ozone problem. It has
identified two methods of controlling new motor vehicle emissions--
state-by-state adoption of the CAL LEV program and National LEV. The
auto manufacturers have said they prefer National LEV. As part of the
process of achieving state-by-state adoption of CAL LEV throughout the
OTR, the OTC sought and obtained from EPA a SIP call requiring each OTC
State to adopt CAL LEV unless the State could show that the program was
not necessary for the State to meet certain of its Clean Air Act
obligations or unless there was an equivalent national motor vehicle
program. Although a recent court decision struck down this SIP call and
thus removed one of the mechanisms for the OTC to achieve the goal of
state-by-state adoption of the CAL LEV program, the OTC States remain
free to pursue this goal through other means.
A summary of the OTC LEV decision is provided here. Interested
parties are referred to the OTC LEV decision SNPRM and Final Rulemaking
(FRM) for additional information. See 59 FR 48664 (September 22, 1994);
and 60 FR 4712 (January 24, 1995).
In February, 1994, the OTC formally recommended, pursuant to
section 184(c) of the CAA, that EPA require all OTC States to adopt an
OTC LEV program in their SIPs. The OTC's recommended LEV program would
have required that, beginning in MY1999, all new LDVs and LLDTs sold or
otherwise introduced into commerce in the OTR be certified to
California LEV program standards. In addition, manufacturers would be
required to meet California's fleet average NMOG standard for such
vehicles. The OTC recommended that member states be allowed, but not
required, to adopt California's ZEV mandate, unless EPA determined that
the CAA required a state to adopt the ZEV mandate in order to adopt the
NMOG average part of the LEV program. In addition, the OTC stated that
it expected EPA to evaluate alternatives to OTC LEV.
On December 19, 1994, EPA approved the OTC recommendation. EPA
found that the emissions reductions resulting from OTC LEV or a LEV-
equivalent program are necessary for ozone nonattainment areas in the
OTR to achieve attainment (and maintenance) by the applicable deadline,
and that the OTC LEV program is consistent with the CAA. See 60 FR 4712
(January 24, 1995). Based on that approval, EPA issued to each OTC
State a finding that its SIP is substantially inadequate to meet
certain requirements insofar as the SIP would not currently achieve
those necessary emissions reductions. EPA found that states could
satisfy the finding of SIP inadequacy by adopting OTC LEV or by
submitting a ``shortfall'' SIP.12 The States were required
to
[[Page 31199]]
submit a SIP revision on or before February 15, 1996, to cure this
inadequacy.
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\12\ As described in the OTC LEV decision, a ``shortfall'' SIP
program must contain adopted measures that make up the shortfall
between (1) the emission reductions necessary to prevent adverse
consequences on downwind nonattainment, as determined by EPA in the
OTC LEV decision, and (2) the emission reductions that would be
achieved by the measures mandated by the Clean Air Act and
potentially broadly applicable measures, as identified by EPA in the
OTC LEV decision. See 60 FR 4730 (January 24, 1995).
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In the OTC LEV decision, EPA also said that the SIP inadequacy
would be satisfied if EPA were to determine through rulemaking that a
federal 49-state motor vehicle emission control program was an
acceptable LEV-equivalent program and that such program was in effect.
Thus, if EPA were to find that auto manufacturers had opted into a LEV-
equivalent federal motor vehicle emissions control program deemed
acceptable by EPA through rulemaking action, then states would be
relieved of the obligation under the OTC LEV decision to adopt the OTC
LEV program in their SIPs. EPA had proposed that National LEV would be
such a program, provided that the OTC States and auto manufacturers
made sufficient commitments to it.
Only six states made submissions in response to the OTC LEV SIP
call. New York and Massachusetts both submitted LEV programs that are
currently in effect. Both programs include ZEV mandates. Connecticut,
New Jersey, Rhode Island, and Vermont submitted OTC LEV programs in
which OTC LEV is a ``backstop'' program. Manufacturers would not have
to comply with those four states' programs if National LEV is an
acceptable-LEV equivalent program and is in effect. New Jersey's
program is conditioned further--it will not be implemented unless a
minimum number of OTC States (excluding itself), represented by 40
percent of new vehicles registered in the OTR in MY1999, also implement
the OTC LEV program not later than MY1999. Vermont also has a ZEV sales
target, which would apply if certain criteria are met, independent of
whether National LEV is in effect.
In a recent decision, the Court of Appeals struck down EPA's OTC
LEV decision and SIP call. Virginia v. EPA, No. 95-1163 (D.C. Cir.
March 11, 1997). The Court found that, while section 184 of the CAA
gives EPA authority to require the OTC States to adopt specific
pollution control measures upon the recommendation of the OTC, sections
177 and 202(b)(1)(c) of the CAA preclude EPA from requiring the OTC
States to adopt the CAL LEV program prior to MY2004. The Court let
stand EPA's underlying finding that the region needs substantial
emissions reductions to mitigate the effects of air pollution transport
and to bring (and keep) nonattainment areas in the region into
attainment for ozone. It also affirmed the right of each State to adopt
the CAL LEV program if it so chooses.
The Court decision does not dramatically alter the need for or
potential benefits of National LEV. Although National LEV's development
has been closely tied to EPA's OTC LEV decision and SIP call, National
LEV is not dependent on them. National LEV was developed as an
alternative to state-by-state adoption of CAL LEV in the OTR. Although
the Court decision may affect the number of OTC States that will
actually adopt CAL LEV, it does not limit states' ability to adopt CAL
LEV and thus does not solve the problems created for manufacturers when
some states have CAL LEV and some states rely on the federal program.
Although the states have the option of adopting CAL LEV on a state-by-
state basis, National LEV may provide greater emission reductions to
upwind states than state-by-state adoption of CAL LEV because some
states may not adopt CAL LEV.
4. Public Process
The Agency has employed a public process designed to provide
maximum opportunity for public participation in an expedited decision-
making process. A complete discussion of the history of this process
can be found in the NPRM published on October 10, 1995 (60 FR 52734).
In addition to the numerous public meetings and other opportunities for
public comment described in that notice, EPA received numerous comments
on the NPRM and held a widely attended public hearing on November 1,
1995. In developing today's rule, the Agency has fully considered all
of the public comments timely filed in this rulemaking. EPA's responses
to significant comments are contained either in today's rule or in the
detailed Response to Comments document contained in the public docket.
Where EPA notes that it is deferring resolution of certain issues
raised in the NPRM, the response to comments on those issues is also
deferred. In addition to relying on this rule and the Response to
Comments document as the statement of basis and purpose for today's
action, EPA is also relying on the detailed explanations in the NPRM
where it references those explanations.
D. National LEV Program
1. Agreement--A Necessary Predicate for the National LEV Program
The National LEV program is a voluntary program that cannot be
implemented without the agreement of the auto manufacturers and the OTC
States. EPA cannot require the auto manufacturers to meet the National
LEV standards, absent the manufacturers' consent, because section
202(b)(1)(C) of the Clean Air Act prevents EPA itself from mandating
new exhaust standards applicable before MY2004. The auto manufacturers
have said that they will not agree to be bound by the National LEV
program unless the OTC States accept National LEV as an alternative to
OTC state adoption of CAL LEV programs under section 177. EPA does not
have the authority to require the OTC States to accept the National LEV
program. Thus, National LEV is dependent upon the auto manufacturers
and the OTC States voluntarily committing to the program.13
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\13\ See Virginia v. EPA, No. 95-1163 (D.C. Cir. March 11,
1997), slip. op. at 10, footnote 4. (``The program is voluntary
because section 202 of the Clean Air Act forbids EPA from itself
modifying motor vehicle emissions standards `before the model year
2004.' '').
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The OTC States and auto manufacturers have been negotiating a
voluntary, national program that would include committing to National
LEV and to the introduction of ATVs in the OTR. They had hoped to
memorialize their agreement in a comprehensive MOU to be signed by all
OTC States and all auto manufacturers with sales in the United States.
The OTC States (collectively) and the auto manufacturers (collectively)
have each initialed MOUs reflecting their willingness to agree to a
National LEV program. Although the MOUs are different in some respects,
they show basic agreement on the national program contained in the
regulations promulgated today. The ATV component (discussed in more
detail in footnote 52 below) is not a part of EPA's regulations, but
would be an agreement between the OTC States and the auto manufacturers
that would be contained in an attachment to the MOU if that MOU is
finalized.
Although the OTC States and the auto manufacturers have reached
agreement on most issues and EPA today is promulgating the regulatory
framework for National LEV, some issues are still unresolved. When EPA
published the NPRM, it anticipated that the OTC States and the auto
manufacturers would continue to make progress on these few remaining
issues (mainly related to OTC State commitment to the
[[Page 31200]]
National LEV program), and thus left these issues to be addressed in a
later SNPRM which could be informed by the anticipated agreement. The
OTC States and the auto manufacturers have not yet resolved these
issues. Rather than lose the potential regional and national public
health benefits of National LEV, EPA intends to publish an SNPRM to
take comment on the remaining issues that must be finalized for the OTC
States and the auto manufacturers to commit to the
program.14 EPA will then resolve these issues in a
supplemental final rule.
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\14\ Primarily, the SNPRM will address the OTC States'
commitment to National LEV (the nature, the mechanisms and the
timing of the commitments) and related issues. As a result of the
bifurcation of the National LEV rulemaking process, issues that were
noticed in the NPRM may not be decided finally until the final rule
that follows the SNPRM. This rule and the Response to Comments note
those issues that are not being decided finally in today's rule. The
SNPRM will describe the issues on which EPA is taking further
comment.
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EPA is hopeful that, after these remaining issues are resolved, the
OTC States and the auto manufacturers will agree to National LEV. The
program would have many benefits to the nation as a whole, the OTC
States, and the auto manufacturers. A set of uniform, more stringent
standards that apply in 49 states is a more environmentally beneficial
and economically efficient approach to achieving emissions reductions
from new motor vehicles than a ``patchwork'' of California standards in
some states and federal standards in others. The National LEV program
would achieve at least the same level of emissions reductions in the
OTR as would the OTC state-by-state adoption of the CAL LEV program.
The introduction of LEVs nationwide would help alleviate pollution
transport problems in the OTR and in other states and would eliminate
concerns about non-LEV vehicles being introduced into the OTR from
states outside the region that have not adopted CAL LEV. In addition, a
national program would impose less administrative burden on the OTC
States and other states than would state-by-state adoption and
enforcement of CAL LEV. Finally, a cooperative, partnership approach to
program implementation should provide benefits beyond those achieved
through a traditional command-and-control approach.
2. Description of National LEV Program
In today's final rule EPA is promulgating a set of voluntary
National LEV standards to control exhaust emissions of air pollutants
from new motor vehicles. These standards will apply when the OTC States
and the motor vehicle manufacturers commit to the National LEV program.
The National LEV new tailpipe emission standards and related
requirements will apply in addition to the applicable federal Tier 1
tailpipe standards and will not change for the duration of the
program.15 The National LEV standards and requirements
include: (1) tailpipe emissions standards for NMOG, NOX, CO,
formaldehyde (HCHO), and PM; (2) fleet average NMOG values; (3)
allowance for the use of California Phase II reformulated gasoline
(RFG) as the test fuel for the tailpipe standards; (4) certain
California on-board diagnostic system requirements (OBD II), excluding
anti-tampering provisions; and (5) averaging, banking and trading
provisions.
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\15\ The CAA requires that all MY1996 and later LDVs and LLDTs
meet the Tier 1 exhaust emission standards at the time of
certification. As noted later in section IV, most of the Tier 1
emission standards have numerically equivalent or more stringent
analogues in the National LEV standards. Thus, certification to the
National LEV standards directly demonstrates compliance with most of
the Tier 1 standards. Manufacturers must still demonstrate
compliance with those remaining Tier 1 standards that lack National
LEV analogues.
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In general, the National LEV standards and related requirements are
patterned after California's more stringent tailpipe standards and
fleet average NMOG standards. Under the National LEV program,
manufacturers can certify LDVs and LLDTs to one of the following
certification categories (listed in order of increasing stringency):
Tier 1, TLEV, LEV, ULEV, or ZEV. Each certification category contains
tailpipe emission standards for NMOG, CO, NOX, formaldehyde
(HCHO), and PM. Manufacturers that opt into the National LEV program
will be required to produce and deliver for sale a combination of
vehicles that complies with an annual fleet average NMOG value. Sales
of LDVs and LLDTs in the OTR will have to meet an increasingly
stringent fleet average NMOG standard from MY1997 16 to
MY2001. Beginning with MY2001, manufacturers will be required to comply
with a nationwide (except California) fleet average NMOG standard for
LDVs and LLDTs that is equivalent to the average NMOG emissions of a
100 percent LEV fleet. An averaging, banking and trading program
comparable to California's can be used to meet the fleet average NMOG
requirements.
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\16\ As discussed in n. 17 below, EPA is using MY1997 as a
placeholder for the actual start date of National LEV.
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As National LEV is voluntary, manufacturers will only have to
comply with the National LEV standards if they choose to opt into the
program. Once they opt in, however, manufacturers must stay in the
National LEV program and comply with its standards. Manufacturers may
opt out of National LEV only under certain circumstances which, if they
occurred, would change the basic presumptions upon which the
manufacturers opted into the program. Such conditions are an OTC
State's failure to meet or keep its commitment regarding adoption of a
State motor vehicle program under CAA section 177 or a change in one of
the designated ``Stable Standards'' (as discussed below in section
IV.A.2.a).
Any manufacturer that opts into the National LEV program will be
fully subject to its requirements. Barring one of the limited and
unlikely events that would allow manufacturers to opt out of the
program, manufacturers will be required to meet the National LEV
standards and requirements for all of the model years covered by the
program. A manufacturer that fails to meet these requirements will be
subject to the same enforcement measures as exist for violation of any
federal motor vehicle emission standard promulgated under section
202(a) of the Act. Once manufacturers opt into National LEV, they will
find administration and enforcement of its requirements
indistinguishable from administration and enforcement of the rest of
the federal motor vehicle emissions program.
Manufacturers that opt into the National LEV program will have to
comply with the specified tailpipe emissions and related standards
beginning in MY1997 17 for LDVs and LDTs offered for sale in
the OTR, and beginning in MY2001 for those same vehicle categories
offered for sale in the rest of the country, except California. The
National LEV standards will continue to apply until the first model
year for which manufacturers must meet a mandatory federal program that
is at least as stringent as the National LEV program. By statute, EPA
can not promulgate mandatory exhaust standards more stringent than Tier
1 standards (``Tier 2 standards'') applicable before MY2004, so the
National LEV standards will apply at least through MY2003.
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\17\ Throughout this rule, EPA is using MY 1997 as a placeholder
for the start date of National LEV. MY1997 is the start date in the
MOUs initialled by the auto manufacturers and the OTC States. EPA
believes that MY1997 is an unrealistic start date given the court
decision vacating EPA's OTC LEV decision and given the likely timing
of final agreement on National LEV. In the upcoming SNPRM, EPA will
take comment on the appropriate start date for National LEV.
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Vehicles in the National LEV program must comply with all other
federal
[[Page 31201]]
requirements applicable to LDVs and LLDTs for the appropriate model
year, including emissions standards and requirements, test procedures,
and compliance and enforcement provisions. However, as part of EPA's
effort to reinvent environmental regulations by reducing regulatory
burden without sacrificing environmental benefits, EPA is also
harmonizing, to the greatest extent possible, federal and California
standards and test procedures. Thus, today's rule includes changes to
current federal regulations designed to harmonize certain federal and
California standards and test procedures, and sections elsewhere in
this preamble summarize harmonization efforts in other rules. This
should reduce the regulatory burden on manufacturers by facilitating
the design, certification, and production of the same vehicles to meet
both federal and California requirements.
IV. Provisions of the National LEV Program
The National LEV regulations establish the structure and
requirements of a voluntary program to reduce tailpipe emissions from
motor vehicles, as summarized in the above section III.D.2. The
following sections lay out the provisions of the program in more
detail. First, EPA describes the structure of the voluntary program,
explaining how manufacturers opt into the program, under what limited
conditions they could opt out of the program, and the program's
duration. The next section lays out the National LEV standards and
requirements that manufacturers would be opting into. These include the
tailpipe emissions standards for individual vehicles, the fleet-wide
average emissions standards, and the averaging, banking and trading
program through which the fleet-wide standards would be implemented.
Finally, EPA discusses the legal authority for the voluntary National
LEV program and the enforceability of these provisions.
A. Program Structure
This section discusses basic structural elements of the National
LEV program: the process and timing for manufacturers to opt into the
program and for EPA to find that the program is ``in effect''; the
conditions allowing, process for, and ramifications of, a
manufacturer's decision to opt out of the program; and the duration of
the program.
1. Opt-In to National LEV and In-Effect Finding
The opt-in provisions are designed to provide a simple mechanism
that allows EPA to determine readily when a manufacturer has opted in
and become legally subject to the National LEV program requirements. A
motor vehicle manufacturer would opt into the program by submitting a
written notification that unambiguously and unconditionally states that
the manufacturer is opting into the program, subject only to the
condition that EPA finds the program to be in effect.
Today's regulations set forth various requirements for opt-in
notifications. The opt-in notification must state that the manufacturer
will not challenge EPA's authority to establish the National LEV
program and to enforce it once a manufacturer has unconditionally opted
into the program. Parties that choose to opt into a program that they
have volunteered to establish should agree that they will not challenge
the program later, particularly in the context of an enforcement action
brought by EPA due to a party's failure to comply with the program
requirements. The regulations require the manufacturers' notifications
to contain specified language renouncing such legal challenges. The
opt-in notification also must be signed by a person or entity within
the corporation with authority to bind the corporation to its choice.
The signatory must hold the position of Vice President for
Environmental Affairs, or a position of equivalent authority.
The opt-in will become binding upon EPA's receipt of the
notification or, if it is conditioned on EPA making an in-effect
finding, upon the satisfaction of that condition. Under today's rule,
any conditional opt-ins would become fully binding when EPA finds that
National LEV is in effect. Once EPA has promulgated the few outstanding
provisions of the National LEV program related to the OTC State
commitments and begun accepting manufacturer's opt-ins and OTC State
commitments to the program, EPA can make the finding that the program
is in effect without any additional rulemaking if all the manufacturers
listed in the regulations have opted into the program. Upon EPA making
an in-effect finding, National LEV will be fully enforceable.
It is possible that the final regulations EPA intends to issue
after taking further comment on OTC State commitments to National LEV
(for which EPA will provide further notice and opportunity to comment)
may result in changes or additions to the opt-in provisions promulgated
today. For example, at this time, EPA is not establishing deadlines
either for auto manufacturers to opt into the program or for EPA to
find that the program is ``in effect''. Rather than making a final
decision on these issues today, EPA expects to set such deadlines as
part of the final regulations it intends to issue after taking further
comment on OTC State commitments and related issues.
2. Opt-Out From National LEV
For the National LEV program to be useful and beneficial, it should
continue in effect for a substantial period of time stretching into the
next decade. States seek certainty regarding emissions benefits over
time, while motor vehicle manufacturers seek certainty regarding
emission standards to plan future production. Also, to give states SIP
credits for National LEV, EPA must find that the emissions reductions
will be enforceable over the intended duration of the program. All of
these objectives require that the program be stable over time, and the
opt-out provisions are structured to support this goal.
Once manufacturers have voluntarily chosen to opt into the program
and any permissible conditions of their opt-in have been met, they can
opt out of the program only under a few specified circumstances, or
``offramps.'' These offramps are limited to: (1) an OTC State's failure
to meet or keep its commitment regarding adoption or retention of a
state motor vehicle program under section 177; or (2) EPA modification
of certain specified standards or requirements over the manufacturers'
objection.
If a manufacturer were to opt out of the National LEV program, when
that opt-out became effective the manufacturer would become subject to
all standards that would apply if National LEV did not exist. The
federal Tier 1 tailpipe emissions and related standards would apply, as
would any applicable state standards promulgated under section 177. In
the SNPRM on OTC State commitments, EPA will take comment on what state
section 177 standards would be applicable, in light of the requirements
of section 177 and how the OTC States and manufacturers have addressed
this issue in their initialed MOUs. All vehicles certified under the
National LEV standards, however, would have to continue to comply with
those standards, which would have been incorporated as conditions of
the certificate under which those vehicles were sold. In addition, each
manufacturer would be held responsible for any debits it held at the
time it opted out.
[[Page 31202]]
a. Conditions allowing opt-out. (1) OTC states' failure to meet or
keep their commitments. The first condition allowing manufacturers to
opt out is a failure of any OTC State to meet its commitment regarding
adoption or retention of a section 177 program that does not allow
compliance with National LEV as a full alternative to compliance with
the state program. Since National LEV is intended to provide an
alternative to OTC state-by-state adoption of CAL LEV, manufacturers
should not be bound to stay in the National LEV program if an OTC State
requires them to comply with a section 177 program contrary to the
terms of the final agreement. This offramp not only gives manufacturers
recourse if an OTC State does not fulfill its part of the bargain, but
also encourages the OTC States to fulfill their commitments by setting
a serious penalty for breach of their commitments.
Unfortunately, EPA is unable to finalize this section of the
National LEV regulations now.18 When EPA proposed National
LEV, the manufacturers and the OTC States had not yet reached agreement
on the exact content and form of such an OTC State commitment. Details
that had yet to be resolved concerned what the OTC States would commit
to do regarding adoption or retention of the section 177 programs (both
LEV and ZEV requirements), the timing of any agreed upon actions, and
possible instruments for such state commitments (which might be some
combination of SIP revisions, consent decrees, legislative resolutions,
letters from the State Attorneys General, Executive Orders from the
Governor, letters from the Governor to EPA, or an MOU with the
manufacturers). EPA had expected that the OTC States and auto
manufacturers would have reached agreement on these issues by this
time, and had planned to issue an SNPRM taking comment on the whether
and how the National LEV regulations would reflect the OTC States' and
auto manufacturers' agreement on these issues. The SNPRM would have
taken comment on the stability and enforceability of the program in
light of the nature of those commitments. Unfortunately, the auto
manufacturers and the OTC States have not yet reached agreement on
these issues.
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\18\ Today's regulations do not provide for an opt-out based on
this condition. EPA expects to propose to add this condition, as
discussed below.
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Before the National LEV program can go into effect, EPA will need
to resolve the OTC State commitment issues mentioned above. EPA will
issue an SNPRM taking comment on these additional issues and then
promulgate a final rule to complete the National LEV rulemaking that
was initiated by the NPRM.
(2) EPA Changes to Stable Standards. With certain exceptions,
manufacturers will also be able to opt out if EPA changes a motor
vehicle requirement that it has designated a ``Stable Standard.'' The
Stable Standards, which are listed in Table 1, are divided into two
categories: Core Stable Standards and Non-Core Stable Standards. Core
Stable Standards generally are the National LEV standards that EPA
could not impose absent the consent of the manufacturers. Non-Core
Stable Standards are other federal motor vehicle standards that EPA
does not anticipate changing for the duration of National LEV. For both
Core and Non-Core Stable Standards, EPA can make changes to which
manufacturers do not object. For Non-Core Stable Standards, EPA can
also make changes that do not increase the stringency of the standard
or that harmonize the standard with the comparable California standard.
EPA can make other changes to any of the Stable Standards, but such
changes would allow the manufacturers to opt out of National LEV.
The primary purpose of this provision is to provide manufacturers
certainty that the voluntary standards that EPA does not have authority
to mandate (absent manufacturers' consent) are not changed without
their consent. The additional stability of the other motor vehicle
standards that EPA is providing by designating them Non-Core Stable
Standards should provide manufacturers with additional incentive to opt
into National LEV. Today's rule follows the same basic approach set out
in the proposal, but incorporates several refinements, as discussed
below. This section lists the Stable Standards, explains the rationale
for including each requirement as a Stable Standard, and explains what
types of changes EPA can make without giving manufacturers the
opportunity to opt out of National LEV.
(i) Designation of Stable Standards. EPA has refined the approach
to the Stable Standards in the proposal by subdividing them into two
categories: Core Stable Standards and Non-Core Stable Standards. Core
Stable Standards generally are standards specific to the National LEV
program (and certain related requirements). Non-Core Stable Standards
generally are other motor vehicle pollution control requirements that
the Agency does not anticipate changing for the duration of the
National LEV program. The list of Core and Non-Core Stable Standards is
provided in Table 1.
Table 1.--Designation of Core and Non-Core Stable Standards
------------------------------------------------------------------------
Type Stable standard
------------------------------------------------------------------------
Core Stable Standards..................... TLEV, LEV, ULEV, and ZEV
tailpipe emission standards
(``LEV standards'').
Fleet average NMOG standards
and related banking and
trading provisions.
Federal Test Procedure (FTP)
(as used for determining
compliance with the LEV
tailpipe standards, i.e.,
``conventional'' or ``on-
cycle'' FTP).
Certification test fuel
specifications (as used for
determining compliance with
the LEV standards).
Low volume manufacturer
provisions.
Limitations on the sale of
TLEV and Tier 1 vehicles in
the NTR.
Non-Core Stable Standards................. ``Off-cycle'' emissions
standards.
Supplemental Federal Test
Procedures (SFTP) (as used
for determining compliance
with these off-cycle
emission standards).
On-board diagnostic (OBD-II)
requirements.
Cold temperature carbon
monoxide (Cold CO)
requirements.
Evaporative emissions
control requirements.
Onboard refueling vapor
recovery requirements.
Reactivity adjustment
factors (RAFs) (used to
determine compliance with
LEV standards).
------------------------------------------------------------------------
[[Page 31203]]
The Core Stable Standards include:
The TLEV, LEV, ULEV and ZEV tailpipe standards (the ``LEV
standards''),
The fleet average NMOG standards, and
The limitation on the sales of TLEVs and Tier 1 vehicles
in the NTR.
These requirements are all standards that EPA could not itself require
manufacturers to meet prior to MY2004 (absent manufacturer consent)
because section 202(b)(1)(C) of the Act prohibits EPA from unilaterally
imposing numerical standards as stringent as these prior to MY2004.
Since EPA could not impose these standards unilaterally, EPA does not
believe it should have authority to change these standards
unilaterally. Designating these numerical standards as Core Stable
Standards protects the manufacturers' reasonable expectations in opting
into the voluntary standards by providing an offramp should EPA change
those standards without their consent.
The Core Stable Standards also include:
The specifications for the ``conventional'' or ``on-
cycle'' FTP, as revised,
The certification test fuel for testing compliance with
LEV standards,
The NMOG fleet average banking and trading program, and
The low-volume manufacturer requirements.
These requirements are designated as Core Stable Standards because
changes to these requirements may affect the ability of manufacturers
to meet the LEV standards or the NMOG fleet average standards, or
because these requirements are directly related to those standards.
(Changes to the reactivity adjustment factors (RAFs) might also affect
the ability of manufacturers to meet the LEV and NMOG fleet average
standards, but these are designated Non-Core Stable Standards, for the
reasons discussed below.)
The on-cycle FTP, the certification test fuel, and the NMOG fleet
average banking and trading program are the means through which
compliance with the numerical standards will be determined. The on-
cycle FTP and the test fuel directly impact the ability of
manufacturers to meet the LEV standards because changes to program
elements like the FTP drive cycle, road simulation hardware, or the
blending parameters of the fuel, may translate into changes in the
emission test scores of vehicles. These test scores are themselves the
basis for pass/fail decisions with respect to the LEV standards. The
NMOG fleet average banking and trading program will allow banking and
trading of credits to give manufacturers flexibility in meeting the
fleet average NMOG standard. The banking and trading program is part of
the way that manufacturers will demonstrate compliance with the NMOG
fleet average standard. Changing this program could adversely affect a
manufacturer's ability to comply with the fleet average standard. Given
the voluntary nature of the LEV standards and the NMOG fleet average
standard, EPA believes that manufacturers are entitled to certainty not
only with respect to the standards, but also with respect to the means
by which the manufacturers' compliance with those standards will be
determined.
The final Core Stable Standard, the low volume manufacturer
provisions (including the definition of low volume manufacturer and the
relaxed phase-in schedule), directly determines the stringency of the
NMOG fleet average standards. The phase-in schedule provides
manufacturers meeting the low volume definition higher (less stringent)
NMOG fleet average standards for the initial years of the National LEV
program.
The Non-Core Stable Standards include:
OBD II requirements,
Cold temperature CO requirements (through
MY2000),19
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\19\ Section 202(j)(2) of the Act requires the Administrator to
assess the need for further reductions in cold CO emissions from
MY2001 and later model year vehicles. Therefore, unlike the other
Stable Standards, EPA can change cold CO standards for MY2001 and
later model year vehicles without triggering an off-ramp.
---------------------------------------------------------------------------
Evaporative emissions requirements, and
Onboard refueling and vapor recovery requirements.
As described in more detail in the proposal and in the Response to
Comments document for this rule, EPA reviewed each of these
requirements and determined that it was highly unlikely that EPA would
need to change these requirements for the duration of the National LEV
program (or prior to MY2001, for cold CO requirements). With the
exception of cold CO (which EPA has a statutory obligation to revisit
for MY2001), EPA does not have statutory obligation to revise or re-
evaluate these standards for the expected duration of the National LEV
program. EPA's conclusion that these standards will not need to be
changed for the expected duration of National LEV (prior to MY2001 for
cold CO) is based on when these requirements were promulgated by EPA,
how long it would take to gather information to determine that a new
control level was appropriate, and EPA's knowledge of technology
development necessary to meet these requirements.
The Non-Core Stable Standards also include the recently promulgated
``off-cycle'' FTP standards and test procedure (Supplemental Federal
Test Procedure or SFTP). 61 FR 54852 (October 22, 1996). The ``off-
cycle'' FTP standards and SFTP (described in more detail in section
IV.B.5.a) were developed to test emissions resulting from typical
driving patterns that were not included in the test procedure that EPA
and CARB have used historically (the ``on-cycle'' FTP). Currently, the
only off-cycle standards are based on Tier 1 technology. Given the
lengthy testing and evaluation process that resulted in the off-cycle
standards and the time required to populate the fleet with vehicles
complying with the new standards and then to evaluate them for any
necessary revision of the standard, EPA does not foresee the need for
or the ability to revise the off-cycle standards and SFTP for Tier 1
vehicles for the expected duration of the National LEV program. As
discussed later in section IV.B.5.a, EPA anticipates that CARB will
adopt more stringent off-cycle standards for LEVs and ULEVs. Today's
rule is structured so that EPA can follow that change for National LEV
certification without allowing manufacturers to opt out of National
LEV. EPA intends to take comment on additional SFTP issues in the
SNPRM.
Finally, EPA has designated reactivity adjustment factors (RAFs) as
Non-Core Stable Standards. RAFs are used to adjust vehicle emission
test results to reflect differences in the impact on ozone formation
between alternative-fueled vehicles and a vehicle fueled with
conventional gasoline. (See discussion below in section IV.B.5.d.)
Including RAFs in the National LEV program puts two competing policy
concerns before the Agency. RAFs play a role in setting the overall
ability of manufacturers to meet the TLEV, LEV and ULEV tailpipe
standards, which is an important issue for the auto manufacturers in
deciding whether to opt into National LEV. One of the principles of
National LEV has been that EPA should not have unilateral authority to
change the tailpipe standards and related requirements because they are
voluntary standards. Following this principle, RAFs should be part of
the Core Stable Standards. EPA is concerned, however, that locking in
the RAFs for the duration of National LEV places more weight on them
than is warranted by the current scientific evidence. CARB set RAFs
based on the
[[Page 31204]]
best scientific evidence available, but recognized the need for further
investigation. California will be analyzing its current RAFs and
possibly revising the values. California has already set up a
scientific review panel, and the current RAFs apply only through
MY2000. California's recognition that its RAFs may need to be modified
weighs against casting the RAFs in concrete in National LEV and
supports placing them in the Non-Core Stable Standards. EPA believes an
appropriate compromise between the need for stability and the evolving
nature of RAFs is to include RAFs in the Non-Core Stable Standards, but
include a cap of 1.0 for all California Phase 2 RFG RAFs.
Placing RAFs in the Non-Core Stable Standards means that, to
harmonize the California and federal requirements, EPA can modify any
RAF value that California decides to change. This provides the Agency
with the necessary flexibility to address any uncertainty associated
with RAFs, but at the same time does not allow EPA to change RAFs
unilaterally without triggering an offramp. The limitation on changes
to the California Phase 2 RFG RAFs provides assurances to the
manufacturers that the stringency of the National LEV program will not
change dramatically for the gasoline-powered vehicles--the vast
majority of vehicle types covered by the program. The cap of 1.0 was
selected because it sets the maximum stringency from a change in RAFs
for California Phase 2 RFG at what the numerical emission levels would
be without RAFs. If California sets a RAF greater than 1.0 for
California Phase 2 RFG, EPA could amend the National LEV regulations to
provide for a RAF of 1.0 (without triggering an offramp). EPA may make
any harmonizing changes to RAFs for alternatively-fueled vehicles if
California modifies the existing RAFs, but this is expected to have a
minimal impact on the program overall due to the percentage of the
national fleet that is expected to be alternative-fueled vehicles.
(ii) Changes to Stable Standards. EPA can make certain types of
changes to Stable Standards without giving manufacturers the ability to
opt out of National LEV. EPA can make changes to which manufacturers do
not object. In addition, EPA can make any of the following types of
changes to Non-Core Stable Standards without triggering an off-ramp:
Changes that do not increase the stringency of the
standard,
Changes that harmonize the standard with the comparable
California standard, and
Changes applicable after MY2006.
First, a manufacturer cannot opt out of National LEV based on a
change to any Core Stable Standard unless the manufacturer has provided
written comment during rulemaking on that change stating that it is
sufficient to trigger a National LEV offramp. EPA believes this is
appropriate because it is not necessary to provide an offramp
opportunity for a change to which the manufacturer has no objection.
This is the only type of change EPA can make to a Core Stable Standard
without allowing manufacturers to opt out of National LEV.
Second, EPA can make technical changes and other revisions that do
not increase the overall stringency of a Non-Core Stable Standard,
without triggering an offramp. EPA commonly amends its emission control
program regulations to address technical and administrative concerns
raised by program implementation without affecting overall stringency.
Allowing manufacturers to opt out of the program for such changes would
endanger the stability of the National LEV program. EPA anticipates
that the flexibility to make technical changes that do not impact on
stringency will be appropriate for each of the designated Non-Core
Stable Standards. However, such amendments are more likely for
regulations like those of the off-cycle emission program, or the
evaporative emissions and onboard refueling vapor recovery program
(ORVR), which are recently promulgated, under review as part of ongoing
EPA streamlining efforts, or both.
Third, EPA may change any Non-Core Stable Standard to harmonize
with the comparable California standard or requirement, even if the
revision would increase the stringency of the standard or requirement,
without triggering an offramp. This policy is consistent with the goal
of harmonizing the federal and California programs. The ability to
harmonize with California without triggering an offramp will be
critical in particular for the off-cycle standards and SFTP (discussed
in detail in section IV.B.5.a below), the OBD program, and RAFs. The
ability to harmonize with California without triggering an off-ramp
provides a useful safety valve that helps improve the stability of
National LEV. If changes to an existing standard would produce
significant environmental benefits as a result of currently
unanticipated technological or other developments, based on
California's past approach to motor vehicle regulation and its
continuing need for air quality improvements, EPA believes California
is likely to make those changes. EPA can then achieve the same
environmental gains by amending its regulations to harmonize with
California.
Fourth, EPA can make changes to the Non-Core Stable Standards
without triggering an offramp if the change is effective after MY2006.
By MY2006, EPA expects that federal Tier 2 tailpipe standards will be
adopted and effective, and that the National LEV standards will be
replaced by the Tier 2 standards. In the event that the National LEV
program continues beyond MY2006, EPA cannot predict with a reasonable
degree of accuracy whether it expects to make revisions to the Non-Core
Stable Standards for an unlimited period after that date. For this
reason, EPA does not believe it would be appropriate to continue the
offramp opportunity for changes to Non-Core Stable Standards
indefinitely. EPA chose MY2006 as the end date for the Non-Core Stable
Standards offramp to provide manufacturers with increased regulatory
stability for the maximum intended duration of the National LEV
program.
Finally, EPA can make changes to, or promulgate, any federal motor
vehicle requirements that are not designated in today's regulations as
Stable Standards, without triggering an offramp opportunity. For
example, EPA believes it is essential to guarantee attainment of the
stringency of the requirements already in force (as opposed to
increasing the stringency of these current requirements) without
providing manufacturers the opportunity to opt out of the National LEV
program. Thus, the emissions durability program and defeat device
requirements, which are designed to ensure that vehicles actually
comply with the emissions standards over their useful lives, are not
Stable Standards. See the Response to Comments document for this rule
and the NPRM (60 FR 52744 (col. 3)). Similarly, an offramp would not be
triggered by EPA's adoption of a new requirement for motor vehicles,
such as any air toxics regulations.
b. Opt-Out Procedures. As proposed, to opt out of the National LEV
program, a manufacturer would follow the same notification procedure
used to opt in, additionally specifying the condition allowing opt-out
and providing supporting evidence for the applicability of that
condition. A manufacturer also would have to exercise its opt-out
option within the time limits discussed below.
Manufacturers generally would have to decide whether to exercise
their opt-out option within 180 days of the occurrence of the condition
triggering
[[Page 31205]]
opt-out.20 If one manufacturer sends EPA an opt-out
notification, however, the time limit for other manufacturers to opt
out is extended by 30 days beyond the 180 day period. For opt-outs
based on an EPA change to a Stable Standard, EPA would have an
opportunity to prevent the opt-out from coming into effect by
withdrawing the change to the Stable Standard before the effective date
of the opt-out (discussed below).
---------------------------------------------------------------------------
\20\ Where the offramp is an EPA change to a Stable Standard, a
manufacturer would have to exercise its opt-out option within 180
days of EPA's publication of the change in the Federal Register.
---------------------------------------------------------------------------
Setting a time limit for opt-out provides an important measure of
certainty and program stability by ensuring that if manufacturers
declined to opt out of the program despite the occurrence of an
offramp, all parties could rely on the program to continue.
Manufacturers opposed this approach, expressing concern that regardless
of whether a manufacturer individually believes the triggering event
sufficient to opt out, manufacturers are likely to opt out upon the
occurrence of any offramp for fear that one or more of their
competitors will opt out. Since manufacturers believe they might be at
a significant competitive disadvantage if they were subject to National
LEV while other manufacturers were not, all manufacturers would have to
opt out to protect themselves against that eventuality.
By allowing manufacturers an extended time period to opt out if
another manufacturer opts out, EPA is removing the incentive for any
manufacturer to exercise a protective opt-out. Instead, manufacturers
can wait to see if any other manufacturer opts out and then decide at
that time whether they want to exit the program. If no manufacturer
opts out within the specified time period, the program would remain in
place. The extended time for opt-out enhances program stability by
removing an incentive for manufacturers to opt out. Moreover, it
neither creates a new opportunity to opt out of the program nor reduces
program stability, because it only arises if an opt-out has already
occurred.
For opt-outs based on an EPA change to a Stable Standard, EPA has
further enhanced program stability by providing an opportunity for EPA
to withdraw a change to a Stable Standard if such a change in fact
results in an opt-out. If EPA retracts a change on which an opt-out is
based, this would invalidate the offramp and prevent the opt-out from
coming into effect. EPA would have to withdraw the change before the
effective date of the opt-out (discussed below). The need for such a
withdrawal might arise in a couple of possible circumstances. In
objecting to a proposed change to a Stable Standard, manufacturers only
have to indicate that they believe the change is sufficient to allow an
opt-out; it would not make sense to try to force manufacturers to make
a final decision as to whether they would actually opt-out before the
change is even finalized. Thus, a manufacturer's objection to a
proposed change would not necessarily indicate that the manufacturer
would opt out of National LEV based on the change, and EPA might decide
it is reasonable to go ahead with the change despite an objection.
Also, EPA may have reason to believe that it has adequately modified a
proposed change to accommodate objections, but a manufacturer might
still choose to opt out. Providing EPA an opportunity to withdraw the
change enhances program stability by protecting against such
possibilities.
Within sixty days of an opt-out notification, EPA is required to
determine whether or not the alleged condition allowing opt-out has
occurred and therefore whether the opt-out is valid. If the basis for
an opt-out were a change to a Stable Standard, EPA could find that the
opt-out is valid provided that EPA did not withdraw the change before
the effective date of the opt-out. If EPA withdrew the change in time,
concurrently with the withdrawal EPA could then find that the opt-out
was not valid. The determination of whether the opt-out was valid would
not be subject to notice and comment, but it would be a nationally
applicable final agency action, subject to judicial review under
section 307(b) of the Act. EPA intends to publish any such
determination in the Federal Register. If EPA were to agree that an
opt-out was valid, that determination would be a final agency action
authorizing the opt-out. Thus, even if the reviewing court subsequently
overturned EPA's decision, the manufacturer could not be held liable
for its failure to comply with the National LEV requirements prior to
the court's decision.
If EPA were to determine that an opt-out was invalid and the
manufacturer decided to challenge that determination in court, the
manufacturer would be on notice that its failure to comply with
National LEV in the interim would be at the manufacturer's own risk.
During the pendency of the manufacturer's action challenging EPA's
determination, the manufacturer would be able to certify Tier 1
vehicles lawfully.21 If the reviewing court ultimately
agreed with EPA's determination that the opt-out was invalid, however,
then the manufacturer was always subject to the National LEV
requirements and would be liable in an enforcement action to the extent
that it violated National LEV regulations during the pendency of the
court action. For example, a manufacturer would be liable for any
exceedance of the NMOG fleet average requirement during the pendency of
the court action.22 If the reviewing court ultimately agreed
with the manufacturer that the opt-out was valid, then the manufacturer
would not be held to National LEV program requirements from the
effective date of its opt-out notification.
---------------------------------------------------------------------------
\21\ The National LEV regulations generally allow manufacturers
to certify vehicles to Tier 1 standards as one of the five vehicle
emissions categories. However, sale of Tier 1 vehicles and TLEVs in
the OTR from MY2001 on is limited to those engine families that are
certified and offered for sale in California in the same model year,
and sales of these vehicles industry-wide in the NTR must not exceed
a cap of five percent, as discussed below in section IV.B.4. In the
event of a contested opt-out, manufacturers would not have to comply
with these limitations while the disposition of the opt-out remained
unresolved, although manufacturers would ultimately be liable for
violation of some provisions if a court were to find the opt-out
invalid.
\22\ The manufacturer would also remain liable for violation of
the limitation on sales of Tier 1 vehicles and TLEVs where the same
engine families were not certified and offered for sale in
California. However, the manufacturer would not be liable for any
exceedance of the five percent cap and the manufacturer's vehicles
would not be counted towards the industry-wide cap. This exemption
is driven by a practical implementation concern. In a situation
where one manufacturer had opted out of National LEV, it would be
very difficult to determine other manufacturers' liability under the
five percent cap in any equitable manner if the cap applied to the
manufacturer that had opted out.
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An EPA determination of the validity of an opt-out will allow for
quick judicial resolution of any dispute over an opt-out and provide
compliance guidance in the interim. Occurrence of an opt-out is likely
to call into question whether the National LEV program will continue,
which in part will depend on the validity of that opt-out. All parties
involved (i.e., EPA, the states, the manufacturer opting out, and the
other manufacturers) would need both of those issues resolved as soon
as possible.
Providing for EPA to make a determination regarding the validity of
an opt-out ensures that any dispute over an opt-out can be resolved in
the United States Court of Appeals for the District of Columbia.
Judicial review would be based on the Agency's administrative record.
Publication of EPA's determination in the Federal Register would start
a 60-day period for filing a petition for review of EPA's action under
section 307(b), thereby facilitating
[[Page 31206]]
early identification and faster resolution of opt-out challenges. This
approach provides greater certainty to both the OTC States and
manufacturers regarding the status of the National LEV requirements in
the interim. An EPA determination that an opt-out is valid provides the
manufacturer with a safe harbor, which allows it to stop complying with
National LEV without legal risk. Even if the opt-out is successfully
challenged, the manufacturer will not be liable for noncompliance with
National LEV during the period prior to the court's decision. Also, OTC
States are made aware that EPA believes that the opt-out is valid, and
those states without a CAL LEV program as a backstop will have more
incentive to adopt CAL LEV in a timely manner if the state wishes to
continue to control emissions from motor vehicles. If EPA determines an
opt-out is invalid, the manufacturer will know the risk it would run by
ceasing compliance.
If EPA were not required to make a determination on the validity of
an opt-out, the only ways to challenge an opt-out would be through a
declaratory judgment action or an enforcement action brought in the
district court. It is unclear whether a court would grant a motion for
a declaratory judgment on this issue. An enforcement action might take
several years to ripen, assuming that an action could not be brought
until the manufacturer violated the fleet average NMOG requirement and
then failed to make up the debits within the following model year.
Moreover, a district court opinion would probably be appealed to the
court of appeals. Overall, this approach could easily entail anywhere
from two to five years of uncertainty regarding whether the opt out was
valid, and whether National LEV would remain in effect. In addition,
litigation in the district courts is resource intensive, potentially
involving extensive discovery, and may produce inconsistent results
across different courts. In the absence of an EPA determination, there
is an additional disadvantage for a manufacturer. To find out whether
an opt out is valid, the manufacturer probably would have to stop
complying with National LEV and put itself at risk for penalties in
enforcement actions, prior to obtaining a judicial ruling on the
validity of the opt-out.
c. Effective Date of Opt-Out. Once EPA or the reviewing court
determines that an opt-out is valid, the effective date of the opt-out
will depend on the condition authorizing the opt-out, unless a
manufacturer specifies a later effective date than provided in the
regulations. First, if an OTC State were to adopt a state motor vehicle
program under CAA section 177 in a way that violated a commitment the
state had made, an opt-out would be effective for the next model
year.23 The ``next'' model year is the model year named for
the calendar year following the calendar year in which the state
violated the commitment. For example, if an OTC State violated a
commitment in 1999, the manufacturer's opt-out would be effective for
MY2000. Second, if EPA were to modify one of the Core Stable Standards
over the objection of a manufacturer, an opt-out would be effective
starting the model year that includes January 1 of the second calendar
year following the calendar year in which the manufacturer opted out.
(E.g., if a manufacturer opted out on July 1, 1999, the opt-out would
be effective starting with MY2001). However, if the first model year in
which manufacturers would have to comply with the changed Core Stable
Standard is earlier, the opt-out would be effective as of that earlier
date. Third, if EPA were to modify one of the Non-Core Stable Standards
in a way that would provide an offramp, the opt-out would be effective
for the first model year to which the modified standard applied.
However, for opt-outs based on changes to either a Core or Non-Core
Stable Standard, if EPA withdraws the change to the Stable Standard
before the date that the opt-out would have become effective, the opt-
out will not become effective. This approach balances achieving
emissions reductions, minimizing burden on manufacturers, and providing
incentives for the OTC States and EPA to keep their
commitments.24
---------------------------------------------------------------------------
\23\ This decision regarding violation of OTC State commitments
is not incorporated in the regulations that EPA is promulgating
today, but will be reflected in a later rule that finalizes the OTC
State commitment provisions of the program.
\24\ In the supplemental notice of proposed rulemaking, EPA may
propose to refine or modify this approach in light of the proposed
provisions of OTC state commitments. In particular, today's final
rule does not address the possibility of providing leadtime before
manufacturers become subject to any backstop ZEV mandates.
---------------------------------------------------------------------------
Making opt-out effective the next model year after an OTC State
violates a commitment regarding a section 177 program is consistent
with the basic agreement underlying the National LEV program; it also
increases the program's stability. National LEV is founded on the
concept of a voluntary agreement between the OTC States and the
automobile manufacturers. The heart of this agreement will be that the
manufacturers will comply with National LEV, in exchange for the OTC
States not requiring compliance with a CAL LEV program. Due to the
inherent legal constraints on attempting to bind a sovereign state to
future action, the manufacturers are limited in their ability to assure
through mechanisms enforceable in court that the OTC States could not
subsequently require compliance with a CAL LEV program. Thus, it is
important that the structure of the National LEV program provide strong
practical incentives to the OTC States to fulfill their commitments
under the agreement and provide recourse to the manufacturers if the
OTC States violate the agreement. Allowing manufacturers to opt out
effective the next model year after an OTC State violates a commitment
regarding a section 177 program provides a strong disincentive for a
state to take such an action. Assuming that a CAL LEV program is not in
place as a backstop in some OTC States, those states without backstops
would receive Tier 1 vehicles for over two years, given section 177's
lead-time requirements, and all states in the OTR would face higher
levels of emissions from migration and transport. This somewhat severe
result is appropriate as an incentive to fulfill one of the key
commitments underlying the National LEV program. Manufacturers are
entitled to opt out of National LEV quickly, once the fundamental basis
of the agreement has been violated.
The timing of the effective dates of opt-outs based on EPA changes
to Core or Non-Core Stable Standards is designed to be consistent with
elements of the fundamental agreement underlying the National LEV
program while enhancing the stability of the program. Manufacturers
commented that EPA's original proposal would not give them sufficient
time to evaluate the consequences of a change in a Stable Standard.
They also argued they would be less likely to opt out initially upon
such a change, if they could opt out later if they subsequently found
the consequences of the change too burdensome. EPA believes that an
unlimited time for opt-out introduces far too much uncertainty into the
National LEV program. Thus, the approach adopted in this rule gives
manufacturers more time to decide whether to opt out, providing 180
rather than 60 days, but not unlimited time. The approach also enhances
program stability by providing EPA an opportunity to withdraw any
change on which manufacturers have based an opt-out, and thereby to
remove the offramp.
The slightly different effective dates for opt-outs based on
changes to Core and Non-Core Stable Standards
[[Page 31207]]
recognize that these two sets of Stable Standards play different roles
in relation to the National LEV program. For changes to the Core Stable
Standards, it is appropriate to make an opt-out effective quickly,
either as soon as EPA has had the opportunity to withdraw its change
but has declined to do so, or even sooner if manufacturers would
actually have to comply with the change before that date. The Core
Stable Standards are the standards the manufacturers have volunteered
to meet that EPA could not have imposed. These are the National LEV
exhaust emissions standards, the fleet average NMOG standards, the
banking and trading provisions that implement these standards, and
certain other related requirements. The Core Stable Standards are
discussed more fully in sections IV.A.2.a.(2) and IV.B. of this rule.
If EPA were to modify any of these requirements over the manufacturers'
objections, National LEV would require the manufacturers to comply with
something that EPA did not have the authority to mandate and that the
manufacturer had never volunteered to meet. Thus, the effective date
for opt-outs based on changes to Core Stable Standards ensures that
manufacturers can exit the program as soon as EPA has had the chance to
prevent the opt-out by revoking the change, and even sooner, if
necessary to avoid forcing compliance with a requirement that EPA could
not have imposed absent National LEV. This protects the reasonable
expectations of the manufacturers volunteering for the National LEV
program. It also provides an additional incentive for EPA not to make
changes to Core Stable Standards that might allow an opt-out because
the opt-out could become effective in a time-frame shorter than the
time required for OTC States without backstops to adopt and implement a
CAL LEV program.
For opt-outs based on changes to Non-Core Stable Standards, EPA is
finalizing the proposed approach of delaying the effective date of an
opt-out until the first model year that manufacturers must comply with
the changed standard. Here too, EPA would have the opportunity to
withdraw the change prior to the effective date of the opt-out. This
approach protects emissions reductions without increasing
manufacturers' burdens or reducing program stability. EPA has
designated certain standards as Non-Core Stable Standards to give the
manufacturers some assurance regarding the stability of the federal
motor vehicle requirements as an additional incentive to volunteer for
the National LEV program. Although stability of the Non-Core Stable
Standards is one component of the National LEV program, it is not the
central exchange on which a voluntary agreement would be founded. To
the extent that a change in a Non-Core Stable Standard would not apply
until some future date, delaying the effective date of an opt-out until
that date would protect the OTC States from increased emissions caused
by an event outside of their control and would give those states
without a backstop some time to adopt a CAL LEV program. Yet the
manufacturers would not be burdened by this approach because as soon as
they were subject to the revised standard they would no longer have to
comply with National LEV. The only incentive for EPA to increase the
stringency of a Non-Core Stable Standard over a manufacturer's
objection, other than to harmonize with California, would be if the
overall emission reductions produced were greater than the emission
reductions from National LEV. Thus, while delaying the opt-out
effective date provides somewhat less of a disincentive for EPA to
trigger an offramp, this is appropriate, given that EPA would only take
such action if it would produce greater emissions reductions than would
National LEV.
d. Programs in Effect as a Result of Opt-Out. If a manufacturer
were to opt out of the National LEV program, when that opt-out became
effective the manufacturer would be subject to all standards that would
apply if National LEV did not exist. The federal Tier 1 tailpipe
emissions and related standards would apply, as would any applicable
state standards promulgated and in effect under CAA section 177. EPA
will address this issue further in the SNPRM on OTC State commitments.
e. Opt-Out By States. EPA received a couple of comments from oil
industry representatives asserting that all individual states should
have the opportunity to opt out of National LEV. EPA believes that an
approach allowing individual states to reject National LEV (except to
exercise section 177 rights) would be unnecessary, impracticable,
costly, and counter-productive to the goal of achieving clean air
nationwide. EPA also notes that no state requested such a right, even
though all states had the opportunity to comment on National LEV during
the public comment period and EPA has conducted extensive outreach
efforts to communicate with states about this program.
First, EPA believes that states will not want to opt out because
they will receive important benefits from National LEV. As described
above in section III.B, numerous areas around the country need
reductions in smog-forming pollutants and particulate matter. Even
those areas that do not have smog or PM problems will benefit from
reductions in emissions of carcinogens and other toxic air pollutants.
Second, the commenter that suggested an opt-out process for states
was motivated by concerns that National LEV might require new, costly
fuel controls. As described more fully below in section IV.B.7.,
today's regulations clarify that National LEV vehicles will not require
new fuel controls.
Third, giving a state the right to opt out of National LEV would
allow a state to require manufacturers to produce dirtier vehicles than
the manufacturers want to produce--something the CAA prohibits both
states and the federal government from doing, and that would be a
perverse policy. Under the CAA, a manufacturer has always had the legal
option of producing a vehicle that is cleaner than required--something
the manufacturer might do because it believes that the public favors
cleaner cars or because it is more cost-effective to manufacture
vehicles that meet both California and federal standards. The commenter
that suggested a state opt-out has not explained how such an option is
allowed by the CAA, nor has it shown sufficient policy justification
for limiting a manufacturer's right to make cleaner cars.
Fourth, establishing a mechanism to allow individual states to
reject air quality benefits by ``opting out'' of a national motor
vehicle program would run counter to the Congressionally-established
national approach to regulating motor vehicles. The CAA provides that
manufacturers would need to meet, at most, two sets of motor vehicle
standards nationwide. Congress recognized the substantial difficulties
and costs incurred by building and certifying vehicles to meet a
multiplicity of different standards and the burdens distribution of
those vehicles to different states would place on vehicle distribution
and sales networks. Manufacturers are free to build vehicles with
tighter emissions controls than required by law, and states and federal
agencies have no ability to stop manufacturers from doing so.
Finally, if there were a legal mechanism to allow an individual
state to opt out of National LEV, such opt-outs could substantially
increase costs for manufacturers, dealers, and ultimately consumers
both in opt-out states and others. If an individual state could reject
National LEV and require manufacturers to build to looser standards,
even if those vehicles were less expensive to produce, there is no
[[Page 31208]]
guarantee that manufacturers would supply such vehicles at lower prices
in that state. EPA understands that as a national industry, the
automotive industry largely redistributes any difference in costs among
states so that the same model costs about the same in all states.
Moreover, such dirtier vehicles might actually cost more to produce and
distribute, given that building vehicles to a different standard would
require specialized manufacture and distribution of vehicles. The
manufacturers support National LEV as a more cost-effective approach to
achieve emission reductions, but cost-savings from nationwide standards
could be eroded by requiring a third set of standards in a few states.
If manufacturers did not redistribute those higher costs across all of
their vehicles, a state that had opted out of National LEV might
actually experience higher costs for new motor vehicles. Thus,
implementation of National LEV as a 49-state program is the legal and
cost-effective approach to achieving cleaner air through cleaner new
motor vehicles.
3. Duration of Program
This rule uses MY1997 as a placeholder for the start date of the
program. As explained above (see n. 17), EPA believes that MY1997 is
not a reasonable start date and will take comment in the SNPRM on the
appropriate start date.25
---------------------------------------------------------------------------
\25\ Auto manufacturers had requested several adjustments to the
National LEV program to address concerns regarding compliance for
MY1997, given the abbreviated time frame for program start up. As
discussed above (see n. 17) EPA is using MY1997 as a placeholder for
the actual start date of the program, even though EPA now believes
that start date is not realistic. Rather than include special
provisions for MY1997, EPA will take comment in the SNPRM on the
appropriate start date.
---------------------------------------------------------------------------
Under today's rule, the National LEV program will continue until
EPA promulgates a mandatory national tailpipe program that is at least
equivalent in stringency to the National LEV program. If EPA
promulgates such a mandatory tailpipe program, then the National LEV
program will end in the first model year that the mandatory program is
at least as stringent on a fleetwide basis as National LEV.
EPA proposed that the National LEV program would stay in place
through MY2003 and possibly through MY2005, depending on whether, by a
specified date, EPA had signed a final rule establishing new, mandatory
tailpipe standards (``Tier 2 standards'') at least as stringent as
National LEV. Under the proposed regulations, if EPA did not issue the
specified regulations on time, then National LEV would end in MY2003.
In that event, manufacturers would be required to meet federal Tier 1
standards starting in MY2004 in any state where California or OTC LEV
standards were not in effect. EPA also took comment on various other
possible approaches, including having the National LEV program extend
until the first model year in which manufacturers must meet new,
mandatory tailpipe standards at least as stringent as National LEV.
EPA received several comments expressing serious concern regarding
the proposal that would allow the National LEV program to end after
MY2003 if EPA did not promulgate Tier 2 regulations that were more
stringent than National LEV. These commenters noted that the proposal
would provide insufficient assurance of future emissions reductions and
would hinder State efforts to reduce ozone pollution.
EPA agrees with these comments and has decided not to adopt the
proposed approach. EPA believes it is unacceptable to set up a program
that has the country take a step backward environmentally if the Agency
fails to act by a future deadline. The proposed approach could cause a
reversion to Tier 1 standards beginning in MY2004, which would cause
considerable emission increases throughout the country.
The final regulations require that the National LEV program stay in
effect until a mandatory federal program is in effect that is
equivalent or more stringent. This approach will provide greater
assurance that vehicles manufactured in or after MY2004 will not create
greater pollution than those manufactured prior to MY2004. It will
therefore reduce the considerable uncertainty that the proposed
approach would have created regarding emissions from vehicles after
MY2004.
Though some commenters believe that the proposed approach would
provide EPA with greater incentive to promulgate standards by December
15, 2000, incentive is not the same as assurance. Promulgation of Tier
2 standards by December 15, 2000, is not a certainty. Section 202(i) of
the Act requires several actions by EPA prior to promulgation of Tier 2
standards. EPA must, for example, complete a report to Congress and
must make specific determinations discussed in section 202(i). EPA has
not taken these actions at this time. Until such time as those
determinations are made, there can be no certainty that Tier 2
standards will actually be promulgated, or that such standards will be
equivalent or more stringent than National LEV standards. Moreover, the
proposed approach would stake the continued reduction of motor vehicle
emissions on the prospect of EPA completing its Tier 2 process by
December 15, 2000. Although EPA intends to continue to work diligently
on its Tier 2 process, there are too many possible occurrences that are
out of EPA's control for EPA to guarantee completion of the process by
that date. Therefore, to allow for more certainty in the National LEV
program, EPA is promulgating regulations that allow the program to
continue until the first model year in which an equivalent or more
stringent federal program is implemented and applicable to new LDVs and
LLDTs.
Some commenters favored the proposed approach because they assumed
that the OTC States' commitments regarding State adoption of section
177 programs would last for the duration of National LEV. These
commenters wanted a more definite end to the OTC State commitments than
would be provided by having the OTC State commitments last for the
duration of National LEV as contained in this rule. EPA believes the
best way to accommodate this concern is to set a separate end date for
the OTC State commitments. EPA will take comment on the appropriate end
date for OTC State commitments in the SNPRM.
B. National LEV Voluntary Tailpipe and Related Standards and Phase-In
Today's final rule adopts the proposed National LEV exhaust
emission standards for LDVs and LLDTs.26 The standards are
closely patterned after the California LEV emission standards, and they
include exhaust emission standards applicable to individual vehicles as
well as a set of fleet average NMOG standards.
---------------------------------------------------------------------------
\26\ The federal definitions of ``light-duty vehicle'' and
``light light-duty truck'' (40 CFR 86.094-2) correspond exactly to
the California definitions of ``passenger car'' and ``light-duty
truck,'' respectively. In addition, the federal light light-duty
truck and California light-duty truck categories are each divided
into two subcategories based on identical ranges of loaded vehicle
weight. The alignment of these definitions allows the California
emission standards to be applied directly to the corresponding
federal vehicle certification categories.
---------------------------------------------------------------------------
Once manufacturers have opted into the National LEV program and EPA
has found the program to be in effect, manufacturers will be required
to certify each LDV and LLDT engine family to one of five ``vehicle
emission categories,'' each of which has a unique set of emission
standards (described below). The five vehicle emission categories, in
order of increasing stringency, are the federal Tier 1 standards,
TLEVs, LEVs, ULEVs, and ZEVs. The Tier 1 category includes the
[[Page 31209]]
federal standards for exhaust emissions of NMHC, CO, NOX,
and PM. The four remaining categories (the ``LEV'' categories) include
standards for the same pollutants, as well as for formaldehyde.
In addition to meeting the exhaust standards for each emission
category, manufacturers must also comply with fleet average NMOG
standards (described more fully in section IV.B.3., below). Separate
standards apply to the LDVs and LLDTs, and compliance is based on the
number of vehicles produced and offered for sale in each of the five
emission categories, together with the NMOG standard for that category.
NMOG averages first take effect in the OTC States in
MY1997,27 and they decline (become more stringent) until
stabilizing for MY2001 and beyond. Beginning in MY2001, manufacturers
must demonstrate compliance with the same NMOG fleet averages both in
the OTC States and in the 37 States outside the OTC States and
California. Manufacturers are allowed, but not required, to introduce
TLEVs, LEVs, ULEVs, and ZEVs outside the OTR and California prior to
MY2001. However, only vehicles subject to the National LEV program sold
in the OTR will be counted towards a manufacturer's fleet average NMOG
calculation during the phase-in period in the OTR.
---------------------------------------------------------------------------
\27\ MY1997 is used in this rule as a placeholder for the actual
start date. See n. 17 above.
---------------------------------------------------------------------------
The exhaust emission standards and fleet average NMOG requirements,
as well as other regulatory elements of the National LEV program, are
contained in a new Code of Federal Regulations (CFR) subpart (subpart R
of title 40, part 86).
1. Exhaust Emission Standards for Categories of NLEVs
This section discusses the exhaust emission standards that NLEVs
must meet. In addition to the voluntary National LEV exhaust standards
that are derived from the California LEV program, manufacturers of
NLEVs must also demonstrate compliance with a few mandatory federal
exhaust standards that have no counterpart in the California LEV
program.28 Both types of standards are discussed here.
---------------------------------------------------------------------------
\28\ Participation in the voluntary National LEV program does
not relieve manufacturers of their obligation to meet the mandatory
federal exhaust emission standards. The core of the mandatory
federal exhaust standards are the set of Tier 1 standards, plus
selected pre-Tier 1 (``Tier 0'') standards that Congress let stand
in the 1990 CAA Amendments. Most of these mandatory federal
standards have analogues in the National LEV standards, and for each
of these, the voluntary National LEV standard is of equal or greater
stringency. Certification of a vehicle to the voluntary standards
therefore also demonstrates compliance with the analogous mandatory
standards. (For testing purposes, the National LEV standard may be
described as ``replacing'' the analogous federal standard, although
the federal standard technically still applies.) For those few
federal exhaust standards that have no National LEV counterpart
(discussed below), manufacturers must also demonstrate compliance of
NLEVs with those standards.
---------------------------------------------------------------------------
a. Certification Standards. This final rule establishes separate
sets of emission standards for LDVs and for LLDTs. Current federal
regulations divide the LDT vehicle category into two subcategories,
each of which is further divided into subcategories. LLDTs are those
LDTs less than or equal to 6000 lbs GVWR, and heavy light-duty trucks
(HLDTs) are those LDTs greater than 6000 lbs but less than or equal to
8500 lbs GVWR. The National LEV program contains standards only for the
LLDTs, therefore the HLDT category will continue to be certified to the
applicable Tier 1 standards. Emission standards that apply to LLDTs are
divided into two sets. One set, which is identical to the standards for
LDVs, applies to LLDTs up through 3750 lbs loaded vehicle weight (LVW),
and another slightly less stringent set applies to LLDTs between 3750
and 5750 lbs LVW. Also consistent with current federal and California
regulations, separate sets of standards are promulgated for the
vehicle's intermediate useful life (five years or 50,000 miles,
whichever occurs first) and full useful life (10 years or 100,000
miles, whichever occurs first).
As noted above, there are five vehicle emission categories for
vehicles under the voluntary National LEV program, ranging in
stringency from the current federal Tier 1 vehicles to ZEVs. The Tier 1
standards have already been codified in the current federal regulations
with a phase-in schedule that required 100 percent of MY1996 LDVs and
LLDTs to meet the Tier 1 standards. The TLEV, LEV, ULEV and ZEV
certification standards for LDVs and LLDTs up through 3750 lbs LVW are
shown in Table 2 and those for LLDTs from 3750 to 5750 lbs LVW are
shown in Table 3. As noted below, the particulate standards adopted
specifically for National LEV apply only to diesel vehicles. Non-diesel
vehicles will be subject to the federal Tier 1 PM standards, as
described below.
The federal exhaust standards with no California counterparts are
(1) the Tier 0 total hydrocarbon (THC) standard for all vehicles, (2)
the Tier 1 50,000-mile PM standard, and (3) the 100,000-mile PM
standard for non-diesel vehicles. The California program contains
neither a THC standard nor a 50,000-mile PM standard, and the
California 100,000-mile PM standard applies only to diesel vehicles.
All NLEVs must comply with the federal THC emissions standard. EPA has
adopted the California 100,000-mile diesel PM standard for NLEVs, but,
to meet the requirements of the mandatory federal program, diesel NLEVs
must also certify to the Tier 1 50,000-mile PM standard. Non-diesel
NLEVs must meet the federal Tier 1 50,000-mile and 100,000-mile PM
standards.
Compliance with the Tier 0 THC standard should not result in
testing beyond that required for LEV standards. The current federal
program provides for a reduced data reporting burden, including the use
of engineering justifications, in certain cases where compliance with a
mandatory standard for a given vehicle or emission control technology
is clear cut. Such is the case for current-technology gasoline vehicles
when demonstrating compliance with the Tier 1 PM standards and for most
current technology vehicles whose Tier 1 NMHC values demonstrate
compliance with the THC standards. The Agency anticipates that
manufacturers will reduce their compliance burden by taking advantage
of these same data reporting options when certifying NLEVs.
[[Page 31210]]
Table 2.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LDVs and LLDTs to 3750 Lbs LVW
----------------------------------------------------------------------------------------------------------------
Vehicle PM1
Vehicle useful life (miles) emission NMOG CO NOX HCHO (diesel
category only)
----------------------------------------------------------------------------------------------------------------
50,000........................ TLEV 0.125 3.4 0.4 0.015 ...........
LEV 0.075 3.4 0.2 0.015 ...........
ULEV 0.040 1.7 0.2 0.008 ...........
100,000....................... TLEV 0.156 4.2 0.6 0.018 0.08
LEV 0.090 4.2 0.3 0.018 0.08
ULEV 0.055 2.1 0.3 0.011 0.04
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.
Table 3.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750
Lbs LVW
----------------------------------------------------------------------------------------------------------------
Vehicle PM\1\
Vehicle useful life (miles) emission NMOG CO NOX HCHO (diesel
category only)
----------------------------------------------------------------------------------------------------------------
50,000........................ TLEV 0.160 4.4 0.7 0.018 ...........
LEV 0.100 4.4 0.4 0.018 ...........
ULEV 0.050 2.2 0.4 0.009 ...........
100,000....................... TLEV 0.200 5.5 0.9 0.023 0.08
LEV 0.130 5.5 0.5 0.023 0.08
ULEV 0.070 2.8 0.5 0.013 0.04
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.
The voluntary standards also include two-tiered NMOG standards for
flexible-fuel and dual-fuel vehicles, based on California's approach to
standards for these vehicle types.29 Flexible- and dual-fuel
vehicles have to certify to the applicable standards both on the
alternative fuel and on gasoline. When certifying on an alternative
fuel, these vehicles have to meet the intermediate and full useful life
emission standards for TLEVs, LEVs or ULEVs laid out
above.30
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\29\ Flexible-fuel vehicles are those that can operate on either
of two different fuels or any combination of those fuels, while
dual-fuel vehicles can operate on either of two different fuels but
not on combinations of those fuels.
\30\ Consistent with California's methodology, the measured NMOG
mass emissions are adjusted by a RAF for the given type of
alternative fuel before being compared to the applicable emission
standard. Determination of the applicable RAF is discussed later in
section IV.B.5.d.
---------------------------------------------------------------------------
When certifying on gasoline, flexible-fuel and dual-fuel vehicles
have to meet the next higher (less stringent) category of NMOG emission
standards than the standards to which the vehicle was certified on an
alternative fuel. However, except for NMOG, the vehicle must meet the
same emissions standards (NOx, CO, etc.) when operated on gasoline as
it did when operated on the alternative fuel. For example, a flexible-
fuel vehicle that certifies to ULEV standards on an alternative fuel
would have to certify to the LEV NMOG standard and ULEV CO, NOx, PM,
and HCHO standards when operated on gasoline. The same principle holds
true for determining applicable in-use standards for flexible-fuel and
dual-fuel vehicles. This approach allows manufacturers to optimize the
emission control system for the alternative fuel rather than for
gasoline, and encourages rather than discourages the development of
alternative fuel technologies. Consistent with California, flexible-
fuel and dual-fuel vehicles will be counted toward the NMOG fleet
average standard on the basis of their NMOG certification levels on the
alternative fuel, not on gasoline. There is, however, no requirement
under the National LEV program that such vehicles operate on
alternative fuels in-use.
b. In-Use Standards. As proposed in the NPRM, the National LEV
program explicitly adopts California's intermediate in-use standards,
which are slightly less stringent than the certification standards.
These standards, which apply to in-use testing for a period of model
years following introduction of the certification standards, are set at
less stringent levels than the certification standards to allow
manufacturers to gain in-use experience with vehicles certified to LEV
or ULEV standards. EPA is adopting these standards consistent with the
current California requirements, which include recently adopted
revisions. (See the Response to Comments document for further
discussion of these revisions, section II.D.1.) The in-use standards
apply through MY1999 for LEVs and through MY2002 for ULEVs, and include
both intermediate useful life (50,000 miles) and full useful life
(100,000 miles) standards (full useful life in-use standards apply
starting with MY1999). In-use standards for LDVs and LLDTs to 3750 lbs
LVW are shown in Table 4 and those applicable to LLDTs from 3751 to
5750 lbs LVW are shown in Table 5. As indicated in the tables,
compliance with in-use standards beyond the intermediate useful life is
not required for LEVs and ULEVs until after MY1998. These in-use
standards for vehicles certified under the National LEV program apply
to vehicles sold both within and outside the OTR. Some of the
complexity in the tables below results from changes in the in-use
formaldehyde standards that occur starting with MY2001.
Table 4.--National LEV In-Use Standards (g/mi) for LDVs and LLDTs to 3750 lbs LVW \1\
----------------------------------------------------------------------------------------------------------------
Useful life
Vehicle emission category Model year (miles) NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
LEV............................ 1997-1999 50,000 0.100 3.4 0.3 0.015
1999 100,000 0.125 4.2 0.4 0.018
ULEV........................... 1997-1998 50,000 0.058 2.6 0.3 0.012
1999-2000 50,000 0.055 2.1 0.3 0.012
2001-2002 50,000 0.055 2.1 0.3 0.008
1999-2002 100,000 0.075 3.4 0.4 0.011
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.
Table 5.--National LEV In-Use Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750 LVW \1\
----------------------------------------------------------------------------------------------------------------
Useful life
Vehicle emission category Model year (miles) NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
LEV............................ 1997-1998 50,000 0.128 4.4 0.5 0.018
1999 50,000 0.130 4.4 0.5 0.018
1999 100,000 0.160 5.5 0.7 0.018
ULEV........................... 1997-1998 50,000 0.075 3.3 0.5 0.014
1999-2002 50,000 0.070 2.8 0.5 0.014
1999-2002 100,000 0.100 4.4 0.7 0.014
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.
2. Non-methane Organic Gases Fleet Average Standards
a. Compliance with the NMOG Standards. Under the National LEV
program, manufacturers will be required to meet an increasingly
stringent fleet average NMOG standard. Today's action adopts the fleet
average NMOG standards and schedule for LDVs and LLDTs as proposed in
the NPRM. The fleet average NMOG values (Table 6) will apply, on a
manufacturer-by-manufacturer basis, to vehicles sold in the OTR from
MY1997 until the end of the National LEV program.31 The NMOG
values will also apply to vehicles sold in every state outside the OTR,
except California, beginning with MY2001. (Low volume manufacturers, as
defined in this rule, will be exempt until MY2001, as discussed more
fully in section IV.C. below.) The decreasing fleet average standards
were derived by multiplying certification emission levels for various
categories of vehicles by achievable implementation rates for each
vehicle category. The NMOG standards are equivalent to the sale of 40
percent TLEVs in MY1997-MY1998, 40 percent TLEVs and 30 percent LEVs in
MY1999, 40 percent TLEVs and 60 percent LEVs in MY2000, and 100 percent
LEVs in MY2001.
[[Page 31211]]
\31\ MY1997 is used in this rule as a placeholder for the actual
start date. See n. 17 above.
Table 6.--Fleet Average NMOG Exhaust Emission Standards (g/mi) for LDVs and LLDTs Sold in the OTR\1\
----------------------------------------------------------------------------------------------------------------
Fleet
Vehicle type Model year average
NMOG
----------------------------------------------------------------------------------------------------------------
LDV and LLDT (0-3750 LVW)..................... 1997............................................... 0.200
1998............................................... 0.200
1999............................................... 0.148
2000............................................... 0.095
2001 and later..................................... 0.075
LLDT (3751-5750 LVW).......................... 1997............................................... 0.256
1998............................................... 0.256
1999............................................... 0.190
2000............................................... 0.124
2001 and later..................................... 0.100
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.
Manufacturers will be required to meet separate NMOG averages for
each of two vehicle groups; i.e., a fleet average will be calculated
for LDVs and LLDTs from 0-3750 LVW, and for LLDTs from 3751-5750 LVW.
Also, as discussed below, manufacturers will have to meet NMOG averages
for each of these groups in the two separate regions: states within the
OTR (Northeast Trading Region or NTR), and states (except California)
outside the OTR (37 States). Prior to MY2001, compliance with the fleet
average NMOG requirements is required only in the OTR. However, a
manufacturer choosing to bank credits for use in the 37 States
beginning in MY2001 will have to demonstrate that its fleet average
NMOG is more stringent than the NMOG value for Tier 1 vehicles in the
37 States for these early years.32 Beginning in MY2001,
manufacturers will have to meet the fleet average NMOG standards
separately in each of the two regions.
---------------------------------------------------------------------------
\32\ For purposes of demonstrating compliance with the fleet
average NMOG standards, the NMOG value for Tier 1 LDVs and LLDTs 0-
3750 lbs LVW is 0.25 grams/mile, and for LLDTs 3751-5750 lbs LVW is
0.32 grams/mile.
---------------------------------------------------------------------------
Manufacturers will be able to comply with the fleet average NMOG
standards by selling any combination of vehicles certified to the Tier
1, TLEV, LEV,
[[Page 31212]]
ULEV, or ZEV levels, such that the overall LDV and LLDT fleets in each
region meet the required fleet average values. A sales-weighted fleet
average will be calculated based on the intermediate useful life (five
years, 50,000 mile) certification NMOG standards of the vehicle
categories. A manufacturer will multiply the NMOG emission standard for
each certification category by the number of that type of vehicle that
the manufacturer sold in that region, add these products to the Hybrid
Electric Vehicle (HEV) contribution factor (discussed in section
IV.B.8.), and then divide by the total number of vehicles sold in that
region by the manufacturer.
b. Tracking Vehicles for Fleet Average NMOG Compliance. Because
vehicles sold to locations in California and other countries, including
Canada and Mexico, are excluded from the National LEV program, and
because fleet average NMOG calculations are specific to each of the two
regions, as described further in the following section, manufacturers
are required to obtain data on the location of vehicle sales to
demonstrate accurate fleet average NMOG calculations. However, to ease
the burden on manufacturers of tracking vehicles to the end user,
manufacturers need only track vehicles to the location where the
completed vehicle or truck is purchased, otherwise known as the point
of first sale. In most cases, this will be the sale from the
manufacturer to the dealer. In cases where the end user purchases the
completed vehicle directly from the manufacturer, the location of the
end user is the point of first sale. Vehicle sales data pertaining to
vehicles already shipped to a point of first sale is also known as
first delivery information.
In the NPRM, EPA proposed to have manufacturers track vehicles to
the location where the completed vehicle or truck is purchased, but
mistakenly called this ``point of first retail sale'' (emphasis added).
EPA did not intend to require, however, to have vehicles tracked to the
end user, which is the general level of tracking triggered by point of
first retail sale requirements. The term ``point of first retail sale''
derives from requirements applicable to the heavy-duty engine market.
Heavy duty engine manufacturers often sell engines to truck builders,
who in turn may sell their completed trucks to consumers or dealers
located anywhere. This dispersion of the engines even after the first
sale makes it necessary for manufacturers to track engines to the point
of first retail sale in order to make a reasonable estimate of the
engine's final location. However, in the light-duty market,
manufacturers sell almost all of their production to dealerships, who
in turn sell most vehicles to users located in the general area of the
dealership. The practical constraints on dispersion of vehicles after
the first sale make tracking light-duty vehicles and trucks to the
point of first retail sale unnecessary, as EPA recognized in
establishing trading requirements for phase-in of Tier 1 vehicles.
Thus, today's action clarifies the vehicle tracking requirement and
corrects the proposed language now to require manufacturers to track
National LEV vehicles to the point of first sale.
EPA recognizes that dealers occasionally trade vehicles to obtain
particular makes or models, but the Agency does not believe that this
trading will have any significant effect on the air quality benefits of
the National LEV program. Trading vehicles between dealerships occurs
largely over limited geographic distances, which means that most trades
will redistribute vehicles within the same region. EPA believes that
inter-regional trades would have a de minimis effect on vehicle mixes
and resulting air quality.
EPA is making an additional minor change in the regulations to
clarify an inconsistency in the proposal. The proposed regulations
applied the National LEV requirements to vehicles that manufacturers
``produce and deliver for sale,'' which is the language used in the
California regulations. However, under both the proposed and final
rules, for purposes of determining compliance with the National LEV
requirements, manufacturers must track vehicles to the point of first
sale (point of first retail sale in the proposal). Practically, this
means that the proposed and final National LEV requirements apply to
the vehicles actually sold by manufacturers, rather than the vehicles
delivered for sale, which may be different. As discussed above, for the
Agency to enforce the National LEV requirements on a region-specific
basis, it is necessary to track vehicles to where they are first sold.
The point at which vehicles are delivered for sale is more difficult to
identify and may give a less accurate indication of the vehicles' final
destination. Given that the tracking requirement will be used to
determine compliance, EPA is modifying the applicability of the
National LEV requirements to reflect that this is the controlling
requirement. Thus, in the final rule, EPA is applying the National LEV
requirements to the vehicles actually sold by manufacturers, which are
the same vehicles used for demonstrating compliance with those
requirements.
c. OTC State Government ATV Purchases. Manufacturers may not
include in their fleet average NMOG calculations ATVs bought in the OTR
by state governments. EPA is including this limitation at the request
of the OTC States and auto manufacturers. The OTC States and
manufacturers intend the limitation to allow the OTC States to promote
ATV purchases pursuant to the ATV component they had negotiated,
without allowing manufacturers to offset these purchases with increased
sales of higher-emitting vehicles. For the purpose of National LEV, an
ATV is defined as any vehicle certified by CARB or EPA that is either:
(1) A dual-fuel, flexible-fuel, or dedicated alternatively fueled
vehicle certified as a TLEV, LEV, or ULEV when operated on the
alternative fuel; (2) certified as a ULEV or Inherently Low Emission
Vehicle (ILEV) (irrespective of whether conventionally or alternatively
fueled); or (3) a dedicated or hybrid electric vehicle.
This exclusion of OTC State government purchases of ATVs from the
fleet average NMOG value applies to any ATV purchases by OTC State
governments that the governments have properly reported to the
manufacturers. For the limitations to apply, the governments must
report their purchases of these vehicles to the respective
manufacturers n
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