Clean Fuel Fleet Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 88

[FRL-5994-5]

RIN 2060-AH56

Clean Fuel Fleet Program

AGENCY: Environmental Protection Agency.

ACTION: Direct final rule; delay of implementation date.

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SUMMARY: The provisions of subpart C of Title II of the Clean Air Act

require states with certain ozone and carbon monoxide (CO)

nonattainment areas to revise their State Implementation Plans (SIP) to

incorporate a Clean Fuel Fleet

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Program. Under this program, specified percentages of new vehicles

acquired by covered fleet operators in certain ozone and CO

nonattainment areas must meet EPA's clean-fuel vehicle (CFV) emissions

standards. Today's action delays by one model year, the requirement

that a covered area's State Implementation Plan implement a Clean Fuel

Fleet Program (CFFP) fleet operator purchase requirement. As a result,

EPA may approve a CFFP SIP revision which provides that covered fleet

operators must include a certain percentage of CFVs in their fleet

vehicle purchases each year beginning with model year 1999. This action

is intended to ensure successful implementation of the CFFP, and to

ensure that an adequate supply of appropriate vehicles is available for

fleet operators to purchase and use once the program is underway, so

that compliance with the mandatory purchase requirements will be

possible and economically feasible for covered fleet operators.

DATES: This rule will become effective on June 8, 1998 unless the

Agency receives relevant adverse comment by May 26, 1998. Should the

Agency receive such comments, it will publish notification withdrawing

this rule.

ADDRESSES: Interested parties may submit written comments in response

to this rule (in duplicate if possible) to Public Docket No. A-97-53.

It is requested that a duplicate copy may be submitted to Sally

Newstead at the address in the FOR FURTHER INFORMATION CONTACT section

below. The docket is located at the Air Docket, Room M-1500 (6102),

Waterside Mall SW, Washington, DC 20460. The docket may be inspected

between 8:00 a.m. and 5:30 p.m. on weekdays, excluding holidays. A

reasonable fee may be charged for copying docket material.

FOR FURTHER INFORMATION CONTACT: Sally Newstead, Office of Mobile

Sources, National Vehicle and Fuel Emissions Laboratory, 2565 Plymouth

Road, Ann Arbor, Michigan 48105. Telephone (734) 668-4474.

SUPPLEMENTARY INFORMATION:

Statutory Authority

The statutory authority for this action is provided by sections 246

and 301 of the Clean Air Act.

Background

EPA is publishing this rule without prior proposal because the

Agency views this as a noncontroversial action and anticipates no

adverse comments. However, in the proposed rules section of this

Federal Register publication, EPA is publishing a separate document

that will serve as the proposal for this action should relevant adverse

comments be filed. This rule will be effective June 8, 1998 without

further notice unless the Agency receives relevant adverse comments by

May 26, 1998. If EPA receives such comments, EPA will publish a

document withdrawing this final rule and informing the public that the

rule did not take effect. All public comments received will then be

addressed in a subsequent final rule based on the proposed rule. EPA

will not institute a second comment period on the proposed rule.

The Clean Air Act, as amended in 1990 (``CAA'' or ``the Act''),

requires certain states to adopt and submit to EPA a State

Implementation Plan (SIP) containing a CFFP for nonattainment areas

with 1980 populations greater than 250,000 that are classified as

serious or worse for ozone, or with a design value of at least 16.0 ppm

for carbon monoxide (CO). The nonattainment areas currently covered by

the requirement to adopt and submit a CFFP are Atlanta, Washington DC

metropolitan area, Chicago-Gary-Lake Counties, Milwaukee-Racine, Baton

Rouge, and Denver-Boulder.1

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\1\ States with covered nonattainment areas may opt out of the

CFFP with an adequate substitute program. See CAA Section

182(c)(4)(B). Eleven states have opted out of the CFFP pursuant to

this provision. Areas reclassified for ozone, that have a 1980

population of at least 250,000, must also submit a SIP revision with

a CFFP within one year of such reclassification. See CAA Section

246(a)(3).

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Section 246 of the CAA provides that a states' SIP submission must

require fleet operators with 10 or more vehicles that are centrally

fueled or capable of being centrally fueled, to include a specified

percentage of clean-fuel vehicles (CFVs) in their new vehicle purchases

each year. In addition, states CFFP SIP submissions must comply with

other specifications in Section 246, including the requirement that

covered fleet operators must operate their CFVs in covered

nonattainment areas on a clean alternative fuel, defined as a fuel on

which the vehicle meets EPA's CFV standards when using such fuel. EPA

promulgated emissions standards for CFVs in September 1994. See 40 CFR

Part 88. EPA estimates that demand for CFVs by covered fleets in model

year 2 1998 would be approximately 47,000 light duty

vehicles and 12,000 heavy duty vehicles.

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\2\ A ``model year'' for purposes of fleet operators' compliance

with CFFP purchase requirements, and as used in this notice, is not

the same as ``model year'' as defined for purposes of motor vehicle

production. The definition of ``model year'' for the CFFP means

September 1 of the preceding year through August 31 of the named

year. Therefore, model year 1998 for the CFFP runs from September 1,

1997 through August 31, 1998. See 40 CFR 88.302-94.

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Start Date for CFFP Purchase Requirement

Section 246(c) of the CAA provides that the specified percentage of

new light duty vehicle purchases by covered fleet operators that must

be CFVs in a given model year shall be 30% in model year 1998, 50% in

model year 1999, and 70% in model year 2000 and later years, if certain

categories of new vehicles (light duty trucks (LDTs) below 6000 lbs

gross vehicle weight rating (GVWR) and light duty vehicles (LDVs))

certified to the Phase II CFV exhaust emissions standards are offered

for sale in California.3 In March 1993, EPA stated its

expectation that the vehicles specified in Section 246(c) would be

offered for sale in California by model year 1997, and therefore

states' SIP submissions should provide for implementation of the CFFP

purchase requirement beginning in model year 1998. EPA also stated its

intent to delay this implementation date if it later determined that

the requisite vehicles would not be offered for sale in California in

model year 1997. See 58 FR 11888 (March 1, 1993).

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\3\ The Phase II CFV exhaust emissions standards are found in

CAA Section 243(a)(2) and 243(b)(2), and include standards for non-

methane organic gases (NMOG), CO, oxides of nitrogen

(NOX), particulate matter (PM), and formaldehyde that are

identical to California's Low Emission Vehicle (LEV) exhaust

emissions standards.

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EPA cannot mandate that vehicle manufacturers produce CFVs for

fleets to purchase to meet the CFFP requirements--Congress intended

that the creation of a market for CFVs would provide an incentive for

vehicle manufacturers to produce and sell such vehicles outside

California, ultimately resulting in broader market penetration. The

specification in section 246 (c) that certain vehicles meeting CFV

exhaust emissions standards must be available for sale in California

for implementation of the CFFP purchase requirement to begin in model

year 1998 was intended to provide a minimum level of reasonable

assurance that complying vehicle technology was available and being

produced.4 Without some such evidence of vehicle

availability, fleet operators cannot realistically be expected to

comply with the CFFP purchase requirements. However, Section 246 is not

clear on the issue of how many of the vehicles specified in Section

246(c) must be offered for sale in California before triggering

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implementation of the CFFP purchase requirements.

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\4\ See A Legislative History of the Clean Air Act Amendments of

1990, Volume 1 at 903.

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In today's action, EPA is delaying the start date that the SIP must

contain for implementation of the CFFP purchase requirements from model

year 1998 to model year 1999, and intends to approve state SIP

submissions with CFFPs that start in model year 1999. EPA has received

information from various stakeholders, including states, covered fleet

operators, and vehicle manufacturers on this issue, and has concluded

that a delay until model year 1999 will result in a successful,

effective fleet program that advances the penetration of CFVs and clean

alternative fuels into the national market, and is consistent with the

provisions of Section 246(c) and with Congress' intent in adopting the

CFFP provisions of the Act.

The legislative history of the 1990 amendments to the CAA indicates

that, in adopting the CFFP, Congress made a clear choice between two

alternatives: requiring auto manufacturers to produce and sell CFVs, or

creating a market for CFVs and for clean alternative fuels by requiring

fleet operators to purchase such vehicles and operate on such fuels. In

choosing the latter option, Congress attempted to minimize the burden

on fleet operators by requiring some evidence of vehicle availability

in California as a precondition to implementation of the purchase

requirement before model year 2001. However, the Act does not provide a

clear indication of Congressional intent regarding the number of

vehicles in each weight category specified in Section 246(c) that must

be offered for sale in California to trigger the fleet operators'

purchase requirement. Because the CAA is silent on this particular

issue, and in the absence of a clear indication of Congressional

intent, it is appropriate for EPA to reasonably exercise its discretion

in a way that furthers the goals of the CFFP provisions, and determine

whether a sufficient number of requisite vehicle models are offered for

sale in California to require that other states SIPs implement the CFFP

in MY1998.

Auto manufacturers have certified a number of vehicle models to the

LEV standards in California on California reformulated gasoline, and

EPA expects these vehicles could be certified as federal CFVs. However,

because of the Act's requirement that fleet operators operate CFVs on

clean alternative fuels, as defined in Section 241(b), fleet operators

who purchase such CFVs to meet CFFP purchase requirements may have to

operate these vehicles on California reformulated gasoline, which is

generally not available outside California. EPA cannot conclude at this

time that federal reformulated gasoline or federal conventional

gasoline qualify as clean alternative fuels for CFVs certified to LEV

standards on California reformulated gasoline, due to potential

emissions differences resulting from differences in fuel composition

between California reformulated gasoline and federal fuels. EPA expects

that manufacturers could certify LEVs that have been certified to

California LEV standards on California reformulated gasoline as federal

CFVs on federal fuels--if manufacturers did so, fleet operators could

purchase such vehicles to meet CFFP purchase requirements, and operate

them on federal fuels in covered nonattainment areas without violating

the fuel use requirement of the CFFP. Certain new light duty trucks

(LDTs) below 6000 pounds GVWR and new light duty vehicles (LDVs)

certified to LEV exhaust emissions standards are currently being

offered for sale in California. However, only a limited number of LDTs

below 6000 lbs. GVWR were certified to California's LEV standards and

offered for sale in California in MY1997 as indicated in the following

chart.

List of Certified CA LEVs Offered for Sale in California in MY97

[As of April 1997]

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Manufacturer Certification number Models Type Standard Fuel

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Ford.............................. FORD-LDV-97-01-00......... Escort, Escort Wagon...... LDV LEV CA RFG.

FORD-LDV-97-38-00......... Sable, Sable Wagon, LDV LEV CA RFG.

Taurus, Taurus Wagon.

General Motors.................... GM-LDT-97-29-00........... Astro AWD (C&P)* Passenger LDT LEV CA RFG.

GM-LDT-97-40-00........... Safari AWD (P), Astro AWD LDT LEV CA RFG.

(C&P).

Honda............................. HONDA-LDV-97-19-00........ Civic, del Sol............ LDV LEV CA RFG.

HONDA-LDV-97-20-00........ Civic..................... LDV LEV CA RFG.

HONDA-LDV-97-21-00........ Civic, del Sol............ LDV LEV CA RFG.

HONDA-LDV-97-22-00........ Civic..................... LDV LEV CA RFG.

Nissan............................ NISSN-LDV-97-06-00........ Sentra/200SX.............. LDV LEV CA RFG.

Suzuki............................ SUZUK-LDV-97-05-00........ Metro..................... LDV LEV CA RFG.

SUZUK-LDV-97-06-00........ Metro, Swift.............. LDV LEV CA RFG.

Toyota............................ TOYOT-LDV-97-11-00........ Camry..................... LDV LEV CA RFG.

TOYOT-LDV-97-12-00........ Camry..................... LDV LEV CA RFG.

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* P=Passenger, C=Cargo.

In order to meet the MY98 purchase requirements, fleet operators

must have placed vehicle orders in April, 1997; however, the supply of

federally certified CFVs at this time was limited. Based on the limited

numbers of light duty vehicles and trucks offered for sale in

California in MY1997, and particularly the limited number of LDTs <6000

pounds GVWR, EPA believes that a short delay of the required

implementation date of the CFFP for one model year is reasonable to

avoid the potential for serious disruption of the initial

implementation of this program from an inadequate supply of vehicles.

Given the list of current federally certified CFVs, the available

choices for passenger cars, pick-up trucks, vans and sport utility

vehicles is limited to the following:

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List of Certified CFVs Offered for Sale in MY97

[As of April 30, 1997]

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Manufacturer Certification number Models Type Standard Fuel

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Light Duty

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IMPCO Tech........................ IMPCO-LDCNGT-97-01........ Sierra C Pickup.......... LDT LEV CNG.

Chrysler.......................... CHRYSLER-LDCLT-97-01-00... Caravan(2WD), LDCLT ILEV+ULEV CNG.

Voyager(2WD).

CHRYS-ZEV-97-01........... Caravan(2WD), LDT ZEV Electricity.

Voyager(2WD).

Ford.............................. FORD-LDCNGV-97-01......... Crown Victoria........... LDV ILEV+ULEV CNG.

FORD-LDCNGT-97-01......... F250(2WD)................ LDT ILEV+ULEV CNG.

FORD-LDCNGT-97-02......... E250(2WD), E350(2WD)..... LDT ILEV+ULEV CNG.

General Motors.................... GM-ZEV-97-01.............. EV1...................... LDV ILEV+ZEV Electricity.

GN-ZEV-LDT-97-01.......... S10 Pickup............... LDT ILEV+ZEV Electricity.

Honda............................. HN-ZEV-97-01.............. EV Plus.................. LDV ILEV+ZEV Electricity.

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Manufacturer Certification number Models Standard Fuel

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Heavy Duty

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Cummins........................... CUMMINS-NGE (MHDD)-97-18............ B5.9-195G....................... LEV CNG.

CUMMINS-NGE (MHDD)-97-19............ B5.9-195F....................... LEV CNG.

CUMMINS-NGE (MHDD)-97-22............ C8.3-250G....................... LEV CNG.

CUMMINS-NGE (MHDE)-97-01............ B5.9-195G....................... ULEV CNG.

Detroit Diesel.................... DDC-NGE (LHDDE)-97-01............... Series 30G...................... LEV CNG.

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SIP Revisions

In light of this action, states with adopted CFFP SIPs may revise

their SIPs to provide for a model year 1999 start date for the CFFP

purchase requirements. Fleet operators may still earn credits for early

purchase of CFVs that meet all applicable requirements, including the

requirement that fleet operators operate their CFVs on clean

alternative fuels when in the covered nonattainment area. The EPA

believes this action will provide states and fleet owners the necessary

flexibility in those areas that are unable to meet the CFF purchase

requirements cited in the CAAA.

Administrative Requirements

A. Administrative Designation

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

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

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

and the requirements of the Executive Order. The Order defines

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

rule that may:

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

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

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

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

communities;

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

action taken or planned by another Agency;

(3) Materially alter the budget impact of entitlement, grants, user

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

thereof; or

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

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

the Executive Order.

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

this final action is not a significant regulatory action and therefore

not subject to OMB review. Approvals of SIP submittals under section

110 and subchapter I, part D of the Clean Air Act do not create any new

requirements but simply approve requirements that the State is already

imposing. This action simply revises regulations governing the

requirements states' CFFP SIP submissions must meet. It serves to delay

states' required implementation of CFFP purchase requirements.

Therefore, it has been determined that this action does not constitute

a ``major'' regulation.

B. Reporting and Recordkeeping Requirement

There are no information requirements in this direct final rule

which require the approval of the Office of Management and Budget under

the Paperwork Reduction Act 44 U.S.C. 3501 et seq.

C. Regulatory Flexibility

EPA has determined that it is not necessary to prepare a regulatory

flexibility analysis in connection with this final rule. EPA has also

determined that this rule will not have significant economic impact on

a substantial number of small entities. This is based on the fact that

this action does not impose any new requirements, but simply delays the

applicable start date of the CFFP purchase requirements that must be

included in certain state's SIPs, pursuant to the CAA. Thus, the impact

created by the proposed action does not increase the preexisting burden

of the existing rules which this proposal seeks to amend.

D. Submission to Congress

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives, and the Comptroller General of the United States prior

to publication of the rule in the Federal Register. This rule is not a

``major rule'' as defined by 5 U.S.C. 804(2).

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E. Unfunded Mandates Act

Under section 202 of the Unfunded Mandates Reform Act of 1995

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

must prepare a budgetary impact statement to accompany any proposed or

final rule where the estimated costs to State, local, or tribal

governments, or to the private sector, will be $100 million or more.

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

burdensome alternative that achieves the objective of the rule and is

consistent with statutory requirements. Section 203 requires EPA to

establish a plan for informing and advising any small governments that

may be significantly impacted by the rule. To the extent that the rules

being adopted in this action would impose any mandate at all as defined

in section 101 of the Unfunded Mandates Act upon the state, local, or

tribal governments, or the private sector, as explained above, this

rule is not estimated to impose costs in excess of $100 million. EPA

has determined that today's action simply delays the purchase

requirements under state CFFPs and does not impose additional costs or

regulatory burdens. In fact, the one-year delay of implementation of

the purchase requirements is expected to reduce costs of compliance and

ease regulatory burdens.

List of Subjects in 40 CFR Part 88

Environmental protection, Labeling, Motor vehicle pollution,

Reporting and recordkeeping requirements.

Dated: April 3, 1998.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, 40 CFR part 88 is amended

as follows:

PART 88--[AMENDED]

1. The authority citation for part 88 continues to read as follows:

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

7588, 7589, 7601(a).

2. Section 88.308.94 is amended by designating the existing text as

paragraph (a) and by adding paragraph (b) to read as follows:

Sec. 88.308.94 Programmatic requirements for clean-fuel fleet

vehicles.

* * * * *

(b) Program start date. The SIP revision shall provide that the

clean fuel vehicle purchase requirements begin to apply no later than

model year 1999.

[FR Doc. 98-10151 Filed 4-22-98; 8:45 am]

BILLING CODE 6560-50-P