Clean Fuel Fleet Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 88

[FRL-5994-6]

RIN 2060-AH56

Clean Fuel Fleet Program

AGENCY: Environmental Protection Agency.

ACTION: Notice of proposed rulemaking; delay of implementation date.

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

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 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. In this action, EPA proposes to

delay 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 would 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 proposal 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: Written comments on this proposal must be received no later than

May 26, 1998.

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

In the Rules and Regulations section of this Federal Register, EPA

is adopting this provision as a direct final rule without prior

proposal because the Agency views this as a noncontroversial action and

anticipates no adverse comments. A detailed rationale for this action

is set forth in the direct final rule. If no adverse comments are

received in response to this proposed rule, no

[[Page 20160]]

further activity is contemplated in relation to this rule. If EPA

receives adverse comments, the direct final rule will be withdrawn and

all public comments received will be addressed in a subsequent final

rule based on this proposed rule. EPA will not institute a second

comment period on this action.

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

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

\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).

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

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.

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

\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.

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

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).

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

\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.

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

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

implementation of the CFFP purchase requirements.

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

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

1990, Volume 1 at 903.

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

EPA is proposing to delay the start date that the SIP must contain

for implementation of the CFFP purchase requirements from model year

1998 to model year 1999, and would 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

[[Page 20161]]

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]

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

Manufacturer Certification number Models Type Standard Fuel

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

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)* LDT LEV CA RFG.

Passenger.

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.

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

*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:

List of Certified CFVs Offered for Sale in MY97

[As of April 30, 1997]

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

Manufacturer Certification number Models Type Standard Fuel

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

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.

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

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

Manufacturer Certification number Models Standard Fuel

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

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.

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

SIP Revisions

In light of this proposal, states with adopted CFFP SIPs would

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

CFFP purchase requirements. Fleet operators could 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 proposed delay would provide states and fleet

[[Page 20162]]

owners the necessary flexibility in those areas that are unable to meet

the CFF purchase requirements cited in the CAA.

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 proposed 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 proposed 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 proposal does

not constitute a ``major'' regulation.

B. Reporting and Recordkeeping Requirement

There are no information requirements in this proposed 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

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for-profit enterprises, and small governmental

jurisdictions. This proposed rule would not have a significant impact

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

that this proposed action would not impose any new requirements, but

simply would delay 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 would not

increase the preexisting burden of the existing rules which this

proposal seeks to amend. Therefore, this proposed action would not have

a significant economic impact on a substantial number of small

entities.

D. 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 proposed 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 proposal is not estimated to impose costs in excess of $100

million. EPA has determined that today's proposed action would simply

delay the purchase requirements under state CFFPs and would 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.

[FR Doc. 98-10152 Filed 4-22-98; 8:45 am]

BILLING CODE 6560-50-P