[Federal Register Volume 63, Number 4 (Wednesday, January 7, 1998)]
[Rules and Regulations]
[Pages 926-987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33314]
[[Page 925]]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Parts 9, 85, and 86
Control of Air Pollution From New Motor Vehicles and New Motor Vehicle
Engines: State Commitments to National Low Emission Vehicle Program;
Final Rule
Federal Register / Vol. 63, No. 4 / Wednesday, January 7, 1998 /
Rules and Regulations
[[Page 926]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 85, and 86
[AMS-FRL-5938-8]
RIN 2060-AF75
Control of Air Pollution From New Motor Vehicles and New Motor
Vehicle Engines: State Commitments to National Low Emission Vehicle
Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Today EPA is finalizing the necessary federal regulations for
a voluntary clean car program called the National Low Emission Vehicle
(``National LEV'') program, which is designed to reduce smog and other
pollution from new motor vehicles. The program will come into effect
only if the northeastern states (members of the Ozone Transport
Commission or ``OTC'') and the auto manufacturers sign up for it. The
National LEV regulations allow manufacturers to commit to meet tailpipe
standards for cars and light light-duty trucks that are more stringent
than EPA can mandate. Manufacturers have said they would be willing to
commit to the program if the OTC States also make binding commitments
to the program. Once the program comes into effect, it would be
enforceable in the same manner as any other federal new motor vehicle
program.
After spending years helping to develop the program, the OTC States
and the auto manufacturers must now decide whether to commit to it and
allow the country to benefit from significant reductions in pollution.
National LEV would also achieve the same (or better) emission
reductions in the Ozone Transport Region (OTR) as would OTC State
adopted new motor vehicle programs. Under National LEV there would be
substantial harmonization of federal and California new motor vehicle
standards and test procedures, which would enable manufacturers to
design and test vehicles to one set of standards nationwide. The
program would 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 January 7, 1998. The information
collection requirements contained in this rule has been approved by the
Office of Management and Budget (OMB) and has an assigned OMB control
number of 2060-0345.
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 on electronic availability of this
final rule, see the SUPPLEMENTARY INFORMATION section below.
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
simon.karl@epamail.epa.gov.
SUPPLEMENTARY INFORMATION:
Regulated entities
Entities potentially regulated by this action are those that
manufacture and sell motor vehicles in the United States. Regulated
categories and entities include:
------------------------------------------------------------------------
Examples of regulated
Category 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. 86.1701-99. 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.
Obtaining Electronic Copies of the Regulatory Documents
The preamble, regulatory language, response to comments document,
and other related documents are also available electronically from the
EPA Internet Web site. This service is free of charge, except for any
cost you already incur for internet connectivity. The electronic
Federal Register version is made available on the day of publication on
the primary Web site listed below. The EPA Office of Mobile Sources
also publishes Federal Register notices and related documents on the
secondary Web site listed below.
1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired
date or use Search feature)
2. http://www.epa.gov/OMSWWW/lev-nlev.htm
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.
I. Outline
The preamble is organized into the following sections.
I. Outline
II. Background
III. National LEV Start Date
IV. National LEV Will Produce Larger VOC and NOx Emission Reductions
in the OTR Compared to OTC State Adopted Section 177 Programs
V. OTC State Commitments
A. Duration of OTC State Commitments and of the National LEV
Program
B. Timing of OTC State Commitments, Manufacturer Opt-Ins, and
EPA Finding that National LEV is in Effect
C. OTC State Commitments, Manufacturer Opt-Ins, and EPA Finding
that National LEV is in Effect
1. Initial Opt-In by OTC States
2. Manufacturer Opt-Ins
3. EPA Finding that National LEV is in Effect
4. SIP Revisions
VI. Incentives for Parties to Keep Commitments to Program
A. Offramp for Manufacturers for OTC State Violation of
Commitment
1. OTC State No Longer Accepts National LEV as a Compliance
Alternative
2. OTC State Fails to Submit SIP Revision Committing to National
LEV
3. OTC State Submits Inadequate SIP Revision Committing to
National LEV
4. OTC State Without an Existing ZEV Mandate Adopts a Backstop
ZEV Mandate
B. Offramp for Manufacturers if OTC State or Manufacturer
Legitimately Opts Out of National LEV
C. Offramp for Manufacturers for EPA Failure to Consider In-Use
Fuel Issues
D. Offramps for OTC States
1. Manufacturer Opt-Out
2. Periodic Equivalency Determination
E. Lead Time Under Section 177
VII. National LEV Will Produce Creditable Emissions Reductions
Because it is Enforceable
A. OTC States Will Keep Their Commitments to National LEV
B. It is Unlikely That National LEV Would Be Found Not to
Produce Emission Reductions Equivalent to OTC State Section 177
Programs
[[Page 927]]
C. EPA is Unlikely to Fail to Consider In-Use Fuels Issues Upon
a Manufacturer's Request
VIII. Additional Provisions
A. Early Reduction Credits for Northeast Trading Region
B. Calculation of Compliance with Fleet Average NMOG Standards
C. Certification of Tier 1 Vehicles in a Violating State
D. Provisions Relating to Changes to Stable Standards
E. Nationwide Trading Region
F. Elimination of Five-Percent Cap on Sales of Tier 1 Vehicles
and TLEVs in the OTR
G. Technical Corrections to Final Framework Rule
H. Clarifications to Final Framework Rule
1. Operation of National LEV Vehicles on In-Use Fuels
2. Clarification of Banking and Trading Provisions
3. Recordkeeping Requirements
IX. Supplemental Federal Test Procedures
A. Background
B. Elements of the CARB Proposal and Applicability Under
National LEV
1. Test Procedure
2. Emission Standards
a. LEVs and ULEVs
b. Tier 1 Vehicles and TLEVs
3. Implementation Schedule
4. Implementation Compliance
X. Administrative Requirements
A. Administrative Designation
B. Regulatory Flexibility
C. Unfunded Mandates Reform Act
D. Congressional Review of Agency Rulemaking
E. Reporting and Recordkeeping Requirements
F. Effective Date
XI. Judicial Review
XII. Statutory Authority
II. Background 1
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\1\ Although this section contains a brief summary of the
National LEV program and the process that led up to it, this notice
assumes that the reader has an in-depth understanding of the
National LEV program and is familiar with the previous National LEV
rulemaking notices (i.e., the August, 1997, Supplemental Notice of
Proposed Rulemaking (SNPRM); the October, 1995, Notice of Proposed
Rulemaking (NPRM); and the June, 1997, Final Framework Rule cited in
n.2). Readers should review those documents for in-depth discussion
of the program, the process and other background information.
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Today's Final Rule (FRM) is another step towards a voluntary clean
car program (``National LEV'') that can help control emissions
nationwide as well as in the northeastern states. As discussed in
previous Federal Register notices,2 there have been a number
of regulatory and other steps in the development of this program.
Today's notice concludes the federal regulatory steps necessary to set
up the voluntary clean car program, which will then come into effect if
the auto manufacturers and the OTC States commit to it. In June of this
year, EPA published a final rule setting forth the framework for the
program, including the specific standards that would apply to new motor
vehicles if manufacturers opted in. See 62 FR 31192 (June 6, 1997)
(``Final Framework Rule''). Today's rule finalizes the regulations for
the National LEV program. It is now up to the OTC States and the auto
manufacturers to determine whether the program will come into effect.
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\2\ See 60 FR 4712 (Jan. 24, 1995), 60 FR 52734 (Oct. 10,
1995); 62 FR 31192 (June 6, 1997); 62 FR 44754 (Aug. 22, 1997).
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Under the National LEV program, auto manufacturers will have the
option of agreeing to comply with tailpipe standards that are more
stringent than EPA can mandate prior to model year (MY) 2004. 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. See the Final Framework Rule at 62 FR
31201-31223 for a detailed discussion of the program structure,
tailpipe and related standards, and legal authority for and
enforceability of National LEV. 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 and
reducing regulatory burdens by harmonizing federal and California motor
vehicle emissions standards.
The National LEV program has been developed through an
unprecedented, cooperative effort by the OTC States, auto
manufacturers, environmentalists, fuel providers, EPA and other
interested parties. 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 to develop a voluntary National LEV
program, a process marked by extensive public participation and a focus
on joint problem solving. See the Final Framework Rule at 62 FR 31199
and the NPRM at 60 FR 52739-52740 for further discussion of public
participation in the National LEV decision making process.
National LEV will provide public health and environmental benefits
by reducing air pollution nationwide. Both inside and outside the OTR,
National LEV will reduce ground level ozone, the principle harmful
component in smog, as well as emissions of other pollutants, including
particulate matter (PM), benzene, and formaldehyde. The Final Framework
Rule contains a substantive discussion on the health and environmental
benefits of the National LEV program. See 62 FR 31195. 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 adoption of the CAL
LEV program in the OTR. National LEV will also provide manufacturers
regulatory stability and reduce regulatory burden by harmonizing
federal and California motor vehicle standards. This will reduce
testing and design costs for motor vehicles, as well as allow more
efficient distribution and marketing of vehicles nationwide. See the
Final Framework Rule at 60 FR 31195-31197 and 31224 for further
discussion of the benefits of the National LEV program.
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). See 60 FR 4712 (January 24, 1995) (``OTC LEV Decision''). See
the Final Framework Rule at 60 FR 31195 for a summary of EPA's
decision. In March, 1997, the U.S. Court of Appeals for the District of
Columbia affirmed states' rights to adopt the CAL LEV program, but
reversed EPA's decision requiring the OTC States to do so. Virginia v.
EPA, 108 F.3d 1397 (D.C. Cir. 1997). Some, but not all, OTC States have
adopted CAL LEV programs to date.
Given statutory constraints on EPA, National LEV will be
implemented only 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. 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 (CAA, or ``the Act'') prevents EPA itself from mandating
new exhaust standards applicable before model year 2004. The auto
manufacturers have indicated that they would be willing to opt into
[[Page 928]]
National LEV only if the OTC States make certain commitments, including
committing to allow the manufacturers to comply with National LEV in
lieu of certain CAL LEV programs adopted under section 177 of the CAA
(Section 177 Programs). EPA cannot require the OTC States to make such
commitments (although EPA can issue regulations to help make the
commitments enforceable). Thus, National LEV cannot come into effect
absent the agreement of the auto manufacturers and the OTC States.
Over the past several years, the OTC States and the auto
manufacturers have conducted negotiations to develop an agreement on
National LEV to be contained in a Memorandum of Understanding (MOU).
The parties have reached agreement on most provisions of the National
LEV program. Each side has sent EPA an MOU that it has initialed,
indicating its agreement with the National LEV program as contained in
that Memorandum of Understanding.3 Although there are
differences in the two Memoranda, they show that agreement has been
reached between the OTC States and the auto manufacturers on most of
the provisions of the National LEV program. Based on the MOUs provided
to the Agency, EPA issued the Final Framework Rule on June 6, 1997,
setting the framework for and describing most of the elements of the
National LEV program.
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\3\ See Docket No. A-95-26, IV-G-31 and IV-G-34.
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Although the parties had hoped to jointly sign a comprehensive MOU
affirming their mutual agreement on the National LEV program, the
parties now agree that further discussions are unlikely to result in
resolution of the last outstanding issues. Nonetheless, EPA and the
parties believe that National LEV would provide substantial public
health and environmental benefits. Failure to come to agreement on a
National LEV program would be a significant lost opportunity to improve
the nation's air quality.
EPA believes there is sufficient common ground between the parties
to provide a basis for a National LEV program to which all parties
could agree to opt into. EPA believes that finalizing a program for the
OTC States and manufacturers to evaluate as a whole presents the
greatest likelihood that the country will achieve the benefits of
National LEV, on which many stakeholders worked hard over the years.
EPA encourages the auto manufacturers and OTC States to opt in so the
country does not lose the significant benefits of National LEV.
Today's final rule (FRM) finalizes regulations on issues relating
to how the OTC States will voluntarily opt in to the National LEV
program and commit to allow motor vehicle manufacturers to comply with
the National LEV program in lieu of state Section 177 Programs. These
issues include the duration of the OTC State commitments, the
instruments and process through which the OTC States will commit to the
program, and the substantive details of their commitments.
Today's FRM also addresses several other outstanding structural
details of the National LEV program. These provisions include the
timing of OTC State and auto manufacturer opt-ins to the National LEV
program, incentives for the parties to keep their commitments to the
National LEV program and conditions under which OTC States and
manufacturers could exit the program (``offramps''), and the start date
of the National LEV program.
In addition, today's FRM includes several modifications and
clarifications of several issues addressed to some extent in the Final
Framework Rule. These include provisions relating to how the off-cycle
supplemental federal test procedure would apply to National LEV
vehicles and provisions relating to banking and trading of emissions
credits. For additional explanation of the rationale for today's rule
and responses to comments, see the Summary and Analysis of Comments for
the Final Rule.
III. National LEV Start Date
In the SNPRM, EPA proposed to have the National LEV program start
in MY1999, which reflected a change from the original proposed start
date of MY1997.5 See 62 FR 44756-57. EPA explained that this
change in the start date was necessary because requiring a start date
of MY1997 or MY1998 was unrealistic given the delays associated with
finalizing the program and the inability of manufacturers to produce
and certify National LEV vehicles before MY1999. Additionally, EPA
noted that there was no longer a legal requirement for National LEV to
produce emissions reductions at least equivalent to those that would be
produced by OTC LEV due to the court case overturning EPA's decision
granting the OTC's petition. (See Virginia v. EPA, supra.) EPA received
no negative comments regarding this proposed change in program start
date. EPA is today finalizing its proposal to have the National LEV
program start in MY1999 in the OTR.
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\5\ The National LEV program will start in MY2001 nationwide.
The nationwide start date was not at issue in the SNPRM.
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The change in program start date reflects in part EPA's belief
that, given the voluntary nature of the National LEV program, it would
be unreasonable to retain the MY1997 start date and have the program
begin with some manufacturers having debits from not meeting the fleet
average NMOG standards for MY1997 and MY1998. Such debits would be
difficult to erase given the increasing stringency of the fleet average
NMOG standards and the limited ability of manufacturers to modify their
production plans quickly, once the program is in effect, to manufacture
a number of National LEV vehicles sufficient to demonstrate compliance
with the applicable fleet average NMOG standards.
The MY1999 start date for the National LEV program does not mean
that the program is being delayed two years, but merely that the
National LEV requirements for MY1997 and MY1998 are being dropped from
the regulations. Therefore, the fleet average NMOG standards for MY1999
are 0.148 g/mi for light-duty vehicles and light-duty trucks (0-3750
pounds LVW) and 0.190 g/mi for light-duty trucks between 3750-5750
pounds LVW. As stated above, the MY2001 nationwide fleet average NMOG
standards remain unchanged.
EPA also took comment on allowing manufacturers to sell California-
certified vehicles 6 instead of National LEV vehicles
throughout the Northeast Trading Region (NTR) for MY1999 and MY2000 as
a means to help manufacturers meet their fleet average NMOG standards
for these two model years. Manufacturers expressed concern that they
might have difficulty producing and certifying National LEV vehicles
for MY1999 given that certification of MY1999 vehicles will likely
start before EPA is able to find that National LEV is in effect. EPA
believes it is appropriate to provide some limited flexibility to
manufacturers in a way that does not undercut the environmental
benefits of the fleet average NMOG standards in the first year of the
program. Thus, for MY1999 only, EPA will issue federal National LEV
certificates that will allow manufacturers to sell California-certified
TLEV, LEV, ULEV, and ZEV vehicles throughout the NTR and will count
[[Page 929]]
those vehicles to determine compliance with National LEV requirements.
For MY2000, EPA will also issue certificates that will allow
manufacturers to sell California-certified TLEVs throughout the NTR and
to count those vehicles to determine compliance with National LEV
requirements.
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\6\ ``California-certified vehicles'', as the term is used in
this rule, are those vehicles which have received an Executive Order
from California and a federal certificate of conformity which allows
the sale of such vehicles only in the state of California and other
states that have adopted the California motor vehicle emission
standards under Section 177 of the Clean Air Act.
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The harmonization of the federal and California motor vehicle
emission requirements have left few differences between National LEV
and California-certified TLEV and cleaner vehicles. EPA believes that
production and certification of vehicles meeting both federal and
California requirements, done currently by some manufacturers, should
be much more attractive when the National LEV program is in effect.
However, program differences do exist and federal requirements such as
the Certification Short Test (CST) and high-altitude requirements
remain part of the federal program.7 Using Federal
certificates to allow manufacturers to certify and sell MY1999
California-certified TLEVs, LEVs, ULEVs, and ZEVs throughout the NTR
will give them an additional mechanism to comply with the fleet average
NMOG standards by increasing the production and sale of their
California-certified vehicles. Manufacturers may still certify and sell
National LEV vehicles for MY1999 using the National LEV program
requirements, and such vehicles could be sold nationwide. EPA is not
allowing sale of California Tier 1 vehicles throughout the NTR because
EPA does not believe that certification of vehicles to California Tier
1 standards proves that such vehicles meet the Federal Tier 1 tailpipe
emission standards and EPA cannot justify replacing Federal Tier 1
vehicles with California Tier 1 vehicles in the federal motor vehicle
emissions program. EPA has consistently taken this position on
California Tier 1 vehicles throughout the development of the National
LEV program.
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\7\ There are different federal and California test procedures
for evaporative emissions. Manufacturers generally use the option in
California's regulations which allows testing using the federal
requirements. EPA expects manufacturers will continue using this
option when certifying vehicles for sale in California. The National
LEV program requires emission testing using the federal
requirements.
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California-certified TLEVs, LEVs, ULEVs and ZEVs can be sold in the
NTR in MY1999 if they receive a federal National LEV certificate. This
certificate will state that, for MY1999, a California-certified vehicle
sold in the NTR only will be considered a National LEV vehicle and meet
all National LEV requirements. EPA believes that the compliance testing
done to obtain a California certificate of conformity for these vehicle
categories is sufficient to meet the certification requirements for the
National LEV program in MY1999. Allowing California certification to
substitute for National LEV certification for vehicles sold in the NTR
does not mean that EPA is waiving compliance with the Certification
Short Test (CST) and high-altitude requirements. However, EPA believes
that a vehicle complying with the MY1999 California TLEV, LEV, ULEV, or
ZEV emission standards will also most likely meet the Federal Tier 1
CST and high-altitude requirements. Currently, Federal Tier 1 vehicles
are being certified as meeting the CST and high-altitude requirements
and EPA, in its certification review and testing, has not identified
any problems manufacturers have had in complying with these two
requirements. EPA expects that California-certified TLEVs, LEVs, ULEVs,
and ZEVs would also meet the Federal Tier 1 CST and high-altitude
certification requirements and is thus willing to allow a degree of
uncertainty regarding actual demonstration of compliance with these
requirements in MY1999 in order to facilitate the start of the National
LEV program for those manufacturers which may find it difficult to
certify and sell National LEV vehicles in the NTR. EPA does not believe
it is appropriate to waive demonstration with these requirements beyond
MY1999 because manufacturers will have had sufficient time to
incorporate compliance with the CST and high-altitude requirements into
their MY2000 National LEV vehicles. EPA believes there should be
minimal adverse environmental impact from substituting California-
certified TLEVs, LEVs, ULEVs and ZEVs for National LEV vehicles in
MY1999.
Today's Final Rule addresses the issue of National LEV vehicle
sales in MY1999 by issuing a Federal National LEV certificate to those
vehicles sold in the NTR instead of expanding current policies and
allowing the sale of California-certified vehicles throughout the NTR.
By granting a Federal certificate to these vehicles, EPA retains its
authority to enforce the provisions of the National LEV program.
Compliance with many of these provisions, such as compliance with the
fleet average NMOG requirements and credit trading, is dependent on
meeting conditions associated with the National LEV certificate. EPA is
not waiving compliance with the National LEV requirements in the NTR in
MY1999. By requiring a federal National LEV certificate for MY1999
California-certified vehicles sold in the NTR, this provision ensures
that EPA may enforce all of the National LEV regulations applicable to
MY1999 vehicles.8 California-certified vehicles receiving a
Federal National LEV certificate allowing sale in the NTR may not be
sold outside the NTR.
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\8\ The manufacturers have suggested that EPA address the issue
of MY1999 and MY2000 vehicles through expansion of the cross border
sales policy, which currently allows sales of vehicles certified to
California's emissions standards and other requirements in states
contiguous to, or within 50 miles of, California and states that
have a program adopted under section 177 in place. See note 49 for
further discussion of the cross border sales policy. The approach
that EPA is adopting in today's rule is separate from and will have
no effect on the cross border sales policy.
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EPA believes it is also appropriate to issue Federal certificates
that will allow manufacturers to sell California-certified TLEVs
throughout the NTR in MY2000. As discussed below in sections VIII.E and
IX, EPA does not expect manufacturers to produce and sell many TLEVs
after MY2000 because other provisions in the National LEV and
California LEV programs will provide incentives and requirements which
will minimize TLEV production. EPA believes it would be more
environmentally beneficial and cost-effective to have manufacturers use
their resources to certify and produce cleaner LEVs and ULEVs rather
than TLEVs, which will shortly be phased out of production.9
Issuing Federal certificates to allow manufacturers to sell California-
certified TLEVs in the NTR in MY2000 does not mean that more TLEVs will
be sold in this region because manufacturers will still need to
demonstrate compliance with the fleet average NMOG standard in the NTR
in MY2000, and all TLEVs sold in the NTR are to be included in the
compliance calculations. Instead, EPA is making the determination that
the environmental benefits of issuing Federal certificates allowing the
sale of California-certified TLEVs in the NTR in MY2000 outweighs the
cost and any environmental detriment associated with manufacturers not
completing all of the testing generally required to meet the
certification requirements necessary to produce and sell a National LEV
TLEV in the NTR in MY2000. EPA is not waiving compliance with any
National LEV standards, but is accepting California certification as
sufficient to
[[Page 930]]
demonstrate compliance with TLEV standards for the purpose of
certification.
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\9\ Manufacturers can continue to produce and sell TLEV vehicles
after MY2000 under the National LEV and California LEV programs as
long as they obtain a National LEV certificate for the TLEVs and
meet the applicable fleet average NMOG standards. EPA is not
requiring manufacturers to discontinue TLEV production, which
remains a manufacturer decision.
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This special provision regarding the sale of California-certified
TLEVs is applicable only in the NTR and only in MY2000. This provision
is intended to provide manufacturers with flexibility in meeting the
fleet average NMOG standards in the NTR. When the National LEV
requirements are effective nationally in MY2001, however,
manufacturers' full production efforts will be focused on meeting
California and National LEV requirements. If a manufacturer plans to
continue producing TLEVs after MY2000, then such vehicles must meet all
of the National LEV requirements, including the CST and high-altitude
requirements. In meeting the certification requirements for a MY2001
National LEV TLEV, manufacturers may carry over any appropriate data
from their MY2000.
EPA is not issuing Federal certificates allowing California-
certified vehicles to be sold under National LEV outside the NTR in
MY1999. There is no justification for allowing such sales and, unlike
in the NTR, there is no requirement that manufacturers produce anything
but Federal Tier 1 vehicles. If manufacturers wish to generate early
reduction credits in the All State Trading Region in MY1999 and MY2000,
they must do so using National LEV vehicle sales in that region.
IV. National LEV Will Produce Larger VOC and NOX Emission
Reductions in the OTR Compared to OTC State Adopted Section 177
Programs
Modeling done in support of the Final Framework Rule showed that
the National LEV program would provide greater emission reductions than
those from OTC LEV (which is equivalent to state-by-state adoption of
the CAL LEV program throughout the OTR). See 62 FR 44757. The SNPRM
proposed several changes to modeling assumptions. As proposed, and in
light of public comments, EPA has modified some of the assumptions in
the modeling, particularly regarding when various programs would start.
This modeling supports EPA's conclusion in today's rule that, given
current assumptions and best information about future vehicle
performance 10 and the migration of people and vehicles, the
NOX and VOC emission reductions from National LEV are
equivalent to or greater than those from state-by-state adoption of
Section 177 Programs throughout the OTR.
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\10\ EPA's National LEV modeling does not incorporate any
factors relating to the effect of fuel sulfur levels on the
emissions performance of National LEV vehicles, outside of any
factors already included in the MOBILE 5a model. Studies being
conducted by the auto and oil industries analyzing the impact of
sulfur on the emissions performance of LEV vehicles are ongoing. EPA
has not attempted to quantify a sulfur impact on National LEV
vehicle emissions as part of the equivalency modeling because the
studies and associated analyses have not yet been completed.
Additionally, any quantifiable impact would apply to both the
National LEV and OTC State Section 177 Programs and would not alter
any equivalency determination.
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The first set of changes to the modeling relates to the start dates
of National LEV and Section 177 Programs. As proposed in the SNPRM, the
updated modeling includes a start date of MY1999 (rather than MY1997)
for the National LEV program. The updated modeling analysis for the OTC
State Section 177 Programs (in the absence of National LEV) also more
accurately reflects expected reductions from OTC State Section 177
Programs than did the analysis described in the Final Framework Rule.
The modeling for that rule assumed that all of the OTC States had
Section 177 Programs in effect for MY1999 and later. In reality, only
six of the OTC States have adopted programs that could be effective in
MY1999 and there is no longer a specific legal requirement for the
other states to adopt a Section 177 Program. Thus, EPA's analysis
assumes Section 177 Programs will exist only in those OTC States that
have adopted a Section 177 Program.11 EPA believes that this
realistic assumption is the proper comparison to National LEV since
legally, individual state adoption is the only manner in which
California vehicles can be required in the Northeast.
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\11\ Start date assumptions for EPA's modeling are MY1999 for
the National LEV program in the OTR, MY2001 for the National LEV
program nationwide, MY1996 for Section 177 Programs in New York and
Massachusetts, MY1998 for a Section 177 Program in Connecticut, and
MY1999 for Section 177 Programs in Rhode Island, New Jersey, and
Vermont. The dates for state Section 177 Programs reflect the
effective dates for current state Section 177 Programs. Maine has
taken steps to adopt a Section 177 Program. EPA has included Maine
with the other six OTC States that have adopted a Section 177
Program, and has given Maine's program a start date of MY2001,
recognizing that even though Maine has not yet completed all the
steps to make its program go into effect, it has finished most of
the actions and is expected to complete its adoption actions in the
near future.
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EPA believes its current modeling makes the appropriate assumptions
and correctly estimates a realistic level of OTC State Section 177
Programs. However, to test its assumptions, EPA also ran as a third
case a sensitivity analysis assuming that all of the OTC States adopted
Section 177 Programs. For the six OTC States without a Section 177
Program in place as of July 1, 1997, EPA assumed that the programs
became effective in MY2001, the earliest time a state that had not yet
adopted a Section 177 Program could legally enforce such a program,
given the two year lead time requirement in section 177 of the Act.
This analysis showed that, even with all 13 OTC States having a Section
177 Program in place at the earliest possible times, National LEV still
provided greater emission reductions in the Northeast.
EPA has also changed some of its modeling assumptions regarding the
status of federal and state motor vehicle programs in MY2005 and later,
in part as a result of changes EPA made regarding the duration of
National LEV. To the extent possible, EPA has attempted to make these
new assumptions, which affect all three cases analyzed by EPA,
consistent from one case to the next. Although EPA has made assumptions
regarding future regulatory actions, these assumptions in no way limit
EPA's options in future regulatory actions, nor do they indicate that
EPA has prejudged those future actions.
In the National LEV case, EPA assumes National LEV will be in place
in all OTC States through MY2005, which is the latest model year the
program would be considered a compliance alternative in those OTC
States which have adopted a Section 177 Program if EPA issues Tier 2
standards at least as stringent as National LEV standards by December
15, 2000. In MY2006, the seven OTC States with Section 177 Programs
already adopted are assumed, for modeling purposes, to have those
programs go into effect.12 The model assumes the rest of the
country will have a Tier 2 program which, for modeling purposes, is
considered to be equivalent to the National LEV program.
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\12\ Under the National LEV program duration requirements (see
section V.A) the OTC States are only committed to have the Naitonal
LEV program as a compliance alternative to a Section 177 Program
until MY2006.
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The two modeling cases which analyze emission reductions without
the National LEV program assume, for modeling purposes, that a Tier 2
program equivalent to National LEV would go into effect in MY2005. One
case assumes Tier 1 standards in effect until then in those states that
have not adopted a Section 177 Program. The other case assumes Tier 1
standards in effect until then in all states outside the OTR (except
California). The MY2005 start date for Tier 2 was chosen as a
reasonable estimation for modeling purposes, given the National LEV
program deadline of December 15, 2000
[[Page 931]]
date for EPA action on the Tier 2 program (which has been incorporated
into the modeling assumption for the National LEV case) in conjunction
with lead time for manufacturers to prepare to comply with Tier 2
standards. The MY2005 start date for Tier 2 also represents a
reasonable midpoint, for modeling purposes, between the MY2004 and
MY2006 deadlines included in the MOUs. EPA is not precluded by the
National LEV program from implementing a Tier 2 program in MY2004 if it
determines Tier 2 standards should apply in that model year.
EPA's modeling shows that National LEV would achieve greater
emission reductions in the OTR than individual OTC State Section 177
Programs. EPA's conclusion would not change even if all OTC States were
to adopt Section 177 Programs. The emission levels are listed in the
Table 1 below. The modeling is based on National LEV starting in MY1999
in the OTR and MY2001 in the rest of the country, with Federal Tier 1
vehicles making up the federal non-NLEV fleet. EPA did not include
existing OTC State zero emission vehicle (ZEV) sales mandates in either
of its modeling runs since these mandates are not affected by the
National LEV rule. ZEV sales mandates would thus have similar effects
on emission levels in both modeling cases and would not affect the
relative emissions benefits of National LEV compared to those of OTC
State Section 177 Programs.
All other assumptions used in the modeling included in the Final
Framework Rule, the SNPRM, and today's rule remain consistent with
those used throughout the National LEV process. EPA believes it is
important to keep consistent assumptions to provide a comparison
between benefits from the National LEV program and state Section 177
Programs in the OTR.
Table 1.--Ozone Season Weekday Emissions for Highway Vehicles in the OTR
(tons/day)
------------------------------------------------------------------------
OTC State National
Year Pollutant CAL LEV LEV
------------------------------------------------------------------------
2005.......................... NMOG............ 1,573 1,499
NOX............. 2,526 2,403
2007.......................... NMOG............ 1,480 1,366
NOX............. 2,427 2,226
2015.......................... NMOG............ 1,386 1,148
NOX............. 2,367 1,899
------------------------------------------------------------------------
V. OTC State Commitments
This section describes the substance of the OTC States' commitments
to National LEV. It also addresses the process (including timing) by
which OTC States and auto manufacturers would commit to National LEV
and by which EPA would find the program in effect.
A. Duration of OTC State Commitments and of the National LEV Program
Today's Final Rule takes a different approach to the duration of
the OTC State commitments than was proposed in the SNPRM. As discussed
in the SNPRM, the MOUs initialed by the OTC States and the auto
manufacturers both had the duration of the National LEV program (and
hence the duration of both the OTC States' and the auto manufacturers'
commitments) depend on whether, by January 1, 2001, EPA issued
mandatory new motor vehicle standards (``Tier 2 standards'') that were
at least as stringent as National LEV and that would go into effect no
later than MY2006. If EPA issued the specified standards by that time,
the auto manufacturers would stay in National LEV until the Tier 2
standards became effective, and the OTC States would not enforce their
own state Section 177 Programs until MY2006. If EPA did not issue the
specified regulations by that time, then National LEV would end with
MY2003 and, starting in MY2004, in any state where California or OTC
LEV standards were not in place, the applicable standards for
manufacturers would revert back to the federal Tier 1 standards.
Although EPA rejected the MOU approach in the Final Framework Rule, EPA
has reconsidered the issue based on the comments submitted by the OTC
States and the auto manufacturers, and has decided to adopt the
approach agreed upon by the OTC States and the auto manufacturers.
Thus, under 40 CFR 1701(c) and 1705(e) and (g) of today's rule, the
commitments of the OTC States and the auto manufacturers to National
LEV last until MY2006, unless EPA fails to promulgate Tier 2 standards
at least as stringent as National LEV on or before December 15, 2000,
in which case the commitments last until MY2004.13
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\13\ If EPA promulgates Tier 2 standards at least as stringent
as National LEV on or before December 15, 2000, and those standards
are in effect in MY2004 or MY2005, the manufacturers will become
subject to those standards upon their effective date, but the OTC
States' commitments to National LEV will not end until MY2006.
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EPA had proposed in the SNPRM that the OTC States would commit to
the National LEV program until MY2006. This meant that the OTC States
would have committed to accept manufacturers' compliance with National
LEV (or equally or more stringent mandatory federal standards) as an
alternative to compliance with a state Section 177 Program through
MY2005. The length of the auto manufacturers' commitment was set in the
Final Framework Rule. Under that rule, manufacturers that opted into
the program would be bound to comply with National LEV until the first
model year for which manufacturers would be subject to a mandatory
federal tailpipe emissions program at least as stringent as the
National LEV program with respect to NMOG, NOX and carbon
monoxide (CO) exhaust emissions (``Tier 2 standards''). Under section
202(b)(1)(C) of the Clean Air Act, EPA could not mandate such standards
prior to MY2004. Thus, the manufacturers' commitment to National LEV
was to last at least until MY2004 and could last longer.
In the Final Framework Rule, EPA did not accept the MOU provisions
for setting the duration of the National LEV program. EPA rejected the
MOU provisions because it was concerned about setting up a program that
would have the country take a step backward environmentally if the
Agency failed to act by a specified deadline. EPA has reconsidered its
views.
The main reason for changing the program duration is the comments
received from the OTC States and the auto industry. The auto industry
made it clear that stability until MY2006 is very important, and the
OTC States were clear that they were uncomfortable with committing to
allow National LEV as a compliance alternative until MY2006 if EPA were
not to issue Tier 2 standards by January 1, 2001. The OTC States'
primary reason for wanting to tie the duration of the program to
promulgation of Tier 2 standards is that they need to know sooner
rather than later how the Tier 2 standards and the California LEV
program compare so that they can determine whether they will need to
have an enforceable California LEV program to meet their air quality
goals. EPA believes that an orderly air quality planning process is
important and believes that the OTC States are in the best position to
know what would be most useful to them in that process. EPA has decided
to defer to the OTC States' judgment on this matter.
Having decided that the length of the OTC States' commitment should
depend on whether EPA issues Tier 2 standards, EPA believes it would be
unfair not to have the manufacturers' commitment also depend on whether
EPA issues Tier 2 standards. First, that is the agreement that was
reached by the OTC States and the manufacturers. It would be unfair to
hold the manufacturers in for longer than they had agreed to in the MOU
[[Page 932]]
while giving the OTC States the benefit of the agreement. Second, an
unintended consequence of EPA's decision not to tie the end of National
LEV to EPA's issuance of the Tier 2 regulations is that several groups
interpreted that as a signal that EPA was not intending to perform its
statutory duty under CAA section 202(i)(3) to evaluate the need for,
technological feasibility of, and cost effectiveness of new standards,
and to issue new standards if warranted. EPA has every intention of
meeting its statutory obligations under the CAA and does not want to
send a contrary message. Third, EPA now believes that if National LEV
comes into effect and manufacturers change all their manufacturing
facilities over to build LEV technology, it is highly unlikely that
they would actually change the technology back to Tier 1. A combination
of the cost of changing back to old technology and adverse publicity
from selling ``dirty'' cars probably should be sufficient incentive to
keep manufacturers using LEV technology. One manufacturer's decision,
announced this summer, to sell LEV technology (albeit certified at Tier
1 levels) nationally and various marketing campaigns touting clean cars
are evidence that ``clean'' cars can be used as a selling point. Thus,
today's Final Rule modifies the duration of the manufacturers'
commitment to National LEV.
B. Timing of OTC State Commitments, Manufacturer Opt-Ins, and EPA
Finding That National LEV Is in Effect
EPA is establishing a process and deadlines for the OTC States and
the manufacturers to opt into the National LEV program and for EPA to
find the program in effect. The process and timing are unchanged from
EPA's proposal in the SNPRM. Because National LEV needs to be in place
as soon as possible to ensure that it is available for MY1999, 40 CFR
86.1706 sets the following deadlines based on the date of signature of
this Final Rule.14 Seventy-five days from signature of this
FRM, EPA must determine whether the National LEV program is in effect
(see section V.C.3 below for the criteria for finding National LEV in
effect). This finding will be based on the OTC States' initial opt-in
packages from their Governors and state environmental commissioners or
secretaries (discussed below in section V.C) that were submitted no
later than 45 days from the date of signature of this rule and on the
manufacturers' opt-ins submitted no later than 60 days from signature
of this rule.15 If EPA finds National LEV in effect, all
parties are bound by their commitments to the program. While any party
that misses its deadline for opt-in is not barred from submitting a
late opt-in, EPA is only required to consider timely opt-ins in
determining whether National LEV is in effect. Moreover, given the very
short timeframe for the opt-in process and the fact that some parties
may be reluctant to opt in before they know whether others will do so,
a late opt-in is likely to jeopardize the start-up of the program.
---------------------------------------------------------------------------
\14\ EPA will provide directly affected parties actual notice
and make copies of the FRM available within a week of signature.
Upon request, copies of the FRM will also be made available to other
parties in the same timeframe.
\15\ If one of these deadlines would otherwise fall on a weekend
or federal holiday, the FRM sets the deadline as the next business
day.
---------------------------------------------------------------------------
As proposed, after the initial opt-ins and an EPA finding that the
program is in effect, the OTC States will generally have one year from
the date of the in-effect finding to submit the final portion of their
opt-ins, which is a SIP revision committing the state to the National
LEV program and allowing manufacturers to comply with National LEV as
an alternative to a state Section 177 Program, as described in more
detail in section V.C.4 below. For a few states, specifically Delaware,
New Hampshire, Virginia and the District of Columbia, the deadline is
eighteen months, rather than one year, from the date of the in-effect
finding. These states have particular circumstances related to their
state rulemaking processes that make a one-year deadline unrealistic.
If a state were to miss its deadline for submission of its SIP revision
committing to National LEV, the manufacturers would have the
opportunity to opt out of the program, as discussed further in section
VI.
C. OTC State Commitments, Manufacturer Opt-Ins, and EPA Finding That
National LEV Is in Effect
This section describes the process for the OTC States and the
manufacturers to commit to the National LEV program and for EPA to find
the program in effect. This includes how the OTC States will commit to
the program, the elements of their commitments, the permissible
conditions on OTC State and manufacturer opt-ins, and the criteria that
EPA will use to find the program in effect.
1. Initial Opt-In by OTC States
As proposed, the OTC States will commit to National LEV in two
steps, the first of which is an opt-in package from each state's
Governor and environmental commissioner, indicating the OTC State's
intent to opt into National LEV. The second step is a SIP revision
incorporating the OTC States' commitment to National LEV in state
regulations, which EPA will approve into the federally-enforceable SIP.
To opt into National LEV, within 45 days of signature of this rule,
the Governor (or Mayor, in the District of Columbia) will submit to EPA
an executive order or a letter committing the OTC State to the National
LEV program. As specified in 40 CFR 86.1705(e), the executive order or
letter will contain three main elements. First, it will state that its
purpose is to opt the state into National LEV. Second, it will state
that the Governor is forwarding a letter signed by the head of the
state environmental agency (or other appropriate agency or department),
which specifies the details of the state's commitment to the National
LEV program. Third, it will state that the Governor has directed the
head of the state environmental agency to take the necessary steps to
adopt regulations and submit a SIP revision committing the state to
National LEV in accordance with the requirements of the National LEV
regulations. In addition, OTC States with existing ZEV mandates
16 may add language confirming that the opt-in will not
affect the state's requirements pertaining to ZEVs.
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\16\ ZEV mandates are those state regulations or other laws that
impose (or purport to impose) obligations on auto manufacturers to
produce or sell a certain number or percentage of ZEVs. Any OTC
State with a ZEV mandate that was adopted prior to the signature
date of this rule is considered a state with an existing ZEV
mandate.
---------------------------------------------------------------------------
The Governor's executive order or letter will enclose a letter
signed by the state environmental commissioner or secretary of the
appropriate state department (``commissioner's letter''), which
specifies the details of the state's commitment to National LEV.
Alternatively, if an OTC State has proposed regulations meeting the
requirements for a SIP revision specified below, the state may
substitute the proposed regulations for the portions of the
commissioner's letter for which they are duplicative. In that case, the
Governor will send to EPA the Governor's executive order or letter, the
proposed regulations, and a letter from the commissioner, which will
contain the elements specified below that were not included in the
proposed regulations.
As proposed, the commissioner's letter will include the following
elements. First, it will indicate that National LEV would achieve
reductions of VOC and NOx emissions equivalent to or greater
than the reductions that
[[Page 933]]
would be achieved through state adopted Section 177 Programs in the
OTR. Second, it will indicate that the state intends National LEV to be
the state's new motor vehicle emissions control program. Third, it will
state that for the duration of the state's participation in National
LEV, the state will accept National LEV or mandatory federal standards
of at least equivalent stringency as a compliance alternative to any
state Section 177 Program. As EPA is defining it here, a state Section
177 Program is any regulation or other law, except a ZEV mandate,
adopted by an OTC State in accordance with section 177 and which is
applicable to passenger cars, light-duty trucks up through 6,000 pounds
GVWR, and/or medium-duty vehicles from 6,001 to 14,000 pounds GVWR if
designed to operate on gasoline, as these vehicle categories are
defined under the California regulations. (This commitment would not
restrict states from adopting and implementing requirements under
section 177 for heavy-duty trucks and engines and diesel-powered
vehicles between 6,001 and 14,000 pounds GVWR.) The letter will further
state that the state's participation in National LEV extends until
MY2006, except as provided in the National LEV regulations' provisions
addressing the duration of the OTC State commitments and state
offramps. However, in a change from the proposal (discussed in section
V.A above), the letter will add that if no later than December 15,
2000, EPA does not issue mandatory new motor vehicle standards (``Tier
2 standards'') at least as stringent as National LEV and that would go
into effect no later than MY2006, then the state's participation in
National LEV extends only until MY2004, except as provided in the
National LEV provisions for state offramps. The offramps allow the OTC
States to exit National LEV if an auto manufacturer were to decide to
exit the program. OTC States without existing ZEV mandates would add a
statement that the state accepts National LEV as a compliance
alternative to any ZEV mandates. OTC States with existing ZEV mandates
would add a statement that their acceptance of National LEV as a
compliance alternative for state Section 177 Programs does not include
or have any effect on the OTC State's ZEV mandates.
Fourth, the commissioner's letter will include both an explicit
recognition that the manufacturers are opting into National LEV in
reliance on the OTC States' opt-ins, and a recognition that the
commitments in the initial OTC State opt-in package have not yet gone
through the state rulemaking process to be incorporated into state
regulations, so they do not yet have the force of law; in addition, the
letter will recognize that the state's executive branch must comply
with any laws passed by the state legislature that might affect the
state's commitment. The manufacturers' comments opposed inclusion of
the proposed language stating that the provisions of the state's letter
would not have the force of law until adopted as state regulations and
that the state must comply with any state legislation that might affect
the commitment. The manufacturers expressed concern that these
provisions undermine the states' commitments. However, a number of
states have indicated to EPA that they could not make a commitment of
this nature before completing the states' rulemaking processes, unless
they included language to clarify the legal nature of the initial state
commitment. In light of the fact that the states will not have
sufficient time to complete a rulemaking before opting into National
LEV, EPA believes it is appropriate for the opt-in provisions to allow
the states to include the language that EPA proposed. EPA does not
believe this language will in any way affect the degree to which the
states are legally or politically bound by their initial opt-ins.
Fifth, the commissioner's letter will include an acknowledgment
that, if a manufacturer were to opt out of National LEV pursuant to the
opt-out provisions in the National LEV regulations, the transition from
the National LEV requirements to any state Section 177 Program or ZEV
mandate would be governed by the National LEV regulations. Sixth,
similar to the manufacturers' opt-in letters, the commissioner's letter
will state that the state supports the legitimacy of the National LEV
program and EPA's authority to promulgate the National LEV regulations.
The OTC States have indicated that they support certain commitments
regarding ZEV mandates by including those provisions in the MOU voted
on by the OTC and initialed by the OTC pursuant to the vote. Consistent
with the provisions in the MOU initialled by the OTC, for states
without existing ZEV mandates, the commissioner's letter will state
that the state intends to forbear from adopting a ZEV mandate effective
during the period of the state's participation in National LEV. In this
rule, EPA is defining an existing ZEV mandate as a ZEV mandate adopted
by an OTC State prior to the signature date of this rule. The
manufacturers commented that the states should commit that they will
forbear from adopting ZEV mandates, rather than only stating their
intent to forbear from such action. However, the OTC States have
expressed their concern about attempting to bind future legislatures in
this way and have consistently indicated that such language would not
be acceptable to them. As it stated in the NPRM (60 FR 52740) and SNPRM
(62 FR 44760) for National LEV, EPA believes that the decision
regarding adoption of ZEV mandates by OTC States must be left up to
each individual OTC State, to the extent permitted under section 177.
Thus, EPA believes it is appropriate to include the language supported
by the OTC States here. If any OTC State would prefer to commit that it
will forbear from adopting a ZEV mandate, it may make that commitment
in its opt-in.
The commissioner's letter from OTC States that have not adopted a
Section 177 Program at the time of signature of this rule need not
include a commitment or statement of intent to forbear from adopting a
Section 177 Program effective during the period of the state's
commitment to National LEV, as long as the state commits to accept
National LEV as a compliance alternative to any such program. EPA took
comment on such a provision in the SNPRM (60 FR 44760) because the
draft MOU initialed by the manufacturers included a statement that
certain OTC States would forbear from adopting such ``backstop''
Section 177 Programs,17 while the draft MOU initialed by the
OTC States did not include any statement regarding adoption of such
backstop programs. The comments on the SNPRM from the manufacturers and
the OTC States reiterate these positions. In particular, the
manufacturers stated that allowing all OTC States to adopt backstop
Section 177 Programs would destabilize the National LEV program. The
manufacturers are concerned that the prospect of a return to Tier 1
vehicles in at least some OTC States if a state violates its commitment
to National LEV is a powerful incentive for states to abide by their
commitments that would be lost with widespread backstops. EPA agrees
that the absence of backstops in some OTC States would contribute to
program stability in the manner that the manufacturers suggest.
However, EPA does not believe it is necessary to bar states from
adopting backstops to provide this source of stability, as it is highly
unlikely that all or nearly all OTC States will adopt backstop Section
[[Page 934]]
177 Programs effective during the relevant time period and it is
unlikely that more than a few (if any) states outside the OTR would
adopt backstop programs. In addition, the OTC States said that they are
unwilling to commit not to adopt backstop programs. Thus, EPA does not
believe it is appropriate to include a provision committing not to
adopt a backstop Section 177 Program as an element of the OTC States'
commitments to National LEV.
---------------------------------------------------------------------------
\17\ ``Backstop'' Section 177 Programs are programs that allow
National LEV as a compliance alternative to the Section 177 Program
requirements.
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Finally, the commissioner's letter may include a statement that the
state's opt-in to National LEV is conditioned on all of the motor
vehicle manufacturers listed in the National LEV regulations opting
into National LEV pursuant to the National LEV regulations and on EPA
finding National LEV to be in effect. However, as with the
manufacturers' opt-ins, no conditions other than those specified in the
regulations may be placed on any of the state opt-in instruments (the
Governor's executive order or letter, the commissioner's letter, or the
SIP revision).
The OTC States commented that the regulations should allow an OTC
State to condition its opt-in on signature of an acceptable independent
agreement with the manufacturers to promote advanced technology
vehicles (ATVs). An agreement on ATVs has not been contemplated to be
part of the National LEV regulations, but has been discussed as a
separate agreement between the OTC States and the auto manufacturers.
At one point, the OTC States and manufacturers reached consensus on the
substance and language of an ATV agreement, which was to establish
mechanisms for sharing information not only about advanced technology
vehicles and alternative fuels, but also about the incentives and
infrastructure development necessary to make new technology feasible.
This agreement was attached to the MOUs initialed by the manufacturers'
organizations and the OTC. EPA supports this agreement, but does not
believe that opt-ins to National LEV need be conditioned on final
signature of the agreement. If the OTC States and manufacturers want to
finalize the agreement (contingent on National LEV coming into effect),
they can and should do so before the due date for the OTC State opt-
ins. There is no reason to delay finalizing the ATV agreement until
after the OTC States have opted in. Thus, although OTC States can
refuse to opt in if there is no ATV agreement, they cannot send in an
opt-in which is conditioned on an ATV agreement being signed.
In the regulations at 40 CFR 86.1705 (e) and (g), EPA is providing
specific language for each element of the OTC States' opt-ins to be
included in the Governor's executive order or letter, the
commissioner's letter, and the SIP revision. Although it is somewhat
unusual for EPA to identify specific language for state submissions,
EPA believes that this is an appropriate situation to do so. Because
the OTC States and manufacturers are signing up for a voluntary program
and are unlikely to sign an MOU, using specified language will ensure
that they sign up to the same program. Otherwise, the opt-ins might not
represent agreement on the terms and conditions of the voluntary
National LEV program. However, in a slight modification to the proposed
approach, the final regulations provide that for the Governors' and
commissioners' letters, a state may opt into National LEV using the
specified language or ``substantively identical language.'' Because the
first step of the OTC States' commitments to National LEV will occur
before the states can complete their rulemaking processes, EPA
recognizes that some slight wording variations may be necessary for
individual states. For the subsequent SIP revisions, however, states
will have the opportunity to go through notice-and-comment rulemaking
on the specified language. Moreover, because the deadline for
manufacturers to opt into National LEV is after the deadline for the
OTC States, the manufacturers will have the opportunity to assess the
adequacy of any state opt-ins that vary from the specified language. If
the variation is sufficient to undercut the assurance that the state
will carry out its commitment to National LEV, the manufacturers may
decide not to opt into National LEV. However, the manufacturers would
not have an opportunity to assess beforehand any variations in the SIP
revision language submitted by the states. Prior to opt-in, the
manufacturers can evaluate the SIP revision language specified in the
regulations to determine whether they view the language as an adequate
expression of the states' commitments to National LEV, but they would
not have the opportunity to evaluate any variations on that specified
language. The importance of ensuring that all parties know what they
are signing up to at the time of opt-in further supports the
requirement for states to use exact language for the SIP revisions.
Despite the possibility that states may opt into National LEV even
with slight non-substantive variations in the language of the
Governor's letter or commissioner's letter, EPA emphasizes that any
differences must be minor and non-substantive. Because the Governor's
letter and commissioner's letter are political as well as legal
documents, even language without direct legal effect is important to
bind the state politically to carry out its commitment. Hence, EPA and/
or the manufacturers are likely to view variations in such language as
substantive changes to the state's commitment. To avoid invalid opt-
ins, EPA expects most, if not all, OTC States to use the specified
language unmodified. Only a few OTC States commented that they might
need to make unspecified changes in the language. In addition, as
discussed further below, EPA will find National LEV in effect without
providing for additional notice-and-comment on whether the conditions
are met for finding National LEV in effect. EPA may proceed without
additional rulemaking or other process if the Agency's in-effect
finding is essentially a nondiscretionary action based on clear factual
determinations. If EPA must use its discretion to determine whether a
state has adequately committed to National LEV, that might require
further rulemaking and substantially delay implementation of the
program. However, if the OTC States use the language specified in the
regulations, which EPA has determined to be adequate through a notice-
and-comment rulemaking, EPA will be able to find National LEV in effect
on that basis.
EPA also recognizes that a state may wish to include background
information, especially in the Governor's executive order or letter.
This is permissible under today's regulations, providing that the
additional information does not add conditions to the state's opt-in.
2. Manufacturer Opt-Ins
As proposed, the motor vehicle manufacturers' opt-ins to National
LEV are due within 60 days from signature of this Final Rule. As
provided in the Final Framework Rule, a manufacturer will opt into
National LEV by submitting a written notification signed by the Vice
President for Environmental Affairs (or a company official of at least
equivalent authority who is authorized to bind the company to the
National LEV program) that unambiguously and unconditionally states
that the manufacturer is opting into the program, subject only to
conditions expressly contemplated by the regulations. See 40 CFR
86.1705(c)(2). The only permissible conditions on a manufacturer's opt-
in notification would be that the OTC States or the auto manufacturers
specified by the manufacturer opt into National LEV pursuant to the
National
[[Page 935]]
LEV regulations and that EPA find the program to be in effect. These
conditions parallel the permissible conditions described above for the
OTC States' opt-ins.
One commenter voiced a concern that the opt-in language that would
commit the manufacturers ``not to seek to certify any vehicle except in
compliance with the regulations in subpart R'' would prevent
manufacturers from certifying heavy-duty vehicles. The statement would
not have that effect. Heavy-duty vehicles are not covered by the
National LEV program, so they would not need to be (and could not be)
certified under the National LEV regulations. Similarly, this opt-in
language would not preclude manufacturers from seeking to certify a
vehicle for sale only in California and states that have the California
program in effect. The opt-in language also would not commit
manufacturers to obtain National LEV certificates for vehicles sold
outside the United States.
3. EPA Finding That National LEV Is In Effect
The OTC States' and the auto manufacturers' opt-ins will become
effective upon EPA's receipt of the opt-in notification or, if the opt-
in is conditioned, upon the satisfaction of that condition. As provided
in 40 CFR 86.1706, EPA will find National LEV in effect if each of the
listed manufacturers submits an opt-in notification that complies with
the requirements for opt-ins, each of the opt-in notifications
submitted by an OTC State complies with the requirements for opt-ins,
and any conditions placed upon any of the opt-ins are satisfied. Thus,
if all the parties that opted into National LEV agree to participate in
the program, even if fewer than all OTC States opt into National LEV,
EPA will find the program in effect. EPA believes that National LEV
should be a national program--effective in all states but California.
This would provide the OTR with emissions reductions greater than what
could be achieved without National LEV and would simplify distribution
and other aspects of the sale of motor vehicles. Moreover, the
manufacturers have stated that they are not willing to opt into
National LEV unless each and every OTC State opts into National LEV.
However, if the OTC States and auto manufacturers are willing to
participate in a National LEV program even if all OTC States do not opt
in, EPA will not stand in the way of National LEV going into effect. By
allowing each of the parties in National LEV to condition their
agreement to opt in on specified other parties opting in, EPA is
leaving it up to each of the parties to decide what is an acceptable
basis for its own participation. EPA expects that each motor vehicle
manufacturer and each OTC State will carefully evaluate the National
LEV program as a whole and make the choice as to whether and under what
conditions it chooses to participate.
Once all conditions on opt-ins are satisfied, the manufacturers
will be subject to the National LEV requirements for new motor vehicles
for the duration of the program, and the OTC States that opt in will be
committed to participate in the National LEV program for the duration
of their commitments, as discussed above in section V.A.
While the OTC States' SIP revisions are a necessary component of
their commitments to National LEV, EPA will make the finding as to
whether National LEV is in effect and National LEV will begin before
the OTC States' SIP revisions are due. Through an executive order or
letter, the Governor of each state will have opted into National LEV
and started the process for submission of an approvable SIP revision.
Also, as discussed further below, an OTC State's failure to submit the
SIP revision within the time provided for submission would give
manufacturers an opportunity to opt out of the National LEV program.
See Sec. VI.A.2; 40 CFR 86.1707(f). Together, this high level directive
for action and the consequences of a failure to conclude the action
provide substantial assurance that the OTC States will submit their SIP
revisions within the specified time.
EPA will publish the finding that National LEV is in effect in the
Federal Register, but the Agency will not go through additional
rulemaking to make this determination. In the Final Framework Rule, EPA
stated that further Agency rulemaking to find National LEV in effect
would be unnecessary because EPA would establish the criteria for the
finding through notice-and-comment rulemaking, and EPA's finding that
the criteria are satisfied would be an easily verified objective
determination. See 62 FR 31226 (June 6, 1997). The public has had full
opportunity to comment on the adequacy of the elements of the
manufacturers' and OTC States' opt-ins. Thus, EPA will find that
National LEV is in effect without conducting further rulemaking if the
Agency determines that each of the listed manufacturers has submitted
an opt-in notification that includes the specified elements in approved
language without qualifications, each of the opt-in notifications
submitted by an OTC State includes the specified elements in specified
or substantively identical language without qualifications, and any
conditions placed upon any of the opt-ins have been satisfied.
4. SIP Revisions
Within one year (eighteen months for a few specified states, as
discussed above in section V.B) of the date set for EPA's finding that
National LEV is in effect, the OTC States will complete the second
phase of their commitments to National LEV by submitting SIP revisions
to EPA incorporating their commitments (``National LEV SIP
revisions''). As proposed and specified in 40 CFR 86.1705(g), the SIP
revisions will contain the following elements incorporated in
enforceable state regulations.
The first regulatory provision will commit that, for the duration
of the state's commitment to National LEV, the manufacturers may comply
with National LEV or mandatory federal standards of at least equivalent
stringency as a compliance alternative to any state Section 177 Program
(which is any regulation or other law, except a ZEV mandate, adopted by
an OTC State in accordance with section 177 and which is applicable to
passenger cars, light-duty trucks up through 6,000 pounds GVWR, and
medium-duty vehicles from 6,001 to 14,000 pounds GVWR if designed to
operate on gasoline, as these vehicle categories are defined under the
California regulations).18 This provision would not restrict
states from adopting and implementing requirements under section 177
for heavy-duty trucks and engines and diesel-powered vehicles between
6,001 and 14,000 pounds GVWR. The regulations will also commit the
state to participate in National LEV until MY2006, except as provided
in the National LEV regulatory provisions for the duration of the OTC
State commitments, including provisions for state offramps. However, as
discussed in section V.A above, the regulations will also provide that
if, no later than December 15, 2000, EPA has not issued mandatory new
motor vehicle standards (``Tier 2 standards'') at least as stringent as
National LEV that would go into effect no later than MY2006, then the
state is committed to participate in National LEV only until MY2004,
except as provided in the National LEV provisions for state offramps.
States that do not have an existing ZEV mandate (see n. 16 above)
[[Page 936]]
will additionally provide that manufacturers may comply with National
LEV as a compliance alternative to any ZEV mandates for the duration of
the state's commitment to National LEV.
---------------------------------------------------------------------------
\18\ OTC States that had Section 177 Programs at the time of
opt-in would need to modify their existing regulations in accordance
with this provision.
---------------------------------------------------------------------------
The second element of the state regulations will explicitly
acknowledge that, if a manufacturer were to opt out of National LEV
pursuant to the opt-out provisions in the National LEV regulations, the
transition from the National LEV requirements to any state Section 177
Program or ZEV mandate (for states without existing ZEV mandates) would
be governed by the National LEV regulations, thereby incorporating
these National LEV provisions by reference into state law.
The SIP submission to EPA will include state regulations containing
the elements discussed above, and a transmittal letter or similar
document from the state commissioner forwarding those regulations. As
proposed, four additional elements of the SIP commitment must be
included either in the transmittal letter or the state regulations.
First, the state will commit to support National LEV as an acceptable
alternative to state Section 177 Programs for the duration of the
state's commitment to National LEV. Second, the state would recognize
that its commitment to National LEV is necessary to ensure that
National LEV remain in effect. Third, the state will state that it is
submitting the SIP revision to EPA in accordance with the National LEV
regulations. Fourth, each OTC State without an existing ZEV mandate
(see n. 16 above) will state that, for the duration of the state's
commitment to National LEV, the state intends to forbear from adopting
a ZEV mandate effective during the period of the state's participation
in National LEV. See section V.C.1 above for further discussion of OTC
State commitments relating to ZEV mandates. As discussed in section
V.C.1 above, OTC States that had not adopted a Section 177 Program at
the time of signature of this rule would not need to commit not to
adopt backstop Section 177 Programs.
EPA will be able to find that an OTC States' SIP submission meets
the National LEV SIP requirements and to approve it into the SIP
without further rulemaking as long as the submission both includes the
language specified in the regulations without additional conditions and
meets the CAA requirements for approvable SIP submissions. In the
SNPRM, EPA provided full opportunity for public comment on the language
that the states would use in their SIP revisions. Today's rule
finalizes that language with a few modifications arising from the
public comments. Thus, in reviewing such a SIP submittal, EPA will only
have to determine whether the submittal includes the specified language
without additional conditions, and whether it meets the statutory
criteria for approvable SIP submissions, as laid out in sections
110(a)(2) and 110(l) of the CAA. Section 110(a)(2), in relevant part,
specifies that the state must have provided public notice and a hearing
on the SIP provisions and the submission must provide necessary
assurances that the state will have adequate personnel, funding and
authority under state law to carry out the provisions. Section 110(l)
(discussed in more detail below) provides that SIP revisions must not
interfere with attainment or any other applicable requirement.
In this case, these requirements for EPA's approval are easily
verified objective criteria. They leave EPA little discretion in
deciding whether a state submission meets the requirements for a
National LEV SIP revision, and consequently remove any benefits to be
derived from conducting notice-and-comment rulemaking on each approval.
Determining whether the language of the SIP submittal tracks the
language provided in the final regulations and whether the state has
substantively qualified or conditioned that language through
modifications or additions is a straightforward, essentially
ministerial task. This is also true for assessing whether the state has
provided notice and a public hearing on the SIP submission. Because
National LEV is a federal program, the state needs no personnel or
funding to carry it out, so there is nothing related to the requirement
for adequate personnel and funding for EPA to evaluate. For a state
with existing regulations requiring compliance with a state Section 177
Program, EPA will merely have to determine whether the state has
modified its regulations to include the language in the National LEV
regulations to accept National LEV as a compliance alternative for the
specified duration of the state commitment, as well as the additional
provisions specified above. Again, this is a very simple, objective
assessment. Finally, EPA has determined that National LEV would provide
reductions in the OTR equivalent to or greater than OTC State Section
177 Programs in the OTR (see section IV), so that an OTC State
commitment to National LEV would not interfere with attainment or any
other Act requirement. See below for further discussion of this point.
Incorporating the OTC States' commitments to National LEV in state
regulations approved into the SIPs will substantially enhance the
stability of the National LEV program and support giving states credit
for SIP purposes for emissions reductions from National LEV. A SIP
revision would clearly indicate a state's commitment to National LEV
and would reiterate the state executive branch's support for the
National LEV program. More importantly, an approved SIP revision is
federal law and hence has binding legal effect. General Motors Corp. v.
U.S., 496 U.S. 530, 540 (1990).
In the SNPRM, EPA explained the circumstances under which EPA
believes these SIP commitments would have binding effect. Several
commenters disagreed with EPA's legal interpretations. Of course,
whether a subsequent state law or regulation could be approved into the
SIP or whether it would be preempted by the earlier National LEV SIP
revision would be a fact-specific determination that could not be made
unless and until a state took final action arguably in conflict with
its National LEV SIP revision. Although this is an issue that might
never arise, EPA believes it is appropriate to lay out the key legal
principles that EPA believes would apply in such circumstances so that
any OTC State that submits a National LEV SIP revision does so with a
full understanding of how its commitment to National LEV would be
enforceable.
A National LEV SIP revision would provide that the state commits to
accept National LEV or mandatory federal standards of at least
equivalent stringency as a compliance alternative to a state program
under section 177 for a specified time period. EPA approves SIP
submissions through a federal notice-and-comment rulemaking process
under section 110(k) of the Act. Approved SIP submissions are
incorporated by reference into the CFR and are enforceable federal law.
If a state adopted new state law or regulations that violated this
commitment in the SIP (e.g., by requiring compliance only with a state
Section 177 Program), this new state law would conflict with the
federally-approved National LEV SIP revision and would not be valid
prior to EPA approval into the SIP of the new law. Prior to such
action, the new state law would be precluded by the federal law with
which it conflicted (i.e., the SIP revision EPA had approved). The
courts have held that where Congress has the power under the Supremacy
Clause of the U.S. Constitution to preempt an area of state law (which
it has with respect to air pollution controls), state law is preempted
if either Congress evidences
[[Page 937]]
an intent to occupy a given field, or to the extent that the state law
actually conflicts with federal law. Hence, the later state regulation
that did not allow National LEV as a compliance alternative would be
preempted by the federally-approved National LEV SIP provision and
would be unenforceable against the manufacturers. Manufacturers could
bring suit against the state to clarify that the new state law was not
enforceable until approved by EPA, thereby enforcing the initial SIP
commitment in federal court.
To revise the SIP, the state would have to submit the new
provisions and EPA would have to approve them into the SIP through
notice-and-comment rulemaking. If EPA approved the new provisions, they
would take effect. If EPA disapproved the new provisions, then the new
state law would continue to conflict with the federally-approved SIP
revision (which is federal law) containing the state commitment to
National LEV, and manufacturers could seek a judicial determination
that the federally-approved National LEV SIP revision commitment
preempted the new state law.
Once a state has an approved SIP provision committing to accept
National LEV as a compliance alternative for a specified duration,
under section 110(l) of the CAA, EPA would be obligated to disapprove a
subsequent SIP revision that violated the state's commitment if EPA
were to find that the SIP revision would interfere with other states'
ability to attain or maintain the national ambient air quality
standards (NAAQS). Specifically, section 110(l) provides that EPA must
disapprove a plan revision if it ``interfere[s] with any applicable
requirement concerning attainment and reasonable further progress * * *
or any other applicable requirement of this Act.'' By the terms of its
rulemaking, National LEV comes into and stays in effect only if all
relevant states commit to allow it as a compliance alternative. If
National LEV comes into effect, a number of OTC States, as well as
states outside the OTR, are likely to rely on National LEV as a means
of attaining and maintaining the ozone NAAQS. These states are likely
to forego adoption of other control measures because they will count on
reductions from National LEV to meet their attainment and maintenance
obligations. In this manner, other states will be relying on each of
the OTC States keeping its commitment to National LEV. An OTC State
breaking its commitment to allow National LEV as a compliance
alternative could lead to the dissolution of the National LEV program,
which in turn would likely deprive other states of the emission
reductions from National LEV, and could thereby interfere with those
other states' ability to attain. As discussed above, in the SIP
revisions committing to National LEV, each OTC State would explicitly
recognize that the state's commitment to National LEV is necessary to
ensure that the program remain in effect.
One commenter opposed EPA's reading of section 110 on several
grounds, focusing in particular on the potential effects on states
downwind from the violating state. The commenter objects to anything
that would discourage a state that committed to National LEV from
implementing a Section 177 Program if that state finds in the future
that National LEV will not prevent emissions within that state from
interfering with attainment in downwind states. The commenter claims
that the commitment to National LEV would violate the section
110(a)(2)(D) requirement that emissions in a state cannot interfere
with attainment or maintenance in downwind states.
EPA rejects the suggestion that a state's commitment to National
LEV has the potential to interfere with that state's ability to comply
with section 110(a)(2)(D). Section 110(a)(2)(D) requires SIPs to
``contain adequate provisions prohibiting * * * any source or other
type of emissions activity within the State from emitting any air
pollutant in amounts which will * * * contribute significantly to
nonattainment in, or interfere with maintenance by, any other state. *
* *'' Thus, section 110(a)(2)(D) holds a state responsible for reducing
a given quantity of emissions that contributes significantly to
nonattainment in another state. It does not mandate any particular
measure for reducing those emissions, and the Circuit Court of Appeals
for the District of Columbia, in Virginia v. EPA, 108 F. 3d 1397 (D.C.
Cir. 1997), precluded EPA from requiring states to adopt a program
under section 177. States commonly make choices between emissions
control measures, and the decision to adopt one measure often precludes
another, usually due to practical constraints such as incompatible
technology, limited resources, lead time requirements, etc. The choice
of National LEV is no different. In selecting National LEV as a means
of controlling emissions from new motor vehicles, a state will be fully
aware that the choice requires giving up the ability to adopt a state
Section 177 Program for a given period of time, except under specified
circumstances. EPA has determined that National LEV produces equivalent
or greater emissions reductions than OTC State-by-State adoption of
Section 177 Programs. Thus, the only way in which adoption of OTC State
Section 177 programs in lieu of National LEV could help meet OTC
States' section 110(a)(2)(D) obligations is if California were to adopt
more stringent CAL LEV requirements, all or almost all OTC States also
adopted such standards, and the timing of the adoptions was such that
the standards would become effective earlier than the date on which the
OTC States' participation in National LEV would have ended had the
states opted into National LEV instead. For National LEV to come into
effect in MY1999, OTC States must evaluate the alternatives based on
the information available at this time and make a choice now as to
whether to opt into National LEV. As is often the case, if state
regulators wait until they have perfect information about all possible
options, one option--National LEV, which now looks to be the most
attractive option--will no longer be available. Nor is it an option for
OTC States to opt into National LEV without making an enforceable
commitment for the specified duration. National LEV is a voluntary
program for both states and manufacturers, and manufacturers are
unwilling to supply National LEV vehicles without assurance that their
future compliance obligations will remain stable for the specified
duration. Therefore, a commitment by OTC States to accept compliance
with National LEV for the specified duration is an integral and
critical element of National LEV. Based on the options and information
available now to OTC States and only the possibility that California
will tighten its standards at some point in the future, an OTC State
that made an enforceable commitment to National LEV for the specified
duration could not be said to be interfering with attainment of
downwind states, nor could that commitment be held unenforceable in the
future. Of course, for most OTC States, National LEV is only one of the
actions they will need to take to meet their CAA obligations. States
committed to National LEV would remain responsible for compliance with
section 110(a)(2)(D) and would be able to use other means to achieve
the necessary reductions. Thus, the state commitments to National LEV
in no way violate section 110(a)(2)(D), nor are they consequently
unenforceable as the commenter suggests.
The commenter further asserts that EPA is attempting to prohibit
states from adopting Section 177 Programs
[[Page 938]]
and this is illegal and contrary to section 177, which provides states
the right to adopt state standards for new motor vehicles that are
identical to California standards. EPA agrees that section 177 clearly
provides states the right to adopt the California standards. Under
National LEV, states make the choice whether to exercise that right and
implement the California standards, or to commit to accept
manufacturers' compliance with an alternative set of emissions controls
on new motor vehicles for a limited period of time. The OTC States and
the manufacturers developed the basic framework and requirements for
the National LEV program and the fundamental agreement on which it is
based. EPA does not have the authority to require the manufacturers to
produce National LEV vehicles without their agreement or to require the
OTC States to commit to National LEV. Absent the voluntary actions of
the manufacturers and OTC States there will be no National LEV Program.
However, if the manufacturers and OTC States choose to commit to
National LEV and bring the program into being, it is in no way contrary
to section 177 or any other provision of the Clean Air Act for EPA to
enforce the agreement in the manner provided in today's rule.
The commenter further contends that EPA's reading of section 110(l)
is incorrect for several reasons. As discussed above, under EPA's
interpretation, section 110(l) could bar EPA from approving into the
SIP a state submission that would revoke an earlier SIP provision
committing a state to accept National LEV as a compliance alternative
for a specified duration. First, the commenter states that based on the
same analysis, EPA could use its authority under section 110(k)(5) to
require even unwilling states to revise their SIPs to accept National
LEV as a compliance alternative on the theory that failure to do so
would frustrate National LEV and thus interfere with attainment in
neighboring states. The commenter states that EPA has no such authority
under section 110(k)(5), (under Commonwealth of Virginia v.
Environmental Protection Agency, 108 F.3d 1397 (D.C. Cir. 1997).
EPA rejects the contention that the section 110(k)(5) analysis is
comparable to EPA's interpretation of section 110(l). As emphasized
above, National LEV is a voluntary program. Enforcing an agreement that
states have voluntarily entered into is a fundamentally different
action from mandating that states enter into an agreement. More
specifically, EPA's interpretation of section 110(l) relies on the
effect that a violation of a state commitment is likely to have on
other states that have relied upon the National LEV program. A program
will not be useful for state air pollution control and planning
purposes unless there is some assurance that it will continue over
time, and EPA has attempted to structure National LEV so as to provide
such an assurance of stability. Given this structure, states will
likely reasonably rely on achieving a certain quantity of emissions
reductions from National LEV and hence will likely decide not to adopt
other pollution control measures. Since most measures take time to
adopt and implement, the sudden and unexpected loss of emissions
reductions from National LEV would be likely to cause a significant
delay in some states' emissions control efforts. As a consequence, it
would affect such states' ability to meet the statutory and regulatory
deadlines for attainment as well as the obligation to protect the
health and welfare of their citizens. In contrast, if OTC States did
not commit to National LEV and the program never came into effect,
while the opportunity for emissions reductions from National LEV would
be lost, states would never have expected to receive those reductions,
would not have foregone opportunities for other types of emissions
reductions, and would not be disadvantaged in their ability to pursue
other measures. Under those circumstances, EPA would have no basis for
finding that failure to include a commitment to National LEV would make
a SIP substantially inadequate to attain the NAAQS or otherwise comply
with any requirement of the CAA.
The commenter also cites section 110(a)(2)(D) to argue that section
110 holds each state responsible only for emissions within its
jurisdiction and requires a state to take action only if those
emissions are interfering with attainment in another state. EPA agrees
that section 110(a)(2)(D) only applies to emissions activity within the
state, but EPA is here relying on section 110(l), not section
110(a)(2)(D). Section 110(l) simply provides that EPA shall not approve
a revision if it ``would interfere with any applicable requirement
concerning attainment and reasonable further progress * * * or any
other applicable requirement of [the] Act.'' (Emphasis added.) Section
110(l) makes no reference to emissions activities within the state, and
EPA declines to attempt to read in such a limitation.
The commenter states further that it would not violate section 110
for EPA to approve into a SIP state provisions that replace National
LEV with a section 177 program when the section 177 program would
result in equivalent or lower emissions within the state. If the
manufacturers might choose to opt out of National LEV as a consequence
of an EPA approval of such a revision, the revision would jeopardize
all of the emissions reductions from the National LEV program and
states without backstop programs could experience the significantly
higher emissions that would be produced by Tier 1 vehicles. Thus, it is
highly unlikely that the proposed SIP revision would not interfere with
attainment in at least some states that had relied upon National LEV,
even if emissions in the violating state remained stable or decreased
and vehicles from the violating state that migrated into other states
emitted at the same or lower levels. For these reasons, section 110(l)
could require EPA to disapprove the state's proposed revision.
Finally, the commenter states that EPA could not find that a
proposed SIP revision breaking the state's commitment to National LEV
would interfere with attainment under section 110(l) because
manufacturers would be allowed to sell Tier 1 vehicles in the violating
state even if they do not opt out of National LEV. In that situation,
approval of the section 177 program would reduce emissions in that
state in comparison to the Tier 1 requirements that would otherwise
apply. EPA disagrees with the commenter's analysis of how this
situation would relate to the requirements of section 110(l). Given the
likelihood that manufacturers would opt out of National LEV if EPA were
to approve the SIP revision, approval of the SIP revision would be
likely to result in overall higher emissions from Tier 1 requirements
in many states, not just one, and a number of these states are likely
to be relying on the reductions from National LEV. Moreover, the
violating state has the ability to avoid some or all of the negative
emissions effects of its action, either by not taking the action in the
first place, or by curing its violation, as discussed above in section
VI.A.1.19 In contrast, other states cannot prevent a state
from violating, but rather must rely on EPA's disapproval to retain the
emissions reductions that they are relying on for
[[Page 939]]
attainment. Under these circumstances, the fact that the violating
state had taken action that caused Tier 1 requirements to apply in that
state would not prevent EPA from disapproving that state's SIP revision
on the grounds that the revision would interfere with attainment in
other states.
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\19\ If a state violated its commitment, it would have the
ability to limit the period of time for which it would receive Tier
1 vehicles to approximately two full model years by curing the
violation. Even if EPA were to approve the SIP revision, the state
would receive Tier 1 vehicles for two years pursuant to the
requirement for lead time under section 177. Thus, an EPA
disapproval of a violating state's proposed SIP revision would not
necessarily result in higher emissions in the violating state
compared to the result if EPA had approved the proposed SIP
revision.
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VI. Incentives for Parties to Keep Commitments to Program
Once it comes into effect, National LEV is designed to be a stable
program that will remain in effect until replaced by mandatory federal
tailpipe standards of at least equivalent stringency, provided such
standards are necessary and cost-effective. Manufacturers have the
option, but not the requirement, to participate in National LEV.
Manufacturers have indicated a willingness to opt into the program, but
only if the EPA and the OTC States make certain commitments. To give
the manufacturers both assurance that the commitments will be kept and
recourse if they are not, the program includes a few specified
conditions (``offramps'') that would allow manufacturers to opt out of
National LEV if EPA or the OTC States did not keep their commitments.
In addition, the OTC States also need assurance that National LEV will
continue to provide the benefits they anticipated when they opted into
the program, both in terms of the number of manufacturers covered by
the program and the level of emissions reductions that the program was
designed to achieve. Thus, National LEV also includes limited offramps
for the OTC States to protect against changes in anticipated emission
benefits or the number of covered manufacturers. Both the
manufacturers' and the OTC States' offramps, set forth in 40 CFR
86.1707, are structured to maximize all parties' incentives to maintain
the agreed-upon program provisions and thereby to maximize the
stability of National LEV over its intended duration.
In the unlikely event that any of the offramps were triggered and
manufacturers or OTC States opted out, today's regulations set forth
which requirements would apply, the timing of such requirements, the
states in which they would apply, and the manufacturers that would have
to comply with them. The main purpose of these provisions is to enhance
the stability of the program by minimizing the incentives for EPA or
the OTC States to act in a manner that would trigger an offramp.
Additionally, EPA has structured the offramp provisions such that no
single event automatically would end the National LEV program. EPA will
continue to make National LEV available as long as one or more
manufacturers and one or more OTC States wish to remain in the program.
EPA recognizes, of course, that if a significant number of OTC States
or manufacturers were to opt out of National LEV, after a certain point
it is unlikely that the remaining parties would choose to continue the
program. However, the issue is highly unlikely to arise, and if it did,
it is not clear what would be the critical mass of opt-outs sufficient
to end the program. Rather than deciding now how many OTC State and
auto manufacturer opt-outs would be significant enough to end National
LEV, EPA believes it is both more appropriate and more efficient to
leave that decision to the OTC States and manufacturers to decide, in
the unlikely event that an offramp is triggered and significant opt-
outs occur. EPA has received no comments on the SNPRM opposing this
general approach.
In the NPRM, EPA proposed that the manufacturers' right to opt out
of the National LEV program would be limited to two conditions. These
offramps were: (1) EPA modification of a Stable Standard, except as
specifically provided, and (2) an OTC State's failure to meet or keep
its commitment regarding adoption or retention of a state motor vehicle
program under section 177. The Final Framework Rule addressed the first
offramp (recodified in today's rule at 40 CFR 86.1707(d)), which would
allow manufacturers to opt out of National LEV if EPA were to modify a
Stable Standard except as provided for under the National LEV
regulations. The second offramp is addressed in today's Final Rule. EPA
also is adding a third type of offramp related to auto manufacturers'
concerns regarding the effects of using federal fuel (instead of
California fuel) on emissions control systems. This is discussed in
section VI.C below. In addition, as proposed in the SNPRM, today's
Final Rule includes a fourth type of offramp that allows manufacturers
to opt out based on an OTC State or another manufacturer legitimately
opting out of National LEV. Today's rule also finalizes two offramps
for OTC States. An OTC State may opt out if a manufacturer opts out or
if EPA makes a finding that National LEV will not produce (or is not
producing) emissions reductions in the OTR equivalent to state Section
177 Programs in the OTR. Finally, this section discusses EPA's
interpretation of Section 177 if an offramp is taken.
A. Offramp for Manufacturers for OTC State Violation of Commitment
As established in today's Final Rule, there are several ways in
which an OTC State might break its commitment and thereby allow
manufacturers to opt out of National LEV. These are: (1) taking final
action in violation of the commitment to continue to allow National LEV
as a compliance alternative to a Section 177 Program or to a ZEV
mandate (in those OTC States without existing ZEV mandates); (2)
failing to submit a National LEV SIP revision within the timeframe set
forth in the National LEV regulations; (3) submitting an inadequate
National LEV SIP revision; and (4) taking final action (by an OTC State
without an existing ZEV mandate) adopting a ZEV mandate effective
during the state's commitment to National LEV. 20 The
discussion below addresses each of these possible types of OTC State
violations individually. EPA does not believe that any of these
scenarios are likely to arise under the National LEV program.
Nevertheless, spelling out in the regulations the consequences under
each of these scenarios will provide the parties certainty regarding
the worst-case outcomes, and more importantly, allows EPA to structure
the consequences so as to minimize the likelihood that any of these
scenarios will occur.
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\20\ In addition, as discussed in the following section,
manufacturers may opt out if an OTC State takes a legitimate
offramp.
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1. OTC State No Longer Accepts National LEV as a Compliance Alternative
The most significant way in which an OTC State could violate its
commitment to National LEV would be to attempt to have a Section 177
Program that was in effect during the state's commitment to National
LEV 21 and that did not allow National LEV or mandatory
federal standards of at least equivalent stringency as a compliance
alternative. 22 (An OTC State would not be in violation of
its commitment under National LEV if it had (or adopted) a Section 177
Program that was effective after the end of its commitment to National
LEV that did not allow National LEV as a compliance alternative.) This
could happen if an
[[Page 940]]
OTC State accepted National LEV as a compliance alternative to a state
Section 177 Program or a ZEV mandate (in an OTC State without an
existing ZEV mandate) and then took final action purportedly removing
the alternative compliance provisions from its regulations, leaving
only the state Section 177 Program or ZEV mandate requirements in
place. It would also happen if an OTC State took final action
purportedly adopting a Section 177 Program or a ZEV mandate (in an OTC
State without an existing ZEV mandate) without providing for National
LEV as a compliance alternative. 23 This violation of the
OTC State's commitment to National LEV attempts to impose a compliance
burden directly on the manufacturers and would abandon the most
fundamental element of the agreement underlying the voluntary National
LEV program.
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\21\ An OTC State's commitment to National LEV lasts until
MY2006, unless EPA fails to issue Tier 2 standards at least as
stringent as National LEV on or before December 15, 2000, in which
case the commitment lasts until MY2004.
\22\ Throughout this preamble, EPA often uses ``National LEV as
a compliance alternative'' as shorthand for ``National LEV or
mandatory federal standards of at least equivalent stringency as a
compliance alternative.''
\23\ In addition, an OTC State with a Section 177 Program in its
regulations at the time of opt-in that does not already permit
manufacturers to comply with National LEV as a compliance
alternative might fail to modify those existing regulations within
the time-frame provided, which is the same as the deadline for
submission of the state's SIP revision. The consequences of this
type of violation would differ slightly from the consequences of
other types of violations that attempted to have a Section 177
Program without allowing National LEV as a compliance alternative,
as noted below in n.24.
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The consequences of such a violation, as discussed below and set
forth in 40 CFR 86.1707(e), take into account the seriousness of the
breach of the commitment, even though the violation would not
necessarily directly burden the manufacturers. Once a state adequately
commits to National LEV through an approved SIP revision, even if the
state were to change its regulations to disallow compliance with
National LEV, the requirement would not be enforceable until EPA
approved a further SIP revision incorporating the change, as discussed
above in section V.C.4. Yet, although the violation might not actually
impose any burden on the manufacturers because it is not enforceable,
manufacturers should not be bound to comply with more stringent
National LEV requirements in the violating state and should not be
bound to continue in the National LEV program, as even an unenforceable
Section 177 Program would create risks and uncertainties for
manufacturers. Manufacturers would be at risk of having to defend
against a state enforcement action. The question of whether EPA could
approve a proposed state SIP revision deleting National LEV as a
compliance alternative--if only by virtue of the lack of precedence for
this issue and its dependence on the specific facts--would create
further uncertainty for manufacturers.
Manufacturers would be able to opt out at any time after an OTC
State took final action that would (or attempted to) require
manufacturers to comply with a Section 177 Program or a ZEV mandate (in
an OTC State without an existing ZEV mandate) prior to the end of the
state's commitment to National LEV without allowing them to comply with
National LEV or mandatory federal standards of at least equivalent
stringency as an alternative, even if the effective date of the state
requirement were some time in the future. The final state action would
be the action promulgating the state law or regulations at issue, not
the act of defending such law or regulations in litigation. Thus, a
self-effectuating state law purporting to impose a Section 177 Program
without including National LEV as a compliance alternative would be
final state action, as would final state regulations purporting to
impose such a program. A state law directing the relevant state agency
to change its regulations to remove National LEV as a compliance
alternative would not be a final state action, but the regulations
promulgated in accordance with that directive would be final state
action.
The manufacturers commented that the definition of ``final state
action'' should include the date on which a state passes legislation
that requires a state environmental agency to eliminate National LEV as
a compliance alternative, even if that state legislation is not self-
effectuating. EPA is concerned that it may not necessarily be clear in
a particular instance how a law directing a state agency to change its
regulations relating to National LEV would actually be implemented by
the state agency. Depending on the substantive results of the state
rulemaking process implementing the directives of the law and the
timing of such regulations, the state may or may not actually violate
its commitment to the program. Rather than attempting to hypothesize
the effect of final state regulations once promulgated, EPA believes it
is appropriate to define a final state action as the action that
finalizes the state law or regulations that would be directly
applicable to the motor vehicle manufacturers upon the effective date
of such law or regulations.
Today's rule provides that, if an OTC State were to violate its
commitment by purportedly disallowing National LEV as a compliance
alternative, there would be both automatic consequences in the
violating state and an opportunity for manufacturers to opt out of
National LEV.24 Two significant elements determine the
consequences in the violating state. The first element is the
manufacturers' National LEV compliance obligations in the violating
state. The second element is when the state Section 177 Program or ZEV
mandate requirements apply to manufacturers. Outside of the violating
state, manufacturers would continue to be subject to the National LEV
requirements unless they opted out of the National LEV program.
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\24\ In an OTC State that had a Section 177 Program in its
regulations at the time of opt-in and that had never accepted
National LEV as a compliance alternative to the Section 177 Program
requirements, the consequences in the violating state discussed in
this section would not apply, given EPA's interpretation of section
177. See section VI.E. However, the provisions for a manufacturer's
offramp would be the same for a state that failed to modify existing
regulations to accept National LEV as a compliance alternative as
for any other state action not allowing National LEV as a compliance
alternative.
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Until the violating state's Section 177 Program or ZEV mandate
requirements apply, the manufacturers' compliance obligations in that
state would be governed by the terms of the National LEV regulations.
In a state that had violated its commitment by attempting to have a
Section 177 Program or ZEV mandate without allowing National LEV as a
compliance alternative, beginning with the next model
year,25 the National LEV regulations would allow
manufacturers to sell vehicles complying with Tier 1 tailpipe standards
in that state and those vehicles would not be counted in determining
whether the NLEV fleet average NMOG standard was met. Because model
years generally run somewhat ahead of the calendar years with the same
numbers, generally this will result in a near-term or immediate change
in the manufacturers' compliance obligations.
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\25\ The ``next model year'' would be the model year named for
the calendar year following the calendar year in which the OTC State
took final state action violating its commitment. For example, if an
OTC State violated its commitment by taking final state action in
calendar year 1999, the next model year would be MY2000.
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EPA had proposed that, until the violating state's Section 177
Program requirements applied (which might not be until MY2006), the
manufacturers would only have to meet the federal Tier 1 tailpipe
standards for vehicles sold in the violating state, and those vehicles
would not be used to calculate the manufacturers' fleet NMOG averages.
Several commenters objected to this provision on the basis that the
violating state or a downwind state might need emissions reductions
from controls on new motor vehicles in the
[[Page 941]]
violating state during the timeframe in which National LEV regulations
required that federal Tier 1 standards be met in the violating state.
In response, EPA is modifying this provision slightly to allow a
violating state to ``cure'' a violation and regain the benefits of
National LEV (with respect to manufacturers that had not opted out of
National LEV) by reversing the action that caused the violation. EPA
believes it is highly unlikely that a state would violate its
commitment in the first place, let alone that it would do so and then
reverse its action shortly thereafter. Nevertheless such a scenario can
be envisioned, for example, in the situation where a state was counting
on an alternative means of obtaining needed emissions reductions and
then found that the alternative was for some reason not viable. EPA
believes that it is appropriate to structure the National LEV
regulations so as to maximize states' incentives to uphold their
commitments to National LEV without, under certain circumstances,
foreclosing a state from obtaining the benefits of National LEV for the
remainder of the National LEV program.
Under today's final rule, rather than allowing manufacturers to
sell only Tier 1 vehicles in a violating state for as long as the
manufacturers are governed by National LEV in that state, if the
violating state reverses its action (by taking final action
withdrawing, nullifying or otherwise reversing the final action that
violated its commitment), after a transition period, vehicles sold in
that state by manufacturers that had not opted out of National LEV
would once again be subject to the National LEV fleet average NMOG
requirements. Vehicles would be subject to the fleet average NMOG
standard as of the model year named for the second calendar year after
the violating state took the final action reversing the action that
broke its commitment or as of the model year named for the fourth
calendar year following the calendar year in which the violating state
took the final action, whichever is later. For example, if the
violating action occurred in 1999 and the violating state reversed that
action in 2000, vehicles sold in that state would count towards the
NLEV NMOG fleet average starting with MY2003 (the model year named for
the fourth calendar year following the calendar year in which the
violating action occurred). If the violating action action occurred in
1999 and was reversed in 2002, vehicles in that state would count
towards the NLEV NMOG fleet average starting with MY2004 (the model
year named for the second calendar year in which the violating action
was reversed). EPA believes that it is important to provide OTC States
that commit to National LEV with an incentive to keep their commitments
and that this approach provides such an incentive.26
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\26\ The commenters mistakenly assumed that, in the absence of
this provision, a state that broke its commitment would immediately
get the benefits of a state Section 177 Program. Rather, under
section 177, a violating state would only be entitled to Tier 1
vehicles for at least two years after it broke its commitment. Thus,
for at least two years, the National LEV provision that
manufacturers that stay in the program are obligated to provide only
Tier 1 vehicles in the violating state is consistent with what would
happen under section 177 if the violating state's action ended the
program. (For ease of administration, if a violating state is in and
then out and then back in the National LEV program, EPA has extended
the period that would otherwise be provided by section 177 to ensure
that when a states' vehicles again count towards calculation of the
NMOG average, all of a manufacturer's vehicles in the first covered
model year count towards the NMOG average.) Even were lead time not
required by section 177, EPA believes it is appropriate to give
manufacturers time to comply with new motor vehicle requirements
pursuant to a change in a state's requirements.
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The earliest date on which the violating state's Section 177
Program or ZEV mandate would apply is governed by the two model-year
lead time requirement of section 177, EPA's regulations on model year
at 40 CFR part 85 subpart X and the National LEV regulations. This date
would apply only for any auto manufacturer that opted out of National
LEV as a result of the violating state's action (provided that it is
later than the effective date of the opt-out), for any auto
manufacturer that decided to comply with the violating state's
requirements even though it otherwise chose to stay in National LEV,
and for all manufacturers if EPA approved the violating state's program
into the SIP.27 (As discussed above, EPA believes the
violating state's refusal to allow National LEV as a compliance
alternative would not otherwise be effective until MY2006 (or MY2004,
if EPA failed to issue Tier 2 standards at least as stringent as
National LEV on or before December 15, 2000).) Thus, if none of these
situations occurred, the only requirements applicable to manufacturers
in the violating state would be the National LEV regulations, which
would allow manufacturers to sell in the violating state vehicles that
meet Tier 1 tailpipe standards and to exclude those vehicles from the
fleet average NMOG calculation for the time period discussed above.
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\27\ Some commenters have expressed the view that, if an OTC
State were to delete National LEV as a compliance alternative, the
State's new (or revised) Section 177 Program would not be preempted
by the federally approved National LEV SIP revision nor would EPA
have the legal authority to disapprove the revised state program if
it were submitted to EPA for approval into the SIP. As discussed in
this preamble and the Response to Comments for today's rule, EPA
disagrees with these commenters. However, if these commenters were
correct regarding the legal status of the revised state program
disallowing National LEV as a compliance alternative, the earliest
date on which the violating state's Section 177 Program or ZEV
mandate would apply is governed by the lead time requirements in
section 177 and EPA's regulations on model year at 40 CFR Part 85
subpart X and in the National LEV regulations.
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After National LEV is in effect, a change to a state regulation
that deletes National LEV as a compliance alternative attempts to
change the manufacturers' obligations. In that circumstance, as
discussed in section VI.E below, EPA interprets section 177 to require
two years of lead time from the date that the state takes final action
changing its regulations (or other law) deleting National LEV as a
compliance alternative, regardless of when the state adopted its
previous Section 177 Program. Thus, pursuant to the model year
regulations at 40 CFR part 85 subpart X and today's regulations at 40
CFR 86.1707, the earliest the state Section 177 Program or ZEV mandate
requirements could apply would be to engine families for which
production begins after the date two calendar years from the date of
the final state action. For example, if the violating state promulgated
regulations purportedly removing National LEV as a compliance
alternative on June 1, 2000, the earliest the state Section 177 Program
or ZEV mandate requirements could apply would be to engine families
that began production on or after June 1, 2002, which might apply to
some, but certainly not all, MY2003 vehicles.
In the SNPRM, EPA raised the issue of whether manufacturers should
have at least four, rather than two, years of lead time from the date
that the state takes final action changing its regulations to delete
National LEV as a compliance alternative. The manufacturers' comments
advocated that there should be four years of lead time from the date of
the state violation of its commitment, but they did not suggest any way
(other than enforcing the commitment in a SIP) to make such a
requirement for lead time legally enforceable against a state that was
already in violation of its commitment to accept National LEV as a
compliance alternative to a state Section 177 Program. Numerous other
commenters opposed the idea of providing four years of lead time on the
basis that it is contrary to the statutory language governing lead time
for state programs adopted under section 177. The MOUs initialled by
the OTC and manufacturers' organizations did not
[[Page 942]]
allude to a four-year lead time under any circumstances, indicating
that the parties had not raised this in their negotiations, let alone
agreed upon it, as an appropriate element of the National LEV program.
Finally, the National LEV regulations provide several other significant
disincentives to an OTC State breaking its commitment, as discussed in
this section, and a four-year lead time would likely add little to
these existing disincentives. Thus, EPA does not believe it would be
reasonable to try to require a four-year lead time under section 177
for a state violation of its commitment to National LEV.
The combined effect of the National LEV regulations allowing
manufacturers to comply with Tier 1 tailpipe standards in the violating
state and the requirement for two-years lead time before the state
Section 177 Program or ZEV mandate requirements could apply means that,
if an OTC State were to violate its commitment by not allowing National
LEV as a compliance alternative, manufacturers would be subject to only
Tier 1 tailpipe standards (and not the NLEV NMOG average) in that state
for at least two years. As a consequence, the violating state could not
claim SIP credits for control of emissions from new motor vehicles
meeting anything more stringent than Tier 1 tailpipe standards during
that period. EPA believes that this would provide a powerful incentive
for the OTC States to uphold their commitments to accept National LEV
as a compliance alternative for the specified duration.
EPA recognizes that it may take manufacturers some time to take
advantage of the less stringent Tier 1 tailpipe standards, and that,
consequently, the hardware of the vehicles supplied to the violating
state may not change dramatically in the short-term. However,
manufacturers would be able to revise vehicle compliance levels rapidly
to provide that, for warranty and recall purposes, the vehicles are
only complying with Tier 1 tailpipe standards. This means that, over
the life of those vehicles, they would only be required to produce
emissions below the 50,000 mile and 100,000 mile Tier 1 standards and
enforcement action could not be taken to require those vehicles to meet
any more stringent standards.28 As long as manufacturers are
not required to sell vehicles meeting standards more stringent than
Tier 1 in the violating state, it would not be appropriate for EPA to
approve SIP credits for any emissions reductions beyond the levels
provided by Tier 1 tailpipe standards. Those vehicles would not be
included in calculating the manufacturers' compliance with the National
LEV fleet average NMOG standards. Thus, the state would not receive
emission credits beyond Tier 1 levels if the vehicles sold in that
state were certified to Tier 1 levels when sold in that state because
the SIP would not provide in any way for such vehicles to meet emission
standards more stringent than Tier 1 levels.
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\28\ See section VIII.C for discussion of how EPA's vehicle
certification process would allow a manufacturer to provide vehicles
meeting Tier 1 standards in a violating state.
---------------------------------------------------------------------------
In addition to the relaxed emissions standards that would apply to
vehicles sold in the violating state, the other incentive for OTC
States not to violate their commitments is that manufacturers would
also be able to opt out of National LEV if an OTC State violated its
commitment to the program by not allowing National LEV as a compliance
alternative. As proposed, the FRM does not set a time limit for
manufacturers to exercise their right to opt out as long as the state
is in violation of its commitment. After a manufacturer opted out,
there also would be no opportunity for the state to cure the violation
by changing the state law or regulations to accept National LEV as a
compliance alternative and thereby negate an opt-out that a
manufacturer had already submitted, regardless of whether that opt-out
had become effective already. However, once a violating state took
final action to cure the violation, manufacturers that had not already
opted out could not opt out based on the violation that the state had
cured.
The Final Framework Rule gives EPA an opportunity to make a finding
as to the validity of an opt-out based on a change to a Stable
Standard. See 62 FR 31202-07. This both provides a safe harbor for a
manufacturer that relies on an EPA determination of validity, and
provides for rapid resolution in the United States Court of Appeals for
the District of Columbia if the validity is disputed, thereby avoiding
protracted litigation in federal district court. In contrast, EPA does
not believe such a process is necessary here. The validity of an opt-
out based on a state disallowing National LEV as a compliance
alternative should be a straight-forward factual determination.
Consequently, EPA believes there is very little benefit to be gained by
providing for an EPA determination of the validity of such an opt-out,
and today's final rule does not provide for such a determination.
As proposed, a manufacturer that opts out of National LEV based on
a state violation of its commitment to National LEV must continue to
comply with National LEV until the opt-out becomes effective (although
Tier 1 tailpipe standards will apply in the violating state, as
discussed above). A manufacturer's opt-out notification must specify
the effective date of the opt-out, which in no event could be any
earlier than the next model year (i.e., the model year named for the
calendar year following the calendar year in which the manufacturer
opted out).29 After the effective date of its opt-out, a
manufacturer would have to comply with any non-violating state's
Section 177 Program (except for ZEV mandates) provided that at least
two-years lead time (as provided in section 177) had passed since the
adoption of the state's Section 177 Program. Other than those ZEV
mandates that would be unaffected by the National LEV program (i.e.,
existing ZEV mandates), if a manufacturer opts out, it would not be
subject to any other ZEV mandates until two years of lead time had
passed, which would run from the date the manufacturer opts out of
National LEV and be measured according to the section 177 implementing
regulations. After the effective date of a manufacturer's opt-out, in a
non-violating state without a Section 177 Program, the manufacturer
must meet all applicable federal standards that would apply in the
absence of National LEV.
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\29\ If, however, an OTC State took a legitimate offramp as
discussed below, a manufacturer could not use a delayed effective
date of opt out to continue to comply with National LEV in a state
that had opted out after that state's opt-out became effective. As
discussed below in section VI.D, an OTC State legitimately opting
out of National LEV is required to provide manufacturers at least
two-years lead time.
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The following summarizes the tailpipe standards that would apply if
an OTC State violated its commitment by not allowing National LEV as a
compliance alternative. For vehicles sold in the violating state, all
manufacturers would be allowed to sell vehicles meeting Tier 1
standards and to exclude those vehicles from the NMOG fleet average
beginning in the next model year after the date of the state violation
for at least the two-year lead time set forth in section 177 and the
implementing regulations; then manufacturers would become subject to
the state Section 177 Program only if the manufacturer opted out of
National LEV and its opt-out had become effective, if the manufacturer
decided to comply with the violating state's new Section
[[Page 943]]
177 Program while remaining in National LEV, or if EPA approved the
state's requirements into the SIP. If a manufacturer opted out, before
the opt-out became effective, the manufacturer would continue to be
subject to all National LEV requirements for vehicles sold outside of
the violating state. Once a manufacturer's opt-out had become
effective, for vehicles sold outside of the violating state, the
manufacturer would have to comply with any backstop state Section 177
Programs (except ZEV mandates) that a state had adopted at least two
years before the effective date of opt-out and, in other states, would
have to comply with all applicable federal standards that would apply
in the absence of National LEV. Manufacturers would not have to comply
with any ZEV mandates (except those that were unaffected by National
LEV) until the model year that would start two years after the date EPA
received the manufacturer's opt out. Manufacturers that did not opt out
would continue to be subject to all National LEV requirements for
vehicles sold outside of the violating state and, in the violating
state, would be allowed, under the National LEV regulations, to sell
vehicles meeting Tier 1 tailpipe standards for two years following the
state violation and to exclude those vehicles from the NMOG fleet
average. However, if the violating state reversed the action that broke
its commitment, vehicles sold in the violating state would count
towards the NLEV NMOG fleet average as of the model year named for the
second calendar year after the violating state took the final action
reversing the action that broke its commitment or as of the model year
named for the fourth calendar year following the calendar year in which
the violating state took the final action breaking its commitment,
whichever is later.30 To the extent these provisions would
give a manufacturer less than the two-years lead time set forth in
section 177, the manufacturer would waive that protection by opting
into National LEV and then setting an effective date in its opt-out
notification that was earlier than the two-years lead time would
provide. To the extent these provisions would give a manufacturer more
than the two-years lead time set forth in section 177, by opting into
National LEV the OTC States agree to provide the additional time.
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\30\ For example, if the violating action occurred in 1999 and
the violating state reversed that action in 2000, vehicles sold in
that state would count towards the NLEV NMOG fleet average starting
with MY2003 (the model year named for the fourth calendar year
following the calendar year in which the violating action occurred).
If the violating action occurred in 1999 and was reversed in 2002,
vehicles in that state would count towards the NLEV NMOG fleet
average starting with MY2004 (the model year named for the second
calendar year after which the violating action was reversed).
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2. OTC State Fails to Submit SIP Revision Committing to National LEV
The second way in which an OTC State could violate its commitment
to National LEV would be to fail to submit a SIP revision to EPA
containing the state's regulatory commitment to the program. The
consequences of this violation differ slightly from a situation where a
state does submit such a SIP revision, receives EPA approval for it,
but then violates the commitment by attempting to remove National LEV
as a compliance alternative. Failure to submit a SIP revision would not
necessarily indicate that the state was attempting to impose a
compliance obligation on the manufacturers contrary to the terms of the
fundamental agreement underlying the voluntary National LEV program.
Consequently, if manufacturers did not choose to opt out of National
LEV, they would continue to be subject to all the National LEV
requirements for vehicles sold both within and outside of the violating
state, and the National LEV program would continue. However, the
portion of the OTC State commitments to be contained in the SIP
revisions is critical to the long-term enforceability of the state
commitments, so EPA believes it is important to allow the manufacturers
to opt out of National LEV if a state fails to submit a SIP revision.
This will provide incentive for OTC States to submit their National LEV
SIP revisions and provide manufacturers recourse in the event of a
state failure to do so. This offramp is addressed in 40 CFR 86.1707(f).
As under the previous scenario, there would be no time limit for
manufacturers to exercise their right to opt out of National LEV if an
OTC State had missed the deadline for its National LEV SIP revision and
had not yet submitted such a SIP revision. Once the state submitted its
SIP revision, even if after the deadline, manufacturers would no longer
have the opportunity to decide to opt out of National LEV. Unlike the
previous scenario, a state that had missed the deadline for its SIP
submission would have a limited opportunity to cure the violation. For
the first six months from the deadline for the SIP submission,
manufacturers would only be able to opt out conditioned on the state
not submitting a SIP revision within six months of the initial
deadline. If the state submitted the revision within that six-month
grace period, any opt-outs based on that violation would be invalidated
and would not come into effect.
The manufacturers commented that the National LEV regulations
should not provide a six-month grace period for states to submit their
SIP revisions beyond the one-year (or for a few states, eighteen-month)
period provided for the SIP submissions because the deadline provides
states adequate time to submit their SIP revisions. EPA believes this
limited opportunity to cure is appropriate here. While the timeframes
provided for the OTC States to submit their SIP revisions are feasible,
they are very tight and do not give much leeway for delays that may
occur in the state regulatory processes. Moreover, the MOUs initialed
by the OTC and the manufacturers' associations provided that OTC States
would have two years to submit their SIP revisions committing to
National LEV. Even if they needed to take advantage of the grace
period, the deadline for most of the OTC States to submit their SIP
revisions to EPA would still be sooner than provided under the
initialed MOUs and no state would have a deadline any later than the
MOUs provided. In light of this, together with the fact that failure to
submit this SIP revision would not pose the risk of any immediate
change in the manufacturers' compliance obligations, it is reasonable
to provide a limited grace period for OTC States to submit their SIP
revisions without jeopardizing the benefits of the National LEV
program.
After the six-month grace period, the state's submission of a SIP
revision would not negate a manufacturer's opt-out that EPA had already
received, even if the manufacturer's opt-out had not yet become
effective. However, no manufacturer would be able to opt out after the
state submitted the SIP revision, no matter how late the state was. As
under the previous scenario, whether or not an OTC State has failed to
submit a SIP revision by a given date and thereby provided a basis for
an opt-out is a very clear cut issue. Consequently, EPA is not
providing for an EPA determination of the validity of an opt-out based
on this violation.
If a manufacturer opts out it may set the effective date of its
opt-out no earlier than MY2000 (or MY2001 if the violating state is the
District of Columbia, New Hampshire, Delaware or Virginia) or the next
model year after EPA's receipt of the opt-out, whichever is
later.31 If a manufacturer opts out of
[[Page 944]]
National LEV, in the violating state, the National LEV regulations
would allow the manufacturer to meet Tier 1 tailpipe standards and
would not require those vehicles to be included in the fleet average
NMOG calculations. These special provisions for vehicles sold in the
violating state generally would start with the next model year after
EPA receives the manufacturer's opt-out notification (e.g., MY2000 for
a manufacturer that opts out in calendar year 1999) and continue until
the effective date set in the opt-out notice.32 As under the
scenario above, the violating state would not receive SIP credits for
emissions reductions from vehicles meeting anything more stringent than
the Tier 1 tailpipe standards while those standards apply. Once the
manufacturer's opt-out had become effective, the manufacturer would be
subject to a Section 177 Program in the violating state if the two-year
lead time requirement of section 177 had been met.
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\31\ If, however, an OTC State took a legitimate offramp as
discussed below, a manufacturer could not use a delayed effective
date of opt out to continue to comply with National LEV in a state
that had opted out after the state opt-out became effective. As
discussed below in section VI.D an OTC State legitimately opting out
of National LEV is required to provide manufacturers at least two-
years lead time.
\32\ However, these special provisions would start no earlier
than MY2001 if the District of Columbia, New Hampshire, Delaware or
Virginia were the violating state and no earlier than MY2000 if
another OTC State were the violating state.
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If a manufacturer opted out of National LEV, in non-violating
states it would continue to meet all National LEV requirements until
the effective date of its opt out. For vehicles sold in the
nonviolating states, once the opt-out became effective the manufacturer
would be subject to any backstop Section 177 Programs for which the
two-year lead time requirement of section 177 had been met (running
from the date the state adopted the backstop program), or would be
subject to Tier 1 requirements in states without such programs.
Manufacturers would not have to comply with any ZEV mandates (except
those that were unaffected by National LEV) until the model year that
would start two years after the date EPA received the manufacturer's
opt-out notification. To the extent that these regulations would
provide a manufacturer with less than the two-year lead time set forth
in section 177, the manufacturer waives that protection by opting into
National LEV and then setting an effective date in its opt-out
notification. To the extent that these provisions would provide
manufacturers more than the two-years lead time set forth in Section
177, by opting into National LEV the OTC States agree to provide the
additional time.
3. OTC State Submits Inadequate SIP Revision Committing to National LEV
A third way in which an OTC State could violate its commitment to
National LEV would be to submit a SIP revision that did not meet the
requirements for a National LEV SIP revision, and thus did not
adequately commit the state to the National LEV program. Today's rule,
40 CFR 86.1707(g), maintains the principle EPA had proposed,
specifically that a violation of this commitment would allow
manufacturers to opt out. However, today's rule takes a somewhat
different approach towards when a manufacturer could opt out based on
an inadequate SIP revision.
EPA proposed that manufacturers would be able to opt out if EPA
disapproved a National LEV SIP revision, and either the state failed to
submit a corrected SIP revision within one year of EPA's disapproval,
or the state submitted a modified SIP revision and EPA subsequently
disapproved the revision. Under the proposal, the date of the violation
that would allow a manufacturer to opt out of National LEV would be
either the state's failure to submit a National LEV SIP revision
committing to National LEV within one year of EPA's disapproval of its
initial SIP revision, or publication of EPA's second disapproval. EPA
also considered and took comment on several alternative approaches.
The auto manufacturers' comments supported their right to opt out
if an OTC State were to submit an inadequate National LEV SIP
submission, but opposed the proposed process and timing for using such
an offramp. The manufacturers believe that the proposal did not provide
them a real opportunity to opt out in a timely fashion if a SIP
submission did not adequately commit an OTC State to National LEV. The
manufacturers calculated that EPA's proposal might not allow them to
opt out until MY2004 if a state submitted an inadequate SIP. Given the
expected duration of National LEV, the autos felt this effectively
prevented them from opting out if a state were to fail to submit an
adequate SIP revision.
The SIP revisions are a critical component of the OTC States'
commitments to National LEV. The auto manufacturers should have a right
to opt out of the program if an OTC State that has opted into National
LEV does not follow through on its commitment. EPA agrees with the
manufacturers that the proposal did not provide them an adequate or
realistic opportunity to ensure that OTC States submitted adequate SIP
revisions. Thus, the FRM takes a slightly different approach than EPA
proposed.
Today's rule allows manufacturers to opt out of National LEV if an
OTC State has not submitted an adequate SIP revision and either EPA has
taken final action on the state's submission finding that it did not
meet the requirements for a National LEV SIP revision or at least 12
months has passed since the state submitted its National LEV SIP
submission to EPA and EPA has not approved it as meeting the
requirements for a National LEV SIP revision. By prohibiting
manufacturers from opting out until after EPA has had one year to take
action on a SIP submission, the FRM respects EPA's role in evaluating
and approving SIPS, as delegated by Congress under section 110(k) of
the Act. By allowing manufacturers to opt out immediately if EPA
disapproves a SIP submission or if EPA fails to act within one year of
receiving the submission, it gives manufacturers a real opportunity to
opt out in a timely fashion if a SIP submission is inadequate. This
should provide additional incentive for OTC States to send in
submissions that meet the requirements for adequate National LEV SIP
revisions and thereby increase the stability of the program.
As with the other types of state violations, there is no deadline
for manufacturers to opt out based on this offramp. Also, there would
be no opportunity for an OTC State to cure the violation with respect
to a manufacturer that had already opted out, although manufacturers
that had not opted out could no longer do so once EPA had taken final
action finding the State's submission met all the requirements for a
National SIP revision. The action allowing opt out is very clear, and
hence the regulations do not provide for an EPA determination of the
validity of an opt-out based on this type of violation.
Again consistent with the previous scenarios, if a manufacturer
opts out it may set the effective date of its opt-out as early as the
next model year or any model year thereafter.\33\ Manufacturers'
obligations under National LEV and state Section 177 Programs would be
identical to those described if a state failed to submit a SIP
revision.
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\33\ If, however, an OTC State took a legitimate offramp as
discussed below, a manufacturer could not use a delayed effective
date of opt out to continue to comply with National LEV in a state
that had opted out after the state opt-out became effective. As
discussed below in section VI.D an OTC State legitimately opting out
of National LEV is required to provide manufacturers at least two
years lead time.
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[[Page 945]]
4. OTC State Without an Existing ZEV Mandate Adopts a Backstop ZEV
Mandate
OTC States without ZEV mandates will also state in their opt-ins
that they do not intend to adopt a ZEV mandate that would be effective
during the state's commitment to National LEV. EPA took comment on
whether auto manufacturers should be able to opt out if an OTC State
without an existing ZEV mandate acted contrary to its stated intent and
adopted a backstop ZEV mandate (i.e., a ZEV mandate that allows
National LEV as a compliance alternative) with an effective date during
the state's commitment to National LEV.\34\ Today's final rule, 40 CFR
86.1707(h), provides such an offramp for manufacturers. EPA believes
this is appropriate given the differing positions of the manufacturers
(who wanted the OTC States to agree that they would not adopt a ZEV
mandate) and the OTC States (who were willing to state their current
intent not to adopt a ZEV mandate). It is also appropriate given that
the OTC States without existing ZEV mandates have little incentive to
adopt backstop ZEV mandates since they have agreed that a manufacturer
would not have to comply with a backstop ZEV mandate until the later of
the end of the OTC State's commitment to National LEV (MY2006 or
MY2004, depending upon EPA's issuance of Tier 2 standards) or two years
after either the manufacturer or the OTC State opts out of National
LEV.
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\34\ If an OTC State without an existing ZEV mandate adopts a
ZEV mandate that does not allow National LEV as a compliance
alternative, the opt-out provisions discussed in Section VI.A.1
above apply.
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Sec. 86.1707(h) allows manufacturers 35 to opt out of
National LEV if an OTC State without an existing ZEV mandate takes
final action adopting a backstop ZEV mandate that would become
effective during the state's commitment to National LEV. This offramp
does not allow manufacturers to opt out if a state adopts a ZEV mandate
that could not come into effect until the end of the state's commitment
(i.e., until MY2006 or MY2004, depending on EPA's issuance of Tier 2
standards). Adoption of a backstop ZEV mandate would not impose an
immediate compliance obligation on auto manufacturers, so EPA has
structured the offramp and its consequences to be similar to those for
an OTC State's failure to submit its National LEV SIP revision on time.
Consequently, if manufacturers did not choose to opt out of National
LEV, they would continue to be subject to all the National LEV
requirements for vehicles sold both within and outside of the violating
state, and the National LEV program would continue.
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\35\ Only those manufacturers that are large enough that they
would be subject to the ZEV mandate if it comes into effect could
opt out based on an OTC State's adoption of a ZEV mandate.
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As for other offramps based on OTC State actions, there would be no
time limit for manufacturers to exercise their right to opt out of
National LEV if an OTC State without an existing ZEV mandate adopted a
backstop ZEV mandate. Final action reversing the violating state's
adoption of a backstop ZEV mandate would not negate a manufacturer's
opt-out that EPA had already received, even if the manufacturer's opt-
out had not yet become effective. However, if the violating state were
to take final action reversing itself and deleting the backstop ZEV
mandate, no manufacturer would be able to opt out after such final
action. ``Final action'' shall have the same meaning here as discussed
above in Section VI.A.1. EPA is not providing for an EPA determination
of the validity of an opt-out under this provision because it should be
very clear cut whether an OTC State has adopted a backstop ZEV mandate.
If a manufacturer opts out, it may set the effective date of its
opt-out as early as the next model year after EPA's receipt of the opt-
out notification.36 If a manufacturer opts out of National
LEV, in the violating state, the National LEV regulations would allow
the manufacturer to meet Tier 1 tailpipe standards and would not
require those vehicles to be included in the fleet average NMOG
calculations. These special provisions for vehicles sold in the
violating state would start with the next model year after EPA receives
the manufacturer's opt-out (e.g., MY2000 for a manufacturer that opts
out in calendar year 1999) and continue until the effective date set in
the opt-out notice. As under the scenario above, the violating state
would not receive SIP credits for emissions reductions from vehicles
meeting anything more stringent than the Tier 1 tailpipe standards
while those standards apply. Once the manufacturer's opt-out had become
effective, the manufacturer would be subject to a Section 177 Program
in the violating state if the two-year lead time requirement of section
177 had been met.
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\36\ If, however, an OTC State took a legitimate offramp as
discussed below, a manufacturer could not use a delayed effective
date of opt out to continue to comply with National LEV in a state
that had opted out after the state opt-out became effective. As
discussed below in section VI.D an OTC State legitimately opting out
of National LEV is required to provide manufacturers at least two
years of lead time.
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If a manufacturer opted out of National LEV, in non-violating
states it would continue to meet all National LEV requirements until
the effective date of its opt out. For vehicles sold in the
nonviolating states, once the opt-out became effective the manufacturer
would be subject to any backstop Section 177 Programs for which the
two-year lead time requirement of section 177 had been met (running
from the date the state adopted the backstop program), or would be
subject to Tier 1 requirements in states without such programs.
Manufacturers would not have to comply with any ZEV mandates (except
those that were unaffected by National LEV) until the model year that
would start two years after the date EPA received the manufacturer's
opt-out notification. To the extent that these regulations would
provide a manufacturer with less than the two-year lead time set forth
in section 177, the manufacturer waives that protection by opting into
National LEV and then setting an effective date in its opt-out
notification. To the extent that these provisions would give
manufacturers more than the two-years lead time set forth in section
177, by opting into National LEV the OTC States agree to provide the
additional time.
B. Offramp for Manufacturers if OTC State or Manufacturer Legitimately
Opts Out of National LEV
Following the general principle that parties should be able to exit
National LEV if there is a significant change in the assumptions that
underlay their decision to opt in initially, 40 CFR 86.1707(j)
finalizes EPA's proposal that a manufacturer also could opt out if an
OTC State or another manufacturer were to opt out of National LEV
legitimately.37 This offramp could be used within 30 days of
EPA's receipt of an OTC State or a manufacturer opt-out. The
manufacturer could set an effective date for its opt-out beginning the
next model year after the date of the manufacturer's opt-out, or any
model year thereafter. EPA would not determine the validity of opt-out
under this offramp unless EPA is to determine the validity of the
initial opt-out.
[[Page 946]]
Manufacturers' obligations under National LEV and state Section 177
Programs would be identical to those described if a state failed to
submit a SIP revision, except that no state would be a violating state.
EPA received no comments on this provision.
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\37\ The validity of any opt-out from National LEV would depend
in part on whether the underlying condition allowing opt out has
actually occurred. Where the initial OTC State or manufacturer's
opt-out was invalid, it would not provide an offramp for another
manufacturer to opt out of National LEV. Thus, throughout this
notice when EPA refers to an initial opt-out as the condition that
allows another opt-out, it refers only to valid initial opt-outs.
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C. Offramp for Manufacturers for EPA Failure to Consider In-Use Fuel
Issues
Believing that the effects of fuel sulfur were not adequately
addressed by EPA in the National LEV program, the auto manufacturers
recommended in June, 1997, that National LEV should include an offramp
for manufacturers related to in-use fuels issues and that they should
be allowed to exit the National LEV program if EPA were to act (or fail
to act) in a specified manner to resolve specific sulfur-related
issues. Such an offramp would alleviate their concern that the sulfur
levels of in-use fuels outside California may affect the on-board
diagnostic (OBD) systems and tailpipe emissions of National LEV
vehicles. The manufacturers outlined six different conditions related
to EPA actions (or lack of action) on these issues that they believe
should allow them to opt out of National LEV. In the SNPRM, EPA
proposed an additional offramp that took into account three of the six
conditions advanced by manufacturers and rejected the remaining three.
(A complete discussion of these six conditions and EPA's rationale for
selecting only three can be found in the SNPRM, 62 FR at 44768-44771.)
The proposed offramp was structured such that manufacturers could opt
out of National LEV only if EPA failed to consider certain vehicle
modifications, on-board diagnostic control systems, or preconditioning
of vehicles when requested to do so by a manufacturer as a result of an
alleged effect of fuel with high sulfur levels. Today's final rule
incorporates this offramp as it was proposed.
EPA recognizes that this remains an important issue for the
manufacturers and other interested parties, and 40 CFR 86.1707(i) sets
forth a process to allow potential problems related to potential fuel
sulfur effects on emissions performance of National LEV vehicles to be
addressed within the context of National LEV as more information
becomes available. These problems will be addressed on a case-by-case
basis. EPA will respond to a manufacturer's request, supported by data,
for appropriate relief for a specific engine family or families
adversely affected by sulfur in a manner covered by one of the
conditions incorporated into the National LEV regulations for the fuel
sulfur offramp.
EPA also recognizes that the effects of sulfur on emission control
systems is an issue that raises concerns beyond the context of the
National LEV program and is being addressed in numerous other actions.
These include testing being done to support EPA's Tier 2 Study and the
Ozone Transport Assessment Group's recommendation to EPA to explore
reducing fuel sulfur levels. EPA is working with the various
stakeholders in developing and analyzing data to quantify any sulfur
effects on current and future technology vehicles. EPA has said that in
appropriate instances, EPA will address sulfur effects on specific
mobile source programs. In March, 1997, EPA released a paper entitled
``OBD & Sulfur White Paper: Sulfur's Effect on the OBD Catalyst Monitor
on Low Emission Vehicles.'' This paper summarized the sulfur concerns
and the available data, and outlined EPA's approach to resolving OBD/
sulfur issues on a case-by-case basis.38 The fundamental
suggested approach of addressing these issues on a case-by-case basis
remains EPA's expected approach. The offramp related to fuel sulfur
effects in today's final rule is entirely consistent with the approach
outlined in EPA's revised paper.
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\38\ OBD and Sulfur White Paper, March 1997 (Docket A-95-26, IV-
B-06). This paper has been revised to address comments EPA received
on the March, 1997 paper. A copy is included in the docket for this
rule (A-95-26, VII-J-02).
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Today's final rule contains a fuel sulfur offramp identical to that
proposed in the SNPRM. This offramp could be triggered under the three
following conditions:
(1) If, upon a written request from a manufacturer in relation to
the certification of an OBD catalyst monitor system, EPA declines to
consider the use of the system because it indicates sulfur-induced
passes when exposed to high-sulfur gasoline, even though it functions
properly on low-sulfur gasoline.
(2) If, upon a written request from a manufacturer, EPA declines to
consider, on a case-by-case basis, the manufacturer's suggested
modifications to vehicles that exhibit sulfur-induced malfunction
indicator light (MIL) illuminations due to high-sulfur gasoline so as
to eliminate the sulfur-induced MIL.
(3) If, upon a written request from a manufacturer, EPA declines to
consider, on a case-by-case basis, prior to in-use testing, pre-
conditioning procedures designed solely to remove the effects of high
sulfur from currently available gasoline.
EPA has defined a process for manufacturers to opt out of National
LEV if one of the conditions described above were to occur. A
manufacturer must send a request to EPA in writing identifying the
particular problem at issue, demonstrating that it is due to in-use
fuel sulfur levels, requesting that EPA consider taking a specified
action in response, and demonstrating the emissions impact of the
requested change. For some changes, engineering judgement may be
sufficient to demonstrate the emissions impact. The Agency would have
60 days to respond to the manufacturer's request in writing, stating
the Agency's decision and explaining the basis for the decision. If EPA
were to fail to respond in this manner in the timeframe allotted,
manufacturers would have 180 days after the deadline for the EPA
response to decide to opt out of National LEV. Once EPA responds to the
manufacturer's request, even if after the 60-day deadline, a
manufacturer that had not yet opted out based on this offramp would no
longer be able to do so, although if EPA had already received a
manufacturer's opt-out, that opt-out would be unaffected by EPA's
subsequent response. Only the manufacturer that sent the initial
request to EPA would be able to opt out if EPA failed to respond.
Consistent with opt-outs based on other offramps, a manufacturer
that opts out based on this offramp must continue to comply with
National LEV until the opt-out becomes effective. The manufacturer may
set the effective date of its opt-out as early as the next model year
or any model year thereafter.39 After the effective date of
its opt-out, the manufacturer would be subject to any backstop Section
177 Programs (except for ZEV mandates) provided that at least two-years
lead time (as provided in section 177) had passed since the adoption of
the state's Section 177 Program, or would be subject to Tier 1
requirements in states without such backstops. Other than those ZEV
mandates that would be unaffected by the National LEV rogram (i.e.,
existing ZEV mandates), if a manufacturer opts out, it would not be
subject to any other ZEV mandates until two years of lead time has
passed, which would run from the date the manufacturer opts out of
National LEV and would be measured according to the section 177
implementing regulations.
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\39\ The next model year would be the model year named for
calendar year after which EPA received the opt-out notification.
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Several commenters highlighted this offramp as an area of some
concern.
[[Page 947]]
These comments and EPA's responses are detailed in the Response to
Comments document. In general, the auto manufacturers felt that the
proposed offramp did not go far enough to protect their interests. They
would have preferred that the regulations allow a manufacturer to opt
out if EPA did not approve the manufacturer's suggested solution to an
alleged problem if the manufacturer felt corrective action was
justified. EPA's proposed (and final) regulations instead require EPA
to consider allowing corrective action based on a request from a
manufacturer accompanied by a persuasive demonstration that a problem
does indeed exist. EPA believes that following the manufacturers'
approach would destabilize the program by putting EPA in what could be
an untenable position of either giving a manufacturer the ability to
opt out or allowing the manufacturer to dictate a substantive outcome
which EPA did not believe was warranted.
Several state government commenters saw the addition of this
offramp as a new issue that had not arisen in prior discussions and
that had potentially destabilizing impacts on the National LEV program.
The American Petroleum Institute likewise commented that it did not
support this offramp. Contrary to some commenters' concerns, this
offramp cannot be used by the manufacturers to dictate a particular
result, nor does it destabilize the National LEV program. The offramp
makes it clear that EPA intends to follow through on its commitment in
the OBD & Sulfur Status Report to look at potential fuel sulfur effects
on a case-by-case basis. The offramp does not expand whatever right to
substantive judicial review a manufacturer would otherwise have of an
EPA decision related to potential fuel sulfur effects. Rather, to avoid
providing manufacturers an opportunity to opt out of the program, this
offramp requires EPA to provide a written response to a manufacturers'
request. Some commenters expressed the concern that this offramp would
require EPA to act in the absence of necessary information. EPA does
not read the provision that way. Rather, if a manufacturer submits
insufficient information (perhaps by failing to characterize the
potential fuel sulfur effect adequately or to provide adequate
information regarding the effects of the requested change), EPA could
deny the request or ask the manufacturer to submit additional
information without triggering an offramp, provided that EPA explained
its response in writing. EPA does not believe the fuel sulfur offramp
destabilizes the National LEV program given that it sets up a process
rather than requiring a substantive result and given that EPA does not
foresee any problem complying with the process.
D. Offramps for OTC States
In light of the practically and legally binding commitments that
the OTC States would make to the National LEV program, this Final Rule
also identifies the limited circumstances under which the OTC States
would no longer be bound by those commitments. There are two
circumstances in which an OTC State could opt out of National LEV: (1)
if a manufacturer were to opt out of National LEV; or (2) if, based on
a periodic equivalency determination, EPA were to find that certain
circumstances had changed that would have changed EPA's initial
determination that National LEV would produce emissions reductions
equivalent to OTC State Section 177 Programs. The first offramp, found
in 40 CFR 86.1707(e) through (j), is being finalized as proposed. The
second offramp, found in 40 CFR 86.1707(k), has been modified somewhat
from the proposal, as described below in more detail. If an OTC State
were to take an identified legitimate offramp from National LEV, it
would no longer be bound by any commitments that it made to the program
in its initial opt-in package, other than its commitment to follow the
National LEV regulations to transition from National LEV to a state
Section 177 Program. An OTC State that was already in violation of its
National LEV commitments would not be able legitimately to opt out of
National LEV based on a manufacturer's opt-out.
To opt out of National LEV, the state official that signed the
commissioner's letter in that state would send EPA an opt-out
notification letter. The letter would state that the OTC State was
opting out of National LEV and specify the condition allowing the state
to opt out. The date of the state opt-out would be the date that EPA
received the opt-out letter, but there would be a two-year transition
period before the state opt-out would become effective and the state
could require compliance with a Section 177 Program or ZEV mandate (in
a state without an existing ZEV mandate) without allowing National LEV
as a compliance alternative. Whether an opt-out letter alone would
itself remove National LEV as a compliance alternative as of the
effective date of the opt-out depends on how the state regulations are
written. In opting into National LEV the state could structure its
regulations and SIP to provide that National LEV would not be an
alternative to the state's Section 177 Program if the state had opted
out of National LEV pursuant to the National LEV regulations and the
opt-out had become effective.
1. Manufacturer Opt-Out
As proposed, an OTC State would be able to opt out of National LEV
without violating its commitment if a manufacturer opted out of
National LEV under one of the identified offramps for
manufacturers.40 All parties would have made the choice to
opt into National LEV with an understanding about the manufacturers and
states that would be subject to the program. If those fundamental
assumptions were to change, the parties to the voluntary program should
have the opportunity to reevaluate their commitments and choose to opt
out. Some OTC States have indicated, for example, that they believe it
would not be feasible in their states to have some manufacturers
subject to National LEV while others that had opted out of National LEV
were subject to Section 177 Program requirements.
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\40\ The condition allowing an OTC State to opt out would only
arise if the initial manufacturers' opt-out were valid. See n. 37.
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If a manufacturer opted out, OTC States would have a three-month
period to submit an opt-out letter. The start of the three-month period
would depend on the reason the manufacturer opted out. If a
manufacturer were to opt out because of state action or inaction, or
because of EPA's failure to consider a manufacturer's request related
to effects of in-use fuels, the three-month period would start on the
date EPA received the manufacturer's opt-out notification.41
For a manufacturer's opt-out based on a change to a Stable Standard,
the three-month period would start on the date of EPA's finding that
the opt-out was valid or the date of a final judicial ruling that a
disputed opt-out was valid. If a state did not opt out within that
three-month period, the opportunity to opt out based on that
manufacturer action would no longer be available.
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\41\ However, if a manufacturer were to opt out because a state
failed to submit a SIP revision by the applicable deadline and the
manufacturer submitted the opt-out notification within six months of
the applicable deadline for the SIP revision, the manufacturer's
opt-out would not be final until the end of that six-month period.
That date (not the date of the manufacturer's opt-out) would start
the three-month period for state opt out.
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The state opt-out could not become effective until the state had
provided manufacturers with the two-year lead time set forth in section
177, with the two-year lead time to start on the date
[[Page 948]]
that EPA received that state's opt-out letter. Manufacturers commented
that for manufacturers that had not opted out of National LEV, states
that have opted out should provide four, rather than two, years of lead
time. As discussed above in section VI.A.1, section 177 does not
require states to provide manufacturers four years of lead time from
the date that manufacturers are notified that the state will no longer
accept National LEV as a compliance alternative to a state Section 177
Program. Several commenters opposed providing four years of lead time
under any circumstances and agreed that section 177 does not provide
such lead time. Moreover, the MOUs initialled by the OTC and the
manufacturers' associations provided only two model years of lead time
before a state election to no longer be bound by its obligations under
the MOU would become effective. Thus, EPA believes it is appropriate to
finalize the proposed approach, which provides for two years of lead
time before a state opt-out becomes effective.
Until the OTC State's opt-out became effective, manufacturers that
had not opted out of National LEV or whose opt-outs had not yet become
effective would continue to be subject to all the National LEV
requirements for vehicles sold in that state. Manufacturers whose opt-
outs had already become effective would not be affected by the state
opt-out. Once the state opt-out became effective, all manufacturers
would be subject to the state's Section 177 Program, if it had been
adopted at least two years previously.42 As the existence of
a manufacturer opt-out as the basis for the state opt-out is a simple
factual determination, the rule does not provide for EPA to evaluate
the validity of a state opt-out before it could become effective.
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\42\ This is true even for a manufacturer that had opted out and
set an effective date for its opt-out that was later than the
effective date of the state's opt-out.
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2. Periodic Equivalency Determination
EPA had proposed that an OTC State could opt out of National LEV if
EPA were to change a Stable Standard in a way that made National LEV
less stringent and, if the change had been known at the start of
National LEV, it would have changed EPA's initial determination that
National LEV would produce emissions reductions at least equivalent to
the adopted OTC State Section 177 Programs. In today's Final Rule, EPA
is departing somewhat from the proposal. Today's rule is very similar
to the proposal regarding how subsequent equivalency determinations
would be made, but takes a different approach regarding when they would
be made. Today's rule allows an OTC State to request an equivalency
determination at any time during the state's commitment to National
LEV, rather than limiting states' ability to request such a
determination to those times when EPA changes a Stable Standard. This
offramp for OTC States is comparable to the manufacturers' offramp if
EPA makes certain types of changes to Stable Standards that make the
Standards more stringent.
In section IV above, EPA discussed its determination that National
LEV would produce equivalent or greater emissions reductions than the
alternative of adopted OTC State Section 177 Programs. In the modeling,
EPA assumed that, in the absence of National LEV, Section 177 Programs
would be in place in those OTC States that currently have adopted such
programs (including backstop programs) and that, in all other states
(except California) Tier 1 standards would apply through MY2004 and
Tier 2 standards equivalent to National LEV would apply thereafter.
Today's rule allows an OTC State that is in the National LEV program to
request EPA to reevaluate whether National LEV is still equivalent to
the alternative approach of OTC State Section 177 Programs. Within six
months of receiving the request, EPA is to conduct such a
determination.
As proposed, in reevaluating equivalency, EPA would use the same
model and inputs as it used in the initial equivalency
determination.43 EPA would modify the modeling only to
reflect (1) the effect of changes in EPA regulations governing new
motor vehicles and implementation of such regulations (to the extent
implementation is reflected in the model), and (2) the effect of having
Section 177 Programs (identical in stringency to the Section 177
Programs modeled in the initial equivalency determination) in any
additional OTC States that had adopted section 177 backstop programs
after the initial equivalency determination. In reevaluating
equivalency, EPA believes that the focus of the evaluation should be
the ongoing validity of the initial decision to opt into National LEV,
not whether the parties would make the same decision at the time of the
reevaluation based on then-current conditions. This is consistent with
the approach that the parties took to the periodic equivalency
evaluation in the initialed MOUs. At the time of their opt-ins, the
parties should not have anticipated that EPA would change its new motor
vehicle regulations in a way that would affect one of the basic
assumptions used to calculate the relative benefits of National LEV and
the alternative of OTC State Section 177 Programs. Thus, it is
appropriate to reevaluate the equivalency of the two approaches given
such a change, and provide the OTC States an opportunity to opt out of
National LEV if it is no longer equivalent to the alternative.
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\43\ Modeling assumptions that would remain unchanged from those
used in the initial equivalency determination include: assumptions
related to vehicle miles traveled, MOBILE5a model inputs, inspection
and maintenance programs, reformulated gasoline, and permanent
migration effects.
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As proposed, the FRM provides that any equivalency reevaluation
will include the effect of Section 177 Programs in any additional OTC
States that adopt Section 177 Programs after the initial equivalency
determination. This represents a compromise between the OTC States' and
manufacturers' positions. In making the initial equivalency
determination, EPA is comparing National LEV to the alternative of OTC
State Section 177 Programs. See section IV. As discussed above, EPA's
determination assumes that Section 177 Program requirements would apply
in those OTC States that currently have the programs (including
backstop programs) in their state law or regulations and that mandatory
federal standards would apply in the other OTC States. The OTC States
requested that EPA take a somewhat different approach to the initial
equivalency determination by assuming that Section 177 Programs would
also apply in particular OTC States that are currently in the process
of developing such regulations. For the initial determination, such a
change in the assumption about which OTC States have LEV programs would
have no effect on EPA's finding that National LEV would produce
emissions reductions at least equivalent to those that would be
produced by the alternative. EPA performed a sensitivity analysis for
the initial equivalency determination to analyze the effects of the
most optimistic assumptions regarding adoption of Section 177 Programs
by OTC States, which indicated that even with those assumptions
National LEV would still produce emissions reductions equivalent to or
greater than that alternative. However, given the OTC States' concern,
EPA believes it would be appropriate to modify the inputs to any
reevaluation to reflect the then-current reality in terms of which OTC
States had actually adopted Section 177 Programs. The modeling would
[[Page 949]]
continue to assume that all states with Section 177 Programs would have
the same requirements used in the initial equivalency modeling, as
discussed above. Thus, the reevaluation would not reflect any changes
in the states' legal authority under the CAA to adopt programs
subsequent to their decision to opt into National LEV, but it would
take into account subsequent actions taken by the OTC States based on
legal authority they had at the time of the decision.
EPA does not believe it would be appropriate to include in the
reevaluation of equivalency the effects of other changes in
circumstances affecting emissions reductions under National LEV or the
alternative, such as changes to California's LEV program. At the time
of opt-in, all of the parties will be aware that circumstances might
change over the period that National LEV is in effect. For example,
California might modify its requirements during that time. In making
the decision to opt into National LEV and choose it over the
alternative for a given period of time, the parties will have to
evaluate the likelihood that any of the relevant circumstances would
change sufficiently to reverse their inclination to opt in. Thus, the
OTC States will have to consider the likelihood that California would
modify its CAL LEV requirements and the likely effect of such a
modification, and decide whether to commit to National LEV in lieu of a
state Section 177 Program that could include any subsequent changes to
CAL LEV. By opting in, the OTC States will have made the decision that
the possibility of those benefits is outweighed by the certainty of the
benefits from National LEV (if it goes into effect). The reevaluation
of equivalency should not allow parties to reconsider that initial
choice with the benefit of hindsight. National LEV will only come into
effect if the parties to the program commit to it for a specified
duration, and an EPA change to the underlying standards should not
become an opportunity to undermine that basic commitment.
Several commenters disagreed with this approach, arguing that any
changes California makes to its LEV program should be reflected in any
future equivalency determinations, particularly since California is
contemplating tightening its LEV program. EPA believes that states
should take the possibility of future changes to the California LEV
program into account in deciding whether to opt in. As noted above,
given the uncertainties regarding changes to California's program and
the much greater benefits of National LEV as compared to OTC State
Section 177 Programs (based on the current CAL LEV program), EPA
believes it is reasonable and prudent for states to commit to keep
National LEV as a compliance alternative until MY2006. EPA recognizes
that this raises the possibility that OTC States might be foregoing
enforcement of a tighter California LEV program for a year or two.
However, for practical or legal reasons, states often have to make
regulatory choices without complete information and taking one
regulatory approach often precludes changing course in midstream even
if it turns out that another approach might have been better.
Although today's rule generally adopts the approach to periodic
equivalency findings contained in the MOUs initialed by the OTC and the
auto manufacturers' trade associations, it does differ in one respect.
Whereas the MOUs provided for such findings every three years and upon
an OTC State's request, today's rule provides for such findings only
upon the request of an OTC State that is participating in National LEV.
There might not be a need for an equivalency finding every three years.
If there is a need, an OTC State can request one.
If EPA were to find that National LEV was not equivalent to OTC
State Section 177 Programs, under today's rule, the OTC States would
have three months to opt out, running from the date that EPA found that
National LEV would no longer produce emissions reductions equivalent to
those that would be produced by OTC State Section 177 Programs. If a
state did not opt out within that three month period, the opportunity
to opt out based on that finding would no longer be available.
Also consistent with the other state offramp, a state opt-out based
on a finding of inequivalency could not become effective for model
years (as defined in Subpart X) that commence prior to the date two
years after the date that EPA received the state's opt-out letter. If a
state took this offramp, the manufacturers' obligations would be
determined the same way as described in the preceding section (when an
OTC State opts out because a manufacturer opted out).
E. Lead Time Under Section 177
Sec. 86.1707's provisions discussed above incorporate and rely on
EPA's interpretation of section 177's requirements related to state
adoption of the CAL LEV program. Section 177 of the Act provides the
legal authority for states to adopt ``standards relating to the control
of emissions from new motor vehicles'' and governs the timing of
implementation of such requirements. It provides that a state may adopt
new motor vehicle standards only if they are identical to California
standards for a given model year for which EPA has granted a waiver,
and the state must ``adopt such standards at least two years before
commencement of such model year (as determined by regulation of the
Administrator).'' EPA has previously adopted regulations interpreting
this provision. See 40 CFR 85.2301 et seq. These regulations do not
adequately address the issue of when the two-year lead time starts for
backstop Section 177 Programs (i.e., a Section 177 Program that allows
National LEV as a compliance alternative) after National LEV has come
into effect.
Today's final regulations address the issue of when under section
177 and EPA's implementing regulations the two-year lead time period
would start if, after National LEV came into effect, a state with a
backstop Section 177 Program were to delete National LEV as a
compliance alternative (either in violation of its commitment to
National LEV or legitimately by taking an offramp) or if a manufacturer
legitimately decided to opt out of National LEV. These regulations and
EPA's underlying interpretation of section 177 apply only in the
context of the National LEV program, and only in the special
circumstances that arise when a state has a backstop Section 177
Program that allows National LEV as a compliance alternative and
National LEV has gone into effect.
The intent of the two-year lead time provision in section 177 is
obvious in the context of a state deleting National LEV as a compliance
alternative in violation of its commitment. If a state has a Section
177 Program (or a ZEV mandate) that allows National LEV as a compliance
alternative and National LEV is in effect, and then the state changes
those regulations to require compliance with the Section 177 Program or
ZEV mandate (and does so in a way that violates its commitment to
National LEV), then the two-year lead time required by section 177
would start to run when the revised regulations (or other state laws)
were adopted. Although the Section 177 Program (or ZEV mandate) was
previously on the books, it would have been a very different program
because it allowed National LEV as a compliance alternative. Deleting
National LEV as a compliance alternative once National LEV is in effect
is essentially the same as adopting a new Section 177 Program (or ZEV
mandate), and section 177
[[Page 950]]
prohibits states from enforcing a new program without providing at
least two-years lead time.
The meaning of the two-year lead time provision in section 177 is
ambiguous in the context of a backstop Section 177 Program (or ZEV
mandate) where a state legitimately opts out of National LEV. There are
at least three possible ways to approach this provision in this
context. One possible approach is that the two-year lead time period
starts when the state adopts the backstop Section 177 Program (or ZEV
mandate). Under this interpretation, section 177 would require the
state to have adopted its backstop Section 177 Program (or ZEV mandate)
at least two years before the model year to which it applies. After the
two-year lead time had run from the date of adoption, the state could
remove National LEV as a compliance alternative and require immediate
compliance with the Section 177 Program (or ZEV mandate) at any time.
Another possible approach is that, if a manufacturer will need to
comply with a state Section 177 Program after National LEV has come
into effect, the two-year lead time runs from the date that the
manufacturer knew that it would need to comply with the state Section
177 Program rather than with National LEV. Several of the OTC States'
comments strongly supported the first approach, focusing on section
177's use of the word ``adopt.'' In addition, these commenters
expressed concern that the second approach, which EPA proposed, could
set a precedent for other reinterpretations to ``fit unique
circumstances.'' The comments stated that it would be inappropriate to
discourage a state from availing itself of a right granted by Congress,
and they stated that EPA's proposed interpretation is inconsistent with
the CAA and federal district and appellate court decisions.
Nevertheless, EPA does not believe the first approach is a proper
application of section 177 in the National LEV context. The two-year
lead time requirement is intended to give manufacturers time to make
the changes in product planning, production and distribution that are
involved in switching from one motor vehicle program to another. It
recognizes the practical difficulties in making large production shifts
in very short time-frames. Where manufacturers have had the legal
authority to comply with National LEV in lieu of the state program,
allowing states to drop National LEV as a compliance alternative with
no lead time would prevent manufacturers from receiving the protection
that Congress conferred on manufacturers in section 177.44
EPA does not believe it is appropriate to interpret the statute in a
manner that negates the intended purpose of the provision, and hence
does not agree that the alternative interpretation is inconsistent with
either the CAA or the court cases to date that have addressed the
implementation of section 177. In addition, EPA is explicitly stating
that this interpretation is only warranted by and is confined to the
unique circumstances presented by backstop programs under National LEV,
and thus EPA does not believe this interpretation will set a precedent
that could be applied in inappropriate circumstances. Finally, EPA does
not agree that this interpretation discourages a state from exercising
a right provided by Congress. EPA does not believe that Congress
provided a state the right to accept National LEV as a compliance
alternative and then impose a backstop Section 177 Program without
providing any time for the manufacturers to meet the new requirements.
Thus, EPA is not adopting this approach.
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\44\ EPA is rejecting the date of state adoption of regulations
as the starting date for determining whether the section 177 lead
time requirement has been met only in those situations where a state
has adopted a backstop Section 177 Program and National LEV has come
into effect. For those states that already have backstop Section 177
Programs, if National LEV does not come into effect, the date of
adoption of the state regulations is still the controlling date for
determining when the two-year lead time requirement has been met. In
those states, the only legal option available to manufacturers has
been to comply with the state Section 177 Program. The theoretical
possibility that they might not have to comply with the state
requirements does not mean that they have not been given the two-
year lead time required by section 177. EPA did not receive any
comments disagreeing with this application of section 177.
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EPA is therefore adopting the second approach to section 177 under
these limited circumstances. EPA believes this is the most appropriate
way to implement section 177 in this special circumstance, as long as
manufacturers are able to waive the two-year lead time requirement.
Given that the failure to provide statutory lead time renders
noncomplying state programs unenforceable, rather than rendering them
void,45 there should be little question that manufacturers
have the ability to waive the lead time requirement if they choose. The
manufacturers' comments did not question their ability to waive lead
time under section 177. This approach to section 177 (including both
when lead time starts and that manufacturers can waive the lead time)
ensures that, in the context of National LEV and state backstop Section
177 Programs, two of Congress' purposes in adopting section 177 are
met--it protects manufacturers from having insufficient time to switch
from one motor vehicle program to another, and it allows states to
ensure that they can achieve the extra emissions reductions from motor
vehicles contemplated by section 177.
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\45\ See American Automobile Manufacturers Ass'n v. Greenbaum,
No. 93-10799-MA, slip op. at 23, 1993 WL 442946 (D. Mass. Oct. 27,
1993), aff'd., 31 F.3d 18 (1st Cir., 1994).
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However, the OTC States indicated that even if section 177 did not
require the amount of lead time incorporated in the National LEV
regulations, the OTC States were willing to agree to provide that lead
time. Thus, as an alternative legal theory independent of the proper
interpretation or application of section 177, by opting into National
LEV, the OTC States agree to provide manufacturers with the lead time
provided in the National LEV final regulations if a state deletes
National LEV as a compliance alternative (including legitimately opting
out of National LEV) or a manufacturer legitimately opts out of
National LEV.
EPA's interpretation of section 177 is reflected in today's final
regulations 40 CFR 86.1707 regarding what requirements would apply in
the unlikely event that an OTC State were to break its commitment to
National LEV or that a manufacturer or an OTC State were to opt out of
National LEV. For example, if a state with a backstop Section 177
Program were to delete National LEV as a compliance alternative after
National LEV had come into effect, the state would have changed the
manufacturers' regulatory obligations and the manufacturers would be
entitled to two-years lead time running from the date of the state
action purporting to change the manufacturers' regulatory obligation.
By opting into National LEV, manufacturers would not be agreeing to
waive the lead time required under section 177 in a circumstance where
a state broke its commitment to National LEV and deleted National LEV
as a compliance alternative. Thus the manufacturer would get the full
two-years lead time set by section 177.
Another example demonstrates how the waiver provision modifies the
two-year lead time. If an offramp were triggered and a manufacturer
were to decide to opt out of National LEV and then set an effective
date one year from the time of its opt out, under today's regulations,
upon the effective date of the opt out, the manufacturer would be
required to comply with Section 177 Programs (except for backstop ZEV
mandates) in any state that had not broken its commitment to National
LEV. To the extent that this provides the
[[Page 951]]
manufacturer with less than two-years lead time, the manufacturer will
have waived the lead time provision by opting into National LEV
combined with setting the effective date for its opt-out. For backstop
ZEV mandates, however, manufacturers would not have to comply with the
ZEV mandate until the two-year lead time period had passed (which would
start running from the date of the manufacturer's opt-out) because in
opting into National LEV manufacturers are not waiving the two-year
lead time with respect to ZEV mandates. Additionally, by opting in, the
OTC States are agreeing to provide this two-years of lead time
regardless of the applicability of section 177.
A third possible approach to section 177's two-year lead time
requirement provides an alternative basis for today's rule. Under this
approach, the lead time requirement differs depending upon the factual
setting. In some instances, measuring lead time from the date of state
adoption of a backstop Section 177 Program still provides manufacturers
adequate protection and thereby implements both the clear language of
the statute and the clear intent of the provision. For example, in
opting into National LEV, a manufacturer is choosing to accept a
compliance alternative that involves some risk of a rapid change in the
manufacturer's regulatory obligations if the manufacturer opts out.
However, as provided here, the program that the manufacturer is opting
into provides substantial protection for manufacturers with regard to
the applicability of backstop Section 177 Programs upon an opt-out.
Because the manufacturer controls the effective date of the opt-out and
the manufacturer would not be subject to a backstop Section 177 Program
until its opt-out became effective, the manufacturer can ensure that it
does not become subject to a Section 177 Program without whatever lead
time it views as adequate. In this situation, the statutory intent to
ensure that manufacturers have lead time is met by providing that a
state can immediately implement a Section 177 Program for any
manufacturer whose opt-out from National LEV is effective, if the
backstop Section 177 Program was adopted at least two years previously.
Thus, for situations where the manufacturer controls the date that it
becomes subject to the Section 177 Program, section 177 would start the
two-year lead time period from the date of state adoption of the
backstop Section 177 Program.
The other type of situation is one where the state takes an action
imposing requirements on a manufacturer under section 177 and the
manufacturer has no control over the timing of those requirements. For
example, a state might remove National LEV as a compliance alternative
from its state regulations, leaving only the Section 177 Program
requirements in place, which the state had adopted at least two years
earlier. In that instance, making the manufacturer immediately subject
to the section 177 requirements would be contrary both to the purposes
of the section 177 lead time requirement and to the intended operation
of National LEV. By opting into National LEV the manufacturer did not
accept the possibility that a state might commit to National LEV and
then violate that commitment. Nor is there any way for the manufacturer
to protect itself against an immediate application of the section 177
requirements by the violating state, except not to opt into National
LEV at all. Under the circumstances where the state controls the timing
of the applicability of the Section 177 Program, the section 177 lead
time provisions would be implemented by requiring two years of lead
time from the date that the manufacturer knew it would become subject
to the state's Section 177 Program without the option of complying with
National LEV as an alternative.
Today's interpretation of section 177 applies only in the unique
situation presented by National LEV--where states and manufacturers are
both voluntarily opting into the national program. It does not
necessarily provide any guidance for other circumstances.
VII. National LEV Will Produce Creditable Emissions Reductions Because
It Is Enforceable
In the Final Framework Rule, EPA noted that National LEV must be an
enforceable program to grant states credits for SIP purposes for
emission reductions from National LEV vehicles. As discussed in the
Final Framework Rule, there are two aspects to ensuring that National
LEV is enforceable. See 62 FR 31225 (June 6, 1997). First, the National
LEV program emissions standards and requirements must be enforceable
against those manufacturers that have opted into the program and are
operating under its provisions. In the Final Framework Rule, EPA found
that the National LEV program meets this aspect of enforceability.
Second, the National LEV program itself must be sufficiently stable to
make it likely to achieve the expected emissions reductions. To achieve
the expected emissions reductions from National LEV, the offramps must
not be triggered and the program must remain in effect for its expected
lifetime. EPA also found in the Final Framework Rule that the program
elements finalized in that rule would contribute to a stable National
LEV program. In today's notice, EPA finds that the complete National
LEV program as contained in today's Final Rule and the Final Framework
Rule will be sufficiently stable to make the program enforceable and
hence creditable for SIP purposes.
The only circumstances that would allow the National LEV program to
terminate prematurely would be an OTC State's failure to meet the
commitments it makes regarding adoption of motor vehicle programs under
section 177 of the Act, certain EPA changes to Stable Standards, an EPA
determination that National LEV would no longer produce emission
reductions equivalent to or greater than OTC State Section 177
Programs, or certain EPA actions or inactions related to in-use
fuels.46 The Final Framework Rule described the basis for
EPA's belief that the Agency is unlikely to change any of the Stable
Standards in a manner that would give the auto manufacturers the right
to opt out of National LEV.47 Here EPA finds that National
LEV is stable because EPA believes that an OTC State is unlikely to
fail to meet its commitments to National LEV, National LEV is likely to
continue to produce equivalent (or better) emission reductions than OTC
State Section 177 Programs, and EPA is unlikely to act in a manner that
would allow manufacturers to opt out based on the proposed offramps
related to in-use fuels.
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\46\ OTC States could also opt out if a manufacturer opted out,
and manufacturers could opt out if either another manufacturer or an
OTC State opted out. Yet for purposes of evaluating the stability of
the National LEV program, EPA need not consider these secondary opt-
out opportunities because they would only arise if an OTC State or
EPA had already triggered another offramp.
\47\ The list of Non-Core Stable Standards which previously
referenced the federal Tier 1 Supplemental Federal Test Procedures
(SFTP) requirements has been updated to reflect the SFTP provisions
in today's rule. This does not affect EPA's rationale for finding
the National LEV program stable, as discussed in the Final Framework
Rule.
Due to the change in the duration of the auto's commitment
(discussed in section V.A. above), EPA has reworded 40 CFR
86.1705(d)(10). The wording changes do not change the intent of the
provision, however, which is to clarify that EPA's promulgation of
Tier 2 standards effective in MY2004 or later does not allow
manufacturers to opt out of National LEV.
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A. OTC States Will Keep Their Commitments to National LEV
As discussed above, there are four ways in which an OTC State could
violate its commitments to National LEV and allow the manufacturers to
opt out
[[Page 952]]
of the program: (1) Attempt to have a state Section 177 Program
(including ZEV mandates, except in states with existing ZEV mandates)
that was in effect and that did not allow National LEV as a compliance
alternative for the duration of the state's commitment to National LEV;
(2) in states without existing ZEV mandates, adopt a backstop ZEV
mandate that would come into effect before the end of the state's
commitment to National LEV, even if the state allows National LEV as a
compliance alternative to the ZEV mandate for the duration of the
state's commitment to National LEV; (3) fail to submit a National LEV
SIP revision to EPA by the specified date; or (4) fail to submit an
adequate National LEV SIP revision. EPA is confident that the OTC
States will keep all of their commitments to National LEV for the
duration of the program. The OTC States' practical ability to meet
their commitments, the fact that the OTC States would have made
commitments to the program through both practically binding instruments
and legally binding instruments, and the effects of a violation of
their commitments, all combine to support a finding that the states are
unlikely to trigger an offramp for manufacturers.
First, the OTC States should have no practical difficulty carrying
out their commitments. After the OTC States have opted into National
LEV and the program has come into effect, the states will need to adopt
regulations (or modify existing regulations) to commit to accept
National LEV as a compliance alternative for the specified duration and
to submit those regulations to EPA as a SIP revision within one year
(or for a few states, eighteen months) of the date of EPA's finding
that National LEV is in effect. Based on discussions with each of the
OTC States on the time needed to complete a rulemaking in that state
and the absence of any comments to the contrary, EPA believes that
these are realistic deadlines for state action, which would provide
sufficient time for the states to complete their regulatory processes
and submit their SIP revisions. (See docket no. A-95-26 for memo on
these discussions.) See the SNPRM (60 FR 44754 at 44775) for further
discussion of how the timing and political significance of the initial
opt-ins enhances the likelihood that the states will submit their SIP
revisions in a timely manner.
Once EPA has approved a National LEV SIP revision, the state will
be legally bound to uphold its commitment. As discussed above in
section V.C.4, an approved SIP provision committing a state to accept
National LEV as a compliance alternative to a state Section 177 Program
or ZEV mandate would preempt a conflicting state law that required
manufacturers to comply with a state Section 177 Program or ZEV mandate
without allowing National LEV as a compliance alternative. Until EPA
approved a subsequent SIP revision, manufacturers could enforce the
initial SIP commitment in federal court. Furthermore, EPA would be
obligated to disapprove a subsequent SIP revision that violated a
state's commitment to allow National LEV as a compliance alternative
for the specified period if it would interfere with other states'
ability to attain the NAAQS. Other states are likely to have reasonably
relied upon the emissions reductions from National LEV for attainment
and maintenance, and the effect of approving the new SIP revision would
very likely be to deprive the states of those reductions.
For states without existing ZEV mandates, the statement of intent
not to adopt a backstop ZEV mandate effective during the period of the
state's commitment to National LEV need not be incorporated as a
legally enforceable element of the state's SIP revision. However, there
are still strong practical disincentives for a state to adopt such a
provision, as it would allow the manufacturers to opt out of National
LEV with all of the negative environmental consequences that doing so
would entail, as discussed below. In addition, OTC States would have
very little incentive to adopt a backstop ZEV mandate effective during
the period of the state's commitment to National LEV because such a
backstop would offer a state very little protection against a
manufacturer's opt-out from National LEV. A backstop state Section 177
Program, which would require compliance with the fleet average NMOG
provisions of the CAL LEV program, would apply to any manufacturer that
had opted out of National LEV immediately upon such a manufacturer's
opt-out becoming effective. Thus, adoption of a backstop state Section
177 Program at least two years prior to the effective date of a
manufacturer's opt-out would allow the program to apply as soon as the
manufacturer was no longer subject to the National LEV requirements,
without the state providing an additional two years of lead time.
However, in their commitments to National LEV, OTC States would commit
to, and section 177 would require, that they provide manufacturers at
least two years of lead time from the date of the manufacturer's opt-
out prior to any ZEV mandate becoming effective, regardless of the
effective date of the manufacturer's opt-out. Thus, the only potential
benefit from adoption of a backstop ZEV mandate effective during the
period of the state's commitment to National LEV would be to avoid the
additional delay in the applicability of the mandate that would be
caused by the time required for adoption, but not to avoid the delay
caused by providing the required lead time. Given that the state
commitments to National LEV extend until MY2006 at the latest, it is
highly unlikely that a manufacturer would opt out of National LEV
within a timeframe in which such a delay could have any effect. With
virtually no benefit to be gained from such an action, combined with
the fact that it would allow manufacturers to opt out of National LEV,
EPA believes it is highly unlikely that any state without an existing
ZEV mandate would adopt a backstop ZEV mandate effective during the
period of the state's commitment to National LEV.
Even if the state were not bound to its commitment legally, the
practical effects of not meeting its commitment provide an independent
basis for finding that National LEV is stable. The structure of the
opt-out provisions establishes substantial disincentives for OTC States
to violate their commitments, given the requirements that would apply
to vehicles sold in the violating state, the opportunity it would
provide for manufacturers to opt out of National LEV, and the
consequences of such an opt-out. As discussed in detail above in
section VI.A.1, for an OTC State that has violated its commitment by
attempting to have a state Section 177 Program that does not allow
National LEV as a compliance alternative, the consequences in that
violating state would be that under National LEV all manufacturers
would be able to comply with Tier 1 tailpipe standards and not count
those vehicles in the fleet NMOG average. Thus, as provided in 40 CFR
86.1707(e)(2), the violating state would receive SIP credits based on
this reduced compliance obligation. Similarly, if a state failed to
submit its SIP revision committing to National LEV, submitted an
inadequate SIP revision, or adopted a backstop ZEV mandate effective
during the period of the state's commitment to National LEV, the same
reduced tailpipe standard requirements would apply in the violating
state for any manufacturer that opted out of National LEV until the
manufacturer's opt-out became effective. Thus, the violating state
would (or is likely to, depending upon the type of violation) receive
higher emitting
[[Page 953]]
vehicles and commensurately fewer SIP credits. (See section VI.A above
for a discussion of timing of requirements applicable to manufacturers
under various options.)
In addition, states will be further discouraged from violating
their commitments because a state violation would give manufacturers
the opportunity and reason to opt out of National LEV, and manufacturer
opt-outs would hurt air quality in all states. If National LEV is in
effect, a substantial number of the OTC States and probably all of the
37 States are unlikely to have backstop Section 177 Programs in place.
States without backstop Section 177 Programs would not be able to
implement a state Section 177 Program for over two years because of the
time needed to adopt a program and the two years of lead time required
under section 177. During this period, manufacturers that had opted out
of National LEV would have to comply only with federal Tier 1 standards
for sales of new motor vehicles in those states without backstop
programs. Also, sales of these Tier 1 vehicles would further increase
vehicle emissions in both the violating state and states with backstop
Section 177 Programs as well, through migration of dirtier Tier 1
vehicles and transport of air pollution from states receiving Tier 1
vehicles.
EPA is confident that the combination of the feasibility of
compliance with the OTC State commitments, the practical and legal
constraints on a state breaking its commitment, and the environmental
and SIP-related consequences of a state breaking its commitment make it
highly unlikely that an OTC State that has opted into National LEV will
violate any of its commitments to the program.
B. It Is Unlikely That National LEV Would Be Found Not To Produce
Emission Reductions Equivalent to OTC State Section 177 Programs
As discussed in section VI.D.2 above, today's Final Rule allows OTC
States to request that EPA do a periodic equivalency finding to
determine whether modifications to EPA new motor vehicle regulations
(or their implementation, to the extent that is reflected in the
modeling) will reverse EPA's finding that National LEV is equivalent to
(or better than) OTC State Section 177 Programs. EPA believes it is
unlikely to change the result of its equivalency determination as a
result of the periodic determinations. The primary, and perhaps only,
possible circumstance that could cause a change in the equivalency
finding would be EPA modifying a new motor vehicle regulation in a way
that makes it significantly less stringent.48 It is highly
unlikely that this would occur. Given the greater emissions reductions
that would be produced by National LEV compared to the alternative of
OTC State Section 177 Programs (discussed above in section IV), only a
significant weakening of an EPA regulation would be likely to change
EPA's determination that National LEV would produce emissions
reductions at least equivalent to the alternative. Such a weakening of
an EPA new motor vehicle regulation would be contrary to EPA's mission
of environmental protection and would jeopardize the National LEV
program, which the Agency strongly supports. EPA has invested
significant resources in facilitating the negotiations between the
parties and developing the regulatory framework for the National LEV
program, and the Agency would not lightly jeopardize the results of
this effort. The discussion in the SNPRM as to why EPA would not make a
Stable Standard less stringent in a way that would change the
equivalency determination applies to changes to all new motor vehicle
standards. See Section VII.B of the SNPRM, 62 FR 44776.
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\48\ The OTC States have suggested that changes in
implementation of EPA new motor vehicle regulations might also
affect the equivalency determination. EPA is not aware that the
model reflects this type of implementation of EPA regulations.
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C. EPA Is Unlikely To Fail To Consider In-Use Fuels Issues Upon a
Manufacturer's Request
EPA also believes that the Agency is unlikely to act or fail to act
in a manner that would allow the manufacturers to opt out of National
LEV based on the offramp related to in-use fuels. As discussed above,
today's Final Rule provides autos with an offramp if EPA fails to
consider certain manufacturer requests regarding the potential effects
of fuel sulfur levels on the emission performance of National LEV
vehicles.
Given the nature of the offramp, EPA believes it is highly unlikely
that it would ever be triggered. This offramp does not guarantee
manufacturers any particular substantive outcome to their requests, nor
does it provide manufacturers any additional rights (beyond what
rights, if any, are provided otherwise under the Clean Air Act and the
Administrative Procedure Act) to a particular substantive outcome or to
have the substantive outcome reviewed by a court. Rather, this offramp
formalizes the process EPA previously committed to follow in addressing
potential problems related to the higher sulfur levels in fuel supplied
nationally (including in the OTC States) than in California. If ongoing
additional investigations indicate problems that need to be addressed,
EPA will need to reassess the fuel sulfur issue in both the National
LEV context and other EPA motor vehicle emission control programs, as
discussed above in section VI.C. Given EPA's recognition of the
manufacturers' concerns and the ongoing process for resolving them
outside of the National LEV context, EPA believes it is highly unlikely
that the Agency would fail to respond to a manufacturer's request to
address any problems that are identified or decline to consider any
reasonable solutions. In addition, EPA would have all the same
incentives here to avoid taking any action that would jeopardize the
benefits from the National LEV program, as discussed above for changes
to new motor vehicle requirements that could result in a change to the
equivalency finding.
VIII. Additional Provisions
A. Early Reduction Credits for Northeast Trading Region
As was proposed, under today's rule manufacturers may generate
early reduction credits for sales of vehicles in the Northeast Trading
Region (NTR) in MY1997 and MY1998, prior to the start of National LEV
in MY1999. 40 CFR 86.1710(c)(8). No commenters opposed early reduction
credits. The ability to generate these credits will provide
manufacturers added flexibility as well as create an incentive for them
to introduce cleaner vehicles into this region before MY1999, thus
providing air quality benefits sooner.
Today's rule takes the same approach to these early reduction
credits in the NTR as the Final Framework Rule took to the early
reduction credits earned in the 37 States before MY2001.40 CFR
86.1710(c)(7). Since the credits cannot be used or traded before
MY1999, EPA is proposing to treat any credits earned in the NTR before
MY1999 as if earned in MY1999 for annual discounting purposes. This is
consistent with EPA's approach to early reduction credits in the 37
States and with California's approach to allowing early generation of
credits. These credits will be subject to the normal discount rate
starting with MY1999, meaning they will retain their full value for
MY2000 and will be discounted from then on. In addition, consistent
with the approach to early reduction credits in the 37 States, early
reduction credits in the NTR will be subject to a one-time ten percent
discount applied in MY1999, as discussed below.
[[Page 954]]
Manufacturers will be able to generate early reduction credits in
the NTR by supplying vehicles with lower emissions than otherwise
required during this time period in any OTC State that is in National
LEV for MY1999 and later. Specifically, manufacturers would be able to
generate credits for sales of TLEVs, LEVs, ULEVs and ZEVs sold in the
OTR outside New York and Massachusetts in MY1997, and outside of New
York, Massachusetts and Connecticut in MY1998, to the extent that such
vehicles can be sold under EPA's cross-border sales
policy.49 Additionally, manufacturers could generate credits
for sales of vehicles achieving a lower fleet average NMOG value than
required under the state Section 177 Programs in New York and
Massachusetts in MY1997, and in New York, Massachusetts and Connecticut
in MY1998, assuming that those states commit to National LEV for MY1999
and later. Manufacturers would not be able to take credit for vehicles
sold to meet the applicable NMOG averages in New York, Massachusetts
and Connecticut in MY1997 and MY1998, as that would be using vehicles
required independent of National LEV to reduce the stringency of the
National LEV requirements, and hence would be ``double-counting.''
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\49\ See docket no. A-95-26, IV-A-03 for EPA's cross border
sales policy. The current cross border sales policy allows sales of
vehicles certified to California's emission standards in states
contiguous to, or within 50 miles of, California and states that
have a program adopted under section 177 in place. Thus, in the OTR
for MY1997 and MY1998, manufacturers are allowed to sell California
vehicles in Maine, New Hampshire, Vermont, Massachusetts, New York,
Rhode Island, New Jersey, Pennsylvania, and Connecticut.
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EPA believes that there are substantial benefits to early
introductions of cleaner vehicles. However, the Final Framework Rule
included a discount for early reduction credits in the 37 States in
part to address a concern that giving full, undiscounted credits for
all early reductions may generate some windfall credits. See 62 FR
31214-31215. ``Windfall'' credits are credits given for emission
reductions the manufacturer would have made even in the absence of an
early credit program. The purpose of giving credits for early
reductions is to encourage manufacturers to make reductions that they
would not have made but for the credit program. Because credits can be
used to offset higher emissions in later years, if manufacturers are
given credits for early reductions they would have made even without a
credit program, an early credit provision could decrease the
environmental benefits of the program.
Although EPA took comment on the potential for windfall credits in
the NTR and in the 37 State region and whether ten percent is an
appropriate discount factor for each region, EPA decided that
circumstances had not changed since the Final Framework Rule in a way
that would justify reducing the discount factor below 10%. To the
contrary, Honda's introduction nationally of LEV technology vehicles
(albeit certified to Tier 1 levels) confirmed that National LEV and the
ability to earn early reduction credits are not the only reasons
manufacturers would move to cleaner vehicle technology.
B. Calculation of Compliance with Fleet Average NMOG Standards
Today's final rule contains provisions for the calculation of
compliance with the National LEV fleet NMOG average in the event that
fewer than 49 states are participating in the program. These provisions
are necessary even though EPA continues to believe that National LEV
should be a 49-state program and the auto manufacturers have repeatedly
stated that all thirteen OTC States must opt in for National LEV to
come into effect. If the auto manufacturers and the relevant OTC States
are interested in National LEV proceeding even with less than 49 states
participating, EPA would want National LEV to proceed. Additionally,
after the program is found in effect, it is possible that National LEV
would continue even if one or more OTC States opt out at a future time.
Therefore, National LEV requirements must provide for the possibility
of having less than 49 states in the program, which will necessitate
changes in the Final Framework Rule's provisions for determining
compliance with the fleet average NMOG standards.
In the SNPRM, EPA proposed to modify the Final Framework Rule so
that the fleet average NMOG calculation would not include vehicle sales
in any OTC State that legitimately opts out once that opt-out becomes
effective.50 This would help ensure that states that opt
into National LEV will receive the anticipated emissions benefits as
long as they and the auto manufacturers participate in National LEV.
The opposite approach (i.e., including all vehicle sales in any OTC
States that are not participating in National LEV) would concentrate
cleaner cars in those OTC States with state Section 177 Programs at the
expense (environmentally) of OTC States committed to National LEV. EPA
is finalizing the program to have manufacturers not include vehicles
sold in a state that opts out of the program in their fleet average
NMOG compliance calculations for the Northeast Trading Region (NTR) or
All States Trading Region (ASTR). This action provides the maximum
emission benefits to the states participating in the National LEV
program. Additionally, vehicles sold in an OTC State that was not
participating in National LEV will be included in the fleet average
NMOG compliance calculations for that state, and it would be
inequitable to count those vehicles in compliance calculations for the
National LEV program as well.
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\50\ EPA's treatment of vehicle sales in OTC States that break
their commitments is addressed in the regulatory provisions and
preamble discussion of manufacturer and OTC State offramps. See
section VI above and 40 CFR 86.1707.
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EPA also took comment on whether to count in a manufacturer's fleet
average NMOG calculation those California-certified vehicles that are
sold under EPA's Cross Border Sales (CBS) policy in states that are
participating in National LEV. A National LEV program consisting of
less than all of the OTC States would necessitate the continuation of
EPA's CBS policy for those manufacturers producing vehicles certified
separately to Federal and California standards. This policy allows
manufacturers to introduce into commerce California-certified vehicles
in states that are contiguous to California or other states that have
adopted the Section 177 Program. The policy was designed to alleviate
the burden on dealerships located in border regions of states with a
Section 177 Program from having to stock, service, and sell two types
of vehicles: those meeting the California emission requirements and
those meeting the Federal emission requirements. If a state were not
participating in National LEV and instead had a Section 177 Program in
effect, under the CBS policy manufacturers would be allowed to sell
California-certified vehicles in National LEV states bordering the non-
participating state. The necessity of continuing the Cross-Border Sales
policy raises the issue of how to count such California-certified
vehicles sold in those contiguous states in calculating the
manufacturer's compliance with its National LEV fleet average NMOG
requirement.
EPA has decided to allow manufacturers to include all National LEV
vehicles and California-certified vehicles sold in the NTR in MY1999
and MY2000 (including California Tier 1 vehicles) in their fleet
average NMOG compliance calculations for the NTR in MY1999 and MY200
(except for any vehicles sold in an OTC State that has not opted in or
that otherwise has its own Section 177 Program). If all these
[[Page 955]]
California-certified vehicles were not included in the compliance
calculation, a manufacturer could detrimentally affect its compliance
with the fleet average NMOG standards in the NTR by selling higher-
emitting California-certified vehicles, which would not be included in
its NTR compliance calculation nor in any calculation done to show
compliance with a state Section 177 Program. These vehicles would
decrease the size of the manufacturer's fleet in the NTR and allow the
manufacturer to demonstrate compliance with applicable fleet average
NMOG standards using a smaller fleet size than was actually sold in the
NTR.
EPA has also decided to allow manufacturers to count only vehicles
certified to federal standards in the fleet average NMOG calculation
for MY2001 and later. No California-certified vehicles sold in National
LEV states will count in a manufacturer's fleet average NMOG compliance
calculation after MY2000. Given the nationwide trading region that will
go into effect in MY2001, it becomes much more difficult for a
manufacturer to artificially decrease the size of its National LEV
fleet and thereby artificially inflate its NLEV NMOG fleet average
through sales of California-certified vehicles. The much larger number
of vehicles included in the ASTR means that any sales of California
vehicles in the NTR under the CBS policy will not have a generally
noticeable effect on the calculated fleet averages in the ASTR.
California-certified vehicles sold in the NTR after MY2000 will also
likely be LEVs and ULEVs, as discussed in sections IX and VIII.E, so
there is even less likelihood of a detrimental environmental impact
from the sale of California-certified vehicles in the NTR. The auto
manufacturers' comments supported not including California-certified
vehicles in their fleet average NMOG compliance calculations after
MY2000.
C. Certification of Tier 1 Vehicles in a Violating State
If an OTC State violates its commitment to National LEV, in some
instances manufacturers will have the option of supplying vehicles
meeting only the Tier 1 emission standards in the violating state. To
exercise this option, manufacturers could sell different vehicles
(i.e., Tier 1 vehicles) to the violating OTC State than they are
selling to the other states (i.e., TLEVs, LEVs, ULEVs and ZEVs).
Alternatively, manufacturers could sell the same vehicles to all
states, but have a label that indicates that vehicles sold in the
violating OTC State are only certified to Tier 1 levels. Such vehicles
sold in the violating OTC State would have Tier 1 tailpipe standards
for their compliance levels (which would govern recall and warranty
actions and SIP credits), but would have TLEV, LEV, ULEV or ZEV
tailpipe standards for their compliance levels when sold in other
states covered by the National LEV program.
It is possible that a manufacturer could begin vehicle
certification for a given model year before learning that it is only
required to sell Tier 1 vehicles in a given state. In such a situation,
EPA will allow a manufacturer to change the compliance levels of its
vehicles sold in a violating OTC State through the submission of
running changes to EPA. A running change is a mechanism manufacturers
use to obtain approval from EPA for modifications or additions to
vehicles or engines that have already been certified by EPA but are
still in production. By allowing a manufacturer to change the
compliance levels of its vehicles through a running change that applies
only to vehicles sold in a violating OTC State, manufacturers will have
a procedure to respond in a timely fashion to a state breaking its
commitment, which will provide a real disincentive for an OTC State to
break its commitment.
Manufacturers currently use running changes in the federal
certification process to obtain EPA approval of a change in a specified
vehicle configuration or an addition of a vehicle or engine to an
approved engine family that is still in production.51 A
manufacturer may notify the Administrator in advance of or concurrent
with making the addition or change. The manufacturer must demonstrate
to EPA that all vehicles or engines affected by the change will
continue to meet the applicable emission standards. This demonstration
can be based on an engineering evaluation and testing if the
manufacturer determines such testing is necessary. The Administrator
may require that additional emission testing be performed if the
manufacturer's determination is not supported by the data included in
its running change application. EPA may disapprove a running change
request, which could then require manufacturers to remedy vehicles or
engines produced under the request.
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\51\ See 40 CFR 86.079-32, 86.079-33, and 86.082-34.
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EPA will exercise its current authority to allow manufacturers to
use a running change to modify quickly the compliance level of their
National LEV vehicles to Tier 1 tailpipe standards when the National
LEV regulations set the only applicable tailpipe standards at Tier 1
levels in a particular state. Such running changes will reflect only
the change in emission standards the vehicles are required to meet.
After such running change has been made, vehicles sold in a state for
which Tier 1 standards are applicable will be treated as Tier 1
vehicles for purposes of federal enforcement requirements and warranty
limits and would not count in the manufacturers' NMOG fleet average.
If a manufacturer wished to sell vehicles with Tier 1 compliance
levels in a violating OTC State and more stringent compliance levels in
other states, it would be required to modify its certification
application to reflect the change and install a modified Vehicle
Emission Control Information (VECI) label. The label would state that
the vehicle complies with TLEV, LEV, ULEV or ZEV standards (whichever
is applicable), but if such vehicle is sold in the specified violating
OTC State, such vehicle is certified to Tier 1 tailpipe standards. The
modified VECI label will highlight the distinction in vehicle
compliance levels to consumers and the general public.52 EPA
believes that running changes for this particular situation may be
allowed by applying good engineering judgment, rather than additional
emission testing, since a vehicle certified to National LEV TLEV, LEV,
ULEV, or ZEV standards should also meet Federal Tier 1 standards. In
the instance where an engineering evaluation is judged to be
insufficient to support a change, EPA will require additional data.
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\52\ Such a running change would not have a retroactive effect.
Any vehicle sold as a TLEV, LEV, ULEV or ZEV (i.e., any vehicle
without a label that said Tier 1 was the applicable standard for
sales in the relevant state at the time of the sale) would still be
subject to warranty and recall for the tailpipe standards applicable
to that category. EPA believes it would be unacceptable for a
consumer who purchases a LEV that, at the time of sale in that
state, is being sold as a vehicle certified to LEV standards for
that state to find out later that the vehicle has mysteriously been
converted to a Tier 1 vehicle.
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Vehicles complying only with Tier 1 tailpipe standards and sold in
an OTC State that has violated its National LEV commitment will be
treated as Tier 1 vehicles in that state for purposes of demonstrating
compliance with federal requirements and SIP credits. These vehicles
will be held only to the Tier 1 tailpipe standards for purposes of
recall liability in that state. For example, a National LEV vehicle
certified to LEV standards but sold as a Tier 1 vehicle in a violating
state would not be subject to recall action in the violating state if
the
[[Page 956]]
problem causing the recall did not cause the vehicle to exceed the Tier
1 standards.53
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\53\ EPA is considering making significant changes to its
existing federal compliance program, currently targeted to begin
with MY2000 (these changes are referred to as CAP 2000, or
Compliance Assurance Program 2000). While CAP 2000 is still pre-
proposal, EPA has established a docket (A-96-50), which contains
information on the concepts currently being considered. Once
promulgated, CAP 2000 may have some potential ramifications for
quickly changing certification designations for National LEV
vehicles sold in an OTC State that had violated its National LEV
commitment. In particular, EPA is considering significantly
streamlining its current certification program and requiring
manufacturers to perform an in-use verification testing program to
demonstrate that the streamlined certification procedures are
capable of predicting in-use compliance. This program would apply to
all federally certified vehicles, including Tier 1 vehicles. Thus,
CAP 2000 could also possibly apply to any National LEV vehicles that
were only required to comply with Tier 1 tailpipe standards under
the proposal outlined above.
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D. Provisions Relating to Changes to Stable Standards
The Final Framework Rule provided that, with certain exceptions,
manufacturers would be able to opt out of National LEV if EPA changed a
motor vehicle requirement that it had designated a ``Stable Standard.''
The Stable Standards 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
generally 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. See the Final
Framework Rule for more detail on the specific Stable Standards and the
offramp for manufacturers associated with changes to the Stable
Standards (62 FR 31202-31207).
As proposed in the SNPRM, EPA is making a few minor changes to the
provisions for opt-outs based on a change to a Stable Standard. See 40
CFR 86.1707(d). Under the Final Framework Rule, EPA had an opportunity
to prevent an opt-out based on a change to a Stable Standard from
coming into effect by withdrawing the change to the Stable Standard
before the effective date of the opt-out. To give EPA sufficient time
to withdraw the change and prevent the opt-out, under the Final
Framework Rule, such an opt-out could not become effective until the
model year named for the second calendar year following the calendar
year in which the manufacturer opted out.
As proposed in the SNPRM, this Final Rule deletes the provisions
that allowed the Agency the ability to prevent an opt-out by
withdrawing a change that had allowed manufacturers to opt out. Today's
rule also sets the earliest effective date of an opt-out based on a
change to a Core Stable Standard to be the same as the earliest
effective date of an opt-out based on a violation of an OTC State
commitment to National LEV. Thus, an opt-out based on an EPA change to
a Core Stable Standard or an OTC State violation of its commitment to
National LEV could become effective beginning in the ``next model
year'' after the manufacturer opts out.54 See section VI.A
above for further discussion of the effective date of opt-outs based on
an OTC State violation of its commitment to National LEV.
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\54\ The ``next model year'' is the model year named for the
calendar year following the calendar year in which EPA received the
opt-out notification. For example, if EPA received the opt-out in
2000, the ``next model year'' would be MY2001.
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EPA does not believe that this change will adversely affect the
stability of the National LEV program. For the reasons discussed in the
SNPRM (60 FR 44776), EPA is highly unlikely to make any change to a
Stable Standard that may allow the manufacturers to opt out. EPA
received no comments opposing this proposed change. See the SNPRM
section VIII.D for additional discussion of the reasons why EPA
believes this change is appropriate.
In the Final Framework Rule, EPA stated that, if a manufacturer
were to take an offramp because EPA changed a Stable Standard, the
applicable state or federal standards would apply. At that time, EPA
did not discuss in detail the timing for when state or federal
standards would apply. As proposed in the SNPRM (60 FR 44779), today's
rule provides that, if a manufacturer validly opted out of National LEV
based on an EPA change to a Stable Standard, once the manufacturer's
opt-out was effective, the manufacturer's obligations would be
determined in the same manner as if the manufacturer had opted out
because an OTC State failed to submit its National LEV SIP revision on
time (except that no state could be treated as a violating state). As
of the effective date of its opt-out, the manufacturer would be subject
to any backstop Section 177 Programs for which the two-year lead time
requirement of section 177 had been met (running from the date the
state adopted the backstop program), and would be subject to Tier 1
requirements in states without such programs. Manufacturers would be
subject to backstop ZEV mandates for model years (as defined in Part
85, Subpart X) commencing two years after the date of EPA's receipt of
the opt-out notification. To the extent that these regulations would
provide a manufacturer with less than the two-year lead time set forth
in section 177, the manufacturer waives that protection by opting into
National LEV and then setting an effective date in its opt-out
notification that provides for less than two-years lead time. To the
extent these regulations would provide a manufacturer with more time
than required by section 177, by opting into National LEV the OTC
States commit to provide the lead time set forth in the National LEV
regulations.
E. Nationwide Trading Region
The National LEV program, as set forth in the Final Framework Rule,
required manufacturers to determine compliance with the fleet average
NMOG standards for the two classes of National LEV vehicles in two
separate trading regions: the OTC States and the 37 States making up
the rest of the country (except California). In the SNPRM, EPA proposed
to remove the requirement for two trading regions for MY2001 and later
model years and instead establish a nationwide trading region. EPA
cited the elimination of the legal requirement for National LEV to
provide equivalent emission reductions to the OTC LEV program and the
change in program start dates for both National LEV and OTC State
Section 177 Programs as the major reasons for it to reconsider the
necessity of separate trading regions. See 62 FR 44779-80. In today's
rule in 40 CFR 86.1710, EPA is establishing a nationwide trading region
which manufacturers will use to demonstrate compliance with National
LEV standards in MY2001 and later.
It is important that the emissions reductions expected from
National LEV in the OTR are actually achieved. Various aspects of the
program, such as the periodic equivalency determination and the
separate trading regions, were designed to ensure the expected quantity
of emission reductions in the OTR. However, EPA believes that a
nationwide trading region will not detrimentally affect the
environmental benefits of National LEV in the OTR. EPA has received no
data showing significantly different vehicle model sales in different
regions of the country
[[Page 957]]
and has no reason to expect that manufacturers' compliance with a
nationwide trading region will lead to greater numbers of higher-
emitting vehicles in the OTR.
Even if vehicle model sales levels were significantly different in
various regions of the country, a discrepancy between the emissions
produced by the fleets sold in the OTR and outside the OTR would only
be possible if a manufacturer's fleet was made up of a number of engine
families certified to Tier 1, TLEV, and LEV standards. After MY2000, a
manufacturer's fleet would have to include Tier 1 vehicles and TLEVs,
as well as LEVs and ULEVs, for there to be even a possibility of
introducing a greater percentage of dirtier vehicles in the OTR than in
the rest of the country. As noted in the SNPRM, EPA does not believe
significant numbers of Tier 1 vehicles and TLEVs will be sold in the
OTR after MY2000, since other provisions of the National LEV program
will act to reduce the incentive to sell substantial numbers of such
vehicles at that time.
Two factors support EPA's belief that the OTC States participating
in the National LEV program will receive vehicles with the same level
of emissions control under a nationwide trading region as would be
expected if the program retained two trading regions. First, beginning
in MY2001, National LEV regulations prohibit manufacturers from
offering for sale any Tier 1 vehicles and TLEVs in the NTR unless the
same engine families are certified and offered for sale in California
in the same model year. See 62 FR 31218 (June 6, 1997); 40 CFR
86.1711.55 California's more stringent fleet average NMOG
standard and SFTP phase-in requirements, as described in section IX,
will act to limit the number of Tier 1 and TLEV engine families
certified and sold in California, and, therefore, the number sold in
the NTR. Second, even though the National LEV fleet average NMOG
standard is not as stringent as California's, the 0.075 g/mi and 0.100
g/mi standards applicable under National LEV for MY2001 and later will
make it difficult for manufacturers to include substantial numbers of
Tier 1 vehicles and TLEVs in their fleet and still comply with the
fleet average NMOG standard. Each Tier 1 vehicle or TLEV sold by a
manufacturer would have to be offset by more than one ULEV vehicle in
order for that manufacturer to remain in compliance with the applicable
fleet average NMOG standards. Therefore, EPA believes there are strong
incentives for manufacturers to limit or even eliminate the production
and sale of Tier 1 vehicles and TLEVs in the NTR in MY2001 and later,
which would result in a nationwide vehicle fleet of essentially LEVs.
This result is not dependent on having a separate trading region in the
OTR.
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\55\ As stated in the SNPRM, manufacturers will not be required
always to sell exactly the same engine families in both California
and the NTR because in some instances, that would not be possible.
In the specific case of Tier 1 engine families, National LEV
maintains Federal Tier 1 standards while California has its own Tier
1 standards, so a manufacturer could not sell an identical
California Tier 1 vehicle as a Federal Tier 1 vehicle in the NTR
under the National LEV program. Therefore, for purposes of this
provision, EPA will consider a National LEV Tier 1 or TLEV engine
family the same as a California Tier 1 or TLEV engine family if the
National LEV engine family has the same technology (hardware and
software) as the comparable California engine family. A manufacturer
could always certify a Tier 1 or TLEV engine family as a 50-state
family and avoid this issue.
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A nationwide trading region will also reduce manufacturers' and
EPA's administrative burden in demonstrating and assessing compliance
with the National LEV fleet average NMOG standards. Compliance under
one nationwide trading region rather than two separate regions for
MY2001 and later model years will reduce the manufacturers' compliance
burden by eliminating the need specifically to track and report vehicle
sales in two separate regions and maintain two separate tallies of
credits and debits specific to the two regions. A single trading region
will also reduce EPA's administrative burden in determining whether
manufacturers are complying with the applicable fleet average NMOG
standards. Given a nationwide fleet that is all or almost all LEVs, a
separate trading region for the OTR will not have any significant air
quality benefit and will add additional unnecessary complexity to the
National LEV program. Moreover, even separate trading regions would not
have required manufacturers to demonstrate program compliance on an OTC
state-by-state basis, but would instead have only required compliance
demonstrations based on regionwide sales. Separate trading regions
would thus have been of limited value to OTC States wishing to use
National LEV program vehicle tracking requirements to check on the
different types of vehicles sold within individual states.
Under today's rule, National LEV retains the NTR, which would apply
for MY1999-2000 and cover vehicles sold in the OTC States. The second
region would be the All States Trading Region (ASTR), which will
include all states in National LEV except for California, and apply for
2001 and later model years. Manufacturers will demonstrate compliance
with the fleet average NMOG standards in these two regions under the
provisions set forth in today's rule and the Final Framework Rule. EPA
is eliminating the 37 State trading region that was finalized in the
Final Framework Rule.
Manufacturers can generate early reduction credits in the states
outside the NTR before MY2001 to apply to compliance in the ASTR from
MY2001 on. Manufacturers could also use credits generated in the NTR
for demonstrating compliance in the ASTR from MY2001 on at the same
value as if the manufacturer had used them in the NTR under the Final
Framework Rule. However, a manufacturer could not apply early reduction
credits generated outside the NTR to offset any debits generated in the
NTR before MY2001. Using credits generated outside the NTR to offset
debits generated in the NTR during MY1999 and MY2000 would decrease the
environmental benefits that should accrue in the NTR.
Shifting from the NTR in MY2000 to the ASTR in MY2001 does raise
special transition issues for manufacturers that end MY2000 with debits
in the NTR. (If a manufacturer ends MY2000 with credits in the NTR,
these credits would be subject to the usual discounting (rather than to
the special provisions for early reduction credits) and then could be
applied either in the ASTR or the NTR. Section 86.1710(d)(2)
specifically addresses this situation. If a manufacturer ends MY2000
with debits in the NTR, it can make up those debits only with NTR
credits. This is necessary to ensure that the NTR gets the intended
environmental benefits from starting the program in the NTR two years
before it starts in the rest of the country. A manufacturer than ends
MY2000 with debits in the NTR must calculate its fleet average NMOG
value in the NTR for MY2001. If the manufacturer does not have any
credits in the NTR in MY2001 (and it does not obtain NTR credits from
another manufacturer), then it will be subject to an enforcement action
for the MY2000 debits. If the manufacturer has credits in MY2001 in the
NTR, these must be applied to offset its MY2000 NTR debits. If the
MY2000 debits exceed the MY2001 credits, then the manufacturer would be
subject to an enforcement action for the remaining MY2000 debits. In
addition to calculating fleet average NMOG values for the NTR, the
manufacturer must also calculate fleet average NMOG values for the
ASTR. After calculating the level of debits or credits in the ASTR, the
level must be adjusted by deducting all
[[Page 958]]
credits used to offset MY2000 debits in the NTR.
The National LEV program will allow a manufacturer to demonstrate
compliance with the fleet average NMOG standards using actual
production data in lieu of actual sales data if the manufacturer is
demonstrating compliance with the fleet average NMOG standards in the
ASTR. A manufacturer will need to petition EPA to allow production
volume to be used in lieu of actual sales volume and would have to
submit the petition to EPA within 30 days after the end of the model
year. EPA will grant such a petition if the manufacturer establishes,
to the satisfaction of the Administrator, that production volume is
functionally equivalent to sales volume. Manufacturers will still have
to keep sales data in the NTR to demonstrate compliance with the ban on
the sale of Tier 1 and TLEV engine families in the NTR if such engine
families are not certified for sale in California for the same model
year, but such data would not be reported to EPA as part of a regular
report. EPA has previously allowed manufacturers to use production
volume in lieu of sales volume as part of the Tier 1 standards phase-
in.
F. Elimination of Five-Percent Cap on Sales of Tier 1 Vehicles and
TLEVs in the OTR
EPA's Final Framework Rule codified the OTC States' and
manufacturers' recommendation that National LEV include provisions
limiting the sale of Tier 1 vehicles and TLEVs in the NTR after MY2000.
The first provision is that manufacturers may sell in the NTR Tier 1
vehicles and TLEVs only if the same or similar engine families are
certified and offered for sale in California as Tier 1 vehicles and
TLEVs. This provision is being retained in the National LEV program.
The second provision is a five-percent cap on sales of Tier 1 vehicles
and TLEVs in the NTR starting in MY2001, which allows all manufacturers
to sell Tier 1 vehicles and TLEVs in the NTR to the extent permitted
under the first limitation as long as the overall Tier 1 vehicle and
TLEV fleet does not exceed five percent of the National LEV vehicles
sold in the NTR. EPA proposed to delete the five-percent cap provision
because of the change in the OTC States' legal obligation since this
provision was proposed and because of the additional administrative
burden it would entail if EPA were to adopt the proposal to have a
single trading region starting in MY2001. Furthermore, EPA believes the
five-percent cap would not provide any air quality benefit given the
expected fleet make-up after MY2000 and the other limitation on sales
of these vehicles in the NTR. See 62 FR 44781 (August 22, 1997).
EPA has decided to delete the five-percent cap provision from the
National LEV program. The court reversal of the requirement that all
OTC States adopt Section 177 Programs effective in MY1999 means there
is no longer a legal requirement that EPA find that National LEV is
equivalent to state Section 177 Programs throughout the OTR.
Additionally, the expected benefits in the OTR of National LEV as
compared to OTC State adopted Section 177 Programs has increased.
Therefore, there is no legal need and less practical need for a five-
percent cap to control NOX emissions.
EPA also believes the five percent cap is not necessary because it
expects manufacturers will not introduce significant numbers of Tier 1
vehicles and TLEVs after MY2000 in the national, let alone the
Northeast, market. This means that National LEV will not have a
NOX penalty when compared to OTC State adopted Section 177
Programs. A National LEV fleet, made up primarily of LEV vehicles, will
have similar effects on NOX emissions when compared to a CAL
LEV fleet consisting primarily of LEV and ULEV vehicles since both
types of vehicles have the same NOX emission standards. The
provision limiting manufacturers' sale in the NTR of Tier 1 vehicles
and TLEVs based on Calfornia certification also provides additional
assurance. A staff report on SFTP revisions issued by the California
Air Resources Board offers further support for EPA's decision to drop
the five percent cap requirement. In this report, CARB states that
their cost estimates assume that the entire California new motor
vehicle fleet will be certified to LEV or more stringent standards by
MY 2001, although they note that ``in actuality, staff estimates that
something less than five percent of new motor vehicles will be
certified to the Tier 1 and TLEV emission standards by the 2001 model
year'' due to the stringency of the fleet average NMOG standard in
California.56 For all these reasons, EPA believes that any
sales of Tier 1 vehicles and TLEVs in the NTR after MY2000 will make up
less than five percent of the fleet in any instance, and does not
believe having a separate requirement to ensure such sales limits is
needed.
---------------------------------------------------------------------------
\56\ Staff Report: Public Hearing to Consider Adoption of New
Certification Tests and Standards to Control Exhaust Emissions from
Aggressive Driving and Air-Conditioner Usage for Passenger Cars,
Light-Duty Trucks, and Medium-Duty Vehicles under 8501 Pounds Gross
Vehicle Weight Rating. State of California, California Environmental
Protection Agency, Air Resources Board, July, 1997.
---------------------------------------------------------------------------
Finally, even if there were some benefit to the NTR from a five-
percent cap, EPA believes the benefit would be so minimal that it would
not justify the administrative burden given the single trading region
that applies after MY2000. Requiring compliance demonstrations with the
five-percent cap would negate any administrative savings associated
with the All State Trading Region for 2001 and later model years and
the provision allowing manufacturers to demonstrate compliance through
production data. Moreover, retention of the five-percent cap would not
provide any additional assurance that National LEV will continue to
provide a quantity of emissions reductions at least equivalent to the
quantity that would be provided by OTC State Section 177 Programs as
demonstrated through EPA's periodic equivalency determination. The
mobile source emissions model used in the original equivalency
determination, including fleet make-up in the OTR, will be used as part
of the equivalency determination, unless all parties agree to use an
updated modeling methodology. Modifications made to the model in the
course of a periodic equivalency determination would take into account
changes in EPA's rules and regulations and implementation of such rules
and regulations, not changes in the emissions inventory assumptions
used in the original equivalency determination.
G. Technical Corrections to Final Framework Rule
The Agency is also making several minor technical corrections to
the National LEV regulations issued in the Final Framework Rule. A June
24, 1997 letter from the American Automobile Manufacturers Association
(AAMA) and Association of International Automobile Manufacturers (AIAM)
(available in the public docket for review) suggests a number of
technical corrections to the regulations EPA promulgated on June 6,
1997. The corrections detailed by AAMA/AIAM have been reviewed by EPA
and incorporated in today's rule to the extent that they are necessary
and appropriate. In addition, a number of changes must be made to
reflect the start of the program in MY1999, rather than MY1997, which
was used as a placeholder in the Final Framework Rule. These revisions
are detailed in the Response to Comments document for today's Final
Rule.
In the Final Framework Rule, EPA required manufacturers to track
vehicles
[[Page 959]]
to the ``point of first sale'' for purposes of determining compliance
with fleet average NMOG standards (62 FR 31212, June 6, 1997). EPA
defined ``point of first sale'' as ``the location where the completed
LDV or LDT is purchased'' and it ``may be a retail customer, dealer, or
secondary manufacturer.'' See 40 CFR 86.1702-97(b). EPA recognized that
requiring manufacturers to always track vehicle sales to the ultimate
purchaser would add an additional burden on manufacturers without
having any significant effect on air quality.
Requiring manufacturers to track vehicles to the point of first
sale was intended to impose similar requirements on manufacturers as
those associated with EPA's Tier 1 standard phase-in compliance
requirements found in 40 CFR 86.094-8 and 86.094-9. In the Tier 1
program, manufacturers could demonstrate compliance ``based on total
actual U.S. sales of light-duty vehicles of the applicable model year
by a manufacturer to a dealer, distributor, fleet operator, broker, or
any other entity which comprises the point of first sale.'' See 40 CFR
86.094-8(a)(1)(i)(B)(1)(i). EPA believes the National LEV vehicle sales
tracking requirements operate in the same manner as those found in the
Tier 1 regulations, but the auto manufacturers have notified EPA of
their concern that National LEV imposes different requirements.
(Document available in docket A-95-26.)
To eliminate confusion about the required level of vehicle tracking
necessary to demonstrate compliance with National LEV fleet average
NMOG standards, today's final rule modifies the definition of ``point
of first sale'' in the National LEV program such that it is equivalent
to the ``point of first sale'' language found in the Tier 1
regulations. EPA did not intend to limit ``point of first sale''
entities to those specifically listed in the National LEV regulations.
EPA also does not intend to limit a manufacturer to tracking vehicles
only to the point of first sale if a manufacturer decides further
tracking gives it a more accurate account of vehicle sales in the
different trading regions or if a manufacturer's current vehicle
tracking system is set up to track vehicles beyond the point of first
sale. However, as noted in the Final Framework Rule, EPA does not
believe this additional level of tracking vehicles is necessary.
H. Clarifications to Final Framework Rule
Based on comments and other letters submitted by the auto
manufacturers, EPA believes that some provisions and discussions in the
Final Framework Rule and preamble could cause confusion. Thus, EPA is
taking the opportunity here to clarify a few issues addressed in the
Final Framework Rule.
1. Operation of National LEV Vehicles on In-Use Fuels
In the Final Framework Rule EPA reiterated a set of three
principles originally presented in the October 10, 1995 NPRM. These
principles, agreed upon by representatives of the auto industry, some
segments of the oil industry, and the OTC States, stated:
(1) Adoption of the National LEV program does not impose unique
gasoline requirements on any state. Gasoline specified for use by any
state will have the same effect on the National LEV program as on the
OTC LEV program.
(2) Testing is needed to evaluate the effects of non-California
gasoline on emissions control systems.
(3) If testing results show a significant effect, EPA will conduct
a multi-party process to resolve the issue without adversely affecting
SIP credits or actual emission reductions when compared to OTC LEV
using fuels available in the OTR or imposing obligations on
manufacturers different from the obligations they would have had under
OTC LEV.
The Agency continues to hold to these principles, but at the
request of some members of the auto industry EPA will clarify some
related statements made in the Final Framework Rule. As noted in the
Final Framework Rule, EPA anticipates that auto manufacturers will take
advantage of the option to certify vehicles under the National LEV
program using California Phase II reformulated gasoline (62 FR 31219,
June 6, 1997). Consequently, vehicles will be designed by auto
manufacturers to achieve the applicable emission standards using fuel
meeting the California specifications. Under the National LEV Program,
vehicles in actual use will be using the range of fuels commercially
available across the country. In the preamble to the final regulations,
EPA stated that ``section 86.1705-97(g)(5) [renumbered as 86.1701(d) in
today's rule] requires auto manufacturers to design National LEV
vehicles to operate on fuels that are otherwise required under
applicable federal regulations.'' In this context, the use of the word
``operate'' refers to the overall performance of the vehicle, such as
starting, acceleration, etc. It is not intended to convey that a
gasoline-powered vehicle using commercially available fuel outside
California would necessarily achieve the same emissions performance as
it would using the relatively cleaner fuel required in California.
Nonetheless, the emission reductions potentially realized by the
National LEV program remain significant relative to the alternative of
a fleet of Tier 1 vehicles operating on the same commercially-available
fuels.57 To clarify another provision, 40 CFR 86.1701(d)
does not require manufacturers to design methanol, ethanol, electric,
compressed natural gas, or propane vehicles to operate on gasoline or
any alternative fuel other than the type (methanol, ethanol,
electricity, etc.) of fuel for which it was designed.
---------------------------------------------------------------------------
\57\ The auto and oil industries are currently conducting
studies designed to quantify the emissions performance of LEV-type
vehicles when operated on gasoline with varius levels of sulfur. The
data tabulation and associated analyses for these studies are not
yet completed.
---------------------------------------------------------------------------
2. Clarification of Banking and Trading Provisions
In the Final Framework Rule, EPA included a limitation on the
nature of the emissions credits recognized under the National LEV
program. (See 40 CFR 86.1710(c)(10).) In the preamble, EPA stated that,
as with other emission credits or allowances recognized under the Act,
any emissions credits generated under the National LEV program are not
the holder's property, but instead are a limited authorization to emit
the designated amount of emissions. Consequently, nothing in the
National LEV regulations or any other provision of law should be
construed to limit EPA's authority to terminate or limit this
authorization through a rulemaking. In their comments, manufacturers
expressed their concern that this provision might affect the status of
the National LEV averaging, banking and trading provisions as a Core
Stable Standard, which, if EPA made certain changes to those
provisions, would allow the manufacturers to opt out of the National
LEV program.
The limitation at issue is a standard provision for EPA emissions
trading programs. EPA believes it is important to make it clear that
while emissions credits can be generated, banked, bought and sold
pursuant to regulatory authorization, they do not constitute property.
Rather, they are only a limited authorization to emit a designated
amount of emissions. In establishing a credit trading system, EPA is
providing an alternative means of compliance with statutory or
regulatory limits on emissions. In authorizing the generation and use
of emissions credits, EPA has in no way given up its regulatory
authority to limit emissions further by modifying either the underlying
regulatory
[[Page 960]]
emission limitations or the way they may be achieved through generation
or use of emissions credits. As a consequence, if EPA were to modify
the provisions relating to emissions credits under National LEV, the
Agency would not be subject to challenge on the grounds that its action
was a taking of private property protected under the Fifth Amendment to
the U.S. Constitution.
However, the limits on the nature of emissions credits included in
the Final Framework Rule are not intended to affect the opt-out
provisions of the National LEV program. If EPA modified any of the
National LEV banking and trading provisions in a manner that triggered
an offramp based on a change to a Stable Standard, the manufacturers
would be able to opt out of National LEV. In stating the limited nature
of emissions credits, EPA only intended to preserve its regulatory
authority to make regulatory changes affecting such credits, in the
unlikely event that EPA decided such changes were appropriate. Section
86.1710(c)(10) does not nullify either the designation of the banking
and trading provisions as a Core Stable Standard or the manufacturers'
ability to opt out if EPA changes them over a manufacturer objection.
Nevertheless, to clarify further its intent, EPA is adding the
following language to the end of 40 CFR 86.1710(c)(10): ``If EPA were
to terminate or limit the authorization to emit associated with
emissions credits generated under the provisions of this section, this
paragraph (c)(10) would have no effect on manufacturers' ability to opt
out of the National LEV program pursuant to Sec. 86.1707.''
3. Recordkeeping Requirements
Under the final National LEV regulations, EPA may void certificates
ab initio only for a manufacturer's failure to retain records or
provide such information as specified upon request. EPA will enforce
most of the other National LEV requirements through conditioning the
certificate and identifying individual noncomplying vehicles in the
event of a violation.
EPA has determined that the authority to void certificates ab
initio for major record-keeping and reporting violations is an
important enforcement mechanism for programs in which compliance must
be demonstrated using data held by manufacturers. For many flexible
compliance schemes, such as averaging, banking and trading approaches
or phase-ins of requirements, the absence of records and reports on how
the regulated entities complied could preclude EPA from enforcing the
underlying substantive requirements. For example, EPA could never prove
that a particular vehicle violates a fleet average or a phase-in by
testing that vehicle; enforcement of a fleet average or a phase-in
depends on accurate records for the entire fleet. Thus, in return for
giving regulated parties some flexibility in meeting the requirements,
EPA must have a mechanism to ensure that the manufacturers keep the
records and make the reports necessary to verify compliance.
In their comments, the manufacturers expressed concerns about EPA's
authority to void ab initio certificates for recordkeeping or reporting
violations. As discussed above, EPA believes that this enforcement
mechanism is an important tool to ensure compliance with the provisions
of the National LEV program such as averaging, banking, and trading of
fleet average NMOG credits and debits. However, EPA does not intend to
use this authority for every recordkeeping or reporting violation which
might occur under the National LEV regulations. Most violations will
likely be minor, such as submitting late reports or not providing all
of the required information, and would be considered violations of
section 203(a)(1) of the Act, subjecting the manufacturer to applicable
civil penalties. EPA would only void a certificate ab initio for the
most egregious record-keeping and reporting violations, where a
manufacturer's records or reporting are so substantially incomplete
that EPA cannot determine compliance with the fleet average NMOG
standard or other substantive requirements. EPA regulations currently
provide for voiding certificates ab initio for record-keeping and
reporting violations for several motor vehicle requirements with some
compliance flexibility. (See e.g., Tier 1 (40 CFR 86.094-23), and
evaporative emissions (40 CFR 86.096-23)). Both precedent and practical
enforcement concerns support providing this strong penalty as a
critical means to ensure the enforceability of underlying substantive
requirements.
IX. Supplemental Federal Test Procedures
A. Background
The Federal Test Procedure (FTP) is the vehicle test procedure
historically used by EPA and the California Air Resources Board (CARB)
to determine the compliance of light-duty vehicles and light-duty
trucks with the conventional or ``on-cycle'' exhaust emission
standards. Using the FTP, emissions performance is tested while the
vehicle is driven over a ``typical'' driving schedule (a pattern of
acceleration and deceleration over a given period of time), using a
dynamometer to simulate the vehicle-to-road interface. Pursuant to the
requirements of section 206(h) of the CAA, EPA has promulgated
revisions to the Federal Test Procedure to make the test procedure
better represent the manner in which vehicles are actually driven (61
FR 54852, October 22, 1996). These revisions added the Supplemental
Federal Test Procedure (SFTP) with accompanying emission standards. The
SFTP emission standards promulgated by EPA are appropriate for vehicles
meeting EPA's Tier 1 emission standards. EPA did not propose LEV-
stringency standards as part of its FTP revisions. In addition, the
earlier National LEV final rulemaking (62 FR 31192, June 6, 1997) did
not include LEV-stringency standards for the SFTP test procedure.
EPA and CARB coordinated closely their review of the FTP, their
research efforts, and the development of their respective off-cycle
policies. On April 23, 1997, CARB published a proposal detailing their
approach to addressing off-cycle emissions in the State of
California.\58\ Following a comment period that remained open through
May 6, 1997, CARB released a notice of public hearing accompanied by a
staff report regarding its proposed adoption of SFTP test procedures
and standards (``Staff Report'').\59\ The CARB proposal had four basic
elements to it: test procedures, emission standards for LEVs and ULEVs,
emission standards for Tier 1 vehicles and TLEVs, and a phase-in
schedule. CARB adopted SFTP requirements largely consistent with their
proposal at a public hearing on July 24, 1997, then subsequently
released a Notice of Public Availability of Modified Text for a 15 day
comment period on September 5, 1997 (``15-day Notice'').\60\
---------------------------------------------------------------------------
\58\ Draft Regulatory Measure to Control Emissions During Non-
Federal Test Procedure Driving Conditions From Passenger Cars,
Light-Duty Trucks and Medium-Duty Vehicles Under 8,500 Pounds Gross
Vehicle Weight Rating, Mail-Out #MSC 97-06, April 23, 1997.
Available in the public docket for review, and also at http://
arbis.arb.ca.gov/msprog/macmail/macmail.htm.
\59\ Notice of Public Hearing to Consider Adoption of New
Certification Tests and Standards to Control Emissions from
Aggressive Driving and Air-Conditioner Usage for Passenger Cars,
Light-Duty Trucks, and Medium-Duty Vehicles Under 8,501 Pounds Gross
Vehicles Weight Rating, Mail Out #97-13, May 27, 1997. Available in
the public docket for review, and also at http://arbis.arb.ca.gov/
msprog/macmail/macmail.htm#msc9713.
\60\ Notice of Public Availability of Modified Text: Public
Hearing to Consider Adoption of New Certification Tests and
Standards to Control Emissions from Aggressive Driving and Air-
Conditioner Usage for Passenger Cars, Light-Duty Trucks, and Medium-
Duty Vehicles under 8,501 Pounds Gross Vehicle Weight Rating, Mail-
Out # MSC 97-17, September 5, 1997. Available in the public docket
for review, and also at http:///www.arb.ca.gov/msprog/macmail/
macmail.htm.
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[[Page 961]]
EPA stated in the National LEV Final Framework Rule its intent to
harmonize the SFTP requirements of the National LEV program with
California, and proposed to do so in the SNPRM once California
completed the adoption of such requirements under its LEV program. As
CARB has completed the adoption of SFTP requirements into its LEV
program, today's rule harmonizes the CARB and National LEV SFTP
programs.\61\ The following sections address this harmonization,
including changes made as a result of CARB's public hearing on July 24,
1997 and as published in their 15-day Notice, as well as those changes
resulting from public comments received on EPA's SNPRM. A more detailed
discussion of the SFTP standards and test procedures can be found in
the SNPRM (62 FR 44782, August 22, 1997).
---------------------------------------------------------------------------
\61\ Based on comments from AAMA/AIAM with which EPA agrees, a
practical result of making this change is that the list of Non-Core
Stable Standards in 40 CFR 86.1707(d) must be updated to reflect the
change in emphasis from the federal SFTP to the California SFTP.
Today's regulations thus incorporate the California SFTP as a Non-
Core Stable Standard.
---------------------------------------------------------------------------
B. Elements of the CARB Proposal and Applicability Under National LEV
1. Test Procedure
CARB adopted high speed, high acceleration, and air conditioner
supplemental test procedures that are in all respects identical to the
procedures adopted by EPA. In fact, CARB incorporated by reference the
federal regulations for SFTP test procedures. Therefore, as proposed in
the SNPRM, the SFTP test procedures for all vehicles covered by
National LEV are those currently contained in federal regulations (40
CFR 86.158, 86.159, 86.160, 86.161, 86.162, 86.163, and 86.164).
2. Emission Standards
California adopted two sets of emission standards, one applicable
to LEVs, ULEVs, and super ULEVs (SULEVs), and the other applicable to
Tier 1 vehicles and TLEVs. However, the only SULEVs in CARB's
regulations are in their Medium-Duty Vehicle category, a class of
vehicles not covered by the National LEV Program, and consequently not
covered in the following discussion of emission standards or in today's
regulations. In addition to the items discussed below, today's final
rule makes several changes to be consistent with changes announced at
CARB's hearing and published in their 15-day Notice. These include
revisions to the language regarding ``A/C-on Specific Calibrations''
found in the regulations in paragraphs 86.1708(e)(3) and 86.1709(e)(3),
and revisions to the ``Lean-On-Cruise'' Calibration Strategies language
found in paragraphs 86.1708(e)(4) and 86.1709(e)(4).
a. LEVs and ULEVs
For each of the affected vehicle weight categories, CARB adopted a
set of SFTP certification standards that applies to LEVs and ULEVs (see
Table 1). These standards apply only to gasoline, diesel, and fuel-
flexible vehicles while operating on gasoline or diesel fuel. These
standards apply at 4,000 miles, and in conjunction with the low-mileage
standards, CARB provides for no in-use vehicle compliance requirements
(recall testing) for SFTP standards. Today's rule adopts the standards
shown in Table 1 as the SFTP standards applicable to LEVs and ULEVs
covered under the National LEV Program. These standards apply to the
National LEV Program in the same manner as adopted by CARB, in that
they apply at 4,000 miles and there will be no in-use enforcement to
these SFTP standards for LEVs and ULEVs. For further information and
justification for this approach, see the SNPRM (62 FR 44783-44784,
August 22, 1997).
A commenter pointed out that the proposed regulations contained
incorrect SFTP standards for light-duty trucks from 3751 to 5750 pounds
loaded vehicle weight (the preamble to the proposed regulations
contained the correct standards). This error has been corrected in
today's final rule.
Table 1--US06 and SC03 4,000 Mile Certification Standards for LEVs and ULEVs
----------------------------------------------------------------------------------------------------------------
US06 (g/mi) SC03 (g/
--------------------------------------- mi)
Vehicle type Loaded vehicle weight (lbs.) ------------
NMHC+NOX CO NMHC+NOX CO
----------------------------------------------------------------------------------------------------------------
LDV....................... All............................. 0.14 8.0 0.20 2.7
LDT....................... 0-3,750......................... 0.14 8.0 0.20 2.7
3,751-5,750..................... 0.25 10.5 0.27 3.5
----------------------------------------------------------------------------------------------------------------
b. Tier 1 Vehicles and TLEVs
CARB's final SFTP standards for Tier 1 vehicles and TLEVs are
identical to those promulgated by EPA for Tier 1 vehicles. As under the
federal regulations, these standards apply at 50,000 and 100,000 miles,
and vehicles certifying to these standards face an in-use compliance
requirement. Additionally, CARB also maintains EPA's higher
NMHC+NOx standard for diesel vehicles, as well as EPA's
exemption of alternative fuel Tier 1 vehicles and TLEVs from compliance
with the SFTP standards. As proposed in the SNPRM, today's final rule
adopts CARB's treatment of Tier 1 vehicles and TLEVs.
3. Implementation Schedule
Today's final rule also adopts CARB's four year implementation
schedule for SFTP emission standards, which requires compliance of 100
percent of the fleet by MY2004. Beginning with a minimum of 25 percent
of the fleet in MY2001, the schedule then requires 50 and 85 percent in
MY2002 and MY2003, respectively. Although Tier 1 vehicles and TLEVs are
certified to standards of different stringency than LEVs and ULEVs,
CARB allows the number of vehicles from both groups to be combined for
the purpose of determining compliance with the phase-in schedule.
However, CARB ensures an adequate phase-in of LEVs and ULEVs complying
with the SFTP by requiring that the percentage of LEVs and ULEVs
meeting the SFTP requirements also meet the required phase-in schedule.
This means that meeting the phase-in percentage with the subset of the
fleet made up of LEVs and ULEVs will also meet the overall phase-in
requirement if a manufacturer has no Tier 1 vehicles or TLEVs. If a
manufacturer does have some Tier 1 or TLEV engine families, it would
have the choice of certifying some proportion of those vehicles to the
[[Page 962]]
SFTP standards or expending some effort phasing in additional LEV or
ULEV engine families in order to maintain compliance with the phase-in
requirements. Consistent with the SNPRM, today's rule adopts the same
SFTP implementation schedule finalized by CARB, including provisions
consistent with the methodology noted above.
To provide some additional flexibility, CARB uses a concept of
equivalent phase-in schedules, which are allowed in place of the
required phase-in schedule. This approach allows manufacturers to use
an alternative phase-in schedule providing that the alternative
measures up to the required schedule according to a set methodology.
The equivalent phase-in methodology calculates credits by weighting the
required phase-in percentages in each model year of the phase-in
schedule by the number of model years prior to and including the last
model year of the scheduled phase-in, then summing these credits over
the phase-in period. These ``credits'' are calculated for the required
phase-in schedule. In the case of the CARB SFTP phase-in, the required
``credits'' are: (25% * 4 years) + (50% * 3 years) + (85% * 2 years) +
(100% * 1 year) = 520. Any alternative phase-in that results in an
equal or larger cumulative total number of credits by the end of the
last model year of the scheduled phase-in is acceptable. This allows
manufacturers some additional flexibility while ensuring no loss in
overall emissions over the phase-in schedule. Additionally, using this
methodology, manufacturers can gain credits towards their phase-in
through early introductions of vehicles meeting the applicable
requirement even prior to the beginning of the required phase-in (e.g.,
10 percent compliance five years before full phase-in gains 50
``points'' towards the total required). Regardless of the number of
``points'' earned by a given alternative schedule, phase-in of 100%
must be achieved in the required final year of the phase-in. CARB made
one change to this element of the SFTP in the 15-day Notice, adding
language that requires manufacturers who choose to use an alternative
phase-in schedule to submit the schedule they intend to use ``before or
during calendar year 2001 for passenger cars and light-duty trucks and
calendar year 2003 for medium-duty vehicles.'' Today's rule adopts an
alternative phase-in schedule methodology consistent with the
methodology adopted by CARB, including the changes contained in the 15-
day Notice.
As proposed in the SNPRM, this alternative phase-in schedule will
be enforced much like the current enforcement provisions regarding non-
compliance with a phase-in schedule. Specifically, failure to attain
the required credits will be regarded as a failure to satisfy the
conditions on which the certificate was issued. Vehicles sold in
violation of that condition will not be covered by the certificate and
hence will be subject to the currently available penalties. Today's
regulations contain appropriate revisions to 40 CFR 86.096-30 to
implement this approach.
4. Implementation Compliance
To determine manufacturer compliance with the SFTP phase-in levels
under the National LEV program, EPA proposed to give the manufacturers
the option of combining their entire fleet of light-duty vehicles and
light light-duty trucks such that this combined fleet meets the
applicable phase-in requirements. EPA also proposed to have
manufacturers demonstrate compliance with the phase-in requirements
based on vehicles sold outside California, but requested comment on
having compliance determinations based on vehicles sold only in
California or in all states.
As noted in the SNPRM, EPA supports allowing manufacturers to
combine light-duty vehicles and light-duty trucks into one fleet for
the purpose of the SFTP phase-in requirements. This approach is
consistent with CARB's implementation of the SFTP phase-in, and is the
approach contained in today's final rule. However, EPA noted in the
SNPRM some concerns with allowing manufacturers to show compliance with
National LEV SFTP requirements based on a manufacturer's California
fleet mix as opposed to its National LEV fleet mix. AAMA/AIAM commented
that manufacturers have already planned which products will be meeting
the early-term SFTP requirements in California, and that using national
sales volumes would cause changes in their phase-in plans without
adequate lead time, creating an undue burden. Based on this, as well as
on this commenter's definition of harmonization (``identical in every
aspect to the California requirements''), AAMA/AIAM expressed support
for the option of using California sales volumes to assess compliance
with the SFTP phase-in schedule.
EPA has decided to adopt language in today's rule that addresses
the concerns heard from the auto companies by basing the SFTP phase-in
compliance on vehicle sales in California. EPA understands the
implications of requiring a separate phase-in for vehicles outside
California, and agrees that the burden of requiring such a phase-in is
unnecessary. However, EPA is adding language to the SFTP phase-in under
National LEV to assure that SFTP vehicles are not underrepresented in
states outside of California. Given that the phase-in will be
demonstrated using California sales, unique cases could potentially
arise whereby the California version of a vehicle is certified to the
SFTP but the version distributed federally is not. Without some
protective language in the regulations, there would be no obligation or
requirement for the version marketed in the 49 states outside
California to comply with the SFTP, and although the phase-in would be
met in California, certainly the potential exists for the rest of the
country to fall unacceptably short of the phase-in percentage. To
protect against this type of scenario, yet to allow auto manufacturers
the flexibility of only having to demonstrate compliance with the
phase-in in California, EPA is adding the additional requirement that,
for every engine family certified to SFTP standards in California, the
``sibling'' of that vehicle certified under the National LEV program
outside California must also be certified to the SFTP standards.
Today's regulations define the relationship between California and
federal ``sibling'' vehicles as vehicles of the same make and model,
and with the same number of cylinders, the same cylinder configuration,
the same cylinder volume, the same transmission class, and the same
axle ratio. However, the ability to use California sales to demonstrate
phase-in compliance applies only to those years of the phase-in with a
less than 100 percent compliance requirement (MY2001-2003). When
California is scheduled to achieve 100 percent compliance with the SFTP
in MY2004, the National LEV fleet must also have attained 100 percent
compliance in that model year.
X. Administrative Requirements
A. Administrative Designation
Under Executive Order 12866 (58 FR 51735), the Agency must
determine whether the regulatory action is ``significant'' and
therefore subject to OMB review and the requirements of the Executive
Order. The Order defines a ``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
[[Page 963]]
economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this rule is not a ``significant regulatory action''
because the regulations in this rule will not have annual impacts on
the economy that are likely to exceed $100 million. This rule, along
with the Final Framework Rule, sets forth the National LEV program
regulations. The Final Framework Rule was determined to be a
significant regulatory action. See 62 FR 31231 and the Regulatory
Impact Analysis. EPA has submitted this rule to OMB for review. Changes
made in response to OMB suggestions or recommendations will be
documented in the public record. EPA has updated the Regulatory Impact
Analysis (RIA) prepared for the Final Framework Rule. Changes reflect
the current program start dates, updated cost information, and other
changes to the emissions reduction modeling as discussed in Sec. IV.
B. Regulatory Flexibility
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this rule. EPA has also
determined that this rule will not have a significant economic impact
on a substantial number of small entities. Only manufacturers of motor
vehicles, a group which does not contain a substantial number of small
entities, will have to comply with the requirements of this rule.
C. Unfunded Mandates Reform Act
Under sections 202 and 205 of the Unfunded Mandates Reform Act of
1995 (UMRA), EPA generally must prepare a written statement to
accompany any proposed or final rule that includes a federal mandate
that may result in expenditures by state, local, or tribal governments
in the aggregate, or by the private sector, of $100 million or more in
any one year.
EPA has determined that the written statement requirements of
sections 202 and 205 of UMRA do not apply to today's rule, and thus do
not require EPA to conduct further analyses pursuant to those
requirements. National LEV is not a federal mandate because it does not
impose any enforceable duties and because it is a voluntary program.
Because National LEV would not impose a federal mandate on any party,
section 202 does not apply to this rule. Even if these unfunded
mandates provisions did apply to this rule, they are met by the
Regulatory Impact Analysis prepared pursuant to Executive Order 12866
and contained in the docket.
Section 203 requires EPA to establish a plan for informing and
advising any small governments that may be significantly or uniquely
impacted by the rule. EPA has not prepared such a plan because small
governments would not be significantly or uniquely impacted by the
rule.
D. Congressional Review of Agency Rulemaking
Under section 801(a)(1)(A) of the Administrative Procedure Act
(APA) as amended by the Small Business Regulatory Enforcement Reform
Act of 1996, EPA has submitted 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 General Accounting
Office prior to publication of the rule in today's Federal Register.
Today's rule is not a ``major rule'' as defined in section 804(2) of
the APA, as amended.
E. Reporting and Recordkeeping Requirements
The Office of Management and Budget (OMB) has approved the
information collection requirements contained in this rule under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0345.
The information collection would be conducted to support the
averaging, banking and trading provisions included in the National LEV
program. These averaging, banking and trading provisions would give
automobile manufacturers a measure of flexibility in meeting the fleet
average NMOG standards. EPA would use the reported data to calculate
credits and debits and otherwise ensure compliance with the applicable
production levels. When a manufacturer has opted into the voluntary
National LEV program, reporting would be mandatory as per the
regulations included in this rulemaking. This rulemaking would not
change the requirements regarding confidentiality claims for submitted
information, which are generally set out in 40 CFR part 2.
The information collection burden associated with this rule
(testing, record keeping and reporting requirements) is estimated to
average 241.3 hours annually for a typical manufacturer. It is expected
that approximately 25 manufacturers will provide an annual report to
EPA. However, the hours spent annually on information collection
activities by a given manufacturer depends upon manufacturer-specific
variables, such as the number of engine families, production changes,
emissions defects, and so forth.
Burden means the total time, effort, or financial resouces expended
by persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency. This estimate also includes the
time needed to: review instructions; develop, acquire, install, and
utilize technology and systems for the purposes of collecting,
validating, and verifying information, processing and maintaining
information, and disclosing and providing information; adjust the
existing ways to comply with any previously applicable instructions and
requirements; train personnel to be able to respond to a collection of
information; search data sources; complete and review the collection of
information; and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. EPA is
amending the table in 40 CFR Part 9 of currently approved ICR numbers
issued by OMB for various regulations to list the information
requirements contained in this rule.
Send comments on the Agency's need for this information, the
accuracy of the provided burden estimates, and any suggested methods
for minimizing respondent burden, including through the use of
automated collection techniques to the Director, OPPE Regulatory
Information Division; U.S. Environmental Protection Agency (2137); 401
M St., S.W., Washington, D.C. 20460; and to the Office of Information
and Regulatory Affairs, Office of Management and Budget, 725 17th St.,
N.W., Washington, D.C. 20503, marked ``Attention: Desk Officer for
EPA.'' Include the ICR number in any correspondence.
F. Effective Date
This rule is effective upon the date of publication. This expedited
effective
[[Page 964]]
date is necessary to provide effective final regulations to guide the
process for the OTC States and auto manufacturers to opt into the
National LEV program in time for the program to begin in model year
1999. Given their planning and production schedules, manufacturers have
informed EPA that the Agency must find National LEV in effect early in
the 1998 calendar year, at the latest, to allow them to comply with the
National LEV requirements for MY1999 vehicles. This requires that the
OTC States and the manufacturers complete the opt-in process as soon as
possible. While the timing for opt-ins is based on the signature date
of the rule, rather than its effective date, it would not be
appropriate for parties to have to make the decision to opt in to the
program before this rule becomes effective, and if the effective date
of these regulations were delayed until thirty days from publication,
depending upon the length of time between signature and publication, it
is possible that the deadline for OTC State opt-ins would occur before
the rule became effective. In addition, because National LEV is a
voluntary program, this rule, by itself, does not place a burden on any
party. Rather, it provides an opportunity for the OTC States and the
manufacturers to avail themselves of the benefits of the National LEV
program and voluntarily to become subject to its requirements. Finally,
in the SNPRM, EPA took comment on the timing for parties to opt into
National LEV, and none of the parties potentially affected by the rule
objected to this timing. Given the lack of burden on affected parties
and the need to make this rule effective upon publication, the Agency
finds good cause for expediting the effective date of the rule. EPA
believes that this is consistent with 5 U.S.C. 553(d) (1) and (3).
XI. Judicial Review
Under section 307(b)(1) of the Act, EPA hereby finds that these
regulations are of national applicability. Accordingly, judicial review
of this action is available only by filing of a petition for review in
the United States Court of Appeals for the District of Columbia Circuit
within 60 days of publication in the Federal Register. Under section
307(b)(2) of the Act, the requirements which are the subject of today's
rule may not be challenged later in judicial proceedings brought by EPA
to enforce these requirements. This rulemaking and any petitions for
review are subject to the provisions of section 307(d) of the Clean Air
Act.
XII. Statutory Authority
The promulgation of these regulations is authorized by sections
177, 202, 203, 204, 205, 206, 207, 208, 209 and 301 of the Clean Air
Act as amended by the Clean Air Act Amendments of 1990 (CAAA) (42
U.S.C. 7507, 7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, and
7601).
List of Subjects
40 CFR Part 9
Environmental protection, Reporting and recordkeeping requirements.
40 CFR Part 85
Confidential business information, Imports, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements, Research,
Warranties.
40 CFR Part 86
Administrative practice and procedure, Confidential Business
Information, Incorporation by reference, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements.
Dated: December 16, 1997.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, chapter I, title 40 of the
Code of Federal Regulations is amended as follows:
PART 9--[AMENDED]
1. The authority citation for part 9 continues to read as follows:
Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003,
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330,
1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,
1971-1975 Comp., p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g,
300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2,
300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542,
9601-9657, 11023, 11048.
2. The table in Sec. 9.1 is amended by adding the new entries in
numerical order under the indicated heading to read as follows:
Sec. 9.1 OMB approvals under the Paperwork Reduction Act.
* * * * *
------------------------------------------------------------------------
OMB control
40 CFR citation No.
------------------------------------------------------------------------
* * * * *
Control of Air Pollution From New and In-Use Motor Vehicles
and New and In-Use Motor Vehicle Engines: Certification
and Test Procedures:
* * * * *
86.1705................................................ 2060-0345
86.1707................................................ 2060-0345
86.1708................................................ 2060-0345
86.1709................................................ 2060-0345
86.1710................................................ 2060-0345
86.1712................................................ 2060-0345
86.1713................................................ 2060-0345
86.1714................................................ 2060-0345
86.1717................................................ 2060-0345
86.1721................................................ 2060-0345
86.1723................................................ 2060-0345
86.1724................................................ 2060-0345
86.1725................................................ 2060-0345
86.1726................................................ 2060-0345
86.1728................................................ 2060-0345
86.1734................................................ 2060-0345
86.1735................................................ 2060-0345
86.1770................................................ 2060-0345
86.1771................................................ 2060-0345
86.1776................................................ 2060-0345
86.1777................................................ 2060-0345
86.1778................................................ 2060-0345
* * * * *
------------------------------------------------------------------------
PART 85--CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES AND MOTOR
VEHICLE ENGINES
3. The authority citation for part 85 continues to read as follows:
Authority: 42 U.S.C. 7521, 7522, 7524, 7525, 7541, 7542, and
7601(a).
Subpart P--[Amended]
4. Section 85.1515 is amended by revising paragraph (c) to read as
follows:
Sec. 85.1515 Emission standards and test procedures applicable to
imported nonconforming motor vehicles and motor vehicle engines.
* * * * *
(c) Nonconforming motor vehicles or motor vehicle engines of
1994 OP model year and later conditionally imported pursuant to
Sec. 85.1505 or Sec. 85.1509 shall meet all of the emission
standards specified in 40 CFR part 86 for the model year in which
the motor vehicle or motor vehicle engine is modified. At the option
of the ICI, the nonconforming motor vehicle may comply with the
emissions standards in 40 CFR 86.1708-99 or 86.1709-99, as
applicable to a light-duty vehicle or light light-duty truck, in
lieu of the otherwise applicable emissions standards specified in 40
CFR part 86 for the model year in which the nonconforming motor
vehicle is modified. The provisions of 40 CFR 86.1710-99 do not
apply to imported nonconforming motor vehicles. The useful life
specified in 40 CFR part 86 for the model year in which the motor
vehicle or motor
[[Page 965]]
vehicle engine is modified is applicable where useful life is not
designated in this subpart.
* * * * *
PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR
VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION
AND TEST PROCEDURES
5. The authority citation for part 86 continues to read as follows:
Authority: 42 U.S.C. 7401-7671(q).
6. Section 86.1 is amended by revising the entry for ASTM E29-90 in
the table in paragraph (b)(1) and by revising the entry to the table in
paragraph (b)(4), to read as follows:
Sec. 86.1 Reference materials.
* * * * *
(b) * * *
(1) * * *
------------------------------------------------------------------------
Document number and name 40 CFR part 86 reference
------------------------------------------------------------------------
* * * * *
ASTM E29-90, Standard Practice for Using 86.609-84; 86.609-96; 86.609-
Significant Digits in Test Data to 97; 86.609-98; 86.1009-84;
Determine Conformance with Specifications. 86.1009-96; 86.1442;
86.1708-99; 86.1709-99;
86.1710-99; 86.1728-99
* * * * *
------------------------------------------------------------------------
(4) * * *
------------------------------------------------------------------------
Document no. and name 40 CFR part 86 reference
------------------------------------------------------------------------
* * * * *
California Regulatory Requirements 86.612-97; 86.1012-97;
Applicable to the National Low Emission 86.1702-99; 86.1708-99;
Vehicle Program, October, 1996. 86.1709-99; 86.1717-99;
86.1735-99; 86.1771-99;
86.1775-99; 86.1776-99;
86.1777-99; Appendix XVI;
Appendix XVII.
* * * * *
------------------------------------------------------------------------
Subpart A--[Amended]
7. Section 86.096-30 is amended by reserving paragraph (a)(22) and
by adding paragraphs (a)(23) and (a)(24), to read as follows:
Sec. 86.096-30 Certification.
* * * * *
(a) * * *
(22) [Reserved]
(23)(i) The Administrator will issue a National LEV certificate of
conformity for 1999 model year vehicles or engines certified to comply
with the California TLEV, LEV, or ULEV emission standards.
(ii) This certificate of conformity shall be granted after the
Administrator has received and reviewed the California Executive Order
a manufacturer has received for the same vehicles or engines.
(iii) Vehicles or engines receiving a certificate of conformity
under the provisions in this paragraph can only be sold in the states
included in the NTR, as defined in Sec. 86.1702, and those states where
the sale of California-certified vehicles is otherwise authorized.
(24)(i) The Administrator will issue a National LEV certificate of
conformity for 2000 model year vehicles or engines certified to comply
with the California TLEV emission standards.
(ii) This certificate of conformity shall be granted after the
Administrator has received and reviewed the California Executive Order
a manufacturer has received for the same vehicles or engines.
(iii) Vehicles or engines receiving a certificate of conformity
under the provisions in this paragraph can only be sold in the states
included in the NTR, as defined in Sec. 86.1702, and those states where
the sale of California-certified vehicles is otherwise authorized.
* * * * *
Sec. 86.097-1 [Redesignated as Sec. 86.099-1]
8. Section 86.097-1 is redesignated as Sec. 86.099-1 and revised to
read as follows:
Sec. 86.099-1 General applicability.
Section 86.099-1 includes text that specifies requirements that
differ from those specified in Sec. 86.094-1. Where a paragraph in
Sec. 86.094-1 is identical and applicable to Sec. 86.099-1, this may be
indicated by specifying the corresponding paragraph and the statement
``[Reserved]. For guidance see Sec. 86.094-1.''.
(a) through (b) [Reserved]. For guidance see Sec. 86.094-1.
(c) National Low Emission Vehicle Program for light-duty vehicles
and light light-duty trucks. A manufacturer may elect to certify 1999
and later model year light-duty vehicles and light light-duty trucks to
the provisions of the National Low Emission Vehicle Program contained
in subpart R of this part. Subpart R of this part is applicable only to
those manufacturers that opt into the National Low Emission Vehicle
Program, under the provisions of that subpart, and that have not
exercised a valid opt-out from the National Low Emission Vehicle
Program, which opt-out has gone into effect under the provisions of
Sec. 86.1707. All provisions of this subpart are applicable to vehicles
certified pursuant to subpart R of this part, except as specifically
noted in subpart R of this part.
(d) [Reserved]
(e) through (f) [Reserved]. For guidance see Sec. 86.094-1.
Subpart B--[Amended]
9. Section 86.101 is amended by revising paragraph (c) to read as
follows:
Sec. 86.101 General applicability.
* * * * *
(c) National Low Emission Vehicle Program for light-duty vehicles
and light light-duty trucks. A manufacturer may elect to certify 1999
and later model year light-duty vehicles and light light-duty trucks to
the provisions of the National Low Emission Vehicle Program contained
in subpart R of this part. Subpart R of this part is applicable only to
those manufacturers that opt into the National Low Emission Vehicle
Program, under the provisions of subpart R of this part, and that have
not exercised a valid opt-out from the National Low Emission Vehicle
Program, which opt-out has gone into effect under the provisions of
Sec. 86.1707. All provisions of this subpart are applicable to vehicles
certified pursuant to subpart R of this part, except as specifically
noted in subpart R of this part.
Subpart R--[Amended]
10. The table of contents to subpart R is revised to read as
follows:
Subpart R--General Provisions for the Voluntary National Low
Emission Vehicle Program for Light-Duty Vehicles and Light-Duty
Trucks
Sec.
86.1701-99 General applicability.
86.1702-99 Definitions.
86.1703-99 Abbreviations.
86.1704-99 Section numbering; construction.
86.1705-99 General provisions; opt-in.
86.1706-99 National LEV program in effect.
86.1707-99 General provisions; opt-outs.
86.1708-99 Exhaust emission standards for 1999 and later light-duty
vehicles.
86.1709-99 Exhaust emission standards for 1999 and later light
light-duty trucks.
86.1710-99 Fleet average non-methane organic gas exhaust emission
standards for light-duty vehicles and light light-duty trucks.
86.1711-99 Limitations on sale of Tier 1 vehicles and TLEVs.
86.1712-99 Maintenance of records; submittal of information.
[[Page 967]]
86.1713-99 Light-duty exhaust durability programs.
86.1714-99 Small-volume manufacturers certification procedures.
86.1715-99 [Reserved]
86.1716-99 Prohibition of defeat devices.
86.1717-99 Emission control diagnostic system for 1999 and later
light-duty vehicles and light-duty trucks.
86.1718-99 through 86.1720-99 [Reserved]
86.1721-99 Application for certification.
86.1722-99 [Reserved]
86.1723-99 Required data.
86.1724-99 Test vehicles and engines.
86.1725-99 Maintenance.
86.1726-99 Mileage and service accumulation; emission measurements.
86.1727-99 [Reserved]
86.1728-99 Compliance with emission standards.
86.1729-99 through 86.1733-99 [Reserved]
86.1734-99 Alternative procedure for notification of additions and
changes.
86.1735-99 Labeling.
86.1736-99 through 86.1769-99 [Reserved]
86.1770-99 All-Electric Range Test requirements.
86.1771-99 Fuel specifications.
86.1772-99 Road load power, test weight, and inertia weight class
determination.
86.1773-99 Test sequence; general requirements.
86.1774-99 Vehicle preconditioning.
86.1775-99 Exhaust sample analysis.
86.1776-99 Records required.
86.1777-99 Calculations; exhaust emissions.
86.1778-99 Calculations; particulate emissions.
86.1779-99 General enforcement provisions.
86.1780-99 Prohibited acts.
Sec. 86.1701-97 [Redesignated as Sec. 86.1701-99 and Amended]
11. Section 86.1701-97 is redesignated as Sec. 86.1701-99 and
amended by revising paragraphs (a) and (c) and by adding paragraph (d),
to read as follows:
Sec. 86.1701-99 General applicability.
(a) The provisions of this subpart may be adopted by vehicle
manufacturers pursuant to the provisions specified in Sec. 86.1705. The
provisions of this subpart are generally applicable to 1999 and later
model year light-duty vehicles and light light-duty trucks to be sold
in the Northeast Trading Region, and 2001 and later model year light-
duty vehicles and light light-duty trucks to be sold in the United
States. In cases where a provision applies only to certain vehicles
based on model year, vehicle class, motor fuel, engine type, vehicle
emission category, intended sales destination, or other distinguishing
characteristics, such limited applicability is cited in the appropriate
section or paragraph. The provisions of this subpart shall be referred
to as the ``National Low Emission Vehicle Program'' or ``National LEV''
or ``NLEV.''
* * * * *
(c) The requirements of this subpart apply to new vehicles
manufactured by covered manufacturers through model year 2003. In
addition, the requirements of this subpart apply to new vehicles
manufactured by covered manufacturers for model years prior to the
first model year for which a mandatory federal exhaust emissions
program for light-duty vehicles and light light-duty trucks is at least
as stringent as the National LEV program with respect to NMOG,
NOX, and CO exhaust emissions, as determined by the
Administrator, provided that such a program is promulgated no later
than December 15, 2000, and is effective no later than model year 2006.
(d) Adoption of the National LEV program does not impose gasoline
or other in-use fuel requirements and is not intended to require any
new federal or state regulation of fuels. Vehicles under National LEV
will be able to operate on any fuels, including conventional gasoline,
that, in the absence of the National LEV program, could be sold under
federal or state law.
Sec. 86.1702-97 [Redesignated as Sec. 86.1702-99 and Amended]
12. Section 86.1702-97 is redesignated as Sec. 86.1702-99 and
amended in paragraph (b) by revising the definitions for ``Averaging
sets,'' ``Core Stable Standards,'' ``Non-Core Stable Standards,''
``Northeast Trading Region,'' and ``Point of first sale'' and by adding
new definitions in alphabetical order for ``All States Trading
Region,'' ``Axle Ratio,'' ``Covered state,'' ``Existing ZEV Mandate,''
``Ozone Transport Commission States,'' ``Section 177 Program,'' and
``ZEV Mandate,'' to read as follows:
Sec. 86.1702-99 Definitions.
* * * * *
(b) * * *
* * * * *
All States Trading Region (ASTR) means the region comprised of all
states except the OTC States that have not opted into National LEV
pursuant to the opt-in provisions at Sec. 86.1705 or that have opted
out of National LEV and whose opt-outs have become effective, as
provided at Sec. 86.1707; California; and any state outside the OTR
with a Section 177 Program in effect that does not allow National LEV
as a compliance alternative.
* * * * *
Averaging sets are the categories of LDVs and LDTs for which the
manufacturer calculates a fleet average NMOG value. The four averaging
sets for fleet average NMOG value calculation purposes are:
(1) Class A delivered to a point of first sale in the Northeast
Trading Region;
(2) Class A delivered to a point of first sale in the All States
Trading Region;
(3) Class B delivered to a point of first sale in the Northeast
Trading Region;
(4) Class B delivered to a point of first sale in the All States
Trading Region.
* * * * *
Axle ratio means the number of times the input shaft to the
differential (or equivalent) turns for each turn of the drive wheels.
* * * * *
Core Stable Standards means the standards and other requirements
listed in Sec. 86.1707(d)(9)(i) (A) through (F).
* * * * *
Covered state means a state that meets the conditions specified
under Sec. 86.1705(d).
* * * * *
Existing ZEV Mandate means any state regulation or other law that
imposes (or purports to impose) obligations on auto manufacturers to
produce, deliver for sale, or sell a certain number or percentage of
ZEVs and that was adopted prior to December 16, 1997.
* * * * *
Non-Core Stable Standards means the standards and other
requirements listed in Sec. 86.1707(d)(9)(i) (G) through (L).
* * * * *
Northeast Trading Region (NTR) means the region comprised of the
states that meet the conditions specified under Sec. 86.1705(d).
* * * * *
Ozone Transport Commission States or OTC States means the States of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia,
and the District of Columbia.
* * * * *
Point of first sale is the location where the completed light-duty
vehicle or light-duty truck is purchased, also known as the final
product purchase location. The point of first sale may be a retail
customer, dealer, distributor, fleet operator, broker, secondary
manufacturer, or any other entity which comprises the point of first
sale. In cases where the end user purchases the completed vehicle
directly from the
[[Page 967]]
manufacturer, the end user is the point of first sale.
* * * * *
Section 177 Program means state regulations or other laws, except
ZEV Mandates, that apply to any of the following categories of motor
vehicles: passenger cars, light-duty trucks up through 6,000 pounds
GVWR, and medium-duty vehicles from 6,001 to 14,000 pounds GVWR if
designed to operate on gasoline, as these categories of motor vehicles
are defined in the California Code of Regulations, Title 13, Division
3, Chapter 1, Article 1, Section 1900.
* * * * *
ZEV Mandate means any state regulation or other law that imposes
(or purports to impose) obligations on auto manufacturers to produce,
deliver for sale, or sell a certain number or percentage of ZEVs.
Sec. 86.1703-97 [Redesignated as Sec. 86.1703-99 and Amended]
13. Section 86.1703-97 is redesignated as Sec. 86.1703-99 and
amended in paragraph (b) by adding ``ASTR'' and ``OTC'' as new
abbreviations in alphabetical order, to read as follows:
Sec. 86.1703-99 Abbreviations.
* * * * *
(b) * * *
* * * * *
ASTR--All States Trading Region
* * * * *
OTC--Ozone Transport Commission
* * * * *
Sec. 86.1704-97 [Redesignated as Sec. 87.1704-99 and Amended]
14. Section 86.1704-97 is redesignated as Sec. 86.1704-99.
Sec. 86.1705-97 [Redesignated as Sec. 86.1705-99 and Amended]
15. Section 86.1705-97 is redesignated as Sec. 86.1705-99 and
amended by revising the heading of the section, by revising paragraphs
(a) introductory text, (a)(2), (a)(3), and (b) through (g), to read as
follows:
Sec. 86.1705-99 General provisions; opt-in.
(a) Covered manufacturers. Covered manufacturers must comply with
the provisions in this subpart, and in addition, must comply with the
requirements of 40 CFR parts 85 and 86. A manufacturer shall be a
covered manufacturer if:
* * * * *
(2) Where a manufacturer has included a condition on opt-in
provided for in paragraph (c)(2) of this section, that condition has
been satisfied; and
(3) The manufacturer has not opted out, pursuant to Sec. 86.1707,
or the manufacturer has opted out but that opt-out has not become
effective under Sec. 86.1707.
(b) Covered manufacturers must comply with the standards and
requirements specified in this subpart beginning in model year 1999. A
manufacturer not listed in Sec. 86.1706(c) that opts into the program
after EPA issues a finding pursuant to Sec. 86.1706(b) that the program
is in effect must comply with the standards and requirements of this
subpart beginning in the model year named for the calendar year after
the calendar year in which EPA receives the manufacturer's opt-in.
Light-duty vehicles and light light-duty trucks sold by covered
manufacturers must comply with the provisions of this subpart.
(c) Manufacturer opt-ins. (1) To opt into the National LEV program,
a motor vehicle manufacturer must submit a written opt-in notification
to the Administrator signed by a person or entity within the
corporation or business with authority to bind the corporation or
business to its election and holding the position of vice president for
environmental affairs or a position of comparable or greater authority.
The manufacturer shall send a copy of this notification to : Director,
Vehicles Programs and Compliance Division; U.S. Environmental
Protection Agency; 2565 Plymouth Road; Ann Arbor, Michigan, 48105. The
notification must unambiguously and unconditionally (apart from the
permissible conditions specified in paragraph (c)(2) of this section)
indicate the manufacturer's agreement to opt into the program and be
subject to the provisions in this subpart, and include the following
language:
XX COMPANY, its subsidiaries, successors and assigns hereby opts
into the voluntary National LEV program, as set forth in 40 CFR part
86, subpart R, and agrees to be legally bound by all of the
standards, requirements and other provisions of the National LEV
program. XX COMPANY commits not to challenge EPA's authority to
establish or enforce the National LEV program, and commits not to
seek to certify any vehicle except in compliance with the
regulations in subpart R.
(2) The opt-in notification may indicate that the manufacturer opts
into the program subject to either or both of the following conditions:
(i) That the Administrator finds under Sec. 86.1706 that the
National LEV program is in effect, to be indicated with the following
language:
This opt-in is subject to the condition that the Administrator
make a finding pursuant to 40 CFR 86.1706 that the National LEV
program is in effect.
(ii) That certain states (limited to the OTC States) and/or motor
vehicle manufacturers opt into National LEV pursuant to Sec. 86.1705,
to be indicated with the following language (language in brackets
indicates that either or both formulations are acceptable):
This opt-in is subject to the condition that [each of the states
of [list state names]/[and] each of the following manufacturers
[list manufacturer names]] opt into National LEV pursuant to 40 CFR
86.1705.
(3) A manufacturer shall be considered to have opted in upon the
Administrator's receipt of the opt-in notification and satisfaction of
the conditions set forth in paragraph (c)(2) of this section, if
applicable.
(d) Covered states. An OTC State shall be a covered state if:
(1) The state has opted into National LEV pursuant to paragraph (e)
of this section;
(2) Where a state has included a condition on opt-in provided for
in paragraph (e)(3)(viii) of this section, that condition has been
satisfied; and
(3) The state has not opted out, pursuant to Sec. 86.1707, or the
state has opted out but that opt-out has not become effective under
Sec. 86.1707.
(e) OTC State opt-ins. To opt into the National LEV program, a
state must submit an opt-in notification to the Administrator, with a
copy to Director, Vehicle Programs and Compliance Division; U.S.
Environmental Protection Agency; 2565 Plymouth Road; Ann Arbor,
Michigan, 48105. The notification must contain the following or
substantively identical language:
(1)(i) An Executive Order signed by the governor of the state (or
the mayor of the District of Columbia) that unambiguously and
unconditionally (apart from the permissible conditions set forth in
this section) indicates the state's agreement to opt into the National
LEV program and includes the following language (language in brackets
indicates that either formulation is acceptable):
This Executive Order [commits STATE to/opts STATE into] the
National Low Emission Vehicle (National LEV) program, in accordance
with the EPA National LEV program regulations at 40 CFR part 86,
subpart R.
I hereby direct HEAD OF APPROPRIATE STATE AGENCY to forward to
EPA with my concurrence the [enclosed letter signed/enclosed letter
and proposed regulations signed and proposed] by the HEAD OF
APPROPRIATE STATE AGENCY, which [specifies/specify] the details of
STATE's commitment to the National LEV program.
I hereby direct APPROPRIATE STATE AGENCY to follow the
procedures prescribed
[[Page 968]]
by the general statutes of STATE to take the necessary steps to
adopt regulations and submit a state implementation plan (SIP)
revision committing STATE to National LEV in accordance with the EPA
National LEV program regulations on SIP revisions at 40 CFR part 86,
subpart R, and with section 110 of the Clean Air Act and its
implementing regulations at 40 CFR parts 51 and 52.
(ii) States with Existing ZEV Mandates may add language to the
Executive Order submitted pursuant to this paragraph (e)(1) confirming
that this opt-in will not affect the state's requirements pertaining to
ZEVs.
(2)(i) If a state does not submit an Executive Order pursuant to
paragraph (e)(1) of this section, a letter signed by the governor of
the state (or the mayor of the District of Columbia) that unambiguously
and unconditionally (apart from the permissible conditions set forth in
this section) indicates the state's agreement to opt into the National
LEV program and includes the following language (language in brackets
indicates that either formulation is acceptable):
This submittal is made in accordance with the EPA National Low
Emission Vehicle (National LEV) regulations at 40 CFR part 86,
subpart R to [commit STATE to/opt STATE into] the National LEV
program.
[I am forwarding to EPA the [enclosed letter signed enclosed
letter and proposed regulations which were signed and proposed] by
HEAD OF APPROPRIATE STATE AGENCY at my direction, and which
[specifies/specify] the details of STATE's commitment to the
National LEV program. I am forwarding to EPA and concur with the
[enclosed letter signed/enclosed letter and proposed regulations
signed and proposed] by HEAD OF APPROPRIATE STATE AGENCY, which
[specifies/specify] the details of STATE's commitment to the
National LEV program.]
I [hereby direct/have directed] APPROPRIATE STATE AGENCY to
follow the procedures prescribed by the general statutes of STATE to
take the necessary steps to adopt regulations and submit a state
implementation plan (SIP) revision committing STATE to National LEV
in accordance with the EPA National LEV regulations on SIP revisions
at 40 CFR part 86, subpart R, and with section 110 of the Clean Air
Act and its implementing regulations at 40 CFR parts 51 and 52.
(ii) States with Existing ZEV Mandates may add language to the
letter submitted pursuant to this paragraph (e)(2) confirming that this
opt-in will not affect the state's requirements pertaining to ZEVs.
(3) A letter signed by the head of the appropriate state agency
that would unconditionally (except as set forth in this section)
include the following:
(i) States without a Section 177 Program, or with a Section 177
Program but not an Existing ZEV Mandate, shall include the following
language:
National LEV is designed as a compliance alternative for OTC
State programs adopted pursuant to section 177 of the Clean Air Act
that apply to passenger cars, light-duty trucks up through 6,000
pounds GVWR, and/or medium-duty vehicles from 6,001 to 14,000 pounds
GVWR if designed to operate on gasoline, as these categories of
motor vehicles are defined in the California Code of Regulations,
Title 13, Division 3, Chapter 1, Article 1, Section 1900. For the
duration of STATE's participation in National LEV, [STATE will allow
manufacturers to / manufacturers may] comply with National LEV or
equally stringent mandatory federal standards in lieu of compliance
with any program adopted by STATE pursuant to the authority provided
in section 177 of the Clean Air Act applicable to the vehicle
classes specified above, including any ZEV mandates. STATE's
participation in National LEV extends until model year 2006, except
as provided in 40 CFR 86.1707. If, no later than December 15, 2000,
the US EPA does not adopt standards at least as stringent as the
National LEV standards provided in 40 CFR part 86 subpart R that
apply to new motor vehicles in model year 2004, 2005 or 2006,
STATE's participation in National LEV extends only until model year
2004, except as provided in 40 CFR 86.1707.
For the duration of STATE's participation in National LEV, STATE
[intends to/will] forbear from adopting and implementing a ZEV
mandate effective before model year 2006.
(ii) States with a Section 177 Program and an Existing ZEV Mandate,
shall include the following language:
National LEV is designed as a compliance alternative for OTC
State programs adopted pursuant to section 177 of the Clean Air Act
that apply to passenger cars, light-duty trucks up through 6,000
pounds GVWR, and medium-duty vehicles from 6,001 to 14,000 pounds
GVWR if designed to operate on gasoline, as these categories of
motor vehicles are defined in the California Code of Regulations,
Title 13, Division 3, Chapter 1, Article 1, Section 1900. With the
exception of any requirements pertaining to ZEVs, for the duration
of STATE's participation in National LEV, [STATE will allow
manufacturers to / manufacturers may] comply with National LEV or
equally stringent mandatory federal standards in lieu of compliance
with any program adopted by STATE pursuant to the authority provided
in section 177 of the Clean Air Act applicable to the vehicle
classes specified above. STATE's participation in National LEV
extends until model year 2006, except as provided in 40 CFR 86.1707.
If, no later than December 15, 2000, the US EPA does not adopt
standards at least as stringent as the National LEV standards
provided in 40 CFR part 86 subpart R that apply to new motor
vehicles in model year 2004, 2005 or 2006, STATE's participation in
National LEV extends only until model year 2004, except as provided
in 40 CFR 86.1707. Any existing or future requirement pertaining to
ZEVs is not affected by STATE's acceptance of National LEV as a
compliance alternative for other state requirements.
(iii) All states shall include the following language:
Based on EPA's determination in the preamble to the final
National LEV rule [CITE], STATE believes that National LEV will
achieve reductions of VOC and NOX emissions that are
equivalent to or greater than the reductions that would be achieved
through OTC State adoption of California Low Emission Vehicle
programs in the Ozone Transport Region.
(iv) All states shall include the following language:
STATE intends National LEV to be STATE's new motor vehicle
emissions control program.
(v) All states shall include the following language:
STATE recognizes that motor vehicle manufacturers are committing
to National LEV with the expectation that, until model year 2006
(or, under the circumstances specified above, model year 2004), the
OTC States that commit to the National LEV program will allow
National LEV as a compliance alternative for state programs adopted
pursuant to the authority provided in section 177 of the Clean Air
Act, applying to the vehicle classes specified above (except any
requirements pertaining to ZEVs in states with Existing ZEV
Mandates). It is our intent to abide by this commitment. [However,
the provisions of this letter will not have the force of law until
STATE adopts them as state regulations. / Regulations providing for
STATE's opt-in to National LEV have been approved for proposed
rulemaking by APPROPRIATE STATE AGENCY on [INSERT DATE]. However,
they will not have the force and effect of law until they are
approved as final regulations.] Adoption of state regulations and
the contents of a final state implementation plan revision will be
determined through a state rulemaking process pursuant to the state
requirements at [CITE to STATE law] and federal law. Also, STATE
must comply with any subsequent STATE legislation that might affect
this commitment.
(vi) All states shall include the following language:
If the manufacturers exit the National LEV program pursuant to
the EPA National LEV regulations at 40 CFR 86.1707, STATE
[acknowledges / provides in its proposed rule] that the transition
from National LEV requirements to any STATE program adopted pursuant
to the authority provided in section 177 of the Clean Air Act
applying to the vehicle classes specified above, including any
requirements pertaining to ZEVs (except any requirements pertaining
to ZEVs in states with Existing ZEV Mandates), will proceed in
accordance with the EPA National LEV regulations at 40 CFR 86.1707.
(vii) All states shall include the following language:
STATE supports the legitimacy of the National LEV program and
EPA's authority to promulgate the National LEV regulations.
[[Page 969]]
(viii) Any state may include the following language:
[This [commitment/opt-in] / As provided in the proposed
regulations, STATE's opt-in] is conditioned on all motor vehicle
manufacturers (listed in EPA regulations at 40 CFR 86.1706(c))
opting into National LEV and on EPA finding that National LEV is in
effect pursuant to 40 CFR 86.1706.
(4) In lieu of statements described in paragraphs (e)(3)(i),
(e)(3)(ii) and (e)(3)(vi) of this section, states may submit proposed
regulations containing the provisions required under paragraphs (g)(1),
(g)(2), (g)(3), and (g)(5) of this section.
(f) A state shall be considered to have opted in upon the
Administrator's receipt of the opt-in notification and satisfaction of
the conditions set forth in paragraph (e)(3)(viii) of this section, if
applicable.
(g) Each OTC State that opts into National LEV pursuant to
paragraph (e) of this section shall submit a state implementation plan
(SIP) revision within one year and seventy-five days of December 16,
1997 except for the District of Columbia, New Hampshire, Delaware, and
Virginia, for which the deadline is 18 months and seventy-five days
from December 16, 1997. The SIP revisions shall include the following
using identical or substantively identical language:
(1) Covered states without any Section 177 Program, or with a
Section 177 Program but not an Existing ZEV Mandate, shall submit
regulations containing the following language:
For the duration of STATE's participation in National LEV,
manufacturers may comply with National LEV or equally stringent
mandatory federal standards in lieu of compliance with any program,
including any mandates for sales of zero emission vehicles (ZEVs),
adopted by STATE pursuant to the authority provided in section 177
of the Clean Air Act applicable to passenger cars, light-duty trucks
up through 6,000 pounds GVWR, and/or medium-duty vehicles from 6,001
to 14,000 pounds GVWR if designed to operate on gasoline, as these
categories of motor vehicles are defined in the California Code of
Regulations, Title 13, Division 3, Chapter 1, Article 1, Section
1900.
STATE's participation in National LEV extends until model year
2006, except as provided in 40 CFR 86.1707. If, no later than
December 15, 2000, the US EPA does not adopt standards at least as
stringent as the National LEV standards provided in 40 CFR part 86
subpart R that apply to new motor vehicles in model year 2004, 2005
or 2006, STATE's participation in National LEV extends only until
model year 2004, except as provided in 40 CFR 86.1707.
(2) Covered states with a Section 177 Program and an Existing ZEV
Mandate shall submit regulations containing the following language:
With the exception of any STATE requirements pertaining to zero
emission vehicles (ZEVs), for the duration of STATE's participation
in National LEV, manufacturers may comply with National LEV or
equally stringent mandatory federal standards in lieu of compliance
with any program adopted by STATE pursuant to the authority provided
in section 177 of the Clean Air Act applicable to passenger cars,
light-duty trucks up through 6,000 pounds GVWR, and/or medium-duty
vehicles from 6,001 to 14,000 pounds GVWR if designed to operate on
gasoline, as these categories of motor vehicles are defined in the
California Code of Regulations, Title 13, Division 3, Chapter 1,
Article 1, Section 1900.
STATE's participation in National LEV extends until model year
2006, except as provided in 40 CFR 86.1707. If, no later than
December 15, 2000, the US EPA does not adopt standards at least as
stringent as the National LEV standards provided in 40 CFR part 86
subpart R that apply to new motor vehicles in model year 2004, 2005
or 2006, STATE's participation in National LEV extends only until
model year 2004, except as provided in 40 CFR 86.1707.
Any existing or future STATE requirement pertaining to ZEVs is
not affected by STATE's acceptance of National LEV as a compliance
alternative for other state requirements.
(3) All covered states shall submit regulations containing the
following language:
If a covered manufacturer, as defined at 40 CFR 86.1702, opts
out of the National LEV program pursuant to the EPA National LEV
regulations at 40 CFR 86.1707, the transition from National LEV
requirements to any STATE section 177 program applicable to
passenger cars, light-duty trucks up through 6,000 pounds GVWR, and/
or medium-duty vehicles from 6,001 to 14,000 pounds GVWR if designed
to operate on gasoline, as these categories of motor vehicles are
defined in the California Code of Regulations, Title 13, Division 3,
Chapter 1, Article 1, Section 1900, will proceed in accordance with
the EPA National LEV regulations at 40 CFR 86.1707.
(4) All covered states shall accompany the regulatory language with
the following language:
STATE commits to support National LEV as an acceptable
alternative to state Section 177 Programs for the duration of
STATE's participation in National LEV.
STATE recognizes that its commitment to National LEV is
necessary to ensure that National LEV remain in effect.
STATE is submitting this SIP revision in accordance with the
applicable Clean Air Act requirements at section 110 and EPA
regulations at 40 CFR Part 86 and 40 CFR Parts 51 and 52.
(5) States without Existing ZEV Mandates shall accompany the
regulatory language with the following language:
For the duration of STATE's participation in National LEV, STATE
[intends to / will] forbear from adopting and implementing a ZEV
mandate effective prior to model year 2006. Notwithstanding the
previous sentence, if, no later than December 15, 2000, the US EPA
does not adopt standards at least as stringent as the National LEV
standards provided in 40 CFR part 86 subpart R that apply to new
motor vehicles in model year 2004, 2005 or 2006, STATE [intends to /
will] forbear from adopting and implementing a ZEV mandate effective
prior to model year 2004.
Sec. 86.1706-97 [Redesignated as Sec. 86.1706-99]
16. Section 86.1706-97 is redesignated as Sec. 86.1706-99 and is
revised to read as follows:
Sec. 86.1706-99 National LEV program in effect.
(a) No later than March 2, 1998, EPA shall issue a finding as to
whether National LEV is in effect. EPA shall base this finding on opt-
in notifications from OTC States submitted pursuant to Sec. 86.1705(e)
and received by EPA January 30, 1998, and on opt-in notifications from
manufacturers submitted pursuant to Sec. 86.1705(c) and received by EPA
February 17, 1998.
(b) EPA shall find that the National LEV program is in effect and
shall subsequently publish this determination if the following
conditions have been met:
(1) All manufacturers listed in paragraph (c) of this section have
lawfully opted in pursuant to Sec. 86.1705(c) and any conditions placed
on the opt-ins allowed under Sec. 86.1705(c)(2) have been met (apart
from a condition that EPA find the National LEV program in effect);
(2) Each OTC State that opts in has lawfully opted in pursuant to
Sec. 86.1705(e) and any conditions placed on opt-ins by OTC States that
are allowed under Sec. 86.1705(e)(3)(viii) have been met (apart from a
condition that EPA find the National LEV program in effect); and
(3) No valid opt-out has become effective pursuant to Sec. 86.1707.
(c) List of manufacturers of light-duty vehicles and light-duty
trucks:
American Honda Motor Company, Inc.
American Suzuki Motor Corporation
BMW of North America, Inc.
Chrysler Corporation
Fiat Auto U.S.A., Inc.
Ford Motor Company
General Motors Corporation
Hyundai Motor America
Isuzu Motors America, Inc.
Jaguar Motors Ltd.
Kia Motors America, Inc.
Land Rover North America, Inc.
Mazda (North America) Inc.
Mercedes-Benz of North America
Mitsubishi Motor Sales of America, Inc.
Nissan North America, Inc.
[[Page 970]]
Porsche Cars of North America, Inc.
Rolls-Royce Motor Cars Inc.
Saab Cars USA, Inc.
Subaru of America, Inc.
Toyota Motor Sales, U.S.A., Inc.
Volkswagen of America, Inc.
Volvo North America Corporation
17. Section 86.1707-99 is added to subpart R to read as follows:
Sec. 86.1707-99 General provisions; opt-outs.
A covered manufacturer or covered state may opt out of the National
LEV program only according to the provisions of this section. Vehicles
certified under the National LEV program must continue to meet the
standards to which they were certified, regardless of whether the
manufacturer of those vehicles remains a covered manufacturer. A
manufacturer that has opted out remains responsible for any debits
outstanding on the effective date of opt-out, pursuant to
Sec. 86.1710(d)(3).
(a) Procedures for opt-outs--manufacturers. To opt out of the
National LEV program, a covered manufacturer must notify the
Administrator as provided in Sec. 86.1705(c)(1), except that the
notification shall specify the condition and final action allowing opt-
out, indicate the manufacturer's intent to opt out of the program and
no longer be subject to the provisions in this subpart, and specify an
effective date for the opt-out. The effective date shall be specified
in terms of the first model year for which the opt-out shall be
effective, but shall be no earlier than the applicable date indicated
in paragraphs (d) through (j) of this section. For an opt-out pursuant
to paragraph (d) of this section, the manufacturer shall specify the
revision triggering the opt-out and shall also provide evidence that
the triggering revision does not harmonize the standard or requirement
with a comparable California standard or requirement, if applicable, or
that the triggering revision has increased the stringency of the
revised standard or requirement, if applicable. The notification shall
include the following language:
XX COMPANY, its subsidiaries, successors and assigns hereby opt
out of the voluntary National LEV program, as set forth in 40 CFR
part 86, subpart R.
(b) Procedures for opt-outs--OTC states. To opt out of the National
LEV program, a covered state must notify the Administrator through a
written statement from the head of the appropriate state agency. A copy
of the notification shall be sent to the Director, Vehicle Programs and
Compliance Division; U.S. Environmental Protection Agency; 2565
Plymouth Road; Ann Arbor, Michigan, 48105. The notification shall
specify the final action allowing opt-out, indicate the state's intent
to opt out of the program and no longer be subject to the provisions in
this subpart, and specify an effective date for the opt-out. The
effective date shall be specified in terms of the first model year for
which the opt-out shall be effective, but shall be no earlier than the
applicable date indicated in paragraphs (d) through (k) of this
section. The notification shall include the following language:
STATE hereby opts out of the voluntary National LEV program, as
set forth in 40 CFR part 86, subpart R.
(c) Procedures for opt-outs--EPA notification. Upon receipt of an
opt-out notification under this section, EPA shall promptly notify the
covered states and covered manufacturers of the opt-out. Publication in
the Federal Register of notice of receipt of the opt-out notification
is sufficient but not necessary to meet EPA's obligation to notify
covered states and covered manufacturers.
(d) Conditions allowing manufacturer opt-outs--change to Stable
Standards. A covered manufacturer may opt out if EPA promulgates a
final rule or takes other final agency action making a revision not
specified in paragraph (d)(9)(iii) of this section to a standard or
requirement listed in paragraph (d)(9)(i) of this section and the
covered manufacturer objects to the revision.
(1) A covered manufacturer may opt out within 180 calendar days of
the EPA action allowing opt-out under this paragraph (d). A valid opt-
out based on a revision to a Core Stable Standard shall be effective no
earlier than the model year named for the calendar year following the
calendar year in which EPA receives the manufacturer's opt-out
notification. A valid opt-out based on a revision to a Non-Core Stable
Standard may become effective no earlier than the first model year to
which that revision applies.
(i) Only a covered manufacturer that objects to a revision may opt
out if EPA adopts that revision, except that if such a manufacturer
opts out, other manufacturers that did not object to the revision may
also opt out pursuant to paragraph (j) of this section. An objection
shall be sufficient for this purpose only if it was filed during the
public comment period on the proposed revision and the objection states
that the proposed revision is sufficiently significant to allow opt-out
under this paragraph (d).
(ii) [Reserved]
(2) Within sixty days of receipt of an opt-out notification under
this paragraph (d), EPA shall determine whether the opt-out is valid by
determining whether the alleged condition allowing opt-out has occurred
and whether the opt-out complies with the requirements under paragraphs
(a) and (d) of this section. An EPA determination regarding the
validity of an opt-out is not a rule, but is a nationally applicable
final agency action subject to judicial review pursuant to section
307(b) of the Clean Air Act (42 U.S.C. 7607(b)).
(3) A manufacturer that has submitted an opt-out notification to
EPA under this paragraph (d) remains a covered manufacturer until the
opt-out has come into effect under paragraph (d)(1) of this section and
EPA or a reviewing court determines that the opt-out is valid.
(4) In the event that a manufacturer petitions for judicial review
of an EPA determination that an opt-out is invalid, the manufacturer
remains a covered manufacturer until final judicial resolution of the
petition. Pending resolution of the petition, and starting with the
model year for which the opt-out would have come into effect under
paragraph (d)(1) of this section if EPA had determined the opt-out was
valid, the manufacturer may certify vehicles to any standards in this
part applicable to vehicles certified in that model year and sell such
vehicles without regard to the limitations contained in Sec. 86.1711.
However, if the opt-out is finally determined to be invalid, the
manufacturer will be liable for any failure to comply with
Secs. 86.1710 through 86.1712.
(5) Upon the effective date of a manufacturer's opt-out under this
paragraph (d), that manufacturer shall be subject to all requirements
(except ZEV Mandates) that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.) and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted at
least two years before the effective date of a manufacturer's opt-out,
a manufacturer waives its right under section 177 of the Clean Air Act
to two years of lead time to the extent that the effective date of its
opt-out provides for less than two years of lead time and to the extent
such a waiver is necessary. With respect to ZEV Mandates, the
manufacturer will
[[Page 971]]
not be deemed to have waived its two-year lead time under section 177
of the Clean Air Act. A manufacturer shall not be subject to any ZEV
Mandates (except Existing ZEV Mandates) in OTC States until the model
year (as defined in part 85, subpart X) that commences two years after
the date of EPA's receipt of the manufacturer's opt-out notice.
(6) If a covered manufacturer opts out under this paragraph (d),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
the date of either an EPA finding that the opt-out is valid, or a
judicial ruling that a disputed opt-out is valid. The state's opt-out
notification shall specify an effective date for the state's opt-out no
earlier than two calendar years after the date of EPA's receipt of the
state's opt-out notification and shall provide that the opt out is not
effective for model years (as defined in part 85, subpart X) that
commence prior to this effective date.
(7) In a state that opts out pursuant to paragraph (d)(6) of this
section, obligations under National LEV shall be unaffected for covered
manufacturers until the effective date of the state's opt-out. Upon the
effective date of the state's opt-out, in that state covered
manufacturers shall comply with any state standards and other
requirements in effect pursuant to section 177 of the Clean Air Act or,
if such state standards are not in effect, with all requirements that
would apply to a manufacturer that had not opted into the National LEV
program, including all applicable standards and other requirements
promulgated under title II of the Clean Air Act (42 U.S.C. 7521 et
seq.).
(8) In a state that has not opted out, obligations under National
LEV shall be unaffected for covered manufacturers.
(9)(i) The following are the emissions standards and requirements
that, if revised, may provide covered manufacturers the opportunity to
opt out pursuant to paragraph (d)(1) of this section:
(A) The tailpipe emissions standards for NMOG, NOx, CO,
HCHO, and PM specified in Sec. 86.1708(b) and (c) and Sec. 86.1709(b)
and (c);
(B) Fleet average NMOG standards and averaging, banking and trading
provisions specified in Sec. 86.1710;
(C) Provisions regarding limitations on sale of Tier 1 vehicles and
TLEVs contained in Sec. 86.1711;
(D) The compliance test procedure (Federal Test Procedure) as
specified in subparts A and B of this part, as used for determining
compliance with the exhaust emission standards specified in
Sec. 86.1708(b) and (c) and Sec. 86.1709(b) and (c);
(E) The compliance test fuel, as specified in Sec. 86.1771;
(F) The definition of low volume manufacturer specified in
Sec. 86.1702;
(G) The on-board diagnostic system requirements specified in
Sec. 86.1717;
(H) The light-duty vehicle refueling emissions standards and
provisions specified in Sec. 86.099-8(d), and the light-duty truck
refueling emissions standards and provisions specified in Sec. 86.001-
9(d);
(I) The cold temperature carbon monoxide standards and provisions
for light-duty vehicles specified in Sec. 86.099-8(k), and for light
light-duty trucks specified in Sec. 86.099-9(k);
(J) The evaporative emissions standards and provisions for light-
duty vehicles specified in Sec. 86.099-8(b), and the evaporative
emissions standards and provisions for light light-duty trucks
specified in Sec. 86.099-9(b);
(K) The reactivity adjustment factors and procedures specified in
Sec. 86.1777(d);
(L) The Supplemental Federal Test Procedure, standards and phase-in
schedules specified in Secs. 86.1708(e), 86.1709(e), 86.127(f) and (g),
86.129(e) and (f), 86.130(e), 86.131(f), 86.132(n) and (o), 86.158,
86.159, 86.160, 86.161, 86.162, 86.163, 86.164, and Appendix I to this
part, paragraphs (g) and (h).
(ii) The standards and requirements listed in paragraphs
(d)(9)(i)(A) through (d)(9)(i)(F) of this section are the ``Core Stable
Standards''; the standards and requirements listed in paragraphs
(d)(9)(i)(G) through (d)(9)(i)(L) of this section are the ``Non-Core
Stable Standards.''
(iii) The following types of revisions to the Stable Standards
listed in paragraph (d)(9)(i) of this section do not provide covered
manufacturers the right to opt out of the National LEV program:
(A) Revisions to which covered manufacturers do not object;
(B) Revisions to a Non-Core Stable Standard that do not increase
the overall stringency of the standard or requirement;
(C) Revisions to a Non-Core Stable Standard that harmonize the
standard or requirement with the comparable California standard or
requirement for the same model year (even if the harmonization
increases the stringency of the standard or requirement), provided
that, if the relevant California factor is raised to 1.0 or higher, EPA
can only raise to 1.0 any of the reactivity adjustment factors
specified in 86.1777 applicable to gasoline meeting the specifications
of 86.1771(a)(1); and
(D) Revisions to cold temperature carbon monoxide standards and
provisions for light-duty vehicles (as specified in Sec. 86.099-8(k))
and for light light-duty trucks (as specified in Sec. 86.099-9(k)) that
are effective after model year 2000.
(10) Promulgation by EPA of mandatory tailpipe standards and other
related requirements effective model year 2004 or later does not
provide an opportunity to opt out of the National LEV program.
(e) Conditions allowing manufacturer opt-outs--state Section 177
Program that does not allow National LEV as a compliance alternative. A
covered manufacturer may opt out of National LEV if a covered state
takes final action such that it has in its regulations or state law a
state Section 177 Program and/or a ZEV Mandate (except in a state with
an Existing ZEV Mandate), that does not allow National LEV as a
compliance alternative for the duration of the state's commitment to
the National LEV program. The state's commitment to National LEV
extends until model year 2006. If, no later than December 15, 2000, EPA
has not adopted standards at least as stringent as the National LEV
standards provided in 40 CFR part 86, subpart R that apply to new motor
vehicles in model year 2004, 2005 or 2006, the state's commitment to
National LEV only extends until model year 2004. A manufacturer could
opt out based on this condition even if the state regulations or law
are contrary to an approved SIP revision committing the state to
National LEV pursuant to Sec. 86.1705(g). For purposes of this
paragraph (e), such a state shall be called the ``violating state.''
(1) A covered manufacturer may opt out any time after the violating
state takes such final action, provided that the violating state has
not withdrawn or otherwise nullified the relevant final action prior to
EPA's receipt of the opt-out notification. An opt-out under this
paragraph (e) shall be effective no earlier than the model year named
for the calendar year following the calendar year in which EPA receives
the manufacturer's opt-out notification.
(2) As of the model year named for the calendar year following the
calendar year of the violating state's final action, the violating
state shall no longer be included in the applicable trading region for
purposes of calculating covered manufacturers' compliance with the
fleet average NMOG standards under Sec. 86.1710, and Sec. 86.1711 shall
no longer apply to vehicles sold in the violating state. Beginning in
that model year and until the violating state's requirements become
effective pursuant
[[Page 972]]
to sections 110(l) and 177 of the Clean Air Act or until the date
specified in the following sentence, whichever is earlier, the National
LEV program allows covered manufacturers to certify and produce for
sale vehicles meeting the exhaust emission standards of Sec. 86.096-
8(a)(1)(i) and subsequent model year provisions or Sec. 86.097-
9(a)(1)(i) and subsequent model year provisions in the violating state.
If the violating state withdraws or otherwise nullifies the relevant
violating final action, vehicles sold in that state shall count towards
the covered manufacturers' fleet NMOG standards under Sec. 86.1710 and
be subject to Sec. 86.1711 as of the model year named for the second
calendar year following the calendar year in which the violating state
took the final action nullifying or withdrawing the final violating
action, or as of the model year named for the fourth calendar year
following the calendar year in which the violating state took the
violating final action, whichever is later. The two-year lead time
required by section 177 of the Clean Air Act for the state Section 177
Program or ZEV Mandate shall run from the date of the violating final
action. Notwithstanding an earlier effective date of a manufacturer's
opt-out under this paragraph (e), the manufacturer's opt-out is not
effective in the violating state until the two-year lead time for the
violating state's program has passed (which shall run from the date of
the violating final action). For model years for which vehicles sold in
the violating state do not count towards the National LEV NMOG average,
in calculating emissions reductions from new motor vehicles creditable
for state implementation plan requirements, the violating state's
emissions reductions shall be based on the emission standards of
Secs. 86.096--8(a)(1)(i), 86.097-9(a)(1)(i) and subsequent model year
provisions, and shall not be based on the National LEV standards,
provided that vehicles sold in the violating state are certified to
Tier 1 levels when sold in that state.
(3) Upon the effective date of a manufacturer's opt-out under this
paragraph (e) in any covered state that is not a violating state under
this paragraph (e), that manufacturer shall be subject to all
requirements (except ZEV Mandates) that would apply to a manufacturer
that had not opted into the National LEV program, including all
applicable standards and other requirements promulgated under title II
of the Clean Air Act and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted by a
non-violating state at least two years before the effective date of a
manufacturer's opt-out, a manufacturer waives its right under section
177 of the Clean Air Act to two years of lead time to the extent that
the effective date of its opt-out provides for less than two years of
lead time and to the extent such a waiver is necessary. With respect to
ZEV Mandates, the manufacturer will not be deemed to have waived its
two-year lead time under section 177 of the Clean Air Act. A
manufacturer shall not be subject to any ZEV Mandates (except Existing
ZEV Mandates) in OTC States until the model year (as defined in part
85, subpart X) that commences two years after the date of EPA's receipt
of the manufacturer's opt-out notice.
(4) If a covered manufacturer opts out under this paragraph (e),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
EPA's receipt of the manufacturer's opt-out notification. The state's
opt-out notification shall specify an effective date for the state's
opt-out no earlier than two calendar years after the date of EPA's
receipt of the state's opt-out notification and shall provide that the
opt-out is not effective for model years (as defined in part 85,
subpart X), that commence prior to this effective date.
(5) In a non-violating state that opts out pursuant to paragraph
(e)(4) of this section, obligations under National LEV shall be
unaffected for covered manufacturers until the effective date of the
non-violating state's opt-out. Upon the effective date of the state's
opt-out, in that state covered manufacturers shall comply with any
state standards and other requirements in effect pursuant to section
177 of the Clean Air Act or, if such state standards are not in effect,
with all requirements that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
(6) In a non-violating state that has not opted out, obligations
under National LEV shall be unaffected for covered manufacturers.
(f) Conditions allowing manufacturer opt-outs--failure to submit
SIP revision. A covered manufacturer may opt out of National LEV if a
covered state fails to submit a National LEV SIP revision on the date
specified in Sec. 86.1705(g). For purposes of this paragraph (f), such
a state shall be called the ``violating state.''
(1) A covered manufacturer may opt out any time after the violating
state misses the deadline for its National LEV SIP revision, provided
that EPA has not received a National LEV SIP revision from the
violating state prior to EPA's receipt of the manufacturer's opt-out
notification. If a manufacturer opts out within 180 calendar days from
the deadline for the state to submit its National LEV SIP revision, the
opt-out must be conditioned on the state not submitting a National LEV
SIP revision within 180 calendar days from the deadline for such SIP
revision. If the state submits such a SIP revision within the 180-day
period, any manufacturer opt-outs under this paragraph (f) would be
invalidated and would not come into effect. An opt-out under this
paragraph (f) shall be effective no earlier than model year 2000 (or
model year 2001 if the violating state is the District of Columbia, New
Hampshire, Delaware, or Virginia) or the model year named for the
calendar year following the calendar year in which EPA receives the
opt-out notification, whichever is later.
(2) For a manufacturer that opts out under this paragraph (f), as
of model year 2000 (or model year 2001 if the violating state is the
District of Columbia, New Hampshire, Delaware, or Virginia) or the
model year named for the calendar year following the calendar year in
which EPA receives the opt-out notification, whichever is later, the
violating state shall no longer be included in the applicable trading
region for purposes of calculating that manufacturer's compliance with
the fleet average NMOG standards under Sec. 86.1710 and the
manufacturer does not have to comply with Sec. 86.1711 for vehicles
sold in the violating state. Beginning in that model year and until the
manufacturer's opt-out becomes effective, the National LEV program
allows a manufacturer that has opted out under this paragraph (f) to
certify and produce for sale vehicles meeting the exhaust emission
standards of Sec. 86.096-8(a)(1)(i) and subsequent model year
provisions or Sec. 86.097-9(a)(1)(i) and subsequent model year
provisions in the violating state. For model years in which vehicles
sold in the violating state do not count towards the National LEV NMOG
average, in calculating emission reductions from new motor vehicles
creditable for state implementation plan requirements, the violating
state's emissions reductions shall be based on the emissions standards
of Secs. 86.096-8(a)(1)(i), 86.097-9(a)(1)(i), and subsequent model
year provisions, and shall not be based
[[Page 973]]
on the National LEV standards, provided that vehicles sold in the
violating state are certified to Tier 1 levels when sold in that state.
National LEV obligations in the violating state remain unchanged for
those manufacturers that do not opt out based on this condition.
(3) Upon the effective date of a manufacturer's opt-out under this
paragraph (f), in any covered state that is not a violating state under
this paragraph (f), that manufacturer shall be subject to all
requirements (except ZEV Mandates) that would apply to a manufacturer
that had not opted into the National LEV program, including all
applicable standards and other requirements promulgated under title II
of the Clean Air Act and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted by a
non-violating state at least two years before the effective date of a
manufacturer's opt-out, a manufacturer waives its right under section
177 of the Clean Air Act to two years of lead time to the extent that
the effective date of its opt-out provides for less than two years of
lead time and to the extent such a waiver is necessary. With respect to
ZEV Mandates, the manufacturer will not be deemed to have waived its
two-year lead time under section 177 of the Clean Air Act. A
manufacturer shall not be subject to any ZEV Mandates (except Existing
ZEV Mandates) in OTC States until the model year (as defined in part
85, subpart X) that commences two years after the date of EPA's receipt
of the manufacturer's opt-out notice.
(4) If a covered manufacturer opts out under this paragraph (f),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
EPA's receipt of the manufacturer's opt-out notification. The state's
opt-out notification shall specify an effective date for the state's
opt-out no earlier than two calendar years after the date of EPA's
receipt of the state's opt-out notification and shall provide that the
opt-out is not effective for model years (as defined in part 85,
subpart X), that commence prior to this effective date.
(5) In a non-violating state that opts out pursuant to paragraph
(f)(4) of this section, obligations under National LEV shall be
unaffected for covered manufacturers until the effective date of the
non-violating state's opt-out. Upon the effective date of the state's
opt-out, in that state covered manufacturers shall comply with any
state standards and other requirements in effect pursuant to section
177 of the Clean Air Act or, if such state standards are not in effect,
with all requirements that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
(6) In a non-violating state that has not opted out, obligations
under National LEV shall be unaffected for covered manufacturers.
(g) Conditions allowing manufacturer opt-outs--inadequate National
LEV SIP submission. A covered manufacturer may opt out of National LEV
if EPA disapproves a covered state's National LEV SIP submission or
finds that it fails to meet the requirements for a National LEV SIP
revision set forth in Sec. 86.1705(g) or if EPA has not taken final
action regarding such a SIP submission and more than one year has
passed since such SIP submission was submitted to EPA. For purposes of
this paragraph (g), such a state shall be called the ``violating
state.''
(1) A covered manufacturer may opt out any time after EPA has
disapproved a state's National LEV SIP submission or found that it does
not meet the requirements of Sec. 86.1705(g), provided that EPA has not
subsequently approved a revised National LEV SIP revision from that
state and found that the SIP revision meets the requirements of
Sec. 86.1705(g). A covered manufacturer may also opt out any time after
one year EPA's receipt of a state's National LEV SIP submission,
provided that EPA has not approved the revision or has not found that
the SIP revision meets the requirements of Sec. 86.1705(g). An opt-out
under this condition shall be effective no earlier than the model year
named for the calendar year following the calendar year in which the
EPA receives the manufacturer's opt-out notification.
(2) For a manufacturer that opts out under this paragraph (g), as
of the model year named for the calendar year following the calendar
year in which EPA receives the opt-out notification, the violating
state shall no longer be included in the applicable trading region for
purposes of calculating that manufacturer's compliance with the fleet
average NMOG standards under Sec. 86.1710 and the manufacturer does not
have to comply with Sec. 86.1711 for vehicles sold in the violating
state. Beginning in that model year and until the manufacturer's opt-
out becomes effective, the National LEV program allows a manufacturer
that has opted out under this paragraph (g) to certify and produce for
sale vehicles meeting the exhaust emission standards of Sec. 86.096-
8(a)(1)(i) and subsequent model year provisions or Sec. 86.097-
9(a)(1)(i) and subsequent model year provisions in the violating state.
For model years in which vehicles sold in the violating state do not
count towards the National LEV NMOG average, in calculating emission
reductions from new motor vehicles creditable for state implementation
plan requirements, the violating state's emissions reductions shall be
based on the emissions standards of Secs. 86.096-8(a)(1)(i), 86.097-
9(a)(1)(i), and subsequent model year provisions, and shall not be
based on the National LEV standards, provided that vehicles sold in the
violating state are certified to Tier 1 levels when sold in that state.
National LEV obligations in the violating state remain unchanged for
those manufacturers that do not opt out based on this condition.
(3) Upon the effective date of a manufacturer's opt-out under this
paragraph (g), in any covered state that is not a violating state under
this paragraph (g), that manufacturer shall be subject to all
requirements (except ZEV Mandates) that would apply to a manufacturer
that had not opted into the National LEV program, including all
applicable standards and other requirements promulgated under title II
of the Clean Air Act and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted by a
non-violating state at least two years before the effective date of a
manufacturer's opt-out, a manufacturer waives its right under section
177 of the Clean Air Act to two years of lead time to the extent that
the effective date of its opt-out provides for less than two years of
lead time and to the extent such a waiver is necessary. With respect to
ZEV Mandates, the manufacturer will not be deemed to have waived its
two-year lead time under section 177 of the Clean Air Act. A
manufacturer shall not be subject to any ZEV Mandates (except Existing
ZEV Mandates) in OTC States until the model year (as defined in part
85, subpart X) that commences two years after the date of EPA's receipt
of the manufacturer's opt-out notice.
(4) If a covered manufacturer opts out under this paragraph (g),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar
[[Page 974]]
days of EPA's receipt of the manufacturer's opt-out notification. The
state's opt-out notification shall specify an effective date for the
state's opt-out that is no earlier than two calendar years after the
date of EPA's receipt of the state's opt-out notification and shall
provide that the opt-out is not effective for model years (as defined
in part 85, subpart X that commence prior to this effective date.
(5) In a non-violating state that opts out pursuant to paragraph
(g)(4) of this section, obligations under National LEV shall be
unaffected for covered manufacturers until the effective date of the
non-violating state's opt-out. Upon the effective date of the state's
opt-out, in that state covered manufacturers shall comply with any
state standards and other requirements in effect pursuant to section
177 of the Clean Air Act or, if such state standards are not in effect,
with all requirements that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
(6) In a non-violating state that has not opted out, obligations
under National LEV shall be unaffected for covered manufacturers.
(h) Conditions allowing manufacturer opt-outs--adoption of a ZEV
Mandate. A covered manufacturer to which a ZEV Mandate might apply may
opt out of National LEV if a covered state without an Existing ZEV
Mandate takes final action such that it has in its regulations or state
law a ZEV Mandate that allows National LEV as a compliance alternative
that would be effective during the state's commitment to National LEV.
For purposes of this paragraph (h), such a state shall be called the
``violating state.''
(1) A covered manufacturer may opt out any time after the violating
state takes the final action, provided that the violating state has not
withdrawn or otherwise nullified the relevant final action prior to
EPA's receipt of the opt-out notification. An opt-out under this opt-
out condition shall be effective no earlier than the model year named
for the calendar year following the calendar year in which EPA receives
the manufacturer's opt-out notification.
(2) For a manufacturer that opts out under this paragraph (h), as
of the model year named for the calendar year following the calendar
year in which EPA receives the opt-out notification, the violating
state shall no longer be included in the applicable trading region for
purposes of calculating that manufacturer's compliance with the fleet
average NMOG standards under Sec. 86.1710 and the manufacturer does not
have to comply with Sec. 86.1711 for vehicles sold in the violating
state. Beginning in that model year and until the manufacturer's opt-
out becomes effective, the National LEV program allows a manufacturer
that has opted out under this paragraph (h) to certify and produce for
sale vehicles meeting the exhaust emission standards of Sec. 86.096-
8(a)(1)(i) and subsequent model year provisions or Sec. 86.097-
9(a)(1)(i) and subsequent model year provisions in the violating state.
For model years in which vehicles sold in the violating state do not
count towards the National LEV NMOG average, in calculating emission
reductions from new motor vehicles creditable for state implementation
plan requirements, the violating state's emissions reductions shall be
based on the emissions standards of Secs. 86.096-8(a)(1)(i), 86.097-
9(a)(1)(i), and subsequent model year provisions, and shall not be
based on the National LEV standards, provided that vehicles sold in the
violating state are certified to Tier 1 levels when sold in that state.
National LEV obligations in the violating state remain unchanged for
those manufacturers that do not opt out based on this condition.
(3) Upon the effective date of a manufacturer's opt-out under this
paragraph (h), in any covered state that is not a violating state under
this paragraph (h), that manufacturer shall be subject to all
requirements (except ZEV Mandates) that would apply to a manufacturer
that had not opted into the National LEV program, including all
applicable standards and other requirements promulgated under title II
of the Clean Air Act and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted by a
non-violating state at least two years before the effective date of a
manufacturer's opt-out, a manufacturer waives its right under section
177 of the Clean Air Act to two years of lead time to the extent that
the effective date of its opt-out provides for less than two years of
lead time and to the extent such a waiver is necessary. With respect to
ZEV Mandates, the manufacturer will not be deemed to have waived its
two-year lead time under section 177 of the Clean Air Act. A
manufacturer shall not be subject to any ZEV Mandates (except Existing
ZEV Mandates) in OTC States until the model year (as defined in part
85, subpart X) that commences two years after the date of EPA's receipt
of the manufacturer's opt-out notice.
(4) If a covered manufacturer opts out under this paragraph (h),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
EPA's receipt of the manufacturer's opt-out notification. The state's
opt-out notification shall specify an effective date for the state's
opt-out that is no earlier than two calendar years after the date of
EPA's receipt of the state's opt-out notification and shall provide
that the opt-out is not effective for model years (as defined in part
85, subpart X) that commence prior to this effective date.
(5) In a non-violating state that opts out pursuant to paragraph
(h)(4) of this section, obligations under National LEV shall be
unaffected for covered manufacturers until the effective date of the
non-violating state's opt-out. Upon the effective date of the state's
opt-out, in that state covered manufacturers shall comply with any
state standards and other requirements in effect pursuant to section
177 of the Clean Air Act or, if such state standards are not in effect,
with all requirements that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.).
(6) In a non-violating state that has not opted out, obligations
under National LEV shall be unaffected for covered manufacturers.
(i) Conditions allowing manufacturer opt-outs--EPA failure to
consider in-use fuel issues. A covered manufacturer may opt out of
National LEV if EPA does not meet its obligations related to fuel
sulfur effects, as those obligations are set forth in paragraph (i)(7)
of this section.
(1) A manufacturer may request in writing that EPA consider taking
a specific action with regard to a fuel sulfur effect described in
paragraph (i)(7) of this section. The request must identify the alleged
fuel sulfur related problem, demonstrate that the problem exists and is
caused by in-use fuel sulfur levels, ask EPA to consider taking a
specific action, and demonstrate the emissions impact of the requested
change. Within 60 calendar days of EPA's receipt of the manufacturer's
request, EPA must consider the manufacturer's request and respond to it
in writing, stating the Agency's decision and explaining the basis for
the decision. The date of EPA's response is the date the response is
signed.
[[Page 975]]
(2) If EPA fails to respond to a manufacturer's request within the
time provided, the covered manufacturer that submitted the request may
opt out within 180 calendar days of the deadline for the EPA response.
(If such a manufacturer opts out, other manufacturers that did not
submit requests may also opt out pursuant to paragraph (j) of this
section.) An opt-out notification under this paragraph (i) is not valid
if received by EPA after EPA responds to the request, even if EPA
responds after the expiration of the 60-day EPA deadline. An opt-out
under this paragraph (i) shall be effective no earlier than the model
year named for the calendar year following the calendar year in which
EPA receives the manufacturer's opt-out notification.
(3) Upon the effective date of a manufacturer's opt-out under this
paragraph (i), the manufacturer shall be subject to all requirements
(except ZEV Mandates) that would apply to a manufacturer that had not
opted into the National LEV program, including all applicable standards
and other requirements promulgated under title II of the Clean Air Act
(42 U.S.C. 7521 et seq.) and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted at
least two years before the effective date of a manufacturer's opt-out,
a manufacturer waives its right under section 177 of the Clean Air Act
to two years of lead time to the extent that the effective date of its
opt-out provides for less than two years of lead time and to the extent
such a waiver is necessary. With respect to ZEV Mandates, the
manufacturer will not be deemed to have waived its two-year lead time
under section 177 of the Clean Air Act. A manufacturer shall not be
subject to any ZEV Mandates (except Existing ZEV Mandates) in OTC
States until the model year (as defined in part 85, subpart X) that
commences two years after the date of EPA's receipt of the
manufacturer's opt-out notice.
(4) If a covered manufacturer opts out under this paragraph (i),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
EPA's receipt of the manufacturer's opt-out notification. The state's
opt-out notification shall specify an effective date for the state's
opt-out that is no earlier than two calendar years after the date of
EPA's receipt of the state's opt-out notification and shall provide
that the opt out is not effective for model years (as defined in part
85, subpart X), that commence prior to this effective date.
(5) In a state that opts out pursuant to paragraph (i)(4) of this
section, obligations under National LEV shall be unaffected for covered
manufacturers until the effective date of the state's opt-out. Upon the
effective date of the state's opt-out, in that state covered
manufacturers shall comply with any state standards and other
requirements in effect pursuant to section 177 of the Clean Air Act or,
if such state standards are not in effect, with all requirements that
would apply to a manufacturer that had not opted into the National LEV
program, including all applicable standards and other requirements
promulgated under title II of the Clean Air Act (42 U.S.C. 7521 et
seq.).
(6) In a state that has not opted out, obligations under National
LEV shall be unaffected for covered manufacturers.
(7) Following are the actions that a manufacturer may request EPA
to consider under paragraph (i)(1) of this section:
(i) During the certification process and upon a manufacturer's
written request, EPA will consider allowing the use of an on-board
diagnostic system (as required by Sec. 86.1717), that functions
properly on low sulfur gasoline, but indicates sulfur-induced passes
when exposed to high sulfur gasoline.
(ii) Upon a manufacturer's written request, if vehicles exhibit
illuminations of the emission control diagnostic system malfunction
indicator light (as defined in Sec. 86.094-17(c)) due to high sulfur
gasoline, EPA will consider allowing modifications to such vehicles on
a case-by-case basis so as to eliminate the sulfur-induced
illumination.
(iii) Upon a manufacturer's written request, prior to in-use
testing, that presents information to EPA regarding pre-conditioning
procedures designed solely to remove the effects of high sulfur from
currently available gasoline, EPA will consider allowing such
procedures on a case-by-case basis.
(j) Conditions allowing manufacturer opt-outs--OTC State or
manufacturer opts out. A covered manufacturer may opt out of National
LEV if a covered state or another covered manufacturer opts out of the
National LEV program pursuant to this section.
(1) If a covered manufacturer's opt-out under this paragraph (j) is
based on a covered state's or covered manufacturer's opt-out under
paragraph (e), (f), (g), (h), (i), (j) or (k) of this section, the
manufacturer may opt out within 90 calendar days of EPA's receipt of
the underlying state's or manufacturer's opt-out notification. If a
manufacturer's opt-out under this paragraph (j) is based on a
manufacturer's opt-out under paragraph (d) of this section, the
manufacturer may only opt out within 90 calendar days of the date of
either an EPA finding or a judicial ruling that the opt-out under
paragraph (d) of this section is valid. An opt-out under this paragraph
(j) shall be effective no earlier than the model year named for the
calendar year following the calendar year in which the EPA receives the
manufacturer's opt-out notification.
(2) Upon the effective date of a manufacturer's opt-out under this
paragraph (j), in any covered state that manufacturer shall be subject
to all requirements (except ZEV Mandates) that would apply to a
manufacturer that had not opted into National LEV, including all
applicable standards and other requirements promulgated under title II
of the Clean Air Act and any state standards and other requirements
(except ZEV Mandates) in effect pursuant to section 177 of the Clean
Air Act (42 U.S.C. 7507). For any state Section 177 Program that
allowed National LEV as a compliance alternative and was adopted at
least two years before the effective date of a manufacturer's opt-out,
a manufacturer waives its right under section 177 of the Clean Air Act
to two years of lead time to the extent that the effective date of its
opt-out provides for less than two years of lead time and to the extent
such a waiver is necessary. With respect to ZEV Mandates, the
manufacturer will not be deemed to have waived its two-year lead time
under section 177 of the Clean Air Act. A manufacturer shall not be
subject to any ZEV Mandates (except Existing ZEV Mandates) in OTC
States until the model year (as defined in part 85, subpart X) that
commences two years after the date of EPA's receipt of the
manufacturer's opt-out notice.
(3) If a covered manufacturer opts out under this paragraph (j),
any covered state that is not a violating state under paragraph (e),
(f), (g) or (h) of this section may opt out within 90 calendar days of
EPA's receipt of the manufacturer's opt-out notification. The state's
opt-out notification shall specify an effective date for the state's
opt-out no earlier than two calendar years after the date of EPA's
receipt of the state's opt-out notification and shall provide that the
opt-out is not effective for model years (as defined in part 85,
subpart X), that commence prior to this effective date.
(4) In a state that opts out pursuant to paragraph (j)(3) of this
section, obligations under National LEV shall be unaffected for covered
manufacturers
[[Page 976]]
until the effective date of the state's opt-out. Upon the effective
date of the state's opt-out, in that state covered manufacturers shall
comply with any state standards and other requirements in effect
pursuant to section 177 of the Clean Air Act or, if such state
standards are not in effect, with all requirements that would apply to
a manufacturer that had not opted into the National LEV program,
including all applicable standards and other requirements promulgated
under title II of the Clean Air Act (42 U.S.C. 7521 et seq.).
(5) In a state that has not opted out, obligations under National
LEV remain unaffected for covered manufacturers.
(k) Conditions allowing OTC State opt-outs--EPA finding of
inequivalency. Any covered state may opt out of National LEV if EPA
determines that National LEV would not produce (or is not producing)
emissions reductions at least equivalent to the OTC State Section 177
Programs.
(1) At any time during National LEV, a covered state may request in
writing that EPA reevaluate its initial equivalency determination (of
December 16, 1997) that National LEV would produce emissions reductions
at least equivalent to the OTC State Section 177 Programs that would be
operative in the absence of National LEV. Within 180 calendar days of
receipt of the state's request, EPA must take final agency action to
determine whether the determination that National LEV will produce at
least equivalent emission reductions to OTC State Section 177 Program
is still valid. These EPA determinations are not rules, but are
nationally applicable final agency actions subject to judicial review
pursuant to section 307(b) of the Clean Air Act (42 U.S.C. 7607(b)). In
reevaluating its equivalency determination, EPA shall use the same
Mobile emission factor model and the same inputs and assumptions
(including vehicle miles traveled, MOBILE5a model inputs, inspection
and maintenance programs, reformulated gasoline, and permanent
migration effects) as used in the initial determination, with the
following exceptions:
(i) In modeling the emission reductions from National LEV, EPA
shall use any revised federal new motor vehicle standard or other
requirement in place of the standard or other requirement as it existed
when EPA made its initial determination; and, to the extent that the
modeling reflects EPA's implementation of federal new motor vehicle
standards or other requirements, EPA shall take any changes in such
implementation into account.
(ii) In modeling the emissions reductions that would be achieved
through the OTC State Section 177 Programs that would apply in the
absence of National LEV, EPA shall take into account all Section 177
Programs adopted by OTC States (including programs that allow National
LEV as a compliance alternative) that had been adopted subsequent to
EPA's initial equivalency determination. In accounting for the
emissions effect of OTC State Section 177 Programs, EPA shall continue
to assume that all OTC State Section 177 Programs have the same
substantive requirements used in EPA's initial equivalency
determination and shall not model any effects of state regulation of
medium-duty vehicles (as defined in the California Code of Regulations,
Title 13, Division 3, Chapter 1, Article 1, Section 1900).
(2) A covered state may opt out of National LEV within 90 calendar
days of a final EPA determination pursuant to paragraph (k)(1) of this
section that National LEV would not produce (or is not producing)
emissions reductions at least equivalent to OTC State Section 177
Programs. The state's opt-out notification shall specify an effective
date for the state's opt-out that is no earlier than two calendar years
after the date of EPA's receipt of the state's opt-out notification and
shall provide that the opt-out is not effective for model years (as
defined in part 85, subpart X), that commence prior to this effective
date.
(3) If a covered state opts out based on this condition, a covered
manufacturer may opt out of National LEV pursuant to paragraph (j) of
this section.
(4) In a state that opts out pursuant to paragraph (k)(1) of this
section, obligations under National LEV shall be unaffected for covered
manufacturers until the effective date of that state's opt-out. Upon
the effective date of the state's opt-out, in that state covered
manufacturers shall comply with any state standards and other
requirements in effect pursuant to section 177 of the Clean Air Act or,
if such state standards and other requirements are not in effect, with
all requirements that would apply to a manufacturer that had not opted
into the National LEV program, including all applicable standards and
other requirements promulgated under title II of the Clean Air Act (42
U.S.C. 7521 et seq.).
Sec. 86.1708-97 [Redesignated Sec. 86.1708-99 and Amended]
18. Section 86.1708-97 is redesignated as Sec. 86.1708-99 and
amended by revising the section heading, by removing Table R97-7 and
redesignating Tables R97-1 through R97-6 as Tables R99-1 through R99-6,
by revising the references ``R97-1'', ``R97-2'', ``R97-3'', ``R97-4'',
``R97-5'', and ``R97-6'', to read ``R99-1'', ``R99-2'', ``R99-3'',
``R99-4'', ``R99-5'', and ``R99-6'', respectively, wherever they appear
in the section, by revising paragraphs (b)(1)(i), (b)(1)(iii)(B), and
(c), and by adding paragraph (e) to read as follows:
Sec. 86.1708-99 Exhaust emission standards for 1999 and later light-
duty vehicles.
* * * * *
(b)(1) Standards. (i) Exhaust emissions from 1999 and later model
year light-duty vehicles classified as TLEVs, LEVs, and ULEVs shall not
exceed the standards in Tables R99-1 and R99-2 in rows designated with
the applicable vehicle emission category. These standards shall apply
equally to certification and in-use vehicles, except as provided in
paragraph (c) of this section. The tables follow:
Table R99-1.--Intermediate Useful Life (50,000 mile) Standards (g/mi) for Light-Duty Vehicles Classified as
TLEVs, LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
Vehicle emission category NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
[[Page 977]]
Table R99-2.--Full Useful Life (100,000 mile) Standards (g/mi) for Light-Duty Vehicles Classified as TLEVs,
LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
PM (diesels
Vehicle emission category NMOG CO NOX HCHO only)
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
* * * * *
(iii) * * *
(B) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light-duty vehicles when certifying the vehicle for operation
on gasoline shall be the NMOG standards in Tables R99-3 and R99-4 in
the rows designated with the applicable vehicle emission category, as
follows:
Table R99-3.--Intermediate Useful Life (50,000 mile) NMOG Standards (g/
mi) for Flexible-Fuel and Dual-Fuel Light-Duty Vehicles Classified as
TLEVs, LEVs, and ULEVs
------------------------------------------------------------------------
Vehicle emission category NMOG
------------------------------------------------------------------------
TLEV........................................................ 0.25
LEV......................................................... 0.125
ULEV........................................................ 0.075
------------------------------------------------------------------------
Table R99-4.--Full Useful Life (100,000 mile) NMOG Standards (g/mi) for
Flexible-Fuel and Dual-Fuel Light-Duty Vehicles Classified as TLEVs,
LEVs, and ULEVs
------------------------------------------------------------------------
Vehicle emission category NMOG
------------------------------------------------------------------------
TLEV........................................................ 0.31
LEV......................................................... 0.156
ULEV........................................................ 0.090
------------------------------------------------------------------------
* * * * *
(c) In-use emission standards. (1) 1999 model year light-duty
vehicles certified as LEVs and 1999 through 2002 model year light-duty
vehicles certified as ULEVs shall meet the applicable intermediate and
full useful life in-use standards in paragraph (c)(2) of this section,
according to the following provisions:
(i) [Reserved]
(ii) The applicable in-use emission standards for vehicle emission
categories and model years not shown in Tables R99-5 and R99-6 shall be
the intermediate and full useful life standards in paragraph (b) of
this section.
(2) Light-duty vehicles, including flexible-fuel and dual-fuel
light-duty vehicles when operated on gasoline and on an available fuel
other than gasoline, shall meet all intermediate and full useful life
in-use standards for the applicable vehicle emission category and model
year in Tables R99-5 and R99-6, as follows:
Table R99-5.--Intermediate Useful Life (50,000 mile) In-Use Standards (g/mi) for Light-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
Vehicle emission category Model year NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
LEV................................ 1999 0.100 3.4 0.3 0.015
ULEV............................... 1999-2000 0.055 2.1 0.3 0.012
2001-2002 0.055 2.1 0.3 0.008
----------------------------------------------------------------------------------------------------------------
Table R99-6.--Full Useful Life (100,000 mile) In-Use Standards (g/mi) for Light-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
Vehicle emission category Model year NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
LEV................................ 1999 0.125 4.2 0.4 0.018
ULEV............................... 1999-2002 0.075 3.4 0.4 0.008
----------------------------------------------------------------------------------------------------------------
* * * * *
(e) SFTP Standards. Exhaust emissions from 2001 and later model
year light-duty vehicles shall meet the additional SFTP standards in
this paragraph (e) according to the implementation schedules in this
paragraph (e). The standards set forth in this paragraph (e) refer to
exhaust emissions emitted over the Supplemental Federal Test Procedure
(SFTP) as set forth in subpart B of this part and collected and
calculated in accordance with those procedures.
(1) Tier 1 vehicles and TLEVs. The SFTP exhaust emission levels
from new 2001 and subsequent model year light-duty vehicles certified
to the exhaust emission standards in Sec. 86.099-8(a)(1)(i) and
subsequent model year provisions and light-duty vehicles certified as
TLEVs shall not exceed the standards in Table R99-7.1, according to the
implementation schedule in this paragraph (e)(1).
Table R99-7.1.--SFTP Exhaust Emission Standards (g/mi) for Tier 1 Vehicles and TLEVs
----------------------------------------------------------------------------------------------------------------
CO
NMHC + NOX --------------------------------------
Useful life Fuel type composite Composite
A/C test US06 test option
----------------------------------------------------------------------------------------------------------------
Intermediate........................ Gasoline.............. 0.65 3.0 9.0 3.4
[[Page 978]]
Diesel................ 1.48 NA 9.0 3.4
Full................................ Gasoline.............. 0.91 3.7 11.1 4.2
Diesel................ 2.07 NA 11.1 4.2
----------------------------------------------------------------------------------------------------------------
(i) Phase-in requirements--2001 to 2003 model years. For the
purposes of this paragraph (e)(1)(i) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of the following types of vehicles sold in
California: light-duty vehicles certified to the exhaust emission
standards in Sec. 86.099-8(a)(1)(i) and subsequent model year
provisions, and light light-duty trucks certified to the exhaust
emission standards in Sec. 86.099-9(a)(1)(i) and subsequent model year
provisions, and light-duty vehicles and light light-duty trucks
certified as TLEVs. As an option, a manufacturer may elect to have its
total light-duty vehicle and light light-duty truck fleet defined, for
the purposes of this paragraph (e)(1)(i) only, as the total projected
number of the manufacturer's light-duty vehicles and light light-duty
trucks, other than zero emission vehicles, certified and sold in
California.
(A) Manufacturers of light-duty vehicles and light light-duty
trucks, except low volume manufacturers, shall certify a minimum
percentage of their light-duty vehicle and light light-duty truck fleet
according to the following phase-in schedule:
------------------------------------------------------------------------
Model year Percentage
------------------------------------------------------------------------
2001....................................................... 25
2002....................................................... 50
2003....................................................... 85
------------------------------------------------------------------------
(B) [Reserved]
(ii) Phase-in requirements--2004 and later model years. For the
purposes of this paragraph (e)(1)(ii) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of the following types of vehicles sold in the
United States: light-duty vehicles certified to the exhaust emission
standards in Sec. 86.099-8(a)(1)(i) and subsequent model year
provisions, and light light-duty trucks certified to the exhaust
emission standards in Sec. 86.099-9(a)(1)(i) and subsequent model year
provisions, and light-duty vehicles and light light-duty trucks
certified as TLEVs. As an option, a manufacturer may elect to have its
total light-duty vehicle and light light-duty truck fleet defined, for
the purposes of this paragraph (e)(1)(ii) only, as the total projected
number of the manufacturer's light-duty vehicles and light light-duty
trucks, other than zero emission vehicles, certified and sold in the
United States.
(A) In 2004 and subsequent model years, manufacturers of light-duty
vehicles and light light-duty trucks, including low volume
manufacturers, shall certify 100 percent of their light-duty vehicle
and light light-duty truck fleet to the standards in this paragraph
(e)(l).
(B) [Reserved]
(iii) Phase-in requirements--vehicles sold outside California.
Light-duty vehicles and light light-duty trucks sold outside California
shall be certified to the applicable emission standards in this
paragraph (e) if a vehicle has been certifed to the emission standards
in this paragraph (e) for sale in California and is identical in the
following respects:
(A) Vehicle manufacturer;
(B) Vehicle make and model;
(C) Cylinder block configuration (L-6, V-8, and so forth);
(D) Displacement;
(E) Combustion cycle;
(F) Transmission class; and
(G) Axle ratio.
(2) LEVs and ULEVs. The SFTP standards in this paragraph (e)(2)
represent the maximum SFTP exhaust emissions at 4,000 miles +/-250
miles or at the mileage determined by the manufacturer for emission
data vehicles in accordance with Sec. 86.1726. The SFTP exhaust
emission levels from new 2001 and subsequent model year light-duty
vehicle LEVs and ULEVs shall not exceed the standards in the following
table, according to the implementation schedule in this paragraph
(e)(2)(i).
Table R99-7.2.--SFTP Exhaust Emission Standards (g/mi) for LEVs and
ULEVs
------------------------------------------------------------------------
US06 Test A/C Test
------------------------------------------------------------------------
NMHC + NOX CO NMHC + NOX CO
------------------------------------------------------------------------
0.14............. 8.0 0.20 2.7
------------------------------------------------------------------------
(i) Phase-in requirements--2001 to 2003 model years. For the
purposes of this paragraph (e)(2)(i) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of light-duty vehicles and light light-duty
trucks certified as LEVs and ULEVs sold in California.
(A) Manufacturers of light-duty vehicles and light light-duty
trucks, except low volume manufacturers, shall certify to the standards
in this paragraph (e)(2) a minimum percentage of their light-duty
vehicle and light light-duty truck fleet according to the following
phase-in schedule:
------------------------------------------------------------------------
Model year Percentage
------------------------------------------------------------------------
2001....................................................... 25
2002....................................................... 50
2003....................................................... 85
------------------------------------------------------------------------
(B) Manufacturers may use an ``Alternative or Equivalent Phase-in
Schedule'' to comply with the phase-in requirements. An ``Alternative
Phase-in'' is one that achieves at least equivalent emission reductions
by the end of the last model year of the scheduled phase-in. Model-year
emission reductions shall be calculated by multiplying the percent of
vehicles (based on the manufacturer's projected California sales volume
of the applicable vehicle fleet) meeting the new requirements per model
year by the number of model years implemented prior to and including
the last model year of the scheduled phase-in. The ``cumulative total''
is the summation of the model-year emission reductions (e.g., a four
model-year 25/50/85/100 percent phase-in schedule would be calculated
as: (25%* 4 years) + (50%* 3 years) + (85%* 2 years) + (100%* 1 year)
[[Page 979]]
= 520). Any alternative phase-in that results in an equal or larger
cumulative total than the required cumulative total by the end of the
last model year of the scheduled phase-in shall be considered
acceptable by the Administrator under the following conditions: All
vehicles subject to the phase-in shall comply with the respective
requirements in the last model year of the required phase-in schedule;
and if a manufacturer uses the optional phase-in percentage
determination in paragraph (e)(1)(i) of this section, the cumulative
total of model-year emission reductions as determined only for light-
duty vehicles and light light-duty trucks certified to this paragraph
(e)(2) must also be equal to or larger than the required cumulative
total by end of the 2004 model year. Manufacturers shall be allowed to
include vehicles introduced before the first model year of the
scheduled phase-in (e.g., in the previous example, 10 percent
introduced one year before the scheduled phase-in begins would be
calculated as: (10%* 5 years) and added to the cumulative total).
(ii) Phase-in requirements--2004 and later model years. For the
purposes of this paragraph (e)(2)(ii) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of light-duty vehicles and light light-duty
trucks certified as LEVs and ULEVs sold in the United States.
(A) In 2004 and subsequent model years, manufacturers of light-duty
vehicles and light light-duty trucks, including low volume
manufacturers, shall certify 100 percent of their light-duty vehicle
and light light-duty truck fleet to the standards in this paragraph
(e)(2).
(iii) Phase-in requirements--vehicles sold outside California.
Light-duty vehicles and light light-duty trucks sold outside California
shall be certified to the applicable emission standards in this
paragraph (e) if a vehicle has been certifed to the emission standards
in this paragraph (e) for sale in California and is identical in the
following respects:
(A) Vehicle manufacturer;
(B) Vehicle make and model;
(C) Cylinder block configuration (L-6, V-8, and so forth);
(D) Displacement;
(E) Combustion cycle;
(F) Transmission class; and
(G) Axle ratio.
(3) A/C-on specific calibrations. A/C-on specific calibrations
(e.g. air to fuel ratio, spark timing, and exhaust gas recirculation),
may be used which differ from A/C-off calibrations for given engine
operating conditions (e.g., engine speed, manifold pressure, coolant
temperature, air charge temperature, and any other parameters). Such
calibrations must not unnecessarily reduce the NMHC+NOX
emission control effectiveness during A/C-on operation when the vehicle
is operated under conditions which may reasonably be expected to be
encountered during normal operation and use. If reductions in control
system NMHC+NOX effectiveness do occur as a result of such
calibrations, the manufacturer shall, in the Application for
Certification, specify the circumstances under which such reductions do
occur, and the reason for the use of such calibrations resulting in
such reductions in control system effectiveness. A/C-on specific
``open-loop'' or ``commanded enrichment'' air-fuel enrichment
strategies (as defined below), which differ from A/C-off ``open-loop''
or ``commanded enrichment'' air-fuel enrichment strategies, may not be
used, with the following exceptions: Cold-start and warm-up conditions,
or, subject to Administrator approval, conditions requiring the
protection of the vehicle, occupants, engine, or emission control
hardware. Other than these exceptions, such strategies which are
invoked based on manifold pressure, engine speed, throttle position, or
other engine parameters shall use the same engine parameter criteria
for the invoking of this air-fuel enrichment strategy and the same
degree of enrichment regardless of whether the A/C is on or off.
``Open-loop'' or ``commanded'' air-fuel enrichment strategy is defined
as enrichment of the air to fuel ratio beyond stoichiometry for the
purposes of increasing engine power output and the protection of engine
or emissions control hardware. However, ``closed-loop biasing,''
defined as small changes in the air-fuel ratio for the purposes of
optimizing vehicle emissions or driveability, shall not be considered
an ``open-loop'' or ``commanded'' air-fuel enrichment strategy. In
addition, ``transient'' air-fuel enrichment strategy (or ``tip-in'' and
``tip-out'' enrichment), defined as the temporary use of an air-fuel
ratio rich of stoichiometry at the beginning or duration of rapid
throttle motion, shall not be considered an ``open-loop'' or
``commanded'' air-fuel enrichment strategy.
(4) ``Lean-on-cruise'' calibration strategies. (i) In the
Application for Certification, the manufacturer shall state whether any
``lean-on-cruise'' strategies are incorporated into the vehicle design.
A ``lean-on-cruise'' air-fuel calibration strategy is defined as the
use of an air-fuel ratio significantly greater than stoichiometry,
during non-deceleration conditions at speeds above 40 mph. ``Lean-on-
cruise'' air-fuel calibration strategies shall not be employed during
vehicle operation in normal driving conditions, including A/C usage,
unless at least one of the following conditions is met:
(A) Such strategies are substantially employed during the FTP or
SFTP;
(B) Such strategies are demonstrated not to significantly reduce
vehicle NMHC+NOX emission control effectiveness over the
operating conditions in which they are employed;
(C) Such strategies are demonstrated to be necessary to protect the
vehicle occupants, engine, or emission control hardware.
(ii) If the manufacturer proposes to use a ``lean-on-cruise''
calibration strategy, the manufacturer shall specify the circumstances
under which such a calibration would be used, and the reason or reasons
for the proposed use of such a calibration.
(iii) The provisions of this paragraph (e)(4) shall not apply to
vehicles powered by ``lean-burn'' engines or diesel-cycle engines. A
``lean-burn'' engine is defined as an Otto-cycle engine designed to run
at an air-fuel ratio significantly greater than stoichiometry during
the large majority of its operation.
(5) Applicability to alternative fuel vehicles. These SFTP
standards do not apply to vehicles certified on fuels other than
gasoline and diesel fuel, but the standards do apply to the gasoline
and diesel fuel operation of flexible-fuel vehicles and dual-fuel
vehicles.
(6) Single-roll electric dynamometer requirement. For all vehicles
certified to the SFTP standards, a single-roll electric dynamometer or
a dynamometer which produces equivalent results, as set forth in
Sec. 86.108, must be used for all types of emission testing to
determine compliance with the associated emission standards.
Sec. 86.1709 [Redesignated as Sec. 86.1709-99 and Amended]
19. Section 86.1709-97 is redesignated as Sec. 86.1709-99 and
amended by revising the section heading, by removing Table R97-14 and
redesignating Tables R97-8 through R97-13 as Tables R99-8 through R99-
13, by revising the references ``R97-8'', ``R97-9'', ``R97-10'', ``R97-
11'', ``R97-12'', and ``R97-13'' to read ``R99-8'', ``R99-9'', ``R99-
10'', ``R99-11'', ``R99-12'', and ``R99-13'', respectively, wherever
they appear in the section, by revising paragraphs (b)(1)(i),
(b)(1)(iii) (B), and (c), and by adding paragraph (e) to read as
follows:
[[Page 980]]
Sec. 86.1709-99 Exhaust emission standards for 1999 and later light
light-duty trucks.
* * * * *
(b)(1) Standards. (i) Exhaust emissions from 1999 and later model
year light light-duty trucks classified as TLEVs, LEVs, and ULEVs shall
not exceed the standards in Tables R99-8 and R99-9 in rows designated
with the applicable vehicle emission category and loaded vehicle
weight. These standards shall apply equally to certification and in-use
vehicles, except as provided in paragraph (c) of this section. The
tables follow:
Table R99-8.--Intermediate Useful Life (50,000 mile) Standards (g/mi) for Light Light-Duty Trucks Classified as
TLEVs, LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
Vehicle emission
Loaded vehicle weight category NMOG CO NOX HCHO
----------------------------------------------------------------------------------------------------------------
3751................................ 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
3751-5750........................... 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
----------------------------------------------------------------------------------------------------------------
Table R99-9.--Full Useful Life (100,000 mile) Standards (g/mi) for Light Light-Duty Trucks Classified as TLEVs,
LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
PM
Loaded vehicle weight Vehicle emission NMOG CO NOX HCHO (diesels
category only)
----------------------------------------------------------------------------------------------------------------
0-3750............................ 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
3751-5750......................... TLEV................. 0.200 5.5 0.9 0.023 0.10
LEV.................. 0.130 5.5 0.5 0.023 0.10
ULEV................. 0.070 2.8 0.5 0.013 0.05
----------------------------------------------------------------------------------------------------------------
* * * * *
(iii) * * *
(B) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light light-duty trucks when certifying the vehicle for
operation on gasoline shall be the NMOG standards in Tables R99-10 and
R99-11 in the rows designated with the applicable vehicle emission
category and loaded vehicle weight, as follows:
Table R99-10.--Intermediate Useful Life (50,000 mile) NMOG Standards (g/
mi) for Flexible-Fuel and Dual-Fuel Light Light-Duty Trucks Classified
as TLEVs, LEVs, and ULEVs
------------------------------------------------------------------------
Loaded
vehicle Vehicle emission category NMOG
weight
------------------------------------------------------------------------
0-3750.... TLEV................................................ 0.25
LEV................................................. 0.125
ULEV................................................ 0.075
3751-5750. TLEV................................................ 0.32
LEV................................................. 0.160
ULEV................................................ 0.100
------------------------------------------------------------------------
Table R99-11.--Full Useful Life (100,000 mile) NMOG Standards (g/mi) for
Flexible-Fuel and Dual-Fuel Light Light-Duty Trucks Classified as TLEVs,
LEVs, and ULEVs
------------------------------------------------------------------------
Loaded
vehicle Vehicle emission category NMOG
weight
------------------------------------------------------------------------
0-3750.... TLEV................................................ 0.31
LEV................................................. 0.156
ULEV................................................ 0.090
3751-5750. TLEV................................................ 0.40
LEV................................................. 0.200
ULEV................................................ 0.130
------------------------------------------------------------------------
* * * * *
(c) In-use emission standards. (1) 1999 model year light light-duty
trucks certified as LEVs and 1999 through 2001 model year light light-
duty trucks certified as ULEVs shall meet the applicable intermediate
and full useful life in-use standards in paragraph (c)(2) of this
section, according to the following provisions:
(i) [Reserved]
(ii) The applicable in-use emission standards for vehicle emission
categories and model years not shown in Tables R99-12 and R99-13 shall
be the intermediate and full useful life standards in paragraph (b) of
this section.
(2) Light light-duty trucks, including flexible-fuel and dual-fuel
light light-duty trucks when operated on gasoline and on an available
fuel other than gasoline, shall meet all intermediate and full useful
life in-use standards for the applicable vehicle emission category,
loaded vehicle weight, and model year in Tables R99-12 and R99-13, as
follows:
Table R99-12.--Intermediate Useful Life (50,000 mile) In-Use Standards (g/mi) for Light Light-Duty Trucks
----------------------------------------------------------------------------------------------------------------
Loaded
vehicle Vehicle emission category Model year NMOG CO NOX HCH0
weight
----------------------------------------------------------------------------------------------------------------
0-3750.... LEV..................................... 1999 0.100 3.4 0.3 0.015
ULEV.................................... 1999-2002 0.055 2.1 0.3 0.008
3751-5750. LEV..................................... 1999 0.130 4.4 0.5 0.018
[[Page 981]]
ULEV.................................... 1999-2002 0.070 2.8 0.5 0.009
----------------------------------------------------------------------------------------------------------------
Table R99-13.--Full Useful Life (100,000 mile) In-Use Standards (g/mi) for Light Light-Duty Trucks
----------------------------------------------------------------------------------------------------------------
Loaded
vehicle Vehicle emission category Model year NMOG CO NOX HCHO
weight
----------------------------------------------------------------------------------------------------------------
0-3750.... LEV..................................... 1999 0.125 4.2 0.4 0.018
ULEV.................................... 1999-2002 0.075 3.4 0.4 0.011
3751-5750. LEV..................................... 1999 0.160 5.5 0.7 0.023
ULEV.................................... 1999-2002 0.100 4.4 0.7 0.013
----------------------------------------------------------------------------------------------------------------
* * * * *
(e) SFTP Standards. Exhaust emissions from 2001 and later model
year light light-duty trucks shall meet the additional SFTP standards
in this paragraph (e) according to the implementation schedules in this
paragraph (e). The standards set forth in this paragraph (e) refer to
exhaust emissions emitted over the Supplemental Federal Test Procedure
(SFTP) as set forth in subpart B of this part and collected and
calculated in accordance with those procedures.
(1) Tier 1 vehicles and TLEVs. The SFTP exhaust emission levels
from new 2001 and subsequent model year light light-duty trucks
certified to the exhaust emission standards in Sec. 86.099-9(a)(1)(i)
and subsequent model year provisions and light light-duty trucks
certified as TLEVs shall not exceed the standards in Table R99-14.1,
according to the implementation schedule in this paragraph (e)(1).
Table R99-14.1.--SFTP Exhaust Emission Standards (g/mi) for Tier 1 Vehicles and TLEVs
----------------------------------------------------------------------------------------------------------------
CO
NMHC + NOX --------------------------------------
Useful life Fuel type LVW (lbs) composite Composite
A/C test US06 test option
----------------------------------------------------------------------------------------------------------------
Intermediate................. Gasoline........ 0-3750 0.65 3.0 9.0 3.4
.............. 3751-5750 1.02 3.9 11.6 4.4
Diesel.......... 0-3750 1.48 NA 9.0 3.4
.............. 3751-5750 NA NA NA NA
Full......................... Gasoline........ 0-3750 0.91 3.7 11.1 4.2
.............. 3751-5750 1.37 4.9 14.6 5.5
Diesel.......... 0-3750 2.07 NA 11.1 4.2
.............. 3751-5750 NA NA NA NA
----------------------------------------------------------------------------------------------------------------
(i) Phase-in requirements--2001 to 2003 model years. For the
purposes of paragraph (e)(1)(i) of this section only, each
manufacturer's light-duty vehicle and light light-duty truck fleet
shall be defined as the total projected number of the following types
of vehicles sold in Calfornia: light-duty vehicles certified to the
exhaust emission standards in Sec. 86.099-8(a)(1)(i) and subsequent
model year provisions, and light light-duty trucks certified to the
exhaust emission standards in Sec. 86.099-9(a)(1)(i) and subsequent
model year provisions, and light-duty vehicles and light light-duty
trucks certified as TLEVs. As an option, a manufacturer may elect to
have its total light-duty vehicle and light light-duty truck fleet
defined, for the purposes of this paragraph (e)(1)(i) only, as the
total projected number of the manufacturer's light-duty vehicles and
light light-duty trucks, other than zero emission vehicles, certified
and sold in California.
(A) Manufacturers of light-duty vehicles and light light-duty
trucks, except low volume manufacturers, shall certify a minimum
percentage of their light-duty vehicle and light light-duty truck fleet
according to the following phase-in schedule:
------------------------------------------------------------------------
Model year Percentage
------------------------------------------------------------------------
2001.................................................... 25
2002.................................................... 50
2003.................................................... 85
------------------------------------------------------------------------
(B) [Reserved]
(ii) Phase-in requirements--2004 and later model years. For the
purposes of paragraph (e)(1)(ii) of this section only, each
manufacturer's light-duty vehicle and light light-duty truck fleet
shall be defined as the total projected number of the following types
of vehicles sold in the United States: light-duty vehicles certified to
the exhaust emission standards in Sec. 86.099-8(a)(1)(i) and subsequent
model year provisions, light light-duty trucks certified to the exhaust
emission standards in Sec. 86.099-9(a)(1)(i) and subsequent model year
provisions, and light-duty vehicles and light light-duty trucks
certified as TLEVs. As an option, a manufacturer may elect to have its
total light-duty vehicle and light light-duty truck fleet defined, for
the purposes of this paragraph (e)(1)(ii) only, as the total projected
number of the manufacturer's light-duty vehicles and light light-duty
trucks, other than zero emission vehicles, certified and sold in the
United States.
(A) In 2004 and subsequent model years, manufacturers of light-duty
vehicles and light light-duty trucks, including low volume
manufacturers, shall certify 100 percent of their light-duty vehicle
and light light-duty truck
[[Page 982]]
fleet to the standards in this paragraph (e)(1).
(B) [Reserved]
(iii) Phase-in requirements--vehicles sold outside California.
Light-duty vehicles and light light-duty trucks sold outside California
shall be certified to the applicable emission standards in this
paragraph (e) if a vehicle has been certifed to the emission standards
in this paragraph (e) for sale in California and is identical in the
following respects:
(A) Vehicle manufacturer;
(B) Vehicle make and model;
(C) Cylinder block configuration (L-6, V-8, and so forth);
(D) Displacement;
(E) Combustion cycle;
(F) Transmission class; and
(G) Axle ratio.
(2) LEVs and ULEVs. The SFTP standards in this paragraph (e)(2)
represent the maximum SFTP exhaust emissions at 4,000 miles +/-250
miles or at the mileage determined by the manufacturer for emission
data vehicles in accordance with Sec. 86.1726. The SFTP exhaust
emission levels from new 2001 and subsequent model year light light-
duty truck LEVs and ULEVs shall not exceed the standards in the
following table, according to the implementation schedule in this
paragraph (e)(2).
Table R99-14.2--SFTP Exhaust Emission Standards (g/mi) for LEVs and
ULEVs
------------------------------------------------------------------------
US06 test A/C test
------------------------------------------------------------------------
NMHC + NOX CO NMHC + NOX CO
------------------------------------------------------------------------
0.25............................... 10.5 0.27................. 3.5
------------------------------------------------------------------------
(i) Phase-in requirements--2001 to 2003 model years. For the
purposes of this paragraph (e)(2)(i) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of light-duty vehicles and light light-duty
trucks certified as LEVs and ULEVs sold in California.
(A) Manufacturers of light-duty vehicles and light light-duty
trucks, except low volume manufacturers, shall certify to the standards
in this paragraph (e)(2) a minimum percentage of their light-duty
vehicle and light light-duty truck fleet according to the following
phase-in schedule:
------------------------------------------------------------------------
Model year Percentage
------------------------------------------------------------------------
2001....................................................... 25
2002....................................................... 50
2003....................................................... 85
------------------------------------------------------------------------
(B) Manufacturers may use an ``Alternative or Equivalent Phase-in
Schedule'' to comply with the phase-in requirements. An ``Alternative
Phase-in'' is one that achieves at least equivalent emission reductions
by the end of the last model year of the scheduled phase-in. Model-year
emission reductions shall be calculated by multiplying the percent of
vehicles (based on the manufacturer's projected California sales volume
of the applicable vehicle fleet) meeting the new requirements per model
year by the number of model years implemented prior to and including
the last model year of the scheduled phase-in. The ``cumulative total''
is the summation of the model-year emission reductions (e.g., a four
model-year 25/50/85/100 percent phase-in schedule would be calculated
as: (25%*4 years)+(50%*3 years)+(85%*2 years)+(100%*1 year) = 520). Any
alternative phase-in that results in an equal or larger cumulative
total than the required cumulative total by the end of the last model
year of the scheduled phase-in shall be considered acceptable by the
Administrator under the following conditions: All vehicles subject to
the phase-in shall comply with the respective requirements in the last
model year of the required phase-in schedule; and if a manufacturer
uses the optional phase-in percentage determination in paragraph
(e)(1)(i) of this section, the cumulative total of model-year emission
reductions as determined only for light-duty vehicles and light light-
duty trucks certified to this paragraph (e)(2) must also be equal to or
larger than the required cumulative total by the end of the 2004 model
year. Manufacturers shall be allowed to include vehicles introduced
before the first model year of the scheduled phase-in (e.g., in the
previous example, 10 percent introduced one year before the scheduled
phase-in begins would be calculated as: (10%*5 years) and added to the
cumulative total).
(ii) Phase-in requirements--2004 and later model years. For the
purposes of this paragraph (e)(2)(ii) only, each manufacturer's light-
duty vehicle and light light-duty truck fleet shall be defined as the
total projected number of light-duty vehicles and light light-duty
trucks certified as LEVs and ULEVs sold in the United States.
(A) In 2004 and subsequent model years, manufacturers of light-duty
vehicles and light light-duty trucks, including low volume
manufacturers, shall certify 100 percent of their light-duty vehicle
and light light-duty truck fleet to the standards in this paragraph
(e)(2).
(B) [Reserved]
(iii) Phase-in requirements--vehicles sold outside California.
Light-duty vehicles and light light-duty trucks sold outside California
shall be certified to the applicable emission standards in this
paragraph (e) if a vehicle has been certifed to the emission standards
in this paragraph (e) for sale in California and is identical in the
following respects:
(A) Vehicle manufacturer;
(B) Vehicle make and model;
(C) Cylinder block configuration (L-6, V-8, and so forth);
(D) Displacement;
(E) Combustion cycle;
(F) Transmission class; and
(G) Axle ratio.
(3) A/C-on specific calibrations. A/C-on specific calibrations
(e.g., air to fuel ratio, spark timing, and exhaust gas recirculation),
may be used which differ from A/C-off calibrations for given engine
operating conditions (e.g., engine speed, manifold pressure, coolant
temperature, air charge temperature, and any other parameters). Such
calibrations must not unnecessarily reduce the NMHC+NOX
emission control effectiveness during A/C-on operation when the vehicle
is operated under conditions which may reasonably be expected to be
encountered during normal operation and use. If reductions in control
system NMHC+NOX effectiveness do occur as a result of such
calibrations, the manufacturer shall, in the Application for
Certification, specify the circumstances under which such reductions do
occur, and the reason for the use of such calibrations resulting in
such reductions in control system effectiveness. A/C-on specific
``open-loop'' or ``commanded enrichment'' air-fuel enrichment
strategies (as defined below), which differ from A/C-off ``open-loop''
or ``commanded enrichment'' air-fuel enrichment strategies, may not be
used, with the following exceptions: Cold-start and warm-up conditions,
or, subject to Administrator approval, conditions requiring the
protection of the vehicle, occupants, engine, or emission control
hardware. Other than these exceptions, such strategies which are
invoked based on manifold pressure, engine speed, throttle position, or
other engine parameters shall use the same engine parameter criteria
for the invoking of this air-fuel enrichment strategy and the same
degree of enrichment regardless of whether the A/C is on or off.
``Open-loop'' or ``commanded'' air-fuel enrichment strategy is defined
as enrichment of the air to fuel ratio beyond stoichiometry for the
purposes of increasing engine power output and the protection of engine
or emissions
[[Page 983]]
control hardware. However, ``closed-loop biasing,'' defined as small
changes in the air-fuel ratio for the purposes of optimizing vehicle
emissions or driveability, shall not be considered an ``open-loop'' or
``commanded'' air-fuel enrichment strategy. In addition, ``transient''
air-fuel enrichment strategy (or ``tip-in'' and ``tip-out''
enrichment), defined as the temporary use of an air-fuel ratio rich of
stoichiometry at the beginning or duration of rapid throttle motion,
shall not be considered an ``open-loop'' or ``commanded'' air-fuel
enrichment strategy.
(4) ``Lean-on-cruise'' calibration strategies. (i) In the
Application for Certification, the manufacturer shall state whether any
``lean-on-cruise'' strategies are incorporated into the vehicle design.
A ``lean-on-cruise'' air-fuel calibration strategy is defined as the
use of an air-fuel ratio significantly greater than stoichiometry,
during non-deceleration conditions at speeds above 40 mph. ``Lean-on-
cruise'' air-fuel calibration strategies shall not be employed during
vehicle operation in normal driving conditions, including A/C usage,
unless at least one of the following conditions is met:
(A) Such strategies are substantially employed during the FTP or
SFTP;
(B) Such strategies are demonstrated not to significantly reduce
vehicle NMHC+NOx emission control effectiveness over the
operating conditions in which they are employed;
(C) Such strategies are demonstrated to be necessary to protect the
vehicle occupants, engine, or emission control hardware.
(ii) If the manufacturer proposes to use a ``lean-on-cruise''
calibration strategy, the manufacturer shall specify the circumstances
under which such a calibration would be used, and the reason or reasons
for the proposed use of such a calibration.
(iii) The provisions of this paragraph (e)(4) shall not apply to
vehicles powered by ``lean-burn'' engines or diesel-cycle engines. A
``lean-burn'' engine is defined as an Otto-cycle engine designed to run
at an air-fuel ratio significantly greater than stoichiometry during
the large majority of its operation.
(5) Applicability to alternative fuel vehicles. These SFTP
standards do not apply to vehicles certified on fuels other than
gasoline and diesel fuel, but the standards do apply to the gasoline
and diesel fuel operation of flexible-fuel vehicles and dual-fuel
vehicles.
(6) Single-roll electric dynamometer requirement. For all vehicles
certified to the SFTP standards, a single-roll electric dynamometer or
a dynamometer which produces equivalent results, as set forth in
Sec. 86.108, must be used for all types of emission testing to
determine compliance with the associated emission standards.
Sec. 86.1710-97 [Redesignated as Sec. 86.1710-99 and Amended]
20. Section 86.1710-97 is redesignated as Sec. 86.1710-99 and
amended by redesignating Tables R97-15 and R97-16 as Tables R99-15 and
R99-16, by revising the references ``R97-15'' and ``R97-16'' to read
``R99-15'' and ``R99-16'', respectively, wherever they appear in the
section, by adding introductory text to paragraph (a), by revising
paragraphs (a)(1), (a)(3)(i), (a)(3)(iii) (A) and (B), (a)(4)(i),
(a)(4)(iii) (A) and (B), (a)(5)(ii), (b)(4), (c) (1) and (2), (c)(6)
through (c)(8), (d), (e)(2), and (e)(4)(ii), and by adding paragraph
(c)(9), to read as follows:
Sec. 86.1710-99 Fleet average non-methane organic gas exhaust emission
standards for light-duty vehicles and light light-duty trucks.
(a) Fleet average NMOG standards and compliance. (1) Each
manufacturer shall certify light-duty vehicles or light light-duty
trucks to meet the exhaust emission standards in this subpart for
TLEVs, LEVs, ULEVs, or ZEVs, or the exhaust emission standards of
Sec. 86.096-8(a)(1)(i) and subsequent model year provisions or
Sec. 86.097-9(a)(1)(i) and subsequent model year provisions, such that,
using the applicable intermediate useful life standards, the
manufacturer's fleet average NMOG values for light-duty vehicles and
light light-duty trucks sold in the applicable region according to the
specifications of Tables R99-15 and R99-16 are less than or equal to
the standards in Tables R99-15 and R99-16 in the rows designated with
the applicable vehicle type, loaded vehicle weight, and model year, as
follows:
Table R99-15--Fleet Average Non-Methane Organic Gas Standards (g/mi) for
Light-Duty Vehicles and Light Light-Duty Trucks Sold in the Northeast
Trading Region
------------------------------------------------------------------------
Fleet
Vehicle type Loaded vehicle Model year average
weight NMOG
------------------------------------------------------------------------
Light light-duty vehicles..... All........... 1999.......... 0.148
2000.......... 0.095
and
Light light-duty trucks....... 0-3750........
Light light-duty trucks....... 3751-5750..... 1999.......... 0.190
2000.......... 0.124
------------------------------------------------------------------------
Table R99-16--Fleet Average Non-Methane Organic Gas Standards (g/mi) For
Light-Duty Vehicles and Light Light-Duty Trucks Sold in the All States
Trading Region
------------------------------------------------------------------------
Fleet
Vehicle type Loaded vehicle Model year average
weight NMOG
------------------------------------------------------------------------
Light-duty vehicles........... All........... 2001 and later 0.075
and
Light light-duty trucks....... 0-3750........
Light light-duty trucks....... 3751-5750..... 2001 and later 0.100
------------------------------------------------------------------------
[[Page 984]]
* * * * *
(3)(i) Each manufacturer's applicable fleet average NMOG value for
all light light-duty trucks from 0-3750 lbs. loaded vehicle weight and
light-duty vehicles sold in the applicable region according to Tables
R99-15 and R99-16 shall be calculated in units of g/mi NMOG according
to the following equation, where the term ``Sold'' means sold in the
applicable region according to Tables R99-15 and R99-16, and the term
``Vehicles'' means light light-duty trucks from 0-3750 lbs loaded
vehicle weight and light-duty vehicles: (((No. of Vehicles Certified to
the Federal Tier 1 Exhaust Emission Standards and Sold) x (0.25))+((No.
of TLEVs Sold excluding HEVs) x (0.125)) +((No. of LEVs Sold excluding
HEVs) x (0.75))+((No. of ULEVs Sold excluding HEVs) x (0.040))+(HEV
contribution factor))/(Total No. of Vehicles Sold, including ZEVs and
HEVs).
(A) For model years 1997 through 2000, ``Vehicles'' in the
preceding equation shall include California-certified vehicles,
including vehicles certified to California Tier 1 standards.
(B) For model years 2001 and later, ``vehicles'' in the preceding
equation shall not include California-certified vehicles unless they
are also certified under the National LEV program.
* * * * *
(iii)(A) For any model year in which a manufacturer certifies its
entire fleet of light-duty vehicles and light light-duty trucks from 0-
3750 lbs LVW to intermediate useful life NMOG emission standards
specified in Secs. 86.1708 and 86.1709 that are less than or equal to
the applicable fleet average NMOG standard specified in Tables R99-15
and R99-16, the manufacturer may elect not to calculate a fleet average
NMOG value for such vehicles for that model year.
(B) The fleet average NMOG value for a manufacturer electing under
paragraph (a)(3)(iii)(A) of this section not to calculate a fleet
average NMOG value shall be deemed to be the applicable fleet average
NMOG standard specified in Table R99-15 or R99-16 for the applicable
model year.
* * * * *
(4)(i) Each manufacturer's applicable fleet average NMOG value for
all light light-duty trucks from 3751-5750 lbs loaded vehicle weight
sold in the applicable region according to Tables R99-15 and R99-16
shall be calculated in units of g/mi NMOG according to the following
equation, where the term ``Sold'' means sold in the applicable region
according to Tables R97-15 and R97-16, and the term ``Vehicles'' means
light light-duty trucks from 3751-5750 lbs loaded vehicle weight:
(((No. of Vehicles Certified to the Federal Tier 1 Exhaust Emission
Standards and Sold) x (0.32))+((No. of TLEVs Sold excluding
HEVs) x (0.160))+((No. of LEVs Sold excluding HEVs) x (0.100))+(No. of
ULEVs Sold excluding HEVs) x (0.050))+(HEV Contribution factor))/(Total
No. of Vehicles Sold, including ZEVs and HEVs).
(A) For model years 1997 through 2000, ``Vehicles'' in the
preceding equation shall include California-certified vehicles,
including vehicles certified to California Tier 1 standards.
(B) For model years 2001 and later, ``Vehicles'' in the preceding
equation shall not include California-certified vehicles unless they
are also certified under the National LEV program.
* * * * *
(iii)(A) For any model year in which a manufacturer certifies its
entire fleet of light light-duty trucks from 3751-5750 lbs LVW to
intermediate useful life NMOG emission standards specified in
Sec. 86.1709 that are less than or equal to the applicable fleet
average NMOG requirements specified in Tables R99-15 and R99-16, the
manufacturer may elect not to calculate a fleet average NMOG value for
such vehicles for that model year.
(B) The fleet average NMOG value for a manufacturer electing under
paragraph (a)(4)(iii)(A) of this section not to calculate a fleet
average NMOG value shall be deemed to be the applicable fleet average
NMOG standard specified in Table R99-15 or R99-16 for the applicable
model year.
* * * * *
(5) * * *
(ii) Adequate information includes the number of vehicles
purchased, vehicle makes and models, and the associated engine
families. A copy of the letter should be sent to: Director, Vehicle
Programs and Compliance Division, U.S. Environmental Protection Agency,
2565 Plymouth Road, Ann Arbor, Michigan, 48105.
* * * * *
(b) * * *
(4) For each applicable region and model year, a manufacturer's
available credits or level of debits shall be the sum of credits or
debits derived from the respective class A and class B averaging sets
for that region and model year. Paragraph (d)(2)(ii)(C) of this section
contains a special provision for manufacturers that end model year 2000
with a debit balance in the NTR.
(c) * * *
(1) Only credits generated in the NTR may be used to offset NMOG
debits incurred in the NTR. Manufacturers may use in the ASTR credits
generated in the NTR.
(2) Only after credits are earned may they be used, traded, or
carried over to another model year. Before trading or carrying over
credits to the next model year, a manufacturer must apply available
credits to offset any of its debits from the same region, where the
deadline to offset such debits has not yet passed.
* * * * *
(6) Prior to model year 2001, low volume manufacturers may earn
credits in the NTR to transfer to other motor vehicle manufacturers for
use in the NTR or the ASTR, or to bank for their own use in the ASTR.
Such credits will be calculated as set forth in paragraphs (a) and (b)
of this section, except that the applicable fleet average NMOG standard
shall be 0.25 g/mi NMOG for the averaging set for light light-duty
trucks from 0-3750 lbs LVW and light-duty vehicles or 0.32 g/mi NMOG
for the averaging set for light light-duty trucks from 3751-5750 lbs
LVW. Credits shall be discounted in accordance with the provisions in
paragraph (c)(4) of this section.
(7) Prior to model year 2001, manufacturers may earn credits in the
ASTR states that are not in the NTR and may bank those credits for use
in the ASTR. Such credits will be calculated as set forth in paragraphs
(a) and (b) of this section, except that the applicable fleet average
NMOG standard shall be 0.25 g/mi NMOG for the averaging set for light
light-duty trucks from 0-3750 lbs LVW and light-duty vehicles or 0.32
g/mi NMOG for the averaging set for light light-duty trucks from 3751-
5750 lbs LVW, and ``sold'' shall mean sold in the ASTR states that are
not in the NTR.
(i) Emission credits earned in the ASTR states outside the NTR
prior to model year 2001 shall be treated as generated in model year
2001.
(ii) In the 2001 model year, a one-time discount rate of 10 percent
shall be applied to all credits earned under the provisions of this
paragraph (c)(7).
(iii) These credits shall be discounted in accordance with the
provisions in paragraph (c)(4) of this section.
(8) Manufacturers may earn and bank credits in the NTR for model
years 1997 and 1998. In states without a Section 177 Program effective
in model year 1997 or 1998, such credits will be calculated as set
forth in paragraphs (a) and (b) of this section, except that the
applicable fleet average NMOG standard shall be 0.200 g/mi NMOG for the
averaging set for light light-duty trucks from 0-3750 lbs LVW and
light-duty
[[Page 985]]
vehicles or 0.256 g/mi NMOG for the averaging set for light light-duty
trucks from 3751-5750 lbs LVW. In states that opt into National LEV and
have a Section 177 Program effective in model year 1997 or 1998, such
credits will equal the unused credits earned in those states.
(i) Emissions credits earned in the NTR prior to the 1999 model
year shall be treated as generated in the 1999 model year.
(ii) In the 1999 model year, a one-time discount rate of 10 percent
shall be applied to all credits earned under the provisions of this
paragraph (c)(8).
(iii) These credits shall be discounted in accordance with the
provisions in paragraph (c)(4) of this section.
(9) There are no property rights associated with credits generated
under the provisions of this section. Credits are a limited
authorization to emit the designated amount of emissions. Nothing in
the regulations or any other provision of law should be construed to
limit EPA's authority to terminate or limit this authorization through
a rulemaking. If EPA were to terminate or limit the authorization to
emit associated with emissions credits generated under the provisions
of this section, this paragraph (c)(9) would have no effect on
manufacturers' ability to opt out of the National LEV program pursuant
to Sec. 86.1707.
(d) Fleet average NMOG debits. (1) Manufacturers shall offset any
debits for a given model year by the fleet average NMOG reporting
deadline for the model year following the model year in which the
debits were generated. Manufacturers may offset debits by generating
credits or acquiring credits generated by another manufacturer. Only
credits generated in the NTR may be used to offset NMOG debits
generated in the NTR.
(2) The provisions of this paragraph (d)(2) apply only when a
manufacturer has a debit balance in the NTR at the end of model year
2000. Manufacturers shall offset any debits incurred in the NTR for
model year 2000 by the fleet average NMOG reporting deadline for model
year 2001.
(i) A manufacturer may offset debits generated in the NTR in model
year 2000 either by generating credits in the NTR in model year 2001 or
by applying NTR credits acquired under the provisions of this section.
(ii) If a manufacturer has a debit balance in the NTR at the end of
model year 2000, then such manufacturer shall be required to calculate
fleet average NMOG values for both the NTR and the ASTR for model year
2001.
(A) The NTR values shall be calculated according to paragraphs (a)
and (b) of this section, with the fleet average NMOG standards equal to
the standards for model year 2001 in the ASTR.
(B) If such a manufacturer has a credit balance in the NTR for
model year 2001, before trading or carrying over credits to the next
model year, the manufacturer must apply available NTR credits to offset
its debits in the NTR.
(C) Notwithstanding paragraph (b)(4) of this section, for the ASTR
and model year 2001, such a manufacturer's available credits or level
of debits shall be the sum of credits or debits derived from the
respective class A and class B averaging sets for the ASTR and model
year 2001, minus any credits used pursuant to paragraph (d)(2)(ii)(B).
(iii) To transfer a credit as an NTR credit earned in model year
2001, a manufacturer must have credits generated in the NTR based on
separate fleet average NMOG values calculated for the NTR in model year
2001. In addition, the number of model year 2001 NTR credits available
for a manufacturer to transfer cannot exceed the manufacturer's
available number of model year 2001 ASTR credits. Any transferred model
year 2001 NTR credits shall be deducted from the manufacturer's
available model year 2001 ASTR credits.
(3)(i) Failure to meet the requirements of paragraphs (a) through
(d) of this section within the required timeframe for offsetting debits
will be considered to be a failure to satisfy the conditions upon which
the certificate(s) was issued and the individual noncomplying vehicles
not covered by the certificate shall be determined according to this
section.
(ii) If debits are not offset within the specified time period, the
number of vehicles not meeting the fleet average NMOG standards and not
covered by the certificate shall be calculated by dividing the total
amount of debits for the model year by the fleet average NMOG standard
applicable for the model year and averaging set in which the debits
were first incurred. If both averaging sets are in debit, any
applicable credits will first be allocated between the averaging sets
according to the manufacturer's expressed preferences. Then, the number
of vehicles not covered by the certificate shall be calculated using
the revised debit values.
(iii) EPA will determine the vehicles for which the condition on
the certificate was not satisfied by designating vehicles in those
engine families with the highest certification NMOG emission values
first and continuing until a number of vehicles equal to the calculated
number of noncomplying vehicles as determined above is reached. If this
calculation determines that only a portion of vehicles in an engine
family contribute to the debit situation, then EPA will designate
actual vehicles in that engine family as not covered by the
certificate, starting with the last vehicle produced and counting
backwards.
(4) If a manufacturer opts out of the National LEV program pursuant
to Sec. 86.1707, the manufacturer continues to be responsible for
offsetting any debits outstanding on the effective date of the opt-out
within the required time period. Any failure to offset the debits will
be considered to be a violation of paragraph (d)(1) of this section and
may subject the manufacturer to an enforcement action for sale of
vehicles not covered by a certificate, pursuant to paragraph (d)(2) of
this section.
(5) For purposes of calculating tolling of the statute of
limitations, a violation of the requirements of paragraph (d)(1) of
this section, a failure to satisfy the conditions upon which a
certificate(s) was issued and hence a sale of vehicles not covered by
the certificate, all occur upon the expiration of the deadline for
offsetting debits specified in paragraph (d)(1) of this section.
* * * * *
(e) * * *
(2) A manufacturer may not sell credits that are not available for
sale pursuant to the provisions in paragraphs (c)(2) or (d)(2) of this
section.
* * * * *
(4) * * *
(ii) Failure to offset the debits within the required time period
will be considered a failure to satisfy the conditions upon which the
certificate(s) was issued and will be addressed pursuant to paragraph
(d)(3) of this section.
* * * * *
Sec. 86.1711-97 [Redesignated as Sec. 86.1711-99 and Amended]
21. Section 86.1711-97 is redesignated as Sec. 86.1711-99 and
amended by removing and reserving paragraph (b).
Sec. 86.1712-97 [Redesignated as Sec. 86.1712 and Amended]
22. Section 86.1712-97 is redesignated as Sec. 86.1712-99 and
amended by revising paragraphs (a)(2)(iii), (b)(1), and (b)(3)(vi), to
read as follows:
[[Page 986]]
Sec. 86.1712-99 Maintenance of records; submittal of information.
(a) * * *
(2) * * *
(iii) EPA engine family, or if applicable for model year 1999 or
2000, the California engine family;
* * * * *
(b) * * *
(1) Each covered manufacturer shall submit an annual report. Except
as provided in paragraph (b)(2) of this section, the annual report
shall contain, for each averaging set, the fleet average NMOG value
achieved, all values required to calculate the NMOG value, the number
of credits generated or debits incurred, and all the values required to
calculate the credits or debits. For each applicable region (NTR and
ASTR), the annual report shall contain the resulting balance of credits
or debits.
* * * * *
(3) * * *
(vi) Region (NTR or ASTR) to which the credits belong.
* * * * *
Sec. 86.1713-97 [Redesignated as Sec. 86.1713-99]
23. Section 86.1713-97 is redesignated as Sec. 86.1713-99.
Sec. 86.1714-97 [Redesignated as Sec. 86.1714-99]
24. Section 86.1714-97 is redesignated as Sec. 86.1714-99.
Sec. 86.1716-97 [Redesignated as Sec. 86.1716-99 and Amended]
25. Section 86.1716-97 is redesignated as Sec. 86.1716-99 and
amended by removing and reserving paragraph (b).
Sec. 86.1717-97 [Redesignated as Sec. 86.1717-99 and Amended]
26. Section 86.1717-97 is redesignated as Sec. 1717-99 and amended
by revising the section heading, to read as follows:
Sec. 86.1717-99 Emission control diagnostic system for 1999 and later
light-duty vehicles and light-duty trucks.
* * * * *
Sec. 86.1721-97 [Redesignated as Sec. 86.1721-99]
27. Section 86.1721-97 is redesignated as Sec. 86.1721-99.
Sec. 86.1723-97 [Redesignated as Sec. 86.1723-99]
28. Section 86.1723-97 is redesignated as Sec. 86.1723-99 and is
revised to read as follows:
Sec. 86.1723-99 Required data.
The provisions of Sec. 86.096-23 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.096-23(c)(1) and subsequent model
year provisions apply to this subpart, with the following addition:
(1) For all TLEVs, LEVs, and ULEVs certifying on a fuel other than
conventional gasoline, manufacturers shall multiply the NMOG exhaust
certification level for each emission-data vehicle by the appropriate
reactivity adjustment factor listed in Sec. 86.1777(d)(2)(i) or
established by the Administrator pursuant to Appendix XVII of this part
to demonstrate compliance with the applicable NMOG emission standard.
For all TLEVs, LEVs, and ULEVs certifying on natural gas, manufacturers
shall multiply the NMOG exhaust certification level for each emission-
data vehicle by the appropriate reactivity adjustment factor listed in
Sec. 86.1777(d)(2)(i) or established by the Administrator pursuant to
Appendix XVII of this part and add that value to the product of the
methane exhaust certification level for each emission-data vehicle and
the appropriate methane reactivity adjustment factor listed in
Sec. 86.1777(d)(2)(ii) or established by the Administrator pursuant to
Appendix XVII of this part to demonstrate compliance with the
applicable NMOG emission standard. Manufacturers requesting to certify
to existing standards utilizing an adjustment factor unique to its
vehicle/fuel system must follow the data requirements described in
Appendix XVII of this part. A separate formaldehyde exhaust
certification level shall also be provided for demonstrating compliance
with emission standards for formaldehyde.
(2) [Reserved]
(b) The provisions of Sec. 86.096-23(l) introductory text and
subsequent model year provisions do not apply to this subpart. The
following shall instead apply to this subpart:
(1) Additionally, manufacturers certifying vehicles shall submit
for each model year 2001 through 2004 light-duty vehicle and light
light-duty truck engine family, the information listed in Sec. 86.096-
23(l)(1) and (2). If applicable, manufacturers shall also submit
``Alternative or Equivalent Phase-in Schedules'' before or during
calendar year 2001 for light-duty vehicles and light light-duty trucks.
(2) [Reserved]
(c) In addition to the provisions of Sec. 86.096-23 and subsequent
model year provisions, the following requirements shall apply to this
subpart:
(1) For each engine family certified to TLEV, LEV, or ULEV
standards, manufacturers shall submit with the certification
application, an engineering evaluation demonstrating that a
discontinuity in emissions of non-methane organic gases, carbon
monoxide, oxides of nitrogen and formaldehyde measured on the Federal
Test Procedure (subpart B of this part) does not occur in the
temperature range of 20 to 86 deg F. For diesel vehicles, the
engineering evaluation shall also include particulate emissions.
(2) [Reserved]
Sec. 86.1724 [Redesignated as Sec. 86.1724-99 and Amended]
29. Section 86.1724-97 is redesignated as Sec. 86.1724-99 and
amended by revising paragraph (b) introductory text and adding
paragraph (b)(2), to read as follows:
Sec. 86.1724-99 Test vehicles and engines.
* * * * *
(b) The provisions of Sec. 86.096-24(b) and subsequent model year
provisions apply to this subpart with the following additions:
* * * * *
(2) For vehicles certified to the SFTP exhaust emission standards,
if air conditioning is projected to be available on any vehicles within
the engine family, the selection of engine codes will be limited
selections which have air conditioning available and would require that
any vehicle selected under this section has air conditioning installed
and operational.
Sec. 86.1725-97 [Redesignated as Sec. 86.1725-99 and Amended]
30. Section 86.1725-97 is redesignated as Sec. 86.1725-99 and
amended by adding paragraph (d), to read as follows:
Sec. 86.1725-99 Maintenance.
* * * * *
(d) When air conditioning SFTP exhaust emission tests are required,
the manufacturer must document that the vehicle's air conditioning
system is operating properly and that system parameters are within
operating design specifications prior to testing. Required air
conditioning system maintenance is performed as unscheduled maintenance
that does not require the Administrator's approval.
Sec. 86.1726-97 [Redesignated as Sec. 86.1726-99 and Amended]
31. Section 86.1726-97 is redesignated as Sec. 86.1726-99 and
[[Page 987]]
amended by revising paragraph (c)(1), to read as follows:
Sec. 86.1726-99 Mileage and service accumulation; emission
measurements.
* * * * *
(c) * * *
(1) For vehicles certified to the SFTP exhaust emission standards,
complete exhaust emission tests will include both the FTP and the SFTP
tests. The Administrator will accept the manufacturer's determination
of the mileage at which the engine-system combination is stabilized for
emission data testing if (prior to testing) a manufacturer determines
that the interval chosen yields emissions performance that is stable
and representative of design intent. Sufficient mileage should be
accumulated to reduce the possible effects of any emissions variability
that is the result of insufficient vehicle operation. Of primary
importance in making this determination is the behavior of the
catalyst, EGR valve, trap oxidizer or any other part of the ECS which
may have non-linear aging characteristics. In the alternative, the
manufacturer may elect to accumulate 4,000 mile +/-250 miles on each
test vehicle within an engine family without making a determination.
* * * * *
Sec. 86.1728-97 [Redesignated as Sec. 86.1728-99]
32. Section 86.1728-97 is redesignated as Sec. 86.1728-99.
Sec. 86.1734-97 [Redesignated as Sec. 86.1734-99]
33. Section 86.1734-97 is redesignated as Sec. 86.1734-99.
Sec. 86.1735-97 [Redesignated as Sec. 86.1735-99]
34. Section 86.1735-97 is redesignated as Sec. 86.1735-99.
Sec. 86.1770-97 [Redesignated as Sec. 86.1770-99 and Amended]
35. Section 86.1770-97 is redesignated as Sec. 86.1770-99 and
amended by revising paragraph (a)(2), to read as follows:
Sec. 86.1770-99 All-Electric Range Test requirements.
* * * * *
(a) * * *
(2) Driving schedule.
(i) Determination of All-Electric Range--Highway. At the end of the
cold soak period, the vehicle shall be placed, either driven or pushed,
onto a dynamometer and operated through an Urban Dynamometer Driving
Schedule, found in 40 CFR part 86, Appendix I, until the vehicle is no
longer able to maintain within 5 miles per hour of the speed
requirements or within 2 seconds of the time requirements of the
driving schedule. For hybrid electric vehicles, this determination
shall be performed without the use of the auxiliary power unit.
(ii) Determination of All-Electric Range--Urban. At the end of the
cold soak period, the vehicle shall be placed, either driven or pushed,
onto a dynamometer and operated through a Highway Fuel Economy Driving
Schedule, found in 40 CFR part 600, Appendix I, until the vehicle is no
longer able to maintain within 5 miles per hour of the speed
requirements or within 2 seconds of the time requirements of the
driving schedule. For hybrid electric vehicles, this determination
shall be performed without the use of the auxiliary power unit.
* * * * *
Sec. 86.1771-97 [Redesignated as Sec. 86.1771-99]
36. Section 86.1771-97 is redesignated as Sec. 86.1771-99.
Sec. 86.1772-97 [Redesignated as Sec. 86.1772-99 and Amended]
37. Section 86.1772-97 is redesignated as Sec. 86.1772-99 and
amended by revising the section heading, to read as follows:
Sec. 86.1772-99 Road load power, test weight, and inertia weight
class determination.
* * * * *
Sec. 86.1773-97 [Redesignated as Sec. 86.1773-99 and Amended]
38. Section 86.1773-97 is redesignated as Sec. 86.1773-99 and
amended by adding paragraph (d), to read as follows:
Sec. 86.1773-99 Test sequence; general requirements.
* * * * *
(d) A manufacturer has the option of simulating air conditioning
operation during testing at other ambient test conditions provided it
can demonstrate that the vehicle tailpipe exhaust emissions are
representative of the emissions that would result from the SC03 cycle
test procedure and the ambient conditions of paragraph 86.161-00. The
Administrator has approved two optional air conditioning test
simulation procedures, AC1 and AC2, for the 2001 to 2003 model years
only. If a manufacturer desires to conduct an alternative SC03 test
simulation other than AC1 and AC2, or the AC1 and AC2 simulations for
the 2004 and subsequent model years, the simulation test procedure must
be approved in advance by the Administrator.
Secs. 86.1774-97 through 86.1780-97 [Redesignated as Secs. 86.1774-99
through 86.1780-99]
39. Section 86.1774-97 is redesignated as Sec. 86.1774-99.
40. Section 86.1775-97 is redesignated as Sec. 86.1775-99.
41. Section 86.1776-97 is redesignated as Sec. 86.1776-99.
42. Section 86.1777-97 is redesignated as Sec. 86.1777-99.
43. Section 86.1778-97 is redesignated as Sec. 86.1778-99.
44. Section 86.1779-97 is redesignated as Sec. 86.1779-99.
45. Section 86.1780-97 is redesignated as Sec. 86.1780-99.
Appendix XVIII to part 86 [Amended]
46. Appendix XVIII to part 86 is amended by redesignating the
second of the two paragraphs currently designated as (b)(3) as
paragraph (b)(4).
[FR Doc. 97-33314 Filed 12-31-97; 8:45 am]
BILLING CODE 6560-50-P
