00-5388. Optional Certification Streamlining Procedures for Light-Duty Vehicles, Light-Duty Trucks, and Heavy-Duty Engines for Original Equipment Manufacturers and for Aftermarket Conversion Manufacturers; Final Rule

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is adopting a fee waiver provision for vehicles certified with “closed” fuel systems and for vehicles certified to the Clean-Fuel vehicle (CFV) standards. EPA is also adopting a provision for calculating eligibility for a partial fee waiver for vehicles converted to operate on a gaseous fuel. EPA proposed this provision in a Notice of Proposed Rulemaking (NPRM) published on July 20, 1998, at 63 FR 38767, to provide incentives for the manufacturer of CFVs by easing the burden of certification for manufacturers of these vehicles. EPA is not adopting certain other provisions proposed in that document.

The fee waivers adopted today will be effective for the 2000 Model Year (MY) and will continue through MY 2003. This action will reduce the cost of certification for manufacturers certifying a small-volume engine family to CFV standards. In addition, it is anticipated this action will provide a financial incentive for automobile and engine manufacturers to increase the number of offerings of alternatively fueled vehicles to private owners and fleet owners. Manufacturers who qualify for the fee waivers and who have already paid their fees for 2000 MY vehicles will be eligible for a complete refund. EPA estimates that overall manufacturers will save about $100,000 during each of the next four model years due to this provision.

EFFECTIVE DATE:

This rule is effective April 6, 2000.

ADDRESSES:

Materials relevant to this final rule are contained in Docket No. A-97-27, located at the Air Docket, 401 M Street SW, Washington, DC 20460, and may be reviewed in Room M-1500 from 8 a.m. until 5:30 p.m. on business days. The telephone number is [phone] and the facsimile number is [phone]. As provided in 40 CFR Part 2, EPA may charge a reasonable fee for photocopying docket materials.

FOR FURTHER INFORMATION CONTACT:

Mr. Clifford Tyree, Senior Project Manager, U.S. EPA, National Vehicle and Fuel Emission Laboratory, Vehicle Programs and Compliance Division, 2565 Plymouth Road, Ann Arbor, MI 48105-2425. Telephone: [phone]; FAX [phone]. E-Mail, [e-mail].

SUPPLEMENTARY INFORMATION:

Regulated Entities

Entities potentially regulated by this action are Original Equipment Manufacturers (OEMs) of Light-Duty Vehicles, Light-Duty Trucks (LDTs), and Heavy-Duty Engine (HDEs) manufacturers. In addition, aftermarket converters of LDVs, LDTs, and HDEs will also be regulated. Entities include:

Category	Examples of regulated entities
Auto industry of light-duty vehicles, light-duty trucks, and heavy-duty engines	Original Equipment Manufacturers (OEMs) and Aftermarket Converters.

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 product is regulated by this action, you should carefully examine the applicability criteria in § 86.094-1 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular product, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Obtaining Electronic Copies of the Regulatory Documents

The preamble, regulatory 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 a 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/​cff.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.

Table of Contents

I. Introduction

II. Content of the Final Rule

A. Definition of Dedicated Vehicle (or Engine)

B. Engine Family Criteria and Assigned Deterioration Factors

C. Fees

III. Projected Impacts

A. Environmental Impact

B. Economic Impact

IV. Public Participation

V. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

D. Unfunded Mandates Reform Act

E. Congressional Review Act

F. National Technology Transfer and Advancement Act

G. Protection of Children

H. Enhancing Intergovernmental Partnerships

I. Consultation and Coordination With Indian Tribal Governments

J. Executive Order 13132, Federalism Policies

VI. Statutory Authority

I. Introduction

The goal of the proposed amendments was to ease the burden of certification for manufacturers of vehicles and engines certified with closed fuel systems and for manufacturers of Clean-Fuel vehicles (CFV), to increase the supply of such vehicles. This overall increase in the supply of such vehicles will also result in a broader selection of vehicles certified to CFV standards for fleet operators subject to the purchasing requirements of state Clean-Fuel Fleet Programs (CFFP) under section 246 of the Clean Air Act. EPA proposed to (1) Revise the definition for dedicated vehicle (or engine) in 40 CFR 86.092-90 to include CFVs with limited ability to operate on a conventional fuel, (2) amend the current regulations to allow manufacturers of CFVs to group certain engine families together for certification purposes, and (3) exempt certain manufacturers for MY 1999, 2000, and 2001, from certification fees for vehicles with closed fuel systems and for CFVs.

II. Content of the Final Rule

A. Definition of Dedicated Vehicle (or Engine)

EPA is not adopting the proposed changes to the definition of a dedicated vehicle (or engine) for the reasons described below. EPA received four comments expressing support for this provision, but also expressing concern that the proposed definition would add complexity and confusion for the consumer.

EPA proposed to revise the current definition of dedicated vehicle (or engine) to encompass vehicles with limited ability to operate on a second fuel. The emergency fuel supply of the second fuel would be limited to a fuel capacity that would only allow a 50-mile range or, operation for one hour in three hours of driving. Some commenters felt strongly that the operators would find a way to circumvent the limitations on the use of the second fuel. For example, the electronic limit of one hour of operation in three could easily be tampered with. They also felt that some operators would choose to operate on the gasoline in non-emergency situations, even if the total capacity would only allow a 50-mile range.

EPA received several comments arguing that any vehicle called “dedicated” should only be capable of operating on one fuel. They stated that the option of an emergency fuel supply within the definition of “dedicated” would erode consumer knowledge and understanding of the work they have accomplished in producing vehicles which would not have the emergency fuel supply.

EPA has considered the comments received and concludes that it is best to keep the current definition of dedicated vehicle (or engine) intact and, therefore, the proposed change is not being adopted today. EPA believes that at this time it cannot ensure that amending the definition of dedicated vehicle as proposed will not result in consumer confusion about alternative fueled vehicles. Therefore, vehicles with a limited ability to operate on a second fuel will continue to be considered dual-fueled vehicles.

B. Engine Family Criteria and Assigned Deterioration Factors

In light of recently adopted amendments to EPA's certification regulations EPA has decided not to adopt the proposed engine family criteria and assigned deterioration factors (DFs) proposed in the NPRM. ^[1] The flexibility that would have been provided by the proposed definition of “Engine Family Class” is for the most part encompassed in the “Durability group determination” and the “Test group determination” provisions of the CAP 2000 amendments.^{[2] [,] [3]} Because the CAP 2000 amendments provide the majority of relief proposed for light-duty vehicles, it is unnecessary to adopt the proposed provisions.

The CAP 2000 rules do not apply to heavy-duty engines and the proposed durability requirements would have required specific durability data submissions for heavy-duty engines. Some commenters stated that the proposed changes were more restrictive than current regulations, therefore the heavy-duty manufacturers would not likely exercise the options that would be provided by the proposed provisions. Since the changes would have been optional and because it appears unlikely the heavy-duty engine manufacturers would use the options that would have been provided by the proposed provisions, EPA has decided not to adopt the proposed changes for heavy-duty engines.

Several commenters noted that a 1995 EPA guidance document (CD-95-14), would expire with the 2000 MY. This Agency guidance document provided assigned deterioration factors for gaseous-fueled vehicles and engines for small-volume manufacturers as provided in 40 CFR 86.094-14(a)(2) and 86.094-14(c)(7)(i)(C). The commenters noted that the Agency has previously indicated its intent to extend the applicability of the assigned deterioration factors to reflect both the new sales-volume limit for small-volume manufacturers as provided in the CAP 2000 provisions and to include assigned deterioration factors for heavy-duty engines qualified to use additive deterioration factors. EPA did not indicate in the NPRM any intent to revise this guidance. This issue is outside the scope of today's action, and EPA intends to address this issue in a separate context.

C. Fees

EPA is finalizing the proposed fee waiver provisions, for the reasons described below and in the NPRM. Every commenter addressing the fees issue supported this proposed amendment.

Several commenters who supported EPA's proposal recommended expanding the scope of the fee waiver. One fleet operator recommended the fee waiver be extended indefinitely. One commenter wanted the fee waiver to be retroactive to the date of the Notice of Proposed Rulemaking, July 20, 1998. One commenter wanted all of the 1999 model year fees to be refunded for all alternative fueled vehicles. For the reasons described below, EPA is finalizing the proposed fee waiver for MY 2000 vehicles and engines meeting LEV or better emissions standards, and for MY 2000 dedicated gaseous fuel vehicles and engines. In addition, EPA is adopting a provision through which manufacturers who have certified such vehicles for MY 2000 can seek a refund of certification fees. Finally, EPA is extending the fee waiver through MY 2003, two years beyond the proposed waiver.

EPA disagrees with the commenter who recommends the fee waiver be extended indefinitely. The purpose of the fee waiver is to encourage manufacturers to produce and certify clean fuel vehicles, and gaseous fueled vehicles, as described in the NPRM. EPA does not believe that it is necessary or appropriate to provide a fee waiver beyond a specific, short-term time period as an incentive to manufacturers. Once clean fuel vehicles and gaseous fueled vehicles are certified and in use, it is reasonable to expect that consumers, including fleets, will continue to provide a market for such vehicles. Therefore, an indefinite or significantly longer term fee waiver is not needed.

EPA also does not believe it is appropriate to make the fee waiver and refunds retroactive to MY vehicles before MY2000. While EPA believes it is appropriate to provide a short-term fee waiver for certain vehicles for the reasons described in the NPRM, to the extent manufacturers certified clean fuel vehicles and gaseous fueled vehicles in prior model years, they clearly believed it was a wise business decision to do so even without the incentive provided by a fee waiver or refund. Since the purpose of the waiver is to encourage certification of such vehicles, that purpose is not served by refunding or waiving fees from prior model years.^[4]

EPA received comments requesting the fee waiver extend at least through MY 2004. One commenter indicated that original equipment manufacturers (OEMs) plan for model year introduction 3 and 4 years in advance, and therefore it is appropriate for EPA to waive certification fees for those vehicles and engines which manufacturers are currently beginning to develop. Commenters also noted that EPA's emission standards are expected to be revised beginning with MY 2004, making a fee waiver through this period a convenient bridge to the new standards.

EPA is adopting a fee waiver provision for clean fuel vehicles and dedicated alternative fuel vehicles that applies through MY 2003. EPA is aware that certain fleets continue to experience difficulty in obtaining appropriate clean fuel vehicles to meet fleet program purchase requirements. Moreover, further development of the alternative fuel refueling infrastructure would help enable such fleets to have a broader choice of qualifying vehicles from which to choose. For these reasons, EPA proposed a fee waiver to extend for three model years (MY 1999-2001). Based on the effective date of today's action, a three-model-year fee waiver provision adopted today would apply through MY 2002. EPA believes that it is appropriate to extend the waiver provision for an additional model year, to encourage manufacturers to begin development of clean fuel vehicles and dedicated alternative fuel vehicles for introduction into commerce in the future. Those manufacturers who do need four years to plan for vehicle introduction are thus assured of a fee waiver for MY 2003.

EPA disagrees with commenters who recommended the fee waiver extend at least through MY 2004, to provide a bridge to implementation of EPA's Tier 2 standards. As described in this notice and in the NPRM, the fee waiver is primarily intended to encourage manufacturers to certify and produce vehicles and engines to meet the purchase requirements of fleet operators subject to clean fuel fleet program purchase requirements. It was not proposed as a means to facilitate implementation of new emissions standards. For this reason, and because EPA believes a four-model-year period is sufficient to provide an initial encouragement for the production of clean fuel vehicles and dedicated alternative fuel vehicles, EPA is not extending the fee waiver beyond MY 2003.

Several commenters wanted the fee waiver to apply to flexible- and dual-fuel vehicles. EPA is finalizing the proposal to waive fees for dedicated Tier 1 gaseous fueled vehicles, for the reasons described in the NPRM. EPA is not including Tier 1 flexible- and dual-fuel vehicles in the full fee waiver because EPA cannot ensure the vehicles will be operated using the alternative fuel. However, as described below, EPA believes it is appropriate to provide a more limited incentive for manufacturers to certify such vehicles.

One commenter claimed the need to include flexible- and dual-fuel vehicles is consistent with the Congressional intent under Energy Policy Act (EPAct) to reduce dependency on foreign oil. This fee waiver is not intended to further the purposes of EPAct, which is a statute administered by the Department of Energy (DOE). Also, for the reason already stated in the NPRM and above, the fee waiver will apply only to dedicated fuel systems.

EPA's fee waiver proposal was issued in July 1998, and, at that time, EPA expected the fee waiver would begin to apply no later than MY 2000, based on the expected date of promulgation of the final rule. However, due to the delay in taking final action on the proposed provisions, some manufacturers have already certified vehicles to the Low-Emissions Vehicles (LEV), Inherently-LEV (ILEV), Ultra LEV (ULEV), or Zero-Emissions Vehicles (ZEV) emissions standards for MY 2000. EPA is adopting a provision to refund the certification fees paid for such vehicles, as well as any dedicated gaseous fueled Tier 1 vehicles, to provide equity in charging of fees in MY 2000. EPA does not want to penalize those manufacturers who certified these cleaner vehicles early in the model year, prior to promulgation of these regulations. Therefore, manufacturers of such vehicles can request a refund of certification fees from EPA. This refund provision, in combination with the fee waiver provision, results in an appropriate, equitable, and nondiscriminatory fee schedule, for the reasons described in the NPRM, and because it avoids penalizing manufacturers who have already certified such vehicles for MY 2000.

Several commenters noted a discrepancy between the preamble and the proposed rule. In the preamble, EPA clearly identified vehicles and engines with “closed” fuel systems certified to Tier 1 standards as eligible for a fee waiver.^[5] The proposed amendments to the regulatory language did not reflect this provision. This oversight is corrected in today's action and any vehicle or engine with a dedicated “closed” fuel system is eligible. A vehicle or engine with a dual-fuel system or flexible-fuel system would not be eligible for a fee waiver. Vehicles certified only to California emissions standards would also not be eligible for a fee waiver.

One of the existing fee waiver provisions, found at 40 CFR 86.908-93(a), provides a waiver from the full fee if the projected sales are anticipated to be such that a full fee would exceed 1% of the retail value. For example, if the retail sales price—based on the National Automobile Dealer's Association appraisal—is $25,000.00, then the manufacturer would pay 1% of this value or $250.00 for each vehicle until the maximum applicable fee is reached. Several commenters recommended EPA change the way the 1% value was determined. These commenters argued that the value added during the conversion process is the value that should be the basis of the 1% fee waiver calculations. EPA agrees that the calculation method for the one percent waiver in the current regulations often results in manufacturers paying the full certification fee for conversions where production volume exceeds approximately one hundred vehicles or engines. Under the regulations adopted today, conversions to clean fuel vehicles or to dedicated gaseous fueled Tier 1 vehicles would be eligible for a full fee waiver. However, conversions to dual-and flexible-fueled Tier 1 vehicles would not. EPA believes it is appropriate to provide an incentive for certification of such vehicles, since they are likely to operate on a cleaner fuel (e.g., gaseous fuel, with lower evaporative and refueling emissions) at least some of the time. While EPA cannot ensure that such vehicles operate on the cleaner fuel all of the time, the Agency believes that consumers who purchase dual-and flexible-fueled vehicles do so because they intend to operate on the cleaner fuel to the extent practicable, but wish to have the ability to operate on gasoline or diesel in the event refueling facilities for the cleaner fuel are not readily available at a particular time. Encouraging the certification, production, and market penetration of these vehicles will also support a broader refueling infrastructure for gaseous fuels, which benefits the clean fuel fleet program (since a number of clean fuel fleet vehicles are expected to be gaseous fueled vehicles). In addition, to the extent such vehicles are operated on gaseous fuels, environmental benefits are achieved through lower evaporative and refueling emissions. For these reasons, EPA is revising its current regulations for converted vehicles that can operate on gaseous fuels to provide for calculation of the one percent fee waiver based on the value added to the retail value of the vehicle, or engine, by the conversion. This calculation method will apply through MY 2003 (the same time period as the full fee waiver for clean fuel vehicles and Tier 1 dedicated gaseous fuel systems). While EPA believes this incentive in the form of a different calculation method for the one percent waiver is an appropriate incentive for encouraging the production of such vehicles, the Agency does not believe a full fee waiver is appropriate, since we cannot ensure that the vehicles will be operated on the cleaner fuel.

III. Projected Impacts

A. Environmental Impact

Today's action will have no adverse effects on air quality, since all current emissions standards and requirements continue to apply to vehicles and engines affected by today's action. EPA believes that this action encourages manufacturers to develop and market vehicles and engines with innovative, new emissions control technology, ultimately resulting in broader market penetration of CFVs and clean alternative fuels.

B. Economic Impact

By waiving certification fees for qualifying vehicles, this action reduces the regulatory burden on industry without adversely affecting air quality. EPA anticipates that the new provisions should result in environmental benefits through encouraging increased production and use of low emission vehicles and engines.

IV. Public Participation

The Agency provided the opportunity for a Public Hearing for the proposed rule, if requested. No public hearing was requested. An extension of the comment period was requested and, in a Federal Register notice on September 11, 1998, the comment period was extended from August 19, 1998 to October 13, 1998. This Notice also informed interested parties that no public hearing had been requested.

A total of twenty-eight comments were received. A summary of these comments and EPA's analysis and responses to those comments are contained in a separate Response To Comments document located in the Docket A-97-27.

V. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

Under Executive Order 12866 (58 FR 51735, October 4, 1993), 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 “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or,

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

It has been determined that this rule is not a “significant regulatory action” under the terms of the Executive Order 12866 and is therefore not subject to OMB review.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601-612 generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. This final rule will not have a significant impact on a substantial number of small entities because EPA is not imposing any new requirements, and any impact will be to reduce costs.

C. Paperwork Reduction Act

The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., requires agencies to submit for OMB review and approval, federal requirements and activities that result in the collection of information from ten or more persons. Information collection requirements may include reporting, labeling, and Recordkeeping requirements. Federal agencies may not impose penalties on persons who fail to comply with collections of information that does not display a currently valid OMB control number.

Today's action does not impose any new information collection burden. The Office of Management and Budget (OMB) has previously approved the information collection requirements under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0104 (EPA ICR No. 0783).

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instruction; 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 requirement; train personnel to be able to respond to a collection of information; search for data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

Copies of the ICR document(s) may be obtained from Sandy Farmer, OPPE Regulatory Information Division; EPA; 401 M St., SW (mail code 2137); Washington, DC 20460 or by calling [phone]. Include the ICR and/or OMB number in any correspondence.

D. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 (signed into law on March 22, 1995) requires that EPA prepare a budgetary impact statement before promulgating a rule that includes a federal mandate that may result in expenditure by state, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year. Section 203 of the Unfunded Mandates Reform Act requires EPA to establish a plan for obtaining input from and informing, educating and advising any small governments that may be significantly or uniquely affected by the rule.

Under section 205 of the Unfunded Mandates Act, EPA must identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a budgetary impact statement must be prepared. EPA must select from those alternatives the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule, unless EPA explains why this alternative is not selected or the selection of this alternative is inconsistent with law.

Because this rule is expected to result in the expenditure by state, local and tribal governments or private sectors of less than $100 million in any one year, EPA has not prepared a budgetary impact statement or specifically addressed selection of the least costly, most cost-effective or least burdensome alternative. Because small governments will not be significantly or uniquely affected by this rule, EPA is not required to develop a plan with regard to small governments.

E. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

F. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d)(15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (such as materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This final rule does not involve consideration of any new technical standards.

G. Protection of Children

Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant,” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This final rule is not subject to Executive Order 13045 because it is not economically significant as defined in E.O. 12866, and because the Agency does not have reason to believe environmental health or safety risks addressed by this action present a disproportionate risk to children. To the extent this action encourages the certification and use of CFVs, as expected, any resulting effect on children's health will be positive through reduced emissions of certain pollutants, such as VOC's, NOX, and PM.

H. Enhancing the Intergovernmental Partnership

Under Executive Order 12875, EPA may not issue a regulation that is not required by statute and that creates a mandate upon a State, local or tribal government, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by those governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 12875 requires EPA to provide to the Office of Management and Budget a description of the extent of EPA's prior consultation with representatives of affected State, local and tribal governments, the nature of their concerns, copies of any written communications from the governments, and a statement supporting the need to issue the regulation. In addition, Executive Order 12875 requires EPA to develop an effective process permitting elected officials and other representatives of State, local and tribal governments “to provide meaningful and timely input in the development of regulatory proposals containing significant unfunded mandates.”

Today's rule does not create a mandate on State, local or tribal governments. The rule does not impose any enforceable duties on these entities. This rule will be implemented at the federal level and imposes compliance obligations only on private industry. Accordingly, the requirements of section 1(a) of Executive Order 12875 do not apply to this rule.

I. Consultation and Coordination With Indian Tribal Governments

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to the Office of Management and Budget, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

Today's rule does not significantly or uniquely affect the communities of Indian tribal governments. This rule will be implemented at the federal level and imposes compliance obligations only on private industry. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

J. Executive Order 13132, Federalism Policies

On August 4, 1999, President Clinton issued a new executive order on federalism, Executive Order 13132, [64 FR 43255 (August 10, 1999)] which will take effect on November 2, 1999. In the interim, the current Executive Order 12612 [52 FR 41685 (October 30, 1987)] on federalism still applies. This rule will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 12612.

Today's rule does not create a mandate on State or local. The rule does not impose any enforceable duties on these entities. This rule will be implemented at the federal level and imposes compliance obligations only on private industry. Accordingly, the requirements of Executive Order 13132 do not apply to this rule.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

Section 4 of the Executive Order contains additional requirements for rules that preempt State or local law, even if those rules do not have federalism implications (i.e., the rules will not have substantial direct effects on the States, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government). Those requirements include providing all affected State and local officials notice and an opportunity for appropriate participation in the development of the regulation. If the preemption is not based on express or implied statutory authority, EPA also must consult, to the extent practicable, with appropriate State and local officials regarding the conflict between State law and Federally protected interests within the agency's area of regulatory responsibility.

This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This rule contains provisions for waivers of certification fees for certain manufacturers of new motor vehicles and engines. The requirements of the rule will be enforced by the federal government at the national level. Thus, the requirements of section 6 of the Executive Order do not apply to this rule. In addition, EPA provided state and local officials an opportunity to comment on the proposed regulations. A summary of concerns raised by commenters, including state and local commenters, and EPA's response to those concerns, is found in the Response to Comments document for this rulemaking.

Although this rule was proposed before the November 2, 1999 effective date of Executive Order 13132, EPA provided State and local officials notice and an opportunity for appropriate participation when it published the proposed rule, as described above. Thus, EPA has complied with the requirements of section 4 of the Executive Order.

VI. Statutory Authority

Authority for the actions set forth in this notice of proposed rulemaking is granted to the EPA by sections 217, and 301(a) of the Clean Air Act as amended (42 U.S.C. 7552 and 7601(a))

List of Subjects in 40 CFR Part 86

• Environmental protection
• Administrative practice and procedure
• Confidential business information
• Labeling
• Motor vehicle pollution
• Reporting and recordkeeping requirements

Dated: February 24, 2000.

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 86—[AMENDED]

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

Authority: 42 U.S.C. 7401-7671q.

2. Section 86.908-93 is amended by adding paragraphs (a)(1)(iii) and (d) to read as follows:

§ 86.908-93

Waivers, and refunds.

(a) * * *

(1) * * *

(iii) For converted vehicles that are dual- or flexible-fuel vehicles and can operate on a gaseous fuel, the full fee for a certification request for a MY exceeds 1% of the value added to the vehicle by the conversion, for MY 2000 through 2003.

* * * * *

(d)(1) For model years 2000 through 2003, the required fees under this subpart shall be waived for any light-duty vehicle, light-duty truck, or heavy-duty engine family that meets the small volume sales requirements of § 86.1838-01 and:

(i) Is a dedicated gaseous-fueled vehicle or engine OR;

(ii) Receives a certificate of conformity with the LEV, ILEV, ULEV, or ZEV emissions standards in 40 CFR part 88.

(2) If the manufacturer does not receive a certificate of conformity with the LEV, ILEV, ULEV, or ZEV emissions standards in 40 CFR part 88 as required in paragraph (d)(1)(iii) of this section, the fee requirements of this section will apply. Before any certificate can be issued, the applicable fee must be paid.

(3) Manufacturers that have paid certification fees for model year 2000 vehicle and engine families that meet the criteria in paragraph (d)(1) of this section may request a refund of such fees. EPA shall refund such fees if it determines that the vehicle or engine family meets the criteria of paragraph (d)(1) of this section.

Footnotes

1.  40 CFR Part 9 et al.; Control of Air Pollution From New Motor Vehicles; Compliance programs for New Light-Duty Vehicles and Light-Duty Trucks; Final Rule, 85 FR 23905, May 4, 1999 (the “CAP 2000” regulations).

2.  40 CFR 86.1820-01 “Durability group Determination”

3.  40 CFR 86.1827-01 “Test group Determination”

4.  As described below, EPA is providing an opportunity for certain manufacturers to request a refund of fees for MY 2000. This is to provide equity for all manufacturers of similar vehicles for a particular model year, and therefore the reasoning for this limited refund provision does not support extending the refund to prior model years. In addition, EPA's calculation of fees that could be refunded for MY 2000 under the provision adopted today shows that the total possible amount that could be refunded is relatively small (less than $75,000).

5.  See 63 FR 38771.