[Federal Register: January 3, 1996 (Volume 61, Number 2)] [Proposed Rules] [Page 140-145] From the Federal Register Online via GPO Access [wais.access.gpo.gov] ======================================================================= ----------------------------------------------------------------------- [[Page 140]] ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 85, 86, and 88 [AMS-FRL-5347-2] RIN 2060-AF87 Sales Volume Limit Provisions for Small-Volume Manufacturers Certification of Clean-Fuel and Conventional Vehicle Conversions and Related Provisions AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of proposed rulemaking (NPRM). ----------------------------------------------------------------------- SUMMARY: On September 21, 1994, EPA published a final rule establishing emission standards for natural gas- and liquified petroleum gas-fueled vehicles and engines (``Gaseous Fuels Rule''). On September 30, 1994, EPA published the final rule establishing emission standards for clean- fuel vehicles (CFVs) and engines and requirements for CFV conversions (``CFV Standards Rule''). Included in each rule were provisions intended to extend the applicability of the existing vehicle sales volume limit under EPA's Small-Volume Manufacturers (SVM) certification program (10,000 vehicles) to aftermarket vehicle converters. In the case of the Gaseous Fuels Rule, the existing 10,000-vehicle volume limit was promulgated for aftermarket conversions as a final rule. In the case of the CFV Standards Rule, the 10,000 vehicle limit was presented as a direct final rule, to become final only in the absence of adverse comment. Since adverse comments were received within the allotted time, the vehicle limit provision is not effective, and EPA is removing this provision elsewhere in today's Federal Register. In its place, this action proposes to establish the basic 10,000 vehicle/engine total annual sales eligibility limit for vehicle converters seeking CFV certification under the Small-Volume Manufacturers provisions. In addition, EPA proposes to implement a short-term mechanism which would allow converters of alternative fuel vehicles to petition EPA for an increase in the allowable volume limit when the nature of their business operations are substantially different than that of original equipment manufacturers. To encourage the production of Inherently-Low Emission Vehicles (ILEVs), this action also proposes to allow additional options for external ILEV label dimensions. In this action, EPA is also proposing to amend two California Pilot Program (CPP) requirements: the method for determining a manufacturer's CFV sales quota and the method for administering CPP credits. Finally, this proposal includes several additional technical amendments to the regulations issued under Clean Fuel Fleet Program and California Pilot Program final rules (40 CFR part 86, subparts A and N, and 40 CFR part 88, subparts A, B, and C). In the Final Rules section of this Federal Register, EPA is finalizing these technical amendments to the Clean Fuel Fleet Program and California Pilot Program as a direct final rule without prior proposal because the Agency views these technical amendments as noncontroversial and anticipates no adverse comments. A detailed description of these technical amendments is set forth in the direct final rule. If no adverse comments are received in response to that direct final rule, no further activity is contemplated in relation to the technical amendments in this proposed rule. If EPA receives adverse comments, the affected portions of the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. EPA will not institute a second comment period on this proposed rule. This proposal would reduce the regulatory burden for industry (especially the aftermarket conversion industry), and it is highly accommodating to their concerns. In addition, this proposal would clarify and streamline existing regulations for certifiers and purchasers of clean-fuel and/or alternative fuel vehicles. DATES: Comments on this proposal will be accepted until February 2, 1996. Additional information on the procedure for submitting comments can be found under ``Public Participation'' in the SUPPLEMENTARY INFORMATION section. ADDRESSES: Interested parties may submit written comments in response to this action (in duplicate if possible) to Public Docket Nos. A-92-30 and A-92-14 for conversion provisions and Public Docket No. A-92-69 for CPP provisions, at: Air Docket Section, U.S. Environmental Protection Agency, Attention: Docket Nos. A-92-30, A-92-14, or A-92-69, First Floor, Waterside Mall, Room M-1500, 401 M Street SW., Washington, DC 20460. A copy of the comments should also be sent to Mr. Bryan Manning (SRPB-12), U.S. EPA, Regulation Development and Support Division, 2565 Plymouth Road, Ann Arbor, MI 48105. Materials relevant to this action have been placed in Docket Nos. A-92-30 and A-92-14 or A-92-69 by EPA. The docket is located at the above address and may be inspected from 8:00 a.m. to 5:30 p.m. on weekdays. EPA may charge a reasonable fee for copying docket materials. FOR FURTHER INFORMATION CONTACT: Mr. Bryan Manning (SRPB-12), U.S. EPA, Regulation Development and Support Division, 2565 Plymouth Road, Ann Arbor, MI 48105, Telephone: (313) 741-7832; FAX: 313-741-7816. SUPPLEMENTARY INFORMATION: I. Introduction A. Accessing Electronic Copies of Rulemaking Documents through the Technology Transfer Network Bulletin Board System (TTNBBS) A copy of this action is available through TTNBBS under OMS, Rulemaking and Reporting, Alternative Fuels, Clean Fuel Fleets. TTNBBS is available 24 hours a day, 7 days a week except Monday morning from 8-12 EST, when the system is down for maintenance and backup. For help in accessing the system, call the systems operator at 919-541-5384 in Research Triangle Park, North Carolina, during normal business hours EST. B. Background 1. The Small-Volume Manufacturers (SVM) Certification Program. As is shown in 40 CFR 86.094-14, the Small-Volume Manufacturers (SVM) certification program exempts entities seeking a Certificate of Conformity with total annual vehicle/engine sales less than 10,000 from EPA's full certification program. Specifically, the SVM provisions relieve such entities from some elements otherwise required to demonstrate the durability of emissions over the life of the vehicle. Instead of accumulating mileage on actual prototype vehicles, the SVM program in some cases permits the use of EPA-assigned values for emission deterioration. This can be of significant economic benefit to entities manufacturing or converting relatively few vehicles. In the Gaseous Fuels (59 FR 48472) and the CFV Standards (59 FR 50042) rules, EPA intended to apply the SVM program to aftermarket converters in the same way the Agency has applied it to manufacturers of complete ``original equipment'' vehicles (OEMs), including the sales volume limit of 10,000 annual sales. Discussions of EPA's perspective on this regulatory provision were presented in Section II, Part B of the CFV Emission Standards Final Rule (See [[Page 141]] 59 FR 50063-50064; September 30, 1994) and Section III.I. of the Gaseous Fuels Final Rule (See 59 FR 48486; September 21, 1994). 2. Comments and EPA Responses. In response to the SVM program volume limit provisions of the CFV Standards Final Rule and the Gaseous Fuels Final Rule, EPA received comments from the Natural Gas Vehicle Coalition (NGVC) objecting to an annual sales volume limit of 10,000 vehicles applying to converters seeking to certify under the provisions for small volume manufacturers. NGVC's primary comments were based on the concept that, in general, the nature and the economics of the conversion business is fundamentally different than the nature and economics of the OEM industry. Specifically, NGVC stated that the sale price of the respective products are very different. The OEM sells a complete vehicle, usually for well over $10,000. By comparison, an aftermarket converter begins with existing vehicles and adds new fueling technology, using equipment that typically costs around $1500, according to NGVC. From an economic perspective, this difference means that an OEM producing a certain number of vehicles will generally have more ability to absorb certification costs than a converter producing a similar number of vehicles. This is because the OEM could usually allocate part of the certification cost to each vehicle with less relative impact on the overall sale price than can a converter selling only the add-on equipment and installation. NGVC requested the limit under the SVM provisions be raised to 30,000 for alternative fuel converters. This higher limit, NGVC believes, would remove the incentive for converters to limit sales to 10,000 or less in order to qualify for the SVM program (i.e., 10,000 sales volume limit is a detriment to the sales of alternative fuel conversions). NGVC's suggested 30,000 volume limit is based on their expectation that, within the next few years, a typical conversion system manufacturer will wish to offer certified kits for between 15 and 30 engine families, and average sales are likely to be 1,000 to 2,000 per engine family. According to NGVC's estimates of certification costs, the added cost of durability testing for engine families certified under the basic (non-SVM) program could double the total development and certification costs. NGVC believes that as sales of certified kits grow beyond 30,000, sales of the more popular engine families can be expected to reach 4,000 to 5,000 per engine family. At this level of sales, NGVC believes that the per-vehicle cost of full certification would become more reasonable. NGVC also expressed concerns about other aspects of EPA's full certification program as they apply to conversions. They commented that certification on an engine family-by-family basis should be replaced by a grouping of engine families, since certification costs for low- production families are high on a per-vehicle basis. Second, NGVC presented their view that durability testing of conversion prototypes is duplicative of the OEM durability testing that would have already been done on the base vehicle. EPA has considered each of these comments and proposes provisions in today's action which we believe addresses each concern. In general, EPA believes that there is and will continue to be a useful role for certified alternative fuel conversions in environmental and energy policy in the coming years. Further, EPA understands NGVC's argument that the economic nature of the conversion business differs substantially from that of the OEM business and that certification costs, whether under full certification or not, will tend to be relatively more burdensome for converters than for OEMs. Thus, in many cases, EPA believes that equity in terms of economic burden for certification for converters as compared to OEMs may warrant different treatment under the certification protocols for the two types of business activity. However, the justification provided by NGVC for the specific sales volume limit of 30,000 lacked sufficient data and analysis to prove or disprove the appropriateness of any specific sales level. The cost of certification per vehicle is a function of whether relief from some certification protocols is available and the number of vehicles produced under a certificate. These variable factors exist in the context of the likely variety of business situations of future converters, some of which will be better able to recover additional costs from their customers than others. All of these factors will affect the level of sales at which the certification burden for an individual converter might become low enough to approach that of a typical OEM SVM. EPA is thus not prepared at this time to propose a specific volume limit for all converters beyond the existing 10,000 unit limit. Regarding the comments relating to the burden of the broader certification process, EPA is also proposing in today's action to reduce certification burden for converters by providing flexibility in the regulations for determining deterioration factors. (See section II.B. for further description of this proposed action.) In addition, EPA is acting administratively, independent of this action, to provide additional flexibility to gaseous-fueled converters for determining their deterioration factors. EPA recently assigned deterioration factors for vehicles converted to operate on gaseous fuels.1 Manufacturers may use mathematically derived assigned deterioration factors or generate their own deterioration factors using an abbreviated durability protocol (shortened-durability test of only 25,000 miles of operation). EPA believes that these temporary measures would greatly reduce the effort and expense required by this emerging industry. \1\ The assigned deterioration factors and the abbreviated durability protocol are expected to be specified in a ``Dear Manufacturer'' letter that would be available in docket A-92-14 and A-92-30 and on TTNBBS. --------------------------------------------------------------------------- II. Description of Action A. Sales Volume Limit Provisions Today's proposal is presented in two parts. First, to be consistent with the SVM provisions for OEM's and conventional conversions, EPA proposes to establish the 10,000 vehicle/engine sales volume limit for CFV converters under the small volume manufacturers provisions. In addition, EPA proposes to make a waiver process available to alternative fuel vehicle converters which provides the opportunity for a converter to petition EPA to permit the use of SVM certification provisions at annual sales levels of 10,000 and above. This provision would be available for manufacturers converting vehicles/engines which meet 40 CFR 85 requirements (conventional conversions) and for those converting vehicles which meet 40 CFR 88 requirements (CFV conversions). Converters would need to demonstrate the need for a higher limit based on, but not limited to, data such as company sales projections and cost analysis or other information indicating that certification costs on a per-vehicle basis will be substantially greater than those for an OEM vehicle manufacturer. An analysis indicating why the specific volume limit requested is appropriate would also be necessary. In no case could the limit for any manufacturer exceed 30,000 total units. Converters would have to apply for a new waiver each model year. EPA is proposing that this waiver process be available for a period of 5 years, through model year (MY) 2000. However, EPA also asks comment on whether a longer time period is more [[Page 142]] appropriate, and if so, what period of time and why. EPA believes that having the petition process end by a specific date is necessary since the future conversion market is uncertain. This provision is most critical during the next several years as the alternate fuel vehicle conversion industry begins business in earnest in response to CAA, Energy Policy Act, and other alternative fuel fleet and vehicle programs at the state and local levels. With the anticipated sales growth in the industry as a whole and for the individual certifiers of conversions, the ability to recover certification costs increases over time. Conversely, since the difference in business activity and economics between converters and OEMs will not totally disappear with time, a longer term petition process may provide greater parity in certification cost between converters and OEMs. In any event, since certification costs tend to be relatively more burdensome for converters than for OEMs and EPA believes in equity in terms of economic burden for certification, the proposed petition process would only apply to aftermarket conversions and not producers of complete OEM vehicles. B. Technical Amendments to the Clean Fuel Fleet Program and California Pilot Program The technical amendments to the Clean Fuel Fleet Program and California Pilot Program that EPA considers to be noncontroversial will be finalized as a direct final rule (entitled, ``Requirements for Determining Assigned Deterioration Factors for Alternative Fuel Vehicles, Amendments to Labelling Requirements for Inherently Low- Emission Vehicles, and Related Provisions'') in the final rules section of today's Federal Register. These technical amendments pertain to 40 CFR part 86, subparts A and N, and 40 CFR part 88, subparts A, B, and C. See the information provided in the direct final rule for a detailed description of these technical amendments. III. Environmental and Economic Impacts The nature of today's proposed approach to the sales volume limit for the Small-Volume Manufacturers certification program is such that no impact on air quality should result. Given that there are no converters which have received a certificate as yet, it appears unlikely that any such entity will approach the 10,000 vehicle level for a few years. If and when that does occur, the result of a successful petition by a converter to increase the SVM sales volume limit will not seriously compromise EPA's confidence that certified emission levels are being met in use. The SVM provisions, while providing some relief in the requirements for durability demonstration, still do require an assessment of durability. While some loss of control could theoretically occur if the reduced durability demonstration were in serious error, the Agency does not believe that this is likely to be common and in any event the numbers of vehicles involved is not large in comparison to conventional vehicle production. Today's proposed action may have a substantial economic benefit for converters. Depending on the sales level, the result of a successful petition by a converter to increase the SVM sales volume limit and thus be exempt from durability testing, could cut in half an engine family's development and certification costs. For the relaxed ILEV labelling requirements, EPA believes that if the smaller but distinctive ILEV labels are used on an ILEV, they would still be able to be clearly identified by law enforcement officials. EPA expects that these changes would help encourage manufacturers to develop and produce ILEVs, which would in turn have a positive environmental impact relative to conventional vehicles. With these proposed changes to the CPP program, EPA would ease the certification burden for manufacturers with no effect on air quality. This result would occur because the same number of vehicles will be sold under the CPP industry-wide; only the relative allocations among manufacturers might change. In today's proposal, EPA would reduce the regulatory burden on industry without effecting air quality. EPA believes this proposal is highly accommodating to industry's concerns. IV. Public Participation EPA desires full public participation in arriving at its final decisions, and therefore solicits comments on all aspects of today's proposal. Wherever applicable, full supporting data and detailed analysis should be submitted to allow EPA to make maximum use of the comments. Commenters are especially encouraged to provide specific suggestions for any changes to any aspect of the regulations that they believe need to be modified or improved. All comments should be directed to EPA Air Docket, Docket No. A-92-30 and A-92-14 for the conversion provisions and Docket No. A-92-69 for the CPP provisions (See ADDRESSES). The official comment period will last for 30 days following publication of today's proposal. Commenters desiring to submit proprietary information for consideration should clearly distinguish such information from other comments to the greatest possible extent, and clearly label it ``Confidential Business Information.'' Submissions containing such proprietary information should be sent directly to the contact person listed above, and not to the public docket, to ensure that proprietary information is not inadvertently placed in the docket. Information covered by such a claim of confidentiality will be disclosed by EPA only to the extent allowed and by the procedures set forth in 40 CFR part 2. If no claim of confidentiality accompanies the submission when it is received by EPA, it may be made available to the public without further notice to the commenter. V. Statutory Authority The statutory authority for this action is granted by Sections 202, 203, 206, 207, 241, 242, 243, 244, 245, 246, 247, 249, and 301(a) of the Clean Air Act. VI. Administrative Designation and Regulatory Analysis Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the Agency must determine whether this regulatory action is ``significant'' and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The order defines ``significant regulatory action'' as one that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the 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, EPA believes that this proposal is not a ``significant regulatory action'' within the meaning of the Executive Order. This proposal provides greater flexibility for converters seeking to certify under the small volume [[Page 143]] manufacturers provisions, thus eliminating some of the certification burden for nearly all converters. ILEV labelling requirements have been proposed to be relaxed, reducing some of the certification burden for certifiers of alternative fuel vehicles. Today's proposal also reduces the certification burden for manufactures required to produce CFVs under the CPP, by providing more flexibility in CFV production planning and credit reporting. VII. Compliance with Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) of 1980 requires federal agencies to examine the effects of federal regulations and to identify significant adverse impacts on a substantial number of small entities. Because the RFA does not provide concrete definitions of ``small entity'', ``significant impact'', or ``substantial number'', EPA has established guidelines setting the standards to be used in evaluating impacts on small businesses.2 Section 604 of the Regulatory Flexibility Act requires EPA to prepare a Regulatory Flexibility Analysis when the Agency determines that there is a significant adverse impact on a substantial number of small entities. \2\ U.S. Environmental Protection Agency Memorandum to Assistant Administrators, ``Compliance With the Regulatory Flexibility Act'', EPA Office of Policy, Planning, and Evaluation, 1984. In addition, U.S. Environmental Protection Agency, Memorandum to Assistant Administrators, ``Agency's Revised Guidelines for Implementing the Regulatory Flexibility Act'', EPA Office of Policy, Planning, and Evaluation, 1992. --------------------------------------------------------------------------- Today's proposal will allow many if not all converters to certify their conversions under the small volume certification provisions. EPA has evaluated the effects of today's proposed regulation and the Administrator of EPA certifies that there would not be an adverse impact on a substantial number of small entities; in fact, most small converters will experience an economic benefit. Therefore, a Regulatory Flexibility Analysis has not been performed for this rule. VIII. Unfunded Mandates Under section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA must prepare a written statement to accompany any proposed or final rule where the estimated costs to State, local, or tribal governments, or to the private sector will be $100 million or more in any one year. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objective of the rule and that is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly and uniquely impacted by the rule. EPA estimates that the costs to State, local, or tribal governments, or the private sector, from this proposal would be less than $100 million. EPA has determined that this proposal would reduce the regulatory burden imposed on certifiers of clean-fuel and/or alternative fuel vehicles (especially converters of such vehicles). EPA has determined that an unfunded mandates statement therefore is unnecessary. IX. Paperwork Reduction Act The information collection requirements for converters in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paper Reduction Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR) document has been prepared by EPA (ICR No. 783.34) and a copy may be obtained from Sandy Farmer, OPPE Regulatory Information Division; U.S. Environmental Protection Agency (2136); 401 M St., S.W.; Washington, DC 20460 or by calling (202) 260-2740. Today's proposal does not add any mandatory information collection requirements for converters or any other entity, but EPA has prepared an Information Collection Request document for this proposal since the collection of information would be needed for some converters to obtain or retain the benefit of SVM certification (collection of information required to obtain or retain a benefit). (Under section 301(a) of the Clean Air Act, the Administrator has the general authority ``... to prescribe such regulations as are necessary to carry out his functions under this Act.) For aftermarket converters who choose to petition EPA to be included under the SVM provisions at a higher sales volume, basic data on the projected sales, cost of certification, and why the specific volume limit requested is appropriate would need to be included in the petition to demonstrate economic hardship of the current sales volume limit. This ICR would be an amendment to the base Certification Program ICR, and the same confidentiality provisions in the base Certification Program ICR would apply to this ICR as well. For this ICR, the projected annual average cost and hour burden (reporting and recordkeeping) for respondents would be $4,800 and 80 hours, respectively for the five year period 1996 through 2000 model year. For five respondents at five hours per response, the annual average reporting burden would be 60 hours. This converter ICR does not include capital and start-up costs, operation and maintenance costs, and purchases of services costs for the following reasons: there is not any testing burden associated with this ICR and prior to certification the respondents would have collected the necessary information for their own planning purposes. 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 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. Comments are requested 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. Send comments on the ICR to the Director, OPPE Regulatory Information Division; U.S. Environmental Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked ``Attention: Desk Officer for EPA.'' Include the ICR number in any correspondence. Since OMB is required to make a decision concerning the ICR between 30 and 60 days after Janaury 3, 1996, a comment to OMB is best assured of having its full effect if OMB receives it by February 2, 1996. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal. The information collection requirements of the Credit Program for [[Page 144]] California Pilot Test Program have been amended to reflect today's relaxation of the credit reporting requirements. These amended requirements have been approved by the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and have been assigned OMB control number 2060-0229. A copy of the Information Collection Request document (ICR No. 1590) may be obtained from Sandy Farmer, OPPE Regulatory Information Division, U.S. Environmental Protection Agency (2136); 401 M St. S.W.; Washington, DC 20460 or by calling (202) 260-2740. Send comments regarding this collection of information to the Director, OPPE Regulatory Information Division; U.S. Environmental Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked ``Attention: Desk Officer for EPA.'' Include the ICR number in any correspondence. List of Subjects 40 CFR Part 85 Environmental protection, Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Research, Warranties. 40 CFR Part 86 Environmental protection, Administrative practice and procedures, Confidential business information, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements. 40 CFR Part 88 Environmental protection, Motor vehicle pollution, Reporting and recordkeeping requirements. Dated: November 27, 1995. Carol M. Browner, Administrator. For the reasons set forth in the preamble, parts 85 and 88 of title 40 of the Code of Federal Regulations are proposed to be amended as follows: PART 85--[AMENDED] 1. The authority citation for part 85 is revised to read as follows: Authority: 42 U.S.C. 7507, 7521, 7522, 7524, 7525, 7541, 7542, 7543, 7547, 7601(a). 2. Section 85.501 of Subpart F is revised to read as follows: Sec. 85.501 General applicability. Sections 85.501 through 85.506 are applicable to aftermarket conversion systems for which an enforcement exemption is sought from the tampering prohibitions contained in section 203 of the Act. 3. Section 85.503 of subpart F is amended by revising paragraphs (a) and (b)(1) to read as follows: Sec. 85.503 Conditions of exemption. (a) As a condition of receiving an enforcement exemption from the tampering prohibitions contained in section 203 of the Act, an aftermarket conversion certifier must certify the aftermarket conversion system, using the applicable procedures in part 86 of this chapter, and meeting the applicable standards and requirements in Secs. 85.504, 85.505 and 85.506, and accept liability for in-use performance of the aftermarket conversion system as outlined in this part. (b) * * * (1) Install a conversion which has been certified as a new vehicle or engine, using the applicable procedures in part 86 of this chapter, and meeting the applicable standards and requirements in Secs. 85.504, 85.505 and 85.506; and * * * * * 4. A new Sec. 85.506 is added to subpart F, to read as follows: Sec. 85.506 Sales volume limit for the aftermarket conversion certifier under the small-volume manufacturers certification program. (a) The optional small-volume manufacturers certification procedures as described in 40 CFR 86.092-14 apply to aftermarket conversions assembled by aftermarket conversion certifiers with U.S. sales of fewer than 10,000 units. An aftermarket conversion certifier with sales greater than 10,000 per year may petition the Administrator for permission to use the small-volume manufacturers certification procedures for conversions certified on or before December 31, 2000. (1) The aftermarket conversion certifier shall demonstrate to the Administrator economic hardship of the 10,000 sales volume limit. At a minimum, the aftermarket conversion certifier shall provide to the Administrator the following data: company sales projections (by engine family), cost analysis indicating that certification costs on a per- vehicle basis will be substantially greater than those for an OEM vehicle manufacturer (i.e., incremental cost of full durability testing per vehicle), and an analysis indicating why the specific volume limit requested is appropriate. The Administrator may require additional data as he may deem necessary to demonstrate economic hardship of the 10,000 sales volume limit. The aftermarket conversion certifier must receive approval from the Administrator on a case by case basis to waive the 10,000 sales volume limit, and the certifier shall apply for a new waiver each model year. In no case shall the sales volume limit for any petitioner exceed 30,000. (2) For aftermarket conversions certified after December 31, 2000, the 10,000 sales volume limit in 40 CFR 86.094-14(b)(1) shall apply. (b) The sales volume limit provided in paragraph (a) of this section shall apply to the aggregate total of all vehicles sold by a given aftermarket conversion certifier at all of its installation facilities without regard to the model year of the original vehicles upon which the conversions are based. All vehicle sales will be included in calculating the aftermarket conversion certifier's aggregate total, including vehicle conversions performed under the requirements of this part 85 and 40 CFR part 88 (clean-fuel vehicle conversions), and all other vehicle conversions. Vehicle conversions not covered by this part 85 will be counted if they occur within the model year for which certification is sought. PART 88-CLEAN-FUEL VEHICLES 5. The authority citation for Part 88 continues to read as follows: Authority: 42 U.S.C. 7410, 7418, 7581, 7582, 7583, 7584, 7586, 7588, 7589, 7601(a). 6. Section 88.306-94 of subpart C is amended by revising paragraph (b)(3) to read as follows: Sec. 88.306-94 Requirements for a converted vehicle to qualify as a clean-fuel fleet vehicle. * * * * * (b) * * * (3) For the purpose of determining whether certification under the Small-Volume Manufacturers Certification Program pursuant to the requirements of 40 CFR 86.092-14 is permitted for the clean-fuel vehicle aftermarket conversion certifier, the 10,000 sales volume limit in 40 CFR 86.094-14(b)(1) shall apply. A clean-fuel vehicle aftermarket conversion certifier with sales greater than 10,000 per year may petition the Administrator for permission to use the small-volume certification procedures for conversions certified on or before December 31, 2000. [[Page 145]] (i) The clean-fuel vehicle aftermarket conversion certifier shall demonstrate to the Administrator economic hardship of the 10,000 sales volume limit. At a minimum, the clean-fuel vehicle aftermarket conversion certifier shall provide to the Administrator the following data: company sales projections (by engine family), cost analysis indicating that certification costs on a per-vehicle basis will be substantially greater than those for an OEM vehicle manufacturer (i.e., incremental cost of full durability testing per vehicle), and an analysis indicating why the specific volume limit requested is appropriate. The Administrator may require additional data as he may deem necessary to demonstrate economic hardship of the 10,000 sales volume limit. The clean-fuel vehicle aftermarket conversion certifier must receive approval from the Administrator on a case by case basis to waive the 10,000 sales volume limit, and the certifier shall apply for a new waiver each model year. In no case shall the sales volume limit for any petitioner exceed 30,000. (ii) For clean-fuel vehicle aftermarket conversion configurations certified after December 31, 2000, the 10,000 sales volume limit in 40 CFR 86.094-14(b)(1) shall apply. (iii) The sales volume limit provided in paragraphs (b)(3)(i) and (b)(3)(ii) of this section shall apply to the aggregate total of all vehicles sold by a given clean-fuel vehicle aftermarket conversion certifier at all of its installation facilities without regard to the model year of the original vehicles upon which the conversion configurations are based. All vehicle sales will be included in calculating the clean-fuel vehicle aftermarket conversion certifier's aggregate total, including vehicle conversions performed under the requirements of this part 88, and all other vehicle conversions. Vehicle conversions not covered by this part 88 will be counted if they occur within the model year for which certification is sought. * * * * * [FR Doc. 96-104 Filed 1-2-96; 8:45 am] BILLING CODE 6560-50-P