Motor Vehicle and Engine Compliance Program Fees for: Light-Duty
Vehicles; Light-Duty Trucks; Heavy-Duty Vehicles and Engines; Nonroad
Engines; and Motorcycles
[Federal Register: May 11, 2004 (Volume 69, Number 91)]
[Rules and Regulations]
[Page 26221-26252]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my04-32]
[[Page 26222]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85 and 86
[OAR-2003-09; FRL-7656-9]
RIN 2060-AJ62
Motor Vehicle and Engine Compliance Program Fees for: Light-Duty
Vehicles; Light-Duty Trucks; Heavy-Duty Vehicles and Engines; Nonroad
Engines; and Motorcycles
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This final rule updates the Motor Vehicle and Engine
Compliance Program fees regulation promulgated in 1992 under which the
Agency collects fees for certain Clean Air Act compliance programs
administered by EPA including those for light-duty vehicles and trucks,
heavy-duty highway vehicles and engines, and highway motorcycles.
Today's action updates existing fees to reflect the increased costs of
administering these compliance programs since the initial 1992
rulemaking. EPA is also adding a fee program for similar compliance
programs for certain nonroad engines and vehicles for which emission
standards have been finalized.
DATES: This final rule takes effect on July 12, 2004.
ADDRESSES: EPA has established a docket for this action under Docket ID
Number OAR-2002-0023. All documents in the docket are listed in the
EDOCKET index at http://www.epa.gov/edocket. Althought listed in the
index, some information is not publicly available, i.e., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically on
EDOCKET or in hard copy at: Docket, (EPA/DC), EPA West, Room B102, 1301
Constitution Ave., NW., Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding holidays.
The telephone number for the Public Reading Room is (202) 566-1744. The
telephone number for the Air Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Lynn Sohacki, Certification and
Compliance Division, Office of Transportation and Air Quality, U.S.
Environmental Protection Agency, 2000 Traverwood, Ann Arbor, Michigan
48105; telephone number: 734-214-4851, fax number: 734-214-4869; e-mail
address: sohacki.lynn@epa.gov or Trina D. Vallion, Certification and
Compliance Division, Office of Transportation and Air Quality, U.S.
Environmental Protection Agency, 2000 Traverwood, Ann Arbor, Michigan
48105, telephone number: 734-214-4449; fax number: 734-214-4869; e-mail
address: vallion.trina@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
Regulated Entities
Entities regulated by this rule are those which manufacture or seek
certification (``manufacturer'' or ``manufacturers'') of new motor
vehicles and engines (including both highway and nonroad). The table
below shows the category, North American Industry Classification System
(NAICS) Codes, Standard Industrial Classification (SIC) Codes and
examples of the regulated entities:
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NAICS codes
Category (1) SIC codes (2) Examples of potentially regulated entities
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Industry......................... 333111 3523 Farm Machinery and Equipment Manufacturing.
Industry......................... 333112 3524 Lawn and Garden Tractor and Home Lawn and
Garden Equipment Manufacturing.
Industry......................... 333120 3531 Construction Machinery Manufacturing.
Industry......................... 333131 3532 Mining Machinery and Equipment Manufacturing.
Industry......................... 333132 3533 Oil & Gas Field Machinery.
Industry......................... 333210 3553 Sawmill & Woodworking Machinery.
Industry......................... 333924 3537 Industrial Truck, Tractor, Trailer, and
Stacker Machinery Manufacturing.
Industry......................... 333991 3546 Power Driven Handtool Manufacturing.
Industry......................... 336111 3711 Automotive and Light-Duty Motor Vehicle
Manufacturing.
Industry......................... 336120 3711 Heavy-duty Truck Manufacturing.
Industry......................... 336213 3716 Motor Home Manufacturing.
Industry......................... 336311 3592 Motor Vehicle Gasoline Engine and Engine
Parts Manufacturing.
Industry......................... 336312 3714 Gasoline Engine & Engine Parts Manufacturing.
Industry......................... 336991 3751 Motorcycle, Bicycle, and Parts Manufacturing.
Industry......................... 336211 3711 Motor Vehicle Body Manufacturing.
Industry......................... 333618 3519 Gasoline, Diesel & dual-fuel engine
Manufacturing.
Industry......................... 811310 7699 Commercial & Industrial Engine Repair and
Maintenance.
Industry......................... 336999 3799 Other Transportation Equipment Manufacturing.
Industry......................... 421110 .............. Independent Commercial Importers of Vehicles
and Parts.
Industry......................... 333612 3566 Speed Changer, Industrial High-speed Drive
and Gear Manufacturing.
Industry......................... 333613 3568 Mechanical Power Transmission Equipment
Manufacturing.
Industry......................... 333618 3519 Other Engine Equipment Manufacturing.
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(1) North American Industry Classification System (NAICS)
(2) Standard Industrial Classification (SIC) system code.
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities 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 would
be regulated by this action, you should carefully examine the
applicability criteria in title 40 of the Code of Federal Regulations,
Parts 86, 89, 90, 91, 92 and 94; also Parts 1048 and 1051 when those
Parts are finalized. 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.
II. Obtaining Rulemaking Documents Through the Internet
Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the Federal Register
listings at http://www.epa.gov/fedrgstr/.
[[Page 26223]]
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.regulations.gov/ to view public comments,
access the index listing of the contents of the official public docket,
and to access those documents in the public docket that are available
electronically. Once in the system, select ``search,'' then key in the
docket identification number: OAR-2002-0023.
The preamble, regulatory language and regulatory support documents
are also available electronically from the EPA Internet Web site. This
service is free of charge. The official EPA version is made available
on the day of publication on the primary Web site listed below. The EPA
Office of Transportation and Air Quality also publishes these notices
on the secondary Web site listed below.
(1) http://www.epa.gov/fedrgstr/EPA-AIR/ (either select
desired date or use Search feature)
(2) http://www.epa.gov/OTAQ/ (look in ``What's New'' or under the
specific rulemaking topic)
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. What Are the Requirements of This Final Rule?
A. What Is the Finalized Fee Schedule?
B. Will the Fees Automatically Adjust To Reflect Future Inflation?
C. Will Fees Change To Reflect Changes in the Number of Certificates?
D. What Is the Procedure for Paying Fees?
E. What Is the Implementation Schedule for the New Fees?
F. What Are the Reduced Fees Provisions?
G. What Is the Finalized Policy for Refunds and Final Fee Payments?
III. What Are the Changes Made to the Proposed Cost Analysis?
A. Will There Be Fees for Yet-To-Be Regulated Industries?
B. Is There a Change in Costs for Heavy-duty Highway and Nonroad
CI Engines From the Proposal?
C. Is There a Change in the Number of Certificates?
D. Indirect Changes
IV. What Were the Opportunities for Public Participation?
V. What Were the Major Comments Received on the Proposed Rule?
A. Legal Authority
B. Assessment of Costs
C. Cost Study
D. Automatic Adjustment of Fees
E. Effective Date and Application of New Fees
F. Reduced Fees
G. ICI Issues
H. Other Topics
VI. What Is the Economic Impact of This Rule?
VII. What Are the Administrative Requirements for This Rule?
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act (RFA), as Amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5
U.S.C. 601 et seq.
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Children's Health Protection
H. Executive Order 13211: Energy Effects
I. National Technology Transfer and Advancement Act
J. Congressional Review Act
I. Introduction
Since 1992, EPA has assessed fees for the motor vehicle emissions
compliance program (MVECP). Since the initial MVECP fees regulation,
EPA has incurred additional costs and will continue to incur costs in
administering the light-duty and heavy-duty compliance programs for
motor vehicles and engines, and new compliance programs for nonroad
vehicles and engines. Today's final rule updates the MVECP fee
provisions to reflect these changes.
Today's final rule establishes fees under the authority of section
217 of the Clean Air Act (CAA) and the Independent Offices
Appropriation Act (IOAA) (31 U.S.C. 9701) to ensure that the MVECP is
self-sustaining to the extent possible. The services provided by EPA
are described in the section II.B. of the Notice of Proposed Rulemaking
(NRPM) (67 FR 51402). Because of comments received, EPA has adjusted
the fees collected per certificate for some industry categories. EPA
has created several new worksheets and a further explanation of the
changes in the worksheets. This updated cost analysis is available in
Docket OAR-2002-0023.
On September 19, 2002, EPA held a public hearing concerning the
proposed regulations. Comments from that hearing and written comments
are included in the public docket. Today's final rule addresses
comments received both before and after the close of the public comment
period. A discussion of certain comments received is contained in
section V below. You may also want to review the Response to Comments
document in the Docket OAR-2002-0023 which contains a detailed
discussion of many topics raised in this preamble and other comments
received and EPA's responses.
II. What Are the Requirements of This Final Rule?
EPA is adopting as final its proposed rule with a few changes. The
most significant changes are pointed out in sections II.A through II.G
below. Additional changes are listed in section III. A more detailed
discussion of the comments received is in the Response to Comments
Document in the docket for this rule.
A. What Is the Finalized Fee Schedule?
The following table indicates fees for light-duty vehicles (LD),
medium-duty passenger vehicles (MDPV), complete spark-ignition \1\
heavy-duty vehicles (SI HDV), motorcycles (MC), heavy-duty engines
(HDE), nonroad compression-ignition \2\ (NR CI) engines, nonroad spark-
ignition (NR SI) engines, marine engines (excluding inboard and
sterndrive engines), nonroad recreational vehicles and engines, and
locomotives. The table distinguishes fees for vehicles and engines that
are imported by independent commercial importers (ICIs) and also
distinguishes vehicles and engines certified for highway (HW) and
nonroad (NR) use.
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\1\ A spark-ignition engine is an engine that uses a spark
source, such as a spark plug, to initiate combustion in the
combustion chamber. Examples of fuels used in spark-ignition engines
are: gasoline, compressed natural gas, liquid petroleum gas and
alcohol-based fuels.
\2\ A compression-ignition engine is an engine that uses
compression to initiate combustion in the combustion chamber. Diesel
fuel is an example of a fuel used in compression-ignition engines.
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The following is the final fee schedule for each certification
request:
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Table II.A-1
[Fee Schedule]
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Category Certificate type a Fee
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LD, excluding ICIs.................. Fed Certificate....... $33,883
LD, excluding ICIs.................. Cal-only Certificate.. 16,944
MDPV, excluding ICIs................ Fed Certificate....... 33,883
MDPV, excluding ICIs................ Cal-only Certificate.. 16,944
Complete SI HDVs, excluding ICIs.... Fed Certificate....... 33,883
Complete SI HDVs, excluding ICIs.... Cal-only Certificate.. 16,944
ICIs for the following industries: All Types............. 8,387
LD, MDPV, or Complete SI HDVs.
MC (HW), including ICIs............. All Types............. 2,414
HDE (HW), including ICIs............ Fed Certificate....... 21,578
HDE (HW), including ICIs............ Cal-only Certificate.. 826
HDV (evap), including ICIs.......... Evap Certificate...... 826
NR CI engines, including ICIs, but All Types............. 1,822
excluding Locomotives, Marine and
Recreational engines.
NR SI engines, including ICIs....... All Types............. 826
Marine engines, excluding inboard & All Types and Annex VI 826
sterndrive engines, including ICIs.
All NR Recreational,b including All Types............. 826
ICIs, but excluding marine engines.
Locomotives, including ICIs......... All Types............. 826
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a Fed and Cal-only Certificate and Annex VI are defined in 40 CFR
85.2403.
b Recreational means the engines subject to 40 CFR 1051 which includes
off road motorcycles, all-terrain vehicles and snowmobiles.
This fee schedule will change in calendar year 2006 when the fees
will be adjusted for inflation and to reflect changes in the number of
certificates issued as explained in sections II.B and C.
B. Will the Fees Automatically Adjust To Reflect Future Inflation?
By function of today's rule fees will be automatically adjusted on
a calendar year basis to reflect inflation. A formula created by
today's rule will determine the fees each year by applying any change
in the consumer price index (CPI) to EPA's labor costs. The formula
that will be used by EPA to determine the total cost for each fee
category and subcategory \3\ is:
\3\ The light-duty category is divided into subcategories, Cert/
FE and In-use.
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Category Feecy = [F + (L* (CPICY-2/CPI2002))]*1.169
Category Feecy = Fee per category for the calendar year of
the fees to be collected.
F = Fixed costs within a category or subcategory.
L = Labor costs within a category or subcategory.
CPICY-2 = the consumer price index for all United States
(U.S.) cities using the ``U.S. city average'' area , ``all items'' and
``not seasonally adjusted'' numbers calculated by the Department of
Labor listed for the month of November of the year two years before the
calendar year (CY). (e.g., for the 2006 CY use the CPI based on the
date of November, 2004).
CPI2002 = the consumer price index for all U.S. cities using
the ``U.S. city average'' area, ``all items'' and ``not seasonally
adjusted'' numbers calculated by the Department of Labor for December,
2002. The actual value for CPI2002 is 180.9.
1.169 = Adds overall EPA overhead which is applied to all costs
The LD category has been split into Cert/FE and In-use
subcategories because not all LD certificates require direct EPA In-use
services. The costs were totaled from the labor and fixed costs of
worksheets #3 and #4 of the Cost Analysis. The values
of EPA's labor and fixed costs for the ICI, motorcycle, heavy-duty
highway engines, nonroad CI engines and Other categories were taken
from worksheet #1 of the Cost Analysis and are shown in the
table below:
Table II.B-1
[Fixed and Labor Costs by Fee Category]
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F L
------------------------------------------------------------------------
LD Cert/FE.................................. $3,322,039 $2,548,110
LD In-use................................... 2,858,223 2,184,331
LD ICI...................................... 344,824 264,980
MC HW....................................... 225,726 172,829
HD HW....................................... 1,106,224 1,625,680
NR CI....................................... 486,401 545,160
Other \4\................................... 177,425 548,081
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Light-duty manufacturers certifying vehicles for sale only in
California will determine the category fee by using the fixed and labor
values only for the LD Cert/FE subcategory.
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\4\ The Other category includes: HD HW evap, including ICI;
Marine (excluding inboard & sterndrive ) including ICI & Annex VI;
NR SI, including ICI; NR Recreational (non-marine), including ICI;
Locomotives, including ICI.
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Light-duty manufacturers certifying vehicles that will not be sold
only in California (federal vehicles) will determine a category fee
that incorporates the costs for both Cert/FE and In-use subcategories.
These manufacturers will determine the Cert/FE portion of the fees
using the above formula and LD Cert/FE F and L values and then
calculate the in-use portion of
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the fees by using the LD In-use F and L values. The light-duty federal
category fee will be the total of the Cert/FE and In-use fees.
The fee amount per certificate will be determined by dividing the
total cost for each certificate category by a rolling average of the
number of certificates as discussed below in section II.C. The
limitation of the applicability of the CPI to labor costs is a change
from the proposal. The removal of the non-labor costs from the portion
of EPA's costs to which the CPI will apply is a response to comments
received and is discussed in more detail in section 4 of the Response
to Comments document.
EPA will calculate new fees based on this established formula for
each certificate category in Table II.A-1 and publish the fees in a
``Dear Manufacturer'' letter or by similar means. The ``Dear
Manufacturer'' letters are also located on EPA's Web site:
http://www.epa.gov/otaq/cert/dearmfr/dearmfr.htm. The new fees will
also be located on EPA's Fees Web site: http://www.epa.gov/otaq/fees.htm.
The fees will be applicable by calendar year rather than model year. The
first year that the fees will be adjusted for inflation is calendar
year 2006.
C. Will Fees Change To Reflect Changes in the Number of Certificates?
EPA will adjust fees based on the total number of certificates \5\
issued to reflect the change in the cost of services provided by EPA
per certificate. As discussed in section II.B above, EPA will annually
adjust the amount of the labor costs in each fee category by the CPI
approximately 11 months before the new fees will apply. At the time
that the adjustment based on CPI is made, EPA will also adjust fees
based on the average of the total number of certificates issued in the
two completed model years previous to the adjustment. The full formula
that will be applied to adjust the fee amount for each category is:
\5\ For purposes of this preamble, the regulations and the cost
analysis, the term ``total number of certificates'' is used to
represent the number of certificate applications for which fees are
paid. This term is not intended to represent multiple certificates
which are issued within a single engine family or test group.
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Certificate Feecy = [F + L* (CPICY-2/CPI2002)]*1.169 / [(cert#MY-2 + cert#MY-3) * .5]
Certificate Feecy = Fee per certificate for the calendar year of the
fees to be collected
F = the fixed costs, not to be adjusted by the CPI
L = the labor costs, to be adjusted by the CPI
CPICY-2 = the consumer price index for all U.S. cities using
the ``U.S. city average'' area, ``all items'' and ``not seasonally
adjusted'' numbers calculated by the Department of Labor listed for the
month of November of the year two years before the calendar year.
(e.g., for the 2006 CY use the CPI based on the date of November, 2004).
CPI2002 = the consumer price index for all U.S. cities using
the ``U.S. city average'' area, ``all items'' and ``not seasonally
adjusted'' numbers calculated by the Department of Labor for December,
2002. The actual value for CPI2002 is 180.9.
1.169 = Adds overall EPA overhead which is applied to all costs
cert#MY-2 = the total number of certificates issued
for a fee category or subcategory model year two years prior to the
calendar year for applicable fees (Feecy)
cert#MY-3 = the total number of certificates issued
for a fee category or subcategory model year three years prior to the
calendar year for the applicable fees (Feecy)
Light-duty manufacturers certifying vehicles for sale only in
California will pay a fee determined by calculating the fees for the LD
Cert/FE subcategory and dividing by the average of the total number
(California and federal) of light-duty vehicle certificates issued in
the applicable model years.
Light-duty manufacturers certifying federal vehicles will pay fees
that incorporate the costs for both Cert/FE and In-use subcategories.
These manufacturers will determine the Cert/FE portion of the fees as
described above and divide by the total number (California and federal)
of light-duty certificates issued in the applicable model years.
Manufacturers will then calculate the in-use portion of the fees by
dividing the LD In-use by the average number of federal certificates
issued in the applicable model years. Manufacturers will determine the
total fee for light-duty federal certificates by adding the Cert/FE
fees and the In-use fees.
As an example, the first year for which the fees will be adjusted
is calendar year 2006. In January, 2005, EPA will adjust the total for
each fee category for the 2006 model year (MY) based on the CPI
published in November, 2004, and will divide the total fee amounts for
each category by the average of certificates issued for model years
2003 and 2004.
Fee2006 = [F + L* (CPI2004/CPI2002)]
*1.169 / [(cert#MY 2004 +
cert#MY 2003) * .5]
If an event such as a rulemaking occurs that causes a significant
change in the number of certificate applications received, the Agency
will reexamine the formula to determine whether adjusting the fees
based upon the number of certificate applications is still applicable.
EPA will notify manufacturers within 11 months of the calendar year
in which fees are adjusted by this section, with the new fees for each
category, the number of certificates for the appropriate model years
and the applicable CPI values after the November CPI values for each
year are made available by the U.S. Department of Labor. This
information will be available on EPA's Fees Web site:
http://www.epa.gov/otaq/fees.htm as well as EPA's ``Dear Manufacturer''
letter Web site: http://www.epa.gov/otaq/cert/dearmfr/dearmfr.htm.
This formula will result in an annual adjustment of fees to reflect
the change in the number of certificates issued by the EPA. This change
from the proposal to adjust fees as a result in a change in the number
of certificates is discussed more fully in the response to comments
document.
D. What Is the Procedure for Paying Fees?
As with the current regulations, fees must be paid in advance of
receiving a certificate. For each certification request manufacturers
and ICIs will submit a MVECP Fee Filing Form (filing form) and the
appropriate fee in the form of a corporate check, money order, bank
draft, certified check, or electronic funds transfer [wire or Automated
Clearing House (ACH)], payable in U.S. dollars, to the order of the
U.S. Environmental Protection Agency. A single fee will be paid when a
manufacturer or ICI submits an application for a single engine family
or test group that includes multiple evaporative families. It should be
noted that separate fees must be paid for each heavy-duty evaporative
family certificate application. The filing form and accompanying fee
will be sent to the address designated on the filing form. EPA will not
be responsible for fees sent to any location other than the designated
location. Applicants will continue to submit the application for
certification to the National Vehicle and Fuel Emission Laboratory
(NVFEL) in Ann Arbor, Michigan or to the Engine Programs Group in
Washington, DC.
To ensure proper identification and handling, the check or
electronic funds transfer and the accompanying filing form will
indicate the manufacturer's corporate name and the EPA
[[Page 26226]]
standardized test group or engine family name. The full fee is to
accompany the filing form. Partial payments or installment payments
will not be permitted. A banking institution may add an extra charge
for processing a wire or an ACH. The manufacturer is responsible for
any extra fees a banking institution may charge to perform these services.
E. What Is the Implementation Schedule for the New Fees?
The implementation date of the new fees is July 12, 2004. The final
fee schedule adopted in this final rule applies to 2004 and later model
year vehicles and engines where the certification application is
received on or after July 12, 2004. The new fees will not apply to 2004
and later model year certification applications received by EPA prior
to the effective date of the regulations, provided that the
applications are complete and include all required data. A description
of the items needed to constitute a complete application, for the
purposes of this fees rule, is included in section 5 of the Response to
Comments Document.
F. What Are the Reduced Fees Provisions?
EPA believes that an appropriate fee reduction policy can be
consistent with the premise underlying section 217 of the CAA: to
reimburse the government for the specific regulatory services provided
to an applicant. EPA recognizes that there may be instances, in the
case of small engine families, where the full fee may represent an
unreasonable economic burden. Therefore, EPA will allow manufacturers
to pay a fee based on 1.0 percent of the aggregate retail sales price
(or value) of the vehicles covered by a certificate. EPA believes this
best represents the proper balance between recovering the MVECP costs
without imposing an unreasonable economic burden. The reduced fees
provisions will continue to use the current two part test which, if
met, would qualify an applicant for a reduction of a portion of the
certification fee. The reduced fee is available in cases where:
(1) The certificate is to be used for the sale of vehicles or
engines within the U.S.; and
(2) The full fee for the certification request exceeds 1.0 percent
of the projected aggregate retail price of all vehicles or engines
covered by that certificate.
The reduced fee program for this rule provides two separate
pathways by which a manufacturer can request and pay a reduced fee
amount. The fee will be 1.0 percent of the aggregate retail price of
the vehicles and engines covered by the certificate with a refundable
minimum initial payment of $750. Each pathway specifies when
manufacturers are required to determine the price of the vehicles or
engines actually sold under a certificate and when to either pay
additional fees or seek a refund. Under both pathways the manufacturer:
(1) Pays a fully refundable initial payment of $750 or 1.0 percent
of the aggregate retail price of the vehicles or engines, whichever is
greater, with the request for a reduced fee.
(2) Receives a certificate for an estimated number of vehicles or
engines in the engine family to be covered by the certificate.
(3) Requests a revised certificate if the number of vehicles or
engines in the engine family exceeds that on the certificate.
(4) Is in violation of the Clean Air Act if the number of vehicles
or engines made or imported is greater than the number indicated on the
certificate.
The first pathway will be available for engine families having less
than 6 vehicles, none of which have a retail price of more than $75,000
each. Manufacturers seeking a reduced fee shall include in their
certification application a statement that the reduced fee is
appropriate under the criteria. If 1.0 percent of the aggregate retail
price of the vehicles or engines is greater than $750, the manufacturer
must submit a calculation of the reduced fee and the actual fee. If 1.0
percent aggregate retail price of the vehicles or engines is less than
$750 the manufacturer will submit a calculation of the reduced fee and
an initial payment of $750. In the event that the manufacturer does not
know the value of all of the vehicles to be imported under the
certificate, it may use the values of the vehicles or engines that are
available to determine the initial payment.
The manufacturer's evaluation and submission of a fee amount under
this reduced fee provision is subject to EPA review or audit. If the
manufacturer's statement of eligibility is accepted, the manufacturer
will receive a certificate for 5 vehicles or engines.
If the manufacturer's statement of eligibility or request of a
reduced fee is rejected by EPA then EPA may require the manufacturer to
pay the full fee normally applicable to it or EPA may adjust the amount
of the reduced fee that is due.
A manufacturer's statement that it is eligible for a reduced fee
can be rejected by EPA before or after a certificate is issued if the
Agency finds that manufacturer's evaluation does not meet the
eligibility requirements for a reduced fee, the manufacturer failed to
meet the requirements to calculate a final reduced fee using actual
sales data, or the manufacturer failed to pay the net balance due
between the initial and final reduced fee calculation (see below for
discussion of the final fee calculation, reporting and payment).
Within 30 days of the end of the model year, the applicant for a
reduced fee will provide EPA with a report called a ``report card'' to
aid our review of the applicant's statement of applicability. This
report shall include the total number of vehicles ultimately covered by
the certificate. The report card shall include information on all
certificates held by the manufacturer that were issued with a reduced
fee under the first pathway. For each certificate the report will
include a calculation of the actual final reduced fee due for each
certificate which is derived by adding up the total number of vehicles
and their sales prices and calculating 1.0 percent of the total, a
statement of the initial fees paid and the difference between the
initial payment and the total final fee for the manufacturer.
Manufacturers will be required to submit the report card within 30 days
of the end of the model year,\6\ EPA believes this is reasonable as
manufacturers should have final figures for each certificate by this time.
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\6\ Typically, this will be the first February 15 after a
certificate expires. Certificates generally expire on December 31 of
the model year.
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A manufacturer may request a refund if the final fee is less than
the initial payment. If the final fee is greater than the initial
payment, manufacturers will be required to ``true-up'' or submit the
final reduced fee due as calculated in the report card within 45 days
of the end of the model year. This is a change from the NPRM in which
EPA proposed that manufacturers would only have to pay the final
reduced fee if the difference between the final fee and the initial
payment was greater than $500. The decision to eliminate a minimum
final reduced fee was made as a result of comments regarding EPA's
proposed refund policy. This is discussed more fully in the ``What is
the Finalized Policy for Refunds and Final Fee Payments?'' section
below and in section 8 of the Response to Comments Document.
In addition, EPA may require that manufacturers submit a report
card, with the same or similar information as noted above, for previous
model years. The purpose of such report card would be to give EPA
assurance that the
[[Page 26227]]
manufacturer has demonstrated a continuous capability of submitting the
necessary year-to-year report cards and that appropriate fees have been
paid. This will assist EPA in its determination as to whether a
manufacturer is capable of adequately projecting its annual sales for
reduced fee purposes and whether the manufacturer shall remain eligible
for the reduced fee provisions.
Under this pathway, if a manufacturer fails to report within 30
days or pay the balance due by 45 days of the end of the model year,
then EPA may refuse to approve future reduced fee requests from that
manufacturer. In addition, if a manufacturer fails to report within 30
days and pay the balance due by 45 days of the end of the model year as
noted above then the Agency may deem the applicable certificate void ab
initio.
The second pathway is available for engine families that contain
more than 5 vehicles or engines and/or have at least one vehicle or
engine with a retail price of more than $75,000. Manufacturers seeking
a reduced fee under this pathway include in their applications a
statement that the reduced fee is appropriate under the criteria and a
calculation of the amount of the reduced fee (1.0 percent of the
aggregate retail price of vehicles or engines) or an initial payment of
$750, whichever is greater. As in the first pathway, the manufacturer's
evaluation and submission of a fee amount under this reduced fee
provision is subject to EPA review or audit. If the manufacturer's
statement of eligibility is accepted, the manufacturer will receive a
certificate for the number of vehicles or engines to be covered by the
certificate.
If the manufacturer's statement of eligibility or request of a
reduced fee is rejected by EPA then EPA may require the manufacturer to
pay the full fee normally applicable to it or EPA may adjust the amount
of the reduced fee that is due.
A manufacturer's statement that it is eligible for a reduced fee
can be rejected by EPA before or after a certificate is issued if the
Agency finds that the manufacturer's evaluation does not meet the
eligibility requirements for a reduced fee.
At the end of the model year, the manufacturer may request a refund
if the final fee is less than the initial payment. Manufacturers with
certificates issued with reduced fees under this pathway will not be
required to submit the report card and true-up described above under
the first pathway.
Under either pathway, if the manufacturer realizes that it will
make or import more vehicles or engines than the number specified on
the certificate, the manufacturer must revise the application for
certification to reflect the new number of vehicles or engines to be
covered and request a revised certificate with an increased number of
vehicles or engines indicated. At the time of revision, the
manufacturer must pay 1.0 percent of the aggregate retail price of the
number of vehicles or engines that are being added to the certificate.
The additional fee must be received by the Agency and the certificate
must be revised and issued before the additional vehicles or engines
may be sold or imported in the United States. If a manufacturer imports
or sells more vehicles or engines than that indicated on the
certificate, the manufacturer will be in violation of the CAA for
selling or importing uncertified vehicles (those over and above the
number indicated on the original certificate.)
In the case of vehicles or engines which have originally been
certified by an original equipment manufacturer (OEM) but are being
modified to operate on an alternative fuel, the cost basis for the
reduced fee amount is the value-added by the conversion, not the full
cost of the vehicle or engine.
On the other hand, ICI vehicle or engine certificates cover
vehicles or engines which are imported into the U.S. and that were not
originally certified by an OEM. As such, EPA costs associated with
providing various MVECP services for these vehicles has not yet been
recovered. Since the Agency has not received a fee payment for the
``base vehicle'' or the vehicle imported before its conversion to meet
U.S. emissions requirements, the cost basis for calculating a reduced
fee for an ICI certification shall be based upon the full cost of the
vehicle or engine rather than the cost or value of the conversion.
For ICI requests, EPA will continue the current requirement to
calculate the full cost of a vehicle based on a vehicle's average
retail price listed in the National Automobile Dealer's Association
(NADA) price guide. By using the NADA price guide to establish a
vehicle's retail sales price (or value), EPA ensures uniformity and
fairness in charging fees. Further, it avoids certain problems such as
falsification of entry documents, in particular, sales receipts. Where
the NADA price guide does not provide the retail price of a vehicle,
and in the case of engines, the applicant for a reduced fee must
demonstrate to the satisfaction of the Administrator the actual market
value of the vehicle or engine in the United States at the time of
final importation. When calculating the aggregate retail sales price of
vehicles or engines under the reduced fee provisions such calculation
must not only include vehicles and engines actually sold but also those
modified under the modification and test options in 40 CFR 85.1509 and
40 CFR 89.609 and those imported on behalf of a private or another
owner. Furthermore, EPA is clarifying its policy such that importation
of modification and test vehicles and engines will only be allowed
under certificates that cover that type of vehicle or engine. For
example, light-duty modification and test vehicles must be imported
only under light-duty certificates, motorcycle modification and test
vehicles must be imported only under motorcycle certificates.
EPA expected the new fees rule to apply during the 2003 model year
and thus we did not anticipate any time gap between the existing fee
provisions for alternative fuel conversion vehicles--which ran through
the 2003 model year--and the implementation of the new reduced fees
provisions for such vehicles. Therefore, by today's rule EPA is
amending section 86.908-93(a)(1)(iii) in order for those 2004 model
year vehicles that are converted to dual or flexible-fuel to still be
eligible, under the existing fees rule, to the reduced fees provisions.
Therefore, alternative fuel vehicle converters that received
certificates of conformity for 2004 model year vehicles may, after July
12, 2004, request a refund for the difference between the fee that they
paid and 1% of the value added by the vehicle conversion.
Previously EPA had an exemption of fees for small volume
certification requests for vehicles using alternative fuels through the
2003 model year. EPA believes that this program has completed its
purpose of providing a short-term relief for alternative fuel
conversion manufacturers. Therefore, starting with the 2004 model year,
EPA is no longer including this exemption for alternative fuel
convertors, and such convertors shall be subject to the same fee
provisions as other manufacturers. This includes the reduced fee
provisions.
We believe that this fee reduction program will provide adequate
relief for small entities that would otherwise encounter some economic
hardship by a standardized fee. It is important to note that this fee
reduction does not raise the fees for other manufacturers; EPA will
simply collect less funds.
The change in the reduced fee provisions results from comments
received regarding EPA's proposed reduced fee program as is discussed
[[Page 26228]]
more fully in section 6 of the Response to Comments Document.
G. What Is the Finalized Policy for Refunds and Final Fee Payments?
There are instances when an applicant submits a filing form with
the appropriate fee, has an application undergo a portion of the
certification process, but fails to receive a signed certificate. Under
the current rule, the Agency offers the manufacturer a partial refund
and retains a portion of the fee to pay for the work which has already
been done. This policy has been difficult to administer and requires
substantial Agency oversight. Consequently, we have finalized a
simplified refund policy in today's rule. When a certificate has not
been issued, for any reason, the applicant will be eligible to receive,
upon request, a full refund of the fee paid. Optionally, in lieu of a
refund, the manufacturer may apply the fee to another certification
request.
EPA proposed that manufacturers would not have to pay a final fee
if the difference between the final fee and the initial payment was
less than $500. Conversely, EPA proposed that it would not issue
refunds for amounts less than $500. EPA estimated that the reduction in
fees received from the final fee payments of under $500 would be
balanced by the refunds of less than $500 that would not be
distributed. However, the decision to eliminate a minimum final reduced
fee of $500 was made as a result of comments regarding EPA's proposed
policy of only issuing refunds greater than $500. Therefore, since EPA
will be paying full refunds, EPA is setting forth in today's rule that
full payment must be submitted at true-up to avoid an overall deficit
in its recovery of MVECP costs and to continue to abide by the intent
of the IOAA and CAA. The new refund policy will not reduce the money
collected by the Agency because the fee schedule is based, in part, on
the number of certificates actually issued rather than the number of
certification requests.
EPA is continuing its retroactive refund policy wherein a
manufacturer that paid the full fee for a certificate but would have
qualified for a reduced fee, may request a refund for the difference
between the fee paid and the amount of the calculated reduced fee. The
Agency will also fully refund any fees if the manufacturer overpaid
based on their own projections. This change in and clarification of the
refund policy is the result of comments received and are discussed more
fully in section 6 of the Response to Comments Document.
III. What Are the Changes Made to the Proposed Cost Analysis?
EPA published in the Notice of Proposed Rule Making (NPRM) fees
that reflected our then projected test plans and associated costs for
the regulated industries. In the time between the NPRM and the FRM, EPA
has gathered additional information about the programs and tests that
it plans to conduct and is in a better position to determine the actual
costs of its compliance programs for 2004 and beyond than it was at the
time of that the NPRM was written. As a result of an internal
reassessment of testing capabilities and requisite levels of
appropriate compliance oversight, along with comments received, EPA
made several adjustments which have resulted in a change in costs of
certificates for several industry categories. EPA has used the
information on resources and lab capabilities to make the changes and,
therefore, the current rulemaking more accurately represents the test
program that EPA will put into place. EPA also notes that conducting a
compliance program requires some flexibility to ensure that vehicles
and engines are in fact meeting applicable standards throughout their
useful lives. This flexibility requires that potentially more testing
be conducted when problem areas arise, or perhaps a shift in the types
of testing that EPA conducts. The program being finalized today
provides a foundation for an adequate compliance program; however, EPA
plans to continue assessing the requisite levels of testing to
determine an appropriate compliance program. As EPA's programs mature
and testing capabilities increase then the compliance testing program
will likely adjust. Any further changes in costs based on such
adjustments, beyond those made today, will be made through a future
rulemaking. The changes are generally described below. The issues are
discussed more fully in the Response to Comments document. The changes
are also reflected in several new worksheets based on ``Appendix C''
which was attached to the ``Motor Vehicle and Engine Compliance Program
Cost Analysis'' document. Thus several new worksheets have been
generated from those originally found in Appendix C and EPA also
provides an additional description of the changes to these worksheets.
The new worksheets and description are available in the docket for this
rule and are called ``Updated Cost Analysis.''
A. Will There Be Fees for Yet-To-Be Regulated Industries?
The NPRM for this rule proposed establishing the level of fees for
classes of nonroad engines and equipment where emissions regulations
were under consideration by EPA but were not proposed at the time of
the Fees NPRM. The final fees rule does not establish fees for classes
of nonroad engines and equipment where EPA had not proposed emissions
standards for these classes before the Fees NPRM was published on
August 7, 2002. Although the fees proposal included fees for marine SI
inboard /sterndrive engines, the final rule does not set fees for these
engines. The final fees regulation does include fees for all other
nonroad categories that were proposed. This change is a result of
comments received. A more detailed discussion may be found in section 1
of the Response to Comments Document.
B. Is There a Change in Costs for Heavy-Duty Highway and Nonroad CI
Engines From the Proposal?
In the NPRM, EPA projected an appropriate yet ambitious test
program for heavy-duty highway and nonroad CI engines that included in-
use and confirmatory certification testing for heavy-duty highway
engines that would be conducted in newly equipped HD test cells at its
Ann Arbor laboratory, in-use on-vehicle testing for HD HW and NR CI
engines, as well as testing that would take place at a contractor's
facility that would include confirmatory certification testing,
selective enforcement audits, and in-use dyno testing. In its
reassessment of the testing capabilities EPA adjusted its testing
projections to a level that is more representative of the current
amount of testing that may be accomplished with the new testing
facility in Ann Arbor and the new enhanced engine compliance program
testing that will be conducted at a contractor's facility. The programs
set forth in this rulemaking more realistically represent the level of
testing that EPA will accomplish as it acknowledges that the in-use
dyno testing at Ann Arbor and the enhanced engine compliance programs
are new programs and will not reach the proposed level of testing for
some time.
As part of the reassessment, EPA also reexamined the recoverable
costs for the test equipment for HDE tests cells #1 and
#2. As discussed below, the cost of the test equipment for
these cells has been prorated to reflect the amount of time that the
cells would be used for compliance testing. EPA believes that this is a
more appropriate cost to be included in the cost study as it
[[Page 26229]]
acknowledges that the cells are not used for compliance testing 100
percent of the time.
The reassessment resulted in changes in several elements of the
cost study, specifically, a decrease in the number of FTE that would be
conducting the testing, a decrease in the percentage of test cell time
in the Ann Arbor laboratory, a reduction of the number of in-use
engines that would be procured for testing and, finally, a decrease in
the tests to be conducted at a contracted facility. These reductions
are discussed more fully below. The revised testing programs for heavy-
duty highway and nonroad CI are as follows:
Table III.B-1; Number of Tests for HD HW and NR CI
----------------------------------------------------------------------------------------------------------------
Confirmatory
Confirmatory In-use at AA cert at SEA In-use at
cert at AA contractors contractors
----------------------------------------------------------------------------------------------------------------
HD HW..................................... 7 3 0 5 5
NR CI..................................... 0 0 6 10 5
----------------------------------------------------------------------------------------------------------------
The reduced number of tests requires fewer FTE to oversee the
testing. Therefore, the number of direct FTE and indirect FTE listed
under the heavy-duty highway column has been decreased to 1.25 and .25
FTE, respectively, from 2.25 and .5 FTE. This is a net reduction of
1.25 FTE. The change is included on revised worksheet # 7.
EPA proposed that fees recover all costs identified as compliance
costs. Worksheet #10 of the Cost Analysis Document detailed the
items identified in the laboratory modification budget request
including the costs for various pieces of equipment within the heavy
duty test engine sites. One hundred percent of the equipment identified
for two heavy-duty engine test cells, HDE #1 and HDE
#2, related to compliance-oriented activities was listed as
recoverable and, therefore, was included in the fees for the heavy-duty
category. These cells, however, will not be used 100 percent of the
time for compliance work as anticipated, rather, one cell will be used
for one quarter of a year for compliance testing. Therefore, it is
appropriate that the amount of the recoverable costs should reflect the
actual amount of time that the cells are used for compliance work. The
recoverable amount of the two cells listed on worksheet #10 has
been decreased to include only one-quarter of the cost for the
equipment identified solely for use in HDE cell #2. In
addition, some of the compliance oriented equipment will be used for
both HDE cell #2 and HDE cell #1. Of this equipment EPA
is only recovering one-eighth of the cost based on evenly splitting the
cost of such equipment between the two test cells and then recovering
one-quarter of the cost associated with HDE cell #2. At this
time EPA anticipates using HDE cell #2 approximately one-
quarter of the year for compliance oriented activity. EPA plans to
conduct three HD in-use tests and seven certification confirmatory
tests during that time. Accordingly, the recoverable total for
worksheet #10 has been reduced resulting in a decrease in the
fees for heavy-duty highway (HDE HW) engine families. This decrease is
reflected for this industry in the fees table, Table II.B-1 above.
Although EPA is estimating that the amount of test cell time that
will be dedicated to compliance testing is one-quarter of the time of
HDE #2, this does not limit the testing that EPA may conduct.
In the future, EPA may choose to conduct additional HDE compliance
testing, however, fees will not increase to reflect this change until a
new fees rulemaking is promulgated. This change responds to a comment
received and is discussed in more detail in section V.C. below and
section 2 of the Response to Comments Document. Additional changes in
the cost for this industry are explained further below and include a
change in the estimated number of certificates and the amount of
compliance testing that EPA anticipates will be conducted.
Proposed engine procurement costs for heavy-duty engines were shown
in worksheet #12. EPA had proposed to test 10 in-use engines,
two engine families of five engines per family. The cost to procure the
engines is $25,240 for the first engine of the family and $21,860 for
subsequent engines as explained in general terms in the Cost Analysis,
page 52. The revised test plan consists of testing of three engines in
one engine family. The new cost for procuring these engines, at the
same cost per engine as proposed, is $68,960. The revised costs are
shown on new worksheet #12.
The costs for the proposed Enhanced Engine Compliance Program were
shown on worksheet #16. The number of tests were revised as
follows: the number of confirmatory tests for certification at a
contracted facility were decreased for NR CI and HD HW to 6 families
and 0 families, respectively. EPA decided that it will conduct
certification confirmatory tests at its Ann Arbor facility in test cell
#2 when in-use tests are not being conducted. Five HD HW
confirmatory certification tests are being planned per year in Ann
Arbor. Furthermore, the number of selective enforcement audits of HD HW
engines has been revised from 10 to 5 audits. The revised costs for the
enhanced engine compliance program for NR CI and HD HW industries are
$300,000 and $165,000, respectively. The revised costs are shown in new
worksheet #16.
C. Is There a Change in the Number of Certificates?
In order to determine the cost for each certificate EPA determine
the total compliance costs associated with each industry and then
divided that cost by its best estimate of the number of certificates
that would be issued to that industry within a given model year. EPA
received comment about the number of certificates for light duty
vehicles, heavy-duty highway engines and NR CI engines. EPA reexamined
the number of certificates issued over the last three complete model
years and used an average of the past two years of certification
information to determine a divisor for the three industries noted
above. The divisor for the light-duty vehicles and trucks cert/fuel
economy portion of the light-duty fee will remain 405 and the divisor
for the in-use portion of the light-duty fee will remain 348, as listed
in the cost analysis. The divisor for the HDE HW category will be 148
(the number used in the cost analysis was 130) and the divisor for the
NR CI category is 662 as compared to 603 used in the cost analysis. As
a result of this recalculation of the number of certificates only, the
fee for heavy-duty compression and spark-ignition engines went from
$30,437 to $25,819 and the fee for nonroad compression-ignition engines
went from $2,156 to $1,964. This change is a result of comments
received and is discussed further in
[[Page 26230]]
section 2 of the Response to Comments Document. The number of
certificates will be adjusted and fees changed accordingly beginning in
the 2006 calendar year as discussed above in section II.C.
D. Indirect Changes
Program changes to one category may indirectly affect the fees in
another category. Specifically, the decrease in the number of FTEs in
worksheet #7 to the heavy-duty highway engine category resulted
in slight changes to the rest of the categories. The change is a result
of the use of the FTE method of allocating costs \7\ to the different
categories. This change in FTE changed not only the allocation of
indirect costs to the heavy-duty industry but also changed the
proportion of recoverable to nonrecoverable indirect costs. For this
reason the costs for the light-duty and highway motorcycles, and Other
categories changed even though there were no changes made to the
compliance programs for these industries. This change resulted in a
slight decrease in fees for the light-duty, motorcycle, ICI and Other
industries.
---------------------------------------------------------------------------
\7\ For more information on the FTE allocation method see the
Cost Analysis, page 10.
---------------------------------------------------------------------------
IV. What Were the Opportunities for Public Participation?
On September 19, 2002, a public hearing was held. The public
comment period was open until October 19, 2002. EPA received comments
before and after the close of the comment period. All comments were
fully addressed to the extent possible. Commenters included
manufacturers, manufacturer trade associations and representatives, and
an environmental consulting firm. For a list of commenters, see
Response to Comments document contained in EPA Air Docket No. OAR-2002-
0023.
V. What Were the Major Comments Received on the Proposed Rule?
Comments on a wide range of issues concerning the proposed Fees
rulemaking were received. Summarized here are the comments concerning
the major or significant issues and the rationale behind EPA's final
decisions. These issues are considered in more detail in the Response
to Comments document prepared for this final rule and included in the
docket noted earlier.
A. Legal Authority
1. Authority To Assess Nonroad Fees
What We Proposed:
We proposed an update to our existing Motor Vehicle and Engine
Compliance Program (MVECP) fees regulations under which we assess fees
for highway vehicle and engines certification and compliance
activities. We also proposed the collection of fees for nonroad engines
certification and compliance activities which we have regulated since
our initial fees rulemaking. The ``nonroad engine category'' includes:
nonroad compression engines, marine spark-ignition outboard/personal-
water-craft, locomotive, small spark-ignition, recreational vehicles
(including, but not limited to, snowmobiles, off-road motorcycles and
all terrain vehicles), recreational marine and compression-ignition
engines, large spark-ignition engines (over 19 kilowatts (kW)) and
marine spark-ignition/inboard-sterndrive engines.
Our proposal examined: the Independent Offices Appropriation Act
(IOAA), several provisions of the Clean Air Act (CAA or Act), the
Office of Management and Budget's (OMB's) Circular No. A-25, and
various court decisions including Engine Manufacturers Association v.
EPA, 20 F.3d 1177 (D.C. Cir. 1994) which considered the Environmental
Protection Agency's (EPA's or Agency's) initial fees rulemaking.
We explained that section 217 of the CAA authorizes the collection
of fees for our new nonroad vehicle and engine certification and
compliance activities. Section 217 allows the Agency to ``recover
reasonable costs'' associated with: new vehicle or engine certification
activities conducted under section 206(a) of the CAA, new vehicle or
engine compliance monitoring and testing under section 206(b) of the
CAA (including such activities as selective enforcement audits (SEA)
and production line testing (PLT)), and in-use vehicle or engine
compliance monitoring and testing under section 207(c) of the CAA. We
also explained that section 213 creates a statutory enforcement program
which generally mirrors that which Congress created for the regulation
of new highway vehicles and engines. We noted that EPA's nonroad
standards created under section 213 are subject to the same
requirements (e.g., sections 206, 207, 208, and 209) and implemented in
the same manner (including certification, SEA, and in-use testing) and
under the same sections (as those referenced in section 217) as
regulations for new highway vehicles and engines under section 202
(with modifications to the implementing nonroad regulations as the
Administrator deems appropriate). We then concluded that because the
text of section 217 does not specify either highway or nonroad engines
and vehicles, and because the certification and compliance activities
related to both are pursuant to sections 206 and 207, we believed
collecting fees for new nonroad vehicles and engines' certification and
compliance activities under section 217 was appropriate as an
additional compliance requirement.
We also stated that the IOAA creates additional and independent
authority for EPA to collect fees due to the same special and unique
benefits that manufacturers of both new highway and nonroad vehicle and
engine manufacturers receive from EPA under the certification and
compliance program.
What Commenters Said:
We received several comments that questioned our authority to
assess and collect fees for our nonroad certification and compliance
program activities. EMA argued that the IOAA neither overrides nor
provides the EPA with expanded fee assessment authority since section
217 specifically sets out the Agency's authority to assess fees and
also incorporates the IOAA by reference. EMA also argued that Congress
would not have enacted the specific provisions of section 217 if the
IOAA was still intended to apply to EPA's mobile source certification
and compliance activities.
In addition, EMA argued that since section 217 is entitled: ``Motor
Vehicle Compliance Program Fees,'' Congress could not have intended
that this section would authorize fees assessment for nonroad
compliance activities. The commenter further noted the distinction
drawn between motor vehicle and nonroad vehicle in sections 216(2) and
(11) and the omission of nonroad vehicle and engine in section 217 even
though both sections 213 and 217 were promulgated as part of the 1990
Amendments. EMA also pointed out that section 213(d) specifically
subjects the nonroad standards to sections 206, 207, 208 and 209 but
fails to incorporate or even mention section 217.
The Motorcycle Industry Council questioned the applicability of
section 217 to off-road motorcycles and all-terrain vehicles (ATVs) and
further urged the Agency not to assess fees until clarification of the
Agency's authority and issuance of applicable emission standards for
these categories.
Another commenter argued that EPA does not have the authority under
section 213 to assess fees for nonroad engines and therefore, lacked
authority to assess fees for lawn and garden engines. This commenter
also considered our discussion of our
[[Page 26231]]
authority to assess fees for non-road engines and vehicles as ``tortured.''
Our Response:
EPA disagrees with these comments. EPA confirms its view that
section 217 authorizes the Agency to recover all reasonable costs
associated with certification and compliance activities for nonroad
vehicles and engines, including nonroad equipment. EPA also believes
that action taken under section 217 is to be consistent with the IOAA.
We also believe that even if section 217 does not extend to nonroad
vehicles and engines, then the IOAA separately provides the Agency with
authority to assess and recover fees for nonroad and engine
certification and compliance, and section 217 does not limit or
override the IOAA.
A plain reading of section 217 indicates that EPA may recover the
costs associated with all of its vehicle and engine certification and
compliance programs conducted under sections 206 and 207 of the Act.
Under section 217, the Agency may recover the reasonable costs
associated with ``new vehicle or engine certification'' under section
206(a), ``new vehicle or engine compliance monitoring and testing''
under section 206(b), and ``in-use vehicle or engine compliance
monitoring and testing'' under section 207(c). 42 U.S.C. 7522(a). Under
section 213(d), the standards for new nonroad vehicles and engines are
subject to all the applicable requirements of sections 206 through 209.
The provisions of sections 206(a), 206(b) and 207(c) are therefore
applicable to emissions standards for nonroad engines. Here, the
nonroad certification and compliance activities for which EPA is
adopting fees are actions taken pursuant to these specific provisions.
These nonroad costs are clearly costs for ``new vehicle or engine
certification'' under section 206(a), ``new vehicle or engine
compliance monitoring and testing'' under section 206(b), and ``in-use
vehicle or engine compliance monitoring and testing'' under section 207(c).
Section 217 expressly allows for recovery of costs associated with
``vehicle or engine'' certification and compliance, and nonroad
vehicles and engines are clearly ``vehicles'' and ``engines.'' CAA
section 216(10), (11). The text of section 217 does not limit its scope
to ``motor vehicle or engine'' certification and compliance programs.
Congress was clearly aware that the terms motor vehicle or engine are
different from the terms nonroad vehicle or engine, and in section 217
chose to use the more general terms ``vehicle'' and ``engine'' to
identify the scope of authority under section 217. Congress defined
motor vehicles and engines distinct from nonroad vehicles and engines,
but subjected them both to sections 206(a), 206(b) and 207(c), as well
as other provisions in Title II. Congress authorized the same
fundamental certification and compliance framework for both nonroad and
motor vehicle programs, and used language in section 217 that would
then allow EPA to collect fees for its certification and compliance
costs for both motor vehicles and engines and nonroad vehicles and
engines. Congress likely would have expressly employed the term ``motor
vehicle or engine,'' \8\ instead of ``vehicle'' or ``engine,'' had it
intended to limit the reach of section 217 to motor vehicle or engine
certification and compliance activity. There also is no specific
provision in section 217 that can be read as precluding EPA from
assessing fees for nonroad engines and vehicles. Collecting fees to
recover the certification and compliance costs associated with nonroad
engines and vehicles therefore is within the plain meaning of the
language Congress used in section 217.
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\8\ See, for example, section 218: ``[t]he Administrator shall
promulgate regulations applicable to motor vehicle engines and
nonroad engines . . .'' 42 U.S.C. 7553 (emphasis added).
---------------------------------------------------------------------------
Moreover, there is nothing in the legislative history for section
217 to support the commenters' narrow reading. Rather, legislative
history only evinces an intent for the Agency to ``recover the costs
associated with operating'' compliance and certification programs.
[H.R. 101-490, May 1990, 1990 U.S.C.C.A.N. 3355]. The terms used here
are general in nature and reasonably indicate an intention to recover
such certification and compliance costs. There is no indication in this
text that Congress intended to recover only some of these costs, those
associated with motor vehicles and engines. Congress likely would have
at least identified or mentioned the limitation of section 217 to motor
vehicles and engines and the inapplicability to nonroad vehicles and
engines in this legislative history.
If, as the commenter suggests, EPA were to subject all nonroad
engines and vehicles to the same applicable requirements as on-highway
vehicles and engines except for fees assessment, this narrow reading of
section 217 would not comport with the stated congressional intent that
we ``recover the costs associated with operating'' our certification
and compliance programs. [H.R. 101-490, May 1990, 1990 U.S.C.C.A.N
3355]. EPA's interpretation avoids this result and, consistent with the
intent of section 217 and the IOAA, provides a reasonable mechanism to
equitably collect fees for specific private benefits provided by the
agency.
Commenters argue that Congress adopted both sections 213 and 217 in
the 1990 amendments, but failed to specifically identify nonroad
certification and compliance costs in section 217, and failed to
reference section 217 in section 213(d), both indicating that Congress
did not intend to include nonroad engines and vehicles in section 217's
authority to collect fees. As noted above, this fails to account for
the plain meaning of the language employed in section 217 and 213(d).
In section 213(d), Congress specifically stated that nonroad engines
and vehicles would be subject to the certification and compliance
requirements of section 206 and 207, along with other provisions
unrelated to fees. Congress also stated in section 217 that EPA could
collect fees for costs related to engine and vehicles subject to these
specific certification and compliance provisions in sections 206 and
207. Congress did not need to specifically mention nonroad engines and
vehicles in section 217, and did not need to specifically mention
section 217 in section 213(d) to authorize the collection of nonroad
related fees, as the language it did use leads directly to that result.
Similarly, Congress did not need to specifically mention motor vehicles
or engines in the text of section 217 to authorize collection of fees
for motor vehicle and engine certification and compliance costs under
sections 206 and 207. The reference to section 206(a), 206(b) and
207(c) brings in both motor vehicle and nonroad related costs.
Clearly Congress could have made such specific references, but it
instead used broader language in section 217 and a specific tie into
actions under sections 206 and 207, where the plain meaning then covers
both nonroad and motor vehicles and engines. It did not need to
specifically refer to nonroad engines and vehicles to include them in
section 217. The lack of specific references cited by commenters does
not detract from the plain meaning of these provisions, and does not
lead to the implication drawn by commenters. The plain text of section
217, read in combination with section 213(d), indicates that Congress
intended to authorize collection of fees for both nonroad and motor
vehicles and engines. There is no indication in the text of either
section 217 or section 213(d) that Congress intended to limit section
217 to motor vehicles. This is
[[Page 26232]]
not a tortured interpretation, but a reasonable reading of the language
used by Congress.
The Agency also disagrees with the contention that the title of
section 217--``Motor Vehicle Compliance Program Fees''--indicates that
Congress did not intend to authorize assessment of fees for nonroad
vehicles and engines. ``Headings and titles are not meant to take the
place of the detailed provisions of the statutory text; nor are they
necessarily designed to be a reference guide or a synopsis.''
Thistlethwaite v. Dowty Woodville Polymer, Ltd., 110 F.3d 861, 866 (2d
Cir. 1997) (Internal quotation marks and alterations omitted), rather,
``[a]bsent a clearly expressed legislative intention to the contrary,
[statutory]
language must ordinarily be regarded as conclusive.''
Consumer Product Safety Commission 447 U.S. 108, 100 S. Ct. 2055
(1980). Here, both the plain language of section 217 and it's
legislative history indicate an intention to authorize collection of
fees for all of the new vehicle and engine certification and compliance
actions undertaken by EPA under section 206(a), (c) and 207(c). They
provide no indication of an intention to limit such authority to motor
vehicles and engines. In these circumstances, the use of the term
``motor vehicle'' in the heading of section 217 does not support
rejecting a conclusion based on the language actually used by Congress.
Regardless of whether section 217 authorizes the collection of fees
for costs related to nonroad engines and vehicles, the IOAA does
authorize EPA to assess and recover fees associated with implementing
the nonroad engines and vehicles certification and compliance programs.
The plain language of the IOAA allows Agencies to charge and recoup
reasonable costs for services that confer specific benefits upon
identifiable beneficiaries\9\. It authorizes federal agencies to
``impose a fee only for a service that confers a specific benefit upon
an identifiable beneficiary.'' Engine Manufacturers Association (EMA)
v. EPA, 20 F.3d 1177, 1180 (D.C. Cir. 1994). That case indicates that
the certification and compliance actions for which EPA is collecting
fees do in fact confer a specific private benefit. ``In a regulated
industry a certificate of approval [such as a certificate of
conformity]
is deemed a benefit specific to the recipient.'' Id.
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\9\ ``It is the sense of Congress that each service or thing of
value provided by an agency (except a mixed-ownership Government
corporation) to a person (except a person on official business of
the United States Government) is to be self-sustaining to the extent
possible.'' 31 U.S.C. 9701(a).
---------------------------------------------------------------------------
There is nothing in the text of the IOAA that indicates the IOAA
does not apply to collection of nonroad related costs, assuming section
217 does not authorize such fees. The question then is whether section
217 itself limits the scope of the IOAA with respect to nonroad
certification and compliance costs that are otherwise outside the scope
of section 217.
Nothing in the text of section 217 indicates that it limits the
IOAA in areas not covered by section 217. The introductory text of
section 217 refers to the IOAA, stating that EPA's action under section
217 is to be ``consistent with'' the IOAA. The clear meaning of that
phrase is that EPA is to apply the criteria of the IOAA in promulgating
fees under section 217. It indicates an intention that action taken
under section 217 is to be consistent with the IOAA. It does not
indicate that Congress intended to deviate from, limit, or override the
IOAA in areas outside the scope of section 217.
It seems quite unlikely that Congress would limit the reach of the
IOAA in such an oblique fashion in section 217. If Congress intended to
amend or overrule the IOAA through section 217, Congress likely would
have used language indicating that intent. Instead Congress just
generally provided that section 217 is to be read ``consistent'' with
the IOAA. See, Chisom v. Roemer, 501 U.S. 380, 111 S.Ct. 2354 (1991).
Such an important limitation likely would be clearly discernable from
the Act and the legislative history of section 217, and it is not.
The enactment of section 217 even though the IOAA was already in
existence does not indicate otherwise. Section 217 serves several valid
functions, none of which is related to or indicate an intention to
limit or overrule the IOAA for areas not covered by section 217. For
example, section 217 creates the fees fund and specifies that fees
collected are to be deposited in a special account at the United States
Treasury. It also resolves any doubt that a certification and
compliance program can be basis for fees. The reference to the IOAA in
section 217 is best read in this context. Moreover, reading section 217
as overriding the provisions of the IOAA would amount to a repeal by
implication which is generally disfavored.
Commenter's argument would mean that EPA is precluded from
recovering the costs associated with the nonroad vehicle or engine
certification and compliance program under either the IOAA or section
217. This narrow reading of section 217, as overriding the IOAA, would
result in our conferring the specific benefits of our certification and
compliance program on non-road engine manufacturers without the
authority to recover associated costs for providing this service. Such
an interpretation would be inconsistent with the overall purpose of the
IOAA--that agencies be ``self-sustaining'' by charging fees to recover
costs associated with rendering services to identifiable beneficiaries.
Commenter's interpretation also does not have any clearly limited
boundaries. The interpretation begs the question of the extent to which
section 217 limits the IOAA for areas outside the scope of the IOAA. Is
it limited to nonroad certification and compliance activities? Is it
limited to other activities under Title II of the Act? Does it extend
to all other EPA actions under the Act? The lack of a clear boundary to
the limits of IOAA authority under commenter's interpretation indicates
it is neither a likely nor reasonable interpretation of Congressional
intent underlying section 217.
EPA believes the best interpretation of section 217 and the IOAA is
to read them as acting in harmony and in conjunction with each other.
For areas covered by section 217, EPA's actions under that section are
to be consistent with the IOAA. For areas not covered by section 217,
the IOAA continues to be in effect as before section 217 was adopted.
This will appropriately ensure that fees' assessment for all of the
Agencies programs will be adequately addressed.
Since a nonroad engine manufacturer, similar to the on-highway
engine manufacturer, ``obtains a benefit from the entire [EPA]
compliance program,'' we believe we may recover the reasonable costs of
compliance testing, by a fee that does not exceed the value of the
benefit derived by the manufacturer, under the IOAA. See, EMA, 20 F.3d
at 1181 (D.C. Cir. 1994). Thus, we believe that if section 217 is
inapplicable, and we do not believe so, the IOAA would provide
authority to assess fees for nonroad engines and vehicles.
In light of the foregoing, we disagree with the commenters' narrow
interpretation of section 217. Accordingly, we believe that it is
reasonable to read section 217 as providing the requisite authority to
collect fees associated with nonroad certification and compliance
activities. EPA also believes it is reasonable to read the IOAA as
providing independent authority for assessment of fees for nonroad
engine compliance and certification activities, if section 217 does not
authorize such assessment.
[[Page 26233]]
EPA believes today's action is appropriate under either section 217 or
the IOAA.
Similarly, with regard to comments asserting our lack of fees'
assessment authority for other nonroad engines such as off-road
motorcycles, ATVs and lawn and garden engines, we believe as discussed
above that both section 217 and the IOAA provide us with the requisite
authority to ``recover the reasonable costs'' associated with the
certification and compliance programs for these nonroad engines.
We also do not believe it is necessary to further ``clarify'' our
authority to collect nonroad fees. We set forth the basis for our
authority within the NPRM and today's action confirms that authority.
We separately address the suggestion to defer fees' collection until
issuance of the off-road motorcycles and ATVs emission standards in the
Authority to Recover Anticipated Costs for Proposed Programs section
below.
2. Authority To Recover Anticipated Costs for Proposed Programs
What We Proposed:
EPA published new fees for all industries in the fees rule NPRM,
Table III.D-1, 67 FR 51410. EPA updated fees for light-duty vehicles,
motorcycles and heavy-duty highway engines and vehicles that were
covered by EPA's original fees rulemaking. The new fees for these
industries are determined considering inflationary costs, additional
costs associated with programmatic decisions, and some future costs
known at the time of the proposal that were also known to be necessary
to maintain an effective MVECP.
We also proposed fees for certain certification request types in
the nonroad industry based on the fact that EPA has had emission
regulations in place, prior to the fees proposal, covering such nonroad
industries and thus an on-going compliance program exists for these
industries. These industries include nonroad (NR) compression-ignition
(CI), marine spark-ignition (SI) outboard/personal water craft, small
nonroad SI, and locomotives. Some of these industries have had
emissions programs in place since the 1996 model year.
In addition, we proposed fees for certain nonroad industries
(marine CI > 37kW) where EPA had finalized the applicable emission
regulations for that industry prior to the fees proposal but the
compliance programs had not yet been implemented. Such industries would
only pay a fee for certification at the time of their initial
applications for certification.
Similarly, EPA also proposed fees for certain nonroad industries
(large nonroad SI > 19kW, recreational marine > 37kW, and recreational
vehicles (off-road motorcycles (MC), ATVs, snowmobiles, etc)) for which
emission regulations had been proposed at the time of the fees proposal
(August 7, 2002) but for which no emission regulations had yet been
finalized.
Lastly, for a certain nonroad industry (marine SI inboard/
sterndrive) we proposed fees although the emission regulation and
proposal was just under development at the time of the fees proposal.
What Commenters Said:
EMA maintains that it is improper for EPA to quantify fees for
anticipated nonroad certification and compliance programs that have not
been implemented and in some cases not even proposed. EMA asserts that
section 217 only authorizes the Agency to ``recover'' the actual costs
that it incurs for administering established certification and
compliance programs--``[T]he Administrator may * * * recover * * *''
EMA provides what it feels to be the plain meaning of ``recover'' which
is ``to get back.'' EMA contends that for the industry categories noted
above, there are no such actual costs for the Agency to tally and then
seek to recover or get back. There is no proper basis for the Agency to
merely anticipate expenses that will be incurred in the future. EMA
maintains that EPA should not impose fees for nonroad categories that
were not finalized before the NPRM, nor should EPA include fees
associated with nonroad rulemakings that have not yet been finalized
and published.
Additionally, EMA believes it is unlawful and improper to establish
fees for programs that have not even been proposed as it presupposes
the outcome of such rulemakings and so undermines and trivializes the
administrative rulemaking process. Without knowledge of the final
outcome of the predicate rulemaking the public cannot participate
meaningfully in the rulemaking. EMA urges EPA to wait for the
underlying regulatory measures to be finalized and implemented before
charging manufacturers for anticipated costs.
The Alliance and the Association of International Automobile
Manufacturers (AIAM) state that EPA incorrectly bases its costs on
``budget requests'' and ``plans'' rather than actual ``expenditures.''
It is inappropriate to base costs on projections. EPA should account
for ``actual expenditures'' or where costs have occurred. In addition,
EPA must account for each employee who works on MVECP activities and
subtract out time not spent on such activities.
The Motorcycle Industry Council asserts that the compliance fees
should not include anticipated or projected costs, future plans and
services. The commenter further states that only when actual costs are
determined should a fair fee be established and the costs recovered.
The Council further requested that the Agency defer finalizing fees for
off-road motorcycles and ATVs until the Agency finalizes the applicable
emissions requirements and at that time, issue the applicable fees or a
``separate but concurrent fee rule.''
The Outdoor Power Equipment Institute (OPEI) supports EMA's comment
stating that EPA lacks the statutory authority to recover anticipated
costs for proposed programs prior to their adoption as final regulations.
Our Response:
As stated above, we believe section 217 authorizes the Agency to
recover reasonable costs associated with vehicle and engine
certification and compliance activities. We also believe that the IOAA
authorizes the Agency to recover fees. We believe it is appropriate to
recover all costs which EPA will incur to provide the necessary MVECP
services to a manufacturer during the course of certification and in-
use compliance activities. For several reasons EPA also believes it is
appropriate to collect such fees prior to issuing certificates. EPA
disagrees with EMA's suggestion that the language in section 217
authorizing EPA to establish fees ``to recover'' all reasonable costs
means that EPA should ``tally'' its costs and then ``get back'' such
costs. EMA does not suggest that EPA change its current regulatory
practice of collecting fees in advance of granting a certificate. As
such, EMA tacitly recognizes that EPA is indeed projecting the actual
future costs associated with certification and in-use activities at the
time it is adopting the fees rule and when it collects the fee with the
application for a certificate. EPA believes it may project actual costs
as long as the fee payers are on adequate notice through rulemaking of
what those projected costs are and that EPA has a reasonable basis for
deciding that such projections will be accurate. EPA's fees rule is
designed to recover or get back its expected actual costs.
We believe this practice is consistent with the guidance provided
by OMB Circular No. A-25, which states under its ``General Policy''
section 6(a)(2)(c) that when determining the amount of user charges to
assess that ``User charges will be collected in advance of, or
[[Page 26234]]
simultaneously with, the rendering of services unless appropriations
and authority are provided in advance to allow reimbursable services.''
In this instance, EPA does not believe that section 217 of the CAA
limits EPA's authority such that EPA could only seek reimbursement of
past expenses. In addition, EPA's continued practice of collecting fees
in advance is the most appropriate method and provides applicants with
the best information regarding the fees that are owed at time of
certification.
The Agency has finalized rules for certain nonroad categories that
were proposed but not finalized at the time this fees rule was
proposed. With the one exception noted below, we also no longer are
``projecting'' what our compliance activities will be for many of the
nonroad industries included in the ``Other'' category as the rules
regulating emissions for those industries have been finalized and our
expected compliance activities will be implemented.
We agree with commenters that we should not finalize fees at this
time for nonroad categories that were not proposed at the time that the
fees rule NPRM was published. Although EPA also proposed fees for the
marine SI inboard/sterndrive industry, based on what we anticipated to
be a modest compliance program, we agree with EMA that it is premature
to require fees at this time. EPA believes that the cost study and
analysis are proper for this industry but we choose to wait until the
actual emission regulation for this industry is proposed, to provide
ample opportunity for comment on potential fees. We anticipate
finalizing fees for that industry in the final emission regulation.
Therefore, in EPA's revised worksheet #2, in the ``Other''
column, we have reduced the total cost of compliance activities by
$20,645 to reflect that the marine SI category will not be covered by
this regulation. The fees associated with the remaining regulated
industries in the ``Other'' column remain the same--$826 per
certificate. This change is reflected in section 85.2405 of the
regulations, item 14 of the fees table, which indicates the fees for
marine engines, excluding inboard and sterndrive engines.
As EPA has maintained throughout this rulemaking, we believe it is
appropriate to recover all costs which EPA will incur to provide the
necessary MVECP services to a manufacturer for certification and in-
use. For several reasons EPA also believes it is appropriate to collect
such fees prior to issuing certificates. We also believe that when any
significant budget changes occur that affect allocations of resources
dedicated to any MVECP activity, or regulatory changes that affect
MVECP activities, or EPA evaluations of the compliance rates and
associated environmental impacts change, then it is likely appropriate
for EPA to reexamine its updated MVECP activities and determine whether
any changes in costs have occurred.
We believe it is appropriate within this rule to require fees for
those industries that are in fact required to meet EPA's emission
standards in order to receive certificates of conformity. EPA proposed
fees for certain nonroad industries where the compliance date of the
emission standards had not yet occurred (meaning no applications for
certification had been submitted), and we believe that such
manufacturers had adequate notice of the regulatory emission
requirements they would be required to meet in the future and how EPA
intended to impose a fee related to EPA's services. Based on the
regulatory structure of the emissions program for these industries, EPA
also had a reasonable basis for deciding that the projected costs are
accurate. As noted in the proposal, EPA intends to only conduct a
modest MVECP program for these industries.
In addition, we also believe it is appropriate to require fees for
those industries that are newly regulated since EPA issued the fees
proposal. At the time of the fees proposal such industries (large
nonroad SI > 19kW, recreational marine > 37kW, and recreational
vehicles) were on notice of the emission requirements they would likely
face (including the requirement of certification) due to existence of
NPRMs for such industries prior to the fees proposal. Based on the
regulatory structure of the emissions program for these industries, EPA
also had a reasonable basis for deciding that the projected costs are
accurate. The final emission regulations have since become effective
for these industries and EPA anticipates no changes in its modest
projections of the compliance activities and costs associated with
these newly regulated industries.
B. Assessment of Costs
1. Costs Apportioned to Industries
What We Proposed:
Our proposed fees were based on past and projected actual costs of
providing certification and compliance services to the various mobile
source manufacturers and industries. We grouped these various
manufacturers and industries into fee categories and we explained that
separation of industries into groups with other similar industries was
in order to ensure that each category pays fees only for the services
that it receives.\10\ We also explained that EPA conducted a cost
analysis to determine the various compliance activities associated with
each fee category and associated annual costs for each certification
request type. We set forth our analyses in the Motor Vehicle and Engine
Compliance Program Costs Analysis (Cost Analysis Document). We further
explained that where the level and type of EPA activity and costs were
similar for each industry then those industries were grouped together,
the total number of certificates were added together, and equal fees
were allocated to each anticipated certificate. (See Cost Analysis
Document at p. 21.) In this way, EPA determined the portion of the
MVECP costs dedicated to each certification request type.
---------------------------------------------------------------------------
\10\ See original Cost Analysis Document starting at page 16
(step 5 of ``general steps'').
---------------------------------------------------------------------------
We proposed three ``fee categories'': 1. Light-Duty, which includes
light-duty vehicles and trucks, motorcycles, and because of similar
compliance programs medium-duty passenger vehicles and certain heavy-
duty vehicles were included, with subcategories created where it was
determined that a different level of services and costs were expected
to be expended; 2. Engines, which includes heavy-duty highway (HDE HW)
and nonroad compression-ignition (NR CI) engines (excluding marine and
locomotive), with subcategories created where it was determined that a
different level of services and costs were expected to be expended; and
3. Other Engines and Vehicles, where currently EPA only plans to do
certification review and includes marine CI and SI engines, nonroad SI
engines, locomotive engines, large spark-ignition engines, recreational
marine engines, recreational vehicles, heavy-duty engine evaporative
systems and heavy-duty engines certified for California only.
What Commenters Said:
EMA maintains that the language of section 217(a) of the CAA
relevant to heavy-duty engine and vehicle manufacturers, which states
in part, that EPA's fees for such manufacturers ``shall not exceed a
reasonable amount to recover an appropriate portion of [the]
reasonable
costs [of the MVECP]'' requires EPA to only recover a portion and not
all of the certification and compliance program costs. EMA believes
such portion should be from the costs just associated with the heavy-
duty engine and vehicle manufacturers.
[[Page 26235]]
Although EMA initially stated that they did not have a definitive
percentage or portion that EPA should assess, EMA in a subsequent
comment stated that the appropriate ``portion'' of EPA's certification
and compliance costs for heavy-duty engine and vehicle manufacturers to
bear is 50 percent.
EMA states that the plain language of section 217(a) requires that
only a ``portion'' of the costs associated with the heavy-duty engine
(HDE) compliance program can be recoverable and thus 100 percent of
such costs is not a portion. EMA suggests that EPA's interpretation
(that heavy-duty manufacturers pay 100 percent of the costs allocated
to that industry) would provide no purpose or effect to the last
sentence in 217(a). Since the basic premise of fee collection is to
impose fees for specific benefits conferred upon an identifiable
beneficiary,\11\ EMA suggests that it is self-evident that EPA would
only collect such appropriate fee even without the language in the last
sentence. Further, EMA points to the EMA decision and claims it does
not validate EPA's interpretation of 217(a). EMA suggests that the
dicta from that decision only states that ``Congress intended that the
EPA charge manufacturers of heavy-duty engines and vehicles something
less than it charges other manufacturer'' and the EPA must ``do
something that moves non-trivially in the direction that Congress
intended'' and thus does not hold that EPA may assess HDE manufacturers
100 percent of all costs and yet still comply with the requirement in
217(a) which requires that only a portion of such reasonable costs be
assessed.
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\11\ EMA cites EMA v. EPA, 20 F.3d 1177, 1180 (D.C. Cir. 1994)
for this proposition. The court held in this instance that ``Under
the IOAA an agency may impose a fee only for a service that confer a
specific private benefit upon an identifiable beneficiary.''
---------------------------------------------------------------------------
Our Response:
EPA agrees with EMA's suggestion that the general principle of
section 217 and of the IOAA is to generally recover all costs that are
specifically tied to a specific benefit for an identifiable party. The
introductory sentence on 217(a) suggests that ``all reasonable costs''
might appropriately be calculated for all the MVECP services as noted
in 217(a)(1-3) for all industries and then EPA is subsequently directed
to charge the heavy-duty engine and vehicle manufacturers its
appropriate ``portion'' of the otherwise aggregated costs.
We disagree with EMA's interpretation of the EMA decision. The
court discusses EMA's claim that heavy-duty manufacturers should pay
less than the ``fair share'' of costs occurs in section III C of the
decision. The court noted that ``According to EMA, the Congress
intended that heavy-duty manufacturers be charged a fee that recovers
less than their fair share of the total cost of the Compliance Program
because they face smaller sales volumes and more onerous compliance
testing than do manufacturers of light-duty vehicles and engines.'' The
cost methodology EPA used in the fees rule that the court reviewed, and
used for the current rule, was to segregate the costs for each
certificate type (including HDE HW CI and SI) and divide such total
costs by the number of certificates expected to be issued within that
certificate type. As noted on worksheet #2 of the original Cost
Analysis, the total costs for HDE HW CI and SI is $3,956,759 and cost
per certificate is $30,437. Worksheet #2 of the revised Cost
Analysis shows that this amount is now $3,193,596. The amount per
certificate is $21,578, a reduction of $8,859 per certificate in the
final rule (this reduction is a result in a recalculation in the number
of certificates expected to be issued, a reduction in the costs
associated with the upgrades to the test cells in Ann Arbor, and other
adjustments) whereas the fee per light-duty vehicle certificate is
$33,883.
The court in EMA (page 1183) acknowledged EPA's methodology of and
intent to give effect to section 217(a) by segregating the costs of
heavy-duty, light-duty, and motorcycle certificates and by waiving the
fee to the extent that it exceeds one percent of the projected sales
revenue for any manufacturer. The court suggests that it is reasonably
clear that Congress intended that the EPA charge manufacturers of
heavy-duty engines and vehicles ``something less than it charges other
manufacturers'' although ``the statute is silent as to both the means
by which and the degree to which the agency is to do so.'' The court
continued and found that what EPA had done, in segregating costs as
noted above, was an appropriate way to implement section 217(a) for
heavy-duty manufacturers.
We also note that the discussion that EMA cites from EMA regarding
the fact that the IOAA already provides the necessary authority and
requirement that fees for service only be collected when a specific
benefit falls upon an identifiable industry includes additional
discussion of what is an ``identifiable beneficiary'' versus the
general public. The court states that ``[a]
general benefit conferred
upon an industry, such as the public confidence that may attend the
mere facts of its regulation, is insufficient to justify a fee.''
(italics added). The court continues and states that ``[i]n a regulated
industry, a certificate of approval is deemed a benefit specific to the
recipient.'' (italics added).\12\ The court clearly differentiates
between the regulated industry versus the general public.
---------------------------------------------------------------------------
\12\ EMA at 1180.
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All such manufacturers receive the specific benefit of a
certificate from EPA and are otherwise regulated. However, we believe
the language of section 217 authorizes us to use a methodology that
identifies the costs directly associated or portioned by EPA that
relate to the heavy-duty engine and vehicle industry. We have in fact
identified such costs for this industry and apply no other costs to the
fees collected from it. EPA believes this is an appropriate way to
implement section 217(a).
What Commenters Said:
EMA then points to section 217's use of the term ``reasonable'' and
legislative history on this section which is to the effect that ``[t]he
authority granted to the Administrator under this section [217]
must be
carefully exercised so as to avoid proceeding with `gold plated'
compliance programs since the costs will not fall on the government.''
(See H.R. 101-490, May 17, 1990). EMA suggests that a 50 percent
allocation would also give recognition to the tremendous outlays of
capital and man-hours that HDE manufacturers already spend to conduct
extensive certification and compliance testing and given the new costs
to comply with the 2007 model year requirements and its own in-use not-
to-exceed (NTE)\13\ compliance testing.
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\13\ Not-to-exceed requirements specify that engine emissions
must not exceed a specified value for any of the regulated pollutants.
---------------------------------------------------------------------------
EMA believes that 50 percent is the appropriate portion of the
costs that should be collected in order to protect against ``gold-
plated'' programs and by ensuring that EPA maintains a meaningful role
in funding such programs. It would also recognize the capital and man-
hours that heavy-duty manufacturers spend to stay up with EPA
requirements, including costs for additional data and new test cells in
order to meet the 2007 standards. In addition, EMA again claims that
the manufacturers face extensive in-use NTE compliance testing in the
future and thus in many ways are already paying more than their fair
share of compliance cost burden.
Our Response:
EPA believes the best interpretation of section 217 is that the
costs associated with heavy-duty manufacturers be
[[Page 26236]]
segregated from other types of manufacturers. In reaching this
conclusion EPA is guided by the sentence in section 217 that EMA relies
upon ``In the case of heavy-duty engine and vehicle manufacturers, such
fees shall not exceed a reasonable amount to recover an appropriate
portion of such reasonable costs'' and the preceding sentence which
states ``The Administrator may establish for all foreign and domestic
manufacturers a fee schedule based on such factors as the Administrator
finds appropriate and equitable and nondiscriminatory, including the
number of vehicles or engines produced under a certificate of
conformity'' (italics added).
We believe it is appropriate to segregate the MVECP costs
associated with each industry and then to divide the number of
certificates within each respective industry by its segregated costs.
In order to be nondiscriminatory we also believe that all industry
groups (or ``fee categories'') must reimburse the government for all
the costs for their respective industry group. The costs that each
industry group must incur to comply with EPA's emission requirements
such as manufacturers' own NTE testing, test cell development, etc., is
properly considered by EPA when it adopts such requirements, e.g., when
it adopts emission standards. The cost to industry is taken into
account in that rulemaking. This rule, however, focuses on EPA's
actions and associated costs. We believe that is consistent with the
directive in the IOAA that special benefit programs be self-sustaining
to the extent possible and the first sentence of section 217(a)
authorizing EPA to ``* * * establish fees to recover all reasonable
costs.''
Thus, we believe that the directive to recover ``reasonable,''
``appropriate,'' and ``equitable and nondiscriminatory'' costs or fees
means that EPA must use clear and explained accounting measures, make
reasonable estimates of costs, and properly distribute its costs to
specific programs where specific benefits are bestowed to a specific
industry group.
Therefore, EPA believes the purposes of section 217 and IOAA are
also best served by collecting all costs incurred by the Agency but
only collecting the fair share of costs of HDE compliance that is
associated with such activity and therefore EPA makes no adjustment of
its fees based on commenters' suggestions.
EPA believes that the certification and compliance program designed
for the heavy-duty industry is appropriate and reasonably correlates
with the contribution of emissions from this sector to the overall
inventory of emissions from mobile sources and also is very reasonable
when compared to the level of activity and costs associated with other
industry categories, including the light-duty industry. EPA believes
its certification and compliance program is reasonable, if not modest,
for the heavy-duty industry and in no respect can it be considered a
``gold-plated'' program. From EPA's original proposed cost of $30,347
for each heavy-duty certificate we have now reduced the cost in the
final rule to $21,578.
2. Costs Unrelated to the MVECP
What We Proposed:
We proposed recovery of those costs incurred by the Agency in
conducting new vehicle and engine certification, new vehicle and engine
compliance monitoring and testing and in-use vehicle or engine
compliance monitoring. The proposed fees are based on what EPA believes
to be all recoverable direct and indirect costs associated with
administering these activities. Recoverable costs include all labor,
direct and indirect program operating costs associated with the
activities listed above, and EPA's general overhead costs. Operating
costs include such things as the purchase of equipment or property as
that specified on worksheet #10, which is the itemization of
laboratory modernization budget request.
The Cost Analysis contains worksheets which further explain the
associated costs. Several worksheets within the Cost Analysis set forth
the costs that are applicable to the heavy-duty highway certification type.
What Commenters Said:
In its initial comments, EMA expressed the concern that EPA was
seeking to assess and recover fees for EPA's developmental test lab
facilities and personnel in Ann Arbor. EMA stated that since these
facilities were not utilized in connection with the MVECP for
manufacturers' heavy-duty on-highway or nonroad engines compliance or
certification activities but instead are used for general regulatory
efforts and technological feasibility demonstrations, such efforts and
demonstrations do not confer specific benefits on any identifiable
beneficiary or manufacturer.
OPEI supported EMA's comment and contended that EPA cannot impose
certification fees on small spark-ignition (SSI) engine manufacturers
for costs that are not directly related to processing SSI engine
certification. Both commenters considered costs associated with EPA's
developmental test lab facilities and personnel associated with such
facilities in Ann Arbor, Michigan as ``unrelated costs.''
Our Response:
EPA agrees with commenters that fees should not be assessed for the
costs associated with using Ann Arbor's test laboratory facilities and
personnel for activities not related to the MVECP such as general
regulatory efforts and technological feasibility demonstrations, or for
other developmental purposes. As EPA noted in the NPRM, the costs of
activities such as regulation development, emission factor testing, air
quality assessment, support of state inspection programs and research
were not included with the costs study nor are included in the fees
proposed. (See 67 FR at 51409). As noted on worksheet #10, of
the $14,130,000 associated with the laboratory modification budget,
only $8,485,000 was deemed recoverable as laboratory equipment
associated with compliance testing activities. Specifically, those
costs linked to the ``advance engine test sites'' and the ``climate
control test facility,'' which fall under the heading ``Critical
Regulatory Developmental Test Capability'' are not labeled as
recoverable and thus are not included in the fees proposed. Worksheet
#10 also reflects that other costs associated with
developmental testing are not labeled as recoverable. As further noted
below, EPA has further refined these costs and has eliminated other
costs not determined to be MVECP related.
We did not include the costs of developmental lab facilities and
personnel in Ann Arbor in our fees calculation. The lab facilities that
were included as recoverable in the cost study are for engine testing
that EPA plans to begin in the near future. Therefore, the costs are
associated with compliance testing and are recoverable by fees.
What Commenters Said:
In its initial comments, EMA also contended that EPA does not
currently conduct any HDE testing at Ann Arbor and therefore questioned
both the need for such testing along with the additional labor costs of
conducting such testing along with the other costs of such testing as
summarized on worksheet # 3.
Our Response:
EPA notes that the need for such testing partially arises from
purely the emission contribution from heavy-duty engines which is
second only to light-duty on-highway vehicles for mobile sources and
represents approximately one-half of the emissions of light-duty
vehicles. Furthermore, EPA has experienced a relatively high degree of
the use of defeat devices and non-
[[Page 26237]]
conformity of heavy-duty vehicles in recent years. The discovery of the
level of noncompliance in this industry led to the perception that EPA
was not doing an adequate job of overseeing the HDE industry. In 1998
consent decrees were entered into with almost the entire HDE HW
industry, to resolve claims of several cases of noncompliance. The
Agency is only now beginning on its efforts to test some of these
vehicles during in-use operation over their useful lives. EMA's comment
suggests that it may be unnecessary to implement a new HDE compliance
program (or that it is not necessary until the 2007 requirements
commence), or that such a program is untenable in Ann Arbor. EPA
believes these comments are misplaced. As noted from revised worksheet
#1, EPA's proposed fees program allocated a cost of $3.2
million for the HDE on-highway industry. This amount has been further
reduced by today's final rule.
EPA plans at this point to conduct dyno certification testing and
in-use testing on 9 families out of 150 families, and approximately 11
additional families using portable test equipment for in-use
surveillance testing. Thus, EPA believes that given the past rates of
compliance with emissions standards of these industries, along with
emissions contributions, demonstrates that creation of a reasonable
compliance program for the heavy-duty industry is reasonable.
EPA believes it has developed and is now in the process of
implementing a cohesive and comprehensive compliance program, including
a significant component in Ann Arbor, for HDE on-highway engines. EMA
is correct that a testing program in Ann Arbor did not exist at the
time of the fees proposal, however, EPA has extensive experience in
testing light-duty vehicles and has identified a similar need for
heavy-duty in order to ensure that any emission problems are found in a
timely manner. Similarly, EPA has extensive experience with procuring
vehicles for testing and estimating costs and we note that commenters
did not question the accuracy of such costs. EPA has invested the
requisite resources to conduct a testing program in Ann Arbor and plans
to use that facility along with testing conducted in the Washington, DC
area and at any necessary outside contracted laboratories as explained
at 2.2.4.
3. Costs for In-use Programs
What We Proposed:
We proposed continuance of the Agency's current compliance methods
for light-duty vehicles, motorcycles and heavy-duty highway vehicles
and engines which insure the overall compliance of a vehicle or engine
with applicable emission standards throughout their useful life. EPA
explained that this certification process may include confirmatory
testing (testing conducted by EPA in-house to confirm manufacturer test
data) and compliance inspections and investigations (such as selective
enforcement audits) and in-use testing. (67 FR at 51406-51408).
Currently, EPA conducts testing of in-use heavy-duty highway engines
and nonroad compression-ignition engines at costs of $297,200 and
$72,800, respectively. This testing is screening in nature, and uses
portable test equipment on-board the vehicle. This screening is used as
an indicator of engines that may be noncompliant. To assist in this
testing, EPA is planning to purchase commercial emission detection
units that can monitor emissions from heavy-duty engines and nonroad
compression-ignition engines during use at costs of $80,000 and
$20,000, respectively. These costs are shown on worksheet #13.
We also proposed fees for new compliance testing for in-use heavy-
duty engines. Some of the testing will be conducted in the Ann Arbor
laboratory at a test site that is being upgraded to conduct compliance-
level tests. The proposed \14\ costs for the in-use testing conducted
at EPA's Ann Arbor facility included the equipment costs listed in
revised worksheet #10 ($385,000 per year for heavy-duty), the
labor listed in revised worksheet #7 (1.50 FTE), and the cost
of procuring in-use heavy-duty engines listed under Engine
Procurement--Heavy-Duty, on revised worksheet #12 ($68,960).
---------------------------------------------------------------------------
\14\ Note that the final costs for the HDE equipment costs is
$77,000 per year, not $193,000 as proposed.
---------------------------------------------------------------------------
In addition to the new testing that will be conducted in Ann Arbor,
we are planning an Enhanced Engine Compliance Program. Revised
worksheet #16 reflects the costs for this program. This will be
conducted at a contracted facility (with the exception of the selective
enforcement testing) and includes selective enforcement testing and in-
use engine dyno testing for both heavy-duty highway engines and nonroad
CI engines and certification confirmatory testing for NR CI engines.
What Commenters Said:
EMA opposed fees based on EPA's expectation of conducting an
enhanced in-use compliance program when, at the same time, the Agency
is in the process of developing and implementing a manufacturer-run in-
use testing program.
EMA states that EPA's current in-use testing is just geared toward
regulatory development and feasibility testing of its measurement
equipment. EMA further contended that the fees are inappropriate
because the NTE emissions standards and related testing and
requirements do not become effective for HDE HW engines until 2007,
much later than when the new fees become effective, and are not yet
proposed for NR CI engines.
Our Response:
Regulatory development and feasibility testing were not included in
the cost study, and were not included in the costs that will be
recovered by fees. Furthermore, the cost study only assesses the costs
of compliance and confirmatory testing.
EPA acknowledges that one purpose of the current in-use testing has
been developing the portable testing devices and related testing
procedures, but the primary purpose now and certainly in the future of
the enhanced engine compliance program will be compliance testing. This
is to implement the prohibition against use of defeat devices and to
conduct compliance testing of new emission control components based on
both the 2004 HDE HW standards and the 2007 standards. Thus both our
screening testing and laboratory testing will commence in 2004 and not
await the additional requirements (such as NTE standards) in 2007. Our
current on-vehicle testing has several compliance purposes, including:
as a general screening tool to see how such vehicles might perform
based on federal test procedure (FTP) conditions, as a tool to insure
that no heavy-duty engine manufactures are employing defeat devices. As
explained below, in addition to continuing surveillance-like testing of
small samples of vehicles per engine family, EPA plans to conduct more
compliance testing to measure the durability of new emission components
and to measure such vehicles or engines in laboratory conditions.
EPA has included the additional HDE HW compliance programs in its
cost analysis and is recovering such costs by today's rule because such
programs are part of EPA's plan to increase its compliance oversight
for this industry.
We also note that the near term compliance testing will not be for
``regulatory development'' purposes but rather to insure the durability
on new technologies being applied to heavy-duty on-highway and nonroad
engines. These new technologies have not undergone extensive in-use
scrutiny and assurances of durability. As a result an
[[Page 26238]]
in-use compliance program is necessary now to ensure that the
applicable new emission standards are being met.
What Commenters Said:
EMA states that manufacturers will be conducting a comprehensive
in-use not to exceed (NTE)\15\ testing program of on-highway HDE during
the 2005 and 2006 time period and will subsequently conduct a
manufacturer-run in-use program. EMA maintains that as a result, EPA
and the California Air Resources Board (CARB) will not engage in
routine in-use testing of HDE engine families. Thus, EMA argues that
EPA's in-use testing will be minimized, not enhanced, due to the
manufacturer-run in-use testing.
---------------------------------------------------------------------------
\15\ Not-to-exceed requirements specify that engine emissions
must not exceed a specified value for any of the regulated pollutants.
---------------------------------------------------------------------------
Our Response:
EPA agrees with EMA's comment that manufacturers will be conducting
an in-use NTE pilot testing program during 2005 and 2006 yet we
disagree with EMA's characterization of this testing as
``comprehensive.'' In fact during this pilot period it is expected that
EPA will be required to conduct its own testing if determination of the
scope or causes of potential nonconformance was required and that EPA
may be required to generate additional testing data should a remedial
action for nonconformance be sought. EPA also expects, and therefore
agrees with EMA's comment, that manufacturers will be conducting their
own in-use verification testing program in 2007, and thus EPA will not
be conducting routine testing that is duplicative of manufacturer
testing. Independent from the manufacturers' testing throughout this
time period, EPA sees the need to conduct the projected levels of in-
use testing to ensure compliance with all emission standards, including
NTE standards. EPA believes that an EPA-run in-use presence will
continue into the future at the levels projected.
The enhanced in-use program is planned by EPA to address the
Agency's compliance testing needs. New technologies, such as catalysts
and traps, will soon be added to heavy-duty on-highway (both for the
2004 and 2007 regulatory requirements) and nonroad compression-ignition
engines which have not undergone extensive in-use scrutiny and
assurances of durability. Thus we believe it is appropriate to
establish an in-use compliance presence to ensure that the applicable
new emission standards are being met. In terms of equity with other
industries and in terms of the need for the compliance programs, we
believe that EPA's proposed compliance program and the associated fees
are appropriate. In addition, as noted above, EPA's in-use testing will
not be duplicative, but as envisioned by EPA's settlement agreement
with EMA, EPA's testing will be used for purposes of verifying any
manufacturer testing as necessary in order to make final compliance
determinations and other separate testing to supplement the testing of
engine families not tested by manufacturers.
As evidence of EPA's intent to conduct the current and future HDE
HW and NR CI testing programs, EPA has formally requested an additional
$8 million in the fiscal year 2004 budget request sent to Congress ``to
help ensure compliance with the more stringent and complex Tier II and
Diesel regulations for cars, heavy-duty diesel engines, and gasoline
and diesel fuels that will take effect in FY 2004.'' Included in the
request is the ``development of a credible heavy-duty compliance
program'' as Congress has previously questioned EPA's oversight of this
industry. We believe it is appropriate to include the new testing
program costs associated with heavy-duty compliance in the budget
request just as it was appropriate to include the $10 million
associated with the recoverable portion of the $14 million spent on the
laboratory modernization projections which, at the time, was based on
both EPA's design plans and needs and a similar request to Congress for
such funding which has since been funded in subsequent appropriations.
We also note that much of the testing that will be conducted during the
2005-2006 pilot testing period will be for purposes of refining testing
protocols, etc. and that EPA must maintain a reasonable level of
compliance testing in order to ensure that emission standards are being
met while vehicles are operating during their useful lives. Similar to
EPA's in-use verification program conducted by manufacturers in the
light-duty industry (the Compliance Assurance Program (CAP 2000)), EPA
believes it will continue to test at projected levels beyond 2007 when
manufacturers will be expected to be required to conduct their own in-
use testing as EPA testing in conjunction with manufacturer testing
forms the basis for adequately determining the performance of engines
during in-use operation.
What Commenters Said:
The Alliance/AIAM maintains that since CAP 2000 transferred the
obligation of in-use verification and confirmatory testing to
manufacturers, EPA appears to be charging fees for costs that are
already borne by manufacturers. They also cite to a statement regarding
our authority to require SEA testing in the NPRM and contend that since
CAP 2000 also reduced or transferred EPA's workload as it relates to
SEA testing, that any costs associated with SEA testing is inappropriate.
Our Response:
Although the Alliance/AIAM maintains that CAP 2000 transferred the
obligation of in-use verification and confirmatory testing to
manufacturers, in fact what CAP 2000 accomplished was the shift in
emphasis that had been placed on certification to in-use performance
and in-use testing. EPA neither transferred nor intended to transfer
EPA's own in-use verification and confirmatory testing to the
manufacturers. Rather, after CAP 2000 was implemented, EPA began
gradually increasing the amount of in-use testing that it was
conducting, initially at the Virginia test laboratory (VTL) in
Alexandria, Virginia, then transferred this testing (during the time
when testing at VTL was being phased out) to EPA's Ann Arbor laboratory
where the in-use testing program continues to operate and increase in
scope. The costs of the in-use testing program reflects our
implementation of the new Tier 2 emission standards and associated new
technology.
We did not propose any fees for SEA testing for the light-duty
program, therefore, the Cost Analysis Document does not reflect any
light-duty costs for SEA testing. However, this does not preclude EPA
from increasing its in-use testing program or conducting SEA testing if
it deems it necessary in the future. Any related fee change would be
through Notice and Comment rulemaking.
What Commenters Said:
EMA indicated that EPA should readdress the assessment of fees for
in-use testing once the manufacturer-run program is up and running. EMA
also stated that by the time EPA conducts a new rulemaking for HDE
fees, the HDE manufacturers will have been making ``double payments.''
Our Response:
EPA believes that its initial modest compliance program that has
been designed for the HDE industry, and for which costs will be
recovered by today's rulemaking, is appropriate and is expected to
continue for the foreseeable future. The Agency recognizes the
significant role the HDE manufacturers will play in contributing to a
comprehensive compliance program by conducting their own in-use
testing. As such EPA anticipates that it may re-examine the scope of
its own HDE HW
[[Page 26239]]
in-use compliance program and its effectiveness at a time when its new
program is fully developed and can also be examined in the context of a
mature manufacturer-run in-use program. This reexamination will focus
on whether the manufacturer in-use testing program as finally adopted
and implemented indicates that changes are appropriate in the nature or
extent of EPA testing. EPA will examine the scope of manufacturer-run
testing and determine whether any redundant or unnecessary in-use
testing is being done by EPA or whether additional EPA testing is
required. EPA believes that this will timely address the concern of
``double payments,'' in order to avoid manufacturers paying for testing
that they are conducting and also paying fees for EPA to conduct the
same testing.
4. Costs Too High for Industry
What We Proposed:
In the Cost Analysis Document we explained that each request for a
certificate of conformity within a certification request type is
potentially subject to an equal amount of EPA expenditure related to
the applicable certification, SEA, and in-use compliance monitoring and
audit programs, and where applicable, fuel economy. EPA believes it is
fair and equitable to calculate fees in a manner whereby the fee for
each certificate within a certification request type is approximately
the same.
The Cost Analysis divided the various affected industries into
three separate categories, light-duty vehicles, heavy-duty and nonroad
compression-ignition engines, and ``Other.'' Each category was further
subdivided if the amount of testing or EPA services varied
significantly. The ``Other'' category was not subdivided as it included
vehicles and engines that would only receive certification review and
some minimal testing. The fees were determined by dividing the total
costs of services provided by EPA to this category by the projected
number of certificate applications that would be received by
manufacturers included in the category.
What Commenters Said:
Mercury Marine opposed the fee structure for marine engine
manufacturers. It asserted that EPA's proposed fee of $827 per
certificate would have a 2003 model year impact to Mercury Marine of
over $23,000.
Mercury Marine stated that the marine industry agreed to redesign
its products to meet EPA regulations in 1994 and 1995. They noted that
the cost of this redesign is in excess of 500 million dollars industry
wide. Mercury stated that the discussions at that time certainly did
not include any additional costs for certification.
Mercury Marine stated that the marine industry is sensitive to
changing costs and is unable to deal with the fees that EPA proposed.
Our Response:
As mentioned above, both section 217 and the IOAA direct EPA to
recover fees associated with the various engine and vehicle
certification and compliance programs. Today's rulemaking is in
compliance with the strictures of both provisions. Industries that have
not had to pay fees until now will be charged fees to cover the
services provided by the EPA. EPA understands that the new fees are an
expense that many manufacturers have not had to pay and that this
expense may be difficult to budget into a manufacturer's expenses. This
is why EPA notified manufacturers of the new fees early in the
rulemaking process to give manufacturers time to budget for the new fees.
To reduce their fees burden, EPA included liberal waiver provisions
for small engine families to assure manufacturers that the cost of fees
will never exceed one percent of the projected aggregate retail value
of the vehicle or engines being certified. It should be noted that when
a fee is reduced the cost of the compliance services are covered by the
government and are not distributed among other fee payers.
Although we did not mention certification fees as part of the
marine engines rulemaking, we believe that we have given adequate
notice of the new fees in order for manufacturers to prepare for the
new fees. Furthermore, since 1992 light-duty vehicle and heavy-duty
engine manufacturers have been paying fees. Thus, we also believe that
the new fees schedule will ensure the equitable treatment of all
manufacturers that are certified by EPA.
What Commenters Said:
Briggs and Stratton stated that small engine applications are
simple and straightforward, they require a minimum amount of review by
EPA, there is no OBD II, fleet averaging, etc. Therefore, only a
minimum fee should be set for certification, lower than those in the
``Other'' fee category. Because manufacturers of the small engine
industry have a larger number of smaller engine families and the
engines are of a low cost then this provides an additional
justification for lower fees.
Outdoor Power Equipment Institute (OPEI) suggested that lawn and
garden engines should be treated differently than the other engines and
vehicles in EPA's category for ``other engines.'' OPEI asserted that
EPA took the position that it incurs the same expense, whether
processing a certificate for a very complex locomotive engine, or an
engine used to power a hedge trimmer. Furthermore, OPEI comments that
although it is not familiar with the intricacies of locomotive engine
design and usage, EPA cannot possibly spend the same amount of time
certifying a locomotive engine as a lawn and garden engine.
Our Response:
To reflect the services we provide to industries within a category
(see worksheet #2 for the categories ``LDV and Highway
Motorcycles,'' ``HDE Highway and Nonroad CI,'' and ``Other'') in some
instances we further subcategorized the fee categories. In addition to
assessing the time that may be spent reviewing certification
applications within a category or subcategory, we also assessed whether
the applicable industry type would receive a similar level of
compliance testing and associated costs. The goal of this is to develop
subcategories that are expected to receive similar compliance activity
and related costs. EPA's cost analysis for the fees rule divided
categories into subcategories whenever there was a substantial
difference between the level of services given to a subcategory. For
example, EPA conducts pre-certification testing and in-use testing for
light-duty vehicle and trucks. Conversely, EPA plans to conduct much
less motorcycle testing within that same category. Therefore, the fees
for the motorcycles are less than the light-duty vehicle and light-duty
truck fees. EPA plans, for the industries in the ``Other'' category, to
conduct the same level of effort for certification review and also
plans only a minimal amount of testing. Testing is a major cost that
separates subcategories and is not a significant cost for this
category. Therefore, the industries in the ``Other'' category remained
grouped together.
The certification information submitted by the individual
industries largely consists of test data, descriptions of engines or
vehicles in the engine family, and forms indicating the standards that
the vehicles or engines meet. This information does not vary
significantly whether the engines are large and complex or small and
less complex. Certification review of all industries in the ``Other''
category consists of a review of the information that the manufacturer
submits. The review includes determining that the engine or vehicle is
being certified in the correct certification category, that the
certification tests were conducted on the worst case engine or vehicle,
that the forms were filled out correctly, and
[[Page 26240]]
that the vehicle or engine meets EPA's emission standards. In this
respect, all of the certificate applications submitted by the
industries included in the ``Other'' category are the same.
In the course of EPA's review of certification applications,
certain items may be reviewed more closely for one application than for
another application, items such as defeat devices, auxiliary control
devices or new technology. EPA decides whether these items should be
reviewed depending upon the history of the industry, the manufacturer
and other factors. Although the level of review of these items may
change the total time spent on an individual or an industry's
applications, the difference is not significant and does not merit a
separate subcategory. Furthermore, other factors such as assisting new
manufactures and reviewing incomplete applications require more time
than the average difference in review time for industries'
applications. For these reasons, EPA decided that the applications in
the ``Other'' category are provided basically the same review and
testing services and, therefore, should be assessed the same fee.
What Commenters Said:
OPEI stated that EPA had an overly simplistic arithmetic system of
evenly dividing the certification costs between such disparate
industries (as locomotive and trimmers) and OPEI finds this
inappropriate and inequitable. OPEI asserted that, using the figures
generated by EPA, more than half (546) of the 1,027 engine families in
the Other Industries category are lawn and garden engines. In addition,
OPEI stated that the simple arithmetic used by EPA results in unfairly
loading the ``lion's share'' of the certification costs onto a single
industry which should only be responsible for its own share of
certification costs.
Our Response:
EPA divided the costs attributed to the services provided to the
``Other'' category by the number of projected certification
applications from the industries included in this category since each
application entails approximately the same amount of review or effort
by the Agency. Regardless of the disparity of the applications, the
amount of time spent on locomotive applications and trimmer
applications will be about the same.
The projected number of applications for the lawn and garden
industry constitutes more than half of the applications that will be
received and processed by the Agency. Over half of resources that EPA
spends on the ``Other'' category will be spent on lawn and garden
engines. For this reason, we believe it is appropriate, equitable and
nondiscriminatory for the lawn and garden industry to pay more than
half of the costs for the ``Other'' category.
C. Cost Study
1. Number of Engine Families
What We Proposed:
EPA grouped industries into three fee categories (industry groups):
(1) Light-Duty, consisting of light-duty vehicles and highway
motorcycles; (2) Engines, consisting of heavy-duty highway and nonroad
compression-ignition engines; and (3) ``Other'', which contains other
vehicles and engines. We proposed a fee schedule based upon the
recoverable costs for each certificate type under each fee category and
the number of known and projected certificates issued annually for that
certificate type. We then divided our recoverable costs by the number
of certificates expected to be issued to manufacturers within that
certification request type. Thus, for example, we determined the
recoverable costs for the nonroad CI industry as $1,300,155 and the
number of certificates issued as 603 and the resulting fee is $2,156.
(Revised worksheet #2 of the revised Cost Analysis shows
updated cost for the NR CI industry to be $2,205,895, the updated
number of engine families to be 662 resulting in a new fee of $1,822.)
We determined the number of certificates expected to be issued by
examining EPA's certification database. For currently active
certification programs, we listed the number of certificates based on
the latest information at the time of the proposal which was for the
2001 model year (67 FR at 51406). For other newly regulated industries
for which certificates have not yet been issued, we projected the
number of certificates based on discussions with manufacturers and
information presented to EPA during the emission standards rulemakings
for such industries. Id.
What Commenters Said:
EMA states that EPA significantly understated the number of HDE on-
highway and nonroad CI engine certificates that are issued annually
which resulted in an overstatement of the fees that should be allocated
to each certificate. EMA stated that in 2001, we issued 159 HDE HW and
661 nonroad CI certificates. EMA also asked for an explanation as to
why more current years and certification data should not be used since
that would be more reflective of the increase in engine families.
The Alliance/AIAM stated that the Agency did not provide an
explanation for the estimated number of certification requests used in
calculating the fees. The Alliance/AIAM expresses concern that the
number of light-duty certificates appears to be based on CAP 2000
assumptions; assumptions that they maintain have not materialized. In
addition, they contended that EPA's Tier 2 and heavy-duty regulations,
as well as CARB's low emission vehicle (LEV II) regulation, will likely
result in creation of more certification requests than projected and
lead to collection of more fees by EPA. As a result, EPA may collect
more fees than it is entitled to if it receives more certification
requests than projected.
The Alliance/AIAM submitted further comment that they expected 35
additional certificates to be issued for light-duty vehicles for model
year (MY) 2004 and that the number of certificates would either remain
the same or increase as a result of Tier 2. The Alliance/AIAM was
hesitant to predict the effect of the CAP 2000 rule on the number of
certificate requests.
The Alliance/AIAM suggests that EPA should base its fee calculation
on the most current number of issued certificates. Because this number
may fluctuate and because it may be difficult to project future
certification trends, they suggest that EPA keep track of the trends
and assess a fee based on the average taken from several years. Lastly,
they suggest that this process be done by rulemaking to prevent EPA
collecting more fees than appropriate.
Our Response:
EPA's intention throughout this rulemaking process is to determine
with a reasonable level of certainty the recoverable costs of
implementing its MVECP and assessing fees per certificate to cover such
costs. Thus, we agree with the comment that we should use the most
current and accurate number of issued certificates. However, EPA does
not agree with the comments of EMA that the number of certificates used
in the cost determination should remain the same regardless of the
impact on fees collected. Simply put, EPA believes it should only
recover what it anticipates to be its actual costs and should devise a
reasonable system in order to charge a fee that most closely matches
its final actual costs and final number of certificates to be issued in
a given year. As explained below, EPA is including a ``rolling
average'' formula to be applied in 2006 and thereafter in order to more
accurately reflect the number of certificates issued each year and the
corresponding fee that is owed per certificate.
In light of the comments that we received, EPA gathered information
[[Page 26241]]
regarding the number of certificates for HDE HW, nonroad CI, and light-
duty vehicles and trucks, motorcycles and ICIs from several databases,
and reexamined its certification numbers for the last three years,
2000, 2001 and 2002 which comprise EPA's most recent and complete
information.
Using an average of the past two years of the most recent complete
certification information (2001 and 2002) we determined the average
number of certificates for HDE HW, nonroad CI, and light-duty vehicles
and trucks certification request types. For the other types EPA saw no
need to reexamine its projected number of certificates nor did EPA
receive any comment. For the light-duty vehicles and truck category we
have chosen to keep the number 405 as used in the proposal. Although
the actual average is 382 for the 2001 and 2002 model years, we believe
it is likely that there will be at least a modest increase in the
number of light-duty vehicle and truck certificates given the
complexity of Tier 2 standards. In addition, information submitted by
the Alliance/AIAM states that the number of additional certificates for
2004 may be as high as 35. This would bring our projection to 417 for
2004. However, this is a projection and we do not have complete
confidence in this number. Therefore, we have decided to retain the
proposed 405 certificates in the final rule.
For the HDE HW category we have determined, based on a re-
examination of our database and discussions with representatives from
EMA, that 148 certificates is a more accurate projection, rather than
the 130 in the proposal. This will result in a slight reduction of fees
for such certificates. For NR CI we have also revised the number
slightly upward to reflect a more accurate projection of 662 rather
than the proposed. We have re-calculated the fees amount for each of
these categories and this is reflected in the new fees table (a new
revised worksheet #2 of the Revised Cost Analysis available in
Docket OAR-2002-0023) and at 40 CFR Sec. 85.2405(a).
D. Automatic Adjustment of Fees
What We Proposed:
We considered the effect of inflation on the MVECP and explained
that inflation may have an impact on our recovery of the full costs
associated with the program. Thus, we proposed, beginning with the 2005
model year, an annual automatic adjustment of fees based on the annual
change in the Consumer Price Index (CPI). We also proposed a formula to
enable manufacturers to calculate the increase. We also solicited
comments on alternate ways of adjusting fees on account of inflationary
factors. (See 67 FR at 51410)
We explained that we intended to issue annual letters, again
beginning with the 2005 model year, informing manufacturers of the
adjusted applicable fees. The proposed formula included an ability to
project future fees due to the CPI adjustment based on two model years
before the adjusted fee model year. Thus, for model year 2005 EPA
proposed a formula whereby the CPI for MY2003 (as determined by July
2003 CPI number) is compared to the CPI from 2002. We also solicited
comments regarding notification procedures of the new fee amounts. Id.
What Commenters Said:
One commenter urged the Agency not to include an annual automatic
adjustment and maintained that an ``automatic'' increase in fees based
on the CPI for ``all items'' should not be implemented as the actual
costs of MVECP will be impacted by many factors more significant than
the CPI and such factors are not significantly correlated with the
general rate of inflation. This commenter also suggested that the
Agency's formula for annual adjustment is improper because many of the
underlying costs are actually one-time capital expenditures that will
not fluctuate at all in response to any changes in the CPI.
Our Response:
In order to comply with both section 217 and the IOAA, and to
timely collect fees based on actual costs and to collect fees for such
costs at time of certification, EPA believes that it is most practical
and appropriate to collect fees based on what it reasonably believes
will be its actual costs at the time new certification applications are
received. Thus EPA continues to believe it most appropriate to
determine its current costs and how such costs may be affected by
future events, including events such as inflation or the addition of
new compliance programs. Although EPA does recognize that several
variables exist which may influence the actual future costs that EPA
incurs to provide MVECP services, including changes to its budget (and
resulting changes to EPA's expenditures on certain compliance programs
such as contract costs for testing and procurement of testing vehicles,
etc.), EPA believes that such general historical budget variability
(appropriations for most of EPA's costs don't change dramatically from
year to year and general contract costs remain relatively unchanged)
has not in fact significantly affected EPA's actual costs as compared
to increases associated with annual inflation costs. However, by
today's rule we are narrowing the budget items that will be affected by
the inflation adjustment to further limit those items that may indeed
be affected by general budget variability.
We believe it is reasonable to consider the effect of inflation on
the costs of conducting our various certification and compliance
programs. However, at this time, EPA chooses to only implement a fee
schedule that will include some adjustment by calendar year for labor
costs as these costs can be reasonably determined as explained below.
We also agree with comments that fees should not be adjusted for
one-time capital expenditures or for other fixed costs. Because several
components of the MVECP reflect items that have a ``fixed cost'' (for
example, the costs associated with the Lab Modernization), EPA has
changed the inflation formula to address concerns regarding ``one time
costs'' and that such cost not be adjusted by the CPI. At this time,
EPA will only adjust labor costs each calendar year because, as
explained below, we can reasonably determine the effect of inflation on
these costs.
EPA also believes that to some extent it may not be appropriate to
automatically adjust fees for the costs of some compliance programs,
including current direct program costs (e.g. contract costs) despite
the general history of such costs increasing by some amount each year.
Because EPA is not only continuing to implement its many current
compliance activities but is also implementing several new compliance
programs that may not have a predictable cost increase each year that
tracks the inflation rate, EPA is not adjusting such direct program costs.
EPA believes that the determination of the labor requirements to
cover the numerous compliance activities was accurate and that such
labor requirements will remain constant or perhaps slightly increase
within the next few years. Such labor costs (as expressed in annual
salary increases or decreases) for EPA historically track a rate of
increase (or decrease) that is at least as high as that of the CPI.\16\
Thus, we are finalizing our regulations with a provision for automatic
adjustment of
[[Page 26242]]
labor costs for each fee category based on the changes in the CPI. The
fee formula and the table with labor and fixed cost values are
discussed in detail in section II.B. above.
---------------------------------------------------------------------------
\16\ EPA normally uses Federal payroll and non-payroll inflators
for budget projections issued by the Office of Management and Budget
(OMB) when OMB submits the President's Budget to Congress and the
assumptions used for the ``inflators'' are higher than the CPI
inflation adjuster that EPA is choosing to use to account for
increases in labor costs in today's rulemaking. For example, in the
fiscal year 2004 (FY 04) President's Budget to Congress, EPA used a
payroll (or labor) inflator of 1.048 and for FY 05 through FY 13 EPA
used an inflator of 1.040.
---------------------------------------------------------------------------
EPA notes that manufacturers may have some concern regarding the
proper budgeting for its costs for future certification applications
and thus the regulations note that EPA will provide notification to
manufacturers at least 11 months in advance of the calendar year in
which new fees are due. If an event such as a rulemaking occurs that
causes a significant change in the number of certificate applications
received, the Agency will reexamine the formula to determine whether
adjusting the fees based upon the number of certificate applications is
still applicable.
E. Effective Date and Application of New Fees
What We Proposed:
We proposed the ``effective date'' of our new fee schedule as 60
days from the date of publication of the final rule (67 FR at 51411).
We also proposed applying the new fees to 2003 and later model year
vehicles and engines. Id. In addition, we proposed excluding
``complete'' certification applications received prior to the effective
date of the new fees regulation (including any remaining 2003
certification applications). Id.
What Commenters Said:
One commenter suggested that the new fee schedule should take
effect for certification applications for the model year following the
model year in which the final rule is published. In this way the
manufacturers will have certainty regarding the appropriate amount of
the certification fee to be submitted and thus will not have to guess
the date that EPA will deem their certification application complete.
The Alliance/AIAM stated that EPA's proposal to increase fees (for
light-duty vehicle manufacturers) for manufacturers that submit 2003
and later model year certification requests received on or after 60
days from publication of the final rule creates uncertainty regarding
the appropriate fee to submit with each application. The commenter
notes that it cannot project when EPA will issue the rule. This
information is needed for it to perform its necessary budgeting to
assure that it has necessary funds to cover the increase.
Our Response:
EPA understands that it would be helpful to manufacturers to have a
date before which they are assured that they will be paying the old
fees so that they can budget with certainty up to that date. For this
reason EPA is finalizing the implementation date as 60 days from the
publication of the final rule. We believe that at least a 60 day lead
time between when the rule is published and when applicants will be
required to pay new fees is adequate and appropriate. EPA is again
guided by the principle that its compliance programs ought to be self-
sustaining to the extent possible and that because we are incurring
costs at this point in time that new fees should commence. Although we
anticipated that the final fees rule would become final in fiscal year
2003 (FY03), and based our projections of costs to be incurred during
that time, we believe it even more appropriate that we collect fees in
FY04 (during which this rule becomes effective) as our compliance
programs based on new requirements such as Tier 2 and the 2004 HDE
regulations will be in place and our anticipated budget increases will
be in place.
In addition, manufacturers have been informed of the new fees
rulemaking and commencement of new fees in FY03 for over 2 years. An
advance fees rulemaking briefing was held for regulated industries on
August 29, 2001 in Ann Arbor, MI. At that time EPA provided a draft of
the fees schedule and cost study. The purpose of the briefing was to
give businesses enough time to plan for fees in their 2003 FY budgets.
Furthermore, the proposed rule was published in August 2002 giving
manufacturers notice of the fees rulemaking and implementation time
periods. Therefore, the new fees will be applicable to any new
certification applications (for MY 2004, or 2005) submitted and
received more than 60 days after publication of this rule in the
Federal Register. The new fees will not apply to any certification
applications received by EPA prior to the effective date of the
regulations, providing that they are complete and include all required
data.
F. Reduced Fees
1. Reduced Fee of One Percent Aggregate Retail Price
What We Proposed:
EPA proposed to continue the current two part test which, if met,
would qualify an applicant for a reduction of a portion of the
certification fee.
A reduced fee is available when:
(1) The certificate is to be used for the sale of vehicles or
engines within the U.S.; and
(2) The full fee for the certification request exceeds one percent
of the projected aggregate retail price of all vehicles or engines
covered by that certificate.
Manufacturers that qualify for a reduced fee pay one percent of the
aggregate retail price of the vehicles and engines covered by a
certificate. Under the reduced fee provision, we proposed to retain
this requirement to ensure proper balance between recovering the MVECP
costs and mitigating economic burden. EPA invited comment on the
continued use of the one percent multiplier, 67 FR 51412.
The Agency proposed two separate pathways by which a manufacturer
may request and pay a reduced fee amount. Under the first pathway,
manufacturers seeking a reduced fee would include in their
certification application a calculation of the reduced fee and a
statement that they meet the reduced fee criteria.
Under the second pathway, manufacturers who, due to the nature of
their business, are unable to make accurate estimates of the aggregate
projected retail price of all the vehicles or engines to be covered by
the requested certificate, would pay one percent of the retail selling
price of five vehicles, engines or conversions when applying for a
certificate or a minimum fee of $300. Id.
What Commenters Said:
VSC contended that the proposed minimum ``5-car-up-front deposit''
was unreasonable and that the Agency had failed to provide a rationale
for its proposal. VSC also stated that it is just as common, if not
more common, for an ICI's certificate to cover a total of one (1) car
as opposed to 5. VSC noted that EPA had previously acknowledged that it
is difficult for ICIs to work with a system that requires them to
predict the number of cars they will import. VSC stated that the same
associated problem would arise under the Agency's proposal.
VSC suggested that the one percent low volume fee should allow the
ICI to pay one percent of the value of the cars to be covered by the
certificate for which the ICI has a contract when making a
certification request. VSC further suggested that for additional cars
imported under the certificate, ICIs should pay one percent of the
value of each car as each car is imported, until payment of the
standard $8,394 fee. VSC noted that under a pay-as-you-go system, EPA
would receive fees at the time of certification or importation and ICIs
would only pay for cars they are actually working on and importing.
Our Response:
In response to comments received EPA has modified its reduced fee
provisions to respond to many of the issues raised. The revised reduced
fees
[[Page 26243]]
provisions also include two pathways that are discussed in detail in
section II.F. above.
The first pathway will be available for engine families having less
than six vehicles, none of which has a retail price of more than
$75,000 each. Manufacturers seeking a reduced fee shall include in
their certification application a statement that the reduced fee is
appropriate under the criteria. If one percent of the aggregate retail
price of the vehicles or engines is greater than $750, the manufacturer
must submit a calculation of the reduced fee and the fee. If one
percent aggregate retail price of the vehicles or engines is less than
$750 the manufacturer will submit a calculation of the reduced fee and
an initial payment of $750. In the event that the manufacturer does not
know the value of all of the vehicles to be imported under the
certificate, it may use the values of the vehicles or engines that are
available to determine the initial payment.
As suggested by VSC, after the initial payment has been submitted,
the above reduced fee provisions will allow manufacturers to pay one
percent of the retail price of each vehicle or engine as needed. This
pay-as-you-go provision will give ICIs and other manufacturers the
advantage of only paying a $750 (equivalent to the average fee for two
imported vehicles) or one percent of the value of the vehicles initial
payment and then paying for additional vehicles as needed. If the
initial payment is greater than the final fee, the manufacturer may
request and receive a refund for the difference.
Under the provisions we are finalizing today, the difference
between the initial payment and the final reduced fee will not be
required until after the end of the year. Furthermore, there is no $300
minimum fee as was proposed. Therefore, EPA believes that the reduced
fee provides flexibility and mitigates any unreasonable economic burden
that a full fee may present to manufacturers with small engine families.
2. Retroactive Payment Under Reduced Fee Program
What Commenters Said:
EMA submitted an additional alternative to the reduced fee
pathways. EMA suggested that manufacturers who pay the full fee at the
time of certification should also have the ability to seek refunds at
the end of the model year if the fee paid exceeds one percent of the
retail sales. According to EMA, this would enable EPA to receive the
fees up front and avoid any unnecessary delays while not adding too
much year end burden for manufacturers already required to produce
year-end production volume reports.
EPA Response:
Currently, the retroactive reduced fee option is available for
those engine families/test groups that meet the one percent reduced fee
provision. Our response is just to clarify the process. A manufacturer
that pays the standard fee for an engine family or test group and later
determines that it meets the criteria for a reduced fee may qualify for
a retroactive reduced fee. Under today's provision, the manufacturer
may be required to submit a report card and a refund request at the end
of the calender year for the amount of the difference between the fee
paid and one percent of the aggregate retail sales price of the
vehicles or engines covered by the certificate.
G. ICI Issues
1. ICIs and SBREFA
What We Proposed:
In section VIII.B. of the proposed rule we concluded that our
proposed fees will have no significant economic impacts on a
substantial number of small entities. In addition, we also stated that
our reduced fee provisions would limit the impacts of this rule on
small entities. (Section VIII.B., Regulatory Flexibility Act (RFA), as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), 5 U.S.C. 601 et seq. (67 FR 51414).
What Commenters Said:
VSC stated that the Regulatory Flexibility Act, 5 U.S.C. 601-612
was amended by SBREFA, Public Law 104-121, to ensure that concerns
regarding small entities are adequately considered during the
development of new regulations that affect them. VSC further quoted the
SBREFA amendments in which Congress stated that ``uniform Federal
regulatory * * * requirements have in numerous instances imposed
unnecessary and disproportionately burdensome demands including legal,
accounting, and consulting costs upon small businesses * * * with
limited resources[,]'' and directed agencies to consider the impacts of
certain actions on small entities.
VSC suggested that EPA consider two points: (1) ``the significant
economic impact the proposed rule has on small entities; and (2) any
significant alternatives to the proposed rule which would ensure that
the objectives of the proposal were accomplished while minimizing the
economic impact of the proposed rule on small entities and providing
relief to small certifiers of vehicles.''
Our Response:
We are committed to minimizing the burden of the fees regulations
on small entities or entities with small engine families to the extent
feasible while still meeting the statutory requirements to charge fees.
The Agency did consider the economic impacts of this rule on small
entities, however, we believe this rule will not have a significant
economic impact on a substantial number of small entities. We reviewed
the rulemakings that set emission standards for the industries affected
by the fees rule, including those manufacturers affected by the
recreational vehicle rule. The review showed that approximately 108
small businesses will be paying fees. The Agency examined the cost of
the fees and determined that the average cost for manufacturers of all
sizes, across industry sectors, is approximately $.41 per vehicle or
engine.
Nevertheless, to mitigate possible economic hardship EPA is
adopting an alternative to the full certification fee requirement
including reduced fee provisions to help small volume entities meet the
regulations while ensuring the fees rule objectives can be
accomplished. The reduced fee provisions limits the impact of this rule
on small entities to one percent of the aggregate retail sales price of
the vehicles or engines covered by a certification request. Hence, the
fee a manufacturer would pay will not exceed one percent of the
aggregate retail sales price of the vehicles or engines covered by a
certificate. This one percent amount represents a modest cost of doing
business. EPA also believes enough notification of this fees rule was
provided to allow manufacturers enough time to plan for fees in their
budgets.
What Commenters Said:
VSC suggested that EPA should recognize that ICIs are not OEMs. VSC
further stated that SBREFA requires this distinction and also compels
EPA to adopt a fee system that carefully considers ICIs and how they
differ from OEMs. VSC requested that we consider and include the fact
that ICIs are small businesses that, on the average, import fewer than
100 vehicles annually.
Our Response:
EPA believes that although ICI manufacturers are often small
businesses and in some instances may differ from OEMs, both ICIs and
OEMs are certificate holders. As certificate holders, ICIs are required
to meet certain certification and compliance requirements. These
requirements
[[Page 26244]]
include meeting emission standards, and also include undergoing recall,
maintenance instruction, warranty, running changes, emissions testing
and labeling, and fuel economy testing and labeling which are the same
requirements with which light-duty OEMs must comply. EPA incurs costs
for conducting these types of services.
Under the ICI category of the cost study, we have calculated fees
only for the services applicable to ICIs and thus, ICI certificates
cost considerably less than certificates for other vehicle
manufacturers. EPA also believes that the reduced fees provision, while
enabling the objectives of both section 217 and the IOAA to be met,
minimizes the economic impact of this rule on small entities or
entities with small engine families.
H. Other Topics
1. Fee Payment Timing
What We Proposed:
EPA proposed that fees must be paid in advance of receiving a
certificate (67 FR 51410). We also emphasized that the Agency would not
process applications until the appropriate fees had been fully paid.
(67 FR 51411).
What Commenters Said:
Three commenters suggested that the Agency should not require fees
payment prior to issuing certificates.
Our Response:
In most instances, we begin reviewing certification applications
and, in some cases, complete our review, prior to receiving fees
payment. Thus, we do not necessarily suspend application review because
of non payment of fees. However, because we cannot issue a certificate
of conformity before receipt of fees, we are maintaining the
requirement that fees be paid in advance of submitting an application
for certification. We believe this will ensure that we do not delay the
issuance of certificates.
2. Refunds Less Than $500 and Final Fee Payments Less Than $500
What We Proposed:
For applicants who fail to obtain certificates and who subsequently
request refunds, we proposed full fee refunds of amounts exceeding
$500. This was a change from the existing requirement that allowed for
partial refunds when applicants fail to obtain a signed certificate
(see 40 CFR Sec. 86.908-93(b)(1), as amended by Sec. 86.908-
01(b)(1)). We also proposed the option of applying the refund to
another certification request.
Further, we proposed the continuation of the existing requirement
of providing partial refunds resulting from decreases in the aggregate
projected retail sales price of vehicles or engines covered by the
certification request. (See, 40 CFR 86.908-93(b)(2) and 86.908-
01(b)(2)). We also invited comments on whether to limit refund requests
to $500. (67 FR 51412).
As discussed in section II.F. above, we proposed a reduced fee
provision that includes calculating a final reduced fee within 30 days
of the end of the model year and ``true-up'' of any additional fees
owed within 45 days of the end of the model year. Under the 1992 fees
rule reduced fee applicants pay an additional waiver fee any time the
aggregate projected retail sales price of the vehicles or engines to be
covered by a certification request changes. Also, there was no minimum
amount due before payment was required. (See, 40 CFR 86.908-93(a)(5)).
What Commenters Said:
EMA supported our proposal to allow manufacturers to request a full
refund in cases where a certificate is not issued. EMA suggested that
40 CFR 85.2407(a) should read ``may,'' instead of ``shall.'' EMA
suggested that we clarify that manufacturers are entitled to a full
refund regardless of the reason for non-issuance of a certificate.
EMA suggested that 40 CFR 85.2407(b) should read ``shall'' instead
of ``may.'' EMA also suggested that refunds should be predicated upon a
decrease in ``actual'' rather than ``projected'' sales prices.
EMA further objected to proposed 40 CFR 85.2407(b)(3) and
(b)(4)(vi) and argued that manufacturers should be entitled to any and
all refunds regardless of the amount.
Our Response:
EPA agrees with EMA's comment regarding refund language. Regulatory
language has been amended to reflect these changes in 40 CFR Sec.
85.2405(a) and (b). Upon request from a manufacturer EPA will refund
fees. This includes instances of overpayment, when the manufacturer
withdraws an application or when EPA denies a certificate as well as
any other circumstances that would lead to a certificate not being issued.
However, we disagree with the comment that refunds should be
predicated on the decrease in the aggregate ``actual'' price rather
than the aggregate ``projected'' price. This is because not all of the
vehicles or engines would have been sold and the actual price may not
be available at the time of the refund request. Therefore we have
revised the regulatory language to indicate projected or actual price.
The manufacturer should use whichever is more accurate.
EPA agrees that it should not limit refunds to $500 minimum.
Therefore EPA is not adopting proposed Sec. 85.2407(b)(3) and
(b)(4)(vi). However, the rationale behind EPA's proposal that
manufacturers should not be required to pay a ``true-up'' payment of
less than $500 was balanced out by the proposal that refunds would be
limited to amounts of $500 or more. We believed that the amounts not
paid in refunds would equal the payments not received for ``true-up.''
Therefore, since EPA will be paying full refunds, EPA is setting forth
in today's rule that full payment must be submitted at true-up to avoid
an overall deficit in its recovery of MVECP costs and to continue to
abide by the intent of the IOAA and CAA.
3. Reduced Costs for California-Only
What We Proposed:
EPA proposed a separate California-only fee for only the light-duty
and heavy-duty fee categories. No California-only fee was proposed for
the motorcycle, ICI, Nonroad CI and Other categories because EPA's
responsibilities for vehicles and engines are not decreased even though
certification is only requested for the State of California.
What Commenters Said:
One commenter argued that our proposed fees for California-only
certificates was inappropriate since the Agency did not provide any
benefits to manufacturers.
Echo stated that the ``Other'' category should have reduced fees
for California-only families because other categories have reduced fees
for California-only. Echo stated that the full fees for these families
cannot be justified and that EPA should not charge for service not
provided. Echo also observed that CARB may decide to add its own fees
further raising the cost to manufacturers.
OPEI commented that EPA should not impose certification fees on
California-only engine families that are not sold outside of
California. OPEI questioned the utility of requiring this dual
certification burden. The commenter further argued that the proposed
fees should be waived since California-only engine families are sold
only in California, and as a result, do not generate national sales
revenue. OPEI, further requested that the certification fee be waived
with respect to California-only engine families.
Our Response:
The Clean Air Act requires that vehicles sold in the United States
be covered by a federal certificate of conformity including those sold in
[[Page 26245]]
California. The EPA receives applications and certifies all vehicles
and engines sold in the U.S. The EPA review and testing required for
California-only certification, and therefore the benefits received, are
no less than that required for other certificates. Test results
generated by EPA from certification tests of these vehicles and engines
are shared with the CARB to assist in its certification process.
However, the California-only fee is less than the standard fee because
EPA does not incur the cost of the in-use program. The CARB conducts an
in-use program for these categories, but at this time EPA does not.
Thus the fee for California-only certificates for light-duty and heavy-
duty vehicles and engines reflects the EPA costs in the certification
component of the MVECP.
In the case of engines and vehicles in the ``Other'' category, EPA
is assessing the costs of the certification and minimal testing
services that it provides. A lower California-only fee is not offered
as EPA's work is not decreased by compliance work done by the CARB.
OPEI stated that no national sales revenue is generated to absorb
the cost of the fee, however, because EPA reviews the certificate
applications and the manufacturer receives benefit from receiving a
certificate, EPA should recover the costs of providing this service as
directed by the CAA and the IOAA.
VI. What Is the Economic Impact of This Rule?
This rule will not have a significant impact on the majority of
vehicle and engine manufacturers. The cost to industry will be a
relatively small value per unit manufactured for most engine-system
combinations.
EPA expects to collect about 18 million dollars annually, an
increase of 7 million dollars from the 11 million that is currently
collected. This averages out to approximately 41 cents per vehicle or
engine sold annually. However, for engine families or test groups with
low annual sales volume, the cost per unit will be higher. To remove
the possibility of serious financial harm to companies producing only
low sales volume designs, the regulations adopted today include reduced
fee provisions for small volume engine families to reduce the burden of
fees. These provisions should alleviate concerns about undue economic
hardship to small volume manufacturers. Refer to the Regulatory
Flexibility Act section, section VII.B, below, for more discussion on
this topic.
VII. What Are the Administrative Requirements for This Rule?
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735 October 4, 1993), EPA must
determine whether this regulatory action is ``significant'' and
therefore subject to Office of Management and Budget (OMB) review and
the requirements of this 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 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 the Executive Order 12866, it has been
determined that this rule is a ``significant regulatory action''
because this rulemaking materially alters user fees. As such, this
action was submitted to OMB for review.
B. Paperwork Reduction Act
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 2060-0545.
EPA estimates that 1600 certifications will be requested annually
of which 180 will qualify for a reduced fee. In addition, approximately
50 fee refunds will be processed each year. The total burden of these
projected responses per year is 500 hours; an average of 18 minutes per
response. There are no capital, start-up, operation, maintenance or
other costs associated with this collection.
The annual public reporting and recordkeeping burden for this
collection of information is estimated to average 0.3 hours per
response. 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.
EPA has established a public docket for this ICR under Docket ID
No. OAR-2003-0111, which is available for public viewing at the Air and
Radiation Docket and Information Center, in the EPA Docket Center (EPA/
DC), EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC.
The EPA Docket Center Public Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Reading Room is (202) 566-1744, and the
telephone number for the Air Docket is (202) 566-1742. An electronic
version of the public docket is available through EPA Dockets (EDOCKET)
at http://www.epa.gov/edocket.
C. Regulatory Flexibility Act (RFA)
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule.
For purposes of assessing the impacts of today's rule on small
entities, a small entity is defined as: (1) A small business that meets
the definition for business based on SBA size standards; (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field. Table VII.B-1 provides an overview of the
primary SBA small business categories potentially affected by this
regulation. This list is not intended to be exhaustive, but rather
provides a guide regarding entities likely to be regulated by this action.
[[Page 26246]]
Table VII.B-1.--Primary SBA Small Business Categories Potentially Affected by This Regulation
----------------------------------------------------------------------------------------------------------------
Industry NAICS \a\ codes Defined by SBA as a small business if: \b\
----------------------------------------------------------------------------------------------------------------
Farm Machinery and Equipment 333111 < 500 employees.
Manufacturing.
Lawn and Garden Tractor and Home Lawn and 333112 < 500 employees.
Garden Equipment Manufacturing.
Construction Machinery Manufacturing..... 333120 < 750 employees.
Mining Machinery and Equipment 333131 < 500 employees.
Manufacturing.
Turbine and Turbine Generator Set Unit 333611 < 1,000 employees.
Manufacturing.
Speed Changer, Industrial High-speed 333612 < 500 employees.
Drive and Gear Manufacturing.
Mechanical Power Transmission Equipment 333613 < 500 employees.
Manufacturing.
Other Engine Equipment Manufacturing..... 333618 < 1,000 employees.
Nonroad SI engines....................... 333618 < 1,000 employees.
Internal Combustion Engines.............. 333618 < 1,000 employees.
Industrial Truck, Tractor, Trailer, and 333924 < 750 employees.
Stacker Machinery Manufacturing.
Power-Driven Handtool Manufacturing...... 333991 < 500 employees.
Automobile Manufacturing................. 336111 < 1000 employees.
Light Truck and Utility Vehicle 336112 < 1000 employees.
Manufacturing.
Heavy-Duty Truck Manufacturing........... 336120 < 1000 employees.
Fuel Tank Manufacturers.................. 336211 < 1000 employees.
Gasoline Engine and Engine Parts 336312 < 750 employees.
Manufacturing.
Aircraft Engine and Engine Parts 336412 < 1000 employees.
Manufacturing.
Railroad Rolling Stock Manufacturing..... 336510 < 1000 employees.
Boat Building and Repairing.............. 336612 < 500 employees.
Motorcycles and Motorcycle Parts 336991 < 500 employees.
Manufacturers.
Snowmobile and ATV manufacturers......... 336999 < 500 employees.
Independent Commercial Importers of 421110 < 100 employees.
Vehicles and Parts.
Engine Repair and Maintenance............ 811310 < $5 million annual receipts.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ North American Industry Classification System.
\b\ According to SBA's regulations (13 CFR Part 121), businesses with no more than the listed number of
employees or dollars in annual receipts are considered ``small entities'' for purposes of a regulatory
flexibility analysis.
After considering the economic impacts of today's rule on small
entities, EPA has concluded that this action will not have a
significant economic impact on a substantial number of small entities.
Under the reduced fee provisions described above in section II.F, the
fee paid by any manufacturer will not exceed 1.0 percent of the
aggregate retail sales price of the vehicles or engines covered by a
certificate request. The reduced fee provision limits the impact of
this rule on small entities, and other manufacturers, to 1.0 percent of
the aggregate retail sales price. Therefore, the rule will not have a
significant economic impact on any manufacturers, including small
entities. A review of rulemakings that set emissions standards for the
industries affected by today's rule, including those manufacturers
affected by the recreational vehicle rule, showed that approximately
108 small businesses will be paying fees.
The cost per vehicle or engine will vary because the cost per unit
depends upon the cost of the certificate and the number of vehicles or
engines that are manufactured and sold under one certificate. The cost
per vehicle will be highest if a manufacturer pays a fee for a light-
duty vehicle certificate but only makes and sells a single vehicles
that, because of the value of the vehicle, does not qualify for a
reduced fee. The fee cost per vehicle or engine will be least for a
manufacturer that pays an ``Other'' category fee and receives a
certificate that will cover thousands of vehicles or engines. In this
case the fee cost per vehicle may be a fraction of a penny. Because of
the difference between highest and lowest possible cost of fees per
vehicle, EPA determined that the average fee cost for manufacturers,
which, across industry sectors, is approximately $.41 per vehicle or
engine.
The following is an example of a final reduced fee calculation: If
a light-duty vehicle manufacturer has an engine family of 2 vehicles
that are sold for $35,000 per vehicle, under today's fee schedule the
full fee would be $33,883, or $16,944 per engine family ($16,942 or
$8,472 per vehicle, respectively), depending upon whether the engine
family is certified as a Federal vehicle or California-only engine
family. Under the rule, the reduced fee would be 1.0 percent of the
aggregate retail sales price of the vehicles ($70,000), or $700 (or
$350 per vehicle) as shown below:
2 * $35,000 * 0.01 = $700
In today's rule EPA established an initial fee payment of $750. If,
at the end of a model year the final reduced fee is less than the
initial fee payment, the manufacturer may request a refund of the
difference. EPA has eliminated the minimum refund provision proposed in
the NPRM so the manufacturer will be entitled to the entire refund. In
the above example the manufacturer would be refunded the sum of $50.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory action on state, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures by state, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year. Before promulgation of an EPA rule for which a written
statement is needed, section 205 of the UMRA generally requires EPA to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, most cost-effective or least burdensome
alternative that achieves the objectives of the rule. The provisions of
section 205 do not apply when they are inconsistent with applicable
law. Moreover, section 205 allows EPA to adopt an alternative other
than the least costly, most cost-effective or least
[[Page 26247]]
burdensome alternative if the Administrator publishes with the final
rule an explanation why that alternative was not adopted.
Before we establish any regulatory requirement that may
significantly or uniquely affect small governments, including tribal
governments, we must develop, under section 203 of the UMRA, a small
government agency plan. The plan must provide for notifying potentially
affected small governments, enabling officials of affected small
governments to have meaningful and timely input in the development of
our regulations with significant federal intergovernmental mandates.
The plan must also provide for informing, educating, and advising small
governments on compliance with the regulatory requirements.
Today's rule contains no Federal mandates for state, local, or
tribal governments. Nor does this rule have Federal mandates that may
result in the expenditures of $100 million or more in any year by the
private sector as defined by the provisions of Title II of the UMRA as
the total cost of the fee program is estimated to be about 20 million
dollars. Nothing in the rule would significantly or uniquely affect
small governments.
E. Executive Order 13132: Federalism
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.''
This rule will not have federalism implications. It will not have
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 will impose no direct compliance
costs on states. Thus, the requirements of section 6 of Executive Order
13132 do not apply to this rule.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 6, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This rule does not have
tribal implications. It will not have substantial direct effects on
tribal governments, on the relationship between the Federal government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal government and Indian tribes, as specified in
Executive Order 13175. The requirements finalized by this action impact
private sector businesses, particularly the vehicle and engine
manufacturing industries. Thus, Executive Order 13175 does not apply to
this rule.
G. Executive Order 13045: Children's Health Protection
Executive Order 13045: ``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.
EPA believes this rule is not subject to the Executive Order
because it is not an economically significant regulatory action as
defined by Executive Order 12866. In addition, this rule is not subject
to the Executive Order because it does not involve decisions based on
environmental health or safety risks that may disproportionately affect
children. Today's rule seeks to implement a fees program and is
expected to have no impact on environmental health or safety risks that
would affect the public or disproportionately affect children.
H. Executive Order 13211: Energy Effects
This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355)
(May 22, 2001) because it will not have a significant adverse
effect on the supply, distribution, or use of energy. Further, we have
determined that this rule is not likely to have any adverse energy effects.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272), directs
the EPA to use voluntary consensus standards (VCS) in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, business practices, etc.) that are developed or adopted by
voluntary consensus standard bodies. The NTTAA requires EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards. This action
does not involve any technical standards. Therefore, EPA did not
consider the use of any voluntary consensus standards.
J. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as amended 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 Congress and the comptroller General of the United States.
We 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. A major rule cannot take effect until
after it is published in the Federal Register. This action is not a
``major rule'' as defined by 5 U.S.C. 804(2). This rule will be
effective July 12, 2004.
List of Subjects
40 CFR Part 85
Environmental protection, Confidential business information,
Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping
requirements, Research, Warranties.
40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Air Pollution Control, Confidential business information, Diesel,
Gasoline, Fees, Imports, Labeling, Motor vehicle pollution, Motor
vehicles, Reporting and recordkeeping requirements.
[[Page 26248]]
Dated: April 29, 2004.
Michael O. Leavitt,
Administrator.
? For the reasons set forth in the preamble, title 40 chapter I of the
Code of Federal Regulations is amended as follows:
PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES
? 1. The authority citation for part 85 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
? 2. Add a new Subpart Y to Part 85 to read as follows:
Subpart Y--Fees for the Motor Vehicle and Engine Compliance Program
Sec.
85.2401 To whom do these requirements apply?
85.2402 [Reserved]
85.2403 What definitions apply to this subpart?
85.2404 What abbreviations apply to this subpart?
85.2405 How much are the fees?
85.2406 Can I qualify for reduced fees?
85.2407 Can I get a refund if I don't get a certificate or overpay?
85.2408 How do I make a fee payment?
85.2409 Deficiencies.
Subpart Y--Fees for the Motor Vehicle and Engine Compliance Program
Sec. 85.2401 To whom do these requirements apply?
(a) This subpart prescribes fees manufacturers must pay for the
motor vehicle and engine compliance program (MVECP) activities
performed by the EPA. The prescribed fees and the provisions of this
subpart apply to manufacturers of:
(1) Light-duty vehicles (cars and trucks) (See 40 CFR part 86);
(2) Medium Duty Passenger Vehicles (See 40 CFR part 86);
(3) Complete gasoline-fueled highway heavy-duty vehicles (See 40
CFR part 86);
(4) Heavy-duty highway diesel and gasoline engines (See 40 CFR part
86);
(5) On-highway motorcycles (See 40 CFR part 86);
(6) Nonroad compression-ignition engines (See 40 CFR part 89);
(7) Locomotives (See 40 CFR part 92);
(8) Marine engines, excluding inboard & sterndrive engines (See 40
CFR parts 91 and 94, and MARPOL Annex VI, as applicable);
(9) Small nonroad spark-ignition engines (engines < = 19kW) (See 40
CFR part 90);
(10) Recreational vehicles (including, but not limited to,
snowmobiles, all-terrain vehicles and off-highway motorcycles) (See 40
CFR part 1051);
(11) Heavy-duty highway gasoline vehicles (evaporative emissions
certification only) (See 40 CFR part 86); and
(12) Large nonroad spark-ignition engines (engines > 19 kW) (See 40
CFR part 1048).
(b) This subpart applies to manufacturers that submit certification
requests received by the agency on or after July 12, 2004.
(c) Certification requests which are complete, contain all required
data, and are received prior to July 12, 2004 are subject to the
provisions of 40 CFR part 86, subpart J.
(d) Nothing in this subpart will be construed to limit the
Administrator's authority to require manufacturer or confirmatory
testing as provided in the Clean Air Act, including authority to
require manufacturer in-use testing as provided in section 208 of the
Clean Air Act.
Sec. 85.2402 [Reserved]
Sec. 85.2403 What definitions apply to this subpart?
(a) The following definitions apply to this subpart:
Agency or EPA means the U.S. Environmental Protection Agency.
Annex IV is a Statement of Voluntary Compliance or Engine
International Air Pollution Prevention Certificate issued by EPA under
MARPOL Annex VI.
Body Builder means a manufacturer, other than the OEM, who installs
certified on-highway HDE engines into equipment such as trucks, busses
or other highway vehicles.
California-only certificate is a Certificate of Conformity issued
by EPA which only signifies compliance with the emission standards
established by California.
Certification request means a manufacturer's request for
certification evidenced by the submission of an application for
certification, ESI data sheet, or ICI Carryover data sheet. A single
certification request covers one test group, engine family, or engine
system combination as applicable. For HDV evaporative certification,
the certification request covers one evaporative family.
Consumer Price Index means the consumer price index for all U.S.
cities using the ``U.S. city average'' area, ``all items'' and ``not
seasonally adjusted'' numbers calculated by the Department of Labor.
Federal certificate is a Certificate of Conformity issued by EPA
which signifies compliance with emission requirements in 40 CFR parts
85, 86, 89, 90, 91, 92, 94, 1048, and/or 1051 as applicable.
Fuel economy basic engine means a unique combination of
manufacturer, engine displacement, number of cylinders, fuel system,
catalyst usage, and other characteristics specified by the Administrator.
Filing form means the MVECP Fee Filing Form to be sent with payment
of the MVECP fee.
MARPOL Annex VI is an annex to the International Convention on the
Prevention of Pollution from Ships, 1973, as modified by the protocol
of 1978 relating thereto; the international treaty regulating disposal
of wastes generated by normal operation of vessels.
Other category includes: HD HW evap, including ICI; Marine
(excluding inboard & sterndrive ) including ICI & Annex VI; NR SI,
including ICI; NR Recreational (non-marine), including ICI;
Locomotives, including ICI.
Recreational means the engines subject to 40 CFR part 1051 which
includes off road motorcycles, all-terrain vehicles, and snowmobiles.
Subcategory refers to the divisions of the light-duty category
which is composed of two subcategories, the certification/fuel economy
subcategory and the in-use subcategory.
Total Number of Certificates Issued means the number of
certificates for which fees are paid or waivers are issued. This term
is not intended to represent multiple certificates which are issued
within a single family or test group.
(b) The definitions contained in the following parts also apply to
this subpart. If the term is defined in paragraph (a) of this section
then that definition will take precedence.
(1) 40 CFR part 85;
(2) 40 CFR part 86;
(3) 40 CFR part 89;
(4) 40 CFR part 90;
(5) 40 CFR part 91;
(6) 40 CFR part 92;
(7) 40 CFR part 94;
(8) 40 CFR part 1048; and
(9) 40 CFR part 1051.
Sec. 85.2404 What abbreviations apply to this subpart?
The abbreviations in this section apply to this subpart and have
the following meanings:
Annex IV--a Statement of Voluntary Compliance or Engine International
Air Pollution Prevention Certificate issued by EPA under MARPOL Annex
VI.
Cal--California;
CI-Compression-ignition (Diesel) cycle engine;
CPI--Consumer Price Index;
ESI--Engine System Information;
[[Page 26249]]
EPA--U.S. Environmental Protection Agency;
Evap--Evaporative Emissions;
Fed--Federal;
HD--Heavy-duty
HDE--Heavy-duty motor vehicle engine;
HDV--Heavy-duty motor vehicle;
HW-On-Highway versions of a vehicle or engine;
ICI--Independent Commercial Importer;
LD--Light-Duty motor vehicle including both LDT and LDV;
LDT--Light-duty truck;
LDV--Light-duty vehicle;
MARPOL-An International Maritime Organization treaty for the control of
marine pollution;
MC--Motorcycle;
MDPV--Medium-Duty Passenger Vehicle;
MVECP--Motor Vehicle and Engine Compliance Program;
MY--Model Year;
NR--Nonroad version of a vehicle or engine;
OEM--Original equipment manufacturer;
SI--Spark-ignition (Otto) cycle engine.
Sec. 85.2405 How much are the fees?
(a) Fees for the 2004 and 2005 calendar years. For certification
applications received for these calendar years that qualify for today's
fees under the provisions of Sec. 85.2401 (b), the fee for each
certification request is in the following table:
------------------------------------------------------------------------
Category Certificate type Fee
------------------------------------------------------------------------
(1) LD, excluding ICIs............. Fed Certificate.... $33,883
(2) LD, excluding ICIs............. Cal-only 16,944
Certificate.
(3) MDPV, excluding ICIs........... Fed Certificate.... 33,883
(4) MDPV, excluding ICIs........... Cal-only 16,944
Certificate.
(5) Complete SI HDVs, excluding Fed Certificate.... 33,883
ICIs.
(6) Complete SI HDVs, excluding Cal-only 16,944
ICIs. Certificate.
(7) ICIs for the following All Types.......... 8,387
industries: LD, MDPV, or Complete
SI HDVs.
(8) MC (HW), including ICIs........ All Types.......... 2,414
(9) HDE (HW), including ICIs....... Fed Certificate.... 21,578
(10) HDE (HW), including ICIs...... Cal-only 826
Certificate.
(11) HDV (evap), including ICIs.... Evap............... 826
(12) NR CI engines, including ICIs, All Types.......... 1,822
but excluding Locomotives, Marine
and Recreational engines.
(13) NR SI engines, including ICIs. All Types.......... 826
(14) Marine engines, excluding All Types and Annex 826
inboard & sterndrive engines, VI.
including ICIs.
(15) All NR Recreational, including All Types.......... 826
ICIs, but excluding marine engines.
(16) Locomotives, including ICIs... All Types.......... 826
------------------------------------------------------------------------
(1) A manufacturer that requests a federal certificate for a marine
engine family and an Annex VI for the same engine family will be
charged the fee indicated in paragraph (a) of this section, Table item
14, for only the federal certificate.
(2) [Reserved]
(b) Fees for 2006 calendar year and beyond. (1) This subpart
applies to manufacturers that submit certification requests received by
the agency on or after January 1 of each calendar year beginning in
2006. The fees due for each certification request will be calculated
using an equation which adjusts the fees in paragraph (a) of this
section for the change in the consumer price index and the change in
the total number of certificates issued for each fee category.
(2) Certification requests which are complete, contain all required
data, and are received prior to January 1 of each calendar year are
subject to the fees provisions of the year that they are received by
the Agency.
(3) Fees for the 2006 and later calendar year certification
requests will be calculated using the following equation:
Certificate Feecy= [F + L* (CPICY-2/
CPI2002)]
*1.169/[(cert#MY-2+
cert#MY-3) * .5]
Certificate Feecy = Fee per certificate for the calendar
year of the fees to be collected
F = the fixed costs, not to be adjusted by the CPI
L = the labor costs, to be adjusted by the CPI
CPICY-2 = the consumer price index for all U.S. cities using
the ``U.S. city average'' area, ``all items'' and ``not seasonally
adjusted'' numbers calculated by the Department of Labor listed for the
month of November of the year two years before the calendar year.
(e.g., for the 2006 CY use the CPI based on the date of November, 2004).
CPI2002 = the consumer price index for all U.S. cities using
the ``U.S. city average'' area , ``all items'' and ``not seasonally
adjusted'' numbers calculated by the Department of Labor for December,
2002. The actual value for CPI2002 is 180.9.
1.169 = Adds overall EPA overhead which is applied to all costs
cert#MY-2 = the total number of certificates issued
for a fee category or subcategory in the model year two years prior to
the calendar year for applicable fees (Certificate Feecy)
cert#MY-3 = the total number of certificates issued
for a fee category or subcategory in the model year three years prior
to the calendar year for the applicable fees (Certificate
Feecy)
(i) The values for F and L are listed in the following table:
------------------------------------------------------------------------
F L
------------------------------------------------------------------------
(1) LD Cert/FE.................................. $3,322,039 $2,548,110
(2) LD In-use................................... 2,858,223 2,184,331
(3) LD ICI...................................... 344,824 264,980
(4) MC HW....................................... 225,726 172,829
(5) HD HW....................................... 1,106,224 1,625,680
(6) NR CI....................................... 486,401 545,160
(7) Other....................................... 177,425 548,081
------------------------------------------------------------------------
(ii) EPA will notify manufacturers within 11 months of the calendar
year in which fees are adjusted by this section, with the new fees for
each category, the number of certificates for the appropriate model
years and the applicable CPI values after the November CPI values for
each year are made available by the U.S. Department of Labor.
(1) Certificate fees for light-duty California-only certificates
will be determined by applying the LD Cert/FE F and L values to the
Certificate Fee equation in paragraph (b)(3) of this section. The
certificate numbers in the equation will be the total of the number of
California-only and federal light-duty certificates issued during the
appropriate model years.
(2) Certificate fees for light-duty federal certificates are
determined in a 3 part process:
(i) Apply the LD Cert/FE F and L values to the Certificate Fee
equation in paragraph (b)(3) of this section. The
[[Page 26250]]
certificate numbers in the equation will be the total of the number of
California-only and federal light-duty certificates issued during the
appropriate model years. This results in the Cert/FE portion of the LD
certificate fee.
(ii) Apply the LD In-use F and L values to the Certificate Fee
equation in paragraph (b)(3) of this section. The certificate numbers
in the equation will be the number of federal light-duty certificates
issued during the appropriate model years. This results in the In-use
portion of the LD certificate fee.
(iii) Add the LD Cert/FE portion of the fee and LD In-use portion
of the fee together to determine the total LD federal fee per certificate.
(3) Certificate fees for all remaining categories of certificates
are determined by applying the F and L values from the appropriate
category to the Certificate Fee equation above. The certificate numbers
in the equation will be the total number of certificates issued in that
category during the appropriate model years.
(c) A single fee will be charged when a manufacturer seeks to
certify multiple evaporative families within a single engine family or
test group. Manufacturers that seek to certify HDE evaporative families
will be charged a fee for each evaporative family.
(d) A body builder, who exceeds the maximum fuel tank size for a
HDV that has been certified by an OEM and consequently makes a request
for HDV certification, must pay a separate fee for each certification
request. The fee will be that listed in paragraphs (a) and (b) of this
section, paragraph (c) does not apply.
Sec. 85.2406 Can I qualify for reduced fees?
(a) Eligibility Requirements. To be eligible for a reduced fee, the
following conditions must be satisfied:
(1) The certificate is to be used for sale of vehicles or engines
within the United States; and
(2) The full fee for a certification request for a MY exceeds 1.0%
of the aggregate projected retail sales price of all vehicles or
engines covered by that certificate.
(b) Determination of Certificate Type. (1) If the number of
vehicles or engines to be covered by the certificate is less than six
and the retail sales price of all of the vehicles or engines is less
than $75,000 each, a reduced fee request shall be made for a
certificate covering 5 vehicles or engines. The final reduced fee
calculation and adjustment provisions of paragraph (e) of this section
are applicable to certificates issued under this provision.
(2) If the number of vehicles or engines to be covered by the
certificate is greater than five and/or the retail sales price of at
least one of the vehicles or engines is greater than $75,000 each, a
reduced fee request shall be made for a certificate covering the
estimated number of vehicles or engines.
(c) Initial Reduced Fee Calculation. (1) If the requirements of
paragraph (a) of this section are satisfied, the initial fee payment to
be paid by the applicant (the ``initial fee payment'') will be the
greater of:
(i) 1.0% of the aggregate projected retail sales price of all the
vehicles or engines to be covered by the certification request; or
(ii) A minimum initial fee payment of $750.
(2) For vehicles or engines that are converted to operate on an
alternative fuel using as the basis for the conversion a vehicle or
engine which is covered by an existing OEM certificate of conformity,
the cost basis used in this section must be the aggregate projected
retail value-added to the vehicle or engine by the conversion rather
than the full cost of the vehicle or engine. To qualify for this
provision, the applicable OEM certificate must cover the same sales
area and model year as the requested certificate for the converted
vehicle or engine.
(3) For ICI certification requests, the cost basis of this section
must be the aggregate projected retail cost of the entire vehicle(s) or
engine(s), not just the value added by the conversion. If the vehicles/
engines covered by an ICI certificate are not being offered for sale,
the manufacturer shall use the fair retail market value of the
vehicles/engines as the retail sale price required in this section. For
an ICI certification request, the retail sales price (or fair retail
market value) must be based on the applicable National Automobile
Dealer's Association (NADA) appraisal guide and/or other evidence of
the actual market value.
(4) The aggregate cost used in this section must be based on the
total projected sales of all vehicles and engines under a certificate,
including vehicles and engines modified under the modification and test
option in 40 CFR 85.1509 and 89.609. The projection of the number of
vehicles or engines to be covered by the certificate and their
projected retail selling price must be based on the latest information
available at the time of the fee payment.
(5) A manufacturer may submit a reduced fee as described in
paragraphs (a), (b) and (c)(1) through (c)(4) of this section if it is
accompanied by a statement from the manufacturer that the reduced fee
is appropriate under this section. The reduced fee shall be deemed
approved unless EPA determines that the criteria of this section has
not been met. The Agency may make such a determination either before or
after EPA issues a certificate of conformity. If the Agency determines
that the requirements of this section have not been met, EPA may deny
future reduced fee requests and require submission of the full fee
payment until such time as the manufacturer demonstrates to the
satisfaction of the Administrator that its reduced fee submissions are
based on accurate data and that final fee payments are made within 45
days of the end of the model year.
(6) If the reduced fee is denied by the Administrator, the
applicant will have 30 days from the date of notification of the denial
to submit the appropriate fee to EPA or appeal the denial.
(d) Revision of the Number of Vehicles or Engines Covered by the
Certificate. (1) If after the original certificate is issued, the
number of vehicles or engines to be produced or imported under the
certificate exceeds the number indicated on the certificate, the
manufacturer or importer shall:
(i) Request that EPA revise the certificate with a number that
indicates the new projection of the vehicles or engines to be covered
by the certificate. The revised certificate must be requested, revised
and issued before the vehicles or engines are sold or imported into the
United States.
(ii) Submit payment of 1.0% of the aggregate projected retail sales
price of all the vehicles or engines over and above the number of
vehicles or engines listed on the original certificate to be covered by
the certification request;
(iii) Submit a final reduced fee calculation and adjustment at the
end of the model year as set forth in the provisions of paragraph (e)
of this section, if the original certificate was issued under the
provisions of paragraph (b)(1) of this section.
(2) A manufacturer must receive a revised certificate prior to the
sale or importation of any vehicles or engines that are not originally
included in the certificate issued under paragraph (b)(1) or (b)(2) of
this section, or as indicated in a revised certificate issued under
paragraph (d)(1) of this section. In the event that a certificate is
not timely revised such additional vehicles or engines are not covered
by a certificate of conformity.
(e) Final Reduced Fee Calculation and Adjustment. (1) For
certificates issued under the provisions of paragraph (b)(1) of this
section, within 30 days of the
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end of the model year, the manufacturer shall submit a model year
reduced fee payment report covering all certificates issued under the
provisions of paragraph (b)(1) of this section in the model year for
which the manufacturer has paid a reduced fee. This report will include
for each certificate issued:
(i) The fees paid prior to the time of issuance of the certificate;
(ii) The total actual number of vehicles covered by the certificate;
(iii) The calculation of the actual final reduced fee due for each
certificate; and
(iv) The difference between the total fees paid and the total final
fees due from the manufacturer.
(2) The final reduced fee shall be calculated using the procedures
of paragraph (c) of this section but using actual production figures
rather than projections.
(3) If the initial fee payment does not exceed the final reduced
fee, then the manufacturer shall pay the difference between the initial
reduced fee and the final reduced fee using the provisions of Sec.
85.2408. This payment shall be paid within 45 days of the end of the
model year. The total fees paid for a certificate shall not exceed the
applicable full fee of Sec. 85.2405. If a manufacturer fails to make
complete payment with 45 days or to submit the report under paragraph
(e)(1) of this section then the Agency may void ab initio the
applicable certificate. EPA may also refuse to grant reduced fee
requests submitted under paragraph (c)(5) of this section.
(4) If the initial fee payment exceeds the final reduced fee then
the manufacturer may request a refund using the procedures of Sec.
85.2407.
(5) Manufacturers must retain in their records the basis used to
calculate the projected sales and fair retail market value and the
actual sales and retail price for the vehicles and engines covered by
each certificate that is issued under the reduced fee provisions of
this section. This information must be retained for a period of at
least three years after the issuance of the certificate and must be
provided to the Agency within 30 days of request. Manufacturers are
also subject to the applicable maintenance of records requirements of
Part 86, Subpart A. If a manufacturer fails to maintain the records or
provide such records to EPA as required by this paragraph then EPA may
void ab initio the certificate for which such records shall be kept.
Sec. 85.2407 Can I get a refund if I don't get a certificate or overpay?
(a) Full Refund. The Administrator shall refund the total fee
imposed by Sec. 85.2405 if the applicant fails to obtain a
certificate, for any reason, and requests a refund.
(b) Partial Refund. The Administrator shall refund a portion of a
reduced fee, paid under Sec. 85.2406, due to a decrease in the
aggregate projected or actual retail sales price of the vehicles or
engines covered by the certificate request. The Administrator shall
also refund a portion of the initial payment when the initial payment
exceeded the final fee for the vehicles or engines covered by the
certificate request.
(1) Partial refunds are only available for certificates which were
used for the sale of vehicles or engines within the United States.
(2) Requests for a partial refund may only be made once the model
year for the applicable certificate has ended. Requests for a partial
refund must be submitted no later than six months after the model year
has ended.
(3) Requests for a partial refund must include all the following:
(i) A statement that the applicable certificate was used for the
sale of vehicles or engines within the United States.
(ii) A statement of the initial fee amount paid (the reduced fee)
under the applicable certificate.
(iii) The actual number of vehicles or engines produced or imported
under the certificate (whether or not the vehicles/engines have been
actually sold).
(iv) The actual retail selling or asking price for the vehicles or
engines produced or imported under the certificate.
(v) The calculation of the reduced fee amount using actual
production figures and retail prices.
(vi) The calculated amount of the refund.
(c) Refunds due to errors in submission. The Agency will approve
requests from manufacturers to correct errors in the amount or
application of fees if the manufacturer provides satisfactory evidence
that the change is due to an accidental error rather than a change in
plans. Requests to correct errors must be made to the Administrator as
soon as possible after identifying the error. The Agency will not
consider requests to reduce fee amounts due to errors that are reported
more than 90 days after the issuance of the applicable certificate of
conformity.
(d) In lieu of a refund, the manufacturer may apply the refund
amount to the amount due on another certification request.
(e) A request for a full or partial refund of a fee or a report of
an error in the fee payment or its application must be submitted in
writing to: U.S. Environmental Protection Agency, Vehicle Programs and
Compliance Division, Fee Program Specialist, National Vehicle and Fuel
Emission Laboratory, 2000 Traverwood, Ann Arbor, MI 48105.
Sec. 85.2408 How do I make a fee payment?
(a) All fees required by this subpart shall be paid by money order,
bank draft, certified check, corporate check, or electronic funds
transfer payable in U.S. dollars to the order of the Environmental
Protection Agency.
(b) A completed fee filing form must be sent to the address
designated on the form for each fee payment made.
(c) Fees must be paid prior to submission of an application for
certification. The Agency will not process applications for which the
appropriate fee (or reduced fee amount) has not been fully paid.
(d) If EPA denies a reduced fee, the proper fee must be submitted
within 30 days after the notice of denial, unless the decision is
appealed. If the appeal is denied, then the proper fee must be
submitted within 30 days after the notice of the appeal denial.
Sec. 85.2409 Deficiencies.
(a) Any filing pursuant to this subpart that is not accompanied by
a completed fee filing form and full payment of the appropriate fee is
deemed to be deficient.
(b) A deficient filing will be rejected and the amount paid
refunded, unless the full appropriate fee is submitted within a time
limit specified by the Administrator.
(c) EPA will not process a request for certification associated
with any filing that is deficient under this section.
(d) The date of filing will be deemed the date on which EPA
receives the full appropriate fee and the completed fee filing form.
PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES
? 3. The authority citation for Part 86 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart J--[Amended]
? 4. Section 86.903-93 is revised to read as follows:
Sec. 86.903-93 Applicability.
(a) This subpart prescribes fees to be charged for the MVECP for
the 1993 through 2004 model year. The fees charged will apply to all
manufacturers and ICIs of LDVs, LDTs, HDVs, HDEs, and MCs. Nothing in
this subpart shall be construed to limit the
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Administrator's authority to require manufacturer or confirmatory
testing as provided in the Clean Air Act, including authority to
require manufacturer in-use testing as provided in section 208 of the
Clean Air Act.
(b) The fee requirements of 40 CFR part 85, subpart Y for 2004 and
later certification requests received on or after July 12, 2004 apply
instead of the fees prescribed in this subpart.
(c) The fees prescribed in this subpart will only apply to those
2004 model year certification requests which are complete, include all
data required by this title, and are received by the Agency prior to
July 12, 2004.
? 5. Section 86.908-93 is amended by revising paragraph (a)(1)(iii) to
read as follows:
Sec. 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 July 12, 2004.
* * * * *
[FR Doc. 04-10338 Filed 5-10-04; 8:45 am]
BILLING CODE 6560-50-P