Control of Air Pollution From New Motor Vehicles and New Motor Vehicle Engines: Voluntary Standards for Light-Duty Vehicles

Related Material

Other Related Documents

[Federal Register: June 6, 1997 (Volume 62, Number 109)]
[Rules and Regulations]
[Page 31191-31270]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn97-21]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85 and 86
[AMS-FRL-5823-7]
RIN 2060-AF75

Control of Air Pollution From New Motor Vehicles and New Motor
Vehicle Engines: Voluntary Standards for Light-Duty Vehicles

AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.

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SUMMARY: Today EPA is finalizing the main regulatory framework for the
National Low Emission Vehicle (National LEV) program. After EPA takes
comment on and finalizes supplemental regulations, today's regulations
would allow auto manufacturers to volunteer to comply with tailpipe
standards for cars and light, light-duty trucks that are more stringent
than EPA can mandate. Once a manufacturer opts into the program, the
standards would be enforced in the same manner as any other federal
motor vehicle pollution control requirement. Manufacturers would be
willing to opt into this program if there is a binding commitment to it
by the northeastern part of the country (the Ozone Transport Region
(OTR) or the States of the Ozone Transport Commission (OTC States)).
If the program were to come into effect after EPA finalizes the
supplemental regulations, it would achieve significant reductions in
smog and other air pollution nationwide. It also would achieve the same
emission reductions in the OTR as if each OTC State adopted a state
motor vehicle program. Today's regulations, together with other Agency
actions, also substantially harmonize federal and California motor
vehicle standards and test procedures to enable manufacturers to design
and test vehicles to one set of standards nationwide if they opt into
National LEV.
With this final rule, EPA is providing the regulatory structure
that is a necessary step towards completion of an on-going process
initiated by the OTC States and the auto manufacturers to improve
public health through the introduction of cleaner vehicles nationwide
and in the Northeast. The process cannot be completed until the auto
manufacturers and the OTC States both agree to be bound by the program.
As a result of the hard work of these parties, agreement has been
reached on the main regulatory framework of the National LEV program.
This agreement is reflected in today's rule. However, some additional
issues must be resolved regarding the commitments the OTC States must
make for the program to come into effect. EPA will resolve these issues
when it adopts a supplemental final rule after further notice and
comment. If National LEV is implemented, it will demonstrate how
cooperative, partnership efforts can produce a smarter, cheaper program
that reduces regulatory burden while increasing protection of the
environment and public health.

DATES: This regulation is effective August 5, 1997. The incorporation
by reference of certain publications listed in the regulations is
approved by the Director of the Federal Register as of August 5, 1997.
Sections 86.085-37(b)(1) introductory text, 86.1710-97(a), 86.1712-97,
and 86.1776-97 contain information collection requirements that have
not yet been approved by the Office of Management and Budget (OMB) and
are not effective until OMB has approved them. EPA will publish a
document announcing the effective date of these sections.

ADDRESSES: Materials relevant to this final rule have been placed in
Public Docket No. A-95-26. The docket is located at the Air Docket
Section, U.S. Environmental Protection Agency, 401 M Street SW,
Washington, DC 20460 (Telephone 202-260-7548; Fax 202-260-4400) in Room
M-1500, Waterside Mall, and may be inspected weekdays between 8:00 a.m.
and 5:30 p.m. A reasonable fee may be charged by EPA for copying docket
materials.

FOR FURTHER INFORMATION CONTACT: Karl Simon, Office of Mobile Sources,
U.S. Environmental Protection Agency, 401 M Street SW, Washington, DC
20460. Telephone (202) 260-3623; Fax (202) 260-6011; e-mail
simon.karl@epamail.epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated entities. Entities potentially regulated by this action
are those that manufacture and sell new motor vehicles in the United
States. Regulated categories and entities include:

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Category Examples of regulated entities
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Industry............................ New motor vehicle manufacturers.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your activities are regulated by this action, you should carefully
examine the applicability criteria in Sec. 86.1701-97 of the rule. If
you have questions regarding the applicability of this action to a
particular entity, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.

I. Obtaining Electronic Copies of the Regulatory Documents

The Preamble, Regulations, and Response to Comments documents are
also available electronically from the EPA internet site and via dial-
up modem on the Technology Transfer Network (TTN), which is an
electronic bulletin board system (BBS) operated by EPA's Office of Air
Quality Planning and Standards. Both services are free of charge,
except for your existing cost of internet connectivity or the cost of
the phone call to TTN. Users are able to access and download files on
their first call using a personal computer per the following
information. The official Federal Register version is made available on
the day of publication on the primary internet sites listed below. The
EPA Office of Mobile Sources also publishes these notices on the
secondary internet sites listed below and on TTN.

Internet

World Wide Web: http://www.epa.gov/fedrgstr/EPA-AIR/ (either
select desired date or use Search feature) or http://www.epa.gov/
OMSWWW/ (look in What's New or under the specific rulemaking topic)
Gopher: gopher.epa.gov Follow menus: Rules: EnviroSubset:Air or
gopher.epa.gov Follow menus: Offices:Air:OMS
FTP: ftp.epa.gov Directory: pub/gopher/fedrgstr/EPA-AIR/ or ftp.epa.gov
Directory: pub/gopher/OMS/
TTN BBS: 919-541-5742 (1,200-14,400 bps, no parity, eight data bits,
one stop bit) Off-line: Mondays from 8:00-12:00 Noon ET Voice helpline:
919-541-5384

A user who has not called TTN previously will first be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following menu choices from the Top Menu to access information on this
rulemaking.

<T> GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
<M> OMS--Mobile Sources Information
<K> Rulemaking & Reporting
<1> Light Duty

[[Page 31193]]

<10> File area #10 OTC Low-Emissions Vehicle & National LEV
At this point, the system will list all available files in the
chosen category in reverse chronological order with brief descriptions.
To download a file, type the letter ``D'' and hit your Enter key. Then
select a transfer protocol that is supported by the terminal software
on your own computer, and pick the appropriate command in your own
software to receive the file using that same protocol. After getting
the files you want with your computer, you can quit the TTN BBS with
the <G>oodbye command. If you are unfamiliar with handling compressed
(i.e. ZIP'ed) files, go to the TTN top menu, System Utilities (Command:
1) for information and the necessary program to download in order to
unZIP the files of interest after downloading to your computer.
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.

II. Outline and List of Acronyms and Abbreviations

A. Outline

This final rule preamble is organized into the following
sections:

I. Obtaining Electronic Copies of the Regulatory Documents
II. Outline and List of Acronyms and Abbreviations
A. Outline
B. List of Acronyms and Abbreviations
III. Introduction and Background
A. Introduction
B. Benefits of the National LEV Program
C. Background
1. Current Federal Motor Vehicle Emissions Control Program
2. California Low Emission Vehicle Program
3. OTC Efforts to Reduce Motor Vehicle Emissions in the OTR
4. Public Process
D. National LEV Program
1. Agreement--A Necessary Predicate for the National LEV Program
2. Description of National LEV Program
IV. Provisions of the National LEV Program
A. Program Structure
1. Opt-In to National LEV and In-Effect Finding
2. Opt-Out from National LEV
a. Conditions Allowing Opt-Out
(1) OTC States' Failure to Meet or Keep Their Commitments
(2) EPA Changes to Stable Standards
(i) Designation of Stable Standards
(ii) Changes to Stable Standards
b. Opt-Out Procedures
c. Effective Date of Opt-Out
d. Programs in Effect as a Result of Opt-Out
e. Opt-Out by States
3. Duration of Program
B. National LEV Voluntary Tailpipe and Related Standards and
Phase-In
1. Exhaust Emission Standards for Categories of NLEVs
a. Certification Standards
b. In-Use Standards
2. Non-methane Organic Gases Fleet Average Standards
a. Compliance With the NMOG Standards
b. Tracking Vehicles for Fleet Average NMOG Compliance
c. OTC State Government ATV Purchases
d. Reporting Requirements
3. Fleet Average NMOG Credit Program
a. Fleet Average NMOG Credit Program Requirements
b. Early Reduction Credits
c. Enforcement of Fleet Average NMOG Credit Program
d. Reporting for Fleet Average NMOG Credit Program
4. Limits on Sale of Tier 1 Vehicles and TLEVs
5. Tailpipe Emissions Testing
a. Federal Test Procedure
b. Compliance Test Fuel
c. NMOG vs. NMHC
d. Reactivity Adjustment Factors
6. On-Board Diagnostics Systems Requirements
7. In-Use Fuel
8. Hybrid Electric Vehicles
C. Low Volume and Small Volume Manufacturers
D. Legal Authority
E. Enforceability and Prohibited Acts
V. National LEV Will Produce Creditable Emissions Reductions
A. Emissions Reductions From National LEV
B. Enforceability of National LEV
C. Finding National LEV in Effect
D. SIP Credits
VI. Other Applicable Federal Requirements and Harmonization With
California Requirements
A. Introduction
B. Harmonization of Federal and California Standards
1. Onboard Refueling Vapor Recovery and Evaporative Emissions
2. Cold CO
3. Certification Short Test
4. High Altitude Requirements
C. Federal Compliance Requirements
1. Selective Enforcement Auditing and Quality Audit Programs
2. Imports
3. In-Use and Warranty Requirements
VII. Structure of National LEV Regulations
VIII. Technical Correction to Maintenance Instructions
IX. Administrative Requirements
A. Administrative Designation
B. Regulatory Flexibility Act
C. Unfunded Mandates Reform Act
D. Congressional Review of Agency Rulemaking
E. Reporting and Recordkeeping Requirements
X. Statutory Authority
XI. Judicial Review

B. List of Acronyms and Abbreviations

AAMA American Automobile Manufacturers Association
AIAM Association of International Automobile Manufacturers
APA Administrative Procedure Act
AQL Acceptable Quality Level
ATV(s) Advanced Technology Vehicle(s)
BBS Bulletin Board System
CAA Clean Air Act
CAAA Clean Air Act Amendments of 1990
CAL LEV California Low Emission Vehicle Program
CARB California Air Resources Board
CFR Code of Federal Regulations
CO Carbon Monoxide
CQA California Quality Audit
CST Certification Short Test
EPA U.S. Environmental Protection Agency
EPAct Energy Policy Act
FACA Federal Advisory Committee Act
FR Federal Register
FRM Final Rulemaking, Final Rule
FTP Federal Test Procedure
GSA General Services Administration
GVWR Gross Vehicle Weight Rating
HC(s) Hydrocarbon(s)
HCHO Formaldehyde
HEV(s) Hybrid Electric Vehicle(s)
HLDT(s) Heavy Light-Duty Truck(s)
IBR Incorporation by Reference
ICI(s) Independent Commercial Importer(s)
ICR Information Collection Request
I/M Inspection and Maintenance
ILEV(s) Inherently Low Emission Vehicle(s)
LDT(s) Light-Duty Truck(s)
LDV(s) Light-Duty Vehicle(s)
LEV(s) Low Emission Vehicle(s)
LLDT(s) Light Light-Duty Truck(s)
LVW Loaded Vehicle Weight
MIL Malfunction Indicator Light
MOU Memorandum of Understanding
MY Model Year
NAAQS National Ambient Air Quality Standards
National LEV National Low Emission Vehicle
NLEV National Low Emission Vehicle
NMHC Non-methane Hydrocarbons
NMOG Non-methane Organic Gases
NO<INF>X</INF> Oxides of Nitrogen
NPRM Notice of Proposed Rulemaking
NTR Northeast Trading Region
OBD On-Board Diagnostics
OBD II Second Phase On-Board Diagnostics
OMB Office of Management and Budget
ORVR On-Board Refueling Vapor Recovery
OTC Ozone Transport Commission
OTC LEV Ozone Transport Commission Low Emission Vehicle
OTR Ozone Transport Region
PM Particulate Matter
RAF(s) Reactivity Adjustment Factor(s)
RFA Regulatory Flexibility Analysis
RFG Reformulated Gasoline
RIA Regulatory Impact Analysis
SEA Selective Enforcement Audit
SFTP Supplemental Federal Test Procedure
SIA Service Information Availability
SIP State Implementation Plan
SNPRM Supplemental Notice of Proposed Rulemaking
The Act Clean Air Act
The Agency U.S. Environmental Protection Agency
THC Total Hydrocarbon
TLEV(s) Transitional Low Emission Vehicle(s)
TTN Technology Transfer Network

[[Page 31194]]

UDDS Urban Dynamometer Driving Cycle
ULEV(s) Ultra Low Emission Vehicle(s)
UMRA Unfunded Mandate Reform Act
VOC(s) Volatile Organic Compound(s)
ZEV(s) Zero Emission Vehicle(s)

III. Introduction and Background

The U.S. Environmental Protection Agency (EPA) is adopting
regulations for the National Low Emission Vehicle (National LEV)
program in this final rule. EPA believes this is a cleaner, smarter,
cheaper pollution control program for new motor vehicles. Under the
National LEV program, auto manufacturers have the option of agreeing to
comply with more stringent tailpipe emissions standards--standards that
EPA could not impose without manufacturer agreement. Once manufacturers
commit to the program, the standards will be enforceable in the same
manner that other federal motor vehicle emissions control requirements
are enforceable. Manufacturers have indicated their willingness to
volunteer to meet these tighter emissions standards if EPA and the
northeastern states (i.e., those in the Ozone Transport Commission
(OTC) or the ``OTC States'') agree to certain conditions, including
providing manufacturers with regulatory stability, recognizing that
establishing advanced technology vehicles (ATVs) in the Northeast is a
shared responsibility (rather than the sole responsibility of auto
manufacturers), and reducing regulatory burdens by harmonizing federal
and California motor vehicle emissions standards.
The National LEV program is another step in an unprecedented,
cooperative effort by the OTC States, auto manufacturers,
environmentalists, fuel providers, EPA, and other interested parties to
improve air quality. The OTC States and environmentalists provided the
opportunity for this cooperative effort by pushing for adoption of the
California Low Emission Vehicle (CAL LEV) program throughout the
northeast Ozone Transport Region (OTR). Under EPA's leadership, the
states, auto manufacturers, environmentalists, and other interested
parties then embarked on a process marked by extensive public
participation and a demonstrated willingness to work with each other
and to solve problems jointly. This working relationship is
particularly remarkable given the adversarial and litigious nature of
previous interactions between the parties.
In today's final rule, EPA is establishing the regulatory framework
for National LEV. Given statutory constraints, however, the National
LEV program will only be implemented if it is agreed to by the OTC
States and the auto manufacturers. EPA does not have authority to force
either the OTC States or the manufacturers to sign up to the program.
The OTC States and auto manufacturers have reached agreement on
most issues raised by the National LEV program. Each side has sent EPA
a Memorandum of Understanding (MOU) that it has initialed, indicating
its agreement with the National LEV program as contained in that MOU.
(These initialed documents are in the public docket for this
rulemaking.) Although there are differences in the two Memoranda, they
show that agreement has been reached between the OTC States and the
auto manufacturers on the substantive issues addressed in this rule.
With a few limited exceptions, those agreements are consistent with
today's rule. EPA applauds the efforts of these parties, particularly
the leadership shown by the OTC States and the auto manufacturers.
The OTC States and auto manufacturers have not reached agreement on
a few remaining issues, in particular, those related to OTC State opt-
in and commitment to the program. EPA did not take comment on and
therefore cannot finalize these portions of the National LEV program in
today's rule. These issues will need to be resolved and reflected in
EPA regulations before the National LEV program can come into effect.
Because the auto manufacturers and the OTC States have not resolved
these issues, EPA will publish a Supplemental Notice of Proposed
Rulemaking (SNPRM) to take comment on these issues before EPA resolves
them in a supplemental final rule.
National LEV will provide environmental benefits by reducing air
pollution nationwide. The program is designed to address air pollution
problems, and will produce public health and environmental benefits
both inside and outside the OTR. This will assist all states that were
considering adopting the California LEV program to meet their
obligations under the Clean Air Act (CAA or the Act).
EPA has determined that the National LEV program will result in
emissions reductions in the OTR that are equivalent to or greater than
the emissions reductions that would be achieved through OTC state-by-
state adoption of the CAL LEV program. For a number of years, the OTC
has been working to reduce motor vehicle emissions either by adoption
of the CAL LEV program throughout the OTR or by adoption of the
National LEV program. As a means to achieve such reductions, National
LEV continues to provide a preferable alternative to adoption of CAL
LEV throughout the OTR. Not only will National LEV provide emissions
reductions benefits to the OTC States, it will reduce states' costs of
providing their citizens with healthy air by avoiding the costs of
state programs that duplicate each others' and EPA's efforts. Although
a recent court decision struck down one of the OTC States' regulatory
options for regionwide adoption of CAL LEV programs, Virginia v. EPA,
No. 95-1163 (D.C. Cir. March 11, 1997)(discussed in section III.C.3.),
the auto manufacturers and OTC States have recently sent letters to EPA
expressing their continued support for National LEV. (Letter from AAMA
and AIAM to EPA, April 15, 1997; Letter from OTC to EPA, April 18,
1997; both letters are in docket no. A-95-26).
EPA is also providing important relief from certain regulatory
requirements to the auto manufacturers. Rather than having a fleet of
California vehicles that are designed and tested to California
standards, and a separate fleet of federal vehicles that are designed
and tested to federal standards, in most instances under National LEV
manufacturers will certify vehicles to harmonized California and
federal standards that will allow them to sell most vehicles
nationwide. Not only will this reduce testing and design costs, it will
allow more efficient distribution and marketing of vehicles nationwide.
The cooperative nature of the program by itself should provide
environmental benefits sooner, and in a way that greatly reduces
regulatory transaction costs, than would otherwise be the case.
Focusing energy on implementing the program the parties helped jointly
design is a better use of resources than continued disagreement over
whether any program should be implemented at all.

A. Introduction

EPA is today adopting the regulatory structure for a voluntary,
National LEV program. The National LEV program includes a set of
exhaust emissions standards that will significantly reduce emissions of
ozone-producing pollutants nationwide from new light-duty vehicles
(LDVs) and light-duty trucks (LDTs) at or below 6000 lbs gross vehicle
weight rating (GVWR) (light, light-duty trucks, or LLDTs). The program
includes a manufacturer fleet average standard for non-methane organic
gas (NMOG) applicable in the OTC States beginning in Model Year

[[Page 31195]]

(MY) 1997,¹ and applicable nationwide (except California)
beginning in MY2001. Manufacturers are not required to meet the
standards in this program unless they choose to opt into the program.
However, if a manufacturer opts into the program and EPA finds that the
program is in effect, then the manufacturer will be bound by the
program's requirements. A manufacturer that opts into the program can
opt out only in certain limited circumstances.
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\1\ As discussed in note 17 below, EPA is using MY 1997 as a
placeholder for the actual start date of National LEV.
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In addition to the national public health benefits that would
result from National LEV, the program has been motivated largely by the
OTC's efforts to reduce motor vehicle emissions either by adoption of
the CAL LEV program throughout the OTR or by adoption of the National
LEV program. One of the OTC States' efforts was a petition the OTC
filed with EPA. On December 19, 1994, EPA approved this petition, which
requested that EPA require all OTC States to adopt the CAL LEV program
(called the Ozone Transport Commission Low Emission Vehicle (OTC LEV)
program. 60 FR 4712 (January 24, 1995) (OTC LEV Decision)). In that
rule, EPA found that the reduction of emissions from new motor vehicles
throughout the OTR is necessary to mitigate the effects of air
pollution transport in the region and to bring ozone nonattainment
areas in the OTR into attainment (including maintenance) by the dates
specified in the CAA, as amended in 1990. On the basis of this finding,
EPA issued a finding that the State Implementation Plans (SIPs) of the
OTC States are substantially inadequate. Under the OTC's recommended
program, all new motor vehicles sold in the OTR beginning in MY1999
would be required to be certified by the California Air Resources Board
(CARB) to any one of the California motor vehicle emissions standards
(i.e., California Tier 1, Transitional Low Emission Vehicle (TLEV), Low
Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), or Zero
Emission Vehicle (ZEV)). Manufacturers could choose to sell any mix of
California-certified vehicles to comply with annual fleet average NMOG
standards, which become increasingly stringent over time. Pursuant to
the OTC recommendation, individual states in the OTR could (but were
not required to) adopt a ZEV mandate to the extent permitted by the
CAA.
The OTC LEV decision was challenged by the Commonwealth of Virginia
and several motor vehicle manufacturers. The Court of Appeals held that
EPA did not have authority to require the OTC States to adopt the CAL
LEV program and vacated EPA's OTC LEV decision. Virginia v. EPA, No.
95-1163 (D.C. Cir. March 11, 1997).
The court decision striking EPA's OTC LEV decision changes some of
the legal requirements for National LEV. When EPA proposed the National
LEV program, it proposed criteria that the National LEV program would
have to meet to be an acceptable LEV-equivalent program that would
relieve OTC States of their obligation under the OTC LEV decision. EPA
proposed that National LEV (1) would need to achieve emissions
reductions equivalent to those that would be achieved by OTC LEV, and
(2) would be an enforceable, stable program that was in effect. Because
EPA no longer need find that National LEV is an acceptable LEV-
equivalent program, EPA has reevaluated whether National LEV is legally
required to meet the two criteria. EPA has determined that there is no
longer a legal requirement for National LEV and OTC LEV to achieve
equivalent emissions reductions. Nonetheless, for all parties to
support National LEV, it must produce an acceptable quantity of
emission reductions. Furthermore, for EPA to grant SIP credits,
National LEV must be an enforceable, stable program.
In today's rule, EPA finds that National LEV will achieve
reductions in new motor vehicle emissions in the OTR that are at least
equivalent to the reductions that would be achieved through OTC state-
by-state adoption of the CAL LEV program. EPA also finds that once
manufacturers opt into the National LEV program, it is enforceable
against the manufacturers. After EPA provides further notice to take
comment on the type of OTC State commitments that would make the
program lasting, the Agency intends to promulgate final provisions for
OTC State commitments sufficient to adequately assure that National LEV
will produce the intended emissions reductions for the intended
duration of the program. Then, EPA will be able to find that National
LEV is in effect when all auto manufacturers have opted into the
program.
EPA provided numerous opportunities for public participation in the
decision-making process leading to OTC LEV and National LEV, as
described more fully in section III.C.4. EPA established a subcommittee
of the Clean Air Act Advisory Committee pursuant to the Federal
Advisory Committee Act (FACA) to evaluate issues relating to obtaining
reductions in emissions from new motor vehicles. The Subcommittee has
also served as a public forum to discuss voluntary, 49-state motor
vehicle emissions standards and provided comments to EPA on the
National LEV program.

B. Benefits of the National LEV Program

The National LEV program will result in significant environmental
and public health benefits nationwide if the OTC States and auto
manufacturers agree to implement it. The program promulgated today
represents a significant step towards the goal of reducing smog
throughout the United States. The National LEV program will also
achieve reductions in emissions of other pollutants, including
particulate matter (PM), benzene, and formaldehyde.
Ground-level ozone, the principal harmful component in smog, is
produced by a complex set of chemical reactions involving volatile
organic compounds (VOCs) and oxides of nitrogen (NO<INF>X</INF>) in the
presence of sunlight. Ground-level ozone causes health problems,
including damaged lung tissue, reduced lung function, and lungs that
are sensitized to other irritants. Scientific evidence indicates that
the ambient levels of ozone affect healthy adults and children, as well
as people with impaired respiratory systems, such as asthmatics. A
reduction in lung function during periods of moderate exercise has been
found following exposure to ozone for six to seven hours at
concentrations at or near the current standard. This decrease in lung
function may be accompanied by symptoms such as chest pain, coughing,
nausea, and pulmonary congestion. Studies, to date, indicate that the
acute health effects of exposure to ozone at the level of the current
ozone NAAQS (such as coughing, chest pain, and shortness of breath) are
reversible in most people when the exposure stops. However, the extent
of such reversibility depends on factors such as the length of exposure
and individual activity level. With repeated exposure to ozone over
time, many of these symptoms attenuate but some indicators of cell
damage suggest continued lung inflammation. Ground-level ozone is also
responsible for significant agricultural crop yield losses each year.
Studies also indicate that the current ambient levels of ozone are
responsible for damage to both terrestrial and aquatic ecosystems,
including acidification of surface waters, reduction in fish
populations, damage to forests and wildlife, soil degradation, and
reduced visibility.
The primary NAAQS for various pollutants, including ozone, are set
by EPA on the basis of air quality criteria

[[Page 31196]]

and allowing an adequate margin of safety, at a level that the Agency
determines is necessary to protect public health. EPA then classifies
areas across the country based on whether they attain these standards.
Areas that do not meet these standards are deemed ``nonattainment''
areas and rated based on the severity of their air quality problem.
There are 66 ozone nonattainment areas throughout the United States,
including several areas classified as ``serious'' or ``severe'' for
ozone. Houston and the upper Midwest, in particular, experience high
levels of ground-level ozone pollution. The implementation of the
National LEV program nationwide in MY2001 will advance the goal of
emissions reductions in those areas. Motor vehicles are a significant
contributor to smog because of their emissions of VOCs and
NO<INF>X</INF>. A vehicle certified to the National LEV standards will,
over its lifetime, emit 400 pounds less pollution than a Tier 1
vehicle. Implementation of National LEV is expected to achieve
nationwide reductions of NO<INF>X</INF> emissions of 400 tons/day in
2005 and 1250 tons/day in 2015, and nationwide reductions in NMOG
emissions of 279 tons/day in 2005 and 778 tons/day in 2015.
In evaluating the OTC petition, EPA analyzed the level of emissions
reductions throughout the OTR necessary to attain (or maintain) the
NAAQS for ozone, given the serious transport issue. EPA concluded,
based on its analysis in the context of the OTC LEV decision, that
NO<INF>X</INF> reductions of 50 percent to 75 percent from 1990 levels
from every portion of the OTR lying to the south, southwest, west, and
northwest of each serious or severe OTR nonattainment area, and VOC
reductions of 5 percent to 75 percent from the portion of the OTR in or
near (and upwind of) each serious and severe OTR nonattainment area,
are necessary to bring each such area into attainment by the applicable
date.
EPA has projected that, without a program that achieves reductions
in the Northeastern United States equivalent to those achieved by OTC
state-by-state adoption of CAL LEV, on-highway vehicles will account
for approximately 38 percent of NO<INF>X</INF> emissions and 22 percent
of anthropogenic VOC emissions in 2005. As described in the OTC LEV
decision, EPA's modeling analyses support the conclusion that no
combination of potentially broadly practicable control measures in the
OTR would be sufficient to achieve the necessary level of emissions
reductions without more stringent new motor vehicle emission standards.
Thus, EPA determined that all of the emissions reductions in the OTR
associated with implementing the OTC LEV program, or a LEV-equivalent
program, are necessary. While the court decision overturned the OTC LEV
decision requiring adoption of OTC LEV, the court did not overturn
EPA's underlying assessment of the need for significant additional
emissions reductions in the region.
More stringent motor vehicle standards outside the OTR, such as
those contained in today's rule, will help the OTR achieve necessary
reductions, in addition to producing benefits in States outside the
OTR. EPA has determined that the National LEV program promulgated today
would provide at least equivalent emissions reductions of VOCs and
NO<INF>X</INF> in the OTR as would OTC state-by-state adoption of CAL
LEV programs, and would do so in a more efficient and cost-effective
manner, for several reasons.² First, the National LEV
program provides for the introduction of TLEVs in the OTR in MY1997,
two years earlier than EPA had required under the OTC LEV
program.³ Second, since the National LEV program will apply
nationwide (except for California) in MY2001, vehicles purchased
outside the OTR that move into the region will be up to 70 percent
cleaner than incoming vehicles (i.e., Tier 1 vehicles) would have been
under the OTC LEV program. EPA estimated that if migration into the OTR
of non-LEV vehicles were taken into account in estimating benefits of
OTC LEV, this would result in a 16 ton/day increase in VOC emissions
and a 28 ton/day increase in NO<INF>X</INF> emissions in 2005 compared
to EPA's estimates of highway vehicle emissions in the OTR without
factoring in migration. The National LEV program, when implemented
nationwide in MY2001, will greatly reduce this migration effect. Even
more significant, without the OTC LEV SIP call, a substantial number of
the OTC States are now unlikely to adopt state CAL LEV programs
effective for the relevant timeframe, which dramatically increases the
relative benefits of National LEV over an approach that relies on OTC
state-by-state adoption of CAL LEV.
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\2\ Since EPA's modeling was completed, circumstances have
changed that have set back the potential realistic start dates both
for National LEV and for OTC state-by-state implementation of CAL
LEV. EPA's modeling shows that the programs as designed (i.e.,
National LEV starting in MY1997 and CAL LEV throughout the OTR
implemented by MY1999) would produce equivalent emission reductions.
See section V.A. In the SNPRM, EPA will discuss the relative
emission reduction effects of delayed start dates.
\3\ Although it is unrealistic to start National LEV with MY1997
(see discussion in n. 17), EPA believes it is possible for National
LEV to start sooner than most OTC States could start state LEV
programs.
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The National LEV program is also expected to achieve pollution
reduction benefits from motor vehicles beyond those associated with
ozone pollution, including benefits from control of PM, benzene, and
formaldehyde. All states, not just those in the OTR, will realize these
air quality benefits.
PM is the generic term for a broad class of chemically and
physically diverse substances that exist as discrete particles over a
wide range of sizes. PM emissions have been associated with numerous
serious health effects, including upper and lower respiratory illnesses
such as pneumonia, chronic obstructive pulmonary disease, chronic
bronchitis, aggravation of the respiratory system in children with pre-
existing illnesses, and premature mortality in sensitive individuals
(such as those with cardiovascular diseases). In addition, studies have
shown that PM emissions episodes can result in a short-term decrease in
lung function in small children. PM emissions also contribute to
impairment of visibility, acidic deposition, and potential modification
of the climate.
The National LEV program will require diesel LDVs and LLDTs to meet
PM standards that are more stringent than the comparable Tier 1
standards. As discussed more fully in the Regulatory Impact Analysis
(RIA) ⁴ for this rulemaking, EPA's modeling shows that
implementation of the National LEV program will result in a 28.6 ton/
day reduction in particulates less than 10 microns in diameter (PM-10)
in 2005, compared to expected PM emissions when current Tier 1
standards apply outside the OTC and OTC state-by-state adoption of CAL
LEV is fully implemented within the OTC. Furthermore, in western areas
(such as Denver) with a PM pollution problem caused by nitrates, the
NO<INF>X</INF> reductions achieved by the National LEV program will
provide additional PM emissions benefits.
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\4\ Available in the public docket for review; see ADDRESSES.
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National LEV also will decrease emissions of two carcinogens:
benzene and formaldehyde. As discussed more fully in the RIA for this
rulemaking, EPA's modeling demonstrates that implementation of the
National LEV program will reduce emissions of benzene by seven tons/day
and formaldehyde by four tons/day nationwide in 2005. EPA has
classified benzene as a Group A known human carcinogen, based on
studies on workers

[[Page 31197]]

showing that long-term exposure to high levels of benzene causes
cancer. Exposure to benzene emissions has also been associated with
non-cancer health effects, including blood disorders, adverse effects
on the immune system, and damage to reproductive organs. EPA has
classified formaldehyde as a probable human carcinogen, based on animal
studies showing that long-term exposure to, and inhalation of,
formaldehyde is associated with certain types of tumors. In addition,
exposure to formaldehyde is associated with non-cancer health effects,
including irritation of the eyes, nose, throat, and lower airway, at
low levels of exposure, and adverse effects on the liver and kidneys.
Unlike the current federal Tier 1 program, the National LEV program
includes standards for formaldehyde emissions from motor vehicles.
EPA believes that the National LEV program is particularly
promising because it would provide these nationwide health and
environmental benefits while reducing some aspects of the auto
manufacturers' regulatory burden and compliance costs. Currently,
manufacturers typically design, test, and produce two different types
of vehicles (California and federal), each of which must meet different
standards according to different test procedures. One of the goals of
the National LEV program is to use a single test procedure and standard
for each particular type of emission control requirement. Because of
this harmonization with California's program,⁵
implementation of the National LEV program will streamline the process
for certifying a vehicle for sale, reduce auto manufacturers' design
and testing costs, and provide other efficiencies in the marketing of
automobiles.⁶
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\5\ In addition to using the same tailpipe standards as
California, EPA is working with CARB to make changes to other EPA
standards and test procedures that will further harmonize the
federal and California motor vehicle emission control programs. EPA
expects that CARB will reassess its regulations shortly to further
this harmonization. Even if National LEV becomes effective,
California will continue to have its own program. Manufacturers
could decide to sell some vehicles (such as ULEVs or ZEVs) in
California (or California and the OTR), but not nationwide.
\6\ EPA received a letter from the Government of Canada
(available in the public docket for review), indicating that
government's interest in adopting national motor vehicle emissions
standards that are the same as those contained in any national low
emission vehicle program adopted in the United States. Such
harmonization of motor vehicle emission control standards in the
United States and Canada would provide even greater efficiencies to
the auto manufacturers and would broaden the geographical range of
the emissions benefits of such a program, including the specific
benefit of reduced downwind pollution transport.
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EPA also believes the National LEV program is a preferable
alternative to OTC state-by-state adoption of CAL LEV because it will
use fewer regulatory and legislative resources than would OTC state-by-
state adoption of CAL LEV, since the implementation of the National LEV
program is premised on agreement reached by the OTC States, the auto
manufacturers, and EPA. The OTC States, the auto manufacturers, and
EPA, with input from environmental and public health groups, and other
interested parties, have made significant efforts that resulted in a
broad outline for a viable, cost-effective national low emission
vehicle program. EPA believes that cooperation among the various
interested parties is the best way to achieve significant emissions
reductions and to design a practical, enforceable, and efficient
program. It allows the OTC States, EPA, auto manufacturers, other
affected industry groups, environmental groups and other interested
parties to spend resources making the program work instead of fighting
each other on a state-by-state basis over adoption of CAL LEV programs.
It also eliminates the need for any state, besides California, to spend
any resources on enforcement of its own motor vehicle emissions control
program since enforcement responsibilities will remain with EPA and
California. The National LEV program is a promising example of how
cooperative efforts can advance the goal of cleaner air.
EPA has also analyzed the costs of the National LEV program. EPA
used the detailed assessment of the cost of LEVs produced by CARB in
1994 and updated in April, 1996. CARB estimated the incremental cost of
$96 per car for LEVs only in California.⁷ EPA believes that
the incremental cost for National LEV will be considerably lower than
the CARB estimate for a variety of reasons. First, automotive pollution
control technology will continue to advance, leading to better controls
at lower costs over time. For example, in the two years between CARB's
technology assessments, Honda announced the introduction of new LEV
technology that will add little or no cost to vehicles. Second, the
National LEV program includes numerous provisions to harmonize federal
and California motor vehicle requirements. The resulting cost-savings
for auto manufacturers and dealers (in areas such as vehicle design,
certification testing, mechanic training and inventory control) will be
significant and offset at least a portion of the costs for LEVs. Third,
the nationwide production of LEVs will result in economies of scale for
the manufacturers. Fourth, CARB's own cost estimates have generally
been shown to be higher than actual price differences. For example,
CARB estimates price increases for TLEVs at $61, but informal surveys
of TLEV prices in California and New York have generally shown no price
differentials between comparable TLEV and Tier 1 vehicles. Finally,
auto industry experience has consistently demonstrated rapid price
decreases in successive model years for newly-introduced technology.
Analysis discussed in the RIA yields an annual incremental cost
estimate of $950 million for National LEV when compared to current
federal regulatory obligations, or of $600 million for National LEV
when compared to CAL LEV throughout the OTR and current regulations in
the rest of the country. EPA believes that these costs would actually
be lower, as discussed above. The total expenditure for new cars in the
United States in 1993 was approximately $225 billion.
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\7\ A November, 1996 CARB Staff Report on Low Emission Vehicle
and Zero-Emission Vehicle Program Review modified CARB's vehicle
cost estimates. CARB now estimates the incremental costs of LEVs at
approximately $120. EPA's cost analysis for the National LEV
program, which has included the data in CARB's staff reports on the
CAL LEV program, looks at costs of vehicles in California and then
estimates National LEV program costs based on nationwide sales
volumes. Two principal reasons for vehicle price differentials
between California and National LEV vehicles are economy of scale in
production volumes and allocation of costs among the number of
vehicles being produced, with such costs distributed over an
appropriate number of years. EPA's cost estimates rely in part on
the start date of the National LEV program, which will be addressed
in the upcoming SNPRM. See n. 17 below. Once the actual start date
is determined, EPA will recalculate its estimates for vehicle costs
using up-to-date cost information.
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C. Background

To provide a context for, and background to, the National LEV
Program, it is necessary to discuss briefly the federal and California
motor vehicle programs and the OTC's efforts to have the CAL LEV
program adopted throughout the OTR. Additional background information
is provided in the Notice of Proposed Rulemaking (NPRM) detailing the
National LEV program on October 10, 1995 (60 FR 52734, 52738-52740).
EPA provided extensive and numerous opportunities for public
involvement in that decision and in developing the framework for a
national voluntary low emission vehicle program.
1. Current Federal Motor Vehicle Emissions Control Program
The CAA prohibits the introduction into commerce of a new motor
vehicle that is not covered by a certificate of conformity issued by
EPA. To obtain such a certificate for a vehicle or engine

[[Page 31198]]

family, manufacturers must demonstrate compliance with all federal
emissions control standards and requirements that apply to new motor
vehicles for that class or category of vehicles for the relevant model
year. The exhaust emission standards and procedures that currently
apply to new LDVs and LDTs, known as the Tier 1 standards, were
promulgated on June 5, 1991 (See 56 FR 25724; the standards themselves
are codified at 40 CFR 86.094-8 and 86.094-9). The Tier 1 program
includes standards for non-methane hydrocarbon (NMHC), oxides of
nitrogen (NO<INF>X</INF>), carbon monoxide (CO) and particulate matter
(PM), all measured over the Federal Test Procedure (FTP) and applicable
for the full statutory useful life of the vehicle. For MY1996 and
thereafter, all LDVs and the LLDTs must comply with the Tier 1
standards. The federal motor vehicle program also includes other
standards and requirements that apply to new motor vehicles, such as
evaporative emissions, cold temperature CO, on-board refueling vapor
recovery, and on-board diagnostic equipment.
Under section 207 of the Act, manufacturers must warrant the
emissions performance of their new, certified motor vehicles for a
portion of the vehicle's full useful life. EPA enforces the federal
standards through its Selective Enforcement Audit (SEA) program
(assembly line testing) and through in-use compliance testing and
recall programs.
2. California Low Emission Vehicle Program
Section 209 of the CAA generally preempts states from adopting and
enforcing standards relating to emissions from new motor vehicles and
new motor vehicle engines. ⁸ However, the Act provides two
exceptions. One allows EPA to waive preemption for the State of
California, permitting that state to adopt and enforce its own motor
vehicle emissions control program. ⁹ The second exception
allows states other than California to adopt and enforce California's
standards, if certain specified conditions are met. ¹⁰
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\8\ Clean Air Act section 209(a), 42 U.S.C. 7543(a).
\9\ Clean Air Act section 209(b), 42 U.S.C. 7543(b).
\10\ Clean Air Act section 177, 42 U.S.C. 7507.
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In 1990, California adopted the LEV program, containing three basic
components. First, manufacturers must certify new motor vehicles to one
of the following five emissions categories: California Tier 1, TLEVs,
LEVs, ULEVs, and ZEVs. Second, manufacturers must comply with an
overall fleet average NMOG standard. This requirement began in MY1994
and becomes more stringent over time. The third element is a ZEV
production mandate, which requires manufacturers to include a certain
percentage of ZEVs in their LDV fleet for sale in California.
Initially, the ZEV mandate would have begun in MY1998, when two percent
of a manufacturer's LDV fleet was required to be ZEVs. This would have
increased to five percent in MY2001 through MY2002, then ten percent in
MY2003. However, at a March 28, 1996, hearing CARB approved changes
that eliminate all of the ZEV mandates except for the ten percent
requirement beginning in MY2003. EPA granted California a waiver of
preemption for its LEV program in January 1993. See 58 FR 4166 (January
13, 1993).
The States of New York, Massachusetts, New Jersey, Connecticut,
Rhode Island, and Vermont, all of which are members of the OTR, have
adopted all or portions of the California LEV program pursuant to
section 177 of the Act. Massachusetts and New York are currently
implementing their LEV programs. Connecticut, New Jersey and Rhode
Island have also adopted the California LEV program, excluding the ZEV
production mandate, effective in MY1998 for Connecticut and MY1999 for
the other two states. In addition, Vermont has adopted the California
LEV program effective in MY1999, which includes a ZEV sales target,
that would apply only if certain criteria are met. As a result of
automobile manufacturers' challenges to the New York and Massachusetts
LEV programs, federal district and appellate court decisions have
upheld these programs.¹¹
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\11\ Motor Vehicle Manufacturers Association v. New York State
Department of Environmental Conservation, 79 F.3d 1298 (2d Cir.
1996); American Automobile Manufacturers Association (AAMA) v.
Commissioner, Massachusetts Department of Environmental Protection,
31 F.3d 18 (1st Cir. 1994); Motor Vehicle Manufacturers Association
v. New York State Department of Environmental Conservation, 17 F.3d
521 (2nd Cir. 1994); MVMA v. NYSDEC, 869 F. Supp. 1012 (N.D.N.Y.
Oct. 24, 1994); and AAMA v. Greenbaum, No. 93-10799-MA (D. Mass.
Oct. 27, 1993).
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3. OTC Efforts To Reduce Motor Vehicle Emissions in the OTR
Since it was convened in 1991, the OTC has worked on addressing the
contribution of motor vehicles to the northeast ozone problem. It has
identified two methods of controlling new motor vehicle emissions--
state-by-state adoption of the CAL LEV program and National LEV. The
auto manufacturers have said they prefer National LEV. As part of the
process of achieving state-by-state adoption of CAL LEV throughout the
OTR, the OTC sought and obtained from EPA a SIP call requiring each OTC
State to adopt CAL LEV unless the State could show that the program was
not necessary for the State to meet certain of its Clean Air Act
obligations or unless there was an equivalent national motor vehicle
program. Although a recent court decision struck down this SIP call and
thus removed one of the mechanisms for the OTC to achieve the goal of
state-by-state adoption of the CAL LEV program, the OTC States remain
free to pursue this goal through other means.
A summary of the OTC LEV decision is provided here. Interested
parties are referred to the OTC LEV decision SNPRM and Final Rulemaking
(FRM) for additional information. See 59 FR 48664 (September 22, 1994);
and 60 FR 4712 (January 24, 1995).
In February, 1994, the OTC formally recommended, pursuant to
section 184(c) of the CAA, that EPA require all OTC States to adopt an
OTC LEV program in their SIPs. The OTC's recommended LEV program would
have required that, beginning in MY1999, all new LDVs and LLDTs sold or
otherwise introduced into commerce in the OTR be certified to
California LEV program standards. In addition, manufacturers would be
required to meet California's fleet average NMOG standard for such
vehicles. The OTC recommended that member states be allowed, but not
required, to adopt California's ZEV mandate, unless EPA determined that
the CAA required a state to adopt the ZEV mandate in order to adopt the
NMOG average part of the LEV program. In addition, the OTC stated that
it expected EPA to evaluate alternatives to OTC LEV.
On December 19, 1994, EPA approved the OTC recommendation. EPA
found that the emissions reductions resulting from OTC LEV or a LEV-
equivalent program are necessary for ozone nonattainment areas in the
OTR to achieve attainment (and maintenance) by the applicable deadline,
and that the OTC LEV program is consistent with the CAA. See 60 FR 4712
(January 24, 1995). Based on that approval, EPA issued to each OTC
State a finding that its SIP is substantially inadequate to meet
certain requirements insofar as the SIP would not currently achieve
those necessary emissions reductions. EPA found that states could
satisfy the finding of SIP inadequacy by adopting OTC LEV or by
submitting a ``shortfall'' SIP.¹² The States were required
to

[[Page 31199]]

submit a SIP revision on or before February 15, 1996, to cure this
inadequacy.
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\12\ As described in the OTC LEV decision, a ``shortfall'' SIP
program must contain adopted measures that make up the shortfall
between (1) the emission reductions necessary to prevent adverse
consequences on downwind nonattainment, as determined by EPA in the
OTC LEV decision, and (2) the emission reductions that would be
achieved by the measures mandated by the Clean Air Act and
potentially broadly applicable measures, as identified by EPA in the
OTC LEV decision. See 60 FR 4730 (January 24, 1995).
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In the OTC LEV decision, EPA also said that the SIP inadequacy
would be satisfied if EPA were to determine through rulemaking that a
federal 49-state motor vehicle emission control program was an
acceptable LEV-equivalent program and that such program was in effect.
Thus, if EPA were to find that auto manufacturers had opted into a LEV-
equivalent federal motor vehicle emissions control program deemed
acceptable by EPA through rulemaking action, then states would be
relieved of the obligation under the OTC LEV decision to adopt the OTC
LEV program in their SIPs. EPA had proposed that National LEV would be
such a program, provided that the OTC States and auto manufacturers
made sufficient commitments to it.
Only six states made submissions in response to the OTC LEV SIP
call. New York and Massachusetts both submitted LEV programs that are
currently in effect. Both programs include ZEV mandates. Connecticut,
New Jersey, Rhode Island, and Vermont submitted OTC LEV programs in
which OTC LEV is a ``backstop'' program. Manufacturers would not have
to comply with those four states' programs if National LEV is an
acceptable-LEV equivalent program and is in effect. New Jersey's
program is conditioned further--it will not be implemented unless a
minimum number of OTC States (excluding itself), represented by 40
percent of new vehicles registered in the OTR in MY1999, also implement
the OTC LEV program not later than MY1999. Vermont also has a ZEV sales
target, which would apply if certain criteria are met, independent of
whether National LEV is in effect.
In a recent decision, the Court of Appeals struck down EPA's OTC
LEV decision and SIP call. Virginia v. EPA, No. 95-1163 (D.C. Cir.
March 11, 1997). The Court found that, while section 184 of the CAA
gives EPA authority to require the OTC States to adopt specific
pollution control measures upon the recommendation of the OTC, sections
177 and 202(b)(1)(c) of the CAA preclude EPA from requiring the OTC
States to adopt the CAL LEV program prior to MY2004. The Court let
stand EPA's underlying finding that the region needs substantial
emissions reductions to mitigate the effects of air pollution transport
and to bring (and keep) nonattainment areas in the region into
attainment for ozone. It also affirmed the right of each State to adopt
the CAL LEV program if it so chooses.
The Court decision does not dramatically alter the need for or
potential benefits of National LEV. Although National LEV's development
has been closely tied to EPA's OTC LEV decision and SIP call, National
LEV is not dependent on them. National LEV was developed as an
alternative to state-by-state adoption of CAL LEV in the OTR. Although
the Court decision may affect the number of OTC States that will
actually adopt CAL LEV, it does not limit states' ability to adopt CAL
LEV and thus does not solve the problems created for manufacturers when
some states have CAL LEV and some states rely on the federal program.
Although the states have the option of adopting CAL LEV on a state-by-
state basis, National LEV may provide greater emission reductions to
upwind states than state-by-state adoption of CAL LEV because some
states may not adopt CAL LEV.
4. Public Process
The Agency has employed a public process designed to provide
maximum opportunity for public participation in an expedited decision-
making process. A complete discussion of the history of this process
can be found in the NPRM published on October 10, 1995 (60 FR 52734).
In addition to the numerous public meetings and other opportunities for
public comment described in that notice, EPA received numerous comments
on the NPRM and held a widely attended public hearing on November 1,
1995. In developing today's rule, the Agency has fully considered all
of the public comments timely filed in this rulemaking. EPA's responses
to significant comments are contained either in today's rule or in the
detailed Response to Comments document contained in the public docket.
Where EPA notes that it is deferring resolution of certain issues
raised in the NPRM, the response to comments on those issues is also
deferred. In addition to relying on this rule and the Response to
Comments document as the statement of basis and purpose for today's
action, EPA is also relying on the detailed explanations in the NPRM
where it references those explanations.

D. National LEV Program

1. Agreement--A Necessary Predicate for the National LEV Program
The National LEV program is a voluntary program that cannot be
implemented without the agreement of the auto manufacturers and the OTC
States. EPA cannot require the auto manufacturers to meet the National
LEV standards, absent the manufacturers' consent, because section
202(b)(1)(C) of the Clean Air Act prevents EPA itself from mandating
new exhaust standards applicable before MY2004. The auto manufacturers
have said that they will not agree to be bound by the National LEV
program unless the OTC States accept National LEV as an alternative to
OTC state adoption of CAL LEV programs under section 177. EPA does not
have the authority to require the OTC States to accept the National LEV
program. Thus, National LEV is dependent upon the auto manufacturers
and the OTC States voluntarily committing to the program.¹³
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\13\ See Virginia v. EPA, No. 95-1163 (D.C. Cir. March 11,
1997), slip. op. at 10, footnote 4. (``The program is voluntary
because section 202 of the Clean Air Act forbids EPA from itself
modifying motor vehicle emissions standards `before the model year
2004.' '').
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The OTC States and auto manufacturers have been negotiating a
voluntary, national program that would include committing to National
LEV and to the introduction of ATVs in the OTR. They had hoped to
memorialize their agreement in a comprehensive MOU to be signed by all
OTC States and all auto manufacturers with sales in the United States.
The OTC States (collectively) and the auto manufacturers (collectively)
have each initialed MOUs reflecting their willingness to agree to a
National LEV program. Although the MOUs are different in some respects,
they show basic agreement on the national program contained in the
regulations promulgated today. The ATV component (discussed in more
detail in footnote 52 below) is not a part of EPA's regulations, but
would be an agreement between the OTC States and the auto manufacturers
that would be contained in an attachment to the MOU if that MOU is
finalized.
Although the OTC States and the auto manufacturers have reached
agreement on most issues and EPA today is promulgating the regulatory
framework for National LEV, some issues are still unresolved. When EPA
published the NPRM, it anticipated that the OTC States and the auto
manufacturers would continue to make progress on these few remaining
issues (mainly related to OTC State commitment to the

[[Page 31200]]

National LEV program), and thus left these issues to be addressed in a
later SNPRM which could be informed by the anticipated agreement. The
OTC States and the auto manufacturers have not yet resolved these
issues. Rather than lose the potential regional and national public
health benefits of National LEV, EPA intends to publish an SNPRM to
take comment on the remaining issues that must be finalized for the OTC
States and the auto manufacturers to commit to the
program.¹⁴ EPA will then resolve these issues in a
supplemental final rule.
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\14\ Primarily, the SNPRM will address the OTC States'
commitment to National LEV (the nature, the mechanisms and the
timing of the commitments) and related issues. As a result of the
bifurcation of the National LEV rulemaking process, issues that were
noticed in the NPRM may not be decided finally until the final rule
that follows the SNPRM. This rule and the Response to Comments note
those issues that are not being decided finally in today's rule. The
SNPRM will describe the issues on which EPA is taking further
comment.
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EPA is hopeful that, after these remaining issues are resolved, the
OTC States and the auto manufacturers will agree to National LEV. The
program would have many benefits to the nation as a whole, the OTC
States, and the auto manufacturers. A set of uniform, more stringent
standards that apply in 49 states is a more environmentally beneficial
and economically efficient approach to achieving emissions reductions
from new motor vehicles than a ``patchwork'' of California standards in
some states and federal standards in others. The National LEV program
would achieve at least the same level of emissions reductions in the
OTR as would the OTC state-by-state adoption of the CAL LEV program.
The introduction of LEVs nationwide would help alleviate pollution
transport problems in the OTR and in other states and would eliminate
concerns about non-LEV vehicles being introduced into the OTR from
states outside the region that have not adopted CAL LEV. In addition, a
national program would impose less administrative burden on the OTC
States and other states than would state-by-state adoption and
enforcement of CAL LEV. Finally, a cooperative, partnership approach to
program implementation should provide benefits beyond those achieved
through a traditional command-and-control approach.
2. Description of National LEV Program
In today's final rule EPA is promulgating a set of voluntary
National LEV standards to control exhaust emissions of air pollutants
from new motor vehicles. These standards will apply when the OTC States
and the motor vehicle manufacturers commit to the National LEV program.
The National LEV new tailpipe emission standards and related
requirements will apply in addition to the applicable federal Tier 1
tailpipe standards and will not change for the duration of the
program.¹⁵ The National LEV standards and requirements
include: (1) tailpipe emissions standards for NMOG, NO<INF>X</INF>, CO,
formaldehyde (HCHO), and PM; (2) fleet average NMOG values; (3)
allowance for the use of California Phase II reformulated gasoline
(RFG) as the test fuel for the tailpipe standards; (4) certain
California on-board diagnostic system requirements (OBD II), excluding
anti-tampering provisions; and (5) averaging, banking and trading
provisions.
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\15\ The CAA requires that all MY1996 and later LDVs and LLDTs
meet the Tier 1 exhaust emission standards at the time of
certification. As noted later in section IV, most of the Tier 1
emission standards have numerically equivalent or more stringent
analogues in the National LEV standards. Thus, certification to the
National LEV standards directly demonstrates compliance with most of
the Tier 1 standards. Manufacturers must still demonstrate
compliance with those remaining Tier 1 standards that lack National
LEV analogues.
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In general, the National LEV standards and related requirements are
patterned after California's more stringent tailpipe standards and
fleet average NMOG standards. Under the National LEV program,
manufacturers can certify LDVs and LLDTs to one of the following
certification categories (listed in order of increasing stringency):
Tier 1, TLEV, LEV, ULEV, or ZEV. Each certification category contains
tailpipe emission standards for NMOG, CO, NO<INF>X</INF>, formaldehyde
(HCHO), and PM. Manufacturers that opt into the National LEV program
will be required to produce and deliver for sale a combination of
vehicles that complies with an annual fleet average NMOG value. Sales
of LDVs and LLDTs in the OTR will have to meet an increasingly
stringent fleet average NMOG standard from MY1997 ¹⁶ to
MY2001. Beginning with MY2001, manufacturers will be required to comply
with a nationwide (except California) fleet average NMOG standard for
LDVs and LLDTs that is equivalent to the average NMOG emissions of a
100 percent LEV fleet. An averaging, banking and trading program
comparable to California's can be used to meet the fleet average NMOG
requirements.
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\16\ As discussed in n. 17 below, EPA is using MY1997 as a
placeholder for the actual start date of National LEV.
---------------------------------------------------------------------------

As National LEV is voluntary, manufacturers will only have to
comply with the National LEV standards if they choose to opt into the
program. Once they opt in, however, manufacturers must stay in the
National LEV program and comply with its standards. Manufacturers may
opt out of National LEV only under certain circumstances which, if they
occurred, would change the basic presumptions upon which the
manufacturers opted into the program. Such conditions are an OTC
State's failure to meet or keep its commitment regarding adoption of a
State motor vehicle program under CAA section 177 or a change in one of
the designated ``Stable Standards'' (as discussed below in section
IV.A.2.a).
Any manufacturer that opts into the National LEV program will be
fully subject to its requirements. Barring one of the limited and
unlikely events that would allow manufacturers to opt out of the
program, manufacturers will be required to meet the National LEV
standards and requirements for all of the model years covered by the
program. A manufacturer that fails to meet these requirements will be
subject to the same enforcement measures as exist for violation of any
federal motor vehicle emission standard promulgated under section
202(a) of the Act. Once manufacturers opt into National LEV, they will
find administration and enforcement of its requirements
indistinguishable from administration and enforcement of the rest of
the federal motor vehicle emissions program.
Manufacturers that opt into the National LEV program will have to
comply with the specified tailpipe emissions and related standards
beginning in MY1997 ¹⁷ for LDVs and LDTs offered for sale in
the OTR, and beginning in MY2001 for those same vehicle categories
offered for sale in the rest of the country, except California. The
National LEV standards will continue to apply until the first model
year for which manufacturers must meet a mandatory federal program that
is at least as stringent as the National LEV program. By statute, EPA
can not promulgate mandatory exhaust standards more stringent than Tier
1 standards (``Tier 2 standards'') applicable before MY2004, so the
National LEV standards will apply at least through MY2003.
---------------------------------------------------------------------------

\17\ Throughout this rule, EPA is using MY 1997 as a placeholder
for the start date of National LEV. MY1997 is the start date in the
MOUs initialled by the auto manufacturers and the OTC States. EPA
believes that MY1997 is an unrealistic start date given the court
decision vacating EPA's OTC LEV decision and given the likely timing
of final agreement on National LEV. In the upcoming SNPRM, EPA will
take comment on the appropriate start date for National LEV.
---------------------------------------------------------------------------

Vehicles in the National LEV program must comply with all other
federal

[[Page 31201]]

requirements applicable to LDVs and LLDTs for the appropriate model
year, including emissions standards and requirements, test procedures,
and compliance and enforcement provisions. However, as part of EPA's
effort to reinvent environmental regulations by reducing regulatory
burden without sacrificing environmental benefits, EPA is also
harmonizing, to the greatest extent possible, federal and California
standards and test procedures. Thus, today's rule includes changes to
current federal regulations designed to harmonize certain federal and
California standards and test procedures, and sections elsewhere in
this preamble summarize harmonization efforts in other rules. This
should reduce the regulatory burden on manufacturers by facilitating
the design, certification, and production of the same vehicles to meet
both federal and California requirements.

IV. Provisions of the National LEV Program

The National LEV regulations establish the structure and
requirements of a voluntary program to reduce tailpipe emissions from
motor vehicles, as summarized in the above section III.D.2. The
following sections lay out the provisions of the program in more
detail. First, EPA describes the structure of the voluntary program,
explaining how manufacturers opt into the program, under what limited
conditions they could opt out of the program, and the program's
duration. The next section lays out the National LEV standards and
requirements that manufacturers would be opting into. These include the
tailpipe emissions standards for individual vehicles, the fleet-wide
average emissions standards, and the averaging, banking and trading
program through which the fleet-wide standards would be implemented.
Finally, EPA discusses the legal authority for the voluntary National
LEV program and the enforceability of these provisions.

A. Program Structure

This section discusses basic structural elements of the National
LEV program: the process and timing for manufacturers to opt into the
program and for EPA to find that the program is ``in effect''; the
conditions allowing, process for, and ramifications of, a
manufacturer's decision to opt out of the program; and the duration of
the program.
1. Opt-In to National LEV and In-Effect Finding
The opt-in provisions are designed to provide a simple mechanism
that allows EPA to determine readily when a manufacturer has opted in
and become legally subject to the National LEV program requirements. A
motor vehicle manufacturer would opt into the program by submitting a
written notification that unambiguously and unconditionally states that
the manufacturer is opting into the program, subject only to the
condition that EPA finds the program to be in effect.
Today's regulations set forth various requirements for opt-in
notifications. The opt-in notification must state that the manufacturer
will not challenge EPA's authority to establish the National LEV
program and to enforce it once a manufacturer has unconditionally opted
into the program. Parties that choose to opt into a program that they
have volunteered to establish should agree that they will not challenge
the program later, particularly in the context of an enforcement action
brought by EPA due to a party's failure to comply with the program
requirements. The regulations require the manufacturers' notifications
to contain specified language renouncing such legal challenges. The
opt-in notification also must be signed by a person or entity within
the corporation with authority to bind the corporation to its choice.
The signatory must hold the position of Vice President for
Environmental Affairs, or a position of equivalent authority.
The opt-in will become binding upon EPA's receipt of the
notification or, if it is conditioned on EPA making an in-effect
finding, upon the satisfaction of that condition. Under today's rule,
any conditional opt-ins would become fully binding when EPA finds that
National LEV is in effect. Once EPA has promulgated the few outstanding
provisions of the National LEV program related to the OTC State
commitments and begun accepting manufacturer's opt-ins and OTC State
commitments to the program, EPA can make the finding that the program
is in effect without any additional rulemaking if all the manufacturers
listed in the regulations have opted into the program. Upon EPA making
an in-effect finding, National LEV will be fully enforceable.
It is possible that the final regulations EPA intends to issue
after taking further comment on OTC State commitments to National LEV
(for which EPA will provide further notice and opportunity to comment)
may result in changes or additions to the opt-in provisions promulgated
today. For example, at this time, EPA is not establishing deadlines
either for auto manufacturers to opt into the program or for EPA to
find that the program is ``in effect''. Rather than making a final
decision on these issues today, EPA expects to set such deadlines as
part of the final regulations it intends to issue after taking further
comment on OTC State commitments and related issues.
2. Opt-Out From National LEV
For the National LEV program to be useful and beneficial, it should
continue in effect for a substantial period of time stretching into the
next decade. States seek certainty regarding emissions benefits over
time, while motor vehicle manufacturers seek certainty regarding
emission standards to plan future production. Also, to give states SIP
credits for National LEV, EPA must find that the emissions reductions
will be enforceable over the intended duration of the program. All of
these objectives require that the program be stable over time, and the
opt-out provisions are structured to support this goal.
Once manufacturers have voluntarily chosen to opt into the program
and any permissible conditions of their opt-in have been met, they can
opt out of the program only under a few specified circumstances, or
``offramps.'' These offramps are limited to: (1) an OTC State's failure
to meet or keep its commitment regarding adoption or retention of a
state motor vehicle program under section 177; or (2) EPA modification
of certain specified standards or requirements over the manufacturers'
objection.
If a manufacturer were to opt out of the National LEV program, when
that opt-out became effective the manufacturer would become subject to
all standards that would apply if National LEV did not exist. The
federal Tier 1 tailpipe emissions and related standards would apply, as
would any applicable state standards promulgated under section 177. In
the SNPRM on OTC State commitments, EPA will take comment on what state
section 177 standards would be applicable, in light of the requirements
of section 177 and how the OTC States and manufacturers have addressed
this issue in their initialed MOUs. All vehicles certified under the
National LEV standards, however, would have to continue to comply with
those standards, which would have been incorporated as conditions of
the certificate under which those vehicles were sold. In addition, each
manufacturer would be held responsible for any debits it held at the
time it opted out.

[[Page 31202]]

a. Conditions allowing opt-out. (1) OTC states' failure to meet or
keep their commitments. The first condition allowing manufacturers to
opt out is a failure of any OTC State to meet its commitment regarding
adoption or retention of a section 177 program that does not allow
compliance with National LEV as a full alternative to compliance with
the state program. Since National LEV is intended to provide an
alternative to OTC state-by-state adoption of CAL LEV, manufacturers
should not be bound to stay in the National LEV program if an OTC State
requires them to comply with a section 177 program contrary to the
terms of the final agreement. This offramp not only gives manufacturers
recourse if an OTC State does not fulfill its part of the bargain, but
also encourages the OTC States to fulfill their commitments by setting
a serious penalty for breach of their commitments.
Unfortunately, EPA is unable to finalize this section of the
National LEV regulations now.¹⁸ When EPA proposed National
LEV, the manufacturers and the OTC States had not yet reached agreement
on the exact content and form of such an OTC State commitment. Details
that had yet to be resolved concerned what the OTC States would commit
to do regarding adoption or retention of the section 177 programs (both
LEV and ZEV requirements), the timing of any agreed upon actions, and
possible instruments for such state commitments (which might be some
combination of SIP revisions, consent decrees, legislative resolutions,
letters from the State Attorneys General, Executive Orders from the
Governor, letters from the Governor to EPA, or an MOU with the
manufacturers). EPA had expected that the OTC States and auto
manufacturers would have reached agreement on these issues by this
time, and had planned to issue an SNPRM taking comment on the whether
and how the National LEV regulations would reflect the OTC States' and
auto manufacturers' agreement on these issues. The SNPRM would have
taken comment on the stability and enforceability of the program in
light of the nature of those commitments. Unfortunately, the auto
manufacturers and the OTC States have not yet reached agreement on
these issues.
---------------------------------------------------------------------------

\18\ Today's regulations do not provide for an opt-out based on
this condition. EPA expects to propose to add this condition, as
discussed below.
---------------------------------------------------------------------------

Before the National LEV program can go into effect, EPA will need
to resolve the OTC State commitment issues mentioned above. EPA will
issue an SNPRM taking comment on these additional issues and then
promulgate a final rule to complete the National LEV rulemaking that
was initiated by the NPRM.
(2) EPA Changes to Stable Standards. With certain exceptions,
manufacturers will also be able to opt out if EPA changes a motor
vehicle requirement that it has designated a ``Stable Standard.'' The
Stable Standards, which are listed in Table 1, are divided into two
categories: Core Stable Standards and Non-Core Stable Standards. Core
Stable Standards generally are the National LEV standards that EPA
could not impose absent the consent of the manufacturers. Non-Core
Stable Standards are other federal motor vehicle standards that EPA
does not anticipate changing for the duration of National LEV. For both
Core and Non-Core Stable Standards, EPA can make changes to which
manufacturers do not object. For Non-Core Stable Standards, EPA can
also make changes that do not increase the stringency of the standard
or that harmonize the standard with the comparable California standard.
EPA can make other changes to any of the Stable Standards, but such
changes would allow the manufacturers to opt out of National LEV.
The primary purpose of this provision is to provide manufacturers
certainty that the voluntary standards that EPA does not have authority
to mandate (absent manufacturers' consent) are not changed without
their consent. The additional stability of the other motor vehicle
standards that EPA is providing by designating them Non-Core Stable
Standards should provide manufacturers with additional incentive to opt
into National LEV. Today's rule follows the same basic approach set out
in the proposal, but incorporates several refinements, as discussed
below. This section lists the Stable Standards, explains the rationale
for including each requirement as a Stable Standard, and explains what
types of changes EPA can make without giving manufacturers the
opportunity to opt out of National LEV.
(i) Designation of Stable Standards. EPA has refined the approach
to the Stable Standards in the proposal by subdividing them into two
categories: Core Stable Standards and Non-Core Stable Standards. Core
Stable Standards generally are standards specific to the National LEV
program (and certain related requirements). Non-Core Stable Standards
generally are other motor vehicle pollution control requirements that
the Agency does not anticipate changing for the duration of the
National LEV program. The list of Core and Non-Core Stable Standards is
provided in Table 1.

Table 1.--Designation of Core and Non-Core Stable Standards
------------------------------------------------------------------------
Type Stable standard
------------------------------------------------------------------------
Core Stable Standards..................... TLEV, LEV, ULEV, and ZEV
tailpipe emission standards
(``LEV standards'').
Fleet average NMOG standards
and related banking and
trading provisions.
Federal Test Procedure (FTP)
(as used for determining
compliance with the LEV
tailpipe standards, i.e.,
``conventional'' or ``on-
cycle'' FTP).
Certification test fuel
specifications (as used for
determining compliance with
the LEV standards).
Low volume manufacturer
provisions.
Limitations on the sale of
TLEV and Tier 1 vehicles in
the NTR.
Non-Core Stable Standards................. ``Off-cycle'' emissions
standards.
Supplemental Federal Test
Procedures (SFTP) (as used
for determining compliance
with these off-cycle
emission standards).
On-board diagnostic (OBD-II)
requirements.
Cold temperature carbon
monoxide (Cold CO)
requirements.
Evaporative emissions
control requirements.
Onboard refueling vapor
recovery requirements.
Reactivity adjustment
factors (RAFs) (used to
determine compliance with
LEV standards).
------------------------------------------------------------------------

[[Page 31203]]

The Core Stable Standards include:
<bullet> The TLEV, LEV, ULEV and ZEV tailpipe standards (the ``LEV
standards''),
<bullet> The fleet average NMOG standards, and
<bullet> The limitation on the sales of TLEVs and Tier 1 vehicles
in the NTR.
These requirements are all standards that EPA could not itself require
manufacturers to meet prior to MY2004 (absent manufacturer consent)
because section 202(b)(1)(C) of the Act prohibits EPA from unilaterally
imposing numerical standards as stringent as these prior to MY2004.
Since EPA could not impose these standards unilaterally, EPA does not
believe it should have authority to change these standards
unilaterally. Designating these numerical standards as Core Stable
Standards protects the manufacturers' reasonable expectations in opting
into the voluntary standards by providing an offramp should EPA change
those standards without their consent.
The Core Stable Standards also include:
<bullet> The specifications for the ``conventional'' or ``on-
cycle'' FTP, as revised,
<bullet> The certification test fuel for testing compliance with
LEV standards,
<bullet> The NMOG fleet average banking and trading program, and
<bullet> The low-volume manufacturer requirements.
These requirements are designated as Core Stable Standards because
changes to these requirements may affect the ability of manufacturers
to meet the LEV standards or the NMOG fleet average standards, or
because these requirements are directly related to those standards.
(Changes to the reactivity adjustment factors (RAFs) might also affect
the ability of manufacturers to meet the LEV and NMOG fleet average
standards, but these are designated Non-Core Stable Standards, for the
reasons discussed below.)
The on-cycle FTP, the certification test fuel, and the NMOG fleet
average banking and trading program are the means through which
compliance with the numerical standards will be determined. The on-
cycle FTP and the test fuel directly impact the ability of
manufacturers to meet the LEV standards because changes to program
elements like the FTP drive cycle, road simulation hardware, or the
blending parameters of the fuel, may translate into changes in the
emission test scores of vehicles. These test scores are themselves the
basis for pass/fail decisions with respect to the LEV standards. The
NMOG fleet average banking and trading program will allow banking and
trading of credits to give manufacturers flexibility in meeting the
fleet average NMOG standard. The banking and trading program is part of
the way that manufacturers will demonstrate compliance with the NMOG
fleet average standard. Changing this program could adversely affect a
manufacturer's ability to comply with the fleet average standard. Given
the voluntary nature of the LEV standards and the NMOG fleet average
standard, EPA believes that manufacturers are entitled to certainty not
only with respect to the standards, but also with respect to the means
by which the manufacturers' compliance with those standards will be
determined.
The final Core Stable Standard, the low volume manufacturer
provisions (including the definition of low volume manufacturer and the
relaxed phase-in schedule), directly determines the stringency of the
NMOG fleet average standards. The phase-in schedule provides
manufacturers meeting the low volume definition higher (less stringent)
NMOG fleet average standards for the initial years of the National LEV
program.
The Non-Core Stable Standards include:
<bullet> OBD II requirements,
<bullet> Cold temperature CO requirements (through
MY2000),¹⁹
---------------------------------------------------------------------------

\19\ Section 202(j)(2) of the Act requires the Administrator to
assess the need for further reductions in cold CO emissions from
MY2001 and later model year vehicles. Therefore, unlike the other
Stable Standards, EPA can change cold CO standards for MY2001 and
later model year vehicles without triggering an off-ramp.
---------------------------------------------------------------------------

<bullet> Evaporative emissions requirements, and
<bullet> Onboard refueling and vapor recovery requirements.
As described in more detail in the proposal and in the Response to
Comments document for this rule, EPA reviewed each of these
requirements and determined that it was highly unlikely that EPA would
need to change these requirements for the duration of the National LEV
program (or prior to MY2001, for cold CO requirements). With the
exception of cold CO (which EPA has a statutory obligation to revisit
for MY2001), EPA does not have statutory obligation to revise or re-
evaluate these standards for the expected duration of the National LEV
program. EPA's conclusion that these standards will not need to be
changed for the expected duration of National LEV (prior to MY2001 for
cold CO) is based on when these requirements were promulgated by EPA,
how long it would take to gather information to determine that a new
control level was appropriate, and EPA's knowledge of technology
development necessary to meet these requirements.
The Non-Core Stable Standards also include the recently promulgated
``off-cycle'' FTP standards and test procedure (Supplemental Federal
Test Procedure or SFTP). 61 FR 54852 (October 22, 1996). The ``off-
cycle'' FTP standards and SFTP (described in more detail in section
IV.B.5.a) were developed to test emissions resulting from typical
driving patterns that were not included in the test procedure that EPA
and CARB have used historically (the ``on-cycle'' FTP). Currently, the
only off-cycle standards are based on Tier 1 technology. Given the
lengthy testing and evaluation process that resulted in the off-cycle
standards and the time required to populate the fleet with vehicles
complying with the new standards and then to evaluate them for any
necessary revision of the standard, EPA does not foresee the need for
or the ability to revise the off-cycle standards and SFTP for Tier 1
vehicles for the expected duration of the National LEV program. As
discussed later in section IV.B.5.a, EPA anticipates that CARB will
adopt more stringent off-cycle standards for LEVs and ULEVs. Today's
rule is structured so that EPA can follow that change for National LEV
certification without allowing manufacturers to opt out of National
LEV. EPA intends to take comment on additional SFTP issues in the
SNPRM.
Finally, EPA has designated reactivity adjustment factors (RAFs) as
Non-Core Stable Standards. RAFs are used to adjust vehicle emission
test results to reflect differences in the impact on ozone formation
between alternative-fueled vehicles and a vehicle fueled with
conventional gasoline. (See discussion below in section IV.B.5.d.)
Including RAFs in the National LEV program puts two competing policy
concerns before the Agency. RAFs play a role in setting the overall
ability of manufacturers to meet the TLEV, LEV and ULEV tailpipe
standards, which is an important issue for the auto manufacturers in
deciding whether to opt into National LEV. One of the principles of
National LEV has been that EPA should not have unilateral authority to
change the tailpipe standards and related requirements because they are
voluntary standards. Following this principle, RAFs should be part of
the Core Stable Standards. EPA is concerned, however, that locking in
the RAFs for the duration of National LEV places more weight on them
than is warranted by the current scientific evidence. CARB set RAFs
based on the

[[Page 31204]]

best scientific evidence available, but recognized the need for further
investigation. California will be analyzing its current RAFs and
possibly revising the values. California has already set up a
scientific review panel, and the current RAFs apply only through
MY2000. California's recognition that its RAFs may need to be modified
weighs against casting the RAFs in concrete in National LEV and
supports placing them in the Non-Core Stable Standards. EPA believes an
appropriate compromise between the need for stability and the evolving
nature of RAFs is to include RAFs in the Non-Core Stable Standards, but
include a cap of 1.0 for all California Phase 2 RFG RAFs.
Placing RAFs in the Non-Core Stable Standards means that, to
harmonize the California and federal requirements, EPA can modify any
RAF value that California decides to change. This provides the Agency
with the necessary flexibility to address any uncertainty associated
with RAFs, but at the same time does not allow EPA to change RAFs
unilaterally without triggering an offramp. The limitation on changes
to the California Phase 2 RFG RAFs provides assurances to the
manufacturers that the stringency of the National LEV program will not
change dramatically for the gasoline-powered vehicles--the vast
majority of vehicle types covered by the program. The cap of 1.0 was
selected because it sets the maximum stringency from a change in RAFs
for California Phase 2 RFG at what the numerical emission levels would
be without RAFs. If California sets a RAF greater than 1.0 for
California Phase 2 RFG, EPA could amend the National LEV regulations to
provide for a RAF of 1.0 (without triggering an offramp). EPA may make
any harmonizing changes to RAFs for alternatively-fueled vehicles if
California modifies the existing RAFs, but this is expected to have a
minimal impact on the program overall due to the percentage of the
national fleet that is expected to be alternative-fueled vehicles.
(ii) Changes to Stable Standards. EPA can make certain types of
changes to Stable Standards without giving manufacturers the ability to
opt out of National LEV. EPA can make changes to which manufacturers do
not object. In addition, EPA can make any of the following types of
changes to Non-Core Stable Standards without triggering an off-ramp:
<bullet> Changes that do not increase the stringency of the
standard,
<bullet> Changes that harmonize the standard with the comparable
California standard, and
<bullet> Changes applicable after MY2006.
First, a manufacturer cannot opt out of National LEV based on a
change to any Core Stable Standard unless the manufacturer has provided
written comment during rulemaking on that change stating that it is
sufficient to trigger a National LEV offramp. EPA believes this is
appropriate because it is not necessary to provide an offramp
opportunity for a change to which the manufacturer has no objection.
This is the only type of change EPA can make to a Core Stable Standard
without allowing manufacturers to opt out of National LEV.
Second, EPA can make technical changes and other revisions that do
not increase the overall stringency of a Non-Core Stable Standard,
without triggering an offramp. EPA commonly amends its emission control
program regulations to address technical and administrative concerns
raised by program implementation without affecting overall stringency.
Allowing manufacturers to opt out of the program for such changes would
endanger the stability of the National LEV program. EPA anticipates
that the flexibility to make technical changes that do not impact on
stringency will be appropriate for each of the designated Non-Core
Stable Standards. However, such amendments are more likely for
regulations like those of the off-cycle emission program, or the
evaporative emissions and onboard refueling vapor recovery program
(ORVR), which are recently promulgated, under review as part of ongoing
EPA streamlining efforts, or both.
Third, EPA may change any Non-Core Stable Standard to harmonize
with the comparable California standard or requirement, even if the
revision would increase the stringency of the standard or requirement,
without triggering an offramp. This policy is consistent with the goal
of harmonizing the federal and California programs. The ability to
harmonize with California without triggering an offramp will be
critical in particular for the off-cycle standards and SFTP (discussed
in detail in section IV.B.5.a below), the OBD program, and RAFs. The
ability to harmonize with California without triggering an off-ramp
provides a useful safety valve that helps improve the stability of
National LEV. If changes to an existing standard would produce
significant environmental benefits as a result of currently
unanticipated technological or other developments, based on
California's past approach to motor vehicle regulation and its
continuing need for air quality improvements, EPA believes California
is likely to make those changes. EPA can then achieve the same
environmental gains by amending its regulations to harmonize with
California.
Fourth, EPA can make changes to the Non-Core Stable Standards
without triggering an offramp if the change is effective after MY2006.
By MY2006, EPA expects that federal Tier 2 tailpipe standards will be
adopted and effective, and that the National LEV standards will be
replaced by the Tier 2 standards. In the event that the National LEV
program continues beyond MY2006, EPA cannot predict with a reasonable
degree of accuracy whether it expects to make revisions to the Non-Core
Stable Standards for an unlimited period after that date. For this
reason, EPA does not believe it would be appropriate to continue the
offramp opportunity for changes to Non-Core Stable Standards
indefinitely. EPA chose MY2006 as the end date for the Non-Core Stable
Standards offramp to provide manufacturers with increased regulatory
stability for the maximum intended duration of the National LEV
program.
Finally, EPA can make changes to, or promulgate, any federal motor
vehicle requirements that are not designated in today's regulations as
Stable Standards, without triggering an offramp opportunity. For
example, EPA believes it is essential to guarantee attainment of the
stringency of the requirements already in force (as opposed to
increasing the stringency of these current requirements) without
providing manufacturers the opportunity to opt out of the National LEV
program. Thus, the emissions durability program and defeat device
requirements, which are designed to ensure that vehicles actually
comply with the emissions standards over their useful lives, are not
Stable Standards. See the Response to Comments document for this rule
and the NPRM (60 FR 52744 (col. 3)). Similarly, an offramp would not be
triggered by EPA's adoption of a new requirement for motor vehicles,
such as any air toxics regulations.
b. Opt-Out Procedures. As proposed, to opt out of the National LEV
program, a manufacturer would follow the same notification procedure
used to opt in, additionally specifying the condition allowing opt-out
and providing supporting evidence for the applicability of that
condition. A manufacturer also would have to exercise its opt-out
option within the time limits discussed below.
Manufacturers generally would have to decide whether to exercise
their opt-out option within 180 days of the occurrence of the condition
triggering

[[Page 31205]]

opt-out.²⁰ If one manufacturer sends EPA an opt-out
notification, however, the time limit for other manufacturers to opt
out is extended by 30 days beyond the 180 day period. For opt-outs
based on an EPA change to a Stable Standard, EPA would have an
opportunity to prevent the opt-out from coming into effect by
withdrawing the change to the Stable Standard before the effective date
of the opt-out (discussed below).
---------------------------------------------------------------------------

\20\ Where the offramp is an EPA change to a Stable Standard, a
manufacturer would have to exercise its opt-out option within 180
days of EPA's publication of the change in the Federal Register.
---------------------------------------------------------------------------

Setting a time limit for opt-out provides an important measure of
certainty and program stability by ensuring that if manufacturers
declined to opt out of the program despite the occurrence of an
offramp, all parties could rely on the program to continue.
Manufacturers opposed this approach, expressing concern that regardless
of whether a manufacturer individually believes the triggering event
sufficient to opt out, manufacturers are likely to opt out upon the
occurrence of any offramp for fear that one or more of their
competitors will opt out. Since manufacturers believe they might be at
a significant competitive disadvantage if they were subject to National
LEV while other manufacturers were not, all manufacturers would have to
opt out to protect themselves against that eventuality.
By allowing manufacturers an extended time period to opt out if
another manufacturer opts out, EPA is removing the incentive for any
manufacturer to exercise a protective opt-out. Instead, manufacturers
can wait to see if any other manufacturer opts out and then decide at
that time whether they want to exit the program. If no manufacturer
opts out within the specified time period, the program would remain in
place. The extended time for opt-out enhances program stability by
removing an incentive for manufacturers to opt out. Moreover, it
neither creates a new opportunity to opt out of the program nor reduces
program stability, because it only arises if an opt-out has already
occurred.
For opt-outs based on an EPA change to a Stable Standard, EPA has
further enhanced program stability by providing an opportunity for EPA
to withdraw a change to a Stable Standard if such a change in fact
results in an opt-out. If EPA retracts a change on which an opt-out is
based, this would invalidate the offramp and prevent the opt-out from
coming into effect. EPA would have to withdraw the change before the
effective date of the opt-out (discussed below). The need for such a
withdrawal might arise in a couple of possible circumstances. In
objecting to a proposed change to a Stable Standard, manufacturers only
have to indicate that they believe the change is sufficient to allow an
opt-out; it would not make sense to try to force manufacturers to make
a final decision as to whether they would actually opt-out before the
change is even finalized. Thus, a manufacturer's objection to a
proposed change would not necessarily indicate that the manufacturer
would opt out of National LEV based on the change, and EPA might decide
it is reasonable to go ahead with the change despite an objection.
Also, EPA may have reason to believe that it has adequately modified a
proposed change to accommodate objections, but a manufacturer might
still choose to opt out. Providing EPA an opportunity to withdraw the
change enhances program stability by protecting against such
possibilities.
Within sixty days of an opt-out notification, EPA is required to
determine whether or not the alleged condition allowing opt-out has
occurred and therefore whether the opt-out is valid. If the basis for
an opt-out were a change to a Stable Standard, EPA could find that the
opt-out is valid provided that EPA did not withdraw the change before
the effective date of the opt-out. If EPA withdrew the change in time,
concurrently with the withdrawal EPA could then find that the opt-out
was not valid. The determination of whether the opt-out was valid would
not be subject to notice and comment, but it would be a nationally
applicable final agency action, subject to judicial review under
section 307(b) of the Act. EPA intends to publish any such
determination in the Federal Register. If EPA were to agree that an
opt-out was valid, that determination would be a final agency action
authorizing the opt-out. Thus, even if the reviewing court subsequently
overturned EPA's decision, the manufacturer could not be held liable
for its failure to comply with the National LEV requirements prior to
the court's decision.
If EPA were to determine that an opt-out was invalid and the
manufacturer decided to challenge that determination in court, the
manufacturer would be on notice that its failure to comply with
National LEV in the interim would be at the manufacturer's own risk.
During the pendency of the manufacturer's action challenging EPA's
determination, the manufacturer would be able to certify Tier 1
vehicles lawfully.²¹ If the reviewing court ultimately
agreed with EPA's determination that the opt-out was invalid, however,
then the manufacturer was always subject to the National LEV
requirements and would be liable in an enforcement action to the extent
that it violated National LEV regulations during the pendency of the
court action. For example, a manufacturer would be liable for any
exceedance of the NMOG fleet average requirement during the pendency of
the court action.²² If the reviewing court ultimately agreed
with the manufacturer that the opt-out was valid, then the manufacturer
would not be held to National LEV program requirements from the
effective date of its opt-out notification.
---------------------------------------------------------------------------

\21\ The National LEV regulations generally allow manufacturers
to certify vehicles to Tier 1 standards as one of the five vehicle
emissions categories. However, sale of Tier 1 vehicles and TLEVs in
the OTR from MY2001 on is limited to those engine families that are
certified and offered for sale in California in the same model year,
and sales of these vehicles industry-wide in the NTR must not exceed
a cap of five percent, as discussed below in section IV.B.4. In the
event of a contested opt-out, manufacturers would not have to comply
with these limitations while the disposition of the opt-out remained
unresolved, although manufacturers would ultimately be liable for
violation of some provisions if a court were to find the opt-out
invalid.
\22\ The manufacturer would also remain liable for violation of
the limitation on sales of Tier 1 vehicles and TLEVs where the same
engine families were not certified and offered for sale in
California. However, the manufacturer would not be liable for any
exceedance of the five percent cap and the manufacturer's vehicles
would not be counted towards the industry-wide cap. This exemption
is driven by a practical implementation concern. In a situation
where one manufacturer had opted out of National LEV, it would be
very difficult to determine other manufacturers' liability under the
five percent cap in any equitable manner if the cap applied to the
manufacturer that had opted out.
---------------------------------------------------------------------------

An EPA determination of the validity of an opt-out will allow for
quick judicial resolution of any dispute over an opt-out and provide
compliance guidance in the interim. Occurrence of an opt-out is likely
to call into question whether the National LEV program will continue,
which in part will depend on the validity of that opt-out. All parties
involved (i.e., EPA, the states, the manufacturer opting out, and the
other manufacturers) would need both of those issues resolved as soon
as possible.
Providing for EPA to make a determination regarding the validity of
an opt-out ensures that any dispute over an opt-out can be resolved in
the United States Court of Appeals for the District of Columbia.
Judicial review would be based on the Agency's administrative record.
Publication of EPA's determination in the Federal Register would start
a 60-day period for filing a petition for review of EPA's action under
section 307(b), thereby facilitating

[[Page 31206]]

early identification and faster resolution of opt-out challenges. This
approach provides greater certainty to both the OTC States and
manufacturers regarding the status of the National LEV requirements in
the interim. An EPA determination that an opt-out is valid provides the
manufacturer with a safe harbor, which allows it to stop complying with
National LEV without legal risk. Even if the opt-out is successfully
challenged, the manufacturer will not be liable for noncompliance with
National LEV during the period prior to the court's decision. Also, OTC
States are made aware that EPA believes that the opt-out is valid, and
those states without a CAL LEV program as a backstop will have more
incentive to adopt CAL LEV in a timely manner if the state wishes to
continue to control emissions from motor vehicles. If EPA determines an
opt-out is invalid, the manufacturer will know the risk it would run by
ceasing compliance.
If EPA were not required to make a determination on the validity of
an opt-out, the only ways to challenge an opt-out would be through a
declaratory judgment action or an enforcement action brought in the
district court. It is unclear whether a court would grant a motion for
a declaratory judgment on this issue. An enforcement action might take
several years to ripen, assuming that an action could not be brought
until the manufacturer violated the fleet average NMOG requirement and
then failed to make up the debits within the following model year.
Moreover, a district court opinion would probably be appealed to the
court of appeals. Overall, this approach could easily entail anywhere
from two to five years of uncertainty regarding whether the opt out was
valid, and whether National LEV would remain in effect. In addition,
litigation in the district courts is resource intensive, potentially
involving extensive discovery, and may produce inconsistent results
across different courts. In the absence of an EPA determination, there
is an additional disadvantage for a manufacturer. To find out whether
an opt out is valid, the manufacturer probably would have to stop
complying with National LEV and put itself at risk for penalties in
enforcement actions, prior to obtaining a judicial ruling on the
validity of the opt-out.
c. Effective Date of Opt-Out. Once EPA or the reviewing court
determines that an opt-out is valid, the effective date of the opt-out
will depend on the condition authorizing the opt-out, unless a
manufacturer specifies a later effective date than provided in the
regulations. First, if an OTC State were to adopt a state motor vehicle
program under CAA section 177 in a way that violated a commitment the
state had made, an opt-out would be effective for the next model
year.²³ The ``next'' model year is the model year named for
the calendar year following the calendar year in which the state
violated the commitment. For example, if an OTC State violated a
commitment in 1999, the manufacturer's opt-out would be effective for
MY2000. Second, if EPA were to modify one of the Core Stable Standards
over the objection of a manufacturer, an opt-out would be effective
starting the model year that includes January 1 of the second calendar
year following the calendar year in which the manufacturer opted out.
(E.g., if a manufacturer opted out on July 1, 1999, the opt-out would
be effective starting with MY2001). However, if the first model year in
which manufacturers would have to comply with the changed Core Stable
Standard is earlier, the opt-out would be effective as of that earlier
date. Third, if EPA were to modify one of the Non-Core Stable Standards
in a way that would provide an offramp, the opt-out would be effective
for the first model year to which the modified standard applied.
However, for opt-outs based on changes to either a Core or Non-Core
Stable Standard, if EPA withdraws the change to the Stable Standard
before the date that the opt-out would have become effective, the opt-
out will not become effective. This approach balances achieving
emissions reductions, minimizing burden on manufacturers, and providing
incentives for the OTC States and EPA to keep their
commitments.²⁴
---------------------------------------------------------------------------

\23\ This decision regarding violation of OTC State commitments
is not incorporated in the regulations that EPA is promulgating
today, but will be reflected in a later rule that finalizes the OTC
State commitment provisions of the program.
\24\ In the supplemental notice of proposed rulemaking, EPA may
propose to refine or modify this approach in light of the proposed
provisions of OTC state commitments. In particular, today's final
rule does not address the possibility of providing leadtime before
manufacturers become subject to any backstop ZEV mandates.
---------------------------------------------------------------------------

Making opt-out effective the next model year after an OTC State
violates a commitment regarding a section 177 program is consistent
with the basic agreement underlying the National LEV program; it also
increases the program's stability. National LEV is founded on the
concept of a voluntary agreement between the OTC States and the
automobile manufacturers. The heart of this agreement will be that the
manufacturers will comply with National LEV, in exchange for the OTC
States not requiring compliance with a CAL LEV program. Due to the
inherent legal constraints on attempting to bind a sovereign state to
future action, the manufacturers are limited in their ability to assure
through mechanisms enforceable in court that the OTC States could not
subsequently require compliance with a CAL LEV program. Thus, it is
important that the structure of the National LEV program provide strong
practical incentives to the OTC States to fulfill their commitments
under the agreement and provide recourse to the manufacturers if the
OTC States violate the agreement. Allowing manufacturers to opt out
effective the next model year after an OTC State violates a commitment
regarding a section 177 program provides a strong disincentive for a
state to take such an action. Assuming that a CAL LEV program is not in
place as a backstop in some OTC States, those states without backstops
would receive Tier 1 vehicles for over two years, given section 177's
lead-time requirements, and all states in the OTR would face higher
levels of emissions from migration and transport. This somewhat severe
result is appropriate as an incentive to fulfill one of the key
commitments underlying the National LEV program. Manufacturers are
entitled to opt out of National LEV quickly, once the fundamental basis
of the agreement has been violated.
The timing of the effective dates of opt-outs based on EPA changes
to Core or Non-Core Stable Standards is designed to be consistent with
elements of the fundamental agreement underlying the National LEV
program while enhancing the stability of the program. Manufacturers
commented that EPA's original proposal would not give them sufficient
time to evaluate the consequences of a change in a Stable Standard.
They also argued they would be less likely to opt out initially upon
such a change, if they could opt out later if they subsequently found
the consequences of the change too burdensome. EPA believes that an
unlimited time for opt-out introduces far too much uncertainty into the
National LEV program. Thus, the approach adopted in this rule gives
manufacturers more time to decide whether to opt out, providing 180
rather than 60 days, but not unlimited time. The approach also enhances
program stability by providing EPA an opportunity to withdraw any
change on which manufacturers have based an opt-out, and thereby to
remove the offramp.
The slightly different effective dates for opt-outs based on
changes to Core and Non-Core Stable Standards

[[Page 31207]]

recognize that these two sets of Stable Standards play different roles
in relation to the National LEV program. For changes to the Core Stable
Standards, it is appropriate to make an opt-out effective quickly,
either as soon as EPA has had the opportunity to withdraw its change
but has declined to do so, or even sooner if manufacturers would
actually have to comply with the change before that date. The Core
Stable Standards are the standards the manufacturers have volunteered
to meet that EPA could not have imposed. These are the National LEV
exhaust emissions standards, the fleet average NMOG standards, the
banking and trading provisions that implement these standards, and
certain other related requirements. The Core Stable Standards are
discussed more fully in sections IV.A.2.a.(2) and IV.B. of this rule.
If EPA were to modify any of these requirements over the manufacturers'
objections, National LEV would require the manufacturers to comply with
something that EPA did not have the authority to mandate and that the
manufacturer had never volunteered to meet. Thus, the effective date
for opt-outs based on changes to Core Stable Standards ensures that
manufacturers can exit the program as soon as EPA has had the chance to
prevent the opt-out by revoking the change, and even sooner, if
necessary to avoid forcing compliance with a requirement that EPA could
not have imposed absent National LEV. This protects the reasonable
expectations of the manufacturers volunteering for the National LEV
program. It also provides an additional incentive for EPA not to make
changes to Core Stable Standards that might allow an opt-out because
the opt-out could become effective in a time-frame shorter than the
time required for OTC States without backstops to adopt and implement a
CAL LEV program.
For opt-outs based on changes to Non-Core Stable Standards, EPA is
finalizing the proposed approach of delaying the effective date of an
opt-out until the first model year that manufacturers must comply with
the changed standard. Here too, EPA would have the opportunity to
withdraw the change prior to the effective date of the opt-out. This
approach protects emissions reductions without increasing
manufacturers' burdens or reducing program stability. EPA has
designated certain standards as Non-Core Stable Standards to give the
manufacturers some assurance regarding the stability of the federal
motor vehicle requirements as an additional incentive to volunteer for
the National LEV program. Although stability of the Non-Core Stable
Standards is one component of the National LEV program, it is not the
central exchange on which a voluntary agreement would be founded. To
the extent that a change in a Non-Core Stable Standard would not apply
until some future date, delaying the effective date of an opt-out until
that date would protect the OTC States from increased emissions caused
by an event outside of their control and would give those states
without a backstop some time to adopt a CAL LEV program. Yet the
manufacturers would not be burdened by this approach because as soon as
they were subject to the revised standard they would no longer have to
comply with National LEV. The only incentive for EPA to increase the
stringency of a Non-Core Stable Standard over a manufacturer's
objection, other than to harmonize with California, would be if the
overall emission reductions produced were greater than the emission
reductions from National LEV. Thus, while delaying the opt-out
effective date provides somewhat less of a disincentive for EPA to
trigger an offramp, this is appropriate, given that EPA would only take
such action if it would produce greater emissions reductions than would
National LEV.
d. Programs in Effect as a Result of Opt-Out. If a manufacturer
were to opt out of the National LEV program, when that opt-out became
effective the manufacturer would be subject to all standards that would
apply if National LEV did not exist. The federal Tier 1 tailpipe
emissions and related standards would apply, as would any applicable
state standards promulgated and in effect under CAA section 177. EPA
will address this issue further in the SNPRM on OTC State commitments.
e. Opt-Out By States. EPA received a couple of comments from oil
industry representatives asserting that all individual states should
have the opportunity to opt out of National LEV. EPA believes that an
approach allowing individual states to reject National LEV (except to
exercise section 177 rights) would be unnecessary, impracticable,
costly, and counter-productive to the goal of achieving clean air
nationwide. EPA also notes that no state requested such a right, even
though all states had the opportunity to comment on National LEV during
the public comment period and EPA has conducted extensive outreach
efforts to communicate with states about this program.
First, EPA believes that states will not want to opt out because
they will receive important benefits from National LEV. As described
above in section III.B, numerous areas around the country need
reductions in smog-forming pollutants and particulate matter. Even
those areas that do not have smog or PM problems will benefit from
reductions in emissions of carcinogens and other toxic air pollutants.
Second, the commenter that suggested an opt-out process for states
was motivated by concerns that National LEV might require new, costly
fuel controls. As described more fully below in section IV.B.7.,
today's regulations clarify that National LEV vehicles will not require
new fuel controls.
Third, giving a state the right to opt out of National LEV would
allow a state to require manufacturers to produce dirtier vehicles than
the manufacturers want to produce--something the CAA prohibits both
states and the federal government from doing, and that would be a
perverse policy. Under the CAA, a manufacturer has always had the legal
option of producing a vehicle that is cleaner than required--something
the manufacturer might do because it believes that the public favors
cleaner cars or because it is more cost-effective to manufacture
vehicles that meet both California and federal standards. The commenter
that suggested a state opt-out has not explained how such an option is
allowed by the CAA, nor has it shown sufficient policy justification
for limiting a manufacturer's right to make cleaner cars.
Fourth, establishing a mechanism to allow individual states to
reject air quality benefits by ``opting out'' of a national motor
vehicle program would run counter to the Congressionally-established
national approach to regulating motor vehicles. The CAA provides that
manufacturers would need to meet, at most, two sets of motor vehicle
standards nationwide. Congress recognized the substantial difficulties
and costs incurred by building and certifying vehicles to meet a
multiplicity of different standards and the burdens distribution of
those vehicles to different states would place on vehicle distribution
and sales networks. Manufacturers are free to build vehicles with
tighter emissions controls than required by law, and states and federal
agencies have no ability to stop manufacturers from doing so.
Finally, if there were a legal mechanism to allow an individual
state to opt out of National LEV, such opt-outs could substantially
increase costs for manufacturers, dealers, and ultimately consumers
both in opt-out states and others. If an individual state could reject
National LEV and require manufacturers to build to looser standards,
even if those vehicles were less expensive to produce, there is no

[[Page 31208]]

guarantee that manufacturers would supply such vehicles at lower prices
in that state. EPA understands that as a national industry, the
automotive industry largely redistributes any difference in costs among
states so that the same model costs about the same in all states.
Moreover, such dirtier vehicles might actually cost more to produce and
distribute, given that building vehicles to a different standard would
require specialized manufacture and distribution of vehicles. The
manufacturers support National LEV as a more cost-effective approach to
achieve emission reductions, but cost-savings from nationwide standards
could be eroded by requiring a third set of standards in a few states.
If manufacturers did not redistribute those higher costs across all of
their vehicles, a state that had opted out of National LEV might
actually experience higher costs for new motor vehicles. Thus,
implementation of National LEV as a 49-state program is the legal and
cost-effective approach to achieving cleaner air through cleaner new
motor vehicles.
3. Duration of Program
This rule uses MY1997 as a placeholder for the start date of the
program. As explained above (see n. 17), EPA believes that MY1997 is
not a reasonable start date and will take comment in the SNPRM on the
appropriate start date.²⁵
---------------------------------------------------------------------------

\25\ Auto manufacturers had requested several adjustments to the
National LEV program to address concerns regarding compliance for
MY1997, given the abbreviated time frame for program start up. As
discussed above (see n. 17) EPA is using MY1997 as a placeholder for
the actual start date of the program, even though EPA now believes
that start date is not realistic. Rather than include special
provisions for MY1997, EPA will take comment in the SNPRM on the
appropriate start date.
---------------------------------------------------------------------------

Under today's rule, the National LEV program will continue until
EPA promulgates a mandatory national tailpipe program that is at least
equivalent in stringency to the National LEV program. If EPA
promulgates such a mandatory tailpipe program, then the National LEV
program will end in the first model year that the mandatory program is
at least as stringent on a fleetwide basis as National LEV.
EPA proposed that the National LEV program would stay in place
through MY2003 and possibly through MY2005, depending on whether, by a
specified date, EPA had signed a final rule establishing new, mandatory
tailpipe standards (``Tier 2 standards'') at least as stringent as
National LEV. Under the proposed regulations, if EPA did not issue the
specified regulations on time, then National LEV would end in MY2003.
In that event, manufacturers would be required to meet federal Tier 1
standards starting in MY2004 in any state where California or OTC LEV
standards were not in effect. EPA also took comment on various other
possible approaches, including having the National LEV program extend
until the first model year in which manufacturers must meet new,
mandatory tailpipe standards at least as stringent as National LEV.
EPA received several comments expressing serious concern regarding
the proposal that would allow the National LEV program to end after
MY2003 if EPA did not promulgate Tier 2 regulations that were more
stringent than National LEV. These commenters noted that the proposal
would provide insufficient assurance of future emissions reductions and
would hinder State efforts to reduce ozone pollution.
EPA agrees with these comments and has decided not to adopt the
proposed approach. EPA believes it is unacceptable to set up a program
that has the country take a step backward environmentally if the Agency
fails to act by a future deadline. The proposed approach could cause a
reversion to Tier 1 standards beginning in MY2004, which would cause
considerable emission increases throughout the country.
The final regulations require that the National LEV program stay in
effect until a mandatory federal program is in effect that is
equivalent or more stringent. This approach will provide greater
assurance that vehicles manufactured in or after MY2004 will not create
greater pollution than those manufactured prior to MY2004. It will
therefore reduce the considerable uncertainty that the proposed
approach would have created regarding emissions from vehicles after
MY2004.
Though some commenters believe that the proposed approach would
provide EPA with greater incentive to promulgate standards by December
15, 2000, incentive is not the same as assurance. Promulgation of Tier
2 standards by December 15, 2000, is not a certainty. Section 202(i) of
the Act requires several actions by EPA prior to promulgation of Tier 2
standards. EPA must, for example, complete a report to Congress and
must make specific determinations discussed in section 202(i). EPA has
not taken these actions at this time. Until such time as those
determinations are made, there can be no certainty that Tier 2
standards will actually be promulgated, or that such standards will be
equivalent or more stringent than National LEV standards. Moreover, the
proposed approach would stake the continued reduction of motor vehicle
emissions on the prospect of EPA completing its Tier 2 process by
December 15, 2000. Although EPA intends to continue to work diligently
on its Tier 2 process, there are too many possible occurrences that are
out of EPA's control for EPA to guarantee completion of the process by
that date. Therefore, to allow for more certainty in the National LEV
program, EPA is promulgating regulations that allow the program to
continue until the first model year in which an equivalent or more
stringent federal program is implemented and applicable to new LDVs and
LLDTs.
Some commenters favored the proposed approach because they assumed
that the OTC States' commitments regarding State adoption of section
177 programs would last for the duration of National LEV. These
commenters wanted a more definite end to the OTC State commitments than
would be provided by having the OTC State commitments last for the
duration of National LEV as contained in this rule. EPA believes the
best way to accommodate this concern is to set a separate end date for
the OTC State commitments. EPA will take comment on the appropriate end
date for OTC State commitments in the SNPRM.

B. National LEV Voluntary Tailpipe and Related Standards and Phase-In

Today's final rule adopts the proposed National LEV exhaust
emission standards for LDVs and LLDTs.²⁶ The standards are
closely patterned after the California LEV emission standards, and they
include exhaust emission standards applicable to individual vehicles as
well as a set of fleet average NMOG standards.
---------------------------------------------------------------------------

\26\ The federal definitions of ``light-duty vehicle'' and
``light light-duty truck'' (40 CFR 86.094-2) correspond exactly to
the California definitions of ``passenger car'' and ``light-duty
truck,'' respectively. In addition, the federal light light-duty
truck and California light-duty truck categories are each divided
into two subcategories based on identical ranges of loaded vehicle
weight. The alignment of these definitions allows the California
emission standards to be applied directly to the corresponding
federal vehicle certification categories.
---------------------------------------------------------------------------

Once manufacturers have opted into the National LEV program and EPA
has found the program to be in effect, manufacturers will be required
to certify each LDV and LLDT engine family to one of five ``vehicle
emission categories,'' each of which has a unique set of emission
standards (described below). The five vehicle emission categories, in
order of increasing stringency, are the federal Tier 1 standards,
TLEVs, LEVs, ULEVs, and ZEVs. The Tier 1 category includes the

[[Page 31209]]

federal standards for exhaust emissions of NMHC, CO, NO<INF>X</INF>,
and PM. The four remaining categories (the ``LEV'' categories) include
standards for the same pollutants, as well as for formaldehyde.
In addition to meeting the exhaust standards for each emission
category, manufacturers must also comply with fleet average NMOG
standards (described more fully in section IV.B.3., below). Separate
standards apply to the LDVs and LLDTs, and compliance is based on the
number of vehicles produced and offered for sale in each of the five
emission categories, together with the NMOG standard for that category.
NMOG averages first take effect in the OTC States in
MY1997,²⁷ and they decline (become more stringent) until
stabilizing for MY2001 and beyond. Beginning in MY2001, manufacturers
must demonstrate compliance with the same NMOG fleet averages both in
the OTC States and in the 37 States outside the OTC States and
California. Manufacturers are allowed, but not required, to introduce
TLEVs, LEVs, ULEVs, and ZEVs outside the OTR and California prior to
MY2001. However, only vehicles subject to the National LEV program sold
in the OTR will be counted towards a manufacturer's fleet average NMOG
calculation during the phase-in period in the OTR.
---------------------------------------------------------------------------

\27\ MY1997 is used in this rule as a placeholder for the actual
start date. See n. 17 above.
---------------------------------------------------------------------------

The exhaust emission standards and fleet average NMOG requirements,
as well as other regulatory elements of the National LEV program, are
contained in a new Code of Federal Regulations (CFR) subpart (subpart R
of title 40, part 86).
1. Exhaust Emission Standards for Categories of NLEVs
This section discusses the exhaust emission standards that NLEVs
must meet. In addition to the voluntary National LEV exhaust standards
that are derived from the California LEV program, manufacturers of
NLEVs must also demonstrate compliance with a few mandatory federal
exhaust standards that have no counterpart in the California LEV
program.²⁸ Both types of standards are discussed here.
---------------------------------------------------------------------------

\28\ Participation in the voluntary National LEV program does
not relieve manufacturers of their obligation to meet the mandatory
federal exhaust emission standards. The core of the mandatory
federal exhaust standards are the set of Tier 1 standards, plus
selected pre-Tier 1 (``Tier 0'') standards that Congress let stand
in the 1990 CAA Amendments. Most of these mandatory federal
standards have analogues in the National LEV standards, and for each
of these, the voluntary National LEV standard is of equal or greater
stringency. Certification of a vehicle to the voluntary standards
therefore also demonstrates compliance with the analogous mandatory
standards. (For testing purposes, the National LEV standard may be
described as ``replacing'' the analogous federal standard, although
the federal standard technically still applies.) For those few
federal exhaust standards that have no National LEV counterpart
(discussed below), manufacturers must also demonstrate compliance of
NLEVs with those standards.
---------------------------------------------------------------------------

a. Certification Standards. This final rule establishes separate
sets of emission standards for LDVs and for LLDTs. Current federal
regulations divide the LDT vehicle category into two subcategories,
each of which is further divided into subcategories. LLDTs are those
LDTs less than or equal to 6000 lbs GVWR, and heavy light-duty trucks
(HLDTs) are those LDTs greater than 6000 lbs but less than or equal to
8500 lbs GVWR. The National LEV program contains standards only for the
LLDTs, therefore the HLDT category will continue to be certified to the
applicable Tier 1 standards. Emission standards that apply to LLDTs are
divided into two sets. One set, which is identical to the standards for
LDVs, applies to LLDTs up through 3750 lbs loaded vehicle weight (LVW),
and another slightly less stringent set applies to LLDTs between 3750
and 5750 lbs LVW. Also consistent with current federal and California
regulations, separate sets of standards are promulgated for the
vehicle's intermediate useful life (five years or 50,000 miles,
whichever occurs first) and full useful life (10 years or 100,000
miles, whichever occurs first).
As noted above, there are five vehicle emission categories for
vehicles under the voluntary National LEV program, ranging in
stringency from the current federal Tier 1 vehicles to ZEVs. The Tier 1
standards have already been codified in the current federal regulations
with a phase-in schedule that required 100 percent of MY1996 LDVs and
LLDTs to meet the Tier 1 standards. The TLEV, LEV, ULEV and ZEV
certification standards for LDVs and LLDTs up through 3750 lbs LVW are
shown in Table 2 and those for LLDTs from 3750 to 5750 lbs LVW are
shown in Table 3. As noted below, the particulate standards adopted
specifically for National LEV apply only to diesel vehicles. Non-diesel
vehicles will be subject to the federal Tier 1 PM standards, as
described below.
The federal exhaust standards with no California counterparts are
(1) the Tier 0 total hydrocarbon (THC) standard for all vehicles, (2)
the Tier 1 50,000-mile PM standard, and (3) the 100,000-mile PM
standard for non-diesel vehicles. The California program contains
neither a THC standard nor a 50,000-mile PM standard, and the
California 100,000-mile PM standard applies only to diesel vehicles.
All NLEVs must comply with the federal THC emissions standard. EPA has
adopted the California 100,000-mile diesel PM standard for NLEVs, but,
to meet the requirements of the mandatory federal program, diesel NLEVs
must also certify to the Tier 1 50,000-mile PM standard. Non-diesel
NLEVs must meet the federal Tier 1 50,000-mile and 100,000-mile PM
standards.
Compliance with the Tier 0 THC standard should not result in
testing beyond that required for LEV standards. The current federal
program provides for a reduced data reporting burden, including the use
of engineering justifications, in certain cases where compliance with a
mandatory standard for a given vehicle or emission control technology
is clear cut. Such is the case for current-technology gasoline vehicles
when demonstrating compliance with the Tier 1 PM standards and for most
current technology vehicles whose Tier 1 NMHC values demonstrate
compliance with the THC standards. The Agency anticipates that
manufacturers will reduce their compliance burden by taking advantage
of these same data reporting options when certifying NLEVs.

[[Page 31210]]

Table 2.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LDVs and LLDTs to 3750 Lbs LVW
----------------------------------------------------------------------------------------------------------------
Vehicle PM¹
Vehicle useful life (miles) emission NMOG CO NO<INF>X HCHO (diesel
category only)
----------------------------------------------------------------------------------------------------------------
50,000........................ TLEV 0.125 3.4 0.4 0.015 ...........
LEV 0.075 3.4 0.2 0.015 ...........
ULEV 0.040 1.7 0.2 0.008 ...........
100,000....................... TLEV 0.156 4.2 0.6 0.018 0.08
LEV 0.090 4.2 0.3 0.018 0.08
ULEV 0.055 2.1 0.3 0.011 0.04
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.

Table 3.--National LEV Intermediate and Full Useful Life Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750
Lbs LVW
----------------------------------------------------------------------------------------------------------------
Vehicle PM\¹\
Vehicle useful life (miles) emission NMOG CO NO<INF>X HCHO (diesel
category only)
----------------------------------------------------------------------------------------------------------------
50,000........................ TLEV 0.160 4.4 0.7 0.018 ...........
LEV 0.100 4.4 0.4 0.018 ...........
ULEV 0.050 2.2 0.4 0.009 ...........
100,000....................... TLEV 0.200 5.5 0.9 0.023 0.08
LEV 0.130 5.5 0.5 0.023 0.08
ULEV 0.070 2.8 0.5 0.013 0.04
----------------------------------------------------------------------------------------------------------------
\1\ See the discussion in this section IV.B.1.a regarding the applicability of PM standards.

The voluntary standards also include two-tiered NMOG standards for
flexible-fuel and dual-fuel vehicles, based on California's approach to
standards for these vehicle types.²⁹ Flexible- and dual-fuel
vehicles have to certify to the applicable standards both on the
alternative fuel and on gasoline. When certifying on an alternative
fuel, these vehicles have to meet the intermediate and full useful life
emission standards for TLEVs, LEVs or ULEVs laid out
above.³⁰
---------------------------------------------------------------------------

\29\ Flexible-fuel vehicles are those that can operate on either
of two different fuels or any combination of those fuels, while
dual-fuel vehicles can operate on either of two different fuels but
not on combinations of those fuels.
\30\ Consistent with California's methodology, the measured NMOG
mass emissions are adjusted by a RAF for the given type of
alternative fuel before being compared to the applicable emission
standard. Determination of the applicable RAF is discussed later in
section IV.B.5.d.
---------------------------------------------------------------------------

When certifying on gasoline, flexible-fuel and dual-fuel vehicles
have to meet the next higher (less stringent) category of NMOG emission
standards than the standards to which the vehicle was certified on an
alternative fuel. However, except for NMOG, the vehicle must meet the
same emissions standards (NOx, CO, etc.) when operated on gasoline as
it did when operated on the alternative fuel. For example, a flexible-
fuel vehicle that certifies to ULEV standards on an alternative fuel
would have to certify to the LEV NMOG standard and ULEV CO, NOx, PM,
and HCHO standards when operated on gasoline. The same principle holds
true for determining applicable in-use standards for flexible-fuel and
dual-fuel vehicles. This approach allows manufacturers to optimize the
emission control system for the alternative fuel rather than for
gasoline, and encourages rather than discourages the development of
alternative fuel technologies. Consistent with California, flexible-
fuel and dual-fuel vehicles will be counted toward the NMOG fleet
average standard on the basis of their NMOG certification levels on the
alternative fuel, not on gasoline. There is, however, no requirement
under the National LEV program that such vehicles operate on
alternative fuels in-use.
b. In-Use Standards. As proposed in the NPRM, the National LEV
program explicitly adopts California's intermediate in-use standards,
which are slightly less stringent than the certification standards.
These standards, which apply to in-use testing for a period of model
years following introduction of the certification standards, are set at
less stringent levels than the certification standards to allow
manufacturers to gain in-use experience with vehicles certified to LEV
or ULEV standards. EPA is adopting these standards consistent with the
current California requirements, which include recently adopted
revisions. (See the Response to Comments document for further
discussion of these revisions, section II.D.1.) The in-use standards
apply through MY1999 for LEVs and through MY2002 for ULEVs, and include
both intermediate useful life (50,000 miles) and full useful life
(100,000 miles) standards (full useful life in-use standards apply
starting with MY1999). In-use standards for LDVs and LLDTs to 3750 lbs
LVW are shown in Table 4 and those applicable to LLDTs from 3751 to
5750 lbs LVW are shown in Table 5. As indicated in the tables,
compliance with in-use standards beyond the intermediate useful life is
not required for LEVs and ULEVs until after MY1998. These in-use
standards for vehicles certified under the National LEV program apply
to vehicles sold both within and outside the OTR. Some of the
complexity in the tables below results from changes in the in-use
formaldehyde standards that occur starting with MY2001.

Table 4.--National LEV In-Use Standards (g/mi) for LDVs and LLDTs to 3750 lbs LVW \1\
----------------------------------------------------------------------------------------------------------------
Useful life
Vehicle emission category Model year (miles) NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
LEV............................ 1997-1999 50,000 0.100 3.4 0.3 0.015
1999 100,000 0.125 4.2 0.4 0.018
ULEV........................... 1997-1998 50,000 0.058 2.6 0.3 0.012
1999-2000 50,000 0.055 2.1 0.3 0.012
2001-2002 50,000 0.055 2.1 0.3 0.008
1999-2002 100,000 0.075 3.4 0.4 0.011
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.

Table 5.--National LEV In-Use Standards (g/mi) for LLDTs From 3751 Lbs LVW to 5750 LVW \1\
----------------------------------------------------------------------------------------------------------------
Useful life
Vehicle emission category Model year (miles) NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
LEV............................ 1997-1998 50,000 0.128 4.4 0.5 0.018
1999 50,000 0.130 4.4 0.5 0.018
1999 100,000 0.160 5.5 0.7 0.018
ULEV........................... 1997-1998 50,000 0.075 3.3 0.5 0.014
1999-2002 50,000 0.070 2.8 0.5 0.014
1999-2002 100,000 0.100 4.4 0.7 0.014
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.

2. Non-methane Organic Gases Fleet Average Standards
a. Compliance with the NMOG Standards. Under the National LEV
program, manufacturers will be required to meet an increasingly
stringent fleet average NMOG standard. Today's action adopts the fleet
average NMOG standards and schedule for LDVs and LLDTs as proposed in
the NPRM. The fleet average NMOG values (Table 6) will apply, on a
manufacturer-by-manufacturer basis, to vehicles sold in the OTR from
MY1997 until the end of the National LEV program.³¹ The NMOG
values will also apply to vehicles sold in every state outside the OTR,
except California, beginning with MY2001. (Low volume manufacturers, as
defined in this rule, will be exempt until MY2001, as discussed more
fully in section IV.C. below.) The decreasing fleet average standards
were derived by multiplying certification emission levels for various
categories of vehicles by achievable implementation rates for each
vehicle category. The NMOG standards are equivalent to the sale of 40
percent TLEVs in MY1997-MY1998, 40 percent TLEVs and 30 percent LEVs in
MY1999, 40 percent TLEVs and 60 percent LEVs in MY2000, and 100 percent
LEVs in MY2001.

[[Page 31211]]

\31\ MY1997 is used in this rule as a placeholder for the actual
start date. See n. 17 above.

Table 6.--Fleet Average NMOG Exhaust Emission Standards (g/mi) for LDVs and LLDTs Sold in the OTR\1\
----------------------------------------------------------------------------------------------------------------
Fleet
Vehicle type Model year average
NMOG
----------------------------------------------------------------------------------------------------------------
LDV and LLDT (0-3750 LVW)..................... 1997............................................... 0.200
1998............................................... 0.200
1999............................................... 0.148
2000............................................... 0.095
2001 and later..................................... 0.075
LLDT (3751-5750 LVW).......................... 1997............................................... 0.256
1998............................................... 0.256
1999............................................... 0.190
2000............................................... 0.124
2001 and later..................................... 0.100
----------------------------------------------------------------------------------------------------------------
\1\ MY1997 is used in this rule as a placeholder for the actual start date. See footnote no. 17.

Manufacturers will be required to meet separate NMOG averages for
each of two vehicle groups; i.e., a fleet average will be calculated
for LDVs and LLDTs from 0-3750 LVW, and for LLDTs from 3751-5750 LVW.
Also, as discussed below, manufacturers will have to meet NMOG averages
for each of these groups in the two separate regions: states within the
OTR (Northeast Trading Region or NTR), and states (except California)
outside the OTR (37 States). Prior to MY2001, compliance with the fleet
average NMOG requirements is required only in the OTR. However, a
manufacturer choosing to bank credits for use in the 37 States
beginning in MY2001 will have to demonstrate that its fleet average
NMOG is more stringent than the NMOG value for Tier 1 vehicles in the
37 States for these early years.³² Beginning in MY2001,
manufacturers will have to meet the fleet average NMOG standards
separately in each of the two regions.
---------------------------------------------------------------------------

\32\ For purposes of demonstrating compliance with the fleet
average NMOG standards, the NMOG value for Tier 1 LDVs and LLDTs 0-
3750 lbs LVW is 0.25 grams/mile, and for LLDTs 3751-5750 lbs LVW is
0.32 grams/mile.
---------------------------------------------------------------------------

Manufacturers will be able to comply with the fleet average NMOG
standards by selling any combination of vehicles certified to the Tier
1, TLEV, LEV,

[[Page 31212]]

ULEV, or ZEV levels, such that the overall LDV and LLDT fleets in each
region meet the required fleet average values. A sales-weighted fleet
average will be calculated based on the intermediate useful life (five
years, 50,000 mile) certification NMOG standards of the vehicle
categories. A manufacturer will multiply the NMOG emission standard for
each certification category by the number of that type of vehicle that
the manufacturer sold in that region, add these products to the Hybrid
Electric Vehicle (HEV) contribution factor (discussed in section
IV.B.8.), and then divide by the total number of vehicles sold in that
region by the manufacturer.
b. Tracking Vehicles for Fleet Average NMOG Compliance. Because
vehicles sold to locations in California and other countries, including
Canada and Mexico, are excluded from the National LEV program, and
because fleet average NMOG calculations are specific to each of the two
regions, as described further in the following section, manufacturers
are required to obtain data on the location of vehicle sales to
demonstrate accurate fleet average NMOG calculations. However, to ease
the burden on manufacturers of tracking vehicles to the end user,
manufacturers need only track vehicles to the location where the
completed vehicle or truck is purchased, otherwise known as the point
of first sale. In most cases, this will be the sale from the
manufacturer to the dealer. In cases where the end user purchases the
completed vehicle directly from the manufacturer, the location of the
end user is the point of first sale. Vehicle sales data pertaining to
vehicles already shipped to a point of first sale is also known as
first delivery information.
In the NPRM, EPA proposed to have manufacturers track vehicles to
the location where the completed vehicle or truck is purchased, but
mistakenly called this ``point of first retail sale'' (emphasis added).
EPA did not intend to require, however, to have vehicles tracked to the
end user, which is the general level of tracking triggered by point of
first retail sale requirements. The term ``point of first retail sale''
derives from requirements applicable to the heavy-duty engine market.
Heavy duty engine manufacturers often sell engines to truck builders,
who in turn may sell their completed trucks to consumers or dealers
located anywhere. This dispersion of the engines even after the first
sale makes it necessary for manufacturers to track engines to the point
of first retail sale in order to make a reasonable estimate of the
engine's final location. However, in the light-duty market,
manufacturers sell almost all of their production to dealerships, who
in turn sell most vehicles to users located in the general area of the
dealership. The practical constraints on dispersion of vehicles after
the first sale make tracking light-duty vehicles and trucks to the
point of first retail sale unnecessary, as EPA recognized in
establishing trading requirements for phase-in of Tier 1 vehicles.
Thus, today's action clarifies the vehicle tracking requirement and
corrects the proposed language now to require manufacturers to track
National LEV vehicles to the point of first sale.
EPA recognizes that dealers occasionally trade vehicles to obtain
particular makes or models, but the Agency does not believe that this
trading will have any significant effect on the air quality benefits of
the National LEV program. Trading vehicles between dealerships occurs
largely over limited geographic distances, which means that most trades
will redistribute vehicles within the same region. EPA believes that
inter-regional trades would have a de minimis effect on vehicle mixes
and resulting air quality.
EPA is making an additional minor change in the regulations to
clarify an inconsistency in the proposal. The proposed regulations
applied the National LEV requirements to vehicles that manufacturers
``produce and deliver for sale,'' which is the language used in the
California regulations. However, under both the proposed and final
rules, for purposes of determining compliance with the National LEV
requirements, manufacturers must track vehicles to the point of first
sale (point of first retail sale in the proposal). Practically, this
means that the proposed and final National LEV requirements apply to
the vehicles actually sold by manufacturers, rather than the vehicles
delivered for sale, which may be different. As discussed above, for the
Agency to enforce the National LEV requirements on a region-specific
basis, it is necessary to track vehicles to where they are first sold.
The point at which vehicles are delivered for sale is more difficult to
identify and may give a less accurate indication of the vehicles' final
destination. Given that the tracking requirement will be used to
determine compliance, EPA is modifying the applicability of the
National LEV requirements to reflect that this is the controlling
requirement. Thus, in the final rule, EPA is applying the National LEV
requirements to the vehicles actually sold by manufacturers, which are
the same vehicles used for demonstrating compliance with those
requirements.
c. OTC State Government ATV Purchases. Manufacturers may not
include in their fleet average NMOG calculations ATVs bought in the OTR
by state governments. EPA is including this limitation at the request
of the OTC States and auto manufacturers. The OTC States and
manufacturers intend the limitation to allow the OTC States to promote
ATV purchases pursuant to the ATV component they had negotiated,
without allowing manufacturers to offset these purchases with increased
sales of higher-emitting vehicles. For the purpose of National LEV, an
ATV is defined as any vehicle certified by CARB or EPA that is either:
(1) A dual-fuel, flexible-fuel, or dedicated alternatively fueled
vehicle certified as a TLEV, LEV, or ULEV when operated on the
alternative fuel; (2) certified as a ULEV or Inherently Low Emission
Vehicle (ILEV) (irrespective of whether conventionally or alternatively
fueled); or (3) a dedicated or hybrid electric vehicle.
This exclusion of OTC State government purchases of ATVs from the
fleet average NMOG value applies to any ATV purchases by OTC State
governments that the governments have properly reported to the
manufacturers. For the limitations to apply, the governments must
report their purchases of these vehicles to the respective
manufacturers no later than February 1 of the calendar year following
the end of a given model year. Reporting should consist of a letter
from the government official responsible for the purchases to the
manufacturer representative listed in that manufacturer's application
for certification. The letter should list the number of vehicles
purchased, vehicle makes and models, and the associated engine
families. If necessary, EPA can provide OTC State governments the name
and address of the manufacturer representative upon request. Reporting
OTC State governments should also send a copy of this letter to EPA, to
the name and address stated in section 40 CFR 86.1710-97(g)(4), so that
EPA can include these data in verifying manufacturers' compliance with
the fleet average NMOG standards. Failure of the government entities to
report these data correctly would allow manufacturers to include these
vehicles in their fleet average NMOG values.
EPA has determined that Federal government ATV purchases will not
be excluded from manufacturers' NMOG fleet average values. This
requirement would be too burdensome to meet effectively because the
location of Federal vehicle purchases often do not correspond to the
vehicles' main service

[[Page 31213]]

area. The General Services Administration (GSA) coordinates Federal
vehicle purchases. Federal agencies order vehicles from GSA and have
them shipped to or picked up from specified regions. In turn, these
vehicles are frequently re-distributed elsewhere based on that
particular agency's needs. Thus, it would be difficult, if not
impossible, to devise a system to have Federal entities track and
report the number of ATVs being used in the OTR. In addition, EPA does
not believe that allowing manufacturers to include ATVs purchased by
the federal government would raise any problem of double-counting under
the Energy Policy Act (EPAct). The EPAct requirements are not directed
towards manufacturers. Thus, a manufacturer that counts a vehicle
purchased under EPAct towards meeting its National LEV fleet average
NMOG requirement would not be receiving any additional credit for
compliance with EPAct as well.
d. Reporting Requirements. EPA is including in today's rule several
provisions designed to simplify reporting requirements. Under certain
conditions, a manufacturer whose entire fleet, apart from California
vehicles, is certified to LEV or cleaner standards may not need to
calculate separate NMOG fleet averages for each trading region and may
use production data in lieu of sales data for determining compliance.
Manufacturers may also simplify their reporting under National LEV by
combining the information required here with their annual production
reports.
A manufacturer whose entire fleet for the 49 states is certified to
LEV or cleaner standards would not need to calculate separate fleet
average NMOG values for each region or track vehicles to specific
regions to evaluate compliance with the NMOG fleet average requirement.
Because each individual vehicle is certified at or below the fleet
average NMOG value, any mix of vehicles sold in either region would
necessarily meet the applicable fleet average NMOG requirement. The
manufacturer could simply show compliance with the fleet average NMOG
requirement by showing that each engine family was certified to a
standard equivalent to or more stringent than the fleet average NMOG
requirement. If a manufacturer decides to use this reduced reporting
requirement, then EPA will designate that manufacturer's fleet average
NMOG values for the affected model years, for each region, as equal to
the applicable fleet average NMOG standards for such model year. Such a
manufacturer would not be able to generate credits because region-
specific tracking is necessary to calculate the credits generated for a
specific region, based on the number of vehicles sold in that region.
Region-specific tracking is also used to calculate total number of
vehicles sold in the OTR for assessing industry-wide compliance with
the five percent cap on sales of Tier 1 vehicles and TLEVs, which is
described in section IV.B.4. below. EPA believes that a reasonable
estimate of the manufacturer's total sales in the OTR will be adequate
to allow the Agency to assess industry-wide compliance with the five
percent cap. EPA will estimate the manufacturer's sales in the OTR by
calculating the average percentage of the manufacturer's total fleet
that was sold in the OTR over the last two years for which the
manufacturer reported OTR sales, and then applying this percent to the
manufacturer's total sales in the 49 states for that model year.
A manufacturer may also combine the currently required production
report ³³ with the National LEV report in a single
submission. Manufacturers taking advantage of this option would have to
report at the time the production report is due, which is typically 30
days after the end of the model year. This is sooner than EPA has
allowed for the National LEV report, which is not due until May 1 of
the calendar year following the model year. EPA is giving manufacturers
this extra time to file the National LEV report to allow manufacturers
to include in their report any credit trading activity that occurs
after the end of the model year. Manufacturers that are not generating
or using credits probably will not need the additional reporting time.
The option of combining the reports leaves the choice up to each
manufacturer to decide for itself whether filing an earlier combined
report makes sense. EPA believes that these simplified compliance
provisions allow manufacturers to reduce their compliance burdens
without diminishing program stringency or EPA's ability to ensure
compliance.
---------------------------------------------------------------------------

\33\ See 40 CFR 86.085-37(b).
---------------------------------------------------------------------------

3. Fleet Average NMOG Credit Program
a. Fleet Average NMOG Credit Program Requirements. An important
part of today's National LEV rulemaking is the set of provisions
allowing manufacturers to use a market-based approach to meet the fleet
average NMOG requirements through averaging, banking, and trading NMOG
credits and debits. Both this overall approach and most of the
specifics of program implementation are modeled on California's trading
program. The few differences between the National LEV and California
requirements are mainly due to the need to have separate compliance
determinations in the OTC States and the 37 States, or are driven by
EPA's legal authority.
As proposed, fleet average NMOG credits and debits will be
calculated in the same manner as under the California regulations.
Credits and debits will be calculated in units of g/mi as the
difference between the required fleet average NMOG standard and the
fleet average NMOG value achieved by the manufacturer, multiplied by
the total number of vehicles the manufacturer sold in a given model
year in each of the applicable regions, including ZEVs and HEVs. A
manufacturer will generate credits in a given model year if its fleet
average NMOG value is lower than the fleet average NMOG standard for
that model year. Debits will be incurred when a manufacturer produces a
fleet average NMOG value above the fleet average standard required for
that model year. A manufacturer's balance for the model year will equal
the sum of all outstanding credits and debits.
As under the California regulations, the separate fleet average
NMOG standards for the two different vehicle classes require
manufacturers to calculate separate fleet average NMOG values for each
class. Class A represents the LDVs and LLDTs 0-3750 lbs LVW, and Class
B represents the LLDTs 3751-5750 lbs LVW. Once calculated, fleet
average credits and debits are not specific to these classes.
The National LEV program does, however, include geographic limits
on both calculation of fleet average NMOG values and offset of debits
with credits, as proposed in the NPRM. Prior to MY2001, the fleet
average NMOG standard will apply only to vehicles sold within the OTC
States.³⁴ To ensure that the voluntary program continues to
produce acceptable emissions reductions in the OTR, from MY2001 on,
credit and debit averaging will be conducted in two separate regions:
the NTR, and the remaining 37 States, excluding both California and the
NTR. The NMOG average, credits, and debits

[[Page 31214]]

for a regional fleet will be based on vehicles sold in each region, and
each regional fleet average will have to meet the applicable NMOG
standard independently.
---------------------------------------------------------------------------

\34\ For administrative convenience, EPA will include the entire
Commonwealth of Virginia in the OTR trading region (designated as
the Northeast Trading Region (NTR)) even though only northern
Virginia is in the OTR. Inclusion in the trading region means that
for purposes of assessing compliance with the fleet average NMOG
standard and the other National LEV provisions, the entire
Commonwealth of Virginia will be considered as a whole as part of
the NTR. This inclusion is only for purposes of the National LEV
program. EPA received no negative comments on the proposed inclusion
of the entire state of Virginia in the trading region.
---------------------------------------------------------------------------

Therefore, manufacturers will be required to calculate four
separate fleet average NMOG values for four separate averaging sets:
Class A in the NTR, Class A in the 37 States, Class B in the NTR, and
Class B in the 37 States. Each manufacturer will have a separate
balance for each of the two regions, which will be calculated by
summing all of the manufacturers' credits and debits within that
region.³⁵ Only credits remaining after calculating the
manufacturer's balance for the region will be available for trading,
and they may be traded only in that region.
---------------------------------------------------------------------------

\35\ Credits or debits earned or incurred in the National LEV
program would not be interchangeable with credits or debits earned
or incurred in California because the National LEV and California
LEV programs are separate.
---------------------------------------------------------------------------

As under the California regulations, the National LEV standards
provide that manufacturers may incur a debit balance in a given region
and model year, but the manufacturer must equalize any emission debits
by the reporting deadline after the end of the following model year.
Manufacturers will be able to offset debits by (1) using credits
generated by that manufacturer in a previous year (discounted if
appropriate), (2) earning an equal amount of emission credits the year
after incurring the debit, or (3) presenting to EPA an equal amount of
credits acquired from another manufacturer. However, a manufacturer
will have to use any available credits from a region to offset any
debits from the same region in the model year those debits were
generated. A manufacturer may not carry over to the next model year
both credits and debits for the same region or transfer those credits
to another manufacturer. A manufacturer that fails to equalize debits
within the required time period will be deemed to be in violation as of
that date. The deadline for equalizing debits is the due date for the
annual report for the model year following the model year in which the
debits were generated.
As proposed, the voluntary standards also incorporate the
California approach for discounting unused credits over time. Unused
credits that are available at the end of the second, third and fourth
model year after the model year in which the credits were generated
will be discounted to 50 percent, 25 percent, and 0 percent of the
original value of the credits, respectively. For example, if a
manufacturer generated 200 credits in the OTR in MY1999, those credits
would retain their full value in MY2000. However, in MY2001, the
credits would be discounted by 50 percent, so the manufacturer would
hold only 100 credits. In MY2002, the manufacturer would hold 50
credits, and in MY2003, the credits would have no value.
As with other emission credits or allowances recognized under the
Act, credits would not be the holder's property, but instead would be a
limited authorization to emit the designated amount of emissions.
Nothing in the regulations or any other provision of law should be
construed to limit EPA's authority to terminate or limit this
authorization through a rulemaking.
b. Early Reduction Credits. Manufacturers may also generate credits
in the 37 States prior to MY2001 for use in the 37 States, as EPA
proposed in the NPRM. This will provide manufacturers added flexibility
as well as create an incentive for them to introduce cleaner vehicles
into this region before MY2001, thus providing air quality benefits
sooner. Since these credits cannot be used or traded before MY2001, EPA
will treat any credits earned in the 37 States before MY2001 as if
earned in MY2001. It does not make sense to apply the normal discount
rate to these credits before MY2001 because that would remove or
sharply reduce the incentive for early introductions. This is also
consistent with California's approach to allowing early generation of
credits. However, these credits will be subject to the normal discount
rate starting with MY2001, meaning they will retain their full value
for MY2002 and will be discounted from then on. In addition, these
early reduction credits will be subject to a one-time ten percent
discount applied in MY2001, as discussed below.
EPA believes that there are substantial benefits to encouraging
early introductions of cleaner vehicles, but remains concerned that
giving full, undiscounted credits for all early reductions may generate
some windfall credits. ``Windfall'' credits are credits given for
emission reductions the manufacturer would have made even in the
absence of a credit program. The purpose of giving credits for early
reductions is to encourage manufacturers to make reductions that they
would not have made but for the credit program. Because credits can be
used to offset higher emissions in later years, if manufacturers are
given credits for early reductions they would have made even without a
credit program, then the credit program could have a detrimental effect
on the environment.
There is some potential for windfall credits here because, in the
absence of early reduction credits, it is likely that there still would
be some early introduction of National LEV vehicles in the 37 States.
Under the California LEV program, windfall credits should not occur
because there is no other regulatory or market incentive for
manufacturers to introduce new technology early in California. Under
National LEV, however, manufacturers would already be producing cleaner
vehicles for California and the OTR. Distribution efficiencies would
encourage some cross-border sales of National LEV vehicles in the
states bordering the OTR, and manufacturers might certify some 50-state
engine families due to economies of scale in production and
distribution.³⁶ The potential influence of such economic
factors is illustrated by the fact that manufacturers are currently
producing numerous 50-state engine families without the chance to earn
early credits.³⁷
---------------------------------------------------------------------------

\36\ To the extent that 50-state vehicles or cross border sales
are driven by the existence of National LEV requirements in the OTR,
it could be argued that credits for such vehicles would not be
windfall credits because the economic incentives for supplying such
vehicles would stem from the National LEV program itself. Even if
this were the case, giving manufacturers early reduction credits for
such vehicles would still reduce the benefits of National LEV
relative to its benefits absent early reduction credits, which would
appropriately be considered windfall credits. Moreover, in the
absence of National LEV, adoption of CAL LEV programs in at least
some OTC States might well have driven many of the same production
choices. Thus, to the extent that those 50-state vehicles would have
been supplied to the 37 States with or without National LEV, early
reduction credits for such vehicles would be windfalls.
\37\ This quantity of 50-state vehicles does not necessarily
have any relevance to estimating supply of such vehicles in the
absence of early reduction credits, however. In the past,
manufacturers have moved toward 50-state certification primarily
because California and federal standards were not significantly
different. However, the much larger differences between Tier 1 and
LEV standards will reduce the incentives to certify 50-state
vehicles under National LEV before MY2001.
---------------------------------------------------------------------------

Despite the potential for some windfall credits, the 37 States will
receive substantial benefits from early introductions of cleaner
vehicles. Early introduction will benefit public health and help areas
in the 37 States that currently exceed the ozone standard to come into
attainment sooner through fleet turnover replacement of older, higher-
emitting vehicles. Early reduction credits can be a powerful incentive
for early introductions, and the National LEV program should take full
advantage of this tool. Early reduction credits also benefit
manufacturers by providing additional compliance flexibility. Further,
while some windfall credits might be generated along with early
reductions

[[Page 31215]]

that should be credited, such windfall credits could never be precisely
quantified, given that the calculation would have to be based on
predicting actions under circumstances that do not exist.
Balancing these factors, EPA has structured the National LEV
program to provide a significant incentive for early introductions,
while assuring some environmental benefit to offset any possible
windfall credits. EPA believes it is appropriate to err on the side of
environmental protectiveness here. Compensating for potential windfall
credits will help ensure that the benefits of encouraging early
introductions are not offset by increased emissions overall. Moreover,
while manufacturers objected to any sort of adjustment to account for
potential windfall credits, the opportunity to earn early reduction
credits at all is not addressed in the MOUs initialed by the OTC States
and manufacturers, and EPA does not believe that either party regards
early reduction credits or limitations on such credits as important in
their decisions whether to participate in the program.
It would be impossible to identify which early introductions would
have occurred even in the absence of the credit incentive. Rather, the
most straightforward way to address the possibility of windfall credits
is to discount all early reduction credits by a set percentage. This
discount rate must be low enough to retain the marginal incentive to
generate early reduction credits. Recognizing that precision is
impossible here, EPA has attempted to pick a discount rate that
reflects some real environmental benefit, but does not so devalue early
reduction credits as to discourage manufacturers from generating them.
On the basis of these criteria, EPA has selected a ten percent discount
rate to be applied on a one-time basis to all credits earned in the 37
States region before MY2001. The ten percent discount rate should not
provide a significant disincentive to manufacturers generating credits
and it is in line with comparable provisions in other EPA
programs.³⁸ EPA believes that this figure appropriately
balances the goals of preserving the expected emissions reductions from
National LEV, with a margin of error to protect the environment, and
encouraging early introduction of cleaner National LEV vehicles into
the 37 States.
---------------------------------------------------------------------------

\38\ For example, the Open Market Trading Rule, 60 FR 39668
(August 3, 1995) and 60 FR 44290 (Aug. 25, 1995) proposed a ten
percent discount rate for all generated credits. This NPRM has been
turned into guidance that will be issued to the states. See also the
heavy duty averaging, banking, and trading program, which requires
that any debits be made up at a ratio of 1.2 to 1, equivalent to a
20 percent discount on the credits being applied to make up the
debits. See 40 CFR 86.094-15.
---------------------------------------------------------------------------

Today's action also clarifies EPA's proposal to allow low volume
manufacturers to generate credits in the OTR prior to MY2001, when they
would first be required to meet the fleet average NMOG standards. In
the NPRM, EPA stated that these manufacturers could generate and sell
credits in the OTR. EPA is expanding this requirement to allow low
volume manufacturers also to bank and then use these credits beginning
in MY2001. These credits would be discounted in the same manner as
credits generated in the OTR by the other manufacturers. Unlike the
early reduction credits in the 37 States, these early reduction credits
could be used prior to MY2001, if transferred to other manufacturers.
c. Enforcement of Fleet Average NMOG Credit Program. As described
in the proposal (60 FR 52750), compliance for vehicles subject to the
fleet average NMOG standards will be evaluated in two ways. First,
compliance of an individual vehicle with its certified NMOG tailpipe
emissions levels will be determined and enforced in the same manner as
compliance with any other emission standard. Each vehicle must meet its
certified emission standards as determined and enforced through
certification, SEA, in-use testing, and, for certain vehicles, testing
performed under some California assembly-line programs.³⁹
Second, manufacturers must show that they meet the applicable fleet
average NMOG standards. Manufacturers can either report a fleet average
NMOG level meeting the applicable fleet average NMOG standard or
present to EPA enough credits to offset any debits by the reporting
deadline after the end of the model year following the model year in
which the debits were incurred.
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\ 39 \ See section VI.C.1. of this rulemaking for a discussion
on the California Quality Audit Program.
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The fleet average NMOG credit program will be implemented and
enforced through the certificate of conformity, which the manufacturer
will be required to obtain under 40 CFR 86.1721-97 for all vehicles
prior to their introduction into commerce. The certificate for each
vehicle will require the vehicle to meet the applicable National LEV
tailpipe and related emission standards, and will be conditioned on the
manufacturer demonstrating compliance with the applicable fleet average
NMOG standard within the required time frame. If a manufacturer fails
to meet this condition, the vehicles causing the fleet average NMOG
violation will be considered not covered by the certificate applicable
to the engine family. EPA will then assess penalties on an individual
vehicle basis for sale of vehicles not covered by a certificate.
If a manufacturer does not equalize its debits within the specified
time period, EPA will calculate the number of noncomplying vehicles by
dividing the total amount of debits for the model year by the fleet
average NMOG requirement applicable for the model year and averaging
set in which the debits were first incurred. In the case where both
averaging sets in a region are in deficit, any applicable credits would
first be allocated to the averaging sets as determined by the
manufacturer; then, the number of noncomplying vehicles would be
calculated using the revised debit values. Each noncomplying vehicle
will be deemed to be in violation of the condition on its certificate.
EPA will determine these vehicles by designating vehicles in those
engine families with the highest certification NMOG emission values
first and continuing until a number of vehicles equal to the calculated
number of noncomplying vehicles as determined above is reached. In the
instance where only a portion of vehicles in a particular engine family
would be deemed noncomplying vehicles, EPA will determine the actual
noncomplying vehicles by counting backwards from the last vehicle
produced in that engine family.⁴⁰ Manufacturers will be
liable for penalties for each vehicle sold not covered by a
certificate. This is a one-time violation and would not subject the
manufacturer to further penalties related to the sale of those vehicles
without a certificate for failing to meet the fleet average NMOG
standard.⁴¹ Because a violation has not occurred until a
manufacturer fails to make up outstanding debits within the required
time period, for purposes of assessing the time of the violation and
the tolling of the Statute of Limitations, the violation occurs upon
the due date for filing the annual report for the model

[[Page 31216]]

year after the model year in which the manufacturer generated the
debits.
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\40\ For example, if the noncompliance calculation determined
that only 100 vehicles of a 1000 vehicle engine family contributed
to the debit situation, then EPA will designate the last 100
vehicles produced as the actual vehicles sold in violation of the
condition of their certificates.
\41\ Those vehicles, as any other vehicles, would still be
subject to a federal recall action under section 207(c) of the CAA
if EPA found they did not meet their certification standards in use,
but that would be unrelated to the lack of coverage by a certificate
at the time of sale. For purposes of any in-use enforcement action,
the vehicles will be held to the certification standards stated in
the certificate that would have covered the vehicles but for the
violation of the condition on the certificate.
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In the NPRM, EPA took comment on whether manufacturers should
automatically be required to make up any outstanding debits, even if
the manufacturer would also be subject to penalties in an enforcement
action for failure to make up the debits within the required time
period. Such an approach is exemplified in the acid rain trading
program under Title IV of the Act. In general, EPA believes that
enforcement of an emissions trading program should be structured to
hold the environment harmless for any violations. A trading approach
provides manufacturers additional flexibility and lower costs for
compliance with a given standard. It is important that this flexibility
does not undercut the expected environmental benefits.⁴² EPA
believes that requiring manufacturers to offset any debits, in addition
to paying a penalty, is the best means of ensuring that the
environmental benefits of an emissions trading program are maintained.
---------------------------------------------------------------------------

\42\ Even in the case where manufacturers make up debits after
the deadline there is some cost to the environment from the
additional delay in meeting the fleet average NMOG standard.
---------------------------------------------------------------------------

However, EPA believes an approach different from the proposed
approach is appropriate here. While there will be strong incentives for
manufacturers to make up outstanding debits, as discussed below, debits
will not continue to roll over automatically until they are made up.
Instead, EPA will assess whether a manufacturer met the fleet average
NMOG requirement for each model year, based on whether the manufacturer
offset its debits for the model year by the deadline.
There are several reasons why EPA believes this alternative
approach is appropriate under the particular circumstances of National
LEV. First, because National LEV is a voluntary program, EPA cannot
impose provisions that would preclude the parties from agreeing to the
program. The motor vehicle manufacturers have indicated that it would
be unacceptable to continually roll over outstanding debits into the
next year's balance, in addition to making them subject to penalties
for failure to make up the debits on time. Second, EPA is confident
that the National LEV program will meet the statutory requirements for
emissions reductions from motor vehicles, even if manufacturers are not
automatically required to make up debits, because National LEV will
produce emissions reductions substantially beyond those required by
title II of the CAA. Third, not rolling over debits will not affect the
relative quantity of emissions reductions from National LEV compared to
those that would be produced by OTC state-by-state adoption of CAL LEV
programs because CAL LEV also is not structured to require that
manufacturers make up debits automatically.
Finally, EPA believes that its current enforcement authority
provides strong incentives for manufacturers to remedy the
environmental harm by making up debits. If the Agency determines that
an enforcement action is appropriate, EPA would have some discretion in
choosing the appropriate penalties. The sale of vehicles not covered by
a certificate is a violation under CAA section 203(a). Section 205
authorizes penalties of up to $25,000 per vehicle. The applicable
penalties are listed in section 205(a) of the Act. Among the statutory
penalty factors listed in section 205 is ``action taken to remedy the
violation,'' which EPA would take into account in determining the
ultimate penalty to be assessed. The Agency also has broad injunctive
relief authority under section 204, and other applicable injunctive
relief provisions, which EPA would use if necessary to require that
environmental harm be corrected.
Where a manufacturer has opted out of the program, the manufacturer
will remain subject to an enforcement action for failure to make up any
outstanding debits within the required time period. Such a manufacturer
could make up debits through purchasing credits. If the manufacturer
failed to make up the debits, but took other action to remedy the
violation, EPA would take this into account in determining the ultimate
penalty to be assessed, as discussed above. Failure to make up debits
outstanding upon opt-out within the required time frame is a one-time
violation.
EPA will also use the mechanism of conditioning the certificate to
enforce the requirement that manufacturers not sell credits that they
have not generated. If a manufacturer transferred invalid credits, the
manufacturer would receive an equivalent number of debits, which the
manufacturer would be required to offset by the reporting deadline for
the same model year in which the invalid credits were generated.
Failure to make up these debits within the required time period would
be considered a violation of the condition on the certificate and
nonconforming vehicles will not be covered by the certificate. EPA will
identify the nonconforming vehicles in the same manner as described
above.
When credits are transferred between manufacturers, EPA proposed
generally to make both the provider and receiver of credits potentially
liable for any credit shortfall resulting from the trade. With today's
action, EPA has determined that this is unnecessary in the context of
the National LEV program. Instead, EPA will treat traded credits as
presumptively valid, which is the approach California takes under its
LEV program. Should the credit generator have erroneously sold credits
that did not exist, the generator would be liable for making up the
resulting deficits and, where appropriate, for violating the
regulations governing generation and sale of credits. Where the credit
generator provided valid credits, yet a credit shortfall occurred
because the recipient held insufficient credits, no liability would
attach to the generator. In instances of fraud, EPA retains the
authority to enforce against any party to such fraud. EPA believes that
the integrity of credit transactions will be sufficiently served by
holding the party reporting a shortfall responsible for making up the
deficit and retaining enforcement authority against parties improperly
transferring credits.
This enforcement mechanism operates in a similar fashion to the
comparable mechanism under the California LEV regulations. California
focuses on the party reporting a shortfall of credits associated with
its fleet average NMOG calculations. One difference in the California
and National LEV fleet average NMOG enforcement schemes is that
California provides for timely verification of credits while the
National LEV program does not. This enables California generally to
avoid instances where invalid credits are traded. The National LEV
program accounts for this by not holding a credit recipient liable for
purchasing invalid credits.
As stated in the discussion on multi-party liability for credit
transactions in the Response to Comments document, EPA believes that an
enforcement scheme that will charge a party for credits it sells and
then generally will only look to the party reporting a shortfall is
both fair and efficient in the circumstances of the National LEV
program. This approach will create an incentive for credit generators
to ensure that the credits they are trading are valid. Putting the
burden on the credit generator places responsibility on the party that
is best able to ensure the validity of credits through careful trading
and record-keeping. This approach also enhances the viability of the
market by reducing risks for credit buyers. The risk that credits might
be invalidated and the buyer might be liable for a shortfall would
create a disincentive for manufacturers to rely

[[Page 31217]]

on credit purchases for compliance, particularly given the difficulty a
buyer may have in independently validating credits. In cases where
credits have changed hands more than once, enforcing against the credit
generator removes any question between the various trading parties as
to whose credits actually caused the debit situation and creates a
simple enforcement scheme.
There are several aspects of National LEV that reduce the need for
multi-party liability in this program. First, once EPA receives the
annual compliance reports, it will be very simple to verify whether the
credits were actually generated and assign responsibility for the
shortfall. If EPA can easily assign responsibility and enforce against
one party, there is less need to hold the other party potentially
liable as well. Second, because verification is so straightforward, EPA
expects few problems with sales of invalid credits. Giving buyers an
incentive to help enforce the validity of credits adds relatively
little under these circumstances, particularly given that access to
production data would be necessary for validation and this is something
manufacturers are unlikely to share with competitors. Third, the main
benefit to retaining multi-party liability in the National LEV context
would be to protect against a situation where one party sells invalid
credits and then goes bankrupt, leaving no one liable for either
penalties or compensation for the environmental harm. Given the
stability of the motor vehicle manufacturing market, EPA believes this
is a highly unlikely scenario. In this context, retaining multi-party
liability simply to address such an eventuality is not worth the likely
disincentive to trading. EPA does not believe, however, that this
balancing of advantages and disadvantages would necessarily support the
same decision for other differently situated trading programs.
d. Reporting for Fleet Average NMOG Credit Program. Manufacturers
are required to prepare an annual report after the end of each model
year to demonstrate compliance with the applicable fleet average NMOG
standards. Manufacturers must submit the report no later than May 1 of
the calendar year following the end of the given model year.
Manufacturers must also report any credit transactions for the year as
part of the annual report. EPA does not believe that more frequent
reporting of trading actions, such as the California program
requirement of immediate reporting of trades, is necessary or
appropriate under the National LEV program. The only practical benefit
to more frequent reporting would be for a credit recipient to verify if
credits had already been traded. But under the liability scheme
described in today's action, the recipient would generally carry no
liability if the credit generator sold it credits that were not
available for sale. Thus, more frequent reporting is not necessary to
protect the buyer or enforce against the generator in the event of a
sale of invalid credits. EPA intends to develop an electronic reporting
mechanism that is similar to California's format. The format for
reporting fleet average NMOG data will be detailed in a Dear
Manufacturer letter from EPA after the final regulations have been
published.
The integrity of the proposed fleet average NMOG credit program
depends on accurate record keeping and reporting by manufacturers, and
effective tracking and auditing by EPA. If a manufacturer fails to
maintain the required records, EPA may void the certificates for the
affected vehicles ab initio. If a manufacturer violates reporting
requirements, the manufacturer is subject to penalties of up to $25,000
per day, as authorized by section 205 of the Clean Air Act.
In the NPRM, EPA proposed to allow manufacturers the opportunity
for a hearing if the Agency decided to void a certificate as part of an
enforcement action. EPA is including this language in the final rule,
but is clarifying the scope of its application. A hearing would not be
available for determination that certain vehicles were not covered by a
certificate due to a violation of a condition of a certificate, such as
an exceedance of the fleet average NMOG requirements. In this situation
EPA is not suspending or revoking the certificate. Rather, EPA is
applying a limitation included in granting the certificate to determine
which vehicles the certificate covers. Moreover, if EPA brought an
enforcement action against a manufacturer based on a determination that
certain vehicles were not covered by a certificate when sold, such an
action would provide the manufacturer an opportunity for a hearing at
that juncture. However, if EPA voids a certificate ab initio,
manufacturers would have an opportunity for a hearing on that action of
voiding the certificate.
4. Limits on Sale of Tier 1 Vehicles and TLEVs
As recommended by the OTC States and the manufacturers, today's
rule contains two limits on the sale of TLEVs and Tier 1 vehicles in
the OTC States after MY2000. First, the rule places a five percent cap
on sales of Tier 1 vehicles and TLEVs in the NTR starting in MY2001.
The industry-wide number of these LDVs and LLDTs sold in a model year
in the NTR is limited to five percent of the total number of new
National LEV motor vehicles sold in that model year in the NTR. Second,
manufacturers may sell Tier 1 vehicles and TLEVs in the NTR after
MY2000 only if the same engine families are certified and offered for
sale in California as Tier 1 vehicles and TLEVs in the same model year.
These requirements address concerns raised by some parties regarding
whether National LEV would achieve NO<INF>X</INF> emissions equivalent
to OTC LEV (and thus to OTC state-by-state adoption of CAL LEV
programs). As discussed in greater detail in the NPRM (60 FR
52751(col.1)), the concern is that the higher fleet average NMOG
standards under National LEV might allow manufacturers to sell
relatively greater numbers of Tier 1 vehicles and TLEVs in the OTR than
they could have sold under OTC state-by-state adoption of CAL LEV
programs, which could have a disproportionate effect on NO<INF>X</INF>
emissions. The final rule modifies the proposed limit on the sale of
these vehicles in a few respects to simplify its administration.
As proposed, EPA would assess compliance with the five percent cap
on the basis of the total sales of vehicles by all manufacturers in the
NTR in a given model year.⁴³ If the industry-wide cap is
exceeded, EPA would allocate responsibility for that exceedance among
individual manufacturers whose sales of Tier 1 vehicles and TLEVs
exceeded five percent of the number of vehicles in their individual NTR
fleets. Each of these manufacturers would be responsible only for its
pro rata share of the industry-wide exceedance, not for the amount by
which it exceeded five percent of its own fleet. For example, assume
the industry-wide five percent cap was exceeded by 20 vehicles,
manufacturers A and B were the only ones who exceeded a manufacturer-
specific five percent cap, manufacturer A exceeded five percent of its
fleet by 100 vehicles, and manufacturer B exceeded five percent of its
fleet by 300 vehicles. Manufacturer A would be responsible for five
vehicles, while manufacturer B would be responsible for 15 vehicles.
---------------------------------------------------------------------------

\43\ This total would not include vehicles sold by a
manufacturer that had opted out of National LEV, regardless of
whether EPA determined the opt-out to be valid.
---------------------------------------------------------------------------

Apart from the provision for industry-wide averaging to determine
the total number of vehicles violating the five percent cap, this
approach does not

[[Page 31218]]

otherwise provide for compliance through averaging, banking and
trading. As discussed at length in the NPRM (60 FR 52751-52754), a
trading system is extremely difficult to use to enforce an industry-
wide violation. None of the commenters offered any suggestions as to a
workable way to retain trading to meet the five percent cap agreed to
by the OTC States and manufacturers. Nevertheless, the approach in the
final rule maintains the most important aspect of flexibility for
manufacturers in that it assesses compliance industry-wide and only
holds individual manufacturers responsible for their pro rata share of
the industry-wide exceedance.
Enforcement of the five percent cap will be delayed until the first
full model year following a model year in which EPA notifies
manufacturers that they have exceeded the industry-wide five percent
cap. This ensures that manufacturers likely to sell Tier 1 vehicles and
TLEVs in excess of five percent of their individual fleets will have
warning that the industry as a whole may not be below the five percent
cap. Those manufacturers will then be able to reduce their own
percentage production of Tier 1 vehicles and TLEVs beginning in the
following model year, which would be the first year in which EPA could
enforce the five percent cap.
This delayed enforcement of the five percent cap substitutes for a
trading approach by allowing manufacturers time to adjust their
production after an industry-wide exceedance rather than protecting
themselves prior to an industry-wide exceedance by purchasing credits.
While this delayed enforcement approach has the potential to allow up
to two years of exceedances of the five percent cap, EPA does not
believe this is sufficient to affect the acceptability of emissions
reductions from National LEV when compared to those that could be
produced by OTC state-by-state adoption of CAL LEV programs. EPA
believes that both the likelihood of an industry-wide exceedance and
the emissions impact of such an exceedance, if it occurred, are very
small. Moreover, the administrative burden of a trading program without
delayed enforcement greatly outweighs the potential environmental
benefits of the approach adopted here.
As proposed, low volume manufacturers are exempt from the five
percent cap provisions. EPA recognizes that these manufacturers may
lack the flexibility in their product line that would allow them to
adjust the makeup of their fleet to meet this requirement. Also their
small market share means that the potential contribution of increased
NO<INF>X</INF> emissions from these manufacturers would be
insignificant.⁴⁴ Vehicles produced by low volume
manufacturers will not be included in calculating the industry-wide
total number of vehicles sold in the NTR or industry-wide compliance
with the five percent cap.
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\44\ For example, in MY1994, low volume manufacturers accounted
for less than 0.5 percent of the overall motor vehicle fleet.
---------------------------------------------------------------------------

Coupled with the five percent cap is a requirement that beginning
in MY2001, manufacturers will be able to offer Tier 1 vehicles or TLEVs
for sale in the NTR only if the same engine families are certified and
offered for sale in California in the same model year.⁴⁵
This requirement applies to all manufacturers, including low volume
manufacturers. This provision should reduce the likelihood that the
industry will ever exceed the five percent cap by encouraging the same
sales mix under National LEV and OTC state-by-state adoption of CAL LEV
programs. To meet the tighter NMOG standards in California,
manufacturers will need to produce a mix of engine families that
includes relatively fewer Tier 1 vehicles and TLEVs but still meets
consumer demand for a range of types of vehicles.⁴⁶ Because
consumer demand for a given type of vehicle does not tend to vary
widely by region, once limited to producing a certain number of Tier 1
and TLEV engine families for California, manufacturers are unlikely to
sell a significantly different vehicle mix in the OTR. The National LEV
provision for reduced reporting requirements for manufacturers with 100
percent LEV fleets provides an additional incentive for manufacturers
not to produce any Tier 1 vehicles and TLEVs.
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\45\ This requirement would not apply to a manufacturer
supplying Tier 1 vehicles pursuant to an opt-out from National LEV
that EPA had determined to be invalid during the period that the
determination was undergoing legal challenge.
\46\ The CARB fleet average NMOG standard for passenger cars for
MY2001 is 0.070 g/mi, which is below the comparable NMOG standard
for LEVs. Thus, a manufacturer will likely have to produce a fleet
of mostly LEVs and ULEVs to meet this California requirement.
---------------------------------------------------------------------------

Both of these limits on sales of Tier 1 vehicles and TLEVs would be
implemented and enforced in the same manner as the fleet average NMOG
standards. The certificate for each Tier 1 vehicle and TLEV produced
and offered for sale in the NTR in MY2001 and later model years would
be conditioned on demonstrating compliance with the five percent cap
provisions; it would also be conditioned on the manufacturer certifying
and offering for sale the same engine families in California in the
same model year. If a manufacturer failed to comply with these
requirements, then each noncomplying vehicle would be deemed to be in
violation of the certificate of conformity. For a violation of the five
percent cap, the number of noncomplying vehicles would correspond to
the manufacturer's pro rata share of the industry-wide exceedance. EPA
would determine these noncomplying vehicles in the same manner as for
violations of the fleet average NMOG standards, starting with vehicles
in engine families with the highest certification NMOG values.
Manufacturers would not be required to prepare an annual report
demonstrating compliance with the five percent cap provision because
all relevant data will be provided to EPA under the requirements of the
fleet average NMOG program. However, manufacturers would still be
required to maintain accurate records and failure to do so could result
in EPA voiding ab initio the certificates of the affected vehicles and
imposing any other applicable penalties.
5. Tailpipe Emissions Testing
This section discusses how exhaust emission standards will be
measured for NLEVs during vehicle certification testing. To specify the
exhaust emission standards that NLEVs must meet, it is necessary to
specify the test procedure and fuel used to measure exhaust emissions.
For the National LEV program, this is complicated by the fact that EPA
has recently completed revisions to its test procedure used to measure
exhaust emissions. 61 FR 54852 (October 22, 1996). CARB is also in the
process of changing its test procedure. This section discusses how the
National LEV program will be affected by the EPA and CARB changes to
the FTP. This section also discusses the test fuel to be used for
measuring National LEV exhaust emissions.
a. Federal Test Procedure. The FTP, as revised, is the vehicle test
procedure that will be used by EPA and CARB to determine compliance of
LDVs and LDTs with the conventional or ``on-cycle'' exhaust emission
standards. EPA and CARB use the FTP to test vehicle emissions
performance over a ``typical'' driving schedule, using a dynamometer to
simulate actual road conditions. EPA recently revised the FTP to
replicate actual driving patterns more accurately. In addition to
requiring an equipment change to the existing FTP, the revisions add
new ``off-cycle'' test sequences (Supplemental Federal Test Procedure
or SFTP) and standards to control emissions under driving patterns not

[[Page 31219]]

tested under the old FTP.⁴⁷ This section discusses the
revisions to the FTP and their ramifications for National LEV.
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\47\ For purposes of this discussion, the FTP is the old on-
cycle test procedure. The FTP, as revised, is the on-cycle test
procedure with the new dynamometer. The SFTP is the test procedure
for the off-cycle driving patterns.
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The FTP revisions have been under consideration for several years.
As the Agency noted in the preamble to the National LEV proposal, EPA
was pursuing changes to the FTP through a separate rulemaking under
section 206(h) of the CAA, which requires EPA to ``review and revise as
necessary [the FTP] to insure that vehicles are tested under
circumstances which reflect the actual current driving conditions under
which motor vehicles are used. * * *'' After an extensive test program
and review of available data, the Agency concluded in 1994 that
modifications to the FTP were necessary. Shortcomings identified in the
review included a poor representation of actual road load conditions by
the standard FTP dynamometer and regimes of non-FTP or ``off-cycle''
driving whose absence from the existing FTP drive cycle (the Urban
Dynamometer Driving Cycle or UDDS) had potentially significant
emissions impacts.
EPA published a Revised FTP proposal on February 7, 1995 (60 FR
7404). Key elements of the proposal were an improved dynamometer
specification, and new off-cycle requirements for aggressive driving
and air conditioning emission standards, and a new Supplemental Federal
Test Procedure (SFTP) for determining compliance with those standards.
The only major change proposed for on-cycle compliance was the
dynamometer revision (e.g., the UDDS itself was unmodified). The
stringency of the proposed off-cycle emission standards was based on
the technologies found in vehicles certified to the current, federal
on-cycle (Tier 1) emission standards. A final rule implementing the
SFTP was published on October 22, 1996. 61 FR 54852. EPA did not
propose LEV-stringency off-cycle standards as part of its Revised FTP
rulemaking or as part of the National LEV rulemaking.
EPA and CARB have coordinated closely their review of the FTP,
their research efforts, and the development of their respective off-
cycle policies. (The vehicle manufacturers have also contributed
significant testing resources and technical analysis to the program.)
CARB is likely to make changes identical to EPA's changes to the on-
cycle test procedure. CARB also is likely to adopt off-cycle standards
and requirements that it deems appropriate for TLEVs, LEVs, and ULEVs.
The American Automobile Manufacturers Association (AAMA), the
Association of International Automobile Manufacturers (AIAM), and CARB
have now reached an agreement regarding off-cycle emission standards
for LEVs and ULEVs. The agreement to date is summarized in
correspondence (available in the public docket for this rulemaking)
between the auto manufacturers and CARB. That agreement centers upon
establishing low-mileage (4,000 miles) emission standards to assure
control of emissions from new motor vehicles using the off-cycle
driving schedules, while relying on a revised FTP, as well as OBD II
systems, to monitor deterioration of in-use emissions. The 4,000 mile
standard for LEVs and ULEVs is believed to require controls
significantly more stringent than would be required by applying the
recently promulgated federal off-cycle standards. CARB released a
public mailout on April 3, 1997, that details their proposed off-cycle
emissions standards, and expects to submit a proposal to their Board in
July of 1997. The auto manufacturers have concluded that the finalized
CARB SFTP standards, if consistent with their agreement with CARB, are
appropriate to extend to the National LEV program.
In the National LEV NPRM, EPA proposed to apply the Revised FTP
(both on-cycle and off-cycle components), once it was finalized, to
vehicles in the National LEV program. Further, the Agency stated its
intent to harmonize National LEV requirements with any off-cycle FTP
revisions that California subsequently adopts for its LEV program. The
Agency received only one comment in response to the National LEV
proposal on the interplay between the Revised FTP effort and the
National LEV rule. That comment supported including the SFTP and the
associated off-cycle emission standards in the Stable Standards.
EPA's treatment of the FTP in this final National LEV rule is
consistent with the proposal. Changes to the light-duty test procedures
promulgated in EPA's final Revised FTP rulemaking apply to NLEVs as
well as to the rest of the light-duty fleet. Thus, the revised FTP will
be used to determine compliance with the TLEV, LEV, and ULEV on-cycle
exhaust standards set forth in IV.B.1. In addition, unless and until
California adopts off-cycle standards for LEVs and ULEVs, all NLEV
vehicles must meet the off-cycle exhaust standards recently adopted by
EPA (40 CFR 86.000-8 and 40 CFR 86.000-9). EPA intends to take further
comment in the SNPRM on what off-cycle standards and phase-in should
apply to all vehicle types in the National LEV program if California
adopts off-cycle standards for LEVs and ULEVs. EPA intends to harmonize
its off-cycle standards for LEVs and ULEVs with California once
California adopts such standards. If the final CARB SFTP standards are
consistent with the CARB/manufacturer agreement, EPA intends to propose
to adopt the CARB 4,000 mile standard for LEVs and ULEVs under the NLEV
program, which would probably make compliance with the recently
promulgated federal off-cycle standards unnecessary for these vehicle
types.
b. Compliance Test Fuel. EPA is today adopting the National LEV
compliance fuel provisions as they were proposed. Manufacturers will
determine their certification fuel specifications for exhaust testing
of both petroleum and alternative fuel NLEVs according to California's
certification fuel requirements. Those regulations currently include
the option to certify gasoline TLEVs, LEVs, and ULEVs on either federal
fuel or California Phase II reformulated gasoline. Tier 1 vehicles must
continue to be certified on federal fuel. The approach to
specifications for alternative fuels and the rationale for that
approach are the same as given in the NPRM (50 FR 52755 (col. 3)).
Data presented by California and others during the adoption of
California's LEV program emission standards show that the use of
California Phase II gasoline will reduce vehicle emission levels during
exhaust testing compared to testing using federal certification fuel,
thus having a direct impact on the ability of manufacturers to meet the
standards. In the NPRM, EPA stated a belief that it cannot allow the
use of California Phase II gasoline to demonstrate compliance with Tier
1 standards because that would not demonstrate compliance with the
mandatory federal standards, but solicited comment on this issue. EPA
is finalizing its proposed requirement that federal fuel must be used
to certify Tier 1 vehicles.
There are several logistical reasons to allow manufacturers to use
California Phase II as a certification fuel in the National LEV
program. Allowing use of the same certification fuel in the California
and federal programs will reduce the manufacturers' cost of
demonstrating compliance, while still ensuring that the CAA-mandated
exhaust standards are met. Moreover, under OTC state adopted LEV
programs, all the OTC States would be required to allow the use of
California Phase II gasoline for emission compliance. Consequently,
using California Phase II

[[Page 31220]]

gasoline for certification demonstrations in OTC States will not reduce
the environmental benefits of National LEV relative to the benefits of
OTC state-by-state adoption of CAL LEV programs.
The use of California Phase II gasoline for certification and
compliance testing does not mean that in-use fuels will need to be
changed to conform to the test fuel. In-use fuels, which are not being
changed as a result of National LEV, are discussed later (section
IV.B.7.).
c. NMOG vs. NMHC. Today's rule adopts California's NMOG measurement
procedure to measure hydrocarbon (HC) emissions for the National LEV
standards, as described in more detail in the NPRM (60 FR 52755). The
measurement of oxygenated HC is more accurate under the NMOG procedures
as compared to the current federal method. Moreover, vehicles that meet
the TLEV, LEV, or ULEV NMOG standard will clearly be in compliance with
the federal Tier 1 NMHC standard.
d. Reactivity Adjustment Factors. The National LEV program adopts
California's approach of using RAFs to adjust vehicle emission test
results to reflect differences in the impact on ozone formation between
an alternative-fueled vehicle and a vehicle fueled with conventional
gasoline. The reasons for using RAFs for alternative-fueled vehicles
are described fully in the NPRM (60 FR 52756 (col. 1)). California has
already developed RAFs for some fuel types--including California Phase
II gasoline--and has a process in place to develop RAFs for fuels that
do not yet have them. Additionally, California allows manufacturers to
use this process to develop their own engine family-specific RAFs and
RAFs for fuel types for which California has not yet developed them. In
the National LEV program, the Agency will use the RAFs already adopted
by California for alternative-fueled vehicles certifying to the
National LEV standards, and intends to incorporate RAFs that California
develops for other fuels, as California develops and adopts them. EPA
will also allow manufacturers certifying to the National LEV standards
to develop their own RAFs, subject to Agency approval, using the
California process for RAF development.
EPA received comments both supporting and opposing the adoption of
California's RAF provisions. The Agency has determined that the
application of RAFs adopted in California for certification of vehicles
to the National LEV standards on a nationwide basis, as proposed, is
within the scope of EPA's authority under the CAA, and is reasonable
and appropriate to further the goal of harmonization of the federal and
California motor vehicle emissions control programs. See the Response
to Comments documents for further discussion.
6. On-Board Diagnostics Systems Requirements
The National LEV program requires on-board emissions diagnostics
systems that meet California's second phase OBD requirements (OBD II),
except that compliance with the tampering protection provisions of the
California OBD II regulations is not required. For reasons specified in
the Federal Register notice of court decisions regarding Agency
regulations,⁴⁸ the Agency has vacated and subsequently
deleted OBD-related tampering protection requirements from the federal
OBD regulations. In the National LEV proposal, EPA specifically
excluded the anti-tampering provisions of the California OBD II
requirements from the National LEV regulations. The Agency has
maintained this approach in these final regulations. The incorporation
of California OBD II into these regulations specifically excludes
paragraph (d), the anti-tampering provisions (see Appendix XIII in 40
CFR part 86, paragraph (e)). Therefore National LEV carries no
requirement that vehicles comply with the tampering protection
provisions of the California OBD II regulations. With the exception of
the additional provisions discussed in the following paragraph, the OBD
requirements for National LEV program vehicles are finalized as they
were proposed. For a discussion of the California OBD II requirements
and the rationale for EPA's adoption of them, see the NPRM (60 FR
52755).
---------------------------------------------------------------------------

\48\ 59 FR 51114 (October 7, 1994).
---------------------------------------------------------------------------

In response to comments received by EPA (see Response to Comments
for additional detail), the Agency has added language to these final
regulations specifying that all vehicles certified under this program
must meet the requirements of sections 202(m) (4) and (5) of the CAA.
Commenters asserted that, even if EPA were not to include the OBD II
anti-tampering requirements with the National LEV regulations, EPA
would, nevertheless, be in violation of CAA sections 202(m)(4) and
202(m)(5), should a vehicle be certified nationally that contained
California's OBD II anti-tampering measures. As EPA is taking no action
in this rulemaking that would change manufacturer obligations or
options regarding the use of anti-tampering measures, EPA does not
address this claim in this rulemaking. In a separate proceeding dealing
with California's request for a waiver of preemption for its OBD II
program under section 209 of the Act, the Agency has considered the
issue of whether a vehicle certified to all of California's OBD II
requirements, including compliance with the tampering protection
provisions of OBD II, is in violation of section 202 (m)(4) or (m)(5).
(See Docket No. A-90-28, 61 FR 53371 (October 11, 1996)). However, EPA
intends to ensure that no vehicle certified under the National LEV
program violates sections 202(m) (4) or (5) of the Act. Thus, EPA has
added language to the final regulations making clear that any
manufacturer attempting to certify a vehicle under the National LEV
program will not be permitted to do so if the vehicle violates sections
202(m) (4) or (5). Thus, if it is determined that California's
tampering protection provisions violate sections 202(m) (4) or (5),
vehicles with such equipment will not be permitted under the National
LEV program.
EPA also received a comment stating that EPA's Service Information
Availability (SIA) regulation (40 CFR 86.094-38(g)) will be
circumvented by this rulemaking. However, the National LEV regulations
do not circumvent EPA's SIA regulations. Such SIA regulations apply
fully to all vehicles certified under the National LEV program, as is
true for all part 86 regulations not specifically superseded by subpart
R.
The commenter also stated that EPA should not allow states outside
California to adopt California regulations, including OBD II. The CAA
does not give EPA authority to prevent states from adopting
California's regulations. To the contrary, the CAA specifically gives
states the right to decide whether to adopt California's program. Under
section 177, states have full authority to promulgate California
emission standards and other procedures. Two states have had such
regulations in effect for several years and four more have recently
adopted such regulations. EPA has only an indirect role in this state
process and cannot prevent any state from adopting California
regulations. EPA notes that section 177 of the Act provides stringent
guidelines for states that wish to implement California's emissions
control standards: state standards must be identical to California
standards; states may not cause the creation of a ``third vehicle;''
and states may not limit the manufacture or sale of a motor vehicle
that has been certified as meeting California's standards. Thus, as
long as California's anti-tampering provisions remain in place, states
may

[[Page 31221]]

be somewhat constrained by CAA section 177 to accept California's anti-
tampering requirements.
On the other hand, the National LEV program that EPA is approving
today specifically excludes the anti-tampering requirements from its
regulations, thus providing manufacturers with the ability not to
include such provisions in their vehicles. It also contains specific
language stating that all vehicles certified under this program must
meet the requirements of CAA sections 202(m) (4) and (5). Thus, the
National LEV program actually provides considerably more protection for
the commenters than would the state LEV programs which the National LEV
program would replace.
7. In-Use Fuel
In the proposal, EPA reiterated a set of three principles agreed
upon by representatives of the auto industry, some segments of the oil
industry, and the OTC States:
(1) Adoption of the National LEV program does not impose unique
gasoline requirements on any state. Gasoline specified for use by any
state will have the same effect on the National LEV program as on the
OTC LEV program.
(2) Testing is needed to evaluate the effects of non-California
gasoline on emissions control systems.
(3) If testing results show a significant effect, EPA will conduct
a multi-party process to resolve the issue without adversely affecting
SIP credits or actual emission reductions when compared to OTC LEV
using fuels available in the OTR or imposing obligations on
manufacturers different from the obligations they would have had under
OTC LEV.
One area where discussions have already started relates to current
auto and oil industry studies that address, among other things, the
possibility that changes in the malfunction indicator light (MIL)
illumination criteria for National LEV on-board diagnostics systems
might be appropriate. Provided that the above criteria were met and the
manufacturers agreed, the National LEV program would not preclude a
future EPA rulemaking to change the MIL illumination criteria for the
OBD systems. EPA has recently issued a discussion paper summarizing its
current understanding of sulfur effects on OBD catalyst monitoring on
LEVs and will continue working with interested parties in developing a
resolution of this issue.⁴⁹
---------------------------------------------------------------------------

\49\ OBD & Sulfur White Paper, March 1997, (Docket No. A-95-26,
IV-B-06).
---------------------------------------------------------------------------

The Agency's approach to in-use fuels for the National LEV program
remains essentially the same as was presented in the proposal. EPA is
adopting the National LEV program on the condition that it does not
require a change in federal fuel regulations. Thus, section 86.1705-
97(g)(5) requires auto manufacturers to design National LEV vehicles to
operate on fuels that are otherwise required under applicable federal
regulations.
EPA retains its authority to adopt new fuel requirements for
reasons other than the sale or design of vehicles sold because of the
National LEV program.
8. Hybrid Electric Vehicles
The National LEV program adopts California's approach to regulating
emissions from HEVs, which is discussed fully in the NPRM (60 FR
52756). HEVs are powered by batteries, but also use a small combustion
engine for additional range. The emissions from HEVs range from none,
when running off the battery, to levels similar to TLEVs, when using
the combustion engine. For certification, HEVs will be tested with the
engine operating at worst case conditions over the standard test cycle.
An HEV must meet the TLEV, LEV, or ULEV emission standards based on
emissions from its combustion engine. This ensures that in the worst
case situation, HEVs will still comply with the least stringent set of
LEV standards. However, some HEVs will have to demonstrate compliance
with different, somewhat less stringent, useful life standards for
certification, depending upon the type of HEV being certified. In
addition, an HEV's contribution to the manufacturer's NMOG fleet
average will be calculated to account for the emissions benefits of its
battery-powered operations. This approach is consistent with
California's methodology for calculating a manufacturer's compliance
with the NMOG fleet average standards.
The Agency is also adopting California's definitions of the
following terms: electric vehicle, hybrid electric vehicle, series
hybrid electric vehicle, and parallel hybrid electric vehicle. One
commenter on the NPRM stated that these definitions are unnecessarily
narrow and could adversely affect the United States fuel cell industry.
The Agency acknowledges the commenter's concerns, but believes that the
vehicle for change in this case rests with CARB. CARB staff have
acknowledged the need to amend the current regulations as they pertain
to HEVs given the rapid advancement of technology in the last five
years, and are consequently preparing to revise and update their
program to deal with these types of vehicles more appropriately.
Although the timing of CARB's final action is not certain, EPA intends
to make changes to the National LEV regulations to incorporate CARB's
finalized actions if and when it becomes appropriate to do so. The
Response to Comments document contains additional discussion regarding
this issue.

C. Low Volume and Small Volume Manufacturers

Today's rule adopts a new term, ``low volume manufacturer,'' to
mean a manufacturer that meets the California definition of a small
volume manufacturer ⁵⁰ and that has no more than 40,000
⁵¹ sales nationwide of LDVs and LLDTs per model year, based
on the average sales over the last three model years. This definition
will be used solely to determine the NMOG fleet average applicable to
low volume manufacturers and whether a manufacturer must comply with
the five percent cap on OTR sales of Tier 1 vehicles and TLEVs. Under
today's rule, low volume manufacturers will not have to meet an NMOG
average until MY2001, when they must meet an NMOG average of 0.075 g/mi
in both the NTR and the 37 States trading regions. This treatment is
consistent with the California LEV program's treatment of these
manufacturers. The Agency will continue to apply the federal small
volume manufacturer provisions, which provide relief from emission data
and durability showings and reduce the amount of information required
to be submitted, to small volume manufacturers (as defined in current
federal regulations). Further explanation of and rationale for the low
volume manufacturer provisions are provided in the NPRM (60 FR 52756-
52757).
---------------------------------------------------------------------------

\50\ California defines a small-volume manufacturer as a
manufacturer with sales in California of no more than 3000 vehicles
that meet the CARB definitions of passenger cars, light-duty trucks,
and medium-duty vehicles per model year, based on the average sales
over the last three model years.
\51\ EPA had requested comment on the appropriate level for a
national annual sales limit. The Agency chose 40,000 as the level
that will preclude post-NLEV attempts to ``game'' the program while
still allowing manufacturers to proceed with current vehicle
distribution decisions.
---------------------------------------------------------------------------

D. Legal Authority

EPA has statutory authority to promulgate the National LEV
standards under sections 202(a) and 301(a) of the CAA, as discussed
more fully in the NPRM (60 FR 52757-52758). Section 202(a)(1) directs
the Administrator to prescribe standards for control of air pollutant
emissions from motor vehicles. This is an affirmative grant of

[[Page 31222]]

authority to the Administrator that allows her to set voluntary, as
well as mandatory, motor vehicle air pollution standards. Today's
voluntary standards are not precluded by section 202(b)(1)(C), which
states that it is the intent of Congress that EPA not modify the
mandatory ``Tier 1'' standards, promulgated under section 202(g), prior
to MY2004. In addition, section 301(a) authorizes the Administrator to
promulgate regulations necessary to carry out her functions under the
Act. The voluntary standards proposed here fall within the
Administrator's duty to implement the broad air pollution reduction
purposes of the Act.
Section 202(a)(1) gives the Administrator authority to promulgate
regulatory standards for emissions of air pollutants from motor
vehicles. This subsection provides:

[T]he Administrator shall by regulation prescribe (and from time
to time revise) in accordance with the provisions of this section,
standards applicable to the emission of any air pollutant from any
class * * * of new motor vehicles * * *, which in his judgment
cause, or contribute to, air pollution which may reasonably be
anticipated to endanger public health or welfare.

This is a broad grant of authority to the Administrator to
prescribe standards, including voluntary standards, to regulate
emissions that contribute to air pollution. Section 202(a) of the Act
expressly allows--in fact, it requires--EPA to promulgate emission
standards for motor vehicles. The language of section 202(a) does not
indicate that such standards be limited to mandatory standards.
The National LEV program will regulate HCs, CO and NO<INF>X</INF>.
These three pollutants are among the most significant contributors to
air pollution in the United States and, thus, ``may reasonably be
anticipated to endanger public health or welfare.'' The strong CAA
focus on controlling these pollutants indicates Congress' concern about
the harm they cause and the need for their reduction.
Section 202(a) authorizes EPA to issue the fleet average NMOG
standard (and the five percent cap on Tier 1 and TLEV sales in the
OTR), as well as the emission standards individual vehicles must meet.
That section's reference to ``standards applicable to the emission of
any air pollutant'' includes requirements that are applicable to fleets
of vehicles. ``Standards'' does not merely mean the emission levels to
which individual vehicles are tested. For example, section 202(g)
requires the Agency to promulgate ``standards which provide that
emissions from a percentage of each manufacturer's sales volume of such
vehicles and trucks shall comply [with specified levels].'' Thus, the
Agency may promulgate standards, such as fleet averages, phase-ins, and
averaging, banking, and trading programs, that are fulfilled through
compliance over an entire fleet, or a portion thereof, rather than
through compliance by individual vehicles.
The Administrator's authority under section 202(a)(1) is limited
only by the requirement that such standards be ``in accordance with the
provisions of'' section 202. As discussed in the NPRM, nothing in
section 202 bars EPA from adopting emission standards that would be
binding if and only if a manufacturer were to opt into them. Nor is any
provision of section 202 inconsistent with a voluntary approach, so as
to implicitly bar EPA's action.
The voluntary standards do not conflict with section 202(b)(1)(C),
which prohibits EPA from changing the Tier 1 emissions standards prior
to MY2004. Section 202(b)(1)(C) states that ``[i]t is the intent of
Congress that the numerical emission standards specified in subsections
(a)(3)(B)(ii), (g), (h), and (i) shall not be modified by the
Administrator * * * for any model year before the model year 2004.''
This language indicates Congress' intent to prohibit modification of
the mandatory federal Tier 1 standards for NMHC, NO<INF>X</INF>, CO and
PM. The promulgation of National LEV would not modify the Tier 1
standards because the program merely creates a set of voluntary
standards, authorized under section 202(a), that manufacturers are
permitted, but not required, to accept. EPA would not be modifying the
Tier 1 standards itself. The Tier 1 standards will remain in effect,
but manufacturers could choose to meet them by opting into National
LEV. For manufacturers that do not opt into National LEV, the Tier 1
standards will be fully applicable. Congress did not intend to prevent
manufacturers from voluntarily agreeing to meet reduced emission
standards.
Some comments state that section 202(b)(1)(C) does not distinguish
between voluntary and mandatory standards. However, such comments are
inapposite. Section 202(b)(1)(C) does not prevent voluntary standards;
on the contrary, it merely prohibits modifications to the Tier 1
standards. Since the National LEV program does not modify the mandatory
Tier 1 standards, which remain fully effective, it is not prohibited by
section 202(b)(1)(C). In fact, though the court in Virginia v. EPA, No.
95-1163 (D.C. Cir. March 11, 1997), found that section 202(b)(1)(C)
forbids EPA from ``requir[ing], mandat[ing], order[ing], or impos[ing]
conditions demanding that any state enact particular motor vehicle
emission standards,'' slip op. at 32, the court specifically declined
to make any determinations regarding the proposed National LEV program,
noting that the ``program is voluntary,'' slip op. at 10, n.4. This
language implicitly distinguishes the National LEV program from the
mandated program struck down in that case.
Moreover, the voluntary standards approach does not violate the
intent of section 202(b)(1)(C) because it would expand, not restrict,
motor vehicle manufacturers' options. Congress passed section
202(b)(1)(C) to protect manufacturers from EPA actions mandating a more
restrictive national motor vehicle emissions program. However, in the
context of the states' adoption of California LEV programs, these
voluntary regulations actually have the effect of allowing
manufacturers more flexibility in meeting their legal requirements.
Were the voluntary standards program not promulgated, manufacturers
would have to meet state LEV programs in the Northeast. The
promulgation of the voluntary standards provides manufacturers with
another method of meeting emission requirements in the Northeast. It
would be an absurd result for section 202(b)(1)(C), which was enacted
to protect manufacturers from regulations requiring tighter emission
standards, to be interpreted to prevent manufacturers from volunteering
into a program that would relieve them from meeting state regulations
requiring such tighter standards.
Regarding comments that parties other than manufacturers are
affected by the National LEV program, EPA's authority to require
automobiles to meet emissions requirements under section 202(a) is
directed towards automobile manufacturers. Though other parties may be
indirectly affected by regulations promulgated under section 202, only
manufacturers are directed to act in a certain manner by these
regulations. Manufacturers are, of course, always permitted to build
vehicles that meet a more stringent standard. In fact, manufacturers
currently produce many vehicles that meet California's emission
standards (50-state vehicle families). The effect of the National LEV
program on other parties is no different than the effect on such
parties if a manufacturer decided, in the absence of this program, to
build vehicles to more stringent standards. The decision as to what
emissions level a vehicle will meet is the choice of the

[[Page 31223]]

manufacturer based on marketing and other business decisions.
Moreover, this national emissions program creates significant
benefits to consumers throughout the nation. Numerous states throughout
the nation contain areas that are not in attainment with the National
Ambient Air Quality Standard for ozone. Reductions in other pollutants
also help produce cleaner air in areas throughout the nation regardless
of their ozone status. Congress recognized that a central national
program for control of emissions from automobiles is the best way to
manage emissions from new motor vehicles. This is why Congress
specifically preempted states from promulgating their own emission
reduction programs for new motor vehicles in section 209 of the Act.
The only exception in the Act is for California, which has special
environmental concerns that are explicitly recognized by Congress.
Other states may only use the federal auto emissions program or
standards identical to California's standards. Manufacturers have
stated, in fact, that even this limited ability of individual states to
``piggyback'' on California's regulations can cause significant
commerce and cost concerns. Thus, the federal National LEV program
appears to be consistent with the intent of Congress to encourage
consistent vehicle regulations throughout the United States.
Section 301(a) provides a further source of EPA authority to
promulgate the voluntary standards. Section 301(a) authorizes the
Administrator ``to prescribe such regulations as are necessary to carry
out his functions under this chapter.'' The primary purpose of the CAA
is to protect and enhance the quality of the Nation's air resources by
reducing air pollution. Controlling emissions from mobile sources is a
key means for achieving the Act's purpose, and Congress recognized this
in enacting the mobile source provisions. In addition, in numerous
places throughout the Act, Congress demonstrated its concern that these
goals be achieved in an efficient and cost-effective manner, minimizing
the costs of air pollution control to the extent possible. In
promulgating these voluntary standards, the Administrator is advancing
the basic pollution reduction goals of the CAA in a manner that
supports state efforts and is relatively cost-effective compared to OTC
state-by-state adoption of CAL LEV programs. Because the decision to be
subject to these standards is voluntary, EPA is simply providing an
opportunity for an alternate means of compliance, rather than mandating
new requirements for manufacturers. These actions are consistent with
section 202 and the rest of the Act, and are well within the Agency's
broad authority under section 301(a).

E. Enforceability and Prohibited Acts

As discussed in the NPRM, once manufacturers have opted into the
voluntary program, the program will become fully enforceable against
them. Manufacturers will be liable for compliance with these
regulations to the same extent they are liable for compliance with
other federal motor vehicle regulations. The manufacturers will have to
comply with virtually the same testing regime (certification, SEA, and
in-use recall testing) and the same warranty requirements as for other
standards. Any manufacturer that has opted into the program and
subsequently fails to comply with the requirements of the program will
be subject to sanctions under sections 203, 204 and 205 of the Act.
Manufacturers and other violators do not have a defense regarding
the applicability of these sections to the voluntary program because
such applicability is explicitly found in the regulations. Under
section 307(b), any challenge to the National LEV provisions must be
made within 60 days of publication of the final rule. Failure to
challenge these regulations within the 60 day period for judicial
review will prevent any person from subsequently challenging the
enforceability of these regulations. In addition, in their opt-in
notifications, manufacturers will have committed not to challenge EPA's
legal authority to establish and enforce the National LEV program, and
to seek to certify vehicles only in compliance with the National LEV
requirements.

V. National LEV Will Produce Creditable Emissions Reductions

The National LEV NPRM included an extensive discussion of the
criteria for National LEV to be an ``acceptable LEV-equivalent
program'' for purposes of satisfying the OTC LEV SIP call. In light of
the OTC LEV court decision invalidating the OTC SIP call (see III.C.3.
above), there is no longer any federal legal requirement for National
LEV to be an acceptable LEV-equivalent program. Nevertheless, it is
still useful to look at the factors that EPA proposed to consider in
making its determination. These factors bear on whether National LEV
will be acceptable to both the OTC States and the manufacturers, and
whether EPA will be able to grant states SIP credits for National LEV.
EPA proposed to define an acceptable LEV-equivalent program as a
program that (1) would achieve VOC and NO<INF>X</INF> emissions
reductions from mobile sources in the OTR equivalent to or greater than
those that would be achieved by OTC LEV, and (2) would be enforceable.
It is still important for EPA to consider these factors in promulgating
the National LEV program, although the factors now have a different
legal significance. The first criterion, emissions equivalency, is no
longer a legal requirement. Nonetheless, EPA anticipates that when the
OTC States decide whether to commit to National LEV, they will be
interested in whether National LEV would achieve emissions reductions
equivalent to the reductions that the OTC States would achieve absent
National LEV. The second criterion, enforceability, retains legal
significance; for EPA to credit states for SIP purposes with emissions
reductions from National LEV, National LEV must be enforceable for its
anticipated duration.
As to the first criterion, EPA today finds that National LEV, as
set forth in today's rule, and OTC LEV, as set forth in the OTC LEV SIP
call, would produce equivalent VOC and NO<INF>X</INF> emissions
reductions. With respect to the second criterion, EPA finds that
National LEV is enforceable with respect to the elements of the program
that are completed in this rule. In promulgating the final outstanding
provisions of National LEV for OTC State commitments and related
issues, EPA will have to ensure that the complete program is adequately
enforceable for states to rely on National LEV for emissions reductions
and for EPA to grant states SIP credits on this basis.
This rule also establishes the criteria for a subsequent finding
that National LEV is in effect. Once manufacturers have opted into and
the OTC States have committed to National LEV, if the criteria for an
in-effect finding are met, EPA will find that the program is in effect
and will publish that finding in a Federal Register notice. Once EPA
has found National LEV in effect, the National LEV emissions standards
will be enforceable against covered manufacturers for the duration of
the program.⁵²
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\52\ As discussed in the proposal, a number of parties have
suggested that advancing motor vehicle pollution control technology
is an important benefit of OTC LEV and should be a criterion for
determining whether National LEV is an acceptable LEV-equivalent
program. Although EPA agrees that advancing technology is an
important policy goal, and EPA believes that the National LEV
program could be a part of an agreement that would provide important
opportunities to promote ATVs, the regulatory portion of the
National LEV program does not address ATVs, EPA does not believe
that advancing technology is or should be a legally-required
criterion for approval of a LEV-equivalent program, and given the
court decision invalidating the OTC LEV SIP call, there is no longer
any legal requirement for National LEV to be a LEV-equivalent
program. Virginai v. EPA, No. 95-1163 (D.C. Cir. March 11, 1997).
Nevertheless, EPA recognizes that including some advanced technology
component is important for all the parties to reach agreement on an
MOU and could provide additional environmental benefits beyond
emissions reduction equivalency.
To meet the parties' interests in promoting the development of
ATVs, the auto manufacturers and the OTC States had agreed on
language for an ``ATV component,'' which was to be included as an
attachment to the MOV they were negotiating if they were to finalize
that agreement. EPA supports the approach the OTC States and auto
manufacturers have been discussing to introduce and establish ATVs
in the OTR and urges the parties to complete those efforts.
The ATV component that the OTC States and auto manufacturers
included in their initialed MOUs is a unique agreement that would
use an on-going, cooperative relationship to focus on shared
visions, commitments and responsibilities. The parties would
identify and address the means to achieve a viable ATV market,
including infrastructure development, vehicle technology
improvements, and incentive programs. The ATV component would rely
on California's program to force technology development, and would
ensure that technology takes hold in the OTR by having the parties
jointly identify vehicle sales estimates and then work in an
integrated manner to develop and execute the tasks necessary to
establish and maintain a sustainable, viable market for ATVs at the
retail level. The ATV component anticipates that OTC States, major
motor vehicle manufacturers, other states, EPA, the Department of
Energy, fuel providers, converters, fleet operators, and other
manufacturers of specialty motor vehicles would each have roles to
play to facilitate the introduction of ATVs. The ATV component
presents the parties with an important opportunity to show that
government/industry partnerships can achieve important environmental
benefits and do so in a way that provides the parties with greater
flexibility, while still holding them responsible for achieving the
end goal.
The ATV component defines an ATV as a vehicle that is certified
by CARB for sale in California or certified by EPA for sale outside
of California and that is (1) a dual-fuel, bi-fuel, or dedicated
alternatively fueled vehicle certified as a TLEV or more stringent
when operated on the alternative fuel, (2) certified as a ULEV or
ILEV using any fuel, or (3) a dedicated electric vehicle or HEV.
EPA would work with each state individually to determine the
appropriate SIP credit for the ATV component once the program is
implemented. As ATVs are bought in individual states, EPA and the
state would be able to calculate the emissions benefits for the life
of the ATVs. In addition, EPA would also work with states to
determine whether and what SIP credit is appropriate for specific
measures (such as commitments to buy a specified number of ATVs).

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[[Page 31224]]

A. Emissions Reductions From National LEV

There is no longer any federal legal requirement for the emission
reductions from National LEV to be equivalent to those from OTC LEV.
Nevertheless, to help the parties evaluate the relative merits of
National LEV compared to OTC state-by-state adoption of the CAL LEV
program, EPA is here presenting its conclusion that the NO<INF>X</INF>
and VOC emissions reductions from new motor vehicles within the OTR
under National LEV would be equivalent to those produced by each OTC
State's adoption of the CAL LEV program within the timeframe provided
by the OTC LEV SIP call, based on EPA's modeling of the two programs.
All of EPA's analyses of this issue lead to the same conclusion: given
current assumptions about future vehicle performance and given the best
currently available information about the migration of people and
vehicles, it is reasonable to conclude that the NO<INF>X</INF> and VOC
emissions benefits in the OTR of the National LEV program and each OTC
State's adoption of the CAL LEV program are essentially equivalent. EPA
has reviewed the comments on equivalency of the two approaches and
continues to believe that EPA's analyses and conclusion are correct.
More detailed discussions of EPA's approach to the modeling and the
results and responses to specific comments are presented in the NPRM
(60 FR 52759-52760), memoranda to the Subcommittee cited in the NPRM,
the RIA for the OTC LEV final rule and for this final rule, and the
Response to Comments document for this final rule.
To date, all of EPA's analysis of this issue has compared National
LEV with OTC LEV, which presumes that every OTC State would adopt the
CAL LEV program effective MY1999. Because the discussion below presents
the results of this analysis, and because OTC LEV is simply shorthand
for adoption of CAL LEV by each OTC State within the timeframe
specified in the OTC LEV SIP call, the discussion below continues to
reference the equivalence of National LEV and OTC LEV. Although the two
approaches as implemented would likely have different start dates than
what EPA has modeled, EPA does not believe that will undermine the
finding that National LEV would produce acceptable emission reductions
as compared to OTC state-by-state adoption of CAL LEV. EPA believes it
is unrealistic for National LEV to start with MY1997, but it is also
impossible for most OTC States to have CAL LEV programs effective
MY1999. Thus, both programs would likely be implemented with start
dates later than what was modeled. In the SNPRM, EPA will discuss the
relative emissions effects of these changed circumstances. Nonetheless,
EPA's conclusion that the two programs as designed produce equivalent
emissions in the OTR is still useful information. EPA believes that the
underlying modelling contains valid assumptions regarding the potential
emissions reductions from a national versus a regional approach to
motor vehicle emission control. Thus, EPA's basic modelling approach
remains applicable, regardless of any changes in program start dates.
Also, EPA's equivalency conclusion provides a baseline for any
subsequent reevaluations of the relative benefits of the two
approaches; as long as any changes in start dates do not
disproportionately reduce the emissions benefits from National LEV,
National LEV would continue to reduce emissions in the OTR at least
equivalent to the emissions that would be reduced by OTC state-by-state
adoption of CAL LEV. This information will be important to OTC States
as they decide whether to commit to accept National LEV in lieu of a
State CAL LEV program.
Table 7 contains the results of EPA's current analysis of the
comparative emissions reductions, as presented in the RIA. This
analysis includes the effects of vehicle migration, as discussed below.
The OTC LEV case shown here assumes that a ZEV sales mandate exists
only in states that have already adopted this mandate (and that it
exists at the level specified in the states' regulations that were
adopted as of September, 1995).⁵³ However, even if it is
assumed that there are ZEV sales mandates throughout the OTR at these
same levels, it does not result in a change in EPA's conclusion that
the emissions benefits of the OTC LEV program, including ZEV mandates
in all OTC States, and the National LEV program are essentially
equivalent.
---------------------------------------------------------------------------

\53\ The modeling was essentially completed prior to CARB's
change to its ZEV mandate regulations, so the modeling is based on
ZEV mandates as they existed prior to CARB's changes.

Table 7.--Ozone Season Weekday Emissions for Highway Vehicles in the OTR
(Tons/day)
------------------------------------------------------------------------
National
Year Pollutant OTC LEV LEV
------------------------------------------------------------------------
2005...................... NMOG 1,491 1,483
NO<INF>X 2,385 2,389
2007...................... NMOG 1,361 1,353
NO<INF>X 2,218 2,212
2015...................... NMOG 1,152 1,144
NO<INF>X 1,943 1,894
------------------------------------------------------------------------

Two factors would clearly be most important to the equivalency
determination. As discussed in section IV.A.3., the National LEV
program was designed to begin in the OTR with MY1997, two years earlier
than the OTC LEV program was required to begin. In addition, beginning
with MY2001, vehicles that migrate into the OTR from

[[Page 31225]]

other states would be substantially cleaner under the National LEV
program than under the OTC LEV program because the National LEV program
applies nationally. For the National LEV program to show equivalent
emissions reductions to the OTC LEV program, these two factors would
have to outweigh the additional benefits attributable to the OTC LEV
program due to its lower fleet average NMOG standard.
EPA's analysis indicates that, in comparing National LEV starting
in 1997 with OTC LEV starting in 1999, the impact of the earlier start
date for the National LEV program was not enough by itself to
compensate for National LEV's higher fleet average NMOG standard,
except in the earlier years of the program. This analysis is based on
existing EPA models and standard assumptions about the future
performance of vehicles under both programs.
The effects of vehicle migration are more difficult to assess.
Because actual state-by-state vehicle migration data were not
available, EPA used human migration data as a surrogate. Using state-
by-state human migration data from the Internal Revenue Service, EPA
estimated the annual migration rate of people into and out of the OTR.
Assuming that vehicles migrate at the same rate as people, EPA then
constructed a simple model to determine what percentage of vehicles in
the OTR vehicle fleet in any year would have been originally sold
outside the OTR, taking into account annual in and out migration rates
as well as motor vehicle scrappage rates. Using this approach, EPA
determined that approximately 6.5 percent of the motor vehicle fleet in
the OTR originated outside the OTR. While a number of commenters
questioned EPA's approach to assessing the impact of migration, none
presented an alternative basis for making this assessment or data
indicating that EPA's assessment is incorrect. When the National LEV
and OTC LEV programs are compared including this migration assumption,
the emissions reductions associated with the two programs are
equivalent.
The OTC States and auto manufacturers had agreed that EPA should
periodically reevaluate the equivalency of National LEV and OTC LEV.
Because equivalency with OTC LEV is no longer a legal criterion for
National LEV, it is not clear that such a periodic reevaluation is
still necessary. EPA plans to take comment on this issue in the SNPRM
on the issue of OTC State commitments to the program. The initialled
MOUs provide that at least every three years, or pursuant to an OTC
request, EPA would perform a modeling evaluation of the emissions
reductions of National LEV compared to OTC LEV. This periodic
evaluation would rely on the mobile source emissions model (MOBILE5a)
used in the original equivalency determination, unless the OTC States,
manufacturers, and EPA agreed to use an updated methodology. The
initialled MOUs further provide that EPA would assess whether National
LEV provides emissions benefits equivalent to the benefits identified
in the original OTC LEV recommendation, taking into account changes in
EPA regulations and their implementation affecting National LEV
vehicles.
If EPA does conduct future comparisons, EPA does not believe it is
accurate or necessary to compare the actual emissions reductions
produced by National LEV to modeled emissions reductions projected to
be produced by OTC state-by-state adoption of CAL LEV programs. To the
extent that actual reductions under the two approaches could vary
according to vehicle mix or other factors not currently anticipated, it
is impossible to predict what actual emissions reductions would have
been under OTC state-by-state adoption of CAL LEV programs. Any
comparison between actual and modeled reductions would be inherently
invalid because the projections would be determined using different
baselines.

B. Enforceability of National LEV

EPA proposed that enforceability would be a legal criterion for EPA
to find that National LEV would be an acceptable LEV-equivalent program
that would relieve the OTC States of their obligations under the OTC
LEV SIP call. Although the OTC LEV SIP call has been vacated, Virginia
v. EPA, No. 95-1163 (D.C. Cir., March 11, 1997), National LEV still
must be enforceable for EPA to grant States credits for SIP purposes.
There are two aspects to ensuring National LEV is enforceable. First,
the National LEV program emissions standards and requirements must be
enforceable against those manufacturers that have opted into the
program and are operating under its provisions. Second, the program
itself must be sufficiently stable to make it likely to achieve the
expected emissions reductions. To achieve the expected emissions
reductions from National LEV, the off ramps must not be triggered and
the program must remain in effect for its expected lifetime. As
discussed below, EPA believes that National LEV meets the first aspect
of enforceability--the program requirements are legally enforceable
against manufacturers in the program. Also, the program elements
finalized today would contribute to a stable National LEV program.
However, ensuring that the National LEV program will be stable over
time also depends on program elements relating to OTC State commitments
to National LEV that will not be finalized until after EPA provides
further notice and comment. At the time of the proposal, the OTC States
and the auto manufacturers had not yet finalized agreement on the
mechanisms through which the States would commit to the National LEV
program or the substance of the OTC State commitments regarding State
section 177 programs. Violation of such commitments would allow
manufacturers to opt out of National LEV. In expectation that the OTC
States and the auto manufacturers would soon finalize agreement on
these elements of the program, EPA deferred taking comment on the
strength of such commitments, the likelihood that an off ramp might be
triggered, or the overall stability of the National LEV program. Thus,
a few key elements necessary for the stability of National LEV are
still outstanding, pending further notice and opportunity for public
comment.
As discussed in the NPRM (60 FR 52760), EPA believes that National
LEV is fully enforceable against those manufacturers that have bound
themselves to comply with the program. Once a manufacturer opts into
the National LEV program, it must comply with the applicable standards.
Because the National LEV regulations are promulgated under CAA sections
202 and 301, a manufacturer that chooses to be covered by these
regulations would be subject to the same enforcement procedures as
exist for the current mandatory federal motor vehicle program. For
example, violations of the National LEV standards provisions would be
subject to sanctions under CAA sections 204 and 205. The certification,
SEA, recall, and warranty provisions of the current federal motor
vehicle program also apply to the National LEV standards, as well as
all other federal motor vehicle requirements not explicitly superseded
by National LEV requirements. The applicability of federal enforcement
provisions ensures that National LEV will be an enforceable program. As
a result, as long as manufacturers continue to be subject to the
National LEV program, the standards and requirements of the program
will be clearly enforceable.
In addition to National LEV being legally enforceable, there will
also be strong practical disincentives to manufacturers either
challenging the

[[Page 31226]]

enforceability of the standards or even taking advantage of a potential
offramp, unless the triggering event is something the manufacturers
consider a substantial burden. The manufacturers strongly support
National LEV as an alternative to individual State CAL LEV programs.
Because manufacturers would have to comply with backstop CAL LEV
programs in one or more States upon an opt-out, manufacturers will be
reluctant to destabilize National LEV. To date, the States of
Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and
Vermont have submitted SIP revisions that require a CAL LEV program
either as the primary program or as a backstop if National LEV is not
in effect. EPA is confident that one or more of these States would
retain a CAL LEV program as a backstop if National LEV were in effect,
as several States have indicated that this is their intent. This would
ensure that if National LEV were not in effect, manufacturers would
have to comply with CAL LEV in one or more States. This level of State
adoption of backstops provides a sufficient measure of program
stability to help make National LEV enforceable.
The only circumstances that would allow the National LEV program to
terminate prematurely would be an OTC State's failure to meet whatever
commitments it makes regarding adoption of motor vehicle programs under
section 177 of the Act or certain EPA changes to Stable Standards.
These circumstances allowing the program to terminate prematurely are
limited, and EPA expects that the OTC States will commit to the
National LEV program in a way that will make premature termination
unlikely to occur due to their actions. EPA is not at this time
evaluating the likelihood that the National LEV program will remain in
effect for the intended duration of the program (i.e., until EPA
promulgates enforceable federal standards that are at least as
stringent as the National LEV standards) because EPA has not yet
evaluated the OTC States' commitments. However, EPA believes that, at
least with regard to an opt-out triggered by a change in the Stable
Standards, premature program termination is highly unlikely.
EPA is confident that the Agency is unlikely to change any of the
Stable Standards in a manner that would give the auto manufacturers the
right to opt out of National LEV. As discussed in section IV.A.,
manufacturers would be allowed to opt out of National LEV if EPA made
certain types of changes to the Core Stable Standards at any time
during the program, or changes to the Non-Core Stable Standards
effective prior to MY2007. The Core Stable Standards are requirements
that EPA does not have the authority to mandate and thus could not
impose absent a voluntary program. In agreeing to specify a larger set
of Stable Standards to include the Non-Core Stable Standards, which are
requirements EPA has authority to modify, the Agency very carefully
evaluated each proposed Non-Core Stable Standard. EPA considered how
recently each standard or requirement had been updated, the possibility
that increased stringency would be technologically feasible and cost-
effective in the time frame of the National LEV program, and the focus
of the Agency's future regulatory efforts in terms of the most
promising areas for significant emissions reductions. As discussed in
more detail in the NPRM, elsewhere in this preamble, and in the
Response to Comments document, EPA's technical analysis revealed no
significant shortcomings in the adopted Non-Core Stable Standards that
would require new, more stringent standards applicable prior to MY2007,
aside from those potentially mandated by the CAA and thus specifically
excluded from triggering an offramp (e.g. cold CO past MY2000).
In addition, EPA will retain substantial flexibility to make many
types of changes to the designated Stable Standards without triggering
an offramp. In addition to changes to which the manufacturers do not
object, for the Non-Core Stable Standards, EPA could make modifications
that do not affect stringency or that harmonize the federal standard
with the California standard without providing an opportunity for opt-
out. Finally, EPA would always have the ability to make changes to the
Non-Core Stable Standards if the need to make such changes outweighs
the benefits of the National LEV program. Such a situation would only
arise, however, if the emissions benefits from the change significantly
outweighed the benefits from National LEV, in which case it is highly
unlikely that any state would suffer air quality detriment.

C. Finding National LEV in Effect

As proposed, the National LEV regulations specify criteria for EPA
to find that the program is in effect, and hence enforceable against
the manufacturers that have opted in. EPA will find that the National
LEV program is in effect if all manufacturers listed in the regulations
have submitted opt-in notifications in accordance with the requirements
specified in the regulations.⁵⁴ EPA's finding that the
program is in effect would be published in the Federal Register, but
would not require further notice and comment rulemaking. Upon finding
National LEV in effect, the National LEV requirements will be
enforceable, and to the extent that manufacturers have conditioned
their opt-ins upon EPA making such a finding, the opt-ins will become
fully and unconditionally binding. In today's rule, EPA is not setting
any deadline for the Agency to make this in effect finding, but EPA
will address the question of a deadline in a subsequent final rule
after it has provided further notice and opportunity to comment on the
OTC State commitments and related issues.
---------------------------------------------------------------------------

\54\ Before National LEV comes into effect, however, OTC States
may need to take further action to commit to the National LEV
program, pusuant to their agreement with the auto manufacturers. EPA
will take comment on the details of such state actions in the SNPRM
on OTC State commitments.
---------------------------------------------------------------------------

Further Agency rulemaking to find that National LEV is in effect
will be unnecessary because EPA is establishing the criteria for the
finding through this notice and comment rulemaking, and EPA's finding
that the criteria are satisfied is an easily verified objective
determination. As discussed in more detail in the NPRM (60 FR 52762), a
determination that the listed manufacturers have opted in in accordance
with the National LEV regulations requires only a straightforward
evaluation of whether each of the listed manufacturers has submitted an
opt-in notification containing the requisite language and signed by a
person with the specified authority.

D. SIP Credits

EPA will allocate SIP credits for National LEV on a state-by-state
basis. EPA will work with each individual state, including states
outside the OTR, to determine how appropriately to credit areas within
the state for emissions reductions produced by the National LEV
program. For calculating SIP credits, EPA will apply the same policy
guidance to National LEV as it would apply to a state's adoption of CAL
LEV.

VI. Other Applicable Federal Requirements and Harmonization With
California Requirements

A. Introduction

Section IV. described the provisions of the National LEV program,
including the structure of the program, the voluntary emissions
standards (exhaust and fleet average NMOG), and

[[Page 31227]]

provisions for low volume manufacturers. As noted in that section, the
federal new motor vehicle emissions control program (including other
standards and requirements, and certification, compliance, and
enforcement program elements) continues to apply to vehicles produced
and sold by manufacturers that opt into the National LEV program.
Significant elements of the federal program that apply to National LEV
vehicles include the requirements for evaporative emissions, ORVR, Cold
CO, the certification short test (CST), and federal high altitude
compliance. Similarly, EPA would use the current federal compliance
program to implement the National LEV program, including the fees
program, SEA, emissions recall program, federal emissions warranties,
and federal emissions defect reporting requirements. EPA would retain
the authority to add regulatory requirements to the motor vehicle
program, (e.g., as may be required under section 202(l) of the CAA to
address air toxics) or to modify existing requirements as required by
current law (e.g., as may be required under section 202(j) for cold
CO). By adopting the set of Stable Standards, EPA is recognizing that
it does not intend to modify certain existing regulations except in
limited circumstances.
Given the manufacturers' voluntary commitment to National LEV, EPA
committed to reduce the compliance burden for manufacturers in the
National LEV program by working with CARB to harmonize federal and
California motor vehicle standards and test procedures to the extent
possible. This would allow manufacturers to design and test vehicles to
one set of specifications for sale nationwide, rather than designing
and testing to two sets (California's and EPA's). While the National
LEV program itself goes a long way towards this objective by addressing
program elements such as the exhaust emission standards, the test fuel,
and test procedures, EPA has expended considerable effort towards
reconciling differences between federal and California requirements in
the balance of the mandatory federal program as well. EPA believes that
the National LEV program, plus harmonization of other federal and
California standards, is a smarter, cheaper way to regulate that
increases environmental and public health benefits. The balance of this
section describes the results of these harmonization efforts and some
other aspects of the federal program. To further the objective of
reducing duplicative testing and compliance requirements on the
manufacturers, EPA will seek consistency with California in future
regulatory actions where practicable.

B. Harmonization of Federal and California Standards

The bulk of the harmonization that is occurring between the
California and federal standards is taking place with respect to the
National LEV tailpipe standards and related requirements, including OBD
requirements. These standards and harmonization efforts are discussed
in section IV., above. Following is a discussion of other applicable
federal requirements and the status of harmonization efforts.
1. Onboard Refueling Vapor Recovery and Evaporative Emissions
EPA believes that federal and California ORVR and evaporative
emissions standards will be completely harmonized. EPA and CARB had
already begun the process of harmonizing their respective ORVR and
evaporative test procedures when the National LEV proposal was
published. CARB set policy at its June 29, 1995, public hearing to
adopt the EPA ORVR program for California and to proceed with a set of
evaporative emissions technical amendments, including several revisions
designed to harmonize the federal and California evaporative emissions
requirements. Following the hearing, CARB adopted final amendments to
their evaporative emissions test procedures, dated April 24, 1996, and
effective on June 24, 1996, which allow automobile manufacturers to
certify MY1997 and later vehicles using the federal fuel and
temperature test conditions. CARB also notes that the ongoing effort to
streamline the evaporative test procedures should result in one test
procedure for both agencies, and that the revised test procedure will
incorporate the federal fuel and temperature test conditions in the
CARB procedures. EPA published a direct final rule in August 1995
adopting federal evaporative emissions technical amendments that are
compatible with those being pursued by CARB (60 FR 43880, August 23,
1995).
In the proposal for this rulemaking, EPA stated its intent to
evaluate the relative stringency of the federal and CARB evaporative
emissions testing specifications for test temperature and test fuel, a
question that was unresolved at the time the proposal was published.
EPA indicated that use of CARB's test conditions, should they prove to
be less stringent, could constitute an unacceptable relaxation of the
existing federal evaporative emissions requirement. As part of its
evaluation, EPA hired a contractor to generate test data for both
running loss and hot soak emissions. The testing program has been
completed, and a final report has been submitted to the docket for this
rule (see ADDRESSES). EPA has determined that the data currently
available indicates that the federal fuel and temperature conditions
are more stringent in terms of producing more vapor under prescribed
test conditions. Based on the data currently available, CARB agrees
that the federal fuel and temperature conditions are as stringent as
the CARB conditions in terms of producing more vapor under specific
test conditions. On that basis, EPA is continuing to require federal
fuel and temperature for evaporative emissions testing. EPA understands
that under CARB's recent modifications to its evaporative emission
regulations that CARB now explicitly allows the use of the EPA
conditions for certification, and that vehicles so certified would
undergo in-use compliance testing using the federal conditions as well.
While EPA believes that the federal fuel and temperature produce more
vapor than the CARB fuel and temperature under prescribed test
conditions and CARB now accepts the federal test conditions for
purposes of certification, CARB intends to perform additional tests in
the future to provide additional data on the impact of the test fuel
and temperature on evaporative emissions in real life. If the results
of such testing demonstrate that California's evaporative emissions
reductions suffer as a result of the harmonized policy, CARB may re-
evaluate the policy for corrective action.
Use of the federal evaporative test conditions means that National
LEV vehicles certified to TLEV, LEV, or ULEV standards using the
California Phase II test fuel option that are undergoing both
evaporative and exhaust emissions testing will require a switch from
California Phase II fuel for exhaust testing to federal fuel for
evaporative emissions testing. The Agency anticipates that the
incremental burden of the policy will be minimized because broader
definitions of evaporative emissions families allow manufacturers to
test far fewer vehicles for evaporative emissions than for tailpipe
emissions. In addition, the fuel switch will frequently occur anyway
because the same vehicles tested for ORVR will be tested for
evaporative emissions, and both California and federal ORVR require
federal fuel as the test fuel. Finally, the vehicle manufacturers have
indicated that the

[[Page 31228]]

fuel switch is an acceptable trade-off for the benefits of harmonizing
the evaporative test conditions between EPA and CARB.
The auto manufacturers have recently presented a proposal to both
EPA and CARB for combining and streamlining the evaporative emissions
and ORVR procedures. Both agencies are actively evaluating this
proposal, which has as its goal a simpler procedure that saves
government and industry resources while preserving air quality benefits
nationally and in California. If these efforts are productive, EPA
might propose regulations that would affect evaporative emissions and
ORVR testing of the light-duty fleet during model years covered by the
National LEV rule. The Agency does not anticipate a conflict between
such an action and the designation of the current evaporative emissions
and ORVR procedures as Non-Core Stable Standards. EPA would not pursue
such a rulemaking to increase stringency in the programs, but rather to
simplify and make less costly the test procedures applicable to both
manufacturers and EPA, and EPA would expect manufacturers to support,
rather than object to, any resulting changes.
2. Cold CO
California has adopted EPA's Cold CO requirements by reference, so
the requirements are currently harmonized. EPA notes, however, that
CARB has a compliance requirement with a complete set of emission
standards, including an additional CO standard, during testing at 50
degrees. Because the 50 degree standards are part of the California LEV
program, they are included as part of the compliance obligation for
National LEVs.
3. Certification Short Test
The CST is one requirement for which differences in California and
federal requirements are necessary due to differences in state-adopted
Inspection and Maintenance (I/M) programs. As noted in the preamble to
the NPRM (60 FR 52764), the Agency has a statutory obligation under
section 206(a) of the CAA to promulgate procedures for manufacturers to
demonstrate at the time of new vehicle certification that their LDV and
LDT designs, when properly used and maintained, will pass the emissions
short test procedures approved by EPA for use in state and local I/M
programs. State and local I/M programs can choose their emission short
test procedures from a variety of different options maintained in the
federal regulations. Because California need not maintain the menu of
available short test options that is required of EPA under section
207(b) of the CAA, there is no adequate California counterpart to the
federal CST to serve as the basis for harmonization. Thus,
harmonization is not possible, and National LEV vehicles will be
subject to the same CST requirements as any other federally certified
LDVs.
4. High Altitude Requirements
In the NPRM, EPA noted its statutory obligation under section
206(f) of the CAA to require LDVs and LDTs to comply with mandatory
section 202 standards at all altitudes; this requirement is
incorporated in the current (Tier 1) emission standards. The National
LEV proposal preamble noted that even if manufacturers were voluntarily
complying with more stringent tailpipe emission standards, NLEVs would
nonetheless still be required to demonstrate compliance with the Tier 1
standards, the cold CO requirements, and the evaporative emissions
requirements at high altitude using the appropriate federal
certification test fuel for the given test procedure, as defined in 40
CFR 86.113. The Agency received no comments on this aspect of the
proposal, and, for the reasons described here and in the NPRM (60 FR
52764), the proposed approach is retained in the final rule.

C. Federal Compliance Requirements

1. Selective Enforcement Auditing and Quality Audit Programs
Pursuant to CAA section 206(b), vehicles certified to meet any of
the National LEV emission standards and requirements will be subject to
those standards and requirements in an SEA. Section 206(b) authorizes
the Administrator to test new vehicles to determine whether vehicles
being manufactured do, in fact, conform to the regulations with respect
to which a certificate of conformity was issued. National LEV vehicles
will also be subject to SEAs to show compliance with National LEV
standards and all other applicable federal emission standards and
requirements.
SEA authority serves as an important enforcement tool and provides
the Agency with the ability to ensure that NLEVs are in compliance with
the emissions standards. It also allows EPA to ensure that
manufacturers are not gaming the averaging, banking, and trading
provisions by maximizing credit generation or minimizing credit usage
through certifying engine families to unrealistic emissions standards.
In addition, the SEA program serves as an incentive for manufacturers
to do their own emissions testing and remedy any potential problems on
their own before they are identified by the Agency. This helps to
provide cleaner vehicles at the earliest possible time.
During an SEA, a manufacturer will test an engine family
configuration certified to the National LEV standards by testing new
vehicles off the production line using the same test procedures and
conditions as used in the certification process for that family. When
an SEA shows an audit failure of a configuration certified to National
LEV standards, the certificate of conformity for the selected
configuration may be suspended, and depending on the required remedy
for the nonconformity, revoked. This is the same approach EPA has used
for audit failures of configurations certified to conventional federal
standards.⁵⁵
---------------------------------------------------------------------------

\55\ See the NPRM (60 FR 52764-52766) for a more detailed
explanation of the SEA procedures.
---------------------------------------------------------------------------

In the NPRM, EPA noted that the promulgation of National LEV
standards and the harmonization of other federal and California
requirements will allow manufacturers to certify an increasing number
of engine families to both California and National LEV standards (50-
state engine families). This provides an opportunity for EPA to utilize
its enforcement resources more efficiently and reduce the testing
burden on manufacturers by coupling the SEA and corresponding CARB
requirements for 50-state families and configurations. Thus, EPA
proposed to use emissions testing done by the manufacturers on 50-state
engine families under the California Quality Audit (CQA) Program as a
basis for potential SEA actions, where such testing was conducted in a
manner substantially similar to comparable federal requirements.
Allowing EPA to use data produced under the CQA Program builds on
the harmonization of the California and National LEV programs to take
advantage of new efficiencies possible in EPA enforcement.
Additionally, this new use of data will reduce regulatory testing
burdens on the manufacturers. Under the current SEA program, EPA's only
recourse upon discovering 50-state non-compliance through CARB-required
testing is to issue the manufacturer an SEA test order for the vehicle
configuration. The manufacturer would then have to conduct duplicate
testing for that configuration. If the configuration (which CARB had
already determined to be in non-compliance) failed the audit, EPA would
suspend and/or possibly revoke the certificate of conformity. The
manufacturer would then have to develop a fix for the non-conformity
and conduct and pass a re-

[[Page 31229]]

audit to comply with EPA requirements, as well as comply with CARB's
remedial action plan. By adopting the authority to use CQA data in the
SEA program, EPA is eliminating these additional testing requirements.
The regulations adopted in today's final rule will work in the
following manner. If CARB has determined that a 50-state engine family
or configuration is in non-compliance, based on manufacturer testing
required by CARB, EPA would be able to take appropriate action without
requiring the manufacturer to conduct duplicate testing. EPA would
evaluate test data received from CARB or directly from a manufacturer
for a family or configuration that CARB has determined to be in non-
compliance with any applicable standard. If testing were conducted in a
manner substantially similar to comparable federal requirements, EPA
would evaluate the test data with respect to the 40 percent Acceptable
Quality Level (AQL) sampling plans found in Appendices X and XI to 40
CFR part 86 to determine compliance with applicable federal standards.
EPA believes the random sampling manufacturers use to select vehicles
for CARB-required testing will provide a representative family or
configuration sample, which can be appropriately evaluated with respect
to the 40 percent AQL criteria. If the test data for the family or
configuration does not meet the 40 percent AQL, EPA would determine the
family or configuration to be in non-compliance, and EPA would have
authority to suspend and/or revoke the certificate of conformity for
the 50-state family or configuration. Additionally, subsequent to a
suspension or revocation, the rule allows EPA to reinstate or reissue a
certificate, upon a manufacturer's written request, after the
manufacturer has agreed to comply with remedial action required by
CARB, if EPA believes the action is an effective remedy for the entire
family or configuration. The manufacturer would not have to conduct a
re-audit of the suspended/revoked configuration.
EPA's authority for this approach is provided by CAA section
206(b)(2)(A)(i), which allows EPA to suspend or revoke a certificate
based on tests conducted under section 206(b)(1). Section 206(b)(1)
authorizes tests to be conducted by the Administrator directly, or by
the manufacturer, in accordance with conditions specified by the
Administrator. In 40 CFR part 86, EPA prescribes procedures for testing
whether new motor vehicles conform to the regulations with respect to
which EPA issued the certificate of conformity. Most of these
procedures are the same as the procedures specified by California in
the Assembly-Line Test Procedures Quality Audit. EPA has modified the
regulations for manufacturer SEA testing to prescribe the procedures
detailed in the regulations or substantially similar procedures, which
could encompass testing performed under the CQA program. Substantially
similar procedures must produce results that are reliable and probative
indicators of the likely outcome of an SEA based on the Part 86 testing
requirements detailed in the SEA regulations. Even if CARB specifies
additional details in the course of testing by the manufacturer, as
long as the test that the manufacturer actually conducts is still in
accordance with procedures substantially similar to those detailed by
EPA, such a test will be in accordance with the conditions specified by
the Administrator. Thus, EPA may rely on such tests as a basis to
suspend or revoke a certificate of conformity.
Because EPA's regulatory authority to suspend or revoke
certificates is based on testing conducted by EPA or the manufacturer,
EPA will only suspend or revoke certificates in the manner described
above if the manufacturer has conducted the testing. The manufacturer
testing need not be pursuant to a federal test order, however. Also,
EPA is aware that all emissions testing done under the auspices of the
CQA program will not necessarily be done using procedures substantially
similar to comparable federal requirements, making EPA's use of some of
this data in its SEA program infeasible. Therefore, EPA will work
cooperatively with CARB and manufacturers in considering all
information provided by the manufacturer prior to making a decision
whether to suspend, revoke, and reissue certificates of conformity
based on data generated under the CQA program. As with any suspension
or revocation of a certificate of conformity, a manufacturer that
disagrees with EPA's decision to suspend or revoke a certificate may
request a public hearing within 15 days of EPA's suspension or
revocation decision.
2. Imports
As proposed, EPA is not listing independent commercial importers
(ICIs) among the manufacturers that would have to opt into the National
LEV program for EPA to find it in effect. Instead, ICIs will have the
opportunity to voluntarily certify their vehicles to meet National LEV
standards if their customers so desire. However, ICIs are prohibited
from participating in averaging, banking, or trading programs. ICIs not
certifying vehicles to National LEV standards will continue to be
required to meet the emissions standards applicable to the year in
which the vehicle was originally manufactured.
EPA continues to believe that ICIs should not be required to opt
into the National LEV program since they generally do not build new
motor vehicles.⁵⁶ Additionally, due to the very limited
number of vehicles, of various model years, that ICIs handle, ICIs
would be unable to participate in the averaging, banking, and trading
provisions, which require that a manufacturer has substantial control
over the certification categories (TLEVs, LEVs, etc.) of the vehicles
in its fleet.
---------------------------------------------------------------------------

\ 56\ Comments supported not requiring ICIs to opt in to the
National LEV program.
---------------------------------------------------------------------------

3. In-Use and Warranty Requirements
As described in the NPRM, the federal provisions regarding in-use
(recall) testing will be used to determine compliance with the National
LEV standards. These provisions are set out in 40 CFR part 85, subpart
S. The vehicle age and mileage limitations on recall testing, as
required by sections 202(d)(1) and 207(c) are not affected by today's
action.⁵⁷ It is not appropriate to substitute California's
entire in-use testing and recall program requirements for the
corresponding federal provisions as part of the National LEV program
because the two recall programs have different enforcement goals based
on differences in statutory authority. In addition, EPA must account
for the differences arising from a compliance program applied on a
national versus a State-specific level. However, EPA and California
will continue to cooperate wherever possible in their enforcement
activities to reduce any unnecessary duplication and to provide
efficient and timely sharing of information.
---------------------------------------------------------------------------

\ 57\ EPA does not require any recall testing beyond seven years
or 75,000 miles, whichever comes first, for vehicles with a useful
life period of ten years or 100,000 miles, or beyond seven years or
90,000 miles, whichever comes first, for vehicles with a useful life
of 11 years or 120,000 miles.
---------------------------------------------------------------------------

There is no additional burden on manufacturers attributable to
operation of two enforcement programs because when testing NLEVs to
determine their compliance with the in-use standards, EPA will use,
when appropriate, those test procedures utilized in the National LEV
certification process. As discussed above, these procedures will
generally be similar to California's procedures. Thus, manufacturers
will not need to comply with two different sets of enforcement testing
procedures.

[[Page 31230]]

In response to manufacturers' concerns over potential in-use fuel
effects on National LEV vehicles, EPA has stated that it would allow
extra vehicle preconditioning if necessary. It is not currently
possible to determine an appropriate level of additional
preconditioning, given the uncertainty as to in-use fuel effects on
National LEV vehicles and the question as to whether current levels of
preconditioning are in fact sufficient to alleviate these effects.
Therefore, EPA is not including a specific level of additional
preconditioning in today's action. However, EPA's regulations allow
additional preconditioning for unusual circumstances when such need is
demonstrated by a manufacturer.⁵⁸ Detrimental effects on
National LEV vehicles from commercially available fuel sold in the 49
States could likely be considered an unusual circumstance. Thus, under
these regulations EPA expects to work with manufacturers to determine
the appropriate level of any necessary additional vehicle
preconditioning.
---------------------------------------------------------------------------

\ 58\ See 40 CFR 86.132-96(d).
---------------------------------------------------------------------------

As discussed in the proposal, the federal warranty and defect
reporting requirements will apply to National LEV vehicles as they
would to other vehicles certified under the federal motor vehicle
program.

VII. Structure of National LEV Regulations

The requirements applicable to NLEVs are drawn largely from two
different and complex sources--the current federal motor vehicle
program and California's existing LEV program. Given this, the Agency
initially chose in the NPRM to structure the regulations such that they
referenced, rather than repeated, the two sources as much as possible.
To accomplish this, the Agency created 40 CFR part 86 subpart R to
serve as the ``road map'' of National LEV requirements. This new
subpart has several objectives. First, it details the general
applicability and provisions of the National LEV program, including how
auto manufacturers opt into the program and under what circumstances
they can opt out of the program. Second, it details the specific
emission standards, fleet average NMOG standards, and averaging,
banking, and trading provisions that apply to vehicles certified under
the program. As noted in section IV.B.1., the emission standards are
identical to those currently in place in California, but are explicitly
included in the regulations. Because of differences from the provisions
in California, the NMOG average is also explicitly included in subpart
R. While the averaging, banking, and trading provisions are modeled
after California's, there are enough differences in applying such a
program nationally that they too are included specifically in the new
subpart. Third, subpart R details the regulatory requirements from the
California LEV program that apply to National LEV. The provisions in
the existing federal program generally remain applicable to the
National LEV program, except in specific instances, detailed in subpart
R, where the California provisions are used instead.
Incorporation of provisions from the California LEV program is
slightly more complex, and has evolved since the NPRM. In general, the
Agency has used the method of ``incorporation by reference'' (IBR). The
IBR method allows federal agencies to publish regulations in the
Federal Register by referring to materials already published elsewhere,
rather than repeating that information. The legal effect of an IBR is
that the material is treated as if it were published in the Federal
Register. This material, like any other properly issued regulation, has
the force and effect of law. Material is eligible for IBR if several
conditions are met, including the criteria that the material be
reasonably available to those affected by the regulation and that the
volume of material published in the Federal Register is substantially
reduced. Each use of the IBR method must be approved by the Director of
the Federal Register.
The Agency has incorporated by reference in the National LEV
regulations a number of California regulatory documents. These
documents are maintained by the Federal Register and in the public
docket (see ADDRESSES) as a single bound document titled ``California
Regulatory Requirements Applicable to the National Low Emission Vehicle
Program, October, 1996.'' The National LEV regulations detail the
specific California documents that have been incorporated, as well as
the specific sections within those documents that do not apply to
National LEV, in an appendix to part 86. Only those California
documents that can be regarded as finalized regulatory documents with
the full force of law can be incorporated by reference.
In the NPRM the Agency used the IBR method extensively to
incorporate CARB regulatory provisions. Since then, however, the Agency
noted some problems with this approach, including a lack of clarity
regarding exactly what in the federal and CARB regulations applied or
did not apply to the National LEV program. Such problems arose in
particular when CARB regulations referenced federal regulations, but
applied them in a modified fashion (CARB regulatory documents that are
more ``stand-alone'' do not present these problems and have been
incorporated by reference as described above). These issues were
resolved in today's final regulations by explicitly including in
subpart R some of the text of CARB regulations and specifying how and
under what circumstances that text should apply.

VIII. Technical Correction to Maintenance Instructions

This final rule also makes a technical correction to regulations
mandating that manufacturers provide purchasers with instructions
regarding the proper maintenance and use of vehicles. On August 9,
1995, EPA published in the Federal Register (60 FR 40474) a rule
requiring that information for use in emission-related repairs be made
available to the service and repair industry (``the service information
rule''). The regulations promulgated in that rule were placed in
paragraph (g) of 40 CFR Sec. 86.094-38, which provides the requirements
for Maintenance Instructions for 1994 and later model year vehicles.
Paragraphs (a) through (f) of that section were to be unchanged from
the preexisting requirements for Maintenance Instructions provided in
Sec. 86.087-38. However, EPA inadvertantly did not include a reference
to the preexisting regulations when it promulgated Sec. 86.094-38 (a)
through (f). Specifically, EPA generally would use the designation
``[Reserved]. For guidance see Sec. 86.087-38 (a)-(f)'' to indicate the
incorporation of earlier regulatory language. However, the promulgated
rule states only that Sec. 86.094-38 (a)-(f) are ``[Reserved],''
without reference to the earlier regulatory language. This may have
caused some confusion regarding whether the preexisting regulations
were still in effect beginning in the 1994 model year. This technical
amendment clarifies that EPA did not intend to remove the preexisting
requirements for maintenance instructions when it promulgated the
service information rule.
EPA is promulgating this technical amendment as a final rule under
the good cause exception in section 553(b)(B) of the Administrative
Procedure Act, 5 U.S.C. 553(b)(B). Notice and public procedure for this
technical amendment are unnecessary and contrary to the public interest
because this amendment merely corrects an obviously unintended error in
the

[[Page 31231]]

regulations. At no time during the service information rulemaking did
EPA state its intention to remove the preexisting maintenance
instructions requirements from the regulations; nor was such a
significant change contemplated or requested. Therefore, this technical
change merely clarifies that regulations already in existence were not
inadvertantly deleted in the service information rule. EPA does not
expect any objection to this technical correction. Moreover, because
these regulations are applicable to current model year families, EPA
believes it is in the public interest to promulgate this technical
amendment as soon as possible.

IX. Administrative Requirements

A. Administrative Designation

Under Executive Order 12866 (58 FR 51735), the Agency must
determine whether the regulatory action is ``significant'' and
therefore subject to OMB review and the requirements of the Executive
Order. The Order defines a ``significant regulatory action'' as one
that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this rule is a ``significant regulatory action''
because of annual impacts on the economy that are likely to exceed $100
million. As such, this action was submitted to OMB for review. Changes
made in response to OMB suggestions or recommendations will be
documented in the public record.

B. Regulatory Flexibility Act

EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. EPA has also
determined that this rule will not have a significant economic impact
on a substantial number of small entities. Only manufacturers of motor
vehicles, a group which does not contain a substantial number of small
entities, will have to comply with the requirements of this rule.

C. Unfunded Mandates Reform Act

Under sections 202 and 205 of the Unfunded Mandates Reform Act of
1995 (UMRA), EPA generally must prepare a written statement to
accompany any proposed or final rule that includes a federal mandate
that may result in expenditures by state, local, or tribal governments
in the aggregate, or by the private sector, of $100 million or more in
any one year.
EPA has determined that the written statement requirements of
sections 202 and 205 of UMRA do not apply to today's rule, and thus
does not require EPA to conduct further analyses pursuant to those
requirements. National LEV is not a federal mandate because it does not
impose any enforceable duties and because it is a voluntary program.
Because National LEV would not impose a federal mandate on any party,
section 202 does not apply to this rule. Even if these unfunded
mandates provisions did apply to this rule, they are met by the
Regulatory Impact Analysis prepared pursuant to Executive Order 12866
and contained in the docket.
Section 203 requires EPA to establish a plan for informing and
advising any small governments that may be significantly or uniquely
impacted by the rule. EPA has not prepared such a plan because small
governments would not be significantly or uniquely impacted by the
rule.

D. Congressional Review of Agency Rulemaking

Under section 801(a)(1)(A) of the Administrative Procedure Act
(APA) as amended by the Small Business Regulatory Enforcement Reform
Act of 1996, EPA submitted a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the General Accounting
Office prior to publication of the rule in today's Federal Register.
OMB has designated this a ``major rule'' as defined in section 804(2)
of the APA, as amended.

E. Reporting and Recordkeeping Requirements

The Information Collection Request (ICR) in this rule has been
submitted for approval to the OMB under the Paperwork Reduction Act, 44
U.S.C. 3501 et seq. An ICR document has been prepared by EPA (ICR No.
1761.02) and a copy may be obtained from Sandy Farmer, OPPE Regulatory
Information Division, EPA, 401 M St., SW (Mail Code 2137), Washington,
DC 20460 or by calling (202) 260-2740. The information requirements are
not effective until OMB approves them.
The information collection would be conducted to support the
averaging, banking and trading provisions included in the National LEV
program. These averaging, banking and trading provisions would give
automobile manufacturers a measure of flexibility in meeting the fleet
average NMOG standards. EPA would use the reported data to calculate
credits and debits and otherwise ensure compliance with the applicable
production levels. When a manufacturer has opted into the voluntary
National LEV program, reporting would be mandatory as per the
regulations included in this rulemaking. This rulemaking would not
change the requirements regarding confidentiality claims for submitted
information, which are generally set out in 40 CFR part 2.
The information collection burden associated with this rule
(testing, record keeping and reporting requirements) is estimated to
average 241.3 hours annually for a typical manufacturer. It is expected
that approximately 25 manufacturers will provide an annual report to
EPA. However, the hours spent annually on information collection
activities by a given manufacturer depends upon manufacturer-specific
variables, such as the number of engine families, production changes,
emissions defects, and so forth.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This estimate also
includes the time needed to: Review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements; train personnel to be able to respond to
a collection of information; search data sources; complete and review
the collection of information; and transmit or otherwise disclose the
information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

[[Page 31232]]

Send comments on the Agency's need for this information, the
accuracy of the provided burden estimates, and any suggested methods
for minimizing respondent burden, including through the use of
automated collection techniques to the Director, OPPE Regulatory
Information Division; U.S. Environmental Protection Agency (2137); 401
M St., S.W., Washington, D.C. 20460; and to the Office of Information
and Regulatory Affairs, Office of Management and Budget, 725 17th St.,
N.W., Washington, D.C. 20503, marked ``Attention: Desk Officer for
EPA.'' Include the ICR number in any correspondence.

X. Statutory Authority

The promulgation of these regulations is authorized by sections
202, 203, 204, 205, 206, 207, 208 and 301 of the Clean Air Act as
amended by the Clean Air Act Amendments of 1990 (CAAA) (42 U.S.C. 7521,
7522, 7523, 7524, 7525, 7541, 7542, and 7601).

XI. Judicial Review

Under section 307(b)(1) of the Act, EPA hereby finds that these
regulations are of national applicability. Accordingly, judicial review
of this action is available only by filing of a petition for review in
the United States Court of Appeals for the District of Columbia Circuit
within 60 days of publication in the Federal Register. Under section
307(b)(2) of the Act, the requirements which are the subject of today's
rule may not be challenged later in judicial proceedings brought by EPA
to enforce these requirements. This rulemaking and any petitions for
review are subject to the provisions of section 307(d) of the Clean Air
Act.

List of Subjects

40 CFR Part 85

Confidential business information, Imports, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements, Research,
Warranties.

40 CFR Part 86

Administrative practice and procedure, Confidential business
information, Incorporation by reference, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements.

Dated: May 2, 1997.
Carol M. Browner,
Administrator.

For the reasons set out in the preamble, chapter I, title 40 of the
Code of Federal Regulations is amended as follows:

PART 85--CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES AND MOTOR
VEHICLE ENGINES

1. The authority citation for part 85 is revised to read as
follows:

Authority: 42 U.S.C. 7521, 7522, 7524, 7525, 7541, 7542, and
7601(a).

Subpart P--[Amended]

2. Section 85.1515 is amended by revising paragraph (c) to read as
follows:

Sec. 85.1515 Emission standards and test procedures applicable to
imported nonconforming motor vehicles and motor vehicle engines.

* * * * *
(c) Nonconforming motor vehicles or motor vehicle engines of 1994
OP model year and later conditionally imported pursuant to Sec. 85.1505
or Sec. 85.1509 shall meet all of the emission standards specified in
40 CFR part 86 for the model year in which the motor vehicle or motor
vehicle engine is modified. At the option of the ICI, the nonconforming
motor vehicle may comply with the emissions standards in 40 CFR
86.1708-97 or 86.1709-97, as applicable to a light-duty vehicle or
light light-duty truck, in lieu of the otherwise applicable emissions
standards specified in 40 CFR part 86 for the model year in which the
nonconforming motor vehicle is modified. The provisions of 40 CFR
86.1710-97 do not apply to imported nonconforming motor vehicles. The
useful life specified in 40 CFR part 86 for the model year in which the
motor vehicle or motor vehicle engine is modified is applicable where
useful life is not designated in this subpart.
* * * * *

PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR
VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION
AND TEST PROCEDURES

3. The authority citation for part 86 is revised to read as
follows:

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

4. Section 86.1 is amended by revising the entry for ASTM E29-90 in
the table in paragraph (b)(1) and by adding an entry after the existing
entry to the table in paragraph (b)(4), to read as follows:

Sec. 86.1 Reference materials.

* * * * *
(b) * * *
(1) * * *

------------------------------------------------------------------------
Document number and name 40 CFR part 86 reference
------------------------------------------------------------------------

* * * *
* * *
ASTM E29-90, Standard Practice for 86.609-84; 86.609-96; 86.609-
Using Significant Digits in Test Data 97; 86.609-98; 86.1009-84;
to Determine Conformance with 86.1009-96; 86.1442; 86.1708-
Specifications. 97; 86.1709-97; 86.1710-97;
86.1728-97.
------------------------------------------------------------------------

* * * * *
(4) * * *

------------------------------------------------------------------------
Document number and name 40 CFR part 86 reference
------------------------------------------------------------------------

* * * *
* * *
California Regulatory Requirements 86.608-97; 86.608-98; 86.612-
Applicable to the National Low 97; 86.1008-97; 86.1012-97;
Emission Vehicle Program, October, 86.1702-97; 86.1708-97;
1996 86.1709-97; 86.1717-97;
86.1735-97; 86.1771-97;
86.1775-97; 86.1776-97;
86.1777-97; Appendix XVI;
Appendix XVII.
------------------------------------------------------------------------

[[Page 31233]]

Subpart A--[Amended]

5. Section 86.082-2 is amended by revising paragraph (a) to read as
follows:

Sec. 86.082-2 Definitions.

(a) The definitions of this section apply to this subpart and also
to subparts B, D, I, and R of this part.
* * * * *
6. Section 86.085-37 is amended by revising paragraph (b)(1)
introductory text to read as follows:

Sec. 86.085-37 Production vehicles and engines.

* * * * *
(b)(1) Any manufacturer of light-duty vehicles or light-duty trucks
obtaining certification under this part shall notify the Administrator,
on a yearly basis, of the number of vehicles domestically produced for
sale in the United States and the number of vehicles produced and
imported for sale in the United States during the preceding year. Such
information shall also include the number of vehicles produced for sale
pursuant to Sec. 88.204-94(b) of this chapter. A manufacturer may elect
to provide this information every 60 days instead of yearly by
combining it with the notification required under Sec. 86.079-36. The
notification must be submitted 30 days after the close of the reporting
period. A manufacturer may combine the information required under
Sec. 86.1712(b) with the information included in paragraphs (b)(1) (i)
through (iv) of this section into the report required under this
section. The vehicle production information required shall be submitted
as follows:
* * * * *
7. Section 86.090-2 is amended by revising the definition for
``Flexible fuel vehicle (or engine)'' and adding a new definition in
alphabetical order for ``Dual fuel vehicle (or engine)'' to read as
follows:

Sec. 86.090-2 Definitions.

* * * * *
Dual fuel vehicle (or engine) means any motor vehicle (or motor
vehicle engine) engineered and designed to be operated on two different
fuels, but not on a mixture of fuels.
* * * * *
Flexible fuel vehicle (or engine) means any motor vehicle (or motor
vehicle engine) engineered and designed to be operated on any mixture
of two or more different fuels.
* * * * *
8. Section 86.094-38 is amended by adding introductory text and
revising paragraphs (a) through (f), to read as follows:

Sec. 86.094-38 Maintenance instructions.

Section 86.094-38 includes text that specifies requirements that
differ from those specified in Sec. 86.087-38. Where a paragraph in
Sec. 86.087-38 is identical and applicable to Sec. 86.094-38, this may
be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.087-38.''.
(a) through (f) [Reserved]. For guidance see Sec. 86.087-38.
* * * * *
9. Section 86.096-30 is amended by adding paragraphs (a)(19)
through (a)(22) to read as follows:

Sec. 86.096-30 Certification.

* * * * *
(a) * * *
(19) For all light-duty vehicles and light light-duty trucks
certified to standards under Secs. 86.1710 through 86.1712, the
provisions of paragraphs (a)(19) (i) through (iv) of this section
apply.
(i) All certificates issued are conditional upon manufacturer
compliance with all provisions of Secs. 86.1710 through 86.1712 both
during and after model year production.
(ii) Failure to meet the requirements of Sec. 86.1710 (a) through
(d) will be considered to be a failure to satisfy the conditions upon
which the certificate(s) was issued and the vehicles sold in violation
of the fleet average NMOG standard shall not be covered by the
certificate.
(iii) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied.
(iv) For recall and warranty purposes, vehicles not covered by a
certificate because of a violation of this condition of the certificate
will continue to be held to the standards stated in the certificate
that would have otherwise applied to the vehicles.
(20) For all light-duty vehicles and light light-duty trucks
certified to standards under Secs. 86.1710 through 86.1712, the
provisions of paragraphs (a)(20) (i) through (iv) of this section
apply.
(i) All certificates issued are conditional upon manufacturer
compliance with all provisions of Secs. 86.1710 through 86.1712 both
during and after model year production.
(ii) Failure to comply fully with the prohibition against a
manufacturer selling credits that it has not generated or are not
available, as specified in Sec. 86.1710(e), will be considered to be a
failure to satisfy the conditions upon which the certificate(s) was
issued and the vehicles sold in violation of this prohibition shall not
be covered by the certificate.
(iii) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied.
(iv) For recall and warranty purposes, vehicles not covered by a
certificate because of a violation of this condition of the certificate
will continue to be held to the standards stated in the certificate
that would have otherwise applied to the vehicles.
(21) For all light-duty vehicles and light light-duty trucks
certified to standards under Secs. 86.1710 through 86.1712, the
provisions of paragraphs (a)(21) (i) through (iv) of this section
apply.
(i) All certificates issued are conditional upon manufacturer
compliance with all provisions of Secs. 86.1710 through 86.1712 both
during and after model year production.
(ii) Failure to comply fully with the prohibition against offering
for sale Tier 1 vehicles and TLEVs in the Northeast Trading Region, as
defined in Sec. 86.1702, after model year 2000 if vehicles with the
same engine families are not certified and offered for sale in
California in the same model year, as specified in Sec. 86.1711(a),
will be considered to be a failure to satisfy the conditions upon which
the certificate(s) was issued and the vehicles sold in violation of
this prohibition shall not be covered by the certificate.
(iii) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied.
(iv) For recall and warranty purposes, vehicles not covered by a
certificate because of a violation of this condition of the certificate
will continue to be held to the standards stated in the certificate
that would have otherwise applied to the vehicles.
(22) For all light-duty vehicles and light light-duty trucks
certified to standards under Secs. 86.1710 through 86.1712, the
provisions of paragraphs (a)(22) (i) through (iv) of this section
apply.
(i) All certificates issued are conditional upon manufacturer
compliance with all provisions of Secs. 86.1710 through 86.1712 both
during and after model year production.
(ii) Failure to comply fully with the prohibition against selling
Tier 1 vehicles and TLEVs in the Northeast Trading Region, as defined
in Sec. 86.1702, in excess of five percent of the industry-wide fleet,
as specified in Sec. 86.1711(b),

[[Page 31234]]

will be considered a failure to satisfy the conditions upon which the
certificate was issued and the vehicles sold in violation of this
prohibition shall not be covered by the certificate.
(iii) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied.
(iv) For recall and warranty purposes, vehicles not covered by a
certificate because of a violation of this condition of the certificate
will continue to be held to the standards stated in the certificate
that would have otherwise applied to the vehicles.
* * * * *
10. A new Sec. 86.097-1 is added to subpart A to read as follows:

Sec. 86.097-1 General applicability.

Section 86.097-1 includes text that specifies requirements that
differ from those specified in Sec. 86.094-1. Where a paragraph in
Sec. 86.094-1 is identical and applicable to Sec. 86.097-1, this may be
indicated by specifying the corresponding paragraph and the statement
``[Reserved]. For guidance see Sec. 86.094-1.''.
(a) through (b) [Reserved]. For guidance see Sec. 86.094-1.
(c) National Low Emission Vehicle Program for light-duty vehicles
and light light-duty trucks. A manufacturer may elect to certify 1997
and later model year light-duty vehicles and light light-duty trucks to
the provisions of the National Low Emission Vehicle Program contained
in subpart R of this part. Subpart R of this part is applicable only to
those manufacturers that opt into the National Low Emission Vehicle
Program, under the provisions of that subpart, and that have not
exercised a valid opt-out from the NLEV Program that has gone into
effect under the provisions of Sec. 86.1705 (d) and (e). All provisions
of this subpart are applicable to vehicles certified pursuant to
subpart R of this part, except as specifically noted in subpart R of
this part.
(d) [Reserved]
(e) through (f) [Reserved]. For guidance see Sec. 86.094-1.

Subpart B--[Amended]

11. Section 86.101 is amended by adding a paragraph (c) to read as
follows:

Sec. 86.101 General applicability.

* * * * *
(c) National Low Emission Vehicle Program for light-duty vehicles
and light light-duty trucks. A manufacturer may elect to certify 1997
and later model year light-duty vehicles and light light-duty trucks to
the provisions of the National Low Emission Vehicle Program contained
in subpart R of this part. Subpart R of this part is applicable only to
those manufacturers that opt into the National Low Emission Vehicle
Program, under the provisions of subpart R of this part, and that have
not exercised a valid opt-out from the NLEV Program, which opt out has
gone into effect under the provisions of Sec. 86.1705(d) and (e). All
provisions of this subpart are applicable to vehicles certified
pursuant to subpart R of this part, except as specifically noted in
subpart R of this part.

Subpart G--[Amended]

12. Section 86.601-84 is amended by designating the existing text
as introductory text, by adding paragraph (a), and by adding and
reserving paragraph (b) to read as follows:

Sec. 86.601-84 Applicability.

* * * * *
(a) Section numbering; construction. (1) The model year of initial
applicability is indicated by the two digits following the hyphen of
the section number. A section remains in effect for subsequent model
years until it is superseded.
(2) A section reference without a model year suffix shall be
interpreted to be a reference to the section applicable to the
appropriate model year.
(b) [Reserved]
13. Section 86.602-97 is added to subpart G to read as follows:

Sec. 86.602-97 Definitions.

Section 86.602-97 includes text that specifies requirements that
differ from those specified in Sec. 86.602-84. Where a paragraph in
Sec. 86.602-84 is identical and applicable to Sec. 86.602-97, this may
be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.602-84.''
(a) through (b)(8) [Reserved]. For guidance see Sec. 86.602-84.
(b)(9) Executive Officer means the Executive Officer of the
California Air Resources Board or his or her authorized representative.
(10) Executive Order means the document the Executive Officer
grants a manufacturer for an engine family that certifies the
manufacturer has verified that the engine family complies with all
applicable standards and requirements pursuant to Title 13 of the
California Code of Regulations.
(11) 50-state engine family means an engine family that meets both
federal and California Air Resources Board motor vehicle emission
control regulations and has received a federal certificate of
conformity as well as an Executive Order.
14. Section 86.602-98 is amended by adding paragraphs (b)(9)
through (b)(11) to read as follows:

Sec. 86.602-98 Definitions.

* * * * *
(b) * * *
(9) Executive Officer means the Executive Officer of the California
Air Resources Board or his or her authorized representative.
(10) Executive Order means the document the Executive Officer
grants a manufacturer for an engine family that certifies the
manufacturer has verified that the engine family complies with all
applicable standards and requirements pursuant to Title 13 of the
California Code of Regulations.
(11) 50-state engine family means an engine family that meets both
federal and California Air Resources Board motor vehicle emission
control regulations and has received a federal certificate of
conformity as well as an Executive Order.
15. Section 86.603-97 is added to subpart G to read as follows:

Sec. 86.603-97 Test orders.

Section 86.603-97 includes text that specifies requirements that
differ from those specified in Sec. 86.603-88. Where a paragraph in
Sec. 86.603-88 is identical and applicable to Sec. 86.603-97, this may
be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.603-88.''
(a) through (e) [Reserved]. For guidance see Sec. 86.603-88.
(f) In the event evidence exists indicating an engine family is in
noncompliance, the Administrator may, in addition to other powers
provided by this section, issue a test order specifying the engine
family the manufacturer is required to test.
16. Section 86.603-98 is amended by adding paragraph (f) to read as
follows:

Sec. 86.603-98 Test orders.

* * * * *
(f) In the event evidence exists indicating an engine family is in
noncompliance, the Administrator may, in addition to other powers
provided by this section, issue a test order specifying the engine
family the manufacturer is required to test.
17. Section 86.608-97 is added to subpart G to read as follows:

Sec. 86.608-97 Test procedures.

Section 86.608-97 includes text that specifies requirements that
differ from

[[Page 31235]]

those specified in Secs. 86.608-90 and 86.608-96. Where a paragraph in
Sec. 86.608-90 or Sec. 86.608-96 is identical and applicable to
Sec. 86.608-97, this may be indicated by specifying the corresponding
paragraph and the statement ``[Reserved]. For guidance see Sec. 86.608-
90.'' or ``[Reserved]. For guidance see Sec. 86.608-96.''
(a) The prescribed test procedures are the Federal Test Procedure,
as described in subpart B and/or subpart R of this part, whichever is
applicable, the cold temperature CO test procedure as described in
subpart C of this part, and the Certification Short Test procedure as
described in subpart O of this part. Where the manufacturer conducts
testing based on the requirements specified in Chapter 1 or Chapter 2
of the California Regulatory Requirements Applicable to the National
Low Emission Vehicle Program (October, 1996), the prescribed test
procedures are the procedures cited in the previous sentence, or
substantially similar procedures, as determined by the Administrator.
The California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program are incorporated by reference (see Sec. 86.1).
For purposes of Selective Enforcement Audit testing, the manufacturer
shall not be required to perform any of the test procedures in subpart
B of this part relating to evaporative emission testing, except as
specified in paragraph (a)(2) of this section.
(1) [Reserved]. For guidance see Sec. 86.608-96.
(2) The following exceptions to the test procedures in subpart B
and/or subpart R of this part are applicable to Selective Enforcement
Audit testing:
(i) For mileage accumulation, the manufacturer may use test fuel
meeting the specifications for mileage and service accumulation fuels
of Sec. 86.113, or, for vehicles certified to the National LEV
standards, the specifications of Sec. 86.1771. Otherwise, the
manufacturer may use fuels other than those specified in this section
only with the advance approval of the Administrator.
(ii) [Reserved]. For guidance see Sec. 86.608-90.
(iii) The manufacturer may perform additional preconditioning on
Selective Enforcement Audit test vehicles other than the
preconditioning specified in Sec. 86.132, or Sec. 86.1773 for vehicles
certified to the National LEV standards, only if the additional
preconditioning had been performed on certification test vehicles of
the same configuration.
(a)(2)(iv) through (a)(2)(vii) [Reserved]. For guidance see
Sec. 86.608-90.
(a)(2)(viii) The manufacturer need not comply with Sec. 86.142, or
Sec. 86.1775, since the records required therein are provided under
other provisions of this subpart G.
(a)(2)(ix) through (a)(3) [Reserved]. For guidance see Sec. 86.608-
90.
(a)(4) [Reserved]. For guidance see Sec. 86.608-96.
(b) through (i) [Reserved]. For guidance see Sec. 86.608-90.
18. Section 86.608-98 is amended by revising paragraphs (a)
introductory text, (a)(2) introductory text, (a)(2)(i), (a)(2)(iii),
and (a)(2)(viii), to read as follows:

Sec. 86.608-98 Test procedures.

(a) The prescribed test procedures are the Federal Test Procedure,
as described in subpart B and/or subpart R of this part, whichever is
applicable, the cold temperature CO test procedure as described in
subpart C of this part, and the Certification Short Test procedure as
described in subpart O of this part. Where the manufacturer conducts
testing based on the requirements specified in Chapter 1 or Chapter 2
of the California Regulatory Requirements Applicable to the National
Low Emission Vehicle Program (October, 1996), the prescribed test
procedures are the procedures cited in the previous sentence, or
substantially similar procedures, as determined by the Administrator.
The California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program are incorporated by reference (see Sec. 86.1).
For purposes of Selective Enforcement Audit testing, the manufacturer
shall not be required to perform any of the test procedures in subpart
B of this part relating to evaporative emission testing, other than
refueling emissions testing, except as specified in paragraph (a)(2) of
this section.
* * * * *
(2) The following exceptions to the test procedures in subpart B
and/or subpart R of this part are applicable to Selective Enforcement
Audit testing:
(i) For mileage accumulation, the manufacturer may use test fuel
meeting the specifications for mileage and service accumulation fuels
of Sec. 86.113, or, for vehicles certified to the National LEV
standards, the specifications of Sec. 86.1771. Otherwise, the
manufacturer may use fuels other than those specified in this section
only with the advance approval of the Administrator.
* * * * *
(iii) The manufacturer may perform additional preconditioning on
Selective Enforcement Audit test vehicles other than the
preconditioning specified in Sec. 86.132, or Sec. 86.1773, for vehicles
certified to the National LEV standards only if the additional
preconditioning was performed on certification test vehicles of the
same configuration.
* * * * *
(viii) The manufacturer need not comply with Sec. 86.142,
Sec. 86.155, or Sec. 86.1775, since the records required therein are
provided under other provisions of this subpart G.
* * * * *
19. Section 86.609-97 is added to subpart G to read as follows:

Sec. 86.609-97 Calculation and reporting of test results.

Section 86.609-97 includes text that specifies requirements that
differ from those specified in Secs. 86.609-84 and 86.609-96. Where a
paragraph in Sec. 86.609-84 or Sec. 86.609-96 is identical and
applicable to Sec. 86.609-97, this may be indicated by specifying the
corresponding paragraph and the statement ``[Reserved]. For guidance
see Sec. 86.609-84.'' or ``[Reserved]. For guidance see Sec. 86.609-
96.''
(a) through (b) [Reserved]. For guidance see Sec. 86.609-96.
(c) Final deteriorated test results--(1) For each test vehicle. The
final deteriorated test results for each test vehicle tested according
to subpart B, subpart C, or subpart R of this part are calculated by
first multiplying or adding, as appropriate, the final test results by
or to the appropriate deterioration factor derived from the
certification process for the engine or evaporative/refueling family
and model year to which the selected configuration belongs, and then by
multiplying by the appropriate reactivity adjustment factor, if
applicable, and rounding to the same number of decimal places contained
in the applicable emission standard. Rounding is done in accordance
with the Rounding-Off Method specified in ASTM E29-90, Standard
Practice for Using Significant Digits in Test Data to Determine
Conformance with Specifications. This procedure is incorporated by
reference (see Sec. 86.1). For the purpose of this paragraph (c), if a
multiplicative deterioration factor as computed during the
certification process is less than one, that deterioration factor is
one. If an additive deterioration factor as computed during the
certification process is less than zero, that deterioration factor will
be zero.
(c)(2) [Reserved]. For guidance see Sec. 86.609-96.
(d) [Reserved]. For guidance see Sec. 86.609-84.

[[Page 31236]]

20. Section 86.609-98 is amended by revising paragraph (c)(1) to
read as follows:

Sec. 86.609-98 Calculation and reporting of test results.

* * * * *
(c) * * *
(1) For each test vehicle. The final deteriorated test results for
each light-duty vehicle tested for exhaust emissions and/or refueling
emissions according to subpart B, subpart C, or subpart R of this part
are calculated by first multiplying or adding, as appropriate, the
final test results by or to the appropriate deterioration factor
derived from the certification process for the engine or evaporative/
refueling family and model year to which the selected configuration
belongs, and then by multiplying by the appropriate reactivity
adjustment factor, if applicable, and rounding to the same number of
decimal places contained in the applicable emission standard. Rounding
is done in accordance with the Rounding-Off Method specified in ASTM
E29-90, Standard Practice for Using Significant Digits in Test Data to
Determine Conformance with Specifications. This procedure has been
incorporated by reference (see Sec. 86.1). For the purpose of this
paragraph (c), if a multiplicative deterioration factor as computed
during the certification process is less than one, that deterioration
factor is one. If an additive deterioration factor as computed during
the certification process is less than zero, that deterioration factor
will be zero.
* * * * *
21. Section 86.612-97 is added to subpart G to read as follows:

Sec. 86.612-97 Suspension and revocation of certificates of
conformity.

(a) The certificate of conformity is immediately suspended with
respect to any vehicle failing pursuant to Sec. 86.610(b) effective
from the time that testing of that vehicle is completed.
(b)(1) Selective Enforcement Audits. The Administrator may suspend
the certificate of conformity for a configuration that does not pass a
Selective Enforcement Audit pursuant to Sec. 86.610-98(c) based on the
first test, or all tests, conducted on each vehicle. This suspension
will not occur before ten days after failure to pass the audit.
(2) California Assembly-Line Quality Audit Testing. The
Administrator may suspend the certificate of conformity for a 50-state
family or configuration tested in accordance with procedures prescribed
under Sec. 86.608 that the Executive Officer has determined to be in
non-compliance with one or more applicable pollutants based on the
requirements specified in Chapter 1 or Chapter 2 of the California
Regulatory Requirements Applicable to the National Low Emission Vehicle
Program (October, 1996), if the results of vehicle testing conducted by
the manufacturer do not meet the acceptable quality level criteria
pursuant to Sec. 86.610. The California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October, 1996)
are incorporated by reference (see Sec. 86.1). A vehicle that is tested
by the manufacturer pursuant to California Assembly-Line Quality Audit
Test Procedures, in accordance with procedures prescribed under
Sec. 86.608, and determined to be a failing vehicle will be treated as
a failed vehicle described in Sec. 86.610(b), unless the manufacturer
can show that the vehicle would not be considered a failed vehicle
using the test procedures specified in Sec. 86.608. This suspension
will not occur before ten days after the manufacturer receives written
notification that the Administrator has determined the 50-state family
or configuration exceeds one or more applicable federal standards.
(c)(1) Selective Enforcement Audits. If the results of vehicle
testing pursuant to the requirements of this subpart indicates the
vehicles of a particular configuration produced at more than one plant
do not conform to the regulations with respect to which the certificate
of conformity was issued, the Administrator may suspend the certificate
of conformity with respect to that configuration for vehicles
manufactured by the manufacturer in other plants of the manufacturer.
(2) California Assembly-Line Quality Audit Testing. If the
Administrator determines that the results of vehicle testing pursuant
to the requirements specified in Chapter 1 or Chapter 2 of the
California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program (October, 1996) and the procedures prescribed
in Sec. 86.608 indicate the vehicles of a particular 50-state engine
family or configuration produced at more than one plant do not conform
to applicable federal regulations with respect to which a certificate
of conformity was issued, the Administrator may suspend, pursuant to
paragraph (b)(2) of this section, the certificate of conformity with
respect to that engine family or configuration for vehicles
manufactured in other plants of the manufacturer. The California
Regulatory Requirements Applicable to the National Low Emission Vehicle
Program (October, 1996) are incorporated by reference (see Sec. 86.1).
(d) The Administrator will notify the manufacturer in writing of
any suspension or revocation of a certificate of conformity in whole or
in part: Except, that the certificate of conformity is immediately
suspended with respect to any vehicle failing pursuant to
Sec. 86.610(b) and as provided for in paragraph (a) of this section.
(e)(1) Selective Enforcement Audits. The Administrator may revoke a
certificate of conformity for a configuration when the certificate has
been suspended pursuant to paragraph (b)(1) or (c)(1) of this section
if the proposed remedy for the nonconformity, as reported by the
manufacturer to the Administrator, is one requiring a design change(s)
to the engine and/or emission control system as described in the
Application for Certification of the affected configuration.
(2) California Assembly-Line Quality Audit Testing. The
Administrator may revoke a certificate of conformity for an engine
family or configuration when the certificate has been suspended
pursuant to paragraph (b)(2) or (c)(2) of this section if the proposed
remedy for the nonconformity, as reported by the manufacturer to the
Executive Officer and/or the Administrator, is one requiring a design
change(s) to the engine and/or emission control system as described in
the Application for Certification of the affected engine family or
configuration.
(f) Once a certificate has been suspended for a failed vehicle as
provided for in paragraph (a) of this section, the manufacturer must
take the following actions:
(1) Before the certificate is reinstated for that failed vehicle--
(i) Remedy the nonconformity; and
(ii) Demonstrate that the vehicle's final deteriorated test results
conform to the applicable emission standards or family particulate
emission limits, as defined in this part 86 by retesting the vehicle in
accordance with the requirements of this subpart.
(2) Submit a written report to the Administrator within thirty days
after successful completion of testing on the failed vehicle, which
contains a description of the remedy and test results for the vehicle
in addition to other information that may be required by this subpart.
(g) Once a certificate has been suspended pursuant to paragraph (b)
or (c) of this section, the manufacturer must take the following
actions before the Administrator will consider reinstating such
certificate:

[[Page 31237]]

(1) Submit a written report to the Administrator which identifies
the reason for the noncompliance of the vehicles, describes the
proposed remedy, including a description of any proposed quality
control and/or quality assurance measures to be taken by the
manufacturer to prevent the future occurrence of the problem, and
states the date on which the remedies will be implemented.
(2) Demonstrate that the engine family or configuration for which
the certificate of conformity has been suspended does in fact comply
with the requirements of this subpart by testing vehicles selected from
normal production runs of that engine family or configuration at the
plant(s) or the facilities specified by the Administrator, in
accordance with:
(i) The conditions specified in the initial test order pursuant to
Sec. 86.603 for a configuration suspended pursuant to paragraph (b)(1)
or (c)(1) of this section; or
(ii) The conditions specified in a test order pursuant to
Sec. 86.603 for an engine family or configuration suspended pursuant to
paragraph (b)(2) or (c)(2) of this section.
(3) If the Administrator has not revoked the certificate pursuant
to paragraph (e) of this section and if the manufacturer elects to
continue testing individual vehicles after suspension of a certificate,
the certificate is reinstated for any vehicle actually determined to
have its final deteriorated test results in conformance with the
applicable standards through testing in accordance with the applicable
test procedures.
(4) In cases where the Administrator has suspended a certificate of
conformity for a 50-state engine family or configuration pursuant to
paragraph (b)(2) or (c)(2) of this section, manufacturers may request
in writing that the Administrator reinstate the certificate of an
engine family or configuration when, in lieu of the actions described
in paragraphs (g) (1) and (2) of this section, the manufacturer has
agreed to comply with Chapter 3 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996), provided an Executive Order is in place for the engine
family or configuration. The California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October, 1996)
are incorporated by reference (see Sec. 86.1).
(h) Once a certificate for a failed engine family or configuration
has been revoked under paragraph (e) (1) or (2) of this section and the
manufacturer desires to introduce into commerce a modified version of
that engine family or configuration, the following actions will be
taken before the Administrator may issue a certificate for the new
engine family or configuration:
(1) If the Administrator determines that the proposed change(s) in
vehicle design may have an effect on emission performance deterioration
and/or fuel economy, he/she shall notify the manufacturer within five
working days after receipt of the report in paragraph (g)(1) of this
section or after receipt of information pursuant to paragraph (g)(4) of
this section whether subsequent testing under this subpart will be
sufficient to evaluate the proposed change(s) or whether additional
testing will be required.
(2) After implementing the change(s) intended to remedy the
nonconformity, the manufacturer shall demonstrate:
(i) If the certificate was revoked pursuant to paragraph (e)(1) of
this section, that the modified vehicle configuration does in fact
conform with the requirements of this subpart by testing vehicles
selected from normal production runs of that modified vehicle
configuration in accordance with the conditions specified in the
initial test order pursuant to Sec. 86.603. The Administrator shall
consider this testing to satisfy the testing requirements of
Sec. 86.079-32 or Sec. 86.079-33 if the Administrator had so notified
the manufacturer. If the subsequent testing results in a pass decision
pursuant to the criteria in Sec. 86.610-96(c), the Administrator shall
reissue or amend the certificate, if necessary, to include that
configuration: Provided, that the manufacturer has satisfied the
testing requirements specified in paragraph (h)(1) of this section. If
the subsequent audit results in a fail decision pursuant to the
criteria in Sec. 86.610(c), the revocation remains in effect. Any
design change approvals under this subpart are limited to the
modification of the configuration specified by the test order.
(ii) If the certificate was revoked pursuant to paragraph (e)(2) of
this section, that the modified engine family or configuration does in
fact conform with the requirements of this subpart by testing vehicles
selected from normal production runs of that modified engine family or
configuration in accordance with the conditions specified in a test
order pursuant to Sec. 86.603. The Administrator shall consider this
testing to satisfy the testing requirements of Sec. 86.079-32 or
Sec. 86.079-33 if the Administrator had so notified the manufacturer.
If the subsequent testing results in a pass decision pursuant to
Sec. 86.610(c), the Administrator shall reissue or amend the
certificate as necessary: Provided, That the manufacturer has satisfied
the testing requirements specified in paragraph (h)(1) of this section.
If the subsequent testing results in a fail decision pursuant to
Sec. 86.610(c), the revocation remains in effect. Any design change
approvals under this subpart are limited to the modification of engine
family or configuration specified by the test order.
(3) In cases where the Administrator has revoked a certificate of
conformity for a 50-state engine family or configuration pursuant to
paragraph (e)(2) of this section, manufacturers may request in writing
that the Administrator reissue the certificate of an engine family or
configuration when, in lieu of the actions described in paragraphs (h)
(1) and (2) of this section, the manufacturer has complied with Chapter
3 of the California Regulatory Requirements Applicable to the National
Low Emission Vehicle Program (October, 1996), provided an Executive
Order is in place for the engine family or configuration. The
California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program (October, 1996) are incorporated by reference
(see Sec. 86.1).
(i) A manufacturer may at any time subsequent to an initial
suspension of a certificate of conformity with respect to a test
vehicle pursuant to paragraph (a) of this section, but not later than
fifteen (15) days or such other period as may be allowed by the
Administrator after notification of the Administrator's decision to
suspend or revoke a certificate of conformity in whole or in part
pursuant to paragraph (b), (c) or (e) of this section, request that the
Administrator grant such manufacturer a hearing as to whether the tests
have been properly conducted or any sampling methods have been properly
applied.
(j) After the Administrator suspends or revokes a certificate of
conformity pursuant to this section or notifies a manufacturer of his
intent to suspend, revoke or void a certificate of conformity under
Sec. 86.084-30(d), and prior to the commencement of a hearing under
Sec. 86.614, if the manufacturer demonstrates to the Administrator's
satisfaction that the decision to suspend, revoke or void the
certificate was based on erroneous information, the Administrator shall
reinstate the certificate.
(k) To permit a manufacturer to avoid storing non-test vehicles
when conducting testing of an engine family or configuration subsequent
to suspension or revocation of the certificate of conformity for that
engine family or configuration pursuant to

[[Page 31238]]

paragraph (b), (c), or (e) of this section, the manufacturer may
request that the Administrator conditionally reinstate the certificate
for that engine family or configuration. The Administrator may
reinstate the certificate subject to the condition that the
manufacturer consents to recall all vehicles of that engine family or
configuration produced from the time the certificate is conditionally
reinstated if the engine family or configuration fails the subsequent
testing and to remedy any nonconformity at no expense to the owner.

Subpart K--[Amended]

22. Section 86.1001-84 is amended by designating the existing text
as introductory text, by adding paragraph (a), and by adding and
reserving paragraph (b) to read as follows:

Sec. 86.1001-84 Applicability.

* * * * *
(a) Section numbering; construction. (1) The model year of initial
applicability is indicated by the two digits following the hyphen of
the section number. A section remains in effect for subsequent model
years until it is superseded.
(2) A section reference without a model year suffix shall be
interpreted to be a reference to the section applicable to the
appropriate model year.
(b) [Reserved]
23. Section 86.1002-97 is added to subpart K to read as follows:

Sec. 86.1002-97 Definitions.

(a) The definitions in this section apply to this subpart.
(b) As used in this subpart, all terms not defined in this section
have the meaning given them in the Act.
Acceptable quality level (AQL) means the maximum percentage of
failing engines or vehicles, that for purposes of sampling inspection,
can be considered satisfactory as a process average.
Axle ratio means all ratios within <plus-minus>3% of the axle ratio
specified in the configuration in the test order.
Compliance level means an emission level determined during a
Production Compliance Audit pursuant to subpart L of this part.
Configuration means a subclassification, if any, of a heavy-duty
engine family for which a separate projected sales figure is listed in
the manufacturer's Application for Certification and which can be
described on the basis of emission control system, governed speed,
injector size, engine calibration, and other parameters which may be
designated by the Administrator, or a subclassification of a light-duty
truck engine family/emission control system combination on the basis of
engine code, inertia weight class, transmission type and gear rations,
axle ratio, and other parameters which may be designated by the
Administrator.
Executive Officer means the Executive Officer of the California Air
Resources Board or his or her authorized representative.
Executive Order means the document the Executive Officer grants a
manufacturer for an engine family that certifies the manufacturer has
verified the engine family complies with all applicable standards and
requirements pursuant to Title 13 of the California Code of
Regulations.
50-state engine family means an engine family that meets both
federal and California Air Resources Board motor vehicle emission
control regulations and has received a federal certificate of
conformity as well as an Executive Order.
Inspection criteria means the pass and fail numbers associated with
a particular sampling plan.
Test engine means an engine in a test sample.
Test sample means the collection of vehicles or engines of the same
configuration which have been drawn from the population of engines or
vehicles of that configuration and which will receive exhaust emission
testing.
Test vehicle means a vehicle in a test sample.
24. Section 86.1002-2001 is amended by adding paragraphs (b)(8)
through (b)(11) to read as follows:

Sec. 86.1002-2001 Definitions.

* * * * *
(b) * * *
(8) Axle ratio means all ratios within <plus-minus>3% of the axle
ratio specified in the configuration in the test order.
(9) Executive Officer means the Executive Officer of the California
Air Resources Board or his or her authorized representative.
(10) Executive Order means the document the Executive Officer
grants a manufacturer for an engine family that certifies the
manufacturer has verified the engine family complies with all
applicable standards and requirements pursuant to Title 13 of the
California Code of Regulations.
(11) 50-state engine family means an engine family that meets both
federal and California Air Resources Board motor vehicle emission
control regulations and has received a federal certificate of
conformity as well as an Executive Order.
25. Section 86.1003-97 is added to subpart K to read as follows:

Sec. 86.1003-97 Test orders.

Section 86.1003-97 includes text that specifies requirements that
differ from those specified in Sec. 86.1003-90. Where a paragraph in
Sec. 86.1003-90 is identical and applicable to Sec. 86.1003-97, this
may be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.1003-90.''
(a) through (f) [Reserved]. For guidance see Sec. 86.1003-90.
(g) In the event evidence exists indicating an engine family is in
noncompliance, the Administrator may, in addition to other powers
provided by this section, issue a test order specifying the engine
family the manufacturer is required to test.
26. Section 86.1003-2001 is amended by adding paragraph (g) to read
as follows:

Sec. 86.1003-2001 Test orders.

* * * * *
(g) In the event evidence exists indicating an engine family is in
noncompliance, the Administrator may, in addition to other powers
provided by this section, issue a test order specifying the engine
family the manufacturer is required to test.
27. Section 86.1008-97 is added to subpart K to read as follows:

Sec. 86.1008-97 Test procedures.

Section 86.1008-97 includes text that specifies requirements that
differ from those specified in Secs. 86.1008-90 and 86.1008-96. Where a
paragraph in Sec. 86.1008-90 or Sec. 86.1008-96 is identical and
applicable to Sec. 86.1008-97, this may be indicated by specifying the
corresponding paragraph and the statement ``[Reserved]. For guidance
see Sec. 86.1008-90.'' or ``[Reserved]. For guidance see Sec. 86.1008-
96.''
(a)(1) [Reserved]. For guidance see Sec. 86.1008-96.
(2) For light-duty trucks, the prescribed test procedures are the
Federal Test Procedure, as described in subpart B and/or subpart R of
this part, whichever is applicable, the idle CO test procedure as
described in subpart P of this part, the cold temperature CO test
procedure as described in subpart C of this part, and the Certification
Short Test procedure as described in subpart O of this part. Where the
manufacturer conducts testing based on the requirements specified in
Chapter 1 or Chapter 2 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October,
1996), the prescribed test procedures are the procedures cited in the
previous sentence, or substantially similar procedures, as determined
by

[[Page 31239]]

the Administrator. The California Regulatory Requirements Applicable to
the National Low Emission Vehicle Program are incorporated by reference
(see Sec. 86.1). For purposes of Selective Enforcement Audit testing,
the manufacturer shall not be required to perform any of the test
procedures in subpart B of this part relating to evaporative emission
testing, except as specified in paragraph (a)(3) of this section. The
Administrator may select and prescribe the sequence of any
Certification Short Tests. Further, the Administrator may, on the basis
of a written application by a manufacturer, approve optional test
procedures other than those in subparts B, C, P, and O of this part for
any motor vehicle which is not susceptible to satisfactory testing
using the procedures in subparts B, C, P, and O of this part.
(3) When testing light-duty trucks the following exceptions to the
test procedures in subpart B and/or subpart R of this part are
applicable:
(i) For mileage accumulation, the manufacturer may use test fuel
meeting the specifications for mileage and service accumulation fuels
of Sec. 86.113-94, or, for vehicles certified to the National LEV
standards, the specifications of Sec. 86.1771. Otherwise, the
manufacturer may use fuels other than those specified in this section
only with the advance approval of the Administrator.
(ii) [Reserved]. For guidance see Sec. 86.1008-90.
(iii) The manufacturer may perform additional preconditioning on
Selective Enforcement Audit test vehicles other than the
preconditioning specified in Sec. 86.132, or Sec. 86.1773 for vehicles
certified to the National LEV standards, only if the additional
preconditioning had been performed on certification test vehicles of
the same configuration.
(a)(3)(iv) through (a)(3)(vii) [Reserved]. For guidance see
Sec. 86.1008-90.
(a)(3)(viii) The manufacturer need not comply with Sec. 86.142 or
Sec. 86.1775, since the records required therein are provided under
other provisions of this subpart.
(a)(3)(ix) [Reserved]. For guidance see Sec. 86.1008-90.
(a)(4) [Reserved]. For guidance see Sec. 86.1008-96.
(5) [Reserved]. For guidance see Sec. 86.1008-90.
(6) [Reserved]. For guidance see Sec. 86.1008-96.
(b) through (i) [Reserved]. For guidance see Sec. 86.1008-90.
28. Section 86.1008-2001 is amended by revising paragraphs (a)(2),
(a)(3) introductory text, (a)(3)(i), (a)(3)(iii), and (a)(3)(viii) to
read as follows:

Sec. 86.1008-2001 Test procedures.

(a) * * *
(2) For light-duty trucks, the prescribed test procedures are the
Federal Test Procedure as described in subpart B and/or subpart R of
this part, whichever is applicable, the idle CO test procedure as
described in subpart P of this part, the cold temperature CO test
procedure as described in subpart C of this part, and the Certification
Short Test procedure as described in subpart O of this part. For
purposes of Selective Enforcement Audit Testing, the manufacturer shall
not be required to perform any of the test procedures in subpart B of
this part relating to evaporative emission testing, other than
refueling emissions testing, except as specified in paragraph (a)(3) of
this section. The Administrator may select and prescribe the sequence
of any CSTs. Further, the Administrator may, on the basis of a written
application by a manufacturer, approve optional test procedures other
than those in subparts B, C, P, O, and R of this part for any motor
vehicle which is not susceptible to satisfactory testing using the
procedures in subparts B, C, P, O, and R of this part.
(3) When testing light-duty trucks, the following exceptions to the
test procedures in subpart B and/or subpart R of this part are
applicable to Selective Enforcement Audit testing:
(i) For mileage accumulation, the manufacturer may use test fuel
meeting the specifications for mileage and service accumulation fuels
of Sec. 86.113, or, for vehicles certified to the National LEV
standards, the specifications of Sec. 86.1771. Otherwise, the
manufacturer may use fuels other than those specified in this section
only with the advance approval of the Administrator.
* * * * *
(iii) The manufacturer may perform additional preconditioning on
SEA test vehicles other than the preconditioning specified in
Sec. 86.132, or Sec. 86.1773 for vehicles certified to the National LEV
standards, only if the additional preconditioning was performed on
certification test vehicles of the same configuration.
* * * * *
(viii) The manufacturer need not comply with Sec. 86.142,
Sec. 86.155, or Sec. 86.1775 since the records required therein are
provided under other provisions of this subpart K.
* * * * *
29. Section 86.1009-97 is added to subpart K to read as follows:

Sec. 86.1009-97 Calculation and reporting of test results.

Section 86.1009-97 includes text that specifies requirements that
differ from those specified in Secs. 86.1009-84 and 86.1009-96. Where a
paragraph in Sec. 86.1009-84 or Sec. 86.1009-96 is identical and
applicable to Sec. 86.1009-97, this may be indicated by specifying the
corresponding paragraph and the statement ``[Reserved]. For guidance
see Sec. 86.1009-84.'' or ``[Reserved]. For guidance see Sec. 86.1009-
96.''.
(a) and (b) [Reserved]. For guidance see Sec. 86.1009-96.
(c) Final deteriorated test results. (1) The final deteriorated
test results for each heavy-duty engine or light-duty truck tested
according to subpart B, C, D, I, N, P, or R of this part are calculated
by first multiplying or adding, as appropriate, the final test results
by or to the appropriate deterioration factor derived from the
certification process for the engine family control system combination
and model year to which the selected configuration belongs, and then by
multiplying by the appropriate reactivity adjustment factor, if
applicable. If the multiplicative deterioration factor as computed
during the certification process is less than one, that deterioration
factor will be one. If the additive deterioration factor as computed
during the certification process is less than zero, that deterioration
factor will be zero.
(c)(2) [Reserved]
(c)(3) through (c)(4) [Reserved]. For guidance see Sec. 86.1009-96.
(d) [Reserved]. For guidance see Sec. 86.1009-84.
30. Section 86.1009-2001 is amended by revising paragraph (c)(1) to
read as follows:

Sec. 86.1009-2001 Calculation and reporting of test results.

* * * * *
(c) * * *
(1) The final deteriorated test results for each light-duty truck,
heavy-duty engine, or heavy-duty vehicle tested according to subpart B,
C, D, I, M, N, P, or R of this part are calculated by first multiplying
or adding, as appropriate, the final test results by or to the
appropriate deterioration factor derived from the certification process
for the engine or evaporative/refueling family and model year to which
the selected configuration belongs, and then by multiplying by the
appropriate reactivity adjustment factor, if applicable. For the
purpose of this paragraph (c), if a multiplicative deterioration factor
as computed during the certification process is less than one, that
deterioration factor will be one. If

[[Page 31240]]

an additive deterioration factor as computed during the certification
process is less than zero, that deterioration factor will be zero.
* * * * *
31. Section 86.1012-97 is added to subpart K to read as follows:

Sec. 86.1012-97 Suspension and revocation of certificates of
conformity.

(a) The certificate of conformity is immediately suspended with
respect to any engine or vehicle failing pursuant to Sec. 86.1010(b)
effective from the time that testing of that engine or vehicle is
completed.
(b)(1) Selective Enforcement Audits. The Administrator may suspend
the certificate of conformity for a configuration that does not pass a
Selective Enforcement Audit pursuant to Sec. 86.1010(c) based on the
first test, or all tests, conducted on each engine or vehicle. This
suspension will not occur before ten days after failure to pass the
audit.
(2) California Assembly-Line Quality Audit Testing. The
Administrator may suspend the certificate of conformity for a 50-state
engine family or configuration tested in accordance with procedures
prescribed under Sec. 86.1008 that the Executive Officer has determined
to be in non-compliance with one or more applicable pollutants based on
Chapter 1 or Chapter 2 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October,
1996), if the results of vehicle testing conducted by the manufacturer
do not meet the acceptable quality level criteria pursuant to
Sec. 86.1010. The California Regulatory Requirements Applicable to the
National Low Emission Vehicle Program (October, 1996) are incorporated
by reference (see Sec. 86.1). A vehicle that is tested by the
manufacturer in accordance with procedures prescribed under
Sec. 86.1008 and determined to be a failing vehicle pursuant to Chapter
1 or Chapter 2 of the California Regulatory Requirements Applicable to
the National Low Emission Vehicle Program (October, 1996) will be
treated as a failed vehicle described in Sec. 86.1010(b), unless the
manufacturer can show that the vehicle would not be considered a failed
vehicle using the test procedures specified in Sec. 86.1008. This
suspension will not occur before ten days after the manufacturer
receives written notification that the Administrator has determined the
50-state engine family or configuration exceeds one or more applicable
federal standards.
(c)(1) Selective Enforcement Audits. If the results of engine or
vehicle testing pursuant to the requirements of this subpart indicate
that engines or vehicles of a particular configuration produced at more
than one plant do not conform to the regulations with respect to which
the certificate of conformity was issued, the Administrator may suspend
the certificate of conformity with respect to that configuration for
engines or vehicles manufactured by the manufacturer in other plants of
the manufacturer.
(2) California Assembly-Line Quality Audit Testing. If the
Administrator determines that the results of vehicle testing pursuant
to Chapter 1 or Chapter 2 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October, 1996)
and the procedures prescribed in Sec. 86.1008 indicate the vehicles of
a particular 50-state engine family or configuration produced at more
than one plant do not conform to applicable regulations with respect to
which a certificate of conformity was issued, the Administrator may
suspend, pursuant to paragraph (b)(2) of this section, the certificate
of conformity with respect to that engine family or configuration for
vehicles manufactured by the manufacturer in other plants of the
manufacturer. The California Regulatory Requirements Applicable to the
National Low Emission Vehicle Program (October, 1996) are incorporated
by reference (see Sec. 86.1).
(d) The Administrator will notify the manufacturer in writing of
any suspension or revocation of a certificate of conformity in whole or
in part: Except, that the certificate is immediately suspended with
respect to any failed engines or vehicles as provided for in paragraph
(a) of this section.
(e)(1) Selective Enforcement Audits. The Administrator may revoke a
certificate of conformity for a configuration when the certificate has
been suspended pursuant to paragraph (b)(1) or (c)(1) of this section
if the proposed remedy for the nonconformity, as reported by the
manufacturer to the Administrator is one requiring a design change(s)
to the engine and/or emission control system as described in the
Application for Certification of the affected configuration.
(2) California Assembly-Line Quality Audit Testing. The
Administrator may revoke a certificate of conformity for an engine
family or configuration when the certificate has been suspended
pursuant to paragraph (b)(2) or (c)(2) of this section if the proposed
remedy for the nonconformity, as reported by the manufacturer to the
Executive Officer and/or the Administrator, is one requiring a design
change(s) to the engine and/or emission control system as described in
the Application for Certification of the affected engine family or
configuration.
(f) Once a certificate has been suspended for a failed engine or
vehicle as provided for in paragraph (a) of this section, the
manufacturer must take the following actions:
(1) Before the certificate is reinstated for that failed engine or
vehicle--
(i) Remedy the nonconformity; and
(ii) Demonstrate that the engine or vehicle's final deteriorated
test results conform to the applicable emission standards or family
particulate emission limits, as defined in this part 86 by retesting
the engine or vehicle in accordance with the requirements of this
subpart.
(2) Submit a written report to the Administrator within thirty days
after successful completion of testing on the failed engine or vehicle,
which contains a description of the remedy and test results for the
engine or vehicle in addition to other information that may be required
by this subpart.
(g) Once a certificate has been suspended pursuant to paragraph (b)
or (c) of this section, the manufacturer must take the following
actions before the Administrator will consider reinstating such
certificate:
(1) Submit a written report to the Administrator which identifies
the reason for the noncompliance of the vehicles, describes the
proposed remedy, including a description of any proposed quality
control and/or quality assurance measures to be taken by the
manufacturer to prevent the future occurrence of the problem, and
states the date on which the remedies will be implemented.
(2) Demonstrate that the engine family or configuration for which
the certificate of conformity has been suspended does in fact comply
with the requirements of this subpart by testing engines or vehicles
selected from normal production runs of that engine family or
configuration at the plant(s) or the facilities specified by the
Administrator, in accordance with:
(i) The conditions specified in the initial test order pursuant to
Sec. 86.1003 for a configuration suspended pursuant to paragraph (b)(1)
or (c)(1) of this section; or
(ii) The conditions specified in a test order pursuant to
Sec. 86.1003 for an engine family or configuration suspended pursuant
to paragraph (b)(2) or (c)(2) of this section.
(3) If the Administrator has not revoked the certificate pursuant
to paragraph (e) of this section and if the

[[Page 31241]]

manufacturer elects to continue testing individual engines or vehicles
after suspension of a certificate, the certificate is reinstated for
any engine or vehicle actually determined to have its final
deteriorated test results in conformance with the applicable standards
through testing in accordance with the applicable test procedures.
(4) In cases where the Administrator has suspended a certificate of
conformity for a 50-state engine family or configuration pursuant to
paragraph (b)(2) or (c)(2) of this section, manufacturers may request
in writing that the Administrator reinstate the certificate of an
engine family or configuration when, in lieu of the actions described
in paragraphs (g) (1) and (2) of this section, the manufacturer has
complied with Chapter 3 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October,
1996), provided an Executive Order is in place for the engine family or
configuration. The California Regulatory Requirements Applicable to the
National Low Emission Vehicle Program (October, 1996) are incorporated
by reference (see Sec. 86.1).
(h) Once a certificate for a failed engine family or configuration
has been revoked under paragraph (e) (1) or (2) of this section and the
manufacturer desires to introduce into commerce a modified version of
that engine family or configuration the following actions will be taken
before the Administrator may issue a certificate for the new engine
family or configuration:
(1) If the Administrator determines that the proposed change(s) in
engine or vehicle design may have an effect on emission performance
deterioration and/or fuel economy, he/she shall notify the manufacturer
within 5 working days after receipt of the report in paragraph (g)(1)
of this section or after receipt of information pursuant to paragraph
(g)(4) of this section whether subsequent testing under this subpart
will be sufficient to evaluate the proposed change(s) or whether
additional testing will be required.
(2) After implementing the change(s) intended to remedy the
nonconformity, the manufacturer shall demonstrate:
(i) If the certificate was revoked pursuant to paragraph (e)(1) of
this section, that the modified configuration does in fact conform with
the requirements of this subpart by testing engines or vehicles
selected from normal production runs of that modified configuration in
accordance with the conditions specified in the initial test order
pursuant to Sec. 86.1003. The Administrator shall consider this testing
to satisfy the testing requirements of Sec. 86.079-32 or Sec. 86.079-33
if the Administrator had so notified the manufacturer. If the
subsequent testing results in a pass decision pursuant to the criteria
in Sec. 86.1010(c), the Administrator shall reissue or amend the
certificate, if necessary, to include that configuration: Provided,
that the manufacturer has satisfied the testing requirements specified
in paragraph (h)(1) of this section. If the subsequent audit results in
a fail decision pursuant to the criteria in Sec. 86.1010(c), the
revocation remains in effect. Any design change approvals under this
subpart are limited to the modification of the configuration specified
by the test order.
(ii) If the certificate was revoked pursuant to paragraph (e)(2) of
this section, that the modified engine family or configuration does in
fact conform with the requirements of this subpart by testing vehicles
selected from normal production runs of that modified engine family or
configuration in accordance with the conditions specified in a test
order pursuant to Sec. 86.1003. The Administrator shall consider this
testing to satisfy the testing requirements of Sec. 86.079-32 or
Sec. 86.079-33 if the Administrator had so notified the manufacturer.
If the subsequent testing results in a pass decision pursuant to
Sec. 86.1010(c), the Administrator shall reissue or amend the
certificate as necessary: Provided, that the manufacturer has satisfied
the testing requirements specified in paragraph (h)(1) of this section.
If the subsequent testing results in a fail decision pursuant to
Sec. 86.1010(c), the revocation remains in effect. Any design change
approvals under this subpart are limited to the modification of the
engine family or configuration specified by the test order.
(3) In cases where the Administrator has revoked a certificate of
conformity for a 50-state engine family or configuration pursuant to
paragraph (e)(2) of this section, manufacturers may request in writing
that the Administrator reissue the certificate for an engine family or
configuration when, in lieu of the actions described in paragraphs (h)
(1) and (2) of this section, the manufacturer has complied with Chapter
3 of the California Regulatory Requirements Applicable to the National
Low Emission Vehicle Program (October, 1996), provided an Executive
Order is in place for the engine family or configuration. The
California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program (October, 1996) are incorporated by reference
(see Sec. 86.1).
(i) through (k) [Reserved]
(l) At any time subsequent to an initial suspension of a
certificate of conformity for a test engine or vehicle pursuant to
paragraph (a) of this section, but not later than fifteen (15) days or
such other period as may be allowed by the Administrator after
notification of the Administrator's decision to suspend or revoke a
certificate of conformity in whole or in part pursuant to paragraphs
(b), (c), (d), (e), or (h) of this section, a manufacturer may request
a hearing as to whether the tests have been properly conducted or any
sampling methods have been properly applied.
(m) After the Administrator suspends or revokes a certificate of
conformity pursuant to this section or notifies a manufacturer of his
intent to suspend, revoke or void a certificate of conformity under
paragraph Sec. 86.087-30(e), and prior to the commencement of a hearing
under Sec. 86.1014, if the manufacturer demonstrates to the
Administrator's satisfaction that the decision to suspend, revoke or
void the certificate was based on erroneous information, the
Administrator shall reinstate the certificate.
(n) To permit a manufacturer to avoid storing non-test engines or
vehicles when conducting testing of an engine family or configuration
subsequent to suspension or revocation of the certificate of conformity
for that engine family or configuration pursuant to paragraph (b), (c),
or (e) of this section, the manufacturer may request that the
Administrator conditionally reinstate the certificate for that engine
family or configuration. The Administrator may reinstate the
certificate subject to the condition that the manufacturer consents to
recall all engines or vehicles of that engine family or configuration
produced from the time the certificate is conditionally reinstated if
the engine family or configuration fails the subsequent testing and to
remedy any nonconformity at no expense to the owner.
32. Section 86.1014-97 is added to subpart K to read as follows:

Sec. 86.1014-97 Hearings on suspension, revocation and voiding of
certificates of conformity.

Section 86.1014-97 includes text that specifies requirements that
differ from those specified in Sec. 86.1014-84. Where a paragraph in
Sec. 86.1014-84 is identical and applicable to Sec. 86.1014-97, this
may be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.1014-84''.
(a) through (c)(2)(ii) introductory text [Reserved]. For guidance
see Sec. 86.1014-84.

[[Page 31242]]

(c)(2)(ii)(A) Whether tests have been properly conducted,
specifically, whether the tests were conducted in accordance with
applicable regulations and whether test equipment was properly
calibrated and functioning; and
(c)(2)(ii) (B) through (aa) [Reserved]. For guidance see
Sec. 86.1014-84.
33. A new subpart R consisting of Secs. 86.1701-97 through 86.1780-
97 is added to part 86 to read as follows:
Subpart R--General Provisions for the Voluntary National Low Emission
Vehicle Program for Light-Duty Vehicles and Light-Duty Trucks
Sec.
86.1701-97 General applicability.
86.1702-97 Definitions.
86.1703-97 Abbreviations.
86.1704-97 Section numbering; construction.
86.1705-97 General provisions; opt-in; opt-out.
86.1706-97 National LEV program in effect.
86.1707-97 [Reserved]
86.1708-97 Exhaust emission standards for 1997 and later light-duty
vehicles.
86.1709-97 Exhaust emission standards for 1997 and later light
light-duty trucks.
86.1710-97 Fleet average non-methane organic gas exhaust emission
standards for light-duty vehicles and light light-duty trucks.
86.1711-97 Limitations on sale of Tier 1 vehicles and TLEVs; five
percent cap.
86.1712-97 Maintenance of records; submittal of information.
86.1713-97 Light-duty exhaust durability programs.
86.1714-97 Small-volume manufacturers certification procedures.
86.1715-97 [Reserved]
86.1716-97 Prohibition of defeat devices.
86.1717-97 Emission control diagnostic system for 1997 and later
light-duty vehicles and light-duty trucks.
86.1718-97 through 86.1720-97 [Reserved]
86.1721-97 Application for certification.
86.1722-97 [Reserved]
86.1723-97 Required data.
86.1724-97 Test vehicles and engines.
86.1725-97 Maintenance.
86.1726-97 Mileage and service accumulation; emission measurements.
86.1727-97 [Reserved]
86.1728-97 Compliance with emission standards.
86.1729-97 through 86.1733-97 [Reserved]
86.1734-97 Alternative procedure for notification of additions and
changes.
86.1735-97 Labeling.
86.1736-97 through 86.1769-97 [Reserved]
86.1770-97 All-Electric Range Test requirements.
86.1771-97 Fuel specifications.
86.1772-97 Road load power test weight and inertia weight class
determination.
86.1773-97 Test sequence; general requirements.
86.1774-97 Vehicle preconditioning.
86.1775-97 Exhaust sample analysis.
86.1776-97 Records required.
86.1777-97 Calculations; exhaust emissions.
86.1778-97 Calculations; particulate emissions.
86.1779-97 General enforcement provisions.
86.1780-97 Prohibited acts.

Subpart R--General Provisions for the Voluntary National Low
Emission Vehicle Program for Light-Duty Vehicles and Light-Duty
Trucks

Sec. 86.1701-97 General applicability.

(a) The provisions of this subpart may be adopted by vehicle
manufacturers pursuant to the provisions specified in Sec. 86.1705. The
provisions of this subpart are generally applicable to 1997 and later
model year light-duty vehicles and light light-duty trucks to be sold
in the Northeast Trading Region, and 2001 and later model year light-
duty vehicles and light light-duty trucks to be sold in the United
States. In cases where a provision applies only to certain vehicles
based on model year, vehicle class, motor fuel, engine type, vehicle
emission category, intended sales destination, or other distinguishing
characteristics, such limited applicability is cited in the appropriate
section or paragraph. The provisions of this subpart shall be referred
to as the ``National Low Emission Vehicle Program'' or ``National LEV''
or ``NLEV.''
(b) All requirements of 40 CFR parts 85 and 86, unless specifically
superseded by the provisions of this subpart, shall apply to vehicles
under the National LEV Program. Compliance with the provisions of this
subpart will be deemed compliance with some of the requirements of 40
CFR parts 85 and 86, as set forth elsewhere in this subpart.
(c) The requirements of this subpart apply to new vehicles
manufactured by covered manufacturers for model years prior to the
first model year for which a mandatory federal exhaust emissions
program for light-duty vehicles and light light-duty trucks is at least
as stringent as the National LEV program with respect to NMOG,
NO<INF>X</INF>, and CO exhaust emissions, as determined by the
Administrator.

Sec. 86.1702-97 Definitions.

(a) The definitions in subpart A of this part apply to this
subpart, except where the same term is defined differently in paragraph
(b) of this section.
(b) The following definitions shall apply to this subpart:
Advanced technology vehicle (ATV) means any light-duty vehicle or
light light-duty truck that is covered by a federal certificate of
conformity or an Executive Order, as defined in Sec. 86.1002, which is
either:
(1) A dual fuel, flexible fuel, or dedicated alternatively fueled
vehicle certified as a TLEV or more stringent when operated on the
alternative fuel;
(2) A ULEV or Inherently Low-Emission Vehicle (ILEV), as defined in
40 CFR 88.302, either conventionally or alternatively fueled;
(3) An HEV or ZEV.
Alcohol fuel means either methanol or ethanol as those terms are
defined in this subpart.
All-electric range test means a test sequence used to determine the
range of an electric vehicle or of a hybrid electric vehicle without
the use of its auxiliary power unit. The All-Electric Range Test cycle
is defined in Sec. 86.1770.
Averaging sets are the categories of LDVs and LDTs for which the
manufacturer calculates a fleet average NMOG value. The four averaging
sets for fleet average NMOG value calculation purposes are:
(1) Class A delivered to a point of first sale in the Northeast
Trading Region;
(2) Class A delivered to a point of first sale in the 37 States;
(3) Class B delivered to a point of first sale in the Northeast
Trading Region; and
(4) Class B delivered to a point of first sale in the 37 States.
Battery assisted combustion engine vehicle means any vehicle which
allows power to be delivered to the driven wheels solely by a
combustion engine, but which uses a battery pack to store energy which
may be derived through remote charging, regenerative braking, and/or a
flywheel energy storage system or other means which will be used by an
electric motor to assist in vehicle operation.
Battery pack means any electrical energy storage device consisting
of any number of individual battery modules which is used to propel
electric or hybrid electric vehicles.
Certification level means the official exhaust emission result from
an emission-data vehicle which has been adjusted by the applicable mass
deterioration factor and is submitted to the Administrator for use in
determining compliance with an emission standard for the purpose of
certifying a particular engine family. For those engine families which
are certified using reactivity adjustment factors developed by the
manufacturer pursuant to Appendix XVII of this part, the exhaust NMOG
certification level shall include adjustment by the ozone deterioration
factor.
Class A comprises LDVs and LDTs 0-3750 lbs LVW that are subject to
the provisions of this subpart.

[[Page 31243]]

Class B comprises LDTs 3751-5750 lbs LVW that are subject to the
provisions of this subpart.
Continually regenerating trap oxidizer system means a trap oxidizer
system that does not utilize an automated regeneration mode during
normal driving conditions for cleaning the trap.
Conventional gasoline means any certification gasoline which meets
the specifications of Sec. 86.113(a). The ozone-forming potential of
conventional gasoline vehicle emissions shall be determined by using
the methods and gasoline specifications contained in Appendix XVII of
this part.
Core Stable Standards means the standards and requirements in
Sec. 86.1705(g)(1) (i) through (vi).
Covered manufacturer means an original equipment manufacturer
(OEM), as defined at 40 CFR 85.1502(9), that meets the conditions
specified under Sec. 86.1705(a).
Covered vehicle or engine means a vehicle specified in
Sec. 86.1701(a), or an engine in such a vehicle, that is manufactured
by a covered manufacturer.
Credits means fleet average NMOG credits as calculated from the
amount that the manufacturer's applicable fleet average NMOG value is
below the applicable fleet average NMOG standard, times the applicable
production for a given model year. NMOG credits have units of g/mi.
Debits means fleet average NMOG debits as calculated from the
amount that the manufacturer's applicable fleet average NMOG value is
above the applicable fleet average NMOG standard, times the applicable
production for a given model year. NMOG debits have units of g/mi.
Dedicated ethanol vehicle means any ethanol-fueled motor vehicle
that is engineered and designed to be operated solely on ethanol.
Dedicated methanol vehicle means any methanol-fueled motor vehicle
that is engineered and designed to be operated solely on methanol.
Diesel engine means any engine powered with diesel fuel, gaseous
fuel, or alcohol fuel for which diesel engine speed/torque
characteristics and vehicle applications are retained.
Electric vehicle means any vehicle which operates solely by use of
a battery or battery pack. This definition also includes vehicles which
are powered mainly through the use of an electric battery or battery
pack, but which use a flywheel that stores energy produced by the
electric motor or through regenerative braking to assist in vehicle
operation.
Element of design means any control system (i.e., computer
software, electronic control system, emission control system, computer
logic), and/or control system calibrations and/or the results of
systems interaction, and/or hardware items on a motor vehicle or motor
vehicle engine.
Ethanol means any fuel for motor vehicles and motor vehicle engines
that is composed of either commercially available or chemically pure
ethanol (CH<INF>3</INF>CH<INF>2</INF>OH) and gasoline as specified in
Sec. 86.1771 (Fuel Specifications). The required fuel blend is based on
the type of ethanol-fueled vehicle being certified and the particular
aspect of the certification procedure being conducted.
Ethanol vehicle means any motor vehicle that is engineered and
designed to be operated using ethanol as a fuel.
Executive Officer of the California Air Resources Board (ARB), as
used in the referenced materials listed in Sec. 86.1 and Appendix XIII
of this part, means the Administrator of the Environmental Protection
Agency (EPA).
Fleet average NMOG value is the fleet average NMOG value calculated
for a particular averaging set, based upon the applicable production
for that averaging set.
49 states is the region comprised of the United States excluding
California.
Fuel-fired heater means a fuel burning device which creates heat
for the purpose of warming the passenger compartment of a vehicle but
does not contribute to the propulsion of the vehicle.
Gaseous fuels means liquefied petroleum gas, compressed natural
gas, or liquefied natural gas fuels for use in motor vehicles.
Hybrid electric vehicle (HEV) means any vehicle which is included
in the definition of a ``series hybrid electric vehicle,'' a ``parallel
hybrid electric vehicle,'' or a ``battery assisted combustion engine
vehicle.''
Low emission vehicle (LEV) means any vehicle certified to the low
emission vehicle standards specified in this subpart.
Low volume manufacturer, for a particular model year, means any
vehicle manufacturer that: Is considered a ``small volume
manufacturer'' by the State of California according to the State of
California regulatory definition of ``small volume manufacturer'',
contained in the California Regulatory Requirements Applicable to the
National Low Emission Vehicle Program (October, 1996), which is
incorporated by reference (see Sec. 86.1); and has nationwide sales of
light-duty vehicles and light light-duty trucks less than or equal to
40,000 units per model year based on the average number of vehicles
sold by the manufacturer for each of the three most recent model years.
For manufacturers certifying for the first time, model-year sales shall
be based on projected sales.
Methane reactivity adjustment factor means a factor applied to the
mass of methane emissions from natural gas fueled vehicles for the
purpose of determining the gasoline equivalent ozone-forming potential
of the methane emissions.
Methanol means any fuel for motor vehicles and motor vehicle
engines that is composed of either commercially available or chemically
pure methanol (CH<INF>3</INF>OH) and gasoline as specified in
Sec. 86.1771 (Fuel Specifications). The required fuel blend is based on
the type of methanol-fueled vehicle being certified and the particular
aspect of the certification procedure being conducted.
Methanol vehicle means any motor vehicle that is engineered and
designed to be operated using methanol as a fuel.
Natural gas means either compressed natural gas or liquefied
natural gas.
Natural gas vehicle means any motor vehicle that is engineered and
designed to be operated using either compressed natural gas or
liquefied natural gas.
Non-Core Stable Standards means the standards and requirements in
Sec. 86.1705(g)(1)(vii) through (xii).
Non-methane organic gases (NMOG) means the sum of oxygenated and
non-oxygenated hydrocarbons contained in a gas sample as measured in
accordance with Chapter 5 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October,
1996). These requirements are incorporated by reference (see
Sec. 86.1).
Non-regeneration emission test means a complete emission test which
does not include a regeneration.
Northeast Trading Region (NTR) means the region comprised of the
states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont,
and Virginia, and the District of Columbia.
Organic material non-methane hydrocarbon equivalent (or OMNMHCE)
for methanol-fueled vehicles means the sum of the carbon mass
contribution of non-oxygenated hydrocarbons (excluding methane),
methanol, and formaldehyde as contained in a gas sample, expressed as
gasoline-fueled hydrocarbons. For ethanol-fueled vehicles, organic
material non-methane hydrocarbon equivalent (OMNMHCE) means the sum of
carbon mass contribution of non-oxygenated

[[Page 31244]]

hydrocarbons (excluding methane), methanol, ethanol, formaldehyde and
acetaldehyde as contained in a gas sample, expressed as gasoline-fueled
hydrocarbons.
Ozone deterioration factor means a factor applied to the mass of
NMOG emissions from TLEVs, LEVs, or ULEVs which accounts for changes in
the ozone-forming potential of the NMOG emissions from a vehicle as it
accumulates mileage.
Parallel hybrid electric vehicle means any vehicle which allows
power to be delivered to the driven wheels by either a combustion
engine and/or by a battery powered electric motor.
Periodically regenerating trap oxidizer system means a trap
oxidizer system that utilizes, during normal driving conditions for
cleaning the trap, an automated regeneration mode which can be easily
detected.
Point of first sale is the location where the completed LDV or LDT
is purchased, also known as the final product purchase location. The
point of first sale may be a retail customer, dealer, or secondary
manufacturer. In cases where the end user purchases the completed
vehicle directly from the manufacturer, the end user is the point of
first sale.
Production is the number of vehicles and/or trucks that a
manufacturer produces in a given model year that are subject to the
provisions of this subpart and are included in the same averaging set.
Reactivity adjustment factor means a fraction applied to the mass
of NMOG emission from a vehicle powered by a fuel other than
conventional gasoline for the purpose of determining a gasoline-
equivalent NMOG emission value. The reactivity adjustment factor is
defined as the ozone-forming potential of the exhaust from a vehicle
powered by a fuel other than conventional gasoline divided by the
ozone-forming potential of conventional gasoline vehicle exhaust.
Regeneration means the process of oxidizing accumulated particulate
matter. It may occur continually or periodically.
Regeneration emission test means a complete emission test which
includes a regeneration.
Regeneration interval means the interval from the start of a
regeneration to the start of the next regeneration.
Series hybrid electric vehicle means any vehicle which allows power
to be delivered to the driven wheels solely by a battery powered
electric motor, but which also incorporates the use of a combustion
engine to provide power to the battery and/or electric motor.
37 States is the trading region comprised of the United States
excluding California and the Northeast Trading Region.
Transitional low emission vehicle (TLEV) means any vehicle
certified to the transitional low emission vehicle standards specified
in this subpart.
Trap oxidizer system means an emission control system which
consists of a trap to collect particulate matter and a mechanism to
oxidize the accumulated particulate.
Type A hybrid electric vehicle means an HEV which achieves a
minimum range of 60 miles over the All-Electric Range Test as defined
in Sec. 86.1770.
Type B hybrid electric vehicle means an HEV which achieves a range
of 40-59 miles over the All-Electric Range Test as defined in
Sec. 86.1770.
Type C hybrid electric vehicle means an HEV which achieves a range
of 0-39 miles over the All-Electric Range test and all other HEVs
excluding ``Type A'' and ``Type B'' HEVs as defined in Sec. 86.1770.
Ultra-low emission vehicle (ULEV) means any vehicle certified to
the ultra-low emission vehicle standards specified in this subpart.
Zero-emission vehicle (ZEV) means any vehicle which is certified to
produce zero emissions of any criteria pollutants under any and all
possible operational modes and conditions. Incorporation of a fuel
fired heater shall not preclude a vehicle from being certified as a ZEV
provided the fuel fired heater cannot be operated at ambient
temperatures above 40 degrees Fahrenheit and the heater is demonstrated
to have zero evaporative emissions under any and all possible
operational modes and conditions.

Sec. 86.1703-97 Abbreviations.

(a) The abbreviations in subpart A of this part apply to this
subpart.
(b) In addition, the following abbreviations shall apply to this
subpart:

HEV--hybrid electric vehicle.
LEV--low emission vehicle.
NMOG--non-methane organic gases.
NTR--Northeast Trading Region.
TLEV--transitional low emission vehicle.
ULEV--ultra low emission vehicle.
ZEV--zero emission vehicle.

Sec. 86.1704-97 Section numbering; construction.

(a) The model year of initial applicability is indicated by the
last two digits of the six-digit group of the section number. A section
remains in effect for subsequent model years until it is superseded.
(b) A section reference without a model year suffix shall be
interpreted to be a reference to the section applicable to the
appropriate model year.

Sec. 86.1705-97 General provisions; opt-in; opt-out.

(a) Covered manufacturers must comply with the provisions in this
subpart, and in addition, must comply with the requirements of 40 CFR
parts 85 and 86. A manufacturer shall be a covered manufacturer if:
(1) The manufacturer (or, in the case of joint ventures or similar
cooperative arrangements between two or more manufacturers, the
participating manufacturers) has opted into the program pursuant to
paragraph (c) of this section;
(2) Where a manufacturer has included the condition on opt-in
provided for in paragraph (c) of this section, that condition has been
satisfied; and
(3) The manufacturer has not validly opted out, pursuant to
paragraphs (d) and (e) of this section, or the manufacturer has validly
opted out but that opt-out has not become effective under paragraph (d)
of this section.
(b) Covered manufacturers must comply with the standards and
requirements specified in this subpart beginning in model year 1997. A
manufacturer not listed in Sec. 86.1706(c) that opts into the program
after EPA issues a finding pursuant to Sec. 86.1706(a) that the program
is in effect must comply with the standards and requirements of this
subpart beginning in the model year that includes January 1 of the
calendar year after the calendar year in which that manufacturer opts
in. Light-duty vehicles and light light-duty trucks sold by covered
manufacturers must comply with the provisions of this subpart.
(c)(1) To opt into the National LEV program, a motor vehicle
manufacturer must submit a written statement to the Administrator
signed by a person or entity within the corporation or business with
authority to bind the corporation or business to its election and
holding the position of vice president for environmental affairs or a
position of comparable or greater authority. The statement must
unambiguously and unconditionally (apart from the permissible condition
specified in paragraph (c)(2) of this section) indicate the
manufacturer's agreement to opt into the program and be subject to the
provisions in this subpart, and include the following language:
[xx company,] its subsidiaries, successors and assigns hereby opts
into the voluntary National LEV program, as defined in 40 CFR part 86,
subpart R,

[[Page 31245]]

and agrees to be legally bound by all of the standards, requirements
and other provisions of the National LEV program. [xx company] commits
not to challenge EPA's authority to establish or enforce the National
LEV program, and commits not to seek to certify any vehicle except in
compliance with the regulations in subpart R.
(2) The opt-in statement may indicate that the manufacturer opts
into the program subject to the condition that the Administrator finds
under Sec. 86.1706(a) that the National LEV program is in effect with
the following language: ``This opt-in is subject only to the condition
that the Administrator make a finding pursuant to 40 CFR 86.1706(a)
that the National LEV program is in effect.''
(3) A manufacturer shall be considered to have opted in upon the
Administrator's receipt of the opt-in notification and satisfaction of
the condition set forth in paragraph (c)(2) of this section, if
applicable.
(d) A covered manufacturer may opt out of the National LEV program
only if one of the following specified conditions allowing opt-out
occurs. A manufacturer must exercise the opt-out option within 180 days
of the occurrence allowing opt-out, or the opt-out option expires. This
time period for opt-out is extended by an additional thirty days if any
manufacturer submits an opt-out notification to the Administrator
within the 180 day time period. A valid opt-out shall become effective
upon the times indicated in paragraphs (d)(2) (iii) and (iv) of this
section or on a date specified by the manufacturer, whichever is later.
The following are the conditions allowing opt-out:
(1) [Reserved]
(2) EPA promulgates a final rule or other final agency action
making a revision not specified in paragraph (g)(3) or (g)(4) of this
section to a standard or requirement listed in paragraph (g)(1) of this
section and the covered manufacturer objects to the revision.
(i) Only a covered manufacturer that objects to a revision may opt
out if EPA adopts that revision, except that if such a manufacturer
opts out, other manufacturers that did not object to the revision may
also opt out on the basis of that revision. An objection shall be
sufficient for this purpose only if it was filed during the public
comment period on the proposed revision and the objection specifies
that the revision is sufficiently significant to allow opt-out under
this paragraph (d).
(ii) An opt-out under this paragraph (d) shall be extinguished if,
prior to the effective date of the opt-out specified in paragraphs
(d)(2)(iii) and (iv) of this section, the Administrator signs a rule to
withdraw the revision to which the manufacturer objected.
(iii) A valid opt-out based on a revision to a Core Stable Standard
shall become effective starting the model year that includes January 1
of the second calendar year following the calendar year in which the
manufacturer opted out or the first model year to which EPA's revised
regulations apply, whichever is sooner.
(iv) A valid opt-out based on a revision to a Non-Core Stable
Standard shall become effective starting the first model year to which
EPA's revised regulations apply.
(e)(1) To opt out of the National LEV program, a covered
manufacturer must notify the Administrator as provided in paragraph
(c)(1) of this section, except that the notification shall specify the
condition under paragraph (d) of this section allowing opt-out, include
evidence that this condition has occurred, and indicate the
manufacturer's intent to opt out of the program and no longer be
subject to the provisions in this subpart. For an opt-out pursuant to
paragraph (d)(2) of this section, the manufacturer must specify the
revision triggering the opt-out and shall also provide evidence that
the triggering revision does not harmonize the standard or requirement
with a comparable California standard or requirement, if applicable, or
that the triggering revision has increased the stringency of the
revised standard or requirement, if applicable. The notification shall
include the following language: ``[xx company,] its subsidiaries,
successors and assigns hereby opt out of the voluntary National LEV
program, as defined in 40 CFR part 86, subpart R.''
(2) Within sixty days of receipt of an opt-out notification, EPA
shall determine whether the opt-out is valid by determining whether the
alleged condition allowing opt-out has occurred and whether the opt-out
complies with the requirements under paragraph (d) of this section and
this paragraph (e). For an opt-out based on paragraph (d)(2) of this
section, EPA may determine that the opt-out is valid provided that EPA
does not withdraw the revision objected to prior to the effective date
of the opt-out. If EPA then withdraws the revision, EPA may find that
the opt-out is no longer valid. An EPA determination regarding the
validity of an opt-out is not a rule, but is a nationally applicable
final agency action subject to judicial review pursuant to section
307(b) of the Clean Air Act (42 U.S.C. 7607(b)).
(3) A manufacturer that has submitted an opt-out notification to
EPA remains a covered manufacturer under paragraph (a) of this section
until EPA or a reviewing court determines that the opt-out is valid and
the opt-out has come into effect under paragraph (d) of this section.
(4) In the event that a manufacturer petitions for judicial review
of an EPA determination that an opt-out is invalid, the manufacturer
remains a covered manufacturer until final judicial resolution of the
petition. Pending resolution of the petition, and after the date that
the opt-out would have come into effect under paragraph (d) of this
section if EPA had determined the opt-out was valid, the manufacturer
may certify vehicles to any standards in this part 86 applicable to
vehicles certified in that model year and sell such vehicles without
regard to the limitations contained in Sec. 86.1711. However, if the
opt-out is finally determined to be invalid, the manufacturer will be
liable for any failure to comply with Secs. 86.1710 through 86.1712,
except for failure to comply with the limitations contained in
Sec. 86.1711(b).
(f) A manufacturer that has opted out and is no longer a covered
manufacturer under this subpart shall be subject to all provisions that
would apply to a manufacturer that had not opted into the National LEV
program, including all applicable standards and requirements
promulgated under title II of the Clean Air Act (42 U.S.C. 7521 et
seq.) and any state standards in effect pursuant to section 177 of the
Clean Air Act (42 U.S.C. 7507). Vehicles certified under the National
LEV program must continue to meet the standards to which they were
certified, regardless of whether the manufacturer of those vehicles
remains a covered manufacturer. A manufacturer that has opted out
remains responsible for any debits outstanding on the effective date of
opt-out, pursuant to Sec. 86.1710(d)(3).
(g)(1) The following are the emissions standards and requirements
that, if revised, may provide covered manufacturers the opportunity to
opt out pursuant to paragraph (d)(2) of this section:
(i) The tailpipe emissions standards for NMOG, NO<INF>X</INF>, CO,
HCHO, and PM specified in Sec. 86.1708 (b) and (c) and Sec. 86.1709 (b)
and (c);
(ii) Fleet average NMOG standards and averaging, banking and
trading provisions specified in Sec. 86.1710;
(iii) Provisions regarding limitations on sale of Tier 1 vehicles
and TLEVs contained in Sec. 86.1711;

[[Page 31246]]

(iv) The compliance test procedure (Federal Test Procedure) as
specified in subparts A and B of this part, as used for determining
compliance with the exhaust emission standards specified in
Sec. 86.1708 (b) and (c) and Sec. 86.1709 (b) and (c);
(v) The compliance test fuel, as specified in Sec. 86.1771;
(vi) The definition of low volume manufacturer specified in
Sec. 86.1702;
(vii) The on-board diagnostic system requirements specified in
Sec. 86.1717;
(viii) The light-duty vehicle refueling emissions standards and
provisions specified in Secs. 86.098-8(d) and subsequent model year
provisions, and the light-duty truck refueling emissions standards and
provisions specified in Sec. 86.001-9(d) and subsequent model year
provisions;
(ix) The cold temperature carbon monoxide standards and provisions
for light-duty vehicles specified in Sec. 86.096-8(k) and subsequent
model year provisions, and for light light-duty trucks specified in
Sec. 86.097-9(k) and subsequent model year provisions;
(x) The evaporative emissions standards and provisions for light-
duty vehicles specified in Sec. 86.096-8(b) and subsequent model year
provisions, and the evaporative emissions standards and provisions for
light light-duty trucks specified in Sec. 86.097-9(b) and subsequent
model year provisions;
(xi) The reactivity adjustment factors and procedures specified in
Sec. 86.1777(d);
(xii) The Supplemental Federal Test Procedure, standards and phase-
in schedules specified in Sec. 86.000-8(e) and subsequent model year
provisions, Sec. 86.000-9(e) and subsequent model year provisions,
Sec. 86.127 (f) and (g), Sec. 86.129 (e) and (f), Sec. 86.130(e),
Sec. 86.131(f), Sec. 86.132 (n) and (o), Sec. 86.158, Sec. 86.159,
Sec. 86.160, Sec. 86.161, Sec. 86.162, Sec. 86.163, Sec. 86.164, and
Appendix I, paragraphs (g) and (h), to this part.
(2) The standards and requirements listed in paragraphs (g)(1) (i)
through (vi) of this section are the ``Core Stable Standards''; the
standards and requirements listed in paragraphs (g)(1) (vii) through
(xii) of this section are the ``Non-Core Stable Standards.''
(3) The following types of revisions to the Stable Standards listed
in paragraphs (g)(1) (i) through (xii) of this section do not provide
covered manufacturers the right to opt out of the National LEV program:
(i) Revisions to which covered manufacturers do not object;
(ii) Revisions to a Non-Core Stable Standard that do not increase
the overall stringency of the standard or requirement;
(iii) Revisions to a Non-Core Stable Standard that harmonize the
standard or requirement with the comparable California standard or
requirement for the same model year (even if the harmonization
increases the stringency of the standard or requirement);
(iv) Revisions to a Non-Core Stable Standard that are effective
after model year 2006;
(v) Revisions to cold temperature carbon monoxide standards and
provisions for light-duty vehicles (as specified in Sec. 86.096-8(k)
and subsequent model year provisions) and for light light-duty trucks
(as specified in Sec. 86.097-9(k) and subsequent model year provisions)
that are effective after model year 2000;
(vi) Revisions to the reactivity adjustment factors specified in
Sec. 86.1777 applicable to gasoline meeting the specifications of
Sec. 86.1771(a)(1), if such revisions maintain these reactivity
adjustment factors at values not greater than 1.0.
(4) Promulgation of mandatory standards and requirements that end
the effectiveness of the National LEV program pursuant to
Sec. 86.1701(c) does not provide an opportunity to opt out of the
National LEV program.
(5) Adoption of the National LEV program does not impose gasoline
or other in-use fuel requirements and is not intended to require any
new federal or state regulation of fuels. Vehicles under National LEV
will be able to operate on any fuels, including conventional gasoline,
that, in the absence of the National LEV program, could be sold under
federal or state law.

Sec. 86.1706-97 National LEV program in effect.

(a)(1) EPA shall find that the NLEV program is in effect and shall
subsequently publish this determination if the following conditions
have been met:
(i) All manufacturers listed in paragraph (b) of this section have
lawfully opted in pursuant to Sec. 86.1705; and
(ii) No valid opt-out has become effective pursuant to
Sec. 86.1705.
(2) A finding pursuant to paragraph (a)(1) of this section shall
become effective at time of signature by the Administrator.
(b) List of manufacturers of light-duty vehicles and light-duty
trucks:

American Suzuki Motor Corporation
BMW of North America, Inc.
Chrysler Corporation
Fiat Auto U.S.A., Inc.
Ford Motor Company
General Motors Corporation
Hyundai Motor America
Isuzu Motors America, Inc.
Jaguar Motors Ltd.
Kia Motors America, Inc.
Land Rover North America, Inc.
Mazda (North America) Inc.
Mercedes-Benz of North America
Mitsubishi Motor Sales of America, Inc.
Nissan North America, Inc.
Porsche Cars of North America, Inc.
Rolls-Royce Motor Cars Inc.
Saab Cars USA, Inc.
Subaru of America, Inc.
Toyota Motor Sales, U.S.A., Inc.
Volkswagen of America, Inc.
Volvo North America Corporation

Sec. 86.1707-97 [Reserved]

Sec. 86.1708-97 Exhaust emission standards for 1997 and later light-
duty vehicles.

(a) Light-duty vehicles certified under the provisions of this
subpart shall comply with the applicable exhaust emission standards in
this section. In addition to the exhaust emission standards in this
section, light-duty vehicles certified under the provisions of this
subpart shall comply with all applicable emission standards and
requirements in Sec. 86.096-8 and subsequent model year provisions.
(1) Light-duty vehicles that meet the exhaust emission standards in
this section are deemed to be in compliance with all the exhaust
emission standards in Sec. 86.096-8(a)(1)(i) and subsequent model year
provisions, except for the emission standards and test procedures for
total hydrocarbon (THC), particulate matter (PM), and high altitude
conditions. Diesel light-duty vehicles that meet the PM standard in
this section are deemed to be in compliance with the PM standard in
Sec. 86.096-8 and subsequent model year provisions.
(b)(1) Standards. (i) Exhaust emissions from 1997 and later model
year light-duty vehicles classified as TLEVs, LEVs, and ULEVs shall not
exceed the standards in Tables R97-1 and R97-2 in rows designated with
the applicable vehicle emission category. These standards shall apply
equally to certification and in-use vehicles, except as provided in
paragraph (c) of this section. The tables follow:

[[Page 31247]]

Table R97-1.--Intermediate Useful Life Standards (g/mi) for Light-Duty
Vehicles Classified as TLEVs, LEVs, and ULEVs
------------------------------------------------------------------------
Vehicle emission category NMOG CO NO<INF>X HCHO
------------------------------------------------------------------------
TLEV........................ 0.125 3.4 0.4 0.015
LEV......................... 0.075 3.4 0.2 0.015
ULEV........................ 0.040 1.7 0.2 0.008
------------------------------------------------------------------------

Table R97-2.--Full Useful Life Standards (g/mi) for Light-Duty Vehicles Classified as TLEVs, LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
PM
Vehicle emission category NMOG CO NO<INF>X S HCHO (diesels
only)
----------------------------------------------------------------------------------------------------------------
TLEV..................................................... 0.156 4.2 0.6 0.018 0.08
LEV...................................................... 0.090 4.2 0.3 0.018 0.08
ULEV..................................................... 0.055 2.1 0.3 0.011 0.04
----------------------------------------------------------------------------------------------------------------

(ii) Diesel vehicles. The particulate matter (PM) standards in
paragraph (b)(1)(i) of this section are applicable to diesel light-duty
vehicles only. For diesel vehicles certifying to the standards set
forth in paragraph (b)(1)(i) of this section, ``NMOG'' shall mean non-
methane hydrocarbons.
(iii) NMOG standards for flexible-fuel and dual-fuel light-duty
vehicles. Flexible-fuel and dual-fuel light-duty vehicles shall be
certified to exhaust emission standards for NMOG established both for
the operation of the vehicle on an available fuel other than gasoline
and for the operation of the vehicle on gasoline as specified in
Sec. 86.1771.
(A) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light-duty vehicles when certifying the vehicle for operation
on fuels other than gasoline shall be the NMOG standards in paragraph
(b)(1)(i) of this section.
(B) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light-duty vehicles when certifying the vehicle for operation
on gasoline shall be the NMOG standards in Tables R97-3 and R97-4 in
the rows designated with the applicable vehicle emission category, as
follows:

Table R97-3.--Intermediate Useful Life NMOG Standards (g/mi) for
Flexible-Fuel and Dual-Fuel Light-Duty Vehicles Classified as TLEVs,
LEVs, and ULEVs
------------------------------------------------------------------------
Vehicle emission category NMOG
------------------------------------------------------------------------
TLEV........................................................... 0.25
LEV............................................................ 0.125
ULEV........................................................... 0.075
------------------------------------------------------------------------

Table R97-4.--Full Useful Life NMOG Standards (g/mi) for Flexible-Fuel
and Dual-Fuel Light-Duty Vehicles Classified as TLEVs, LEVs, and ULEVs
------------------------------------------------------------------------
Vehicle emission category NMOG
------------------------------------------------------------------------
TLEV........................................................... 0.31
LEV............................................................ 0.156
ULEV........................................................... 0.090
------------------------------------------------------------------------

(iv) Highway NO<INF>X</INF>. The maximum projected NO<INF>X</INF>
emissions measured on the federal Highway Fuel Economy Test in 40 CFR
part 600, subpart B, shall not be greater than 1.33 times the
applicable light-duty vehicle standards shown in Tables R97-1 and R97-
2. Both the projected emissions and the Highway Fuel Economy Test
standard shall be rounded to the nearest 0.1 g/mi in accordance with
the Rounding-Off Method specified in ASTM E29-90, Standard Practice for
Using Significant Digits in Test Data to Determine Conformance with
Specifications, before being compared. These procedures are
incorporated by reference (see Sec. 86.1).
(v) Hybrid electric vehicle requirements. Deterioration factors for
hybrid electric vehicles shall be based on the emissions and mileage
accumulation of the auxiliary power unit. For certification purposes
only, Type A hybrid electric vehicles shall demonstrate compliance with
50,000 mile emission standards (using 50,000 mile deterioration
factors), and shall not be required to demonstrate compliance with
100,000 mile emission standards. For certification purposes only, Type
B hybrid electric vehicles shall demonstrate compliance with 50,000
mile emission standards (using 50,000 mile deterioration factors) and
100,000 mile emission standards (using 75,000 mile deterioration
factors). For certification purposes only, Type C hybrid electric
vehicles shall demonstrate compliance with 50,000 mile emission
standards (using 50,000 mile deterioration factors) and 100,000 mile
emission standards (using 100,000 mile deterioration factors).
(vi) 50 degree F requirements. Light-duty vehicles shall comply
with the emission standards for NMOG, CO, NO<INF>X</INF>, and HCHO in
paragraph (b)(1)(i) of this section at 50 deg. F, according to the
procedure specified in Sec. 86.1773. Hybrid electric, natural gas, and
diesel fueled vehicles are not required to comply with the provisions
of this paragraph (b)(1)(vi).
(2) [Reserved]
(c) Intermediate in-use emission standards. (1) 1997 through 1999
model year light-duty vehicles certified as LEVs and 1997 through 2002
model year light-duty vehicles certified as ULEVs shall meet the
applicable intermediate and full useful life in-use standards in
paragraphs (c)(2) or (c)(3) of this section, according to the following
provisions:
(i) In-use compliance with standards beyond the intermediate useful
life shall be waived for LEVs and ULEVs through the 1998 model year.
(ii) The applicable in-use emission standards for vehicle emission
categories and model years not shown in Tables R97-5, R97-6, and R97-7
shall be the intermediate and full useful life standards in paragraph
(b) of this section.
(2) Light-duty vehicles, including flexible-fuel and dual-fuel
light-duty vehicles when operated on an available fuel other than
gasoline, shall meet all intermediate and full useful life in-use
standards for the applicable vehicle emission category and model year
in Tables R97-5 and R97-6, as follows:

[[Page 31248]]

Table R97-5.--Intermediate Useful Life (50,000 Mile) In-Use Standards (g/mi) for Light-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
Vehicle emission category Model year NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
LEV......................................................... 1997-1999 0.100 3.4 0.3 0.015
ULEV........................................................ 1997-1998 0.058 2.6 0.3 0.012
1999-2000 0.055 2.1 0.3 0.012
2001-2002 0.055 2.1 0.3 0.008
----------------------------------------------------------------------------------------------------------------

Table R97-6.--Full Useful Life (100,000 Mile) In-Use Standards (g/mi) for Light-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
Model year NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
LEV......................................................... 1999 0.125 4.2 0.4 0.018
ULEV........................................................ 1999-2002 0.075 3.4 0.4 0.011
----------------------------------------------------------------------------------------------------------------

(3) Flexible-fuel and dual-fuel light-duty vehicles when operated
on gasoline shall meet all intermediate and full useful life in-use
standards for the applicable vehicle emission category and model year
in Tables R97-5 and R97-6, except that the applicable intermediate
useful life NMOG standards for 1997 and 1998 model year flexible-fuel
and dual-fuel light-duty vehicles when operated on gasoline shall be
those in Table R97-7, as follows:

Table R97-7.--Intermediate Useful Life (50,000 Mile) In-Use NMOG
Standards for 1997 and 1998 Model Year Flexible-Fuel and Dual-Fuel Light-
Duty Vehicles When Operated on Gasoline
------------------------------------------------------------------------
NMOG (g/
Vehicle emission category mi)
------------------------------------------------------------------------
LEV............................................................ 0.188
ULEV........................................................... 0.100
------------------------------------------------------------------------

(d) NMOG measurement and reactivity adjustment. NMOG emissions
shall be measured in accordance with Chapter 5 of the California
Regulatory Requirements Applicable to the National Low Emission Vehicle
Program (October, 1996). These requirements are incorporated by
reference (see Sec. 86.1). NMOG emissions shall be compared to the
applicable NMOG emissions certification or in-use standard according to
the following calculation procedures:
(1) For TLEVs, LEVs, and ULEVs designed to operate on any fuel
other than conventional gasoline, and for flexible-fuel and dual-fuel
TLEVs, LEVs, and ULEVs when operated on a fuel other than gasoline as
specified in Sec. 86.1771, manufacturers shall multiply NMOG exhaust
mass emission levels by the applicable reactivity adjustment factor set
forth in Sec. 86.1777, or established by the Administrator pursuant to
Sec. 86.1777. The product of the NMOG exhaust emission levels and the
reactivity adjustment factor shall be compared to the applicable
certification or in-use exhaust NMOG mass emission standards
established for the particular vehicle emission category to determine
compliance.
(2) In addition to multiplying the exhaust NMOG mass emission
levels by the applicable reactivity adjustment factor, TLEV, LEV, or
ULEV natural gas vehicles shall multiply the exhaust methane mass
emission level by the applicable methane reactivity adjustment factor
in Sec. 86.1777 or established by the Administrator pursuant to
Sec. 86.1777. The reactivity-adjusted NMOG value shall be added to the
reactivity-adjusted methane value and then the sum shall be compared to
the applicable certification or in-use exhaust NMOG mass emission
standards established for the particular vehicle emission category to
determine compliance.
(3) The exhaust NMOG mass emission levels for fuel-flexible and
dual-fuel vehicles when operating on gasoline as specified in
Sec. 86.1771 shall not be multiplied by a reactivity adjustment factor.

Sec. 86.1709-97 Exhaust emission standards for 1997 and later light
light-duty trucks.

(a) Light light-duty trucks certified under the provisions of this
subpart shall comply with the applicable exhaust emission standards in
this section. In addition to the exhaust emission standards in this
section, light light-duty trucks certified under the provisions of this
subpart shall comply with all applicable emission standards and
requirements in Sec. 86.097-9 and subsequent model year provisions.
(1) Light light-duty trucks that meet the exhaust emission
standards in this section are deemed to be in compliance with all the
exhaust emission standards in Sec. 86.097-9(a)(1)(i) and subsequent
model year provisions, except for the emission standards and test
procedures for total hydrocarbon (THC), particulate matter (PM), and
high altitude conditions. Diesel light light-duty trucks that meet the
PM standard in this section are deemed to be in compliance with the PM
standards in Sec. 86.097-9 and subsequent model year provisions.
(2) [Reserved]
(b)(1) Standards. (i) Exhaust emissions from 1997 and later model
year light light-duty trucks classified as TLEVs, LEVs, and ULEVs shall
not exceed the standards in Tables R97-8 and R97-9 in rows designated
with the applicable vehicle emission category and loaded vehicle
weight. These standards shall apply equally to certification and in-use
vehicles, except as provided in paragraph (c) of this section. The
tables follow:

Table R97-8.--Intermediate Useful Life Standards (g/mi) for Light Light-Duty Trucks Classified as TLEVs, LEVs,
and ULEVs
----------------------------------------------------------------------------------------------------------------
Loaded vehicle weight Vehicle emission category NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
0-3750................................. TLEV 0.125 3.4 0.4 0.015

[[Page 31249]]

LEV 0.075 3.4 0.2 0.015
ULEV 0.040 1.7 0.2 0.008
3751-5750.............................. TLEV 0.160 4.4 0.7 0.018
LEV 0.100 4.4 0.4 0.018
ULEV 0.050 2.2 0.4 0.009
----------------------------------------------------------------------------------------------------------------

Table R97-9.--Full Useful Life Standards (g/mi) for Light Light-Duty Trucks Classified as TLEVs, LEVs, and ULEVs
----------------------------------------------------------------------------------------------------------------
PM
Loaded vehicle weight Vehicle emission NMOG CO NO<INF>X HCHO (diesels
category only)
----------------------------------------------------------------------------------------------------------------
0-3750............................ TLEV 0.156 4.2 0.6 0.018 0.08
LEV 0.090 4.2 0.3 0.018 0.08
ULEV 0.055 2.1 0.3 0.011 0.04
3751-5750......................... TLEV 0.200 5.5 0.9 0.023 0.10
LEV 0.130 5.5 0.5 0.023 0.10
ULEV 0.070 2.8 0.5 0.013 0.05
----------------------------------------------------------------------------------------------------------------

(ii) Diesel vehicles. The particulate matter (PM) standards in
paragraph (b)(1)(i) of this section are applicable to diesel vehicles
only. For diesel vehicles certifying to the standards set forth in
paragraph (b)(1)(i) of this section, ``NMOG'' shall mean non-methane
hydrocarbons.
(iii) NMOG standards for flexible-fuel and dual-fuel light duty
trucks. Flexible-fuel and dual-fuel light light-duty trucks shall be
certified to exhaust emission standards for NMOG established both for
the operation of the vehicle on an available fuel other than gasoline
and for the operation of the vehicle on gasoline as specified in
Sec. 86.1771.
(A) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light light-duty trucks when certifying the vehicle for
operation on fuels other than gasoline shall be the NMOG standards in
paragraph (b)(1)(i) of this section.
(B) The applicable NMOG emission standards for flexible-fuel and
dual-fuel light light-duty trucks when certifying the vehicle for
operation on gasoline shall be the NMOG standards in Tables R97-10 and
R97-11 in the rows designated with the applicable vehicle emission
category and loaded vehicle weight, as follows:

Table R97-10.--Intermediate Useful Life NMOG Standards (g/mi) for
Flexible-Fuel and Dual-Fuel Light Light-Duty Trucks Classified as TLEVs,
LEVs, and ULEVs
------------------------------------------------------------------------
Loaded vehicle weight Vehicle emission category NMOG
------------------------------------------------------------------------
0-3750............................... TLEV 0.25
LEV 0.125
ULEV 0.075
3751-5750............................ TLEV 0.32
LEV 0.160
ULEV 0.100
------------------------------------------------------------------------

Table R97-11.--Full Useful Life NMOG Standards (g/mi) for Flexible-Fuel
and Dual-Fuel Light Light-Duty Trucks Classified as TLEVs, LEVs, and
ULEVs
------------------------------------------------------------------------
Loaded vehicle weight Vehicle emission category NMOG
------------------------------------------------------------------------
0-3750............................... TLEV 0.31
LEV 0.156
ULEV 0.090
3751-5750............................ TLEV 0.40
LEV 0.200
ULEV 0.130
------------------------------------------------------------------------

(iv) Highway NO<INF>X</INF>. The maximum projected NO<INF>X</INF>
emissions measured on the federal Highway Fuel Economy Test in 40 CFR
part 600, subpart B, shall be not greater than 1.33 times the
applicable light light-duty truck standards shown in Tables R97-8 and
R97-9. Both the projected emissions and the Highway Fuel Economy Test
standard shall be rounded to the nearest 0.1 g/mi in accordance with
the Rounding-Off Method specified in ASTM E29-90, Standard Practice for
Using Significant Digits in Test Data to Determine Conformance with
Specifications, before being compared. These procedures are
incorporated by reference (see Sec. 86.1).
(v) Hybrid electric vehicle requirements. Deterioration factors for
hybrid electric vehicles shall be based on the emissions and mileage
accumulation of the auxiliary power unit. For certification purposes
only, Type A hybrid electric vehicles shall demonstrate compliance with
50,000 mile emission standards (using 50,000 mile deterioration
factors), and shall not be required to demonstrate compliance with
100,000 mile emission standards. For certification purposes only, Type
B hybrid electric vehicles shall demonstrate compliance with 50,000
mile emission standards (using 50,000 mile deterioration factors) and
100,000 mile emission standards (using 75,000 mile deterioration
factors). For certification purposes only, Type C hybrid electric
vehicles shall demonstrate compliance with 50,000 mile emission
standards (using 50,000 mile deterioration factors) and 100,000 mile
emission standards (using 100,000 mile deterioration factors).
(vi) 50 degree F requirements. Light light-duty trucks shall comply
with the emission standards for NMOG, CO, NO<INF>X</INF>, and HCHO in
paragraph (b)(1)(i) of this section at 50 degrees F, according to the
procedure specified in Sec. 86.1773. Hybrid electric vehicles, natural
gas vehicles, and diesel fueled vehicles are

[[Page 31250]]

not required to comply with the provisions of this paragraph
(b)(1)(vi).
(2) [Reserved]
(c) Intermediate in-use emission standards. (1) 1997 and 1998 model
year light light-duty trucks certified as LEVs or ULEVs shall meet the
applicable intermediate and full useful life in-use standards in
paragraphs (c)(2) or (c)(3) of this section, according to the following
provisions:
(i) In-use compliance with standards beyond the intermediate useful
life shall be waived for LEVs and ULEVs through the 1998 model year.
(ii) The applicable in-use emission standards for vehicle emission
categories and model years not shown in Tables R97-12, R97-13, and R97-
14 shall be the intermediate and full useful life standards in
paragraph (b) of this section.
(2) Light light-duty trucks, including flexible-fuel and dual-fuel
light light-duty trucks when operated on an available fuel other than
gasoline, shall meet all intermediate and full useful life in-use
standards for the applicable vehicle emission category, loaded vehicle
weight, and model year in Tables R97-12 and R97-13, as follows:

Table R97-12.--Intermediate Useful Life (50,000 Mile) In-Use Standards (g/mi) for Light Light-Duty Trucks
----------------------------------------------------------------------------------------------------------------
Vehicle emission
Loaded vehicle weight category Model year NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
0-3750.............................. LEV 1997-1999 0.100 3.4 0.3 0.015
ULEV 1997-1998 0.058 2.6 0.3 0.012
1999-2000 0.055 2.1 0.3 0.012
2001-2002 0.055 2.1 0.3 0.008
3751-5750............................ LEV 1997-1998 0.128 4.4 0.5 0.018
........................ 1999 0.130 4.4 0.5 0.018
ULEV 1997-1998 0.075 3.3 0.5 0.014
1999-2002 0.070 2.8 0.5 0.014
----------------------------------------------------------------------------------------------------------------

Table R97-13.--Full Useful Life (100,000 Mile) In-Use Standards (g/mi) for Light Light-Duty Trucks
----------------------------------------------------------------------------------------------------------------
Vehicle emission
Loaded vehicle weight category Model year NMOG CO NO<INF>X HCHO
----------------------------------------------------------------------------------------------------------------
0-3750............................... LEV 1999 0.125 4.2 0.4 0.018
ULEV 1999-2002 0.075 3.4 0.4 0.011
3751-5750............................ LEV 1999 0.160 5.5 0.7 0.018
ULEV 1999-2002 0.100 4.4 0.7 0.014
----------------------------------------------------------------------------------------------------------------

(3) Flexible-fuel and dual-fuel light light-duty trucks when
operated on gasoline shall meet all intermediate and full useful life
in-use standards for the applicable vehicle emission category and model
year in Tables R97-12 and R97-13, except that the applicable
intermediate useful life NMOG standards for 1997 and 1998 model year
flexible-fuel and dual-fuel light light-duty trucks when operated on
gasoline shall be those in Table R97-14, as follows:

Table R97-14.--Intermediate Useful Life (50,000 mile) In-Use NMOG
Standards (g/mi) for 1997 and 1998 Model Year Flexible-Fuel and Dual-
Fuel Light Light-Duty Trucks When Operated on Gasoline
------------------------------------------------------------------------
Vehicle emission
Loaded vehicle weight category NMOG
------------------------------------------------------------------------
0-3750............................... LEV 0.188
ULEV 0.100
3751-5750............................ LEV 0.238
ULEV 0.128
------------------------------------------------------------------------

(d) NMOG measurement and reactivity adjustment. NMOG emissions
shall be measured in accordance with Chapter 5 of the California
Regulatory Requirements Applicable to the National Low Emission Vehicle
Program (October, 1996). These procedures are incorporated by reference
(see Sec. 86.1). NMOG emissions shall be compared to the applicable
NMOG emissions certification or in-use standard according to the
following calculation procedures:
(1) For TLEVs, LEVs, and ULEVs designed to operate on any fuel
other than conventional gasoline, and for flexible-fuel and dual-fuel
TLEVs, LEVs, and ULEVs when operated on a fuel other than gasoline as
specified in Sec. 86.1771, manufacturers shall multiply NMOG mass
exhaust emission levels by the applicable reactivity adjustment factor
set forth in Sec. 86.1777 or established by the Administrator pursuant
to Sec. 86.1777. The product of the NMOG exhaust emission levels and
the reactivity adjustment factor shall be compared to the applicable
certification or in-use exhaust NMOG mass emission standards
established for the particular vehicle emission category to determine
compliance.
(2) In addition to multiplying the exhaust NMOG mass emission
levels by the applicable reactivity adjustment factor, TLEV, LEV, or
ULEV natural gas vehicles shall multiply the exhaust methane mass
emission level by the applicable methane reactivity adjustment factor
in Sec. 86.1777 or established by the Administrator pursuant to
Sec. 86.1777. The reactivity-adjusted NMOG value shall be added to the
reactivity-adjusted methane value and then the sum shall be compared to
the applicable certification or in-use exhaust NMOG mass emission
standards established for the particular vehicle emission category to
determine compliance.
(3) The exhaust NMOG mass emission levels for fuel-flexible and
dual-fuel vehicles when operating on gasoline as specified in
Sec. 86.1771 shall not be multiplied by a reactivity adjustment factor.

Sec. 86.1710-97 Fleet average non-methane organic gas exhaust emission
standards for light-duty vehicles and light light-duty trucks.

(a)(1) Each manufacturer shall certify light-duty vehicles or light
light-duty trucks to meet the exhaust emission standards in this
subpart for TLEVs, LEVs, ULEVs, or ZEVs, or the exhaust emission
standards of Sec. 86.096-8(a)(1)(i) and subsequent model year
provisions or Sec. 86.097-9(a)(1)(i) and subsequent

[[Page 31251]]

model year provisions, such that, using the applicable intermediate
useful life standards, the manufacturer's fleet average NMOG values for
light-duty vehicles and light light-duty trucks sold in the applicable
region according to the specifications of Tables R97-15 and R97-16 are
less than or equal to the standards in Tables R97-15 and R97-16 in the
rows designated with the applicable vehicle type, loaded vehicle
weight, and model year, as follows:

Table R97-15.--Fleet Average Non-Methane Organic Gas Standards (g/mi) for Light-Duty Vehicles and Light Light-
Duty Trucks Sold in the Northeast Trading Region
----------------------------------------------------------------------------------------------------------------
Loaded Fleet
Vehicle type vehicle Model year average
weight NMOG
----------------------------------------------------------------------------------------------------------------
Light-duty vehicles and Light-duty trucks.. All 1997..................................... 0.200
0-3750 1998..................................... 0.200
1999..................................... 0.148
2000..................................... 0.095
2001 and later........................... 0.075
Light-duty trucks.......................... 3751-5750 1997..................................... 0.256
1998..................................... 0.256
1999..................................... 0.190
2000..................................... 0.124
2001 and later........................... 0.100
----------------------------------------------------------------------------------------------------------------

Table R97-16.--Fleet Average Non-Methane Organic Gas Standards (g/mi) for Light-Duty Vehicles and Light Light-
Duty Trucks Sold in the 37 States
----------------------------------------------------------------------------------------------------------------
Loaded Fleet
Vehicle type vehicle Model year average
weight NMOG
----------------------------------------------------------------------------------------------------------------
Light-duty vehicles and Light light-duty All 2001 and later........................... 0.075
trucks. 0-3750
Light light-duty trucks.................... 3751-5750 2001 and later........................... 0.100
----------------------------------------------------------------------------------------------------------------

(2)(i) For the purpose of calculating the HEV contribution factor
for the fleet average NMOG value, a manufacturer may use adjusted
values to estimate the contributions of hybrid electric vehicles (or
``HEVs'') based on the range of the HEV without the use of the engine.
See Sec. 86.1702 for definitions of HEV types for purposes of
calculating adjusted NMOG emissions.
(ii) For the purpose of calculating fleet average NMOG values,
vehicles that have no tailpipe emissions but use fuel-fired heaters and
that are not certified as ZEVs shall be treated as Type A HEV ULEVs.
(3)(i) Each manufacturer's applicable fleet average NMOG value for
all light light-duty trucks from 0-3750 lbs loaded vehicle weight and
light-duty vehicles sold in the applicable region according to Tables
R97-15 and R97-16 shall be calculated in units of g/mi NMOG according
to the following equation, where the term ``Sold'' means sold in the
applicable region according to Tables R97-15 and R97-16, and the term
``Vehicles'' means light light-duty trucks from 0-3750 lbs loaded
vehicle weight and light-duty vehicles: (((No. of Vehicles Certified to
the Federal Tier 1 Exhaust Emission Standards and Sold) x (0.25))+((No.
of TLEVs Sold excluding HEVs) x (0.125))+((No. of LEVs Sold excluding
HEVs) x (0.075))+((No. of ULEVs Sold excluding HEVs) x (0.040))+(HEV
contribution factor))/(Total No. of Vehicles Sold, including ZEVs and
HEVs).
(ii)(A) ``HEV contribution factor'' shall mean the NMOG emission
contribution of HEVs to the fleet average NMOG value. The HEV
contribution factor shall be calculated in units of g/mi as follows,
where the term ``Sold'' means sold in the applicable region according
to Tables R97-15 and R97-16.
(B) HEV contribution factor=(((No. of Type A HEV TLEVs
Sold) x (0.100)) + ((No. of Type B HEV TLEVs Sold) x (0.113))+((No. of
Type C HEV TLEVs Sold) x (0.125)))+(((No. of Type A HEV LEVs
Sold) x (0.057))+((No. of Type B HEV LEVs Sold) x (0.066))+((No. of
Type C HEV LEVs Sold) x (0.075)))+(((No. of Type A HEV ULEVs
Sold) x (0.020))+((No. of Type B HEV ULEVs Sold) x (0.030))+((No. of
Type C HEV ULEVs Sold) x (0.040))).
(iii)(A) For any model year in which a manufacturer certifies its
entire fleet of light light-duty trucks from 0-3750 lbs LVW and light-
duty vehicles to intermediate useful life NMOG emission standards
specified in Secs. 86.1708 and 86.1709 that are less than or equal to
the applicable fleet average NMOG standard specified in Table R97-15,
the manufacturer may choose not to calculate a separate fleet average
NMOG value for each region for such vehicles for that model year.
(B) The fleet average NMOG value for a manufacturer electing under
paragraph (a)(3)(iii)(A) of this section not to calculate a separate
fleet average NMOG value shall be deemed to be the applicable fleet
average NMOG standard specified in Table R97-15 for the applicable
model year.
(C) A manufacturer making the election under paragraph
(a)(3)(iii)(A) of this section may not generate credits for that model
year for light light-duty trucks from 0-3750 lbs LVW and light-duty
vehicles.
(4)(i) Each manufacturer's applicable fleet average NMOG value for
all light light-duty trucks from 3751-5750 lbs loaded vehicle weight
sold in the applicable region according to Tables R97-15 and R97-16
shall be calculated in units of g/mi NMOG according to the following
equation, where the term ``Sold'' means sold in the applicable region
according to Tables R97-15 and R97-16, and the term ``Vehicles'' means
light light-duty trucks from 3751-5750 lbs loaded vehicle weight:
(((No. of Vehicles Certified to the Federal Tier 1 Exhaust Emission
Standards and Sold) x (0.32))+((No. of TLEVs Sold excluding
HEVs) x (0.160))+((No. of LEVs Sold excluding HEVs) x (0.100))+((No. of
ULEVs Sold excluding HEVs) x (0.050))+(HEV Contribution factor))/(Total
No. of Vehicles Sold, including ZEVs and HEVs).
(ii)(A) ``HEV contribution factor'' shall mean the NMOG emission
contribution of HEVs to the fleet average NMOG. The

[[Page 31252]]

HEV contribution factor shall be calculated in units of g/mi as
follows, where the term ``Sold'' means sold in the applicable region
according to Tables R97-15 and R97-16.
(B) HEV contribution factor=(((No. of Type A HEV TLEVs
Sold) x (0.130)) + ((No. of Type B HEV TLEVs Sold) x (0.145))+((No. of
Type C HEV TLEVs Sold) x (0.160)))+(((No. of Type A HEV LEVs
Sold) x (0.075))+((No. of Type B HEV LEVs Sold) x (0.087))+((No. of
Type C HEV LEVs Sold) x (0.100)))+(((No. of Type A HEV ULEVs
Sold) x (0.025))+((No. of Type B HEV ULEVs Sold) x (0.037))+((No. of
Type C HEV ULEVs Sold) x (0.050))).
(iii)(A) For any model year in which a manufacturer certifies its
entire fleet of light light-duty trucks from 3751-5750 lbs LVW to
intermediate useful life NMOG emission standards specified in
Sec. 86.1709 that are less than or equal to the applicable fleet
average NMOG requirement specified in Table R97-15, the manufacturer
may choose not to calculate a separate fleet average NMOG value for
each region for such vehicles for that model year.
(B) The fleet average NMOG value for a manufacturer electing under
paragraph (a)(4)(iii)(A) of this section not to calculate a separate
fleet average NMOG value shall be deemed to be the applicable fleet
average NMOG requirement specified in Table R97-15 for the applicable
model year.
(C) A manufacturer making the election under paragraph
(a)(4)(iii)(A) of this section may not generate credits for that model
year for light light-duty trucks from 3751-3750 lbs LVW.
(5)(i) The calculation of the fleet average NMOG value pursuant to
paragraphs (a)(3) and (a)(4) of this section shall exclude ATVs, as
defined in Sec. 86.1702, purchased in the NTR by state governments. In
determining the quantity of vehicles to be excluded from the NMOG
calculations, a manufacturer shall only be required to exclude vehicles
that are reported by the purchasing government in a timely letter,
containing adequate information, directed to the representative of the
manufacturer listed in the manufacturer's application for
certification. Such letter shall be considered timely only if it is
received no later than February 1 of the calendar year following the
model year of the purchased vehicles.
(ii) Adequate information includes the number of vehicles
purchased, vehicle makes and models, and the associated engine
families. A copy of the letter should be sent to EPA.
(6) For any model year prior to model year 2001 for which a
manufacturer meets the definition of ``low volume manufacturer'' in
Sec. 86.1702, it shall be exempt from the requirements in paragraph
(a)(1) of this section. The requirements in paragraph (a)(1) of this
section applicable to the 2001 and later model years shall apply to low
volume manufacturers.
(b) Fleet average NMOG credit and debit calculations. (1) For each
averaging set, as defined in Sec. 86.1702, manufacturers that achieve
fleet average NMOG values lower than the fleet average NMOG standard
for the corresponding model year may generate credits.
(2) For each averaging set, manufacturers that obtain applicable
fleet average NMOG values exceeding the fleet average NMOG standard for
the corresponding model year shall generate debits.
(3) For each averaging set, credits and debits are to be calculated
according to the following equation and rounded, in accordance with the
Rounding-Off Method specified in ASTM E29-90, Standard Practice for
Using Significant Digits in Test Data to Determine Conformance with
Specifications, which is incorporated by reference (see Sec. 86.1), to
the nearest whole number (intermediate calculations will not be
rounded):

Number of Credits/Debits=(((Applicable Fleet Average NMOG
Standard)-(Manufacturer's Applicable Fleet Average NMOG
Value)) x (Applicable Production)).

(4) For each region and model year, a manufacturer's available
credits or level of debits shall be the sum of credits or debits
derived from the respective class A and class B averaging sets for that
region and model year.
(c) Fleet average NMOG credits. (1) Credits may be used to offset
only fleet average NMOG debits of the same region (NTR or 37 States).
(2) Credits may only be used, traded or carried over to the next
model year after they are earned. Credits are earned on the last day of
the model year. Before trading or carrying over credits to the next
model year, a manufacturer must apply available credits to offset any
of its debits from the same region, where the deadline to offset such
debits has not yet passed.
(3) Credits earned in any given model year shall retain full value
through the subsequent model year.
(4) Unused credits that are available at the end of the second,
third, and fourth model years after the model year in which the credits
were generated shall be discounted to 50%, 25%, and 0% of the original
value of the credits, respectively. The discounting of credits also
applies to credits transferred to other parties.
(5) Credits may not be used to remedy any nonconformities
determined by a Selective Enforcement Audit, recall testing, or testing
performed with respect to Title 13, Chapter 2, Articles 1 and 2 of the
California Code of Regulations.
(6) Prior to model year 2001, low volume manufacturers may earn
credits in the NTR to transfer to other motor vehicle manufacturers for
use in the NTR or to bank for their own use in the NTR in 2001 and
subsequent model years. Such credits will be calculated as set forth in
paragraphs (a) and (b) of this section, except that the applicable
fleet average NMOG standard shall be 0.25 g/mi NMOG for the averaging
set for light light-duty trucks from 0-3750 lbs LVW and light-duty
vehicles or 0.32 g/mi NMOG for the averaging set for light light-duty
trucks from 3751-5750 lbs LVW. Credits shall be discounted in
accordance with the provisions in paragraph (c)(4) of this section.
(7) Manufacturers may earn and bank credits in the 37 states prior
to model year 2001. Such credits will be calculated as set forth in
paragraphs (a) and (b) of this section, except that the applicable
fleet average NMOG standard shall be 0.25 g/mi NMOG for the averaging
set for light light-duty trucks from 0-3750 lbs LVW and light-duty
vehicles or 0.32 g/mi NMOG for the averaging set for light light-duty
trucks from 3751-5750 lbs LVW.
(i) Emissions credits earned in the 37 states prior to the 2001
model year shall be treated as generated in the 2001 model year.
These credits shall be discounted in accordance with the provisions
in paragraph (c)(4) of this section.
(iii) In the 2001 model year, a one-time discount rate of 10
percent shall be applied to all credits earned under the provisions of
this paragraph (c)(7).
(8) There are no property rights associated with credits generated
under the provisions of this section. Credits are a limited
authorization to emit the designated amount of emissions. Nothing in
the regulations or any other provision of law should be construed to
limit EPA's authority to terminate or limit this authorization through
a rulemaking.
(d) Fleet average NMOG debits. (1) Manufacturers shall offset any
debits for a given model year by the fleet average NMOG reporting
deadline for the model year following the model year in which the
debits were generated. Manufacturers may offset debits by generating
credits or acquiring credits

[[Page 31253]]

generated by another manufacturer. Any credit used to offset a debit
must be from the same region (NTR or 37 States) in which the debit was
incurred.
(2)(i) Failure to meet the requirements of paragraphs (a) through
(d) of this section within the required timeframe for offsetting debits
will be considered to be a failure to satisfy the conditions upon which
the certificate(s) was issued and the individual noncomplying vehicles
not covered by the certificate shall be determined according to this
section.
(ii) If debits are not offset within the specified time period, the
number of vehicles not meeting the fleet average NMOG standards and not
covered by the certificate shall be calculated by dividing the total
amount of debits for the model year by the fleet average NMOG standard
applicable for the model year and averaging set in which the debits
were first incurred. If both averaging sets are in debit, any
applicable credits will first be allocated between the averaging sets
according to the manufacturer's expressed preferences. Then, the number
of vehicles not covered by the certificate shall be calculated using
the revised debit values.
(iii) EPA will determine the vehicles for which the condition on
the certificate was not satisfied by designating vehicles in those
engine families with the highest certification NMOG emission values
first and continuing until a number of vehicles equal to the calculated
number of noncomplying vehicles as determined above is reached. If this
calculation determines that only a portion of vehicles in an engine
family contribute to the debit situation, then EPA will designate
actual vehicles in that engine family as not covered by the
certificate, starting with the last vehicle produced and counting
backwards.
(3) If a manufacturer opts out of the National LEV program pursuant
to Sec. 86.1705, the manufacturer continues to be responsible for
offsetting any debits outstanding on the effective date of the opt-out
within the required time period. Any failure to offset the debits will
be considered to be a violation of paragraph (d)(1) of this section and
may subject the manufacturer to an enforcement action for sale of
vehicles not covered by a certificate, pursuant to paragraph (d)(2) of
this section.
(4) For purposes of calculating tolling of the statute of
limitations, a violation of the requirements of paragraph (d)(1) of
this section, a failure to satisfy the conditions upon which a
certificate(s) was issued and hence a sale of vehicles not covered by
the certificate, all occur upon the expiration of the deadline for
offsetting debits specified in paragraph (d)(1) of this section.
(e) NMOG credit transfers. (1) EPA may reject NMOG credit transfers
if the involved manufacturers fail to submit the credit transfer
notification in the annual report.
(2) A manufacturer may not sell credits that are not available for
sale pursuant to the provisions in paragraph (c)(2) of this section.
(3) Except in instances of fraud on the part of the credit
recipient, where a manufacturer sells credits that were not available
for sale, the credits shall be treated as valid, and the manufacturer
that sold the credits shall be liable for any resulting shortfall.
(4)(i) If a manufacturer transfers a credit that it has not
generated pursuant to paragraph (b) of this section or acquired from
another party, the manufacturer will be considered to have generated a
debit in the model year that the manufacturer transferred the credit.
The manufacturer must offset such debits by the deadline for the annual
report for that same model year.
(ii) Failure to offset the debits within the required time period
will be considered a failure to satisfy the conditions upon which the
certificate(s) was issued and will be addressed pursuant to paragraph
(d)(2) of this section.

Sec. 86.1711-97 Limitations on sale of Tier 1 vehicles and TLEVs; five
percent cap.

(a) In the 2001 and subsequent model years, manufacturers may sell
Tier 1 vehicles and TLEVs in the NTR only if vehicles with the same
engine families are certified and offered for sale in California in the
same model year, except as provided under Sec. 86.1705(e)(4).
(b)(1) The industry-wide percentage of Tier 1 and TLEV light-duty
vehicles and light light-duty trucks sold in the NTR for 2001 and
subsequent model years shall not exceed five percent of the total
number of light-duty vehicles and light light-duty trucks sold in the
NTR in a given model year.
(2) When EPA determines that the five-percent cap requirement of
this section is first exceeded, EPA will notify covered manufacturers
of the exceedance during the calendar year following the model year for
which there was an exceedance. The requirement in paragraph (b)(1) of
this section will be enforceable starting with the model year
containing January 1 of the calendar year following the calendar year
in which EPA notifies manufacturers of the exceedance and for each
model year thereafter.
(3)(i) An exceedance of the requirement in this section is
determined according to the following equation where the term
``Vehicles'' means light-duty vehicles and light light-duty trucks, but
excludes vehicles sold by a manufacturer that has opted out of the
National LEV program pursuant to the provisions of Sec. 86.1705,
pending final judicial resolution of the opt-out petition:

Total number of Vehicles exceeding five-percent cap=((Total
number of Tier 1 Vehicles and TLEVs sold in the NTR)--((Total number
of Vehicles sold in the NTR)-0.05))

(ii) Where a manufacturer has elected to use the reporting
provision specified in Sec. 86.1710(a)(3)(iii) or
Sec. 86.1710(a)(4)(iii), EPA will estimate that manufacturer's number
of vehicles sold in the NTR by using the following equation, where the
term ``Vehicles'' means light-duty vehicles and light light-duty
trucks, but excludes vehicles sold by a manufacturer that has opted out
of the National LEV program pursuant to the provisions of Sec. 86.1705,
pending final judicial resolution of the opt-out petition:

Estimated number of Vehicles in the NTR=(((sum of Vehicles the
manufacturer sold in the NTR for the latest two reported model
years) / (sum of Vehicles the manufacturer sold in the 49 states for
the same latest two reported model years)) x (number of Vehicles
the manufacturer sold in the 49 states as reported for the current
model year))

(4)(i) Failure to meet the five-percent cap as specified in this
paragraph (b) will be considered to be a failure to satisfy the
conditions upon which the certificate(s) was issued and the individual
nonconforming vehicles not covered by the certificate shall be
determined as set forth in this paragraph (b)(4).
(ii) For a model year in which the industry-wide five percent cap
is exceeded, as specified in paragraph (b)(1) of this section, each
manufacturer that sold Tier 1 and TLEV light-duty vehicles and light
light-duty trucks in the NTR in excess of five percent of its sales of
light-duty vehicles and light light-duty trucks in the NTR is a
noncomplying manufacturer.
(iii) A noncomplying manufacturer's share of vehicles exceeding the
five percent cap for a given model year shall be determined by the
following equation, where the term ``Vehicles'' means light-duty
vehicles and light light-duty trucks sold in the NTR, but excludes
vehicles sold by a manufacturer that has opted out of the National LEV
program pursuant to the

[[Page 31254]]

provisions of Sec. 86.1705, pending final judicial resolution of the
opt-out petition:

Number of noncomplying manufacturer's Vehicles not covered by a
certificate = ((Total number of Vehicles exceeding five-percent cap)
x ((number of the noncomplying manufacturer's Tier 1 Vehicles and
TLEVs sold in the NTR in excess of five percent of its Vehicle sales in
the NTR)/ (Sum of the numbers of each noncomplying manufacturer's Tier
1 Vehicles and TLEVs sold in the NTR in excess of five percent of its
Vehicle sales in the NTR))).

(iv) EPA will determine the number of vehicles not covered by a
certificate based on data reported by manufacturers under
Sec. 86.1712(b), Sec. 86.085-37(b) and subsequent model year
provisions, and other information provided to EPA by a manufacturer.
(5) EPA will determine which vehicles were not covered by a
certificate by designating vehicles in those engine families with the
highest certification NMOG emission values first and continuing until a
number of vehicles equal to the calculated number of vehicles not
covered by a certificate as determined above is reached. If this
calculation determines that only a portion of vehicles in an engine
family contributes to the debit situation, then EPA will, starting with
the last vehicle produced and counting backwards, designate actual
vehicles in that engine family as sold without a certificate.
(6) Low volume manufacturers are exempt from the requirements in
this paragraph (b) and vehicles produced by low volume manufacturers
shall not be included in calculations of industry-wide compliance under
the provisions of this paragraph (b).
(7) For the time period that a manufacturer has opted-out under
Sec. 86.1705 and the validity of the opt-out is unresolved, that
manufacturer is exempt from the requirements in this paragraph (b) and
vehicles produced by such manufacturer shall not be included in
calculations of industry-wide compliance under the provisions of this
paragraph (b), regardless of EPA or a court's determination regarding
the validity of the opt-out.

Sec. 86.1712-97 Maintenance of records; submittal of information.

(a) Maintenance of records. (1) The manufacturer producing any
light-duty vehicles and/or light light-duty trucks subject to the
provisions in this subpart shall establish, maintain, and retain the
following information in adequately organized and indexed records for
each averaging set of each model year:
(i) Model year;
(ii) Averaging set;
(iii) Fleet average NMOG value achieved; and
(iv) All values used in calculating the fleet average NMOG value
achieved.
(2) The manufacturer producing any light-duty vehicles and/or light
light-duty trucks subject to the provisions in this subpart shall
establish, maintain, and retain the following information in adequately
organized and indexed records for each vehicle or truck subject to this
subpart:
(i) Model year;
(ii) Averaging set;
(iii) EPA engine family;
(iv) Assembly plant;
(v) Vehicle identification number;
(vi) NMOG standard to which the vehicle or truck is certified; and
(vii) Information on the point of first sale, including the
purchaser, city, and state.
(3) The manufacturer shall retain all records required to be
maintained under this section for a period of eight years from the due
date for the annual report. Records may be retained as hard copy or
reduced to microfilm, ADP diskettes, and so forth, depending on the
manufacturer's record retention procedure; provided, that in every case
all information contained in the hard copy is retained.
(4) Nothing in this section limits the Administrator's discretion
to require the manufacturer to retain additional records or submit
information not specifically required by this section.
(5) Pursuant to a request made by the Administrator, the
manufacturer shall submit to the Administrator the information that the
manufacturer is required to retain.
(6) EPA may void ab initio a certificate of conformity for a
vehicle certified to National LEV certification standards as set forth
or otherwise referenced in Sec. 86.1708 or Sec. 86.1709 for which the
manufacturer fails to retain the records required in this section or to
provide such information to the Administrator upon request.
(b) Reporting. (1) Each covered manufacturer shall submit an annual
report. Except as provided in paragraph (b)(2) of this section, the
annual report shall contain, for each averaging set, the fleet average
NMOG value achieved, all values required to calculate the NMOG value,
the number of credits generated or debits incurred, and all the values
required to calculate the credits or debits. For each region (NTR and
37 States), the annual report shall contain the resulting balance of
credits or debits.
(2) When a manufacturer calculates compliance with the fleet
average NMOG standards using the provisions in Sec. 86.1710(a)(3)(iii)
or Sec. 86.1710(a)(4)(iii), then the annual report shall state that the
manufacturer has elected to use such provision and shall contain, for
each averaging set, the fleet average NMOG values as specified in
Sec. 86.1710(a)(3)(iii) or Sec. 86.1710(a)(4)(iii).
(3) The annual report shall also include documentation on all
credit transactions the manufacturer has engaged in since those
included in the last report. Information for each transaction shall
include:
(i) Name of credit provider;
(ii) Name of credit recipient;
(iii) Date the transfer occurred;
(iv) Quantity of credits transferred;
(v) Model year in which the credits were earned; and
(vi) Region (NTR or 37 States) to which the credits belong.
(4) Unless a manufacturer reports the data required by this section
in the annual production report required under Sec. 86.085-37(b) and
subsequent model year provisions, a manufacturer shall submit an annual
report for each model year after production ends for all affected
vehicles and trucks produced by the manufacturer subject to the
provisions of this subpart and no later than May 1 of the calendar year
following the given model year. Annual reports shall be submitted to:
Director, Vehicle Programs and Compliance Division, U.S. Environmental
Protection Agency, 2565 Plymouth Road, Ann Arbor, Michigan, 48105.
(5) Failure by a manufacturer to submit the annual report in the
specified time period for all vehicles and trucks subject to the
provisions in this section is a violation of section 203(a)(1) of the
Clean Air Act for each subject vehicle and truck produced by that
manufacturer.
(6) If EPA or the manufacturer determines that a reporting error
occurred on an annual report previously submitted to EPA, the
manufacturer's credit or debit calculations will be recalculated. EPA
may void erroneous credits, unless transferred, and shall adjust
erroneous debits. In the case of transferred erroneous credits, EPA
shall adjust the manufacturer's credit or debit balance to reflect the
sale of such credits and any resulting generation of debits.
(c) Notice of opportunity for hearing. Any voiding of the
certificate under paragraph (a)(6) of this section will be made only
after EPA has offered the manufacturer concerned an opportunity for a
hearing conducted in accordance with Sec. 86.614 for light-duty
vehicles or

[[Page 31255]]

Sec. 86.1014 for light-duty trucks and, if a manufacturer requests such
a hearing, will be made only after an initial decision by the Presiding
Officer.

Sec. 86.1713-97 Light-duty exhaust durability programs.

The provisions of Sec. 86.094-13 and subsequent model year
provisions apply to this subpart, except that: Section 86.094-13(f) and
subsequent model year provisions does not apply to this subpart.

Sec. 86.1714-97 Small volume manufacturers certification procedures.

The provisions of Sec. 86.096-14 and subsequent model year
provisions apply to this subpart, except that: Section 86.096-
14(c)(7)(i)(A) and subsequent model year provisions does not apply to
this subpart.

Sec. 86.1715-97 [Reserved]

Sec. 86.1716-97 Prohibition of defeat devices.

(a) The provisions of Sec. 86.094-16 and subsequent model year
provisions apply to this subpart.
(b) In addition to the provisions of Sec. 86.094-16 and subsequent
model year provisions, the following requirements shall apply to this
subpart:
(1) For each engine family certified to TLEV, LEV, or ULEV
standards, manufacturers shall submit with the certification
application, an engineering evaluation demonstrating that a
discontinuity in emissions of non-methane organic gases, carbon
monoxide, oxides of nitrogen and formaldehyde measured on the Federal
Test Procedure (subpart B of this part) does not occur in the
temperature range of 20 to 86 deg. F. For diesel vehicles, the
engineering evaluation shall also include particulate emissions.
(2) [Reserved]

Sec. 86.1717-97 Emission control diagnostic system for 1997 and later
light-duty vehicles and light-duty trucks.

(a) The provisions of Sec. 86.094-17 and subsequent model year
provisions do not apply to this subpart.
(b) The requirements in Chapter 6 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996) (these requirements are incorporated by reference; see
Sec. 86.1) apply to this subpart.
(c) No vehicle shall be certified under the provisions of this
subpart unless such vehicle complies with the requirements of section
202(m)(1), (2), (4), and (5) of the Clean Air Act (42 U.S.C.
7521(m)(1), (2), (4) and (5)).

Sec. 86.1718-97 through Sec. 86.1720-97 [Reserved]

Sec. 86.1721-97 Application for certification.

The provisions of Sec. 86.096-21 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.096-21(b)(2) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) For TLEVs, LEVs, and ULEVs not certified exclusively on
gasoline, projected U.S. sales data and fuel economy data 19 months
prior to January 1 of the calendar year with the same numerical
designation as the model year for which the vehicles are certified, and
projected U.S. sales data for all vehicles, regardless of operating
fuel or vehicle emission category, sufficient to enable the
Administrator to select a test fleet representative of the vehicles (or
engines) for which certification is requested at the time of
certification.
(2) [Reserved]
(b) For ZEVs and hybrid electric vehicles, the certification
application shall include the following:
(1) Identification and description of the vehicle(s) covered by the
application.
(2) Identification of the vehicle weight category to which the
vehicle is certifying: LDV, LDT 0-3750 lbs LVW, LDT 3751-5750 lbs LVW
(state test weight range), and the curb weight and gross vehicle weight
rating of the vehicle.
(3) Identification and description of the propulsion system for the
vehicle.
(4) Identification and description of the climate control system
used on the vehicle.
(5) Projected number of vehicles sold in the U.S., and projected
U.S. sales.
(6) For electric and hybrid electric vehicles, identification of
the energy usage in kilowatt-hours per mile from the point when
electricity is introduced from the electrical outlet and the operating
range in miles of the vehicle when tested in accordance with the All-
Electric Range Test provisions in Sec. 86.1770.
(7) If the vehicle is equipped with a fuel fired heater, a
description of the control system logic of the fuel fired heater,
including an evaluation of the conditions under which the fuel fired
heater can be operated and an evaluation of the possible operational
modes and conditions under which evaporative emissions can exist.
Vehicles which utilize fuel fired heaters which can be operated at
ambient temperatures above 40 deg. F or which cannot be demonstrated to
have zero evaporative emissions under any and all possible operation
modes and conditions shall not be certified as ZEVs.
(8) For ZEVs and HEVs which use fuel fired heaters, the
manufacturer shall provide the exhaust emissions value per mile
produced by the auxiliary fuel fired heater. This shall be accomplished
by determining heater emissions in grams per minute when operating at a
maximum heating capacity for a period of 20 minutes, and multiplying
that number by 3.6 minutes per mile. At the time of certification,
manufacturers shall submit their test plan which describes the
procedure used to determine the mass emissions of the fuel fired
heater.
(9) All information necessary for proper and safe operation of the
vehicle, including information on the safe handling of the battery
system, emergency procedures to follow in the event of battery leakage
or other malfunctions that may affect the safety of the vehicle
operator or laboratory personnel, method for determining battery state-
of-charge, battery charging capacity and recharging procedures, and any
other relevant information as determined by the Administrator.
(c) For all vehicles subject to the provisions of Sec. 86.1717,
with its application for certification a description of the malfunction
and diagnostic system to be installed on the vehicles. (The vehicles
shall not be certified unless the Administrator finds that the
malfunction and diagnostic system complies with the requirements of
Sec. 86.1717.).

Sec. 86.1722-97 [Reserved]

Sec. 86.1723-97 Required data.

The provisions of Sec. 86.096-23 and subsequent model year
provisions apply to this subpart, with the following additions to the
provisions of Sec. 86.096-23(c)(1) and subsequent model year
provisions:
(a) For all TLEVs, LEVs, and ULEVs certifying on a fuel other than
conventional gasoline, manufacturers shall multiply the NMOG exhaust
certification level for each emission-data vehicle by the appropriate
reactivity adjustment factor listed in Sec. 86.1777(d)(2)(i) or
established by the Administrator pursuant to Appendix XVII of this part
to demonstrate compliance with the applicable NMOG emission standard.
For all TLEVs, LEVs, and ULEVs certifying on natural gas, manufacturers
shall multiply the NMOG exhaust certification level for each

[[Page 31256]]

emission-data vehicle by the appropriate reactivity adjustment factor
listed in Sec. 86.1777(d)(2)(i) or established by the Administrator
pursuant to Appendix XVII of this part and add that value to the
product of the methane exhaust certification level for each emission-
data vehicle and the appropriate methane reactivity adjustment factor
listed in Sec. 86.1777(d)(2)(ii) or established by the Administrator
pursuant to Appendix XVII of this part to demonstrate compliance with
the applicable NMOG emission standard. Manufacturers requesting to
certify to existing standards utilizing an adjustment factor unique to
its vehicle/fuel system must follow the data requirements described in
Appendix XVII of this part. A separate formaldehyde exhaust
certification level shall also be provided for demonstrating compliance
with emission standards for formaldehyde.
(b)(1) The manufacturer shall submit to the Administrator a
statement that those vehicles for which certification is requested have
driveability and performance characteristics which satisfy that
manufacturer's customary driveability and performance requirements for
vehicles sold in the United States. This statement shall be based on
driveability data and other evidence showing compliance with the
manufacturer's performance criteria. This statement shall be supplied
with the manufacturer's final application for certification, and with
all running changes for which emission testing is required.
(2) If the Administrator has evidence to show that in-use vehicles
demonstrate poor performance that could result in wide-spread tampering
with the emission control systems, he or she may request all
driveability data and other evidence used by the manufacturer to
justify the performance statement.

Sec. 86.1724-97 Test vehicles and engines.

The provisions of Sec. 86.096-24 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.096-24(a)(1) and subsequent model
year provisions apply to this subpart, with the following addition:
(1) All engines classified in the same engine family shall be
certified to identical exhaust emission standards.
(2) [Reserved]
(b) The provisions of Sec. 86.0096-24(b) and subsequent model year
provisions apply to this subpart with the following addition:
(1) For TLEVs, LEVs, ULEVs, and ZEVs certifying according to the
provisions of this subpart, a manufacturer may substitute emission data
vehicles selected by the California Air Resources Board criteria
instead of using the criteria specified in Sec. 86.096-24(b)(1) (i),
(ii), and (iv) and subsequent model year provisions.
(2) [Reserved]

Sec. 86.1725-97 Maintenance.

The provisions of Sec. 86.094-25 and subsequent model year
provisions apply to this subpart, with the following additions:
(a) Hybrid electric vehicles that use Otto-cycle or diesel engines
are subject to the applicable Otto-cycle or diesel engine maintenance
requirements of Sec. 86.094-25 (b) through (e) and subsequent model
year provisions.
(b) Manufacturers of series hybrid electric vehicles and parallel
hybrid electric vehicles shall be required to incorporate into the
vehicles a separate odometer or other device subject to the approval of
the Administrator that can accurately gauge the mileage accumulation on
the engines that are used in these vehicles.
(c)(1) The manufacturer shall equip the vehicle with a maintenance
indicator consisting of a light that shall activate automatically by
illuminating the first time the minimum performance level is observed
for all battery system components. Possible battery system components
requiring monitoring are:
(i) Battery water level;
(ii) Temperature control;
(iii) Pressure control;
(iv) Other parameters critical for determining battery condition.
(2) The manufacturer of a hybrid electric vehicle shall equip the
vehicle with a useful life indicator for the battery system consisting
of a light that shall illuminate the first time the battery system is
unable to achieve an all-electric operating range (starting from a full
state-of-charge) that is at least 75% of the range determined for the
vehicle in the All-Electric Range Test (see Sec. 86.1770) and submitted
in the certification application.
(3) Hybrid electric vehicle battery system. Manufacturers shall
maintain the battery system according to the requirements in paragraph
(c)(1) of this section.

Sec. 86.1726-97 Mileage and service accumulation; emission
measurements.

The provisions of Sec. 86.096-26 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.096-26(a)(1) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) Section 86.096-26(a) and subsequent model year provisions
applies to light-duty vehicles and light-duty trucks, except ZEVs which
shall be exempt from all mileage and service accumulation, durability-
data vehicle, and emission-data vehicle testing requirements.
(2) [Reserved]
(b) The provisions of Sec. 86.096-26(a)(2) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) The procedure for mileage accumulation shall be the Durability
Driving Schedule as specified in Appendix IV of this part. A modified
procedure (Alternative Service Accumulation Durability Program,
Sec. 86.094-13(e) and subsequent model year provisions) may also be
used if approved in advance by the Administrator. All light-duty
vehicles and light-duty trucks shall accumulate mileage at a measured
curb weight that is within 100 pounds of the estimated curb weight. If
the vehicle weight is within 100 pounds of being included in the next
higher inertia weight class as specified in Sec. 86.129, the
manufacturer may elect to conduct the respective emission tests at the
higher weight. All mileage accumulation of hybrid electric vehicles
shall be conducted with the battery pack at the manufacturer's
indicated lowest state-of-charge at the beginning of the test cycle. At
no time throughout mileage accumulation shall the battery pack be
charged using any off-board charging source.
(2) [Reserved]
(c) The provisions of Sec. 86.096-26(a)(3)(i) and (ii) and
subsequent model year provisions apply to this subpart, with the
following addition:
(1) The Administrator will accept the manufacturer's determination
of the mileage at which the engine-system combination is stabilized for
emission data testing if (prior to testing) a manufacturer determines
that the interval chosen yields emissions performance that is stable
and representative of design intent. Sufficient mileage should be
accumulated to reduce the possible effects of any emissions variability
that is the result of insufficient vehicle operation. Of primary
importance in making this determination is the behavior of the
catalyst, EGR valve, trap oxidizer or any other part of the ECS which
may have non-linear aging characteristics. In the alternative, the
manufacturer may elect to accumulate

[[Page 31257]]

4,000 mile <plus-minus> 250 mile on each test vehicle within an engine
family without making a determination.
(2) [Reserved]
(d) The provisions of Sec. 86.096-26(a)(4)(i) and (ii) and
subsequent model year provisions do not apply to this subpart. The
following shall instead apply to this subpart:
(1) For Otto-cycle and diesel vehicles and battery assisted
combustion engine vehicles that use Otto-cycle or diesel engines:
(i) Prior to initiation of mileage accumulation in a durability-
data vehicle, manufacturers must establish the mileage test interval
for durability-data vehicle testing of the engine family. Once testing
has begun on a durability-data vehicle, the durability test interval
for that family may not be changed. At a minimum, multiple tests must
be performed at 5,000 miles, 50,000 miles, and the final mileage point
as long as they meet the requirements of Appendix XV of this part. The
Administrator will accept durability test interval schedules determined
by the manufacturer. The testing must provide a DF confidence level
equal to or better than the confidence level using the former fixed
mileage test and scheduled maintenance intervals. The procedure for
making this determination is specified in Appendix XV of this part. The
mileage intervals between test points must be approximately of equal
length. The <plus-minus> 250 mile test point tolerance and the
requirement that tests be conducted before and after scheduled
maintenance is still mandatory. Emission control systems for Otto-cycle
engines that have step function changes designed into the control
system must use the 5,000 mile test interval schedule.
(ii) Testing before and after scheduled (or unscheduled)
maintenance points must be conducted, and these data are to be included
in the deterioration factor calculation. Testing before unscheduled
maintenance may be omitted with the prior consent of the Administrator
when testing would be dangerous to a vehicle or an operator. The number
of tests before and after scheduled maintenance and the mileage
intervals between test points should be approximately equal. Durability
test interval schedules with multiple testing at test points within
10,000 miles of or at the 50,000 mile and the final mileage test point
must be submitted for approval. Multiple testing at maintenance mileage
tests points within 10,000 miles of the 50,000 mile and the final
mileage test points may be approved if it can be demonstrated by
previously generated data that the emission effects of the maintenance
are insignificant.
(iii) For engine families that are to be certified to the full
useful life emission standards, each exhaust emission durability-data
vehicle shall be driven with all emission control systems installed and
operating, for the full useful life or such lesser distance as the
Administrator may agree to as meeting the objective of this procedure.
Durability tests shall be at every 5,000 miles, from 5,000 miles to the
full useful life, however, the above procedures may be used to
determine alternate test intervals subject to the following:
(A) For engine families that are to be certified to the full useful
life emission standards, durability vehicles may accumulate less than
the full useful life if the manufacturer submits other data or
information sufficient to demonstrate that the vehicle is capable of
meeting the applicable emission standards for the full useful life. At
a minimum, 75% of the full useful life shall be accumulated.
(B) For the purpose of conducting mileage accumulation on light-
duty hybrid electric vehicles, the full useful life of the auxiliary
power unit shall be defined as 50,000 miles for a Type A hybrid
electric vehicle, 75,000 miles for a Type B hybrid electric vehicle,
and 100,000 miles for a Type C hybrid electric vehicle.
(iv) Alternative durability plans may also be used if the
manufacturer provides a demonstration that the alternative plan
provides equal or greater confidence that the vehicles will comply in-
use with the emission standards. All alternative durability plans are
subject to approval in advance by the Administrator.
(2) For diesel vehicles equipped with periodically regenerating
trap oxidizer systems, at least four regeneration emission tests (see
Secs. 86.106 through 86.145) shall be made. The pollutant mass emission
calculation procedures for vehicles equipped with periodically
regenerating trap oxidizer systems are included in Appendix XVI of this
part. With the advance approval of the Administrator, the manufacturer
may install: A manual override switch capable of preventing (i.e.,
delaying until the switch is turned off) the start of the regeneration
process; and a light which indicates when the system would initiate
regeneration if it had no override switch. Upon activation of the
override switch the vehicle will be operated on a dynamometer to
precondition it for the regeneration emission test in accordance with
Secs. 86.132 and 86.1772. The Urban Dynamometer Driving Schedule (UDDS)
that is in progress at the time when the light comes on shall be
completed and the vehicle shall proceed to the prescribed soak period
followed by testing. With the advance approval of the Administrator,
the manual override switch will be turned off at some predetermined
point in the testing sequence, permitting the regeneration process to
proceed without further manual interaction. The mileage intervals
between test points shall be approximately equal. The first
regeneration emission test shall be made at the 5,000 mile point. The
regeneration emission tests must provide a deterioration factor
confidence level equal to or better than the confidence level achieved
by performing regeneration emission tests at the following mileage
points: 5,000; 25,000; 50,000; 75,000; and 100,000. The procedure for
making this determination is shown in Appendix XV of this part.
(3) For gasoline-, gaseous-, and alcohol-fueled vehicles that are
certified by a whole-vehicle durability protocol, the specified
evaporative durability test points are at 5,000, 40,000, 75,000, and
100,000 miles. These requirements are also applicable to hybrid
electric vehicles. With the exception of flexible-fuel vehicles, a
manufacturer may conduct evaporative testing at test points used for
exhaust emission durability testing, provided that the same
deterioration confidence level for the evaporative emission DF
determination is retained (see Appendix XIV of this part).
(4) For flexible-fuel vehicles certifying to TLEV, LEV, or ULEV
standards, the test schedule shall include exhaust emission tests at
5,000 miles, 10,000 miles, and every 10,000 miles thereafter to the
final mileage point using M85 or E85 and certification gasoline. For
all flexible-fuel vehicles, if evaporative emission testing is
conducted, exhaust and evaporative emission tests shall also be
conducted using M35 or E10, or another approved fuel, at the mileage
points where M85 or E85 testing is conducted. The results of these
exhaust and evaporative emission tests will be used by the
Administrator to evaluate the vehicle's emission control deterioration
with various fuels (M85, M35, and unleaded gasoline; See fuel
specifications in Sec. 86.1771). Only the M85 or E85 and certification
gasoline exhaust emission results and the M35 or E10 evaporative
emission results will be used to determine applicable exhaust and
evaporative emission deterioration factors, respectively, as required
in Sec. 86.1728 (Compliance with Emission Standards).
(e) The provisions of Sec. 86.096-26(a)(5)(i) and subsequent model
year

[[Page 31258]]

provisions apply to this subpart, with the following addition:
(1) In addition, the emission tests performed on emission-data
vehicles and durability-data vehicles shall be non-regeneration
emission tests for diesel light-duty vehicles and light-duty trucks
equipped with periodically regenerating trap oxidizer systems. For any
of these vehicles equipped with continually regenerating trap oxidizer
systems, manufacturers may use the provisions applicable to
periodically regenerating trap oxidizer systems as an option. If such
an option is elected, all references in these procedures to vehicles
equipped with periodically regenerating trap oxidizer systems shall be
applicable to the vehicles equipped with continually regenerating trap
oxidizer systems.
(2) [Reserved]
(f) The provisions of Sec. 86.096-26(a)(8) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) Once a manufacturer submits the information required in
Sec. 86.096-26(a)(7) and subsequent model year provisions for a
durability-data vehicle, the manufacturer shall continue to run the
vehicle to 50,000 miles if the family is certified to 50,000 mile
emission standards or to the full useful life if it is certified to
emission standards beyond 50,000 miles (or to a lesser distance that
the Administrator may have previously agreed to), and the data from the
vehicle will be used in the calculations under Sec. 86.094-28 and
subsequent model year provisions. Discontinuation of a durability-data
vehicle shall be allowed only with the consent of the Administrator.
(2) [Reserved]
(g) The provisions of Sec. 86.096-26(b) and subsequent model year
provisions do not apply to this subpart.
(h)(1) The exhaust emissions shall be measured from all exhaust
emission data vehicles tested in accordance with the federal Highway
Fuel Economy Test (HWFET; 40 CFR part 600, subpart B). The oxides of
nitrogen emissions measured during such tests shall be multiplied by
the oxides of nitrogen deterioration factor computed in accordance with
Sec. 86.094-28 and subsequent model year provisions, and then rounded
and compared with the applicable emission standard in Secs. 86.1708 and
86.1709. All data obtained pursuant to this paragraph (h)(1) shall be
reported in accordance with procedures applicable to other exhaust
emissions data required pursuant to these procedures. Hybrid electric
vehicles shall be tested with the battery state-of-charge set such that
one of the following two conditions is satisfied:
(i) The state-of-charge is at the lowest level allowed by the
control unit of the auxiliary power unit; or
(ii) The state-of-charge is set such that auxiliary power unit
operation will be at its maximum level at the beginning and throughout
the emission test.
(2) In the event that one or more of the manufacturer's emission
data vehicles fail the applicable HWFET standard in Secs. 86.1708 and
86.1709, the manufacturer may submit to the Administrator engineering
data or other evidence showing that the system is capable of complying
with the standard. If the Administrator finds, on the basis of an
engineering evaluation, that the system can comply with the HWFET
standard, he or she may accept the information supplied by the
manufacturer in lieu of vehicle test data.

Sec. 86.1727-97 [Reserved]

Sec. 86.1728-97 Compliance with emission standards.

The provisions of Sec. 86.094-28 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.094-28(a)(1) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) The provisions of Sec. 86.094-28(a) and subsequent model year
provisions apply to light-duty vehicles and light light-duty trucks,
except ZEVs.
(2) [Reserved]
(b) The provisions of Sec. 86.094-28(a)(4)(i) and subsequent model
year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) Separate emission deterioration factors shall be determined
from the exhaust emission results of the durability-data vehicle(s) for
each engine-system combination. A separate factor shall be established
for exhaust HC (non-alcohol vehicles, non-TLEVs, non-LEVs, and non-
ULEVs), exhaust OMHCE or OMNMHCE (alcohol vehicles that are not TLEVs,
LEVs, or ULEVs), exhaust NMOG (all TLEVs, LEVs, ULEVs), exhaust
formaldehyde (alcohol vehicles, TLEVs, LEVs, ULEVs), exhaust CO,
exhaust NO<INF>X</INF>, and exhaust particulate (diesel vehicles only)
for each engine-system combination. A separate evaporative emission
deterioration factor shall be determined for each evaporative emission
family-evaporative emission control system combination from the testing
conducted by the manufacturer (gasoline- and alcohol-fueled vehicles
only). Separate emission correction factors (diesel light-duty vehicles
and light-duty trucks equipped with periodically regenerating trap
oxidizer systems only) shall be determined from the exhaust emission
results of the durability-data vehicle(s) for each engine-system
combination. A separate factor shall be established for exhaust HC
(non-alcohol vehicles, non-TLEVs, non-LEVs, and non-ULEVs), exhaust
OMHCE or OMNMHCE (alcohol vehicles that are not TLEVs, LEVs, or ULEVs),
exhaust NMOG (TLEVs, LEVs, ULEVs), exhaust CO, exhaust NO<INF>X</INF>,
and exhaust particulate for each engine-system combination.
(2) [Reserved]
(c) The provisions of Sec. 86.094-28(a)(4)(i)(A)(4) and subsequent
model year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) The manufacturer must use the outlier identification procedure
set forth in Appendix VIII of this part to test for irregular data from
a durability-data set. If any data point is identified as a statistical
outlier, the Administrator shall determine, on the basis of an
engineering analysis of the causes of the outlier submitted by the
manufacturer, whether the outlier is to be rejected. The outlier shall
be rejected only if the Administrator determines that the outlier does
not reflect representative characteristics of the emission control
system, i.e., the outlier is a result of an emission control system
anomaly, test procedure error, or an extraordinary circumstance not
expected to recur. Only the identified outlier shall be eliminated;
other data at that test point (i.e., data for other pollutants) shall
not be eliminated unless the Administrator determines, based on the
engineering analysis, that they also do not reflect representative
characteristics of the emission control system. Where the manufacturer
chooses to apply both the outlier procedure and averaging to the same
data set, the outlier procedure shall be completed prior to applying
the averaging procedure. All durability test data, including any
outliers and the manufacturer's engineering analysis, shall be
submitted with the final application.
(2) [Reserved]
(d) The provisions of Sec. 86.094-28(a)(4)(i)(B) and subsequent
model year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) All applicable exhaust emission results shall be plotted as a
function of the mileage on the system, rounded to the nearest mile, and
the best fit straight

[[Page 31259]]

lines, fitted by the method of least squares, shall be drawn through
all these data points. The emission data will be acceptable for use in
the calculation of the deterioration factor only if the interpolated
4,000-mile, 50,000-mile, and full useful life points on this line are
within the applicable emission standards in Secs. 86.1708 and 86.1709.
For hybrid electric vehicles, the emission data will be acceptable for
use in the calculation of the deterioration factor only if the engine
mileage points corresponding to the interpolated 4,000 mile, 50,000
mile, and full useful life points of the vehicle on this line are
within the applicable emission standards in Secs. 86.1708 and 86.1709.
The engine mileage points shall be determined based on the test
schedule submitted to the Administrator as required in Sec. 86.096-26.
As an exception, the Administrator will review the data on a case-by-
case basis and may approve its use in those instances where the best
fit straight line crosses an applicable standard but no data point
exceeds the standard or when the best fit straight line crosses the
applicable standard at the 4,000-mile point but the 5,000-mile actual
test point and the 50,000 mile and full useful life interpolated points
are both below the standards. A multiplicative exhaust emission
deterioration factor shall be calculated for each engine system
combination as follows:
(i) For engine families certified to 50,000 mile emissions
standards:

Factor=Exhaust emissions interpolated to 50,000 miles divided by
exhaust emissions interpolated to 4,000 miles.

(ii) For engine families certified to full useful life emissions
standards beyond 50,000 miles:

Factor = Exhaust emissions interpolated to the full useful life
divided by exhaust emissions interpolated to 4,000 miles.

(2) [Reserved]
(e) The following requirements shall be in addition to the
provisions of Sec. 86.094-28(a)(4) and subsequent model year
provisions:
(1)(i) The regeneration exhaust emission data (diesel light-duty
vehicles and light-duty trucks equipped with periodically regenerating
trap oxidizer systems only) from the tests required under Sec. 86.096-
26(a)(4) and subsequent model year provisions shall be used to
determine the regeneration exhaust emissions interpolated to the
50,000-mile point. The regeneration exhaust emission results shall be
plotted as a function of the mileage on the system, rounded to the
nearest mile, and the best fit straight lines, fitted by the method of
least squares, shall be drawn through all these data points. The
interpolated 50,000-mile point of this line shall be used to calculate
the multiplicative exhaust emission correction factor for each engine-
system combination as follows:
[GRAPHIC] [TIFF OMITTED] TR06JN97.000

where:

R = the ratio of the regeneration exhaust emissions interpolated to
50,000 miles to the non-regeneration exhaust emissions interpolated to
50,000 miles.
n = the number of complete regenerations which occur during the
durability test.

(ii) The interpolated values determined in paragraph (e)(1)(i) of
this section shall be carried out to a minimum of four places to the
right of the decimal point before dividing one by the other to
determine the correction factor. The results shall be rounded to three
places to the right of the decimal point in accordance with the
Rounding-Off Method specified in ASTM E 29-90, Standard Practice for
Using Significant Digits in Test Data to Determine Conformance with
Specifications (incorporated by reference; see Sec. 86.1). For
applicability to gaseous emission standards under the 100,000 mile
option, R will be determined based upon projected 100,000 mile
emissions.
(2) [Reserved]
(f) The provisions of Sec. 86.094-28(a)(4)(ii)(A) and subsequent
model year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) The official exhaust emission test results for each emission-
data vehicle at the 4,000 mile test point shall be multiplied by the
appropriate deterioration factor, and correction factor (diesel light-
duty vehicles and light-duty trucks equipped with periodically
regenerating trap oxidizer systems only): Provided: that if a
deterioration factor as computed in Sec. 86.094-28(a)(4)(i)(B) and
subsequent model year provisions or a correction factor as computed in
paragraph (e) of this section is less than one, that deterioration
factor or correction factor shall be one for the purposes of this
paragraph (f).
(2) [Reserved]
(g) The provisions of Sec. 86.094-28(a)(4)(iii) and subsequent
model year provisions do not apply to this subpart. The following shall
instead apply to this subpart:
(1) The emissions to compare with the standard (or the family
particulate emission limit, as appropriate) shall be the adjusted
emissions of Sec. 86.094-28(a)(4)(ii)(A) and (B) and subsequent model
year provisions for each emission-data vehicle. Before any emission
value is compared with the standard (or the family particulate limit,
as appropriate), it shall be rounded to one significant figure beyond
the number of significant figures contained in the standard (or the
family particulate emission limit, as appropriate) in accordance with
the Rounding-Off Method specified in ASTM E 29-90, Standard Practice
for Using Significant Digits in Test Data to Determine Conformance with
Specifications (incorporated by reference; see Sec. 86.1). The rounded
emission values may not exceed the standard (or the family particulate
emission limit, as appropriate). Fleet average NMOG value calculations
shall be rounded to four significant figures in accordance with the
Rounding-Off Method specified in ASTM E 29-90, Standard Practice for
Using Significant Digits in Test Data to Determine Conformance with
Specifications (incorporated by reference; see Sec. 86.1) before
comparing with fleet average NMOG requirements.
(2) [Reserved]
(h) The provisions of Sec. 86.094-28(b) and subsequent model year
provisions do not apply to this subpart.

Sec. 86.1729-97 through Sec. 86.1733-97 [Reserved]

Sec. 86.1734-97 Alternative procedure for notification of additions
and changes.

The provisions of Sec. 86.082-34 and subsequent model year
provisions apply to this subpart, with the following exceptions and
additions:
(a) The provisions of Sec. 86.082-34(a) and subsequent model year
provisions apply to this subpart, with the following addition:
(1) A manufacturer must notify the Administrator within 10 working
days of making an addition of a vehicle to a certified engine family or
a change in a vehicle previously covered by certification. The
manufacturer shall also submit, upon request of the Administrator, the
following items:
(i) service bulletin;
(ii) driveability statement;
(iii) test log;
(iv) maintenance log.
(2) All running changes and field fixes that do not adversely
affect the system durability are deemed approved unless disapproved by
the Administrator within 30 days of the receipt of the running change
or field fix request. A change not specifically identified in the
manufacturer's application must also be reported to the Administrator
if the

[[Page 31260]]

change may adversely affect engine or emission control system
durability. Examples of such changes include any change that could
affect durability, thermal characteristics, deposit formation, or
exhaust product composition, i.e., combustion chamber design, cylinder
head material, camshaft profile, computer modifications, turbocharger,
intercooler wastegate characteristics, and transmission or torque
converter specifications. The manufacturer is required to update and
submit to the Administrator the ``supplemental data sheet'' for all
running changes and field fixes implemented with the change
notification. The manufacturer shall submit, on a monthly basis, by
engine family, a list of running changes/field fixes giving the
document number date submitted and a brief description of the change.
(b) [Reserved]

Sec. 86.1735-97 Labeling.

The following requirements shall apply to TLEVs, LEVs, ULEVs, and
ZEVs certified under the provisions of this subpart:
(a) The requirements in Sec. 86.096-35 and subsequent model year
provisions do not apply to this section.
(b) The requirements in Chapter 7 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996) shall apply. These requirements are incorporated by
reference (see Sec. 86.1).

Sec. 86.1736-97 through Sec. 86.1769-97 [Reserved]

Sec. 86.1770-97 All-Electric Range Test requirements.

(a) ZEVs and Type A and Type B hybrid electric vehicles shall be
subject to the All-Electric Range Test specified below for the purpose
of determining the energy efficiency and operating range of a ZEV or of
a hybrid electric vehicle operating without the use of its auxiliary
power unit. For hybrid electric vehicles, the manufacturer may elect to
conduct the All-Electric Range Test prior to vehicle preconditioning in
the exhaust and evaporative emission test sequence specified in subpart
B of this part.
(1) Cold soak. The vehicle shall be stored at an ambient
temperature not less than 68 deg. F (20 deg. C) and not more than
86 deg. F (30 deg. C) for 12 to 36 hours. During this time, the
vehicle's battery shall be charged to a full state-of-charge.
(2) Driving schedule. At the end of the cold soak period, the
vehicle shall be placed, either driven or pushed, onto a dynamometer
and operated through a Highway Fuel Economy Driving Schedule, found in
40 CFR part 600, Appendix I, followed immediately by an Urban
Dynamometer Driving Schedule, found in Appendix I of this part 86,
followed by another Highway Fuel Economy Driving Schedule and an Urban
Dynamometer Driving Schedule. This sequence of driving schedules shall
be repeated until the vehicle is no longer able to maintain within 5
miles per hour of the speed requirements or within 2 seconds of the
time requirements of the driving schedules in the case of a ZEV, or
unable to maintain within 5 miles per hour of the speed requirements or
within 2 seconds of the time requirement of the driving schedules
without the use of the auxiliary power unit in the case of a hybrid
electric vehicle.
(3) Recording requirements. Once the vehicle is no longer able to
maintain the speed and time requirements specified in paragraph (a)(2)
of this section, or once the auxiliary power unit turns on, in the case
of a hybrid electric vehicle, the accumulated mileage and energy usage
of the vehicle from the point where electricity is introduced from the
electrical outlet shall be recorded, and the vehicle shall be brought
to an immediate stop, thereby concluding the All-Electric Range Test.
(4) Regenerative braking. Regenerative braking systems may be
utilized during the range test. The braking level, if adjustable, shall
be set according to the manufacturer's specifications prior to the
commencement of the test. The driving schedule speed and time
tolerances specified in paragraph (a)(2) of this section shall not be
exceeded due to the operation of the regenerative braking system.
(b) [Reserved]

Sec. 86.1771-97 Fuel specifications.

(a) The provisions of Sec. 86.113 apply to this subpart, with the
following exceptions and additions.
(1) For light-duty vehicles and light light-duty trucks, gasoline
having the specifications listed below may be used in exhaust emission
testing as an option to the specifications in Sec. 86.113(a)(1). If a
manufacturer elects to utilize this option, exhaust emission testing
shall be conducted by the manufacturer with gasoline having the
specifications listed in the table in this paragraph (a)(1), and the
Administrator shall conduct exhaust emission testing with gasoline
having the specifications listed in the table in this paragraph (a)(1).
Specifications for non-gasoline fuels and all fuel property test
methods are contained in Chapter 4 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996). These requirements are incorporated by reference (see
Sec. 86.1). The table follows:

------------------------------------------------------------------------
Fuel property Limit
------------------------------------------------------------------------
Octane, (R+M)/2 (min)..................... 91.
Sensitivity (min)......................... 7.5.
Lead, g/gal (max) (No lead added)......... 0-0.01
Distillation Range, deg.F................ ............................
10 pct. point,............................ 130-150.
50 pct. point,............................ 200-210.
90 pct. point,............................ 290-300.
EP, maximum............................... 390.
Residue, vol % (max)...................... 2.0.
Sulfur, ppm by wt......................... 30-40.
Phosphorous, g/gal (max).................. 0.005.
RVP, psi.................................. 6.7-7.0.
Olefins, vol %............................ 4.0-6.0.
Total Aromatic Hydrocarbons (vol %)....... 22-25.
Benzene, vol %............................ 0.8-1.0.
Multi-Substituted Alkyl Aromatic 12-14.
Hydrocarbons, vol %.
MTBE, vol %............................... 10.8-11.2.
Additives................................. See Chapter 4 of the
California Regulatory
Requirements Applicable to
the National Low Emission
Vehicle Program (October,
1996). These procedures are
incorporated by reference
(see Sec. 86.1).
Copper Corrosion.......................... No. 1.
Gum, Washed, mg/100 ml (max).............. 3.0.
Oxidation Stability, minutes (min)........ 1,000.
Specific Gravity.......................... No limit; report to
purchaser required.
Heat of Combustion........................ No limit; report to
purchaser required.
Carbon, wt %.............................. No limit; report to
purchaser required.
Hydrogen, wt %............................ No limit; report to
purchaser required.
------------------------------------------------------------------------

(2) [Reserved]
(b) [Reserved]

Sec. 86.1772-97 Road load power test weight and inertia weight class
determination.

(a) The provisions of Sec. 86.129 apply to this subpart.
(b) The following requirements shall also apply to this subpart:
(1) For electric and hybrid electric vehicle lines where it is
expected that more than 33 percent of a vehicle line will be equipped
with air conditioning, per Sec. 86.096-24(g)(2), that derives power
from the battery pack, the road load shall be increased by the
incremental horsepower required to operate the air conditioning unit.
The

[[Page 31261]]

incremental increase shall be determined by recording the difference in
energy required for a hybrid electric vehicle under all-electric power
to complete the running loss test fuel tank temperature profile test
sequence without air conditioning and the same vehicle tested over the
running loss test fuel tank temperature profile test sequence with the
air conditioning set to the ``NORMAL'' air conditioning mode and
adjusted to the minimum discharge air temperature and high fan speed
over the time period needed to perform the test sequence, and
converting this value into units of horsepower. Vehicles equipped with
automatic temperature controlled air conditioning systems shall be
operated in ``AUTOMATIC'' temperature and fan modes with the system set
at 72 deg. F. The running loss test fuel tank temperature profile test
sequence is found in Sec. 86.129(d).
(2) [Reserved]

Sec. 86.1773-97 Test sequence; general requirements.

(a) The provisions of Sec. 86.130 apply to this subpart.
(b) The following additional requirements shall also apply to this
subpart:
(1) For purposes of determining conformity with 50 deg. F test
requirements, the procedures set forth in paragraph (c) of this section
shall apply. For all hybrid electric vehicles and all 1995 and
subsequent model-year vehicles certifying to running loss and useful
life evaporative emission standards, the test sequence specified in
subpart B of this part shall apply.
(2) [Reserved]
(c)(1) Following a 12 to 36 hour cold soak at a nominal temperature
of 50 deg. F, emissions of CO and NO<INF>X</INF> measured on the
Federal Test Procedure (subpart B of this part), conducted at a nominal
test temperature of 50 deg. F, shall not exceed the standards for
vehicles of the same emission category and vehicle type subject to a
cold soak and emission test at 68 to 86 deg. F. For all TLEVs,
emissions of NMOG and formaldehyde at 50 deg. F shall not exceed the
50,000 mile certification standard multiplied by a factor of 2.0. For
all LEVs, emissions of NMOG and formaldehyde at 50 deg. F shall not
exceed the 50,000 mile certification standard multiplied by a factor of
2.0. For all ULEVs, emissions of NMOG and formaldehyde at 50 deg. F
shall not exceed the 50,000 mile certification standard multiplied by a
factor of 2.0. Emissions of NMOG shall be multiplied by a reactivity
adjustment factor, if any, prior to comparing with the 50,000
certification standard multiplied by the specified factor. The test
vehicles shall not be subject to a diurnal heat build prior to the cold
start exhaust test or evaporative emission testing.
(i) For the 50 deg. F emission test, the nominal preconditioning,
soak, and test temperatures shall be maintained within 3 deg. F of the
nominal temperature on an average basis and within 5 deg. F of the
nominal temperature on a continuous basis. The temperature shall be
sampled at least once every 15 seconds during the preconditioning and
test periods and at least once each 5 minutes during the soak period. A
continuous strip chart recording of the temperature with these minimum
time resolutions is an acceptable alternative to employing a data
acquisition system.
(ii) The test site temperature shall be measured at the inlet of
the vehicle cooling fan used for testing.
(iii) The test vehicle may be fueled before the preconditioning
procedure in a fueling area maintained within a temperature range of 68
to 86 deg. F. The preconditioning shall be conducted at a nominal
temperature of 50 deg. F. The requirement to saturate the evaporative
control canister(s) shall not apply.
(iv) If a soak area remote from the test site is used, the vehicle
may pass through an area maintained within a temperature range of 68 to
86 deg. F during a time interval not to exceed 10 minutes. In such
cases, the vehicle shall be restabilized to 50 deg. F by soaking the
vehicle in the nominal 50 deg. F test area for six times as long as the
exposure time to the higher temperature area, prior to starting the
emission test.
(v) The vehicle shall be approximately level during all phases of
the test sequence to prevent abnormal fuel distribution.
(2) Manufacturers shall demonstrate compliance with this
requirement each year by testing at least three LDV or LDT emission
data and/or engineering development vehicles (with at least 4000 miles)
which are representative of the array of technologies available in that
model year. Only TLEVs, LEVs, and ULEVs are to be considered for
testing at 50 deg.F. It is not necessary to apply deterioration
factors (DFs) to the 50 deg.F test results to comply with this
requirement. Testing at 50 deg.F shall not be required for fuel-
flexible and dual-fuel vehicles when operating on gasoline. Natural
gas, hybrid electric and diesel-fueled vehicles shall also be exempt
from 50 deg.F testing.
(3) The following schedule outlines the parameters to be considered
for vehicle selection:
(i) Fuel control system (e.g., multiport fuel injection, throttle
body electronic fuel injection, sequential multiport electronic fuel
injection, etc.);
(ii) Catalyst system (e.g., electrically heated catalyst, close-
coupled catalyst, underfloor catalyst, etc.);
(iii) Control system type (e.g., mass-air flow, speed density,
etc.);
(iv) Vehicle category (e.g., TLEV, LEV, ULEV);
(v) Fuel type (e.g., gasoline, methanol, etc.).
(4) The same engine family shall not be selected in the succeeding
two years unless the manufacturer produces fewer than three engine
families. If the manufacturer produces more than three TLEV, LEV, or
ULEV engine families per model year, the Administrator may request 50
deg.F testing of specific engine families. If the manufacturer provides
a list of the TLEV, LEV, and ULEV engine families that it will certify
for a model year and provides a description of the technologies used on
each engine family (including the vehicle selection parameters
information in paragraphs (c)(3) (i) through (v) of this section), the
Administrator shall select the engine families subject to 50 deg.F
testing within a 30 day period after receiving such a list and
description. The Administrator may revise the engine families selected
after the 30 day period if the information provided by the manufacturer
does not accurately reflect the engine families actually certified by
the manufacturer.
(5) For the purposes of this section, the Administrator will accept
vehicles selected and tested in accordance with the 50 deg.F testing
procedures specified by the California Air Resources Board.

Sec. 86.1774-97 Vehicle preconditioning.

The provisions of Sec. 86.132 apply to this subpart, with the
following exceptions and additions:
(a) The provisions of Sec. 86.132 (a) through (e) apply to this
subpart, with the following additional requirements:
(1) The UDDS performed prior to a non-regeneration emission test
shall not contain a regeneration (diesel light-duty vehicles and light-
duty trucks equipped with periodically regenerating trap oxidizer
systems only). A gasoline fueled test vehicle may not be used to set
dynamometer horsepower.
(2) [Reserved]
(b) [Reserved]

Sec. 86.1775-97 Exhaust sample analysis.

The following requirements shall apply to TLEVs, LEVs, ULEVs, and
ZEVs certified under the provisions of this subpart:
(a) The requirements in Sec. 86.140;
(b) The requirements in Chapter 5 of the California Regulatory
Requirements

[[Page 31262]]

Applicable to the National Low Emission Vehicle Program (October,
1996). These requirements are incorporated by reference (see
Sec. 86.1).

Sec. 86.1776-97 Records required.

(a) The provisions of Sec. 86.142 apply to this subpart.
(b) In addition to the provisions of Sec. 86.142, the following
provisions apply to this subpart:
(1) The manufacturer shall record in the durability-data vehicle
logbook, the number of regenerations that occur during the 50,000 mile
durability test of each diesel light-duty vehicle and light-duty truck
equipped with a periodically regenerating trap oxidizer system. The
manufacturer shall include, for each regeneration: the date and time of
the start of regeneration, the duration of the regeneration, and the
accumulated mileage at the start and the end of regeneration. The
number of regenerations will be used in the calculation of the
correction factor in Sec. 86.096-28 and subsequent model year
provisions.
(2) The requirements in Chapter 5 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996). These requirements are incorporated by reference (see
Sec. 86.1).
(3) For additional record requirements see Secs. 86.1770, 86.1771,
86.1772, 86.1773, 86.1774, and 86.1777.

Sec. 86.1777-97 Calculations; exhaust emissions.

The provisions of Sec. 86.144 apply to this subpart, with the
following exceptions and additions:
(a) The provisions of Sec. 86.144(b) apply to this subpart, with
the following additional requirement:
(1) Organic material non-methane hydrocarbon equivalent mass for
ethanol vehicles:
OMNMHCE<INF>mass</INF>=NMHC<INF>mass</INF>+(13.8756/
32.042) x (CH<INF>3</INF>OH)<INF>mass</INF>+(13.8756/
46.064) x (CH<INF>3</INF>CH<INF>2</INF>OH)<INF>mass</INF>+(13.8756/
30.0262) x (HCHO)<INF>mass</INF>+(13.8756/
44.048) x (CH<INF>3</INF>CHO)<INF>mass</INF>
(2) [Reserved]
(b) The requirements in Chapter 5 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996) apply to this subpart. These requirements are
incorporated by reference (see Sec. 86.1).
(c) The provisions in Appendix XV of this part and Appendix XVI of
this part apply to this subpart.
(d) Reactivity adjustment factors. (1) For the purpose of complying
with the NMOG exhaust emission standards in Secs. 86.1708 and 86.1709,
the mass of NMOG emissions from a vehicle certified to operate on a
fuel other than conventional gasoline, including fuel-flexible and
dual-fuel vehicles when operated on a fuel other than conventional
gasoline, shall be multiplied by the reactivity adjustment factor
applicable to the vehicle emission control technology category and
fuel. The product of the NMOG mass emission value and the reactivity
adjustment factor shall be compared to the NMOG exhaust emission
standards to determine compliance with the standards. In addition to
the above requirements, vehicles operating on natural gas shall add to
the product of the NMOG mass emission value and the reactivity
adjustment factor, the product of the methane mass emission value and
the methane reactivity adjustment factor. This result shall be compared
to the NMOG exhaust emission standards to determine compliance with the
standards for natural gas-fueled vehicles.
(2) The following reactivity adjustment factors have been
established pursuant to the criteria in Appendix XVII of this part:
(i) Light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
Reactivity
Vehicle emission control Fuel adjustment
technology category factor
------------------------------------------------------------------------
TLEVs............................ 85% methanol, 15% 0.41
gasoline blends.
LEVs and ULEVs through model year 85% methanol, 15% 0.41
2000. gasoline blends.
TLEVs through model year 2000.... Gasoline meeting the 0.98
specifications of Sec.
86.1771(a)(1).
LEVs and ULEVs through model year Gasoline meeting the 0.94
2000. specifications of Sec.
86.1771(a)(1).
TLEVs through model year 2000.... Fuel meeting the 1.00
specifications for
liquefied petroleum gas
specified in Chapter 4
of the California
Regulatory Requirements
Applicable to the
National Low Emission
Vehicle Program
(October, 1996).
LEVs and ULEVs through model year Fuel meeting the 0.50
2000. specifications for
liquefied petroleum gas
specified in Chapter 4
of the California
Regulatory Requirements
Applicable to the
National Low Emission
Vehicle Program
(October, 1996).
TLEVs through model year 2000.... Fuel meeting the 1.00
specifications for
natural gas specified
in Chapter 4 of the
California Regulatory
Requirements Applicable
to the National Low
Emission Vehicle
Program (October, 1996).
LEVs and ULEVs through model year Fuel meeting the 0.43
2000. specifications for
natural gas specified
in Chapter 4 of the
California Regulatory
Requirements Applicable
to the National Low
Emission Vehicle
Program (October, 1996).
------------------------------------------------------------------------

(ii) Natural gas light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
Methane
reactivity
Vehicle emission control technology category adjustment
factor
------------------------------------------------------------------------
TLEVs....................................................... 0.0043
LEVs and ULEVs.............................................. 0.0047
------------------------------------------------------------------------

(3) The Administrator may establish new reactivity adjustment
factors pursuant to Appendix XVII of this part in addition to those
listed in paragraph (d)(2) of this section. The Administrator shall
notify manufacturers in writing of the new reactivity adjustment
factors within 30 days of their establishment.
(4) The Administrator may revise any reactivity adjustment factor
listed in paragraph (d)(2) of this section or established by the
Administrator pursuant to Appendix XVII of this part if he or she
determines that the revised reactivity adjustment factor is more
representative of the ozone-forming potential of vehicle NMOG emissions
based on the best available scientific knowledge and sound engineering
judgment. The Administrator shall notify manufacturers in writing of
any such reactivity adjustment factor at least 3 years prior to January
1 of the calendar year which has the same numerical designation as the
model year for which the revised reactivity adjustment factor first
becomes effective. However, manufacturers may use the revised
reactivity adjustment factor in certifying

[[Page 31263]]

any new engine family whose certification application is submitted
following such notification, if they so choose. Manufacturers may also
continue to use the original reactivity adjustment factor for any
existing engine family previously certified with that reactivity
adjustment factor until a new durability-data vehicle is tested for
that engine family.
(5) Manufacturers may request the use of a unique reactivity
adjustment factor for a specific vehicle emission control technology
category and fuel. The Administrator shall approve such requests in
accordance with the conditions and procedures of Appendix XVII of this
part. For the purpose of calculating the reactivity adjustment factor
as specified in Appendix XVII of this part, the ``g ozone potential per
g NMOG'' value for the vehicle emission control technology category and
fuel system for which the manufacturer is requesting the use of a
unique reactivity adjustment factor shall be divided by the ``g ozone
potential per g NMOG'' value for a conventional gasoline-fueled vehicle
established for the vehicle emission control technology category. The
following ``g ozone potential per g NMOG'' values for conventional
gasoline-fueled vehicle emission control technology categories have
been established:
(i) Light-duty vehicles and light-duty trucks:

------------------------------------------------------------------------
``g ozone
potential
per g NMOG''
Vehicle emission control technology category for
conventional
gasoline
------------------------------------------------------------------------
All TLEVs................................................. 3.42
All 1993 and subsequent model-year LEVs and ULEVs......... 3.13
------------------------------------------------------------------------

(ii) [Reserved]

Sec. 86.1778-97 Calculations; particulate emissions.

The provisions of Sec. 86.145 and Appendix XVI of this part apply
to this subpart.

Sec. 86.1779-97 General enforcement provisions.

(a) The provisions of sections 203-208 of the Clean Air Act, as
amended, (42 U.S.C. 7522-7525, 7541-7542) apply to all motor vehicles
manufactured by a covered manufacturer under this program, and to all
covered manufacturers and all persons with respect to such vehicles.
(b) Violation of the requirements of this subpart shall subject a
person to the jurisdiction and penalty provisions of sections 204-205
of the Clean Air Act (42 U.S.C. 7522-7523).
(c) EPA may not issue a certificate of conformity to a covered
manufacturer, as defined in Sec. 86.1702, except based on compliance
with the standards and requirements in this part 86 and 40 CFR part 85.

Sec. 86.1780-97 Prohibited acts.

(a) The following acts and the causing thereof are prohibited:
(1) In the case of a covered manufacturer, as defined by
Sec. 86.1702, of new motor vehicles or new motor vehicle engines for
distribution in commerce, the sale, or the offering for sale, or the
introduction, or delivery for introduction, into commerce, or (in the
case of any person, except as provided by regulation of the
Administrator), the importation into the United States of any new motor
vehicle or new motor vehicle engine subject to this subpart, unless
such vehicle or engine is covered by a certificate of conformity issued
(and in effect) under regulations found in this subpart (except as
provided in sec. 203(b) of the Clean Air Act (42 U.S.C. 7522(b)) or
regulations promulgated thereunder).
(2)(i) For any person to fail or refuse to permit access to or
copying of records or to fail to make reports or provide information
required under sec. 208 of the Clean Air Act (42 U.S.C. 7542) with
regard to covered vehicles.
(ii) For a person to fail or refuse to permit entry, testing, or
inspection authorized under sec. 206(c) (42 U.S.C. 7525(c)) or sec. 208
of the Clean Air Act (42 U.S.C. 7542) with regard to covered vehicles.
(iii) For a person to fail or refuse to perform tests, or to have
tests performed as required under sec. 208 of the Clean Air Act (42
U.S.C. 7542) with regard to covered vehicles.
(iv) For a person to fail to establish or maintain records as
required under Secs. 86.1723 and 86.1776 with regard to covered
vehicles.
(v) For any manufacturer to fail to make information available as
provided by regulation under sec. 202(m)(5) of the Clean Air Act (42
U.S.C. 7521(m)(5)) with regard to covered vehicles.
(3)(i) For any person to remove or render inoperative any device or
element of design installed on or in a covered vehicle or engine in
compliance with regulations under this subpart prior to its sale and
delivery to the ultimate purchaser, or for any person knowingly to
remove or render inoperative any such device or element of design after
such sale and delivery to the ultimate purchaser.
(ii) For any person to manufacture, sell or offer to sell, or
install, any part or component intended for use with, or as part of,
any covered vehicle or engine, where a principal effect of the part or
component is to bypass, defeat, or render inoperative any device or
element of design installed on or in a covered vehicle or engine in
compliance with regulations issued under this subpart, and where the
person knows or should know that the part or component is being offered
for sale or installed for this use or put to such use.
(4) For any manufacturer of a covered vehicle or engine subject to
standards prescribed under this subpart:
(i) To sell, offer for sale, introduce or deliver into commerce, or
lease any such vehicle or engine unless the manufacturer has complied
with the requirements of sec. 207 (a) and (b) of the Clean Air Act (42
U.S.C. 7541 (a), (b)) with respect to such vehicle or engine, and
unless a label or tag is affixed to such vehicle or engine in
accordance with sec. 207(c)(3) of the Clean Air Act (42 U.S.C.
7541(c)(3)).
(ii) To fail or refuse to comply with the requirements of sec. 207
(c) or (e) of the Clean Air Act (42 U.S.C. 7541 (c) or (e)).
(iii) Except as provided in sec. 207(c)(3) of the Clean Air Act (42
U.S.C. 7541(c)(3)), to provide directly or indirectly in any
communication to the ultimate purchaser or any subsequent purchaser
that the coverage of a warranty under the Clean Air Act is conditioned
upon use of any part, component, or system manufactured by the
manufacturer or a person acting for the manufacturer or under its
control, or conditioned upon service performed by such persons.
(iv) To fail or refuse to comply with the terms and conditions of
the warranty under sec. 207 (a) or (b) of the Clean Air Act (42 U.S.C.
7541 (a) or (b)).
(b) For the purposes of enforcement of this subpart, the following
apply:
(1) No action with respect to any element of design referred to in
paragraph (a)(3) of this section (including any adjustment or
alteration of such element) shall be treated as a prohibited act under
paragraph (a)(3) of this section if such action is in accordance with
sec. 215 of the Clean Air Act (42 U.S.C. 7549);
(2) Nothing in paragraph (a)(3) of this section is to be construed
to require the use of manufacturer parts in maintaining or repairing a
covered vehicle or engine. For the purposes of the preceding sentence,
the term ``manufacturer parts'' means, with respect to a motor vehicle
engine, parts produced or sold by the manufacturer of

[[Page 31264]]

the motor vehicle or motor vehicle engine;
(3) Actions for the purpose of repair or replacement of a device or
element of design or any other item are not considered prohibited acts
under paragraph (a)(3) of this section if the action is a necessary and
temporary procedure, the device or element is replaced upon completion
of the procedure, and the action results in the proper functioning of
the device or element of design;
(4) Actions for the purpose of a conversion of a motor vehicle or
motor vehicle engine for use of a clean alternative fuel (as defined in
title II of the Clean Air Act) are not considered prohibited acts under
paragraph (a) of this section if:
(i) The vehicle complies with the applicable standard when
operating on the alternative fuel; and
(ii) In the case of engines converted to dual fuel or flexible use,
the device or element is replaced upon completion of the conversion
procedure, and the action results in proper functioning of the device
or element when the motor vehicle operates on conventional fuel.
33. Appendix XIII is added to part 86 to read as follows:
Appendix XIII to Part 86--State Requirements Incorporated by Reference
in Part 86 of the Code of Federal Regulations
The following is an informational list of the California
regulatory requirements applicable to the National Low Emission
Vehicle program (October, 1996) incorporated by reference in part 86
of the Code of Federal Regulations (see Sec. 86.1).

California State Regulations

(a) State of California; Air Resources Board: California
Assembly-Line Test Procedures for 1983 Through 1997 Model-Year
Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, adopted
November 24, 1981, amended June 24, 1996.
(b) State of California; Air Resources Board: California
Assembly-Line Test Procedures for 1998 and Subsequent Model-Year
Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, adopted
June 24, 1996.
(c) California Code of Regulations, Title 13, Division 3,
Sections 2108, 2109, 2110.
(d) State of California; Air Resources Board: California Exhaust
Emission Standards and Test Procedures for 1988 and Subsequent Model
Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles, adopted
May 20, 1987, amended June 24, 1996, Section 9.a.
(e) State of California; Air Resources Board: California Non-
Methane Organic Gas Test Procedures, adopted July 12, 1991, amended
June 24, 1996.
(f) State of California; Air Resources Board: Regulations
Regarding Malfunction and Diagnostic System Requirements--1994 and
Later Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles
and Engines (OBD II), California Mail Out #95-34, September 26,
1995, excluding paragraphs (d), (m)(4), and (m)(5).
(g) State of California; Air Resources Board: California Motor
Vehicle Emission Control Label Specifications, adopted March 1,
1978, amended June 24, 1996, excluding paragraphs 2(b), 3.5, and 10.
34. Appendix XIV is added to part 86 to read as follows:
Appendix XIV to Part 86--Determination of Acceptable Durability Test
Schedule for Light-Duty Vehicles and Light Light-Duty Trucks Certifying
to the Provisions of Part 86, Subpart R
A manufacturer may determine mileage test intervals for
durability-data vehicles subject to the conditions specified in
Sec. 86.1726. The following procedure shall be used to determine if
the schedule is acceptable to the Administrator:
1. Select exhaust system mileage test points and maintenance
mileage test points for proposed (prop) schedule.
2. Calculate the sums of the squares corrected to the mean of
the system mileages at the proposed test points:

A<INF>prop</INF> =
[<3-ln-grk-S>(X<INF>p</INF>)²-((<3-ln-grk-S>X<INF>p</INF>)²
/ N<INF>p</INF>))<INF>prop</INF>

Where:
X<INF>p</INF> = Individual mileages at which the vehicle will be
tested.
N<INF>p</INF> = Total number of tests (including before and after
maintenance tests).

(Subscript ``p'' refers to proposed test schedule).
3. Determine exhaust system mileage test points and maintenance
mileage test points based on testing at five thousand mile intervals
from 5,000 miles through the final testing point and maintenance
mileage test points selected for the proposed schedule in step 1 of
this appendix. This schedule will be designated as the standard
(std) test schedule.
4. Calculate the sums of squares corrected to the mean of the
standard schedule:

B<INF>std</INF> =
[<3-ln-grk-S>(X<INF>s</INF>)²-((<3-ln-grk-S>X<INF>s</INF>)²
/ N<INF>s</INF>))<INF>std</INF>

Where:
X<INF>s</INF> = Individual mileages at which the vehicle will be
tested.
N<INF>s</INF> = Total number of tests (including before and after
maintenance).

(Subscript ``s'' refers to standard test schedule).
5. Refer to Table I and determine t<INF>p</INF> at
(N<INF>p</INF>-2)<INF>prop</INF> degrees of freedom and
t<INF>s</INF> at (N<INF>s</INF>-2)<INF>std</INF>.
6. If (A<INF>prop</INF>)^\1/2\<gr-thn-eq>
t<INF>p</INF> / t<INF>s</INF> x (B<INF>std</INF>)^\1/2\
the proposed plan is acceptable.

Table I to Appendix XIV
------------------------------------------------------------------------
Degrees of freedom (N-2) t
------------------------------------------------------------------------
1.............................................................. 6.314
2.............................................................. 2.920
3.............................................................. 2.353
4.............................................................. 2.132
5.............................................................. 2.015
16............................................................. 1.943
7.............................................................. 1.895
8.............................................................. 1.860
9.............................................................. 1.833
10............................................................. 1.812
11............................................................. 1.796
12............................................................. 1.782
13............................................................. 1.771
14............................................................. 1.761
15............................................................. 1.753
6 1.746
17............................................................. 1.740
18............................................................. 1.734
19............................................................. 1.729
20............................................................. 1.725
21............................................................. 1.721
22............................................................. 1.717
23............................................................. 1.714
24............................................................. 1.711
25............................................................. 1.708
------------------------------------------------------------------------

35. Appendix XV is added to part 86 to read as follows:
Appendix XV to Part 86--Procedure for Determining an Acceptable Exhaust
Regeneration Durability-Data Test Schedule for Diesel Cycle Vehicles
Equipped With Periodically Regenerating Trap Oxidizer Systems
Certifying to the Provisions of Part 86, Subpart R
1. Select exhaust system mileage test points for proposed (prop)
schedule.
2. Calculate the sums of the squares corrected to the mean of
the system mileages at the proposed test points:

A<INF>prop</INF> =
[<3-ln-grk-S>(X<INF>p</INF>)²-((<3-ln-grk-S>X<INF>p</INF>)²
/ N<INF>p</INF>))<INF>prop</INF>

Where:
X<INF>p</INF> = Individual mileages at which the vehicle will be
tested.
N<INF>p</INF> = Total number of tests (including before and after
maintenance tests).

(Subscript ``p'' refers to proposed test schedule).
3. The exhaust system mileage tests points at 5,000, 25,000,
50,000, 75,000, and 100,000 miles will be designated as the standard
(std) test schedule.
4. Calculate the sums of square corrected to the mean of the
standard tests schedule:

B<INF>std</INF> =
[<3-ln-grk-S>(X<INF>s</INF>)²-((<3-ln-grk-S>X<INF>s</INF>)²
/ N<INF>s</INF>))<INF>std</INF>

Where:
X<INF>s</INF> = Individual mileages at which the vehicle will be
tested.
N<INF>s</INF> = Total number of regeneration emission tests.

(Subscript ``s'' refers to standard test schedule)
5. Refer to Table I and determine t<INF>p</INF> at
(N<INF>p</INF>-2)<INF>prop</INF> degrees of freedom and
t<INF>s</INF> at (N<INF>s</INF>-2)<INF>std</INF> degrees of freedom.
6. If (A<INF>prop</INF>)^1/2 <gr-thn-eq> t<INF>p</INF>
/ t<INF>s</INF> x (B<INF>std</INF>)^1/2 the proposed
plan is acceptable.

Table I to Appendix XV
------------------------------------------------------------------------
Degrees of freedom (N-2) t
------------------------------------------------------------------------
1.............................................................. 6.314
2.............................................................. 2.920
3.............................................................. 2.353
4.............................................................. 2.132

[[Page 31265]]

5.............................................................. 2.015
6.............................................................. 1.943
7.............................................................. 1.895
8.............................................................. 1.860
9.............................................................. 1.833
10............................................................. 1.812
11............................................................. 1.796
12............................................................. 1.782
13............................................................. 1.771
14............................................................. 1.761
15............................................................. 1.753
------------------------------------------------------------------------

36. Appendix XVI is added to part 86 to read as follows:
Appendix XVI to PART 86--Pollutant Mass Emissions Calculation Procedure
for Gaseous-Fueled Vehicles and for Vehicles Equipped With Periodically
Regenerating Trap Oxidizer Systems Certifying to the Provisions of Part
86, Subpart R
(a) Gaseous-Fueled Vehicle Pollutant Mass Emission Calculation
Procedure.
(1) For all TLEVs, LEVs, and ULEVs, the calculation procedures
specified in Chapter 5 of the California Regulatory Requirements
Applicable to the National Low Emission Vehicle Program (October,
1996) shall apply. These procedures are incorporated by reference
(see Sec. 86.1).
(b) Pollutant Mass Emissions Calculation Procedure for Vehicles
Equipped with Periodically Regenerating Trap Oxidizer Systems.
(1) Exhaust Emissions. (i) The provisions of Sec. 86.1777 apply to
vehicles equipped with periodically regenerating trap oxidizer systems,
except that the following shall apply instead of the requirements in
Sec. 86.144-94(a):
(ii) The final reported test results shall be computed by the
use of the following formula:
(iii) For light-duty vehicles and light-duty trucks:

Y<INF>wm</INF> = 0.43 ((Yct+Ys)/(Dct + Ds))+0.57 ((Yht+Ys)/(Dht+Ds)).

(iv) For purposes of adjusting emissions for regeneration:

Re = ((Yr1--Yct)+(Yr2--Ys)+(Yr3--Yht))/(Dct+Ds+Dht).
Yr = Ywm+Re.

Where:
Ywm = Weighted mass emissions of each pollutant, i.e., HC, CO,
NO<INF>X</INF> or CO , in grams per vehicle mile.
Yct = Mass emissions as calculated from the ``transient'' phase of
the cold start test, in grams per test phase.
Yht = Mass emissions as calculated from the ``transient'' phase of
the hot start test in grams per test phase.
Ys = Mass emissions as calculated from the ``stabilized'' phase of
the cold start test, in grams per test phase.
Dct = The measured driving distance from the ``transient'' phase of
the cold start test, in miles.
Dht = The measured distance from the ``transient'' phase of the hot
start test, in miles.
Ds = The measured driving distance from the ``stabilized'' phase of
the cold start test, in miles.
Yr = Regeneration emission test.
Re = Mass emissions of each pollutant attributable to regeneration
in grams per mile.
Yr1 = Mass emissions, during a regeneration emission test, as
calculated from the ``transient'' phase of the cold start test, in
grams per test phase.
Yr2 = Mass emissions, during a regeneration emission test, as
calculated from the ``stabilized'' phase of the cold start test, in
grams per test phase.
Yr3 = Mass emissions, during a regeneration emission test, as
calculated from the ``transient'' phase of the hot start test in
grams per test phase.
(2) Particulate Emissions. (i) The provisions of Sec. 86.1778
apply to vehicles equipped with periodically regenerating trap
oxidizer systems, except that the following shall apply instead of
the requirements Sec. 86.145-82(a):
(ii) The final reported test results for the mass particulate
(Mp) in grams/mile shall be computed as follows.
(iii) For purposes of adjusting emissions for regeneration:

Mp = 0.43(Mp1+Mp2)/(Dct+Ds)+0.57 (Mp3+Mp2/(Dht+Ds)
Re = ((Mpr1-Mp1)+(Mpr2--Mp2)+(Mpr3--Mp3)/(Dct+Ds+Dht)
Mpr = Mp+Re

Where:
(1) Mp1 = Mass of particulate determined from the ``transient''
phase of the cold start test, in grams per test phase. (See
Sec. 86.110-94(d)(1) for determination.)
(2) Mp2 = Mass of particulate determined from the ``stabilized''
phase of the cold start test, in grams per test phase. (See
Sec. 86.110-94(d)(1) for determination.)
(3) Mp3=Mass of particulate determined from the ``transient'' phase
of the hot start test, in grams per test phase. (See Sec. 86.110-
94(d)(1) for determination.)
(4) Dct=The measured driving distance from the ``transient'' phase
of the cold start test, in miles.
(5) Ds=The measured driving distance from the ``stabilized'' phase
of the cold start test, in miles.
(6) Dht=The measured driving distance from the ``transient'' phase
of the hot start test, in miles.
(7) Mpr=Regeneration emission test
(8) Re=Mass of particulate attributable to regeneration in grams/
mile.
(9) Mpr1=Mass of particulate determined, during a regeneration
emission test, from the ``transient'' phase of the cold start test
in grams per test phase. (See Sec. 86.110-94(d)(1) for
determination.)
(10) Mpr2=Mass of particulate determined, during a regeneration
emission test, from ``stabilized'' phase of the cold start test, in
grams per test phase. (See Sec. 86.110-94(d)(1) for determination.)
(11) Mpr3=Mass of particulate determined, during a regeneration
emission test, from the ``transient'' phase of the hot start test,
in grams per test phase. (See Sec. 86.110-94(d)(1) for
determination.)

(c) Fuel Economy Calculations for Gaseous Fuels Based on the
Cold Start CVS-1975 Federal Test Procedure.
(1) Assume the fuel meets HD-5 specifications (95%
C<INF>3</INF>H<INF>8</INF>, 5% nC<INF>4</INF>H<INF>10</INF>, by
volume).
(i) Physical constants of Propane and Normal Butane:

------------------------------------------------------------------------
Liquid
density
Liquid of Hd-5
Component Mol. Sp. Gr. density (lb/gal
Wt. (lb/gal @ at 60
60 deg. F) deg. F)

------------------------------------------------------------------------
C<INF>3H<INF>8......... 44.094 0.508 4.235 x 0.95 = 4.0233
nC<INF>4H<INF>10....... 58.12 0.584 4.868 x 0.05 = 0.2434
----------

4.2667
------------------------------------------------------------------------

(ii) Density of the HD-5 fuel:

(0.95 x 4.235)+(0.05 x 4.868)=4.267 lb/gal @ 60 deg. F

(iii) Molecular Weights:
(A)

------------------------------------------------------------------------
Species Mol. Wt.
------------------------------------------------------------------------
C.......................................................... 12.01115
H.......................................................... 1.00797
0.......................................................... 15.9994
CO......................................................... 28.01055
CO<INF>2........................................................ 44.00995
CH<INF>2.658*................................................... 14.6903
------------------------------------------------------------------------
* Average ratio of Hydrogen to carbon atoms in HD-5 fuel.

(B)

C<INF>3H<INF>8
8/3=2.666 x 0.95 (% propane)= 2.533
nC<INF>4H<INF>10
10/4=2.5 x 0.05 (% Butane) =0.125

-----------
2.568

(iv) Weight of Carbon in:

[[Page 31266]]

CO=wt. of CO x (12.01115/28.01055)=wt CO x (0.429)
CO<INF>2</INF>=wt. of CO<INF>2</INF> x (12.01115/44.00995) wt
CO<INF>2</INF> x (0.273)
CH<INF>2.658</INF>=wt. of CH<INF>2.658</INF> x (12.01115/14.6903)=wt
CH<INF>2.658</INF> x (0.818)

(v) Wt. of Carbon per gallon of LPG:

wt. of carbon=4.2667 lbs/gal x 453.59 gms/lb x 0.818=1583 grams C/gal
HD-5

(vi) Fuel economy:
[GRAPHIC] [TIFF OMITTED] TR06JN97.001

[GRAPHIC] [TIFF OMITTED] TR06JN97.002

Where:
HC=CVS HC in grams/mile
CO=CVS CO in grams/mile
CO<INF>2</INF>=CVS CO<INF>2</INF> in grams/mile
For gasoline:
=2421 / ( (0.866)(HC)+(0.429)(CO)+(0.273)(CO<INF>2</INF> ) )
For Natural Gas:
=1535 / ( (0.759)(HC)+(0.429)(CO)+(0.273)(CO<INF>2</INF> ) )

37. Appendix XVII is added to part 86 to read as follows:
Appendix XVII to Part 86--Procedure for Determining Vehicle Emission
Control Technology Category/Fuel Reactivity Adjustment Factors for
Light-Duty Vehicles and Light Light-Duty Trucks Certifying to the
Provisions of Part 86, Subpart R
The following procedure shall be used by the Administrator to
establish the reactivity adjustment factor for exhaust emissions of
non-methane organic gases (NMOG) and establish the ``methane
reactivity adjustment factor'' for exhaust methane emissions from
natural gas vehicles, for the purpose of certifying a vehicle of
specific emission control technology category and fuel for the
National LEV program provisions of subpart R of this part.
(a) The Administrator shall determine representative speciated
NMOG exhaust emission profiles for light-duty conventional gasoline-
fueled TLEVs, LEVs, and ULEVs according to the following conditions:
(1) All testing will be conducted using a specified gasoline
blend representative of commercial gasoline and having the
specifications listed in Sec. 86.1771.
(2) Speciated NMOG profiles shall be obtained from a
statistically valid number of TLEVs, LEVs, and ULEVs.
(3) The speciated NMOG profiles shall identify and quantify, in
units of g/mile or mg/mile, as many constituents as possible in
accordance with the procedures specified in Chapter 5 of the
California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program (October, 1996). These procedures are
incorporated by reference (see Sec. 86.1).
(b) The ``g ozone potential per mile'' of each NMOG identified
in the speciated profile shall be determined by multiplying the ``g/
mile NMOG'' emission value of the constituent NMOG by its maximum
incremental reactivity in paragraph (j) of this appendix.
(c) The ``total g ozone potential per mile'' of NMOG exhaust
emissions from the vehicle/fuel system shall be the sum of all the
constituent NMOG ``g ozone potential per mile'' values calculated in
paragraph (b) of this appendix.
(d) The ``g ozone potential per g NMOG'' for the vehicle/fuel
system shall be determined by dividing the ``total g ozone potential
per mile'' value calculated in paragraph (c) of this appendix by the
``total g/mile of NMOG emissions''.
(e) For light-duty candidate vehicle/fuel systems not powered by
conventional gasoline, the Administrator shall establish
``reactivity adjustment factors'' calculated from exhaust emission
profiles derived according to the same conditions specified in
paragraphs (a)(1) and (a)(2) of this appendix.
(f) The ``g ozone potential per g NMOG'' for candidate vehicle/
fuel systems not powered by conventional gasoline shall be
determined according to paragraphs (b), (c), and (d) of this
appendix.
(g)(1) The candidate vehicle/fuel ``reactivity adjustment
factor'' shall be determined by dividing the ``g ozone potential per
g NMOG'' calculated in paragraph (f) of this appendix by the ``g
ozone potential per g NMOG'' value for the vehicle in the same
emission control technology category operated on conventional
gasoline. The ``g ozone potential per g NMOG'' values for
conventional gasoline vehicles are listed in Sec. 86.1777(b)(5) or
shall be established by the Administrator pursuant to this appendix.
For candidate vehicle/fuel systems powered by methanol or liquefied
petroleum gas, the quotient calculated above shall be multiplied by
1.1. The resulting value shall constitute the ``reactivity
adjustment factor'' for the methanol or liquefied petroleum gas-
powered vehicle/fuel system.
(2) For candidate vehicle/fuel systems operating on natural gas,
a ``methane reactivity adjustment factor'' shall be calculated by
dividing the maximum incremental reactivity value for methane given
in paragraph (j) of this appendix by the ``g ozone potential per g
NMOG'' value for the vehicle in the same emission control technology
category operated on conventional gasoline as listed in
Sec. 86.1777(b)(5) or established by the Administrator pursuant to
this appendix.
(h) The Administrator shall assign a reactivity adjustment
factor unique to a specific engine family at the request of a
vehicle manufacturer provided that each of the following occurs:
(1)(i) The manufacturer submits speciated NMOG exhaust emission
profiles to the Administrator obtained from emission testing a
minimum of four different vehicles representative of vehicles that
will be certified in the engine family. The test vehicles shall
include the official emission-data vehicle(s) for the engine family,
and the mileage accumulation of each vehicle shall be at or greater
than 4000 miles. One speciated profile shall be submitted for each
test vehicle. Emission levels of each constituent NMOG shall be
measured according to Chapter 5 of the California Regulatory
Requirements Applicable to the National Low Emission Vehicle Program
(October, 1996). These procedures are incorporated by reference (see
Sec. 86.1). For the emission-data vehicle(s), the speciated
profile(s) shall be obtained from the same test used to obtain the
official exhaust emission test results for the emission-data vehicle
at the 4,000 mile test point. The manufacturer shall calculate ``g
ozone potential per g NMOG'' values for each speciated NMOG exhaust
emission profile in accordance with the procedures specified in
paragraphs (b), (c), and (d) of this appendix. By using these ``g
ozone potential per g NMOG'' values, the manufacturer shall
calculate a ``reactivity adjustment factor'' for each test vehicle
in accordance with the procedure specified in paragraph (g) of this
appendix. A ``reactivity adjustment factor'' for the engine family
shall be calculated by taking the arithmetic mean of the
``reactivity adjustment factor'' obtained for each test vehicle. The
95 percent upper confidence bound (95% UCB) shall be calculated
according to the equation:
[GRAPHIC] [TIFF OMITTED] TR06JN97.003

where:
RAF<INF>m</INF> = mean ``reactivity adjustment factor'' calculated
for the engine family.
RAF<INF>i</INF> = ``reactivity adjustment factor'' calculated for
the i'th test vehicle.
n = number of test vehicles.

(ii) The 95 percent upper confidence bound of the ``reactivity
adjustment factor'' for the engine family shall be less than or
equal to 115 percent of the engine family ``reactivity adjustment
factor.''
(2) The manufacturer submits an ``ozone deterioration factor''
for the engine family. To determine the ``ozone deterioration
factor,'' the manufacturer shall perform two tests at each mileage
interval for one or more durability vehicle(s) tested in accordance
with the procedures and conditions specified in subpart R of this
part for calculating mass deterioration factors. The Administrator
shall approve the use of other mileage intervals and procedures if
the manufacturer can demonstrate that equivalently representative
``ozone deterioration factors'' are obtained. One speciated profile
shall be submitted for each test. Emission levels of each
constituent NMOG shall be measured according to Chapter 5 of the
California Regulatory Requirements Applicable to the National Low
Emission Vehicle Program (October, 1996). These procedures are
incorporated by reference (see Sec. 86.1). A mean g/mi NMOG mass
value and a mean ``g ozone per g NMOG'' value shall be calculated by
taking the arithmetic mean of each measurement from the speciated
profiles. These results shall be multiplied together to obtain a
mean ``total g ozone potential per mile'' value at each mileage
interval. A mean ``ozone deterioration factor'' shall be calculated
in accordance with the procedures in Sec. 86.1777

[[Page 31267]]

and this appendix except that the mean total ``g ozone potential per
mile'' value determined at each mileage interval shall be used in
place of measured mass emissions. If the ``ozone deterioration
factor'' is determined to be less than 1.00, the ``ozone
deterioration factor'' shall be assigned a value of 1.00. The
``ozone deterioration factor'' shall be multiplied by the product of
the official exhaust NMOG mass emission results at the 4000 mile
test point and the mean ``reactivity adjustment factor'' for the
engine family to obtain the NMOG certification levels used to
determine compliance with the NMOG emission standards.
(3) The speciated profiles, mean ``reactivity adjustment
factor'' for the engine family, and ``ozone deterioration factor''
are provided to the Administrator with the certification application
for the engine family.
(i) Gasoline meeting the specifications listed in the following
tables shall be used to determine the ``g ozone potential per g
NMOG'' of conventional gasoline (the test methods used for each fuel
property shall be the same as the test method for the identical fuel
property listed in Sec. 86.1771):

------------------------------------------------------------------------
Fuel property Limit
------------------------------------------------------------------------
Sulfur, ppm by weight...................................... 300 <plus-
minus> 50
Benzene, volume percent.................................... 1.6 <plus-
minus> 0.3
Reid vapor pressure, psi................................... 8.7 <plus-
minus> 0.3
------------------------------------------------------------------------

------------------------------------------------------------------------
Distillation, D-86 degrees F
------------------------------------------------------------------------
10%........................................................ 115-135
50%, maximum............................................... 240
90%........................................................ 323-333
EP, maximum................................................ 420
------------------------------------------------------------------------

------------------------------------------------------------------------
Hydrocarbon Type, volume percent
------------------------------------------------------------------------
Total Aromatics............................ 32 <plus-minus> 3.0
Multi-substituted alkyl aromatics.......... 21 <plus-minus> 3.0
Olefins.................................... 12 <plus-minus> 3.0
Saturates.................................. remainder
------------------------------------------------------------------------

(j) The maximum incremental reactivities to be used in paragraph
(b) of this appendix are provided in the table in this paragraph
(j). Any manufacturer which intends to use the table shall submit to
the Administrator a list which provides the specific organic gases
measured by the manufacturer and the maximum incremental reactivity
value assigned to each organic gas prior to or with the submittal of
a request for the use of a reactivity adjustment factor unique to a
specific engine family. The Administrator may deny such requests if
he or she determines that the maximum incremental reactivity value
assignments are made incorrectly. The table follows:

Maximum Incremental Reactivity (MIR) Values
[Units: grams ozone/gram organic gas]
------------------------------------------------------------------------
CAS# Compound MIR
------------------------------------------------------------------------
Alcohols
------------------------------------------------------------------------
00067-56-1................... methanol...................... 0.56
00064-17-5................... ethanol....................... 1.34
------------------------------------------------------------------------
Light End and Mid-Range Hydrocarbons (Listed in approximate elution
order)
------------------------------------------------------------------------
methane....................... 0.0148
00074-85-1................... ethene........................ 7.29
00074-86-2................... ethyne........................ 0.50
00074-84-0................... ethane........................ 0.25
00115-07-1................... propene....................... 9.40
00074-98-6................... propane....................... 0.48
00463-49-0................... 1,2-propadiene................ 10.89
00074-99-7................... 1-propyne..................... 4.10
00075-28-5................... methylpropane................. 1.21
00115-11-7................... 2-methylpropene............... 5.31
00106-98-9................... 1-butene...................... 8.91
00106-99-0................... 1,3-butadiene................. 10.89
00106-97-8................... n-butane...................... 1.02
00624-64-6................... trans-2-butene................ 9.94
00463-82-1................... 2,2-dimethylpropane........... 0.37
00107-00-6................... 1-butyne...................... 9.24
00590-18-1................... cis-2-butene.................. 9.94
00563-45-1................... 3-methyl-1-butene............. 6.22
00078-78-4................... 2-methylbutane................ 1.38
00503-17-3................... 2-butyne...................... 9.24
00109-67-1................... 1-pentene..................... 6.22
00563-46-2................... 2-methyl-1-butene............. 4.90
00109-66-0................... n-pentane..................... 1.04
00078-79-5................... 2-methyl-1,3-butadiene........ 9.08
00646-04-8................... trans-2-pentene............... 8.80
00558-37-2................... 3,3-dimethyl-1-butene......... 4.42
00627-20-3................... cis-2-pentene................. 8.80
00689-97-4................... 1-buten-3-yne................. 9.24
00513-35-9................... 2-methyl-2-butene............. 6.41
00542-92-7................... 1,3-cyclopentadiene........... 7.66
00075-83-2................... 2,2-dimethylbutane............ 0.82
00142-29-0................... cyclopentene.................. 7.66
00691-37-2................... 4-methyl-1-pentene............ 4.42
00760-20-3................... 3-methyl-1-pentene............ 4.42
00287-92-3................... cyclopentane.................. 2.38
00079-29-8................... 2,3-dimethylbutane............ 1.07
01634-04-4................... 1-methyl-tert-butyl-ether..... 0.62
00691-38-3................... 4-methyl-cis-2-pentene........ 6.69
00107-83-5................... 2-methylpentane............... 1.53
00674-76-0................... 4-methyl-trans-2-pentene...... 6.69

[[Page 31268]]

00096-14-0................... 3-methylpentane............... 1.52
00763-29-1................... 2-methyl-1-pentene............ 4.42
00592-41-6................... 1-hexene...................... 4.42
00110-54-3................... n-hexane...................... 0.98
13269-52-8................... trans-3-hexene................ 6.69
07642-09-3................... cis-3-hexene.................. 6.69
04050-45-7................... trans-2-hexene................ 6.69
00616-12-6................... 3-methyl-trans-2-pentene...... 6.69
00625-27-4................... 2-methyl-2-pentene............ 6.69
01120-62-3................... 3-methylcyclopentene.......... 5.65
07688-21-3................... cis-2-hexene.................. 6.69
00637-92-3................... 1-ethyl-tert-butyl-ether...... 1.98
00922-62-3................... 3-methyl-cis-2-pentene........ 6.69
00590-35-2................... 2,2-dimethylpentane........... 1.40
00096-37-7................... methylcyclopentane............ 2.82
00108-08-7................... 2,4-dimethylpentane........... 1.78
00464-06-2................... 2,2,3-trimethylbutane......... 1.32
07385-78-6................... 3,4-dimethyl-1-pentene........ 3.48
00693-89-0................... 1-methylcyclopentene.......... 7.66
00071-43-2................... benzene....................... 0.42
03404-61-3................... 3-methyl-1-hexene............. 3.48
00562-49-2................... 3,3-dimethylpentane........... 0.71
00110-82-7................... cyclohexane................... 1.28
00591-76-4................... 2-methylhexane................ 1.08
00565-59-3................... 2,3-dimethylpentane........... 1.51
00110-83-8................... cyclohexene................... 5.67
00589-34-4................... 3-methylhexane................ 1.40
02532-58-3................... cis-1,3-dimethylcyclopentane.. 2.55
00617-78-7................... 3-ethylpentane................ 1.40
00822-50-4................... trans-1,2-dimethylcyclopentane 1.85
00592-76-7................... 1-heptene..................... 3.48
00540-84-1................... 2,2,4-trimethylpentane........ 0.93
14686-14-7................... trans-3-heptene............... 5.53
00142-82-5................... n-heptane..................... 0.81
02738-19-4................... 2-methyl-2-hexene............. 5.53
03899-36-3................... 3-methyl-trans-3-hexene....... 5.53
14686-13-6................... trans-2-heptene............... 5.53
00816-79-5................... 3-ethyl-2-pentene............. 5.53
00107-39-1................... 2,4,4-trimethyl-1-pentene..... 2.69
10574-37-5................... 2,3-dimethyl-2-pentene........ 5.53
06443-92-1................... cis-2-heptene................. 5.53
00108-87-2................... methylcyclohexane............. 1.85
00590-73-8................... 2,2-dimethylhexane............ 1.20
00107-40-4................... 2,4,4-trimethyl-2-pentene..... 5.29
01640-89-7................... ethylcyclopentane............. 2.31
00592-13-2................... 2,5-dimethylhexane............ 1.63
00589-43-5................... 2,4-dimethylhexane............ 1.50
00563-16-6................... 3,3-dimethylhexane............ 1.20
00565-75-3................... 2,3,4-trimethylpentane........ 1.60
00560-21-4................... 2,3,3-trimethylpentane........ 1.20
00108-88-3................... toluene....................... 2.73
00584-94-1................... 2,3-dimethylhexane............ 1.32
00592-27-8................... 2-methylheptane............... 0.96
00589-53-7................... 4-methylheptane............... 1.20
00589-81-1................... 3-methylheptane............... 0.99
15890-40-1................... (1a,2a,3b) -1,2,3- 1.94
trimethylcyclopentane.
00638-04-0................... cis-1,3-dimethylcyclohexane... 1.94
02207-04-7................... trans-1,4-dimethylcyclohexane. 1.94
03522-94-9................... 2,2,5-trimethylhexane......... 0.97
00111-66-0................... 1-octene...................... 2.69
14850-23-8................... trans-4-octene................ 5.29
00111-65-9................... n-octane...................... 0.61
13389-42-9................... trans-2-octene................ 5.29
02207-03-6................... trans-1,3-dimethylcyclohexane. 1.94
07642-04-8................... cis-2-octene.................. 5.29
01069-53-0................... 2,3,5-trimethylhexane......... 1.14
02213-23-2................... 2,4-dimethylheptane........... 1.34
02207-01-4................... cis-1,2-dimethylcyclohexane... 1.94
01678-91-7................... ethylcyclohexane.............. 1.94
00926-82-9................... 3,5-dimethylheptane........... 1.14
00100-41-4................... ethylbenzene.................. 2.70

[[Page 31269]]

03074-71-3................... 2,3-dimethylheptane........... 1.14
00108-38-3................... m-&p-xylene................... 7.64
02216-34-4................... 4-methyloctane................ 1.14
03221-61-2................... 2-methyloctane................ 1.14
02216-33-3................... 3-methyloctane................ 1.14
00100-42-5................... styrene(ethenylbenzene)....... 2.22
00095-47-6................... o-xylene...................... 6.46
00124-11-8................... 1-nonene...................... 2.23
00111-84-2................... n-nonane...................... 0.54
00098-82-8................... (1-methylethyl)benzene........ 2.24
15869-87-1................... 2,2-dimethyloctane............ 1.01
04032-94-4................... 2,4-dimethyloctane............ 1.01
00103-65-1................... n-propylbenzene............... 2.12
00620-14-4................... 1-methyl-3-ethylbenzene....... 7.20
00622-96-8................... 1-methyl-4-ethylbenzene....... 7.20
00108-67-8................... 1,3,5-trimethylbenzene........ 10.12
00611-14-3................... 1-methyl-2-ethylbenzene....... 7.20
00095-63-6................... 1,2,4-trimethylbenzene........ 8.83
00124-18-5................... n-decane...................... 0.47
00538-93-2................... (2-methylpropyl)benzene....... 1.87
00135-98-8................... (1-methylpropyl)benzene....... 1.89
00535-77-3................... 1-methyl-3-(1- 6.45
methylethyl)benzene.
00526-73-8................... 1,2,3-trimethylbenzene........ 8.85
00099-87-6................... 1-methyl-4-(1- 6.45
methylethyl)benzene.
00496-11-7................... 2,3-dihydroindene(indan)...... 1.06
00527-84-4................... 1-methyl-2-(1- 6.45
methylethyl)benzene.
00141-93-5................... 1,3-diethylbenzene............ 6.45
00105-05-5................... 1,4-diethylbenzene............ 6.45
01074-43-7................... 1-methyl-3-n-propylbenzene.... 6.45
01074-55-1................... 1-methyl-4-n-propylbenzene.... 6.45
00135-01-3................... 1,2-diethylbenzene............ 6.45
01074-17-5................... 1-methyl-2-n-propylbenzene.... 6.45
01758-88-9................... 1,4-dimethyl-2-ethylbenzene... 9.07
00874-41-9................... 1,3-dimethyl-4-ethylbenzene... 9.07
00934-80-5................... 1,2-dimethyl-4-ethylbenzene... 9.07
02870-04-4................... 1,3-dimethyl-2-ethylbenzene... 9.07
01120-21-4................... n-undecane(hendecane)......... 0.42
00933-98-2................... 1,2-dimethyl-3-ethylbenzene... 9.07
00095-93-2................... 1,2,4,5-tetramethylbenzene.... 9.07
03968-85-2................... (2-methylbutyl)benzene........ 1.07
00527-53-7................... 1,2,3,5-tetramethylbenzene.... 9.07
01074-92-6................... 1-(1,1-dimethylethyl)-2- 5.84
methylbenzene.
00488-23-3................... 1,2,3,4-tetramethylbenzene.... 9.07
00538-68-1................... n-pentylbenzene............... 1.70
00098-19-1................... 1-(1,1-dimethylethyl)-3,5- 7.50
DMbenzene.
00091-20-3................... naphthalene................... 1.18
00112-40-3................... n-dodecane.................... 0.38
------------------------------------------------------------------------
Carbonyl Compounds
------------------------------------------------------------------------
00050-00-0................... formaldehyde.................. 7.15
00075-07-0................... acetaldehyde.................. 5.52
00107-02-8................... acrolein...................... 6.77
00067-64-1................... acetone....................... 0.56
00123-33-6................... propionaldehyde............... 6.53
00123-72-8................... butyraldehyde................. 5.26
00066-25-1................... hexanaldehyde................. 3.79
00100-52-7................... benzaldehyde.................. -0.55
00078-93-3................... methyl ethyl ketone (2- 1.18
butanone).
00078-85-3................... methacrolein.................. 6.77
04170-30-3................... crotonaldehyde................ 5.42
00110-62-3................... valeraldehyde................. 4.41
00620-23-5................... m-tolualdehyde................ -0.55
------------------------------------------------------------------------

[[Page 31270]]

38. Appendix XVIII is added to part 86 to read as follows:
Appendix XVIII to Part 86--Statistical Outlier Identification Procedure
for Light-Duty Vehicles and Light Light-Duty Trucks Certifying to the
Provisions of Part 86, Subpart R
Residual normal deviates to indicate outliers are used routinely
and usefully in analyzing regression data, but suffer theoretical
deficiencies if statistical significance tests are required.
Consequently, the procedure for testing for outliers outlined by
Snedecor and Cochran, 6th ed., Statistical Methods, PP. 157-158,
will be used. The method will be described generally, then by
appropriate formulae, and finally a numerical example will be given.
(a) Linearity is assumed (as in the rest of the deterioration
factor calculation procedure), and each contaminant is treated
separately. The procedure is as follows:
(1) Calculate the deterioration factor regression as usual, and
determine the largest residual in absolute value. Then recalculate
the regression with the suspected outlier omitted. From the new
regression line calculate the residual at the deleted point, denoted
as (y<INF>i</INF>-y<INF>i</INF>'). Obtain a statistic by dividing
(y<INF>i</INF>-y<INF>i</INF>') by the square root of the estimated
variance of (y<INF>i</INF>-y<INF>i</INF>'). Find the tailed
probability, p, from the t-distribution corresponding to the
quotient (double-tailed), with n-3 degrees of freedom, with n the
original sample size.
(2) This probability, p, assumes the suspected outlier is
randomly selected, which is not true. Therefore, the outlier will be
rejected only if 1-(1-p)ⁿ < 0.05.
(3) The procedure will be repeated for each contaminant
individually until the above procedure indicates no outliers are
present.
(4) When an outlier is found, the vehicle test-log will be
examined. If an unusual vehicle malfunction is indicated, data for
all contaminants at that test-point will be rejected; otherwise,
only the identified outlier will be omitted in calculating the
deterioration factor.
(b) Procedure for the calculation of the t-Statistic for
Deterioration Data Outlier Test.
(1) Given a set of n points, (x<INF>1</INF>, y<INF>1</INF>),
(x<INF>2</INF>, y<INF>2</INF>) * * * (x<INF>n</INF>, y<INF>n</INF>).
Where:

x<INF>i</INF> is the mileage of the i^th data point.
y<INF>i</INF> is the emission of the i^th data point.
Assume model:

y = a+<greek-b>(x-x)+<belong-2>

(2)(i) Calculate the regression line.

y = a+b(x-x)

(ii) Suppose the absolute value of the i^th residual

(y<INF>i</INF>-Y<INF>i</INF>) is the largest.

(3)(i) Calculate the regression line with the i^th
point deleted.

y = a\1\+b\1\(x-x)
[GRAPHIC] [TIFF OMITTED] TR06JN97.004

Where:

y¹ is the observed suspected outlier.
y<INF>i</INF> is the predicted value with the suspected outlier
deleted.
[GRAPHIC] [TIFF OMITTED] TR06JN97.005

(x is calculated without the suspected outlier)
[GRAPHIC] [TIFF OMITTED] TR06JN97.006

(iii) Find p from the t-statistic table

Where:

p = prob ( <lm-bond>t(n-3)<rm-bond> <gr-thn-eq> t)
t(n-3) is a t-distributed variable with n-3 degrees of freedom.

(iv) y<INF>i</INF> is an outlier if 1-(1-p)ⁿ < .05

------------------------------------------------------------------------
x y y y-y
------------------------------------------------------------------------
8............................................ 59 56.14 2.86
6............................................ 58 58.17 -0.17
11........................................... 56 53.10 2.90
22 \1\....................................... 53 41.96 11.04
14........................................... 50 50.06 -0.06
17........................................... 45 47.03 -2.03
18........................................... 43 46.01 -3.01
24........................................... 42 39.94 2.06
19........................................... 39 45.00 -6.00
23........................................... 38 40.95 -2.95
26........................................... 30 37.91 -7.91
40........................................... 27 23.73 3.27
------------------------------------------------------------------------
\1\ Suspected outlier.

(3)(i) Assume model:

y = a+<greek-b>(x-x)+<belong-2>
y = 45-1.013(x-x)

(ii) Suspected point out of regression:

y = 44.273-1.053(x-x)
y = 44.273-1.053(22-18.727) = 40.827
y<INF>i</INF>-y<INF>i</INF<ls-thn-eq> = 12.173
[GRAPHIC] [TIFF OMITTED] TR06JN97.007

[FR Doc. 97-12366 Filed 6-5-97; 8:45 am]
BILLING CODE 6560-50-P

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